Hangzhou Hikvision Digital Technology Co., Ltd.
2020 Annual Report
April 17th 2021
Hikvision 2020 Annual Report
To Shareholders
In the past three years, we have met some challenges in development, and our
management has been dedicated to their duties with diligence to ensure the Company’s
stable operation with a view to long-term development. The Company's revenue has
increased from RMB 41.91 billion in 2017 to RMB 63.50 billion in 2020, with a three-
year compound growth rate of 14.86%; and the Company's net profit has risen 12.46%
from RMB 9.41 billion in 2017 to RMB 13.39 billion in 2020 by the three-year
compound growth rate.
For us, technological innovation is the key to sustainable development. To respond
to various challenges and to embrace new opportunities, our R&D expense ratio grew
from 7.62% in 2017 to 8.99% in 2018, 9.51% in 2019, and 10.04% in 2020. In addition,
we have accelerated our steps to deploy big data businesses and develop innovative
businesses. And in order to meet the challenges, the spin-off and public listing of
EZVIZ Network has also been initiated.
The application of artificial intelligence (AI) technology has been speeded up both
domestically and globally. And we have sniffed the chances brought by the rise of big
data technology applications, by the fusion of multi-detector technology, and by the
end users’ improved awareness of smart city, enterprise digital transformation and the
Internet of Things (IoT). In the three years to come, we will invest more in Research
and Development (R&D) and further improve operational efficiency to reward
shareholders. And we believe that this will be an opportunity for us to grow.
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Hikvision 2020 Annual Report
This year marks the 20th anniversary of Hikvision since its establishment. We have
grown from 28 to more than 40,000 in staff number, and every setback and test have
toughened us, bringing us the new starts for growth and development. And all should
be attributed to this great era.
Being open, transparent, and honest as always, we will pace ourselves to
encounter challenges. And we will also pay attention to all kinds of new opportunities.
Finally, we’d like to extend our sincere thanks to all shareholders for your trust
and support to the Company's management team!
See far, go further!
Hangzhou Hikvision Digital Technology Co., Ltd.
Board of Directors
2021.04
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Hikvision 2020 Annual Report
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management of
Hangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as the “Company”) hereby
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.
Chen Zongnian, the Company's legal representative, Jin Yan, the person in charge of the
accounting work, and Zhan Junhua, the person in charge of accounting department (accounting
supervisor) hereby declare and warrant that the financial statements in this annual report are authentic,
accurate and complete.
All directors of the Company have attended the board meeting to review this report.
The profit distribution proposal passed upon deliberation at the meeting of the Board of Directors
is set out as follows: based on the Company’s current total share capital of 9,343,417,190 shares, the
Company proposed to distribute cash dividend of RMB 8 (tax inclusive) per each 10 shares to all
shareholders, bonus share and share distribution from capital reserve is nil.
Note:
This document is a translated version of the Chinese version 2020 Annual Report (“2020 年年度报
告”), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2020 Annual Report may be obtained at www.cninfo.com.cn.
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Hikvision 2020 Annual Report
Please read the full annual report and pay particular attention to the following risk factors:
1) Global COVID-19 epidemic risk: The global threat of COVID-19 epidemic has not yet been eliminated,
and the potential threats brought about by the aggressive monetary policies of various countries during
the epidemic have not yet fully manifested. The Company will maintain its business strategy focusing on
stable and healthy development and closely monitor the impact of the epidemic, to ensure the normal
operation of the Company’s businesses. If the epidemic leads to the deterioration of the global economy,
the adverse influences on the Company’s businesses will escalate accordingly.
2) Risk of technology upgrade: Technologies such as artificial intelligence (AI), big data, cloud computing,
and edge computing are developing rapidly. The speed of technology diffusion is accelerating. If the
Company is unable to closely track and adapt to the changes in cutting-edge technologies, or fails to
quickly realize business innovation, the risk of uncertainty in the company's future development will
increase.
3) Risk of internal management: The continual expansion of business scale, the continuous increase of
new products and new businesses, the continuous growth in total number of employees, which led to a
significant rise of internal management complexity and higher requirements on the Company's
management system. The Company’s sustainable development will face certain risks if the management
level fails to proportionally address the Company’s business expansion.
4) Supply chain risks: COVID-19 epidemic and political conflicts have brought adverse impact on the
global raw material supply system. The Company has been making efforts to enhance management for
our supply chain and optimize inventory adjustments and controls. However, if systemic risks arise in the
global supply chain, the Company’s operating capabilities may be affected.
5) Global business risks: The Company operates in more than 150 countries and regions around the world.
As the potential risks of epidemic, debt issues, political conflicts, and exchange rate fluctuations in various
countries around the world are difficult to eliminate, the Company’s overseas business operations may be
adversely affected.
6) Legal and compliance risk: The world's multilateral trading system is facing adverse impacts. The laws
and regulations of various regions that need to be complied with for business activities are very
complicated. China and overseas countries have stricter data supervision and business compliance
requirements. If the Company's legal compliance capbilities cannot keep up with the situation, it will bring
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Hikvision 2020 Annual Report
adverse impacts on the Company's operations.
7) Risk of exchange rate fluctuation: The Company carries out operations in various countries and regions
with different currencies, mainly settled in non-RMB currency (mainly in USD). Exchange rate
fluctuations could have impact on foreign exchange exposures arising out of sales, procurement and
financing, which could likely affect the profitability level of the Company.
8) Risk of cybersecurity: The Company has always attached great importance and taken active measures
to enhance cybersecurity performance of our products and systems. However, in the context of Internet
applications, there is still a possibility of deliberate attempts, including computer viruses, malicious
software, hacker and others to intentionally attack our systems or products, causing cybersecurity issues.
9) Risk of intellectual property (IP) rights: The Company continues to maintain a relatively large scale of
R&D investment, and produces considerable technical milestones. At the same time, the Company
implements well-organized intellectual property right (IPR) protection measures. However, the risk of
intellectual property disputes and the risk of intellectual property rights violations still exist.
The above notices might not be all-inclusive of all other potential risks. Please pay attention to potential investment
risks.
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Hikvision 2020 Annual Report
CONTENTS
To Shareholders .................................................................................................................................................. 1
Section I Important Notes, Contents and Definitions ...................................................................................... 3
Section II Corporate Profile & Key Financial Data......................................................................................... 9
Section III Corporate Business Summary ...................................................................................................... 14
Section IV Discussion and Analysis on Business Operation .......................................................................... 95
Section V Significant Events .......................................................................................................................... 118
Section VI Changes in Shares and Information about Shareholders ......................................................... 147
Section VII Information of Preferred Shares ............................................................................................... 159
Section VIII Information about Convertible Corporate Bonds .................................................................. 160
Section IX Information about Directors, Supervisors, Senior Management and Employees .................. 161
Section X Corporate Governance .................................................................................................................. 185
Section XI Corporate Bonds .......................................................................................................................... 194
Section XII Financial Report ......................................................................................................................... 195
Section XIII Documents Available for Reference ........................................................................................ 355
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Hikvision 2020 Annual Report
Definitions
Term Definition
Reporting Period From January 1st 2020 to December 31th 2020
Articles of Associations Articles of Associations for Hangzhou Hikvision Digital Technology Co., Ltd
Hikvision, our Company, the
Hangzhou Hikvision Digital Technology Co., Ltd
Company
China Electronics Technology Group Ltd., the actual controller of the
CETC
Company
CETHIK CETHIK Group Co., Ltd. Controlling Shareholder of the Company
Hangzhou Qianmo Jiaying Equity Investment Partnership (Limited
Qianmo Jiaying Partnership) (formerly Hangzhou Hikvision Equity Investment Partnership
(Limited Partnership))
EZVIZ, EZVIZ Network Hangzhou Ezviz Network Co., Ltd.(According to the context, also refers to
the corresponding business)
HikRobot Hangzhou Hikrobot Technology Co., Ltd. (According to the context, also
refers to the corresponding business)
HikAuto Hangzhou HikAuto Technology Co., Ltd. (According to the context, also
refers to the corresponding business)
HikMicro Hangzhou Hikmicro Sensing Technology Co., Ltd. (According to the
context, also refers to the corresponding business)
HikSemi, Hikstorage Wuhan Hikstorage Technology Co., Ltd. (According to the context, also
refers to the corresponding business)
HikImaging Hangzhou Hikmed Imaging Technology Co., Ltd. (According to the context,
also refers to the corresponding business)
HikFire Hangzhou Hikfire Technology Co., Ltd. (According to the context, also
refers to the corresponding business)
Hangzhou Rayin Technology Co,. Ltd. (According to the context, also refers
HikSecurityCheck, HikRayin
to the corresponding business)
Located in Binjiang District, Hangzhou, Zhejiang Province, the planned use
Hangzhou Innovation Industry Park
is for R&D, office space and supporting facilities.
Chengdu Science and Technology Located in Chengdu, Sichuan Province, the planned use is for R&D, office
Park space and supporting facilities.
Chongqing Science and Technology Located in Chongqing, the planned use is for production plants, warehouses
Park and supporting facilities.
Located in Xi'an, Shaanxi Province, the planned use is for R&D, office
Xi’an Science and Technology Park
space and supporting facilities.
Wuhan Science and Technology Located in Wuhan, Hubei Province, the planned use is for R&D, office
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Hikvision 2020 Annual Report
Term Definition
Park space and supporting facilities.
Located in Wuhan, Hubei Province, the planned use is for production plants,
Wuhan Intelligence Industry Park
warehouses and supporting facilities.
Zhengzhou Science and Technology Located in Zhengzhou, Henan Province, the planned use is R&D, office
Park space and supporting facilities, etc.
EZVIZ smart home product industry park, located in Hangzhou, Zhejiang
EZVIZ Industry Park Province, is planned to be used for R&D, office space and supporting
facilities of Hangzhou EZVIZ Network Co., Ltd.
A long investment cycle, business prospects uncertain, has the high risk and
uncertainty, in need for direct or indirect investment in exploration, in order
for the Company to timely enter into new areas of business. Initially
disclosed in Announcement about Management Measures for Core Staff
Innovative Business Investment in Innovative Business (《核心员工跟投创新业务管理办法》)
(www.cninfo.com.cn).
In this report, innovative business also refers to EZVIZ, HikRobot, HikAuto,
HikMicro, HikStorage, HikImaging, HikFire, HikRayin and their related
business or products.
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Hikvision 2020 Annual Report
Section II Corporate Profile & Key Financial Data
I. Corporate Information
Stock abbreviation HIKVISION Stock code 002415
Stock exchange where the shares of the Company
Shenzhen Stock Exchange
are listed
Name of the Company in Chinese 杭州海康威视数字技术股份有限公司
Abbr. of the Company name in Chinese 海康威视
Name of the Company in English (if any) HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO., LTD
Abbr. of the Company name in English (if any) HIKVISION
Legal representative Chen Zongnian
Registered address No. 555 Qianmo Road, Binjiang District, Hangzhou
Postal code of Registered address 310051
Business address No. 518 WuLianWang Street, Binjiang District, Hangzhou
Postal code of Business address 310051
Company website www.hikvision.com
E-mail market@hikvision.com; ir@hikvision.com
II. Contacts and contact information
Board Secretary Securities Affairs Representative
Name Huang Fanghong Zhou Xinyi
No. 518 WuLianWang Street, Binjiang No. 518 WuLianWang Street, Binjiang
Address
District, Hangzhou District, Hangzhou
Tel. 0571-88075998; 0571-89710492 0571-89710492
Fax 0571-89986895 0571-89986895
E-mail hikvision@hikvision.com hikvision@hikvision.com
III. Information disclosure and place of the report
Newspaper designated by the Company for information disclosure Securities Times, Shanghai Securities Journal
Website specified by CSRC for release of the Annual Report www.cninfo.com.cn
Place where the Annual Report is available for inspection Office of the Board of Directors of the Company
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Hikvision 2020 Annual Report
IV. Company Registration and Alteration
Organization code 91330000733796106P
During the reporting period, there is no change in the Company's business
scope. The Company's business scope is: research and development (R&D)
and production of electronic products (including explosion-proof electrical
products, communication equipment and related ancillary equipment,
multimedia equipment, transmission and display equipment), fire protection
and control products, big data and Internet of Things hardware and software
products aircrafts, robots, intelligent equipment and intelligent systems, real-
Changes in principle business activities since the time communication systems, auto parts and accessories, automotive electrical
Company was listed (if any) signal equipment, servers and supporting hardware and software products;
Sales of self-produced products; provide technical services, electronic
technology consulting service, training service (excluding the organizational
training), electronic equipment installation; electrical engineering, design,
construction and maintenance of intelligent system projects. (except country
prohibited and restricted items, relating to the specific mandatory license
certificate) (subject to ratification in accordance with the project, approved by
the relevant departments to operate)
Changes of controlling shareholders of the
No change during the reporting period
Company (if any)
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Deloitte Touche Tohmatsu Certified Public Accountants LLP
Business address of the accounting firm 30F Bund Center 222 Yan An Road East Shanghai
Name of accountants for writing signature Tang Lianjiong, Zhang Shushu
Sponsor institution engaged by the Company to continuously perform its supervisory function during the Reporting
Period
□ Applicable √ Inapplicable
Financial advisor engaged by the Company to perform the duties of continuous supervision during the reporting
period
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
VI. Key accounting data and Financial Indicators
Whether the Company performed a retrospective adjustment or restatement of previous accounting data
□Yes √No
Unit: RMB
YoY Change
2020 2019 2018
(%)
Operating income (RMB) 63,503,450,891.78 57,658,110,065.22 10.14% 49,837,132,481.61
Net profit attributable to shareholders of the Company 13,385,526,714.15 12,414,587,690.45 7.82% 11,352,132,255.21
(RMB)
Net profit attributable to shareholders of the Company
12,805,839,276.44 12,037,518,321.42 6.38% 10,983,228,170.60
excluding non-recurring gains and losses (RMB)
Net cash flows from operating activities (RMB) 16,088,156,566.67 7,767,720,171.14 107.12% 9,113,286,027.76
Basic earnings per share (RMB/share) 1.445 1.343 7.59% 1.240
Diluted earnings per share (RMB/share) 1.444 1.343 7.52% 1.234
Weighted average ROE 27.72% 30.53% -2.81% 33.99%
At December 31st At December 31st YoY Change At December 31st
2020 2019 (%) 2018
Total assets (RMB) 88,701,682,384.20 75,358,000,240.29 17.71% 63,491,508,747.79
Net assets attributable to shareholders of the Company
53,794,311,162.05 44,904,033,876.83 19.80% 37,589,417,652.35
(RMB)
The total share capital of the Company as of the previous trading day of the annual report disclosure:
The total share capital of the Company as of the previous trading day of the annual report disclosure
9,343,417,190
(share)
Fully diluted earnings per share calculated with the latest share capital
Fully diluted earnings per share (RMB/share) calculated with the latest share capital 1.433
VII. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
There is no difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards in the reporting period.
3. Explanation of the differences in accounting data under domestic and overseas accounting standards
□ Applicable √ Inapplicable
VIII. Key Quarterly Financial Indicators
Unit：RMB
st nd rd th
1 Quarter 2 Quarter 3 Quarter 4 Quarter
Operating income 9,428,902,974.38 14,842,256,269.38 17,750,035,645.90 21,482,256,002.12
Net profit attributable to shareholders of the
1,496,269,608.01 3,127,703,222.86 3,814,978,645.77 4,946,575,237.51
Company
Net profit attributable to shareholders of the
Company excluding non-recurring gains 1,469,074,026.95 2,994,424,350.73 3,576,189,605.69 4,766,151,293.07
and losses
Net cash flows from operating activities -3,982,048,164.94 4,052,014,505.51 5,464,651,652.26 10,553,538,573.84
Whether there is significant difference between the above individual or aggregate financial indicators and that of
what disclosed in the quarterly report, half-year report
□ Yes √ No
V. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of International
Financial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of Overseas
Accounting Standards and China Accounting Standards in the reporting period.
3. Explanation of the differences in accounting data under domestic and overseas accounting standards
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
IV. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Inapplicable
Unit：RMB
Item 2020 2019 2018
Profit or loss from disposal of non-current assets (including
-5,836,675.36 -2,053,875.22 4,975,825.83
the write-off for the impairment provision of assets)
The government subsidies included in the current profits and
losses (excluding the government subsidy closely related to
regular course of business of the Company and government 571,403,657.30 413,790,429.84 319,304,315.50
subsidy based on standard quota or quantitative continuous
application according to the state industrial policy.)
The investment cost of the company to obtain subsidiaries,
associates and joint ventures is less than the income
281,193.50
generated by the fair value of the investee's identifiable net
assets when the investment is obtained
Net gains and losses from beginning of the reporting period
to the merge date for the subsidiary merged involving -885,138.65 -736,986.11
enterprises under common control
Profits and losses attributed to change in fair value for held-
for-trading financial assets, derivative financial assets, held-
for-trading financial liabilities, and derivative financial
liabilities; and investment income from disposal of held-for-
trading financial assets, derivative financial assets, held-for- 98,373,869.75 26,872,639.66 62,153,461.82
trading financial liabilities, derivative financial liabilities and
other debt investments, excluding the effective hedging
business related to the regular business operation of the
Company.
Other non-operating income and expenditures except the
74,007,631.14 52,155,026.79 94,651,413.78
items mentioned above
Less: Impact of income tax 109,931,807.07 86,193,406.35 84,510,487.85
Impact of the minority interests (after tax) 48,610,431.55 26,616,307.04 26,933,458.36
Total 579,687,437.71 377,069,369.03 368,904,084.61
Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the definition in the
, or classifies any non-recurring gain/loss item mentioned in the
aforementioned note as a recurrent gain/loss item
□ Applicable √ Inapplicable
In the reporting period, the Company did not classify an item as a non-recurring gain/loss according to the
definition in the into a recurrent gain/loss item
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Hikvision 2020 Annual Report
Section III Corporate Business Summary
I. The principal business of the Company during the reporting period
1. Business Scope
Vision, hearing, smell, taste and touch together constitute the five senses of human beings. As for information
perception, vision may be deemed as the most vital means, as more than 80% information obtained by human beings
comes from sight. Deeply engaged in video technology development for the past two decades, Hikvision has been
upgrading machine’s video perception ability from capturing the target and capturing clearly all the way to
understanding the target. And based on the video technology, we have built a complete value chain spanning from
R&D, manufacturing to marketing.
For human beings, what you see is what you get, as human vision can only perceive the visible light, which is
only a small segment of 390-700 nanometers in the electromagnetic spectrum. Varying in wavelength and frequency,
electromagnetic waves can extend from visible light to both ends. One end is a frequency band with longer
wavelengths: infrared rays, microwave, and radio waves, etc., and the other end is a frequency band with shorter
wavelengths: ultraviolet rays, X-rays, and gamma rays, etc. In light of the strategic positioning of the perception
business of the Internet of Things (IoT), Hikvision has expanded and deployed new business in a planned manner,
and built the main technology architecture for multi-dimensional perception by establishing five main technical
lines in visible light, millimeter wave, far-infrared rays, X-rays and sound wave. On this basis, we’ve managed to
offer a richer and broader technical product portfolio.
Hikvision, focusing on the intelligent IoT, big data services and intelligent business, offers intelligent IoT
products and services integrating software and hardware, cloud and edges, as well as big data platform products and
services combining IoT and information network, big data and intelligence, and develops innovative businesses in
smart home, mobile robots and machine vision, auto electronics, intelligent storage, infrared thermal imaging,
intelligent fire protection and control, intelligent security check, intelligent medical services, etc. Experience
gathered bit by bit in perception platforms, data platforms and application platforms naturally drive the R&D of
more perception means, the acquisition of more perception data, and the development of more perception
applications. Perception technologies such as millimeter wave, far-infrared rays, X-rays and sound wave together
empower Hikvision to enlarge its business scope and build an open and cooperative ecosystem to serve users in the
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Hikvision 2020 Annual Report
public service sector, big enterprises and small and medium-sized enterprises, and contribute to the construction
and service of intelligent business such as smart cities and digital enterprises.
2. Core Capabilities
2.1 Integration of Software and Hardware: Mutual Promotion between Software and Hardware Product
Systems
In recent years, Hikvision has unified the software development system, standardized the hardware
development process, provided a unified embedded software platform for various equipment, and unified interface
specifications for networking accessing and operation and maintenance management of various equipment, ushering
the development of software and hardware products into a benign iterative cycle.
2.1.1 Unified Equipment Software Platform
Various hardware product types, diversified product operating environments, and different product operation
and maintenance management ways have posed major challenges to the development of the IoT business. In this
context, Hikvision has launched HEOP (Hikvision Embedded Open Platform) to support containerized independent
deployment and flexible scheduling of algorithms or components for the sustainable development of intelligent IoT.
Hikvision is currently migrating its original hardware products to HEOP step by step, with all new products
developed based on this platform. On this unified embedded software platform, all intelligent IoT equipment of
Hikvision will feature the same software foundation to avoid the differences between various hardware development
and operating environments, and support function changes of hardware products through software upgrades to
improve development efficiency significantly.
In addition, partners can realize iterative development of intelligent application functions of intelligent IoT
equipment based on HEOP efficiently, and work with Hikvision to create value for customers.
2.1.2 Unified Software Support for Equipment
Hikvision provides various intelligent IoT equipment with unified access, networking, operation and
maintenance support capabilities through a unified intelligent perception networking platform, making the large-
scale intelligent IoT a reality.
The unified device access framework supports the connection of various video equipment, multi-dimensional
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Hikvision 2020 Annual Report
sensing equipment, and intelligent equipment. With open interfaces and protocols, various intelligent IoT equipment
can access Hikvision’s software platforms. And the development of equipment network access drivers is relatively
separated from application software, that is, we can set up the platform first and then develop device drivers.
Networking is possible in a large scale to support a variety of IoT perception equipment in line with national
standards and multi-industry standard specifications. And the integrated operation and maintenance service platform
is applicable to a variety of IoT devices and IT equipment.
Moreover, partners, through the interface provided by the intelligent perception networking platform, can
connect other manufacturers’ IoT equipment to the same software platform.
2.1.3 R&D Synergy Between Software and Hardware
At Hikvision, the R&D of software or hardware meeting customer requirements, application scenarios,
industry characteristics and other demands is not carried out separately in most cases. Offering the best solutions to
meet users’ demands is our top priority. So, you will find that the hardware development demands may be completed
by the software R&D team, while the software development demands may be undertaken by the hardware R&D
team. We have formed a synergy between these two R&D types with the two teams supporting each other. When
communicating with users on business needs, software personnel will advise them on the hardware equipment they
need; and for the newly developed intelligentequipment, the software team will develop application software that
maximizes their value.
Software Demand Drives Hardware R&D
When understanding the demands of relevant industries and designing software functions, the business team
will analyze the demands for hardware products at the same time, and timely feedback to the hardware products and
AI algorithm team. Take hyperspectral water quality monitor and gas-cloud imaging gas detection explosion-proof
camera as examples:
Hyperspectral water quality monitor: To meet the needs of water resources protection, river and lake
shoreline management and protection, water pollution prevention, water environment governance, water ecological
restoration, law enforcement supervision and other demands, Hikvision’s hardware products and AI algorithm team
has developed a hyperspectral water quality monitor, breaking through the limitations of traditional water quality
monitoring methods. This device retrieves the water quality information with the hyperspectral technology,
including chlorophyll a, total nitrogen, total phosphorus, transparency, COD, turbidity, suspended solids, ammonia
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Hikvision 2020 Annual Report
nitrogen, etc. To adapt to various application scenarios, the team has created an array of product forms including
single-point hyperspectral water quality monitor (for water quality detection in urban/rural rivers, water conservancy
rivers, and natural lakes), and airborne hyperspectral water quality monitor (for urban/rural river basins, lakes,
pollutant discharge monitoring, agriculture and forestry, plant protection, etc.).
Gas-cloud imaging gas detection explosion-proof camera: To meet the gas detection demands of oil and
gas field exploration, petroleum refining, natural gas pipeline transportation, environmental law enforcement and
other scenarios where hazardous gas leakage may occur, Hikvision’s hardware product and AI algorithm team,
going beyond the restrictions of traditional gas monitoring methods, gives play to the unique spectral imaging
technology and detection algorithms to monitor, identify and quantitatively analyze leaking gas in real time,
realizing real-time detection and early warning of dozens of flammable and explosive hydrocarbons such as methane
and ethylene in a highly efficient, long-distance, wide-range, dynamic and intuitive manner.
Hardware Capabilities Drives Software Development
Leveraging Hikvision’s strong hardware research and development capabilities, the hardware team is
committed to introduce new hardware devices. The software team, through in-depth communication with the
hardware team, keeps abreast of the latest developments in hardware products, and rolls out new application
software R&D in a timely manner to maximize the functions of hardware equipment and reflect the application
value of the equipment. Take specific route video relay software, traffic projection and intelligent analysis software
as examples:
Specific route video relay software: The intelligent tracking PTZ dome camera designed by Hikvision
supports functions of automatic target recognition and target positioning of vehicles. To fully give play to the
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Hikvision 2020 Annual Report
functions of this equipment, Hikvision’s software team has created a specific route video relay software, which uses
multiple intelligent tracking PTZ dome cameras to track cross-border vehicle targets, and is applied in the full
seamless video relay of hazardous chemical vehicles and other scenarios.
Traffic projection and intelligent analysis software: The Radar-Assisted Camera developed by Hikvision
combines the strengths of video and radar in perception methods and information perception in a profound way; the
high-precision monitoring capabilities of millimeter-wave radar makes harsh environment no more a trouble, and
the full-structured analysis capabilities unique to video, covering license plates, models, and car logos, body color
recognition, etc., realizes functions such as accurate movement description and behavior analysis of motor vehicles
and non-motor vehicles on the road. To double the might of the equipment, the Hikvision industrial team has
developed the traffic projection and intelligent analysis software. Working together the comprehensive intelligent
collection capabilities of the radar-assisted camera, it can reproduce the real-time road traffic movement, and
accurately depicts the entry and exit of a single vehicle at the intersection, collect precise traffic parameters and
timely detect traffic incidents such as intersection and road section congestion, continuous lane changes to assist in
the diagnosis of intersection traffic operation, and support traffic signal control, comprehensive evaluation of road
safety, and optimization of traffic scheduling.
2.2 Cloud-Edge Fusion: Perception Fusion Empowering Platform
2.2.1 Perception Fusion Empowering Platform: Realizes Intelligent Fusion and Utilization of Front and Back
Ends
Aiming at “co-construction of locations, resource sharing, algorithm co-management, computing power
integration, and service sharing”, Hikvision’s perception fusion empowering platform is geared towards the fusion
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and utilization of industrial or urban IoT perception resources. As for perception resource construction, it supports
access networking, lean management and planning and deployment of front-end devices to realize “co-construction
of locations”. For perception resource utilization, the label association, fast retrieval, and on-demand access of
perception data are readily available for “resource sharing”. In terms of algorithm management, the open training,
unified management, and flexible programming of intelligent algorithms together make “algorithm co-management”
possible. In the aspect of intelligent computing power integration, the platform supports the unified management,
load monitoring and reasonable scheduling of computing power resources to achieve “computing power integration”.
Lastly, in terms of intelligent analysis service, there are directory publishing, business application and service
configuration of intelligent services for “service sharing”.
Hikvision’s perception fusion empowering platform provides competence center, application center,
programming center, investigation and judgment center, operation center, and management center. The competence
center provides the classification and search services of perception resources, and releases intelligent service
capabilities; the application center serves for the application and review management of perception resources and
intelligent analysis services; the programming center is for scene tag management, scene configuration, and
intelligent analysis algorithm programming for the perception resources of the IoT; the investigation and judgment
center features functions such as automatic push of intelligent analysis events, manual investigation and judgment,
event statistics and retrieval; the operation center offers intelligent service applications, intelligent service task
monitoring, execution statistics, regular operation reports and other functions to business managing personnel; the
management center is characterized by management functions covering background resource management
scheduling platform, IoT resources and algorithm resources for technical operation and maintenance personnel.
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2.2.2 AI Open Platform: Makes Front-End Intelligent and Definable
Intelligent industry algorithms available in large number is the premise for the perception fusion empowering
platform to function. Based on existing mature algorithms, it is necessary to provide more algorithm customization
services matching with users’ actual application scenarios. Hikvision’s AI open platform, as a one-stop algorithm
training platform for fragmented industry application scenarios, is capable of training perception algorithms based
on small sample data.
Easy to operate, the AI open platform can generate intelligent algorithms through sample data collection, online
data labeling, and online algorithm training, and deploy the algorithms to front-end and back-end equipment.
Supporting two training modes: public cloud and private cloud, this platform currently has more than 2,000
registered users with over 15,000 intelligent algorithms trained for users in 2020 alone in addition to algorithm
training services offered by Hikvision to its own users.
2.2.3 Algorithm Database: Provides a Basis for Algorithm Reuse
Hikvision’s algorithm database manages algorithms of different vendors, different functions, and different
forms in a unified way, providing a basis for the reuse of intelligent algorithms.
Formulating a complete algorithm description specification, Hikvision’s algorithm database can describe and
manage the name, type, function, technical parameters, application scenarios, operating environment and other
characteristics of the algorithm, so as to provide the appropriate technical environment or scheduling parameters to
deploy, arrange, and manage algorithms, and work together with the resource management scheduling platform to
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realize the unified management of intelligent algorithms and on-demand scheduling.
2.3 Fusion of IoT and Information Network: Data Resource Platform Comes into Play in Multiple Industries
Hikvision’s iDatafusion platform has been applied and promoted in various fields such as public safety, traffic
management, bus scheduling, water conservancy and water affairs, natural resources, financial anti-fraud, and
campus management. Through the fusion, management, mining and service of perception data and business data, it
provides users with data models and applications, and meets users’ business application needs.
2.3.1 iDatafusion Platform: Brings Out a Complete Product System
Hikvision’s iDatafusion platform provides users with data integration, data processing, data analysis, data
sharing, data services, and model repository capabilities.
The data resource platform provides data integration tools such as data integration workbench, general data
collector, data exploration, data definition and data simulation, etc., data processing tools such as data development
workbench, data desensitization and quality inspection, etc., data analysis tools such as BI (Business Intelligence)
visual analysis, data mining engines, knowledge graphs, data cubes, and space-time engines, etc., data sharing tools
such as API (Application Programming Interface) gateways, data cascades, etc., and data service capabilities such
as data catalogs, IoT catalogs, API catalogs, data subscriptions, data exchanges, etc. Among them, data mining
engines and knowledge graphs together constitute the intelligent cognitive open capabilities based on the AI open
platform, and the data analysis operators and data models formed thereby can be further utilized by other analysis
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tools such as the data cubes.
To effectively improve the quality of IoT data, Hikvision advocates IoT data management from the source, and
provides comprehensive management applications for IoT elements, offering a series of management tools such as
equipment management, space calibration, and transportation unit management; to better serve industries, we also
provide a series of optional data service product add-ons packages such as perception data service, multi-
dimensional data fusion service, general application data service, industry application data service, etc., to elevate
the efficiency of application development based on the data resource platform.
2.3.2 Model Repository: Provides a Basis for Model Reuse
With models as the granularity, Hikvision’s model repository provides unified data model deliverables
description specifications to manage the process or task of data tools such as data integration workbench, data
development workbench, data mining engines, data cubes, BI visualization analysis, and API gateways associated
with models. Possessing such capabilities as model release, version management, information inquiry, statistical
analysis, and integrated deployment to serve all 3rd parties developing models based on tools of the iDatafsion
platform, this repository can facilitate model reuse between various projects.
The final deliverable of the data model can be the dataset, API service, or BI visualization chart that supports
the application. A data model can be used for multiple applications, and an application can rely on the support of
multiple data models.
The model repository functions as a foundation for the reuse of data models in multiple application sites.
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2.4 Big Data-intelligence Fusion: Intelligent Application Open Platform Empowers Industries
2.4.1 Intelligent Application Open Platform: Support Universal Intelligent Application Scenarios
Hikvision has set up the intelligent application open platform for edge node applications, edge domain
applications, cloud center applications, and Internet operation applications respectively, to support universal
intelligent application scenarios.
Edge node Hikvision Embedded Open Platform (HEOP): Consists of three parts: development environment,
open content, and standard specifications. Therein, the development environment, with standardized tool chains and
development tools (model toolsets, packaging tools), as well as containerized deployment methods, makes one-click
deployment of development environments possible for cooperating vendors. The open content, through the
abstraction of software functions, provides a unified external capability interface to avoid differences between
products; and through the abstraction of hardware, realizes on-demand use of hardware resources to prevent resource
preemption between different apps. Standard specifications, with a series of related standard specifications such as
open interface specifications, architecture execution specifications, test design specifications, etc., to ensure the
consistency of cross-device and cross-platform implementation.
HEOP features a device-level open platform that supports application decoupling development. Developers
can develop apps independent of intelligent devices to achieve two-way decoupling of product hardware
development and software feature development, thus promoting product development flexibility, shortening product
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development cycles, and improving product development efficiency. For the time being, it has gathered multiple
apps that have been applied to corresponding products; based on its basic capabilities, including audio and video
processing capabilities, deep learning reasoning, etc., partners can develop their own apps leveraging device
resources and open capability interfaces to meet the demands of different scenarios, such as dangerous goods
identification, electric bicycle identification, etc. Partners can also publish their apps on the Hikvision App Store
for promotion and sales; flexible deployment between devices is easy to achieve. No matter whether they are
developed by Hikvision or by a partner manufacturer, they can be directly used across products through a simple
secondary compilation and packaging, to achieve one-time development, multi-machine sharing, and high R&D
efficiency.
Edge domain intelligent application platform (Hikvision iSee): Provides a development framework for edge
domain intelligent applications, and general service capabilities that can be integrated into this framework, including
video live view and playback, access control, video intercom, elevator control and other connected perception
capabilities and video intelligent analysis functions, in addition to a number of optional common functional
components. Developers can further develop dedicated components that meet specific application requirements on
this basis.
Cloud center intelligent application platform (Hikvision iFar): Provides a development framework for
cloud center intelligent applications, and general service capabilities that can be integrated into this framework,
including comprehensive data intelligence application support capabilities such as IoT perception, intelligent
analysis, and big data analysis. Developers can further develop dedicated components that meet specific application
requirements on this basis.
Internet operation application open platform (Hikvision Infocloud): Based on EZVIZ cloud, provides
business operation service support capabilities for cities and industries, and a public Internet underlying platform
(supporting the access and management of hundreds of millions of devices) and Internet-based high-concurrency
business services for industry users. The tenant platform integrates shared service units such as resource services
and user services for the rapid up integration by business platform; the operating platform mainly delivers product
services, project services, etc., for operators to manage products and projects; intelligent services support people-
vehicle identification, OCR text recognition, intelligent voice recognition, AI training service, data annotation,
intelligent application engine, etc. At present, it has achieved online business operations of 14 public service areas,
including community operation service cloud platform, rental house management cloud platform, environmental,
food and drug enterprise information collection cloud platform, small and micro enterprise safety production
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Hikvision 2020 Annual Report
supervision platform, and waste classification intelligent management cloud platform, municipal IoT platform,
temperature measurement data cloud platform, video integrated operation platform, intelligent voice cloud platform,
fire protection operation cloud platform, vehicle security management cloud platform, Internet cloud court trial
platform, smart parking operation cloud platform, etc.
2.4.2 Component Database: Provides a Basis for Software Reuse
Hikvision’s unified software technology system supports the “architecture + component” development model.
And our component database has gathered over 2,300 components of various types for four development
architectures.
Hikvision’s component database manages the component development of internal software development teams
around the world in a unified manner to avoid repeated component development plans, and combine and divide
components with repeated functions, thereby reducing development and maintenance costs.
The Hikvision component database, as an alternative source for software function reuse, offers a large number
of common functional components which support multiple development frameworks at the same time. Developers
can further develop dedicated components that meet specific application requirements on this basis, and use the
tools provided by Hikvision’s unified technology system to package, deploy and manage components. The software
development process based on Hikvision’s unified software technology system can be boiled down to “selecting
architecture + selecting components + configuring components + developing new components + integration”,
thereby improving the consistency and compatibility of the software released by us while ensuring high software
quality.
2.5 Ecological Empowerment: Forms an All-round Open Ecological Empowerment System
2.5.1 Open System: Open Equipment + Open Platform + Open Data + Open Application
Hikvision offers comprehensive open capabilities spanning equipment, platforms, data, and applications to
industry application developers in all aspects.
Hikvision intelligent application open platform provides four development frameworks, more than 1,000 open
interfaces, more than 730 common components, and nearly 200 software platform products including basic software,
general software, and industry software.
Our integrated operation and maintenance service platform offers equipment probes for the access of third-
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party sensing devices, operation and maintenance data interfaces for data output and report output of operation and
maintenance data; and the partner operation and maintenance team management and cascading assessment function
for various teams to deliver operation and maintenance services based on the same platform.
Hikvision’s IoT-information integrated data resource platform supports the access of third-party data storage
management systems or data formats in addition to mainstream data access; the IoT data management tools provided
is capable of managing elements of various types of IoT devices from multiple vendors while evaluating location
deployment; and data service interfaces support the development of business applications.
Hikvision provides more than 80 related standards and specifications including overall technical specifications,
general technical specifications, software interface specifications, IoT perception technical specifications,
intelligent algorithm technical specifications, big data management and service specifications, technical
management specifications, etc., to ensure the seamless integration between ecological partners’ technical
achievements and Hikvision’s software and hardware products.
2.5.2 Empowerment System: System Operation and Maintenance +Algorithm Training + Data Engineering
+ Application Development
To support more partners to deliver application values for users based on Hikvision’s open system, Hikvision,
based in Hangzhou has established a training and certification system, three software R&D centers in the northeast,
northwest and southwest, the offline training empowerment mechanism of 19 provincial-level software R&D
departments, as well as an online training mechanism offering over 280 courses.
The training empowerment system, oriented to system operation and maintenance, algorithm training, data
engineering and application development, issues certifications of associates, professionals and experts based on the
Hikvision training and certification system and the training content and evaluation system.
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3. Software and Hardware Products
3.1 Hardware Product Family: Edge Node Comprehensive Perception + Edge Domain Scenario Intelligence
+ Central Intelligent Storage and Computing
Hikvision, centering on intelligent perception, has further integrated its technological expertise accumulated
over the years and reinforced its basic technical capabilities, developing an open platform for embedded devices,
and creating an efficient and steady product development system that is safe and reliable. While enhancing its overall
competitiveness, Hikvision has created a series of star intelligent products such as “DarkFighter X” and “ColorVu ”
camera series, “DeepinMind” NVR, and “MinMoe” smart access control products, which are applied widely by
government agencies, enterprises, and the consumer market.
In Hikvision’s hardware product family, edge node products focus on comprehensive intelligent perception,
edge domain products on realizing scenario-based intelligence, and cloud center products on intelligent computing
and streaming storage.
3.1.1 Edge Node Products: Comprehensive Intelligent Perception
1) Front-End Products
With continuous investment into video images, intelligent algorithms, optical lenses, hardware structures,
software architectures, cyber security, and other technologies, Hikvision has put forward the philosophy of ultra-
clarity and full-color, panoramic details, multi-dimensional perception, scenario definition, and universal
intelligence to further improve cameras’ all-weather all-scenario perception, all-element extraction, and all-data
association capabilities.
Ultra-clarity and full-color: With in-depth research of Darkfighter, ColorVu technologies and adaptation of
large aperture, ultra-depth-of-field lens, super photosensitive sensor, multi-spectral fusion architecture, 3D Color
augmented engine and AI image augmented technology, Hikvision has managed to achieve accurate color
reproduction, high dynamic and clear imaging and adaptation to complicated scenes, and developed a ultra-clear
full-color product matrix featuring 4K ColorVu and Darkfighter series, to improve data quality from the image
source, obtain richer detailed features, and present more true color night vision.
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Panoramic details: We’ve comprehensively expanded the PanoVu product series. With multi-camera videoing,
dynamic and static details, the long and short views, and panoramic details, we can meet the needs of capturing
multiple targets and elements, and conducting multi-business analysis under the same scenario, while presenting
both the overall vision and the details and rendering the view broad and clear.
Multi-dimensional perception: Based on video perception, combined with multi-dimensional sensing
technology, we’ve gained the multi-dimensional data perception, accurate target capturing capabilities with time-
space correlation, IoT sensing, and information fusion, thus being able to build a bridge between the physical world
and the digital world, and create a more accurate, more comprehensive, and richer IoT sensing system.
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Scenario definition: The scenario defining cameras, with scenario-based hardware structure, intelligent
definition of software, and intelligent operation and maintenance, can meet the business needs under various
environments and conditions, with the strengths of professional adaptation, rapid deployment, and easy maintenance.
Universal intelligence: Based on scenario-based application demands and driven by business, we’ve created
an intelligent product system oriented to all fields with product tiers and intelligent grading, to provide intelligent
services in all walks of life including public safety, emergency command, people’s livelihood, urban operation,
traffic management, cultural tourism, education, and medical care and enable industry digital transformation and
intelligent applications.
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2) Intelligent Transportation and Portable Law Enforcement Products
Intelligent transportation products: Centering on the concept of “improving traffic order, alleviating traffic
congestion, preventing traffic accidents, improving traffic safety, and facilitating transportation and travel”, we’ve
put emphasis on scenario-based business adaptation, and innovated technologies to support new business models.
The environmental protection series products are fully upgraded to continuously tackle the problem of light
pollution; the radar-assisted series cameras with deep integration of multi-dimensional perception have realized all-
weather, multi-scenario, high-precision information detection, and innovatively introduced a complete closed-loop
system for the management of traffic congestion in urban cities, which covers diagnosis, simulation, operation,
evaluation, and adjustment, breaking through the technical limitations of single-dimensional perception, and with
supporting intelligent management and control system, and “weight balanced” adaptive control algorithm. At the
same time, perception products born in technological wave of video-radar multi-dimensional integration have
achieved business upgrades in urban roads, level crossings, curves, highways, ports and airports, industrial parks
and other scenarios, while integrating multi-dimensional perception data, and expanding to new business fields, to
create a benign ecology with the concept of “visible, knowable, intelligent and open”.
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Static transportation products: For business involving entrances and exits, parking lots and roadside parking,
we’ve launched a new generation of parking products represented by the “Guardian” series through the
intensification, intelligence and informationization of the parking system, to optimize product portfolio and improve
parking operation and management level and efficiency; combining videoing and multi-dimensional perception
technologies, we’ve offered application for the sub-scenarios of parking management, and further researched the
urban roadside parking management business, to help solve the parking problem in urban areas, and facilitate
smooth transportation.
Portable law enforcement products: With technological innovation, gyroscope motion sensing and PTZ
correction algorithm, we’ve introduced a mechanical anti-vibration law enforcement recorder, to effectively solve
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the industry pain point of law enforcement officers brought by motion blurring. In 2020, Hikvision was selected by
the police equipment procurement center of the Ministry of Public Security. With the integrated portable law
enforcement platform, we’ve realized the front-end and back-end integration, and the fusion of the business side, to
provide more complete portable law enforcement programs for public security, traffic police, urban management,
taxation, food and drug supervision, fire protection and other sectors.
3) Access Control and Intercom Products
Hikvision has been investing in audio and video interaction, intelligent applications, multi-dimensional
perception, electromechanical control, and other technologies to improve user experience unremittingly. Based on
“MinMoe”, we’ve enhanced the competitiveness of access control products, realized the integration of multi-modal
detection and recognition technologies, built an open hardware ecosystem with intelligent hardware and HEOP
architecture as the core to provide customers with convenient and fast customized solutions. Further optimizing the
audio effects of video intercom products, we’ve delivered full-color visualization in low light, avoided light
pollution, enhanced users’ real-time interactive audio-visual experience, strengthened our competitiveness of
building intercom, and opened up prisons, medical intercoms, and other business fields to develop a unified video
intercom program. Comprehensively upgrading the control technology and manufacturing process of turnstile,
we’ve launched the new generation of intelligent, safe and stable products, covering buildings, transportation, scenic
spots, campuses and other scenarios. Access control, intercom and turnstile products, combined with industry
applications, have formed a comprehensive solution to access control and attendance, visitor elevator control,
building intercom, medical intercom, public address (PA), turnstile, smart storage and other application scenarios,
with rapid development in the domestic and foreign markets.
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4）Alarm Products
Hikvision has been increasing investment in core technologies such as radio frequency, detection optics, multi-
dimensional perception, situational perception, and intelligent analysis to improve the comprehensive technical
competitiveness of products, aggressively drive cloud alarm/cloud operation business models based on Hik-Pro
Connect/ Hik-Connect, and create value for customers as always. Deeply engaged in the field of intrusion alarm
products with continued innovation, Hikvision has brought forth the second generation of wireless intrusion alarm
products, and made significant progress in overseas distribution markets and major customer markets. Iterating and
extending the perimeter alarm field, and paying close attention to the actual needs of projects and customers, we’ve
introduced the new generation of vibrating optical fibers and other product series to facilitate industry breakthroughs.
As for public alarm, we have worked closely with the industry to accurately understand customer needs and
launched a series of situational perceptional radar products, which have been widely adopted in key projects such
as border control and the Yangtze River fishing ban.
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3.1.2 Edge Domain Products: Fragmented Scenario Intelligence
As for intelligent storage and computing application equipment in the edge domain, Hikvision has strengthened
the diversification of hardware platforms, further deepened AI application, improved product capabilities, enhanced
system opening to serve the intelligent and digital transformation of industries and meet fragmented AI demands.
1) Multifunctional Integrated Intelligent Equipment
Intelligent storage and computing equipment for fragmented scenarios-Hikvision DeepinMind NVR:
With the digital development trend, edge storage and computing application equipment plays a key role in the
circulation of digital information, realizing the aggregation, storage, analysis or secondary analysis, localized
application of various perception data at the node end and uploading key data to centers. Hikvision’s DeepinMind
NVR series products have won honors such as “Top 10 Innovative Security Products” and “Special Award for
Innovative Products at CPSE”, etc. With years of development, the products have achieved more excellences. While
vigorously developing general intelligent applications, Hikvision has also been working with ecological partners to
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deeply explore industry business applications, launching the AI open platform DeepinMind and HEOP open
DeepinMind, etc., and has completed more than 100 industry-specific algorithm model trainings and applications.
Serving industries such as smart education, smart communities, smart buildings, smart enterprises, smart agriculture,
smart energy, smart logistics, etc., we’ve been dedicated to promoting efficiency with intelligence, driving industrial
upgrading and transformation, and maximizing social benefits
Intelligent system application equipment for small and medium-sized edge scenarios-Intelligent Fusion
Server: For small centralized intelligent application scenarios such as streets, communities, police stations,
enterprises, schools, etc., we provide Intelligent Fusion Servers that integrate a variety of intelligent video analysis
algorithms, such as the Intelligent Fusion Server with dozens of city management algorithms, the AI toolbox to
improve business efficiency, the AI container that brings together intelligence, big data, and application platforms,
etc. Drawing on our AI intelligence and big data analysis capabilities, and IoT perception and various scenario data,
we’ve been trying to improve the ability and efficiency of fragmented scenario management to facilitate the elastic
expansion of the platform in business.
Integrated Self-service Terminal: Featuring “government service, convenience service, and information
disclosure”, this machine offers such functions as information inquiry, self-service certificate application, certificate
printing, etc. It has access to various data in the Internet and business information networks to meet actual needs,
and is equipped with a variety of software functions, to support various self-service processing of public security,
social security, taxation, industry and commerce, real-name authentication with intelligent analysis, quick inquiry,
OCR data input, and multiple interactive methods such as touch-screen, voice intercom, etc., to facilitate handling
and improve user experience and efficiency. The integrated self-service terminal, interconnected online and offline,
can be widely deployed in communities, enterprises and other places to reduce urban operating costs and contribute
to the building of smart cities.
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Interactive Tablets: We have developed a full-process solution incorporating conference tablets, conference
room door tablet, video conferences, and conference management systems. The pre-conference online reservations,
material sharing, meeting notifications, self-service sign-in, conference room door tablet information
synchronization, in-conference wireless projection, whiteboard writing, interaction and collaboration, and
generation of voice minutes, the post-conference centralized management and control of equipment, statistical
analysis of data, and sharing of meeting minutes provide users with a safe, intelligent and efficient meeting
experience. As for conference tablet hardware, Hikvision has developed new series of products with ingenuity and
persistency. The product adopts a unique penetrating arc pen slot for its look to bring out the sense of business,
which is matched with the high-quality anodized surface inferior by no means to notebook computer in touch. The
zero-fit technology makes handwriting no more necessary and display ghosting no more the case. The newly
upgraded writing pen now is characterized by the pen-lifting sensor function, bringing users more conveniences.
The fresh new Vision OS 2.0 interactive system, adopted for interaction, redefines the interactive information
architecture and functional layout of the conference tablet, and the system UI is fully upgraded to deliver the ultimate
tablet interactive experience.
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2) Intelligent Video Transmission
In 2020, Hikvision had focused on the operation and maintenance of the IoT system and network system, and
released the intelligent video transmission system V1.0. This system combines the operation and maintenance of
the IoT system and the network system into one through “topological visibility, unified management, and intelligent
operation and maintenance”, thus reducing the requirements for the ability of operation and maintenance personnel,
and improving the efficiency to discover, analyze, and pinpoint hardware problems, with the scale of the unified
management capability reaching 5000 video channels.
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3.1.3 Cloud Center Products: General and Intelligent Storage and Computing
Hikvision provides general computing, intelligent computing, general storage, streaming storage, and large-
screen display products to empower the building of data center.
1) General Computing
Hikvision’s general server is a high-performance, high-reliable, and high-expandable general-purpose
computing product built by Hikvision drawing on 20 years of technological expertise and over 10 years of server
research and development experience and taking fully into consideration of the core demands of users in various
industries. Supporting X86 and ARM architectures and compatible with domestic CPUs, it is highly reliable, safe,
and ecologically versatile, and can provide a sturdy and reliable infrastructure for the construction of data center
computing resources.
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Hikvision’s general server product series can meet the demands of large and medium-sized enterprises in
informationization, virtualization, industry data analysis and high-load applications. They are also the ideal choice
for the industry data centers of government, Internet, energy, operators, finance and other sectors with demanding
requirements on server performance, scalability and reliability as well as remote enterprise information
environments.
2) Intelligent Computing
Embracing the video big data era, we need a solution to decouple video intelligent analysis and business. The
lower layer will undertake the intelligent analysis of massive videos, and the upper layer the analysis and processing
of big data and user business applications. Hikvision’s intelligent server, equipped with a general GPU hardware
platform which can meet various business needs, can also incorporate rapidly the cost-effective domestic GPU
hardware platform, which is of stronger market competitiveness and is suitable for various visual in-depth analysis
applications. Integrating server resources and intelligent analysis algorithms, and adopting cutting-edge
technologies such as multiple video intelligent analysis algorithms, clusters, and big data retrieval, it serves as a
strong foundation for video big data processing in smart cities.
Hikvision’s intelligent analysis server has realized full analysis of multi-dimensional data such as audiovisual
data and IoT for city-level and various industry big data applications and governance business; intelligent analysis
products, acquiring gradually the independent learning ability, will improve the adaptability to scenarios remarkably
to meet user business needs; we’ve released a new AI engine, which is compatible with mainstream computing
platforms, and with further improved standardization and openness; with the commercialization of hundreds of
algorithms, we can facilitate intelligent applications in more business scenarios, and contribute to urban digital
construction and governance continuously.
3) General Storage
Hikvision’s general storage equipment is a professional system-level storage product designed for IT data
centers and IoT applications. It boasts networking modes such as SAN, NAS, and object storage to offer block
storage, file storage, and object storage capabilities. Supporting core data protection functions such as RAID,
snapshot, WORM, data synchronization, mirror backup, etc., it is widely used in database system DB, office system
OA, enterprise information system ERP and production system’s disaster recovery backup system.
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4) Streaming Storage
The streaming storage is embedded with the advanced streaming file system HVFS (Hikvision Video File
System). In addition to VRAID (Video RAID-Redundant Arrays Of Independent Disks) data protection technology,
it also incorporates intelligent algorithms for business data load to ensure that the system is of higher intelligence,
flexibility and data security. This product series adopts the mode combining streaming data structure and object
technology to offer more convenient and efficient data reading and writing services.
Hikvision, enhancing its streaming storage technology and brand building in professional video storage, has
maintained its leading position in the video storage sector, toughened its multi-dimensional intelligence, data,
application and storage integration capabilities, accelerated the steps of industry digitalization and application of
industry innovations, and achieved groundbreaking technological progresses and mass production of products in
public security, transportation, finance, education, real estate, petroleum, power and other industries. Relying on the
technological strengths gained over the years in direct storage and intelligent integration, we’ve enriched the IT
information product family and related solutions in return.
5) Large-screen Display
Hikvision’s display products, with video processing technology, image restoration technology, and image
augmentation technology as the core, are widely applied in monitoring centers and command centers. At cloud
centers, Hikvision’s high-resolution visualization solution has been widely adopted. This solution is based on ultra-
high-resolution display technology and intelligent interactive technology, and provides a display carrier for cloud
center big data applications. Valuing quality and display effect, Hikvision makes efforts to offer better color
consistency and higher definition resolution, releasing Mini LED, mirror series LCD products and other display
products. In the fields of special display and commercial display, we have further expanded application scenarios
and offered quality and cost-effectiveness display products and display solutions.
3.2 Software Product Family: Software Platform + Intelligent Algorithm + Data Model + Business Service
Hikvision’s software product family is composed of software platform, intelligent algorithm, data model and
business service.
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3.2.1 Software Platform: Basic Platform + General Platform + Industry Platform
Basic software platform: Represented by “two pools, three databases, one screen, seven platforms and one
environment”. “Two pools” refer to computing storage resource pool and data resource pool for edge cloud and
central cloud computing platform, cloud storage platform, and big data fundamental platform; “three databases”
refer to component database, algorithm database, and model repository, respectively supporting management and
reuse of components, algorithms and models; “one screen” refers to large-screen visual application development
tools, which support the configuration of visual applications and the association with data without coding; “seven
platforms” refer to resource management scheduling platform, intelligent perception networking platform, AI open
platform, perception fusion empowering platform, iDatafusion platform, intelligent application open platform,
integrated operation and maintenance service platform, providing intelligent application scenarios with storage and
computing resource scheduling and equipment network access, intelligent algorithm training, intelligent service
publishing, data aggregation management, intelligent application development, integrated operation and
maintenance service capabilities; “one environment” refers to the four-dimensional space operation environment,
that is, the virtual space-time operation environment instead of the physical world, supporting the storage,
correlation and analysis of perception resources and data resources in the same space-time environment.
General software platform: Provides general software functions across industries, including general security
and protection, visual command, alarm management, inspection supervision, conference interaction, content release,
etc. The general software platform of visual command, as an example, includes AR scene tag platform, AR
virtualization platform, AR command platform, VR panoramic application platform, integrated communication
application platform, portable law enforcement integrated management platform, etc.
Industry software platform: Hikvision, serving over 70 sub-industries, has gradually built more than 100
application software platforms for various industries. Taking the traffic police industry as an example, we provide
the traffic violation management platform, the comprehensive traffic management and control platform, the urban
traffic situation analysis and judgment platform, the traffic accident investigation and judgment platform, the law
enforcement comprehensive management platform, and the highway traffic safety monitoring and management
platform, the smart check station application platform, the intelligent driving management video inspection platform,
etc.
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3.2.2 Intelligent Algorithms: General Algorithms + Industry-specific Algorithms
Offering services to all walks of life, Hikvision has accumulated a large number of video artificial intelligence
analysis algorithms which can be divided into general algorithms and industry-specific algorithms.
General algorithms: algorithms that can be used for the development of intelligent applications in multiple
industries. For example, the algorithms to detect and classify transportation equipment, motor vehicles and non-
motor vehicles, and the algorithm to detect traffic flow of people and vehicles, etc.
Industry-specific algorithms: algorithms developed for industry application demands. For example,
algorithms for the detection of exposed garbage, packaged garbage, misplacement of kitchen trash bins, road
uncleanness, road ponding, road damages, road leftovers, abnormal sidewalk piles, anti-collision bucket damages,
transformer box abnormalities, non-decorative tree hangings, billboard damages, tree protection facility damages,
incineration of garbage leaves, illegal parking of non-motor vehicles, messy materials on construction sites, etc.
3.2.3 Data Model: Industry Business Data Model
Hikvision provides big data application services for all walks of life based on the big data collection,
management, analysis and service capabilities provided by the iDatafusion platform. In this process, we have
accumulated a batch of industry business data models, which can be managed by the model repository, and can be
replicated and optimized in other similar application scenarios.
Taking transportation as an example, we provide illegal parking remediation model, urban road traffic
operation evaluation and diagnosis model, urban road traffic tracing analysis model, urban road traffic short-term
prediction model, high-precision real-time online traffic flow simulation model, and changeable lane feature
research and judgment and control model, tidal lane feature research and judgment and control model, time-space
analysis and judgment model for fake-licensed vehicles, racketeering car analysis model, traffic accident address
analysis model based on standard semantic analysis, public transportation OD1 passenger flow analysis model,
highway truck detour analysis model, driving behavior habit label and comprehensive scoring model, driving
behavior safety risk management and control model, and risky section mining model based on active safety data.
1 OD: O means Origin, which refers to the departure location, and D means Destination, which refers to the end of the journey.
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3.2.4 Business Service: System Operation and Maintenance + Data Engineering + Business Operation
Hikvision, concerned with users’ application demands, explores the transformation from being a product and
system supplier to being a service provider for some business.
System operation and maintenance services: Hikvision provides system operation and maintenance services
to some industry users. For systems and equipment out of warranty, the operation and maintenance team will offer
professional system operation and maintenance services.
Data engineering services: Hikvision delivers data engineering services for IoT resource management, and
integration of data collection, management and services.
Business operation services: Hikvision offers over 10 business operation services based on the Internet
operation platform and its private deployment methods. Among them, urban parking operation services have been
adopted in more than forty cities, and its business scope is expanding rapidly; business operation platforms for fire
protection operation, security check operation, community operation services, and waste classification intelligent
management cloud have also been put into use.
4. Business Organization
With the evolution of core capabilities and business scope, the business organization model of Hikvision is
being constantly upgraded. In the era of HD and networked videos, Hikvision has identified the business scenarios
in over 40 sub-industries of the seven major industries, i.e., public security, transportation judicature, finance,
culture/education/health, energy and building. In recent years, Hikvision has been sharpening its video-centric
intelligent IoT solutions and big data service capabilities, pushing the industrial applications further forward.
Hikvision initiated business structure reforming in 2018, which divided the domestic business into three business
groups: public business group (PBG), enterprise business group (EBG) and SME business group (SMBG). In the
new business structure, we dig deep into the market demands, coordinate corporate resources and intensify capacity
building in the context of the three business models, and make great efforts in facilitating public service optimization,
driving users’ digital transformation and creating a pan-security industrial Internet, thus injecting vigor and vim into
the business organization.
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4.1 Public Business Group (PBG): Facilitates Public Service Upgradation
4.1.1 Overview
As smart cities, smart police, smart transportation, smart urban management and other industries and cities-
oriented smart business develop further, the public service sector has entered the stage of “AI universal
empowerment and deepening of data value”. Hikvision, take advantage of the IoT, artificial intelligence, big data
and other technologies, has been endeavored to upgrade its “cloud-edge fusion, IoT-information network fusion,
big data-intelligence fusion” capabilities and expand the product portfolio in terms of “hardware, platforms,
algorithms, models, and services”. With precise marketing moves, we’ve covered the public service sector in
operation and further mined its value, to drive digital transformation for cites and industries, support smart city
operation and management, as well as intelligent business in public safety, urban governance, transportation, natural
resources, ecological and environmental protection, etc.
4.1.2 Core Technologies: Build a Big Data-AI Fusion Base for Smart Cities to Support Industry and City
Intelligence
Based on the perception platform, data platform and application platform, Hikvision has built a Big Data-AI
Fusion Base for smart cities to provide basic support for the development of various smart city services.
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Perception platform: Integrates and utilizes various perception resources in industries or cities, fully releases
the value of perception resources, and empowers industries to quickly form visual and intelligent perception
application capabilities. Leverages the existing urban perception resources to expand the application scope of
perception resources horizontally, and vertically enhance the capability of perception resources to support the
business segments, and ultimately boost the integration of perception applications with the functions of commissions,
offices, and bureaus, and establish automated and intelligent early warning and prevention mechanism to provide
intelligent support for government decision-making and command, and render social governance more intelligently.
Data platform: Provides full life cycle support for the aggregation, management, mining and service of
perception data and government data for industries or cities. Distributes data to users in various sectors through data
catalogs, IoT catalogs, interface catalogs, etc., and realizes data distribution and sharing through subscription push,
sharing and exchange, etc.
Application platform: For various intelligent application scenarios such as edge node applications, edge
domain applications, cloud center applications, and Internet operation applications ranging from the IoT to business
information networks, provides intelligent application open platforms and common application components for
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various industries to develop intelligent applications.
Guarantee system: Provides standard specifications, operation and maintenance guarantee and safety
guarantee system to support the operation of intelligent businesses in industries and cities.
4.1.3 Value Fullfillment
While deepening its understanding of business in public safety, urban governance, transportation, natural
resources, ecological and environmental protection and other fields, Hikvision is committed to design solutions for
various industry scenarios in the public service sector, and offer fundamental big data and artificial intelligence
supports to the construction of smart cities, striving to make cities smarter, the environment safer, services more
targeted, travel more convenient, and the ecology more livable.
1) Smarter Cities
Hikvision has been researching in depth the evaluation indicator system for smart city construction, and
optimizing the system in light of specific situations of different cities to guide the construction of smart cities.
Adding efficiency indicator to constructive indicators, we’ve committed to making the construction of smart cities
further meet the actual urban management demands and the management goals of governors, and improve citizen
experience and satisfaction.
Hikvision, relying on the Big Data-AI Fusion Base, has organically combined the capabilities of integrating
city intelligent IoT perception network, perception data and government data, and developing intelligent
applications rapidly, to endow cities with peripheral perception, nerve center and brain decision-making capabilities,
enable precise urban governance and the improvement and optimization of urban governance systems and
governance models fundamentally.
Hikvision provides integrated communication support capabilities to connect the command links of various
government agencies in peacetime and emergency, and realize coordinated handling of incidents based on
synchronization of situation and analysis.
2) Safer Environment
Hikvision provides security event monitoring, early warning and security protection capabilities for public
safety, traffic safety, production safety, natural disaster emergency management, etc. to build a safer environment.
We have worked out industry solutions for public security. The comprehensive application capabilities for
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public security video images, and the three-dimensional prevention and control system for typical application
scenarios such as street patrol, community security, public security check station control, entertainment venues and
special industry public security control, etc., can enhance users’ security risks early warning, prediction, and
prevention capabilities to effectively carry out operations such as zone-level inspection and control, unit prevention
and control, and element control, and help build a safe and harmonious social environment.
Our industry solutions for traffic safety provides intelligent detection capability for road traffic violations such
as red-light running, wrong road side, overrun, overspeed, improper hanging of the number plate, deliberate
shielding and defacement of the number plate, inconsistent driving model, disqualified driving, non-motor vehicle
violation, pedestrian violation, dangerous driving habits, etc., and for illegal transportation operations such as
unlawful operation, pick-up outside passenger station, illegal taxi refusal, etc., as well as data applications for real-
time traffic conflict warning, traffic accident root cause analysis, road structural hidden danger analysis, and
investigation and judgment on vehicles with hidden dangers and overloaded vehicles bypassing, to help ensure a
safe transportation environment.
Hikvision has designed industry solutions for production safety, which is marked by the safety production
monitoring and early warning function for hazardous chemical companies, small and micro enterprises, coal mines,
non-coal mines, tailings ponds, fireworks and firecrackers businesses, etc. and functions for smoke detection, fire
detection, indoor and outdoor recognition of fire protection passage occupancy, tooling compliance detection,
personnel on-the-job and off-job detection, etc. to build a safe and efficient production environment.
Hikvision’s industry solutions for natural disasters feature functions such as comprehensive monitoring of all
elements of natural disasters, disaster early warning, comprehensive disaster risk assessment, intelligent analysis,
consultation, investigation, and judgment of disaster evolution situation, to build an emergency safety environment
that reduces disaster risks.
3) More Targeted Services
Hikvision provides capabilities such as intelligent event analysis, IoT status detection, and lean management
applications for city management and comprehensive governance in urban appearance, sanitation, municipal
facilities, environmental hygiene, etc., to render more targeted services.
The industry solution for city appearance and environmental sanitation management by Hikvision offers
intelligent analysis services for street order, city appearance and environment, publicity and advertising,
construction management, emergencies, etc., and application systems for city appearance management, supervision,
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command and scheduling, administrative comprehensive law enforcement, and dregs removal supervision, etc. to
promote scientific decision-making in urban management.
Hikvision’s industry solutions for municipal facility management serves to monitor the state of public facilities
such as manhole covers and trash bins through IoT, and the state of landscaping such as tilting and falling of ancient
trees, and supplies a closed-loop process covering problem collection, dispatching and handling, and feedback
evaluation to form targeted municipal management service capabilities.
Hikvision delivers the industry solutions for environmental sanitation management, including management
applications for sorted drop, sorted collection, sorted transportation, sorted disposal, to assist the environmental
sanitation department to optimize garbage sorting operation mode, improve garbage sorting operation, and enhance
the lean disposal capacity for city appearance and environmental sanitation.
4) More Convenient Travel
Hikvision provides support capabilities for smart road network, smart traffic management, smart bus, smart
parking and other urban transportation services to make travel more convenient.
The industry solution for traffic road networks from Hikvision is appreciated with capabilities of highway
network monitoring, traffic situation analysis, intelligent monitoring of traffic incidents, emergency handling,
integrated overrun and overload punishment, image-based toll inspection, key vehicle control, tunnel safety control,
intelligent maintenance, perimeter prevention along the railways for expressways, national and provincial trunk
lines, railway networks, etc., and of hub security control, hub passenger flow monitoring and channeling, and
external services for railway stations, airports, ports, passenger and freight stations, and comprehensive
transportation hubs, to create “smart road network”.
As for traffic management, Hikvision provides the industry solution with intelligent signal control capabilities
such as single-location adaptive control based on real-time traffic parameter perception, dynamic/static trunk green
wave control, and regional coordinated control, and professional smart travel service capabilities such as city-level
traffic situation investigation and judgment, intersection problem diagnosis, traffic flow traceability, traffic
simulation, intelligent guidance, vehicle traffic management, real-scene command, key vehicle traffic protection,
green parking, etc., for “smart traffic management”.
The industry solution provided by Hikvision for urban public transportation is capable of intelligent bus
scheduling, bus capacity monitoring, bus passenger flow analysis, bus stop sign service, taxi emergency scheduling,
subway passenger flow monitoring, subway fast pass, etc. in urban ground public transportation, rail transit, and
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online ride-hailing, etc., for “smart public transportation”.
And for urban parking, Hikvision, through its industry solution, aims to create “smart parking”, with
convenient parking fee payment channels for unattended parking lots, automatic detection and recording of the
parking process, integrated urban parking networks, unified management and comprehensive operations, aggregated
parking space data, the urban parking data center that sorts out and integrates data, and the convenient and diverse
services for car owners, such as parking space inquiry, reservation, route navigation, electronic payment, monthly
parking package, and bill inquiry etc.
5) More Livable Ecology
Hikvision strives to create a more livable ecology by offering intelligent monitoring management and service
capabilities for natural resource monitoring and management, water conservancy and water affairs monitoring and
management, and ecological environment monitoring and management.
Hikvision provides the industry solution for natural resource monitoring and management. The forest and grass
fire protection intelligent monitoring and management capabilities such as fire risk monitoring, early warning and
positioning, fire alarm investigation and judgment, spread analysis, fire protection command, fire protection
resource management, fire protection supervision, fire file management, etc., the intelligent land supervision
capabilities including land spot management, panoramic inspections, video-based land search, intelligent analysis
and alarm of unlawful buildings, collection of event clues, alarm investigation and judgment, land law enforcement,
etc., the nature reserve monitoring and management capabilities such as animal monitoring, pest control, patrol
management, biodiversity monitoring, etc., and the national park big data service capabilities, for example,
monitoring evaluation, regulatory decision-making analysis, geological disaster monitoring, emergency command,
forest and grass industry services, publicity and education training, together help realize intelligent supervision of
natural resources.
In terms of monitoring and management of water conservancy and water affairs, Hikvision’s industry solution
features intelligent monitoring capabilities for rivers and lakes such as intelligent analysis of “four dislocations” of
rivers and lakes, river and lake cleaning management, sand mining management, intelligent management of water
shorelines, intelligent supervision of water conservancy projects such as safety supervision of water projects under
construction and intelligent supervision of water engineering safe operation, flood prevention and supervision
capabilities such as water and rain monitoring and early warning, flood scheduling visualization, etc., online visual
management of water plant security management and urban and rural water supply and drainage, and intelligent
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visualization of water administration law enforcement and water conservancy supervision to make possible
intelligent supervision of water conservancy and water affairs.
The industry solutions for ecological environment monitoring and management from Hikvision provides
intelligent monitoring capabilities for air pollution such as road smoky vehicle control, open burning supervision,
heavily polluted weather vehicle control, construction site dust control, catering lampblack monitoring, moving
pollution sources on the road, VOCs emissions, etc., enterprise pollution management capabilities for secret sewage
discharge monitoring, secret waste gas discharge monitoring, and pollution source station/building management,
water ecological environment hyperspectral monitoring, solid waste full-process intelligent supervision, and
ecological environment big data analysis capabilities for water environment analysis, atmospheric environment
analysis, pollution source general investigation to realize intelligent ecological environment supervision.
4.2 Enterprise Business Group (EBG): Facilitate Users’ Digital Transformation
4.2.1 Overview
The digital economy is thriving, and driven by digital and intelligent technologies, industrial reforms are
accelerating. Embracing the wave of digitalization, Hikvision, with business, product and technological innovations,
has been working with partners to create products, solutions and service systems to drive digital transformation, and
is committed to making itself the preferred partner of user scenarios, the major supplier of IoT equipment and
facilities, and an innovative partner for building the digital twin through the integration of IoT and information
network.
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Utilizing the AI Cloud architecture and its technological capability in intelligent IoT and IoT-information
network fusion, Hikvision continues doubling down on the digital enterprise solutions that combine traditional
informatization, equipment and facilities IoT and intelligent scenarios IoT. Hikvision has created the
comprehensive-perception product system, where it uses the AI open platform to consolidate its AI engineering
innovation and delivery capability, creates low-code software engines, builds the digital world UI (User Interface)
and intensifies enterprise-level SaaS services. Hikvision focuses on user value and releases the value delivery
methodologies, which have been implemented for the users in numerous industries including coal mining,
metallurgy, commercial real estate, manufacturing, tobacco and liquor, salt, logistics, retail chain and education, etc.
4.2.2 Core Technologies: Drive Enterprises’ Digitalization by Building a Digital Product System for the
Intelligent IoT Industry
Hikvision focuses on user value, perseveres in innovation of the core technology and provides the users with
the digital enterprise solutions for comprehensive perception, intelligent IoT and IoT-information network fusion.
Create the Digital Product System for the Intelligent IoT Industry
Hikvision is dedicated to helping enterprises build their infrastructures for comprehensive perception and
intelligent IoT and realizing acute perception of the whole value chain of enterprises covering the supply chain,
production, market and services; through the IoT-information network fusion platform, we gain insights into the
operation and management problems and make improvements, thereby creating a complete digital twin.
Hikvision has integrated the multi-dimensional sensing technologies that include microwave, infrared rays,
near infrared rays, visible light, X-rays etc. to develop the product series for over 10 industries, such as electric
power, petroleum, petrochemistry, coal mining, metallurgy, tobacco and liquor, salt, logistics and retail, etc. In the
realm of scenario IoT, Hikvision has rendered over 100 types of perception products represented by “AR PanoVu”,
solar-powered cameras, thermal imaging for hot work monitoring, and intelligent door tablet, to facilitate
digitalization based on the scenario elements including environment, personnel and behaviors; In the realm of
equipment and facilities IoT, the innovative products including micro-distance meter-reading camera, high-
temperature highlighting camera, serial number identification system, thermographic temperature measurement
camera, and intelligent IoT server have been introduced into the Industrial Internet, pushing forward digitalization
of production and service processes.
Hikvision uses the industrial application platforms to enable large-scale equipment access, intelligent IoT and
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data aggregation and to bolster IoT-information network fusion business applications. We continue products
iteration within the unified software technology architecture, offer software products and business application
components oriented for specific industries and scenarios and have rendered multiple innovative business
applications such as digital platform, financial cash box handover and teaching assistant in instructional interaction.
Intelligent Application Implementation Accelerated by AI Engineering
Dedicated to exploring and innovating AI technology, Hikvision transforms AI technology from a specialized
privilege to popularized offering and gradually to engineering application, seamlessly integrates AI visual
technology with multidimensional perception, software engine, data intelligence and mechanical automation
technologies and vigorously explores and builds AI engineering capacity, to facilitate rapid adoption of applications
that involves IoT perception and closed loop of corporate business process, mechanical automatic control and
autonomous decision-making, and in-depth data insight and predictive analysis.
To assist in temperature screening and social distancing, Hikvision has brought together visible light and
thermal imaging temperature-measuring technologies and applied the “MinMoe” temperature screening equipment
extensively in hospitals, parks, factories and other scenarios and adequately meets safety control requirements
through personnel access control and temperature monitoring; in the coal mining industry, Hikvision has offered
the coal mining enterprises the innovative gangue separation system to efficiently identify and accurately sort out
gangue; in the financial industry, Hikvision has created the digital and intelligent risk control solution that is capable
of compliance inspection, credit risk assessment and liquidity risk scrutiny, to help financial institutions improve
their risk perception methods and identify risks efficiently, with accuracy rate increased tens of times compared
with traditional means.
Efficient Delivery of Corporate Digital Application by Low-Code Engine
Hikvision, leveraging the low-code develop technology, has released the software engine products represented
by inspection engine and attendance engine, which use abstract business models and diverse configuration templates
and visualization templates to reduce the barrier of corporate application development, enable the business
departments of users to participate in application development and enhance corporate application development
efficiency. Drawing on its unified software technology architecture, Hikvision has realized AI collaboration,
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integrated IoT sensing equipment and IoT data, and provided highly expandable business interfaces to integrate the
corporate information system and introduce the corporate scenario digitalization into the core business process.
Hikvision has offered the inspection engine intended for the inspection application in various industrial
scenarios. This product supports intensive integration with traditional IoT technologies and AI intelligent perception
technologies, quickly generates customized inspection application and is extensively applied in multiple industrial
scenarios including community property inspection, corporate safety production management and general education
and supervision safety, etc.; Hikvision offers the attendance engine intended for labor-intensive and office-centric
scenarios, which is capable of attendance data collection, attendance management and working hours counting
suitable for all scenarios and renders diverse easy-to-use report forms and boards.
Create UI for the Digital World
Based on video and AI technology and fusion of multiple types of data from the IoT and information network,
Hikvision has created a new digital world UI and a new interactive experience between the physical world and the
digital world.
Hikvision provides manufacturing enterprises with AR digital workshop solution, which is based on AR live
video and panoramic image stitching, interlinked with multidimensional perception information and business
system information such as production data, equipment operation data, blanking condition and relevant fault early
warnings, to realize information aggregation and tagged display, help managers detect problems in time, and
improve operation and management efficiency.
Hikvision provides chemical industry parks with AR safety-environment map solution, which is supported by
the panoramic AR scene tag video and the safety and environment related data of the chemical industry park, to
centrally display the real-time status and changes of the hazard sources, pollution sources, fire-fighting equipment
and key public areas in the field of view; the system is interlinked with the emergency response plan and emergency
resources to realize safety-environment integration, thereby enhancing the overall capability of risk prevention and
control and emergency disposal of the park.
Hikvision provides tourist attractions with AR scene guide solution, which integrates AR technology and
tourist interaction guide screen and uses multiple AR screens and the tags for tourist flow, buildings and scenic
spots to offer tourists real-time preview of the scenic spots in the scenic area, to improve tourist interaction
experience and enjoyment, and facilitate intelligent marketing of tourist attractions.
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Hikcloud: Enterprise-Level SaaS Service
The Hikcloud, expanding from retailing to other sectors such as community, education and logistics, provides
chain-type users with digital transformation solutions covering connection, management, intelligence and insight.
Hikcloud focuses on online IoT equipment, AI engineering and application service configurability, and
maintains sustainable fast growth of user base and connected equipment magnitude. Up to end of 2020, Hikcloud
had provided services to accumulatively over 150,000 retail outlets, 1,600,000 community property owners,
1,300,000 parents of students, 10,000 offices, 450,000 logistics nodes and 2000 developers, and had been connected
to nearly 1,600,000 terminal devices altogether.
The Hikcloud is constantly improving the developer service platform, where there are now over 2000
developers that use its developer services to provide SaaS applications for specific scenario in their specialized areas
and the average daily interface invocation frequency exceeds 30 million times per day.
4.2.3 Value Fullfilment
In the digital era, any enterprise would put more emphasis on value-creating business input, in hopes that the
digital technology will increase both quality and efficiency and create greater commercial value. Hikvision
continues its intensive exploration in the industries such as petroleum, petrochemistry, coal mining, metallurgy,
electric power, logistics, retail chain, intelligent manufacturing, education, health care and intelligent finance.
Thanks to its rich experience in successful delivery of digital transformation projects, it has refined its value delivery
methodology, which will accelerate digital transformation of enterprises and help users fulfill their value.
Value Delivery Methodology
Hikvision puts forward the value delivery methodology, helps users shape their vision of digital transformation,
discerns the value chain of users, integrates digital solutions into the business process and boosts end-to-end
implementation of value-creating business.
Vision setting: oriented by user value, Hikvision has refined a complete business framework and a solution
capability set and the value system centered on "shortening management distance, improving business efficiency,
regulating operation behaviors and preventing safety risks", to help users set the vision of digital transformation
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defined by ubiquitous perception and intelligent IoT.
Value matching: based on its investigation and understanding of the industry and the analysis on key activities
of typical user base, we have been deeply engaged in the business scenarios of users, to help users discern their
value chain and clarify their value propositions and enable value matching and value extraction with the solution
capability set.
Value fulfillment: we implement professional work procedure to facilitate delivery digitalization projects,
fulfill double objectives of implementing value-creating business and gaining user approval and trust, work with
users and help users fulfill their blueprint of digital development.
Build Industry Best Practices Unremittingly
Underlain by the value delivery methodology and guided by the value principle of “shortening management
distance, improving business efficiency, regulating work behaviors and preventing safety risks”, Hikvision has been
working with the eco-system partners to build industry best practices for digital transformation, and has achieved
remarkable results.
1）Help Enterprises Shorten Management Distance
Hikvision adequately utilizes its video-centric IoT perception and connection capability to help enterprise users
and governmental regulatory entities evolve from “on-spot management and decentralized management” to “unified
management and centralized management”, shortening the distance between the managers at all levels and the
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production scenario, and alleviating management anxiety.
Integrating IoT and digital technology, Hikvision provides the industrial park 3D digital command module
solution characterized by data-driven design and intelligent service, to help build digital intelligent management
platforms and realize the three-dimensional industrial park protection system that features “networked general
layout, closed partial areas, full monitoring over key entry points and full coverage on key locations”.
Hikvision uses the “inspection engine” software to realize whole-process digital oilfield inspection and makes
efficient analysis on inspection data and image data to help safety personnel and managers maintain real-time insight
into potential hazard of operating equipment, reduce safety risks and ensure safety of workers.
Using thermal imaging and multidimensional perception solutions, Hikvision builds the intelligent fishery
supervision system for the fishery administration, to realize full coverage of monitoring over water areas, intelligent
warning for vessels, remote inspection and other intelligent supervision approaches, and to implement the strategic
decision of “ten-year fishing ban on the Changjiang River”.
Leveraging video AI and IoT sensing technology, Hikvision builds treasury management platforms for banking
institutions, to impose visualized operational management over treasury vehicles, personnel, articles, environment
and compliance and to lay the foundation for capability building for the purpose of comprehensively improving
business management, risk control and appraisal system.
2）Help Enterprises Improve Business Efficiency
Bring together AI and intelligent IoT technologies, Hikvision helps enterprises with their automated online
process-based operation and improves business efficiency in sectors such as production, logistics and education.
Hikvision has intensively applied the intelligent IoT technology in production management of steelmakers,
which has realized asset number automatic identification, automatic counting, automatic inspection on equipment
and remote control over operation, increased the efficiency of steel pipe weighing line by over 10%, improved
operation efficiency and inspection efficiency and improved employee office environment.
In collaboration with tourist attractions, Hikvision has founded the Intelligent Tourism Institute, which
conducts joint research into AI and big data, facilitates creation of IoT integrated platforms and focuses its efforts
on scenic area safety and tourist service experience. It has rendered a range of innovative solutions including AR
real scene guide, which significantly enhances the service capacity of scenic areas and improves tourist service
quality.
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Hikvision uses AI open platform to provide commodity identification service to empower intelligent container
retailers and combines visual technology with intelligent hardware to offer the innovative unmanned retailing
solution that integrates intelligent container terminal and operation, which has significantly reduced retailer
operation cost and improved consumer shopping experience.
Hikvision works with banking institutions to serve new scenarios and new business types and combines cloud
service, AI and remote video technologies to create remote financial modules, extend the service radius, provide
24h financial service and public service, create the bank that is always at the service of people and help banks
transform their customer service models.
Combining the technologies and products such as audio/video processing, AI, remote visitation equipment and
intelligent interactive screen, Hikvision provides hospitals with intelligent ward solutions, to help hospitals optimize
medical care process and ward order management and improve medical service quality and patient experience.
3）Help Enterprises Regulate Work Behaviors
Drawing on AI scenario perception technology and corporate information-based management and employing
the traditional management methods such as human supervision and training, Hikvision efficiently helps establish
standardized management of process-based operation and scenario-based work behaviors.
Hikvision has built the visualized safety control platform for the State Grid, to enable whole-process
standardized, traceable and intelligent management of operation plan, operation process, safety inspection and safety
information and to strengthen penetration and execution of safety supervision.
Working with automakers, Hikvision uses intelligent on-board equipment and IoT sensing technology to create
the shuttle bus safety supervision platform, which realizes the intelligent applications such as bus positioning, bus
staff attendance and temperature measuring, to ensure safe travel of buses, help bus management decision analysis
and help creation of Internet of Vehicles.
Joining hands with cigarette manufacturers, Hikvision vigorously explores industrial tobacco intelligent
manufacture management applications. By using the inspection engine to combine offline inspection of fire-fighting
equipment, online inspection of material assets and AI scenario-based intelligent inspection, Hikvision has reformed
the inspection method and realized complete closed loop covering inspection plan, execution, rectification and
analysis, to offer strong support for regulating work behaviors.
Hikvision provides intelligent work site solution that uses digital and intelligent technologies in safety,
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environment and quality management of work sites. We have created the work site full view center that enables the
intelligent applications covering waste truck washing in key areas of work site, hoisting machinery testing and air
environment quality monitoring and enhances construction management efficiency.
4）Help Enterprises Prevent Safety Risks
Hikvision strives to create the corporate safety protection system that combines four elements--intelligent
management of personnel safety, intelligent monitoring of equipment and facilities, intelligent perception of
environmental safety and intelligent perception of bio-safety.
Hikvision has provided the power generation safety solution for the China Southern Power Grid, to help the
grid protect work safety and improve quality and efficiency in the new context of grid development. Supported by
video-centric AIoT technology, this solution enables ubiquitous perception of personnel behaviors, equipment
temperature and operating condition and environmental state and provides the intelligent applications such as AR
panoramic view, intelligent patrol and remotely assisted switching operation, to help electric power system evolve
from traditional operation and maintenance to intelligent operation and maintenance.
Hikvision provides universities, with data governance and application solutions and, centered around business
scenario abstract routine security business process and incident response process, has created a range of business
scenario based template applications and practice-oriented control cabin applications, which has significantly
enhanced the unified coordination and interoperation capability of campus security systems.
Using innovative video-radar integration technology, Hikvision helps industrial parks realize precise
monitoring over risks in transportation of hazardous chemicals. Focused on monitoring over illegal travel of
hazardous chemicals transportation vehicles, this solution uses radar-assisted monitoring equipment to provide the
industrial park security supervision authorities with warnings on illegal travel of hazardous chemicals transportation
vehicles and facilitate compliance management over such vehicles.
Offering the security-fire integrated innovative solution, Hikvision works with manufacturing enterprises to
deploy the digital corporate operation and command center and the seamlessly interoperating subsystems covering
three-dimensional control, fire safety network, hot work monitoring, warehouse temperature, electrical fire warning
and plant area inspection and to effectively enhance the ability to perceive and handle safety risks, so as to
accomplish the “security-fire integration” strategy and protect the core assets of manufacturing bases.
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As the preferred strategy of any enterprise, digital transformation will usher the digital economy into the new
stage of fast growth and accelerate reformation of industrial value chain and generation of new business models and
new business types. Hikvision will always adhere to the concepts of all-round opening, division of work, integration
and win-win cooperation, and actively work with eco-system partners of solutions to push towards flourishing
digital transformation in the areas of products, solutions and service systems.
4.3 SME Business Group (SMBG): Create a Pan-security Industrial Internet
4.3.1Overview
Driven by the emerging technologies such as AI and IoT, the customer demands of SME market have expanded
from the traditional security protection to all aspects of livelihood and production, forming the pan-security
industrial Internet defined by more expansive market, more abundant terminal products and more diverse
application scenarios.
The SME market encompasses large number of specialized scenarios such as small and micro businesses, small
and micro industrial parks, shops, factories, residential areas, scenic areas and livestock farms, but due to small
project granularity and high degree of dispersion of users, it is difficult to achieve efficient coverage over the market.
Contractors, service providers and individual business owners are capable of fragmented coverage, but their solution
capability has yet to be enhanced and updated, they have problem conducting standardized business and their
survival and development space is constrained. Distribution partners are faced with complex and constantly iterating
product solutions, great pressure in business learning and high difficulty in operational management, and their
potential in large-scale business expansion has yet to be tapped.
Working with general practitioners and drawing on the technological elements such as big data and Internet,
Hikvision optimizes the composite channel system, scenario solutions and service capability, integrates industrial
chain resources, helps distributors quick update their understanding, improve management process and expand
business scope, and helps business owners provide efficient services to users, streamline implementation process
and enhance interaction efficiency. Hikvision works hard to create one-stop preferred products and services defined
by omni-channel, whole-process and omni-scenario offering, to meet the demands of all parts of the industrial chain
and to create a pan-security industrial Internet.
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4.3.2 Core Technology: Build Industrial Internet Products Matrix and Help Improve Efficiency and
Experience
The product matrix of the pan-security industrial Internet created by Hikvision is comprised of two mainline
platforms: Hikvision Interconnectivity and Hikvision SMBG E-commerce. Based on the infrastructure capacity of
Hikvision and the marketing network of partners, an enabling platform is built to adapt to the traditional industrial
structure.
1) Hikvision Interconnectivity
Oriented for b2C process, this platform helps partners such as contractors and installers operate with high
efficiency and provides users with convenience in equipment usage, contents browsing and demand response.
Hikvision Interconnectivity integrates the capabilities in equipment management, application configuration,
solutions, value-added services and contents purchase guide, to provide SME users with one-stop scenario-specific
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solutions, online interaction, contents marketing and services.
2) Hikvision SMBG E-commerce
Hikvision SMBG E-commerce: oriented for (F+B)2b process, this platform helps distribution partners link
to practitioners, integrates malls, communities, solutions, contents, services and tools, serves and also enables Tier
1 and 2 distributors, and provides many capabilities such as linking to contents, linking to customers, linking to
employees and operation analysis.
The two platforms are mutually supportive and spirally driven, to improve omni-channel traffic integration and
eco-system marketing, promote whole-process marketing, increase channel attraction and create the secondary
growth curve.
4.3.3 Value Fullfillment
Hikvision constantly examines the business demands at all levels of the industrial chain and strives to improve
the professional proficiency over the entire industrial value chain. The whole-chain digitalization of production
terminal, circulation terminal, marketing terminal and usage terminal will immensely enhance the operational
efficiency of the entire industrial chain, empower numerous partners and help meet the pan-security fragmented
demands.
1) Empowers Customers
Expand mall categories to support digitalization and intelligentization of pan-security and weak current
projects; improve supply chain delivery efficiency, link and enable more channels/installers, and promote whole-
chain digitalization and online equipment installation in the channels; diversify channel customers eco-system,
promote integration of professional abilities, build directly supervised core stores, and enable comprehensive
coverage over market in lower-tier cities; use informatization to provide the contractors and installers with more
contents, tools and marketing support and help them provide better services to users and perform promotion more
efficiently.
2) Serves Users
Provide more tools and contact points to link users, combine online access points with offline outlets, and
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provide the integrated whole-process service experience that covers requirements submission, solutions consulting,
survey and design, commodity sale and delivery, after-sale service, operation and maintenance, to enhance user
purchase efficiency; realize the value-added applications such as online operation and maintenance of products,
timely response to after-sale requirements and publicization of latest solutions and functions, to enhance the user-
brand interaction experience; make use of the advantages of intelligent IoT to provide SMB users with the core
solutions such as integrated security protection, intelligent office and store management, enable coverage over all
scenarios in AIoT digitalization and intelligentization, and help SMB users realize online digital operation of various
commercial elements and improve management efficiency.
5.Innovative Businesses
Hikvision’s continuous efforts in technical reserves and expanding business scope provide a good basis
for innovative business development. Currently, the innovative business camp includes eight sub-businesses
including EZVIZ Network, HikRobot, HikAuto, HikMicro, HikSemi, HikFire, Rayin and HikImaging, which
may have a consistent technical foundation with Hikvision, or provide more abundant products and services
to customers, or form effective synergy between upstream and downstream. The development and growth of
innovative business has continuously injected new impetus into the long-term stability and sustainable
development of the Company.
5.1 Innovative business-EZVIZ Network
The rapid development of the IoT and AI technologies has promoted the intelligence, convenience and
comfort of home life. The core of EZVIZ’s businesses is based on visual technologies. It uses Internet cloud
computing, AI, multi-dimensional perception, IoT communication and motion control technologies to create
a reliable IoT cloud platform, as well as safe and intelligent household products, so as to provide households
and home-like users with intelligent products and services and maintain a rapid businesse development.
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After years of cultivation, EZVIZ has formed a “1+4+N cloud platform - independently developed
products-ecological products” business system. Centered on cloud platform services and by virtue of smart
home cameras, smart home entry, smart control and smart service robots and other independently developed
products, it has driven the side-by-side development of other smar home protducts such as smart fresh air
system, smart water purifier, smart bracelet, and kid’s smart watch, to create an intelligient home ecosystem.
5.1.1 EZVIZ IoT Cloud platform
Based on a globally distributed “self-developed architecture + three-party cooperation” hybrid cloud
architecture, EZVIZ Cloud provides Cloud service capabilities with computing, storage and network support
which supports multiple types of device access. Centered on media services, it provides such services as video
storage, messaging services, AI services, application services and other rich and complete service options,
which offer big data service capabilities, and provide security, operation, operation and maintenance
guarantees and support for top-level consumer applications and derivative applications at EZVIZ IoT open
platform. As of the end of 2020, EZVIZ IoT Cloud Platform has nearly 100 million global access devices,
more than 70 million registered users on the platform, more than 25 million monthly active users, and more
than 10 million daily active users.
Aiming at ordinary consumer users, EZVIZ Cloud provides cloud storage, smart reminders, personnel
identification, screen detection, phone reminders, family-friendly text messages and other paid value-added
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services applicable to home scenarios, and further enriched the services including cloud disks, elderly care,
and other diversified value-added services in 2020 and expanded value-added services overseas to major
countries in Europe, America, Asia, Oceania and other regions.
Aiming at the application demands of enterprise-level customers in complex scenarios, EZVIZ Cloud
supports developers and strategic partners to provide customers with the development of various complex
applications. On the device access side, through compatible standard protocols, open modules, SDKs, etc., it
is convenient for customers’ multi-brand devices to access EZVIZ Cloud; on the users side, through EZVIZ
object model and EZVIZ interface definition tool, it helps customers build App with zero/low code; on the
application side, EZVIZ opens PaaS service and outputs through EZVIZ open platform and EZVIZ IoT open
platform.
5.1.2 Smart home products
By virtue of vision technology and AI, multi-dimensional perception, IoT communication, motion control
and other technologies, EZVIZ maintains its continuous leading position in hardware products.
Smart Home Cameras (SHC) includes a variety of product options with different outlooks and
performances, providing security services for users in personal, family, and home-like scenarios, facilitating
communication, encouraging sharing, and conveying care & love. EZVIZ SHC has maintained the leading
global sales for many years. In 2020, EZVIZ released new products such as courtyard waterproof PTZ cameras
and cameras that support mobile network access, which further enriches the access methods and usage
scenarios of cameras. Meanwhile, it is supported by solar power supply system, which realizes scenario
coverage in areas without electricity and broadband. In terms of intelligence, a number of intelligent featured
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detection and recognition algorithms have been released to adapt to different scenarios, such as personnel
identification, fall detection, pet detection, etc.
Smart home entry products mainly include smart door locks, smart visualized lookout and smart
visualized doorbells. With its core video technology capabilities, EZVIZ intelligently upgraded home entry
products which support direct access to the EZVIZ IoT Cloud platform and perform intelligent applications in
home scenarios such as personnel identification based on cloud resources. Through continuous technological
innovation and marketing, EZVIZ’s smart home entry business has achieved considerable development. In
2020, the product matrix of EZVIZ smart locks has been further enriched. In response to the requirements of
personnel access management for public rental housing and dormitory, centralized smart lock products were
launched; pre-engineering products for the hardcover business of housing development have been promoted
and applied to the fingerprint lock pre-installation business of Ronshine, Binjiang, Huafa, Jingrui and other
leading property developers.
Smart control products mainly include smart sensors, smart screens, smart switches, and smart sockets.
After the devices are connected to EZVIZ IoT Cloud platform, users can monitor in real time and remote
control the indoor environment, lighting systems, home appliances, energy consumption, etc. In 2020, EZVIZ
released a 4-inch smart screen. Through intelligent voice and touch technology, it will bring users a new
interactive experience of smart home, and the EZVIZ smart control product matrix was further enriched. At
present, EZVIZ smart control products have been promoted and applied to the smart home pre-installation
business of many leading real estate developers such as Longfor, Lvdu, and Ruchen, etc.
Smart service robots mainly include companion robots and robot vacuum. In 2020, EZVIZ devoted itself
to the development of companion robots based on vision, hearing and environmental perception. Through
connecting to EZVIZ IoT Cloud platform, it will provide personalized education and safe companionship for
children. In terms of Robot Vacuum, EZVIZ built a new generation of Smart Vision Robot Vacuum based on
independently developed ToF, structured light technology and AI algorithm capabilities.
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EZVIZ has gradually formed a dual-main business pattern of “cloud platform services + smart home”,
and is further building a smart home ecosystem, expanding other smart home product categories in addition to
the four major self-developed products, and incorporating more devices into EZVIZ’s IoT ecosystem to
enhance the richness of users’ home-scenario equipment and provide users with more comprehensive smart
home solutions. With the increase in the number and activity of platform users, EZVIZ also provides users
with more practical and considerate value-added services through in-depth exploration of user needs.
EZVIZ will insist on exploring in-depth application scenarios, optimize product performance, and
continue to explore new breakthroughs to provide rich and high-quality security protection and smart life
experience for the broad EZVIZ users and smart home enthusiasts.
5.2 Innovative business- HikRobot
Focusing on technologies such as visual perception, AI and navigation control, relying on its solid algorithm
accumulation, strong software and hardware development capabilities, and a complete marketing system, HikRobot
focuses on intelligent manufacturing, and continuously invests in the fields of mobile robots and machine vision to
promote the digitization and intelligence of production and logistics.
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5.2.1 Mobile robots: focusing on intralogistics and promote intelligent logistics of factories
The mobile robot business relies on the three major hardware product lines of Latent Mobile Robot (LMR),
Conveyer Mobile Robot and Forklift Mobile Robot, and the two software platforms of robot control system (RCS)
and intelligent warehouse management system (iWMS). It focuses on the intralogistics in the warehouse or factory,
and provides professional intelligent logistics solutions targeting automobiles, 3C electronics, new energy,
supermarkets, various vertical e-commerce and other sub-sectors, to further reduce operating costs for users, and
improve production efficiency and management quality.
LMR series: In 2020, focusing on the improvement of intelligence and safety, HikRobot completed the
iterative upgrade of Simultaneous Localization and Mapping (SLAM) technology, which greatly improves product
performance and environmental adaptability, and achieves large-scale applications in the automotive, new energy,
household appliances and other industries. HikRobot is the leader in the industry in releasing the self-developed
“high-precision multi-vehicle collaborative operation control system”, which greatly expands the application range
of robots. The safety level of the safety controller independently developed by HikRobot reaches SIL3 (Safety
Integrity Level 3) level, making a major breakthrough in the industry.
Conveyer Mobile Robot series: Fragmentation of demands have brought a lot of customization work, which
has gradually become a pain point in the industry. In 2020, HikRobot introduced the design concepts and methods
of parametric design, improved the online design platform, and accumulated a large number of common components.
The modularized development method has greatly improved the efficiency of customized development and
facilitated the rapid implementation of projects in various industries such as display panels, auto accessories, heavy
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industry, and etc.
Forklift Mobile Robot series: In 2020, HikRobot increased investment in independent research and
development, strengthened collaboration with partners, and further improved and enriched its product portfolio. The
third generation omni-directional forklift F1-1000 has completed iterative upgrades and has been widely used in
communications companies. The second-generation Carton Transport Unit (CTU) F0-50 was released. Its
performance and stability have been greatly improved. The highest single stage stacking height can reach 5.2 meters,
which is at the leading level in the industry. The forklift F4-1000 and the forklift F3-2000 have also been
continuously upgraded and become the main products.
Intelligent support system: The intelligent support system represented by automatic power change substation,
which could complete the battery replacement within 90 seconds, while the conventional charging method requires
at least one hour to fully charge the battery, which can greatly improve the actual operating hours of the robot. For
the latest generation of automatic power change substation, the number of robots that can be supported by a single
substation has increased from 60 to 240.
The demand for transformation and upgrading of the traditional manufacturing industry continues, the
epidemic has continuous impact on traditional labor utilization methods, and the demand for automated logistics
continues to be strong. It is predicted that China's mobile robot market will continue to maintain a growth of more
than 40% in the next five years. The mobile robot business will continue to improve the intelligence of the robot
and optimize the delivery process of solutions and projects. Based on robot-based intelligent logistics applications,
HikRobot devotes itself to creating end-to-end full-process intelligent logistics solutions.
5.2.2 Machine Vision: Focused on industrial sensing to promote production digitalization and
intelligentization
As the core of industrial sensing, machine vision is the eyes of robots and automation equipment. It is a key
technology for building the industrial Internet and the perception network for digital factory. It is also an important
part of realizing flexible and intelligent production. In 2020, HikRobot further enriched and optimized machine
vision products, and tried to cultivate a vision application ecology centered on the Visual Master Platform (VM
Platform), to work with partners to meet the application needs of fragmented industrial scenarios.
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Industrial camera products: HikRobot released the second-generation of industrial camera series. It uses a
brand-new FPGA platform, and has comprehensively improved the power consumption control, image quality and
transmission stability; HikRobot optimized and diversified high-speed and high-resolution cameras by using
modular design of software and hardware, unified platform architecture, and achieved the combination expansion
of different interfaces and resolutions. It focused on breakthroughs in low-power control technology of 10 Gigabit
Ethernet, giving its products obvious power consumption advantages compared with competing cameras in the
industry, HikRobot has greatly improved image quality and product usability through comprehensively upgrading
ISP technology, adding pixel-by-pixel correction, and optimizing color restoration, image noise reduction and other
algorithms,
In terms of ID products, the entire series of products adopt the AI architecture, including the use of AI code
reading algorithms and AI heterogeneous processing platforms, supporting on-site training and learning, and quickly
adapting to various complex scenarios. Among them, for logistics code reading applications, 12 megapixel high-
speed code readers were released; at the same time, a number of economic logistics code readers were released to
meet the code reading needs of various logistics links. For industrial code reading applications, the ultra-small
ID2000 series, the miniaturized ID3000Pro series and the large-field ID5000 code reading series have been
introduced, which greatly enhance the competitiveness of industrial code readers.
AI technology application: The application of deep learning technology in machine vision was further
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promoted. The company continuously optimizes AI algorithm tools, explores the integration of AI algorithms
and traditional pattern recognition algorithms to complement each other. HikRobot actively promoted the
hardware productization of AI technology, and released smart camera open platform that supports deep
learning, to provide hardware support for partners with AI algorithm development capabilities. In terms of
algorithm platform, in addition to continuously optimizing software performance and usability, HikRobot
focuses on opening up its software architecture, providing a software framework and development interface
for industrial partners in machine vision algorithm development and application development, and creating a
simple, easy-to-use, open and compatible machine vision operating system to make the development of
fragmented vision applications more convenient and efficient.
In terms of solutions: For the logistics industry, HikRobot continuously optimized the multi-sided code
reading system and DWS (Dimension Weight Scanning) 2 system, while introducing the single-piece
separation system and theautomatic parcel feeding system for carbel sorting, which greatly improves the
efficiency of code reading, parcel feeding and sorting. They are widely used at major domestic express logistics
and transshipment centers and promoting the construction of smart logistics; for 3C, new energy and other
industries, HikRobot has launched a number of visual alignment assembly and defect detection solutions with
its partners to greatly improve production line flexibility and defect detection rate, helping industry customers
to improve quality and production capacity, reduce costs and increase efficiency.
In 2021, the Company will continue to make key investments in AI, 3D, and multispectral technologies,
launch more competitive technologies and products, while investing more resources in ecological construction,
and gradually shift from a product layout centered on image capture and imaging towards the ecological
construction centered on the VM Platform. HikRobot looks forward to working with industrial partners to co-
develop and create value together.
In the future, HikRobot will continue to focus on intelligent manufacturing. It will increase investments
in the two business areas of mobile robots and machine vision, and improve efficiency and reduce costs for
users through technological innovation of software and hardware products and platforms and continuous
improvement of delivery processes. HikRobot will facilitate the development of global intelligent
manufacturing.
2 Dimension Weight Scanning, integrated system for automatic volume measurement, weighing and multi- ID
authorization/recognition code reading.
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5.3 Innovative business - HikAuto
HikAuto focuses on the field of intelligent driving. Centered on video sensors, HikAuto combines various
technologies such as radar, AI, and perceptual data analysis and processing. The company is committed to
becoming the industry’s leading supplier of vehicle safety and intelligent products empowered byvideo
technology, with the capability of providing a wide range of services to passenger vehicle users, commercial
vehicle users, and other types of consumption as well as industry users globally.
5.3.1 Passenger vehicle before-market
In 2020, HikAuto further deepened the business cooperation with top domestic brands such as SAIC
Motor Passenger Vehicle, Geely Automobile, Chang’an Automobile, Great Wall Automobile, etc. In this year,
HikAuto won over 50 new mass production projects (more than 60 new projects and more than 40 vehicle
models in total). Besides, HikAuto further expanded the market of joint ventures and international brands.
This year, it officially passed the supplier reviewsof PSA, Mazda, Volvo, Jaguar Land Rover, etc., and has
obtained several designated projects including Dongfeng Honda, Shanghai General Motors and Renault Nissan.
It has helped in increasing the order numbers, the product penetration rate, and the coverage of mainstream
hot-selling models. It has also achieved some advantages in terms of platform and scale.
With widespread use of intelligent driving technology, HikAuto's technological investments in early years
have entered the payback period. This year, it officially mass-produced fully automatic parking products based on
the fusion of video and ultrasonic radar, and the performance of this product has been recognized by customers and
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won a number of new orders designations from multiple car factories. At the same time, HikAuto has further
increased investments in developing the intelligent cockpit, and taken the lead in mass production of systems
including ID authorization/recognition unlocking keyless entry, fatigue driving monitoring and gesture recognition,
which fully takes the advantages of HikAuto in the field of vision technology to bring about a more intelligent
cockpit experience.
HikAuto will continue to increase its investments in intelligent driving sensors, algorithms and system
products, fully leverage its technological advantages based on the fusion of video, ultrasonic and millimeter wave
radars, and launch more competitive solutions for around intelligent driving and intelligent cockpits.
In 2020, the business growth of the passenger vehicle pre-installation products doubled. Besides, the
accumulation of technical solutions, customers, and projects has laid a good foundation for the continuous and rapid
growth of HikAuto in the coming years.
5.3.2 Passenger vehicle aftermarket
Passenger vehicle owners' demand for Dashcam and and Around View Monitor continues to increase, and
driving video recording, rear-end collision evidence, injured feigning prevention, and parking view assist have
gradually become rigid demands.
In the dashcam product line, HikAuto has enriched its product line based on its differentiated technical
capabilities such as night vision, AI, and networking, and formed a comprehensive product layout, which has
achieved omni-channel sales through mainstream online e-commerce platforms and offline auto accessory sales
channel. Among them, the F6/C6 series dashcam has become the leading product of the 5 million pixel high-
definition intelligent networked recorder in the market.
In the Around View Monitor system, HikAuto has expanded to five major vehicle lines and 31 vehicle
models on the basis of three major car lines and 23 vehicle models in 2019. The key indicators, including
image sharpness, night visibility, seamless interfacing, ultra-low delay and reliability etc., have reached the
industry-leading level, and advanced driving assistance functions such as BSD (Blind Spot Detection) and
LDW (Lane Departure Warning) have been integrated into the Around View Monitor system to enhance the
value and competitiveness of the system.
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In 2020, HikAuto almost doubled the growth of its Dashcam products and Around View Monitor products
in the automotive aftermarket, which has created considerable brand value and earned more trust from
customers.
5.3.3 Commercial vehicle market
Commercial vehicles have achieved world-renowned vigorous development during the 13th Five-Year
Plan. The rapid development of e-commerce has promoted the rapid rise of express delivery. Heavy trucks for
trunk logistics, medium and light trucks for branch transportation, and micro-trucks for urban distribution in
the “last mile” have all continued to grow, with sales exceeding 5 million units in 2020; the continuous
integration of traditional cruise-style taxis with online booking-type taxis has rapidly grown to more than 3
million units. At present, China’s commercial vehicle inventory exceeds 20 million units. A huge number of
commercial vehicle resources carries a large number of passenger and freight transportation in addition to
aviation, railway and water transportation, which is closely related to the production and life of the people.
However, safety issues such as traffic accidents, casualties, and damage to goods have become increasingly
prominent. Major traffic accidents are frequently reported, traffic accidents caused by blind areas of vision
have significantly increased after speeding and fatigue driving,.
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In 2020, forward collision warning, lane departure warning, fatigue driving warning, driving behavior
analysis, etc. have gradually become the standard configuration of active and safe advanced assisted driving
construction projects for commercial vehicles in various regions. HikAuto has deeply explored the effects and
efficiency of algorithms to improve the cost-effectiveness of the product system. It has won unanimously praise
from users in more than 100 projects such as dangerous goods transport vehicles in Hunan Province,
construction vehicles in Zhejiang Province, and heavy truck logistics vehicles in Guangdong Province. Besides,
because of the rising trend of injuries and fatalities caused by the blind area of the driver’s vision, HikAuto
has further studied vehicle operating scenarios in depth to explore blind area collision risk factors in
combination with the actual operating environment of the vehicle. Through the integration of video and radar,
it independently developed a 360° blind zone collision warning system for the entire vehicle body. This system
will be widely used in buses, engineering vehicles, heavy trucks and other vehicles in the future to reduce
traffic accidents and casualties caused by blind spots in the field of vision.
In November 2020, the Intelligent Connected Vehicle Technology Roadmap 2.0 was released by National
Innovation Center of Intelligent and Connected Vehicles. Pursuant to the Roadmap, by 2025, the new car
installation rate for partial autonomous driving (L2) and conditional autonomous driving (L3) will exceed 50%.
According to Yole’s data, in 2018, the average number of cameras installed in vehicles worldwide was 1.7
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units. It is expected that this number will reach 2.5 in 2021 and 3 in 2023. In 2020, the average number of
cameras per vehicle in China is only 1.3 units, and there is large room for market development. HikAuto will
continue to increase its R&D investments in sensors, algorithms, and intelligent systems to help passenger
vehicle and commercial vehicle customers to make progress in the direction of intelligence and connectivity.
5.4 Innovative business - HikMicro
Centered on infrared thermal imaging technology and with MEMS-based technology, HikMicro provides core
devices, detectors, modules, infrared thermal imaging products and overall solutions to the world. The infrared
thermal imaging industry has always been restricted by the high price of core components, which limits the scale of
application. HikMicro is committed to coping with this challenge and promoting infrared thermal imaging products
from a niche to the general public.
5.4.1 Core sensor technology advantages
Uncooled infrared thermal imaging sensor technology involves multiple disciplines and multiple fields. At
present, only a few countries in the world have mastered this technology. After 4 years of development and
accumulation, HikMicro has created advantages in the following five aspects:
Advanced integrated circuit (IC) design: The ultra-low noise readout circuit design in the detector can realize
the collection of extremely weak infrared signals and stable output of signals in ultra-harsh environments. In the
signal output channel, advanced low-noise processing technology is used to reduce the influence of external
interference during the transmission process and ensure the clarity of the image; through the use of a hierarchical
buffer output structure, the chip area is reduced, the power consumption is reduced, and the stability is improved.
A readout circuit structure that suppresses external bias noise and suppresses environmental temperature changes is
adopted, so that the chip can be used in a low-power, low-cost TEC (Thermal Electric Cooler)-free detector, while
achieving excellent and stable imaging quality. On-chip non-uniform correction technology is adopted to improve
the dynamic range of the chip. High-precision digital output and simple customer design may improve anti-
interference ability; and standard universal input and output digital interface provide customers with convenience
for system integration.
MEMS (Micro Electro Mechanical Systems) micro-bridge structure design: The pixel structure,
packaging structure and layout design in the detector are important factors that affect the performance of the detector.
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In order to obtain better performance, HikMicro optimizes the MEMS structural parameters of the detector. The
selected thermal material has the characteristics of high temperature coefficient of resistance (TCR) and low 1/f
noise factor. The small pixel adopts a double-layer structure design to maximize the infrared absorption area; the
design of the resonant cavity and the infrared enhanced absorption structure realizes the maximum infrared
absorption rate of the detector in the 8-14um band.
MEMS and packaging process development: in accordance with the requirements of MEMS design and
packaging design, through craft menu development, stable batch output can be achieved. HikMicro’s process
capabilities are complete, with various metal film and dielectric film growth processes, dry and wet etching
processes, and organic cleaning processes. The minimum line width of the photolithography process can reach
0.35um. It has a number of self-developed core film growth processes and packaging processes in the infrared
field.
High vacuum packaging technology: Whether the chip can be electrically connected to external devices
in a vacuum environment and work stably and reliably under mechanical or environmental protection is an
important factor affecting product size and cost. HikMicro adopts advanced TEC (Thermo Electric Cooler)-free
ceramic package packaging and wafer-level packaging processes. Compared with the traditional metal
packaging process, the ceramic package packaging process has obvious advantages of low power consumption,
small size and low cost. The wafer-level packaging process adopts wafer processing throughout the whole
process, which has higher integration and yield, and has the advantage of lower cost.
Industrialization capability: The Company has self-built an independent and controllable 8-inch MEMS
production line and packaging line with an annual production capacity of 10,000 wafers and a million detectors,
which can continue to supply products to the market on a large scale.
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5.4.2 Product core technical advantages
With regard to the finished product, after years of development and accumulation, thermal imaging products
have accumulated five major advantages: clearer images, smarter algorithms, more efficient temperature
measurement, more stable applications, and more reliable manufacturing.
Clearer image: Focusing on image optimization, the self-developed adaptive AGC34.0 can better adapt to the
environment and enrich the image level; DDE4 technology makes the image more delicate and richer in details; 3D
DNR5 technology can effectively remove the noise in the image and improve the picture quality.
Smarter algorithms: The deep learning algorithm and scenario optimization improves the alarm accuracy of
behavior analysis, firework recognition, and target detection algorithms such as ships and vehicles.
More efficient temperature measurement: through accurate and reasonable temperature measurement model,
strict calibration, and standardized inspection process, the accuracy of temperature measurement is effectively
improved, the temperature difference of temperature measurement is small, and the stability is strong. The dual-
light fusion technology superimposes visible light details in the thermal image, which is convenient for users to
judge, supports multiple rules and flexible control of points, lines, and frames to meet the temperature measurement
requirements of key areas and special points.
More stable applications: PTZ’s intelligent temperature control system and intelligent air duct defogging
design ensure that the equipment can withstand the test of the severe cold in the northeast and the scorching heat of
Sanya, and can operate stably at -45℃~70℃. The self-developed optical axis adjustment technology allows the
visible light channel to be positioned without deviation, making it easy to find the details of the problem.
More reliable manufacturing: manufacturing and testing strictly in accordance with high quality production
requirements, multiple standard screening of raw materials, fully automated production, and dust-free clean room
packaging; multiple rigorous tests such as aging and air tightness before leaving the factory ensure that the product
is stable and reliable.
5.4.3 Three major thermal imaging product lines
Centered on its own sensors and relying on the advantages of sensors and product design technology, HikMicro
3 AGC: Automatic Gain Control, the gain mode is automatically adjusted to adapt to different scenes, so as to obtain a clearer image.
4 DDE: Dige Details Enhance, by sharpening the edges of objects in the image, the recognizability of the image is improved.
5 3D-DNR: 3D Digital Noise Reduction, the use of three-dimensional filtering technology effectively eliminates the noise in the
video image and obtains a smooth and clear image.
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divides its business into three product lines: online, handheld temperature measurement, and commercial vision.
Online products are mainly divided into two categories: security products and online temperature
measurement products. On the security product side, HikMicro combines thermal imaging, artificial intelligence,
and image recognition technology with the strong temperature perception of thermal imaging as a powerful
supplement to visible light to meet the needs of users for fire prevention and anti-theft. On the online temperature
measurement product side, based on video, HikMicro performs intelligent recognition of target characteristics and
behavior analysis and diagnosis optimized for temperature measurement application scenarios with leading
intelligent analysis algorithms, to create an efficient temperature measurement product suitable for the general
public, satisfying requirements of users to improve safety and efficiency.
In outdoor fire prevention scenes, the firework recognition algorithm based on thermal imaging and deep
learning deeply integrates thermal imaging and AI technology to comprehensively improve stability and accuracy.
One machine has multiple functions to protect forestry safety and contribute to environmental protection. In
perimeter prevention scenarios, behavior analysis based on deep learning can effectively classify humans, animals,
vehicles and other targets, to filter false alarms, and provide reliable and accurate security guards. In the field of
temperature measurement, the dual-light fusion technology of visible light and thermal imaging is used to accurately
locate abnormal areas and assist the daily maintenance of industrial equipment. In fields such as breeding
temperature measurement, inspection and quarantine, high-precision blackbody6-free equipment greatly reduces
user costs.
Hand-held temperature measurement products mainly focus on temperature measurement applications of
6 Blackbody: a device with constant radiant energy, which corrects the deviation of the radiation thermometer with the indication of
the blackbody temperature, thereby improving the accuracy of the radiation thermometer.
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industrial equipment such as electric power inspections. HikMicro provides mobile temperature measurement
modules, as well as a series of economical, professional, master and other handheld temperature measurement
products, which constitute a complete mobile temperature measurement solution covering various applications,
assists users to accurately measure temperature and diagnose defects with the advantages of temperature
measurement and image technology.
Commercial vision products are mainly divided into two areas: outdoor and assisted driving. In the outdoor
field, with its own sensor advantages and excellent image processing capabilities, HikMicro has released a series
of observation products ranging from consumer to professional, which are widely used in hiking, outdoor
exploration, search and rescue, and other scenarios; for assisted driving, HikMicro released thermal imaging
single/binocular car assisted driver products, which are used to assist driving under severe conditions such as closed
light driving at night and heavy fog or smoke.
In addition, HikMicro has created a full range of integrated products from the detectors, cores,to the integration
of the whole machine, providing one-stop product integration services, allowing more partners to quickly integrate
and use thermal imaging products to help create an infrared ecosystem circle.
5.4.4 Thermal imaging applications go to the masses
HikMicro launched its 160*120 resolution star product in 2019. The product is equipped with the most
advanced wafer-level packaging technology, which greatly reduces packaging materials, sensor costs, and promotes
thermal imaging products entering into the ““thousand-RMB era””. Such products have met market demand due
to their good performance and affordable prices, which have also brought out more fragmented application potential.
In 2020, HikMicro completed upgrading of economic products, which support algorithm customization and
switching, and load specified scenario algorithms trained and customized by the AI open platform to meet the
fragmented and personalized needs of customers and benefit thousands of industries.
During the Spring Festival of 2020, in response to the COVID-19, HikMicro quickly launched thermal imaging
temperature screening products and a “fast and economical” temperature screening solution. Relying on self-
developed sensors, by shortening the temperature measurement range, in combination with a large amount of
temperature measurement data analysis, HikMicro improved the environment self-adaptive ability of the equipment
through intelligent algorithm, and adopted advanced constant temperature and dust-free automatic manufacturing
technology, so that the stability and consistency of the product have been greatly improved, and the product accuracy
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can reach ≤0.5℃ (no blackbody) and ≤0.3℃ ( With blackbody).
With independent supply capability of core components, HikMicro will continue to consolidate its product-
side technical advantages, open up more application scenarios, and continue to lead thermal imaging from a niche
to the general public.
5.5 Innovative Business- HikSemi
HikSemi is committed to providing high-quality products and comprehensive storage solutions for users
around the world. It provides a variety of storage products including solid-state hard disk SSD, memory card, cloud
storage, mobile solid-state hard disk PSSD, solid-state U disk, etc., and its business covers consumer level,
enterprise level, industrial control level, video surveillance level and data center level and other scenarios that meet
the needs of multiple users.
Relying on a strong R&D team, deep technical precipitation, advanced management system and strict product
standards, HikSemi provides strong support for product development and production, which have reached the
advanced level of the industry in terms of safety, stability, durability, compatibility, reliability, etc.
5.5.1 Products of HikSemi
HikSemi makes continuous technological innovations based on user needs and develops corresponding
products. For SSD products, it increases investment in research and development of industry/enterprise and data
center products, actively innovates, pioneers the Zoned algorithm cluster, and has realized intelligent reconstruction
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of data channels and cooperated with MagicBox management software to increase product life, and further
consolidated and expanded its video application advantages in the server field. In terms of dedicated SSDs for video
surveillance, the capacity has been further expanded, with a maximum capacity of a single disk reaching 8TB,
providing a better choice for high-performance, large-capacity, and high-density applications. In addition, based on
data and technology accumulation, HikSemi has developed service items such as life warning, fault diagnosis, data
migration of out-of-guarantee bad disks, product life extension, etc., effectively improving user service experience.
For the more consumer-oriented flash memory application products, HikSemi integrated resources to create the
HikSemi App, where users may access private storage products anytime and anyplace and browse and share data
in various formats such as pictures and videos. The H200 cloudstorage product launched in 2020, with a brand-new
hardware architecture, provides users with more ideal task processing efficiency. It is the first time in the industry
to realize remote switch on and off, which greatly solves the pain points of users’ instant switch on and off. It was
strongly concerned and favored by consumers at its launch. In terms of PSSD, as PCIE gradually becomes the
mainstream of SSD, HikSemi is also gradually applying new technologies. Following the launch of the fingerprint-
encrypted PSSD-T100F in 2019, HikSemi launched a new Elite series of products in 2020. This series of products
takes high-speed, safety, waterproof, and appearance as the main entry points, in consideration of Hikvision’s self-
developed firmware algorithm and extreme heat dissipation design, which greatly meets the needs of users in high-
speed application scenarios. In terms of memory card products, relying on its position in the high-end video
surveillance industry and the accumulation of video storage technology, HikSemi, on the one hand, has successively
launched cost-effective video monitoring cards suitable for continuous data writing scenarios. On the other hand,
HikSemi has continued to expand the memory card market segment and continuously launched cost-efficient and
high compatible consumer cards that can be widely used in civil secruity, mobile phones, cameras, speakers and
other products, as well as driving record cards used in driving recorders, and handheld game cards favored by
gamers.
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5.5.2 Channel construction and user services
HikSemi has been developing in the industry market and channel markets and has initially completed the
major layout of domestic and foreign marketing networks, with nearly 2,000 customers, injecting strong new
momentum into sales growth. HikSemi has always paid attention to customer service. Adhering to the concept of
“dedicated to customers’ continual success, adding value to companies and communities", HikSemi provides fast-
responsive, efficient and convenient one-stop user services before, during and after product sales, so as to gain
customer praise.
5.5.3 Supply chain management and quality management
HikSemi focuses on developing production control software, optimizing the supply chain management system,
expanding production capacity and implementing comprehensive quality management measures, improving the
supply chain management system and quality management, and further improving delivery capabilities and product
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quality.
With the accelerated advancement of technological innovations such as artificial intelligence, blockchain,
cloud computing and the Internet of Things in the digital information age, data has also shown explosive growth,
and the demand for storage in the memory market has continued to expand. Adhering to the original aspiration of "
"Storing every beautiful moment and using intelligence to change lives" and the user-oriented concept, HikSemi
will continue to provide enterprises and consumers with the latest safe and reliable storage devices, systems and
storage solutions through product innovation, technological innovation, marketing innovation and brand building,
and strive to become a leading provider of storage products and data storage solutions in China.
5.6 Innovative business- HikFire
Hikfire is committed to the research and development, production, sales and service of integrated fire
protection solutions, continues to develop security-fire integrated products and technologies, serves industry
management and applications, and is committed to building one-stop fire safety system solutions and one-stop fire
operations service solutions.
5.6.1 One-stop fire safety system solution
The gradual transformation of the fire protection industry to marketization and digitalization is an inevitable
trend, and the integrated application of fire-fighting materialization, platformization, and security-fire integration
has gradually become a consensus of the industry. From the pre-installation market to the after-installation market,
HikFire has built a one-stop fire safety system solution framework from detection and early warning, fire alarm,
emergency evacuation to fire fighting and rescue, which can be divided into traditional fire fighting and smart fire
fighting business from the product dimension.
In the traditional fire protection field, products cover automatic fire detection and alarm systems and linkage
subsystems, including power supply monitoring of fire equipment, electrical fire monitoring, combustible gas
detection and alarm, fire emergency broadcast and telephone, fire door monitoring, emergency lighting and
evacuation, residual pressure monitoring, gas fire extinguishing controller, etc. HikFire advocates the digitization
of installation and commissioning of traditional fire protectionprojects, to realize remote commissioning and online
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management by using system-integrated commissioning tools, and provides convenient commissioning solutions
for partners, which greatly improve delivery efficiency.
In the field of smart fire protection, by using multi-spectral fire detection and recognition technology, HikFire
improves wireless fire alarm solutions, optimizes fire graphic display devices and deepens the application of security
fusion products. The design of fire alarm and video linkage with traditional fire protection and smart security realizes
the integrated management of safety and fire protection, providing customers with full-cycle integrated solutions,
which are widely used in the fire protection after-installation market.
HikFire provides industry solutions, and builds a scenario-based, systematic and visualized fire protection
system based on industry scenarios and actual business characteristics to help the industry improve the level of fire
safety management. At present, two basic solutions and eight industry solutions have been released.
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HikFire is committed to building a three-dimensional fire protection system with global coverage, full-time
availability, and global visibility. Based on security-fire integration and intelligent management platform, through
data sharing, analysis, prediction, and research and judgment, it improves the ability of fire safety trend early
warning and forecast, which realizes differentiated and precise supervision, reduces fire safety risks, and improves
fire management efficiency.
5.6.2 One-stop fire protection operation service solution
In the field of fire protection operation services, HikFire builds a cloud service center based on cloud
technology, and continues to provide operational service for key fire protection units, general social units,
community streets, maintenance organizations, operating organizations, etc., to further open up upstream and
downstream businesses, and achieve business intensification and intelligence by integrating fire protection offline
service and through “online operation + offline service”, so as to improve operating efficiency, reduce operating
costs, provide value-added services, and build an industry and service ecosystem.
According to forecasts from the Prospective Industrial Research Institute, the scale of the smart fire protection
market in 2020 was approximately RMB 4 billion, representing a growth rate of about 15% over the previous year,
in line with market expectations. The scale of the smart fire protection market in 2025 will be nearly RMB 8 billion.
According to the calculations of Huicong Fire protection Website, the domestic fire alarm product market is
expected to exceed RMB 20 billion, and the overall market of the fire-fighting equipment market will exceed RMB
70 billion.
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HikFire continues to create the one-stop fire safety system solution and the one-stop fire protection operation
service solution , and commits itself to the digital transformation of fire protection. Through continuous integration
of new technologies and innovative management methods, it reduces fire safety risks and improves fire management
efficiency, so as to provide a safer environment for the whole society and make life better!
5.7 Innovative business - Rayin
Rayin is a complete solution provider focusing on X-ray detection business, dedicated to the technology
research and development, manufacturing, equipment sales and leasing services of non-visible light detection
equipment. Relying on the long-term accumulation in the fields of multi-dimensional sensing technology, invisible
light imaging technology, artificial intelligence technology, equipment IoT technology, etc., technology
empowerment and value creation are carried out in the fields of smart security inspection and industrial "intelligent"
manufacturing.
Rayin applies the intelligent algorithm innovation of contraband intelligent identification algorithm, on-the-
job identification, equipment status monitoring and other intelligent algorithm to the field of security inspection. It
provides multiple series of products such as physical inspection products, human security inspection products and
industrial detection products. Based on data networking supported by intelligent algorithms, it empowers users to
achieve business closed-loop management, personnel on-the-job management, equipment operation and
maintenance management, and successfully implements system applications in core security business scenarios such
as public security, transportation, government, hospitals, cultural museums, enterprises, and large-scale event
venues.
5.7.1 Luggage security inspection field
Based on X-ray imaging technology, Rayin focuses on the application of intelligent algorithms and the
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improvement of recognition efficiency. It provides multiple series of security inspection machines. Rayin
continuously optimizes and enhances the effect of intelligent recognition algorithms, improves the types and
accuracy of contraband identification, and helps security inspectors to improve the quality and efficiency of security
inspection work. The products are widely adapted to security inspection business scenarios such as transportation
hubs, judicature cultural and tourism, etc. Rayin also released a series of intelligent analysis products, which
fully integrates the business needs of the security inspection machine for the detection of contraband, continuously
optimizes and improves the effect of the intelligent identification algorithm, improves the recognition type and
accuracy of contraband, and assists security inspectors to improve the quality and effect of security inspection.
疑似液体（97%）
5.7.2 Human security inspection field
Rayin innovatively integrates and expands a variety of detection methods based on traditional metal detection
technology, enriches data collection types, and better responds to the needs of different users for human detection
in different scenarios. With the sudden outbreak of the COVID-19 pandemic at the beginning of 2020, Rayin
actively responded to the need for rapid screening of sudden epidemics. Starting from the Spring Festival, it has
successively released a number of walk through metal detector with temperature screening, which can quickly
complete body temperature measurement without contact, providing portable metal detection for traffic operation,
resumption of work and school opening, while adding the first line of defense for body temperature screening.
5.7.3 Industrial detection field
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With the capability of X-ray penetration imaging X-ray detection technology has a very wide range of
application scenarios in industrial production. Rayin provides X-ray-based non-visible light detection products. In
combination with artificial intelligence technology, it actively explores the implementation of non-visible light
imaging technology in the industrial manufacturing field, hammers outoverall industrial detection solutions, and
empowers business partners to jointly create new applications in industrial intelligent manufacturing.
Based on its understanding of multiple business scenarios, Rayin will implement the full-spectrum IoT strategy,
continue to increase R&D investment in non-visible light imaging technology, improve product performance,
expand market coverage, tap application potential, and contribute to the creation of a safer, more convenient and
better society.
5.8 Innovative business- HikImaging
HikImaging is committed to the research and development of micro-vision and audio-video interaction
technology. Based on related technologies such as visual imaging, video analysis, audio and video encoding and
decoding and transmission in professional scenarios, it provides professional hardware and software systems for
many industries such as medical treatment and education.
There are many video application scenarios in medical, education and other industries, which have professional
requirements for specific imaging effects. Real-time recording and transmission of high-quality audio and video
data are required. At the same time, the application in such industries possesses the characteristics of limited number
of single scenes, high degree of personalization and long productization cycle. Based on the technical accumulation
in the video image field and the continuous R&D of the professional technical team, HikImaging has broken
through the key technologies of micro-vision, close-range imaging, and audio and video interaction, deeply
understood the needs of user scenarios, and has launched a series of professional technical solutions and product
options such as micro-camera system, remote surgery demonstration , and professional practical training.
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5.8.1 Facilitating the upgrade of the minimally invasive medical industry
Based on the foothold of serving minimally invasive medical product manufacturers, HikImaging provides
customers with technical solutions that have independent technical advantages and meet the video image
requirements of specific scenarios in different departments. It continues to invest in basic video image technology
to promote the effective transformation of advanced video image technology in the minimally invasive medical
industry and promote industrial upgrading. In 2019, HikImaging provided micro-camera system components to
help minimally invasive medical product manufacturers and obtained the first 4K endoscopic camera system
registration certificate in Zhejiang Province. In 2020, HikImaging further enriched its basic technologies, optimized
technical solutions, and assisted many minimally invasive medical product manufacturers to upgrade ultra-high-
definition video image technology.
5.8.2 Facilitating the improvement of medical education informatization
The training of clinicians and medical students focuses on practical teaching, academic and scientific research
activities. Aiming at medical practice scenarios, HikImaging provides surgical teaching systems including ultra-
high-definition surgical vision cameras, video recording hosts, teaching software and other products, which support
mobile or fixed installation and deployment, and support local area network and public network applications. For
medical teaching scenarios, HikImaging provides video product solutions for specific teaching scenarios in medical
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schools and training bases (nursing, clinical, traditional Chinese medicine, etc.), which can achieve dual-teacher
application between medical schools and affiliated hospitals through the cloud interactive software platform, and
accelerates the spread and inheriting of superb medical skills.
5.8.3 Facilitating the improvement of vocational skills teaching quality
Vocational education mainly cultivates technical skills talents, and the Ministry of Education requires practical
teaching hours in vocational colleges to account for more than 50% of the total hours in principle. Based on audio
and video interaction, recording and rebroadcasting, and close-range imaging technology, HikImaging provides a
training video teaching system for close-range/panoramic cameras, video terminals, training teaching software and
other products. In response to the teaching requirements of segmented scenes, HikImaging has launched
professional video teaching product solutions for auto repair, cooking, electromechanical and other training scenes,
which can realize cross-internet school-enterprise interactive teaching through the cloud interactive software
platform.
HikImaging will continue to invest in the research and development capabilities of imaging detection, micro
vision, audio and video interaction and intelligent analysis in professional scenarios, statisfy the users and market
demands, accelerate technology application and product transformation, and provide more professional product
technical solutions for industry users and customers.
II. Significant changes in main assets
1. Major Changes in Main Assets
Major assets Explanation on Major Changes
The increase of 140.18% was mainly due to increased investments in Hangzhou Haikang Intelligent
Equity Assets Industrial Equity Investment Fund Partnership (L.P.) and China Electronic Technology Finance Co.,
Ltd.
Fixed Assets No significant change
An increase of 19.61% was mainly due to the addition of land use rights to Nanchang Science and
Intangible Assets
Technology Park and other multi-site science and technology parks.
Increased by 125.67%, mainly due to increased investment in the construction of Chengdu Science
Construction in Progress and Technology Park, Hangzhou Innovation Industry Park, and Chongqing Science and Technology
Park Phase II Project
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2. Major Overseas Assets
□ Applicable √ Inapplicable
III. Analysis of core competitiveness
Hikvision sticks to the principle of taking its technology products as the root and empowering its customers as
the orientation, empowering application scenarios with AI and empowering enterprises in digital transformation and
smart city construction with big data-AI fusion, and to become a pragmatic practitioner of the real economy under
the intelligent era.
1) Continuous efforts in R&D inputs and technology innovation to drive the Company’s development
The intelligent IoT industry that Hikvision is engaged in features fragmented demands and product appllication
scenarios. The essence of business expansion depends on the establishment of products and technology systems
applicable to the industry’s demands. The Company insists on the industry demands as its starting point to drive the
upgrade and iteration of products and solutions, maintain increasing efforts in R&D inputs and construct profound
technology capabilities of the Company.
Hikvision has been developed from video collection, following the business expansion to continuously explore
the full spectral perception capability, extends information perception manners from visible light to far infrared, X-
ray, millimeter wave and other fields, and continues to explore perception methods such as sound, temperature,
humidity, pressure, magnetism, etc., polishes and iterates series of hardware equipment for signal processing,
transmission display and etc., and expands the product application scenarios from security and intelligent IoT to
industrial automation, ADAS, fire protection and control, security check and many other scenarios. The annual sales
of hardware equipment has reached 27,000 different models.
Starting with customers’ needs, Hikvision has drawn a layout of industrial solutions since 2009 to gradually
cover public services and over various 10 large-scale and 70 small-scale industrial applications which are enterprise-
business-related, and has formulated the unified software technology architecture since 2016 to safeguard the
consistency of software R&D in a normalized manner and exploit the reuse value of software resources, and
promotes the AI open platform by focusing on the practice needs of fragmented-scenario AI algorithm trainings and
reduces marginal costs incurred by business expansion through reusability of technology instruments.
Hikvision has invested over RMB 20 billion in aggregate in R&D over the last 5 years, among which R&D
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inputs in 2020 represented over 10% of total sales, with more than 20,000 R&D technical staff representing nearly
50% of the Company’s staff in total. The long-term high-intensity technology investments centering on business
scenarios has provided strong support for the Company’s solid business development. The Company will continue
to maintain its efforts in R&D inputs and closely focus on industrial demands to develop a strong technology system
of the Company.
2) Continuous optimization of domestic and overseas sales service system to jointly create value with
partners
Hikvision has established 32 provincial business centers nationwide to advance business-decision making and
software customization development capability at local level, with over 300 city branches covering a majority of
cities over China to ensure the effective implementation of businesses. Hikvision has established 19 regional
function centers overseas, with 66 branches under it, building marketing, service and R&D capabilities on a national
basis, and providing services to 155 countries and regions.
Hikvision has multiple-layer channel partners spreading broadly across markets of various types, and has
established close cooperations with over 6,000 distributors, 10,000 integrators, 300,000 project contractors, 400,000
installers and over 1,000 service providers all over the world to jointly offer products and services to terminal users.
The Company has carried out cooperations with over 30 universities and scientific research institutes and established
joint innovative laboratories with over 100 user units which are fully open to partners for mutual benefits, to jointly
create an industrial innovation union.
3) Adhering to the core business philosophy to continuously enhance the management system
Since its inception, Hikvision has always been adhering to the business philosophy of "professionalism,
honesty, and integrity”, which is always considered by the Company as the standard for guiding its business
development and has already become the faith of all staff in the Company to abide by, regardless of the changes in
internal and external environment and the circumstances of the times.
Confronted with increasingly business development and changes, the Company also updates its resource
organization and management methods accordingly. Regarding the business direction formulation, the Company
has formed a comprehensive strategic planning method which is regularly refreshed and updated on a rolling basis,
unified awareness. Each business and functional department communicate effectively and align on work assignment
to ensure clear goals and decompose in place. Regarding the process management, the Company conducts the
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process management by centering on its customers and promotes over 100 reform projects of process management
each year, to keep optimizing resource layout and smoothing coordination methods. The Company has expanded
IT system to every aspects of business operation to effectively provide services and improve operating efficiency.
Through big-data measures, the Company carries out identification, management and control of financial risks,
constructs the digital and full-coordinated quality management system, improves the internal operation risk control
system, increases efforts in internal anti-corruption and integrity establishement, and respects and protects
intellectual property.
Hikvision expands its businesses with its unchanged original aspiration, adapts to the increasing evolving
business environment through iterative organizations, and adapts into changes in development.
4) Guiding the supply chain system to adapt to changes and flexibly distributing production resources
Stable and reliable raw material supplies are the important foundation of the Company to provide the industry
with diversified products, while flexible and high-efficient production layout is the important ensurance for the
steady growth of the Company’s businesses.
Hikvision establishes solid and mutually beneficial cooperative relationship with suppliers and joins hands
with over 1,000 suppliers around the world to jointly develop and improve the hardware underlying technology
platform. In light of uncertainties on supply chains brought by politics and epidemic in recent two years, the
Company still maintains a high level of raw materials and adapts to changes and uncertainties in the external
environment through redundant inventories.
Hikvision has domestic manufacturing bases in Hangzhou Tonglu, Hangzhou Binjiang and Chongqing, has
proceeded with the manufacturing base in Wuhan and the expansion plans in Tonglu and Chongqing, while
establishing local factories in India, Brazil and the United Kingdom, to support global product supply. Leveraging
on over 180 SMT production lines and over 40 automatic assembly lines, the Company has built leading automatic
production capabilities in the industry, and establishes a prompt, flexible and coordinative manufacturing system to
achieve the production model of multiple variaties, small batches and large-scale mass customization.
5) Adhering to the long-term philosophy of “talent-focused, growing together” and gathering talents from
all over the world
Hikvision considers talents as the most important source of enterprise competitiveness and gathers talents from
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all over the world, while adhering to the employment concept of “talent-focused, growing together”.
To discover and cultivate talents and have a reasonable evaluation on them, the Company has formulated a
dual career development path consisting of management sequence and professional sequence, established a
professional qualification evaluation system and a talent assessment system, and implemented a multi-level training
mechanism, while making constant investments for the consolidation and upgrade of backbone talents as well as
the reservation and development of backup talents of the Company. The Company constantly improves the
performance evaluation mechanism, integrating talents recruitment, promotion and downgrading, training and
development as well as salaries and benefits, to boost the morale and creativity of employees. The comprehensive
return system for staff has been established which consists of remuneration benefits, share incentives and innovative
business co-investments. On one hand, share incentives and innovative business co-investment system, which are
designed for and applicable to all consistent strivers drive the rapid development of businesses; on the other hand,
long-term returns are also created for all staff who participate in co-investments, coordinating the long-term
development of business with continuous growth of talents at the same pace.
The Company encourages its staff to organize hobby clubs freely, regularly holds diversified cultural and sport
activities to create an equal, open-minded and positive organizational atmosphere. Through theme events such as
“Face-to-Face with Executives”, “Dialogue with Managers”, “Humanities Lecture Hall”, “Reading Club”, etc., it
has assisted the staff with comprehensive growth.
6) Continuously developing the global compliance system and safeguard the business’s development
Hikvision spreads its businesses all over the world and is required to put its efforts on the establishment of the
global compliance system to carry out businesses in every region pursuant to local laws and regulations in order to
ensure the long-term sustainable development of the Company.
Hikvision has established the independent global compliance department in 2019, putting its efforts on
achievement of the internationalized corporate governance system and risk management and control capability,
willing to accept supervision from all parties. The Company’s compliance department cooperates with business
teams in each region to meticulously study the laws and regulations environment of each country and region,
conducts a full-process compliance guidance during business operation, and regularly carries out internal
compliance education to enhance compliance awareness of each organizational department in the Company,
facilitating the smooth implementation of the Company’s business operation.
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Section IV Discussion and Analysis on Business Operation
I. Overview
In 2020, COVID-19 epidemic spread across the world, resulting in the lockdown of many nations and regions
and the occurrence of suspension and concession of their economy. The U.S. continued to stress on Chinese
technology enterprises which led to the further intensive impact on the global supply chains. Facing various
uncertainties in the external environment, the Company continued to increase its efforts in R&D inputs, continuously
promoted the Company’s steady and healthy operation through technology innovation, which is the most important
means of the Company’s sustainable development. During the reporting period, the Company achieved a total
operating income of RMB 63.50 billion, with year-over-year growth of 10.14%; the net profits attributable to
shareholders of the Company was RMB 13.39 billion, with year-over-year growth of 7.82%. The Company’s overall
gross profit margin in 2020 was 46.53%, an increase of 0.54 percentage points compared with the same period of
the prior year.
II. Core business analysis
1. Overview
1) Increasing input in R&D, and coping with challenges and embracing opportunities through technology
innovation
In 2020, the Company’s R&D input was RMB 6.38 billion, which was equivalent to 10.04% of the Company’s
total operating income; the R&D expenses ratio of the Company has further increased; the Company had over
20,000 R&D and technical service personnel.
During the reporting period, the Company continued to cope with challenges brought by uncertainties of global
supply chains, and built up cooperations with more abundant alternative suppliers through adjustment, replacement
and supplement of product design plans to further ensure the continuous stable supply of the Company’s products.
During the reporting period, the Company upgraded its software and hardware products, enhanced its
advantageous position of video products and actively conducted intelligent upgrade on non-video products, to
gradually build a comprehensive perception product system. Algorithm, components and module resources have
been continuously accumulated. Edge node, edge domain, cloud center and Internet-application open platform were
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optimized and iterated. The technology system of Hikvision, based on IoT perception, AI, and big data as its core,
has been improved constantly.
2) Solidifying multi-dimensional perception technology basis and expanding business areas
In 2020, the Company continued to advance technology accumulation in fields such as visible light, far infrared,
millimeter wave, X-ray, sound wave, etc., to accelerate the integration and application of various detector
technology. At the beginning of 2020, HikRayin with X-ray detection business as its core was established. Taking
into account the business development and market integration, the Company adjusted the business of HikMicro.
During the COVID-19 epidemic, leveraging on the advantages of self-developed thermal imaging chip of HikMicro,
Hikvision quickly launched body temperature measurement products, while HikRayin quickly launched
temperature-measurement human-body security check machines through the fusion application of thermal imaging
and X-ray, to facilitate the control and prevention of the epidemic through technological measures.
Based on the strategic position of IoT perception business, Hikvision expands and covers a number of new
business fields as planned. The new perceptive measures will bring more abundant and flexible perceptive channels
for the Company’s products. Long-term accumulation of technology reserves and product experience has helped
the Company respond to emergency, react quickly and timely and effectively in developing new technology and
novel products to seize potential opportunities under urgent cases.
3）Continuously advancing the construction of domestic and overseas sales and service system and promoting
digital marketing
In 2020, the Company continued to propel the construction of sales service system. Currently, Hikvision has
established 32 provincial marketing centers nationwide with over 300 city branches and offices. The Company has
established 66 branches overseas to provide products and services to 155 countries and regions all over the world,
with Marketing and service network presence in every corner of the market. Due to the impact of the epidemic, the
Company accelerated the pace of marketing in digitalization, upgraded fully digitalized sales management process,
improved full-process management and control system on products and services, and enhanced comprehensive
management capabilities of R&D, manufacturing, sales and services.
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4) Attaching high importance to the construction and maintenance of the supply system to Ensure the
continuous stability of supply
In 2020, confronted with uncertainties brought by overseas politics and epidemic, the Company continued the
high-level inventory strategy for raw materials, realized stable progress of necessary material replacement, and
coordinated with all suppliers to ensure the stability of the supply chain. In addition, the supply chain continued to
propel lean production, improve the level of intelligent manufacturing, optimize delivery efficiency, and ensure a
solid business development.
5) Continuously promoting operation optimization and improving the level of internal management
The Company’s performance results were significantly influenced by the COVID-19 epidemic at the first half
of 2020. To cope with external stress, the Company adjusted its expenditure strategy in a timely manner, enhanced
management, control and optimization for expenditure, and advanced the improvement of internal operation. Under
unfavorable external environment, the Company concentrated on the optimization of internal management work,
paid attention to details and improved operational efficiency.
2. Operating incomes and operating costs
1) Operating income structure
Unit：RMB
2020 2019
YoY Change
Proportion to Proportion to (%)
Amount Amount
operating income operating income
Total operating income 63,503,450,891.78 100% 57,658,110,065.22 100% 10.14%
Classified by industry
Video products and video
63,503,450,891.78 100.00% 57,658,110,065.22 100.00% 10.14%
services
Classified by product
Front-end equipment 28,841,213,141.09 45.42% 27,175,127,832.29 47.13% 6.13%
Back-end equipment 6,867,289,356.22 10.81% 7,519,825,167.90 13.04% -8.68%
Central control equipment 10,146,396,260.19 15.98% 8,822,675,802.63 15.30% 15.00%
Constructions 1,614,246,940.42 2.54% 1,091,421,819.86 1.89% 47.90%
Others 9,865,958,856.89 15.54% 8,612,324,560.21 14.94% 14.56%
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2020 2019
YoY Change
Proportion to Proportion to (%)
Amount Amount
operating income operating income
Subtotal 57,335,104,554.81 90.29% 53,221,375,182.89 92.30% 7.73%
Smart home business 2,918,904,302.62 4.60% 2,592,271,750.14 4.50% 12.60%
Robotic business 1,358,653,520.55 2.14% 813,993,602.43 1.41% 66.91%
Other innovative businesses1 1,890,788,513.80 2.97% 1,030,469,529.76 1.79% 83.49%
Subtotal 6,168,346,336.97 9.71% 4,436,734,882.33 7.70% 39.03%
Classified by region
Domestic 45,806,567,913.73 72.13% 41,419,508,094.09 71.84% 10.59%
Overseas 17,696,882,978.05 27.87% 16,238,601,971.13 28.16% 8.98%
Composition of operating income of the three major business groups in China2
Unit: 100mn
2020 2019 YoY Change (%)
PBG 163.04 155.86 4.61%
EBG 151.80 125.91 20.56%
SMBG 96.83 93.56 3.50%
Total 411.67 375.33 9.68%
2) Industries, products or regions accounting for more than 10% of the Company’s operating income or
operating profit
√ Applicable □ Inapplicable
Unit: RMB
YoY Change (%)
Gross YoY Change (%) YoY Change (%)
Operating income Operating cost of operating
margin of operating cost of gross margin
income
Classified by industry
Video products and
63,503,450,891.78 33,957,697,857.73 46.53% 10.14% 9.05% 0.54%
video services
Classified by product
Front-end equipment 28,841,213,141.09 12,797,470,301.71 55.63% 6.13% -1.69% 3.53%
1 Other innovative businesses include products of the corresponding businesses of the innovative business subsidiary HikAuto,
HikMicro, HikSemi, HikImaging, HikFire, Rayin and others. Same below.
2 Some innovative business products rely on the sales of the three major business groups. The sales statistics of the business groups
are divided by the sales responsible unit, but the sales statistics of the product / innovation business are divided by product forms.
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YoY Change (%)
Gross YoY Change (%) YoY Change (%)
Operating income Operating cost of operating
margin of operating cost of gross margin
income
Back-end equipment 6,867,289,356.22 3,463,814,165.41 49.56% -8.68% -6.38% -1.24%
Central control
10,146,396,260.19 5,587,909,127.42 44.93% 15.00% 30.28% -6.45%
equipment
Constructions 1,614,246,940.42 1,353,524,939.67 16.15% 47.90% 60.36% -6.51%
Others 9,865,958,856.89 6,887,430,103.27 30.19% 14.56% 6.29% 5.43%
Subtotal 57,335,104,554.81 30,090,148,637.48 47.52% 7.73% 6.21% 0.75%
Smart home business 2,918,904,302.62 1,772,362,386.38 39.28% 12.60% 12.54% 0.03%
Robotic business 1,358,653,520.55 703,671,619.41 48.21% 66.91% 85.10% -5.09%
Other innovative
1,890,788,513.80 1,391,515,214.46 26.41% 83.49% 62.92% 9.30%
businesses
Subtotal 6,168,346,336.97 3,867,549,220.25 37.30% 39.03% 37.68% 0.62%
Classified by region
Domestic 45,806,567,913.73 25,226,610,746.84 44.93% 10.59% 12.87% -1.11%
Overseas 17,696,882,978.05 8,731,087,110.89 50.66% 8.98% -0.66% 4.78%
Adjusted statistics of principal business are based on the caliber at the end of the reporting period of last year, if
the statistics caliber of principal business has been changed during the reporting period
□ Applicable √ Inapplicable
3) If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
Industry Item Unit 2020 2019 YoY Change (%)
Sales volume Per unit 139,309,170 141,859,538 -1.80%
Video products and
video services
Output volume Per unit 138,254,927 148,141,909 -6.67%
Explanation on why the related data varied by more than 30% on a YOY basis
□Applicable √Inapplicable
4) Fulfillment of signed significant sales contracts by the reporting period
□ Applicable √ Inapplicable
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5) Operating cost structure
Classified by industry
Unit: RMB
2020 2019 Increase/
Industry Item Proportion to Proportion to decrease over
Amount Amount
operating cost operating cost previous year
Video products
and video Operating cost 33,957,697,857.73 100% 31,140,176,777.12 100% 9.05%
services
Classified by products
Unit: RMB
2020 2019 Increase/
Product Item Proportion to Proportion to decrease over
Amount Amount
operating cost operating cost previous year
Front-end
Operating cost 12,797,470,301.71 37.69% 13,018,006,201.14 41.80% -1.69%
equipment
Back-end
Operating cost 3,463,814,165.41 10.20% 3,700,043,734.49 11.88% -6.38%
equipment
Central control
Operating cost 5,587,909,127.42 16.46% 4,289,265,345.53 13.78% 30.28%
equipment
Constructions Operating cost 1,353,524,939.67 3.99% 844,074,602.62 2.71% 60.36%
Others Operating cost 6,887,430,103.27 20.27% 6,479,665,731.95 20.81% 6.29%
Subtotal Operating cost 30,090,148,637.48 88.61% 28,331,055,615.73 90.98% 6.21%
Smart home
Operating cost 1,772,362,386.38 5.22% 1,574,835,597.99 5.06% 12.54%
business
Robotic business Operating cost 703,671,619.41 2.07% 380,163,028.57 1.22% 85.10%
Other innovative
Operating cost 1,391,515,214.46 4.10% 854,122,534.83 2.74% 62.92%
businesses
Subtotal Operating cost 3,867,549,220.25 11.39% 2,809,121,161.39 9.02% 37.68%
6) Any change in consolidation scope during the reporting period
√Yes □ No
During the reporting period, the Company has newly set up three wholly-owned subsidiaries and four holding
subsidiaries, acquired three subsidiaries, and cancelled two subsidiaries, which have caused the changes in
consolidation scope. For more details, please refer to Financial Report Note (VI) “Changes in consolidation scope”
of the financial statement.
7) Significant change or adjustment of the Company’s business, products or services during the reporting
period:
□ Applicable √ Inapplicable
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8) Major customers and suppliers:
Sales to major customers of the Company
Sales to top five customers (RMB) 1,962,348,321.68
Total sales to top five customers as a percentage of the total sales for the year (%) 3.09%
Total sales to the related parties in top five customers as a percentage of the total
0.00%
sales of the year (%)
Information on top five customers
No. Name of Customer Sales Amount (RMB) Percentage of total sales for the year
1 First 823,238,525.43 1.30%
2 Second 396,030,353.38 0.62%
3 Third 257,714,277.63 0.40%
4 Fourth 251,783,014.66 0.40%
5 Fifth 233,582,150.58 0.37%
Total -- 1,962,348,321.68 3.09%
Other information of major customers
□Applicable √Inapplicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 8,411,002,227.23
Total purchases from top five suppliers as a percentage of the total purchases for the year 23.64%
Total purchases from the related parties in the top five suppliers as a percentage of the total
0.00%
purchases for the year
Information on top five suppliers of the Company
No. Supplier Name Purchase Amount (RMB) Percentage of total purchase for the year
1 First 4,488,262,380.13 12.62%
2 Second 1,751,616,676.30 4.92%
3 Third 807,975,634.31 2.27%
4 Fourth 702,217,512.81 1.97%
5 Fifth 660,930,023.68 1.86%
Total -- 8,411,002,227.23 23.64%
Other information on major suppliers
□ Applicable √ Inapplicable
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3. Expenses
Unit: RMB
Increase/decrease
2020 2019 over previous Note of significant change
year
Sales expenses 7,377,790,744.58 7,256,781,486.68 1.67% No significant changes
Administrative expenses 1,790,013,088.76 1,822,464,442.07 -1.78% No significant changes
Affected by foreign exchange rate
Financial expenses 396,254,772.56 -640,068,177.19 161.91% fluctuations, foreign exchange losses
increased
R&D expenses 6,378,651,762.42 5,483,811,698.36 16.32% Continue to increase R&D investments
4. R&D Investment
√Applicable □Inapplicable
In 2020, the Company has newly added 1,270 authorized patents (including 568 patents for invention, 198
utility models and 504 product design patents), and newly added 202 software copyrights. As of the end of 2020,
the Company had accumulatively owned 4,941 authorized patents (including 1,307 invention patents, 1,246 utility
models and 2,388 product design patents), and accumulatively owned 1,240 software copyrights.
R&D investment of the Company
2020 2019 Change Percentage
Number of Engineers (ppl) 20,597 19,065 8.04%
Engineers as percentage of Total
48.25% 47.19% 1.06%
headcount
Amount of R&D expenses (RMB) 6,378,651,762.42 5,483,811,698.36 16.32%
R&D investment as a percentage of
10.04% 9.51% 0.53%
operating income
Capitalized R&D expenses (RMB) 0.00 0.00 0.00%
Capitalized R&D expenses as a
0.00% 0.00% 0.00%
percentage of R&D expenses
Reason of significant change of total R&D expenses as a percentage of operating income as compared to last year
□ Applicable √ Inapplicable
Reason and explanation of its reasonableness of significant change of the capitalized R&D expenses
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
5. Cash flow
Unit: RMB
Increase/decrease over
Item 2020 2019
previous year
Subtotal of cash inflows from
72,871,160,858.85 64,478,744,263.94 13.02%
operating activities
Subtotal of cash outflows from
56,783,004,292.18 56,711,024,092.80 0.13%
operating activities
Net cash flows from operating
16,088,156,566.67 7,767,720,171.14 107.12%
activities
Subtotal of cash inflows from
1,904,368,743.55 668,070,675.20 185.05%
investing activities
Subtotal of cash outflows from
4,459,002,700.82 2,591,059,148.00 72.09%
investing activities
Net cash flows from investing
-2,554,633,957.27 -1,922,988,472.80 -32.85%
activities
Subtotal of cash inflows from
7,057,371,569.92 9,615,811,861.82 -26.61%
financing activities
Subtotal of cash outflows from
11,617,474,855.16 15,087,164,151.74 -23.00%
financing activities
Net cash flows from financing
-4,560,103,285.24 -5,471,352,289.92 16.65%
activities
Net increase in cash and cash
8,509,169,869.91 484,656,274.51 1,655.71%
equivalents
Explanation of why the related data varied significantly on a YoY basis
√ Applicable □ Inapplicable
The main reason for the change in net cash flow from operating activities was the increase in sales receipts this year;
the main reason for the change in net cash flow from investment activities was the purchase of foreign exchange
forward financial products and the increase in external equity investment in the current period; the main reason for
the change in net cash flow from financing activities was the decrease in the net outflow of borrowings this year.
Explanation of reasons leading to the material difference between cash flow from operating activities during the
reporting period and net profit for the year
□ Applicable √ Inapplicable
III. Non-Core Business Analysis
□Applicable √Inapplicable
IV. Analysis of assets and liabilities
1. Material changes of asset items
Unit：RMB
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Hikvision 2020 Annual Report
December 31st 2020 January 1st 2020
YoY
Percentage Percentage Change Note of significant change
Amount of total Amount of total (%)
assets assets
Cash and bank balances 35,459,729,108.27 39.98% 27,071,948,919.78 35.92% 4.06% Increase in sales collection
Accounts receivable 21,979,380,716.86 24.78% 21,307,927,200.28 28.28% -3.50% Increase as sales revenue grows
Inventories 11,477,906,040.70 12.94% 10,756,027,592.41 14.27% -1.33% No significant change
Long-term equity Increased investment in
864,026,710.23 0.97% 252,165,321.49 0.33% 0.64%
investment associates and joint ventures
Fixed assets 5,876,007,536.60 6.62% 5,791,218,720.87 7.68% -1.06% No significant change
Increase in construction
investment on Chengdu Science
and Technology Park, Hangzhou
Construction in process 1,425,235,193.72 1.61% 631,555,479.06 0.84% 0.77%
Innovation Industry Park and
Chongqing Science and
Technology Park Phase 2
Increase in demands for
Short-term loans 3,999,246,634.59 4.51% 2,640,082,485.15 3.50% 1.01%
temporary capital turnover
Long-term loans 1,961,167,761.30 2.21% 4,604,168,571.43 6.11% -3.90%
Increase in project borrowings
Non-current liabilities due
3,507,680,339.78 3.95% 86,123,154.06 0.11% 3.84%
within one year
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Difference Provision
on for
Profit or loss
translation decline Sales
from change Purchased
of financial in value during
Item Opening balance in fair value amount during Other changes Closing balance
statements during the
during the the period
dominated the period
period
in foreign current
currency period
Financial assets
1. Derivative
financial 181.76 22,814,664.19 -134,999.18 22,679,846.77
assets
2. Other non-
current
312,398,267.44 69,478,784.83 112,872,015.00 -2,810,000.00 491,939,067.27
financial
assets
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Hikvision 2020 Annual Report
Difference Provision
on for
Profit or loss
translation decline Sales
from change Purchased
of financial in value during
Item Opening balance in fair value amount during Other changes Closing balance
statements during the
during the the period
dominated the period
period
in foreign current
currency period
3. Receivables
for 1,257,385,053.02 702,216,142.23 1,959,601,195.25
financing
Subtotal of
1,569,783,502.22 92,293,449.02 -134,999.18 112,872,015.00 699,406,142.23 2,474,220,109.29
financial assets
Financial
652,428.18 -6,835,239.48 -81,896.51 7,405,771.15
Liabilities
Whether there were any material changes on the measurement attributes of major assets of the Company during the
reporting period:
□ Yes √ No
3. Assets right restrictions as of the end of reporting period
Unit: RMB
Item Closing Book Value (RMB) Reasons for being restricted
Monetary fund 434,891,229.96 Various cash deposits and other restricted funds
Notes receivable 482,454,604.99 Endorsed to suppliers
Notes receivable 7,981,224.88 Pledge for issuance of bank acceptance
Receivables for financing 106,117,987.87 Pledge for issuance of bank acceptance
Fixed assets 45,330,337.75 Fixed assets leased through financial lease
Long-term receivables 1,770,160,748.25 Pledge for long-term debts
Total 2,846,936,133.70
V. Analysis of Investments
1. Overview
√Applicable □ Inapplicable
Investment during 2020 (RMB) Investment during 2019 (RMB) Fluctuation (%)
2,666,845,621.23 2,214,804,834.61 20.41%
2. Significant equity investment during the reporting period
□Applicable √Inapplicable
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Hikvision 2020 Annual Report
3. Significant non-equity investment during the reporting period
√ Applicable □ Inapplicable
Unit: RMB
Reasons
for not
Cumulative amount reaching
Fixed assets Investment during
Invest Project of investment by the Source of Project planned Disclosure Date
Project name investment or the current Disclosure Index (if applicable)
method industry end of reporting funds schedule progress (if applicable)
not reporting period
period and
expected
benefits
Video Announcement on Investment and
Chengdu Science and
Self- product and September 23rd Construction of Chengdu Science
Technology Park YES 278,695,245.67 521,626,793.33 Self-fund 26.49% None
built video 2017 and Technology Park Project in
Project
service Chengdu (No. 2017-033)
Video Announcement on Investment and
Hangzhou Innovation Self- product and Specific September 23rd Construction of Hangzhou
YES 224,283,067.91 337,821,702.49 32.93% None
Industry Park built video Loan 2017 Innovation Industry Park Project
service in Hangzhou (No. 2017-034)
Video Announcement on Investment and
Chongqing Science
Self- product and September 23rd Construction of Chongqing
and Technology Park YES 138,743,811.81 249,810,250.79 Self-fund 32.78% None
built video 2017 Science and Technology Park in
Project-phase 2
service Chongqing (No. 2017-035)
Video
Zhengzhou Science
Self- product and
and Technology Park YES 13,435,069.91 13,529,409.53 Self-fund 2.79% None - -
built video
Project
service
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Hikvision 2020 Annual Report
Reasons
for not
Cumulative amount reaching
Fixed assets Investment during
Invest Project of investment by the Source of Project planned Disclosure Date
Project name investment or the current Disclosure Index (if applicable)
method industry end of reporting funds schedule progress (if applicable)
not reporting period
period and
expected
benefits
Video Announcement on Investment and
Xi’an Science and
Self- product and September 23rd Construction of Xi’an Science and
Technology Park YES 6,507,603.03 12,679,174.93 Self-fund 0.56% None
built video 2017 Technology Park in Xi’an (2017-
Project
service 031)
Video
Self- product and
EZVIZ Industry Park YES 2,332,067.08 2,332,067.08 Self-fund 0.29% None - -
built video
service
Total -- -- -- 663,996,865.41 1,137,799,398.15 -- --
Note: In accordance with the Company's Authorization Management System, Zhengzhou Science and Technology Park project and EZVIZ Industry Park were
approved by the chairman of the board of directors.
4. Financial asset investment
(1) Securities Investments
□ Applicable √ Inapplicable
There no such case in the reporting period.
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(2) Derivatives Investments
√ Applicable □ Inapplicable
Unit: 0,000 RMB
Proportion
of closing
investment Actual
Sold
Initial amount to gain or
Operation amount
Whether Whether Type of investment Opening Purchased amount Impairment Closing the loss
party of Termination during
Related related derivatives amount of Initial date investment during the reporting provisions investment Company’s during
derivatives date the
party transaction investment derivatives amount period (if any) amount net assets the
investment reporting
investment at the end reporting
period
of the period
reporting
period
foreign
Commercial June 18th
No No exchange 98,489.32 December 5th 2019 98,489.32 717,885.03 351,670.38 6.46% 1,291.57
bank 2021
contract
Total 98,489.32 -- -- 98,489.32 717,885.03 351,670.38 6.46% 1,291.57
Capital source of derivatives investment Company’s own fund
Prosecution (if applicable) Nil
Announcement date for approvals of
derivatives investment from the board of April 20th 2019/December 25th 2019
directors (if any)
Announcement date for approvals of
derivatives investment from the general May 16th 2020
meeting (if any)
Risk analysis and control measures (including For details of the risk analysis and control measures, please refer to the Announcement on Conducting Foreign Exchange Hedging Transactions
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Hikvision 2020 Annual Report
but not limited to, market risk, liquidity risk, in 2019 (NO. 2019-021) dated April 20th 2019 and the Announcement on Conducting Foreign Exchange Hedging Transactions in 2020 (NO.
credit risk, operational risk, legal risk, etc.) of 2019-065) dated December 25th 2019 of the Company
holding derivatives during the reporting period
Change of market price or fair value of
invested derivatives during the reporting The Company’s accounting of derivatives’ fair value was mainly about the outstanding contracts signed with banks for forward exchange
period; specific methods, related assumptions settlement during the reporting period. Held-for-trading financial assets/liabilities were determined with difference between the quoted price
and parameter setting of the derivatives’ fair and forward exchange price in outstanding forward exchange contracts at the end of the period.
value analysis should be disclosed
During the current reporting period, whether
there was significant changes of accounting
policies and accounting principles of the Nil
Company’s derivatives comparing to the prior
reporting period
Specific opinions on the Company’s derivatives
investments and risk control from independent Nil
directors
5. Use of raised funds
□ Applicable √ Inapplicable
During the reporting period, there was no use of raised fund
VI. Disposal of significant assets and equity
1. Disposal of significant assets:
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
2. Sale of significant equity:
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
VII. Analysis of major subsidiaries and investees
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Inapplicable
Equity acquisition and disposal method Impact on overall
Company name
during the reporting period production results
Hangzhou Rayin Technology Co., Ltd. Cash contribution Business development
Expand overseas sales
Hikvision Morocco LLC Cash contribution
channels
Kunming Hikvision Digital Technology Co., Ltd. Cash contribution Business development
Hangzhou Microimage Software Co., Ltd. Cash contribution Business development
Hangzhou Microimage Intelligent Technology Co., Ltd. Cash contribution Business development
Jinan Hikvision Digital Technology Co., Ltd. Cash contribution Business development
Expand overseas sales
EZVIZ Europe B.V. Cash contribution
channels
Expand overseas sales
BK Grup UAB Transfer of equity in cash
channels
Expand overseas sales
BK EESTI AKTSIASELTS Transfer of equity in cash
channels
Expand overseas sales
SIA “BK Latvia” Transfer of equity in cash
channels
Hainan Hikvision System Technology Co., Ltd. Liquidation & cancellation Reorganization
Hangzhou Hikvision Investment Management Co., Ltd. Liquidation & cancellation Reorganization
VIII. Structural entities controlled by the Company
□ Applicable √ Inapplicable
IX. Outlook for the Future Development of the Company
1. Industry developing trends
(1) Pursuant to the observation on the following aspects: 1) the development of multi-dimensional perception
technology and market demands brought by the fusion of various detector technology; 2) rapid implementation of
AI technology and market demands brought by the emerging of big-data technology applications; 3) market
demands brought by improved awareness and understanding of users towards smart cities and digitalization
transformation of enterprises; we believe that the industry remains a large development potential.
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Hikvision 2020 Annual Report
(2) As business models of perception, data and application are not limited by specific industry features, the
Company current businesses has covered over 70 industries. With the further division and maturity of industrial
solutions, the Company has opportunities to provide products, solutions and services to more industries.
(3) With the accumulation and development in the past 20 years, the Company is able to lay a solid foundation
on software-hardware fusion, cloud-edge fusion, IoT-information network fusion and big data-AI fusion, which
facilitates the Company meeting users’ needs by ample software and hardware products, solutions and applications,
further drives the development of the Company through technology innovation, and strengthens and enlarges the
competitive advantages.
2. The Company's development strategy
Hikvision is committed to become a provider of Intelligent IoT solutions and big data services with video as
its core competence. The Company adheres to the business philosophy of "professionalism, honesty, and integrity”
and the core corporate values of “dedicated to customers’ continual success, adding value to companies and
communities, acting with honesty and integrity, pursuing excellence in every endeavor”. Through continuous
innovation, it provides global customers with high-quality products and services and creates value for customers.
With the corporate mission “to explore innovative ways to better perceive and understand the world, to
empower vision for decision-makers and practitioners, and work together to enhance safety and advance sustainable
development around the world”, the Company is committed to empower vision for the security and development of
the world.
3. Key Operation Priorities in 2021
(1) Continue to consolidate R&D work on technologies, products and solutions based on technology innovation.
(2) Continue to promote the construction of sales and services network centering on cities domestically and
centering on nations overseas, empower local business teams, and drive the new growth of the Company.
(3) Maintain a solid and practical inventory management strategy, to maintain a diversified supply structure
and ensure the safety of supply chains.
(4) Continue to propel the process reform and management reform, improve the cooperative ability between
the Company’s organizations and business strategies, and enhance operational efficiency.
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Hikvision 2020 Annual Report
(5) Comply with laws and regulations, strengthen internal education and propaganda on compliance, and
continue to advance the construction of global compliance system.
X. Reception of activities including research, communication and interviews during the report period
1. Registration form for reception of research, communication, interviews and other activities during the
reporting period
√ Applicable □ Inapplicable
113
Hikvision 2020 Annual Report
Type of The main content of
Location of Method of
Time of reception reception Reception object the discussion and the Index of basic situation of the research
reception reception
object information provided
Headquarters
Site Research and 14 investors including Citic The Company's
From December 23rd 2019 meeting room Institutional CNINF, Investor Relations Activity Record: From December
telephone Construction Securities-Shi operating conditions
to January 3rd 2020 of the investors 23rd 2019 to January 3rd 2020
communication Zeyu, etc. and future prospects
Company
Headquarters The Company's
Site Research and
From January 6th 2020 to meeting room Institutional 44 investors including Naito operating conditions CNINF, Investor Relations Activity Record: From January
telephone
January 17th 2020 of the investors Securities- Seijiro Naito, etc. and future prospects 6th 2020 to January 17th 2020
communication
Company
Headquarters The Company's
From February 10th 2020 to meeting room Telephone Institutional 421 investors including operating conditions CNINF, Investor Relations Activity Record: From February
February 21st 2020 of the communication investors Efund-Feng Bo, etc. and future prospects 10th 2020 to February 21st 2020
Company
Headquarters The Company's
214 investors including
From February 24th 2020 to meeting room Telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From February
Hongcheng Investment -
March 6th 2020 of the communication investors and future prospects 24th 2020 to March 6th 2020
Zhang Tao, etc
Company
Headquarters The Company's
24 investors including
From March 9th 2020 to meeting room Telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From March 9th
Everbright Asset
March 25th 2020 of the communication investors and future prospects 2020 to March 25th 2020
Management-Xu Deren, etc.
Company
Headquarters The Company's
Performance Institutional
meeting room 1,097 investors including operations in 2019 and
April 25th 2020 result conference investors; CNINF, Investor Relations Activity Record: April 25th 2020
of the CICC-Feng Da, etc. the first quarter of
call individuals
Company 2020
From April 27th 2020 to Headquarters Telephone Institutional 96 investos including APS- The Company's CNINF, Investor Relations Activity Record: From April 27th
May 9th 2020 meeting room communication investors Zhang Qing,etc. operating conditions 2020 to May 9th 2020
114
Hikvision 2020 Annual Report
Type of The main content of
Location of Method of
Time of reception reception Reception object the discussion and the Index of basic situation of the research
reception reception
object information provided
of the and future prospects
Company
Headquarters Site Research and 81 investors including East The Company's
From May 11th 2020 to May meeting room telephone Institutional Securities Asset operating conditions CNINF, Investor Relations Activity Record: From May 11th
22nd 2020 of the communication investors Management-Wang Yanfei, and future prospects 2020 to May 22nd 2020
Company etc.
Headquarters Site Research and The Company's
144 investors including
From May 23rd 2020 to June meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From May 23rd
CITIC Securities HuYe
5th 2020 of the communication investors and future prospects 2020 to June 5th 2020
Qianwen, etc.
Company
Headquarters Site Research and The Company's
61 investors including
From June 8th 2020 to June meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From June 8th
Founder Securities-Luo
24th 2020 of the communication investors and future prospects 2020 to June 24th 2020
Yiyang, etc.
Company
Headquarters
Performance Institutional The Company's
meeting room 559 investors including GF
July 25th 2020 result conference investors; operations in the first CNINF, Investor Relations Activity Record: July 25th 2020
of the Fund-Tian Wenzhou,etc.
call individuals half of 2020
Company
Headquarters Site Research and The Company's
From July 27th 2020 to meeting room telephone Institutional 190 investors including IDG operating conditions CNINF, Investor Relations Activity Record: From July 27th
August 10th 2020 of the communication investors Capital-Yun Nan, etc. and future prospects 2020 to August 10th 2020
Company
Headquarters Site Research and The Company's
From August 11th 2020 to meeting room telephone Institutional 80 investors including China operating conditions CNINF, Investor Relations Activity Record: From August
August 21st 2020 of the communication investors Huitianfu Yuan Jianjun, etc. and future prospects 11th 2020 to August 21st 2020
Company
115
Hikvision 2020 Annual Report
Type of The main content of
Location of Method of
Time of reception reception Reception object the discussion and the Index of basic situation of the research
reception reception
object information provided
Headquarters Site Research and The Company's
15 investors including ABC
From August 24th 2020to meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From August
Life Insurance and Feng
September 4th 2020 of the communication investors and future prospects 24th 2020to September 4th 2020
Anming, etc.
Company
Headquarters Site Research and The Company's
61 investors including
From September 7th 2020 to meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From September
Guotai Jun’an Securities-
September 25th 2020 of the communication investors and future prospects 7th 2020 to September 25th 2020
Junan Feng Dingcheng
Company
Headquarters
Performance Institutional 670 investors including The Company's
meeting room CNINF, Investor Relations Activity Record: October 24th
October 24th 2020 result conference investors; Baoyin Investment-Zhou operations in the third
of the 2020
call individuals Junkai, etc. quarter of 2020
Company
Headquarters Site Research and The Company's
295 investors including
From October 26th 2020 to meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From October
China Industrial Securities-
November 6th 2020 of the communication investors and future prospects 26th 2020 to November 6th 2020
Yao Kang, etc.
Company
Headquarters Site Research and The Company's
25 investors including
From November 9th 2020 to meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From November
Hillhouse Capital-Liang
November 20th 2020 of the communication investors and future prospects 9th 2020 to November 20th 2020
Din, etc.
Company
Headquarters Site Research and The Company's
22 investors including
From November 23rd 2020 meeting room telephone Institutional operating conditions CNINF, Investor Relations Activity Record: From November
Peshan Investment-Jiang
to December 7th 2020 of the communication investors and future prospects 23rd 2020 to December 7th 2020
Jianbo, etc.
Company
From December 8th 2020 to Headquarters Site Research and Institutional 44 investors including The Company's CNINF, Investor Relations Activity Record: From December
December 21st 2020 meeting room telephone investors Cathay Pacific Fund-Zhang operating conditions 8th 2020 to December 21st 2020
116
Hikvision 2020 Annual Report
Type of The main content of
Location of Method of
Time of reception reception Reception object the discussion and the Index of basic situation of the research
reception reception
object information provided
of the communication Yang, etc. and future prospects
Company
Headquarters The Company's
Site Research and 106 investors including
From December 22nd 2020 meeting room Institutional operating conditions CNINF, Investor Relations Activity Record: From December
telephone China Life-Feng Guanlan,
to January 11th 2021 of the investors and future prospects 22nd 2020 to January 11th 2021
communication etc.
Company
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Hikvision 2020 Annual Report
Section V Significant Events
I. Profit distribution of ordinary shares and capitalization of capital reserves
Profit distribution policy of ordinary shares in the reporting period, especially the formulation, implementation
and adjustment of cash dividend policy
□Applicable √Inapplicable
Profit distribution policy (proposal) and capitalizing of capital reserves policy (proposal) in last three years
(including the current reporting period)
(1) Profit distribution for the year 2018：Based on the Company’s total share capital of 9,348,465,931
shares on the date of equity registration when the Company implements the distribution plan, the
Company distributed cash dividend of RMB 6 (tax inclusive) per each 10 shares to all shareholders,
bonus share and share distribution from capital reserve is nil.
(2) Profit distribution for the year 2019：Based on the Company’s total share capital of 9,345,010,696
shares on the date of equity registration when the Company implements the distribution plan, the
Company distributed cash dividend of RMB 7 (tax inclusive) per each 10 shares to all shareholders,
bonus share and share distribution from capital reserve is nil.
(3) Profit distribution proposal for the year 2020：Based on the Company’s current total share capital of
9,343,417,190 shares, the Company proposed to distribute cash dividend of RMB 8 (tax inclusive)
per each 10 shares to all shareholders, bonus share and share distribution from capital reserve is nil.
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Hikvision 2020 Annual Report
Cash dividend of ordinary shares in last 3 years (including the current reporting period)
Unit: RMB
The ratio of total
cash dividends
(including other
methods) to the
Net profit attributable to Ratio of net profit attributable Amount of cash Total cash
Ratio of cash net profit
Cash dividends shareholders of listed to shareholder of Company in dividends in other dividends
Year dividends in other attributable to
(including tax) Company in consolidated consolidated financial methods (Such as (including other
methods common
statements statements (%) share repurchase) methods)
shareholders of
listed companies
in the consolidated
statement
2020 7,474,733,752.00 13,385,526,714.15 55.84% 0.00 0.00% 7,474,733,752.00 55.84%
2019 6,541,507,487.20 12,414,587,690.45 52.69% 0.00 0.00% 6,541,507,487.20 52.69%
2018 5,609,079,558.60 11,352,869,241.32 49.41% 0.00 0.00% 5,609,079,558.60 49.41%
During the reporting period, the company was profitable and the distributable profits to ordinary shareholders of the parent company was positive, but the Company
did not propose a cash dividend distribution plan of ordinary shares.
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
II. Profit distribution and capitalizing of capital Reserves for the current reporting period
Bonus issue per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax
8.00
inclusive)
Additional shares converted from capital reserves
0
for 10 shares (share)
Total capital shares as the basis for the distribution
9,343,417,190
proposal (share)
Total cash dividend (RMB) (tax inclusive) 7,474,733,752.00
Distributable profits (RMB) 31,327,891,058.77
Percentage of cash dividends in the total
23.86%
distributed profit (%)
Cash dividend policy:
The Company is in the development stage and has a substantial plan of cash expenditure. In the current profit distribution, cash
dividends shall account for at least 20%.
Details about the plan for profit distribution and capitalizing capital reserves into share capital
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, in 2020, the parent company of the Company realized
net profit of RMB 12,671,388,440.50, the statutory surplus reserve is nil, adding the undistributed profit of the parent company at the
beginning of the year of RMB 25,196,894,651.27, deducting the cash dividends of RMB 6,541,507,487.20 in 2019, adding back
RMB 1,115,454.20 of the unpaid dividends for the repurchased restricted shares, as of December 31st 2020, the profits distributable
to shareholders of the parent company amounted to RMB 31,327,891,058.77. As of December 31st 2020, the profits distributable to
shareholders in the consolidated statement were RMB 35,806,523,826.37 (consolidated). To sum up, according to the principle of
“whichever is lower”, the profits distributable to shareholders this year was RMB 31,327,891,058.77.
Based on the Company’s current total share capital of 9,343,417,190 shares, the Company proposed to distribute cash dividend of
RMB 8 (tax inclusive) per each 10 shares to all shareholders, bonus share and share distribution from capital reserve is nil. The above
scheme will distribute a total cash dividend of RMB 7,474,733,752.00, and the remaining undistributed profits will be transferred to
the next year.
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Hikvision 2020 Annual Report
III. Performance of commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, related parties, acquirers, and other related
parties for the commitments by the end of the reporting period.
√ Applicable □ Inapplicable
Commitment type Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
1. Commitments in non-competition within the industry: In
the period as controlling shareholders of the Hikvision,
CETHIK and its controlling subsidiaries (excluding
Hikvision and its subsidiaries, the same below) will not be
engaged in such business that is competitive to Hikvision
and its subsidiaries directly or indirectly.
2. Commitments in decrease and regulation of transactions
with related party: Zhejiang Haikang Group Co., Ltd
(hereinafter referred to as Haikang Group or actual
controller) as the controlling shareholders of Hangzhou
Commitments Hikvision Digital Technology Co., Ltd (hereinafter referred
Commitments in regarding horizontal to as "Hikvision" or "Listed Company") are commited as
offering documents competition and below for the transactions with Hikvsion: October 29th Strict
CETHIK Group Co., Ltd. Long-term
or shareholding related party (1) Haikang Group will not make use of the controlling 2013 performance
alterations transactions power to offer more favorable conditions to Hikvision than
those to any independent third party in any fair market
transactions in the cooperation with Hikvision.
(2) Haikang Group will not make use of the controlling
power to obtain the prior right to complete the transaction
with Hikvision.
(3) Haikang Group will not deal with Hikvsion in not fair
terms comparing to the market prices to prejudice the
Company’s interests.
For unavoidable related transactions, the Company will
observe the principles of justice and fairness to deterimine
prices according to the market on the basis of equality,
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Hikvision 2020 Annual Report
Commitment type Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
voluntarily. The Company will obey the Articles of
Association and other regulatory documents related to the
avoiding of issues about related transactions. The related
transactions will go through approval procedures in
accordance with related rules and complete legal procedures,
fulfilling the information disclosure obligations in respect to
the related transactions
3. Commitment to the maintenance of the independence of
the listed Company
3.1 Commitment to Personnel Independence of the listed
Company
(1) Commitment that our general manager, deputy general
manager, chief financial officer, secretary of the board and
other members of senior management shall not assume any
positions other than directors and supervisors or get any
remuneration in CETHIK and/or any of its controlled
entities; (2) Commitment in keeping the management of
labor, human resources and issues related to remuneration of
the listed Company independent from that of CETHIK;
3.2 Commitment to the independence of the asset of the
listed Company
(1) Commitment to independent and complete asset of the
listed Company
(2) Commitment free of unlawful use of cash and asset of the
listed Company by the controlling shareholders
3.3 Commitment to financial independence of the listed
Company
(1) Commitment to an independent finance department with
a team and accounting system;
(2) Commitment to a regulated, independent accounting
system and financial management system of the branches
and subsidiaries
(3) Commitment to maintaining accounts with banks
independently of and not sharing any bank account with our
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Hikvision 2020 Annual Report
Commitment type Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
controlling shareholders
(4) Commitment that the financial staff shall not assume any
positions in CETHIK
(5) Commitment to paying taxes independently according to
the law;
(6) Commitment to implementing financial decisions
independently
3.4 The Company has set up an independent organizational
structure which maintains its independent operations which
is independent from that of CETHIK.
3.5 Commitment to business Independence of the listed
Company
(1) The Company has the asset, personnel, aptitude and
management capability for independent and complete
business operation. The Company has the ability to operate
independently in the market.
(2) Commitment in independence in both business and
operations
4. Regarding plans for the development and relevant
commitment for the listed Company, Haikang Group has
committed as below for the subsequent development of
Hikvsion according to the Securities Acts and relevant laws
and rules,
4.1 Currently the Company has no plan to change or make
significant adjustments for principal business in the next 12
months;
4.2 Currently the Company has no plan to sell, merge or
operate with another Company for the assets and business of
the listed Company or its subsidiaries in the next 12 months.
4.3 Currently the Company has no plan to alter the Board of
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Hikvision 2020 Annual Report
Commitment type Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
the Directors and senior management and no agreement with
other shareholders about the appointment and removal of the
directors or senior management. The team of Board of
Directors and senior management will remain unchanged for
the foreseeable future.
4.4 Currently the Company has no plan to make significant
changes to the Articles of Association for the listed
Company.
4.5 Currently the Company has no plan to make significant
changes to the existing employee recruitment for the listed
Company.
4.6 Currently the Company has no plan to make significant
changes for the dividend distribution plan for the listed
Company.
4.7 Currently the Company has no plan to make significant
changes for business and organizational structure for the
listed Company.
During Hu Yangzhong, Wu Weiqi, JiangHaiqing, Zhou
Zhiping, Xu Lirong, Cai Dingguo, He Hongli, Zheng Yibo,
Hangzhou Weixun Investment Hu Dan,、Jiang Yufeng, Liu Xiang, Wang Ruihong, Chen
Management Limited Partnership Junke’s tenure of the Company’s board of directors,
Commitments in Share restriction May 17th Strict
Initial Public （later renamed as Xinjiang Weixun supervisors and senior management personnel, the annual Long term
commitment 2010 performance
Offering or re- Investment Management Limited transfer of Hikvision’s total shares should not exceed 25% of
financing Partnership） total number of shares held under Weixun; within 6 months
after abovementioned personnel’s dimission, should not
transfer Hikvision’s shares held under Weixun.
Hangzhou Pukang Investment Limited Share restriction During Hu Yangzhong, Wu Weiqi, Gong Hongjia’s tenure of May 17th Long term Strict
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Hikvision 2020 Annual Report
Commitment type Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
Partnership（later renamed as Xinjiang commitment the Company’s board of directors, supervisors and senior 2010 performance
Pukang Investment Limited management personne, the annual transfer of Hikvision’s
Partnership） total shares should not exceed 25% of total number of shares
held under Pukang; whithin 6 months after abovementioned
personnel’s dimission, should not transfer Hikvision’s shares
held under Pukang.
The Company's directors, supervisors During their tenure of the Company’s board of directors,
and executive: HuYangzhong,Wu supervisors and senior management personnel, the annual
Weiqi, Jiang Haiqing, Zhou Zhiping， Share restriction shares transfer should not exceed 25% of total number of May 17th Strict
Long term
Xu Lirong, Cai Dingguo, He Hongli, commitment shares held under Weixun; whthin 6 months after their 2010 performance
Zheng Yibo, Hu Dan, Jiang Yufeng, Liu dimission, they should not transfer their shares held under
Xiang, Wang Ruihong, Chen Junke Weixun.
During their tenure of the Company’s board of directors,
supervisors and senior management personnel, the annual
Directors, executive officers of the
Share restriction shares transfer should not exceed 25% of total number of May 17th Strict
Company: Long term
commitment shares held under Pukang; whthin 6 months after their 2010 performance
Hu Yangzhong, Wu Weiqi
dimission, they should not transfer their shares held under
Pukang.
During Gong Hongjia’s tenure of the Company’s board of
directors, supervisors and senior management personnel,
The Company’s director Gong Share restriction Chen’s annual shares transfer should not exceed 25% of total May 17th Strict
Long-term
Hongjia’s spouse, Chen Chunmei commitment number of shares held under Pukang; whthin 6 months after 2010 performance
the dimission of Gong Hongjia,Chen should not transfer her
shares held under Pukang.
China Electronics Technology Group Commitment to To avoid any loss of the Company and other shareholders September Strict
Long term
Corporation（later renamed as China avoid horizontal arising from any competing business, China Electronics 18th 2008 performance
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Hikvision 2020 Annual Report
Commitment type Date of Term of
Commitments Giver of commitments Details of commitments Performance
commitments commitments
Electronics Technology Group Co., competition Technology Group Corporation, the actual controller of the
Ltd.） Company, issued Letters of non-competition on 18
September, 2008.
Gong Hongjia； Commitment to
Hangzhou Weixun Investment avoid horizontal
competition To avoid any loss of the Company and other shareholders
Management Limited Partnership
arising from any competing business, Gong Hongjia,
（later renamed as Xinjiang Weixun
Hangzhou WeiXun Investment Management Limited
Investment Management Limited
Partnership, ZheJiang Orient Holdings Co., Ltd and
Partnership）； Strict
Hangzhou KangPu Investment Management Limited Long term
Hangzhou Pukang Investment Limited Partnership, the promoters of the Company, issued July 10th 2008 performance
Partnership（later renamed as Xinjiang Commitment Letters of non-competition in the same industry
Pukang Investment Limited on 10 July, 2008.
Partnership）；ZheJiang Orient
Holdings Co., Ltd.
Within six months after 15 trading days from the date of the
Other
disclosure of the Announcement on Pre-Disclosure of
commitments to Six months Completed on
Share reduction Shareholdings by Shareholders on May 23rd 2020, Gong May 23rd
the Company's Gong Hongjia starting from September 4th
commitment Hongjia will reduce his holdings of shares not exceeding 2% 2020
minority June 15th 2020 2020
of the Company's total share capital by means of centralized
shareholders
bidding.
Whether the
commitments is Yes
fulfilled in time
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Hikvision 2020 Annual Report
2. Where any profit forecast was made for any of the Company’s assets or projects and the current reporting
period is still within the forecast period, the Company shall explain whether the performance of the asset or
project reaches the profit forecast and why:
□ Applicable √ Inapplicable
IV. The Company’s funds used by the controlling shareholder or its related parties for non-
operating purposes.
□ Applicable √ Inapplicable
No such case duiring the reporting period.
V. Explanation given by the board of directors, supervisory committee and independent directors
(if applicable) regarding the “non-standard auditor’s report” issued by the CPA firm for the
current reporting period
□ Applicable √ Inapplicable
VI. For changes in accounting policies, accounting estimates and accounting methods as compared
to the financial report for the prior year
√ Applicable □Inapplicable
Starting from January 1st 2020, the Company has adopted the Accounting Standards for Business Enterprises
No. 14 – Revenue (hereinafter referred to as the “New Revenue Standard”, the revenue standard before the
amendment is referred to as the "Original Revenue Standard") modified by the Ministry of Finance in 2017. The
New Revenue Standard has introduced the 5-step method for recognition and measurement of revenue and added
more instructions on specific transactions or events. For details of the accounting policies for recognition and
measurement of revenue of the Company, please refer to Note (III). 26 to the financial statements. The New Revenue
Standard requires the entity to adjust the retained earnings and the amounts of other relative items in the financial
statements at the beginning of initial adoption (i.e. January 1st 2020) of the new standards for the cumulative amount
of impact, and not to adjust information in comparable period. In adopting the New Revenue Standard, the Company
only adjusts the cumulative impact of contracts that have not been completed on the first execution date. For changes
in contract incurred before the beginning of adoption of New Revenue Standard, the Company will make simplified
treatment, namely, the Company will identify the fulfilled and unfulfilled performance obligations, determine
transaction price and allocate the transaction price between the fulfilled and unfulfilled performance obligations
according to the final arrangement of contract changes.
The New Revenue Standard has no significant impact on the revenue recognition of various businesses of the
Company. Details of the impact of the adoption of the New Revenue Standard by the Company on January 1st 2020
are set out in Note (III) 32.2 to the financial statements.
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Hikvision 2020 Annual Report
VII. Explanation for retrospective restatement of major accounting errors during the reporting
period
□ Applicable √ Inapplicable
No such case during the reporting period.
VIII. Explanation for changes in scope of the consolidated financial statements as compared to the
financial report for the prior year
√ Applicable □ Inapplicable
During the reporting period, the Company has newly set up three wholly-owned subsidiaries and four holding
subsidiaries, acquired three subsidiaries, liquidated and cancelled two subsidiaries, which have caused the change
in consolidation scope. For more details, please refer to Financial Report Note (VI) “Changes in consolidation scope”
of the financial statement.
IV. Engagement and disengagement of the CPA firm
CPA firm engaged at present
Name of the domestic CPA firm Deloitte Touche Tohmatsu Certified Public Accountants LLP
Remuneration for the domestic CPA firm (RMB’0000) 365
Consecutive years of the audit service provided by the
5
domestic CPA firm
Name of the certified public accountants from the
Tang Lianjiong, Zhang Shushu
domestic CPA firm
Consecutive years of the audit service provided by the Tang Lianjiong has provided audit service for 2 consecutive year;
certified public accountants from the domestic CPA
firm Zhang Shushu has provided audit service for 4 consecutive years.
Whether the CPA firm was changed in the current period
□ Yes √ No
Whether to reappoint a CPA firm during the audit
□ Yes √ No
Engagement of internal control audit CPA firm, financial advisor or sponsor
□ Applicable √ Inapplicable
X. Listing suspension and termination after disclosure of this annual report
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
XI. Bankruptcy and restructuring
□ Applicable √ Inapplicable
No such case during the reporting period.
XII. Material litigation and arbitration
□ Applicable √ Inapplicable
No such case during the reporting period.
XIII. Punishments and rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Inapplicable
XV. The implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or other incentive
plans
√Applicable □Inapplicable
During the reporting period, the Company completed the second unlocking, repurchasing and cancelling shares
for 2016 Restricted Share Incentive Scheme.
On December 24th 2019, Resolution for the Fulfillment of the Unlocking Conditions of the Second Unlock
Period for the 2016 Restricted Share Incentive Schemes was approved by the 14th meeting of the fourth Board.
Authorized by the second extraordinary general meeting for 2016, a total of 21,836,266 restricted shares of 2,726
grantees were vested and circulated on January 20th 2020. Meanwhile, 1,593,506 restricted shares held by a portion
of grantees not fulfilling the incentive conditions were repurchased and cancelled. On December 16th 2020,
repurchase and cancelation process of the restricted shares was complete.
For details, please refer to in the Indicative Notice of Listing the Unlocked Shares during the Second Unlocking
Period of 2016 Restricted Share Incentive Schemes (No. 2020-002) and the Notice of the Completion of the Second
Repurchase and Cancelation of Restricted Shares that Already Granted for 2016 Restricted Share Incentive Schemes
(No. 2020-062) issued on January 17th 2020 and December 17th 2020 respectively.
By the end of the reporting period, the Company has a total of 143,170,198 granted and restricted shares,
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Hikvision 2020 Annual Report
accounts for 1.53% of the Company’s total share capital.
The Company followed the Accounting Standard for Business Enterprises No. 11 – Share-based Payment and
other accounting standards in relation to accounting treatment for Restricted Share Incentive Schemes. Costs in
relation to the shares granted under 2016 Restricted Share Incentive Schemes and 2018 Restricted Share Incentive
Schemes are amortized over the waiting period for vesting.
During the reporting period, costs amortized in relation to the shares granted under the 2016 Restricted Share
Incentive Schemes and shares granted under 2018 Restricted Share Incentive Schemes of the Company have no
material impact on the financial position and operating results of the Company. For details, please refer to Footnnote
(XI) - Share-based Payments.
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Hikvision 2020 Annual Report
XVI. Significant related-party transaction
1. Related-party transactions arising from routine operation
√Applicable □Inapplicable
Proportion Approved Whether
Pricing Trading
Type of Content of to the trading exceed
principles for Amount Settlement Disclosure Disclosure
Related party Relationship related related amount of quota the
related party （0’000 method date reference
transaction transaction similar (0’000 approved
transactions RMB）
transactions. RMB） quota
Announcement on
increasing the
Under the common projections on
Subsidiaries or
control of the Payment on July 25th 2020 related-party
research institutes of Procurement 82,684 2.32% 90,000 No
Company’s actual delivery 2020 transactions
CETC
controller. arising from
routine operations
(No：2020-045）
Reference
The Company’s Procurement,
market price;
shareholder who holds receiving
Agreed on
more than 5% of the services
price
Shanghai Fullhan Company’s shares, The Payment on April 25th
Procurement 24,390 0.69% 50,000 No
Micro Co., Ltd. Company’s director, delivery 2020
Gong Hongjia is the
director of the related
party
Maxio Technology Wu Weiqi, director of Announcement on
Payment on
(Hangzhou) Co., Ltd. the Company, served as Procurement 2,035 0.06% 13,000 No projections on
delivery
and its subsidiaries director of this company 2020 related-party
131
Hikvision 2020 Annual Report
Proportion Approved Whether
Pricing Trading
Type of Content of to the trading exceed
principles for Amount Settlement Disclosure Disclosure
Related party Relationship related related amount of quota the
related party （0’000 method date reference
transaction transaction similar (0’000 approved
transactions RMB）
transactions. RMB） quota
transactions
arising from
routine operations
(No：2020-017）
Wuhu Sensor
Wu Weiqi, director of
Technology Co., Payment on
the Company, served as Procurement 6,171 0.17% 14,000 No
Ltd.and its delivery
director of this company
subsidiaries
Zhiguang Hailian Big
Data Technology Co., An associated company Payment on
Procurement 14 0.00% 1,000 No - -
Ltd. and its held by the company delivery
subsidiaries
A joint venture company Procurement
held by the company;
Zhejiang Haishi
The Company’s senior Payment on
Huayue Digital 174 0.00% 200 No - -
management is delivery
Technology Co., Ltd.
appointed as this
company’s chairman
Shenzhen Hikvision Procurement
City Service A joint ventures held by Payment on
36 0.00% 100 No - -
Operation Co., Ltd. the company delivery
and its subsidiaries
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Hikvision 2020 Annual Report
Proportion Approved Whether
Pricing Trading
Type of Content of to the trading exceed
principles for Amount Settlement Disclosure Disclosure
Related party Relationship related related amount of quota the
related party （0’000 method date reference
transaction transaction similar (0’000 approved
transactions RMB）
transactions. RMB） quota
Announcement on
projections on
Under the common
Subsidiaries or 2020 related-party
control of the Payment on April 25th
research institutes of Sales 35,056 0.55% 75,000 No transactions
Company’s actual delivery 2020
CETC arising from
controller.
routine operations
(No：2020-017）
Daishan Hailai Yunzhi A joint ventures held by Payment on
Sales 2,985 0.05% 4,000 No
Technology Co., Ltd. the company delivery
Wuhu Sensor Providing
Wu Weiqi, director of
Technology Co., services, Reference Payment on
the Company, served as Sales 191 0.00% 2,000 No
Ltd.and its selling market price; delivery
director of this company
subsidiaries products, Agreed on
A joint venture company commercial price
held by the company; goods
Zhejiang Haishi
The Company’s senior Payment on
Huayue Digital Sales 369 0.01% 1,000 No
management is delivery
Technology Co., Ltd.
appointed as this
company’s chairman
Sanmenxia Xiaoyun
An associated company Payment on
Vision Technology Sales 375 0.01% 1,500 No
held by the company delivery
Co., Ltd.
Shenzhen Wanyu Senior executives of the Payment on
Sales 20 0.00% 500 No
Security Service Company serve as delivery
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Hikvision 2020 Annual Report
Proportion Approved Whether
Pricing Trading
Type of Content of to the trading exceed
principles for Amount Settlement Disclosure Disclosure
Related party Relationship related related amount of quota the
related party （0’000 method date reference
transaction transaction similar (0’000 approved
transactions RMB）
transactions. RMB） quota
Technology Co., Ltd. directors of this
and its subsidiaries company
Maxio Technology Wu Weiqi, director of
Payment on
(Hangzhou) Co., Ltd. the Company, served as Sales 15 0.00% 500 No
delivery
and its subsidiaries director of this company
The former Company
executive Jia Yonghua
served as a director of
this company. Jia
Hangzhou Yonghua resigned in
Payment on
Confirmware October 2019. Within 12 Sales 59 0.00% 500 No
delivery
Technology Co., Ltd. months after his
departure, Hangzhou
Confirmware was still
identified as the
Company's related party.
Qinghai Qingtang Big An associated company Payment on
Sales 149 0.00% 1,000 No
Data Co., Ltd. held by the company delivery
Zhiguang Hailian Big An associated company Announcement on
Data Technology Co., held by the company Payment on July 25th increasing the
Sales 1,437 0.02% 8,000 No
Ltd. and its delivery 2020 projections on
subsidiaries 2020 related-party
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Hikvision 2020 Annual Report
Proportion Approved Whether
Pricing Trading
Type of Content of to the trading exceed
principles for Amount Settlement Disclosure Disclosure
Related party Relationship related related amount of quota the
related party （0’000 method date reference
transaction transaction similar (0’000 approved
transactions RMB）
transactions. RMB） quota
transactions
Jiaxin Haishi JiaAn
An associated company Payment on arising from
Zhicheng Technology Sales 3,820 0.06% 8,000 No
held by the company delivery routine operations
Co., Ltd.
(No：2020-045）
Xuzhou Kangbo
Urban Operation A joint ventures held by Payment on
Sales 315 0.00% 1,000 No - -
Management Service the company delivery
Co., Ltd.
Guangxi Haishi A joint ventures held by
Urban Operation the company Payment on
Sales 177 0.00% 200 No - -
Management Co., Ltd. delivery
and its subsidiaries
Zhejiang City Digital A joint ventures held by Payment on
Sales 1,376 0.02% 1,500 No - -
Technology Co., Ltd. the company delivery
Shenzhen Hikvision A joint ventures held by
City Service the company Payment on
Sales 5 0.00% 10 No - -
Operation Co., Ltd. delivery
and its subsidiaries
Yunnan Yinghai A joint ventures held by
Payment on
Parking Service Co., the company Sales 1,826 0.03% 2,000 No - -
delivery
Ltd.
Total 163,679 275,010 - - - -
Details on significant sales return None
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Hikvision 2020 Annual Report
Proportion Approved Whether
Pricing Trading
Type of Content of to the trading exceed
principles for Amount Settlement Disclosure Disclosure
Related party Relationship related related amount of quota the
related party （0’000 method date reference
transaction transaction similar (0’000 approved
transactions RMB）
transactions. RMB） quota
The amount of related-party purchases incurred with Zhiguang Hailian Big Data Technology Co., Ltd. and its subsidiaries, Zhejiang
Haishi Huayue Digital Technology Co., Ltd., Shenzhen Hikvision City Service Operation Co., Ltd. and its subsidiaries; and the
Total amount of related transactions projected based on
amount of related-party sales incurred with Xuzhou Kangbo Urban Operation Management Service Co., Ltd., Guangxi Haishi City
different categories, actual performance during the current
Operation Management Co., Ltd. and its subsidiaries, Zhejiang City Digital Technology Co., Ltd., Shenzhen Hikvision City Service
reporting period (if any)
Operation Co., Ltd. and its subsidiaries, Yunnan Yinghai Parking Service Co., Ltd. have been approved by the chairman of the
board in accordance with the Company's Related-Party Transaction Management System.
Reasons on significant difference between trading price and
Not applicable
market referencing price (if applicable)
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Hikvision 2020 Annual Report
2. Related-party transactions regarding purchase and disposal of assets or equity
□Applicable √Inapplicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Inapplicable
No such case in the reporting period.
4. Related credit and debt transactions
□ Applicable √Inapplicable
No related-parties’ creditor’s rights or debts during the reporting period.
5. Other significant related party transactions
√Applicable □Inapplicable
On October 18th 2019, the 12th meeting of the 4th Board of Directors passed the Proposal on Investment and
Establishment of Industrial Investment Fund Partnership and the Related Transactions and authorized the Company
to co-invest in and establish the Hangzhou Haikang Intelligent Industrial Investment Fund Partnership (L.P.)
(“Hikvision Intelligent Fund”). On December 9th 2019, the 13th meeting of the 4th Board of Directors passed the
Proposal on Adjusting Some of the Fund Providers of Hangzhou Haikang Intelligent Industrial Investment Fund
Partnership (L.P.). The Company was authorized to adjust some of the fund providers in the Hikvision Intelligent
Fund. During the reporting period, Hikvision Intelligent Fund has completed the registration of private equity funds
and raised a total of RMB 1.00 billion.
On April 23rd 2020, the Resolution on the Commencement of Financial Leasing Business and Related-Party
Transactions with China Electronics Technology Leasing Co. Ltd. was considered and approved by the Company at
17th meeting of the fourth session of the Board, agreeing that the Company enters into a financial leasing contract
with China Electronics Technology Leasing Co. Ltd. to commence financial leasing related-party transactions. The
aforesaid related-party transactions mainly included the design of financing solutions, financial leasing and other
consulting services relating to procurement, taxation, finance and asset management in connection with financial
leasing, with the total amount of financing not exceeding RMB 500 million (excluding tax). On May 15th 2020, the
Company entered into a financial leasing contract with China Electronics Technology Leasing Co. Ltd., effective
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Hikvision 2020 Annual Report
for 1 year from the effective date.
On April 23rd 2020, the Resolution on Increasing the Capital of China Electronic Technology Finance Co., Ltd.
and Related-Party Transactions was considered and approved by the Company at the seventeenth meeting of the
fourth session of the Board, agreeing that the Company increases the capital of China Electronic Technology Finance
Co., Ltd. with RMB 112.87 million in cash, including RMB 68.94 million as registered capital and RMB 43.93
million as capital reserve. After the capital increase, Hikvision still holds 3.83% equity interest in China Electronic
Technology Finance Co., Ltd. Meanwhile, the Company's management is authorized to deal with matters related to
this capital increase.
Disclosure website for provisional reports on significant related-party transactions:
Title of provisional repo/rts Disclosure date Disclosure website
Announcement on the Investment and Establishment of Industrial
Investment Fund Partnerships and Related-party Transactions " No. October 19th 2019 www.cninfo.com.cn
2019-052)
Announcement on Adjusting Some Capital Contributors of Hangzhou
Haikang Smart Industrial Investment Fund Partnership (Limited December 10th 2019 www.cninfo.com.cn
Partnership and Related-party Transactions (No. 2019-060)
Announcement on Completion of Registration of Industrial Investment
Fund that the Company Participated in the Establishment (No. 2020- February 12th 2020 www.cninfo.com.cn
003)
Announcement on Carrying out Financial Leasing Business and Related-
April 25th 2020 www.cninfo.com.cn
party Transactions with CLP Leasing Co., Ltd. (No. 2020-022)
Announcement on Capital Increase of China Electronic Technology
April 25th 2020 www.cninfo.com.cn
Finance Co., Ltd. and Related Party Transactions (No. 2020-023)
Announcement on the Completion of Fundraising of the Industrial
Investment Fund that the Company Participated in the Establishment November 4th 2020 www.cninfo.com.cn
(No. 2020-058)
XVII. Significant contracts and their execution
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
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Hikvision 2020 Annual Report
(2) Contracting
□ Applicable √ Inapplicable
No such case in the reporting period.
(3) Leasing
√ Applicable □Inapplicable
On December 3rd 2018, the Proposal on Carrying out Financial Leasing Related Party Transactions between
the Holding Innovative Business Subsidiary and China Electronics Technology Leasing Co. Ltd. was approved at
the 7th meeting of the 4th Board of Directors of the Company. In 2019, the Company's holding subsidiary Hangzhou
HikMicro Sensing Technology Ltd. and China Electronics Technology Leasing Co. Ltd. signed the Financial
Leasing Contract, where HIKMICRO used some of its own equipment to start leaseback business with China
Electronics Technology Leasing Co. Ltd.; the financing amount was RMB 70 million, term of lease 48 months and
annual lease rate 3.80%. See the details in Financial Statement Note (V) 33- Long-term payables.
Projects that brought the company's profits and losses to more than 10% of the company's total profit during the
reporting period
□Applicable√ Inapplicable
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Hikvision 2020 Annual Report
2. Significant guarantees
√Applicable □ Inapplicable
(1) Details of guarantees
Unit: RMB’0000
Guarantees provided by the Company for subsidiaries
Disclosure date of Guarantee for
Guarantee Actual occurrence Actual guaranteed Type of
Guaranteed party announcement of the Term of guarantee Due or not a related party
Cap date amount guarantee
guarantee cap or not
Hangzhou Hikvision Technology 2019.01.18-
April 25th 2020 1,437,500 January 18th 2019 280,660.64 Joint guarantee No Yes
Co., Ltd. 2021.01.18
Hangzhou Hikvision Electronics 2020.05.01-
April 25th 2020 287,500 May 1st 2020 19,181.55 Joint guarantee No Yes
Co., Ltd. 2021.04.30
2017.12.20-
Hikvision International Co., Ltd. April 25th 2020 462,500 December 20th 2017 6,728.99 Joint guarantee No Yes
2020.12.20
Chongqing Hikvision Technology 2019.07.05-
April 25th 2020 155,000 July 5th 2019 41,443.40 Joint guarantee No Yes
Co., Ltd. 2020.08.08
Hangzhou Hikvision System 2020.05.01-
April 25th 2020 190,000 May 1st 2020 8,808.59 Joint guarantee No Yes
Technology Co., Ltd. 2021.04.30
Urumqi HaiShi Xin’An Electronic 2019.03.29-
April 25th 2020 40,000 March 29th 2019 28,063.86 Joint guarantee No Yes
Technology Co., Ltd. 2028.06.20
Mo Yu HaiShi Electronic 2019.03.26-
April 25th 2020 25,000 March 26th 2019 18,280.00 Joint guarantee No Yes
Technology Co., Ltd. 2035.03.26
Pi Shan HaiShi Yong An Electronic April 25th 2020 30,000 March 26th 2019 22,378.00 Joint guarantee 2019.03.26- No Yes
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Hikvision 2020 Annual Report
Guarantees provided by the Company for subsidiaries
Disclosure date of Guarantee for
Guarantee Actual occurrence Actual guaranteed Type of
Guaranteed party announcement of the Term of guarantee Due or not a related party
Cap date amount guarantee
guarantee cap or not
Technology Co., Ltd. 2040.06.26
Luo Pu HaiShi Ding Xin Electronic 2019.03.26-
April 25th 2020 30,000 March 26th 2019 22,800.00 Joint guarantee No Yes
Technology Co., Ltd. 2035.06.26
Yu Tian HaiShi Mei Tian 2019.03.26-
April 25th 2020 30,000 March 26th 2019 9,560.00 Joint guarantee No Yes
Electronic Technology Co., Ltd. 2034.03.26
2020.09.15-
Hikvision Singapore Pte. Ltd April 25th 2020 100,000 September 15th 2020 6,433.00 Joint guarantee No Yes
2023.12.31
Chongqing Hikvision System
April 25th 2020 60,000 Not happened during the reporting period
Technology Co., Ltd.
Chengdu Hikvision Digital
April 25th 2020 50,000 Not happened during the reporting period
Technology Co., Ltd.
Hangzhou Haikang Zhicheng
Investment and Development Co., April 25th 2020 20,000 Not happened during the reporting period
Ltd.
Wuhan Hikvision Technology Co.,
April 25th 2020 50,000 Not happened during the reporting period
Ltd.
Wuhan Hikvision Science and
April 25th 2020 50,000 Not happened during the reporting period
Technology Co., Ltd.
Xi’an Hikvision Digital
April 25th 2020 30,000 Not happened during the reporting period
Technology Co., Ltd.
Pyronix Limited April 25th 2020 11,000 Not happened during the reporting period
Zhenping Haikang Juxin Digital April 25th 2020 23,000 Not happened during the reporting period
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Hikvision 2020 Annual Report
Guarantees provided by the Company for subsidiaries
Disclosure date of Guarantee for
Guarantee Actual occurrence Actual guaranteed Type of
Guaranteed party announcement of the Term of guarantee Due or not a related party
Cap date amount guarantee
guarantee cap or not
Technology Co., Ltd.
Hikvision Limited Liability
April 25th 2020 50,000 Not happened during the reporting period
Company
Hikvision USA Inc. April 25th 2020 2,000 Not happened during the reporting period
Prama Hikvision India Private
April 25th 2020 50,000 Not happened during the reporting period
Limited
Hikvision South Africa (Pty) Ltd April 25th 2020 20,000 Not happened during the reporting period
HIKVISION DO BRASIL
COMRCIO DE
April 25th 2020 20,000 Not happened during the reporting period
EQUIPAMENTOS DE
SEGURANA LTDA
Hikvision (Malaysia) SDN BHD. April 25th 2020 2,000 Not happened during the reporting period
Hikvision Australia Pty Ltd. April 25th 2020 2,000 Not happened during the reporting period
Hikvision FZE April 25th 2020 2,000 Not happened during the reporting period
Hikvision Europe B.V. April 25th 2020 50,000 Not happened during the reporting period
Total guarantee cap for subsidiaries approved during the Total actual guarantee amount for
3,279,500.00 837,552.87
reporting period(B1) subsidiaries during the reporting period(B2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of
3,279,500.00 subsidiaries at the end of the reporting 464,338.03
the reporting period(B3)
period(B4)
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Hikvision 2020 Annual Report
Guarantees provided by the Company for subsidiaries
Disclosure date of Guarantee for
Guarantee Actual occurrence Actual guaranteed Type of
Guaranteed party announcement of the Term of guarantee Due or not a related party
Cap date amount guarantee
guarantee cap or not
Total guarantee amount provided by the Company (total of the above-mentioned 3 kinds of guarantees) [During the reporting period, the Company did not have any external guarantees or
guarantees from subsidiaries to subsidiaries, so there is only item B, no items A and C]
Total guarantee cap approved during the reporting period Total actual guarantee amount during the
3,279,500.00 837,552.87
（A1+B1+C1） reporting period（A2+B2+C2）
Total approved guarantee cap at the end of reporting Total actual guarantee balance at the end of
3,279,500.00 464,338.03
period（A3+B3+C3） the reporting period（A4+B4+C4）
Portion of the total actual guarantee (A4+B4+C4) amount in net assets of the Company 8.63%
Of which:
The balance of guarantee for shareholders, actual controllers and their affiliates. (D) 0
Amount of debt guarantees provided directly or indirectly for entities with a liability-to-
420,354.89
asset ratio over 70% (E)
Total amount of guarantee exceeding 50% of net assets (F) 0
Total guarantee amount of the above-mentioned 3 kinds of guarantees (D+E+F) 420,354.89
Illustration of compound method guarantee
As required by the project owner, China Electronics Technology Group Co., Ltd. (CETC) has provided a joint guarantee to responsibility and duties of projects
of “Safe Chongqing, Emergency Control System Digital Construction Project”, including 41 districts/counties construction projects, signed by Chongqing Hikvision
System Technology Co., Ltd. Meanwhile, the Company provides a counter guarantee to CETC’s joint responsibilities above.
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Hikvision 2020 Annual Report
(2) Illegal provision of guarantees for external parties
□ Applicable √ Inapplicable
No such case in the reporting period.
3. Entrust others to conduct cash asset management
(1) Entrusted financial management situation
□ Applicable √ Inapplicable
No entrusted finance during the reporting period
(2) Entrusted loan situation
□ Applicable √ Inapplicable
No entrusted loan during the reporting period
4. Significant contracts for daily operations
□ Applicable √ Inapplicable
Significant contract progress differs materially from the contract agreement and affects the contract amount by more
than 30%.
□ Applicable √ Inapplicable
5. Other significant contracts
□ Applicable √ Inapplicable
No such case in the reporting period.
XVIII. Social responsibility
1. Fulfillment of social responsibilities
For details, please refer to the Company’s 2020 Annual Social Responsibility Report disclosed on CNINFO
(www.cninfo.com.cn)
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Hikvision 2020 Annual Report
2. Fulfillment of the social responsibility of targeted poverty alleviation
The Company did not conduct any targeted poverty alleviation during the current reporting period and had no
future arrangement for targeted poverty alleviation.
3. Environmental protection
Whether the Company or any of its subsidiarids should be categorized as a critical pollutant enterprises
published by national environmental protection department
No.
XIX. Other significant events
√ Applicable □ Inapplicable
On March 13th 2020, Mr. Gong Hongjia and Mr. Hu Yangzhong, Directors of the Company, received the Case
Closure Notice from the China Securities Regulatory Commission and the Decision Letter regarding Administrative
Regulatory Measures from the Zhejiang Securities Regulatory Bureau of the China Securities Regulatory
Commission ([2020] No. 16). The Zhejiang Securities Regulatory Bureau took the supervisory and administrative
measures against the above two Directors by issuing warning letters, and recorded them in the integrity files of
securities and futures markets. For details, please refer to the Announcement on the Directors' Receipt of the " ase
Closure Notice from the China Securities Regulatory Commission and Decision Letter regarding Administrative
Regulatory Measures from the Zhejiang Securities Regulatory Bureau of the China Securities Regulatory
Commission (Announcement No.: 2020-009) published by the Company on March 14th 2020. The above two
Directors have submitted written rectification reports to the Zhejiang Securities Regulatory Bureau on March 19th
2020.
On April 23rd 2020, the 17th meeting of the 4th session of the Board of the Company considered and approved
the Proposal on Authorizing the Company’s Management to Initiate the Preliminary Preparatory Work for the
Domestic Listing of Spin-off Subsidiaries, and agreed to authorize the Company’s management to initiate the
preliminary preparatory work for the spin-off of Hangzhou EZVIZ Network Co., Ltd. to the Shenzhen Stock
Exchange for listing, including but not limited to the demonstration of feasibility plan, the preparation of the listing
plan, the signing of relevant agreements involved in the planning process and other listing-related matters, and upon
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Hikvision 2020 Annual Report
the formulation of the spin-off plan, the submission of relevant listing plan and other listing-related matters to the
Board and the general meeting of shareholders of the Company respectively for consideration and approval. For
details, please refer to the Prompt Announcement on the Authorization of the Management of the Company to Initiate
the Preliminary Preparatory Work for the Domestic Listing of Spin-off Subsidiaries (Announcement No.: 2020-028)
published by the Company on April 25th 2020.
On December 22nd 2016, the 2016 Second Extraordinary General Meeting of the Company approved the
Proposal on the Issuance of Short-Term Commercial Paper (SCP) and approved the Company's application to the
China Association of Interbank Market Dealers for the registration and issuance of SCP of no more than RMB 7
billion. During the Reporting Period, the Company issued the 2020 First Tranche of Short-term Commercial Paper
(SCP) of Hangzhou Hikvision Digital Technology Co., Ltd. with a total amount of RMB 1 billion and an interest
rate of 1.75%, which was due and completed on December 1st 2020. For details, please refer to the Announcement
on the Issuance Results of the 2020 First Tranche of Short-term Commercial Paper (SCP) (Announcement No.:
2020-037) issued by the Company on June 6th 2020, Announcement on the Completion of the Payment of the 2020
First Tranche of Short-term Commercial Paper (SCP) (Announcement No. 2020-060) issued on December 2nd 2020,
and the Note (V) 31- Other Current Liabilities in the financial statements herein.
XX. Significant events of the Company’s subsidiaries
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
Section VI Changes in Shares and Information about Shareholders
I. Changes in Share Capital
1. Table of changes in share capital
Unit: Share
Before the change Changes in the period (+, -) After the change
Share
Bonus
Shares Ratio transferred Others Sub-total Shares Ratio
New Shares Issued share
from capital reserve
1. Shares subject to conditional restriction(s) 1,276,701,961 13.66% -28,676,701 -28,676,701 1,248,025,260 13.36%
1)State holdings
2)Shares held by State-owned corporate
3) Other domestic shares 335,144,656 3.59% -28,656,361 -28,656,361 306,488,295 3.28%
Including: held by domestic corporates
held by domestic natural person 335,144,656 3.59% -28,656,361 -28,656,361 306,488,295 3.28%
4) Foreign shares 941,557,305 10.07% -20,340 -20,340 941,536,965 10.08%
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Hikvision 2020 Annual Report
Including:held by overseas corporates
held by overseas natural person 941,557,305 10.07% -20,340 -20,340 941,536,965 10.08%
2. Shares without restriction 8,068,308,735 86.34% 27,083,195 27,083,195 8,095,391,930 86.64%
1) RMB ordinary shares 8,068,308,735 86.34% 27,083,195 27,083,195 8,095,391,930 86.64%
2) Domestically listed foreign shares
3) Foreign shares listed overseas
4) Others
3. Total 9,345,010,696 100.00% -1,593,506 -1,593,506 9,343,417,190 100.00%
Reason for the changes in share capital
√Applicable □Inapplicable
The second time repurchasing and cancelling shares for 2016 Restricted Share Incentive Scheme:
On December 24th 2019, Resolution for the Second Repurchase and Cancelation of the Restricted Shares that Already Granted for 2016 Restricted Share Incentive
Schemes was approved by the 14th meeting of the fourth Board. Authorized by the second extraordinary general meeting for 2016, the board agreed to repurchase and
cancel a total of 1,593,506 restricted shares held by a portion of grantees not fulfilling the stock incentive conditions. On May 15th 2020, Resolution for the Second
Repurchase and Cancelation of the Restricted Shares that Already Granted for 2016 Restricted Share Incentive Schemes was reviewed and approved by the 2019
annual general meeting. On December 16th 2020, repurchase and cancelation process of the restricted shares was complete. The Company’s total share capital decreased
by 1,593,506 shares from 9,345,010,696 shares to 9,343,417,190 shares.
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Hikvision 2020 Annual Report
Approval for changes in share capital
√Applicable □Inapplicable
On December 24th 2019, Resolution for the Second Repurchase and Cancelation of the Restricted Shares that Already Granted for 2016 Restricted Share
Incentive Schemes was approved by the 14th meeting of the fourth Board. Authorized by the second extraordinary general meeting for 2016, the board agreed to
repurchase and cancel a total of 1,593,506 restricted shares held by a portion of grantees not fulfilling the stock incentive conditions. On May 15th 2020, Resolution
for the Second Repurchase and Cancelation of the Restricted Shares that Already Granted for 2016 Restricted Share Incentive Schemes was reviewed and approved
by the 2019 annual general meeting.
Transfer for changes in share capital
√Applicable □Inapplicable
On December 16th 2020, repurchase and cancelation process of the restricted shares for 2016 Restricted Share Incentive Scheme was complete. The Company’s
total share capital decreased by 1,593,506 shares from 9,345,010,696 shares to 9,343,417,190 shares.
Information about the implementation of share repurchase
□Applicable √Inapplicable
The implementation progress of reducing and repurchasing shares by centralized bidding
□Applicable √Inapplicable
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per share attributable to common shareholders of the Company,
and other financial indexes over the last year and last period
□Applicable √Inapplicable
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Hikvision 2020 Annual Report
Other contents that the Company considers necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
2. Changes in restricted shares
√ Applicable □ Inapplicable
Unit: Share
Opening restricted Increased in Vested in current Closing Date of
Name of shareholder Note for restricted shares
shares current period period restricted shares unlocking
According to the
relevant
provisions of
Gong Hongjia 941,292,525 0 0 941,292,525 Restricted shares for senior executives
shares
management for
senior executives
According to the
relevant
Restricted shares for senior executives + partial of the provisions of
Hu Yangzhong 136,543,558 48,150 0 136,591,708 unlocked restricted shares turning into restricted shares for shares
senior executives management for
senior executives
Grantees of restricted share January 20th
166,599,970 0 21,836,266 143,170,198 Equity Incentive Restricted Shares
incentive plan (consolidated) 2020
Restricted shares for senior executives + partial of the
Jiang Haiqing 11,317,082 36,900 2,847,721 8,506,261 unlocked restricted shares turning into restricted shares for April 24th 2020
senior executives
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Hikvision 2020 Annual Report
Opening restricted Increased in Vested in current Closing Date of
Name of shareholder Note for restricted shares
shares current period period restricted shares unlocking
Restricted shares for senior executives + partial of the According to the
unlocked restricted shares turning into restricted shares for relevant
senior executives provisions of
Wu Weiqi 8,439,442 44,550 0 8,483,992 shares
management for
senior executives
Restricted shares for senior executives + partial of the
Jia Yonghua 5,635,544 32,850 1,425,311 4,243,083 unlocked restricted shares turning into restricted shares for April 24th 2020
senior executives
Restricted shares for senior executives + partial of the
Li Pan 5,634,368 47,850 1,425,017 4,257,201 unlocked restricted shares turning into restricted shares for April 24th 2020
senior executives
Restricted shares for senior executives + partial of the
Huang Fanghong 219,375 0 0 191,875 unlocked restricted shares turning into restricted shares for
senior executives
Restricted shares for senior executives + partial of the According to the
Fu Baijun 272,100 32,700 0 304,800 unlocked restricted shares turning into restricted shares for relevant
senior executives provisions of
Restricted shares for senior executives + partial of the shares
Jiang Yufeng 170,325 36,900 0 207,225 unlocked restricted shares turning into restricted shares for management for
senior executives senior executives
Restricted shares for senior executives + partial of the
Xu Lirong 161,550 32,850 0 194,400 unlocked restricted shares turning into restricted shares for
senior executives
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Hikvision 2020 Annual Report
Opening restricted Increased in Vested in current Closing Date of
Name of shareholder Note for restricted shares
shares current period period restricted shares unlocking
Restricted shares for senior executives + partial of the
He Hongli 165,825 41,400 0 207,225 unlocked restricted shares turning into restricted shares for
senior executives
Wang Qiuchao 26,250 0 0 26,250 Restricted shares for senior executives
Qu Liyang 11,812 0 0 11,812 Restricted shares for senior executives
Restricted shares for senior executives + partial of the
Pu Shiliang 130,785 19,820 0 150,605 unlocked restricted shares turning into restricted shares for
senior executives
Restricted shares for senior executives + partial of the
Jin Duo 16,425 32,850 0 49,275 unlocked restricted shares turning into restricted shares for
senior executives
Restricted shares for senior executives + partial of the
Cai Changyang 16,425 32,850 0 49,275 unlocked restricted shares turning into restricted shares for
senior executives
Restricted shares for senior executives + partial of the
Bi Huijuan 22,500 14,250 0 36,750 unlocked restricted shares turning into restricted shares for
senior executives
Restricted shares for senior executives + partial of the
Jin Yan 26,100 24,700 0 50,800 unlocked restricted shares turning into restricted shares for
senior executives
Total 1,276,701,961 478,620 27,534,315 1,248,025,260 -- --
Note:
1. Executives who are grantees under incentive restricted shares scheme, his/her holding incentive restricted shares are counted within the total incentive restricted
shares (consolidated statistics) on the second row.
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2. The difference of 1,593,506 shares between ending balance of restricted shares of total incentive restricted shares (consolidated) for grantees and the calculated
balance (opening balance + increased restricted shares - unlocked shares) was due to repurchasing and cancelling of 1,593,506 shares on December 16th 2020.
3. The three executives Jiang Haiqing, Jia Yonghua and Li Pan have left office on October 25th 2019. The original term of office expires on March 20th 2021, and the
shares held by them are kept restricted in in accordance with the relevant regulations.
4. The difference of 27,500 shares between Ms. Huang Fanghong's closing balance of restricted shares and the calculated balance (opening balance + increased restricted
shares - unlocked shares) was due to the 110,000 restricted shares received on January 18th 2019 and the corresponding increase in the transferable quota of 27,500
shares during the current reporting period.
II. Issuance and listing of securities
1. Securities (exclude preferred share) issued during the reporting period
□Applicable √Inapplicable
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets and liabilities
√ Applicable □ Inapplicable
During the reporting period, the Company completed the second repurchasing and cancelling shares for 2016 Restricted Share Incentive Scheme, the total capital
shares were decreased by 1,593,506 shares from 9,345,010,696 shares to 9,343,417,190 shares. The structure of shareholder structure, assets and liabilities of the
Company did not change significantly after completing the above mentioned items.
3. Existent shares held by internal staff of the Company
□ Applicable √ Inapplicable
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III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: Share
Total number of common shareholders at the end of the reporting Total number of preferred shareholders (if any) whose voting rights have
199,030 234,089
period been recovered at the end of the reporting period
Particulars about shares held by common shareholders with a shareholding percentage over 5% or the Top 10 of them
The number Pledged or frozen
Total common The number of
Share- Increase/ of common
shares held at the shares held
Name of shareholder Nature of shareholder holding decrease during the shares held Share
end of the reporting without trading Amount
percentage (%) reporting period with trading
period restrictions Status
restrictions
China Electronics Technology State-owned
38.88% 3,632,897,256 0 0 3,632,897,256 Pledged 50,000,000
HIK Group Co., Ltd. corporation
Gong Hongjia Overseas individual 10.88% 1,016,614,814 -238,441,886 941,292,525 75,322,289 Pledged 375,950,000
Domestic
Xinjiang Weixun Investment
non-state-
Management Limited 4.82% 450,795,176 0 0 450,795,176 Pledged 90,948,998
owned
Partnership
corporation
Hong Kong Securities Clearing
Overseas corporation 3.60% 336,429,990 -252,164,200 0 336,429,990 - -
Company Ltd.(HKSCC)
Shanghai Gaoyi Asset
Management Partnership
(Limited Partnership) - Gaoyi Other 2.68% 250,000,000 250,000,000 0 250,000,000 - -
Adjacent Mountain 1
Yuanwang Fund
Domestic
Xinjiang Pukang Investment
non-state-owned 1.95% 182,510,174 0 0 182,510,174 - -
Limited Partnership
corporation
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Hu Yangzhong Domestic Individual 1.95% 182,186,477 0 136,639,858 45,546,619 Pledged 8,150,000
The 52nd Research Institute at
State-owned
China Electronics Technology 1.93% 180,775,044 0 0 180,775,044 - -
corporation
Group Corporation
Domestic
CITIC Securities Company non-state-
1.14% 106,692,148 10,094,085 0 106,692,148 - -
Limited owned
corporation
Bank of China Co., Ltd. -
Efunds Blue Chip Select
Other 0.75% 70,000,025 70,000,025 0 70,000,025 - -
Hybrid Securities Investment
Fund
China Electronics Technology HIK Group Co., Ltd. and The 52nd Research Institute at China Electronics Technology Group Co., Ltd.
are all subject to control of China Electronics Technology Group Co. Ltd.. Ms. Chen Chunmei, limited partner of Xinjiang Pukang
Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual shareholder of the Company. Hu Yangzhong,
Explanation on associated relationship or concerted domestic individual, is holding shares in both Xinjiang Weixun Investment Management Limited Partnership and Xinjiang Pukang
actions among the above-mentioned shareholders: Investment Limited Partnership.
Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert
parties in accordance with the Measures for Management of the Disclosure of the Shareholding Changes of Shareholders of the Listed
Company.
Particulars about shares held by the Top 10 shareholders holding shares that are not subject to trading restriction(s)
Type of shares
Name of shareholder Number of shares without trading restrictions held at the period-end
Type Number
China Electronics Technology HIK Group Co., Ltd. 3,632,897,256 RMB ordinary shares 3,632,897,256
Xinjiang Weixun Investment Management Limited
450,795,176 RMB ordinary shares 450,795,176
Partnership
Hong Kong Securities Clearing Company
336,429,990 RMB ordinary shares 336,429,990
Ltd.(HKSCC)
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Shanghai Gaoyi Asset Management Partnership
(Limited Partnership) - Gaoyi Adjacent Mountain 1 250,000,000 RMB ordinary shares 250,000,000
Yuanwang Fund
Xinjiang Pukang Investment Limited Partnership 182,510,174 RMB ordinary shares 182,510,174
The 52nd Research Institute at China Electronics
180,775,044 RMB ordinary shares 180,775,044
Technology Group Co. Ltd.
CITIC Securities Company Limited 106,692,148 RMB ordinary shares 106,692,148
Gong Hongjia 75,322,289 RMB ordinary shares 75,322,289
Bank of China Co., Ltd. - Efunds Blue Chip Select
70,000,025 RMB ordinary shares 70,000,025
Hybrid Securities Investment Fund
Central Huijin Investment Co., Ltd. 65,818,800 RMB ordinary shares 65,818,800
China Electronics Technology HIK Group Co., Ltd. and The 52nd Research Institute at China Electronics Technology Group Co., Ltd.
Explanation on associated relationship and concerted are all subject to control of China Electronics Technology Group Co. Ltd. Ms. Chen Chunmei, limited partner of Xinjiang Pukang
actions among top ten shareholders holding Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual shareholder of the Company. Hu Yangzhong,
outstanding shares without trading restrictions, and domestic individual, is holding shares in both Xinjiang Weixun Investment Management Limited Partnership and Xinjiang Pukang
among top ten shareholders and top ten shareholders Investment Limited Partnership.
holding outstanding shares without trading Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert
restrictions parties in accordance with the Measures for Management of the Disclosure of the Shareholding Changes of Shareholders of the Listed
Company.
Any of the Company’s top 10 common shareholders or top 10 non-restricted common shareholders conducted any agreed buy-back in the reporting period?
□ Applicable √ Inapplicable
No such case during the current reporting period.
2. Particulars about controlling shareholder of the Company
Nature of the controlling shareholder: Central State-owned
Type of the actual controller: Corporation
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Name of
Legal Representative Date of
controlling Organization code Business scope
/People in charge establishment
shareholder
Industrial investment; R&D of environmental
China
protection products, network products, intelligent
Electronics
November products and electronic products; technology
Technology Chen Zongnian 9133000014306073XD
29th, 2002 transfer, technical services, manufacturing and sales;
HIK Group
business consulting services, rental services of self-
Co., Ltd.
owned real estate; import and export businesses.
Shares held by the controlling shareholder
Indirect control of domestic listed company Phoenix
in other listed companies
Optical Co. Ltd.,
through controlling or holding during the reporting period
Change of the controlling shareholder during the reporting period
□ Applicable √ Inapplicable
The Company's controlling shareholder has not changed during the reporting period.
3. Particulars about the Company’s actual controller & concerted parties
Nature of the actual controller: Central state-owned assets management agency
Type of the actual controller: Corporation
Legal
Name of the
Representative Date of Organization
actual Business scope
/People in establishment code
controller
charge
The Company is responsible for the development and
manufacturing of military electronic equipment and
systems integration, electronic equipment for weapon
platform, military software and electronic basic products;
and the construction of national defense electronic
information infrastructure and safeguard conditions;
construction of national major electronic information
system; the research, development, production and sales
of civil electronic information software, materials,
China
Electronics Chen February 25th components, equipment and system integration and
91110000710929498G
Technology Zhaoxiong 2002 related common technology; self-operated and agent
Group Ltd.
import and export business of various commodities and
technologies (except for goods and technologies that are
restricted or restricted by the state-limited company);
operating feed processing and "three comes one
supplement" business; operating counter trade and
entrepot trade; Industrial investment; asset management;
engaged in e-commerce information services;
organization of enterprises in the industry to go abroad,
participate in exhibitions.
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Hikvision 2020 Annual Report
Legal
Name of the
Representative Date of Organization
actual Business scope
/People in establishment code
controller
charge
Shares held by the actual China Electronics Technology Group Ltd is the actual controller of nine domestic listed companies
controlling shareholder in including An’hui Sun Create Electronic Co., Ltd, Shanghai East China Computer Co., Ltd, Chengdu
other listed companies through Westone Information Industry Co., Ltd., GCI Science & Technology Co., Ltd., Tai’ji Computer
controlling or holding during the Corporation Limited, GLARUN Technology Co., Ltd. , Phoenix Optics Co., Ltd., Chengdu Tianao
reporting period Electronic Co., Ltd. and CETC Energy Co., Ltd., and etc.
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
No such change during the reporting period.
The ownership and controlling relationship between the actual controller of the Company and the Company is
detailed as follows:
4. Particulars about other corporate shareholders with shareholding proportion over 10%
□ Applicable √ Inapplicable
5. Particulars on shareholding decrease restrictions for the controlling shareholders, actual controller,
restructurer or other committing parties
□ Applicable √ Inapplicable
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Section VII Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
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Section VIII Information about Convertible Corporate Bonds
□ Applicable √ Inapplicable
There is no convertible corporate bond existed for the Company during the current reporting period.
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Section IX Information about Directors, Supervisors, Senior Management and Employees
I. Shareholding changes of directors, supervisors, senior management personnel
Shares Shares
Shares held at the increased decreased
Commencement of Termination of term Shares held at the end of
Name Title Tenure status Gender Age beginning of the during the during the
term of office of office the Period (Shares)
Period (Shares) Period Period
(shares) (Shares)
Chen Zongnian Chairman Incumbent Male 56 June 19th 2008 March 4th 2024 0 0 0 0
Male
Gong Hongjia Vice Chairman Incumbent 56 June 19th 2008 March 5th 2021 1,255,056,700 0 238,441,886 1,016,614,814
Male
Qu Liyang Director Incumbent 57 March 7th 2018 March 4th 2024 15,750 0 0 15,750
Director, Male
Hu Yangzhong General Incumbent 56 December 28th 2001 March 4th 2024 182,186,477 0 0 182,186,477
Manager (CEO)
Director, Male
Wu Weiqi Standing Deputy Incumbent 57 March 1st 2003 March 4th 2024 11,371,389 0 0 11,371,389
General Manager
Cheng Independent Male
Incumbent 69 March 6th 2015 March 5th 2021 0 0 0 0
Tianzong Director
Independent Male
Lu Jianzhong Incumbent 67 March 6th 2015 March 5th 2021 0 0 0 0
Director
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Shares Shares
Shares held at the increased decreased
Commencement of Termination of term Shares held at the end of
Name Title Tenure status Gender Age beginning of the during the during the
term of office of office the Period (Shares)
Period (Shares) Period Period
(shares) (Shares)
Independent Male
Wang Zhidong Incumbent 54 March 6th 2015 March 5th 2021 0 0 0 0
Director
Independent Male
Hong Tianfeng Incumbent 55 December 22nd 2016 March 5th 2021 0 0 0 0
Director
Supervisor
Cheng Huifang Incumbent Female 68 March 6th 2015 March 5th 2021 0 0 0 0
Chairman
Male
Wang Qiuchao Supervisor Incumbent 70 March 6th 2015 March 5th 2021 35,000 0 0 35,000
Supervisor; Male
Xu Lirong person in charge Incumbent 58 March 21st 2018 March 11th 2024 303,000 0 0 303,000
of internal audit
Senior Deputy
He Hongli Incumbent Female 48 December 18th 2005 March 11th 2024 331,500 0 0 331,500
General Manager
Senior Deputy
Fu Baijun Incumbent Male 49 January 20th 2009 March 12th 2021 495,000 0 0 495,000
General Manager
Senior Deputy Male
Cai Changyang Incumbent 50 April 8th 2016 March 11th 2024 109,500 0 0 109,500
General Manager
Senior Deputy Male
Xu Ximing Incumbent 48 October 11th 2016 March 11th 2024 197,000 0 0 197,000
General Manager
Senior Deputy
Bi Huijuan Incumbent Female 50 October 11th 2016 March 11th 2024 273,000 0 0 273,000
General Manager
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Shares Shares
Shares held at the increased decreased
Commencement of Termination of term Shares held at the end of
Name Title Tenure status Gender Age beginning of the during the during the
term of office of office the Period (Shares)
Period (Shares) Period Period
(shares) (Shares)
Senior Deputy Male
Jiang Yufeng Incumbent 50 December 18th 2005 March 12th 2021 325,500 0 0 325,500
General Manager
Senior Deputy Male
Pu Shiliang Incumbent 44 March 21st 2018 March 11th 2024 393,900 0 98,000 295,900
General Manager
Senior Deputy Male
Jin Duo Incumbent 56 March 10th 2015 March 11th 2024 109,500 0 0 109,500
General Manager
Senior Deputy
General
Jin Yan Manager, Incumbent Female 42 July 22nd 2015 March 11th 2024 284,000 0 0 284,000
Person in charge
of finance
Senior Deputy
Huang General
Incumbent Female 39 April 8th 2016 March 11th 2024 402,500 0 0 402,500
Fanghong Manager,
Board Secretary
Senior Deputy
Chen Junke Incumbent Male 50 March 21st 2018 March 11th 2024 0 0 0 0
General Manager
Total -- -- 1,451,889,716 0 238,539,886 1,213,349,830
Note:
(1) Number shares held at the beginning of the period, shares increased during the period, shares decreased during the period for directors, supervisors, and senior
management personnel above are all shares directly held by them accordingly, including restricted shares.
(2) On March 5th 2021, Gong Hongjia resigned as a director of the Company at termination of term of office, Cheng Tianzong and Wang Zhidong resigned as
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Hikvision 2020 Annual Report
independent directors of the Company at termination of term of office, Cheng huifang resigned as the board supervisor of the Company at termination of term of
office. Wang Qiuchao was elected as a director of the Company's fifth board of directors, Hong Tianfeng and Lu Jianzhong were elected as supervisors of the
Company's fifth supervisory board.
(3) On March 12th 2021, Gong Hongjia, Fu Baijun and Jiang Yufeng resigned from the Company’s senior management positions. Xu Lirong resigned from the
Company’s person in charge of internal audit.
II. Changes of directors, supervisors and senior management personnel
□Applicable √Inapplicable
III. Positions and Incumbency
1. Directors
Mr Chen Zongnian (陈宗年): Born in 1965, Chen holds a PhD of business administration and has served as deputy general manager Shenzhen Gao Ke Run Electronics,
director and general manager of Zhejiang Haikang Information Technology Co., Ltd. and Zhejiang Haikang Group Co., Ltd. He also served as an assistant of the head,
deputy head, and the head of 52nd Research Institute at China Electronics Technology Group Corporation (52nd Research Institute). Chen currently serves as the
chairman of China Electronics Technology HIK Group Co., Ltd. (CETHIK), the chairman of Phoenix Optics Co., Ltd. and the chairman of the Company.
Mr. Gong Hongjia (龚虹嘉): Born in 1965, Hong Kong permanent resident. Gong holds a bachelor degree of engineering, technology entrepreneur, and angel investor.
He has established and invested over 10 enterprises including TECSUN Co. Ltd., AsiaInfo Dekang, Funian Technology, and Woqi Data, and etc. He took part in the
establishment of the Company in November 2001 and served as a director (left after the expiry of his tenure on March 5th 2021) and vice chairman (left after the
expiry of his tenure on March 12th 2021) of the Company. Gong currently serves as a vice chairman of the Company.
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Hikvision 2020 Annual Report
Mr. Qu Liyang (屈力扬): Born in 1964, bachelor degree of engineering, researcher-level senior engineer. He served as the director, deputy director, party secretary
and deputy director of the 52nd Research Institute, and chairman of the board of supervisors of CETHIK. He is currently a member of the Strategy Committee of China
Electronic Technology Group Co., Ltd., director of the Science and Technology Innovation Committee of CETHIK, and a director of the Company.
Mr. Hu Yangzhong (胡扬忠): Born in 1965, master degree of engineering, senior research engineer. He served as an engineer of the 52nd Research Institute from June
1989 to December 2001. He has been appointed as a director of the Company and general manager of the company since December 2001. Hu currently serves as a
director and the general manager of the Company.
Mr. Wu Weiqi (邬伟琪): Born in 1964, bachelor degree of engineering, senior engineer. Wu held various positions at the 52nd Research Institute, including technician,
engineer associate, engineer and senior engineer, from July 1986 to December 2001. Since November 2001, He has been appointed as a deputy general manager, a
standing deputy general manager, and a director of Hikvision. Wu currently serves as a director and standing deputy general manager of the Company.
Mr. Cheng Tianzong (程天纵): Born in 1952, Taiwanese, master degree in business administration. Cheng served as president and a director of Hewlett-Packard
Development Company, L.P. (China) from 1992 to 1997; served as the president of the Asia Pacific of Texas Instruments Incorporated (德州仪器) from 1997 to 2007;
served as a vice-president of Hon Hai Corporation (鸿海集团) from July 2007 to 2012, and the chief executive officer of FIH Mobile Limited, a subsidiary of Hon Hai
Corporation (鸿海集团), a company listed on the Hong Kong Stock Exchange in 2011. He retired in June 2012 and devoted himself to China Maker Campaign (中国
创客运动) to help and guide those start-up companies in September 2013. Cheng served as an independent director of the Company (left after the expiry of his tenure
on March 5th 2021)
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Mr. Lu Jianzhong (陆建忠): Born in 1954, holds bachelor degree in economics and CPA certificate. Lu served as a lecturer and an associate professor of finance and
accounting department at Shanghai Maritime University (上海海事大学) from September 1986 to September 1997; he was a CPA and a partner of the auditing
department of PricewaterhouseCoopers, from October 1997 to June 2012; he was a chartered accountant of Shanghai De’an Certified Public Accountants LLP (上海
德安会计师事务所) from July 2012 to July 2013; he was a chartered accountant of the Shanghai branch of PKF Daxin Certified Public Accountants LLP (大信会计
师事务所上海分所), from August 2013 to July 2014；He was a partner and a chartered accountant and a partner of Zhongxinghua Certificated Public Accountants
LLP (中兴华会计师事务所) from August 2014 to January 2016. Lu has served as an independent director of Hikvision. Lu currently serves as a chartered accountant
of Dahua Certificated Public Accountants LLP (大华会计师事务所), MPAcc/Maud Enterprise Mentor of Antai College of Economics & Management,Shanghai Jiao
Tong University (上海交通大学安泰管理学院), and a supervisor of the Company. (On March 5th 2021, Mr. Lu was elected as a supervisor of the Company at the
Company's 2021 first interim general meeting of shareholders).
Mr. Wang Zhidong (王志东): Born in 1967, Hong Kong permanent resident, bachelor degree of science. He served as a deputy general manager and chief engineer
of Beijing Haidian District Suntendy Electronic Technology Research Institute (北京新天地电子信息技术研究所) from April 1992 to August 1993; He served as a
general manager of Beijing Richwin Information Technology Co., Ltd. (四通利方信息技术有限公司), and served as chief executive officer and a director of SINA
Corporation (新浪网) from December 1993 to June 2001; He served as chairman and chief executive officer of Beijing Dianji Technology, Ltd. (北京点击科技有限
公司) from December 2001 to July 2013. Mr. Wang has served as an independent director of the Company (left after the expiry of his tenure on March 5th 2021). He
currently serves as chairman and chief executive officer of Beijing Yilianyisheng Techonology Co. Ltd.(北京易连忆生科技有限公司).
Mr. Hong Tianfeng (洪天峰): Born in 1966, master degree in engineering. Hong was an engineer in Nanjing University of Posts and Telecommunication (南京邮电
大学) from July 1990 to June 1993; He served as an executive deputy general manager, chief executive of Operation and Delivery, chairman of investment decision
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Hikvision 2020 Annual Report
committee, and vice chairman of Huawei Technologies Co., Ltd. (华为技术有限公司) from July 1993 to September 2011. Hong has served as an independent director
of the Company. Hong currently serves as a managing partner of Suzhou Fangguang Venture Investment Management (Limited Partnership)(苏州方广创业投资管理
合伙企业（有限合伙）), an executive director of Shanghai Fangguang Venture Investment Management Co., Ltd. (上海方广创业投资管理有限公司), and supervisor
of the Company. (On March 5th 2021, Mr. Hong was elected as a supervisor of the Company at the Company's 2021 first interim general meeting of shareholders).
Mr. Wu Xiaobo (吴晓波): born in 1960, a PhD of business administration, Professor, Ph.D. Tutor. In February 1982, he joined the Energy Saving Office of the
Ministry of Forestry, Zhejiang Energy Conservation Technology Service Center, and joined the School of Management of Zhejiang University in July 1992,
successively served as an executive vice dean and dean. He is currently the Director of the Department of Social Sciences of Zhejiang University, the Director of the
National Philosophy and Social Science Innovation Base - Research on Innovation Management and Sustainable Competitiveness of Zhejiang University, the Chinese
Director of the Joint Research Center for Global Manufacturing and Innovation Management of Zhejiang University-Cambridge University, the Co-Director of the
Ruihua Institute of Innovation Management, and an independent director of the Company (elected at the Company’s first extraordinary general meeting for 2021 held
on March 5th 2021).
Mr. Hu Ruimin (胡瑞敏): born in 1964, a PhD in engineering, Second-level Professor, doctoral tutor, Luojia distinguished scholar, recipient of Special
Government Grants from the State Council, Senior Member of IEEE (Institute of Electrical and Electronics Engineers), fellow of China Institute of Communications,
distinguished member of China Computer Federation. He has successively served as Vice Chairman of the Academic Committee of Wuhan University, Director of the
National Multimedia Software Engineering Technology Research Center, Director of Hubei Provincial Key Laboratory of Multimedia Network Communication
Engineering, First Executive Dean of National Cyber Security College and Dean of School of Computer Science of Wuhan University. From January 2010 to January
2016, he served as the first dean of Hikvision Research Institute. He is currently a professor of Wuhan University and an independent director of the Company (elected
at the Company’s first extraordinary general meeting for 2021 held on March 5th 2021).
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Hikvision 2020 Annual Report
Mr. Li Shuhua (李树华)： born in 1971, a PhD in accounting, non-practicing member of the China Institute of Certified Public Accountants, National-level
candidates for the New Century Hundreds and Thousands of Talents Project, National Leading Talents in Accounting, and National Leading Talents in Shenzhen. He
has successively served as Deputy Director of the Audit Division of the Accounting Department of the China Securities Regulatory Commission (presiding), Deputy
Director of the General Office (presiding), Director of the Financial and Budget Management Department and Director of the General Office, a member of the Executive
Committee and Chief Financial Officer, Chief Risk Officer and Chief Compliance Officer of China Galaxy Securities Co., Ltd. He concurrently served as a PE professor
and master’s tutor at the National Accounting Institute (Xiamen), Peking University, Shanghai Institute of Advanced Finance, Shanghai Jiaotong University, and
Tsinghua University. He is currently the Managing Partner of Shenzhen Oriental Fortune Capital Investment Management Co., Ltd. (OFC), Chairman of Changzhou
NRB Corporation (常州光洋軸承股份有限公司), and an independent director of the Company (elected at the Company’s first extraordinary general meeting for 2021
held on March 5th 2021).
Mr. Guan Qingyou (管清友): born in 1977, a holder of Ph.D. in economics, Young Economist. He has successively served as the former vice president of
Minsheng Securities and the president of the research institute; He is currently the President and Chief Economist of the Institute of Finance, Vice President of the
China Private Economic Research Association, Professor of the School of Economics of Hainan University, Chief Economist of Zhongguancun Private Equity &
Venture Capital Association (ZVCA) and Guangdong Province Venture Capital Association, and an independent director of the Company (elected at the Company’s
first extraordinary general meeting for 2021 held on March 5th 2021).
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2. Supervisors
Ms. Cheng Huifang (程惠芳): Born in 1953, PhD in international finance. She was a member of the 8th and 9th Zhejiang CPPCC (浙江省政协). Cheng has served as
a supervisor of the Company (left after the expiry of her tenure on March 5th 2021). Cheng currenly serve as dean of the Global Development Research Institute of
Zhejiang Businesses under Zhejiang University of Technology (浙江工业大学全球浙商发展研究院), professor (level II), president of Zhejiang Yangtze River Delta
of the Institute of Innovation Management (浙江长三角创新管理研究院), president of the Zhejiang Financial Engineering Society (浙江省金融工程学会).
Mr. Wang Qiuchao (王秋潮): Born in 1951, master degree in law. Wang served as director of Zhejiang Tiance Law Firm (浙江天册律师事务所), chairman of the
Zhejiang Lawyers Association (浙江省律师协会) , vice-president of the Zhejiang Law Society (浙江省法学会), and a supervisor of the Company.. Wang currently
serves as honorary partner of Zhejiang Tiance Law Firm, arbitrator of the China International Economic and Trade Arbitration Commission (中国国际经济贸易仲裁
委员会, “CIETAC”) , an arbitrator of Shanghai International Arbitration Center (上海国际仲裁中心) and Shenzhen International Economic and Trade Arbitration
Commission (深圳国际仲裁中心), and a director of the Company (On March 5th 2021, Mr. Wang was elected as a director of the Company at the Company's 2021
first interim general meeting of shareholders).
Mr. Xu Lirong (徐礼荣): Born in 1963, master degree of engineering, senior engineer. In January 2002, he joined Hikvision and served as manager of development
division under the R&D center, secretary of the board of directors, the person in charge of internal audit, and a deputy general manager of the Company. He is currently
the employee representative supervisor.
3. Senior management personnel
Mr. Hu Yangzhong (胡扬忠): Please refer to his profile in preceding part of the report.
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Mr Wu Weiqi (邬伟琪): Please refer to his profile in preceding part of the report.
Ms. He Hongli (何虹丽): Born in 1973, master degree in business administration. She joined Hikvision in December 2001 and served as an assistant to the general
manager and a deputy general manager. Ms. He currently serves as a senior deputy general manager of the Company.
Mr. Fu Baijun (傅柏军): Born in 1972, bachelor degree in economics, Chinese Certificated Public Accountant, professor-level senior accountant. He served as an
accountant of the accounting division of the 52nd Research Institute and a deputy general manager of Zhejiang Haikang Information Co. Ltd. (浙江海康信息技术股
份有限公司) from July 1996 to December 2008. He joined Hikvision in January 2009, and served as a deputy general manager and the person in charge of finance and
accounting department, a deputy general maanger, and a senior deputy general manager of the Company (left after the expiry of his tenure on March 12th 2021).
Mr. Cai Changyang (蔡昶阳): born in 1971, bachelor degree in engineering. He joined Hikvision in 2004, and held various positions of the Company, including
general manager of Beijing branch, director for government and enterprise corporation department, director of investment department, director of strategy and marketing
department, and a deputy general manager of the Company. Mr. Cai currently serves as senior deputy general manager of the Company.
Mr. Xu Ximing (徐习明): born in 1973, bachelor degree in engineering. From July 1996 to September 2016, he held various positions in IBM, including engineer,
department manager, director，partner of consulting service, senior partner of consulting service, and a vice president. He joined Hikvision in September 2016, and
served as a deputy general manager of the Company. Mr. Xu currently serves as a senior deputy general manager of the Company.
Ms. Bi Huijuan (毕会娟): born in 1971, PhD in engineering, senior research engineer. From April 1999 to August 2016, she held various positions in the 15th Research
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Institute at China Electronics Technology Group Corporation (CETC), including engineer, senior engineer, senior research engineer, head of R&D department, vice
chief engineer, and deputy director. She joined Hikvision in August 2016, and served as a deputy general manager of the Company. Ms. Bi currently serves as a senior
deputy general manager of the Company.
Mr. Jiang Yufeng (蒋玉峰): born in 1971, bachelor degree of engineering, an engineer. He joined Hikvision in January 2005 and held various positions in the
Company, including general manager of Beijing branch, marketing director, assistant to general manager, deputy general manager and marketing director, a deputy
general manager, and a senior deputy general manager of the Company (left after the expiry of his tenure on March 12th 2021).
Mr. Pu Shiliang (浦世亮): born in 1977, doctor of engineering, a senior engineer. He joined Hikvision in April 2006 and held various positions in the Company,
including R&D engineer, R&D manager, R&D director, dean of the R&D institute, and chief expert. He currently serves as a senior deputy general manager of the
Company.
Mr. Jin Duo (金铎): born in 1965, bachelor degree in engineering, a senior engineer. He served as a technician, assistant to engineers, an engineer and a senior engineer
of the 52nd Research Institute from July 1986 to June 2004. He joined Hikvision in July 2004 and served as general manager of Hangzhou Branch, and a deputy general
manager of the Company. Mr. Jin currently serves as a senior deputy general manager of the Company.
Ms. Jin Yan (金艳): born in 1979, master degree in management, an accountant. She joined Hikvision in 2004 and held various positions at the Company, including
financial manager, the general manager of the Financial Management Center, and a deputy general manager and the person in charge of finance and accounting. Ms.
Jin currently serves as a senior deputy general manager and the person in charge of finance and accounting of the Company.
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Ms. Huang Fanghong (黄方红): born in 1982, bachelor degree in law. She joined Hikvision in June 2009 and held various positions at the Company including legal
department manager, internal audit manager, internal control director, and a deputy general manager and the board secretary. Ms. Huang currently serves as a senior
deputy general manager, and board secretary of the Company.
Mr. Chen Junke (陈军科): Born in 1971, bachelor degree in engineering, senior engineer. Chen held various positions in the 52nd Research Institute from 1994 to
2001, including assistant engineer, engineer and senior engineer. He joined the Company in 2001 and served as the technology director of the Digital Video Recorder
(DVR) Division of the Technology Management Center, general manager of supply chain management center, employee representative supervisor. Chen currently
serves as senior deputy general manager of the Company.
Mr. Xu Peng (徐鹏): born in 1976, bachelor of engineering, senior engineer. From 1998 to 2004, he successively served as an assistant engineer and engineer of No.
52 institute, and in 2004, he joined Hikvision, where he served as camera research and development manager, research and development director, product director,
general manager of front-end product business, and deputy general manager of the Company. He is currently the senior deputy general manager of the Company
(appointed at the first meeting of the 5th Board of Directors on March 12th 2021).
Mr. Guo Xudong (郭旭东): born in 1972, bachelor of engineering. In July 2002, he joined Hikvision, and successively served as general manager of Shenzhen Branch,
marketing director of domestic marketing center and deputy general manager of domestic marketing center. He is currently the senior deputy general manager of the
Company (appointed at the first meeting of the 5th Board of Directors on March 12th 2021).
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Position held in shareholders’ entities
√Applicable □ Inapplicable
Position in shareholders’ Commencement Termination of the Compensation and
Name Shareholder's entity term allowance from the
entities of the term
shareholders' entity
Chen China Electronics Chairman, Secretary of
November 2013 Y
Zongnian Technology HIK Group Ltd. party committee
Hu China Electronics
Director December 2013 N
Yangzhong Technology HIK Group Ltd.
Supervisor, Member of
China Electronics
Xu Lirong Commission for Discipline December 2013 N
Technology HIK Group Ltd.
Inspection
Positions held in other entities
√Applicable □ Inapplicable
Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Zhejiang Intelligent IoT Legal
Cheng Zongnian February 2004 N
Technology Magazine Representative
Cheng Zongnian CETC Finance Ltd. Director December 2012 January 2021 N
Cheng Zongnian Phoenix Optics Co., Ltd. Chaiman Demcember 2019 N
Gong Hongjia Furong Technology Ltd. Director October 1999 N
Gong Hongjia Hangzhou FunVio Ltd. Chairman February 2004 N
Chairman of the
Gong Hongjia Funian Technology Ltd. October 2007 N
Board
Beijing Funian Legal N
Gong Hongjia November 2011
Technology Ltd. Representative
Shanghai Fullhan N
Gong Hongjia Director April 2013
Microelectronics Co., Ltd.
Gong Hongjia Shenzhen Innovation
Valley Investment Director July 2014 N
Management Ltd.
Gong Hongjia Shanghai Pukun
Information Technology Director September 2014 N
Ltd.
Gong Hongjia FuCe Holdings Ltd. Director October 2014 N
Chuangjia Venture Capital N
Gong Hongjia Director October 2014
Investment Ltd
Shenzhen Jiadao Valley
Legal Y
Gong Hongjia Investment Management October 2014
Representative
Ltd.
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Hikvision 2020 Annual Report
Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Shenzhen Jiadao N
Gongcheng Equity
Gong Hongjia Executive Partner November 2014
Investment Fund (Limited
Partnership)
Gong Hongjia JiuBaYi Health Director N
November 2014
Technology Ltd.
Gong Hongjia Beijing JiaBoWen
Director March 2015 N
Biotechnology Ltd.
Gong Hongjia Wuhan YouXin Director N
January 2016
Technology Co., Ltd.
Gong Hongjia QingKe Management Director N
February 2017
Consulting Group Ltd.
Gong Hongjia Shenzhen JiadaoFangzhi Executive Partner N
Education Industry
June 2017
Investment Enterprise
(Limited Partnership)
Gong Hongjia Shenzhen Jiadao Executive Partner N
Successful Investment
August 2017
Enterprise (Limited
Partnership)
Gong Hongjia Shanghai AoYuan N
Chairman September 2017
Medical Supplies Ltd.
Gong Hongjia Sichuan JiaDao BoWen N
Ecological Technology Chairman December 2017
Ltd.
Gong Hongjia Beijing JiaDaoGu N
Management Consulting Supervisor April 2018
Ltd.
Gong Hongjia Sichuan Five-Plus-One N
Ecological Agriculture Chairman November 2018
Technology Service Ltd.
Gong Hongjia Sichuan JiaBoWen N
Biological Technology Chairman November 2018
Ltd.
Gong Hongjia Shenzhen Zhongke N
Science and Technology
Director December 2019
Achievements
Transformation Equity
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Hikvision 2020 Annual Report
Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Investment Fund
Management Ltd.
Gong Hongjia ZhongYuan Concord Cell Legal N
Genetic Engineering Co., Representative December 2018
Ltd. Chairman
Gong Hongjia Shenzhen Guotai Data
Chairman April 2019 N
Technology Ltd.
Gong Hongjia Tianjin Deyuan N
Investment Development Director July 2019
Ltd.
Gong Hongjia Yong Tai Hong Kan N
Vice Chairman October 2019
Holding Group Ltd.
Xinjiang Pukang N
Wu Weiqi Investment Management Executive Partner May 2011
Limited Partnership
Wu Weiqi Wuhu Sensor Tech Director N
Intelligent Technology January 2017
Ltd.
Wu Weiqi Maxio Technology Director N
May 2017
(Hangzhou) Ltd.
Beijing YiLianSheng
Wang Zhidong Science and Technology Chaiman and CEO October 2013 Y
Ltd.
Cheng Tianzong Hechun Technology Co., Y
Director June 2014
Ltd.
Cheng Tianzong Zuozhen Co., Ltd. Director January 2015 Y
Cheng Tianzong Wenhui Technology Co., Independent
June 2016 Y
Ltd. Director
Lu Jianzhong Dahua Certificated Public Chartered N
January 2016
Accountants LLP Accountant
Lu Jianzhong ChangShu FengFan Independent Y
Electric Power Equipment Director September 2015
Co., Ltd.
Lu Jianzhong Ningbo Lehui Independent Y
International Construction Director March 2016
Equipment Co., Ltd.
Lu Jianzhong COSCO Maritime Independent Y
January 2018
Transport Development Director
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Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Co., Ltd.
Lu Jianzhong Shanghai Xinnanyang Independent January 2019 Y
Angli Education Director
Technology Co., Ltd.
Shanghai Fangguang Y
Hong Tianfeng Investment Management Executive Director February 2012
Ltd.
Hong Tianfeng Shanghai Fangguang N
Venture Investment
Management Partnership Managing Partner February 2012
Enterprise (Limited
Partnership)
Hong Tianfeng Shanghai Fangguang
N
Venture Investment
Managing Partner August 2012
Partnership Enterprise
(Limited Partnership)
Hong Tianfeng Shanghai Fangguang Erqi
N
Venture Investment
Managing Partner September 2016
Partnership Enterprise
(Limited Partnership)
Hong Tianfeng Suzhou Fangguang
N
Venture Investment
Management Partnership Managing Partner September 2012
Enterprise (Limited
Partnership)
Hong Tianfeng Suzhou Fangguang
N
Venture Investment
Managing Partner September 2012
Partnership Enterprise
(Limited Partnership)
Hong Tianfeng Suzhou Fangguang
N
Venture Investment Phase
Managing Partner July 2016
2 Partnership Enterprise
(Limited Partnership)
Hong Tianfeng Shenzhen Pengfenghui Executive Director
June 2014 N
Venture Investment Ltd. & General Manager
Hong Tianfeng Shenzhen Fangguang
Executive Director N
Enterprise Management May 2016
& General Manager
Consulting Ltd.
Hong Tianfeng Sannuo Biology Sensor Director September 2013 Y
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Hikvision 2020 Annual Report
Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Co., Ltd.
Hong Tianfeng Shenzhen YunZhiXun Director N
May 2014
Network Technology Ltd.
Hong Tianfeng Jiangsu JiTaiKe Electrics Director N
July 2015
Co., Ltd.
Hong Tianfeng Zhongwei Dahe Cloud
Director N
Connection Network November 2016
Technology Ltd.
Hong Tianfeng Shenzhen N
DongFengMingTu
Supervisor August 2016
Enterprise Management
Ltd.
Hong Tianfeng CETC Huayun
Director N
Information Technology March 2017
Ltd.
Beijing ZhiZhangYi
Hong Tianfeng Sicence and Technology Director December 2016 N
Ltd.
Hong Tianfeng Guangzhou Smart Director N
March 2018
Software Ltd.
Hong Tianfeng Shanghai Daxian Director N
Intelligent Science and June 2018
Technology Ltd.
Hong Tianfeng Shenzhen Chip and Semi- Director N
conductor Technology February 2018
Ltd.
Hong Tianfeng Shenzhen YingFeiYuan Director N
October 2017
Technology Ltd.
Hong Tianfeng Shenzhen BiYi Micro- Director N
September 2019 July 2020
electronics Ltd.
Cheng Huifang Independent
Zhejiang FuRun Co., Ltd April 2014 May 2020 Y
Director
Cheng Huifang Hangzhou Oxygenerator Independent December Y
January 2016
Group Co., Ltd. Director 2020
Cheng Huifang Zhejiang HuaCe Media Independent Y
February 2016
Co., Ltd. Director
Cheng Huifang Zhejiang Commercial External Supervisor June 2016 Y
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Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Bank Co., Ltd.
Cheng Huifang Quzhou NanGaoFeng Independent Y
March 2017
Chemical Co., Ltd. Director
Cheng Huifang Zhejiang China Textile Independent
November 2020 Y
City Group Co., Ltd Director
Wang Qiuchao Zhejiang T&C Law Firm Partner August 1993 Y
Wang Qiuchao Zhejiang KaiShan Independent Y
May 2015
Compressor Co., Ltd. Director
Wang Qiuchao Botsy Technology Co., Independent
May 2020 Y
Ltd Director
Shenzhen Wangyu Director N
Xu Ximing Security Service Science November 2019
and Technology Co., Ltd.
Shenzhen Hikvision City Director N
Fu Baijun Service and Operation Demceber 2019 July 2020
Co., Ltd.
Fu Baijun Shenzhen Hikvision N
Urban Service Operation Chairman July 2020
Co., Ltd.
Fu Baijun Legal representative N
Daishan Hailai Yunzhi
and chairman of the September 2019
Technology Co., Ltd.
board of directors
Zhejiang Haishi Huayue Legal representative N
Jin Duo Digital Technology Co., and chairman of the January 2020
Ltd board of directors
Shanghai Yirui N
Wu Xiaobo Management Consultants Director April 2004
Co., Ltd
Wu Xiaobo Hangzhou Co-Rui Director N
Enterprise Management April 2011
Consulting Co., Ltd
Wu Xiaobo Ruihua Innovation Director N
Management Research
November 2019
Institute (Hangzhou) Co.,
Ltd
Wu Xiaobo Ningbo Industrial Internet
Independent
Research Institute Co., May 2018 Y
director
Ltd
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Hikvision 2020 Annual Report
Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Wu Xiaobo Independent Y
Eddy Co., Ltd August 2018
director
Wu Xiaobo Zhongliang Holdings Independent Y
June 2019
Group Co., Ltd director
Wu Xiaobo Yousse Technology Co., Independent Y
June 2020
Ltd director
Xi'an Shaanxi Power Co., Independent Y
Li Shuhua May 2018
Ltd director
Li Shuhua Luoyang Yuchuan Yuye Independent Y
August 2018
Group Co., Ltd director
Li Shuhua Bomenko Marine Independent Y
December 2018
Engineering Co., Ltd director
Li Shuhua Changzhou Guangyang
Director and CEO August 2019 N
Holdings Co., Ltd
Li Shuhua Changzhou Guangyang
Chairman Ocotober 2019 Y
Bearing Co., Ltd
Li Shuhua Legal representative N
Weihai Shiyi Electronics
and chairman of the December 2020
Co., Ltd
board of directors
Beijing Minjin N
Guan Qingyou Information Consulting Supervisor September 2017
Services Co., Ltd
Guan Qingyou Rushi Institute of Finance Chairman September 2017 Y
Guan Qingyou Independent Y
Media Group Co., Ltd. August 2018
director
Guan Qingyou Beijing Xincai Zhibei
Information Technology Supervisor October 2018 N
Co., Ltd
Guan Qingyou South China Futures Co., Independent Y
March 2019
Ltd director
Guan Qingyou Shanxi International Trust Independent Y
July 2019
Co., Ltd director
Guan Qingyou Beijing Film Spectrum Independent Y
March 2019
Technology Co., Ltd director
Guan Qingyou Shandong Province Road Independent Y
January 2021
Bridge Group Co., Ltd director
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Hikvision 2020 Annual Report
Position in other Commencement Termination of Compensation and allowance
Name Name of other Entity
entity of the term the term from the other entities
Description of
1) Fu Baijun left at the end of his tenure on March 12th 2021;
the status of
2) Wu Xiaobo, Li Shuhua and Guan Qingyou were elected as independent directors of the
employment in
Company at the Company's 2021 first interim general meeting of shareholders.
other units
Incumbent and off-office directors, supervisors and senior management personnel during the reporting period that
have been imposed administrative penalties by the CSRC during the last three years.
□ Applicable √ Inapplicable
IV. Remuneration of directors, supervisors and senior management personnel
The decision-making program, determination basis and actual remuneration payment of directors, supervisors and
senior management personnel:
The remuneration of directors, supervisors and senior management personnel will be received preliminarily by
the Remuneration and Appraisal Committee of the Board, among them, remuneration of independent directors
and external supervisors would be further reviewed and approved by general meeting of shareholders. As for those
directors (exclude independent directors), supervisors (exclude external supervisors) and senior management
personnel who receive remuneration from the Company directly, they will receive remuneration according to the
Company’s current Salary System and Performance Appraisal Schemes.
Remuneration of directors, supervisors and senior management personnel
Unit: RMB 0,000
Total remuneration Remuneration
Name Title Gender Age Tenure status from the Company from related
(RMB'0,000) parties (Y/N)
Chen Zongnian Chairman M 56 Incumbent 0 Y
Gong Hongjia Vice Chairman M 56 Incumbent 0 Y
Qu Liyang Director M 57 Incumbent 0 Y
Hu Yangzhong Director, General Manager M 56 Incumbent 308.57 N
Director, Standing Deputy M
Wu Weiqi 57 Incumbent 293.55 N
General Manager
Cheng Tianzong Independent Director M 69 Incumbent 30.00 N
Lu Jianzhong Independent Director M 67 Incumbent 30.00 N
Wang Zhidong Independent Director M 54 Incumbent 30.00 N
Hong Tianfeng Independent Director M 55 Incumbent 30.00 N
Cheng Huifang Supervisor Chairman F 68 Incumbent 20.00 N
Wang Qiuchao External Supervisor M 70 Incumbent 20.00 N
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Hikvision 2020 Annual Report
Total remuneration Remuneration
Name Title Gender Age Tenure status from the Company from related
(RMB'0,000) parties (Y/N)
Employee Supervisor, Person
Xu Lirong M 58 Incumbent 158.56 N
in charge of internal audit
Senior Deputy General
He Hongli F 48 Incumbent 278.57 N
Manager
Senior Deputy General
Fu Baijun F 49 Incumbent 240.57 N
Manager
Senior Deputy General M
Cai Changyang 50 Incumbent 237.94 N
Manager
Senior Deputy General
Xu Ximing M 48 Incumbent 415.65 N
Manager
Senior Deputy General
Bi Huijuan F 50 Incumbent 397.62 N
Manager
Senior Deputy General
Jiang Yufeng M 50 Incumbent 240.56 N
Manager
Senior Deputy General
Pu Shiliang M 44 Incumbent 278.57 N
Manager
Senior Deputy General
Jin duo M 56 Incumbent 268.57 N
Manager
Senior Deputy General
Chen Junke M 50 Incumbent 238.55 N
Manager
Senior Deputy General
Jin Yan Manager, person in charge of F 42 Incumbent 248.57 N
finance and accounting
Senior Deputy General
Huang Fanghong Manager F 39 Incumbent 248.57 N
Board Secretary
Total -- -- -- -- 4,014.42 --
1) On March 5th 2021, Gong Hongjia left as a director of the Company, Cheng Tianzong
and Wang Zhidong left as independent directors of the Company, and Cheng Huifang
left as a supervisor of the Company at the end of thier tenure. Wang Qiuchao was elected
Other information on positions and
as a director of the Company's fifth board of directors, and Hong Tianfeng and Lu
incumbency
Jianzhong were elected as supervisors of the company's fifth supervisory board.
2) On March 12th 2021, Gong Hongjia, Fu Baijun and Jiang Yufeng left their senior
management positions after expires of their tenures.
Share incentives for directors, supervisors and senior executives in the Reporting Period
√ Applicable □ Inapplicable
Unit: share
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Hikvision 2020 Annual Report
Price for
Restricted
Shares vested in Shares newly restricted Restricted
Shares held at
Name Title the current granted in the shares granted Shares held at
the beginning
period current period (RMB per period-end
of the period
share)
Director, General - -
Hu Yangzhong 96,300 48,150 48,150
Manager
Director, Standing Deputy - -
Wu Weiqi 89,100 44,550 44,550
General Manager
Senior Deputy General - -
He Hongli 82,800 41,400 41,400
Manager
Senior Deputy General - -
Fu Baijun 222,900 58,950 163,950
Manager
Supervisor, person in - -
Xu Lirong 65,700 32,850 32,850
charge of internal audit
Senior Deputy General - -
Jiang Yufen 73,800 36,900 36,900
Manager
Senior Deputy General - -
Jin Duo 65,700 32,850 32,850
Manager
Senior Deputy General - -
Jin Yan Manager, person in charge 214,400 52,200 162,200
of finance
Senior Deputy General - -
Cai Changyang 65,700 32,850 32,850
Manager
Senior Deputy General - -
Bi Huijuan 213,000 45,000 168,000
Manager
Senior Deputy General - -
Pu Shiliang 189,640 44,820 144,820
Manager
Senior Deputy General - -
Huang Fanghong Manager, Secretary of the 110,000 0 110,000
board
Senior Deputy General - -
Xu Ximing 197,000 0 197,000
Manager
Total -- 1,686,040 470,520 - 1,215,520
Note：
(1) This personnel listed above are the Company’s senior executives who were included in 2016 restricted shares
incentive plan and 2018 restricted shares incentive plan.
(2) Fu Baijun and Jiang Yufeng left their postions at expires of their tenures on March 12th 2021.
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Hikvision 2020 Annual Report
V. Staff in the Company
1. Statistics of employees, professional structure of the staff, and educational background
Number of incumbent employees in the parent Company 18,392
Number of incumbent employees in major subsidiaries 24,293
Number of incumbent employees 42,685
Number of employees receiving salaries in current period 42,685
Number of retired employees requiring the parent Company and its subsidiaries to bear costs 0
Professional structure
Tier Number of employees
Managerial personnel 697
Production staff 11,751
Sales staff 8,164
Engineers 20,597
Financial staff 321
Administrative Staff 1,155
Total 42,685
Educational background
Education background Number of employees
Master and/or doctor/or above 7,952
Bachelor 21,838
Junior College (professional training) 2,880
Other 10,015
Total 42,685
2. Staff remuneration policy
Hikvision applies scientific talent cultivation methods, effective talent incentive mechanisms and fair competition
platforms to recruit talents, and continuously optimizes the talent structure. The Company provides employees with
remuneration packages which are competitive in the industry. In addition to endowment insurance, medical
insurance, unemployment insurance, employment injury insurance, maternity insurance and housing provident
funds, the Company also provides employees with the supplementary commercial insurance, special allowances,
and other benefits, and creates a fairer and more humanized working environment for each employee; so that each
employee is able to demonstrate his/her value, and create value to satisfy increasing demands for a good life.
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Hikvision 2020 Annual Report
3. Staff training plans
The company is focused on long-term development strategies and works for the goal of supporting business
development and people development and has planned and implemented a set of training programs and courses.
In 2019, the Company continued to optimize the training system, with priority placed on creating online
learning platform, optimizing courses system and cultivating internal trainers. In order to better accumulate and
reproduce the experiences of the organization and provide the employees with premium training courses of various
fields, the Company has introduced detailed arrangements for systematic management in 5 categories and
implemented certification and level-by-level management of the courses from the aspects of course quality and
reproducibility, and etc. The company has enacted the standard for Hikvision's internal trainers’ growth,
development and capabilities, clarified the capability requirements and enabling courses for the internal trainers in
terms of "demand analysis, course design, course development, lecturing and course evaluation", and completed the
SOP process for internal trainers certification. The Company provides standardized certification procedure covering
application, qualification review, selection, certification and employment and will further improve certification
efficiency by implementing online management.
The Human Resources Department interacts with the front-line business personnel and assists the business
experts in gleaning inter-organization experiences to design and implement large-scale training-practice programs.
We are striving to better facilitate ability enhancement of the employees in critical positions during business
transformation and thoroughly implement the concept of "learning in practice".
In 2020, the Company continued to work on the goal of business development and talent development and
continue optimizing the systems and resources, to facilitate strategic transformation and prepare the talent pool and
enhance their capabilities for the critical activities during business development.
In 2021, the Company will continue the "system and resources" construction, while focusing on the annual
strategic completion of several key posts, to carry out targeted capacity improvement projects.
4. Labor outsourcing
□ Applicable √ Inapplicable
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Hikvision 2020 Annual Report
Section X Corporate Governance
I. Basic situation of corporate governance
Since the inception of the Company, we have been strictly following relevant laws and regulations such as the
“Company Law”, “Securities Law”, “Code of Corporate Governance of Listed Companies”, “Rules Governing
the Listing of Shares on Shenzhen Stock Exchange”, and “Guidelines for the Standardized Operation of Listed
Companies on the Shenzhen Stock Exchange” as well as the requirements of the regulations and regulatory
documents of the regulatory authorities, set up a “3+1” corporate governance structure comprising shareholders’
meeting, the board of directors, the board of supervisors, and the senior management taking into consideration the
actual situation of the Company, and disclosed information in a true, accurate, complete, timely and impartial
manner; we have also established and improved internal management and control system, maintained the healthy
and stable development, and ensured the legitimate rights and interests of the Company and investors. During the
reporting period, the basic details of corporate governance is as follows:
1. Shareholders and shareholders’ meeting
We have ensured the equal status and full rights for all shareholders, especially small and medium shareholders.
During the reporting period, the Company’s shareholders’ meetings were convened by the board of directors, and
witnessed by lawyers on-site with legal opinions issued. Proposals were reviewed in compliance with legal
procedures to ensure that all shareholders have the right to know, participate, and vote on major issues of the
Company and to fully exercise their legal rights.
2. The controlling shareholders and listed company
The Company’s controlling shareholders had no improper conduct and have never directly or indirectly
interfered with the Company’s decision-making and operating activities overriding shareholders’ meeting. There
are no such cases that controlling shareholders occupy the Company's funds or the Company provides guarantees
for controlling shareholders. The Company, with its own complete business system and management capabilities,
has been independent of controlling shareholders in terms of business, personnel, assets, institutions, and finances.
The Company's board of directors, board of supervisors and internal institutions has been operating separately to
ensure that major company decisions are made and implemented by the Company.
3. Directors and the board of directors
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Hikvision 2020 Annual Report
The Company's board of directors, operating in a normalized way, has performed its functions invested by the
“Articles of Association” and relevant laws and regulations, and implemented the relevant decisions of the
shareholders’ meeting. The number and composition of the Company's board of directors comply with the
requirements of laws and regulations. There are four special committees for strategy, audit, nomination,
remuneration and appraisal under it. Each committee has a clear division of labor, clear powers and responsibilities,
and effective operation. All directors of the Company have performed their duties with integrity, loyalty, diligence,
professionalism and due diligence, and earnestly safeguard the legitimate rights and interests of the Company and
all shareholders with a view to the interests of the Company and all shareholders. During the reporting period, the
company convened 6 board meetings, reviewed and approved 38 proposals including the “Annual Report 2019 and
Its Summary”, “Proposal on Revising the Performance Appraisal Indicators of the Company under the Restricted
Stock Plan in 2018”, and “Proposal on Revising < Management Measures for Core Staff’s Co-investment into
Innovative Business >”, etc.
4. Supervisors and board of supervisors
The number and composition of the Company’s board of supervisors meet the requirements of laws and
regulations; the Company’s supervisors have diligently performed their duties and obligations, and carried out
supervision and inspection functions being responsible to shareholders, and supervised the Company’s financial
status, operating conditions and related transactions, and the performance of duties by directors and senior managers
to fully protect the legal rights and interests of the Company and all shareholders.
5. Performance appraisal and incentive and restraint mechanism
The Company has established a complete performance appraisal system and remuneration system. The
appointment procedures for senior management personnel are open and transparent, and comply with relevant laws
and regulations. The remuneration and appraisal committee under the Company's board of directors is responsible
for performance appraisal of the Company's senior management at the end of the year to determine their
remuneration. To further set up and improve the Company’s incentive mechanism and strengthen the concept of
sustainable development of both the Company and employees, the Company has adopted a restricted share plan and
the plan of core staff’s co-investment into innovation business to achieve its development strategy and business
objectives, and realize sustainable health development.
6. Information disclosure and transparency
The Company has strictly followed the relevant laws and regulations and the “Company Information
Disclosure Management Measures” to disclose relevant information truthfully, accurately, completely, timely and
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Hikvision 2020 Annual Report
impartially, and thoroughly implemented the “Company Information Insider Registration Management System” to
register insiders and file to further standardize inside information management and to ensure that all shareholders
and other stakeholders of the Company have equal access to company information. During the reporting period, the
Company disclosed 4 periodic reports and 68 temporary announcements. The Company's information disclosure
has been recognized by the regulatory authorities: the company has been rated as Level A by the Shenzhen Stock
Exchange for 10 consecutive years in the SMEs board listed company information disclosure assessment.
7. Investor relations activities
The Company has proactively organized performance briefings after the disclosure of regular reports, regularly
held investor reception day activities to actively listens to investors’ opinions and suggestions, and released the
“Investor Relations Activity Record” after the event to ensure fair access to company information by all investors.
In daily work, the Company has kept in touch with investors through multiple channels such as telephone, e-mail,
and irm.cninfo.com.cn to effectively interact and communicate with investors. The Company’s efforts to maintain
investor relations has been recognized by the capital market: the Securities Times’ 14th China Most Valuable Listed
Company Selection “SMEs Board Top 50”, “SMEs Board Top 10 Management Teams”, and “Best Listed Company”
by New Fortune; CBN 2020 China Capital Annual Conference-Valuable Company Selection “2020 Top 15
Valuable Companies in China”, “2020 Top 30 Valuable Companies - New Leader of the Security Industry”; Wind
2020 List of Listed Companies by Market Value “Market Value List Top 50”, “Top 5 in Hardware Equipment
Industry”, “Top 50 Listed Companies Most Favored by Institutions”.
Any significant incompliance for the relevant regulatory documents issued by China Securities Regulatory
Commission in respect of the Company’s corporate governance:
□ Yes √ No
There is no significant incompliance for the relevant regulatory documents issued by China Securities Regulatory
Commission in respect of the Company’s corporate governance.
II. Company’s Independence in Businesses, Management, Assets, Institutions and Finance from Controlling
Shareholders
The Company is completely independent in business, management, assets, organization, and finance from its
shareholders. The Company has established a sound internal control system, being capable of operating
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independently with its complete and independent business.
(1) Business independence: The Company has its own production, purchases and sales systems, which
are completely independent from controlling shareholders. Therefore, there is no competition among
the Company, controlling shareholders, and related parties.
(2) Personnel independence: The Company has independent personnel. The management has set up
various independent departments, including R&D, production, administration, finance and operation
management divisions, etc., and established complete management methods for labor, personnel, and
salary management. Personnel of the Company are independent from controlling shareholders, e.g.
the Chairman is elected through the general meetings of the Board. In addition, the General Manager,
Senior Deputy General Managers, the Secretary of the Board, CFO, and other senior management
personnel of the Company are only employed and remunerated by the Company, and do not hold any
position in controlling shareholders and is not remunerated by controlling shareholders. Directors,
Supervisors and Senior Management Personnel are appointed through legal procedures strictly in
accordance with relevant regulations stipulated in Company Law and Articles of Association. There is
no controlling shareholder intervention in the Company’s personnel decisions in general meetings of
the Board or shareholders.
(3) Asset Completeness: The property rights of assets are explicitly between the Company and the
controlling shareholders, and no assets, funds, or other resources owned by the Company are illegally
and irregularly occupied or controlled by the controlling shareholders. Assets of the Company are
integrated, including complete property rights of fixed assets for production, supporting assets for
production, and intangible assets of patents, etc. The Company has the full control and ownership of
all assets.
(4) Independence in organizations: The Company’s Board, Supervisor Committee, Management and
other internal organizations operates independently, and each functional department is independent
from controlling shareholders in duty and personnel. There is no superior-subordinate relation
between functional departments of controlling shareholders and those of the Company, which would
have an impact on the Company’s independent operations.
(5) Financial Independence: The Company has established an independent financial department, as well
as a sound and independent financial and accounting system. The Company makes financial decisions
independently. There is no controlling shareholder intervention in the Company’s financial and
accounting activities. The Company has maintained accounts with banks independently of and do not
share any bank account with our Controlling Shareholders. The Company has undertaken independent
tax registration in accordance with applicable laws, and paid tax independently.
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III. Horizontal competition
□ Applicable √ Inapplicable
IV. Annual General Meeting and Extraordinary General Meetings convened during the Reporting
Period
1. Annual General Meeting convened during the reporting period
Proportion
of
Meeting Nature Convened Date Disclosure Date Disclosure Index
participating
investors
Annual General Public Announcement:
2019 Annual General Meeting 71.59% May 15th 2020 May 16th 2020
Meeting No. 2020-032
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed voting
rights:
□ Applicable √ Inapplicable
V. Performance of duties by independent directors during the reporting period
1. Attendance of independent directors in board meetings and general meetings
Attendance of independent directors in board meetings and general meetings
Presence of
Board meeting Board Board meeting Board meeting
independent
Name of presence meeting presence by Board meeting Board meeting not attend in
directors in
Independent required in the presence telecom- presence through absence person for two
general
Director reporting on site communication a proxy (times) (times) consecutive
meetings
period (times) (times) (times) times
(times)
Cheng Tianzong 6 1 5 0 0 N 0
Lu Jianzhong 6 1 5 0 0 N 0
Wang Zhidong 6 1 5 0 0 N 1
Hong Tianfeng 6 1 5 0 0 N 0
2. Objections from independent directors on related issues of the Company
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Were there any objections on related issues of the Company from independent directors?
□ Yes √ No
During the reporting period, there is no objections on related issues of the Company from independent directors.
3. Other details about the performance of duties by independent directors
Were there any suggestions from independent directors accepted by the Company?
√ Yes □ No
Details: During the Reporting Period, independent directors strictly followed related rules, regulations,
including Company Act, Guidance of Board of Directors for Listed Compaies, Shenzhen Stock Exchange Listed
Companies Standard Operation Guidelines, the Articles Association, and Regulations on Independent Directors.
They focused on the Company operation, carried out their duties independently and imparted considerable
professional advice on improving the Company’s systems, daily operations and decision making. They provided
fair advice during the Reporting Period and played an effective role in improving the Company supervisory systems
and protecting the legal rights of the Company and the shareholders as a whole. For details, please refer to
Independent Directors’ 2020 Debriefings disclosed on www.cninfo.com.cn.
VI．Performance of duties by special committees under the Board during the Reporting Period
1. Strategy Committee
During the reporting period, the Strategy Committee, based on the domestic and foreign economic conditions,
the global epidemic situation of the Covid-19, and the characteristics of the industry in which the Company carries
out business, conducted research into and offered suggestions on the Company's assets operation projects and major
investment decisions and examined and assessed the implementation of the aforesaid matters. Besides, the Strategy
Committee listened to the reports of the management executives on operation and management of the Company's
business modules and explored the Company's future long-term strategic development plan based on the Company's
current development conditions and the extent to which regions are affected by the COVID-19 outbreak, to inform
the Company's sustainable and healthy development with strategic insights.
2. Audit Committee
The Audit Committee mainly maintains communication between internal auditors and external auditors and
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also inspects and supervises external audits. During the reporting period, the audit committee reviewed the annual
audit work summary report by the external audit institution, and offered suggestions and opinions on the selection
and employment of the external audit institution. It has also listened to the relevant reports by the internal audit
department, and made valuable suggestions on the internal audit department's team issues, division of labor and
arrangements, and work plan and summary. In addition, it has seriously reviewed the Company’s financial
information and its disclosure, carried out daily audits on the subsidiaries, and gotten the information on the
Company’s and its subsidiaries’ operation, management and internal control status, and provided guidance from a
professional perspective; checked and supervised the scientificity, reasonability, effectiveness and implementation
of the internal control system of the Company. Meanwhile, the audit committee also organized special work
meetings to track the implementation of major projects of the financial center and internal audit department, and
put forward relevant requirements for the Company's internal control compliance.
3. Nomination Committee
The primary responsibility of the Nomination Committee is to examine and audit the criteria and procedure for
selecting directors, senior managerial staff and other personnel and offer suggestions. During the reporting period,
the Nomination Committee carefully investigated the criteria and procedure for selecting the Company's directors
and senior managerial staff, communicated with the relevant departments, cautiously audited the resume and
qualification of directors and senior managerial staff, thus practically fulfilling the Nomination Committee's
responsibility.
4. Remuneration and Appraisal Committee
During the reporting period, the Remuneration and Appraisal Committee prudently examined the remuneration
for the senior managerial staff and the overall remuneration policy and scheme of the Company and offered
professional suggestions on the appraisal criteria for the aforesaid personnels. They deliberated on the 2020
Remuneration and Performance Appraisal Plan of the Company and also tracked and supervised implementation of
this plan. They deliberated on the matters concerning the relevant matters related to the adjustment of the
performance appraisal of the third unlocking period of the 2016 Restricted Incentive Shares Scheme, the matters
related to the third unlocking, repurchase and write-off of 2016 restricted shares, the first unlocking, repurchase and
write-off of 2018 restricted shares, and the amendments of the Management Measures for Core Staff Investment in
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Innovative Businesses, and guidance were provided.
VII. Performance of duties by the Supervisory Committee
Were there any risks to the Company identified by Supervisory Committee when performing its duties during the
Reporting Period?
□ Yes √ No
VIII. Assessment and incentive mechanism for the senior management
The Company has established a fairly sophisticated mechanism on employees’ evaluation and incentive
restraint, and has established a fair and transparent appraisal and incentive mechanism on senior management
personnel and other various level management personnel and employees. The Company’s board of directors has
carried out annual appraisals of senior management members mainly based on annual target achievement index.
The Board is responsible for appraisals of the general manager on the general manager’s duty, capacity and
performance of operation; and the general manager carried out appraisals of other senior management members on
their operational management and implementation of relevant assignments. In 2020, senior management personnel
carried out their duties diligently with good performance, and fairly completed their objectives and missions set out
at the beginning of the year.
IX. Evaluation report on internal control
1. Any significant internal control deficiencies during the reporting period
□ Yes √ No
2. Self-evaluation report on internal control
Disclosure date of full text of self-evaluation report on internal control April 17th 2021
Disclosure index of full text of self-evaluation report on internal control www.cninfo.com.cn
Proportion of assets evaluated in total assets 100.00%
Proportion of revenue evaluated in total revenue per consolidated financial statement 100.00%
Recognition standard of deficiencies
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Nature Financial report level Non-financial report level
Significant deficiency:
A deficiency or a combination of deficiencies in internal control
may prevent significant errors in financial reports from being
identified or prevented, e.g.:
A. Invalid internal control environment; Internal control deficiencies at non-
B. Fraud of directors, supervisors and senior management financial report level are mainly identified
personnel on the financial report ; by the likelihood of occurrence and the
C. Significant errors identified by external auditors but not extent of impacts on operating effective in
identified during the Company is operating; business.
D. Invalid supervision of audit committee and internal audit
Significant deficiency: the high likelihood
system;
leading to significant reduction of working
E. Other deficiencies that may lead to the wrong judgement of
efficiency, or significant increase of
financial statement reporter.
uncertainty, or significant deviation from
Important deficiency: the expected target;
Qualitative criteria A deficiency or a combination of deficiencies in internal control Important deficiency: a higher likelihood
may prevent errors in financial report from being identified or leading to remarkable reduction of
prevented, although such deficiency is not significant, but working efficiency, or remarkable increase
require attention of the Board and Management, e.g.: of uncertainty, or remarkable deviation
A. Application of accounting policies does not follow the from the expected target;
enterprise accounting standard; Normal deficiency: a low likelihood
B. No internal control systems for fraud; leading to reduction of working efficiency,
C. No control systems or system not effective for unusual or or increase of uncertainty, or deviation
special transactions or no compensatory relevant control; from the expected target;
D. One or more deficiencies which prevent the preparation of
true and fair financial statements.
Normal deficiency: Not significant and not important
deficiency.
Significant deficiency: direct losses of
Significant deficiency: potential errors 5% or more of total
assets is 5% or more of total profits
profits
Important deficiency: direct losses of
Important deficiency:potential errors 2% or more but below
Quantitative criteria assets is2% or more but below 5% of total
5% of total profits
profits
Normal deficiency: potential errors is 2% or less of total
Normal deficiency: direct losses of assets
profits
is below 2% of total profits
Number of significant deficiencies in financial report level 0
Number of significant deficiencies in non-financial report level 0
Number of important deficiencies in financial report level 0
Number of important deficiencies in non-financial report level 0
X．Audit report or assurance report on internal control
□Applicable √Inapplicable
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Section XI Corporate Bonds
Whether the Company has publicly issued corporate bonds on stock exchange place, which has not terminated or
terminated but fail to collect the full payment before the half year report authorized disclosure date.
□Yes √No
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Section XII Financial Report
I. Audit report
Audit Opinion Standard unqualified audit opinion
Audit Report sign-off Date April 15th 2021
Audit Institution Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Audit Report Number Deloitte Auditors’ Report (Audit) No. 21- P02773
Certified Public Accounts Name Tang Lianjiong, Zhang Shushu
To all shareholders of Hangzhou Hikvision Digital Technology Co., Ltd.:
I. Audit Opinion
We have audited the accompanying financial statements of Hangzhou Hikvision Digital Technology Co., Ltd.
(hereinafter referred to as “Hikvision"), including consolidated and parent company's balance sheet as of December 31st
2020, consolidated and parent company's income statement, cash flow statement and statement of changes in owners’
equity of 2020 as well as relevant financial notes to financial statements.
In our opinion, the financial statements annexed have been prepared in accordance with Accounting Standards for
Business Enterprises in all material respects and they present fairly the consolidated and parent company’s financial
position of Hikvision as of December 31st 2020 and consolidated and parent company’s financial performance and cash
flows of 2020.
II. Basis of Opinion
We have conducted our audit in accordance with the Auditing Standards for Chinese Certified Public Accountants.
“Responsibilities of Certified Public Accountants for Financial Statements Audit” in the Audit Report further states our
responsibilities under the standards. As per the code of ethics of Chinese certified public accountants, we are independent
from Hikvision and have implemented other responsibilities as required by the code of ethics. We believe that the audit
evidence we have acquired is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Matters
Key matters are matters we deem the most significant to the financial statements audit for the current period based
on our professional judgment. These matters are handled based on the financial statements audit as a whole and the audit
opinion formed accordingly. We don’t present opinions separately on these matters. We confirm that the following matters
are key matters to be communicated through in the audit report.
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(I) Recognition of Sales Revenues
Description:
As shown in Note (V) 43, the operating revenue in 2020 in the consolidated financial statements of the Group for
the year ended December 31st 2020 is RMB 63,503,450,891.78. The product sales revenue, a key performance indicator,
reaches RMB 60,287,664,582.89, accounting for 94.94% of the operating revenue, which is a significant and has a
significant influence on results of operations. The product sales revenue models include product domestic sales and
product export sales by domestic companies and the overseas sales of overseas subsidiaries; the domestic sales of products
by domestic companies and the overseas sales of overseas subsidiaries are completed when the control of the goods is
transferred, i.e. when the products are delivered to the other party’s designated location, or the other party completed
acceptance; while for the export of products of domestic companies, the delivery of the goods to the carrier designated by
the other party at the port of shipment specified in the contract within the specified time limit is the time point for the
transfer of control of the goods. The timing of the transfer of control rights under each revenue model is different, and
improper determination of the timing of completion of performance obligations may result in a material misstatement of
revenue recognition. Therefore, we regard the occurrence of sales revenue as a key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to revenue recognition,
and testing the effectiveness of its operation;
(2) For revenues under different sales models, selecting a sample to check a sales contract, reviewing its main transaction
terms, evaluating whether revenue recognition complies with requirements of accounting policies of the Group and
the Accounting Standards for Business Enterprises; conducting a background investigation of important customers to
check whether there is any indication of existence of abnormal customers.
(3) Analyzing revenues and gross profits, based on product types, to understand whether there are abnormal fluctuations
in the revenues and gross profits for the year, and conducting a test of details for identified specific transactions,
through systematic analysis of revenue data, and reviewing relevant supporting documents;
(4) Selecting sample(s) from product sales revenues recorded for the year, checking invoices, sales contracts or orders,
shipping orders, signature forms, and other supporting documents; for the sample(s) of income under the export model
of the selected domestic companies, additional inspections will be made to the customs declaration record and
shipment record.
(II) Provision for Decline in Value of Inventories
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Description:
As shown in Note (V) (8), as of December 31st 2020, the carrying balance of inventory other than contract
performance costs in the Group’s Consolidated Financial Statements is RMB 11,535,395,160.86, and the provision for
diminution in value of inventories was RMB 613,100,101.53. The carrying value of the Group’s inventories is relatively
high, so the provision for diminution in value of inventories has a relatively significant influence on the financial
statements. As shown in Note (III) 12.3 and Note (III) 31 to the financial statements, inventories are measured at the lower
of cost and net realizable value, on the balance sheet date. The provision for impairment of inventories is made when the
net realizable value is lower than the cost. Net realizable value is the estimated selling price for inventories less estimated
costs of completion to be incurred, estimated costs to make the sale and relevant taxes. As the management needs to use
critical accounting estimates in determining the net realizable value of inventories and the amount is significant, we treat
the provision for diminution in value of inventories as a key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to provision for
diminution in value of inventories by the Group’s management, and testing the effectiveness of its operation;
(2) Understanding the Group’s accounting policies for the provision for diminution in value of inventories, and evaluate
the rationality of the methods and assumptions used by the management of the Group to estimate the provision for
diminution in value of inventories;
(3) Performing the supervision and selective examination procedure for inventory-taking of the Group, with focus on
defective, obsoleted or slow-moving inventories, and checking whether there are inventories with an indication of
impairment which are not provided for diminution in value of inventories.
(4) Selecting sample(s) from inventories to test the net realizable value. For the selected raw material samples, the book
cost of the raw material is compared with the actual purchase price of the latest or later period; For the selected
unfinished product samples, comparing the book cost of the unfinished product with the actual selling price of the
most recent period or the later period for the finished goods after subtracting the estimated cost of the same kind of
products from the current period to completion, estimated sales expenses and related taxes, and evaluating the
reasonableness of the estimated costs, sales expenses and related taxes and fees that will occur until completion; For
the selected sample of finished products, compare the book cost of the finished product with the actual selling price
of the latest or future period minus the estimated sales expenses and related taxes, and evaluating the reasonableness
of the the estimated sales expenses and related taxes
（III）Provision for credit loss of accounts receivable
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Description:
As disclosed in Note (V)-4 to the consolidated financial statements of the Group, as of December 31st 2020, the
balance of accounts receivable amounted to RMB 23,491,775,903.07, and the balance of provision for credit loss of
accounts receivable amounted to RMB 1,512,395,186.21. The book value of the Group’s accounts receivable is
relatively high, and the provision for credit loss of accounts receivable has a significant impact on the financial
statements. As shown in Note (III) 10.2 and Note (III) 31 of the financial statements, the Group makes provisions for
credit losses for accounts receivable at an amount equivalent to expected credit losses during the entire duration. For
accounts receivable with significant individual amount and when the debtor has major financial difficulties, etc., the
Group recognizes its credit losses based on individual assets, and classifies other accounts receivable into different
combinations based on common credit risk characteristics and calculates expected credit losses on a portfolio basis.
For accounts receivable classified into portfolios, the Group uses impairment matrix to determine the expected
credit loss provision for accounts receivable. The expected credit loss provision ratio for each portfolio by using
impairment matrix is determined based on the Group’s historical overdue ratio and default and with reference to the
forward-looking information of the industry. In measuring expected credit loss, the Company is required to classify
the customers with similar credit risk characteristics into a same portfolio, and classify them by appropriate overdue
stage and comparable expected credit loss rate. The accounting estimates above are subject to a high level of
uncertainties. Therefore, we identify the recognition of credit loss provision for accounts receivable on a portfolio
basis as a key audit matter.
Audit Measures:
Main audit procedures that we perform for the aforesaid key audit matters include:
(1) Understanding and evaluating design and implementation of key internal control in relation to expected
credit loss provision for accounts receivable by the Group’s management, and testing the effectiveness of
its operation;
(2) Understanding the Group’s accounting policies for expected credit loss on accounts receivable; for the
model where the Group’s management estimates expected credit loss provision for accounts receivable on
a portfolio basis, we mainly performed the following procedures;
- Assessing the rationality of measurement method by using impairment matrix model, and the rationality
of the key parameters and assumptions used in the impairment matrix model, including classification of
different portfolios, classification of stage, forward-looking adjustment, etc.;
- Obtaining the historical default data used by the Group’s management in determining the historical loss
rate of accounts receivable, and evaluating the accuracy thereof;
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Hikvision 2020 Annual Report
- Selecting samples to test the accuracy of the classification of portfolio and stage by the Group’s
management;
- Recalculating the expected credit loss provision based on default loss percentage.
IV. Other Information
Management of Hikvision shall be responsible for other information. Other information includes the information
covered in the annual report, excluding the financial statements and our audit report.
Our audit opinion on the financial statements does not cover other information and we do not express any form of
authentication conclusion on other information.
In connection with our audit of the financial statements, our responsibility is to read other information and to consider
whether other information is significantly misstated or materially inconsistent with the financial statements or the
information we learned during the audit.
Based on the works we have performed, if we determine that there is a material misstatement in other information,
we should report the fact. In this respect, we have nothing to report.
V. Responsibility of the Management and Governance for the Financial Statements
The management of Hikvision is responsible for the preparation of financial statements in accordance with
Accounting Standards for Business Enterprises to achieve fair presentation, and design, implementation and maintenance
of necessary internal control to enable the financial statements are free from material misstatement, whether due to fraud
or error.
When preparing the financial statements, the management is responsible for assessing the going-concern ability of
Hikvision, disclosing issues related to going-concern as applicable, and applying going-concern assumptions, unless the
management plans to liquidate Hikvision, terminate operation or has no other realistic choice.
The governance is responsible for supervising financial reporting processes of Hikvision.
VI. Responsibility of Certified Public Accountants on Audit of the Financial Statements
Our objective is to obtain reasonable assurance as to whether the overall financial statements are free from material
misstatement, whether due to fraud or error, and to issue audit report that contain audit opinions. Reasonable assurance is
a high level of assurance, but could not guarantee that an audit performed in accordance with the Auditing Standards can
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always figure out any existing material misstatements. Misstatements may be caused by fraud or error. Misstatement is
generally considered to be material if it is reasonably expected that the misstatement, alone or aggregated, may affect the
users’ financial decisions based on the financial statements.
In performing the audit in accordance with the Auditing Standards, we applied professional judgment and maintained
professional skepticism. Meanwhile, we also perform the following duties:
(1) Identify and evaluate the risk of material misstatement of financial statements due to fraud or error; design and
implement audit procedures to cope with these risks, and obtain adequate and appropriate audit evidence as the
basis for expressing audit opinions. As fraud may involve collusion, forgery, willful omission, misrepresentation
or override of internal control, the risk of not discovering a material misstatement due to fraud is higher than
the risk of not discovering a material misstatement due to error.
(2) Understand the internal control related to auditing as a way to design appropriate audit procedures, but the
purpose is not to express opinions on the effectiveness of the company’s internal control.
(3) Evaluate the properness of accounting policy selected by the management and the rationality of accounting
estimate and related disclosure.
(4) Reach a conclusion on whether the going concern assumption adopted by the management is appropriate.
Meanwhile, based on the audit evidence obtained, reach a conclusion on whether there are material uncertainties
in the events or conditions that may cast significant doubts on Hikvision's ability to continue as a going concern.
If we reach a conclusion that there is a material uncertainty, the Auditing Standards require us to call the attention
of the users of the report to the relevant disclosures in the financial statements in the audit report. If the disclosure
is insufficient, we should issue modified audit opinions. Our conclusion is based on the information available
up to the date of the audit report. However, future events or conditions may result in the failure of Hikvision to
continue as a going concern.
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(5) Evaluate the overall presentation (including the disclosure), structure and content of the financial statements
and evaluate whether the financial statements fairly reflect the related transactions and events.
(6) Obtain adequate and appropriate audit evidence on the financial information of entity or business activities of
Hikvision so as to express audit opinions on the financial statements. We are responsible for directing,
supervising and executing the audit on the Group, and assume full responsibility for the audit opinions.
We communicated with the governance about the scope of the audit, the schedule and major audit findings, including
the notable shortcomings of internal control identified during the auditing.
We also provide statement to the governance on the independence-related work ethics we follow, and communicate
with the governance on all relations and other matters that might be reasonably deemed to influence our independence as
well as relevant precautionary measures (as applicable).
We determine which of the matters we communicated with the governance are of the greatest importance to the audit
of financial statements of the current period so as to make them key matters. We describe the matters in the audit report.
We decide not to communicate on such matters in the audit report unless the laws and regulations forbid the public
disclosure of such matters, or, in rare circumstances, if the negative consequence of communication of matters in the audit
report is reasonably expected to exceed the benefit of the public interest.
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At December 31st 2020
Consolidated Balance Sheet
Unit: RMB
Item Notes On December 31st 2020 On December 31st 2019
Current Assets:
Cash and bank balances (V)1 35,459,729,108.27 27,071,948,919.78
Held-for-trading financial
(V)2 22,679,846.77 181.76
assets
Notes receivable (V)3 1,303,252,705.19 973,236,789.02
Accounts receivable (V)4 21,979,380,716.86 21,307,927,200.28
Receivables for financing (V)5 1,959,601,195.25 1,257,385,053.02
Prepayments (V)6 296,334,689.86 309,685,733.32
Other receivables (V)7 519,143,350.82 555,246,545.48
Inventories (V)8 11,477,906,040.70 11,267,986,843.11
Contract assets (V)9 245,754,510.98
Non-current assets due within
(V)10 1,001,208,813.83 528,469,701.75
one year
Other current assets (V)11 497,914,506.64 754,456,821.72
Total Current Assets 74,762,905,485.17 64,026,343,789.24
Non-current Assets:
Long-term receivables (V)12 2,105,570,004.53 1,382,536,761.22
Long-term equity investment (V)13 864,026,710.23 252,165,321.49
Other non-current financial
(V)14 491,939,067.27 312,398,267.44
assets
Fixed assets (V)15 5,876,007,536.60 5,791,218,720.87
Construction in progress (V)16 1,425,235,193.72 631,555,479.06
Intangible assets (V)17 1,251,317,923.69 1,046,122,507.64
Goodwill (V)18 274,203,665.20 273,611,961.96
Long-term deferred expenses (V)19 108,584,686.85 87,611,490.75
Deferred tax assets (V)20 820,380,954.86 688,849,263.70
Other non-current assets (V)21 721,511,156.08 865,586,676.92
Total Non-current Assets 13,938,776,899.03 11,331,656,451.05
Total Assets 88,701,682,384.20 75,358,000,240.29
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Hikvision 2020 Annual Report
At December 31st 2020
Consolidated Balance Sheet-continued
Unit: RMB
Item Notes On December 31st 2020 On December 31st 2019
Current Liabilities:
Short-term borrowings (V)22 3,999,246,634.59 2,640,082,485.15
Held-for-trading financial
(V)23 7,405,771.15 652,428.18
liabilities
Notes payable (V)24 1,036,920,229.85 1,239,584,016.70
Accounts payable (V)25 13,593,884,790.19 12,700,075,307.70
Receipts in advance - 1,020,989,460.61
Contract liabilities (V)26 2,161,166,671.26
Payroll payable (V)27 2,877,786,430.71 2,359,674,640.12
Taxes payable (V)28 1,770,057,908.62 991,342,805.91
Other payables (V)29 1,525,053,355.95 1,568,744,599.94
Non-current liabilities due
(V)30 3,507,680,339.78 86,123,154.06
within one year
Other current liabilities (V)31 745,711,579.57 913,534,538.26
Total Current Liabilities 31,224,913,711.67 23,520,803,436.63
Non-current Liabilities:
Long-term borrowings (V)32 1,961,167,761.30 4,604,168,571.43
Long-term payables (V)33 39,595,459.35 50,181,416.72
Provisions (V)34 151,443,871.02 90,570,669.01
Deferred income (V)35 190,878,987.69 333,589,831.30
Deferred tax liabilities (V)20 92,979,823.89 51,088,103.96
Other non-current liabilitie (V)36 560,959,368.74 1,234,739,326.10
Total non-current liabilities 2,997,025,271.99 6,364,337,918.52
Total liabilities 34,221,938,983.66 29,885,141,355.15
Owners’ Equity
Share capital (V)37 9,343,417,190.00 9,345,010,696.00
Capital reserves (V)38 5,178,777,462.09 4,126,943,698.96
Less: Treasury shares (V)39 1,121,918,737.47 2,148,273,864.36
Other comprehensive income (V)40 (84,993,926.94) (53,541,146.99)
Surplus reserves (V)41 4,672,505,348.00 4,672,505,348.00
Retained earnings (V)42 35,806,523,826.37 28,961,389,145.22
Total owners' equity attributable 53,794,311,162.05 44,904,033,876.83
to owner of the Company
Minority equity 685,432,238.49 568,825,008.31
Total owners' equity 54,479,743,400.54 45,472,858,885.14
Total liabilities and owners'
88,701,682,384.20 75,358,000,240.29
equity
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Legal Representative: Chen Zongnian；Person in charge of the accounting work: Jin Yan;
Person in Charge of the Accounting Department: Zhan Junhua
203
Hikvision 2020 Annual Report
At December 31st 2020
Balance sheet of the parent company
Unit: RMB
st st
Item Notes On December 31 2020 On December 31 2019
Current Assets:
Cash and bank balances 23,476,606,330.08 16,851,590,525.05
Notes receivable 107,411,912.35 149,703,073.98
Accounts receivable (XV)1 24,193,392,179.36 25,107,965,925.08
Receivables for financing 12,216,215.65 84,839,695.67
Prepayments 62,946,087.75 160,688,588.99
Other receivables (XV)2 726,703,133.65 921,275,388.15
Inventories 204,216,250.73 171,243,815.97
Contract assets 3,311,250.08
Non-current assets due within
71,208,685.76 4,513,795.81
one year
Other current assets 10,110,869.86 23,117,398.50
Total Current Assets 48,868,122,915.27 43,474,938,207.20
Non-current Assets:
Long-term accounts receivable 47,762,348.01 681,568.43
Long-term equity investment (XV)3 6,727,373,453.97 5,074,018,030.44
Other non-current financial
489,054,847.27 309,504,047.44
assets
Fixed assets 2,762,700,997.83 2,831,295,145.61
Construction in progress 388,903,828.81 153,416,054.28
Intangible assets 158,917,438.86 188,362,883.75
Long-term deferred expenses 43,264,691.73 34,199,446.06
Deferred tax assets 110,066,596.99 126,357,792.34
Other non-current assets 2,740,576.47 21,619,464.07
Total Non-current Assets 10,730,784,779.94 8,739,454,432.42
Total Assets 59,598,907,695.21 52,214,392,639.62
204
Hikvision 2020 Annual Report
At December 31st 2020
Balance sheet of the parent company - continued
Unit: RMB
st st
Item Notes On December 31 2020 On December 31 2019
Current Liabilities:
Short-term borrowings 1,431,233,375.00 2,001,781,388.89
Accounts payable 540,664,512.60 450,983,270.08
Receipts in advance - 227,242,328.23
Contract liabilities 240,629,015.92
Payroll payable 1,618,357,135.99 1,564,304,003.49
Taxes payable 1,539,095,196.97 796,890,945.83
Other payables 659,214,959.62 533,325,191.05
Non-current liabilities due
3,219,794,958.37 9,539,251.98
within one year
Other current liabilities 589,167,743.26 913,534,538.26
Total Current Liabilities 9,838,156,897.73 6,497,600,917.81
Non-current Liabilities:
Long-term borrowings - 3,126,200,000.00
Provisions 85,230,299.84 62,863,096.83
Deferred Income 122,455,935.44 162,018,728.45
Other non-current liabilities 560,959,368.74 1,234,739,326.10
Total non-current liabilities 768,645,604.02 4,585,821,151.38
Total liabilities 10,606,802,501.75 11,083,422,069.19
Owners’ Equity
Share capital 9,343,417,190.00 9,345,010,696.00
Capital reserves 4,770,210,334.16 4,064,833,739.52
Less: Treasury shares 1,121,918,737.47 2,148,273,864.36
Surplus reserves 4,672,505,348.00 4,672,505,348.00
Retained earnings 31,327,891,058.77 25,196,894,651.27
Total owners' equity 48,992,105,193.46 41,130,970,570.43
Total liabilities and owners'
59,598,907,695.21 52,214,392,639.62
equity
205
Hikvision 2020 Annual Report
For the reporting period from January 1st 2020 to December 31st 2020
Consolidated Income Statement
Unit: RMB
Amount for the Amount for the prior
Item Notes
current period period
I. Total operating income (V)43 63,503,450,891.78 57,658,110,065.22
Less：Total operating costs (V)43 33,957,697,857.73 31,140,176,777.12
Business taxes and surcharges (V)44 416,263,349.55 417,318,543.55
Selling expenses (V)45 7,377,790,744.58 7,256,781,486.68
Administrative expenses (V)46 1,790,013,088.76 1,822,464,442.07
Research and Development (R&D) (V)47
6,378,651,762.42 5,483,811,698.36
expenses
Financial expenses (V)48 396,254,772.56 (640,068,177.19)
Including：Interest expenses 202,415,502.10 192,739,975.98
Interest income 719,662,082.74 699,779,882.35
Add: Other Income (V)49 2,303,581,705.81 1,892,323,306.29
Investment income (V)50 169,277,048.95 36,649,237.09
Including: Investment gains in
associated enterprise and joint-venture 6,361,388.74 7,743,476.93
enterprise
Gains from changes in fair values (V)51 85,458,209.54 15,321,889.63
Credit impairment losses (V)52 (185,940,325.74) (222,009,426.18)
Impairment losses of assets (V)53 (363,109,513.99) (197,891,311.27)
Asset disposal income 628,505.02 5,535,663.32
II. Operating profit 15,196,674,945.77 13,707,554,653.51
Add: Non-operating income (V)54 99,273,303.50 65,032,501.54
Less: Non-operating expenses (V)55 22,976,971.41 17,124,407.28
III. Total profit 15,272,971,277.86 13,755,462,747.77
Less: Income tax expenses (V)56 1,594,651,805.69 1,290,278,445.12
IV. Net profit 13,678,319,472.17 12,465,184,302.65
4.1 Classification by continuous operation
(a) Net profit on continuous operation 13,678,319,472.17 12,465,184,302.65
(b) Net loss on terminated operation - -
4.2 Classification by attribution of
ownership
(a) Profit or loss attributable to minority
292,792,758.02 50,596,612.20
shareholders
(b) Net profit attributable to owners of
13,385,526,714.15 12,414,587,690.45
parent company
V. Other comprehensive income, net of income (34,145,243.17) (4,658,993.77)
(V)40
tax
Other comprehensive income attributable to owners
(31,452,779.95) (3,964,795.89)
of the Company, net of tax
(I) Items that will not be reclassified subsequently
- -
to profit or loss
(II) Other comprehensive income to be
(31,452,779.95) (3,964,795.89)
reclassified to profit or loss in subsequent periods
206
Hikvision 2020 Annual Report
Amount for the Amount for the prior
Item Notes
current period period
1. Exchange differences arising on conversion of
financial statements denominated in foreign (31,452,779.95) (3,964,795.89)
currencies
Other comprehensive income attributable to
(2,692,463.22) (694,197.88)
minority interests, net of tax
VI. Total comprehensive income 13,644,174,229.00 12,460,525,308.88
Total comprehensive income attributable to owners
13,354,073,934.20 12,410,622,894.56
of the parent company
Total comprehensive income attributable to
290,100,294.80 49,902,414.32
minority shareholders
VII. Earnings per share
(I) Basic earnings per share (XVI)2 1.445 1.343
(II) Diluted earnings per share (XVI)2 1.444 1.343
207
Hikvision 2020 Annual Report
For the reporting period from January 1st 2020 to December 31st 2020
Income statement of the parent company
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Total operating income (XV)4 26,311,987,347.40 25,712,466,601.80
Less: Total operating Cost (XV)4 7,177,407,215.45 7,728,486,855.67
Business taxes and surcharges 293,578,888.80 274,273,500.24
Selling expenses 2,854,822,255.21 3,101,749,832.98
Administrative expenses 783,395,117.26 725,281,640.65
Research and Development (R&D) expenses 4,554,003,406.39 4,012,212,610.85
Financial expenses (278,380,172.69) (506,021,681.46)
Including : Interest expenses 85,828,434.69 107,400,998.19
Interest income 527,732,109.92 579,879,330.28
Add: Other income 1,847,575,953.90 1,542,338,077.01
Investment income (XV)5 1,095,486,482.55 25,026,089.44
Including: Investment gains in
associated enterprise and joint-venture 13,424,897.92 5,089,008.14
enterprise
Gains from changes in fair values 69,478,784.83 17,547,234.44
Credit impairment gains (losses) (35,765,705.73) 656,135,180.29
Gains on asset impairment 2,397,952.77 51,593,292.77
Asset disposal income 16,966.03 4,072,096.18
II. Operating profit 13,906,351,071.33 12,673,195,813.00
Add: Non-operating income 18,924,477.37 17,287,915.50
Less: Non-operating expenses 4,678,775.95 8,974,800.59
III. Total profit 13,920,596,772.75 12,681,508,927.91
Less: Income tax expenses 1,249,208,332.25 999,092,917.90
IV. Net profit 12,671,388,440.50 11,682,416,010.01
V. Other comprehensive income, net of income tax - -
VI. Total comprehensive income 12,671,388,440.50 11,682,416,010.01
208
Hikvision 2020 Annual Report
For the reporting period from January 1st 2020 to December 31st 2020
Consolidated Cash Flow Statement
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Cash flows from operating activities:
Cash received from sale of goods or rendering of services 68,169,017,614.45 59,405,106,132.63
Receipts of tax refunds 3,274,552,890.75 3,084,090,410.43
Other cash receipts relating to operating activities (V)57(1) 1,427,590,353.65 1,989,547,720.88
Sub-total of cash inflows from operating activities 72,871,160,858.85 64,478,744,263.94
Cash payments for goods purchased and services received 37,257,220,824.09 37,422,764,103.72
Cash paid to and on behalf of employees 10,247,824,582.96 8,934,696,624.52
Payments of various types of taxes 4,901,863,280.18 5,192,433,698.75
Other cash payments relating to operating activities (V)57(2) 4,376,095,604.95 5,161,129,665.81
Sub-total of cash outflows from operating activities 56,783,004,292.18 56,711,024,092.80
Net Cash flows from Operating Activities (V)58(1) 16,088,156,566.67 7,767,720,171.14
II. Cash flows from Investing Activities:
Cash receipts from recovery of investments 1,693,378,691.26 548,141,227.41
Cash receipts from investment income 150,000,000.00 17,355,010.13
Net cash receipts from disposals of fixed assets, intangible assets and
14,793,178.49 85,339,813.21
other long-term assets
Other cash receipts relating to investing activities (V)57(3) 46,196,873.80 17,234,624.45
Sub-total of cash inflows from investing activities 1,904,368,743.55 668,070,675.20
Net cash paid to aquire subsidiaries and other business units (V)58(2) 48,918,168.58 16,095,782.07
Cash payments to acquire or construct fixed assets, intangible assets
2,003,628,270.01 1,927,278,918.86
and other long-term assets
Cash paid to acquire investments 2,405,456,262.23 644,715,663.25
Other cash payments relating to investing activities (V)57(4) 1,000,000.00 2,968,783.82
Sub-total of cash outflows from investing activities 4,459,002,700.82 2,591,059,148.00
Net cash flows from Investing Activities (2,554,633,957.27) (1,922,988,472.80)
III. Cash flows from financing activities:
Cash receipts from capital contributions 173,897,986.67 123,530,000.00
Including: cash receipts from capital contributions from minority
173,897,986.67 123,530,000.00
owners of subsidiaries
Cash receipts from borrowings 5,883,973,583.25 9,492,281,861.82
Cash receipts from issuance of bonds and SCP 999,500,000.00 -
Sub-total of cash inflows from financing activities 7,057,371,569.92 9,615,811,861.82
Cash repayments of borrowings 4,834,813,277.12 9,305,661,321.88
Cash payments for distribution of dividends or profits or settlement of
6,704,954,160.69 5,754,605,713.66
interest expenses
Including : Dividends and profits paid by subsidiaries to minority
40,000,000.00 2,100,000.00
shareholders
Other cash payments relating to financing activities (V)57(5) 77,707,417.35 26,897,116.20
Sub-total of cash outflows from financing activities 11,617,474,855.16 15,087,164,151.74
Net cash flows from Financing Activities (4,560,103,285.24) (5,471,352,289.92)
IV. Effect of foreign exchange rate changes on Cash and Cash
(464,249,454.25) 111,276,866.09
Equivalents
V. Net Increase in Cash and Cash Equivalents (V)58(1) 8,509,169,869.91 484,656,274.51
Add: Opening balance of Cash and Cash Equivalents (V)58(1) 26,515,668,008.40 26,031,011,733.89
VI. Closing Balance of Cash and Cash Equivalents (V)58(3) 35,024,837,878.31 26,515,668,008.40
209
Hikvision 2020 Annual Report
For the reporting period from January 1st 2020 to December 31st 2020
Cash Flow Statements of the parent company
Unit: RMB
Amount for the Amount for the
Item Notes
current period prior period
I. Cash flows from Operating Activities::
Cash receipts from the sale of goods and the rendering of services 30,589,118,989.08 20,043,914,998.81
Receipts of tax refunds 1,609,506,273.14 1,364,269,467.87
Other cash receipts relating to operating activities 728,754,897.93 880,611,125.32
Sub-total of cash inflows from operating activities 32,927,380,160.15 22,288,795,592.00
Cash payments for goods acquired and services received 8,265,995,701.20 8,911,851,425.42
Cash payments to and on behalf of employees 5,227,053,043.52 4,809,105,203.79
Payments of various types of taxes 3,096,614,910.29 3,547,737,881.19
Other cash payments relating to operating activities 1,827,804,822.26 2,273,874,546.47
Sub-total of cash outflows from operating activities 18,417,468,477.27 19,542,569,056.87
Net Cash flows from Operating Activities (XV)8(1) 14,509,911,682.88 2,746,226,535.13
II. Cash flows from Investing Activities:
Cash receipts from recovery of investments 6,450,064.33 33,241,636.07
Cash receipts from investment income 210,000,000.00 18,757,220.31
Net cash receipts from disposals of fixed assets, intangible assets and
22,605,893.13 92,098,125.61
other long-term assets
Cash receipts from disposal of subsidiaries and other business units 848,151,116.16 -
Other cash receipts relating to investing activities 44,165,378,335.06 16,718,160,478.21
Sub-total of cash inflows from investing activities 45,252,585,408.68 16,862,257,460.20
Cash payments to acquire or construct fixed assets, intangible assets and
446,640,144.49 513,878,473.24
other long-term assets
Cash payments to acquire investments 1,572,003,054.15 633,438,441.87
Other cash payments relating to investing activities 43,940,319,202.39 17,142,547,258.27
Sub-total of cash outflows from investing activities 45,958,962,401.03 18,289,864,173.38
Net Cash flows from Investing Activities (706,376,992.35) (1,427,606,713.18)
III. Cash flows from Financing Activities
Cash receipts from borrowings 2,480,000,000.00 7,279,240,000.00
Cash receipts from issuance of bonds and SCP 999,500,000.00 -
Other cash receipts relating to financing activities 6,971,777,752.17 7,534,930,948.45
Sub-total of cash inflows from financing activities 10,451,277,752.17 14,814,170,948.45
Cash repayments of borrowings 4,049,244,293.61 5,372,727,888.37
Cash payments for distribution of dividends or profits or settlement of
6,547,520,501.67 5,679,184,068.78
interest expenses
Other cash payments relating to financing activities 6,910,848,212.28 7,471,674,598.52
Sub-total of cash outflows from financing activities 17,507,613,007.56 18,523,586,555.67
Net Cash flows from Financing Activities (7,056,335,255.39) (3,709,415,607.22)
IV. Effect of foreign exchange rate changes on Cash and Cash Equivalents (138,534,267.16) 47,889,908.40
V. Net increase (decrease) in cash and cash equivalents (XV)8(1) 6,608,665,167.98 (2,342,905,876.87)
Add: Opening balance of cash and cash equivalents (XV)8(1) 16,656,028,410.72 18,998,934,287.59
VI. Closing Balance of Cash and Cash Equivalents (XV)8(2) 23,264,693,578.70 16,656,028,410.72
210
Hikvision 2020 Annual Report
st
At December 31 2020
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
Amount for 2020
Owner’s equity attributable to the parent company
项目 Other Total owners'
Less: Treasury Minority interests
Share capital Capital reserves comprehensive Surplus reserve Retained profits equity
share
income
I. Opening balance of
9,345,010,696.00 4,126,943,698.96 2,148,273,864.36 (53,541,146.99) 4,672,505,348.00 28,961,389,145.22 568,825,008.31 45,472,858,885.14
the current period
II. Increase or decrease -
(1,593,506.00) 1,051,833,763.13 (1,026,355,126.89) (31,452,779.95) 6,845,134,681.15 116,607,230.18 9,006,884,515.40
in the current period
(I) Total comprehensive -
- - - (31,452,779.95) 13,385,526,714.15 290,100,294.80 13,644,174,229.00
income
(II) Owners’ contributions - - - (135,943,064.62)
(1,593,506.00) 1,051,833,763.13 (925,020,534.09) 1,839,317,726.60
and reduction in capital
1. Capital contribution - - - - - 173,897,986.67
- 173,897,986.67
from shareholders
2. Share-based payment - - - - -
recognized in owners’ 752,504,023.39 65,602,599.80 818,106,623.19
equity
3. Others (1,593,506.00) 299,329,739.74 (925,020,534.09) - - - (375,443,651.09) 847,313,116.74
(III) Profit distribution - - (101,334,592.80) - - (6,540,392,033.00) (37,550,000.00) (6,476,607,440.20)
1. Transfer to surplus - - - - -
- - -
reserves
2. Distributions to - -
- - (101,334,592.80) (6,540,392,033.00) (37,550,000.00) (6,476,607,440.20)
shareholders
3. Others - - - - - - - -
III. Closing balance of
9,343,417,190.00 5,178,777,462.09 1,121,918,737.47 (84,993,926.94) 4,672,505,348.00 35,806,523,826.37 685,432,238.49 54,479,743,400.54
the current period
211
Hikvision 2020 Annual Report
At December 31 2020 st
Consolidated Statement of Changes in Owners' Equity-continued
Unit: RMB
Amount for 2019
Owner’s equity attributable to the parent company
Item Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained profits interests equity
share
income
I. Closing balance of the prior year 9,227,270,473.00 1,956,139,660.52 364,984,759.94 (49,576,351.10) 4,460,712,358.45 22,360,593,257.53 373,981,737.96 37,964,136,376.42
Add: Business merger under common control - - - - - (736,986.11) (491,324.07) (1,228,310.18)
II. Opening balance of the current period 9,227,270,473.00 1,956,139,660.52 364,984,759.94 (49,576,351.10) 4,460,712,358.45 22,359,856,271.42 373,490,413.89 37,962,908,066.24
III. Increase or decrease in the current
117,740,223.00 2,170,804,038.44 1,783,289,104.42 (3,964,795.89) 211,792,989.55 6,601,532,873.80 195,334,594.42 7,509,950,818.90
period
(I) Total comprehensive income - - - (3,964,795.89) - 12,414,587,690.45 49,902,414.32 12,460,525,308.88
(II) Owners’ contributions and reduction 147,532,180.10
117,740,223.00 2,170,804,038.44 1,885,322,227.42 - - - 550,754,214.12
in capital
1. Capital contribution from 123,530,000.00
121,195,458.00 1,936,703,418.84 2,057,898,876.84 - - - 123,530,000.00
shareholders
2. Share-based payment recognized in
- 257,542,500.80 - - - - 10,767,293.62 268,309,794.42
owners’ equity
3. Amount formed by business - - - - - -
combination not under common 13,234,886.48 13,234,886.48
control
4. Others (3,455,235.00) (23,441,881.20) (172,576,649.42) - - - - 145,679,533.22
(III) Profit distribution - - (102,033,123.00) - 211,792,989.55 (5,813,054,816.65) (2,100,000.00) (5,501,328,704.10)
1. Transfer to surplus reserves - - - - 211,792,989.55 (211,792,989.55) - -
2. Distributions to shareholders - - (102,033,123.00) - - (5,601,261,827.10) (2,100,000.00) (5,501,328,704.10)
3. Others - - - - - - - -
IV. Closing balance of the current period 9,345,010,696.00 4,126,943,698.96 2,148,273,864.36 (53,541,146.99) 4,672,505,348.00 28,961,389,145.22 568,825,008.31 45,472,858,885.14
212
Hikvision 2020 Annual Report
At December 31 2020 st
Statement of Changes in Owners' Equity of the parent company
Unit: RMB
Amount for 2020
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained profits Total owners' equity
I. Closing balance of the prior year 9,345,010,696.00 4,064,833,739.52 2,148,273,864.36 4,672,505,348.00 25,196,894,651.27 41,130,970,570.43
II. Increase or decrease in the current period (1,593,506.00) 705,376,594.64 (1,026,355,126.89) - 6,130,996,407.50 7,861,134,623.03
(I) Total comprehensive income - - - - 12,671,388,440.50 12,671,388,440.50
(II) Owners’ contributions and reduction (925,020,534.09)
(1,593,506.00) 705,376,594.64 - - 1,628,803,622.73
in capital
1. Capital contribution from
- - - - - -
shareholders
2. Share-based payment
- 717,200,505.99 - - - 717,200,505.99
recognized in owners’ equity
3. Others (1,593,506.00) (11,823,911.35) (925,020,534.09) - - 911,603,116.74
(III) Profit distribution - - (101,334,592.80) - (6,540,392,033.00) (6,439,057,440.20)
1.Transfer to surplus reserve - - - - - -
2.Distributions to shareholders - - (101,334,592.80) - (6,540,392,033.00) (6,439,057,440.20)
3. Others - - - - - -
III. Closing balance of the current period 9,343,417,190.00 4,770,210,334.16 1,121,918,737.47 4,672,505,348.00 31,327,891,058.77 48,992,105,193.46
213
Hikvision 2020 Annual Report
At December 31 2020 st
Statement of Changes in Owners' Equity of the parent company-continued
Unit: RMB
Amount for 2019
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained profits Total owners' equity
I. Closing balance of the prior year 9,227,270,473.00 1,883,262,407.46 364,984,759.94 4,460,712,358.45 19,327,533,457.91 34,533,793,936.88
II. Increase or decrease in the current period 117,740,223.00 2,181,571,332.06 1,783,289,104.42 211,792,989.55 5,869,361,193.36 6,597,176,633.55
(I) Total comprehensive income - - - - 11,682,416,010.01 11,682,416,010.01
(II) Owners’ contributions and reduction
117,740,223.00 2,181,571,332.06 1,885,322,227.42 - - 413,989,327.64
in capital
1. Capital contribution from
121,195,458.00 1,936,703,418.84 2,057,898,876.84 - - -
shareholders
2. Share-based payment
- 268,309,794.42 - - - 268,309,794.42
recognized in owners’ equity
3. Others (3,455,235.00) (23,441,881.20) (172,576,649.42) - - 145,679,533.22
(III) Profit distribution - - (102,033,123.00) 211,792,989.55 (5,813,054,816.65) (5,499,228,704.10)
1.Transfer to surplus reserve - - - 211,792,989.55 (211,792,989.55) -
2.Distributions to shareholders - - (102,033,123.00) - (5,601,261,827.10) (5,499,228,704.10)
3. Others - - - - - -
III. Closing balance of the current period 9,345,010,696.00 4,064,833,739.52 2,148,273,864.36 4,672,505,348.00 25,196,894,651.27 41,130,970,570.43
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Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
I. Basic Information about the Company
Hangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as "Company" or "the Company" or
“Hikvision”), is a Sino-foreign equity joint venture company, formerly known as "Hangzhou Hikvision Digital
Technology Ltd", established on November 30th 2001 in Hangzhou upon the approval letter of Hangzhou High-tech No.
604 [2001] issued by Hangzhou High-tech Industrial Development Zone Management Committee. On June 25th 2008,
with approval of document No. 598 [2008] issued by the MOFCOM (The Ministry of Commerce of the People's
Republic of China), the company was renamed as “Hangzhou Hikvision Digital Technology Co., Ltd.”, headquartered in
Hangzhou, and obtained the business license of enterprise No.91330000733796106P. On May 28th 2010, the Company
was listed on the Shenzhen Stock Exchange.
On June 26th 2019, authorized by the Company’s first Extraordinary General Meeting in 2014, the Company
completed procedures of repurchase and cancellation of some of the 509,625 restricted stocks that did not meet the
incentive conditions, and the total share capital of the Company was adjusted to 9,347,956,306 shares.
On September 3rd 2019, authorized by the Company’s second Extraordinary General Meeting in 2016, the Company
completed procedures of repurchase and cancellation of some of the 2,945,610 restricted stocks that did not meet the
incentive conditions, and the total share capital of the Company was adjusted to 9,345,010,696 shares.
On December 17th 2020, authorized by the Company’s second Extraordinary General Meeting in 2016, the Company
completed procedures of repurchase and cancellation of some of the 1,593,506 restricted stocks that did not meet the
incentive conditions, and the total share capital of the Company was adjusted to 9,343,417,190 shares. Please refer to Note
(V)-37 for share capital details.
As of December 31st 2020, the Company’s total registered capital is RMB 9,343,417,190, with total capital shares of
9,343,417,190 shares (face value RMB 1 per share), of which restricted A-shares were 1,248,025,260 shares, A-shares
without restriction are 8,095,391,930 shares.
The Company is engaged in other electronic equipment manufacturing business under electronics industry. Business
scope of the Company includes development and production of electronic products (including explosion-proof electrical
products, tele-communication equipment and its ancillary equipment, multimedia equipment), transmission and display
equipment, fire protection and control products, big data and IoT software and hardware products, aircraft, robot,
intelligent equipment and intelligent system, real-time communication system, auto parts and accessories, and electrical
signal equipment for vehicle, and servers and supporting hardware and software products ; sales of self-manufactured
products; technical service, electronic technology consulting service, training service (excluding class training), electronic
equipment installation, electronic engineering, and design, construction and maintenance of intelligent systems. For details
about business scope of the Company and its subsidiaries, please refer to Note (VII) 1.
The Company’s and consolidated financial reports were approved for issuance by the 2nd meeting of the 5th session
Board of Directors of the Company on April 15th 2021.
For consolidation scope of the financial statements of the current fiscal year, please refer to Note (VII) “Interest in
other entities”. For changes in consolidation scope of the financial statements during the current fiscal year, please refer
to “changes in the consolidation scope” in Note (VI).
II. Basis of preparation of financial statements
Basis of preparation of financial statements
The Company and its subsidiaries (hereinafter referred to as "the Group") have adopted the Accounting Standards for
Business Enterprises ("ASBE") and relevant provisions issued by the Ministry of Finance ("MoF"). In addition, the Group
215
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
has disclosed relevant financial information in accordance with Information Disclosure and Presentation Rules for
Companies Offering Securities to the Public No. 15－ General Provisions on Financial Reporting (revised in 2014).
Going concern
The Group has evaluated its going concern for 12 months going forward starting from December 31st 2020, and there is
no factor that may cast significant doubt on the entity's ability to continue as a going concern. Therefore, the financial
statements have been prepared on a going concern basis.
Bookkeeping base and valuation principles
The Group measures the accounting elements in accordance with the accrual accounting basis. Except certain financial
instruments are measured by fair value, these financial statements are prepared in accordance with the measurements basis
of historical costs. If the asset decreases in value, the provision for impairment of assets should be made according to
relevant regulations.
According to the historical cost measurement, the assets shall be measured as per the amount of cash or cash equivalent
paid at the time of purchase, or the fair value of consideration paid for the purchase of such assets. The liabilities shall be
measured in accordance with the amount of funds or assets actually received when undertaking current obligations, or the
contract amount when undertaking the current obligations, or the amount of cash or cash equivalents required for paying
back the debts in daily activities.
The fair value is a price received by the market participants from selling asset or transferring liability during orderly
transaction at the measurement date. No matter the fair value is observable or estimated by using valuation technique, the
measured and disclosed fair value in the financial statement shall be determined on this basis.
When measuring non-financial assets at fair value, the assets shall be measured considering the ability of market
participants to use the assets for optimal use to generate economic benefits, or to sell the assets to other market participants
to use the assets for optimal use to generate economic benefits.
For the financial assets measured with transaction price at the initial recognition, and the use of valuation techniques
involving unobservable inputs in the subsequent fair value measurement, the valuation technique is corrected in the
valuation process in order to make the initial recognition results confirmed by valuation techniques equal to the transaction
price.
Based on the observable extent of the input value of the fair value, and the importance of such input value to the fair value
measurement, the fair value measurement is divided into three levels:
Level 1: The input value is the unadjusted offer of the same assets or liabilities on active market acquired on measurement
date;
Level 2: The input value is the input value of relevant assets or liabilities observable directly or indirectly in addition to
level 1 input value;
Level 3: The input value is the non-observable input value of relevant assets or liabilities.
III. Significant accounting policies and accounting estimates
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Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
1. Statement for Compliance with Accounting Standards for Business Enterprises (ASBE)
The financial statements of the Company have been prepared in accordance with ASBE, and present truly and completely,
the Company's and consolidated financial position as of December 31st 2020; and the Company's and consolidated results
of operations, the Company’s and consolidated changes in shareholders' equity, and the Company’s and consolidated cash
flows for the year of 2020.
2. Accounting Period
The Group has adopted the calendar year as its accounting year from January 1st to December 31st each year.
3. Business Cycle
The business cycle refers to the period from purchase of assets used for processing to realization of cash or cash equivalents.
The Group business cycle is usually 12 months.
4. Functional currency
Renminbi (“RMB”) is the currency in the primary economic environments in which the Company and its domestic
subsidiaries are operated. The Company and its domestic subsidiaries take RMB as their functional currency. Overseas
subsidiaries of the Company determine their functional currency on the basis of the primary economic environment in
which it operates. For functional currency of overseas subsidiaries of the Company, see Note (V) 60. The Group adopts
RMB to prepare its financial statements.
5. The accounting treatment of business combinations involving enterprises under common control and business
combinations not involving enterprises under common control
Business combinations are classified into business combinations involving enterprises under common control and business
combinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and
that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entities
at the date of the combination. The difference between the carrying amount of the net assets obtained and the carrying
amount of the consideration paid for the combination is adjusted to the share premium in capital reserve. If the share
premium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
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Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
A business combination not involving enterprises under common control is a business combination in which all of the
combining enterprises are not ultimately controlled by the same party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred
or assumed, and equity securities issued by the acquirer in exchange for control of the acquiree. If a business combination
not under the common control is realized step by step through multiple transactions, the cost of the combination is the sum
of the consideration paid on the purchase date and the fair value of the equity of the purchasee already held before the
purchase date on the purchase date. The intermediary expenses incurred by the acquirer in respect of auditing, legal
services, valuation and consultancy services, etc. and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The acquiree’s identifiable assets, liabilities and contingent liabilities, acquired by the acquirer in a business combination,
that meet the recognition criteria shall be measured at fair value at the acquisition date.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. Where the
cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer
firstly reassesses the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remaining difference
immediately into profit or loss for the current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presented
separately in the consolidated financial statements.
6. Preparation method of consolidated financial statements
6.1 Preparation method of consolidated financial statements
The scope of consolidated financial statements shall be confirmed based on the control. Control right means that an
investor may control an investee; the investor may participate in relevant activities of the investee to obtain variable
rewards and also be able to use the control rights for the investee to influence its amount of returns. The Group will re-
evaluate, if the change of the relevant facts and circumstances leading to the change of the relevant elements involved in
the above definition of control.
The merger of subsidiary starts from the Group obtaining the control power of the subsidiary, and terminates when the
Group loses the control power of the subsidiary.
As for subsidiaries disposed by the Group, operating results and cash flows prior to the disposal date (the date of losing
control right) have been properly included in the consolidated profit statement and consolidated cash flow statement.
218
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
For a subsidiary acquired through a business combination not involving enterprises under common control, the operating
results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income
statement and consolidated statement of cash flows.
No matter when the business combination occurs in the reporting period, subsidiaries acquired through a business
combination involving enterprises under common control are included in the Group's scope of consolidation as if they had
been included in the scope of consolidation from the date when they first came under the common control of the ultimate
controlling party. Their operating results and cash flows from the beginning of the earliest reporting period are included
in the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the
uniform accounting policies and accounting periods set out by the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as minority interests and presented as
"minority equity" in the consolidated balance sheet. The portion of net profits or losses of subsidiaries for the period
attributable to minority interests is presented as "minority interests" in the consolidated income statement below the "net
profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority
shareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amount are still allocated
against minority interests.
Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the loss of control over the
subsidiary is accounted for as equity transactions. The carrying amounts of the total owners' equity attributable to owner
of the Company and minority equity are adjusted to reflect the changes in their relative interests in the subsidiary. The
difference between the amount by which the minority interests are adjusted and the fair value of the consideration paid or
received is adjusted to capital reserve under owners' equity. If the capital reserve is not sufficient to absorb the difference,
the excess is adjusted against retained earnings.
In the case that the equity of the acquiree is obtained through multiple deals step by step to finally form the business
combination not under the common control, the business combination shall be handled differently based on whether it is
"package deal": where it is package deal, the Company accounts each deal as a deal to obtain the control. If the deal is not
a "package deal", a deal where the control is obtained on the acquisition date will be subject to accounting. The acquiree's
equity held before the acquisition date will be remeasured based on the fair value of the equity on the acquisition date and
the difference between the fair value and book value will be included in the profit or loss in the current period. If the
acquiree's equity held before the acquisition date involves any changes in the other comprehensive income or in any other
owner's equity accounted by the equity method, such equity changes will be converted into the profit or loss in the current
period on the acquisition date.
7. Joint arrangement classification and joint operation accounting
219
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Joint arrangements include joint operation and joint ventures. Such classification is defined based on the rights and
obligations of the joint parties in the joint arrangement, taking into account the structure and legal form of such
arrangement and also the contractual provisions. Joint operation refers to a joint arrangement where the joint venture is
entitled to assets related to this arrangement and bear liabilities related to this arrangement. Joint ventures mean that joint
venture parties are merely entitled to joint venture arrangements of net assets of such arrangements.
The Groups investment in any joint venture is accounted by the equity method. See the details in Note (III) "15.3.2 Long-
term equity investment accounted under the equity method".
The Group confirms its assets held separately according to the arrangement of joint operation and those held jointly in
proportion to the Group's share; confirms its liabilities held separately and those held jointly in proportion to the Group's
share ; confirms its revenue from the sale of its share of the output arising from the joint operation; confirms its share of
the revenue from the sale of the output by the joint operation; confirms the expenses incurred by the Group alone and the
expenses incurred by the joint operation corresponding to the share of the Group therein. The assets, liabilities, revenues
and expenses related to the joint operation are accounted and confirmed by the Group in accordance with the regulations
applicable to specific assets, liabilities, revenues, and expenses.
8. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group's
short-term (Generally refers to due within three months from the purchase date), highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
9. Conversion of transactions and financial statements denominated in foreign currencies.
9.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying an exchange rate that approximates the
actual spot exchange rate on the date of transaction; The exchange rate that approximates the actual spot exchange rate on
the date of transaction is calculated according to the middle price of market exchange rate at the beginning of the month
in which the transaction happened.
At the balance sheet date, foreign currency monetary items are translated into [RMB] using the spot exchange rates at the
balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the
balance sheet date and those on initial recognition or at the previous balance sheet date are recognized in profit or loss for
the period, except for exchange differences related to a specific-purpose borrowing denominated in foreign currency that
qualify for capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period.
When the consolidated financial statements include foreign operation(s), if there is foreign currency monetary item
constituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates are
recognized as "exchange differences arising on conversion of financial statements denominated in foreign currencies " in
other comprehensive income, and in profit and loss for the period upon disposal of the foreign operation.
220
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Foreign currency non-monetary items measured at historical cost are converted to the amounts in functional currency at
the spot exchange rates on the dates of the transactions. Foreign currency non-monetary items measured at fair value are
re-converted at the spot exchange rate on the date the fair value is determined. Difference between the re-converted
functional currency amount and the original functional currency amount is treated as changes in fair value (including
changes of exchange rate) and is recognized in profit and loss or as other comprehensive income.
9.2 Conversion of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation are
converted from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet are
translated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items are converted at the
spot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflecting
the distribution of profits are translated at exchange rates that approximate the actual spot exchange rates on the dates of
the transactions; The difference between the converted assets and the aggregate of liabilities and shareholders' equity items
is recognized into other comprehensive income and shareholders’ equity.
The foreign currency cash flows and cash flows of overseas subsidiaries adopt the exchange rate similar to the spot rate at
the date of cash flows for conversion. The affected amount of cash and cash equivalents due to the change of exchange
rate, as an adjustment item, shall be separately listed as "the impact of cash and cash equivalents due to the change of
exchange rate" in the cash flow statement.
The closing balances of the prior year and the actual amount of the prior year are presented at the converted amounts of
the prior year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over a foreign operation due to
disposal of certain interest in it or other reasons, the Group transfers the accumulated exchange differences arising on
conversion of financial statements of this foreign operation attributable to the owners' equity of the Company and presented
under shareholders' equity, to profit or loss in the period in which the disposal occurs.
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation, but only a
decrease in proportion of overseas business interests, the proportionate share of accumulated exchange differences arising
on conversion of financial statements are re-attributed to minority interests and are not recognized in profit and loss under
current period. For partial disposals of equity interests in foreign operations, which are associates or joint ventures, the
proportionate shares of the accumulated exchange differences arising on conversion of financial statements of foreign
operations is reclassified to profit or loss under current period.
10. Financial Instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to a contract of financial instrument.
For the purchase or sale of a financial asset in conventional manner, the asset to be received and the liability to be assumed
will be recognized on the trading day, or the asset sold will be derecognized on the trading day.
221
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Financial assets and financial liabilities are measured by fair value upon initial recognition. For financial assets and
financial liabilities at fair value through profit and loss, the relevant trading costs will be directly charged to profit and loss
of the current period. For other types of financial assets and financial liabilities, the relevant trading costs will be booked
into the initial recognition amount. Upon initial recognition of accounts receivable which have no material financing
components or have not taken into consideration the financing components in contracts with a term not exceeding one
year according to Accounting Standards for Business Enterprise No. 14 – Revenue (“Revenue Standard”), such initial
amount is measured by the transaction price as defined under the Revenue Standard.
Effective interest rate method refers to the method of calculating the amortized cost of financial asset or financial liability
and apportioning interest income or interest expenses to each accounting period.
Effective interest rate refers to the interest rate used for discounting the estimated future cash flows of a financial asset or
a financial liability for an expected subsisting period into the balance of book value of the financial asset or the amortized
cost of the financial liability. When determining the effective interest rate, the expected cash flows are estimated on the
basis of considering all contractual terms of the financial asset or financial liability (such as early repayment, extended
term, call option or other similar option) but without considering the expected credit loss.
The amortized cost of a financial asset or a financial liability refers to the initial recognition amount of such financial asset
or financial liability, less the repaid amount of principal, plus or minus the accrued amortized amount calculated by
amortization of the difference between the initial recognition amount and the amount on maturity by using the effective
interest rate method, and then deducts the accrued provision for losses (only applicable to financial assets).
10.1 Classification, Confirmation and Measurement of Financial Assets
After initial recognition, the Group will adopt amortized cost, fair value through other comprehensive income, or fair value
through profit and loss for subsequent measurement depending on different categories of financial assets.
The Group will classify a financial asset into a financial asset measured at amortized cost if the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding and the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows. Financial assets classified by the Group as financial asset measured by amortized
cost include cash and cash equivalents, notes receivables and accounts receivable, other receivables (except for tax refund
receivable) and long-term receivables.
The Group will classify a financial asset into a financial asset measured by fair value through other comprehensive income
if the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding, and the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling the financial assets. This category of financial assets
mainly includes financial assets with a maturity of more than one year from the date of acquisition and which are presented
under other debt investments, financial assets maturing within one year (inclusive) from the balance sheet date and which
are presented under non-current assets maturing within one year, as well as the accounts receivable and notes receivable
classified as fair value at the time of acquisition and their changes are included in other comprehensive income are listed
in the receivables for financing, and for those have acquisition period within one year (including one year) are listed in
other current assets.
At the time of initial recognition, the Group may, on the basis of a single financial asset, irrevocably designate an
222
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
investment in an equity instrument held for non-trading purpose recognized or without consideration in a business merger
not under common control as a financial asset at fair value through other comprehensive income. This type of financial
assets is presented as investment in other equity instruments.
Financial assets which have satisfied one of the following conditions indicate that such financial assets are held for trading
purpose by the Group:
The purpose of acquiring the relevant financial asset is mainly for sale in recent period.
At the time of initial recognition, the relevant financial asset is a part of an identifiable portfolio of financial
instruments under collective management, and there is objective evidence showing a recent and actual existence of short-
term profitable mode.
The relevant financial assets are derivatives, excluding derivatives which satisfy the definition under financial
guarantee contracts and derivatives which are designated as effective hedging instruments.
Financial assets at fair value through profit and loss include financial assets which are classified as financial assets at fair
value through profit and loss and financial assets designated at fair value through profit and loss:
Financial assets which do not satisfy the conditions of being classified as financial assets measured at amortized cost
or as financial assets at fair value through other comprehensive income, they will be classified as financial assets at fair
value through profit and loss.
At the time of initial recognition, in order to eliminate or substantially reduce mismatch in accounting, the Group
may irrevocably designate a financial asset as a financial asset measured at fair value with changes through profit and loss.
Financial assets at fair value through profit and loss will be presented as held-for-trading financial assets. If such financial
assets have a maturity of more than one year from the balance sheet date (or without a fixed maturity) and which are
expected to be held for more than one year, they will be presented under other non-current financial assets.
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost adopt the effective interest rate method for subsequent measurement according
to amortized cost, the profit or loss when impairment occurs or upon derecognition will be accounted in profit and loss of
the current period.
The Group recognizes interest income by using effective interest rate method for financial assets measured at amortized
cost. The Group determines interest income by multiplying the balance of book value of financial assets with the effective
interest rate except under the following circumstances:
For acquired or generated financial assets which incurred credit impairment already, their interest income will be
determined by using the amortized cost of such financial asset calculated with the credit adjusted effective interest rate.
For acquired or generated financial assets which have not incurred credit impairment but incur credit impairment in
the subsequent period, the Group will determine their interest income by using the amortized cost of such financial assets
multiplied with the effective interest rate in the subsequent period. If such financial asset ceases to have credit impairment
due to improvement in credit risk in the subsequent period, then the Group should change to multiply the effective interest
rate with the balance of book value of such financial asset instead to determine the interest income.
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Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
10.1.2 Financial asset at fair value through other comprehensive income
The impairment loss or profit, or interest income calculated by using the effective interest rate method, relating to financial
asset at fair value through other comprehensive income should be accounted in the profit and loss of the current period,
and other changes in fair value of such financial assets will be accounted in other comprehensive income. The amount
charged by such financial asset to the profit and loss of each period is deemed to be equal to the amount which has been
measured by amortized cost and charged to the profit and loss of each period. Upon derecognition of such financial asset,
the accumulated profit or loss previously charged to other comprehensive income will be reversed from other
comprehensive income and charged to profit and loss of the current period.
For non-trading equity instrument investment designated at fair value through other comprehensive income, its changes
in fair value will be recognized in other comprehensive income. Upon derecognition of such financial asset, the
accumulated profit or loss charged to other comprehensive income will be reversed from other comprehensive income and
charged to retained earnings. During the period when such investment in equity instruments for non-trading purpose are
held by the Group, the right to receive dividends by the Group has been established, and economic benefits related to
dividends are likely to flow into the Group, and if the amount of dividends may be measured reliably, the dividend income
is recognized and accounted in the profit and loss of the current period.
10.1.3 Financial asset at fair value through profit and loss
For financial asset at fair value through profit and loss, subsequent measurement will be calculated at fair value, the profit
or loss arising from changes in fair value and the dividend and interest income relating to such financial asset will be
accounted in the profit and loss of the current period.
10.2 Impairment of Financial Assets
For financial assets measured at amortized cost, financial assets that are classified as financial asset at fair value through
other comprehensive income, contract assets, lease receivables, and financial guarantee contracts that do not meet the
conditions for termination of recognition due to the transfer of financial assets or continue to be involved in financial
liabilities formed by the transferred financial assets, the Group will handle impairment on the basis of expected credit loss
and recognize loss provision.
The Group’s consideration of contract assets, notes receivable and accounts receivable that are generated by transactions
regulated by revenue standards and do not contain significant financing components or that do not consider financing
components in contracts that are not more than one year old, as well as those operating lease receivables formed from
transactions that are defined by the Accounting Standards for Business Enterprises No. 21-Leasing, the loss reserve shall
be measured based on the amount of the expected credit loss during the entire duration.
For other financial instruments, other than acquired or generated financial assets which have incurred credit impairment
already, the Group will assess on each balance sheet date the changes in credit risk of the relevant financial instruments
since initial recognition. If the credit risk of such financial asset has significantly increased after initial recognition, the
Group will calculate its loss provision based on the amount equivalent to the expected credit loss for the entire subsisting
period. If the credit risk of such financial asset since initial recognition has not increased significantly, the Group will
calculate its loss provision according to the expected credit loss amount of such financial asset for the next 12 months.
The amount of increase or reversal in the provision for credit loss, apart from financial assets classified as financial asset
at fair value through other comprehensive income, is accounted in the profit and loss of the current period. For financial
asset classified as measured at fair value through other comprehensive income, the Group will recognize its credit loss
provision in other comprehensive income and charged the impairment loss or gain to the profit and loss of the current
period, and will not decrease the book value of such financial asset presented in the balance sheet.
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Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
The Group has calculated the loss provision equivalent to the expected credit loss amount for the entire subsisting period
of the financial instrument in the preceding accounting period, but at the balance sheet date of the current period, such
financial instrument is no longer under the condition of significant increase in credit risk since initial recognition, the
Group calculates the loss provision for such financial instrument on the balance sheet date of the current period according
to an amount equivalent to the expected credit loss for the next 12 months, and the resulting loss provision reversal amount
will be counted as impairment gain and booked into the profit and loss of the current period.
10.2.1 Significant increase in credit risk
The Group uses available and reasonable forward-looking information with justification, by comparing the default risk of
the financial instrument at the balance sheet date with the default risk on the initial recognition date, to confirm whether
the credit risk of the financial instrument has significantly increased after initial recognition. When using the financial
instrument impairment rules for loan commitment and financial guarantee contracts, the date when the Group becomes a
party of an irrevocable commitment is deemed as the initial recognition date.
The Group considers the following factors when assessing whether the credit risk has significantly increased:
(1) Whether a significant change has been caused to the internal price indicator due to changes in credit risk.
(2) Whether the external credit rating of financial instrument has actual or expected significant changes.
(3) Whether the actual or expected internal credit rating of the debtor has been downgraded.
(4) Whether adverse changes have occurred in the business, finance or economic conditions which are expected to cause
significant changes in the capability of the debtor to perform debt repayment obligations.
(5) Whether actual or expected significant changes have occurred in the operating results of the debtor.
(6) Whether significant adverse changes have occurred in the supervision, economic or technical environment in which
the debtor operates.
(7) Whether significant changes have occurred in the value of security pledged for the debt or the quality of guarantee
or credit enhancement provided by third parties. Such changes are expected to reduce the debtor’s economic
motivation of repayment according to contractual term or influence the probability of default.
(8) Whether significant changes have occurred in the economic motivation which will lower the expectation of
repayment by the borrower according to the contractual term.
(9) Whether significant changes have occurred in the expected performance and repayment behavior of the debtor.
Whether or not the credit risks increase significantly after the foregoing assessments, if any contractual payment for any
financial instrument that overdue for over (including) 30 days, it indicates the credit risks of that financial instrument have
increased significantly.
On the balance sheet date, if the Group determines that the financial instrument only carries low credit risks, then it assumes
that the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk of
default on financial instruments is low, the borrower is highly able to perform its contractual cash flow obligations in the
short term, and even if the economic situation and operating environment are adversely changed over a long period of time
but not necessarily reducing the borrower’s performance of its contractual cash obligations, the financial instrument is
considered as having a lower credit risk.
10.2.2 Financial assets which have incurred credit impairment already
When one or more events which will have adverse effect on the expected future cash flows from the financial asset of the
Group have occurred, such financial asset will become a financial asset which have incurred credit impairment already.
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The evidence of credit impairment occurred in a financial asset includes the following observable information:
(1) Material financial difficulties have occurred in the issuer or debtor;
(2) Breach of contract by the debtor, such as default or overdue for the payment of interest or repayment of principal;
(3) Due to economic or contractual considerations relating to financial difficulties of the debtor, the creditor has granted
concession to the debtor under no other circumstances;
(4) The debtor is likely to go bankrupt or carry out other financial restructuring;
(5) The financial difficulties of the issuer or debtor have caused the disappearance of the active market for the financial
asset;
(6) The purchase or generation of a financial asset at a large discount, such discount reflects the fact of occurrence of credit
loss.
10.2.3 Confirmation of expected credit loss
The Group’s accounts receivable, other receivables (except for tax refund receivables), contract assets, lease receivables
and long-term receivables, that are individually significant and the debtor has serious financial difficulties, are determined
on the basis of individual for its credit loss. For the remaining accounts receivable, other receivables (except for tax refund
receivables), contract assets, lease receivables and long-term receivables, an impairment matrix is used to determine the
credit losses of relevant financial instruments on a portfolio basis.The Group determines credit losses by assessing the
probability of breach and loss given default based on the credit ratings on a portfolio basis of notes receivable and
receivables. On the basis of common risk characteristics, the Group places financial instruments in different groups. The
common credit risk characteristics adopted by the Group include: financial instrument type, credit risk rating, initial
recognition date, remaining contract period, industry of debtor, geographic location of debtor, and etc.
The Group confirms the expected credit loss of the relevant financial instrument according to the following method:
In respect of a financial asset, the credit loss is the present value of the difference between the contractual cash
flow that the group should receive and the cash flow that it expects to receive.
In respect of lease receivables, the credit loss is the present value of the difference between the contractual cash
flow that the group should receive and the cash flow that it expects to receive.
In respect of a financial guarantee contrac (for specific accounting policies, please refer to Note (III), 10.4.1.2.1),
the credit loss is the present value of the difference between Group’s expected payment amount for the
compensation made to the contract holder due to the occurrence of credit loss and the amount expected to be
received by the Group from such contract holder, debtor or any other parties.
In respect of financial assets with credit impairment on the balance sheet date but they are not acquired or
generated financial assets with credit impairment, the credit loss represents the difference between the balance
of the book value of such financial asset and the present value of the estimated future cash flows discounted by
the original effective interest rate.
The factors reflected by the method used for calculating expected credit loss of financial instruments by the Group include:
an unbiased weighted average amount determined by assessing a series of probable outcomes; time value of currency;
reasonable and justifiable information relating to past events, prevailing conditions and forecast of future economic
conditions obtained on the balance sheet date without incurring unnecessary additional cost or effort.
10.2.4 Write-off on financial asset
When the Group ceases to have reasonable expectation on the possible collection of all or part of the contractual cash
flows from the financial asset, the balance of book value of such financial asset will be written off directly. Such a write-
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off constitutes a de-recognition of the relevant financial asset.
10.3 Transfer of financial asset
A financial asset that fulfills one of the following conditions will be de-recognized: (1) termination of contractual rights
to receive cash flows from the financial asset; (2) upon transfer of such financial asset and transfer of substantially all the
risks and rewards in respect of the ownership of such financial asset to the transferee; (3) upon transfer of such financial
asset, though the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership
of such financial asset, yet it has not retained the control over such financial asset.
If the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership of such
financial asset, and has retained the control over such financial asset, then such transferred financial asset will continue to
be recognized, and the relevant liabilities will continue to be recognized, according to the level of the Group’s continuous
involvement in such transferred financial asset. The relevant liabilities will be measured by the Group according to the
following method:
If the transferred financial asset is measured by amortized cost, the book value of the relevant liabilities is equivalent
to the book value of the transferred asset of continuous involvement less the amortized cost of the rights retained by the
Group (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the amortized cost of
the obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the
financial asset), and the relevant liabilities are not designated as financial liabilities at fair value through profit and loss of
the current period.
If the transferred financial asset is measured by fair value, the book value of the relevant liabilities is equivalent to
the book value of the transferred asset of continuous involvement less the fair value of the rights retained by the Group (if
the Group has retained the relevant rights due to transfer of the financial asset) and plus the fair value of the obligations
undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the financial asset), and
the fair value of the rights and obligations shall be measured at the fair value on a separate basis.
For full transfer, which satisfies the conditions of derecognition, of the financial assets, the difference between the sum of
the book value of the transferred financial assets as at the date of derecognition and the consideration received from such
transfer and the accumulated amount of change in fair value originally included in other comprehensive income, which
corresponds to the amount in respect of derecognition, shall be recognized in the profit and loss for the current period. If
the transfer of the financial assets by the Group is designated as investment in equity instrument held for non-trading
purpose measured at fair value through other comprehensive income, the accumulated gains or losses previously included
in other comprehensive income shall be transferred out from other comprehensive income and be included in retained
earnings.
For transfer in part, which satisfies the conditions of derecognition, of the financial assets, the book value of the entire
financial assets before the transfer shall be shared between the derecognized portion and the continuous recognition portion
at their respective relative fair value on the date of transfer, and the difference between the sum of the consideration
received from derecognition and the accumulated amount of change in fair value originally included in other
comprehensive income, which corresponds to the amount in respect of derecognition, and the book value of the
derecognized portion as at the date of derecognition shall be included in the profit and loss of the current period. If the
transfer of the financial assets by the Group is designated as investment in equity instrument for non-trading purpose
measured at fair value through other comprehensive income, the accumulated gains or losses previously included in other
comprehensive income shall be transferred out from other comprehensive income and be included in retained earnings.
For full transfer, which does not satisfy the conditions of derecognition, of the financial assets, the Group will continue to
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recognize the entire financial assets transferred and the consideration received as a result of the asset transfer is recognized
as a liability when received.
10.4 Classification, confirmation and measurement of financial liabilities and equity instruments
Pursuant to the contractual terms of the issued financial instruments and the substantive economic condition as reflected,
but not in legal terms only, combined with the definitions of financial liabilities and equity instruments, the Group has
classified such financial instruments or the components thereof as financial liabilities or equity instruments upon initial
recognition.
10.4.1 Classification, confirmation and measurement of financial liabilities
Financial liabilities are classified into financial liabilities at fair value through profit and loss of the current period and
other financial liabilities upon initial recognition.
10.4.1.1 Financial liabilities at fair value through profit and loss of the current period
Financial liabilities at fair value through profit and loss of the current period comprise of financial liabilities held for
trading purpose (including derivatives of financial liabilities) and financial liabilities designated as measured at fair value
through profit and loss of the current period. Except for derivatives of financial liabilities, which are presented separately,
financial liabilities at fair value through profit and loss of the current period are presented as financial liabilities held for
trading.
Financial liabilities that fulfill one of the following conditions suggest that the Group assumes such financial liabilities for
trading purpose:
Assumption of the relevant financial liabilities is mainly for the purpose of the recent repurchases.
The relevant financial liabilities, upon initial recognition, are part of a portfolio of identifiable financial instruments
under centralized management, and available objective evidence shows the recent and actual existence of a short-
term profit-making model.
The relevant financial liabilities are derivatives, except derivatives which satisfy the definition of financial guarantee
contract and derivatives designated as effective hedging instruments.
Financial liabilities can be designated, upon initial recognition, by the Group as financial liabilities at fair value through
profit and loss of the current period, provided that they have satisfied one of the following conditions: (1) such designation
can eliminate or substantially reduce accounting mismatches; (2) managing and evaluating the performance of portfolios
of financial liabilities, or portfolios of financial assets and financial liabilities, on fair value basis and reporting internally
to key personnel of the Group on this basis in accordance with the risk management or investment strategies specified in
formal written documents of the Group; (3) hybrid contracts, with embedded derivatives, have satisfied the conditions.
Financial liabilities held for trading purpose use fair value for subsequent measurement, gains or losses arise from changes
in fair value and the dividends or interest expenses relating to such financial liabilities are accounted in the profit and loss
of the current period.
For financial liabilities designated at fair value through profit and loss of the current period, changes in fair value of such
financial liabilities caused by changes in the Group’s own credit risks shall be included in other comprehensive income,
and other changes in fair value shall be included in the profit and loss of the current period. On derecognition of such
financial liabilities, the accumulated amount of changes in fair value as a result of changes in our own credit risk included
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previously in other comprehensive income shall be transferred to retained earnings. Dividends or interest expenses relating
to such financial liabilities shall be included in the profit and loss of the current period. If handling the effect of changes
in credit risk of such financial liabilities according to the aforesaid method would cause or magnify the accounting
mismatches in profit and loss, the Group will include all gains or losses of those financial liabilities (including the amount
affected by changes in their own credit risk) in the profit and losses of the current period.
10.4.1.2 Other financial liabilities
Excluding transfer of financial assets not complying with derecognition conditions, or financial liabilities as a result of
continuous involvement in transferred financial assets, as well as the financial guarantee contracts, the other financial
liabilities will be classified as financial liabilities measured at amortized cost, subsequent measurement will be based on
amortized cost, gains or losses on derecognition or amortization will be accounted in the profit and loss of the current
period.
If the Group and the counterparty have revised or renegotiated the contract, this has not resulted in the derecognition of
financial liabilities measured at amortized cost for subsequent measurement, but has caused changes in the contractual
cash flows, then the Group should recalculate the book value of such financial liabilities, and the relevant gains or losses
shall be accounted in the profit and loss of the current period. The recalculated book value of such financial liabilities will
be determined by the Group by discounting the cash flows from the renegotiated or revised contract with the original effect
interest rate of the financial liabilities. All costs or expenses incurred in the revision or renegotiation of the contract will
be reflected in the adjusted book value of financial liabilities after such revision, and will be amortized during the
remaining period of the revised financial liabilities.
10.4.1.2.1 Financial guarantee contract
Financial guarantee contract refers to a contract that requests the issuer to provide a specific amount of compensation to
the contract holder who suffers losses when a specific debtor fails to repay the debt on due date according to the initial or
revised terms of the debt instrument. In respect of financial liabilities which are not designated at fair value through profit
and loss of the current period, or in respect of financial guarantee contract for financial liabilities arising from transfer of
financial assets not complying with derecognition conditions or continuous involvement in the transferred financial assets,
the measurement after initial recognition will be based on the amount of provision for losses, or the balance of initial
recognized amount after deducting the accumulated amortized amount confirmed in accordance with the relevant
provisions of the Revenue Standard, whichever the higher.
10.4.2 Derecognition of financial liabilities
When the existing obligations of a financial liability have been wholly or partially discharged, such financial liability or
such part of it will be derecognized. When the Group (as borrower) and the lender enter into an agreement to undertake
new financial liabilities for replacing the original financial liabilities, if substantive difference exists in the contractual
terms between the new financial liabilities and the original financial liabilities, the Group should derecognize the original
financial liabilities while at the same time recognizes the new financial liabilities.
When a financial liability is wholly or partially derecognized, the difference between the book value of the derecognized
portion and the consideration paid (including non-cash asset transferred out or new financial liabilities undertaken) will
be accounted in the profit and loss of the current period.
10.4.3 Equity instrument
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Equity instrument refers to a contract which can prove the ownership of remainder interest in assets after deducting all
liabilities of the Group. The Group issues (including refinances), repurchases, sells or cancels equity instruments for
treatment of changes in equity. The Group will not recognize changes in the fair value of equity instruments. Trading
expenses relating to equity transactions will be deducted from equity.
The Group’s distribution to holder of equity instrument is treated as profit distribution, the share dividends paid out will
not affect the total equity of shareholders.
10.5 Derivatives and embedded derivatives
Derivatives include foreign exchange forward contract and foreign exchange option contract, etc. Derivatives are measured
at fair value initially on the date of signing the relevant contract and will be measured at fair value for subsequent
measurement.
For a hybrid contract constituted by an embedded derivative and a master contract, if the master contract is in respect of a
financial asset, the Group will not split the embedded derivative from the hybrid contract, but will consider such hybrid
contract as a whole unit to which the accounting standards and rules for classification of financial assets are applicable.
If the master contract included in the hybrid contract is not in respect of a financial asset, and fulfills the following
conditions at the same time, the Group will split the embedded derivative from the hybrid contract to be treated as a
separate subsisting derivative.
(1) The economic characteristics and risks of the embedded derivative are not closely connected to the economic
characteristics and risks of the master contract.
(2) A separate instrument containing the same terms as the embedded derivative fits the definition of a derivative.
(3) The hybrid contract is not measured at fair value and changes in fair value are accounted through profit and loss of
the current period.
If an embedded derivative is split from the hybrid contract, the accounting treatment adopted by the Group for the master
contract within the hybrid contract will be in accordance with the applicable accounting standards and rules. If the Group
is unable to measure the fair value of the embedded derivative reliably according to the terms and conditions of the
embedded derivative, the fair value of such embedded derivative will be determined by the difference between the fair
value of the hybrid contract and the fair value of the master contract. After adoption of the above method, if the fair value
of such embedded derivative is still unable to be measured separately on the acquisition date or subsequent balance sheet
date, the Group will designate the entire hybrid contract as a financial instrument measured at fair value through profit and
loss of the current period.
10.6 Offsetting between financial assets and financial liabilities
When the Group has legal right to offset the recognized financial assets and financial liabilities, and such legal right is
enforceable currently, while at the same time the Group plans to perform netting settlement, or to liquidate the financial
asset and repay the financial liability at the same time, the amount after offsetting between the financial asset and financial
liability will be presented in the balance sheet. Save as said above, the financial asset and financial liability are presented
separately in the balance sheet without offsetting each other.
11. Receivables for financing
Among the notes receivable measured at fair value through other comprehensive income, the ones with a term of less than
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(including) one year since they are acquired will be listed as receivables for financing; the ones with a term of more than
(including) one year since they are acquired will be listed as other debt investment. The relevant accounting policy is
explained in Note (III), 10.1, 10.2 and 10.3.
12. Inventories
12.1 Categories of inventories
The Group's inventory mainly includes finished products, products in process and raw materials held in daily activities.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other
expenditures incurred in bringing the inventories to their present location and condition.
12.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
12.3 Basis for determining net realizable value of inventories
The inventory is measured according to cost and net realizable value, whichever is lower, on the date of balance sheet.
When the net realizable value is lower than cost, withdraw inventory impairment reserves.
The net realizable value refers to the amount derived by deducting the potential cost, estimated selling expense and relative
taxes to the completion date from the estimated sales price of inventory in daily activities. When determining net realizable
value of inventories, take the obtained conclusive evidence as basis and consider the purposes of holding inventories and
influence of events after the balance sheet date.
For the low-price stocks in large quantity, provision for the inventory price drops will be made based on the categories of
stocks; for the stocks that are related to the products manufactured and sold in the same region, that have identical or
similar ultimate use or purpose and that are hard to separate from other items when being measured, they are consolidated
for provision for the inventory price drops; for other stocks, the provision for the inventory price drops will be made based
on the cost of a single stock item in excess of the net realizable value.
After provision for inventory depreciation reserves is made, if the factors resulting in the write-down of inventory
impairment have disappeared and causing the net realizable value higher than its book value, such inventory impairment
provision are recovered and reversed, and the reversed amount recorded in profits and losses of the current period.
12.4 Inventory count system
The perpetual inventory system is maintained for stock system.
12.5 Amortization method for low cost and short-lived consumable items and packaging materials
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Packaging materials and low cost and short-lived consumable items are amortized using the immediate write-off method.
13. Contract Assets
13.1 Method and standard for determination of contract assets
Contract assets refer to the Group’s right to consideration in exchange for goods or services that the Group has transferred
to a customer when that right is conditioned on something other than the passage of time. The Group’s unconditional (i.e.,
depending on the passage of time only) right to receive consideration from the customer is separately presented as
receivables.
13.2 Methods for determining and accounting of expected credit loss of contract assets
For details of methods for determining and accounting of expected credit loss of contract assets, please refer to Note (III)-
10.2 Impairment of financial instruments.
14. Assets held for sale
Non-current assets and disposal groups are classified as held for sale category when the Group recovers the book value
through a sale (including an exchange of non-monetary assets that has commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held for sale are required to satisfy the following conditions at the same
time: (1) the asset or disposal group is available for immediate sale in its present condition subject to terms that are usual
and customary for sales of such asset or disposal group; (2) the sale is highly probable, i.e. the Group has made a resolution
about a selling plan and obtained a confirmed purchase commitment and the sale is expected to be completed within one
year.
Non-current assets or disposal groups classified as held for sale are measured at the lower of the book value and the net
amount of the fair value less the cost of disposal. Where the carrying amount is higher than the net amount of fair value
less the cost of disposal, the carrying amount should be reduced to the net amount of fair value less the cost of disposal,
and such reduction is recognized as impairment loss of assets and included in profit or loss for the period. In the meantime,
provision for impairment of held-for-sale assets is made. When there is an increase in the net amount of fair value of non-
current assets held for sale less the cost of disposal at the subsequent balance sheet date, the original deduction should be
reversed from impairment loss of assets recognized after the classification as held for sale, and the reversed amount is
included in profit or loss for the period. The impairment loss of assets recognized before the classification as held for sale
is not reversed.
Non-current assets or non-current assets within disposal groups classified as held for sale are not depreciated or amortized,
and the interests and other costs of liabilities of disposal group classified as held for sale continue to be recognized.
All or part of equity investments in an associate or joint venture are classified as held-for-sale assets. For the part that is
classified as held for sale, it is no longer accounted through equity method since the date of the classification.
15. Long-term Equity Investment
15.1 Basis for determining joint control and significant influence over investee
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Control is the power to govern an entity through participating in relevant activities of the investee; the investor is able to
obtain variable benefits from its activities, and at same time, to use the control rights on the investee to influence the
amount of returns. Joint control means that joint control for certain arrangement in accordance with relevant agreements;
activities relevant to the arrangement cannot be decided until obtaining the unanimous consent of parties sharing control
right. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is
not control or joint control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights of the investee, such as current
convertible debts, current executable warrants, etc., held by the investing enterprises or other parties shall be considered.
15.2 Determination of initial investment cost
For a long-term equity, investment acquired through a business combination involving enterprises under common control,
the shares of merged party's book value of owners' equity in the final controlling party consolidated financial statements
obtained on the merger date shall be considered as the initial investment cost of long-term equity investment. The
differences between the initial investment cost of long-term equity investment and the paid cash, the transferred non-cash
assets and the book value of the assumed debts are adjusted against the capital surplus; if the capital surplus is not sufficient
to be offset, the remaining balance is adjusted against retained earnings. In the case of issued equity securities treated as
consolidation consideration, share of book value of owner's equity of merged party in the final controlling party
consolidated financial statements is regarded as initial investment cost of long-term equity investments on the date of
consolidation; capital reserve shall be adjusted in accordance with taking total nominal value of issued share as capital
share, the difference between the initial investment cost of long-term equity investments and total book value of issued
shares; In case the capital reserve is not enough for writing down, the retained earnings shall be adjusted.
For a long-term equity investment acquired through business combination not involving enterprises under common control,
and the merging cost confirmed on the purchased date are regarded as the initial investment cost.
The intermediate expenses made by the combining party or purchaser for audit, legal service, assessment and other
management related expenses during the business merger should be included into the current profit and loss as it happens.
Long-term equity investment obtained by other means other than long-term equity investment formed by business
combination shall be initially measured at cost.
15.3 Subsequent measurement and recognition of profit or loss
15.3.1 Long-term equity investment accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in the Company's financial
statements. A subsidiary is an investee that is controlled by the Group.
The long-term equity investment accounted by the cost method shall be measured at its initial investment cost. If there are
additional investments or disinvestments, the long-term equity investment cost shall be adjusted. Income from the
investment in the current period shall be recognized in accordance with the cash dividends or profits declared and issued
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by the investee.
15.3.2 Long-term equity investment accounted for using the equity method
Except for investments in associates and joint ventures that are wholly or partly classified as holding assets for sale, the
Group accounts for investment in associates and joint ventures using the equity method. An associate is an entity over
which the Group has significant influence and a joint venture is an entity over which the Group can only exercise joint
control along with other investors on the investee’s net assets.
Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Group’s share of
the fair value of the investee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial
investment cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s
identifiable net assets at the time of acquisition, the difference is recognized in profit or loss for the period, and the cost of
the long-term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive income of the
investee for the period as investment income or loss and comprehensive income for the period, meanwhile, the book value
of the long-term equity investment shall be adjusted; The Group shall accordingly reduce the book value of the long-term
equity investment in terms of the part that shall be enjoyed according to the profit or cash dividends declared by the
invested unit to be distributed; For other changes in the owners' equity of the invested unit other than net profits and losses,
other comprehensive incomes and the profit distribution, the book value of long-term equity investment shall be adjusted
and be included into the capital reserves. The Group shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested
entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the
invested unit are different from those adopted by the Group, the adjustment shall be made for the financial statements of
the invested unit in accordance with the accounting policies and accounting periods of the Group to recognize the
investment income and other comprehensive incomes. For the transaction incurred between the group and associated
enterprises and joint ventures, invested or sold assets don't constitute a business, the part that doesn't achieve internal
transaction profit or loss or belongs to the Group calculated according to the enjoyed ratio will be offset, and the profit or
loss on investment will be confirmed on this basis. But for the unrealized loss arising from the internal transaction between
the Group and the invested unit, if such transaction loss is defined as the impairment loss of the transferred asset, they
cannot be offset.
When the Group determines the net loss of the invested unit that shall be shared, it is necessary to write-down the book
value of the long-term equity investment and other long-term equities substantially constituting the net investment of the
invested unit to zero as a limit. Besides, if the Group is obliged to bear extra loss for the invested unit, it shall be necessary
to determine provisions and record them to current investment loss in compliance with obligations expected to be assumed.
If the invested unit realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsets
its attributable share of the un-confirmed losses, resume recognizing its attributable share of profits.
15.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received and the carrying
amount is recognized in profit or loss for the period.
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16. Fixed Assets
16.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others,
or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognized only
when it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be
measured reliably. Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable that
economic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measured
reliably. Meanwhile the carrying amount of the replaced part is derecognized. Other subsequent expenditures are
recognized in profit or loss in the period in which they are incurred.
16.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one in
which it is ready for intended use. The useful life, estimated net residual value rate and annual depreciation rate of each
category of fixed assets are as follows:
Class Depreciation period (years) Residual value rate (%) Annual depreciation rate (%)
Buildings and Constructions 20 years 10 4.5
General-purpose equipment 3-5 years 10 18.0-30.0
Special-purpose equipment 3-5 years 10 18.0-30.0
Means of transportation 5 years 10 18.0
Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from disposal
of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition
expected at the end of its useful life.
16.3 Identification basis and valuation methods for fixed assets acquired under finance leases
On the commencement date of the lease term, record the lower of the fair value of the leasing asset or the present value of
the minimum lease payments on the lease commencement date as the entry book value of the leased asset, and book the
amount of the minimum lease payments as the entry book value of long-term account payable, and recognize the difference
between the entry value of the leased asset and that of the long-term account payables as unrecognized financing expenses.
In addition, the initial direct costs directly attributable to the leased item incurred during the process of negotiating the
lease and signing the leasing agreement shall be included into the value of the leased assets.
The Group adopts a depreciation policy for a fixed asset held under a finance lease which is consistent with that for its
owned fixed asset. If there is reasonable certainty that the Group will obtain ownership of the leased asset at the end of the
lease term, the leased asset is depreciated over its useful life. If there is no reasonable certainty that the Group will obtain
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ownership of the leased asset at the end of the lease term, the leased asset is depreciated over the shorter of the lease term
and its useful life.
16.4 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the
fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on
disposal of the asset net of the carrying amount and related taxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at
least once at each financial year-end, and account for any change as a change in an accounting estimate.
17. Construction in Process
Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during
the construction period, borrowing costs capitalized before it is ready for intended use and other relevant costs.
Construction in progress is not depreciated. Construction in progress is transferred to a fixed asset when it is ready for
intended use.
18. Borrowing Costs
Borrowing costs directly attributable to the acquisition & construction or production of assets eligible for capitalization
shall be capitalized when assets expenditure, borrowing costs and necessary construction or production for bringing assets
to expected conditions for use or marketing have taken place; when construction or production of assets ready for
capitalization reach to expected conditions for use or marketing, capitalization shall be ceased. Other borrowing expenses
are recognized as expenses in the current period.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before
being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed
under general-purpose borrowings, the Group determines the amount of interest to be capitalized on such borrowings by
applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the
amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to
the general-purpose borrowings. During the capitalization period, exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in connection with general-purpose
borrowings are recognized in profit or loss in the period in which they are incurred.
19. Intangible Assets
19.1 Intangible Assets Valuation Method and Service Life
Intangible assets include land use right, intellectual property (IP), application software, and franchiseetc, etc.
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An intangible asset is measured initially at cost. 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. The useful life and predicted net
residual value of various intangible assets are shown as follows:
Class Service life (year) Salvage value rate (%)
Land use right 40 or 50 years -
IP Right 10 Years -
Application Software 5-10 years -
Franchise Franchised operating period -
After the construction of the relevant infrastructure, the Group has the right to collect fees from the service recipients
within a certain period of operation, but if the amount of the fees is uncertain, the Group will use the fair value of the
consideration receivable for construction services as the initial intangible assets confirmed. The amortization of the
franchise is accrued on an average basis in installments using the straight-line method during its operating period.
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method at the end of the
period, and makes adjustments when necessary.
For the impairment test of intangible assets, please refer to Note (III), 20. Long-term asset impairment.
19.2 Internal Research and Development Expenditure
Expenditure during the research phase is recognized as an expense in the period in which it is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is recognized as
intangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profit
or loss for the period.
(1) It is technically feasible to complete the intangible asset so that it will be available for use or sale;
(2) The Group has the intention to complete the intangible asset and use or sell it;
(3) The Group can demonstrate the ways in which the intangible asset will generate economic benefits, including the
evidence of the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset;
(4) The availability of adequate technical, financial and other resources to complete the development and the ability to use
or sell the intangible asset; and
(5) The expenditure attributable to the intangible asset during its development phase can be reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase, the Group recognizes all
of them in profit or loss for the period. The costs of the intangible assets generated by internal development activities only
include the total expenditure incurred from the time point when the capitalization conditions are available to the point
when the intangible assets are used for their intended purposes; for the expenditure that already becomes an expenditure
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in the profit and loss statement before the capitalization conditions are available during development of the same intangible
asset, no adjustment will be made.
20. Long-term Assets Impairment
The Group assesses at each balance sheet date whether there is any indication that the long-term equity investment, fixed
assets, construction in process and intangible assets with a finite useful life may be impaired. If there is any indication that
such assets may be impaired, recoverable amounts are estimated for such assets. Intangible assets with indefinite useful
life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there is any
indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an
individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable
amount is determined by the higher of 1) net amount of fair value of the asset or asset group deducted by the disposal
expenses; or 2) the present value of the expected future cash flows of the asset or asset group.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted as an
impairment provision and is recognized in profit or loss for the period.
Goodwill impairment test shall be conducted at the end of each year at least. Goodwill impairment test shall be conducted
in accordance with the concerned asset group or asset portfolio. That is to allocate the book value of goodwill to the asset
group or asset portfolio that is expected to benefit from the synergies of the combination in a reasonable way from the date
of purchasing. When recoverable amount of apportion-included asset group or asset portfolio of goodwill is less than book
value of goodwill, impairment loss shall be recognized. Firstly, amount of impairment loss shall be apportioned to the
book value of goodwill of the said asset group or asset portfolio, and then book value of other assets, except for goodwill,
in asset group or asset portfolio shall be abated in proportion.
Once the impairment loss of such assets is recognized, it can not be reversed in any subsequent period.
21. Long-term deferred expenses
Long-term deferred expenses are the expenses that are already incurred but will be shared in the current reporting period
and later periods with amortization term of more than one year, mainly for the expenses on betterment of leased fixed
assets. Long-term deferred expenses are evenly amortized in installments in three years during the expected benefit period.
22. Contract liabilities
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration received
or receivable from customers. Contract assets and contract liabilities under the same contract are presented in net terms.
23. Employee compensation
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23.1 Accountant Arrangement Method of Short-term Remuneration
During accounting period when the Group's employees provide services, actual short-term remuneration shall be
recognized as the liabilities and current profit and loss or relevant asset cost. The Group’s employee benefits and welfare
are included into current profit and loss or relevant asset cost according to actual amount occurred during the period. If
the employee benefits and welfare is non-monetary, it shall be measured according to its fair value.
During the accounting period that the employees service the Group, the Group pays social insurance premiums such as
medical insurance premium, industrial injury insurance premium, maternity insurance premium and housing accumulation
fund for its employees, as well as labor union expenditure and employee education expenses calculated and withdrawn
according to the regulations, corresponding employee remuneration amount shall be calculated and determined in
accordance with specified calculation and withdrawal basis and proportion to recognize corresponding liabilities and
included into the current profit and loss or relevant asset cost.
23.2 Accountant Arrangement Method of Post-employment Benefits
All post-employment benefits shall be considered as the defined contribution plan.
In the accounting period when the employee serves for the Group, the deposited amount calculated based on defined
contribution plan shall be recognized as liabilities and included in the current profit and loss or relevant asset cost.
23.3 Accountant Arrangement Method of the Termination Benefits
Where the Group provides termination benefits, the employee remuneration liabilities caused by such termination benefits
will be determined as the following date, whichever is earlier, and will be included in the current profit and loss: 1) When
the Group cannot unilaterally withdraw the termination benefits provided due to labor relation cancellation plan or
employee lay-off suggestion; or 2）when the Group determines costs or expenses in relation with the restructuring of the
paid termination benefits.
24. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency such as products quality
assurance, etc. And it is probable that an outflow of economic benefits will be required to settle the obligation, and the
amount of the obligation can be measured reliably.
The amount recognized as a provision is 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. Where the effect of the time value of money is material, the amount of the provision is determined by
discounting the related future cash outflows.
25. Share-based Payment
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Share-based payment refers to a transaction in which the Group grants the equity instruments or undertakes the equity-
instrument-based liabilities in return for services from employees. The Group's share-based payment is an equity-settled
share-based payment.
A share-based payment is a transaction which the Group grants equity instruments, or incurs liabilities for amounts that
are determined based on the price of equity instruments, in return for services rendered by employees. The Group's share-
based payments are equity-settled share-based payments.
25.1 Equity-settled share-based payments
Grants to employees are equity-settled share-based payments.
Equity-settled share-based payments in exchange for services rendered by employees are measured at the fair value of the
equity instruments granted to employees at the grant date. Such amount is recognized as related costs or expenses on a
straight-line basis over the vesting period, with a corresponding increase in capital reserve.
At each balance sheet date during the vesting period, the Group makes the best estimate according to the subsequent latest
information of change in the number of employees who are granted with options that may vest, etc. and revises the number
of equity instruments expected to vest. The effect of the above estimate is recognized as related costs or expenses, with a
corresponding adjustment to capital reserve.
25.2. Accounting treatment related to implementation, modification and termination of share-based payment arrangement
In case the Group modifies a share-based payment arrangement, if the modification increases the fair value of the equity
instruments granted, the Group will include the incremental fair value of the equity instruments granted in the measurement
of the amount recognized for services received. If the modification increases the number of the equity instruments granted,
the Group will include the fair value of additional equity instruments granted in the measurement of the amount recognized
for services received. The increase in the fair value of the equity instruments granted is the difference between fair value
of the equity instruments before and after the modification on the date of the modification. If the Group modifies the terms
or conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-based
payment arrangement, or is not otherwise beneficial to the employee, the Group will continue to account for the services
received as if that modification had not occurred, other than a cancellation of some or all the equity instruments granted.
If cancellation of the equity instruments granted occurs during the vesting period, the Group will account for the
cancellation of the equity instruments granted as an acceleration of vesting, and recognize immediately the amount that
otherwise would have been recognized over the remainder of the vesting period in profit or loss for the period, with a
corresponding recognition in capital reserve. When the employee or counterparty can choose whether to meet the non-
vesting condition but the condition is not met during the vesting period, the Group treats it as a cancellation of the equity
instruments granted.
26. Revenue
26.1Accounting policies applied in revenue recognition and measurement
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For the reporting period from January 1st 2020 to December 31st 2020
The revenue of the Group is mainly generated from business types as follows:
(1) Revenue from sale of products
Product sales revenue is the revenue from sales of video surveillance products, smart home products, robotics products
and other products of the Group.
(2) Project construction revenue
Project construction revenue is the revenue from constructions related to intelligent security solution projects provided
by the Group.
(3) Cloud service and other service revenue
Revenue from cloud services and other services refers to cloud services such as storage services, video services, and
telephone services provided by the Group, maintenance services related to security projects, and other services, etc.
When (or as) a performance obligation in a contract was satisfied, i.e., when (or as) the customer obtains control of relevant
goods or services, the Group recognizes as revenue the amount of the transaction price that is allocated to that performance
obligation. A performance obligation is the Group’s commitment to transfer to a customer a good or service (or a bundle
of goods or services) that is distinct, in a contract with the customer. The transaction price is the amount of consideration
to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties and amounts that the Group expects to refund to the customer.
Revenue is recognized over time by reference to the progress towards complete satisfaction of the relevant performance
obligation if one of the following criteria is met: (1) the customer simultaneously receives and consumes the benefits
provided by the Group’s performance as the Group performs; (2) the Group’s performance creates or enhances an asset
that the customer controls as the Group performs; or (3) the Group’s performance does not create an asset with an
alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.
Otherwise, revenue is recognized at a point in time when the customer obtains control of the distinct good or service.
The Group adopts the output method to determine the progress of performance, that is, the progress of contract
performance is determined according to the value of the goods or services that have been transferred to the customer in
the view of the customer. When the performance progress cannot be reasonably determined, and the costs incurred can be
expected to be compensated, the Group recognizes revenue based on the amount of costs incurred until the performance
progress can be reasonably determined.
If the contract contains two or more performance obligations, the Group allocates the transaction price to each single
performance obligation on the contract start date in accordance with the relative proportion of the individual selling price
of the goods or services promised by each single performance obligation. However, if there is strong evidence that the
contract discount or variable consideration is only related to one or more (but not all) performance obligations in the
contract, the Group allocates the contract discount or variable consideration to the relevant one or more performances
obligation. Individual selling price refers to the price at which the Group sells goods or services to customers separately.
Where the individual selling price cannot be directly observed, the Group comprehensively considers all relevant
information that can be reasonably obtained, and uses the observable input value to the maximum to estimate the individual
selling price.
If there is variable consideration in the contract, the Group determines the best estimate of variable consideration based
on the expected value or the most likely amount. The transaction price including variable consideration shall not exceed
the amount that is likely to cause no significant reversal of accumulated recognized revenue when the relevant uncertainty
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For the reporting period from January 1st 2020 to December 31st 2020
is eliminated. At each balance sheet date, the Group re-estimates the amount of variable consideration that should be
included in the transaction price.
For sales with sales return terms attached, as the customer obtains ownership of related goods, the Group recognizes
revenue in accordance with the consideration (excluding expected refund amounts due to sales returns) that the Group is
expected to receive due to the transfer of goods or services to the customer, and recognizes expected liabilities in
accordance with expected refund amounts due to sales returns. The remaining amount, subsequent to deduction of expected
costs from collecting the goods (including the decrease in value of the returned goods), is recognized as an asset in
accordance with the carrying amount during the expected transfer of returned goods after deducting the costs of the above
net assets carried forward.
For sales with quality assurance clauses, if the quality assurance provides a separate service beyond the assurance to the
customer that the goods or services sold meet established standards, the quality assurance constitutes a single performance
obligation. Otherwise, the Group conducts accounting for quality assurance responsibilities in accordance with the
Accounting Standards for Business Enterprises No. 13-Contingencies.
The additional purchase option of customers includes customer reward incentives. With respect to the additional purchase
option with material rights provided to customers, the Group regards it as a single performance obligation, and recognizes
relevant revenue upon obtaining the control over relevant goods or services by the customers who exercise the purchase
option in future or upon lapse of such option. If a stand-alone selling price of the additional purchase option of customers
is not directly observable, the Group shall consider all relevant information including the difference in discount obtained
with and without the exercise of such option by customers and the possibility of exercising such option by customers
during estimation.
If there is a significant financing component in the contract, the Group determines the transaction price based on the
amount payable in cash when the customer assumes control of the goods or services. The difference between the
transaction price and the contract consideration is amortized using the effective interest rate method during the contract
period. On the contract commencement date, the Group does not consider the significant financing components in the
contract if the interval between the customer obtaining control of the goods or services and the price being paid by the
customer is not more than one year.
The Group judges whether the Group’s identity is the principal or agent when engaging in transactions based on whether
it has control over the goods or services before transferring the goods or services to customers. If the Group is able to
control the goods or services before transferring them to customers, the Group is the principal responsible person, and
revenue is recognized based on the total amount of consideration received or receivable; otherwise, the Group is an agent
and recognizes revenue based on the amount of commissions or fees which the Group is expected to be entitled to charge.
The amount of commissions or fees is determined based on the total amount of consideration received or receivable net of
the amount payable to other parties.
When the Group collects amounts of sold goods or services in advance from the customer, the Group will firstly recognize
the amounts as a liability and then transfer to revenue until satisfying relevant performance obligations. When the advances
from customers is non-refundable and the customer may give up all or part of contract right, and the Group is expected to
be entitled to obtain amounts associated with contract rights given up by the customer, the above amounts shall be
proportionally recognized as revenue in accordance with the model of exercising contract rights by the customer; otherwise,
the Group will transfer the relevant balance of the above liability to revenue only when the probability is extremely low
for the customer to satisfy remaining performance obligations.
27. Cost of contract
27.1 Cost of obtaining a contract
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Incremental costs incurred by the Group to obtain a contract (that is, costs that would not have occurred without a contract)
and expected to be recovered are recognized as an asset, and amortized using the same basis as revenue recognition for
the goods or services to which the asset relates, and included in current profit or loss. If the amortization period of the
asset does not exceed one year, it is included in current profit or loss when it occurs. Other expenses incurred by the Group
in order to obtain the contract shall be included in current profit or loss when incurred, unless it is clearly borne by the
customer.
27.2 Cost of contract fulfillment
The cost of the Group’s performance of a contract that does not fall within the scope of accounting standards other than
the revenue standard and meets the following conditions is recognized as an asset: (1) The cost is directly related to a
current or anticipated contract; (2) The cost increases the Group’s resources for fulfilling performance obligations in the
future; (3) The cost is expected to be recovered. The aforesaid assets are amortized on the same basis as the recognition
of income from goods or services related to the assets, and are included in the current profit or loss.
The Group’s asset in relation to contract costs are mainly contract performance costs, and they are included in inventories
based on their current nature.
27.3 Impairment of contract costs
In determining impairment losses on assets related to contract costs, impairment losses are first determined for other assets
recognized in accordance with other relevant ASBEs and related to the contract; then, for assets related to contract costs
whose carrying value is higher than the difference between the following two items, the Group makes provision for
impairment for the excess to be recognized as asset impairment losses: (1) the remaining amount of consideration that the
Group expects to receive as a results of transfer of goods or services to which the asset relates; (2) the estimated costs to
be incurred in connection with the transfer of relevant goods or services.
After the provision for impairment for the asset related to contract costs is made, if the difference between the above two
items is higher than the carrying amount of the asset due to changes in the factors of impairment in previous periods, the
original provision for impairment of the asset is reversed and included in the current profit or loss, but the carrying amount
of the asset after the reversal shall not exceed the carrying amount of the asset on the reversal date assuming no provision
for impairment is made.
28. Types of governmental subsidies and accounting treatment methods
Government subsidies refer to the monetary and non-monetary assets obtained by the Group from the government for free.
Government subsidies are recognized when they can meet the conditions attached to the government subsidies and can be
received.
If a government subsidy is a monetary asset, it shall be measured at the amount received or receivable.
28.1 Judgment basis and Accountant treatment of government subsidy related to assets
The government subsidies for Chongqing Manufacture Base construction and etc. are used for constructions and forms
long-term assets, and therefore are categorized as government subsidy related to assets.
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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
A government grant related to an asset is recognized as deferred income, and it should be evenly amortized to profit or
loss over the useful life of the related asset.
28.2 Judgment basis and accountant treatment of government subsidy related to income
The Group receives government subsidies including subsidies for Core Electronic Devices, High-end Universal Chip and
Basic Software Product Projects, Value-Added-Tax rebate (VAT rebate), subsidies for special projects, tax refunds, and
Value-Added-Tax deductions, etc. which are used to compensate the group-related costs or losses, and therefore are
categorized as government subsidy related to income.
For a government grant related to income, for example subsidy for Core Electronic Devices, High-end Universal Chip and
Basic Software Product Projects, if the subsidy is a compensation for related expenses or losses to be incurred in
subsequent periods, it is recognized as deferred income, and recognized in profit or loss over the periods in which the
related costs or losses are recognized; If the subsidy, such as VAT Rebate, is a compensation for related expenses or losses
already incurred, it is recognized immediately in profit or loss for the period.
For government subsidies related to the Group’s daily operations shall be booked into other income; for those not related
to the Group’s daily operations, shall be booked into non-operating income/expense.
For the policy-backed preferential subsidized loan, if the Ministry of Finance will appropriate the subsidy amount to the
lending bank, who will grant the loan to the Group at the policy-backed preferential interest rate, the actually received
loan amount will be the entry value of the loan and the loan-related expenses will be calculated based on the loan principal
and policy-backed preferential interest rate.
29. Deferred Tax Assets / Deferred Tax Liabilities
The income tax expenses include current income tax and deferred income tax.
29.1. Current Income Tax
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 recovered) according to the requirements of tax laws.
29.2 Deferred Tax Assets and Deferred Tax Liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the
nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined
according to tax laws, deferred tax assets and liabilities are recognized through the balance sheet liability method.
Deferred tax is generally recognized for all temporary differences. Deferred tax assets for deductible temporary differences
are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary
differences can be utilized. However, for temporary differences associated with the initial recognition of goodwill and the
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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
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 asset or liability is
recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the extent that it is
probable that future taxable profits will be available against which the deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except
where 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. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognized to the extent that it is probable that there will be taxable
profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the applicable
tax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance with
the tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except when they arise from
transactions or events that are directly recognized in other comprehensive income or in shareholders' equity, in which case
they are recognized in other comprehensive income or in shareholders' equity; and when they arise from business
combinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probable
that sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilized. Such
reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
29.3 Offset of Income Tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the assets
and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets
and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are
expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
30. Lease
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
30.1 Accounting treatment of operating Lease
30.1.1 The Group as lessee under operating leases
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either included
in the cost of related asset or charged to profit or loss for the period. Initial direct costs incurred are charged to profit or
loss for the period. Contingent rents are charged to profit or loss in the period in which they are actually incurred.
30.1.2 The Group as lessor under operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis over the term of the relevant
lease. Initial direct costs with more than an insignificant amount are capitalized when incurred, and are recognized in profit
or loss on the same basis as rental income over the lease term. Other initial direct costs with an insignificant amount are
charged to profit or loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the period
in which they actually arise.
30.2. Accounting treatment of the finance lease
30.2.1 The Group as lessee under finance leases
For relevant accounting treatment, refer to Note (III) 16.3 Identification basis, valuation and depreciation method of
finance lease of fixed assets.
Unrecognized finance charges are recognized as finance charge for the period using the effective interest method over the
lease term. Contingent rents are credited to profit or loss in the period in which they are actually incurred. The net amount
of minimum lease payments less unrecognized finance charges is separated into long-term liabilities and the portion of
long-term liabilities due within one year for presentation.
30.2.2 The Group as lessor under finance leases
At the commencement of the lease term, the aggregate of the minimum lease receivable at the inception of the lease and
the initial direct costs is recognized as a finance lease receivable, and the unguaranteed residual value is recorded at the
same time. The difference between the aggregate of the minimum lease receivable, the initial direct costs and the
unguaranteed residual value, and the aggregate of their present values is recognized as unearned finance income.
Unearned finance income is recognized as finance income for the period using the effective interest method over the lease
term. Contingent rents are credited to profit or loss in the period in which they are actually incurred.
The net amount of financial lease receivables less unearned finance income is separated into long-term debts receivable
and the portion of long-term debts receivable due within one year for presentation.
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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
31. Important judgments while applying accounting policy, and key assumptions and uncertainty factors applied
for accounting estimate
During the process of using accounting policy described in note (III), due to the uncertainty in operation activities, the
group should judge, estimate and assume the book value of the report items which may not be metered reliably. These
judgments, estimates and assumptions are based on the historical experience of the Group's management and other related
factors. Differences may exist between the actual results and the Group’s estimate.
The Group regularly reviews the above judgments, assumptions and estimations on the basis of continuous operation. If
the changes of accounting estimate only influence current period, the influence amount will be affirmed during the
changing period; if it influences the current period and subsequent periods, the influence amount will be recognized in the
current period and future period.
- Key assumptions and uncertainties used in accounting estimate
On balance sheet date, key assumptions and uncertainties for performing accounting estimates on book value of assets and
liabilities in subsequent future periods are:
Impairment provision for inventories
Except for contract performance costs, inventories are measured at the lower of cost or net realizable value. For raw
materials, the latest or future actual purchase price is used as the basis for determining the net realizable value; For products
in progress, the actual selling price of the latest or future finished product minus the estimated costs and costs that will be
incurred when similar products are completed in the current period, the estimated selling expenses and related taxes to be
incurred, is used as the basis for determining the net realizable value; For finished products, the actual selling price of the
latest or future finished product minus the estimated selling expenses and related taxes will be incurred, is used as the basis
for determining the net realizable value. The Group will regularly conduct a comprehensive stocktaking to review the
impairment circumstances on defective, obsoleted or slow-moving inventory if any; in addition, the Group's management
will regularly review the impairment circumstance of inventory with long storage time according to the inventory aging
list. The review procedure includes the comparison between book value of defective, obsoleted or slow-moving inventories
and inventory with long storage time and its corresponding net realizable value in order to determine whether to withdraw
provisions on the defective, obsoleted or slow-moving inventory and inventory with long storage time. Based on the above
procedure, the Group's management deems that the full provision amounts have been withdrawn for inventory.
Impairment of accounts receivable
Except for accounts receivable whose credit losses are determined on the basis of individual basis, the Group adopts an
impairment matrix to determine its expected credit loss provision. Based on the historical loss rate, the Group determines
the proportion of corresponding loss reserves for various types of accounts receivable with similar risk characteristics. The
impairment matrix is determined based on the historical overdue ratio and default of the Group, taking into account
reasonable and well-founded industry forward-looking information. As of December 31st 2020, the Group has reassessed
the historically observable overdue ratio and considered changes in forward-looking information.The amount of the
provision for expected credit losses will change as the estimation of the Group. The details on the provision for expected
credit losses of the accounts receivable of the Group are given in Note (V). 4.
247
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Useful life and predicted net residual value of fixed asset
The Group's estimation of fixed assets useful life is based on the historical experience of actual usable term of fixed assets
with similar properties and functions, the estimation of predicted net residual value is the amount obtained currently by
the Group from the assets after deducting the anticipated disposal expense based on the anticipated status assuming the
conditions that fixed assets' predicted useful life expires and fixed assets are at the end of useful life. The Group shall
conduct the review on the predicted service life and predicted net residual value of fixed assets at least annually. For the
current reporting period, the Group's management did not see signs either indicating a shortened or extended useful life of
the Group’s fixed asset or indicating a change in predicted net residual value.
Accrued liabilities of product quality warranty
Accrued liabilities of product quality assurance are costs and expenses incurred to meet the established standards of
product quality assurance obligations to customers in accordance with the product contract; the Group made such an
estimation according to the predicted repair and replacement cost of relevant products. The estimation considers the
product claim rate trend, historic defect rate, industry practice and other major estimations. The management deems that
the current estimation on accrued liabilities of product quality warranty is reasonable, however, the Group will continue
to review the conditions of product repairs, and will conduct adjustment if any sign indicating the need to make adjustments
on accounting estimates.
Deferred tax assets and deferred tax liabilities
Deferred income tax assets and deferred income tax liabilities are measured at the applicable income tax rate during the
period when the relevant asset is expected to be recovered or the relevant debt is expected to be paid off. The expected
applicable income tax rate is determined according to the relevant current tax regulations and the actual situation of the
Group. If the estimated income tax rate is different from the original estimate, the management of the Group will adjust it.
The realization of deferred income tax assets mainly depends on the actual future profits and the effective tax rate of
temporary difference in the future applicable years. If the actual profit in the future is less than the estimation, or actual
tax rate is lower than the estimation, then the confirmed deferred income tax assets will be reversed and confirmed in the
income statement during the corresponding period. If the actual profit in the future is more than the estimation, or actual
tax rate is higher than the estimation, then the corresponding deferred income tax assets might be adjusted and confirmed
in the income statement during the corresponding period.
Goodwill impairment
When performing impairment test on goodwill, the predicted present value of future cash flows of relevant asset group or
asset group portfolio included the goodwill need to be calculated, the future cash flows of relevant asset group or asset
group portfolio need to be estimated, and the proper pretax rate that fairly reflects the current market time value of money
and specific asset risk need to be determined. When the future actual result is different from the original estimation, the
goodwill impairment loss will alter.
Fair value measurement and valuation process
248
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Held-for-trading financial assets, receivables for financing, and other non-current financial assets of the Group are
measured at fair value in the financial statement. When valuating the fair value of these assets, the Group preferably uses
obtainable and observable market data. If no observable data is available, the Group will organize an internal evaluation
panel or hire qualified third-party valuers to conduct valuation. The Finance Department and evaluation panel of the Group
will work closely with the hired valuers to determine appropriate valuation techniques and the input values of the valuation
model. The valuation techniques and input values used for valuating the fair value of various assets are disclosed in Note
(IX).
249
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
32. Significant alternation in accounting policy and accounting estimations
32.1 Significant changes in accounting policies
Approval
Changes in accounting policies and reasons Notes
Procedures
New revenue standard
Starting from January 1st 2020, the Group has adopted the Accounting Standards for Business
Enterprises No. 14 – Revenue (hereinafter referred to as the “New Revenue Standard”, the
revenue standard before the amendment is referred to as the "Original Revenue Standard")
modified by the Ministry of Finance in 2017. The New Revenue Standard has introduced the 5-
step method for recognition and measurement of revenue and added more instructions on
specific transactions or events. For details of the accounting policies for recognition and Such
measurement of revenue of the Group, please refer to Note (III). 26. The New Revenue Standard alternations
requires the entity to adjust the retained earnings and the amounts of other relative items in the in
financial statements at the beginning of initial adoption (i.e. January 1st 2020) of the new accounting
standards for the cumulative amount of impact, and not to adjust information in comparable policy were
period. In adopting the New Revenue Standard, the Group only adjusts the cumulative impact approved
None
of contracts that have not been completed on the first execution date. For changes in contract by the
incurred before the beginning of adoption of New Revenue Standard, the Group will make Group at
simplified treatment, namely, the Group will identify the fulfilled and unfulfilled performance board of
obligations, determine transaction price and allocate the transaction price between the fulfilled director
and unfulfilled performance obligations according to the final arrangement of contract changes. general
meeting.
The New Revenue Standard has no significant impact on the revenue recognition of various
businesses of the Group.
For details of the impact of the Group’s adoption of the New Revenue Standard on January 1st
2020, please refer to Note (III). 32.2.
32.2 In addition to providing more extensive disclosure of income transactions, the impact of the implementation
of the New Revenue Standards on the consolidated balance sheet at the beginning of the year:
Unit: RMB
Original Revenue
Item Reclassified (Note) New Revenue Standard
Standard
Current Assets:
Inventories 11,267,986,843.11 (511,959,250.70) 10,756,027,592.41
Contract assets - 511,959,250.70 511,959,250.70
Current Liabilities:
Receipts in advance 1,020,989,460.61 (1,020,989,460.61) -
Contract liabilities - 1,277,556,117.60 1,277,556,117.60
Other payables 1,568,744,599.94 (223,641,465.91) 1,345,103,134.03
Other current liabilities 913,534,538.26 74,324,355.92 987,858,894.18
Non-current Liabilities:
Deferred income 333,589,831.30 (107,249,547.00) 226,340,284.30
Note: Due to the implementation of the New Revenue Standards, the Group reclassified the completed but unsettled assets
formed by construction contracts of RMB 511,959,250.70 that was originally included in inventory into contract assets;
250
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
reclassified the prepaid product sales amount and prepaid construction settlement payments that were originally included
in advance receipts of RMB 946,665,104.69 and RMB 74,324,355.92 to contract liabilities and other current liabilities,
respectively; and reclassified cloud storage service income of RMB 107,249,547.00 originally included in deferred income
and part of the accrued expenses of RMB 223,641,465.91 originally included in other payables into contract liabilities.
The impact of the implementation of the New Revenue Standards on the relevant items of the parent company’s
balance sheet at the beginning of this year is listed below:
Unit: RMB
Original Revenue
Item Reclassified (Note) New Revenue Standard
Standard
Current Assets:
Inventories 171,243,815.97 (10,824,732.70) 160,419,083.27
Contract assets - 10,824,732.70 10,824,732.70
Current Liabilities:
Receipts in advance 227,242,328.23 (227,242,328.23) -
Contract liabilities - 201,581,177.56 201,581,177.56
Other current liabilities 913,534,538.26 25,661,150.67 939,195,688.93
Note: Due to the implementation of the New Revenue Standards, the Group reclassified the completed but unsettled assets
formed by construction contracts of RMB10,824,732.70 that was originally included in inventory to contract assets; and
reclassified the prepaid product sales amount and prepaid construction settlement payments that were originally included
in advance receipts of RMB 201,581,177.56 and RMB 25,661,150.67 to contract liabilities and other current liabilities,
respectively.
Compared with the Original Revenue Standard, the impact of the implementation of the New Revenue Standard
on the related items of the consolidated balance sheet on December 31st 2020 is listed below:
Unit: RMB
Original Revenue
Item Reclassified (Note) New Revenue Standard
Standard
Current Assets:
Inventories 11,723,660,551.68 (245,754,510.98) 11,477,906,040.70
Contract assets - 245,754,510.98 245,754,510.98
Current Liabilities:
Receipts in advance 1,545,407,782.59 (1,545,407,782.59) -
Contract liabilities - 2,161,166,671.26 2,161,166,671.26
Other payables 2,187,414,432.38 (662,361,076.43) 1,525,053,355.95
Other current liabilities 560,959,368.73 184,752,210.84 745,711,579.57
Non-current Liabilities:
Deferred income 329,029,010.77 (138,150,023.08) 190,878,987.69
Note: Due to the implementation of the New Revenue Standards, the Group reclassified the completed but unsettled assets
formed by constructions of RMB 245,754,510.98 that was originally included in inventory to contract assets; reclassified
the prepaid product sales amount and prepaid construction settlement payments that were originally included in advance
receipts of RMB 1,360,655,571.75 and RMB 184,752,210.84 into contract liabilities and other current liabilities,
respectively; and reclassified cloud storage service income of RMB 138,150,023.08 originally included in deferred income
and part of the accrued expenses of RMB 662,361,076.43 originally included in other payables into contract liabilities;
Compared with the Original Revenue Standard, the impact of the implementation of the New Revenue Standard
on the related items of the parent Company’s balance sheet on December 31st 2020 is listed below:
251
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit: RMB
Original Revenue
Item Reclassified (Note) New Revenue Standard
Standard
Current Assets:
Inventories 207,527,500.81 (3,311,250.08) 204,216,250.73
Contract assets - 3,311,250.08 3,311,250.08
Current Liabilities:
Receipts in advance 272,352,315.20 (272,352,315.20) -
Contract liabilities - 240,629,015.92 240,629,015.92
Other current liabilities 557,444,443.98 31,723,299.28 589,167,743.26
Note: Due to the implementation of the New Revenue Standards, the Group reclassified the completed but unsettled assets
formed by construction contracts of RMB 3,311,250.08 that was originally included in inventory into contract assets; and
reclassified the prepaid product sales amount and prepaid construction settlement payments that were originally included
in advance receipts of RMB 240,629,015.92 and RMB 31,723,299.28 into contract liabilities and other current liabilities,
respectively.
252
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
IV. Taxes
1. Major categories of taxes and tax rates
Category of tax Basis of tax computation Tax rate
Enterprise income tax Taxable income 25% (Note 1)
For the taxable product sales revenue or taxable labor revenue, the Company 6%, 9%, 13% and simple
VAT and its domestic subsidiaries are ordinary Value-added Tax payers; the VAT collection rate of 5%, 3%
payable is the balance of input tax after deducting the deductible output tax. (Note 3)
City maintenance and
Actual payable turnover tax 7%
construction tax
Education surcharges Actual payable turnover tax 3%
Local education
Actual payable turnover tax 2%
surcharges
Note 1: Except that this Company and subsidiaries in China are applicable to the following tax preference, this Company's
other subsidiaries in China are applicable to 25% of enterprise income tax rate, the overseas subsidiaries are applicable
to corresponding local tax rate.
(1) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province
in 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading Group Office of National High-tech Enterprise
Identification Management on December 29th 2020, the Company was identified as the high-tech enterprise with a
valid term of 3 years, from 2020 to 2022. Therefore, the Company’s enterprise income tax rate is at a reduced rate of
15% for the current reporting period. (2019:15%)
In accordance with the Notice on Printing and Distributing the List of Key Software Enterprises and IC Design
Enterprises in the National Planning Layout for 2013-2014 (Fa Gai Gao Ke [2013] No. 2458), the Company was
recognized as a national key software enterprise in 2013. According to the Notice on Issues Related to Enterprise
Income Tax Preferential Policies for Software and Integrated Circuit Industry (Cai Shui [2016] No. 49), the Company
was approved by the tax authorities in August 2020 to pay the 2019 annual corporate income tax at the rate of 10%.
As of the approval date of this report, the Company's 2020 income tax concessions have not been verified or filed;
therefore, the Company's 2020 corporate income tax is still paid at the rate of 15% (2019: 10%).
(2) In accordance with Finance and Taxation [2011] No. 58 Document of Ministry of Finance, State Administration of
Taxation (SAT) and General Administration of Customs, the wholly-owned subsidiaries, Chongqing Hikvision
Technology Co., Ltd. and Chongqing Hikvision System Technology Co., Ltd., are qualified to enjoy the west
development preferential tax policy from 2011 to 2020, therefore, the enterprise income rate shall be calculated and
paid on the basis of a reduced tax rate of 15% in the current reporting period. (2019:15%)
(3) In accordance with the Replies on Publishing the List of First Batch of identified High-tech Enterprises of Zhejiang
Province in 2018 (GuoKeHuoZi [2019] No. 70) issued by the leading group office of Zhejiang high-tech enterprise
identification management work on February 20th 2019, the Company’s joint venture subsidiary, Hangzhou Fuyang
Baotai Security Technology Service Co., Ltd. (Fuyang Baotai), was recognized as a high-tech enterprise and was valid
for 3 years from 2018 to 2020. Therefore, the enterprise income rate shall be calculated and paid on the basis of a
reduced tax rate of 15% in the current reporting period. (2019:15%)
(4) In accordance with the Replies on Publishing identified High-tech Enterprises of Zhejiang Province in 2019
(GuoKeHuoZi [2020] No. 32) issued by the leading group office of Zhejiang high-tech enterprise identification
management work on January 20th 2020, the Company’s wholly-owned subsidiary, Hangzhou Hikvision System
Technology Co., Ltd. (Hangzhou System), was recognized as a high-tech enterprise and was valid for 3 years from
2019 to 2021. Therefore, the enterprise income rate shall be calculated and paid on the basis of a reduced tax rate of
15% in the current reporting period. (2019:15%)
253
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
(5) In accordance with the Notice on Publishing the List of Third Batch of Proposed Identified High-tech Enterprises of
Shanghai in 2020 issued by Shanghai High-tech Enterprise Identification Office on November 20th 2020, the
Company’s wholly-owned subsidiary, Shanghai Goldway Intelligent Transportation System Co., Ltd. (“Shanghai
Goldway”) was identified as the high-tech enterprise with a valid term of 3 years, from 2020 to 2022. Therefore, its
corporate income tax is at a reduced rate of 15% this year. (2019:15%)
(6) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province
in 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading Group Office of National High-tech Enterprise
Identification Management on December 29th 2020, the Company’s joint-venture subsidiary, Hangzhou Hikrobot
Technology Co., Ltd. (“Hangzhou Robotic Technology”) were identified as the high-tech enterprises with a valid term
of 3 years, from 2020 to 2022. Therefore, the enterprise income tax in the current reporting period is at a reduced rate
of 15%. (2019:15%)
(7) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Province
in 2020 (Guo Ke Huo Zi [2020] No. 32) issued by the Leading Group Office of National High-tech Enterprise
Identification Management on January 20th 2020, the Company’s joint-venture subsidiary, Hangzhou Hikmicro
Sensing Technology Co., Ltd. (“Hangzhou Hikmicro”) were identified as the high-tech enterprises with a valid term
of 3 years, from 2019 to 2021.
According to the Notice of State Administration of Taxation and Ministry of Finance on the Enterprise Income Tax
Policy for Further Incentivizing Software Industry and Integrated Circuit Industry (Cai Shui [2012] No. 27) and Notice
on Issues Related to Enterprise Income Tax Preferential Policies for Software and Integrated Circuit Industry (Cai
Shui [2016] No. 49), Hangzhou HikMicro is an integrated circuit manufacturer that was founded before December
31st 2017 and has not made profit and that produces the integrated circuit with line width <0.8 micrometers (incl.), so
it is exempted from enterprise income tax in the first and second years after start of profiting and pays enterprise
income tax at half of the 25% statutory tax rate in the third to fifth years. As of the approval date of this report,
Hangzhou HikMicro had not profited in 2020.
(8) In accordance with the Announcement on Promoting the Income Tax Policies of High-quality Developed Enterprises
in the Integrated Circuit Industry and the Software Industry (Announcement [2020] No. 45 jointly by the MOF, SAT,
NDRC and MIIT), enterprises engaging in integrated circuit design, equipment, materials, packaging, testing and
software encouraged by the state are entitled to exemption from enterprise income tax in the first and second years
after start of profiting and pays enterprise income tax at half of the 25% statutory tax rate in the third to fifth years.
The Company’s joint venture subsidiaries, Hangzhou EZVIZ Software Co., Ltd. (“EZVIZ Software”) and Hangzhou
Microimage Software Co., Ltd. (“Microimage Software”), are qualified software companies and are entitled to
exemption from enterprise income tax in 2020 (2019: 25%).
Note 2: In accordance with the requirements of the Notice on Software Product Value-added Tax Policy (Cai Shui [2011]
No. 100) promulgated by the Ministry of Finance and the State Administration of Taxation, as for self-developed software
products sales of the Company, Hangzhou System, the Company’s joint-venture subsidiaries such as Hangzhou
HikRobotic Technology, Hangzhou HikAuto Software Co., Ltd. (“HikAuto”), Hangzhou EZVIZ Software, Wuhan Hik
Storage Technology Co., Ltd., Hangzhou HikStorage Technology Ltd. (“HikStorage”), Hangzhou Hikmed Imaging
Technology Co., Ltd., Hangzhou Hikfire Technology C o., Ltd. (“Hikfire”), Hangzhou Rayin Technology Co., Ltd.
(“Rayin”), Microimage Software and Hangzhou Kuangxin, the VAT shall be calculated and paid with tax rate of 17% at
first, then the portion with actual tax bearing excess 3% shall be refunded after State Administration of Taxation reviews.
Note 3: In accordance with the Announcement on Relevant Policies for Deepening the Value-Added Tax Reform (Joint
Announcement [2019] No. 39) jointly issued by the Ministry of Finance, the State Administration of Taxation and the
General Administration of Customs, from April 1st 2019 to December 31st 2021, taxpayers in the production and living
services industry are allowed to deduct an additional 10% of the current deductible input tax to deduct the tax payable
(“Additional Deduction Policy”), the Company’s joint venture subsidiaries, Henan Hua’An Bao Quan Intelligent
Development Co., Ltd. (“Hua’an Baoquan Intelligent”), Henan Hua’an Security Services Co., Ltd. (“Hua’an Security
Services”), Henan Haikang Hua’An BaoQuan Electronics Co., Ltd. (“Hua’An BaoQuan Electronics”), Hangzhou EZVIZ
Technology Co., Ltd. (“EZVIZ Technology”), engaging in information technology service industry, and their sales of
information technology services accounted for more than 50% of its total sales, are complying with the provisions of the
254
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Additional Deduction Policy and were entitled to additional deduction preferential tax policy of input tax since April 1st
2019.
Based on the Joint Announcement [2019] No. 39, since April 1st 2019, taxpayers are subject to VAT taxable sales or
imported goods, the VAT rates had been adjusted from 16% and 10% to 13% and 9% respectively.
The VAT rate for the services provided by the Company’s taxpayers is 6%, and part of taxable service income is applicable
to the simple collection rate of 5% and 3%.
255
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
V. Notes to items in the consolidated financial statements
1. Cash and bank balances
Closing Balance Opening Balance
Item Foreign Exchange
Exchange rate
Foreign currency amount RMB amount currency rate for RMB amount
for conversion
amount conversion
Cash：
RMB - - 17,959.62 - - 26,573.64
EUR 71,638.34 8.0250 574,897.70 9,121.04 7.8155 71,285.50
INR 2,504,019.19 0.0891 223,108.11 2,522,598.05 0.0975 245,953.31
USD 32,776.72 6.5249 213,864.82 18,379.06 6.9762 128,216.03
GBP 6,341.78 8.8903 56,380.33 6,402.60 9.1501 58,584.43
Other 18,836.93
- - - - 26,816.77
currencies
Bank
balance：
RMB - - 27,789,108,210.05 - - 18,788,528,237.06
USD 941,351,972.89 6.5249 6,142,227,487.92 961,564,878.01 6.9762 6,708,068,901.97
EUR 52,026,066.91 8.0250 417,509,186.97 52,283,961.33 7.8155 408,625,299.77
RUB 1,742,132,380.50 0.0877 152,785,009.77 620,006,016.25 0.1126 69,812,677.43
INR 1,203,270,539.96 0.0891 107,211,405.11 1,970,579,846.87 0.0975 192,131,535.07
GBP 11,204,897.40 8.8903 99,614,899.38 10,626,622.96 9.1501 97,234,662.71
BRL 54,535,451.03 1.2551 68,447,444.59 19,927,461.93 1.7312 34,498,422.09
AED 36,263,518.29 1.7761 64,407,634.83 6,881,653.06 1.8992 13,069,635.49
CAD 5,383,485.44 5.1161 27,542,449.88 55,723.62 5.3421 297,681.15
PLN 12,359,893.85 1.7520 21,654,534.02 38,087,521.72 1.8324 69,791,574.80
JPY 336,505,067.09 0.0632 21,267,120.24 - - -
HKD 13,632,862.61 0.8416 11,473,417.17 414,424.94 0.8958 371,241.86
AUD 2,279,274.45 5.0163 11,433,524.41 1,809,291.16 4.8843 8,837,120.83
ZAR 14,765,683.20 0.4458 6,582,541.57 30,300,402.08 0.4943 14,977,488.75
KRW 855,655,685.00 0.0060 5,133,934.11 1,047,156,352.79 0.0060 6,316,447.12
THB 14,687,508.85 0.2328 3,419,252.06 15,437,877.88 0.2328 3,593,937.97
Other 18,195,337.35
- - - - 31,353,569.84
currencies
Other
currency
funds:
RMB - - 463,887,119.07 - - 552,442,631.48
USD 3,101,420.39 6.5249 20,236,457.90 9,370,708.66 6.9762 65,371,937.73
EUR 465,821.33 8.0250 3,738,216.17 601,625.37 7.8155 4,702,003.07
Other 2,748,878.19
- - - - 1,366,483.91
currencies
Total 35,459,729,108.27 27,071,948,919.78
Including: 782,389,029.81
deposited 1,045,878,239.66
in overseas
banks
256
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Details of other currency funds:
Closing Balance Opening Balance
Foreign Exchange Foreign Exchange
Item currency rate for RMB amount currency rate for RMB amount
amount conversion amount conversion
Capitals with limitations：
Bank acceptance bill - - 8,484.61 - - 121,763,423.06
Deposits for letter of
- - 44,417,713.65 - - 60,758,739.37
guarantee
Deposits for letter of Credit in
283,313.18 1.2551 355,586.37 271,326.91 1.7312 469,721.15
BRL
Tax Operation Margin for
120,305.95 0.0891 10,719.26 120,306.05 0.0975 11,729.83
India
Other security deposit 60,000.00 4.7050 282,300.00 - - 505,730.42
Other capitals with limitations - - 389,816,426.07 - - 372,771,567.55
Subtotal 434,891,229.96 556,280,911.38
Capitals without limitations:
Deposit in Alipay, Tenpay, etc. - - 25,263,562.38 - - 65,519,585.97
Other currency funds in USD 4,662,441.59 6.5249 30,421,965.14 298,523.39 6.9762 2,082,558.84
Other currency funds in ZAR 23,875.03 0.0877 2,093.84 - - -
Other currency funds in EUR 3,965.11 8.0250 31,820.01 - - -
Subtotal 55,719,441.37 67,602,144.81
Total 490,610,671.33 623,883,056.19
2. Held-for-trading financial assets
Unit: RMB
Item Closing Balance Opening Balance
Financial assets measured at fair value through
22,679,846.77 181.76
current gain and loss
Including: derivative financial assets 22,679,846.77 181.76
Total 22,679,846.77 181.76
As of December 31st 2020, derivative financial assets include forward foreign exchange contracts and foreign exchange
option contracts. Forward foreign exchange contracts include forward contracts which sell USD and buy RMB, forward
contracts which sell EUR and buy USD, etc. with a nominal value of RMB 1,875,987,806.80 (2019: RMB 782,363,621.62),
while foreign exchange option contracts include USD call options, etc. with a nominal value of RMB 326,245,000.00
(2019: nil). Such forward foreign exchange contracts and foreign exchange option contracts are not designated as hedging
instruments, and gains or losses arising from changes in fair value are recognized directly in current profit or loss.
3. Notes receivable
3.1 Categories of notes receivable
Unit：RMB
Category Closing Balance Opening Balance
Bank acceptance bill 1,003,388,157.28 696,453,713.94
Commercial acceptance bill 299,864,547.91 276,783,075.08
257
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Category Closing Balance Opening Balance
Total 1,303,252,705.19 973,236,789.02
3.2 The pledged notes receivable by the Group at the closing of the current reporting peirod
Unit：RMB
Category Pledged amount at the end of the current reporting period
Bank acceptance bill 7,981,224.88
Total 7,981,224.88
3.3 At the end of the current reporting period, notes receivable endorsed by the Group but not yet due at the
balance sheet day
Unit：RMB
Derecognized amount by December 31st Amount not derecognized by December
Category
2020 31st 2020
Bank acceptance bill Note (V)-29.3 - 482,454,604.99
Total - 482,454,604.99
Note: Transfer of financial assets
As of December 31st 2020, the Group gave RMB 482,454,604.99 (2019: RMB 329,309,522.17) undued bank acceptance
bills to suppliers for endorsement. Since the Group has not transferred almost all the risks and rewards of ownership of
financial assets, the Group has not terminated its confirmation. For details, please refer to Note (V) 29.3.
3.4 As of December 31st 2020, the Group transferred the defaulted notes receivable into accounts receivable.
Unit：RMB
Category Amounts transferred into accounts receivable by December 31st 2020
Commercial Acceptance Bill 17,014,737.60
Total 17,014,737.60
3.5 The Group believes, except for bills that are transferred to accounts receivable due to the failure of the drawer to
perform the contract, The bank acceptance bills and commercial acceptance bills held by the Group do not have
significant credit risks and will not cause major losses due to the counterparty’s default. Therefore, no loss provision
is made.
4. Accounts Receivable
4.1 Disclosure by aging
Unit: RMB
Closing Balance
Item
Accounts receivable Credit loss provision Proportion (%)
Within credit period 14,002,517,652.87 58,299,025.51 0.42
Within 1 year after exceeding
6,758,932,090.02 255,864,496.09 3.79
credit period
1-2 years after exceeding credit
1,578,112,326.35 372,980,005.92 23.63
period
2-3 years after exceeding credit
733,996,553.54 447,320,322.82 60.94
period
3-4 years after exceeding credit
255,513,263.37 215,227,318.95 84.23
period
Over 4 years after exceeding
162,704,016.92 162,704,016.92 100.00
credit period
258
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Closing Balance
Item
Accounts receivable Credit loss provision Proportion (%)
Subtotal 23,491,775,903.07 1,512,395,186.21 6.44
4.2 Classified disclosure of credit loss provision by methods
Unit: RMB
Closing Balance
Carrying amount Credit loss provision Book Value
Category
Proportion Proportion
Amount Amount Amount
(%) (%)
Provision for credit loss on a single
- - - - -
basis
Provision for credit loss by portfolios 23,491,775,903.07 100.00 1,512,395,186.21 6.44 21,979,380,716.86
Total 23,491,775,903.07 100.00 1,512,395,186.21 6.44 21,979,380,716.86
Beginning Balance
Carrying amount Credit loss provision Book Value
Category
Proportion Proportion
Amount Amount Amount
(%) (%)
Provision for credit loss on a single
- - - - -
basis
Provision for credit loss by portfolios 22,740,426,638.25 100.00 1,432,499,437.97 6.30 21,307,927,200.28
Total 22,740,426,638.25 100.00 1,432,499,437.97 6.30 21,307,927,200.28
Provision for credit loss by portfolios for accouts receivable
Unit: RMB
Closing balance
Customer
Carrying amount Credit loss provision Proportion (%)
Portfolio A 3,741,372,760.83 99,390,940.21 2.66
Portfolio B 14,498,803,998.36 1,286,607,985.18 8.87
Portfolio C 5,251,599,143.88 126,396,260.82 2.41
Total 23,491,775,903.07 1,512,395,186.21 6.44
Description of credit loss provision by portfolios for accouts receivable
As part of the Group's credit risk management, the Group uses the ageing of accounts receivable to assess the expected
credit losses of accounts receivable formed by domestic and overseas sales business, and divides the risk characteristics
into portfolio A, portfolio B and portfolio C, according to the business area and object. These three portfolios involve a
large number of customers with the same risk characteristics. Aging information is able to reflect the solvency of these
three types of customers when the accounts receivable are due.
259
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
As of December 31st 2020 and January 1st 2020, the credit risk and expected credit losses of accounts receivable from portfolio A are as follows:
Unit: RMB
Closing balance Beginning balance
Age Estimated Estimated
Credit loss
average loss Carrying value Credit loss provision Book value average loss Carrying value Book value
provision
rate (%) rate (%)
Within credit period 0.02 2,971,260,488.09 604,959.50 2,970,655,528.59 0.02 3,012,605,457.25 597,158.52 3,012,008,298.73
Within 1 year after exceeding credit
2.02 640,220,646.55 12,955,798.75 627,264,847.80 6.11 624,571,039.13 38,185,783.11 586,385,256.02
period
1-2 years after exceeding credit period 51.50 82,533,903.30 42,503,136.38 40,030,766.92 52.96 42,580,562.72 22,551,710.14 20,028,852.58
2-3 years after exceeding credit period 90.10 40,717,280.97 36,686,603.66 4,030,677.31 100.00 10,567,300.34 10,567,300.34 -
3-4 years after exceeding credit period 100.00 5,809,507.07 5,809,507.07 - 100.00 361,945.19 361,945.19 -
Over 4 years after exceeding credit period 100.00 830,934.85 830,934.85 - 100.00 970,003.96 970,003.96 -
Total 2.66 3,741,372,760.83 99,390,940.21 3,641,981,820.62 1.98 3,691,656,308.59 73,233,901.26 3,618,422,407.33
As of December 31st 2020 and January 1st 2020, the credit risk and expected credit losses of accounts receivable from portfolio B are as follows:
Unit: RMB
Closing balance Beginning balance
Age Estimated Estimated
Credit loss
average loss Carrying value Credit loss provision Book value average loss Carrying value Book value
provision
rate (%) rate (%)
Within credit period 0.76 6,294,425,956.16 48,017,503.05 6,246,408,453.11 0.79 6,328,262,502.43 50,248,953.36 6,278,013,549.07
Within 1 year after exceeding credit
3.77 5,727,639,925.20 216,155,232.48 5,511,484,692.72 5.56 5,693,144,197.77 316,684,963.73 5,376,459,234.04
period
1-2 years after exceeding credit period 20.69 1,426,493,413.08 295,122,043.56 1,131,371,369.52 33.24 1,204,463,575.15 400,380,049.11 804,083,526.04
2-3 years after exceeding credit period 57.51 665,262,321.85 382,616,768.44 282,645,553.41 69.87 359,638,419.88 251,294,454.87 108,343,965.01
3-4 years after exceeding credit period 83.09 238,233,041.29 197,947,096.87 40,285,944.42 88.54 111,524,139.09 98,742,193.82 12,781,945.27
Over 4 years after exceeding credit period 100.00 146,749,340.78 146,749,340.78 - 100.00 86,854,139.13 86,854,139.13 -
Total 8.87 14,498,803,998.36 1,286,607,985.18 13,212,196,013.18 8.74 13,783,886,973.45 1,204,204,754.02 12,579,682,219.43
260
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
As of December 31st 2020 and January 1st 2020, the credit risk and expected credit losses of accounts receivable from portfolio C are as follows:
Unit: RMB
Closing balance Beginning balance
Age Estimated Estimated
Credit loss
average loss Carrying value Credit loss provision Book value average loss Carrying value Book value
provision
rate (%) rate (%)
Within credit period 0.20 4,736,831,208.62 9,676,562.96 4,727,154,645.66 0.25 4,542,156,207.09 11,532,655.19 4,530,623,551.90
Within 1 year after exceeding credit
6.84 391,071,518.27 26,753,464.86 364,318,053.41 11.63 607,354,998.31 70,646,073.52 536,708,924.79
period
1-2 years after exceeding credit period 51.18 69,085,009.97 35,354,825.98 33,730,183.99 50.83 86,416,837.18 43,926,740.35 42,490,096.83
2-3 years after exceeding credit period 100.00 28,016,950.72 28,016,950.72 - 100.00 12,516,916.97 12,516,916.97 -
3-4 years after exceeding credit period 100.00 11,470,715.01 11,470,715.01 - 100.00 10,418,437.21 10,418,437.21 -
Over 4 years after exceeding credit period 100.00 15,123,741.29 15,123,741.29 - 100.00 6,019,959.45 6,019,959.45 -
Total 2.41 5,251,599,143.88 126,396,260.82 5,125,202,883.06 2.95 5,264,883,356.21 155,060,782.69 5,109,822,573.52
4.3 Credit loss provision
Provision, re-collection, or reverse of the credit loss provision in the current reporting period
Unit: RMB
Credit loss provision Total
Balance on January 1st 2020 1,432,499,437.97
Provision/(reverse) during the current fiscal year 106,051,544.54
Derecognition of financial assets (including direct write-downs) and transfer out (22,005,239.96)
Difference arised from foreign currency statement translation (4,150,556.34)
Balance on December 31st 2020 1,512,395,186.21
261
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Actual write-off of accounts receivable during current reporting period:
In the current reporting period, the amount of actual accounts receivable write-off is RMB 25,171,302.50, and RMB
3,166,062.54 is recollected after writing-off.
4.4 Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
Name of the Relationship with the Book value balance of accounts Closing balance for credit loss Proportion
Party Company receivable provision (%)
CETC’s
subsidiary
Related Party 501,007,644.51 96,125,402.52 2.13
company A
(Note)
Third Party A Third party 310,077,741.68 1,486,228.93 1.32
Third Party B Third party 126,881,081.38 151,276.86 0.54
Third Party C Third party 107,295,716.59 3,377,737.34 0.46
Third Party D Third party 89,559,375.68 1,090,145.30 0.38
Total 1,134,821,559.84 102,230,790.95 4.83
Note: A subsidiary of CETC is a subsidiary of China Electronics Technology Group Co., Ltd., the Company's ultimate
controller.
4.5 As of December 31st 2020, there is no termination of accounts receivable booking due to transfer of a financial asset.
4.6 As of December 31st 2020, the Group has no assets/liabilities booked due to transferred accounts receivable that the
Group still continue to be involved in.
5. Receivables for financing
5.1 Receivables for financing by catagories
Unit: RMB
Item Closing Balance Opening Balance
Bank acceptance bill 1,959,601,195.25 1,257,385,053.02
Total- 1,959,601,195.25 1,257,385,053.02
5.2 At the end of the reporting period, the Group's pledged receivables for financing
Unit: RMB
Item Pledged amounts at the end of the reporting period
Bank acceptance bill 106,117,987.87
Total- 106,117,987.87
5.3 At the end of the reporting period, receivables for financing endorsed or discounted by the Group that have
not yet expired on the balance sheet date.
Unit: RMB
Derecognized amount at December 31st Amount not derecognized at December
Item
2020 (note) 31st 2020
Bank acceptance bill 1,176,321,996.01 -
Total- 1,176,321,996.01 -
5.4 The Group believes that the acceptance bank's credit rating of the bank acceptance bill held is high, and there is no
significant credit risk, so no loss provision is made.
262
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
6. Prepayments
6.1 Prepayments by aging analysis
Unit: RMB
Closing Balance Opening Balance
Aging
Carrying amount Proportion (%) Carrying amount Proportion (%)
Within 1 year 264,692,469.55 89.33 288,005,514.00 93.00
1-2 years 20,302,314.17 6.85 15,571,671.02 5.03
2-3 years 9,021,070.25 3.04 5,931,322.30 1.92
Over 3 years 2,318,835.89 0.78 177,226.00 0.05
Total 296,334,689.86 100.00 309,685,733.32 100.00
6.2 Closing balances of top five prepayments parties
As of December 31st 2020, the Group’s top five balances of prepayments amounted to RMB 92,888,243.89, accounting
for 31.35% of total closing balance of prepayments.
263
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
7. Other receivables
7.1 Other receivables by aging
Unit: RMB
Closing Balance
Item
Other receivables Bad debt provision Proportion (%)
Within contract period 393,767,306.19 3,092,760.15 0.79
Within 1 year 82,543,774.90 3,484,470.34 4.22
1-2 years 30,360,130.36 6,333,574.44 20.86
2-3 years 36,308,366.49 16,055,559.67 44.22
3-4 years 19,994,220.62 14,864,083.14 74.34
Over 4 years 7,472,685.05 7,472,685.05 100.00
Subtotal 570,446,483.61 51,303,132.79 8.99
7.2 Other receivables by nature of the payment
Unit: RMB
Item Closing Balance Opening Balance
Temporary payments for receivables 294,409,377.31 289,318,820.48
Guarantee deposits 173,447,240.76 189,230,714.51
Tax rebates 67,714,444.77 63,470,351.07
Investment intention fund 1,000,000.00 2,968,783.82
Others 33,875,420.77 36,238,521.79
Total 570,446,483.61 581,227,191.67
264
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
7.3 Provision for credit loss
Unit: RMB
Amount of changes in the current reporting period Difference resulted from
foreign currency
Category Opening balance statements Closing balance
Provision or reverse Recollect Resell or write off
Conversion
Other receivables 25,980,646.19 27,043,173.31 - (977,181.94) (743,504.77) 51,303,132.79
Total 25,980,646.19 27,043,173.31 - (977,181.94) (743,504.77) 51,303,132.79
Changes in credit loss provisions for other receivables
Unit: RMB
Stage 1 Stage 2 Stage 3
bed debts allowance Expected credit loss for the entire Expected credit loss for the entire
Expected credit losses in the Total
duration (credit impairment has not duration (credit impairment has
next 12 months
incurred) occurred)
Balance on January 1st 2020 1,212,041.34 4,892,634.45 19,875,970.40 25,980,646.19
The book balance of other receivables on January 1st
2020 in the current reporting period
--Transfer into stage 2 (1,212,041.34) 1,212,041.34 - -
-- Transfer into stage 3 - (4,892,634.45) 4,892,634.45 -
--provision/(reverse) in the current reporting period 3,836,264.92 8,606,003.44 14,600,904.95 27,043,173.31
-- Derecognition of financial assets (including direct
- - (977,181.94) (977,181.94)
write-down) and transfer out
Other changes (743,504.77) - - (743,504.77)
Balance on December 31st 2020 3,092,760.15 9,818,044.78 38,392,327.86 51,303,132.79
7.4 The actual write-off of other receivables during the current reporting period:
The actual write-off of other receivables during the current reporting period is RMB 977,181.94.
265
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
7.5 Top five debtors based on corresponding closing balance of other receivables
Unit: RMB
Relationship with the Proportion of total
Closing balance for credit loss
Entities Company Nature Closing balance Aging closing balance for other
provision
receivables (%)
Third party E Third party Guarantee deposits 13,305,682.50 With in the contract period 2.33 157,007.05
Third party F Third party Guarantee deposits 6,927,179.05 With in the contract period 1.21 81,740.71
Temporary
Third party G Third party payments for 5,513,580.00 With in the contract period 0.97 65,060.24
receivables
Temporary
Third party H Third party payments for 4,492,118.45 With in the contract period 0.79 53,007.00
receivables
Third party I Third party Guarantee deposits 3,738,423.66 1-2 years 0.66 797,405.77
Total 33,976,983.66 5.96 1,154,220.77
7.6 As of December 31st 2020, the Group does not have other receivables related to government subsidies.
7.7 As of December 31st 2020, there is no termination of other receivables booking due to transfer of a financial asset.
7.8 As of December 31st 2020, the Group has no assets/liabilities booked due to any transferred other receivable that the Group continues to be involved in.
266
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
8. Inventories
8.1 Categories of inventories
Unit: RMB
Closing Balance Opening Balance
Provision for decline in Provision for decline in
value of inventories/ value of inventories/
Category
Carrying amount Impairment provision Book value Carrying amount Impairment provision Book value
for contract performance for contract
cost performance cost
Raw materials 5,307,099,264.63 96,173,520.97 5,210,925,743.66 4,900,229,585.04 36,718,275.26 4,863,511,309.78
Work-in-progress 364,831,525.62 - 364,831,525.62 280,637,734.52 - 280,637,734.52
Finished goods 5,863,464,370.61 516,926,580.56 5,346,537,790.05 5,801,082,843.92 405,129,709.25 5,395,953,134.67
Contract performance cost 555,610,981.37 - 555,610,981.37 215,925,413.44 - 215,925,413.44
Total 12,091,006,142.23 613,100,101.53 11,477,906,040.70 11,197,875,576.92 441,847,984.51 10,756,027,592.41
8.2 Provision for decline in value of inventories
Unit: RMB
Decrease in the current reporting period Effect on conversion of
Increase in the current financial statements
Category Opening balance Closing Balance
reporting period Reversals Write-off denominated in foreign
currencies
Raw materials 36,718,275.26 61,888,587.98 - 2,433,342.27 - 96,173,520.97
Finished goods 405,129,709.25 299,338,888.22 - 174,888,235.50 (12,653,781.41) 516,926,580.56
Subtotal 441,847,984.51 361,227,476.20 - 177,321,577.77 (12,653,781.41) 613,100,101.53
The write-offs of provision for inventories in the current reporting period are due to use or sale of inventories.
For contract performance cost recognized as an asset, the Company recognizes it into current profit or loss on the same basis as the revenue from goods relating to such asset, and is
recognized at the point of time when the goods are delivered to and accepted by the counterparty; there was an amount of RMB 288,555,605.91 recognized during the current fiscal year.
267
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
9. Contract assets
9.1 Details of contract assets:
Unit: RMB
Closing Balance Opening Balance
Provisions Provisions
Items
Carrying amount for Book value Carrying amount for Book value
impairment impairment
Constructions 179,392,556.16 1,363,383.44 178,029,172.72 511,959,250.70 - 511,959,250.70
Maintainence
68,243,992.61 518,654.35 67,725,338.26 - - -
services
Total 247,636,548.77 1,882,037.79 245,754,510.98 511,959,250.70 - 511,959,250.70
9.2 The classification and disclosure of the method of provision for impairment of contract assets this year:
Unit: RMB
Closing Balance
Carrying amount Provisions for impairment Book value
Items
Proportion Provision
Amount Amount Amount
(%) proportion (%)
Provision for impairment on a
- - - - -
single item
Provision for impairment by
247,636,548.77 100.00 1,882,037.79 0.76 245,754,510.98
portfolio
Total 247,636,548.77 100.00 1,882,037.79 0.76 245,754,510.98
Provision, re-collection, or reverse in the current reporting period:
Unit: RMB
Expected credit loss during the Expected credit loss during
Credit loss provision whole duration (No credit the whole duration (Credit Total
impairment occurred) impairment occurred)
Balance on January 1st 2020 - - -
Provision/(reverse) during the current fiscal 1,882,037.79
1,882,037.79 -
year
Balance on December 31st 2020 1,882,037.79 - 1,882,037.79
Impairment provision for the current fiscal year amounted to RMB 1,882,037.79, with no reversal, write-off or recovery
of impairment provision during the current fiscal year.
Contract assets arise from the Group’s construction works business as well as maintenance services relating to security
projects. The Group provides construction works and maintenance services based on contracts with customers, and
recognizes revenue based on the performance progress during the term of the contracts. The Group’s customers make
milestone payments for the construction works and maintenance services of the Group as provided in the contracts. For
the portion where the Group has obtained an unconditional right to the payment, it will be recognized as accounts
receivable, while the remaining portion will be recognized as contract assets; where the contract price received or
receivable by the Group exceeds the performance obligation completed to date, the excess portion will be recognized as
contract liabilities. The Group presents contract assets and contract liabilities under the same contract on a net basis.
10. Non-current assets due within one year
Unit: RMB
Item Closing Balance Opening Balance
Long-term receivables due within one year (Note (V) 12) 1,001,208,813.83 528,469,701.75
Total 1,001,208,813.83 528,469,701.75
268
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
11. Other current assets
Unit: RMB
Item Closing balance Opening balance
Deductible VAT input 391,898,131.26 616,239,842.99
Prepaid corporate income tax 41,520,799.46 80,344,406.42
Prepaid tariff 22,446,422.69 16,702,795.64
Others 42,049,153.23 41,169,776.67
Total 497,914,506.64 754,456,821.72
269
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
12. Long-term receivables
12.1 Details of long-term receivables
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for credit Range of discount rate
Carrying amount Book value Carrying amount Book value
credit loss loss
Financial leases receivables 332,860,621.51 21,387,061.50 311,473,560.01 361,658,264.68 16,387,726.08 345,270,538.60 0.54%-6.05%
Including: Unrealized income from
20,751,939.07 - 20,751,939.07 17,093,256.64 - 17,093,256.64 -
financing
Installments for selling goods 2,890,406,667.71 95,101,409.36 2,795,305,258.35 1,612,991,061.26 47,255,136.89 1,565,735,924.37 4.24%-6.45%
Including: Unrealized income from
738,142,438.88 - 738,142,438.88 399,492,567.10 - 399,492,567.10 -
financing
Less: Non-current assets due within one
1,092,345,496.98 91,136,683.15 1,001,208,813.83 580,682,032.92 52,212,331.17 528,469,701.75 -
year (Note (V) 10)
Total 2,130,921,792.24 25,351,787.71 2,105,570,004.53 1,393,967,293.02 11,430,531.80 1,382,536,761.22 -
12.2 Credit loss provision
As part of the Group's credit risk management, the Group uses the aging of long-term receivables to assess the expected credit losses of long-term receivables formed by financial leasing
and installment collection business. The customers involved in financial leasing and installment collection business are mainly government department and state-owned enterprises. There
a large number of customers and have the same risk characteristics. The aging information is able to reflect the repayment capability of these customers when the long-term receivables
are due.
As of December 31st 2020, the credit risk and expected credit losses of long-term receivables of these customers are as follows:
270
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit: RMB
Closing balance
Age
Amounts Credit loss provision Estimated average loss rate (%)
Within credit period 2,677,352,505.22 31,592,759.56 1.18
Within 1 year after exceeding credit period 358,008,398.69 16,181,979.62 4.52
1-2 years after exceeding credit period 127,457,418.27 27,186,667.32 21.33
2-3 years after exceeding credit period 28,298,355.18 12,513,532.66 44.22
3-4 years after exceeding credit period 12,899,178.33 9,762,098.16 75.68
Over 4 years after exceeding credit period 19,251,433.53 19,251,433.54 100.00
Total 3,223,267,289.22 116,488,470.86 3.61
The changes in the Group's long-term receivables' expected credit loss provision for the year of 2020 are as follows:
Unit: RMB
Stage 1 Stage 2 Stage 3
Expected credit losses for Expected credit losses for
Credit loss provision Expected credit losses in the entire duration the entire duration Total
the next 12 months (No credit impairment (Credit impairment has
occurred) occurred)
Balance on January 1st 2020 13,978,436.59 10,724,421.18 38,940,005.20 63,642,862.97
On January 1st 2020, the book balance of long-term accounts receivable in the current year
Transfer into stage 2 (13,978,436.59) 13,978,436.59 - -
Transfer into stage 3 - (2,587,059.16) 2,587,059.16 -
Provision/(reverse) during the current reporting period 31,592,759.56 21,252,848.33 - 52,845,607.89
Balance on December 31st 2020 31,592,759.56 43,368,646.94 41,527,064.36 116,488,470.86
12.3 As of December 31st 2020,there is no termination of long-term receivables booking due to transfer of a financial asset.
12.4 As of December 31st 2020, the Group has no assets/liabilities booked due to any transferred long-term receivable that the Group continue to be involved in.
13. Long-term equity investment
Unit: RMB
271
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Increase/Decrease in the current reporting period
Closing
balance
Opening Adjustment: Declaration of Closing
The invested entity Investment Profit (Loss) Other for
Balance Additional Investment Other cash dividends Impairment Balance
recognized under the Changes others impairment
Investments reduction comprehensive or profit provision provision
equity Method in equity
income distribution
1. Joint venture companies
Hangzhou Haikang
Intelligent Industrial
Equity Investment Fund 50,000,000.00 550,000,000.00 - 12,479,371.62 - - - - - 612,479,371.62 -
Partnership (L.P.) (note
1)
Daishan Hailai Yunzhi
13,320,000.00 - - 1,933,091.76 - - - - - 15,253,091.76 -
Technology Co., Ltd.
Zhejiang City Digital
Technology Co., Ltd. - 11,500,000.00 - 364,018.37 - - - - - 11,864,018.37 -
(Note 2)
Zhejiang Haishi Huayue
Digital Technology Co., - 10,200,000.00 - (214,422.68) - - - - - 9,985,577.32 -
Ltd. (Note 3)
Shenzhen Hikvision
Urban Service Operation - 8,000,000.00 - (1,970,430.31) - - - - - 6,029,569.69 -
Co., Ltd. (Note 4)
Guangxi Haishi Urban
Operation Management - 6,000,000.00 - (703,304.64) - - - - - 5,296,695.36 -
Co., Ltd. (Note 5)
Yunnan Yinghai Parking
Service Co., Ltd. (Note - 4,900,000.00 - (58,939.24) - - - - - 4,841,060.76 -
6)
Xuzhou Kangbo Urban
Operation Management
- 4,900,000.00 - (268,713.42) - - - - - 4,631,286.58 -
Service Co., Ltd. (Note
7)
Subtotal 63,320,000.00 595,500,000.00 - 11,560,671.46 - - - - - 670,380,671.46 -
272
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Increase/Decrease in the current reporting period
Closing
balance
Opening Adjustment: Declaration of Closing
The invested entity Investment Profit (Loss) Other for
Balance Additional Investment Other cash dividends Impairment Balance
recognized under the Changes others impairment
Investments reduction comprehensive or profit provision provision
equity Method in equity
income distribution
2. Associated Companies
Wuhu Sensor -
48,420,966.46 - - 10,070,297.96 - - - - - 58,491,264.42
Technology Co., Ltd.
Maxio Technology -
109,929,732.09 - - (17,974,093.48) - - - - - 91,955,638.61
(Hangzhou) Co., Ltd.
Zhiguang Hailian Big -
Data Technology Co., 8,684,859.27 10,000,000.00 - 2,568,199.60 - - - - - 21,253,058.87
Ltd.
Sanmenxia Xiaoyun -
Vision Technology Co., 4,317,157.18 - - (645,660.25) - - - - - 3,671,496.93
Ltd.
Jiaxin Haishi JiaAn -
Zhicheng Technology 7,699,011.20 - - 780,120.07 - - - - - 8,479,131.27
Co., Ltd.
Qinghai Qingtang Big -
9,793,595.29 - - 1,853.38 - - - - - 9,795,448.67
Data Co., Ltd.
-
Subtotal 188,845,321.49 10,000,000.00 - (5,199,282.72) - - - - - 193,646,038.77
-
Total 252,165,321.49 605,500,000.00 - 6,361,388.74 - - - - - 864,026,710.23
Note 1: As approved according to the Proposal on Investment in and Establishment of Industrial Investment Fund Partnership and the Related Transactions passed by
the 12th Conference of the 4th Board of Director held on October 18th 2019 and the Proposal on Adjusting Some of the Fund Providers of Hangzhou Haikang
Intelligent Industrial Investment Fund Partnership (L.P.) passed by the 13th Conference of the 4th Board of Director held on December 9th 2019, the Group and
the CET Fund Management (Tianjin) Ltd. (CET Management), Hangzhou High-tech Venture Capital Ltd. (Hangzhou High-tech), CET (Tianjin) Investment
Management Partnership (L.P.) (CET Partnership) and CETHIK Group Ltd. (CETHIK) signed the Partnership Agreement for Hangzhou Hikvision Intelligent
273
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Industrial Equity Investment Fund Partnership (L.P.) and, on December 10th 2019, founded the Hangzhou Haikang Intelligent Industrial Equity Investment Fund
Partnership (L.P.) (Haikang Intelligent Fund) under joint contribution. Haikang Intelligent Fund is a limited partnership, with subscribed capital contribution of
RMB 1,000,010,000, and completed registration at Asset Management Association of China (AMAC) on February 5th 2020. CET Management as the fund
manager and the general partner contributes RMB 10,000 and holds 0.0010% shares. The Group, Hangzhou High-tech, CET Partnership and CETHIK, as limited
partners, have respectively contributed RMB 600 million, RMB 200 million, RMB 100 million and RMB 100 million in currency, and their shareholding ratios
are respectively 59.9994%, 19.9998%, 9.9999% and 9.9999%. In 2020, the Group has paid in RMB 550 million. As of the end of the year, the Group has paid in
all of the capital. The Investment Decision Committee of Haikang Intelligent Fund comprises five members, and all investment matters are subject to approval
by more than half of the representatives. Over half of the representatives of the Investment Decision Committee of Haikang Intelligent Fund are assigned by the
Group and the related party CET Partnership has one-vote veto power over any resolution of the Investment Decision Committee of Haikang Intelligent Fund,
therefore the Group and the related party CET Partnership jointly control Haikang Intelligent Fund.
Note 2: During the current fiscal year, the Group and the independent third parties, Ningbo Urban Construction Investment Holding Co., Ltd. (Ningbo Urban Investment)
and Ningbo YongCheng Asset Management Co., Ltd. (YongCheng Asset Management), have signed the agreement for jointly establishing the Zhejiang Urban
Digital Technology Co., Ltd. (Zhejiang Urban Digital Technology), of which, the Group, Ningbo Urban Investment and Yong Cheng Asset Management
respectively contribute RMB 23 million, RMB 24.5 million and RMB 2.5 million, and their shareholding ratios are respectively 46%, 49% and 5%. As of the end
of the current fiscal year, the Group has paid in RMB 11.50 million as stipulated in the agreement and controlled 46% of the equity, which is commensurate with
the Group’s voting power in the board of shareholders of Zhejiang Urban Digital Technology. The board of directors of Zhejiang Urban Digital Technology
consists of five directors, one of whom is assigned by the Group. According to the Articles of Association of Zhejiang Urban Digital Technology, any major
matters related to finance and operation decisions are subject to approval by the shareholders representing over two thirds of the voting powers. Therefore, the
Group, Ningbo Urban Investment and Yong Cheng Asset Management jointly control Zhejiang Urban Digital Technology.
Note 3: During the current fiscal year, the Group and the independent third parties, Taizhou Huangyan Broadcast & TV Network Co., Ltd. (Huangyan Broadcast & TV)
and Taizhou Huangyan Technology Innovation Investment Co., Ltd. (Huangyan Technology Innovation), have signed the agreement for jointly establishing the
Zhejiang Hai Shi Hua Yue Digital Technology Ltd. (Hai Shi Hua Yue), of which, the Group, Huangyan Broadcast & TV and Huangyan Technology Innovation
respectively contribute RMB 10.20 million, RMB 5.80 million and RMB 4.00 million, and their shareholding ratios are respectively 51%, 29% and 20%. As of
the end of the current fiscal year, the Group has paid in all of the capital and controlled 51% of the equity, which is commensurate with the Group’s voting power
in the board of shareholders of HaiShi HuaYue. The board of directors of HaiShi HuaYue consists of five directors, three of whom are assigned by the Group.
According to the Articles of Association of Hai Shi Hua Yue, all matters are subject to approval by the shareholders representing over two thirds of the voting
powers. Therefore, the Group, Huangyan Broadcast & TV and Huangyan Technology Innovation jointly control HaiShi HuaYue.
Note 4: During the year, the Group and the independent third party Shenzhen Harzone Borui Technology Co., Ltd. (Harzone Borui) have signed the agreement for jointly
establishing the Shenzhen Hikvision City Service and Operation Co., Ltd. (Shenzhen City Service), of which, the Group and Harzone Borui respectively contribute
RMB 20.00 million and RMB 30.00 million, and their shareholding ratios are respectively 40% and 60%. As of the end of the current fiscal year, the Group has
paid in RMB 8.00 million as stipulated in the agreement and controlled 40% of the equity, which is commensurate with the Group’s voting power in the board of
shareholders of Shenzhen City Service. The board of directors of Shenzhen City Service consists of three directors, one of whom is assigned by the Group.
274
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
According to the Articles of Association of Shenzhen City Service, any major matters related to finance and operation decisions are subject to approval by the
shareholders representing over two thirds of the voting powers. Therefore, the Group and Harzone Borui jointly control Shenzhen City Service.
Note 5: During the year, the Group and the independent third party Guangxi Yibo Investment Management Partnership (Yibo Investment) have signed the agreement for
jointly establishing the Guangxi HaiShi City Operation and Management Co., Ltd. (Guangxi Hai Shi), of which, the Group and Yibo Investment respectively
contribute RMB 20.00 million and RMB 30.00 million, and their shareholding ratios are respectively 40% and 60%. As of the end of the current fiscal year, the
Group has paid RMB 6.00 million as stipulated in the agreement and controlled 40% of the equity, which is commensurate with the Group’s voting power in the
board of shareholders of Guangxi HaiShi. The board of directors of Guangxi HaiShi consists of three directors, one of whom is assigned by the Group. According
to the Articles of Association of Guangxi HaiShi, any major matters related to finance and operation decisions are subject to approval by all shareholders.
Therefore, the Group and Yibo Investment jointly control Guangxi HaiShi.
Note 6: During the current fiscal year, the Group and the independent third party Jianshui County Yinghui Development and Investment Co., Ltd. (Yinghui Investment)
have signed the agreement for jointly establishing the Yunnan Yinghai Parking Services Ltd. (Yunnan Yinghai), of which, the Group and Yinghui Investment
respectively contribute RMB 4.90 million and RMB 5.10 million, and their shareholding ratios are respectively 49% and 51%. As of the end of the current fiscal
year, the Group has paid in all of the capital and controlled 49% of the equity, which is commensurate with the Group’s voting power in the board of shareholders
of Yunnan Yinghai. The board of directors of Yunnan Yinghai consists of five directors, two of whom are assigned by the Group. According to the Articles of
Association of Yunnan Yinghai, any major matters related to finance and operation decisions are subject to approval by the shareholders representing over two
thirds of the voting powers. Therefore, the Group and Yinghui Investment jointly control Yunnan Yinghai.
Note 7: During the current fiscal year, the Group and the independent third parties, Xuzhou Parking Technology Co., Ltd. (Parking Technology) and Xuzhou Citizen Card
Company Co., Ltd. (Citizen Card Company), have signed the agreement for jointly establishing the Xuzhou Kangbo City Operation and Management Services
Co., Ltd. (Xuzhou Kangbo), of which, the Group, Parking Technology and Citizen Card Company respectively contribute RMB 9.80 million, RMB 9.20 million
and RMB 1.00 million, and their shareholding ratios are respectively 49%, 46% and 5%. As of the end of the current fiscal year, the Group has contributed RMB
4.90 million as stipulated in the agreement and controlled 49% of the equity, which is commensurate with the Group’s voting power in the board of shareholders
of Xuzhou Kangbo. The board of directors of Xuzhou Kangbo consists of five directors, of which two are assigned by the Group and two by Parking Technology.
According to the Articles of Association of Xuzhou Kangbo, any major matters related to finance and operation decisions are subject to approval by the
shareholders representing over two thirds of the voting powers. Therefore, the Group and Parking Technology jointly control Xuzhou Kangbo.
275
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
14. Other non-current financial assets
Unit: RMB
Investment Changes in
Additional
recovery fair value
investment
Opening during the during the
Invested Entity (Note 1) Shareholding % during the Closing balance
balance current current
current
reporting reporting
reporting period
period period
CETC Finance Co., Ltd. -
3.83% 247,308,906.45 112,872,015.00 63,254,815.75 423,435,737.20
(Note 2)
Hangzhou Confirmware - -
9.52% 28,732,009.18 2,360,023.44 31,092,032.62
Technology Co., Ltd.
Zhejiang Tuxun - -
Technology Co.,Ltd. 8.13% 28,358,818.81 3,863,945.64 32,222,764.45
(Zhejiang Tuxun)
Zhengzhou Guokong - -
Smart City Technology 7.00% 3,500,000.00 (2,800,000.00) 700,000.00
Co., Ltd.
Guangxi Jilian Haibao - - -
Technical Service Co., 10.00% 2,884,220.00 2,884,220.00
Ltd.
Shenzhen Wanyu - - -
Security Service 5.00% 1,000,000.00 1,000,000.00
Technology Co., Ltd.
Nanwang Information - - -
0.25% 604,313.00 604,313.00
Industry Group Co., Ltd.
Hangzhou Hikvision -
Equity Investment
0.0017% 10,000.00 (10,000.00) - -
Partnership (Limited
Partnership)
Total 312,398,267.44 112,872,015.00 (2,810,000.00) 69,478,784.83 491,939,067.27
Note 1: it refers to the Group’s equity investments of private companies. The Group has no control, joint control or
significant influence over the invested company.
Note 2: It is an enterprise controlled by CETC, the ultimate controlling party of the Group. The Company received a cash
dividend of RMB 150,000,000.00 from China Electronic Technology Finance Co., Ltd. (2019: RMB 17,357,220.31) and
recognized it as current profit and loss. Please refer to Note (V), 50 for details.
15. Fixed Assets
15.1 Details of fixed assets
Unit: RMB
General-
Building and Special-purpose Transportation
Items purpose Total
construction equipment vehicles
equipment
I. Total original carrying
amount
1. Opening balance 4,816,088,804.95 773,020,682.47 1,857,736,384.58 91,486,364.54 7,538,332,236.54
2. Increase in the current
290,038,021.04 200,342,860.19 329,720,963.55 11,169,837.29 831,271,682.07
reporting period
1) purchase 111,173,014.46 196,976,721.66 271,178,967.52 11,169,837.29 590,498,540.93
2) transferred from
178,865,006.58 2,054,230.79 58,407,353.86 - 239,326,591.23
construction in progress
3）Increase due to
business combination not - 1,311,907.74 134,642.17 - 1,446,549.91
under common control
3.Decrease in the current
- 25,020,616.02 41,675,783.29 6,140,826.91 72,837,226.22
reporting period
276
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
1) disposal or write-off - 25,020,616.02 41,675,783.29 6,140,826.91 72,837,226.22
4. Effect on conversion of
financial statements
(6,039,423.60) (6,284,853.71) (7,936,383.67) (437,978.06) (20,698,639.04)
denominated in foreign
currencies
5.Closing Balance 5,100,087,402.39 942,058,072.93 2,137,845,181.17 96,077,396.86 8,276,068,053.35
II. Accumulated depreciation
1. Opening balance 763,668,628.26 224,369,283.55 713,167,782.03 45,907,821.83 1,747,113,515.67
2. Increase in the current
229,496,408.86 163,413,431.03 306,084,325.88 14,638,909.16 713,633,074.93
reporting period
(1) accrual 229,496,408.86 163,413,431.03 306,084,325.88 14,638,909.16 713,633,074.93
3.Decrease in the 17,007,542.08 32,569,223.85 5,257,664.57 54,834,430.50
current reporting -
period
(1) disposal or write- 17,007,542.08 32,569,223.85 5,257,664.57 54,834,430.50
-
off
4. Effect on conversion of
financial statements
(852,994.41) (2,608,249.93) (2,122,197.55) (268,201.46) (5,851,643.35)
denominated in foreign
currencies
5.Closing balance 992,312,042.71 368,166,922.57 984,560,686.51 55,020,864.96 2,400,060,516.75
III. Provision for decline in
value
1.Opening balance - - - - -
2.Increase in the current
- - - - -
reporting period
3. Decrease in the current
- - - - -
reporting period
4.Closing balance - - - - -
IV. Total book value
Closing balance on book value 4,107,775,359.68 573,891,150.36 1,153,284,494.66 41,056,531.90 5,876,007,536.60
Opening balance on book value 4,052,420,176.69 548,651,398.92 1,144,568,602.55 45,578,542.71 5,791,218,720.87
15.2 As of December 31st 2020, the Group did not have any significant idle fixed assets.
15.3 Fixed assets leased through financial lease.
Unit: RMB
Accumulated
Item Original book value Provision for impairment Carrying value
depreciation
Special-purpose
92,164,518.65 46,834,180.90 - 45,330,337.75
equipment
15.4 As of December 31st 2020, the Group had not rent out any fixed asset through operating leasing
15.5 Fixed assets of which certificates of title have not been granted as of December 31st 2020.
Unit: RMB
Item Carrying amount Reason for certificates of title not granted
In the process of obtaining the real estate
Office building for branches 24,734,446.00
certificates
In the process of obtaining the real estate
Fuzhou High-tech Zone Innovation Park 102,456,967.05
certificates after transferred to fixed assets
Total 127,191,413.05
277
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
16. Construction in progress
16.1 Details of construction in progress
Unit: RMB
Closing balance Opening balance
Item
Carrying amount Provision Book value Carrying amount Provision Book value
Chengdu Science and Technology Park Project 521,626,793.33 - 521,626,793.33 242,931,547.66 - 242,931,547.66
Hangzhou Innovation Industry Park 337,821,702.49 - 337,821,702.49 113,538,634.58 - 113,538,634.58
Chongqing Science and Technology Park Phase
249,810,250.79 - 249,810,250.79 111,066,438.98 - 111,066,438.98
II Project
Others 315,976,447.11 - 315,976,447.11 164,018,857.84 - 164,018,857.84
Total 1,425,235,193.72 - 1,425,235,193.72 631,555,479.06 - 631,555,479.06
16.2Changes in significant construction in progress during the current reporting period
Unit: RMB
Including:
Transferred Effect on Amount capitalized
Accumulated Capitalization
to fixed conversion invested as interest and
Increase in capitalized rate for
Budget assets of financial Other a Construction profit/loss
Opening the current Closing interest and interest in the Source of
Item (RMB during the statements Reductions proportion in Progress on exchange
0,000)
balance reporting
current denominated (Note 1)
balance
of budget (%)
profit/loss on
for the
current funds
period exchange reporting
reporting in foreign amount current
(Note 2) period (%)
period currencies (%) reporting
period
Chengdu
Science and Self-
196,900.00 242,931,547.66 278,695,245.67 - - - 521,626,793.33 26.49% 26.49% - - -
Technology financing
Park Project
Hangzhou
Special
Innovation 102,600.00 113,538,634.58 224,283,067.91 - - - 337,821,702.49 32.93% 32.93% 53,686,015.19 58,884,747.25 0.85%
loan
Industry Park
278
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Including:
Effect on capitalized
Amount
Transferred to conversion Accumulated interest and Capitalization
invested
Increase in the fixed assets of financial Other capitalized profit/loss rate for
Budget as a Construction
Opening current during the statements Reductions Closing interest and on interest in the Source of
Item (RMB proportion in Progress
0,000)
balance reporting current denominated (Note 1) balance
of budget (%)
profit/loss on exchange current funds
period reporting in foreign exchange for the reporting
amount
period currencies (Note 2) current period (%)
(%)
reporting
period
Chongqing
Science and
Self-
Technology 76,200.00 111,066,438.98 138,743,811.81 - - - 249,810,250.79 32.78% 32.78% - - -
financing
Park project-
phase 2
Zhengzhou
Science and Self-
48,500.00 94,339.62 13,435,069.91 - - - 13,529,409.53 2.79% 2.79% - - -
Technology financing
Park Project
Xi’an
Science and Self-
227,800.00 6,171,571.90 6,507,603.03 - - - 12,679,174.93 0.56% 0.56% - - -
Technology financing
Park project
EZVIZ
Self-
Industry 79,800.00 - 2,332,067.08 - - - 2,332,067.08 0.29% 0.29% - - -
financing
Park
Self-
Others - 157,752,946.32 399,106,638.93 (239,326,591.23) (3,744,572.05) (26,352,626.40) 287,435,795.57 - - - - -
financing
Total 731,800.00 631,555,479.06 1,063,103,504.34 (239,326,591.23) (3,744,572.05) (26,352,626.40) 1,425,235,193.72 - - 53,686,015.19 58,884,747.25
Note 1: Other reductions during the year were the completion of the construction of financial leasing project assets and transferred to long-term receivables.
Note 2: This amount is calculated by interest expense for specific foreign currency borrowings, less interest income for unused borrowing fund and profit/loss on exchange rate difference.
As of December 31st 2020, the Group did not have any sign of impairment of projects under construction; therefore, no provision for impairment loss was booked.
279
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
17. Intangible assets
17.1 Details of Intangible assets
Unit: RMB
Intellectual Application Franchise
Item Land use right Total
property right Software
Total original
carrying amount
1.Opening
973,043,453.70 66,993,435.51 280,896,635.94 - 1,320,933,525.15
balance
2. Increased 251,850,478.79 5,394,189.23 24,738,514.02 13,091,615.51 295,074,797.55
(1) Purchase 251,850,478.79 5,394,189.23 24,535,277.43 13,091,615.51 294,871,560.96
(2) Increase
in
business
merger - - 203,236.59 - 203,236.59
not under
common
control
3.Decreased - 2,218,158.40 6,222,967.65 - 8,441,126.05
(1)Disposal or
- 2,218,158.40 6,222,967.65 - 8,441,126.05
write-off
4.Effect on
conversion of
financial
- (125,431.46) (599,314.89) - (724,746.35)
statements
denominated in
foreign currencies
5.Closing balance 1,224,893,932.49 70,044,034.88 298,812,867.42 13,091,615.51 1,606,842,450.30
Total accumulated
amortization
1.Opening
53,291,064.90 51,532,190.15 169,987,762.46 - 274,811,017.51
balance
2.Increased 23,321,497.39 10,836,131.28 51,730,781.87 1,126,160.47 87,014,571.01
(1)Accrual 23,321,497.39 10,836,131.28 51,730,781.87 1,126,160.47 87,014,571.01
3.Decreased - 1,603,085.50 4,210,982.42 - 5,814,067.92
(1)Disposal or
- 1,603,085.50 4,210,982.42 - 5,814,067.92
write-off
4.Effect on
conversion of
financial
- (46,755.83) (440,238.16) - (486,993.99)
statements
denominated in
foreign currencies
5. Closing balance 76,612,562.29 60,718,480.10 217,067,323.75 1,126,160.47 355,524,526.61
Provision for decline
in value
1.Opening
- - - - -
balance
2.Increased - - - - -
3. Decreased - - - - -
4.Closing balance - - - - -
Total book value
Closing balance on
1,148,281,370.20 9,325,554.78 81,745,543.67 11,965,455.04 1,251,317,923.69
book value
Opening balance on
919,752,388.80 15,461,245.36 110,908,873.48 - 1,046,122,507.64
book value
280
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
17.2 At the end of the year, the intangible assets of the Group that have not completed the title certificate are as
follows：
Unit: RMB
Item Carrying value Reasons for not getting the title certificate
Land use right of Nanchang Science and Technology
103,774,766.90 The land certificate is still in process
Park
Total 103,774,766.90
18. Goodwill
18.1 Goodwill book value
Unit: RMB
Increased Decreased Effect on
conversion of
Business combination financial
The name of the investee or the matter Opening Liquidation
not involving statements Closing balance
that forming a goodwill balance &
enterprises under denominated in
cancellation foreign
common control
currencies
Secure Holdings Limited (SHL) 139,374,307.33 - - (9,054,133.14) 130,320,174.19
HuaAn Baoquan Intelligence and its
61,322,871.63 - - - 61,322,871.63
subsidiaries
Hangzhou Kuangxin Technology Co.,
59,060,454.06 - - - 59,060,454.06
Ltd.
Hundure Technology (Shanghai) Co.,
13,774,405.88 - - - 13,774,405.88
Ltd.
BK EESTI AKTSIASELTS(Note) - 4,718,796.04 - 107,470.90 4,826,266.94
SIA “BK Latvia”(Note) - 4,712,247.69 - 107,321.75 4,819,569.44
ZAO Hikvision 67,349.64 - - - 67,349.64
Hangzhou Haikang Zhicheng
Investment and Development Co., 12,573.42 - - - 12,573.42
Ltd.
Total 273,611,961.96 9,431,043.73 - (8,839,340.49) 274,203,665.20
Note: The Group acquired BK EESTI AKTSIASELTS and SIA “BK Latvia” in October 2020, and formed goodwill of RMB 4,718,796.04 and
RMB 4,712,247.69, respectively. See Note (VI) and 1.
18.2 Provision of impairment in goodwill
The key assumptions used in the Group’s annual impairment test performed for goodwill at the end of the reporting period:
The recoverable amounts of the relevant assets have been determined on the discounted present value of the future cash
flow projections. The cash flow projections are based on 2021-2025 Financial Budgets approved by management covering
a 5-year period, with certain discount rates. The sets of cash flows beyond the 5-year period are projected based on 0%-
2% growth rate. These growth rates are based on the relevant industry growth forecasts and do not exceed the average
long-term growth rate for the relevant industry. Expected cash inflows/outflows, considering budgeted net sales, cost of
revenue and operating expenses, have been determined by management based on past performance and expectations for
the future market development.
In the current year, the Group did not find that the recoverable amount of the goodwill of the relevant asset group which
was lower than its book value, so it believed that there was no need for impairment loss provisions.
281
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
19. Long-term deferred expenses
Unit: RMB
Difference of
Invested unit Opening Balance Increased Amortized foreign currency Closing balance
translation
Improvement expenditure for
87,611,490.75 68,051,877.78 44,742,828.97 (2,335,852.71) 108,584,686.85
leased fixed asset
Total 87,611,490.75 68,051,877.78 44,742,828.97 (2,335,852.71) 108,584,686.85
20. Deferred tax assets/deferred tax liabilities
20.1 Deferred tax assets that are not presented on net off basis
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for impairment
439,119,363.43 118,145,320.66 272,015,493.85 72,480,367.65
losses of assets
Provision for credit loss 1,539,163,635.55 317,826,951.61 1,409,847,170.59 292,275,236.58
Payroll payables 340,995,206.97 67,364,166.74 353,810,837.41 55,990,855.40
Share-based payment 395,569,612.03 63,817,274.43 273,114,847.21 43,340,918.66
Provisions 125,721,860.51 20,746,514.91 78,353,085.64 15,477,040.83
Expenditure without invoice 343,485,705.59 79,499,747.08 228,359,902.54 52,419,606.75
Unrealized profit from inter-
1,332,036,632.93 203,654,079.47 1,157,820,970.68 187,268,546.98
group transactions
Changes in the fair value of
derivative financial 4,862,446.50 1,215,611.63 652,428.18 163,107.05
instruments
Deferred income 175,339,879.57 28,307,816.27 288,449,840.21 51,155,882.21
Total 4,696,294,343.08 900,577,482.80 4,062,424,576.31 770,571,562.11
282
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
20.2 Deferred tax liabilities that are not presented on net off basis
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Difference in fixed asset
792,868,727.84 155,188,912.37 680,837,730.59 129,970,264.62
depreciation
Difference in amortization
2,077,910.40 311,686.57 1,386,714.30 208,007.14
of intangible assets
Changes in the fair value
of derivative financial 18,487,400.00 4,621,850.00 181.76 45.44
instruments
Changes in fair value of
other non-current financial 87,026,019.27 13,053,902.89 17,547,234.44 2,632,085.17
assets
Total 900,460,057.51 173,176,351.83 699,771,861.09 132,810,402.37
20.3 Deferred tax assets or deferred tax liabilities that are presented at the net amount after offset
Unit: RMB
Closing balance Opening balance
Deferred tax assets or Offset amount at the Deferred tax assets or
Item Offset amount at the end
liabilities at the net beginning of the liabilities at the net
of the reporting period
amount after offset reporting period amount after offset
Deferred tax assets 80,196,527.94 820,380,954.86 81,722,298.41 688,849,263.70
Deferred tax liabilities 80,196,527.94 92,979,823.89 81,722,298.41 51,088,103.96
20.4 Unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 788,077,425.69 306,240,573.47
Deductible losses 2,881,025,358.37 2,630,277,858.25
Total 3,669,102,784.06 2,936,518,431.72
20.5 Deductible losses of unrecognized deferred income tax assets that will expire in the following years
Unit: RMB
Year Closing balance Opening balance
2020 - 3,636,058.38
2021 39,781,118.30 90,274,644.51
2022 318,339,826.45 331,787,605.27
2023 490,824,542.00 490,824,542.00
2024 1,289,599,782.28 1,713,755,008.09
2025 742,480,089.34 -
Total 2,881,025,358.37 2,630,277,858.25
21. Other non-current assets
Unit: RMB
Item Closing balance Opening balance
Contract assets 600,392,481.02 751,457,739.44
Prepayments for acquisition of land 79,046,571.00 818,200.00
Prepayments for equipment 26,838,623.06 85,573,983.95
Prepayments for infrastructure 15,233,481.00 13,942,203.53
Prepayments for equity investment - 13,794,550.00
Total 721,511,156.08 865,586,676.92
283
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
22. Short-term borrowings
22.1 Categories of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Fiduciary loan 3,999,246,634.59 2,640,082,485.15
Total 3,999,246,634.59 2,640,082,485.15
22.2 As of December 31st 2020, the Group did not have any overdue short-term loans that were failed to repay.
23. Held-for-trading financial liabilities
Unit: RMB
Item Closing balance Opening balance
Financial liabilities measured at fair value through
7,405,771.15 652,428.18
current profits and losses
Including: derivative financial liabilities 7,405,771.15 652,428.18
total 7,405,771.15 652,428.18
As of December 31st 2020, the Group’s outstanding forward foreign exchange contracts include forward contracts which
sell USD and buy RMB, forward contracts which sell EUR and buy USD, etc. with a nominal value of RMB
498,858,533.76 (December 31st 2019: RMB 202,529,600.00), and its outstanding foreign exchange option contracts
include USD call options, etc. with a nominal value of RMB 815,612,500.00 (2019: nil). Such forward foreign exchange
contracts and foreign exchange option contracts are not designated as hedging instruments, and gains or losses arising
from changes in fair value are recognized directly in current profit or loss.
24. Notes payable
Unit: RMB
Item Closing balance Opening balance
Bank acceptance Bill 1,036,920,229.85 1,239,584,016.70
Total 1,036,920,229.85 1,239,584,016.70
As of December 31st 2020, the Group did not have any unpaid matured notes payable.
25. Accounts payable
25.1 List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payments for goods 13,461,766,461.74 12,526,135,911.98
Payables on equipment 132,118,328.45 173,939,395.72
Total 13,593,884,790.19 12,700,075,307.70
25.2 As of December 31st 2020, the Group did not have any significant accounts payable with aging above one year.
26. Contract liabilities
26.1 List of contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advanced receipts from sales of products 1,605,290,145.88 719,153,423.32
Advanced receipts for construction settlement payment 401,866,195.59 451,153,147.28
Advanced receipts from services 154,010,329.79 107,249,547.00
Total 2,161,166,671.26 1,277,556,117.60
284
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
26.2 Qualitative and Quantitative Analysis on the Above Contract Liabilities:
According to the New Revenue Standards which has been implemented since January 1st 2020, the Group reclassified the
obligation to transfer goods to a customer for which consideration has been received into contract liabilities as detailed in
Note (III) 32.
Advanced receipts for product sales include prepayments for goods by customers and sales rebates provided to distributors.
Product sales revenue of the Group is recognized when the control of such product is transferred to the customers. During
the transaction, prepayments for goods by customers are recognized as a contract liability till the goods are shipped or
delivered to the customers. Sales rebates to distributors of the Group may be accumulated when they purchase products
from the Group, and are deductible for payments for goods to be purchased in the future. Such sales rebates enable
distributors to enjoy discounts in their future purchase of goods, which are not available to the same type of customers.
Therefore, the commitment to offer such discounts to distributors on their future purchase prices is a separate performance
obligation. Such commitment is recognized as a contract liability based on the transaction price allocated on the basis of
the fair value of rebates when the sales transaction takes place, and is recognized as revenue when distributors use the
sales rebates for deduction of purchase prices.
The Group provides construction works and maintenance services based on the construction works and maintenance
service contracts with customers, and recognizes revenue based on the performance progress during the term of the
contracts. The Group’s customers make milestone payments for the construction works and maintenance services of the
Group as provided in the contracts. For the portion where the Group has obtained an unconditional right to the payment,
it will be recognized as accounts receivable, while the remaining portion will be recognized as contract assets; where the
contract price received or receivable by the Group exceeds the performance obligation completed to date, the excess
portion will be recognized as contract liabilities. The Group presents contract assets and contract liabilities under the same
contract on a net basis.
The Group provides cloud services including storage service, video service, and telephone service to its customers. Such
services are performance obligations to be satisfied during a period of time, and revenue is recognized based on the
performance progress over the period in which such services are rendered. As customers have prepaid for cloud services
at the time of purchase, at the time of transaction, the Group recognizes as a contract liability for the payments that would
be received for cloud services, and recognizes revenue based on the performance progress over the period in which such
services are rendered.
26.3 On January 1st 2020, contract liabilities with a book value of RMB 1,277,556,117.60 have been recognized as
revenue in 2020, including RMB 719,153,423.32 of contract liabilities arising from advanced receipts for product sales,
RMB 451,153,147.28 of contract liabilities arising from advanced receipts for construction settlement amounts, and
RMB 107,249,547.00 of contract liabilities arising from advanced receipts for cloud services. As of December 31st 2020,
RMB 2,161,166,671.26 of contract liabilities are expected to be recognized as revenue within the next fiscal year.
27. Payroll payable
27.1 Details of payroll payable
Unit: RMB
Increase in the Decrease in the
Item Opening balance current reporting current reporting Closing balance
period period
1.Short-term remuneration 2,350,226,309.38 10,301,532,329.56 9,793,161,156.45 2,858,597,482.49
2. Termination benefits – defined
9,448,330.74 464,404,043.99 454,663,426.51 19,188,948.22
contribution scheme
Total 2,359,674,640.12 10,765,936,373.55 10,247,824,582.96 2,877,786,430.71
27.2 List of Short-term remuneration
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period reporting period
1.Wages or salaries,
bonuses, allowances and 2,194,538,939.13 9,182,646,162.58 8,706,122,709.43 2,671,062,392.28
subsidies
285
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
2.Staff welfare 74,284.72 142,891,180.65 142,951,164.55 14,300.82
3.Social insurance
746,726.43 375,957,975.97 365,477,160.47 11,227,541.93
contributions
Including:
671,240.08 360,762,800.40 350,581,697.41 10,852,343.07
Medical insurance
Injury insurance 24,637.32 7,622,958.77 7,317,340.46 330,255.63
Maternity insurance 50,849.03 7,572,216.80 7,578,122.60 44,943.23
4.Housing funds 132,910.00 467,536,191.39 467,522,907.38 146,194.01
5.Labor union and
154,733,449.10 132,500,818.97 111,087,214.62 176,147,053.45
education fund
Subtotal 2,350,226,309.38 10,301,532,329.56 9,793,161,156.45 2,858,597,482.49
27.3 Defined contribution scheme
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
1.Basic pension insurance 9,009,304.85 448,873,230.48 439,217,131.24 18,665,404.09
2.Unemployment insurance 439,025.89 15,530,813.51 15,446,295.27 523,544.13
Subtotal 9,448,330.74 464,404,043.99 454,663,426.51 19,188,948.22
Note：
Pursuant to The Notification of the Ministry of Human Resources and Social Security, the Ministry of Finance and the State
Taxation Administration about the Staged Reduction and Exemption of Social Insurance Premiums Payable by Enterprises (No.
11 [2020] of the Ministry of Human Resources and Social Security) jointly issued by the Ministry of Human Resources and
Social Security, the Ministry of Finance and the State Taxation Administration, the Company and part of its subsidiaries shall
enjoy a staged reduction or exemption for the contributions by the employer to basic pension insurance, unemployment insurance
and injury insurance (hereinafter referred to as the “three social insurances”) payable by them during the current fiscal year.
Pursuant to The Guidance Opinions of National Healthcare Security Administration, Ministry of Finance and the State Taxation
Administration about the Staged Reduction of Basic Medical Insurance Premiums Payable by Employees (No. 6 [2020] National
Healthcare Security Administration) jointly issued by National Healthcare Security Administration, Ministry of Finance and the
State Taxation Administration, the Company and part of its subsidiaries shall enjoy 50% reduction for the contributions by the
employer to the basic medical insurance during the current fiscal year.
During the reporting periods, the employees of the Group are the members of state-managed retirement benefit plan, and
unemployment insurance plan, operated by the respective governments of these jurisdictions. The Group is required to
contribute specified percentage out of payroll costs to the retirement benefit schemes and unemployment insurance
schemes to fund the benefits. The Group has no other material obligation for the payment of pension benefits beyond the
contributions described above, and corresponding expenses were booked into profits and losses of related assets during
the current period.
The Group shall pay a total of RMB 448,873,230.48 and RMB 15,530,813.51 (2019: RMB 451,708,456.17 and RMB
17,424,763.78) to the pension insurance and unemployment insurance schemes respectively during the current fiscal year.
On December 31st 2020, the Group still had RMB 18,665,404.09 and RMB 523,544.13 (December 31st 2019: RMB
9,009,304.85 and RMB 439,025.89) payable expenses for pension insurance and unemployment insurance schemes that
were due during the current reporting period but were not paid. The relevant dues have been paid off after the reporting
period.
28. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Enterprise income tax 1,403,744,369.98 553,486,554.42
Value-added tax 294,728,811.39 331,490,538.56
City construction and maintenance tax 17,924,699.09 21,992,627.00
286
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Item Closing balance Opening balance
Education surcharges 7,547,297.38 9,283,542.86
Local education surcharges 5,437,435.12 6,385,473.76
Others 40,675,295.66 68,704,069.31
Total 1,770,057,908.62 991,342,805.91
29. Other payables
29.1 Categories
Unit: RMB
Item Closing balance Opening balance
Dividend payable 205,898,523.84 108,129,385.24
Other payables 1,319,154,832.11 1,236,973,748.79
Total 1,525,053,355.95 1,345,103,134.03
29.2 Dividends payable
Unit: RMB
Item Closing balance Opening balance
Dividends of incentive restricted shares 205,898,523.84 105,679,385.24
Dividends of common shares - 2,450,000.00
Total 205,898,523.84 108,129,385.24
29.3 Other payables
(1) List of other payables according to the nature of the payment
Unit: RMB
Item Closing balance Opening balance
Unexpired commercial acceptance bills that were endorsed (Note
482,454,604.99 329,309,522.17
(V)-3)
Accrued expenses 337,678,697.37 384,494,722.84
Guarantee and deposit fees 298,869,865.03 240,507,892.79
Collection and payment on behalf 157,485,875.39 220,858,972.11
Investment payable - 12,400,000.00
Other expense payable 42,665,789.33 49,402,638.88
Total 1,319,154,832.11 1,236,973,748.79
(2) As of December 31st 2020, the Group did not have any significant other payables aging over one year.
30. Non-current liabilities due within one year
Unit：RMB
Item Closing balance Opening balance
Long-term borrowings due within one year (Note (V) 32) 3,486,243,087.91 69,893,081.33
Long-term payables due within one year (Note (V) 33) 21,437,251.87 16,230,072.73
Total 3,507,680,339.78 86,123,154.06
31. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
287
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Subscription payment of restricted shares 560,959,368.73 913,534,538.26
Outpur VAT to be transferred 184,752,210.84 74,324,355.92
Short-term commercial paper (SCP) - -
Total 745,711,579.57 987,858,894.18
Short-term commercial paper (SCP) information as follow：
Unit: RMB
Issued during the Repaid during the Interest payable this
Item Opening balance Closing balance
current fiscal year current fiscal year year
Short-term
commercial paper - 1,000,000,000.00 1,000,000,000.00 - -
(SCP) (Note)
Total - 1,000,000,000.00 1,000,000,000.00 - -
Note: As approved by the Notice of Acceptance of Registration from the China Interbank Market Dealers Association
(China Interbank Market Dealers Association ZhongShiXieZhu [2020] No. SCP301), the Company publicly issued
10,000,000 Short-term Commercial Paper (SCP) on June 4th 2020 with a par value of RMB 100 each, a maturity of 180
days, and an annual interest rate of 1.75%. The maturity date of the SCP is December 1st 2020, which had already expired
as of the end of the current fiscal year with a one-off repayment of principal and interest.
32. Long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan (Note 1) 1,556,927,316.08 1,348,034,851.48
Fiduciary loan (Note 2) 3,700,483,533.13 3,136,026,801.28
Other borrowing (Note 3) 190,000,000.00 190,000,000.00
Less：Long-term loans due within one year (Note (V) 30) 3,486,243,087.91 69,893,081.33
Total 1,961,167,761.30 4,604,168,571.43
Note 1: As of December 31st 2020, RMB 280,638,571.42 of the pledged loan was obtained by the Group with all the rights
and benefits pledged under the Urumqi High-tech Zone (New Urban Area) Safe City & Surveillance system for Social
Comprehensive Management -- PPP Project Agreement; the maturity date is June 20th 2028, the annual interest rate is
4.41%.
RMB 182,800,000.00 of the pledged loan was obtained by the Group with all the rights and benefits pledged under the
MoYu Security Protection and Prevention Control System-- PPP Project Agreement; the maturity date is March 26th 2035,
among them, the annual interest rate of RMB 141,200,000.00 of the loan is 4.445%. , the annual interest rate of RMB
41,600,000.00 of the loan is 4.345%
RMB 223,780,000.00 of the pledged loan was obtained by the Group with all the rights and benefits pledged under the
PiShan Security Protection and Prevention Control System-- PPP Project Agreement; the maturity date is March 26th 2040,
among them, the annual interest rate of RMB 172,800,000.00 of the loan is 4.445%. , the annual interest rate of RMB
50,980,000.00 of the loan is 4.345%.
RMB 228,000,000.00 of the pledged loan was obtained by the Group with all the rights and benefits pledged under the
LuoPu Security Protection and Prevention Control System-- PPP Project Agreement; the maturity date is March 26th 2035,
among them, the annual interest rate of RMB 140,800,000.00 of the loan is 4.445%, the annual interest rate of RMB
87,200,000.00 of the loan is 4.245%.
RMB 95,600,000.00 of the pledged loan was obtained by the Group with all the rights and benefits pledged under the
YuTian Safe City-- PPP Project Agreement; the maturity date is March 26th 2034, the annual interest rate is 4.245%.
RMB 544,000,000.00 of the pledged loan was obtained by the Group with all the rights and benefits pledged under the
Xi'an Public Security Video Surveillance Construction Network Application Construction--Public-Private Partnership
(PPP) Project Agreement; the maturity date is November 5th 2031, among them, the annual interest rate of RMB
288
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
325,000,000.00 of the loan is 4.445%, and the annual interest rate of RMB 219,000,000.00 of the loan is 4.345%.
Note 2: As of December 31st 2020, the credit loan with a book value of RMB 3,210,000,000.00 was 400 million euros in
credit loans, which was mainly used for the investment and construction of the Company's Hangzhou Innovation Industrial
Park project and Xi'an Science and Technology Park project, the maturity date is December 14th 2021, and the interest rate
is 0.85%.
The book value of the credit loan is RMB 480,000,000.00, which is mainly used for the acquisition of the thermal imaging
division asset group by Hangzhou HikMicro Sensing Technology Co., Ltd., a subsidiary of the Group, and the maturity
dates are September 28th 2022 and September 27th 2023, respectively.and the annual interest rate is 3.20%.
Note 3: During 2016, the Group entered into an agreement with CDB Development Fund Ltd. (CDBDF) to jointly inject
capital into Hikvision Electronics Co., Ltd. ("Hangzhou Electronics"), a subsidiary of the Group. Pursuant to the capital
injection agreement, CDBDF would not participate in senior management personnel such as directors, and it would either
take part in decision-making or make significant influence on Hangzhou Electronics. The Group shall pay a 1.2%
annualized return to CDBDF through dividends or interest payments, and the Group is required to redeem the CDBDF's
equity investment in the current reporting period by installments each year from 2021 to 2024. Therefore, the capital
injection by CDBDF is treated as a long-term loan. As of December 31st 2020, CDBDF has aggregately invested RMB
190 million (December 31st 2019: RMB 190 million).
33. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Payables for financial leasing 23,052,993.27 42,181,416.72
Purchase goods in installments 8,542,466.08 -
Borrowing 8,000,000.00 8,000,000.00
Total 39,595,459.35 50,181,416.72
Unit: RMB
Details of financial lease payables in long-term payables Closing balance Opening balance
1st year after the balance sheet date 21,389,896.88 19,265,287.22
2nd year after the balance sheet date 14,374,551.20 21,387,869.19
3rd year after the balance sheet date 10,420,815.85 14,137,481.89
Future years - 10,420,815.85
Total minimum lease payments 46,185,263.93 65,211,454.15
Unrecognized financing costs 3,829,657.27 6,799,964.70
Finance lease payable 42,355,606.66 58,411,489.45
Including: Finance lease payable due within 1 year 19,302,613.39 16,230,072.73
Finance lease payable due after 1 year 23,052,993.27 42,181,416.72
34. Provisions
Unit: RMB
Item Closing balance Opening balance
Product quality warranty 151,443,871.02 90,570,669.01
Total 151,443,871.02 90,570,669.01
35. Deferred income
Unit: RMB
Increase in current Decrease in current
Item Opening balance Closing balance Details
reporting period reporting period
289
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Government Subsidies 226,340,284.30 46,112,100.00 81,573,396.61 190,878,987.69 Note
Total 226,340,284.30 46,112,100.00 81,573,396.61 190,878,987.69
As of December 31st 2020, the deferred income related to government subsidies:
Unit: RMB
Increase in Amounts booked into Related to
Opening Other
Liability Items current reporting other income during the Closing Balance assets/related to
Balance changes
period current reporting period incomes
Chongqing
Manufacture Park 79,254,065.44 - 2,418,930.00 - 76,835,135.44 Related to assets
construction
Projects of core
electronic devices,
high-end universal 62,827,863.01 - 62,827,863.01 - - Related to incomes
chips and basic
software products
Other special
43,466,515.09 - 10,650,914.29 - 32,815,600.80 Related to assets
subsidies
Other special
40,791,840.76 46,112,100.00 5,675,689.31 - 81,228,251.45 Related to incomes
subsidies
Subtotal 226,340,284.30 46,112,100.00 81,573,396.61 - 190,878,987.69
Note 1: Refer to government subsidies received by the Group for projects of Core Electronic Devices, High-end Universal
Chip and Basic Software Products, Chongqing Manufacture Park construction, and other projects; Actual expenses
occurred in the current reporting period for projects of core electronic devices, high-end universal chips and basic software
products and other special subsidies related to incomes were recognized in other income; and relevant assets for Chongqing
Manufacture Park construction and other special subsidies related to assets were amortized averagely in other income
within the assets’ useful lives.
36. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription for restricted stocks 560,959,368.74 1,234,739,326.10
Total 560,959,368.74 1,234,739,326.10
37. Share capital
Unit: RMB
Changes for the current reporting period
Opening balance New issue of Transfer from Closing balance
Bonus issue Others (Note) Subtotal
shares Capital Reserve
2020
Total
9,345,010,696.00 - - - (1,593,506.00) (1,593,506.00) 9,343,417,190.00
shares
2019
Total
9,227,270,473.00 121,195,458.00 - - (3,455,235.00) 117,740,223.00 9,345,010,696.00
shares
Note: On December 24th 2019, in accordance with the authorization of the Company’s 2016 second extraordinary general
meeting and the resolutions of the 14th meeting of the fourth board of directors and the revised articles of association, the
Company repurchased and cancelled the granted 1,593,506 restricted RMB treasury shares that have not been unlocked,
reducing the share capital by RMB 1,593,506.00 and the capital reserve by RMB 11,823,911.35. The Company had
completed the repurchase cancellation registration on December 17th 2020.
38. Capital reserves
Unit: RMB
290
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Increase in the Decrease in the
current reporting current reporting
Item Opening balance Closing balance
period period
(Note 1) (Note 2)
2020
Share premium 3,834,418,853.06 985,668,869.46 72,278,815.14 4,747,808,907.38
Other capital reserves 292,524,845.90 782,471,622.99 644,027,914.18 430,968,554.71
Total 4,126,943,698.96 1,768,140,492.45 716,306,729.32 5,178,777,462.09
2019
Share premium 1,828,917,545.39 2,039,710,482.49 34,209,174.82 3,834,418,853.06
Other capital reserves 127,222,115.13 268,309,794.42 103,007,063.65 292,524,845.90
Total 1,956,139,660.52 2,308,020,276.91 137,216,238.47 4,126,943,698.96
Note 1: The RMB 644,027,914.18 increase in share capital premium during the current fiscal year was due to equity-
settled share-based payment exercised this year, and other capital reserves were transferred to share capital premium; the
RMB 341,640,955.28 was due to the business integration of the thermal imaging business and intelligent fire protection
and control of the Group through transferring the asset groups of the thermal imaging business department to the holding
subsidiary Hangzhou Hikmicro by the Company, and transferring the asset groups of the intelligent fire protection and
control business department, and 100% equity interests in Wuhan Hikvision Fire Protection and Control Technology Co.,
Ltd. (“Wuhan Fire Protection and Control”) and Zhejiang Hikvision Fire Control Protection Technology Co., Ltd.
(Zhejiang Fire Protection and Control) to its holding subsidiary Hangzhou Hikfire Technology by the Company, the
difference between the collected transfer consideration and the transferred net assets is formed, the shareholding ratio in
the two companies was changed from direct holding of 100% to indirect holding of 60%. Please refer to Note (VII) 2 and
Note (XV) 6 for details.
The increase of RMB 782,471,622.99 in other capital reserves in the current fiscal year was calculated with equity-settled
share-based payments which were included in the capital reserve. Please refer to Note (XI) for details.
The RMB 103,007,063.65 increase in share capital premium during the prior year was due to equity-settled share-based
payments exercised during the current fiscal year, and other capital reserves were transferred to share capital premium;
the RMB 1,936,703,418.84 increase in share capital premium was due to the implementation of share registration in 2019
for the restricted stocks granted in the prior year.
The RMB 268,309,794.42 increase in other capital reserves in the prior year was due to equity-settled share-based
payments and was included in the capital reserve.
Note 2: The decrease of RMB 11,823,911.35 in share capital premium during the current fiscal year was due to the
Company’s repurchase of 1,593,506 granted but unlocked RMB treasury shares by cash, please refer to Note (V) 37-2;
The decrease of RMB 29,967,599.60 in share capital premium during the current fiscal year was due to share distributions
by equity settlements to minority shareholders; The decrease of RMB 30,487,304.19 in share capital premium was due to
the difference between the payment of the consideration and the share of identifiable net assets calculated based on the
newly increased shareholding ratio as a result of acquisition of 42.86% minority interest in each of the holding subsidiaries
Hua’An Baoquan Intelligence and Hua’An Bao Quan Electronics, please refer to Note (VII) 2.
The decrease of RMB 23,441,881.20 in share capital premium during the prior year was due to the Company’s repurchase
of 3,455,235 granted but unlocked RMB treasury shares by cash, please refer to Note (V) 37- 2; The decrease of RMB
10,767,293.62 in share capital premium during the prior year was due to share distributions by equity settlements to
minority shareholders during the prior year.
39. Treasury shares
Unit: RMB
Increase in the Decrease in the
Item Opening Balance current reporting current reporting Closing balance
period (Note 1) period (Note 2)
2020
Restricted shares incentive scheme 2,148,273,864.36 - 1,026,355,126.89 1,121,918,737.47
Total 2,148,273,864.36 - 1,026,355,126.89 1,121,918,737.47
2019
Restricted shares incentive scheme 364,984,759.94 2,057,898,876.84 274,609,772.42 2,148,273,864.36
291
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Total 364,984,759.94 2,057,898,876.84 274,609,772.42 2,148,273,864.36
Note 1: The increase of treasury shares in the prior year was due to granting of 121,195,458 restricted RMB ordinary
shares to 6,095 grantees, with issuing price of RMB 16.98 per share.
Note 2: During the current reporting period, the decreased amounts of treasury shares includes a decrease of RMB
12,301,866.32 due to the repurchase and cancellation of 1,593,506 restricted RMB ordinary shares of 2016 Restricted
Share Incentive Scheme; a decrease of RMB 101,334,592.80 in treasury shares was due to provision of cash dividend
allocated to restricted shares; a decrease of RMB 197,839,337.85 in treasury shares was due to unlocking of 21,204,645
shares for the expiry of the 3rd unlocking period of the Company’s 2016 Restricted Share Incentive Scheme; and a decrease
of RMB 714,879,329.92 in treasury shares was due to unlocking of 45,591,794 shares for the expiry of the 1st unlocking
period of the Company’s 2018 Restricted Share Incentive Scheme.
During the prior year, the decreased amounts of treasury shares includes a decrease of RMB 1,086,067.50 due to the
repurchase and cancellation of 509,625 restricted RMB ordinary shares of 2014 Restricted Share Incentive Scheme; a
decrease of RMB 20,383,621.20 in treasury shares was due to the repurchase and cancellation of 2,945,610 restricted
RMB ordinary shares of 2016 Restricted Share Incentive Scheme; a decrease of RMB 102,033,123 in treasury shares
was due to provision of cash dividend allocated to restricted shares; a decrease of RMB 151,106,960.72 in treasury shares
was due to unlocking of 21,836,266 shares for the expiry of the 2nd unlocking period of the Company’s 2016 Restricted
Share Incentive Scheme.
.
292
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
40. Other comprehensive income
Unit: RMB
Amounts occurred in the current reporting period
The before- Less: transfer
income-tax to current
Less: Attributable to Attributable to
Opening amount period P/L
Item income the parent minority Closing balance
balance incurred during from previous
tax company (after shareholders
the current other expense tax) (after tax)
reporting comprehensive
period
income
2020
Other incomes
that may be
reclassified
(53,541,146.99) (34,145,243.17) - - (31,452,779.95) (2,692,463.22) (84,993,926.94)
subsequently
to profit or
loss
Included:
Effect on
conversion of
financial
(53,541,146.99) (34,145,243.17) - - (31,452,779.95) (2,692,463.22) (84,993,926.94)
statements
denominated
in foreign
currencies
Other
comprehensive (53,541,146.99) (34,145,243.17) - - (31,452,779.95) (2,692,463.22) (84,993,926.94)
income
2019
Other incomes
that may be
reclassified
(49,576,351.10) (4,658,993.77) - - (3,964,795.89) (694,197.88) (53,541,146.99)
subsequently
to profit or
loss
Included:
Effect on
conversion of
financial
(49,576,351.10) (4,658,993.77) - - (3,964,795.89) (694,197.88) (53,541,146.99)
statements
denominated
in foreign
currencies
Other
comprehensive (49,576,351.10) (4,658,993.77) - - (3,964,795.89) (694,197.88) (53,541,146.99)
income
41. Surplus reserves
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period reporting period
2020
Statutory surplus reserves (Note) 4,672,505,348.00 - - 4,672,505,348.00
Total 4,672,505,348.00 - - 4,672,505,348.00
2019
Statutory surplus reserves (Note) 4,460,712,358.45 211,792,989.55 - 4,672,505,348.00
Total 4,460,712,358.45 211,792,989.55 - 4,672,505,348.00
Note: According to the Company Law of the People's Republic of China and the Articles of Association of the Company,
The Company shall withdraw the statutory surplus reserve fund at 10% of the annual net profit, and when the accumulated
amount of the statutory surplus reserve fund reaches more than 50% of the registered capital, it may not be withdrawn.
The Company withdrew a statutory surplus reserve of RMB 211,792,989.55 in the prior year, and accumulatively withdrawn
293
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
a statutory surplus reserve of RMB 4,672,505,348.00, which has reached 50% of the Company's share capital, so no
subsequent statutory surplus reserve will be accrued in the current fiscal year.
The statutory surplus reserve can be used to make up for losses or increase the share capital after approval.
42. Retained earnings
Unit: RMB
Item 2020 2019
Retained Earnings at the close of the prior reporting period 28,961,389,145.22 22,359,856,271.42
Add: Net profit attributable to the parent company for the
13,385,526,714.15 12,414,587,690.45
current reporting period
Subtract: Statutory surplus reserves - 211,792,989.55
Dividends payable on common shares (Note) 6,540,392,033.00 5,601,261,827.10
Retained earnings at the end of the current reporting period 35,806,523,826.37 28,961,389,145.22
Note：According to the resolution of 2019 annual General Meeting dated on May 15th 2020, based upon the total capital
share of the Company on the equity distribution date, for each 10 ordinary shares, the Company distributed cash dividends
of RMB 7 (tax inclusive), the rest of retained earnings were all carried forward for future distributions.
43. Operating income/operating cost
43.1 Operating income and operating cost
Unit: RMB
2020 2019
Item
Revenue Cost Revenue Cost
Operating income 62,879,112,889.36 33,607,174,664.31 57,080,710,049.95 30,823,984,977.93
Other operating income 624,338,002.42 350,523,193.42 577,400,015.27 316,191,799.19
Total 63,503,450,891.78 33,957,697,857.73 57,658,110,065.22 31,140,176,777.12
43.2 Operating business (by business type)
Unit: RMB
2020
Item
Revenue Cost
Product sales 60,287,664,582.89 32,012,524,098.76
Construction contract 1,614,246,940.42 1,353,524,939.67
Provide services 977,201,366.05 241,125,625.88
Total 62,879,112,889.36 33,607,174,664.31
43.3 Operating business (by the time of revenue recognition)
Unit: RMB
2020
Item
Revenue Cost
Recognized at some point 60,287,664,582.89 32,012,524,098.76
Recognition took place within a
2,591,448,306.47 1,594,650,565.55
certain period of time
Total 62,879,112,889.36 33,607,174,664.31
294
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
43.4 Operating business (By product or business type)
Unit: RMB
2020
Item
Revenue Cost
Front-end equipment 28,841,213,141.09 12,797,470,301.71
Back-end equipment 6,867,289,356.22 3,463,814,165.41
Central control equipment 10,146,396,260.19 5,587,909,127.42
Constructions 1,614,246,940.42 1,353,524,939.67
Others 9,241,620,854.47 6,536,906,909.85
Subtotal 56,710,766,552.39 29,739,625,444.06
Smart home business 2,918,904,302.62 1,772,362,386.38
Robotic business 1,358,653,520.55 703,671,619.41
Other innovative businesses 1,890,788,513.80 1,391,515,214.46
Subtotal 6,168,346,336.97 3,867,549,220.25
Total 62,879,112,889.36 33,607,174,664.31
Descriptions of Performance obligations:
The Group sells video surveillance products, smart home products, robotic products and other products and related
accessories. For sales of goods to customers, the Group recognizes revenue when the control of the goods is transferred,
i.e. when the goods are delivered to the location designated by other party, or delivered to the carrier designated by other
party, or delivered to the other party for acceptance. Since the delivery of the goods to the customer represents the right to
unconditionally receive the contract consideration, and the maturity of the payment only depends on the passage of time,
the Group recognizes a receivable when the goods are delivered to the customer. When the customer prepays for the goods,
the Group recognizes the transaction amount received as a contract liability, and recognizes revenue until the goods are
delivered to the customer.
For projects constructed for customers, since the customers could control the assets under construction during the
performance of the Group, the Group recognizes revenue according to the performance progress by treating them as the
obligations within certain period, except that the performance progress cannot be reasonably determined. The Group
applies the output method to determine the performance progress, which is based on the value to the customers of the
goods or services that have been transferred to them. Where the performance progress cannot be reasonably determined,
and the costs incurred by the Group are expected to be compensated, the revenue shall be recognized according to the
amount of the costs already incurred until the performance progress can be reasonably determined. The customers of the
Group pay the Group for the construction works by milestone payments in accordance with the contract. For the portion
where the Group has obtained an unconditional right to the payment, it will be recognized as accounts receivable, while
the remaining portion will be recognized as contract assets; where the contract price received or receivable by the Group
exceeds the performance obligation completed to date, the excess portion will be recognized as contract liabilities. The
Group presents contract assets and contract liabilities under the same contract on a net basis.
The Group provides customers with operation and maintenance services. Since customers obtain and consume the
economic benefits generated by the performance of the Group at the same time when the Group performs its obligations,
the Group recognizes revenue according to the performance progress by treating them as the obligations within certain
period.
The customers of the Group pay the Group for the maintenance services by milestone payments in accordance with the
contract. For the portion where the Group has obtained an unconditional right to the payment, it will be recognized as
accounts receivable, while the remaining portion will be recognized as contract assets; where the contract price received
or receivable by the Group exceeds the performance obligation completed to date, the excess portion will be recognized
as contract liabilities. The Group presents contract assets and contract liabilities under the same contract on a net basis.
The Group provides cloud services including storage service, video service, and telephone service to its customers. Such
services are performance obligations to be satisfied during a period of time, and revenue is recognized based on the
295
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
performance progress over the period in which such services are rendered. As customers have prepaid for cloud services
at the time of purchase, the Group recognizes the payments for cloud services received at the time of transaction as a
contract liability, and recognizes revenue based on the performance progress over the period in which such services are
rendered.
Sales rebates to distributors of the Group may be accumulated when they purchase products from the Group, and are
deductible for payments for goods to be purchased in the future. Such sales rebates enable distributors to enjoy discounts
in their future purchase of goods, which are not available to the same type of customers. Therefore, the commitment to
offer such discounts to distributors on their future purchase prices is a separate performance obligation. Such commitment
is recognized as a contract liability based on the transaction price allocated on the basis of the fair value of rebates when
the sales transaction takes place, and is recognized as revenue when distributors use the sales rebates for deduction of
purchase prices.
The Group provides quality assurance for the sold video surveillance products, smart home products, robotic products and
other products and related accessories, as well as the assets constructed. The quality assurance related to the products sold
by the Group cannot be purchased separately, and is a guarantee to customers that the products sold meet the established
standards, therefore, the Group conducts accounting treatment in accordance with the Accounting Standards for Business
Enterprises No. 13 - Contingencies, please refer to Note (V), 34 for details.
For sales to end consumers through the online trading platform, a 7-day or 30-day right of return is provided accordingly.
At the time of revenue recognition, a return payable is recognized for the goods expected to be returned according to the
amount expected to be returned due to the sales return; in addition, a return cost receivable is recognized according to the
balance of the book value of the goods expected to be returned at the time of transfer net of the estimated cost of recovering
the goods, and carrying over costs according to net amount of book value of the transferred goods at the time of transfer
net of the cost of the aforementioned assets. The Group estimates the number of returns at the portfolio level with its
accumulated historical experience and adopting the expected value method. In view of the stable return rate in previous
years, it is most unlikely that there will be a significant reversal for the accumulated recognized revenue.
Descriptions of allocation to the remaining performance obligations:
As of December 31st 2020, all the remaining performance obligations are part of the contracts with original expected
contract term not exceeding one year. The Group expects to recognize all of them as revenue within the next year.
44. Business Taxes and Surcharges
Unit: RMB
Items 2020 2019
City construction and maintenance tax 189,386,771.55 193,991,607.90
Education surcharges 82,442,008.19 83,931,204.13
Local education surcharges 54,915,581.40 56,338,987.32
Stamp duty 30,560,972.35 27,143,633.24
Real estate tax 20,330,766.80 36,404,025.90
Tax on use of land 3,992,258.37 5,196,493.82
Vehicle and vessel tax 151,291.55 171,445.08
Others 34,483,699.34 14,141,146.16
Total 416,263,349.55 417,318,543.55
45. Selling expenses
Unit：RMB
Items 2020 2019
Payroll 4,322,277,210.83 3,887,374,487.37
Marketing Expenses 1,156,331,130.68 1,189,955,197.73
Shipping, transportation, and vehicle expense 711,448,510.07 743,840,798.66
Travelling expenses 216,729,012.52 419,804,042.73
Office expenses 201,748,056.17 209,868,651.76
Business hospitality expenses 183,005,835.09 209,295,672.81
Rental expenses 193,697,802.86 177,800,427.54
Professional Intermediary expenses 158,620,553.03 161,222,028.36
Depreciation and amortization expenses 89,216,922.78 74,726,169.24
296
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Others 144,715,710.55 182,894,010.48
Total 7,377,790,744.58 7,256,781,486.68
46. Administrative Expenses
Unit：RMB
Items 2020 2019
Payroll 1,155,570,756.22 973,611,772.00
Office expenses 180,626,249.71 207,809,854.24
Depreciation and amortization expenses 164,558,720.85 124,598,148.82
Professional Intermediary expenses 74,792,204.76 72,435,016.26
Travelling expenses 37,760,312.22 59,312,055.12
Shipping, transportation, utility expense 41,419,386.33 56,959,599.18
Rental expenses 6,827,268.39 29,478,819.26
Business hospitality expenses 9,193,300.21 10,658,155.86
Others 119,264,890.07 287,601,021.33
Total 1,790,013,088.76 1,822,464,442.07
47. R&D Expenses
Unit：RMB
Items 2020 2019
Payroll 5,154,824,934.62 3,984,322,782.34
Consumables and service fees 533,761,090.55 563,641,365.06
Depreciation and amortization expenses 218,167,957.47 235,693,987.33
Office expenses 190,693,619.45 213,060,797.71
Intermediate testing fees 145,698,114.33 164,302,894.56
Travelling expenses 68,264,094.55 139,847,661.42
New product design fees 20,416,472.49 77,948,833.47
Rental expenses 10,791,884.40 9,242,161.63
Others 36,033,594.56 95,751,214.84
Total 6,378,651,762.42 5,483,811,698.36
48. Financial Expenses
Unit: RMB
Items 2020 2019
Interest expenses 223,386,660.79 263,960,347.94
Less：Interest income 722,845,909.92 720,921,071.27
Foreign exchange losses/ (gains) 927,956,362.97 (183,930,899.01)
Less﹕Capitalized specific loan interests and foreign
58,884,747.25 28,013,146.25
exchange differences on specific loan
Others 26,642,405.97 28,836,591.40
Total 396,254,772.56 (640,068,177.19)
49. Other income
Unit: RMB
Item 2020 2019
VAT Rebates 1,739,193,206.86 1,481,554,615.35
Special subsidies 530,334,411.76 405,744,665.57
Tax relief 32,596,557.71 5,024,025.37
Value-added tax deduction 1,457,529.48 -
Total 2,303,581,705.81 1,892,323,306.29
297
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
50. Investment income
Unit: RMB
Item 2020 2019
Long-term equity investment losses based on equity method 6,361,388.74 7,743,476.93
Investment income from other non-current financial assets during the
150,000,000.00 17,357,220.31
holding period
Investment income from disposal of held-for-trading financial assets 12,915,660.21 11,550,750.03
Investment losses for derecognition of financial assets measured at
- (2,210.18)
amortized cost
Total 169,277,048.95 36,649,237.09
51. Profits from changes in fair values
Unit: RMB
Sources of gains/losses from changes in fair values 2020 2019
Held-for-trading financial assets 22,814,664.19 (1,863,915.06)
Including: gains (losses) on the changes in fair value of
derivative financial instruments
22,814,664.19 (1,863,915.06)
Gains from changes in fair value of other non-current financial
assets
69,478,784.83 17,547,234.44
Held-for-trading financial liabilities (6,835,239.48) (361,429.75)
Including: losses on the changes in fair value of derivative
financial instruments
(6,835,239.48) (361,429.75)
Total 85,458,209.54 15,321,889.63
52. Credit impairment loss
Unit: RMB
Items 2020 2019
Credit impairment losses of accounts receivable (106,051,544.54) (202,855,091.00)
Credit impairment losses of other receivables (27,043,173.31) 44,488,527.79
Credit impairment losses of long-term receivables (52,845,607.89) (63,642,862.97)
Total (185,940,325.74) (222,009,426.18)
53. Impairment losses of assets
Unit: RMB
Items 2020 2019
Losses on inventory devaluation (361,227,476.20) (197,891,311.27)
Contract assets impairment loss (1,882,037.79)
Total (363,109,513.99) (197,891,311.27)
298
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
54. Non-operating income
Unit: RMB
The amount booked into current
Item 2020 2019 period non-recurring profits and
looses
Fines and confiscations 66,127,109.32 48,610,859.46 66,127,109.32
Special subsidies 8,333,888.90 3,318,626.10 8,333,888.90
Tax reduction 138,798.93 23,979.90 138,798.93
Income from business merger not
281,193.50 - 281,193.50
under common control (Note)
Others 24,392,312.85 13,079,036.08 24,392,312.85
Total 99,273,303.50 65,032,501.54 99,273,303.50
Government subsidies included in current profit and loss:
Unit: RMB
Item 2020 2019 Related to assets/Related to incomes
Other special subsidies 8,333,888.90 3,318,626.10 Related to incomes
Tax reduction 138,798.93 23,979.90 Related to incomes
Total 8,472,687.83 3,342,606.00
Note: On November 5th 2020, the Group aquired BK Grup UAB. The amount of the merger cost less than the fair
value of the identifiable net assets obtained in the merger is included in the current profit and loss, which is
equivalent to RMB 281,193.50. See Note (VI)-1 for details.
55. Non-operating expenses
Unit: RMB
The amount booked into current period
Item 2020 2019
non-recurring profits and looses
Losses on disposal of non-current
6,465,180.38 7,589,538.54 6,465,180.38
assets
Local water conservancy construction
1,672,431.96 842,983.10 1,672,431.96
fund
Others 14,839,359.07 8,691,885.64 14,839,359. 07
Total 22,976,971.41 17,124,407.28 22,976,971.41
56. Income tax expenses
56.1 Details of Income tax expenses
Unit: RMB
Item 2020 2019
Income tax for the current reporting period 2,140,449,306.26 1,731,388,650.59
Deferred income tax expenses (89,684,430.19) (103,112,225.43)
Differences in filing and payment of income tax in previous
(456,113,070.38) (337,997,980.04)
reporting years
Total 1,594,651,805.69 1,290,278,445.12
56.2 Reconciliation of income tax expenses to the accounting profit
Unit: RMB
Item 2020 2019
Total profit 15,272,971,277.86 13,755,462,747.77
Income tax expenses calculated at applicable tax rates of 15% 2,290,945,691.68 2,063,319,412.17
Impact of non-deductible costs, expenses and losses 30,860,096.48 16,237,180.91
Tax effect of non-taxable income (3,054,060.62) (2,603,583.05)
Impact of deductible temporary differences or deductible losses for which 160,270,373.80 270,139,191.78
299
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Item 2020 2019
no deferred income tax assets is recognized for the current period
Impact of using deductible temporary differences or deductible losses for
which no deferred income tax assets was recognized for the prior periods
(27,124,409.54) (50,147,289.55)
Differences of income tax annual filing (Note) (456,113,070.38) (337,997,980.04)
Impact by different tax rates applicable to different subsidiaries 65,427,121.90 169,030,658.26
Impact of additional deduction of R&D expenses (498,716,838.03) (597,165,564.68)
Others 32,156,900.40 (240,533,580.68)
Income tax expenses 1,594,651,805.69 1,290,278,445.12
Note: Pursuant to the Notice on Printing the List of Key Software Enterprises and Integrated Circuit Design Enterprises
under the National Planning Layout between 2013 and 2014 (Fa Gai Gao Ji [2013] No. 2458) , the Company was identified
as a national key software enterprise in December 2013. Pursuant to the Notice on Relevant Issues Concerning the
Preferential Policies for Enterprise Income Tax on Software and Integrated Circuit Industry (Finance and Taxation [2016]
No. 49), the Company was approved by the tax authorities in August 2020 to apply enterprise income tax of 10% for 2019,
therefore, the enterprise’s 2019 income tax expenses was reduced by RMB 456,113,070.38.
57. Notes to consolidated cash flow statement items
57.1 Other cash receipts relating to operating activities
Unit: RMB
Item 2020 2019
Interest income 639,105,287.46 695,228,454.23
Government subsidies 503,207,004.05 397,596,487.11
Others 285,278,062.14 896,722,779.54
Total 1,427,590,353.65 1,989,547,720.88
57.2 Other cash payments relating to operating activities
Unit: RMB
Item 2020 2019
Advertising and Selling services 1,106,345,645.08 1,012,053,513.83
Office expenses and business expenses 997,386,647.41 1,194,981,715.54
Shipping and transportation expense 778,093,845.68 823,922,007.09
R&D expense 561,674,056.35 720,903,726.16
Travelling expense 322,753,419.29 618,963,759.27
Outsourcing service fees, fees for hiring intermediaries, etc. 301,671,589.85 410,388,242.46
Rental expense 211,316,955.65 216,521,408.43
Deposits to restricted monetary funds 62,196,400.89 109,697,678.52
Others 34,657,044.75 53,697,614.51
Total 4,376,095,604.95 5,161,129,665.81
57.3 Other cash receipts relating to investing activities
Unit: RMB
Item 2020 2019
Receipts of financing lease payments 46,196,873.80 17,234,624.45
Total 46,196,873.80 17,234,624.45
57.4 Other cash payments related to investing activities
300
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit: RMB
Item 2020 2019
Cash payments for investment intention funds 1,000,000.00 2,968,783.82
Total 1,000,000.00 2,968,783.82
57.5 Other cash payments relating to financing activities
Unit: RMB
Item 2020 2019
The consideration paid for the acquisition of minority
64,290,000.00 -
shareholders' equity
Repurchase of restricted shares 13,417,417.35 26,897,116.20
Total 77,707,417.35 26,897,116.20
58. Supplementary information about cash flow statement
58.1 Supplementary information about cash flow statement
Unit: RMB
Supplementary information 2020 2019
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 13,678,319,472.17 12,465,184,302.65
Add: Impairment of assets 363,109,513.99 197,891,311.27
Provision for credit losses 185,940,325.74 222,009,426.18
Fixed assets depreciation 713,633,074.93 559,888,586.31
Amortization of intangible assets 87,014,571.01 114,901,556.25
Long-term deferred expenses amortization 44,742,828.97 24,002,044.87
Losses (Gains) on disposal of fixed assets, intangible assets and
5,836,675.36 (5,535,663.32)
other long-term assets
Gains from changes in fair value (85,458,209.54) (15,321,889.63)
Financial expenses 598,966,581.29 174,491,026.21
Investment income (169,277,048.95) (36,649,237.09)
Share-based payment based on equity settlement 818,106,623.19 268,309,794.42
Decrease (increase) of restricted funds 121,389,681.42 (27,617,192.34)
Increase in deferred income tax assets (131,576,150.12) (154,200,329.39)
Increase in deferred income tax liabilities 41,891,719.93 51,088,103.96
Increase in inventories (496,228,965.62) (5,742,789,862.91)
Decrease of operating other non-current assets 151,065,258.42 501,950,002.84
Increase in operating receivables (2,794,429,636.26) (4,673,231,938.92)
Increase in operating payables 3,098,102,287.85 3,802,939,387.61
Increase (decrease) in deferred income (142,710,843.61) 40,410,742.17
Others (281,193.50) -
Net cash flows from operating activities 16,088,156,566.67 7,767,720,171.14
2. Significant investing and financing activities not involving cash
receipts and payments:
3. Net changes in cash and cash equivalents:
Ending balance of cash 35,024,837,878.31 26,515,668,008.40
Less: Opening balance of cash 26,515,668,008.40 26,031,011,733.89
Add: Ending balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents 8,509,169,869.91 484,656,274.51
301
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
58.2 Net cash paid for obtaining subsidiaries and other business units during the current year
The current reporting period:
Unit: RMB
Amounts
Cash or cash equivalents paid for the business combination in this year 62,585,784.41
Incuding: BK Grup UAB 25,684,141.43
BK EESTI AKTSIASELTS 21,566,307.77
SIA "BK Latvia" 15,335,335.21
Less: Cash and cash equivalents held by the Company on the day of purchase 13,667,615.83
Incuding: BK Grup UAB 6,190,791.43
BK EESTI AKTSIASELTS 5,875,032.31
SIA "BK Latvia" 1,601,792.09
Net cash paid for obtaining the subsidiary 48,918,168.58
58.3 Constituents of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Cash 35,024,837,878.31 26,515,668,008.40
Including: Cash on hand 1,105,047.51 557,429.68
Bank deposit for payment at any time 34,968,013,389.43 26,447,508,433.91
Other monetary capital for payment at any time 55,719,441.37 67,602,144.81
Cash equivalents - -
Closing balance of cash and cash equivalents 35,024,837,878.31 26,515,668,008.40
Among the total balance of RMB 490,610,671.33 of the other monetary fund(s) at the end of the reporting period
(December 31st 2019: RMB 623,883,056.19), RMB 434,891,229.96 are various guarantee deposits and other restricted
funds, etc. (December 31st 2019: RMB 556,280,911.38), not cash and cash equivalents.
59. Assets with restriction in ownership or use rights
Unit: RMB
Book value at the end of the current
Item Cause of restriction
reporting period
Monetary fund(s) 434,891,229.96 Various guarantee deposits and other restricted funds
Notes receivable 482,454,604.99 Endorsed to suppliers
Notes receivable 7,981,224.88 Pledged for issuing bank acceptance bills
Receivables for financing 106,117,987.87 Pledged for issuing bank acceptance bill
Fixed assets 45,330,337.75 Fixed assets leased through financial lease
Long-term receivables 1,770,160,748.25 Pledged for long-term borrowings
Total 2,846,936,133.70
60. Monetary items of foreign currencies
(1) foreign currencies
302
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit: RMB
Balance in foreign currency at Exchange rate for Balance of RMB converted at
Item
the end of the reporting period conversion the end of the reporting period
Monetary funds
Including: USD 936,545,445.72 6.5249 6,110,865,378.79
EUR 46,813,175.16 8.0250 375,675,730.67
AED 36,263,373.59 1.7761 64,407,377.83
GBP 4,959,769.90 8.8903 44,093,842.34
RUB 305,930,485.18 0.0877 26,830,103.55
JPY 336,505,067.09 0.0632 21,267,120.24
PLN 11,441,152.13 1.7520 20,044,898.53
HKD 13,443,127.64 0.8416 11,313,736.22
AUD 1,539,441.34 5.0163 7,722,299.59
KRW 394,701,420.00 0.0060 2,368,208.52
UZS 1,358,540,144.69 0.0007 995,266.51
ZAR 1,335,503.68 0.4458 595,367.54
NZD 48,072.09 4.7050 226,179.18
SGD 20,756.90 4.9314 102,360.58
TRY 270.72 1.1729 317.53
INR 1,698.20 0.0891 151.31
Accounts receivable
Including: USD 155,116,482.71 6.5249 1,012,119,538.03
EUR 137,647,553.28 8.0250 1,104,621,615.07
Short-term borrowing
Including: GBP 6,582,913.66 8.8903 58,524,077.31
EUR 8,052,220.91 8.0250 64,619,072.80
Accounts Payable
Including: USD 289,121,715.41 6.5249 1,886,490,280.88
Long-term loans due within one
year
Including: EUR 401,220,555.56 8.0250 3,219,794,958.41
(2) Details of Overseas Operational Entities
Main overseas
Recording
Name of overseas subsidiaries operational Basis of selection
Currency
office
Hongkong
HDT International Ltd. HKD Selection based on local economic environment
China
Hikvision Europe BV Netherlands USD Selection based on local economic environment
Prama Hikvision Indian Private Limited India INR Selection based on local economic environment
Hikvision UK Limited UK GBP Selection based on local economic environment
Hikvision Italy (S.R.L.) Italy EUR Selection based on local economic environment
Hongkong
Hikvision International Co., Limited USD Selection based on local economic environment
China
Hikvision Australia PTY Ltd. Australia AUD Selection based on local economic environment
Hikvision Spain, S.L. Spain EUR Selection based on local economic environment
303
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Main overseas
Recording
Name of overseas subsidiaries operational Basis of selection
Currency
office
Hikvision France SAS France EUR Selection based on local economic environment
Hikvision Singapore Pte. Ltd Singapore SGD Selection based on local economic environment
Hikvision South Africa (Pty) Ltd. South Africa ZAR Selection based on local economic environment
Hikvision FZE Dubai USD Selection based on local economic environment
Hikvision Poland Spolka Z ograniczona
Poland PLN Selection based on local economic environment
Odpowiedzialnoscia.
Hikivision do Brasil Comercio de Equipamentos de
Brazil BRL Selection based on local economic environment
Segurana Ltda.
Hikvision LLC Russia RUB Selection based on local economic environment
EZVIZ Inc. USA USD Selection based on local economic environment
Cooperative Hikvision Europe U.A. Netherlands USD Selection based on local economic environment
Hikvision Korea Limited Korea KRW Selection based on local economic environment
Hikvision Colombia SAS Columbia COP Selection based on local economic environment
Hikvision Kazakhstan limited liability partnership Kazakhstan KZT Selection based on local economic environment
Pyronix Ltd UK GBP Selection based on local economic environment
Microwave Solutions Limited UK GBP Selection based on local economic environment
Secure Holdings limited UK GBP Selection based on local economic environment
Hikvision Turkey Technology And Security
Turkey TRY Selection based on local economic environment
Systems Commerce Corporation
ZAO Hikvision Russia RUB Selection based on local economic environment
Hikvision Hungary Limited Hungary HUF Selection based on local economic environment
Hikvision New Zealand Limited New Zealand NZD Selection based on local economic environment
Hikvision Czech s.r.o. Czech CZK Selection based on local economic environment
Hikvision Deutschland GmbH Germany EUR Selection based on local economic environment
Hikvision Kenya (Pty) Ltd Kenya KES Selection based on local economic environment
LLC Hikvision Tashkent Uzbekistan UZS Selection based on local economic environment
Hikvision (Malaysia) SDN. BHD Malaysia MYR Selection based on local economic environment
Hikvision USA,Inc. USA USD Selection based on local economic environment
Hikvision Canada INC. Canada CAD Selection based on local economic environment
Hikvision Mexico S.A.de C.V. Mexico MXN Selection based on local economic environment
Hikvision Panama Commercial S.A. Panama USD Selection based on local economic environment
Hikvision Pakistan (SMC-Private) Limited Pakistan PKR Selection based on local economic environment
Hikvision Peru Closed Stock Company Peru PEN Selection based on local economic environment
Hikvision Central America S.A. Panama USD Selection based on local economic environment
Hikvision Technology Egypt JSC Egypt EGP Selection based on local economic environment
PT. Hikvision Technology Indonesia Indonesia IDR Selection based on local economic environment
Hikvision Technologies S.R.L., Romania RON Selection based on local economic environment
Hikvision IOT (Thailand) Co.,Ltd. Thiland THB Selection based on local economic environment
Hikvision West Africa Limited Nigeria NGN Selection based on local economic environment
Ezviz International Limited Honkong China HKD Selection based on local economic environment
Hikvision Azerbaijan Limited Liability Azerbaijan AZN Selection based on local economic environment
Hikvision Japan K.K. Japan JPY Selection based on local economic environment
Hikvision Argentina S.R.L. Argentina ARS Selection based on local economic environment
HIKVISION Morocco LLC Morocco MAD Selection based on local economic environment
Hikvision Technology Israel Ltd Israel ILS Selection based on local economic environment
EZVIZ Europe B.V. Netherlands EUR Selection based on local economic environment
BK Grup UAB Lithuania EUR Selection based on local economic environment
BK EESTI AKTSIASELTS Estonia EUR Selection based on local economic environment
304
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Main overseas
Recording
Name of overseas subsidiaries operational Basis of selection
Currency
office
SIA "BK Latvia" Latvia EUR Selection based on local economic environment
61. Government Subsidies
61.1 Categories
Unit: RMB
Amount booked in
Category Amount Financial Report Items
current profit and loss
VAT Rebate 1,739,193,206.86 Other Income 1,739,193,206.86
Special subsidies 729,547,288.35
Deferred income / Other income/ Non-
Including: other special subsidies 587,465,359.90 473,421,507.65
operating income
core electronic devices,
high-end universal chip
62,827,863.01 Deferred income / Other income 62,827,863.01
and basic software
product projects
Chongqing Manufacture
Park construction 79,254,065.44 Deferred income / Other income 2,418,930.00
subsidies
Tax Refund/Reduction 34,192,886.12 Other income/ Non-operating income 34,192,886.12
Total 2,502,933,381.33 2,312,054,393.64
61.2 There was no refund of government subsidies during the current reporting period.
305
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
VI. Changes in consolidation scope
1. Business mergers not involving enterprises under the common control
(1) Business mergers not under common control during the current reporting period
BK Grup UAB (“BK Lithuania”), BK EESTI AKTSIASELTS (“BK Estonia”) and SIA "BK Latvia" (“BK Latvia”) (collectively referred as to “Subject Companies or Three BK Companies”)
On June 30th 2020, Hikvision Singapore Pte. Ltd (“Hikvision Singapore”), a wholly-owned subsidiary of the Company, entered into the SHARES SALE AND PURCHASE AGREEMENT (“BK Acquisition
Agreement”) with the original shareholders of Subject Companies, to acquire 100% equity of the Subject Companies in total held by four independent third parties at an agreed consideration of EUR 7,976,471.00.
From June to October 2020, the above acquisition completed the filing or approval of the board of directors of CETHIK, Ministry of Commerce of the People’s Republic of China, National Development and
Reform Commission of the People’s Republic of China and State Administration of Foreign Exchange of the People’s Republic of China (Branch of Zhejiang Province). The acquisition of the equity of those
Three BK Companies, namely BK Lithuania, BK Estonia and BK Latvia was completed on November 5th 2020, October 29th 2020 and November 2nd 2020, respectively, and therefore, the Group will incorporate
the Subject Companies into consolidation scope from the acquisition dates, which are November 5 th 2020, October 29th 2020 and November 2nd 2020. As of December 31st 2020, the Company has made the
equity transfer payment of EUR 7,976,471.00, which is equivalent to approximately RMB 62,585,784.41 exchanged at spot foreign exchange rate.
Unit:RMB
Equity Income of acquiree Net profit of acquiree
Time of equity acquisition Equity acquisition from acquisition data to from acquisition data to
Name of the acquiree Equity acquisition cost ratio Date of acquisition Basis for determining
acquisition method the end of the reporting the end of the reporting
the acquisition date period
(%) period
Equity delivery date
Lithuania BK November 2020 25,684,141.43 100.00 Cash Payments November 5th 2020 for obtaining control 26,550,867.59 2,419,560.41
of the purchased party
Equity delivery date
Estonia BK October 2020 21,566,307.77 100.00 Cash Payments October 29th 2020 for obtaining control 9,535,154.53 433,971.22
of the purchased party
Equity delivery date
Latvia BK November 2020 15,335,335.21 100.00 Cash Payments November 2nd 2020 for obtaining control 8,858,903.31 877,192.86
of the purchased party
（2）Cost of business merger and goodwill
Unit:RMB
306
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Cost of business merger Lithuania BK Estonia BK Latvia BK
-Cash 25,684,141.43 21,566,307.77 15,335,335.21
Total cost of business merger 25,684,141.43 21,566,307.77 15,335,335.21
Less: The fair value share of identifiable net assets obtained 25,965,334.93 16,847,511.73 10,623,087.52
Goodwill/The amount that the merger cost is less than the amount of the
(281,193.50) 4,718,796.04 4,712,247.69
fair value share of the identifiable net assets obtained
(2) Acquiree’s book value of assets and liabilities at the date of acquisition
Unit: RMB
Lithuania BK Estonia BK Latvia BK
Book value on the date of Fair value on the date of Book value on the date of Fair value on the date of Book value on the date of Fair value on the date of
acquisition acquisition acquisition acquisition acquisition acquisition
Aseets:
Cash 6,190,791.43 6,190,791.43 5,875,032.31 5,875,032.31 1,601,792.09 1,601,792.09
Accounts receivable 14,018,545.29 14,018,545.29 6,123,134.67 6,123,134.67 4,505,689.13 4,505,689.13
Prepayments 2,519,198.67 2,519,198.67 143,883.10 143,883.10 313,532.58 313,532.58
Inventories 37,744,183.07 37,744,183.07 15,123,419.43 15,123,419.43 10,150,107.30 10,150,107.30
Fixed assets 544,603.52 544,603.52 543,197.70 543,197.70 358,748.69 358,748.69
Intangible assets 203,236.59 203,236.59 - - - -
Other assets 1,058,521.81 1,058,521.81 138,429.76 138,429.76 103,534.83 103,534.83
Liabilities:
Accounts payable 28,906,897.26 28,906,897.26 10,063,328.87 10,063,328.87 4,422,565.19 4,422,565.19
Tax payable 4,750,116.59 4,750,116.59 560,697.54 560,697.54 778,626.80 778,626.80
Payroll payable 2,006,861.02 2,006,861.02 467,878.64 467,878.64 814,277.64 814,277.64
Other liabilities 649,870.58 649,870.58 7,680.19 7,680.19 394,847.47 394,847.47
Net assets acquired 25,965,334.93 25,965,334.93 16,847,511.73 16,847,511.73 10,623,087.52 10,623,087.52
（4）The Group uses the market method and the income method to evaluate the fair value, and finally confirms the evaluation value on the basis of comparing the two evaluation
methods.
（5）The Group has no contingent liabilities of the purchased party that need to be assumed in this merger.
307
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
2. Changes of consolidation scope due to other causes
The subsidiaries newly established and incorporated in the consolidation scope during the current reporting period as follows:
Ratio of contribution
Company Name Time of establishment Registered capital Amount of contribution of the Group
(%)
Hangzhou Rayin Technology Co., Ltd.
January 2020 RMB 100 mn RMB 60 mn 60
(Note 1)
Kunming Hikvision Digital Technology Co., Ltd. ("Kunming
July 2020 RMB 50 mn RMB 50 mn 100
Hikvision") (Note 2)
Hangzhou Microimage Software Co., Ltd. (Note 3) July 2020 RMB 20 mn RMB 12 mn 60
Hangzhou Microimage Intelligent Technology Co., Ltd. (Note 4) July 2020 RMB 50 mn RMB 30 mn 60
Jinan Hikvision Digital Technology Co., Ltd. ("Jinan Hikvision")
August 2020 RMB 50 mn RMB 50 mn 100
(Note 2)
Hikvision Morocco LLC (Moroccan subsidiary) March 2020 MAD 1,800,000 MAD 1,800,000 100
EZVIZ Europe B.V.(EZVIZ Europe)(Note 2) August 2020 EUR 800,000 EUR 480,000 60
Note 1: At the end of the reporting period, the actual paid-up capital of Hangzhou Rayin Technology Co., Ltd. was RMB 100,000,000.00, among them, RMB 60,000,000.00 was paid by
the Group and RMB 40,000,000.00 was invested by minority shareholder of Qianmo Jiaying Equity Investment Partnership (Limited Partnership)
Note 2: At the end of the reporting period, Kunming Hikvision, Jinan Hikvision and EZVIZ Europe had not yet completed the paid-in capital, so there is no paid-in capital.
Note 3: At the end of the reporting period, the actual paid-in capital of Microimage Software was RMB 20,000,000.00, all of which was contributed and paid by Hangzhou Hikmicro, a
subsidiary of the Group.
Note 4: At the end of the current reporting period, the paid-in capital of Microimage Intelligent was RMB 10,000,000.00, all of which was contributed and paid by Hangzhou Hikmicro,
a subsidiary of the Group.
308
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
The subsidiaries cancelled in the current reporting period and no longer included in the scope of consolidation are as follows:
Company Name Date of equity disposition Proportion of shareholding (%)
Hainan Hikvision System Technology Co., Ltd. November 2020 100
Hangzhou Hikvision Investment Management Co., Ltd. December 2020 100
VII. Interest in other entities
1. Equity in subsidiaries
(1) Composition of the corporate group
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
System integration, Technology 100.00 -
Hangzhou Hikvision System Technology Co., Ltd. Hangzhou Hangzhou, Zhejiang Establishment
development
Hangzhou Hikvision Technology Co., Ltd. Hangzhou Hangzhou, Zhejiang manufacture 100.00 - Establishment
Hangzhou Hikvision Security Equipment Leasing Services Co., 100.00 -
Hangzhou Hangzhou, Zhejiang Finance lease Establishment
Ltd.
Chongqing Hikvision System Technology Co., Ltd. Chongqing Chongqing System integration 100.00 - Establishment
Hikvision USA, Inc. USA Los Angeles Sales 100.00 - Establishment
Hong Kong
HDT International Ltd. Hong Kong China Sales 95.00 5.00 Establishment
China
Business combination
Prama Hikvision Indian Private Limited India Mumbai Sales 58.00 - not involving enterprises
under common control
Hikvision Europe B.V. Europe Amsterdam Sales - 100.00 Establishment
Hikvision FZE Dubai Dubai Sales 100.00 - Establishment
Hikvision Singapore Pte. Ltd Singapore Singapore Sales 100.00 - Establishment
Chongqing Hikvision Technology Co., Ltd. Chongqing Chongqing Manufacture 100.00 - Establishment
Hangzhou Fuyang Hik Baotai Security Technology Services Co., 51.00
Hangzhou Hangzhou, Zhejiang Construction - Establishment
Ltd. (Note 1)
Hikvision South Africa (Pty) Co., Ltd. South Africa South Africa Sales 100.00 - Establishment
Hikvision Italy S.R.L. Italy Milan Sales - 100.00 Establishment
Hikvision do Brasil Comercio de Equipamentos de Segurana Brazil Brazil Sales 95.00 5.00 Establishment
309
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Ltda.
Hikvision Australia PTY Co., Ltd. Australia Australia Sales 100.00 - Establishment
Hong Kong Hong Kong
Hikvision International Co., Limited Sales 100.00 - Establishment
China China
Hikvision France SAS France France Sales - 100.00 Establishment
Hikvision Spain,S.L. Spain Spain Sales - 100.00 Establishment
Business combination
Shanghai Goldway Intelligent Transportation System Co., Ltd. Shanghai Shanghai Manufacture 100.00 - not involving enterprises
under common control
Business combination
ZAO Hikvision Russia St. Peterburg Sales - 100.00 not involving enterprises
under common control
Business combination
Henan Hua’an Baoquan Intelligent
Zhengzhou Zhengzhou Henan Construction 93.86 - not involving enterprises
Development Co., Ltd. (Note 2)
under common control
Business combination
Henan Hua’an Security Services Co., Ltd. (Note 2) Zhengzhou Zhengzhou Henan Services - 84.47 not involving enterprises
under common control
Business combination
Hundure Technology (Shanghai) Co., Ltd. Shanghai Shanghai Manufacture 100.00 - not involving enterprises
under common control
Hikvision UK Limited UK UK Sales - 100.00 Establishment
Hikvision Poland Spolka Z Ograniczona Odpowiedzialnoscia Poland Poland Sales - 100.00 Establishment
Hangzhou 71.30 -
Hangzhou Hikvision Electronics Co., Ltd.（Note 3） Hangzhou Manufacture Establishment
Zhejiang
Cooperative Hikvision Europe U.A. Netherlands Netherlands Sales 99.00 1.00 Establishment
Hikvision Canada Inc. Canada Canada Sales 100.00 - Establishment
Hikvision LLC Moscow Moscow Sales 100.00 - Establishment
Hikvision Korea Limited Korea Korea Sales 100.00 - Establishment
Hangzhou 60.00
Hangzhou EZVIZ Network Co., Ltd. Hangzhou Technology development - Establishment
Zhejiang
EZVIZ Inc. USA Los Angeles Sales - 60.00 Establishment
Business combination
Hangzhou -
Hangzhou Haikang Zhicheng Investment Development Ltd Hangzhou System integration 80.00 not involving enterprises
Zhejiang
under common control
Hangzhou Hikrobot Technology Co., Ltd. Hangzhou Hangzhou Technology development 60.00 - Establishment
310
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Zhejiang
Hangzhou 100.00
Hangzhou Hikvision Investment Management Co., Ltd. (Note 4) Hangzhou Investment Management - Establishment
Zhejiang
Hangzhou 60.00
Hangzhou HikAuto Technology Co., Ltd. Hangzhou Technology development - Establishment
Zhejiang
Hangzhou 70.00
Hangzhou Hikvision Communication Technology Co., Ltd. Hangzhou Technology development - Establishment
Zhejiang
Hangzhou 60.00
Hangzhou Hikmicro Sensing Technology Co., Ltd. Hangzhou Technology development - Establishment
Zhejiang
Hikvision Turkey Technology And Security Systems Commerce
Turkey Istanbul Sales 100.00 - Establishment
Corporation
Hikvision Colombia SAS Columbia Santa Fe Bogota Sales 100.00 - Establishment
Hikvision Kazakhstan limited liability partnership Kazakhstan Astana Sales 100.00 - Establishment
Business combination
Secure Holding Limited British Sheffield Manufacture - 100.00 not involving enterprises
under common control
Business combination
Pyronix Limited British Sheffield Manufacture - 100.00 not involving enterprises
under common control
Business combination
Microwave Solutions Limited British Sheffield Manufacture - 100.00 not involving enterprises
under common control
Hikvision Hungary Limited Hungary Hungary Sales - 100.00 Establishment
Hikvision New Zealand Limited New Zealand Auckland Sales - 100.00 Establishment
Urumqi HaiShi Xin’An Electronic Technology Co., Ltd. Urumqi Urumqi, Xinjiang Construction - 90.00 Establishment
Business combination
Hangzhou Ximu Intelligent Technology Co., Ltd. Hangzhou Hangzhou, Zhejiang Manufacture - 60.00 involving enterprises under
common control
LLC Hikvision Tashkent Uzbekistan Tashkent Sales 100.00 - Establishment
Hikvision Kenya (Pty) Ltd Kenya Kenya Sales - 100.00 Establishment
Hangzhou HikAuto Software Co., Ltd. Hangzhou Hangzhou, Zhejiang Technology Development - 60.00 Establishment
Hangzhou Hikrobot Intelligent Technology Co., Ltd. Hangzhou Hangzhou, Zhejiang Technology Development - 60.00 Establishment
311
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Wuhan
Wuhan HikStorage Technology Co., Ltd. Wuhan Technology development 60.00 - Establishment
Hubei
Chengdu -
Chengdu Hikvision Digital Technology Co., Ltd. Chengdu Technology development 100.00 Establishment
Sichuan
Hetian 85.00
MoYuHaiShi Electronic Technology Co., Ltd. Hetian Construction - Establishment
Xinjiang
Hangzhou 60.00
Hangzhou EZVIZ Software Co., Ltd. Hangzhou Technology development - Establishment
Zhejiang
Hetian 90.00
PiShan HaiShi YongAn Electronic Technology Co., Ltd. Hetian System integration - Establishment
Xinjiang
Zhengzhou
Henan Haikang Hua’an BaoQuan Electronics Co., Ltd. (Note 2) Zhengzhou Construction 93.86 - Establishment
Henan
Hikvision Czech s.r.o. Czech Czech Sales - 100.00 Establishment
Hikvision (Malaysia) SDN. BHD Malaysia Malaysia Sales - 100.00 Establishment
Hikvision Deutschland GmbH Germany Germany Sales - 100.00 Establishment
Hikvision Xi’an Xueliang Construction Project Management Xi’an Xi’an Shanxi Construction - 99.00 Establishment
Co., Ltd.
Hetian
Luo Pu District HaiShi Ding Xin Electronic Technology Co., Ltd. Hetian System integration - 90.00 Establishment
Xinjiang
Hetian
Yu Tian HaiShi Mei Tian Electronic Technology Co., Ltd. Hetian System integration - 98.00 Establishment
Xinjiang
Xi’An Hikvision Digital Technology Co., Ltd. Xi’An Xi’an Shanxi Technology development 100.00 - Establishment
Wuhan Hikvision Technology Co., Ltd. Wuhan Wuhan Hubei Technology development 100.00 - Establishment
Wuhan Hikvision Science and Technology Co., Ltd. Wuhan Wuhan Hubei Sales 100.00 - Establishment
Wuhan Hiksafety Technology Co., Ltd. (Note 5) Wuhan Wuhan Hubei Sales - 60.00 Establishment
Hainan Hikvision System Technology Co., Ltd. （Note 4） Lingshui Lingshui Hainan System integration 100.00 - Establishment
Hangzhou Hikmed Imaging Technology Co., Ltd. Hangzhou Hangzhou, Zhejiang Technology development 60.00 - Establishment
Hikvision Mexico S.A.de C.V. Mexico Mexico Sales - 100.00 Establishment
Guizhou Hikvision Transportation Big Data Co., Ltd. Guiyang Guiyang, Guizhou Technology development 55.00 - Establishment
Xinjiang CET Yihai Information Technology Co., Ltd. Urumqi Urumqi, Xinjiang System integration 60.00 - Establishment
Hikvision Panama Commercial S.A Panama Panama Sales - 100.00 Establishment
Hikvision Pakistan (SMC-Private) Limited Pakistan Pakistan Sales - 100.00 Establishment
Hikvision Peru Closed Stock Company Peru Peru Sales 95.00 5.00 Establishment
312
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Hikvision Technology Israel Co., Ltd. Israel Israel Sales - 100.00 Establishment
Nanjing Hikvision Digital Technology Co., Ltd. Nanjing Nanjing, Jiangsu Sales 100.00 - Establishment
Shijiazhuang
Shijiazhuang Hikvision Technology Co., Ltd. Shijiazhuang Technology development 100.00 - Establishment
Hebei
Zhengzhou
Zhengzhou Hikvision Digital Technology Co., Ltd. Zhengzhou Sales 100.00 - Establishment
Henan
Hikvision Central America S.A. Panama Panama Sales - 100.00 Establishment
Hikvision West Africa Limited Nigeria Nigeria Sales 94.00 6.00 Establishment
Hikvision Technology Egypt JSC Egypt Egypt Sales - 100.00 Establishment
Hangzhou Business merger under the
Hangzhou EZVIZ Technology Co., Ltd. (Note 6) Hangzhou Sales - 60.00
Zhejiang common control
Business merger not
Hangzhou
Hangzhou Kuangxin Technology Co., Ltd. Hangzhou Technology development 80.00 - involving enterprises under
Zhejiang
the common control
Hikvision Digital Technology (Shanghai) Co., Ltd. Shanghai Shanghai Technology development, sales 100.00 - Establishment
Nanchang Establishment
Nanchang Hikvision Digital Technology Co., Ltd. Nanchang Technology development 100.00 -
Jiangxi
Jiangshan Establishment
Zhejiang Hiksafety Technology Co., Ltd. (Note 5) Jiangshan Technology development - 60.00
Zhejiang
Zhenping Establishment
Zhenping County Haikang Juxin Digital Technology Co., Ltd. Zhenping System integration - 90.00
Henan
Hefei Establishment
Hefei Hikvision Digital Technology Co., Ltd. Hefei Technology development 100.00 -
Anhui
Tianjin Hikvision Information Technology Co., Ltd. Tianjin Tianjin Technology development 100.00 - Establishment
Fuzhou Establishment
Fuzhou Hikvision Digital Technology Co., Ltd. Fuzhou System integration 100.00 -
Fujian
Xuancheng
Anhui Hikvision Urban Operation Service Co., Ltd. (Note 7) Xuancheng System integration - 100.00 Establishment
Anhui
Ningbo Establishment
Ningbo Haikang Parking System Operation Co., Ltd. Ningbo Technology development 70.00 -
Zhejiang
Guangzhou Establishment
Guangzhou Hikvision Technology Co., Ltd. Guangzhou Technology development 100.00 -
Guangdong
Hangzhou Establishment
Hangzhou Hikfire Technology Co., Ltd. Hangzhou Technology development 60.00 -
Zhejiang
PT. Hikvision Technology Indonesia Indonesia Indonesia Sales - 100.00 Establishment
313
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Hongkong
Ezviz International Limited Hongkong Sales - 100.00 Establishment
China
Hikvision Technologies S.R.L., Romania Romania Sales - 100.00 Establishment
Hikvision Azerbaijan Limited Liability Azerbaijan Azerbaijan Sales - 100.00 Establishment
Hikvision IOT (Thailand) CO.,LTD. Thailand Thailand Sales - 100.00 Establishment
Hikvision Japan K.K. Japan Japan Sales - 100.00 Establishment
Hikvision Argentina S.R.L. Argentina Argentina Sales 95.00 5.00 Establishment
Hangzhou
Hangzhou HikStorage Technology Co., Ltd. Hangzhou Technology development - 60.00 Establishment
Zhejiang
Hangzhou Establishment
Hangzhou Rayin Technology Co., Ltd. Hangzhou Technology development 60.00 -
Zhejiang
Kunming Establishment
Kunming Hikvision Digital Technology Co., Ltd. Kunming Sales 100.00 -
Yunnan
Hangzhou Establishment
Hangzhou Microimage Software Co., Ltd. Hangzhou Technology development - 60.00
Zhejiang
Hangzhou Establishment
Hangzhou Microimage Intelligent Technology Co., Ltd. Hangzhou Technology development - 60.00
Zhejiang
Jinan Establishment
Jinan Hikvision Digital Technology Co., Ltd. Jinan Sales 100.00 -
Shandong
Hikvision Morocco LLC Morocco Morocco Sales - 100.00 Establishment
EZVIZ Europe B.V. Netherland Netherland Sales - 60.00 Establishment
Business merger not
BK Grup UAB (Note 8) Lithuania Lithuania Sales - 100.00 involving enterprises under
the common control
Business merger not
BK EESTI AKTSIASELTS (Note 8) Estonia Estonia Sales - 100.00 involving enterprises under
the common control
Business merger not
SIA “BK Latvia” (Note 8) Latvia Latvia Sales - 100.00 involving enterprises under
the common control
314
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Note 1: Fuyang Baotai is a subsidiary controlled by Hangzhou System, who holds 51% equity interests. According to the Articles of Association of the Company, Hangzhou System has
a 50% dividend payout ratio in the said company (Fuyang Baotai).
Note 2: In 2020, the Group acquired a 42.86% minority stake in each of its subsidiaries, Hua’an Baoquan Intelligent and Hua’an Baoquan Electronics, and its shareholding in the two
companies was changed from 51% to 93.86%. The shareholding ratio of Huaan Baoquan Service, a subsidiary of Huaan Baoquan Intelligent Company, has changed from indirect holding
45.9% to indirect holding 84.47%. For details, please refer to Note (VII), 2.
Note 3: The remaining 28.70% equity interests of Hangzhou Hikvision Electronics Co., Ltd. is held by China Development Bank Fund. Please refer to Note (V) 32 for details.
Note 4: Hangzhou Hikvision Investment Management Co., Ltd. and Hainan Hikvision System Technology Co., Ltd. have been deregistered by the industry and commerce in 2020.
Note 5: In order to integrate the intelligent fire protection and control business, the Group transferred 100% of the equity of Wuhan Fire Proction and Zhejiang Fire Protection and Control
(formerly known as Zhejiang Hikvision Fire Protection and Control Technology Co., Ltd.) to its holding subsidiary Hangzhou HikFire in 2020. After the completion of the transfer, the
Group’s shareholding in the two companies changed from direct holding 100% to indirect holding 60%.
Note 6: The Group controls Hangzhou EZVIZ Technology Co., Ltd. through an entrusted management agreement and does not directly or indirectly hold its shares.
Note 7: Ningguo Hikvision City Operation Service Co., Ltd. has been renamed to Anhui Hikvision City Operation Service Co., Ltd. in 2020.
Note 8: Hikvision Singapore, a wholly-owned subsidiary of the Group, acquired 100% of the shares of Lithuania BK, Estonia BK and Latvia BK through cash settlement in 2020. Please
refer to Note (VI)-1 for details.
315
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
2. Transaction in which the share of owner’s equity in the subsidiaries has been changed and the subsidiaries are still under control
(1) Description of changes in the share of owner’s equity in the subsidiaries
Acquisition of minority equity of Hua’An Bao Quan Intelligent and Hua’An Bao Quan Electronics
On December 31st 2019, the Company entered into an agreement in relation to the Equity Transfer of Henan Hua’An Bao Quan Intelligent Development Ltd. and Henan Haikang Hua’An Bao Quan Electronics
Ltd. with the original minority shareholders of Hua’An Bao Quan Intelligent and Hua’An Bao Quan Electronics, holding subsidiaries of the Company, to acquire each of 42.86% minority equity of Hua’An Bao
Quan Intelligent and Hua’An Bao Quan Electronics held by original shareholders at an agreed consideration of RMB 30,859,200.00 and RMB 33,430,800.00, respectively. Upon the completion of the transaction,
the Company holds a total of 93.86% of the shares of Hua’An Bao Quan Intelligent and Hua’An Bao Quan Electronics. As of December 31st 2020, the Company has made the equity transfer payment of RMB
64,290,000 and the equity transfer has been completed.
Unit: RMB
Purchase cost Hua’an Baoquan Intelligence Hua’an Baoquan Electronics
-Cash 30,859,200.00 33,430,800.00
Total purchase cost 30,859,200.00 33,430,800.00
Less: Subsidiary's share of net assets calculated according to the proportion of acquired equity 29,031,021.70 4,771,674.11
Difference 1,828,178.30 28,659,125.89
Of which: adjusted capital reserve 1,828,178.30 28,659,125.89
Disposal of Wuhan Fire Protection and Control and Zhejiang Fire Portection and Control to the the Company’s holding subsidiary, Hangzhou Hikfire
Hangzhou Hikfire is a holding subsidiary of the Company with shareholding ratio of 60%. In order to integrate the overall intra-group intelligent fire protection and control business, on
April 30th 2020, the Company entered into an Equity Transfer Agreement with its holding subsidiary, Hangzhou Hikfire to transfer 100% equity of Wuhan Fire Protection and Control and
Zhejiang Fire Protection and Control, at an agreed consideration of RMB 0. Upon the completion of the transaction, the Company’s shareholding ratios in Wuhan Fire Protection and
Control and Zhejiang Fire Protection and Control were changed from direct holding of 100% to indirect holding of 60.00%. As of December 31st 2020, the equity transfer has been
completed.
Unit: RMB
Disposal consideration Zhejiang Fire Protection and Control Wuhan Fire Protection and Control
- Cash - -
Total disposal cost - -
Less: the difference of the subsidiary's net assets share calculated based on the proportion of the (2,379,712.83) (795.98)
316
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Disposal consideration Zhejiang Fire Protection and Control Wuhan Fire Protection and Control
- Cash - -
disposed equity
Difference (2,379,712.83) (795.98)
Of which: adjusted capital reserve (2,379,712.83) (795.98)
3. Equity in joint ventures or associates
(1) Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
Closing balance / Amount for 2020 Opening balance / Amount for 2019
Associates：
The aggregate carrying amount of investments in associates 193,646,038.77 188,845,321.49
The aggregate amount of the following items calculated based on the Company’s equity share percentage
of the associates
- Net income (loss) (5,199,282.72) 7,743,476.93
- Other comprehensive income - -
--Net income (loss) and total comprehensive income (loss) (5,199,282.72) 7,743,476.93
Joint Ventures:
Total investment book value 670,380,671.46 63,320,000.00
The sum of the following items calculated according to the shareholding ratio
- Net income 11,560,671.46 -
- Other comprehensive income - -
- Net income and comprehensive income 11,560,671.46 -
The Group uses the equity method to account for the aforementioned associates and joint ventures.
317
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
VIII. Risks associated with financial instrument
The Group's principal financial instruments include cash and bank balances, other non-current financial assets, notes
receivable, accounts receivable, receivables for financing, other receivables (except for tax refund receivable), long-term
receivables, borrowings, notes payable, accounts payable, other payables, other current liabilities, long-term payables,
derivative financial instruments, etc. Details of these financial instruments are set out in Note (V). Below are the risks
associated with such financial instruments and the risk management policies adopted by the Group to mitigate such risks.
The management of the Group manages and monitors such risk exposures to ensure such risks are contained within a
prescribed scope.
1. Classification of financial instruments
Unit: RMB
Ending balance of the current Ending balance of the prior year
Items
reporting period (on December 31st 2019)
Financial assets：
Measured at fair value through current profit and loss
Held –for-trading financial assets 22,679,846.77 181.76
Other non-current financial assets 491,939,067.27 312,398,267.44
Measured at fair value through other comprehensive income
Receivables for financing 1,959,601,195.25 1,257,385,053.02
Measured at amortized cost
Cash and bank balances 35,459,729,108.27 27,071,948,919.78
Notes receivable 1,303,252,705.19 973,236,789.02
Accounts receivable 21,979,380,716.86 21,307,927,200.28
Other receivables (except for tax refund receivable) 451,428,906.05 491,776,194.41
Long-term receivables 2,105,570,004.53 1,382,536,761.22
Financial liabilities
Measured at fair value through current profit and loss
Held-for-trading financial liabilities 7,405,771.15 652,428.18
Measured at amortized cost
Short-term borrowings 3,999,246,634.59 2,640,082,485.15
Notes payable 1,036,920,229.85 1,239,584,016.70
Accounts payable 13,593,884,790.19 12,700,075,307.70
Other payables 1,525,053,355.95 1,568,744,599.94
Non-current liabilities due within one year 3,507,680,339.78 86,123,154.06
Other current liabilities 560,959,368.73 913,534,538.26
Long-term borrowings 1,961,167,761.30 4,604,168,571.43
Long-term payables 39,595,459.35 50,181,416.72
Other non-current liabilities 560,959,368.74 1,234,739,326.10
The Group adopts sensitivity analysis techniques to analyze the possible effects of rational and probable changes in risk
variables to profit or loss for the period or to the interests of shareholders. Since risk variables seldom change on a stand-
alone basis, while the correlation between variables may have significant influence to the ultimate amount of change
effected by the change in a single risk variable, the analysis below is based on the assumption that the changes in each
variable occurred separately.
318
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
2. Objectives and policies of risk management
The Group engages in risk management with the aim of achieving an appropriate balance between risk and return, where
the negative effects of risks against the Group’s operating results are minimized, in order to maximize the benefits of
shareholders and other stakeholders. Based on such objective in risk management, the underlying strategy of the Group’s
risk management is to ascertain and analyze all types of risks exposures of the Group, establish appropriate risk tolerance
thresholds, carry out risk management procedures and perform risk monitoring on all kinds of risks in a timely and reliable
manner, thus containing risk exposures within a prescribed scope.
2.1 Market risks
2.1.1 Foreign exchange risks
Foreign exchange risks refer to the risk that losses will occur because of changes in foreign exchange rates. The Company
is primarily exposed to risks relating to the currencies such as USD and EUR. The Group’s subsidiaries in the mainland
of China whose procurement, sales and financing are denominated in RMB, USD and EUR, other principal activities are
settled in RMB. The Group’s subsidiaries in Hong Kong and outside China are principally engaged in procurement, sales,
financing and other major business activities in local currencies such as USD, EUR, GBP, RUB, and etc.
As of December 31st 2020, except for monetary items of foreign currencies set out in Note (V) 60, the Group mainly
adopted the functional currency of each of its subsidiary to present the balance of its assets and liabilities. The foreign
exchange risks arising from assets and liabilities denominated in USD and EUR (which has been converted into RMB) as
follows may generate significant impact on the operating results of the Group.
Unit: RMB
Assets Liabilities
Currencies
Closing balance Opening balance Closing balance Opening balance
USD 7,122,984,916.85 8,990,808,097.16 1,886,490,280.88 2,680,807,278.88
EUR 1,480,297,345.67 396,683,098.55 3,284,414,031.21 3,135,739,251.94
The Group has been paying close attention to the effect of fluctuation in exchange rate on the foreign exchange risks of
the Group, and has purchased various financial derivative instruments, such as forward foreign exchange contracts and
foreign exchange options and etc., to mitigate the foreign exchange risk exposure.
Sensitivity analysis on exchange rate risk
With other variables unchanged, the exchange rate might float within a reasonable range, and has the following before-
tax effect on profit or loss and shareholders’ equity for the current period:
Unit: RMB
2020 2019
Change in foreign exchange rates Effect on shareholders’ Effect on
Effect on profit Effect on profit
equity shareholders’ equity
5% appreciation of USD against functional 261,824,731.80 261,824,731.80 315,500,040.91 315,500,040.91
currency
5% depreciation of USD against functional (261,824,731.80) (261,824,731.80) (315,500,040.91) (315,500,040.91)
currency
5% appreciation of EUR against functional (90,205,834.28) (90,205,834.28) (136,952,807.67) (136,952,807.67)
currency
319
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
2020 2019
Change in foreign exchange rates Effect on shareholders’ Effect on
Effect on profit Effect on profit
equity shareholders’ equity
5% depreciation of EUR against functional 90,205,834.28 90,205,834.28 136,952,807.67 136,952,807.67
currency
2.1.2. Interest rate risk
The risk of changes in cash flow of financial instruments due to changes in interest rates exposed to the Group are primarily
related to bank borrowings bearing floating interest rate and bank deposits bearing floating interest rate.
At the end of the year, the amount of borrowings of the Group bearing floating interest rate is not significant, and the risk
of changes in cash flow of financial instruments due to changes in interest rates is expected to be insignificant.
The Group expects that the risk exposure of cash flow generated from bank deposits bearing floating interest rate is
insignificant.
The Group determines the relative proportion of fixed interest rate contracts and floating interest rate contracts based on
the prevailing market environment. The Group’s interest-bearing debts bearing floating interest rates were mainly RMB-
denominated PPP pledged long-term borrowing contracts with an amount of RMB 1,556,927,316.08 (Note (V), 32)
(December 31st 2019: RMB-denominated PPP pledged long-term borrowings with an amount of RMB 1,348,034,851.48
(Note (V), 32)).
The headquarter finance department of the Group continuously monitors the level of interest rate of the Group. Rising
interest rates will increase the cost of newly incurred interest-bearing debts and the Group’s interest expenses on
outstanding interest-bearing debts with floating interest rates, and have a significant adverse impact on the financial
performance of the Group. The management team would make adjustments on a timely basis based on the latest market
conditions, including arrangements for interest rate swaps to reduce interest rate risk. The Group did not have any interest
rate swap arrangement in the year of 2020 or 2019.
2.1.3. Other price risks
The Group’s price risk mainly arises from investments in held-for-trading equity instruments and derivative financial
instruments. Held-for-trading equity instrument investments are all investments in unlisted held-for-trading equity
instruments.
The Group is exposed to price risk due to the holding of financial assets measured at fair value. The fair value of certain
financial instruments is determined by the general pricing model based on discounted future cash flow method or other
valuation techniques, while the valuation techniques are based on certain valuation assumptions. Therefore, the valuation
results are highly sensitive to valuation assumptions. However, at the end of the current reporting period, the amount of
investment in held-for-trading equity instruments and derivative financial instruments is not significant, and the risk
exposure due to changes in price of financial instruments as a result of change in valuation assumptions is low, accordingly,
no sensitivity analysis is conducted.
2.2 Credit Risk
As of December 31st 2020, the largest credit risk exposure that may result in financial losses of the Group is mainly due to
the loss of the Group’s financial assets arising from the failure of the counterparty to perform its obligations, including:
cash and bank balance (Note (V). 1), notes receivable (Note (V). 3), accounts receivable (Note (V). 4), receivables for
financing (Note (V). 5), other receivables (Note (V). 7), non-current assets due within one year (Note (V). 10), long-term
receivables (Note (V). 12), etc., and derivative financial assets that are not included in the scope of impairment assessment
and are measured at fair value through current profit or loss (Note (V). 2). As of the balance sheet date, the book value of
the Group’s financial assets represents its maximum credit risk exposure.
In order to reduce credit risk, the Group has formed a team to determine the credit limit, conduct credit approval, and
implement other monitoring procedures to ensure that necessary measures are taken to recover over-due debt. In addition,
320
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
the Group reviews the recovery of financial assets on each balance sheet date to ensure that sufficient credit loss provisions
are made for relevant financial assets. Therefore, the management of the Group believes that the credit risk exposure of
the Group has been reduced significantly.
The credit risk on cash and bank balances of the Group is low as they are deposited with banks with high credit ratings.
For accounts receivable, contract assets and long-term receivables, the Group has put in place relevant policies to control
credit risk exposure. The Group assesses credit quality of customers and sets corresponding credit period based on the
customer’s financial status, the possibility of obtaining guarantees from third parties, credit history and other factors such
as current market conditions. The Group will regularly monitor the credit history of its customers. For customers with
poor credit history, the Group takes various measures, such as written payment reminders, shorten or cancel the credit
period, to ensure that the overall credit risk of the Group is maintained in a controllable range. For accounts receivable
and contract assets, the Group uses a simplified method, that is, to measure the loss provision based on the amount
equivalent to the expected credit loss for the entire duration. For details of the relevant expected credit loss measurement,
see (Note (V). 4 & Note (V)-9). For long-term receivables, the Group calculates the expected credit losses based on the
expected credit loss rate in the next 12 months or the entire duration based on the default risk exposure. For details of the
related expected credit loss measurement, see (Note (V). 12).
The Group’s notes receivable and receivables for financing are mainly bank acceptance notes and commercial acceptance
notes with high credit ratings of the counterparties, which the Group does not consider to be subject to significant credit
risk and will not incur any material loss due to default by the counterparties.
For other receivables (except for tax refund receivable), the Group regularly monitors the debtor’s credit history. For
debtors with poor credit history, the Group takes various measures such as written payment reminders to ensure that the
Group’s overall credit risk is maintained in a controllable range. For other receivables (except for tax refund receivable),
the Group calculates the expected credit loss based on the expected credit loss ratio in the next 12 months or the entire
duration based on the default risk exposure. For details of the relevant expected credit loss measurement, see (Note (V).
7).
The Group’s risk exposure is distributed among multiple contractors and multiple customers, so the Group has no
significant credit concentration risk.
2.3. Liquidity risk
The Group maintains and monitors a level of cash and cash equivalents deemed adequate by the management to meet the
operation needs of the Group and to reduce the effect of cash flow movements when managing liquidity risk. The
management of the Group monitors the usage of bank borrowings, and ensures compliance with borrowing agreements.
According to the term to maturity of non-discounted and remaining contract obligations, the financial liabilities held by
the Group are analyzed as below:
Unit：RMB
December 31st 2020
Within one year 1-5 years More than five years Total
Non-derivative financial
liabilities
Short-term borrowings 4,064,285,416.93 - - 4,064,285,416.93
Notes payable 1,036,920,229.85 - - 1,036,920,229.85
Accounts payable 13,593,884,790.19 - - 13,593,884,790.19
Other payables 1,525,053,355.95 - - 1,525,053,355.95
Other current liabilities 560,959,368.73 - - 560,959,368.73
Other non-current liabilities - 560,959,368.74 - 560,959,368.74
Long-term debt (including those
3,720,856,676.22 1,012,468,505.00 1,277,492,929.04 6,010,818,110.26
due within one year)
321
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
December 31st 2020
Within one year 1-5 years More than five years Total
Long-term payables (including
23,524,535.36 33,337,833.13 8,000,000.00 64,862,368.49
those due within one year)
Derivative financial instruments
Forward foreign exchange
contracts- settled in the gross
amount
- Cash inflow 2,382,536,343.19 - - 2,382,536,343.19
- Cash outflow 2,370,937,267.57 - - 2,370,937,267.57
- Net cash outflow (11,599,075.62) - - (11,599,075.62)
IX. Fair value disclosure
1. The financial assets and financial liabilities measured at fair value at the end of the reporting period
Unit：RMB
Closing fair value
Items
Level 1 Level 2 Level 3 Total
I. Continuous fair value measurement - 1,974,875,270.87 491,939,067.27 2,466,814,338.14
(I) Financial assets measured at fair value through profit and loss
1. Held-for-trading Financial Assets - 22,679,846.77 - 22,679,846.77
-- Derivative financial assets - 22,679,846.77 - 22,679,846.77
2. Other non-current financial assets - - 491,939,067.27 491,939,067.27
(II) Receivables for financing - 1,959,601,195.25 - 1,959,601,195.25
Total assets measured continuously at fair value - 1,982,281,042.02 491,939,067.27 2,474,220,109.29
(III) Financial liabilities measured at fair value through profit and loss
1. Held-for-trading Financial Liabilities 7,405,771.15 - 7,405,771.15
- Derivative financial liabilities - 7,405,771.15 - 7,405,771.15
Total liabilities measured continuously at fair value - 7,405,771.15 - 7,405,771.15
2. Information on the estimation technique and important parameters adopted as for continuous Level 2 fair
value measurement items
Unit: RMB
Fair value at
December 31st Estimation technique Inputs
2020
Forward exchange rate
Forward Foreign Exchange
22,679,846.77 Discounted cash flow approach Discounted rate that reflects the credit risk of
Contracts (Assets)
counterparty
Forward exchange rate
Forward Foreign Exchange
(7,405,771.15) Discounted cash flow approach Discounted rate that reflects the credit risk of
Contracts (Liabilities)
counterparty
Discounted rate that reflects the credit risk of
Receivables for financing 1,959,601,195.25 Discounted cash flow approach
counterparty
3. The third level of fair value measurement item, the valuation techniques and important parameters used
Unit: RMB
Fair value at
Items Valuation techniques Inputs
December 31st 2020
Other non-current financial Comparable public companies’ PB (price/book
assets-- Investment in equity Market approach
491,939,067.27 value) ratio within the same industry
instruments of private /Income approach
companies /Future cash flows, Discount rate
4. The third level of fair value measurement item, adjustment information between the opening and closing
book value
Unit: RMB
322
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Other non-current financial assets Amount
Book value on January 1st 2020 312,398,267.44
Increase in the current reporting period 112,872,015.00
Decrease in the current reporting period (2,810,000.00)
Changes in fair value booked into profit and loss during the current reporting
69,478,784.83
period
Book value on December 31st 2020 491,939,067.27
The total amount included in profit or loss in 2020 includes unrealized gains of RMB 69,478,784.83 (2019: RMB
17,547,234.44) related to financial assets measured at fair value at the end of the fiscal year, and such gains or losses are
included in the gains or losses from changes in fair value; The realized gains of financial assets measured at fair value at
the end of the year which were included in investment income in the current fiscal year was RMB 150,000,000.00 (2019:
RMB 17,357,220.31).
5. Items measured at continuous fair value. There were no transfers between levels for the current reporting
period. There was no estimation technique change for the current reporting period
6. Fair values of financial assets and financial liabilities that not measured at fair value
The Group’s management team believes that financial assets and financial liabilities measured at amortized cost mainly
include monetary fund, notes receivable, accounts receivable, other receivables (other than tax refund receivables), non-
current assets due within one year, short-term borrowings, notes payable, accounts payable, other payables, other current
liabilities (other than Output VAT To-be-Transferred), non-current liabilities due within one year, long-term borrowings,
long-term payables and other non-current liabilities, etc., carrying value of which approximates to its fair value.
X. Related party relationships and transactions
1. Information on parent company of the Company
Percentage of voting
Shareholding ratio of
Place of Nature of rights of parent
Name Registered capital parent company in the
registration business company to the
Company (%)
Company (%)
China Electronics Technology
Hangzhou, Industrial
HIK Group Co., Ltd. RMB 660 million 38.88 38.88
Zhejiang investment
(CETHIK)
The ultimate controlling party of the Company is China Electronics Technology Group Co., Ltd. ("CETE").
2. Information on the subsidiaries of the Company
For details of the subsidiaries of the Company, see Note (VII).
3. Information on the joint ventures and associated companies of the Company
For details of the associates and joint ventures of the Company, see Note (V) 13.
Other joint ventures and associates that had related party transactions with the Group in the current reporting period, or in
the prior periods and formed balances are as follows:
Name of the associates or joint ventures Relationship with the Company
Wuhu Sensor-Tech Intelligent Technology Co., Ltd. (Wuhu SensorTech) and its
Associated company
subsidiaries
Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries (Maxio Technology) and
Associated company
its subsidiaries
Zhiguang Hailian Big Data Technology Co., Ltd. (Zhiguang Hailian) and its subsidiaries Associated company
323
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Jiaxin Haishi JiaAn Zhicheng Technology Co., Ltd. (Haishi JiaAn) Associated company
Qinghai Qingtang Big Data Co., Ltd. (Qingtang Big Data) Associated company
Sanmenxia Xiaoyun Vision Technology Co., Ltd. (Xiaoyun Vision Technology) Associated company
Daishan Hailai Yunzhi Technology Co., Ltd. (Daishan Hailai) Joint venture
Guangxi Haishi and its subsidiaries Joint venture
Shenzhen City Service and its subsidiaries Joint venture
Xuzhou Kangbo Joint venture
Yunan Yinghai Joint venture
Zhejiang City Digital Technology Joint venture
Haishi Huayue Joint venture
4. Information on other related parties
Name Relationship
Major shareholder and director of the company that holds more
Gong Hongjia
than 5% of the share of the Company
Shanghai Fullhan Microelectronics Co., Ltd. (Shanghai Fullhan Micro) Gong Hongjia or his relative(s) serve(s) as the director(s)
Shenzhen Wanyu Security Service Technology Co., Ltd. (Shenzhen The Group’s senior management serve(s) as director(s) of this
Wanyu Security Service) and its subsidiaries company
Confirmware Technology(Hangzhou) Co., Ltd. (Hangzhou The Group’s senior management serve(s) as director(s) of this
Confirmware) company (Note 1)
The Group’s senior management serve(s) as director(s) of this
Zhejiang Tuxun Technology Co.,Ltd. (Zhejiang Tuxun)
company (Note 2)
Under common control of the ultimate controlling party of the
Subsidiaries of CETE (Note 3)
Company
Note 1: Due to the departure of the senior management of the Group in 2019, the current reporting period was within one
year after he/she left the position, therefore, Hangzhou Confirmware was still recognized as a related party of the Group
in the current reporting period.
Note 2: the senior management of the Group had left the post in 2018, and last year was one year after his departure,
therefore, Zhejiang Tuxun was still identified as a related party of the Group in 2019, and was no longer recognized as a
realted party of the Company in the current fiscal year.
Note 3: Subsidiaries of CETC, excluding Hikvision and its subsidiaries.
5. Related party transactions
(1) Related party transactions regarding sales and purchases of goods, provision of services and receiving services
Purchase of commodities / receiving of services:
Unit: RMB
Related party Transaction type Amount occurred in 2020 Amount occurred in 2019
Purchase of materials and
Subsidiaries of CETE 826,842,233.14 385,462,257.69
receiving of services
Purchase of materials and
Shanghai Fullhan Micro 243,902,272.09 366,576,874.81
receiving of services
Purchase of materials and
Wuhu SensorTech 61,712,356.51 63,261,094.03
receiving of services
Purchase of materials and
Maxio Technology and its subsidiaries 20,353,951.20 49,188,682.39
receiving of services
Purchase of materials and
Haishi Huayue 1,743,775.22 -
receiving of services
Shenzhen City Service and its Purchase of materials and
357,000.00 -
subsidiaries receiving of services
Purchase of materials and
Zhiguang Hailian and its subsidiaries 135,782.26 -
receiving of services
Total 1,155,047,370.42 864,488,908.92
324
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Sales of commodities / rendering of services:
Unit: RMB
Related party Transaction content Amount occurred in 2020 Amount occurred in 2019
Sales of products and 350,558,721.59
Subsidiaries of CETE 481,423,053.77
rendering of services
Sales of products and 38,199,938.50
Haishi JiaAn 488,565.32
rendering of services
Sales of products and 29,854,444.59
Daishan Hailai -
rendering of services
Sales of products and 18,259,614.17
Yunnan Yinghai -
rendering of services
Sales of products and 14,374,052.45
Zhiguang Hailian and its subsidiaries 4,099,860.19
rendering of services
Sales of products and 13,760,843.37
Zhejiang City Digital Technology -
rendering of services
Sales of products and 3,748,314.02
Xiaoyun Vision Technology 8,014,997.11
rendering of services
Sales of products and 3,685,281.81
Haishi Huayue -
rendering of services
Sales of products and 3,150,603.57
Xuzhou Kangbo -
rendering of services
Sales of products and 1,906,811.54
Wuhu Sensor Tech and its subsidiaries 4,130,770.44
rendering of services
Sales of products and 1,769,911.50
Guangxi Haishi and its subsidiaries -
rendering of services
Sales of products and 1,492,966.38
Qingtang Big Data -
rendering of services
Sales of products and 589,159.33
Hangzhou Confirmware 112,261.40
rendering of services
Sales of products and 153,465.93
Maxio Technology and its subsidiaries 160,288.14
rendering of services
Sales of products and 198,230.06
Wanyu Security and its subsidiaries -
rendering of services
Sales of products and 46,006.90
Shenzhen City Service and its subsidiaries -
rendering of services
Sales of products and Not applicable
Zhejiang Tuxun 449,431.44
rendering of services
Total 481,748,365.71 498,879,227.81
Statement of capital deposits:
Unit: RMB
Balance at the
Content of related Amount occurred in end of the Amount occurred
Related Party Opening Balance
party transaction the 2020 current reporting in 2019
period
Subsidiaries of CETE Deposit into fixed
- 4,000,000,000.00 - 4,000,000,000.00
(Note) deposits
Total - 4,000,000,000.00 - 4,000,000,000.00
Note: the fixed deposits that the Group deposited into China Electronic Technology Finance Co., Ltd.
The above transactions are executed at market prices.
(2) Guaranteed by the related party
325
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
As required by the project owner, China Electronics Technology Group Co., Ltd. has provided a joint guarantee to
responsibility and duties of construction projects of “Safe Chongqing, Emergency Control System Digital Construction
Project”, including 41 districts and counties, signed by the Group’s subsidiary Chongqing Hikvision System Technology
Ltd. (Chongqing System) Meanwhile, the Company, Hikvision, provides a counter guarantee to China Electronics
Technology Group Co., Ltd.
(3) Compensation for key managers
Unit: RMB
Item Amount occurred in 2020 Amount occurred in 2019
Compensation for key managers 38,952,000.00 44,518,667.00
(4) Other related party transactions
Financial Leasing
Pursuant to resolution of the Company’s 7th meeting of the fourth session of the Board of Directors held on December 3rd
2018, the Group’s subsidiary Hangzhou Hikmicro signed a financial leasing contract with a subordinate company of CETC,
HikMicro will carry out sale and leaseback business of part of its self-owned equipment with the CETC’s subordinate
company. The new financing amount in 2019 was RMB 70 million, with lease term of 48 months, and the annual lease
rate is 3.8%.
Entrusted management of the interest expenditure of borrowed funds
On April 19th 2019, CETHIK signed an entrusted management agreement with the holding subsidiary of the Company,
Hangzhou EZVIZ Network Ltd. (“EZVIZ Network”) to entrust EZVIZ Network to exercise the actual operating
management right over Hangzhou EZVIZ Technology Ltd. (“EZVIZ Technology”), and be fully responsible for the
production, operation and management of EZVIZ Technology, and EZVIZ Network shall not charge fixed entrusted
management fees from CETHIK while EZVIZ Network is entitled to the 100% distributable profits generated by EZVIZ
Technology prior to or after the entrusted management. At the same time, EZVIZ Network shall make a payment to
CETHIK as occupying fund fees at the basis of paid-in capital of EZVIZ Technology of RMB 8,000,000.00 and at an
interest rate up by 1% for loans over five years in the Central Bank. The amount in the current year of the interest
expenditure of the aforementioned occupying funds was RMB 1,144,831.70.
6. Receivables from related parties and payables to related parties
(1) Receivables from related parties
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Subsidiaries of CETE 694,163,118.90 108,859,842.53 761,252,308.57 54,524,384.59
receivable
Accounts
Haishi JiaAn 29,762,113.04 975,776.51 541,468.80 21,296.76
receivable
Accounts
Daishan Hailai 16,387,257.40 194,920.07 - -
receivable
Accounts Zhejiang City Digital
12,427,421.59 561,604.39 - -
receivable Technology
Accounts Xiaoyun Vision
10,929,211.22 412,855.37 6,896,577.22 382,760.04
receivable Technology
Accounts Zhiguang Hailian and its
9,436,662.00 111,434.71 4,270,910.00 47,006.81
receivable subsidiaries
Accounts
Haishi Huayue 2,112,591.44 42,509.22 - -
receivable
Accounts Wuhu Sensor Tech and its
823,165.40 37,207.08 4,486,674.99 249,010.46
receivable subsidiaries
Accounts
Xuzhou Kangbo 786,702.90 35,558.97 - -
receivable
326
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Qingtang Big Data 660,000.00 29,832.00 - -
receivable
Accounts
Hangzhou Confirmware 83,150.00 981.17 - -
receivable
Accounts Maxio Technology and its
45,667.50 538.88 158,025.60 1,295.81
receivable subsidiaries
Accounts Not applicable Not applicable
Zhejiang Tuxun 130,838.99 1,072.88
receivable
Total 777,617,061.39 111,263,060.90 777,736,804.17 55,226,827.35
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes Subsidiaries of CETE
78,876,284.35 - 162,553,909.93 -
receivable (Note)
Notes
Haishi JiaAn 9,147,466.00 - - -
receivable
Notes Zhiguang Hailian and its
1,120,000.00 - 244,719.00 -
receivable subsidiaries
Total 89,143,750.35 - 162,798,628.93 -
Note: Among them, the RMB 4,000,000.00 (2019: RMB 32,697,400.57) notes receivable are the acceptance bills of which
the drawer is the related party, and the former endorsers are unrelated third parties.
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Other
Subsidiaries of CETE 132,459.00 1,563.02 - -
receivables
Other
Haishi Huayue 279,452.11 3,297.53 - -
receivables
Other Shenzhen City Service
140,000.00 1,652.00 - -
receivables and its subsidiaries
Total 551,911.11 6,512.55 - -
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Long-term
receivables Subsidiaries of CETE 73,512,305.64 2,015,923.07 20,000,000.00 164,000.00
(including those due
within one year)
Long-term
receivables
Yunnan Yinghai 21,444,096.16 253,040.33 - -
(including those due
within one year)
Long-term
receivables
Xuzhou Kangbo 1,581,135.63 29,277.25 - -
(including those due
within one year)
Long-term Xiaoyun Vision
2,295.00 103.73 - -
receivables Technology
Total 96,539,832.43 2,298,344.38 20,000,000.00 164,000.00
327
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit: RMB
Item Related Party Closing balance Opening balance
Carrying balance Credit loss provision Carrying balance Credit loss provision
Prepayments Subsidiaries of CETE 4,339,675.60 - 1,399,872.38 -
Total 4,339,675.60 - 1,399,872.38 -
(2) Payables to related parties
Unit: RMB
Item Related Party Closing balance Opening balance
Accounts payable Subsidiaries of CETE 360,026,227.41 226,498,160.40
Accounts payable Shanghai Fullhan Micro 117,676,674.67 143,284,053.29
Wuhu Sensor Tech and its
Accounts payable 6,286,164.42 9,203,484.14
subsidiaries
Accounts payable Maxio Technology and its
545,124.36 12,763,683.98
subsidiaries
Total 484,534,190.86 391,749,381.81
Unit: RMB
Item Related Party Closing balance Opening balance
Notes Payable Subsidiaries of CETE 17,301,547.82 13,054,828.27
Notes Payable Shanghai Fullhan Micro 3,648,820.00 7,110,446.00
Total 20,950,367.82 20,165,274.27
Unit: RMB
Item Related Party Closing balance Opening balance
Contract liabilities Subsidiaries of CETE 10,507,934.92 7,172,635.75
Contract liabilities Xuzhou kangbo 201,887.56 -
Zhiguang Hailian and its
Contract liabilities 57,630.00 -
subsidiaries
Contract liabilities Daishan Hailai 688.00 -
Total 10,768,140.48 7,172,635.75
Unit: RMB
Item Related Party Closing balance Opening balance
Other payables Subsidiaries of CETE 47,056,334.07 56,022,589.40
Other payables Shanghai Fullhan Micro 100,000.00 100,000.00
Other payables Wuhu Sensor Tech - 51,200.00
Total 47,156,334.07 56,173,789.40
Unit: RMB
Item Related Party Closing balance Opening balance
Long-term payables (including
Subsidiaries of CETE 49,213,376.81 55,814,753.72
those due within one year)
Total 49,213,376.81 55,814,753.72
XI. Share-based payments
1. Overview of share-based payments
Restrictive Share Incentive Sheme
According to the Approval of the Implementation of the Restrictive Share Incentive Scheme of Hangzhou Hikvision Digital
Technology Co., Ltd. (关于杭州海康威视数字技术股份有限公司实施限制性股票激励计划的批复) (Guo Zi Fen Pei
[2012] No. 426) issued by the State-owned Assets Supervision and Administration Commission of the State Council and
328
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
the Opinion the Restrictive Share Incentive Scheme of Hangzhou Hikvision Digital Technology Co., Ltd. (关于杭州海康
威视数字技术股份有限公司限制性股票激励计划的意见) (Shang Shi Bu Han [2012] No. 353) issued by China
Securities Regulatory Commission, the Company convened the ninth meeting of the second session of the Board of
Directors on July 25th 2012 and the first extraordinary general meeting for 2012 on August 13th 2012, whereat the Proposal
Relating to the Restrictive Share Scheme (Amendments to the Draft) of the Company and Highlights was reviewed and
passed. The purpose of the Share Incentive Scheme is to: further improve the Company’s governance structure to establish
a good and balanced value allocation system; establish a profit-sharing and restriction mechanism among shareholders,
the Company and its employees, so as to provide shareholders with sustainable return; fully mobilize the positivity of core
employees to support the Company in realizing its strategies and long-term sustainable development; attract and retain
core employees to ensure the Company’s long-term development.
The Scheme shall be effective for a term of 10 years commencing from the date of approval by general meeting of the
Company, during which the Company may grant restricted shares to grantees under the Scheme. In principle, each grant
should be at an interval of two years. After the expiry of the Scheme, no restricted shares could be granted to grantees
under the Scheme. However, all the provisions of the Scheme remain valid to the restricted shares granted under the
Scheme.
Each batch of restricted shares shall not be unlocked unless fulfilling, each time, by the Company its unlock performance
criteria (including net asset yield and operating income growth rate), and by grantees’ individual performance criteria
simultaneously. Where, during any year of the unlocking period, any one or more unlock criteria for the Company or
individuals is or are not fulfilled, such portion of subject shares shall be cancelled, and no grantees shall be entitled to
make another application for unlocking those subject shares in the future years. The cancelled restricted shares will be
repurchased by the Company based on the grant price.
On December 23rd 2016, after consideration and approval by the general meeting, the Company granted 52,326,858
restricted shares to grantees at a grant price of RMB 12.63 per share (“2016 Share Incentive Scheme”). The Lock-up
Period of the Subject Shares shall last for a period of 24 months commencing on the grant date, during which the Subject
Shares granted to grantees under the scheme shall be subject to lock-up and shall not be transferable. The Unlocking Period
shall be the 24 to 60 months following the grant of restricted shares (including Lock-up Period), during which grantees
may, subject to unlocking conditions stipulated by the scheme being satisfied, apply for unlocking in 3 tranches: the first
unlocking period shall be the 24 to 36 months following the grant date and the number of shares to be unlocked shall be
40% of the aggregate number of the Subject Shares granted; the second unlocking period shall be the 36 to 48 months
following the grant date and the number of shares to be unlocked shall be 30% of the aggregate number of the Subject
Shares granted; the third unlocking period shall be the 48 to 60 months following the grant date and the number of shares
to be unlocked shall be 30% of the aggregate number of the Subject Shares granted. As of December 31st 2020, all restricted
shares awarded in 2016 have been closed.
On December 20th 2018, authorized by the 2nd extraordinary general meeting of 2018 and reviewed by the board of
directors, the Company granted 121,195,458 restricted shares to grantees at a grant price of RMB 16.98 per share (“2018
Share Incentive Scheme”). The Lock-up Period of the Subject Shares shall last for a period of 24 months commencing on
the grant date, during which the Subject Shares granted to grantees under the scheme shall be subject to lock-up and are
not transferable. The Unlocking Period shall be the 24 to 60 months following the grant of restricted shares (including
Lock-up Period), during which grantees may, subject to unlocking conditions stipulated by the scheme being satisfied,
apply for unlocking in 3 tranches: the first unlocking period shall be the 24 to 36 months following the grant date and the
number of shares to be unlocked shall be 40% of the aggregate number of the Subject Shares granted; the second unlocking
period shall be the 36 to 48 months following the grant date and the number of shares to be unlocked shall be 30% of the
aggregate number of the Subject Shares granted; the third unlocking period shall be the 48 to 60 months following the
grant date and the number of shares to be unlocked shall be 30% of the aggregate number of the Subject Shares granted.
The Company has completed the equity registration work in January 2019.
Unit: share
2016 Share Incentive Scheme 2020 2019
Total of equity instruments outstanding at the beginning of the reporting
21,974,740 45,404,512
period
Total of equity instruments granted during the current reporting period - -
Total of equity instruments vested during the current reporting period 21,204,645 21,836,266
329
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
2016 Share Incentive Scheme 2020 2019
Total of equity instruments forfeited during the current reporting period
770,095 1,593,506
(Note)
Total of equity instruments outstanding at the end of the reporting period - 21,974,740
The exercise price (ex-rights) of the outstanding Share-based payments RMB 8.42 per share &
of the Company at the end of the reporting period and the remaining -
period of the contract 24 months
Note:
On December 25th 2020, pursuant to the revised Articles of Association and resolution of the 20th geneal meeting of 4th
session of the Board, and approved by the second extraordinary general meeting of 2018, the Company repurchased and
cancelled 770,095 granted and unvested restricted RMB treasury shares in cash. As of the reporting date, the Company
has not completed the registration procedures of equity changes.
On December 24th 2019, authorized by the Company's second extraordinary shareholders' meeting in 2016 and according
to the resolutions and the revised articles of association of the 14th meeting of the fourth board of directors, the Company
repurchased and cancelled the granted and unvested 1,593,506 restricted RMB treasury shares in cash. On December 17th
2020, the Company has not completed the equity registration procedures.
Unit: share
2018 Share Incentive Scheme 2020 2019
Total of equity instruments outstanding at the beginning of the
121,195,458 121,195,458
reporting period
Total of equity instruments granted (share dividend) during the current
- -
reporting period
Total of equity instruments vested during the current reporting period 45,591,794 -
Total of equity instruments forfeited during the current reporting
6,840,981 -
period
Total of equity instruments outstanding at the end of the reporting
68,762,683 121,195,458
period
The exercise price (ex-rights) of the outstanding Share-based payments
RMB 16.98 per share RMB 16.98 per share
of the Company at the end of the reporting period and the remaining
& 36 months & 48 months
period of the contract
Note: On December 25th 2020, authorized by the Company's second extraordinary shareholders' meeting in 2018 and
according to the resolutions and the revised Articles of Association of the 20th meeting of the fourth board of directors, the
Company repurchased and cancelled the granted and unvested 6,840,981 restricted RMB treasury shares in cash. As of
the reporting date, the Company has not completed the registration procedures of equity changes.
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
On October 22nd 2015, Hikvision considered and approved Management Measures for Core Staff Co-Investment in
Innovative Businesses (Draft) (hereafter referred to as “Management Measures”) at the 2nd extraordinary general meeting.
On March 7th 2016, representative congress of labor union of Hikvision passed Implementation Provisions for
Management Measures for Core Staff Investment in Innovative Businesses (hereafter referred to as “Provisions”), to initiate
and implement the incentive mechanism of staff co-investment (hereafter referred to as “Staff Co-Investment Plan”) in
innovative business subsidiaries. Staff who participate in the Staff Co-Investment Plan (hereafter referred to as “Co-
Investment Staff”) signed an Entrusted Investment Agreement with the labor union committee of Hikvision (hereafter
referred to as “Hikvision Labor Union”), to entrust Hikvision Labor Union to make investments. Hikvision Labor Union,
as a principal, shall cooperate with a trust company, which shall be a limited partner (LP) of a partnership enterprise, to
establish a trust plan, and to invest trust funds into innovative business subsidiaries. (Investment form described above is
referred to as “Co-Investment Platform”).
Staff Investment Plan is classified as plan A and plan B according to applicable grantees. Grantees of plan A are comprised
of medium-and-senior level management personnel and core competent staff from Hikvision, its wholly-owned
subsidiaries, and innovative business subsidiaries, and are able to invest in all innovative businesses. Grantees of plan B
330
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
are comprised of core and full-time staff from innovative business subsidiaries, and could participate in investment on
innovative business subsidiaries where they serve. The Co-Investment Platform will increase capitals annually, the
corresponding increased equity of which will be distributed to core staff who meets investment conditions pursuant to
particular rules.
The lock-up period shall be five years after equity of Co-Investment Platform is held by the staff, which will be unlocked
in one-off manner when due. Within the lock-up period, if the labor relationship between the grantees and the Company
or its subsidiaries is released or terminated, equity of Co-Investment Platform held by the grantees shall be refunded and
settled by the labor union at an agreed price pursuant to the Provisions.
The Co-Investment Platform grants Co-Investment Staff additional equity annually. The Group determines whether share-
based payment shall be constituted based on the fair value of equity instruments newly obtained by the Group’s staff in
Co-Investment Platform on each granting date. During the year, the Group recognized share-based payment of RMB
152,253,261.12 in aggregate based on the fair value of services obtained by the Group.
2. Information of the share-based payment through equity settlements
Restrictive Share Incentive Sheme
Unit: RMB
2016 Share Incentive Scheme 2018 Share Incentive Scheme
Determined based on stock price at the Determined based on stock price at the
Method of determine the fair value of equity
grant date and the costs of restricted grant date and the costs of restricted
instruments at the grant date shares during Lock-up Period shares during Lock-up Period
Recognition basis of the number of the equity Determined based on the results Determined based on the results
instruments qualified for vesting estimation of each release period estimation of each release period
Performance conditions for vesting the
Reasons of the significant difference between the
restricted shares have been revised this
estimates of the current reporting period with that of None
year, as detailed in Note (XI)- 4,
the prior year
Restricted Shares Incentive Scheme
Accumulative amount of share-based payment
through equity settlement and further included in the 345,213,163.42 852,748,384.69
capital reserve
Total amount of the expenses recognized according to
share-based payment through equity settlement in the 24,136,568.62 641,716,793.45
current reporting period
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
Unit：RMB
Share Incentive Scheme of Staff Co-Investment in
Innovative Businesses
Evaluated and determined based on income method at the
Method of determining the fair value of equity instruments at the grant date
grant date
Recognition basis of the number of the equity instruments qualified for Estimated and determined based on the performance result
vesting conditions of each vesting period
Accumulative amount of share-based payment through equity settlement and
116,618,260.92
further included in the capital reserve
Total amount of the expenses recognized according to share-based payment
152,253,261.12
through equity settlement in the current reporting period
Among total amount of the expenses recognized according to share-based payment through equity settlement during the
current fiscal year, amount of RMB 35,635,000.20 was due to share distributions to minority shareholders; As of December
31st 2020, accumulative amount of share-based payment through equity settlement of RMB 35,635,000.20 was included
in the equity of minority shareholders.
3. There is no share-based payment through cash settlements
331
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
4. Revision and termination of share-based payment
Restrictive Share Incentive Scheme
The 2018 share incentive performance evaluation indicators were revised at the 2019 annual general meeting convened
on May 15th 2020 by approval of the Proposal on Revision to the Company’s Performance Evaluation Indicators for the
2018 Restricted Share Incentive Scheme. The historical comparison value of the compounded operating income growth
rate and the benchmark companies’ comparison value over the same period will be used as alternative evaluation indicators,
that is, if either of the two indicators were satisfied, the Company’s performance evaluation indicator for the current
unlocking period is considered to be satisfied. The particulars of the revision are set out as follows: the performance
evaluation indicators set out in the Company’s 2018 Restricted Share Incentive Scheme (Revision to the Draft) that “the
compounded operating income growth rate at the year before the time of unlocking is no less than 20% and no less than
75th percentiles level of growth rate of the benchmark companies at the same period as compared to those at the year before
the time of grant” was revised to be that “the compounded operating income growth rate at the year before the time of
unlocking is no less than 20% or no less than 75th percentiles level of growth rate of benchmark companies at the same
period as compared to those at the year before the time of grant”.
The Company believes that current operating environment has changed materially as compared to that when 2018
Restrictive Share Scheme was formulated, and therefore, the Company had revised the performance evaluation indicators
set out in the 2018 Share Incentive Scheme during the current fiscal year.
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
To adapt to the new changes brought by the proposed spin-off of a subsidiary, EZVIZ Network for its listing, from
Hikvision, Co-Investment Staff and Hikvision Labor Union executed the Supplemental Agreement to the Entrusted
Investment Agreement (hereafter referred to as “Supplemental Agreement”) in December 2020. On December 25th 2020,
Hikvision convened the 20th meeting of the 4th session of the Board to consider and approve the Proposal on Revision to
Management Measures for Core Staff Co-Investment in Innovative Businesses. The new version of Management Measures
for Core Staff Co-Investment in Innovative Businesses (hereafter referred to as “Management Measures (New Version)”)
has added the authentic right for equity shares of co-investment plan held by staff and equity shares of innovative business
subsidiaries indirectly held by them, specified the processing measures of investment equity shares held by staff after they
lose the qualification or are cancelled to be qualified for co-investment, and added the systems of management committee,
and etc.
On December 31st 2020, co-investment plan execution and management committee approved the Implementation
Provisions for Management Measures for Core Staff Co-Investment in Innovative Businesses (hereafter referred to as
“Provisions (New Version)”). Pursuant to the Management Measures (New Version) and Provisions (New Version), the
Lock-up Period in respect of plan A’s equity shares with the authentic right shall last for a period of a full-five years during
which the staff has served for the Company or its subsidiaries; the Lock-up Period in respect of plan B’s equity with the
authentic right shall last for a period of a full-five years during which the staff has served for the corresponding innovative
business subsidiary or its subsidiaries.
XII. Commitments and contingencies
1. Significant commitments
(1) Capital commitments
Unit: RMB’000
Closing balance Opening balance
Contracted but not yet recognized in financial statements
- Commitment on construction of long-term assets 9,573,577 10,905,300
- Commitment on external investments 42,400 550,000
Total 9,615,977 11,455,300
332
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
(2) Operating lease commitments
As of the balance sheet date, the Group had the following external commitments in respect of non-cancellable operating
leases:
333
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit: RMB’000
Closing balance Opening balance
Minimum lease payments under non-cancellable operating leases:
First year subsequent to the balance sheet date 179,814 235,585
Second year subsequent to the balance sheet date 98,860 154,430
Third year subsequent to the balance sheet date 76,606 92,851
Subsequent years 53,532 129,063
Total 408,812 611,929
(3) As of December 31st 2020, the Group has no other significant commitments need to be disclosed.
2. Contingencies
The Group has no significant contingencies to be disclosed.
XIII. Events after the balance sheet date
1. Significant unadjusted events
The spin-off of the Company’s subsidiary, Hangzhou EZVIZ Network, to be listed on the SSE STAR (Sci-Tech Innovation
Board) Market
On January 8th 2021, the Company convened the 21st meeting of the 4th session of the Board, to consider and approve the
Proposal on the Initial Public Share Offering and Listing on the STAR Market of the Shanghai Stock Exchange of the
Subsidiary, Hangzhou EZVIZ Network Co., Ltd., Proposal on the Spin-off of the Subsidiary, Hangzhou EZVIZ Network
Co., Ltd. to be Listed on the SSE STAR Market, by Hangzhou Hikvision Digital Technology Co., Ltd., and etc., to propose
the listing of its holding subsidiary, Hangzhou EZVIZ Network, on the STAR Market of the Shanghai Stock Exchange
after changing it to a limited company as a whole and its spin-off from the Company. The Company’s management expects
that the Company and EZVIZ Network will be specialized on their operations and develop their advantageous businesses
on their own after the spin-off and listing, to facilitate the maximization of the shareholders’ value of each party. This
proposal is still subject to the approval of the general meeting of the Company; the relevant proposals on the initial public
share offering and listing on the SSE STAR Market of EZVIZ Network are still subject to the consideration and approval
of the board of directors and the general meeting of EZVIZ Network; the initial public share offering and listing on the
SSE STAR Market of EZVIZ Network is still subject to the approval of the Shanghai Stock Exchange and the fulfillment
of the offering registration process of CSRC.
2. Profit Distribution
Pursuant to the proposal of the 2nd meeting of the 5th session of the Board of Directors on April 15th 2021, the Company
proposed to distribute cash dividend of RMB 8 (tax inclusive) per each 10 shares to all shareholders. The above dividend
distribution plan is still subject to the approval of the general meeting of shareholders.
XIV. Other significant events
1. Segment information
1.1 Report segment determining and accounting policy
According to the Group's internal organization structure, management requirements and internal report principles, the
Group has only one operating segment, which is the research and development, production and sales of video products
and video services.
1.2 Segment financial reporting
External revenue by geographical area & non-current assets by geographical location
Unit: RMB
334
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Item 2020 2019
External revenue generated in domestic area 45,806,567,913.73 41,419,508,094.09
External revenue generated in overseas area 17,696,882,978.05 16,238,601,971.13
Total 63,503,450,891.78 57,658,110,065.22
Unit: RMB
Item (Note) On December 31st 2020 On January 1st 2020
Non-current assets in domestic area 9,202,175,652.66 8,401,009,239.65
Non-current assets in overseas area 454,684,509.48 294,697,597.55
Total 9,656,860,162.14 8,695,706,837.20
Note: the non-current assets above did not include other non-current financial assets, long-term receivables, long-term
equity investment, and deferred tax assets.
335
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
XV. Notes to major items of financial statements of the parent company
1. Accounts receivable
1.1 Disclosure by age
Unit: RMB
Closing Balance
Aging
Accounts receivable Credit loss provision Proportion (%)
Within credit period 7,543,457,533.96 16,846,435.26 0.22
Within 1 year after exceeding credit period 16,299,894,312.09 73,843,384.42 0.45
1-2 years after exceeding credit period 432,048,595.19 94,372,538.40 21.84
2-3 years after exceeding credit period 141,983,528.60 60,423,474.75 42.56
3-4 years after exceeding credit period 56,374,022.37 34,879,980.02 61.87
Over 4 years after exceeding credit period 76,533,747.78 76,533,747.78 100.00
Subtotal 24,550,291,739.99 356,899,560.63 1.45
1.2 Classification and disclosure of by credit loss provision methods
Unit: RMB
Closing balance Opening balance
Carrying balance Credit loss provision Book value Carrying balance Credit loss provision Book value
Category
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount Amount Amount
(%) (%) (%) (%)
Provision for credit loss on a
- - - - - - - - - -
single basis
Provision for credit loss by
24,550,291,739.99 100.00 356,899,560.63 1.45 24,193,392,179.36 25,454,740,943.40 100 346,775,018.32 1.36 25,107,965,925.08
portfolios
Total 24,550,291,739.99 100.00 356,899,560.63 1.45 24,193,392,179.36 25,454,740,943.40 100 346,775,018.32 1.36 25,107,965,925.08
336
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Accounts receivable provision for credit loss by portfolios
Unit: RMB
Closing balance
Customer
Carrying balance Credit loss provision Proportion (%)
Subsidiaries’ customers 20,623,636,081.76 - -
Portfolio A 1,211,153.19 9,301.19 0.77
Portfolio B 3,925,238,885.86 356,684,640.26 9.09
Portfolio C 205,619.18 205,619.18 100.00
Total 24,550,291,739.99 356,899,560.63 1.45
Description of accounts receivable for credit loss provision by portfolios
As part of the Company's credit risk management, the Company uses the ageing of accounts receivable to assess the expected credit losses of accounts receivable formed by domestic and
overseas sales businesses, and the risk characteristics are divided according to different business area and target into portfolio A, portfolio B and portfolio C. For the accounts receivable
generated by the Group’s related parties, because the payment time is arranged by the Group according to the cash flow of the companies in the Group, the Company believes that the
credit risk is low and no provision for credit loss is required. The aging information can reflect the solvency of these three types of customers when the accounts receivable are due.
1.3 Credit loss provision
The provision for credit loss in the current reporting period is RMB 21,070,066.64.
The actual write-off of accounts receivable for the current fiscal year amounted to RMB 12,558,567.42, and there is a recovery of RMB 1,613,043.09 after write-off.
337
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
1.4 Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
Name of the Relationship with the Book value balance of accounts Closing balance for credit loss Proportion
Party Company receivable provision (%)
Subsidiary A Subsidiary 20,546,447,737.45 - 83.69
CETC’s
subsidiary Related party 181,223,569.28 23,284,283.90 0.74
company A
Third party C Third party 107,295,716.59 3,719,250.50 0.44
Third party J Third party 55,367,861.68 3,073,260.09 0.23
Third party K Third party 46,229,159.05 1,993,747.65 0.19
Total 20,936,564,044.05 32,070,542.14 85.29
1.5 As of December 31st 2020, there is no termination of accounts receivable booking due to transfer of a financial asset.
1.6 As of December 31st 2020, the Company has no assets/liabilities booked due to transferred accounts receivable that
the Company still continue to be involved in.
2. Other receivables
2.1 By categories
Unit：RMB
Category Closing balance Opening Balance
Dividends receivable 22,910,404.14 2,550,000.00
Other receivables 703,792,729.51 918,725,388.15
Total 726,703,133.65 921,275,388.15
2.2 Dividends receivable
Unit：RMB
Investees Closing balance Opening Balance
Subsidiaries of CETE 22,910,404.14 2,550,000.00
Total 22,910,404.14 2,550,000.00
2.3 other receivables
(1) Other receivables by aging
Unit: RMB
Closing Balance
Item
Other receivables Credit loss provision Proportion (%)
Within contract period 634,509,005.61 1,648,559.06 0.26
Within 1 year 50,953,297.06 2,233,096.83 4.38
1-2 years 12,926,792.49 2,713,664.99 20.99
2-3 years 17,863,896.99 7,899,415.25 44.22
3-4 years 6,637,912.12 4,829,679.73 72.76
Over 4 years 2,319,368.31 2,093,127.21 90.25
Subtotal 725,210,272.58 21,417,543.07 2.95
338
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
(2) Other receivables by nature of the payment
Unit: RMB
Nature Closing balance Opening balance
Payments by related parties within the Group 454,474,087.76 678,798,902.79
Temporary payments for receivables 219,103,746.42 196,954,698.49
Guarantee deposit 47,835,041.47 45,527,954.39
Others 3,797,396.93 7,240,271.59
Total 725,210,272.58 928,521,827.26
2.3 Provision for credit losses
The provision for credit losses in the current reporting period is RMB 11,621,103.96.
2.4 The actual write-off of other receivables in the current reporting period was nil.
2.5 Top 5 debtors of other receivables in terms of closing balance
Unit：RMB
Relationship with the Company Percentage to total other Closing balance for credit
The name of entity Nature Closing balance Aging
receivables (%) loss provision
Within contract
Subsidiary B Subsidiary Internal Payment 170,708,595.23 23.54 -
period
Within contract
Subsidiary C Subsidiary Internal Payment 73,356,492.91 10.12 -
period
Within contract
Subsidiary D Subsidiary Internal Payment 61,302,093.00 8.45 -
period
Within contract
Subsidiary E Subsidiary Internal Payment 21,867,738.77 3.02 -
period
Within contract
Subsidiary F Subsidiary Internal Payment 13,039,051.12 1.80 -
period
Total 340,273,971.03 46.93 -
2.6 At the end of the current reporting period, the Company had no other receivables involving government subsidies.
2.7 At the end of the current reporting period, there were no other receivables derecognized due to the transfer of financial assets.
2.8 At the end of the current reporting period, there were no assets or liabilities formed by continuing involvement in transferred other receivables
339
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
3. Long-term equity investment
Unit: RMB
Closing Balance Opening Balance
Item
Carrying Balance Provisions Book Value Carrying Balance Provisions Book Value
Investment in subsidiaries 5,912,831,208.01 - 5,912,831,208.01 4,878,400,682.40 - 4,878,400,682.40
Inestments in associated enterprises and
814,542,245.96 - 814,542,245.96 195,617,348.04 - 195,617,348.04
joint ventures
Total 6,727,373,453.97 - 6,727,373,453.97 5,074,018,030.44 - 5,074,018,030.44
3.1 Investment in subsidiaries
Unit：RMB
Write-off of Blance of
Increase during Decrease during impairment impairment loss
Opening Closing
Name of investee the current the current provision during the provision at the end
balance balance
reporting period reporting period current reporting of the current
period reporting period
Hangzhou Hikvision System Technology Co., Ltd. 776,276,512.41 71,995,980.21 - 848,272,492.62 - -
Hangzhou Hikvision Security Equipment Leasing Services Co.,
200,000,000.00 - - 200,000,000.00 - -
Ltd.
Shanghai Goldway Intelligent Transportation System Co., Ltd. 23,000,000.00 - - 23,000,000.00 - -
Chongqing Hikvision System Technology Co., Ltd. 700,000,000.00 - - 700,000,000.00 - -
Hundure Technology (Shanghai) Co., Ltd. 37,247,790.28 - - 37,247,790.28 - -
Hangzhou EZVIZ Network Co., Ltd. 9,150,235.55 52,592,512.43 - 61,742,747.98 - -
Hangzhou Haikang Zhicheng Investment and Development Co., 24,000,000.00 - - 24,000,000.00 - -
340
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Write-off of Blance of
Increase during Decrease during impairment impairment loss
Opening Closing
Name of investee the current the current provision during the provision at the end
balance balance
reporting period reporting period current reporting of the current
period reporting period
Ltd.
Hangzhou Hikrobot Technology Co., Ltd. 123,598,406.81 15,359,226.18 - 138,957,632.99 - -
Hangzhou Hikvision Investment Management Co., Ltd. 100,000.00 - 100,000.00 - - -
Hangzhou HikAuto Technology Co., Ltd. 183,723,427.59 2,765,128.01 - 186,488,555.60 - -
Hangzhou Hikvision Communication Technology Co., Ltd. 7,000,000.00 - - 7,000,000.00 - -
Hangzhou Hikmicro Sensing Technology Co., Ltd. 120,513,668.74 61,687,768.80 - 182,201,437.54 - -
HDT International Ltd. 87,786.14 - - 87,786.14 - -
Prama Hikvision Indian Private Limited 1,585,696.80 - - 1,585,696.80 - -
Hikvision International Co., Limited 79,423.52 - - 79,423.52 - -
Hikvision Australia Pty Ltd. 2,866,850.00 - - 2,866,850.00 - -
Hikvision Singapore Pte. Ltd. 1,900,590.00 - - 1,900,590.00 - -
Hikvision South Africa (Pty) Ltd. 1,578,650.00 - - 1,578,650.00 - -
Hikvision Dubai FZE 1,870,351.40 - - 1,870,351.40 - -
Hikvision Brazil Participacoes Ltda. 4,579,750.50 - - 4,579,750.50 - -
Hikvision Limited Liability Company 647,249.19 - - 647,249.19 - -
Coperatief Hikvision Europe U.A. 65,485.53 - - 65,485.53 - -
Hikvision Korea Limited 1,535,850.00 - - 1,535,850.00 - -
341
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Write-off of Blance of
Increase during Decrease during impairment impairment loss
Opening Closing
Name of investee the current the current provision during the provision at the end
balance balance
reporting period reporting period current reporting of the current
period reporting period
Hikvision Colombia SAS 1,337,440.00 - - 1,337,440.00 - -
Hikvision Kazakhstan limited liability partnership 4,758.69 - - 4,758.69 - -
Hikvision Turkey Technology And Security Systems Commerce
1,148,115.83 - - 1,148,115.83 - -
Corporation
Chongqing Hikvision Technology Co., Ltd. 100,541,006.38 1,777,592.36 - 102,318,598.74 - -
Hikvision USA, Inc. 1,546,160.00 - - 1,546,160.00 - -
Hikvision Canada, Inc. 994,442.54 - - 994,442.54 - -
Henan Hua’An Bao Quan Intelligent Development Co., Ltd. 67,475,000.00 30,859,200.00 - 98,334,200.00 - -
Henan Haikang Hua’An Bao Quan Electronics Co., Ltd. 510,000.00 33,430,800.00 - 33,940,800.00 - -
Hangzhou Hikvision Technology Co., Ltd. 1,034,004,725.85 32,912,506.85 - 1,066,917,232.70 - -
Hangzhou Hikvision Electronics Co., Ltd. 401,092,310.36 10,318,114.79 - 411,410,425.15 - -
Wuhan HikStorage Technology Co., Ltd. 60,869,464.15 - - 60,869,464.15 - -
Chengdu Hikvision Digital Technology Co., Ltd. 300,000,000.00 240,086,104.32 - 540,086,104.32 - -
Hangzhou HikAuto Software Co., Ltd. 5,483,004.52 9,053,170.08 - 14,536,174.60 - -
Hangzhou Haikang Intelligent Technology Co., Ltd. 2,726,015.34 5,963,128.62 - 8,689,143.96 - -
Hangzhou EZVIZ Software Co., Ltd. 12,535,758.31 22,548,397.51 - 35,084,155.82 - -
LLC Hikvision Tashkent 833,014.00 - - 833,014.00 - -
342
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Write-off of Blance of
Increase during Decrease during impairment impairment loss
Opening Closing
Name of investee the current the current provision during the provision at the end
balance balance
reporting period reporting period current reporting of the current
period reporting period
Xi’An Hikvision Digital Technology Co., Ltd. 75,000,000.00 10,000,000.00 - 85,000,000.00 - -
Wuhan Hikvision Technology Co., Ltd. 12,600,000.00 - - 12,600,000.00 - -
Wuhan Hikvision Science and Technology Co., Ltd. 65,250,000.00 85,000,000.00 - 150,250,000.00 - -
Hangzhou Hikmed Technology Co., Ltd. 48,769,806.64 2,178,627.18 - 50,948,433.82 - -
Guizhou Haikang Transportation Big Data Co., Ltd. 16,500,000.00 5,500,000.00 - 22,000,000.00 - -
Xinjiang CET Yihai Information Technology Co., Ltd. 24,000,000.00 - - 24,000,000.00 - -
Nanjing Hikvision Digital Technology Co., Ltd. 35,000,000.00 45,000,000.00 - 80,000,000.00 - -
Hangzhou Kuangxin Technology Co., Ltd. 112,000,000.00 - - 112,000,000.00 - -
Zhengzhou Hikvision Digital Technology Co., Ltd. 55,000,000.00 10,000,000.00 - 65,000,000.00 - -
Nanchang Hikvision Digital Technology Co., Ltd. 20,000,000.00 60,000,000.00 - 80,000,000.00 - -
Hikvision Digital Technology (Shanghai) Co., Ltd. 80,000,000.00 - - 80,000,000.00 - -
Hefei Hikvision Digital Technology Co., Ltd. 35,000,000.00 - - 35,000,000.00 - -
Tianjin Hikvision Information Technology Co., Ltd. 50,000,000.00 348,846.40 - 50,348,846.40 - -
Ningbo Hikvision Parking System Operation Co., Ltd. 35,000,000.00 - - 35,000,000.00 - -
Hikvision Peru Closed Stock Company 1,598,042.50 - - 1,598,042.50 - -
Hangzhou HikStorage Technology Co., Ltd. 173,892.83 2,669,982.96 - 2,843,875.79 - -
Shijiazhuang Hikvision Technology Co., Ltd. - 45,000,000.00 - 45,000,000.00 - -
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Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Write-off of Blance of
Increase during Decrease during impairment impairment loss
Opening Closing
Name of investee the current the current provision during the provision at the end
balance balance
reporting period reporting period current reporting of the current
period reporting period
Zhejiang Haikang Fire Protection and Control Co., Ltd. - 84,004.82 - 84,004.82 - -
Hikvision Argentina S.R.L - 1,793,559.15 - 1,793,559.15 - -
Fuzhou Hikvision Digital Technology Co., Ltd. - 50,814,676.49 - 50,814,676.49 - -
Hangzhou Hikfire Technology Co., Ltd. - 61,871,362.21 - 61,871,362.21 - -
Hangzhou Rayin Technology Co., Ltd. - 60,702,536.80 - 60,702,536.80 - -
Hangzhou Microimage Software Co., Ltd. - 2,090,633.38 - 2,090,633.38 - -
Kunming Hikvision Digital Technology Co., Ltd. - 126,666.06 - 126,666.06 - -
Total 4,878,400,682.40 1,034,530,525.61 100,000.00 5,912,831,208.01 - -
344
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
3.2 Inestments in associated enterprises and joint ventures
Unit：RMB
Increase/Decrease during the current reporting period Blance of
impairment
loss
Investment income provision
Declared cash Provision Closing
Name of investee Opening balance Additional Reduce (losses) recognized Other comprehensive at the end
dividends or for Others Balance
Investments Investments under the equity income adjustment of the
profits impairment
method current
reporting
period
1.Joint Ventures
Hangzhou Haikang
50,000,000.00 550,000,000.00 - 12,479,371.62 - - - - 612,479,371.62 -
Intelligent Fund
Daishan Hailai 13,320,000.00 - - 1,933,091.76 - - - - 15,253,091.76 -
Haishi Huayue - 10,200,000.00 - (214,422.68) - - - - 9,985,577.32 -
Xuzhou Kangbo - 4,900,000.00 - (268,713.42) - - - - 4,631,286.58 -
Shenzhen City Service - 8,000,000.00 - (1,970,430.31) - - - - 6,029,569.69 -
Yunnan Yinghai - 4,900,000.00 - (58,939.24) - - - - 4,841,060.76 -
Zhejiang City Digital
- 11,500,000.00 - 364,018.37 - - - - 11,864,018.37 -
Technology
Guangxi Haishi - 6,000,000.00 - (703,304.64) - - - - 5,296,695.36 -
Total 63,320,000.00 595,500,000.00 - 11,560,671.46 - - - - 670,380,671.46 -
345
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Increase/Decrease during the current reporting period Blance of
impairment
loss
Investment income provision
Declared cash Provision Closing
Name of investee Opening balance Additional Reduce (losses) recognized Other comprehensive at the end
dividends or for Others Balance
Investments Investments under the equity income adjustment of the
profits impairment
method current
reporting
period
2.Associated Enterprises
Wuhu Sensor Tech 48,420,966.46 - - 10,070,297.96 - - - - 58,491,264.42 -
Maxio Technology 65,397,927.02 - - (10,776,124.48) - - - - 54,621,802.54 -
Zhiguang Hailian 8,684,859.27 10,000,000.00 - 2,568,199.60 - - - - 21,253,058.87 -
Qingtang Big Data 9,793,595.29 - - 1,853.38 - - - - 9,795,448.67 -
Subtotal 132,297,348.04 10,000,000.00 - 1,864,226.46 - - - - 144,161,574.50 -
Total 195,617,348.04 605,500,000.00 - 13,424,897.92 - - - - 814,542,245.96 -
3.3 As of December 31st 2020, there were no restrictions on the capability of transferring fund to the Company from investees in which the Company held long-term
equity investment.
346
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
4. Operating income and operating cost
Unit：RMB
2020 2019
Item
Income Cost Income Cost
Operating income 24,051,359,607.67 7,010,347,837.77 22,818,988,903.46 7,351,332,707.12
Other operating
2,260,627,739.73 167,059,377.68 2,893,477,698.34 377,154,148.55
income
Total 26,311,987,347.40 7,177,407,215.45 25,712,466,601.80 7,728,486,855.67
5. Investment income
5.1 Details of investment income
Unit：RMB
Item 2020 2019
Long-term equity investment income (losses) calculated by cost
method
80,360,404.14 1,400,000.00
Long-term equity investment losses measured by equity method 13,424,897.92 5,089,008.14
Investment income (loss) from disposal of asset group (2,215.23) 11,161.99
Investment income of other non-current financial assets during
the holding period
150,000,000.00 17,357,220.31
Investment income from disposal of held-for-trading financial
assets
3,552,279.56 1,168,699.00
Proceeds from the disposal of asset groups 848,151,116.16 -
Total 1,095,486,482.55 25,026,089.44
6. Related party transactions
6.1 Sales and purchase of goods, provision of services and receiving services
Purchase of goods/receiving of services:
Unit：RMB
Related party Transaction type 2020 2019
Purchase of materials and
Subsidiaries of Hikvision (Note) 7,995,299,074.64 5,671,591,849.30
receiving of services
Purchase of materials and
Subsidiaries of CETE 11,773,724.55 39,607,756.46
receiving of services
Maxio Technology and its Purchase of materials and
7,875,600.00 4,192,107.01
subsidiaries receiving of services
Wuhu Sensor Tech and its Purchase of materials and
1,000.00 -
subsidiaries receiving of services
Purchase of materials and
Shanghai Fullhan Micro - 36,590,000.00
receiving of services
Total 8,014,949,399.19 5,751,981,712.77
Note: Subsidiaries of Hikvision are subsidiaries of the Company. See Note (VII) for details.
347
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Sales of goods/rendering of services:
Unit：RMB
Related party Transaction type 2020 2019
Sales of products and
Subsidiaries of Hikvision 18,507,772,746.27 17,597,924,722.59
rendering of services
Sales of products and
Subsidiaries of CETE 71,968,472.76 251,053,117.23
rendering of services
Sales of products and
Xiaoyun Vision Technology 2,629,911.49 7,709,012.16
rendering of services
Zhiguang Hailian and its Sales of products and
2,191,071.97 4,099,860.19
subsidiaries rendering of services
Guangxi Haishi and its Sales of products and
1,769,911.50 -
subsidiaries rendering of services
Sales of products and
Haishi Huayue 263,634.07 -
rendering of services
Shenzhen City Service and its Sales of products and
13,868.14 -
subsidiaries rendering of services
Sales of products and
Qingtang Big Data 7,092.92 -
rendering of services
Wuhu Sensor Tech Service and its Sales of products and
1,150.44 74,446.30
subsidiaries rendering of services
Total 18,586,617,859.56 17,860,861,158.47
Statement of capital deposits:
Unit: RMB
Opening Balance at
Amount occurred Closing balance at Amount occurred
Content of related the beginning of the
Related Party during the current the end of the current during the prior
party transaction current reporting
reporting period reporting period reporting period
period
Subsidiaries of CETE Deposit into fixed
- 4,000,000,000.00 - 4,000,000,000.00
(Note) deposits
Total - 4,000,000,000.00 - 4,000,000,000.00
Note: The Company had deposited fixed deposits and call deposits into China Electronic Science and Technology
Finance Ltd.
Those transactions above were executed at market prices or at the prices agreed by both parties.
348
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
6.2 Guarantees with related parties
In the current reporting period, the Company has provided guarantees for its 28 wholly-owned and majority-owned
subsidiaries in an amount not exceeding an equivalent of RMB 32.80 billion (2019：RMB 25.55 billion), including
the joint liability guarantee for the payment obligations on purchase from suppliers in an amount not exceeding an
equivalent of RMB 3.125 billion (2019: RMB 3.125 billion), and the joint liability guarantee for the general credit
limit applied from commercial banks and other financial institutions or other financing methods through agreed
methods in an amount not exceeding an equivalent of RMB 29.67 billion (2019: RMB 22.42 billion).
For details of the Company's guarantees on Safety Chongqing project, please refer to Note X (5).
6.3 Funding from related parties
Amount of financial funds: The Company proposes to provide amounts of no more than RMB 300.00 million, RMB
50.00 million, RMB 100.00 million, RMB 500.00 million and RMB 1,000.00 million to five innovative business
holding subsidiaries, namely Hangzhou HikAuto Technology Co., Ltd., Hangzhou HikStorage, Hangzhou Hikfire,
Hangzhou Hikmicro and Hangzhou HikRobotic Technology, respectively. The actual amount of funds will be
provided based on the actual business needs of each innovative business holding subsidiary. The period of financial
funds will take effect during 3 years after the date of approval by the general meeting of the Company, during which
the limit (balance) can be utilized in circulation by batches.
6.4 Transfer of the asset groups of the related parties
The Company had integrated the thermal imaging business and intelligent fire protection and control business, and
transferred the asset groups of the thermal imaging business department and the asset groups of the intelligent fire
protection and control business to the Company’s holding subsidiaries, Hangzhou Hikmicro and Hangzhou Hikfire,
at the consideration of RMB 801,140,000.00 and RMB 49,770,000.00, respectively. The Company transferred 100%
equity of Wuhan Fire Protection and Control and Zhejiang Fire Protection and Control to Hangzhou Hikfire at the
consideration of RMB 0.00, upon the completion of which the shareholding ratios of those two companies were
changed from direct holding of 100% to indirect holding of 60%, respectively. For details, please refer to Note (VII)
2.
7. Receivables from related parties and payables to related parties
7.1 Receivables from related parties
Unit：RMB
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Subsidiaries of Hikvision 20,623,636,081.76 - 20,936,806,929.47 -
receivable
Accounts
Subsidiaries of CETE 224,340,023.89 28,804,106.29 250,291,208.65 10,516,129.42
receivable
Accounts Xiaoyun Vision
9,522,614.22 349,200.54 6,550,814.22 363,570.19
receivable Technology
Accounts Zhiguang Hailian and its 7,074.00 83.47 4,270,910.00 47,006.81
349
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
receivable subsidiaries
Accounts Wuhu Sensor-Tech and
1,300.00 58.76 - -
receivable its subsidiaries
Total 20,857,507,093.87 29,153,449.06 21,197,919,862.34 10,926,706.42
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes -
Subsidiaries of CETE 15,740,985.15 - -
receivable
Total 15,740,985.15 - - -
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Other
Subsidiaries of Hikvision 454,474,087.76 - 678,798,902.79 -
receivables
Other
Haishi Huayue 279,452.11 3,297.53 - -
receivables
Other
Subsidiaries of CETE 145,000.00 1,711.00 - -
receivables
Total 454,898,539.87 5,008.53 678,798,902.79 -
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Prepayments Subsidiaries of Hikvision 3,646,828.69 - 64,380,038.22 -
Prepayments Subsidiaries of CETE - - 144,569.90 -
Total 3,646,828.69 - 64,524,608.12 -
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Long-term
receivables
Subsidiaries of CETE 53,512,305.64 1,446,519.44 - -
(including
those due
350
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
within one
year)
Total 53,512,305.64 1,446,519.44 - -
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Dividends -
Subsidiaries of Hikvision 22,910,404.14 2,550,000.00 -
receivable
Total 22,910,404.14 - 2,550,000.00 -
7.2 payables to related parties
Unit：RMB
Item Related party Closing balance Opening balance
Accounts payable Subsidiaries of Hikvision 329,639,516.11 877,307,780.01
Accounts payable Subsidiaries of CETE 3,010,132.22 1,653.61
Maxio Technology and its
Accounts payable - 8,560,000.00
subsidiaries
Total 332,649,648.33 885,869,433.62
Item Related party Closing balance Opening balance
Contract liabilities Subsidiaries of Hikvision 5,755.28 7,682,167.48
Contract liabilities Subsidiaries of CETE 382,332.53 109,309.12
Contract liabilities Daishan Hailai 688.00 -
Total 388,775.81 7,791,476.60
Item Related party Closing balance Opening balance
Other payables Subsidiaries of Hikvision 289,914,770.68 219,301,627.42
Other payables Subsidiaries of CETE 337,710.00 150,000.00
Other payables Shanghai Fullhan Micro 100,000.00 100,000.00
Wuhu Sensor-Tech and its
Other payables 1,200.00 1,200.00
subsidiaries
Total 290,353,680.68 219,552,827.42
8. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
351
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit：RMB
Supplementary information 2020 2019
1. Reconciliation of net profit to cash flows from operating
activities:
Net profit 12,671,388,440.50 11,682,416,010.01
Add: Assets impairment provision (2,397,952.77) (51,593,292.77)
Credit loss provision 35,765,705.73 (656,135,180.29)
Depreciation of fixed assets 256,698,165.42 245,879,493.31
Amortization of intangible assets 51,580,512.51 82,358,499.02
Amortization of long-term deferred expenses 21,910,527.64 9,252,020.83
Gains on disposal of fixed assets, intangible assets and other
long-term assets
(16,966.03) (4,072,096.18)
Financial expenses 270,249,113.29 183,074,224.09
Gains from change in fair value (69,478,784.83) (17,547,234.44)
Investment income (1,095,486,482.55) (25,026,089.44)
Share-based payment through equity settlement 523,901,019.53 193,304,834.81
Increase in restricted funds (16,350,637.05) (2,035,173.70)
Decrease in deferred income tax assets 16,291,195.35 95,421,754.68
Decrease (increase) of inventories (30,574,481.99) 49,235,200.73
Decrease (Increase) in operating receivables 941,257,584.66 (9,018,892,651.51)
Increase in operating payables 974,737,516.48 5,315,195.54
Decrease in deferred income (39,562,793.01) (24,728,979.56)
Net cash flow from operating activities 14,509,911,682.88 2,746,226,535.13
2. Major investing and financing activities not involving cash
receipt and payment:
3. Net change in cash and cash equivalents:
Closing balance of cash 23,264,693,578.70 16,656,028,410.72
Less: Opening balance of cash 16,656,028,410.72 18,998,934,287.59
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase (decrease) in cash and cash equivalents 6,608,665,167.98 (2,342,905,876.87)
(2) Composition of cash and cash equivalents
Unit：RMB
Item Closing balance Opening balance
I. Cash 23,264,693,578.70 16,656,028,410.72
Including: Cash on hand 264,936.39 181,655.02
352
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Bank deposit for payment at any time 23,264,326,122.65 16,654,913,925.73
Other monetary funds for payment at any
102,519.66 932,829.97
time
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 23,264,693,578.70 16,656,028,410.72
On December 31st 2020, the Company’s closing balance of other monetary funds was RMB 212,015,271.04
(December 31st 2019: RMB 196,494,944.30), of which RMB 211,912,751.38 were all various guarantee deposits
(December 31st 2019: RMB 195,562,114.33), not cash or cash equivalents.
XVI. Supplementary information
1. Details of current non-recurring gains and losses
Unit：RMB
Description
Item Amount
Profit or loss from disposal of non-current assets (5,836,675.36) /
The government subsidies included in the current profits and
losses (excluding the government subsidy closely related to
regular course of business of the Company and government 571,403,657.30 /
subsidy based on standard quota or quantitative continuous
enjoyment according to the state industrial policy)
The gains generated when the investment cost of acquiring a
subsidiary, an associate or joint venture is less than the income
281,193.50 /
derived from the fair value of the identifiable net assets of the
investee
In addition to the Company's normal business related to the
effective hedging business, gains and losses on changes in fair
value arising from holding derivative financial assets, derivative
98,373,869.75 /
financial liabilities, other non-current financial assets, and
investment gains from the disposal of the above-mentioned
financial assets/financial liabilities and receivables financing
Other non-operating income and expense except the items
74,007,631.14 /
mentioned above
Impact of income tax (109,931,807.07) /
The impact of minority equity (48,610,431.55) /
Total 579,687,437.71 /
2. Return on net assets and earnings per share
The return on net assets and earnings per share have been prepared by Hangzhou Hikvision Digital Technology Co.,
Ltd. in accordance with the Information Disclosure and Presentation Rules for Companies Making Public Offering
of Securities No. 9 – Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised in 2010)
issued by China Securities Regulatory Commission.
353
Hikvision 2020 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020
Unit：RMB
Weighted Earnings per share
Profit for the reporting period average return on
Basic earnings per Diluted earnings per
net assets (%)
share share
Net profit attributable to ordinary shareholders of the
27.72% 1.445 1.444
Company
Net profit excluding non-recurring items of profit or loss
26.52% 1.382 1.381
attributable to ordinary shareholders of the Company
354
Hikvision 2020 Annual Report
Section XIII Documents Available for Reference
1. The financial report was signed and sealed by the person in charge of the Company, the person in
charge of accounting work and person in charge of accounting organization (Accounting Supervisor);
2. The original audit report containing the seal of the accounting firm and the signature and seal of
the certified public accountant;
3. Original versions and copies of all the Company's documents and announcements that were
publicly disclosed on the website designated by CSRC during the reporting period.
The above documents are completely placed at the Company's board of directors’ office.
Hangzhou Hikvision Digital Technology Co., Ltd.
Chairman: Chen Zongnian
April 17th 2021
Note:
This document is a translated version of the Chinese version 2020 Annual Report (“2020 年年度报
告”), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2020 Annual Report may be obtained at www.cninfo.com.cn.
355
