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公司公告

海康威视:2020年年度报告(英文版)2021-04-24  

                        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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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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                        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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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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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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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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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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                                  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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                                                  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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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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                                                                                                                                 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

                                                                                                                                                                                                      108
                                                                                                                                                                  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




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                                                                          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

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                                                                                                                                                                       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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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,
                                                                                                                                                                              121
                                                                                                                                  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
                                                                                                                                                              122
                                                                                                                                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

                                                                                                                                                            123
                                                                                                                                                       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
                                                                                                                                                                                   124
                                                                                                                                                          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

                                                                                                                                                                                     125
                                                                                                                                                          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




                                                                                                                                                                                         126
                                                                                     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.




                                                                                                                  127
                                                                                            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

                                                                                                                             128
                                                                                    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,


                                                                                                                 129
                                                                                     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.




                                                                                                                  130
                                                                                                                                                                  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




                                                                                                                                                                                                   132
                                                                                                                                                                    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

                                                                                                                                                                                                      133
                                                                                                                                                                  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




                                                                                                                                                                                                    134
                                                                                                                                                                         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


                                                                                                                                                                                                          135
                                                                                                                                                             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)




                                                                                                                                                                                               136
                                                                                   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



                                                                                                                137
                                                                                           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

                                                                                                                                                                                  140
                                                                                                                                                    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
                                                                                                                                                                                  141
                                                                                                                                                          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.




                                                                                                                                                                                             143
                                                                                   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


                                                                                                                    145
                                                                                     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%




                                                                                                                                                                                 147
                                                                                                                                     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.
                                                                                                                                                                  148
                                                                                                                                        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

                                                                                                                                                                                             150
                                                                                                                                                   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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                                                                                                                                                                Hikvision 2020 Annual Report
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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                                                                                                                                                          Hikvision 2020 Annual Report
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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                                                                                               Hikvision 2020 Annual Report

  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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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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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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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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     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
                                                                                                                                                                   170
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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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                                                                                                                                   Hikvision 2020 Annual Report
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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                                                                                                   Hikvision 2020 Annual Report

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



                                                                                                                        174
                                                                                          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


                                                                                                                            175
                                                                                        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.

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


                                                                                                                          176
                                                                                         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



                                                                                                                           177
                                                                                            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

                     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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                                                                                                    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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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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    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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                               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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     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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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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                                                                                   Hikvision 2020 Annual Report

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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                                                                                                   Hikvision 2020 Annual Report

         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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                                                                                           Hikvision 2020 Annual Report
 (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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                                                                                              Hikvision 2020 Annual Report
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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                                                                                        Hikvision 2020 Annual Report
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

                                                                                                                           199
                                                                                      Hikvision 2020 Annual Report
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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                                                                                        Hikvision 2020 Annual Report
     (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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                                                                             Hikvision 2020 Annual Report
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




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                                                                                 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




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                                                                                   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

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                                                                              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



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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




                                                                                                                                                                                             214
                                                                                             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
                                                                                                                            216
                                                                                             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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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.




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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



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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.




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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.


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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
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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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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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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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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020

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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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020

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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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020




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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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020




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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Notes to Financial Statements
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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Notes to Financial Statements
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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Notes to Financial Statements
For the reporting period from January 1st 2020 to December 31st 2020

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.



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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

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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).




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                                                                                             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:

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                                                                                             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.




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                                                                                                    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
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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.




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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.




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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.




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                                                                                                                                                          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
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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
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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
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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
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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
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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
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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
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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
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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)


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                                                                                                                 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

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                                                                                                        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
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                                                                                            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
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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
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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
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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
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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                           -                          -


                                                                                                                                                                                                      343
                                                                                                                                                                  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.




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                                                                                             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




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                                                                       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.


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