Hangzhou Hikvision Digital Technology Co., Ltd.
2021 Annual Report
April 16th 2022
Hikvision 2021 Annual Report
To Shareholders
The year 2021 marks the 20th anniversary of Hikvision’s establishment and the 12th anniversary
of its listing. Through 20 years of efforts, the Company has accumulated a wealth of successful
experience in a number of technological segments, and is now positioning its field of business as the
Artificial Intelligence of Things (AIoT). We believe that the company will continue to grow rapidly
in the next 10 years with the development of AIoT.
Over the past few years, the company has been bearing pressures from reverse globalization
and has been making great efforts to offset some of the negative effects, in order to enable its
products to serve more customers in the global market. At present, the company has established 66
sales branches and service offices, as well as 3 manufacturing plants and 11 logistics centers in the
overseas market, operating business in 155 countries and regions where we have sales and service
partners. Dedicated to build ourselves into a global company, Hikvision will continue progressing
persistently despite all the difficulties we may encounter. We believe that global economic
integration is the best option for all people in the world.
Technological innovation is the driving force behind Hikvision’s development, and only through
continuous technological innovation can we realize sustainable development. Thanks to the consistent
pursuit of technological innovation, Hikvision has achieved impressive results in the past 20 years.
The company went public and raised RMB 3.4 billion in May 2010. In the past 12 years since, it has
invested a total of RMB 35.4 billion in research and development, accumulated RMB 89.1 billion in
net profits attributable to shareholders, and (will have) paid an accumulated dividend of RMB 43.2
billion to shareholders. From 2017 to 2021, Hikvision’s R&D investment accounted for 7.62%,
8.99%, 9.51%, 10.04% and 10.13% out of the total revenue respectively, with the proportion
increasing year by year. In the next 10 years, the company will continue to increase its R&D
investment. We believe that technological innovation is the only way to better create value for our
customers and reward our shareholders.
Since 2015, Hikvision has been encouraging internal innovation and intrapreneurship
through establishing a co-investment scheme, establishing eight innovative businesses over the
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Hikvision 2021 Annual Report
years. In 2021, there were five innovative businesses with revenue exceeding RMB one billion,
realizing a positive net profit. Among them, EZVIZ Network has submitted the IPO application, and
the suggestive announcement on the spin-off of HikRobot for an independent listing has also been
disclosed with relevant preparatory work currently underway. We believe that only when we share
the profits with our employees can we unite the whole team working towards the same direction,
and only by motivating the vitality of employees’ innovation and entrepreneurship can the company
continue to thrive.
Hikvision has built up a strong customer base and technology accumulation in the field of AIoT.
As an effort to better create value for customers and enhance customer satisfaction, we are constantly
striving to improve the company’s operational capabilities and efficiency, while persevering in
technological innovation. With the improvement of our operational capabilities and efficiency as a
long-term goal, we will keep up with the changing times and continue to build, optimize and refine
our systems. We believe that there are no gains without pains.
In the future, we will pace ourselves to encounter the challenges ahead and accept them as part
of the evolution of the company. Being open, transparent, and honest as always, we will make best
efforts to resolve uncertainties brought by these challenges. We believe that adversity will make us
stronger.
Finally, we’d like to extend our sincere thanks to all shareholders for your trust and support to
the Company's management team! And express our special thanks to the public shareholders for their
trust and support for the management team over the past 12 years!
See far, go further!
Board of Directors of Hangzhou Hikvision Digital Technology Co., Ltd.
April, 2022
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Hikvision 2021 Annual Report
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior management
guarantee that the information presented in this report is true, accurate and complete without 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 true,
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: Board of Directors based on the Company’s current total share capital of
9,433,208,719 shares, the Company proposed to distribute cash dividend of RMB 9 (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 2021 Annual Report (“2021 年年度报
告”), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2021 Annual Report may be obtained at www.cninfo.com.cn.
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Hikvision 2021 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 is difficult to subside, and
epidemic prevention has a direct impact on the economic development. The Company will pay close
attention to the changes in the epidemic and respond in a timely manner. If the epidemic causes the
domestic and foreign economic or business environment to deteriorate, the adverse impact on the
Company's business will increase accordingly.
2) Economic downside risk: The current domestic and foreign economic environment is complex and
volatile. The domestic macroeconomic growth has entered a new stage of medium-low growth. If demand
recovers slowly and investment growth is sluggish, it will bring adverse impacts on the Company's
business development.
3) Geopolitical environment risk: The current global geopolitical uncertainty has greatly increased, and
the economic and social impact caused by local wars and confrontations is huge. The Company's
operations in the countries and regions where the conflict is located may be adversely affected.
4) Global business risks: The Company operates in more than 150 countries and regions around the world.
The potential risks such as the trend of deglobalization, economic fluctuation and debt default around the
world are difficult to eliminate, so the Company’s overseas business operations may be adversely affected.
5) Supply chain risks: The global supply system is suffering from a variety of adverse impacts, such as
rising commodity prices, restrictions on global production and logistic, and technological competition
among major powers. The Company has been making efforts to enhance management for our supply chain
and optimize inventory adjustment and control. However, if systemic risks arise in the global supply chain,
the Company’s operating capabilities may be 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 capabilities cannot keep up with the situation, it will
bring 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
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Hikvision 2021 Annual Report
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 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.
9) Financial risk caused by the decline of customers’ ability to pay: The enterprises’ financial liquidity
is negatively impacted by the macroeconomic downturn. The Company has accumulated a certain amount
of cash reserves due to the stable operation in history, and the financing cost is low. If the liquidity risk
increases, it will adversely affect the Company’s account receivables.
10) Risk of internal management: The continual expansion of business scale, the continuous increase of
new products and new businesses, and the continuous growth in total number of employees lead to a
significant rise of internal management complexity, which brings challenges to the Company’s
management and higher requirements on the Company management system. The Company’s sustainable
development will face certain risks if the management level fails to proportionally address the Company’s
business expansion.
11) 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.
12) 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 2021 Annual Report
CONTENTS
To Shareholders .................................................................................................................................................. 1
Section I Important Notes, Contents and Definitions ...................................................................................... 3
Section II Corporate Profile & Key Financial Data......................................................................................... 9
Section III Management Discussion and Analysis ......................................................................................... 15
Section IV Corporate Governance ................................................................................................................ 139
Section V Environmental and Social Responsibility .................................................................................... 182
Section VI Significant Events ......................................................................................................................... 183
Section VII Changes in Shares and Information about Shareholders ....................................................... 210
Section VIII Information of Preferred Shares ............................................................................................. 224
Section IX Bonds ............................................................................................................................................. 225
Section X Financial Report ............................................................................................................................ 226
Section XI Documents Available for Reference ........................................................................................... 402
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Hikvision 2021 Annual Report
Definitions
Term Definition
Reporting Period From January 1st 2021 to December 31st 2021
Articles of Associations Articles of Associations for Hangzhou Hikvision Digital Technology Co., Ltd
Hikvision, the Company, our
Hangzhou Hikvision Digital Technology Co., Ltd.
Company
CETC China Electronics Technology Group Ltd., the actual controller of the Company
CETHIK CETHIK Group Co., Ltd. Controlling Shareholder of the Company
EZVIZ, EZVIZ Network Hangzhou EZVIZ Network Co., Ltd.(According to the context, also refers to the
corresponding business)
HikRobot, Robotic business Hangzhou Hikrobot Technology Co., Ltd. (According to the context, also refers to
the corresponding business)
HikAuto, Auto electronics Hangzhou Hikauto Technology Co., Ltd. (According to the context, also refers to
business the corresponding business)
HikMicro, Micro Sensing, Hangzhou Hikmicro Sensing Technology Co., Ltd. (According to the context, also
Thermal imaging business refers to the corresponding business)
HikSemi, HikStorage, Wuhan Hikstorage Technology Co., Ltd. (According to the context, also refers to
Storage business the corresponding business)
HikImaging Hangzhou Hikimaging 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 to the
Rayin, HikSecurityCheck
corresponding business)
Hangzhou Innovation Located in Hangzhou, Binjiang District, Zhejiang Province, the planned use is for
Industry Park R&D, office space and supporting facilities.
Chengdu Science and Located in Chengdu, Sichuan Province, the planned use is for R&D, office space
Technology Park and supporting facilities.
Chongqing Science and Located in Chongqing, the planned use is for production plants, warehouses and
Technology Park supporting facilities.
Xi’an Science and Located in Xi'an, Shaanxi Province, the planned use is for R&D, office space and
Technology Park supporting facilities.
Shijiazhuang Science and Located in Shijiazhuang City, Hebei Province, the planned use is R&D, office
Technology Park space and supporting facilities.
Security Industrial Base Located in Hangzhou, Zhejiang Province, the planned use is for production plants,
(Tonglu) logistics warehousing center and supporting facilities.
Wuhan Intelligence Industry Located in Wuhan, Hubei Province, the planned use is for production plants,
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Hikvision 2021 Annual Report
Term Definition
Park warehouses and supporting facilities.
Zhengzhou Science and Located in Zhengzhou, Henan Province, the planned use is R&D, office space and
Technology Park supporting facilities, etc.
EZVIZ Smart Home Products’ Industrial Base, located in Hangzhou, Zhejiang
EZVIZ Industrial Base 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 Investment in
Innovative Business 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, HikSemi, HikImaging, HikFire, Rayin and their related business or
products.
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Hikvision 2021 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
The Company was listed on the Shenzhen Stock Exchange on May 28th 2010. The
original registered address was No. 36 MachengRoad, Xihu District, Hangzhou,
Changes in the Company's registered address
Zhejiang Province. In 2016, the Company's registered address was changed to No.
555 Qianmo Road, Binjiang District, Hangzhou, Zhejiang Province.
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
Media designated by the Company for information disclosure Securities Times, China 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 2021 Annual Report
IV. Company Registration and Alteration
Organization code 91330000733796106P
During the reporting period, the Company added the following to the business
scope: manufacturing of special labour protective supplies; sales of special
labour protective supplies; sales of digital cultural and creative technological
equipment; parking lot services; digital cultural and creative content application
services; environmental protection monitoring; production of Class II and Class
III radiation devices; sales of Class II and Class III radiation devices;
radioisotope production (except for short-half-life radioactive pharmaceuticals
for medical use); sales of Class II, Class III, Class IV and Class V radioactive
sources; goods import and export and technology import and export. At the
same time, the Company adjusted the description of its business scope in
accordance with the latest regulatory requirements of the industry and
commerce authorities for business scope. After the change, the Company’s
business scope covers: licensed items: production of Class II and Class III
radiation devices; sales of Class II and Class III radiation devices; radioisotope
production (except for short-half-life radioactive pharmaceuticals for medical
use); sales of Class II, Class III, Class IV and Class V radioactive sources; all
kinds of engineering and construction activities; goods import and export and
technology import and export (as for the items which by law are subject to
approval, business activities can be carried out only after having been approved
by the relevant departments, and the specific operation items are subject to the
Changes in principle business activities since the
terms of the approval). General items: manufacturing of digital video
Company was listed (if any)
surveillance systems; sales of digital video surveillance systems; manufacturing
of security equipment; sales of security equipment; manufacturing of IoT
equipment; sales of IoT equipment; manufacturing of intelligent unmanned
aerial drones; sales of intelligent unmanned aerial drones; manufacturing of
service consumption robots; manufacturing of industrial robots; manufacturing
of robots for special operations; sales of intelligent robots; manufacturing of
computer software and hardware and peripherals; wholesale of computer
software and hardware and auxiliary equipment; manufacturing of
communication equipment; sales of communication equipment; manufacturing
of network equipment; sales of network equipment; manufacturing of display
devices; sales of display devices; manufacturing of intelligent mobile
equipment; sales of intelligent mobile equipment; manufacturing of auto parts
and accessories; wholesale of auto parts and accessories; manufacturing of
electric signal appliances and devices; sales of electric signal appliances and
devices; manufacturing of mechanical and electrical equipment; sales of
mechanical and electrical equipment; manufacturing of special labour
protective supplies; sales of special labour protective supplies; sales of
electronic products; sales of digital cultural and creative technological
equipment; technical services, technical development, technical consultation,
technical knowledge exchange, technology transfer and technology promotion;
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Hikvision 2021 Annual Report
software development; information system integration services; computer
system services; research and development of IoT technologies; IoT technology
services; IoT application services; big data services; data processing and storage
support services; security system monitoring services; security technology
defense system’s design and construction services; electronic and mechanical
equipment maintenance (excluding special equipment); parking lot services;
digital cultural and creative content application services; environmental
protection monitoring; for-profit private training institution engaged in science
and technology training (excluding subjects and language cultural education
and training for primary and secondary school students). (Except for items
which by law are subject to approval, the Company can determine and carry out
operational activities in accordance with the law by virtue of its business
license).
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, Gao Sunchao
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
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
2021 2020 2019
(%)
Operating income (RMB) 81,420,053,539.27 63,503,450,891.78 28.21% 57,658,110,065.22
Net profit attributable to shareholders of the Company 16,800,411,032.05 13,385,526,714.15 25.51% 12,414,587,690.45
(RMB)
Net profit attributable to shareholders of the Company
16,444,723,630.97 12,805,839,276.44 28.42% 12,037,518,321.42
excluding non-recurring gains and losses (RMB)
Net cash flows from operating activities (RMB) 12,708,524,686.99 16,088,156,566.67 -21.01% 7,767,720,171.14
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Hikvision 2021 Annual Report
Basic earnings per share (RMB/share) 1.810 1.445 25.26% 1.343
Diluted earnings per share (RMB/share) 1.806 1.444 25.07% 1.343
Weighted average ROE 28.99% 27.72% 1.27% 30.53%
At December 31st At December 31st YoY Change At December 31st
2021 2020 (%) 2019
Total assets (RMB) 103,864,543,195.18 88,701,682,384.20 17.09% 75,358,000,240.29
Net assets attributable to shareholders of the Company
63,460,886,665.26 53,794,311,162.05 17.97% 44,904,033,876.83
(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
9,433,208,719
(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 1.781
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
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
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Hikvision 2021 Annual Report
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating income 13,988,385,531.58 19,913,712,836.52 21,727,169,122.78 25,790,786,048.39
Net profit attributable to shareholders of the
2,169,440,312.25 4,311,984,341.14 4,484,216,504.72 5,834,769,873.94
Company
Net profit attributable to shareholders of the
Company excluding non-recurring gains 2,022,056,316.46 4,199,420,311.52 4,472,421,937.46 5,750,825,065.53
and losses
Net cash flows from operating activities -2,018,107,114.23 3,980,960,886.38 1,969,077,130.08 8,776,593,784.76
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
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Inapplicable
Unit：RMB
Item 2021 2020 2019
Profits or losses from disposal of non-current assets (including the
26,069,469.18 -5,836,675.36 -2,053,875.22
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 subsidy based 576,619,421.07 571,403,657.30 413,790,429.84
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 generated by
1,163,932.96 281,193.50 -
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 enterprises under - - -885,138.65
common control
Profits and losses attributed to change in fair value for held-for-
trading financial assets and held-for-trading financial liabilities;
and investment income from disposal of held-for-trading financial
75,408,081.63 98,373,869.75 26,872,639.66
assets, held-for-trading financial liabilities, and other available-
for-sale financial assets, excluding the effective hedging business
related to the regular business operation of the Company.
Investment losses on disposal of subsidiaries and other business
-169,184,641.43 - -
units
Other non-operating income and expenditures except the items
-1,471,007.77 74,007,631.14 52,155,026.79
mentioned above
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Hikvision 2021 Annual Report
Less: Impact of income tax 29,930,824.64 109,931,807.07 86,193,406.35
Impact of the minority interests (after tax) 122,987,029.92 48,610,431.55 26,616,307.04
Total 355,687,401.08 579,687,437.71 377,069,369.03
Details of other gain/loss items that meet the definition of non-recurring gains and losses:
□ Applicable √ Inapplicable
The Company did not have other gain/ loss items that meet the definition of non-recurring gains and losses.
Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the as a recurrent gain/loss item
□ Applicable √ Inapplicable
The Company did not classify an item as a non-recurring gain/loss according to the into a recurrent gain/loss item.
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Hikvision 2021 Annual Report
Section III Management Discussion and Analysis
I. The Industry Situation and Main Business of the Company during the Reporting Period
1. Business Overview
After more than 20 years of development, the Internet of Things (IoT 1 ) is integrated with AI (Artificial
Intelligence) to form the AIoT. When devices are able to perceive changes, connect with each other, and interact
with people and things, they could bring about changes like never before. And those changes are happening right
now.
AIoT is a fundamental capability that provides the possibility of connection and interaction between people
and things as well as between things. This possibility is not exclusive to any industry, but there are pioneer, typical
industrial scenarios in AIoT, such as intelligent security, industrial IoT, smart home, etc. We believe that AIoT will
set off a wave of technological innovation that will sweep across many industries. And armed with technology
accumulations in multiple fields and years of deep engagement in the industrial market, we are confident that
Hikvision will be able to seize the opportunities brought by the rapid development of AIoT. Through constant
expansion and iteration of the industrial AIoT application, Hikvision continues to improve the business organization
for public services, enterprises, and SMEs, and has successively developed innovative businesses such as EZVIZ
Network, HikRobot, HikMicro, HikAuto, HikSemi, HikFire, Rayin and HikImaging, with a focus on the
implementation of businesses for large-scale scenarios.
Generally speaking, the Internet of Things is divided into three layers, namely the perception layer, the network
transmission layer and the application layer. Starting with video technology and driven by technological innovation,
Hikvision continues to expand and deploy in such fields as visible light, millimeter wave, infrared rays and X-rays
etc., while integrating sound, temperature, humidity, pressure, magnetic and other perception means to create a
comprehensive, multi-dimensional perception technology platform to provide technical support for AIoT on the
perception layer. The Company focuses on the external conditions of network transmission as it is not a major area
of business for Hikvision. In terms of the application layer, the three business groups (3 BGs) and innovative
businesses of Hikvision are working together with industrial partners to explore and promote the AIoT applications.
1 IoT：Internet of Things.
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Hikvision 2021 Annual Report
As the application scenarios of AIoT are highly fragmented, products and solutions will continue to be defined by
scenarios as we work to meet user demands for a long time in the future. A rich and comprehensive set of hardware
and software products are needed to support the scenario-based demands of AIoT. In the future, Hikvision will stick
to its product R&D approach combining generic baselines with customizations, identify the common demands of
various segments and fields in the process of expanding the market, and pushes further the modularization of
products and the optimized combination of modules, thereby providing personalized, customized and highly
converged IoT solutions in an efficient and cost-effective manner.
In the past two decades, Hikvision has witnessed and participated in the development and expansion of the
security industry. Intelligent security is a major battleground for the implementation of AIoT. In the future,
Hikvision is committed to serving various industries through its cutting-edge technologies of machine perception,
artificial intelligence, and big data, leading the future of AIoT：Through comprehensive machine perception
technologies, we aim to help people better connect with the world around them; With a wealth of intelligent products,
we strive to identify and satisfy diverse demands by delivering intelligence at your fingertips; Through innovative
AIoT applications, we are dedicated to empowering every individual to enjoy a better future by building an
intelligent world that is more convenient, efficient and secure.
2. Core Business Capabilities
Hikvision, focusing on technological innovation in IoT perception, AI and big data, offers serialized AIoT
products integrating software and hardware, cloud and edges, IoT and information network, and big data and AI,
with the whole-process service capability for building complex large-scale AIoT systems. Over the past 20 years,
Hikvision has expanded its coverage of perceptive technology from visible light to millimeter wave, infrared rays,
X-rays and sound wave etc., widened its product range from IoT perceptive devices to AIoT products, IT
infrastructure products, platform service products, data service products and application service products which are
fully integrated with AI and big data technologies. As a result, the Company has extended beyond comprehensive
security to such fields as smart home, digital enterprises, intelligent industries and smart cities. As a product
company equipped with system capabilities, Hikvision builds an open and cooperative ecosystem with business
covering more than 150 countries and regions around the world.
Hikvision’s business can be summarized into three types of supporting technologies, five categories of software
and hardware products, four system capabilities, two types of business organizations and two marketing systems.
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Hikvision 2021 Annual Report
Among them, the three supporting technologies include IoT perception technologies, AI technologies and big data
technologies; the five categories of software and hardware include IoT perception products, IT infrastructure
products, platform service products, data service products and application service products; the four system
capabilities include system design and development, system engineering implementation, system operation and
maintenance management and system operation services; the two types of business organizations cover three
business groups (public business groups-PBG, enterprise business groups-EBG and SME business groups-SMBG)
and eight innovative businesses (smart home, mobile robots and machine vision, infrared thermal imaging, auto
electronics, intelligent storage, intelligent fire protection and control, intelligent security check, and intelligent
medical services) ; the two major marketing systems refer to the domestic business marketing system and the
international business marketing system.
In the field of AIoT, Hikvision has been focusing on technological innovation, enriching product systems and
building system capability for many years, with its technological capabilities, product capabilities and system
capabilities complementing each other and growing together.
2.1 Integration of Software and Hardware: Constant 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 AIoT.
Hikvision’s new products are all developed based on this platform. On this unified embedded software platform,
all AIoT 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
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software upgrades to improve development efficiency significantly.
In addition, partners can realize iterative development of intelligent application functions of AIoT 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 AIoT equipment with unified access, networking, operation and maintenance
support capabilities through a unified intelligent perception networking platform, making the large-scale AIoT a
reality.
The unified device access framework supports the connection of various video equipment, multi-dimensional
sensing equipment, and intelligent equipment. With open interfaces and protocols, various AIoT 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,
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and timely feedback to the hardware products and AI algorithm team.
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.
2.2 Cloud-Edge Fusion: the Promotion of Perception Fusion Empowering Platform has Achieved
Remarkable Progress
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
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,
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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.
2.2.2 AI Open Platform: Makes Front-End Intelligent and Definable
In the process of industrial upgrading, there are a lot of intelligent application demands, which are closely
related to users’ business scenarios. Hikvision’s AI open platform, as a one-stop algorithm training platform for
fragmented industrial application scenarios, is capable of training high-accuracy algorithms based on small sample
data. Easy to operate, the AI open platform can generate targeted intelligent algorithms through sample data
collection, online data labeling and online algorithm training, which can then be deployed to Hikvision’s various
hardware devices.
In 2021, the AI open platform has been enhanced with a number of core capabilities: the launch of voice
classification, text recognition and data intelligence marks the expansion of its open platform capabilities from
visual capabilities to multi-modal capabilities; the launch of self-learning enables users to continuously improve
algorithm accuracy by using data generated in actual use without calibration; the launch of programming platform
has further lowered the barrier to entry by equipping the platform with low-code development capability for complex
intelligent applications.
By the end of 2021, the AI open platform has served more than 8,000 enterprise users, generated 50,000 models
and implemented 4,000 projects in total.
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2.2.3 The Self-Learning System: Support the Autonomous Improvement of Algorithm Accuracy
Currently, most AI algorithms are based on supervised learning and require a lot of manpower to annotate data.
Labeled training data is finite and incomplete, but real-world scenarios for algorithm deployment are characterized
by infinite possibilities.
Hikvision has built a self-learning system that can autonomously screen, annotate and train real data in
application scenarios without human intervention, continuously improving the accuracy of algorithms and evolving
on its own. The system supports both cloud and edge deployment and co-evolves on the two ends. At the edge, in
particular, Hikvision launched the first self-learning device with ultra-low power consumption—less than 15
watts—based on domestically made chips in the industry. In the perimeter prevention application of a steel mill, the
false alarm rate was reduced by 97% within 10 months after the self-learning algorithm was deployed. The related
technology has won two championships in the autonomous learning/continual learning competition of the
International Conference on Computer Vision (ICCV).
Self-learning products applicable to perimeter prevention, urban management (roadside stalls, illegal
construction projects, manhole cover anomalies and etc.) and other scenarios have been released. Hikvision believes
that through self-learning technology, machines can be endowed with the ability to evolve on their own, so that the
more the system is used, the smarter and more user-friendly it gets.
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2.2.4 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
realize the unified management of intelligent algorithms and on-demand scheduling.
2.3 Fusion of IoT and Information Network: Data Resource Platform Continues to Play an Important Role
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.
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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 BI2 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 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
2 BI：Business Intelligence.
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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.
2.4 Big Data-Intelligence Fusion: Intelligent Application Open Platform Empowers More 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): HEOP has been connected with the Hikvision
Infocloud application market in 2021, complete with processes for partner admission, APP development, APP
transaction and APP deployment. By developing, listing and trading APPs online, our developer partners provide
value-added services for device users. Once the device is added to the Infocloud Platform, users will be able to
manage and control the device for the ordering, deployment and use of APPs on a mobile terminal. Under the HEOP
architecture, all kinds of hardware will be containerized and various algorithms generated on demand and switched
freely. Developers can also use IDE tools with built-in APP code templates to deploy the development environment
with just one click and complete model tuning and packaging. Hikvision continues to host HEOP developer training
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camps to help ecological partners reach thousands of industries with products and applications by virtue of the
Company’s platform capabilities.
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,
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intelligent application engine, etc. So far, we have provided cloud-based platforms for online business operation for
more than ten fields, including parking operation, smart community operation, body temperature screening
operation, fire protection operation, intelligent waste classification management, vehicle safety management and
online cloud-based court trials 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 4,800 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 Systems Engineering: Undertake the Engineering Implementation of Large-Scale Complex IoT System
Compared with regular IT systems, AIoT systems are characterized by high fragmentation, difficulties in front-
end survey and design, difficulties in construction process management, multiple system-integrated elements, and
difficulties in operation and maintenance, etc. As a result, problems such as uncontrollable project duration and
construction quality have been found in the implementation of small-scale AIoT systems, let alone the engineering
complementation of large-scale complex AIoT systems.
Looking at the construction of intelligent industries and smart cities in recent years, the scale of AIoT systems
have been constantly expanding. Provincial-level forest fire prevention, water conservancy supervision, border
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control and other industrial construction projects, as well as city-level construction projects such as smart cities,
safe cities and Xueliang projects, continue to emerge. Engineering projects like these require a construction team of
hundreds or even thousands of people, with a wide range of construction operations, multiple types of front-end
perception devices and complex intelligent application functions. In other words, we have to upgrade the Company’s
AIoT system engineering implementation capabilities to the next level.
For this reason, Hikvision has been explicitly and constantly required by users to directly undertake the total
integration task of ultra-large-scale complex AIoT system projects in recent years. And in response to such
requirements, Hikvision makes full use of its advantages in AIoT products and unified software technology systems
as well as its technical service teams distributed all over the country, and provides whole-process services from
system design and development, system project implementation to system operation and maintenance management
for the implementation of some large-scale complex AIoT systems engineering projects based on project scale,
system complexity and the degree of urgency of users’ demands.
Hikvision is capable of undertaking the total integration of large-scale projects thanks to the Company’s unified
software technology system that has been fully built. Based on the component-based development model, the
software of large-scale projects can be developed through distributed collaboration and integrated efficiently by the
headquarters and regional teams; based on the unified device access framework, the Company’s own products can
be quickly integrated with third-party IoT perception products; based on Hikvision’s iDatafusion platform, it can
quickly integrate users’ existing multi-source heterogeneous perception data and business data, and provide
governance services of perception data and business data at the same time; based on the Intelligent Application
Open Platform, intelligent application systems involving multiple algorithms, multiple roles and multi-terminal
login can be quickly built; based on the Integrated Operation and Maintenance Service Platform, it can provide
operation and maintenance service support capabilities integrating front and back ends, internal and external fields,
and upper and lower levels.
In 2021, by taking on some large-scale complex AIoT systems engineering projects, Hikvision has further
enhanced its platform support capacity and team collaboration in complex system design and development, IOT
data governance, construction process management, system operation and maintenance etc., and optimized and
reorganized the Company’s system project implementation team, laying a solid foundation for undertaking more
intelligent industry and smart city projects in the future.
Meanwhile, Hikvision has explored a mode of closer cooperation with ecological partners in practice. In
addition to the integration of ultra-large-scale complex systems where users have specific requirements, Hikvision
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will continue to play its role as a product provider, supporting more integrators and operation and maintenance
service providers with products and technologies.
2.6 Ecological Empowerment: Forms an All-round Open Ecological Cooperation and Empowerment System
2.6.1 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 1,500 open
interfaces, more than 1,100 common components, and totally 278 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-
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 90 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.
2.6.2 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
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departments, as well as an online training mechanism offering over 330 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.
3. Software and Hardware Products
3.1 Hardware Product Family: Edge Node Comprehensive Perception + Edge Domain Scenario Intelligence+
Central Intelligent Storage and Computing
Hikvision has been putting together years of expertise around intelligent sensing to further facilitate
technological capabilities and enrich the branded hardware lineup. Currently the hardware family is flourishing in
edge nodes, edge domain, and cloud-center devices.
3.1.1 Edge nodes: Comprehensive Intelligent Perception and Enriched Product Mix
1) Front-end Cameras
With the rise of digital transformation and expansion of real-world scenarios, Hikvision is adhering to a “full
field perception and intelligent integration” strategy based on its firm grasp of both the software and the hardware.
All developments are based on real world demands, with five excellences, namely ultra-HDand full-color,
panoramic details, multi-dimensional perception, scenario-based customization，universal intelligence.
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Ultra-HD and full-color: Gorgeous Imaging All-time and All-weather
Hikvision has been pushing the boundaries of digital imaging technbologies, particularly for scenarios with
DarkfighterX and ColorVu, where color representation can be challenging. As of now, there are multiple series of
Ultra-HD ColorVu products to address the issue at its root.
Hikvision cameras are enhanced with multispectral fusion technology, which works on both visible light and
infrared to compensate the loss of color during nighttime. The AI-ISP image processing engine is introduced to
reduce noise in night shots. To compensate for low ambient lighting while minimizing the visual impact on drivers
and pedestrians at night, Hikvision has developed a patented real-time supplementary lighting matrix system, which
is capable of zoned lighting, enhancing only portions of the picture that needs more light. The traced focusing
technology excels in capturing multiple moving targets in varied speed in the same frame at night, dynamically
combining multiple capturing parameters to make sure every target is clearly visible and in focus.
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Panoramic Details: Everything Clearly in View
Hikvision solutions are known for impeccable details across the panorama, thanks to its comprehensiveness of
static and dynamic imaging, and multi-camera videoing.
The 4th generation of PanoVu camera is designed with harsh weather in mind. The top of the device is sheltered
with eaves and gutter to avoid flooding. The camera unit itself is fully enclosed, with self-heated glass and 7/24
working dehumidifier to avoid lens fogging. The enclosure itself is made with sapphire crystal to avoid wear and
tear by grains of sand. Images captured by different lens inside the camera are stitched into a full panoramic view,
with trimmed edges and warp correction to represent the actual scene as it is.
Multi-Dimensional Perception: Profile the Targets
Building upon visual perception, Hikvision is integrating multi-dimensional perceptive data through expending
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into sound wave, radar, and other IoT technologies, in order to achieve spatial-temporal correlation, IoT perception,
information fusion, and build a solid Data-AI Fusion Base.
In industry inspection and smart manufacturing, visual capturing alone is only capable of basic environment
monitoring, as it only “sees” how every machine appears to be operating. With the addition of industrial grade
microphones and bone-conduction audiology, the collection of precise audio data is possible. Given integrated
encoders, voiceprint matching algorithm, and AI Open Platform, it takes merely one hour of training data collected
in a normal working environment to generate an automated AI model that detects malfunctions. Therefore, by
combining the audio with video, visualized inspection could be realized, so we can accelerate the digital
transformation of manufacturing.
Scenario-Based Customization: Designed for Practical Scenario Application
Hikvision merge engineering thinking with technology, anddevelop cameras based on different scenarios, built
for real-life usage, with optimized structure, imagine, intelligence, maintenance, and security.
One example is specialized cameras to detect act of high-rise littering, an event of danger. These cameras are
installed facing the sky. Consequently, the cameras have the dust accumulating on the lens. Hikvision optimized the
system with a self-cleaning module, which collects water, and cleans the lens unit with a sprinkle/brush combination.
A shade is added to minimize over-exposure in daylight, and there’s a heating unit thaws the lens in cold days to
minimize human intervention.
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Another example is elevator surveillance. Electronic mopeds are forbidden in most high-rise buildings because
its unstable battery may cause fire, hence there is a need to monitor if the electronic moped goes into elevators, and
trigger the alarm. Hikvision’s AI algorithm can also identifies electronic moped from regular bikes and strollers.
ToF detection is introduced in case of blocked vision. If the security camera is blocked, the elevator itself will be
locked up to avoid risky entry. The camera also is aware of the floor it’s currently on, and helps to locate the elevator
in cases of emergency, which can secure the golden window for rescue.
Universal Intelligence: Designed Scenario-Based Product Solution with Better Suitability
Hikvision designs its hardware and algorithm for the specific needs of each scenario and industry, to ensure a
smooth digital transformation.
The restaurant industry needs to regularly examine kitchens for the proper dressing of staff, and this process
should be ideally human-free, for the efficiency of labor. Hikvision’s solution is powered by an AI platform that
specifically examines human objects for white gowns, white hats, and white face masks. Improper dressing, once
identified, triggers the alarm, so that the kitchen is constantly monitored in real time.
In scenarios such as waste incineration, metallurgy, and power generation, the temperature of burners is usually
extremely high, which need to be carefully monitored. Hikvision developed specialized cameras for such needs,
protected with wind cooling and enhanced with telescope imaging, to capture real time images inside the burner.
The camera also monitors blower nozzles and pipes, and trigger the alarm if the burner flame went out or if there is
any leakage.. So that the operators are timely informed there be anything out of the ordinary within the burner.
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Meteorological observation involves outdoor working. Hikvision sky imaging system captures the open sky in
a 360° panorama, which expels birds with auditory alarms. Power source is a primary challenge of outdoor working.
To address this issue, Hikvision equipped its products with low power 4G radio and solar panels to facilitate quick
deployment in the field. Hikvision provide open visual sensing, smart computing, and software development kits to
its partners via standard API. So that meteorological algorithms that can be quickly deployed on devices.
2) Smart Traffic and Mobile Devices
Smart Traffic: Hikvision traffic management products adhere to the objectives of “improving traffic order,
alleviating traffic congestion, preventing traffic accidents, improving traffic safety, and facilitating transportation
and travel”. All technological developments are based on actual needs, resulting in products and solutions
customized for actual scenarios. The eco-friendly series, which is being rapidly deployed across the country, has
minimized light pollution. The radar-assisted series cameras is being adopted for multiple scenarios to promote
industry upgrading and business innovation. The Radar-Assisted Road Pre-alarm Series product line provides 24/7
roadways surveillance and accident alarm, with an emphasis in traffic regulation enforcement and rural surveillance
in order to effectively reduce road safety risks. The Radar-Assisted Smart Monitoring Unit product line controls the
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fill-in lighting module in a smart way to enhancing ambient lighting only when needed, to improve energy efficiency
and high precision detection. The Radar-Assisted Vehicle Detector offers 24/7 precise, remote monitoring of
roadways, together with proprietary smart signal systems and “weight balancing” adaptive algorithms, it constitutes
a holistic self-contained signal control system that spans diagnostics, simulation, operation, evaluation and
adjustment. With extensive research on the capabilities of radar systems, innovative application, combined with
industrial synergy advantages, Hikvision is realizing business applications in many fields such as ultra-remote
surveillance, radar imaging, and frequency measurement, formulating professional applications in digital traffic,
ship inspection, vital examination, falling prevention, and etc., opening up new market segments.
Stationary Traffic Systems: Hikvision offers smart, automated stationary traffic solutions that cover
entry/exit, parking lots, street parking, and charging piles to save man-power. The recently launched product series,
such as “Guardian” series and “Roadside” series, has enriched the product matrix. Through construction of intensive
system, capabilities in intelligence and informatization, we have continuously improved the competitiveness of the
product system. By gathering experience of vertical scenarios and in-depth field research, we promoted the
penetration of the vertical market. Through in-depth field research in urban parking management, the Company
keep improving the urban parking efficiency and the parking experience of the citizens.
Mobile Solutions: Hikvision has been constantly optimizing the imaging quality and smart features of mobile
devices. The Company launched anti-vibration cameras, 5G recorders, and protable cameras, ideal for law
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enforcement and industry safety management. Pocketable AI-based recorders and helmet-mounted cameras
augmented by the latest low-power technologies are widely used in railways, healthcare, financial, construction,
and manufacturing sectors. The Company also launched handheld scanner PDA line that is primarily used for
barcode and character scanning, which is helpful to open the data terminal market.
3) Access Control and Intercom Systems
With years of excellence in visible light, infrared, sound wave, multi-dimensional perception, audio & video
interaction, and electromechanical control, Hikvision continues to refine its access control and intercom products.
The Company improve the access control product series’ competitiveness rely on MinMoe, which emphasis in
human and objects management in different scenarios ;enrich multi-modal technologies and build an HEOP
hardware ecosystem that required only minimum software development, offering well-rounded intelligent solution
to the customer. On a hot streak of innovation and quick delivery, the Company has released a new integrated
turnstile line to expand its share in the access control sector. The video intercom product line is constantly refined
to be widely adapted for all industries.
Hikvision access control, turnstile and intercom products combined with vertical applications, have formed a
comprehensive, rapid-growing solution ecosystem covering access control and attendance, temperature screening,
elevator control, financial checkout, inventory management, building intercom, industrial grade intercom, public
address (PA) , professional audio, turnstile , and advertising signage.
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4) Alarm Systems
Hikvision continues to serve clients with cloud-based alarm systems that benefit from its excellence in radio
frequency, optical fiber sensing, detection optics, integrated perception, and intelligent analysis. The Company has
released its 2nd generation wireless and hybrid intrusion alarm systems, which are especially well received both in
china and overseas. For perimeter alarm field, the Company constantly extending its product line, and launched the
next generation distributed vibrating optical fiber system, which helps to enrich the border/coast control application.
For security radar field, the Company has developed a plethora of situational perceptional radar products based on
demands from marine safety, railways, and fishery industries, such as land radar, shore-based water surface radar,
laser radar, and LiDAR and Camera Integration System.
3.1.2 Edge Domain Products: Extending Intelligent Business with In-depth Industrial Experience
Hikvision edge domain products centered around industrial vertical applications, further deepened AI
application, enhanced system/products opening. They are designed to empower customers with artificial
intelligence and serve the digital and intelligent transformation process.
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Hikvision 2021 Annual Report
1) Integrated Devices for Intelligent Applications
DeepinMind NVR, AI-Powered Core Product for Edge Domain Application: Hikvision’s DeepinMind
series products flourished in 2021, covering both generic and industrial-specific scenarios with a comprehensive
lineup.
Hikvision is the first to propose the concept of “inclusive AI” for universal smart surveillance. Promoting the
widely use of smart NVRs (network video recorders), the Company’s “AcuSense” series NVRs features HD
recording, lightweight AI applications, multi-dimensional perception, and on-demand data aggregation, offering an
upgrade option with remarkable price performance for small and medium enterprises, buildings, and communities.
For industrial scenarios, Hikvision’s DeepinMind products are augmented by cutting-edge, powerful AI
processors with high hashrate that could run multiple algorithms in parallel. The Company is committed to building
an ecosystem, where clients have access to the open platform to quickly train their own AI models with data
collected in real-life fragmented scenarios. On the other hand, with HEOP, the hardware itself is built as a
“container”, and can be quickly switched between proprietary or third-party algorithm and software, creating smart
integrated devices with high flexibility.
Fusion Storage, Only One-Step to Comprehensive Ddge Domain Solution. In normal circumstances, 80%
of the collected data is video related data. As the amount of data grows exponentially, indexing and retrieving
valuable information from data is becoming increasingly a challenge. Hikvision constantly integrates “smart fusion”
storage with computing, storage, and smart analysis with cutting-edge technologies such as GPU&HDD hybrid hot
swapping. Users are given the freedom of adjusting software plugins, which massively improve the video data post-
analysis ability, extending the storage cycle of key data and speeding up the access to key clips.
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Hikvision 2021 Annual Report
2) Conference Surfaces
Conference Management Software: An Enriched Solution Matrix
Hikvision conference surface products keeps upgrading. Take the latest smart conference management V2.0
for example, it forms a lite smart conference solution by adopting the interactive display as the heart of the scenario,
supported by other devices, such as conference room digital signage for announcement, and HikMicro Thermal
Presence Detector for attendance check. The result is a flexible solution that broadly covers the entire process of
events, including: making appointments, administrational approval, multi-screen display of conference information,
non-contact sign-in before the event; remote collaboration, wireless screen sharing, shared whiteboard writing, and
multi-party conference call during the event; relocating conference room, generating meeting minutes, automated
data analysis, centralized device/facility management, event process optimization, and intelligent resource
allocation after the event. The software solution can be connected to smart campus and security guard platforms as
a component, adding new ability to existing platforms in one-click.
Conference Tablet Hardware: Taking over the Premium Market
Hikvision D5D, one of the Company’s premium conference tablet, features a slick anodized body, ultra-
powerful processor, 8 GB of RAM and 64 GB of internal storage, AI-powered conference software, and cloud-
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Hikvision 2021 Annual Report
based application marketplace. With 48 MP camera that automatically focuses on the speaker, automated directional
audio capture with an 8-Mic array, remote conference and collaboration is made an experience. Better still, a
motorized cover automatically obstructs the camera when it’s not in use, further ensuring the privacy.
3) Intelligent Video Transmission
The transmission products is the key nodes and nexuses for Internet of Things. Hikvision designs its smart
video feed delivery system based on the philosophy of “visualized topology, unified management, intelligent
operation and maintenance”. A single hardware unit can handle up to 5,000 video channels. Based on intelligent
video transmission system, the Company has widely built network delivery solutions for many scenarios and
industries. Port authorities benefit from connected areas and unified management offering by the system. Resident
community managers are relieved by the integration of video surveillance and network management, where
everything can be done in the same user interface, making the process intuitive and cost-effective. For enterprise
campus operators, being able to quickly identify and resolve issues in the surveillance network really cuts down
their cost and improve their efficiency. The Company is well aware of its excellence, and striving from good to
better. In the future, the Company will keep expand its vertical applications to help the customer reach a smart way
to operate and maintain the network.
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Hikvision 2021 Annual Report
3.1.3 Cloud Center Product: A Solid Ground with Steady Improvements in Storage and Computing
Capabilities
The age of big data has come, and it depends on IT infrastructure with outstanding performance and reliability.
Hikvision has solid lineup of servers for general computing, big data, and artificial intelligence to address stable,
reliable, safe and advanced needs.
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Hikvision 2021 Annual Report
1) General Computing Products
With over a decade of experience, Hikvision generic server products covers single, double, and multiple
processor setups, with different forms like workstations, tower servers, rack servers, and edge servers, with variety
product series and powerful performance to keep the market well-served.
Hikvision generic server products are compatible with domestic and international mainstream technologies.
The product family is well segmented for the most competitive, addressing general needs of data centers and specific
industrial scenarios, such as government, internet, energy, finance, and telecom verticals. All Hikvision clients have
access to general computing infrastructure with outstanding performance, reliability, and security.
2) Intelligent Computing Products
Thanks to the Company’s accumulation of industries experience and outstanding technological abilities,
Hikvision’s smart server business has been excelling in domains such as AI-IOT, big data and business intelligence,
continuing to outperform competitors.
“Intelligent server” covers many forms, including all-in-one, hardware only, and algorithm software only,
which satisfy different clients and sales model. All products are compatible with domestic and international
mainstream CPU and GPU, backed by a prosperous ecosystem and robust supply chain. For centralized computing,
the Company just released the next generation of GPU rack servers in 1/2/4 units, maximizing cost efficiency with
tiered options. For edge computing, the Company offers servers that are heat/corrosion/dust proof and low energy
consumption, adapted to various working environments.
As a leader of algorithms, Hikvision has released over a hundred commercial algorithms with scientific rating
standards. The Company is experienced in the development and sales of algorithms. Added self-learning ability
make Hikvision algorithms especially adaptable, minimizing the workload of data collection and labeling.
3) Universal Storage Products
Hikvision constantly evolving universal storage line of products, which covers SAN, NAS and object-based
storage. The storage products are designed in two different architecture: server & controller distributed deployed
and all-in-one, with support from industry-leading technologies such as SDS3 and HCI4. They are already widely
adopted in a plethora of sectors, including office automation, database hosting, manufacturing management, and
data center infrastructure, regularly rated the very top brand in IDC network storage.
3 SDS: Software Defined Storage.
4 HCI: Hyper Converged Infrastructure.
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Hikvision 2021 Annual Report
4) Stream Storage
Based on the raw data and multi-dimensional application, Hikvision has developed a streaming storage model
for raw data. The model is non-file-based, hence free from data fragmentation and performance degradation after
long period data overwriting. By optimizing data writing mode, the solution further boosts file server performance,
while systematic, well-streamlined anti-virus measures keep data safe. In a decade since the initial launch, Hikvision
storage products are adopted by public security, traffic and transportation, finance, education, real estate, petroleum
industry and electricity sectors across over 100 countries and regions.
Hikvision streaming storage products have to been ranked as the top 1 in global video storage brands selection
by Omdia (previously IHS), propelled by sales far exceeding competitors. The Company is poised to strengthen its
brand power of streaming storage and continue to lead the industry.
5) Large Screen Displays
Hikvision’s display products, powered by renowned video processing technology, image restoration
technology, image augmentation technology, ultra-high-definition, and smart interaction technolog, is well received
in sectors such as monitoring centers and command centers, cloud center and big data center.
The Company continues to invest in Mini LED and energy efficient series products, improving heat
management with innovations such as reversed positioning and common cathode technology, and expanding its
presence to conference room. The current emphasis is on improved color consistency and higher resolution, which,
coupled with convincing price performance, will increase Hikvision’s leverage in the professional/commercial
display market.
3.2 Software Product Family: Software Platforms + Intelligent Algorithms + Data Models + Business Services
Hikvision’s software product family is composed of software platforms, intelligent algorithms, data modeling
and business services.
3.2.1 Software Platforms: Basic Platforms + General Platforms + Industry-specific Platforms
Basic software platforms: In 2021, the ecosystem of “two pools, three databases, seven platforms and one
environment” was continuously enriched and improved. “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,
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Hikvision 2021 Annual Report
respectively supporting the management and reuse of components, algorithms and models; “seven platforms” refer
to the resource management scheduling platform, intelligent perception networking platform, AI open platform,
perception fusion empowering platform, iDatafusion platform, intelligent application open platform, and 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, and 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. The ecosystem also
formerly featured “one screen,” referring to the large-screen visual application development tools, “one screen” is
integrated with “one environment,” which supported the configuration of visual applications and the association
with data without coding, realizing the visualization of data in the same space-time environment from multiple
angles.
General software platforms: Provides general software functions across industries, including general security
and protection, visual command, alarm management, inspection supervision, conference interaction, and content
release. 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, and portable law enforcement integrated management platform.
Industry-specific software platforms: Hikvision, serving over 70 sub-industries, has gradually built more
than 200 application software platforms for various industries. Taking the traffic police industry as an example, we
provide platforms such as 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, the smart traffic signal control
platform, the highway traffic safety monitoring and management platform, the smart check station application
platform, and the intelligent driving management video inspection platform.
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.
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Hikvision 2021 Annual Report
General Algorithms: Algorithms that can be used for the development of intelligent applications in multiple
industries. For example, algorithms to detect and classify transportation equipment, motor vehicles and non-motor
vehicles, and algorithms to detect traffic flow of people and vehicles, etc.
Industry-Specific Algorithms: Algorithms developed for industry-specific application demands. For
example, algorithms for the detection of exposed garbage, bagged garbage, misplacement of kitchen trash bins,
road messiness, road ponding, road damages, road leftovers, abnormal sidewalk piles, anti-collision bucket
damage, transformer box abnormalities, non-decorative tree hangings, billboard damage, tree protection facility
damage, incineration of garbage leaves, illegal parking of non-motor vehicles, and 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 an 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, changeable lane feature research
and judgment and control model, tidal lane feature research and judgment and control model, public transportation
priority signal 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
OD5 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.
3.2.4 Business Services: System Operation and Maintenance + Data Engineering + Business Operations
Hikvision, concerned with users’ application demands, explores the transformation from being a product and
system supplier to being a service provider for certain businesses.
5 OD: O stands for Origin, which refers to the departure location, and D stands for Destination, which refers to the end of the
journey.
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Hikvision 2021 Annual Report
System Operation and Maintenance Services: Hikvision provides system operation and maintenance
services to certain 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 Operations 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 200 cities, and its coverage 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 Organizations
With the evolution of core capabilities and business scope, the business organization model of Hikvision is
being constantly upgraded. In the new era of AIoT, Hikvision’s domestic business is built in layers, with the three
business groups progressing their businesses based on the demands of different industries, while its international
business is tailored to different countries, with its business and technology systems iterated and elevated according
to the characteristics of the international market. Targeting different business models, the Company explores market
demands, coordinates internal resources and strengthens its capabilities, as a way to facilitate digital transformation
for customers and users at all levels including countries, cities, industries, enterprises and public institutions, and
SMEs.
4.1 Public Business Group (PBG): Enhance Product and System Capabilities to Boost the Digital
Transformation of Industries and Cities
4.1.1 Overview
As 2021 kicked off the implementation of China’s 14th Five-Year Plan, the digital reform led by the government
showed a trend towards intensive and scientific construction featuring “construction of perception technologies in
a systematic way, unified management by one network, unified operation and maintenance, empowerment through
big data and AI, and promoting construction through application”. Combining its continuous innovation in such
technology fields as IoT perception, AI and big data and years of in-depth understanding of the industrial users’
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Hikvision 2021 Annual Report
demands in public services, and centering around “AI universal empowerment and deepening of data value”,
Hikvision has constantly expanded its product portfolio in terms of “hardware, platforms, algorithms, models and
services” and deeply integrated product and system capabilities with a focus on the value fulfillment of solutions.
Ultimately, it serves to facilitate the digital transformation of public services and cities through the comprehensive
expansion of intelligent businesses in public security, transportation, urban governance, services concerning
people’s livelihood, ecological and environmental protection, etc.
4.1.2 Core Technologies: Enhance Big Data-AI Fusion Base Capabilities, Enrich Industry Service Items and
Strengthen Systems Engineering Capability
Closely following the demands of customers and users in public services, Hikvision continues to expand its
product lineup across industries, enhance the capabilities of the “Perception Base, Intelligence Base and Data Base”,
enrich industry service items, and strengthen systems engineering capability, thereby contributing to the digital
transformation of industries and cities.
(1) Continue to expand industrial products and enrich application scenarios
Utilizing its solid technological foundation and first-mover advantage in AIoT and big data, Hikvision digs
deep and taps industrial demands, continuously enhances fundamental support capabilities such as the Perception
Base, Intelligence Base and Data Base, and enriches intelligent applications in smart cities, public security,
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Hikvision 2021 Annual Report
intelligent transportation, ecological and environmental protection and other industries.
The Perception Base: Hikvision continues to focus on electromagnetic spectrum perception technology,
extending its AIoT products from visible light to infrared rays, X-rays, millimeter wave and other multispectral
technologies, from video surveillance to multi-dimensional perception, and from the traditional perception of people
and vehicles to the perception of all elements. We have incubated a number of new industrial blockbuster products,
such as the Dual-Lens Bullet Camera, the Hyperspectral Multi-Parameter Water Quality Monitor, the Radar-
Assisted Camera and the Intelligent Security Inspection System, enabling all industries to quickly build visualized,
intelligent and three-dimensional perception capabilities.
The Intelligence Base and Data Base: Drawing on its technological innovation in artificial intelligence and
big data, Hikvision provides customers and users with a rich variety of hardware products, software platforms,
intelligent algorithms and data models. Hikvision’s Big Data-AI Fusion Software Family is growing day by day
with basic software such as the “two pools, three databases, seven platforms, one screen, and one environment” and
more than 70 pieces of general software in 10 categories such as visualized command and alarm management. The
Perception Fusion Empowering Platform, for example, empowers users of various segments of public services
through such capabilities as the co-construction of locations, resource sharing, algorithm co-management,
computing power integration, capacity sharing and event co-governance etc., and is widely used in urban
governance, environmental protection and other scenarios. In addition, hundreds of intelligent algorithms and data
models that fit industrial businesses have been created, covering most business scenarios in public services.
Based on the three bases, Hikvision fully opens its Big Data-AI Fusion capabilities covering equipment,
platforms, data and applications to gradually create a Big Data-AI Fusion business ecosystem, work with partners
to build an industrial innovation consortium, and keep exploring the business segments of various industries with
more than 120 pieces of software developed to meet the business demands of different industries, providing a wealth
of scenario-based intelligent applications. In the edge node and edge domain, it deepens agile and highly intelligent
applications with device coordination and interconnection; in the cloud center, intelligent applications such as the
“be responsible for general sanitation, green covering and keeping good social order in a designated area outside
the unit building” management system, intelligent monitoring of safety of small reservoirs, full-lifecycle supervision
of solid waste, and intelligent monitoring of water quality are further improved for fields such as public security,
social governance, transportation, epidemic prevention and control, conservation of natural resources and ecological
protection, which has been implemented in hundreds of cities, hundreds of sub-industries and thousands of scenarios,
contributing to Beijing 2022 Winter Olympics, Hangzhou 2022 Asian Games, the 14th National Games of China
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Hikvision 2021 Annual Report
and other important events.
(2) Continue to enrich industrial service items and enhance user engagement
Based on its deep industrial understanding and insights, Hikvision continues to enrich industrial service
capabilities in data engineering, business operations and other areas, and enhance the engagement of industry users.
Data engineering services: Hikvision delivers data engineering services involving multi-dimensional
perception data and business data for some industrial users, including factor calibration, data exploration, data
governance, data organization, BI visualization analysis and other services.
Business operation services: Hikvision offers an increasingly broader scope of business operation services
based on the Internet operation platform, covering many fields such as integrated urban operation, video enabling
platform operation, urban parking operation, fire protection operation, community security operation, security check
operation, and intelligent management of waste classification etc.
(3) Steadily improved systems engineering capability to ensure closed-loop project management
Hikvision continues to strengthen product and business integration, comprehensively improve system
engineering analysis and design as well as implementation and delivery capabilities covering scientific deployment
and management of perception devices, intelligent analysis and association of perception data, and the application
of in-depth IoT-Information Network data integrated application, reinforce project management in complex system
construction with stronger project management capability in the start-up, planning, execution, monitoring and
closing stages, and collaborate with industrial customers to fill gaps and provide users with closed-loop project
management.
4.1.3 Value Fulfillment
While deepening its understanding of business in public security, transportation, urban governance, people’s
livelihood, ecological and environmental protection and other fields, Hikvision strives to build the capabilities of
the “Perception Base, Intelligence Base and Data Base” for cities with a focus on “perception, intelligence and data”,
and continuously expand intelligent industrial services through the Perception Fusion Empowering Platform. By
the end of 2021, it has provided a total of 346 system solutions in different business scenarios for government
customers and users.
Hikvision is committed to making cities smarter, society safer, transportation more convenient, governance
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Hikvision 2021 Annual Report
more refined, services more targeted, and the ecology more livable. In the meantime, the Company will undertake
its corporate responsibility and fulfill its social mission in primary-level governance, rural revitalization, and
epidemic prevention and control etc., contributing to modern urban governance.
(1) Smarter Cities
In the field of smart cities, Hikvision aims to strengthen the city’s overall perception capability, optimize
urban business processes and collaborative sharing capability, build decision-making support and early warning and
prediction capabilities for urban areas, and develop modern urban governance capability. Take “perception,
intelligence and data” as the core, IoT, AI, big data and other technologies are used by Hikvision to continuously
upgrade the architecture of “cloud-edge fusion, IoT-information network fusion, big data-AI fusion” and expand
the technology system comprised of “hardware, platforms, algorithms, models and services”. We have covered the
smart city sector in operation and further mined its value, delivering support for smart city operation and
management as well as cross-industry intelligent businesses in various fields.
Focusing on the perception fusion empowering platform, we offer the total solutions of intelligent perception
middle platform for the construction of smart cities. The platform provides unified video and IoT access and
aggregation capabilities, establishes full-lifecycle archives, and helps urban managers gain insights into the
construction, operation and use of urban perception resources. Through the intelligent arrangement and scheduling
of various perception algorithms and cloud-edge computing power, the platform has doubled the effect of perception
resources application. By means of perception openness, intelligent efficiency enhancement and data fusion, the
platform quickly enables intelligent applications in various commissions, offices and bureaus, assists cities in
building modern governance capability, and helps elevate refined urban management.
The perception fusion empowering platform focuses on video value mining, and, with the idea of “one video
with multiple algorithms and one event with multiple streams” in mind, provides capabilities such as the co-
construction of locations, video sharing, co-management of algorithms, capacity sharing, computing power
integration and co-governance of events, in order to meet the demand of intelligent video applications in multiple
industries and departments. Over the past year, the perception fusion empowering platform has been successfully
applied to nearly 100 projects in 72 cities in 19 provinces across China, covering various industries such as smart
cities, smart water conservancy, smart environmental protection, emergency management, park management, public
security and politics and law, etc.
In the area of primary-level governance, Hikvision continues to penetrate into every segmentation scenario
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Hikvision 2021 Annual Report
of towns and streets, collaborates with primary-level party organizations in towns and streets across the country to
explore key areas such as integrated command, public management, safe construction, public services, Party
construction, Party-government integration, regional development, and comprehensive law enforcement, and
implement industry-specific applications at primary-level in public security, transportation, urban management,
emergency response, civil affairs and other industries. We have pioneered hundreds of applications, including the
early warning, investigation and judgment of events, command and dispatch management, living environment
improvement, town and street fire control supervision, and elderly care services, which help effectively tackle the
difficulties in traditional town and street primary-level management, primary-level law enforcement, primary-level
services and inter-departmental coordination, forming a new proactive, forward-looking and preventive closed-loop
of primary-level management that fully elevates the intelligent management of towns and streets.
In terms of rural revitalization, the Company focuses on production, ecological and daily life scenarios in
rural areas. Through video, thermal imaging, AI, IoT and other technological means, we deliver the capabilities
including construction of digital infrastructure and public support platforms to realize intelligent perception of
production monitoring, environmental anomalies, ecological risks, potential hazards in facilities and other elements.
Focusing on rural governance, ecological monitoring, rural industries and other elements, Hikvision provides
intelligent applications for industrial development, ecological supervision, primary-level governance, people’s
livelihood services, etc. and creates a new primary-level management model featuring multi-dimensional perception,
transparency and visibility, and primary-level co-governance, thereby facilitating the digital construction of rural
areas.
In epidemic prevention and control, Hikvision contributes to scientific and precise measures in cities. Based
on the self-developed non-contact temperature screening technology and products, the Company has built a
Hikvision Infocloud TM—a cloud-based temperature measurement data platform for the cloud networking of such
data with services covering various scenarios such as scenic spots, schools, hospitals, farmers’ markets and
transportation hubs, ensuring the normalization of epidemic prevention and control as well as public travel safety.
From temperature measurement, health code scanning and verification to data networking and big data tracing,
Hikvision integrates innovative technologies such as multi-dimensional perception, AI and big data to make
epidemiological surveys more efficient and accurate, assist the government to quickly cut off transmission routes,
and effectively guarantee the work resumption and production for urban enterprises. To help facilitate border
epidemic prevention and control, Hikvision has built a three-dimensional, intelligent, integrated, practical and
iterablesystem. Based on rich varieties of intelligent perception devices including visible light, thermal imaging,
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radar, vibrating optical fibers, electronic fence, radio frequency identification. Combined with complex border
scenarios, the Company has been constantly refining and optimizing the adaptability of multi-perception devices to
scenarios, the intelligent linkage of multi- perception devices, the unified access of multi-type devices, the intelligent
analysis of multi-type algorithms, and the strategy optimization of multi-type early warning. The result is the omni-
directional intelligent perception, all-weather intelligent perception, intelligent recognition, intelligent tracking and
early warning of cross-border targets, providing defense-related technologies to help crack down on cross-border
smuggling and effectively prevent the spread of the epidemic across borders.
(2) Safer societies
In public safety domain, Hikvision combines the deep understanding of businesses with AIoT technology.
Drawing on its accumulation of visible light technologies, the Company has taken a leap from DarkFighter to
DarkFighterX and from black & white to ColorVu, delivering a high-definition intelligent view in all weathers and
at every moment. Meanwhile, a series of new products which adapted to the “Peaceful China Initiative” have been
created to realize the comprehensive perception of public safety elements through thermal imaging, sound wave,
radar and other perception technologies.
Based on the capabilities of its video image intelligent application system developed over the years, Hikvision
not only provides security guarantee for cities, but also extends its business to the public security control and service
of the countryside, railway lines, river basins and other scenarios.
From the Skynet project to the Xueliang project, to today’s intelligent communities, primary-level governance,
public security prevention and control, Hikvision has worked with ecological partners to transform public security
management from post-accident tracking to in-process investigation and judgment combined with prediction and
early warning in advance by utilizing “perception integration, computing fusion, intelligence integration, data
aggregation, application integration, and the combination of operation and maintenance”. Empowered by
technology, the Company strives to help build a peaceful China by reducing burden and increasing efficiency for
users at all levels.
In terms of traffic safety, Hikvision 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, truck compartments carrying passengers, vehicle overload, truck
turning right without stopping, etc., and data applications for real-time traffic conflict warning, traffic accident
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Hikvision 2021 Annual Report
portrait analysis, road network structural hazards analysis, analysis of dynamic conflict domain of road network,
road network safety optimization, investigation and judgment on vehicles with hidden dangers and overloaded
vehicles bypassing, to help ensure a safe transportation environment. Among them, the new technologies for
detecting truck compartments carrying passengers, vehicle overload, truck turning right without stopping and truck
blind spot warning that were launched in 2021 provides help for the traffic control department to effectively manage
risk factors in traffic accidents that occur frequently in recent years. The traffic accident portrait analysis uses
automatic restoration technologies ranging from natural language to GIS 6 coordinates, enabling traffic control
departments to conduct large-scale machine analysis of historical accident data and assisting in the investigation of
high-frequency hidden danger points and accident root cause rules. Based on data provided by radar, video, laser
and other trajectory recognition technologies, the dynamic conflict domain analysis of road network provides a
powerful tool for traffic control departments to intelligently determine the accident-prone points in road confluence
collision, rear-end collision and steering collision.
Hikvision provides vehicle sensing technologies to ensure vehicle safety, generating collision warning,
panoramic view, blind spot detection and other applications for buses, passenger vehicles, freight vehicles and
online ride-hailing vehicles and serving hundreds of transportation enterprises.
Hikvision delivers multi-dimensional perception capabilities to ensure road safety, providing perception, data
analysis and warning for scenarios such as road event detection, safety warning of sharp road turns, road slope
falling rock warning empowering most of the country’s road infrastructure construction with its solutions and
capabilities to help reduce road safety risks.
In emergency management, Hikvision provides comprehensive capabilities to prevent and handle
emergencies. To deal with the production safety risks of hazardous chemicals companies, fireworks and firecrackers
businesses, non-coal mining enterprises, tailings ponds and all types of small and micro enterprises, the Company
establishes a production safety monitoring and early warning system offering data access, data analysis, intelligent
early warning, hierarchical push notifications, information backup for reference and other applications that
effectively address the supervision pain points of users. Hikvision’s solutions for forest fires, floods, geological
disasters and other natural disasters feature functions such as comprehensive monitoring of all elements, disaster
early warning, comprehensive risk assessment, analysis, consultation, investigation and judgment of disaster
progression, laying a solid foundation for disaster prevention and mitigation and establishing a sound system for
6 GIS：Geographic Information System.
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Hikvision 2021 Annual Report
natural disaster monitoring and early warning. For different kinds of sudden accidents and disasters, whole-process
emergency command and dispatch capability is designed, including key applications such as on-duty management,
emergency plans management, coordination and consultation, command and dispatch, summary and evaluation, to
help users enhance emergency response and rescue capabilities, reduce disaster losses, and build a complete
emergency command and rescue system.
(3) More convenient transportation
As for traffic management, Hikvision provides 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, supporting tidal lanes, variable lanes, roundabouts and bus priority control. The
Company delivers 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, information analysis, investigation and judgment, intelligent service
investigation and judgment, key vehicle traffic protection, green parking, etc., which are combined with a “Big
Data-AI Fusion Traffic Management Base” incorporating road network computing, data computing and model
computing to achieve “smart traffic management”. After years of engagement in signal control, Hikvision shipped
more than 8,900 units of signal controllers in 2021, firmly ranking in the forefront of the industry. Intersection
problem diagnosis has been upgraded in 2021, extending from the previous single intersection signal configuration
diagnosis to the more practical diagnosis of complex matters such as intersection and road section signal,
organization and anomalous events. The “Big Data-AI Fusion Traffic Management Base” integrates basic
capabilities such as perception access, data governance operation, model operation, road network computing and
thematic databases commonly used in intelligent traffic management. Thanks to its openness and professional
performance, it arms customers and users with cost-effective solutions to jointly tackle traffic management
challenges.
In urban transportation, Hikvision fully combines the IoT perception technology with industry scenarios to
deliver safe and efficient monitoring capabilities for highway maintenance, bridges, slopes, tunnels and other
scenarios, as well as visualized industry supervision capabilities for engineering construction and industry
management, serving thousands of industry users.
With regard to port management, utilizing multi-dimensional perception and AI algorithms, Hikvision has
developed scenario-based solutions such as standard management of work wear, dangerous operation management,
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and early warning of port machines’ blind spot , which cover “people, vehicles, goods, machines and environment”
and other elements, and serve nearly 100 port enterprises, ensuring port operation safety and improving management
efficiency.
In railway transportation and rail transit, Hikvision provides comprehensive monitoring and detection in
scenarios such as railway stations and hubs, freight yards, power substations, train carriages and railway lines
through multi-dimensional perception technology, serving 18 railway administration groups and hundreds of high-
speed railway station hubs across China. Hikvision’s technologies have been applied to public safety precautions,
intelligent operation, intelligent maintenance, digital service and other scenarios in over 100 urban rail transit lines
in the country, providing support and guarantee for the safe, efficient and smooth operation of urban rail transit and
creating a better and more comfortable ride experience for citizens.
As for airport travel, Hikvision offers passengers convenient and intelligent parking guidance, automatic
parking, intelligent navigation display, paperless customs clearance, easy transfer guidance and other applications
in nearly 100 airports, helping to build a safe, green and intelligent airport with humanistic care and cultural
expression.
(4) More refined governance
Hikvision is committed to building solutions for different industries in the field of city governance. In terms
of municipal administration, the Company designs industry solutions for the intelligent management of municipal
facilities, including monitoring capability for manhole covers, garbage cans, ancient and valuable trees, billboards
and other facilities, and IoT perception capability for pipe network’s liquid level, water quality, water flow and
other data. A closed-loop process that integrates problem collection, dispatching and handling, and feedback and
evaluation has been established to facilitate targeted municipal management services. For city appearance and
environmental sanitation, Hikvision delivers industry solutions to waste sorting, including intelligent supervision
applications throughout the whole process from sorted drop, sorted collection, sorted transportation to sorted
disposal, which helps improve waste sorting operation and enhance the refined management capacity for city
appearance and environmental sanitation. As for urban management, the Company develops industry solutions
oriented towards intelligent urban management, offering mobile intelligent collection, intelligent inspections of
violations, “be responsible for general sanitation, green covering and keeping good social order in a designated area
outside the unit building” management system, urban flooding monitoring, command and dispatch management,
the operation monitoring center and other applications, and building a five-in-one technology system incorporating
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perception, analysis, service, command and supervision to help create a clean, tidy and orderly urban environment.
(5) More targeted services
Hikvision is dedicated to creating solutions for different industries in services concerning people’s livelihood.
With regard to elderly care services by civil administration departments, the Company creates systematic
solutions for homes, communities and institutions, featuring applications such as elderly security, intelligent nursing,
health monitoring and caring services, providing technology support for the safety of the elderly, intelligent and
convenient means to ensure the smooth operation of nursing institutions for the aged, and service data support for
civil administration departments. To improve primary-level services, the Company focuses on such scenarios as
towns, streets, communities and villages, delivering various applications including primary-level workstations,
comprehensive violation handling, home safety warning for the elderly, school gate security supervision, fire safety
prevention and control and store information library to achieve closed-loop management from event gathering,
distribution to handling, assist in collaborative intelligent business control for various commissions, offices and
bureaus, and provide technological support for modernizing primary-level governance systems and capabilities.
(6) A more livable ecological environment
With the help of video, radar-assisted technology, thermal imaging, hyperspectral, monitoring equipment, big
data, AI, knowledge graphs and other multi-dimensional perception and intelligent analysis technologies, Hikvision
strives to build an ecological monitoring, management and service system for natural resources, forest and grass,
water conservancy, ecological environment, meteorology and other businesses, so as to create a more livable
ecological environment.
To help protect land resources, Hikvision sets up an intelligent management platform for nature reserves.
Bi-spectrum thermal imaging, wildlife protection cameras, insect detection lamps and unmanned aerial vehicles are
combined with animal identification, fireworks identification and other algorithms for such application as wildlife
monitoring, forest and grass fire prevention, pest monitoring, ecological live streaming, human activity management
and emergency command, to assist in natural ecological protection as well as science popularization and education.
The forest fire monitoring and early warning platform is built to monitor forest fires and human activities through
high-point bi-spectrum thermal imaging and low-point intelligent cameras, realizing fire monitoring and early
warning, fire investigation and judgment, firefighting command, situation analysis, disaster damage assessment, fire
supervision and other functions, and enhancing comprehensive forest fire prevention and control capabilities. An
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intelligent monitoring platform for natural resources is created to identify characteristic elements of suspected illegal
activities through high-point intelligent cameras and AR cameras, which are then integrated with data on spatial
geography and national land for analysis to implement applications such as farmland protection, post-approval
supervision of construction land and supervision of illegal mining at night, thereby effectively enhancing our
capability to oversee natural resources. A cloud platform for geological disaster monitoring is built to combine
sensor devices such as rainfall gauge, GNSS7 and soil moisture meter with intelligent video equipment to monitor
rainfall, surface displacement, soil moisture content and other factors, realizing three-dimensional and visual
monitoring of geological disasters such as landslides, collapses and debris flows, and providing intelligent assistance
in geological disaster warning and relief.
For the purpose of water conservancy and flood prevention, Hikvision provides an intelligent management
platform for river and lake management and protection. Through video AI analysis, multi-spectrum visual
perception, satellite remote sensing interpretation and other technologies, the platform can intelligently detect the
disorder and chaos events of rivers and lakes, such as illegal sand excavation, shoreline destruction and garbage
stacking, so to help improve the long-term protection and dynamic control of rivers and lakes, revive the ecology
of rivers and banks, and create a beautiful environment. An intelligent and comprehensive water safety management
platform is set up to achieve such applications as safety monitoring of dams, embankments, and water gates and
pumping stations, condition monitoring of electromechanical equipment and intelligent patrol through displacement
meter, seepage and seepage pressure meter, video water level meter, thermal imaging, etc., and integrate information
on work conditions and rain conditions with real-time panoramic AR images, so as to obtain real-time updates on
safe project operation and protect water conservancy projects during floods. A command and scheduling platform
for water disaster prevention is provided to integrate audio and video resources such as voice and video conference
through the integrated communication gateway, offer GIS scheduling, conference scheduling, video scheduling and
other functions, and realize “full access for one system, full connectivity of one network, full display on one screen”,
ensuring vertical linkage and horizontal coordination of flood control command and scheduling. A soil and water
conservation monitoring platform provides satellite remote sensing monitoring, unmanned aerial vehicles, video
monitoring, sensors and other integrated monitoring capabilities for key monitoring scenarios of soil and water
conservation, such as production and construction projects and check dams, to improve the ability to forecast and
give early warning of soil erosion. Comprehensive monitoring and management schemes are formulated to protect
7 GNSS: Global Navigation Satellite System, a system built by the European Space Agency.
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the safety of small reservoirs during floods.
As for ecological protection, Hikvision provides an intelligent monitoring platform for the atmospheric
environment, using LiDAR, hyperspectral Fourier transform, thermal imaging, video AI and other technologies to
achieve intelligent applications such as prohibition of straw burning, VOCs 8 monitoring, particulate matter
monitoring, exhaust gas monitoring and dust control. Through innovative technologies, the Company strives to
protect the environment, support more real, accurate and comprehensive atmospheric environment monitoring, and
enable efficient supervision, so as to help defend the blue sky. An intelligent monitoring platform for the water
environment is created to monitor water quality factors such as chlorophyll, total nitrogen and total phosphorus in
rivers and lakes in situ with the self-developed hyperspectral water quality monitor, providing water quality
monitoring, trend analysis, water quality evaluation, pollution traceability and other intelligent applications, so as
to help users gain an understanding of the status and changing trend of water environment quality and provide
support for rapidly treating water pollution. An intelligent whole-process supervision platform for solid waste is
created to achieve the closed-loop management of solid waste throughout the process from generation, collection,
storage, transfer disposal through such technologies as IoT, video AI and big data. Dynamic data collection and
intelligent analysis and early warning are used to deliver intelligent applications such as “refined supervision, whole-
process supervision, risk supervision and law enforcement supervision” of solid waste, effectively curbing illegal
dumping and preventing environmental risks.
In meteorological operations, Hikvision works with the meteorological department to develop the weather
modification prototype on Tianquan Mountain in Deqing County, achieving intelligent control of key places of
weather modification and coordinated command between superiors and subordinates ， and improving safety
supervision capability in weather modification operations. An intelligent meteorological observation and
management platform is built for the intelligent observation of cloud cover, cloud shape, visibility, snow cover and
other meteorological elements by means of video AI and multi-dimensional perception. AR panorama, radar-
assisted linkage and other new technologies are used to enable such applications as unattended observation stations,
video review of weather phenomena and integrated display, generating more accurate and timely observation data
and taking meteorological observation to the next level.
The 14th Five-year Plan period has created a huge opportunity for rapid development of the digital economy,
digital society and digital government. Together with multiple ecological partners, Hikvision will continue to
8 VOCs: volatile organic compounds.
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promote the upgrading and iteration of products, systems and services, facilitate digital governance of the
government, and ensure social harmony and prosperity.
4.2 Enterprise Business Group (EBG): deepen digital transformation and accelerate efforts to improve the
innovation capacity of enterprises
4.2.1 Overview
The digital economy is playing a leading role in high-quality economic growth amid the prominent uncertainty
in the macro environment. Revolution of new energy, new energy vehicles, new infrastructure and machines
replacing humans, for instance, demonstrate strong vitality and immense potential as they guide this new wave of
industrial digital transformation and continue to contribute to new growth in the digital industry. Digital
technologies such as the Internet of Things (IoT), artificial intelligence (AI), big data and cloud computing have
been integrated, applied and innovated by enterprises in managing their production and operation, assets and
facilities, personnel organization and cost control, enabling various industries to increase efficiency, innovate
operation, optimize organization and control costs. Together with partners, Hikvision will continue to innovate
around products, solutions and service systems. With abundant practical experience and keen industry insight, the
Company is committed to making itself the preferred brand of intelligent scenarios IoT, a major supplier of
equipment and facilities IoT, and a strategic partner for digital transformation.
4.2.2 Core Technologies: build an AIoT product and solution system and implement digital applications
Based on the unified software technology architecture, Hikvision builds its domain-end intelligent perception
capability and creates intelligent scenarios IoT and equipment and facilities IOT by utilizing AIoT technologies,
develops data aggregation, analysis and mining capabilities with IoT-information network fusion data, and pushes
forward the closed-loop implementation of intelligent applications by drawing on its AI engineering capabilities.
By building the Huipin Application Empowerment Platform for smart parks and providing the Hik-Cloud enterprise-
level SaaS service for chain users, the Company responds rapidly to user needs, supports the innovation of industrial
applications and helps with the implementation of digital applications in numerous industries.
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Hikvision will continue to refine digital enterprise solutions integrating enterprise informatization, equipment
and facilities IoT and intelligent scenarios IoT, enhance industrial insight, and innovate applications for digital
transformation in such fields as digital energy, intelligent manufacturing, intelligent buildings, education and
teaching, financial services, digital countryside, intelligent medical services, intelligent communities, cultural
tourism, intelligent construction sites, retail chains and intelligent logistics.
(1) Constantly innovate AIoT products featuring comprehensive perception of elements
Using its technological strengths in AIoT, Hikvision continues to innovate and strives to build a full-domain
intelligent perception product system by expanding the perception boundary of the physical world through
continuous breakthroughs in the multi-dimensional perception technology system.
Diversified product forms enable devices to better fit into the deployment environment. For example, the
micro-distance meter-reading camera is easy to deploy and install thanks to its compact design, and energy-efficient
with a long battery life; the anti-corrosion cameras, featuring a special structural design for airtightness, are widely
used for monitoring offshore wind turbines; HikMicro Thermal Presence Detector blends right into conference
rooms and other business settings with its futuristic look.
Challenging on-site environments demand higher levels of equipment performance. For instance, high-
temperature highlighting cameras can be used for furnace observation and steel slag scraping to gain visibility into
the operation process in harsh environments; the anti-fumigation camera can operate continuously in hazardous and
high-risk environments such as a grain depot; in centralized control applications, professional low-latency cameras
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have reduced the end-to-end image delay to 70 milliseconds, and the response delay is almost imperceptible to the
naked eye.
Flexible applications focus more on device portability. For example, designed with low power consumption,
the small AI badge can provide continuous audio and video recording for 11 hours, documenting the entire service
process; the safety helmet with an anti-shake camera helps manage site construction by recording videos clearly and
reliably, ensuring that the construction process is safe and controllable; explosion-proof PTZ cameras can be quickly
and efficiently installed for temporary control and emergency management on the construction work site.
With a vertical product system established across coal, electric power, communities, education and other
industries, Hikvision hopes to work with partners in the future to create industry-specific products, expand
the scope of business application and facilitate the digital transformation of our users.
(2) Push the limits of AI engineering capabilities to accelerate business implementation
Hikvision vigorously explores a common path for AI empowerment, improves the efficiency of ecological
empowerment and assists in rapidly completing the business layout of partners. Meanwhile, the Company sharpens
its industrial insight, deeply integrates intelligent applications with the business process, and helps users’
applications go online quickly, form a closed-loop system of intelligent application business and fulfill their value.
To boost the efficiency of ecological empowerment, Hikvision has made its HCA-AIOPE (Hikvision Certified
Associate-AI Open Platform Engineer) technology certification system available for ecological partners, enabling
them to build an AI technology team and expand into more business fields together with the Company.
Hikvision’s AI engineering continues to serve users in education, electric power, chemical engineering,
agriculture, food and other industries. For example, in the energy industry, guided by the technology roadmap of
the AI+ automatic control system, technologies such as automatic belt deviation correction and dynamic fan speed
control have been successfully implemented; in real estate, the low-code AI+ engine can rapidly increase business
efficiency, reduce labor cost in operation and maintenance, and assist in intelligent building inspection, etc.,
demonstrating its business value in providing convenience, improving efficiency and control processes; in logistics,
the combination of AI and AGVs has further contributed to flexible robot dispatching, making it possible to adjust
capacity at any time according to on-site status; in retail, AI+Hik-Cloud empowers enterprises to carry out intelligent
remote store inspections and create a monitoring system for cleaner kitchens so as to manage closely with greater
efficiency.
In the past year, Hikvision has cooperated with more than 1,000 ecological partners and jointly developed more
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than 13,000 intelligent applications. We will work with partners to continue to advance the digitalization process
for various industries.
(3) Achieve closed-loop business management through the Huipin Application Empowerment Platform
Based on the unified software technology architecture and in accordance with the design concept of “intelligent
applications by putting modules together”, Hikvision has learned from successful digitalization practices in various
industries to build the Huipin Application Empowerment Platform, providing users with out-of-the-box modular
component services and using low-code technology engines to facilitate rapid innovation of applications.
Based on low code engines and the componentization technology, the Huipin Application Empowerment
Platform can be used to implement digital business applications quickly and conveniently. Take the inspection
engine as an example. In 2021, it provided extensive services to thousands of users in energy, finance,
manufacturing, construction, education and other industries, constructing applications such as property inspection,
equipment inspection and production line inspection, and driving the implementation of value-creating businesses.
Using IoT middle platform capabilities, the platform has realized comprehensive perception of elements in parks
and enabled closed-loop management for production safety, park management, equipment and facilities, personnel
management, emergency operation, auxiliary for centralized control, data map walls, achieved digitalization
empowerment across all business scenarios, and built an agile operation system for parks. So far, the Huipin
Application Empowerment Platform has achieved the fully quantified implementation of applications for multiple
users including Langjiu Group, Xi 'an Electronic Technology University and Guoneng Shouguang Power Plant.
The Huipin Application Empowerment Platform can serve users from various industries such as enterprise
parks, chemical industrial parks, campus scenic spots and industrial parks. Under the scenario of equipment and
facilities management in enterprise parks, for example, low-code engine capabilities including processes, work
orders and report forms are fused into equipment lifecycle management covering spot inspection, repair,
maintenance, scrap, spare parts and ledgers, enabling the equipment management department to effectively
standardize business processes and improve the efficiency of equipment quality management. Under the scenario
of daily inspection of industrial parks, inspection engine is applied, where offline and online integration, AI-assisted
automatic inspection and other methods are adopted to form a closed business loop from inspection plan execution
to rectification and optimization, enabling the operation and maintenance department of the park to raise inspection
quality and efficiency and guard against security risks. Under the scenario of directing operation of chemical
industrial parks, a new UI is built for the digital world based on low-code engine capabilities, which has reshaped
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the interactive management experience by enriching it with multi-screen interaction, interaction between the virtual
world and the real world, data analysis, remote command and other capabilities, thereby providing managers with
a panoramic view of the overall situation as well as insight into the details.
Addressing the challenges faced by parks with constantly updated technologies and ideas, the Huipin
Application Empowerment Platform incorporates all kinds of new digital technologies to provide overall solutions
for the construction of intelligent parks. As a firm believer in openness and integration, Hikvision cooperates closely
with partners to jointly empower users to achieve digital transformation and continues to create value.
(4) Provide segmented scenario-based applications through the Hik-Cloud enterprise-level SaaS service
Utilizing such technologies as AIoT, the mobile Internet and AI, Hik-Cloud focuses on intelligent store systems,
intelligent community business, intelligent logistics services and digital management of schools with more
segmented scenario-based applications, while continuing to expand business in new scenarios such as intelligent
construction site management and intelligent agricultural IoT.
For example, Hik-Cloud is combined with AI to provide closed-loop applications for intelligent cashier risk
identification, traceability and statistics in chain stores, thereby increasing management efficiency. In K12 schools，
Hik-Cloud bridges the communication gap between parents and school, through Education Digital Signage, a multi-
scenario interactive terminal, and helps build an intelligent campus. In residential real estate, Hik-Cloud serves to
normalize community epidemic prevention by rapidly launching the “temperature measurement and health code
checking for entrance control” program boasting digital traceability of “one person, individual temperature and
individual code”, enabling communities to carry out epidemic prevention more efficiently. Hik-Cloud also continues
to serve customers in logistics, construction, agriculture and other chain industries with a steady stream of digital
solutions of connectivity, management, intelligence and insight.
In 2021, the number of Hik-Cloud users and access devices continue to grow rapidly. Hik-Cloud has been
applied to more than 40,000 offices, 280,000 retail stores and 600,000 logistics nodes, serving 4.16 million
community home owners and 3.5 million parents of students, and accessed by 2.5 million devices. With a focus on
various fields such as enterprise-level SaaS digital marketing and content operation, Hik-Cloud will continue to
create new business value for industry users.
4.2.3 Value Fullfillment
Parks are cities in miniature, spaces for industrial development and key bases for digital transformation, which
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is why the digital operation of parks and the operation, maintenance and management of equipment and facilities
have become focus areas in the digital transformation of enterprises. Based on a value system centered on
“shortening management distance, improving business efficiency, regulating operation behaviors and preventing
safety risks” and a value delivery methodology covering “vision setting, value matching and value fulfillment”,
Hikvision has been exploring, practicing and summarizing its applications in various park-like settings such as
enterprise parks, industrial parks, chemical industrial parks, business parks, campuses, hospitals, scenic spots and
venues. The result is a digital approach for intelligent parks combining “a security closed loop from the entry and
exit of people and vehicles to overall management, a logistics closed loop from service delivery to feedback on
results, a safe production closed loop from manpower, machine, material and environment to event handling, an
equipment management closed loop from point inspection to work order management, and an auxiliary control
closed loop from the command center to emergency response”, empowering more partners to forge the path to
digital transformation.
(1) Create a security closed loop from the entry and exit of people and vehicles to tracking
Hikvision is committed to building new digital intelligent parks, constantly expanding the security business
boundary, extending the management scope from local management to global management, and transforming the
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management method from governance by people to digital governance. A security closed loop from the entry and
exit of people and vehicles to tracking based on the comprehensive perception of personnel, vehicles, perimeter and
other elements has been created and implemented for multiple users including Langjiu Group.
In industrial parks, with people and vehicles as key management objectives, a park operation management
system with a panoramic view and a controllable process is built to manage personnel, vehicles, visitors and others.
Thanks to the B-visual Engine, a digital board is set up to display details of park operation in real time.
In logistics parks, a multi-dimensional system for crime prevention and control centering around people,
vehicles, goods and warehouses is built in such scenarios as warehouses, freight yards, platforms and roads in the
park. At the same time, it is connected to the scheduling system to realize the full control of vehicle entry and exit
and intelligent guidance of platform scheduling, thus improving the utilization rate of platforms in the park by more
than 50%.
In chemical industrial parks, a park supervision system characterized by intelligent prevention and scientific
control is built on “prevention, management and control” as its core focus. Digital applications such as the
management of vehicles carrying hazardous chemicals and closed park management have been implemented to
achieve whole-process control of vehicles carrying hazardous chemicals from booking, waiting for inspection,
guiding them into storage, queuing and paying fees.
In hospitals, an efficient, reliable, intelligent, visualized and multi-directional personnel management and
control system is built for access control and intelligent security check. The health code system, the hospital
information system (HIS), inpatient management and other systems are interconnected to facilitate security check
and identity verification, providing strong support for hospital security work.
(2) Create a logistics closed loop from service delivery to feedback on results
Hikvision focuses on enterprise operations and services, providing green and efficient conference management,
comfortable and convenient canteen management, safe and energy-saving dormitory management, easy and flexible
information release, and smooth, high-end smart showrooms. A logistics closed loop from service delivery to
feedback on results, which is established to improve operation and management efficiency and user experience, has
already been put into practice by Xidian University and other users.
In Campus, a smart campus security system integrating management, prevention and control has been created
to achieve intelligent management of restaurants, dormitories, attendance, meetings, information announcement and
other services, incorporating data from the campus information network to provide convenient and high-quality
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campus services for teachers and students.
Aimed at improving the service level at venues, an intelligent large screen and a query and guidance system
are built to broadcast event information repeatedly in rotation and perceive the information about the latest events
in advance. At the same time, it is inter-connected with the ticketing system to guide the audience to quickly check
seat information and the recommended routes through information release, thereby improving the service level.
In enterprise parks, based on the dormitory management platform and smart locks, Hikvision provides
dormitory supervisors and residents with information-based management capabilities, making room status visible
and allowing for intelligent and convenient room allocation, quick and convenient asset repair reports, precise access
control, accurate dormitory statistics, and meticulous expense settlement.
An energy consumption management system featuring intelligent identification and active response is created
to support device running detection, production energy efficiency analysis, energy waste supervision, energy
consumption data display and other functions, so as to increase energy consumption management efficiency and
continuously optimize energy performance. As show in our user cases, total energy consumption can be reduced by
roughly 1% to 3%.
(3) Create a safe production closed loop from manpower, machine, material and environment to event
handling
Based on the perception of elements in the production process, Hikvision establishes a safety management
system to ensure safe and stable production. Utilizing the full-stack spectral perceptive technology and AI
engineering capabilities, a management closed loop boasting real-time monitoring, intelligent identification, linkage
disposal and event archiving is targeting on key production factors such as personnel, equipment and environment,
so as to eliminate potential safety hazards in time and ensure normal and orderly production. This has been
implemented by multiple users including Anshan Iron and Steel Group Corporation (Ansteel Group).
In coal mining enterprises, with the goal of “identifying hidden dangers and creating closed loops” in mind,
we build an “intelligent and complete visualized AI security control system” combining videos and AI to achieve
closed-loop management (ranging from hazard identification to security control) of ten production factors including
manpower, vehicles, materials and environments, offering underground miners a 24-hour “safety net”.
Centering on construction work site safety, a safety control mechanism featuring “project-enterprise synergy
and intensive supervision” is established at the site to provide intelligent monitoring of equipment running status,
early warning of potential risks related to personnel and operation, and traceability of key construction processes.
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Real-time on-site data are gathered to assist the refined management of projects and help enterprises with intensive
management.
In iron and steel enterprises, focusing on the goal of “intelligent manufacturing and intelligent safety
management”, online diagnosis of thermal faults, online monitoring of running and leaking, online supervision of
crane operation, belt abnormality detection and other functions have been realized in the material plant as well as
sintering, coking, iron-making and steelmaking processes, as a way to lower the risk of production accidents and
ensure stable operation.
At gas stations, real-time intelligent analysis is conducted on personnel, vehicles and materials, and a safety
operation control system is created to implement more than 20 intelligent applications such as oil unloading status
identification, oil stabilization time detection, operator detection and safety precautions detection, thereby
improving the efficiency of safety control and ensure the safe operation of gas stations.
(4) Create an equipment management closed loop from point inspection to work order management
With a focus on the utilization efficiency of equipment and facilities, which are the core assets of enterprises,
Hikvision facilitates the transformation of equipment and facilities management from general operation and
maintenance to intelligent operation and maintenance through management and predictive maintenance, and creates
an equipment management closed loop from point inspection to work order management. This has been put into
practice by Guoneng Shouguang Power Plant and other users.
In power plants, the intelligent inspection robot, infrared temperature measurement and other intelligent
perceptive terminals form a real-time perception network, contributing to closed-loop performance of inspection
tasks from planning, execution, review to analysis in the operation and maintenance of key equipment assets such
as coal handling equipment, steam engines and boilers, and resulting in a greater efficiency of equipment
management and defect management.
In intelligent manufacturing bases, combined with the intelligent inspection, an equipment inspection report is
generated with the equipment operating status information collected by the front-end perceptive device. An
equipment management ledger is thus formed, and a full-cycle equipment management system covering installation,
operation, maintenance and scrapping is created to assist decision-making concerning equipment operation and
maintenance.
In liquor-making enterprises, we focus on the status and hazard analysis of such core production equipment as
packaging lines, boilers, water devices and desulfurizers and cover the entire lifecycle of equipment and facilities
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from pre-shift inspection, daily inspection, warranty servicing, routine maintenance to asset inventory, with the
purpose of promoting equipment management execution, standardizing business processes and substantially raise
the overall efficiency of equipment.
In metal smelters, thermal-imaging cameras, orbit robots, environmental sensors and other devices can be
connected through IoT gateways to realize online monitoring of equipment abnormalities, real-time warnings,
maintenance task assignment and other functions, in hope of “putting safety first and increasing both quality and
efficiency”.
(5) Create an auxiliary control closed loop from the command center to emergency response
Hikvision helps enterprises build AIoT perceptive systems with enriching full-scale total data on all factors,
effectively enhancing their ability to prevent and respond to emergencies. Real-time closed-loop business handling
is achieved in such business areas as fire management, park inspection and situation analysis. Through free
viewpoint, augmented reality (AR), data cockpit and other applications, an auxiliary control system featuring multi-
dimensional presentation and three-dimensional visualization has been created for closed-loop auxiliary control
from the command center to emergency response, and implemented by Robam and other users.
In iron and steel enterprises, a free viewpoint stitching together images taken by multiple cameras is
constructed to panoramically monitor the process of iron and scrap conversion of converters in production settings,
and the ladle hook is displayed through picture-in-picture with a low-latency camera to remotely control crane
operation and reduce the risk of personnel working on-site.
In manufacturers, a digital AR workshop, the most intuitive way to present production status, is connected to
an Manufacturing Execution System (MES) to obtain equipment and facilities information and material information,
which is then integrated with an AR real map to build a digital twin of the production scene, thereby assisting in
making management decisions and enhancing production efficiency through digital means.
In pharmaceutical enterprises, centering on the concept of “multi-dimensional perception, data sharing and
business linkage”, we build an agile operation command center, which uses big data technologies to mine the IoT
perceptive data and present the overall situation of production parks and achieve visualized command and
scheduling based on 3D maps and real-scene command applications.
In hydroelectric power station, the communication platform and the business system are inter-connected and
integrated to create a “agile, well-coordinated, orderly and unified” emergency command system, which will
provide dynamic risk monitoring and early warning based on the intelligent perception network and support decision
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making with data intelligence through data sharing and fusion.
As digital transformation continues to bring new development and business opportunities, Hikvision focuses
on the continuous innovation of AIoT and relies on the capabilities of its products and solutions system to create an
open, co-built and win-win ecosystem that empowers partners to grow together and facilitates digital transformation
for users.
4.3 SME Business Group (SMBG): Enhance the Digital Transformation Service Capability of the Whole
Industry and Improve the Generic-Security Industrial Internet
4.3.1 Overview
Small and medium-sized enterprises (SMEs) are an important part of the national economy. The interwoven
pressures and forces of epidemic control, economic fluctuations, policy guidance and technological iteration are
encouraging SMEs to seek change in adversity and accelerate digital transformation and upgrading. As estimated
by iResearch, the market size of digital upgrade services for SMEs will reach 330 billion RMB in 2022, with huge
market potential. For SMEs, to engage in digital transformation is essentially to improve the efficiency of production
and operation. SME users require generic-security IoT devices to connect various scenarios and lay a data
foundation as well as timely and effective services that fit the business. Despite constantly emerging digital demands,
the project contractors that provide products and services for SMEs are inefficient in reaching users and obtaining
business opportunities, and the cost of project implementation, operation and maintenance, and management
remains high. Therefore, the project contractors face an increasingly urgent demand to sharpen their digital
marketing capability. As a result, the market is in need of an industrial platform with a wide-ranging influence to
link the vast number of channels, project contractors and SMEs, enable digital marketing, and better meet the
demands for digital transformation of customers and users.
Working with general practitioners and drawing on technological elements such as big data and AIoT,
Hikvision integrates industrial chain resources, empowers channel customers, project contractors and ecological
partners, offers standardized services, builds an open and interconnected generic-security industrial platform, and
develops intelligent omni-scenario IoT solutions, all in hopes of driving digital transformation and upgrading for
SMEs.
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4.3.2 Core Technology: Mutual Promotion Between Online and Offline Channels Driven by Hikvision
Interconnectivity and Hikvision SMBG E-commerce
The product matrix of the generic-security industrial Internet created by Hikvision is comprised of two
mainline platforms: SMBG-SII HikLink and Hikvision SMBG E-commerce, which provide a channel digitalization
platform, a project contractor workbench, an SME service platform and an open platform for ecological cooperation
that serve channel customers, project contractors and SME users. Based on the infrastructure capacity of Hikvision
and the marketing network of partners, an empowerment platform is built to adapt to the traditional industrial
structure.
SMBG-SII HikLink: It creates a service platform for SME users, integrating the capabilities in device
management, solution applications, cloud-edge fusion, content purchase guide, value-added services and etc. to
provide one-stop scenario-specific solutions. The platform can access video, access control, intercom, fire protection,
transmission and other major categories of products, including nearly 10,000 SKUs, linked to millions of equipment;
the platform builds SaaS solution packages around communities, offices, stores, factory parks and other scenarios,
and increases business value through subscription services; based on SMBG-SII HikLink, the Company has derived
an open platform for ecological cooperation, drawing on the strength of ecological partners to achieve the expansion
of solutions in vertical segments and horizontal business fields. The SMBG-SII HikLink Project Contractor Platform
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provides equipment management, project management, and tool & service capabilities to accumulate project data,
improve the business efficiency of project contractors, and help them increase revenue in the long term.
Hikvision SMBG E-commerce: It provides channel customers with a digital platform that empowers the vast
number of security practitioners and integrates supply chain empowerment, marketing empowerment, tool provision
and service operation to create a marketing service system, enable industrial chain digitalization, and move business
online; the platform relies on digital marketing tools to enable employees and users to be online, accumulate and
analyze business data assets, and support decisions with data.
The SMBG-SII HikLink and Hikvision SMBG E-commerce platforms are mutually supportive and spirally
driven to help channel customers excel in digital supply chain and digital marketing and enable project contactors
to efficiently manage equipment and projects, enhance professional capabilities and serve users efficiently, thereby
creating one-stop preferred products and services defined by omni-channel, whole-process and omni-scenario
offering for SMEs.
4.3.3 Value Fulfillment
(1) Build a generic-security industrial platform
Hikvision provides a working interface for project contractors and software and hardware service providers to
assist in equipment management, efficiency improvement, business operation and service professionalism
enhancement, and combines its strengths with those of its partners and sharpens its competitive edge through
ecological cooperation to better empower the industry. SMBG-SII HikLink has further expanded its client coverage,
supports access and control of all kinds of intelligent devices with an open architecture, and enables out-of-the-box
third-party business plug-ins in a component-based development mode, providing users with multi-scenario options
and realizing data visualization and flexible use of multiple terminals. Hikvision continues to extend the product
line, providing channel customers and SME users with one-stop procurement, embrace a wider range of professional
generic-security channels for a two-wheel drive composed of high quality channels and high quality products, and
establish localized channels to provide products and services with better qualities for localized markets. The
Company works with channel customers to build a localized service ecosystem, provide inclusive AIOT capabilities
and applications for SMEs, improve whole-process service before/during/after sales, and promote subscription-
based value-added services, thereby facilitating the implementation and service upgrading of one-stop intelligent
security.
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(2) Promote channel digitalization
Hikvision’s channel digitalization for SMEs focuses on digital supply chain and digital marketing.
In terms of digital supply chain, Hikvision opens up transaction links between the Company’s production,
channel customers, contractors and SME users to integrate purchasing and marketing. At present, nearly ten beehive
logistics centers have been built nationwide to move the whole process from order to delivery online, reduce cost
and prevent loss, release the energy of channel customers, and focus on improving marketing capability; fully online
management of purchase, sale and inventory data is achieved to help increase the efficiency of inventory
management; the intelligent goods sorting capacity is enhanced to ensure sorting efficiency during periods of tight
supply; the intelligent prediction/channel business intelligent (BI) system is enhanced for greater prediction
accuracy and a stronger approach to data management.
In terms of digital marketing, Hikvision builds digital stores to enhance overall competitiveness and brand
influence. The store image and system are upgraded with modular display and application scenario expansion to
elevate in-store user experience, and an information-based system is introduced to manage information and store
inspection tours, laying a foundation for digital operation. The Company has strengthened integrated marketing,
successfully communicated the value of key products and programs, and significantly increased omni-channel
exposure; it has helped launching hundreds of online marketing events in epidemic-stricken areas, empowering
more than 100,000 security professionals to improve their professional and marketing capabilities; it pushes forward
the creation of digital marketing platforms, helps customers realize the digitalization of whole-chain, multi-channel
marketing, and facilitates the digitalized management of business opportunities, customers and assets.
Looking to the future, SMBG will continue to work with channel customers, project contractors and ecological
partners to create a new vision of intelligent security, help enable the digital transformation of SME users, build the
Internet of Things, and open up more possibilities.
4.4 International Business: Continue to Build a Global Marketing Network and Optimize the Channel and
Industry Layout Step by Step
4.4.1 Overview
Starting from its initial foreign trade model, Hikvision’s international business has gradually evolved to build
regional centers for localized sales, and now it has established sales and service channels all over the world, and
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ushered in the stage of localized marketing based on the “one country, one strategy” tactic. By 2021, the Company
has set up 66 branches in the international market as well as Hong Kong, Macao and Taiwan, providing localized
services in more than 150 countries and regions.
In the international market, Hikvision focuses on channel product sales while actively expanding into vertical
markets, covering a wide range of industries including transportation, education, retail, logistics, health care, energy
and manufacturing, to provide customers and users with products and integrated solutions. In addition to
continuously developing the video business, the Company offers non-video products with a rich set of features, such
as access control, alarms, intercoms as well as security and AIoT management software, to cater to different
application scenarios. Meanwhile, AI-based applications and solutions are being applied in more and more countries
and regions and continuing to deliver business value to users.
In recent years, geopolitical issues and the global epidemic have brought many challenges and uncertainties to
business development. Facing such complicated external environment, the Company focuses on meeting the
demands of customers and users, designing and developing suitable products and solutions, strengthening the supply
chain system, improving and optimizing internal operations, and ensuring the effective operation of local services
and local businesses. Although some countries and regions are affected by force majeure, the international business
as a whole is still progressing steadily.
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4.4.2 Core Technologies: Lay a Sound and Solid Technological Foundation and Create a Targeted Research
and Development System
Hikvision perseveres in technological innovation and proceeds from industry needs to expand the Company’s
technological boundaries. Based on the overall technological basis of the Company, a unique product and
technology system in line with the international business strategy and market demand has been formed for the
international business. The Company provides users with products and solutions suitable for different application
scenarios with solid product capabilities, sophisticated AI algorithms, various multi-dimensional perspective
technologies and diverse fusion applications.
(1) High-resolution image technology
Products with a strong competitive edge are one of the most important factors for customers and users to choose
a brand in the international market. Hikvision integrates visible light, infrared and other image perceptive
technologies to produce clear images and capture details throughout the day in all weather conditions. Using high-
performance sensors and ISP (Image Signal Processing) technologies, the Company continues to explore camera
imaging technology at night and in complete darkness with no light, and has developed a series of devices that tailor
to different scenarios and applications, such as“ColorVu ” camera series, and “DarkFighter X” series featuring bi-
spectrum imaging, which are very popular in the international market. In addition, 4K Ultra HD, multi-lens seamless
image stitching, high magnification zoom lenses and other technologies enable users to broaden their horizons and
achieve HD preview and playback.
(2) Extensive application of artificial intelligence
The value of artificial intelligence (AI) as one of the basic technologies reshaping the security industry is
increasingly recognized by industry users in the international market who have started to put it into extensive use.
According to the application demands, development stages and policy differences concerning AI in different
countries and regions, Hikvision has launched intelligent product series based on deep learning algorithms, such as
DeepInview, DeepinMind and AcuSense. These products have been applied in the international market to help users
discover new uses of AI in various scenarios such as target detection, target recognition, perimeter alarm, passenger
flow statistical analysis, queuing detection, safety helmet detection and license plate recognition etc., ensuring
efficiency and safety for users while creating more business value.
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(3) Rich multi-dimensional perception
Combining visual perception with the multi-dimensional perceptive technology, Hikvision is constantly
expanding the scope of global perception through high-precision radar, audio, temperature measurement and etc,
based on which the Company has launched the radar-assisted camera, the radar-assisted PTZ dome camera, visual
intercoms, thermal imaging cameras and other products, combining multi-dimensional perception with traditional
video to offer a more complete perception capability and provide users with a more comprehensive reference for
decision-making. At the same time, the Company has further introduced access control, alarms, interactive screens
and other product lines into the international market, released non-video systems including “MinMoe” smart access
control and AX PRO, combining with video applications, to constantly enrich the application scenarios of physical
security from various dimensions.
(4) Diverse integrated applications
As the security industry continues to change and develop, the integration of different technologies and systems
is being widely used to effectively address practical user problems. The Company integrates video applications and
non-video applications, such as access control, alarms, fire prevention and emergency management, into a unified
management platform, and has successively launched HikCentral series platform management software that meets
the demands of different scenarios. Through diversified integrated applications, the Company fully satisfies the
business needs of integrated security systems. In the meantime, Hikvision also provides multi-business system
integrated solutions, integrating security systems with various enterprise information systems (such as human
resources, finance, inventory, logistics systems, etc.) to break down information silos, strengthen collaboration
between systems, and equip users with more comprehensive data and analysis to support decision-making.
4.4.3 Value Fulfillment
Oriented by user value, Hikvision has refined complete solutions that match different business needs and
continues to provide in-depth localized services, striving to create value for customers and users.
(1) Enable SMEs to upgrade management
With the progress of intelligent technologies, the demand of SMEs for security is no longer limited to video
recording; instead, they are further pursuing more intelligent applications, images with higher quality, and remote
access and management at anytime and anywhere. Hikvision has launched a series of solutions targeting SME
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scenarios, integrating advanced intelligent applications, the high-definition image technology, cloud management
and rich product lines to ensure the safety of personnel and property, enhance the efficiency of business operations,
and help SMEs to upgrade their security systems.
(2) Facilitate digital transformation of enterprises
Driven by user value, Hikvision provides AIoT industrial solutions to automate enterprise workflows and
procedures, and collaborates with ecological partners to create best practices for industrial digital transformation,
boosting the development of energy, logistics, manufacturing, retail, education, health care and other industries. For
example, in the logistics industry, we help users to ensure transportation safety, lower transport costs and improve
transport efficiency and quality; in education, we help promote ubiquitous access to education through synchronous
classroom teaching.
(3) Promote extensive ecological cooperation
Together with ecological partners, Hikvision provides customers and users with more diversified products and
solutions in the security industry and more cross-industry fields. The Company provides open capability for
hardware devices based on the HEOP architecture to run algorithms of partner manufacturers, thereby meeting the
practical needs of users in different scenarios and applications. At the same time, the Company opens its platform
software integration capabilities to partners and collaborates with other application systems to enable users to
manage more comprehensively and efficiently.
(4) Contribute to the harmonious development of society
Hikvision is committed to making contributions to improving social security and the ecological environment
through technological innovation and enhancing incident warning and safety protection capabilities. For example,
safety risks in the production process can be lowered through the application of safety helmet detection and
personnel off-duty detection; based on the high-precision radar and video fusion technology, real-time road
conditions can be predicted effectively to reduce traffic accidents. In addition, the company implements
environmental protection requirements in its daily operation and production, actively responds to the call for low-
carbon development, practices green manufacturing and fulfills corporate social responsibility.
Hikvision continues to improve the global marketing service network and remains committed to more timely
and efficiently response to customer and user needs. In addition to branches located globally, Hikvision has
established research and development centers in Canada, the U.K. and other places to design and develop products
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and solutions tailored to local needs at a faster pace. The company has also built a number of overseas manufacturing
bases and regional logistics centers, which cover trans-regional distribution while ensuring product delivery capacity.
In addition, Hikvision has set up a number of call centers around the world and after-sales service outlets in more
than 70 countries, providing customers and users with timely and excellent after-sales service.
Hikvision will continue to intensively explore the international market, utilize cutting-edge perception
technologies and intelligent applications to provide customers and users with high-quality products and solutions as
well as exceptional localized services, so as to better meet market demands and become a reliable technological
partner for customers and users.
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 EZVIZ Network, HikRobot,
HikMicro, HikAuto, HikSemi, HikFire, Rayin and HikImaging. The solid 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
EZVIZ Network is committed to becoming a reliable provider of smart home services and IoT Cloud Platform.
For consumers in smart home scenarios, EZVIZ Network possesses whole-chain capabilities covering the design,
R&D, productions, sales, operation and technical services of smart home products. Alongside with signature
products including smart home cameras, smart home entry, smart control, and smart service robots, it also provides
value-added services such as cloud storage, phone reminders, screen abnormal detection, intelligent recognition,
and crying detection. For industrial consumers, EZVIZ Network offers open cloud platform services, including
product intelligence solutions and software development technologies and tools. With such services, it assists
traditional manufacturing clients with the intelligent upgrade of products, and help solution clients to develop
solutions for complex scenarios.
As of the end of December 2021, 159 million IoT devices were connected to the EZVIZ IoT Cloud Platform,
with the number of connected video IoT devices remains the leading position in China. The number of users of the
EZVIZ IoT Cloud Platform recorded over 90 million, including over 35 million monthly active users; EZVIZ
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Network Cloud Video application had more than 1.5 million average monthly paying users, and more than 200,000
registered domestic and overseas industrial clients at EZVIZ IoT open platform.
5.1.1 Core Technologies
Adhering to independent technological innovation, EZVIZ Network independently owns core technologies and
responds rapidly to user demands, having thus established a mature and proven technology R&D management
system. A great deal of technology R&D has been undertaken surrounding cloud platform construction, visual and
audio AI technology, and product intelligence. EZVIZ Network is among the first in China to develop a video IoT
Cloud Platform – the EZVIZ IoT Cloud Platform – and to independently establish an infrastructure for the IoT era.
Smart home products: EZVIZ Network works on the intelligent upgrade and transformation of all kinds of
household equipment, focusing on integrating intelligent technology into products. In specific, general-purpose
intelligent technologies are centered on equipment’s universal capabilities, such as interconnectivity and
interoperability, wireless communication and visual interaction, with the constant iteration of codec and
transmission technology, wireless communication technology, intelligent interconnection technology,
comprehensive low-power technology, multi-dimensional perception technology, differential and modular IoT
device upgrade technology, adaptive image delivery technology, multi-lens computing visual technology, fog
computing application and other technologies; special-purpose intelligent technologies are developed around the
four smart home product categories identified by the Company, including camera adaptation to home environment
technology, smart lock structure and smart application technology, sensor-controlled equipment capacity expansion
technology, and robot control and application technology, etc.
IoT Cloud Platform: Oriented for cloud infrastructure, IoT access, operation & maintenance assurance, and
service middle platform, EZVIZ Network independently develops cloud infrastructure technology, IoT access
technology, multimedia technology, cloud security technology, cloud platform operation & maintenance assurance
technology, application development technology, platform messaging technology and many other core technologies
required for the construction of cloud platform. An IoT Cloud Platform featuring access of hundreds of millions of
devices, all-time operation & maintenance, real-time security protection, and high-bandwidth traffic has been
constructed upon public cloud using the above technologies. Meanwhile, based on the AI computing framework of
the cloud platform, the Company concentrates on the development of visual and audio AI algorithms, and has
acquired video codec optimization technology, video detection and classification technology, video recognition
technology, audio processing technology, audio analysis technology and other core algorithm technologies, thereby
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developing the intelligent analysis capabilities of middle platform. Also, it owns holistic platform-based capabilities
for various IoT devices, which range from access, encryption, forwarding, to storage and intelligent analysis,
providing consumers with value-added services and industrial clients with open platform services.
EZVIZ Network has produced a number of scientific research findings in the fields of cloud platform
construction technology, visual and audio AI algorithm technology, and product intelligence technology. The
Company had more than 50 authorized invention patents by the end of December 2021.
5.1.2 Major Products and Services
For consumers, EZVIZ Network's smart home products and services, based on the long-standing expertise in
visual and audio AI technology and product intelligence technology, focus on exploring visual interactions, resulting
in four featured product lines of smart home cameras, smart home entry, smart control and smart service robots, as
well as diverse ecosystem products such as smart water purifier, smart fresh air system, smart wristband, and smart
pet feeder. On the basis of smart home products, EZVIZ Network provides consumers with cloud storage, phone
reminders, voice assistants, screen abnormal detection, intelligent identification, key escrow and other value-added
services tailored for home or home-like scenarios, thanks to its robust IoT Cloud Platform capabilities. With the
above product and cloud services, EZVIZ Network now offers whole-house intelligence solutions to users in
household scenarios, covering home security, home access security, emotional care, comfortable environment, and
interaction etc. Based on value-added services, EZVIZ Network has established an algorithm store for the flexible
deployment of AI algorithms on smart home devices, allowing consumers to choose AI algorithms and develop
customized solutions.
Smart Home Cameras (SHC): In 2021 EZVIZ Network continued to innovate on hardware and software,
and launched a 2K smart home camera with hyper-comprehension capability that supports the algorithm store.
Consumers may select AI algorithms in the store and dynamically load them via smart home products, meeting their
own differentiated demands in smart home scenarios. The Company has leveraged its powerful AI algorithm
capabilities and EZVIZ IoT Cloud Platform’s global services to upgrade the cameras from “being able to see” to
“being able to understand.” Through algorithm innovation, it has given birth to diversified services such as
intelligent identification, irregularity detection, baby/pet care, and elderly care etc. Meanwhile, to meet users’
personalized demand, EZVIZ Network has launched C8PF dual-lens pan-tilt-zoom camera, BC2 battery-powered
camera, BM1 baby camera, and C6WI 4K extra-high-definition camera, among others.
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Smart home entry: EZVIZ integrates emerging technologies into products such as smart door locks, smart
visualized door viewer and smart visualized doorbells, to upgrade their technologies and functions. In April 2021,
the Company released DL31FVS, the first face recognition smart lock with dual-lens 3D structured light
technologies. It has been greatly improved in safety and environmental universality, and won the Outstanding
Technological Innovation Award from Tech G. In the same period, the DP2S smart door viewer was launched,
featuring face recognition, water-proof, and large screen, the product is designed to meet the needs of users who
pursue a premium lifestyle, and was honored the 2021Award for Recommended Product by Zol.com.cn.
Smart control: It mainly includes smart sensors, smart display, smart central control, and whole-house
wireless coverage solutions for smart home scenarios. In particular, the whole-house wireless solutions, primarily
composed of wireless AP and AC controllers, provide stable, high-speed and complete wireless network coverage
both indoors and outdoors for smart home products and home users. The whole-house wireless coverage series
products are the Company’s cornerstone in the field of smart home, as well as a new start for EZVIZ Network to
establish presence in the wireless network products market.
Smart service robots: EZVIZ Network has developed a robot product line to address the diversified demands
of consumers in smart home scenarios, including smart companion robots and smart robot vacuums. In March 2021,
EZVIZ Network launched RK2, an intelligent companion robots for kids that supports remote video control,
intelligent voice chatting, two-way video calling and other functions. Equipped with intelligent applications such as
face recognition, intelligent reminder, and picture book reading, the robot is able to think independently according
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to the results of face recognition, actively greet different family members and give tailored intelligent reminders. It
can also interact with and follow users leveraging body recognition and visual tracking technologies. The robot
vacuum RS1N released concurrently, featuring separated dToF9 LiDAR for accurate mapping and positioning, and
offers multiple functions such as area division, no-cleaning area setting, smart path planning, automatic charging,
and fixed-point cleaning. Moreover, the product is equipped with a ToF 3D imaging camera and a 720P HD camera,
both on the course direction, to enable visualized housekeeping in addition to cleaning and sweeping.
For industrial clients, EZVIZ Network is committed to providing product intelligence solutions and
technologies and tools for application development. Based on EZVIZ IoT Cloud Platform’s holistic middle-platform
service capabilities, it intends to increase the openness of cloud platform. For product-oriented clients in need of
intelligent transformation, EZVIZ Network has launched an Open IoT Platform to provide solutions for product
intelligence and cloud service application, which helps clients easily make their products networked, digital, and
intelligent; for application-oriented clients’ demand for application development in complex scenarios, the
Company has created an Open Software Platform, which provides clients with APIs, SDKs, SaaS components and
SaaS boosters to develop SaaS-layer applications, thereby helping them to form tailored solutions under complex
scenarios.
9 dToF: direct Time of Fly. That is to measure the distance from the object by measuring the time it takes for the reflected light to
return after emitting a short pulse of light.
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According to the statistics by the iResearch mobile big data platform, among all smart home applications the
EZVIZ Cloud Video Application’s number of monthly active users ranks among the top two in the industry.
iResearch’s data also shows, in 2020 the worldwide shipment of household cameras was 88.89 million, while
EZVIZ Network's smart home camera shipment was approximately 12.79 million, accounting for approximately
14.39% global market share, leading in the global market. Its smart door viewer has ranked top one in the brand
ranking of Access Control/Door Viewer on 11.11 Global Shopping Festival, 618 Shopping Festival, and other online
shopping festivals on Tmall for many consecutive years; smart door lock has also ranked among the top ten in the
category of electronic door locks on November 11, June 18 and other online shopping festivals on Tmall for many
times, and climbed to the top three at the June 18 shopping festival on Tmall in 2021. EZVIZ Network’s smart
control, smart service robots and other innovative smart home products are also expanding their presence: its
companion robot for kids ranked among the top ten of the children's robot category on Tmall at the June 18 shopping
festival in 2021.
In the sector of IoT Cloud Platform, as of the end of December 2021, 159 million IoT devices were connected
to the EZVIZ IoT Cloud Platform, with the number of connected video IoT devices remains leading in China.
5.1.3 Outlook
EZVIZ Network adheres to the IoT Cloud Platform as its business foundation, and visual technology as its
core feature. Dedicated to the smart home industry and the IoT Cloud Platform industry, it aspires to become a
reliable provider of smart home services and IoT Cloud Platform.
With the wide application of the IoT, cloud services and AI technologies to smart home scenarios, the smart
home industry is evolving from single smart products to an interconnected smart system, and is expected to upgrade
to human-centered personalized services, driven by the extensive application of privacy computing architecture and
AI algorithms. EZVIZ Network will insist on continuous investment in visual technology and cloud platform
technology, and continue to strengthen its own visual and audio AI capabilities. It aims to bring greater application
value to consumers and users through its core technical capabilities, by developing the video IoT into the visual IoT,
transforming the 2D image processing capability into the spatial information processing capability, and upgrading
from “able to see” to “able to understand” and from simple intelligence to advanced intelligence.
5.2 Innovative Business - HikRobot
Centered on technologies such as visual perception, AI and navigation control, relying on its solid algorithm
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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.
5.2.1 Mobile Robots: Focus on Intralogistics and Promote Intelligent Logistics of Factories
As a dedicated provider of mobile robot products and solutions, HikRobot continuously concentrates on
breakthroughs and upgrades in products and technologies, in a bid to improve efficiency of the entire process from
design and development to implementation and deployment, and create more value for users using technological
innovation. In 2021 the company released its new-generation AMR (Automatic Mobile Robot) architecture platform
– “Intelligent Base” and new hardware products based on this platform. Meanwhile, as required by business
development, product lines have been integrated into four new hardware products series, with the first generation
of low-code application development platform unveiled.
Four hardware product series
LMR (Latent Mobile Robot) series: As HikRobot’s signature product series, LMR is the first to apply the
modularization and componentization technologies of the new-generation “Intelligent Base” to new product
development, thus leading to higher safety standards and offering higher flexibility. With faster delivery and more
convenient operation and maintenance methods, it can efficiently respond to complex and scenario-based
requirements in reality. In 2021, HikRobot released the fourth-generation products Q7 and Q3, with greatly
improved intelligence features and enable easy deployment in more application scenarios.
CMR/HMR (Conveyor/Heavy-duty Mobile Robot) series: The CMR/HMR product line, focused on
industrial applications, aims to develop differentiated products to meet the demands of cargo tranship, cargo delivery,
heavy-duty handling, etc. In 2021, the series was further improved in performance, to meet the industry’s general
requirement for accuracy with a driving positioning accuracy of ±5mm and a docking accuracy of ±2mm; and to
meet safety requirements in the case of mixed traffic flows of people and vehicles with a 360-degree safety
protection scheme. HikRobot CMR/HMR product series is now widely used in the panel display and SMT
production lines in the 3C industry, lithium battery and photovoltaic production lines in the new energy industry, as
well as automaking, machinery manufacturing and other sectors.
FMR (Forklift Mobile Robot) series: Thanks to a new system architecture, FMR product series has been
improved in terms of storage capacity, efficiency, security, and scenario-based intelligent perception. HikRobot’s
independently-developed 3D SLAM laser navigation algorithm has simplified implementation and improved the
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rapid deployment capability of products without compromising positioning accuracy and reliability. Apart from
conventional omni-directional, stacking and handling forklifts, in 2021 the Company extended to two sub-series –
reach and counterbalance forklifts, with the maximum stacking height of over 5 meters.
CTU (Cargo Transport Unit) series: The entire CTU range has been upgraded based on a new structure,
aiming for diversified types, maximum storage capacity and optimal efficiency. The new cargo transport unit applies
to a wider range, available in three sub-series – small, medium and large; the actuator structure has been expanded
from clamping to lifting; the weight of the product is reduced by more than 20%, and the single-machine
productivity has greatly improved. The ST6 workstation independently developed by HikRobot features a floor area
that is only 20% of that of some competing products, and the overall operating efficiency of its system is greatly
boosted.
Software product series
The RCS (Robot Control System) independently developed by HikRobot features three systems – scheduling,
simulation and digital twin through the construction and combination of varied components. It is designed to instruct
more than 1,000 AMRs of different types and different navigation modes for collaborative work, realizing swarm
intelligence. The iWMS (intelligent Warehouse Management System), which is independently developed for
warehousing, is deeply engaged in core fields such as data fusion, human-computer interaction, service orchestration,
and algorithm services on the technology side, and adapts to the trends of industry-specific system and scenario-
based application on the service side. The purpose is to advance the intelligent logistics model of “goods to people”
towards “multi-industry, all-scenario, and full coverage.”
Solution development
Automotive industry: The AMR solutions for the automotive industry include a variety of software access
modes, multi-category AMR collaboration and scheduling, and multi-level caches, so as to adapt to different
material preparation models and determine different inbound and outbound strategies. Harnessing the underlying
open architecture of software platforms, it enables the smooth connection of production data, helping customers to
steadily achieve agile manufacturing and solidly promote lean management.
3C industry: HikRobot has developed and designed an array of AMR models, equipped with
iWMS/RCS/WCS (Warehouse Control System), as well as hoists, automatic doors and other equipment. Now it has
been applied to cell phone production, PCB processing and other typical whole-plant logistics scenarios in the 3C
sector, covering all stages of intralogistics such as material warehousing, material delivery, production and handling,
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and finished product warehousing. It is expected to realize unmanned, automated and intelligent material handling
throughout the plant.
New energy industry: HikRobot boasts highly standardized solutions for the photovoltaic and lithium battery
segments. In each key production stage, the combination schemes of LMR+CMR+FMR can help businesses save
labor costs and increase production capacity.
The mobile robot market is expected to maintain a rapid growth, as the demand for transformation and
upgrading continues in the conventional manufacturing industries, and the demand for automated logistics maintains
at a high level. In 2022, HikRobot plans to introduce AI applications in AMR’s perception, planning, control, and
collaboration, and leverage 3D vision and other perception technologies to enhance the autonomous capability of
AMR, striving to expand application scenarios and market presence. To empower partners, HikRobot will build an
industrial software platform in the field of AMR, so that partners will be able to more easily customize robots, more
rapidly tailor systems, and better serve end users.
5.2.2 Machine Vision: Focus on Industrial Perception and Drive Digital and Intelligent Production
As the core of industrial perception, 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 factories. It is also an integral
part of flexible and intelligent production. In 2021, HikRobot continued to enrich and optimize machine vision
products, and gradually extended from 2D vision to 3D vision, giving birth to three new product lines: 2D vision
product line, intelligent ID product line and 3D vision product line. In the meantime, it tried to cultivate a vision
application ecology centered on the Visual Master (VM) Algorithm Software Platform, and work with partners to
meet the application demands of fragmented industrial scenarios.
2D vision product line: HikRobot provides industrial customers with a holistic visual imaging and acquisition
solution that is centered on industrial cameras, and supported by industrial lens, industrial light sources and
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industrial capture cards. In 2021, based on the new FPGA platform architecture, HikRobot continued with
performance optimization and product expansion, and achieved comprehensive improvements in power
consumption control, image quality and transmission stability, resulting in two complete product series – the new
CS second-generation industrial camera and the CU universal camera. The CH high-speed and high-resolution
camera series was expanded to better meet high-end applications; and the 8K and 16K CL line scan cameras were
introduced, completing the CL line scan camera product layout from 2K to 16K. HikRobot has also developed a 25-
megapixel industrial lens series, which is adaptive to C-mount ultra HD image sensors. As for industrial light sources,
it joined hands with partners to design and develop a new series, as part of HikRobot’s light source product series
with consistent product family design and higher quality. Capture cards supporting CoaXPress, Cameralink, Gigabit
Ethernet, and USB3 interfaces have been developed; and FPGA processing, protocol optimization, driver layer
optimization and other technologies were used to boost transmission stability, reduce packet loss rate, and ease the
load on the post-processing end.
Intelligent ID product line: HikRobot provides the industry with an high-efficient and high-performance
intelligent processing platform, centered on vision algorithms, and focusing on open algorithm platforms and
general-purpose intelligent hardware products. In 2021, concerning vision algorithms, HikRobot thoroughly
optimized the AI algorithms for industrial applications, developed AI detection algorithms, unsupervised defect
detection algorithms, and ultra-high-resolution image analysis algorithms based on small samples, and increased
the application width and depth of vision algorithms. Concerning intelligent products, the open-architecture
algorithm platform VM4.0 was released. It is open from underlying modules to solutions, supports two-way
secondary development of algorithm layer and application layer, and adapts more efficiently and flexibly to highly
differentiated industrial scenarios and rapidly changing application development. HikRobot unveiled the 20-
megapixel deep learning enabled smart camera SC7000Pro, which supports AI applications of larger field of view
and higher precision. Concerning ID products, a number of compact high-speed smart code readers of ID2000 and
ID3000 series were unveiled to address difficulties in industrial applicationa such as ultra-small codes, problematic
codes, high takt time and small space. HikRobot has also released a number of handheld code readers to meet the
information collection needs in scenarios of logistics, intelligent manufacturing and others, which enriched methods
of information collection.
3D vision product line: HikRobot provides one-stop 3D vision application solutions for industrial customers,
taking 3D sensing technology as the core and 3D software system as the platform. In 2021, HikRobot increased
investment in the 3D technology, a key development direction of machine vision, and launched a variety of RGBD
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3D cameras. Meanwhile, focusing on the application of robotic arms, the first 3D Random Picking Platform was
released, together with a number of solutions such as single-piece separation and automated robotic conveyor
tailored for the express delivery and logistics industry. HikRobot continued to optimize and enrich linear laser 3D
measurement products, gradually building up a product lineup. With improved accuracy and environmental
adaptability in 3D measurement and inspection applications, the products have been recognized by users in logistics,
lithium battery, 3C and other industries.
Ecosystem construction
Based on hardware and software offerings, HikRobot endeavors to establish a new ecosystem of machine
vision. At the beginning of 2021, HikRobot initiated the Ecosystem Partner Program. It includes free machine vision
engineer training and certification nationwide – to explore and cultivate ecosystem partners – and engagement in
machine vision application training, textbook compilation, skills competition etc. in colleges and universities – to
support the fostering of intelligent manufacturing talent. As a result, a machine vision application ecosystem based
on the VM Platform has been initially established. At the same time, HikRobot has formed up an ecosystem
promotion team, which is dispatched to respective regions to better empower system integrators and equipment
vendors. V Community, a vision technology forum also went live, serving as a professional technical exchange and
communication platform for ecosystem partners.
The machine vision industry is expected to maintain rapid growth, with the continuous transformation and
upgrading of traditional industries, the rapid development of new energy, semiconductor and other industries, and
the drive of AI, 3D and multispectral technologies. In 2022, driven by technological innovation and guided by
market demands, HikRobot will focus on the upgrading and iteration of products and platforms, and continue to
provide customers with simpler and more open hardware and software products and systems. More resources will
be invested to establish a new ecosystem of machine vision, serving partners at all levels of the industry chain and
creating value together.
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In the future, HikRobot will continue to focus on intelligent manufacturing. It will remain committed to the
two business areas – mobile robots and machine vision, and improve quality & efficiency, downsize staffs 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.
5.3 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. It works hard to
substantially reduce the cost of core components and expand application scenarios, promoting infrared thermal
imaging products from a niche to the general public.
5.3.1 Core Devices: Steady Upgrade of Technology and Process, Continued Increase in Mass Production
Capacity
In 2021, HikMicro continued to develop uncooled infrared focal plane detector technology, and tap into its
five core technology fields – readout integrated circuit design, MEMS design, MEMS and encapsulation process
development, high vacuum encapsulation, and industrialization capability. Through technology upgrade, it seeks to
optimize product cost, improve product performance, and continuously enhance product competitiveness. On the
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basis of the original 17um product platform, HikMicro has developed and completed the construction of a 12um
product platform, further launched and mass-produced a full range of 12um detectors with area arrays. With a
minimal resolution of 160*120 and a maximal resolution of 1280*1024, the series can meet the personalized needs
of customers in varied scenarios. The full range of 12um detectors features superior performance, with NETD10
≤40mk. All arrays are available in advanced wafer-level packaging, which means smaller size and lower cost. Built-
in analog-digital converter modules are used to improve the anti-interference ability of detectors and simplify the
circuit design of peripheral hardware, which facilitates subsequent application development.
In 2021 HikMicro further improved its detector industrialization capacity, with its detector industrialization
base in Tonglu, Hangzhou put into use. The new MEMS production line has also been activated, serving as a strong
driving force for the popularization of thermal imaging.
5.3.2 Product Solutions: Technology-based Performance Improvement, Demand-driven Iteration and
Innovation
Over years, HikMicro has established five advantages in finished products – clear image, smart algorithms,
efficient temperature measurement, stable application and reliable manufacturing. The business has seen rapid
growth, relying on its technical advantages in independently developed sensors and product design. In 2021,
oriented for market demand, HikMicro continued to expand, optimize, and upgrade its three categories: generic-
security products, temperature measurement products, and commercial vision products.
Generic-security products: In the segment of civilian security, commanding heights are a typical application
scenario, where equipment usually undertakes security surveillance in large space, and is required to perform
frequent cruise and focusing. Therefore, positioning accuracy becomes a key to application performance, and the
error control of motors and the service life of lens are also much concerned. To improve positioning accuracy,
HikMicro has developed an attitude perception feature to accurately monitor the equipment attitude information in
real time, and then combine the attitude information with GIS map. It has managed to reduce the positioning error
to a maximum of 87M within 5 kilometers – becoming new industry benchmark. To address the accumulated error
caused by cruise and focusing, HikMicro has launched an intelligent closed-loop control function to ensure that
equipment can self-correct motor’s loss of synchronism after long time cruise, permanently preventing deviation
10 NETD: Noise-Equivalent Temperature Difference, that is, the minimum temperature difference that an infrared detector can
detect, is one of the primary indicators to measure the performance of infrared detectors.
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from the preset position. Based on the thermal imaging lens of the non-contact servo-control system, and coupled
with smart focusing algorithms, the service life of lens has been increased by nearly 10 times, significantly
improving the reliability and stability of devices. Products with improved functions have been widely used in forest
fire prevention, fishery administration vessels, prohibition of straw burning, border and coast defense and other
commanding height scenarios, and received positive feedback.
Temperature measurement products: Thermal imaging has long been a helpful tool for epidemic prevention
and inspection, flaw detection, equipment predictive maintenance, and temperature monitoring during
manufacturing process. Since the scenario-based demands for temperature measurement is fragmented, it is difficult
for one single product or solution to meet the needs of different users. In 2021, HikMicro completed its temperature
screening product category by improving the online temperature measurement, handheld temperature measurement,
and inspection robot product series. It developed a self-adaptive distance compensation algorithm, which ensures
temperature measurement accuracy without manually configuring distance parameters. Suitable for targets of
different sizes and similar distances, it has greatly improved the reliability of temperature measurement accuracy
and the convenience of device usability.
Commercial vision products: Thermal imaging’s outdoor applications are mainly for hiking, expedition,
search and rescue, criminal manhunt, and crackdown on drug and smuggling, among other scenarios. The
application scenarios are roughly divided into two categories. In outdoor applications, which are demanding on the
cost performance of equipment and ease of use, HikMicro has launched 256*192 resolution single-lens handheld
observation products and mobile phone modules to bring users a professional-grade imaging experience. For vertical
applications, HikMicro has integrated DarkfighterX technology, thermal imaging and laser ranging as one, and
matched it with the industry's debut scroll-adjusted unbounded continuous zooming function, to enable high-
precision one-click distance measurement and one-handed operation. It has redefined outdoor single-lens equipment,
offering great convenience to professional users. HikMicro provides a full series of commercial vision products of
various models and prices, from detectors, components to finished products, and delivers one-stop integrated
services to partners.
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Following HikMicro’s launch of its 160*120 resolution signature product in 2019, which brought down the
general price of thermal imaging to less than RMB 1,000(namely “thousand-RMB era”), thermal imaging products
have been applied in more and more industries, stimulating more fragmented demands. In 2020, HikMicro fully
upgraded its economical products, and empowered applications with open AI platforms, to meet more fragmented
and customized needs of customers. In 2021, HikMicro launched a full series of 256*192 resolution products priced
at around RMB 1,000, further broadening the product category. The large-scale applications of the original 160*120
resolution products has further reduced the cost and popularized thermal imaging, benefitting thousands of
industries. As for the high-end market, HikMicro introduced high-resolution products such as 1280*1024 resolution
zoom camera module and positioning system in 2021, to strongly benefit to professional industry applications.
With independently-developed capability of core components, HikMicro will continue to consolidate its
product technical superiority, explore more application scenarios, and consistently lead thermal imaging from a
niche to the general public.
5.4 Innovative Business - HikAuto
HikAuto focuses on the field of intelligent driving. Centered on video sensors, and in combination with
technologies such as radar, AI, and perceptual data analysis and processing, HikAuto is committed to becoming the
industry’s leading supplier of vehicle safety and intelligent products powered by video technology. It provides a
wide range of services to passenger vehicle users, commercial vehicle users, and other types of consumption as well
as industry users globally.
5.4.1 Improving Day by Day in the Passenger Vehicle Before-market
2021 saw significant changes to the before-market structure of the passenger car. China’s vehicle market has
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11
achieved positive year-on-year growth for the first time during the past three years, reaching 21.48 million
vehicles. Amid the trend of electric and intelligent vehicles, domestic brands have greatly improved their product
performance, and expanded their market share, while creating more business opportunities for domestic suppliers.
Capitalizing on the trend, in 2021 the HikAuto’s passenger vehicle before-market delivered doubled growth, and
the number of new designated projects doubled as well. The expected sales of new contracts quadrupled compared
with the end of 2020, laying a solid foundation for continued growth in later stages.
With the rapid expansion of intellignent driving applications, HikAuto has made significant breakthroughs in
all of its product lines. It has acquired a leading market share of vision sensors in China. Capturing the opportunity
of the explosive growth in demand for intelligent driving perception cameras, it has achieved industry-leading
coverage of customers and vehicle models, laying a foundation for expanding market share and maintaining rapid
growth. In terms of intelligent driving, HikAuto started from fully automatic parking system, relying on its
advantages in full-stack self-developed system solutions and UV fusion12 perception algorithms, and developed
industry-leading product performance. It has won over 10 designated projects of production car models from leading
independent brands such as Great Wall Motor, Geely, and Chang’an. Regarding intelligent cockpit, HikAuto
focusing on both exterior and interior visual perception systems, has launched the VIMS (Video Intelligent Monitor
System). The system supports up to 8 channels of HD video access, and is equipped with smart algorithms for face
recognition inside and outside the car, fatigue driving monitoring, driving behavior analysis, gesture recognition,
etc. It is designed to help customers build more powerful smart cockpits, and has won more than 10 official
11 Data from the China Association of Automobile Manufacturers.
12 Ultrasonic Vision fusion, refers to the combination of ultrasonic radar and vision.
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designated projects including Great Wall Motor, Geely, Chang’an and other customers.
In the meantime, HikAuto continued to develop joint ventures and international brand markets, and obtain a
number of designated platform-based product projects including Volkswagen, Volvo, Mazda, Toyota and other
brands on in 2021.
In 2022 HikAuto will continue to increase investment in intelligent driving sensors, algorithms and system
products, give full play to its advantages in the technology of vision, ultrasonic and millimeter-wave radar fusion
perception, and develop a more competitive driving-parking integrated full-stack system. Active efforts will be
spared to explore integrated application solutions of intelligent driving and intelligent cockpit, so as to provide
customers with more smart options.
5.4.2 Innovating in the Passenger Vehicle Aftermarket
In the automotive aftermarket, passenger car owners' demand for dashcams and panoramic view monitors
continues to increase, and driving video recording, rear-end collision evidence, injured feigning prevention , and
parking view assist have gradually become rigid demands. In 2021, HikAuto’s dashcams and panoramic view
monitors maintained rapid growth, with both sales and shipments doubling year-on-year.
Based on differentiated technical capabilities such as night vision, AI, and networking, HikAuto has enriched
its dashcam product line, which is divided into two series: general-purpose and special-purpose, completing a
comprehensive product mix ranging from 2-megapixel to 4K. The products have covered all channels including
mainstream online e-commerce platforms, 4S store groups, and offline auto parts sales channels. The iconic F6/C6
dashcam series has become a market benchmark of 5-megapixel HD intelligent networked recorders. On such basis,
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HikAuto launched C8, a new 4K series in 2021, which has introduced the exclusive night vision technology,
elevating the night vision performance of driving recorders to a new height.
Regarding the Panoramic View Monitor system, HikAuto has expanded to 7 major vehicle lines and over 50
vehicle models on the basis of 5 major vehicle lines and 31 vehicle models in 2020. The system has become an
industry leader in key indicators such as image definition, night visibility, seamless splicing, ultra-low delay, and
product reliability. In 2021, the whole industry was challenged by supply chain stress. With the support from its
suppliers, HikAuto ensured the normal delivery of products and offered superior and reliable products and service
experience to the majority of car owners and consumers.
HikAuto has established a solid brand image and won the trust of customers in the automotive aftermarket. In
the future, HikAuto will remain committed to the aftermarket and innovation, to meet the needs of customers and
car owners.
5.4.3 Booming in the Commercial Vehicle Market
In 2021, the commercial vehicle market went through subtle changes, and it has become a consensus that the
application of on-board video surveillance should be expanded from specified buses, coaches and trucks to all
freight vehicles. Intelligent technologies such as ADAS (Advanced Driving Assistance System) and DMS (Driver
Monitor System) have been largely applied to millions of vehicles; while urban public transportation embraced
further transformation driven by intelligent networking technologies. HikAuto's commercial vehicle business
doubled in 2021.
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HikAuto has completed the cross-platform development of fundamental technologies, using middleware
technology to rapidly transplant application development to different chip platforms. This improves its response
efficiency to customers’ tailored needs, and greatly reduces the delivery risk caused by chip shortage. With regard
to key technologies, the focus is on the optimization of memory read/write performance, BeiDou positioning
accuracy, and intelligent algorithms such as ADAS/DMS. Related products and solutions are being applied to
special-purpose vehicles, trucks, buses, construction vehicles, taxis, ride-hailing, and metro vehicles as scheduled.
Cloud platforms have enabled access to more than 200,000 vehicle-mounted video channels, providing customers
with cost-effective O&M solutions. Furthermore, HikAuto has completed transactions with over 1,200 customers,
and established more than 10 best practice cases, including the Heilongjiang Special-purpose Vehicles for typical
alpine regions, the Shenzhen Public Transport as a window to the entire world, the Shou Qi Tailored Taxi Services
serving the Winter Olympics, and the Yutong Bus, the world's top bus seller.
In 2022, the commercial vehicle market is expected to continue the reform and embrace more application
amount, higher integration level and greater practicability. In the special-purpose transport vehicles for passenger
and dangerous goods and freight vehicles market, HikAuto plans to speed up the application of ADAS/DMS, as
well as the integration of mobile monitoring system and overload/overspeed monitoring systems; in the market for
public transport, it will promote the intelligent public transport 3.0 system starting with provincial capital cities, and
advance the integrated application of subsystems such as those for bus monitoring, public transportation scheduling,
ADAS/DMS, blind zone collision warning, illegal bus lanes occupation, pedestrian priority at crosswalk, electronic
rearview mirrors, and 5G-V2X; in the construction vehicle market, fatigue driving monitoring, aggressive driving
monitoring and blind zone collision warning systems will be widely applied and connected with police traffic check
point and E-police for composite management, to lower the traffic accident rate; and in international markets, video
surveillance networks will be built for school buses, public transport, and other fields, in order to accelerate
intelligent application. HikAuto will continue to increase investment in R&D in the commercial vehicle market,
innovate products and solutions, and improve customer satisfaction, contributing to reduced traffic accidents, lower
accident losses, and improved transportation efficiency.
5.5 Innovative Business - HikSemi
HikSemi is committed to providing worldwide users with professional overall storage solutions, with focusing
on application scenarios such as industrial control, data center, video surveillance, and consumer business. Boasting
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complete design, development and manufacturing capabilities, it is now operating four product lines: solid-state
hard disk SSD, front-end storage, embedded storage and flash memory application.
5.5.1 Products and Technologies
Centered on user needs, HikSemi is consistently engaged in technology innovation, to constantly develop and
improve its four product series.
Solid-state hard disk SSD products: In 2021 HikSemi upgraded the Zoned 2.0 algorithm cluster, and improve
reliability and service life of the products to enhance its application advantages in the field of video servers. And
the first dedicated disk for video surveillance based on QLC13 technology was released in 2021, offering a better
option for high-performance, large-capacity, and high-density video surveillance applications. Based on customer
service data and its established technological capabilities, HikSemi has successively launched services such as
service life warning, fault diagnosis, data migration from out-of-warranty failed disks and product life extension to
optimize user experience.
Front-end storage product line: Relying on the powerful status of the high-end video surveillance sector and
long-standing expertise in video storage technologies, HikSemi has launched cost-effective video surveillance cards
suitable for continued data writing scenarios. Meanwhile, it continuously expands the memory cards market, with
the introduction of cost-effective and highly compatible consumer memory cards to be widely used in civilian
security, mobile phones, cameras, speakers and other products, as well as dashcam cards for driving recording, and
handheld gaming cards favored by gamers. HikSemi is also actively investing in the market for memories – a integral
part of overall storage solutions, and has launched consumer memory products for personal computers and industrial
memory products for autonomous servers.
Embedded storage product line: Since its launch in 2019, the range has been providing customers with highly
reliable and highly compatible products and local services, relying on continued R&D investment, rigorous quality
control standards and extensive experience in embedded storage application. As of 2021, HikSemi’s embedded
13 QLC: Quad-Level Cell, is a type of flash memory.
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storage was available in SLC14 NAND, eMMC15, LPDDR16, DDR417and other product series, meeting the needs
of customers in electric power, networking, mobile phones, security, smart home and other industries.
Flash memory application product line: HikSemi regards satisfying the diverse storage needs of consumers
as its responsibility, with continued efforts to innovate products and optimize software systems. In terms of mobile
storage, HikSemi has released up to 10 X-series USB flash drive products. Tailored for different groups of
consumers, the products feature varied materials, appearance and design, and are powered by self-developed
firmware. They have been well received among users, rapidly emerging as a leading brand. Regarding the mobile
solid-state hard disk SSD series, EliteX, a benchmark product with a bandwidth of up to 40Gbps, was released in
July, in order to meet the strong demand for ultra-high-speed reading and writing among professionals and the
technology-fancier. Its transfer rate is as high as 3000MB/s, making the product a great helper for office work. As
for the cloud storage series, combined with years of technical expertise, HikSemi released a crowdfunding G1
Master of single-disk edition on Xiaomiyoupin.com, to meet the needs of Xiaomi fans. Once released, the product
became an instant hit for its appealing design and premium use experience. 7,000 units were crowdfunded in just
14 days, demonstrating the popularity of HikSemi's products.
14 SLC: Single-Level Cell, is a type of flash memory.
15 eMMC: embedded Multi Media Card, formulated by the MMC Association, is the standard embedded memory specifications for
products such as mobile phones or tablets.
16 LPDDR: Low Power Double Data Rate SCRAM (Synchronous Dynamic Random Access Memory), is a communication standard
developed by the US JEDEC Solid State Technology Association for low-power memory. Known for low power consumption and
small size, it is specially used for mobile electronic products.
17 DDR4: 4th generation Double Data Rate SCRAM (Synchronous Dynamic Random Access Memory), is a component used to store
programs and data in computers.
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5.5.2 Business development
HikSemi continues to build a marketing network, and pays equal attention to the industry and channels by
actively expanding the industry market and steadily developing the channel market. While continuously improving
its user service system, it sees steady growth in the total number of customers, which reached over 3,000 in 2021,
and the sales revenue delivered rapid growth as well.
Depending on the characteristics of different channels of industry, consumption and OEM, HikSemi has been
building differentiated manufacturing and operation models. Powered by production management tools ERP, PLM
and SRM, it is committed to developing a digital supply chain in line with strict and improvement-oriented quality
management systems, continuously enhancing its delivery capability and quality.
As an irreplaceable functional device in the sectors of consumer electronics, communication equipment and
IoT, semiconductor memory is one of the most fundamental core components of modern information industry
applications. Chinese semiconductor memory manufacturers are expected to embrace greater opportunities, with
the continuous development and growth of emerging industries such as big data, cloud computing, AI, and 5G.
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HikSemi will stay true to its original intention of “storing every beautiful moment and using intelligence to change
lives” and adhere to its user service concept of “dedicated to customers’ continual success, adding value to
companies and communities.” Oriented for user demand, it aspires to gain insight into economic trends, and keep
providing enterprises and consumers with safe and reliable storage devices, systems and solutions through product
innovation, technological innovation, marketing innovation and brand building, aiming for a leading supplier of
overall memory solutions in China.
5.6 Innovative Business - HikFire
HikFire is dedicated to the construction of the fire protection IoT, visual management and digital
transformation of fire protection, driven by emerging technologies such as multi-dimensional perception, IoT,
Internet of Vision, cloud computing, big data and AI, as well as professional image processing technologies,
innovative security-fire protction integration and IoT-information network integration applications. HikFire’s
business covers traditional fire protection, smart fire protection, fire safety e-commerce, operation services and other
sectors, and is committed to developing one-stop fire safety system solutions and one-stop fire management service
solutions. The aim is to enable smart perception, smart prevention and control, smart management and smart rescue
of fire protection, making the environment safer and life better.
5.6.1 Smart Fire Protection: Innovative Technologies for the IoT for Fire Protection
As the traditional fire protection industry undergoes continued changes, the smart fire protection market
becomes increasingly mature. HikFire has released a full range of smart fire protection products and operation
management platform software to meet the organization level, industry level and city level’s fire-fighting IoT
construction and operation needs, featuring 3D, full coverage and full time domain. Through multi-dimensional
perception, security-fire integration, system coordination, data sharing and service integration, HikFire aims to
enable the early warning, early prevention and control, and early handling of fires, reduce fire safety risks, and
improve fire management efficiency.
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Promoting technological innovation: In 2021, HikFire released a bi-spectrum18 smoke detector to reduce
the false alarm rate. With active exploration of the integrated application of thermal imaging, AI-based image
recognition, and spectral analysis technologies, Hikfire released a multi-spectral fire detector that combines thermal
imaging technology and AI flame analysis to improve the accuracy and timeliness of flame identification. In order
to enrich the application of security-fire integration in IoT, HikFire has also unveiled a smart terminal graphic
display device that is integrated with multiple systems such as fire-fighting IoT access, video surveillance, fire alarm
review, and collaborative firefighting. Through the fusion of the wired advantages of traditional fire protection and
the wireless technology of smart fire protection, HikFire offers more fire management options for diverse scenarios.
Advancing industrial application: According to the characteristics of various industries, HikFire has
developed fire-fighting IoT solutions for a wide range of industries, including financial services, cultural relics and
ancient buildings, education, communities, smart buildings, industrial and commercial enterprises, energy and
metallurgy, elderly care, commercial chains, and new energy. In 2021, HikFire improved product performance in
different scenario and the efficiency of platform-based management, make the products easy to install, use, and
maintain, and reduce the comprehensive cost of fire protection establishment and operation, bringing long-term
value to users.
18 Bi-spectrum detection: The scattering and reflection features of particles of different sizes vary in different wavelengths of
infrared light and visible light, so that interference sources such as water vapor and dust can be better distinguished from smoke
particles.
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5.6.2 Traditional Fire Protection: System Integration and Upgrading for the Digital Transformation of Fire
Protection
HikFire’s traditional fire protection product portfolio continues to expand, in order to cover the general fire
protection market. The offerings are divided into four sectors – early warning, fire alarm, emergency evacuation,
and automatic fire control. For these four sectors, nine systems have been launched – including automatic fire alarm
system, emergency lighting and evacuation indicator system, fire broadcasting and phone call system, electrical fire
monitoring system, fire equipment power monitoring system, residual pressure monitoring system, fire door
monitoring system, combustible gas detection alarm and gas fire extinguishing control system. Through continuous
commitment and investment, HikFire aims to strengthen the R&D and accumulation of the underlying technologies
of traditional fire protection products, promote the integration and upgrade of systems, and improve the application
capabilities of traditional fire protection systems.
The new-generation digital technologies such as the IoT for fire protection, multi-dimensional perception, and
big data are accelerating the fusion of traditional fire protection and smart fire protection, leading the fire protection
sector into the era of AIoT with physical-digital interconnection. Combining industries’ characteristics and realistic
scenarios, HikFire leverages the three-in-one technical advantages of “traditional fire protection + smart fire
protection + smart security,” and continuously upgrades security-fire integration solutions that are gradually
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covering various industries and scenarios. HikFire proactively explores solutions for security-fire integration and
prevention-control integration, in a bid to develop a new integrated fire safety solution for both private and public
sectors, all industries and cities.
5.6.3 Fire Safety E-commerce: Pursuit of a Green, Smart and Safe Lifestyle
As fire emergencies frequently take place in residences and vehicles, people’s safety awareness and
environmental protection awareness are rapidly rising, which further stimulates individual consumers’ and SMEs’
demand for new green and safety products. HikFire has been accelerating its e-commerce retail business. The gas
detectors, smoke detectors, and emergency kits are gaining popularity, with sales and reputation on continuous rise
on leading e-commerce platforms. According to the statistics by the China Bicycle Association, the annual sales of
electric bicycles in China is over 30 million, and the total ownership is nearly 300 million. In active response to the
state-level goals for carbon peaking and neutrality, HikFire launched a comprehensive solution for electric bicycle
fire safety management to facilitate orderly parking and centralized charging control. Featuring a charging
protection mechanism and connected firefighting, the solution is expected to contributed to a smart and safe life.
5.6.4 Operation Services: Provider of One-stop Fire-fighting Operation and Trusteeship Services
A digital platform is the key to digital transformation. HikFire’s fire protection operation and trusteeship
platform provides on-duty services, maintenance services, electric moped management services and unit
management, and employs multi-dimensional monitoring indicators to ensure the quality of operation services.
Seeing the Internet of Everything as the cornerstone of an intelligent world, HikFire works with fire-fighting
operation partners to explore a one-stop fire prevention operation and trusteeship model combining “technology +
service + insurance.” This is designed to promote fire-fighting operation at the town and sub-district levels, and
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assist grass-roots grid fire management. HikFire seeks to offer standard service models, build a knowledge and
technology empowerment system which covering training and certification to improve the technical service
capabilities of fire protection engineers, fire protection operators, fire maintenance service providers and key social
organizations. With the consistently high maintainability of systems and the premium and efficient O&M services,
HikFire brings more powerful support and greater value to partners.
5.6.5 Outlook: Standards Upgrade, Imports Substitution, Welcoming Market Growth
Domestic products are increasingly replacing their foreign counterparts in the traditional fire protection
industry, and the general-purpose fire protection19 market is seeing the constant upgrade of specifications and
technologies. While further expanding the market capacity, the new policies are expected to further expand the
market capacity and enhance the technical threshold of upgrade intelligent applications. Taking GB51309-2018
Technical Standard for Fire Emergency Lighting and Evacuate Indicating System as an example, the standard has
proposed changes to the conventional practices of fixed installation and nearby evacuation, requiring to evacuate
using the evacuation guideline that best suits the fire situation; at the same time, the positioning of the system in
construction projects is in transition from the strong electricity sector to the weak electricity sector.
The establishment and release of industry standards, regional standards, and group standards for smart fire-
fighting products are gaining maturity. The demand for integrated management is emerging among schools,
hospitals, commercial enterprises and other enterprises and institutions. The industry is presenting a trend of IoT
integration, prevention-control integration, security-fire integration, and data-intelligence integration, which is
highly consistent with HikFire's philosophy. HikFire will actively participate in the dialogue with industry platforms,
work hard to promote the establishment of standards, develop the AIoT for fire protection, and assist the visual
19General-purpose fire protection: It mainly refers to civil and general commercial fire protection, as opposed to industrial
and special-purpose fire protection.
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management and digital development of fire protection, jointly shaping the digital and intelligent future of the fire
protection industry chain.
5.7 Innovative Business - Rayin
Rayin is focusing on X-ray detection technologies, dedicated to be a leading technology R&D, manufacturing,
equipment sales and leasing services provider of invisible light detection equipment . Relying on the long-standing
expertise in X-ray, millimeter-wave, other multidimensional perception technologies, AI, IoT, etc., Rayin keep
enabling technology and creating value for the fields of intelligent security inspection and intelligent industrial
manufacturing.
5.7.1 Luggage Security Inspection
Rayin continues to expand its intelligent luggage security inspection product category. On the basis of the
existing 5030/6550/100100 conventional security inspection machines, in 2021 Rayin released the 140100 security
inspection machine designed for logistics and the 4233 lightweight security inspection machine to meet the needs
of luggage inspection in different scenarios. Data networking, intelligent recognition, person-luggage association
and other technologies are employed to expand intelligent applications and provide one-stop security inspection
offerings, empowering users for the closed-loop management of security inspection.
Committed to the research on X-ray imaging technology, Rayin has released the Ji Xian series of intelligent
security inspection machines equipped with high-performance security inspection dedicated processors for and the
new-generation image enhancement engine. While realizing the vivid recovery of image information, it offers
clearer images and more details, significantly optimizing the experience of staff checking tiny items in the luggage.
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Keyboard sample/ Details rendered by traditional X-ray imaging/ Details rendered by new-generation
image processing engine
5.7.2 Human Security Inspection
In the early stage of the COVID-19 pandemic in 2020, Rayin innovatively integrated and expanded a variety
of IoT sensing methods based on the conventional metal detection technology, for the purpose of non-contact and
quick temperature measurement and security inspection. In 2021, the temperature measurement and security
inspection product continued to be optimized and upgraded. It was networked with the Health Code, and meanwhile
improved in metal detection and classification capabilities, to meet the fragmented and personalized needs of
customers.
Rayin also released a millimeter-wave human body check gate integrated with active high-frequency
millimeter-wave imaging technology, intelligent recognition technology, and image processing technology.
Intended to detect and alarm potential dangerous goods such as metals, liquids, and plastics, it has expanded the
inspection scope of prohibited goods and improved detection accuracy, ensuring the safety of key locations.
5.7.3 Industrial Detection
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Rayin leverages the penetrating and imaging capabilities of X-ray and advanced AI analysis algorithms to
identify different detection targets according to their specific imaging characteristics, thereby enabling the
intellignet detection of foreign objects and defects in industrial production. Integrated industrial detection products
and solutions are also developed to empower business partners to jointly create new applications in industrial
intelligent manufacturing.
Rayin has launched product series for industrial flaw detection, electronic inspection, food inspection and
others, which greatly improves the accuracy and efficiency of industrial detection. The products have been applied
to a number of projects for industrial flaw detection, foreign matter/defect detection, and intelligent material
counting.
Detection of foreign matters and defects in food/ SMT material counting/Result of defect detection
Based on its understanding of detection technologies such as X-ray and millimeter-wave, Rayin implements
Hikvision full-spectrum IoT strategy and plans to continue increasing R&D investment in invisible light imaging
technology. The aim is to improve product performance, expand market coverage, and tap into application potential.
Rayin focus on developing more innovative applications of intelligent security check and industrial intelligent
manufacturing, and consistently contribute to the creation of a safer, more convenient and better society.
5.8 Innovative Business – HikImaging
HikImaging probes into the needs of users in the medical industry, committed to the research on vision imaging,
multi-dimensional perception, AI and other related technologies in medical scenarios, so as to provide customers
with products and related solutions. HikImaging’s business scope covers medical vision and digital healthcare,
among other professions.
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5.8.1 Core Technologies
To address the professional requirements of the medical industry for specific imaging effects, HikImaging has
developed certain competitive advantages in full-link 4K, real-time streaming media transmission, and intelligent
AI algorithms based on its technology accumulation and continuous R&D in video images:
Full-link 4K: 4K Ultra HD produces images that are four times the resolution of traditional HD images. In
medical practice, 4K Ultra HD endoscopy allows users to observe fine blood vessels, nerves and fascia, as well as
details of lesions and biopsy sites that are difficult to see using traditional HD endoscopy. Compared with traditional
endoscopy, 4K Ultra HD, with higher resolution, definition, and color distinction, is able to provide physicians with
a stronger sense of depth and better control over surgeries. With years of operation experience in the video field,
HikImaging not only possesses multi-spectral fusion and 4K imaging technologies for front-end acquisition, but has
also enabled full-link 4K vision imaging from transmission, storage and display, with clearer details and better color
reproduction.
Real-time streaming media transmission: Depending on mainstream real-time transmission technologies,
HikImaging has optimized the underlying media transmission engine and combined it with HikImaging’s CODEC
expertise to improve QoE (Quality of Experience). In the case of private deployment, HikImaging's real-time
transmission technology supports more than 500 users for simultaneous real-time audio and video interactions
across the Internet, and dynamically adjusts coding parameters to adapt to various network conditions, guaranteeing
the real-time ability of media transmission and the integrity of interaction information. For the medical industry, it
is also adaptive to the complex images of endoscopes, and enables the smooth transmission of 4K streams across
Internet environment.
Intelligent AI algorithms: HikImaging combines intelligent AI technologies with endoscopes. By building
mapping knowledge domains and applying AI-based automatic recognition, it assists physicians in diagnosis and
treatment and reduces missed diagnosis of lesions. Through determination powered by AI algorithms, the inspection
screen can present digital and characterized information to help doctors quickly determine whether there is a lesion
in inspection sites, and accurately locate the lesion, making diagnosis more efficient, faster and accurate.
5.8.2 Solutions
1) Medical Vision:
In minimally invasive surgeries, diagnosis and treatment, endoscopes are used to help the doctor see lesions
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that cannot be displayed by X-ray, MRI and other external examination approaches. Therefore, endoscopy systems
play a crucial role in inspections and are considered to be an extension of modern doctors' hands and brains, almost
“pervasive”.
In 2021 HikImaging launched a series of hard endoscopy solutions (4K auto-focus camera system, 4K
fluorescence camera system, 3D camera system, ultra-HD optical endoscopy, etc.) and medical display solutions
for minimally invasive surgeries; and for minimally invasive diagnosis and treatment, it has introduced an array of
electronic endoscopy solutions (electronic endoscopic camera system, reusable electronic endoscope and disposable
electronic endoscopes and other overall solutions.) These solutions have now covered gastroenterology, respiratory,
general surgery, thoracic surgery, urology, orthopedics, gynecology and other departments, becoming indispensable
medical diagnostic and surgical devices.
HikImaging’s medical vision products all comply with the general requirements for electromagnetic
compatibility in the YY0505 standard for medical electrical equipment and the general requirements for basic safety
in the standard GB9706.1. Together with the independently-developed test software HIKMED iTest, it can perform
performance parameter tests in line with the YY/T1603 and YY/T1587 standards, which greatly shortens the cycle
of registration and inspection. In 2021, HikImaging helped 8 domestic customers obtain registration certificates for
medical endoscopic imaging equipment (4K camera systems, etc.), while assisting customers with registration and
declaration in 4 provinces.
Hard endoscopy solutions/ Electronic endoscopy solutions
Endoscope is a medical device that directly contact with the skin, mucous membranes and sterile tissues of
patients. However, since the endoscope contains many small, narrow and long open channels, it potentially provides
an environment for the survival and cross-infection of microorganisms, secretions and blood, which may lead to
medical malpractice. In 2021 HikImaging introduced fully compatible disposable electronic endoscopes ranging
from 40,000-2 million pixels, catering to the needs of different departments and surgical procedures. Also, a full-
link solution consisting of a disposable scope + host was unveiled. Lightweight, portable, and free from
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decontamination, it gives endoscopy more flexible application scenarios.
2) Digital Healthcare
In 2021, HikImaging continued to upgrade its digital medical products, and introduced high-frame-rate 4K
surgical field camera, 4K panoramic camera, medical video recording terminal, 5G medical video communication
terminal, 5G mobile teaching demonstration system and other products. Powered by 5G technologies, the ultra-HD
video products have been flexibly and rapidly applied to digital operating room, digital ward, telemedicine, medical
education and training and other professions.
Digital operating room: By professional 4K surgical field imaging, panoramic recording, image access of
CT/surgical microscope/DSA/monitor and other medical equipment, multi-screen fusion, lip synchronization, audio
and video two-way interaction, public network cloud interaction, cloud live broadcast and other technologies
HikImaging is able to meet demand for patient information access, intraoperative image scheduling, remote surgical
teaching demonstration, cloud live broadcast of surgeries, remote surgical instruction, surgical consultation,
intraoperative remote family communication, surgical process recording and documentation, and medical exchanges
during the clinical operations at hospitals. The purpose is to establish information-driven, networked and digital
operating rooms.
Digital ward: HikImagin intelligent nursing system has introduced smart bedside cards, smart interactive
screens, smart doorway screens, corridor screens, nurse station call management hosts and nurse station smart care
screens surrounding the varied requirements of doctors, nurses, patients, medical staff, nursing managers, and
hospital managers. It is thus able to provide wards with a new model of timely, mobile, continued, closed-loop, and
user-friendly information management.
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Telemedicine: Based on its technical capabilities in audio and video processing, IoT, big data, and AI,
HikImaging has independently developed a series of telemedicine products (5G remote system, 5G medical video
communication terminal, remote consultation system, remote ward round system, 4K shot camera system, etc.) for
medical and health institutions at all levels from province, city, county, township, to village. With access capabilities
to all scenarios and terminals, it enables remote consultation, remote surgical diagnosis, remote teaching, remote
monitoring, remote ward rounds, two-way referral and other services.
Medical education and training: The traditional teaching model of watch & learn is limited by limited
observation space, as well as little practice time and few practices for students, which undermines the effect of
medical teaching and training. In response to the above shortcomings, HikImaging has launched a comprehensive
solution for visual medical teaching for medical education scenarios, and a comprehensive solution for experimental
training and teaching for middle and higher vocational training scenarios. With professional medical education and
training equipment, fixed/mobile teaching systems, medical teaching platforms, comprehensive application
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platforms for experimental training and other software and hardware, a holistic range of teaching services from
preview before class, class teaching, to after-school review has been established. At the same time, supported by
cloud interactive platforms, teaching activities are extended to a wider range, powering famous teachers' classes,
large-scale teaching, and remote interaction between schools and hospitals, schools and companies.
During the pandemic, HikImaging helped medical staff with non-contact communication and consultation with
patients through digital equipment. With nurse station call management host, visual hospital bed extensions, and
hospital bed intercom extensions installed, two-way visual intercom and non-contact remote consultation between
patients and medical staff are realized, which makes it convenient for medical staff to know about the patients’
illness in time and lower the risk of infection among medical staff.
The construction of a healthy China will be comprehensively advanced, according to the Resolution on the
Outline of the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the
Year 2035. In the Medical Equipment Industry Development Plan (2021-2025), the Ministry of Industry and
Information Technology has made a detailed plan for the key priorities and breakthroughs of medical equipment.
In particular, medical endoscopes and other imaging diagnostic equipment are one of the strategic objectives that
require breakthroughs.
In 2022, HikImaging will stay committed to the healthcare field, probing into the needs of users in the medical
industry, and making continuous investment in the R&D of ultra HD, AI, 3D, miniaturization, and multi-spectral
technologies. By focusing on the image effects and intelligent applications of audio and video medical products,
HikImaging aspires to consolidate its core competitiveness and develop differentiated products. It will also prioritize
the investment in the automatic manufacturing technique of miniaturized products, establish a production quality
control system, and build up a complete supply chain system, providing industry users and customers with more
professional products and solutions.
II. Analysis of Core Competitiveness
Demand in the AIOT industry has always been fragmented and scenario based. How to meet personalized
demands and create scenario-based solutions while maximizing business economies of scale is a challenge that
faced by all industry participants. The fragmentation and personalization of user demands make it difficult to get an
accurate picture of customer/user demands, making the product diversification and customization necessary, thus
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the characteristics of industrial segmentation and demand customization of solutions are increasingly prominent.
Providing marketing support for customers and users is also becoming delayering and more specialized due to
fragmented demand. Small orders and flexibility in the production process have become a necessity, while other
aspects of business operations have also changed to accommodate the fragmented industry characteristics. With its
over two decades of experience in the fields of security and AIoT, Hikvision is able to adapt to the fragmentation
of industry demands, understand the limitations of such fragmentation on efficiency improvement, and also foresee
the feasibility of certain degrees of scalability. Hikvision firmly believes that AIoT breeds broad market
opportunities, helping people to establish perception, connections, computing, and applications between people and
things as well as between things. This is the best platform for Hikvision to grow alongside the industry. We expend
great effort pursuing science and technology for good, in a hope to enable everyone to enjoy a brighter future.
In 2021, the predictability of the internal and external environment is extremely poor. The difficulties brought
by the global epidemic, sanctions, chip shortage, rising raw material/labor costs, industry reshuffle, etc., pose great
challenges to the continuity and stability of enterprise operations. The external environment is ever changing, posing
extremely high requirements on the enterprise management strategy of long-term stability, short-term flexibility and
aggressiveness, and other aspects. Adhering to the business philosophy of "professionalism, honesty, and integrity”,
Hikvision strives for development in difficulties and survival in challenges. The performance achieved by Hikvision
in 2021 demonstrates the company's aggressiveness, tenacity and stability, which is also the result of the company's
long-term approach.
1. Continuous increase in R&D investment, advancement of platform-based operation of software and
hardware R&D
With video technology as the starting point, Hikvision has gradually expanded perception technology from
visible light to infrared, X-ray, millimeter wave and other fields, continued to explore perception methods such as
sound, temperature, humidity, pressure and magnetism, and further expanded upon multi-dimensional perception
capabilities. Hikvision’s technical capabilities in the fields of AI and big data is increasingly profound. The
Company expanded AIoT applications to thousands of industries, forming a complete system from perception to
cognition, from products to solutions, and from data to applications. In addition, we have continued to improve our
practice-oriented capabilities through the design, implementation and operation of medium and large-scale projects,
while improving technologies, products and solutions through real project practice, forming a virtuous circle from
R&D to the market and from the market back to R&D.
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During the reporting period, Hikvision’s investment in R&D accounted for over 10% of its total operating
income, while the number of R&D and technical service personnel continued its stable growth, accounting for nearly
50% out of Hikvision’s total workforce. The Company will continue to maintain high intensity of technical
investments, consolidate the foundation of intelligent technology, enrich the varieties of intelligent devices,
concentrate on exploring the performance and efficiency of intelligent applications, and build comprehensive
capabilities through continuous R&D investments, in order to lay a solid foundation for Hikvision’s steady
development in the AIOT industry.
2. In-depth exploration of user demands to enhance regional marketing capabilities
Facilitated by its provincial business centers, Hikvision continues to localize business footprint, with over 300
city branches covering most cities across China, forming a hierarchical city-based marketing system prioritized by
economic development and population density, while taking the pilot area as the benchmark. The Company has
established 23 regional functional centers and corresponding 66 branches overseas, forming a marketing network
architecture of headquarters–regions–countries. The headquarters is tasked with building business support
capabilities, while regions establish operations and service systems, and countries adapt to local conditions to deeply
cultivate specific local markets. Hikvision’s long-term and consistent investment in the construction of marketing
system has formed a broad and strong network of domestic and overseas marketing organizations, local talent, and
partners, enabling marketing teams to quickly communicate demands with customers and users and engage in
productive information exchange and business communication.
Hikvision has expanded industry applications through dividing domestic business into three business groups:
public business group (PBG), enterprise business group (EBG) and SME business group (SMBG); overseas
distribution and industry are complementary to one another, and put into practice “one policy for one country”. The
organic synergy of industry-driven region, region-driven industry, marketing-driven R&D, and R&D-driven
marketing helps the company to gain insight into user demands, enabling both marketing and technical R&D work
to be performed in a targeted manner, thereby steadily driving the Company’s business forward.
3. Constantly improving resilience to ensure supply chain stability
Hikvision sells nearly 30,000 different models of hardware equipment and often encounters scattered orders,
frequent changes in demands, and high requirements for the completeness of supply chain. Therefore, its supply
chain system must have flexible and efficient manufacturing capabilities to meet the fragmented and diverse
industry needs. During the reporting period, the Company appropriately responded to the adverse effects of chip
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shortages and raw material price hikes resulting from the imbalance of chip production capacity and supply,
ensuring the continuous and stable supply of its products.
With its domestic manufacturing bases in Hangzhou Tonglu and Chongqing, Hikvision has proceeded with the
construction of a manufacturing base in Wuhan and expansion plans in Tonglu and Chongqing, while establishing
local factories in India, Brazil and the United Kingdom to support global product supply. The Company has
established an agile and flexible manufacturing system and industry-leading automated production capabilities,
which allows it to continuously improve its capacity for lean production and intelligent manufacturing to meet the
demands of small batch, multi-batch, and large-scale product manufacturing.
Taking advantage of its procurement scale, Hikvision has developed stable and mutually beneficial cooperative
relations with suppliers, helping them quickly iterate and improve upon products over the long-term. The Company
has helped over a thousand supplier partners around the world to achieve rapid development, which in turn has
strengthened the stability of the overall industrial supply chain. In response to supply chain uncertainty caused by
sanctions and the COVID-19 epidemic in recent years, the Company has continued to maintain large stockpiles of
raw materials and to hedge the risks brought by changes in the external environment through high inventory level.
4． Continuously improving internal management capabilities through optimizing methods and tools
Amidst an ever-changing competitive landscape, whether a company can perform internal resource allocation
more efficiently than competitors and lower the cost of internal information exchange is an important aspect of
enterprise competitiveness. Irrespective of how the internal and external environment and times have been changing,
Hikvision has always taken a realistic and pragmatic approach to its business and has remained focused on how to
make the business better and stronger, while adhering to the business philosophy of “professionalism, honesty, and
integrity” as the guidance of the business development and the belief system to be upheld by all employees.
As its business continues to evolve, Hikvision has consistently updated its resource organization and
management methods accordingly. As for business direction and goal setting, the company has formed a systematic
strategic planning method which is regularly updated and applied universally, facilitating effective communication
and alignment of each business and functional department to ensure clear goals and division of responsibility. In
terms of internal management, Hikvision has promoted customer-centered management reform, implementing over
100 management reform initiatives each year to continue optimizing resource layout and streamlining collaboration.
The Company focuses its efforts on IT system construction to continuously optimize and improve the efficiency of
business systems. The company is striving for continuous improvements in many aspects including promoting the
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identification and management of financial risks, building a digital quality management system, improving internal
control mechanisms, pursuing the construction of compliance systems, protecting innovation achievements, and etc.
5. Attracting and uniting outstanding talents, building a people-oriented organizational climate
Hikvision considers talents as the most important source of enterprise competitiveness, recruiting talent from
all around the world, while adhering to the employment concept of “talent-focused, growing together.” The
Company has formulated a dual career development path consisting of management sequence and professional
sequence, constantly improving upon the talent discovery and performance appraisal mechanism and identifying
and assigning people in an empirical manner, to boost the morale and creativity of employees and improve
organizational capabilities. The comprehensive employee reward system has initially taken shape, which consists
of compensation and benefits, equity incentives and innovative business co-investment etc., further developing the
distribution mechanism for employees to participate in and benefit from the Company’s growth. Employees
participating in incentives shares and co-investment can obtain long-term individual returns through their
contributions to the Company’s performance, coordinating the long-term development of business with the
continuous employee growth.
Hikvision provides multi-level training courses for employees on various career tracks, which provides impetus
for the consolidation and upgrading of the Company’s crucial role players and reservation and development of
backup talent. Hikvision provides extensive and in-depth training services to all employees, which guarantees the
continuous reinforcement of the Company’s values and improvement of professional capabilities. The Company
encourages its employees to freely organize hobby clubs and regularly hold diversified cultural and recreational
activities to create an equal, open-minded and positive organizational climate. In addition, themed events such as
“Face-to-Face with Executives,” “Dialogue with Managers,” “Humanities Lecture Hall” and “Book Club” have
promoted well-rounded growth of employees.
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III. Core Business Analysis
1. Overview
As the global COVID-19 epidemic persisted in 2021 for the second year, epidemic prevention and anti-
epidemic continued to have a huge impact on the regional economy. With the intensification of reverse globalization,
conflicts and confrontations between certain countries continued to increase, and the political and economic
landscape posed increasingly severe challenges to business operations. Global chip shortages continued, and soaring
raw material prices exacerbated rising manufacturing costs, while domestic policy adjustment in the education and
real estate industries led to a reshuffle of the industry and resulted in significant changes.
Amidst the complex and rapidly changing domestic and foreign landscape, the challenges for enterprises to
achieve sustainable and stable growth are ever increasing. Faced with various external uncertainties, Hikvision
remained focusing on developing its inherent capabilities, maintained a consistent business strategy, and ensured
the smooth development of global business through steady and continuous supply chain management. During the
reporting period, the Company achieved a total operating income of RMB 81.42 billion, representing year-over-
year growth of 28.21%, and realized a net profit attributable to shareholders of the Company of RMB 16.80 billion,
representing year-over-year growth of 25.51%.
(1) Sustained investment in R&D, forming a solid foundation for company development
In 2021, Hikvision invested RMB 8.25 billion in R&D, accounting for 10.13% of the company’s total operating
income. The Company had over 20,000 R&D and technical service personnel, upholding its commitment to
significant R&D investment. Technological innovation serves as the driving force for the development of Hikvision,
and only through continuous technological innovation can the Company continue to grow.
Hikvision continued to advance technology accumulation in AIoT fields, gradually expanding its full-spectrum
perception technology platform from visible light to infrared, X-ray, millimeter wave and other bands. After years
of product R&D and innovation, the Company currently has nearly 30,000 product models for sale, enabling it to
better meet the fragmented demands of users. Hikvision will continue to exploit the advantages of transforming
technology to product engineering, and continue to develop new technologies and products to lead the development
of the industry.
(2) Building a technology platform to enhance comprehensive technical strength
In 2021, the Company continued to promote the construction of technology platforms, further strengthened the
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construction of underlying technology capabilities and specialized technologies, and improved R&D efficiency,
quality and skills through the reuse and empowerment of technical capabilities, thereby concentrating superior
resources to break through the core technical pain points and forming the technical foundation to support the long-
term development of product business. At present, the Company has formed a number of general technology
platforms and product technology platforms.
In 2021, leveraging its unified software technology framework, the company has gradually unlocked software
development efficiency and gradually improved its software development platform, continuously supporting the
customization and development capability of regional software.
(3) Continuous increase in inventory level to ensure continuous and stable supply
In 2021, the company proactively responded to the fluctuations and challenges caused by the imbalance
between supply and demand of certain raw materials and supply chain switching, working closely with its upstream
partners to continue to increase inventory levels, effectively cope with the industrial-wide shortage of chips, stabilize
the adverse effects caused by fluctuations in commodities, in order to ensure supply continuity. Through prudent
supply chain planning, the company was able to further solidify its advantages in product supply and price
competition.
In 2021, the company also continued to promote lean production management, improved the level of intelligent
manufacturing, optimized delivery efficiency, and overcame various challenges brought by labor and energy
consumption to ensure the steady development of business.
(4) Innovative business layout to support long-term solid growth
In 2021, five innovative business companies achieved operating income in excess of RMB one billion with
positive net profits. With the rapid development of innovative businesses, the overall contribution of innovative
businesses to the company’s total sales has further increased, and is becoming an increasingly important growth
driver for the company.
In 2021, real estate, education and other industries in China experienced large fluctuations as a result of policy
adjustments, which had a certain impact on the overall growth of EBG business. However, real estate and education
are closely related to the national economy and livelihood of the people, so they still have plenty of potentials for
future development, and it is expected that there will still be great growth in the future. SMBG and PBG business
maintained solid growth. Despite the impact of the COVID-19 epidemic in overseas markets, the company’s
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overseas market share continued to increase thanks to its good supply capacity and solid business development on
the marketing end. Diversified business layout is the guarantee for the stable growth of the company, and different
businesses form good synergy and interaction, which together help the company to achieve stability and long-term
sustainable development.
(5) Continuous promotion of digital marketing to improve the marketing system
In 2021, the Company continued to expand its marketing service network, bringing itself closer to customers
and users. At present, Hikvision has 32 provincial business centers and 309 city branches and offices nationwide,
as well as 66 overseas branches to provide products and services to 155 countries and regions around the world,
solidifying its marketing and service network presence around the world.
The Company continues to advance process management reform, enhance company-wide operational
efficiency, and improve organizational management capabilities, ensuring that it evolves and keeps up with the
times to support the company’s long-term business development.
2. Operating Incomes and Operating Costs
1) Operating income structure
Unit：RMB
2021 2020
YoY Change
Proportion to Proportion to (%)
Amount Amount
operating income operating income
Total operating income 81,420,053,539.27 100.00% 63,503,450,891.78 100.00% 28.21%
Classified by industry
AIoT products and services 81,420,053,539.27 100.00% 63,503,450,891.78 100.00% 28.21%
Classified by product
Products and services for
65,145,683,074.74 80.01% 55,720,857,614.39 87.74% 16.91%
main business 20
Constructions 4,003,746,727.88 4.92% 1,614,246,940.42 2.54% 148.03%
Subtotal 69,149,429,802.62 84.93% 57,335,104,554.81 90.29% 20.61%
Smart home business 3,948,427,896.29 4.85% 2,918,904,302.62 4.60% 35.27%
Robotic business 2,761,636,666.33 3.39% 1,358,653,520.55 2.14% 103.26%
20 Main business refers to the business parts other than the innovative businesses.
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2021 2020
YoY Change
Proportion to Proportion to (%)
Amount Amount
operating income operating income
Thermal imaging business21 2,214,127,005.65 2.72% 35,203,088.48 0.06% 6,189.58%
Auto electronics business 1,431,895,295.48 1.76% 654,061,647.69 1.03% 118.92%
Storage business 1,384,585,038.78 1.70% 791,441,667.03 1.25% 74.94%
Other innovative businesses22 529,951,834.12 0.65% 410,082,110.60 0.65% 29.23%
Subtotal 12,270,623,736.65 15.07% 6,168,346,336.97 9.71% 98.93%
Classified by region
Domestic 59,434,989,705.17 73.00% 45,806,567,913.73 72.13% 29.75%
Overseas 21,985,063,834.10 27.00% 17,696,882,978.05 27.87% 24.23%
Note: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data
due to rounding.
Operating income structure23
Unit: RMB 100mn
2021 2020 YoY Change (%) 2019
PBG 191.61 159.87 19.85% 153.14
Domestic EBG 166.29 147.24 12.94% 124.49
main SMBG 134.90 92.09 46.49% 93.46
business
Other products and services for
9.43 9.71 -2.88% 8.26
main business
Overseas Products and services for main
main business 189.26 164.44 15.09% 152.86
business
Innovative businesses24 122.71 61.68 98.93% 44.37
Total 814.20 635.03 28.21% 576.58
21 The thermal imaging business' 2020 operating income only includes thermal imaging sensor’s operating
income.
22 Other innovative businesses include the products and services of the innovative business subsidiaries, such as
HikFire, Rayin and HikImaging. Same below.
23 The operating income from domestic main business (including three major business groups in domestic and
other products and services for main business) and overseas main business only include Hikvision’s main
business’s products and services, excluding operating income from innovative businesses.
24 Innovative businesses’ operating income includes its domestic and overseas operating income
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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 YoY Change YoY Change
Operating income Operating cost Gross margin (%) of operating (%) of operating (%) of gross
income cost margin
Classified by industry
AIoT products and
81,420,053,539.27 45,329,400,332.65 44.33% 28.21% 33.49% -2.20%
services
Classified by product
Products and
services for main 65,145,683,074.74 34,944,137,550.04 46.36% 16.91% 21.60% -2.07%
business
Constructions 4,003,746,727.88 3,084,364,818.86 22.96% 148.03% 127.88% 6.81%
Innovative
12,270,623,736.65 7,300,897,963.75 40.50% 98.93% 88.77% 3.20%
businesses
Subtotal 81,420,053,539.27 45,329,400,332.65 44.33% 28.21% 33.49% -2.20%
Classified by region
Domestic 59,434,989,705.17 33,005,873,384.67 44.47% 29.75% 30.84% -0.46%
Overseas 21,985,063,834.10 12,323,526,947.98 43.95% 24.23% 41.15% -6.71%
When the statistical caliber of the Company's main business data is adjusted during the reporting period, the
Company's main business data would be adjusted according to the end of the reporting period in the most recent
period.
□ Applicable √ Inapplicable
3）If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
Industry Item Unit 2021 2020 YoY Change (%)
Sales volume Per unit 194,410,923 139,309,170 39.55%
AIoT products and
services
Output volume Per unit 207,744,025 138,254,927 50.26%
Explanation on why the related data varied by more than 30% on a YOY basis
√Applicable □Inapplicable
During the reporting period, the Company's performance maintained steady growth, while implementing a high
inventory strategy to secure the supply chain, resulting in an increase in both sales and production.
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4) Fulfillment of signed significant sales contracts and procurement contracts by the reporting period
□ Applicable √ Inapplicable
5) Operating cost structure
Classified by industry
Unit: RMB
2021 2020
YoY Change
Industry Item Proportion to Proportion to
Amount Amount (%)
operating cost operating cost
AIoT products
Operating cost 45,329,400,332.65 100.00% 33,957,697,857.73 100.00% 33.49%
and services
Classified by product
Unit: RMB
2021 2020
YoY Change
Product Item Proportion to Proportion to
Amount Amount (%)
operating cost operating cost
Products and
services for main Operating cost 34,944,137,550.04 77.09% 28,736,623,697.81 84.62% 21.60%
business
Constructions Operating cost 3,084,364,818.86 6.80% 1,353,524,939.67 3.99% 127.88%
Innovative
Operating cost 7,300,897,963.75 16.11% 3,867,549,220.25 11.39% 88.77%
businesses
Subtotal Operating cost 45,329,400,332.65 100.00% 33,957,697,857.73 100.00% 33.49%
6) Any change in consolidation scope during the reporting period
√Yes □ No
During the reporting period, the Company has newly set up one wholly-owned subsidiaries and four holding
subsidiaries, acquired two subsidiaries, added a new subsidiary due to the change in voting rights, liquidated and
cancelled four subsidiaries, reduced one subsidiary due to the cancellation of the entrusted management agreement,
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.
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) 2,763,453,340.67
Total sales to top five customers as a percentage of the total sales for the year (%) 3.39%
Total sales to the related parties in top five customers as a percentage of the total
0.00%
sales for the year (%)
Information on top five customers
No. Name of Customer Sales Amount (RMB) Percentage of total sales for the year
1 First 786,004,392.08 0.97%
2 Second 751,944,177.56 0.92%
3 Third 471,189,238.44 0.58%
4 Fourth 402,390,635.86 0.49%
5 Fifth 351,924,896.73 0.43%
Total -- 2,763,453,340.67 3.39%
Other information of major customers
□Applicable √Inapplicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 8,818,154,553.89
Total purchases from top five suppliers as a percentage of the total purchases for the year (%) 17.81%
Total purchases from the related parties in the top five suppliers as a percentage of the total
2.93%
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 4,045,973,116.10 8.17%
2 Second 1,499,990,535.26 3.03%
3 Third 1,448,578,862.48 2.93%
4 Fourth 947,822,146.38 1.91%
5 Fifth 875,789,893.67 1.77%
Total -- 8,818,154,553.89 17.81%
Other information of major suppliers
□ Applicable √ Inapplicable
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3. Expenses
Unit: RMB
YoY Change
2021 2020 Note of significant change
(%)
Continue to increase investment in domestic
Selling expenses 8,586,443,668.02 7,377,790,744.58 16.38%
and overseas marketing networks
Due to the expansion of the Company's
Administrative expenses 2,132,250,463.96 1,790,013,088.76 19.12% business scale and increased number of
employees
Affected by foreign exchange rate fluctuations,
Financial expenses -133,343,257.84 396,254,772.56 -133.65%
foreign exchange losses decreased
R&D expenses 8,251,645,101.39 6,378,651,762.42 29.36% Continue to increase R&D investment
4. R&D Investment
√Applicable □Inapplicable
R&D personnel of the Company
2021 2020 Change Percentage
Number of R&D staff (ppl) 25,352 20,597 23.09%
R&D staff as percentage of Total
48.06% 48.25% -0.19%
headcount
Education structure of R&D staff - - -
Bachelor degree 16,305 12,873 26.66%
Master’s degree 7,159 6,275 14.09%
Master’s degree or above 129 100 29.00%
others 1,759 1,349 30.39%
Age composition of R&D staff - - -
Under 30 years old 15,388 12,945 18.87%
30-40 years old 9,425 7,324 28.69%
Over 40 years old 539 328 64.33%
R&D investment of the Company
2021 2020 Change Percentage
Amount of R&D expenses (RMB) 8,251,645,101.39 6,378,651,762.42 29.36%
R&D expenses as a percentage of
10.13% 10.04% 0.09%
operating income
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Hikvision 2021 Annual Report
2021 2020 Change Percentage
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 and effect of significant change in the composition of the Company's R&D personnel
□ Applicable √ Inapplicable
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
5. Cash Flow
Unit: RMB
Item 2021 2020 YoY Change (%)
Subtotal of cash inflows from
90,984,859,750.26 72,871,160,858.85 24.86%
operating activities
Subtotal of cash outflows from
78,276,335,063.27 56,783,004,292.18 37.85%
operating activities
Net cash flows from operating
12,708,524,686.99 16,088,156,566.67 -21.01%
activities
Subtotal of cash inflows from
6,370,051,168.33 1,904,368,743.55 234.50%
investing activities
Subtotal of cash outflows from
9,526,380,351.62 4,459,002,700.82 113.64%
investing activities
Net cash flows from investing
-3,156,329,183.29 -2,554,633,957.27 -23.55%
activities
Subtotal of cash inflows from
6,123,487,832.52 7,057,371,569.92 -13.23%
financing activities
Subtotal of cash outflows from
15,914,985,474.12 11,617,474,855.16 36.99%
financing activities
Net cash flows from financing
-9,791,497,641.60 -4,560,103,285.24 -114.72%
activities
Net increase in cash and cash
-420,893,449.11 8,509,169,869.91 -104.95%
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 increased expenditure on stocking
during the reporting period; the main reason for the change in net cash flow from investing activities was the
purchase of long-term assets and the increase in external equity investment during the reporting period; the main
reason for the change in net cash flow from financing activities was mainly due to the net outflow of borrowings
and the increase in dividend distribution during the reporting period.
Explanation of reasons leading to the material difference between cash flow from operating activities during the
reporting period and net profit for the year
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Hikvision 2021 Annual Report
□ Applicable √ Inapplicable
IV. Non-core Business Analysis
□Applicable √Inapplicable
V. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit：RMB
December 31st 2021 January 1st 2021
YoY
Percentage Percentage Change Note of significant change
Amount of total Amount of total (%)
assets assets
Cash and bank balances 34,721,870,931.36 33.43% 35,459,729,108.27 39.82% -6.39% No significant change
Accounts receivable 26,174,773,100.42 25.20% 22,056,067,917.79 24.77% 0.43% No significant change
Operating income of
Contract assets 1,411,372,624.91 1.36% 319,404,544.10 0.36% 1.00%
constructions increased
Increase in sales led to
Inventories 17,974,112,407.60 17.31% 11,477,906,040.70 12.89% 4.42%
increased stocking
Long-term equity
982,165,546.45 0.95% 864,026,710.23 0.97% -0.02% No significant change
investment
Fixed assets 6,695,590,671.27 6.45% 5,830,677,198.85 6.55% -0.10% No significant change
Increase in construction
investments on Science
Construction in process 2,323,336,098.68 2.24% 1,425,235,193.72 1.60% 0.64%
and Technology Parks in
various locations
Right-of-use assets 566,393,672.75 0.55% 392,997,553.30 0.44% 0.11% Increase in rental of
Lease liabilities 317,951,879.21 0.31% 230,055,273.70 0.26% 0.05% buildings
Short-term borrowings 4,074,962,469.97 3.92% 3,999,246,634.59 4.49% -0.57% No significant change
Contract liabilities 2,580,894,226.59 2.48% 2,161,166,671.26 2.43% 0.05% No significant change
Long-term borrowings 3,284,371,642.52 3.16% 1,961,167,761.30 2.20% 0.96%
Decrease in project
Non-current liabilities
596,915,360.58 0.57% 3,644,798,414.28 4.09% -3.52% borrowings
due within one year
High proportion of overseas assets
□ Applicable √ Inapplicable
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2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Difference
Provision
on
Profit or loss for
translation Purchased Sales
from change in decline in
of financial amount during
Item Opening balance fair value value Other changes Closing balance
statements during the the
during the during the
dominated period period
period current
in foreign
period
currency
Financial assets
1. Derivative
financial 22,679,846.77 11,711,591.07 -71,427.01 34,320,010.83
assets
2. Other non-
current
491,939,067.27 -53,214,895.05 438,724,172.22
financial
assets
3. Receivables
for 1,959,601,195.25 -643,566,073.19 1,316,035,122.06
financing
Subtotal of
2,474,220,109.29 -41,503,303.98 -71,427.01 -643,566,073.19 1,789,079,305.11
financial assets
Financial
7,405,771.15 3,303,279.51 -40,174.07 4,062,317.57
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
Cash and bank balances 117,926,502.16 Various cash deposits and other restricted funds
Notes receivable 711,238,103.83 Endorsed to suppliers
Receivables for financing 4,337,929.69 Pledge for issuance of bank’s acceptance bills
Accounts receivable 197,358,387.51 Pledge for long-term debts
Contract assets 104,842,914.69 Pledge for long-term debts
Intangible assets 62,497,900.00 Pledge for long-term debts
Other non-current assets 1,667,721,944.32 Pledge for long-term debts
right-of-use assets 23,923,145.37 Fixed assets leased under finance leases
Total 2,889,846,827.57
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Hikvision 2021 Annual Report
VI. Investments
1. Overview
√Applicable □ Inapplicable
Investment in 2021 (RMB) Investment in 2020 (RMB) YoY (%)
2,534,882,042.80 2,666,845,621.23 -4.95%
2. Significant equity investment during the current reporting period
□Applicable √Inapplicable
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Hikvision 2021 Annual Report
3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
Unit: RMB
Reasons
for not
Investment Cumulative amount reaching
Fixed assets
Invest Project during the of investment by the Source planned Disclosure Date
Project name investment or Project schedule Disclosure Index (if applicable)
method industry current end of the current of funds progress (if applicable)
not
reporting period reporting period and
expected
benefits
AIoT Announcement on Investment and
Chengdu Science and Self- products Self- September 23rd Construction of Chengdu Science
Yes 374,660,696.76 896,287,490.09 45.52% None
Technology Park Projectbuilt and fund 2017 and Technology Park Project in
services Chengdu (No. 2017-033)
Announcement on Investment and
AIoT
Chongqing Science and Construction of Chongqing
Self- products Self- September 23rd
Technology Park Yes 175,974,725.06 425,784,975.85 100.00% None Science and Technology Park
built and fund 2017
Project-Phase II Project in Chongqing (No. 2017-
services
035)
AIoT Announcement on Investment and
Hangzhou Innovation Self- products Specific September 23rd Construction of Hangzhou
Yes 55,489,079.67 393,310,782.16 38.33% None
Industry Park built and Loan 2017 Innovation Industry Park Project
services in Hangzhou (No. 2017-034)
Security Industrial Base AIoT Announcement on Investment and
Self- Self- October 16th
(Tonglu) - Phase II Yes products 315,975,312.09 390,702,241.74 45.91% None establishment of a wholly-owned
built fund 2014
Continued Construction and subsidiary in Tonglu and new
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Hikvision 2021 Annual Report
Reasons
for not
Investment Cumulative amount reaching
Fixed assets
Invest Project during the of investment by the Source planned Disclosure Date
Project name investment or Project schedule Disclosure Index (if applicable)
method industry current end of the current of funds progress (if applicable)
not
reporting period reporting period and
expected
benefits
Project services construction of Hikvision Security
Industrial Base (Tonglu) Project
(2014-044)
AIoT Announcement on Investment and
Xi’an Science and
Self- products Self- September 23rd Construction of Xi’an Science and
Technology Park Yes 168,330,152.28 181,009,327.21 7.95% None
built and fund 2017 Technology Park in Xi’an (2017-
Project
services 031)
Smart
EZVIZ Industrial Base Self- Self-
Yes home 92,990,105.25 95,322,172.33 12.67% None - -
(Infrastructure Part) built fund
business
AIoT Announcement on Investment and
Shijiazhuang Science
Self- products Self- March 22nd Construction of Shijiazhuang
and Technology Park Yes 98,124,086.75 100,184,640.21 11.16% None
built and fund 2018 Science and Technology Park in
Project
services Shijiazhuang (2018-016)
AIoT
Security Industrial
Self- products Self-
Base (Tonglu) Phase Yes 48,109,601.71 48,768,905.95 6.33% None - -
built and fund
III
services
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Hikvision 2021 Annual Report
Reasons
for not
Investment Cumulative amount reaching
Fixed assets
Invest Project during the of investment by the Source planned Disclosure Date
Project name investment or Project schedule Disclosure Index (if applicable)
method industry current end of the current of funds progress (if applicable)
not
reporting period reporting period and
expected
benefits
AIoT
Zhengzhou Science
Self- products Self-
and Technology Park Yes 28,500,043.29 42,029,452.82 8.67% None - -
built and fund
Project
services
AIoT Announcement on Investment and
Wuhan Intelligence Self- products Self- September 23rd Construction of Wuhan
Yes 19,234,593.60 21,605,140.49 0.91% None
Industry Park Project built and fund 2017 Intelligence Industry Park in
services Wuhan (2017-036)
1,377,388,396. --
Total -- -- -- 2,595,005,128.85 -- -- -- --
46
Note: In accordance with the Company's Authorization Management System, EZVIZ Industrial Base project, Security Industrial Base (Tonglu) Phase III project and
Zhengzhou Science and Technology Park project 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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Hikvision 2021 Annual Report
(2) Derivatives Investments
√ Applicable □ Inapplicable
Unit: 0,000 RMB
Proportion
of closing
investment
Sold
amount to
Operation Initial investment Purchased amount Actual gain or
Whether Whether Type of Opening Impairment Closing the
party of amount of Initial Termination amount during during loss during
Related related derivatives investment provisions investment Company’s
derivatives derivatives date date the reporting the the reporting
party transaction investment amount (if any) amount net assets
investment investment period reporting period
at the end
period
of the
reporting
period
foreign October
Commercial August
No No exchange 351,670.38 21st 351,670.38 693,947.52 205,031.34 3.14% 11,360.81
bank 30th 2024
contract 2020
Total 351,670.38 -- -- 351,670.38 693,947.52 205,031.34 3.14% 11,360.81
Capital source of derivatives investment Company’s own fund
Prosecution (if applicable) Inapplicable
Announcement date for approvals of
derivatives investment from the Board of April 17th 2021
Directors (if any)
Announcement date for approvals of
derivatives investment from the general Inapplicable
meeting of shareholders (if any)
Risk analysis and control measures For details of the risk analysis and control measures, please refer to the Announcement on Conducting Foreign Exchange Hedging Transactions in
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Hikvision 2021 Annual Report
(including but not limited to, market risk, 2021 (NO. 2021-030) dated April 17th 2021 of the Company
liquidity risk, credit risk, operational risk,
legal risk, etc.) of holding derivatives during
the reporting period
Change of market price or fair value of
invested derivatives during the reporting The Company carried out recognition and measurement in accordance with the Accounting Standards for Business Enterprises Article 22 -
period; specific methods, related Recognition and Measurement of Financial Instruments, Chapter VII "Determination of Fair Value". During the reporting period, a total of RMB
assumptions and parameter setting of the 15.01 million of gains from changes in fair value of derivatives were recognized, and the fair value is determined according to the exchange rate
derivatives’ fair value analysis should be and interest rate provided by banks and other pricing service institutions, measured and recognized on a monthly basis.
disclosed
During the current reporting period, whether
there was significant changes of accounting
policies and accounting principles of the Inapplicable
Company’s derivatives comparing to the
prior reporting period
The relevant approval procedures for the Company’s foreign exchange hedging business complies with the relevant national laws and regulations
and the relevant provisions of the Articles of Association. The Company has established a sound process for the organization, business operation
Specific opinions on the Company’s
and approval for conducting foreign exchange hedging business, as well as the Foreign Exchange Hedging Management System. Under the premise
derivatives investments and risk control
of ensuring normal production and operation, the Company conducts foreign exchange hedging business, which enables the Company to avoid and
from independent directors
prevent sharp exchange rate fluctuations and its adverse effects on the Company’s operations, and contributes to controlling foreign exchange risks.
There is no damage to the interests of the Company nor of its shareholders.
5. Use of raised funds
□ Applicable √ Inapplicable
During the reporting period, there was no use of raised fund
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Hikvision 2021 Annual Report
VII. Disposal of Significant Assets and Equity
1. Disposal of significant assets:
□ Applicable √ Inapplicable
There is no disposal of significant asset for the Company during the current reporting period.
2. Sale of significant equity:
□ Applicable √ Inapplicable
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Hikvision 2021 Annual Report
VIII. Analysis of Major Subsidiaries and Holding Companies
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Inapplicable
Equity acquisition and disposal
Company name Impact on overall production results
method during the reporting period
Daishan Hailai Yunzhi Technology Co., Ltd. Change in voting rights Business development
EQUIPOS PROFESIONALES DE
Transfer of equity in cash Expand overseas sales channels
COMUNICACIN S.A. DE C.V.
SISTEMAS Y SERVICIOS DE COMUNICACIN,
Transfer of equity in cash Expand overseas sales channels
S.A. DE C.V.
Shanghe Smart City Technology Co., Ltd. Cash contribution Business development
Chongqing EZVIZ Electronics Co., Ltd. Cash contribution Business development
Hangzhou Hikrobot Automation Co., Ltd. Cash contribution Business development
Hangzhou Haina Yuzhi Entrepreneurship Investment
Cash contribution Business development
Partnership Co., Ltd.
Hikvision Chile SpA Cash contribution Expand overseas sales channels
Releasing the entrustment
Hangzhou EZVIZ Technology Co., Ltd. Reorganization
agreement
Hundure Technology (Shanghai) Co., Ltd. Liquidation & cancellation Reorganization
Secure Holding Limited Liquidation & cancellation Reorganization
Guangzhou Hikvision Technology Co., Ltd. Liquidation & cancellation Reorganization
Hikvision Joint-Stock Company
Liquidation & cancellation Reorganization
(Original name: ZAO Hikvision)
IX. Structural Entities Controlled by the Company
□ Applicable √ Inapplicable
X. Outlook for the Future Development of the Company
1. Development Trends for the Industry
AIoT is a fundamental capability that provides the possibility of connection and interaction between people
and things as well as between things. This is happening right now, with a huge impact on the way decisions are
made. Boasting a trillion RMB-level market potential, AIoT will set off a wave of technological innovation that will
sweep across thousands of industries with unprecedented changes.
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Hikvision 2021 Annual Report
Proceeding from industrial businesses based on large-scale scenarios, the company has made abundant
preparations in many aspects such as supporting technologies, software and hardware products, system capabilities,
business organization and marketing systems that related to AIoT. We are confident that Hikvision will be able to
seize the opportunities brought by the rapid development of AIoT.
2. Development strategy of the company
In the future, Hikvision is committed to serving various industries through its cutting-edge technologies of
machine perception, artificial intelligence, and big data, leading the future of AIoT：Through comprehensive
machine perception technologies, we aim to help people better connect with the world around them; With a wealth
of intelligent products, we strive to identify and satisfy diverse demands by delivering intelligence at your fingertips;
Through innovative AIoT applications, we are dedicated to empowering every individual to enjoy a better future by
building an intelligent world that is more convenient, efficient and secure.
3. Key priorities in 2022
(1) Continuously investing in R&D to preserve advantages in technical and product R&D.
(2) Firmly implement business strategies and seize more business opportunities.
(3) Continue to expand city-based business layout in Chinese, promote the differentiated layout of “One
Country, One Policy” in overseas, and optimize the coordination and division of responsibilities between the
headquarters and regional centers.
(4) Expand the scale of innovative businesses, pursuing better market positions in their respective segments,
and strengthen the cooperation between core business and new innovative businesses.
(5) Strengthen the coordination of R&D, production and sales, and maintain prudent supply chain management
to ensure supply chain security.
(6) Promote the integration and mutual promotion of the Company’s organizational framework, improve
operational efficiency, and give full play to the advantages of economies of scale.
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Hikvision 2021 Annual Report
XI. Reception of Activities including Research, Communication and Interviews during the
Report Period
√ Applicable □ Inapplicable
The main content of
Type of
Time of Location of Method of the discussion and Index of basic situation of the
reception Reception object
reception reception reception the information research
object
provided
106 investors
December Headquarters CNINF, Investor Relations
Site Research including China The Company's
22nd 2020 – meeting room Institutional Activity Record: From
and telephone Asset operating conditions
January 11th of the investors December 22nd 2020 to
communication Management- and future prospects
2021 Company January 11th 2021
Zhang Fan, etc.
138 investors
January 12th Headquarters CNINF, Investor Relations
Site Research including The Company's
2021 – meeting room Institutional Activity Record: From
and telephone Huachuang operating conditions
January 29th of the investors January 12th 2021 to January
communication Securities-Meng and future prospects
2021 Company 29th 2021
Can, etc.
Headquarters 56 investors CNINF, Investor Relations
February 1st Site Research The Company's
meeting room Institutional including Haitong Activity Record: From
2021 – March and telephone operating conditions
of the investors Securities-Wang February 1st 2021 to March
2nd 2021 communication and future prospects
Company Jing, etc. 2nd 2021
Headquarters 145 investors
March 3rd Site Research The Company's CNINF, Investor Relations
meeting room Institutional including Orient
2021 – March and telephone operating conditions Activity Record: From March
of the investors Securities-Kuai
17th 2021 communication and future prospects 3rd 2021 to March 17th 2021
Company Jian, etc.
Headquarters 928 investors The Company's
Performance Institutional CNINF, Investor Relations
April 17th meeting room including E-fund operations in 2020
result investors; Activity Record: April 17th
2021 of the Management-Ni and the first quarter
conference call individuals 2021
Company Chunyao, etc. of 2021
220 investors
Headquarters
April 18th Site Research including Ping An The Company's CNINF, Investor Relations
meeting room Institutional
2021 – April and telephone Fund operating conditions Activity Record: From April
of the investors
30th 2021 communication Management-Zhu and future prospects 18th 2021 to April 30th 2021
Company
Chunyu, etc.
95 investors
Headquarters including Bosera
May 10th 2021 Site Research The Company's CNINF, Investor Relations
meeting room Institutional Asset
– May 21st and telephone operating conditions Activity Record: From May
of the investors Management-
2021 communication and future prospects 10th 2021 to May 21st 2021
Company Chen Pengyang,
etc.
May 24th 2021 Headquarters Site Research Institutional 79 investors The Company's CNINF, Investor Relations
136
Hikvision 2021 Annual Report
The main content of
Type of
Time of Location of Method of the discussion and Index of basic situation of the
reception Reception object
reception reception reception the information research
object
provided
– June 11th meeting room and telephone investors including Orient operating conditions Activity Record: From May
2021 of the communication Securities Asset and future prospects 24th 2021 to June 11th 2021
Company Management-
Zhang Mingyu,
etc.
39 investors
Headquarters including
June 15th 2021 Site Research The Company's CNINF, Investor Relations
meeting room Institutional Shenwan
– June 25th and telephone operating conditions Activity Record: From June
of the investors Hongyuan Asset
2021 communication and future prospects 15th 2021 to June 25th 2021
Company Management-Qin
Qing, etc.
Headquarters 908 investors
Performance Institutional The Company's CNINF, Investor Relations
meeting room including Essence
July 24th 2021 result investors; operations in the Activity Record: July 24th
of the Fund-Chen
conference call individuals first half of 2021 2021
Company Zhenyu, etc.
136 investors
Headquarters including
July 26th 2021 Site Research The Company's CNINF, Investor Relations
meeting room Institutional Perseverance
– August 6th and telephone operating conditions Activity Record: From July
of the investors Asset
2021 communication and future prospects 26th 2021 to August 6th 2021
Company Management-
Zhang Jifeng, etc.
84 investors
Headquarters
August 9th Site Research including Taikang The Company's CNINF, Investor Relations
meeting room Institutional
2021 – August and telephone Asset operating conditions Activity Record: From August
of the investors
27th 2021 communication Management-Li and future prospects 9th 2021 to August 27th 2021
Company
Xiaojin, etc.
68 investors
August 30th Headquarters CNINF, Investor Relations
Site Research including Yinhua The Company's
2021 – meeting room Institutional Activity Record: From August
and telephone Fund operating conditions
September of the investors 30th 2021 to September 17th
communication Management-Du and future prospects
17th 2021 Company 2021
Yu, etc.
Headquarters 620 investors
Performance Institutional The Company's
October 23rd meeting room including ICBC CNINF, Investor Relations
result investors; operations in the
2021 of the Credit Suisse- Activity Record: October 23rd
conference call individuals third quarter of 2021
Company Yang Ke, etc.
November Headquarters 39 investors CNINF, Investor Relations
Site Research The Company's
15th 2021 – meeting room Institutional including Fullgoal Activity Record: From
and telephone operating conditions
December 3rd of the investors Fund-Zhou November 15th 2021 to
communication and future prospects
2021 Company Zongzhou, etc. December 3rd 2021
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The main content of
Type of
Time of Location of Method of the discussion and Index of basic situation of the
reception Reception object
reception reception reception the information research
object
provided
December 14th Headquarters 37 investors CNINF, Investor Relations
Site Research The Company's
2021 – meeting room Institutional including Activity Record: From
and telephone operating conditions
December 31st of the investors Tianhong Fund- December 14th 2021 to
communication and future prospects
2021 Company Zhang Tao, etc. December 31st 2021
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Section IV 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 “Shenzhen Stock Exchange Listed Companies Self-
Regulatory Supervision Guidelines No. 1 - Standardized Operation of Main Board Listed Companies” as well as
the requirements of the regulations and regulatory documents of the regulatory authorities, through continuous
improvement of the “3+1” corporate governance structure comprising shareholders’ meeting, the Board of Directors,
the Board of Supervisors, and the management taking into consideration the actual situation of the Company, and
strictly follow the principle of disclosing information in a true, accurate, complete, timely and impartial manner; we
have also established and improved internal management and control system, promoted the standardized operation
of the Company 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 held a total of 3 general meetings of shareholders, all of which were
convened by the Company's 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, organizations, 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 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
shareholders with a view to the interests of the Company and shareholders. The independent directors of the
Company performed their duties independently and unaffected in accordance with the "Rules for Independent
Directors of Listed Companies" and other relevant regulations, attended the Company's Board of Directors and
shareholders' general meetings, and expressed their independent opinions on matters involving the interests of small
and medium investors such as related transactions and external guarantees, which ensured the standardized
operation of the Company.
During the reporting period, the Company convened 9 board meetings, reviewed and approved 84 proposals
including the “Annual Report 2020 and its Summary”, “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”, “2021
Restricted Stock Plan (Revised Draft) and its Summary” and “Proposal on Authorizing the Company's Management
to Start the Spin-off for the Preliminary Preparations for Listing on the Domestic Stock Markets of the Subsidiary,
Hangzhou Hikrobot Technology Co., Ltd..”, 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.
During the reporting period, the Company held 9 Board of Supervisors’ meetings, reviewed and approved 40
proposals including the "2021 Restricted Stock Scheme (Revised Draft) and its Summary" and " Participant List of
the 2021 Restricted Stock Scheme ", and to verify the participant list specified in the "2021 Restricted Stock Scheme
(Revised Draft)". It concludes that the participants listed in the restricted stock scheme are qualified according to
relevant laws, regulations and normative documents such as the "Measures for the Management of Equity Incentives
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of Listed Companies", and are within the scope of the participants specified in the Company's 2021 restricted stock
scheme, and their qualifications as the participants in the 2021 restricted stock scheme are legal and effective, which
is conductive to the effective performance of the responsibilities of the Board of Supervisors.
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 scheme
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
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 78 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 11 consecutive years in the main board listed company information disclosure assessment.
7. Continue to improve the internal management system
In accordance with the latest revisions of relevant laws, administrative regulations and normative documents
such as the “Company Law” and the “Securities Law”, the Company revised the “Rules of Procedure for the
General Meeting of Shareholders”, the “Rules of Procedure for the Board of Directors”, the “Work Regulations for
the Independent Directors” and other internal management systems based on the actual situation of the Company
during the reporting period. The Company strengthened the internal management, further improved the corporate
governance structure, promoted the Company's compliance operation, and protected the legitimate rights and
interests of the Company and shareholders.
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8. Investor relations activities
The Company has proactively organized performance briefings after the disclosure of regular reports, held
investor reception activities to actively listen 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 investor relations efforts
have been recognized by the capital market through the following awards: “Top 100 Chinese Main Board Listed
Companies” in the 15th China’s Most Valuable Listed Company Selection hosted by the Securities Times, “Top 50
Companies of Market Value” in the Wind 2021 Listed Company Market Value Ranking, “Top 5 Companies in
Technology Hardware and Equipment Industry”, “Top 50 Most Popular Listed Companies Ranked by Institutions”,
“Top 50 A-share Companies in the Hot List by Institutional Research” by Wind, “Top 100 Companies with High
Quality Development” in the 2021 China’s Listed Company with High Quality Development Selection hosted by
Yinshi Finance and Economics, “Outstanding Company with Investment Value for the Year” and “Listed Company
Most Preferred at Public Offerings for the Year” in the 2021 Jing Luan Award for Chinese Listed Companies hosted
by JHB show.
Any significant incompliance for the laws, administrative regulations and 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 laws, administrative regulations and the relevant regulatory
documents issued by China Securities Regulatory Commission in respect of the Company’s corporate governance.
II. Company’s Independence in Assets, Personnel, Finances, Organizations and Businesses
from Controlling Shareholders and Actual Controller
The Company is completely independent in business, personnel, assets, organizations, and finances from its
shareholders. The Company has established a sound internal control system, being capable of operating
independently with its complete and independent business.
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(1) Business independence: The Company has 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 is 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 of Directors, Board of Supervisor,
management and other internal organizations operate 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 a standardized financial accounting system and a financial management
system for the Company’s branches and subsidiaries, and 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.
III. Horizontal Competition
□ Applicable √ Inapplicable
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IV. Annual General Meeting and Extraordinary General Meetings Convened during the
Reporting Period
1. General Meetings Convened during the Reporting Period
Proportion
of
Meeting Nature Convened Date Disclosure Date Resolution of the Meeting
participating
investors
9 proposals including the
Proposal on Election of
Non-Independent Directors
The 1st Extraordinary General Extraordinary of the 5th Session of the
Meeting of Shareholders in General Meeting 70.0131% March 5th 2021 March 6th 2021 Board of Directors were
2021 of Shareholders reviewed and voted. For
details, please refer to the
Company's announcement:
No. 2021-020.
20 proposals including the
2020 Annual Report and
Summary were reviewed
Annual General
2020 Annual General Meeting 70.2837% May 14th 2021 May 15th 2021 and voted. For details,
Meeting
please refer to the
Company's announcement:
No. 2021-039.
10 proposals including the
Proposal on the spin-off of
the Company’s subsidiary
Hangzhou EZVIZ Network
Co., Ltd. to be listed on the
The 2nd Extraordinary General Extraordinary Science and Technology
September 27th
Meeting of Shareholders in General Meeting 69.1732% September 28th 2021 Innovation Board in
2021
2021 of Shareholders compliance with relevant
laws and regulations were
reviewed and voted. For
details, please refer to the
Company's announcement:
No. 2021-058.
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with Resumed
Voting Rights:
□ Applicable √ Inapplicable
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V. Information about Directors, Supervisors, Senior Management
1. Basic Situation
Shares Shares
Shares held at increased decreased Shares held at
Commencement of Termination of the beginning Reasons for increase
Name Title Tenure status Gender Age during the during the the end of the
term of office term of office of the Period or decrease of shares
(Shares) Period Period Period (Shares)
(shares) (Shares)
Chen
Chairman Incumbent Male 57 June 19th 2008 March 4th 2024 0 0 0 0 --
Zongnian
Qu Liyang Director Incumbent Male 58 March 7th 2018 March 4th 2024 15,750 0 0 15,750 --
Wang
Director Incumbent Male 71 March 5th 2021 March 4th 2024 35,000 0 0 35,000 --
Qiuchao
Director,
Hu Personal financial
General Manager Incumbent Male 57 December 28th 2001 March 4th 2024 182,186,477 0 26,940,000 155,246,477
Yangzhong needs
(CEO)
Director,
Personal financial
Wu Weiqi Standing Deputy Incumbent Male 58 March 1st 2003 March 4th 2024 11,371,389 0 2,740,300 8,631,089
General Manager needs
Independent
Wu Xiaobo Incumbent Male 62 March 5th 2021 March 4th 2024 0 0 0 0 --
Director
Independent
Hu Ruimin Incumbent Male 58 March 5th 2021 March 4th 2024 0 0 0 0 --
Director
Independent
Li Shuhua Incumbent Male 51 March 5th 2021 March 4th 2024 0 0 0 0 --
Director
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Hikvision 2021 Annual Report
Shares Shares
Shares held at increased decreased Shares held at
Commencement of Termination of the beginning Reasons for increase
Name Title Tenure status Gender Age during the during the the end of the
term of office term of office of the Period or decrease of shares
(Shares) Period Period Period (Shares)
(shares) (Shares)
Guan Independent
Incumbent Male 45 March 5th 2021 March 4th 2024 0 0 0 0 --
Qingyou Director
Hong Supervisor
Incumbent Male 56 March 5th 2021 March 4th 2024 0 0 0 0 --
Tianfeng Chairman
Xu Lirong Supervisor Incumbent Male 59 March 21st 2018 March 4th 2024 303,000 0 0 303,000 --
Lu
Supervisor Incumbent Male 68 March 5th 2021 March 4th 2024 0 0 0 0 --
Jianzhong
Senior Deputy
He Hongli Incumbent Female 49 December 18th 2005 March 11th 2024 331,500 0 0 331,500 --
General Manager
Cai Senior Deputy
Incumbent Male 51 April 8th 2016 March 11th 2024 109,500 0 0 109,500 --
Changyang General Manager
Senior Deputy
Xu Ximing Incumbent Male 49 October 11th 2016 March 11th 2024 197,000 0 0 197,000 --
General Manager
Senior Deputy
Bi Huijuan Incumbent Female 51 October 11th 2016 March 11th 2024 273,000 0 0 273,000 --
General Manager
Senior Deputy
Pu Shiliang Incumbent Male 45 March 21st 2018 March 11th 2024 295,900 0 0 295,900 --
General Manager
Senior Deputy
Jin Duo Incumbent Male 57 March 10th 2015 March 11th 2024 109,500 0 0 109,500 --
General Manager
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Hikvision 2021 Annual Report
Shares Shares
Shares held at increased decreased Shares held at
Commencement of Termination of the beginning Reasons for increase
Name Title Tenure status Gender Age during the during the the end of the
term of office term of office of the Period or decrease of shares
(Shares) Period Period Period (Shares)
(shares) (Shares)
Senior Deputy
General Manager,
Jin Yan Incumbent Female 43 July 22nd 2015 March 11th 2024 284,000 0 0 284,000 --
Person in charge
of finance
Senior Deputy
Huang
General Manager, Incumbent Female 40 April 8th 2016 March 11th 2024 402,500 0 0 402,500 --
Fanghong
Board Secretary
Senior Deputy
Chen Junke Incumbent Male 51 March 21st 2018 March 11th 2024 0 0 0 0 --
General Manager
Senior Deputy Personal financial
Xu Peng Incumbent Male 46 March 12th 2021 March 11th 2024 128,740 0 51,496 77,244
General Manager needs
Senior Deputy Personal financial
Guo Xudong Incumbent Male 50 March 12th 2021 March 11th 2024 73,800 0 29,520 44,280
General Manager needs
Gong Personal financial
Vice Chairman Resigned Male 57 June 19th 2008 March 5th 2021 1,016,614,814 0 54,110,000 962,504,814
Hongjia needs
Cheng Independent
Resigned Male 70 March 6th 2015 March 5th 2021 0 0 0 0 --
Tianzong Director
Wang Independent
Resigned Male 55 March 6th 2015 March 5th 2021 0 0 0 0 --
Zhidong Director
Cheng Supervisor
Resigned Female 69 March 6th 2015 March 5th 2021 0 0 0 0 --
Huifang Chairman
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Hikvision 2021 Annual Report
Shares Shares
Shares held at increased decreased Shares held at
Commencement of Termination of the beginning Reasons for increase
Name Title Tenure status Gender Age during the during the the end of the
term of office term of office of the Period or decrease of shares
(Shares) Period Period Period (Shares)
(shares) (Shares)
Senior Deputy Personal financial
Fu Baijun Resigned Male 50 January 20th 2009 March 12th 2021 495,000 0 126,000 369,000
General Manager needs
Senior Deputy
Jiang Yufeng Resigned Male 51 December 18th 2005 March 12th 2021 325,500 0 0 325,500 --
General Manager
Total -- -- -- -- -- -- 1,213,552,370 0 83,997,316 1,129,555,054 --
Note:
(1) Number of 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
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 5th session of the Board of Directors, Hong Tianfeng and Lu Jianzhong were elected as supervisors
of the Company's 5th session of the Board of Supervisors.
(3) On March 12th 2021, Gong Hongjia, Fu Baijun and Jiang Yufeng resigned from the Company’s senior management position. Xu Lirong resigned from the
Company’s person in charge of internal audit.
Any resignation of directors or supervisors and dismissals of senior management personnel during their term of office during the reporting period.
□Yes √No
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Hikvision 2021 Annual Report
Change of directors, supervisors and senior management personnel
√Applicable □Inapplicable
Name Position Types of change Date Reason
Appointment and
Wang Qiuchao Director March 5th 2021 General election
dismissal
Wu Xiaobo Independent Director Elected March 5th 2021 General election
Hu Ruimin Independent Director Elected March 5th 2021 General election
Li Shuhua Independent Director Elected March 5th 2021 General election
Guan Qingyou Independent Director Elected March 5th 2021 General election
Chairman of the Board of Appointment and
Hong Tianfeng March 5th 2021 General election
Supervisors dismissal
Appointment and
Lu Jianzhong Supervisor March 5th 2021 General election
dismissal
Left the position after the
Gong Hongjia Director March 5th 2021 Tenure expires
expiry of his tenure
Left the position after the
Cheng Tianzong Independent Director March 5th 2021 Tenure expires
expiry of his tenure
Left the position after the
Lu Jianzhong Independent Director March 5th 2021 Tenure expires
expiry of his tenure
Left the position after the
Wang Zhidong Independent Director March 5th 2021 Tenure expires
expiry of his tenure
Left the position after the
Hong Tianfeng Independent Director March 5th 2021 Tenure expires
expiry of his tenure
Chairman of the Board of Left the position after the
Cheng Huifang March 5th 2021 Tenure expires
Supervisors expiry of her tenure
Left the position after the
Wang Qiuchao Supervisor March 5th 2021 Tenure expires
expiry of his tenure
Senior Deputy General
Xu Peng Hired March 12th 2021 General appointment
Manager
Senior Deputy General
Guo Xudong Hired March 12th 2021 General appointment
Manager
Left the position after the
Gong Hongjia Vice Chairman March 12th 2021 Tenure expires
expiry of his tenure
Senior Deputy General Left the position after the
Fu Baijun March 12th 2021 Tenure expires
Manager expiry of his tenure
Senior Deputy General Left the position after the
Jiang Yufeng March 12th 2021 Tenure expires
Manager expiry of his tenure
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Hikvision 2021 Annual Report
2. 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 of 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
(hereinafter referred to as “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. 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. Wang Qiuchao (王秋潮): Born in 1951, master degree in law. Wang served as director of Zhejiang T&C 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 T&C 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.
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.
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Hikvision 2021 Annual Report
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. 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.
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.
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
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Hikvision 2021 Annual Report
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.
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.
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.
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 Hong Hai Corporation (鸿海集团) from July 2007 to 2012, and the chief executive officer of FIH
Mobile Limited, a subsidiary of Hong 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
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Hikvision 2021 Annual Report
(left after the expiry of his tenure on March 5th 2021)
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 (北京海淀区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).
2) Supervisors
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
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.
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
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Certificated Public Accountants LLP (中兴华会计师事务所) from August 2014 to January 2016; he was a
chartered accountant of Dahua Certificated Public Accountants LLP (大华会计师事务所) from January 2016 to
December 2021. Lu has served as an independent director of Hikvision. Lu currently serves as a chartered
accountant of Zhongxinghua Certificated Public Accountants LLP Shanghai Branch, 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.
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.
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 currently 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).
3) Senior Management Personnel
Mr. Hu Yangzhong (胡扬忠): Please refer to his profile in preceding part of the report.
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.
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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 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. 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
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Hikvision 2021 Annual Report
currently serves as a senior deputy general manager and the person in charge of finance and accounting of the
Company.
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 52nd Research 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.
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.
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 Technology 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
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Hikvision 2021 Annual Report
general manager and the person in charge of accounting department, 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. 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).
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
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Cheng Zhejiang AIoT Technology Legal
February 2004 N
Zongnian Magazine Representative
Cheng
CETC Finance Ltd. Director December 2012 January 2021 N
Zongnian
Cheng
Phoenix Optics Co., Ltd. Chairman December 2019 N
Zongnian
Wang Qiuchao Zhejiang T&C Law Firm Partner August 1993 Y
Independent
Wang Qiuchao KaiShan Group Co., Ltd. May 2015 May 2021 Y
Director
Independent
Wang Qiuchao Botsy Technology Co., Ltd May 2020 Y
Director
Xinjiang Pukang Investment
Wu Weiqi Executive Partner April 2011 N
Management Limited
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Partnership
Wuhu Sensor Tech Intelligent
Wu Weiqi Director January 2017 N
Technology Ltd.
Maxio Technology December
Wu Weiqi Director May 2017 N
(Hangzhou) Co., Ltd. 2021
Hangzhou Qianmo Tongzhou
Enterprise Management
Wu Weiqi Executive Partner July 2021 N
Consulting Partnership
(Limited Partnership)
Shanghai Yirui Management
Wu Xiaobo Director April 2004 N
Consultants Co., Ltd
Hangzhou Co-Rui Enterprise
Wu Xiaobo Management Consulting Co., Director April 2011 N
Ltd
Ningbo Industrial Internet Independent
Wu Xiaobo May 2018 Y
Research Institute Co., Ltd director
Independent
Wu Xiaobo Eddy Co., Ltd August 2018 Y
director
Zhongliang Holdings Group Independent
Wu Xiaobo June 2019 Y
Co., Ltd director
Ruihua Innovation
Wu Xiaobo Management Research Director November 2019 N
Institute (Hangzhou) Co., Ltd
Independent
Wu Xiaobo UCloud Technology Co., Ltd June 2020 Y
director
Zhongtian Holding Group Independent
Wu Xiaobo July 2021 Y
Co., Ltd. director
Xi'an ShaanGu Power Co., Independent
Li Shuhua May 2018 Y
Ltd director
Shenzhen Dongfang Fuhai Managing Partner
Li Shuhua Investment Management Co., of Oriental Fortune July 2018 Y
Ltd. M&A Fund
Shenzhen Yuanzhi Fuhai Chairman of the
Li Shuhua Investment Management Co., Board of July 2018 N
Ltd. Supervisors
Li Shuhua Luoyang Yuchuan Yuye Independent August 2018 Y
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Group Co., Ltd director
BOMESC Offshore
Independent December
Li Shuhua Engineering Company December 2018 Y
director 2021
Limited
Changzhou Guangyang
Li Shuhua Director & CEO August 2019 N
Holdings Co., Ltd
Li Shuhua Changzhou NRB Co., Ltd Chairman October 2019 Y
Legal representative
Weihai Shiyi Electronics Co.,
Li Shuhua and Chairman of December 2020 N
Ltd
the board
Independent
Li Shuhua Juzhengyuan Co., Ltd. December 2020 Y
director
Guangdong Shengyi Independent
Li Shuhua October 2021 Y
Technology Co., Ltd. director
Beijing Minjin Information
Guan Qingyou Supervisor September 2017 N
Consulting Services Co., Ltd
Beijing Rushiwo Research
Executive
Guan Qingyou Information Consulting December 2017 Y
Director&CEO
Service Co., Ltd.
Independent
Guan Qingyou Midea Group Co., Ltd. August 2018 Y
director
Beijing Xincai Zhibei
Guan Qingyou Information Technology Co., Supervisor October 2018 N
Ltd
Independent
Guan Qingyou South China Futures Co., Ltd March 2019 Y
director
Beijing Film Spectrum Independent
Guan Qingyou March 2019 Y
Technology Co., Ltd director
Shanxi International Trust Independent
Guan Qingyou July 2019 Y
Co., Ltd director
Shandong Expressway Road Independent
Guan Qingyou January 2021 Y
and Bridge Group Co., Ltd director
Beijing Rushi Chengjin
Guan Qingyou Information Consulting CEO October 2016 N
Service Co., Ltd.
Guan Qingyou Beijing Rushiwo Research Executive May 2020 N
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Institute of Science and Director&CEO
Technology Co., Ltd.
Beijing Rushi Wancheng
Executive
Guan Qingyou Technology Development Co., June 2020 N
Director& CEO
Ltd.
Hainan Wuyongtang
Executive
Guan Qingyou Information Technology Co., July 2020 N
Director& CEO
Ltd.
Beijing Yaocen Yuanmu
Executive
Guan Qingyou Information Technology Co., July 2020 N
Director& CEO
Ltd.
Qingdao Rushiwo Research
Executive
Guan Qingyou Investment Management Co., September 2020 N
Director& CEO
Ltd.
Beijing Ruoan Jiatai Executive
Guan Qingyou December 2020 N
Technology Co., Ltd. Director& CEO
Shanghai Fangguang
Hong Tianfeng Executive Director February 2012 Y
Investment Management Ltd.
Shanghai Fangguang Venture
Investment Management
Hong Tianfeng Managing Partner June 2012 N
Partnership Enterprise
(Limited Partnership)
Shanghai Fangguang Venture
Investment Partnership
Hong Tianfeng Managing Partner August 2012 N
Enterprise (Limited
Partnership)
Shanghai Fangguang Erqi
Venture Investment
Hong Tianfeng Managing Partner September 2016 N
Partnership Enterprise
(Limited Partnership)
Suzhou Fangguang Venture
Investment Management
Hong Tianfeng Managing Partner September 2012 N
Partnership Enterprise
(Limited Partnership)
Suzhou Fangguang Venture
Investment Partnership
Hong Tianfeng Managing Partner September 2012 N
Enterprise (Limited
Partnership)
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Suzhou Fangguang Venture
Investment Phase II
Hong Tianfeng Managing Partner July 2016 N
Partnership Enterprise
(Limited Partnership)
Shenzhen Pengfenghui Executive Director
Hong Tianfeng June 2014 March 2021 N
Venture Investment Ltd. & CEO
Shenzhen Fangguang
Executive Director
Hong Tianfeng Enterprise Management May 2016 N
& CEO
Consulting Ltd.
Sannuo Biology Sensor Co.,
Hong Tianfeng Director September 2013 Y
Ltd.
Shenzhen YunZhiXun
Hong Tianfeng Director May 2014 N
Network Technology Ltd.
Jiangsu JiTaiKe Electrics Co., December
Hong Tianfeng Director July 2015 N
Ltd. 2021
Zhongwei Dahe Cloud
Hong Tianfeng Connection Network Director November 2016 N
Technology Ltd.
Shenzhen DongFengMingTu
Hong Tianfeng Supervisor August 2016 N
Enterprise Management Ltd.
Beijing ZhiZhangYi Sicence
Hong Tianfeng Director December 2016 N
and Technology Ltd.
CETC Huayun Information
Hong Tianfeng Director March 2017 N
Technology Ltd.
Shenzhen YingFeiYuan
Hong Tianfeng Director October 2017 N
Technology Ltd.
Shenzhen Chip and Semi-
Hong Tianfeng Director February 2018 N
conductor Technology Ltd.
Guangzhou Smart Software
Hong Tianfeng Director March 2018 N
Ltd.
Shanghai Daxian Intelligent
Hong Tianfeng Director June 2018 N
Science and Technology Ltd.
Quanzhi Technology
Hong Tianfeng Director July 2018 N
(Hangzhou) Co., Ltd.
Shenzhen Zhongtu Instrument
Hong Tianfeng Director February 2021 N
Co., Ltd.
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Shanghai Fanglan Enterprise Executive Director
Hong Tianfeng March 2021 N
Management Center & CEO
Antai College of Economics
Lu Jianzhong Corporate mentor December 2013 N
and Management, SJTU
Dahua Certificated Public Chartered December
Lu Jianzhong January 2016 N
Accountants LLP Accountant 2021
Zhongxinghua Certified
Chartered
Lu Jianzhong Public Accountants LLP January 2022 N
Accountant
(Shanghai Branch)
ChangShu FengFan Electric Independent November
Lu Jianzhong September 2015 Y
Power Equipment Co., Ltd. Director 2021
Ningbo Lehui International
Independent December
Lu Jianzhong Construction Equipment Co., March 2016 Y
Director 2021
Ltd.
COSCO Maritime Transport Independent
Lu Jianzhong January 2018 Y
Development Co., Ltd. Director
Shanghai Xinnanyang Angli
Independent
Lu Jianzhong Education Technology Co., January 2019 Y
Director
Ltd.
Lu Jianzhong INESA (Group) Co., Ltd. Director December 2019 N
Huatai Baoxing Fund
Lu Jianzhong Director July 2016 Y
Management Co., Ltd.
Shanghai Vico Precision Mold
Lu Jianzhong Director May 2021 Y
&Plastics Co,. Ltd.
BOMESC Offshore
Independent
Lu Jianzhong Engineering Company December 2021 Y
Director
Limited
Shenzhen Wangyu Security
Xu Ximing Service Science and Director November 2019 N
Technology Co., Ltd.
Chengdu Guoshengtianfeng
Xu Ximing Director August 2020 N
Network Technology Co., Ltd.
Hangzhou Confirmware
Xu Ximing Director August 2021 N
Technology Co., Ltd.
Zhejiang Haishi Huayue Legal representative
Jin Duo January 2020 N
Digital Technology Co., Ltd &Chairman of the
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
board
Maxio Technology
Xu Peng Director December 2021 N
(Hangzhou) Co., Ltd.
Zhejiang Fast Line data fusion
Guo Xudong Information Technology Co., Director January 2021 N
Ltd.
Gong Hongjia Furong Technology Ltd. Director October 1999 N
Chairman of the
Gong Hongjia Funian Technology Ltd. April 2002 N
Board
Guangzhou Funian Electronic
Gong Hongjia Chairman July 2002 N
Technology Co., Ltd.
Gong Hongjia Hangzhou FunVio Ltd. Chairman February 2004 N
Beijing Funian Technology Legal
Gong Hongjia November 2011 N
Ltd. Representative
Shanghai Fullhan
Gong Hongjia Director April 2013 N
Microelectronics Co., Ltd.
Shenzhen Innovation Valley
Gong Hongjia Director July 2014 N
Investment Management Ltd.
Shanghai Pukun Information
Gong Hongjia Director September 2014 July 2021 N
Technology Ltd.
Gong Hongjia FuCe Holdings Ltd. Director October 2014 N
Chuangjia Venture Capital
Gong Hongjia Director October 2014 N
Investment Ltd
Legal
Shenzhen Jiadao Valley
Gong Hongjia Representative & October 2014 Y
Investment Management Ltd.
CEO
Shenzhen Jiadao Gongcheng Executive Partner
Gong Hongjia Equity Investment Fund Designated November 2014 N
(Limited Partnership) Representative
JiuBaYi Health Technology
Gong Hongjia Director November 2014 N
Ltd.
Beijing JiaBoWen
Gong Hongjia Director March 2015 N
Biotechnology Ltd.
Wuhan YouXin Technology
Gong Hongjia Director January 2016 N
Co., Ltd.
Gong Hongjia QingKe Management Director February 2017 N
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Consulting Group Ltd.
Shenzhen JiadaoFangzhi
Executive Partner
Education Industry Investment
Gong Hongjia Designated June 2017 N
Enterprise (Limited
Representative
Partnership)
Shenzhen Jiadao Successful Executive Partner
Gong Hongjia Investment Enterprise Designated August 2017 N
(Limited Partnership) Representative
Shanghai AoYuan Medical
Gong Hongjia Chairman September 2017 N
Supplies Ltd.
Sichuan JiaDao BoWen
Gong Hongjia Chairman December 2017 N
Ecological Technology Ltd.
Beijing JiaDaoGu
Gong Hongjia Supervisor April 2018 N
Management Consulting Ltd.
Shenzhen Zhongke Science
and Technology Achievements
Gong Hongjia Transformation Equity Director December 2019 N
Investment Fund Management
Ltd.
ZhongYuan Concord Cell December
Gong Hongjia Chairman December 2018 N
Genetic Engineering Co., Ltd. 2021
Tianjin Deyuan Investment
Gong Hongjia Director July 2019 N
Development Ltd.
Sichuan Huiyang Life
Gong Hongjia Director September 2019 N
Engineering Co., Ltd.
Yong Tai Hong Kan Holding
Gong Hongjia Vice Chairman October 2019 N
Group Ltd.
Shenzhen CSMAR Data
Gong Hongjia Director February 2020 N
Technology Co., Ltd.
Beijing Nutshell Universe
Gong Hongjia Education Technology Co., Director February 2021 N
Ltd.
Cheng
Aurotek Corporation Director June 2014 Y
Tianzong
Cheng
Zuozhen Co., Ltd. Director January 2015 Y
Tianzong
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Hikvision 2021 Annual Report
Compensation and
Position in other Commencement Termination
Name Name of other Entity allowance from the other
entity of the term of the term
entities
Cheng WT Microelectronics Co., Independent
June 2016 Y
Tianzong Ltd. Director
Beijing Yilianyisheng Science
Wang Zhidong Chairman and CEO October 2013 Y
and Technology Ltd.
Zhejiang HuaCe Media Co., Independent
Cheng Huifang February 2016 Y
Ltd. Director
Zhejiang Commercial Bank
Cheng Huifang External Supervisor June 2016 Y
Co., Ltd.
Quzhou NanGaoFeng Independent December
Cheng Huifang March 2017 Y
Chemical Co., Ltd. Director 2021
Ningbo Fujia Industrial Co., Independent
Cheng Huifang April 2020 Y
Ltd. Director
Zhejiang Youyi Medical Independent
Cheng Huifang September 2020 Y
Equipment Co., Ltd. Director
Zhejiang China Textile City Independent
Cheng Huifang November 2020 Y
Group Co., Ltd Director
Shenzhen Hikvision Urban
Fu Baijun Chairman July 2020 N
Service Operation Co., Ltd.
1) Gong Hongjia resigned as a director of the Company at the end of his tenure on March 5th 2021, and resigned
Description of as vice Chairman of the Company at the end of his tenure on March 12th 2021;
the status of 2) Cheng Tianzong and Wang zhidong resigned as independent directors of the Company at the end of their tenure
employment in on March 5th 2021;
other units 3) Cheng Huifang resigned as a supervisor of the Company at the end of her tenure on March 5th 2021;
4) Fu Baijun resigned as a senior management of the Company at the end of his tenure on March 12th 2021;
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
3. 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.
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Hikvision 2021 Annual Report
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 57 Incumbent 0.00 Y
Qu Liyang Director M 58 Incumbent 0.00 Y
Wang Qiuchao Director M 71 Incumbent 28.33 N
Hu Yangzhong Director, CEO M 57 Incumbent 312.73 N
Director, Standing Deputy
Wu Weiqi M 58 Incumbent 310.97 N
General Manager
Wu Xiaobo Independent Director M 62 Incumbent 25.00 N
Hu Ruimin Independent Director M 58 Incumbent 25.00 N
Li Shuhua Independent Director M 51 Incumbent 25.00 N
Guan Qingyou Independent Director M 45 Incumbent 25.00 N
Hong Tianfeng Supervisor Chairman M 56 Incumbent 21.67 N
Lu Jianzhong Supervisor M 68 Incumbent 21.67 N
Xu Lirong Supervisor M 59 Incumbent 162.09 N
Senior Deputy General
He Hongli F 49 Incumbent 290.77 N
Manager
Senior Deputy General
Cai Changyang M 51 Incumbent 262.27 N
Manager
Senior Deputy General
Xu Ximing M 49 Incumbent 420.88 N
Manager
Senior Deputy General
Bi Huijuan F 51 Incumbent 410.20 N
Manager
Senior Deputy General
Pu Shiliang M 45 Incumbent 291.99 N
Manager
Senior Deputy General
Jin duo M 57 Incumbent 287.14 N
Manager
Senior Deputy General
Jin Yan Manager, person in charge of F 43 Incumbent 259.81 N
finance and accounting
Senior Deputy General
Huang Fanghong Manager F 40 Incumbent 259.52 N
Board Secretary
Senior Deputy General
Chen Junke M 51 Incumbent 259.68 N
Manager
Senior Deputy General
Xu Peng M 46 Incumbent 239.97 N
Manager
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Hikvision 2021 Annual Report
Total remuneration Remuneration
Name Title Gender Age Tenure status from the Company from related
(RMB'0,000) parties (Y/N)
Senior Deputy General
Guo Xudong M 50 Incumbent 196.49 N
Manager
Gong Hongjia Vice Chairman M 57 Resigned 0.00 Y
Cheng Tianzong Independent Director M 70 Resigned 5.00 N
Wang Zhidong Independent Director M 55 Resigned 5.00 N
Cheng Huifang Supervisor Chairman F 69 Resigned 3.33 N
Senior Deputy General
Fu Baijun M 50 Resigned 28.21 N
Manager
Senior Deputy General
Jiang Yufeng M 51 Resigned 29.23 N
Manager
Total -- -- -- -- 4,206.95 --
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
as a director of the Company's 5th session of the Board of Directors, and Hong Tianfeng
Other information on positions and
and Lu Jianzhong were elected as supervisors of the Company's 5th session of the Board
incumbency
of Supervisors.
2) On March 12th 2021, Gong Hongjia, Fu Baijun and Jiang Yufeng left their senior
management positions after expires of their tenures, Xu Peng and Guo Xudong were
appointed as senior management personnel of the Company.
Note: During the reporting period, the remuneration of newcomers and directors, supervisors and senior
management with adjusted positions are the remuneration for the period in which they held their positions.
VI. Performance of Duties by Directors during the Reporting Period
1. The Board of Directors during the Reporting Period
Meeting Session Convening Date Disclosure Date Meeting Resolutions
11 proposals were considered and approved at
the meeting, including the Proposal on Adjusting
The 21st meeting of the 4th session and Splitting the Board for Domestic Listing of
January 8th 2021 January 9th 2021
of the Board the Subsidiary, Hangzhou EZVIZ Network Co.,
Ltd. For details, please refer to the Company’s
announcement: No. 2021-001.
3 proposals were considered and approved at the
The 22nd meeting of the 4th February 5th 2021 February 6th 2021
meeting, including the Proposal on Nominating
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Meeting Session Convening Date Disclosure Date Meeting Resolutions
session of the Board Candidates of Directors for the 5th session of the
Board. For details, please refer to the Company’s
announcement: No. 2021-006.
8 proposals were considered and approved at the
meeting, including the Proposal on Electing the
The 1st meeting of the 5th session
March 12th 2021 March 13th 2021 Chairman of 5th session of the Board. For details,
of the Board
please refer to the Company’s announcement:
No. 2021-021.
35 proposals were considered and approved at
The 2nd meeting of the 5th session the meeting, including the 2020 Annual Report
April 15th 2021 April 17th 2021
of the Board and Its Summary. For details, please refer to the
Company’s announcement: No. 2021-026.
3 proposals were considered and approved at the
The 3rd meeting of the 5th session meeting, including the 2021 Half Year Report
July 23rd 2021 July 24th 2021
of the Board and Its Summary. For details, please refer to the
Company’s announcement: No. 2021-044.
13 proposals were considered and approved at
the meeting, including the Proposal on the Spin-
off of the Company’s Subsidiary, Hangzhou
The 4th meeting of the 5th session
August 10th 2021 August 11th 2021 EZVIZ Network Co., Ltd. to be Listed on the
of the Board
STAR Market, in Compliance with Relevant
Laws and Regulations. For details, please refer
to the Company’s announcement: No. 2021-049.
3 proposals were considered and approved at the
meeting, including the 2021 Restricted Share
The 5th meeting of the 5th session
September 30th 2021 October 8th 2021 Scheme (Draft) and Its Summary. For details,
of the Board
please refer to the Company’s announcement:
No. 2021-059.
2 proposals were considered and approved at the
The 6th meeting of the 5th session meeting, including the 2021 Q3 Report. For
October 22nd 20201 October 23rd 2021
of the Board details, please refer to the Company’s
announcement: No. 2021-061.
6 proposals were considered and approved at the
meeting, including the 2021 Restricted Share
The 7th meeting of the 5th session
December 30th 2021 December 31st 2021 Scheme (Revised Draft) and Its Summary. For
of the Board
details, please refer to the Company’s
announcement: No. 2021-072.
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Hikvision 2021 Annual Report
2. Attendance of Directors in Board Meetings and General Meetings
Attendance of directors in board meetings and general meetings
Presence of
Board meeting Board Board meeting Board meeting
independent
presence meeting presence by Board meeting Board meeting not attend in
directors in
Name of Director required in the presence telecom- presence through absence person for two
general
reporting on site communication a proxy (times) (times) consecutive
meetings
period (times) (times) (times) times
(times)
Chen Zongnian 9 1 8 0 0 N 0
Qu Liyang 9 1 8 0 0 N 1
Wang Qiuchao 7 1 6 0 0 N 2
Hu Yangzhong 9 1 8 0 0 N 3
Wu Weiqi 9 1 8 0 0 N 2
Wu Xiaobo 7 1 6 0 0 N 2
Hu Ruimin 7 1 6 0 0 N 2
Li Shuhua 7 1 6 0 0 N 1
Guan Qingyou 7 1 6 0 0 N 1
Gong Hongjia 2 0 2 0 0 N 1
Cheng Tianzong 2 0 2 0 0 N 0
Lu Jianzhong 2 0 2 0 0 N 2
Wang Zhidong 2 0 2 0 0 N 1
Hong Tianfeng 2 0 2 0 0 N 0
1) The Company held the first extraordinary general meeting of shareholders in 2021 on March 5 th 2021 to
complete the election of the Board of Directors. Gong Hongjia resigned as a director of the Company; Cheng
Tianzong and Wang Zhidong resigned as independent directors of the Company; Wang Qiuchao was elected as a
Other Information director of the 5th session of the Board of Directors of the Company; Hong Tianfeng and Lu Jianzhong were elected
as supervisors of the 5th session of the Board of Supervisors of the Company.
2) During the reporting period, the 4th session of the Board of Directors of the Company held 2 board meetings,
and the 5th session of the Board of Directors held 7 board meetings.
3. Objections from Directors on Related Issues of the Company
Were there any objections on related issues of the Company from directors?
□ Yes √ No
During the reporting period, there is no objections on related issues of the Company from directors.
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4. Other Details about the Performance of Duties by Directors
Were there any suggestions from directors accepted by the Company?
√ Yes □ No
Details: During the Reporting Period, directors strictly followed related rules, regulations, including Company
Law, Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Shenzhen Stock Exchange Listed
Companies Self-Regulatory Supervision Guidelines No. 1 - Standardized Operation of Main Board Listed
Companies and Articles of Association. They focused on the Company operation, carefully review the Company's
relevant meeting materials, reviewed and approved a number of board resolutions, and have no objection to all the
proposals; At the same time, the directors of the Company put forward relevant constructive suggestions based on
their professional abilities and the actual situation of the Company, which had a positive impact on the standardized
operation of the Company and fulfilled their duties as directors.
The Company’s independent directors strictly followed related rules, regulations, including Rules for
Independent Directors of Listed Companies and Regulations on Independent Directors. They 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, the shareholders,
especially public shareholders as a whole. For details, please refer to Independent Directors’ 2021 Debriefings
disclosed on www.cninfo.com.cn.
VII. The Special Committees under the Board during the Reporting Period
Important
Number of
Committee Name Members Convening Date Meeting Content comments and
meetings held
suggestions
Reviewed and approved 3
Chen Zongnian proposals including the
Strategy Committee
(convener), Gong Proposal on the Overall All expressed
of the 4th seesion of January 7th 2021 to
Hongjia, Cheng 3 Change of the Holding concurring
the Board of February 26th 2021
Tianzong, Hong Subsidiary Hangzhou EZVIZ opinions
Directors
Tianfeng Network Co., Ltd. to a
incorporated company
Nomination Wang Zhidong Reviewed and approved 1 All expressed
1 February 5th 2021
Committee of the 4th (convener), Hong proposal of Nomination of concurring
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Hikvision 2021 Annual Report
Important
Number of
Committee Name Members Convening Date Meeting Content comments and
meetings held
suggestions
session of the Board Tianfeng, Qu Liyang Candidates for Directors of opinions
of Directors the 5th Board of Directors of
the Company
Remuneration and
Reviewed and approved 1
Appraisal Hong Tianfeng All expressed
proposal of Independent
Committee of the 4th (convener), Lu 1 February 5th 2021 concurring
Director Allowance of the 5th
session of the Board Jianzhong, Wu Weiqi opinions
Board of Directors
of Directors
Reviewed and approved 8
Strategy Committee
Chen Zongnian proposals including the 2020 All expressed
of the 5th session of April 15th 2021 to
(convener), Wu 6 Annual Work Report of the concurring
the Board of December 28th 2021
Xiaobo, Hu Ruimin Strategy Committee of the opinions
Directors
Board of Directors
Li Shuhua Reviewed and approved 10
Audit Committee of All expressed
(convener), Wang March 12th 2021 to proposals including
the 5th session of the 4 concurring
Qiuchao, Guan April 15th 2021 Nomination of Person in
Board of Directors opinions
Qingyou Charge of Internal Audit
Nomination Reviewed and approved 3
Hu Ruimin All expressed
Committee of the 5th proposals including the
(convener), Qu 1 March 12th 2021 concurring
session of the Board Proposal on the Appointment
Liyang, Li Shuhua opinions
of Directors of General Managers
Remuneration and
Reviewed and approved 12
Appraisal Guan Qingyou All expressed
March 26th 2021 to proposals including the 2021
Committee of the 5th (convener), Wu 5 concurring
December 30th 2021 Restricted Stock Scheme
session of the Board Xiaobo, Wu Weiqi opinions
(Draft) and Summary
of Directors
The Company held the first extraordinary general meeting of shareholders in 2021 on March 5 th 2021 to
complete the election of the Board of Directors. On March 12th 2021, the 1st meeting of the 5th session of the
Other Information
Board of Directors reviewed and approved the Proposal on Appointing Members of Special Committees of the
5th session of the Board of Directors.
VIII. Performance of Duties by the Supervisory Committee
Were there any risks to the Company identified by Board of Supervisors when performing its duties during the
reporting period?
□ Yes √ No
The Board of Supervisors has no objection to the supervision matters during the reporting period.
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Hikvision 2021 Annual Report
IX. Staff in the Company
1. Statistics of Employees, Professional Structure of the Staff, and Educational Background
Number of incumbent employees in the parent Company at the end of the reporting period 20,527
Number of incumbent employees in major subsidiaries at the end of the reporting period 32,225
Number of incumbent employees at the end of the reporting period 52,752
Number of employees receiving salaries in current period 52,752
Number of retired employees requiring the parent Company and its subsidiaries to bear costs 0
Professional structure
Tier Number of employees
Managerial personnel 806
Production staff 15,513
Sales staff 9,296
Technical staff 25,352
Financial staff 382
Administrative Staff 1,403
Total 52,752
Educational background
Education background Number of employees
Master and/or doctor/or above 9,222
Bachelor 26,834
Junior College (professional training) 4,245
Other 12,451
Total 52,752
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;
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Hikvision 2021 Annual Report
so that each employee is able to demonstrate his/her value, and create value to satisfy increasing demands for a good
life.
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. The Company has planned and implemented a set of training programs and
courses.
Because of the epidemic in early 2020, the Company's original training programs have been strongly impacted,
and offline training is at risk of being cancelled at any time. Faced with such a dilemma, the Company's training
programs have achieved rapid reconstruction and transformation, and accelerated the transformation from an online
learning platform to a digital talent development platform to meet training demands from a multi-dimensional
perspective. At the same time, the Company focused on several key positions for the implementation of the annual
strategy, and carried out targeted ability improvement projects to help the talent pool and improve the ability of
strategic transformation and key battles of business development.
In 2021, in the macro context of living with the COVID-19 Epidemic, businesses becoming more complex and
the rise of a new breed of employees, the Company had to adapt itself to the higher requirements on learning
management and operations. Therefore, the Company remained committed to the twin strategies of "system
construction" and "resource construction". In order to adapt to the diversity of internal learning needs, the Company
gradually strengthened the traction and design of talent training projects through deep online and offline integration,
and promoted organizational experience accumulation and replication in a more orderly manner, with the aim of
achieving online full-process operation and management of internal trainers and courses, and further improving the
efficiency of resource management.
At the same time, the human resources department goes deep into the front line of the business, working with
the business experts to jointly learn from the organization’s experience and to complete the design and
implementation of large-scale projects combining training and practice. Through empowering the business
departments with training and operation capabilities, the daily organization of business training can become
embedded in the business departments, which will better support the upgrade of skills at key positions during
business transformation, thus enabling talent development “on demand and in a timely manner”.
In 2022, in addition to continuing to strengthen the construction of talent development systems, the Company
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Hikvision 2021 Annual Report
will further strengthen the development of digital talent platform. Through shaping the branding of learning projects,
sharing learning resources, extending promotion of platforms to lower levels and implementing closed loops on
training data, the Company seeks to address the challenges posed by changeable training landscape and rapid
knowledge iteration under VUCA, and better facilitate talent supply.
4. Labor Outsourcing
□ Applicable √ Inapplicable
X. Profit Distribution and Capitalization of Capital Reserves
Profit distribution policy in the reporting period, especially the formulation, implementation and adjustment of
cash dividend policy
√Applicable □Inapplicable
Special explanation of cash dividend policy
Whether it complies with the provisions of the Company's articles of association or the requirements of
Yes
the resolution of the shareholders' meeting:
Whether the dividend standard and dividend ratio are clear: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether independent directors performed their duties and played their due roles: Yes
Whether minority shareholders have the opportunity to fully express their opinions and demands, and Yes
whether their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the conditions and procedures are
Inapplicable
compliant and transparent:
The 2nd meeting of the 5th session of the Board of Directors of the Company reviewed and approved the 2020
Annual Profit Distribution Proposal, and was reviewed and approved by the Company's 2020 annual general
meeting: 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 date of record for this profit distribution is May 27th 2021, the ex-
rights/ex-dividend date is May 28th 2021, and the total cash dividends (tax included) is RMB 7,474,733,752.00.
The above-mentioned profit distribution policy conforms to the provisions of the Company's articles of
association and the review procedures, and fully protects the legitimate rights and interests of small and medium
investors, and the independent directors have expressed their agreement.
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Hikvision 2021 Annual Report
During the reporting period, the Company was profitable and the distributable profits to shareholders of the parent
company was positive, but the Company did not propose a cash dividend distribution plan.
□ Applicable √ Inapplicable
Profit distribution and capitalizing of capital reserves for the current reporting period
√ Applicable □ Inapplicable
Bonus issue per 10 shares (share) 0
Cash dividend per 10 shares (RMB) (tax
9.00
inclusive)
Additional shares converted from capital reserves
0
for 10 shares (share)
Total capital shares as the basis for the distribution
9,433,208,719
proposal (share)
Total cash dividend (RMB) (tax inclusive) 8,489,887,847.10
Amount of cash dividends in other methods (such
0
as share repurchase) (RMB)
Total cash dividends (including other methods)
8,489,887,847.10
(RMB)
Distributable profits (RMB) 37,958,561,319.89
Percentage of cash dividends in the total
22.37%
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 2021, the parent company of the Company realized
net profit of RMB 14,088,727,668.02, the statutory surplus reserve is nil, adding the undistributed profit of the parent company at the
beginning of the year of RMB 31,327,891,058.77 deducting the cash dividends of RMB 7,474,733,752.00 in 2020, adding back RMB
16,676,345.10 of the unpaid dividends for the repurchased restricted shares, as of December 31st 2021, the profits distributable to
shareholders of the parent company amounted to RMB 37,958,561,319.89. As of December 31st 2021, the profits distributable to
shareholders in the consolidated statement were RMB 45,148,877,451.52 (consolidated). To sum up, according to the principle of
“whichever is lower”, the profits distributable to shareholders this year was RMB 37,958,561,319.89.
Based on the Company’s current total share capital of 9,433,208,719 shares, the Company proposed to distribute cash dividend of
RMB 9 (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 8,489,887,847.10, and the remaining undistributed profits will be transferred to
the next year.
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Hikvision 2021 Annual Report
XI. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or other
Incentive Plans
√Applicable □Inapplicable
During the reporting period, the Company has completed the third vesting, repurchase and cancellation of the
2016 Restricted Share Incentive Scheme and the first vesting, repurchase and cancellation of the 2018 Restricted
Share Incentive Scheme.
On December 25th 2020, the Proposal on Vesting Conditional Achievements for the Third Vesting Period of the
2016 Restricted Share Incentive Scheme, Proposal on the Third Repurchase and Cancellation of the Granted but
Unvested Restricted Shares under the Restricted Share Incentive Scheme of 2016, Proposal on Vesting Conditional
Achievements for the First Vesting Period of the 2018 Restricted Share Incentive Scheme, and the Proposal on the
First Repurchase and Cancellation of Granted but Unvested Restricted Shares under the Restricted Share Incentive
Scheme of 2018 were deliberated and adopted by the 20th Meeting of the 4th session of the Board of Directors and
the 17th Meeting of the 4thsession of the Board of Supervisors of the Company. According to the authorization of
the 2nd Extraordinary General Meeting of 2016 and the 2nd Extraordinary General Meeting of 2018 of the Company,
The Company handled the vesting of a total of 66,796,439 restricted shares for 5,937 incentive grantees. The
restricted shares were listed for circulation on January 20th 2021; at the same time, 7,611,076 granted but unvested
shares that did not meet the incentive conditions were repurchased and cancelled, and the repurchase and
cancellation procedures were completed as of June 30th 2021.
For details, please refer to the Indicative Announcement on Vesting, Listing and Circulation of Shares in the
Third Vesting Period of the 2016 Restricted Share Incentive Scheme (No.: 2021-004), Indicative Announcement on
Vesting, Listing and Circulation of Shares in the First Vesting Period of the 2018 Restricted Share Incentive Scheme
(No. 2021-005), and Announcement on the Completion of the Third Repurchase and Cancellation of the Granted
but Unvested Restricted Shares under the 2016 Restricted Share Incentive Scheme and the First Repurchase and
Cancellation of the Granted but Unvested Restricted Shares under the 2018 Restricted Share Incentive Scheme (No.:
2021-042) issued by the Company on January 18th 2021 ad July 2nd 2021, respectively.
As of the end of the current reporting period, the Company has a total of 68,762,683 granted but unvested
shares, accounting for 0.74% of the Company's total share capital.
The Company performs accounting treatments related to restricted share incentive plans in accordance with
the requirements of Accounting Standards for Business Enterprises No. 11-Share Payments and other related
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Hikvision 2021 Annual Report
accounting standards. The cost of the shares granted by the 2018 Restricted Share Incentive Scheme is amortized
during the vesting period.
During the reporting period, the amortization cost of the Company's 2018 Restricted Share Incentive Scheme
had no significant impact on the Company's financial status and operating results. For details, please refer to
Financial Statement Note (XI)-Share-based Payment.
Equity incentives obtained by the directors and senior management of the Company
√Applicable □Inapplicable
Unit: Share
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)
Hu Yangzhong Director, CEO 48,150 48,150 - - 0
Director, Standing Deputy - -
Wu Weiqi 44,550 44,550 0
General Manager
Senior Deputy General - -
He Hongli 41,400 41,400 0
Manager
Xu Lirong Supervisor 32,850 32,850 - - 0
Senior Deputy General - -
Jin Duo 32,850 32,850 0
Manager
Senior Deputy General - -
Jin Yan Manager, person in charge 162,200 96,200 66,000
of finance
Senior Deputy General - -
Cai Changyang 32,850 32,850 0
Manager
Senior Deputy General - -
Bi Huijuan 168,000 94,200 73,800
Manager
Senior Deputy General - -
Pu Shiliang 144,820 84,820 60,000
Manager
Senior Deputy General - -
Huang Fanghong Manager, Secretary of the 110,000 44,000 66,000
Board
Senior Deputy General - -
Xu Ximing 197,000 78,800 118,200
Manager
Senior Deputy General - -
Xu Peng 128,740 51,496 77,244
Manager
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Hikvision 2021 Annual Report
Price for
Restricted
Shares vested in Shares newly restricted Restricted
Shares held at
Name Title the current granted in the shares granted Shares held at
the beginning
period current period (RMB per period-end
of the period
share)
Senior Deputy General - -
Guo Xudong 73,800 29,520 44,280
Manager
Senior Deputy General
Fu Baijun 163,950 100,950 63,000
Manager (resigned)
Senior Deputy General
Jiang Yufeng 36,900 36,900 0
Manager(resigned)
Total -- 1,418,060 849,536 - 568,524
Note:
(1) This personnel listed above is 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 positions at expires of their tenures on March 12th 2021.
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 2021, 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.
XII. Construction and Implementation of Internal Control System during the Reporting Period
1. Construction and Implementation of Internal Control
The Company shall establish, improve and effectively implement internal control, further improve the
construction of internal control system and strengthen internal audit supervision in accordance with the Basic
Standard for Enterprise Internal Control, its associated Guidelines and other internal control supervision
requirements. The Board of Directors of the Company truthfully discloses the internal control evaluation report.
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Hikvision 2021 Annual Report
The Board of Supervisors supervises the establishment by the Board of Directors and its implementation of internal
control. The management is responsible for organizing and leading the daily internal controls of the Company.
The Audit Committee of the Company under the Board of Directors inspects and supervises the scientificity,
rationality, effectiveness and implementation of the Company's internal control system. At the same time, the Audit
Committee has organized special work meetings to follow up on the implementation of major matters by the
financial center and internal audit department, and puts forward relevant requirements on the internal control
compliance of the Company. The Company has set up an internal audit department under the Audit Committee of
the Board of Directors, which is equipped with full-time personnel to independently carry out internal audits,
supervise and inspect the effectiveness and rationality of internal control. The internal audit department is
accountable and reports to the Audit Committee and reports on their work regularly. The internal audit department
audits the risk profiles of the Company’s business areas according to an annual audit plan. It highlights internal
control defects and gives rational suggestions, and standardizes and supervises the operation and management of
the Company.
During the reporting period, the Company continuously strengthened its self-evaluation and self-improvement
on internal control. It continued to improve and thoroughly implement internal control in its departments and
strengthened the awareness of compliance management, to ensure the effective implementation of the internal
control system, improve the standard of the Company’s operations, and promote the healthy and sustainable
development of the Company. For more details, please refer to the 2021 Internal Control Self-Evaluation Report
disclosed by the Company on CNINFO website (www.cninfo.com.cn).
2. Any Significant Internal Control Deficiencies during the Reporting Period
□ Yes √ No
XIII. The Company's Management and Control of Subsidiaries during the Reporting Period
In strict adherence to the relevant laws and regulations such as the Authorization Management System and the
regulations and normative documents of regulatory authorities, the Company considers and approves proposals on
the establishment of new subsidiaries, and exercises management powers over major matters of the subsidiaries in
accordance with the requirements regarding assets control over the subsidiaries and the standard operations of the
Company. At the same time, subsidiaries shall provide timely, complete and accurate information to the Company
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Hikvision 2021 Annual Report
such as operating results, financial position and operating prospects, so that the Company can conduct scientific
decision-making, supervision and coordination.
During the reporting period, the Company established one new wholly-owned subsidiary and four subsidiaries
with a controlling stake. Also the Company acquired two subsidiaries, had one additional subsidiary due to changes
in voting rights, and liquidated and cancelled the registration of four subsidiaries. The Company lost one subsidiary
due to the termination of management trust agreement. All of this result in changes in the scope of its consolidated
financial statement. For details, please refer to changes in the consolidation scope in Note (6) to the financial
statements.
XIV. Self-evaluation Report on Internal Control or Internal Control Audit Report
1. Self-evaluation Report on Internal Control
Disclosure date of full text of self-evaluation report on internal control April 16th 2022
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
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 Internal control deficiencies at non-
identified or prevented, e.g.: financial report level are mainly identified
A. Invalid internal control environment; by the likelihood of occurrence and the
B. Fraud of directors, supervisors and senior management extent of impacts on operating effective in
personnel on the financial report ; business.
C. Significant errors identified by external auditors but not Significant deficiency: the high likelihood
identified during the Company is operating; leading to significant reduction of working
D. Invalid supervision of audit committee and internal audit efficiency, or significant increase of
system; uncertainty, or significant deviation from
E. Other deficiencies that may lead to the wrong judgement of the expected target;
Qualitative criteria financial statement reporter. Important deficiency: a higher likelihood
Important deficiency: leading to remarkable reduction of
A deficiency or a combination of deficiencies in internal control working efficiency, or remarkable increase
may prevent errors in financial report from being identified or of uncertainty, or remarkable deviation
prevented, although such deficiency is not significant, but from the expected target;
require attention of the Board and Management, e.g.: Normal deficiency: a low likelihood
A. Application of accounting policies does not follow the leading to reduction of working efficiency,
enterprise accounting standard; or increase of uncertainty, or deviation
B. No internal control systems for fraud; from the expected target;
C. No control systems or system not effective for unusual or
special transactions or no compensatory relevant control;
D. One or more deficiencies which prevent the preparation of
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Hikvision 2021 Annual Report
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
2. Internal Control Audit Report
√Applicable □Inapplicable
Deliberation Opinion Paragraph in Internal Control Audit Report
We believe that Hangzhou Hikvision Digital Technology Co., Ltd. maintained effective internal control over financial reporting in
all material aspects as of December 31st 2021 in accordance with the Basic Standard for Enterprise Internal Control and other
related regulations.
Disclosure of internal control audit
Disclose
report
Disclosure date of the full text of
April 16th 2022
the internal control audit report
Disclosure index of full text of
www.cninfo.com.cn 2021 Internal Control Audit Report
internal control audit report
Internal control audit opinion Standard unqualified audit opinion
Whether there are material
No
weakness of non-financial report
Whether the accounting firm issued an internal control audit report with a non-standard opinion
□ Yes √ No
XV. Special Rectification Actions for Self-inspected Problems of Listed Companies
□Applicable √Inapplicable
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Hikvision 2021 Annual Report
Section V Environmental and Social Responsibility
I. Significant Environmental Issues
Whether the Company or any of its subsidiaries should be categorized as a critical pollutant enterprises published
by environmental protection department
□Yes √No.
II. Social Responsibilities
For details, please refer to the Company’s 2021 Social Responsibility Report disclosed on CNINFO
(www.cninfo.com.cn).
III. The Achievements of Poverty Alleviation and Rural Revitalization
During the reporting period, the Company did not conduct any targeted poverty alleviation and rural revitalization
work.
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Hikvision 2021 Annual Report
Section VI Significant Events
I. 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
Date of Term of
Commitments Giver of commitments Commitment type 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 Hikvision
Commitments in Commitments Digital Technology Co., Ltd. (hereinafter referred to as "Hikvision" or "Listed
offering regarding horizontal Company") are committed as below for the transactions with Hikvsion:
October 29th Strict
documents or CETHIK Group Co., Ltd. competition and (1) Haikang Group will not make use of the controlling power to offer more Long-term
2013 performance
shareholding related party favorable conditions to Hikvision than those to any independent third party in
alterations transactions 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 determine prices according to the market
on the basis of equality, voluntarily. The Company will obey the Articles of
Association and other regulatory documents related to the avoiding of issues
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Hikvision 2021 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
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 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
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Hikvision 2021 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
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 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.
Commitments in Hangzhou Weixun During Hu Yangzhong, Wu Weiqi, Jiang Haiqing, Zhou Zhiping, Xu Lirong, May 17th Strict
Long term
Initial Public Investment Management Cai Dingguo, He Hongli, Zheng Yibo, Hu Dan, Jiang Yufeng, Liu Xiang, 2010 performance
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Hikvision 2021 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
Offering or re- Limited Partnership（later Wang Ruihong, Chen Junke’s tenure of the Company’s Board of Directors,
financing
renamed as Xinjiang Share restriction supervisors and senior management personnel, the annual transfer of
Weixun Investment commitment Hikvision’s total shares should not exceed 25% of total number of shares held
Management Limited under Weixun; within 6 months after abovementioned personnel’s demission,
Partnership） should not transfer Hikvision’s shares held under Weixun.
Hangzhou Kangpu Share restriction
During Hu Yangzhong, Wu Weiqi, Gong Hongjia’s tenure of the Company’s
Investment Limited commitment
Board of Directors, supervisors and senior management personnel, the annual
Partnership（later renamed May 17th Strict
transfer of Hikvision’s total shares should not exceed 25% of total number of Long term
as Xinjiang Pukang 2010 performance
shares held under Pukang; within 6 months after abovementioned personnel’s
Investment Limited
demission, should not transfer Hikvision’s shares held under Pukang.
Partnership）
The Company's directors,
supervisors and executive:
HuYangzhong, Wu Weiqi, Share restriction During their tenure of the Company’s Board of Directors, supervisors and
Jiang Haiqing, Zhou commitment senior management personnel, the annual shares transfer should not exceed May 17th Strict
Zhiping，Xu Lirong, Cai Long term
25% of total number of shares held under Weixun; within 6 months after their 2010 performance
Dingguo, He Hongli, Zheng
demission, they should not transfer their shares held under Weixun.
Yibo, Hu Dan, Jiang
Yufeng, Liu Xiang, Wang
Ruihong, Chen Junke
During their tenure of the Company’s Board of Directors, supervisors and
Directors, executive officers
senior management personnel, the annual shares transfer should not exceed May 17th Strict
of the Company: Long term
Share restriction 25% of total number of shares held under Kangpu; within 6 months after their 2010 performance
Hu Yangzhong, Wu Weiqi
commitment demission, they should not transfer their shares held under Kangpu.
The Company’s director During Gong Hongjia’s tenure of the Company’s Board of Directors, Strict
Long-term
Gong Hongjia’s spouse, supervisors and senior management personnel, Chen’s annual shares transfer May 17th performance
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Hikvision 2021 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
Chen Chunmei should not exceed 25% of total number of shares held under Kangpu; within 6 2010
Share restriction months after the demission of Gong Hongjia, Chen should not transfer her
commitment shares held under Kangpu.
China Electronics Commitment to
Technology Group avoid horizontal To avoid any loss of the Company and other shareholders arising from any
Corporation（later renamed competition competing business, China Electronics Technology Group Corporation, the September Strict
Long term
as China Electronics actual controller of the Company, issued Letters of non-competition on 18 18th 2008 performance
Technology Group Co., September, 2008.
Ltd.）
Gong Hongjia； Commitment to
Hangzhou Weixun avoid horizontal
Investment Management competition
Limited Partnership（later
renamed as Xinjiang
Weixun Investment To avoid any loss of the Company and other shareholders arising from any
Management Limited competing business, Gong Hongjia, Hangzhou WeiXun Investment
Partnership）； Management Limited Partnership, ZheJiang Orient Holdings Co., Ltd. and
Strict
Hangzhou KangPu Investment Management Limited Partnership, the Long term
Hangzhou Kangpu July 10th 2008
promoters of the Company, issued Commitment Letters of non-competition in performance
Investment Limited the same industry on 10 July, 2008.
Partnership（later renamed
as Xinjiang Pukang
Investment Limited
Partnership）；ZheJiang
Orient Holdings Co., Ltd.
Whether the
commitments is Yes
fulfilled in time
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Hikvision 2021 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
Commitments made by the Company's shareholders and counterparties in the operating performance of the
reporting year
□ Applicable √ Inapplicable
II. The Company’s Funds Used by the Controlling Shareholder or Other Related Parties for
Non-operating Purposes
□ Applicable √ Inapplicable
No such case during the current reporting period.
III. Illegal Provision of Guarantees for External Parties
□ Applicable √ Inapplicable
No such case in the current reporting period.
IV. Explanation Given by the Board of Directors regarding the Latest “Non-standard Auditor’s
Report”
□ Applicable √ Inapplicable
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 or Correction of Significant
Accounting Errors Compared with the Financial Report for the Prior Year
√ Applicable □Inapplicable
Since January 1st 2021 (the “First Adoption Date”), the Company has implemented the Accounting Standards
for Business Enterprises No. 21 – Leases revised by the Ministry of Finance in 2018 (hereinafter referred to as the
188
Hikvision 2021 Annual Report
“New Lease Standards,” and the Lease Standards before the revision referred to as the “Original Lease Standards”).
The New Lease Standards refine the definition of a lease, and add content on the identification, splitting and merger
of leases; eliminate the classification of leases by lessees as an operating lease or financing lease, and require the
recognition of right-to-use assets and lease liabilities of all leases on the starting date of the lease term (excluding
short-term leases and leases of low-value assets), with depreciation and interest expenses recognized separately;
and improve the subsequent measurement of leases by lessees, add an accounting method in the instance of option
revaluation and lease modification, and increase related disclosure requirements. In addition, they also widen the
scope of disclosure of lessors. Please refer to Note (III) 30 for the revised accounting policies of the Company on
the recognition and measurement of leases as lessee and lessor. For contracts that existed prior to the First Adoption
Date, the Company has elected not to reassess whether they were a lease or contained a lease as of the First Adoption
Date. The Group adjusted the amount of retained earnings and other related items in the financial statements as at
the First Adoption Date based on the cumulative impact of the first adoption of the New Lease Standards, without
adjusting data for the comparative period. For operating leases other than low-value leases existing prior to the First
Adoption Date, the Group has elected to apply one or more simplifications based on each lease option.
Since January 1st 2021 (the “First Adoption Date”), the Company implemented the Interpretation No. 14 of the
Accounting Standards for Business Enterprises (hereinafter referred to as “Interpretation No. 14”) promulgated by
the Ministry of Finance on February 2nd 2021. Interpretation No. 14 standardizes the accounting treatment for
Public-Private Partnership (PPP) projects by private capital parties. According to Interpretation No. 14，the Group
will handle the accounting of new PPP projects from January 1st 2021 to the promulgation date in accordance with
the provisions of Interpretation No. 14. The Group made retrospective adjustments to the relevant PPP project
contracts implemented prior to December 31st 2020 that were yet to be completed as of the promulgation date of
Interpretation No. 14. The Group adjusted the amount of retained earnings and other related items in the financial
statements as of January 1st 2021 based on the cumulative impact, without adjusting data for the comparative period.
The New Lease Standards and Interpretation No. 14 did not have a significant impact on the accounting
recognition of the Company’s various businesses. Please see Note (III), 32 for details on the impact of adoption of
the New Lease Standards and Interpretation No. 14 by the Group on January 1st 2021.
VII. Explanation for Changes in Scope of the Consolidated Financial Statements as Compared
to the Financial Report for the Prior Year
√ Applicable □ Inapplicable
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Hikvision 2021 Annual Report
During the reporting period, the Company has newly set up one wholly-owned subsidiaries and four holding
subsidiaries, acquired two subsidiaries, added a new subsidiary due to the change in voting rights, liquidated and
cancelled four subsidiaries, reduced one subsidiary due to the cancellation of the entrusted management agreement,
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.
VIII. 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) 400
Consecutive years of the audit service provided by the
6
domestic CPA firm
Name of the certified public accountants from the
Tang Lianjiong, Gao Sunchao
domestic CPA firm
Consecutive years of the audit service provided by the Tang Lianjiong has provided audit service for 3 consecutive years;
certified public accountants from the domestic CPA
firm Gao Sunchao has provided audit service for 1 consecutive year.
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
During the reporting period, the Company hired Deloitte Touche Tohmatsu Certified Public Accountants LLP
as the internal control audit accounting firm, and paid a total of RMB 600,000 of financial consulting fees during
the period.
IX. Delisting after Disclosure of this Annual Report
□ Applicable √ Inapplicable
X. Bankruptcy and Restructuring
□ Applicable √ Inapplicable
No such case during the reporting period.
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Hikvision 2021 Annual Report
XI. Material Litigations and Arbitration
□ Applicable √ Inapplicable
The Company had no material litigation or arbitration during the current reporting period.
XII. Punishments and Rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.
XIII. Integrity of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Inapplicable
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Hikvision 2021 Annual Report
XIV. Significant Related-party Transaction
1. Related-party Transactions Arising from Routine Daily Operations
√ Applicable □Inapplicable
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Subsidiaries or Under the common control
Payment on
research institutes of the Company’s actual Procurement 199,600.06 4.03% 270,000 No
delivery Added
of CETC controller
Announcement
The Company’s
on the forecast
shareholder who holds
August of daily
more than 5% of the
Shanghai Fullhan 11th 2021 related-party
Company’s shares, Gong Payment on
Micro Co., Ltd. and Procurement Reference 107,344.71 2.17% 150,000 No transactions
Hongjia, former director of delivery
its subsidiaries Procurement, market in 2021 (No.
the Company, is the
receiving price; 2021-053)
director of the related
services Agreed on
party
price
Announcement
An associated company on the forecast
Wuhu Sensor
held by the Company, Wu of daily
Technology Co., Payment on March
Weiqi, director of the Procurement 12,015.40 0.24% 15,000 No related-party
Ltd. and its delivery 13th 2021
Company, served as transactions
subsidiaries
director of this company in 2021 (No.
2021-024)
192
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Shenzhen Hikvision
Urban Service
A joint venture company Payment on
Operation Co., Procurement 3.10 0.00% 500 No
held by the Company delivery
Ltd.and its
subsidiaries
Zhiguang Hailian
Big Data
An associated company Payment on
Technology Co., Procurement - 0.00% 500 No
held by the Company delivery
Ltd. and its
subsidiaries
A joint venture company Procurement
Zhejiang Haishi held by the Company; The
Huayue Digital Company’s senior Payment on
- 0.00% 500 No
Technology Co., management is appointed delivery
Ltd. as this company’s
Chairman
An associated company Procurement
Maxio Technology
held by the Company, Wu
(Hangzhou) Co., Payment on
Weiqi, director of the 25,917.10 0.52% 27,000 No
Ltd. and its delivery
Company, served as
subsidiaries
director of this company
Aurotek Cheng Tianzong, the Procurement
Payment on
Corporation. and its former independent 327.79 0.01% 500 No
delivery
subsidiaries director of the Company,
193
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
served as a director of this
company. Cheng Tianzong
resigned as an independent
director on March 5th
2021. Within 12 months
after his resignation,
Aurotek Corporation is
still recognized as a related
party of the Company.
Yunnan Yinghai Procurement
A joint venture company Payment on
Parking Service 9.43 0.00% 50 No
held by the Company delivery
Co., Ltd.
Chengdu Procurement
Guoshengtianfeng
Senior management of the
Network Payment on
Company is appointed as 7.47 0.00% 100 No
Technology Co., delivery
directors of this company
Ltd. and its
subsidiaries
Ruihua Innovation Procurement
Wu Xiaobo, an
Management
independent director of the Payment on
Research Institute 0.36 0.00% 50 No
Company, serves as a delivery
(Hangzhou) Co.,
director of this company
Ltd.
194
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Zhejiang City Procurement No
A joint venture company Payment on
Digital Technology 0.18 0.00% 50
held by the Company delivery
Co., Ltd.
Providing
Reference
services,
Subsidiaries or Under the common control market
selling Payment on
research institutes of the Company’s actual Sales price; 43,471.00 0.53% 70,000 No
products, delivery
of CETC controller. Agreed on
commercial
price
goods
Jiaxin Haishi JiaAn
Zhicheng An associated company Payment on Announcement
Sales 5,322.96 0.07% 7,000 No
Technology Co., held by the Company delivery on the forecast
Ltd. of daily
March
Zhejiang City related-party
A joint venture company Payment on 13th 2021
Digital Technology Sales 2,275.20 0.03% 6,000 No transactions
held by the Company delivery
Co., Ltd. in 2021 (No.
Shenzhen Hikvision A joint venture company 2021-024)
Urban Service held by the Company Payment on
Sales 2,097.52 0.03% 6,000 No
Operation Co., Ltd. delivery
and its subsidiaries
From January to June
Daishan Hailai
2021, it is still a joint Payment on
Yunzhi Technology Sales 1,685.88 0.02% 5,000 No
venture held by the delivery
Co., Ltd.
Company
195
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Guangxi Haishi A joint venture company
Urban Operation held by the Company
Payment on
Management Co., Sales 1,149.40 0.01% 2,000 No
delivery
Ltd. and its
subsidiaries
A joint venture company No
Zhejiang Haishi held by the Company; The
Huayue Digital Company’s senior Payment on
Sales 1,097.64 0.01% 5,000
Technology Co., management is appointed delivery
Ltd. as this company’s
Chairman
An associated company No
Wuhu Sensor
held by the Company, Wu
Technology Co., Payment on
Weiqi, director of the Sales 84.13 0.00% 1,000
Ltd. and its delivery
Company, served as
subsidiaries
director of this company
Qinghai Qingtang An associated company Payment on
Sales 54.02 0.00% 1,000 No
Big Data Co., Ltd. held by the Company delivery
Xuzhou Kangbo
Urban Operation A joint venture company Payment on
Sales 16.58 0.00% 1,000 No
Management held by the Company delivery
Service Co., Ltd.
Maxio Technology An associated company Payment on
Sales 11.83 0.00% 1,000 No
(Hangzhou) Co., held by the Company, Wu delivery
196
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
Ltd. and its Weiqi, director of the
subsidiaries Company, served as
director of this company
Sanmenxia Xiaoyun
An associated company Payment on
Vision Technology Sales 0.57 0.00% 1,000 No
held by the Company delivery
Co., Ltd.
Yunnan Yinghai A joint venture company
Payment on
Parking Service held by the Company Sales - 0.00% 4,000 No
delivery
Co., Ltd.
Shenzhen Wanyu
The Company’s senior
Security Service
management is appointed Payment on
Technology Co., Sales - 0.00% 500 No
as directors of this delivery
Ltd. and its
company
subsidiaries
An associated company Added
held by the Company Announcement
Zhiguang Hailian
on the forecast
Big Data
Payment on August of daily
Technology Co., Sales 3,412.21 0.04% 15,000 No
delivery 11th 2021 related-party
Ltd. and its
transactions
subsidiaries
in 2021 (No.
2021-053)
197
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
The Company’s
INESA (Group)
Supervisor is appointed Payment on
Co., Ltd. and its Sales 831.52 0.01% 1,500 No
as directors of the delivery
subsidiaries
Company
Chengdu
Guoshengtianfeng
Senior management of the
Network Payment on
Company is appointed as Sales 700.61 0.01% 1,500 No
Technology Co., delivery
directors of this company
Ltd. and its
subsidiaries
Hangzhou
Confirmware Senior management of the
Payment on
Technology Co., Company is appointed as Sales 121.74 0.00% 300 No
delivery
Ltd. and its directors of this company
subsidiaries
Zhejiang Fast Line
data fusion
Senior management of the
Information Payment on
Company is appointed as Sales 29.32 0.00% 100 No
Technology delivery
directors of this company
Co.,Ltd. and its
subsidiaries
Total 407,587.73 593,150 - - - -
Details on significant sales return None
198
Hikvision 2021 Annual Report
Pricing Proportion
Whether
Type of Content of principles to the Approved
Trading Amount exceed the Settlement Disclosure Disclosure
Related party Relationship related related for related amount of trading quota
（0’000 RMB） approved method date reference
transaction transaction party similar (0’000 RMB）
quota
transactions transactions.
The related transaction of procurement with Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries, Aurotek Corporationand
its subsidiaries, Yunnan Yinghai Parking Service Co., Ltd., Chengdu Guoshengtianfeng Network Technology Co., Ltd. and its
Total amount of related transactions projected based on subsidiaries, Ruihua Innovation Management Research Institute (Hangzhou) Co., Ltd. and Zhejiang City Digital Technology Co.,
different categories, and the actual performance during the Ltd., and the related transaction of sales with INESA (Group) Co., Ltd. and its subsidiaries, Chengdu Guoshengtianfeng Network
current reporting period (if any) Technology Co., Ltd. and its subsidiaries, Hangzhou Confirmware Technology Co., Ltd. and its subsidiaries, Zhejiang Fast Line
data fusion Information Technology Co.,Ltd. and its subsidiaries were approved by the Chairman of the Company according to the
Company’s Related Transaction Management System.
Reasons on significant difference between trading price and
Not applicable
market referencing price (if applicable)
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Hikvision 2021 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. Transactions with Related Financial Companies
√Applicable □Inapplicable
Deposit business
Amount incurred (0,000 RMB)
Maximum
Opening Closing
daily deposit Deposit interest Total
Related Party Relationship Balance (0,000 Total deposit Balance(0,000
limit (0,000 rate range withdrawal
RMB) amount for the RMB)
RMB) amount for the
current period
current period
(0,000 RMB)
(0,000 RMB)
CETC Finance Under the
Co., Ltd. common
control of the
1,307,892.85 0.3%-2% 400,000.00 450,000.67 400,000.00 450,000.67
Company's
ultimate
controller
Credit or other financial services
Total Amount Actual amount incurred
Related Party Relationship Business Type
(0,000 RMB) (0,000 RMB)
CETC Finance Co., Ltd. Under the common control of
the Company's ultimate Credit 300,000.00 0
controller
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Hikvision 2021 Annual Report
6. Transactions between the Financial Company Controlled by the Company and Related Parties
□ Applicable √Inapplicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and its related parties.
7. Other Significant Related Party Transactions
√Applicable □Inapplicable
On April 18th 2019, the Proposal on Entering into the Entrusted Management Agreement and Related-Party
Transaction with the Controlling Shareholder was deliberated and adopted by the 10th Meeting of the fourth session
of the Board of Directors of the Company. On April 19th 2019, the Company entered into the Entrusted Management
Agreement with CETHIK and Hangzhou EZVIZ Technology Co., Ltd. (hereinafter referred to as "EZVIZ
Technology"), agreeing that CETHIK shall entrust EZVIZ Network to enforce the actual operation and management
rights over its wholly-owned subsidiary EZVIZ Technology. On March 27th 2021, to further optimize the business
process of EZVIZ Network, based on the actual production and operation needs of EZVIZ Network, and upon
consensus of the three parties through amicable and full negotiation, EZVIZ Network signed the Termination
Agreement of the Entrusted Management Agreement with CETHIK and EZVIZ Technology. EZVIZ Network will
no longer exercise the actual operation and management rights over EZVIZ Technology or be responsible for the
production, operation and management of EZVIZ Technology.
On October 22nd 2021, the 6th meeting of the 5th session of the Board of Directors of the Company reviewed
and approved the Proposal on Investing in the Establishment of Entrepreneurship Investment Partnerships and
Related Transactions, agreeing that the Company, CETHIK Group Co., Ltd., Hangzhou High-tech Venture Capital
Management Co., Ltd. and CETHIK (Hangzhou) Equity Investment Management Co., Ltd. jointly invested and
established Hangzhou Haina Yuzhi Entrepreneurship Investment Partnership Co,. Ltd. (hereinafter referred to as
"Haina Yuzhi Fund"). The scale of Haina Yuzhi Fund is RMB 600 million, of which Hikvision, as a limited partner,
invested RMB 400 million yuan in currency, holding 66.6666% of the total shares. During the reporting period,
Haina Yuzhi Fund completed the industrial and commercial registration procedures and fundraising work, raised a
total of RMB 600 million of funds.
Disclosure website for provisional reports on significant related-party transactions:
Title of provisional reports Disclosure date Disclosure website
Announcement on the Signing of the "Entrusted Management Agreement"
April 20th 2019 www.cninfo.com.cn
and Related Party Transactions with the Controlling Shareholders
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Title of provisional reports Disclosure date Disclosure website
(Announcement No. 2019-026)
Announcement on the Signing of the "Entrusted Management Agreement"
Termination Agreement and Related Party Transactions Progress March 30th 2021 www.cninfo.com.cn
(Announcement No. 2021-025)
Announcement on Investing in the Establishment of Entrepreneurship
Investment Partnerships and Related Transactions (Announcement No. October 23rd 2021 www.cninfo.com.cn
2021-064)
Announcement on the Completion of the Industrial and Commercial
Registration of the Entrepreneurship Investment Partnership Enterprise December 10th 2021 www.cninfo.com.cn
Co-established by the Company (Announcement No. 2021-067)
Announcement on the Completion of the Fundraising of the
Entrepreneurship Investment Partnership Enterprise Co-established by December 31st 2021 www.cninfo.com.cn
the Company (Announcement No. 2021-077)
XV. Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
(1) Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
(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 Co., 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%. For details, please refer to Note (X) 5, (4) other related party transactions to the financial
statements.
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2. Significant Guarantees
√Applicable □ Inapplicable
Unit: RMB’0000
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of announcement of Actual Actual
Guarantee Fulfilled for a
Guaranteed party occurrence guaranteed Type of guarantee Term of guarantee
the guarantee cap Cap or not related
date amount
party or not
Hangzhou Hikvision Technology December 1st
April 17th 2021 1,010,000 409,072.80 Joint guarantee 2019.12.01-2025.09.25 No Yes
Co., Ltd. 2019
Chongqing Hikvision Technology March 23rd 2020.03.23-2022.03
April 17th 2021 82,250 1,275.00 Joint guarantee No Yes
Co., Ltd. 2020 22
Hikvision Singapore Pte. Ltd. April 17th 2021 78,900 July 15th 2021 44,777.21 Joint guarantee 2021.07.15-2029.01.07 No Yes
Hangzhou Hikvision System March 23rd
April 17th 2021 46,000 13,086.36 Joint guarantee 2021.03.23-2023.12.31 No Yes
Technology Co., Ltd. 2021
Urumqi HaiShi Xin’An Electronic March
April 17th 2021 40,000 24,550.43 Joint guarantee 2019.03.26-2028.06.20 No Yes
Technology Co., Ltd. 29th2019
Pi Shan HaiShi Yong An Electronic March 26th
April 17th 2021 30,000 21,578.00 Joint guarantee 2019.03.26-2040.06.26 No Yes
Technology Co., Ltd. 2019
Luo Pu HaiShi Ding Xin Electronic March 26th
April 17th 2021 30,000 22,160.00 Joint guarantee 2019.03.26-2035.06.26 No Yes
Technology Co., Ltd. 2019
Yu Tian HaiShi Mei Tian Electronic March 26th
April 17th 2021 30,000 9,560.00 Joint guarantee 2019.03.26-2034.03.26 No Yes
Technology Co., Ltd. 2019
Hangzhou Hikvision Electronics March 6th
April 17th 2021 25,000 403.63 Joint guarantee 2021.03.06-2022.03.05 No Yes
Co., Ltd. 2021
Mo Yu HaiShi Electronic March 26th
April 17th 2021 25,000 17,680.00 Joint guarantee 2019.03.26-2035.03.26 No Yes
Technology Co., Ltd. 2019
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August 9th
Hikvision Europe B.V. April 17th 2021 2,000 2,000.00 Joint guarantee 2021.08.09-2022.03.31 No Yes
2021
Hikvision International Co., Ltd. April 17th 2021 33,000 Not happened during the reporting period
Xi’an Hikvision Digital Technology
April 17th 2021 20,000 Not happened during the reporting period
Co., Ltd.
Chengdu Hikvision Digital
April 17th 2021 20,000 Not happened during the reporting period
Technology Co., Ltd.
Shijiazhuang Hikvision Technology
April 17th 2021 20,000 Not happened during the reporting period
Co., Ltd.
Wuhan Hikvision Technology Co.,
April 17th 2021 20,000 Not happened during the reporting period
Ltd.
Shanghe Smart City Technology
April 17th 2021 20,000 Not happened during the reporting period
Co., Ltd.
Zhenping Haikang Juxin Digital
April 17th 2021 18,000 Not happened during the reporting period
Technology Co., Ltd.
Chongqing Hikvision System
April 17th 2021 10,000 Not happened during the reporting period
Technology Co., Ltd.
Nanjing Hikvision Digital
April 17th 2021 10,000 Not happened during the reporting period
Technology Co., Ltd.
Nanchang Hikvision Digital
April 17th 2021 10,000 Not happened during the reporting period
Technology Co., Ltd.
Zhengzhou Hikvision Digital
April 17th 2021 10,000 Not happened during the reporting period
Technology Co., Ltd.
Hefei Hikvision Digital Technology
April 17th 2021 10,000 Not happened during the reporting period
Co., Ltd
.Prama Hikvision India Private April 17th 2021 6,000 Not happened during the reporting period
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Hikvision 2021 Annual Report
Limited
Hikvision USA Inc. April 17th 2021 2,100 Not happened during the reporting period
PT. Hikvision Technology
April 17th 2021 1,400 Not happened during the reporting period
Indonesia
Hikvision Turkey Technology And
April 17th 2021 350 Not happened during the reporting period
Security Systems Commerce JSC
Total guarantee cap for subsidiaries approved during the reporting Total actual guarantee amount
1,610,000.00 for subsidiaries during the 630,940.81
period(B1)
reporting period(B2)
Total actual guarantee balance
Total approved guarantee cap for subsidiaries at the end of the reporting
1,610,000.00 for subsidiaries at the end of the 566,143.43
period(B3)
reporting period(B4)
Guarantees provided by the Company’s subsidiary to another subsidiary
Actual Actual Guarantee for
Disclosure date of announcement of Guarantee Fulfilled or
Guaranteed party occurrence guaranteed Type of guarantee Term of guarantee a related
the guarantee cap Cap not
date amount party or not
Hangzhou Haikang Intelligent June 25th 2021 2021.06.25-
April 17th 2021 50,000 934.60 Joint guarantee No Yes
Technology Co., Ltd. 2023.06.24
Hangzhou Hikmicro Intelligent June 15th 2021 2021.06.15-
April 17th 2021 30,000 878.40 Joint guarantee No Yes
Technology Co., Ltd. 2023.06.13
Hangzhou Hikstorage Technology
April 17th 2021 10,000 Not happened during the reporting period
Co., Ltd.
Total actual guarantee amount
Total guarantee cap for subsidiaries approved during the reporting period
90,000.00 for subsidiaries during the 1,836.76
(C1)
reporting period (C2)
Total approved guarantee cap for subsidiaries at the end of the reporting Total actual guarantee balance
90,000.00 1,813.00
period（C3） for subsidiaries at the end of the
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Hikvision 2021 Annual Report
reporting period(C4)
The total amount of Company’s guarantees (that is, the total of the first three items)
Total actual guarantee amount
Total guarantee cap approved during the reporting period（A1+B1+C1） 1,700,000.00 during the reporting period 632,777.57
（A2+B2+C2）
Total actual guarantee balance at
Total approved guarantee cap at the end of reporting period
1,700,000.00 the end of the reporting period 567,956.43
（A3+B3+C3）
（A4+B4+C4）
Portion of the total actual guarantee (A4+B4+C4) amount in net assets of
8.95%
the Company
Of which:
The balance of guarantee for shareholders, actual controllers and their
0
affiliates. (D)
Amount of debt guarantees provided directly or indirectly for entities with
544,906.44
a liability-to-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
544,906.44
(D+E+F)
3. Entrusted Others to Manage Cash Assets
(1) Entrusted financial management
□ Applicable √ Inapplicable
No such case during the reporting period
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Hikvision 2021 Annual Report
(2) Entrusted loan management
□ Applicable √ Inapplicable
No such case during the reporting period
4. Other Significant Contracts
□ Applicable √ Inapplicable
No such case during the reporting period
XVI. Other Significant Events
√ Applicable □ Inapplicable
On January 8th 2021, the Proposal on Adjustment of Domestic Listing Board for the Spin-off of the Company’s Subsidiary Hangzhou EZVIZ Network Co., Ltd.,
the Proposal on the Spin-off of the Subsidiary Hangzhou EZVIZ Network Co., Ltd. to be Listed on the Science and Technology Innovation Board and other related
proposals were deliberated and adopted by the 21st Meeting of the fourth session of the Board of Directors and the 18th Meeting of the fourth session of the Board of
Supervisors of the Company, agreeing the initial public offering of ordinary shares (A shares) in RMB of EZVIZ Network after the shareholding reform and listing of
EZVIZ Network on the science and technology innovation board of Shanghai Stock Exchange. For details, please refer to the Proposal of Hangzhou Hikvision Digital
Technology Co., Ltd. on the Spin-off of its Subsidiary Hangzhou EZVIZ Network Co., Ltd. to be Listed on the Science and Technology Innovation Board issued by the
Company on January 9th 2021. On August 10th 2021, the 4th meeting of the fifth session of the Board of Directors and the 4th meeting of the fifth session of the Board
of Supervisors of the Company deliberated on and approved relevant proposals including the Proposal for Deliberation on the Proposal of Hangzhou Hikvision Digital
Technology Co., Ltd. to Split Off and List Subsidiary Hangzhou EZVIZ Network Co., Ltd. on the Science and Technology Innovation Board (Revised). Please see the
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Hikvision 2021 Annual Report
Proposal of Hangzhou Hikvision Digital Technology Co., Ltd. to Split Off and List Subsidiary Hangzhou EZVIZ Network Co., Ltd. on the Science and Technology
Innovation Board (Revised) published by the Company on August 11th 2021 for details. On September 27th 2021, the second extraordinary general meeting of the
Company in 2021 deliberated on and approved the proposal to spin off and list Hangzhou EZVIZ Network Co., Ltd. on the Science and Technology Innovation Board.
Please see the Announcement on Resolutions of the Second Extraordinary General Meeting of 2021 (Announcement No.: 2021-058) published by the Company on
September 28th 2021 for details.
On December 30th 2021, the 7th meeting of the fifth session of the Board of Directors of the Company deliberated on and approved the Proposal on Authorizing
Company Management to Begin Preparatory Work for the Split-off and Domestic Listing of Subsidiary Hangzhou Hikrobot Technology Co., Ltd., which authorized
the management of the Company to begin preparatory work for the Split-off and domestic listing of subsidiary Hangzhou Hikrobot Technology Co., Ltd. (hereinafter
referred to as “HikRobot”). After the completion of the Split-off and listing, the Company will maintain control over HikRobot. Please see the Announcement on
Authorizing Company Management to Begin Preparatory Work for the Split-off and Domestic Listing of Subsidiary Hangzhou Hikrobot Technology Co., Ltd.
(Announcement No.: 2021-074) published by the Company on December 31st 2021 for details.
XVII. Significant Events of the Company’s Subsidiaries
√ Applicable □Inapplicable
During the reporting period, the Company steadily promoted the spin-off of EZVIZ Network to be listed on the Science and Technology Innovation Board of
Shanghai Stock Exchange. On January 8th 2021, the Proposal on the Spin-off of the Company’s Subsidiary Hangzhou EZVIZ Network Co., Ltd. to be Listed on the
Science and Technology Innovation Board was deliberated and adopted by the 21st Meeting of the fourth session of the Board of Directors and the 18th Meeting of the
fourth session of the Board of Supervisors of the Company. On June 23rd 2021, the Proposal on the Overall Restructuring of the the Company’s Holding Subsidiary
Hangzhou EZVIZ Network Co., Ltd. as Limited Liability Company by Shares was deliberated and adopted by the 3rd Meeting of the Strategy Committee in 2021 of the
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Hikvision 2021 Annual Report
fifth session of the Board of Directors of the Company. On June 24th 2021, EZVIZ Network as a whole was restructured and changed to a limited liability company by
shares. On July 2nd 2021, Zhejiang Securities Regulatory Bureau of China Securities Regulatory Commission accepted the application filed by EZVIZ Network for
initial public offering of A shares and pre-listing counseling for listing on the Science and Technology Innovation Board. On August 10th 2021, the 4th meeting of the
5th session of the Board of Directors and the 4th meeting of the 5th session of the Board of Supervisors reviewed and approved 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. (revised draft). On September 27th
2021, the Company's second extraordinary general meeting in 2021 reviewed and approved the proposal to spin-off EZVIZ Network to be listed on the Science and
Technology Innovation Board. On December 13th 2021, EZVIZ Network submitted the application materials for the initial public shares offering and listing on the
STAR Market of the Shanghai Stock Exchange. On January 11th 2022, the Shanghai Stock Exchange issue the Inquiry Letter on Review of Application Documents for
Initial Public Share Offering and Listing on the Science and Technology Innovation Board (Shang Zheng Ke Shen (Review) [2022] No. 11), decided to accept the
application and review it in accordance with the law. EZVIZ Network has submitted the Reply to the Inquiry Letter on the Review of Hangzhou EZVIZ Network Co.,
Ltd.'s Application Documents for Initial Public Share Offering and Listing on the Science and Technology Innovation Board on March 15th 2022, and is currently
updating the 2021 financial statements. The above spin-off matters are subject to (including but not limited to) the approval of the Shanghai Stock Exchange and the
implementation of the issuance registration procedures of the China Securities Regulatory Commission.
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Section VII 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
New transferred
Bonus
Shares Ratio Shares from Others Sub-total Shares Ratio
share
Issued capital
reserve
1. Shares subject to conditional
1,248,025,260 13.36% -1,032,710,690 -1,032,710,690 215,314,570 2.31%
restriction(s)
1)State holdings
2)Shares held by State-owned
corporate
3) Other domestic shares 306,488,295 3.28% -91,288,265 -91,288,265 215,200,030 2.31%
Including: held by domestic
corporates
held by domestic
306,488,295 3.28% -91,288,265 -91,288,265 215,200,030 2.31%
natural person
4) Foreign shares 941,536,965 10.08% -941,422,425 -941,422,425 114,540 0.00%
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Hikvision 2021 Annual Report
Before the change Changes in the period (+, -) After the change
Share
New transferred
Bonus
Shares Ratio Shares from Others Sub-total Shares Ratio
share
Issued capital
reserve
Including: held by overseas
corporates
held by overseas natural
941,536,965 10.08% -941,422,425 -941,422,425 114,540 0.00%
person
2. Shares without restriction 8,095,391,930 86.64% 1,025,099,614 1,025,099,614 9,120,491,544 97.69%
1) RMB ordinary shares 8,095,391,930 86.64% 1,025,099,614 1,025,099,614 9,120,491,544 97.69%
2) Domestically listed foreign shares
3) Foreign shares listed overseas
4) Others
3. Total 9,343,417,190 100.00% -7,611,076 -7,611,076 9,335,806,114 100.00%
Reason for the changes in share capital
√Applicable □Inapplicable
Partial Repurchase and Cancellation of the Restricted Share Scheme
On December 25th 2020, the Proposal on the Third Repurchase and Cancellation of the Granted but Unvested Restricted Shares under the Restricted Share
Incentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under the Restricted Share
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Hikvision 2021 Annual Report
Incentive Scheme of 2018 were deliberated and adopted by the 20th Meeting of the fourth session of the Board of Directors and the 17th Meeting of the fourth session
of the Board of Supervisors of the Company. According to the authorization of the 2nd Extraordinary General Meeting of 2016 and the 2nd Extraordinary General
Meeting of 2018 of the Company, the Board of Directors agreed to repurchase and cancel some of the granted but unvested restricted share that did not meet the
conditions for share incentive. On March 5th 2021, the Proposal on the Third Repurchase and Cancellation of Granted but Unvested Restricted Shares under the
Restricted Share Incentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under the
Restricted Share Incentive Scheme of 2018 were deliberated and adopted by the 1st Extraordinary General Meeting in 2021. On June 30th 2021, the Company has
completed the repurchase and cancellation procedures for the above 7,611,076 restricted shares. The total share capital of the Company was reduced by 7,611,076
shares from 9,343,417,190 shares to 9,335,806,114 shares.
Approval for changes in share capital
√Applicable □Inapplicable
On December 25th 2020, the Proposal on the Third Repurchase and Cancellation of Granted but Unvested Restricted Shares under the Restricted Share
Incentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under the Restricted Share
Incentive Scheme of 2018 were deliberated and adopted by the 20th Meeting of the fourth session of the Board of Directors and the 17th Meeting of the fourth session
of the Board of Supervisors of the Company. According to the authorization of the 2nd Extraordinary General Meeting of 2016 and the 2nd Extraordinary General
Meeting of 2018 of the Company, the Board of Directors agreed to repurchase and cancel 7,611,076 shares of the granted but unvested restricted shares that did not
meet the conditions for share incentive. On March 5th 2021, the Proposal on the Third Repurchase and Cancellation of Granted but Unvested Restricted Shares under
the Restricted Share Incentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under the
Restricted Share Incentive Scheme of 2018 were deliberated and adopted by the 1st Extraordinary General Meeting in 2021.
Transfer for changes in share capital
√Applicable □Inapplicable
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Hikvision 2021 Annual Report
On June 30th 2021, the third repurchase and cancellation under the Restricted Share Incentive Scheme of 2016 and the first repurchase and cancellation under the
Restricted Share Incentive Scheme of 2018 were completed, and the total share capital of the Company was reduced by 7,611,076 shares from 9,343,417,190 shares to
9,335,806,114 shares.
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
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
Name of
Opening restricted shares Increased in current period Vested in current period Closing restricted shares Note for restricted shares Date of unlocking
shareholder
Restricted shares for senior
executives + partial of the According to the
unlocked restricted shares relevant regulations on
Hu Yangzhong 136,591,708 48,150 0 136,639,858
turning into restricted the management of
shares for senior executive shares
executives
Grantees of
Equity Incentive Restricted
restricted share 143,170,198 66,796,439 68,762,683 January 20th 2021
Shares
incentive plan
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Hikvision 2021 Annual Report
Name of
Opening restricted shares Increased in current period Vested in current period Closing restricted shares Note for restricted shares Date of unlocking
shareholder
(consolidated)
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Wu Weiqi 8,483,992 44,550 0 8,528,542
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Huang Fanghong 191,875 44,000 0 235,875
turning into restricted
shares for senior
executives According to the
relevant regulations on
Restricted shares for senior
the management of
executives + partial of the
executive shares
unlocked restricted shares
Xu Lirong 194,400 32,850 0 227,250
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
He Hongli 207,225 41,400 0 248,625
turning into restricted
shares for senior
executives
Pu Shiliang 77,105 84,820 0 161,925 Restricted shares for senior
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Hikvision 2021 Annual Report
Name of
Opening restricted shares Increased in current period Vested in current period Closing restricted shares Note for restricted shares Date of unlocking
shareholder
executives + partial of the
unlocked restricted shares
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Jin Yan 50,800 96,200 0 147,000
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Bi Huijuan 36,750 94,200 0 130,950
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Jin Duo 49,275 32,850 0 82,125
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
Cai Changyang 49,275 32,850 0 82,125
unlocked restricted shares
turning into restricted
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Hikvision 2021 Annual Report
Name of
Opening restricted shares Increased in current period Vested in current period Closing restricted shares Note for restricted shares Date of unlocking
shareholder
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Xu Ximing 0 29,550 0 29,550
turning into restricted
shares for senior
executives
Restricted shares for senior
Wang Qiuchao 26,250 0 0 26,250
executives
Restricted shares for senior
Qu Liyang 11,812 0 0 11,812
executives
Restricted shares for senior
Gong Hongjia 762,461,110 200,043,704 962,504,814 0 September 7th 2021
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Jiang Haiqing 7,718,761 36,900 7,755,661 0
turning into restricted
shares for senior
executives
September 22nd 2021
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Jia Yonghua 3,303,858 32,850 3,336,708 0
turning into restricted
shares for senior
executives
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Hikvision 2021 Annual Report
Name of
Opening restricted shares Increased in current period Vested in current period Closing restricted shares Note for restricted shares Date of unlocking
shareholder
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Li Pan 3,184,688 32,850 3,217,538 0
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Fu Baijun 266,250 165,750 432,000 0
turning into restricted
shares for senior
executives
Restricted shares for senior
executives + partial of the
unlocked restricted shares
Jiang Yufeng 207,225 118,275 325,500 0
turning into restricted
shares for senior
executives
Total 1,066,282,557 201,011,749 1,044,368,660 215,314,570 -- --
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.
2. The difference of 7,611,076 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 7,611,076 shares on June 30th 2021.
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 21st 2021, and the
shares held by them were released from restriction in accordance with the relevant regulations.
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Hikvision 2021 Annual Report
th
4. Gong Hongjia left the position as a director of the Company on March 5 2021 as his term of office expires, and Fu Baijun and Jiang Yufeng left the position as
senior executives of the Company on March 12th 2021 as their terms of office expires. The shares held by them were released from restriction in accordance with
relevant regulations.
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
On June 30th 2021, the Company completed the third repurchasing and cancelling shares for 2016 Restricted Share Incentive Scheme and the first repurchasing
and cancelling shares for 2018 Restricted Share Incentive Scheme, a total of 7,611,076 shares. The total capital shares were decreased by 7,611,076 shares from
9,343,417,190 shares to 9,335,806,114 shares. The 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
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 The total number of ordinary shareholders at the end of the previous month before
276,009 308,098
end of the reporting period the disclosure date of the annual report
Particulars about shares held by shareholders with a shareholding percentage over 5% or the Top 10 of them
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Hikvision 2021 Annual Report
Total common The number Pledged or marked or frozen
Share-holding Increase/decreas The number of shares
Nature of shares held at the of shares held
Name of shareholder percentage e during the held without trading
shareholder end of the reporting with trading Status Amount
(%) reporting period restrictions
period restrictions
China Electronics
State-owned
Technology HIK Group 36.46% 3, 403,879,509 229,017,747 0 3, 403,879,509 Pledged 50,000,000
corporation
Co., Ltd.
Overseas
Gong Hongjia 10.31% 962,504,814 -54,110,000 0 962,504,814 Pledged 117,220,000
individual
Xinjiang Weixun Domestic non-
Investment Management state-owned 4.83% 450,795,176 0 0 450,795,176 Pledged 17,810,000
Limited Partnership corporation
CETC Investment State-owned
2.49% 232,307,903 225,210,747 0 232,307,903 - -
Holdings Co., Ltd. corporation
Shanghai Gaoyi Asset
Management Partnership
(Limited Partnership) - Other 2.18% 203,800,000 -46,200,000 0 203,800,000 - -
Gaoyi Adjacent Mountain
1 Yuanwang Fund
Xinjiang Pukang Domestic non-
Investment Limited state-owned 1.95% 182,510,174 0 0 182,510,174 Pledged 75,880,000
Partnership corporation
The 52nd Research
Institute at China State-owned
1.94% 180,775,044 0 0 180,775,044 - -
Electronics Technology corporation
Group Corporation
Domestic
Hu Yangzhong 1.66% 155,246,477 -26,940,000 136,639,858 18,606,619 - -
Individual
Bank of China Co., Ltd. -
Other 1.36% 127,000,036 57,000,011 0 127,000,036 - -
Efunds Blue Chip Select
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Hikvision 2021 Annual Report
Hybrid Securities
Investment Fund
CITIC Securities Co., State-owned
0.97% 90,242,182 -13,400,429 0 90,242,182 - -
Ltd. corporation
China Electronics Technology HIK Group Co., Ltd., China Electronics Technology Investment Holdings 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.
Explanation on associated relationship or Chen Chunmei, limited partner of Xinjiang Pukang Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual
concerted actions among the above-mentioned shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Xinjiang Weixun Investment Management
shareholders: Limited Partnership and Xinjiang Pukang 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)
Number of shares without trading Type of shares
Name of shareholder
restrictions held at the period-end Type Number
China Electronics Technology HIK Group Co., Ltd. 3, 403,879,509 RMB common shares 3, 403,879,509
Gong Hongjia 962,504,814 RMB common shares 962,504,814
Xinjiang Weixun Investment Management Limited Partnership 450,795,176 RMB common shares 450,795,176
CETC Investment Holdings Co., Ltd. 232,307,903 RMB common shares 232,307,903
Shanghai Gaoyi Asset Management Partnership (Limited Partnership) -
203,800,000 RMB common shares 203,800,000
Gaoyi Adjacent Mountain 1 Yuanwang Fund
Xinjiang Pukang Investment Limited Partnership 182,510,174 RMB common shares 182,510,174
The 52nd Research Institute at China Electronics Technology Group Co.
180,775,044 RMB common shares 180,775,044
Ltd.
Bank of China Co., Ltd. - Efunds Blue Chip Select Hybrid Securities
127,000,036 RMB common shares 127,000,036
Investment Fund
CITIC Securities Company Limited 90,242,182 RMB common shares 90,242,182
Hong Kong Securities Clearing Company Ltd.(HKSCC) 86,131,607 RMB common shares 86,131,607
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China Electronics Technology HIK Group Co., Ltd., China Electronics Technology Investment Holdings Co., Ltd. and The 52nd Research
Explanation on associated relationship and Institute at China Electronics Technology Group Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd. Ms.
concerted actions among top ten shareholders Chen Chunmei, limited partner of Xinjiang Pukang Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual
holding shares without trading restrictions, and shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Xinjiang Weixun Investment Management
among top ten shareholders and top ten Limited Partnership and Xinjiang Pukang Investment Limited Partnership.
shareholders holding 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?
□ Yes √ No
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
Name of controlling Legal Representative
Date of establishment Organization code Business scope
shareholder /People in charge
Industrial investment; R&D of environmental protection products, network
China Electronics
products, intelligent products and electronic products; technology transfer,
Technology HIK Chen Zongnian November 29th 2002 9133000014306073XD
technical services, manufacturing and sales; business consulting services,
Group Co., Ltd.
rental services of self-owned real estate; import and export businesses.
Shares held by the controlling shareholder
in other listed companies Indirect control of domestic listed company Phoenix 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.
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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, components, equipment and
system integration and related common technology; self-
operated and agent import and export business of various
China Electronics commodities and technologies (except for goods and
Chen February 25th
Technology 91110000710929498G technologies that are restricted or restricted by the state-
Zhaoxiong 2002 limited company); operating feed processing and "three
Group Ltd.
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. (Market entities independently choose business
projects and carry out business activities in accordance with
the law; for projects subject to approval according to law,
business activities are carried out according to the approved
content after approval by relevant departments; the Company
cannot engage in business activities of projects prohibited or
restricted by national and municipal industrial policies.)
China Electronics Technology Group Ltd. is the actual controller of fourteen domestic listed companies
Shares held by the actual
including Sun Create Electronic Co., Ltd, CETC Digital Technology Co., Ltd, Chengdu Westone
controlling shareholder in Information Industry Co., Ltd., GCI Science & Technology Co., Ltd., Tai’ji Computer Corporation
other listed companies through Limited, GLARUN Technology Co., Ltd. , Phoenix Optics Co., Ltd., Chengdu Tianao Electronic Co.,
Ltd., CETC Acoustic-Optic-Electronic Technology Inc., Hebei Sinopack Electronic Technology Co.,Ltd.,
controlling or holding during the
Eastern Communications Co.,Ltd., Eastcompeace Technology Co.,Ltd., Nanjing Putian
reporting period Telecommunications Co., Ltd. and Chengdu Putian Telecommunications Cable Company Limited and etc.
Whether there are shareholders with a shareholding proportion of more than 10% at the final control level of the
Company
□ Yes √ No
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:
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The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
4. The Company's Controlling Shareholder or the Largest Shareholder and its Concerted Action Person's
Cumulative Pledged Shares Account for 80% of the Company's Shares Held by Them
□ Applicable √ Not applicable
5. Particulars about Other Corporate Shareholders with Shareholding Proportion over 10%
□ Applicable √ Inapplicable
6. Particulars on Shareholding Decrease Restrictions for the Controlling Shareholders, Actual Controller,
Restructurer or Other Committing Parties
□ Applicable √ Inapplicable
IV. The Specific Implementation of Share Repurchase during the Reporting Period
Implementation progress of share repurchase
□ Applicable √ Inapplicable
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Hikvision 2021 Annual Report
Section VIII Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
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Hikvision 2021 Annual Report
Section IX Bonds
□ Applicable √ Inapplicable
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Hikvision 2021 Annual Report
Section X Financial Report
Audit Report
Audit Opinion Standard unqualified audit opinion
Audit Report sign-off Date April 14th 2022
Audit Institution Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Audit Report Number Deloitte Auditors’ Report (Audit) No. 22- P02724
Certified Public Accounts Name Tang Lianjiong, Gao Sunchao
To all shareholders of Hangzhou Hikvision Digital Technology Co., Ltd.:
1. Audit Opinion
We have audited the accompanying financial statements of Hangzhou Hikvision Digital Technology Co., Ltd.
(hereinafter referred to as “Hikvision" or “The Group”), including consolidated and parent company's balance sheet as of
December 31st 2021, consolidated and parent company's income statement, cash flow statement and statement of changes
in owners’ equity of 2021 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 2021 and consolidated and parent company’s financial performance and cash
flows of 2021.
2. 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.
3. 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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1) Recognition of Sales Revenues
Description:
As shown in Note (V) 45, the operating revenue in 2021 in the consolidated financial statements of the Group for
the year ended December 31st 2021 is RMB 81,420,053,539.27. The product sales revenue, a key performance indicator,
reaches RMB 75,532,012,528.94, accounting for 92.77% of the operating revenue, which is a significant indicator 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 the 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;
(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.
2) Provision for Credit Loss of Accounts Receivable
Description:
As disclosed in Note (V) 4 to the consolidated financial statements of the Group, as of December 31st 2021, the balance
of accounts receivable amounted to RMB 28,201,432,058.17, and the balance of provision for credit losses of accounts
receivable amounted to RMB 2,026,658,957.75. 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
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Hikvision 2021 Annual Report
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 Group 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;
- 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.
4. 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.
5. 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
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Hikvision 2021 Annual Report
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.
6. 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
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.
(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.
(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
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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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On December 31st 2021
Consolidated Balance Sheet
Unit: RMB
Item Notes On December 31st 2021 On December 31st 2020
Current Assets:
Cash and bank balances (V)1 34,721,870,931.36 35,459,729,108.27
Held-for-trading financial assets (V)2 34,320,010.83 22,679,846.77
Notes receivable (V)3 1,522,760,905.30 1,303,252,705.19
Accounts receivable (V)4 26,174,773,100.42 21,979,380,716.86
Receivables for financing (V)5 1,316,035,122.06 1,959,601,195.25
Prepayments (V)6 505,798,253.35 296,334,689.86
Other receivables (V)7 359,620,445.88 519,143,350.82
Inventories (V)8 17,974,112,407.60 11,477,906,040.70
Contract assets (V)9 1,411,372,624.91 245,754,510.98
Non-current assets due within one year (V)10 975,960,437.14 1,001,208,813.83
Other current assets (V)11 1,022,600,377.78 497,914,506.64
Total Current Assets 86,019,224,616.63 74,762,905,485.17
Non-current Assets:
Long-term receivables (V)12 613,067,944.97 2,105,570,004.53
Long-term equity investment (V)13 982,165,546.45 864,026,710.23
Other non-current financial assets (V)14 438,724,172.22 491,939,067.27
Fixed assets (V)15 6,695,590,671.27 5,876,007,536.60
Construction in progress (V)16 2,323,336,098.68 1,425,235,193.72
Right-of-use assets (V)17 566,393,672.75 -
Intangible assets (V)18 1,304,247,415.07 1,251,317,923.69
Goodwill (V)19 202,381,895.37 274,203,665.20
Long-term deferred expenses (V)20 158,007,174.90 108,584,686.85
Deferred tax assets (V)21 1,210,877,575.24 820,380,954.86
Other non-current assets (V)22 3,350,526,411.63 721,511,156.08
Total Non-current Assets 17,845,318,578.55 13,938,776,899.03
Total Assets 103,864,543,195.18 88,701,682,384.20
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Hikvision 2021 Annual Report
On December 31st 2021
Consolidated Balance Sheet-continued
Unit: RMB
Item Notes On December 31st 2021 On December 31st 2020
Current Liabilities:
Short-term borrowings (V)23 4,074,962,469.97 3,999,246,634.59
Held-for-trading financial liabilities (V)24 4,062,317.57 7,405,771.15
Notes payable (V)25 1,339,998,383.34 1,036,920,229.85
Accounts payable (V)26 15,889,694,981.12 13,593,884,790.19
Contract liabilities (V)27 2,580,894,226.59 2,161,166,671.26
Payroll payable (V)28 4,595,552,073.12 2,877,786,430.71
Taxes payable (V)29 1,461,470,029.69 1,770,057,908.62
Other payables (V)30 1,830,626,583.03 1,525,053,355.95
Non-current liabilities due within one year (V)31 596,915,360.58 3,507,680,339.78
Other current liabilities (V)32 917,479,922.61 745,711,579.57
Total Current Liabilities 33,291,656,347.62 31,224,913,711.67
Non-current Liabilities:
Long-term borrowings (V)33 3,284,371,642.52 1,961,167,761.30
Lease liabilities (V)34 317,951,879.21 -
Long-term payables (V)35 9,009,331.50 39,595,459.35
Provisions (V)36 200,675,950.96 151,443,871.02
Deferred income (V)37 738,586,458.05 190,878,987.69
Deferred tax liabilities (V)21 93,315,151.17 92,979,823.89
Other non-current liabilities (V)38 534,334,158.27 560,959,368.74
Total non-current liabilities 5,178,244,571.68 2,997,025,271.99
Total liabilities 38,469,900,919.30 34,221,938,983.66
Owners’ Equity
Share capital (V)39 9,335,806,114.00 9,343,417,190.00
Capital reserves (V)40 5,404,070,600.07 5,178,777,462.09
Less: Treasury shares (V)41 1,023,188,723.04 1,121,918,737.47
Other comprehensive income (V)42 (77,184,125.29) (84,993,926.94)
Surplus reserves (V)43 4,672,505,348.00 4,672,505,348.00
Retained earnings (V)44 45,148,877,451.52 35,806,523,826.37
Total owners' equity attributable to owner of
63,460,886,665.26 53,794,311,162.05
the Company
Minority equity 1,933,755,610.62 685,432,238.49
Total owners' equity 65,394,642,275.88 54,479,743,400.54
Total liabilities and owners' equity 103,864,543,195.18 88,701,682,384.20
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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On December 31st 2021
Balance Sheet of the Parent Company
Unit: RMB
Item Notes On December 31st 2021 On December 31st 2020
Current Assets:
Cash and bank balances 26,656,489,813.38 23,476,606,330.08
Held-for-trading financial assets 4,489,098.88 -
Notes receivable 254,830,140.51 107,411,912.35
Accounts receivable (XV)1 23,878,118,071.42 24,193,392,179.36
Receivables for financing 3,116,794.78 12,216,215.65
Prepayments 116,908,227.97 62,946,087.75
Other receivables (XV)2 1,514,142,364.05 726,703,133.65
Inventories 346,835,446.94 204,216,250.73
Contract assets 2,627,800.33 3,311,250.08
Non-current assets due within one year 123,112,934.70 71,208,685.76
Other current assets 46,183,195.94 10,110,869.86
Total Current Assets 52,946,853,888.90 48,868,122,915.27
Non-current Assets:
Long-term accounts receivable 237,682,275.59 47,762,348.01
Long-term equity investment (XV)3 7,785,916,631.88 6,727,373,453.97
Other non-current financial assets 435,839,952.22 489,054,847.27
Fixed assets 2,834,983,102.39 2,762,700,997.83
Construction in progress 450,957,191.99 388,903,828.81
Right-of-use assets 67,592,195.40 -
Intangible assets 134,626,963.77 158,917,438.86
Long-term deferred expenses 61,162,816.25 43,264,691.73
Deferred tax assets 281,893,463.93 110,066,596.99
Other non-current assets 21,042,856.65 2,740,576.47
Total Non-current Assets 12,311,697,450.07 10,730,784,779.94
Total Assets 65,258,551,338.97 59,598,907,695.21
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Hikvision 2021 Annual Report
On December 31st 2021
Balance Sheet of the Parent Company - continued
Unit: RMB
Item Notes On December 31st 2021 On December 31st 2020
Current Liabilities:
Short-term borrowings 361,117,361.14 1,431,233,375.00
Accounts payable 713,263,324.12 540,664,512.60
Contract liabilities 368,945,242.08 240,629,015.92
Payroll payable 2,838,109,439.40 1,618,357,135.99
Taxes payable 861,102,872.06 1,539,095,196.97
Other payables 1,334,246,256.62 659,214,959.62
Non-current liabilities due within one year 66,524,298.83 3,219,794,958.37
Other current liabilities 561,225,504.26 589,167,743.26
Total Current Liabilities 7,104,534,298.51 9,838,156,897.73
Non-current Liabilities:
Long-term borrowings 1,254,076,200.00 -
Lease liabilities 27,440,248.49 -
Provisions 113,998,912.05 85,230,299.84
Deferred Income 365,699,705.71 122,455,935.44
Other non-current liabilities 511,594,361.52 560,959,368.74
Total non-current liabilities 2,272,809,427.77 768,645,604.02
Total liabilities 9,377,343,726.28 10,606,802,501.75
Owners’ Equity
Share capital 9,335,806,114.00 9,343,417,190.00
Capital reserves 4,937,523,553.84 4,770,210,334.16
Less: Treasury shares 1,023,188,723.04 1,121,918,737.47
Surplus reserves 4,672,505,348.00 4,672,505,348.00
Retained earnings 37,958,561,319.89 31,327,891,058.77
Total owners' equity 55,881,207,612.69 48,992,105,193.46
Total liabilities and owners' equity 65,258,551,338.97 59,598,907,695.21
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For the reporting period from January 1st 2021 to December 31st 2021
Consolidated Income Statement
Unit: RMB
Amount for the current Amount for the prior
Item Notes
period period
I. Total operating income (V)45 81,420,053,539.27 63,503,450,891.78
Less：Total operating costs (V)45 45,329,400,332.65 33,957,697,857.73
Business taxes and surcharges (V)46 560,980,007.52 416,263,349.55
Selling expenses (V)47 8,586,443,668.02 7,377,790,744.58
Administrative expenses (V)48 2,132,250,463.96 1,790,013,088.76
Research and Development (R&D) expenses (V)49 8,251,645,101.39 6,378,651,762.42
Financial expenses (V)50 (133,343,257.84) 396,254,772.56
Including：Interest expenses 229,950,217.93 202,415,502.10
Interest income 885,545,988.62 719,662,082.74
Add: Other Income (V)51 2,628,560,820.46 2,303,581,705.81
Investment income (V)52 174,205,547.82 169,277,048.95
Including: Investment gains in associated enterprise and
114,137,281.18 6,361,388.74
joint-venture enterprise
Gains (losses) from changes in fair values (V)53 (38,200,024.47) 85,458,209.54
Credit impairment losses (V)54 (569,758,165.50) (185,940,325.74)
Impairment losses of assets (V)55 (447,689,406.60) (363,109,513.99)
Asset disposal income 34,225,603.81 628,505.02
II. Operating profit 18,474,021,599.09 15,196,674,945.77
Add: Non-operating income (V)56 75,744,369.29 99,273,303.50
Less: Non-operating expenses (V)57 81,554,105.75 22,976,971.41
III. Total profit 18,468,211,862.63 15,272,971,277.86
Less: Income tax expenses (V)58 957,490,652.16 1,594,651,805.69
IV. Net profit 17,510,721,210.47 13,678,319,472.17
4.1 Classification by continuous operation
(a) Net profit on continuous operation 17,510,721,210.47 13,678,319,472.17
(b) Net loss on terminated operation - -
4.2 Classification by attribution of ownership - -
(a) Profit or loss attributable to minority shareholders 710,310,178.42 292,792,758.02
(b) Net profit attributable to owners of parent company 16,800,411,032.05 13,385,526,714.15
V. Other comprehensive income, net of income tax (V)42 4,631,122.68 (34,145,243.17)
Other comprehensive income attributable to owners of the
7,809,801.65 (31,452,779.95)
Company, net of tax
(I) Items that will not be reclassified subsequently to profit or
- -
loss
(II) Other comprehensive income to be reclassified to profit or
7,809,801.65 (31,452,779.95)
loss in subsequent periods
1. Exchange differences arising on conversion of financial
7,809,801.65 (31,452,779.95)
statements denominated in foreign currencies
Other comprehensive income attributable to minority interests,
(3,178,678.97) (2,692,463.22)
net of tax
VI. Total comprehensive income 17,515,352,333.15 13,644,174,229.00
235
Hikvision 2021 Annual Report
Amount for the current Amount for the prior
Item Notes
period period
Total comprehensive income attributable to owners of the parent
16,808,220,833.70 13,354,073,934.20
company
Total comprehensive income attributable to minority
707,131,499.45 290,100,294.80
shareholders
VII. Earnings per share
(I) Basic earnings per share (XVI)2 1.810 1.445
(II) Diluted earnings per share (XVI)2 1.806 1.444
236
Hikvision 2021 Annual Report
For the reporting period from January 1st 2021 to December 31st 2021
Income Statement of the Parent Company
Unit: RMB
Amount for the Amount for the prior
Item Notes
current period period
I. Total operating income (XV)4 28,072,593,261.87 26,311,987,347.40
Less: Total operating Cost (XV)4 5,240,788,874.32 7,177,407,215.45
Business taxes and surcharges 327,853,515.36 293,578,888.80
Selling expenses 3,578,887,952.72 2,854,822,255.21
Administrative expenses 767,812,041.04 783,395,117.26
Research and Development (R&D) expenses 6,049,343,480.30 4,554,003,406.39
Financial expenses (740,196,978.65) (278,380,172.69)
Including : Interest expenses 104,266,342.46 85,828,434.69
Interest income 701,176,190.67 527,732,109.92
Add: Other income 1,889,775,429.25 1,847,575,953.90
Investment income (XV)5 237,198,739.71 1,095,486,482.55
Including: Investment gains in associated enterprise and
109,087,538.20 13,424,897.92
joint-venture enterprise
Gains (losses) from changes in fair values (48,725,796.17) 69,478,784.83
Credit impairment losses (119,440,900.17) (35,765,705.73)
Gains (losses) on asset impairment (2,669,913.88) 2,397,952.77
Asset disposal income 30,917,301.16 16,966.03
II. Operating profit 14,835,159,236.68 13,906,351,071.33
Add: Non-operating income 9,542,292.17 18,924,477.37
Less: Non-operating expenses 61,845,120.19 4,678,775.95
III. Total profit 14,782,856,408.66 13,920,596,772.75
Less: Income tax expenses 694,128,740.64 1,249,208,332.25
IV. Net profit 14,088,727,668.02 12,671,388,440.50
V. Other comprehensive income, net of income tax - -
VI. Total comprehensive income 14,088,727,668.02 12,671,388,440.50
237
Hikvision 2021 Annual Report
For the reporting period from January 1st 2021 to December 31st 2021
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 83,503,340,788.69 68,169,017,614.45
Receipts of tax refunds 4,683,092,023.52 3,274,552,890.75
Other cash receipts relating to operating activities (V)59(1) 2,798,426,938.05 1,427,590,353.65
Sub-total of cash inflows from operating activities 90,984,859,750.26 72,871,160,858.85
Cash payments for goods purchased and services received 53,662,747,197.88 37,257,220,824.09
Cash paid to and on behalf of employees 12,868,949,235.34 10,247,824,582.96
Payments of various types of taxes 6,447,300,353.27 4,901,863,280.18
Other cash payments relating to operating activities (V)59(2) 5,297,338,276.78 4,376,095,604.95
Sub-total of cash outflows from operating activities 78,276,335,063.27 56,783,004,292.18
Net Cash flows from Operating Activities (V)60(1) 12,708,524,686.99 16,088,156,566.67
II. Cash flows from Investing Activities:
Cash receipts from recovery of investments 6,189,975,412.80 1,693,378,691.26
Cash receipts from investment income 115,644,801.97 150,000,000.00
Net cash receipts from disposals of fixed assets, intangible assets and
64,430,953.56 14,793,178.49
other long-term assets
Other cash receipts relating to investing activities (V)59(3) - 46,196,873.80
Sub-total of cash inflows from investing activities 6,370,051,168.33 1,904,368,743.55
Net cash paid for obtaining subsidiaries and other business units (V)60(2) 323,604,530.74 48,918,168.58
Cash payments to acquire or construct fixed assets, intangible assets
3,098,310,855.39 2,003,628,270.01
and other long-term assets
Cash paid to acquire investments 6,094,268,306.70 2,405,456,262.23
Other cash payments relating to investment activities (V)59(4) 10,196,658.79 1,000,000.00
Sub-total of cash outflows from investing activities 9,526,380,351.62 4,459,002,700.82
Net cash flows from Investing Activities (3,156,329,183.29) (2,554,633,957.27)
III. Cash flows from financing activities:
Cash receipts from capital contributions 207,702,900.00 173,897,986.67
Including: cash receipts from capital contributions from minority
207,702,900.00 173,897,986.67
owners of subsidiaries
Cash receipts from borrowings 5,915,784,932.52 5,883,973,583.25
Cash receipts from issuance of bonds and SCP - 999,500,000.00
Sub-total of cash inflows from financing activities 6,123,487,832.52 7,057,371,569.92
Cash repayments of borrowings 7,758,027,348.85 4,834,813,277.12
Cash payments for distribution of dividends or profits or settlement
7,844,017,257.76 6,704,954,160.69
of interest expenses
Including : Dividends and profits paid by subsidiaries to minority
4,704,000.00 40,000,000.00
shareholders
Other cash payments relating to financing activities (V)59(5) 312,940,867.51 77,707,417.35
Sub-total of cash outflows from financing activities 15,914,985,474.12 11,617,474,855.16
Net cash flows from Financing Activities (9,791,497,641.60) (4,560,103,285.24)
IV. Effect of foreign exchange rate changes on Cash and Cash
(181,591,311.21) (464,249,454.25)
Equivalents
V. Net Increase (decrease) in Cash and Cash Equivalents (V)60(1) (420,893,449.11) 8,509,169,869.91
Add: Opening balance of Cash and Cash Equivalents (V)60(1) 35,024,837,878.31 26,515,668,008.40
VI. Closing Balance of Cash and Cash Equivalents (V)60(3) 34,603,944,429.20 35,024,837,878.31
238
Hikvision 2021 Annual Report
For the reporting period from January 1st 2021 to December 31st 2021
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 34,148,655,237.57 30,589,118,989.08
Receipts of tax refunds 1,726,725,329.46 1,609,506,273.14
Other cash receipts relating to operating activities 976,326,567.89 728,754,897.93
Sub-total of cash inflows from operating activities 36,851,707,134.92 32,927,380,160.15
Cash payments for goods acquired and services received 8,696,110,952.82 8,265,995,701.20
Cash payments to and on behalf of employees 6,188,349,496.37 5,227,053,043.52
Payments of various types of taxes 4,406,691,364.91 3,096,614,910.29
Other cash payments relating to operating activities 1,765,753,448.19 1,827,804,822.26
Sub-total of cash outflows from operating activities 21,056,905,262.29 18,417,468,477.27
Net Cash flows from Operating Activities (XV)8(1) 15,794,801,872.63 14,509,911,682.88
II. Cash flows from Investing Activities:
Cash receipts from recovery of investments 33,398,189.82 6,450,064.33
Cash receipts from investment income 131,960,801.97 210,000,000.00
Net cash receipts from disposals of fixed assets, intangible assets and
84,321,638.76 22,605,893.13
other long-term assets
Cash receipts from disposals of subsidiaries and other business units - 848,151,116.16
Other cash receipts relating to investing activities 82,668,322,959.43 44,165,378,335.06
Sub-total of cash inflows from investing activities 82,918,003,589.98 45,252,585,408.68
Cash payments to acquire or construct fixed assets, intangible assets and
650,844,109.04 446,640,144.49
other long-term assets
Cash payments to acquire investments 942,402,941.96 1,572,003,054.15
Other cash payments relating to investing activities 83,113,418,266.33 43,940,319,202.39
Sub-total of cash outflows from investing activities 84,706,665,317.33 45,958,962,401.03
Net Cash flows from Investing Activities (1,788,661,727.35) (706,376,992.35)
III. Cash flows from Financing Activities
Cash receipts from borrowings 1,644,388,055.69 2,480,000,000.00
Cash receipts from issuance of bonds and SCP - 999,500,000.00
Other cash receipts relating to financing activities 15,606,213,712.04 6,971,777,752.17
Sub-total of cash inflows from financing activities 17,250,601,767.73 10,451,277,752.17
Cash repayments of borrowings 4,572,909,918.72 4,049,244,293.61
Cash payments for distribution of dividends or profits or settlement of
7,516,599,420.29 6,547,520,501.67
interest expenses
Other cash payments relating to financing activities 15,775,258,476.27 6,910,848,212.28
Sub-total of cash outflows from financing activities 27,864,767,815.28 17,507,613,007.56
Net Cash flows from Financing Activities (10,614,166,047.55) (7,056,335,255.39)
IV. Effect of foreign exchange rate changes on Cash and Cash
(17,084,979.94) (138,534,267.16)
Equivalents
V. Net increase in cash and cash equivalents (XV)8(1) 3,374,889,117.79 6,608,665,167.98
Add: Opening balance of cash and cash equivalents (XV)8(1) 23,264,693,578.70 16,656,028,410.72
VI. Closing Balance of Cash and Cash Equivalents (XV)8(2) 26,639,582,696.49 23,264,693,578.70
239
Hikvision 2021 Annual Report
st st
For the reporting period from January 1 2021 to December 31 2021
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
2021
Owner’s equity attributable to the parent company
Items Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained profits interests equity
share
income
I. Opening balance of the current
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
period
II. Increase or decrease in the 1,248,323,372.1
(7,611,076.00) 225,293,137.98 (98,730,014.43) 7,809,801.65 - 9,342,353,625.15 10,914,898,875.34
current period 3
(I) Total comprehensive income - - - 7,809,801.65 - 16,800,411,032.05 707,131,499.45 17,515,352,333.15
(II) Owners’ contributions and
(7,611,076.00) 225,293,137.98 (37,631,007.23) - - - 545,895,872.68 801,208,941.89
reduction in capital
1. Capital contribution from
- - - - - - 207,702,900.00 207,702,900.00
shareholders
2. Share-based payment
- 340,326,119.26 - - - - 29,003,130.85 369,329,250.11
recognized in owners’ equity
3. Business combination of
enterprises not under the - - - - - - 317,436,910.79 317,436,910.79
same control
4. Others (7,611,076.00) (115,032,981.28) (37,631,007.23) - - - (8,247,068.96) (93,260,119.01)
(III) Profit distribution - - (61,099,007.20) - - (7,458,057,406.90) (4,704,000.00) (7,401,662,399.70)
1. Transfer to surplus reserves - - - - - - - -
2. Distributions to
- - (61,099,007.20) - - (7,458,057,406.90) (4,704,000.00) (7,401,662,399.70)
shareholders
III. Closing balance of the current 1,933,755,610.6
9,335,806,114.00 5,404,070,600.07 1,023,188,723.04 (77,184,125.29) 4,672,505,348.00 45,148,877,451.52 65,394,642,275.88
period 2
240
Hikvision 2021 Annual Report
st st
For the reporting period from January 1 2020 to December 31 2020
Consolidated Statement of Changes in Owners' Equity-continued
Unit: RMB
2020
Owner’s equity attributable to the parent company
Items Other Minority Total owners'
Less: Treasury
Share capital Capital reserves comprehensive Surplus reserve Retained profits interests equity
share
income
I. Opening balance of the current
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
period
II. Increase or decrease in the
(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
current period
(I) Total comprehensive income - - - (31,452,779.95) - 13,385,526,714.15 290,100,294.80 13,644,174,229.00
(II) Owners’ contributions and
(1,593,506.00) 1,051,833,763.13 (925,020,534.09) - - - (135,943,064.62) 1,839,317,726.60
reduction in capital
1. Capital contribution from
- - - - - - 173,897,986.67 173,897,986.67
shareholders
2. Share-based payment
- 752,504,023.39 - - - - 65,602,599.80 818,106,623.19
recognized in owners’ 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
III. Closing balance of the current
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
period
241
Hikvision 2021 Annual Report
st st
For the reporting period from January 1 2021 to December 31 2021
Statement of Changes in Owners' Equity of the Parent Company
Unit: RMB
2021
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained profits Total owners' equity
I. Closing balance of the prior year 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
II. Increase or decrease in the current period (7,611,076.00) 167,313,219.68 (98,730,014.43) - 6,630,670,261.12 6,889,102,419.23
(I) Total comprehensive income - - - - 14,088,727,668.02 14,088,727,668.02
(II) Owners’ contributions and reduction in capital (7,611,076.00) 167,313,219.68 (37,631,007.23) - - 197,333,150.91
1. Share-based payment recognized in owners’ equity - 282,346,200.96 - - - 282,346,200.96
2. Others (7,611,076.00) (115,032,981.28) (37,631,007.23) - - (85,013,050.05)
(III) Profit distribution - - (61,099,007.20) - (7,458,057,406.90) (7,396,958,399.70)
1.Distributions to shareholders - - (61,099,007.20) - (7,458,057,406.90) (7,396,958,399.70)
III. Closing balance of the current period 9,335,806,114.00 4,937,523,553.84 1,023,188,723.04 4,672,505,348.00 37,958,561,319.89 55,881,207,612.69
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 in capital (1,593,506.00) 705,376,594.64 (925,020,534.09) - - 1,628,803,622.73
1. Share-based payment recognized in owners’ equity - 717,200,505.99 - - - 717,200,505.99
2. 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.Distributions to shareholders - - (101,334,592.80) - (6,540,392,033.00) (6,439,057,440.20)
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
242
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 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.
On July 2nd 2021, authorized by the Company’s second Extraordinary General Meeting in 2016 and the second
Extraordinary General Meeting in 2018, the Company completed procedures of repurchase and cancellation of some of
the 7,611,076 restricted stocks that did not meet the incentive conditions, and the total share capital of the Company was
adjusted to 9,335,806,114 shares. For details of the share capital, please refer to Note (V) 39.
As of December 31st 2021, the Company’s total registered capital is RMB 9,335,806,114, with total capital shares of
9,335,806,114 shares (face value RMB 1 per share), of which restricted A-shares were 1,192,886,791 shares, A-shares
without restriction are 8,142,919,323 shares.
The Company is involved in the sector of other electronic equipment manufacturing of the electronic industry.
Business scope of the Company includes development and production of electronic products (including explosion-proof
electrical products, tele-communication equipments and its ancillary equipments, multimedia equipments, transmission
and display equipments), fire protection and control products, big data and IoT software and hardware products, aerial
vehicles, robots, intelligent equipments and intelligent systems, real-time communication systems, auto parts and
accessories, electrical signal equipments for vehicle, 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, design, construction and maintenance of electronic engineering and intelligent
system engineering. For details about business scope of the Company and its subsidiaries, please refer to Note (VII) 1.
The Company’s consolidated financial reports were approved for issuance by the 9th meeting of the 5th session of the
Board of Directors of the Company on April 14th 2022.
For consolidation scope of the financial statements of the current reporting period, please refer to Note (VII) “Interest
in other entities”. For changes in consolidation scope of the financial statements during the current reporting period, please
refer to “changes in the consolidation scope” in Note (VI).
243
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
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 2021, 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.
244
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
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 2021; and the Company's consolidated results of
operations, the Company’s and consolidated changes in shareholders' equity, and the Company’s and consolidated cash
flows for 2021.
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) 62. The Group adopts
RMB to prepare its financial statements.
245
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
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 purchase 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.
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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.
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
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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.
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7. Joint Arrangement Classification and Joint Operation Accounting
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.
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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.
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
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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.
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
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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 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
investment in an equity instrument held for non-trading purpose recognized or without consideration in a business
combination of enterprises not under the same 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:
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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.
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
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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.
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
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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.
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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.
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, 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, 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 contract (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
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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-
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
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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
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.
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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
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
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For the reporting period from January 1st 2021 to December 31st 2021
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
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.
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Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
10.5 Derivatives and embedded derivatives
Derivatives include foreign exchange forward contract, foreign exchange option contract and interest rate swap 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
(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
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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.
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Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
12.5 Amortization method for low cost and short-lived consumable items and packaging materials
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.
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For the reporting period from January 1st 2021 to December 31st 2021
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
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.
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For the reporting period from January 1st 2021 to December 31st 2021
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
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
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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.
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:
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Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Class Depreciation period 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 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
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Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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, Service Life and Impairment Test
Intangible assets include land use right, intellectual property (IP), application software, and franchise, etc.
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 -
The fees charged by the Group to those who acquire public products and services during the project operation period do
not constitute an unconditional right to receive cash. When the PPP project assets are ready for their intended use, the
difference between the consideration amount of the relevant PPP project assets or the amount of confirmed construction
income and the amount of cash (or other financial assets) that is entitled to receive a determinable amount will be
recognized as intangible assets.
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 Accounting Policy for Internal Research and Development Expenditure
Expenditure during the research phase is recognized as an expense in the period in which it is incurred.
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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
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, intangible assets with a finite useful life and assets related to contract costs 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.
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Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 expected
to be obtained by the Group for the transfer of goods or services related to the asset; (2) the estimated costs to be incurred
in connection with the transfer of relevant goods or services.
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.
Except for asset impairment losses related to contract costs, once the impairment loss of such assets is recognized, it cannot
be reversed in any subsequent period. 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.
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 and employee housing loan deferred interest. Long-term deferred expenses are evenly amortized in installments in
three to five 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.
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For the reporting period from January 1st 2021 to December 31st 2021
23. Employee Compensation
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.
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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
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
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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
26.1 Accounting policies applied in revenue recognition and measurement
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 and PPP
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
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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
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.
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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.
The Group, as a private capital, entered into a PPP project contract with the government and provided construction,
operation, maintenance and other services. The Group identifies each individual performance obligation in the contract,
and allocates the transaction price to each performance obligation based on the relative proportion of the stand-alone
selling price of each performance obligation. When providing construction services or outsourcing projects to other parties,
whether the identity of the Group is the principle or agent is determined, and then accounting for construction revenue to
confirm the contract assets is made. After the PPP project is ready for use, the Group recognizes revenue related to
operation and maintenance services.
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27. Cost of Contract
27.1 Cost of obtaining a contract
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.
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.
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.
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28.2 Judgment basis and accountant treatment of government subsidy related to income
The Group receives government subsidies including subsidies for Core-electronics, High-end-general-Chips, and
Infrastructural-software projects, subsidies for 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, such as subsidies for Core-electronics, High-end-general-Chips, and
Infrastructural-software 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.
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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
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.
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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
Lease refers to a contract that conveys the right to use an asset for a period of time in exchange for consideration.
The Group assesses whether a contract is, or contains, a lease at the inception date. The Group does not re-assess whether
a contract contains a lease unless the terms and conditions of the contract are changed.
30.1 The Group as the lessee
30.1.1 Separating components of lease
In case the contract contains one or more lease and non-lease components, the Group separates each lease component and
non-lease component, and allocates the consideration to the lease and non-lease components based on the proportion of
relative stand-alone prices of the components.
30.1.2 Right-of-use assets
The Group recognizes the right-of-use assets for leases on the commencement date of the lease term, except for short-term
lease and lease of low-value assets. The commencement date of the lease term refers to the date from which the lessor
makes the leased assets available for use by the Group. Right-of-use assets are initially measured at cost. The cost includes:
Initial measurement amount of lease liabilities;
Amount of lease payment made at or before the commencement date of the lease, less any lease incentives received;
Initial direct costs incurred by the Group;
An estimate of any costs to be incurred by the Group in dismantling and removing the underlying asset, or restoring
the site on which it is located, or restoring the leased assets to the conditions as agreed under the terms of the lease,
excluding costs incurred to produce inventories.
The Group calculates depreciation of the right-of-use assets in accordance with the relevant depreciation provisions of
Accounting Standards for Business Enterprises No. 4 - Fixed Assets. The right-of-use asset is depreciated over the shorter
of the lease term and the useful life of the right-of-use asset, unless there is a transfer of ownership or purchase option
which is reasonably certain to be exercised at the end of the lease term.
The Group determines whether the right-of-use assets are impaired and accounts for the identified impairment loss in
accordance with the provisions of Accounting Standards for Business Enterprises No. 8 - Impairment of Assets.
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30.1.3 Lease liabilities
The Group initially measures the lease liability on the commencement date at an amount equal to the present value of the
lease payments during the lease term that are not paid at that date, except short-term lease and lease of low-value assets.
In calculating the present value of the lease payments, the Group adopts the interest rate implicit in the lease as the discount
rate. The Group uses its incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased asset
during the lease term, including:
Fixed payments, including in-substance fixed payments, less any lease incentives receivable;
The exercise price of a purchase option, if the Group is reasonably certain to exercise that option;
Payments for terminating the lease, if the lease term reflects the lessee exercising the option to terminate the lease;
Amounts expected to be payable by the Group under residual value guarantees.
After the commencement date of the lease term, the Group calculates interest expense of lease liabilities in each period of
lease term at fixed periodic rate and recognizes in the current loss and profit or relevant asset costs.
After the commencement date of the lease term, the Group remeasures the lease liability and adjusts the corresponding
right-of-use assets under the following circumstances. If the carrying value of the right-of-use assets has been reduced to
zero while the lease liability needs to be further reduced, the Group will recognize the difference into the current loss and
profit:
In case of any change of the lease term or any change in the valuation of the purchase option, the Group remeasures
the lease liability at the present value calculated based on the modified lease payments and the revised discount rate;
In the event of any change in the amount expected to be payable based on the residual value guarantees, the Group
remeasures the lease liability at the present value calculated based on the changed lease payments and the original
discount rate.
30.1.4 Short-term lease and lease of low-value assets
The Group has elected not to recognize the right-of-use assets and lease liabilities for short-term leases and leases of low-
value assets. Short-term lease refers to lease with a term no more than 12 months from the commencement date of lease
term and without purchase option. Lease of low-value assets refers to lease for single lease asset with low value when it
is new. The Group recognizes lease payments under short-term leases and leases of low-value assets as the current loss
and profit or the relevant asset costs on a straight-line basis over each period during the lease term.
30.1.5 Lease modification
In case of lease modification, the Group makes accounting treatment of such lease change as a separate lease if all of the
following conditions are met:
such lease modification increases the scope of the lease by adding the right to use one or more lease assets;
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the increased consideration is commensurate with the stand-alone price for the increase in scope and any appropriate
adjustments to reflect the circumstances of the particular contract.
Where accounting treatment is not made for lease modification as a separate lease, at the effective date of lease
modification, the Group reallocates the contract consideration after the modification, redetermines the lease term, and
remeasures the lease liability based on the present value calculated according to the modified lease payments and the
revised discount rate.
In the event that the lease scope is decreased or the lease term is shortened as a result of the lease modification, the Group
reduces the carrying amount of the right-of-use assets, and recognizes the relevant gains or losses relating to the partial or
full termination of the lease in the income statement; for the lease liabilities remeasured due to other lease modifications,
the Group adjusts the carrying amount of the right-of-use assets accordingly.
30.2 The Group as the lessor
30.2.1 Separating components of lease
In case the contract contains both lease and non-lease components, the Group allocates the contract consideration in
accordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue on portion of
transaction prices, based on the respective stand-alone prices of the lease component and the non-lease component.
30.2.2 Classification of lease
Finance lease is a lease that substantially transfers all the risks and rewards of incidental to ownership of an underlying
asset. Operating lease refers to the leases other than finance lease.
30.2.2.1 The Group records the operating lease business as the lessor
The Group recognizes the lease payments from operating leases as rental income on a straight-line basis for all periods
over the lease term. The Group's initial direct costs incurred in connection with operating leases is capitalized as incurred,
recognized in the income statement over the lease term on the same basis as the lease income.
30.2.2.2 The Group records the finance lease business as the lessor
On the commencement date of the lease term, the Group uses the net lease investment as the carrying value of the finance
lease receivables and derecognizes the finance lease assets. Net lease investment is the sum of present value of
unguaranteed residual value and lease payments receivable discounted at the interest rate implicit in lease on the
commencement date of the lease term.
Lease payments receivable, which refer to amounts receivable by the Group from the lessee for conveying the right to use
the leased assets during the lease term, include:
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Fixed payment including in-substance fixed payments by the lessee, less any lease incentives payable;
The exercise price of a purchase option, if the lessee is reasonably certain to exercise that option;
Payments for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease;
Residual value guarantees provided to the Group by the lessee, a party related to the lessee, or a third party unrelated
to the lessor that is capable of discharging the obligations under the guarantee.
The Group calculates and recognizes the interest income in each period of the lease term according to the fixed periodic
interest rate.
30.2.3 Lease modification
In case of modification of the operating lease, the Group accounts for it as a new lease as of the effective date of the
modification, any prepaid or accrued lease payments relating to the original lease are considered as payments for the new
lease .
In case of modification of the finance lease, the Group accounts for the modification of a finance lease as a separate lease
if all of the following conditions are met:
The modification increases the scope of the lease by adding the right to use one or more lease assets;
The consideration for the lease increases by an amount that is commensurate with the stand-alone price for the
increase in scope, and any appropriate adjustments to that price to reflect the circumstances of the particular contract.
If a modification of finance lease is not accounted for as a separate lease, the Group accounts for the changed lease under
the following circumstances:
If the modification becomes effective on the commencement date of the lease and the lease is classified as an
operating lease, the Group accounts for it as a new lease from the effective date of the lease modification and measures
as the net lease investment prior to the effective date of the lease modification as the carrying value of the leased
asset.
If the modification becomes effective on the commencement date of the lease and the lease is classified as a finance
lease, the Group accounts for it in accordance with the provisions of Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments regarding the modification or renegotiation of
contracts.
30.2.4 Sale and leaseback transaction
30.2.4.1 The Group as the seller-lessee
The Group assesses and determines whether the transfer of the asset in sale and leaseback transaction qualifies as a sale in
accordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue. If the transfer does
not qualify as a sale, the Group continues to recognize the transferred asset and at the same time recognize a financial
liability equal to the transfer proceeds and account for the financial liability in accordance with the provisions of
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Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. If the
transfer of the asset qualifies as a sale, the Group measures the right-of-use asset arising from the leaseback as the
proportion of the previous carrying amount of the asset that relates to the right of use retained. The gain or loss recognized
is limited to the proportion of the total gain or loss that relates to the rights transferred to the buyer-lessor.
30.2.4.2 The Group as the buyer-lessor
If the transfer of the asset in a sale and leaseback transaction does not qualify as a sale, the Group does not recognize the
transferred asset, but recognizes a financial asset equal to the transfer proceeds and account for the financial asset in
accordance with the provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement
of Financial Instruments. If the transfer of the asset qualifies as a sale, the Group accounts for the purchase of the asset in
accordance with other applicable Accounting Standards for Business Enterprises and account for the lease of the asset.
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
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Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 2021, 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.
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.
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Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
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 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 Lease Standards
Since January 1st 2021 (the “First Adoption Date”), the Company has implemented the
Accounting Standards for Business Enterprises No. 21 – Leases revised by the Ministry of
Finance in 2018 (hereinafter referred to as the “New Lease Standards,” and the Lease Standards
before the revision referred to as the “Original Lease Standards”). The New Lease Standards
refine the definition of a lease, and add content on the identification, splitting and merger of
leases; eliminate the classification of leases by lessees as an operating lease or financing lease,
and require the recognition of right-to-use assets and lease liabilities of all leases on the starting
date of the lease term (excluding short-term leases and leases of low-value assets), with
depreciation and interest expenses recognized separately; and improve the subsequent
measurement of leases by lessees, add an accounting method in the instance of option revaluation
and lease modification, and increase related disclosure requirements. In addition, they also widen
the scope of disclosure of lessors. Please refer to Note (III) 30 for the revised accounting policies
of the Company on the recognition and measurement of leases as lessee and lessor.
For contracts existing before the date of initial application, the Group chose not to reassess
whether it is a lease or contains a lease on the date of initial execution.
Such
The Group as the lessee alternations
in
The Group adjusts the amount of retained earnings and the amount of relevant items in the accounting
financial statements on the initial application date according to the cumulative impact of the policy were
initial application of the New Lease Standards, in which the information of the comparable is approved
None
not be adjusted. by the
Group at
For operating lease other than low-value lease prior to the date of initial adoption, the Group board of
elects to apply one or more of the following simplified approach depending on each lease: director
general
Any lease that will be completed within 12 months of the date of initial execution
meeting.
shall be treated as short-term lease;
The same discount rate shall be used for leases with similar characteristics when
measuring the lease liability;
The measurement of right-of-use assets does not include initial direct costs;
In case of any extension option or termination option, the Group may determine the
lease term according to the actual exercise of the option before the first adoption
date and other latest conditions;
If a lease is modified occurs before the date of initial adoption, the Group will
account for it according to the final arrangement of the lease modification.
On the date of initial adoption, the Group makes the following adjustments as a result of the
implementation of the New Lease Standards:
For finance lease prior to the date of initial adoption, the Group will respectively
measure the right-of-use asset and lease liability based on the original carrying
values of the finance lease assets and finance lease payables on the date of initial
adoption.
For operating lease prior to the date of initial adoption, the Group shall measure the
lease liability on the date of initial adoption based on the current value of the
remaining lease payments discounted according to the lessee's incremental
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Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
borrowing rate on the date of initial adoption, and measure the right-of-use asset at
an amount equal to the lease liability, with necessary adjustments to prepaid rent.
The Group recognizes lease liabilities (including due within one year) of RMB 386,475,961.59
and right-of-use assets of RMB 392,997,553.30 as of January 1st 2021. For operating leases
before the date of initial adoption, the Group shall use the present value discounted by the
incremental borrowing rate on the first adoption day to measure the lease liabilities. The range
of incremental borrowing rate is from 1.14% to 9.50%.
The impact of the Group's adoption of the New Lease Standards as of January 1st 2021 is detailed
in Note (III), 32.2.
The Group as the lessor
The Group does not adjust the lease as a lessor in accordance with the transition regulations, and
conducts accounting treatment in accordance with the new lease standards from the date of initial
application.
Interpretation No. 14 of Accounting Standards for Business Enterprises
The Ministry of Finance issued and implemented the Interpretation No. 14 of Accounting
Standards for Business Enterprises (the "Interpretation No. 14") on February 2nd 2021,
regulating the accounting treatment of private capital parties for Public-Private Partnership
(PPP) project contracts.
Accounting treatment of PPP project contracts
A PPP project contract refers to a contract entered into by the private capital and the government
for a PPP project, which conforms to the following characteristics: (1) the private capital shall
provide public goods and services by using PPP project assets on behalf of the government
during the operation period agreed in the contract; (2) the private capital shall be compensated
for the public goods and services provided by it within the period agreed in the contract. A PPP
project contract also meets the following conditions: (1) the government controls or regulates
the types, objects and prices of public goods and services that the private capital must provide
for the use of PPP project assets; (2) upon termination of the PPP project contract, the
government shall control the significant residual interest of the PPP project assets through
ownership, income rights or other forms.
The Group enters into PPP project contracts with the government as a private capital. The Group
provides construction services (including construction and reconstruction and expansion) or
subcontracts them to other parties, and determines whether the Group is the principle or the agent
for accounting treatment according to Accounting Standards for Business Enterprises No. 14 -
Revenue, and confirms the contract assets.
If the contract stipulates that the Group provides various services (such as construction service
for PPP project assets, and operation service and maintenance service after completion),
according to Accounting Standards for Business Enterprises No. 14 - Revenue, separate
performance obligations shall be identified and the transaction price shall be allocated to each
performance obligation based on the relative proportion of the standalone selling price of each
performance obligation.
If the contract stipulates that the Group is entitled to receive a determinable amount of cash (or
other financial assets) during the operation of the project, the receivables shall be recognized
when the Group has the right to receive such consideration (which is conditioned on the passage
of time). When the PPP project assets reach a predetermined usable state, the Group shall
287
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
recognize as intangible assets the difference between the consideration or the recognized
construction income of relevant PPP project assets, and the determinable amount of cash (or
other financial assets) that the Group is entitled to receive.
For the part where the Group recognizes the consideration or the recognized construction income
of relevant PPP project assets as intangible assets, the contract assets recognized during the
relevant construction period shall be presented in the item of intangible assets; and other contract
assets recognized during the relevant construction period shall be presented in the items of
contract assets or other non-current assets based on whether they are expected to be realized
within one year since the date of the balance sheet.
In accordance with the Interpretation No. 14, the Group implements accounting treatment for
the new PPP projects from January 1st 2021 to the implementation date of the Interpretation No.
14 in accordance with requirements under the Interpretation. The Group has made retroactive
adjustments to relevant PPP project contracts that were implemented before December 31st 2020
and have not been completed until the implementation date of the Interpretation No. 14. For
relevant amounts under cumulative impact, retained earnings and the amounts of other relevant
items in the financial statements as at January 1st 2021 has been adjusted, and the data in
comparable period has not been adjusted. Details of the impact of the adoption of the
Interpretation No. 14 by the Company on January 1st 2021 are set out in Note (III) 32.3.
32.2 The impact of the implementation of the New Lease Standards on the relevant items in the consolidated balance
sheet at the beginning of the period is shown below:
Unit: RMB
Item December 31st 2020 Reclassified (Note) January 1st 2021
Current Assets:
Prepayments 296,334,689.86 (2,952,118.77) 293,382,571.09
Other receivables 519,143,350.82 (117,288.00) 519,026,062.82
Other current assets 497,914,506.64 (477,453.85) 497,437,052.79
Non-current Assets:
Fixed assets 5,876,007,536.60 (45,330,337.75) 5,830,677,198.85
Right-of-use assets - 392,997,553.30 392,997,553.30
Current Liabilities:
Non-current liabilities due
3,507,680,339.78 137,118,074.50 3,644,798,414.28
within one year
Non-current Liabilities:
Long-term payables 39,595,459.35 (23,052,993.27) 16,542,466.08
Lease Liabilities - 230,055,273.70 230,055,273.70
Note: Due to the implementation of the New Lease Standards, the Group reclassifies prepaid rents totaling RMB
3,546,860.62, which were previously included in prepayments, other receivables and other current assets to right-of-use
assets; reclassifies financial lease assets of RMB 45,330,337.75 previously included in fixed assets to right-of-use assets;
reclassifies finance lease payments of RMB 23,052,993.27 previously included in long-term payables and the finance lease
payments of RMB 19,302,613.39 previously included in non-current liabilities which due within one year to lease
liabilities (including those due within one year). For operating leases prior to the date of initial adoption, the Group adopts
the new lease standard to recognize right-of-use assets of RMB 344,120,354.93 and lease liabilities (including those due
within one year) of RMB 344,120,354.93. On January 1st 2021, the Group recognized a total of RMB 230,055,273.70 of
lease liabilities, RMB 156,420,687.89 of lease liabilities due within one year and RMB 392,997,553.30 of right-of-use
assets.
288
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
The impact of the implementation of the new lease standards on the relevant items of the parent company's balance
sheet at the beginning of the period is set out below:
Unit: RMB
Item December 31st 2020 Reclassified (Note) January 1st 2021
Non-current Assets:
Right-of-use assets - 66,446,154.01 66,446,154.01
Current Liabilities:
Non-current liabilities due
3,219,794,958.37 29,999,165.05 3,249,794,123.42
within one year
Non-current Liabilities:
Lease Liabilities - 36,446,988.96 36,446,988.96
Note: Due to the implementation of the new lease standards, the Company recognizes right-of-use assets of RMB
66,446,154.01 and lease liabilities (including those due within one year) of RMB 66,446,154.01.
Information on the difference between the Group's lease liability recognized as of January 1st 2021 and the
significant operating lease commitments disclosed in the financial statements of the fiscal year of 2020 is as follows:
Unit: RMB
Item January 1st 2021
I. Operating lease commitments as of December 31st 2020 408,812,072.84
Lease liabilities discounted at the incremental borrowing rate on the date of initial adoption 377,897,839.67
Less: Recognition of exemptions - short-term leases and leases of low-value assets 33,777,484.74
Lease liabilities recognized in connection with the original operating lease upon implementation of the new
344,120,354.93
lease standards
Add: Finance lease payables as of December 31st 2020 (including due within one year) 42,355,606.66
II. Lease liabilities as of January 1st 2021 386,475,961.59
Including: Non-current liabilities due within one year 156,420,687.89
Lease liabilities 230,055,273.70
The components of the carrying value of right-of-use assets as of January 1st 2021 are as follows:
Unit: RMB
Item January 1st 2021
Right-of-use assets:
Right-of-use assets recognized under operating leases prior to the date of initial adoption 344,120,354.93
Reclassified prepaid rent 3,546,860.62
Finance leased assets recognized as fixed assets under the Original Lease Standards 45,330,337.75
Total 392,997,553.30
On January 1st 2021, right-of-use assets are disclosed by category as follows:
Unit: RMB
Item January 1st 2021
Building and construction 333,243,923.96
General-purpose equipment (Note) 135,811.98
Special-purpose equipment (Note) 45,194,525.77
Transportation vehicles 14,423,291.59
Total 392,997,553.30
Note: The Group recognized the general-purpose equipment and special-purpose equipment that were classified as
289
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
financial leases under the original lease standards which were still leased on January 1st 2021 as right-of-use assets, with
book values of RMB 135,811.98 and RMB 45,194,525.77, respectively.
32.3 The impact of the implementation of Interpretation No. 14 on the relevant items in the consolidated balance sheet at
the beginning of the year is shown below:
Unit: RMB
Item December 31st 2020 Adjustments January 1st 2021
Current Assets:
Accounts receivable 21,979,380,716.86 76,687,200.93 22,056,067,917.79
Contract assets 245,754,510.98 73,650,033.12 319,404,544.10
Non-current assets due within one year 1,001,208,813.83 (150,337,234.05) 850,871,579.78
Non-current Assets:
Long-term receivables 2,105,570,004.53 (1,619,823,514.21) 485,746,490.32
Intangible assets 1,251,317,923.69 70,649,800.00 1,321,967,723.69
Other non-current assets 721,511,156.08 1,549,173,714.21 2,270,684,870.29
Note: Due to the implementation of Interpretation No. 14, on January 1st 2021, the Group reclassifies RMB
1,619,823,514.21 originally included in long-term receivables and RMB 150,337,234.05 originally included in non-
current assets due within one year to accounts receivable of RMB 76,687,200.93, contract assets of RMB 73,650,033.12
and other non-current assets of RMB 1,549,173,714.21. The difference between the amount of construction revenue
recognized for the relevant PPP project assets and the right to receive a determinable amount of cash is recognized as
intangible assets of RMB 70,649,800.00.
290
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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%,5%
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.
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 Ji [2013] No. 2458), the Company was
recognized as a national key software enterprise in 2013. According to the Announcement on the Enterprise Income
Tax Policies for Promoting the High-quality Development of Integrated Circuit Industry and Software Industry
(Ministry of Finance, State Administration of Taxation, National Development and Reform Commission, Ministry of
Industry and Information Technology Announcement [2020] No. 45), the Company was approved by the tax
authorities in May 2021 to pay the 2020 annual corporate income tax at the rate of 10%. As of the approval date of
this report, the Company’s preferential income tax in 2021 has not been verified and approved. Therefore, the
Company’s enterprise income tax in 2021 is still calculated and paid at the rate of 15% (2020: 15%).
(2) In accordance with Finance and Taxation [2011] No. 58 Document of Ministry of Finance, State Administration of
Taxation and General Administration of Customs, the wholly-owned subsidiaries, Chongqing Hikvision Technology
Co., Ltd. (hereinafter referred to as "Chongqing Technology") and Chongqing Hikvision System Technology Co., Ltd.
(hereinafter referred to as "Chongqing System"), are qualified to enjoy the west development preferential tax policy
from 2011 to 2020. According to the , Announcement on Continuation of the Corporate Income Tax Policy for the
Western Development (Ministry of Finance, State Administration of Taxation, National Development and Reform
Commission Announcement [2020] No.23), Chongqing Technology and Chongqing System will still enjoy the
preferential policies for the Western Development from 2021 to 2030. Therefore, the current enterprise income tax is
calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period (2020:15%).
(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. (hereinafter referred to as "Fuyang Baotai"), was recognized as a high-
tech enterprise and was valid for 3 years from 2018 to 2020. According to the Recording List of the First Batch of
identified High-tech Enterprises of Zhejiang Province in 2021 issued by the Leading Group Office of National High-
tech Enterprise Identification Management Work on January 24 2022, Fuyang Baotai is still identified as a high-tech
enterprise, and the validity period of the identification is 3 years, from 2021 to 2023. Therefore, the enterprise income
tax is calculated and paid on the basis of a reduced tax rate of 15% in the current reporting period (2020:15%).
291
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
(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. (hereinafter referred to as "Hangzhou System") and the Company’s joint venture subsidiary
Hangzhou Kuangxin Technology Co., Ltd. (hereinafter referred to as "Hangzhou Kuangxin") , was recognized as a
high-tech enterprise and was valid for 3 years from 2019 to 2021. Therefore, the enterprise income tax is calculated
and paid on the basis of a reduced tax rate of 15% in the current reporting period (2020:15%).
(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. (hereinafter
referred to as "Shanghai Goldway") was identified as the high-tech enterprise with a valid term of 3 years, from 2020
to 2022. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the
current reporting period (2020:15%).
(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. (hereinafter referred to as "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 is calculated and paid
on the basis of a reduced tax rate of 15% in the current reporting period (2020:15%).
(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. (hereinafter referred to as "Hangzhou Hikmicro Sensing") were identified as the high-
tech enterprises with a valid term of 3 years, from 2019 to 2021.
According to the Ministry of Industry and Information Technology of the People's Republic of China, the National
Development and Reform Commission, the Ministry of Finance and the National State Administration of Taxation,
No. 9 of 2021 Announcement on the Enterprise Income Tax Policy for Promoting the High-quality Development of
the Integrated Circuit Industry and Software Industry (Ministry of Finance, State Administration of Taxation, National
Development and Reform Commission, Ministry of Industry and Information Technology Announcement [2020] No.
45), Notice on Requirements for Formulating Lists of Integrated Circuit Enterprises, Projects and Software
Enterprises enjoying Preferential Tax Policies (Fa Gai Gao Ji [2021] No. 413), Hangzhou Hikmicro Sensing is an
integrated circuit design enterprise established before December 31st 2017. The qualified enterprise will be exempted
from corporate income tax for the first year to the second year from the profitable year, and levied half of the corporate
income tax at a statutory tax rate of 25% from the third year to the fifth year. The year of 2021 is the first year of
Hangzhou Hikmicro Sensing making profits and is exempt from enterprise income tax.
(8) In accordance with the Announcement on the Enterprise Income Tax Policies for Promoting the High-quality
Development of Integrated Circuit Industry and Software Industry (Ministry of Finance, State Administration of
Taxation, National Development and Reform Commission, Ministry of Industry and Information Technology
Announcement [2020] No. 45), , 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. (hereinafter referred to as
"EZVIZ Software") and Hangzhou Microimage Software Co., Ltd. (hereinafter referred to as "Hangzhou Microimage
Software"), are qualified software companies and are entitled to exemption from enterprise income tax in 2021 (2020:
tax-exempted).
(9) According to the Recording List of the First Batch of identified High-tech Enterprises of Zhejiang Province in 2021
issued by the Leading Group Office of National High-tech Enterprise Identification Management Work on January 24
2022, the Company’s joint venture subsidiaries Hangzhou Hikstorage Technology Co., Ltd. (hereinafter referred as
292
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
"Hangzhou Hikstorage") is identified as a high-tech enterprise with a validity period of 3 years, from 2021 to 2023.
Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in the current
reporting period (2020: 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 Hikrobot
Technology, Hangzhou Auto Software Co., Ltd., Hangzhou EZVIZ Software, Hangzhou Hikstorage, Hangzhou
Hikimaging Technology, Hangzhou Hikfire Technology Co., Ltd. (hereinafter referred to as "HikFire"), Hangzhou Rayin
Technology Co., Ltd. (hereinafter referred to as "Hangzhou Rayin Technology"), Hangzhou Microimage Software, Henan
Haikang Hua’An BaoQuan Electronics Co., Ltd. (hereinafter referred to as "Hua’An BaoQuan Electronics") and Hangzhou
Kuangxin, the VAT shall be calculated and paid with tax rate of 13% 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 wholly-owned subsidiaries, a part of Hangzhou Hikvision Technology
Co., Ltd.’s subsidiaries , Hangzhou Hikvision Security Equipment Leasing Service Co., Ltd. (hereinafter referred to as
"Hangzhou Leasing"), Anhui Hikvision Urban Operation Service Co., Ltd. (hereinafter referred to as "Anhui Urban
Service"), and the Company’s joint venture subsidiaries, Hangzhou Kuangxin, Zhejiang Haikang City Service Co., Ltd.
Luliang Branch, Henan Hua’An Bao Quan Intelligent Development Co., Ltd. Luoyang Branch, Henan Hua’an Security
Services Co., Ltd. (hereinafter referred to as "Hua’an Security Services"), and Henan Haikang Hua’An BaoQuan
Electronics Co., Ltd. Hangzhou Branch meet the industry requirements, and their sales accounted for more than 50% of
its total sales, are complying with the provisions of the Additional Deduction Policy and were entitled to additional
deduction preferential tax policy of input tax since April 1st 2019.
293
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
V. Notes to Items in the Consolidated Financial Statements
1. Cash and Bank Balances
Closing Balance Opening Balance
Item Foreign Foreign Exchange
Exchange rate
currency RMB amount currency rate for RMB amount
for conversion
amount amount conversion
Cash：
RMB - - 16,909.86 - - 17,959.62
EUR 41,743.98 7.2197 301,379.03 71,638.34 8.0250 574,897.70
INR 2,288,210.50 0.0857 196,099.64 2,504,019.19 0.0891 223,108.11
USD 33,133.82 6.3757 211,251.31 32,776.72 6.5249 213,864.82
GBP 2,343.11 8.6064 20,165.74 6,341.78 8.8903 56,380.33
Other currencies - - 1,105,467.95 - - 18,836.93
Bank balance：
RMB - - 31,577,521,085.40 - - 27,789,108,210.05
USD 272,857,839.86 6.3757 1,739,659,729.57 941,351,972.89 6.5249 6,142,227,487.92
EUR 96,011,075.74 7.2197 693,171,163.55 52,026,066.91 8.0250 417,509,186.97
GBP 17,199,784.69 8.6064 148,028,226.97 11,204,897.40 8.8903 99,614,899.38
INR 1,092,845,025.79 0.0857 93,656,818.71 1,203,270,539.96 0.0891 107,211,405.11
RUB 731,254,280.94 0.0855 62,522,241.02 1,742,132,380.50 0.0877 152,785,009.77
BRL 36,644,426.85 1.1436 41,906,566.54 54,535,451.03 1.2551 68,447,444.59
CAD 6,629,301.03 5.0046 33,176,999.93 5,383,485.44 5.1161 27,542,449.88
HKD 31,824,133.26 0.8176 26,019,411.35 13,632,862.61 0.8416 11,473,417.17
MXN 75,249,325.96 0.3116 23,447,689.97 - -
THB 121,837,799.11 0.1912 23,295,387.19 14,687,508.85 0.2328 3,419,252.06
JPY 392,086,869.13 0.0554 21,721,612.55 336,505,067.09 0.0632 21,267,120.24
PLN 10,745,706.25 1.5717 16,889,026.51 12,359,893.85 1.7520 21,654,534.02
ZAR 39,232,629.30 0.4004 15,708,744.77 14,765,683.20 0.4458 6,582,541.57
KRW 2,683,059,127.78 0.0054 14,488,519.29 855,655,685.00 0.0060 5,133,934.11
AED 5,055,058.19 1.7361 8,776,086.53 36,263,518.29 1.7761 64,407,634.83
AUD 1,886,989.36 4.6220 8,721,664.84 2,279,274.45 5.0163 11,433,524.41
Other currencies - - 25,075,802.57 - - 18,195,337.35
Other currency funds:
RMB - - 112,293,072.17 - - 463,887,119.07
USD 3,595,184.37 6.3757 22,921,816.99 3,101,420.39 6.5249 20,236,457.90
EUR 580,030.78 7.2197 4,187,648.22 465,821.33 8.0250 3,738,216.17
Other currencies - - 6,830,343.19 - - 2,748,878.19
Total 34,721,870,931.36 35,459,729,108.27
Including: deposited in
737,750,220.06 782,389,029.81
overseas banks
Details of other currency funds:
294
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 - - 35,387,135.77 - - 8,484.61
Deposits for letter of guarantee - - 51,980,170.28 - - 44,417,713.65
Other security deposits - - 4,679,097.53 60,000.00 4.7050 282,300.00
Deposits for letter of Credit in BRL - - - 283,313.18 1.2551 355,586.37
Tax Operation Margin for India - - - 120,305.95 0.0891 10,719.26
Other capitals with limitations - - 25,880,098.58 - - 389,816,426.07
Subtotal 117,926,502.16 434,891,229.96
Capitals without limitations:
Deposit in Alipay, Tenpay, etc. - - 27,469,681.96 - - 25,263,562.38
Other currency funds in USD 119,611.52 6.3757 762,607.17 4,662,441.59 6.5249 30,421,965.14
Other currency funds in EUR 10,262.10 7.2197 74,089.28 3,965.11 8.0250 31,820.01
Other currency funds in ZAR - - - 23,875.03 0.0877 2,093.84
Subtotal 28,306,378.41 55,719,441.37
Total 146,232,880.57 490,610,671.33
2. Held-for-trading Financial Assets
Unit: RMB
Item Closing Balance Opening Balance
Financial assets measured at fair value through current gain and loss 34,320,010.83 22,679,846.77
Including: derivative financial assets 34,320,010.83 22,679,846.77
Total 34,320,010.83 22,679,846.77
On December 31st 2021, derivative financial assets included forward foreign exchange contracts, foreign exchange option
contracts and interest rate swap contracts. The notional amount of forward foreign exchange contracts is RMB
982,803,001.81 (2020: RMB 1,875,987,806.80), the notional amount of foreign exchange option contracts is RMB
127,514,000.00 (2020: RMB 326,245,000.00) and the notional amount of interest rate swap contracts is RMB
389,142,481.68 (2020: Nil). The above forward foreign exchange contracts, foreign exchange option contracts and interest
rate swap contracts are not designated as hedging instruments, and the gains or losses arising from changes in their fair
values are directly included in the current profit and loss.
295
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
3. Notes Receivable
1) Categories of notes receivable
Unit：RMB
Category Closing Balance Opening Balance
Bank acceptance bill 1,228,046,849.95 1,003,388,157.28
Commercial acceptance bill 294,714,055.35 299,864,547.91
Total 1,522,760,905.30 1,303,252,705.19
2) As of December 31st 2021, the pledged notes receivable by the Group is nil.
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 as of December Amount not derecognized as of
Category
31st 2021 December 31st 2021
Bank acceptance bill Note (V) 30.3 - 711,238,103.83
Total - 711,238,103.83
Note: Transfer of financial assets
As of December 31st 2021, the Group gave RMB 711,238,103.83 (2020: RMB 482,454,604.99) undue 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) 30.3.
4) As of December 31st 2021, the Group transferred the defaulted notes receivable into accounts receivable.
Unit：RMB
Category Amounts transferred into accounts receivable as of December 31st 2021
Commercial Acceptance Bill 104,372,882.41
Total 104,372,882.41
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.
296
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
4. Accounts Receivable
1) Disclosure by aging
Unit: RMB
Closing Balance
Item
Accounts receivable Credit loss provision Proportion (%)
Within credit period 16,624,872,547.82 177,834,756.44 1.07
Within 1 year after exceeding credit period 8,356,240,264.84 372,160,503.23 4.45
1-2 years after exceeding credit period 1,507,966,937.94 333,458,412.68 22.11
2-3 years after exceeding credit period 1,005,164,963.25 492,661,398.25 49.01
3-4 years after exceeding credit period 392,162,927.88 335,519,470.71 85.56
Over 4 years after exceeding credit period 315,024,416.44 315,024,416.44 100.00
Subtotal 28,201,432,058.17 2,026,658,957.75 7.19
2) Classified disclosure of credit loss provision by methods
Unit: RMB
Closing Balance
Category Carrying amount Credit loss provision Book Value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 28,201,432,058.17 100.00 2,026,658,957.75 7.19 26,174,773,100.42
Total 28,201,432,058.17 100.00 2,026,658,957.75 7.19 26,174,773,100.42
Beginning Balance (Restated)
Category Carrying amount Credit loss provision Book Value
Amount Proportion (%) Amount Proportion (%) Amount
Provision for credit loss on a single basis - - - - -
Provision for credit loss by portfolios 23,573,877,737.66 100.00 1,517,809,819.87 6.44 22,056,067,917.79
Total 23,573,877,737.66 100.00 1,517,809,819.87 6.44 22,056,067,917.79
Provision for credit loss by portfolios for accounts receivable
Unit: RMB
Closing balance
Customer
Carrying amount Credit loss provision Proportion (%)
Portfolio A 3,806,501,754.60 92,528,632.14 2.43
Portfolio B 18,681,447,755.29 1,765,923,934.20 9.45
Portfolio C 5,713,482,548.28 168,206,391.41 2.94
Total 28,201,432,058.17 2,026,658,957.75 7.19
Description of credit loss provision by portfolios for accounts 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.
297
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
As of December 31st 2021 and January 1st 2021, the credit risk and expected credit losses of accounts receivable from portfolio A are as follows:
Unit: RMB
Closing balance Beginning balance
Age Estimated average Credit loss Estimated average Credit loss
Carrying value Book value Carrying value Book value
loss rate (%) provision loss rate (%) provision
Within credit period 0.04 3,095,392,524.62 1,291,742.49 3,094,100,782.13 0.02 2,971,260,488.09 604,959.50 2,970,655,528.59
Within 1 year after exceeding credit period 1.70 594,470,571.01 10,117,916.29 584,352,654.72 2.02 640,220,646.55 12,955,798.75 627,264,847.80
1-2 years after exceeding credit period 44.11 50,793,800.93 22,404,389.00 28,389,411.93 51.50 82,533,903.30 42,503,136.38 40,030,766.92
2-3 years after exceeding credit period 83.73 43,832,222.47 36,701,948.79 7,130,273.68 90.10 40,717,280.97 36,686,603.66 4,030,677.31
3-4 years after exceeding credit period 100.00 19,359,244.96 19,359,244.96 - 100.00 5,809,507.07 5,809,507.07 -
Over 4 years after exceeding credit period 100.00 2,653,390.61 2,653,390.61 - 100.00 830,934.85 830,934.85 -
Total 2.43 3,806,501,754.60 92,528,632.14 3,713,973,122.46 2.66 3,741,372,760.83 99,390,940.21 3,641,981,820.62
As of December 31st 2021 and January 1st 2021, the credit risk and expected credit losses of accounts receivable from portfolio B are as follows:
Unit: RMB
Closing balance Beginning balance (restated)
Age Estimated average Credit loss Estimated average Credit loss
Carrying value Book value Carrying value Book value
loss rate (%) provision loss rate (%) provision
Within credit period 1.99 8,575,278,759.81 170,679,301.15 8,404,599,458.66 0.76 6,294,425,956.16 48,017,503.05 6,246,408,453.11
Within 1 year after exceeding credit period 4.63 7,167,632,732.53 331,869,605.70 6,835,763,126.83 3.78 5,799,607,133.14 219,408,150.28 5,580,198,982.86
1-2 years after exceeding credit period 19.80 1,387,932,595.51 274,788,108.40 1,113,144,487.11 20.69 1,436,628,039.73 297,283,759.42 1,139,344,280.31
2-3 years after exceeding credit period 44.75 914,771,713.21 409,398,421.89 505,373,291.32 57.51 665,262,321.85 382,616,768.44 282,645,553.41
3-4 years after exceeding credit period 83.68 347,000,938.34 290,357,481.17 56,643,457.17 83.09 238,233,041.29 197,947,096.87 40,285,944.42
Over 4 years after exceeding credit period 100.00 288,831,015.89 288,831,015.89 - 100.00 146,749,340.78 146,749,340.78 -
Total 9.45 18,681,447,755.29 1,765,923,934.20 16,915,523,821.09 8.86 14,580,905,832.95 1,292,022,618.84 13,288,883,214.11
298
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
As of December 31st 2021 and January 1st 2021, the credit risk and expected credit losses of accounts receivable from portfolio C are as follows:
Unit: RMB
Closing balance Beginning balance
Age Estimated average Credit loss Estimated average Credit loss
Carrying value Book value Carrying value Book value
loss rate (%) provision loss rate (%) provision
Within credit period 0.12 4,954,201,263.39 5,863,712.80 4,948,337,550.59 0.20 4,736,831,208.62 9,676,562.96 4,727,154,645.66
Within 1 year after exceeding credit period 5.08 594,136,961.30 30,172,981.24 563,963,980.06 6.84 391,071,518.27 26,753,464.86 364,318,053.41
1-2 years after exceeding credit period 52.38 69,240,541.50 36,265,915.28 32,974,626.22 51.18 69,085,009.97 35,354,825.98 33,730,183.99
2-3 years after exceeding credit period 100.00 46,561,027.57 46,561,027.57 - 100.00 28,016,950.72 28,016,950.72 -
3-4 years after exceeding credit period 100.00 25,802,744.58 25,802,744.58 - 100.00 11,470,715.01 11,470,715.01 -
Over 4 years after exceeding credit period 100.00 23,540,009.94 23,540,009.94 - 100.00 15,123,741.29 15,123,741.29 -
Total 2.94 5,713,482,548.28 168,206,391.41 5,545,276,156.87 2.41 5,251,599,143.88 126,396,260.82 5,125,202,883.06
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 2021 (restated) 1,517,809,819.87
Provision/(reverse) during the current reporting period 566,389,266.23
Derecognition of financial assets (including direct write-downs) and transfer out (54,561,920.83)
Difference arised from foreign currency statement translation (2,978,207.52)
Balance on December 31st 2021 2,026,658,957.75
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 55,152,653.63, and RMB 590,732.80 is recollected after writing-off.
299
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
4) Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
Proportion (%) of the total
Relationship Book value balance
Closing balance for credit loss balance of accounts
Name of the Party with the of accounts
provision receivable at the end of the
Company receivable
current reporting period
CETC’s subsidiary company A 373,842,942.92 129,057,296.16 1.33
Related Party
(Note)
Third Party A Third party 340,541,342.55 2,962,709.68 1.21
Third Party B Third party 213,520,031.59 1,857,624.27 0.76
Third Party C Third party 141,703,906.59 1,232,823.99 0.50
Third Party D Third party 139,825,164.14 1,931,817.02 0.50
Total 1,209,433,387.79 137,042,271.12 4.30
Note: A subsidiary of CETC is a subsidiary of China Electronics Technology Group Co., Ltd., the Company's ultimate
controller.
5) As of December 31st 2021, there is no termination of accounts receivable booking due to transfer of a financial
asset.
6) As of December 31st 2021, 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
1) Receivables for financing by categories
Unit: RMB
Item Closing Balance Opening Balance
Bank acceptance bill 1,316,035,122.06 1,959,601,195.25
Total 1,316,035,122.06 1,959,601,195.25
2) At the end of the reporting period, the Group’s pledged receivables for financing
Unit: RMB
Item Amount pledged as of December 31st 2021
Bank acceptance bill 4,337,929.69
Total 4,337,929.69
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 as of December Amount not derecognized as of December
Item
31st 2021 31st 2021
Bank acceptance bill 2,800,863,150.72 -
Total 2,800,863,150.72 -
300
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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.
6. Prepayment
1) Prepayments by aging analysis
Unit: RMB
Closing Balance Opening Balance (Restated)
Aging
Carrying amount Proportion (%) Carrying amount Proportion (%)
Within 1 year 472,051,582.19 93.33 261,740,350.78 89.22
1-2 years 16,837,633.29 3.33 20,302,314.17 6.92
2-3 years 12,180,525.79 2.41 9,021,070.25 3.07
Over 3 years 4,728,512.08 0.93 2,318,835.89 0.79
Total 505,798,253.35 100.00 293,382,571.09 100.00
2) Closing balances of top five prepayments parties
As of December 31st 2021, the Group’s top five balances of prepayments amounted to RMB 165,956,536.73,
accounting for 32.81% of total closing balance of prepayments.
301
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
7. Other Receivables
1) Other receivables by aging
Unit: RMB
Closing Balance
Item
Other receivables Bad debt provision Proportion (%)
Within contract period 297,564,204.37 2,587,782.99 0.87
Within 1 year 52,387,962.11 1,743,779.91 3.33
1-2 years 7,248,182.48 1,343,438.08 18.53
2-3 years 9,568,207.30 3,943,058.26 41.21
3-4 years 5,983,084.56 4,120,660.15 68.87
Over 4 years 12,437,987.22 11,830,462.77 95.12
Subtotal 385,189,628.04 25,569,182.16 6.64
2) Other receivables by nature of the payment
Unit: RMB
Item Closing Balance Opening Balance (Restated)
Temporary payments for receivables 113,230,687.20 294,409,377.31
Guarantee deposits 216,176,255.21 173,447,240.76
Tax rebates 762,862.50 67,714,444.77
Investment intention fund 4,000,000.00 1,000,000.00
Others 51,019,823.13 33,758,132.77
Total 385,189,628.04 570,329,195.61
302
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 51,303,132.79 409,000.25 (25,640,443.39) - (502,507.49) 25,569,182.16
Total 51,303,132.79 409,000.25 (25,640,443.39) - (502,507.49) 25,569,182.16
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 2021 3,092,760.15 9,818,044.78 38,392,327.86 51,303,132.79
The book balance of other receivables on January 1st
2021 in the current reporting period
--Transfer into stage 2 (411,469.92) 411,469.92 - -
-- Transfer into stage 3 - (1,995,928.05) 1,995,928.05 -
--provision/(reverse) in the current reporting period 409,000.25 (5,146,368.66) (20,494,074.73) (25,231,443.14)
Other changes (502,507.49) - - (502,507.49)
st 2,587,782.99 3,087,217.99 19,894,181.18 25,569,182.16
Balance on December 31 2021
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 nil.
303
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
5) Top five debtors based on corresponding closing balance of other receivables
Unit: RMB
Relationship with the Proportion of total closing balance Closing balance for credit loss
Entities Nature Closing balance Aging
Company for other receivables (%) provision
Third party E Third party Guarantee deposits 6,927,179.05 Within 1 year 1.80% 293,019.67
Third party F Third party Guarantee deposits 5,078,072.96 Within the contract period 1.32% 44,179.23
Third party G Third party Guarantee deposits 5,000,000.00 Within the contract period 1.30% 43,500.00
Third party H Third party Guarantee deposits 3,738,423.66 Within 2-3 years 0.97% 1,540,604.39
Third party I Third party Guarantee deposits 3,550,000.00 Within the contract period 0.92% 30,885.00
Total 24,293,675.67 6.31% 1,952,188.29
6) As of December 31st 2021, the Group does not have other receivables related to government subsidies.
7) As of December 31st 2021, there is no termination of other receivables booking due to transfer of a financial asset.
8) As of December 31st 2021, the Group has no assets/liabilities booked due to any transferred other receivables that the Group continues to be involved in.
8. Inventories
1) Categories of inventories
Unit: RMB
Closing Balance Opening Balance
Provision for decline in value of Provision for decline in value of
Category
Carrying amount inventories/ Impairment provision Book value Carrying amount inventories/ Impairment provision Book value
for contract performance cost for contract performance cost
Raw materials 7,947,851,148.15 233,046,765.20 7,714,804,382.95 5,307,099,264.63 96,173,520.97 5,210,925,743.66
Work-in-progress 437,963,160.90 - 437,963,160.90 364,831,525.62 - 364,831,525.62
Finished goods 9,760,949,606.67 702,675,806.16 9,058,273,800.51 5,863,464,370.61 516,926,580.56 5,346,537,790.05
Contract performance cost 763,071,063.24 - 763,071,063.24 555,610,981.37 - 555,610,981.37
Total 18,909,834,978.96 935,722,571.36 17,974,112,407.60 12,091,006,142.23 613,100,101.53 11,477,906,040.70
304
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
2) Provision for decline in value of inventories
Unit: RMB
Increase in the current Decrease in the current reporting period Effect on conversion of financial statements
Category Opening balance Closing Balance
reporting period Reversals Write-off denominated in foreign currencies
Raw materials 96,173,520.97 137,440,277.81 - 567,033.58 - 233,046,765.20
Finished goods 516,926,580.56 297,173,954.13 - 96,860,925.14 (14,563,803.39) 702,675,806.16
Subtotal 613,100,101.53 434,614,231.94 - 97,427,958.72 (14,563,803.39) 935,722,571.36
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 Group 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 528,050,817.38 recognized during the current reporting period.
305
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
9. Contract Assets
1) Details of contract assets:
Unit: RMB
Closing Balance Opening Balance (Restated)
Items Provisions for Provisions for
Carrying amount Book value Carrying amount Book value
impairment impairment
Constructions 1,274,476,664.40 9,873,249.73 1,264,603,414.67 253,042,589.28 2,242,831.31 250,799,757.97
Maintenance
148,057,308.84 1,288,098.60 146,769,210.24 69,123,440.48 518,654.35 68,604,786.13
services
Total 1,422,533,973.24 11,161,348.33 1,411,372,624.91 322,166,029.76 2,761,485.66 319,404,544.10
2) The classification and disclosure of the method of provision for impairment of contract assets during the current
reporting period:
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 portfolio 1,422,533,973.24 100.00 11,161,348.33 0.78 1,411,372,624.91
Total 1,422,533,973.24 100.00 11,161,348.33 0.78 1,411,372,624.91
Provision, re-collection, or reverse in the current reporting period:
Unit: RMB
Expected credit loss during the Expected credit loss during the
Credit loss provision whole duration (No credit whole duration (Credit Total
impairment occurred) impairment occurred)
Balance on January 1st 2021 (restated) 2,761,485.66 - 2,761,485.66
Provision/reverse during the current 8,399,862.67 - 8,399,862.67
reporting period
Balance on December 31st 2021 11,161,348.33 - 11,161,348.33
Impairment provision for the current reporting period amounted to RMB 8,399,862.67, with no reversal, write-off or
recovery of impairment provision during the current reporting period.
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 consideration, it will be recognized as accounts
receivable, while the remaining portion will be recognized as contract assets; if 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.
306
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
10. Non-current Assets Due within One Year
Unit: RMB
Item Closing Balance Opening Balance (Restated)
Long-term receivables due within one year (Note (V) 12) 975,960,437.14 850,871,579.78
Total 975,960,437.14 850,871,579.78
11. Other Current Assets
Unit: RMB
Item Closing balance Opening balance (restated)
Deductible VAT input 671,022,973.90 391,898,131.26
Prepaid corporate income tax 146,600,985.54 41,520,799.46
Prepaid tariff 113,756,173.22 22,446,422.69
Others 91,220,245.12 41,571,699.38
Total 1,022,600,377.78 497,437,052.79
307
Hikvision 2021 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1st 2021 to December 31st 2021
12. Long-term Receivables
1) Details of long-term receivables
Unit: RMB
Closing balance Opening balance (restated)
Range of
Item Provision for credit Provision for
Carrying amount Book value Carrying amount Book value discount rate
loss credit loss
Financial leases receivables 338,676,520.11 32,408,674.53 306,267,845.58 332,860,621.51 21,387,061.50 311,473,560.01 0.54%-6.05%
Including: Unrealized income from financing 15,579,721.55 - 15,579,721.55 20,751,939.07 - 20,751,939.07 -
Installments for selling goods 881,821,037.32 87,043,902.28 794,777,135.04 1,094,609,682.99 69,465,172.90 1,025,144,510.09 4.24%-6.45%
Including: Unrealized income from financing 26,548,778.33 - 26,548,778.33 40,238,738.24 - 40,238,738.24 -
Employee housing loan 487,983,401.49 - 487,983,401.49 - - - 4.95%
Including: Unrealized income from financing 59,389,998.51 - 59,389,998.51 - - - -
Less: Non-current assets due within one year (Note (V) 10) 1,093,138,859.09 117,178,421.95 975,960,437.14 935,714,181.41 84,842,601.63 850,871,579.78 -
Total 615,342,099.83 2,274,154.86 613,067,944.97 491,756,123.09 6,009,632.77 485,746,490.32 -
2) Credit loss provision
As part of the Group's credit risk management, in addition to employee housing loans, 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 and institutions. There are a large number of customers with 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 2021, the credit risk and expected credit losses of long-term receivables of these customers are as follows:
Unit: RMB
Closing balance
Age
Amounts Credit loss provision Estimated average loss rate (%)
Within credit period 646,311,250.51 5,623,293.18 0.87
Within 1 year after exceeding credit period 263,839,586.40 11,158,541.08 4.23
308
Hikvision 2021 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1st 2021 to December 31st 2021
Closing balance
Age
Amounts Credit loss provision Estimated average loss rate (%)
1-2 years after exceeding credit period 181,691,364.31 33,921,777.72 18.67
2-3 years after exceeding credit period 87,750,268.44 36,161,885.63 41.21
3-4 years after exceeding credit period 26,997,755.81 18,679,747.24 69.19
Over 4 years after exceeding credit period 13,907,331.96 13,907,331.96 100.00
Total 1,220,497,557.43 119,452,576.81 9.79
The changes in the Group's long-term receivables' expected credit loss provision for the current reporting period are as follows:
Unit: RMB
Stage 1 Stage 2 Stage 3
Expected credit losses for
Credit loss provision Expected credit losses for the Total
Expected credit losses in the entire duration
entire duration
the next 12 months (No credit impairment
(Credit impairment has occurred)
occurred)
Balance on January 1st 2021 (restated) 11,371,156.80 37,954,013.24 41,527,064.36 90,852,234.40
On January 1st 2021, the book balance of long-term receivables in the current reporting period
Transfer into stage 2 (3,113,307.12) 3,113,307.12 - -
Transfer into stage 3 - (18,717,132.26) 18,717,132.26 -
Provision/(reverse) during the current reporting period (2,634,556.50) 22,730,130.70 8,504,768.21 28,600,342.41
Balance on December 31st 2021 5,623,293.18 45,080,318.80 68,748,964.83 119,452,576.81
3) As of December 31st 2021, there is no termination of long-term receivables booking due to transfer of a financial asset.
4) As of December 31st 2021, the Group has no assets/liabilities booked due to any transferred long-term receivables that the Group continue to be involved in.
309
Hikvision 2021 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1st 2021 to December 31st 2021
13. Long-term Equity Investment
Unit: RMB
Increase/Decrease in the current reporting period
Closing
balance
Opening Investment Profit Adjustment: Declaration of Closing
The invested entity Other for
Balance Additional Investment (Loss) recognized Other cash dividends Impairment Balance
Changes others impairment
Investments reduction under the equity comprehensive or profit provision provision
in equity
Method income distribution
1. Joint venture companies
Hangzhou Haikang
Intelligent Industrial Equity
612,479,371.62 - - 89,889,968.33 - - - - - 702,369,339.95 -
Investment Fund
Partnership (L.P.)
Daishan Hailai Yunzhi
Technology Co., Ltd. 15,253,091.76 - - 645,353.20 - - (999,000.00) - (14,899,444.96) - -
(“Daishan Hailai”)(Note 1)
Zhejiang City Digital
11,864,018.37 - - 350,301.92 - - - - - 12,214,320.29 -
Technology Co., Ltd.
Zhejiang Haishi Huayue
Digital Technology Co., 9,985,577.32 - - 1,944,935.34 - - - - - 11,930,512.66 -
Ltd.
Shenzhen Hikvision Urban
6,029,569.69 - - (4,764,911.31) - - - - - 1,264,658.38 -
Service Operation Co., Ltd.
Guangxi Haishi Urban
Operation Management 5,296,695.36 3,000,000.00 - (3,664,494.77) - - - - - 4,632,200.59 -
Co., Ltd. (Note2)
Yunnan Yinghai Parking
4,841,060.76 - - (282,179.67) - - - - - 4,558,881.09 -
Service Co., Ltd.
Xuzhou Kangbo Urban
Operation Management 4,631,286.58 4,900,000.00 - (298,084.91) - - - - - 9,233,201.67 -
Service Co., Ltd. (Note2)
Subtotal 670,380,671.46 7,900,000.00 - 83,820,888.13 - - (999,000.00) - (14,899,444.96) 746,203,114.63 -
310
Hikvision 2021 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1st 2021 to December 31st 2021
Increase/Decrease in the current reporting period
Closing
balance
Opening Investment Profit Adjustment: Declaration of Closing
The invested entity Other for
Balance Additional Investment (Loss) recognized Other cash dividends Impairment Balance
Changes others impairment
Investments reduction under the equity comprehensive or profit provision provision
in equity
Method income distribution
2. Associated Companies
Wuhu Sensor Technology - - - - - - -
58,491,264.42 16,975,212.42 75,466,476.84 -
Co., Ltd.
Maxio Technology - - - - - - - -
91,955,638.61 12,581,889.69 104,537,528.30
(Hangzhou) Co., Ltd.
Zhiguang Hailian Big Data - - - - - - - -
21,253,058.87 32,784.40 21,285,843.27
Technology Co., Ltd.
Sanmenxia Xiaoyun Vision - - - - - - - -
3,671,496.93 (602,110.90) 3,069,386.03
Technology Co., Ltd.
Jiaxin Haishi JiaAn - - - - - -
Zhicheng Technology Co., 8,479,131.27 12,000,000.00 - 1,175,611.18 21,654,742.45
Ltd. (Note2)
Qinghai Qingtang Big Data - - - - - - - -
9,795,448.67 153,006.26 9,948,454.93
Co., Ltd.
- - - - - -
Subtotal 193,646,038.77 12,000,000.00 - 30,316,393.05 235,962,431.82
Total 864,026,710.23 19,900,000.00 - 114,137,281.18 - - (999,000.00) - (14,899,444.96) 982,165,546.45 -
Note 1：The Group includes Daishan Hailai in the scope of consolidated financial statements in 2021, and it is no longer accounted for as a joint venture. Please refer to Note (VI) 1 for
details.
Note 2: The Group made additional investment in the investee this year, and the proportion of equity held in the investee remained unchanged.
311
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
14. Other Non-current Financial Assets
Unit: RMB
Additional Investment
investment recovery Changes in fair
Shareholding Opening during the during the value during the
Invested Entity (Note 1) Closing balance
% balance current current current
reporting reporting reporting period
period period
CETC Finance Co., Ltd.
3.83% 423,435,737.20 - - (45,714,936.94) 377,720,800.26
(Note 2)
Hangzhou Confirmware
9.52% 31,092,032.62 - - (4,277,193.66) 26,814,838.96
Technology Co., Ltd.
Zhejiang Tuxun
Technology Co.,Ltd. 8.13% 32,222,764.45 - - (3,222,764.45) 29,000,000.00
(Zhejiang Tuxun)
Zhengzhou Guokong
Smart City Technology 7.00% 700,000.00 - - - 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.
Total 491,939,067.27 - - (53,214,895.05) 438,724,172.22
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. During the current reporting
period, the Company received a cash dividend of RMB 115,644,801.97 from China Electronic Technology Finance Co.,
Ltd. (2020: RMB 150,000,000.00) and recognized it as current profit and loss. Please refer to Note (V) 52 for details.
15. Fixed Assets
1) Details of fixed assets
Unit: RMB
Building and General-purpose Special-purpose Transportation
Items Total
construction equipment equipment vehicles
I. Total original carrying amount
1. Opening balance (restated) 5,100,087,402.39 941,827,698.48 2,045,911,036.97 96,077,396.86 8,183,903,534.70
2. Increase in the current
793,892,828.70 451,748,264.69 341,197,135.46 12,948,583.65 1,599,786,812.50
reporting period
1) purchase 3,463,469.47 399,945,494.69 317,277,749.81 6,628,378.05 727,315,092.02
2) transferred from
725,317,455.23 12,600,791.51 23,919,385.65 - 761,837,632.39
construction in progress
3) Increase due to business
combination not under 65,111,904.00 39,201,978.49 - 6,320,205.60 110,634,088.09
common control
3.Decrease in the current
47,120,425.71 18,746,909.37 64,738,596.94 9,697,070.45 140,303,002.47
reporting period
1) disposal or write-off 47,120,425.71 18,746,909.37 64,738,596.94 9,697,070.45 140,303,002.47
4. Effect on conversion of (6,279,079.76) (8,704,926.28) (3,560,443.31) (480,620.81) (19,025,070.16)
312
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Building and General-purpose Special-purpose Transportation
Items Total
construction equipment equipment vehicles
financial statements
denominated in foreign
currencies
5.Closing Balance 5,840,580,725.62 1,366,124,127.52 2,318,809,132.18 98,848,289.25 9,624,362,274.57
II. Accumulated depreciation
1. Opening balance
992,312,042.71 368,072,360.10 937,821,068.08 55,020,864.96 2,353,226,335.85
(restated)
2. Increase in the current
249,655,037.63 168,558,608.03 254,911,458.17 11,904,100.45 685,029,204.28
reporting period
(1) accrual 249,655,037.63 168,558,608.03 254,911,458.17 11,904,100.45 685,029,204.28
3.Decrease in the
current reporting 25,823,526.69 15,847,515.29 53,025,757.14 7,417,628.76 102,114,427.88
period
(1) disposal or write-
25,823,526.69 15,847,515.29 53,025,757.14 7,417,628.76 102,114,427.88
off
4. Effect on conversion of
financial statements
(759,626.03) (4,651,337.25) (1,746,499.39) (212,046.28) (7,369,508.95)
denominated in foreign
currencies
5.Closing balance 1,215,383,927.62 516,132,115.59 1,137,960,269.72 59,295,290.37 2,928,771,603.30
III. Total book value
Closing balance on book value 4,625,196,798.00 849,992,011.93 1,180,848,862.46 39,552,998.88 6,695,590,671.27
Opening balance on book value
4,107,775,359.68 573,755,338.38 1,108,089,968.89 41,056,531.90 5,830,677,198.85
(restated)
2) As of December 31st 2021, the Group did not have any significant idle fixed assets.
3) As of December 31st 2021, the Group had not rent out any fixed asset through operating leasing.
4) Fixed assets of which certificates of title have not been granted as of December 31st 2021：
Unit: RMB
Item Carrying amount Reason for certificates of title not granted
13,451,117.83 In the process of obtaining the real estate
Office building for branches
certificates
94,622,498.88 In the process of obtaining the real estate
Fuzhou High-tech Zone Innovation Park
certificates after transferred to fixed assets
415,416,636.80 In the process of obtaining the real estate
Chongqing Science and Technology Park Phase II Project
certificates after transferred to fixed assets
Total 523,490,253.51
313
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
16. Construction in Progress
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 896,287,490.09 - 896,287,490.09 521,626,793.33 - 521,626,793.33
Hangzhou Innovation Industry Park 393,310,782.16 - 393,310,782.16 337,821,702.49 - 337,821,702.49
Security Industrial Base (Tonglu) Phase II 390,702,241.74 - 390,702,241.74 74,726,929.65 - 74,726,929.65
Continued Construction Project
Xi’an Science and Technology Park Project 181,009,327.21 - 181,009,327.21 12,679,174.93 - 12,679,174.93
Shijiazhuang Science and Technology Park Project 100,184,640.21 - 100,184,640.21 2,060,553.46 - 2,060,553.46
EZVIZ Smart Home Products’ Industrial Base
95,322,172.33 - 95,322,172.33 2,332,067.08 - 2,332,067.08
Project (Infrastructure Part)
Chongqing Science and Technology Park Phase II
- - - 249,810,250.79 - 249,810,250.79
Project
Others 266,519,444.94 266,519,444.94 224,177,721.99 - 224,177,721.99
Total 2,323,336,098.68 - 2,323,336,098.68 1,425,235,193.72 - 1,425,235,193.72
2) Changes in significant construction in progress during the current reporting period
Unit: RMB
Effect on Capitalizat
Transferred to Accumulated Including:
conversion of Amount ion rate
fixed assets capitalized capitalized interest
Increase in the financial Other invested as Construction for interest Source of
Budget during the interest and and profit/loss on
Item Opening balance current reporting statements Reductions Closing balance proportion in Progress in the
(RMB 0,000) current profit/loss on exchange for the funds
period denominated (Note 1) of budget (%) current
reporting exchange current reporting
in foreign amount (%) reporting
period (Note 2) period
currencies period (%)
Chengdu
Science and Self-
196,900.00 521,626,793.33 374,660,696.76 - - - 896,287,490.09 45.52% 45.52% - - -
Technology financing
Park Project
Hangzhou
Innovation 102,600.00 337,821,702.49 55,489,079.67 - - - 393,310,782.16 38.33% 38.33% (70,963,330.44) (124,649,345.63) 0.85% Special loan
Industry Park
314
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Capitaliz
Effect on ation rate
Accumulated Including:
Transferred to conversion of Amount for
capitalized capitalized interest
Budget Increase in the fixed assets financial invested as Construction interest in
Other interest and and profit/loss on Source of
Item (RMB Opening balance current reporting during the statements Closing balance a proportion in Progress the
Reductions profit/loss on exchange for the funds
0,000) period current reporting denominated in of budget (%) current
(Note 1) exchange current reporting
period foreign amount (%) reporting
(Note 2) period
currencies period
(%)
Security
Industrial
Base (Tonglu)
Self-
Phase II 85,100.00 74,726,929.65 315,975,312.09 - - - 390,702,241.74 45.91% 45.91% - - -
financing
Continued
Construction
Project
Xi’an Science
and Self-
227,800.00 12,679,174.93 168,330,152.28 - - - 181,009,327.21 7.95% 7.95% - - -
Technology financing
Park project
Shijiazhuang
Science and Self-
89,800.00 2,060,553.46 98,124,086.75 - - - 100,184,640.21 11.16% 11.16% - - -
Technology financing
Park Project
EZVIZ Smart
Home
Products
Self-
Industrial 75,257.00 2,332,067.08 92,990,105.25 - - - 95,322,172.33 12.67% 12.67% - - -
financing
Base Project
(Infrastructure
Part)
Security
Industrial Self-
77,000.00 659,304.24 48,109,601.71 - - - 48,768,905.95 6.33% 6.33%
Base (Tonglu) financing
Phase III
Zhengzhou
Science and Self-
48,500.00 13,529,409.53 28,500,043.29 - - - 42,029,452.82 8.67% 8.67% - - -
Technology financing
Park Project
Wuhan
Intelligence Self-
238,700.00 2,370,546.89 19,234,593.60 - - - 21,605,140.49 0.91% 0.91%
Industrial financing
Park
Chongqing
Science and
Self-
Technology 43,000.00 249,810,250.79 175,974,725.06 (425,784,975.85) - - - 100.00% 100.00% - - -
financing
Park project-
phase 2
Self-
Others 207,618,461.33 286,993,506.34 (336,052,656.54) (1,576,075.70) (2,867,289.75) 154,115,945.68 - - - - -
financing
Total 1,184,657.00 1,425,235,193.72 1,664,381,902.80 (761,837,632.39) (1,576,075.70) (2,867,289.75) 2,323,336,098.68 - - (70,963,330.44) (124,649,345.63)
315
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Note 1: Other reductions during the the current reporting period were the completed renovation that transferred to the long-term deferred expenses.
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 2021, the Group did not have any sign of impairment of projects under construction; therefore, no provision for impairment loss was booked.
316
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
17. Right-of-use Assets
Unit: RMB
Building and General-purpose Special-purpose Transportation
Items Total
construction equipment equipment vehicles
I. Total original carrying amount
1. Opening balance (restated) 333,243,923.96 230,374.45 91,934,144.20 14,423,291.59 439,831,734.20
2. Increased 381,865,373.66 - - 10,480,492.36 392,345,866.02
(1)New Lease 360,641,319.67 - - 10,480,492.36 371,121,812.03
(2) Increase due to business
combination not under 21,224,053.99 - - - 21,224,053.99
common control
3. Decreased 13,645,883.01 - - 55,450.93 13,701,333.94
(1) The lease contract
13,645,883.01 - - 55,450.93 13,701,333.94
expires or terminates early
4. Effect on conversion of
financial statements denominated (13,925,949.47) - - (1,953,346.06) (15,879,295.53)
in foreign currencies
5. Closing balance 687,537,465.14 230,374.45 91,934,144.20 22,894,986.96 802,596,970.75
II. Accumulated depreciation
1. Opening balance (restated) - 94,562.47 46,739,618.43 - 46,834,180.90
2. Increased 169,004,407.93 50,014.45 21,357,177.93 7,950,776.09 198,362,376.40
(1) Provisions 169,004,407.93 50,014.45 21,357,177.93 7,950,776.09 198,362,376.40
3. Decreased 6,370,832.58 - - 55,450.93 6,426,283.51
(1) The lease contract
6,370,832.58 - - 55,450.93 6,426,283.51
expires or terminates early
4. Effect on conversion of
financial statements denominated (2,145,437.09) - - (421,538.70) (2,566,975.79)
in foreign currencies
5. Closing balance 160,488,138.26 144,576.92 68,096,796.36 7,473,786.46 236,203,298.00
III. Total book value
1. Closing balance on book value 527,049,326.88 85,797.53 23,837,347.84 15,421,200.50 566,393,672.75
2. Opening balance on book value
333,243,923.96 135,811.98 45,194,525.77 14,423,291.59 392,997,553.30
(restated)
Note: The Group leased a number of assets, including building and construction, general-purpose equipments, special-
purpose equipments and transportation vehicles, for lease terms ranging from 1 to 13 years.
In the current reporting period, the short-term lease expenses and low-value asset lease expenses that the Group included
in the current profit and loss with simplified processing were RMB 82,001,765.42.
The profit and loss arising from the sale-leaseback transaction of the Group this year was RMB 21,407,192.38 for the
depreciation of the right-of-use asset. Please refer to Note (X) 5 for details.
The total cash outflow related to leases for the year was RMB 272,298,575.65.
As of December 31st 2021, the short-term lease portfolio committed by the Group is consistent with the short-term lease
corresponding to the above lease fee.
18. Intangible Assets
1) Details of construction in progress
Unit: RMB
317
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Intellectual property
Item Land use right Application Software Franchise Total
right
I. Total original carrying
amount
1. Opening balance
1,224,893,932.49 70,044,034.88 298,812,867.42 83,741,415.51 1,677,492,250.30
(restated)
2. Increased 34,319,532.77 - 80,770,503.27 8,195,011.94 123,285,047.98
(1) Purchase 34,319,532.77 - 80,770,503.27 8,195,011.94 123,285,047.98
3. Decreased - - 1,589,705.68 - 1,589,705.68
(1)Disposal or write-off - - 1,589,705.68 - 1,589,705.68
4. Effect on conversion of
financial statements
- (77,601.00) (3,011,514.19) (2,909.84) (3,092,025.03)
denominated in foreign
currencies
5. Closing balance 1,259,213,465.26 69,966,433.88 374,982,150.82 91,933,517.61 1,796,095,567.57
II. Total accumulated
amortization
1.Opening balance
76,612,562.29 60,718,480.10 217,067,323.75 1,126,160.47 355,524,526.61
(restated)
2. Increased 26,980,428.75 4,345,702.67 98,918,896.79 10,463,080.36 140,708,108.57
(1)Accrual 26,980,428.75 4,345,702.67 98,918,896.79 10,463,080.36 140,708,108.57
3. Decreased - - 1,416,795.89 - 1,416,795.89
(1)Disposal or write-off - - 1,416,795.89 - 1,416,795.89
4. Effect on conversion of
financial statements
- (61,588.49) (2,905,511.37) (586.93) (2,967,686.79)
denominated in foreign
currencies
5. Closing balance 103,592,991.04 65,002,594.28 311,663,913.28 11,588,653.90 491,848,152.50
III. Total book value
1. Closing balance on book
1,155,620,474.22 4,963,839.60 63,318,237.54 80,344,863.71 1,304,247,415.07
value
2. Opening balance on book
1,148,281,370.20 9,325,554.78 81,745,543.67 82,615,255.04 1,321,967,723.69
value (restated)
2) At the end of the current reporting period, the intangible asset of the Group that has not completed the title
certificate is nil.
19. Goodwill
1) Goodwill book value
Unit: RMB
Increased Decreased Effect on
conversion of
Business combination financial
The name of the investee or the matter Opening
not involving Liquidation & statements Closing balance
that forming a goodwill balance
enterprises under cancellation denominated in
common control foreign
currencies
Secure Holdings Limited (Note 1) 130,320,174.19 - 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. (Note 1)
BK EESTI AKTSIASELTS 4,826,266.94 - - (484,310.63) 4,341,956.31
SIA “BK Latvia” 4,819,569.44 - - (483,638.54) 4,335,930.90
318
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Increased Decreased Effect on
conversion of
Business combination financial
The name of the investee or the matter Opening
not involving Liquidation & statements Closing balance
that forming a goodwill balance
enterprises under cancellation denominated in
common control foreign
currencies
Hikvision Joint-Stock Company
(original name: ZAO Hikvision) (Note 67,349.64 - 67,349.64 - -
1)
Hangzhou Haikang Zhicheng
Investment and Development Co., 12,573.42 - - - 12,573.42
Ltd.
SISTEMAS Y SERVICIOS DE
COMUNICACIN, S.A. DE C.V. - 74,385,546.76 - (1,077,437.71) 73,308,109.05
(“Syscom MX”) (Note 2)
Total 274,203,665.20 74,385,546.76 144,161,929.71 (2,045,386.88) 202,381,895.37
Note 1: Secure Holdings Limited, Hundure Technology (Shanghai) Co., Ltd. and Hikvision Joint-Stock Company were
cancelled in 2021, the goodwill decreased by RMB 144,161,929.71 this year.
Note 2: The Group acquired Syscom MX in September 2021, resulting in a goodwill of RMB 74,385,546.76, see Note
(VI) 1.
2) Goodwill impairment provision
When the Group conducts impairment test on goodwill at the end of the reporting period, the key assumptions adopted
and their basis are as follows:
The recoverable amount of asset group containing apportioned goodwill is determined according to the present value of
the estimated future cash flow of the relevant asset group. Its future cash flows are determined based on the 5-year financial
budget from 2022 to 2026 approved by management, with a certain discount rate. Cash flow over 5 years is calculated on
the basis of 0-2% growth rate. This growth rate is determined based on the relevant industry's growth forecast and does
not exceed the long-term average growth rate for that industry. Estimates of future cash flows are based on past
performance and expectations of market development, and are based on the estimated sales, cost of sales, and operating
expenses during the estimated period.
During the reporting period, the Group did not find that the recoverable amount of the relevant asset group including the
apportioned goodwill was lower than its book value, so it is considered that there is no need to accrue impairment loss for
goodwill.
20. Long-term Deferred Expenses
Unit: RMB
Difference of foreign Closing
Invested unit Opening Balance Increased Amortized
currency translation balance
Improvement expenditure for
108,584,686.85 49,373,074.47 57,732,233.15 (1,608,351.67) 98,617,176.50
leased fixed asset
Employee housing loan
- 68,159,986.92 8,769,988.52 - 59,389,998.40
deferred interest
Total 108,584,686.85 117,533,061.39 66,502,221.67 (1,608,351.67) 158,007,174.90
319
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
21. Deferred Tax Assets/Deferred Tax Liabilities
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
746,689,777.87 203,337,661.26 439,119,363.43 118,145,320.66
losses of assets
Provision for credit loss 2,019,377,828.80 414,456,930.82 1,539,163,635.55 317,826,951.61
Payroll payables 1,021,696,707.76 156,929,402.30 340,995,206.97 67,364,166.74
Share-based payment 546,398,398.17 92,168,164.61 395,569,612.03 63,817,274.43
Provisions 124,817,084.93 18,515,337.61 125,721,860.51 20,746,514.91
Expenditure without invoice 224,525,193.17 49,859,840.33 343,485,705.59 79,499,747.08
Unrealized profit from inter-
2,025,608,612.07 303,841,291.79 1,332,036,632.93 203,654,079.47
group transactions
Changes in the fair value of
derivative financial 3,795,920.86 948,980.22 4,862,446.50 1,215,611.63
instruments
Deferred income 400,764,044.74 61,186,781.23 175,339,879.57 28,307,816.27
Total 7,113,673,568.37 1,301,244,390.17 4,696,294,343.08 900,577,482.80
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 depreciation
926,803,951.40 170,262,256.00 792,868,727.84 155,188,912.37
of fixed assets
Difference in amortization
2,769,106.64 415,366.00 2,077,910.40 311,686.57
of intangible assets
Changes in the fair value
of derivative financial 29,037,242.51 7,259,310.63 18,487,400.00 4,621,850.00
instruments
Changes in fair value of
other non-current financial 38,300,223.10 5,745,033.47 87,026,019.27 13,053,902.89
assets
Total 996,910,523.65 183,681,966.10 900,460,057.51 173,176,351.83
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 90,366,814.93 1,210,877,575.24 80,196,527.94 820,380,954.86
Deferred tax liabilities 90,366,814.93 93,315,151.17 80,196,527.94 92,979,823.89
4) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary differences 687,848,166.51 788,077,425.69
Deductible loss 2,841,919,737.84 2,881,025,358.37
Total 3,529,767,904.35 3,669,102,784.06
320
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
5) Deductible losses for unrecognized deferred tax assets will expire in the following years
Unit: RMB
Year Closing balance Opening balance
2021 - 9,821,670.35
2022 9,759,663.51 53,969,583.10
2023 33,125,518.27 61,192,370.12
2024 34,945,616.34 91,527,082.27
2025 148,742,047.53 151,932,560.93
2026 and beyond 2,615,346,892.19 2,512,582,091.60
Total 2,841,919,737.84 2,881,025,358.37
22. Other Non-current Assets
Unit: RMB
Closing balance Opening balance (restated)
Item
Carrying amount Provision Book value Carrying amount Provision Book value
Contract assets 2,672,243,740.12 24,017,466.88 2,648,226,273.24 2,168,908,350.12 19,342,154.89 2,149,566,195.23
Prepayments for
acquisition of 278,398,706.94 - 278,398,706.94 79,046,571.00 - 79,046,571.00
land
Prepayments for
269,600,676.00 - 269,600,676.00 - - -
real estate
Prepayments for
140,577,165.61 - 140,577,165.61 26,838,623.06 - 26,838,623.06
equipment
Prepayments for
4,679,432.89 - 4,679,432.89 15,233,481.00 - 15,233,481.00
infrastructure
Others 9,044,156.95 - 9,044,156.95 - - -
Total 3,374,543,878.51 24,017,466.88 3,350,526,411.63 2,290,027,025.18 19,342,154.89 2,270,684,870.29
23. Short-term Borrowings
1) Categories of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Fiduciary loan 4,074,962,469.97 3,999,246,634.59
Total 4,074,962,469.97 3,999,246,634.59
2) As of December 31st 2021, the Group did not have any overdue short-term loans that were failed to repay.
24. Held-for-trading Financial Liabilities
Unit: RMB
Item Closing balance Opening balance
Financial liabilities measured at fair value through
4,062,317.57 7,405,771.15
current profits and losses
Including: derivative financial liabilities 4,062,317.57 7,405,771.15
total 4,062,317.57 7,405,771.15
As of December 31st 2021, the notional amount of the Group's outstanding forward foreign exchange contracts was
RMB 550,853,892.55 (December 31st 2020: RMB 498,858,533.76). The above forward foreign exchange contracts are
321
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
not designated as hedging instruments, and the gains or losses arising from changes in their fair values are directly
included in the current profit and loss.
25. Notes Payable
Unit: RMB
Item Closing balance Opening balance
Bank acceptance Bill 1,339,998,383.34 1,036,920,229.85
Total 1,339,998,383.34 1,036,920,229.85
As of December 31st 2021, the Group did not have any unpaid matured notes payable.
26. Accounts Payable
1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payments for goods 15,585,975,750.26 13,461,766,461.74
Payables on equipment 303,719,230.86 132,118,328.45
Total 15,889,694,981.12 13,593,884,790.19
2) As of December 31st 2021, the Group did not have any significant accounts payable with aging above one year.
27. Contract Liabilities
1) List of contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advanced receipts from sales of products 2,181,573,144.68 1,605,290,145.88
Advanced receipts for construction settlement payment 185,782,167.92 401,866,195.59
Advanced receipts from services 236,278,710.74 154,010,329.79
Subtotal 2,603,634,023.34 2,161,166,671.26
Less：Contract liabilities included in other non-current liabilities
22,739,796.75 -
(Note (V), 38)
Total 2,580,894,226.59 2,161,166,671.26
2) Qualitative and Quantitative Analysis on the Above Contract Liabilities:
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
322
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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.
3) As of January 1st 2021, the book value of contract liabilities amounted to RMB 2,161,166,671.26 has been
recognized as revenue in 2021, including contract liabilities of RMB 1,605,290,145.88 arising from advance
receipt of product sales payment, the contract liabilities of RMB 401,866,195.59 arising from advance receipt
of project settlement payment and contract liabilities of RMB 154,010,329.79 arising from the advance receipt
of cloud service payment. As at December 31st 2021, the contract liabilities of RMB 2,580,894,226.59 are
expected to be recognized as revenue in the coming year.
28. Payroll Payable
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 2,858,597,482.49 13,698,139,075.95 12,035,934,098.52 4,520,802,459.92
2. Termination benefits – defined
19,188,948.22 888,575,801.80 833,015,136.82 74,749,613.20
contribution scheme
Total 2,877,786,430.71 14,586,714,877.75 12,868,949,235.34 4,595,552,073.12
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
323
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
1.Wages or salaries,
bonuses, allowances and 2,671,062,392.28 12,247,906,540.03 10,620,585,395.08 4,298,383,537.23
subsidies
2.Staff welfare 14,300.82 238,692,657.07 238,695,313.35 11,644.54
3.Social insurance
11,227,541.93 515,588,996.17 486,468,951.39 40,347,586.71
contributions
Including:
10,852,343.07 494,018,231.61 466,368,463.01 38,502,111.67
Medical insurance
Injury insurance 330,255.63 15,101,602.15 14,065,793.64 1,366,064.14
Maternity insurance 44,943.23 6,469,162.41 6,034,694.74 479,410.90
4.Housing funds 146,194.01 557,598,474.59 557,744,668.60 -
5.Labor union and
176,147,053.45 138,352,408.09 132,439,770.10 182,059,691.44
education fund
Subtotal 2,858,597,482.49 13,698,139,075.95 12,035,934,098.52 4,520,802,459.92
3) Defined contribution plan
Unit: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
1.Basic pension insurance 18,665,404.09 859,688,761.68 805,812,222.99 72,541,942.78
2.Unemployment insurance 523,544.13 28,887,040.12 27,202,913.83 2,207,670.42
Subtotal 19,188,948.22 888,575,801.80 833,015,136.82 74,749,613.20
Note: The Group participates in pension insurance and unemployment insurance plans established by government agencies
in accordance with regulations. According to these plans, the Group pays monthly fees to these plans in proportion to the
payment base. The Group has no other material obligation for the payment of pension benefits beyond the contributions
described above, and corresponding expenses were booked into current profits and losses or corresponding assets.
In 2021, the Group shall pay RMB 859,688,761.68 and RMB 28,887,040.12 to the pension insurance plan and
unemployment insurance plan respectively (2020: RMB 448,873,230.48 and RMB 15,530,813.51). As of December 31st
2021, the Group had fees payables of RMB 72,541,942.78 and RMB 2,207,670.42 (December 31st 2020: RMB
18,665,404.09 and RMB 523,544.13), which were due but not paid during the reporting period for pension and
unemployment insurance plans. The relevant fees payables have been paid after the reporting period.
29. Taxes Payable
Unit: RMB
Item Closing balance Opening balance
Corporate income tax 927,703,038.55 1,403,744,369.98
Value-added tax 426,720,008.08 294,728,811.39
City construction and maintenance tax 21,622,541.71 17,924,699.09
Education surcharges 9,380,789.66 7,547,297.38
Local education surcharges 6,529,587.16 5,437,435.12
Others 69,514,064.53 40,675,295.66
Total 1,461,470,029.69 1,770,057,908.62
30. Other Payables
1) Categories
Unit: RMB
324
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Item Closing balance Opening balance
Dividend payable 247,382,205.37 205,898,523.84
Other payables 1,583,244,377.66 1,319,154,832.11
Total 1,830,626,583.03 1,525,053,355.95
2) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Dividends of incentive restricted shares 144,401,634.74 205,898,523.84
Dividends of common stock 102,980,570.63 -
Total 247,382,205.37 205,898,523.84
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
711,238,103.83 482,454,604.99
(V) 3)
Accrued expenses 144,958,993.62 337,678,697.37
Guarantee and deposit fees 341,371,587.01 298,869,865.03
Collection and payment on behalf 261,710,850.19 157,485,875.39
Other expense payable 123,964,843.01 42,665,789.33
Total 1,583,244,377.66 1,319,154,832.11
(2) As of December 31st 2021, the Group did not have any significant other payables aging over one year.
31. Non-current Liabilities Due within One Year
Unit：RMB
Item Closing balance Opening balance (restated)
Long-term borrowings due within one year (Note (V) 33) 347,587,089.91 3,486,243,087.91
Lease liabilities due within one year (Note (V), 34) 248,027,043.35 156,420,687.89
Long-term payables due within one year (Note (V) 35) 1,301,227.32 2,134,638.48
Total 596,915,360.58 3,644,798,414.28
32. Other Current Liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription payment of restricted shares 511,594,361.52 560,959,368.73
Output VAT to be transferred 405,885,561.09 184,752,210.84
Total 917,479,922.61 745,711,579.57
325
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
33. Long-term Borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan (Note 1) 1,455,221,540.20 1,556,927,316.08
Fiduciary loan (Note 2) 1,611,886,043.22 3,700,483,533.13
Guaranteed loan (Note 3) 387,851,149.01 -
Other borrowing (Note 4) 177,000,000.00 190,000,000.00
Less：Long-term loans due within one year (Note (V) 31) 347,587,089.91 3,486,243,087.91
Total 3,284,371,642.52 1,961,167,761.30
Note 1: As of December 31st 2021, RMB 245,504,285.70 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, among them, the annual
interest rate of RMB 227,937,142.84 of the loan is 4.41% and the annual interest rate of RMB 17,567,142.86 of the loan
is 4.31%.
RMB 176,800,000.00 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 138,200,000.00 of the loan is 4.445%, and the annual interest rate of RMB
38,600,000.00 of the loan is 4.345%.
RMB 215,780,000.00 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 164,800,000.00 of the loan is 4.445%, and the annual interest rate of RMB
50,980,000.00 of the loan is 4.345%.
RMB 221,600,000.00 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 134,400,000.00 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 498,000,000.00 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
295,000,000.00 of the loan is 4.445%, and the annual interest rate of RMB 203,000,000.00 of the loan is 4.345%.
Note 2: As of December 31st 2021, the fiduciary loan with a book value of RMB 1,082,955,000.00 was 150 million euros
in credit loans, which is mainly used for the Company to repay the investment and construction of the Hangzhou Innovation
Industrial Park project and Xi'an Science and Technology Park project, the maturity date is November 29th 2024, and the
interest rate is 0.80%.
The fiduciary loans with a book value of RMB 200,000,000.00, which is mainly used for the Company to repay the
investment and construction of the Hangzhou Innovation Industrial Park project and the Xi'an Science and Technology
Park project. The maturity date is December 2nd 2026, and the annual interest rate is 3.00%.
The fiduciary loans with a book value of RMB 328,000,000.00, which is mainly used for the acquisition of the thermal
imaging division asset group by Hangzhou Hikmicro Sensing, 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: At the end of the reporting period, the guaranteed loans with a book value of RMB 387,290,538.98 is the
guaranteed loan of USD 61,035,256.00, which was mainly used for the acquisition of 51% of the shares of Syscom MX
326
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
and Equipos Profesionales de Comunicacion. S.A. de C.V. (“Epcom MX”). The maturity date is August 30th 2024, and
the annual interest rate is 1.621%.
Note 4: 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. The Group paid RMB 13 million to redeem the 2% equity of Hangzhou
Electronics Company held by CDBDF during the reporting period. As of December 31st 2021, the balance of the loan is
177 million (December 31st 2020: RMB 190 million).
34. Lease Liabilities
Unit: RMB
Item Closing balance Opening balance(restated)
Lease liabilities 565,978,922.56 386,475,961.59
Less ：Lease liabilities due within one year (Note (V), 31) 248,027,043.35 156,420,687.89
Total 317,951,879.21 230,055,273.70
35. Long-term Payables
Unit: RMB
Item Closing balance Opening balance (restated)
Purchase goods in installments 10,310,558.82 10,677,104.56
Borrowing - 8,000,000.00
Less: Long-term payables due within one year (Note
1,301,227.32 2,134,638.48
(V), 31)
Total 9,009,331.50 16,542,466.08
36. Provisions
Unit: RMB
Item Closing balance Opening balance
Product quality warranty 200,675,950.96 151,443,871.02
Total 200,675,950.96 151,443,871.02
37. Deferred Income
Unit: RMB
Increase in current Decrease in current
Item Opening balance Closing balance Details
reporting period reporting period
Government Subsidies 190,878,987.69 652,192,764.28 104,485,293.92 738,586,458.05 Note
Total 190,878,987.69 652,192,764.28 104,485,293.92 738,586,458.05
327
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
As of December 31st 2021, the deferred income related to government subsidies:
Unit: RMB
Amounts booked into
Related to
Increase in current other income during Other
Liability Items Opening Balance Closing Balance assets/related to
reporting period the current reporting changes
incomes
period
Chongqing
Manufacturing 76,835,135.44 - 36,117,454.10 - 40,717,681.34 Related to assets
Base construction
Other special
93,995,937.25 483,985,764.28 38,851,173.16 - 539,130,528.37 Related to assets
subsidies
Other special
20,047,915.00 168,207,000.00 29,516,666.66 - 158,738,248.34 Related to incomes
subsidies
Subtotal 190,878,987.69 652,192,764.28 104,485,293.92 - 738,586,458.05
Note: Refer to government subsidies received by the Group for projects such as Chongqing Manufacturing Base
construction and other special projects; Actual expenses occurred in the current reporting period for 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.
38. Other Non-current Liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription for restricted stocks 511,594,361.52 560,959,368.74
Contract liabilities 22,739,796.75 -
Total 534,334,158.27 560,959,368.74
39. 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
2021
Total
9,343,417,190.00 - - -- (7,611,076.00) (7,611,076.00) 9,335,806,114.00
shares
2020
Total
9,345,010,696.00 - - - (1,593,506.00) (1,593,506.00) 9,343,417,190.00
shares
Note: On December 25th 2020, in accordance with the authorization of the Company’s 2018 second extraordinary general
meeting and the resolutions of the 20th meeting of the fourth Board of Directors and the revised articles of association, the
Company repurchased and cancelled the granted 7,611,076 restricted RMB treasury shares that have not been unlocked,
reducing the share capital by RMB 7,611,076 and the capital reserve by RMB 115,032,981.28. The Company had
completed the repurchase cancellation registration on July 2nd 2021.
On December 24th 2019, according to the authorization of the Company's second extraordinary general meeting of
shareholders in 2016, the resolution of the 14th meeting of the 4th session of the Board of Directors and the revised articles
of association, the Company repurchased and cancelled 1,593,506 restricted treasury shares that are granted but not yet
unlocked. The share capital was reduced by RMB 1,593,506.00, and the capital reserve was reduced by RMB
11,823,911.35. The Company went through the repurchase cancellation registration on December 17th 2020.
328
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
40. Capital Reserves
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance reporting period reporting period Closing balance
(Note 1) (Note 2)
2021
Share premium 4,747,808,907.38 175,364,843.03 122,433,910.47 4,800,739,839.94
Other capital
430,968,554.71 347,727,048.45 175,364,843.03 603,330,760.13
reserves
Total 5,178,777,462.09 523,091,891.48 297,798,753.50 5,404,070,600.07
2020
Share premium 3,834,418,853.06 985,668,869.46 72,278,815.14 4,747,808,907.38
Other capital
292,524,845.90 782,471,622.99 644,027,914.18 430,968,554.71
reserves
Total 4,126,943,698.96 1,768,140,492.45 716,306,729.32 5,178,777,462.09
Note 1: The increase of RMB 175,364,843.03 in the share premium in the current fiscal year was due to the exercise of
equity-settled share-based payments, and other capital reserves were transferred to the share premium.
The increase of RMB 347,727,048.45 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 increase of RMB 644,027,914.18 in share premium during the prior year was due to the exercise of equity-settled
share-based payments, and other capital reserves were transferred to share premium; The increase of 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 Sensing by the Company, and transferring the asset groups of the intelligent fire protection and control business
department, 100% equity interests in Wuhan Hiksafety Technology Co., Ltd. and Zhejiang Hiksafety Technology Co., Ltd.
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%.
The increase of RMB 782,471,622.99 in other capital reserves during the prior year was due to equity-settled share-based
payments which were included in the capital reserve.
Note 2: The decrease of RMB 115,032,981.28 in share premium during the current reporting period was due to the
Company’s repurchase of 7,611,076 granted but unlocked RMB treasury shares by cash, please refer to Note (V) 39; The
decrease of RMB 7,400,929.19 in share premium during the current reporting period was due to share distributions by
equity settlements to minority shareholders.
Among the decrease in share premium during the prior year, a decrease of RMB 11,823,911.35 was due to the Company’s
repurchase of 1,593,506 granted but unlocked RMB treasury shares by cash ; a decrease of RMB 29,967,599.60 was due
to share distributions by equity settlements to minority shareholders; a decrease of RMB 30,487,304.19 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
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Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
41. Treasury Shares
Unit: RMB
Increase in the current Decrease in the current
Item Opening Balance Closing balance
reporting period reporting period (Note 1)
2021
Restricted shares
1,121,918,737.47 - 98,730,014.43 1,023,188,723.04
incentive scheme
Total 1,121,918,737.47 - 98,730,014.43 1,023,188,723.04
2020
Restricted shares
2,148,273,864.36 - 1,026,355,126.89 1,121,918,737.47
incentive scheme
Total 2,148,273,864.36 - 1,026,355,126.89 1,121,918,737.47
Note 1: During the current reporting period, the decreased amount of RMB 98,730,014.43 in treasury shares was due to
the provision of cash dividend allocated to restricted shares and the repurchase and cancellation of 7,611,076 restricted
shares of 2016 and 2018 Restricted Share Incentive Scheme.
During the prior year, the decreased amount of RMB 1,026,355,126.89 in treasury shares was due to the provision of cash
dividend allocated to restricted shares, the repurchase and cancellation of 1,593,506 restricted shares of the Company’s
2016 Restricted Share Incentive Scheme, the unlocking of 21,204,645 shares for the expiry of the 3rd unlocking period of
the Company’s 2016 Restricted Share Incentive Scheme, the unlocking of 45,591,794 shares for the expiry of the 1st
unlocking period of the Company’s 2018 Restricted Share Incentive Scheme.
.
330
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
42. Other Comprehensive Income
Unit: RMB
Amounts occurred in the current reporting period
Less:
The before- transfer to
income-tax current
amount Less: Attributable to Attributable to
Opening period P/L
Item incurred income the parent minority Closing balance
balance from
during the tax company (after shareholders
current previous expense (after tax)
tax)
reporting other
period comprehens
ive income
2021
Other incomes
that may be
reclassified (84,993,926.94) 4,631,122.68 - - 7,809,801.65 (3,178,678.97) (77,184,125.29)
subsequently to
profit or loss
Included: Effect
on conversion of
financial
statements (84,993,926.94) 4,631,122.68 - - 7,809,801.65 (3,178,678.97) (77,184,125.29)
denominated in
foreign
currencies
Other
comprehensive (84,993,926.94) 4,631,122.68 - - 7,809,801.65 (3,178,678.97) (77,184,125.29)
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
43. Surplus Reserves
Unit: RMB
Increase in the Decrease in the
current current
Item Opening balance Closing balance
reporting reporting
period period
2021 and 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
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 withdrew. The
331
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Company has withdrawn 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.
44. Retained Earnings
Unit: RMB
Item 2021 2020
Retained Earnings at the close of the prior reporting period 35,806,523,826.37 28,961,389,145.22
Add: Net profit attributable to the parent company for the
16,800,411,032.05 13,385,526,714.15
current reporting period
Less: Dividends payable on common shares (Note) 7,458,057,406.90 6,540,392,033.00
Retained earnings at the end of the current reporting
45,148,877,451.52 35,806,523,826.37
period
Note：According to the resolution of 2020 Annual General Meeting dated on May 14th 2021, 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 8 (tax inclusive), the rest of retained earnings were all carried forward for future distributions.
45. Operating Income/Operating Cost
45.1 Operating income and operating cost
Unit: RMB
2021 2020
Item
Revenue Cost Revenue Cost
Operating income 80,803,165,490.40 44,894,713,863.87 62,879,112,889.36 33,607,174,664.31
Other operating income 616,888,048.87 434,686,468.78 624,338,002.42 350,523,193.42
Total 81,420,053,539.27 45,329,400,332.65 63,503,450,891.78 33,957,697,857.73
45.2 Operating business (by business type)
Unit: RMB
2021
Item
Revenue Cost
Product sales 75,532,012,528.94 41,361,920,302.85
Construction contract 4,003,746,727.88 3,084,364,818.86
Provide services 1,267,406,233.58 448,428,742.16
Total 80,803,165,490.40 44,894,713,863.87
45.3 Operating business (by the time of revenue recognition)
Unit: RMB
2021
Item
Revenue Cost
Satisfied at a point in time 75,532,012,528.94 41,361,920,302.85
Satisfied over time 5,271,152,961.46 3,532,793,561.02
Total 80,803,165,490.40 44,894,713,863.87
332
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
45.4 Operating business (By product or business type)
Unit: RMB
2021
Item
Revenue Cost
Products and services for main business 64,528,795,025.87 34,509,451,081.26
Constructions 4,003,746,727.88 3,084,364,818.86
Innovative businesses 12,270,623,736.65 7,300,897,963.75
Total 80,803,165,490.40 44,894,713,863.87
Note: The main business is other parts other than innovative businesses.
Descriptions of Performance obligations:
The Group sells video surveillance and other main business products, smart home products, robotic products, thermal
imaging products, auto electronics products, storage products and other innovative businesses ‘products and related
services. 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
333
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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.
According to the project contract, the Group provides both project asset construction services and post-construction
operation services and maintenance services. The Group identifies construction services, operation services and
maintenance services as individual performance obligations, and allocates the transaction price to each performance
obligation based on the relative proportion of the stand-alone selling price of each performance obligation.
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, 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 (III) 24 and Note (V) 36 for details.
Descriptions of allocation to the remaining performance obligations:
As of December 31st 2021, 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.
334
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
46. Business Taxes and Surcharges
Unit: RMB
Items 2021 2020
City construction and maintenance tax 271,005,144.60 189,386,771.55
Education surcharges 118,219,501.03 82,442,008.19
Local education surcharges 78,812,578.90 54,915,581.40
Stamp duty 48,719,842.95 30,560,972.35
Real estate tax 38,218,345.28 20,330,766.80
Tax on use of land 5,747,583.10 3,992,258.37
Vehicle and vessel tax 156,562.97 151,291.55
Others 100,448.69 34,483,699.34
Total 560,980,007.52 416,263,349.55
47. Selling Expenses
Unit: RMB
Items 2021 2020
Payroll 5,548,436,481.61 4,322,277,210.83
Marketing Expenses 1,351,499,107.82 1,156,331,130.68
Shipping, transportation, and vehicle expense 300,539,153.45 711,448,510.07
Travelling expenses 272,916,031.74 216,729,012.52
Office expenses 206,708,742.81 201,748,056.17
Business hospitality expenses 251,571,190.72 183,005,835.09
Rental expenses 66,296,932.66 193,697,802.86
Professional Intermediary expenses 192,080,083.00 158,620,553.03
Depreciation and amortization expenses 208,955,480.02 89,216,922.78
Others 187,440,464.19 144,715,710.55
Total 8,586,443,668.02 7,377,790,744.58
48. Administrative Expenses
Unit: RMB
Items 2021 2020
Payroll 1,320,787,327.54 1,155,570,756.22
Office expenses 228,196,179.10 180,626,249.71
Depreciation and amortization expenses 194,491,716.47 164,558,720.85
Professional Intermediary expenses 95,361,861.47 74,792,204.76
Travelling expenses 39,132,306.65 37,760,312.22
Shipping, transportation, utility expense 48,723,035.15 41,419,386.33
Rental expenses 10,375,238.03 6,827,268.39
Business hospitality expenses 11,296,053.97 9,193,300.21
Others 183,886,745.58 119,264,890.07
Total 2,132,250,463.96 1,790,013,088.76
49. R&D Expenses
Unit: RMB
Items 2021 2020
Payroll 6,809,382,000.63 5,154,824,934.62
Consumables and service fees 556,631,898.14 533,761,090.55
Depreciation and amortization expenses 299,364,107.17 218,167,957.47
Office expenses 167,582,498.45 190,693,619.45
Intermediate testing fees 144,910,134.48 145,698,114.33
335
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Travelling expenses 108,265,517.40 68,264,094.55
New product design fees 106,964,625.53 20,416,472.49
Rental expenses 5,329,594.73 10,791,884.40
Others 53,214,724.86 36,033,594.56
Total 8,251,645,101.39 6,378,651,762.42
50. Financial Expenses
Unit: RMB
Items 2021 2020
Interest expenses 231,787,858.92 223,386,660.79
Interest expense on lease liabilities 17,607,723.12 -
Less：Interest income 885,545,988.62 722,845,909.92
Foreign exchange losses 354,146,744.37 927,956,362.97
Less﹕Capitalized specific loan interests and foreign
(124,649,345.63) 58,884,747.25
exchange differences on specific loan
Others 24,011,058.74 26,642,405.97
Total (133,343,257.84) 396,254,772.56
51. Other Income
Unit: RMB
Items 2021 2020
VAT Rebates 2,054,594,872.37 1,739,193,206.86
Special subsidies 558,717,940.38 530,334,411.76
Tax reduction 14,829,396.58 32,596,557.71
Value-added tax deduction 418,611.13 1,457,529.48
Total 2,628,560,820.46 2,303,581,705.81
52. Investment Income
Unit: RMB
Items 2021 2020
Long-term equity investment gains based on equity method 114,137,281.18 6,361,388.74
Investment income from other non-current financial assets during
115,644,801.97 150,000,000.00
the holding period
Investment income from disposal of held-for-trading financial assets 113,608,106.10 12,915,660.21
Investment losses from disposal of subsidiaries and other business
(169,184,641.43) -
units
Total 174,205,547.82 169,277,048.95
53. Gains(Losses) from Changes in Fair Values
Unit: RMB
Sources of gains (losses) from changes in fair values 2021 2020
Held-for-trading financial assets 11,711,591.07 22,814,664.19
Including: gains on the changes in fair value of derivative financial
instruments
11,711,591.07 22,814,664.19
Gains(Losses) from changes in fair value of other non-current financial assets (53,214,895.05) 69,478,784.83
336
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Held-for-trading financial liabilities 3,303,279.51 (6,835,239.48)
Including: gains (losses) on the changes in fair value of derivative
financial instruments
3,303,279.51 (6,835,239.48)
Total (38,200,024.47) 85,458,209.54
54. Credit Impairment Loss
Unit: RMB
Items 2021 2020
Credit impairment losses of accounts receivable (566,389,266.23) (106,051,544.54)
Credit impairment reverses (losses) of other receivables 25,231,443.14 (27,043,173.31)
Credit impairment losses of long-term receivables (28,600,342.41) (52,845,607.89)
Total (569,758,165.50) (185,940,325.74)
55. Impairment Losses of Assets
Unit: RMB
Items 2021 2020
Losses on inventory devaluation (434,614,231.94) (361,227,476.20)
Contract assets impairment loss (13,075,174.66) (1,882,037.79)
Total (447,689,406.60) (363,109,513.99)
56. Non-operating Income
Unit: RMB
The amount booked into current
Items 2021 2020 period non-recurring profits and
looses
Fines and confiscations 59,586,645.03 66,127,109.32 59,586,645.03
Government subsidies 2,653,472.98 8,472,687.83 2,653,472.98
Income from business combination of
enterprises not under the same control 1,163,932.96 281,193.50 1,163,932.96
(Note)
Others 12,340,318.32 24,392,312.85 12,340,318.32
Total 75,744,369.29 99,273,303.50 75,744,369.29
Government subsidies included in current profit and loss:
Unit: RMB
Item 2021 2020 Related to assets/Related to incomes
Tax reduction 341,525.58 138,798.93 Related to incomes
Other subsidies 2,311,947.40 8,333,888.90 Related to incomes
Total 2,653,472.98 8,472,687.83
Note: On September 23rd 2021, the Group acquired Epcom MX. The fair value of the identifiable net assets
obtained in the acquisition less than the combination cost is included in the current profit and loss, which is
equivalent to RMB 1,163,932.96. See Note (VI) 1 for details.
337
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
57. Non-operating Expenses
Unit: RMB
The amount booked into current period
Items 2021 2020
non-recurring profits and looses
Losses on disposal of non-current
8,156,134.63 6,465,180.38 8,156,134.63
assets
Local water conservancy construction
1,347,569.92 1,672,431.96 1,347,569.92
fund
Donation expenses 51,489,848.19 1,887,772.40 51,489,848.19
Others 20,560,553.01 12,951,586.67 20,560,553.01
Total 81,554,105.75 22,976,971.41 81,554,105.75
58. Income Tax Expenses
58.1 Details of Income tax expenses
Unit: RMB
Items 2021 2020
Income tax for the current reporting period 1,912,421,635.04 2,140,449,306.26
Deferred income tax expenses (385,068,762.95) (89,684,430.19)
Differences in filing and payment of income tax in previous
(569,862,219.93) (456,113,070.38)
reporting years
Total 957,490,652.16 1,594,651,805.69
58.2 Reconciliation of income tax expenses to the accounting profit
Unit: RMB
Item 2021 2020
Total profit 18,468,211,862.63 15,272,971,277.86
Income tax expenses calculated at applicable tax rates of 15% 2,770,231,779.39 2,290,945,691.68
Impact of non-deductible costs, expenses and losses 13,462,549.85 30,860,096.48
Tax effect of non-taxable income (20,994,120.30) (3,054,060.62)
Impact of deductible temporary differences or deductible losses
for which no deferred income tax assets is recognized for the 126,889,022.94 160,270,373.80
current period
Impact of using deductible temporary differences or deductible
losses for which no deferred income tax assets was recognized for (124,304,097.81) (27,124,409.54)
the prior periods
Differences of income tax annual filing (Note) (569,862,219.93) (456,113,070.38)
Impact by different tax rates applicable to different subsidiaries 117,262,283.11 65,427,121.90
Impact of additional deduction of R&D expenses (853,993,809.22) (498,716,838.03)
Others (501,200,735.87) 32,156,900.40
Income tax expenses 957,490,652.16 1,594,651,805.69
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 May 2021 to apply enterprise income tax of 10% for 2020,
therefore, the enterprise’s 2020 income tax expenses was reduced by RMB 569, 111,492.62 (2020: RMB 456,113,070.38).
338
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
59. Notes to Consolidated Cash Flow Statement Items
59.1 Other cash receipts relating to operating activities
Unit: RMB
Items 2021 2020
Interest income 747,643,940.57 639,105,287.46
Government subsidies 1,108,737,358.14 503,207,004.05
Withdrawal of restricted currency funds 870,118,675.99 183,586,082.31
Others 71,926,963.35 101,691,979.83
Total 2,798,426,938.05 1,427,590,353.65
59.2 Other cash payments relating to operating activities
Unit: RMB
Item 2021 2020
Advertising and Selling services 1,209,668,231.40 1,106,345,645.08
Office expenses and business expenses 1,244,593,584.01 997,386,647.41
Shipping and transportation expense 380,408,948.15 778,093,845.68
R&D expense 702,435,895.72 561,674,056.35
Travelling expense 420,313,855.79 322,753,419.29
Outsourcing service fees, fees for hiring intermediaries, etc. 406,476,311.46 301,671,589.85
Rental expense 82,001,765.42 211,316,955.65
Deposits to restricted monetary funds 553,153,948.19 62,196,400.89
Others 298,285,736.64 34,657,044.75
Total 5,297,338,276.78 4,376,095,604.95
59.3 Other cash receipts relating to investing activities
Unit: RMB
Item 2021 2020
Receipts of financing lease payments - 46,196,873.80
Total - 46,196,873.80
59.4 Other cash payments related to investing activities
Unit: RMB
Item 2021 2020
Cash payments for investment intention funds 4,000,000.00 1,000,000.00
Net cash payment for disposal of subsidiaries and other
6,196,658.79 -
business units
Total 10,196,658.79 1,000,000.00
59.5 Other cash payments relating to financing activities
Unit: RMB
Item 2021 2020
The consideration paid for the acquisition of minority
- 64,290,000.00
shareholders' equity
Repurchase of restricted shares 122,644,057.28 13,417,417.35
Repayment of lease liabilities 190,296,810.23 -
Total 312,940,867.51 77,707,417.35
339
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
60. Supplementary Information about Cash Flow Statement
60.1 Supplementary information about cash flow statement
Unit: RMB
Supplementary information 2021 2020
1. Reconciliation of net profit to cash flows from
operating activities:
Net profit 17,510,721,210.47 13,678,319,472.17
Add: Impairment of assets 447,689,406.60 363,109,513.99
Provision for credit losses 569,758,165.50 185,940,325.74
Fixed assets depreciation 685,029,204.28 713,633,074.93
Amortization of intangible assets 140,708,108.57 87,014,571.01
Long-term deferred expenses amortization 66,502,221.67 44,742,828.97
Right-of-use assets depreciation 198,362,376.40 -
Gains on disposal of fixed assets, intangible
(34,225,603.81) (628,505.02)
assets and other long-term assets
Fixed asset scrapping losses 8,156,134.63 6,465,180.38
Losses (gains) from changes in fair value 38,200,024.47 (85,458,209.54)
Financial expenses 302,351,912.74 598,966,581.29
Investment income (174,205,547.82) (169,277,048.95)
Share-based payment based on equity
369,329,250.11 818,106,623.19
settlement
Decrease of restricted funds 316,964,727.80 121,389,681.42
Increase in deferred income tax assets (390,473,424.46) (131,576,150.12)
Increase in deferred income tax liabilities 335,327.28 41,891,719.93
Increase in inventories (5,936,053,632.80) (496,228,965.62)
Decrease (increase) of operating other non-
(497,739,824.36) 151,065,258.42
current assets
Increase in operating receivables (5,478,863,810.65) (2,794,429,636.26)
Increase in operating payables 4,019,434,922.97 3,098,102,287.85
Increase (decrease) in deferred income 547,707,470.36 (142,710,843.61)
Others (1,163,932.96) (281,193.50)
Net cash flows from operating activities 12,708,524,686.99 16,088,156,566.67
2. Significant investing and financing activities not
involving cash receipts and payments:
3. Net changes in cash and cash equivalents:
Closing balance of cash 34,603,944,429.20 35,024,837,878.31
Less: Opening balance of cash 35,024,837,878.31 26,515,668,008.40
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net Increase (decrease) in cash and cash
(420,893,449.11) 8,509,169,869.91
equivalents
340
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
60.2 Net cash paid for obtaining subsidiaries and other business units during the current year
Unit: RMB
Amounts
Cash or cash equivalents paid for the business combination in this year 395,838,055.75
Including: Daishan Hailai -
Syscom MX 378,698,267.92
Epcom MX 17,139,787.83
Less: Cash and cash equivalents held by the Company on the acquisition date 72,233,525.01
Including: Daishan Hailai 44,354,803.41
Syscom MX 26,037,489.00
Epcom MX 1,841,232.60
Net cash paid for obtaining the subsidiary 323,604,530.74
60.3 Constituents of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Cash 34,603,944,429.20 35,024,837,878.31
Including: Cash on hand 1,851,273.53 1,105,047.51
Bank deposit for payment at any time 34,573,786,777.26 34,968,013,389.43
Other monetary capital for payment at any time 28,306,378.41 55,719,441.37
Cash equivalents - -
Closing balance of cash and cash equivalents 34,603,944,429.20 35,024,837,878.31
Among the total balance of RMB 146,232,880.57 of the other monetary fund(s) at the end of the reporting period
(December 31st 2020: RMB 490,610,671.33), RMB 117,926,502.16 are various guarantee deposits and other restricted
funds, etc. (December 31st 2020: RMB 434,891,229.96), not cash and cash equivalents.
61. Assets with Restriction in Ownership or Use Rights
Unit: RMB
Book value at the end of the current
Item Cause of restriction
reporting period
Cash and bank balances 117,926,502.16 Various guarantee deposits and other restricted funds
Notes receivable 711,238,103.83 Endorsed to suppliers
Receivables for financing 4,337,929.69 Pledged for issuing bank acceptance bills
Accounts receivable 197,358,387.51 Pledged for long-term borrowings
Contract assets 104,842,914.69 Pledged for long-term borrowings
Intangible assets 62,497,900.00 Pledged for long-term borrowings
Other non-current assets 1,667,721,944.32 Pledged for long-term borrowings
Right-of-use assets 23,923,145.37 Fixed assets leased through financial lease
Total 2,889,846,827.57
341
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
62. Monetary Items of Foreign Currencies
62.1 Foreign currencies
Unit: RMB
Balance in foreign currency at Exchange rate for Balance of RMB converted at
Items
the end of the reporting period conversion the end of the reporting period
Cash and bank balances
Including: USD 266,706,479.65 6.3757 1,700,440,502.30
EUR 85,252,747.73 7.2197 615,499,262.76
GBP 9,516,440.69 8.6064 81,902,295.18
RUB 317,813,616.47 0.0855 27,163,529.80
HKD 31,242,355.45 0.8176 25,543,749.82
JPY 345,648,715.88 0.0554 19,148,938.86
PLN 11,277,337.50 1.5717 17,724,929.67
KRW 2,491,866,911.68 0.0054 13,356,905.02
AED 4,973,251.64 1.7361 8,634,062.17
AUD 709,775.17 4.6220 3,280,580.85
SGD 1,628,647.85 4.7179 7,683,797.69
NZD 421,332.56 4.3553 1,835,029.69
ZAR 8,460.22 0.4004 3,387.05
TRY 359.24 0.4822 173.24
INR 1,699.58 0.0857 145.62
Accounts receivable
Including: EUR 262,479,326.37 7.2197 1,895,021,992.59
USD 95,689,448.83 6.3757 610,087,218.91
HKD 42,720,682.35 0.8176 34,928,429.89
Short-term borrowings
Including: EUR 58,208,782.93 7.2197 420,249,950.14
USD 14,347,704.66 6.3757 91,476,660.61
Accounts payable
Including: USD 237,414,662.32 6.3757 1,513,684,662.55
HKD 1,460,345,721.20 0.8176 1,193,978,661.65
EUR 2,531,035.74 7.2197 18,273,318.73
Long-term borrowings
Including: EUR 146,000,000.00 7.2197 1,054,076,200.00
USD 60,744,787.08 6.3757 387,290,538.98
Non-current liabilities due within
one year - Long-term borrowings
Including: EUR 4,036,666.67 7.2197 29,143,522.36
USD 87,929.17 6.3757 560,610.03
62.2 Details of Overseas Operational Entities
342
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 B.V. 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
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 UAE 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
Hikvision Turkey Technology And Security
Turkey TRY Selection based on local economic environment
Systems Commerce Corporation
Syscom MX Mexico MXN Selection based on local economic environment
Epcom MX Mexico MXN Selection based on local economic environment
Hikvision Chile SpA Chile CLP 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. Thailand THB Selection based on local economic environment
343
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Main overseas
Recording
Name of overseas subsidiaries operational Basis of selection
Currency
office
Hikvision West Africa Limited Nigeria NGN Selection based on local economic environment
EZVIZ International Limited Hongkong 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
SIA "BK Latvia" Latvia EUR Selection based on local economic environment
63. Government Subsidies
63.1 Categories
Unit: RMB
Amount booked in current profit
Category Amount Financial Report Items
and loss
VAT Rebates 2,054,594,872.37 Other Income 2,054,594,872.37
Special subsidies 1,299,616,345.83
Deferred income / Other
Including: other special subsidies 1,222,781,210.39 income/ Non-operating 524,912,433.68
income
Chongqing Deferred income / Other
Manufacturing Base 76,835,135.44 36,117,454.10
income
construction subsidies
Other income/ Non-operating
Tax Refund/Reduction 15,589,533.29 15,589,533.29
income
Total 3,369,800,751.49 2,631,214,293.44
63.2 There was no refund of government subsidies during the current reporting period.
344
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
VI. Changes in Consolidation Scope
1. Business Combination of Enterprises Not under the Same Control
1.1 Business combination of enterprises not under the same control
Daishan Hailai
In June 2021, the Company's joint venture -Daishan Hailai’s original shareholders Zhoushan Islands New District Penglai State-owned Assets Investment Group Co., Ltd. (hereinafter
referred to as "Penglai SAI") and an independent third-party company, Daishan Haina Shuzhi Co., Ltd. (hereinafter referred to as “Haina Shuzhi”) signed an equity transfer agreement,
and Penglai SAI transferred its 33.4% stake in Daishan Hailai to Haina Shuzhi. After the completion of the equity transfer, the Company holds 66.6% equity of Daishan Hailai, and Haina
Shuzhi holds 33.4% equity of Daishan Hailai. On June 30th 2021, the Company and Haina Shuzhi formed a common unanimous resolution to approve the Articles of Association of
Daishan Hailai. Major matters involving the decision of the Company's development strategy and long-term planning must be approved by shareholders representing more than 2/3 of the
voting rights, changed to shareholders representing more than 1/2 of the voting rights. Daishan Hailai has a total of 5 board members, 3 from Hikvision and 2 from Haina Shuzhi. Matters
involving major financial and operating decisions must be approved by more than 2/3 of the Board of Directors,changed to be approved by more than 1/2 of the Board of Directors.
Therefore, the Group can control the financial and operating decisions of Daishan Hailai, and has substantial control over it, so Daishan Hailai is included in the scope of the consolidated
financial statements.
Syscom MX and Epcom MX (hereinafter collectively referred to as the "Subject Companies")
Hikvision Singapore Pte. Ltd., a wholly-owned subsidiary of the Company, and the original shareholders of the Subject Companies jointly signed the STOCK PURCHASE AGREEMENT
on January 30th 2021, and signed three supplementary agreements between June and September 2021 (the above agreement and the supplementary agreements are collectively referred to
as the "Acquisition Agreements"), agreeing to acquire 51% of the equity in the Subject Companies held by two independent third parties at USD 61,035,256; from November 2020 to
May 2021, the above acquisition arrangements were field or approved by the Board of Directors of CETHIK Group Co., Ltd. (hereinafter referred to as “CETHIK”), the Ministry of
Commerce of the People's Republic of China, the National Development and Reform Commission of the People’s Republic of China and the State Administration of Foreign Exchange
of the People’s Republic of China (Branch of Zhejiang Province). The equity delivery of Syscom MX and Epcom MX have been completed on September 23rd 2021. Therefore, the Group
took September 23rd 2021 as the acquisition date, and the Group incorporated the Subject Companies into consolidation scope from the acquisition date. As of December 31st 2021, the
Company has completed the equity transfer payment of USD 61,035,256, which is equivalent to approximately RMB 395,838,055.75 exchanged at spot foreign exchange rate. As of the
announcement date of the financial statements, the closing audit of the financial statements of the Subject Company on the acquisition date is in progress.
345
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
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
Date for obtaining
Change in voting
Daishan Hailai June 2021 14,899,444.96 66.60% June 30th 2021 actual control of the 45,774,840.61 6,480,312.77
rights
purchased party
Equity delivery date
Syscom MX September 2021 378,698,267.92 51.00% Cash Payments September 23rd 2021 for obtaining control 774,040,976.53 82,010,831.97
of the purchased party
Equity delivery date
Epcom MX September 2021 17,139,787.83 51.00% Cash Payments September 23rd 2021 for obtaining control 18,125,454.54 2,057,929.50
of the purchased party
1.2 Cost of business combination and goodwill
Cost of business combination Daishan Hailai Syscom MX Epcom MX
-Cash - 378,698,267.92 17,139,787.83
- The acquisition-date fair value of the acquirer’s previously held equity
14,899,444.96 - -
interest
Total cost of business combination 14,899,444.96 378,698,267.92 17,139,787.83
Less: The fair value share of identifiable net assets obtained 14,899,444.96 304,312,721.16 18,303,720.79
Goodwill/The amount that the combination cost is less than the amount of
- 74,385,546.76 (1,163,932.96)
the fair value share of the identifiable net assets acquired
1.3 Acquiree’s book value of assets and liabilities at the date of acquisition
Daishan Hailai Syscom MX Epcom MX
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
Assets:
Cash and bank balances 44,354,803.41 44,354,803.41 26,037,489.00 26,037,489.00 1,841,232.60 1,841,232.60
Accounts receivable 5,950,728.47 5,950,728.47 49,173,526.80 49,173,526.80 5,369,076.00 5,369,076.00
346
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Daishan Hailai Syscom MX Epcom MX
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
Prepayments 71,115.98 71,115.98 114,085,276.20 114,085,276.20 130,906.80 130,906.80
Other current assets 1,300,073.30 1,300,073.30 66,759,306.00 66,759,306.00 5,302,041.60 5,302,041.60
Inventories 2,339,888.20 2,339,888.20 928,380,591.00 928,380,591.00 7,321,927.20 7,321,927.20
Fixed assets 203,135.29 203,135.29 69,780,913.20 69,780,913.20 40,650,039.60 40,650,039.60
Right–of-use assets 18,417.19 18,417.19 21,205,636.80 21,205,636.80 - -
Other assets 25,438,535.65 25,438,535.65 29,698,768.80 29,698,768.80 2,431,894.20 2,431,894.20
Liabilities:
Notes payable - - 237,410,548.80 237,410,548.80 22,158,347.40 22,158,347.40
Accounts payable 55,313,400.79 55,313,400.79 182,758,540.80 182,758,540.80 80,314.80 80,314.80
Tax payable (31,062.40) (31,062.40) 11,272,213.80 11,272,213.80 2,962,161.60 2,962,161.60
Payroll payable 316,509.08 316,509.08 29,792,680.20 29,792,680.20 - -
Dividend payable - - 168,383,380.27 168,383,380.27 - -
Other payables 43.88 43.88 46,989,849.60 46,989,849.60 959,350.80 959,350.80
Lease liabilities 5,929.50 5,929.50 24,015,073.80 24,015,073.80 - -
Other liabilities 1,700,337.66 1,700,337.66 7,807,610.41 7,807,610.41 997,294.80 997,294.80
Net assets acquired 22,371,538.98 22,371,538.98 596,691,610.12 596,691,610.12 35,889,648.60 35,889,648.60
1.4 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.
1.5 The Group has no contingent liabilities of the purchased party that need to be assumed in this merger.
2. Disposal of a Subsidiary
2.1 Loss of control of a subsidiary due to a single disposal of investment in the subsidiary
In March 2021, The Group, CETHIK and EZVIZ Technology signed the Entrusted Management Agreement Termination Agreement, agreed that the Entrusted Management Agreement
will be terminated on March 27th 2021. After the termination of the Entrusted Management Agreement, the Group no longer controls the business of EZVIZ Technology, no longer
responsible for the production, operation and management of EZVIZ Technology, and no longer enjoy other rights to EZVIZ Technology as stipulated in the Entrusted Management
Agreement", so the business of EZVIZ Technology is no longer be included in the consolidation scope of the consolidated financial statements.
347
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Unit: RMB
Amount
Name of the subsidiary EZVIZ Technology
Consideration of equity disposal 8,000,000.00
Ratio of equity disposal 100%
Method of equity disposal Clear debt
Date of loss of control March 27th 2021
Determination basis for the date of loss of control Effective date of the Entrusted Management Agreement Termination Agreement
Disposal of net assets 8,945,308.50
The difference between the disposal consideration and the share that corresponding to the disposal of the
(945,308.50)
subsidiary's net assets at the consolidated financial statement level
3. 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
Company Name Time of establishment Registered capital Amount of contribution of the Group
contribution (%)
Shanghe Smart City Technology Co., Ltd. ("Shanghe Smart
April 2021 RMB 44.0571 million RMB 41.8542 million 95.00
City") (Note 1)
Chongqing EZVIZ Electronics Co., Ltd. ("Chongqing
June 2021 RMB 100 million RMB 60 million 60.00
EZVIZ) (Note 2)
Hangzhou Hikrobot Automation Co., Ltd. ("Robotic
December 2021 RMB 300 million RMB 180 million 60.00
Automation") (Note 3)
Hikvision Chile SpA (Note 3) December 2021 USD 300 thousand USD 300 thousand 100.00
Hangzhou Haina Yuzhi Entrepreneurship Investment
December 2021 RMB 600 million RMB 400 million 66.67
Partnership Co., Ltd. ("Haina Yuzhi Fund") (Note 4)
Note 1: At the end of the current reporting period, Shanghe Smart City’s paid-in capital was RMB 44,057,100.00, of which RMB 41,854,200.00 was paid up by the Group and RMB
2,202,900.00 was contributed by the minority shareholder, Shanghe Urban-Rural Integration Construction Co., Ltd.
Note 2: At the end of the current reporting period, the paid in capital of Chongqing EZVIZ was RMB 100,000,000.00, which was fully contributed by Hangzhou EZVIZ Network Co.,
348
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Ltd., a subsidiary of the Group.
Note 3: At the end of the current reporting period, Robotic Automation and Hikvision Chile SpA have not yet completed the paid-in capital, so there is no paid-in capital.
Note 4: After the Proposal on Investing in the Establishment of Entrepreneurship Investment Partnerships and Related Party Transactions considered and approved at the 6th meeting of
the 5th session of the Board of Directors held on October 22nd 2021, the Group, CETHIK, Hangzhou Hi-tech Entrepreneurship Investment Management Co., Ltd. and CETHIK (Hangzhou)
Equity Investment Management Co., Ltd. jointly invested and established Haina Yuzhi Fund Company. Haina Yuzhi Fund Company is in the form of a limited partnership. It completed
the industrial and commercial registration procedures on December 8th 2021, and obtained the Business License issued by the Hangzhou High-tech Industrial Development Zone (Binjiang)
Market Supervision Administration. As of December 31st 2021, Haina Yuzhi Fund Company has completed the fundraising, with a total of RMB 600 million, of which CETHIK (Hangzhou)
Equity Investment Management Co., Ltd. acts as the fund manager and general partner. contributed RMB 1 million and held 0.1667% of the shares; the Group, Hangzhou Hi-Tech Venture
Capital Management Co., Ltd. and CETHIK, as limited partners, contributed RMB 400 million, RMB 120 million and RMB 79 million in currency, holding 66.6666%, 20.0000% and
13.1667% of the shares respectively. According to the partnership agreement of Haina Yuzhi Fund, the resolution of the partners meeting shall be approved by the partners who hold more
than 2/3 (including this amount) of the total paid-in capital of the partnership; in addition, the Investment Committee is composed of 5 members, all investment matters must be approved
by more than 1/2 of the representatives, and the Group has assigned more than half of the representatives to the Haina Yuzhi Fund’s Investment Committee. Therefore, the Group included
Haina Yuzhi Fund into the scope of consolidation.
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 (%)
Hundure Technology (Shanghai) Co., Ltd. April 2021 100.00
Secure Holding Limited October 2021 100.00
Guangzhou Hikvision Technology Co., Ltd. November 2021 100.00
Hikvision Joint-Stock Company December 2021 100.00
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
349
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
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 of
Prama Hikvision Indian Private Limited India Mumbai Sales 58.00 - enterprises not under the
same 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
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
Hikvision Joint-Stock Company (Note 2) 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.
under common control
Business combination
Henan Hua’an Security Services Co., Ltd. Zhengzhou Zhengzhou Henan Services - 84.47 not involving enterprises
under common control
350
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Business combination
Hundure Technology (Shanghai) Co., Ltd. (Note 2) 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 73.30 -
Hangzhou Electronics（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. (Note 4) 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
Hangzhou Hikrobot Technology Co., Ltd. Hangzhou Technology development 60.00 - Establishment
Zhejiang
Hangzhou Hikauto Technology Co., Ltd. (“Hangzhou Auto Hangzhou 60.00
Hangzhou Technology development - Establishment
Technology”) Zhejiang
Hangzhou 70.00
Hangzhou Hikvision Communication Technology Co., Ltd. Hangzhou Technology development - Establishment
Zhejiang
Hangzhou 60.00
Hangzhou Microimage Sensing 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 (Note 2) 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
Microwave Solutions Limited British Sheffield Manufacture - 100.00 Business combination
not involving enterprises
351
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
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 Auto Software Hangzhou Hangzhou, Zhejiang Technology Development - 60.00 Establishment
Hangzhou Haikang Intelligent Technology Co., Ltd. Hangzhou Hangzhou, Zhejiang Technology Development - 60.00 Establishment
Wuhan
Wuhan Hikstorage Technology Co., Ltd.(“Wuhan Hikstorage”) 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. 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
Yu Tian HaiShi Mei Tian Electronic Technology Co., Ltd. Hetian Hetian System integration - 98.00 Establishment
352
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
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. Wuhan Wuhan Hubei Sales - 60.00 Establishment
Hangzhou Hikimaging 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
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
Business combination of
Hangzhou
EZVIZ Technology (Note 5) Hangzhou Sales - 60.00 enterprises under the same
Zhejiang
control
Business combination of
Hangzhou enterprises not under the
Hangzhou Kuangxin Technology Co., Ltd. Hangzhou Technology development 80.00 -
Zhejiang
same control
Hikvision Digital Technology (Shanghai) Co., Ltd. Shanghai Shanghai Technology development, sales 100.00 - Establishment
Nanchang
Nanchang Hikvision Digital Technology Co., Ltd. Nanchang Technology development 100.00 - Establishment
Jiangxi
353
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Jiangshan
Zhejiang Hiksafety Technology Co., Ltd. Jiangshan Technology development - 60.00 Establishment
Zhejiang
Zhenping
Zhenping County Haikang Juxin Digital Technology Co., Ltd. Zhenping System integration - 90.00 Establishment
Henan
Hefei
Hefei Hikvision Digital Technology Co., Ltd. Hefei Technology development 100.00 - Establishment
Anhui
Tianjin Hikvision Information Technology Co., Ltd. Tianjin Tianjin Technology development 100.00 - Establishment
Fuzhou
Fuzhou Hikvision Digital Technology Co., Ltd. Fuzhou System integration 100.00 - Establishment
Fujian
Xuancheng
Anhui Hikvision Urban Operation Service Co., Ltd. Xuancheng System integration - 100.00 Establishment
Anhui
Ningbo
Zhejiang Haikang Urban Service Co., Ltd. (Note 4) Ningbo Technology development 70.00 - Establishment
Zhejiang
Guangzhou
Guangzhou Hikvision Technology Co., Ltd. (Note 2) Guangzhou Technology development 100.00 - Establishment
Guangdong
Hangzhou
Hangzhou Hikfire Technology Co., Ltd. Hangzhou Technology development 60.00 - Establishment
Zhejiang
PT. Hikvision Technology Indonesia Indonesia Indonesia Sales - 100.00 Establishment
Hongkong
EZVIZ International Limited Hongkong Sales - 60.00 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 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 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
354
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Location of Shareholding ratio (%) Acquisition
Name Place of registration Nature of business
operation Direct Indirect Method
Hikvision Morocco LLC Morocco Morocco Sales - 100.00 Establishment
EZVIZ Europe B.V. Netherland Netherland Sales - 60.00 Establishment
Business combination of
BK Grup UAB Lithuania Lithuania Sales - 100.00 enterprises not under the
same control
Business combination of
BK EESTI AKTSIASELTS Estonia Estonia Sales - 100.00 enterprises not under the
same control
Business combination of
SIA “BK Latvia” Latvia Latvia Sales - 100.00 enterprises not under the
same control
Shanghe Smart City Ji’nan Ji’nan System integration - 95.00 Establishment
Chongqing EZVIZ Chongqing Chongqing Manufacture - 60.00 Establishment
Hangzhou
Robotic Automation Hangzhou Manufacture - 60.00 Establishment
Zhejiang
Hikvision Chile SpA Chile San Diego Sales 100.00 - Establishment
Hangzhou
Haina Yuzhi Fund Hangzhou Sales 66.67 - Establishment
Zhejiang
Business combination of
Zhoushan Technology development and
Daishan Hailai (Note 6) Zhoushan 66.60 - enterprises not under the
Zhejiang sales
same control
Business combination of
Syscom MX (Note 7) Mexico Mexico Sales - 51.00 enterprises not under the
same control
Business combination of
Epcom MX (Note 7) Mexico Mexico Sales - 51.00 enterprises not under the
same control
Note 1: Fuyang Baotai is a subsidiary controlled by Hangzhou System, who holds 51.00% equity interests. According to the Company's Articles of Association, Hangzhou System
Company can control the major financial and operating decision-making matters of Fuyang Baotai, and the dividend ratio in this company is 50.00%.
Note 2: The business licenses of Hikvision Joint-Stock Company, Hundure Technology (Shanghai) Co., Ltd., Secure Holding Limited and Guangzhou Hikvision Technology Co., Ltd.
have been cancelledin 2021.
Note 3: In August 2021, the Group redeemed 2% of the Company's shares held by China Development Bank Fund in Hangzhou Electronics. After the equity transfer was completed, the
Group's shareholding in Hangzhou Electronics was changed to 73.30%, and China Development Bank Fund held 26.70% of the shares. Please refer to Note (V) 33 for details.
355
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
Note 4:Hangzhou EZVIZ Network Ltd. was renamed Hangzhou EZVIZ Network Co., Ltd. in 2021 due to the completion of shareholding reform; Ningbo Haikang Parking System
Operation Co., Ltd. was renamed Zhejiang Haikang Urban Service Co., Ltd. in 2021.
Note 5: The Group controlled EZVIZ Technology through the entrusted management agreement from April 2019 to March 2021, and terminated the entrusted management agreement on
March 27th 2021, and no longer exercised the actual management right of EZVIZ Technology. From March 27th 2021, the Group no longer controlled EZVIZ Technology. Please refer to
Note (VI) 2 for details.
Note 6: The Group included "Daishan Hailai" in the scope of the consolidated financial statements during the reporting period. Please refer to Note (VI) 1 for details.
Note 7: Hikvision Singapore Pte. Ltd., a wholly-owned subsidiary of the Group, acquired 51.00% equity in Syscom MX and Epcom MX through cash in 2021. Please refer to Note (VI)
1 for details.
2. During the current reporting period, the Group did not have any changes in the share of owners' equity in subsidiaries and still controls the transactions of subsidiaries.
3. Equity in Joint Ventures or Associates
(1) Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
Closing balance / Amount for 2021 Opening balance / Amount for 2020
Associates：
The aggregate carrying amount of investments in associates 235,962,431.82 193,646,038.77
The aggregate amount of the following items calculated based on the Company’s equity share percentage
of the associates
- Net income (loss) 30,316,393.05 (5,199,282.72)
- Other comprehensive income - -
--Net income (loss) and total comprehensive income (loss) 30,316,393.05 (5,199,282.72)
Joint Ventures:
Total investment book value 746,203,114.63 670,380,671.46
The sum of the following items calculated according to the shareholding ratio
- Net income 83,820,888.13 11,560,671.46
- Other comprehensive income - -
- Net income (loss) and total comprehensive income 83,820,888.13 11,560,671.46
356
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31th 2021
The Group uses the equity method to account for the aforementioned associates and joint ventures.
(2) Unrecognized commitments related to investment in joint ventures
Unit：000 RMB
Joint Venture Capital Commitment (Note)
Zhejiang City Digital Technology Co., Ltd. 11,500.00
Shenzhen Hikvision Urban Service Operation Co., Ltd. 12,000.00
Guangxi Haishi Urban Operation Management Co., Ltd. 11,000.00
Note: The above capital commitments are the capital amounts that the Group has subscribed but not paid in to the above joint ventures.
357
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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, long-term receivables, borrowings, notes
payable, accounts payable, other payables, part of the other current liabilities, lease liabilities, long-term payables, other
non-current liabilities(except for contract liabilities), 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
Closing balance of the current Opening balance of the current year
Items
reporting period (restated)
Financial assets：
Measured at fair value through current profit and loss
Held –for-trading financial assets 34,320,010.83 22,679,846.77
Other non-current financial assets 438,724,172.22 491,939,067.27
Measured at fair value through other comprehensive
income
Receivables for financing 1,316,035,122.06 1,959,601,195.25
Measured at amortized cost
Cash and bank balances 34,721,870,931.36 35,459,729,108.27
Notes receivable 1,522,760,905.30 1,303,252,705.19
Accounts receivable 26,174,773,100.42 22,056,067,917.79
Other receivables 359,620,445.88 519,026,062.82
Long-term receivables 613,067,944.97 485,746,490.32
Non-current assets due within one year 975,960,437.14 850,871,579.78
Closing balance of the current Opening balance of the current year
Items
reporting period (restated)
Financial liabilities
Measured at fair value through current profit and loss
Held-for-trading financial liabilities 4,062,317.57 7,405,771.15
Measured at amortized cost
Short-term borrowings 4,074,962,469.97 3,999,246,634.59
Notes payable 1,339,998,383.34 1,036,920,229.85
Accounts payable 15,889,694,981.12 13,593,884,790.19
Other payables 1,830,626,583.03 1,525,053,355.95
Non-current liabilities due within one year 596,915,360.58 3,644,798,414.28
Other current liabilities 511,611,642.53 560,959,368.73
Long-term borrowings 3,284,371,642.52 1,961,167,761.30
Lease liabilities 317,951,879.21 230,055,273.70
Long-term payables 9,009,331.50 16,542,466.08
Other non-current liabilities(excluding contract liabilities) 511,594,361.52 560,959,368.74
358
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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.
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, EUR and etc. 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, INR, and etc.
As of December 31st 2021, except for monetary items of foreign currencies set out in Note (V) 62, 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 2,310,527,721.21 7,122,984,916.82 1,993,012,472.17 1,886,490,280.88
EUR 2,510,521,255.35 1,480,297,345.67 1,521,742,991.23 3,284,414,031.21
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, foreign
exchange options contracts, interest rate swap contracts 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:
359
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Unit: RMB
2021 2020
Change in foreign exchange rates Effect on Effect on
Effect on profit Effect on profit
shareholders’ equity shareholders’ equity
5% appreciation of USD against functional currency 15,875,762.45 15,875,762.45 261,824,731.80 261,824,731.80
5% depreciation of USD against functional currency (15,875,762.45) (15,875,762.45) (261,824,731.80) (261,824,731.80)
5% appreciation of EUR against functional currency 49,438,913.21 49,438,913.21 (90,205,834.28) (90,205,834.28)
5% depreciation of EUR against functional currency (49,438,913.21) (49,438,913.21) 90,205,834.28 90,205,834.28
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 current reporting period, 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 1,455,221,540.20 (Note (V) 33)
(December 31st 2020: RMB-denominated PPP pledged long-term borrowings with an amount of RMB 1,556,927,316.08
(Note (V) 33)).
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. As at December 31st 2021, the interest
rate swap arrangements of the Group are detailed in Note (V) 2.
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 2021, 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 balances (Note (V) 1), notes receivable (Note (V) 3), accounts receivable (Note (V) 4), receivables for
360
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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,
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, 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, 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.
361
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 2021
Within one year 1-5 years More than 5 years Total
Non-derivative financial liabilities
Short-term borrowings 4,144,481,304.54 - - 4,144,481,304.54
Notes payable 1,339,998,383.34 - - 1,339,998,383.34
Accounts payable 15,889,694,981.12 - - 15,889,694,981.12
Other payables 1,830,626,583.03 - - 1,830,626,583.03
Other current liabilities 511,611,642.53 - - 511,611,642.53
Other non-current liabilities - 511,594,361.52 - 511,594,361.52
Long-term borrowings (including
439,797,310.64 2,585,483,339.61 1,123,671,498.12 4,148,952,148.37
those due within one year)
Lease liabilities (including those
267,240,140.55 287,604,669.92 47,977,039.33 602,821,849.80
due within one year)
Long-term payables (including
1,994,152.05 10,205,847.95 - 12,200,000.00
those due within one year)
Derivative financial instruments
Forward foreign exchange
contracts, foreign exchange option
contracts and interest rate swap
contracts- settled in the gross
amount
- Cash inflow 1,570,626,151.48 16,216,056.49 - 1,586,842,207.97
- Cash outflow 1,544,987,718.59 11,441,895.59 - 1,556,429,614.18
- Net cash inflow 25,638,432.89 4,774,160.90 - 30,412,593.79
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 - 1,346,292,815.32 438,724,172.22 1,785,016,987.54
measurement
(I) Financial assets measured at fair
34,320,010.83 438,724,172.22 473,044,183.05
value through profit and loss
1. Held-for-trading Financial - 34,320,010.83 - 34,320,010.83
Assets
362
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Closing fair value
Items
Level 1 Level 2 Level 3 Total
- Derivative financial - 34,320,010.83 - 34,320,010.83
assets
2. Other non-current - - 438,724,172.22 438,724,172.22
financial assets
(II) Receivables for financing - 1,316,035,122.06 - 1,316,035,122.06
Total assets measured continuously - 1,350,355,132.89 438,724,172.22 1,789,079,305.11
at fair value
(III) Financial liabilities measured at
4,062,317.57 - 4,062,317.57
fair value through profit and loss
1. Held-for-trading Financial - 4,062,317.57 - 4,062,317.57
Liabilities
- Derivative financial - 4,062,317.57 - 4,062,317.57
liabilities
Total liabilities measured - 4,062,317.57 - 4,062,317.57
continuously at fair value
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
2021
Forward Foreign Exchange Contracts, Exchange rate or interest rate
Discounted cash flow
Foreign Exchange Options Contracts and 34,320,010.83 Discounted rate that reflects the credit risk
approach
Interest Rate Swap Contracts (Assets) of counterparty
Forward exchange rate
Forward Foreign Exchange Contracts Discounted cash flow
(4,062,317.57) Discounted rate that reflects the credit risk
(Liabilities) approach
of counterparty
Discounted cash flow Discounted rate that reflects the credit risk
Receivables for financing 1,316,035,122.06
approach of counterparty
3. The Third Level of Fair Value Measurement Item, the Valuation Techniques and Important Parameters Used
Unit: RMB
Fair value on
Items Valuation techniques Inputs
December 31st 2021
Other non-current financial Comparable public companies’ PB (price/book
assets-- Investment in equity Market approach
438,724,172.22 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
Other non-current financial assets Amount
Book value on January 1st 2021 491,939,067.27
Increase in the current reporting period -
Decrease in the current reporting period -
Changes in fair value booked into profit and loss during the current reporting period (53,214,895.05)
Book value on December 31st 2021 438,724,172.22
The total amount included in profit or loss in 2021 includes unrealized losses of RMB 53,214,895.05 (2020: RMB
69,478,784.83) related to financial assets measured at fair value at the end of the current reporting period, 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 current reporting period which were included in investment income was RMB 115,644,801.97
(2020: RMB 150,000,000.00).
363
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
5. Items easured 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 cash and bank balances, notes receivable, accounts receivable, other receivables, non-current assets due within
one year, long-term receivables, 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 36.46 36.46
Zhejiang investment
(CETHIK)
The ultimate controlling party of the Company is China Electronics Technology Group Co., Ltd. ("CETC").
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
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 Technology Co., Ltd. (Wuhu Sensor Tech) and its subsidiaries Associated company
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
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 (Note)
Guangxi Haishi City Operation Management Co., Ltd. (Guangxi Haishi) and its
Joint venture
subsidiaries
Shenzhen Hikvision Urban Service Operation Co., Ltd. (Shenzhen Urban Service) and
Joint venture
its subsidiaries
Xuzhou Kangbo City Operation Management Service Co., Ltd. (Xuzhou Kangbo) Joint venture
Yunnan Yinghai Parking Service Co., Ltd. (Yunnan Yinghai) Joint venture
Zhejiang City Digital Technology Co., Ltd. (Zhejiang City Digital Technology) Joint venture
Zhejiang Haishi Huayue Digital Technology Co., Ltd. (Haishi Huayue) Joint venture
364
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Note: During the period from January 1st 2021 to June 30th 2021, Daishan Hailai waswas a joint venture of the Company.
On June 30th 2021, the Company included Daishan Hailai in the scope of the consolidated financial statements, see Note
(VI) 1 for details.
4. Information on Other Related Parties
Name Relationship
Major shareholder and director of the Company that holds
Gong Hongjia
more 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)
and its subsidiaries
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
Zhejiang Fast Line data fusion Information Technology Co.,Ltd.. The Group’s senior management serve(s) as director(s) of this
(Zhejiang Fast Line data fusion) and its subsidiaries company
Chengdu Guoshengtianfeng Network Technology Co., Ltd. (Chengdu The Group’s senior management serve(s) as director(s) of this
Guoshengtianfeng) and its subsidiaries company
Ruihua Innovation Management Research Institute (Hangzhou) Co., The Group’s independent director(s) serve(s) as director(s) of
Ltd. (Ruihua Innovation) this company
The Group’s supervisor(s) serve(s) as director(s) of this
INESA (Group) Co., Ltd. (INESA) and its subsidiaries
company
The Group’s former independent director(s) serve(s) as
Aurotek Corporation. (Aurotek) and its subsidiaries
director(s) of this company (Note 1)
Under common control of the ultimate controlling party of the
Subsidiaries of CETC (Note 2)
Company
Note 1: Due to the departure of the independent director of the Group in 2021, 2021 is the first year of him/her departure,
therefore, Aurotek Corporation was still recognized as a related party of the Group in 2021.
Note 2: 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 2021 Amount occurred in 2020
Purchase of materials and
Subsidiaries of CETC 1,996,000,573.93 826,842,233.14
receiving of services
Shanghai Fullhan Micro and its Purchase of materials and
1,073,447,072.07 243,902,272.09
subsidiaries receiving of services
Purchase of materials and
Maxio Technology and its subsidiaries 259,171,002.11 20,353,951.20
receiving of services
Purchase of materials and
Wuhu Sensor Tech 120,154,019.26 61,712,356.51
receiving of services
Purchase of materials and
Aurotek Corporation and its subsidiaries 3,277,839.15 -
receiving of services
Purchase of materials and
Yunnan Yinghai 94,339.62 -
receiving of services
Chengdu Guoshengtianfeng and its Purchase of materials and
74,716.98 -
subsidiaries receiving of services
Shenzhen Urban Service and its Purchase of materials and
31,026.60 357,000.00
subsidiaries receiving of services
Purchase of materials and
Ruihua Innovation 3,564.36 -
receiving of services
Purchase of materials and
Zhejiang City Digital Technology 1,811.32 -
receiving of services
Purchase of materials and
Haishi Huayue - 1,743,775.22
receiving of services
365
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Related party Transaction type Amount occurred in 2021 Amount occurred in 2020
Purchase of materials and
Zhiguang Hailian and its subsidiaries - 135,782.26
receiving of services
Total 3,452,255,965.40 1,155,047,370.42
Sales of commodities / rendering of services:
Unit: RMB
Related party Transaction content Amount occurred in 2021 Amount occurred in 2020
Sales of products and 434,709,999.06
Subsidiaries of CETC 350,558,721.59
rendering of services
Sales of products and 53,229,545.96
Haishi JiaAn 38,199,938.50
rendering of services
Sales of products and
Zhiguang Hailian and its subsidiaries 34,122,127.77 14,374,052.45
rendering of services
Sales of products and
Zhejiang City Digital Technology 22,752,048.23 13,760,843.37
rendering of services
Shenzhen Urban Service and its Sales of products and 20,975,222.90 46,006.90
subsidiaries rendering of services
Sales of products and
Daishan Hailai 16,858,777.71 29,854,444.59
rendering of services
Sales of products and 11,494,038.20
Guangxi Haishi and its subsidiaries 1,769,911.50
rendering of services
Sales of products and 10,976,412.61
Haishi Huayue 3,685,281.81
rendering of services
Sales of products and 8,315,234.00
INESA and its subsidiaries -
rendering of services
Chengdu Guoshengtianfeng and its Sales of products and 7,006,078.70 -
subsidiaries rendering of services
Sales of products and 1,217,367.24
Hangzhou Confirmware 589,159.33
rendering of services
Sales of products and 841,349.20
Wuhu Sensor Tech and its subsidiaries 1,906,811.54
rendering of services
Sales of products and 540,138.06
Qingtang Big Data 1,492,966.38
rendering of services
Zhejiang Fast Line data fusion and its Sales of products and 293,172.58 -
subsidiaries rendering of services
Sales of products and 165,779.30
Xuzhou Kangbo 3,150,603.57
rendering of services
Sales of products and 118,306.02
Maxio Technology and its subsidiaries 153,465.93
rendering of services
Sales of products and 5,663.71
Xiaoyun Vision Technology 3,748,314.02
rendering of services
Sales of products and -
Wanyu Security and its subsidiaries 198,230.06
rendering of services
Sales of products and -
Yunnan Yinghai 18,259,614.17
rendering of services
Total 623,621,261.25 481,748,365.71
Statement of capital deposits:
Unit: RMB
Amount
Content of related Amount occurred Balance at the end of the current
Related Party occurred in Opening Balance
party transaction in 2021 reporting period
2020
Deposit into
Subsidiaries of CETC 500,006,734.20 500,006,734.20 - -
current deposits
Deposit into fixed - 4,000,000,000.00
Subsidiaries of CETC - 4,000,000,000.00
deposits
366
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Amount
Content of related Amount occurred Balance at the end of the current
Related Party occurred in Opening Balance
party transaction in 2021 reporting period
2020
Total 500,006,734.20 4,500,006,734.20 - 4,000,000,000.00
Note: For the deposit deposited by the Group with China Electronics Technology Finance Co., Ltd., the deposit interest
income was RMB 80,001,932.23.
The above transactions are executed at market prices.
(2) Guaranteed by the related party
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 2021 Amount occurred in 2020
Compensation for key managers 40,571,163.91 38,952,000.00
(4) Other related party transactions
Sale-leaseback
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 Microimage Sensing signed a financial leasing contract with a subordinate
company of CETC, Hangzhou Microimage Sensing will carry out sale- 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%. On December 31st 2021, Hangzhou Microimage Sensing confirmed
right-of-use assets of RMB 23,923,145.37 and lease liabilities of RMB 22,591,498.84. In 2021, the interest on lease
liabilities is RMB 2,087,283.49.
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. In 2021, EZVIZ Network intends to terminate the
entrusted management of EZVIZ Technology. In March 2021, EZVIZ Network signed the Termination Agreement of the
Entrusted Management Agreement with CETHK and EZVIZ Technology, agreeing that the Entrusted Management
Agreement shall be terminated on March 27th 2021. After the termination of the Entrusted Management Agreement, EZVIZ
Network will no longer exercise the actual operation and management rights over EZVIZ Technology, or be responsible
for the production, operation and management of EZVIZ Technology, or enjoy other rights over EZVIZ Technology as
agreed in the Entrusted Management Agreement. The Group ceased to control EZVIZ Technology since March 27th 2021
and therefore ceased to include the operations of EZVIZ Technology in the scope of consolidation of the consolidated
financial statements. The interest expenses on the above-mentioned capital possession incurred in the current reporting
period amounts to RMB 131,659.87.
6. Receivables from Related Parties and Payables to Related Parties
367
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
(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 CETC 756,888,051.10 209,305,306.47 694,163,118.90 108,859,842.53
receivable
Accounts
Haishi JiaAn 64,817,786.83 1,830,797.36 29,762,113.04 975,776.51
receivable
Accounts Zhiguang Hailian and its
11,797,104.73 310,298.49 9,436,662.00 111,434.71
receivable subsidiaries
Accounts Xiaoyun Vision
9,326,361.72 1,319,097.41 10,929,211.22 412,855.37
receivable Technology
Accounts Zhejiang City Digital
9,022,181.94 102,459.57 12,427,421.59 561,604.39
receivable Technology
Accounts Shenzhen Urban Service
5,850,573.44 287,926.66 - -
receivable and its subsidiaries
Chengdu
Accounts
Guoshengtianfeng and its 2,504,232.29 23,633.21 - -
receivable
subsidiaries
Accounts
Haishi Huayue 2,403,342.00 39,213.42 2,112,591.44 42,509.22
receivable
Accounts Guangxi Haishi and its
2,068,681.99 101,978.52 - -
receivable subsidiaries
Accounts
INESA and its subsidiaries 1,503,248.00 51,765.16 - -
receivable
Accounts Wuhu Sensor Tech and its
821,865.40 153,442.27 823,165.40 37,207.08
receivable subsidiaries
Accounts
Xuzhou Kangbo 517,419.71 60,722.44 786,702.90 35,558.97
receivable
Accounts
Qingtang Big Data 330,000.00 13,959.00 660,000.00 29,832.00
receivable
Accounts Zhejiang Fast Line data
231,399.50 2,013.17 - -
receivable fusion and its subsidiaries
Accounts
Hangzhou Confirmware 113,381.69 3,535.91 83,150.00 981.17
receivable
Accounts Maxio Technology and its
- - 45,667.50 538.88
receivable subsidiaries
Accounts
Daishan Hailai Not applicable Not applicable 16,387,257.40 194,920.07
receivable
Total 868,195,630.34 213,606,149.06 777,617,061.39 111,263,060.90
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes
Subsidiaries of CETC 78,858,666.10 - 78,876,284.35 -
receivable
Notes
Haishi JiaAn 5,000,000.00 - 9,147,466.00 -
receivable
Notes Zhejiang City Digital
1,444,385.00 - - -
receivable Technology
Notes Zhiguang Hailian and its
- - 1,120,000.00 -
receivable subsidiaries
Total 85,303,051.10 - 89,143,750.35 -
Note: The RMB 17,267,512.00 (2020: RMB 4,000,000.00) notes receivable are the acceptance bills of which the drawer
is the related party, and the former endorsers are unrelated third parties.
Unit: RMB
368
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Other
Subsidiaries of CETC 645,000.00 99,483.50 132,459.00 1,563.02
receivables
Other Shenzhen Urban Service
140,000.00 1,218.00 140,000.00 1,652.00
receivables and its subsidiaries
Other
Haishi Huayue 104,182.74 906.39 279,452.11 3,297.53
receivables
Other Wuhu Sensor Tech and
10,485.27 91.22 - -
receivables its subsidiaries
Total 899,668.01 101,699.11 551,911.11 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 CETC 38,579,578.71 2,451,642.33 73,512,305.64 2,015,923.07
(including those due
within one year)
Long-term
receivables
Yunnan Yinghai 16,992,563.72 147,251.94 21,444,096.16 253,040.33
(including those due
within one year)
Long-term
Shenzhen Urban
receivables
Service and its 16,408,408.03 223,709.40 - -
(including those due
subsidiaries
within one year)
Long-term
receivables Guangxi Haishi and
3,818,141.12 42,188.14 - -
(including those due its subsidiaries
within one year)
Long-term
receivables
Xuzhou Kangbo 441,719.03 18,684.71 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 76,240,410.61 2,883,476.52 96,539,832.43 2,298,344.38
Unit: RMB
Item Related Party Closing balance Opening balance
Carrying balance Credit loss provision Carrying balance Credit loss provision
Maxio Technology and
Prepayments 49,300,000.00 - - -
its subsidiaries
Prepayments Subsidiaries of CETC 2,705,210.05 - 4,339,675.60 -
Total 52,005,210.05 - 4,339,675.60 -
369
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
(2) Payables to related parties
Unit: RMB
Item Related Party Closing balance Opening balance
Accounts payable Subsidiaries of CETC 570,856,498.41 360,026,227.41
Shanghai Fullhan Micro and its 407,876,541.15 117,676,674.67
Accounts payable
subsidiaries
Maxio Technology and its 72,307,405.55 545,124.36
Accounts payable
subsidiaries
Accounts payable Wuhu Sensor Tech and its 4,968,239.42 6,286,164.42
subsidiaries
Accounts payable Aurotek Corporation and its 1,434,619.91 -
subsidiaries
Accounts payable Chengdu Guoshengtianfeng and 22,641.51 -
its subsidiaries
Total 1,057,465,945.95 484,534,190.86
Unit: RMB
Item Related Party Closing balance Opening balance
Notes Payable Subsidiaries of CETC 40,579,368.55 17,301,547.82
Notes Payable Shanghai Fullhan Micro and its subsidiaries 24,314,184.13 3,648,820.00
Total 64,893,552.68 20,950,367.82
Unit: RMB
Item Related Party Closing balance Opening balance
Contract liabilities Subsidiaries of CETC 3,446,311.89 10,507,934.92
Contract liabilities Hangzhou Confirmware 960,682.66 -
Zhiguang Hailian and its
Contract liabilities 195,416.40 57,630.00
subsidiaries
Contract liabilities INESA and its subsidiaries 687.00 -
Contract liabilities Xuzhou kangbo - 201,887.56
Contract liabilities Daishan Hailai Not applicable 688.00
Total 4,603,097.95 10,768,140.48
Unit: RMB
Item Related Party Closing balance Opening balance
Other payables Subsidiaries of CETC 56,252,811.73 47,056,334.07
Other payables Qingtang Big Data 9,310,000.00 -
Shanghai Fullhan Micro and its
Other payables 200,000.00 100,000.00
subsidiaries
Wuhu Sensor Tech and its
Other payables 52,040.00 -
subsidiaries
Chengdu Guoshengtianfeng and
Other payables 50,000.00 -
its subsidiaries
Other payables Haishi JiaAn 33,110.00 -
Zhejiang City Digital
Other payables 10,000.00 -
Technology
Zhiguang Hailian and its
Other payables 2,000.00 -
subsidiaries
Total 65,909,961.73 47,156,334.07
Unit: RMB
370
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Item Related Party Closing balance Opening balance (restated)
Long-term payables (including
Subsidiaries of CETC - 8,000,000.00
those due within one year)
Total - 8,000,000.00
Unit: RMB
Item Related Party Closing balance Opening balance (restated)
Lease liabilities (including those
Subsidiaries of CETC 22,591,498.84 41,213,376.81
due within one year)
Lease liabilities (including those Shenzhen Urban Service and its
1,074,683.57 -
due within one year) subsidiaries
Total 23,666,182.41 41,213,376.81
XI. Share-based Payments
1. Overview of Share-based Payments
Restrictive Share Incentive Scheme
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
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 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. 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
371
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 2021 2020
Total of equity instruments outstanding at the beginning of the reporting
- 21,974,740
period
Total of equity instruments granted during the current reporting period - -
Total of equity instruments vested during the current reporting period - 21,204,645
Total of equity instruments forfeited during the current reporting period
- 770,095
(Note)
Total of equity instruments outstanding at the end of the reporting period - -
The exercise price (ex-rights) of the outstanding Share-based payments
of the Company at the end of the reporting period and the remaining - -
period of the contract
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. The Company has completed the
registration procedures of equity changes as of July 2nd 2021.
Unit: share
2018 Share Incentive Scheme 2021 2020
Total of equity instruments outstanding at the beginning of the
68,762,683 121,195,458
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 (Note)
Total of equity instruments outstanding at the end of the reporting
68,762,683 68,762,683
period
The exercise price (ex-rights) of the outstanding Share-based payments
of the Company at the end of the reporting period and the remaining RMB 16.98/share & 24 months RMB 16.98/share & 36 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 4th session of the Board of
Directors, the Company repurchased and cancelled the granted and unvested 6,840,981 restricted RMB treasury shares in
cash. The Company has completed the registration procedures of equity changes as of July 2nd 2021.
372
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
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 current reporting period, the Group recognized share-based
payment expenses of RMB 221,463,007.99 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 Scheme
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 vesting period estimation of each vesting period
Reasons of the significant difference between the
estimates of the current reporting period with that of None None
the prior year
Accumulative amount of share-based payment
through equity settlement and further included in the 345,213,163.42 1,000,614,626.81
capital reserve
Total amount of the expenses recognized according to
share-based payment through equity settlement in the - 147,866,242.12
current reporting period
373
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
316,479,067.19
further included in the capital reserve
Total amount of the expenses recognized according to share-based payment
221,463,007.99
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 reporting period, amount of RMB 21,602,201.66 was due to share distributions to minority shareholders; As of
December 31st 2021, accumulative amount of share-based payment through equity settlement of RMB 57,237,201.85 was
included in the equity of minority shareholders.
3. There is no share-based payment through cash settlements
4. There is no modification or termination of share-based payment during the current reporting period.
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 11,659,026 9,573,577
- Commitment on external investments 34,500 42,400
Total 11,693,526 9,615,977
2. Contingencies
The Group has no significant contingencies to be disclosed.
XIII. Events after the Balance Sheet Date
1. Significant Unadjusted Events
Restricted Share Incentive Scheme
On January 18th 2022, according to the first extraordinary general meeting of shareholders in 2022, after consideration and
approval by the Board of Directors, the Company granted 99,417,229 restricted shares to grantees at a grant price of RMB
29.71 per share. 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
374
Hikvision 2021Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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
completed the equity registration in February 2022.
2. Profit Distribution
Pursuant to the proposal of the 9th meeting of the 5th session of the Board of Directors on April 14th 2022, the Company
proposed to distribute cash dividend of RMB 9 (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 AIoT products and
services.
1.2 Segment financial reporting
External revenue by geographical area & non-current assets by geographical location
Unit: RMB
Item 2021 2020
External revenue generated in domestic area 59,434,989,705.17 45,806,567,913.73
External revenue generated in overseas area 21,985,063,834.10 17,696,882,978.05
Total 81,420,053,539.27 63,503,450,891.78
Unit: RMB
Item (Note) On December 31st 2021 On January 1st 2021
Non-current assets in domestic area 13,823,326,864.88 9,202,175,652.66
Non-current assets in overseas area 777,156,474.79 454,684,509.48
Total 14,600,483,339.67 9,656,860,162.14
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.
375
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to June 30th 2021
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 8,936,084,715.17 25,327,231.42 0.28
Within 1 year after exceeding credit period 14,489,234,463.94 92,968,853.56 0.64
1-2 years after exceeding credit period 514,871,132.91 102,072,248.63 19.82
2-3 years after exceeding credit period 225,519,710.96 95,892,762.79 42.52
3-4 years after exceeding credit period 93,895,841.82 65,226,696.98 69.47
Over 4 years after exceeding credit period 107,141,106.30 107,141,106.30 100.00
Subtotal 24,366,746,971.10 488,628,899.68 2.01
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
24,366,746,971.10 100.00 488,628,899.68 2.01 23,878,118,071.42 24,550,291,739.99 100.00 356,899,560.63 1.45 24,193,392,179.36
loss by
portfolios
Total 24,366,746,971.10 100.00 488,628,899.68 2.01 23,878,118,071.42 24,550,291,739.99 100.00 356,899,560.63 1.45 24,193,392,179.36
Accounts receivable provision for credit loss by portfolios
376
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to June 30th 2021
Unit: RMB
Closing balance
Customer
Carrying balance Credit loss provision Proportion (%)
Subsidiaries’ customers 20,638,547,619.01 - -
Portfolio A 669,111.20 183,382.38 27.41
Portfolio B 3,727,329,323.46 488,244,599.87 13.10
Portfolio C 200,917.43 200,917.43 100.00
Total 24,366,746,971.10 488,628,899.68 2.01
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 141,724,671.73.
The actual write-off of accounts receivable for the current reporting period is RMB 11,090,513.58, and RMB 1,095,180.90 is recovered after write-off..
377
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
1.4 Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
Proportion (%) of
the total balance
of accounts
Name of the Party Relationship with the Company Book value balance of accounts receivable Closing balance for credit loss provision
receivable at the
end of the current
reporting period
Subsidiary A Subsidiary 20,569,980,734.09 - 84.42
CETC’s subsidiary
Related party 116,346,635.88 24,526,386.65 0.48
company A
Third party J Third party 103,678,553.16 4,384,276.62 0.43
Third party K Third party 47,227,654.27 1,172,554.78 0.19
Third party L Third party 45,281,235.64 3,970,652.08 0.19
Total 20,882,514,813.04 34,053,870.13 85.71
1.5 As of December 31st 2021, there is no termination of accounts receivable booking due to transfer of a financial asset.
1.6 As of December 31st 2021, 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 22,910,404.14
Other receivables 1,491,231,959.91 703,792,729.51
378
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Category Closing balance Opening Balance
Total 1,514,142,364.05 726,703,133.65
2.2 Dividends receivable
Unit：RMB
Investees Closing balance Opening Balance
Subsidiaries of Hikvision 22,910,404.14 22,910,404.14
Total 22,910,404.14 22,910,404.14
2.3 other receivables
(1) Other receivables by aging
Unit: RMB
Closing Balance
Item
Other receivables Credit loss provision Proportion (%)
Within contract period 1,480,835,960.26 1,000,125.48 0.07
Within 1 year 10,346,083.28 437,322.07 4.23
1-2 years 955,013.17 173,633.46 18.18
2-3 years 1,186,026.50 488,761.52 41.21
3-4 years 28,300.00 19,580.77 69.19
Over 4 years 1,135,465.04 1,135,465.04 100.00
Subtotal 1,494,486,848.25 3,254,888.34 0.22
379
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
(2) Other receivables by nature of the payment
Unit: RMB
Nature Closing balance Opening balance
Payments by related parties within the Group 1,365,117,094.96 454,474,087.76
Temporary payments for receivables 61,128,645.72 219,103,746.42
Guarantee deposit 60,966,840.82 47,835,041.47
Others 7,274,266.75 3,797,396.93
Total 1,494,486,848.25 725,210,272.58
(3) Provision for credit losses
The amount of credit loss provision recovered in the current period was RMB 18,162,654.73.
(4) The actual write-off of other receivables in the current reporting period was nil.
(5) Top 5 debtors of other receivables in terms of closing balance
Unit：RMB
Relationship with the Percentage to total other Closing balance for
The name of entity Nature Closing balance Aging
Company receivables (%) credit loss provision
Within contract
Subsidiary B Subsidiary Internal Payment 607,297,582.50 40.64 -
period
Within contract
Subsidiary C Subsidiary Internal Payment 149,859,672.76 10.03 -
period
Within contract
Subsidiary D Subsidiary Internal Payment 134,839,322.43 9.02 -
period
Within contract
Subsidiary E Subsidiary Internal Payment 67,617,485.89 4.52 -
period
380
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Relationship with the Percentage to total other Closing balance for
The name of entity Nature Closing balance Aging
Company receivables (%) credit loss provision
Within contract
Subsidiary F Subsidiary Internal Payment 54,423,585.97 3.64 -
period
Total 1,014,037,649.55 67.85 -
(6) At the end of the current reporting period, the Company had no other receivables involving government subsidies.
(7) At the end of the current reporting period, there were no other receivables derecognized due to the transfer of financial assets.
(8) At the end of the current reporting period, there were no assets or liabilities formed by continuing involvement in transferred other receivables.
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 6,870,285,292.68 - 6,870,285,292.68 5,912,831,208.01 - 5,912,831,208.01
Investments in associated enterprises
915,631,339.20 - 915,631,339.20 814,542,245.96 - 814,542,245.96
and joint ventures
Total 7,785,916,631.88 - 7,785,916,631.88 6,727,373,453.97 - 6,727,373,453.97
381
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
3.1 Investment in subsidiaries
Unit：RMB
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
Hangzhou Hikvision System Technology Co.,
848,272,492.62 12,239,987.55 - 860,512,480.17 - -
Ltd.
Hangzhou Hikvision Security Equipment
200,000,000.00 - - 200,000,000.00 - -
Leasing Services Co., Ltd.
Shanghai Goldway Intelligent Transportation
23,000,000.00 - - 23,000,000.00 - -
System Co., Ltd.
Chongqing Hikvision System Technology
700,000,000.00 167,518.60 - 700,167,518.60 - -
Co., Ltd.
Hundure Technology (Shanghai) Co., Ltd. 37,247,790.28 - 37,247,790.28 - - -
Hangzhou EZVIZ Network Co., Ltd. 61,742,747.98 1,500,903.88 - 63,243,651.86 - -
Hangzhou Haikang Zhicheng Investment and
24,000,000.00 - - 24,000,000.00 - -
Development Co., Ltd.
Hangzhou Hikrobot Technology Co., Ltd. 138,957,632.99 3,434,654.51 - 142,392,287.50 - -
Hangzhou Auto Technology 186,488,555.60 782,202.37 - 187,270,757.97 - -
382
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
Hangzhou Hikvision Communication
7,000,000.00 - - 7,000,000.00 - -
Technology Co., Ltd.
Hangzhou Microimage Sensing 182,201,437.54 417,723.87 - 182,619,161.41 - -
HDT INTERNATIONAL LIMITED 87,786.14 - - 87,786.14 - -
Prama Hikvision India PVT 1,585,696.80 - - 1,585,696.80 - -
Hikvision International Co., Limited 79,423.52 - - 79,423.52 - -
Hikvision Australia 2,866,850.00 - - 2,866,850.00 - -
Hikvision Singapore 1,900,590.00 - - 1,900,590.00 - -
Hikvision South Africa 1,578,650.00 - - 1,578,650.00 - -
Hikvision FZE 1,870,351.40 - - 1,870,351.40 - -
HIKVISION DO BRASIL 4,579,750.50 - - 4,579,750.50 - -
LIMITED LIABILITY COMPANY 647,249.19 - - 647,249.19 - -
Hikvision Coop. 65,485.53 - - 65,485.53 - -
Hikvision Korea Limited 1,535,850.00 - - 1,535,850.00 - -
383
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
Hikvision Colombia SAS 1,337,440.00 - - 1,337,440.00 - -
HIKVISION KAZAKHSTAN LIMI 4,758.69 - - 4,758.69 - -
HIKVISION TURKEY TECHNOLO 1,148,115.83 - - 1,148,115.83 - -
Chongqing Hikvision Technology Co., Ltd. 102,318,598.74 437,957.57 - 102,756,556.31 - -
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
98,334,200.00 - - 98,334,200.00 - -
Development Co., Ltd.
Henan Haikang Hua’An Bao Quan
33,940,800.00 - - 33,940,800.00 - -
Electronics Co., Ltd.
Hangzhou Hikvision Technology Co., Ltd. 1,066,917,232.70 7,129,722.90 - 1,074,046,955.60 - -
Hangzhou Hikvision Electronics Co., Ltd. 411,410,425.15 15,280,878.75 - 426,691,303.90 - -
Wuhan Hikstorage 60,869,464.15 - - 60,869,464.15 - -
Chengdu Hikvision Digital Technology Co., 540,086,104.32 194,989.56 - 540,281,093.88 - -
384
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
Ltd.
Hangzhou Auto Software 14,536,174.60 2,038,154.06 - 16,574,328.66 - -
Hangzhou Haikang Intelligent Technology
8,689,143.96 1,510,998.55 - 10,200,142.51 - -
Co., Ltd.
Hangzhou EZVIZ Software Co., Ltd. 35,084,155.82 5,020,897.29 - 40,105,053.11 - -
Hangzhou Hikstorage 2,843,875.79 637,380.59 - 3,481,256.38 - -
HIKVISION TASHKENT 833,014.00 - - 833,014.00 - -
Xi’An Hikvision Digital Technology Co.,
85,000,000.00 115,000,000.00 - 200,000,000.00 - -
Ltd.
Wuhan Hikvision Technology Co., Ltd. 12,600,000.00 187,400,000.00 - 200,000,000.00 - -
Wuhan Hikvision Science and Technology
150,250,000.00 33,002,487.50 - 183,252,487.50 - -
Co., Ltd.
Hangzhou Hikimaging Technology Co., Ltd. 50,948,433.82 561,393.63 - 51,509,827.45 - -
Guizhou Haikang Transportation Big Data
22,000,000.00 22,000,000.00 - 44,000,000.00 - -
Co., Ltd.
385
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
Xinjiang CET Yihai Information Technology
24,000,000.00 - - 24,000,000.00 - -
Co., Ltd.
Nanjing Hikvision Digital Technology Co.,
80,000,000.00 - - 80,000,000.00 - -
Ltd.
Hangzhou Kuangxin Technology Co., Ltd. 112,000,000.00 - - 112,000,000.00 - -
Zhengzhou Hikvision Digital Technology
65,000,000.00 15,000,000.00 - 80,000,000.00 - -
Co., Ltd.
Nanchang Hikvision Digital Technology Co.,
80,000,000.00 - - 80,000,000.00 - -
Ltd.
Hikvision Digital Technology (Shanghai) Co.,
80,000,000.00 - - 80,000,000.00 - -
Ltd.
Hefei Hikvision Digital Technology Co., Ltd. 35,000,000.00 45,000,000.00 - 80,000,000.00 - -
Tianjin Hikvision Information Technology
50,348,846.40 509,239.06 - 50,858,085.46 - -
Co., Ltd.
Zhejiang Hikvision City Service Co., Ltd. 35,000,000.00 - - 35,000,000.00 - -
386
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
Hikvision Peru Closed Stock Company 1,598,042.50 - - 1,598,042.50 - -
Shijiazhuang Hikvision Technology Co., Ltd. 45,000,000.00 5,897,589.14 - 50,897,589.14 - -
Zhejiang Haikang Fire Protection and Control
84,004.82 60,763.40 - 144,768.22 - -
Co., Ltd.
Hikvision Argentina S.R.L 1,793,559.15 - - 1,793,559.15 - -
Fuzhou Hikvision Digital Technology Co.,
50,814,676.49 329,895.30 - 51,144,571.79 - -
Ltd.
Hangzhou Hikfire 61,871,362.21 710,145.93 - 62,581,508.14 - -
Hangzhou Rayin Technology 60,702,536.80 349,581.59 - 61,052,118.39 - -
Hangzhou Microimage Software 2,090,633.38 1,425,368.56 - 3,516,001.94 - -
Kunming Hikvision Digital Technology Co.,
126,666.06 50,174,365.52 - 50,301,031.58 - -
Ltd.
Jinan Hikvision Digital Technology Co., Ltd. - 51,433,533.78 - 51,433,533.78 - -
Hanghou Hikmicro Intelligent Technology
- 52,154.57 - 52,154.57 - -
Co., Ltd.
387
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Balance of
Write-off
impairment
of
Decrease loss
impairment
during the provision
Increase during the current provision
Name of investee Opening balance current Closing balance at the end
reporting period during the
reporting of the
current
period current
reporting
reporting
period
period
HIKVISION WEST AFRICA LIMITED - 101,941.96 - 101,941.96 - -
Daishan Hailai 14,899,444.96 14,899,444.96 - -
Haina Yuzhi Fund - 400,000,000.00 - 400,000,000.00 - -
Total 5,912,831,208.01 994,701,874.95 37,247,790.28 6,870,285,292.68 - -
3.2 Investments in associated enterprises and joint ventures
Unit：RMB
Increase/Decrease during the current reporting period Balance of
impairment
loss
Investment Other Declared cash provision
Name of Provision
Opening balance Additional Reduced income (losses) comprehensive dividends or Closing Balance at the end
investee for Others
Investments Investments recognized under income profit of the
impairment
the equity method adjustment distribution current
reporting
period
1.Joint Ventures
388
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Increase/Decrease during the current reporting period Balance of
impairment
loss
Investment Other Declared cash provision
Name of Provision
Opening balance Additional Reduced income (losses) comprehensive dividends or Closing Balance at the end
investee for Others
Investments Investments recognized under income profit of the
impairment
the equity method adjustment distribution current
reporting
period
Daishan
15,253,091.76 - - 645,353.20 - (999,000.00) - (14,899,444.96) - -
Hailai
Hangzhou
Haikang
Intelligent
Industrial
Equity 612,479,371.62 - - 89,889,968.33 - - - - 702,369,339.95 -
Investment
Fund
Partnership
(L.P.)
Zhejiang
Haishi
Huayue
9,985,577.32 - - 1,944,935.34 - - - - 11,930,512.66 -
Digital
Technology
Co., Ltd.
389
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Increase/Decrease during the current reporting period Balance of
impairment
loss
Investment Other Declared cash provision
Name of Provision
Opening balance Additional Reduced income (losses) comprehensive dividends or Closing Balance at the end
investee for Others
Investments Investments recognized under income profit of the
impairment
the equity method adjustment distribution current
reporting
period
Xuzhou -
Kangbo City
Operation
4,631,286.58 4,900,000.00 - (298,084.91) - - - - 9,233,201.67
Management
Service Co.,
Ltd.
Shenzhen -
Hikvision
Urban
6,029,569.69 - - (4,764,911.31) - - - - 1,264,658.38
Service
Operation
Co., Ltd.
Yunnan -
Yinghai
Parking 4,841,060.76 - - (282,179.67) - - - - 4,558,881.09
Service Co.,
Ltd.
390
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Increase/Decrease during the current reporting period Balance of
impairment
loss
Investment Other Declared cash provision
Name of Provision
Opening balance Additional Reduced income (losses) comprehensive dividends or Closing Balance at the end
investee for Others
Investments Investments recognized under income profit of the
impairment
the equity method adjustment distribution current
reporting
period
Zhejiang -
City Digital
11,864,018.37 - - 350,301.92 - - - - 12,214,320.29
Technology
Co., Ltd.
Guangxi
Haishi City
Operation 5,296,695.36 3,000,000.00 - (3,664,494.77) - - - - 4,632,200.59 -
Management
Co., Ltd.
Subtotal 670,380,671.46 7,900,000.00 - 83,820,888.13 - (999,000.00) (14,899,444.96) 746,203,114.63 -
2.Associated Enterprises
Wuhu
58,491,264.42 - - 16,975,212.42 - - - - 75,466,476.84 -
Sensor Tech
Maxio
54,621,802.54 - - 8,105,646.99 - - - - 62,727,449.53 -
Technology
Zhiguang 21,253,058.87 - - 32,784.40 - - - - 21,285,843.27 -
391
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Increase/Decrease during the current reporting period Balance of
impairment
loss
Investment Other Declared cash provision
Name of Provision
Opening balance Additional Reduced income (losses) comprehensive dividends or Closing Balance at the end
investee for Others
Investments Investments recognized under income profit of the
impairment
the equity method adjustment distribution current
reporting
period
Hailian
Qingtang
9,795,448.67 - - 153,006.26 - - - - 9,948,454.93 -
Big Data
Subtotal 144,161,574.50 - - 25,266,650.07 - - - - 169,428,224.57 -
Total 814,542,245.96 7,900,000.00 - 109,087,538.20 - (999,000.00) - (14,899,444.96) 915,631,339.20 -
Note: The original joint venture of the Company, Daishan Hailai, was converted from the equity method to the cost method for accounting. For details, please refer to Note
VI (1).
3.3 As of December 31st 2021, there were no restrictions on the capability of transferring fund to the Company from investees in which the Company held long-term
equity investment.
392
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
4. Operating Income and Operating Cost
Unit：RMB
2021 2020
Item
Income Cost Income Cost
Operating income 24,756,059,967.30 5,102,605,625.81 24,051,359,607.67 7,010,347,837.77
Other operating
3,316,533,294.57 138,183,248.51 2,260,627,739.73 167,059,377.68
income
Total 28,072,593,261.87 5,240,788,874.32 26,311,987,347.40 7,177,407,215.45
5. Investment Income
Unit：RMB
Item 2021 2020
Long-term equity investment income (losses) calculated by cost
16,316,000.00 80,360,404.14
method
Long-term equity investment income measured by equity
109,087,538.20 13,424,897.92
method
Investment losses from disposal of long-term equity investments (3,387,647.37) (2,215.23)
Investment income of other non-current financial assets during
115,644,801.97 150,000,000.00
the holding period
Investment income (losses) from disposal of held of trading
(461,953.09) 3,552,279.56
financial assets
Investment income from disposal of asset group - 848,151,116.16
Total 237,198,739.71 1,095,486,482.55
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 2021 2020
Purchase of materials and
Subsidiaries of Hikvision (Note) 6,136,340,294.33 7,995,299,074.64
receiving of services
Purchase of materials and
Subsidiaries of CETC 23,888,681.71 11,773,724.55
receiving of services
Maxio Technology and its Purchase of materials and
36,783,800.00 7,875,600.00
subsidiaries receiving of services
Aurotek Corporation and its Purchase of materials and
1,787,764.68 -
subsidiaries receiving of services
Wuhu Sensor Tech and its Purchase of materials and
- 1,000.00
subsidiaries receiving of services
Total 6,198,800,540.72 8,014,949,399.19
Note: Subsidiaries of Hikvision are subsidiaries of the Company. See Note (VII) for details.
393
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Sales of goods/rendering of services:
Unit：RMB
Related party Transaction type 2021 2020
Sales of products and
Subsidiaries of Hikvision 22,294,952,493.31 18,507,772,746.27
rendering of services
Sales of products and
Haishi JiaAn 20,696,334.95 -
rendering of services
Sales of products and
Subsidiaries of CETC 20,263,330.33 71,968,472.76
rendering of services
Chengdu Guoshengtianfeng and Sales of products and
7,006,078.70 -
its subsidiaries rendering of services
Shenzhen Urban Service and its Sales of products and
905,309.73 13,868.14
subsidiaries rendering of services
Guangxi Haishi and its Sales of products and
578,334.10 1,769,911.50
subsidiaries rendering of services
Sales of products and
Haishi Huayue 516,471.00 263,634.07
rendering of services
Wuhu Sensor Tech Service and its Sales of products and
13,008.86 1,150.44
subsidiaries rendering of services
Zhiguang Hailian and its Sales of products and
- 2,191,071.97
subsidiaries rendering of services
Sales of products and
Xiaoyun Vision Technology - 2,629,911.49
rendering of services
Sales of products and
Qingtang Big Data - 7,092.92
rendering of services
Total 22,344,931,360.98 18,586,617,859.56
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 (Note) during the current the end of the current during the prior
party transaction current reporting
reporting period reporting period reporting period
period
Deposit into current
Subsidiaries of CETC 500,006,734.20 500,006,734.20 - -
deposits
Deposit into fixed
Subsidiaries of CETC - 4,000,000,000.00 - 4,000,000,000.00
deposits
Total 500,006,734.20 4,500,006,734.20 - 4,000,000,000.00
394
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Note: For the deposit that the Company deposited into China Electronics Technology Finance Co., Ltd., the deposit
interest income was RMB 80,001,932.23.
Those transactions above were executed at market prices or at the prices agreed by both parties.
6.2 Guarantees with related parties
In the current reporting period, the Company has provided guarantees for its 27 wholly-owned and majority-owned
subsidiaries in an amount not exceeding an equivalent of RMB 16.10 billion (2020：RMB 32.80 billion), including
the joint liability guarantee for the payment obligations on purchase from suppliers in an amount not exceeding an
equivalent of RMB 370 million (2020: 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 15.73 billion (2020: RMB 29.67 billion).
For details of the Company's guarantees on Safety Chongqing project, please refer to Note X (5).
6.3 Funding from related parties
In April 2021, the Company proposes to provide amounts of no more than RMB 500 million, RMB 500 million,
RMB 200 million, RMB 100 million and RMB 50 million to five innovative business holding subsidiaries, namely
Wuhan Hikstorage, Hangzhou Auto Technology, Hangzhou Hikfire, Hangzhou Rayin Technology and Hangzhou
Hikimaging Technology, respectively. It is used to supplement the operating capital needs of each innovative
business holding subsidiary. 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 (May 14th 2021), during which the limit (balance) can be utilized
in circulation by batches. The annual borrowing rate of financial assistance shall be negotiated and determined by
both parties to the agreement without violating relevant laws and regulations. The interest rate is determined
according to the principle of marketization, and the specific contract shall prevail. The method of repayment is to
repay the principal and interest in one lump sum upon maturity.
In July 2020, the Company provided financial assistance of no more than RMB 1,000 million to Hangzhou Robotic
Technology, an innovative business subsidiary. The specific assistance amount will be provided according to actual
business needs. The valid financial assistance period is 3 years from the date of deliberation and approval at the 18th
meeting of the 4th session of the Board of Directors of the Company (July 24th 2020), during which the limit (balance)
can be utilized in circulation by batches. The annual borrowing rate of financial assistance shall be negotiated and
determined by both parties to the agreement without violating relevant laws and regulations. The interest rate is
determined according to the principle of marketization, and the specific contract shall prevail. The method of
repayment is to repay the principal and interest in one lump sum upon maturity.
In April 2020, the Company provided no more than RMB 300 million, RMB 50 million RMB 100 million and RMB
395
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
500 million to the four holding subsidiaries of Hangzhou Auto Technology, Hangzhou Hikstorage, Hangzhou
HikFire and Hangzhou Microimage Sensing respectively. The specific assistance amount will be provided according
to actual business needs. The period of financial funds will take effect during 3 years after the date of approval by
the general meeting of the Company (May 15th 2020), during which the limit (balance) can be utilized in circulation
by batches. The annual borrowing rate of financial assistance shall be negotiated and determined by both parties to
the agreement without violating relevant laws and regulations. The interest rate is determined according to the
principle of marketization, and the specific contract shall prevail. The method of repayment is to repay the principal
and interest in one lump sum upon maturity.
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 20,638,547,619.01 - 20,623,636,081.76 -
receivable
Accounts
Subsidiaries of CETC 232,683,754.63 59,533,322.73 224,340,023.89 28,804,106.29
receivable
Accounts Xiaoyun Vision
7,937,469.72 1,067,451.69 9,522,614.22 349,200.54
receivable Technology
Chengdu
Accounts
Guoshengtianfeng and its 2,504,232.29 23,633.21 - -
receivable
subsidiaries
Accounts
Haishi JiaAn 2,784,000.00 24,220.80 - -
receivable
Accounts Zhiguang Hailian and its
- - 7,074.00 83.47
receivable subsidiaries
Accounts Wuhu Sensor Tech and its
- - 1,300.00 58.76
receivable subsidiaries
Total 20,884,457,075.65 60,648,628.43 20,857,507,093.87 29,153,449.06
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes
Subsidiaries of Hikvision 37,441,937.40 - - -
receivable
Notes
Subsidiaries of CETC 12,417,231.80 - 15,740,985.15 -
receivable
396
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Total 49,859,169.20 - 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 1,365,117,094.96 - 454,474,087.76 -
receivables
Other
Subsidiaries of CETC 145,000.00 6,133.50 145,000.00 1,711.00
receivables
Other
Haishi Huayue 104,182.74 906.39 279,452.11 3,297.53
receivables
Total 1,365,366,277.70 7,039.89 454,898,539.87 5,008.53
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Prepayments Subsidiaries of Hikvision 3,274,287.66 - 3,646,828.69 -
Maxio technology and its
Prepayments 49,300,000.00 - - -
subsidiaries
Prepayments Subsidiaries of CETC 26,700.00 - - -
Total 52,600,987.66 - 3,646,828.69 -
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Long-term
receivables
(including
Subsidiaries of CETC 18,579,578.71 161,642.33 53,512,305.64 1,446,519.44
those due
within one
year)
Total 18,579,578.71 161,642.33 53,512,305.64 1,446,519.44
397
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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 - 22,910,404.14 -
receivable
Total 22,910,404.14 - 22,910,404.14 -
7.2 payables to related parties
Unit：RMB
Item Related party Closing balance Opening balance
Accounts payable Subsidiaries of Hikvision 441,107,077.18 329,639,516.11
Accounts payable Subsidiaries of CETC 5,000,503.43 3,010,132.22
Aurotek Corporation and its
Accounts payable 648,139.19 -
subsidiaries
Total 446,755,719.80 332,649,648.33
Item Related party Closing balance Opening balance
Contract liabilities Subsidiaries of Hikvision 10,138,872.51 5,755.28
Contract liabilities Subsidiaries of CETC 242,618.30 382,332.53
Contract liabilities INESA and its subsidiaries 687.00 -
Contract liabilities Daishan Hailai Not Applicable 688.00
Total 10,382,177.81 388,775.81
Item Related party Closing balance Opening balance
Other payables Subsidiaries of Hikvision 793,064,398.78 289,914,770.68
Other payables Qingtang Big Data 9,310,000.00 -
Other payables Subsidiaries of CETC 190,790.00 337,710.00
Other payables Shanghai Fullhan Micro 100,000.00 100,000.00
Zhejiang City Digital
Other payables 10,000.00 -
Technology
Wuhu Sensor Tech and its
Other payables 2,040.00 1,200.00
subsidiaries
Total 802,677,228.78 290,353,680.68
8. Supplementary Information to the Cash Flow Statement
8.1 Supplementary information to the cash flow statement
Unit：RMB
398
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
Supplementary information 2021 2020
1. Reconciliation of net profit to cash flows from
operating activities:
Net profit 14,088,727,668.02 12,671,388,440.50
Add: Assets impairment provision 2,669,913.88 (2,397,952.77)
Credit loss provision 119,440,900.17 35,765,705.73
Depreciation of fixed assets 271,966,196.58 256,698,165.42
Amortization of intangible assets 42,715,421.78 51,580,512.51
Depreciation of right of use assets 35,547,052.78 -
Amortization of long-term deferred expenses 66,502,221.67 21,910,527.64
Gains on disposal of fixed assets, intangible assets
(30,917,301.16) (16,966.03)
and other long-term assets
Financial expenses 138,779,449.86 270,249,113.29
Losses (gains) from change in fair value 48,725,796.17 (69,478,784.83)
Investment income (237,198,739.71) (1,095,486,482.55)
Share-based payment through equity settlement 238,045,712.93 523,901,019.53
Decrease (increase) in restricted funds 195,005,634.49 (16,350,637.05)
Decrease (increase) in deferred income tax assets (171,826,866.94) 16,291,195.35
Increase of inventories (145,289,110.09) (30,574,481.99)
Decrease (increase) in operating receivables (651,204,315.31) 941,257,584.66
Increase in operating payables 1,539,868,467.24 974,737,516.48
Increase (decrease) in deferred income 243,243,770.27 (39,562,793.01)
Net cash flow from operating activities 15,794,801,872.63 14,509,911,682.88
2. Major investing and financing activities not involving
cash receipt and payment:
3. Net change in cash and cash equivalents:
Closing balance of cash 26,639,582,696.49 23,264,693,578.70
Less: Opening balance of cash 23,264,693,578.70 16,656,028,410.72
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents 3,374,889,117.79 6,608,665,167.98
399
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
8.2 Composition of cash and cash equivalents
Unit：RMB
Item Closing balance Opening balance
I. Cash 26,639,582,696.49 23,264,693,578.70
Including: Cash on hand 261,314.61 264,936.39
Bank deposit for payment at any time 26,639,219,718.83 23,264,326,122.65
Other monetary funds for payment at any
101,663.05 102,519.66
time
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 26,639,582,696.49 23,264,693,578.70
On December 31st 2021, the Company’s closing balance of other monetary funds was RMB 17,008,779.94
(December 31st 2020: RMB 212,015,271.04), of which RMB 16,907,116.89 were all various guarantee deposits
(December 31st 2020: RMB 211,912,751.38), not cash or cash equivalents.
XVI. Supplementary Information
1. Details of Current Non-recurring Gains and Losses
Unit：RMB
Item Amount Description
Profit or loss from disposal of non-current assets 26,069,469.18 /
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 576,619,421.07 /
subsidy based on standard quota or quantitative continuous
enjoyment according to the state industrial policy)
Investment losses from disposal of subsidiaries and other
(169,184,641.43)
business units
The gains generated when the investment cost of acquiring a
subsidiary, an associate or joint venture is less than the income
1,163,932.96 /
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
75,408,081.63 /
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
(1,471,007.77) /
mentioned above
Impact of income tax (29,930,824.64) /
The impact of minority equity (122,987,029.92) /
Total 355,687,401.08 /
400
Hikvision 2021 Annual Report
Notes to Financial Statements
For the reporting period from January 1st 2021 to December 31st 2021
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.
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
28.99% 1.810 1.806
Company
Net profit excluding non-recurring items of profit or loss
28.38% 1.772 1.767
attributable to ordinary shareholders of the Company
401
Hikvision 2021 Annual Report
Section XI 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 16th 2022
Note:
This document is a translated version of the Chinese version 2021 Annual Report (“2021 年年度报
告”), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2021 Annual Report may be obtained at www.cninfo.com.cn.
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