Hangzhou Hikvision Digital Technology Co., Ltd.
2022 Annual Report
April 15, 2023
Hikvision 2022 Annual Report
To Shareholders
The year 2022 was the twenty-first year since the establishment of the Company. It also
witnessed the first negative profit growth since our creation. The Company is experiencing many new
challenges in a complex and changing environment. However, challenges are inevitable in the growth
and development of businesses. Some challenges have made the Company more confident and
capable of addressing future challenges.
Technology is the first productive force. Recognizing the growing impact of technological
advancement on all aspects of our life, the Company embraces technological changes and follows
technological development trends. AIoT is a field the Company will continue to develop for a long
time as it covers many industry scenarios, technologies and a wide range of products from detectors
to system solutions. Today, customers focus on not only the type of objects, but also their
characteristics, status or composition, and this change of consumer demand poses challenges and
opportunities for us. The development of AI technology has provided us with greater capability and
easier access to more data of objects, enabling us to explore wider application of data with AIoT.
Believing that success will come when conditions are ripe, the Company will continue to invest firmly
in perception, AI, big data and cloud computing technologies. We look forward to more breakthroughs
in global technology, and will strive to grasp the business opportunities that each technological change
presents.
Digital transformation is a long-term process that requires continuous improvement. We will
continue to optimize our operational model or process by adopting digital technologies in various
business scenarios of the Company and our partners. Digital transformation is crucial for our growth
and the development of new market opportunities, but it cannot be done overnight. We will start with
little practical work and steadily forges ahead toward our goal.
The past five years has been challenging for many businesses due to the rise of international
protectionism and the trend of counter-globalization, and we are no exception. However, we have
also seen some growth. There is still a tremendous market out there and we will adapt to the
circumstances, further strengthen our marketing and service systems, and improve our supply chain
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Hikvision 2022 Annual Report
based on market trends and business development needs.
The successful IPO of EZVIZ Network marks a milestone in the Company's internal
entrepreneurial innovation and an achievement in our path to maintaining entrepreneurial and
innovative vitality. Being customer-centric and creating value for customers are always the
Company's original mission and core values, regardless of the business model. Whether in good or
bad times, we remain open, transparent and honest.
At last, I would like to express my sincere gratitude to all shareholders for your trust in the
management team!
See far, go further!
Board of Directors of Hangzhou Hikvision Digital Technology Co., Ltd.
April, 2023
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Hikvision 2022 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
9,363,932,789 shares, the Company proposed to distribute cash dividend of RMB7 (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 2022 Annual Report ("2022 年年度报
告"), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2022 Annual Report may be obtained at www.cninfo.com.cn.
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Hikvision 2022 Annual Report
Please read the full annual report and pay particular attention to the following risk factors:
1) Geopolitical environment risk: The current global geopolitical uncertainty has greatly increased, and
the operating environment in certain regions has deteriorated. The Company will adjust its marketing
resources based on business opportunities, but if the geopolitical environment get worse, the Company's
operations in certain countries and regions may be adversely affected.
2) Global economic downside risk: The economic growth of some overseas countries slows down, the
potential risks such as economic fluctuation and debt default in various regions are difficult to eliminate.
At the same time, the domestic economy is switching to a new development mode and its pace of recovery
needs to be further observed. The Company disperses the operation risk of a single region with a wide
business layout. But the Company's business will also be impacted if there is a global economic recession.
3) Supply chain risk: The global supply system is being undermined by politics. The Company has been
making efforts to build a diversified 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
4) Technology upgrading risk: AI, big data, cloud computing, edge computing and other technologies
develop rapidly, and the iteration speed of science and technology application is fast. If the update and
change of cutting-edge technology cannot be closely tracked and the innovative development of business
cannot be realized quickly, the uncertainty of the Company's future development will increase.
5) 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. The Company constantly strengthens the construction of legal compliance system since
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.
6) Risk of exchange rate fluctuation: The Company carries out operations in various countries and regions,
mainly settled in non-RMB currency. Exchange rate fluctuations could have impact on foreign exchange
exposures arising out of sales, procurement and financing, which could likely affect the profitability level
of the Company.
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Hikvision 2022 Annual Report
7) 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 its stable business operation, and the financing cost is low. If the overall liquidity
risk of the market increases, it will adversely affect the Company’s account receivables due to the payment
collection speed of the Company may slow down.
8) 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. The Company’s sustainable development will face certain risks if the management level
fails to proportionally address the Company’s business expansion.
9) Risk of cybersecurity: The Company has always attached great importance and taken active measures
to enhance cybersecurity performance of our products and systems. But 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.
10) 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 2022 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 ......................................................................................... 14
Section IV Corporate Governance ................................................................................................................ 125
Section V Environmental and Social Responsibility .................................................................................... 163
Section VI Significant Events ......................................................................................................................... 164
Section VII Changes in Shares and Information about Shareholders ....................................................... 191
Section VIII Information of Preferred Shares ............................................................................................. 207
Section IX Bonds ............................................................................................................................................. 208
Section X Financial Report ............................................................................................................................ 209
Section XI Documents Available for Reference ........................................................................................... 368
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Hikvision 2022 Annual Report
Definitions
Term Definition
Reporting Period From January 1, 2022 to December 31, 2022
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 Ltd. (According to the context, also refers to the
business corresponding business)
HikMicro, Micro Sensing, Hangzhou Hikmicro Sensing Technology Ltd. (According to the context, also refers
Thermal imaging business to the corresponding business)
HikSemi, HikStorage, Wuhan Hikstorage Technology Ltd. (According to the context, also refers to the
Storage business corresponding business)
HikImaging Hangzhou Hikimaging Technology Ltd. (According to the context, also refers to the
corresponding business)
HikFire Hangzhou Hikfire Technology Ltd. (According to the context, also refers to the
corresponding business)
HikRayin,Rayin, Hangzhou Rayin Technology Ltd. (According to the context, also refers to the
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 2022 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 Park Province, is planned to be used for R&D, office space and supporting facilities of
Hangzhou EZVIZ Network Co., Ltd.
Hefei Science and Located in Hefei, Anhui Province, the planned use is R&D, office space and
Technology Park supporting facilities, etc.
Nanjing Science and Located in Nanjing, Jiangsu Province, the planned use is R&D, office space and
Technology Park supporting facilities, etc.
Nanchang Science and Located in Nanchang, Jiangxi Province, the planned use is R&D, office space and
Technology Park supporting facilities, etc.
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 (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 2022 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, Zhejiang Province
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
No. 518 WuLianWang Street, Binjiang
Address
District, Hangzhou
Tel. 0571-88075998 ; 0571-89710492
Fax 0571-89986895
E-mail hikvision@hikvision.com
III. Information Disclosure and Place of the Report
The securities exchange website for the disclosure of the Annual
www.szse.cn
Report
Securities Times, China Securities Journal, Shanghai securities
Media and website for the disclosure of the Annual Report
Journal, 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 2022 Annual Report
IV. Company Registration and Alteration
Unified Social Credit Identifier 91330000733796106P
During the reporting period, the Company added the following to the business
scope: production of commercial password products; development of network
and information security software; Type II value-added telecommunications
services; online data processing and transaction processing services (operating
e-commerce); internet information services; general aviation services. The
following phrases have been removed: manufacturing of consumer service
robot, manufacturing of industrial robot, manufacturing of special operation
robot, and sales of intelligent robot. At the same time, the Company adjusted
some 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 the radiopharmaceuticals for
positron emission computed tomography ); sales of Class II, Class III, Class IV
and Class V radioactive sources; engineering and construction activities; type II
value-added telecommunications services; online data processing and
transaction processing services (operating e-commerce); Internet information
services; general aviation services. (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
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 labor protective
supplies; sales of special labor protective supplies; production of commercial
password products; 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; software development; development of network and
information security software; information system integration services;
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Hikvision 2022 Annual Report
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; business training (excluding education
and vocational training that require licensing); import and export of goods;
import and export of technology (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, Cai Jin
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
Office Address of Financial Name of the lead
Name of Financial Advisor Supervision Period
Advisor financial advisor
The remaining period of the first year
27th & 28th Floors, Tower 2, of listing of Hangzhou Ezviz Network
China International Capital China World Tower, No.1 Wang Jian ; Liu Co., Ltd., a subsidiary under the control
Corporation Limited Jianguomen Outer Street, Jia of the Company, and the following
Chaoyang District, Beijing. complete fiscal year.（From December
28, 2022 to December 31, 2023）
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
2022 2021 2020
Change (%)
Revenue (RMB) 83,166,321,681.14 81,420,053,539.27 2.14% 63,503,450,891.78
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Hikvision 2022 Annual Report
YoY
2022 2021 2020
Change (%)
Net profit attributable to shareholders of the
12,837,342,061.07 16,800,411,032.05 -23.59% 13,385,526,714.15
Company (RMB)
Net profit attributable to shareholders of the
Company excluding non-recurring gains and losses 12,330,695,878.62 16,444,723,630.97 -25.02% 12,805,839,276.44
(RMB)
Net cash flows from operating activities (RMB) 10,164,135,382.38 12,708,524,686.99 -20.02% 16,088,156,566.67
Basic earnings per share (RMB/share) 1.370 1.810 -24.31% 1.445
Diluted earnings per share (RMB/share) 1.370 1.806 -24.14% 1.444
Weighted average ROE 19.62% 28.99% -9.37% 27.72%
At December 31, At December 31, YoY At December 31,
2022 2021 Change (%) 2020
Total assets (RMB) 119,233,282,761.47 103,864,543,195.18 14.80% 88,701,682,384.20
Net assets attributable to shareholders of the
68,389,154,548.76 63,460,886,665.26 7.77% 53,794,311,162.05
Company (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
9,363,932,789
(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 1.371
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.
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Hikvision 2022 Annual Report
3. Explanation of the Differences in Accounting Data under Domestic and Overseas Accounting Standards
□ Applicable √ Inapplicable
VIII. Key Quarterly Financial Indicators
Unit：RMB
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Revenue (RMB) 16,521,549,351.36 20,735,967,239.26 22,464,020,301.15 23,444,784,789.37
Net profit attributable to shareholders of the
2,284,174,955.78 3,475,079,819.48 3,081,001,112.19 3,997,086,173.62
Company
Net profit attributable to shareholders of the
Company excluding non-recurring gains 2,210,077,663.70 3,435,781,353.81 2,879,656,597.51 3,805,180,263.60
and losses
Net cash flows from operating activities -3,904,933,407.63 1,746,441,198.55 2,318,609,350.12 10,004,018,241.34
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 2022 2021 2020
Profits or losses from disposal of non-current assets (including the
-18,617,582.10 26,069,469.18 -5,836,675.36
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 726,269,569.92 576,619,421.07 571,403,657.30
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
Profits and losses attributed to change in fair value for derivative
financial assets, derivative financial liabilities and other non-
current financial assets; and investment gains and losses from
disposal of derivative financial assets, derivative financial -99,112,871.09 75,408,081.63 98,373,869.75
liabilities, and receivables financing, excluding the effective
hedging business related to the regular business operation of the
Company.
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Hikvision 2022 Annual Report
Item 2022 2021 2020
Investment gains and losses on disposal of subsidiaries and other
3,550,851.71 -169,184,641.43 -
business units
Other non-operating income and expenditures except the items
72,446,008.81 -1,471,007.77 74,007,631.14
mentioned above
Less: Impact of income tax 74,392,826.66 29,930,824.64 109,931,807.07
Impact of the minority interests (after tax) 103,496,968.14 122,987,029.92 48,610,431.55
Total 506,646,182.45 355,687,401.08 579,687,437.71
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 2022 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
In 2022, Hikvision put its AIoT strategy into full swing. The Company is committed to serving a wide range
of industries through IoT, perception, AI, and big data technologies, leading the future of AIoT. Through
comprehensive perception technologies, we aim to help people better connect with the world around them, building
the foundation of an intelligent world. 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.
AIoT is a fundamental capability that provides the possibility of connection and interaction between people
and things as well as between things, but the support of perception technology is needed to realize this possibility.
As things lack the ability of active or passive perception, the comprehensive development of perception technology
provides everything with the possibility of "perceiving" and "being perceived". Currently, perception technology is
shifting its focus from familiar perception models to unfamiliar areas where direct perception is impossible, is
growing from single perception to multi-dimensional perception fusion, and is evolving from non-intelligent to
intelligent perception, thus transforming things into intelligent things. Hikvision's perception technology covers
long waves from visible light to near-infrared, mid-infrared, far-infrared and millimeter waves, short
electromagnetic waves such as ultraviolet light and X-ray, as well as short mechanical waves from sound to
ultrasonic waves. Furthermore, the Company is expanding physical sensing technologies such as temperature,
humidity, pressure and magnetic force, building a technical foundation for comprehensive perception. We deliver
perception, multi-dimensional perception and intelligent perception to multiple industries and fields through
products owing to continuous R&D and accumulation of perception technologies, so that perception and interaction
between people and things and between things becomes possible, leading to the development of more applications.
The development of AIoT is supported by the development of perception technology and relies on the
development of AI and big data. AI and IoT are a good match as they are closely connected and complementary.
The rapid growth of intelligent perception technology thanks to AI, coupled with the generation of big data of things,
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Hikvision 2022 Annual Report
paves the way for the application of IoT. The most basic application of AIoT may be the use of data from IoT
devices to trigger simple alarms. For example, a thermal imaging camera sends an alarm for manual inspection after
sensing an excessive temperature of the device, while in a more complex IoT system, a large number of sensing
devices monitor multi-dimensional information in the production process. AI algorithms learn through massive IoT
data, distinguish between signals and noise based on user needs, and continue to optimize and iterate so that devices
and systems are able to make decisions, and take actions. This makes AI the soul of IoT. Hikvision has allocated
substantial investment and resources to the construction of basic arithmetic power and big models, and the relevant
capabilities have found applications in not only hardware and software products, but also user-oriented algorithm
training including Hikvision AI Open Platform. Future breakthroughs in pre-trained large models and other
intelligent technologies will result in greater value of AI.
The development of AIoT represents integrated development of a huge technology cluster, ranging from image
technology (AI-ISP, image enhancement, multi-camera stitching, multi-spectral fusion), optical technology (lens,
fill-in light, focus and zoom, anti-shake, Fresnel optics, etc.), environmental adaptation technology (high- and low-
temperature, rain, snow and dust-resistant, explosion-proof, heat dissipation, etc.), passive detection technology
(passive infrared, vibration sensing, glass breakage detection, tilt/displacement detection, etc.) to network
connection, data aggregation, storage and calculation technologies, and to display, control, interaction and other
application technologies. These technologies have collectively evolved from simple to engineered forms. With more
than 20 years of product R&D and manufacturing, Hikvision has initially built the R&D foundation of common
technologies from hardware, process materials, embedded software to system-level software development, big data
and network security. The Company facilitates innovative R&D of products including detectors, modules, devices
and systems through the combination and integration of common technologies and scenario-based application
technologies.
The development of AIoT will remain driven by the individual needs of users for quite a long time. As AIoT
applications are scenario-driven ones, scenario-defined products and solutions will be the dominant business format.
However, the specific use of AIoT applications varies with industries due to different characteristics and business
operation models of each industry. Even different users in the same industry may have their unique needs. Hikvision
has more than 30,000 hardware products, which are the result of expansion of previous business scenarios and the
foundation for future development of more applications. The Company will continue to promote the "baseline" +
"customization" model, and enrich our product matrix, maintaining a balance between products and application
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Hikvision 2022 Annual Report
needs. Combining multi-dimensional perception with AI and big data, we have created tens of thousands of products
from detectors to system solutions that cover more than 300 scenarios across over 70 sub-sectors in 10 industries.
These technologies, products and consumer needs promote one another through continuous changes, updates and
iterations, becoming a competitive driver of Hikvision's technological innovation.
The future of AIoT is the integration of user needs with AIoT technologies, devices, and systems. Their
growing ease of use and declining cost will make everything perceivable and linkable. Just as the World Wide Web
or Internet, IoT will not be mentioned anymore in the future because it will be the basic state of things, and people
will live in a new era created by AIoT.
2. Business Structure
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.
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
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Hikvision 2022 Annual Report
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.
3. Product Family
3.1 Hardware Product Family: Edge Node Comprehensive Perception + Edge Domain Scenario Intelligence
+ Central Intelligent Storage and Computing
Hikvision has been expanding its means of perception, enriching scenario-based product options, and
improving full system processing capability, with flourish development in its multiple-echelon products such as
edge nodes, edge domains and cloud-center devices.
3.1.1 Edge Node Products: Comprehensive Intelligent Perception and Enriched Product Mix
Hikvision has many types and groups of edge nodes products, continues to complement the product family,
integrates multi-dimensional perception means, and optimizes product design considering scenario-based needs,
providing a solid ground for intelligent applications of cloud-edge fusion, IoT-information network fusion, and big
data-AI fusion.
1) Front-end Cameras
Cameras have shifted from conventional video surveillance terminals to the most important AIoT terminals in
the Internet of Everything. Focusing on visual technology, Hikvision enhances multi-dimensional perception
capabilities, continuously expands application scenarios, and achieved the digitization of everything with
comprehensive perception means to build the infrastructure of intelligent applications.
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Concentrating on vision to improve image application experience
Hikvision stays focus on the research of optical imaging area, with an aim to address such problems as the
limited view of traditional cameras, unclear imaging at night, and limited intelligent applications, continuously
strengthening the product concept of ultra-HD, full-color and panoramic details, enriching product mix, and
upgrading intelligent applications.
In order to expand the all-weather field of view and reduce the safety hazards in the monitoring blind spot, the
Company created the technology of multispectral fusion panoramic stitching to achieve 190°low distortion and
20:9 wide format, making the color bending more natural.
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In order to improve the adaptability of the camera to the night-time environment, the Company strengthened
the zoom full-color capability, to achieve constant large aperture zoom with a large focal length, stabilize light
amount, and ensure clear and bright picture colors. In order to solve the problems of uneven brightness and poor
permeability of traditional fill light, the Company has developed its own "squamous lens fill light" technology,
where the light is reflected by the scaly reflector, and the light field is uniform and soft, which reduces diffuse
reflection caused by the dirt of the transparent dome, and greatly improves the effect of fill light.
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In order to solve the problems of slow zoom speed, unclear focus and shaking during focusing process in wide-
range and long-distance application scenarios, Hikvision launched the innovative focus technology, which adopts a
method that is driven by the magnetic levitation lens to complete zoom + focus in 0.1 seconds, greatly improving
zoom and focus speed of lens.
Enhancing perception and increasing multi-dimensional perception means
Based on visual perception, Hikvision integrates multi-dimensional perception methods to broaden perception
boundaries and expand forms of intelligent application.
There are problems such as poor lighting conditions and complex environment in railways, ports, airports and
other scenarios of open environment, which limit the range of video detection in intelligent applications such as
target intrusion and recognition, and are prone to the impact of rain and fog. More accurate kilometer-level intrusion
detection, ship identification and other intelligent applications may be achieved by integrating the radar perception
module, the deep technology fusion of phased array radar and visual perception, and integrating environmental
visualization and detecting multi-dimensional information such as target location, distance and speed.
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In scenarios prone to geological disasters such as slopes, dams, pole towers and tailing reservoirs, in order to
solve problems such as hard to monitor, low monitoring accuracy, and monitoring is not visible when detecting
deformation such as subtle offset and settlements, Hikvision launched a displacement observation dome, which
integrates satellite positioning technology with video technology and high-precision analytical algorithm to achieve
millimeter-level 3D accurate perception of the monitoring subject, provides 24/7 long-term monitoring, improves
the perception efficiency of geological disasters caused by deviation and settlement, and helps with disaster
monitoring and early warning and emergency management.
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Scenario adaptability and intensive exploration of segmented scenario demands
Hikvision merges engineering thinking with technology, and develops cameras based on different scenarios,
built for real-life usage, with optimized structure, imagine, intelligence, maintenance, and security.
One example is explosion-proof products. Hikvision has expanded from traditional explosion-proof for factory
use to explosion-proof for mining use, and application scenarios from petroleum and petrochemical to underground
coal mine, enriching the product portfolio to adapt to complex demands of multiple scenarios and creating scenario-
based product solutions. For example, in terms of explosive, dim and harsh environment of underground coal mines,
Hikvision launches an intrinsically safe camera with self-cleaning function for mining use, which is at an
intrinsically safe explosion-proof level and can realize underground ultra-HD full-color imaging. Additionally, with
the air filtration technology and self-cleaning system equipped, it can effectively remove coal dust and ash and other
particles, keep the lens clean and the picture clear, thus to ensure safety production and facilitate to build intelligent
mines.
In the hydroelectric meter reading, production quality managing of coins, cracks monitoring of historical sites
and other scenarios that require close-up observation, there are issues such as unclear focus, interference of
complementary light reflection and others. Hikvision cameras under macro series adopt VCM voice coil motor to
realize automatic focusing and polarization fill light, achieving 10-50cm close-range color imaging at all weather.
To fulfill the need of real-time monitoring in cold storage and low-temperature scenarios such as agricultural
product storage, fresh food logistics, and pharmaceutical storage, Hikvision cryogenic cameras adopt lens self-
heating, glass defogging and other technologies to solve the problem of lens fogging caused by the temperature
difference when opening and closing doors, which ensures clear pictures and achieves the safety management of
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cold storage materials.
2) Smart Traffic and Mobile Devices
Smart Traffic: Hikvision’s product portfolios with eco-friendly capture system keep iterating. The Company
participates in the formulation of relevant industry standards, and promotes the whole society to address the issue
of light pollution. In multi-dimensional perception products such as radar video, Hikvision integrates the multi-
dimensional perception capabilities of video, radar, RFID and ETC, and widely applies products in traffic
management, perimeter protection, industrial measurement and other fields.
In the field of traffic management, the Company facilitates digital pathway and improves comprehensive road
management and control capabilities. The Road Pre-alarm Safety Series products, provide 24/7 roadways
surveillance and proactive risk alarm, with an emphasis in traffic regulation enforcement and road surveillance in
order to provide security early warnings for traffic participants and reduce road safety hazards. The Radar-Video
Assisted Vehicle Detector offers 24/7 precise, remote monitoring of roadways, high-precision road information
collection, together with proprietary smart signal systems and "weight balancing" adaptive algorithms, constituting
a holistic self-contained signal control system that spans diagnostics, simulation, operation, evaluation and
adjustment. Meanwhile, more effective scenario-based signal control can be achieved by combining with more
signaling devices such as variable lanes device. In the field of perimeter protection, the 3D spatial fusion technology
with long-range, ultra-long-range radar and video is used to help the intelligent management of water traffic vessels
and the control of railway perimeter. In the field of industrial measurement, 3D modeling of data collected by laser
and millimeter-wave radar are used to measure the volume of the stack.
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Entrance and exit parking products: Hikvision is extensively involving in the application of refined
management of parking lots and parking spaces, and its products cover entry/exit, parking lots, street parking and
others. The Company applies eco-friendly dual-sensor technology to cameras at entrance and exit to reduce light
pollution. The technology of super-resolution image intelligent restoration is applied to roadside high-position
cameras to effectively improve the detection and recognition rate. By improving the intensive level, intelligent and
digital capabilities of the system, the Company keeps iterating the product portfolio such as the Guardian Series
(snapshot and display all-in-one machine) and the Roadside Parking Camera Series, enriching the product mix and
improving the scenario-based solutions. The Company further expands channels and enhances service capabilities,
while digging deep into urban parking business management to help improve urban parking efficiency and the
parking experience of the citizens.
Mobile terminal products: Hikvision focuses on mobile law enforcement, mobile operations and other fields.
The Company adopts video stabilization technology to launch forward recorders, applies intrinsically safe
explosion-proof technology to launch explosion-proof recorders, integrates low-power consumption technology
with ergonomic design to launch helmet-mounted cameras, operation assistants and other operate-wearable products
to facilitate mobile visual management scenarios such as mobile law enforcement, production safety management,
construction site inspection, offering financial services. Based on barcode/character recognition technology and
leveraging customized operating systems, the Company has launched a series of mobile intelligent data terminal
products such as field-based full-screen model, button version, 5G model, industry-specific PDA, supplemented by
application mall, device cloud management platform and other services, to provide data collection, scenario-based
intelligent identification and analysis capabilities for manufacturing, express logistics, retail e-commerce, medical
and health, public services and other industries.
3) Access Control, Intercom and Alarm Products
Hikvision’s access control, intercom, channel, alarm and other products focus on integrated management of
spatial scenarios, business development and innovation, and together with industry applications, have formed
scenario-based solutions covering access control, attendance, visitors management, elevator control system,
financial checkout, inventory management, building intercom system, medical intercom system, turnstile,
emergency alarm, intrusion alarm, perimeter prevention, and so on.
Taking "MinMoe" as the core, Hikvision access control products focus on the research and integration of basic
technologies such as multi-modality, break through traditional infrared solutions, and integrate radar, laser and other
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technologies to create global receptive field. The Company develops intensively small scenario-based solutions,
polishes specialized products for segmented scenarios, and has launched novel products such as all-in-one intelligent
turnstile series and distributed intelligent access control series, providing customers with one-card/one-code and
more diversified solutions for all scenarios.
Hikvision’s visual intercom products are committed to optimizing interaction, improving sound quality,
reducing latency and upgrading intelligent applications on the product side, promoting the fusion of intercom
systems, smart homes, alarm systems and others, and constantly enriching their application in multiple vertical
industry scenarios such as residential building, hospital, prison, and finance building.
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Hikvision has invested heavily in wireless radio frequency, detection optics, low-power design and other
technical fields, integrating the application of displacement, microwave, infrared and other perception technologies,
expanding the application of voice intelligent analysis, and continuously improving the comprehensive
competitiveness of its product technology. In the field of intrusion alarm products, the Company developed a new
generation of wireless and hybrid intrusion alarm systems, which further promotes cloud-based comprehensive
alarm services, enriches scenario-based applications, and creates value for customers. In the field of perimeter alarm,
the Company further iteratively expanded its product line, and launched a series of products such as stepless voltage
regulation network-type intelligent fence and regional vibration detection product, to facilitate continuous expansion
of application in energy and chemical industry, cultural protection and other industries. In the field of emergency
alarm, the Company went deep into business applications and taking video intercom as the core, launched a series
of products based on voice intelligent recognition technology.
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4) Audio products
Industrial audio – identifying by acoustic imaging, improving the efficiency of equipment operation and
maintenance management
Hikvision has core technologies such as acoustic imaging, acoustic wave recognition and sound source
localization. Focusing on industrial inspection, intelligent manufacturing and other fields, it deploys industrial audio
products such as industrial auscultation microphones and online acoustic imagers, and provides new equipment
online operation and maintenance and remote inspection methods to improve equipment operation and maintenance
management efficiency.
Industrial stethoscope could be deployed with zero-sample. By collecting vibration sound through bone
conduction sensor, or discharge sound through ultrasonic sensor, it can extract the machine running voiceprint. It
takes only 1 hour of normal audio data to generate the model autonomously and achieve real-time monitoring of the
running status of pump machines, electric machines, wind turbines, conveyor belts, power distribution cabinets and
other machines and early warning of abnormal faults through AI model comparison, which improves the reliability
of the system.
Through the integration of microphone arrays and camera components, the online acoustic imager locates the
sound of the monitoring target in the frequency band by adopting the sound source localization algorithm. It can
achieves sound visualization in the form of color cloud map, and displays the distribution of sound sources in the
visual field, which can be used for faults location and online real-time sound monitoring of partial discharge, gas
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leakage, equipment abnormal noise and other faults in industrial scenarios such as transformer substations, wind
turbine cabins and chemical plants.
Conference Audio - Clear and immersive sound to help provide a high-quality conference interactive
experience
Hikvision has core technologies such as acoustic array, AI noise reduction, multi-source positioning, ultra-low
latency algorithm and other core technologies including sound source acquisition, transmission, and demodulation.
Hikvision has professional acoustic laboratories, various acoustic testing instruments and equipment, professional
acoustic simulation software, as well as the ability to develop, design, manufacture, simulate and test audio signals
of audio products including audio unit, audio cavity, audio circuit and audio system. The Company provides audio
products for large, medium and small scenarios, such as plug-and-play microphone speaker series, easy-to-install
Hi-Fi conference speakers, medium and large professional conference products kit and other products, which adapt
to the conference sound field, improve the user experience of remote interaction, and bridge the communication
distance for off-site meetings.
In particular, the Hi-Fi conference speaker is specially designed for the conference system, which can be
flexibly installed and deployed. Equipped with a low-frequency passive radiation cavity, the tones generated by Hi-
Fi speaker unit is clean at the middle and high frequencies, mellow at the low frequencies. Specially, the internal
structure uses a cushioning design to further reduce the internal resonance noise and provide high-quality audio for
the conference room.
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5) Sensors
Hikvision’s distributed positioning optical fiber sensors "sense" and "transmit" external signals simultaneously
by using light waves as the carrier and optical fiber as the medium. Compared with traditional sensors, distributed
positioning optical fiber sensors have the advantages of high positioning accuracy, high detection sensitivity, long
detection distance, good electrical insulation performance, strong anti-electromagnetic interference, curvable shape,
small size, corrosion resistance, among others, and can detect temperature, pressure, vibration, displacement, speed,
voltage, current and other physical quantities online in real time.
Distributed positioning vibration optical fiber - interconnected vision and precise positioning improve the
overall utilization rate of the monitoring system
Hikvision’s positioning vibration optical fiber quantitatively restores the vibration signals and accurately
locates disturbance positions by adopting the principle of Rayleigh scattering and patented demodulation technology.
With AI acoustic wave recognition algorithm, it effectively filters out false alarms to achieve intelligent
classification and early warning. After the vibration optical fiber captures the disturbance signals, the cameras can
be linked for cross-check, which can not only improve the utilization rate of the cameras, but also help cover the
blind spot of the cameras and improve the overall operation efficiency of the perimeter system. The products are
widely used for perimeter prevention of important places such as valve chambers, oil and gas pipelines, petroleum
refineries, cultural and museum buildings, railway perimeters, telecom optic fibers, as well as the application of
early warning for external damage prevention of long-distance pipelines and optical cables.
Distributed positioning auscultation fiber – Remote monitoring improves the inspection, operation and
maintenance efficiency of conveyor belts
Adopting the principle of Rayleigh Scattering and sensitized industrial diagnostic detection technology,
Hikvision positioning auscultation fiber restores acoustic signals, accurately locates the faults locations, while
detecting the equipment faults and early warns by relying on intelligent acoustic algorithms for single-classification
industrial diagnosis. All sounds are generated by vibration, and are propagated by the form of sound waves. So
optical fiber help remotely detect the faults of conveyor belts faults by restoring sound waves based on vibration
detection. Thus, manpower could be saved since site inspection is not necessary and operation and maintenance
efficiency is improved. The products can be widely used to detect abnormities of heavy-duty belt conveyors in a
variety of scenarios including coal mining, thermal power generation, building cement, iron and steel metallurgy,
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ports and so on.
Distributed positioning temperature measurement optical fiber – 3D temperature measurement, visual
display, ensuring the safety of industrial production and manufacturing
Hikvision’s temperature measurement optic fiber products obtain the temperature spatial distribution
information leveraging the principles of Raman scattering and optical time-domain reflection. For key devices such
as lasers, optical switches and detectors, the Company has significant technical and cost advantages in terms of
hardware designing, manufacturing, material matching and intelligent algorithms. The front-end optical fiber does
not need power supply, and can also resist high-voltage and strong electrical interference, which is intrinsically safe
without risk of explosions and suitable for flammable and explosive scenarios. The optical fiber material is
characterized by high deflection, small wire diameter (<3mm), which is easy to install and can be easily laid
according to the shape without network and electricity. The product is suitable for internal temperature measurement
in scenarios with limited spaces such as battery cell racks, hazardous chemical racks, switch cabinets, power
distribution cabinets, energy storage cabinets, and long-distance temperature measurement of linear objects such as
power transmission cables, oil and gas pipelines, thermal pipelines, which is widely used in new energy warehouses,
thermal pipelines, power pipelines, oil and gas storage tanks and other scenarios.
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3.1.2 Edge Domain Products: Further develop intelligent business scenarios and expand AIoT applications
Hikvision constantly deepens the application scenarios of domain-level products, and makes breakthroughs
and innovations in industry applications. With the videos being upgraded from high-definition to ultra-clear image,
the in-depth development of AI technology and the integration of intelligence and Internet of Things, Hikvision
achieved multi-dimensional data transmission, storage and fusion applications, making the products more in line
with the development of the IoT era. The company is increasing its openness and gradually building an open
ecosystem for AIoT to help customers upgrade their business.
1) Integrated Devices for Intelligent Applications
DeepinMind NVR, Core Product for Edge Domain: In 2022, Hikvision DeepinMind NVR kept improving
user experience, developing innovated AI technology, strengthening traditional video services, deepening intelligent
industry businesses, and rapidly upgrade the product systems.
Hikvision keeps promoting "inclusive AI" and enriched lightweight intelligent products. In 2022, Hikvision
adhered to the trends of high definition and intelligence, releasing the 8K NVR and leading the industry in the
development of high-definition. It features HD recording, lightweight AI applications, multi-dimensional perception,
and on-demand data aggregation, which is intelligent, cost-effective and easy to use. Hikvision DeepinMind achieve
"algorithm self-learning", greatly improving the accuracy and automatic evolution of applications such as perimeter
prevention, and facilitates intelligent prevention upgrades.
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Hikvision delves into intelligent industry business, gains insight into customer needs, and enhances product
capabilities. Focusing on the intelligent application of the industry, the Company has launched a variety of
intelligent product packages for scenarios such as cleaner kitchens, intelligent construction sites, intelligent
emergency management, intelligent power grid, and AI inspection DeepinMind fusion server to meet the intelligent
upgrade needs of the industry. Hikvision continued to improve DeepinMind computing, and achieved continuously
iterative in new technologies such as AI chip virtualization, algorithm orchestration, and algorithm self-learning.
Hikvision adheres to the concept of open cooperation, and establishes extensive ecological cooperation system while
providing the AI algorithm training capabilities and the HEOP protocol to the ecological partners.
AIoT gateway——Multi-Dimensional Data Fusion Products: AIoT technology is developing rapidly, and
the data is richer and diverse. Hikvision domain-end AIoT products support data aggregation, data forwarding, data
fusion, intelligent analysis, and comprehensive application, which fit for small and medium-sized scenarios and
distributed scenarios. It supports application closed-loop of multi-dimensional perception data, and create value for
customers with data.
2) Smart Display and Video Conference Products
Hikvision smart display and video conference products leverage screen display, touch interaction, video
conference and other technologies to create intelligent terminals and systems for the digital era. The products
integrate various media in physical space to provide integrated solutions for smart conference rooms, smart
classrooms and other scenarios through display, viewing and interaction.
Smart Display Products: In 2022, the performance of smart display chips have been greatly upgraded, and
audio and video effects have been significantly improved. All series of conference flat panel chips have been
upgraded, and the comprehensive computing performance, the screen rendering capability have been significantly
improved, which perfectly support the mainstream video conference software. The enhanced pickup ability of built-
in microphone supports up to 15m sound pickup, intelligent sound screen adjustment and multi-angle directional
sound pickup. It also provides conference speaker mode and standard speaker mode in wall-mounted and mobile
bracket installation scenarios. The conference mode focuses on the clarity and comfort of the sound, while the
standard mode focuses on sound fidelity and sound quality. In terms of smart blackboards and interactive all-in-one
machines, the chips have been upgraded, while the touch response speed and the interaction fluency has been
significantly improved. The Company upgraded the visual angle and image quality of the built-in camera, so that
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the classroom can be viewed completely and clearly. The speaker is all-roundly upgraded to ensure the coverage of
every corners of the classroom, while the sound quality is optimized for specific scenarios such as listening tests to
ensure that the sound is highly restored. For other related devices such as microphones and high-speed scanners, the
Company improved the product compatibility to facilitate efficient teaching.
Video conference products: In 2022, the product of video conference system was completely upgraded. The
whole system was upgraded to 4K ultra-high-definition resolution and integrated with microphone array and
intelligent noise-canceling algorithm, supporting intelligent functions like intelligent voice, real-time captioning,
electronic nameplate, speaker positioning and provides users with a good remote conference experience.
Conference Management Software: In 2022, the rapidly iterated software version and gradual expansion of
application scenarios accelerated the formation of the intelligent conference room solution. The conference
management platform takes the conference flat panel as the core, and is equipped with the peripheral conference
room devices, combined with the business applications that control the entire meeting processes. The conference
management platform supports flexible switching between multiple scenarios, which can automatically control the
conference devices and the parameters. Moreover, it supports the connections between the online and offline
conference, and can connect with Tencent Meeting and EZVIEZ Conference ( 萤 石 易 会 ). The conference
management platform supports the management of multiple types of scenarios such as general meetings, video
conferences, reception meetings, and paperless meetings, leading to the initial formation of the intelligent
conference room solution.
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3) Intelligent Video Transmission Products
Network nodes are the nexuses and hubs of Internet of things, and Hikvision intelligent video transmission
products can handle up to 5,000 video channels, providing stable and reliable network support for various scenario-
based applications. In 2022, the Company expanded the application of intelligent video transmission system in
scenarios such as highways, ports, primary and secondary schools, energy, scenic spots, enterprise zones, and
commercial complexes. In the highway scenario, relying on the ring network architecture, the reliability of network
can be effectively improved as the network topology manages the cameras of toll stations, road sections and service
areas. In primary and secondary school scenario, the campus network and security network have achieved unified
construction and centralized management, thereby shortening the construction period and saving costs. In the scenic
scenario, industrial switches can operate stably in environments with high humidity and large temperature
differences, and the high speed data transmission of the wireless bridge can reduce the wire installation and
maximize the protection of the natural ecology. In the future, the Company will keep expand its applications to help
customer reach a smart way to operate and maintain the network.
3.1.3 Cloud Center Products: A Solid Ground with Steady Improvements in Product Capabilities
With the advent of the AIoT era, digitalization has become a trend. The amount of data computing has increased
significantly, resulting in an increasing demand for basic IT infrastructure. Hikvision continues to improve its
central computing and storage capabilities, with a rich product portfolio such as general computing server,
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intelligent computing server, big data server, converged storage, large-screen display and control, etc., providing a
complete AIoT-based IT solutions.
1) General Computing Products
Hikvision has a variety of generic server products, providing X86/ARM and other products of mainstream
technology routes. It has launched various forms of server products from edge to center, including edge servers,
general-purpose workstations, tower servers and rack servers to meet the demands of the IoT and IT markets,
providing high-performance, high-reliability, and high-security computing infrastructure for various industries.
2) Intelligent Computing Products
Intelligent servers provide intelligent computing capabilities required by AI, big data, and platform services.
Hikvision's products are constantly upgraded and innovated. Taking central computing as the major scenario, it
focuses on improving the performance and stability of the product as a whole, continuously improves the software
and hardware ecology, and has built a diversified technical route, which ensured good compatibility and cost
performance, as well as product competitiveness. The Company adopts new technologies such as self-learning and
large model to continuously improve the accuracy of algorithms, while improving the ability of algorithms to solve
complex scenario problems, forming a complete algorithm system.
3) Universal Storage Products
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Over 18 years of accumulation in R&D, Hikvision’s storage products cover various business scenarios, forming
a complete product system of file storage and block storage. Based on its extensive understanding of different
scenarios, it has formed a dual system of server architecture and multi-controller architecture supported by the
hybrid flash (HDD and SSD hybrid storage) and all-flash (full SSD storage) technologies, which better supported
the application of fusion storage, distributed storage and cloud storage, and greatly improved the capacity to
undertake private and public cloud solutions.
4) Fusion Storage Products
In order to meet the storage needs of IoT's multi-dimensional perception data, Hikvision has launched a multi-
dimensional perception data storage solution based on powerful video stream storage capabilities. With a more
optimized and more suitable storage model for business applications, it ensures the fast, safe and effective storage
of various non-standard format data of AIoT. Products are widely used in various industries, and in the research
report released by IDC1, Hikvision's stream storage products ranked in the forefront in terms of sales.
Based on its profound understanding of massive data storage such as videos and images, Hikvision released a
video cloud storage system based on stream storage technology, providing a storage resource pooling solution for
large-scale image applications. At present, it has covered multiple series of products in different scenarios from
stand-alone to cloud-based solutions, from small disk locations to high-density solutions, and from non-standard
scenarios to standardized computer room applications, which satisfies the growing data storage needs.
5) Large Screen Displays and Control Products
Hikvision’s display products, powered by video processing technology, image restoration technology, image
augmentation technology, ultra-high-definition technology, and smart interaction technology, is widely used in
scenarios such as monitoring centers, command centers, cloud center and big data center. The Company continues
to invest in Mini LED, COB and energy efficient products, improving heat dissipation with innovations such as flip
installation and common cathode technology, and expanding its presence to conference room scene. Focusing on
better color consistency and higher definition resolution, the Company further developed application scenarios in
the field of professional display and commercial display, and provided cost-effective display products and display
solutions.
For scenarios such as command center, monitoring center, and conference display, Hikvision launched the third
1 Data from IDC China Quarterly External Disk Storage Market Tracker (Q2 2022).
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generation of video integrated platform products and splicing controller to improve the efficiency of command,
scheduling and business display. For the command center and monitoring center scenarios, the third generation of
video integrated platform adopts brand-new high-speed bus system architecture, which has the real-time video data
computing processing capabilities for high frame rate, high bit depth, wide color gamut, and high dynamic, applying
Hikvision's leading video technology to achieve complete image display effect. For the conference display scenario,
the high-definition audio and video technology, intelligent interaction technology, IoT perception technology and
3D display technology applied in the third generation of splicing controller provide users with an immersive
interactive experience.
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: The ecosystem of "two pools, three libraries, seven platforms and one
environment" was continuously enriched and improved. "Two pools" refer to computing storage resource pool and
data resource pool, where the computing storage resource pool contains cloud computing platform and cloud storage
platform, and the data resource pool contains the products related to basic big data platform. "Three libraries" refer
to component library, algorithm library, and model library, respectively supporting the management and reuse of
components, algorithms and models. "Seven platforms" refer to the resource management and scheduling platform,
intelligent perception networking platform, AI open platform, fusion of perceptions platform, iDatafusion platform,
intelligent application open platform, and integrated operation and maintenance service platform, providing
intelligent applications with storage and computing resource scheduling, equipment access and networking,
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 corresponding to
the physical world. It supports the storage, correlation and analysis of information collected by perception
technology and other data in the same environment, and supports the configuration of visual applications and the
association with data in the case of low-coding.
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General software platforms: Provides general software functions across multiple 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 virtualization
platform, VR panoramic application platform, integrated communication application platform, intelligent large-
screen management platform and portable law enforcement integrated management platform.
Industry-specific software platforms: Hikvision, serving over 70 sub-industries, has gradually built 110
industry-specific software platforms. Taking the traffic control industry as an example, we provide platforms such
as 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 management platform, the
smart traffic signal control platform, the highway traffic safety monitoring and management platform, the smart
check station platform, and the intelligent inspection platform for driving control.
3.2.2 Intelligent Algorithms: General Algorithms + Industry-specific Algorithms
Hikvision has accumulated a large number of video artificial intelligence analysis algorithms in the process of
serving various industries which can be divided into general algorithms and industry-specific algorithms.
General Algorithms: Algorithms that can be used for the development of intelligent applications in multiple
industries. For example, intelligent scenario inspection algorithm, image and text recognition algorithm, video and
image quality recognition algorithm, 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 that developed for industry-specific application demands. For
example, illegal occupation detection, illegal construction detection, and human/vehicle/material detection in the
construction process for state-owned land resources; urban appearance detection and street order detection for
municipal management; safety helmet wearing detection, hot operation detection, labor suit detection, overrun
detection for safety production and emergency management; vessel detection, floating debris detection, fishing
detection for water environment management; illegal passenger boarding detection and driving behavior detection
of drivers for key vehicle supervision; chef's hat, uniform and mask inspection for "Cleaner Kitchens"; fire escape
occupancy detection for community fire safety; abnormal garbage sorting detection for community garbage
classification management.
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3.2.3 Data Model: Industrial Business Data Model
Hikvision provides big data application services for various industries 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 industrial business data models, which can be managed by the model library, and can be
replicated and optimized in other similar application scenarios.
Taking transportation industry as an example, we provide an highway traffic situation analysis model, 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 OD 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.
System Operation and Maintenance Services: Hikvision provides system operation and maintenance
services to certain customers. For systems and equipment that have exceeded the warranty period, the team will
offer professional system operation and maintenance services.
Data Engineering Services: Hikvision delivers data engineering services including IoT resources
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 300 cities, and its coverage scope is expanding continuously. The number of users of business
operation platforms for fire protection operation, intelligent community operation, garbage classification intelligent
management, safety risk monitoring and pre-warning, intelligent elevator management are also increasing.
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4. Industry Applications
Hikvision’s three domestic business groups aim to serve the public service sector, enterprises and institutions,
and small and medium-sized businesses respectively, providing relevant solutions according to customers’
differentiated needs and enabling digital transformation for customers. The Company’s international business is
country-specific, providing overseas customers with local support for the entire process from R&D, manufacturing,
logistics and services, and continuously improving its global marketing service network.
4.1 Public Business Group (PBG): Enhance Product and System Capabilities to Boost Digital Government
Transformation
4.1.1 Overview
The construction of digital governments has been accelerated during the 14th Five-Year Plan period in China.
As IoT perception, AI, big data and cloud computing and other technologies are increasingly used in this process,
the importance of data and AI governance has attracted growing attention, and enhancing data and AI governance
capability has become an important part of the construction of digital governments. Digital government
transformation shows 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 with data and AI, and promoting construction through application."
Combining AIoT technology with years of profound understanding of the needs of users in the public service
field, Hikvision continues its efforts in five industrial businesses, security, traffic, ecosystem, governance and
service. Moreover, the Company integrates product and technology capabilities to support the data and AI
governance of governments at municipal, county, town, village and community levels. With the philosophy of "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, the Company serves to empower digital
government transformation through the comprehensive expansion of intelligent businesses in public security,
transportation, urban governance, livelihood services, ecological and environmental protection, etc.
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4.1.2 Core Technologies: Strengthen Basic Capabilities of AIoT, Expand Industry Applications, and
Consolidate Industrial Services
In response to the urgent need for digital government transformation, Hikvision continues to strengthen
urban-level basic capabilities of AIoT such as Perception Base, Intelligence Base, Data Base and Empowering
Platform. The Company intensifies its efforts in various sectors and expands applications across industry
segments, developing and consolidating its industrial service capabilities.
1）Basic capabilities of AIoT
Perception Base: Hikvision creates a scientific deployment system for the evaluation and planning of urban
perception capabilities based on the perception needs of business scenarios in industry segments. The Company
continues its efforts in full-stack spectrum and multi-dimensional perception, and expands its product portfolio to
support universal intelligent connection between various existing and new perception resources in different
industries or cities and provide rich and vivid urban perception data for industry applications.
Intelligent Base: Utilizing core AI capabilities such as intelligent identification, intelligent scheduling and
intelligent research and judgment, Hikvision enriches and optimizes the intelligent algorithms adapted to various
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industrial scenarios, and provides unified management and scheduling of intelligent resources, scenario-based
arrangement of intelligent tasks, strategy research and judgment to achieve intensive, efficient and accurate
extraction of valuable information about videos and images.
Data Base: Hikvision supports the entire process from multi-dimensional data aggregation, data processing,
data governance, data mining and data service for different industries or cities. Furthermore, the Company improves
data quality through data cleaning, conversion and governance, explores data value using cognitive model,
knowledge graph and other technologies, and enables data publishing and sharing by means of data resource
directory, interface directory and push subscription.
Empowering Platform: Owing to the basic capabilities provided by Perception Base, Intelligence Base and
Data Base, Hikvision builds an empowering platform highlighting common construction, sharing and use. The
Company enables co-construction of locations, video sharing, algorithm co-management, capacity sharing,
computing power integration, and event co-governance across industries and departments through integration and
utilization of perception, intelligence and data resources of different industries or cities, empowering their quick
construction of intelligent scenario-based applications. Over the past year, the Fusion of Perceptions Empowering
Platform has been successfully used in more than 130 projects across 79 cities of 26 provinces in China, covering a
number of industries including smart city, smart transportation, smart water conservancy, emergency management,
urban management and ecological environment.
2）Industrial applications
Hikvision continues its efforts in different industry segments. With scenario-based AIoT capabilities, the
Company continuously expands scenario-oriented intelligent applications in various industries and promotes the
establishment of an entire business chain. The Company has sorted out more than 2,000 business scenarios,
developed more than 250 industrial solutions and improved more than 500 intelligent industrial applications with a
focus on public security, traffic management, transportation, urban governance, ecological and environmental
protection, livelihood services and other sectors. All these efforts are aimed at optimizing government's operational
mechanisms and construction modes, and providing strong support for modernized urban governance.
3）Industrial services
Combining a profound understanding of each industry with years of experience, Hikvision has continuously
consolidated its service capabilities in AI engineering, data engineering, business operation and system operation
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and maintenance. The Company has also established a nationwide professional service team to enhance the loyalty
of users.
AI engineering services: Hikvision provides users with scenario-based AI engineering services, including
personalized algorithm training, tuning of intelligent algorithms, tuning of correlation clustering, intelligent scenario
arrangement, event analysis, and event identification. The Company has provided AI engineering services for more
than 50 projects.
Data engineering services: Hikvision provides users with data engineering services involving multi-
dimensional perception data and business data, including IoT resource calibration, data probing, data governance,
data organization, and BI visualization analysis. The Company has provided data engineering services for 220
projects.
Business operation services: Hikvision has increasingly expanded the scope of business operation services
which provided based on Internet operation platforms, and it has covered a number of fields including
comprehensive urban operations, urban parking operations, firefighting operations, community security operations,
security inspection operations, and intelligent management of garbage classification.
4.1.3 Value Fulfillment
While deepening its understanding of business in public security, transportation, urban governance, livelihood
services, 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. In
addition, the Company has continuously expanded smart industrial services through the Fusion of Perceptions
Empowering Platform. It is committed to making cities smarter, society safer, transportation more convenient,
governance more refined, services more targeted, and the ecological environment more livable.
1）Smarter cities
In the field of smart cities, Hikvision focuses on governance with perception data and empowerment with
data and AI. The Company has optimized the urban perception networking system, promoted an organic integration
of multi-source data, and created an ecosystem of AIoT perception application with the goal of empowering multiple
businesses with data and AI. Utilizing IoT, AI, big data and other technologies, the Company has established a
governance network that is responsive, comprehensive, intelligent, efficient and collaborative, assisting in
developing an efficient, accurate, and smart urban digital governance system that makes the city smarter.
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Hikvision continues to optimize the Fusion of Perceptions Empowering Platform. Guided by the core
philosophy of "co-construction of different equipment, video sharing, algorithm co-management, capacity sharing,
computing power integration, and event co-governance," the Company cultivates unified video convergence,
catalog governance, algorithm management, arrangement and scheduling, and open sharing capabilities for cities to
meet the needs of visualized and intelligent applications across industries and departments.
In the area of primary-level governance, Hikvision provides a smart management platform which focuses
on the daily management needs of primary-level governance and realizes intelligent identification of violations
through products such as urban management dome cameras, intelligent access control, and intelligent fire protection.
Also, it provides primary-level workbenches, early warning, and comprehensive scheduling applications, gathers,
assigns and addresses events, and supports the development of primary-level governance capabilities. This platform
enables home safety warning for the elderly, school gate supervision, and fire safety control, helping to improve
primary-level service capabilities. Furthermore, the platform supports population management, rental housing
management, smart supervision of dump trucks, smart store management, and supervision of people throwing
objects from heights, helping to increase public management efficiency.
In terms of rural revitalization, Hikvision provides a management platform for digital villages. With the
support of rural revitalization policy, the platform enables digital planting, rural live streaming and other
applications for multiple scenarios including rural industries, ecological protection, rural governance, and rural
services, promoting the high-quality development of characteristic industries such as rural agriculture and tourism.
Moreover, the platform achieves management of straw burning prohibition, intelligent farmland protection, and
water environment monitoring, facilitating disaster prevention and ecological environment protection. The platform
is also used for rural appearance inspection, fire safety supervision, and comprehensive command and scheduling,
intelligently identifying and addressing uncivilized acts such as littering, and helping to improve the comprehensive
governance capacity of rural areas. In addition, the platform provides intelligent elderly care, digital radio, and other
applications that monitor the safety of elderly people living alone and enable convenient access to rural information,
driving the construction of rural service systems.
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
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at every moment. Meanwhile, the Company has continuously improved the product mix in X-ray, thermal imaging,
sound wave, radar and other sectors, achieving comprehensive perception of public safety elements.
Based on the capabilities of its intelligent video image 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.
Hikvision has enhanced all-round situational perception capabilities for public security by utilizing "perception
integration, computing integration, intelligence integration, data aggregation, application integration, and the
combination of operation and maintenance." Empowered by technology, the Company strives to escort 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, driving on 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. Also, it provides data applications for real-time severe weather
warning, traffic conflict warning, traffic accident portrait analysis, structural hazard analysis and dynamic conflict
analysis of the road network, road network safety optimization, research and judgment of suspicious vehicles and
overloaded vehicles bypassing, thus helping ensure a safe transportation environment. In 2022, the severe weather
warning system was improved to enhance the safety of the highway network. The structural hazard analysis and
dynamic conflict analysis of the road network were strengthened by providing professional suggestions for
organizational optimization based on the identification of road network hazards using static road network and
dynamic radar data as well as knowledge graphs in traffic engineering. Furthermore, the traffic safety intervention
system was enhanced by providing multi-tier deceleration capability for dynamic traffic flow based on perception
of road network safety events in addition to the traditional violation snapshot and intelligence board warning.
Hikvision provides vehicle sensing technologies to ensure vehicle safety, delivering collision warning,
panoramic view, blind spot detection and other applications for buses, passenger vehicles, freight vehicles and
online ride-hailing vehicles. The Company has served hundreds of transportation enterprises, contributing to vehicle
safety.
Hikvision delivers multi-dimensional perception capabilities to ensure road safety, providing perception, data
analysis and warning for scenarios such as road event detection, sharp road turn warning, and slope falling rock
warning to help reduce road safety risks.
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Hikvision provides intelligent application capabilities based on multi-dimensional perception, delivering
perception, intelligent analysis, and warning capabilities for security checks at airports, urban rail transit, and
railways. The Company has improved the efficiency of security check for many airports, urban rail transit, and
railway stations.
In emergency management, Hikvision provides an integrated solution for emergency management. To deal
with the production safety risks of hazardous chemicals companies, fireworks and firecrackers businesses, non-coal
mining enterprises, tailings ponds and other types of enterprises, the Company established an efficient system for
production safety monitoring and warning that enables data access and analysis, intelligent warning, hierarchical
push notifications, information backup and other applications to effectively address the supervision pain points of
users. For forest fires, floods, geological disasters and other natural disasters, Hikvision provides solutions such as
comprehensive monitoring of all elements, disaster warning, comprehensive risk assessment, analysis, consultation,
research and judgment of disaster progression, laying a solid foundation for disaster prevention and mitigation and
establishing a sound system for natural disaster monitoring and warning. For different kinds of sudden accidents
and disasters, the Company provides emergency command and dispatch capability, including key applications such
as on-duty management, emergency plans management, coordination and consultation, command and dispatch,
summary and evaluation, helping users to 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, bus priority, turning left from the
opposite lane, bottleneck control, pedestrian crossing and other intelligent control modes. The Company delivers
professional smart travel service capabilities such as city-level unified signal control, traffic situation research and
judgment, intersection problem diagnosis, event monitoring, digital intersections, traffic flow tracing, traffic
simulation, intelligent guidance, vehicle traffic management, real-scene command, information analysis,
information research and judgment, intelligent service research and judgment, key vehicle protection, and green
parking. Also, it provides the "Data and AI-Based Traffic Management Base" incorporating road network
computing, data computing and model computing. In 2022, signal machines continued to rank high in the industry
with annual sales of more than 10,000 units. A new "digital intersection" solution was launched to provide data
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research and judgment and dynamic warning capabilities apart from basic dynamic three-dimensional presentation
capabilities. The intersection problem diagnosis capabilities were improved by providing professional suggestions
for organizational optimization based on the identification of signal timing and traffic organization issues using
static road network and dynamic vehicle traffic data as well as knowledge graphs in traffic engineering
In highway 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. It also provides abnormality detection and data analysis capabilities for highway events and weather, as
well as visualized industry supervision capabilities for engineering construction and industry management. The
Company has served thousands of users in this area.
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,
blind spot warning for port machines and failure warning for production equipment, which cover "people, vehicles,
goods, machines and environment" and other elements. The Company has served 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,
smart operation, intelligent operation and 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 safer and more comfortable ride experience for citizens.
As for airport travel, Hikvision offers passengers convenient and intelligent parking guidance, automatic
parking, smart navigation display, paperless customs clearance, easy transfer guidance, ramp space management
and other applications in nearly 100 airports, helping to build a safe, green and intelligent airport.
4）More refined governance
In urban management, Hikvision offers a smart urban management platform that provides warning and
algorithmic scheduling capabilities for nearly 70 types of violations ranging from fixed locations to mobile
inspection and from a single scenario to a complex area through urban management dome cameras, urban
management panoramic PTZ cameras and intelligent analysis servers. The platform provides mobile intelligent data
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collection, intelligent violation inspection, urban waterlogging monitoring, command and dispatch, operation and
monitoring centers and other applications, helping to create a tidy and orderly urban environment.
In terms of municipal administration, Hikvision provides a smart municipal supervision platform with a
focus on municipal facilities such as manhole covers, garbage cans and street lights, as well as municipal events
such as waterlogging and road damage. The platform integrates problem collection, dispatching and handling, and
feedback and evaluation through the use of IoT devices including intelligent monitoring terminals for manhole
covers, water level cameras, and radar level meters, facilitating targeted municipal management services.
In terms of city appearance and environmental sanitation, Hikvision provides a smart sanitation platform
and a garbage classification and supervision platform for manual or vehicle-based sanitation operations, garbage
classification and other scenarios. The platforms enable supervision of manual or vehicle-based operations, garbage
classification management, yard operation supervision and other applications through the use of intelligent
transmission control units, garbage classification cameras, Intelligent Analysis DeepinMind and other equipment,
improving refined sanitation management capabilities.
As for law enforcement, Hikvision provides a comprehensive management platform for mobile law
enforcement with a focus on law enforcement event collection, law enforcement process recording, law enforcement
case area and other scenarios. The platform allows off-site collection of law enforcement events, management of
objects of law enforcement, command and dispatch, electronic evidence management, intelligent review and closure
of cases and other applications through the use of law enforcement recorders, law enforcement case terminals,
collection stations and other devices, helping to improve the effectiveness of comprehensive law enforcement.
5）More targeted services
In the field of government services, Hikvision provides a comprehensive management platform for smart
government halls with a focus on various government service halls, convenience service centers, and other scenarios.
The platform provides hall operation management, government information publishing, and electronic video
monitoring through the use of AR panoramic cameras, passenger flow monitoring cameras, and window service
management servers, helping to make government services more efficient and standardized.
In terms of market supervision, Hikvision provides management platforms such as elevator networking,
forklift supervision, and food safety networking. These platforms enable special equipment supervision, off-site
supervision of kitchens and other applications through the use of elevator monitoring cameras, intelligent forklift
supervision and analysis machines, and dedicated cameras for kitchens and other products, helping to improve
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digital supervision capabilities.
As for smart communities, Hikvision provides a comprehensive management platform that allows
supervision of people throwing objects from heights, electric vehicle safety management, street store management ,
elderly care services, smart property management and other applications through the use of dedicated cameras for
detecting people throwing objects from heights, electric vehicle detection cameras, urban management dome
cameras, intelligent access control, smart smoke sensors and other products, helping community services become
more effective.
With regard to elderly care services by civil administration departments, Hikvision creates systematic
solutions for homes, communities and institutions, featuring applications such as elderly security, smart nursing,
health monitoring and caring services through intelligent elderly care all-in-one machine, alarm box, fall detection
radar and other equipment, providing technology support for the safety of the elderly, intelligent and convenient
means for the smooth operation of geriatric nursing institutions, and service data support for civil administration
departments.
6）A more livable ecological environment
With the help of video, radar, thermal imaging, and hyperspectral and other multi-dimensional perception and
intelligent analysis technologies, Hikvision strives to build an ecological monitoring, management and service
system for natural resources, ecological environment, meteorology and other businesses, creating a more livable
ecological environment.
To help protect natural resources, Hikvision sets up an intelligent management platform for nature reserves.
Bi-spectrum thermal imaging, wildlife protection cameras, insect detection lamps and road cameras are combined
with animal identification, fireworks identification and other algorithms for applications such as wildlife monitoring,
forest and grass fire prevention, pest monitoring, human activity management, ecological live streaming, promoting
natural ecological protection as well as science popularization and education. The forest fire monitoring and 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 warning, fire research and judgment, fire disposal, sand
modelling, rescue force recommendation, disaster damage assessment, and other functions, and enhancing
comprehensive forest fire prevention and control capabilities. A smart monitoring platform for natural resources is
created to identify characteristic elements of suspected illegal activities through high-point intelligent cameras and
bispectral thermal imaging, etc., implementing applications such as farmland protection and supervision of illegal
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mining, thereby effectively enhancing natural resource monitoring and supervision capabilities. A cloud platform
for geological disaster monitoring is built to monitor rainfall, surface displacement, soil moisture content and other
factors through video GNSS2, rainfall gauges, soil moisture meters and other devices, achieving three-dimensional
and visual monitoring of geological disasters such as landslides, collapses and debris flows, and facilitating early
detection and elimination of geological hazards.
For the purpose of smart water conservancy, Hikvision provides an intelligent management platform for
river and lake management and protection. Through AI analysis for videos, 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, helping
to improve the long-term protection and dynamic control of rivers and lakes, revive the ecology of rivers and banks,
and create a beautiful environment. A smart safety management platform for water conservancy is set up to
achieve applications such as safety monitoring, equipment monitoring and intelligent inspection of dams,
embankments, water gates, and pumping stations through video GNSS, seepage and seepage pressure meters,
hydrological monitoring camera, thermal imaging, and inspection robots, etc., and integrate information on work
conditions and rain conditions with real-time panoramic AR images, thus obtaining real-time updates on safe project
operation and protecting 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. Comprehensive
monitoring and management platform for small reservoirs is formulated to protect the safety of small reservoirs
during floods. An irrigation area management platform is provided to offer functional applications such as water
measurement management and irrigation area safety inspection, improve water conservation capability of irrigation
areas, and facilitate the renovation and modernization of irrigation areas. A water plant safety management platform
is created to achieve safety management of water plants and secondary water supply pump houses through thermal
imaging, and industrial auscultation, etc., ensuring safe production of water plants and pump houses.
As for ecological protection, Hikvision provides a smart monitoring platform for the atmospheric
environment, using LiDAR, hyperspectral Fourier transform, thermal imaging, video AI and other technologies to
2 GNSS: Global Navigation Satellite System.
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achieve intelligent applications such as prohibition of straw burning, VOCs 3 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, thus helping to defend the blue sky. A smart 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 through the self-developed hyperspectral water quality monitor, providing water quality monitoring,
trend analysis, water quality evaluation, pollution traceability and other intelligent applications, helping users gain
an understanding of the status and changing trend of water environment quality and providing support for rapid
resolution of water pollution events. A water source monitoring platform is established to provide intelligent
applications such as water environment monitoring, entrance and exit control, and human activity monitoring
through hyperspectral water quality monitors, AR panoramic camera, bi-spectrum PTZ cameras, road cameras, and
intelligent sound columns and other equipment, supporting intelligent water source monitoring and ensuring
drinking water safety. A river or marine outfall supervision solution is developed to provide video surveillance,
water quality monitoring, online inspection and other intelligent applications, facilitating the supervision and
management of all aspects from receiving water and outfalls. A pollution source management and control solution
is offered to provide station visualization, AI-based intelligent supervision, converged communication and other
intelligent applications, and intelligently identify illegal pollution discharges or falsification, promoting off-site law
enforcement concerning pollution sources. A smart 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 and disposal through such technologies as IoT, video AI and big data. Dynamic data collection and
intelligent analysis and 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 a national
meteorological live image capture, transmission and management system, realizing effective integration and on-
demand sharing of live videos from national and provincial observation stations and field research groups. A safety
management system for weather modification (artificially modified weather) operations is established to enable
intelligent control of key sites, and coordinated command between superior and subordinates, thus improving the
3 VOCs: Volatile Organic Compounds.
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safety supervision capability of weather modification operations. An intelligent meteorological observation system
is built for the intelligent observation of cloud cover, cloud shape, visibility, snow cover and other meteorological
elements by means of sky imagers and intelligent meteorological observation cameras and other dedicated
equipment, taking meteorological observation to the next level. An management platform for unattended
observation stations is established to enable prevention and alarming and video tracking using radars, videos and
other equipment, achieving 24-hour intelligent guarding of observation sites.
4.1.4 Outlook
As the construction of digital economy, society and governments gains speed, IoT perception, AI, big data and
other technologies continue to find applications in cities and industries, gradually fulfilling their value. The
application of ubiquitous security has expanded from public security to security control needs in various fields
including public areas, municipal administration, transportation, resources, and production in a broader sense. Its
application in a single industry has been gradually brought to a new level with growing demand for integration and
empowerment based on all scenarios, all weathers and all-round perception. The picture of a smart city is
increasingly clearer, transforming from "all operations via one network" to "unified management via one network",
from "Internet +" to "intelligent +", and from "scenario intelligence to "industry intelligence."
With a user-centered approach, Hikvision seeks to work with partners in the AIoT sector such as research
institutes, product providers, algorithm vendors, independent software developers, system integrators and product
distributors to create a closed-loop ecosystem that covers the entire value chain from technology, products to
solutions and services by understanding the core needs of users. Moreover, the Company will continue to promote
the upgrading of products, systems and services, while providing high-quality technologies, products and services
to industrial users in the public service field.
4.2 Enterprise Business Group (EBG): Promote Innovative Development of Businesses through AIoT
4.2.1 Overview
Based on AIoT technology, Hikvision offers better industry insight and actively explores digital application
scenarios. In 2022, Hikvision built solution capabilities around two core business areas, "safeguarding enterprise-
wide security " and "enhancing asset operation efficiency," while creating digital transformation solutions for key
application scenarios such as enterprise safety production, people and vehicle safety management, integration of
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park security and fire protection, enterprise emergency command, operation efficiency improvement, equipment
and facility management, good and material management, and smart space management.
4.2.2 Core Technologies: Consolidate AIoT Base and Enhance Value Delivery
Hikvision builds an AIoT-based product and solution system powered by multi-dimensional perception, AI,
low-code, cloud services and other technologies. Multi-dimensional intelligent perception products are used to push
the boundaries of perception and generate a variety of perception data, while AI engineering services aim to reduce
AI empowerment costs and enable fast delivery for partners. Moreover, Hikvision Huipin Application
Empowerment Platform is utilized to support the rapid launch of digital applications enabled by low-code
technology, whereas Hik-Cloud Platform is established to provide standardized industry applications and serve
more industry users.
1）Continuously push the boundaries of perception with a multi-dimensional perception product mix
Hikvision continues to improve the multi-dimensional perception products mix using AIoT technology. The
Company has launched perception products to enhance universal perception capability, while strengthening scenario
adaptation capability and creating diversified product forms to meet the needs of multivariate scenarios.
Hikvision integrates a variety of perception technologies to further improve its product mix. Existing products
include a millimeter wave imaging radar for volume measurement of stacked materials, which realizes accurate
measurement of raw material reserves; an ultraviolet imaging PTZ camera that can accurately detect electric arcs,
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monitoring abnormal discharge of electric power equipment; a gas cloud imaging PTZ camera based on spectral
imaging technology, which detects gas leakage in production environments; auscultation optical fiber that supports
equipment sound monitoring for timely detection of abnormal operation of belt rollers; optical fiber for temperature
measurement in confined spaces, which monitors real-time temperature of new energy batteries during the aging
process; an acoustic imager capable of locating sound sources and intensity, used for long-distance detection of
pipeline gas leaks or partial discharges in high-voltage systems; an intelligent X-ray counter, used for rapid counting
of the number of production components, etc.
Hikvision continues to expand application scenarios by exploring new industry applications. For example, the
low-temperature-resistant camera is designed for ultra-low environments and is used in the whole-process
supervision of cold chain logistics, while the self-cleaning camera is designed for high dust environments and is
used in the regular cleaning of lenses to guarantee imaging quality. The anti-corrosion camera made of polymer
materials is designed for perishable environments and is used to guarantee the long-term reliable operation of
equipment, whereas the medical dedicated PDA is designed for medical high frequency sterilization and other
environments and is utilized in bedside data collection, medical order execution and other business management
activities in hospitals. Furthermore, the explosion-proof level meter is designed for the internal environment of
hazardous chemical tanks and can accurately measure the height of stored solids/liquids, while the explosion-proof
PTZ camera designed for Zone 14 explosion-proof scenarios finds application in safety supervision of restricted
space operations in chemical enterprises. The intrinsically safe bi-spectrum thermal imaging camera designed for
explosion-proof environments in coal mines is used to monitor underground equipment for abnormal temperatures
in these locations.
2）Expand the applications of AI with an AI engineering service system
Hikvision is committed to transforming AI technology into effective productivity. The Company actively
builds an AI engineering service system to reduce the technical requirements for the application of AI in industry
scenarios and improve application effects.
In 2022, Hikvision’s AI engineering services promoted successful implementation of increasing scenario-
based AI applications. The Company has created a series of AI engineering models covering general business
scenarios such as standardized operation, auxiliary automation, warehouse management, material inventory and
4 Zone 1 explosion-proof: A classification of the explosive environment. Zone 1 refers to an area where flammable or explosive
gases or vapors may be present in the normal environment.
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store retail to effectively reduce the deployment cost of AI applications in these business scenarios and effectively
achieve hazard detection, efficiency improvement and other business management objectives for users.
As the application scenarios of AI continued to emerge, the number of enterprise users of the AI open platform
rapidly increased from more than 8,000 to more than 15,000 in 2022. To better serve the scenario-based intelligent
needs of enterprises, Hikvision continues to improve its AI engineering service system and provide diverse
empowerment solutions for partners of different scales and with different advantages, helping partners to develop
business applications and enhance business implementation capabilities.
3）Build a business engine system through the Huipin Application Empowerment Platform
The Hikvision Huipin Application Empowerment Platform is built based on a unified software technology
architecture, which is suitable for use in many industries. The Company has also developed a software business
engine system powered by low-code technology, which quickly meets corporate business needs and help users
quickly deploy digital applications through visualized rule configuration, drag-and-drop process design, and
customized data reports.
The Hikvision Huipin Application Empowerment Platform provides a line of systematic business engines.
Low-code development of basic applications from information network and IoT are enabled by basic business
engines, such as event rule engines, to conveniently achieve event reception, rule arrangement, distribution, query,
statistics and other functions. Business applications are effectively abstracted through general business engines,
taking the inspection engine as an example, it has served more than 5,000 enterprises, reducing the software
development workload by about 90%. Hikvision has launched various general business engines such as localization
engine and passenger flow engine based on breakthroughs in the inspection engine to serve more scenario-based
businesses. Multiple basic and general business engines are reused through the comprehensive business engine to
cope with more complex business requirements of users, such as the integration of safety production engines into
inspection, localization, event rules, reporting and other types of engines. These engines will achieve closed-loop
security management from hazard detection to risk warning and accident handling, support the customization of
applications related to safety production through low-code technology and rapidly respond to the needs of IoT
application integration. With the Hikvision Huipin Application Empowerment Platform, Hikvision quickly meets
the diversified needs of enterprise users through low-code technology, and reduces software development costs,
facilitating faster development and iteration of applications for enterprises, and promoting the continuous
development of AIoT applications.
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4）Explore standardized IoT applications through the Hik-Cloud enterprise-level SaaS platform
As an enterprise-level SaaS platform, Hik-Cloud platform continues to accumulate achievements in perception,
cloud platform, AI and other technologies, striving to provide digital services related to AIoT for various industries.
The platform offers a variety of services in the key industries such as retail chain, education & teaching, and property
service, while enhancing service professionalism to develop core competitiveness for users. In 2022, the number of
users and access devices on Hik-Cloud platform grew at a high rate. Hik-Cloud platform has served over 400,000
chain stores, 6.18 million homeowners in different communities, and 4.5 million students and parents, providing
access to 3.7 million terminal devices.
Hik-Cloud platform provides standardized inspection services in the retail chain industry to standardize
nighttime goods delivery through personnel authorization and process records. The platform is also applied in
teaching scenarios in primary and secondary school campuses to provide special teaching products for lesson
preparation and teaching, and offer a cloud-based deployment solution to the Education Bureau for "Three
Classrooms" scenario. Moreover, Hik-Cloud platform provides an integrated cloud-edge fusion solution for
residential communities, which enables cross-district remote management services, reducing management costs of
users. Hik-Cloud platform will continue to explore industry digital applications and provide more digital cloud-edge
fusion solutions.
4.2.3 Value Fulfillment
Hikvision continues to improve its value delivery methodology based on four value propositions of "shortening
management distance, improving business efficiency, regulating operating behaviors and preventing safety risks."
In 2022, Hikvision explored the application of a closed-loop end-to-end management concept in various scenarios
such as enterprise parks, industrial parks, chemical parks, commercial parks, campuses, hospitals and venues with
a focus on two core business areas of "safeguarding enterprise-wide security" and "enhancing asset operation
efficiency." Through continuous business innovation and experience accumulation, the Company has worked with
partners to set examples for excellent industry practices.
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1）Safeguarding enterprise-wide security
Hikvision focuses on enterprise safety production, people and vehicle safety management, integration of park
security and fire protection and enterprise emergency command, extending the scope of safety management from
traditional park security to all aspects of enterprise operations. The Company has built closed-loop safety
management system covering the entire process including prevention, management to control and handling,
promoting the transformation of enterprise safety management models.
1.1）Enterprise safety production
Hikvision supports the establishment of a digital safety production system for businesses through a low-code
safety production system, which covers all aspects of safety production including risk, hazard and accident handling,
and enables business applications such as monitoring of major danger sources, special operations, intelligent
inspection, closed management, and AR safety and environmental information dashboard. This system has been
successfully implemented in electric power, petroleum and petrochemical, metallurgy, manufacturing, construction
and other industries, serving users including Sinopec and Shengli Oilfield.
For the metallurgical industry, a dashboard showing situational perception of production safety is created to
allow precise localization and one-click access to danger source-related data such as production, equipment,
personnel, safety, environmental protection, videos and warnings. AIoT products are used to support business
departments in quickly developing safe operation supervision applications, and implementing on-site safety
supervision and tips, remote equipment operation and maintenance and other management services, thus achieving
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the purpose of ex-ante warning, event handling and ex-post archiving.
In the electric power industry, security situational perception capabilities are developed through a multi-
dimensional AIoT system to enable intelligent equipment inspection, online temperature measurement, acoustic
monitoring, remote switch and video review, three-dimensional panoramic display, operation and maintenance data
dashboard and other applications for managers. With the use of these applications in substation operation and
maintenance, on-site manual routine inspection is replaced by remote intelligent inspection and the conventional
knife-switch is replaced by the remote switch, improving the safety and efficiency of operation, maintenance and
inspection activities.
With regard to the construction industry, a video monitoring system is used to monitor the operating limits
of tower cranes, excavators and other large construction machinery, preventing risks from blind spots. A personnel
identification system confirms the identity of operators to ensure the assignment of a dedicated operator to a
particular job. Cab management allows the supervision of operating behavior to avoid violations. Furthermore, AI-
based devices automatically identify the number of people in the lift cars to avoid accidents caused by overload.
1.2）People and vehicle safety management
Using HD video surveillance, non-video security, intelligent image analysis, people/vehicle identification,
alarm management and other IoT technologies, Hikvision has built a comprehensive enterprise security system that
incorporates people, vehicles and events into management, achieving intelligent management of people, smart
control of vehicles and effective handling of events. This system has been successfully implemented in
manufacturing, chemical, logistics, steel, education and other industries, serving users such as Jiangsu Huai’an
Industrial Park.
For the chemical industry, comprehensive and dynamic supervision of dangerous goods transport vehicles
entering and leaving chemical parks is enabled through a closed-loop management system that integrates reservation,
localization, driving behavior monitoring and a list of vehicles of concern, thus achieving the management goal of
"traceable source, traceable destination, accountable responsibility, and predictable patterns."
In the logistics industry, an intelligent yard dispatching management system of logistics vehicles is created
to not only enable online management of these vehicles throughout the entire process from entry by reservation to
authorized exit, but also improve the efficiency and management of personnel access and vehicle dispatching in
logistics parks.
With regard to the education industry, a three-dimensional campus traffic control system is established to
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provide rapid vehicle passage by reservation, speeding and parking violation detection, campus parking guide,
education for violations and other management services in areas such as entrances and exits, main roads and parking
lots. This system aims to provide integrated management services for vehicle passage, safeguarding traffic order in
the campus and creating a smart and safe campus.
1.3）Integration of park security and fire protection
Hikvision leverages AIoT technologies such as thermal imaging and temperature sensing fibers to deeply
integrate security and fire protection systems, building a full-process management system that covers multi-
dimensional perception, intelligent early warning, firefighting and rescue, command and dispatch, and ex-post
assessment. The system allows prompt identification of safety hazard, quick response and efficient rescue, and
improving fire prevention and emergency handling capabilities of enterprises. It has been successfully implemented
in new energy, finance, commercial real estate, universities, culture and museums and other industries, serving users
such as Contemporary Amperex Technology.
In the new energy industry, thermal imaging or optical fiber products for temperature measurement are
deployed in key facilities such as workshops, warehouses and energy storage stations to identify fire hazards, re-
check with videos, issue warnings promptly and activate automatic fire extinguishing devices, thus improving fire
accident handling efficiency of enterprises and reducing accident losses.
For the financial industry, environmental data such as water, electricity, smoke, combustible gas and
temperature are collected to evaluate the fire hazards in buildings such as bank outlets, branches and sub-branches
in real time. This will help provide early warning of fire risks and improve emergency response and handling
efficiency for banks, achieving the paradigm shift from passive response to active defense.
With regard to the cultural and museum industry, the video monitoring, electrical and fire monitoring,
thermal imaging fire warning, and smoke detection systems are created to monitor fire hazards in ancient buildings,
as well as the cultural and museum venues. On-site videos enable rapid review of any violations, timely distribution
of warning messages, rapid response and handling.
1.4）Enterprise emergency command
In response to the emergency management needs of enterprises, Hikvision establishes an enterprise-level
emergency command system based on integrated communications, emergency response, data dashboard and AR
reality and other technologies to achieve closed-loop management from command centers to emergency handling.
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The system has found applications in the pipeline corridor, chemical, manufacturing and other industries, serving
users such as Chizhou Chemical Park and Xiangyu Chemical Park.
For the pipe corridor industry, an emergency command center consisting of a data platform, an intelligent
management cockpit, a knowledge library, emergency plan library and other subsystems is set up to provide real-
time monitoring, event classification and warning reporting, the display of emergency resources, one-click
activation of emergency plans and other applications, achieving rapid handling of emergency events in the pipe
corridor.
In the chemical industry, an emergency command system supported by AR reality application, integrated
communication and an accident handling plan library is developed to enable visualized park command and dispatch,
emergency plan exercise, one-click dispatch of emergency resources, one-click activation of emergency plans and
one-click export of emergency reports and other applications, helping users to improve safety management
capability of chemical parks.
With regard to the energy industry, an intelligent gas safety production command center is created to fulfill
data integration and display on the GIS Map, allowing access to valve rooms, refueling stations, city networks and
other sites. The center fully monitors site operations, and enables safety management of gas storage, transmission,
and other operations while achieving efficient dispatching of emergency personnel and materials by using the
integrated communication system.
2）Enhancing asset operation efficiency
Hikvision focuses on operational efficiency improvement, equipment and facility management, enterprise
material management, and smart space management. Through technological innovation, the Company has achieved
effective management of key production and operation elements, such as personnel, equipment, materials, and space,
on the basis of traditional information management, thus facilitating efficient operation of enterprises at lower costs
and increased efficiency, and achieving the management goal.
2.1）Operational efficiency improvement
Hikvision helps users achieve business management goals of regulated operation, automated operation process
and lower training cost from three aspects: operation assistance, man-machine cooperative operation and personnel
ability improvement. This strategy has been successfully implemented in manufacturing, new energy, coal mining,
agriculture, construction, logistics and other industries, serving users including EVE Battery.
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For the energy industry, AI vision are utilized to enable real-time supervision of operating behavior,
standardize the operation process, and ensure daily production order. Intelligent inspection services are provided
for managers and inspectors to improve inspection efficiency. Online classes, remote auxiliary diagnosis and other
methods of personnel training are offered to improve the ability of personnel.
In the manufacturing industry, intelligent equipment and products assist people to improve operational
efficiency and reduce the risk of misuse. For example, an X-ray material counter counts the quantity of materials
automatically, while a rail robot automatically executes inspection instructions. A high-frame-rate and low-latency
camera assists in determining the production status, whereas a thermal imaging device monitors the temperature of
the production line.
With regard to the breeding industry, a livestock and poultry breeding monitoring system is established to
meet the need for regular weighing of livestock and poultry in the breeding process. Unlike the traditional weighing
method, the system enables remote inspection of livestock and poultry growth, dynamically monitors changes in
weight and volume of livestock and poultry, and adjusts feeding strategy in a timely manner, helping users to achieve
large-scale breeding.
2.2）Equipment and facility management
Hikvision promotes the intelligent O&M transformation of equipment and facility management business.
Combining AIoT sensing technology with low-code engine capabilities such as integrated work orders and reports,
the Company develops equipment lifecycle management systems including intelligent inspection, repair,
maintenance, scrapping, spare parts, ledgers and other services to ensure the safety of equipment assets, reduce the
downtime and maintenance costs, and effectively improve equipment management efficiency for enterprises. This
system has been implemented in manufacturing, brewing and other industries, serving users such as Hangzhou
Qianjiang Refrigeration Group.
In the manufacturing industry, sensors are combined with AI technology to enable vibration fault diagnosis
of equipment such as centrifugal casting machines, understand the working and health status of stamping equipment,
and obtain real-time production data of winding equipment. A maintenance system is established based on
production data to monitor the risks and hazards, provide failure warnings and reduce unplanned emergency repairs.
For the liquor industry, core equipment assets are inventoried to achieve overall equipment effectiveness
(OEE) management, spare parts management and other operations. Equipment and facility maintenance data are
used to assist enterprises in formulating proper spare parts management strategies and striking a balance between
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spare parts cost control and guaranteed continuous production.
2.3）Enterprise material management
Hikvision has established a lifecycle management mechanism covering the entire process from material
procurement to end-of-life. The mechanism reduces the workload of manual recording and message transmission,
effectively decreases the management risk of data inconsistency, and informs the quantity and status of materials
timely for precise regulation and control to ensure orderly production. It has been successfully implemented in
cement, electric power, manufacturing and other industries, serving users including Inner Mongolia Ojing Science
& Technology.
In the cement industry, an AI-based raw materials monitoring system is established to measure, in real-time,
the area and volume of stored raw materials and other key data without interrupting production, evaluate the
continuous production time based on the consumption of raw materials, and assist users in adjusting the feeding
plan in a timely manner.
In the power industry, RFID products are used to meet the needs of identifying materials of different forms
and volumes in a non-contact manner, saving the labor cost required for material inventory.
For the manufacturing industry, an automatic inbound and outbound warehousing inventory system that
integrates vision, AI, localization technology and other technologies is provided to automatically count the number
of products in the inbound and outbound warehousing process. The system is used for data alignment with the
warehouse management and manufacturing management systems to identify asset management risks such as
account discrepancies.
2.4）Smart space management
Hikvision optimizes the design of the movement lines of people, vehicles and goods through digital
applications of spaces such as parks, workshops, dormitories, warehouses, storage and workstations to achieve
intelligent monitoring of space and statistical analysis of space utilization, facilitating refined management of all
types of spaces. These applications have been successfully implemented in medical, real estate, education and other
industries, serving users such as Ningbo University.
In medical institutions, a variety of intelligent interactive displays are deployed in outpatient and inpatient
areas to ease the contact between doctors and patients and relieve patients’ anxiety. Vital sign radars are used to
sense personnel status and behavior to timely detect any unusual events such as patients leaving the bed and falling,
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ensuring a safe treatment environment and improving the treatment experience for patients.
For industrial parks, the business process from lease to audit and finance is integrated to clearly display real-
time information on real estate operations, helping to attract investment. Service records are established for
enterprises in the park, and proper services are provided for them based on a thorough understanding of their
personalized needs. A reservation-based space resource usage mechanism is developed for functional areas such as
conference rooms, cafeterias and office areas to improve the actual utilization rate of space and create an efficient
and convenient management service model.
With regard to colleges and universities, an auxiliary management system for teaching resources is
established to monitor laboratory resources, and verify the identity of the personnel entering the laboratory to ensure
compliant use of these resources. A lifecycle management mechanism is created for dangerous chemicals to ensure
that their use is under control. The indoor environment, instruments and equipment are monitored to ensure the safe
and efficient operation of equipment.
In 2022, Hikvision established successful practices of digital transformation with many partners. In the future,
considering the multi-park development model of enterprises, Hikvision will provide multi-park management
solution for industrial parks while further exploring park management business to optimize the multi-park business
development model for users, achieving business value of "unified standards, capability sharing, benchmarked
management and service alignment".
4.2.4 Outlook
As an important driving force of industrial transformation, digital technology is being fully integrated into the
social and economic industrial chain, exerting an increasingly great impact on the way of enterprise management,
production and service, and giving birth to a variety of scenario-based digital applications in different industries.
With AIoT technology, Hikvision will continue to expand industrial application scenarios, fulfill common needs of
different industries and consolidate its AIoT product and solution system, helping users with industry transformation
practices.
At the same time, new trends in economic development, such as continuous industrial transfer, optimization of
energy structure and the rise of younger generation, are driving the rapid development of related industries. Many
industries, especially manufacturing, is shifting from the eastern to western region, where the construction of more
industrial parks and bases will lead to many structural opportunities. As the energy structure is gradually changing
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to non-fossil energy, and the production and consumption sides are transforming rapidly. A growing number of
innovative businesses are emerging along with the rapid changes in industrial structure, creating many new market
opportunities. The growing diversified demands of younger generation for quality, culture and other elements gives
rise to more new consumption areas, leading to more competitive and robust economic activities.
A new develop pattern brings new opportunities and new changes give rise to new needs. As an important
bridge between the physical and the digital world, AIoT technology will play a crucial role in this process. Hikvision
pays close attention to many new industrial trends such as large manufacturing chains, retail store networking
management, corporate digital twins, and new infrastructure in education and medical industries, helping enterprises
to consolidate infrastructure for digital transformation with an AIoT software and hardware system. Additionally,
the Company improves operation and management capability for enterprises through AIOT solutions such as
enterprise safety production and asset efficiency improvement.
Hikvision will continuously deepen business innovation, explore more digital application scenarios, and join
hands with partners to pave the path to digital transformation.
4.3 SME Business Group (SMBG): Enhance Industry-wide Service Capabilities, and Facilitate Digital
Transformation of SMEs
4.3.1 Overview
The business conditions of small and medium-sized enterprises (SMEs) are highly correlated with macro
economy, and the industry has faced many challenges over the past year. As the economy recovers, SMEs will
rebound and gradually increase their investment in security, digitalization, intelligence and other areas. Digital
transformation is an inevitable trend, and plays a key role in helping SMEs break the development bottleneck,
weaken their dependence on the external environment and build long-term competitiveness. According to the
estimation of iResearch Consulting, the market size of digital services for SMEs exceeded 300 billion in 2022. This
market includes AIoT devices and marketing and re-purchase of multi-scenario digitization solutions and product
packages for stores, parks and factories, as well as engineering services and SaaS application services, which is vast
in size and holds great potential for growth.
Based on industry understanding and user insight, Hikvision uses AIoT devices as digital infrastructure to
improves equipment management, explore business applications, and provides low-cost, lightweight, tailor-made
and precise solutions and services for various SMEs, reducing choice and usage costs for customers and users.
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Hikvision continues to expand its presence in the lower-tier markets, and works with nationwide partners to shift
from the single-loop model of channel-customer-user based on product distribution to the double-loop ecosystem
of solution marketing + service provision. Moreover, the Company develops online and offline digital store business
and builds a service mesh to better promote digital transformation of SMEs.
4.3.2 Core Technologies: Mutual Promotion between Online and Offline Channels Driven by Hikvision
SMBG HikLink and Hikvision SMBG E-commerce
Hikvision has established two mainline platforms: Hikvision SMBG HikLink and Hikvision SMBG E-
commerce, which provide an empowerment platform for security professionals, 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 and the partner network, an empowerment platform
is built to adapt to the industrial structure.
Hikvision SMBG HikLink: This is an AIoT platform that provides multi-scenario solutions and services for
SME users. With Hikvision’s AIoT capabilities, this platform can access video, access control, intercom, attendance,
fire protection, alarm, transmission and other categories of products to provide IoT-information network integration
applications powered by the "video + access control card." Hikvision creates scenario-based solutions and services
in collaboration with ecosystem partners for scenarios such as communities, office, retail stores, factory parks, and
agricultural farming. Hikvision SMBG HikLink Pro provides a project management tool for project contractors,
accumulates project data, and increases service performance efficiency, supporting project contractors in providing
solutions, subscription services and operation and maintenance services for users, and increasing business efficiency
and revenue for project contractors.
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Hikvision SMBG E-commerce: It is an empowerment platform for security professionals, integrating
engineering tools, marketing empowerment, solutions, product information, service and operation. Based on the
marketing service system, the platform offers online showrooms, scenario-based product matching guides, online
pre-sales, service squares and others, contributing to the upgrading of the industry chain. For now, it has served
more than one million security professionals.
The Hikvision SMBG HikLink and Hikvision SMBG E-commerce platforms are mutually supportive and
spirally driven to help project contractors manage equipment and projects efficiently, 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）Facilitate digital transformation of SMEs through the provision of one-stop solutions and services
Hikvision develops online and offline digital store business based on solution marketing, connecting with users
and continuously providing services. Through the expansion of product lines, Hikvision builds an AIoT cloud
platform that provides simple and good solutions and standardized services for SMEs. The Company integrates
multi-terminal capabilities with a focus on the "video + access control card" business to support the access of more
than 100 kinds of access control, attendance, and visual intercom devices, as well as intelligent applications such as
All-Purpose Card, cloud attendance, cloud intercom and cloud visitors. Hikvision has provided scenario-based
solutions for tens of thousands of SME users such as communities, factories and parks in collaboration with national
partners, with the number of access devices and users maintaining high growth throughout the year.
2）Promote the digital transformation of security professionals and enhance their service capability
Hikvision SMBG E-commerce empowers and enhances the efficiency of security professionals by supporting
intelligent order matching of multiple products through the upgrading of the order matching tool, which generated
nearly 100,000 orders in 2022. The product material database covers the whole selling process including pre-sales,
sales and after-sales, which has processed more than one million inquiries throughout the year. The platform
promotes solution marketing by providing more than 100 types of solutions and digital showrooms to increase brand
influence. It has optimized social marketing tools, which have been shared more than 100,000 times by nearly
10,000 customers. SMBG E-commerce Live Streaming helps connect channel customers with their downstream
partners. Nearly 1,000 live streaming activities have been conducted on the platform and more than 100,000 people
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have participated in live interactions throughout the year.
Hikvision SMBG HikLink Pro provides a project contractor workbench equipped with various professional
equipment configuration and debugging functions to assist the project contractors in project delivery and system
operation and maintenance, which has provided services for tens of thousands of project contractors, with key
functions used more than 100,000 times.
Looking ahead, Hikvision will work with channel customers, project contractors and ecosystem partners to
provide more competitive scenario-based solutions, while establishing connection with SME users to facilitate their
digital transformation. An IoT system will be established to unlock more possibilities.
4.4 International Business: Continue to Promote the Localization Strategy of "One Policy for One Country"
and Improve the Global Marketing and Service Network
4.4.1 Overview
In 2022, overseas markets gradually recovered and some regions maintained rapid economic growth, providing
good opportunities for Hikvision’s international business. Although geopolitical tensions, energy crisis and inflation
bring uncertainties to the macro environment, the Company’s international business has maintained overall steady
development due to its presence in many countries and regions, and optimization of operations.
Hikvision continuously promotes the localization strategy of "one policy for one country" for its international
business, improves the global marketing and service network system, and promotes the localization of R&D,
manufacturing, logistics and after-sales service, thus quickly responding to the needs of customers, users and
partners. By 2022, the Company has set up 72 branches, subsidiaries and offices in the international market
including Hong Kong, Macau and Taiwan regions of China. In 2022, the Company also set up a new R&D center
in Dubai to satisfy the customized needs of regional markets together with overseas R&D centers in Montreal and
London. Furthermore, Hikvision built 5 new overseas logistics warehouses, bringing the total number of warehouses
to 17 and improving local logistics coverage and distribution capabilities. The Company set up 2 new overseas call
centers, reaching a total of 13. These centers enable Hikvision to actively expand cooperation with channel partners,
extend the technical service networks and provide customers with timely and high-quality after-sales services.
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Hikvision’s long-term investment and accumulation in technological innovation, product R&D and production
delivery allows the Company’s products to maintain a dominant position in overseas markets. With the steady
growth of the video business, non-video businesses such as access control, alarm, intercom and commercial display
are growing rapidly, and have offered products for many market segments. Meanwhile, the Company actively
expands the vertical industry market, providing a complete range of scenario-based solutions for transportation,
retail, logistics, education, energy, manufacturing and other industries to improve the digitalization, intelligence and
automation of business operations for customer and users.
4.4.2 Core Technologies: Sound and Solid Product and Technology System for International Business
With its solid technical foundation and continuous technological innovation, Hikvision has always been
competitive in overseas markets and has formed a complete product and technology system that meets the needs of
these markets. In 2022, the Company launched and optimized several types of products and solutions powered by
image technology, AI, multi-dimensional perception and fusion applications，which adapted to different business
scenarios.
1）All-weather, all-environment image technology
Video image technology has always been superior technology of Hikvision’s international business. By
leveraging dual-light fusion, ISP and mixed fill light technologies, the Company has developed ColorVu and
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DarkFighter technologies that enable HD and color imaging at night or under low light conditions, which have been
used in 4K HD, high magnification zoom, panoramic imaging and other products to meet the needs of different
scenarios and applications. Additionally, Hikvision provides special product series such as anti-high and low
temperature, explosion-proof, anti-corrosion and anti-vibration that ensure stable and clear video imaging under
complex and harsh environmental conditions.
2）More extensive and open AI applications
Hikvision delivers a greater variety of AI applications and diversified solutions according to the market demand,
development stage and policies in different countries and regions. The ANPR and intelligent perimeter alarm
products developed and manufactured by the Company have been widely used in the international market. AI
applications such as people counting, queue detection, vehicle feature detection, speed detection, traffic flow
analysis, intelligent parking management, and personal protective equipment (PPE) detection are gradually being
implemented. At the same time, the Company is committed to build an open AI platform that shares its hardware
and software products with international technological partners while launching the latest HEOP 2.0 open platform
to better meet the diversified needs of the market for AI applications.
3）Continuously expanding perception technology capabilities
Based on visible light perception, Hikvision continuously expands multi-dimensional perception technologies
such as infrared light, millimeter wave radar, X-ray, and acoustic wave to enrich IoT perception capabilities. The
Company has launched a diverse range of perception product series in the international market, covering radar,
thermal imaging, access control, visual intercom, and alarm products. The Company combines visual perception
technology with other perception technologies to provide innovative products and solutions, such as an integrated
radar and video machine for perimeter protection and traffic blind spot detection, as well as an alarm system with
different detectors such as water level, smoke and vibration detection, and video re-check.
4）Integrated multi-device and multi-system applications
In response to the increasing demand for integrated applications, Hikvision has developed a system integrated
with multi-device and multi-system applications to meet the differentiated needs of the market. The Company
provides Hik-Partner Pro and Hik-Connect for small and medium-sized businesses, which allow customers to run,
maintain and manage multiple devices in the same interface conveniently and link video with non-video devices.
The Company offers HikCentral series platform management software to large and complex scenario-based
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businesses. The software integrates video security, access control management, visitor management, alarm, fire
prevention, emergency management and other systems and supports the integration of non-security information
systems to form a comprehensive IoT solution, providing more comprehensive data for management decisions of
customers and users.
4.4.3 Value Fulfillment
Hikvision is committed to continuously creating value for international customers through technological
innovation and localized products and solutions, and working together with them to build a more secure, efficient
and intelligent world.
1）Create one-stop solutions for SMEs
SMEs are generally more concerned about the ease of use of security products and systems, and prefer light
intelligent applications. Hikvision creates one-stop security and intelligent application solutions for SME users,
providing diversified products, unified and convenient management platforms and tools to enhance the ease of use
of security systems and intelligent applications and reduce comprehensive costs for customers.
2）Promote industry intelligence and digitalization
With AIoT technology, Hikvision provides systematic and scenario-based solutions for international industry
customers that cover transportation, retail, logistics, education, energy, manufacturing and other market segments,
promoting industry intelligence and digitalization. For example, in the logistics industry, the park management
solution enables unified management of vehicles, people, space and goods to ensure park safety and improve
operational efficiency. For the energy industry, an intelligent inspection solution allows remote monitoring and
warning of key areas and equipment status to improve emergency handling capability and efficiency.
3）Promote the open sharing of the AIoT ecosystem
As the IoT industry is characterized by diverse products, fragmented scenarios and individualized application
demands, Hikvision builds an open AIoT ecosystem to promote industry cooperation. In terms of device openness,
in addition to the traditional ISAPI, Hikvision releases the OTAP architecture protocol that covers all Hikvision
products with a set of open protocols to improve the efficiency of product integration for technical partners. In terms
of platform openness, cloud and OpenAPI platform are used to achieve unified management and integrated
application, which help reduce the development cost of higher-level applications. In addition, Hikvision shares
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technical and market resources with ecosystem partners through the Global Technology Partner Program.
4）Contribute to sustainable social development
Hikvision has integrated corporate social responsibility into its business practice from R&D design to product
manufacturing, constantly exploring and practicing the concept of green and low-carbon development, and
promoting sustainable social development through technological innovation. In 2022, Hikvision delivered the STAR
Public Welfare Partnership Program across the world. Through cooperation with non-profit and social welfare
organizations, the program aims to provide technical support in various fields such as biodiversity monitoring and
protection, environmental monitoring and protection, and cultural heritage protection, using technology to promote
the implementation of more public welfare projects and striving to create a better future for human beings.
In response to the differentiated needs of overseas markets, Hikvision will continue to strengthen the
construction of regional R&D centers, enrich the international product and solution system, and promote the
localization strategy of "one policy for one country." Moreover, the Company will expand the localized marketing
and service network to continuously create value for international customers, users and partners and achieve win-
win development.
5. Innovative Businesses
Hikvision’s continuous efforts in technical reserves and expanding business scope provide a good environment
for innovative business development. Currently, its innovative businesses include EZVIZ Network, HikRobot,
HikMicro, HikAuto, HikSemi, HikFire, Rayin and HikImaging. The solid growth of innovative businesses has
continuously injected new impetus into the long-term stability and sustainable development of the Company.
5.1 Innovative Business - EZVIZ Network
In March 2015, EZVIZ Network was created as the first innovative business based on Hikvision’s co-
investment scheme. Its vision is to become a trusted provider of smart home services and IoT Cloud Platform. After
seven years of strong growth, the company has developed a "1+4+N" smart home ecosystem for individual and
family consumers that provides intelligent life solutions primarily based on visual interaction to bring a technology-
enabled casual, comfortable and enjoyable life for people. Moreover, by leveraging the self-developed EZVIZ Open
Cloud Platform, the company shares its cloud platform service capabilities for intelligent videos with industry
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partners to jointly establish an IoT cloud ecosystem. The company has been actively developing domestic and
international markets, synergizing online and offline channels, and building diverse multi-level marketing channels,
with continued steady growth in sales performance and online user base.
On December 28, 2022, EZVIZ Network was successfully listed on the STAR Market of the Shanghai Stock
Exchange as the first spin-off subsidiary of Hikvision. For details of EZVIZ Network, please refer to EZVIZ
Network 2022 Annual Report.
5.2 Innovative Business - HikRobot
Combining visual perception, AI and navigation control technologies, HikRobot focuses on industrial IoT,
smart logistics and intelligent manufacturing with solid algorithm accumulation, strong software and hardware
development capabilities, and a complete marketing system. HikRobot continuously invests in the fields of mobile
robots and machine vision to promote the digitization and intelligence of manufacturing 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 create
greater value for users through technological innovation. In 2022, the company focused on the standardization and
serialization of product development, improved the efficiency of the entire process from design and development to
implementation and deployment, increased efforts in industry applications, and actively developed its overall
solution capability, thus securing an advantageous position in new energy, automotive manufacturing and other
industries.
1）Four hardware product series
LMR (Latent Mobile Robot) series: HikRobot’s fourth-generation Q3 and Q7 products released in 2021 have
been widely used in new energy industries such as photovoltaics and lithium battery, as well as in the production
process of automotive OEMs such as final assembly and welding. These products formed a number of highly
competitive solutions for internal automated logistics. In 2022, HikRobot released the Q2 series, also based on the
fourth-generation architecture, to better meet the needs of smaller space application scenarios such as 3C electronics
manufacturing.
CMR/HMR (Conveyor/Heavy-duty Mobile Robot) series: In 2022, the CMR/HMR product line focused on
the photovoltaics, lithium battery, automotive manufacturing and other industries, closely integrated with the
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production line, and launched a number of industrial products. In the photovoltaic slicing segment, a fully automated
loading and unloading robot for use with a slicing machine has been launched. In the lithium industry, a special
model for double-lift integrated with the coating process has been introduced, which can achieve a docking accuracy
of ±2mm. In the automotive manufacturing segment, a delivery robot specially designed for main production lines
has been used for the first time, while the Traction series has significantly improved its competitiveness and has
been used at large scales.
FMR (Forklift Mobile Robot) series: In 2022, by upholding the concept of independent design and
development, the company developed a number of core components and significantly enhanced its product strength.
The rated load of the F4 Stacking series and F3 Handling series were increased to 2 tons and 3 tons respectively.
Also, HikRobot released F5-1600, a self-developed product of the Forward-Moving series.
CTU (Cargo To You) series: In 2022, HikRobot focused on the standardized and modular development of
key components, significantly improved development efficiency and product quality. The company has expanded
the application of its products to photovoltaic and lithium battery production, and also across the pharmaceutical
distribution, garments and footwear industries. Moreover, a product with an access height of more than 8 meters
has been launched for storage applications.
2）Software product series
HikRobot has independently developed a low-code platform and a series of components that can quickly
perform core services such as third-party system interfacing, business process scheduling and user interaction
interface design to significantly reduce the development difficulty, improve the development efficiency and respond
to user needs more quickly. The company has increased its investment in operation optimization algorithms for
iWMS, an intelligent warehouse management system independently developed to meet warehousing needs. The
operational efficiency of the system has been significantly improved through optimization of order batches, inbound
warehousing management and cluster scheduling.
3）Solution development
Automotive industry: In 2022, HikRobot further expanded the application of its products from in-factory
logistics and distribution to process manufacturing in the automotive industry, and made breakthroughs in the final
assembly line and sub-assembly line, transforming the original process logistics model and making manufacturing
logistics more flexible and scalable. In addition, the application of solutions and industry penetration rate in the
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commercial vehicle and upstream component segments has steadily increased. Through extensive and in-depth
solutions implementation, HikRobot has helped users to improve operational efficiency and management efficiency.
3C industry: In 2022, HikRobot intensifies efforts in the display panel industry. In view of the characteristics
of this industry, including different forms of display panel products, high storage requirements, complex business
needs and multiple dimensions of material quality management, the company has developed scenario-based
solutions such as aisle warehousing, material stacking, inbound or outbound warehousing of designated materials,
which effectively met the production and operation requirements. Furthermore, the company has developed and
improved solutions for typical and complex businesses such as incoming materials inspection, multi-level
management by serial number, and SMT backflush management to suit flexible manufacturing needs and enhance
unmanned, automated and intelligent logistics throughout the factory.
New energy industry: In 2022, mobile robot systems found large-scale applications in photovoltaic and
lithium battery fields. These systems have been applied in crystal pulling, slicing, cell wafers and PV modules in
the photovoltaic industry as well as in early electrode manufacturing, intermediate cell manufacturing and late
battery assembly in the lithium battery industry. Pre-scheduling, partition task management, large-scale cluster
scheduling and other algorithms have been utilized to further guarantee on-site production efficiency, meet the
operational and management requirements of lithium battery enterprises such as production capacity, production
efficiency, quality control, and cost control.
As the global manufacturing industry is undergoing another round of transformation and upgrading, and has a
strong demand for automated logistics, the mobile robot market will continue to grow at a high rate. In 2023, the
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company will continue to expand the application of AI 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 its applications 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 also
an integral part of flexible and intelligent production. In 2022, HikRobot focused on the optimization of 2D vision,
intelligent ID and 3D vision product lines. Moreover, the company has cultivated a vision application ecosystem
centered on the Vision Master (VM) Software Platform, and worked with partners to meet the needs of fragmented
industrial applications.
1）Three product lines
2D vision product line: HikRobot continues to develop competitive industrial cameras, lenses, light sources
and capture cards powered by image capture technology, providing industry customers with standardized core
devices for image capture. In 2022, the company upgraded the platform for a full range of industrial cameras.
HikRobot has expanded the CU Economical and CS Enhanced categories of industrial cameras and completed the
switchover of the original CE and CA series products. Moreover, the company upgraded the platform for the CH
series and released a camera with an optical fiber transmission interface, while expanded the CL series line array
cameras based on the next generation of domestic 4K and 8K image sensors. The company developed a variety of
large format line-scan lenses with a diameter of 60 mm and 80 mm to satisfy the demand for high-end line-scan
applications. It has expanded the light source series including strip, ring and surface ones, and enriched and
optimized light source controllers. In addition, the company has launched Gigabit network capture cards based on
domestic PHY chips and 10 Gigabit network capture cards based on optical fiber interfaces, while continued to
optimize Cameralink and CoaXPress capture cards to improve their compatibility with third-party cameras.
Intelligent ID product line: HikRobot focuses on open algorithm platforms and general-purpose intelligent
hardware products supported by vision algorithms, providing the industry with an efficient and high-performance
intelligent processing platform. In 2022, in terms of vision algorithms, the company continuously optimized the
performance and efficiency of template matching, Blob analysis, geometry finding, character recognition and image
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segmentation and other algorithms, and developed surface defect detection, fast classification, instance
segmentation, defect comparison and other algorithms based on the characteristics of industry applications. These
efforts have further consolidated the company’s technical competitiveness in underlying algorithms for machine
vision. In terms of intelligent products, HikRobot has provided an open underlying module framework for algorithm
platforms VM4.2 and VM4.3 that enables flexible secondary development and support secondary encryption by
application developers. The company has significantly optimized the performance and efficiency of the algorithm
platforms, making them more open, safer, and more efficient. IDH7000, IDH5000, and IDH3000 and other series
of handheld code readers have been introduced to further complement the code reader family. In addition, the
company has increased efforts in industry applications, and improved the competitiveness of industrial code readers,
intelligent cameras, vision controllers and other products through optimization of their performance and ease of use.
3D vision product line: HikRobot provides a one-stop 3D vision software and hardware solution for customers
with a focus on two major applications enabled by 3D sensing technology, high-precision measurement and robot
gripping. In terms of high-precision measurement, the company introduced a lineup of laser profile sensors in 2022,
including 4 models of DP2000 series with higher performance DP3000 series under development. Moreover, it has
switched 3D vision analysis software to VM framework and launched VM 3D version, which has been promoted
and applied in many industries such as lithium battery, 3C and automotive parts, and well received by the market.
In terms of robot gripping, HikRobot released a multi-DOE binocular scattering camera for depalletizing
applications and a laser oscillator RGBD camera for workpiece gripping applications in 2022. Furthermore, the
company continues to optimize the 3D robot application software platform to gradually gain competitiveness in 3D
robot gripping applications.
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2）Ecosystem construction
With excellent hardware and software capabilities, HikRobot endeavors to establish a new machine vision
ecosystem. In 2022, the company continued to put efforts into the development of a machine vision ecosystem by
promoting the Ecosystem Partner Program v2.0 in the industry, further expanding the scope of training and
certification for machine vision application engineers, and identifying and cultivating ecosystem partners in various
industries. It has incorporated 3D products into the ecosystem program to enrich the content of visual empowering.
In 2022, the company held dozens of offline and online technical exchange meetings, and carried out a range of
specialized machine vision competitions through V-club, providing more dynamic and professional learning
opportunities and display platforms for machine vision professionals.
3）Solution development
Through technological empowerment, HikRobot assists ecosystem partners in promoting the implementation
of vision solutions in different industries.
In 2022, the new energy industry maintained a rapid development momentum. HikRobot has focused on key
production processes of the lithium battery industry. The combination of traditional algorithms with deep learning
technology has been used to efficiently detect and classify electrode defects in the front-end electrode inspection
process. Vision solutions for high-speed lamination-related vision inspection, measurement, deviation correction,
alignment and other applications have been developed and massively implemented in the intermediate cell
production process. The company has also focused on the module production process of the photovoltaic industry
and developed many standardized vision solutions for assembly inspection, EL inspection, bus bars, module
inspection and junction boxes, etc. These products have been widely used in the production of photovoltaic modules,
significantly improving production efficiency and product yield.
HikRobot provides a 3D automated robot gripping solution for stamping and die casting parts for the
automotive industry, and has launched a disposable glove AI inspection solution for the medical industry and an
automated crossbelt supply solution for the express logistics industry. The company has released a software
development framework in the 3C industry for a large number of non-standard vision-guided localization
applications, helping partners to quickly create vision solutions.
As conventional industries continue to transform and upgrade, and relevant industries such as new energy and
medical develop rapidly, the machine vision industry will maintain rapid growth driven by AI, 3D and other
technologies. In 2023, the company will increase investment in AI quality inspection, 3D technology, VM software,
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and standardized vision systems and other areas, provide customers with simpler and more open hardware and
software products, establish a machine vision ecosystem, and create greater value with partners at all levels of the
industry chain.
Looking forward, HikRobot will continue its efforts in intelligent manufacturing while remaining committed
to the two business areas – mobile robots and machine vision. The company will help users to improve production
quality, enhance efficiency and reduce costs through technological innovation of software and hardware products
and platforms and continuous improvement of delivery processes, thus facilitating the development of global
intelligent manufacturing.
5.3. Innovative Business – HikMicro
Combining infrared thermal imaging technology with MEMS technology, HikMicro provides core components,
detectors, modules, infrared thermal imaging products and overall solutions to the world. The company’s products
are widely used in industrial temperature measurement, outdoor, generic-security and other fields.
5.3.1 Product Innovation
After years of accumulation, HikMicro has established five advantages, namely clear image, advanced
intelligence, efficient temperature measurement, stable design and reliable manufacturing.
HikMicro provides multi-form products and one-stop integration services from detectors, modules to complete
machine to better empower the infrared industry. In 2022, HikMicro further complemented its integrated products
to completely achieve coverage from 96*96 to 1280*1024 resolution.
The company’s 96*96 resolution detector, which is less than the size of a mineral water bottle cap, integrates
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lens, detectors, stoppers, temperature sensors and other functional hardware, greatly reducing the cost and power
consumption. A universal hardware interface and built-in calibration data facilitate products integration, enabling
the application of this detector in multiple sectors including instrumentation, intelligent hardware, IoT, smart home,
pandemic prevention and healthcare. Moreover, the company has launched a miniature PTZ camera that is ultra-
lightweight and small in size, and features multi-dimensional sensing and intelligent algorithms. This camera
reduces the integration difficulty and expanding the application fields.
5.3.2 Industrial Application
By leveraging its technical advantages in sensors and product design, HikMicro has grown rapidly, providing
specialized segmented services for customers in industrial temperature measurement, outdoor and generic-security,
among other areas.
Industrial temperature measurement market: In the industrial infrared temperature measurement market,
HikMicro further improves its product solutions for industrial applications including non-destructive testing,
predictive maintenance of equipment and safety inspection of production processes which are widely used in
different industries. In the power industry, these products facilitate safety testing in power generation, transmission,
transformation and distribution. In the steel industry these products are used to test key production processes such
as coking, sintering and steel rolling. In the coal industry, these products serve to monitor the status of key equipment
including belt machines, coal mining machines and coal cutters. They are also used to manage production safety of
oil fields, refineries, chemical parks and other applications in the petroleum and petrochemical industry.
Industrial temperature measurement products are iterated and innovated continuously according to the needs
of different applications. For the steel industry, the company has launched ultra-high temperature resistant products
that assist in determining the adequacy of sintering to ensure production efficiency. To respond to the needs of coal,
oil fields, and other flammable and explosive scenarios, the company has introduced a family of intrinsically safe
explosion-proof products to guarantee the safe production of enterprises.
Outdoor market: Thermal imaging is widely used to detect targets in lightless or low-light environments in
search and rescue, patrol and other outdoor scenarios. HikMicro takes advantage of its strengths in images to
promote the AI-ISP super-resolution image enhancement algorithm. This algorithm enables AI quadruple super
resolution by means of deep learning, capturing all image details and improving overall image quality.
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The company has launched NETD 5 25 mk high-sensitivity series products. Compared to the mainstream
35~45 mk devices, these products offer smaller temperature differences discernibility, lower noise and higher clarity,
thus helping users identify targets more easily.
Generic-security market: In 2022, HikMicro expanded its product lines for generic-security applications by
introducing a full range of intelligent products from 96*96 to 1280*1024 resolution. These products achieve full
coverage from fragmented security scenarios to high-end application scenarios, and are widely used in different
scenarios such as perimeter prevention, indoor fire prevention and commanding heights. In terms of perimeter
prevention, HikMicro has introduced a dual-light detection algorithm that combines visible light with thermal
imaging capabilities using dual-light fusion, target detection, background modeling and multi-target association
technologies. This algorithm effectively detects targets and reduces false alarms in both small temperature
difference6 and strong light environments. Fire point identification application is the key need of commanding
height scenarios. There are numerous targets with complex interference in practical scenarios such as forest fire
prevention, straw burning prevention, municipal commanding height firefighting, where many sources of false
alarms exist, such as smoke cloud and high temperature rocks. To address this problem, HikMicro has upgraded the
original smoke and fire detection algorithm to a multi-algorithm engine, which filters interference and significantly
improves alarm accuracy through the fusion of multi-dimensional scenes and the aggregation of multi-class
algorithms.
5 NETD: Noise Equivalent Temperature Difference, the minimum temperature difference an infrared detector can detect. It is one of
the main indexes to measure the performance of infrared detectors.
6 Small temperature difference scenario refers to a scenario where the temperature difference between the background and target is
so small that the target blends with the background and is difficult to identify.
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In the future, HikMicro will continue its efforts in MEMS and sensor technology, while continuously
consolidating its technical advantages of the products to make thermal imaging available to the 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 domestic and international passenger and commercial vehicle users, consumers at all levels,
and industry users.
5.4.1 Steady Development of the Passenger Vehicle Pre-installed Market
In 2022, the wholesale sales of the domestic passenger vehicle market continued to grow, and the penetration
rate of new energy vehicles increased rapidly, driving the market share of domestic brands to a record-high, and the
intelligent development of the whole vehicle is rapid. HikAuto passenger vehicle pre-installed market sales and the
number of new projects maintained a high growth rate.
In terms of vision sensors, HikAuto expanded its leading advantage in market share, made effective
breakthroughs in new project and new customer development, and 5 megapixel and 8 megapixel high-end intelligent
driving cameras achieved mass production in many domestic leading car companies' platform-based vehicle models.
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In terms of intelligent driving, the company focused on UV fusion 7 perception and cockpit visual perception
technologies, increased investment in parking and VIMS (Video Intelligent Monitor System) products, and achieved
mass production of more than 10 projects for several domestic leading car companies, with the leading share of new
projects in China. In terms of driving-parking integrated intelligent driving products, the company integrated vision,
ultrasonic and millimeter wave radar and other perception capabilities to provide intelligent driving domain
controller products that suit different customer needs. In 2022, the company made a breakthrough in mass
production, discovering new growth opportunities.
In 2022, the company continued to promote cooperation with joint ventures and international brands, while
steadily implementing the development of multiple platform-based product projects with a number of joint venture
and international car companies.
In 2023, HikAuto will increase investment in R&D to lead the development of domestic vision sensor
technology. Moreover, the company will create an intelligent driving domain control system with a focus on L2+
intelligent driving scenarios to satisfy all kinds of needs. It will also actively explore solutions for integrated
intelligent driving and cockpit, providing more options of intelligent products for customers.
5.4.2 Consolidating Advantages in the Passenger Vehicle Aftermarket
In 2022, the penetration rate of dashcams and panoramic view monitors continued to increase in the automotive
aftermarket. Despite the impact of external factors such as weak consumption and shrinking demand, HikAuto’s
7 UV fusion stands for Ultrasonic Vision fusion, and refers to the combination of ultrasonic radar and vision.
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aftermarket products maintained solid development with year-over-year growth in sales and shipments.
HikAuto provides a full range from 2 megapixel to 4K dashcams and actively explores consumer needs. In
2022, the company launched the industry’s first F5 series dashcam with a fragrance system, which was well received
by the market. HikAuto’s panoramic view monitors have been installed in more than 60 models of 9 collections
from multiple international major brands, with stable performance and leading technology.
After two years of development, the M1 electronic rearview mirror with ultra-low-latency high-definition night
vision complies with the automotive-grade quality requirements. It is generally recognized by consumers and
achieves high sales growth. On December 29, 2022, the national standard, GB 15084-2022 Performance and
Installation Requirements for Indirect Vision Device of Motor Vehicles, was introduced to support the development
of electronic rearview mirror. The standard is planned to be implemented as of July 1, 2023, bringing greater
opportunities for development to the market. The company will continue to increase investment in this product line.
HikAuto online flagship store has ranked at the top of dashcam store sales list on JD.com in the past three
years, winning consumers’ trust. The company will create greater value for customers through continuous
innovation and a deeper understanding of market demand.
5.4.3 Growth in Commercial Vehicles despite a Downside Market
In 2022, despite economic fluctuations and overall sluggish demand, HikAuto achieved growth in the
commercial vehicle business unit due to great efforts in product innovation and R&D investment.
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In terms of key technologies, the company continues to optimize the combination of BeiDou and GuanDao
positioning algorithms to significantly improve positioning accuracy. It expands the applicability of ADAS/DMS8
intelligent algorithms by making them adaptable to more commercial vehicles. FCW, LDW, PCW, BSD9 and DMS
are among the top in terms of practicality in domestic commercial vehicle models.
In terms of products and solutions, HikAuto has released a lineup of transport vehicle for passenger, tourist
bus, and dangerous goods logistics vehicle that comply with the new national standard GB/T 19056-2021. The
company has obtained several projects from bus and truck OEMs. It has upgraded solutions for buses, school buses
and construction vehicles, and developed more practical AI segmented scenario algorithms to enhance vehicle
digitization, provide safer driving assistance capabilities for drivers, and allow administrative agencies to analyze
vehicle usage more scientifically. Additionally, the company has introduced a new matrix of vehicle monitoring
products for the international market that cover up to 16-channel monitoring scenarios.
HikAuto’s cloud platform has enabled access to more than 500,000 vehicle-mounted video channels, and
provides more reliable OTA functions. The platform features a new subsystem of big data analysis, helping users
with fusion analysis of multi-source heterogeneous data and scientific decision-making. In terms of information
security, the company has designed a full-link security system solution including hardware encryption, picture and
video desensitization, SSL link encryption, and level III information protection certification of the central platform.
In 2023, with social and economic recovery, the commercial vehicle market will continue to develop toward
8ADAS: Advanced Driving Assistance System; DMS: Driver Monitor System, a fatigue driving detection system for drivers.
9FCW: Forward Collision Warning; LDW: Lane Departure Warning; PCW: Pedestrian Collision Warning; BSD: Blind Spot
Detection.
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greater application, integration and practicality. The truck market will see wider application of ADAS/DMS and the
integration of a pilot vehicle system with an overload and overspeed monitoring system in more provinces. For the
bus market, a majority of provincial capitals have planned the construction of an intelligent bus 3.0 system to
promote integrated application of bus monitoring, bus scheduling, passenger flow statistics, ADAS/DMS, blind spot
collision warning, pedestrian priority at crosswalk, electronic rearview mirror, 5G-V2X and other subsystems. As
real estate and new urban infrastructure recover, the construction vehicle market will bounce back. Fatigue driving
monitoring, aggressive driving monitoring and blind spot collision warning systems will gradually become standard
features in new vehicles and connected with police traffic check points and E-police for composite management to
lower the traffic accident rate. There is a clear trend in the international markets towards building video networks
for buses, school buses and other fields, and accelerating intelligent application.
HikAuto will continue to increase R&D investment and innovate products and solutions in the commercial
vehicle market to reduce traffic accidents, lower accident losses, and improve transportation efficiency, providing
better services for customers worldwide.
5.5 Innovative Business - HikSemi
HikSemi is committed to providing worldwide users with professional overall storage solutions, with a focus
on industrial control, data center, video surveillance, end-consumer and other application scenarios. With complete
design, development and manufacturing capabilities, the company operates four product lines: solid-state hard disks,
front-end storage, embedded storage and flash memory application.
5.5.1 Key Products
Guided by the mission to meet the diversified storage needs of users, HikSemi continues to iterate and expand
its four product lines by attaching importance to R&D investment, unremittingly promoting technological
innovation, and enriching application scenarios.
1）Solid-state disk (SSD)
For video surveillance scenarios, the company released the industry’s first QLC-based embedded ultra-
compact SSD for video surveillance in 2022. The product looks like a chip with an area of only 3.2 cmand a
capacity of up to 480 GB, further improving storage density.
For data center applications, the company has launched the D300 series of enterprise-grade SSD. This series
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significantly improves data reliability by integrating the next generation of error correction engines, and reached
99% to 99.999% QoS with the support of new scheduling algorithms after laboratory testing.
For the end consumer market, the company has released DRAMless PCIe4.0 for use in the next generation
of high-performance and high-speed applications which expanded the product matrix. Featuring host control and
higher Flash operating frequency and host memory buffer technology, after laboratory testing, this series without
independent cache has a maximum read speed of more than 7 GB/S and is power efficient. The performance of this
product has reached the industry’s leading level, which can meet the needs of content creators and e-sports
enthusiasts.
2）Front-end storage products
Consolidate advantages and expand applications of memory cards. HikSemi launched a memory card in
the video surveillance field in 2015. Over seven years of solid technology accumulation, the company has continued
to consolidate its competitive advantages. It has launched card series of different themes for each application
scenario in the end consumer market, and introduced 512GB memory cards for the mass storage market, providing
better options for storage expansion.
Improve the presence of memory products. HikSemi actively expands its share in the DDR4 memory market
while developing the DDR5 memory market through technology iteration. The company continues to introduce
consumer memory products for personal computers as well as industry memory products for autonomous servers.
In 2022, the company launched U100 WAVE, a new DDR4 RGB memory stick. The product is made from high-
quality particles, and supports XMP3.0 one-click overclocking. It features a pure white PCB and a 2.5D tempered
glass vest strip with exquisite RGB light strips, achieving a balance of performance and appearance. It is gradually
gaining popularity in the personal computer assembly market.
3）Embedded storage products
Combining strict quality control with technological innovation, the company continues to expand the
application of embedded storage products in industry segments and provides more reliable products, more relevant
solutions and more professional localization services. As of 2022, the company’s embedded storage products have
covered SPI Nor Flash, SLC NAND Flash, eMMC, LPDDR, DDR4 and other product series that meet the needs of
customers in the electric power, network communication, cell phone, security, smart home and other industries.
4）Flash memory application products
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HikSemi keeps introducing new products and services, while continuing to optimize the in-depth application
of production and R&D technologies to respond to new evolving scenarios and personalized needs.
Continuous innovation in mobile storage products: HikSemi takes user data protection seriously. The
company combines Hikvision cloud backup software, Hi Backup with a U disk and a mobile SSD, breaking the
barriers between online and offline data for users. HikSemi released USB 4.0 mobile SSD, leading industry
upgrading.
Greater presence of flash peripherals: The company has created a range of high-performance laptop
peripherals, including a dual-protocol hard disk cartridge supporting NVME and SATA interfaces, and a docking
station with storage function.
Home storage products focus on user needs and improve interactive experience: With core values of
security, convenience and intelligence, the company’s home storage products emphasize home data privacy and
security, and have been certified to ISO27001 and ISO27701 international privacy information management
systems. In 2022, the company released HikSemi Intelligent Storage UI 4.0 software. The product is perfect for
household applications and offers a convenient interaction experience. It utilizes recognition algorithm to make an
intelligent family photo album. Furthermore, the company has launched HIKSEMI_OS, an open platform for
intelligent AI devices, to provide an underlying operating system for the implementation of storage solutions in
different industries.
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5.5.2 Outlook
In 2022, China’s semiconductor storage industry experienced ups and downs, facing opportunities and
challenges. HikSemi maintained proper internal management, responded to market changes calmly, developed
channels steadily, and actively expanded the industry market, with sales revenue growing steadily for five
consecutive years. The company has a marketing network covering more than 150 countries and regions, and has
established cooperation with more than 3,000 enterprises worldwide.
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." The company will continue to explore user needs, and create differentiated products
for different scenarios. With a vision to become a leading provider of integrated storage solutions in China, HikSemi
will continue to provide consumers with safe and reliable storage devices, systems and solutions through technology
innovation, product innovation, marketing innovation and brand building.
5.6 Innovative Business - HikFire
HikFire is a provider of intelligent fire protection IOT and intelligent management solutions powered by
visualized IOT. By leveraging emerging technologies such as multi-dimensional perception, IOT, Internet of
Vision, cloud computing, big data and AI, as well as professional image processing, innovative security-fire
protection integration and IoT-information network integration technologies, HikFire provides products and
services for the construction and operation of corporate and municipal fire protection IOT system, and creates an
open fire protection ecosystem and a collaborative service system. Moreover, the company provides one-stop fire
safety system solutions and fire management service solutions for users in municipal public services, enterprises
and institutions, small and medium-sized users, aiming to create a four-dimensional intelligent fire management
system consisting of smart perception, smart prevention and control, smart management and smart rescue. The
company’s business scope covers traditional fire protection, intelligent fire protection, platform software, e-
commerce retail and other segments.
5.6.1 Main Business
1）Traditional fire protection: Enrich wired IOT products and further explore industry segments
HikFire has expanded its traditional fire protection product portfolio to fully cover the pre-installed market of
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general fire protection. The products are divided into nine major systems in four segments: early warning, fire alarm,
emergency evacuation and automatic fire control. In 2022, the company continued to develop and improve the
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.
Breakthrough in two-bus communication and low-power technology: As a key part of an automatic fire
alarm system and a linkage subsystem, the two-bus communication technology is commonly used to achieve node
power supply and communication. The company continuously upgrades and optimizes the basic technologies for
two-bus communication such as underlying modulation and demodulation, filtering protection, chip engine, power
management, wireless communication, bus protocol to improve the carrying capacity, anti-interference capability,
communication stability and communication distance of the two-bus automatic fire alarm system.
Innovation of product and industrial applications: In 2022, HikFire launched new products and systems
such as OS21 two-bus automatic fire alarm system, high-performance FS21 gas fire control system, and an
economical emergency lighting and indicator system. The company has accelerated the application of traditional
fire protection products in civil and industrial fields including industrial and commercial enterprises, culture,
education & health, intelligent buildings, financial services, and energy & metallurgy. By introducing the business
concept of traditional fire protection powered by IoT and vision, the company is helping users reduce comprehensive
construction and operation costs and improve the efficiency of fire and risk control. In addition, the company
actively explores the application of integrated fire prevention and control systems in the new energy sector. It has
released integrated security and fire protection system, integrated fire prevention and control system for wind farms.
Its three-level prevention and control system consisting of wind turbine prevention and control, wind farm
prevention and control, corporate prevention and control has been put into use, achieving breakthroughs in
application.
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2 ） Intelligent fire protection: Promote the establishment of the IoT for fire protection and improve
management and service efficiency of fire protection
As the traditional fire protection industry undergoes continued changes, the intelligent fire protection market
becomes increasingly mature. HikFire offers a full range of intelligent fire protection products while creating
operation and management IoT platform software for fire protection at the corporate, industrial and municipal levels
to meet the needs of different scenarios in different industries. Through fire protection IoT featuring multi-
dimensional perception, security-fire protection 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, improve fire management efficiency, and reduce overall operating costs. The company offers
fire protection IOT solutions for a number of industries according to their characteristics, including town and county
infrastructure, financial services, cultural relics and ancient buildings, education, smart architecture, industrial and
commercial enterprises, energy & metallurgy, elderly services, commercial chains, and new energy.
Breakthrough in dual-band fire and smoke detection technology: To address the pain points of many false
smoke alarms and high operation and maintenance costs in firefighting scenarios, HikFire has applied dual-band
photoelectric smoke detection technology and intelligent AI algorithms to the next generation of stand-alone
photoelectric smoke detectors. Experiments and field data have been used for algorithm training of these products
based on the reflection and scattering characteristics of different wavelengths on particles with different size such
as smoke, water vapor, dust, oil smoke. This ensures the accuracy and timeliness of smoke and fire detection, while
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significantly reducing false water vapor, dust and oil smoke alarms to improve reliability. This series of products
also have the advantages of temperature and humidity detection, network signal diagnosis, infrared noise elimination
and low-power consumption operation that reduce on-site operation and maintenance costs.
Implementation of multi-spectral fire fusion detection technology: Focusing on the demand of fire
detection and alarm at very early stage, HikFire continues to enrich and expand the multi-spectral sensing
dimensions. In 2022, the company released a new multi-spectral fire detector. The product integrates video image,
multi-band infrared flame detection and thermal imaging temperature sensing technologies to achieve recognition
of flame and smoke images, spectral analysis and non-contact temperature detection respectively. It is used to
accurately detect, warn and alarm fires in complex scenarios. The product has been technically qualified and
certified, suitable for fire prevention in large space, outdoor and key locations.
Four business platforms: HikFire creates a full-scenario application framework for corporate management,
operation and hosting, and government regulation scenarios through the establishment of fire protection IOT
standards, operation specifications and regulatory standards. The company aims to serve fire regulatory agencies,
social service organizations, enterprises and institutions, and end-users in Nine Small Businesses.
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3）E-commerce retail: Focus on fire safety for families and micro, small and medium-sized businesses and
enhance brand awareness
The frequent occurrence of fire emergencies has led to a rapid increase of people’s safety awareness in China,
stimulating the demand for fire safety products of individual consumers and small and medium-sized businesses.
The household fire protection product series holds great potential to promote the development of the fire protection
industry. HikFire has accelerated its e-commerce retail business by increasing the awareness, reputation and sales
of gas detection, smoke detection and simple fire extinguishing products and fire emergency kits on major e-
commerce platforms.
In 2022, HikFire released the next generation of smoke detection alarms and home combustible gas detectors
with different networking solutions to meet the diverse needs of users. HikFire’s home fire safety kits and
applications cover many aspects of fire protection such as automatic fire alarm, gas alarm, active identification of
potential safety hazards, emergency fire extinguishing, escape and self-rescue. The company is committed to
improving customer satisfaction through technological innovation and compliance with high quality standards.
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5.6.2 Outlook
The next generation of digital technologies such as fire protection IOT, multi-dimensional perception, big data
and AI are accelerating the integration of traditional and intelligent fire protection. This increases the demand for
remote monitoring, management and control of fire protection, and further enhances the synergy between fire
protection and security systems, leading the industry into an era of AIOT with physical world and digital world
interconnected.
As fire protection reform deepens, AI application increases and safety awareness improves, there will be a
growing scope of business and an increasing number of application scenarios for the fire protection business.
HikFire will remain committed to technological innovation of the fire protection industry while striving to promote
the construction of the standard system. With a philosophy of openness and cooperation, the company will establish,
operate and manage intelligent fire protection IoT to provide one-stop solutions for customers and users that meet
more scenario-based fire safety needs.
5.7 Innovative Business - Rayin
Rayin is focusing on X-ray imaging technologies, dedicated to becoming a leading technology R&D,
manufacturing, sales and leasing services provider of invisible light detection equipment. With long-standing
expertise in X-ray technology, AI, IoT, etc., Rayin keep enabling technology and creating value for smart security
inspection and intelligent industrial manufacturing and other fields.
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5.7.1 Smart Security Inspection: Capacity Enhancement and Business Integration
Combining AI, multi-dimensional perception, AR reality and other technologies, Rayin has released the Ji
Xian 2.0 series of security inspection products to cover all aspects of intelligent security inspection including
intelligent identification, person-luggage association, AR reality command and dispatch, and data application. These
products serve as a model of intelligent, three-dimensional security inspection that integrate efficient detection,
information fusion, data analysis, real-time supervision and remote command, providing point-to-point and end-to-
end security inspection solutions for different scenarios such as rail transit, logistics, hospitals, schools, checkpoints,
and corporate loss prevention.
1）Smart security inspection in rail transit
Rayin’s smart security inspection solution for rail transit, represented by 6550/100100 series smart security
inspection products, provides centralized image interpretation, accurate person-luggage association, off-duty
detection and other functions to reduce security labor costs, regulate the behavior of security inspectors, and improve
the detection efficiency of prohibited goods. This smart solution allows comprehensive information integration,
process traceability and resource deployment for the security inspection business while ensuring the efficiency of
passenger traffic. These products facilitate a quick transformation of rail transit security inspection towards a digital
future.
2）Smart security inspection in logistics
Rayin’s smart logistics security solution, represented by high-speed, intelligent 140100 series of X-ray security
inspection machines, provides image-code association, intelligent image interpretation, centralized image
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interpretation, automatic rejection and other functions in logistic scenarios by utilizing industrial scanning cameras,
AI, multi-dimensional perception and other technologies. This smart solution aims to better detect, address and trace
hazards in the package delivery process, forming a comprehensive service chain and improving the efficiency of
package inspection.
5.7.2 Industrial Inspection: Anything Visible Can Be Inspected in the AI Era
Combining X-ray imaging with AI analysis algorithms, Rayin provides scenario-based industrial detection
products and solutions that intelligently detect foreign objects and defects in the industrial production process,
empowering customers through intelligent industrial applications.
Rayin industrial detection products are supported by dedicated high-performance processor and the next-
generation Raytina image enhancement engine for clearer, smarter and more efficient detection. Now it has been
widely used in product defect defection and electronic left-over materials counting in the scope of electronic
materials detection, in foreign object detection for packaging as well as flaw detection in the field of food and drug
inspection, and in internal flaw detection of castings in the area of industrial flaw detection, improving yield and
reducing production as well as management costs for enterprises.
5.8 Innovative Business - HikImaging
HikImaging, rooted in the medical technology industry, is committed to the research and application of multi-
dimensional perception, intelligent analysis, video/audio transmission and display control and other related
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technologies in medical scenarios. The company provides products, solutions and related services for customers in
the medical device industry, working with customers to promote the digital and intelligent transformation of the
operating and the clinic scenarios.
5.8.1 Rigid Endoscopic Imaging Solution for MIS (Minimally Invasive Surgery)
According to Ipsos Medtech’s report "Analysis of the Overall Development Trend of National Surgery Volume
from 2015 to 2020", the compound growth rate of MIS penetration rate per million population in China increased
by 28.5% from 2015 to 2019. As the characteristics of fast recovery and small trauma, MIS is adopted by more and
more doctors and patients. In the future, the proportion of MIS will become one of the indicators for hospital
assessment, which will further promote the development of MIS and its technological upgrading.
In 2022, HikImaging launched the MIK5 endoscopic image processing hardware platform, as well as the 4K
fluorescence solution, the first-generation 3D solution, and the 4K white light solution.
HikImaging’s 4K fluorescence solution is the first solution in China that integrates 4K, fluorescence and auto-
focus technologies. Its unique multi-color gradient fluorography can meet the needs of a variety of complex
surgical applications, and the auto-focus function enables the endoscope to automatically focus on objects instead
of manual focus, greatly improving focus accuracy and ease of use. The first-generation 3D solution is the first
parallax-adjustable 3D solution in China, providing users with personalized parallax settings and improving 3D
visual comfort. The 4K white light series is equipped with the new MIK5 image processing module, offering
excellent imaging quality. In 2022, HikImaging saw an increase in the number of bids won from hospitals for its
4K white light and fluorescence solutions, improving the core technology of domestic high-end medical
equipment.
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5.8.2 Electronic Endoscopic Imaging Solution for MIP (Minimally Invasive Procedure)
HikImaging offers a wide range of electronic endoscopic imaging solutions and the core products include the
all-in-one dual-lens image processor, the portable image processor and electronic endoscopes. Its electronic
endoscopes include four-way biliary endoscopes for gastrointestinal endoscopy, ureteroscopes and cystoscopes for
urology, bronchoscopes for respiratory medicine and hysteroscopes for gynecology.
The market demand for disposable electronic microscopes is huge. As the domestic and international general
safety regulations and standards continue to tighten, there are higher requirements for safety specifications and
electromagnetic compatibility, as well as for image processors and key components of electronic microscopes.
HikImaging provides electronic microscope solutions that comply with safety (GB9706.1), electromagnetic
compatibility (YY0505) and electronic microscope (YY/T1587) standards, helping customers to pass registration
and verification at one time.
5.8.3 ORMS (Operation Video Management System) Solution
HikImaging combines the ORMS product line with the MIS and MIP lines to provide customers with an overall
solution for operating room scenarios. The ORMS solution includes medical displays and operating room video
management products.
In 2022, HikImaging launched 27-inch and 32-inch surgical displays, which conform to the medical standard
IEC60601. The characteristics of strong anti-interference and low latency significantly improve the display stability
of endoscopic camera systems. The company also launched endoscopy workstation software to further improve the
overall solution for operating room scenarios.
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In the past few years, the demand for teleconsultation and remote learning has increased. HikImaging has
launched the next-generation intelligent 5G full-link 4K video management system, including video recording hosts,
surgical field cameras, panoramic cameras and platform software. The system applies the mainstream real-time
audio and video transmission technology framework to the telemedicine field. Combining an optimized underlying
transmission engine with the company’s advantages in coding and decoding technologies, the system supports
smooth multi-party interaction of 4K endoscopic ultra-clear images in a cross-network environment and improve
user experience. Additionally, the system supports private hybrid cloud deployments and local storage of business
data to guarantee the safety of medical data.
The development of the medical device industry is an issue that concerns not only the industry, but people’s
well-being. HikImaging continues to overcome technical difficulties, helping medical device manufacturers to
improve the competitiveness of their products, and driving partners to move towards the middle- and high-end of
the value chain. The company also endeavors to promote the expansion and allocation of high-quality medical
resources in lower-tier markets, making high-level medical services accessible to the general public.
The demand for medical devices is expected to grow in China due to policy support, increasing aging
population and a gradual increase in the number of patients with chronic diseases. HikImaging will continue to
invest in R&D in multi-dimensional perception, intelligent analysis, video/audio transmission-display-control, and
other technical fields while accelerating product innovation and actively expanding the practical application of new
technologies and processes in different industries to provide industry users and customers with a variety of high-
performance products and solutions. In addition, the company will continuously improve the quality system, service
system and supply chain system, increase customer satisfaction, and cooperate with industry ecosystem partners to
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drive advances in medical technology and play a role in the construction of "Healthy China".
II. Analysis of Core Competitiveness
Demands 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. Hikvision has established and consistently improving the operating mechanism
and organizational systems to adapt to the fragmented demands, and has continuously promoted the refinement and
optimization of baseline products and standardized businesses while meeting personalized demands. Under the
strategic traction of AIoT, Hikvision explores market opportunities with technologies, products and solutions,
helping people establish perception, connection, computing and applications between people and things as well as
between things. We firmly believe that AIoT breeds broad market opportunities, and we expend great effort pursuing
science and technology for good, in a hope to enable everyone to enjoy a brighter future.
1. Continues to invest in R&D to build a comprehensive technology and product mix
Hikvision has gradually expanded perception technology from visible light to infrared, ultraviolet, X-ray,
millimeter wave and other fields, explored sound wave, ultrasonic and other fields, continuously developed
perception methods such as temperature, humidity, pressure, magnetism, and further expanded upon the fusion of
multi-dimensional perception applications.
During the reporting period, Hikvision's investment in R&D accounted for over 11.80% of its total revenue,
while the number of R&D and technical service personnel continued its stable growth, accounting for nearly 50%
of Hikvision's total workforce. The Company will continue to maintain high intensity of technical investment,
consolidate the foundation of AIoT technology, enrich the varieties of AIoT devices, concentrate on exploring the
application opportunities of AIoT and consolidate the market position in the field of AIoT.
2. Continues to gain insight into customer needs and improve of domestic and foreign marketing network
In China, the Company facilitated by its provincial-level and city-level business centers, forming a hierarchical
city-based marketing system prioritized by economic development. Overseas, the Company formed 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 has long-term and consistent investment in the construction of marketing
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system, insisting on building localized talent teams, attaching great importance to the accumulation of partners, and
forming a sound marketing network for business connection, information interaction and resource optimization.
Hikvision has expanded industry applications through dividing business into three business groups: public
business group (PBG), enterprise business group (EBG) and SME business group (SMBG). The overseas
distribution business and industry business are complementary to one another, so Hikvision has implemented the
strategy of "One policy for one country". Through the organic synergy of industry-driven region, region-driven
industry, marketing-driven R&D, and R&D-driven marketing helps the Company 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. Continues to build flexible manufacturing system and ensure supply chain stability
Hikvision sells nearly 30,000 different models of hardware equipment and often encounter scattered orders,
frequent changes in demands, and high requirements for the completeness of supply chain. Therefore, the Company
continues to build flexible and efficient manufacturing system, improving its capacity for lean production and
intelligent manufacturing to meet the large scale demands of multiple small-lot production. Hikvision operates
domestic manufacturing bases in Hangzhou Tonglu, Chongqing and other places, orderly promotes the construction
and expansion for new manufacturing bases, and supports the global product supply through local factories in India,
Brazil, and United Kingdom.
The Company has helped over a thousand supplier partners around the world to achieve rapid development,
helping them quickly iterate and improve upon raw-materials, and components and parts over the long-term, which
in turn has strengthened the stability of the overall industrial supply chain. In response to the supply chain
uncertainly caused by sanctions, the Company has continued to maintain large stockpiles of raw materials.
4． Continues to promote the evolution of management system and improve the operating efficiency
As for business direction and goal setting, the Company has annually updated and applied the strategic planning
and annual business planning based on the BLM strategic planning methodology, facilitating effective
communication and alignment of each business and functional departments to ensure clear goals and division of
responsibilities. In terms of internal management, focusing on revolution of management, Hikvision has
implemented over 100 management reform initiatives each year to optimize resource layout and improve overall
capabilities. Relying on the construction of IT system, the Company continuously optimized business processes and
improved efficiency of business system. Furthermore, the Company continues to refine the digital management
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capabilities in many aspects including promoting the identification and management of financial risks, building a
digital quality management system, improving internal control mechanisms, pursing the construction of compliance
systems, protecting innovation achievements, and etc.
5. Continues to build people-oriented organizational climate and unite outstanding talents
Hikvision considers talents as the most important resource of enterprise competitiveness, recruiting talent from
all around the world, while adhering to the employment concept of "growing together with talents". By improving
the talent discovery and performance appraisal mechanism and identifying and assigning people through scientific
approach, the Company has boosted the morale and creativity of employees to improve organizational capabilities.
The comprehensive employee reward system has been formed, which consists of compensation and benefits, equity
incentives, innovative business co-investment, and etc., further developing the distribution mechanism for
employees to participate in and benefit from the Company's growth. Employees participating in equity incentives
and co-investment can obtain long-term returns through their contributions to the Company's performance,
coordinating the long-term development pf business with the continuous employee growth.
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III. Core Business Analysis
1. Overview
In 2022, the world is facing increased macro-economy volatility, complicated geopolitical layout and escalated
sanctions from the US and Europe, and China is facing pressures such as decreased demands, supply shock and
weak expectations, which has posed great challenges to business operations. Adhering to the business philosophy
of "professionalism, honesty, and integrity", Hikvision responded to the uncertainties in a proactive and prudent
manner. During the reporting period, the Company achieved a total revenue of RMB83.17 billion, representing
year-over-year growth of 2.14%, and realized a net profit attributable to shareholders of the Company of RMB12.84
billion, representing year-over-year decrease of 23.59%.
(1) Sustained investment in R&D and formed a solid technical foundation
In 2022, Hikvision invested RMB9.81 billion in R&D, accounting for 11.80% of the Company’s total revenue.
The Company had about 28,000 R&D and technical service personnel, upholding its commitment to significant
R&D investment. Guided by the strategy, the Company continues to focus on the main businesses and persistently
optimizes the resource allocation based on product innovation and market opportunities.
In order to form a comprehensive and leading technology mix, the Company continues to promote the
development of perception, image and optical technologies. In terms of perception technology, a full-spectrum
perception technology platform including visible light, infrared, X-ray, millimeter wave and other spectral bands
has been established. Through years of cultivation, the Company currently has over 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 and commercializing the products, and continue to develop new technologies
and products to lead the development of the industry.
(2) Leveraged on resource allocation to seize business opportunities and cope with the changes in the
external environment
In 2022, the changing market demand and customer expectation was due to the changes in the global pattern
and the downturn of the domestic economy, which result in the deviation of the Company's resource input and
output. In terms of the domestic businesses, taking problem solving as the guide, the Company leveraged on resource
allocation to seize business opportunities. For overseas market, the Company implemented the "One policy for one
country" strategy and continued to penetrate into the markets of different countries to enhance the operating
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efficiency.
(3) Maintained safe inventory level and ensured stable supply chain
In 2022, in face of various uncertainties, the Company worked closely with partners to expand the supply of
important raw material and promoted the diversification of the supply chain. Meanwhile, the Company increased
the inventory level of important raw material, in order to ensure supply continuity. Hikvision continued to promote
lean production management, improved the level of intelligent manufacturing, optimized delivery efficiency and
ensured the steady development of business.
(4) Supported the Company’s stable development by diversified business layout
In 2022, the three domestic business groups were under pressure due to the fluctuation of macro-economy, but
the Company expects that there will still be great growth in the future because the digital transformation promoting
high quality development is the doubtless long-term trend. Even though the overseas market was faced by inflation,
geopolitical risk and other issues, the Company's overseas market share continued to increase based on the strong
supply capacity and solid business development. The innovative businesses maintained a fast growth.
The diversified business layout is the guarantee of the Company’s stable growth. Different businesses form
good synergy and interaction, which together help the Company to achieve stability and long-term sustainable
development.
(5) Optimized the marketing system and improved the operational efficiency
In 2022, the Company continued to optimize the marketing network, bringing itself closer to customers and
users. Hikvision has 32 provincial business centers and more than 300 city branches and offices nationwide, as well
as 72 overseas branches to provide products and services to more than 150 countries and regions around the world.
The Company continues to advance process change management, enhance 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.
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2. Revenue /cost of sales and services
1) Revenue structure
Unit：RMB
2022 2021
YoY Change
Proportion to Proportion to (%)
Amount Amount
revenue revenue
Revenue 83,166,321,681.14 100.00% 81,420,053,539.27 100.00% 2.14%
Classified by industry
AIoT products and services 83,166,321,681.14 100.00% 81,420,053,539.27 100.00% 2.14%
Classified by product
Products and services for
65,873,570,961.21 79.21% 65,145,683,074.74 80.01% 1.12%
main business 10
Constructions for main
2,222,876,059.14 2.67% 4,003,746,727.88 4.92% -44.48%
business
Subtotal 68,096,447,020.35 81.88% 69,149,429,802.62 84.93% -1.52%
Smart home business 4,077,290,933.03 4.90% 3,948,427,896.29 4.85% 3.26%
Robotic business 3,916,176,952.59 4.71% 2,761,636,666.33 3.39% 41.81%
Thermal imaging business 2,790,033,744.03 3.35% 2,214,127,005.65 2.72% 26.01%
Auto electronics business 1,905,289,927.53 2.29% 1,431,895,295.48 1.76% 33.06%
Storage business 1,616,267,518.08 1.94% 1,384,585,038.78 1.70% 16.73%
Other innovative businesses11 764,815,585.53 0.92% 529,951,834.12 0.65% 44.32%
Subtotal 15,069,874,660.79 18.12% 12,270,623,736.65 15.07% 22.81%
Classified by region
Domestic 56,890,890,769.45 68.41% 59,434,989,705.17 73.00% -4.28%
Overseas 26,275,430,911.69 31.59% 21,985,063,834.10 27.00% 19.51%
Note: The data listed in the subtotals may differ slightly from the aggregated results of the relevant individual data
due to rounding.
Revenue structure12
10 Main business refers to the business parts other than the innovative businesses.
11 Other innovative businesses include the products and services of the innovative business subsidiaries, such as
HikFire, Rayin and HikImaging. Same below.
12 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
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Unit: RMB 100mn
2022 2021 YoY Change (%) 2020
PBG 161.35 191.61 -15.79% 159.87
EBG 165.05 166.29 -0.75% 147.24
Domestic main SMBG 124.97 134.90 -7.36% 92.09
business
Other products and
services for main 9.27 9.43 -1.70% 9.71
business
Overseas main Products and services
220.32 189.26 16.41% 164.44
business for main business
Innovative businesses13 150.70 122.71 22.81% 61.68
Total 831.66 814.20 2.14% 635.03
2）Industries, products or regions accounting for more than 10% of the Company's revenue or operating
profit
√ Applicable □ Inapplicable
Unit: RMB
YoY Change YoY Change
Cost of sales and YoY Change
Revenue Gross margin (%) of operating (%) of gross
services (%) of revenue
cost margin
Classified by industry
AIoT products and
83,166,321,681.14 47,996,254,466.32 42.29% 2.14% 5.88% -2.04%
services
Classified by product
Products and
services for main 65,873,570,961.21 37,063,587,434.45 43.74% 1.12% 6.07% -2.62%
business
Constructions for
2,222,876,059.14 1,672,876,250.28 24.74% -44.48% -45.76% 1.78%
main business
Innovative
15,069,874,660.79 9,259,790,781.59 38.55% 22.81% 26.83% -1.95%
businesses
Subtotal 83,166,321,681.14 47,996,254,466.32 42.29% 2.14% 5.88% -2.04%
Classified by region
Domestic 56,890,890,769.45 33,093,858,433.32 41.83% -4.28% 0.27% -2.64%
Overseas 26,275,430,911.69 14,902,396,033.00 43.28% 19.51% 20.93% -0.67%
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
business's products and services, excluding revenue from innovative businesses.
13 Innovative businesses' revenue includes its domestic and overseas revenue
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period.
□ Applicable √ Inapplicable
3）If revenue from physical products sales greater than revenue from providing services
√ Yes □ No
Industry Item Unit 2022 2021 YoY Change (%)
Sales volume Per unit 202,935,192 194,410,923 4.38%
AIoT products and
services
Output volume Per unit 207,698,031 207,744,025 -0.02%
Explanation on why the related data varied by more than 30% on a YoY basis
□Applicable √Inapplicable
4) Fulfillment of signed significant sales contracts and procurement contracts by the reporting period
□ Applicable √Inapplicable
5) Cost of sales and services structure
Classified by industry
Unit: RMB
2022 2021
Proportion to Proportion to YoY Change
Industry Item
Amount cost of sales Amount cost of sales (%)
and services and services
AIoT products Cost of sales
47,996,254,466.32 100.00% 45,329,400,332.65 100.00% 5.88%
and services and services
Classified by product
Unit: RMB
2022 2021
Proportion to Proportion to YoY Change
Product Item
Amount cost of sales Amount cost of sales (%)
and services and services
Products and Cost of sales
services for main and services 37,063,587,434.45 77.22% 34,944,137,550.04 77.09% 6.07%
business
Constructions for Cost of sales
and services 1,672,876,250.28 3.49% 3,084,364,818.86 6.80% -45.76%
main business
Innovative Cost of sales
and services 9,259,790,781.59 19.29% 7,300,897,963.75 16.11% 26.83%
businesses
Cost of sales
Subtotal and services 47,996,254,466.32 100.00% 45,329,400,332.65 100.00% 5.88%
6) Any change in consolidation scope during the reporting period
√Yes □ No
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During the reporting period, the Company established two domestic subsidiaries and four overseas subsidiaries,
acquired one subsidiary, and liquidated and cancelled three subsidiaries. All of this result in changes in the scope of
its consolidation scope. For details, please refer to changes in the consolidation scope in Note (Ⅵ) to the financial
statements.
7) Significant change or adjustment of the Company’s business, products or services during the reporting
period:
□ Applicable √ Inapplicable
8) Major customers and suppliers:
Sales to major customers of the Company
Sales to top five customers (RMB) 2,024,692,757.25
Total sales to top five customers as a percentage of the total sales for the year (%) 2.43%
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 814,903,094.87 0.98%
2 Second 333,144,012.47 0.40%
3 Third 310,497,692.61 0.37%
4 Fourth 300,071,290.68 0.36%
5 Fifth 266,076,666.62 0.32%
Total -- 2,024,692,757.25 2.43%
Other information of major customers
□Applicable √Inapplicable
Major suppliers of the Company
Total purchases from top five suppliers (RMB) 8,294,123,264.58
Total purchases from top five suppliers as a percentage of the total purchases for the year (%) 17.58%
Total purchases from the related parties in the top five suppliers as a percentage of the total
6.54%
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 2,769,664,258.70 5.87%
2 Second 1,719,471,215.65 3.65%
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Hikvision 2022 Annual Report
No. Supplier Name Purchase Amount (RMB) Percentage of total purchase for the year
3 Third 1,364,276,241.23 2.89%
4 Fourth 1,316,427,377.50 2.79%
5 Fifth 1,124,284,171.50 2.38%
Total -- 8,294,123,264.58 17.58%
Other information of major suppliers
□ Applicable √ Inapplicable
3. Expenses
Unit: RMB
YoY Change
2022 2021 Note of significant change
(%)
Continue to increase investment in domestic
Selling expenses 9,773,457,336.23 8,586,443,668.02 13.82%
and overseas marketing networks
Due to the expansion of the Company's
Administrative expenses 2,642,113,372.00 2,132,250,463.96 23.91% business scale and increased number of
employees
R&D expenses 9,814,444,260.55 8,251,645,101.39 18.94% Continue to increase R&D investment
Affected by foreign exchange rate fluctuations,
Financial expenses -990,401,533.32 -133,343,257.84 -642.75%
foreign exchange income increased
4. R&D Investment
√Applicable □Inapplicable
R&D personnel of the Company
2022 2021 Change Percentage
Number of R&D staff (ppl) 27,951 25,352 10.25%
R&D staff as percentage of Total 47.96% 48.06% -0.10%
headcount
Education structure of R&D staff - - -
Bachelor degree 17,376 16,305 6.57%
Master’s degree 8,528 7,159 19.12%
Master’s degree or above 162 129 25.58%
others 1,885 1,759 7.16%
Age composition of R&D staff - - -
Under 30 years old 16,442 15,388 6.85%
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2022 2021 Change Percentage
30-40 years old 10,844 9,425 15.06%
Over 40 years old 665 539 23.38%
R&D investment of the Company
2022 2021 Change Percentage
Amount of R&D expenses (RMB) 9,814,444,260.55 8,251,645,101.39 18.94%
R&D expenses as a percentage of
11.80% 10.13% 1.67%
revenue
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 revenue 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 2022 2021 YoY Change (%)
Subtotal of cash inflows from
92,669,076,379.69 90,984,859,750.26 1.85%
operating activities
Subtotal of cash outflows from
82,504,940,997.31 78,276,335,063.27 5.40%
operating activities
Net cash flows from operating
10,164,135,382.38 12,708,524,686.99 -20.02%
activities
Subtotal of cash inflows from
7,422,373,113.52 6,370,051,168.33 16.52%
investing activities
Subtotal of cash outflows from
11,147,754,175.76 9,526,380,351.62 17.02%
investing activities
Net cash flows from investing
-3,725,381,062.24 -3,156,329,183.29 -18.03%
activities
Subtotal of cash inflows from
14,375,530,041.46 6,123,487,832.52 134.76%
financing activities
Subtotal of cash outflows from
15,831,448,254.21 15,914,985,474.12 -0.52%
financing activities
Net cash flows from financing
-1,455,918,212.75 -9,791,497,641.60 85.13%
activities
Net increase in cash and cash
5,211,446,085.37 -420,893,449.11 1338.19%
equivalents
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Hikvision 2022 Annual Report
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 payroll
during the reporting period; the main reason for the change in net cash flow from investing activities was the
purchase of long-term assets during the reporting period; the main reason for the change in net cash flow from
financing activities was mainly due to the issuance of restricted shares and increase in capital absorption from the
listing of the subsidiary 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
□ Applicable √ Inapplicable
IV. Non-core Business Analysis
□Applicable √Inapplicable
V. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit：RMB
December 31, 2022 December 31, 2021
YoY
Percentage Percentage Change Note of significant change
Amount of total Amount of total (%)
assets assets
Cash and bank balances 40,011,863,999.94 33.56% 34,721,870,931.36 33.43% 0.13% No significant change
Accounts receivable 29,906,294,410.40 25.08% 26,174,773,100.42 25.20% -0.12% No significant change
Operating income of
Contract assets 2,118,223,370.98 1.78% 1,411,372,624.91 1.36% 0.42%
constructions increased
Inventories 18,998,222,978.81 15.93% 17,974,112,407.60 17.31% -1.38% No significant change
Gains from investment in
joint ventures and
Long-term equity associated enterprises
1,252,033,513.41 1.05% 982,165,546.45 0.95% 0.10%
investment increased, as well as other
changes in equity
increased
Projects of Security
Industrial Base (Tonglu) -
Fixed assets 8,539,842,630.68 7.16% 6,695,590,671.27 6.45% 0.71% Phase II Continued
Construction and
Innovation Industry Park
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Hikvision 2022 Annual Report
December 31, 2022 December 31, 2021
YoY
Percentage Percentage Change Note of significant change
Amount of total Amount of total (%)
assets assets
transferred to fixed assets
Increase in construction
investments on Science
Construction in process 3,770,803,300.80 3.16% 2,323,336,098.68 2.24% 0.92%
and Technology Parks in
various locations
Right-of-use assets 574,478,326.31 0.48% 566,393,672.75 0.55% -0.07% No significant change
Lease liabilities 277,255,924.83 0.23% 317,951,879.21 0.31% -0.08% No significant change
Short-term borrowings 3,343,071,972.89 2.80% 4,074,962,469.97 3.92% -1.12% No significant change
Contract liabilities 2,644,496,508.36 2.22% 2,580,894,226.59 2.48% -0.26% No significant change
Long-term borrowings 7,522,315,341.60 6.31% 3,284,371,642.52 3.16% 3.15%
Increase in demands for
Non-current liabilities
868,197,272.46 0.73% 596,915,360.58 0.57% 0.16% long-term working capital
due within one year
High proportion of overseas assets
□ Applicable √ Inapplicable
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Hikvision 2022 Annual Report
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
Difference on Provision
Profit or loss from translation of for decline
Purchased
change in fair financial in value Sales during
Item Opening balance amount during Other changes Closing balance
value during the statements during the the period
the period
period dominated in current
foreign currency period
Financial assets
1. Derivative financial assets 34,320,010.83 -21,549,304.93 36,732.46 12,807,438.36
2. Other non-current financial assets 438,724,172.22 -69,793,177.28 83,962,245.00 29,000,000.00 423,893,239.94
3. Receivables for financing 1,316,035,122.06 168,183,136.68 1,484,218,258.74
Subtotal of financial assets 1,789,079,305.11 -91,342,482.21 36,732.46 83,962,245.00 29,000,000.00 168,183,136.68 1,920,918,937.04
Financial liabilities 4,062,317.57 -64,225,038.68 12,329.32 68,299,685.57
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period:
□ Yes √ No
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Hikvision 2022 Annual Report
3. Assets right restrictions as of the end of the reporting period
Unit: RMB
Item Closing book value (RMB) Reasons for being restricted
Cash and bank balances 196,473,485.37 Various cash deposits and other restricted funds
Notes receivable 1,241,880,022.19 Endorsed to suppliers and discounted to banks
Receivables for financing 10,312.23 Pledge for issuance of bank’s acceptance bills
Accounts receivable 344,585,345.01 Pledge for long-term debts
Contract assets 120,072,855.46 Pledge for long-term debts
Fixed assets 81,627,645.88 Fixed assets leased out under operating leases
Intangible assets 39,314,886.51 Pledge and mortgage for long-term debts
Other non-current assets 1,607,546,382.61 Pledge for long-term debts
Total 3,631,510,935.26
VI. Investments
1. Overview
√Applicable □ Inapplicable
Investment in 2022 (RMB) Investment in 2021 (RMB) YoY (%)
4,686,051,570.44 2,534,882,042.80 84.86%
2. Significant equity investment during the current reporting period
□Applicable √Inapplicable
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3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
Unit: RMB
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
AIoT Announcement on Investment and
Chengdu Science and products Self- September 23, Construction of Chengdu Science
Self-built Yes 528,392,746.55 1,424,680,236.64 72.36% None
Technology Park Project and financing 2017 and Technology Park Project in
services Chengdu (No. 2017-033)
AIoT Announcement on Investment and
Hangzhou Innovation products Specific September 23, Construction of Hangzhou
Self-built Yes 399,241,430.12 792,552,212.28 100.00% None
Industry Park and Loan 2017 Innovation Industry Park Project
services in Hangzhou (No. 2017-034)
Announcement on Investment and
Security Industrial Base AIoT establishment of a wholly-owned
(Tonglu) - Phase II products Self- October 16, subsidiary in Tonglu and new
Self-built Yes 195,023,827.62 585,726,069.36 100.00% None
Continued Construction and financing 2014 construction of Hikvision Security
Project services Industrial Base (Tonglu) Project
(2014-044)
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Hikvision 2022 Annual Report
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
AIoT Announcement on Investment and
Xi’an Science and products Self- September 23, Construction of Xi’an Science and
Self-built Yes 329,131,701.34 510,141,028.55 22.39% None
Technology Park Project and financing 2017 Technology Park in Xi’an (2017-
services 031)
AIoT Announcement on Investment and
Wuhan Intelligence Industry products Self- September 23, Construction of Wuhan
Self-built Yes 340,890,130.67 362,495,271.16 15.19% None
Park Project and financing 2017 Intelligence Industry Park in
services Wuhan (2017-036)
AIoT Self-
EZVIZ Smart Home
products financing/
Product Industrial Base Self-built Yes 186,803,117.49 282,125,289.82 37.47% None - -
and Specific
Project (Infrastructure Part)
services Loan
AIoT
Security Industrial Base products Self-
Self-built Yes 207,632,208.04 256,401,113.99 33.30% None - -
(Tonglu) Phase III and financing
services
AIoT Announcement on Investment and
Shijiazhuang Science and products Self- March 22, Construction of Shijiazhuang
Self-built Yes 140,802,995.70 240,987,635.91 26.87% None
Technology Park Project and financing 2018 Science and Technology Park in
services Shijiazhuang (2018-016)
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Hikvision 2022 Annual Report
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
AIoT
Hefei Science and products Self-
Self-built Yes 77,569,482.71 96,324,257.68 17.80% None - -
Technology Park Project and financing
services
AIoT
Zhengzhou Science and products Self-
Self-built Yes 51,865,323.17 93,894,775.99 19.36% None - -
Technology Park Project and financing
services
AIoT
Chongqing Science and
products Self-
Technology Park Project- Self-built Yes 88,299,070.73 88,837,517.21 18.51% None - -
and financing
Phase Ⅲ
services
Announcement on Investment and
EZVIZ Intelligent AIoT
Construction of EZVIZ Intelligent
Manufacturing Chongqing products Self- August 11, 202
Self-built Yes 72,173,018.20 72,173,018.20 6.17% None Manufacturing Chongqing Base
Base Project(Infrastructure and financing 1
by the holding subsidiary (2021-
Part) services
052)
AIoT
Nanjing Science and Self-
Self-built Yes products 58,233,792.70 59,330,672.30 10.21% None - -
Technology Park Project financing
and
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Hikvision 2022 Annual Report
Reasons
for not
Cumulative
Fixed reaching
Investment during amount of
Invest assets Project Source of Project planned Disclosure Date
Project name the current reporting investment by the Disclosure Index (if applicable)
method investme industry funds schedule progress (if applicable)
period end of the current
nt or not and
reporting period
expected
benefits
services
AIoT
Nanchang Science and products Self-
Self-built Yes 49,487,530.31 55,299,275.67 11.26% None - -
Technology Park Project and financing
services
Total -- -- -- 2,725,546,375.35 4,920,968,374.76 -- -- -- -- --
Note: 1. In accordance with the Company's Authorization Management System, EZVIZ Smart Home Product Industrial Base Project, Security Industrial Base (Tonglu)
Phase III project, Hefei Science and Technology Park Project, Zhengzhou Science and Technology Park Project, Nanjing Science and Technology Park Project, and
Nanchang Science and Technology Park Project were approved by the Chairman of the Board of Directors. Chongqing Science and Technology Park Project-Phase
Ⅲ was approved by the Strategy Committee of the Board of Directors.
2. In accordance with the Company's Authorization Management System, new investments on fixed assets of Chengdu Science and Technology Park Project, Xi’an
Science and Technology Park Project, and Shijiazhuang Science and Technology Park Project were approved by the Strategy Committee of the Board of Directors.
New investments on fixed assets of Security Industrial Base (Tonglu) Phase III was 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 2022 Annual Report
(2) Derivatives Investments
√ Applicable □ Inapplicable
1) Derivative investments for hedging purposes during the reporting period
√ Applicable □ Inapplicable
Unit: 0,000 RMB
Gain or loss on Proportion of closing
Sold amount
Type of derivatives Initial investment changes in fair Changes in cumulative fair value Purchased amount during Closing investment amount to the
during the
investment amount value during the included in equity the reporting period amount Company’s net assets at the
reporting period
reporting period end of the reporting period
Foreign exchange
205,031.34 -8,577.43 - 977,421.97 - 235,153.63 3.44%
contract
Total 205,031.34 -8,577.43 - 977,421.97 - 235,153.63 3.44%
In accordance with the provisions of Accounting Standards for Business Enterprises (hereinafter referred to as "ASBE") No. 22 -
Recognition and Measurement of Financial Instruments, ASBE No. 24 - Hedge Accounting, ASBE No. 37 - Presentation of Financial
Accounting policies and specific accounting principles for
Instruments and other relevant regulations and guides, the Company correspondingly conducted accounting and reporting for foreign
hedging business during the reporting period and
exchange derivatives business carried out. The Company conducted initial and subsequent measurements on contracts of foreign
explanations on whether there have been significant
exchange derivatives by held-for-trading financial assets/ held-for-trading financial liabilities, and the fair value for held-for-trading
changes from the previous reporting period
financial assets and held-for-trading financial liabilities is determined by financial institutions based on trading data of open market.
There was no significant changes from the previous reporting period.
Explanations on actual gain or loss during the reporting There was a total of RMB55.19 million actual gains during the reporting period.
period
The Company's purpose was to avoid and prevent risks of exchange rate or interest rate fluctuations and prohibited any speculative
Explanations on the effect of hedging business actions, further improving the Company's ability to cope with risks of foreign exchange fluctuations, better avoiding and
preventing risks of foreign exchange rate and interest rate fluctuations, and enhancing its financial stability.
Capital source of derivatives investment The Company's own fund.
Risk analysis and control measures (including but not For details of the risk analysis and control measures, please refer to the Announcement on Conducting Foreign Exchange Hedging
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Hikvision 2022 Annual Report
Gain or loss on Proportion of closing
Sold amount
Type of derivatives Initial investment changes in fair Changes in cumulative fair value Purchased amount during Closing investment amount to the
during the
investment amount value during the included in equity the reporting period amount Company’s net assets at the
reporting period
reporting period end of the reporting period
limited to, market risk, liquidity risk, credit risk, operational Transactions in 2022 (NO. 2022-023) disclosed by the Company on April 16, 2022.
risk, legal risk, etc.) of holding derivatives during the
reporting period
The Company carried out recognition and measurement in accordance with the Accounting Standards for Business Enterprises
Change of market price or fair value of invested derivatives
Article 22 - Recognition and Measurement of Financial Instruments, Chapter VII "Determination of Fair Value". During the
during the reporting period; specific methods, related
reporting period, a total of RMB85.77 million of losses from changes in fair value of derivatives were recognized, and the fair
assumptions and parameter setting of the derivatives’ fair
value is determined according to the exchange rate and interest rate provided by banks and other pricing service institutions,
value analysis should be disclosed
measured and recognized on a monthly basis.
Prosecution (if applicable) None
Announcement date for approvals of derivatives investment
April 16, 2022
from the Board of Directors (if any)
Announcement date for approvals of derivatives investment
Inapplicable
from the general meeting of shareholders (if any)
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 and approval for conducting foreign exchange hedging business, as well as the Foreign Exchange
Specific opinions on the Company’s derivatives
Hedging Management System. Under the premise of ensuring normal production and operation, the Company conducts foreign
investments and risk control from independent directors
exchange hedging business, which enables the Company to avoid and 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.
2) Derivative investments for speculative purposes during the reporting period
□Applicable √ Inapplicable
There is no derivative investments for speculative purposes during the reporting period.
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5. Use of raised funds
□ Applicable √ Inapplicable
During the reporting period, there was no use of raised fund.
The details of the use of funds raised by EZVIZ Network, the Company's holding subsidiary, was disclosed on April 15, 2023 in Annual Report of Hangzhou EZVIZ
Network Co., Ltd Section Ⅵ (14) - Progress of the Use of Funds Raised on the website of Shanghai Stock Exchange ( www.sse.com.cn).
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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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
Zhejiang Zhiyuan Fire Safety Engineering Ltd. Transfer of equity in cash Business development
Shijiazhuang Sensortech, Technology Ltd. Cash contribution Business development
Hikvision Adriatic doo Beograd Cash contribution Expand overseas sales channels
Hikvision Technology Pte. Ltd. Cash contribution Expand overseas sales channels
Hikrobot Korea Limited Cash contribution Expand overseas sales channels
Hangzhou Xingrong Information Technology Ltd. Cash contribution Business development
Microimage Europe B.V. Cash contribution Expand overseas sales channels
Hangzhou Haikang Zhicheng Investment
Liquidation & cancellation Reorganization
Development Ltd.
Hangzhou Haikang Ximu Intelligent Technology Ltd. Liquidation & cancellation Reorganization
Microwave Solutions Limited Liquidation & cancellation Reorganization
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 sweep across thousands of industries with
unprecedented changes and it is not limited to a certain field or a certain industry, but a fundamental technology
affecting various industries.
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.
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Hikvision 2022 Annual Report
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 2023
(1) Balance and optimize the input of recourses to improve the efficiency, pursing high quality growth.
(2) Maintain high investment in R&D to improve the capability of product innovation, consolidating and
enhancing advantages in technology innovation.
(3) Facilitate cooperation between different business departments, as well as between main business and
innovative business, boosting the overall operational efficiency.
(4) Promote the city-based domestic marketing strategy and "One Country, One Policy" overseas marketing
strategy, focusing on core business and strengthening the regional penetration.
(5) Continue to build diversified supply system, keeping safe inventory levels and ensuring supply chain
stability.
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
21 investors
January 4, Headquarters CNINF, Investor Relations
Site research including China The Company's
2022 – meeting room Institutional Activity Record: From
and telephone Southern Fund operating conditions
January 26, of the investors January 4, 2022 – January
communication Management- and future prospects
2022 Company 26, 2022
Chen Zhuo, etc.
February 21, Headquarters Site Research Institutional 36 investors The Company's CNINF, Investor Relations
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Hikvision 2022 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
2022 –March meeting room and telephone investors including Anxin operating conditions Activity Record: From
11, 2022 of the communication Securities-Cheng and future prospects February 21, 2022 –March
Company Yuting, etc. 11, 2022
688 investors
Headquarters The Company's
Performance Institutional including Guojin CNINF, Investor Relations
meeting room operations in 2021
April 16, 2022 result investors; Fund Activity Record on April 16,
of the and the first quarter
conference call individuals Management-Li 2022
Company of 2022
Siyuan, etc.
694 investors
Headquarters
Performance Institutional including The Company's CNINF, Investor Relations
August13, meeting room
result investors; Changxin Fund operations in the Activity Record on August 13,
2022 of the
conference call individuals Management-Lu first half of 2022 2022
Company
Xiaofeng, etc.
489 investors
Headquarters
Performance Institutional including China The Company's CNINF, Investor Relations
October29, meeting room
result investors; Universal Asset operations in the Activity Record on October
2022 of the
conference call individuals Management- third quarter of 2022 29, 2022
Company
Zhan Jie, etc.
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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 and continuously improving 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
All shareholders of the Company have the equal status and full rights, especially small and medium
shareholders. During the reporting period, the Company held a total of 4 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 of general meetings of shareholders 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 illegally occupy the Company's funds or the Company illegally
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 and major company decisions are made and implemented by the Company.
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3. Directors and the Board of Directors
The Company's Board of Directors, operating in a normalized way, has exercised its authority 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 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 8 board meetings, reviewed and approved 61 proposals
including the Annual Report 2021 and its Summary, Proposal on Granting Restricted Shares to Grantees of 2021
Restricted Stock Plan, Proposal on the Plan of Repurchase Part of the Company's Public Shares, and Proposal on
the Initial Public Share Offering and Listing on the SZSE ChiNext Market of the Subsidiary of the Company,
Hangzhou Hikrobot Co., Ltd., etc.
4. Supervisors and Board of Supervisors
The Company's Board of Supervisors, operating in a normalized way, has exercised its authority invested by
the Articles of Association and relevant laws and regulations 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 7 Board of Supervisors’ meetings, reviewed and approved 37
proposals including the Annual Report 2021 and its Summary, Proposal on Granting Restricted Shares to Grantees
of 2021 Restricted Stock Plan, Proposal on the Plan of Repurchase Part of the Company's Public Shares, and
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Hikvision 2022 Annual Report
Proposal on the Initial Public Share Offering and Listing on the SZSE ChiNext Market of the Subsidiary of the
Company, Hangzhou Hikrobot Co., Ltd., etc.
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 Information Disclosure
Management Measures to disclose relevant information truthfully, accurately, completely, timely and impartially,
and thoroughly implemented the 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 73 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 12
consecutive years in the main board listed company information disclosure assessment.
7. Continue to improve the internal management system
In accordance with relevant laws and regulations of regulatory authorities such as the Company Law and the
Securities Law, requirements of normative documents and other internal management systems such as the Articles
of Association, the Rules of Procedure for the General Meeting of Shareholders, the Rules of Procedure for the
Board of Directors, the Authorization Management System, The Company continuously strengthened the internal
management, improved the governance structure, promoted the normative operation, and protected the legitimate
rights and interests of the Company and shareholders.
8. Investor relations activities
The Company has proactively organized result briefing conferences and investor research activities after the
disclosure of regular reports to actively listen to investors’ opinions and suggestions, and released the Investor
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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 was awarded "Top 100
Main Board Listed Companies", "Top 100 Main Board Listed Companies in ESG", "Outstanding Management
Team for the Year" and other awards in the 16th China’s Most Valuable Listed Company Selection hosted by the
Securities Times.
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.
(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
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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 illegal 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
4 proposals including the
2021 Restricted Stock Plan
(Revised Draft) and its
The 1st Extraordinary General Extraordinary
Summary were reviewed
Meeting of Shareholders in General Meeting 65.6154% January 17, 2022 January 18, 2022
and voted. For details,
2022 of Shareholders
please refer to the
Company's announcement:
No. 2022-002.
12 proposals including the
2021 Annual Report and
Summary were reviewed
Annual General
2021Annual General Meeting 67.3841% May 13, 2022 May 14, 2022 and voted. For details,
Meeting
please refer to the
Company's announcement:
No. 2022-035.
5 proposals including the
Proposal on the Second
Repurchase and
Cancellation of the Granted
but Unvested Restricted
The 2nd Extraordinary General Extraordinary
Shares under the 2018
Meeting of Shareholders in General Meeting 63.6392% October 10, 2022 October 11, 2022
Restricted Share Incentive
2022 of Shareholders
Scheme were reviewed and
voted. For details, please
refer to the Company's
announcement: No. 2022-
056.
10 proposals including the
Proposal on the Initial
The 3rd Extraordinary General Extraordinary Public Share Offering and
December 26,
Meeting of Shareholders in General Meeting 64.8159% December 27, 2022 Listing on the SZSE
2022
2022 of Shareholders ChiNext Market of the
Subsidiary of the Company,
Hangzhou Hikrobot Co.,
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Hikvision 2022 Annual Report
Ltd. were reviewed and
voted. For details, please
refer to the Company's
announcement: No. 2022-
073.
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
Other
Shares
increase
increased Reasons for
Commencement Termination Shares held at the Shares decreased or
Tenure during Shares held at the end of increase or
Name Title Gender Age of term of of term of beginning of the Period during the Period decrease
status the the Period (Shares) decrease of
office office (Shares) (Shares) of
Period shares
shares
(shares)
(Share)
Chen March 4,
Chairman Incumbent Male 58 June 19, 2008 0 0 0 0 0 --
Zongnian 2024
March 4,
Qu Liyang Director Incumbent Male 59 March 7, 2018 15,750 0 0 0 15,750 --
2024
Wang March 4,
Director Incumbent Male 72 March 5, 2021 35,000 0 0 0 35,000 --
Qiuchao 2024
Director,
Hu General December 28, March 4,
Incumbent Male 58 155,246,477 0 0 0 155,246,477 --
Yangzhong Manager 2001 2024
(CEO)
Director,
Standing
March 4,
Wu Weiqi Deputy Incumbent Male 59 March 1, 2003 8,631,089 0 0 0 8,631,089 --
2024
General
Manager
Wu Independent March 4,
Incumbent Male 63 March 5, 2021 0 0 0 0 0 --
Xiaobo Director 2024
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Hikvision 2022 Annual Report
Other
Shares
increase
increased Reasons for
Commencement Termination Shares held at the Shares decreased or
Tenure during Shares held at the end of increase or
Name Title Gender Age of term of of term of beginning of the Period during the Period decrease
status the the Period (Shares) decrease of
office office (Shares) (Shares) of
Period shares
shares
(shares)
(Share)
Independent March 4,
Hu Ruimin Incumbent Male 59 March 5, 2021 0 0 0 0 0 --
Director 2024
Independent March 4,
Li Shuhua Incumbent Male 52 March 5, 2021 0 0 0 0 0 --
Director 2024
Guan Independent March 4,
Incumbent Male 46 March 5, 2021 0 0 0 0 0 --
Qingyou Director 2024
Hong Supervisor March 4,
Incumbent Male 57 March 5, 2021 0 0 0 0 0 --
Tianfeng Chairman 2024
March 4,
Xu Lirong Supervisor Incumbent Male 60 March 21, 2018 303,000 0 0 0 303,000 --
2024
Lu March 4,
Supervisor Incumbent Male 69 March 5, 2021 0 0 0 0 0 --
Jianzhong 2024
Senior
Deputy December 18, March 11,
He Hongli Incumbent Female 50 331,500 0 0 0 331,500 --
General 2005 2024
Manager
Senior
Cai Deputy March 11,
Incumbent Male 52 April 8, 2016 109,500 0 0 0 109,500 --
Changyang General 2024
Manager
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Hikvision 2022 Annual Report
Other
Shares
increase
increased Reasons for
Commencement Termination Shares held at the Shares decreased or
Tenure during Shares held at the end of increase or
Name Title Gender Age of term of of term of beginning of the Period during the Period decrease
status the the Period (Shares) decrease of
office office (Shares) (Shares) of
Period shares
shares
(shares)
(Share)
Senior The grant of
Deputy October 11, March 11,
Xu Ximing Incumbent Male 50 197,000 0 0 90,000 287,000 2021 restricted
General 2016 2024
Manager shares
Senior
Deputy October 11, March 11,
Bi Huijuan Incumbent Female 52 273,000 0 0 0 273,000 --
General 2016 2024
Manager
Senior The grant of
Pu Deputy March 11,
Incumbent Male 46 March 21, 2018 295,900 0 0 90,000 385,900 2021 restricted
Shiliang General 2024
Manager shares
Senior
Deputy March 11,
Jin Duo Incumbent Male 58 March 10, 2015 109,500 0 0 0 109,500 --
General 2024
Manager
Senior
Deputy
General The grant of
March 11,
Jin Yan Manager, Incumbent Female 44 July 22, 2015 284,000 0 0 80,000 364,000 2021 restricted
2024
Person in shares
charge of
finance
Senior The grant of
Huang March 11,
Deputy Incumbent Female 41 April 8, 2016 402,500 0 0 80,000 482,500 2021 restricted
Fanghong 2024
General shares
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Hikvision 2022 Annual Report
Other
Shares
increase
increased Reasons for
Commencement Termination Shares held at the Shares decreased or
Tenure during Shares held at the end of increase or
Name Title Gender Age of term of of term of beginning of the Period during the Period decrease
status the the Period (Shares) decrease of
office office (Shares) (Shares) of
Period shares
shares
(shares)
(Share)
Manager,
Board
Secretary
Senior
Chen Deputy March 11,
Incumbent Male 52 March 21, 2018 0 0 0 0 0 --
Junke General 2024
Manager
Senior
The grant of
Deputy March 12, March 11,
Xu Peng Incumbent Male 47 77,244 0 0 70,000 147,244 2021 restricted
General 2021 2024
shares
Manager
Senior
Guo Deputy March 12, March 11,
Incumbent Male 51 44,280 0 0 0 44,280 --
Xudong General 2021 2024
Manager
Total -- -- -- -- -- -- 166,355,740 0 0 410,000 166,765,740 --
Note:
(1) Number of shares held at the beginning of the period, shares increased during the period, shares decreased during the period, other increase or decrease of shares,
and shares held at the end of the period for directors, supervisors, and senior management personnel above are all shares directly held by them accordingly, including
restricted shares.
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Hikvision 2022 Annual Report
Any resignation of directors or supervisors and dismissals of senior management personnel during their term of office during the reporting period.
□Yes √No
Change of directors, supervisors and senior management personnel
□Applicable √Inapplicable
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Hikvision 2022 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.
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
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Hikvision 2022 Annual Report
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
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),
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Hikvision 2022 Annual Report
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.
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 Investment Management Co., Ltd. (上海方广投资管理
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
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
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Hikvision 2022 Annual Report
accountant of Zhongxinghua Certificated Public Accountants LLP Shanghai Branch, 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.
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.
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.
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Hikvision 2022 Annual Report
Mr. Pu Shiliang (浦世亮): Born in 1977, doctor of engineering, a senior engineer. He joined Hikvision in April
2006 and held various positions in the Company, including R&D engineer, R&D manager, R&D director, dean of
the R&D institute, and chief expert. He currently serves as a senior deputy general manager of the Company.
Mr. Jin Duo (金铎): Born in 1965, bachelor degree in engineering, a senior engineer. He served as a technician,
assistant to engineers, an engineer and a senior engineer of the 52nd Research Institute from July 1986 to June 2004.
He joined Hikvision in July 2004 and served as general manager of Hangzhou Branch, and a deputy general manager
of the Company. Mr. Jin currently serves as a senior deputy general manager of the Company.
Ms. Jin Yan (金艳): Born in 1979, master degree in management, an accountant. She joined Hikvision in 2004 and
held various positions at the Company, including financial manager, the general manager of the Financial
Management Center, and a deputy general manager and the person in charge of finance and accounting. Ms. Jin
currently serves as a senior deputy general manager and the person in charge of finance and accounting of the
Company.
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.
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Hikvision 2022 Annual Report
Position held in shareholders’ entities
√Applicable □ Inapplicable
Position in shareholders’ Commencement Termination of the Compensation and
Name Shareholder's entity term allowance from the
entities of the term
shareholders' entity
Chen China Electronics Chairman, Secretary of
November 2013 -- Y
Zongnian Technology HIK Group Ltd. Party Committee
Hu China Electronics
Director December 2013 April 2022 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 of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Cheng Zhejiang AIoT Technology Legal
May 2009 N
Zongnian Magazine Representative
Cheng
Phoenix Optics Ltd. Chairman December 2019 N
Zongnian
Wang Qiuchao Zhejiang T&C Law Firm Partner June 1986 Y
Shanghai Kehui Value
Wang Qiuchao Director July 2009 N
Investment Management Ltd.
Yalongxing Investment
Wang Qiuchao Director February 2012 N
Development Ltd.
Independent
Wang Qiuchao Botsy Technology Co., Ltd June 2020 Y
Director
Hangzhou Pukang Equity
Wu Weiqi Investment Partnership Executive Partner April 2011 N
(Limited Partnership)
Wuhu Sensortech Intelligent
Wu Weiqi Director January 2017 February 2023 N
Technology Ltd.
Hangzhou Qianmo Tongzhou
Equity Investment December
Wu Weiqi Executive Partner July 2021 N
Partnership (Limited 2022
Partnership)
Shanghai Yirui Management
Wu Xiaobo Director April 2004 N
Consultants Ltd.
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Hikvision 2022 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Hangzhou Co-Rui Enterprise
Wu Xiaobo Director April 2011 N
Management Consulting Ltd.
Ningbo Industrial Internet Independent
Wu Xiaobo May 2018 Y
Research Institute Ltd. director
Independent
Wu Xiaobo Eddy Co., Ltd. August 2018 Y
director
Zhongliang Holdings Group Independent
Wu Xiaobo June 2019 Y
Ltd. director
Ruihua Innovation
Wu Xiaobo Management Research Director November 2019 N
Institute (Hangzhou) Ltd.
Independent
Wu Xiaobo UCloud Technology Co., Ltd. June 2020 Y
director
Zhongtian Holding Group Independent
Wu Xiaobo July 2021 Y
Ltd. director
Xi'an ShaanGu Power Co., Independent
Li Shuhua May 2018 Y
Ltd. director
Shenzhen Dongfang Fuhai
Li Shuhua Investment Management Co., Managing Partner July 2018 Y
Ltd.
Luoyang Yuchuan Yuye Independent
Li Shuhua August 2018 Y
Group Co., Ltd. director
Changzhou Guangyang
Li Shuhua Chairman & CEO August 2019 N
Holdings Ltd.
Li Shuhua Changzhou NRB Co., Ltd. Chairman October 2019 Y
Li Shuhua Weihai Shiyi Electronics Ltd. Chairman December 2020 N
Independent
Li Shuhua Juzhengyuan Co., Ltd. December 2020 Y
director
Guangdong Shengyi Independent
Li Shuhua October 2021 Y
Technology Co., Ltd. director
Chairman of the
Shenzhen Yuanzhi Fuhai November
Li Shuhua Board of July 2018 N
Investment Management Ltd. 2022
Supervisors
Beijing Rushi Chengjin
Guan Qingyou Information Consulting CEO October 2016 N
Services Ltd.
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Hikvision 2022 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Beijing Rushiwo Research
Executive Director
Guan Qingyou Information Consulting December 2017 Y
& CEO
Service Ltd.
Independent
Guan Qingyou Midea Group Co., Ltd. August 2018 Y
director
Beijing Xincai Zhibei
Guan Qingyou Supervisor October 2018 N
Information Technology 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
Beijing Rushiwo Research
Executive Director
Guan Qingyou Institute of Science and May 2020 N
& CEO
Technology Ltd.
Beijing Rushi Wancheng
Executive Director
Guan Qingyou Technology Development June 2020 N
& CEO
Ltd.
Hainan Wuyongtang Executive Director
Guan Qingyou July 2020 N
Information Technology Ltd. & CEO
Beijing Yaocen Yuanmu Executive Director
Guan Qingyou July 2020 N
Information Technology Ltd. & CEO
Beijing Ruoan Jiatai Executive Director
Guan Qingyou December 2020 N
Technology Ltd. r& CEO
Zhongchancheng Investment
Guan Qingyou Supervisor March 2021 N
(Shenzhen) Ltd.
Qingdao Rushiwo Research
Guan Qingyou Supervisor November 2021 N
Investment Management Ltd.
Shenzhen Jiuzhoutongyu
Guan Qingyou Supervisor January 2022 N
Technology Ltd.
Beijing Minjin Information September
Guan Qingyou Supervisor September 2017 N
Consulting Services Ltd. 2022
Shandong Expressway Road Independent
Guan Qingyou January 2021 May 2022 Y
and Bridge Group Ltd. director
Hong Tianfeng Shanghai Fangguang Executive Director February 2012 Y
144
Hikvision 2022 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
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)
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)
Shenzhen Yunzhixun
Hong Tianfeng Director May 2014 N
Network Technology Ltd.
Shenzhen Fangguang
Executive Director
Hong Tianfeng Enterprise Management May 2016 N
& CEO
Consulting Ltd.
Suzhou Fangguang Venture
Investment Phase II
Hong Tianfeng Managing Partner July 2016 N
Partnership Enterprise
(Limited Partnership)
Shanghai Fangguang Erqi
Venture Investment
Hong Tianfeng Managing Partner September 2016 N
Partnership Enterprise
(Limited Partnership)
Zhongwei Dahe Cloud
Hong Tianfeng Connection Network Director November 2016 N
Technology Ltd.
CETC Huayun Information
Hong Tianfeng Director March 2017 N
Technology Ltd.
Shenzhen YingFeiYuan
Hong Tianfeng Director October 2017 N
Technology Ltd.
145
Hikvision 2022 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Beijing ZhiZhangYi Sicence
Hong Tianfeng Director January 2018 N
and Technology Ltd.
Shenzhen Chip and Semi-
Hong Tianfeng Director February 2018 N
conductor Technology Ltd.
Shanghai Daxian Intelligent
Hong Tianfeng Director June 2018 N
Science and Technology Ltd.
Quanzhi Technology
Hong Tianfeng Director June2020 N
(Hangzhou) Ltd.
Shanghai Fanglan Enterprise Executive Director
Hong Tianfeng March 2021 N
Management Center & CEO
Shanghai Fangguang
Hong Tianfeng Enterprise Management Executive Director November 2022 N
Consulting Ltd.
Sannuo Biology Sensor Co.,
Hong Tianfeng Director September 2013 January 2023 Y
Ltd.
Shenzhen DongFengMingTu
Hong Tianfeng Supervisor August 2016 July 2022 N
Enterprise Management Ltd.
Guangzhou Smart Software
Hong Tianfeng Director March 2018 June 2022 N
Ltd.
Shenzhen Zhongtu Instrument
Hong Tianfeng Director February 2021 April 2022 Y
Co., Ltd.
Huatai Baoxing Fund
Lu Jianzhong Director July 2016 Y
Management 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
Shanghai Vico Precision
Lu Jianzhong Director May 2021 Y
Mold &Plastics Co., Ltd.
BOMESC Offshore Independent
Lu Jianzhong December 2021 Y
Engineering Co., Ltd. Director
Zhongxinghua Certified
Chartered
Lu Jianzhong Public Accountants LLP January 2022 N
Accountant
(Shanghai Branch)
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Hikvision 2022 Annual Report
Compensation and
Position in other Commencement Termination of
Name Name of other Entity allowance from the other
entity of the term the term
entities
Independent
Lu Jianzhong Bank of Tianjin Co., Ltd. August 2022 Y
Director
Antai College of Economics
Lu Jianzhong Corporate mentor December 2013 June 2022 N
and Management, SJTU
Shenzhen Wangyu Security
Xu Ximing Service Science and Director November 2019 N
Technology Ltd.
Chengdu Guoshengtianfeng
Xu Ximing Director August 2020 N
Network Technology Ltd.
Hangzhou Confirmware
Xu Ximing Director August 2021 N
Technology Co., Ltd.
Zhejiang Haishi Huayue
Jin Duo Chairman January 2020 N
Digital Technology Ltd
Maxio Technology
Xu Peng Director December 2021 N
(Hangzhou) Co., Ltd.
Zhejiang Fast Line data
Guo Xudong fusion Information Director January 2021 N
Technology Co., Ltd.
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.
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 58 Incumbent 0 Y
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Hikvision 2022 Annual Report
Total remuneration Remuneration
Name Title Gender Age Tenure status from the Company from related
(RMB'0,000) parties (Y/N)
Qu Liyang Director M 59 Incumbent 0 Y
Wang Qiuchao Director M 72 Incumbent 30.00 N
Hu Yangzhong Director, CEO M 58 Incumbent 243.54 N
Director, Standing Deputy
Wu Weiqi M 59 Incumbent 266.37 N
General Manager
Wu Xiaobo Independent Director M 63 Incumbent 30.00 N
Hu Ruimin Independent Director M 59 Incumbent 30.00 N
Li Shuhua Independent Director M 52 Incumbent 30.00 N
Guan Qingyou Independent Director M 46 Incumbent 30.00 N
Hong Tianfeng Supervisor Chairman M 57 Incumbent 20.00 N
Lu Jianzhong Supervisor M 69 Incumbent 20.00 N
Xu Lirong Supervisor M 60 Incumbent 148.08 N
Senior Deputy General
He Hongli F 50 Incumbent 262.04 N
Manager
Senior Deputy General
Cai Changyang M 52 Incumbent 252.77 N
Manager
Senior Deputy General
Xu Ximing M 50 Incumbent 370.74 N
Manager
Senior Deputy General
Bi Huijuan F 52 Incumbent 357.56 N
Manager
Senior Deputy General
Pu Shiliang M 46 Incumbent 270.25 N
Manager
Senior Deputy General
Jin duo M 58 Incumbent 268.97 N
Manager
Senior Deputy General
Jin Yan Manager, person in charge of F 44 Incumbent 245.82 N
finance and accounting
Senior Deputy General
Huang Fanghong Manager F 41 Incumbent 240.60 N
Board Secretary
Senior Deputy General
Chen Junke M 52 Incumbent 248.75 N
Manager
Senior Deputy General
Xu Peng M 47 Incumbent 274.61 N
Manager
Senior Deputy General
Guo Xudong M 51 Incumbent 243.57 N
Manager
Total -- -- -- -- 3,883.67 --
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Hikvision 2022 Annual Report
Note: During the reporting period, the remuneration of incumbent directors, supervisors and senior management
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
7 proposals were considered and approved at the
meeting, including the Proposal on Adjusting
The 8th meeting of the 5th session
January 18, 2022 January 19, 2022 Grantees and Number of Granted Shares of
of the Board
Restricted Share Plan. For details, please refer to
the Company’s announcement: No. 2022-004.
21 proposals were considered and approved at
The 9th meeting of the 5th session the meeting, including the 2021 Annual Report
April 14, 2022 April 16, 2022
of the Board and Its Summary. For details, please refer to the
Company’s announcement: No. 2022-018.
3 proposals were considered and approved at the
meeting, including the Proposal on Vesting
The 10th meeting of the 5th session Conditional Achievements for the Second Vesting
May 5, 2022 May 6, 2022
of the Board Period of the 2018 Restricted Share Incentive
Scheme. For details, please refer to the
Company’s announcement: No. 2022-031.
10 proposals were considered and approved at
the meeting, including the Proposal on the Initial
Public Share Offering and Listing on the SZSE
The 11th meeting of the 5th session
June 10, 2022 June 11, 2022 ChiNext Market of the Subsidiary of the
of the Board
Company, Hangzhou Hikrobot Technology Ltd.
For details, please refer to the Company’s
announcement: No. 2022-039.
4 proposals were considered and approved at the
The 12th meeting of the 5th session meeting, including the 2022 Half Year Report
August 12, 2022 August 13, 2022
of the Board and Its Summary. For details, please refer to the
Company’s announcement: No. 2022-045.
4 proposals were considered and approved at the
meeting, including the Proposal on the Plan of
The 13th meeting of the 5th session
September 15, 2022 September 16, 2022 Repurchase Part of the Company's Public
of the Board
Shares. For details, please refer to the
Company’s announcement: No. 2022-049.
The 14th meeting of the 5th session October 28, 2022 October 29, 2022 1 proposal was considered and approved at the
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Hikvision 2022 Annual Report
Meeting Session Convening Date Disclosure Date Meeting Resolutions
of the Board meeting, the 2022Q3 Report and Its Summary.
For details, please refer to the Company’s
announcement: No. 2022-060.
11 proposals were considered and approved at
the meeting, including the Proposal on the Initial
Public Share Offering and Listing on the SZSE
The 15th meeting of the 5th session
December 9, 2022 December 10, 2022 ChiNext Market of the Subsidiary of the
of the Board
Company, Hangzhou Hikrobot Co., Ltd. For
details, please refer to the Company’s
announcement: No. 2022-067.
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 8 1 7 0 0 N 3
Qu Liyang 8 1 7 0 0 N 1
Wang Qiuchao 8 1 7 0 0 N 2
Hu Yangzhong 8 1 7 0 0 N 4
Wu Weiqi 8 1 7 0 0 N 4
Wu Xiaobo 8 1 7 0 0 N 2
Hu Ruimin 8 1 7 0 0 N 2
Li Shuhua 8 1 7 0 0 N 2
Guan Qingyou 8 1 7 0 0 N 1
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.
4. Other Details about the Performance of Duties by Directors
Were there any suggestions from directors accepted by the Company?
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Hikvision 2022 Annual Report
√ 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 of the Company. They
carried out their duties independently and imparted considerable professional advice on improving the Company’s
systems, daily operations and decision making. They provided objective and fair advices 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’ 2022 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 12
Strategy Committee
Chen Zongnian proposals including the 2021 All expressed
of the 5th session of January 12, 2022 to
(convener), Wu 6 Annual Work Report of the concurring
the Board of December 2, 2022
Xiaobo, Hu Ruimin Strategy Committee of the opinions
Directors
Board of Directors
Reviewed and approved 9
Li Shuhua
Audit Committee of proposals including Proposal All expressed
(convener), Wang February 10, 2022 to
the 5th session of the 3 on 2022 Reappointment of concurring
Qiuchao, Guan April 14, 2022
Board of Directors Certificated Public opinions
Qingyou
Accountants LLP
Remuneration and Guan Qingyou Reviewed and approved 10 All expressed
January 18, 2022 to
Appraisal (convener), Wu 4 proposals including the 2021 concurring
May 5, 2022
Committee of the 5th Xiaobo, Wu Weiqi Annual Report and Its opinions
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Hikvision 2022 Annual Report
Important
Number of
Committee Name Members Convening Date Meeting Content comments and
meetings held
suggestions
session of the Board Summary
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.
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 21,343
Number of incumbent employees in major subsidiaries at the end of the reporting period 36,941
Number of incumbent employees at the end of the reporting period 58,284
Number of employees receiving salaries in current period 58,284
Number of retired employees requiring the parent Company and its subsidiaries to bear costs 0
Professional structure
Tier Number of employees
Managerial personnel 928
Production staff 17,400
Sales staff 10,085
Technical staff 27,951
Financial staff 417
Administrative Staff 1,503
Total 58,284
Educational background
Education background Number of employees
Master and/or doctor/or above 10,964
Bachelor 28,689
Junior College (professional training) 5,368
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Hikvision 2022 Annual Report
Other 13,263
Total 58,284
2. Staff Remuneration Policy
Hikvision applies scientific talent cultivation methods, effective talent incentive mechanisms and fair
competition platforms to recruit talents, and continuously optimizes the talent structure. The Company provides
employees with remuneration packages which are competitive in the industry. In addition to endowment insurance,
medical insurance, unemployment insurance, employment injury insurance, maternity insurance and housing
provident funds, the Company also provides employees with the supplementary commercial insurance, special
allowances, and other benefits, and creates a fairer and more humanized working environment for each employee;
so that each employee is able to demonstrate his/her value, and create value to satisfy increasing demands for a good
life.
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.
During 2020-2022, in the context of the macro environment and businesses becoming more complex, the
Company had to adapt itself to the higher requirements on learning management and operations. The Company
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, combing with the digital training platform to make trainings
more flexible, and promoted organizational experience accumulation and replication in a more orderly manner, and
resources can be shared and reused more efficiently within the Company through the comprehensive online
management of teachers and courses, accelerating replication and propagation from 1 to N of key business
experiences.
To adapt to the background that the external business environment changes rapidly, the human resources
department goes deep into the front line of the business, quickly empowering key positions by working with business
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Hikvision 2022 Annual Report
experts to timely summarize experiences, identifying typical scenarios of business development, learning practical
methodologies and skills, and implementing the large learning project that is a combination of theoretical training
and practical training.
In 2023, the Company continues to strengthen the construction of talent development systems, facilitating talent
supply for key positions for business development through designing the development project of talent development
and the training project of core business talent.
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 9th meeting of the 5th session of the Board of Directors of the Company reviewed and approved the 2021
Annual Profit Distribution Proposal, and was reviewed and approved by the Company's 2021 annual general
meeting: 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 date of record for this profit distribution is May 25, 2022, the ex-
rights/ex-dividend date is May 26, 2022, and the total cash dividends (tax inclusive) is RMB8,489,887,847.10.
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
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Hikvision 2022 Annual Report
investors, and the independent directors have expressed their agreement.
In 2022, the Company implemented the repurchase of its shares by means of centralized bidding. According
to the Company Law, Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Shenzhen Stock Exchange
Listed Companies Self-Regulatory Supervision Guidelines No. 9 – Repurchase of Shares, the amount of shares
repurchased that the Company has implemented during the year is deemed to be equal to the amount of cash
dividends, which is included in the measurement of the relevant portion of cash dividends for the year.
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
7.00
inclusive)
Additional shares converted from capital reserves
0
for 10 shares (share)
Total capital shares as the basis for the distribution
9,363,932,789
proposal (share)
Total cash dividend (RMB) (tax inclusive) 6,554,752,952.30
Amount of cash dividends in other methods (such
2,043,476,488.53
as share repurchase) (RMB)
Total cash dividends (including other methods)
8,598,229,440.83
(RMB)
Distributable profits (RMB) 39,030,437,901.96
Percentage of cash dividends in the total
100.00%
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 2022, the parent company of the Company realized
net profit of RMB9,597,855,108.17, the withdraowal of statutory surplus reserve is RMB42,954,964.00, adding the undistributed
profit of the parent company at the beginning of the year of RMB 37,958,561,319.89 deducting the cash dividends of
RMB8,489,887,847.10 in 2021, adding back RMB6,864,285.00 of the unpaid dividends for the repurchased restricted shares, as of
December 31, 2022, the profits distributable to shareholders of the parent company amounted to RMB39,030,437,901.96. As of
December 31, 2022, the profits distributable to shareholders in the consolidated statement were RMB49,460,240,986.49
(consolidated). To sum up, according to the principle of "whichever is lower", the profits distributable to shareholders this year was
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Hikvision 2022 Annual Report
RMB39,030,437,901.96.
Based agree on the Company’s current total share capital of 9,363,932,789 shares, the Company proposed to distribute cash dividend
of RMB7 (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 RMB6,554,752,952.30, and the remaining undistributed profits will be
transferred to the next year.
XI. The Implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or other
Incentive Plans
√Applicable □Inapplicable
1. Share Incentive
(1) During the reporting period, the Company completed the grant of the 2021 Restricted Share Incentive
Scheme.
On December 30, 2021, proposals were reviewed and approved by the 7th Meeting of the 5th session of the
Board of Directors of the Company, including the 2021 Restricted Stock Plan (Revised Draft) and its Summary and
Proposal to the General Meeting of Shareholders to Authorize the Board of Directors to Manage Relevant Matters
of the 2021 Restricted Share Incentive Scheme, proposing the General Meeting of Shareholders to authorize the
Board of Directors to implement relevant matters of the 2021 Restricted Share Incentive Scheme.
On January18, 2022, the Proposal on Granting Restricted Shares to Grantees under the 2021 Restricted Share
Incentive Scheme was reviewed and approved by the 8th Meeting of the 5th session of the Board of Directors and the
8th Meeting of the 5th session of the Board of Supervisors of the Company. Based on the relevant laws, regulations,
department rules, and normative documents such as the Measures for the Management of Equity Incentives of Listed
Companies, as well as 2021 Restricted Stock Plan (Revised Draft) and related authorization approved by the 1st
Extraordinary General Meeting of Shareholders in 2022, the Company has completed the share grant and
registration of the 2021 Restricted Share Incentive Scheme. The grantees are 9,738 people, and the total amount of
restricted shares granted is 97,402,605 shares, accounting for 1.04% of the total share capital of the Company before
the grant. The granted shares were listed on February 11, 2022.
For details, please refer to the Announcement on the Completion of the Grant of Shares under the 2021
Restricted Share Incentive Scheme published by the Company on www.cninfo.com.cn on February 10, 2022 (No.
2022-011).
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Hikvision 2022 Annual Report
(2) During the reporting period, the Company has completed the second vesting, repurchase and cancellation
of the 2018 restricted share incentive scheme.
On May 5, 2022, the 10th meeting of the 5th session of the Board of Directors and the 10th meeting of the 5th
session of the Board of Supervisors reviewed and approved the Proposal on the achievement of unlocking conditions
for the second unlocking period of the 2018 restricted Share Incentive Scheme and Proposal on the Second
Repurchase and Cancellation of the Granted but Unvested Restricted Shares under the 2018 Restricted Share
Incentive Scheme, the Company has implemented the vesting of the total amount of 33,142,730 restricted shares for
5,533 grantees, and the vested shares were listed on May 18, 2022. Meanwhile, 2,288,095 restricted shares that did
not meet the incentive conditions were repurchased and cancelled, and the repurchase and cancellation procedures
were completed as of December 19, 2022. For details, please refer the Indicative Announcement on Vesting, Listing
and Circulation of Shares in the Second Vesting Period of the 2018 Restricted Share Incentive Scheme (No. 2022-
036) and the Announcement on the Second Repurchase and Cancellation of the Granted but Unvested Restricted
Shares under the 2018 Restricted Share Incentive Scheme (No. 2022-071) published by the Company on
www.cninfo.com.cn on May 17, 2022 and December 19, 2022, respectively.
As of the end of the reporting period, the Company has a total amount of 130,734,463 granted but unvested
shares, accounting for 1.39% of the Company's total share capital at the end of the reporting period.
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
accounting standards. The cost of the shares granted by the 2018 Restricted Share Incentive Scheme and the 2021
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
and the 2021 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
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Hikvision 2022 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)
Hu Yangzhong Director, CEO 0 0 - - 0
Director, Standing Deputy
Wu Weiqi 0 0 - - 0
General Manager
Senior Deputy General
He Hongli 0 0 - - 0
Manager
Senior Deputy General
Cai Changyang 0 0 - - 0
Manager
Senior Deputy General
Bi Huijuan 73,800 36,900 - - 36,900
Manager
Senior Deputy General
Xu Ximing 118,200 59,100 90,000 29.71 149,100
Manager,
Senior Deputy General
Pu Shiliang 60,000 30,000 90,000 29.71 120,000
Manager
Senior Deputy General
Jin Duo 0 0 - - 0
Manager
Senior Deputy General
Jin Yan Manager, Person in 66,000 33,000 80,000 29.71 113,000
Charge of Finance
Senior Deputy General
Huang Fanghong Manager, Secretary of the 66,000 33,000 80,000 29.71 113,000
Board
Senior Deputy General
Xu Peng 77,244 38,622 70,000 29.71 108,622
Manager
Senior Deputy General
Guo Xudong 44,280 22,140 - - 22,140
Manager
Total -- 505,524 252,762 410,000 -- 662,762
Note:
(1) Persons listed above are grantees who are senior executives that are the Company’s incumbent senior
executives.
(2) During the reporting period, the Company has completed the grant of shares under the 2021 Restricted Share
Incentive Scheme with the total amount of 97,402,605 shares, of which 410,000 of shares were granted to
senior executives.
(3) During the reporting period, the second restricted shares of the Company were vested under the 2018
Restricted Share Incentive Scheme with the total amount of 33,142,730 shares, of which 252,762 were vested
by senior executives.
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Hikvision 2022 Annual Report
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 2022, senior management personnel
carried out their duties diligently with good performance. In the face of multiple uncertainties in the business
environment, they led the Company to firm confidence, focus on its own capabilities, and continue to promote the
steady development of the Company.
2. The Implementation of Employee Stock Incentive Plan
□Applicable √Inapplicable
3. Other Incentive Plans
□Applicable √Inapplicable
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.
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
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Hikvision 2022 Annual Report
financial center and internal audit department, and puts forward relevant requirements on the normativeness of
internal control 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 2022 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 acquisition and cancellation the registration 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 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 two domestic subsidiaries and four overseas subsidiaries,
acquired one subsidiary, and liquidated and cancelled three subsidiaries. All of this result in changes in the scope of
its consolidation scope. For details, please refer to changes in the consolidation scope in Note (6) to the financial
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Hikvision 2022 Annual Report
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 15, 2023
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
identified or prevented, e.g.:
A. Invalid internal control environment; Internal control deficiencies at non-
B. Fraud of directors, supervisors and senior management financial report level are mainly identified
personnel on the financial report ; by the likelihood of occurrence and the
C. Significant errors identified by external auditors but not extent of impacts on operating effective in
identified during the Company is operating; business.
D. Invalid supervision of audit committee and internal audit
Significant deficiency: the high likelihood
system;
leading to significant reduction of working
E. Other deficiencies that may lead to the wrong judgement of
efficiency, or significant increase of
financial statement reporter.
uncertainty, or significant deviation from
Important deficiency: the expected target;
Qualitative criteria A deficiency or a combination of deficiencies in internal control Important deficiency: a higher likelihood
may prevent errors in financial report from being identified or leading to remarkable reduction of
prevented, although such deficiency is not significant, but working efficiency, or remarkable increase
require attention of the Board and Management, e.g.: of uncertainty, or remarkable deviation
A. Application of accounting policies does not follow the from the expected target;
enterprise accounting standard; Normal deficiency: a low likelihood
B. No internal control systems for fraud; leading to reduction of working efficiency,
C. No control systems or system not effective for unusual or or increase of uncertainty, or deviation
special transactions or no compensatory relevant control; from the expected target;
D. One or more deficiencies which prevent the preparation of
true and fair financial statements.
Normal deficiency: Not significant and not important
deficiency.
Significant deficiency: potential errors 5% or more of total Significant deficiency: direct losses of
profits assets is 5% or more of total profits
Important deficiency: potential errors 2% or more but below Important deficiency: direct losses of
Quantitative criteria
5% of total profits assets is2% or more but below 5% of total
Normal deficiency: potential errors is 2% or less of total profits
profits Normal deficiency: direct losses of assets
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Hikvision 2022 Annual Report
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 2022 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 15, 2023
the internal control audit report
Disclosure index of full text of
www.cninfo.com.cn 2022 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
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the self-evaluation report from
the Board of Directors
√ Yes □No
XV. Special Rectification Actions for Self-inspected Problems of Listed Companies
□Applicable √Inapplicable
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Hikvision 2022 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 2022 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 2022 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 Hikvision:
October 29, 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 Hikvision 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 2022 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 2022 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 Hikvision 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 Share restriction During Hu Yangzhong, Wu Weiqi, Jiang Haiqing, Zhou Zhiping, Xu Lirong, May 17, Strict
Long term
Initial Public Investment Management commitment Cai Dingguo, He Hongli, Zheng Yibo, Hu Dan, Jiang Yufeng, Liu Xiang, 2010 performance
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Hikvision 2022 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 Hangzhou supervisors and senior management personnel, the annual transfer of
Weixun Equity Investment Hikvision’s total shares should not exceed 25% of total number of shares held
Partnership (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 17, Strict
transfer of Hikvision’s total shares should not exceed 25% of total number of Long term
as Hangzhou Pukang Equity 2010 performance
shares held under Pukang; within 6 months after abovementioned personnel’s
Investment Partnership
demission, should not transfer Hikvision’s shares held under Pukang.
(Limited Partnership))
The Company's directors, Share restriction
supervisors and executive: commitment
HuYangzhong, Wu Weiqi,
During their tenure of the Company’s Board of Directors, supervisors and
Jiang Haiqing, Zhou
senior management personnel, the annual shares transfer should not exceed May 17, 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
Share restriction During their tenure of the Company’s Board of Directors, supervisors and
Directors, executive officers
commitment senior management personnel, the annual shares transfer should not exceed May 17, Strict
of the Company: Hu Long term
25% of total number of shares held under Kangpu; within 6 months after their 2010 performance
Yangzhong, Wu Weiqi
demission, they should not transfer their shares held under Kangpu.
The Company’s director Share restriction During Gong Hongjia’s tenure of the Company’s Board of Directors, Strict
Long-term
Gong Hongjia’s spouse, commitment supervisors and senior management personnel, Chen’s annual shares transfer May 17, performance
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Hikvision 2022 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
months after the demission of Gong Hongjia, Chen should not transfer her
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 18, 2008 performance
Technology Group Co., September, 2008.
Ltd.)
Gong Hongjia; Hangzhou Commitment to
avoid horizontal
Weixun Investment
competition
Management Limited
Partnership (later renamed
as Hangzhou Weixun Equity
To avoid any loss of the Company and other shareholders arising from any
Investment Partnership
competing business, Gong Hongjia, Hangzhou WeiXun Investment
(Limited Partnership)); Management Limited Partnership, ZheJiang Orient Holdings Co., Ltd. and
Strict
Hangzhou Kangpu Hangzhou KangPu Investment Management Limited Partnership, the Long term
promoters of the Company, issued Commitment Letters of non-competition in July 10, 2008 performance
Investment Limited
the same industry on 10 July, 2008.
Partnership (later renamed
as Hangzhou Pukang Equity
Investment Partnership
(Limited Partnership));
ZheJiang Orient Holdings
Co., Ltd.
Other Hangzhou Hikvision Digital Commitment Arrangement on trading restriction and commitement to voluntarily restrict Within 36 Strict
December
commitments relating to the spin- shares relating to the spin-off of EZVIZ Network to be listed on the Science
Technology Co., Ltd. 28, 2022 months from performance
(commitments off of EZVIZ and Technology Innovation Board, for details, please refer to the appendix Ⅵ
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Hikvision 2022 Annual Report
Date of Term of
Commitments Giver of commitments Commitment type Details of commitments Performance
commitments commitments
relating to the Network to be listed of the Prospectus on the Initial Public Share Offering and Listing on the STAR the date of
spin-off of on the Science and Market of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co.,
issuing and
EZVIZ Network Technology Ltd. published by EZVIZ Network on the website of Shanghai Stock Exchange
to be listed on Innovation Board (www.sse.com.cn): commitments relating to investor protection. listing of
the Science and EZVIZ
Technology Network
Innovation
Board) Commitment relating to the intention to hold shares and the intention to reduce Within 2 years
holdings of shares of EZVIZ Network of the spin-off of EZVIZ Network to be
from the end
listed on the Science and Technology Innovation Board, for details, please refer
to the appendix Ⅵ of the Prospectus on the Initial Public Share Offering and date of shares
December Strict
Listing on the STAR Market of the Shanghai Stock Exchange of Hangzhou restriction
28, 2022 performance
EZVIZ Network Co., Ltd. published by EZVIZ Network on the website of period of
Shanghai Stock Exchange (www.sse.com.cn): commitments relating to investor
EZVIZ
protection.
Network
Commitments and initiatives to stabilize the stock price of EZVIZ Network, to
repurchase shares of EZVIZ Network, to guarantee no fraud in listing of EZVIZ
Network, to make compensation for diluted spot return, to undertake
compensation or liability in accordance with the law, to have constraints for
failing to fulfill commitments, to avoid intra-industry competition, to regulate
and reduce related party transactions, to avoid capital occupation, and to keep December Strict
Long term
system independent after the spin-of of EZVIZ Network to be listed on the 28, 2022 performance
Science and Technology Innovation Board. For details, please refer the
Prospectus on the Initial Public Share Offering and Listing on the STAR Market
of the Shanghai Stock Exchange of Hangzhou EZVIZ Network Co., Ltd.
published by EZVIZ Network on the website of Shanghai Stock Exchange
(www.sse.com.cn): commitments relating to investor protection.
Whether the
commitments is Yes
fulfilled in time
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Hikvision 2022 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
For details, please refer to the Note (III) 32.
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Hikvision 2022 Annual Report
VII. Explanation for Changes in Scope of the Consolidated Financial Statements as Compared
to the Financial Report for the Prior Year
√ Applicable □ Inapplicable
During the reporting period, the Company established two domestic subsidiaries and four overseas subsidiaries,
acquired one subsidiary, and liquidated and cancelled three subsidiaries. All of this result in changes in the scope of
its consolidation scope. For details, please refer to changes in the consolidation scope in Note (6) to the financial
statements.
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
7
domestic CPA firm
Name of the certified public accountants from the
Tang Lianjiong, Cai Jin
domestic CPA firm
Consecutive years of the audit service provided by the Tang Lianjiong has provided audit service for 4 consecutive years;
certified public accountants from the domestic CPA
firm Cai Jin 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 internal control audit fees during
the period.
IX. Delisting after Disclosure of this Annual Report
□ Applicable √ Inapplicable
X. Bankruptcy and Restructuring
□ Applicable √ Inapplicable
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Hikvision 2022 Annual Report
No such case during the reporting period.
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 2022 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
Payment on
research institutes control of the Company’s Procurement 223,452.42 4.74% 500,000 No
delivery
of CETC actual controller
Joint ventures held by the Payment on
Joint ventures Procurement 507.17 0.01% 700 No
Company delivery
Announcement
Associated Associated companies Reference Payment on
Procurement 41,798.96 0.89% 120,100 No on the forecast
companies held by the Company Procurement, market delivery
April 16, of daily
Enterprises with Enterprises with directors, receiving price
2022 related-party
directors, supervisors, senior services agreed by
transactions in
supervisors, senior executives and related both parties
2022 (No.
executives and natural persons of the Payment on
Procurement 159,840.63 3.39% 225,150 No 2022-022)
related natural Company serving as delivery
persons of the directors
Company serving
as directors
Subsidiaries or Under the common Providing Reference Announcement
Payment on April 16,
research institutes control of the Company’s Sales services, market 44,718.66 0.54% 70,000 No on the forecast
delivery 2022
of CETC actual controller. selling price of daily
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Hikvision 2022 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.
Joint ventures held by the products, agreed by Payment on related-party
Joint ventures Sales 7,775.12 0.09% 32,500 No
Company commercial both parties delivery transactions in
Associated Associated companies goods Payment on 2022 (No.
Sales 8,714.97 0.10% 28,000 No
companies held by the Company delivery 2022-022)
Enterprises with Enterprises with directors,
directors, supervisors, senior
supervisors, senior executives and related
executives and natural persons of the Payment on
Sales 1,123.36 0.01% 3,910 No
related natural Company serving as delivery
persons of the directors
Company serving
as directors
Subsidiaries or Under the common Reference
Renting Based on
research institutes control of the Company’s Lease market - 0.00% 50 No - -
house from contract
of CETC actual controller. price
related
Joint ventures held by the agreed by Based on
Joint ventures Lease parties 54.26 0.17% 200 No - -
Company both parties contract
Total 487,985.56 - 980,610 - - - -
Details on significant sales return None
The above trading quotas include newly increased forecast quota amount of RMB4,000,000 for procurement and receiving services
Total amount of related transactions projected based on
from joint ventures, amount of RMB2,100,000 for selling products, commercial goods, and providing services from enterprises with
different categories, and the actual performance during the
directors, supervisors, senior executives and related natural persons of the Company serving as directors, and amount of
current reporting period (if any)
RMB2,500,000 for renting houses from subsidiaries or research institutes of CETC and joint ventures. Those forecast quota amount
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Hikvision 2022 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.
has been approved by the Chairman the Company according to related regulations and the Company's Management System of Related
Transaction.
Reasons on significant difference between trading price and
Not applicable
market referencing price (if applicable)
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Hikvision 2022 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% 450,000.67 414,089.37 464,086.69 400,003.35
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
Credit 300,000.00 3,332.25
Company's ultimate controller
Note: The above occurred amount is the amount of bill discount occurred by the Group in CETC Finance Co., Ltd. in the reporting
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Hikvision 2022 Annual Report
period.
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 October 22, 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 Venture Investment Partnerships and Related
Transactions, agreeing that the Company, CETHIK Group Co., Ltd., Hangzhou High-tech Venture Capital
Management Ltd., and CETHIK (Hangzhou) Equity Investment Management Ltd. jointly invested and established
Hangzhou Haina Yuzhi Venture Investment Partnership Enterprise (Limited Partnership)(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. On January 29, 2022, in
accordance with the requirements of the Securities Investment Fund Law and Interim Measures for the Supervision
and Administration of Private Equity Fund, the Hangzhou Fund co-established by the Company, completed the
private equity investment fund filing procedures in the Asset Management Association of China (AMAC), and
obtained the Filing Certificate of Private Investment Fund.
Disclosure website for provisional reports on significant related-party transactions:
Title of provisional reports Disclosure date Disclosure website
Announcement on Investing in the Establishment of Venture Investment
October 23, 2021 www.cninfo.com.cn
Partnerships and Related Transactions (Announcement No. 2021-064)
Announcement on the Completion of the Filing Procedures of the
Entrepreneurship Investment Partnership Enterprise Co-established by February 10, 2022 www.cninfo.com.cn
the Company (Announcement No. 2022-013)
XV. Significant Contracts and Their Execution
1. Trusteeship, Contracting and Leasing
(1) Trusteeship
□ Applicable √ Inapplicable
No such case in the reporting period.
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Hikvision 2022 Annual Report
(2) Contracting
□ Applicable √ Inapplicable
No such case in the reporting period.
(3) Leasing
□Applicable √Inapplicable
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Hikvision 2022 Annual Report
2. Significant Guarantees
√Applicable □ Inapplicable
Unit: RMB’0000
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Term of guarantee related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
December 1,
Hangzhou Hikvision Technology Ltd. April 16, 2022 1,136,000 698,266.86 Joint guarantee 2019.12.01-2025.09.25 No No
2019
Urumqi HaiShi Xin’An Electronic March 26, 2019
April 16, 2022 37,000 21,037.00 Joint guarantee 2019.03.26-2028.06.20 No No
Technology Ltd.
LuoPu HaiShi DingXin Electronic
April 16, 2022 29,000 March 26, 2019 21,440.00 Joint guarantee 2019.03.26-2035.03.26 No No
Technology Ltd.
PiShan HaiShi YongAn Electronic
April 16, 2022 28,000 March 26, 2019 20,678.00 Joint guarantee 2019.03.26-2040.03.26 No No
Technology Ltd.
Moyu HaiShi Meitian Electronic Technology
April 16, 2022 24,000 March 26, 2019 17,000.00 Joint guarantee 2019.03.26-2035.03.26 No No
Ltd.
Hangzhou Hikvision System Technology Ltd. April 16, 2022 70,000 March 23, 2021 12,252.16 Joint guarantee 2021.03.23-2024.03.30 No No
Yutian HaiShi Meitian Electronic
April 16, 2022 30,000 March 26, 2019 9,480.00 Joint guarantee 2019.03.26-2034.03.26 No No
Technology Ltd.
November 20,
Hangzhou Hikvision Electronic Ltd. April 16, 2022 45,000 810.84 Joint guarantee 2021.11.20-2024.03.30 No No
2021
Chongqing Hikvision Technology Ltd. April 16, 2022 30,000 March 23, 2021 4,131.14 Joint guarantee 2021.03.23-2024.03.30 No No
December 28,
Shijiazhuang Hikvision Technology Ltd. April 16, 2022 20,000 1.00 Joint guarantee 2022.08.01-2025.07.31 No No
2022
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Hikvision 2022 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Term of guarantee related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
Nanjing Hikvision Digital Technology Ltd. April 16, 2022 15,000 June 30, 2022 3,853.70 Joint guarantee 2022.06.28-2023.06.27 No No
September 29,
Xi'an Hikvision Digital Technology Ltd. April 16, 2022 28,000 4,421.14 Joint guarantee 2022.09.29-2024.02.23 No No
2022
Hikvision Singapore Pte. Ltd. April 16, 2022 107,200 July 15, 2021 - Joint guarantee 2021.07.15-2022.08.24 Yes No
Hikvision International Co., Ltd. April 16, 2022 37,800 Not happened during the reporting period
Hikvision Europe B.V. April 16, 2022 5,100 Not happened during the reporting period
Wuhan Hikvision Technology Ltd. April 16, 2022 33,000 Not happened during the reporting period
Shanghezhicheng Technology Ltd. April 16, 2022 20,000 Not happened during the reporting period
Zhenping county Haikang Juxin Digital
April 16, 2022 19,000 Not happened during the reporting period
Technology Ltd.
Hikvision Technology Pte. Ltd. April 16, 2022 12,600 Not happened during the reporting period
Zhengzhou Hikvision Digital Technology Ltd. April 17th 2021 10,000 Not happened during the reporting period
Hefei Hikvision Digital Technology Ltd. April 16, 2022 10,000 Not happened during the reporting period
Hikvision Digital Technology (Shanghai) Ltd. April 16, 2022 10,000 Not happened during the reporting period
Chengdu Hikvision Digital Technology Ltd. April 16, 2022 10,000 Not happened during the reporting period
Nanchang Hikvision Digital Technology Ltd. April 16, 2022 8,000 Not happened during the reporting period
Chongqing Hikvision System Technology
April 16, 2022 5,000 Not happened during the reporting period
Ltd.
Fuzhou Hikvision Digital Technology Ltd April 16, 2022 5,000 Not happened during the reporting period
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Hikvision 2022 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Term of guarantee related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
.Hikvision UK Limited April 16, 2022 1,900 Not happened during the reporting period
PT. Hikvision Technology Indonesia April 16, 2022 1,400 Not happened during the reporting period
Wuhan Haikang Technology Ltd. April 16, 2022 1,000 Not happened during the reporting period
Hikvision FZE April 16, 2022 650 Not happened during the reporting period
Hikvision Turkey Technology And Security
April 16, 2022 350 Not happened during the reporting period
Systems Commerce JSC
Total guarantee cap for subsidiaries approved during the reporting Total actual guarantee amount for
1,790,000.00 subsidiaries during the reporting 1,405,623.60
period(B1)
period(B2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of the
1,790,000.00 subsidiaries at the end of the reporting 813,371.84
reporting period(B3)
period(B4)
Guarantees provided by the Company’s subsidiary to another subsidiary
Disclosure date of Guarantee
Guarantee Actual Actual guaranteed Type of Fulfilled or
Guaranteed party announcement of Term of guarantee for a
cap occurrence date amount guarantee not
the guarantee cap related
Hangzhou Haikang Intelligent Technology
April 16, 2022 80,000 March 14, 2022 14,388.69 Joint guarantee 2022.03.14-2023.11.30 No No
Ltd.
Hangzhou Hikmicro Intelligent Technology
April 16, 2022 32,000 March 14, 2022 2,350.70 Joint guarantee 2022.03.14-2023.03.13 No No
Ltd.
Chongqing EZVIZ Electronic Ltd. April 16, 2022 32,000 August 18, 2022 800.00 Joint guarantee 2022.08.18-2023.08.18 No No
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Hikvision 2022 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Term of guarantee related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
Hangzhou Hikrobot Automation Ltd. April 16, 2022 145,000 Not happened during the reporting period
Hangzhou Hikmicro Software Ltd. April 16, 2022 105,000 Not happened during the reporting period
Hangzhou Hikstorage Technology Ltd. April 16, 2022 10,000 Not happened during the reporting period
Zhejiang Hikfire Technology Ltd April 16, 2022 3,000 Not happened during the reporting period
Zhejiang Zhiyuan Fire Safety Engineering
April 16, 2022 3,000 Not happened during the reporting period
Ltd.
Total actual guarantee amount for
Total guarantee cap for subsidiaries approved during the reporting
410,000.00 subsidiaries during the reporting 20,525.33
period (C1)
period (C2)
Total actual guarantee balance for
Total approved guarantee cap for subsidiaries at the end of the
410,000.00 subsidiaries at the end of the reporting 17,539.39
reporting period（C3）
period(C4)
The total amount of Company’s guarantees (that is, the total of the first three items)
Total guarantee cap approved during the reporting period Total actual guarantee amount during
2,200,000.00 1,426,148.93
（A1+B1+C1） the reporting period（A2+B2+C2）
Total actual guarantee balance at the
Total approved guarantee cap at the end of the reporting period
2,200,000.00 end of the reporting period 830,911.23
（A3+B3+C3）
（A4+B4+C4）
Portion of the total actual guarantee (A4+B4+C4) amount in net
12.15%
assets of the Company
Of which:
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Hikvision 2022 Annual Report
Guarantees provided by the Company to its subsidiaries
Guarantee
Disclosure date of for a
Guarantee Actual Actual guaranteed Type of Fulfilled
Guaranteed party announcement of Term of guarantee related
cap occurrence date amount guarantee or not
the guarantee cap party or
not
The balance of guarantee for shareholders, actual controllers and
0
their affiliates. (D)
Amount of debt guarantees provided directly or indirectly for
808,368.24
entities with 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
808,368.24
guarantees (D+E+F)
3. Entrusted Others to Manage Cash Assets
(1) Entrusted financial management
□ Applicable √ Inapplicable
No such case during the reporting period
(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
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Hikvision 2022 Annual Report
XVI. Other Significant Events
√ Applicable □ Inapplicable
1. Investment in Fixed Assets
On January 18, 2022, the 8th meeting of the 5th session of the Board of Directors of the Company deliberated and approved the Proposal on the Investment and
Construction of HikRobot Products’ Industrial Base Project by the Company’s Holding Subsidiary, and approved the Company's innovative business, a holding
subsidiary of the Company, Hangzhou Hikrobot Technology Co., Ltd. (hereinafter referred to as "HikRobot") to invest self-raised funds of RMB 1.1661 billion to
build the above project. The project undertaker is HikRobot. For details, please refer to the Announcement on the Investment and Construction of HikRobot Products’
Industrial Base Project by the Company’s Holding Subsidiary published by the Company on chino website (www.cninfo.com.cn) on January 19, 2022
(Announcement No. 2022-007). On October 8, 2022, HikRobot won the use right of the state-owned construction land for the project with a total of RMB28.34
million. On October 19, 2022, HikRobot and Hangzhou Planning and Natural Resources Bureau signed the Contract for Assigning the Right to Use State-owned
Construction Land and obtained Building Construction Permit. On November 9, 2022, the project obtained Filing Certificate for Piling Construction in Advance, and
is currently in the stage of pile foundation construction.
On January 18, 2022, the 8th meeting of the 5th session of the Board of Directors of the Company deliberated and approved the Proposal on the Investment and
Construction of Infrared Thermal Imaging Products’ Industrial Base Project by the Company’s Holding Subsidiary, and approved the Company's innovative
business, a holding subsidiary of the Company, Hangzhou Hikmicro Sensing Technology Co., Ltd. (hereinafter referred to as "HikMicro") to invest self-raised funds
of RMB 1.28018 billion to build the above project. The project undertaker is HikMicro’s wholly-owned subsidiary, Hangzhou Micro image Software Ltd (hereinafter
referred to as "HikMicro Software"). For details, please refer to the Announcement on the Investment and Construction of Infrared Thermal Imaging Products’
Industrial Base Project by the Company’s Holding Subsidiary published by the Company on cninfo website (www.cninfo.com.cn) on January 19, 2022
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Hikvision 2022 Annual Report
(Announcement No. 2022-008). On October 8, 2022, HikMicro Software won the use right of the state-owned construction land for the project with a total of
RMB29.60 million. On October 19, 2022, HikMicro Software t and Hangzhou Planning and Natural Resources Bureau signed the Contract for Assigning the Right to
Use State-owned Construction Land and obtained Building Construction Permit. On November 29, 2022, the project obtained Filing Certificate for Piling
Construction in Advance, and is currently in the stage of pile foundation construction.
On January 18, 2022, the 8th meeting of the 5th session of the Board of Directors of the Company deliberated and approved the Proposal on the Investment and
Construction of Hikrobot Intelligent Manufacturing (Tonglu) Base Project by the Company’s Holding Subsidiary, and approved the Company's innovative business, a
holding subsidiary of the Company, HikRobot to invest self-raised funds of RMB 1.53422 billion to build the above project. The project undertaker is HikRobot’s
wholly-owned subsidiary, Hangzhou Hikrobot Intelligence Ltd. (hereinafter referred to as "HikRobot Intelligence", which was renamed on July 25, 2022, and the
former name is Hangzhou Hikrobot Automation Ltd.) For details, please refer to the Announcement on the Investment and Construction of Hikrobot Intelligent
Manufacturing (Tonglu) Base Project by the Company’s Holding Subsidiary published by the Company on cninfo website (www.cninfo.com.cn) on January 19, 2022
(Announcement No. 2022-009). On August 25, 2022, HikRobot Intelligence won the use right of the state-owned construction land for the project with a total of
RMB52.52 million. On September 9, 2022, HikRobot Intelligence and Tonglu Planning and Natural Resources Bureau signed the Contract for Assigning the Right to
Use State-owned Construction Land.
On January 18, 2022, the 8th meeting of the 5th session of the Board of Directors of the Company deliberated and approved the Proposal on the Investment and
Construction of Hikvision Global Warehousing and Logistics Center Project, and approved the Company to invest self-raised funds of RMB 1.28605 billion to build
the above project. The project undertaker is Hangzhou Hikvision Electronics Co., Ltd. (hereinafter referred to as "Electronics Company"), which is a holding
subsidiary of Hikvision. For details, please refer to the Announcement on the Investment and Construction of Hikvision Global Warehousing and Logistics Center
Project (Announcement No. 2022- 010). On January 24, 2022, the Electronics Company won the use right of the state-owned construction land for the project (Phase
I) with a total of RMB 53.77 million. On February 10, 2022, the Electronics Company and Tonglu Planning and Natural Resources Bureau signed the Contract for
Assigning the Right to Use State-owned Construction Land. On June 10, 2022, the project (Phase I) completed the process of obtaining the Building Construction
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Hikvision 2022 Annual Report
Permit for the warehousing construction and started to construct.
2. Repurchase of the Company's Public Shares
On September 15, 2022 and October 10, 2022, the Company held the 13h meeting of the 5th session of the Board of Directors and the second extraordinary general
meeting of shareholders in 2022 respectively, deliberated and approved the Proposal on the Plan of Repurchase Part of the Company's Public Shares, approved the
Company using its own fund to repurchase part of its RMB common shares (A shares) that have been issued domestically by means of centralized bidding through the
trading system of the SZSE, the aggregate amount of repurchase funds shall not exceed RMB2.5 billion (inclusive) and not less than RMB 2 billion (inclusive), the
repurchase price shall not exceed RMB40 per share (inclusive), the implementation period of the repurchase shall not exceed 12 months from the date of the general
meeting of shareholders of the Company at which the proposal on the plan of repurchase part of the Company's public shares is reviewed and approved, and the
Company will make repurchase decisions and implement them based on market conditions during the repurchase period. The shares repurchased by the Company will
be cancelled for reducing the registered capital according to law. For details, please refer to the Announcement on Resolutions of 13th Meeting of the 5th Session of the
Board of Directors (Announcement No.: 2022-049), the Announcement on the Plan of Repurchase Part of the Company's Public Shares (Announcement No.: 2022-
050), the Announcement on Resolutions of the Second Extraordinary General Meeting of Shareholders in 2022 (Announcement No.: 2022-056), the Report on the Plan
of Repurchase Part of the Company's Public Shares (Announcement No.: 2022-057) published by the Company on cninfo website (www.cninfo.com.cn) on September
16, 2022 and October 11, 2022. On October 11, 2022, the Company first repurchased 6,820,968 shares of the Company by means of centralized bidding through a
dedicated securities account for the repurchase, accounting for 0.0723% of the Company's total share capital at that time. The highest transaction price was RMB29.65
per share, the lowest transaction price was RMB28.71 per share, and the total transaction amount was RMB199,981,024.67 (excluding transaction fees). For details,
please refer to the Announcement on the Initial Repurchase of the Company's Shares (Announcement No.: 2022-059) published by the Company on cninfo website
(www.cninfo.com.cn) on October 12, 2022. During the repurchase period, the Company disclosed the progress of repurchase as of the end of last month within the first
three trading days each month based on the regulation. For details, please refer to the Announcement on the Progress of Repurchase (Announcement No.: 2022-063)
(Announcement No.: 2022-066) published by the Company on cninfo website (www.cninfo.com.cn) on November 2, 2022, December 3, 2022, respectively. As of
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Hikvision 2022 Annual Report
December 30, 2022, the repurchase of shares had been completed, and the actual repurchase date was between October 11, 2022 and December 30, 2022, meet the
requirement on implementation period of repurchase in repurchase plan. As of December 30, 2022, the Company used the dedicated securities account for share
repurchase to cumulatively repurchase shares with the total amount of 66,987,835 shares by means of centralized bidding, accounting for 0.7103% of the Company's
total share capital at that time (9,430,920,624 shares). The highest transaction price was RMB35.13 per share, the lowest transaction price was RMB26.83 per share,
and the total transaction amount was RMB2,043,476,488.53 (excluding transaction fees). The source of share-repurchase funding was from the Company's own fund,
and the price of repurchase did not exceed the upper limit of the price (RMB40 per share) specified in the repurchase plan. The repurchase complies with relevant laws,
regulations and rules from the disclosed repurchase plan. For details, please refer to the Announcement on the Progress and Result of Repurchase of the Company's
Shares and Changes in Shares (Announcement No.: 2023-001) published by the Company on cninfo website (www.cninfo.com.cn) on January 4, 2023. On January 13,
2023, the Company had completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and Clearing Corporation
Ltd., with the total amount of 66,987,835 shares, accounting for 0.7103% of the Company's total share capital before the cancellation (9,430,920,624 shares), and the
number of cancelled shares is equal to the number of actual repurchased shares. After the completion of the repurchase and cancellation of shares, the Company's total
share capital changes from 9,430,920,624 shares to 9,363,932,789 shares. For details, please refer to the Announcement on the Completion of the Cancellation of the
Company's Repurchased Shares and Changes in Shares (Announcement No.: 2023-002) published by the Company on cninfo website (www.cninfo.com.cn) on January
17, 2023.
XVII. Significant Events of the Company’s Subsidiaries
√ Applicable □Inapplicable
1. Matters Relating to the Completion of the Spin-off of EZVIZ Network to be Listed on the Science and Technology Innovation Board of Shanghai Stock
Exchange
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Hikvision 2022 Annual Report
On January 8, 2021, the Proposal on the Spin-off of the Company’s Subsidiary Hangzhou EZVIZ Network 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 23, 2021, the Proposal on Overall Restructure the Company’s Holding Subsidiary, Hangzhou EZVIZ Network Ltd., to
A Company Limited by Shares was deliberated and adopted by the 3rd Meeting of the Strategy Committee in 2021 of the 5th session of the Board of Directors of the
Company. On June 24, 2021, Hangzhou EZVIZ Network Ltd. as a whole was restructured and changed to a company limited by shares. On July 2, 2021, Zhejiang
Securities Regulatory Bureau of China Securities Regulatory Commission accepted the application filed by Hangzhou EZVIZ Network Co., Ltd. (hereinafter referred
to as EZVIZ Network) for initial public offering of A shares and pre-listing counseling for listing on the Science and Technology Innovation Board. On August 10,
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 27, 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 13, 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 11, 2022, the Shanghai Stock Exchange (hereinafter referred to as "SSE") issued
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). 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 15, 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 SSE and the implementation of the issuance registration
procedures of the China Securities Regulatory Commission. On June 6, 2022, according to the Announcement on the Results of the 46th Review Meeting of the Listing
Committee of the SSE STAR Market in 2022 issued by the Shanghai Stock Exchange, the review result is: Hangzhou EZVIZ Network Co., Ltd. (initial offering) meets
the conditions for issuing and listing, as well as requirements for information disclosure. EZVIZ Network’s initial public offering of shares and its application for listing
on the SSE STAR Market was reviewed and approved by the SSE STAR Market's Listing Committee. For details, please refer to Announcement on the Initial Public
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Hikvision 2022 Annual Report
Offering of Shares by Hangzhou EZVIZ Network Co., Ltd., a Subsidiary of the Company, and its Application for Listing on the SSE STAR Market was Reviewed and
Approved by the SSE STAR Market's Listing Committee published by the Company on the cninfo website (www.cninfo.com.cn) on June 7, 2022 (Announcement No.:
2022-038). On October 22, 2022, Approval of the registration of the initial public offering of Hangzhou EZVIZ Network Co., Ltd. was published by the China Securities
Regulatory Commission (hereinafter referred to as "CSRC"), approving the application for registration of EZVIZ Network’s initial public offering of shares on the SSE
STAR Market. For details, please refer the Announcement on the Initial Public Offering of Shares by Hangzhou EZVIZ Network Co., Ltd., a Subsidiary of the Company,
and its Application for Listing on the SSE STAR Market was Registered and Approved by the China Securities Regulatory Commission (Announcement No.: 2022-065)
published by the Company on the cninfo website (www.cninfo.com.cn) on November 23, 2022. On December 28, 2022, EZVIZ Network was listed on the SSE STAR
Market.
2. Matters Relating to Steady Promotion of the Spin-off of HikRobot to be Listed on the SZSE ChiNext Market
On December 30, 2021, the 7th meeting of the 5th 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 Ltd., which authorized the
management of the Company to begin preparatory work for the Split-off and domestic listing of subsidiary Hangzhou Hikrobot Technology Ltd.. For details, please
refer to the Announcement on Authorizing Company Management to Begin Preparatory Work for the Split-off and Domestic Listing of Subsidiary Hangzhou Hikrobot
Technology Ltd. published by the Company on cninfo website (www.cninfo.com.cn) on December 31, 2021 (Announcement No. 2021-074). On June 10, 2022, the 11th
meeting of the 5th session of the Board of Directors and the 11th meeting of the 5th session of the Board of Supervisors reviewed and approved the relevant proposals
including Proposal on the Initial Public Offering of Shares by Hangzhou Hikrobot Technology, Ltd., a Subsidiary of the Company, and Listing on the SZSE ChiNext
Market, and Plan on Spin-off of Hangzhou Hikrobot Technology Co., Ltd., a subsidiary of the Company, and Listing on the SZSE ChiNext Market. Approved the initial
public offering of RMB common shares (A shares) and listing on the SZSE ChiNext Market of the subsidiary, Hangzhou Hikrobot Technology Ltd., after completing
the joint-stock system reform. For details, please refer to the Plan on Spin-off of Hangzhou Hikrobot Technology Ltd., a Subsidiary of the Company, and Listing on the
SZSE ChiNext Market published by the Company on June 11, 2022 on cninfo website (www.cninfo.com.cn). On July 20, 2022, the 5th meeting of the 5th session of the
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Hikvision 2022 Annual Report
Board of Directors' Strategy Committee in 2022 reviewed and approved the Proposal on the Change the Hangzhou Hikrobot Technology Ltd., a Holding Subsidiary of
the Company, to A Company Limited by Shares On July 21, 2022, Hangzhou Hikrobot Technology Ltd was restructured to a company limited by shares as a whole. On
December 9, the Proposal on Hangzhou Hikvision Digital Technology Co., Ltd.'s Plan on the Spin-off of Hangzhou Hikrobot Technology Co., Ltd., a subsidiary of the
Company, and Listing on the SZSE ChiNext Market (revised draft) was reviewed and approved by the 15th meeting of the 5th session of the Board of Directors and the
14th meeting of the 5th session of the Board of Supervisors. On December 26, 2012, the Company's 3rd Extraordinary General Meeting in 2022 reviewed and approved
the relevant proposals on the spin-off of Hangzhou Hikrobot Technology Co., Ltd. to be listed on the SZSE ChiNext Market. On March 7th 2023, Hangzhou Hikrobot
Co., Ltd. (hereinafter referred to as "HikRobot") received Notice on Accepting the Application Documents for the Initial Public Offering of Shares and Listing on the
SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd. (SZSE Listing Review [2023] No. 252) issued by Shenzhen Stock Exchange, and SZSE considered that
application documents were completed and decided to accept. For details, please refer to the Announcement on the Application for the Initial Public Offering of Shares
and Listing on the SZSE ChiNext Market of Hangzhou Hikrobot Co., Ltd., a Subsidiary of the Company, is Accepted by the SZSE (Announcement No.: 2023-008)
published by the Company on cninfo website (www.cninfo.com.cn) on March 8, 2023.
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Hikvision 2022 Annual Report
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 Shares Bonus transferred
Shares Ratio Others Sub-total Shares Ratio
Issued share from capital
reserve
1. Shares subject to conditional restriction(s) 215,314,570 2.31% 97,402,605 -57,468,669 39,933,936 255,248,506 2.71%
1) State holdings
2) Shares held by state-owned corporates
3) Shares held by other domestic investors 215,200,030 2.31% 97,266,605 -57,411,399 39,855,206 255,055,236 2.70%
Including: held by domestic corporations
held by domestic individuals 215,200,030 2.31% 97,266,605 -57,411,399 39,855,206 255,055,236 2.70%
4) Shares held by overseas investors 114,540 0.00% 136,000 -57,270 78,730 193,270 0.00%
Including: held by overseas corporations
held by overseas individuals 114,540 0.00% 136,000 -57,270 78,730 193,270 0.00%
2. Shares without restriction 9,120,491,544 97.69% 55,180,574 55,180,574 9,175,672,118 97.29%
1) RMB ordinary shares 9,120,491,544 97.69% 55,180,574 55,180,574 9,175,672,118 97.29%
2) Domestically listed foreign shares
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Hikvision 2022 Annual Report
Before the change Changes in the period (+, -) After the change
Share
New Shares Bonus transferred
Shares Ratio Others Sub-total Shares Ratio
Issued share from capital
reserve
3) Foreign shares listed overseas
4) Others
3. Total 9,335,806,114 100.00% 97,402,605 -2,288,095 95,114,510 9,430,920,624 100.00%
Note: the tailing difference of the data in the table above is due to rounding to two decimal.
Reason for the changes in share capital
√Applicable □Inapplicable
(1) During the Reporting Period, the Company Completed the Grant of the 2021 Restricted Share Incentive Scheme
On December 30, 2021, proposals were reviewed and approved by the 7th Meeting of the 5th session of the Board of Directors of the Company, including the 2021
Restricted Stock Plan (Revised Draft) and its Summary and Proposal to the General Meeting of Shareholders to Authorize the Board of Directors to Manage Relevant
Matters of the 2021 Restricted Share Incentive Scheme, proposing the General Meeting of Shareholders to authorize the Board of Directors to implement relevant
matters of the 2021 Restricted Share Incentive Scheme.
On January 18, 2022, the Proposal on Granting Restricted Shares to Grantees under the 2021 Restricted Share Incentive Scheme was reviewed and approved by
the 8th Meeting of the 5th session of the Board of Directors and the 8th Meeting of the 5th session of the Board of Supervisors of the Company. Based on the relevant
laws, regulations, department rules, and normative documents such as the Measures for the Management of Equity Incentives of Listed Companies, as well as 2021
Restricted Stock Plan (Revised Draft) and related authorization approved by the 1st Extraordinary General Meeting of Shareholders in 2022, the Company has completed
the share grant and registration of the 2021 Restricted Share Incentive Scheme. The grantees are 9,738 people, and the total amount of restricted shares granted is
97,402,605 shares, accounting for 1.04% of the total share capital of the Company before the grant. The granted shares were listed on February 11, 2022, and the total
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Hikvision 2022 Annual Report
share capital of the Company increased by 97,402,605 shares from 9,335,806,114 shares to 9,433,208,719 shares.
For details, please refer to the Announcement on the Completion of the Grant of Shares under the 2021 Restricted Share Incentive Scheme published by the
Company on www.cninfo.com.cn on February 10th 2022 (No. 2022-011).
(2) During the reporting period, the Company has completed the second vesting, repurchase and cancellation of the 2018 restricted share incentive scheme.
On May 5, 2022, the 10th meeting of the 5th session of the Board of Directors and the 10th meeting of the 5th session of the Board of Supervisors reviewed and
approved the Proposal on the achievement of unlocking conditions for the second unlocking period of the 2018 restricted Share Incentive Scheme and Proposal on the
Second Repurchase and Cancellation of the Granted but Unvested Restricted Shares under the 2018 Restricted Share Incentive Scheme, the Company has implemented
the vesting of the total amount of 33,142,730 restricted shares for 5,533 grantees, and the vested shares were listed on May 18, 2022. Meanwhile, 2,288,095 restricted
shares that did not meet the incentive conditions were repurchased and cancelled, and the repurchase and cancellation procedures were completed on December 19,
2022, and the total share capital of the Company decreased by 2,288,095 shares from 9,433,208,719 shares to 9,430,920,624 shares.
For details, please refer the Indicative Announcement on Vesting, Listing and Circulation of Shares in the Second Vesting Period of the 2018 Restricted Share
Incentive Scheme (No. 2022-036) and the Announcement on the Second Repurchase and Cancellation of the Granted but Unvested Restricted Shares under the 2018
Restricted Share Incentive Scheme (No. 2022-071) published by the Company on www.cninfo.com.cn on May 17, 2022 and December 19, 2022, respectively.
Approval for changes in share capital
√Applicable □Inapplicable
(1) The Grant of the 2021 Restricted Share Incentive Scheme
On December 30, 2021, proposals were reviewed and approved by the 7th Meeting of the 5th session of the Board of Directors of the Company, including the 2021
Restricted Stock Plan (Revised Draft) and its Summary and Proposal to the General Meeting of Shareholders to Authorize the Board of Directors to Manage Relevant
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Hikvision 2022 Annual Report
Matters of the 2021 Restricted Share Incentive Scheme, proposing the General Meeting of Shareholders to authorize the Board of Directors to implement relevant
matters of the 2021 Restricted Share Incentive Scheme. On January 18, 2022, the Proposal on Granting Restricted Shares to Grantees under the 2021 Restricted Share
Incentive Scheme was reviewed and approved by the 8th Meeting of the 5th session of the Board of Directors and the 8th Meeting of the 5th session of the Board of
Supervisors of the Company. Based on the relevant laws, regulations, department rules, and normative documents such as the Measures for the Management of Equity
Incentives of Listed Companies, as well as 2021 Restricted Stock Plan (Revised Draft) and related authorization approved by the 1st Extraordinary General Meeting of
Shareholders in 2022, the Company has completed the share grant and registration of the 2021 Restricted Share Incentive Scheme. The grantees are 9,738 people, and
the total amount of restricted shares granted is 97,402,605 shares, accounting for 1.04% of the total share capital of the Company before the grant. The granted shares
were listed on February 11, 2022.
(2) The Second Vesting, Repurchase and Cancellation of the 2018 Restricted Share Incentive Scheme
On May 5, 2022, the 10th meeting of the 5th session of the Board of Directors and the 10th meeting of the 5th session of the Board of Supervisors reviewed and
approved the Proposal on the achievement of unlocking conditions for the second unlocking period of the 2018 restricted Share Incentive Scheme and Proposal on the
Second Repurchase and Cancellation of the Granted but Unvested Restricted Shares under the 2018 Restricted Share Incentive Scheme, the Company has implemented
the vesting of the total amount of 33,142,730 restricted shares for 5,533 grantees, and the vested shares were listed on May 18, 2022. Meanwhile, 2,288,095 restricted
shares that did not meet the incentive conditions were repurchased and cancelled, and the repurchase and cancellation procedures were completed on December 19,
2022.
Transfer for changes in share capital
√Applicable □Inapplicable
(1) The Grant of the 2021 Restricted Share Incentive Scheme
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Hikvision 2022 Annual Report
On February 11, 2022, the restricted shares of the 2021 Restricted Share Incentive Scheme were listed, and the total amount of restricted shares granted is
97,402,605 shares. The total share capital of the Company increased by 97,402,605 shares from 9,335,806,114 shares to 9,433,208,719 shares.
(2) The Second Repurchase and Cancellation of the 2018 Restricted Share Incentive Scheme
On December 19, 2022, the second repurchase and cancellation procedures of the granted but unvested restricted shares under the 2018 Restricted Share Incentive
Scheme were completed, and the total amount of repurchased and cancelled restricted shares is 2,288,095. The total share capital of the Company decreased by
2,288,095 shares from 9,433,208,719 shares to 9,430,920,624 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
Opening restricted Increased in current Vested in current
Name of shareholder Closing restricted shares Note for restricted shares Vesting date
shares period period
Restricted shares of share incentive scheme.
Grantees of restricted
The granted 97,402,605 restricted shares
share incentive plan 68,762,683 97,402,605 35,430,825 130,734,463 May 18, 2022
under the 2021 Restricted Share Incentive
(consolidated)
Scheme were listed.
Qu Liyang 11,812 0 0 11,812 Restricted shares for senior executives According to the relevant
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Hikvision 2022 Annual Report
Opening restricted Increased in current Vested in current
Name of shareholder Closing restricted shares Note for restricted shares Vesting date
shares period period
Wang Qiuchao 26,250 0 0 26,250 Restricted shares for senior executives regulations on the
Xu Lirong 227,250 0 0 227,250 Restricted shares for senior executives management of executive
Hu Yangzhong 116,434,858 0 0 116,434,858 Restricted shares for senior executives shares
Wu Weiqi 6,473,317 0 0 6,473,317 Restricted shares for senior executives
He Hongli 248,625 0 0 248,625 Restricted shares for senior executives
Restricted shares for senior executives +
Cai Changyang 82,125 0 0 82,125 partial of the vested restricted shares turning
into restricted shares for senior executives
Restricted shares for senior executives +
Xu Ximing 29,550 59,100 0 88,650 partial of the vested restricted shares turning
into restricted shares for senior executives
Restricted shares for senior executives +
Bi Huijuan 130,950 36,900 0 167,850 partial of the vested restricted shares turning
into restricted shares for senior executives
Restricted shares for senior executives +
Pu Shiliang 161,925 30,000 0 191,925 partial of the vested restricted shares turning
into restricted shares for senior executives
Jin Duo 82,125 0 0 82,125 Restricted shares for senior executives
Restricted shares for senior executives +
Jin Yan 147,000 33,000 0 180,000 partial of the vested restricted shares turning
into restricted shares for senior executives
Restricted shares for senior executives +
Huang Fanghong 235,875 33,000 0 268,875 partial of the vested restricted shares turning
into restricted shares for senior executives
Restricted shares for senior executives +
Xu Peng 0 19311 0 19,311 partial of the vested restricted shares turning
into restricted shares for senior executives
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Hikvision 2022 Annual Report
Opening restricted Increased in current Vested in current
Name of shareholder Closing restricted shares Note for restricted shares Vesting date
shares period period
Restricted shares for senior executives +
Guo Xudong 0 11070 0 11,070 partial of the vested restricted shares turning
into restricted shares for senior executives
Total 193,054,345 97,624,986 35,430,825 255,248,506 -- --
Note:
1. Executives who are grantees under incentive restricted shares scheme, his/her holding incentive restricted shares are counted within the "Grantees of restricted
share incentive plan (consolidated)" on the first row.
2. On February 11, 2022, the restricted shares of the 2021 Restricted Share Incentive Scheme were listed, and the actual total amount of restricted shares granted is
97,402,605 shares.
3. The total amount of vested shares of the "Grantees of restricted share incentive plan (consolidated)" in current period is 35,430,825 shares, including 33,142,730
vested shares and 2,288,095 repurchased and cancelled shares of the 2018 Restricted Share Incentive Scheme.
II. Issuance and Listing of Securities
1. Securities (exclude Preferred Share) Issued during the Reporting Period
√Applicable □Inapplicable
Type of stocks Issue Price Issue amount Listing approved Terminal date of
and derivative Issue date Listing date Disclosure index Disclosure date
（or rate） (share) amount (share) transaction
securities
Shares
Restricted shares February 11, 2022 RMB29.71/share 97,402,605 February 11, 2022 97,402,605 www.cninfo.com.cn February 10, 2022
2. Explanation on Changes in Total Share Capital, the Structure of Shareholders, and the Structure of Assets and Liabilities of the Company
√ Applicable □ Inapplicable
(1) The Grant of the 2021 Restricted Share Incentive Scheme
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Hikvision 2022 Annual Report
On February 11, 2022, the restricted shares of the 2021 Restricted Share Incentive Scheme were listed, and the total amount of restricted shares granted is
97,402,605 shares. The total share capital of the Company increased by 97,402,605 shares from 9,335,806,114 shares to 9,433,208,719 shares.
(2) The Second Repurchase and Cancellation of the 2018 Restricted Share Incentive Scheme
On December 19, 2022, the second repurchase and cancellation procedures of the granted but unvested restricted shares under the 2018 Restricted Share Incentive
Scheme were completed, and the total amount of repurchased and cancelled restricted shares is 2,288,095. The total share capital of the Company decreased by
2,288,095 shares from 9,433,208,719 shares to 9,430,920,624 shares.
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
408,327 329,519
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
Total ordinary 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 Domestic state-
Technology HIK Group owned 36.09% 3,403,879,509 - - 3,403,879,509 Pledged 50,000,000
Co., Ltd. corporation
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Hikvision 2022 Annual Report
Overseas
Gong Hongjia 10.21% 962,504,814 - - 962,504,814 Pledged 71,270,000
individual
Hangzhou Weixun Equity Domestic non-
Investment Partnership state-owned 4.78% 450,795,176 - - 450,795,176 Pledged 28,900,000
(Limited Partnership) corporation
Shanghai Perseverance
Asset Management
Partnership (Limited
Partnership) - Other 4.58% 432,000,000 228,200,000 - 432,000,000 - -
Perseverance Adjacent
Mountain 1 Yuanwang
Fund
Domestic state-
CETC Investment
owned 2.46% 232,307,903 - - 232,307,903 - -
Holdings Co., Ltd.
corporation
Hangzhou Pukang Equity Domestic non-
Investment Partnership state-owned 1.94% 182,510,174 - - 182,510,174 Pledged 132,033,000
(Limited Partnership) corporation
The 52nd Research
Domestic state-
Institute at China
owned 1.92% 180,775,044 - - 180,775,044 - -
Electronics Technology
corporation
Group Corporation
Domestic
Hu Yangzhong 1.65% 155,246,477 - 116,434,858 38,811,619 - -
individual
Domestic state-
Central Huijin Investment
owned 0.69% 64,700,691 - - 64,700,691 - -
Co., Ltd.
corporation
Hong Kong Securities
Overseas
Clearing Company 0.55% 51,463,834 -34,667,773 - 51,463,834 -
corporation
Ltd.(HKSCC)
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Hikvision 2022 Annual Report
China Electronics Technology HIK Group Co., Ltd., CETC 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 Corporation. Ms. Chen Chunmei,
Explanation on associated relationship or limited partner of Hangzhou Pukang Equity Investment Partnership (Limited Partnership), is the spouse of Mr. Gong Hongjia, overseas
concerted actions among the above-mentioned individual shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Hangzhou Weixun Equity Investment
shareholders: Partnership (Limited Partnership) and Hangzhou Pukang Equity Investment Partnership (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 Administrative Measures for Acquisitions of Listed Companies.
Special explanation on the existence of As of the end of the reporting period, there is a dedicated securities account for repurchase among the Top 10 shareholders, "A dedicated
dedicated securities account among the Top 10 securities account for repurchase of Hangzhou Hikvision Digital Technology Co., Ltd.", which held 66,987,835 shares of the Company,
shareholders accounting for 0.71% of the Company's total share capital at the end of the reporting period.
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 ordinary shares 3,403,879,509
Gong Hongjia 962,504,814 RMB ordinary shares 962,504,814
Hangzhou Weixun Equity Investment Partnership (Limited Partnership) 450,795,176 RMB ordinary shares 450,795,176
Shanghai Perseverance Asset Management Partnership (Limited
432,000,000 RMB ordinary shares 432,000,000
Partnership) - Perseverance Adjacent Mountain 1 Yuanwang Fund
CETC Investment Holdings Co., Ltd. 232,307,903 RMB ordinary shares 232,307,903
Hangzhou Pukang Equity Investment Partnership (Limited Partnership) 182,510,174 RMB ordinary shares 182,510,174
The 52nd Research Institute at China Electronics Technology Group Co.,
180,775,044 RMB ordinary shares 180,775,044
Ltd.
Central Huijin Investment Co., Ltd. 64,700,691 RMB ordinary shares 64,700,691
Hong Kong Securities Clearing Company Ltd.(HKSCC) 51,463,834 RMB ordinary shares 51,463,834
Shanghai Chongyang Strategic Investment Ltd. – Chongyang Strategic
47,775,769 RMB ordinary shares 47,775,769
Intelligence Fund
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Hikvision 2022 Annual Report
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 10 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 10 shareholders and Top 10 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.
Special explanation on the existence of
As of the end of the reporting period, there is a dedicated securities account for repurchase among the Top 10 shareholder holding shares
dedicated securities account among the Top 10
without trading restrictions, "A dedicated securities account for repurchase of Hangzhou Hikvision Digital Technology Co., Ltd.", which
shareholders holding shares without trading
held 66,987,835 shares of the Company, accounting for 0.71% of the Company's total share capital at the end of the reporting period.
restrictions
Information on Top 10 shareholders of ordinary
Shanghai Chongyang Strategic Investment Ltd. – Chongyang Strategic Intelligence Fund, a shareholder, held 43,418,969 shares of the
shares participating in margin trading and short
Company in a margin account.
selling business
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 Technology products, intelligent products and electronic products; technology transfer,
Chen Zongnian November 29, 2002 9133000014306073XD
HIK Group Co., Ltd. technical services, manufacturing and sales; business consulting services,
rental services of self-owned real estate; import and export businesses.
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Hikvision 2022 Annual Report
Name of controlling Legal Representative
Date of establishment Organization code Business scope
shareholder /People in charge
Shares held by the controlling
shareholder in other listed Directly holds 47.16% shares of domestic listed company Phoenix Optical Co. Ltd., and indirectly holds 17.32% shares of domestic listed company
companies through controlling or Hangzhou EZVIZ Network Co., Ltd. (China Electronics Technology HIK Group Co., Ltd.holds 36.09% shares of the Company and the Company holds
holding during the reporting 48.00% shares of Hangzhou EZVIZ Network Co., Ltd).
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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Hikvision 2022 Annual Report
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
Name of the Legal
Date of Organization
actual Representative Business scope
establishment code
controller /People in 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
China Electronics export business of various commodities and technologies
February 25, (except for goods and technologies that are restricted or
Technology Group Chen Zhaoxiong 91110000710929498G
2002 restricted by the state-limited company); operating feed
Ltd. processing and "three comes one supplement" business;
operating counter trade and entrepot trade; Industrial
investment; asset management; engaged in e-commerce
information services; organization of enterprises in the
industry to go abroad, participate in exhibitions. (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.)
Shares held by the
actual controlling
China Electronics Technology Group Ltd. is the actual controller of 16 domestic listed companies including Sun Create
shareholder in Electronic Co., Ltd, CETC Digital Technology Co., Ltd, CETC Cyberspace Security Technology Co., Ltd., CETC Putian
other listed Technology Co., Ltd., Tai’ji Computer Corporation Limited, GLARUN Technology Co., Ltd. , Phoenix Optics Co., Ltd.,
companies Chengdu Tianao Electronic Co., Ltd., CETC Acoustic-Optic-Electronic Technology Inc., Hebei Sinopack Electronic
through Technology Co., Ltd., Eastern Communications Co.,Ltd., Eastcompeace Technology Co.,Ltd., Nanjing Putian
Telecommunications Co., Ltd., Chengdu Siwei Science and Technology Co., Ltd., Nanjingand Guobo Electronics Co.,
controlling or
Ltd., and Hangzhou EZVIZ Network Co., Ltd. and etc.
holding during the
reporting period
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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Hikvision 2022 Annual Report
The actual controller controls the Company through trust or other asset management methods
□ Applicable √Inapplicable
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 √ Inapplicable
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 2022 Annual Report
The number of
repurchased
shares as a
Planned Planned Amount of
Proportion to proportion of
Disclosure repurchase amount of Repurchase Use of repurchased
total share the underlying
Date amount of repurchase period repurchase shares
capital stock covered
shares fund (share)
by the share
incentive
scheme
Calculated
Calculated
based on that
based on that
the repurchase
the repurchase
price shall not
price shall not
exceed RMB40
exceed RMB40
per share. The Shall not
per share. The Cancel and
amount shall exceed
repurchased October 11, reduce
not exceed RMB2.5 billion
September 16, portion of 2022 – registered
62,500,000 (inclusive) and 66,987,835 Inapplicable
2022 shares shall not December 30, capital in
shares and not not less than
exceed 0.66% 202 accordance
less than RMB 2 billion
and not less with law
50,000,000 (inclusive)
than 0.53%,
share, and the
and final result
final result is
is subject to the
subject to the
actual
actual
repurchase.
repurchase.
On September 15, 2022 and October 10, 2022, the Company held the 13h meeting of the 5th session of the Board of
Directors and the second extraordinary general meeting of shareholders in 2022 respectively, deliberated and approved the
Proposal on the Plan of Repurchase Part of the Company's Public Shares, approved the Company using its own fund to
repurchase part of its RMB common shares (A shares) that have been issued domestically by means of centralized bidding
through the trading system of the SZSE, the aggregate amount of repurchase funds shall not exceed RMB2.5 billion
(inclusive) and not less than RMB 2 billion (inclusive), the repurchase price shall not exceed RMB40 per share (inclusive),
the implementation period of the repurchase shall not exceed 12 months from the date of the general meeting of
shareholders of the Company at which the proposal on the plan of repurchase part of the Company's public shares is
reviewed and approved, and the Company will make repurchase decisions and implement them based on market conditions
during the repurchase period. The shares repurchased by the Company will be cancelled for reducing the registered capital
according to law. For details, please refer to the Announcement on Resolutions of 13th Meeting of the 5th Session of the
Board of Directors (Announcement No.: 2022-049), the Announcement on the Plan of Repurchase Part of the Company's
Public Shares (Announcement No.: 2022-050), the Announcement on Resolutions of the Second Extraordinary General
Meeting of Shareholders in 2022 (Announcement No.: 2022-056), the Report on the Plan of Repurchase Part of the
Company's Public Shares (Announcement No.: 2022-057) published by the Company on cninfo website
(www.cninfo.com.cn) on September 16, 2022 and October 11, 2022. On October 11, 2022, the Company first repurchased
6,820,968 shares of the Company by means of centralized bidding through a dedicated securities account for the repurchase,
accounting for 0.0723% of the Company's total share capital at that time. The highest transaction price was RMB29.65
per share, the lowest transaction price was RMB28.71 per share, and the total transaction amount was RMB199,981,024.67
(excluding transaction fees). For details, please refer to the Announcement on the Initial Repurchase of the Company's
Shares (Announcement No.: 2022-059) published by the Company on cninfo website (www.cninfo.com.cn) on October
12, 2022. During the repurchase period, the Company disclosed the progress of repurchase as of the end of last month
within the first three trading days each month based on the regulation. For details, please refer to the Announcement on
the Progress of Repurchase (Announcement No.: 2022-063) (Announcement No.: 2022-066) published by the Company
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on cninfo website (www.cninfo.com.cn) on November 2, 2022, December 3, 2022, respectively. As of December 30, 2022,
the repurchase of shares had been completed, and the actual repurchase date was between October 11, 2022 and December
30, 2022, meet the requirement on implementation period of repurchase in repurchase plan. As of December 30, 2022, the
Company used the dedicated securities account for share repurchase to cumulatively repurchase shares with the total
amount of 66,987,835 shares by means of centralized bidding, accounting for 0.7103% of the Company's total share capital
at that time (9,430,920,624 shares). The highest transaction price was RMB35.13 per share, the lowest transaction price
was RMB26.83 per share, and the total transaction amount was RMB2,043,476,488.53 (excluding transaction fees). The
source of share-repurchase funding was from the Company's own fund, and the price of repurchase did not exceed the
upper limit of the price (RMB40 per share) specified in the repurchase plan. The repurchase complies with relevant laws,
regulations and rules from the disclosed repurchase plan. For details, please refer to the Announcement on the Progress
and Result of Repurchase of the Company's Shares and Changes in Shares (Announcement No.: 2023-001) published by
the Company on cninfo website (www.cninfo.com.cn) on January 4, 2023. On January 13, 2023, the Company had
completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and
Clearing Ltd., with the total amount of 66,987,835 shares, accounting for 0.7103% of the Company's total share capital
before the cancellation (9,430,920,624 shares), and the number of cancelled shares is equal to the number of actual
repurchased shares. After the completion of the repurchase and cancellation of shares, the Company's total share capital
changes from 9,430,920,624 shares to 9,363,932,789 shares. For details, please refer to the Announcement on the
Completion of the Cancellation of the Company's Repurchased Shares and Changes in Shares (Announcement No.: 2023-
002) published by the Company on cninfo website (www.cninfo.com.cn) on January 17, 2023.
Implementation progress of reduce holdings of repurchased shares by means of centralized bidding
□Applicable√ Inapplicable
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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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Section IX Bonds
□ Applicable √ Inapplicable
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Hikvision 2022 Annual Report
Section X Financial Report
Audit Report
Audit Opinion Standard unqualified audit opinion
Audit Report sign-off Date April 13, 2023
Audit Institution Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Audit Report Number Deloitte Auditors’ Report (Audit) No. 23- P04048
Certified Public Accounts Name Tang Lianjiong, Cai Jin
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 31, 2022, consolidated and parent company's income statement, cash flow statement and statement of changes
in owners’ equity of 2022 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 31, 2022 and consolidated and parent company’s financial performance and cash
flows of 2022.
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 2022 in the consolidated financial statements of the Group for
the year ended December 31, 2022 is RMB83,166,321,681.14. The product sales revenue, a key performance indicator,
reaches RMB78,971,234,689.44, accounting for 94.96% 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 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 31, 2022, the balance
of accounts receivable amounted to RMB32,404,999,921.01, and the balance of provision for credit losses of accounts
receivable amounted to RMB 2,498,705,510.61. 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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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 is determined based on
the Group’s historical overdue ratio and default and with reference to the forward-looking information of the industry. 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, 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
of necessary internal control to enable the financial statements are free from material misstatement, whether due to fraud
or error.
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Hikvision 2022 Annual Report
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
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
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Hikvision 2022 Annual Report
of financial statements of the current period so as to make them key matters. We describe the matters in the audit report.
We decide not to communicate on such matters in the audit report unless the laws and regulations forbid the public
disclosure of such matters, or, in rare circumstances, if the negative consequence of communication of matters in the audit
report is reasonably expected to exceed the benefit of the public interest.
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Hikvision 2022 Annual Report
On December 31, 2022
Consolidated Balance Sheet
Unit: RMB
Item Notes On December 31, 2022 On December 31, 2021
Current Assets:
Cash and bank balances (V)1 40,011,863,999.94 34,721,870,931.36
Held-for-trading financial assets (V)2 12,807,438.36 34,320,010.83
Notes receivable (V)3 2,519,988,159.23 1,522,760,905.30
Accounts receivable (V)4 29,906,294,410.40 26,174,773,100.42
Receivables for financing (V)5 1,484,218,258.74 1,316,035,122.06
Prepayments (V)6 534,780,120.52 505,798,253.35
Other receivables (V)7 516,503,485.58 359,620,445.88
Inventories (V)8 18,998,222,978.81 17,974,112,407.60
Contract assets (V)9 2,118,223,370.98 1,411,372,624.91
Non-current assets due within one year (V)10 996,902,343.27 975,960,437.14
Other current assets (V)11 806,832,941.58 1,022,600,377.78
Total Current Assets 97,906,637,507.41 86,019,224,616.63
Non-current Assets:
Long-term receivables (V)12 540,647,965.30 613,067,944.97
Long-term equity investment (V)13 1,252,033,513.41 982,165,546.45
Other non-current financial assets (V)14 423,893,239.94 438,724,172.22
Fixed assets (V)15 8,539,842,630.68 6,695,590,671.27
Construction in progress (V)16 3,770,803,300.80 2,323,336,098.68
Right-of-use assets (V)17 574,478,326.31 566,393,672.75
Intangible assets (V)18 1,544,933,502.19 1,304,247,415.07
Goodwill (V)19 217,386,531.28 202,381,895.37
Long-term deferred expenses (V)20 177,277,742.41 158,007,174.90
Deferred tax assets (V)21 1,469,646,489.04 1,210,877,575.24
Other non-current assets (V)22 2,815,702,012.70 3,350,526,411.63
Total Non-current Assets 21,326,645,254.06 17,845,318,578.55
Total Assets 119,233,282,761.47 103,864,543,195.18
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Hikvision 2022 Annual Report
On December 31, 2022
Consolidated Balance Sheet-continued
Unit: RMB
Item Notes On December 31, 2022 On December 31, 2021
Current Liabilities:
Short-term borrowings (V)23 3,343,071,972.89 4,074,962,469.97
Held-for-trading financial liabilities (V)24 68,299,685.57 4,062,317.57
Notes payable (V)25 1,207,756,963.94 1,339,998,383.34
Accounts payable (V)26 16,025,563,802.99 15,889,694,981.12
Contract liabilities (V)27 2,644,496,508.36 2,580,894,226.59
Payroll payable (V)28 4,837,302,455.95 4,595,552,073.12
Taxes payable (V)29 1,234,032,138.37 1,461,470,029.69
Other payables (V)30 3,203,308,686.31 1,830,626,583.03
Non-current liabilities due within one year (V)31 868,197,272.46 596,915,360.58
Other current liabilities (V)32 923,721,593.78 917,479,922.61
Total Current Liabilities 34,355,751,080.62 33,291,656,347.62
Non-current Liabilities:
Long-term borrowings (V)33 7,522,315,341.60 3,284,371,642.52
Lease liabilities (V)34 277,255,924.83 317,951,879.21
Long-term payables (V)35 7,569,934.67 9,009,331.50
Provisions (V)36 219,365,227.62 200,675,950.96
Deferred income (V)37 933,260,426.12 738,586,458.05
Deferred tax liabilities (V)21 116,502,770.84 93,315,151.17
Other non-current liabilities (V)38 2,831,108,087.59 534,334,158.27
Total Non-current Liabilities 11,907,377,713.27 5,178,244,571.68
Total Liabilities 46,263,128,793.89 38,469,900,919.30
Owners’ Equity
Share capital (V)39 9,430,920,624.00 9,335,806,114.00
Capital reserves (V)40 10,141,153,435.32 5,404,070,600.07
Less: Treasury shares (V)41 5,316,033,650.24 1,023,188,723.04
Other comprehensive income (V)42 (42,587,158.81) (77,184,125.29)
Surplus reserves (V)43 4,715,460,312.00 4,672,505,348.00
Retained earnings (V)44 49,460,240,986.49 45,148,877,451.52
Total Owners' Equity Attributable to Owner
68,389,154,548.76 63,460,886,665.26
of the Company
Minority equity 4,580,999,418.82 1,933,755,610.62
Total Owners' Equity 72,970,153,967.58 65,394,642,275.88
Total Liabilities and Owners' Equity 119,233,282,761.47 103,864,543,195.18
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Legal Representative: Chen Zongnian; Person in charge of the accounting work: Jin Yan;
Person in Charge of the Accounting Department: Zhan Junhua
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Hikvision 2022 Annual Report
On December 31, 2022
Balance Sheet of the Parent Company
Unit: RMB
Item Notes On December 31, 2022 On December 31, 2021
Current Assets:
Cash and bank balances 27,826,883,144.97 26,656,489,813.38
Held-for-trading financial assets - 4,489,098.88
Notes receivable 291,894,821.88 254,830,140.51
Accounts receivable (XV)1 24,375,815,151.52 23,878,118,071.42
Receivables for financing 1,380,237.21 3,116,794.78
Prepayments 78,220,424.69 116,908,227.97
Other receivables (XV)2 2,409,877,936.73 1,514,142,364.05
Inventories 287,356,998.22 346,835,446.94
Contract assets 2,070,526.66 2,627,800.33
Non-current assets due within one year 145,198,110.49 123,112,934.70
Other current assets 10,325,583.58 46,183,195.94
Total Current Assets 55,429,022,935.95 52,946,853,888.90
Non-current Assets:
Long-term accounts receivable 544,335,046.78 237,682,275.59
Long-term equity investment (XV)3 7,735,758,795.50 7,785,916,631.88
Other non-current financial assets 336,896,766.52 435,839,952.22
Fixed assets 3,632,220,781.28 2,834,983,102.39
Construction in progress 31,536,529.55 450,957,191.99
Right-of-use assets 106,886,641.18 67,592,195.40
Intangible assets 108,027,048.91 134,626,963.77
Long-term deferred expenses 44,756,196.08 61,162,816.25
Deferred tax assets 171,524,646.19 281,893,463.93
Other non-current assets 20,271,638.61 21,042,856.65
Total Non-current Assets 12,732,214,090.60 12,311,697,450.07
Total Assets 68,161,237,026.55 65,258,551,338.97
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Hikvision 2022 Annual Report
On December 31, 2022
Balance Sheet of the Parent Company - continued
Unit: RMB
Item Notes On December 31, 2022 On December 31, 2021
Current Liabilities:
Short-term borrowings 371,761,513.12 361,117,361.14
Accounts payable 871,899,603.98 713,263,324.12
Contract liabilities 252,386,307.55 368,945,242.08
Payroll payable 2,751,925,304.64 2,838,109,439.40
Taxes payable 371,935,883.41 861,102,872.06
Other payables 1,523,785,190.90 1,334,246,256.62
Non-current liabilities due within one year 280,431,699.90 66,524,298.83
Other current liabilities 504,448,226.96 561,225,504.26
Total Current Liabilities 6,928,573,730.46 7,104,534,298.51
Non-current Liabilities:
Long-term borrowings 1,674,051,800.00 1,254,076,200.00
Lease liabilities 51,034,219.65 27,440,248.49
Provisions 112,936,131.57 113,998,912.05
Deferred Income 463,302,126.80 365,699,705.71
Other non-current liabilities 2,806,169,050.05 511,594,361.52
Total Non-current Liabilities 5,107,493,328.07 2,272,809,427.77
Total Liabilities 12,036,067,058.53 9,377,343,726.28
Owners’ Equity
Share capital 9,430,920,624.00 9,335,806,114.00
Capital reserves 8,264,384,780.30 4,937,523,553.84
Less: Treasury shares 5,316,033,650.24 1,023,188,723.04
Surplus reserves 4,715,460,312.00 4,672,505,348.00
Retained earnings 39,030,437,901.96 37,958,561,319.89
Total Owners' Equity 56,125,169,968.02 55,881,207,612.69
Total Liabilities and Owners' Equity 68,161,237,026.55 65,258,551,338.97
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Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
Consolidated Income Statement
Unit: RMB
Amount for the current Amount for the prior
Item Notes
period period
I. Total Revenue (V)45 83,166,321,681.14 81,420,053,539.27
Less：Total operating costs (V)45 47,996,254,466.32 45,329,400,332.65
Business taxes and surcharges (V)46 581,896,696.51 560,980,007.52
Selling expenses (V)47 9,773,457,336.23 8,586,443,668.02
Administrative expenses (V)48 2,642,113,372.00 2,132,250,463.96
Research and Development (R&D) expenses (V)49 9,814,444,260.55 8,251,645,101.39
Financial expenses (V)50 (990,401,533.32) (133,343,257.84)
Including：Interest expenses 311,251,154.55 229,950,217.93
Interest income 921,912,411.61 885,545,988.62
Add: Other Income (V)51 2,482,467,855.97 2,628,560,820.46
Investment income (V)52 218,396,306.44 174,205,547.82
Including: Investment gains in associated enterprise and
106,498,595.01 114,137,281.18
joint-venture enterprise
Gains (losses) from changes in fair values (V)53 (155,567,520.89) (38,200,024.47)
Credit impairment gains (losses) (V)54 (585,161,235.45) (569,758,165.50)
Impairment gains (losses) of assets (V)55 (508,453,828.82) (447,689,406.60)
Asset disposal income (losses) (17,578,905.00) 34,225,603.81
II. Operating Profit 14,782,659,755.10 18,474,021,599.09
Add: Non-operating income (V)56 87,365,985.48 75,744,369.29
Less: Non-operating expenses (V)57 15,074,113.11 81,554,105.75
III. Total Profit 14,854,951,627.47 18,468,211,862.63
Less: Income tax expenses (V)58 1,297,981,905.54 957,490,652.16
IV. Net Profit 13,556,969,721.93 17,510,721,210.47
4.1 Classification by continuous operation
(a) Net profit on continuous operation 13,556,969,721.93 17,510,721,210.47
(b) Net loss on terminated operation - -
4.2 Classification by attribution of ownership
(a) Profit or loss attributable to minority shareholders 719,627,660.86 710,310,178.42
(b) Net profit attributable to owners of parent company 12,837,342,061.07 16,800,411,032.05
V. Other Comprehensive Income, Net of Income Tax (V)42 88,691,088.90 4,631,122.68
Other comprehensive income attributable to owners of the
34,596,966.48 7,809,801.65
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
34,596,966.48 7,809,801.65
loss in subsequent periods
1. Exchange differences arising on conversion of financial
34,596,966.48 7,809,801.65
statements denominated in foreign currencies
Other comprehensive income attributable to minority interests,
54,094,122.42 (3,178,678.97)
net of tax
VI. Total Comprehensive Income 13,645,660,810.83 17,515,352,333.15
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Hikvision 2022 Annual Report
Amount for the current Amount for the prior
Item Notes
period period
Total comprehensive income attributable to owners of the parent
12,871,939,027.55 16,808,220,833.70
company
Total comprehensive income attributable to minority
773,721,783.28 707,131,499.45
shareholders
VII. Earnings per Share
(I) Basic earnings per share (XVI)2 1.370 1.810
(II) Diluted earnings per share (XVI)2 1.370 1.806
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Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
Income Statement of the Parent Company
Unit: RMB
Amount for the Amount for the prior
Item Notes
current period period
I. Total Revenue (XV)4 24,284,505,338.35 28,072,593,261.87
Less: Total operating Cost (XV)4 5,097,739,346.67 5,240,788,874.32
Business taxes and surcharges 282,765,774.49 327,853,515.36
Selling expenses 3,580,457,766.03 3,578,887,952.72
Administrative expenses 883,004,663.75 767,812,041.04
Research and Development (R&D) expenses 6,920,548,083.50 6,049,343,480.30
Financial expenses (654,027,587.29) (740,196,978.65)
Including : Interest expenses 103,549,530.55 104,266,342.46
Interest income 765,252,513.50 701,176,190.67
Add: Other income 1,747,068,413.89 1,889,775,429.25
Investment income (XV)5 387,283,344.13 237,198,739.71
Including: Investment gains in associated enterprise and
118,900,466.08 109,087,538.20
joint-venture enterprise
Gains (losses) from changes in fair values (74,432,284.58) (48,725,796.17)
Credit impairment gains (losses) (122,761,912.01) (119,440,900.17)
Impairment gains (losses) of assets (1,195,518.35) (2,669,913.88)
Asset disposal income (losses) (2,215,205.61) 30,917,301.16
II. Operating profit 10,107,764,128.67 14,835,159,236.68
Add: Non-operating income 18,830,134.69 9,542,292.17
Less: Non-operating expenses 1,205,910.50 61,845,120.19
III. Total profit 10,125,388,352.86 14,782,856,408.66
Less: Income tax expenses 527,533,244.69 694,128,740.64
IV. Net profit 9,597,855,108.17 14,088,727,668.02
V. Other comprehensive income, net of income tax - -
VI. Total comprehensive income 9,597,855,108.17 14,088,727,668.02
220
Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
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 receipts from sale of goods or rendering of services 86,798,776,609.53 83,503,340,788.69
Receipts of tax refunds 3,767,899,232.43 4,683,092,023.52
Other cash receipts relating to operating activities (V)59(1) 2,102,400,537.73 2,798,426,938.05
Sub-total of ash inflows from operating activities 92,669,076,379.69 90,984,859,750.26
Cash payments for goods purchased and services received 54,179,038,046.40 53,662,747,197.88
Cash paid to and on behalf of employees 16,397,768,429.86 12,868,949,235.34
Payments of various types of taxes 5,947,034,037.02 6,447,300,353.27
Other cash payments relating to operating activities (V)59(2) 5,981,100,484.03 5,297,338,276.78
Sub-total of cash outflows from operating activities 82,504,940,997.31 78,276,335,063.27
Net Cash Flows from Operating Activities (V)60(1) 10,164,135,382.38 12,708,524,686.99
II. Cash Flows from Investing Activities:
Cash receipts from recovery of investments 7,309,732,287.10 6,189,975,412.80
Cash receipts from investment income 51,892,209.92 115,644,801.97
Net cash receipts from disposals of fixed assets, intangible assets and
12,978,200.27 64,430,953.56
other long-term assets
Other cash receipts relating to investing activities (V)59(3) 47,770,416.23 -
Sub-total of cash inflows from investing activities 7,422,373,113.52 6,370,051,168.33
Net cash paid for obtaining subsidiaries and other business units (V)60(2) - 323,604,530.74
Cash payments to acquire or construct fixed assets, intangible assets
3,755,680,900.22 3,098,310,855.39
and other long-term assets
Cash payments to acquire investments 7,392,073,275.54 6,094,268,306.70
Other cash payments relating to investment activities (V)59(4) - 10,196,658.79
Sub-total of cash outflows from investing activities 11,147,754,175.76 9,526,380,351.62
Net Cash Flows from Investing Activities (3,725,381,062.24) (3,156,329,183.29)
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 6,015,196,647.38 207,702,900.00
Including: cash receipts from capital contributions from minority
3,121,365,252.83 207,702,900.00
owners of subsidiaries
Cash receipts from borrowings 8,360,333,394.08 5,915,784,932.52
Sub-total of cash inflows from financing activities 14,375,530,041.46 6,123,487,832.52
Cash repayments of borrowings 4,786,252,322.38 7,758,027,348.85
Cash payments for distribution of dividends or profits or settlement
8,734,449,665.28 7,844,017,257.76
of interest expenses
Including : Dividends and profits paid by subsidiaries to minority
3,050,502.27 4,704,000.00
shareholders
Other cash payments relating to financing activities (V)59(5) 2,310,746,266.55 312,940,867.51
Sub-total of cash outflows from financing activities 15,831,448,254.21 15,914,985,474.12
Net Cash Flows from Financing Activities (1,455,918,212.75) (9,791,497,641.60)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
228,609,977.98 (181,591,311.21)
Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents (V)60(1) 5,211,446,085.37 (420,893,449.11)
Add: Opening balance of Cash and Cash Equivalents (V)60(1) 34,603,944,429.20 35,024,837,878.31
VI. Closing Balance of Cash and Cash Equivalents (V)60(3) 39,815,390,514.57 34,603,944,429.20
221
Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
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 26,487,868,077.06 34,148,655,237.57
Receipts of tax refunds 1,436,480,287.99 1,726,725,329.46
Other cash receipts relating to operating activities 1,532,865,664.26 976,326,567.89
Sub-total of cash inflows from operating activities 29,457,214,029.31 36,851,707,134.92
Cash payments for goods acquired and services received 5,493,671,074.35 8,696,110,952.82
Cash paid to and on behalf of employees 7,512,557,371.10 6,188,349,496.37
Payments of various types of taxes 3,460,034,171.26 4,406,691,364.91
Other cash payments relating to operating activities 3,467,533,481.78 1,765,753,448.19
Sub-total of cash outflows from operating activities 19,933,796,098.49 21,056,905,262.29
Net Cash Flows from Operating Activities (XV)8(1) 9,523,417,930.82 15,794,801,872.63
II. Cash Flows from Investing Activities:
Cash receipts from recovery of investments 433,936,760.50 33,398,189.82
Cash receipts from investment income 199,427,999.55 131,960,801.97
Net cash receipts from disposals of fixed assets, intangible assets and
70,976,304.99 84,321,638.76
other long-term assets
Other cash receipts relating to investing activities 73,174,669,493.77 82,668,322,959.43
Sub-total of cash inflows from investing activities 73,879,010,558.81 82,918,003,589.98
Cash payments to acquire or construct fixed assets, intangible assets
830,581,107.94 650,844,109.04
and other long-term assets
Cash payments to acquire investments 53,320,000.00 942,402,941.96
Other cash payments relating to investing activities 74,151,979,147.50 83,113,418,266.33
Sub-total of cash outflows from investing activities 75,035,880,255.44 84,706,665,317.33
Net Cash Flows from Investing Activities (1,156,869,696.63) (1,788,661,727.35)
III. Cash Flows from Financing Activities
Cash receipts from capital contributions 2,893,831,394.55 -
Cash receipts from borrowings 991,175,000.00 1,644,388,055.69
Other cash receipts relating to financing activities 10,877,860,127.00 15,606,213,712.04
Sub-total of cash inflows from financing activities 14,762,866,521.55 17,250,601,767.73
Cash repayments of borrowings 389,788,200.00 4,572,909,918.72
Cash payments for distribution of dividends or profits or settlement of
8,466,387,329.97 7,516,599,420.29
interest expenses
Other cash payments relating to financing activities 13,134,864,230.77 15,775,258,476.27
Sub-total of cash outflows from financing activities 21,991,039,760.74 27,864,767,815.28
Net Cash Flows from Financing Activities (7,228,173,239.19) (10,614,166,047.55)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
(6,756,445.09) (17,084,979.94)
Equivalents
V. Net Increase in Cash and Cash Equivalents (XV)8(1) 1,131,618,549.91 3,374,889,117.79
Add: Opening balance of cash and cash equivalents (XV)8(1) 26,639,582,696.49 23,264,693,578.70
VI. Closing Balance of Cash and Cash Equivalents (XV)8(2) 27,771,201,246.40 26,639,582,696.49
222
Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
2022
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
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 1,933,755,610.62 65,394,642,275.88
current period
II. Increase or decrease in the
95,114,510.00 4,737,082,835.25 4,292,844,927.20 34,596,966.48 42,954,964.00 4,311,363,534.97 2,647,243,808.20 7,575,511,691.70
current period
(I) Total comprehensive
- - - 34,596,966.48 - 12,837,342,061.07 773,721,783.28 13,645,660,810.83
income
(II) Owners’ contributions
95,114,510.00 4,737,082,835.25 4,412,565,229.40 - - - 1,876,759,941.16 2,296,392,057.01
and reduction in capital
1. Capital contribution
97,402,605.00 2,796,428,789.55 2,893,831,394.55 - - - 58,500,000.00 58,500,000.00
from shareholders
2. Share-based payment
recognized in owners’ - 601,605,075.24 - - - - 49,386,376.03 650,991,451.27
equity
3. Business combination
of enterprises not under - - - - - - - -
the same control
4. Others (2,288,095.00) 1,339,048,970.46 1,518,733,834.85 - - - 1,768,873,565.13 1,586,900,605.74
(III) Profit distribution - - (119,720,302.20) - 42,954,964.00 (8,525,978,526.10) (3,237,916.24) (8,366,541,176.14)
1. Transfer to surplus
- - - - 42,954,964.00 (42,954,964.00) - -
reserves
2. Distributions to
- - (119,720,302.20) - - (8,483,023,562.10) (3,237,916.24) (8,366,541,176.14)
shareholders
III. Closing balance of the
9,430,920,624.00 10,141,153,435.32 5,316,033,650.24 (42,587,158.81) 4,715,460,312.00 49,460,240,986.49 4,580,999,418.82 72,970,153,967.58
current period
223
Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
Consolidated Statement of Changes in Owners' Equity-continued
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
(7,611,076.00) 225,293,137.98 (98,730,014.43) 7,809,801.65 - 9,342,353,625.15 1,248,323,372.13 10,914,898,875.34
current period
(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
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 1,933,755,610.62 65,394,642,275.88
period
224
Hikvision 2022 Annual Report
For the reporting period from January 1, 2022 to December 31, 2022
Statement of Changes in Owners' Equity of the Parent Company
Unit: RMB
2022
Item
Share capital Capital reserves Less: Treasury share Surplus reserve Retained profits Total owners' equity
I. Closing balance of the prior year 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
II. Increase or decrease in the current period 95,114,510.00 3,326,861,226.46 4,292,844,927.20 42,954,964.00 1,071,876,582.07 243,962,355.33
(I) Total comprehensive income - - - - 9,597,855,108.17 9,597,855,108.17
(II) Owners’ contributions and reduction in capital 95,114,510.00 3,326,861,226.46 4,412,565,229.40 - - (990,589,492.94)
1. Capital contribution from owners 97,402,605.00 2,796,428,789.55 2,893,831,394.55 - - -
2. Share-based payment recognized in owners’ equity - 507,562,719.42 - - - 507,562,719.42
3. Others (2,288,095.00) 22,869,717.49 1,518,733,834.85 - - (1,498,152,212.36)
(III) Profit distribution - - (119,720,302.20) 42,954,964.00 (8,525,978,526.10) (8,363,303,259.90)
1. Transfer to surplus reserves - - - 42,954,964.00 (42,954,964.00) -
2. Distributions to shareholders - - (119,720,302.20) - (8,483,023,562.10) (8,363,303,259.90)
III. Closing balance of the current period 9,430,920,624.00 8,264,384,780.30 5,316,033,650.24 4,715,460,312.00 39,030,437,901.96 56,125,169,968.02
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
225
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 30, 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 25, 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 28, 2010, the Company was listed on the
Shenzhen Stock Exchange.
In accordance with the authorization by the Company’s second Extraordinary General Meeting in 2016 ,the
authorization by the second Extraordinary General Meeting in 2018, the resolution by the 20th meeting of the 4th session
of the Board of Directors on December 25, 2020, the resolution of the first Extraordinary General Meeting in 2021 on
March 5, 2021 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 by cash. The Company completed the deregistration on July
2, 2021 and the share capital was accordingly changed to 9,335,806,114 shares.
On January 18, 2022, in accordance with the authorization by the Company's first Extraordinary General Meeting in
2022, the resolution by the 8th meeting of the 5th session of the Board of Directors and the revised Articles of Association,
the Company was approved to issue 99,417,229 additional RMB ordinary shares (97,402,605 shares after adjustment) to
9,933 (9,738 after adjustment) scheme participants. The Company completed the share registration procedures on February
10, 2022. The share capital of the Company was accordingly changed to 9,433,208,719 shares.
In accordance with the authorization by the Company’s second Extraordinary General Meeting in 2018, the resolution
by the 10th meeting of the 5th session of the Board of Directors on May 5, 2022, the resolution of the second Extraordinary
General Meeting in 2022 on October 10, 2021 and the revised Articles of Association, the Company repurchased and
cancelled the granted 2,288,095 restricted RMB treasury shares that have not been unlocked by cash. The Company
completed the deregistration on December 21, 2022 and the share capital was accordingly changed to 9,430,920,624 shares.
For details of the share capital, please refer to Note (V) 39.
As of December 31, 2022, the Company’s total registered capital is RMB 9,430,920,624.00, with total capital shares
of 9,430,920,624 shares (face value RMB 1 per share), of which restricted A-shares were 255,248,506 shares, A-shares
without restriction are 9,175,672,118 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 equipment and its ancillary equipment, multimedia equipment, transmission and
display equipment), fire protection and control products, big data and IoT software and hardware products, aerial vehicles,
robots, intelligent equipment and intelligent systems, real-time communication systems, auto parts and accessories,
electrical signal equipment 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.
226
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 17th meeting of the 5th session of
the Board of Directors of the Company on April 13, 2023.
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).
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 2022, 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.
227
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
The fair value is a price received by the market participants from selling asset or transferring liability during orderly
transaction at the measurement date. No matter the fair value is observable or estimated by using valuation technique, the
measured and disclosed fair value in the financial statement shall be determined on this basis.
When measuring non-financial assets at fair value, the assets shall be measured considering the ability of market
participants to use the assets for optimal use to generate economic benefits, or to sell the assets to other market participants
to use the assets for optimal use to generate economic benefits.
For the financial assets measured with transaction price at the initial recognition, and the use of valuation techniques
involving unobservable inputs in the subsequent fair value measurement, the valuation technique is corrected in the
valuation process in order to make the initial recognition results confirmed by valuation techniques equal to the transaction
price.
Based on the observable extent of the input value of the fair value, and the importance of such input value to the fair value
measurement, the fair value measurement is divided into three levels:
Level 1: The input value is the unadjusted offer of the same assets or liabilities on active market acquired on measurement
date;
Level 2: The input value is the input value of relevant assets or liabilities observable directly or indirectly in addition to
level 1 input value;
Level 3: The input value is the non-observable input value of relevant assets or liabilities.
III. Significant Accounting Policies and Accounting Estimates
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 2022; and the Company's consolidated results of
operations, and the Company’s and consolidated cash flows for 2022.
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.
228
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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.
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
229
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. Where the
cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer
firstly reassesses the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remaining difference
immediately into profit or loss for the current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presented
separately in the consolidated financial statements.
6. Preparation Method of Consolidated Financial Statements
6.1 Preparation method of consolidated financial statements
The scope of consolidated financial statements shall be confirmed based on the control. Control right means that an
investor may control an investee; the investor may participate in relevant activities of the investee to obtain variable
rewards and also be able to use the control rights for the investee to influence its amount of returns. The Group will re-
evaluate, if the change of the relevant facts and circumstances leading to the change of the relevant elements involved in
the above definition of control.
The merger of subsidiary starts from the Group obtaining the control power of the subsidiary, and terminates when the
Group loses the control power of the subsidiary.
As for subsidiaries disposed by the Group, operating results and cash flows prior to the disposal date (the date of losing
control right) have been properly included in the consolidated profit statement and consolidated cash flow statement.
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For the reporting period from January 1, 2022 to December 31, 2022
For a subsidiary acquired through a business combination not involving enterprises under common control, the operating
results and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated income
statement and consolidated statement of cash flows.
No matter when the business combination occurs in the reporting period, subsidiaries acquired through a business
combination involving enterprises under common control are included in the Group's scope of consolidation as if they had
been included in the scope of consolidation from the date when they first came under the common control of the ultimate
controlling party. Their operating results and cash flows from the beginning of the earliest reporting period are included
in the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the
uniform accounting policies and accounting periods set out by the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as minority interests and presented as
"minority equity" in the consolidated balance sheet. The portion of net profits or losses of subsidiaries for the period
attributable to minority interests is presented as "minority interests" in the consolidated income statement below the "net
profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority
shareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amount are still allocated
against minority interests.
Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the loss of control over the
subsidiary is accounted for as equity transactions. The carrying amounts of the total owners' equity attributable to owner
of the Company and minority equity are adjusted to reflect the changes in their relative interests in the subsidiary. The
difference between the amount by which the minority interests are adjusted and the fair value of the consideration paid or
received is adjusted to capital reserve under owners' equity. If the capital reserve is not sufficient to absorb the difference,
the excess is adjusted against retained earnings.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
the period, except for exchange differences related to a specific-purpose borrowing denominated in foreign currency that
qualify for capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period.
When the consolidated financial statements include foreign operation(s), if there is foreign currency monetary item
constituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates are
recognized as "exchange differences arising on conversion of financial statements denominated in foreign currencies " in
other comprehensive income, and in profit and loss for the period upon disposal of the foreign operation.
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
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
conversion of financial statements of this foreign operation attributable to the owners' equity of the Company and presented
under shareholders' equity, to profit or loss in the period in which the disposal occurs.
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation, but only a
decrease in proportion of overseas business interests, the proportionate share of accumulated exchange differences arising
on conversion of financial statements are re-attributed to minority interests and are not recognized in profit and loss under
current period. For partial disposals of equity interests in foreign operations, which are associates or joint ventures, the
proportionate shares of the accumulated exchange differences arising on conversion of financial statements of foreign
operations is reclassified to profit or loss under current period.
10. Financial Instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to a contract of financial instrument.
For the purchase or sale of a financial asset in conventional manner, the asset to be received and the liability to be assumed
will be recognized on the trading day, or the asset sold will be derecognized on the trading day.
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.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
The amortized cost of a financial asset or a financial liability refers to the initial recognition amount of such financial asset
or financial liability, less the repaid amount of principal, plus or minus the accrued amortized amount calculated by
amortization of the difference between the initial recognition amount and the amount on maturity by using the effective
interest rate method, and then deducts the accrued provision for losses (only applicable to financial assets).
10.1 Classification, Confirmation and Measurement of Financial Assets
After initial recognition, the Group will adopt amortized cost, fair value through other comprehensive income, or fair value
through profit and loss for subsequent measurement depending on different categories of financial assets.
The Group will classify a financial asset into a financial asset measured at amortized cost if the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding and the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows. Financial assets classified by the Group as financial asset measured by amortized
cost include cash and cash equivalents, notes receivables and accounts receivable, other receivables 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.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
At the time of initial recognition, the relevant financial asset is a part of an identifiable portfolio of financial
instruments under collective management, and there is objective evidence showing a recent and actual existence of short-
term profitable mode.
The relevant financial assets are derivatives, excluding derivatives which satisfy the definition under financial
guarantee contracts and derivatives which are designated as effective hedging instruments.
Financial assets at fair value through profit and loss include financial assets which are classified as financial assets at fair
value through profit and loss and financial assets designated at fair value through profit and loss:
Financial assets which do not satisfy the conditions of being classified as financial assets measured at amortized cost
or as financial assets at fair value through other comprehensive income, they will be classified as financial assets at fair
value through profit and loss.
At the time of initial recognition, in order to eliminate or substantially reduce mismatch in accounting, the Group
may irrevocably designate a financial asset as a financial asset measured at fair value with changes through profit and loss.
Financial assets at fair value through profit and loss will be presented as held-for-trading financial assets. If such financial
assets have a maturity of more than one year from the balance sheet date (or without a fixed maturity) and which are
expected to be held for more than one year, they will be presented under other non-current financial assets.
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost adopt the effective interest rate method for subsequent measurement according
to amortized cost, the profit or loss when impairment occurs or upon derecognition will be accounted in profit and loss of
the current period.
The Group recognizes interest income by using effective interest rate method for financial assets measured at amortized
cost. The Group determines interest income by multiplying the balance of book value of financial assets with the effective
interest rate except under the following circumstances:
For acquired or generated financial assets which incurred credit impairment already, their interest income will be
determined by using the amortized cost of such financial asset calculated with the credit adjusted effective interest rate.
For acquired or generated financial assets which have not incurred credit impairment but incur credit impairment in
the subsequent period, the Group will determine their interest income by using the amortized cost of such financial assets
multiplied with the effective interest rate in the subsequent period. If such financial asset ceases to have credit impairment
due to improvement in credit risk in the subsequent period, then the Group should change to multiply the effective interest
rate with the balance of book value of such financial asset instead to determine the interest income.
10.1.2 Financial asset at fair value through other comprehensive income
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
The impairment loss or profit, or interest income calculated by using the effective interest rate method, relating to financial
asset at fair value through other comprehensive income should be accounted in the profit and loss of the current period,
and other changes in fair value of such financial assets will be accounted in other comprehensive income. The amount
charged by such financial asset to the profit and loss of each period is deemed to be equal to the amount which has been
measured by amortized cost and charged to the profit and loss of each period. Upon derecognition of such financial asset,
the accumulated profit or loss previously charged to other comprehensive income will be reversed from other
comprehensive income and charged to profit and loss of the current period.
For non-trading equity instrument investment designated at fair value through other comprehensive income, its changes
in fair value will be recognized in other comprehensive income. Upon derecognition of such financial asset, the
accumulated profit or loss charged to other comprehensive income will be reversed from other comprehensive income and
charged to retained earnings. During the period when such investment in equity instruments for non-trading purpose are
held by the Group, the right to receive dividends by the Group has been established, and economic benefits related to
dividends are likely to flow into the Group, and if the amount of dividends may be measured reliably, the dividend income
is recognized and accounted in the profit and loss of the current period.
10.1.3 Financial asset at fair value through profit and loss
For financial asset at fair value through profit and loss, subsequent measurement will be calculated at fair value, the profit
or loss arising from changes in fair value and the dividend and interest income relating to such financial asset will be
accounted in the profit and loss of the current period.
10.2 Impairment of Financial Assets
For financial assets measured at amortized cost, financial assets that are classified as financial asset at fair value through
other comprehensive income, contract assets, lease receivables, and financial guarantee contracts that do not meet the
conditions for termination of recognition due to the transfer of financial assets or continue to be involved in financial
liabilities formed by the transferred financial assets, the Group will handle impairment on the basis of expected credit loss
and recognize loss provision.
The Group’s consideration of contract assets, notes receivable and accounts receivable that are generated by transactions
regulated by revenue standards and do not contain significant financing components or that do not consider financing
components in contracts that are not more than one year old, as well as those operating lease receivables formed from
transactions that are defined by the Accounting Standards for Business Enterprises No. 21-Leasing, the loss reserve shall
be measured based on the amount of the expected credit loss during the entire duration.
For other financial instruments, other than acquired or generated financial assets which have incurred credit impairment
already, the Group will assess on each balance sheet date the changes in credit risk of the relevant financial instruments
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Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
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
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
repayment by the borrower according to the contractual term.
(9) Whether significant changes have occurred in the expected performance and repayment behavior of the debtor.
Whether or not the credit risks increase significantly after the foregoing assessments, if any contractual payment for any
financial instrument that overdue for over (including) 30 days, it indicates the credit risks of that financial instrument have
increased significantly.
On the balance sheet date, if the Group determines that the financial instrument only carries low credit risks, then it assumes
that the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk of
default on financial instruments is low, the borrower is highly able to perform its contractual cash flow obligations in the
short term, and even if the economic situation and operating environment are adversely changed over a long period of time
but not necessarily reducing the borrower’s performance of its contractual cash obligations, the financial instrument is
considered as having a lower credit risk.
10.2.2 Financial assets which have incurred credit impairment already
When one or more events which will have adverse effect on the expected future cash flows from the financial asset of the
Group have occurred, such financial asset will become a financial asset which have incurred credit impairment already.
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 and other receivables, that are individually significant and the debtor has serious financial
difficulties, are determined on the basis of individual for its credit loss. The remaining accounts receivable and contract
assets are divided into different portfolios according to the area and target of the business as a common risk characteristic
and an impairment matrix is used to determine the credit losses of relevant financial instruments on a portfolio basis. For
the remaining other receivables and long-term receivables, the credit loss of the relevant financial instrument is determined
on a portfolio basis. Notes receivable and receivables are evaluated on a portfolio basis to determine credit losses by
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Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
assessing the probability of breach and loss given default based on the credit rating of the acceptor as a common risk
characteristic.
The Group confirms the expected credit loss of the relevant financial instrument according to the following method:
In respect of financial asset and 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 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 derecognition 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
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Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
involvement in such transferred financial asset. The relevant liabilities will be measured by the Group according to the
following method:
If the transferred financial asset is measured by amortized cost, the book value of the relevant liabilities is equivalent
to the book value of the transferred asset of continuous involvement less the amortized cost of the rights retained by the
Group (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the amortized cost of
the obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the
financial asset), and the relevant liabilities are not designated as financial liabilities at fair value through profit and loss of
the current period.
If the transferred financial asset is measured by fair value, the book value of the relevant liabilities is equivalent to
the book value of the transferred asset of continuous involvement less the fair value of the rights retained by the Group (if
the Group has retained the relevant rights due to transfer of the financial asset) and plus the fair value of the obligations
undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the financial asset), and
the fair value of the rights and obligations shall be measured at the fair value on a separate basis.
For full transfer, which satisfies the conditions of derecognition, of the financial assets, the difference between the sum of
the book value of the transferred financial assets as at the date of derecognition and the consideration received from such
transfer and the accumulated amount of change in fair value originally included in other comprehensive income, which
corresponds to the amount in respect of derecognition, shall be recognized in the profit and loss for the current period. If
the transfer of the financial assets by the Group is designated as investment in equity instrument held for non-trading
purpose measured at fair value through other comprehensive income, the accumulated gains or losses previously included
in other comprehensive income shall be transferred out from other comprehensive income and be included in retained
earnings.
For transfer in part, which satisfies the conditions of derecognition, of the financial assets, the book value of the entire
financial assets before the transfer shall be shared between the derecognized portion and the continuous recognition portion
at their respective relative fair value on the date of transfer, and the difference between the sum of the consideration
received from derecognition and the accumulated amount of change in fair value originally included in other
comprehensive income, which corresponds to the amount in respect of derecognition, and the book value of the
derecognized portion as at the date of derecognition shall be included in the profit and loss of the current period. If the
transfer of the financial assets by the Group is designated as investment in equity instrument for non-trading purpose
measured at fair value through other comprehensive income, the accumulated gains or losses previously included in other
comprehensive income shall be transferred out from other comprehensive income and be included in retained earnings.
For full transfer, which does not satisfy the conditions of derecognition, of the financial assets, the Group will continue to
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
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Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Pursuant to the contractual terms of the issued financial instruments and the substantive economic condition as reflected,
but not in legal terms only, combined with the definitions of financial liabilities and equity instruments, the Group has
classified such financial instruments or the components thereof as financial liabilities or equity instruments upon initial
recognition.
10.4.1 Classification, confirmation and measurement of financial liabilities
Financial liabilities are classified into financial liabilities at fair value through profit and loss of the current period and
other financial liabilities upon initial recognition.
10.4.1.1 Financial liabilities at fair value through profit and loss of the current period
Financial liabilities at fair value through profit and loss of the current period comprise of financial liabilities held for
trading purpose (including derivatives of financial liabilities) and financial liabilities designated as measured at fair value
through profit and loss of the current period. Except for derivatives of financial liabilities, which are presented separately,
financial liabilities at fair value through profit and loss of the current period are presented as financial liabilities held for
trading.
Financial liabilities that fulfill one of the following conditions suggest that the Group assumes such financial liabilities for
trading purpose:
Assumption of the relevant financial liabilities is mainly for the purpose of the recent repurchases.
The relevant financial liabilities, upon initial recognition, are part of a portfolio of identifiable financial instruments
under centralized management, and available objective evidence shows the recent and actual existence of a short-
term profit-making model.
The relevant financial liabilities are derivatives, except derivatives which satisfy the definition of financial guarantee
contract and derivatives designated as effective hedging instruments.
Financial liabilities can be designated, upon initial recognition, by the Group as financial liabilities at fair value through
profit and loss of the current period, provided that they have satisfied one of the following conditions: (1) such designation
can eliminate or substantially reduce accounting mismatches; (2) managing and evaluating the performance of portfolios
of financial liabilities, or portfolios of financial assets and financial liabilities, on fair value basis and reporting internally
to key personnel of the Group on this basis in accordance with the risk management or investment strategies specified in
formal written documents of the Group; (3) hybrid contracts, with embedded derivatives, have satisfied the conditions.
Financial liabilities held for trading purpose use fair value for subsequent measurement, gains or losses arise from changes
in fair value and the dividends or interest expenses relating to such financial liabilities are accounted in the profit and loss
of the current period.
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Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
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
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For the reporting period from January 1, 2022 to December 31, 2022
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.
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.
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For the reporting period from January 1, 2022 to December 31, 2022
(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
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, raw materials and contract performance
costs that 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.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
12.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
12.3 Basis for determining net realizable value of inventories
The inventory is measured according to cost and net realizable value, whichever is lower, on the date of balance sheet.
When the net realizable value is lower than cost, withdraw inventory impairment reserves.
The net realizable value refers to the amount derived by deducting the potential cost, estimated selling expense and relative
taxes to the completion date from the estimated sales price of inventory in daily activities. When determining net realizable
value of inventories, take the obtained conclusive evidence as basis and consider the purposes of holding inventories and
influence of events after the balance sheet date.
For the low-price stocks in large quantity, provision for the inventory price drops will be made based on the categories of
stocks; for the stocks that are related to the products manufactured and sold in the same region, that have identical or
similar ultimate use or purpose and that are hard to separate from other items when being measured, they are consolidated
for provision for the inventory price drops; for other stocks, the provision for the inventory price drops will be made based
on the cost of a single stock item in excess of the net realizable value.
After provision for inventory depreciation reserves is made, if the factors resulting in the write-down of inventory
impairment have disappeared and causing the net realizable value higher than its book value, such inventory impairment
provision are recovered and reversed, and the reversed amount recorded in profits and losses of the current period.
12.4 Inventory count system
The perpetual inventory system is maintained for stock system.
12.5 Amortization method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortized using the immediate write-off method.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Long-term equity investment obtained by other means other than long-term equity investment formed by business
combination shall be initially measured at cost.
15.3 Subsequent measurement and recognition of profit or loss
15.3.1 Long-term equity investment accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in the Company's financial
statements. A subsidiary is an investee that is controlled by the Group.
The long-term equity investment accounted by the cost method shall be measured at its initial investment cost. If there are
additional investments or disinvestments, the long-term equity investment cost shall be adjusted. Income from the
investment in the current period shall be recognized in accordance with the cash dividends or profits declared and issued
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
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
invested unit to be distributed; For other changes in the owners' equity of the invested unit other than net profits and losses,
other comprehensive incomes and the profit distribution, the book value of long-term equity investment shall be adjusted
and be included into the capital reserves. The Group shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested
entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the
invested unit are different from those adopted by the Group, the adjustment shall be made for the financial statements of
the invested unit in accordance with the accounting policies and accounting periods of the Group to recognize the
investment income and other comprehensive incomes. For the transaction incurred between the group and associated
enterprises and joint ventures, invested or sold assets don't constitute a business, the part that doesn't achieve internal
transaction profit or loss or belongs to the Group calculated according to the enjoyed ratio will be offset, and the profit or
loss on investment will be confirmed on this basis. But for the unrealized loss arising from the internal transaction between
the Group and the invested unit, if such transaction loss is defined as the impairment loss of the transferred asset, they
cannot be offset.
When the Group determines the net loss of the invested unit that shall be shared, it is necessary to write-down the book
value of the long-term equity investment and other long-term equities substantially constituting the net investment of the
invested unit to zero as a limit. Besides, if the Group is obliged to bear extra loss for the invested unit, it shall be necessary
to determine provisions and record them to current investment loss in compliance with obligations expected to be assumed.
If the invested unit realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsets
its attributable share of the un-confirmed losses, resume recognizing its attributable share of profits.
15.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received and the carrying
amount is recognized in profit or loss for the period.
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.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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:
Item 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
Transportation vehicles 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.
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For the reporting period from January 1, 2022 to December 31, 2022
Construction in progress is not depreciated. Construction in progress is transferred to a fixed asset when it is ready for
intended use.
18. Borrowing Costs
Borrowing costs directly attributable to the acquisition & construction or production of assets eligible for capitalization
shall be capitalized when assets expenditure, borrowing costs and necessary construction or production for bringing assets
to expected conditions for use or marketing have taken place; when construction or production of assets ready for
capitalization reach to expected conditions for use or marketing, capitalization shall be ceased. Other borrowing expenses
are recognized as expenses in the current period.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before
being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed
under general-purpose borrowings, the Group determines the amount of interest to be capitalized on such borrowings by
applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the
amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to
the general-purpose borrowings. During the capitalization period, exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in connection with general-purpose
borrowings are recognized in profit or loss in the period in which they are incurred.
19. Intangible Assets
19.1 Intangible Assets Valuation Method, 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 -
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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.
Expenditure during the development phase that meets all of the following conditions at the same time is recognized as
intangible asset. Expenditure during development phase that does not meet the following conditions is recognized in profit
or loss for the period.
(1) It is technically feasible to complete the intangible asset so that it will be available for use or sale;
(2) The Group has the intention to complete the intangible asset and use or sell it;
(3) The Group can demonstrate the ways in which the intangible asset will generate economic benefits, including the
evidence of the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset;
(4) The availability of adequate technical, financial and other resources to complete the development and the ability to use
or sell the intangible asset; and
(5) The expenditure attributable to the intangible asset during its development phase can be reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase, the Group recognizes all
of them in profit or loss for the period. The costs of the intangible assets generated by internal development activities only
include the total expenditure incurred from the time point when the capitalization conditions are available to the point
when the intangible assets are used for their intended purposes; for the expenditure that already becomes an expenditure
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
in the profit and loss statement before the capitalization conditions are available during development of the same intangible
asset, no adjustment will be made.
20. Long-term Assets Impairment
The Group assesses at each balance sheet date whether there is any indication that the long-term equity investment, fixed
assets, construction in process, and intangible assets with a finite useful life may be impaired. If there is any indication
that such assets may be impaired, recoverable amounts are estimated for such assets. Intangible assets with indefinite
useful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there
is any indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of an
individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable
amount is determined by the higher of 1) net amount of fair value of the asset or asset group deducted by the disposal
expenses; or 2) the present value of the expected future cash flows of the asset or asset group.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted as an
impairment provision and is recognized in profit or loss for the period.
Goodwill impairment test shall be conducted at the end of each year at least. Goodwill impairment test shall be conducted
in accordance with the concerned asset group or asset portfolio. That is to allocate the book value of goodwill to the asset
group or asset portfolio that is expected to benefit from the synergies of the combination in a reasonable way from the date
of purchasing. When recoverable amount of apportion-included asset group or asset portfolio of goodwill is less than book
value of goodwill, impairment loss shall be recognized. Firstly, amount of impairment loss shall be apportioned to the
book value of goodwill of the said asset group or asset portfolio, and then book value of other assets, except for goodwill,
in asset group or asset portfolio shall be abated in proportion.
Once the impairment loss of such assets is recognized, it cannot be reversed in any subsequent period.
21. Long-term Deferred Expenses
Long-term deferred expenses are the expenses that are already incurred but will be shared in the current reporting period
and later periods with amortization term of more than one year, mainly for the expenses on betterment of leased fixed
assets 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.
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
22. Contract Liabilities
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration received
or receivable from customers. Contract assets and contract liabilities under the same contract are presented in net terms.
23. Employee Compensation
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
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
employee lay-off suggestion; or 2）when the Group determines costs or expenses in relation with the restructuring of the
paid termination benefits.
24. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency such as products quality
assurance, etc. And it is probable that an outflow of economic benefits will be required to settle the obligation, and the
amount of the obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at
the balance sheet date, taking into account factors pertaining to a contingency such as the risks, uncertainties and time
value of money. Where the effect of the time value of money is material, the amount of the provision is determined by
discounting the related future cash outflows.
25. Share-based Payment
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.
25.1 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
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Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
In case the Group modifies a share-based payment arrangement, if the modification increases the fair value of the equity
instruments granted, the Group will include the incremental fair value of the equity instruments granted in the measurement
of the amount recognized for services received. If the modification increases the number of the equity instruments granted,
the Group will include the fair value of additional equity instruments granted in the measurement of the amount recognized
for services received. The increase in the fair value of the equity instruments granted is the difference between fair value
of the equity instruments before and after the modification on the date of the modification. If the Group modifies the terms
or conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-based
payment arrangement, or is not otherwise beneficial to the employee, the Group will continue to account for the services
received as if that modification had not occurred, other than a cancellation of some or all the equity instruments granted.
If cancellation of the equity instruments granted occurs during the vesting period, the Group will account for the
cancellation of the equity instruments granted as an acceleration of vesting, and recognize immediately the amount that
otherwise would have been recognized over the remainder of the vesting period in profit or loss for the period, with a
corresponding recognition in capital reserve. When the employee or counterparty can choose whether to meet the non-
vesting condition but the condition is not met during the vesting period, the Group treats it as a cancellation of the equity
instruments granted.
26. Revenue
26.1 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
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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.
The Group evaluates the contract on the commencement date of the contract, identifies the individual performance
obligations contained in the contract and determines whether each individual performance obligation is to be performed
over a certain period of time or at a certain point in time. Revenue is recognized over time by reference to the progress
towards complete satisfaction of the relevant performance obligation if one of the following criteria is met: (1) the customer
simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; (2) the
Group’s performance creates or enhances an asset that the customer controls as the Group performs; or (3) the Group’s
performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to
payment for performance completed to date. Otherwise, revenue is recognized at a point in time when the customer obtains
control of the distinct good or service.
The Group adopts the output method to determine the progress of performance, that is, the progress of contract
performance is determined according to the value of the goods or services that have been transferred to the customer in
the view of the customer. When the performance progress cannot be reasonably determined, and the costs incurred can be
expected to be compensated, the Group recognizes revenue based on the amount of costs incurred until the performance
progress can be reasonably determined.
If the contract contains two or more performance obligations, the Group allocates the transaction price to each single
performance obligation on the contract start date in accordance with the relative proportion of the individual selling price
of the goods or services promised by each single performance obligation. However, if there is strong evidence that the
contract discount or variable consideration is only related to one or more (but not all) performance obligations in the
contract, the Group allocates the contract discount or variable consideration to the relevant one or more performances
obligation. Individual selling price refers to the price at which the Group sells goods or services to customers separately.
Where the individual selling price cannot be directly observed, the Group comprehensively considers all relevant
information that can be reasonably obtained, and uses the observable input value to the maximum to estimate the individual
selling price.
If there is variable consideration in the contract, the Group determines the best estimate of variable consideration based
on the expected value or the most likely amount. The transaction price including variable consideration shall not exceed
the amount that is likely to cause no significant reversal of accumulated recognized revenue when the relevant uncertainty
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
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accordance with expected refund amounts due to sales returns. The remaining amount, subsequent to deduction of expected
costs from collecting the goods (including the decrease in value of the returned goods), is recognized as an asset in
accordance with the carrying amount during the expected transfer of returned goods after deducting the costs of the above
net assets carried forward.
For sales with quality assurance clauses, if the quality assurance provides a separate service beyond the assurance to the
customer that the goods or services sold meet established standards, the quality assurance constitutes a single performance
obligation. Otherwise, the Group conducts accounting for quality assurance responsibilities in accordance with the
Accounting Standards for Business Enterprises No. 13-Contingencies.
The additional purchase option of customers includes customer reward incentives. With respect to the additional purchase
option with material rights provided to customers, the Group regards it as a single performance obligation, and recognizes
relevant revenue upon obtaining the control over relevant goods or services by the customers who exercise the purchase
option in future or upon lapse of such option. If a stand-alone selling price of the additional purchase option of customers
is not directly observable, the Group shall consider all relevant information including the difference in discount obtained
with and without the exercise of such option by customers and the possibility of exercising such option by customers
during estimation.
If there is a significant financing component in the contract, the Group determines the transaction price based on the
amount payable in cash when the customer assumes control of the goods or services. The difference between the
transaction price and the contract consideration is amortized using the effective interest rate method during the contract
period. On the contract commencement date, the Group does not consider the significant financing components in the
contract if the interval between the customer obtaining control of the goods or services and the price being paid by the
customer is not more than one year.
The Group judges whether the Group’s identity is the principal or agent when engaging in transactions based on whether
it has control over the goods or services before transferring the goods or services to customers. If the Group is able to
control the goods or services before transferring them to customers, the Group is the principal responsible person, and
revenue is recognized based on the total amount of consideration received or receivable; otherwise, the Group is an agent
and recognizes revenue based on the amount of commissions or fees which the Group is expected to be entitled to charge.
The amount of commissions or fees is determined based on the total amount of consideration received or receivable net of
the amount payable to other parties.
When the Group collects amounts of sold goods or services in advance from the customer, the Group will firstly recognize
the amounts as a liability and then transfer to revenue until satisfying relevant performance obligations. When the advances
from customers is non-refundable and the customer may give up all or part of contract right, and the Group is expected to
be entitled to obtain amounts associated with contract rights given up by the customer, the above amounts shall be
proportionally recognized as revenue in accordance with the model of exercising contract rights by the customer; otherwise,
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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.
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.
27.3 Impairment losses on assets related to contract costs
In determining impairment losses on assets related to contract costs, impairment losses are first determined for other assets
recognized in accordance with other relevant ASBEs and related to the contract. Then, for assets related to contract costs
whose carrying value is higher than the difference between the following two items, the Group makes provision for
impairment for the excess to be recognized as asset impairment losses: (1) the remaining amount of consideration expected
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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 such relevant goods or services.
After provision for impairment is made for the asset related to contract costs, if the difference between the above two items
is higher than the carrying value 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 value of the
asset after the reversal shall not exceed the carrying value of the asset on the reversal date assuming no provision for
impairment is made.
28. Types of Governmental Subsidies and Accounting Treatment Methods
Government subsidies refer to the monetary and non-monetary assets obtained by the Group from the government for free.
Government subsidies are recognized when they can meet the conditions attached to the government subsidies and can be
received.
If a government subsidy is a monetary asset, it shall be measured at the amount received or receivable.
28.1 Judgment basis and Accountant treatment of government subsidy related to assets
The government subsidies for Chongqing Manufacture Base construction and etc. are used for constructions and forms
long-term assets, and therefore are categorized as government subsidy related to assets.
A government grant related to an asset is recognized as deferred income, and it should be evenly amortized to profit or
loss over the useful life of the related asset.
28.2 Judgment basis and accountant treatment of government subsidy related to income
The Group receives government subsidies including subsidies for special projects and Value-Added-Tax refund, 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, 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
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related costs or losses are recognized; If the subsidy, such as VAT refund, 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.
29. Deferred Tax Assets / Deferred Tax Liabilities
The income tax expenses include current income tax and deferred income tax.
29.1. Current Income Tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the
amount expected to be paid (or recovered) according to the requirements of tax laws.
29.2 Deferred Tax Assets and Deferred Tax Liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the
nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined
according to tax laws, deferred tax assets and liabilities are recognized through the balance sheet liability method.
Deferred tax is generally recognized for all temporary differences. Deferred tax assets for deductible temporary differences
are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary
differences can be utilized. However, for temporary differences associated with the initial recognition of goodwill and the
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
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temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognized to the extent that it is probable that there will be taxable
profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable
future.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the applicable
tax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance with
the tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except when they arise from
transactions or events that are directly recognized in other comprehensive income or in shareholders' equity, in which case
they are recognized in other comprehensive income or in shareholders' equity; and when they arise from business
combinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probable
that sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilized. Such
reduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
29.3 Offset of Income Tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the assets
and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assets
and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are
expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
30. Lease
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
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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.
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.
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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;
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.
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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.
30.1.6 Sale-leaseback transactions
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
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 lessor.
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
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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:
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:
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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
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
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Except for contract performance costs, inventories are measured at the lower of cost or net realizable value. For raw
materials, the latest or future actual purchase price is used as the basis for determining the net realizable value; For products
in progress, the actual selling price of the latest or future finished product minus the estimated costs and costs that will be
incurred when similar products are completed in the current period, the estimated selling expenses and related taxes to be
incurred, is used as the basis for determining the net realizable value; For finished products, the actual selling price of the
latest or future finished product minus the estimated selling expenses and related taxes will be incurred, is used as the basis
for determining the net realizable value. The Group will regularly conduct a comprehensive stocktaking to review the
impairment circumstances on defective, obsoleted or slow-moving inventory if any; in addition, the Group's management
will regularly review the impairment circumstance of inventory with long storage time according to the inventory aging.
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. For details,
please refer to Note (V) 8.
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 on a portfolio basis to determine its expected credit loss of the relevant accounts receivable. The Group
divides the risk characteristics according to the region and object of its business, and divides the relevant accounts
receivable into different portfolios. Based on the historical loss rate and consider reasonable and well-founded forward-
looking information in the industry, the Group determines the proportion of corresponding loss reserves for different
portfolios of various types of accounts receivable. As of December 31, 2022, based on the historically loss rate and consider
reasonable and well-founded forward-looking information in the industry, the Group determines the corresponding
proportion of loss provision for accounts receivable. 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
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the Group’s fixed asset or indicating a change in predicted net residual value.
Accrued liabilities of product quality warranty
Accrued liabilities of product quality assurance are costs and expenses incurred to meet the established standards of
product quality assurance obligations to customers in accordance with the product contract; the Group made such an
estimation according to the predicted repair and replacement cost of relevant products. The estimation considers the
product claim rate trend, historic defect rate, industry practice and other major estimations. The management deems that
the current estimation on accrued liabilities of product quality warranty is reasonable, however, the Group will continue
to review the conditions of product repairs, and will conduct adjustment if any sign indicating the need to make adjustments
on accounting estimates.
Deferred tax assets and deferred tax liabilities
Deferred income tax assets and deferred income tax liabilities are measured at the applicable income tax rate during the
period when the relevant asset is expected to be recovered or the relevant debt is expected to be paid off. The expected
applicable income tax rate is determined according to the relevant current tax regulations and the actual situation of the
Group. If the estimated income tax rate is different from the original estimate, the management of the Group will adjust it.
The realization of deferred income tax assets mainly depends on the actual future taxable income, taxable temporary
differences, and the effective tax rate of temporary difference in the future applicable years. If the actual taxable income
and taxable temporary differences 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 taxable income and taxable temporary differences in the future is more than the
estimation, or actual tax rate is higher than the estimation, then the deferred tax assets that are partially unrecognized
deductible losses and deductible temporary differences will be recognized 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
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Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 evaluating 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 valuators to conduct valuation. The Finance Department and evaluation panel of the
Group will work closely with the hired valuators to determine appropriate valuation techniques and the input values of the
valuation model. The valuation techniques and input values used for evaluating the fair value of various assets are disclosed
in Note (IX).
32. Significant Alternation in Accounting Policy and Accounting Estimations
Interpretation No. 15 of Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No. 15 of Accounting Standards for Business Enterprises (the
"Interpretation No. 15") on December 30, 2021. It specifies the accounting treatment and determination of loss contracts
for the sales of products or by-products that are produced before the fixed assets reach the expected conditions for use or
during the R&D process.
Accounting treatment for the sales of products or by-products that are produced before the fixed assets reach the expected
conditions for use or during the R&D process
The Interpretation No. 15 states that if an enterprise sells the products or by-products that are produced before the fixed
assets reach the expected conditions for use or during the R&D process, the revenue and costs related to trial sales should
be accounted for separately in accordance with ASBE No. 14 - Revenue and ASBE No. 1 - Inventory and other regulations,
and included in the current profit or loss, and the net amount after offsetting the costs of trial sales shall not be offset
against the costs of fixed assets or R&D expenditure. Moreover, the enterprise shall separately disclose in the notes the
amount of the revenue and costs related to trial sales, the specific items presented and the significant accounting estimates
used to determine the costs related to trial sales and other relevant information. As this regulation is effective as of January
1, 2022, a retroactive adjustment shall be made to trial sales that occurred between the beginning of the earliest period
presented in the financial statements and January 1, 2022.
271
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
The products produced by the Group in the course of research and development during the reporting period have been
accounted for in accordance with the above principles and the adoption of this provision has not had a material impact
on the Group's financial statements.
Determination of loss contracts
The Interpretation No. 15 defines that the "costs of contract performance" an enterprise considers in determining whether
the contract is a loss contract shall include the incremental costs of contract performance and the apportioned amount of
other costs directly related to contract performance. This regulation is effective as of January 1, 2022. Enterprises shall
apply this regulation to contracts with outstanding obligations as of January 1, 2022, and make a cumulative-effect
adjustment to retained earnings and other related financial statement items as of the beginning of the year of the effective
date of such regulation, but not to prior-period comparative financial statement data.
The Group has assessed that the adoption of this regulation does not have a material impact on the Group's financial
statements.
Interpretation No. 16 of Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for Business Enterprises (the
"Interpretation No. 16") on November 30, 2022. It specifies the accounting treatment of the income tax effects on dividends
related to financial instruments classified as equity instruments by an issuer and the accounting treatment of the
modification of cash-settled share-based payments to equity-settled share-based payments by an enterprise.
Accounting treatment of the income tax effects on dividends related to financial instruments classified as equity instruments
by an issuer
The Interpretation No. 16 defines that if dividend expenses related to financial instruments classified as equity instruments
by an enterprise in accordance with ASBE No. 37 - Presentation of Financial Instruments and other regulations are
deducted before corporate income tax in accordance with the relevant provisions of the tax policy, the enterprise shall
recognize the dividend payable, and include the income tax effects on the dividend in the current profit or loss or owner's
equity items by applying the same accounting treatment as that applied to the previous transaction or item generating
distributable profit. This regulation is effective as of November 30, 2022. If the recognition of dividends payable for
financial instruments classified as equity instruments occurs between January 1, 2022 and the effective date of the
regulation and involves income tax effects not treated in accordance with the aforesaid provisions, adjustments shall be
made in accordance with these provisions. If the recognition of dividends payable for financial instruments classified as
equity instruments occurs before January 1, 2022 and involves income tax effects not treated in accordance with the
272
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
aforesaid provisions and the related financial instruments have not been derecognized as of January 1, 2022, retroactive
adjustments should be made.
The Group has assessed that the adoption of this regulation does not have any impact on the Group's financial statements.
Accounting treatment of the modification of cash-settled share-based payments to equity-settled share-based payments by
an enterprise
The Interpretation No. 16 stipulates that if an enterprise modifies a cash-settled share-based payment to an equity-settled
share-based payment by changing terms and conditions of the cash-settled share-based payment agreement, the enterprise
shall, on the date of modification, measure the equity-settled share-based payment at the fair value of the equity instrument
granted on that date, record the acquired services in capital surplus, derecognize the liability recognized for the cash-settled
share-based payment on the date of modification, and include the difference between the two in the current profit or loss.
This regulation is effective as of November 30, 2022. For new transactions made between January 1, 2022 and the effective
date of the regulation, enterprises shall make adjustments in accordance with the regulation. For transactions made before
January 1, 2022 and not handled in accordance with this regulation, enterprises shall make a cumulative-effect adjustment
to retained earnings and other related financial statement items as of January 1, 2022, but not to the information during the
comparable period.
The Group has assessed that the adoption of this regulation does not have any impact on the Group's financial statements.
273
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 29, 2020, the Company was identified as the high-tech enterprise with a
valid term of 3 years and the preferential tax period is from 2020 to 2022.
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 2022 to pay the 2021 annual corporate income tax at
the rate of 10%. As of the approval date of this report, the Company’s preferential income tax in 2022 has not been
verified and approved. Therefore, the Company’s enterprise income tax in 2022 is still calculated and paid at the rate
of 15% (2021: 10%).
(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 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), the subsidiaries of the Company, Chongqing Technology and Chongqing
System will 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
(2021:15%).
(3) 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, a subsidiary of the Company, is identified as a high-tech enterprise, and the validity period of
the identification is 3 years and the preferential tax period is 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 (2021:15%).
(4) In accordance with the List of High-tech Enterprises Recognized by Zhejiang Provincial Identification Institution in
2022 issued by the leading group office of Zhejiang high-tech enterprise identification management work on
December 24, 2022, the Company’s subsidiary, Hangzhou Hikvision System Technology Ltd. (hereinafter referred to
274
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
as "Hangzhou System") and Hangzhou Kuangxin Technology Co., Ltd. (hereinafter referred to as "Hangzhou
Kuangxin") , was recognized as a high-tech enterprise and was valid for 3 years and the preferential tax period is from
2022 to 2024. Therefore, the enterprise income tax is calculated and paid on the basis of a reduced tax rate of 15% in
the current reporting period (2021:15%).
(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 20, 2020, the
Company’s subsidiary, Shanghai Goldway Intelligent Transportation System Co., Ltd. was identified as the high-tech
enterprise with a valid term of 3 years and the preferential tax period is 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 (2021:15%).
(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 29, 2020, the Company’s subsidiaries, Hangzhou Hikrobot Technology Co.,
Ltd. ( formerly known as Hangzhou Hikrobot Technology Ltd. and hereinafter referred to as "HikRobot"), Hangzhou
Hikauto Software Co., Ltd. (hereinafter referred to as "HikAuto Software") and Hangzhou Hikimaging Technology
Co., Ltd. (hereinafter referred to as "HikImaging Technology") were identified as the high-tech enterprises with a
valid term of 3 years and the preferential tax period is 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 (2021:15%).
(7) In accordance with the Announcement on the Filing of High-tech Enterprises Recognized by Zhejiang Provincial
Identification Institution in 2022 issued by the Leading Group Office of National High-tech Enterprise Identification
Management on January 17, 2023, the Company’s subsidiary, Hangzhou Hikmicro Sensing Technology Co., Ltd.
(hereinafter referred to as " Hikmicro Sensing") were identified as the high-tech enterprises with a valid term of 3
years and the preferential tax period is from 2022 to 2024.
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), Hikmicro Sensing was identified as a
keyintegrated circuit design enterprise in May 2022. The qualified enterprise will be exempted from corporate income
tax for the first year to the fifth year from the profitable year, and levied at a reduced rate of 10% in the subsequent
years. The year of 2022 is the second year of Hikmicro Sensing making profits and is exempt from enterprise income
tax (2021: tax-exempted).
(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 subsidiaries, Hangzhou EZVIZ Software Ltd. (hereinafter referred to as "Hangzhou
EZVIZ Software") and Hangzhou Microimage Software Co., Ltd. (hereinafter referred to as "Hangzhou Microimage
Software"), are qualified software companies and enjoy the preferential collection of corporate income tax at half the
statutory tax rate of 25% in 2022 (2021: 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 subsidiaries Hangzhou Hikstorage Technology Co., Ltd. ("Hikstorage Technology") is identified
as a high-tech enterprise with a validity period of 3 years and the preferential tax period is 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 (2021: 15%).
Note 2: In accordance with the requirements of the Notice on Software Product Value-added Tax Policy (Cai Shui [2011]
275
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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, HikRobot, HikAuto Software, Hangzhou EZVIZ Software, Hikstorage
Technology, Hikimaging Technology, Hangzhou Hikfire Technology Co., Ltd. (hereinafter referred to as "HikFire
Technology"), 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") , Hangzhou Kuangxin, Fuyang Baotai and Zhejiang Hailai Yunzhi Technology Co., Ltd.,
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 1, 2019 to December 31, 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"). According to the Several Policies on Promoting the Recovery and Development of
Difficult Industries in the Service Industry Fa Gai Cai Jin [2022] No. 271, the VAT deduction policy for the service industry
will be continued, and the input tax deductible for the current period of taxpayers in the production and life service
industries will continue to be deducted by 10% and 15% respectively in 2022. The Company’s subsidiaries, a part of
Hangzhou Hikvision Technology Ltd.’s branches , Chongqing System, Hangzhou Hikvision Security Equipment Leasing
Service Co., Ltd., Anhui Hikvision Urban Operation Service Co., Ltd., a part of Hangzhou EZVIZ Network Co.,
Ltd.(hereinafter referred to as "EZVIZ Network")'s branches, 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.,
and Guizhou Haikang Transportation Big Data Co., Ltd. are complying with the provisions of the Additional Deduction
Policy and were entitled to additional deduction preferential tax policy of input tax since 2022.
276
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
V. Notes to Items in the Consolidated Financial Statements
1. Cash and Bank Balances
Unit: RMB
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 - - 1,710.03 - - 16,909.86
EUR 43,514.50 7.4229 323,003.75 41,743.98 7.2197 301,379.03
INR 1,759,047.96 0.0834 146,704.60 2,288,210.50 0.0857 196,099.64
USD 32,583.86 6.9646 226,933.53 33,133.82 6.3757 211,251.31
Other currencies - - 511,713.25 - - 1,125,633.69
Bank balance：
RMB - - 35,604,295,321.02 - - 31,577,521,085.40
USD 369,237,191.93 6.9646 2,571,589,346.94 272,857,839.86 6.3757 1,739,659,729.57
EUR 116,323,339.53 7.4229 863,456,516.97 96,011,075.74 7.2197 693,171,163.55
GBP 14,606,954.81 8.3941 122,612,239.34 17,199,784.69 8.6064 148,028,226.97
INR 1,359,355,345.44 0.0834 113,370,235.81 1,092,845,025.79 0.0857 93,656,818.71
MXN 83,049,427.31 0.3577 29,706,780.15 75,249,325.96 0.3116 23,447,689.97
AED 12,105,289.40 1.8966 22,958,891.87 5,055,058.19 1.7361 8,776,086.53
PLN 13,600,844.40 1.5878 21,595,420.74 10,745,706.25 1.5717 16,889,026.51
BRL 16,530,324.26 1.3050 21,572,073.16 36,644,426.85 1.1436 41,906,566.54
HKD 22,764,985.95 0.8933 20,335,961.95 31,824,133.26 0.8176 26,019,411.35
THB 98,104,375.12 0.2014 19,758,221.15 121,837,799.11 0.1912 23,295,387.19
AUD 2,198,029.38 4.7138 10,361,070.89 1,886,989.36 4.6220 8,721,664.84
Other currencies - - 186,155,014.22 - - 172,693,920.13
Other currency funds:
RMB - - 361,751,169.54 - - 112,293,072.17
USD 1,623,544.38 6.9646 11,307,337.16 3,595,184.37 6.3757 22,921,816.99
EUR 713,664.81 7.4229 5,297,462.51 580,030.78 7.2197 4,187,648.22
Other currencies - - 24,530,871.36 - - 6,830,343.19
Total 40,011,863,999.94 34,721,870,931.36
Including: deposited in
589,363,613.39 737,750,220.06
overseas banks
Details of other currency funds:
Unit: RMB
277
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 - - 9,477,411.92 - - 35,387,135.77
Deposits for letter of guarantee - - 126,434,505.79 - - 51,980,170.28
Other security deposits - - 13,666,564.66 - - 4,679,097.53
Other capitals with limitations - - 46,895,003.00 - - 25,880,098.58
Subtotal 196,473,485.37 117,926,502.16
Capitals without limitations:
Deposit in payment instrument
provided by third-party and in - - 205,579,877.47 - - 27,469,681.96
securities account
Other currency funds in USD 93,664.25 6.9646 652,334.03 119,611.52 6.3757 762,607.17
Other currency funds in EUR 24,403.36 7.4229 181,143.70 10,262.10 7.2197 74,089.28
Subtotal 206,413,355.20 28,306,378.41
Total 402,886,840.57 146,232,880.57
2. Held-for-trading Financial Assets
Unit: RMB
Item Closing Balance Opening Balance
Financial assets measured at fair value through current gain and loss 12,807,438.36 34,320,010.83
Including: derivative financial assets 12,807,438.36 34,320,010.83
Total 12,807,438.36 34,320,010.83
On December 31, 2022, derivative financial assets are forward foreign exchange contracts, and they 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.
3. Notes Receivable
1) Categories of notes receivable
Unit：RMB
Category Closing Balance Opening Balance
Bank acceptance bill 2,184,776,591.31 1,228,046,849.95
Commercial acceptance bill 335,211,567.92 294,714,055.35
Total 2,519,988,159.23 1,522,760,905.30
278
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
2) As of December 31, 2022, the pledged notes receivable by the Group is nil.
3) At the end of the current reporting period, notes receivable endorsed or discounted by the Group but not yet due
at the balance sheet day
Unit：RMB
Category Amount not derecognized as of December 31, 2022
Bank acceptance bill Note 1,241,880,022.19
Total 1,241,880,022.19
As of December 31, 2022, the Group gave RMB1,182,413,217.20 (2021: RMB711,238,103.83) undue bank acceptance
bills to suppliers for endorsement and discounted RMB59,466,804.99 (2021: nil) undue bank acceptance to banks. 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) 23 and Note (V) 30.3.
4) As of December 31, 2022, the Group transferred the defaulted notes receivable into accounts receivable.
Unit：RMB
Category Amounts transferred into accounts receivable as of December 31, 2022
Commercial Acceptance Bill 29,536,416.13
Total 29,536,416.13
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. Therefore, no loss provision is made.
4. Accounts Receivable
1) Disclosure by aging
Unit: RMB
Closing Balance
Item
Accounts receivable Credit loss provision Proportion (%)
Within credit period 17,802,665,327.45 81,686,804.21 0.46
Within 1 year after exceeding credit period 10,468,264,283.90 535,593,193.42 5.12
1-2 years after exceeding credit period 1,906,850,057.03 374,959,383.05 19.66
2-3 years after exceeding credit period 907,553,767.72 379,943,208.42 41.86
3-4 years after exceeding credit period 762,308,314.38 569,164,750.98 74.66
Over 4 years after exceeding credit period 557,358,170.53 557,358,170.53 100.00
Subtotal 32,404,999,921.01 2,498,705,510.61 7.71
279
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 32,404,999,921.01 100.00 2,498,705,510.61 7.71 29,906,294,410.40
Total 32,404,999,921.01 100.00 2,498,705,510.61 7.71 29,906,294,410.40
Beginning 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
Provision for credit loss by portfolios for accounts receivable
Unit: RMB
Closing balance
Customer
Carrying amount Credit loss provision Proportion (%)
Portfolio A 3,704,238,967.38 68,040,950.20 1.84
Portfolio B 21,545,877,335.97 2,222,360,508.89 10.31
Portfolio C 7,154,883,617.66 208,304,051.52 2.91
Total 32,404,999,921.01 2,498,705,510.61 7.71
Description of credit loss provision by portfolios for accounts receivable
As part of the Group's credit risk management, the Group uses the aging exceeding credit period 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.
280
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
As of December 31, 2022 and January 1, 2022, 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 0.03 2,958,550,090.46 952,575.87 2,957,597,514.59 0.04 3,095,392,524.62 1,291,742.49 3,094,100,782.13
Within 1 year after exceeding credit period 2.02 672,866,835.07 13,604,729.18 659,262,105.89 1.70 594,470,571.01 10,117,916.29 584,352,654.72
1-2 years after exceeding credit period 48.47 27,091,133.84 13,129,835.35 13,961,298.49 44.11 50,793,800.93 22,404,389.00 28,389,411.93
2-3 years after exceeding credit period 77.48 23,880,801.35 18,503,703.14 5,377,098.21 83.73 43,832,222.47 36,701,948.79 7,130,273.68
3-4 years after exceeding credit period 100.00 13,340,404.86 13,340,404.86 - 100.00 19,359,244.96 19,359,244.96 -
Over 4 years after exceeding credit period 100.00 8,509,701.80 8,509,701.80 - 100.00 2,653,390.61 2,653,390.61 -
Total 1.84 3,704,238,967.38 68,040,950.20 3,636,198,017.18 2.43 3,806,501,754.60 92,528,632.14 3,713,973,122.46
As of December 31, 2022 and January 1, 2022, the credit risk and expected credit losses of accounts receivable from portfolio B 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 0.76 8,531,459,822.34 65,085,907.08 8,466,373,915.26 1.99 8,575,278,759.81 170,679,301.15 8,404,599,458.66
Within 1 year after exceeding credit period 5.30 9,133,051,848.20 484,083,420.12 8,648,968,428.08 4.63 7,167,632,732.53 331,869,605.70 6,835,763,126.83
1-2 years after exceeding credit period 18.66 1,841,980,392.51 343,623,789.72 1,498,356,602.79 19.80 1,387,932,595.51 274,788,108.40 1,113,144,487.11
2-3 years after exceeding credit period 38.19 835,970,994.09 319,296,676.54 516,674,317.55 44.75 914,771,713.21 409,398,421.89 505,373,291.32
3-4 years after exceeding credit period 72.52 702,886,673.06 509,743,109.66 193,143,563.40 83.68 347,000,938.34 290,357,481.17 56,643,457.17
Over 4 years after exceeding credit period 100.00 500,527,605.77 500,527,605.77 - 100.00 288,831,015.89 288,831,015.89 -
Total 10.31 21,545,877,335.97 2,222,360,508.89 19,323,516,827.08 9.45 18,681,447,755.29 1,765,923,934.20 16,915,523,821.09
281
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
As of December 31, 2022 and January 1, 2022, 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 0.25 6,312,655,414.65 15,648,321.26 6,297,007,093.39 0.12 4,954,201,263.39 5,863,712.80 4,948,337,550.59
Within 1 year after exceeding credit period 5.72 662,345,600.63 37,905,044.12 624,440,556.51 5.08 594,136,961.30 30,172,981.24 563,963,980.06
1-2 years after exceeding credit period 48.19 37,778,530.68 18,205,757.98 19,572,772.70 52.38 69,240,541.50 36,265,915.28 32,974,626.22
2-3 years after exceeding credit period 88.35 47,701,972.28 42,142,828.74 5,559,143.54 100.00 46,561,027.57 46,561,027.57 -
3-4 years after exceeding credit period 100.00 46,081,236.46 46,081,236.46 - 100.00 25,802,744.58 25,802,744.58 -
Over 4 years after exceeding credit period 100.00 48,320,862.96 48,320,862.96 - 100.00 23,540,009.94 23,540,009.94 -
Total 2.91 7,154,883,617.66 208,304,051.52 6,946,579,566.14 2.94 5,713,482,548.28 168,206,391.41 5,545,276,156.87
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 1, 2022 2,026,658,957.75
Provision/(reverse) during the current reporting period 532,337,205.31
Derecognition of financial assets (including direct write-downs) and transfer out (61,413,372.39)
Difference arised from foreign currency statement translation 1,122,719.94
Balance on December 31, 2022 2,498,705,510.61
In the current reporting period, the amount of actual accounts receivable write-off is RMB 61,413,372.39.
282
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
4) Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
Proportion (%) of the total balance
Closing balance for credit loss
Name of the Party Closing balance of accounts receivable at the end of
provision
the current reporting period
CETC’s subsidiary company A (Note) 289,926,400.73 0.89 147,074,800.81
Third Party A 223,037,956.64 0.69 557,594.89
Third Party B 215,186,541.42 0.66 38,545,214.14
Third Party C 154,227,240.01 0.48 6,554,657.70
Third Party D 142,785,139.22 0.44 356,963.07
Total 1,025,163,278.02 3.16 193,089,230.61
Note: A subsidiary of CETC is a subsidiary of China Electronics Technology Group Co., Ltd., the Company's ultimate
controller.
5) As of December 31, 2022, there is no termination of accounts receivable booking due to transfer of a financial
asset.
6) As of December 31, 2022, 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 1,484,218,258.74 1,316,035,122.06
Total 1,484,218,258.74 1,316,035,122.06
2) At the end of the reporting period, the Group’s pledged receivables for financing
Unit: RMB
Item Amount pledged as of December 31, 2022
Bank acceptance bill 10,312.23
Total 10,312.23
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
Item Derecognized amount as of December 31, 2022
Bank acceptance bill 1,908,510,492.86
Total 1,908,510,492.86
283
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
Aging
Carrying amount Proportion (%) Carrying amount Proportion (%)
Within 1 year 467,175,741.37 87.36 472,051,582.19 93.33
1-2 years 60,041,088.41 11.23 16,837,633.29 3.33
2-3 years 4,732,310.18 0.88 12,180,525.79 2.41
Over 3 years 2,830,980.56 0.53 4,728,512.08 0.93
Total 534,780,120.52 100.00 505,798,253.35 100.00
2) Closing balances of top five prepayments parties
As of December 31, 2022, the Group’s top five balances of prepayments amounted to RMB163,448,162.33,
accounting for 30.56% of total closing balance of prepayments.
284
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
7. Other Receivables
1) Other receivables by aging
Unit: RMB
Closing Balance
Item
Other receivables Bad debt provision Proportion (%)
Within contract period 435,726,390.34 2,647,306.22 0.61
Within 1 year 74,536,873.66 3,098,605.26 4.16
1-2 years 6,501,889.62 1,149,718.96 17.68
2-3 years 5,758,160.62 2,190,980.22 38.05
3-4 years 8,938,449.42 5,871,667.42 65.69
Over 4 years 15,094,368.40 15,094,368.40 100.00
Subtotal 546,556,132.06 30,052,646.48 5.50
2) Other receivables by nature of the payment
Unit: RMB
Item Closing Balance Opening Balance
Guarantee deposits 262,305,393.59 216,176,255.21
Temporary payments for receivables 153,962,968.02 113,230,687.20
Tax rebates 2,166,013.19 762,862.50
Investment intention fund - 4,000,000.00
Others 128,121,757.26 51,019,823.13
Total 546,556,132.06 385,189,628.04
285
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
3) Provision for credit loss
Unit: RMB
Amount of changes in the current reporting period Difference resulted from
Category Opening balance foreign currency Closing balance
Provision Recollect or reverse Resell or write off statements conversion
Other receivables 25,569,182.16 7,029,184.17 (2,476,821.46) (393,162.35) 324,263.96 30,052,646.48
Total 25,569,182.16 7,029,184.17 (2,476,821.46) (393,162.35) 324,263.96 30,052,646.48
Changes in credit loss provisions for other receivables
Unit: RMB
Stage 1 Stage 2 Stage 3
Bad 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 1, 2022 2,587,782.99 3,087,217.99 19,894,181.18 25,569,182.16
The book balance of other receivables on J January
- - - -
1, 2022 in the current reporting period
--Transfer into stage 2 (648,213.90) 648,213.90 - -
-- Transfer into stage 3 - (1,066,987.16) 1,066,987.16 -
--provision/(reverse) in the current reporting period 383,473.17 1,579,879.49 2,589,010.05 4,552,362.71
Derecognition of financial assets (including direct
- - (393,162.35) (393,162.35)
write-downs) and transfer out
Other changes 324,263.96 - - 324,263.96
Balance on December 31, 2022 2,647,306.22 4,248,324.22 23,157,016.04 30,052,646.48
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 RMB393,162.35.
286
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
5) Top five debtors based on corresponding closing balance of other receivables
Unit: RMB
Proportion of total closing balance Closing balance for credit loss
Entities Nature Closing balance Aging
for other receivables (%) provision
Overseas subsidiary A Cash and bank balances in transit 53,180,000.00 Within the contract period 9.73 -
Overseas subsidiary B Cash and bank balances in transit 27,290,774.51 Within the contract period 4.99 -
Third party E Guarantee deposits 17,848,880.00 Within the contract period 3.27 117,802.61
Third party F Guarantee deposits 7,428,988.00 Within the contract period 1.36 49,031.32
Third party G Guarantee deposits 6,739,162.58 Within the contract period 1.23 44,478.47
Total 112,487,805.09 20.58 211,312.40
6) As of December 31, 2022, the Group does not have other receivables related to government subsidies.
7) As of December 31, 2022, there is no termination of other receivables booking due to transfer of a financial asset.
8) As of December 31, 2022, 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 8,590,579,068.82 405,402,336.01 8,185,176,732.81 7,947,851,148.15 233,046,765.20 7,714,804,382.95
Work-in-progress 413,355,134.81 - 413,355,134.81 437,963,160.90 - 437,963,160.90
Finished goods 10,955,174,807.28 839,876,008.09 10,115,298,799.19 9,760,949,606.67 702,675,806.16 9,058,273,800.51
Contract performance cost 290,988,057.76 6,595,745.76 284,392,312.00 763,071,063.24 - 763,071,063.24
Total 20,250,097,068.67 1,251,874,089.86 18,998,222,978.81 18,909,834,978.96 935,722,571.36 17,974,112,407.60
287
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 or write-off Others denominated in foreign currencies
Raw materials 233,046,765.20 285,003,215.76 112,647,644.95 - - 405,402,336.01
Finished goods 702,675,806.16 271,305,304.25 172,730,470.10 - 38,625,367.78 839,876,008.09
Contract performance cost - 6,595,745.76 - - - 6,595,745.76
Subtotal 935,722,571.36 562,904,265.77 285,378,115.05 - 38,625,367.78 1,251,874,089.86
The write-offs of provision for inventories in the current reporting period are due to use or sale of inventories.
288
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
9. Contract Assets
1) Details of contract assets:
Unit: RMB
Closing Balance Opening Balance
Items Provisions for Provisions for
Carrying amount Book value Carrying amount Book value
impairment impairment
Constructions 1,859,628,746.45 10,664,372.98 1,848,964,373.47 1,274,476,664.40 9,873,249.73 1,264,603,414.67
Maintenance
270,901,478.31 1,642,480.80 269,258,997.51 148,057,308.84 1,288,098.60 146,769,210.24
services
Total 2,130,530,224.76 12,306,853.78 2,118,223,370.98 1,422,533,973.24 11,161,348.33 1,411,372,624.91
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 2,130,530,224.76 100.00 12,306,853.78 0.58 2,118,223,370.98
Total 2,130,530,224.76 100.00 12,306,853.78 0.58 2,118,223,370.98
Provision for impairment of contract assets in the current reporting period:
Unit: RMB
Credit loss provision Total
Balance on January 1, 2022 11,161,348.33
Provision/reverse during the current reporting period 1,145,505.45
Balance on December 31, 2022 12,306,853.78
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.
10. Non-current Assets Due within One Year
Unit: RMB
Item Closing Balance Opening Balance
Long-term receivables due within one year (Note (V) 12) 996,902,343.27 975,960,437.14
Total 996,902,343.27 975,960,437.14
289
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
11. Other Current Assets
Unit: RMB
Item Closing balance Opening balance
Deductible VAT input 670,250,077.42 671,022,973.90
Prepaid corporate income tax 61,808,729.93 146,600,985.54
Prepaid tariff 17,113,351.36 113,756,173.22
Others 57,660,782.87 91,220,245.12
Total 806,832,941.58 1,022,600,377.78
290
Hikvision 2022 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2022 to December 31, 2022
12. Long-term Receivables
1) Details of long-term receivables
Unit: RMB
Closing balance Opening balance
Item
Carrying amount Provision for credit loss Book value Carrying amount Provision for credit loss Book value
Financial leases receivables 294,708,514.70 41,885,999.65 252,822,515.05 338,676,520.11 32,408,674.53 306,267,845.58
Including: Unrealized income from financing 8,548,939.32 - 8,548,939.32 15,579,721.55 - 15,579,721.55
Installments business 916,676,013.71 125,838,244.59 790,837,769.12 881,821,037.32 87,043,902.28 794,777,135.04
Including: Unrealized income from financing 32,175,399.92 - 32,175,399.92 26,548,778.33 - 26,548,778.33
Employee housing loan 493,890,024.40 - 493,890,024.40 487,983,401.49 - 487,983,401.49
Including: Unrealized income from financing 44,084,149.81 - 44,084,149.81 59,389,998.51 - 59,389,998.51
Less: Non-current assets due within one year (Note (V) 10) 1,163,050,529.25 166,148,185.98 996,902,343.27 1,093,138,859.09 117,178,421.95 975,960,437.14
Total 542,224,023.56 1,576,058.26 540,647,965.30 615,342,099.83 2,274,154.86 613,067,944.97
2) Credit loss provision
The Group believes that the employees corresponding to the long-term receivable employee housing loans held by the Group all have labor relations with the Group and the Group
assesses that the relevant debtors have good credit records, and the Group believes that there is no significant credit risk and therefore loss of provision is made
As of December 31, 2022, the credit risk and expected credit losses of long-term receivables are as follows:
Unit: RMB
Closing balance
Age
Amounts Credit loss provision Estimated average loss rate (%)
Within credit period 456,800,594.29 3,014,883.93 0.66
Within 1 year after exceeding credit period 333,625,777.98 14,179,095.57 4.25
1-2 years after exceeding credit period 193,133,173.09 34,010,751.77 17.61
2-3 years after exceeding credit period 143,722,653.49 54,686,469.65 38.05
3-4 years after exceeding credit period 64,906,109.70 42,636,823.46 65.69
Over 4 years after exceeding credit period 19,196,219.86 19,196,219.86 100.00
291
Hikvision 2022 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2022 to December 31, 2022
Closing balance
Age
Amounts Credit loss provision Estimated average loss rate (%)
Total 1,211,384,528.41 167,724,244.24 13.85
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 Expected credit losses for the
Credit loss provision Expected credit losses for the entire duration entire duration Total
in the next 12 months (No credit impairment (Credit impairment has
occurred) occurred)
Balance on January 1, 2022 5,623,293.18 45,080,318.80 68,748,964.83 119,452,576.81
On January 1, 2022, the book balance of long-term receivables in the current reporting period
Transfer into stage 2 (2,902,743.16) 2,902,743.16 - -
Transfer into stage 3 - (26,833,019.41) 26,833,019.41 -
Provision/(reverse) during the current reporting period 294,333.91 27,039,804.79 20,937,528.73 48,271,667.43
Balance on December 31, 2022 3,014,883.93 48,189,847.34 116,519,512.97 167,724,244.24
3) As of December 31, 2022, there is no termination of long-term receivables booking due to transfer of a financial asset.
4) As of December 31, 2022, the Group has no assets/liabilities booked due to any transferred long-term receivables that the Group continue to be involved in.
292
Hikvision 2022 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2022 to December 31, 2022
13. Long-term Equity Investment
Unit: RMB
Increase/Decrease in the current reporting period
Closing
balance
Opening Investment Profit Adjustment to 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
702,369,339.95 - - 112,680,820.39 - 14,775,227.26 - - - 829,825,387.60 -
Investment Fund
Partnership (L.P.) (Note1)
Zhejiang City Digital
12,214,320.29 11,500,000.00 - 2,627,190.51 - - - - - 26,341,510.80 -
Technology Ltd. (Note2)
Zhejiang Haishi Huayue
11,930,512.66 - - 2,726,503.57 - - (1,275,000.00) - - 13,382,016.23 -
Digital Technology Ltd.
Zhejiang Haishi Urban
Service Operation Ltd.
(formerly known as:
1,264,658.38 1,500,000.00 - (1,089,851.65) - - - - - 1,674,806.73 -
Shenzhen Hikvision Urban
Service Operation Ltd.
(Note2)
Guangxi Haishi Urban
Operation Management 4,632,200.59 8,560,000.00 - (132,206.62) - - - - - 13,059,993.97 -
Ltd. (Note2)
Yunnan Yinghai Parking
4,558,881.09 - - 519,116.95 - - - - - 5,077,998.04 -
Service Ltd.
Xuzhou Kangbo Urban
Operation Management 9,233,201.67 - - 1,152,365.21 - - - - - 10,385,566.88 -
Service Ltd.
Subtotal 746,203,114.63 21,560,000.00 - 118,483,938.36 - 14,775,227.26 (1,275,000.00) - - 899,747,280.25 -
293
Hikvision 2022 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2022 to December 31, 2022
Increase/Decrease in the current reporting period
Closing
balance
Opening Investment Profit Adjustment to 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 Sensortech
75,466,476.84 - - 22,627,903.68 - - - - - 98,094,380.52 -
Intelligent Technology Ltd.
Maxio Technology
(Hangzhou) Co., Ltd. 104,537,528.30 - - (31,228,623.67) - 70,591,176.64 - - - 143,900,081.27 -
(Note1)
Zhiguang Hailian Big Data
21,285,843.27 - - (3,378,441.24) - 4,517,968.05 - - - 22,425,370.08 -
Technology Ltd. (Note1)
Sanmenxia Xiaoyun Vision
3,069,386.03 - - (441,143.16) - - - - - 2,628,242.87 -
Technology Ltd.
Jiaxin Haishi JiaAn
21,654,742.45 - - 2,693,956.92 - - - - - 24,348,699.37 -
Zhicheng Technology Ltd.
Zhejiang Changyun Haibao
- 3,000,000.00 - (1,408,717.24) - - - - - 1,591,282.76 -
Technology Ltd. (Note3)
Terapark (Nanjing) Ltd.
- 20,000,000.00 - (396,874.31) - - - - - 19,603,125.69 -
(Note4)
Beijing Taifang Techology
- 40,000,000.00 - (304,949.40) - - - - - 39,695,050.60 -
LLC (Note5)
Qinghai Qingtang Big Data
9,948,454.93 - (9,800,000.00) (148,454.93) - - - - - - -
Co., Ltd. (Note6)
Subtotal 235,962,431.82 63,000,000.00 (9,800,000.00) (11,985,343.35) - 75,109,144.69 - - - 352,286,233.16 -
Total 982,165,546.45 84,560,000.00 (9,800,000.00) 106,498,595.01 - 89,884,371.95 (1,275,000.00) - - 1,252,033,513.41 -
Note 1: Changes in other equities during the reporting period was due to the changes in equity caused by increasing capital of the investee by other shareholders.
294
Hikvision 2022 Annual Report
Notes to Financial Statements ar
For the reporting period from January 1, 2022 to December 31, 2022
Note 2: The Group made additional investment in the investee this year, and the subscribed proportion of equity in the investee remained unchanged.
Note 3: In December 2019, a subsidiary of the Group entered into an agreement with Zhejiang Changyun Investment Co., Ltd. and ZBO Fintech Co., Ltd. regarding the establishment of
a joint venture, Zhejiang Changyun Haibao Technology Co., Ltd. ("Changyun Haibao"), acquiring 30% equity in Changyun Haibao. The Group has paid capital contributions as of the
year end. The board of directors of Changyun Haibao consists of seven directors, of whom two are appointed by the Group in accordance with the articles of association of Changyun
Haibao. As the Group exerts a significant influence on Changyun Haibao, it is accounted for as an associate.
Note 4: In September 2022, a subsidiary of the Group entered into an agreement with Terapark (Nanjing) Ltd. ("Terapark") and its former shareholders, acquiring 9.90% equity in Terapark
for RMB 20 million. The board of directors of Terapark consists of seven directors, of whom one is appointed by the Group in accordance with Terapark's articles of association. As the
Group exerts a significant influence on Terapark, it is accounted for as an associate.
Note 5: In August 2022, a subsidiary of the Group acquired 3.6865 % equity in Beijing Taifang Technology Ltd. ("Beijing Taifang Technology") from Langma 8 (Shenzhen) Venture
Capital Center (Limited Partnership) for RMB 12.6 million. In August 2022, the Group increased its capital contributions to Beijing Taifang Technology by RMB 27.4 million. Upon
completion of this transaction, the Group held 4.4023% equity in Beijing Taifang Technology. The board of directors of Beijing Taifang Technology consists of nine directors, of whom
one is appointed by the Group in accordance with Beijing Taifang Technology's articles of association. As the Group exerts a significant influence on Beijing Taifang Technology, it is
accounted for as an associate.
Note 6: Qinghai Qingtang Big Data Co., Ltd. completed its liquidation on December 28, 2022 and completed registration of business cancellation on January 9, 2023.
295
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
14. Other Non-current Financial Assets
Unit: RMB
Item Closing balance Opening balance
Investments in equity instruments (Note) 423,893,239.94 438,724,172.22
Total 423,893,239.94 438,724,172.22
Note: 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. During the current reporting period, the Company received a cash
dividend of RMB51,892,209.92 from this investee. (2021: RMB115,644,801.97) 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
Buildings and General-purpose Special-purpose Transportation
Item Total
constructions equipment equipment vehicles
I. Total original carrying amount
1. Opening 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
2. Increase in the current
1,593,354,163.97 458,315,165.51 704,620,607.42 9,460,878.06 2,765,750,814.96
reporting period
1) purchase 7,211,912.08 449,377,016.10 568,447,670.68 9,460,878.06 1,034,497,476.92
2) transferred from
1,586,142,251.89 8,938,149.41 78,150,412.05 - 1,673,230,813.35
construction in progress
3) transferred from
- - 58,022,524.69 - 58,022,524.69
inventory
3.Decrease in the current
10,792,551.96 39,460,047.05 56,682,563.10 8,228,804.52 115,163,966.63
reporting period
1) disposal or write-off 10,792,551.96 39,460,047.05 56,682,563.10 8,228,804.52 115,163,966.63
4. Effect on conversion of
financial statements
28,972,579.92 10,719,218.99 (310,967.84) 1,183,204.65 40,564,035.72
denominated in foreign
currencies
12,315,513,158.6
5.Closing Balance 7,452,114,917.55 1,795,698,464.97 2,966,436,208.66 101,263,567.44
2
II. Accumulated depreciation
1. Opening balance 1,215,383,927.62 516,132,115.59 1,137,960,269.72 59,295,290.37 2,928,771,603.30
2. Increase in the current
297,505,151.41 269,929,474.10 347,827,198.67 12,852,587.92 928,114,412.10
reporting period
(1) accrual 297,505,151.41 269,929,474.10 347,827,198.67 12,852,587.92 928,114,412.10
3.Decrease in the current
4,102,499.04 28,064,250.04 45,387,810.12 7,412,937.99 84,967,497.19
reporting period
(1) disposal or write- off 4,102,499.04 28,064,250.04 45,387,810.12 7,412,937.99 84,967,497.19
4. Effect on conversion of
financial statements
899,312.01 2,817,815.54 (233,016.17) 267,898.35 3,752,009.73
denominated in foreign
currencies
5.Closing balance 1,509,685,892.00 760,815,155.19 1,440,166,642.10 65,002,838.65 3,775,670,527.94
III. Total book value
Closing balance on book value 5,942,429,025.55 1,034,883,309.78 1,526,269,566.56 36,260,728.79 8,539,842,630.68
Opening 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
296
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
2) As of December 31, 2022, the Group did not have any significant idle fixed assets.
3) As of December 31, 2022, the fair value of the dedicated equipment rent out through operating leasing by the
Group is RMB81,627,645.88.
4) Fixed assets of which certificates of title have not been granted as of December 31, 2022：
Unit: RMB
Item Carrying amount Reason for certificates of title not granted
In the process of obtaining the real estate
Office building for branches 12,722,154.03
certificates
In the process of obtaining the real estate
Hangzhou Innovation Industrial Park 786,659,467.76
certificates after transferred to fixed assets
Total 799,381,621.79
297
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 1,424,680,236.64 - 1,424,680,236.64 896,287,490.09 - 896,287,490.09
Xi’an Science and Technology Park Project 510,141,028.55 - 510,141,028.55 181,009,327.21 - 181,009,327.21
Wuhan Intelligence Industry Park Project 362,495,271.16 - 362,495,271.16 21,605,140.49 - 21,605,140.49
EZVIZ Smart Home Product Industrial Base Project
282,125,289.82 - 282,125,289.82 95,322,172.33 - 95,322,172.33
(Infrastructure Part)
Security Industrial Base (Tonglu) Phase III 256,401,113.99 - 256,401,113.99 48,768,905.95 - 48,768,905.95
Shijiazhuang Science and Technology Park Project 240,987,635.91 - 240,987,635.91 100,184,640.21 - 100,184,640.21
Hefei Science and Technology Park Project 96,324,257.68 - 96,324,257.68 18,754,774.97 - 18,754,774.97
Zhengzhou Science and Technology Park Project 93,894,775.99 - 93,894,775.99 42,029,452.82 - 42,029,452.82
Chongqing Science and Technology Park Project-
88,837,517.21 - 88,837,517.21 538,446.48 - 538,446.48
Phase Ⅲ
EZVIZ Intelligent Manufacturing Chongqing Base
72,173,018.20 - 72,173,018.20 - - -
Project(Infrastructure Part)
Nanjing Science and Technology Park Project 59,330,672.30 - 59,330,672.30 1,096,879.60 - 1,096,879.60
Nanchang Science and Technology Park Project 55,299,275.67 - 55,299,275.67 5,811,745.36 - 5,811,745.36
Hangzhou Innovation Industry Park - - - 393,310,782.16 - 393,310,782.16
Security Industrial Base (Tonglu) - Phase II
- - - 390,702,241.74 - 390,702,241.74
Continued Construction Project
Others 228,113,207.68 - 228,113,207.68 127,914,099.27 - 127,914,099.27
Total 3,770,803,300.80 - 3,770,803,300.80 2,323,336,098.68 - - 2,323,336,098.68
2) Changes in significant construction in progress during the current reporting period
Unit: RMB
298
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Capital
Amount ization
Effect on Including:
invested Accumulated rate for
conversion of capitalized
Transferred to as a Construct capitalized interest
Increase in the financial interest and Source
Budget fixed assets during Other proportio ion in interest and in the
Item Opening balance current reporting statements Closing balance profit/loss on of
(RMB 0,000) the current Reductions n of Progress profit/loss on current
period denominated in exchange for the funds
reporting period (Note 1) budget (%) exchange reporti
foreign current reporting
amount (Note 2) ng
currencies period
(%) period
(%)
Chengdu
Self-
Science and
196,900.00 896,287,490.09 528,392,746.55 - - - 1,424,680,236.64 72.36% 72.36% - - financin
Technology g
Park Project
Xi’an Science
Self-
and
227,800.00 181,009,327.21 329,131,701.34 - - - 510,141,028.55 22.39% 22.39% - - - financin
Technology g
Park Project
Wuhan
Self-
Intelligence
238,700.00 21,605,140.49 340,890,130.67 - - - 362,495,271.16 15.19% 15.19% - - - financin
Industry Park g
Project
EZVIZ Smart
Home Product Self-
financin
Industrial
75,300.00 95,322,172.33 186,803,117.49 - - - 282,125,289.82 37.47% 37.47% 3,833,236.08 3,833,236.08 3.70% g/
Base Project specific
(Infrastructure loan
Part)
Security
Self-
Industrial
77,000.00 48,768,905.95 207,632,208.04 - - - 256,401,113.99 33.30% 33.30% - - - financin
Base (Tonglu) g
Phase III
Shijiazhuang
Self-
Science and
89,700.00 100,184,640.21 140,802,995.70 - - - 240,987,635.91 26.87% 26.87% - - financin
Technology g
Park Project
Hefei Science - - -
Self-
and
54,100.00 18,754,774.97 77,569,482.71 - - - 96,324,257.68 17.80% 17.80% financin
Technology g
Park Project
Zhengzhou - - -
Self-
Science and
48,500.00 42,029,452.82 51,865,323.17 - - - 93,894,775.99 19.36% 19.36% financin
Technology g
Park Project
Chongqing - - -
Science and Self-
Technology 48,000.00 538,446.48 88,299,070.73 - - - 88,837,517.21 18.51% 18.51% financin
Park Project- g
Phase Ⅲ
EZVIZ Self-
Intelligent 117,000.00 - 72,173,018.20 - - - 72,173,018.20 6.17% 6.17% - - - financin
Manufacturin g
299
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
g Chongqing
Base
Project(Infrast
ructure Part)
Nanjing - - -
Self-
Science and
58,100.00 1,096,879.60 58,233,792.70 - - - 59,330,672.30 10.21% 10.21% financin
Technology g
Park Project
Nanchang - - -
Self-
Science and
49,100.00 5,811,745.36 49,487,530.31 - - - 55,299,275.67 11.26% 11.26% financin
Technology g
Park Project
Hangzhou
Specific
Innovation 83,100.00 393,310,782.16 399,241,430.12 (792,552,212.28) - - - 95.37% 100.00% (77,456,678.27) (6,493,347.83) 0.85% loan
Industry Park
Security
Industrial
Base (Tonglu) Self-
- Phase II 58,600.00 390,702,241.74 195,023,827.62 (585,726,069.36) - - - 100.00% 100.00% - - - financin
Continued g
Construction
Project
Self-
Others 127,914,099.27 393,751,550.73 (294,952,531.71) 3,097,644.99 (1,697,555.60) 228,113,207.68 - - - - - financin
g
Total 1,421,900.00 2,323,336,098.68 3,119,297,926.08 (1,673,230,813.35) 3,097,644.99 (1,697,555.60) 3,770,803,300.80 - - (73,623,442.19) (2,660,111.75)
Note 1: Other reductions during 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 31, 2022, the Group did not have any sign of impairment of projects under construction; therefore, no provision for impairment loss was booked.
300
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 687,537,465.14 230,374.45 91,934,144.20 22,894,986.96 802,596,970.75
2. Increased 265,856,017.58 69,374.70 - 6,569,949.78 272,495,342.06
(1)New Lease 265,856,017.58 69,374.70 - 6,569,949.78 272,495,342.06
3. Decreased 103,530,959.39 - - 5,404,203.49 108,935,162.88
(1) The lease contract
103,530,959.39 - - 5,404,203.49 108,935,162.88
expires or terminates early
4. Effect on conversion of
financial statements denominated 11,300,622.04 (866.34) - 808,398.67 12,108,154.37
in foreign currencies
5. Closing balance 861,163,145.37 298,882.81 91,934,144.20 24,869,131.92 978,265,304.30
II. Accumulated depreciation
1. Opening balance 160,488,138.26 144,576.92 68,096,796.36 7,473,786.46 236,203,298.00
2. Increased 223,184,242.30 82,192.15 14,635,251.10 8,471,970.69 246,373,656.24
(1) Provisions 223,184,242.30 82,192.15 14,635,251.10 8,471,970.69 246,373,656.24
3. Decreased 75,332,041.81 - - 5,204,987.81 80,537,029.62
(1) The lease contract
75,332,041.81 - - 5,204,987.81 80,537,029.62
expires or terminates early
4. Effect on conversion of
financial statements denominated 1,584,511.62 (209.31) - 162,751.06 1,747,053.37
in foreign currencies
5. Closing balance 309,924,850.37 226,559.76 82,732,047.46 10,903,520.40 403,786,977.99
III. Total book value
1. Closing balance on book value 551,238,295.00 72,323.05 9,202,096.74 13,965,611.52 574,478,326.31
2. Opening balance on book value 527,049,326.88 85,797.53 23,837,347.84 15,421,200.50 566,393,672.75
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. The above right-of use assets
cannot be used for purposes including borrowing, mortgage, and guarantee, etc.
In the current reporting period, the total amount of the short-term lease expenses and low-value asset lease expenses that
the Group included in the current profit was RMB99,598,934.33 (2021: RMB82,001,765.42).
The total cash outflow related to leases for the year was RMB327,608,122.43 (2021: RMB272,298,575.65).
As of December 31, 2022, 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
Intellectual property
Item Land use right Application Software Franchise Total
right
I. Total original carrying
amount
1. Opening balance 1,259,213,465.26 69,966,433.88 374,982,150.82 91,933,517.61 1,796,095,567.57
2. Increased 323,094,474.37 13,387.95 29,329,660.01 11,296,400.11 363,733,922.44
301
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Intellectual property
Item Land use right Application Software Franchise Total
right
(1) Purchase 323,094,474.37 13,387.95 29,329,660.01 11,296,400.11 363,733,922.44
3. Decreased - - 7,442,132.75 - 7,442,132.75
(1)Disposal or write-off - - 7,442,132.75 - 7,442,132.75
4. Effect on conversion of
financial statements
- 32,942.04 779,318.65 12,053.85 824,314.54
denominated in foreign
currencies
5. Closing balance 1,582,307,939.63 70,012,763.87 397,648,996.73 103,241,971.57 2,153,211,671.80
II. Total accumulated
amortization
1.Opening balance 103,592,991.04 65,002,594.28 311,663,913.28 11,588,653.90 491,848,152.50
2. Increased 31,678,386.25 3,356,580.16 36,141,067.46 8,500,179.34 79,676,213.21
(1)Accrual 31,678,386.25 3,356,580.16 36,141,067.46 8,500,179.34 79,676,213.21
3. Decreased - - 6,042,405.91 - 6,042,405.91
(1)Disposal or write-off - - 6,042,405.91 - 6,042,405.91
4. Effect on conversion of
financial statements
- 19,322.78 736,932.70 5,890.84 762,146.32
denominated in foreign
currencies
5. Closing balance 135,271,377.29 68,378,497.22 342,499,507.53 20,094,724.08 566,244,106.12
III. loss provision
1.Opening balance - - - - -
2. Increased - - - 42,034,063.49 42,034,063.49
3. Decreased - - - - -
5. Closing balance - - - 42,034,063.49 42,034,063.49
Ⅳ. Total book value
1. Closing balance on book
1,447,036,562.34 1,634,266.65 55,149,489.20 41,113,184.00 1,544,933,502.19
value
2. Opening balance on
1,155,620,474.22 4,963,839.60 63,318,237.54 80,344,863.71 1,304,247,415.07
book value
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
SISTEMAS Y SERVICIOS DE
73,308,109.05 - - 6,573,714.57 79,881,823.62
COMUNICACIN, S.A. DE C.V.
HuaAn Baoquan Intelligence and its
61,322,871.63 - - - 61,322,871.63
subsidiaries
Hangzhou Kuangxin Technology Ltd. 59,060,454.06 - - - 59,060,454.06
Zhejiang Zhiyuan Fire Safety
Engineering Ltd. ("Zhejiang Zhiyuan - 8,199,253.77 - - 8,199,253.77
Fire") (Note1)
BK EESTI AKTSIASELTS 4,341,956.31 - - 122,205.29 4,464,161.60
SIA "BK Latvia" 4,335,930.90 - - 122,035.70 4,457,966.60
302
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
Hangzhou Haikang Zhicheng
Investment and Development Ltd. 12,573.42 - (12,573.42) - -
(Note2)
Total 202,381,895.37 8,199,253.77 (12,573.42) 6,817,955.56 217,386,531.28
Note 1: The Group acquired Zhejiang Zhiyuan Fire Safety Engineering Ltd., resulting in a goodwill of RMB8,199,253.77,
see Note (VI) 1.
Note 2: Hangzhou Haikang Zhicheng Investment and Development Ltd. was cancelled in 2022, and the goodwill decreased
by RMB12,573.42.
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 2023 to 2027 approved by management, with a certain discount rate. Cash flow over 5 years is calculated on
the basis of 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
Opening Other decreased
Invested unit Increased Amortized foreign currency Closing balance
Balance amount
translation
Improvement
expenditure for leased 98,617,176.50 87,543,749.45 53,016,110.66 - 48,777.31 133,193,592.60
fixed asset
Employee housing loan
59,389,998.40 18,425,634.64 28,470,415.65 5,261,067.58 - 44,084,149.81
deferred interest
Total 158,007,174.90 105,969,384.09 81,486,526.31 5,261,067.58 48,777.31 177,277,742.41
21. Deferred Tax Assets/Deferred Tax Liabilities
1) Deferred tax assets that are not presented on net off basis
Unit: RMB
303
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for impairment
1,244,117,898.85 303,398,701.08 746,689,777.87 203,337,661.26
losses of assets
Provision for credit loss 2,592,933,147.29 539,409,348.22 2,019,377,828.80 414,456,930.82
Payroll payables 866,731,426.46 135,343,862.92 1,021,696,707.76 156,929,402.30
Share-based payment 102,865,533.19 18,154,808.30 546,398,398.17 92,168,164.61
Provisions 159,335,457.04 26,406,150.70 124,817,084.93 18,515,337.61
Accrued but unsettled
416,294,075.36 80,952,178.12 224,525,193.17 49,859,840.33
liabilities
Unrealized profit from inter-
2,407,578,813.30 361,136,821.99 2,025,608,612.07 303,841,291.79
group transactions
Changes in the fair value of
derivative financial 68,299,685.57 17,074,921.39 3,795,920.86 948,980.22
instruments
Deferred income 913,846,162.56 108,383,170.93 400,764,044.74 61,186,781.23
Changes in fair value of
other non-current financial 32,701,261.48 4,905,189.22 - -
assets
Difference in depreciation of
fixed assets and difference
305,795,669.55 13,305,393.19 - -
in amortization of intangible
assets
Tax deductible losses 294,467,968.83 39,179,829.21 - -
Total 9,404,967,099.48 1,647,650,375.27 7,113,673,568.37 1,301,244,390.17
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 of
fixed assets and difference in
1,439,877,224.17 256,804,768.33 929,573,058.04 170,677,622.00
amortization of intangible
assets
Long term investment – joint
venture accounted by the 230,000,194.33 34,500,029.15 - -
equity method
Changes in the fair value of
derivative financial 12,807,438.36 3,201,859.59 29,037,242.51 7,259,310.63
instruments
Changes in fair value of other
- - 38,300,223.10 5,745,033.47
non-current financial assets
Total 1,682,684,856.86 294,506,657.07 996,910,523.65 183,681,966.10
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 178,003,886.23 1,469,646,489.04 90,366,814.93 1,210,877,575.24
Deferred tax liabilities 178,003,886.23 116,502,770.84 90,366,814.93 93,315,151.17
4) Details of unrecognized deferred tax assets
Unit: RMB
304
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Item Closing balance Opening balance
Deductible temporary differences 896,347,987.05 687,848,166.51
Deductible loss 2,279,586,556.97 2,841,919,737.84
Total 3,175,934,544.02 3,529,767,904.35
5) Deductible losses for unrecognized deferred tax assets will expire in the following years
Unit: RMB
Year Closing balance Opening balance
2022 - 9,759,663.51
2023 23,615,749.83 33,125,518.27
2024 31,698,815.96 34,945,616.34
2025 16,588,829.27 148,742,047.53
2026 49,208,121.54 279,312,175.66
2027 and beyond 2,158,475,040.37 2,336,034,716.53
Total 2,279,586,556.97 2,841,919,737.84
22. Other Non-current Assets
Unit: RMB
Closing balance Opening balance
Item
Carrying amount Provision Book value Carrying amount Provision Book value
Contract assets 2,229,022,015.47 15,524,799.08 2,213,497,216.39 2,672,243,740.12 24,017,466.88 2,648,226,273.24
Prepayments for
363,341,827.45 - 363,341,827.45 269,600,676.00 - 269,600,676.00
real estate
Prepayments for
acquisition of 127,079,348.02 - 127,079,348.02 278,398,706.94 - 278,398,706.94
land
Prepayments for
70,134,950.70 - 70,134,950.70 140,577,165.61 - 140,577,165.61
equipment
Prepayments for
39,467,612.18 - 39,467,612.18 4,679,432.89 - 4,679,432.89
infrastructure
Others 2,181,057.96 - 2,181,057.96 9,044,156.95 - 9,044,156.95
Total 2,831,226,811.78 15,524,799.08 2,815,702,012.70 3,374,543,878.51 24,017,466.88 3,350,526,411.63
23. Short-term Borrowings
1) Categories of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Credit loan 3,283,605,167.90 4,074,962,469.97
Discounted but not expired notes 59,466,804.99 -
Total 3,343,071,972.89 4,074,962,469.97
2) As of December 31, 2022, the Group did not have any overdue short-term loans that were failed to repay.
24. Held-for-trading Financial Liabilities
Unit: RMB
305
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Item Closing balance Opening balance
Financial liabilities measured at fair value through
68,299,685.57 4,062,317.57
current profits and losses
Including: derivative financial liabilities 68,299,685.57 4,062,317.57
total 68,299,685.57 4,062,317.57
As of December 31, 2022, derivative financial liabilities are forward foreign exchange contracts, and they 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.
25. Notes Payable
Unit: RMB
Item Closing balance Opening balance
Bank acceptance Bill 1,207,756,963.94 1,339,998,383.34
Total 1,207,756,963.94 1,339,998,383.34
As of December 31, 2022, 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 15,803,616,247.96 15,585,975,750.26
Payables on equipment 221,947,555.03 303,719,230.86
Total 16,025,563,802.99 15,889,694,981.12
2) As of December 31, 2022, 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 2,177,001,350.72 2,181,573,144.68
Advanced receipts for construction settlement payment 216,246,689.72 185,782,167.92
Advanced receipts from services 276,187,505.46 236,278,710.74
Subtotal 2,669,435,545.90 2,603,634,023.34
Less：Contract liabilities included in other non-current liabilities
24,939,037.54 22,739,796.75
(Note (V), 38)
Total 2,644,496,508.36 2,580,894,226.59
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
306
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
delivered to the customers. Sales rebates to distributors of the Group may be accumulated when they purchase products
from the Group, and are deductible for payments for goods to be purchased in the future. Such sales rebates enable
distributors to enjoy discounts in their future purchase of goods, which are not available to the same type of customers.
Therefore, the commitment to offer such discounts to distributors on their future purchase prices is a separate performance
obligation. Such commitment is recognized as a contract liability based on the transaction price allocated on the basis of
the fair value of rebates when the sales transaction takes place, and is recognized as revenue when distributors use the
sales rebates for deduction of purchase prices.
The Group provides construction works and maintenance services based on the construction works and maintenance
service contracts with customers, and recognizes revenue based on the performance progress during the term of the
contracts. The Group’s customers make milestone payments for the construction works and maintenance services of the
Group as provided in the contracts. For the portion where the Group has obtained an unconditional right to the payment,
it will be recognized as accounts receivable, while the remaining portion will be recognized as contract assets; where the
contract price received or receivable by the Group exceeds the performance obligation completed to date, the excess
portion will be recognized as contract liabilities. The Group presents contract assets and contract liabilities under the same
contract on a net basis.
The Group provides cloud services including storage service, video service, and telephone service to its customers. Such
services are performance obligations to be satisfied during a period of time, and revenue is recognized based on the
performance progress over the period in which such services are rendered. As customers have prepaid for cloud services
at the time of purchase, at the time of transaction, the Group recognizes as a contract liability for the payments that would
be received for cloud services, and recognizes revenue based on the performance progress over the period in which such
services are rendered.
3) As of January 1, 2022, the book value of contract liabilities amounted to RMB2,580,894,226.59 has been
recognized as revenue in 2022, including contract liabilities of RMB2,181,573,144.68 arising from advance
receipt of product sales payment, the contract liabilities of RMB185,782,167.92 arising from advance receipt of
project settlement payment and contract liabilities of RMB213,538,913.99 arising from the advance receipt of
service payment. As at December 31, 2022, the contract liabilities of RMB2,644,496,508.36 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 4,520,802,459.92 15,519,933,767.54 15,330,843,636.86 4,709,892,590.60
2. Termination benefits – defined
74,749,613.20 1,119,585,045.15 1,066,924,793.00 127,409,865.35
contribution scheme
Total 4,595,552,073.12 16,639,518,812.69 16,397,768,429.86 4,837,302,455.95
307
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
2) List of Short-term remuneration
Unit: RMB
Increase in the current Decrease in the current
Item Opening balance Closing balance
reporting period reporting period
1.Wages or salaries,
bonuses, allowances and 4,298,383,537.23 13,601,909,847.94 13,535,748,474.15 4,364,544,911.02
subsidies
2.Staff welfare 11,644.54 332,435,539.37 332,447,183.91 -
3.Social insurance
40,347,586.71 641,312,052.88 613,993,171.93 67,666,467.66
contributions
Including:
38,502,111.67 613,409,818.77 587,311,412.65 64,600,517.79
Medical insurance
Injury insurance 1,366,064.14 22,094,410.18 20,883,442.62 2,577,031.70
Maternity insurance 479,410.90 5,807,823.93 5,798,316.66 488,918.17
4.Housing funds - 695,452,209.35 691,559,595.18 3,892,614.17
5.Labor union and
182,059,691.44 248,824,118.00 157,095,211.69 273,788,597.75
education fund
Subtotal 4,520,802,459.92 15,519,933,767.54 15,330,843,636.86 4,709,892,590.60
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 72,541,942.78 1,079,281,000.54 1,026,682,019.64 125,140,923.68
2.Unemployment insurance 2,207,670.42 40,304,044.61 40,242,773.36 2,268,941.67
Subtotal 74,749,613.20 1,119,585,045.15 1,066,924,793.00 127,409,865.35
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 2022, the Group shall pay RMB1,079,281,000.54 and RMB40,304,044.61 to the pension insurance plan and
unemployment insurance plan respectively (2021: RMB859,688,761.68 and RMB28,887,040.12). As of December 31,
2022, the Group had fees payables of RMB125,140,923.68 and RMB2,268,941.67 (December 31, 2021:
RMB72,541,942.78 and RMB2,207,670.42), 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 648,624,680.00 927,703,038.55
Value-added tax 380,413,435.90 426,720,008.08
City construction and maintenance tax 29,362,098.03 21,622,541.71
Education surcharges 13,048,855.45 9,380,789.66
Local education surcharges 9,328,597.02 6,529,587.16
Others 153,254,471.97 69,514,064.53
Total 1,234,032,138.37 1,461,470,029.69
308
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
30. Other Payables
1) Categories
Unit: RMB
Item Closing balance Opening balance
Dividend payable 300,150,894.34 247,382,205.37
Other payables 2,903,157,791.97 1,583,244,377.66
Total 3,203,308,686.31 1,830,626,583.03
2) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Dividends of incentive restricted shares 187,657,918.50 144,401,634.74
Dividends payable to minority shareholders 112,492,975.84 102,980,570.63
Total 300,150,894.34 247,382,205.37
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
1,182,413,217.20 711,238,103.83
(V) 3)
Accrued expenses 988,937,734.54 144,958,993.62
Guarantee and deposit fees 401,628,843.74 341,371,587.01
Collection and payment on behalf 236,839,241.37 261,710,850.19
Other expense payable 93,338,755.12 123,964,843.01
Total 2,903,157,791.97 1,583,244,377.66
(2) As of December 31, 2022, 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
Long-term borrowings due within one year (Note (V) 33) 562,906,197.43 347,587,089.91
Lease liabilities due within one year (Note (V), 34) 303,328,658.06 248,027,043.35
Long-term payables due within one year (Note (V) 35) 1,962,416.97 1,301,227.32
Total 868,197,272.46 596,915,360.58
309
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
32. Other Current Liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription payment of restricted shares 465,979,374.84 511,594,361.52
Output VAT to be transferred 457,742,218.94 405,885,561.09
Total 923,721,593.78 917,479,922.61
33. Long-term Borrowings
Unit: RMB
Item Closing balance Opening balance
Pledged loan (Note 1) 1,363,216,974.37 1,455,221,540.20
Mortgage loan (Note 2) 229,070,200.25 -
Guaranteed loan - 387,851,149.01
Credit loan (Note 3) 6,315,934,364.41 1,611,886,043.22
Other borrowing (Note 4) 177,000,000.00 177,000,000.00
Less：Long-term loans due within one year (Note (V) 31) 562,906,197.43 347,587,089.91
Total 7,522,315,341.60 3,284,371,642.52
Note 1: As of December 31, 2022, the pledged loan was obtained by the Group with all the rights and benefits pledged
under relevant PPP Projects. The maturity period is from June 20, 2028 to March 26, 2040, the above annual interest rate
of the loan is variable interest rate, ranging from 4.195% to 4.445%.
Note 2: As of December 31, 2022, the mortgage loan was obtained by the Group with the use right of land as the mortgage.
The maturity date is on August, 13, 2026 with the annual interest rate of 1-year LPR rate, which is adjusted each 12 months.
Note 3: At the end of the reporting period, the maturity period of credit loan is from September 27, 2023 to December 1,
2027, and the annual interest rate ranges from 2.7% to 3.7%
Note 4: During 2016, the Group and CDB Development Fund Ltd. (CDBDF) jointly inject capital into Hikvision
Electronics Co., Ltd. ("Hangzhou Electronics"), a subsidiary of the Group. Pursuant to the capital injection agreement,
CDBDF would not participate in senior management personnel such as directors, and it would either take part in decision-
making or make significant influence on Hangzhou Electronics. The Group shall pay a 1.2% annualized return to CDBDF
through dividends or interest payments, and the Group is required to redeem the CDBDF's equity investment in the current
reporting period by installments each year from 2021 to 2024. Therefore, the capital injection by CDBDF is treated as a
long-term loan. As of December 31, 2022, the balance of the loan is 177 million (December 31, 2021: RMB 177 million).
34. Lease Liabilities
Unit: RMB
Item Closing balance Opening balance
Lease liabilities 580,584,582.89 565,978,922.56
Less ：Lease liabilities due within one year (Note (V), 31) 303,328,658.06 248,027,043.35
Total 277,255,924.83 317,951,879.21
310
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
35. Long-term Payables
Unit: RMB
Item Closing balance Opening balance
Purchase goods in installments 9,532,351.64 10,310,558.82
Less: Long-term payables due within one year (Note
1,962,416.97 1,301,227.32
(V), 31)
Total 7,569,934.67 9,009,331.50
36. Provisions
Unit: RMB
Item Closing balance Opening balance
Product quality warranty 205,095,341.94 183,521,316.61
Return payment payable 14,269,885.68 17,154,634.35
Total 219,365,227.62 200,675,950.96
37. Deferred Income
Unit: RMB
Increase in current Decrease in current
Item Opening balance Closing balance Details
reporting period reporting period
Government Subsidies 738,586,458.05 479,021,186.81 284,347,218.74 933,260,426.12 Note
Total 738,586,458.05 479,021,186.81 284,347,218.74 933,260,426.12
As of December 31, 2022, 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 40,717,681.34 - 2,418,872.16 - 38,298,809.18 Related to assets
Base construction
Other special
539,130,528.37 141,138,620.81 58,978,900.31 - 621,290,248.87 Related to assets
subsidies
Other special
158,738,248.34 337,882,566.00 222,949,446.27 - 273,671,368.07 Related to incomes
subsidies
Subtotal 738,586,458.05 479,021,186.81 284,347,218.74 - 933,260,426.12
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.
311
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
38. Other Non-current Liabilities
Unit: RMB
Item Closing balance Opening balance
Subscription for restricted stocks 2,806,169,050.05 511,594,361.52
Contract liabilities 24,939,037.54 22,739,796.75
Total 2,831,108,087.59 534,334,158.27
39. Share Capital
Unit: RMB
Changes for the current reporting period
Bon Transfer
Opening balance New issue of us from Closing balance
Others Subtotal
shares issu Capital
e Reserve
2022
Total shares 9,335,806,114.00 97,402,605.00 - - (2,288,095.00) 95,114,510.00 9,430,920,624.00
2021
Total shares 9,343,417,190.00 - - - (7,611,076.00) (7,611,076.00) 9,335,806,114.00
Note: On January 18, 2022, in accordance with the authorization by the Company's first Extraordinary General Meeting
in 2022, the resolution by the 8th meeting of the 5th session of the Board of Directors and the revised Articles of Association,
the Company was approved to issue 97,402,605 additional RMB ordinary shares to 9,738 scheme participants. The face
value is RMB1 per share, and the issue price is 29.71 per share. Those shares had been completed the share registration
procedures on February 10, 2022. Therefore, the paid-in capital of the Company increased RMB 97,402,605.00, resulting
a capital reserve of RMB 2,796,428,789.55.
In accordance with the authorization by the Company’s second Extraordinary General Meeting in 2018, the resolution by
the 10th meeting of the 5th session of the Board of Directors on May 5, 2022, the resolution of the second Extraordinary
General Meeting in 2022 on October 10, 2021 and the revised Articles of Association, the Company repurchased and
cancelled the granted 2,288,095 restricted RMB treasury shares that have not been unlocked by cash, reducing the share
capital of RMB2,288,095.00 and capital reserve of RMB36,563,758.10. The Company completed the deregistration on
December 21, 2022.
In accordance with the authorization by the Company’s second Extraordinary General Meeting in 2016 ,the authorization
by the second Extraordinary General Meeting in 2018, the resolution by the 20th meeting of the 4th session of the Board of
Directors on December 25, 2020, the resolution of the first Extraordinary General Meeting in 2021 on March 5, 2021 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 by cash, reducing the share capital of RMB7,611,076.00 and capital reserve of
RMB115,032,981.28. The Company completed the deregistration on July 2, 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)
2022
Share premium 4,800,739,839.94 4,532,411,217.65 43,336,115.30 9,289,814,942.29
Other capital 603,330,760.13 696,045,520.27 448,037,787.37 851,338,493.03
312
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
reserves
Total 5,404,070,600.07 5,228,456,737.92 491,373,902.67 10,141,153,435.32
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
Note 1: The increase of RMB2,796,428,789.5 in the share premium in the current fiscal year was due to the 97,402,605
additional RMB ordinary shares issued to 9,738 grantees by Company with approval, please refer to Note (V) 39 for details.
The increase of RMB448,037,787.37 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
RMB1,287,944,640.73 in the share premium in the current fiscal year was due to the Company's subsidiary EZVIZ
Network’s initial public offering of shares, and the shareholding ratio has been diluted from 60% to 48%., please refer to
Note (Ⅶ) 2 for details.
The increase of RMB578,605,328.33 in other capital reserves in the current fiscal year was calculated with equity-settled
share-based payments which were included in the capital reserve. The increase of RMB29,772,104.11 in other capital
reserves in the current fiscal year was due to the effect of deferred income tax caused by the restricted incentive scheme.
The increase of RMB87,668,087.83 in other capital reserves in the current fiscal year was due to changes in the equity of
investee in long-term equity investments accounted by the equity method.
The increase of RMB175,364,843.03 in the share premium during the prior 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 RMB347,727,048.45 in other capital reserves during the prior year was calculated with equity-settled
share-based payments which were included in the capital reserve.
Note 2: The decrease of RMB 36,563,758.10 in share premium during this year was due to the Company’s repurchase of
2,288,095 shares of granted but unvested RMB treasury shares by cash, please refer to Note (V) 39 for details; The decrease
of RMB 6,772,357.20 in share premium during the current reporting period was due to share distributions by equity
settlements to minority shareholders.
The decrease of RMB 115,032,981.28 in share premium during the prior year was due to the Company’s repurchase of
7,611,076 granted but unvested RMB treasury shares by cash, please refer to Note (V) 39 for details; 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.
41. Treasury Shares
Unit: RMB
Increase in the current Decrease in the current
Item Opening Balance Closing balance
reporting period reporting period
2022
Restricted shares
1,023,188,723.04 2,893,831,394.55 644,871,692.70 3,272,148,424.89
incentive scheme
Outstanding shares - 2,043,885,225.35 - 2,043,885,225.35
Total 1,023,188,723.04 4,937,716,619.90 644,871,692.70 5,316,033,650.24
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
Note: During the current reporting period, the increase of RMB 2,893,831,394.55 in treasury shares was due to the
97,402,605 RMB ordinary shares issued to 9,738 grantees at the price of 29.71 per share on January 18, 2022, please refer
to Note (V) 39 for details.
During the current reporting period, the increase of RMB 2,043,885,225.35 in treasury shares was due to the repurchase
313
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
of the Company's shares with the amount of 66,987,835 by means of centralized bidding using its own fund. The
repurchased shares were held in the Company's dedicated securities account for repurchase, and the Company had
completed the cancellation procedures for the above shares at the Shenzhen branch of China Securities Depository and
Clearing Ltd. on January 17, 2023.
During the current reporting period, the decreased amount of RMB 644,871,692.70 in treasury shares was due to the
provision of cash dividend allocated to restricted shares and the repurchase and cancellation of 2,288,095 restricted shares
of the 2018 Restricted Share Incentive Scheme, as well as the vesting and exercising the amount of 33,142,730 shares
under the condition that the second vesting period expired of the 2018 Restricted Shares Scheme.
During the prior year, 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 the 2016 and
2018 Restricted Share Incentive Scheme.
.
314
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
2022
Other incomes
that may be
reclassified (77,184,125.29) 88,691,088.90 - - 34,596,966.48 54,094,122.42 (42,587,158.81)
subsequently to
profit or loss
Included: Effect
on conversion of
financial
(77,184,125.29) 88,691,088.90 - - 34,596,966.48 54,094,122.42 (42,587,158.81)
statements
denominated in
foreign currencies
Other
comprehensive (77,184,125.29) 88,691,088.90 - - 34,596,966.48 54,094,122.42 (42,587,158.81)
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
(84,993,926.94) 4,631,122.68 - - 7,809,801.65 (3,178,678.97) (77,184,125.29)
statements
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
43. Surplus Reserves
Unit: RMB
Increase in the Decrease in the
current current
Item Opening balance Closing balance
reporting reporting
period period
2022
Statutory surplus reserves 4,672,505,348.00 42,954,964.00 - 4,715,460,312.00
Total 4,672,505,348.00 42,954,964.00 - 4,715,460,312.00
2021
Statutory surplus reserves 4,672,505,348.00 - - 4,672,505,348.00
Total 4,672,505,348.00 - - 4,672,505,348.00
315
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 of the parent company, and
when the accumulated amount of the statutory surplus reserve fund reaches more than 50% of the registered capital, it may
not be withdrawn. The Company has withdrawn a statutory surplus reserve of RMB42,954,964.00 during the reporting
period. As for December 31, 2022, the accumulative statutory surplus reserve has reached 50% of the Company's share
capital. 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 2022 2021
Retained Earnings at the close of the prior reporting period 45,148,877,451.52 35,806,523,826.37
Add: Net profit attributable to the parent company for the
12,837,342,061.07 16,800,411,032.05
current reporting period
Less: withdraw the statutory surplus reserve 42,954,964.00 -
Dividends payable on common shares (Note) 8,483,023,562.10 7,458,057,406.90
Retained earnings at the end of the current reporting
49,460,240,986.49 45,148,877,451.52
period
Note：According to the resolution of 2021 Annual General Meeting dated on May 13, 2022, 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 9 (tax inclusive), the rest of retained earnings were all carried forward for future distributions.
45. Revenue/cost of sales and services
45.1 Revenue and cost of sales and services
Unit: RMB
2022 2021
Item
Revenue Cost Revenue Cost
Major business 82,542,204,243.66 47,602,859,697.82 80,803,165,490.40 44,894,713,863.87
Other business 624,117,437.48 393,394,768.50 616,888,048.87 434,686,468.78
Total 83,166,321,681.14 47,996,254,466.32 81,420,053,539.27 45,329,400,332.65
45.2 Revenue (By product or business type)
Unit: RMB
Item 2022 2021
Products and services for main business (Note) 65,873,570,961.21 65,145,683,074.74
Constructions of main business 2,222,876,059.14 4,003,746,727.88
Innovative businesses 15,069,874,660.79 12,270,623,736.65
Including: Smart home business 4,077,290,933.03 3,948,427,896.29
Robotic business 3,916,176,952.59 2,761,636,666.33
Thermal imaging business 2,790,033,744.03 2,214,127,005.65
Auto electronics business 1,905,289,927.53 1,431,895,295.48
Storage business 1,616,267,518.08 1,384,585,038.78
Other innovative businesses 764,815,585.53 529,951,834.12
Total 83,166,321,681.14 81,420,053,539.27
Note: Main business refers to the business parts other than the innovative businesses.
45.3 Major business (by business type)
Unit: RMB
Item 2022
316
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Revenue Cost
Product sales 78,971,234,689.44 45,422,471,442.42
Construction contract 2,222,876,059.14 1,672,876,250.28
Provide services 1,348,093,495.08 507,512,005.12
Total 82,542,204,243.66 47,602,859,697.82
45.4 Major business (by the time of revenue recognition)
Unit: RMB
2022
Item
Revenue Cost
Satisfied at a point in time 78,971,234,689.44 45,422,471,442.42
Satisfied over time 3,570,969,554.22 2,180,388,255.40
Total 82,542,204,243.66 47,602,859,697.82
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
317
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
period. The customers of the Group pay the Group for the maintenance services by milestone payments in accordance with
the contract. For the portion where the Group has obtained an unconditional right to the payment, it will be recognized as
accounts receivable, while the remaining portion will be recognized as contract assets; where the contract price received
or receivable by the Group exceeds the performance obligation completed to date, the excess portion will be recognized
as contract liabilities. The Group presents contract assets and contract liabilities under the same contract on a net basis.
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.
318
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
46. Business Taxes and Surcharges
Unit: RMB
Items 2022 2021
City construction and maintenance tax 261,890,379.68 271,005,144.60
Education surcharges 114,135,419.82 118,219,501.03
Local education surcharges 76,090,687.28 78,812,578.90
Stamp duty 69,797,920.71 48,719,842.95
Real estate tax 50,840,111.92 38,218,345.28
Tax on use of land 7,492,257.10 5,747,583.10
Vehicle and vessel tax 144,621.51 156,562.97
Others 1,505,298.49 100,448.69
Total 581,896,696.51 560,980,007.52
47. Selling Expenses
Unit: RMB
Items 2022 2021
Payroll 6,373,360,098.93 5,548,436,481.61
Marketing Expenses 1,327,140,202.21 1,351,499,107.82
Shipping, transportation, and vehicle expense 397,419,186.30 300,539,153.45
Travelling expenses 392,884,475.16 272,916,031.74
Office expenses 265,238,884.68 206,708,742.81
Business hospitality expenses 267,086,429.99 251,571,190.72
Rental expenses 72,212,549.78 66,296,932.66
Professional Intermediary expenses 202,590,077.82 192,080,083.00
Depreciation and amortization expenses 262,935,078.67 208,955,480.02
Others 212,590,352.69 187,440,464.19
Total 9,773,457,336.23 8,586,443,668.02
48. Administrative Expenses
Unit: RMB
Items 2022 2021
Payroll 1,621,419,524.98 1,320,787,327.54
Office expenses 295,789,889.76 228,196,179.10
Depreciation and amortization expenses 237,858,482.96 194,491,716.47
Professional Intermediary expenses 96,942,652.20 95,361,861.47
Travelling expenses 36,736,435.95 39,132,306.65
Shipping, transportation, utility expense 62,093,258.21 48,723,035.15
Rental expenses 5,262,993.41 10,375,238.03
Business hospitality expenses 8,369,231.08 11,296,053.97
Others 277,640,903.45 183,886,745.58
Total 2,642,113,372.00 2,132,250,463.96
49. R&D Expenses
Unit: RMB
Items 2022 2021
Payroll 7,813,245,802.96 6,809,382,000.63
Consumables and service fees 786,747,111.47 556,631,898.14
Depreciation and amortization expenses 318,021,624.81 299,364,107.17
Office expenses 251,800,832.86 167,582,498.45
Intermediate testing fees 264,433,773.09 144,910,134.48
319
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Travelling expenses 132,053,314.05 108,265,517.40
New product design fees 169,736,403.69 106,964,625.53
Rental expenses 8,122,851.03 5,329,594.73
Others 70,282,546.59 53,214,724.86
Total 9,814,444,260.55 8,251,645,101.39
50. Financial Expenses
Unit: RMB
Items 2022 2021
Interest expenses 296,404,671.30 231,787,858.92
Interest expense on lease liabilities 20,907,764.05 17,607,723.12
Less: Interest income 921,912,411.61 885,545,988.62
Foreign exchange losses (gains) (428,082,371.67) 354,146,744.37
Less: Capitalized specific loan interests and foreign
(2,660,111.75) (124,649,345.63)
exchange differences on specific loan
Others 39,620,702.86 24,011,058.74
Total (990,401,533.32) (133,343,257.84)
51. Other Income
Unit: RMB
Items 2022 2021
VAT refund 1,753,740,330.32 2,054,594,872.37
Special subsidies 707,753,385.13 558,717,940.38
Tax reduction 17,631,644.13 14,829,396.58
Value-added tax deduction 3,342,496.39 418,611.13
Total 2,482,467,855.97 2,628,560,820.46
52. Investment Income
Unit: RMB
Items 2022 2021
Long-term equity investment gains based on the equity method 106,498,595.01 114,137,281.18
Investment income from other non-current financial assets during
51,892,209.92 115,644,801.97
the holding period
Investment income from disposal of non-current financial assets 1,260,000.00 -
Investment income from disposal of held-for-trading financial assets 55,194,649.80 113,608,106.10
Investment income (loss) from disposal of subsidiaries and other
3,550,851.71 (169,184,641.43)
business units
Total 218,396,306.44 174,205,547.82
53. Gains (Losses) from Changes in Fair Values
Unit: RMB
Sources of gains (losses) from changes in fair values 2022 2021
Held-for-trading financial assets (21,549,304.93) 11,711,591.07
Including: gains on the changes in fair value of derivative financial
instruments
(21,549,304.93) 11,711,591.07
320
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Gains (Losses) from changes in fair value of other non-current
financial assets
(69,793,177.28) (53,214,895.05)
Held-for-trading financial liabilities (64,225,038.68) 3,303,279.51
Including: gains (losses) on the changes in fair value of derivative
financial instruments
(64,225,038.68) 3,303,279.51
Total (155,567,520.89) (38,200,024.47)
54. Credit Impairment Gains (Losses)
Unit: RMB
Items 2022 2021
Credit impairment gains (losses) of accounts receivable (532,337,205.31) (566,389,266.23)
Credit impairment reverses gains (losses) of other receivables (4,552,362.71) 25,231,443.14
Credit impairment gains (losses) of long-term receivables (48,271,667.43) (28,600,342.41)
Total (585,161,235.45) (569,758,165.50)
55. Impairment Gains (Losses) of Assets
Unit: RMB
Items 2022 2021
Gains (losses) on inventory devaluation (473,766,927.68) (434,614,231.94)
Gains (losses) on impairment of intangible assets (42,034,063.49) -
Contract assets impairment Gains (losses) 7,347,162.35 (13,075,174.66)
Total (508,453,828.82) (447,689,406.60)
56. Non-operating Income
Unit: RMB
The amount booked into current
Items 2022 2021 period non-recurring profits and
looses
Fines and confiscations 65,172,834.46 59,586,645.03 65,172,834.46
Government subsidies 884,540.66 2,653,472.98 884,540.66
Income from business combination of
- 1,163,932.96 -
enterprises not under the same control
Others 21,308,610.36 12,340,318.32 21,308,610.36
Total 87,365,985.48 75,744,369.29 87,365,985.48
Government subsidies included in current profit and loss:
Unit: RMB
Item 2022 2021 Related to assets/Related to incomes
Tax reduction 2,080.77 341,525.58 Related to incomes
Other subsidies 882,459.89 2,311,947.40 Related to incomes
Total 884,540.66 2,653,472.98
321
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
57. Non-operating Expenses
Unit: RMB
The amount booked into current period
Items 2022 2021
non-recurring profits and losses
Losses on disposal of non-current assets 1,038,677.10 8,156,134.63 1,038,677.10
Local water conservancy construction fund 2,055,980.46 1,347,569.92 2,055,980.46
Donation expenses 1,575,092.28 51,489,848.19 1,575,092.28
Others 10,404,363.27 20,560,553.01 10,404,363.27
Total 15,074,113.11 81,554,105.75 15,074,113.11
58. Income Tax Expenses
58.1 Details of income tax expenses
Unit: RMB
Items 2022 2021
Income tax for the current reporting period 1,829,079,291.07 1,912,421,635.04
Deferred income tax expenses (241,980,999.03) (385,068,762.95)
Differences in filing and payment of income tax in previous
(289,116,386.50) (569,862,219.93)
reporting years
Total 1,297,981,905.54 957,490,652.16
58.2 Reconciliation of income tax expenses to the accounting profit
Unit: RMB
Item 2022 2021
Total profit 14,854,951,627.47 18,468,211,862.63
Income tax expenses calculated at applicable tax rates of 15% 2,228,242,744.12 2,770,231,779.39
Impact of non-deductible costs, expenses and losses 53,248,187.90 13,462,549.85
Tax effect of non-taxable income (2,963,187.15) (20,994,120.30)
Impact of deductible temporary differences or deductible losses
for which no deferred income tax assets is recognized for the 105,389,667.58 126,889,022.94
current period
Impact of using deductible temporary differences or deductible
losses for which no deferred income tax assets was recognized for (127,946,065.51) (124,304,097.81)
the prior periods
Differences of income tax annual filing (Note) (289,116,386.50) (569,862,219.93)
Impact by different tax rates applicable to different subsidiaries 163,817,215.68 117,262,283.11
Impact of additional deduction of R&D expenses (920,031,766.64) (853,993,809.22)
Others 87,341,496.06 (501,200,735.87)
Income tax expenses 1,297,981,905.54 957,490,652.16
59. Notes to Consolidated Cash Flow Statement Items
59.1 Other cash receipts relating to operating activities
Unit: RMB
Items 2022 2021
Interest income 769,911,170.27 747,643,940.57
322
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Items 2022 2021
Government subsidies 903,309,813.09 1,108,737,358.14
Withdrawal of restricted currency funds 334,647,085.86 870,118,675.99
Others 94,532,468.51 71,926,963.35
Total 2,102,400,537.73 2,798,426,938.05
59.2 Other cash payments relating to operating activities
Unit: RMB
Item 2022 2021
Advertising and Selling services 1,094,845,870.81 1,209,668,231.40
Office expenses and business expenses 1,357,207,317.97 1,244,593,584.01
Shipping and transportation expense 459,512,444.51 380,408,948.15
R&D expense 1,276,697,213.62 702,435,895.72
Travelling expense 561,674,225.16 420,313,855.79
Outsourcing service fees, fees for hiring intermediaries, etc. 473,912,644.83 406,476,311.46
Rental expense 85,598,394.22 82,001,765.42
Deposits to restricted monetary funds 256,100,102.65 553,153,948.19
Others 415,552,270.26 298,285,736.64
Total 5,981,100,484.03 5,297,338,276.78
59.3 Other cash receipts relating to investing activities
Unit: RMB
Item 2022 2021
Receipts of financing lease payments 47,587,599.27 -
Net cash receipts from acquiring subsidiaries and other
182,816.96 -
business units
Total 47,770,416.23 -
59.4 Other cash payments related to investing activities
Unit: RMB
Item 2022 2021
Cash payments for investment intention funds - 4,000,000.00
Net cash payment for disposal of subsidiaries and other
- 6,196,658.79
business units
Total - 10,196,658.79
59.5 Other cash payments relating to financing activities
Unit: RMB
Item 2022 2021
Repurchase of outstanding shares 2,043,885,225.35 -
Repurchase of restricted shares 38,851,853.10 122,644,057.28
Repayment of lease liabilities 228,009,188.10 190,296,810.23
Total 2,310,746,266.55 312,940,867.51
323
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
60. Supplementary Information about Cash Flow Statement
60.1 Supplementary information about cash flow statement
Unit: RMB
Supplementary information 2022 2021
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 13,556,969,721.93 17,510,721,210.47
Add: Impairment of assets 508,453,828.82 447,689,406.60
Provision for credit losses 585,161,235.45 569,758,165.50
Fixed assets depreciation 928,114,412.10 685,029,204.28
Amortization of intangible assets 79,676,213.21 140,708,108.57
Long-term deferred expenses amortization 81,486,526.31 66,502,221.67
Right-of-use assets depreciation 246,373,656.24 198,362,376.40
Gains (losses) on disposal of fixed assets, intangible assets and
17,578,905.00 (34,225,603.81)
other long-term assets
Fixed asset scrapping losses 1,038,677.10 8,156,134.63
Losses from changes in fair value 155,567,520.89 38,200,024.47
Financial expenses 165,311,194.01 302,351,912.74
Investment income (218,396,306.44) (174,205,547.82)
Share-based payment based on equity
620,309,681.65 369,329,250.11
settlement
Decrease (increase) of restricted funds (78,546,983.21) 316,964,727.80
Increase in deferred income tax assets (258,768,913.80) (390,473,424.46)
Increase in deferred income tax liabilities 20,971,335.55 335,327.28
Increase in inventories (1,510,338,683.95) (5,936,053,632.80)
Decrease (increase) of operating other non-current assets 560,599,677.46 (497,739,824.36)
Decrease (increase) in operating receivables (4,921,967,123.64) (5,478,863,810.65)
Increase (decrease) in operating payables (570,133,160.37) 4,019,434,922.97
Increase in deferred income 194,673,968.07 547,707,470.36
Others - (1,163,932.96)
Net cash flows from operating activities 10,164,135,382.38 12,708,524,686.99
2. Significant investing and financing activities not involving cash
receipts and payments:
3. Net changes in cash and cash equivalents:
Closing balance of cash 39,815,390,514.57 34,603,944,429.20
Less: Opening balance of cash 34,603,944,429.20 35,024,837,878.31
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net Increase (decrease) in cash and cash equivalents 5,211,446,085.37 (420,893,449.11)
324
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
60.2 Net cash paid for obtaining subsidiaries during the current year
Unit: RMB
Amounts
Cash or cash equivalents paid for the business combination in this year -
Including: Zhejiang Zhiyuan Fire -
Less: Cash and cash equivalents held by the Company on the acquisition date (182,816.96)
Including: Zhejiang Zhiyuan Fire 182,816.96
Net cash paid for obtaining the subsidiary (182,816.96)
Booked into: Other cash receipts relating to investing activities 182,816.96
60.3 Constituents of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
Cash 39,815,390,514.57 34,603,944,429.20
Including: Cash on hand 1,210,065.16 1,851,273.53
Bank deposit for payment at any time 39,607,767,094.21 34,573,786,777.26
Other monetary capital for payment at any time 206,413,355.20 28,306,378.41
Cash equivalents - -
Closing balance of cash and cash equivalents 39,815,390,514.57 34,603,944,429.20
Among the total balance of RMB402,886,840.57 of the other monetary fund(s) at the end of the reporting period
(December 31, 2021: RMB146,232,880.57 ), RMB196,473,485.37 are various guarantee deposits and other restricted
funds, etc. (December 31, 2021: RMB117,926,502.16), 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 196,473,485.37 Various guarantee deposits and other restricted funds
Notes receivable 1,241,880,022.19 Endorsed to suppliers and discounted to banks
Receivables for financing 10,312.23 Pledged for issuing bank acceptance bills
Accounts receivable 344,585,345.01 Pledged for long-term borrowings
Contract assets 120,072,855.46 Pledged for long-term borrowings
Fixed assets 81,627,645.88 Fixed assets leased out under operating leases
Intangible assets 39,314,886.51 Pledged and mortgage for long-term borrowings
Other non-current assets 1,607,546,382.61 Pledge for long-term debts
Total 3,631,510,935.26
325
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
62. Monetary Items of 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 365,876,681.09 6.9646 2,548,184,733.10
EUR 100,728,995.12 7.4229 747,701,257.88
GBP 8,805,385.21 8.3941 73,913,283.96
AED 13,418,901.49 1.8966 25,450,288.57
HKD 22,066,243.26 0.8933 19,711,775.10
PLN 8,791,237.76 1.5878 13,958,727.32
Accounts receivable
Including: EUR 296,862,915.28 7.4229 2,203,583,733.83
USD 99,615,885.86 6.9646 693,784,798.66
HKD 60,473,017.96 0.8933 54,020,546.94
Short-term borrowings
Including: EUR 150,144,922.22 7.4229 1,114,510,743.16
USD 30,854,039.57 6.9646 214,886,044.02
Accounts payable
Including: USD 63,196,308.20 6.9646 440,137,008.09
HKD 638,003,666.55 0.8933 569,928,675.33
EUR 319,432.81 7.4229 2,371,117.81
Long-term borrowings
Including: EUR 142,000,000.00 7.4229 1,054,051,800.00
Non-current liabilities due within
one year - Long-term borrowings
Including: EUR 4,035,688.89 7.4229 29,956,515.06
63. Government Subsidies
63.1 By categories
Unit: RMB
Amount booked in current profit
Category Amount Financial Report Items
and loss
VAT refund 1,753,740,330.32 Other Income 1,753,740,330.32
Special subsidies 1,641,896,271.14
Deferred income / Other
Including: other special subsidies 1,601,178,589.80 income/ Non-operating 706,216,972.86
income
Chongqing Deferred income / Other
Manufacturing Base 40,717,681.34 2,418,872.16
income
construction subsidies
Other income/ Non-operating
Tax Refund/Reduction 20,976,221.29 20,976,221.29
income
Total 3,416,612,822.75 2,483,352,396.63
63.2 There was no refund of government subsidies during the current reporting period.
326
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
Zhejiang Zhiyuan Fire
On December 15, 2021, the Company's subsidiary - Hikfire Technology signed an equity purchase agreement with the
original shareholders of Zhejiang Zhiyuan Fire Safety Engineering Ltd. The agreement stipulated that Hikvision Fire
Technology would acquire 100% of the equity of Zhejiang Zhiyuan Fire Safety Engineering Ltd. for RMB 15.75 million.
On February 28, 2022, the two parties completed the equity transfer of Zhejiang Zhiyuan Fire Safety Engineering Ltd.
Therefore, the Group took February 28, 2022 as the acquisition date and the Group incorporated the Subject Companies
into consolidation scope from the acquisition date. As of December 31, 2022, the Company has completed the equity
transfer payment of RMB 4 million.
Unit: RMB
Income of Net profit of
Equity acquiree from
Time of acquiree from
Name of the Equity acquisitio Equity Basis for
acquisition data
equity acquisition data
acquiree acquisition cost n ratio acquisition Date of acquisition determining to the end of
acquisition method the acquisition to the end of the
(%) the reporting reporting period
date
period
Equity
Zhejiang delivery date
Zhiyuan Fire
Cash for obtaining 132,562,586.6
Safety February 2022 15,750,000.00 100.00% February 28, 2022 1,566,575.13
Engineering Payments control of the 3
Ltd. purchased
party
1.2 Cost of business combination and goodwill
Unit: RMB
Cost of business combination Zhejiang Zhiyuan Fire
- Cash 4,000,000.00
- Liability(other account payable ) 11,750,000.00
Total cost of business combination 15,750,000.00
Less: The fair value share of identifiable net assets obtained 7,550,746.23
Goodwill 8,199,253.77
1.3 Acquiree’s book value of assets and liabilities at the date of acquisition
Unit: RMB
Zhejiang Zhiyuan Fire (Note)
Book value on the date of acquisition Fair value on the date of acquisition
Assets:
Cash and bank balances 182,816.96 182,816.96
Notes receivable 990,821.94 990,821.94
Accounts receivable 9,894,353.90 9,894,353.90
Prepayments 753,476.00 753,476.00
Other receivables 1,684,461.20 1,684,461.20
Inventories 84,186,707.41 84,186,707.41
327
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Zhejiang Zhiyuan Fire (Note)
Book value on the date of acquisition Fair value on the date of acquisition
Contract assets 1,562,030.46 1,562,030.46
Other current assets 31,662.38 31,662.38
Liabilities:
Accounts payable 10,731,655.87 10,731,655.87
Contract liabilities 71,900,823.14 71,900,823.14
Tax payable 378,277.85 378,277.85
Other payables 7,734,005.22 7,734,005.22
Short-term borrowings 990,821.94 990,821.94
Net assets: 7,550,746.23 7,550,746.23
Less: Minority equity - -
Net assets acquired 7,550,746.23 7,550,746.23
Note: The management of the Group believes that the fair value of identifiable assets and liabilities of Zhejiang Zhiyuan
Fire is close to their book value. Therefore, the fair value of relevant identifiable assets and liabilities is recognized
based on their book value.
2. Changes of Consolidation Scope due to Other Causes
The subsidiaries newly established and incorporated in the consolidation scope during the current reporting
period as follows:
Company Name Time of establishment Registered capital
Shijiazhuang Sensortech Intelligent
February 2022 RMB 10 thousand
Technology Co.,Ltd.
Hikvision Adriatic doo Beograd February 2022 RSD 13 million
Hikvision Technology Pte. Ltd. March 2022 USD 300 thousand
Hikrobot Korea Limited June 2022 KRW 485 million
Hangzhou Xingrong Information
December 2022 RMB 5 million
Technology Ltd. (Note)
Microimage Europe B.V. (Note) December 2022 USD 800 thousand
Note: As of the end of this year, Hangzhou Xingrong Information Technology Ltd. and Microimage Europe B.V. have not
yet completed their paid-in capital.
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
Hangzhou Haikang Zhicheng Investment and Development
October 2022
Ltd.
Hangzhou Haikang Ximu Intelligent Technology Ltd. December 2022
Microwave Solutions Limited December 2022
328
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
VII. Interest in Other Entities
1. Equity in Subsidiaries
(1) Composition of the corporate group
Location of Place of Acquisition
Name Nature of business
operation registration Method
System integration,
Hangzhou Hikvision System Technology Hangzhou,
Hangzhou Technology Establishment
Ltd. Zhejiang
development
Hangzhou Hikvision Technology Co., Hangzhou,
Hangzhou Manufacture Establishment
Ltd. Zhejiang
Hangzhou, Technology
Hangzhou EZVIZ Network Co., Ltd. Hangzhou Establishment
Zhejiang development
Hangzhou, Technology
Hangzhou EZVIZ Software Ltd. Hangzhou Establishment
Zhejiang development
Hangzhou Hikrobot Technology Co., Hangzhou, Technology
Hangzhou Establishment
Ltd.(Note (VII) 2) Zhejiang development
Hangzhou, Technology
Hangzhou Hikrobot Intelligence Ltd. Hangzhou Establishment
Zhejiang development
Note: Hangzhou Hikrobot Technology Ltd. completed the shareholding system reform in 2022 and changed its name to
Hangzhou Hikrobot Technology Co., Ltd.
2. Changes in the share of owners' equity in subsidiaries and still controls the transactions of subsidiaries.
(1) Description of the change in the share of owners' equity in subsidiaries
Ezviz Network
On December 22, 2022, the Ezviz Network, a subsidiary of the Group, issued 112.5 million shares to the public for
the first time at an issue price of RMB 28.77 per share and raised a total of RMB 3,236,625,000.00. The net amount
of funds raised after deducting issuance expenses is RMB 3,121,365,252.83 (excluding VAT income tax related to
issue expenses). The company's shareholding in Ezviz Network has been diluted from 60% to 48%, and the Group's
control over the Ezviz Network has not changed.
(2) The impact of the transaction on minority equity and owners' equity attributable to owner of the Company
Name Hangzhou EZVIZ Network Co., Ltd.
Consideration for disposal -
Less: Share of net assets of subsidiaries calculated according to the
1,287,944,640.73
proportion of equity disposed
Adjustment of capital reserves (1,287,944,640.73)
3. Equity in Joint Ventures or Associates
(1) Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
Closing balance / Amount for Opening balance / Amount for
2022 2021
Associates：
The aggregate carrying amount of investments in associates 352,286,233.16 235,962,431.82
The aggregate amount of the following items calculated based on the - -
Company’s equity share percentage of the associates
- Net income (loss) (11,985,343.35) 30,316,393.05
- Other comprehensive income - -
--Net income (loss) and total comprehensive income (loss) (11,985,343.35) 30,316,393.05
329
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Closing balance / Amount for Opening balance / Amount for
2022 2021
Joint Ventures:
Total investment book value 899,747,280.25 746,203,114.63
The sum of the following items calculated according to the
shareholding ratio
- Net income 118,483,938.36 83,820,888.13
- Other comprehensive income - -
- Net income (loss) and total comprehensive income 118,483,938.36 83,820,888.13
The Group uses the equity method to account for the aforementioned associates and joint ventures.
(2) There are no significant restrictions on the ability of the joint ventures or associates to transfer funds to the Group.
(3) No excess losses were incurred by the joint ventures or associates.
(4) Unrecognized commitments relating to investments in joint ventures
Unit：000 RMB
Joint Venture Capital Commitment (Note)
Shenzhen Haishi Urban Service Operation Co., Ltd. 10,500.00
Guangxi Haishi Urban Operation Management Co., Ltd. 2,440.00
Note: The above capital commitments are the capital amounts that the Group has subscribed but not paid in to the above
joint ventures.
(5) The Group has no contingent liabilities related to investments in joint ventures or associates.
330
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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, part of the other non-
current assets, borrowings, notes payable, accounts payable, other payables, part of the other current liabilities, long-term
payables, part of other non-current 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
Items Opening balance of the current year
reporting period
Financial assets：
Measured at fair value through current profit and loss
Held –for-trading financial assets 12,807,438.36 34,320,010.83
Other non-current financial assets 423,893,239.94 438,724,172.22
Measured at fair value through other comprehensive
income
Receivables for financing 1,484,218,258.74 1,316,035,122.06
Measured at amortized cost
Cash and bank balances 40,011,863,999.94 34,721,870,931.36
Notes receivable 2,519,988,159.23 1,522,760,905.30
Accounts receivable 29,906,294,410.40 26,174,773,100.42
Other receivables 516,503,485.58 359,620,445.88
Other non-current assets 2,181,057.96 -
Long-term receivables (including those due within one year) 1,537,550,308.57 1,589,028,382.11
Unit: RMB
Closing balance of the current
Items Opening balance of the current year
reporting period
Financial liabilities
Measured at fair value through current profit and loss
Held-for-trading financial liabilities 68,299,685.57 4,062,317.57
Measured at amortized cost
Short-term borrowings 3,343,071,972.89 4,074,962,469.97
Notes payable 1,207,756,963.94 1,339,998,383.34
Accounts payable 16,025,563,802.99 15,889,694,981.12
Other payables 3,203,308,686.31 1,830,626,583.03
Other current liabilities 465,979,374.84 511,611,642.53
Long-term borrowings (including those due within one year) 8,085,221,539.03 3,631,958,732.43
Long-term payables (including those due within one year) 9,532,351.64 10,310,558.82
Other non-current liabilities 2,806,169,050.05 511,594,361.52
331
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 31, 2022, 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 3,241,969,531.76 2,310,527,721.21 655,023,052.11 1,993,012,472.17
EUR 2,951,284,991.71 2,510,521,255.35 2,200,890,176.03 1,521,742,991.23
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 to
mitigate the foreign exchange risk exposure.
Sensitivity analysis on exchange rate risk
The sensitivity analysis of the Group's foreign exchange risk includes only monetary items denominated in foreign
currencies and does not consider the impact of the purchased derivative financial instruments.
332
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
With other variables unchanged, the exchange rate might float within a reasonable range, and has the following before-
tax effect on profit or loss and shareholders’ equity for the current period:
Unit: RMB
2022 2021
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 129,347,323.98 129,347,323.98 15,875,762.45 15,875,762.45
5% depreciation of USD against functional currency (129,347,323.98 (129,347,323.98) (15,875,762.45) (15,875,762.45)
5% appreciation of EUR against functional currency 37,519,740.78) 37,519,740.78 49,438,913.21 49,438,913.21
5% depreciation of EUR against functional currency (37,519,740.78) (37,519,740.78) (49,438,913.21) (49,438,913.21)
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 (please refer to Note (V) 33) and bank deposits bearing floating
interest rate. The Group's risks of changes in the fair value of financial instruments due to changes in interest rates are
related to fixed-rate bank borrowings (please refer to Note (V) 23 and Note (V) 33) and fixed-rate bank deposits.
The Group determines the relative proportion of fixed interest rate contracts and floating interest rate contracts based on
the prevailing market environment. On December 31, 2022, the Group’s total long-term and short-term interest-bearing
debts bearing fixed interest rates amounted to RMB 9,106,539,532.31 (December 31, 2021: RMB 5,863,848,513.19) (Note
(V) 23 and Note (V) 33). The total amount of long-term and short-term interest-bearing debts bearing floating interest
rates is RMB 2,262,287,174.62 (December 31, 2021: RMB 1,843,072,689.21) (Note (V) 33).
The Group expects that the exposure to cash flow risk arising from floating-rate bank deposits and the exposure to changes
in fair value arising from fixed-rate bank deposits are not significant.
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 changes
of the amount due to changes in price of financial instruments as a result of change in valuation assumptions is limited,
accordingly, no sensitivity analysis is conducted.
2.2 Credit Risk
As of December 31, 2022, 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
financing (Note (V) 5), other receivables (Note (V) 7), contract assets (Note (V) 9 and Note (V) 22), 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
333
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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.
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 31, 2022
Within one year 1-5 years More than 5 years Total
Non-derivative financial liabilities
Short-term borrowings 3,381,341,036.05 - - 3,381,341,036.05
Notes payable 1,207,756,963.94 - - 1,207,756,963.94
Accounts payable 16,025,563,802.99 - - 16,025,563,802.99
Other payables 3,203,308,686.31 - - 3,203,308,686.31
334
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
December 31, 2022
Within one year 1-5 years More than 5 years Total
Other current liabilities 465,979,374.84 - - 465,979,374.84
Other non-current liabilities - 2,806,169,050.05 2,806,169,050.05
Long-term borrowings (including
666,754,479.49 6,971,138,869.43 1,030,617,594.40 8,668,510,943.32
those due within one year)
Long-term payables (including
2,326,599.37 8,196,420.77 - 10,523,020.14
those due within one year)
Derivative financial instruments
Forward foreign exchange contracts
- settled in the gross amount
- Cash inflow 2,319,267,329.02 - - 2,319,267,329.02
- Cash outflow 2,374,759,576.30 - - 2,374,759,576.30
- Net cash inflow 55,492,247.28 - - 55,492,247.28
335
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
- 1,428,726,011.53 423,893,239.94 1,852,619,251.47
measurement
(I) Financial assets measured at fair
- 12,807,438.36 423,893,239.94 436,700,678.30
value through profit and loss
1. Held-for-trading Financial
- 12,807,438.36 - 12,807,438.36
Assets
- Derivative financial
- 12,807,438.36 - 12,807,438.36
assets
2. Other non-current
- - 423,893,239.94 423,893,239.94
financial assets
(II) Receivables for financing - 1,484,218,258.74 - 1,484,218,258.74
Total assets measured continuously
- 1,497,025,697.10 423,893,239.94 1,920,918,937.04
at fair value
(III) Financial liabilities measured at
- 68,299,685.57 - 68,299,685.57
fair value through profit and loss
1. Held-for-trading Financial
- 68,299,685.57 - 68,299,685.57
Liabilities
- Derivative financial
- 68,299,685.57 - 68,299,685.57
liabilities
Total liabilities measured
- 68,299,685.57 - 68,299,685.57
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 31, Estimation technique Inputs
2022
Forward exchange rate
Forward Foreign Exchange Contracts Discounted cash flow
12,807,438.36 Discounted rate that reflects the credit risk
(Assets) approach
of counterparty
Forward exchange rate
Forward Foreign Exchange Contracts Discounted cash flow
(68,299,685.57) Discounted rate that reflects the credit risk
(Liabilities) approach
of counterparty
Discounted cash flow Discounted rate that reflects the credit risk
Receivables for financing 1,484,218,258.74
approach of counterparty
3. The Third Level of Fair Value Measurement Item, the Valuation Techniques and Important Parameters Used
Unit: RMB
Fair value on December
Items Valuation techniques Inputs
31, 2022
Comparable public companies’ PB
Other non-current financial assets-- Market approach (price/book value) ratio within the same
Investment in equity instruments of 423,893,239.94
/Income approach industry
private 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 1, 2022 438,724,172.22
Increase in the current reporting period 83,962,245.00
Decrease in the current reporting period 29,000,000.00
Changes in fair value booked into profit and loss during the current reporting period (69,793,177.28)
336
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Book value on December 31, 2022 423,893,239.94
The total amount included in profit or loss in 2022 includes unrealized losses of RMB69,793,177.28 (2021:
RMB53,214,895.05) 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 RMB51,892,209.92
(2021: RMB115,644,801.97).
5. Items Measured at Continuous Fair Value. There Were No Transfers between Levels for the Current
Reporting Period. There was No Estimation Technique Change for the Current Reporting Period
6. Fair Values of Financial Assets and Financial Liabilities that not Measured at Fair Value
The Group’s management team believes that financial assets and financial liabilities measured at amortized cost mainly
include 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, part of other
current liabilities, non-current liabilities due within one year, long-term borrowings, long-term payables and part of other
non-current liabilities, etc., carrying value of which approximates to its fair value.
337
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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
Hangzhou, Industrial
Technology HIK Group Co., RMB 660 million 36.09 36.09
Zhejiang investment
Ltd. (CETHIK)
The ultimate controlling party of the Company is CETC.
2. Information on the Subsidiaries of the Company
For details of the main 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 Sensortech Intelligent Technology Ltd. (Wuhu Sensortech) and its subsidiaries
Associated company
(Note1)
Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries (Note1) Associated company
Zhiguang Hailian Big Data Technology Ltd. and its subsidiaries (Note1) Associated company
Jiaxin Haishi JiaAn Zhicheng Technology Ltd. (Note1) Associated company
Qinghai Qingtang Big Data Ltd. (Note1) Associated company
Sanmenxia Xiaoyun Vision Technology Ltd. (Note1) Associated company
Zhejiang Hailai Yunzhi Technology Ltd. (Note1) (Note3)
Guangxi Haishi City Operation Management Ltd. and its subsidiaries (Note2) Joint venture
Shenzhen Haishi Urban Service Operation Ltd. and its subsidiaries (Note2) Joint venture
Xuzhou Kangbo City Operation Management Service Ltd. (Note2) Joint venture
Yunnan Yinghai Parking Service Ltd. (Note2) Joint venture
Zhejiang City Digital Technology Ltd. (Note2) Joint venture
Zhejiang Haishi Huayue Digital Technology Ltd. (Note2) Joint venture
Note 1: Those companies are collectively referred to as "associated companies" in the following disclosures of related
party transactions, receivables from related parties, and payable from related parties.
Note 2: hose companies are collectively referred to as "joint ventures" in the following disclosures of related party
transactions, receivables from related parties, and payable from related parties.
Note 3: During the period from January 1, 2021 to June 30, 2021, Zhejiang Hailai (formerly known as: Daishan Hailai
Yunzhi Technology Ltd.) was a joint venture of the Company. On June 30, 2021, the Company included Zhejiang Hailai
in the scope of the consolidated financial statements, see Note (VI) 1 for details. During the period from January 1, 2021
to June 30, 2021, this company is a related party of the Company.
338
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
4. Information on Other Related Parties
Name (Note1) Relationship
Shanghai Fullhan Microelectronics Co., Ltd. and its subsidiaries Shareholder(s) that hold(s) more than 5% shares of the
(Note2) Company was(were) the director(s) of this company
The Group’s senior management serve(s) as director(s) of this
Shenzhen Wanyu Security Service Technology Ltd. and its subsidiaries
company
The Group’s senior management serve(s) as director(s) of this
Confirmware Technology (Hangzhou) Co., Ltd.
company
Zhejiang Fast Line data fusion Information Technology Co., Ltd. and The Group’s senior management serve(s) as director(s) of this
its subsidiaries company
Chengdu Guoshengtianfeng Network Technology Ltd. and its The Group’s senior management serve(s) as director(s) of this
subsidiaries company
The Group’s independent director(s) serve(s) as director(s) of
Ruihua Innovation Management Research Institute (Hangzhou) Ltd.
this company
The Group’s independent director(s) serve(s) as director(s) of
Ningbo Industrial Internet Research Institute Co., Ltd.
this company
The Group’s supervisor(s) serve(s) as director(s) of this
INESA (Group) Ltd. and its subsidiaries
company
The Group’s former independent director(s) serve(s) as
Aurotek CORP. and its subsidiaries (Note3)
director(s) of this company (Note 1)
The Group's chairman(chairmen) of Board of the Supervisors
Shenzhen Zhongtu Instrument Co., Ltd. (Note4）
was(were) he director(s) of this company
The Group's chairman(chairmen) of Board of the Supervisors
Suzhou Ximeng Technology Co., Ltd.
was(were) he director(s) of this company
Under common control of the ultimate controlling party of the
Subsidiaries of CETC (Note 5)
Company
Note 1: Those companies (excluding subsidiaries of CETC) are collectively referred to as "companies in which directors,
supervisors, senior management, and related natural persons of the Company serve as directors" in the following
disclosures of related party transactions, receivables from related parties, and payable from related parties.
Note 2: Gong Hongjia, a shareholder holding more than 5% shares of the Company, once served as a director of the
company. The term of office of Gong Hongjia was from April 2004 to December 2022. Therefore, this company was
recognized as a related party of the Group in 2021 and 2022.
Note 3: Cheng Tianzong, a former independent director of the Group, once served as a director of the company. The term
of office of Cheng Tianzong was from June 2014 to March 2021. Therefore, this company was recognized as a related
party of the Group in 2021, as well as during January 2022 to March 2022.
Note 4: Hong Tianfeng, the chairman of Board of the Supervisors of the Group, once served as a director company. Hong
Tianfeng departed the Company in April 2022, 2022 is the first year of him/her departure. Therefore, this company was
still recognized as a related party of the Company in the current period.
Note 5: 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 2022 Amount occurred in 2021
Purchase of materials and
Subsidiaries of CETC 2,234,524,161.20 1,996,000,573.93
receiving of services
Purchase of materials and
Joint ventures 5,071,741.36 127,177.54
receiving of services
Purchase of materials and
Associated companies 417,989,556.67 379,325,021.37
receiving of services
Companies in which directors, supervisors,
Purchase of materials and
senior management, and related natural 1,598,406,260.25 1,076,803,192.56
receiving of services
persons of the Company serve as directors
339
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Related party Transaction type Amount occurred in 2022 Amount occurred in 2021
Total 4,255,991,719.48 3,452,255,965.40
Sales of commodities / rendering of services:
Unit: RMB
Related party Transaction content Amount occurred in 2022 Amount occurred in 2021
Sales of products and 447,186,616.90
Subsidiaries of CETC 434,709,999.06
rendering of services
Sales of products and
Joint ventures 77,751,276.48 83,222,278.95
rendering of services
Sales of products and 87,149,633.74
Associated companies 88,857,130.72
rendering of services
Companies in which directors, supervisors, Sales of products and
senior management, and related natural rendering of services 11,233,785.52 16,831,852.52
persons of the Company serve as directors
Total 623,321,312.64 623,621,261.25
(2) Related party lease
Unit: RMB
Lessor Type of leased assets Rental fee confirmed in 2022 Rental fee confirmed in 2021
Subsidiaries of CETC Equipment 13,913,056.77 27,826,113.54
Joint ventures House 542,554.11 486,718.33
Total 14,455,610.88 28,312,831.87
Note: At the end of this year, the Company signed a housing lease contract with Subsidiaries of CETC with a lease period of 27 months. On
December 31, 2022, the Company confirmed right-of-use assets of RMB 6,514,131.19 and lease liabilities of RMB7,379,632.09. During the
reporting period, the depreciation of right-of-use assets was RMB814,266.39 and interest on lease liabilities was RMB51,234.51.
(3) Compensation for key managers
Unit: RMB
Item Amount occurred in 2022 Amount occurred in 2021
Compensation for key managers 38,836,690.44 40,571,163.91
(4) Other related party transactions
Statement of capital deposits:
Unit: RMB
Content of related Amount occurred Balance at the end of the Amount occurred in
Related Party Opening Balance
party transaction in 2022 current reporting period 2021
Deposit into
Subsidiaries of CETC (withdraw from) (499,973,215.52) 33,518.68 500,006,734.20 500,006,734.20
current deposits
Deposit into fixed
Subsidiaries of CETC - 4,000,000,000.00 - 4,000,000,000.00
deposits
Total (499,973,215.52) 4,000,033,518.68 500,006,734.20 4,500,006,734.20
Note: For the deposit deposited by the Group with China Electronics Technology Finance Co., Ltd., the deposit interest
income during the reporting period was RMB80,026,784.06 (2021: RMB 80,001,932.23).
Information on notes discounted:
In 2022, The face value of bank acceptance bill discounted by the Group to China Electronics Technology Finance Co.,
Ltd. is RMB33,564,209.39 (2021: nil). The face value of the discounted and expired bank acceptance bill is
340
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
RMB33,564,209.39 (2021: nil). Interest expense arising from discounting the notes amounted to RMB241,747.39 (2021:
nil)
6. Receivables from Related Parties and Payables to Related Parties
(1) Receivables from related parties
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Subsidiaries of CETC 703,246,712.68 226,247,765.93 756,888,051.10 209,305,306.47
receivable
Accounts
Joint ventures 33,380,436.75 1,573,681.64 19,862,199.08 592,300.61
receivable
Accounts
Associated companies 101,753,693.78 5,670,312.45 87,093,118.68 3,627,594.53
receivable
Accounts Companies in which
receivable directors, supervisors,
senior management, and
3,849,485.72 79,488.44 4,352,261.48 80,947.45
related natural persons of
the Company serve as
directors
Total 842,230,328.93 233,571,248.46 868,195,630.34 213,606,149.06
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes
Subsidiaries of CETC 170,543,239.65 - 78,858,666.10 -
receivable
Notes
Joint ventures 2,500,000.00 - 1,444,385.00 -
receivable
Notes
Associated companies 2,358,308.70 - 5,000,000.00 -
receivable
Companies in which
directors, supervisors,
Notes senior management, and
281,113.19 - - -
receivable related natural persons of
the Company serve as
directors
Total 175,682,661.54 - 85,303,051.10 -
Unit: RMB
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Other
Subsidiaries of CETC 1,720,917.15 240,722.93 645,000.00 99,483.50
receivables
Other
Joint ventures 374,619.85 2,472.49 244,182.74 2,124.39
receivables
Other
Associated companies - - 10,485.27 91.22
receivables
Total 2,095,537.00 243,195.42 899,668.01 101,699.11
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 300,478.44 1,983.16 38,579,578.71 2,451,642.33
(including those due
within one year)
341
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Closing balance Opening balance
Item Related Party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Long-term
receivables
Associated companies 43,800,876.33 973,106.36 37,660,831.90 431,834.19
(including those due
within one year)
Total 44,101,354.77 975,089.52 76,240,410.61 2,883,476.52
Unit: RMB
Item Related Party Closing balance Opening balance
Prepayments Subsidiaries of CETC 6,707,516.94 2,705,210.05
Prepayments Associated companies - 49,300,000.00
Total 6,707,516.94 52,005,210.05
(2) Payables to related parties
Unit: RMB
Item Related Party Closing balance Opening balance
Accounts payable Subsidiaries of CETC 759,760,264.93 570,856,498.41
Accounts payable Joint ventures 966,037.73 -
Accounts payable Associated companies 88,750,828.96 77,275,644.97
Accounts payable Companies in which directors,
supervisors, senior management,
240,030,055.22 409,333,802.57
and related natural persons of the
Company serve as directors
Total 1,089,507,186.84 1,057,465,945.95
Unit: RMB
Item Related Party Closing balance Opening balance
Notes Payable Subsidiaries of CETC 7,561,539.70 40,579,368.55
Companies in which directors, supervisors,
Notes Payable senior management, and related natural 31,994,311.07 24,314,184.13
persons of the Company serve as directors
Total 39,555,850.77 64,893,552.68
Unit: RMB
Item Related Party Closing balance Opening balance
Contract liabilities Subsidiaries of CETC 8,673,665.99 3,446,311.89
Contract liabilities Joint ventures 2,558,659.59 -
Contract liabilities Associated companies - 195,416.40
Companies in which directors,
supervisors, senior management,
Contract liabilities - 961,369.66
and related natural persons of
the Company serve as directors
Total 11,232,325.58 4,603,097.95
Unit: RMB
Item Related Party Closing balance Opening balance
Other payables Subsidiaries of CETC 56,652,471.09 56,252,811.73
Other payables Joint ventures 10,000.00 10,000.00
Other payables Associated companies 236,000.00 9,397,150.00
Companies in which directors,
Other payables supervisors, senior management, 250,000.00 250,000.00
and related natural persons of
342
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
the Company serve as directors
Total 57,148,471.09 65,909,961.73
Unit: RMB
Item Related Party Closing balance Opening balance
Lease liabilities (including those
Subsidiaries of CETC 16,863,126.87 22,591,498.84
due within one year)
Lease liabilities (including those
Joint ventures - 1,074,683.57
due within one year)
Total 16,863,126.87 23,666,182.41
343
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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. (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. (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 25, 2012 and the first
extraordinary general meeting for 2012 on August 13, 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, revenue growth rate, and economic value added), 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 relevant regulations under the scheme.
On December 20, 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.
On January 18, 2022, authorized by the 1st extraordinary general meeting of 2022 and reviewed by the Board of Directors,
the Company granted 97,402,605 restricted shares to grantees at a grant price of RMB29.71 per share ("2021 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 February 2022.
344
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Unit: share
2018 Share Incentive Scheme 2022 2021
Total of equity instruments outstanding at the beginning of the
68,762,683 68,762,683
reporting period
Total of equity instruments granted (share dividend) during the current
- -
reporting period
Total of equity instruments vested during the current reporting period 33,142,730 -
Total of equity instruments forfeited during the current reporting
35,619,953 -
period (Note)
Total of equity instruments outstanding at the end of the reporting
- 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 Inapplicable RMB16.98/share & 24 months
period of the contract
Note: In accordance with the authorization by the Company’s second Extraordinary General Meeting in 2018, the
resolution by the 10th meeting of the 5th session of the Board of Directors on May 5, 2022, the resolution of the second
Extraordinary General Meeting in 2022 on October 10, 2022 and the revised Articles of Association, the Company
repurchased and cancelled the granted 2,288,095 restricted RMB treasury shares that have not been unlocked by cash. The
Company completed the deregistration on December 21, 2022.
In accordance with relevant regulations under 2018 Restricted Share Incentive Scheme (revised draft), the vesting
conditions of third vesting period were not met, and the amount of 33,331,858 shares granted but not vested accordingly
was forfeited during the current period.
2021 Share Incentive Scheme 2022 2021
Total of equity instruments outstanding at the beginning of the
- -
reporting period
Total of equity instruments granted (share dividend) during the current
97,402,605 -
reporting period
Total of equity instruments vested during the current reporting period - -
Total of equity instruments forfeited during the current reporting
- -
period (Note)
Total of equity instruments outstanding at the end of the reporting
97,402,605 -
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 RMB29.71/share & 48 months Inapplicable
period of the contract
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
On October 22, 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 7, 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 and its subsidiaries 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 and their subsidiaries where they
345
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 waiting period shall be five
years after equity of Co-Investment Platform is held by the staff. Within the waiting 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. On December 25, 2020, the Company held the 20th meetings of 4th session
of the Board of Directors, which reviewed and approved the Proposal on Revising Management Measures for Core Staff
Co-Investment in Innovative Businesses. The updated version of Management Measures for Core Staff Co-Investment in
Innovative Businesses (hereinafter referred to as "updated version of Management Measures"), The new version adds rules
relating to the confirmation of shares held directly by employees under Staff Co-Investment Plan and equities of innovative
business subsidiaries held indirectly by employees, clarifies the treatment of shares under Co-Investment Plan after the
disqualification about co-investment of employees, adds rules of management committee.
On December 31, 2020, the Executive management committee of the Co-Investment Plan approved the Provisions for
Management Measures for Core Staff Investment in Innovative Businesses (hereafter referred to as "New Provisions". In
accordance of the New Provisions, for the confirmed Plan A shares, the waiting period is five years since the employee
has worked for the company or its subsidiaries and for the confirmed share of Plan B, the waiting period is five years since
the employee has worked for the innovative business subsidiary corresponding to the Plan B or its subsidiaries.
2. Information of the Share-based Payment through Equity Settlements
Restrictive Share Incentive Scheme
Unit: RMB
2018 Share Incentive Scheme 2021 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
Determined based on the results Determined based on the results
Recognition basis of the number of the equity
estimation of each vesting period and estimation of each vesting period and
instruments qualified for vesting turnover rate turnover rate
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 807,558,807.12 628,733,458.52
capital reserve
Total amount of the expenses recognized according to
share-based payment through equity settlement in the (233,622,413.77) 646,300,305.69
current reporting period
Share Incentive Scheme of Staff Co-Investment in Innovative Businesses
Unit：RMB
Share Incentive Scheme of Staff Co-Investment in
Innovative Businesses
Evaluated and determined based on income method at the
Method of determining the fair value of equity instruments at the grant date
grant date
Recognition basis of the number of the equity instruments qualified for Estimated and determined based on the performance result
vesting conditions of each vesting period
Accumulative amount of share-based payment through equity settlement and
482,406,503.60
further included in the capital reserve
Total amount of the expenses recognized according to share-based payment
207,631,789.73
through equity settlement in the current reporting period
RMB48,476,710.52 of the total expenses of paid and confirmed by equity settlements was shared by minority shareholders
and RMB909,665.51 of the total deferred tax impact arising from the restricted share incentive scheme was shared by
346
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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.
347
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 16,521,850 11,659,026
- Commitment on external investments 12,940 34,500
Total 16,534,790 11,693,526
2. Contingencies
The Group has no significant contingencies to be disclosed.
XIII. Events after the Balance Sheet Date
1. Significant Unadjusted Events
As of April 13, 2023, the Company has no significant events after the balance sheet date that need to be disclosed
2. Profit Distribution
Pursuant to the proposal of the 17th meeting of the 5th session of the Board of Directors on April 13, 2023, the Company
proposed to distribute cash dividend of RMB7 (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 2022 2021
External revenue generated in domestic area 56,890,890,769.45 59,434,989,705.17
External revenue generated in overseas area 26,275,430,911.69 21,985,063,834.10
Total 83,166,321,681.14 81,420,053,539.27
Unit: RMB
Item (Note) On December 31, 2022 On January 1, 2022
Non-current assets in domestic area 16,808,935,279.10 13,823,326,864.88
348
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Non-current assets in overseas area 831,488,767.27 777,156,474.79
Total 17,640,424,046.37 14,600,483,339.67
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.
349
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
XV. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts Receivable
(1) Disclosure by age
Unit: RMB
Closing Balance
Aging
Accounts receivable Credit loss provision Proportion (%)
Within credit period 7,024,926,501.10 8,144,151.71 0.12
Within 1 year after exceeding credit period 16,771,801,690.71 87,553,778.78 0.52
1-2 years after exceeding credit period 513,230,879.82 92,194,242.75 17.96
2-3 years after exceeding credit period 312,592,580.10 119,434,198.71 38.21
3-4 years after exceeding credit period 180,224,406.31 119,634,534.57 66.38
Over 4 years after exceeding credit period 164,982,539.08 164,982,539.08 100.00
Subtotal 24,967,758,597.12 591,943,445.60 2.37
(2) Classification and disclosure of by credit loss provision methods
Unit: RMB
Closing balance Opening balance
Carrying balance Credit loss provision Book value Carrying balance Credit loss provision Book value
Category
Percentage Percentage Percentage Percentage
Amount Amount Amount Amount Amount Amount
(%) (%) (%) (%)
Provision for
credit loss on - - - - - - - - - -
a single basis
Provision for
credit loss by 24,967,758,597.12 100.00 591,943,445.60 2.37 24,375,815,151.52 24,366,746,971.10 100.00 488,628,899.68 2.01 23,878,118,071.42
portfolios
Total 24,967,758,597.12 100.00 591,943,445.60 2.37 24,375,815,151.52 24,366,746,971.10 100.00 488,628,899.68 2.01 23,878,118,071.42
350
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Accounts receivable provision for credit loss by portfolios
Unit: RMB
Closing balance
Customer
Carrying balance Credit loss provision Proportion (%)
Subsidiaries’ customers 20,790,257,807.56 - -
Portfolio A 592,263.40 311,519.72 52.60
Portfolio B 4,176,689,050.71 591,412,450.43 14.16
Portfolio C 219,475.45 219,475.45 100.00
Total 24,967,758,597.12 591,943,445.60 2.37
Description of accounts receivable for credit loss provision by portfolios
As part of the Company's credit risk management, the Company uses the over-credit age 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.
(3) Credit loss provision
The provision for credit loss in the current reporting period is RMB 119,419,773.02.
The actual write-off of accounts receivable for the current reporting period is RMB 16,303,736.16, and RMB 198,509.06 is recovered after write-off.
351
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
(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 Book value balance of accounts receivable Closing balance for credit loss provision
receivable at the end of the current reporting period
Subsidiary A 20,685,756,539.48 82.85 -
CETC’s subsidiary
130,418,142.77 0.52 53,524,319.86
company A
Third party H 107,975,664.71 0.43 4,115,824.12
Third party I 71,179,765.58 0.29 2,169,926.56
Third party J 37,596,997.02 0.15 1,597,872.37
Total 21,032,927,109.56 84.24 61,407,942.91
(5) As of December 31, 2022, there is no termination of accounts receivable booking due to transfer of a financial asset.
(6) As of December 31, 2022, 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 85,323,007.51 22,910,404.14
Other receivables 2,324,554,929.22 1,491,231,959.91
Total 2,409,877,936.73 1,514,142,364.05
352
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
2.2 Dividends receivable
Unit：RMB
Investees Closing balance Opening balance
Subsidiaries of Hikvision 85,323,007.51 22,910,404.14
Total 85,323,007.51 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 2,291,096,654.42 957,238.60 0.04
Within 1 year 33,503,835.61 1,372,301.44 4.10
1-2 years 2,112,945.32 372,089.67 17.61
2-3 years 341,396.88 120,389.01 35.26
3-4 years 946,880.46 624,764.75 65.98
Over 4 years 646,571.70 646,571.70 100.00
Subtotal 2,328,648,284.39 4,093,355.17 0.18
353
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
(2) Other receivables by nature of the payment
Unit: RMB
Nature Closing balance Opening balance
Payments by related parties within the Group 2,137,185,066.96 1,365,117,094.96
Temporary payments for receivables 109,945,554.93 61,128,645.72
Guarantee deposit 69,392,171.01 60,966,840.82
Others 12,125,491.49 7,274,266.75
Total 2,328,648,284.39 1,494,486,848.25
(3) Provision for credit losses
The amount of credit loss provision in the current period was RMB 1,198,466.83.
(4) The actual write-off of other receivables in the current reporting period was RMB 360,000.00.
(5) Top 5 debtors of other receivables in terms of closing balance
Unit：RMB
Percentage to total other Closing balance for credit loss
The name of entity Nature Closing balance Aging
receivables (%) provision
Subsidiary B Internal Payment 618,349,570.66 Within contract period 26.55 -
Subsidiary C Internal Payment 495,712,569.41 Within contract period 21.29 -
Subsidiary D Internal Payment 196,728,403.47 Within contract period 8.45 -
Subsidiary E Internal Payment 111,136,286.84 Within contract period 4.77 -
354
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Percentage to total other Closing balance for credit loss
The name of entity Nature Closing balance Aging
receivables (%) provision
Subsidiary F Internal Payment 98,983,544.27 Within contract period 4.25 -
Total 1,520,910,374.65 65.31 -
(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 6,629,092,230.54 - 6,629,092,230.54 6,870,285,292.68 - 6,870,285,292.68
Investments in associated enterprises and joint ventures 1,106,666,564.96 - 1,106,666,564.96 915,631,339.20 - 915,631,339.20
Total 7,735,758,795.50 - 7,735,758,795.50 7,785,916,631.88 - 7,785,916,631.88
(1) Investment in main subsidiaries
Unit：RMB
Increase during Decrease during Write-off of impairment Balance of impairment loss
Name of investee Opening balance the current the current Closing balance provision during the current provision at the end of the
reporting period reporting period reporting period current reporting period
Hangzhou Hikvision System
860,512,480.17 12,957,650.20 - 873,470,130.37 - -
Technology Ltd.
355
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Increase during Decrease during Write-off of impairment Balance of impairment loss
Name of investee Opening balance the current the current Closing balance provision during the current provision at the end of the
reporting period reporting period reporting period current reporting period
Hangzhou Hikvision
1,074,046,955.60 25,602,054.03 - 1,099,649,009.63 - -
Technology Ltd.
Hangzhou EZVIZ Network
63,243,651.86 - 2,612,485.31 60,631,166.55 - -
Co., Ltd.
Hangzhou EZVIZ Software
40,105,053.11 - 7,739,544.83 32,365,508.28 - -
Ltd.
Hangzhou Hikrobot
142,392,287.50 - 4,785,473.57 137,606,813.93 - -
Technology Co., Ltd.
Hangzhou Haikang
10,200,142.51 - 1,801,683.82 8,398,458.69 - -
Intelligence Ltd.
(2) Investments in associated enterprises and joint ventures
Unit：RMB
Balance of
impairment
Investment
Other Declared cash loss provision
Opening income (losses)
Name of investee Additional Reduced comprehensive Other changes dividends or Provision for Closing balance at the end of
balance recognized Others
investments investments income in equity profit impairment the current
under the
adjustment distribution reporting
equity method
period
1. Joint Ventures
Hangzhou Haikang 702,369,339.95 - - 112,680,820.39 - 14,775,227.26 - - - 829,825,387.60 -
356
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Balance of
impairment
Investment
Other Declared cash loss provision
Opening income (losses)
Name of investee Additional Reduced comprehensive Other changes dividends or Provision for Closing balance at the end of
balance recognized Others
investments investments income in equity profit impairment the current
under the
adjustment distribution reporting
equity method
period
Intelligent Industrial
Equity Investment Fund
Partnership (L.P.)
Zhejiang City Digital
12,214,320.29 11,500,000.00 - 2,627,190.51 - - - - - 26,341,510.80 -
Technology Ltd.
Zhejiang Haishi
Huayue Digital 11,930,512.66 - - 2,726,503.57 - - (1,275,000.00) - - 13,382,016.23 -
Technology Ltd.
Shenzhen Haishi Urban
1,264,658.38 1,500,000.00 - (1,089,851.65) - - - - - 1,674,806.73 -
Service Operation Ltd.
Guangxi Haishi City
Operation Management 4,632,200.59 8,560,000.00 - (132,206.62) - - - - - 13,059,993.97 -
Ltd.
Yunnan Yinghai
4,558,881.09 - - 519,116.95 - - - - - 5,077,998.04 -
Parking Service Ltd.
Xuzhou Kangbo City
Operation Management 9,233,201.67 - - 1,152,365.21 - - - - - 10,385,566.88 -
Service Ltd.
357
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Balance of
impairment
Investment
Other Declared cash loss provision
Opening income (losses)
Name of investee Additional Reduced comprehensive Other changes dividends or Provision for Closing balance at the end of
balance recognized Others
investments investments income in equity profit impairment the current
under the
adjustment distribution reporting
equity method
period
Subtotal 746,203,114.63 21,560,000.00 - 118,483,938.36 - 14,775,227.26 (1,275,000.00) - - 899,747,280.25 -
2. Associated Companies
Wuhu Sensortech
Intelligent Technology 75,466,476.84 - - 22,627,903.68 - - - - - 98,094,380.52 -
Ltd.
Maxio Technology
62,727,449.53 - - (18,684,479.79) - 42,356,564.37 - - - 86,399,534.11 -
(Hangzhou) Co., Ltd.
Zhiguang Hailian Big
21,285,843.27 - - (3,378,441.24) - 4,517,968.05 - - - 22,425,370.08 -
Data Technology Ltd.
Qinghai Qingtang Big
9,948,454.93 - (9,800,000.00) (148,454.93) - - - - - - -
Data Ltd.
Subtotal 169,428,224.57 - (9,800,000.00) 416,527.72 - 46,874,532.42 - - - 206,919,284.71 -
Total 915,631,339.20 21,560,000.00 (9,800,000.00) 118,900,466.08 - 61,649,759.68 (1,275,000.00) - - 1,106,666,564.96 -
(3) As of December 31, 2022, there were no restrictions on the capability of transferring fund to the Company from investees in which the Company held long-term
equity investment.
358
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
4. Revenue/cost of sales and services
Unit：RMB
2022 2021
Item
Revenue Cost Revenue Cost
Major business 21,018,811,109.28 4,962,133,305.77 24,756,059,967.30 5,102,605,625.81
Other business 3,265,694,229.07 135,606,040.90 3,316,533,294.57 138,183,248.51
Total 24,284,505,338.35 5,097,739,346.67 28,072,593,261.87 5,240,788,874.32
5. Investment Income
Unit：RMB
Item 2022 2021
Long-term equity investment income calculated by the cost
205,293,907.63 16,316,000.00
method
Long-term equity investment income measured by the equity
118,900,466.08 109,087,538.20
method
Investment income (losses) from disposal of long-term equity
1,709,563.80 (3,387,647.37)
investments
Investment income of other non-current financial assets during
51,892,209.92 115,644,801.97
the holding period
Investment income (losses) from disposal of held of trading
8,227,196.70 (461,953.09)
financial assets
Investment income from disposal of other non-current financial
1,260,000.00 -
assets
Total 387,283,344.13 237,198,739.71
6. Related Party Transactions
(1) Sales and purchase of goods, provision of services and receiving services
Purchase of goods/receiving of services:
Unit：RMB
Related party Transaction type 2022 2021
Purchase of materials and
Subsidiaries of Hikvision (Note) 6,144,557,450.80 6,136,340,294.33
receiving of services
Purchase of materials and
Subsidiaries of CETC 115,654,935.67 23,888,681.71
receiving of services
Purchase of materials and
Associated companies 76,150,000.00 36,783,800.00
receiving of services
Companies in which directors,
supervisors, senior management, Purchase of materials and
20,744,901.95 1,787,764.68
and related natural persons of the receiving of services
Company serve as directors
Total 6,357,107,288.42 6,198,800,540.72
Note: Subsidiaries of Hikvision are subsidiaries of the Company.
359
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Sales of goods/rendering of services:
Unit：RMB
Related party Transaction type 2022 2021
Sales of products and
Subsidiaries of Hikvision 18,556,146,320.10 22,294,952,493.31
rendering of services
Sales of products and
Subsidiaries of CETC 39,345,286.87 20,263,330.33
rendering of services
Sales of products and
Joint ventures 6,434,024.76 2,000,114.83
rendering of services
Sales of products and
Associated companies 250,870.35 20,709,343.81
rendering of services
Companies in which directors,
supervisors, senior management, Sales of products and
4,824,922.37 7,006,078.70
and related natural persons of the rendering of services
Company serve as directors
Total 18,607,001,424.45 22,344,931,360.98
(2) Related party lease
At the end of this year, the Company signed a housing lease contract with Subsidiaries of CETC with a lease
period of 27 months. On December 31, 2022, the Company confirmed right-of-use assets of RMB6,514,131.19
and lease liabilities of RMB7,379,632.09. During the reporting period, the amount of interest on lease liabilities
was RMB51,234.51.
(3) Guarantees with related parties
In the current reporting period, the Company has provided guarantees for its 31 subsidiaries in an amount not
exceeding an equivalent of RMB17.90 billion (2021: RMB16.10 billion), including the joint liability guarantee for
the payment obligations on purchase from suppliers in an amount not exceeding an equivalent of RMB320 million
(2021: RMB370 million), 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 RMB17.58 billion (2021: RMB15.73 billion).
(4) Funding from related parties
In April 2022, the Company held the 9th Meeting of the 5th Session of the Board of Directors, which considered
and approved the Proposal on Providing Financial Assistance to Seven Innovative Subsidiaries. Under this proposal,
the Company will offer a loan of up to RMB1,200 million RMB1,500 million, RMB300 million, RMB700 million,
RMB200 million, RMB300 million and RMB300 million to Hangzhou HikAuto Technology Co., Ltd. ("HikAuto
Technology"), Wuhan HikSemi Technology Co., Ltd. ("Wuhan HikSemi"), HikFire Technology, HikMicro Sensing,
HikImaging Technology, Rayin Technology and HikAuto Software, respectively. The loans are intended to meet
the operating capital needs of these innovative subsidiaries and the specific amount of a loan will be provided based
360
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
on the actual business needs of each subsidiary. The proposal was considered and approved by the shareholders'
meeting of the Company on May 13, 2022. The validity period of the loan is 3 years from the date of proposal
consideration and approval by the shareholders' meeting of the Company, and the loan (balance) can be taken out
several times during the validity period. The annual loan interest rate shall be determined by the parties to the
agreement in accordance with the market-based principles without violating the relevant laws and regulations, and
shall be subject to the specific contract. The entry into effect of the proposal shall automatically invalidate any
unused amount of the loan for 2021 as described below. In 2022, the Company lent a total of RMB4,058,597,035.23
to these innovative subsidiaries, and recovered RMB3,969,815,977.03 with interest income totaling
RMB31,573,270.34.
In April 2021, the Company held the 2nd meeting of the 5th session of the Board of Directors, deliberated and
passed the Proposal on Providing Financial Assistance to Five Innovative Business Holding Subsidiaries, and
provided related party borrowing limits of not more than RMB 500 million, RMB 500 million, RMB 200 million,
RMB 100 million and RMB 50 million to Wuhan HikStorage, HikAuto Technology, HikFire Technology,
Hangzhou Rayin Technology and HikImaging Technology, respectively. It will be used for each innovative business
subsidiary to supplement the operating capital needs, and the specific loan amount will be provided according to
the actual business needs of each innovative business subsidiary. The proposal was deliberated and approved by the
Company's General Meeting of Shareholders on May 14, 2021, and the validity period of the related party loan limit
is 3 years from the date of deliberation and approval by the Company's General Meeting of Shareholders, and the
amount (balance) can be recycled in batches during the validity period. The annual borrowing interest rate of
financial assistance shall be determined through negotiation between the parties to the agreement without violating
relevant laws and regulations, and the borrowing interest rate shall be determined in accordance with the principle
of marketization, and the specific contract shall prevail. In 2021, the Company withdrew a total of
RMB1,354,700,000.00 for various innovation business subsidiaries, received RMB737,000,000.00, and received a
total interest income of RMB6,391,607.18.
In order to meet the R&D funding needs, China Development Bank and the Company signed long-term loan
contracts with Hangzhou Systems, Hangzhou Rayin Technology, HikStorage Technology, HikMicro Sensing,
HikRobot and HikAuto Software (hereinafter referred to as "R&D loan recipient"), subsidiaries of the Group. Under
the loan arrangement, the Company is the borrower, a R&D loan recipient is the recipient and China Development
Bank is the lender. A R&D loan recipient will apply for a loan from China Development Bank via the Company
based on its R&D project progress and loan needs. After approval by the bank, the loan will be allocated to the
recipient via the Company. The borrowing period is from December 31, 2021 to December 2, 2026 and a floating
interest rate is used for the loan. RMB287,020,000.00 of the Company's long-term receivables represented the
borrowings applied by the R&D loan recipients as of December 31, 2022, and interest income of RMB5,118,686.47
was recognized in 2022.
361
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
(5) Other related party transactions
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
Subsidiaries of CETC (withdraw from) (499,973,215.52) 33,518.68 500,006,734.20 500,006,734.20
current deposits
Deposit into fixed
Subsidiaries of CETC - 4,000,000,000.00 - 4,000,000,000.00
deposits
Total (499,973,215.52) 4,000,033,518.68 500,006,734.20 4,500,006,734.20
Note: For the deposit that the Company deposited into China Electronics Technology Finance Co., Ltd., the deposit
interest income was RMB 80,026,784.06 in 2022 (2021: RMB 80,001,932.23).
Statement of discounted note
In 2022, The face value of bank acceptance bill discounted by the Group to China Electronics Technology Finance
Co., Ltd. is RMB 33,564,209.39 (2021: nil). The face value of the discounted and expired bank acceptance bill is
RMB 33,564,209.39 (2021: nil). Interest expense arising from discounting the notes amounted to RMB 241,747.39
(2021: nil)
7. Receivables from Related Parties and Payables to Related Parties
(1) Receivables from related parties
Unit：RMB
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Subsidiaries of Hikvision 20,790,257,807.56 - 20,638,547,619.01 -
receivable
Accounts
Subsidiaries of CETC 245,305,306.90 98,031,982.92 232,683,754.63 59,533,322.73
receivable
Accounts
Joint ventures 2,379,952.00 101,147.96 - -
receivable
362
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Accounts
Associated companies 8,072,547.52 2,436,481.82 10,721,469.72 1,091,672.49
receivable
Companies in which
directors, supervisors,
Accounts senior management, and
1,902,966.26 44,955.65 2,504,232.29 23,633.21
receivable related natural persons of
the Company serve as
directors
Total 21,047,918,580.24 100,614,568.35 20,884,457,075.65 60,648,628.43
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Notes
Subsidiaries of Hikvision 35,619,298.47 - 37,441,937.40 -
receivable
Notes
Subsidiaries of CETC 1,681,429.40 - 12,417,231.80 -
receivable
Total 37,300,727.87 - 49,859,169.20 -
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Other Subsidiaries
2,137,185,066.96 - 1,365,117,094.96 -
receivables of Hikvision
Other Subsidiaries
1,190,907.15 49,197.51 145,000.00 6,133.50
receivables of CETC
Other Joint
228,543.65 1,508.39 104,182.74 906.39
receivables ventures
Total 2,138,604,517.76 50,705.90 1,365,366,277.70 7,039.89
Item Related party Closing balance Opening balance
Prepayments Subsidiaries of Hikvision 772,949.48 3,274,287.66
Prepayments Subsidiaries of CETC 625,681.13 26,700.00
Prepayments Associated companies - 49,300,000.00
Total 1,398,630.61 52,600,987.66
363
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Closing balance Opening balance
Item Related party
Carrying balance Credit loss provision Carrying balance Credit loss provision
Long-term
receivables
Subsidiaries of
(including those 287,020,000.00 - - -
Hikvision
due within one
year)
Long-term
receivables
Subsidiaries of
(including those 300,478.44 1,983.16 18,579,578.71 161,642.33
CETC
due within one
year)
Total 287,320,478.44 1,983.16 18,579,578.71 161,642.33
Closing balance Opening balance
Item Related party Credit loss Credit loss
Carrying balance Carrying balance
provision provision
Dividends Subsidiaries of
85,323,007.51 - 22,910,404.14 -
receivable Hikvision
Total 85,323,007.51 - 22,910,404.14 -
(2) Payables to related parties
Unit：RMB
Item Related party Closing balance Opening balance
Accounts payable Subsidiaries of Hikvision 516,915,904.84 441,107,077.18
Accounts payable Subsidiaries of CETC 6,494,664.60 5,000,503.43
Companies in which directors, supervisors, senior
Accounts payable management, and related natural persons of the - 648,139.19
Company serve as directors
Total 523,410,569.44 446,755,719.80
Item Related party Closing balance Opening balance
Contract liabilities Subsidiaries of Hikvision 8,000,394.52 10,138,872.51
Contract liabilities Subsidiaries of CETC 273,933.15 242,618.30
Companies in which directors, supervisors, senior
Contract liabilities management, and related natural persons of the - 687.00
Company serve as directors
Total 8,274,327.67 10,382,177.81
364
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Item Related party Closing balance Opening balance
Other
Subsidiaries of Hikvision 667,461,756.46 793,064,398.78
payables
Other
Subsidiaries of CETC 278,540.00 190,790.00
payables
Other
Joint ventures 10,000.00 10,000.00
payables
Other
Associated companies 2,040.00 9,312,040.00
payables
Companies in which directors, supervisors, senior
Other
management, and related natural persons of the 100,000.00 100,000.00
payables
Company serve as directors
Total 667,852,336.46 802,677,228.78
Item Related party Closing balance Opening balance
Lease liabilities (including
Subsidiaries of CETC 7,379,632.09 -
those due within one year)
Total 7,379,632.09 -
8. Supplementary Information to the Cash Flow Statement
(1) Supplementary information to the cash flow statement
Unit：RMB
Supplementary information 2022 2021
1. Reconciliation of net profit to cash flows from
operating activities:
Net profit 9,597,855,108.17 14,088,727,668.02
Add: Assets impairment provision 1,195,518.35 2,669,913.88
Credit loss provision 122,761,912.01 119,440,900.17
Depreciation of fixed assets 352,312,160.94 271,966,196.58
Amortization of intangible assets 30,908,858.01 42,715,421.78
Depreciation of right of use assets 51,303,066.27 35,547,052.78
Amortization of long-term deferred expenses 33,629,517.18 66,502,221.67
Losses (gains) on disposal of fixed assets,
2,215,205.61 (30,917,301.16)
intangible assets and other long-term assets
Financial expenses 49,308,908.32 138,779,449.86
Losses from change in fair value 74,432,284.58 48,725,796.17
Investment income (387,283,344.13) (237,198,739.71)
Share-based payment through equity settlement 334,727,555.19 238,045,712.93
Decrease (increase) in restricted funds (38,774,781.68) 195,005,634.49
Decrease (increase) in deferred income tax assets 108,152,533.65 (171,826,866.94)
Decrease (increase) of inventories 58,285,769.30 (145,289,110.09)
365
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
Supplementary information 2022 2021
Increase in operating receivables (676,508,556.07) (651,204,315.31)
Increase (decrease) in operating payables (288,706,205.97) 1,539,868,467.24
Increase in deferred income 97,602,421.09 243,243,770.27
Net cash flow from operating activities 9,523,417,930.82 15,794,801,872.63
2. Major investing and financing activities not involving
cash receipt and payment:
3. Net change in cash and cash equivalents:
Closing balance of cash 27,771,201,246.40 26,639,582,696.49
Less: Opening balance of cash 26,639,582,696.49 23,264,693,578.70
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents 1,131,618,549.91 3,374,889,117.79
(2) Composition of cash and cash equivalents
Unit：RMB
Item Closing balance Opening balance
I. Cash 27,771,201,246.40 26,639,582,696.49
Including: Cash on hand 360,563.22 261,314.61
Bank deposit for payment at any time 27,609,458,740.05 26,639,219,718.83
Other monetary funds for payment at any time 161,381,943.13 101,663.05
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 27,771,201,246.40 26,639,582,696.49
On December 31, 2022, the Company’s closing balance of other monetary funds was RMB 217,063,841.70
(December 31, 2021: RMB 17,008,779.94), of which RMB 55,681,898.57 were various guarantee deposits
(December 31, 2021: RMB 16,907,116.89), not cash or cash equivalents.
366
Hikvision 2022 Annual Report
Notes to Financial Statements
For the reporting period from January 1, 2022 to December 31, 2022
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 (18,617,582.10) /
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 726,269,569.92 /
subsidy based on standard quota or quantitative continuous
enjoyment according to the state industrial policy)
Investment gains from disposal of subsidiaries and other
3,550,851.71
business units
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
financial liabilities, other non-current financial assets, and (99,112,871.09) /
investment gains from the disposal of the above-mentioned
financial assets/financial liabilities and receivables financing
(losses)
Other non-operating income and expense except the items
72,446,008.81 /
mentioned above
Impact of income tax (74,392,826.66) /
The impact of minority equity (103,496,968.14) /
Total 506,646,182.45 /
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
19.62 1.370 1.370
Company
Net profit excluding non-recurring items of profit or loss
18.85 1.315 1.315
attributable to ordinary shareholders of the Company
367
Hikvision 2022 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 15, 2023
Note:
This document is a translated version of the Chinese version 2022 Annual Report ("2022 年年度报
告"), and the published announcements in the Chinese version shall prevail. The complete published
Chinese 2022 Annual Report may be obtained at www.cninfo.com.cn.
368
