Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare Precision Industry Co., Ltd.
Annual Report 2021
2022-033
April 2022
This document is a translated version of the Chinese version Annual Report 2021 of Luxshare Precision Industry Co.,Ltd.(“《立讯精密 2021
年年度报告》”),and the published Annual Report 2021 of Luxshare Precision Industry Co.,Ltd.in the Chinese version shall prevail. The
complete published Chinese Annual Report 2021 of Luxshare Precision Industry Co.,Ltd. may be obtained at www.cninfo.com.cn.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section I Important Note, Table of Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and executives
of the Company hereby warrant that the information contained in this Annual Report is true,
accurate and complete and this Annual Report is free from any misrepresentation, misleading
statement or material omission, and agree to assume joint and several liability for this Annual
Report.
WANG Laichun, Principal of the Company, CFO WU Tiansong and Chief Accountant
CHEN Huiyong hereby represent that the financial statements contained in this Annual
Report are true, accurate and complete.
All directors of the Company attended the meeting of the Board of Directors reviewing
this Report.
The relevant risks facing the Company are set out in “Section III Management’s
Discussion and Analysis - XI. Prospects for future development of the Company”.
According to the profit distribution proposal approved by the Board of Directors, the
Company will distribute a cash dividend of RMB1.10 (inclusive of tax) per 10 shares to all
shareholders on the basis of 7,084,301,477 shares, and will not distribute any bonus shares or
transfer any capital reserve to the share capital for the reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Table of Contents
Section I Important Note, Table of Contents and Definitions ................................. 2
Section II Company Profile and Financial Highlights ............................................. 7
Section III Management’s Discussion and Analysis ............................................... 11
Section IV Corporate Governance ........................................................................... 51
Section V Environment and Social Responsibilities............................................... 75
Section VI Significant Events ................................................................................... 85
Section VII Changes in shares and shareholders ................................................. 105
Section VIII Preference Shares .............................................................................. 115
Section IX Bonds ..................................................................................................... 116
Section X Financial Report ..................................................................................... 129
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
List of References
1. Financial statements signed and chopped by the principal, CFO and Chief Accountant of the Company;
2. Original of the auditor’s report stamped with the seal of the accounting firm and signed and chopped by the certified public
accountants;
3. Originals of all documents of the Company publicly disclosed on the website for information disclosure designated by the
China Securities Regulatory Commission during the reporting period and related announcements; and
4. Other references.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Definitions
Terms Definition
We/us, the Company or
means Luxshare Precision Industry Co., Ltd.
Luxshare-ICT
Luxshare Limited means Luxshare Limited, founder and controlling shareholder of Luxshare-ICT.
ICT-Lanto means ICT-Lanto Limited.
Luxshare Precision means Luxshare Precision Limited.
Luxshare Jiangsu means Luxshare Precision Industry (Jiangsu) Co., Ltd.
Luxshare Shanxi means Shanxi Luxshare Precision Industry Co., Ltd.
Luxshare Dongguan means Dongguan Luxshare Precision Industry Co., Ltd.
Luxshare Suzhou means Luxshare Precision Industry (Suzhou) Co., Ltd.
Luxshare Chuzhou means Luxshare Precision Industry (Chuzhou) Co., Ltd.
Luxshare Kunshan means Kunshan Luxshare Precision Industry Co., Ltd.
Luxshare Baoding means Luxshare Precision Industry (Baoding) Co., Ltd.
Luxshare Xuancheng means Xuancheng Luxshare Precision Industry Co., Ltd.
Luxshare Yancheng means Yancheng Luxshare Precision Industry Co., Ltd.
Luxshare Enshi means Luxshare Precision Industry (Enshi) Co., Ltd.
Luxshare Vietnam means Luxshare-ICT (Vietnam) Limited.
Luxshare Van Trung means Luxshare-ICT (Van Trung) Company Limited.
Luxshare Nghe An means Luxshare-ICT (Nghe An) Limited.
Luxshare Electroacoustic means Shenzhen Luxshare Electroacoustic Technology Co., Ltd.
Luxshare Smart Manufacturing means Luxshare Smart Manufacturing (Zhejiang) Co., Ltd.
Luxshare-Merry means Guangdong Luxshare-Merry Electronics Co., Ltd.
ASAP Jiangxi means ASAP Technology (Jiangxi) Co., Ltd.
Xiexun Jiangxi means Xiexun Electronic (Ji’an) Co., Ltd.
Smart Manufacturing Jiangxi means Jiangxi Luxshare Smart Manufacturing Co., Ltd.
Lanto Bozhou means Bozhou Lanto Electronic Limited.
Xuntao Bozhou means Bozhou Xuntao Electronic Limited.
Meite Suzhou means Meite Technology (Suzhou) Co., Ltd.
Huzhou Jiuding means Huzhou Jiuding Electronic Co., Ltd.
Lanto Kunshan means Lanto Electronic Limited.
Kunshan RF means Kunshan Luxshare Radio Frequency Technology Co., Ltd.
Liding Dongguan means Liding Electronic Technology (Dongguan) Co., Ltd.
Rikai Yancheng means Rikai Precision Technology (Yancheng) Co., Ltd.
Xiexun Wan’an means Wan’an Xiexun Electronic Co., Ltd.
Smart Manufacturing Changshu means Changshu Luxshare Smart Manufacturing Co., Ltd.
Fujian JK means Fujian JK Wiring Systems Co., Ltd.
Xingning Electronics means Xingning Luxshare Electronics Co., Ltd.
Luxsan Kunshan means Luxsan Technology (Kunshan) Co., Ltd.
BCS Suzhou means BCS Automotive Interface Solutions (Suzhou) Co., Ltd.
SpeedTech means SpeedTech Corp.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare Automation Jiangsu means Luxshare Automation (Jiangsu) Co., Ltd.
Dongguan Luxshare Technology means Dongguan Luxshare Technology Co., Ltd.
Luxshare Electronic Kunshan means Luxshare Electronic Technology (Kunshan) Co., Ltd.
Luxshare Electronic Enshi means Luxshare Electronic Technology (Enshi) Co., Ltd.
AOA means Articles of Association of Luxshare Precision Industry Co., Ltd.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section II Company Profile and Financial Highlights
I. Company profile
Stock short name Luxshare-ICT Stock code 002475
Stock exchange Shenzhen Stock Exchange
Chinese name 立讯精密工业股份有限公司
Chinese short name 立讯精密
English name (if any) Luxshare Precision Industry Co., Ltd.
English short name (if any) Luxshare-ICT
Legal representative WANG Laichun
2/F, Block A, Sanyang New Industrial Zone, West Haoyi, Shajing Street, Baoan District,
Registered address
Shenzhen
Postal code of registered address 518104
History of changes in registered
N/A
address
Office address No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong
Postal code of office address 523642
Company website www.luxshare-ict.com
Email Public@luxshare-ict.com
II. Contact person and contact information
Board Secretary Securities Affairs Representative
Name HUANG Dawei LI Ruihao
No. 313 Beihuan Road, Qingxi Town, No. 313 Beihuan Road, Qingxi Town,
Address
Dongguan, Guangdong Dongguan, Guangdong
Telephone 0769-87892475 0769-87892475
Fax 0769-87732475 0769-87732475
E-mail David.Huang@luxshare-ict.com Ray.Li@luxshare-ict.com
III. Media for information disclosure and place for keeping annual report
Website of the stock exchange disclosing the Company’s
Securities Times
annual report
Media and website disclosing the Company’s annual report www.cninfo.com.cn
Place for keeping annual report Securities Affairs Office of the Company
IV. Changes in registration particulars
Change in organization code Unified social credit code: 91440300760482233Q
Changes in main business since the listing No
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
of the Company (if any)
Changes in controlling shareholder (if any) No
V. Other related information
Accounting firm engaged by the Company:
Name of accounting firm BDO China Shu Lun Pan Certified Public Accountants LLP
Office address of accounting firm Rooms 1, 2 & 3, 4/F, No. 61 East Nanjing Road, Huangpu District, Shanghai
Name of accountants signing this report LI Jing and WEI Gang
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
√ Applicable □ N/A
Names of sponsor
Name of sponsor Office address of sponsor Period of ongoing supervision
representatives
19/F, North Tower, Excellence Times
HE Feng and LIU From December 2, 2020 to
CITIC Securities Co., Ltd. Plaza (Phase II), No. 8 3rd Central
Guanzhong December 31, 2021
Road, Futian District, Shenzhen
Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting
period
□ Applicable √ N/A
VI. Key accounting data and financial indicators
Did the Company need to retrospectively adjust or re-state any accounting data of prior accounting years?
□ Yes √ No
2021 2020 Y/Y % Change 2019
Operating revenue (RMB) 153,946,097,790.40 92,501,259,211.54 66.43% 62,516,314,588.42
Net profit attributable to
shareholders of the listed company 7,070,520,386.57 7,225,462,752.58 -2.14% 4,713,820,644.90
(RMB)
Net profit attributable to
shareholders of the listed company
6,015,597,220.13 6,088,901,850.86 -1.20% 4,435,974,109.41
after deduction of extraordinary
gain or loss (RMB)
Net cash flows from operating
7,284,766,917.00 6,873,211,486.05 5.99% 7,465,988,174.33
activities (RMB)
Basic earnings per share
1.01 1.03 -1.94% 0.68
(RMB/share)
Diluted earnings per share
0.99 1.01 -1.98% 0.67
(RMB/share)
Weighted average return on net Decrease by 7.94 per
22.35% 30.29% 26.55%
assets centage points
December 31, 2021 December 31, 2020 Y/Y % Change December 31, 2019
Total assets (RMB) 120,572,098,167.88 70,012,753,551.75 72.21% 49,377,910,671.23
Net assets attributable to
shareholders of the listed company 35,288,554,748.72 28,101,816,234.56 25.57% 20,296,618,968.52
(RMB)
Whether the lower of the net profit before and after deduction of extraordinary gain or loss in the past three accounting years has
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
been negative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is
uncertain?
□ Yes √ No
Whether the lower of the net profit before and after deduction of extraordinary gain or loss is negative?
□ Yes √ No
VII. Differences in accounting data arising from adoption of Chinese and foreign accounting
standards concurrently
1. Differences in net profit and net assets disclosed in the financial statements prepared according to the
international accounting standards and the Chinese accounting standards
□ Applicable √ N/A
There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according
to the international accounting standards and the Chinese accounting standards.
2. Differences in net profit and net assets disclosed in the financial statements prepared according to the
foreign accounting standards and the Chinese accounting standards
□ Applicable √ N/A
There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according
to the foreign accounting standards and the Chinese accounting standards.
VIII. Main quarterly financial indicators
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 21,019,011,536.13 27,127,972,915.37 32,865,598,826.82 72,933,514,512.08
Net profit attributable to
1,349,512,048.43 1,739,717,980.42 1,600,431,354.99 2,380,859,002.73
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
1,167,112,633.01 1,355,153,041.64 1,471,991,374.50 2,021,340,170.98
after deduction of extraordinary
gain or loss
Net cash flows from operating
663,348,870.24 1,524,553,521.56 5,419,705,921.15 -322,841,395.95
activities
Whether there’s any significant difference between the financial indicators set forth above or aggregate amounts thereof and the
corresponding financial indicators contained in any quarterly or semi-annual report already disclosed?
□ Yes √ No
IX. Items and amounts of extraordinary gains or losses
√ Applicable □ N/A
In RMB
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item 2021 2020 2019 Remark
Gain or loss on disposal of non-current assets
(including allowance for impairment of assets that has -57,241,855.39 -35,503,173.93 -110,085,527.48
been written off)
Government grants recognized in profit or loss
(excluding government grants that are closely related
to the business of the Company and are provided in 853,542,165.37 450,749,695.89 232,311,428.35
fixed amount or quantity continuously according to
the applicable polices of the country)
Difference between
the original
carrying amount of
long-term
Interest in the fair value of the acquirees’ identifiable
investment and fair
net assets at the date of acquisition in excess of the
16,559,223.33 value of newly
investment cost of the relevant subsidiaries,
consolidated
associates and joint ventures
subsidiaries upon
change from the
equity method to
the cost method
Gain or loss on assets under entrusted investment or
95,298,693.93 113,778,335.78 89,722,710.32
management
Gain or loss on changes in fair value of financial
assets held for trading and financial liabilities held for
trading, and gain on disposal of financial assets held
602,993,325.33 837,100,369.42 131,736,631.37
for trading, financial liabilities held for trading and
available-for-sale financial assets, except for effective
hedges held in the ordinary course of business
Other non-operating income and expenses -12,600,634.71 30,554,498.37 -999,739.32
Mainly gain on
Other gain or loss within the meaning of derecognition of
-170,939,666.46 0.00 0.00
extraordinary gain or loss financial assets at
amortized cost
Less: Effect of income tax 211,043,425.20 214,489,873.68 55,533,801.99
Effect of minority interest (after tax) 61,644,659.76 45,628,950.13 9,305,165.76
Total 1,054,923,166.44 1,136,560,901.72 277,846,535.49 --
Other items of gain or loss within the meaning of extraordinary gains or losses:
□ Applicable √ N/A
We do not have any other item of gain or loss within the meaning of extraordinary gains or losses.
If the Company classifies any item of extraordinary gain or loss defined by or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Publicly Offering Securities - Extraordinary Gain or Loss as recurrent profit or loss, please
explain the reason.
□ Applicable √ N/A
We have not classified any item of extraordinary gain or loss defined by or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Publicly Offering Securities - Extraordinary Gain or Loss as recurrent profit or loss in the
reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section III Management’s Discussion and Analysis
I. Situations of our industry in the reporting period
During the reporting period, we are engaged in the research and development (R&D), manufacturing and sale of products in the
fields of consumer electronics, communication, automotive electronics and healthcare, among others. Our products and businesses
are diversified and vertically integrated, and cover components, modules and system assembly.
(I) Consumer electronics
In the industry of consumer electronics, the development and innovation of applied technologies and diversified growth of
consumer demands jointly promote the upgrading of consumer electronic products and related product lines, and continued growth of
the consumer electronics market size. According to Statista, the global consumer electronics market size grew at a compound annual
growth rate (CAGR) of 2.90% from 2015 to 2020, and is expected to reach USD1,098 billion in 2025. The advancement of 5G and
artificial intelligence (AI) technologies will promote the development of different kinds of smart mobile, smart wearable,
AR/VR/MR, smart home, smart display and other IoT devices. The acceleration of upgrading of terminal products will drive the
increase in the integration level of electronic components contained therein and improvement of technological level. The one-stop
solution providers that are able to provide the brand customers with better production processes and higher integration level and
require the input of less resources will get more orders for related components and finished products. Accordingly, the Company's
business expansion and industrial operations are expected to fully benefit.
(II) Communication and data center
In the field of communication and data center, the series of technical innovation and emerging of new technologies promote the
evolution from traditional IT infrastructure to data infrastructure, and along with the continuous development of the Internet,
e-commerce, video, cloud computing and other Internet vertical industries have been rapidly springing up, and the global data center
market has come into multiple periods of rapid growth. According to IDC, the shipments and sales of the global server market
reached 13,539,000 units and USD99.22 billion in 2021, representing an increase of 6.9% and 6.4% respectively. The global Internet
data center market size grew at a CAGR of more than 10% from 2012 to 2021.
Global server shipments from 2016 to 2021 Global server sales from 2016 to 2021
Global server shipments (10,000 units) Global server sales (USD100 million)
The ever increasing demands for new data centers by IT, telecommunication, banking, financial, service and investment (BFSI),
e-government and smart city projects, and wide application of AI and IoT technologies in the future will further promote growth of
the communication and data center market size. According to IDC, the global server market size is expected to reach USD126.5
billion in 2027.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
(III) Automotive electronics
Smart electric vehicles represent an opportunity of the century for the automotive industry of China. China has the largest
automotive market with the highest level of openness and inclusion and most consumers in the world, utilizes the most advanced
smart vehicle technologies and attracts all major carmakers in the world. China ranks among the first in the world in terms of number
of smart vehicle brands and models. At present, China’s smart vehicle market is transiting from the policy-driven period to the period
of market-driven high growth in an all-round way. In 2021, the sales volume of electric vehicles reached 3.52 million units in China,
representing an increase of 160% as compared with 2020. China has ranked first in the world in terms of sales volume of electric
vehicles for seven consecutive years, and the sales volume of electric vehicles in China is expected to further increase by 47% to
about 5 million units in 2022. The penetration of electric vehicles increased from 7.2% at the beginning of 2021 to 19% at the end of
2021, representing an exponential growth as compared with 10 years ago, and showing great potentialities of growth.
In 2021, the penetration of electric vehicles began to increase rapidly in China and the transition to clean
transportation is accelerating.
Penetration of electric vehicles
sales volume (k)
Source: China Association of Automobile Manufacturers
In addition to “electrification”, “intelligentization” and “interconnection” are also developing vigorously. Statistics show that
about 20% new passenger cars are equipped with driver assistance system, the penetration of L2 driver assistance system into the
electric vehicle market reaches 38%, electric vehicles has basically realized full coverage of Internet of Vehicles (IoV) functions, and
some major carmakers have begun to sell new vehicles powered by V2X technology. Chinese consumers are more willing to accept
smart electric vehicles, and medium- and high-end smart electric vehicles occupy increasingly greater shares on the business and
consumer markets. Traditional smart mobile phone players begin to enter the smart electric vehicle sector; on the other hand, electric
vehicle manufacturers begin to produce smart mobile phones. Along with the popularization of “intelligentization”, vehicles will
become large-sized mobile smart and computing terminals. In the next stage, carmakers need to build ecosystems to break through
the tight encirclement, connect vehicles with consumer electronics, create more consumption scenarios, and realize full coverage of
“human-vehicle-home” scenarios.
(IV) Our position in the industry
During the reporting period, we ranked first on the 34th list of top 100 electronic component manufacturers of China (2021)
published by the China Electronic Components Association, and were awarded the honorable titles of “Top 500 Private Enterprises
Of China”, “Top 500 Private Manufacturers Of China”, and “2021 Model of China’s Digital Economic Industry”, among others.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
II. Our main business in the reporting period
We concentrate our efforts on the specialization in and optimization of underlying technologies, made in-depth deployments in
acoustic, visual, power (wired/wireless), wireless communication and other fields to meet future demands. Our products have been
widely applied in the fields of consumer electronics, communication and automotive. By comprehensively mastering the
technologies relating to various components and modules, and super-precision manufacturing technologies accumulated over the
years, we give full play to our advantages in vertical integration, and continuously restructure the supply chain in the field of system
assembly, to create more value for our customers, thereby gaining customers’ support and confidence.
In launching a new product, we focus on the product quality, yield rate and optimization of production costs on the basis of
innovative production technology, intelligent automation and digital platform, thereby enabling us to make continuous and
substantial breakthroughs in new markets, new customers and new products. In the implementation of related controls, there is no
doubt that the automation technologies lay the strong foundation for our core competencies. Therefore, we attach great importance
to the continuous exploration of automatic and smart manufacturing technologies. Our core team’s spirit of in-depth exploration of
processes and determination to accomplish all tasks assigned guarantee the success in the development and design of automation
technologies. According to the requirements for appearance, size, functions and reliability of products, we disassemble and study all
manufacturing processes, and make efforts to solve process challenges with reference to our past experience and advanced
technologies available on the market. With the goal of zero loss and zero defect, we strive to realize the reasonableness,
standardization and automation of designs in terms of yield rate, efficiency, cost, etc.
After the completion of process study, we realize process design through automation, including automation of work stations,
handling and positioning, testing, warehousing, logistics and production processes. Standardization is the prerequisite for automation,
because standardized products cannot be made without the use of standardized equipment and processes. With respect to the products
that have a low demand and change frequently, we mainly use man-machine flexible automation technologies. In the design of
automatic equipment, we make plans for MES system, IoT access and key work station information flows needing to be controlled
simultaneously, and build a model of digital factory on that basis. Thereafter, we convert all problems and phenomenon into data, and
then process and judge the data systematically, and present the same in the form of visual reports, to realize whole-process
traceability of products, materials, people, equipment, fixtures, process technology and quality information, among others, implement
close-end control, and ensure the effective realization of automation. On that basis, we introduce digital models, use modeling
approaches to connect production with data flows, and through the use of big data, cloud computing, AI, digital twin and other
technologies, deeply explore the information and trends behind data, seek benefits from data, and finally realize intelligentization,
and self-judgment, self decision-making, self-adjustment and self-execution by machines, so that the machines are able to solve
tangible problems and predict intangible problems on their own, thereby achieving the long-term goal of smart manufacturing.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
1.精益化 3.数字化
工艺的深度拆解和前瞻研究 IOT、制造数字化集成
设计的合理化、标准化和简单化 可视化控制中心和管理
产线的精益布局规划 运营流程自动化贯通
1. Leanness 3. Digitalization
In-depth disassembly of and forward-looking research on Digital integration of IoT and manufacturing
processes Visual control center and management
Reasonableness, standardization and simplification of Automation of the whole operation process
design
Lean layout of production lines
2.自动化 4.智能化
搬运-加工-检测-物流-仓储的全流程自动化 机器自感知、自学习、自决策、自执行
柔性自动化系统分析 解决有形的问题和预测无形的问题
数据驱动管理决策
2. Automation 4. Intelligentization
Whole-process automation of handling, processing, testing, Self-sensing, self-learning, self decision-making and
logistics and warehousing self-execution of machines
Analysis of flexible automation system Solve tangible problems and predict intangible problems
Data-driven management decision-making
物理域 精益生产布局 精益工艺研究 工艺数字化 流程数字化
Physical field Lean production layout Lean process study Technological Process digitalization
digitalization
精益化 数字化 智能制造 信息域 制成自动化
Leanness Digitalization Smart manufacturing Information field Manufacturing automation
自动化 智能化 预测性分析 物流自动化 高级决策支持
Automation Intelligentization Predictive analysis Logistics Advanced decision-making
automation support
(I) Consumer electronics business
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
From the perspective of applications, consumer electronics, communication and automotive are our main product and business
segments. In the field of consumer electronics, we continue our product mix in prior years, follow the trends of metaverse, AIoT
smart life and high-speed transmission, and enrich our product offerings in a steady and orderly manner. Our product offerings
include acoustic products (such as TWS earphone), smart home products (such as 5G CPE and Wi-Fi 6 portable router), smart
terminal products (such as wearable watch and wristband, AR/VR/MR), computer accessories (such as Dock), intelligent stylus,
video conference equipment and wired and wireless high-watt rapid charging accessories for various PC/NB/mobile phone brands for
retail sale.
We have been engaged in the field of consumer electronics for years, while satisfying the customers’ demands, made continuous
breakthroughs to build the strong capability to provide customers with comprehensive solutions. We have the advantages in
intelligentization, digitalization and globalization on the vast consumer electronics market. We make dynamitic adjustments
continuously, and clearly understand the existing market and the incremental market. With respect to the existing market, such as the
business relating to PC and smart mobile phones, we have mature technical capabilities, capital equipment and customer resources.
As the most trusted partner of our customers, we are not only able to, in conjunction with our premium customers, achieve self-worth
in the field of premium products and the existing products we are good at, but also in the upgrading of products and technologies,
leverage our mature resources, grasp the opportunities to enter the market of higher-level products at optimal cost, and maximize the
rewards. With respect to the incremental market, such as health & wellness, metaverse and other applications, we believe that the
premium customers on the existing market will continue to take the lead. By leveraging our good reputation and solid partnership
with our customers built by us over the years, our management will continue to keep abreast of the market, analyze and accurately
grasp the situations of technology development of the industry from the perspectives of consumers, brand customers and supply
chain, continuously improve product attractions required by the incremental market, and make all-round deployments from
components, modules to system.
Though we face many external challenges, such as disengagement between China and the United States and geopolitics, we
have high hopes for and are confident about the future development of our consumer electronics business. In the past ten years,
through continuous upper-level industry guidance, development of designated customers, improvement of the quality and
development of high-quality supply chain, and with the long-term and strong support and investments in different areas, China has
gradually built the most complete and systemic consumer electronics supply chain in the world, and takes the lead in in-depth
deployment, talent pool, policy support and other issues in respect of supply chain on all market segments. In view of our strong head
start advantage and the competitive situation on the consumer electronics market, we keep improving and enhancing all kinds of
capabilities, and on the basis of our global deployment completed over the years and our stable strategic focus, develop incremental
businesses at home and abroad according to the development requirements of customers. The present and foreseeable situations show
that the strong will be always strong. Our strategic goals conform to those of our customers.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
智能音箱 快充适配器 VR眼镜 5G路由器 智能穿戴 机壳天线
Smart speaker Rapid charging VR eyeglasses 5G router Smart wearable Casing antenan
adapter
电子烟 无线充模组 声学模组 震动马达 5G模组 天线
Electronic cigarette Wireless charging Acoustic module Vibration motor 5G module Antenna
module
射频 线材线缆 机构件 连接器 核心工艺
智能制造
Radio frequency Wire and cable Mechanical Connector Core technology
components Smart manufacturing
(II) Communication business
Driven by 5G, big data and edge computing technologies, the ICT industry puts forward higher requirements for data
transmission, hardware equipment shows a tendency towards gradual opening of interfaces and high integration of functions, and
interconnect components show a tendency towards high speed, high density, high reliability and low loss. On the basis of the
application scenarios of our products in the field of data and communication, and centering on the application and development
trend of data center, we have gradually enriched our product offerings, and on the basis of electric connection (high-speed electric
connectors and cables), optical connection (AOC and optical modules), radio frequency (RF) communication (base station antennas,
base station filters, tower mounted amplifiers, duplexer, combiners, RRUs, AAUs and small base stations), and other existing
products, have developed thermal management (heat pipes, VC, axial fans, cold plates and water cooling radiators), industrial
connection and other products, further increasing our product coverage. In 2022, we will develop server and other complete unit
assembly business, center on the “complete unit + core components” double development strategy, and strive to grow into a
comprehensive solution provider offering all kinds of products in the field of data and communication.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
电连接产品线 服务器 交换机 整机组装产品线
Electric connection products Server Switch Complete unit assemblies
光连接产品线 综合布线 基础设施 热管理产品线
Optical connection products Cabling system Infrastructure Thermal management
products
汇聚交换机 接入交换机 数据中心机架群 机架内服务器群
Aggregation switch Access switch Data center rack cluster Server cluster inside rack
We have focused on the development of core technological capabilities and basic R&D capabilities through research of
simulation technology, new materials and new processes and application of testing technologies, and provide strong technical support
for communication interconnect products in different forms. With respect to system-level products, through disassembly of modules
and components contained in the products, and single-point manufacturing processes and technologies, we are able to realize highly
or wholly automated, efficient and high-quality production and manufacturing of large and small batches of products.
基础设施 服务器 综合布线 浸没机柜
Infrastructure Server Cabling system Immersion cabinet
精密模组 高速连接器 高速线缆 线缆模组
Precision module High-speed connector High-speed cable Cable module
滤波器 热管理 核心零部件 高速裸线开发
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Filter Thermal management Core components Development of high-speed
bare wire
精密冲压和注塑 射频 散热部件
Precision stamping and injection Radio frequency Radiator
molding
基础制造能力 压铸 机加 钣金
Basic manufacturing capability Die casting Tooling Sheet metal
冲压 注塑 表面处理 基础服务平台
Stamping Injection molding Surface treatment Basic service platform
本地工程服务中心 全球化采购 自动化设备开发 零件中心
Local engineering service center Global purchasing Development of automatic Component center
equipment
Due to the effect of disengagement between China and the United States and geopolitics, exports of the domestic
communication and data center industries face certain shocks and challenges. With respect to the further exploitation of opportunities
of external circulation, we always regard the technical capabilities as the foundation for business development, and driven by the
technologies and with the support of our strong precision manufacturing capability, actively exploit the overseas market. In addition,
we will firmly grasp the opportunities provided by the “Eastern Data, Western Computing” program and replacement with
home-made goods, focus on internal circulation, and actively seek new opportunities in the domestic communication industry. We
believe that we will get more and better business opportunities than traditional communication product manufacturers, as we will
apply our rich experience accumulated in the consumer electronics precision manufacturing industry to the new communication
industry.
(III) Automotive business
In view of the development of electric vehicles, we have made long-term plans for automotive business, and included wire
harness, connection system, new energy, smart interconnect, smart cabin and smart manufacturing in our product offerings.
Leverage the superior resources of the Group, enrich product offerings, and create driving force
for the growth of automotive tier-1 business
线束 整车线束 特种线束 充电枪
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Wire harness Vehicle wire harness Special wire harness Charging gun
连接器 低压连接器 高压连接器 高速连接器
Connector Low-voltage connector High-voltage connector High-speed connector
新能源 逆变器 智能网联 路测单元
New energy Inverter Smart interconnect Road-side unit
车载通讯单元 智能天线 智能驾舱 多媒体仪表
Telematics control unit Smart antenna Smart cabin Multi-media instrument panel
信息娱乐系统 域控制器 无线充电 电源网络隔离器
Infotainment system Domain controller Wireless charging Power and network isolator
智能制造 嵌件注塑
Smart manufacturing Insert molding
Wire harness is an essential system-level component for a vehicle, is flexible, important and widely used, covers all
configurations of a vehicle, and provides reliable power supply, signals and data to all electric appliances, so they serve as “arteries”
of the “neural network” of a vehicle. According to Markets and Markets, the global automotive wire harness market size was
expected to reach USD47 billion in 2021. Through vertical integration, we have grown into a comprehensive supplier specialized in
the design, validation and manufacturing of low-voltage and high-voltage vehicle wire harnesses, special wire harnesses, charging
guns and other products. We stick to the customer oriented service concept, and satisfy the customers’ demands with our efficient
customized design and development, production facilities located in the neighborhood of our customers, and our strong precision
manufacturing capabilities accumulated over the years. In additional to traditional carmakers, we have developed some major
emerging customers.
Automotive is one of the largest markets for connectors. Automotive connectors account for 22% in the global connector
industry, where smart electric vehicles are the largest growth driver. According to Bishop & Associates, the global automotive
connector market size was USD15.210 billion in 2019, and is expected to reach USD19.452 billion in 2025. We have designed and
developed all kinds of connectors required on vehicles, including low-voltage connectors, high-voltage connectors, high-speed
connectors and customized connection systems, among others. We exploit the existing customer market through our wire harness
business, and enhance the synergistic effect with our existing consumer electronic and business-type products, to promote growth of
business. Our proprietary gigabit Ethernet connector adopts a wholly shielded double cable connection structure, and can be widely
used on infotainment systems, ADASs, domain controllers and other products.
In order to satisfy the demands of the smart electric vehicle market, we launched key components of the power system of
electric vehicles, including battery disconnect unit (BDU), power distribution unit (PDU) and inverters. In 2021, the global
automotive PDU market size was USD7 billion, and the inverter market size was USD3 billion. PDU is designed to distribute and
manage electric power in the high-voltage system of new energy vehicles, and can integrate MBS master control, charging module,
DC module, PTC control module and other functions. BDU is specially designed for installation inside battery packs and is a kind of
distribution box. Inverter is a device that converts direct current in batteries into three-phase alternating current required by electric
motors, and a core component of new energy vehicles. The power output and battery life of electric motors directly depend on the
performance of inverters.
The IoV relies on the new-generation information communication technology, receives information from and transmits
information to moving vehicles, and can play an important role in vehicle safety, traffic control, information service, smart city and
intelligent transportation. At present, IoV applications are key projects of government and OEMs, and require coordination among
multiple devices, such as road-side unit (RSU) which collects environment, traffic condition, traffic sign and other information and
sends the same to vehicles, telematics control unit (TCU) which effects two-way communication between vehicles and external
networks, central gateway (CGW) which connects all electronic devices on a vehicle, and other products. We focus on the
development of wireless communication and automotive electronic products, and currently offer RSUs, TCUs and CGWs.
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According to Visteon, the global smart cabin market size was about USD44.7 billion in 2020, and is expected to reach USD73.8
billion in 2025. The penetration of smart cabin into new vehicles in China is expected to exceed 75% in 2025. At present, the basic
configuration of a smart cabin on the market includes digital instrument panel, streaming rearview mirror, HUD, rear seat screen and
IoV modules, among others, which can provide passengers with navigation, environmental monitoring, entertainment and other
directly perceivable information, satisfy diversified human-machine interaction requirements, provide better ride experience and
create more consumption scenarios. Our products include AR-HUD, infotainment system, cabin entertainment domain, LCD
instrument panel, driver monitoring system, power isolation module, etc., and USB port and wireless charging module are relatively
mature products. In the future, more consumer electronic functions will be applied in cabins, so we can fully leverage our
technologies accumulated over the years in the field of consumer electronics.
We also provide customers with smart manufacturing services, including insert molding, PCBA and other product services, by
leveraging our economy of scale and lean production.
In February 2022, we entered into a Strategic Cooperation Framework Agreement with Chery Holding Group, pursuant to
which, we and Chery New Energy Automobile Co., Ltd. will establish a joint venture specialized in R&D and manufacturing of
new energy vehicles in the form of ODM. This business platform will produce vehicles for brand customers, provide a frontier
R&D and mass production platform and access to the overseas market for our core automotive component business, and help us
develop our tier-1 business. We have been engaged in the field of consumer electronics for years, and accumulated a solid industrial
base and strong ODM capability, and are familiar with ODM operation and management model. Chery has rich experience in the
field of traditional vehicles, and solid technological base. Our superior products will have an opportunity to grow from 0 to 1
through this joint venture ODM platform and the incremental business provided by Chery, and we will leverage our advantages to
take part in the competition, in order to have our tier-1 products pass validation by the brand customers.
Along with the wide application of consumer electronics products on vehicles, our technologies, experience and customer
resources accumulated over the years in the field of consumer electronics will help our automotive business segment better grasp
the trend, and develop more products and customers. We will keep pace with our premium customers at home and abroad,
accurately grasp the development direction of technologies and the industry, and actively promote the technological upgrading of
products and reduction of costs through technology, to continuously provide our customers with products and solutions that are
competitive in both technology and business. Our medium-to-long term goal is to grow into a tier-1 manufacturer in the global
automotive component industry in the next three to five years.
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III. Analysis of core competencies
(I) Smart manufacturing under the lean production mode
Since our establishment, we have adhered to our original intention, focused on precision manufacturing, and through
development and application of advanced digital tools and automatic production processes, and continuous optimization of system
structure, organization and production mode, ensure our production system is able to rapidly adapt to the continuously expanding
production lines and meet the constantly changing market demands.
1. Modern optimization of smart process
We implement the lean production mode pursuant to 7-S management standard, carry out production according to demands,
meet the demands of different customers for different products with the optimal production rhythm, and have introduced many digital
system tools, for example:
(1) SAP system that connects all links in our internal operation, and connects customers through EDI system and suppliers
through SRM system;
(2) PLM system in respect of product R&D, that integrates product-related processes, designs software and simulation models,
and scientifically manages product data in the entire life cycle from design, development, production, marketing,
purchasing to after-sale services;
(3) MES system in respect of production and manufacturing that integrates human, tooling, equipment, jigs, materials,
customer demands and other factors, and uses AI and 5G technologies to implement optimal management of the whole
process from receipt of customer demands to delivery of products;
(4) WMS smart warehousing system that effectively deals with and manages our complicated inbound and outbound goods,
improves the goods turnover and inventory turnover, greatly reduces overstock and occupation of funds, and make
warehousing management more accurate, simple and efficient; and
(5) Budget management and BI system in respect of financial and accounting operation that realizes efficient preparation of
budgets and effective control, review and analysis, and manages and controls risks using big data.
We continuously optimize our management processes and production processes, implement customer oriented precise, scientific
and intelligent management, and constantly strive to improve our production efficiency and product yield.
2. Advanced automatic process design and application
As a global leading provider of diversified component solutions, high-quality precision manufacturing has always been one of
our core competencies. Since our listing, our precision manufacturing capability has developed from “automation with passive
positioning” to “automation with active positioning” and finally to “full automatic and smart” super-precision modularized
manufacturing today. In the automatic manufacturing of products, we connect product design with the design of automatic
manufacturing process seamlessly, and on the basis of ensuring our process capability at key work stations takes the lead in the
industry, have introduced AI visual robots to realize positioning, error detection and judgment in the production process of precision
electronic components, active and mutual positioning between components and jigs in the assembly process, and AI-assisted
inspection of appearance of component products. We widely use automated guided vehicles (AGVs) on production lines and
warehouses, to give support to modern smart logistics and warehousing system. In addition, we use big data and AI technologies, in
conjunction with our proprietary algorithms, to feed back real-time measuring and testing data, thereby ensuring the reliable quality
assurance and full traceability of products, and enabling the automatic production lines to have the deep learning capability, to realize
close-end control over the automation technology, which marks that we have formally entered into the stage of “smart precision
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
manufacturing” from “precision manufacturing” in the early stage and “quality assured precision manufacturing” in the middle stage.
3. Advanced comprehensive quality management system
Quality is the foothold of a company, and one of the most important core values provided by a company to its customers. Since
our establishment, we have adopted “quality is our lifeline” as one of our corporate values, established and improved the quality
management system using scientific and effective quality management approaches, and integrated quality assurance into the whole
process from design, manufacturing, inspection, packaging to transportation of products. We have a full set of advanced NPI ( new
product introduction) management process, and control quality from the development and design of products, to lay a solid basis for
successful mass production of products. In the each stage of development of a new product, such as POC (proof of concept), Proto
(model verification), EVT (engineering verification test), DVT (design verification test), PVT (process verification test) and MP
(mass production), etc., we take the highest requirement for mass production that each stage should satisfy as the criteria for approval
of entry into the next stage. We attach great importance to quality precautions, and implement design quality controls focusing on
quality, cost, manufacturing and automation, to shorten the period from engineering development to mass production. Due to our
excellent quality assurance capability, we have received praise from our customers continuously, and enhanced customer adhesion.
(II) Forward-looking strategic deployment
Our management keeps abreast of market trends and developments of the industry, through industrial researches and internal
seminars, reviews our development situations, makes in-depth analysis of the boundaries of our business and capabilities, enhances
the implementation of the “three five-year” strategic plan, and continuously explores the ways of diversified innovations and
development. Our development towards new products and new areas is based on multi-dimensional analysis of industrial
development, customer demands, competitors, the value we can provide, the space we can play, profitability, return on investment
and other aspects of the industries, customers and end users, and detailed sand table exercise by our core management.
1. Vertically integrated one-stop service capability
We focus on providing the market with perfect comprehensive solutions covering the entire industry chain. We provide full
coverage products from core components, modules to system-level assembly. We have proprietary key process capabilities, including
design and processing of molds/jigs, bare copper wire drawing, plastic particle molding, stamping/press forging, precision implant
molding, surface treatment, SMT, SiP and system-level assembly testing. In addition, we have a number of national CNAS
certification labs responsible for preliminary development validation, in-process quality inspection and failure analysis. Therefore,
we have vertically integrated production capabilities for core components, modules to system-level assembly that are relatively
complete, and have realized close-end management from key materials, parts, modules, core technologies to data of all stages, in
respect of all core acoustic, optical and electric module products, such as acoustic modules, vibration motors, voice coil motors,
antenna modules, wireless charging modules, and all kinds of terminal products, such as accessory system, IoT equipment, acoustic
wearable devices, smart wearable devices and smart mobile phones. With our understanding of the market demands over the years,
we are able to provide comprehensive one-stop professional services from product proposal, design, validation to mass production,
and even to logistic cooperation, after-sale quality tracking and warranty, thus further enhancing our competitive advantage in rapid
response to demands of customers, timely and efficient engineering cooperation and cost control with quality guaranteed.
2. Industrial synergistic effect
In order to provide the customers with greater and better values, in addition to our vertically integrated one-stop service
capability, we manage and integrate purchasing, R&D and manufacturing activities of consumer electronics, communication,
automotive, healthcare and other business segments in a centralized manner, to minimize the use of resources, accelerate trans-sector
technological convergence, improve production efficiency and product yield, seek synergistic effect, reduce overall costs for
customers, and ensure our return on investment.
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3. Global service deployment
Economic globalization is the profound background and fundamental trend of the development and evolution of global economy
in the 21st century. As the players of economic globalization, transnational companies directly promote the development of economic
globalization. From the perspective of market, in the era of global intelligentization, the electronics industry is the field with the most
thorough allocation of global resources and market competition at present.
After more than ten years’ development, we have gradually built a global system integrating development, sales, FAE (field
application engineer) and manufacturing. We now have 16 sales & FAE offices abroad, which, in addition to providing services to
our customers from nearby locations, actively attract sales, R&D and management talents of different fields throughout the world, to
introduce fresh blood and draw out the potential capacities of the teams. This approach not only can be horizontally replicated in new
product operation teams, but also can maintain the capability boundary of all functional teams and personnel at the same level. In
addition, in order to optimize our cost structure, we have established industrial zones and manufacturing facilities in some foreign
countries, to serve global brand customers. We are committed to satisfying the demands of customers, keep abreast of market
demands through our global sales & FAE network, accelerate R&D of new products, produce high value-added products; leverage
our local manufacturing capabilities throughout the world and advantages in smart manufacturing, shorten the production and
transportation cycle of products, further enhance the cost advantage of products, and improve quality and efficiency, to provide our
customers throughout the world with more competitive services.
(III) R&D and technological innovation
1. Continuous increase in R&D investment
Since our listing, we have placed R&D and innovation on an important position in our development, made continuous
investments in technology R&D, vigorously upgraded traditional manufacturing processes, continuously improved the level of
automatic production, and realized platformization of all precision manufacturing processes. We also attach great importance to the
long-term development of underlying materials and innovative production technologies. Our R&D team has continuously learned and
explored advanced precision manufacturing technologies and product applications in the countries and regions mastering frontier
technologies, and established a number of advanced technology development labs with certain core customers, to jointly develop
frontier technologies. We have established advanced production technology and manufacturing process R&D platforms in Dongguan,
Kunshan, Taiwan and the United States, and own a R&D and smart manufacturing team taking the lead in the industry. Our R&D
expenses are mainly classified into early stage R&D expenses and product upgrading expenses. Early stage R&D expenses are
incurred in connection with medium-to-long term product and business planning and deployment, and consist of investments in new
products and new areas and R&D expenses relating to underlying technologies, accounting for about 30% of our total R&D expenses.
Product upgrading expenses are incurred in the process from concept to NPI (new product introduction) of new solutions and new
products. All early stage R&D expenses and product upgrading expenses are expensed as incurred to reduce the pressure of asset
amortization costs in the future. Our R&D expenses have been continuously increasing, and totaled RMB16.763 billion in the past
three years. In the reporting period, our R&D expenses totaled RMB6.642 billion.
2. Innovation capabilities and patents
Innovation is the soul of the era of knowledge economy. As a hi-tech company, we always attach great importance to the
management and protection of intellectual properties (IPs), have established and continuously improved our IP policy, complied with
all IP laws and regulations, established IP department and engaged professionals to actively carry out application, protection,
operation and maintenance activities in respect of IPs. We encourage our employees to actively make innovations, reduce product
costs and increase our profits. On the other hand, we actively prevent risk of infringement, and protect our and our customers’
legitimate rights and interests. As of the end of this reporting period, we own 3090 valid patents, an increase of 44.46% as compared
with the end of 2020.
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We firmly believe that R&D and technological innovation are an important means to realize forward-looking deployment, and
will drive our development. The continuous and steady R&D investments will not only consolidate our leading position and
advantages in the industry, but also enhance our risk bearing capability in an ever-changing macro environment, and lay a solid
foundation for our continuous and rapid development in the future.
(IV) Corporate culture focusing on sustainable development
1. All-round customer-oriented culture
Since our establishment, we have adhered to the philosophy of “customer first”, and been committed to providing our customers
with complete and perfect comprehensive solutions, taking into comprehensive consideration response speed, engineering
cooperation, service quality, flexible delivery, cost control and other factors. Our leading technologies and excellent quality
assurance capability have helped us build a good brand image and reputation in the industry, and brought high-quality customers to
us. After years of cultivation, we have established stable cooperation relationships with a lot of global leading brands and
manufacturers in the fields of consumer electronics, communication and automotive. Over the years, we have kept pace with the
strategic steps made by our major customers, cautiously assessed the development trends of the industry from the perspective of
brand customers and end consumers, and made forward-looking deployments to occupy the new markets and new channels, to ensure
that we maintain the lead. We think what customers think and are eager to help the customers in need. Under the guidance of the
service philosophy of “customer first”, in addition to fulfilling the tasks assigned by the customers, we have also continuously
identified the pain points of the customers in their applications, fully leveraged our resource and platform advantages, and taken the
initiative to provide the customers with optimization proposals and suggestions, to highlight our competencies. Our commitment to
fulfill all missions has been generally recognized in the industry.
2. Spirit of workmanship that constantly strives for perfection
We are unable to make continuous improvement in smart manufacturing, product R&D, internal management, social
responsibility and other areas without our employees’ striving for perfection at work and accomplishment of each task in such
manner that is higher than the customer standard, stricter than the industrial standard and more excellent than what has been done
yesterday. That is the key internal driving force behind continuous recognition of us by the customers and our rapid development. In
the future, we will remain true to our original aspiration, not only carry on the spirit of workmanship that constantly strives for
perfection in our traditional superior fields, but also foster such spirit in our new teams and new business segments, strive to
accomplish the strategic goals in the “three five-year” plan period with the spirit of enterprise, and achieve a win-win situation with
our customers, shareholders and employees.
3. Talent selection, training, use and retention mechanisms deeply integrated with corporate culture
The core competencies of a company will be ultimately reflected in the soft power arising from in-depth integration and mutual
nourishment of talents and corporate culture. Core talents are the basis for the sustainable development of a company and the
cornerstone for cultivating the talents required by a company. We have adhered to the strategy of invigorating the business through
talents, and continuously improved our talent echelon building system and talent pool mechanism. We vigorously recruit outstanding
talents required in our development who recognize and conform to the distinctive characteristics of our corporate culture, to
continuously augment our team of core talents. On the other hand, we continuously improve our talent training system and talent
selection system. Along with the growth of our business, we continuously put forward new and reasonable requirements for our
employees, encourage them to make self break-through in the boundary of their capabilities, and continuously improve their personal
competencies and management capabilities, to contribute new energy to our development. Under the nurture of our corporate culture
of being pragmatic and enterprising, constantly striving for perfection, and fulfilling the missions, we provide the key employees
with a vast space to exercise their talents, and effectively stimulate their sense of mission, sense of achievement and sense of
collective honor. At present, we have recruited outstanding talents in materials, automation, electronic information, molds, business
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
management and other fields throughout the world, to create a talent pool for our sustainable development. We clearly know how to
attract and retain talents. To develop a virtuous circle of people creating the environment and the environment creating people
through in-depth integration of talents and corporate culture is our strongest core competency. Through effective talent mechanisms,
we have sufficient talents in our traditional superior fields, and have laid the foundation for our rapid development in new areas and
businesses.
IV. Analysis of main business
1. Overview
In 2021, the external environment became more complicated and severe. The domestic and overseas economic development
faced numerous pressures and was greatly affected by the changes unseen in a century and the epidemic disease of the century.
During the reporting period, we faced more risks and challenges in our development, for example, the repeated outbreaks of
COVID-19 at home and abroad causing interruption of the upstream supply chain and blockade of logistic routes, shortage of chips
and materials throughout the world, sharp rise of the prices of staple commodities and logistic and transportation costs, and delay in
the mass production and delivery of certain new products.
In addition, the learning curve of some new products/businesses during rapid growth and the regular cycle of some existing
products affected our financial indicators to a certain extent. During the reporting period, we invested in and controlled Rikai
Precision Technology (Yancheng) Co., Ltd. (“Rikai Yancheng”). Since 2021, due to great demands from customers for the precision
display structure module products for mobile phones in the coming years, the scale of operation of Rikai Yancheng increased rapidly.
However, the huge investment in the preliminary development and automation optimization in respect of the precision display
structure module products for mobile phones and large proportion of raw materials to the total cost of such products greatly affected
the overall product margin of Rikai Yancheng, and in turn affected the consolidated gross margin of Luxshare-ICT. In addition, after
experiencing the strong demands from industries/market and consumers for smart wearable acoustic products, the shipments of our
smart wearable acoustic products dropped sharply in 2021, which had a periodic effect on the operating revenue and net profit of this
business. The development of this business is expected to become stable in 2022. We will continue to leverage our core competencies,
give full play to our value as an important partner of our key customers, and promote the steady and high-quality development of this
business.
Facing the market competitions and internal and external pressures and challenges, we work hard to overcome the difficulties,
focus on the formulation and implementation of the “three five-year” strategic plan, and further enhance short-, medium- and
long-term forward-looking deployments taking into account the new situations and new opportunities. During the reporting period,
we fully leveraged our advantages in smart, digital and modular high-end manufacturing and flexible management, further
consolidated the foundation of the big precision and smart manufacturing platform, intensively implemented vertically integrated
allocation of resources, and effective coordination of all product lines and business segments, improved the efficiency of internal
organization, and made praise-worthy achievements in both existing and new businesses.
(1) Consumer electronics business
During the reporting period, we stuck to the strategy of diversified vertical integration and production penetration in the field of
consumer electronics. In 2021, with respect to smart wearable healthcare products, as an important member of our family of
system-level products, though the delivery of certain products was delayed due to the epidemic situation at home and abroad and
shortage of materials, our excellent performance in product development, automatic production process, premium quality, flexible
delivery and other areas was well recognized by our key customers, laying a solid foundation for the provision by us of in-depth and
diversified services, such as system assembly and different kinds of core components, in respect of this product line. With respect to
SiP products, despite the effect of overseas epidemic situation, our performance was generally mature and realized full coverage of
smart wearable healthcare products. On the basis of thorough assessment of return on investment, utilization rate and other operating
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
metrics, and in-depth analysis of this technology development route, taking into account our strategy of access to the overseas market
for system products, we will make further plans in respect of smart wearable acoustic products and peripheral functional module
system packaging business in the short term, and develop chip/semiconductor module packaging business in the long term. With
respect to system products for mobile phones, the joint venture platform established by us and our controlling shareholder vigorously
promoted smart and digital practices, and built an integrated smart platform covering product scheduling, production process analysis,
asset management, energy monitoring, personnel management, failure analysis, remote assistance and other activities, in order to
continuously improve our operation and management level, and effectively satisfy our customers’ increasingly personalized, high
quality and rapidly evolving demands. Our integrated smart development and production platform covering the whole process make
full preparation for large-scale replication and group/global operation in the days to come.
With respect to the vast consumer electronics market, we keep our eyes open, and wash grains of gold out of the sand. In the
recent years, by leveraging our strong core competencies and the demonstration effect of big customers, through our premium
services to many global well-known brand customers, we have made excellent achievements in smart terminal, smart life, computer
accessory and other solutions, and accumulated strength for the diversified development of our consumer electronics business at the
customer and product sides. Our products include acoustic, optical and electric modules, smart accessory system, acoustic system,
IoT equipment, wearable devices, etc. Through in-depth market/customer researches, we have established executable development
plans and growth objectives, and our cooperation with global customers having great potentialities has been upgraded from simple
cooperation in components and modules to integrated and all-round cooperation in complete unit system solutions. At present, we are
carrying out business as planned, with the support and recognition of the market and customers as what they did in the past. In view
of the relatively fragmented market, we will further focus on resources and make thorough assessments in the future, and strive to
develop related business into important drivers of our sustainable growth in the next five to ten years.
(2) Automotive business
In 2021, despite the weak market demand and chip shortage caused by the epidemic situation at home and abroad, the overall
development of our automotive business generally meets the expectations of our management. Along with the continuous
development of “electrification”, “intelligentization” and “interconnection” of vehicles, and trans-sector application of consumer
electronic products and technologies on vehicles, we actively grasp market opportunities, and fully leverage our technologies and
customer resources accumulated over the years in the fields of consumer electronics and communication, in order to ensure that our
existing automotive business catches the trend more accurately, and to develop product lines and strategic customers in a more
intensive and focused manner. At present, our main products cover automotive wire harnesses (vehicle wire harnesses, special wire
harnesses, charging guns, etc.), connectors (high-voltage, low-voltage and high-speed connectors, Busbar, etc.), smart new energy
(PDUs, BDUs, inverters, energy storage, etc.), smart interconnect (RSUs, TCUs, etc.), and smart cabin/control (domain controllers,
infotainment system and multi-media instrument panels). We will, guided by the trend of technology development and strategy to
focus on/enable customers, continuously provide our customers with products and solutions that are competitive in the world in both
technical and commercial metrics, by leveraging our manufacturing facilities and product R&D centers distributed around the
country, and the synergistic effect of domestic and overseas resources.
(3) Communication business
During the reporting period, our supercomputing center business grew rapidly, as a result of our continuous technology
development in the field of communication. However, the unreasonable interference by foreign entities of the same trade in the
context of China-US trade friction affected the continued development of our communication business in North America. On the
basis of further improving our capabilities in respect of existing high/low-frequency electric connector, optical connector and RF
communication products, during the reporting period, we focused on the development of thermal system management, industrial
connector and other new products and new businesses, further enhanced vertical integration of industries, trans-sector technological
convergence, and increased coverage of product lines, with a view to growing into a comprehensive data and communication solution
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provider. The global market has continuous demands for communication equipment. Along with the further development of smart
manufacturing, metaverse, smart driving and IoT, by virtue of our complete product lines and platforms, and our understanding and
application of frontier technologies, we will continuous exploit the global market and increase our market shares.
During the reporting period, our sales revenues totaled RMB153.946 billion, an increase of 66.43% year on year; profit totaled
RMB8.143 billion, an increase of 0.09% year on year; and net profit attributable to the owners of the parent totaled RMB7.071
billion, a decrease of 2.14% year on year.
2. Revenue and cost
(1) Components of operating revenue
In RMB
2021 2020
Y/Y %
% of operating % of operating
Amount Amount Change
revenue revenue
Total operating revenue 153,946,097,790.40 100% 92,501,259,211.54 100% 66.43%
By segment
Computer interconnect products and
7,856,595,729.78 5.10% 3,521,361,712.58 3.81% 123.11%
precision components
Automotive interconnect products and
4,142,675,174.19 2.69% 2,844,031,362.75 3.07% 45.66%
precision components
Communication interconnect products
3,269,476,642.60 2.12% 2,265,420,000.59 2.45% 44.32%
and precision components
Consumer electronics 134,637,995,600.46 87.46% 81,818,160,358.88 88.45% 64.56%
Other connectors and other business 4,039,354,643.37 2.62% 2,052,285,776.74 2.22% 96.82%
By product
Computer interconnect products and
7,856,595,729.78 5.10% 3,521,361,712.58 3.81% 123.11%
precision components
Automotive interconnect products and
4,142,675,174.19 2.69% 2,844,031,362.75 3.07% 45.66%
precision components
Communication interconnect products
3,269,476,642.60 2.12% 2,265,420,000.59 2.45% 44.32%
and precision components
Consumer electronics 134,637,995,600.46 87.46% 81,818,160,358.88 88.45% 64.56%
Other connectors and other business 4,039,354,643.37 2.62% 2,052,285,776.74 2.22% 96.82%
By region
Domestic market 10,493,247,599.10 6.82% 7,454,978,348.07 8.06% 40.75%
Overseas market 143,452,850,191.30 93.18% 85,046,280,863.47 91.94% 68.68%
By sales mode
Direct sales 153,946,097,790.40 100.00% 92,501,259,211.54 100.00% 66.43%
(2) Segments, products or regions representing more than 10% of operating revenue or profit
√ Applicable □ N/A
In RMB
Y/Y % Change Y/Y % Y/Y %
Gross
Operating revenue Operating cost in operating Change in Change in
margin
revenue operating cost gross margin
By segment
Consumer electronics 134,637,995,600.46 119,338,834,375.15 11.36% 64.56% 77.54% -6.48%
By product
Consumer electronics 134,637,995,600.46 119,338,834,375.15 11.36% 64.56% 77.54% -6.48%
By region
Domestic market 10,493,247,599.10 8,421,880,523.04 19.74% 40.75% 44.47% -2.06%
Overseas market 143,452,850,191.30 126,626,455,769.84 11.73% 68.68% 81.05% -6.03%
By sales mode
27
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Direct sales 153,946,097,790.40 135,048,336,292.88 12.28% 66.43% 78.23% -5.81%
In case of any adjustment to the statistic scale for main business data, the main business data of the most recent reporting period as
adjusted according to the statistic scale applied at the end of the current reporting period:
□ Applicable √ N/A
(3) Whether the Company’s revenue from sale of tangible goods is higher than the revenue from labor
service?
√ Yes □ No
Segment Item Unit 2021 2020 Y/Y % Change
Sales volume KPCS 692,107 510,910 35.47%
Computer interconnect products and precision
Output KPCS 735,779 537,997 36.76%
components
Inventories KPCS 43,672 27,087 61.23%
Sales volume 1000 sets 233,339 172,912 34.95%
Automotive interconnect products and precision
Output 1000 sets 256,542 184,502 39.05%
components
Inventories 1000 sets 23,203 11,590 100.20%
Sales volume KPCS 380,329 470,565 -19.18%
Communication interconnect products and
Output KPCS 413,793 514,389 -19.56%
precision components
Inventories KPCS 33,465 43,824 -23.64%
Sales volume KPCS 3,495,842 3,299,993 5.93%
Consumer electronics Output KPCS 3,773,559 3,661,402 3.06%
Inventories KPCS 277,717 361,409 -23.16%
Sales volume KPCS 467,754 312,258 49.80%
Other connectors and other business Output KPCS 508,283 348,814 45.72%
Inventories KPCS 40,529 36,556 10.87%
Analysis of changes in the relevant data over 30% year on year:
√ Applicable □ N/A
During the reporting period, our output and sales volume increased as a result of increase in sales.
(4) Performance of material sales contracts and material purchase contracts by the Company as of the end
of the reporting period
□ Applicable √ N/A
(5) Components of operating cost
Classification of segments
In RMB
2021 2020
Y/Y %
Segment Item % of operating % of operating
Amount Amount Change
cost cost
Computer interconnect products and
6,296,204,929.34 4.66% 2,765,866,774.16 3.65% 127.64%
precision components
Automotive interconnect products
3,475,111,291.70 2.57% 2,374,148,439.75 3.13% 46.37%
and precision components
Communication interconnect
2,700,268,416.55 2.00% 1,818,503,189.96 2.40% 48.49%
products and precision components
Consumer electronics 119,338,834,375.15 88.37% 67,217,502,600.73 88.71% 77.54%
Other connectors and other business 3,237,917,280.14 2.40% 1,593,986,044.98 2.10% 103.13%
Analysis
None
28
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(6) Change in the scope of consolidation during the reporting period
√ Yes □ No
Luxis Technology Limited, Yancheng Luxshare Precision Industry Co., Ltd., Hangzhou Xuntao Technology Co., Ltd., Rugao
Luxshare Business Management Service Partnership (LP), Lianxun Smart Equipment (Rugao) Co., Ltd., Luxshare Technology
(Xi’an) Co., Ltd., Luxshare Electronic Technology (Enshi) Co., Ltd., Luxis Technology (Kunshan) Co., Ltd., Luxshare Investment
Co., Ltd., Yancheng Luxshare Business Management Service Partnership (LP), Luxshare Smart Equipment (Yancheng) Co., Ltd.,
Luxis Precision Intelligent Manufacturing (Kunshan) Co., Ltd., Luxshare Smart Manufacturing & Electronic Service (Kunshan) Co.,
Ltd., Liding Electronic Technology (Dongguan) Co., Ltd., Luxshare Technology (Nanjing) Co., Ltd., Henan Leader Precision
Industry Co., Ltd. and Changzhi Luxshare Precision Industry Ltd., that were newly established by us, Rikai Precision Technology
(Yancheng) Co., Ltd. and Zhejiang Puson Electronic Technology Co., Ltd., that were acquired by us in cash, and Caldigit Holding
(Cayman) and Taihan Precision Technology Co., Ltd., that were controlled by us by contract during the reporting period, are
included in the scope of consolidation. Wuxi Huihong Electronics Co., Ltd., that was transferred by us, and Ji’an Jizhou Luxshare
Electronics Co., Ltd., Speedtech (LS-ICT) Co., Limited, Luxshare International Cable Co., Ltd. and Luxshare-ICT International B.V.,
that were liquidated and deregistered during the reporting period, are removed from the scope of consolidation.
(7) Material changes or adjustments in respect of business, products or services of the Company during the
reporting period
□ Applicable √ N/A
(8) Major customers and suppliers
Major customers of the Company:
Aggregate sales revenue from top 5 customers (RMB) 128,399,408,091.77
Proportion of aggregate sales revenue from top 5 customers to annual sales revenue 83.41%
Proportion of aggregate sales revenue from related parties among top 5 customers to annual sales revenue 0.00%
Particulars of top 5 customers:
No. Name of customer Sales revenue (RMB) % of annual sales revenue
1 Customer 1 114,055,710,068.00 74.09%
2 Customer 2 5,033,592,065.75 3.27%
3 Customer 3 3,621,465,625.47 2.35%
4 Customer 4 3,188,059,176.36 2.07%
5 Customer 5 2,500,581,156.19 1.62%
Total -- 128,399,408,091.77 83.41%
Other information of major customers:
□ Applicable √ N/A
Major suppliers of the Company:
Aggregate purchase amount from top 5 suppliers (RMB) 75,982,606,355.38
Proportion of aggregate purchase amount from top 5 suppliers to annual purchase cost 57.96%
Proportion of aggregate purchase amount from related parties among top 5 suppliers to annual purchase cost 0.00%
Particulars of top 5 suppliers:
No. Name of supplier Purchase amount (RMB) % of annual purchase cost
1 Supplier 1 68,529,282,195.97 52.28%
2 Supplier 2 2,220,179,015.43 1.69%
3 Supplier 3 1,986,097,524.70 1.52%
4 Supplier 4 1,718,167,435.10 1.31%
29
Luxshare Precision Industry Co., Ltd. Annual Report 2021
5 Supplier 5 1,528,880,184.17 1.17%
Total -- 75,982,606,355.38 57.96%
Other information of major suppliers:
□ Applicable √ N/A
3. Expenses
In RMB
2021 2020 Y/Y % Change Reason of material changes
Primarily due to increase in the scope of
Sales expenses 789,908,163.80 477,047,875.58 65.58%
consolidation and business growth
Primarily due to increase in the scope of
General expenses 3,741,908,783.50 2,463,953,208.63 51.87%
consolidation and business growth
Primarily due to fluctuations in foreign
Financial expenses 554,665,874.05 904,828,142.89 -38.70%
exchange rates
Primarily due to increase in the scope of
R&D expenses 6,642,300,402.74 5,744,805,136.33 15.62%
consolidation and R&D investments
Primarily due to increase in pre-tax
deduction of differences in the exercise price
Income tax expenses 322,238,643.64 644,764,928.70 -50.02%
of incentive shares, and additional deduction
of R&D expenses
4. R&D investments
√ Applicable □ N/A
Expected effect on the
Description of major
Purpose Progress Objectives future development of
R&D project
Company
Project relating to To develop new In progress To optimize the Our R&D and
acoustic products functions and new functions of the relevant manufacturing
processes of TWS products and realize capabilities in respect
earphones, headphones stable mass production of acoustic products
and other acoustic with high quality. will be improved,
products, develop new R&D cycle of new
products, and products will be
continuously improve shortened, and our
production efficiency. competencies will be
enhanced.
Project relating to To develop new Partially completed To improve the While getting
smart wearable functions of smart functions, automation recognition from
products wearable products and level of production customers, the results
improve the production lines, production of our smart wearable
process. efficiency and product business will be
yield of the relevant increased and our
products. competencies will be
enhanced.
Millimeter wave To develop new Completed To make breakthroughs Our advantage in the
dielectric antenna products and new in the use on traditional vertical integration of
30
Luxshare Precision Industry Co., Ltd. Annual Report 2021
components project performance, and millimeter wave components will be
reduce production costs. antennas, reduce the enhanced and market
dimensions of products share of the relevant
and effectively lower product lines will be
costs. increased.
New-type linear motor To optimize product In progress To optimize technical Our advantage in the
project mix and reduce R&D indicators and vertical integration of
costs. cooperate with the components will be
customers in the enhanced and market
relevant tests, mass share of the relevant
production and product lines will be
deliveries. increased.
SIP system level To develop new In progress To upgrade our Our advantage in the
double side packaging technologies and new traditional SiP module vertical integration of
project processes, and improve packaging technology, components will be
production efficiency. fully fill the bottom enhanced and market
space of chips, reduce share of the relevant
the residue stress after product lines will be
packaging, ensure the increased.
reliability of package
products, and improve
the technical
capabilities of product
packaging.
Project relating to To develop 400G In progress To expand the Our advantage in the
optical module high-speed optical application scenarios vertical integration of
products modules and and market for components will be
preliminary develop high-speed optical enhanced and market
next-generation optical modules, develop share of the relevant
modules. product series, enrich product lines will be
high-speed product increased.
lines and realize mass
production of the
relevant products.
Project relating to To develop In progress To develop proprietary Our technical
high-speed cables transmission cable interfaces for servers, advantage in the
assemblies that provide switches, communication and
high-speed signals for high-performance data center cable
super data centers and computers and other products will be
5G services. products, and increase enhanced and market
the speed. share will be
increased.
Project relating to To develop, improve Partially completed To improve our Our product lines and
automotive wire and upgrade vehicle technical capability to market share in the
31
Luxshare Precision Industry Co., Ltd. Annual Report 2021
harnesses wire harnesses, motor develop automotive field of automotive
wire harnesses, wire harness products, will be further
automotive steering satisfy different increased.
wire harnesses, new customization
energy battery pack requirements, and
wire harnesses and increase operating
other products. revenue.
Project relating to To develop high and Partially completed To improve our Our product lines and
automotive connectors low voltage connectors, manufacturing market share in the
high-speed connectors, capability and field of automotive
customized connector production efficiency. will be further
structures and other Our proprietary gigabit increased.
automotive connectors. Ethernet connector
adopts a wholly
shielded double cable
connection structure,
and has been widely
used on infotainment
systems, ADASs,
domain controllers and
other products.
Project relating to To develop Partially completed To improve our Our product lines and
power system of high-voltage manufacturing market share in the
electric vehicles high-current battery capability and field of automotive
disconnect control production efficiency. will be further
module, new-generation The process increased.
on-board bidirectional development, trial
DC power supply and production and PPAP
other power system certification in respect
products for electric of our new-generation
vehicles. on-board bidirectional
DC power supply have
been completed.
Project relating to To develop RSU, TCU Partially completed Our IoV smart RSU has Our product lines and
automotive smart and other automotive realized remote market share in the
interconnect products interconnect products. coverage, short field of automotive
communication delay, will be further
high success rate of increased.
message sending and
other functions.
Multi-cavity The robot will change Completed To replace manual Through automation
automatic sorting the operation mode of handling, identification, upgrading of
robot project manual cavity-by-cavity plate feeding and other production lines, our
plate feeding on the labor intensive production efficiency
32
Luxshare Precision Industry Co., Ltd. Annual Report 2021
production lines for operations, and realize and product yield will
micro products in the cavity-by-cavity plate be improved.
injection molding feeding for micro
workshop in the past, products made from
greatly improve injection molding.
workplace safety,
realize automatic
production, and
promote automation
upgrading in the
industry. Through
further upgrading of the
equipment, to improve
the stability of the
equipment during
production and finally
realize automatic
production of micro
products in the injection
molding workshop.
AI automatic The AI automatic Completed To replace manual Through automation
inspection system inspection system will handling, inspection upgrading of
project change the traditional and other labor production lines, our
operation mode of intensive operations, production efficiency
visual inspection, and realize precise and product yield will
realize automatic inspection of be improved.
inspection and promote appearance, dimensions
automation upgrading and other essential
in the industry. Through factors of precision
further upgrading of the components for
equipment, to improve electronic products.
the reliability and
stability of production,
and finally realize
unmanned workshops.
Particulars of R&D personnel:
2021 2020 Y/Y % change
Number of R&D personnel 16,103 15,154 6.26%
Proportion of R&D personnel to total number of employees 7.06% 8.79% -1.73%
Education background of R&D personnel - - -
Undergraduate 7,393 7,126 3.75%
Master 260 256 1.56%
Others 10,199 9,310 9.55%
Ages of R&D personnel - - -
Below 30 8,325 7,865 5.85%
30-40 6,897 6,507 5.99%
33
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Above 40 881 782 12.66%
Particulars of R&D expenses:
2021 2020 Y/Y % Change
Amount of R&D expenses (RMB) 6,642,300,402.74 5,744,805,136.33 15.62%
Proportion of R&D expenses to operating revenue 4.31% 6.21% -1.90%
Amount of R&D expenses capitalized (RMB) 0.00 0.00 0.00%
Proportion of capitalized R&D expenses to total R&D expenses 0.00% 0.00% 0.00%
Analysis of the cause and effect of significant change in the composition of R&D personnel:
□ Applicable √ N/A
Analysis of significant change in the proportion of R&D expenses to operating revenue compared with 2019:
□ Applicable √ N/A
Analysis and reasonableness of significant change in the proportion of R&D expenses capitalized:
□ Applicable √ N/A
5. Cash flows
In RMB
Item 2021 2020 Y/Y % Change
Cash provided by operating activities 152,974,773,173.48 101,344,544,382.43 50.95%
Cash used in operating activities 145,690,006,256.48 94,471,332,896.38 54.22%
Net cash flows from operating activities 7,284,766,917.00 6,873,211,486.05 5.99%
Cash provided by investment activities 59,103,742,247.41 56,134,501,620.87 5.29%
Cash used in investment activities 67,483,404,233.19 65,282,235,798.95 3.37%
Net cash flows from investment activities -8,379,661,985.78 -9,147,734,178.08 -8.40%
Cash provided by financing activities 42,545,854,141.42 31,843,182,893.74 33.61%
Cash used in financing activities 42,935,782,234.50 25,056,689,251.71 71.35%
Net cash flows from financing activities -389,928,093.08 6,786,493,642.03 -105.75%
Net increase in cash and cash equivalents -1,543,267,723.26 4,317,464,527.08 -135.74%
Analysis of main causes of material changes in the related data:
√ Applicable □ N/A
1. The cash provided by operating activities was RMB152,974,773,200, an increase of 50.95% year on year, primarily due to an
increase in sales, sales revenue collected and tax rebates received.
2. The cash used in operating activities was RMB145690006300, an increase of 54.22% year on year, primarily due to an increase
in the raw materials purchased and employee benefits paid.
3. The net cash flows from financing activities was -RMB389928100, a decrease of 105.75% year on year, primarily due to
repayment of short-term borrowings, loans and interest during the reporting period.
Analysis of significant difference between net cash flows from operating activities during the reporting period and net profit in
current year:
□ Applicable √ N/A
V. Analysis of non-main business
√ Applicable □ N/A
In RMB
34
Luxshare Precision Industry Co., Ltd. Annual Report 2021
% of total Whether or not
Amount Reason
profit sustainable
Income from investments and wealth
Investment income 689,386,649.74 8.47% management products classified as financial No
assets at fair value through profit or loss
Gain or loss on changes in fair Investment income on financial assets at fair
-115,737,751.66 -1.42% No
value value through profit or loss
Allowance for impairment of inventories and
Impairment loss on assets -162,790,335.12 -2.00% No
fixed assets
Non-operating income 21,096,536.60 0.26% Revenue from retirement of assets No
Non-operating expenses 45,672,434.05 0.56% Loss on disposal of fixed assets No
Gain on disposal of assets -45,266,592.65 -0.56% Disposal of production equipment No
Other gains 853,542,165.37 10.48% Government grants No
Impairment loss on accounts receivable and other
Credit loss -26,875,504.69 -0.33% No
receivables
VI. Analysis of assets and liabilities
1. Material changes in components of assets
In RMB
December 31, 2021 January 1, 2021
Y/Y %
% of total % of total Reason of material change
Amount Amount Change
assets assets
Cash and bank
14,204,618,186.43 11.78% 10,528,245,765.93 15.01% -3.23%
balances
Business growth (including
Accounts receivable 31,623,185,946.25 26.23% 13,839,155,340.47 19.73% 6.50% increase in the scope of
consolidation)
Contract assets 0.00% 0.00% 0.00%
Increase in inventory storage
level along with increase in our
Inventories 20,900,755,733.15 17.33% 13,211,009,381.15 18.83% -1.50% scale of operation (including
increase in the scope of
consolidation)
Investment properties 59,000,690.72 0.05% 47,592,110.24 0.07% -0.02%
Long-term equity
1,125,605,226.03 0.93% 1,208,540,333.29 1.72% -0.79%
investment
Increase in investment in factory
buildings, dormitories and
Fixed assets 34,113,259,322.43 28.29% 19,761,012,854.95 28.17% 0.12%
equipment (including increase in
the scope of consolidation)
Factory building, dormitory and
workshop renovation projects in
Construction in progress and equipment that has
3,685,336,499.02 3.06% 1,596,064,894.58 2.27% 0.79%
progress not yet been accepted (including
increase in the scope of
consolidation)
Adoption by us of the new lease
Right of use assets 425,011,542.28 0.35% 149,189,002.32 0.21% 0.14% accounting standard since
January 1, 2021
Replenishment of working
Short-term borrowings 11,919,635,337.99 9.89% 7,577,068,798.49 10.80% -0.91% capital (including increase in the
scope of consolidation)
Contract liabilities 268,506,246.98 0.22% 152,512,971.36 0.22% 0.00% Advances from clients
35
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Increase in loans to satisfy the
requirements of new projects
Long-term loans 5,025,096,193.09 4.17% 1,495,199,238.41 2.13% 2.04%
(including increase in the scope
of consolidation)
Adoption by us of the new lease
Lease liabilities 315,093,483.55 0.26% 144,462,685.91 0.21% 0.05% accounting standard since
January 1, 2021
Financial assets held Forward exchange facilities,
2,107,118,105.04 1.75% 3,160,064,470.41 4.50% -2.75% wealth management and other
for trading
investments
Prepayments for materials and
customs deposits (including
Advances to suppliers 406,016,492.61 0.34% 179,160,621.29 0.26% 0.08%
increase in the scope of
consolidation)
Share transfer prices, export
Other receivables 598,456,702.88 0.50% 407,990,780.79 0.58% -0.08% rebates and deposits, and
insurance indemnities receivable
Input tax credits and prepaid and
Other current assets 2,161,055,820.73 1.79% 1,804,485,645.49 2.57% -0.78%
refundable income tax
Factory building and workshop
Long-term deferred renovation expenses (including
733,015,722.42 0.61% 488,087,044.97 0.70% -0.09%
expenses increase in the scope of
consolidation)
Share-based payments,
unrealized profit on internal asset
Deferred tax assets 891,215,468.53 0.74% 355,834,434.21 0.51% 0.23% transactions, government grants,
deductible losses before tax and
other timing differences
Prepayments for equipment,
Other non-current engineering projects and land
1,904,305,181.49 1.58% 1,223,199,642.61 1.74% -0.16%
assets (including increase in the scope
of consolidation)
Notes payable 234,500,590.93 0.19% 128,572,111.54 0.18% 0.01% Increase in note transactions
Increase in raw materials
purchased in order to fulfill
Accounts payable 45,416,165,667.67 37.67% 23,051,557,603.83 32.86% 4.81% orders along with our business
growth (including increase in the
scope of consolidation)
Accrued expenses and security
Other payables 382,391,106.17 0.32% 146,162,097.14 0.21% 0.11%
deposits payable
Short-term bonds and
Other current inter-company trade account
3,623,423,072.87 3.01% 623,257,555.89 0.89% 2.12%
liabilities payable (including increase in
the scope of consolidation)
Government grants relating to
Deferred income 538,556,944.18 0.45% 425,345,982.64 0.61% -0.16%
capital
Accelerated depreciation of fixed
assets and temporary difference
arising from increase in
Deferred tax liabilities 1,272,092,467.86 1.06% 966,092,212.95 1.38% -0.32%
appraised value of business
combinations not under common
control
Analysis of high proportion of overseas assets:
□ Applicable √ N/A
36
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Assets and liabilities at fair value
√ Applicable □ N/A
In RMB
Aggregate Impairment loss
Gain or loss on
Beginning changes in fair recognized in Amount acquired in Amount sold in the Other
Item changes in fair Ending balance
balance value recorded the current the reporting period reporting period changes
value
in equity period
Financial assets
1. Financial assets held for
trading (excluding 2,854,676,050.46 73,732,025.24 19,182,537,140.74 20,119,745,754.45 1,991,199,461.99
derivative financial assets)
2. Derivative financial
305,388,419.95 -189,469,776.90 115,918,643.05
assets
3. Investment in other
138,074,571.56 96,140,150.00 1,761,426.86 235,976,148.42
equity instruments
Subtotal of financial assets 3,298,139,041.97 -115,737,751.66 96,140,150.00 19,182,537,140.74 20,119,745,754.45 1,761,426.86 2,343,094,253.46
Investment in equity
5,700,000.00 5,700,000.00
instruments
Total 3,298,139,041.97 -115,737,751.66 96,140,150.00 19,188,237,140.74 20,119,745,754.45 1,761,426.86 2,348,794,253.46
Financial liabilities 0.00 41,436.00 41,436.00
Other changes:
Other changes are the principal of other equity instruments included due to increase in the scope of consolidation.
Whether there’s any material change in the measurement properties of main assets of the Company during the reporting period?
□ Yes √ No
3. Encumbrances on assets as of the end of the reporting period
On September 30, 2021, the 4th meeting of the 5th Board of Directors considered and adopted the Proposal for Applying for an Acquisition Loan from the Banks and Pledging the Shares of the
Subsidiary, pursuant to which, we intended to apply to four banks for a syndicated acquisition loan of up to RMB3.4 billion, for a term of five years, which would be mainly used to replace our
capital contribution already made to Rikai Yancheng. We pledged 48.013% shares of Rikai Yancheng as security for such acquisition loan for a term of five years. The relevant information was
disclosed in our Announcement on Applying for an Acquisition Loan from the Banks and Pledging the Shares of the Subsidiary (No. 2021-080). During the reporting period, we completed the
procedures relating to the pledge of the shares of Rikai Yancheng for a term of five years. See “Section X Financial Report – VII. Notes to Items in Consolidated Financial Statements – 81.
Assets with restricted ownership or right of use”.
37
Luxshare Precision Industry Co., Ltd. Annual Report 2021
VII. Analysis of investments
1. Overall situation
√ Applicable □ N/A
Amount of investment in 2021 (RMB) Amount of investment in 2020 (RMB) Y/Y % Change
7,623,854,176.00 3,122,574,000.00 144.15%
2. Major equity investments acquired in the reporting period
√ Applicable □ N/A
In RMB
Investment
Status as of Whether or not Date of Disclosure
Method of Amount of Shareholding Source of Term of Expected income/ loss in
Investee Main business Partner Product type the balance involved in any disclosure (if reference
investment investment percentage funds investment income the reporting
sheet date litigation any) (if any)
period
Technology development,
technical consulting and
technical services in
respect of computer
accessories; design, R&D
and production of
precision stamping molds
(precision ≥ 0.02mm),
precision cavity molds
Rikai (precision ≥ 0.05mm), Announce
Precision metal product molds, ment No.
Technolog non-metal product molds 2021-017
Capital Self-owned Electronic February 4,
y and standard parts for 6000,000,000.00 50.01% N/A Long-term Paid in full 0.00 0.00 No published
injection funds components 2021
(Yanchen molds; production of on
g) Co., high-temperature resistant www.cnin
Ltd. molded insulating fo.com.cn
materials, stamped
hardware parts, rivets,
shafts, mechanical
components and other
components for 3C
electronics products;
industrial design, product
design (exterior design,
structural design, circuit
38
Luxshare Precision Industry Co., Ltd. Annual Report 2021
design, graphic design,
etc.); lease of own idle
equipment; wholesale,
commission agency
(except auction), import,
export and supporting
services in respect of the
aforesaid products and
related components.
Business not subject to
licensing: manufacturing
of computer software,
hardware and peripherals.
Total -- -- 6000,000,000.00 -- -- -- -- -- -- 0.00 0.00 -- -- --
3. Major non-equity investments that have not yet been completed in the reporting period
□ Applicable √ N/A
4. Investment in financial assets
(1) Investment in securities
√ Applicable □ N/A
In RMB
Gain or loss on Aggregate Amount
Initial Beginning Amount sold in Gain or loss in
Short Method of changes in fair changes in fair acquired in Ending carrying Accounting Source of
Type of security Security code investment carrying the reporting the reporting
name measurement value in the value recorded in the reporting amount item funds
cost amount period period
reporting period equity period
Investment
Stock listed on
Tony in other Self-owned
domestic or 603595 22,500,000.00 Fair value 114,221,319.04 96,057,510.08 162,951,644.67 0.00 0.00 96,057,510.08 210,278,829.12
Electronic equity funds
overseas market
instruments
Total 22,500,000.00 -- 114,221,319.04 96,057,510.08 162,951,644.67 0.00 0.00 96,057,510.08 210,278,829.12 -- --
Disclosure date of the announcement of the Board
of Directors approving the investment in securities
Disclosure date of the announcement of the
shareholders’ meeting approving the investment in
39
Luxshare Precision Industry Co., Ltd. Annual Report 2021
securities (if any)
(2) Investment in derivatives
√ Applicable □ N/A
In RMB0’000
% of ending
Allowance balance to the Actual gain or
Whether or not Initial
Type of Date of Date of Beginning Amount acquired in Amount sold in the for net asset as at loss in the
Counterparty Affiliation a related-party investment Ending balance
derivative commencement termination balance the reporting period reporting period impairment the end of the reporting
transaction cost
loss (if any) reporting period
period
Bank Non-affiliate No Forward 48,545.26 48,545.26 534,737.11 578,098.28 5,184.08 0.15% 19,739.28
Bank Non-affiliate No Option 463,920.39 463,920.39 1,659,594.71 1,725,671.42 397,843.68 11.27% 49,352.43
Total 512,465.65 -- -- 512,465.65 2,194,331.82 2,303,769.7 403,027.76 11.42% 69,091.71
Source of funds Self-owned funds
Whether or not involved in any litigation N/A
Disclosure date of the announcement of the Board of
January 23, 2021
Directors approving the investment in derivatives (if any)
Disclosure date of the announcement of the shareholders’
meeting approving the investment in derivatives (if any)
1. We conduct foreign exchange derivative transactions for the purpose of fixing costs, and avoiding and preventing foreign exchange and interest rate risks, and
prohibit any speculation.
2. We have established strict business management policy regarding financial derivative transactions, which contain explicit provisions on the principle of operation,
approving power, internal operating process, information segregation measures, internal risk controls, information disclosure and other issues relating to financial
derivative transactions, to control the risks associated with such transactions.
Analysis of risks associated with the derivatives held in the
3. We carefully examine the terms of contracts entered into with the relevant banks, and strictly implement the risk management policy to prevent legal risks.
reporting period (including without limitation market risk,
4. Our Finance Department continuously follows up on the changes in the market price or fair value of the relevant foreign exchange derivatives, promptly assesses
liquidity risk, credit risk, operational risk and legal risk) and
the changes in risk exposures of such foreign exchange derivatives, reports to the management on a regular basis, promptly reports the abnormal situations
related risk control measures
discovered, calls attention to the relevant risks, and takes the appropriate emergency measures.
5. In order to prevent any delay in the delivery of forward exchange contracts, we attach great importance to the management of accounts receivable, and have
established safety management measures to prevent any delay in the payment of accounts receivable.
6. Our Internal Audit Department is responsible for supervising and auditing the decision-making, management, execution and other issues in respect of foreign
exchange derivative transactions.
Changes in the market price or fair value of the derivatives
held in the reporting period (in the analysis of the fair value Change in the fair value of a foreign exchange derivative is the difference between its fair market price in the month in which the delivery date determined by the
of derivatives, the specific approaches, assumptions and Company falls and its contract price.
parameters used shall be disclosed)
40
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether there’s any material change in the accounting
policies and accounting principles for the measurement of
No material change
derivatives in the reporting period as compared with the
preceding reporting period
The Company conducts foreign exchange derivative transactions for the purpose of avoiding foreign exchange risk arising from fluctuations in the foreign exchange rates
Special opinion issued by the independent directors of RMB, and effectively controlling the uncertainties of costs caused by foreign exchange risk. The Company has established the Business Management Policy Regarding
regarding the Company’s investment in derivatives and Financial Derivative Transactions, to enhance risk management and control over foreign exchange derivative transactions. In addition, the Company only provides
related risk control measures self-owned funds, rather than any offering proceeds, as deposit for derivative transactions. The review, voting and other procedures relating to such transactions have
complied with the Company Law, the AOA and other applicable regulations.
5. Use of offering proceeds
√Applicable □N/A
(1) Description of use of offering proceeds
√ Applicable □ N/A
In RMB0’000
Total amount of
Total amount of Aggregate amount Total amount of offering Aggregate amount of Percentage of Total amount Purpose and
Total offering proceeds
Year of Method of offering proceeds of offering proceeds whose purpose offering proceeds offering proceeds of unused whereabouts of
offering that has remained
offering offering used in the proceeds that has was changed in the whose purpose has whose purpose offering unused offering
proceeds unused for more
reporting period been used reporting period been changed has been changed proceeds proceeds
than two years
Public offering
2020 of convertible 300,000 24,478.69 298,881.41 0 0 0.00% 0 N/A 0
corporate bonds
Total -- 300,000 24,478.69 298,881.41 0 0 0.00% 0 -- 0
Description of use of offering proceeds
Pursuant to the Reply on Approval of Public Offering of Convertible Corporate Bonds by Luxshare Precision Industry Co., Ltd. from the China Securities Regulatory Commission (CSRC), we publicly issued 30000000 convertible
corporate bonds of par value of RMB100.00 each, and raised RMB3000000000.00 in total. After deduction of the underwriter fee and sponsor fee of RMB14,400,000.00 (inclusive of tax) paid to our underwriter, CITIC Securities
Co., Ltd., the total subscription amount received was RMB2985600000.00, and after deduction of legal fee, audit and capital verification fee, credit rating fee, information disclosure and other charges, the net proceeds from this
offering were RMB2984743424.52.
In 2020, we used the offering proceeds of RMB2,744,027,590.66, of which, RMB2,744,027,273.53 was invested in the relevant fund-raising investment projects (RMB2,001,653,153.13 was used to replace to the amount
pre-invested), and RMB317.13 was used to pay the relevant account management fee, service charge and other charges.
In 2021, we used the offering proceeds of RMB 244,786,916.51, of which, RMB244,786,780.12 was invested in the relevant fund-raising investment projects, and RMB136.39 was used to pay the relevant account management fee,
service charge and other charges. The interest generated by the offering proceeds in 2021 is RMB657,387.96. As of December 31, 2021, the balance of the account of offering proceeds was RMB0.00, and the special account for
depositing the offering proceeds was cancelled.
(2) Committed fund-raising investment projects
√ Applicable □ N/A
In RMB0’000
41
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether
Whether the Progress of Whether the
Total Total Amount Aggregate amount Date that the Income there’s any
project has investment as of project has
Committed investment project and use of committed investment invested in the already invested as project is ready earned in the significant
been changed the end of the produced
over-raised funds investment amount as reporting of the end of the for its intended reporting change in the
or partially reporting period the desired
amount adjusted (1) period reporting period (2) use period feasibility of
changed (3) =(2)/(1) result
the project
Committed investment project
Smart mobile terminal module production
No 110,000 110,000 24,249.84 110,145.15 100.13% March 1, 2021 84,759.2 N/A No
line upgrading and expansion project
Smart wearable equipment components
production line upgrading and expansion No 60,000 60,000 25.23 60,031.76 100.05% May 1, 2021 33,952.62 Yes No
project
New smart wearable equipment project
with an annual production capacity of 4 No 60,000 60,000 0.04 60,026.58 100.04% August 1, 2020 12,682.33 Yes No
million sets
Replenishment of working capital No 70,000 70,000 203.56 68,677.91 98.11% N/A No
Subtotal - 300,000 300,000 24,478.67 298,881.4 -- - 131,394.15 - -
Use of over-raised funds
N/A
Total - 300,000 300,000 24,478.67 298,881.4 -- -- 131,394.15 - -
Failure to meet the scheduled progress and The smart wearable equipment components production line upgrading and expansion project failed to produce the desired result, primarily due to shortage of critical raw materials,
produce the desired result and reason resulting in a decrease in the operating results. We activelystocked up with the relevant raw materials, so the profit of the project reached 96.62% of the predicted profit in 2021, and
thereof (please describe on a project by 99.14% of the predicted profit in aggregate.
project basis)
Reason of significant change in the None
feasibility of the project
Amount and use of over-raised funds and N/A
progress of use thereof
Change in the place of the fund-raising N/A
investment project
Adjustment of the method of N/A
implementation of the fund-raising
investment project
Funds already invested in the fund-raising Applicable
investment project
We have already invested RMB2001653153.13 of self-raised funds in the projects for which the public offering of convertible corporate bonds was made in 2020 prior to the
completion thereof, as verified by BDO China Shu Lun Pan Certified Public Accountants LLP in its Report Xin Kuai Shi Bao Zi [2020] No. ZB11783 dated December 1, 2020.
42
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Temporary replenishment of working N/A
capital with the unused offering proceeds
Amount of surplus offering proceeds and N/A
reason thereof
Purpose and whereabouts of unused As of December 31, 2021, the balance of the account of offering proceeds was RMB0.00, and the offering proceeds were used in full.
offering proceeds
Problems and other matters existing in the None
use and disclose of offering proceeds
(3) Changes in the fund-raising investment projects
□ Applicable √ N/A
There’s no change in the fund-raising investment projects during the reporting period.
VIII. Sale of material assets and equities
1. Sale of material assets
□ Applicable √ N/A
No material asset has been sold during the reporting period.
2. Sale of material equities
□ Applicable √ N/A
IX. Analysis of major subsidiaries and associates
√ Applicable □ N/A
Major subsidiaries and associates representing more than 10% of the net profit of the Company:
In RMB
Company name Type Main business Registered capital Total assets Net assets Operating revenue Operating profit Net profit
Luxshare Purchase and sale of electronic products, data lines, connection
Precision Subsidiary lines, connectors, computer and peripherals, plastic and hardware USD5,000,000 59,466,332,306.97 5,491,597,678.03 135,508,345,248.07 3,286,048,713.01 3,236,547,298.11
Limited products.
Sales and services in respect of internal and external connection
ICT-LANTO
Subsidiary lines for IT, communication and consumer electronic applications, USD153,290,323 39,670,045,411.95 3,756,939,895.20 33,200,135,705.13 860,084,363.00 729,281,287.52
LIMITED
and precision connectors.
Rikai Precision subsidiary Technology development, technical consulting and technical RMB6,264,312,296 32,118,051,618.12 10,996,563,441.13 49,727,123,010.93 1,255,106,809.05 1,092,231,638.01
43
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Technology services in respect of computer accessories; design, R&D and
(Yancheng) Co., production of precision stamping molds (precision ≥ 0.02mm),
Ltd. precision cavity molds (precision ≥ 0.05mm), metal product molds,
non-metal product molds and standard parts for molds; production
of high-temperature resistant molded insulating materials, stamped
hardware parts, rivets, shafts, mechanical components and other
components for 3C electronics products; industrial design, product
design (exterior design, structural design, circuit design, graphic
design, etc.); lease of own idle equipment; wholesale, commission
agency (except auction), import, export and supporting services in
respect of the aforesaid products and related components. Business
not subject to licensing: manufacturing of computer software,
hardware and peripherals.
Computer peripherals, connection lines and connectors; new-type
electronic components (electronic devices), instruments and
accessories for communication and IT purpose, plastic, rubber and
hardware products; research, development, production and sale of
special electronic equipment, testing instruments, tools, molds,
remote control dynamic models and related supplies and
components; production and sale of power supply units and
wireless transmission products; development of software; import
and export of goods and technology (except any business that is
Lanto
subject to licensing, restricted or prohibited pursuant to the
Electronic Subsidiary RMB2320000000 18,989,845,478.63 7,396,344,211.40 24,850,269,766.84 1,530,454,712.74 1,374,091,215.23
applicable laws and administrative regulations) (any business
Limited
subject to approval according to law may only be operated with the
approval of the competent authorities). Business not subject to
licensing: manufacturing of automotive components and
accessories; research and development of automotive components;
wholesale of automotive components and accessories; sale of
mechanical components and components; manufacturing of
opto-electronic components; sale of opto-electronic components;
research and development of special electronic materials; research
and development of household appliances.
44
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Subsidiaries acquired and disposed of during the reporting period:
√ Applicable □ N/A
Effect on the production, operation and
Company name Method of acquisition or disposal
results of the Company taken as a whole
No significant effect on the production,
Rugao Luxshare Business Management Service
Newly established operation and results of the Company
Partnership (LP)
taken as a whole
No significant effect on the production,
Luxis Technology Limited Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Precision Industry (Yancheng) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxis Technology (Kunshan) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Electronic Technology (Enshi) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Lianxun Smart Equipment (Rugao) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Technology (Xi’an) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxis Precision Intelligent Manufacturing
Newly established operation and results of the Company
(Kunshan) Co., Ltd.
taken as a whole
No significant effect on the production,
Liding Electronic Technology (Dongguan) Co.,
Newly established operation and results of the Company
Ltd.
taken as a whole
No significant effect on the production,
Luxshare Smart Manufacturing & Electronic
Newly established operation and results of the Company
Service (Kunshan) Co., Ltd.
taken as a whole
No significant effect on the production,
Luxshare Investment Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Yancheng Luxshare Business Management
Newly established operation and results of the Company
Service Partnership (LP)
taken as a whole
No significant effect on the production,
Luxshare Technology (Nanjing) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Smart Equipment (Yancheng) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Changzhi Luxshare Precision Industry Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Hangzhou Xuntao Technology Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Henan Leader Precision Industry Co., Ltd. Newly established operation and results of the Company
taken as a whole
CALDIGIT HOLDING LIMITED Controlled No significant effect on the production,
45
Luxshare Precision Industry Co., Ltd. Annual Report 2021
operation and results of the Company
taken as a whole
No significant effect on the production,
Taihan Precision Technology Co., Ltd. Controlled operation and results of the Company
taken as a whole
No significant effect on the production,
Capital injection and acquisition of
Rikai Precision Technology (Yancheng) Co., Ltd. operation and results of the Company
control
taken as a whole
No significant effect on the production,
Zhejiang Puson Electronic Technology Co., Ltd. Purchase of shares operation and results of the Company
taken as a whole
No significant effect on the production,
Caseteck Singapore PTE. LTD. Purchase of shares operation and results of the Company
taken as a whole
No significant effect on the production,
Ji’an Jizhou Luxshare Electronics Co., Ltd. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Speedtech (LS-ICT) Co., Ltd. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare-ICT International B.V. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare International Cable Co., Ltd. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Wuxi Huihong Electronics Co., Ltd. Sale of shares operation and results of the Company
taken as a whole
Particulars of major controlled subsidiaries and associates:
N/A
X. Structured entities controlled by the Company
□ Applicable √ N/A
XI. Prospects for future development of the Company
1. Situations of the industry
In recent years, despite certain fluctuations, the global smart mobile phone market size has been growing generally. According
to IDC, the global smart phone shipments reached 1.35 units in 2021, representing an increase of 7% year on year. After the arrival
of the 5G era, the CAGR of the global smart mobile phone market is expected to reach 3.6% from 2020 to 2025. The application of
new-generation communication technologies will further drive the market demands for mobile phones, give rise to competitions over
diversified functions and upgraded performance on the existing market for mobile phones, and accelerate the upgrading of precision
electronic components and assemblies, resulting in an increase in the market size of precision electronic components and assemblies,
and product variety. The advancement of 5G and AI technologies will promote the development of different kinds of smart mobile,
smart wearable, AR/VR/MR, smart home, smart display and other IoT devices. Driven by the IoT ecosystem and market trends and
call for green and environment friendly sustainable development, the terminal products having smart interconnect, health check,
environment friendly and other functions will deeply affect people’s habits and customs, and be widely accepted by consumers of all
ages. The acceleration of upgrading of terminal products will drive the increase in the integration level of electronic components
contained therein and improvement of technological level. The one-stop solution providers that are able to provide the brand
customers with better production processes and higher integration level and require the input of less resources will get more orders
for related components and finished products. Our business development and industrial operation are expected to fully benefit from
this trend.
In the field of communication and data center, the series of technical innovation and emerging of new technologies promote the
46
Luxshare Precision Industry Co., Ltd. Annual Report 2021
evolution from traditional IT infrastructure to data infrastructure, and along with the continuous development of the Internet,
e-commerce, video, cloud computing and other Internet vertical industries have been rapidly springing up, and the global data center
market has come into multiple periods of rapid growth. Driven by 5G, big data and edge computing technologies, the ICT industry
puts forward higher requirements for data transmission, hardware equipment shows a tendency towards gradual opening of interfaces
and high integration of functions, and interconnect components show a tendency towards high speed, high density, high reliability
and low loss. In the technology evolution from 4G to 5G, base stations tend to have more ports and more wave numbers. Small size
and weather resistance put forward increasingly high requirements for precision manufacturing. Compared with manufacturers of
traditional communication products, we will leverage our rich experience in precision manufacturing of consumer electronic products
in the new communication business, and are expected to get more and better business opportunities. The communication interconnect
market is witnessing rapid upgrading of products, and enters an era of tremendous data. Along with the sharp increase in data volume,
the demands for interconnect products for data processing will grow sharply.
The development of 5G communication technology, automotive wireless communication technology, AI and other
new-generation information technologies and ever increasing demands of consumers for automotive safety and entertainment during
ride, among others, will promote the continuous increase in the electrification level of vehicles, resulting in further extension of
application scenarios for automotive electronics, and increase in penetration rate, which will be beneficial for the continuous and
rapid development of the industry of automotive electronics. As the future development direction of vehicles, new energy vehicles
enjoy the support of national policies, their market size grows steadily and the penetration of electric vehicles increases continuously.
China has the largest automotive market with the highest level of openness and inclusion and most consumers in the world, utilizes
the most advanced smart vehicle technologies and attracts all major carmakers in the world. China ranks among the first in the world
in terms of number of smart vehicle brands and models. The existence of a variety of players on the automotive market will promote
the industry to make innovations, and bring more opportunities and challenges to component manufacturers. We have built a
complete development framework covering components, modules, sub-systems and whole systems, and made complete deployments
for core products.
2. Future growth strategy
On the basis of our core management’s forward-looking plans in respect of market, products and customers, and through our
employees’ unremitting efforts to work conscientiously, fulfill all tasks and make innovations, we have made diversified, integrated
and coordinated strategic deployments in the fields of consumer electronics, communication and automotive. In light of the new
market situations, we clearly know that opportunities coexist with challenges, and will keep investing in the future, and give full play
to our strong core competencies and advantages in various areas, to provide more core value for the industry and our customers.
In the next few years, the consumer electronics business will continue to occupy an important position in the Company. We will
continue to implement and deepen the concept of vertical integration from components, modules to system, and strive to change the
traditional supply ideas and approaches, restructure the supply chain and maximize the synergistic effect, to continue to improve our
capability to create value for our customers and seek sustainable development. Meanwhile, with respect to certain core modules and
processes, we will follow the strategic principle of “old products, new customers and new market”, strive to extend and deepen the
application of products, and increase their shares on different markets and among different customers, to further improve our ability
to prevent operating risks. In light of the general economic development trend of enhancing internal and external circulations, and the
general background that huge demands for consumer electronic products will be stimulated, the smart consumer electronic products
that change life with technology will grow vigorously. Our products include smart wearable, smart home, smart display, etc. We have
strong comprehensive capabilities in respect of core components and system assembly for complete units, and have made full
preparations for new products/businesses. In the field of AR/VR/MR, we will make complete and in-depth product deployment,
leverage our remarkable advantages in production process, lean production, automation and other areas, and strive to make good
achievements in the new area. In the field of communication interconnect, by focusing on technology development and combining
the efforts of enterprises, universities and research institutes, we are leading the way in certain market segments in the world. In the
context of the “Eastern Data, Western Computing” project, we will actively exploit all-round and multi-level development
opportunities. In the future, we will adhere to the strategic principle of integrating “application, development and early research”,
closely follow the market trends and frontier technologies, and strive to make all-round breakthroughs on more market segments.
With respect to the radio frequency communication business, we will focus on the strategic plan of “core components + modules +
system”, make continuous investments in design and R&D, improve the capability to produce core components on our own, and
improve our internal operation efficiency in lean production, supply chain management and other areas through transformation and
upgrading towards digitalization. Facing the business opportunities brought by “electrification”, “intelligentization” and
“interconnection” of vehicles to Chinese automotive companies, we have established clear strategic objectives, that is, to focus on the
tier-1 core component market. In the waves of electrification of automotive consumption, the stable supply pattern in the past will be
broken, and comprehensive manufacturers that have rich experience in both the fields of consumer electronics and automotive will
get more business opportunities. In the next few years, we will continue to apply our experience of precision manufacturing in the
field of consumer electronics and communication and our capability to develop communication-level high speed transmission
solutions to the automotive business, and give full play to our advantages. Meanwhile, we will continuously improve our tier-1
47
Luxshare Precision Industry Co., Ltd. Annual Report 2021
capabilities on the basis of our joint venture vehicle ODM platform, and embrace the new challenges and new opportunities brought
by the flourishing era of smart EV.
3. Business plan for the next year
In 2021, though we faced all sorts of challenges from the internal and external environment, we always stood in awe of market
opportunities. We worked hard to fulfill all tasks and overcome all kinds of difficulties, while accomplishing the objectives
established at the beginning of the year, and developed the business plan for the next year,
In 2022, we will continue to exploit our main business, and firmly implement the established business plans. While seeking new
opportunities in respect of component, module and system solutions on the consumer electronics, smart mobile, smart wearable and
other IoT markets, such as display modules for smart mobile terminals, rear cover modules for smart mobile terminals, voice coil
motors, RF front modules, AR/VR/MR, we will focus on the development of automotive, communication, industrial, energy,
healthcare and other new markets, new materials, new processes, new applications and new technologies. With respect to entities and
businesses newly acquired or incubated, we will fully leverage our strengths and give support in customer resources, supply chain
resources, lean production, automation, digitalization, intelligentization, etc., in order to achieve the strategic objectives of rapid
cultivation and benefit amplification. With respect to the automotive business, we will continue to cooperate with our domestic and
foreign brand customers in the development of components, and on the basis of automotive “nervous” system, further expand the
lines of connectors (high-voltage, low-voltage and high-speed connectors, Busbar, etc.), new energy (PDUs, BDUs, inverters, energy
storage, etc.), smart cabin (domain controllers, infotainment system, multi-media instrument panels, etc.), smart interconnect (RSUs,
TCUs, etc.), and other products. Meanwhile, in reliance on the vehicle ODM platform jointly established with Chery that provides
our core automotive component business with a frontier R&D, design and mass production platform and access to the overseas
market, we will vigorously develop our tier-1 business. Our superior products will have an opportunity to grow from 0 to 1 through
the incremental business provided by other brand customers of this ODM platform and Chery, and we will leverage our advantages
to take part in the competition, to have our tier-1 products pass validation by the brand customers. Our medium-to-long term goal is
to grow into a tier-1 manufacturer in the global automotive component industry in the next three to five years. With respect to the
communication business, we always regard the technical capabilities as the foundation for our business development. We will drive
the growth of electric connection, optical connection, RF communication, thermal management and other existing core component
products by leveraging our technologies and strong precision manufacturing capability, and through vertical integration, make further
deployments in the server and other whole unit assembly business, center on the “complete unit + core components” double
development strategy, and strive to grow into a comprehensive solution provider offering all kinds of products in the field of data and
communication. In 2022, while seeking business development, we will work harder to improve our operation and management
capabilities, further enhance our platforms to ensure that they meet the development requirements of the relevant business segments,
and incorporate digital management in all links in operation. With respect to organization management, cadre management and
performance incentives, we will continue to explore the ways to upgrade and optimize the current management modes, through
continuous improvement of mechanisms, effectively arouse the initiative of cadres, and pool the wisdom and efforts of everyone, to
give full play to the organizational effectiveness.
4. Capital required for future development strategy and capital utilization plan
As of December 31, 2021, our equity-debt ratio was 62.03%. In 2022, our business is expected to maintain rapid growth, and the
exploitation of new markets and entry of production of new projects require enormous capital. Therefore, we published the financing
plan by private offering of shares in February 2022, in order to support our sustainable development in the diversified field of
consumer electronics and automotive in the next few years. Along with the improvement of our position in the industry and
stabilization of our relationship with customers, we have obtained certain competitive advantages. We will continue to strictly control
capital expenditures in each project, regularly analyze and review the return on investment in each capital expenditure project, and
continue to improve our management of accounts receivable, inventories and other areas, to maximize the efficiency of capital
utilization. We will consider all available sources of financing at different periods according to the requirements of our development
strategy, to create more value for our shareholders.
5. Future risks
(1) Risk of fluctuation of macro economy
The numerous uncertainties existing in the domestic and foreign macro environment at present, such as the spread of the
epidemic situation throughout the world, the trade frictions between China and the United States, complicated and grave global
political situation, worsening geopolitical situation and extensive geopolitical struggles, might result in slowdown of global economy,
and affect people’s income, purchasing power and willingness to spend. If the uncertainties of the macro environment continue for a
long time, the industry will be impacted and face certain challenges.
(2) Risk of foreign exchange rate
At present, our revenue from the overseas market constitutes a large proportion in our total operating revenue, and our overseas
48
Luxshare Precision Industry Co., Ltd. Annual Report 2021
transactions are mainly settled in US Dollars. Our sales on the overseas market totaled RMB57465383800, RMB85046280900
and RMB143,452,850,200 in 2019, 2020 and 2021, representing 91.92%, 91.94% and 93.18% of our revenue from main business
respectively. Because China implements the managed floating rate system, the foreign exchange rates fluctuate along with the
changes in domestic and foreign political and economic environment. If the foreign exchange rates fluctuate greatly, the exchange
gains or losses may affect our operating results. In order to reduce the uncertainties caused by fluctuations of foreign exchange rates
on our operating results, we will strive to keep abreast of the movement of foreign exchange rates, strictly control the proportion of
foreign currency denominated assets in our net assets, and through foreign exchange derivative transactions, reduce the effect of the
fluctuation of foreign exchange rates.
(3) Management risk
We have been growing rapidly in recent years, and continuously expanded our business in consumer electronics, communication,
automotive and other fields. We have a great number of operating entities which are relatively decentralized. Due to the impact of the
trade frictions between China and the United States and spread of the epidemic situation throughout the world, our customers will put
forward increasingly high requirements for the international deployment of our production capacity, which will in turn put forward
higher requirements for our operation and management capabilities and pool of outstanding talents. If our management level cannot
satisfy the requirements of the rapid growth of our scale of operation, we may face certain management risks.
(4) Risk of relative concentration of customers
We attach great importance to maintaining long-term and stable cooperation relationships with our major customers. At present,
our customers are relatively concentrated, most of whom are engaged in consumer electronics. Though they are first-class customers
in the industry, have strong and leading competencies on the market, and have maintained years of stable cooperation relationship
with us, if any major customer falls into serious difficulties in its operation, we may face certain operating risk.
In view of these risks, we will adopt sound risk management concept, establish effective risk management mechanisms, and
continuously improve our risk management policies, to promote our sustainable healthy development.
XII. Investigation, research, communication, interview and other activities
√ Applicable □ N/A
Main topic of Particulars of the
Method of discussion and investigation and
Date Place Type of guest Guest
communication information research activity
provided available at
Refer to Luxshare-ICT
Company
(stock code: 002475)
meeting room at
Explanation Information about
No. 313 Beihuan
Communication Institutional about our Investigation and
April 28, 2021 Road, Qingxi Institution
by telephone investors operating results Research Activity
Town,
in 2020 (20210430) published
Dongguan,
on www.cninfo.com.cn
Guangdong
on April 30, 2021
Company
Introduction Refer to the Record of
meeting room at
about our Investor Relations
No. 313 Beihuan
Communication Institutional general situation Activity dated April 30,
April 30, 2021 Road, Qingxi Institution
by telephone investors and future 2021 published on
Town,
development www.cninfo.com.cn on
Dongguan,
plans May 6, 2021
Guangdong
Company
Introduction Refer to the Record of
meeting room at
about our Investor Relations
No. 313 Beihuan
Communication Institutional strategic Activity dated May 18,
May 18, 2020 Road, Qingxi Institution
by telephone investors deployments and 2021 published on
Town,
related www.cninfo.com.cn on
Dongguan,
businesses May 19, 2021
Guangdong
Company Communication Institutional Introduction Refer to the Record of
August 25, 2020 Institution
meeting room at by telephone investors about our Investor Relations
49
Luxshare Precision Industry Co., Ltd. Annual Report 2021
No. 313 Beihuan operating results Activity dated August
Road, Qingxi in the first half 25, 2021 published on
Town, of 2021 and www.cninfo.com.cn on
Dongguan, general situation August 26, 2021
Guangdong
50
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section IV Corporate Governance
I. Basic Introduction
We have always been committed to promoting the establishment and improvement of a modern corporate system, regulating the
operation of the listed company and improving the corporate governance structure. During the reporting period, we kept on
improving our corporate governance structure, established and improved rules and regulations, regulated corporate operations,
strengthened information disclosure, actively conducted investor relations management and improved corporate governance level in
strict accordance with the requirements of the Company Law, the Securities Law, the Rules Governing the Listing of Stocks on the
Shenzhen Stock Exchange, the Guidelines for Articles of Association of Listed Companies, the Code of Corporate Governance for
Listed Companies, the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock Exchange No. 1 – Code of
Operations for Companies Listed on the Main Board and other applicable laws, regulations and normative documents.
(I) Shareholders and shareholders’ meeting: We perform the procedures for convening, holding and voting at shareholders’
meetings in strict accordance with the Company Law, the AOA, the Rules of Procedure of the Shareholders’ Meeting and other
relevant provisions and requirements, and treat all shareholders fairly. We permit shareholders to elect to vote in person or on line at
our shareholders’ meetings, so as to enable minority shareholders to fully exercise their voting rights. When a shareholders’ meeting
considers any related-party transaction, we require the interested shareholders to abstain from voting, and ensure that such
related-party transaction is conducted on an arm’s length basis without prejudice to the interests of shareholders. When a
shareholders’ meeting considers any material matter that affects the interests of minority shareholders, the votes cast by them are
counted separately. All shareholders’ meetings are convened and held by our Board of Directors in the presence of lawyers.
(II) Relationship with the controlling shareholder: We are independent of our controlling shareholder in operation, assets,
personnel, organization and finance, and each of our Board of Directors, Board of Supervisors and other internal bodies operates
independently. Our controlling shareholder is strict with itself and has not directly or indirectly interfered with our decision-making
and business activities without the authorization of the shareholders’ meeting, or occupied our funds for non-operating purpose.
(III) Directors and Board of Directors: We elect directors and engage independent directors in strict accordance with the relevant
procedures set forth in the Company Law and the AOA. We now have seven directors, including three independent directors, who are
experts in law, accounting and other areas. The number of members and composition of our Board of Directors comply with the
requirements of the applicable laws and regulations and the AOA. Our Board of Directors has four committees, including Audit
Committee, Strategy Committee, Nomination Committee and Compensation and Performance Appraisal Committee, each of which
has a reasonable member structure, and provides scientific and professional opinions and references for the decision-making of the
Board of Directors. Our Board of Directors has convened and held meetings, and implemented the resolutions of the shareholders’
meeting in strict accordance with the AOA and the Rules of Procedure of the Board of Directors. All directors have performed their
duties diligently, and seriously attended the meetings of the Board of Directors and shareholders, and safeguarded the legitimate
rights and interests of the Company and the shareholders.
(IV) Supervisors and Board of Supervisors: Our Board of Supervisors has elected supervisors in strict accordance with the
relevant procedures set forth in the Company Law and the AOA. We now have three supervisors, including one chairman. The
number of members and composition of our Board of Supervisors comply with the requirements of the applicable laws and
regulations and the AOA. Our Board of Supervisors has convened and held meetings in strict with the AOA and the Rules of
Procedure of the Board of Supervisors. All supervisors have seriously performed their duties, effectively supervised and expressed
independent opinions on our financial affairs and the legality and regulatory compliance of the performance of duties by our directors
and executives in good faith and diligently, and safeguarded the legitimate rights and interests of the Company and the shareholders.
(V) Performance appraisal and incentive and restraint mechanisms: In order to establish sound incentive mechanisms, and
enhance the concept of joint sustainable development of the Company and the management and key employees, we have
implemented the share incentive plans to enhance the benefit sharing and restrain mechanisms between shareholders and key
business personnel, maintain the stability of the management team and key business personnel, ensure the achievement of our
development strategy and business objectives, and seek long-term stable development. The appointment of our executives is open
and transparent, and complies with the applicable laws and regulations.
(VI) Stakeholders: We fully respect the legitimate rights and interests of stakeholders, and strive to coordinate and balance the
interests of society, shareholders, the Company, employees and other stakeholders, and jointly promote our sustained and steady
development.
(VII) Information disclosure and transparency: We have performed our information disclosure obligations truthfully, accurately,
timely and completely in strict accordance with the applicable laws and regulations and our Information Disclosure Management
Measures, and designated the Securities Times and www.cninfo.com.cn as the media for us to disclose information. We have kept
51
Luxshare Precision Industry Co., Ltd. Annual Report 2021
non-public information in strict confidence, seriously registered and reported the insiders pursuant to our Insider Management Policy,
established the filing policy for insiders, and timely submitted the same to the competent regulatory authorities for the record in
accordance with the relevant provisions. We also strictly regulate the reporting of our information to external information users.
When receiving specific visitors, we receive them in strict accordance with the relevant requirements, require each of them to sign a
Letter of Commitment, and timely disclose the relevant record of investigation and research activity on the e-interaction platform of
the Shenzhen Stock Exchange. During the reporting period, we did not take advantage of any inside information to trade our shares.
We have set up hotlines for investors and investor relations management section, and designated special persons responsible for
timely communication with investors. In addition, we take the initiative to timely contact and communicate with, and report relevant
matters to, the competent regulatory authorities, in order to accurately understand the relevant regulatory requirements for
information disclosure and further improve the transparency and quality of our information disclosure. We have disclosed
information in a true, accurate, complete and timely manner in strict accordance with the requirements for substance and form, to
ensure that all shareholders have access to our information through different channels.
Is there any significant difference between the actual circumstance of corporate governance of the Company and the requirements of
the applicable laws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed
companies?
□ Yes √ No
There isn’t any significant difference between the actual circumstance of our corporate governance and the requirements of the
applicable laws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies.
II. The Company’s independence of its controlling shareholder and actual controller in assets,
personnel, finance, organization and operation
During the reporting period, we operated in strict compliance with the Company Law and the AOA, gradually improved our
corporate governance structure, were independent of our controlling shareholder in assets, personnel, finance, organization and
operation, had our own independent and complete business, were independent in management, and had independent R&D,
production and sales systems. During the reporting period, our production and operation were stable, and we had sound internal
bodies and were able to operate independently in compliance with the applicable regulations.
(I) Integrity of assets
We are a company limited by shares established through an overall change in organization form according to law, and have our
own independent and complete assets. We have performed the relevant procedures for changes in assets and shareholding according
to law. We have not provided any guarantee for the obligations of shareholders on the security of our assets or credit, or lent any loan
or credit line granted to us to any shareholder. We have full control over all of our assets, and none of our assets or funds is occupied
by our controlling shareholder to the detriment of our interest.
(II) Independence in personnel
Our directors, supervisors and executives have been legally appointed in accordance with the Company Law, the AOA and other
applicable laws, rules and regulations. All of our executives (except independent directors) exclusively work in and receive
remunerations form the Company, and do not hold any post (other than director and supervisor) concurrently in any affiliate of
shareholders or any entity engaging in any business same as or similar to our business. We are independent in employees, manage
their remunerations, social security and other affairs independently, and have sound personnel management policies and system in
place.
(III) Independence in finance
We have independent financial accounting department and internal audit department, and independent accounting system and
financial management policies in place that comply with the applicable regulations, and make financial decisions independently.
Since our establishment, we have opened separate bank accounts, filed tax returns and paid taxes independently according to law, and
executed external contracts independently, and had not shared any bank account or paid any tax in combination with any shareholder.
(IV) Independence in organization
We have established a sound governance structure composed of the shareholders’ meeting, the Board of Directors and the Board
of Supervisors, and independent and complete operation and management bodies that meet our development requirements and
conform to our actual situations, each of which performs its powers and functions independently in accordance with the AOA and
our internal management system. Since our establishment, our production, operation and offices have been totally independent of our
shareholders.
52
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(V) Independence in operation
We have complete corporate property rights and independent R&D, production and sales systems, carry out business
independently, keep separate accounts, and make decisions and assume liabilities and risks independently, and do not rely on any
shareholder or other affiliate in our production and operation activities.
III. Horizontal Competition
□ Applicable √ N/A
IV. Annual and extraordinary shareholders’ meetings held during the reporting period
1. Shareholders’ meetings held during the reporting period
Parentage of
Resolution of the
Session Type of meeting investors attending Date of meeting Date of disclosure
meeting
the meeting
2020 Work Report of the
Board of Directors and
2020 annual other 12 proposals were
Annual shareholders’
shareholders’ 43.58% May 18, 2021 May 19, 2021 approved by vote, as
meeting
meeting disclosed in our
Announcement No.
2021-056.
Proposal for Applying for
Offering Super
Short-term Commercial
First extraordinary Extraordinary
Papers and other 4
shareholders’ shareholders’ 46.41% October 25, 2021 October 26, 2021
proposals were approved
meeting in 2021 meeting
by vote, as disclosed in
our Announcement No.
2021-090.
2. Extraordinary shareholders’ meetings convened on the requisition of holders of preferred shares whose
voting rights have been restituted
□ Applicable √ N/A
53
Luxshare Precision Industry Co., Ltd. Annual Report 2021
V. Directors, supervisors and executives
1. Particulars
No. of No. of Changes in
Cause of
Beginning End date additional shares the number
Beginning Ending increase or
date of the of the shares disposed of of shares
Name Title Status Sex Age balance of balance of decrease in
term of term of acquired in in the held due to
shares held shares held the number
office office the reporting reporting other
of shares held
period period reasons
Chairman of the
Board of Directors February May 18,
WANG Laichun Incumbent Female 55
& General 22, 2009 2024
Manager
Liquidation
of shares to
Vice Chairman of
February May 18, satisfy
WANG Laisheng the Board of Incumbent Male 58 6,970,267 1,742,567 5,227,700
Directors 22, 2009 2024 personal
capital
demands
Additional
shares
acquired as a
Director & Deputy May 21, May 18,
WANG Tao Incumbent Male 37 0 96,022 96,022 result of
General Manager 2021 2024
exercise of
incentive
share options
Director and
May 21, May 18,
LI Wei Deputy General Incumbent Male 42
Manager 2021 2024
Independent May 22, May 18,
ZHANG Ying Incumbent Female 59
director 2018 2024
Independent May 18, May 18,
LIU Zhonghua Incumbent Male 57
director 2021 2024
Independent May 18, May 18,
SONG Yuhong Incumbent Female 51
director 2021 2024
Chairman of the December May 18,
XIA Yanrong Incumbent Female 41
Board of 19, 2017 2024
54
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Supervisors
May 22, May 18,
MO Rongying Supervisor Incumbent Female 42
2018 2024
February May 18,
YI Peizan Supervisor Incumbent Female 37
22, 2009 2024
Board Secretary &
May 25, May 21,
HUANG Dawei Deputy General Incumbent Male 50 439,390 439,390
Manager 2018 2024
Additional
shares
acquired as a
April 15, May 21,
WU Tiansong CFO Incumbent Male 52 365,034 300,809 665,843 result of
2019 2024
exercise of
incentive
share options
Additional
shares
acquired as a
Director & Deputy April 18, May 21,
LI Bin Retired Male 45 2,095,552 1,216,773 3,312,325 result of
General Manager 2012 2021
exercise of
incentive
share options
Additional
shares
acquired as a
Director & Deputy November May 21,
YE Yiling Retired Female 51 776,705 177,880 954,585 result of
General Manager 3, 2011 2021
exercise of
incentive
share options
Independent May 6, May 21,
XU Huaibin Retired Male 65
director 2015 2021
Independent May 6, May 21,
LIN Yifei Retired Male 47
director 2015 2021
Total -- -- -- -- -- -- 10,646,948 1,791,484 1,742,567 10,695,865 --
55
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether any director or supervisor retired or any executive was removed during the reporting period?
□ Yes √ No
Changes in directors, supervisors and executives:
√ Applicable □ N/A
Name Title Type Date Reason
Retired upon expiration
LI Bin Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Retired upon expiration
YE Yiling Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Retired upon expiration
XU Huaibin Independent Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Retired upon expiration
LIN Yifei Independent Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Deputy General Retired upon expiration
LI Bin May 21, 2021 Re-elected of the Board of Directors
Manager of term of office
Deputy General Retired upon expiration
YE Yiling May 21, 2021 Re-elected of the Board of Directors
Manager of term of office
WANG Tao Director Elected May 18, 2021 Re-elected of the Board of Directors
LI Wei Director Elected May 18, 2021 Re-elected of the Board of Directors
LIU Zhonghua Independent Director Elected May 18, 2021 Re-elected of the Board of Directors
SONG Yuhong Independent Director Elected May 18, 2021 Re-elected of the Board of Directors
Deputy General
WANG Tao Appointed May 21, 2021 Re-elected of the Board of Directors
Manager
Deputy General
LI Wei appointed May 21, 2021 Re-elected of the Board of Directors
Manager
2. Positions held
Professional background and main work experience of our current directors, supervisors and executives and main positions held by
them in the Company:
(I) Directors
Ms. WANG Laichun, 55 years old, resident of Hong Kong, China; EMBA, Shenzhen Graduate School of Tsinghua University;
is now our Chairman of the Board of Directors and General Manager; former Director of the Shenzhen High-tech Industry
Association and Vice Chairman of the Shenzhen Electronics Industry Association. Ms. WANG Laichun worked in the Wiring
Business Unit of Foxconn, a subsidiary of Hon Hai Group, for nearly ten years since 1988, and left Foxconn in 1997 to start her own
business. In 1999, Ms. WANG Laichun and Mr. WANG Laisheng jointly purchased the shares of Luxshare Limited. In 2004, she
founded Luxshare Precision Industry (Shenzhen) Co., Ltd. through Luxshare Limited and acted as its Chairman of the Board of
Directors. Ms. WANG Laichun is the Chairman of our 1st, 2nd, 3rd, 4th and 5th Board of Directors.
Mr. WANG Laisheng, 58 years old, resident of Hong Kong, China; is now our Vice Chairman of the Board of Directors; former
Executive Director of the Shenzhen Quality Association and Director of the Guangdong Laboratory Federation. Mr. WANG
Laisheng was engaged in individual business since mid-1980s. Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the
shares of Luxshare Limited in 1999 and founded Luxshare Precision Industry (Shenzhen) Co., Ltd. in 2004. Mr. WANG Laisheng is
the Vice Chairman of our 1st, 2nd, 3rd, 4th and 5th Board of Directors.
Mr. LI Wei, 42 years old, Chinese nationality, undergraduate; is now chief of our Precision Component Business Unit. Mr. LI
Wei has nearly 20 years’ experience in precision manufacturing and has been engaged in product design, validation and quality
management in many precision manufacturing companies. He joined Luxshare-ICT in July 2019, responsible for the operation and
management of the Corporate Business Division.
Mr. WANG Tao, 37 years old, Chinese nationality, undergraduate from the Southeast University; is now chief of our Acoustic
Business Unit. Mr. WANG Tao has rich experience in precision manufacturing of components. He joined Luxshare-ICT in April
2009, responsible for product development and management.
Ms. ZHANG Ying, 59 years old, Chinese nationality; Doctor of Laws, Wuhan University; postdoctoral fellowship in law,
Chinese Academy of Social Sciences; associate professor of the Shenzhen University Law School. Ms. ZHANG Ying joined the
China University of Geosciences in 1984 as a lecturer, and the Institute of Political Science and Law, Wuhan Academy of Social
Sciences in 1994 as an assistant researcher, and has acted as the Executive Director of the China European Law Research Association
56
Luxshare Precision Industry Co., Ltd. Annual Report 2021
since 2009. Ms. ZHANG Ying has obtained the qualification as an independent director from the Shenzhen Stock Exchange, and is
an Independent Director of our 4th and 5th Board of Directors.
Mr. LIU Zhonghua, 57 years old, Chinese nationality, without foreign permanent residence, master, professor of accounting; is
now professor and tutor of postgraduates of the Guangdong University of Foreign Studies School of Accounting, Director of the
Accounting Society of China, Vice Chairman of the Accounting Society for Foreign Economic Relations & Trade of China,
Executive Vice Chairman of the Guangdong Association of Management Accountants, and Executive Director of the Accounting
Society of Guangdong. Mr. LIU Zhonghua has obtained the qualification as an independent director from the Shenzhen Stock
Exchange, and is an Independent Director of Guangdong Provincial Expressway Development Co., Ltd., GEM Co., Ltd. and SGIS
Songshan Co., Ltd.
Ms. SONG Yuhong, 51 years old, Chinese nationality; Master of Laws, Wuhan University; Bachelor of Laws, Southwest
University of Political Science & Law; MBA, Grandes coles de Commerce; is now partner of DeHeng Law Offices (Shenzhen),
and mediator of the International Commercial Mediation Center for Belt and Road Initiative – Luohu Court of Shenzhen Mediation
Center. Ms. SONG Yuhong has obtained the qualification as an independent director from the Shenzhen Stock Exchange, and is an
Independent Director of our 5th Board of Directors.
(II) Supervisors
Ms. XIA Yanrong, 41 years old, Chinese nationality, undergraduate majoring in financial management, is now our supervisor.
Ms. XIA Yanrong worked at the Finance Department of 3CEMS Group Prime Technology (Guangzhou) Co., Ltd. from January 2003
to April 2006, and the Finance Department of Dachang Electronic Technology (Suzhou) Co., Ltd., a subsidiary of P-TWO, from
April 2006 to April 2009, and joined us since April 2009, and served as chief of the Finance Department at Kunshan Lanto, and chief
of the Finance Department and chief of the Credit Management Department at Luxshare-ICT, and is now Director of our Central
Finance Department and Credit Management Department. Ms. XIA Yanrong is a member of our 4th and 5th Board of Supervisors.
Ms. MO Rongying, 42 years old, Chinese nationality, majoring in business administration, is now our supervisor. She was chief
of the Planning Department at Thomson Multimedia (Dongguan) Co., Ltd., before joining us in June 2007 as chief of the Central
Customs Affairs Department. Ms. MO Rongying is a member of our 4th and 5th Board of Supervisors.
Ms. YI Peizan, 37 years old, Chinese nationality, joined our Finance Department in 2004, is now our supervisor. Ms. YI Peizan
is a member of our 1st, 2nd, 3rd, 4th and 5th Board of Supervisors.
(III) Executives
Ms. WANG Laichun, whose resume is set out in “Directors” above.
Mr. WANG Tao, whose resume is set out in “Directors” above.
Mr. LI Wei, whose resume is set out in “Directors” above.
Mr. HUANG Dawei, 50 years old, citizen of Chinese Taiwan, graduated from the National Tsing Hua University Institute of
Industrial Engineering, Master of Industrial Engineering, is now our Deputy General Manager and Board Secretary. Mr. HUANG
Dawei worked in a Fortune 500 company, responsible for market development and operation management, before joining Luxshare
Electronic Kunshan as the legal representative, director and General Manager in June 2013. Mr. HUANG obtained a Qualification
Certificate for Board Secretary from the Shenzhen Stock Exchange in October 2017, and meets the qualifications required in the
Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and other applicable laws and regulations and the AOA.
Mr. WU Tiansong, 52 years old, citizen of Chinese Taiwan, received a bachelor’s degree from the National Taiwan University
of Science and Technology, is now chief of the Finance Department at Luxshare-ICT. Mr. WU Tiansong served as a senior auditor at
the Audit Department of Deloitte Touche Tohmatsu Limited from August 1996 to August 1999, and worked in the Underwriting
Department of Taiwan Yuanda Securities Corp., and served as the chief of the Accounting Director at Taiwan P-TWO Industries Inc.
and Uniwill Computer Corp., and chief of the Finance Department at Zhongshan Ichia Electronics Co., Ltd. from September 1999 to
March 2009. He joined us in 2011.
Positions held in shareholders:
□ Applicable √ N/A
Positions held in other entities:
√ Applicable □ N/A
Whether or not
Beginning date
End date of the receive
Name Entity Position of the term of
term of office remunerations
office
and subsidies
57
Luxshare Precision Industry Co., Ltd. Annual Report 2021
from such entity
WANG Laichun Luxsan Precision Technology Director November 25, No
(Jiangsu) Co., Ltd. 2020
WANG Laichun BCS Automotive Interface Chairman July 18, 2018 No
Solutions (Suzhou) Co., Ltd.
WANG Laichun Luxshare Electronic Technology Chairman March 18, 2014 No
(Kunshan) Co., Ltd.
WANG Laichun Rikai Precision Technology Chairman February 3, No
(Yancheng) Co., Ltd. 2021
WANG Laichun Xiexun Electronic (Ji’an) Co., Vice Chairman November 12, No
Ltd. 2005
WANG Laichun Fujian JK Wiring Systems Co., Chairman June 18, 2012 No
Ltd.
WANG Luxsan Precision Technology Chairman November 25, No
Laisheng (Jiangsu) Co., Ltd. 2020
WANG Xunmu Information Technology General April 27, 2021 No
Laisheng (Shanghai) Co., Ltd. Manager
WANG Lishan Smart Manufacturing Managing November 18, No
Laisheng Technology (Guangdong) Co., Director & 2020
Ltd. Manager
WANG Lishen Smart Manufacturing Chairman February 3, No
Laisheng Technology (Shenzhen) Co., Ltd. 2021
WANG BCS Automotive Interface Managing December 29, No
Laisheng Solutions (Xi’an) Co., Ltd. Director & 2018
General
Manager
WANG Xiexun Electronic (Ji’an) Co., Chairman November 12, No
Laisheng Ltd. 2005
WANG Lanto Electronic Limited Vice Chairman May 12, 2011 No
Laisheng
WANG Kunshan Luxshare Precision Director October 25, No
Laisheng Industry Co., Ltd. 2011
WANG Donguan Xuntao Electronic Co., Vice Chairman July 10, 2012 No
Laisheng Ltd.
WANG Dongguan Leader Precision Chairman August 16, No
Laisheng Industry Co., Ltd. 2012
WANG Kunshan Luxshare Precision Vice Chairman October 25, No
Laisheng Industry Co., Ltd. 2011
WANG Suining Luxshare Precision Managing January 11, No
Laisheng Industry Co., Ltd. Director 2013
WANG Xingning Luxshare Precision Managing November 19, No
Laisheng Industry Co., Ltd. Director 2013
WANG Luxshare Precision Industry Managing March 24, 2014 No
Laisheng (Chuzhou), Ltd. Director
WANG Fengshun Luxshare Precision Managing July 4, 2014 No
Laisheng Industry Co., Ltd. Director
WANG Dongguan Luxshare Precision Chairman November 27, No
Laisheng Industry Co., Ltd. 2015
WANG Jiangxi Luxshare Intelligent Director December 25, No
Laisheng Manufacture Co., Ltd. 2015
LIU Zhonghua Guangdong Provincial Independent December 4, September 20, Yes
Expressway Development Co., Director 2017 2022
Ltd.
LIU Zhonghua GEM Co., Ltd. Independent March 20, 2019 March 12, Yes
Director 2025
LIU Zhonghua SGIS Songshan Co., Ltd. Independent June 25, 2019 June 24, 2022 Yes
58
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Director
SONG Yuhong Jiangxi GETO New Materials Co. Independent May 1, 2017 November 11, Yes
Ltd. Director 2021
LI Wei Luxshare Intelligent Manufacture Managing August 16, No
Technology (Changshu) Co., Ltd. Director & 2021
General
Manager
LI Wei Luxshare Smart Equipment Managing December 29, No
(Kunshan) Co., Ltd. Director & 2020
General
Manager
LI Wei Kunshan Luxshare Business Managing November 4, No
Management Development Co., Director 2020
Ltd.
WANG Tao Lanto Electronic Limited Chairman November 20, No
2019
WANG Tao Luxshare Smart Manufacturing Managing December 1, No
(Rugao) Co., Ltd. Director & 2020
General
Manager
WANG Tao Luxshare Technology (Nanjing) Managing October 19, No
Co., Ltd. Director & 2021
General
Manager
XIA Yanrong Luxshare Intelligent Manufacture Supervisor April 8, 2019 No
(Zhejiang) Co., Ltd.
XIA Yanrong Zhuhai Kinwong Flexible Circuit Supervisor December 3, No
Co., Ltd. 2018
XIA Yanrong Luxshare Precision Industry Supervisor February 18, No
(Suzhou) Co., Ltd. 2019
XIA Yanrong Luxshare Electrical (Shanghai) Supervisor December 2, No
Co., Ltd. 2019
XIA Yanrong Luxshare Precision Industry Supervisor October 24, No
(Enshi) Co., Ltd. 2018
YI Peizan Xiexun Electronic (Ji’an) Co., Supervisor August 28, No
Ltd. 2017
HUANG Dawei Luxshare Electronic Technology Director & March 17, 2014 No
(Kunshan) Co., Ltd. General
Manager
WU Tiansong Luxshare Electronic Technology Supervisor March 17, 2014 No
(Kunshan) Co., Ltd.
WU Tiansong Huzhou Jiuding Electronic Co., Supervisor October 12, No
Ltd. 2012
Punishments imposed by the securities regulatory authorities in the past three years on the directors, supervisors and executives of the
Company currently in office or leaving office during the reporting period:
□ Applicable √ N/A
3. Remunerations of directors, supervisors and executives
Decision-making process, criteria for determination and actual amount in respect of remunerations of directors, supervisors and
executives:
During the reporting period, directors, supervisors and executives were subject to performance appraisal, and their annual
income consisted of basic annual salaries and long-terms incentives, and was determined on the basis of our business situation and
the result of year-end performance appraisal. Our independent directors receive an emolument of RMB80,000 per year each, plus
reimbursement of travel, office and other expenses, from us.
Remunerations of directors, supervisors and executives paid in the reporting period:
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
In RMB0’000
Total Whether or not
remuneration receiving
Name Title Sex Age Status received from the remunerations from
Company any affiliate of the
(inclusive of tax) Company
Chairman of the Board of
WANG Laichun Directors & General Female 55 Incumbent 240 No
Manager
Vice Chairman of the
WANG Laisheng Male 58 Incumbent 240 No
Board of Directors
Director & Deputy
WANG Tao Male 37 Incumbent 95.11 No
General Manager
Director and Deputy
LI Wei Male 42 Incumbent 85.2 No
General Manager
Director & Deputy
LI Bin Male 45 Retired 180.68 No
General Manager
Director & Deputy
YE Yiling Female 51 Retired 116.44 No
General Manager
XU Huaibin Independent director Male 65 Retired 8 No
LIN Yifei Independent director Male 47 Retired 8 No
ZHANG Ying Independent director Female 59 Incumbent 8 No
LIU Zhonghua Independent director Male 57 Incumbent 0 No
SONG Yuhong Independent director Female 51 Incumbent 0 No
Chairman of the Board of
XIA Yanrong Female 41 Incumbent 48.26 No
Supervisors
MO Rongying Supervisor Female 42 Incumbent 41.06 No
YI Peizan Supervisor Female 37 Incumbent 9.23 No
Board Secretary &
HUANG Dawei Male 50 Incumbent 93.86 No
Deputy General Manager
WU Tiansong CFO Male 52 Incumbent 121.16 No
Total - - 1,295 -
VI. Performance of duties by the directors during the reporting period
1. Meetings of the Board of Directors held during the reporting period
Session Date of meeting Date of disclosure Resolution of the meeting
Refer to the Announcement on Resolutions of the
29th meeting of the 4th Board 29th meeting of the 4th Board of Directors disclosed
January 22, 2021 January 23, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-007).
Refer to the Announcement on Resolutions of the
30th meeting of the 4th Board 30th meeting of the 4th Board of Directors disclosed
January 28, 2021 January 29, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-015).
Refer to the Announcement on Resolutions of the
31st meeting of the 4th Board 31st meeting of the 4th Board of Directors disclosed
April 20, 2021 April 21, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-028).
32nd meeting of the 4th Board Refer to the Announcement on Resolutions of the
April 27, 2021 April 28, 2021 32nd meeting of the 4th Board of Directors disclosed
of Directors
on www.cninfo.com.cn and the Securities Times
60
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(Announcement No. 2021-050).
Refer to the Announcement on Resolutions of the
1st meeting of the 5th Board 1st meeting of the 5th Board of Directors disclosed
May 21, 2021 May 22, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-057).
Refer to the Announcement on Resolutions of the
2nd meeting of the 5th Board 2nd meeting of the 5th Board of Directors disclosed
July 2, 2021 July 3, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-062).
Refer to the Announcement on Resolutions of the
3rd meeting of the 5th Board 3rd meeting of the 5th Board of Directors disclosed
August 24, 2021 August 25, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-071).
Refer to the Announcement on Resolutions of the
4th meeting of the 5th Board September 30, 4th meeting of the 5th Board of Directors disclosed
October 8, 2021
of Directors 2021 on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-077).
Refer to the Announcement on Resolutions of the
5th meeting of the 5th Board 5th meeting of the 5th Board of Directors disclosed
October 27, 2021 October 28, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-092).
Refer to the Announcement on Resolutions of the
6th meeting of the 5th Board 6th meeting of the 5th Board of Directors disclosed
December 3, 2021 December 4, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-096).
2. Attendance of the directors at meetings of the Board of Directors and shareholders
Attendance of the directors at meetings of the Board of Directors and shareholders
No. of board No. of board Whether or not
No. of No. of
meetings meetings having been No. of
board board No. of board
held during present by absent from shareholders’
Director meetings meetings meetings
the means of two meeting
present in present by absent from
reporting communication consecutive attended
person proxy
period equipment board meetings
WANG Laichun 10 7 3 0 0 No 2
WANG Laisheng 10 7 3 0 0 No 2
LI Bin 4 2 2 0 0 No 1
YE Yiling 4 1 3 0 0 No 1
ZHANG Ying 10 7 3 0 0 No 2
XU Huaibin 4 2 2 0 0 No 1
LIN Yifei 4 2 2 0 0 No 1
LI Wei 6 4 2 0 0 No 2
WANG Tao 6 4 2 0 0 No 2
LIU Zhonghua 6 4 2 0 0 No 2
SONG Yuhong 6 4 2 0 0 No 2
Explanation about absence from two consecutive meetings of the Board of Directors:
3. Objections raised by the directors regarding matters of the Company
Whether any director has raised any objection regarding matters of the Company?
□ Yes √ No
No director has raised any objection regarding matters of the Company during the reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
4. Other information regarding the performance of duties by the directors
Whether the suggestions put forward by the directors have been adopted by the Company?
√ Yes □ No
Explanation about the adoption or non-adoption by the Company of the suggestions put forward by the directors:
During the reporting period, all of our directors have performed their duties diligently in strict accordance with the Company
Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the AOA, the Rules of Procedure of the Board of
Directors and other relevant provisions and requirements, actively attended meetings of the Board of Directors and shareholders;
taken the initiative to ask for information about our operation, management, financial position and material events, had deep
discussions about all resolutions submitted to the Board of Directors for consideration, expressed opinions on our material corporate
governance issues and business decisions, and through sufficient communication and discussions, reached a consensus, to ensure the
scientificness, timeliness and effectiveness of decisions, and supervised and urged the implementation of resolutions of the Board of
Directors; actively implemented resolutions of the Board of Directors and the shareholders, and safeguarded the legitimate rights and
interests of the Company and all shareholders. We will continue to improve our corporate governance structure, further enhance the
scientific decision-making level of the Board of Directors and its committees, give full play to the role of independent directors in our
corporate governance, and promote our operational compliance and continued healthy development.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
VII. Activities of the committees of the Board of Directors during the reporting period
No. of
Date of Performance Objections
Committee Members meetings Topics Important opinions and suggestions
meeting of other duties (if any)
held
Considered the Proposal for Pursuant to the Company Law, the Code
Re-appointment of the Accounting of Corporate Governance for Listed
Firm Companies promulgated by the CSRC
and the Work Rules of the Audit
Committee of the Board of Directors, the
April 9,
Audit Committee performed its duties
2021
diligently, expressed opinions taking into
account our actual situation, and through
sufficient communication and
discussions, unanimously approved the
Proposal.
Considered the 2020 Financial Pursuant to the Company Law, the Code
WANG Laichun, XU
Report, the Special Report on the of Corporate Governance for Listed
Audit Committee Huabin and LIN 2
Deposit and Use of Offering Proceeds Companies promulgated by the CSRC
Yifei
in 2020, the 2020 Work Report of the and the Work Rules of the Audit
Internal Audit Department and the Committee of the Board of Directors, the
Work Report of the Internal Audit Audit Committee performed its duties
Department for the First Quarter of diligently, supervised our internal audit
April 15,
2021. policies and implementation thereof,
2021
reviewed our financial information,
guided the work of the Internal Audit
Department, supervised and urged the
audit conducted by the accounting firm,
and through sufficient communication
and discussions, unanimously approved
all reports considered.
Considered the Work Report of the Pursuant to the Company Law, the Code
Internal Audit Department for the of Corporate Governance for Listed
First Half of 2021. Companies promulgated by the CSRC
LIU Zhonghua, and the Work Rules of the Audit
July 22,
Audit Committee ZHANG Ying and 2 Committee of the Board of Directors, the
2021
SONG Yuhong Audit Committee performed its duties
diligently, expressed opinions taking into
account our actual situation, and through
sufficient communication and
63
Luxshare Precision Industry Co., Ltd. Annual Report 2021
discussions, unanimously approved the
Report.
Considered the Work Report of the Pursuant to the Company Law, the Code
Internal Audit Department for the of Corporate Governance for Listed
Third Quarter of 2021. Companies promulgated by the CSRC
and the Work Rules of the Audit
Committee of the Board of Directors, the
October 14,
Audit Committee performed its duties
2021
diligently, expressed opinions taking into
account our actual situation, and through
sufficient communication and
discussions, unanimously approved the
Report.
Reviewed the implementation of the Pursuant to the relevant provisions of the
performance appraisal, compensation Company Law, the Code of Corporate
and incentive plan for the directors Governance for Listed Companies
and executives in the preceding year, promulgated by the CSRC and the Work
put forward a reward proposal for the Rules of the Compensation and
directors and executives taking into Performance Appraisal Committee of the
account our actual business situation, Board of Directors, the Compensation
and studied the compensation and and Performance Appraisal Committee
performance appraisal plan for the reviewed the compensation of the
next year. directors, supervisors and executives, and
determined that we are developing and
improving fair and effective performance
Compensation and WANG Laichun,
February appraisal criteria and incentive and
Performance ZHANG Ying and 1
22, 2021 restraint mechanisms for executives, and
Appraisal Committee XU Huabin
the compensation of our executives
consists of basic monthly salaries and
year-end performance-based pay. On the
basis of such understanding and proposal,
we properly adjusted the basic monthly
salaries of certain directors and
executives, in order to reflect and produce
the effect of incentive and fairness. The
compensation of our directors,
supervisors and executives in the
reporting period is true, and conforms to
our performance metrics.
64
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Considered the Performance Pursuant to the Company Law, the Code
Appraisal Measures for the 2021 of Corporate Governance for Listed
Stock Option Incentive Plan. Companies promulgated by the CSRC
and the Work Rules of the Compensation
and Performance Appraisal Committee of
Compensation and ZHANG Ying, LIU the Board of Directors, the Compensation
September
Performance Zhonghua and 1 and Performance Appraisal Committee
24, 2021
Appraisal Committee SONG Yuhong reviewed the Performance Appraisal
Measures for the 2021 Stock Option
Incentive Plan, determined that the
Measures reflected and produced the
effect of incentive and fairness, and
unanimously approved the Proposal.
Considered the Proposal for Pursuant to the Company Law, the Code
Examination of Qualifications of of Corporate Governance for Listed
Candidates for Non-independent Companies promulgated by the CSRC
Directors of the 5th Board of Directors and the Work Rules of the Nomination
and the Proposal for Examination of Committee of the Board of Directors, the
WANG Laichun,
Nomination April 5, Qualifications of Candidates for Nomination Committee performed its
LIN Yifei and 1
Committee 2021 Independent Directors of the 5th duties diligently, examined the
ZHANG Ying
Board of Directors. qualifications of the relevant personnel,
expressed opinions and put forward
suggestions, and through sufficient
communication and discussions,
unanimously approved all Proposals.
Pursuant to the Company Law, the Pursuant to the Company Law, the Code
Code of Corporate Governance for of Corporate Governance for Listed
Listed Companies promulgated by the Companies promulgated by the CSRC,
CSRC, the Work Rules of the Strategy and the Work Rules of the Strategy
Committee of the Board of Directors Committee of the Board of Directors, the
WANG Laichun, XU and other relevant provisions, the Strategy Committee thoroughly analyzed
March 29,
Strategy Committee Huabin and ZHANG 1 Strategy Committee reviewed the and studied the industry in which we
2021
Ying material events occurred in 2020, operate, and put forward reasonable
reported our 2021 strategic suggestions on the planning for and
development plan, and studied the implementation of the development
significant strategic issues in strategies in respect of business, R&D
connection with our development. and new products, which produced
significant effect.
65
Luxshare Precision Industry Co., Ltd. Annual Report 2021
VIII. Activities of the Board of Supervisors
Whether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reporting
period?
□ Yes √ No
The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.
IX. Employees
1. Number, structure of profession and education of employees
Number of current employees of the parent at the end of the reporting period 520
Total number of current employees of the major subsidiaries at the end of the
227,632
reporting period
Total number of current employees at the end of the reporting period 228,152
Total number of salaried employees during the reporting period 228,152
Total number of retired employees to or for whom the parent and the major
0
subsidiaries are obligated to make payments
Structure of profession
Type of profession Number of employees
Production staff 192,873
Sales staff 2,574
Technical staff 16,103
Financial staff 354
Administrative staff 16,248
Total 228,152
Education
Degree of education Number of employees
Undergraduate 13,982
College 21,432
Secondary specialized school, senior middle school and below 192,738
Total 228,152
2. Compensation policies
We have established the administrative measures for the salaries, performance-based pay, year-end bonus and other
compensation of employees of the Group, provided employees with competitive and guaranteed compensation in a scientific an
reasonable manner, developed sound compensation management policies, paid contributions to the social insurance packages and
housing provident fund for and salaries to the employees on time in strict accordance with the applicable laws and regulations, and
resolutely rejected any bonded labor. In order to help employees better understand the match between their job responsibilities and
capabilities, we have developed a multi-dimensional performance appraisal system including self-assessment and supervisor’s
assessment, in order to objectively and comprehensively reflect employees’ annual performance. We conduct annual employee
performance communication activities, to ensure that each employee receives sufficient support and resources for his/her career
development in Luxshare-ICT, and to enhance and optimize the work experience of each employee. The compensation packages
provided by us to employees consist of year-end bonuses, project bonuses, share incentives for key officers, and bonuses for
outstanding employees, among others. During the reporting period, we further optimized performance appraisal, fully appraised the
performance of teams and individuals, and effectively improved the execution ability and awareness of responsibility of employees,
which will help us retain and attract outstanding talents, and human resources required for our development.
3. Training programs
We attach great importance to the career development plans of employees, concentrate our efforts on the training of personnel,
and have established a sound personnel training system, to attract and motivate more excellent talents and promote common growth
of employees and the Group. We have built an integrated online and offline learning platform, providing multi-dimensional specialty
training for different types of employees and new projects. The platform provides all employees with hierarchical targeted training of
66
Luxshare Precision Industry Co., Ltd. Annual Report 2021
different categories that target different groups of people and satisfy different needs. For example, with respect to senior, middle and
grassroots managers and key reserve talents with great potentialities, we conduct the “Star Cultivation Series” training, in order to
build an efficient and dynamic team; and with respect to the personnel in manufacturing, R&D technology, marketing, supply chain
and other critical fields, we conduct the “Juneng Series” training, in order to continuously improve the professional capabilities of
employees on different posts. In addition, we carry out school-enterprise cooperation projects, and encourage the employees to obtain
certification of professional qualifications from the Company and society, in order to enhance our production level and social
recognition of us as a whole. We have also built the “Jushi Series”, “Luxshare Classroom”, “Senior Management Forum” and other
learning and communication platforms, in order to provide excellent Luxshare employees with stages to demonstrate themselves,
create a sound learning environment and promote the integration and communications among all employees. In addition, with a view
to promoting the implementation of important strategies and changes, we have conducted the “Jubian Series” training according to
business needs. In order to regulate the employee training, we have established and periodically updated the Administrative Measures
for Education and training, the Operating Procedures for Education and training, and Administrative Measures for Internal Lecturers,
which define the training system covering all stages from induction, orientation, on-the-job, transfer to promotion, and each factory
has established the Operating Procedures for Education and training and relevant administrative measures by reference to the
Group’s management standards, and annual training plans for the factory and its departments according to its annual development
plan, to effectively enhance the core competencies of employees and the Company, improve the employees’ professional capabilities
and promote the sustainable growth of the Company.
4. Outsourced workers
□ Applicable √ N/A
X. Profit distribution and transfer of capital reserve to the share capital
Adoption, implementation or adjustment of the profit distribution policy, in particular, cash dividend policy, during the reporting
period
√ Applicable □ N/A
Pursuant to the resolutions adopted by the 31st meeting of the 4th Board of Directors and the 2020 annual shareholders’ meeting,
we proposed to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax) per 10 shares on the basis of the total
share capital of 7,035,426,367 shares, or RMB773,896,900.37 (inclusive of tax) in total. In case of any change in our total share
capital due to any share repurchase, exercise of share incentives, material asset restructuring, cancellation of repurchased share or
otherwise prior to the record date for the relevant equity distribution, we would adjust the distribution payable per share accordingly
on the principle that the total amount distributable should remain the same.
During the period from the disclosure of such profit distribution proposal to the implementation thereof, our total share capital
increased by 2,461 shares, from 7,035,426,367 shares at the time of disclosure of the proposal to 7035428828 shares as a result of
conversion of the convertible bonds to shares. On the principle that the total amount distributable should remain the same, our profit
distribution proposal for 2020 was adjusted as follows: to distribute to all shareholders a cash dividend of RMB1.099999 (inclusive
of tax) per 10 shares on the basis of the total share capital of 7035428828 shares, or RMB773,891,489.58 (inclusive of tax) in total.
Special explanation about the cash dividend policy
Whether comply with the provisions of the articles of association or requirements of resolutions of the
Yes
shareholders’ meeting of the Company?
Whether the standard and ratio of cash dividend distribution are clear and definite? Yes
Whether the relevant decision-making process and mechanism are sound? Yes
Whether the independent directors have performed their duties and exercised their functions? Yes
Whether the minority shareholders have sufficient opportunities to express their opinions and requests and
Yes
their legitimate rights and interests are fully protected?
Whether the conditions and procedures in respect of any adjustment or amendment of the cash dividend policy
Yes
comply with the applicable regulations and are transparent?
Whether the Company has made a profit in the reporting period and the parent has profits available for distribution to the
shareholders, but the Company does not propose to distribute cash dividends?
□ Applicable √ N/A
Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:
√ Applicable □ N/A
67
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Number of bonus shares per 10 shares 0
Amount of cash dividends per 10 shares (inclusive of tax) 1.10
Share capital based on which the distribution proposal was made 7,084,301,477
Amount of cash dividends (inclusive of tax) 779,273,162.47
Amount of cash dividends distributed in other ways (such as share repurchase) (RMB) 0.00
Total amount of cash dividends (RMB) 779,273,162.47
Distributable profit (RMB) 6,526,651,487.02
Proportion of total cash dividends to the distributable profit 100%
Particulars of cash dividends distributed for the reporting period
Others
Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital
Our 2021 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax)
per 10 shares on the basis of the total share capital of 7,084,301,477 shares, or RMB779,273,162.47 (inclusive of tax) in total, and
to carry forward the retained profits for distribution in subsequent years. In case of any change in our total share capital due to any
share repurchase, exercise of share incentives, material asset restructuring, cancellation of repurchased share or otherwise prior to
the record date for the relevant equity distribution, we will adjust the distribution payable per share accordingly on the principle
that the total amount distributable should remain the same. The 2021 Profit Distribution Proposal is subject to approval by the
shareholders’ meeting.
XI. Implementation of share incentive plans, employee stock ownership plans and other
employee incentives granted by the Company
√ Applicable □ N/A
1. Share incentives
(1) 2018 stock option incentive plan
On December 2, 2020, the 27th meeting of the 4th Board of Directors and the 27th meeting of the 4th Board of Supervisors
considered and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the Second Vesting Period of the 2018
Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting conditions may exercise the stock options
vested in the second vesting period in their sole discretion from December 22, 2020 to September 24, 2021. Refer to the Cautionary
Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the 2018 Stock Option Incentive
Plan (Announcement No.2020-108) for details.
During the reporting period, the grantees exercised their options to purchase 13,854,690 shares in total within the second vesting
period of the 2018 Stock Option Incentive Plan.
On July 2, 2021, due to the equity distribution for 2020, the exercise price for the stock options granted but not yet exercised
under the 2018 stock option incentive plan was adjusted from RMB10.28 per share to RMB10.17 per share. Refer to the
Announcement on Adjustment of the Exercise Prices under the 2018 and 2019 Stock Option Incentive Plans and Cancellation of
Certain Stock Options under the 2019 Stock Option Incentive Plan (Announcement No.2021-064) for details.
On September 30, 2021, due to resignation of certain grantees for personal reasons, the number of grantees was adjusted from
1719 to 1695, and the number of stock options exercisable under the 2018 Stock Option Incentive Plan was adjusted by cancelling
920,766 stock options granted but not yet exercised, so the number of stock options granted but not yet exercised was adjusted from
93,843,466 to 92,964,441. Refer to the Announcement on Adjustment of the Number of Stock Options Exercisable and Cancellation
of Certain Stock Options under the 2018 Stock Option Incentive Plan (Announcement No.2021-082) for details.
On December 3, 2021, the 6th meeting of the 5th Board of Directors and the 6th meeting of the 5th Board of Supervisors
considered and approved the Proposal for Adjustment of the Number of Stock Options Exercisable and Cancellation of Certain Stock
Options under the 2018 Stock Option Incentive Plan and the Proposal Regarding the Satisfaction of the Vesting Conditions for the
Third Vesting Period of the 2018 Stock Option Incentive Plan, pursuant to which, due to resignation, failure to meet the performance
appraisal criteria or other reasons on the part of the grantees, the number of grantees was adjusted from 1695 to 1650, and the
number of stock options exercisable under the 2018 Stock Option Incentive Plan was adjusted by cancelling 1,851,452 stock options
granted but not yet exercised, so the number of stock options granted but not yet exercised was adjusted from 92,964,441 to
91,112,989; the grantees who have satisfied the vesting conditions may exercise the stock options vested in the third vesting period in
their sole discretion from December 24, 2021 to September 23, 2022. Refer to the Announcement on Cancellation of Certain Stock
Options under and Revision of the Number of Stock Options Exercisable in the Third Vesting Period of the 2018 Stock Option
Incentive Plan (Announcement No.2021-104) and the Cautionary Announcement on Adoption of the Discretionary Exercise Method
for the Third Vesting Period of the 2018 Stock Option Incentive Plan as Revised (Announcement No.2021-105) for details.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
During the reporting period, the grantees exercised their options to purchase 19,597,470 shares in total within the third vesting
period of the 2018 Stock Option Incentive Plan.
(2) 2019 stock option incentive plan
On June 22, 2020, the 19th meeting of the 4th Board of Directors and the 19th meeting of the 4th Board of Supervisors considered
and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the First Vesting Period of the Stock Options
Granted under the 2019 Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting conditions may
exercise the stock options vested in the first vesting period in their sole discretion from July 7, 2020 to April 21, 2021. Refer to the
Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting Period of the Stock Options
Granted under the 2019 Stock Option Incentive Plan (Announcement No.2020-049) for details.
During the reporting period, the grantees exercised their options to purchase 1,291,186 shares in total within the first vesting
period of the stock options granted under the 2019 Stock Option Incentive Plan.
On January 22, 2021, due to resignation, failure to meet the performance appraisal criteria or other reasons on the part of the
grantees, the number of grantees was adjusted from 258 to 250, and the number of stock options available under the 2019 Stock
Option Incentive Plan was adjusted by cancelling 456,286 stock options granted but not yet exercised, so the number of stock options
granted but not yet exercised was adjusted from 21,113,740 to 20,657,454. Refer to the Announcement on Adjustment of the List of
Grantees and Number of Stock Options Available and Cancellation of Certain Stock Options under the 2019 Stock Option Incentive
Plan (Announcement No.2021-009) for details.
On January 22, 2021, the 29th meeting of the 4th Board of Directors and the 29th meeting of the 4th Board of Supervisors
considered and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the First Vesting Period of the Stock
Options Available under the 2019 Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting
conditions may exercise the stock options vested in the first vesting period in their sole discretion from February 8, 2021 to
November 26, 2021. Refer to the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting
Period of the Stock Options Available under the 2019 Stock Option Incentive Plan (Announcement No.2021-021) for details.
During the reporting period, the grantees exercised their options to purchase 4,109,496 shares in total within the first vesting
period of the stock options available under the 2019 Stock Option Incentive Plan.
On July 2, 2021, due to the equity distribution for 2020, and resignation, failure to meet the performance appraisal criteria or
other reasons on the part of the grantees, we adjusted the 2019 stock option incentive plan as follows: the number of grantees was
adjusted from 340 to 332; 744,909 stock options granted but not yet exercised were cancelled, so the number of stock options granted
but not yet exercised was adjusted from 65,977,698 to 65,232,789; and the exercise price of the stock options granted or available
was changed from RMB13.70 per share to RMB13.59 per share. Refer to the Announcement on Adjustment of the Exercise Prices
under the 2018 and 2019 Stock Option Incentive Plans and Cancellation of Certain Stock Options under the 2019 Stock Option
Incentive Plan (Announcement No.2021-064) for details.
On July 2, 2021, the 2nd meeting of the 5th Board of Directors and the 2nd meeting of the 5th Board of Supervisors considered and
approved the Proposal Regarding Satisfaction of the Vesting Conditions for the Second Vesting Period of the Stock Options Granted
under the 2019 Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting conditions may exercise
the stock options vested in the second vesting period in their sole discretion from July 15, 2021 to April 21, 2022. Refer to the
Cautionary Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the Stock Options
Granted under the 2019 Stock Option Incentive Plan (Announcement No.2021-069) for details.
During the reporting period, the grantees exercised their options to purchase 14,627,322 shares in total within the second vesting
period of the stock options granted under the 2019 Stock Option Incentive Plan.
(3) 2021 stock option incentive plan
With the approval of the 4th meeting of the 5th Board of Directors, the 4th meeting of the 5th Board of Supervisors and the 1st
extraordinary shareholders’ meeting in 2021, we introduced the 2021 stock option incentive plan.
The first grant under the plan was completed on December 3, 2021 and registered on December 9, 2021. 52,092,000 stock
options (short name: Luxshare JLC4; code: 037192) in total, representing 0.74% of our total share capital at the time of grant, were
granted to 1,072 grantees at the exercise price of RMB35.87 per share.
(4) Exercise of options during the reporting period
During the reporting period, the grantees exercised their options to purchase 53,480,164 shares in total under the relevant stock
option incentive plans.
69
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Share incentives granted to directors and executives
√ Applicable □N/A
Unit: shares
Exercise
No. of Market No. of
price of
additional No. of No. of price at No. of additional Grant
Beginning shares Ending Beginning Ending
stock shares shares the end of shares restricted price of
balance of exercised balance of balance of balance of
options exercisable exercised the vested shares restricted
Name Title stock during the stock restricted restricted
granted during the during the reporting during the granted shares
options reporting options shares shares
during the reporting reporting period reporting during the (RMB per
held period held held held
reporting period period (RMB per period reporting share)
(RMB per
period share) period
share)
WU Tiansong CFO 395,451 0 131,817 131,817 10.17 263,634 49.20
WU Tiansong CFO 574,585 0 168,992 168,992 13.59 405,593 49.20
HUANG Deputy
Dawei General
Manager 659,085 0 219,695 0 659,085 49.20
& Board
Secretary
LI Wei Director
&
Deputy 1,689,963 0 506,989 0 1,689,963 49.20
General
Manager
WANG Tao Director
&
Deputy 1,973,876 0 601,626 0 1,973,876 49.20
General
Manager
LI Bin Director
&
Deputy 2,636,342 0 878,781 878,781 10.17 1,757,561 49.20
General
Manager
LI Bin Director
&
Deputy 1,351,970 0 337,992 337,992 13.59 1,013,978 49.20
General
Manager
YE Yiling Director 962,265 0 320,755 87,880 10.17 874,385 49.20
&
70
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Deputy
General
Manager
YE Yiling Director
&
Deputy 540,789 0 135,196 90,000 13.59 450,789 49.20
General
Manager
Total - 10,784,326 0 3,301,843 1,695,462 -- 9,088,864 -- 0 0 0 -- 0
Remark (if any) Upon re-appointment of the Board of Directors in April 2021, LI Bin and YE Yiling resigned as directors, but continue to hold other posts in the Company.
Performance appraisal and incentives in respect of executives
All of our executives were appointed by the Board of Directors fairly and transparently, in compliance with the applicable laws and regulations. Our executives report to the Board of
Directors and are responsible for achieving the operating targets set by the Board of Directors. We have established effective incentive and constraint mechanisms, in order to stimulate the
executives to perform their duties diligently, and improve our level of operation and management and operating results. The performance of our executives is directly linked to their income, and
assessed by comparing the goals set by us with their actual accomplishment of tasks. The Compensation and Performance Appraisal Committee of the Board of Directors is responsible for
year-end assessment of the achievement of goals, working ability and performance of duties in respect of our directors, supervisors and executives, and developing the compensation and
performance appraisal proposals and submitting the same to the Board of Directors for approval. During the reporting period, our compensation and performance appraisal policies for the
executives have been implemented effectively.
71
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Implementation of employee stock ownership plan
□ Applicable √ N/A
3. Other employee incentives
□ Applicable √ N/A
XII. Establishment and implementation of internal controls during the reporting period
1. Establishment and implementation of internal controls
We have established a relatively sound internal control system that has run effectively in strict accordance with the Company
Law, the Securities Law, the Basic Internal Control Standards for Enterprises, the Application Guide for Internal Controls of
Enterprises and other applicable laws, regulations and normative documents, taking into account the characteristics of our industry
and our actual business situation. From the perspective of corporate management, technology R&D and business processes, we have
established effective internal controls, and improved our corporate governance level and efficiency of decision-making, which
guarantees the legal and regulatory compliance of our operation and management, security of our assets and the truthfulness and
completeness of our financial reports and other information, and effectively promote the steady implementation of our strategies.
Our internal control system has a reasonable structure, can satisfy the requirements of our management and development, and
runs effectively. Our internal controls over financial reporting, non-financial reporting and other material matters are effective,
achieve the objectives and protect the interests of the Company and all shareholders.
2. Material weakness in internal control identified during the reporting period
□ Yes √ No
XIII. Management and control of subsidiaries during the reporting period
Problems
Progress of Solutions Progress Subsequent
Company Integration plan encountered
integration adopted of solution solution
during integration
Rikai Precision Control the subsidiary through its Completed No N/A N/A N/A
Technology board of directors, and manage
(Yancheng) Co., the assets, personnel, finance,
Ltd. organization, operation and other
matters of the subsidiary in an
all-round way through
appointment of officers to the
subsidiary
XIV. Self-assessment report on internal controls or auditor’s report on internal controls
1. Self-assessment report on internal controls
Date of disclose of the self-assessment report on internal controls April 28, 2022
in its entirety
Disclosure reference Self-assessment Report on Internal Controls 2021 of Luxshare
Precision Industry Co., Ltd. published on www.cninfo.com.cn
Ratio of total assets of the entities covered by the assessment to 75.60%
total assets recorded in the consolidated financial statements of
the Company
Ratio of total operating revenue of the entities covered by the 84.91%
72
Luxshare Precision Industry Co., Ltd. Annual Report 2021
assessment to total operating revenue recorded in the
consolidated financial statements of the Company
Criteria for determination of deficiencies
Type Financial reporting Non-financial reporting
Qualitative criteria 1. The material weaknesses in internal control over 1. The material weaknesses in internal control over
financial reporting include: (A) fraud on the part of non-financial reporting include: (A) any serious
directors, supervisors and executives; (B) failure to violation of the significant national laws and
correct any material weakness in internal control regulations; (B) great outflow of management and
within a reasonable time after the same was identified technical personnel on key posts; (C) absence of or
and reported to the management; (C) ineffective ineffective control system for important business
control environment; (D) any material misstatement relating to the production and operation of the
in the financial report for the current period that is Company; (D) ineffective internal control over
identified by external auditor but fails to be identified information disclosure, resulting in any public
through internal control; (E) any serious violation of condemnation of the Company by any regulatory
the laws and regulations; (F) the Company running at authority; and (E) failure to correct any problem, in
a loss for consecutive years due to any reason other particular, any material weakness or significant
than policy-related loss, which might threaten the deficiency, identified in any assessment of internal
Company’s ability to continue as a going concern; controls. 2. The significant deficiencies in internal
and (G) ineffective supervision by the management control over non-financial reporting include: (A)
and related functional departments over the internal defects in important business policies or system, or
control. 2. The significant deficiencies in internal unsound internal control system; and (B) failure to
control over financial reporting include: (A) failure to review any information disclosed externally and
select and apply accounting policies pursuant to the untruthfulness of any information disclosed. 3.
generally accepted accounting principles; (B) failure General deficiencies in internal control over financial
to establish anti-fraud procedures and controls; (C) reporting include deficiencies in control other than
absence of or ineffective control system for important material weakness and significant deficiency.
business; (D) lack of internal controls in and
disorderly management of subsidiaries; and (E) great
outflow of or frequent changes in senior officers
(especially those in charge of internal control,
financial and human resources departments), or great
outflow of personnel on the relevant posts. 3. General
deficiencies in internal control over financial
reporting include deficiencies in control other than
material weakness and significant deficiency.
Quantitative criteria 1. Material weakness: (1) amount of misstated 1. Material weakness: resulting in a direct loss of
operating revenue ≥ 0.5% of total operating revenue; more than RMB12 million and having a material
(2) amount of misstated profit ≥ 0.5% of total profit; adverse effect on the Company. 2. Significant
(3) amount of misstated assets ≥ 0.5% of total assets; deficiency: resulting in a direct loss of more than
(4) amount of misstated owners’ equity ≥ 0.5% of RMB3 million and not more than RMB12 million,
total owners’ equity. 2. Significant deficiency: (1) and any penalty imposed by any competent
0.2% of total operating revenue ≤ amount of government authority of the country, but not having
misstated operating revenue < 0.5% of total operating an adverse effect on the Company. 3. General
revenue; (2) 0.2% of total profit ≤ amount of deficiency: resulting in a direct loss of not more than
misstated profit < 0.5% of total profit; (3) 0.2% of RMB3 million, and any penalty imposed by any
total assets ≤ amount of misstated assets < 0.5% of competent government authority at the provincial
total assets; (4) 0.2% of total owners’ equity ≤ level or below, but not having an adverse effect on
amount of misstated owners’ equity < 0.5% of total the Company.
owners’ equity. 3. General deficiency: (1) amount of
misstated operating revenue < 0.2% of total operating
revenue; (2) amount of misstated profit < 0.2% of
total profit; (3) amount of misstated assets < 0.2% of
total assets; (4) amount of misstated owners’ equity <
0.2% of total owners’ equity.
Number of material weaknesses in financial reporting 0
Number of material weaknesses in non-financial reporting 0
Number of significant deficiencies in financial reporting 0
73
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Number of significant deficiencies in non-financial reporting 0
2. Auditor’s report on internal controls
□ Applicable √ N/A
3. Internal control certification report
Opinion issued in the internal control certification report
Pursuant to the Basic Internal Control Standards for Enterprises promulgated by the Ministry of Finance and other relevant
provisions, the Company has maintained effective internal controls in all material respects as of December 31, 2021.
Disclosure of the internal control certification report Disclosed
Date of disclosure of the internal control certification report in its April 28, 2022
entirety
Disclosure reference Internal Control Certification Report 2021 of Luxshare Precision
Industry Co., Ltd. published on www.cninfo.com.cn
Type of opinion issued in the internal control certification report Standard unqualified opinion
Whether there’s any material weakness in non-financial No
reporting
Whether the accounting firm issued a modified internal control certification report?
□ Yes √ No
Whether the internal control certification report issued by the accounting firm conforms to the opinion issued by the self-assessment
report of the Board of Directors?
√Yes □ No
XV. Rectification of non-compliance identified in the special self-examination of corporate
governance of the listed company
Pursuant to the requirements of the Announcement on Launching the Special Campaign for Corporate Governance of the Listed
Companies issued by the CSRC, we carried out self-examination of our corporate governance in strict accordance with the Company
Law, the Securities Law, the AOA, the Rules of Procedure of the Board of Directors, the Rules of Procedure of the Board of
Supervisors and other applicable laws, regulations and normative documents, in an orderly manner on the principle of seeking truth
from facts, and completed the Questionnaire for Self-Examination of Corporate Governance of the Listed Company, which includes
119 questions covering seven areas.
Our self-examination showed that we operated in compliance with the applicable regulations and was governed well during the
reporting period, and did not identify any material non-compliance in our corporate governance. We will continue to improve our
level of corporate governance and further promote our high-quality development.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section V Environment and Social Responsibilities
I. Major environmental issues
Whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authority
√ Yes □ No
Name of
main
Number
Name of the pollutants Distribution Emission Pollutant discharge Total
Discharge of Total Excessive
Company or and of discharge concentratio standards approved
method discharge emissions emissions
its subsidiaries characteris outlets n implemented emissions
outlets
tic
pollutants
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Ammonia Sewage
Technology treatment by the 1 2.705291 40 7.22 49.04 /
nitrogen station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision Total after the
Sewage
Technology phosphoru treatment by the 1 0.921442 8mg/l 2.46 7.08 /
station
(Yancheng) s wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Total Sewage
Technology treatment by the 1 9.398368 60mg/l 25.07 69.86 /
nitrogen station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Anionic Sewage
Technology treatment by the 1 0.100312 15 mg/l 0.27 / /
surfactant station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Sewage
Technology pH level treatment by the 1 0 6-9 0 / /
station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
75
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Taken over by
the wastewater
Rikai treatment plant
Precision Chemical after the
Sewage
Technology oxygen treatment by the 1 60.29317 500 mg/l 160.85 729.32 /
station
(Yancheng) demand wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Sewage
Technology Fluoride treatment by the 1 8.576927 20 mg/l 22.88 / /
station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Suspended Sewage
Technology treatment by the 1 30.80756 400 mg/l 82.19 / /
solids station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Sewage
Technology Petroleum treatment by the 1 0.801746 20 mg/l 2.14 / /
station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Environmental
Rikai protection B4、B5、B6、
Precision (secondary
C4、C5、C6、
Technology VOCs activated carbon 51 3.15 60 mg/l 18.40 / /
(Yancheng) and oil mist C7、B7、C3、
Co., Ltd. washing tower) B3
equipment
Environmental
protection (oil
Rikai mist washing B4、B5、B6、
Precision tower, low
C4、C5、C6、
Technology SO2 nitrogen 51 0.76 20 mg/l 2.05 / /
(Yancheng) combustion, C7、B7、C3、
Co., Ltd. alkali spray B3
tower)
equipment
Environmental
Rikai protection (wet B4、B5、B6、
Precision dust removal,
Particulate C4、C5、C6、
Technology low nitrogen 51 5.53 50 mg/l 13.95 / /
matter C7、B7、C3、
(Yancheng) combustion,
Co., Ltd. direct discharge) B3
equipment
Environmental B4、B5、B6、
Rikai
protection C4、C5、C6、
Precision NOx 51 15.23 60 mg/l 1.78 1.7853 /
(secondary
Technology C7、B7、C3、
activated carbon
(Yancheng) B3
and oil mist
76
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Co., Ltd. washing tower)
equipment
Level 3 provided in
Rishan
the Integrated
Computer Chemical
Standards of
Accessories oxygen Pipe discharge 1 Main outlet 500mg/L 50.562 112.2094 /
Wastewater
(Jiashan) Co., demand
Discharge
Ltd.
(GB8979-1996)
Restrictions on
Indirect Discharge
Rishan
of Nitrogen and
Computer
Ammonia Phosphorus
Accessories Pipe discharge 1 Main outlet 35mg/L 4.014 11.2209 /
nitrogen Pollutants from
(Jiashan) Co.,
Wastewater of
Ltd.
Industrial
Enterprises
Rishan Discharge
Computer Standards of
Total
Accessories Pipe discharge 1 Main outlet 0.1mg/L Electroplating 0.001 0.02 /
nickel
(Jiashan) Co., Pollutants
Ltd. (GB21900-2008)
Rishan Discharge
Computer Standards of
Total
Accessories Pipe discharge 1 Main outlet 0.5mg/L Electroplating 0.012 0.026 /
chromium
(Jiashan) Co., Pollutants
Ltd. (GB21900-2008)
Rishan Collect in a
Roof of Integrated
Computer centralized
F1/F2/F3/F4 Emission Standards
Accessories VOC manner and then 26 120mg/m 9.33 10.8962 /
/F5/F7/F9/F of Air Pollutants
(Jiashan) Co., emit after
10/F11 (GB16297-1996)
Ltd. pretreatment
Rishan Collect in a
Integrated
Computer centralized Roof of
Particulate Emission Standards
Accessories manner and then 12 F3/F5/F6-1/ 120mg/m 1.876 10.595 /
matter of Air Pollutants
(Jiashan) Co., emit after F6-2/F7
(GB16297-1996)
Ltd. pretreatment
Rishan Collect in a Discharge
Computer centralized Standards of
Nitrogen Roof of
Accessories manner and then 8 200mg/m Electroplating 0.554 0.903 /
oxide F5/F7
(Jiashan) Co., emit after Pollutants
Ltd. pretreatment (GB21900-2008)
Level 3 provided in
Riming the Table 2 of the
Computer South of the Integrated
Wastewate
Accessories Pipe discharge 1 sewage 7.4 Standards of / / /
r (PH)
(Shanghai) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 15 Standards of 4.771 / /
(suspende
(Shanghai) station Wastewater
d solids)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer South of the Integrated
Wastewate
Accessories Pipe discharge 1 sewage 40 Standards of 4.522 / /
r (chroma)
(Shanghai) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
77
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Level 3 provided in
Riming Wastewate the Table 2 of the
Computer r South of the Integrated
Accessories (chemical Pipe discharge 1 sewage 72 Standards of 11.425 33.842 /
(Shanghai) oxygen station Wastewater
Co., Ltd. demand) Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 0.54 Standards of 0.195 / /
(petroleum
(Shanghai) station Wastewater
)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 9.62 Standards of 0.785 1.05 /
(ammonia
(Shanghai) station Wastewater
nitrogen)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer Wastewate South of the Integrated
Accessories r (anionic Pipe discharge 1 sewage 0.07 Standards of 0.088 / /
(Shanghai) surfactant) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r (total
Accessories Pipe discharge 1 sewage 0.42 Standards of 0.061 5.25 /
phosphoru
(Shanghai) station Wastewater
s)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer Wastewate South of the Integrated
Accessories r (total Pipe discharge 1 sewage 5.253.1 Standards of 1.938 / /
(Shanghai) nitrogen) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer Wastewate South of the Integrated
Accessories r (five-day Pipe discharge 1 sewage 31.6 Standards of 3.609 / /
(Shanghai) BOD) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 0.316 Standards of / / /
(aluminum
(Shanghai) station Wastewater
)
Co., Ltd. Discharge (DB31
199-2018)
Riming Treated exhaust
Integrated
Computer Exhaust gas meets the
Emission Standards
Accessories gas (oil standards and is 63 Plant roof 0.1 1.3464 / /
of Air Pollutants
(Shanghai) mist) emitted at high
(DB31_933-2015)
Co., Ltd. altitude
Riming Exhaust Treated exhaust 7 Plant roof 0.067 Integrated 0.554 3.02 /
Computer gas gas meets the Emission Standards
78
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Accessories (particulat standards and is of Air Pollutants
(Shanghai) e matter) emitted at high (DB31_933-2015)
Co., Ltd. altitude
Riming Treated exhaust
Computer gas meets the Emission Standards
Exhaust
Accessories standards and is 1 Plant roof ND for Odor Pollutants 0 / /
gas (odor)
(Shanghai) emitted at high (DB311025-2016)
Co., Ltd. altitude
Exhaust
Riming Treated exhaust
gas Integrated
Computer gas meets the
(non-meth Emission Standards
Accessories standards and is 3 Plant roof ND 0 0.1348 /
ane of Air Pollutants
(Shanghai) emitted at high
hydrocarb (DB31_933-2015)
Co., Ltd. altitude
on)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Wastewate Integrated
sewage
Technology r (total Pipe discharge 1 ND Standards of 0.000143 0.0054 /
station of
(Shanghai) nickel) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 7.5 Standards of / / /
r (PH) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r (total sewage
Technology Pipe discharge 1 0.32 Standards of 0.164 / /
phosphoru station of
(Shanghai) Wastewater
s) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Wastewate Integrated
sewage
Technology r (total Pipe discharge 1 1.95 Standards of 0.84 27.63 /
station of
(Shanghai) nitrogen) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r sewage
Technology Pipe discharge 1 1.43 Standards of 0.192 0.988 /
(ammonia station of
(Shanghai) Wastewater
nitrogen) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 134 Standards of 47.867 52.45 /
r (COD) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 1 Standards of 2.283 / /
r (chroma) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
79
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r sewage
Technology Pipe discharge 1 16 Standards of 13.087 / /
(suspende station of
(Shanghai) Wastewater
d solids) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r sewage
Technology Pipe discharge 1 ND Standards of 0.632 / /
(petroleum station of
(Shanghai) Wastewater
) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 2.66 Standards of 0.043 / /
r (LAS) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Sheng Rui Treated exhaust Discharge
Exhaust
Electronic gas meets the Standards of
gas Plant roof
Technology standards and is 17 0.2 Electroplating 0.071 3.442 /
(Nitrogen and 1/F
(Shanghai) emitted at high Pollutants
oxide)
Co., Ltd. altitude (GB21900-2008)
Sheng Rui Treated exhaust Discharge
Exhaust
Electronic gas meets the Standards of
gas 1/F of the
Technology standards and is 15 ND Electroplating 0 / /
(sulfuric plant
(Shanghai) emitted at high Pollutants
acid mist
Co., Ltd. altitude (GB21900-2008)
Sheng Rui Treated exhaust
Exhaust Integrated
Electronic gas meets the
gas Emission Standards
Technology standards and is 6 Plant roof 2.2 0.883 2.533 /
(particulat of Air Pollutants
(Shanghai) emitted at high
e matter) (DB31_933-2015)
Co., Ltd. altitude
Sheng Rui Treated exhaust
Integrated
Electronic Exhaust gas meets the
1/F of the Emission Standards
Technology gas (alkali standards and is 15 ND 0 / /
plant of Air Pollutants
(Shanghai) mist) emitted at high
(DB31_933-2015)
Co., Ltd. altitude
Sheng Rui Treated exhaust
Electronic gas meets the Emission Standards
Exhaust Sewage
Technology standards and is 1 ND for Odor Pollutants 0 / /
gas (odor) station
(Shanghai) emitted at high (DB311025-2016)
Co., Ltd. altitude
Exhaust
Sheng Rui Treated exhaust Emission Standards
gas
Electronic gas meets the of Pollutants from
(non-meth
Technology standards and is 1 Plant roof 1.21 Synthetic Resin 0.016 / /
ane
(Shanghai) emitted at high Industry
hydrocarb
Co., Ltd. altitude (GB31572-2015)
on)
Construction and operation of pollution prevention facilities
I. Rikai Precision Technology (Yancheng) Co., Ltd.
1. 7 sets of low nitrogen combustion systems: The denitration facilities operate for 8400 hours per year.
2. 17 sets of dust removal systems: The dust removal facilities operate for 8400 hours per year.
3. 15 sets of organic exhaust gas collection and treatment systems.
4. 13 sets of acid exhaust gas treatment systems.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
Wastewater: The plant implements the divergence of clean water and sewage and the divergence of rain and sewage, and
separately pretreats the wastewater containing chromium, nickel, phosphorus and nitro and organic wastewater and after they meet
the standards, then directly discharges them into the pipe. The pH, CODcr, SS and petroleum at the pipe inlet meet the Level 3
provided in Integrated Standards of Wastewater Discharge (GB8979-1996), and the ammonia nitrogen and total phosphorus are
80
Luxshare Precision Industry Co., Ltd. Annual Report 2021
lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants from
Wastewater of Industrial Enterprises (DB33/887-2013); the discharge of Class-A pollutants such as total chromium, CR VI and
nickel are lower than the limits of indirect discharge to Taihu Lake Basin in the Table 1 of the Discharge Standards of Electroplating
Water Pollutants (DB33/2260-2020); CODcr and petroleum at the discharge outlet of phosphorus-containing wastewater treatment
facilities meet the Level 3 provided in the Integrated Standards of Wastewater Discharge (GB8978-1996); the total phosphorus is
lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants from
Wastewater of Industrial Enterprises (DB33/887-2013); the pH and CODcr at the discharge outlet of nitro-containing wastewater
treatment facilities meet the Level 3 provided in Integrated Standards of Wastewater Discharge (GB8978-1996), and ammonia
nitrogen is lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants
from Wastewater of Industrial Enterprises (DB33/887-2013); the pH, CODcr, SS and petrolem at the discharge outlet of organic
wastewater treatment facilities meet the Level 3 provided in Integrated Standards of Wastewater Discharge (GB8978-1996); in
general, the washing wastewater is collected separately, and after pretreament, some is reused while some is discharged. The total
reuse rate of production wastewater in two days is monitored at 31.0% and 32.4%, meeting the requirements. The online monitoring
facility is installed at the wastewater pipe inlet to monitor pH, CODcr, ammonia nitrogen and other factors; the standardized rain
outlets and signboards are set within the plant. The wastewater treatment facilities are built, including one accident emergency pool
covering an area of 2,776 m3 and two initial rain collection pools covering a total area of 806 m3.
Exhaust gas: The main production equipment are laid out in accordance with the environmental impact assessment: CNC
equipment is installed respectively at F1, F2 and F3 workshops; the anode line is arranged in F5 workshop; the volatile oil mist
generated by the workshops of CNC equipment (F1, F2 and F3) is treated by the supporting treatment facility (i.e., electrostatic oil
removal facility), and then emitted through a 25m-high exhaust funnel after it meets the Level 2 of the Integrated Emission Standards
of Air Pollutants (GB16297-1996); the particulate exhaust gas generated by the workshops of sandblast equipment (F1, F2 and F3) is
treated by the supporting treatment facility (i.e., spray tower), and then emitted through a 25m-high exhaust funnel after it meets the
Level 2 of the Integrated Emission Standards of Air Pollutants (GB16297-1996); the injection molding exhaust gas generated by the
workshops of the injection molding equipment (F5 and F9) is treated by the activated carbon adsorption device, and then emitted
through a 25m-high exhaust funnel after it meets the special emission limits of air pollutants provided in Table 5 of the Emission
Standards of Pollutants from Synthetic Resin Industry (GB31572-2015); the exhaust gas such as sulfuric acid mist and nitric acid
mist generated by the workshop of the anode line (F5) is treated by the supporting treatment facility (i.e., alkali liquor spray tower),
and then emitted through a 25m-high exhaust funnel after it meets the emission limits provided in Table 5 of the Emission Standards
of Electroplating Pollutants (GB21900-2008); the VOC exhaust gas generated by the assembly workshop is treated by the activated
carbon adsorption device, and then emitted through a 25m-high exhaust funnel after it meets the Level 2 provided in the Integrated
Emission Standards of Air Pollutants (GB16297-1996).
The plant is 420 meters away from its nearest sensitive point in the northwest, i.e., Maojia Community, meeting the
requirements.
Noise: According to the monitoring results, the noise at the east and south boundaries of the plant meets Class 3 of the Standards
on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008), and the noise at the west and north boundaries
meets Class 4 of the Standards on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008).
Solid waste: 1. A classified collection system is established for solid waste, which is classified into hazardous waste and general
solid waste. Meanwhile, the domestic waste and industry solid waste shall be divided on connection. The sludge produced by waste
water is separately pressed, filtered and collected through being classified into three types such as nickel containing sludge,
chromium containing sludge and physical and chemical sludge. 2. The temporary storage place for general solid waste is set up in the
production plant. General solid waste such as metal leftovers and injection molding waste is bagged and collected in the temporary
storage place according to the requirements. 3. A special temporary storage place for hazardous waste, covering an area of 648 m2, is
set up in the production plant to collect and temporarily store hazardous waste according to the relevant requirements. 4. The
temporary storage place for used sulfuric acid, phosphoric acid and other raw material packaging barrels is set up according to the
requirements of the temporary storage place for hazardous waste. 5. Metal leftovers, sandblast waste and collected dust, among
others, are sold to recycling companies for comprehensive utilization. The biochemical sludge produced by wastewater treatment is
collected and sent to the urban waste treatment system and domestic waste is uniformly transported and treated by the local
environmental sanitation department. 6. Hazardous waste such as waste cutting fluid, grinding waste residue, waste packaging
materials (sodium hydroxide, etc.), (sludge containing nickel and chromium, and physical and chemical sludge) is collected and
entrusted to qualified units for disposal.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
1. Measures for noise pollution prevention: The outdoor equipment, the equipment close to the plant boundaries and the cooling
tower are environmentally friendly. Most equipment is installed in the workshop and on the roof of the workshop, a reasonable layout.
The basic shock absorption is made when the equipment is installed, the fan is equipped with silencer and the flexible connector is
used for the connection of blast pipes.
2. Measures for hazardous waste pollution prevention: The plant is equipped with the special hazardous waste cans and
warehouses, implements the “Three Prevention” system and carries out irregular self check and self correction;
3. Measures for exhaust gas pollution prevention: A regular check is carried out for the completeness of the waste gas tower
body, liquid tank, spray system, filling materials, gas-liquid separator, etc., and the filling materials are replaced in time; after the air
volume of the extraction equipment is adjusted and balanced, the full-automatic control is adopted so that each extraction point falls
within a reasonable air volume range.
4. Measures for wastewater pollution prevention: The principle of divergence is implemented. Different kinds of wastewater
enter the corresponding sewage pool through different pipes. The pipes are overhead and pasted with signs of flow direction. The
completeness of the pipes is checked regularly, and any abnormality, if found, will be handled immediately. All pools and floors of
the sewage station are paved and hardened for anti seepage and anti corrosion.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
1. Measures for noise pollution prevention: The outdoor equipment, the equipment close to the plant boundaries and the cooling
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
tower are environmentally friendly. Most equipment is installed in the workshop and on the roof of the workshop, a reasonable layout.
The basic shock absorption is made when the equipment is installed, the fan is equipped with silencer and the flexible connector is
used for the connection of blast pipes.
2. Measures for hazardous waste pollution prevention: The plant is equipped with the special hazardous waste cans and
warehouses, implements the “Three Prevention” system and carries out irregular self check and self correction;
3. Measures for exhaust gas pollution prevention: A regular check is carried out for the completeness of the waste gas tower
body, liquid tank, spray system, filling materials, gas-liquid separator, etc., and the filling materials are replaced in time; after the air
volume of the extraction equipment is adjusted and balanced, the full-automatic control is adopted so that each extraction point falls
within a reasonable air volume range.
4. Measures for wastewater pollution prevention: The principle of divergence is implemented. Different kinds of wastewater
enter the corresponding sewage pool through different pipes. The pipes are overhead and pasted with signs of flow direction. The
completeness of the pipes is checked regularly, and any abnormality, if found, will be handled immediately. All pools and floors of
the sewage station are paved and hardened for anti seepage and anti corrosion.
Environmental impact assessment of construction projects and other environmental protection administrative permits
I. Rikai Precision Technology (Yancheng) Co., Ltd.
Area B: 1. Impact of wastewater discharge on main protection objectives. After this project is completed, the comprehensive
wastewater produced by the whole plant will be 942,900t/a (2,694t/d), representing 22.5% of the comprehensive wastewater
treatment capacity (i.e., 12,000 t/d); the heavy metal wastewater produced by the whole plant will be 168,700t/a (482t/d), but the
wastewater treatment capacity (150t/d) of the heavy metal wastewater treatment center currently in progress cannot meet the
requirements of heavy metal wastewater treatment capacity after completion of this project. Therefore, it is feasible to connect the
pipes for the heavy metal wastewater of this project only if the heavy mental treatment center’s treatment capacity meets the heavy
mental wastewater volume of this project. 2. Impact analysis of air environment. The maximum ground concentration of each
pollutant is less than 10% of its corresponding standards, and the predicted maximum concentration value based on calculation plus
the maximum value based on monitoring of regional pollutants also meet the standards. Therefore, the air quality of the surrounding
environmental sensitive points can meet the requirements notwithstanding under most unfavorable conditions. As can be seen, the
pollutants discharged by the project have little impact on the environment and will not change the functions of the surrounding air
environment. 3. Impact of noise on the surrounding environment. The Company has implemented the corresponding sound insulation
measures, and accordingly the predicted noise value at the boundaries of the whole plant during the day and at night meets Level 3
provided in the Standard on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008). 4. Environmental impact
of solid waste. The solid waste produced by this project can realize zero discharge without secondary pollution after being properly
treated and disposed. 5. Impact analysis of groundwater environment. According to the prediction results of groundwater, on the
abnormal working conditions, namely, if the sewage state has continuous leakage, the maximum contribution value is 45.309mg/L
when the concentration of Cr VI at 10m downstream is 1000d, and with reference to the standard (Level 3 of groundwater quality
standard is 0.05mg/L), Cr VI of the groundwater (100d and 1000d) at 100m downstream meets the Level 3 standard; the maximum
contribution value is 181.237 mg/L when the concentration of Ni at 10m downstream is 1000d, and with reference to the standard
(Level 3 of groundwater quality standard is 0.05mg/L), the Ni of the groundwater (100d and 1000d) at 200m downstream meets the
Level 3 standard.
Area C: 1. Impact on air environment: According to the calculation results of air estimation model, the maximum ratio of each
pollutant is less than 10% of the rating standards after completion of this project, and is determined as Level 2. After technology
transformation, the unorganized exhaust gas emission in Area C does not exceed the standards outside the plant boundaries. The
health protection distance is required to be set by extending 100m outside the C4-C7 production workshops, namely, by extending
33m outside the east boundary of the plant, 12m outside the west boundary of the plant and 80m outside the north boundary of the
plant. There are no sensitive protection targets such as residents within the above-mentioned scope. 2. Impact on water environment:
After the technology transformation project is completed, the heavy metal wastewater in area C is treated by the heavy metal zero
discharge system and then reused in the anodic oxidation process; the wet polishing wastewater is treated by the wet polishing
wastewater treatment facility and then reused in the wet polishing process; after the chemical polishing wastewater is treated by the
phosphoric acid concentration system, the waste acid is entrusted to a qualified unit for treatment; the wastewater and cooling water
produced by pure water preparation are discharged as clean water; the initial rain collected and comprehensive sewage after being
treated by the comprehensive sewage station are sent to Yancheng City Tongqi Water Co., Ltd. for in-depth treatment, and the
domestic sewage after being treated by septic pool is sent to Yancheng City Tongqi Water Co., Ltd. for in-depth treatment. The
project has little impact on the regional surface water environment. 3. Impact on acoustic environment: After technology
transformation, the high noise sources in Area C are rationally laid out and effectively governed, which has little impact on the plant
boundaries and surrounding residents. 4. Impact of solid waste After technology transformation, the solid waste in Area C are
effectively treated and treated, which has little impact on the environment. 5. Impact on groundwater environment: After technology
transformation, the zoning prevention and control measures are taken towards potential impact on groundwater and soil, with the aim
to effectively preventing the leachate or wastewater seeping into and polluting groundwater. Therefore, this project has little impact
on groundwater environment. 6. Impact on risk environment: After the technology transformation, the reasonable risk prevention
measures and emergency plans are taken and formulated in Area C to ensure that the risk level will fall within a controllable and
bearable scope.
To sum up, this project has little impact on regional environment quality and will not change its functions and categories.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
Shan Huan Han [2016] No. 91, Bao Gao Biao Bei [2017] No. 010, Bao Gao Biao Bei [2017] No. 013, Shan Huan Han [2018]
No. 91 and Deng Ji Baio Bei [2020] No. 088.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
Jin Huan Xu [2012] No. 34, Jin Huan Xu [2014] No. 479, Jin Huan Xu [2015] No. 195, Jin Huan Xu [2015] No. 323, Jin Huan
82
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Xu [2018] No. 170, Jin Huan Xu [2019] No. 254, and Jin Huan Xu [2020] No. 27.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
Jin Huan Xu [2012] No. 544, Jin Huan Yan [2012] No. 62, Jin Huan Yuan [2014] No. 126, Jin Huan Xu [2018] No. 187, Jin
Huan Xu [2020] No. 245, and the Pollution Discharge Permit No.: 91310000575815657F001P.
Emergency plan for abrupt environmental pollution accidents
I. Rikai Precision Technology (Yancheng) Co., Ltd.
Yancheng Luxcase has formulated the Emergency Plan for Abrupt Environmental Pollution Accidents.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
In September 2021, Rishan Computer has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd
Edition), and has completed the formalities for expert review and filing with the filing No.: 330421-2021-105-M.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
Riming Computer has prepared the Emergency Plan within the valid term and suitable to the plant, and has filed with the
ecological environment bureau with filing No.: 02-310116-2019-048-L.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
Sheng Rui Electronic has prepared the Emergency Plan within the valid term and suitable to the plant, and has filed with the
ecological environment bureau with filing No.: 02-310116-2021-022-M.
Environmental self-monitoring program
I. Rikai Precision Technology (Yancheng) Co., Ltd.
Rikai Yancheng has formulated the Monitoring Program in accordance with the environment impact assessment report.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
Rishan Computer has prepared the Self-monitoring program for 2022 in December 2021 to test the organized exhaust gas at the
emission outlet once every half a year, the unorganized exhaust gas once a year, indicators of suspended solids and petroleum at the
inlet of wastewater once a month, indicators of total chromium, Cr VI and total nickel once a day and noise once a quarter.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
Riming Computer updates the Environmental Self-monitoring Program in accordance with the requirements of the pollutant
discharge license and environment assessment, and entrusts a qualified third-party monitoring agency with sampling, testing and
issuing a compliance report.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
Riming Computer updates the Environmental Self-monitoring Program in accordance with the requirements of the pollutant
discharge license and environment assessment, and entrusts a qualified third-party monitoring agency with sampling, testing and
issuing a compliance report.
Administrative penalties imposed due to environmental issues during the reporting period
Name of the Effects on the
Company or listed company’s
Reasons for penalty Violations Penalty results Rectification measures of the Company
its production and
subsidiaries operation
On November 3, 1. An independent wastewater pipe will
2020, Jiaxing be added in the north within the plant,
Ecological through which the pretreated production
Environment Rishan wastewater meeting the standard will be
Bureau checked Computer is the transmitted to the main discharge outlet.
Rishan’s plant subsidiary of A parshall flume will be built at the main
located at No. 89 Violate the Rikai Computer discharge outlet, and a set of automatic
Changjiang Road, provisions On February 4, 2021, (now known as monitoring device meeting the
Huimin Street, of Article 10 Jiaxing Ecological Rikai Yancheng) standardization requirements will be
Jiashan County, and of the Law Environment Bureau when the newly installed to monitor the quality of
Rishan
discovered that the of the imposed an Company production wastewater. The original
Computer
People’s Administrative consummated
Accessories total phosphorus wastewater pipe will be used for
concentration of the Republic of Penalty (Jia Huan the closing on domestic sewage discharge, and the
(Jiashan)
wastewater at its China on the (Shan) Fa Zi [2021] February 3, original online monitoring device is used
Co., Ltd.
main sewage Prevention No. 3) amounting to 2021. This for internal monitoring of domestic
discharge outlet is and Control RMB250,000 on administrative sewage quality. After transformation, the
9.66mg/L, of Water Rishan Computer. penalty has no Company’s internal domestic sewage
exceeding Level 1 Pollution. effects on the and the production wastewater are
provided in Table 1 Company’s diverged. The independent online
of the Restrictions production and monitoring system monitors the water
on Indirect operation. quality, facilitating future environmental
Discharge of protection monitoring and management
Nitrogen and work. Once abnormal data exceeding the
Phosphorus standards are found, the response
83
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Pollutants from measures can be taken immediately to
Wastewater of stop the discharge of corresponding
Industrial water sources until they meet the
Enterprises discharge requirements of environmental
(DB33/887-2013), protection. 2. The emergency pool and
namely, 8mg/L. sewage pipe are checked on a regular
basis every year, and the manufacturer is
arranged to flush the rain and sewage
pipe network at least once a year. 3. The
environmental protection risk
assessment, the environmental protection
measure acceptance, and process
monitoring and management are strictly
implemented towards the new,
reconstructed, expanded
projects/production processes.
Other environment information to be disclosed
N/A
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ N/A
The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), the information
disclosure website designated by the Company, together with this report on the same day.
Other environmental information
The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), the information
disclosure website designated by the Company, together with this report on the same day.
II. Social responsibility
The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), the information
disclosure website designated by the Company, together with this report on the same day.
III. Consolidation and expansion of poverty alleviation and rural revitalization
The Company did not carry out the work on poverty alleviation and rural revitalization during the reporting period or have
subsequent relevant plans.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
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 □ N/A
Date of Term of
Giver of Commitmen Performa
Commitments Details of commitments commitment commitme
commitments t type nce
s nts
Commitments relating to the
transformation into share holding
system
Commitments made in any acquisition
report or report on changes in equity
Commitments relating to any asset
restructuring
Pursuant to the applicable
regulations of the China
Securities Regulatory
Commission, in order to
ensure the implementation
of the remedial measures
HUANG
for diluted earnings of the
Dawei, LI Company, each of the
Bin, LIN directors and executives
of the Company hereby
Yifei, WANG
commitments as follows:
Laichun, 1. I will not transfer The
WANG benefits to any other commitm
Commitments relating to any initial Other entity or individual
Laisheng, WU ents have
public offering or subsequent fund commitment without compensation or July 11,2019 Permanent
Tiansong, been
raising s on unfair terms, or
XIONG otherwise damage the fulfilled
Tengfang, XU interest of the Company. strictly
2. I will exercise
Huaibin, XUE
self-discipline in
Haigao, YE consumption in
Yiling, performing my duties.
3. I will not use the assets
ZHANG Ying
of the Company to engage
in any investment or
consumption activity not
in connection with my
duties.
4. I will, within my
85
Luxshare Precision Industry Co., Ltd. Annual Report 2021
powers, procure the
linkage between the
compensation system
adopted by the Board of
Directors or the
Compensation and
Performance Appraisal
Committee and the
implementation of the
Company’s remedial
measures for diluted
earnings.
5. I will, within my
powers, procure the
linkage between the
vesting conditions in
respect of any share
incentives granted by the
Company and the
implementation of the
Company’s remedial
measures for diluted
earnings.
6. I undertake to strictly
fulfill the commitments
set forth above, to ensure
the implementation of the
remedial measures for
diluted earnings of the
Company. If I breach or
refuse to fulfill any
commitment set forth
above, I will make
explanations and
apologies and perform
other obligations required
by the applicable
regulations, and agree to
accept any punishment or
regulatory action that may
be imposed on or taken
against me by the China
Securities Regulatory
Commission, the
Shenzhen Stock Exchange
or any other competent
securities regulatory
authority pursuant to the
applicable rules and
regulations established or
promulgated by such
regulatory authorities, and
indemnify the Company
or its shareholders for the
losses (if any) arising
therefrom according to
law.
86
Luxshare Precision Industry Co., Ltd. Annual Report 2021
In order to seriously
protect the legitimate
rights and interests of the
Company and all of its
shareholders, each of the
controlling shareholder
and actual controllers of
the Company hereby
commitments as follows:
1. We/I will not interfere
with management and
operation of the Company
beyond our/my powers, or
infringe on the interest of
the Company.
2. We/I will procure the
implementation of the
remedial measures for
diluted earnings of the
Company, and fulfill
our/my commitments in
connection therewith. If
We/I breach or refuse to
fulfill any commitment set
forth above, We/I agree to
Luxshare accept any punishment or The
regulatory action that may
Limited, commitm
Other be imposed on or taken
WANG against us/me by the July 11, ents have
commitment Permanent
Laichun, China Securities 2019 been
s Regulatory Commission,
WANG fulfilled
the Shenzhen Stock
Laisheng Exchange or any other strictly
competent securities
regulatory authority
pursuant to the applicable
rules and regulations
established or
promulgated by such
regulatory authorities, and
indemnify the Company
or the investors for the
losses (if any) arising
therefrom according to
law.
3. From the date of this
commitment till the date
of completion of this
offering, if the China
Securities Regulatory
Commission or any other
competent securities
regulatory authority
adopts any new regulation
regarding the remedial
measures for diluted
earnings and
commitments in
87
Luxshare Precision Industry Co., Ltd. Annual Report 2021
connection therewith, and
the commitments set forth
above do not satisfy the
requirements of such new
regulation, We/I will make
supplementary
commitments pursuant to
the new regulation.
Luxshare Limited, as the
controlling shareholder of
the Company, and WANG
Laichun and WANG
Laisheng, as the actual
controllers of the
Company, hereby
commitment as follows:
1. We, Luxshare Limited,
as the controlling
shareholder of the
Company, undertake not
to interfere with
management and
operation of the Company
beyond our powers, or
infringe on the interest of
the Company.
2. I, WANG Laichun, as
the actual controller,
Chairman and General
Luxshare Manager of the Company, The
undertake to perform my
Limited, commitm
Other duties in accordance with
WANG the applicable laws and March 11, ents have
commitment Permanent
Laichun, regulations and the 2016 been
s articles of association of
WANG fulfilled
the Company, and not to
Laisheng interfere with strictly
management and
operation of the Company
beyond my powers, or
infringe on the interest of
the Company.
3. I, WANG Laisheng, as
the actual controller and
Vice Chairman of the
Company, undertake to
perform my duties in
accordance with the
applicable laws and
regulations and the
articles of association of
the Company, and not to
interfere with
management and
operation of the Company
beyond my powers, or
infringe on the interest of
the Company.
88
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Each of the directors and
executives of the
Company hereby
commitments as follows:
(1) I will not transfer
benefits to any other
entity or individual
without compensation or
on unfair terms, or
otherwise damage the
interest of the Company.
(2) I will exercise
BAI Rujing, self-discipline in
CHEN consumption in
performing my duties.
Chaofei, (3) I will not use the
DONG assets of the Company to
Jianhai, LI engage in any investment
or consumption activity
Bin, LI Jing,
not in connection with my The
LI Xiongwei, duties.
commitm
LIN Yifei, Other (4) I will procure the
linkage between the March 11, ents have
WANG Ji, commitment Permanent
compensation system 2016 been
WANG s adopted by the Board of
fulfilled
Laichun, Directors or the
Compensation and strictly
WANG
Performance Appraisal
Laisheng, XU Committee and the
Huaibin, YE implementation of the
Yiling, Company’s remedial
measures for diluted
ZHANG
earnings.
Lihua (5) If the Company
establishes any share
incentive plan in the
future, I will procure the
linkage between the
vesting conditions in
respect of any share
incentives granted by the
Company and the
implementation of the
Company’s remedial
measures for diluted
earnings.
Commitmen The commitments relating
to horizontal competition,
ts relating to
related-party transactions The
horizontal and occupation of funds
commitm
competition, are as follows:
Luxshare 1. We and all other entities October 15, ents have
related-party Permanent
Limited controlled by us at present 2014 been
transactions or in the future will not,
fulfilled
and directly or indirectly,
engage in any business or strictly
occupation
activity that competes or
of funds might compete or
89
Luxshare Precision Industry Co., Ltd. Annual Report 2021
potentially compete with
the main business of the
Company.
2. If any amendment of
any applicable law or
change in any applicable
policy of the country
results in any actual or
potential horizontal
competition between us or
any other entity controlled
by us and the Company in
any business, the
Company shall have the
preemptive right on the
same terms in respect of
any entrusted
management (or
management under
contract or lease) or
acquisition in connection
with such business.
3. So long as we remain
the controlling
shareholder of the
Company, the
commitments set forth
above shall be
unconditional and
irrevocable. If we breach
any commitment set forth
above, we will, jointly and
severally, fully, timely and
adequately indemnify the
losses of the Company
arising therefrom.
The commitments relating
to horizontal competition,
related-party transactions
Commitmen and occupation of funds
ts relating to are as follows:
1. We and other entities The
horizontal
controlled by us will commitm
competition, reduce related-party October 15,
Luxshare ents have
related-party transactions with the Permanent
Limited 2014 been
transactions Company to the maximum
extent practicable. fulfilled
and
2. With respect to any strictly
occupation related-party transaction
of funds between us or any other
entity controlled by us and
the Company that is
unavoidable or exists
90
Luxshare Precision Industry Co., Ltd. Annual Report 2021
reasonably, we will carry
out such transaction on an
arm’s length basis and
customary commercial
terms, ensure the fairness
of the transaction price,
perform the relevant
decision-making process
according to law, and
guarantee that the
legitimate rights and
interests of the Company
and its shareholders will
not be damaged as a result
of such transaction.
3. We or any other entity
controlled by us will not
request the Company to
offer any terms more
favorable than the terms
that may be offered by
any third party in an arm’s
length transaction, or
accept any such terms
offered by the Company.
4. So long as we remain
the controlling
shareholder of the
Company, the
commitments set forth
above shall be
unconditional and
irrevocable. If we breach
any commitment set forth
above, we will, jointly and
severally, fully, timely and
adequately indemnify the
losses of the Company
arising therefrom.
The commitments relating
Commitmen to horizontal competition,
ts relating to related-party transactions
The
horizontal and occupation of funds
WANG commitm
competition, are as follows: I and other
Laichun, July 30, ents have
related-party entities controlled by me Permanent
WANG 2010 been
transactions are not engaged in any
Laisheng fulfilled
and business that is the same
strictly
occupation as or similar to the
of funds business of the Issuer or
any entity controlled by
91
Luxshare Precision Industry Co., Ltd. Annual Report 2021
the Issuer. So long as I
retain control over the
Issuer directly or
indirectly, I will strictly
comply with the
applicable laws,
regulations and codes of
the country, and will not,
directly or indirectly,
engage in any business
that is the same as, similar
to or substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer, or have
substantial or relative
control over any other
company, organization or
economic entity engaging
in any business that is the
same as, similar to or
substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer in or outside
China. I will use my
control over the other
entities controlled by me
to cause such entities to
fulfill the commitments
set forth above in the
same manner. If I breach
any commitment set forth
above, I agree to assume
the relevant legal
liabilities, including
without limitation, to
indemnify the Issuer and
its minority shareholders
for all losses arising
therefrom.
Luxshare Commitmen The commitments relating July 30, Permanent The
92
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Limited, ts relating to to horizontal competition, 2010 commitm
Shenzhen horizontal related-party transactions ents have
Zixin competition, and occupation of funds been
Investment related-party are as follows: We are not fulfilled
Co., Ltd. transactions engaged in any business strictly
and that is the same as or
occupation similar to the business of
of funds the Issuer or any entity
controlled by the Issuer.
So long as we retain
control over the Issuer
directly or indirectly, we
will strictly comply with
the applicable laws,
regulations and codes of
the country, and will not,
directly or indirectly,
engage in any business
that is the same as, similar
to or substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer, or have
substantial or relative
control over any other
company, organization or
economic entity engaging
in any business that is the
same as, similar to or
substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer in or outside
China. We will use our
control over the other
entities controlled by us to
cause such entities to
fulfill the commitments
set forth above in the
same manner. If we
breach any commitment
set forth above, we agree
93
Luxshare Precision Industry Co., Ltd. Annual Report 2021
to assume the relevant
legal liabilities, including
without limitation, to
indemnify the Issuer and
its minority shareholders
for all losses arising
therefrom.
The commitments relating
to horizontal competition,
related-party transactions
and occupation of funds
are as follows: We/I will
not take advantage of
our/my position as the
controlling shareholder,
actual controller or
shareholder (as
applicable) and our/my
affiliation with the Issuer
to engage in any act to the
detriment of the interest of
Luxshare
Commitmen the Issuer or its other
Limited,
ts relating to shareholders. With respect
Shenzhen The
horizontal to any related-party
Zixin commitm
competition, transaction between us/me
Investment July 30， ents have
related-party or any other entity Permanent
Co., Ltd., 2010 been
transactions controlled by us/me and
WANG fulfilled
and the Issuer, we/I will carry
Laichun, strictly
occupation out such transaction on an
WANG
of funds arm’s length basis and
Laisheng
customary commercial
terms, and will not request
the Issuer to offer any
terms more favorable than
the terms that may be
offered by any third party
in an arm’s length
transaction, or accept any
such terms offered by the
Issuer. We/I will strictly
perform all related-party
transaction agreements (if
any) entered into with the
Issuer in good faith, and
94
Luxshare Precision Industry Co., Ltd. Annual Report 2021
will not seek any interest
or benefit in contravention
of the commitments set
forth above. If we/I breach
any commitment set forth
above, we/I agree to
indemnify the Issuer and
its minority shareholders
for all losses arising
therefrom.
Luxshare Limited, as the
controlling shareholder of
The
the Company, hereby
commitm
Other undertakes not to sell any
Luxshare February 3, February ents have
commitment share of the Company
Limited 2021 2, 2022 been
s through the stock trading
fulfilled
system within 12 months
strictly
after the completion of
this disposal.
After the completion of
the transactions
contemplated by the
announcement on external
Commitmen investment and
ts relating to related-party transactions
The
horizontal disclosed by the Company
Commitments relating to share commitm
competition, on November 13, 2020,
incentives Luxshare November ents have
related-party we and our affiliates will Permanent
Limited 13, 2020 been
transactions not engage in any
fulfilled
and business that is the same
strictly
occupation as or substantially in
of funds competition with the
business of the Company
or any entity controlled by
the Company in any
manner.
Luxshare Limited, as the
controlling shareholder of
Other the Company, hereby
Luxshare July 22, February
commitment undertakes not to sell any Fulfilled
Limited 2020 2, 2022
s share of the Company
through the stock trading
system within 6 months
95
Luxshare Precision Industry Co., Ltd. Annual Report 2021
after the completion of
this disposal.
Commitments made to the minority
shareholders of the Company
Whether the commitments have been
Yes
fulfilled on time?
If any commitment fails to be fulfilled
on time, please state the specific N/A
reason and the relevant action plan
2. If the Company has made any profit forecast on its assets or project and the reporting period falls within
the period of such profit forecast, explanation about whether the goal has been achieved and the relevant
reasons
□ Applicable √ N/A
II. Occupation of funds of the listed company by the controlling shareholder and other related
parties for non-operating purposes
□ Applicable √ N/A
During the reporting period, no controlling shareholder or its related party used capital of the listed company for non-operating
purposes.
III. Illegal provision of guarantees for external parties
□ Applicable √ N/A
We have not provided any external guarantee in contravention of the applicable regulations during the reporting period.
IV. Explanation made by the Board of Directors about the modified audit opinion for the
latest period
□ Applicable √ N/A
V. Explanation by the Board of Directors, the Board of Supervisors and the independent
directors (if any) about the modified auditor’s report issued by the accounting firm for the
reporting period
□ Applicable √ N/A
VI. Explanation about changes in accounting policies and accounting estimates or correction
of significant accounting errors when compared to the previous financial year
□ Applicable √ N/A
96
Luxshare Precision Industry Co., Ltd. Annual Report 2021
The Company has no changes in accounting policies and accounting estimates or correction of significant accounting errors during
the reporting period.
VII. Explanation about changes in consolidation scope when compared to the previous
financial year
√ Applicable □ N/A
The consolidation scope for this period adds by new establishment Luxis Technology Limited, Luxshare Precision Industry
(Yancheng) Co., Ltd., Hangzhou Xuntao Technology Co., Ltd., Rugao Lixun Enterprise Management Service Partnership (Limited
Partnership), Lianxun Intelligent Equipment (Rugao) Co., Ltd., Luxshare Precision Technology (Xi’an) Co., Ltd., Luxshare
Electronic Technology (Enshi) Co., Ltd., Lixin Technology (Kunshan) Co., Ltd., Luxshare Precision Investment Co., LTd.,
Yancheng Lixun Enterprise Management Service Partnership (Limited Partnership), Lixun Intelligent Equipment (Yancheng) Co.,
Ltd., Luxis Precision Intelligent Manufacturing (Kunshan) Co., Ltd., Lixun Intelligent Electronic Service (Kunshan) Co., Ltd., Liding
Electronic Technology (Dongguan) Co., Ltd., Luxshare Precision Technology (Nanjing) Co., Ltd., Henan Lide Precision Industry
Co., Ltd. and Changzhi Lixun Precision Industry Co., Ltd.; the consolidation scope adds by cash acquisition Rikai Precision
Technology (Yancheng) Co., Ltd., Zhejiang Puxing Electronic Technology Co., Ltd.; the consolidation scope addes by agreement
control Caldigit Holding (Cayman) and Tainhan Precision Co., Ltd.; the shares held in Wuxi Huihong Electronics Co., Ltd. are
transferred during this period, so it is not included in the consolidation scope; Ji’an City Jihzou District Lixun Electronics Co., Ltd.,
Speedtech (LS-ICT) Co., Limited, Lixun International Cable Co., Ltd. and Luxshare-ICT International B.V. are cancelled by
liquidation, so they are not included in the consolidation scope.
VIII. Appointment and dismissal of accounting firms
Accounting firm currently engaged:
Name of domestic accounting firm BDO China Shu Lun Pan Certified Public Accountants LLP
Remuneration of domestic accounting firm (in RMB0’000) 230
Consecutive years in which the domestic accounting firm has
14
provided auditing service
Certified public accountant of the domestic accounting firm LI Jing, WEI Gang
Consecutive years in which the certified public accountant of the
5
domestic accounting firm has provided auditing service
Name of foreign accounting firm (if any) None
Remuneration of foreign accounting firm (in RMB0’000) (if any) 0
Consecutive years in which the foreign accounting firm has
None
provided auditing service (if any)
Certified public accountant of the foreign accounting firm (if
None
any)
Consecutive years in which the certified public accountant of the None
97
Luxshare Precision Industry Co., Ltd. Annual Report 2021
foreign accounting firm has provided auditing service (if any)
Whether a new accounting firm was engaged during the reporting period?
□ Yes √ No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor:
□ Applicable √ N/A
IX. Possibility of listing suspension and termination after disclosure of the annual report
□ Applicable √ N/A
X. Matters relating to bankruptcy and reorganization
□ Applicable √ N/A
We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.
XI. Material litigation and arbitration proceedings
√ Applicable □ N/A
Amount Whether a Enforcement of Information
Date of
Background claimed provision is Status Result and effect judgment/ disclosure
disclosure
(RMB0’000) recognized award available at
The case has been
settled/ closed by
Other litigation Closed by
mediation or won,
during the reporting 89.57 No Closed mediation or N/A
and does not have
period enforced
a material effect
on us.
The case is
Other litigation pending, and will
during the reporting 47,706.74 No Pending not have a Pending N/A
period material effect on
us.
XII. Penalty and rectification
□ Applicable √ N/A
We have not been subject to any punishment or required to make any rectification during the reporting period.
98
Luxshare Precision Industry Co., Ltd. Annual Report 2021
XIII. Integrity of the Company, its controlling shareholder and actual controller
√ Applicable □ N/A
There wasn’t any outstanding court judgment or overdue debt of a large amount involving us or our controlling shareholder or actual
controllers during the reporting period.
XIV. Material related-party transactions
1. Related-party transactions relating to day-to-day operation
√ Applicable □ N/A
Approv
% of the Market
ed limit
total Whethe price
of
Related- Amount amount r or not Method availabl
Pricing Transact transacti Date of Information
Counterp Relation party (in of the exceed of e for the
Type principl ion on disclosu disclosure
arty ship transacti RMB0’ same the settleme same
e price amount re available at
ons 000) type of approve nt type of
(in
transacti d limit transacti
RMB0’
ons ons
000)
Announcement
Purchas on Expected
e of Daily Related
Related Purchasi Market- Fair Fair April
BCS goods Bank Party
legal ng set market 370.89 0.00% 200 Yes market 21,
Suzhou from transfer Transactions for
person goods prices price price 2021
related 2021
party (Announcement
No.: 2021-039)
Announcement
on Expected
Sales of Daily Related
Related Market- Fair Fair April
BCS goods to Sales of 21,871. Bank Party
legal set market 0.14% 27,500 No market 21,
Suzhou related goods 71 transfer Transactions for
person prices price price 2021
persons 2021
(Announcement
No.: 2021-039)
Announcement
on Expected
Sales of
Related Market- Fair Fair Added Daily
Luxsan goods to Sales of 41,714. Bank October
legal set market 0.27% 50,000 No market Related Party
Kunshan related goods 73 transfer 8, 2021
person prices price price Transactions for
persons
2021
(Announcement
99
Luxshare Precision Industry Co., Ltd. Annual Report 2021
No.: 2021-081)
63,957.
Total -- -- -- 77,700 -- -- -- -- --
33
Particulars of huge-amount sales
N/A
returns
If the total amount of daily When expecting the annual daily related party transactions, the Company conducts the appraisal and
related-party transactions that are calculation of possible related party transactions according to the market situation, but the actually
expected to occur during the reporting accrued amount is determined based on market situation, the two parties’ business development,
period is estimated by type, the actual actual demands and specific implementation progress, resulting in certain differences between
transactions occurred during the actually accrued amount and expected amount. The foregoing belongs to the acts of normal business
reporting period (if any) and will not have a significant impact on daily operation and performance of the Company.
Reason of any great difference
between transaction price and N/A
reference market price (if applicable)
2 Related-party transactions involving acquisition or sales of assets or equities
□ Applicable √ N/A
We have not conducted any related-party transaction involving acquisition or sales of assets or equities during the reporting period.
3. Related-party transactions involving joint external investment
□ Applicable √ N/A
The Company had no related-party transactions on joint investments during the reporting period.
4. Accounts receivable from and payable to related parties
□ Applicable √ N/A
We did not have any accounts receivable from or payable to any related party during the reporting period.
5. Financial business with its related financial companies
□ Applicable √ N/A
There are no deposits, loans, credits or other financial transactions between the Company, its related financial companies and related
parties.
6. Financial business between the financial companies controlled by the Company and related parties
□ Applicable √ N/A
There are no deposits, loans, credits or other financial transactions between the financial companies controlled by the Company and
related parties.
100
Luxshare Precision Industry Co., Ltd. Annual Report 2021
7. Other significant related-party transactions
□ Applicable √ N/A
We have not conducted any other material related-party transaction during the reporting period.
XV. Significant contracts and performance thereof
1. Trusteeship, contracting and leases
(1) Trusteeship
□ Applicable √ N/A
No such case during the reporting period.
(2) Contracting
□ Applicable √ N/A
No such case during the reporting period.
(3) Leases
□ Applicable √ N/A
No such case during the reporting period.
2. Material guarantees
√ Applicable □ N/A
In RMB0’000
External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries)
Disclosure
Whether
date of
Counter or not
announcem Maximum Effective Actual Whether
Type of Collateral guarant Term of provided
Obligor ent on the amount date of amount or not
guarantee (if any) ee (if guarantee for a
maximum guaranteed guarantee guaranteed expired
any) related
amount
party
guaranteed
Guarantees provided by the Company for its subsidiaries
Disclosure Whether
date of Counter or not
Maximum Effective Actual Whether
announcem Type of Collateral guarant Term of provided
Obligor amount date of amount or not
ent on the guarantee (if any) ee (if guarantee for a
guaranteed guarantee guaranteed expired
maximum any) related
amount party
101
Luxshare Precision Industry Co., Ltd. Annual Report 2021
guaranteed
LUXSHAR
Joint and
E April 20, Five
510,056 July 20, 2020 several No Yes
PRECISIO 2020 years
guarantee
N
LUXSHAR
Joint and
E April 20, June 29,
9,563.55 several A year No Yes
PRECISIO 2021 2021
guarantee
N
ICT-LANT
O/LUXSH Joint and
April 20,
ARE 277,342.95 several A year No Yes
2021
PRECISIO guarantee
N
LUXSHAR
Joint and
E April 20, July 28, Five
63,119.43 several No Yes
PRECISIO 2021 2021 years
guarantee
N
Total amount of Total amount of
guarantee approved to guarantee actually
be provided for 350,025.93 provided for subsidiaries
subsidiaries during the during the reporting
reporting period (B1) period (B2)
Total amount of
Total amount of
guarantee approved to
guarantee actually
be provided for
860,081.93 provided for subsidiaries
subsidiaries as at the end
as at the end of the
of the reporting period
reporting period (B4)
(B3)
Guarantees provided by subsidiaries for each other
Disclosure
Whether
date of
Counter or not
announcem Maximum Effective Actual Whether
Type of Collateral guarant Term of provided
Obligor ent on the amount date of amount or not
guarantee (if any) ee (if guarantee for a
maximum guaranteed guarantee guaranteed expired
any) related
amount
party
guaranteed
Total amount of guarantee provided by the Company
Total amount of guarantee Total amount of
approved during the reporting 350,025.93 guarantee actually
period (A1+B1+C1) provided during the
102
Luxshare Precision Industry Co., Ltd. Annual Report 2021
reporting period
(A2+B2+C2)
Total amount of
Total amount of guarantee guarantee actually
approved as at the end of the 860,081.93 provided as at the end of
reporting period (A3+B3+C3) the reporting period
(A4+B4+C4)
Ratio of total amount of guarantee actually
provided (A4+B4+C4) to the net assets of the 0.00%
Company
Including:
Outstanding guarantees provided for shareholders,
0
actual controller and their affiliates (D)
Explanation about warranty liability already
incurred or possible several and joint liquidation
None
liability shown by evidence during the reporting
period for the undue guarantees (if any)
Explanation about external guarantees provided in
contravention of the established procedures (if None
any)
Particulars of the guarantees provided using complex method:
N/A
3. Entrusted management of cash assets
（1）Entrusted wealth management
√ Applicable □ N/A
Entrusted wealth management during the reporting period:
In RMB0’000
Impairment amount
made for overdue
Type Source of funds Total amount Outstanding amount Overdue amount uncollected wealth
management
products
Bank wealth
Self-owned funds 272,472.82 199,119.95 0 0
management amount
Total 272,472.82 199,119.95 0 0
Details of entrusted wealth management with individually significant amount or low safety, poor liquidity, high risk
□ Applicable √ N/A
Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:
103
Luxshare Precision Industry Co., Ltd. Annual Report 2021
□ Applicable √ N/A
（2）Entrusted loans
√ Applicable □ N/A
Entrusted loans during the reporting period:
In RMB0’000
Total amount Source of funds Outstanding amount Overdue amount
863,350 Self-owned funds 863,350 0
Details of entrusted loans with individually significant amount or low safety, poor liquidity, high risk
□ Applicable √ N/A
Entrusted loans the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable √ N/A
4. Other significant contracts
□ Applicable √ N/A
We have not entered into any other material contract during the reporting period.
XVI. Other significant matters
□ Applicable √ N/A
The Company has no other significant matters to be explained during the reporting period.
XVII. Significant events of subsidiaries of the Company
□ Applicable √ N/A
104
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section VII Changes in shares and shareholders
I. Changes in shares
1. Changes in shares
Unit: Share
Before the change ＋,－ After the change
Shares
New converted
Proportio Stock Proportio
Number shares from Other Subtotal Number
n dividend n
issued capital
reserve
11,007,92 -4,855,27 -4,855,27
I. Non-tradable shares 0.16% 6,152,646 0.09%
1 5 5
1. Shares held by the State
2. Shares held by
State-owned corporations
3. Shares held by other -2,755,78 -2,755,78
2,851,808 0.04% 96,022 0.00%
domestic investors 6 6
Incl.: Shares held by
domestic non-State-owned
corporations
Shares held by domestic -2,755,78 -2,755,78
2,851,808 0.04% 96,022 0.00%
natural persons 6 6
4. Shares held by foreign -2,099,48 -2,099,48
8,156,113 0.12% 6,056,624 0.09%
investors 9 9
Incl.: Shares held by foreign
corporations
Shares held by foreign natural -2,099,48 -2,099,48
8,156,113 0.12% 6,056,624 0.09%
persons 9 9
7,006,825, 58,344,24 58,344,24 7,065,170
II. Tradable shares 99.84% 99.91%
870 8 8 ,118
1. RMB-denominated 7,006,825, 58,344,24 58,344,24 7,065,170
99.84% 99.91%
ordinary shares 870 8 8 ,118
2. Foreign
currency-denominated shares
listed domestically
105
Luxshare Precision Industry Co., Ltd. Annual Report 2021
3. Foreign
currency-denominated shares
listed overseas
4. Others
7,017,833, 53,488,97 53,488,97 7,071,322
III. Total shares 100% 100%
791 3 3 ,764
Reasons of changes in shares:
√ Applicable □ N/A
1. On June 22, 2020, the Company held the 19th meeting of the fourth Board of Directors and the 19th meeting of the fourth
Board of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the First Vesting Period Initially Granted
under 2019 Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise
options in the first vesting period at their sole discretion, and the actual exercisable period is from July 7, 2020 to April 21, 2021.
Refer to the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting Period of the 2019
Stock Option Incentive Plan (Announcement No.2020-049) for details. During the reporting period, the grantees exercised 1,291,186
shares in total in the first vesting period initially vested under 2019 stock option incentive plan.
2. On December 2, 2020, the Company held the 17th meeting of the fourth Board of Directors and the 27th meeting of the fourth
Board of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the Second Vesting Period under 2018 Stock
Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the second
vesting period at their sole discretion, and the actual exercisable period is from December 22, 2020 to September 24, 2021. Refer to
the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the 2018 Stock
Option Incentive Plan (Announcement No.2020-108) for details. During the reporting period, the grantees exercised 13,854,690
shares in total in the second vesting period under 2018 stock option incentive plan.
3. On January 22, 2021, the Company held the 29th meeting of the fourth Board of Directors and the 29th meeting of the fourth
Board of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the First Vesting Period Reserved under 2019
Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the
first vesting period at their sole discretion, and the actual exercisable period is from February 8, 2021 to November 26, 2021. For
details, please see the Suggestive Announcement on Exercise at Their Sole Discretion in the First Vesting Period Reserved under
2019 Stock Option Incentive Plan (Announcement No. 2021-021). During the reporting period, the grantees exercised 4,109,496
shares in total in the first vesting period reserved under 2019 stock option incentive plan.
4. On July 2, 2021, the Company held the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of
Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the Second Vesting Period Initially Granted under 2019
Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the
second vesting period at their sole discretion, and the actual exercisable period is from July 15, 2021 to April 21, 2022. For details,
please see the Suggestive Announcement on Exercise at Their Sole Discretion in the Second Vesting Period Initially Granted under
2019 Stock Option Incentive Plan (Announcement No. 2021-069). During the reporting period, the grantees exercised 14,627,322
shares in total in the second vesting period initially vested under 2019 stock option incentive plan.
5. On December 3, 2021, the Company held the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board
of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the Third Vesting Period under 2018 Stock Option
Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the third vesting
period at their sole discretion, and the actual exercisable period is from December 10, 2021 to September 23, 2022. For details, please
see the Suggestive Announcement on Exercise at Their Sole Discretion in the Third Vesting Period under 2018 Stock Option
Incentive Plan (Announcement No. 2021-102). During the reporting period, the grantees exercised 19,597,470 shares in total in the
third vesting period under 2018 stock option incentive plan.
106
Luxshare Precision Industry Co., Ltd. Annual Report 2021
6. The Company publicly offered 30,000,000 convertible corporate bonds (abbreviation: Luxshare Convertible Bonds; bond
code: 128136) on November 3, 2020, and the period for which the convertible corporate bonds can be converted into shares is from
May 10, 2021 to November 2, 2026. During the reporting period, the number of shares converted into by bonds was 8,809.
Approval of changes in shares:
√ Applicable □ N/A
1. Review and approve by the 19th meeting of the fourth Board of Directors and the 19th meeting of the fourth Board of
Supervisors of the Company;
2. Review and approve by the 27th meeting of the fourth Board of Directors and the 27th meeting of the fourth Board of
Supervisors of the Company;
3. Review and approve by the 29th meeting of the fourth Board of Directors and the 29th meeting of the fourth Board of
Supervisors of the Company;
4. Review and approve by the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of Supervisors of
the Company;
5. Review and approve by the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board of Supervisors of
the Company.
Transfer of share ownership:
√ Applicable □ N/A
1. Period in which the stock options vested in the first vesting period initially granted under the 2019 stock option incentive plan
may be exercised by the relevant grantees at their sole discretion: from July 7, 2020 to April 21, 2021;
2. Period in which the stock options vested in the second vesting period under the 2019 stock option incentive plan may be
exercised by the relevant grantees at their sole discretion: from December 22, 2020 to September 24, 2021;
3. Period in which the stock options vested in the first vesting period reserved under the 2019 stock option incentive plan may
be exercised by the relevant grantees at their sole discretion: from February 8, 2021 to November 26, 2021;
4. Period in which the stock options vested in the second vesting period initially granted under the 2019 stock option incentive
plan may be exercised by the relevant grantees at their sole discretion: From July 15, 2021 to April 21, 2022;
5. Period in which the stock options vested in the third vesting period under the 2018 stock option incentive plan may be
exercised by the relevant grantees at their sole discretion: from December 10, 2021 to September 23, 2022.
Effect of changes in shares on the basic earnings per share, diluted earnings per share, net assets per share attributable to ordinary
shareholders and other financial indicators of the Company in the preceding year and the most recent reporting period:
□ Applicable √ N/A
Other information disclosed as the Company deems necessary or required by the securities regulatory authorities:
□ Applicable √ N/A
2、Changes in non-tradable shares
√ Applicable □ N/A
Unit: Share
Number of Number of Balance of
Balance of
non-tradable non-tradable non-tradable
non-tradable Reason for
Shareholder shares shares increased shares as at Unlock date
shares as at restriction
unlocked in in the reporting December 31,
January 1, 2020
the reporting period 2020
107
Luxshare Precision Industry Co., Ltd. Annual Report 2021
period
November 25, 2021 (the
Lock-up shares
day next to the sixth month
XUE Haigao 912,578 0 912,578 0 for senior
following expiry of the
officers
original term of office)
November 25, 2021 (the
Lock-up shares
day next to the sixth month
LI Bin 1,571,664 0 1,571,664 0 for senior
following expiry of the
officers
original term of office)
November 25, 2021 (the
Lock-up shares
day next to the sixth month
XIONG Tengfang 367,566 0 367,566 0 for senior
following expiry of the
officers
original term of office)
November 25, 2021 (the
Lock-up shares
day next to the sixth month
YE Yiling 582,529 0 582,529 0 for senior
following expiry of the
officers
original term of office)
The restricted conditions
Lock-up shares are released according to
WU Tiansong 273,775 225,607 0 499,382 for senior the requirements on the
officers lock-up shares for senior
officers
The restricted conditions
Lock-up shares are released according to
WANG Laisheng 6,970,267 0 1,742,567 5,227,700 for senior the requirements on the
officers lock-up shares for senior
officers
The restricted conditions
Lock-up shares are released according to
HUANG Dawei 329,542 0 0 329,542 for senior the requirements on the
officers lock-up shares for senior
officers
The restricted conditions
Lock-up shares are released according to
WANG Tao 0 96,022 0 96,022 for senior the requirements on the
officers lock-up shares for senior
officers
Total 11,007,921 321,629 5,176,904 6,152,646 -- --
108
Luxshare Precision Industry Co., Ltd. Annual Report 2021
II. Offering and listing of securities
1. Offering of securities (other than preferred shares) during the reporting period
□ Applicable √ N/A
2. Changes in total number of shares, shareholding structure, and structure of assets and liabilities of the
Company
√ Applicable □ N/A
1. Upon review and approval by the 19th meeting of the fourth Board of Directors, the 27th meeting of the fourth Board of
Directors, the 29th meeting of the fourth Board of Directors, the 6th meeting of the fifth Board of Directors, and the 2nd meeting of the
fifth Board of Directors of the Company, the vesting conditions for the first vesting period initially granted under 2019 stock option
incentive plan, the second vesting period under 2018 stock option incentive plan, the first vesting period reserved under 2019 stock
option incentive plan, the second vesting period initially granted under 2019 stock option incentive plan, and the third vesting period
under 2018 stock option incentive plan were satisfied, and the Company agreed that the relevant stock option grantees of the
Company exercise options at their sole discretion, and a total of additional 53,480,164 shares were issued to the grantees exercising
options at their sole discretion during the reporting period.
2. The Company publicly offered 30,000,000 convertible corporate bonds (abbreviation: Luxshare Convertible Bonds; bond
code: 128136) on November 3, 2020, and the period for which the convertible corporate bonds can be converted into shares is from
May 10, 2021 to November 2, 2026. During the reporting period, the number of shares converted into by bonds was 8,809.
3. Outstanding employee shares
□ Applicable √ N/A
III. Shareholders and actual controllers
1. Number of shareholders and shareholding structure of the Company
Unit: Share
Total number of
preferred
Total number of Total number of
shareholders
ordinary preferred
Total number whose voting
shareholders at shareholders
of ordinary rights had been
the end of the whose voting
shareholders at restituted at the
258,745 month 326,906 rights had been 0 0
the end of the end of the month
immediately restituted at the
reporting immediately
preceding the end of the
period preceding the
date of this reporting period (if
date of this
annual report any) (Note 8)
annual report (if
any) (Note 8)
Shareholding of ordinary shareholders holding more than 5% of the shares or top 10 ordinary shareholders
109
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Changes Pledge, mark or freeze
No. of
in No. of
ordinary Changes in
sharehold non-tradab
shares held shareholdin
Status of Sharehold ing le
Shareholder at the end g during the
shareholder ing ratio during ordinary Status of shares Quantity
of the reporting
the shares
reporting period
reporting held
period
period
Foreign 2,731,537 -1387084 2,731,537,
Luxshare Limited 38.63% 0 Pledge 525,407,503
corporation ,636 33 636
Hong Kong
Foreign 593,835,7 10828288 593,835,7
Securities Clearing 8.40% 0
corporation 64 4 64
Company Limited
China Securities
Domestic
Finance 84,428,88 84,428,88
non-stated owned 1.19% 0
Corporation 8 8
corporation
Limited
Central Huijin
Stated owned 58,041,01 -3854300 58,041,01
Asset Management 0.82% 0
corporation 22 2
Co., Ltd.
China Merchants
Bank Co., Ltd. -
Domestic
Ruiyuan Growth 53,298,29 53,298,29
non-stated owned 0.75% 0
Value Hybrid 9 9
corporation
Securities
Investment Fund
Pegatron Domestic
39,845,10 39,845,10
Technology non-stated owned 0.56% 0
5 5
(Shanghai) Co Ltd corporation
E Fund -
Agricultural Bank
Domestic
of China - E Fund 38,656,34 38,656,34
non-stated owned 0.55% 0
Zhongzheng 3 3
corporation
Financial Asset
Management Plan
Industrial and
Commercial Bank
of China Limited – Domestic
38,631,78 38,631,78
Zhong Ou Times non-stated owned 0.55% 0
8 8
Pioneer Stock corporation
Sponsored
Securities
110
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Investment Fund
China AMC-
Agricultural Bank
Domestic
of China - China 38,576,83 38,576,83
non-stated owned 0.55% 0
AMC Zhongzheng 1 1
corporation
Financial Asset
Management Plan
Zhong Ou Fund -
Agricultural Bank
Domestic
of China - Zhong 38,557,18 38,557,18
non-stated owned 0.55% 0
Ou Zhongzheng 4 4
corporation
Financial Asset
Management Plan
Strategic investors or general
corporations becoming top 10 ordinary
N/A
shareholders as a result of rights issues
(if any) (Note 3)
1. Luxshare Limited is the controlling shareholder of the Company;
Affiliates or concert parties among the 2. The Company is not aware of whether there are associates or persons acting in concert as
shareholders listed above defined in the Administrative Measures for the Information Disclosure of Shareholding
Changes of Shareholders of Listed Companies.
Delegation or waiver of voting rights
or ownership of voting rights as a
N/A
proxy in respect of the shareholders
listed above
Shares held by top 10 holders of tradable shares
Number of tradable shares held at the end of the Type
Shareholder
reporting period Type Quantity
RMB-denominat
Luxshare Limited 2,731,537,636 2,731,537,636
ed ordinary share
Hong Kong Securities Clearing RMB-denominat
593,835,764 593,835,764
Company Limited ed ordinary share
China Securities Finance Corporation RMB-denominat
84,428,888 84,428,888
Limited ed ordinary share
Central Huijin Asset Management Co., RMB-denominat
58,041,012 58,041,012
Ltd. ed ordinary share
China Merchants Bank Co., Ltd. -
RMB-denominat
Ruiyuan Growth Value Hybrid 53,298,299 53,298,299
ed ordinary share
Securities Investment Fund
Pegatron Technology (Shanghai) Co 39,845,105 RMB-denominat 39,845,105
111
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Ltd ed ordinary share
E Fund - Agricultural Bank of China -
RMB-denominat
E Fund Zhongzheng Financial Asset 38,656,343 38,656,343
ed ordinary share
Management Plan
Industrial and Commercial Bank of
China Limited – Zhong Ou Times RMB-denominat
38,631,788 38,631,788
Pioneer Stock Sponsored Securities ed ordinary share
Investment Fund
China AMC- Agricultural Bank of
RMB-denominat
China - China AMC Zhongzheng 38,576,831 38,576,831
ed ordinary share
Financial Asset Management Plan
Zhong Ou Fund - Agricultural Bank of
RMB-denominat
China - Zhong Ou Zhongzheng 38,557,184 38,557,184
ed ordinary share
Financial Asset Management Plan
Affiliates or concert parties among top
10 holders of tradable ordinary shares,
and among top 10 holders of tradable N/A
ordinary shares and top 10 ordinary
shareholders
Engagement by top 10 ordinary
shareholders in margin trading (if any) N/A
(Note 4)
Did any top 10 ordinary shareholder or top 10 holder of tradable ordinary shares conduct any transaction under repurchase agreement
during the reporting period?
□ Yes √ No
No top 10 ordinary shareholder or top 10 holder of tradable ordinary shares has conducted any transaction under repurchase
agreement during the reporting period
2. Controlling shareholder of the Company
Nature of controlling shareholder: Controlled by foreign investor
Type of controlling shareholder: Corporation
Name of controlling Legal representative/ Change in organization
Date of establishment Main business
shareholder principal code
Investment and share
Luxshare Limited WANG Laichun August 27, 1999
holding
Shares held by the controlling
shareholder in other
companies listed on domestic None
or foreign stock exchanges
during the reporting period
112
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Change in the controlling shareholder during the reporting period:
□ Applicable √ N/A
Our controlling shareholder has remained unchanged during the reporting period.
3. Actual controllers of the Company and their concerted parties
Nature of actual controllers: Natural person
Type of actual controllers: Natural person
Relationship with the Whether or not hold a residence permit in any
Name of actual controller Nationality
actual controller other country or region
WANG Laichun Himself Hong Kong No
WANG Laisheng Himself Hong Kong No
Ms. WANG Laichun, Chairman and General Manager of our Company, former director of
Shenzhen High-tech Industry Association and Vice Chairman of Shenzhen Electronics
Industry Association, purchased shares of Luxshare Limited jointly with Mr. WANG
Laisheng in 1999, and founded and served as Chairman of Luxshare Precision Industry
(Shenzhen) Co., Ltd. in 2004 through Luxshare HK.
Main occupations and titles
Mr. WANG Laisheng serves as the vice chairman of the Company and previously worked as
the managing director of Shenzhen Quality Association and the director of Guangdong
Laboratories Federation. Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the
shares of Luxshare Limited in 1999, and in 2004, Mr. WANG Laisheng and Ms. WANG
Laisheng jointly founded Luxshare Precision Industry (Shenzhen) Co., Ltd..
Whether or not control any other
company listed on a domestic or
None
foreign stock exchange in the past
ten years
Change in the actual controllers during the reporting period:
□ Applicable √ N/A
Our actual controllers have remained unchanged during the reporting period.
Diagram of ownership and control relationship between the Company and its actual controllers:
WANG WANG
Laichun Laisheng
Luxshare Limited
Luxshare-ICT
113
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether the actual controllers control the Company through any trust or other ways of asset management?
□ Applicable √ N/A
4. The Company’s controlling shareholder or top 1 shareholder and its persons acting in concert pledged
account for 80% in total of the Company’s shares held by them
□ Applicable √ N/A
5. Other institutional shareholders owning over 10% of shares
□ Applicable √ N/A
6. Restrictions on shareholding reduction of the controlling shareholder, actual controller, restructuring
parties, and other commitment subjects
□ Applicable √ N/A
IV. Specific implementation of share repurchases during the reporting period
Progress of share repurchase:
□ Applicable √ N/A
Progress of sales of repurchased shares through call auction:
□ Applicable √ N/A
114
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section VIII Preference Shares
□ Applicable √ N/A
We did not have any preferred share during the reporting period.
115
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section IX Bonds
√ Applicable □ N/A
I. Enterprise bonds
□ Applicable √ N/A
The Company had no enterprise bonds during the reporting period.
II. Corporate bonds
□ Applicable √ N/A
The Company had no corporate bonds during the reporting period.
III. Non-financial corporate debt financing instruments
√ Applicable □ N/A
1. Basic information of non-financial corporate debt financing instruments
In RMB
Principal
Bond Maturity Bond and interest Trading
Bond name Bond code Issue date Start date Interest rate
abbreviation date balance payment venue
method
Phase I
ultra-short-t
erm
A lump sum
financing
21 payment of Interbank
bonds in January 13, January 15, October 12, 800,000,000
Luxshare-I 012100153 3.30% principal bond
2021 of 2021 2021 2021 .00
CT SCP001 and interest market
Luxshare
at maturity
Precision
Industry
Co., Ltd.
Phase II
A lump sum
ultra-short-t
21 payment of Interbank
erm August 18, August 20, November 900,000,000
Luxshare-I 012103051 2.45% principal bond
financing 2021 2021 18, 2021 .00
CT SCP002 and interest market
bonds in
at maturity
2021 of
116
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare
Precision
Industry
Co., Ltd.
Phase III
ultra-short-t
erm
A lump sum
financing
21 payment of Interbank
bonds in August 24, August 25, November 500,000,000
Luxshare-I 012103127 2.45% principal bond
2021 of 2021 2021 23, 2021 .00
CT SCP003 and interest market
Luxshare
at maturity
Precision
Industry
Co., Ltd.
Phase IV
ultra-short-t
erm
A lump sum
financing
21 payment of Interbank
bonds in October 20, October 22, July 19, 800,000,000
Luxshare-I 012103825 3.00% principal bond
2021 of 2021 2021 2022 .00
CT SCP004 and interest market
Luxshare
at maturity
Precision
Industry
Co., Ltd.
Phase V
ultra-short-t
erm
A lump sum
financing
21 payment of Interbank
bonds in November November February 400,000,000
Luxshare-I 012105034 2.53% principal bond
2021 of 16, 2021 11, 2021 15, 2022 .00
CT SCP005 and interest market
Luxshare
at maturity
Precision
Industry
Co., Ltd.
Phase VI
ultra-short-t
erm A lump sum
financing 21 payment of Interbank
November November February 400,000,000
bonds in Luxshare-I 012105157 2.53% principal bond
24, 2021 25, 2021 23, 2022 .00
2021 of CT SCP006 and interest market
Luxshare at maturity
Precision
Industry
117
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Co., Ltd.
Investors’ appropriate arrangements (if Institutional investors on the national interbank bond market (except for purchasers
any) prohibited by laws and regulations of China)
Applicable trading mechanism Public trading
Whether there is the risk of
termination of listing (if any) and No
countermeasures
Bonds overdue but not yet repaid
□ Applicable √ N/A
2. Trigger and implementation of the issuer or investor option provisions or investor protection provisions
□ Applicable √ N/A
3. Intermediaries
Name of bond Name of Name of accountants Contact person of
Office address Phone
project intermediary signing this report Intermediary
Phase I
ultra-short-term China Merchants
financing bonds in China Merchants Bank Building, No.
None MIAO Jianmin 0755-88026159
2021 of Luxshare Bank Co., Ltd. 7088 Houhai
Precision Industry Avenue, Shenzhen
Co., Ltd.
Phase I
ultra-short-term
Shanghai Pudong No. 12, Zhongshan
financing bonds in
Development Bank Dongyi Road, None ZHENG Yang 021-61616388
2021 of Luxshare
Co., Ltd. Shanghai
Precision Industry
Co., Ltd.
3401, Office
Phase I
Building of
ultra-short-term
Beijing Tian Yuan Shenzhen Stock
financing bonds in
(Shenzhen) Law Exchange Square, None TAN Qing 0755-82550700
2021 of Luxshare
Firm 2012 Shennan
Precision Industry
Avenue, Futian
Co., Ltd.
District, Shenzhen
Phase I 10/F, Building 7,
ultra-short-term BDO China Shu Lun Courtyard 16,
LI Jing and ZHEN
financing bonds in Pan Certified Public Middle Road of ZHU Jiandi 010-88210608
Zhijie
2021 of Luxshare Accountants LLP West 4th Ring,
Precision Industry Haidian District,
118
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Co., Ltd. Beijing
Phase I 1101, 1102 and 1103
ultra-short-term Units, 11/F, South
Golden Credit
financing bonds in Block, Building 1,
Rating International None CUI Lei 010-62299850
2021 of Luxshare Chaowai West
Co., Ltd.
Precision Industry Street, Chaoyang
Co., Ltd. District, Beijing
Phase I
33-34/F, Oriental
ultra-short-term
Interbank Market International
financing bonds in
Clearing House Co., Financial Plaza, 318 None XIE Zhong 021-63326662
2021 of Luxshare
Ltd. Zhongshan South
Precision Industry
Road, Shanghai
Co., Ltd.
Phase I
ultra-short-term
Beijing Financial No. B17, Financial
financing bonds in
Assets Exchange Street, Xicheng None GUO Bing 010-57896722
2021 of Luxshare
Co., Ltd. District, Beijing
Precision Industry
Co., Ltd.
Phase II
ultra-short-term
168 Yincheng
financing bonds in Bank of Shanghai
Middle Road, None JIN Yu 021-68476774
2021 of Luxshare Co., Ltd.
Shanghai
Precision Industry
Co., Ltd.
Phase II
Building 1,
ultra-short-term
Courtyard 10,
financing bonds in China CITIC Bank
Guanghua Road, None LI Qingping 010-66635909
2021 of Luxshare Co., Ltd.
Chaoyang District,
Precision Industry
Beijing
Co., Ltd.
3401, Office
Phase II
Building of
ultra-short-term
Beijing Tian Yuan Shenzhen Stock
financing bonds in
(Shenzhen) Law Exchange Square, None TAN Qing 0755-82550700
2021 of Luxshare
Firm 2012 Shennan
Precision Industry
Avenue, Futian
Co., Ltd.
District, Shenzhen
Phase II 10/F, Building 7,
BDO China Shu Lun
ultra-short-term Courtyard 16, LI Jing and ZHEN
Pan Certified Public ZHU Jiandi 010-88210608
financing bonds in Middle Road of Zhijie
Accountants LLP
2021 of Luxshare West 4th Ring,
119
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Precision Industry Haidian District,
Co., Ltd. Beijing
Phase II 1101, 1102 and 1103
ultra-short-term Units, 11/F, South
Golden Credit
financing bonds in Block, Building 1,
Rating International None CUI Lei 010-62299850
2021 of Luxshare Chaowai West
Co., Ltd.
Precision Industry Street, Chaoyang
Co., Ltd. District, Beijing
Phase II
33-34/F, Oriental
ultra-short-term
Interbank Market International
financing bonds in
Clearing House Co., Financial Plaza, 318 None XIE Zhong 021-63326662
2021 of Luxshare
Ltd. Zhongshan South
Precision Industry
Road, Shanghai
Co., Ltd.
Phase II
ultra-short-term
Beijing Financial No. B17, Financial
financing bonds in
Assets Exchange Street, Xicheng None GUO Bing 010-57896722
2021 of Luxshare
Co., Ltd. District, Beijing
Precision Industry
Co., Ltd.
Phase III
ultra-short-term China Merchants
financing bonds in China Merchants Bank Building, No.
None MIAO Jianmin 0755-88026159
2021 of Luxshare Bank Co., Ltd. 7088 Houhai
Precision Industry Avenue, Shenzhen
Co., Ltd.
3401, Office
Phase III
Building of
ultra-short-term
Beijing Tian Yuan Shenzhen Stock
financing bonds in
(Shenzhen) Law Exchange Square, None TAN Qing 0755-82550700
2021 of Luxshare
Firm 2012 Shennan
Precision Industry
Avenue, Futian
Co., Ltd.
District, Shenzhen
Phase III 10/F, Building 7,
ultra-short-term Courtyard 16,
BDO China Shu Lun
financing bonds in Middle Road of LI Jing and ZHEN
Pan Certified Public ZHU Jiandi 010-88210608
2021 of Luxshare West 4th Ring, Zhijie
Accountants LLP
Precision Industry Haidian District,
Co., Ltd. Beijing
Phase III Golden Credit 1101, 1102 and 1103
ultra-short-term Rating International Units, 11/F, South None CUI Lei 010-62299850
financing bonds in Co., Ltd. Block, Building 1,
120
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2021 of Luxshare Chaowai West
Precision Industry Street, Chaoyang
Co., Ltd. District, Beijing
Phase III
33-34/F, Oriental
ultra-short-term
Interbank Market International
financing bonds in
Clearing House Co., Financial Plaza, 318 None XIE Zhong 021-63326662
2021 of Luxshare
Ltd. Zhongshan South
Precision Industry
Road, Shanghai
Co., Ltd.
Phase III
ultra-short-term
Beijing Financial No. B17, Financial
financing bonds in
Assets Exchange Street, Xicheng None GUO Bing 010-57896722
2021 of Luxshare
Co., Ltd. District, Beijing
Precision Industry
Co., Ltd.
Phase IV
ultra-short-term
22 Jianguomennei
financing bonds in Huaxia Bank Co.,
Street, Dongcheng None LI Minji 010-85237515
2021 of Luxshare Ltd.
District, Beijing
Precision Industry
Co., Ltd.
Phase IV
ultra-short-term
168 Yincheng
financing bonds in Bank of Shanghai
Middle Road, None JIN Yu 021-68476774
2021 of Luxshare Co., Ltd.
Shanghai
Precision Industry
Co., Ltd.
3401, Office
Phase IV
Building of
ultra-short-term
Beijing Tian Yuan Shenzhen Stock
financing bonds in
(Shenzhen) Law Exchange Square, None TAN Qing 0755-82550700
2021 of Luxshare
Firm 2012 Shennan
Precision Industry
Avenue, Futian
Co., Ltd.
District, Shenzhen
Phase IV 10/F, Building 7,
ultra-short-term Courtyard 16,
BDO China Shu Lun
financing bonds in Middle Road of LI Jing and ZHEN
Pan Certified Public ZHU Jiandi 010-88210608
2021 of Luxshare West 4th Ring, Zhijie
Accountants LLP
Precision Industry Haidian District,
Co., Ltd. Beijing
Phase IV Golden Credit 1101, 1102 and 1103
None CUI Lei 010-62299850
ultra-short-term Rating International Units, 11/F, South
121
Luxshare Precision Industry Co., Ltd. Annual Report 2021
financing bonds in Co., Ltd. Block, Building 1,
2021 of Luxshare Chaowai West
Precision Industry Street, Chaoyang
Co., Ltd. District, Beijing
Phase IV
33-34/F, Oriental
ultra-short-term
Interbank Market International
financing bonds in
Clearing House Co., Financial Plaza, 318 None XIE Zhong 021-63326662
2021 of Luxshare
Ltd. Zhongshan South
Precision Industry
Road, Shanghai
Co., Ltd.
Phase IV
ultra-short-term
Beijing Financial No. B17, Financial
financing bonds in
Assets Exchange Street, Xicheng None LI Minji 010-85237515
2021 of Luxshare
Co., Ltd. District, Beijing
Precision Industry
Co., Ltd.
Phase V
ultra-short-term 218 Haihe East
financing bonds in China Bohai Bank Road, Hedong
None LI Fu’an 022-58563383
2021 of Luxshare Co., Ltd. District, Tianjin,
Precision Industry China
Co., Ltd.
3401, Office
Phase V
Building of
ultra-short-term
Beijing Tian Yuan Shenzhen Stock
financing bonds in
(Shenzhen) Law Exchange Square, None TAN Qing 0755-82550700
2021 of Luxshare
Firm 2012 Shennan
Precision Industry
Avenue, Futian
Co., Ltd.
District, Shenzhen
Phase V 10/F, Building 7,
ultra-short-term Courtyard 16,
BDO China Shu Lun
financing bonds in Middle Road of LI Jing and ZHEN
Pan Certified Public ZHU Jiandi 010-88210608
2021 of Luxshare West 4th Ring, Zhijie
Accountants LLP
Precision Industry Haidian District,
Co., Ltd. Beijing
Phase V 1101, 1102 and 1103
ultra-short-term Units, 11/F, South
Golden Credit
financing bonds in Block, Building 1,
Rating International None CUI Lei 010-62299850
2021 of Luxshare Chaowai West
Co., Ltd.
Precision Industry Street, Chaoyang
Co., Ltd. District, Beijing
Phase V Interbank Market 33-34/F, Oriental None XIE Zhong 021-63326662
122
Luxshare Precision Industry Co., Ltd. Annual Report 2021
ultra-short-term Clearing House Co., International
financing bonds in Ltd. Financial Plaza, 318
2021 of Luxshare Zhongshan South
Precision Industry Road, Shanghai
Co., Ltd.
Phase V
ultra-short-term
Beijing Financial No. B17, Financial
financing bonds in
Assets Exchange Street, Xicheng None LI Minji 010-85237515
2021 of Luxshare
Co., Ltd. District, Beijing
Precision Industry
Co., Ltd.
Phase VI
ultra-short-term 218 Haihe East
financing bonds in China Bohai Bank Road, Hedong
None LI Fuan 022-58563383
2021 of Luxshare Co., Ltd. District, Tianjin,
Precision Industry China
Co., Ltd.
3401, Office
Phase VI
Building of
ultra-short-term
Beijing Tian Yuan Shenzhen Stock
financing bonds in
(Shenzhen) Law Exchange Square, None TAN Qing 0755-82550700
2021 of Luxshare
Firm 2012 Shennan
Precision Industry
Avenue, Futian
Co., Ltd.
District, Shenzhen
Phase VI 10/F, Building 7,
ultra-short-term Courtyard 16,
BDO China Shu Lun
financing bonds in Middle Road of LI Jing and ZHEN
Pan Certified Public ZHU Jiandi 010-88210608
2021 of Luxshare West 4th Ring, Zhijie
Accountants LLP
Precision Industry Haidian District,
Co., Ltd. Beijing
Phase VI 1101, 1102 and 1103
ultra-short-term Units, 11/F, South
Golden Credit
financing bonds in Block, Building 1,
Rating International None CUI Lei 010-62299850
2021 of Luxshare Chaowai West
Co., Ltd.
Precision Industry Street, Chaoyang
Co., Ltd. District, Beijing
Phase VI
33-34/F, Oriental
ultra-short-term
Interbank Market International
financing bonds in
Clearing House Co., Financial Plaza, 318 None XIE Zhong 021-63326662
2021 of Luxshare
Ltd. Zhongshan South
Precision Industry
Road, Shanghai
Co., Ltd.
123
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Phase VI
ultra-short-term
Beijing Financial No. B17, Financial
financing bonds in
Assets Exchange Street, Xicheng None LI Minji 010-85237515
2021 of Luxshare
Co., Ltd. District, Beijing
Precision Industry
Co., Ltd.
Did the above-mentioned intermediaries change during the reporting period?
□ Yes √ No
4. Use of raised funds
In RMB
Rectifications of Comply with the
Operation of use of the usage, use plan
Name of bond special account proceeds in and other
Total proceeds Used amount Unused amount
project for proceeds (if violation of laws agreements as
any) and regulations promised in the
(if any) prospectus?
Phase I
ultra-short-term
financing bonds
in 2021 of 800,000,000.00 800,000,000.00 0.00 Normal N/A Yes
Luxshare
Precision
Industry Co., Ltd.
Phase II
ultra-short-term
financing bonds
in 2021 of 900,000,000.00 900,000,000.00 0.00 Normal N/A Yes
Luxshare
Precision
Industry Co., Ltd.
Phase III
ultra-short-term
financing bonds
in 2021 of 500,000,000.00 500,000,000.00 0.00 Normal N/A Yes
Luxshare
Precision
Industry Co., Ltd.
Phase IV
ultra-short-term 800,000,000.00 800,000,000.00 0.00 Normal N/A Yes
financing bonds
124
Luxshare Precision Industry Co., Ltd. Annual Report 2021
in 2021 of
Luxshare
Precision
Industry Co., Ltd.
Phase V
ultra-short-term
financing bonds
in 2021 of 400,000,000.00 400,000,000.00 0.00 Normal N/A Yes
Luxshare
Precision
Industry Co., Ltd.
Phase VI
ultra-short-term
financing bonds
in 2021 of 400,000,000.00 400,000,000.00 0.00 Normal N/A Yes
Luxshare
Precision
Industry Co., Ltd.
Use of proceeds in the construction projects
□ Applicable √ N/A
Change by the Company of the usage of the above-mentioned proceeds during the reporting period
□ Applicable √ N/A
5. Adjustment of credit rating results during the reporting period
□ Applicable √ N/A
6. Implementation and changes of guarantees, debt repayment plans and other debt repayment security
measures during the reporting period and their effects on bond investors
□ Applicable √ N/A
IV. Convertible corporate bonds
√ Applicable □ N/A
1. Historic adjustment of conversion price
1. The original conversion price of convertible bonds of the Company was RMB58.48 per share.
2. The conversion price was adjusted from RMB58.48 per share to RMB58.44 per share, which became effective on January 13,
2021, because 4,304,604 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 445,471
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.
3. The conversion price was adjusted from RMB58.44 per share to RMB58.38 per share, which became effective on February
125
Luxshare Precision Industry Co., Ltd. Annual Report 2021
24, 2021, because 5,459,122 shares were added arising from exercise by grantees under 2018 stock option incentive plan and
3,767,011 shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the
Company.
4. The conversion price was adjusted from RMB58.38 per share to RMB58.36 per share, which became effective on March 11,
2021, because 2,649,238 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 967,132
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.
5. The conversion price was adjusted from RMB58.36 per share to RMB58.25 per share, which become effective on July 8,
2021 because the Company implemented the annual equity distribution in 2020, and distributed RMB1.099999 in cash per 10 shares
to all shareholders based on the Company’s existing total share capital of 7,035,428,828 shares.
6. The conversion price was adjusted from RMB58.25 per share to RMB58.20 per share, which became effective on July 22,
2021, because 1,032,246 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 7,360,758
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.
7. The conversion price was adjusted from RMB58.20 per share to RMB58.18 per share, which became effective on September
6, 2021, because 374,655 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 3,417,190
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 16,075 reserved
shares were exercised by grantees under 2019 stock option incentive plan of the Company.
8. The conversion price was adjusted from RMB58.18 per share to RMB58.16 per share, which became effective on November
10, 2021, because 34,828 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 2,501,419
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 32,328 reserved
shares were exercised by grantees under 2019 stock option incentive plan of the Company.
9. The conversion price was adjusted from RMB58.16 per share to RMB58.05 per share, which became effective on December
29, 2021, because 14,413,326 shares were added arising from exercise by grantees under 2018 stock option incentive plan and
1,112,879 shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 41,598
reserved shares were exercised by grantees under 2019 stock option incentive plan of the Company.
10. The conversion price was adjusted from RMB58.05 per share to RMB58.01 per share, which became effective on December
31, 2021, because 5,184,144 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 365,642
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.
11. As of the end of the reporting period, the conversion price of convertible bonds of the Company was RMB58.01 per share.
2. Accumulative conversion of convertible bonds into shares
√ Applicable □ N/A
Proportion of
accumulative
Proportion of
Amount of converted
Number of amount of
Convertible Beginning Total issued accumulative share to the Amount of
Total issue accumulative unconverted
bond and ending convertible converted total shares unconverted
amount converted bonds to the
abbreviation dates bonds (piece) shares issued by the bonds (RMB)
shares (share) total issued
(RMB) Company
amount
before
conversion
Convertible
3,000,000,00 2,999,481,30
bonds of May 10, 2021 30,000,000 518,700.00 8,809 0.02% 99.98%
0.00 0.00
Luxshare
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
3. Top 10 holders of convertible corporate bonds
Unit: Share
Number of
Amount of Percentage of
convertible
Nature of holder convertible corporate convertible corporate
Name of holder of convertible corporate corporate bonds
No. of convertible bonds held at the end bonds held at the end
bonds held at the end of
corporate bonds of the reporting of the reporting
the reporting
period (RMB) period
period
China Construction Bank Corporation -
Zhong Ou New Blue Chip Flexible
1 Other 1,521,569 192,110,258.80 5.07%
Allocation Hybrid Securities Investment
Fund
ICBC Credit Suisse Tianfeng
Convertible Bond Fixed Income
2 Other 1,374,891 173,590,987.88 4.58%
Pension Product - Bank of China
Limited
Stated owned
3 Hua Chuang Securities Co., Ltd. 1,129,630 142,624,824.54 3.77%
corporation
Fuguo Fuyi Enterprising Fixed Income
4 Pension Product - Industrial and Other 745,035 94,066,629.03 2.48%
Commercial Bank of China Limited
Foreign
5 UBS AG 667,423 84,267,493.13 2.23%
corporation
Stated owned
6 Northeast Securities Co., Ltd. 550,303 69,480,156.17 1.83%
corporation
Stated owned
7 China Galaxy Securities Co., Ltd. 523,593 66,107,804.99 1.75%
corporation
China Everbright Bank Co., Ltd.－
8 Bosera Enhanced Convertible Other 479,957 60,598,410.91 1.60%
Bonds-type Securities Investment Fund
Dacheng Fund - Postal Saving Bank -
9 Dacheng Fund - Postal Savings I Other 429,957 54,285,510.91 1.43%
Collective Asset Management Plan
ICBC Credit Suisse Tianyi Hybrid
10 Pension Product - Industrial and Other 416,608 52,600,092.86 1.39%
Commercial Bank of China Limited
4. Significant changes in the profitability, assets and credit status of the guarantors
□ Applicable √ N/A
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
5. The Company’s liabilities, changes in credit at the end of the reporting period and cash arrangements for
debt repayment in future years
According to the Credit Rating Report issued by China Lianhe Credit Rating Co., Ltd. on May 20, 2021, the long-term credit
rating of the Company as the entity is AA+ and the credit rating of the convertible bonds of the Company is AA+. There is no
significant change in the Company’s liabilities and credit. For main accounting data and financial indicators, please see the “VIII
Main Accounting Date and Financial Indicators in the Past Two Years” under Section IX of this report.
V. The loss in the scope of consolidated statements of the Company during the reporting
period exceeded 10% of the net assets at the end of previous reporting period
□ Applicable √ N/A
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□ Applicable √ N/A
VII. Was there violations of rules and regulations during the reporting period?
□ Yes √ No
VIII. Main accounting data and financial indicators of the Company for most recent two
years as of the end of the reporting period
In RMB0’000
Item December 31, 2021 December 31, 2020 Y/Y% Change
Current ratio 1.1154 1.2918 -13.66%
Equity-debt ratio 62.03% 55.86% 6.17%
Quick ratio 0.793 0.8986 -11.75%
2021 2020 Y/Y% Change
Net profit, excluding
601,559.72 608,890.19 -1.20%
non-recurring profit and loss
EBITDA - total debt ratio 59.02% 87.03% -28.01%
Interest coverage ratio 13.41 21.62 -37.97%
Cash interest coverage ratio 14.59 22.12 -34.04%
EBITDA-to-interest coverage
21.47 27.74 -22.60%
ratio
Rate of loans due and repaid 100% 100%
Rate of interest due and paid 100% 100%
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section X Financial Report
I. Auditor’s report
Audit opinion Standard Unqualified Opinion
Signing date of audit report April 27, 2022
Auditor BDO China Shu Lun Pan Certified Public Accountants LLP
Auditor report document number Xin Kuai Shi Bao Zi [2022] No. ZB10640
Name of certified public accountants LI Jing and WEI Gang
Auditor’s Report
I. Audit opinion
We have audited the financial statements of Luxshare Precision Industry Co., Ltd. (“Luxshare Precision”), which
comprise the consolidated and parent company’s balance sheets as at December 31, 2021, and the consolidated and
parent company’s income statements, the consolidated and parent company’s statements of cash flows and the
consolidated and parent company’s statements of changes in owners’ equity for the year then ended, and the notes to the
financial statements.
In our opinion, the accompanying financial statements are prepared in all material respects in accordance with the
Accounting Standards for Business Enterprises and fairly present the consolidated and parent company’s financial
position as of December 31, 2021, and the consolidated and parent company’s operating results and cash flows for the
year then ended.
II. Basis for opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our
responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the
financial statements” section of our report. We are independent of Luxshare Precision with the Code of Ethics for
Chinese Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters identified in our audit are summarized as below:
Key audit matters How we addressed the matter in our audit
(I) Revenue recognition
For details of the accounting policy for and 1. Understand, evaluate and test the design of the
analysis on revenue recognition, please see the key internal controls of the management related to
accounting policies described in the Item (26) under the revenue recognition and the operational effectiveness
Note “III. Significant accounting policies and of those controls;
accounting estimates” and the Item (45) under the “V. 2. Sample the product sales revenue to make test
Notes to consolidated financial statements” to the thereof according to different regions and customers;
financial statements. check supporting documents related to revenue
In 2021, Luxshare Precision’s operating income recognition;
presented in its consolidated financial statements 3. Implement the analytical procedures on income
amounted to RMB153,946,097,800. Luxshare Precision and gross profit and determine whether there are
has a large number of customers at home and abroad. abnormal fluctuations in the amount of revenue for the
Under different delivery methods, the Company current period;
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
recognizes revenue upon the transfer of control of a 4. Understand the modes of cooperation between
related product to a customer. If a customer is also the the Company and customers and suppliers, and
supplier of some raw materials, the Company evaluate the product liability share and the transfer of
recognizes the purchase of raw materials and sales of control;
products respectively based on the transfer of inventory 5. Evaluate the accuracy and completeness of
risks and rewards, product liability, credit risk bearers revenue in conjunction with the confirmation
and business nature, that is, the sales revenue is procedures for receivables & payables and inventories;
recognized based on the gross amount. The revenue is and
one of the Company’s key performance indicators and 6. Analyze the post-period recovery of accounts
the main source of the Company’s profits, so we receivable.
identify the revenue from product sales as the key audit
matter based on the importance of the accounting policy
for revenue recognition and the amount involved.
(II) Provision for decline in value of inventories
Please see the accounting policies described in the 1. Understand, evaluate and test the design of the
Item (11) under the Note “III. Significant accounting key internal controls of the management related to the
policies and accounting estimates” and the Item (7) provision for decline in value of inventories and the
under the Note “V. Notes to consolidated financial operational effectiveness of those controls;
statements” to the financial statements. 2. Obtain the Company’s calculation sheet of the
As at December 31, 2021, Luxshare Precision’s provision for decline in value of inventories, review
inventories and provision for decline in value of the net realizable value of inventories and the
inventories presented in its consolidated financial provision for decline in value of inventories, and
statements amounted to RMB21,255,722,500.00 and evaluate whether the judgment made by the
RMB354,966,700.00 respectively. Inventories of the management in determining the net realizable value of
Company are stated at the lower of cost or net inventories is reasonable;
realizable value. For finished products, their net 3. Check the quantity and conditions of
realizable value is determined at the estimated selling inventories, focus on inspecting the long-term
price of these inventories less the estimated costs inventories, and analyze the adequacy of the provision
necessary to make the sale and relevant taxes; for the for decline in value of inventories if any indication
inventories that need to be processed, in the ordinary exists that such inventories may be impaired, in
production and operation process, their net realizable conjunction with roll-forward procedures; and
value is determined at the estimated selling price of 4. Check the current changes of the provision for
finished products less the estimated costs of completion decline in value of inventories made in previous years
and the estimated costs necessary to make the sale and and analyze the rationality of the changes in the
relevant taxes. The determination of the net realizable provision for decline in value of inventories.
value of inventories involves the management’s use of
significant accounting estimates and judgments, and the
provision for decline in value of inventories is of
significance to the consolidated financial statements, so
we identify the provision for decline in value of
inventories as the key audit matter.
IV. Other information
The management of Luxshare Precision (“management”) is responsible for other information. Other information
comprises the information included in the 2021 Annual Report of Luxshare Precision, but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the management and those charged with governance for the financial statements
The management is responsible for the preparation and fair presentation of the financial statements in accordance
with Accounting Standards for Business Enterprises, and designing, implementing and maintaining internal control that
is necessary to enable the financial statements that are free from material misstatement, whether due to fraud or error.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
In preparing the financial statements, the management is responsible for assessing Luxshare Precision’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the management either intends to liquidate Luxshare Precision or to cease operations, or have
no realistic alternative but to do so.
Those charged with governance of Luxshare Precision (hereinafter referred to as “those charged with governance”)
are responsible for overseeing Luxshare Precision’s financial reporting process.
VI. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
China Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with China Standards on Auditing, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control;
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose to express opinions on the effectiveness of internal control;
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management;
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting, and
meanwhile, based on the audit evidence obtained, on whether a material uncertainty exists related to events or
conditions that may cast significant doubt on Luxshare Precision’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements. If such disclosures are inadequate, we are required to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause Luxshare Precision to cease to continue as a going concern;
(5) Evaluate the overall presentation (including disclosure), structure and content of the financial statements and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation; and
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business
activities within Luxshare Precision to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
II. Financial statements
Statements in notes to the financial statements are dominated in RMB.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
1. Consolidated balance sheet
Prepared by: Luxshare Precision Industry Co., Ltd.
December 31, 2021
In RMB
Item December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 14,204,618,186.43 10,528,245,765.93
Balances with clearing agencies
Placements with banks and other
financial institutions
Held-for-trading financial assets 2,107,118,105.04 3,160,064,470.41
Derivative financial assets
Notes receivable 307,836,634.64 261,208,601.50
Accounts receivable 31,623,185,946.25 13,839,155,340.47
Receivable financing
Prepayments 406,016,492.61 183,886,937.70
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of insurance
contract reserves
Other receivables 598,456,702.88 407,990,780.79
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 20,900,755,733.15 13,211,009,381.15
Contract assets
Held-for-sale assets
Non-current assets due within one
year
Other current assets 2,161,055,820.73 1,804,485,645.49
Total current assets 72,309,043,621.73 43,396,046,923.44
Non-current assets:
Loans and advances to customers
132
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Debt investments 1,464,279,206.63
Other debt investments
Long-term receivables
Long-term equity investment 1,125,605,226.03 1,208,540,333.29
Other investments in equity
235,976,148.42 138,074,571.56
instruments
Other non-current financial assets 5,700,000.00
Investment properties 59,000,690.72 47,592,110.24
Fixed assets 34,113,259,322.43 19,761,012,854.95
Construction in progress 3,685,336,499.02 1,596,064,894.58
Bearer biological assets
Oil and gas assets
Right-of-use assets 425,011,542.28
Intangible assets 2,222,985,029.31 1,265,161,209.65
Development expenditure
Goodwill 1,397,364,508.87 533,139,532.25
Long-term prepaid expenses 733,015,722.42 488,087,044.97
Deferred tax assets 891,215,468.53 355,834,434.21
Other non-current assets 1,904,305,181.49 1,223,199,642.61
Total non-current assets 48,263,054,546.15 26,616,706,628.31
Total assets 120,572,098,167.88 70,012,753,551.75
Current liabilities:
Short-term borrowings 11,919,635,337.99 7,577,068,798.49
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
41,436.00
liabilities
Derivative financial liabilities
Notes payable 234,500,590.93 128,572,111.54
Accounts payable 45,416,165,667.67 23,051,557,603.83
Receipts in advance
Contract liabilities 268,506,246.98 152,512,971.36
Financial assets sold under
repurchase agreements
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Customer deposits and deposits
from banks and other financial
institutions
Funds from securities trading
agency
Funds from underwriting securities
agency
Employee benefits payable 2,099,916,381.79 1,397,632,139.23
Taxes payable 616,039,596.28 237,421,491.63
Other payables 382,391,106.17 146,162,097.14
Including: Interest payable
Dividends payable
Fees and commissions payable
Amounts payable under
reinsurance contracts
Held-for-sale liabilities
Non-current liabilities due within
270,079,590.16 278,527,714.63
one year
Other current liabilities 3,623,423,072.87 623,257,555.89
Total current liabilities 64,830,699,026.84 33,592,712,483.74
Non-current liabilities:
Insurance contract reserves
Long-term borrowings 5,025,096,193.09 1,495,199,238.41
Bonds payable 2,805,785,000.04 2,475,423,249.98
Including: Preferred shares
Perpetual bonds
Lease liabilities 315,093,483.55
Long-term payables
Long-term employee benefits
payable
Provisions 923,738.96 1,360,598.63
Deferred income 538,556,944.18 425,345,982.64
Deferred tax liabilities 1,272,092,467.86 966,092,212.95
Other non-current liabilities 1,207,763.79 150,019,923.33
Total non-current liabilities 9,958,755,591.47 5,513,441,205.94
Total liabilities 74,789,454,618.31 39,106,153,689.68
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Owners’ equity:
Share capital 7,050,485,477.00 6,999,768,186.00
Other equity instruments 527,358,025.98 527,449,226.56
Including: Preferred shares
Perpetual bonds
Capital reserve 2,719,695,281.67 1,890,099,569.60
Less: Treasury shares
Other comprehensive income -35,801,471.29 -44,717,803.06
Special reserve 1,018,784.75
Surplus reserve 985,161,506.61 733,067,797.73
General risk reserve
Unappropriated profit 24,040,637,144.00 17,996,149,257.73
Total owners’ equity attributable to
35,288,554,748.72 28,101,816,234.56
equity holders of the parent company
Minority interests 10,494,088,800.85 2,804,783,627.51
Total owners’ equity 45,782,643,549.57 30,906,599,862.07
Total liabilities and owners’ equity 120,572,098,167.88 70,012,753,551.75
Legal representative: WANG Laichun Chief financial officer: WU Tiansong Head of accounting department: CHEN Huiyong
2. Balance sheet of the parent company
In RMB
Item December 31, 2021 December 31, 2020
Current assets:
Cash and bank balances 999,340,773.61 1,890,655,455.45
Held-for-trading financial assets 597,571,722.08 2,238,600,282.87
Derivative financial assets
Notes receivable 162,983,735.09 147,912,632.85
Accounts receivable 2,901,625,168.21 6,923,152,599.31
Receivable financing
Prepayments 475,784,600.82 295,993,095.73
Other receivables 635,052,127.84 554,707,729.13
Including: Interest receivable
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Dividends receivable 211,543,626.19 11,543,626.19
Inventories 278,795,156.21 151,961,355.37
Contract assets
Held-for-sale assets
Non-current assets due within one
year
Other current assets 1,025,701,494.05 143,001,991.83
Total current assets 7,076,854,777.91 12,345,985,142.54
Non-current assets:
Debt investments 371,512,328.76
Other debt investments
Long-term receivables
Long-term equity investment 21,334,608,802.17 13,603,581,726.93
Other investments in equity
231,075,109.79 704,349,663.13
instruments
Other non-current financial assets 572,768,124.91
Investment properties
Fixed assets 154,033,992.55 142,429,101.80
Construction in progress 16,062,240.56 5,938,197.42
Bearer biological assets
Oil and gas assets
Right-of-use assets 66,189,643.97
Intangible assets 71,279,533.82 52,410,346.09
Development expenditure
Goodwill 53,174,339.31 53,174,339.31
Long-term prepaid expenses 727,403.48
Deferred tax assets 9,473,895.76 7,715,791.60
Other non-current assets 41,620,656.64 164,700.00
Total non-current assets 22,921,798,668.24 14,570,491,269.76
Total assets 29,998,653,446.15 26,916,476,412.30
Current liabilities:
Short-term borrowings 1,892,374,226.82 1,038,298,216.05
Held-for-trading financial
liabilities
Derivative financial liabilities
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Notes payable 1,876,085,509.12 918,494,979.38
Accounts payable 1,683,682,881.16 6,005,518,269.37
Receipts in advance
Contract liabilities 2,776,607.46 28,872,712.52
Employee benefits payable 19,543,803.49 10,262,304.62
Taxes payable 5,588,631.90 21,244,602.02
Other payables 2,373,609.44 1,565,708.61
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due within
50,896,248.67 20,029,777.78
one year
Other current liabilities 1,607,362,301.65 512,468,730.41
Total current liabilities 7,140,683,819.71 8,556,755,300.76
Non-current liabilities:
Long-term borrowings 1,845,854,168.50 180,268,000.00
Bonds payable 2,581,553,066.25 2,475,423,249.98
Including: Preferred shares
Perpetual bonds
Lease liabilities 54,189,902.44
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 9,162,818.02 8,397,770.66
Deferred tax liabilities 34,451,813.60 19,714,831.53
Other non-current liabilities
Total non-current liabilities 4,525,211,768.81 2,683,803,852.17
Total liabilities 11,665,895,588.52 11,240,559,152.93
Owners’ equity:
Share capital 7,050,485,477.00 6,999,768,186.00
Other equity instruments 527,358,025.98 527,449,226.56
Including: Preferred shares
Perpetual bonds
Capital reserve 3,080,149,716.35 2,303,197,437.38
137
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Less: Treasury shares
Other comprehensive income 162,951,644.67 80,735,015.01
Special reserve
Surplus reserve 985,161,506.61 733,067,797.73
Unappropriated profit 6,526,651,487.02 5,031,699,596.69
Total owners’ equity 18,332,757,857.63 15,675,917,259.37
Total liabilities and owners’ equity 29,998,653,446.15 26,916,476,412.30
3. Consolidated income statement
In RMB
Item 2021 2020
I. Total operating income 153,946,097,790.40 92,501,259,211.54
Including: Operating income 153,946,097,790.40 92,501,259,211.54
Interest income
Premiums earned
Fee and commission
income
II. Total operating costs 146,970,931,574.11 85,611,417,151.82
Including: Operating costs 135,048,336,292.88 75,770,007,049.58
Interest expenses
Fee and commission
expenses
Surrenders
Claims and policyholder
benefits (net of mounts recoverable from
reinsurers)
Changes in insurance
contract reserves (net of reinsurers’ share)
Insurance policyholder
dividends
Expenses for reinsurance
accepted
Taxes and levies 193,812,057.14 250,775,738.81
Selling expenses 789,908,163.80 477,047,875.58
General expenses 3,741,908,783.50 2,463,953,208.63
R&D expenses 6,642,300,402.74 5,744,805,136.33
138
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Financial expenses 554,665,874.05 904,828,142.89
Including: Interest
656,411,767.86 394,589,818.16
expenses
Interest
361,773,700.27 144,116,091.77
income
Add: Other income 853,542,165.37 450,748,795.89
Investment income (Loss is
689,386,649.74 648,357,066.36
indicated by “-”)
Including: Income from
investments in associates and joint 29,737,321.95 24,799,841.42
ventures
Income from
derecognition of financial assets -171,521,013.80
measured at amortized cost
Foreign exchange gains (Loss
is indicated by “-”)
Net exposure hedging income
(Loss is indicated by “-”)
Income from changes in fair
-115,737,751.66 329,044,852.43
value (Loss is indicated by “-”)
Impairment losses of credit
-26,875,504.69 -8,590,000.67
(Loss is indicated by “-”)
Impairment losses of assets
-162,790,335.12 -139,288,911.05
(Loss is indicated by “-”)
Income from disposal of assets
-45,266,592.65 -2,309,694.02
(Loss is indicated by “-”)
III. Operating profit (Loss is indicated by
8,167,424,847.28 8,167,804,168.66
“-”)
Add: Non-operating income 21,096,536.60 21,932,288.24
Less: Non-operating expenses 45,672,434.05 53,956,792.78
IV. Total profit (Total losses are indicated
8,142,848,949.83 8,135,779,664.12
by “-”)
Less: Income tax expenses 322,238,643.64 644,764,928.70
V. Net profit (Net loss is indicated by “-”) 7,820,610,306.19 7,491,014,735.42
(I) Categorized by the nature of
continuing operation
1. Net profit from continuing
7,820,610,306.19 7,491,014,735.42
operations (Net loss is indicated by “-”)
139
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Net profit from discontinued
operations (Net loss is indicated by “-”)
(II) Categorized by ownership
1. Net profit attributable to
7,070,520,386.57 7,225,462,752.58
shareholders of the parent company
2. Net profit attributable to
750,089,919.62 265,551,982.84
non-controlling interests
VI. Other comprehensive income, net of
-23,685,660.51 -214,366,575.46
tax
Other comprehensive income
attributable to owners of the parent 8,916,331.77 -210,319,955.80
company, net of tax
(I) Other comprehensive income that
cannot be subsequently reclassified to 81,705,917.80 -44,824,020.81
profit or loss
1. Changes from re-measurement
of defined benefit plans
2. Other comprehensive income
that cannot be reclassified to profit or
loss under the equity method
3. Changes in fair value of other
81,705,917.80 -44,824,020.81
investments in equity instruments
4. Changes in fair value of
enterprises’ own credit risks
5. Others
(II) Other comprehensive income
-72,789,586.03 -165,495,934.99
that will be reclassified to profit or loss
1. Other comprehensive income
that will be reclassified to profit or loss
under the equity method
2. Changes in fair value of other
debt investments
3. Amounts of financial assets
reclassified into other comprehensive
income
4. Provision for credit impairment
of other debt investments
5. Reserve for cash flow hedges
6. Translation differences of -72,789,586.03 -165,495,934.99
140
Luxshare Precision Industry Co., Ltd. Annual Report 2021
financial statements denominated in
foreign currencies
7. Others
Other comprehensive income
attributable to minority interests, net of -32,601,992.28 -4,046,619.66
tax
VII. Total comprehensive income 7,796,924,645.68 7,276,648,159.96
Total comprehensive income
attributable to owners of the parent 7,079,436,718.34 7,015,142,796.78
company
Total comprehensive income
717,487,927.34 261,505,363.18
attributable to minority interests
VIII. Earnings per share:
(I) Basic earnings per share 1.01 1.03
(II) Diluted earnings per share 0.99 1.01
For any business combination involving enterprises under common control for the reporting period, the net profits of the absorbed
party prior to the combination are RMB in the reporting period, and were RMB in prior period.
Legal representative: WANG Laichun Chief financial officer: WU Tiansong Head of accounting department: CHEN Huiyong
4. Income statement of the parent company
In RMB
Item 2021 2020
I. Total operating income 9,280,144,923.02 11,565,103,529.27
Less: Operating costs 8,565,181,794.19 10,781,197,082.67
Taxes and levies 6,084,601.77 18,261,507.97
Selling expenses 24,117,122.95 35,063,571.34
General expenses 162,180,125.16 56,228,389.80
R&D expenses 320,362,046.32 378,120,159.26
Financial expenses 227,705,129.43 96,281,059.07
Including: Interest
264,763,187.06 75,305,134.45
expenses
Interest income 55,788,891.39 16,540,879.08
Add: Other income 278,899,119.07 79,872,863.79
Investment income (Loss is
2,268,732,708.25 3,409,929,279.99
indicated by “-”)
Including: Income from -4,411,361.63 452,498.12
141
Luxshare Precision Industry Co., Ltd. Annual Report 2021
investments in associates and joint
ventures
Income from
derecognition of financial assets
-41,003,477.92
measured at amortized cost (Loss is
indicated by “-”)
Net exposure hedging income
(Loss is indicated by “-”)
Income from changes in fair
2,187,784.65 35,468,629.87
value (Loss is indicated by “-”)
Impairment losses of credit
-1,373,983.35 -1,815,106.23
(Loss is indicated by “-”)
Impairment losses of assets
-3,339,894.30 146,637.49
(Loss is indicated by “-”)
Income from disposal of
15,567.99 93,414.42
assets (Loss is indicated by “-”)
II. Operating profit (Loss is indicated
2,519,635,405.51 3,723,647,478.49
by “-”)
Add: Non-operating income 299,873.15 36,922.70
Less: Non-operating expenses 528,129.00 2,523,203.41
III. Total profit (Total losses are
2,519,407,149.66 3,721,161,197.78
indicated by “-”)
Less: Income tax expenses -1,529,939.13 13,833,532.26
IV. Net profit (Net loss is indicated by
2,520,937,088.79 3,707,327,665.52
“-”)
(I) Net profit from continuing
2,520,937,088.79 3,707,327,665.52
operation (Net loss is indicated by “-”)
(II) Net profit from discontinued
operations (Net loss is indicated by “-”)
V. Other comprehensive income, net of
82,216,629.66 -44,873,885.23
tax
(I) Other comprehensive income
that cannot be subsequently reclassified 82,216,629.66 -44,873,885.23
to profit or loss
1. Changes from
re-measurement of defined benefit plans
2. Other comprehensive income
that cannot be reclassified to profit or
loss under the equity method
142
Luxshare Precision Industry Co., Ltd. Annual Report 2021
3. Changes in fair value of other
82,216,629.66 -44,873,885.23
investments in equity instruments
4. Changes in fair value of
enterprises’ own credit risks
5. Others
(II) Other comprehensive income
that will be reclassified to profit or loss
1. Other comprehensive income
that will be reclassified to profit or loss
under the equity method
2. Changes in fair value of other
debt investments
3. Amounts of financial assets
reclassified into other comprehensive
income
4. Provision for credit
impairment of other debt investments
5. Reserve for cash flow hedges
6. Translation differences of
financial statements denominated in
foreign currencies
7. Others
VI. Total comprehensive income 2,603,153,718.45 3,662,453,780.29
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated statement of cash flows
In RMB
Item 2021 2020
I. Cash flows from operating activities:
Cash receipts from the sales of
143,070,164,356.03 97,065,870,437.67
goods and the rendering of services
Net increase in customer deposits
and deposits from banks and other
financial institutions
Net increase in loans from the
143
Luxshare Precision Industry Co., Ltd. Annual Report 2021
central bank
Net increase in taking from other
financial institutions
Cash payments for claims and
policyholders’ benefits under direct
insurance contracts
Net cash receipts from reinsurance
business
Net cash receipts from
policyholders’ deposits and investment
contract liabilities
Cash receipts from interest, fees
and commissions
Net increase in taking from banks
and other financial institutions
Net increase in financial assets
sold under repurchase arrangements
Net cash received from securities
trading agency
Receipts of tax refunds 7,258,087,295.46 3,100,093,905.89
Other cash receipts relating to
2,646,521,521.99 1,178,580,038.87
operating activities
Sub-total of cash inflows from
152,974,773,173.48 101,344,544,382.43
operating activities
Cash payments for goods
125,194,510,007.35 78,908,490,079.24
purchased and services received
Net increase in loans and advances
to customers
Net increase in balance with the
central bank and due from banks and
other financial institutions
Cash payments for claims and
policyholders’ benefits under direct
insurance contracts
Net increase in placements with
banks and other financial institutions
Cash payments for interest, fees
and commissions
Cash payments for insurance
144
Luxshare Precision Industry Co., Ltd. Annual Report 2021
policyholder dividends
Cash payments to and on behalf of
16,468,591,642.75 11,976,189,826.48
employees
Payments of various types of taxes 1,635,898,950.98 1,462,211,616.65
Other cash payments relating to
2,391,005,655.40 2,124,441,374.01
operating activities
Sub-total of cash outflows from
145,690,006,256.48 94,471,332,896.38
operating activities
Net cash flow from operating activities 7,284,766,917.00 6,873,211,486.05
II. Cash flows from investing activities:
Cash receipts from disposals and
53,300,796,496.89 55,479,505,473.33
recovery of investments
Cash receipts from investment
777,579,552.30 487,104,548.83
income
Net cash receipts from disposals of
fixed assets, intangible assets and other 343,357,620.39 105,209,975.47
long-term assets
Net cash receipts from disposals of
16,418,213.71 62,681,623.24
subsidiaries and other business entities
Other cash receipts relating to
4,665,590,364.12
investing activities
Sub-total of cash inflows from investing
59,103,742,247.41 56,134,501,620.87
activities
Cash payments to acquire or
construct fixed assets, intangible assets 12,567,222,230.86 7,502,140,356.20
and other long-term assets
Cash payments to acquire
54,495,943,096.22 57,696,197,909.00
investments
Net increase in pledged loans
receivables
Net cash payments for acquisitions
of subsidiaries and other business 17,100,080.22 83,897,533.75
entities
Other cash payments relating to
403,138,825.89
investing activities
Sub-total of cash outflows from
67,483,404,233.19 65,282,235,798.95
investing activities
Net cash flow from investing activities -8,379,661,985.78 -9,147,734,178.08
145
Luxshare Precision Industry Co., Ltd. Annual Report 2021
III. Cash flows from financing
activities:
Cash receipts from capital
2,387,352,799.19 1,610,278,326.76
contributions
Including: Cash receipts from
capital contributions from minority 1,800,900,000.00 1,091,126,000.00
owners of subsidiaries
Cash receipts from borrowings 35,452,570,746.25 25,747,304,566.98
Other cash receipts relating to
4,705,930,595.98 4,485,600,000.00
financing activities
Sub-total of cash inflows from
42,545,854,141.42 31,843,182,893.74
financing activities
Cash repayments of borrowings 38,074,504,796.63 23,976,420,698.67
Cash payments for distribution of
dividends or profits or settlement of 1,399,755,112.12 1,065,757,282.54
interest expenses
Including: Payments for
distribution of dividends or profits to 12,150,000.00
minority owners of subsidiaries
Other cash payments relating to
3,461,522,325.75 14,511,270.50
financing activities
Sub-total of cash outflows from
42,935,782,234.50 25,056,689,251.71
financing activities
Net cash flow from financing activities -389,928,093.08 6,786,493,642.03
IV. Effect of foreign exchange rate
-58,444,561.40 -194,506,422.92
changes on cash and cash equivalents
V. Net increase in cash and cash
-1,543,267,723.26 4,317,464,527.08
equivalents
Add: Opening balance of cash and
10,464,804,451.34 6,147,339,924.26
cash equivalents
VI. Closing balance of cash and cash
8,921,536,728.08 10,464,804,451.34
equivalents
6. Statement of cash flows of the parent company
In RMB
Item 2021 2020
I. Cash flows from operating activities:
Cash receipts from the sales of 14,258,035,135.82 7,317,370,785.47
146
Luxshare Precision Industry Co., Ltd. Annual Report 2021
goods and the rendering of services
Receipts of tax refunds 295,360,510.43 138,658,293.85
Other cash receipts relating to
10,782,694,066.14 1,643,814,995.33
operating activities
Sub-total of cash inflows from
25,336,089,712.39 9,099,844,074.65
operating activities
Cash payments for goods
14,298,865,162.82 8,120,664,222.33
purchased and services received
Cash payments to and on behalf of
177,817,539.81 135,105,794.86
employees
Payments of various types of taxes 29,081,311.32 105,195,119.59
Other cash payments relating to
9,840,822,402.98 1,963,131,078.26
operating activities
Sub-total of cash outflows from
24,346,586,416.93 10,324,096,215.04
operating activities
Net cash flow from operating activities 989,503,295.46 -1,224,252,140.39
II. Cash flows from investing activities:
Cash receipts from disposals and
11,776,296,929.96 13,929,048,580.41
recovery of investments
Cash receipts from investment
2,106,637,671.03 3,416,407,362.80
income
Net cash receipts from disposals of
fixed assets, intangible assets and other 7,640,613.84 27,330,856.05
long-term assets
Net cash receipts from disposals of
63,942,000.00
subsidiaries and other business entities
Other cash receipts relating to
investing activities
Sub-total of cash inflows from investing
13,890,575,214.83 17,436,728,799.26
activities
Cash payments to acquire or
construct fixed assets, intangible assets 146,496,738.96 125,735,695.16
and other long-term assets
Cash payments to acquire
18,393,225,472.38 19,459,676,016.32
investments
Net cash payments for acquisitions
of subsidiaries and other business
entities
147
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Other cash payments relating to
investing activities
Sub-total of cash outflows from
18,539,722,211.34 19,585,411,711.48
investing activities
Net cash flow from investing activities -4,649,146,996.51 -2,148,682,912.22
III. Cash flows from financing
activities:
Cash receipts from capital
586,452,799.19 527,162,579.34
contributions
Cash receipts from borrowings 4,416,265,430.62 1,543,324,080.00
Other cash receipts relating to
4,471,016,039.08 4,485,600,000.00
financing activities
Sub-total of cash inflows from
9,473,734,268.89 6,556,086,659.34
financing activities
Cash repayments of borrowings 2,688,298,719.66 1,882,450,000.00
Cash payments for distribution of
dividends or profits or settlement of 958,024,940.64 662,016,221.81
interest expenses
Other cash payments relating to
3,384,213,580.92 11,364,675.69
financing activities
Sub-total of cash outflows from
7,030,537,241.22 2,555,830,897.50
financing activities
Net cash flow from financing activities 2,443,197,027.67 4,000,255,761.84
IV. Effect of foreign exchange rate
16,346,991.54 -7,911,773.68
changes on cash and cash equivalents
V. Net increase in cash and cash
-1,200,099,681.84 619,408,935.55
equivalents
Add: Opening balance of cash and
1,880,655,455.45 1,261,246,519.90
cash equivalents
VI. Closing balance of cash and cash
680,555,773.61 1,880,655,455.45
equivalents
7. Consolidated statement of changes in owners’ equity
Current period
In RMB
2021
Item
Equity attributable to owners of the parent company Minori Total
148
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Other equity Other ty owners
instruments Less: compr Unapp interes ’
Share Specia Surplu Genera ts equity
Prefe Perpe Capital Treasu ehensi ropriat Subtot
capita l s l risk Other
rred tual reserve ry ve ed al
l Other reserve reserve reserve
share bond shares incom profit
s s e
6,999
I. Closing 527,4 1,890, -44,71 733,06 17,996 28,101 2,804, 30,906
,768,
balance of the 0.00 0.00 49,22 099,56 0.00 7,803. 0.00 7,797. 0.00 ,149,2 ,816,2 783,62 ,599,8
186.0
preceding year 6.56 9.60 06 73 57.73 34.56 7.51 62.07
0
Add:
Changes in
0.00 0.00
accounting
policies
Correcti
ons of prior 0.00 0.00
period errors
Business
combination
involving
0.00 0.00
enterprises
under common
control
Others 0.00 0.00
6,999
II. Opening 527,4 1,890, -44,71 733,06 17,996 28,101 2,804, 30,906
,768,
balance of the 0.00 0.00 49,22 099,56 0.00 7,803. 0.00 7,797. 0.00 ,149,2 ,816,2 783,62 ,599,8
186.0
current year 6.56 9.60 06 73 57.73 34.56 7.51 62.07
0
III. Changes for
the year 50,71 829,59 252,09 6,044, 7,186, 7,689, 14,876
-91,2 8,916, 1,018,
(Decrease is 7,291 0.00 0.00 5,712. 0.00 3,708. 0.00 487,88 738,51 305,17 ,043,6
00.58 331.77 784.75
indicated by .00 07 88 6.27 4.16 3.34 87.50
“-”)
(I) Total 7,070, 7,079, 717,48 7,796,
8,916,
comprehensive 520,38 436,71 7,927. 924,64
331.77
income 6.57 8.34 34 5.68
(II) Owners’
50,71 829,59 880,22 6,971, 7,852,
contributions -91,2
7,291 0.00 0.00 5,712. 0.00 0.00 0.00 0.00 0.00 0.00 1,802. 817,24 039,04
and reduction in 00.58
.00 07 49 6.00 8.49
capital
1. Ordinary 50,70 535,74 586,45 1,800, 2,387,
149
Luxshare Precision Industry Co., Ltd. Annual Report 2021
shares 8,482 4,317. 2,799. 900,00 352,79
contributed by .00 19 19 0.00 9.19
owners
2. Capital
contribution
8,809 -91,2 507,25 424,86 424,86
from holders of
.00 00.58 3.01 1.43 1.43
other equity
instruments
3. Share-based
240,70 240,70 242,37
payment 1,671,
0,708. 0,708. 2,171.
recognized in 462.93
77 77 70
owners’ equity
52,643 52,643 5,169, 5,221,
4. Others ,433.1 ,433.1 245,78 889,21
0 0 3.07 6.17
252,09 -1,026, -773,9 -773,9
(III) Profit
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,708. 0.00 032,50 38,791 0.00 38,791
distribution
88 0.30 .42 .42
252,09 -252,0
1. Transfer to
3,708. 93,708 0.00 0.00
surplus reserve
88 .88
2. Transfer to
general risk 0.00 0.00
reserve
3. Distributions -773,8 -773,8 -773,8
to owners (or 91,489 91,489 91,489
shareholders) .58 .58 .58
-47,30 -47,30 -47,30
4. Others
1.84 1.84 1.84
(IV) Transfers
within owners’ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. Capitalization
of capital
0.00 0.00
reserve (or
share capital)
2. Capitalization
of surplus
0.00 0.00
reserve (or
share capital)
3. Loss offset by 0.00 0.00
150
Luxshare Precision Industry Co., Ltd. Annual Report 2021
surplus reserve
4. Retained
earnings carried
forward from
0.00 0.00
changes in
defined benefit
plans
5. Retained
earnings carried
forward from
0.00 0.00
other
comprehensive
income
6. Others 0.00 0.00
(V) Special 1,018, 1,018, 1,018,
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserve 784.75 784.75 784.75
1. Transfer to
special reserve 1,018, 1,018, 1,018,
in the current 784.75 784.75 784.75
period
2. Amount
utilized in the 0.00 0.00
current period
(VI) Others 0.00 0.00
7,050
IV. Closing 527,3 2,719, -35,80 985,16 24,040 35,288 10,494 45,782
,485, 1,018,
balance of the 0.00 0.00 58,02 695,28 0.00 1,471. 1,506. 0.00 ,637,1 ,554,7 ,088,8 ,643,5
477.0 784.75
current period 5.98 1.67 29 61 44.00 48.72 00.85 49.57
0
Prior period
In RMB
2020
Equity attributable to owners of the parent company
Other equity Other
Minorit
instruments Less: compr Unapp Total
Item Share Specia Surplu Genera y
Prefe Perp Capital Treasu ehensi ropriat Subtot owners’
capita l s l risk Other interest
reserve ry ve ed al equity
rred etual s
l Other reserve reserve reserve
share bond shares incom profit
s s e
I. Closing 5,349 2,654, 165,60 362,33 11,764 20,296 1,453,0 21,749,
balance of the ,001, 692,87 2,152. 5,031. ,987,1 ,618,9 84,326. 703,294
151
Luxshare Precision Industry Co., Ltd. Annual Report 2021
preceding year 738.0 4.21 74 18 72.39 68.52 20 .72
0
Add:
Changes in
0.00 0.00
accounting
policies
Correcti
ons of prior 0.00 0.00
period errors
Busines
s combination
involving
0.00 0.00
enterprises
under common
control
Others 0.00 0.00
5,349
II. Opening 2,654, 165,60 362,33 11,764 20,296 1,453,0 21,749,
,001,
balance of the 0.00 0.00 0.00 692,87 0.00 2,152. 0.00 5,031. 0.00 ,987,1 ,618,9 84,326. 703,294
738.0
current year 4.21 74 18 72.39 68.52 20 .72
0
III. Changes for
1,650
the year 527,4 -764,5 -210,3 370,73 6,231, 7,805, 1,351,6 9,156,8
,766,
(Decrease is 0.00 0.00 49,22 93,304 0.00 19,955 0.00 2,766. 0.00 162,08 197,26 99,301. 96,567.
448.0
indicated by 6.56 .61 .80 55 5.34 6.04 31 35
0
“-”)
(I) Total -187,7 7,225, 7,037, 7,303,2
265,551
comprehensive 49,263 462,75 713,48 65,472.
,982.84
income .28 2.58 9.30 14
(II) Owners’
39,22 527,4 846,94 1,413, 1,099,6 2,513,2
contributions
3,321 0.00 0.00 49,22 9,822. 0.00 0.00 0.00 0.00 0.00 0.00 622,36 47,318. 69,688.
and reduction
.00 6.56 39 9.95 47 42
in capital
1. Ordinary
39,22 487,93 527,16 1,091,1 1,618,2
shares
3,321 9,258. 2,579. 26,000. 88,579.
contributed by
.00 34 34 00 34
owners
2. Capital
contribution 527,4 527,44
527,449
from holders of 49,22 9,226.
,226.56
other equity 6.56 56
instruments
152
Luxshare Precision Industry Co., Ltd. Annual Report 2021
3. Share-based
347,40 347,40
payment 4,517,0 351,920
3,580. 3,580.
recognized in 74.25 ,654.98
73 73
owners’ equity
11,606 11,606
4,004,2 15,611,
4. Others ,983.3 ,983.3
44.22 227.54
2 2
370,73 -1,015, -644,7 -658,28
(III) Profit -13,500
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2,766. 0.00 517,11 84,351 4,351.6
distribution ,000.00
55 8.21 .66 6
370,73 -370,7
1. Transfer to
2,766. 32,766 0.00 0.00
surplus reserve
55 .55
2. Transfer to
general risk 0.00 0.00
reserve
3. Distributions -644,6 -644,6 -658,11
-13,500
to owners (or 15,942 15,942 5,942.0
,000.00
shareholders) .06 .06 6
-168,4 -168,4 -168,40
4. Others
09.60 09.60 9.60
1,611
(IV) Transfers -1,611, -22,57 21,216
,543, -1,354, -1,354,
within owners’ 0.00 0.00 0.00 543,12 0.00 0,692. 0.00 0.00 0.00 ,450.9 0.00
127.0 241.55 241.55
equity 7.00 52 7
0
1.
1,611
Capitalization -1,611,
,543,
of capital 543,12 0.00 0.00
127.0
reserve (or 7.00
0
share capital)
2.
Capitalization
of surplus 0.00 0.00
reserve (or
share capital)
3. Loss offset
by surplus 0.00 0.00
reserve
4. Retained
earnings carried 0.00 0.00
forward from
153
Luxshare Precision Industry Co., Ltd. Annual Report 2021
changes in
defined benefit
plans
5. Retained
earnings carried
-22,57 21,216
forward from -1,354, -1,354,
0,692. ,450.9
other 241.55 241.55
52 7
comprehensive
income
6. Others 0.00 0.00
(V) Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserve
1. Transfer to
special reserve
0.00 0.00
in the current
period
2. Amount
utilized in the 0.00 0.00
current period
(VI) Others 0.00 0.00
6,999
IV. Closing 527,4 1,890, -44,71 733,06 17,996 28,101 2,804,7 30,906,
,768,
balance of the 0.00 0.00 49,22 099,56 0.00 7,803. 0.00 7,797. 0.00 ,149,2 ,816,2 83,627. 599,862
186.0
current period 6.56 9.60 06 73 57.73 34.56 51 .07
0
8. Statement of changes in owners’ equity of the parent company
Current period
In RMB
2021
Other equity
Other
instruments Less: Unappr Total
Item Share Capital compreh Special Surplus
Preferr Perpet Treasury opriate Other owners’
capital reserve ensive reserve reserve
ed ual Other shares d profit equity
income
shares bonds
I. Closing 6,999,7 527,44 5,031,6
2,303,19 80,735,0 733,067, 15,675,91
balance of the 68,186. 0.00 0.00 9,226.5 0.00 0.00 99,596.
7,437.38 15.01 797.73 7,259.37
preceding year 00 6 69
Add:
0.00
Changes in
154
Luxshare Precision Industry Co., Ltd. Annual Report 2021
accounting
policies
Correctio
ns of prior 0.00
period errors
Others 0.00
II. Opening 6,999,7 527,44 5,031,6
2,303,19 80,735,0 733,067, 15,675,91
balance of the 68,186. 0.00 0.00 9,226.5 0.00 0.00 99,596.
7,437.38 15.01 797.73 7,259.37
current year 00 6 69
III. Changes for
1,494,9
the year 50,717, -91,20 776,952, 82,216,6 252,093, 2,656,840,
0.00 0.00 0.00 0.00 51,890.
(Decrease is 291.00 0.58 278.97 29.66 708.88 598.26
33
indicated by “-”)
(I) Total 2,520,9
82,216,6 2,603,153,
comprehensive 37,088.
29.66 718.45
income 79
(II) Owners’
contributions 50,717, -91,20 776,952, 827,578,3
0.00 0.00 0.00 0.00 0.00 0.00 0.00
and reduction in 291.00 0.58 278.97 69.39
capital
1. Ordinary
shares 50,708, 535,744, 586,452,7
contributed by 482.00 317.19 99.19
owners
2. Capital
contribution
8,809.0 -91,20 507,253. 424,861.4
from holders of
0 0.58 01 3
other equity
instruments
3. Share-based
payment 240,700, 240,700,7
recognized in 708.77 08.77
owners’ equity
4. Others 0.00
-1,025,
(III) Profit 252,093, -773,891,4
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 985,19
distribution 708.88 89.58
8.46
-252,09
1. Transfer to 252,093,
3,708.8 0.00
surplus reserve 708.88
8
155
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Distributions -773,89
-773,891,4
to owners (or 1,489.5
89.58
shareholders) 8
3. Others 0.00
(IV) Transfers
within owners’ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. Capitalization
of capital reserve 0.00
(or share capital)
2. Capitalization
of surplus
0.00
reserve (or share
capital)
3. Loss offset by
0.00
surplus reserve
4. Retained
earnings carried
forward from
0.00
changes in
defined benefit
plans
5. Retained
earnings carried
forward from
0.00
other
comprehensive
income
6. Others 0.00
(V) Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserve
1. Transfer to
special reserve in
0.00
the current
period
2. Amount
utilized in the 0.00
current period
(VI) Others 0.00
IV. Closing 7,050,4 0.00 0.00 527,35 3,080,14 0.00 162,951, 0.00 985,161, 6,526,6 18,332,75
156
Luxshare Precision Industry Co., Ltd. Annual Report 2021
balance of the 85,477. 8,025.9 9,716.35 644.67 506.61 51,487. 7,857.63
current period 00 8 02
Prior period
In RMB
2020
Other equity
Other
instruments Less: Unapprop Total
Item Share Capital compre Special Surplus
Preferr Perpet Treasur riated Other owners’
capital reserve hensive reserve reserve
ed ual Other y shares profit equity
income
shares bonds
I. Closing 5,349, 3,070,3
125,608 362,335 2,318,504 11,225,847,
balance of the 001,73 97,725.
,900.24 ,031.18 ,188.81 583.54
preceding year 8.00 31
Add:
Changes in
0.00
accounting
policies
Correcti
ons of prior 0.00
period errors
Others 0.00
II. Opening 5,349, 3,070,3
125,608 362,335 2,318,504 11,225,847,
balance of the 001,73 0.00 0.00 0.00 97,725. 0.00 0.00
,900.24 ,031.18 ,188.81 583.54
current year 8.00 31
III. Changes for
the year 1,650, 527,44 -767,20
-44,873, 370,732 2,713,195 4,450,069,6
(Decrease is 766,44 0.00 0.00 9,226. 0,287.9 0.00 0.00
885.23 ,766.55 ,407.88 75.83
indicated by 8.00 56 3
“-”)
(I) Total
-22,303, 3,707,327 3,685,024,4
comprehensive
192.71 ,665.52 72.81
income
(II) Owners’
39,223 527,44
contributions 844,342 1,411,015,3
,321.0 0.00 0.00 9,226. 0.00 0.00 0.00 0.00 0.00
and reduction in ,839.07 86.63
0 56
capital
1. Ordinary
39,223
shares 487,939 527,162,57
,321.0
contributed by ,258.34 9.34
0
owners
157
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Capital
contribution 527,44
527,449,22
from holders of 9,226.
6.56
other equity 56
instruments
3. Share-based
payment 347,403 347,403,58
recognized in ,580.73 0.73
owners’ equity
9,000,0 9,000,000.0
4. Others
00.00 0
(III) Profit 370,732 -1,015,34 -644,615,94
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
distribution ,766.55 8,708.61 2.06
1. Transfer to 370,732 -370,732,
0.00
surplus reserve ,766.55 766.55
2. Distributions
-644,615, -644,615,94
to owners (or
942.06 2.06
shareholders)
3. Others 0.00
(IV) Transfers 1,611,5 -1,611,5
-22,570, 21,216,45 -1,354,241.
within owners’ 43,127 0.00 0.00 0.00 43,127. 0.00 0.00 0.00
692.52 0.97 55
equity .00 00
1.
Capitalization 1,611,5 -1,611,5
of capital 43,127 43,127. 0.00
reserve (or .00 00
share capital)
2.
Capitalization
of surplus 0.00
reserve (or
share capital)
3. Loss offset
by surplus 0.00
reserve
4. Retained
earnings carried
forward from
0.00
changes in
defined benefit
plans
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
5. Retained
earnings carried
forward from -22,570, 21,216,45 -1,354,241.
other 692.52 0.97 55
comprehensive
income
6. Others 0.00
(V) Special
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reserve
1. Transfer to
special reserve
0.00
in the current
period
2. Amount
utilized in the 0.00
current period
(VI) Others 0.00
IV. Closing 6,999, 527,44 2,303,1
80,735, 733,067 5,031,699 15,675,917,
balance of the 768,18 0.00 0.00 9,226. 97,437. 0.00 0.00
015.01 ,797.73 ,596.69 259.37
current period 6.00 56 38
III. Basic information
1. Company profile
Luxshare Precision Industry Co., Ltd. (“Company” or “the Company”) is a company limited by shares
established by Shenzhen Zixin Investment Co., Ltd. (“Zixin Investment”) and Luxshare Limited as
founders after being approved by Shenzhen People’s Government and Shenzhen Bureau of Trade and
Industry in February 2009. Company’s Uniform Social Credit Code: 91440300760482233Q. The
Company was listed on Shenzhen Stock Exchange in September 2010. The Company pertains to the
communication equipment industry.
As of December 31, 2021, the Company issued 7,050,485,477.00 shares in total, with its registered
capital amounting to RMB7,050,485,477.00. The Company’s registered office is located at 2/F, Block A,
Sanyo New Industrial Zone, West Haoyi Community, Shajing Street, Bao’an District, Shenzhen, China,
while its place of business is located at No.313 North Ring Road, Qingxi Town, Dongguan City,
Guangdong, China. The main business activities of the Company include production and operation of
connecting wires, connectors, computer peripherals, and plastic hardware products. The Company’s
parent company is Luxshare Limited, and its de facto controllers are WANG Laichun and WANG
Laisheng.
The financial statements were approved by the Company’s board of directors on April 27, 2022 for
issuance.
The relevant information of subsidiaries of the Company is seen in the Note “VII. Interests in other
entities”.
159
Luxshare Precision Industry Co., Ltd. Annual Report 2021
The changes in scope of consolidation for this reporting period is seen in the Note “VI. Changes in scope
of consolidation”.
IV. Basis of preparation of financial statements
1. Basis of preparation
The Company has prepared its financial statements in accordance with the requirements of the
Accounting Standards for Business Enterprises - Basic Standard promulgated by the Ministry of Finance
of the PRC, specific accounting standards, guidelines for application of accounting standards for
enterprises, interpretation of accounting standards for enterprises and other relevant regulations
successively promulgated (collectively, “Accounting Standards for Business Enterprises”) and the
Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 -
General Provisions on Financial Reports issued by China Securities Regulatory Commission.
2. Going concern
The Company prepares its financial statements on a going concern basis. The Company has the ability to
continue as a going concern within 12 months from the end of the reporting period, and detected no major
events that may affect such ability.
V. Important accounting policies and accounting estimates
Reminders on specific accounting policies and accounting estimates:
N/A
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting
Standards for Business Enterprises issued by the Ministry of Finance, and truly and completely reflect the
consolidated and parent company’s financial positions as of December 31, 2020, and the consolidated and
parent company’s operating results and cash flows for the year then ended.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company’s operating cycle is 12 months.
4. Functional currency
The Company uses RMB as its functional currency. The subsidiaries of the Company determine its
functional currency based on the primary economic environment in which such subsidiaries operate.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
These financial statements are presented in RMB.
5. Accounting treatment of business combinations involving enterprises under common control and
business combinations not involving enterprises under common control
Business combination involving enterprises under common control: The assets and liabilities acquired by
the absorbing party in a business combination (including goodwill formed through the acquisition by the
ultimate controller of the absorbed party) are measured according to the carrying amount of the assets and
liabilities of the absorbed party in the financial statements of ultimate controller on the combination date.
The difference between the carrying amount of the net assets obtained in a business combination and the
carrying amount of the consideration paid for the combination (or the aggregate face value of shares
issued as consideration) is adjusted to the equity premium in the capital reserve. If the equity premium in
the capital reserve is not sufficient to absorb the difference, any excess shall be adjusted against retained
earnings.
Business combination not involving enterprises under common control: 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. Where the cost of a
business combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets, the difference is recognized as goodwill; where the cost of a business combination is lower than
the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is
recognized in profit or loss for the current period. The acquiree’s identifiable assets, liabilities and
contingent liabilities that are acquired in the combination meeting the recognition criteria are measured at
the fair value on the date of acquisition.
The costs incurred directly attributable to the business combination are recognized in profit or loss for the
current period when incurred; the transaction costs for issue of equity securities or debt securities are
recognized in the amount initially recognized of equity securities or debt securities.
6. Method of preparation of consolidated financial statements
1. Scope of consolidation
The scope of consolidated financial statements is determined on the basis of control, and includes those of
the Company and all of its subsidiaries. “Control” means the power of the Company over the investee,
through which the Company will enjoy variable returns by participating in the relevant activities and has
the ability to use the power over the investee to affect the Company’s return amount.
2. Consolidation procedures
The Company regards the entire enterprise group as an accounting entity and prepares the consolidated
financial statements according to the uniformed accounting policies, reflecting the overall financial
positions, operating results and cash flows of this enterprise group. The effects of other intragroup
transactions (between the Company and its subsidiaries or between subsidiaries) are eliminated. Where
the intragroup transactions show that relevant assets have suffered impairment losses, those losses are
recognized fully. Where the accounting policies and periods adopted by all subsidiaries are not in line
with those of the Company, the necessary adjustments are made to the financial statements of these
subsidiaries based on the accounting policies and periods of the Company when preparing the
161
Luxshare Precision Industry Co., Ltd. Annual Report 2021
consolidated financial statements.
That portion of owner’s equities, net profits or losses and comprehensive income of subsidiaries for the
period attributable to minority interests are separately presented in the consolidated balance sheet below
the “owners’ equity” line item, in the consolidated income statement below the “net profit” and “total
comprehensive income” as “minority interests”. When the amount of loss for the current period
attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ share of the
opening balance of owners’ equity of the subsidiary, the excess is allocated against minority interests.
(1) Increase in subsidiaries or businesses
Where a subsidiary or business is acquired during the reporting period through a business combination
involving enterprises under common control, operating results and cash flows of this subsidiary or
business from the beginning of the period in which the combination takes place to the end of the reporting
period are included in the consolidated financial statements. Meanwhile, the adjustments are made to the
opening balances of the consolidated financial statements and the relevant items of the comparative
statement, and the combined reporting entity is deemed to have existed since the time when the ultimate
controller begins to exercise control.
Where the Company becomes capable to exercise control over an investee under the common control due
to additional investment or other reasons, for equity investments held before acquiring control of the
absorbed party, the relevant gains or losses, other comprehensive income and other changes in net assets
recognized during the period from the later of the date of acquisition of original equity or the date when
the absorbing party and the absorbed party are under the common control until the combination date are
respectively offset against opening balances of retained earnings during the comparative reporting period
or profit or loss for the current period.
Where a subsidiary or business is acquired during the reporting period through a business combination
not involving enterprises under common control, it is included in the consolidated financial statements
from the date of acquisition based on the fair value of identifiable assets, liabilities and contingent
liabilities determined on the date of acquisition.
Where the Company becomes capable to exercise control over an investee not under common control due
to additional investment or other reasons, for the acquiree’s equity held prior to the date of acquisition,
the Company remeasures the fair value of the equity on the date of acquisition, and the difference
between the fair value of the equity and its carrying amount is recognized in profit or loss for the current
period. Where the acquiree’s equity held prior to the date of acquisition involves other comprehensive
income that can be reclassified to profit or loss and changes in other owners’ equity under equity method,
such other comprehensive income and changes are transferred to the income of the period in which the
date of acquisition falls.
(2) Disposal of subsidiaries
① General disposal
When the Company loses control over the investee due to disposal of partial equity investments or other
reasons, for the remaining equity investments after disposal, the Company remeasures the remaining
equity investments after disposal at the fair value on the date when the Company loses its control. The
difference between the sum of the consideration from disposal of equity and the fair value of remaining
equity less the sum of an original subsidiary’s share of net assets and goodwill continuously calculated
from the date of acquisition or combination according to original shareholding ratio is recognized as the
investment return for the period in which the control is lost. Other comprehensive income relating to the
original subsidiary’s equity investments that will be reclassified to profit or loss and changes in other
162
Luxshare Precision Industry Co., Ltd. Annual Report 2021
owners’ equity under the equity method is transferred into the investment income for the period when the
control is lost.
② Disposal of subsidiaries by steps
Where the subsidiary’s equity investments are disposed by steps through multiple transactions until the
control is lost, and the terms and conditions of all transactions on disposal of the subsidiary’s equity
investments and the economic impact thereof fall within one or more of the following circumstances, then
it usually indicates that multiple transaction events belong a single package:
i. these transactions are concluded simultaneously or after the influence on each other is considered;
ii. these transactions as a whole can achieve a complete commercial result;
iii. the occurrence of one transaction depends on that of at least one other transaction;
iv. a transaction is not economical alone, but economical when considered together with other
transactions.
Where all transactions belong to a single package, the Company accounts for such transactions as one
transaction to dispose of and lose its control over the subsidiary; however, the difference between the
proceeds from each disposal before loss of control and the share owned by the Company in the net assets
of the subsidiary in relation to the investment disposed of is recognized in other comprehensive income in
the consolidated financial statements, which is wholly transferred to the profit or loss in the period in
which the control is lost.
Where all transactions do not belong to a single package, prior to the loss of control, the Company
accounts for such transactions as partial disposal of a subsidiary’s equity investments in the event that the
control is not lost; and when the control is lost, the Company accounts for such transactions in accordance
with the general methods of disposal of subsidiaries.
(3) Acquisition of a subsidiary’s minority equity
The difference between the long-term equity investments newly obtained by the Company due to
acquisition of minority equity and its share of the subsidiary’s net assets continuously calculated from the
date of acquisition or combination according to new shareholding ratio is adjusted against the equity
premium in the capital reserve in the consolidated balance sheet. If the equity premium in the capital
reserve is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
(4) Partial disposal of the subsidiary’s equity investments in the event that the control is not lost
The difference between the proceeds from disposal and the share owned by the Company in the net assets
of the subsidiary in relation to the long-term equity investment disposed of that is calculated continuously
from the date of acquisition or combination is adjusted against the equity premium in the capital reserve
in the consolidated balance sheet. In case the equity premium in the capital reserve is not sufficient to
absorb the difference, the remaining balance is adjusted against the retained earnings.
7. Classification of joint arrangements and accounting treatment of joint operations
Joint arrangements are classified into joint operations and joint ventures.
Where a party to a joint arrangement enjoys relevant assets and assumes relevant liabilities of such an
arrangement, this case belongs to a joint operation.
The Company recognizes the following items relating to its interest in the joint operation:
(1) the assets held individually by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities
incurred jointly;
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
(3) the Company’s revenue from the sales of its share of output of the joint operation;
(4) the Company’s share of revenue from the sales of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expenses
incurred jointly by the joint operation.
The Company accounts for investments in joint ventures using the equity method and the details are seen
in Note “III. (XIV) Long-term equity investments”.
8. Recognition of cash and cash equivalents
Cash comprises cash on hand and deposits of the Company that can be readily withdrawn on demand.
Cash equivalents comprise short-term, highly liquid investments held by the Company that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
9. Foreign currency transactions and translation of foreign currency financial statements
1. Foreign currency transactions
The foreign currency transactions are recorded by translating the amount of a foreign currency into RMB
at the spot exchange rate prevailing on the 1st of each month.
The balances of foreign currency monetary items are translated using the spot exchange rate at the
balance sheet date. Exchange differences arising therefrom are recognized in profit or loss for the current
period, except for exchange differences generated by specific-purpose borrowings in a foreign currency
related to acquisition of qualifying assets, which should be accounted for according to the capitalization
principles of borrowing costs.
2. Translation of financial statements denominated in foreign currencies
The asset and liability items in the balance sheet are translated at the spot exchange rates at the balance
sheet date. Items of owners’ equity except for “unappropriated profit” are translated at the spot exchange
rates at the dates on which such items arose. Income and expenses in the income statement are translated
at the exchange rates similar to the spot exchange rates at the dates of the transactions.
When the Company disposes of a foreign operation, it transfers the translation differences relating to
translation of the financial statements of that foreign operation from the owners’ equity to profit or loss
for the current period.
10. Financial instruments
When the Company becomes a party to a financial instrument contract, a financial asset, liability or
equity instrument is recognized.
1. Classification of financial instruments
Based on the Company’s business model for managing financial assets and the cash flow characteristics
of financial assets, the financial assets are classified into on initial recognition: financial assets measured
at its amortized cost, financial assets at fair value through other comprehensive income, and financial
assets at fair value through profit or loss.
The Company classifies financial assets that meet the following criteria at the same time and are not
designated as at fair value through profit or loss as the financial assets measured at amortized cost:
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
－ the business model aims to collect contractual cash flows; and
－ the contractual cash flows are generated only from payment of principal and interest on the
outstanding principal.
The Company classifies financial assets that meet the following criteria at the same time and are not
designated as at fair value through profit or loss as the financial assets (debt instruments) at fair value
through other comprehensive income:
－ the business model aims to collect contractual cash flows and sell such financial assets; and
－ the contractual cash flows are generated only from payment of principal and interest on the
outstanding principal.
The Company irrevocably designates the non-trading equity instruments as financial assets (equity
instruments) at fair value through other comprehensive income on initial recognition. Such designation is
made on the basis of a single investment, and the relevant investments meet the definition of an equity
instrument from the issuer’s perspective.
Except for the financial assets measured at amortized cost and the financial assets at fair value through
other comprehensive income, the Company classifies all of other remaining financial assets as the
financial assets at fair value through profit or loss. If the accounting mismatch can be eliminated or
significantly reduced on initial recognition, the Company may irrevocably designate the financial assets
that should have been classified as those measured at amortized cost or those at fair value through other
comprehensive income as the financial assets at fair value through profit or loss.
On initial recognition, financial liabilities are classified into the following two categories: financial
liabilities at fair value through profit or loss and financial liabilities measured at amortized cost.
A financial liability may be designated as at fair value through profit or loss on initial measurement if one
of the following conditions is met:
1 ) the designation eliminates or significantly reduces accounting mismatch.
2 ) a group of financial liabilities or a group of financial assets and financial liabilities is managed and its
performance is evaluated on a fair value basis, and information about the group is reported on that basis to
the enterprise’s key management personnel according to such risk management or investment strategy set
out in official written documents.
3 ) this financial liability contains embedded derivatives that need to be split separately.
2. Recognition and measurement of financial instruments
(1) Financial assets measured at amortized cost
The financial assets measured at amortized cost, including notes receivable, accounts receivable, other
receivables, long-term receivables and debt investments, are initially measured at fair value, and the
relevant transaction costs are charged to the initially recognized amount; the accounts receivable that do
not contain any significant financing component or are recognized by the Company without taking into
consideration the significant financing components under the contracts with a term of less than one year
are initially measured at the contractual trading price.
The interest calculated using the effective interest method during the holding period is recognized in the
profit or loss for the current period.
On recovery or disposal of a financial asset, the difference between the proceeds and the carrying amount
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
of the financial asset is recognized in profit or loss for the current period.
(2) Financial assets (debt instruments) at fair value through other comprehensive income
Financial assets (debt instruments) at fair value through other comprehensive income, including
receivable financing and other debt investments, are initially measured at fair value, and the relevant
transaction costs are recognized in initially recognized amount. These financial assets are subsequently
measured at fair value, changes in fair value other than the interest calculated using the effective interest
method, impairment loss or gain and profit or loss on exchange are recognized in other comprehensive
income.
On derecognition, the cumulative gain or loss previously included in other comprehensive income is
removed out from other comprehensive income and recognized in profit or loss for the current period.
(3) Financial assets (equity instruments) at fair value through other comprehensive income
Financial assets (equity instruments) at fair value through other comprehensive income, including other
equity investments, are initially measured at fair value, and the relevant transaction costs are recognized
in initially recognized amount. These financial assets are subsequently measured at fair value, and
changes in fair value are recognized in other comprehensive income. The dividends received are
recognized in profit or loss for the current period.
On derecognition, the cumulative gain or loss previously included in other comprehensive income is
removed out from other comprehensive income and included in retained earnings.
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss, including held-for-trading financial assets, derivative
financial assets and other non-current financial assets, are initially measured at fair value, and the relevant
transaction costs are included in profit or loss for the current period. These financial assets are
subsequently measured at fair value, and changes in fair value are included in profit or loss for the current
period.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss, including held-for-trading financial liabilities and
derivative financial liabilities, are initially measured at fair value, and the relevant transaction costs are
recognized in profit or loss for the current period. These financial liabilities are subsequently measured at
fair value, and changes in fair value are recognized in profit or loss for the current period.
On derecognition, the difference between their carrying amount and the consideration paid is included in
profit or loss for the current period.
(6) Financial liabilities measured at the amortized cost
The financial liabilities measured at the amortized cost, including short-term borrowings, notes payable,
accounts payable, other payables, long-term borrowings, bonds payable, long-term payables, are initially
measured at fair value, and the relevant transaction costs are charged to the initially recognized amount.
The interest calculated using the effective interest method during the holding period is recognized in the
profit or loss for the current period.
On derecognition, the difference between the consideration paid and the carrying amount of these
financial liabilities is recognized in profit or loss for the current period.
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3. Derecognition and transfer of financial assets
The Company derecognizes a financial asset when one of the following conditions is met:
－ the contractual right to receive cash flows from the financial assets has expired;
－ the financial asset has been transferred and all the risks and rewards of ownership of the financial
asset are substantially transferred to the transferee;
－ the financial asset has been transferred, and the Company neither transferred nor retained a substantial
portion of all risks and rewards incidental to the ownership of the financial asset, but did not retain
control over the financial asset.
When a financial asset is transferred, if the Company retains substantially all the risks and rewards of
ownership of a financial asset, it does not derecognize the financial asset.
When the Company determines whether a transfer of a financial asset satisfies the derecognizing criteria
prescribed above, it gives weight to the substance rather than form.
The Company divides a transfer of a financial asset into a transfer of the financial asset in its entirety or a
transfer of part of the financial asset. For a transfer of a financial asset in its entirety that satisfies the
derecognizing criteria, the difference between the following two amounts is recognized in profit or loss
for the current period:
(1) the carrying amount of the financial asset transferred; and
(2) the sum of the consideration received from the transfer and (if the financial asset transferred is a
financial asset (debt instrument) measured at fair value through other comprehensive income) any
cumulative changes in fair value that was originally recognized in owners’ equity.
If part of the transferred financial asset qualifies for derecognizing, the carrying amount of the transferred
financial asset in its entirety is allocated between the part that continues to be recognized and the part that
is derecognized, based on the relative fair values of those parts. The difference between the following two
amounts is recognized in profit or loss for the current period:
(1) the carrying amount allocated to the part derecognized; and
(2) the sum of the consideration received for the part derecognized and (if the financial asset transferred is
a financial asset (debt instrument) measured at fair value through other comprehensive income) the
amount of the part derecognized corresponding to the cumulative changes in fair value that was originally
recognized in owners’ equity.
A financial asset that does not qualify for derecognition continues to be recognized, and the consideration
received is recognized as a financial liability.
4. Derecognition of financial liabilities
If the present obligations of a financial liability are discharged in part or whole, the financial liability or
any part thereof is derecognized; an agreement between the Company and the creditor to replace the
existing financial liability with a new financial liability with substantially different terms is accounted for
as an extinguishment of the existing financial liability and the recognition of a new financial liability.
A substantial modification to the terms of an existing financial liability or any part thereof is accounted
for as an extinguishment of the existing financial liability or any part thereof, and the financial liability
with modified terms is recognized as a new financial liability at the same time.
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When the Company derecognizes a financial liability or any part thereof, it recognizes the difference
between the carrying amount of the financial liability derecognized and the consideration paid (including
any non-cash assets transferred or new financial liabilities assumed) in profit or loss for the current
period.
If the Company repurchases part of a financial liability, it allocates the carrying amount of the financial
liability in its entirety between the part that continues to be recognized and the part that is derecognized
based on the relative fair values of those parts on the date of the repurchase. The difference between the
carrying amount of the financial liability derecognized and the consideration paid (including any
non-cash assets transferred or new financial liabilities assumed) is recognized in profit or loss for the
current period.
5. Method of determination of the fair value of financial assets and financial liabilities
If there is an active market for a financial instrument, the quoted price in the active market is used to
establish the fair value of the financial instrument. If there is no active market for a financial instrument, a
valuation technique is used to establish the fair value of the financial instrument. On valuation, the
Company adopts the valuation technique which applies to the current circumstances and is supported by
sufficient data available and other information, selects the input value consistent with the characteristics
of the asset or liability considered by the market participants in the transaction of the relevant asset or
liability, and prioritizes using the relevant observable input value. The unobservable input value can be
used only when the relevant observable input value cannot be obtained or it’s impracticable to obtain the
relevant observable input value.
6. Test and accounting treatment of impairment of financial assets
The Company estimates the expected credit losses of financial assets measured at amortized cost,
financial assets (debt instruments) at fair value through other comprehensive income and financial
guarantee contracts on a single or joint basis.
The Company comprehensively considers reasonable and well-founded information about past events,
current conditions, and predictions of future economic conditions as well as the possibility of default to
calculate the probability-weighted amount of the present value of the difference between cash flows
receivable from contracts and cash flows expected to be recovered and include it in the expected credit
loss.
The Company recognizes a loss allowance equal to the lifetime expected credit losses if the credit risk has
increased significantly since initial recognition, or to the expected credit losses within the next 12 months
if the credit risk has not increased significantly since initial recognition. The added or reversed loss
reserves arising therefrom are recognized in profit or loss for the current period as impairment losses or
gains.
The Company compares the possibility of default at the balance sheet date with the possibility of default
upon initial recognition, to determine the relative change in the default risks of financial instrument
during the expected lifetime, and assess whether the credit risk of the financial instruments has increased
significantly since initial recognition. If a financial instrument is past due for more than 30 days, the
Company usually believes that credit risk of the financial instrument has increased significantly, unless
there is clear evidence that credit risk of the financial instrument has not increased significantly since
initial recognition.
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If a financial instrument has low credit risk on the balance sheet date, the Company believes that credit
risk of the financial instrument has not increased significantly since initial recognition.
If there is objective evidence indicating that a financial asset has been impaired for its credit, the
Company makes a provision for impairment of the financial asset on an individual basis.
With respect to accounts receivable and contract assets that arise from the transactions regulated under
the Accounting Standards for Business Enterprises No.14 - Revenue (2017), whether to include
significant financing components, the Company always measures its loss reserves based on an amount
equal to the expected credit loss during the entire life of accounts receivable and contract assets.
For lease receivables, the Company always measures its loss reserves based on an amount equal to the
expected credit loss during the entire life of these receivables.
If the Company no longer reasonably expects that the contractual cash flows of a financial asset can be
recovered in whole or in part, it directly reduces the carrying amount of such financial asset.
11. Notes receivable
Please refer to Note V, 10 “Financial instruments” for details of the Group’s accounting treatment of
notes receivable and the method to determine the expected credit loss thereof.
12. Accounts receivable
Please refer to Note V, 10 “Financial instruments” for details of the Group’s accounting treatment of
accounts receivable and the method to determine the expected credit loss thereof.
13. Receivable financing
Please refer to Note V, 10 “Financial instruments” for details of the Group’s accounting treatment of
receivable financing and the method to determine the expected credit loss thereof.
14. Other receivables
Determination and accounting treatment of expected credit losses of other receivables
Please refer to Note V, 10 “Financial instruments” for details of the Group’s accounting treatment of
other receivables and the method to determine the expected credit loss thereof.
15. Inventories
1. Classification and cost of inventories
Inventories are classified into: materials in transit, raw materials, revolving materials, goods on hand,
products in process, goods sold, work in process - outsourced, etc.
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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2. Pricing methods of inventories transferred out
The Company delivers inventories at the price calculated using the weighted-average system monthly in
arrears.
3. Determination basis of net realizable value of different types of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the
cost of inventories is higher than the net realizable value, a provision for decline in value of inventories is
made. Net realizable value is the estimated selling price in the ordinary course of business less costs
expected to be incurred until completion and the estimated costs necessary to make the sale and relevant
taxes.
For finished products, goods on hand, materials available for sales and other merchandise inventories
available for sales, in the ordinary production and operation process, their net realizable value is
determined at the estimated selling price of these inventories less the estimated costs necessary to make
the sale and relevant taxes; for the inventories that need to be processed, in the ordinary production and
operation process, their net realizable value is determined at the estimated selling price of finished
products less the costs to be incurred until completion and the estimated costs necessary to make the sale
and relevant taxes. The net realizable value of the inventories held to satisfy sales or service contracts is
based on the contract price. If the quantity of inventories held is more than the quantity ordered in the
sales contracts, the net realizable value of the excess portion of inventories is based on general selling
prices.
After the provision for decline in value of inventories is made, if the circumstances that previously caused
inventories to be written down below cost no longer exist so that the net realizable value is higher than
the carrying amount of inventories, the reversal is made to the extent of the amount originally provided
for the decline in value of inventories. The amount of the reversal is recognized in profit or loss for the
current period.
4. Inventory systems for inventories
A perpetual inventory system is adopted.
5. Amortization of low-value consumables and packing materials
The Company’s revolving materials include low-value consumables and packing materials. The revolving
materials with significant amounts are amortized monthly in accordance with the estimated useful life
upon applying for use; and the other low-value consumables and packing materials are amortized using
immediate write-off method upon applying for use.
16. Contract assets
1. Recognition methods and standards of contract assets
The Company presents the contract assets or liabilities in the balance sheet based on the relationship
between performance obligations and customer payments. The Company presents the right to receive the
consideration for the goods or services that have been transferred or offered to customers (that is,
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depending on factors other than the passage of time) as the contract assets. The Company lists the
contract assets and liabilities under the same contract as net amount. The Company separately presents its
owned right to unconditionally (that is, only depending on the passage of time) receive consideration
from customers as the accounts receivable.
2. Determination and accounting treatment of expected credit losses of contract assets
Determination and accounting treatment of expected credit losses of contract assets are seen in the Note
“(X) VI. Test and accounting treatment of impairment of financial assets”.
17. Contract costs
Contract costs include contract performance cost and contract acquisition costs.
The cost incurred by the Company to perform a contract is not be governed by the standards on
inventories, fixed assets or intangible assets, and if meeting the following criteria, is recognized as an
asset as the contract performance cost:
such cost is directly related to an existing or expected contract.
such cost increases the Company’s future resources for fulfilling its performance obligations.
such cost is expected to be recovered.
If the incremental cost incurred by the Company to obtain a contract is expected to be recovered, it is
recognized as an asset as the cost for contract acquisition.
The Company amortizes the asset related to the contract cost on the same basis as the recognition of the
revenue of the goods or services related to the asset; provided that if the cost for contract acquisition is
amortized for not more than one year, the Company includes it into the profit or loss for the current
period in which it is incurred.
If the carrying amount of the asset related to the contract cost is higher than the difference between the
following two amounts, then the Company makes a provision for impairment of the excess and
recognizes it as an impairment loss for the asset:
1. the remaining consideration expected to be obtained due to the transfer of the goods or services related to
the asset; and
2. the cost to be incurred due to the transfer of the relevant goods or services.
If the impairment factors for prior periods have changed afterwards so that the above difference is higher
than the carrying amount of the asset, then the Company reverses a provision for impairment originally
made and includes it in the profit or loss for the current period, provided that the carrying amount after
reverse should not exceed the carrying amount the asset would have reached on the date of reverse had
the provision for impairment been not made.
18. Held-for-sale assets
The assets of which carrying amount is recovered mainly through sales (including through exchange of
non-monetary assets with commercial substance) rather than continuous use of non-current assets or
disposal groups are classified as the held-for-sale assets.
The Company classifies the non-current assets or disposal groups which meet all the following conditions
as the held-for-sale assets:
(1) they can be sold immediately under current conditions according to the practice of sales of such assets
or disposal groups in similar transactions; and
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(2) the sale is very likely to happen, that is, the Company has made a resolution on a sale plan and
obtained a confirmed purchase commitment, and such sale is expected to be completed within one year.
The sale has been approved by the relevant authority or regulatory department of the Company if it is
required to be so approved by the relevant provisions. For the non-current assets (excluding financial
assets, deferred tax assets, and assets formed by the employee benefits) or disposal groups classified as
the held-for-sale assets, if their carrying amount is higher than the fair value net of sale expenses, then the
carrying amount is reduced to the fair value net of sale expenses. That reduction in amount is recognized
as an impairment loss of the assets and charged to profit or loss for the current period. A provision for
impairment of the held-for-sale assets is recognized accordingly.
19. Debt investments
Please refer to Note V, 10 “Financial instruments” for details of the Group’s accounting treatment of debt
investments and the method to determine the expected credit loss thereof.
20. Other debt investments
None
21. Long-term receivables
None
22. Long-term equity investments
1. Judgment criteria of joint control and significant influence
Joint control is the agreed sharing of control over an arrangement, and the relevant activities of such
arrangement must be decided upon the unanimous consent of the parties sharing control. If the Company
can exercise joint control over the investee along with other parties to joint ventures and enjoy rights over
net assets of the investee, the investee is a joint venture of the Company.
Significant influence is the power to participate in the financial and operating policy decisions of an
investee, but is not control or joint control with other parties over the establishment of those policies. If
the Company can have significant influence over the investee, the investee is an associate of the
Company.
2. Determination of initial investment cost
(1) Long-term equity investments formed by business combination
In case of a long-term equity investment of a subsidiary acquired through a business combination
involving entities under common control, the initial investment cost of the long-term equity investment is
the Company’s share of the carrying amount of the owners’ equity of the absorbed party in the
consolidated financial statements of the ultimate controller at the date of combination. The difference
between the initial investment cost of the long-term equity investment and the carrying amount of the
consideration paid for the combination is treated as an adjustment to the equity premium in the capital
reserve. In case the equity premium in the capital reserve is not sufficient to absorb the difference, the
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remaining balance is adjusted against the retained earnings. Where the Company becomes capable to
exercise control over an investee under the common control due to additional investment or other reasons,
the difference between the initial investment cost of the long-term equity investment recognized in the
light of above principles and the sum of the carrying amount of the long-term equity investment prior to
combination plus the carrying amount of new consideration paid for further acquisition of shares on
combination date is adjusted to the equity premium. If the equity premium is not sufficient to absorb the
difference, any excess is adjusted against retained earnings.
In case of a long equity investment acquired through a business combination not involving enterprises
under common control, the Company regards the cost of combination determined on the date of
acquisition as the initial investment cost of the long-term equity investment. If the Company becomes
capable to exercise control over an investee not under common control due to additional investment or
other reasons, the initial investment cost is the sum of the carrying amount of the equity investment
originally held and the new investment cost.
(2) Long-term equity investments obtained through forms other than business combination
For a long-term equity investment acquired by paying cash, the initial investment cost is the actual
purchase price.
For a long-term equity investment acquired by the issue of equity securities, the initial investment cost is
the fair value of equity securities issued.
3. Subsequent measurement and determination of profit or loss
(1) Long-term equity investments accounted for using the cost method
The Company accounts for the long-term equity investments of the subsidiaries using the cost method,
unless these investments meet the held-for-sale conditions. Except for cash dividends or profit
distributions declared but undistributed included in the price or consideration actually paid on acquisition
of investments, the Company recognizes its cash dividends or profit distributions declared by the investee
as investment income in the current period.
(2) Long-term equity investments accounted for using the equity method
The long-term equity investments of associates and joint ventures are accounted for using the equity
method. Where the initial investment cost of a long-term equity investment exceeds the Company’s
interest in the fair values of the investee’s identifiable net assets at the acquisition date, no adjustment is
made to the initial investment cost of the long-term equity investment. Where the initial investment cost
is less than the Company’s interest in the fair values of the investee’s identifiable net assets at the
acquisition date, the difference is charged to profit or loss for the current period, and the cost of the
long-term equity investment is adjusted accordingly.
The Company respectively recognizes its share of the net profits or losses and other comprehensive
income made by the investee as investment income or losses and other comprehensive income, and
adjusts the carrying amount of the long-term equity investment accordingly. The carrying amount of the
long-term equity investment is reduced by the portion of any profit distributions or cash dividends
declared by the investee that is attributed to the Company. The Company adjusts the carrying amount of
the long-term equity investment for other changes in owners’ equity of the investee other than net profits
or losses, other comprehensive income and profit distributions (“changes in other owners’ equity”), and
includes the corresponding adjustment in owners’ equity.
For recognition of its share of the investee’s net profits or losses or other comprehensive income and
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changes in other owners’ equity, the Company recognizes its share of the investee’s net profits and other
comprehensive income after making appropriate adjustments based on the fair value of the investee’s
identifiable net assets at the date of acquisition in accordance with its accounting policies and period.
For unrealized profits or losses resulting from intragroup transactions between the Company and
associates or joint ventures, the portion attributable to the Company is eliminated, and based on this, the
investment income is recognized, unless the invested or sold assets constitute the business. The
impairment loss of assets in the unrealized losses resulting from intragroup transactions between the
Company and the investee is fully recognized.
The Company discontinues recognizing its share of net losses of the associate or joint venture after the
carrying amount of the long-term equity investment together with any long-term interests that in
substance form part of the Company’s net investment in the associate or joint venture are reduced to zero,
except to the extent that the Company has incurred obligations to assume additional losses. Where the
associate or joint venture makes net profits subsequently, the Company resumes recognizing its share of
those profits only after its share of the profits equals the share of losses not recognized.
(3) 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 current period.
If, on partial disposal of long-term equity investments accounted for using the equity method, the
remaining equity is still accounted for using the equity method, the portion previously included in other
comprehensive income is accounted for on a pro-rata basis, with the same basis as the relevant assets or
liabilities directly disposed of by the investee, and changes in other owners’ equity are transferred to
profit or loss for the current period on a pro-rata basis.
When the Company loses joint control or significant influence on the investee due to disposal of equity
investments or other reasons, the original equity investment included in other comprehensive income due
to the use of equity method is accounted for on the same basis as the relevant assets or liabilities directly
disposed of by the investee when the equity method discontinues, and the changes in other owners’ equity
are fully transferred to profit or loss for the current period when the equity method discontinues.
Where the Company loses control over the investee due to disposal of partial equity investments, if in
preparing separate financial statements, the Company can exercise joint control or significant influence
on the investee by virtue of its remaining equity, the remaining equity switches to the equity method for
accounting, and is adjusted as if it is accounted for using the equity method since acquisition. Other
comprehensive income recognized prior to acquisition of the control on the investee is carried forward
proportionally on the same basis as the investee’s direct disposal of related assets or liabilities, and
changes in other owners’ equity recognized using the equity method are transferred to profit or loss for
the current period on a pro-rata basis; if the Company cannot exercise joint control or significant
influence on the investee by virtue of its remaining equity, the remaining equity is recognized as financial
assets, and the difference between the fair value and the carrying amount on the date when the Company
loses control is recognized in profit or loss for the current period, and other comprehensive income and
changes in other owners’ equity recognized prior to acquisition of the control on the investee are fully
carried forward.
Where all transactions from disposal of equity investments in a subsidiary through multiple transactions
by steps until the loss of control belong to a single package, the Company accounts for each transaction as
a disposal of equity investments in a subsidiary and the loss of control; however, the difference between
the proceeds from each disposal before loss of control and the carrying amount of the long-term equity
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investments corresponding to the equity disposed of is first recognized in other comprehensive income in
separate financial statements and then transferred to the profit or loss in the period in which the control is
lost. Where all transactions do not belong to a single package, the Company accounts for each transaction
respectively.
23. Investment properties
Measurement of investment properties
Measured at cost
Depreciation or amortization methods
The Company’s investment property is property held to earn rentals or for capital appreciation or both,
including land use rights that have been leased out, land use rights that are held and ready to be
transferred after appreciation, and buildings that have been leased out (including those that are available
for rental after being built by the Company itself or completion of development activities, and are being
built or in progress for rental in the future).
The Company measures the existing investment properties using the cost model. Subsequent costs
incurred for an investment property are included in the cost of the investment property when it is probable
that the associated economic benefits will flow to the Company and the cost of the asset can be measured
reliably. Subsequent costs that fail to meet the recognition criteria above are recognized in profit or loss in
the period in which they are incurred. For investment properties measured using cost model for
measurement - the buildings available for rental follow the same depreciation policies as those of the
Company’s fixed assets, and land use rights available for rental follow the same amortization policies as
those of intangible assets.
24. Fixed assets
(1) Recognition of fixed assets
Fixed assets 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 more than one accounting year. A fixed asset is recognized only
when both of the following conditions are met:
(1) it is probable that economic benefits associated with the fixed asset will flow to the enterprise; and
(2) the cost of fixed assets can be measured reliably.
A fixed asset of the Company is initially measured at its cost, and in determining the cost of a fixed asset, the
Company considers the effect of any expected costs of abandoning the asset at the end of its use.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable
that the associated economic benefits will flow to the Company and the cost of the asset can be measured reliably;
the carrying amount of the part to be replaced is derecognized; all of other subsequent expenditures are recognized
in profit or loss in the period in which they are incurred.
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(2) Method of depreciation
Estimated useful life Annual depreciation rate
Category Method of depreciation Residual value rate
(years) (%)
Buildings Straight-line method 20 1, 10 4.50-5
Machinery equipment Straight-line method 3-10 1, 10 9-33
Auxiliary production
Straight-line method 5-10 10 9-18
equipment
Transportation
Straight-line method 3-5 1, 10 18-33
equipment
Mould equipment Straight-line method 3 10 30
Office equipment Straight-line method 3-5 1, 10 18-33
Computer equipment Straight-line method 3-10 1, 10 10-33
Other equipment Straight-line method 3-10 1, 10 10-33
The Company provides for depreciation of fixed assets by category using the straight-line method, and
determines the depreciation rate on the category, estimated useful life and estimated net residual value of fixed
assets. For fixed assets with the provision for impairment, the depreciation amount will be determined in the
future based on the carrying amount after deduction of the provision for impairment and remaining useful life. If
a fixed asset has various component parts which have different useful lives or provide benefits to the enterprise in
different manners, these component parts are depreciated separately by selecting different depreciation rates or
methods.
The depreciation policy adopted for the fixed assets leased in under finance lease is consistent with that for the
self-owned fixed assets. If there is reasonable certainty that the lessee will obtain ownership of the leased asset by
the end of the lease term, the leased asset is depreciated over its useful life; if there is no reasonable certainty that
the lessee will obtain ownership of the leased asset by the end of the lease term, the leased asset is depreciated
over the shorter of the lease term and its useful life.
(3) Identification basis, pricing and depreciation methods of fixed assets leased in under finance leases
If the clauses of the lease agreement made and entered into by and between the Company and the lessor stipulate
one of the following conditions, the relevant asset will be recognized as the asset leased in under finance lease:
(1) the ownership of the leased asset belongs to the Company after the lease term expires;
(2) the Company has the option to purchase the asset at the price much lower than the fair value of the asset at the
time of exercise of option;
(3) the lease term accounts for the majority of the useful life of the leased asset;
(4) the present value of the minimum lease payment at the commencement date of the lease is not significantly
different from the fair value of the asset; or
(5) the leased asset is of a specialized nature such that only the lessee can use them without major modifications
being made.
At the inception of the lease, the Company records the leased asset at an amount equal to the lower of the fair
value of the leased asset and the present value of the minimum lease payments, and recognizes a long-term
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payable at an amount equal to the minimum lease payments. The difference between the recorded amount of the
leased asset and the recorded amount of the payable is accounted for as unrecognized finance charge.
(4) Disposal of fixed assets
A fixed asset is derecognized when it is disposed of or when no future economic benefits are expected to
be generated from its use or disposal. When a fixed asset is sold, transferred, retired or damaged, the
Company recognizes the amount of any proceeds on disposal net of the carrying amount and related taxes
and fee in profit or loss for the current period.
25. Construction in progress
A construction in progress is measured at the actual cost incurred. Actual cost includes construction and
installation fees, qualifying borrowing costs and other necessary expenses necessarily incurred for
bringing the asset to working condition for its intended use. The construction in progress is transferred to
fixed assets when meeting working conditions for its intended use and the Company begins to make
provision from next month.
26. Borrowing costs
1. Recognition of capitalization of borrowing costs
Borrowing costs incurred by the company that are directly attributable to the acquisition, construction or
production of a qualifying asset are capitalized as part of the cost of the relevant asset. The amounts of
other borrowing costs incurred are recognized as an expense in the period in which they are incurred, and
recorded into profit or loss for the current period.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily take a
substantial period of time for acquisition, construction or production to get ready for their intended use or
sale.
2. Capitalization period of borrowing costs
Capitalization period is the period from the date of commencement of capitalization of borrowing costs to
the date of cessation of capitalization, excluding any period over which capitalization is suspended.
The capitalization of borrowing costs can commence only when all of the following conditions are
satisfied:
(1) expenditures for the asset are being incurred, and such expenditures include those expenditures
incurred for the acquisition, construction or production of the qualifying asset that have resulted in
payments of cash, transfer of non-cash assets, or the assumption of interest-bearing liabilities;
(2) borrowing costs are being incurred; and
(3) activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced.
When the qualifying asset being acquired, constructed or produced has become ready for its intended use
or sale, the capitalization ceases.
3. Period over which capitalization is suspended
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or
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production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous
period of more than 3 months. However, capitalization of borrowing costs continues when the
interruption is a necessary part of the process of preparing that asset for its intended use or sale. The
borrowing costs incurred during these periods of interruption are recognized as profit or loss for the
current period, and the capitalization of borrowing costs continues until the acquisition, construction or
production of that asset is resumed.
4. Calculation methods of rate and amount of capitalization of borrowing cost
Where funds are borrowed under a specific-purpose borrowing for the acquisition, construction or
production of a qualifying asset, the amount of borrowing costs to be capitalized is the actual borrowing
costs incurred for the current 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 and are utilized for the acquisition,
construction or production of a qualifying asset, the Company determines the amount of borrowing costs
to be capitalized on such borrowings by multiplying a capitalization rate of the utilized general-purpose
borrowings by the weighted average of the excess amounts of cumulative expenditures on the asset over
and above the amounts of specific-purpose borrowings. The capitalization rate is the weighted average of
the actual interest rates applicable to the general-purpose borrowings.
During the capitalization period, exchange differences related to the principal and interest on a
specific-purpose borrowing denominated in foreign currency are capitalized as part of the cost of the
qualifying asset. The exchange differences arising from foreign currency borrowings and interest thereon
other than specific-purpose borrowings denominated in foreign currency are recognized in profit or loss
for the current period.
27. Biological assets
None
28. Oil and gas assets
None
29. Right-of-use assets
Please refer to Note V, 42 “Leases” for details of the determination and accounting treatment of
right-of-use assets.
30. Intangible assets
(1) Pricing methods, useful lives and impairment tests
1. Pricing methods of intangible assets
(1) The Company initially measures an intangible asset at cost of acquisition;
The cost of a separately acquired intangible asset comprises its purchase price, related taxes and any
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directly attributable expenditure for preparing the asset for its intended use.
(2) Subsequent measurement
The Company analyzes and assesses the useful life of an intangible asset on its acquisition.
A finite-lived intangible asset is amortized during the period over which the asset generates economic
benefits for the enterprise; an intangible asset is regarded as having an indefinite useful life when there is
no foreseeable limit to the period over which the asset is expected to generate economic benefits for the
enterprise, and is not be amortized.
2. Estimated useful lives of intangible assets with finite life
Item Estimated Amortization Residual value Basis
useful life method rate
Software 3-10 Straight-line None Estimated period
method of benefit
Land use right 50 Straight-line None Certificate of land
method use rights
Patent right 10 Straight-line None Right term
method
Non-patent 10 Straight-line None Estimated period
technology method of benefit
3. Basis for judgement of an intangible asset with indefinite useful life and procedures for review of
useful life
The Company reviews the useful life of the indefinite intangible assets at the end of each period.
Upon review, the useful life of intangible assets is still indefinite.
(2) Accounting policies for internal research and development expenditure
1. Specific criteria for an internal research and development project that are classified into the
research phase and the development phase
Expenditure on an internal research and development project is classified into expenditure on the research
phase and expenditure on the development phase.
Research phase: the stage of original and planned investigation and research activity undertaken with the
prospect of gaining and understanding new scientific or technical knowledge.
Development phase: the stage of the application of research findings or other knowledge to a plan or
design for the production of new or substantially improved materials, devices or products etc. before the
start of commercial production or use.
2. Specific criteria of expenditure on the development phase qualifying for capitalization
Expenditure on the research phase is recognized in profit or loss for the period in which it is incurred.
Expenditure on the development phase is recognized as an intangible asset only when the Company
demonstrates all of the following conditions are met; otherwise, it is recognized in profit or loss for the
current period:
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(1) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
(2) the intention to complete the intangible asset and use or sell it;
(3) how the intangible asset will generate economic benefits. Among other things, the Company can
demonstrate 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 of and
the ability to use or sell the intangible asset; and
(5) its ability to measure reliably the expenditure attributable to the intangible asset during its development
phase.
If the Company fails to discriminate between expenditure on the research phase and expenditure on the
development phase, all expenditures on research and development are recognized in the profit or loss for
the current period.
31. Impairment of long-term assets
Where any indication exists that long-term equity investments, investment properties measured at the cost
model, fixed assets, construction in progress, intangible assets with finite useful life and other long-term
assets may be impaired at the balance sheet date, the Company performs an impairment test thereon. The
result of the impairment test shows that the recoverable amount of an asset is lower than its carrying
amount, the difference is made the provision for impairment and included in the impairment loss. The
recoverable amount of an asset is the higher of its fair value less disposal costs and the present value of
the future cash flows expected to be derived from the asset. The provision for impairment of assets is
calculated and recognized for an individual asset, and if it is not possible to estimate the recoverable
amount of the individual asset, the Company determines the recoverable amount of the asset group to
which the asset belongs. An asset group is the smallest identifiable group of assets that generates cash
inflows.
Goodwill generated in a business combination, indefinite-lived intangible assets and intangible assets
which do not meet the working conditions for its use are tested for impairment at least at the end of each
year, irrespective of whether there is any indication that the asset may be impaired.
For the purpose of impairment testing of the Company, the carrying amount of goodwill generated in a
business combination is, from the acquisition date, allocated on a reasonable basis to each of the related
asset groups. If it is not possible to allocate to the related asset groups, it is allocated to each of the related
sets of asset groups. Each of the related asset groups or sets of asset groups shall be an asset group or set
of asset groups that is able to benefit from the synergies of the business combination.
In testing an asset group or a set of asset groups to which goodwill has been allocated for impairment,
there may be an indication that a related asset group or set of asset groups may be impaired. In such
circumstances, the Company firstly tests the asset group or set of asset groups excluding the amount of
goodwill allocated for impairment, calculates its recoverable amount, compares the recoverable amount
with the related carrying amount and recognizes any impairment loss. Then, the Company tests the asset
group or set of asset groups to which goodwill has been allocated for impairment and compares its
carrying amount and recoverable amount. When the recoverable amount is less than its carrying amount,
the amount of impairment loss first reduces the carrying amount of any goodwill allocated to the asset
group or set of asset groups, and then reduces the carrying amount of other assets (other than goodwill)
within the asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
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Once an impairment loss on the asset above is recognized, it will not be reversed in a subsequent period.
32. Long-term prepaid expenses
Long-term prepaid expenses mean those that have been incurred but should be amortized in the current
period and the subsequent periods of more than one year.
The amortization period and method of expenses are shown as follows:
Item Amortization method Amortization period
Decoration fees Straight-line method Period of benefit
Others Straight-line method Period of benefit
33. Contract liabilities
The Company presents the contract assets or liabilities in the balance sheet based on the relationship
between performance obligations and customer payments. The Company presents the obligations to
transfer goods or offer services to customers as the consideration received or receivable from customers
the contract liabilities. The Company lists the contract assets and liabilities under the same contract as net
amount.
34. Employee benefits
(1) Accounting treatment of short-term benefits
The Company recognizes the short-term benefits actually incurred during the accounting period when the
employees serve the Company as liabilities, and include the same as part of the cost of related assets or in
profit or loss for the current period.
The employee benefits corresponding to payments of social security contributions and housing funds for
employees by the Company and the appropriation to labor union funds and employee education fees are
determined on such provision basis and at such provision rate as stipulated during the period when the
employees provide services for the Company.
The staff welfare incurred by the Company is stated as the amount actually incurred and recorded into
profit or loss for the current period or cost of related assets; non-monetary benefits are measured at fair
value.
(2) Accounting treatment of post-employment benefits
(1) Defined contribution plans
The Company pays basic endowment insurance and unemployment insurance for employees pursuant to
the relevant regulations of the local government. The amounts payable therefor, during the accounting
period when the employees serve the Company, are calculated according to the payment base and
proportion stipulated by the local regulations, which are recognized in profit or loss for the current period
or the cost of related assets as liabilities. The Company pays a certain proportion of the total wages of an
employee to the annuity plan/local social insurance institution, and the corresponding expenses are
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recognized in profit or loss for the current period or the cost of related assets.
(2) Defined benefit plans
The Company, according to the formula determined by the expected cumulative benefit unit method,
attributes the benefit obligations arising from the defined benefit plan to the service period of the
employees, and recognizes them in the profit or loss for the current period or the cost of related assets.
The deficit or surplus formed by the present value of obligations in the defined benefit plan minus the fair
value of assets therein is recognized as the net liabilities or net assets of the defined benefit plan. If the
defined benefit plan has surplus, the Company measures the net assets of the defined benefit plan
according to the lower of the surplus and the upper limit of assets in the defined benefit plan.
All obligations in the defined benefit plan, including obligations expected to be paid within 12 months
after the end of the annual reporting period for employee services, are discounted based on the market
yield of treasury bonds or high-quality corporate bonds in active markets that match the term and
currency of the obligations in the defined benefit plan on the balance sheet date.
The service cost generated by the defined benefit plan and the net interest of the net liabilities or net
assets of the defined benefit plan are recognized in the profit or loss for the current period or the cost of
related assets; changes arising from the re-measurement of net liabilities or net assets of the defined
benefit plan are included in other comprehensive income, and are not be converted back to profit or loss
in subsequent accounting periods. At the end of the original defined benefit plan, the part originally
included in other comprehensive income is fully carried forward to unappropriated profit within the scope
of equity.
In the settlement of the defined benefit plan, the gain or loss of settlement is recognized according to the
difference between the present value of the obligations in the defined benefit plan and the settlement price
determined on the settlement date.
(3) Accounting treatment of termination benefits
The Company recognizes the employment compensation liabilities generated by termination benefits and
records them into the profit or loss for the current period on the earlier of: when the Company cannot
unilaterally withdraw the severance benefits provided as a result of the labor relationship termination plan
or layoff proposal, or when it recognizes the costs or expenses related to the restructuring of the severance
benefits payment.
(4) Accounting treatment of other long-term employee benefits
35. Lease liabilities
The Company has elected to recognize the cumulative effect from the initial application of the New Lease
Standard as an adjustment to the opening balances of retained earnings and other related items in the
financial statements in the initial year of such application, with comparative information not restated.
For the operating leases existing before the date of initial application of the New Lease Standard, the
lease liability is measured at the present value of the remaining lease payments at the date of initial
application of the New Lease Standard that is discounted at the Company’s incremental borrowing rate at
the date of initial application of the New Lease Standard, and for each lease, the right-of-use asset is
measured at either of the followings:
* the carrying amount recognized by adopting the New Lease Standard from the commencement date of
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lease term, discounted by the Company’s incremental borrowing rate at the date of initial application of
the New Lease Standard.
* an amount equal to the lease liability, adjusted by the amount of any prepaid lease payments.
For leases classified as operating leases before the date of initial application, the Company, at the same
time of using aforementioned methods, adopts one or more of the following practical expedients to
account for each lease:
1) accounted as short-term leases for the leases for which the lease term ends within 12 months of the
date of initial application;
2) applied a single discount rate to leases with similar characteristics when measuring lease liabilities;
3) excluded initial direct costs from measuring the right-of-use assets;
4) determined the lease term according to the actual exercise or other updates of options before the date
of initial application if the contract contains options to extend or terminate the lease;
5) adjusted the right-of-use assets by the amount of onerous contract provision recognized in the balance
sheet before the date of initial application if the contract including leases is measured as an onerous
contract before the date of initial application in accordance with Note “III. (24) Provisions” to the
financial statements, as an alternative of testing the impairment of right-of-use assets;
6) accounted for lease modifications before the date of initial application according to the final
arrangement of the lease modifications under the New Lease Standard without retrospective adjustments.
In measuring the lease liabilities, the lease payments are discounted by the Company at the leasee’s
incremental borrowing rate as at January 1, 2021.
For leases classified as finance lease before the date of initial application, the right-of-use asset and the
lease liabilities are measured at the original carrying amount of the asset leased in under finance lease and
obligations under finance lease at the date of initial application.
36. Provisions
The Company recognizes an obligation related to a contingency as a provision when all of the following
conditions are satisfied:
(1) the obligation is a present obligation of the Company;
(2) it is probable that an outflow of economic benefits from the Company will be required to settle the
obligation; and
(3) the amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the expenditure required to settle the related
present obligation.
Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into
account as a whole when the Company reaches the best estimate. Where the effect of the time value of
money is material, the best estimate is determined by discounting the related future cash outflows.
Where there is a continuous range of the expenditure required, and each possible outcome in that range is
as likely as any other, the best estimate is the mid-point of that range. Under any other circumstances, the
best estimate is accounted for as follows:
where the contingency involves a single item, the best estimate is the most likely amount.
where the contingency involves a large population of items, the best estimate is determined by weighting
all possible outcomes by their associated probabilities.
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Where all or some of the expenditure required to settle an estimated liability is expected to be reimbursed
by a third party, the reimbursement is recognized as a separate asset when it is virtually certain that
reimbursement will be received. The amount recognized for the reimbursement does not exceed the
carrying amount of the estimated liability.
The Company reviews the carrying amount of a provision at the balance sheet date. Where there is clear evidence
that the carrying amount of a provision does not reflect the current best estimate, the carrying amount is adjusted
to the current best estimate.
37. Share-based payment
A share-based payment of the Company is a transaction in which the Company grants equity instruments,
or incurs liabilities for amounts that are determined based on the price of equity instruments, in return for
services rendered by employees or other parties. A share-based payment of the Company is classified as
either an equity-settled share-based payment or a cash-settled share-based payment.
1. Equity-settled share-based payment and equity instruments
An equity-settled share-based payment in exchange for services received from the employees is measured
at the fair value of equity instruments granted to the employees. If the right under the share-based
payment vests immediately following the grant, the Company, on grant date, recognizes related costs or
expenses at an amount equal to the fair value of the equity instruments, with a corresponding increase in
capital reserve. If the rights under a share-based payment do not vest until the completion of services for a
vesting period, or until the achievement of a specified performance condition, at each balance sheet date
during the vesting period, the Company makes the best estimate of the number of equity instruments
expected to vest, and based on this, recognizes the services received in the current period in the related
costs or expenses at an amount equal to the fair value on the grant date, with a corresponding increase in
capital reserve.
If the terms of equity-settled share-based payment are modified, the services received are recognized at
least pursuant to the unmodified terms. In addition, any modifications that increase the fair value of the
equity instruments, or changes that are beneficial to employees on the modification date are recognized as
an increase in services.
If the granted equity instrument is cancelled within the vesting period, the Company treats the
cancellation of equity instrument granted as the accelerated exercise, and the amount to be recognized
during the remaining vesting period is immediately charged to profit or loss for the current period, and the
capital reserve is recognized at the same time. However, if a new equity instrument is granted, and on the
grant date thereof, is deemed to replace the cancelled equity instrument, then the substitute equity
instrument granted is accounted for pursuant to the terms and conditions for accounting for original
equity instrument.
2. Cash-settled share-based payment and equity instruments
A cash-settled share-based payment is measured at the fair value of the liability incurred, being a liability
which is determined based on the price of the Company’s shares or other equity instruments. If the right
under the share-based payment vests immediately following the grant, the Company, on grant date,
recognizes related costs or expenses at an amount equal to the fair value of the liabilities assumed with a
corresponding increase in liabilities. If the rights under a share-based payment do not vest until the
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completion of services for a vesting period, or until the achievement of a specified performance condition,
at each balance sheet date during the vesting period, the Company makes the best estimate of the number
of equity instruments expected to vest, and based on this, recognizes the services received in the current
period in the related costs or expenses at an amount equal to the fair value of the liabilities assumed by
the Company, and includes the same in the liabilities accordingly. Until the liability is settled, the
Company remeasures the fair value of the liability at each balance sheet date and at the date of settlement,
with changes recognized in profit or loss for the current period.
38. Preferred shares, perpetual bonds and other financial instruments
39. Revenue
Accounting policies adopted for the recognition and measurement of revenue
1. Accounting policies adopted for the recognition and measurement of revenue
The revenue is recognized at the time when the Company has discharged the performance obligations in
the contract, that is, when the customer obtains the control of the related goods or services. Obtainment of
the control of the related goods or services means the ability to direct the use of such goods and services
and obtain substantially all of economic benefits from them.
If the contract has two or multiple performance obligations, the Company allocates the transaction price
to each individual performance obligation on the inception of the contract by reference to relative
standalone selling prices of goods or services promised thereby. The Company measures revenue based
on the transaction price allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the Company is entitled arising from the
transfer of goods or services to the customer, excluding the amount collected on behalf of a third party
and expected to be returned to the customer. The Company determines the transaction price with
reference to the contract terms and in conjunction with past customary practices, and in doing so,
considers variable consideration, significant financing components in the contract, non-cash consideration,
consideration payable to customers and other factors. The Company determines the transaction price
including variable consideration to the extent that it is highly probable that its inclusion will not result in a
significant revenue reversal of accumulatively recognized revenue in the future when the uncertainty has
been subsequently resolved. If there is a significant financing component in the contract, the Company
determines the transaction price based on the presumed amount payable in cash when the customer
obtains the control of goods or services, and amortizes the differences between the transaction price and
the contract consideration using the actual interest method within the term of the contract.
When meeting one of the following criteria, it belongs to the obligation performed over time, otherwise it
constitutes the obligation performed at a point in time:
the customer obtains and consumes the economic benefits generated by the Company’s performance
when the Company performs the contract.
the customer can control the products in progress in the performance of the contract by the Company.
the products produced in the process of the Company’s performance have irreplaceable uses, and the
Company has the right to collect payment for the cumulative performance that has been completed up to
date throughout the term of the contract.
For the obligation performed over time, the Company recognizes the revenue based on the performance
progress over time, unless the performance progress cannot be reasonably determined. The Company
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determines the progress of performance obligation by taking the nature of goods or services and using the
output/input method. When the performance progress cannot be reasonably determined, and the costs
incurred are expected to be recoverable, the Company recognizes the revenue to the extent of costs
incurred until the performance progress can be reasonably determined.
For the obligation performed at a point in time, the Company recognizes the revenue at the point in time
when the customer obtains the control of the related goods or services. When judging whether the
customer has obtained the control of goods or services, the Company considers the followings signs:
the Company has the current right to receive payment for such goods or services, that is, the customer
has the current obligation to make payment for such goods or services;
the Company has transferred the legal ownership of such goods to the customer, that is, the customer
has the legal ownership of such goods;
the Company has transferred such goods to the customer physically, that is, the customer has taken
possession of such goods physically;
the Company has transferred major risks and rewards of ownership of such goods to the customer, that
is, the customer has obtained major risks and rewards of ownership of such goods; and
the customer has accepted such goods or services.
2. Specific methods of revenue recognition
The Company organizes the production according to the sales contracts signed with or the orders placed
by customers, and identifies the following models based on different geographical locations of customers
and inventory management methods:
(1) General sales
For domestic sales, the Company ships goods to the delivery location designated by a customer, and
recognizes the revenue after the customer has signed the receipt of the products; and for foreign sales, the
goods are delivered according to specific trade terms, and the revenue is recognized at a point in time
when the control is transferred.
(2) Supplier management inventory
Under this model, the Company ships the goods to the designated warehouse, the customer picks up the
goods from the warehouse, and the revenue is recognized at a point in time when the control is
transferred.
Difference in the accounting policy for revenue recognition arising from adoption of different modes of operation for the same kind
of business
None.
40. Government grants
1. Category
Government grants are monetary assets or non-monetary assets from the government to the Company at
no consideration. Government grants are classified into government grants related to assets and
government grants related to income.
Government grants related to assets are government grants whose primary condition is that the Company
should purchase, construct or otherwise acquire long-term assets. Government grants related to income
are government grants other than those related to assets.
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The specific standard based on which the Company classifies a grant as a government grant related to
assets is that: the grant obtained by the Company is used to purchase, construct or otherwise acquire
long-term assets.
The specific standard based on which the Company classifies a grant as a government grant related to
income is that: government grants related to income are government grants other than those related to
assets.
When classifying a grant whose subsidy object is not clearly specified in the government documents as a
government grant related to assets or a government grant related to income, the Company judges whether
the grant is used to purchase, construct or otherwise acquire long-term assets.
2. Recognition time point
When the Company actually receives the government grant, a government grant related to assets of the
Company is recognized, and since the long-term assets are available for use, the Company equally
amortizes the deferred income based on the estimated useful life of long-term assets and then transfers the
same to the profit or loss for the current period.
When the Company actually receives the government grant, a government grant related to income of the
Company is recognized, and the Company recognizes it in the non-operating income or other income over
the periods in which the related costs are recognized if the grant is a compensation for related expenses or
losses to be incurred by the Company in subsequent periods, and directly recognizes it in the
non-operating income or other income for the current period on acquisition if the grant is a compensation
for related expenses or losses incurred by the Company.
The government grant is recognized when the Company meets the conditions attaching to the government
grant and can receive the government grant.
3. Accounting treatment
The government grants related to assets are offset against the carrying amount of the related assets or
recognized as deferred income. If a grant is recognized as deferred income, it is charged to profit or loss
for the current period in a reasonable and systematic manner within the useful life of related assets (the
grant related to the daily activities of the Company is recognized in other income, otherwise it is
recognized in non-operating income);
The government grant related to income which is a compensation for related expenses or losses to be
incurred by the Company in subsequent periods is recognized as the deferred income and charged to the
profit or losses over the period when related costs or losses are recognized (the grant related to the daily
activities of the Company is recognized in other income, otherwise it is recognized in non-operating
income) or offset against related costs or losses; and the government grant related to income which is a
compensation for related expenses or losses incurred by the Company is directly recognized in profit or
loss for the current period (the grant related to the daily activities of the Company is recognized in other
income, otherwise it is recognized in non-operating income) or offset against related costs or losses.
The policy-related preferential loan interest discounts obtained by the Company are accounted for
separately according to the following two circumstances:
(1) If the finance department allocates the interest discount funds to the lending bank, and then the
lending bank offers a loan to the Company at the policy-based preferential interest rate, the Company
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recognizes the loan amount actually received as the recorded amount of the loan, and calculates the
borrowing costs according to the loan principal and such policy-based preferential interest rate.
(2) If the finance department directly allocates the interest discount funds to the Company, the Company
offsets the corresponding interest subsidy against the related borrowing costs.
41. Deferred tax assets/deferred tax liabilities
Income tax includes current and deferred tax. Except for the income tax arising from business
combinations and transactions or events recognized directly in owners’ equity (including other
comprehensive income), the Company recognizes current tax and deferred tax in profit or loss for the
current period.
The deferred tax assets and deferred tax liabilities are calculated and recognized based on the difference
(temporary difference) between the tax base of assets and liabilities and the carrying amount of assets and
liabilities.
A deferred tax asset is recognized for the deductible temporary difference to the extent that it is probable
that future taxable income amounts will be available against which the deductible temporary difference
can be utilized. A deferred tax asset is recognized for the carryforward of unused deductible losses and
tax credits to the extent that it is probable that future taxable income amounts will be available against
which the deductible losses and tax credits can be utilized.
A deferred tax liability is recognized for taxable temporary difference, except for special circumstances.
Special circumstances under which the deferred tax assets or deferred tax liabilities are not recognized for
the taxable temporary difference include:
the initial recognition of goodwill;
the transaction or event that is not business combination, and at the time of the occurrence, does not
affect accounting profit or taxable income amount (or deductible loss).
A deferred tax liability is recognized for the taxable temporary difference related to investments in
subsidiaries, associates and joint ventures, unless the Company is able to control the timing of the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future. A deferred tax asset is recognized for the deductible temporary difference related to
investments in subsidiaries, associates and joint ventures when it is probable that the temporary difference
will reverse in the foreseeable future and taxable income amounts will be available in the future against
which the deductible temporary difference can be utilized.
At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that
are expected to apply to the period when the asset is realized or the liability is settled, according to the
requirements of tax laws.
The Company reviews the carrying amount of the deferred tax assets at the balance sheet date. The
Company reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable
that sufficient taxable income amounts will be available in future periods to allow the benefit of the
deferred tax asset to be utilized. Any such reduction in amount is reversed to the extent that it becomes
probable that sufficient taxable income amounts will be available.
The current tax assets and current tax liabilities are offset and presented on a net basis when the Company
has the statutory right to settle on a net basis, and intends to settle on a net basis or to obtain assets and
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settle liabilities simultaneously.
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset and presented on a net
basis when both of the following conditions are satisfied:
the taxpayer has the statutory right to settle the current tax assets and current tax liabilities on a net basis;
and
the deferred tax assets and deferred tax liabilities are related to income taxes levied by the same tax
authority on the same taxpayer or different taxpayers, provided that during the period in which each
material deferred tax asset and liability will be reversed, the taxpayer involved intends to settle the current
tax assets and liabilities on a net basis or obtain assets and settle liabilities simultaneously.
42. Leases
(1) Accounting treatment of operating leases
Please refer to paragraph (3) of this section for details of determination and accounting treatment of leases under
the New Lease Standard.
(2) Accounting treatment of finance leases
Please refer to paragraph (3) of this section for details of determination and accounting treatment of leases under
the New Lease Standard.
(3) Determination and accounting treatment of leases under the New Lease Standard
Accounting policies applicable since January 1, 2021
The term “lease” refers to an agreement whereby the lessor conveys to the lessee the right to use an asset
for consideration in an agreed period of time. The Company shall assess whether a contract is a lease
contract or contains a lease at the commencement date of the contract, which can be identified if one
party to the contract conveys the right to use one or more identified assets for exchange of consideration
in an agreed period of time.
If a contract contains several individual leases, the Company will split the contract and account for each
individual lease separately. If a contract contains both lease and non-lease components, the lessee and the
lessor will separate the lease and non-lease components.
1. The Company as a lessee
(1) Right-of-use assets
At the commencement date of the lease, the Company recognizes right-of-use assets for leases excluding
short-term leases and leases of low-value assets. The right-of-use assets are initially measured at cost
comprising the following:
* the amount of the initial measurement of lease liability;
* any lease payments made at or before the commencement date less any lease incentives received (if any);
* any initial direct costs incurred to the Company; and
* costs expected to be incurred to the Company for disassembly and removal of leased assets, restoration of
the site where the leased asset is located, or recovery of the leased asset to the condition agreed upon
under the terms of the lease, excluding costs incurred to produce inventories.
The right-of-use assets are depreciated by using a straight-line method subsequently. A leased asset is
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
depreciated over its remaining useful life if the ownership of this leased asset can be reasonably obtained
at the maturity date of the lease term, otherwise, the leased asset is depreciated over the shorter of its
remaining useful life and the lease term.
The Company determines whether the right-of-use assets are impaired and accounts for the identified
impairment losses in accordance with the principles stated in Note “III. (20) Impairment of long-term
assets”.
(2) Lease liabilities
At the commencement date of the lease, the Company recognizes lease liabilities for leases excluding
short-term leases and leases of low-value assets. The lease liabilities are initially measured at the present
value of the outstanding lease payments including:
* fixed payments (including in-substance fixed payments), less any lease incentives receivable (if any);
* variable lease payments that are based on an index or a rate;
* amounts expected to be payable by the Company for the guaranteed residual value;
* the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
* payments of penalties for terminating the lease, if the lease term reflects the Company exercising that
option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the Company’s incremental borrowing rate is applied.
Interest expenses incurred to the lease liabilities over the term of the relevant lease are calculated by the
Company based on fixed periodic interest rate, and recognized in the current profit or loss or the cost of
the related assets.
Variable lease payments excluded from the measurement of lease liabilities are charged to profit or loss in
the period when they are incurred or included in cost of related assets.
After the commencement date of the lease term, the Company will re-measure the lease liabilities and
adjust relevant right-of-use assets in one of the following cases, and charge the difference to the current
profit or loss if the carrying amount of the right-of-use assets is decreased to zero but that of the lease
liabilities needs to be deducted further:
* When there is a change in the assessment of a purchase option, lease renewal option or termination option,
or the actual exercise of the aforementioned options is not consistent with the original assessment, the
Company will re-measure the lease liabilities at the present value of the modified lease payments
discounted by using the revised discount rate.
* When there is a change in the in-substance fixed payments, the expected payable for the guaranteed residual
value, or the index or rate used to determine the lease payments, the Company will re-measure the lease
liabilities at the present value of the modified lease payments discounted by using the original discount rate.
However, if the change in the lease payments is caused by the fluctuation of the floating interest, the present
value shall be discounted by using the revised discount rate.
(3) Short-term leases and leases of low-value assets
The Company chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and
leases of low-value assets, and recognize in the current profit or loss or the cost of the related assets
payments associated with short-term leases and leases of low-value assets on a straight-line basis over the
term of the relevant lease. Short-term leases are leases with a lease term of 12 months or less without a
purchase option at the commencement date of leases. Leases of low-value assets are leases for which the
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
single leased asset is of low value when it is brand new. Lease of an asset that is sub-leased or that is
expected to be sub-leased by the Company is not included in the lease of low-value assets.
(4) Lease modification
The Company accounts for a lease modification as a separate lease if both of the following conditions exist:
* The modification has increased the scope of the lease by adding the right to use one or more leased assets;
and
* The consideration for the lease increases equivalents to the standalone price for the increase in scope of
lease and any appropriate adjustments to that standalone price to reflect the circumstances of the
particular contract.
For a modification that is not accounted for as a separate lease, at the effective date of the modification, the
Company will allocate the consideration in the modified contract, determine the lease term of the modified
lease and re-measure the lease liabilities at the present value of the modified lease payments discounted by
using the revised discount rate.
For modifications that decrease the scope of the lease or shorten the lease term, the Company decreases the
carrying amount of the right-of-use asset accordingly, and recognizes a gain or loss arising from the partial
or full termination of the lease into the current profit or loss. For other modifications resulting to a
re-measurement of lease liabilities, the Company makes a corresponding adjustment to the carrying amount
of right-of-use assets.
The Company leases plants from the governments or platform companies held by the governments with
conditional rent-free agreements executed with local governments and government platforms, in which
conditions such as tax targets, employment targets and output targets are stipulated, thus variable lease
payments are formed. These variable lease payments are not included in the measurement of lease
liabilities and recognized in profit or loss when they are actually incurred.
2. The Company as a lessor
At the commencement date of the lease, the Company classifies leases as finance leases and operating
leases. Finance leases refer to the leases to which the Company has transferred substantially all the risks
and rewards of ownership of the leased assets regardless whether the ownership has transferred or not. All
other leases are classified as operating leases. The Company, when acting as a sub-lease lessor, classifies
the sub-leases based on the right-of-use assets arising from the original leases.
(1) Accounting treatment for operating lease
Rent receipts from operating lease are recognized as rental income on a straight-line basis over the term of
the relevant lease. Initial direct costs related to operating lease are capitalized when incurred, and are
allocated to profit or loss on the same basis as rental income over the lease term. Variable lease payments
not included in the rent receipts are recognized in profit or loss when incurred actually. An operating lease,
if modified, is accounted for as a new lease from the effective date of the modification, with receipts in
advance or rent receivables related to the lease before the modification recognized as the rent receipts of the
new lease.
(2) Accounting treatment for finance lease
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
At the commencement date of the lease, the Company recognizes finance lease receivables and
derecognizes assets held under finance leases. Lease receivables are presented at an amount equal to the
net investment in the lease for the initial measurement. The net investment in the lease is the sum of any
unguaranteed residual value and the present value of the rent receipts not received yet as of the
commencement date of the lease discounted at the interest rate implicit in the lease.
Interest incomes over the term of the relevant lease are calculated by the Company based on fixed periodic
interest rate. The Company accounts for derecognition and impairment of finance lease receivables in
accordance with Note “III. (10) Financial instruments”.
Variable lease payments that are not included in the measurement of the net investment in the lease are
recognized in profit or loss when incurred actually.
The Company accounts for a finance lease modification as a separate lease if both of the following
conditions exist:
* The modification has increased the scope of the lease by adding the right to use one or more leased assets;
* The consideration for the lease increases equivalents to the standalone price for the increase in scope of
lease and any appropriate adjustments to that standalone price to reflect the circumstances of the
particular contract.
For a modification to a finance lease that is not accounted for as a separate lease, the Company accounts for
the modification as follows:
* if the lease would have been classified as an operating lease had the modification been in effect at the
commencement date of the lease, the Company accounts for the lease modification as a new lease from the
effective date of the modification, and measures the carrying amount of the leased asset as the net
investment in the lease immediately before the effective date of the lease modification; or
* if the lease would have been classified as a finance lease had the modification been in effect at the
commencement date of the lease, the Company accounts for the lease modification in accordance with the
requirements in Note “III. (10) Financial instruments - Policies on the contract modifications or
re-negotiation”.
3. Sale and leaseback transactions
The Company assesses and determines whether the transfer of an asset in the sale and leaseback
transactions is accounted for as a sale of that asset pursuant to the principles stated in Note “III. (26)
Revenue”.
(1) The Company as a lessee
If the transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted
for as a sale of the asset, the Company, as a lessee, measures the right-of-use asset arising from the
leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use
retained, and recognizes only the amount of any gain or loss that relates to the rights transferred to the
lessor accordingly; and if the transfer of an asset in the sale and leaseback transactions does not satisfy the
requirements to be accounted for as a sale of the asset, the Company, as a lessee, continues to recognize
the transferred asset and a financial liability equal to the transfer proceeds. Please refer to Note “III. (10)
Financial instruments” for accounting treatment of the financial liability.
(2) The Company as a lessor
If the transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted
for as a sale of the asset, the Company, as a lessor, accounts for the purchase of the asset and for the lease
subject to the above policies stated in “2. The Company as a lessor”; and if the transfer of an asset in the
sale and leaseback transactions does not satisfy the requirements to be accounted for as a sale of the asset,
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
the Company, as a lessor, does not recognize the transferred asset and instead, recognizes a financial asset
equal to the transfer proceeds. Please refer to Note “III. (10) Financial instruments” for accounting
treatment of the financial asset.
Accounting policies applicable prior to January 1, 2021
Leases are classified as finance leases and operating leases. Finance leases refer to the lease to which
substantially all the risks and rewards of the asset ownership have transferred substantially. All other
leases are classified as operating lease.
1. Accounting treatment for operating lease
(1) Lease expenses paid by the Company for leasing in the asset are amortized using a straight-line
method throughout the lease term including the rent-free period, and recognized in expenses for the
current period. The initial direct expenses paid by the Company in connection with the lease transaction
are recognized in expenses for the current period.
When the asset lessor bears the lease-related expenses to be assumed by the Company, the Company
deducts these expenses from total rent and then amortizes such deducted rent during the lease term, and
recognizes the same in expenses for the current period.
(2) Lease expenses received by the Company for leasing out the asset are allocated using a straight-line
method throughout the lease term including the rent-free period, and recognized as the lease-related
income. The initial direct expenses paid by the Company in connection with the lease transaction are
recognized in expenses for the current period; if such initial direct expenses are of a large amount, the
initial direct costs are capitalized and recognized in profit or loss by installments on the same basis as the
recognition of the lease-related income throughout the lease term.
When the Company bears the lease-related expenses to be assumed by the lessee, the Company deducts
these expenses from total rent and then allocates such deducted rent during the lease term.
2. Accounting treatment for finance lease
(1) Assets leased in under finance leases: At the inception of the lease, the Company records the leased
asset at an amount equal to the lower of the fair value of the leased asset and the present value of the
minimum lease payments, and recognizes a long-term payable at an amount equal to the minimum lease
payments. The difference between the recorded amount of the leased asset and the recorded amount of the
payable is accounted for as unrecognized finance charge. The Company amortizes unrecognized finance
charge during the lease term using the effective interest method, and recognizes the same in financial
expenses. The initial direct expenses incurred by the Company are recognized in the value of leased-in
asset.
(2) Assets leased out under finance leases: At the inception of the lease, the Company recognizes the
difference between the sum of finance lease receivables and unguaranteed residual value and their present
value as unearned finance income, and recognizes the same as lease revenue in each period over which
the rent will be received. The initial direct expenses incurred by the Company in connection with the
lease transactions are recognized in the finance lease receivable initially measured and reduces the
amount of income recognized during the lease term.
43. Other significant accounting policies and accounting estimates
None
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
44. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ N/A
Changes in accounting policies and
Approval procedure Remarks
associated reasons
(1) Applying the Accounting Standards for
Examination and approval by the board of
Business Enterprises No.21 - Leases
directors
(revised in 2018)
The Ministry of Finance of the People’s Republic of China (hereinafter referred to as the “Ministry of
Finance”) revised and issued the Accounting Standards for Business Enterprises No.21 - Leases
(hereinafter referred to as the “New Lease Standard”) in 2018, and the Company has implemented the New
Lease Standard since January 1, 2021, according to which the Company chooses to not assess whether a
contract is a lease contract or contains a lease at the date of initial application for contracts that have been
concluded before the date of initial application.
* The Company as a lessee
The Company has elected to recognize the cumulative effect from the initial application of the New Lease
Standard as an adjustment to the opening balances of retained earnings and other related items in the
financial statements in the initial year of such application, with comparative information not restated.
For the operating leases existing before the date of initial application of the New Lease Standard, the
lease liability is measured at the present value of the remaining lease payments at the date of initial
application of the New Lease Standard that is discounted at the Company’s incremental borrowing rate at
the date of initial application of the New Lease Standard, and for each lease, the right-of-use asset is
measured at either of the followings:
* the carrying amount recognized by adopting the New Lease Standard from the commencement date of
lease term, discounted by the Company’s incremental borrowing rate at the date of initial application of
the New Lease Standard.
* an amount equal to the lease liability, adjusted by the amount of any prepaid lease payments.
For leases classified as operating leases before the date of initial application, the Company, at the same
time of using aforementioned methods, adopts one or more of the following practical expedients to
account for each lease:
1) accounted as short-term leases for the leases for which the lease term ends within 12 months of the
date of initial application;
2) applied a single discount rate to leases with similar characteristics when measuring lease liabilities;
3) excluded initial direct costs from measuring the right-of-use assets;
4) determined the lease term according to the actual exercise or other updates of options before the date of
initial application if the contract contains options to extend or terminate the lease;
5) adjusted the right-of-use assets by the amount of onerous contract provision recognized in the balance
sheet before the date of initial application if the contract including leases is measured as an onerous
contract before the date of initial application in accordance with Note “III. (24) Provisions” to the
financial statements, as an alternative of testing the impairment of right-of-use assets;
6) accounted for lease modifications before the date of initial application according to the final
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
arrangement of the lease modifications under the New Lease Standard without retrospective adjustments.
In measuring the lease liabilities, the lease payments are discounted by the Company at the leasee’s
incremental borrowing rate as at January 1, 2021.
Unpaid minimum lease payment of operating lease with significant 157,440,735.91
amount disclosed in the consolidated financial statements as at
December 31, 2020
Present value discounted by the Company’s incremental borrowing rate 144,462,685.91
as at January 1, 2021
Lease liabilities under the New Lease Standard as at January 1, 2021 144,462,685.91
Difference between the discounted present value and the lease 0.00
liabilities
For leases classified as finance lease before the date of initial application, the right-of-use asset and the
lease liabilities are measured at the original carrying amount of the asset leased in under finance lease and
obligations under finance lease respectively at the date of initial application.
* The Company as a lessor
For sub-lease classified as an operating lease before the date of initial application and still existing as at or
after the date of initial application, the Company re-assesses the sub-lease by applying the remaining
contract valid term and contract terms and conditions of the original lease and the sub-lease, and classifies
the sub-lease subject to the New Lease Standard. For sub-lease classified as a financial lease, the
Company accounts for it as new finance lease.
Except sub-lease, the Company is not required to make any adjustments to leases with the Company as a
lessor subject to the New Lease Standard. The Company accounts for leases by applying the New Lease
Standard from the date of initial application.
* Main effects of the Company’s application of the New Lease Standard on the financial statements are stated
as follows:
Changes in accounting Approval Affected items of Amount affected on balance as at
policies and associated procedure the financial January 1, 2021
reasons statements Combination Parent
company
(1) Adjustments made Prepayments -4,726,316.41
by the Company, as a Right-of-use assets 149,189,002.32 1,693,632.15
lessee, to operating Lease liabilities 144,462,685.91 1,693,632.15
leases existing before
the date of initial
application
(2) Application of Interpretation No.14 of Accounting Standards for Business Enterprises
On February 2, 2021, the Ministry of Finance released Interpretation No.14 of Accounting Standards for
Business Enterprises (Cai Kuai [2021] No.1) (hereinafter referred to as the “Interpretation No.14”), which
195
Luxshare Precision Industry Co., Ltd. Annual Report 2021
should come into force from the date of releasement. Relevant businesses transacted from the January 1,
2021 to the date of application shall be adjusted subject to the Interpretation No.14.
Interpretation
① Public-private-partnership (“PPP”) project contracts
Interpretation No.14 is applicable to PPP project contracts satisfying the requirements of “dual features”
and “dual controls” as stated in the Interpretation No.14. Relevant PPP project contracts that were fulfilled
before December 31, 2020 and have not been completed as of the effective date of Interpretation No.14
should be adjusted retrospectively, and in case of retrospective adjustment impracticable, the opening
balance of retained earnings and that of other relevant line items in the financial statements for the current
year of the application date should be adjusted based on the cumulative effect of applying of Interpretation
No.14 from the earliest period when the retrospective adjustment is practicable, with no information in the
comparable period restated. The Company’s application of such requirements has brought no material
impact on the financial position and results of operation of the Company.
② Benchmark interest rate reform
Interpretation No.14 introduces practical expedients for modifications of recognition basis of cash flows
related to financial instrument contract and lease contract resulting from the benchmark interest rate reform.
According to requirements of Interpretation No.14, transactions related to benchmark interest rate reform
that occurred before December 31, 2020 should be adjusted retrospectively unless the retrospective
adjustment is impracticable, with no comparative information in the financial statements of the prior period
restated. On the effective date of Interpretation No.14, the difference between the original carrying amount
and new carrying amount for financial assets and liabilities is recognized in the opening balance of retained
earnings or other comprehensive income for the reporting period of the year when applying Interpretation
No.14. The Company’s application of such requirements has brought no material impact on the financial
position and results of operation of the Company.
(3) Application of the Notice on Adjusting the Application Scope of Accounting Regulations on Rental
Concessions Related to COVID-19 Epidemic
On June 19, 2020, the Ministry of Finance released the Accounting Regulations on Rental Concessions
Related to COVID-19 Epidemic (Cai Kuai [2020] No.10), which regulated that a company can choose to
adopt practicable expedients to any reduction in lease payments directly resulting from COVID-19
epidemic, such as rental concession and delayed payment of rents, provided that such reduction satisfied
relevant conditions.
On May 26, 2021, the Ministry of Finance released the Notice on Adjusting the Application Scope of
Accounting Regulations on Rental Concessions Related to COVID-19 Epidemic (Cai Kuai [2021] No.9),
which should come into force from the date of releasement. According to this notice, the application
scope of rental concessions related to COVID-19 epidemic is adjusted, hence the practical expedients
only applicable to any reduction in lease payments due before June 30, 2021 can also be applied to any
reduction in lease payments due before June 30, 2022, but other applicable conditions remain unchanged.
The Company has chosen practical expedients to account for all lease contracts satisfying the conditions
before the adjustment of the application scope and all similar lease contracts satisfying the conditions on
and after the adjustment of the application scope. Meanwhile, the Company also retrospectively adjusts
relevant lease contracts that have been accounted for by adopting lease modification requirements before
the releasement of this notice, but makes no adjustments on comparative information in the financial
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
statements of the prior period. For any rental concession incurred from January 1, 2021 to the effective
date of this notice which has not accounted for subject to requirements of this notice, the Company will
make adjustments retrospectively subject to requirements of this notice.
(4) Application of presentation related to the centralized management of funds stipulated in Interpretation
No.15 of Accounting Standards for Business Enterprises
On December 30, 2021, the Ministry of Finance released Interpretation No.15 of Accounting Standards
for Business Enterprises (Cai Kuai [2021] No.35) (hereinafter referred to as the “Interpretation No.15”),
according to which the “presentation related to the centralized management of funds” should come into
force from the date of releasement and financial statement information in comparative period shall be
adjusted retrospectively.
Interpretation No.15 makes clear regulations on the presentation and disclosure in the balance sheet of the
balances related to the centralized management of funds of the parent company and its members through
internal clearing houses, finance companies, etc. The implementation of these provisions has not had
material impact on the Company’s financial position and operating results.
(2) Changes in significant accounting estimates
□ Applicable √ N/A
(3) Description of adjustments in opening balances of line items in financial statements of the year due to
initial application of New Lease Standard since 2021
√ Applicable □ N/A
Did the line items of the opening assets and liabilities require adjustment?
√ Yes □ No
Consolidated balance sheet
In RMB
Item December 31, 2020 January 1, 2021 Adjusted amount
Current assets:
Cash and bank balances 10,528,245,765.93 10,528,245,765.93
Balances with clearing
agencies
Placements with banks
and other financial
institutions
Held-for-trading
3,160,064,470.41 3,160,064,470.41
financial assets
Derivative financial
assets
Notes receivable 261,208,601.50 261,208,601.50
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Accounts receivable 13,839,155,340.47 13,839,155,340.47
Receivable financing
Prepayments 183,886,937.70 179,160,621.29 -4,726,316.41
Premiums receivable
Amounts receivable
under reinsurance contracts
Reinsurer’s share of
insurance contract reserves
Other receivables 407,990,780.79 407,990,780.79
Including: Interest
receivable
Dividends
receivable
Financial assets
purchased under resale
agreements
Inventories 13,211,009,381.15 13,211,009,381.15
Contract assets
Held-for-sale assets
Non-current assets due
within one year
Other current assets 1,804,485,645.49 1,804,485,645.49
Total current assets 43,396,046,923.44 43,391,320,607.03 -4,726,316.41
Non-current assets:
Loans and advances to
customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity
1,208,540,333.29 1,208,540,333.29
investment
Other investments in
138,074,571.56 138,074,571.56
equity instruments
Other non-current
financial assets
Investment properties 47,592,110.24 47,592,110.24
Fixed assets 19,761,012,854.95 19,761,012,854.95
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Construction in progress 1,596,064,894.58 1,596,064,894.58
Bearer biological assets
Oil and gas assets
Right-of-use assets 149,189,002.32 149,189,002.32
Intangible assets 1,265,161,209.65 1,265,161,209.65
Development
expenditure
Goodwill 533,139,532.25 533,139,532.25
Long-term prepaid
488,087,044.97 488,087,044.97
expenses
Deferred tax assets 355,834,434.21 355,834,434.21
Other non-current assets 1,223,199,642.61 1,223,199,642.61
Total non-current assets 26,616,706,628.31 26,765,895,630.63 149,189,002.32
Total assets 70,012,753,551.75 70,157,216,237.66 144,462,685.91
Current liabilities:
Short-term borrowings 7,577,068,798.49 7,577,068,798.49
Loans from the central
bank
Taking from banks and
other financial institutions
Held-for-trading
financial liabilities
Derivative financial
liabilities
Notes payable 128,572,111.54 128,572,111.54
Accounts payable 23,051,557,603.83 23,051,557,603.83
Receipts in advance
Contract liabilities 152,512,971.36 152,512,971.36
Financial assets sold
under repurchase agreements
Customer deposits and
deposits from banks and
other financial institutions
Funds from securities
trading agency
Funds from
underwriting securities
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
agency
Employee benefits
1,397,632,139.23 1,397,632,139.23
payable
Taxes payable 237,421,491.63 237,421,491.63
Other payables 146,162,097.14 146,162,097.14
Including: Interest
payable
Dividends
payable
Fees and commissions
payable
Amounts payable under
reinsurance contracts
Held-for-sale liabilities
Non-current liabilities
278,527,714.63 278,527,714.63
due within one year
Other current liabilities 623,257,555.89 623,257,555.89
Total current liabilities 33,592,712,483.74 33,592,712,483.74
Non-current liabilities:
Insurance contract
reserves
Long-term borrowings 1,495,199,238.41 1,495,199,238.41
Bonds payable 2,475,423,249.98 2,475,423,249.98
Including: Preferred
shares
Perpetual
bonds
Lease liabilities 144,462,685.91 144,462,685.91
Long-term payables
Long-term employee
benefits payable
Provisions 1,360,598.63 1,360,598.63
Deferred income 425,345,982.64 425,345,982.64
Deferred tax liabilities 966,092,212.95 966,092,212.95
Other non-current
150,019,923.33 150,019,923.33
liabilities
Total non-current liabilities 5,513,441,205.94 5,657,903,891.85 144,462,685.91
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total liabilities 39,106,153,689.68 39,250,616,375.59 144,462,685.91
Owners’ equity:
Share capital 6,999,768,186.00 6,999,768,186.00
Other equity instruments 527,449,226.56 527,449,226.56
Including: Preferred
shares
Perpetual
bonds
Capital reserve 1,890,099,569.60 1,890,099,569.60
Less: Treasury shares
Other comprehensive
-44,717,803.06 -44,717,803.06
income
Special reserve
Surplus reserve 733,067,797.73 733,067,797.73
General risk reserve
Unappropriated profit 17,996,149,257.73 17,996,149,257.73
Total owners’ equity
attributable to equity holders 28,101,816,234.56 28,101,816,234.56
of the parent company
Minority interests 2,804,783,627.51 2,804,783,627.51
Total owners’ equity 30,906,599,862.07 30,906,599,862.07
Total liabilities and owners’
70,012,753,551.75 70,157,216,237.66 144,462,685.91
equity
Description of adjustment
The Company has implemented the New Lease Standard since January 1, 2021.
Balance sheet of the parent company
In RMB
Item December 31, 2020 January 1, 2021 Adjusted amount
Current assets:
Cash and bank balances 1,890,655,455.45 1,890,655,455.45
Held-for-trading
2,238,600,282.87 2,238,600,282.87
financial assets
Derivative financial
assets
Notes receivable 147,912,632.85 147,912,632.85
Accounts receivable 6,923,152,599.31 6,923,152,599.31
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Receivable financing
Prepayments 295,993,095.73 295,993,095.73
Other receivables 554,707,729.13 554,707,729.13
Including: Interest
receivable
Dividends
11,543,626.19 11,543,626.19
receivable
Inventories 151,961,355.37 151,961,355.37
Contract assets
Held-for-sale assets
Non-current assets due
within one year
Other current assets 143,001,991.83 143,001,991.83
Total current assets 12,345,985,142.54 12,345,985,142.54
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity
13,603,581,726.93 13,603,581,726.93
investment
Other investments in
704,349,663.13 704,349,663.13
equity instruments
Other non-current
financial assets
Investment properties
Fixed assets 142,429,101.80 142,429,101.80
Construction in progress 5,938,197.42 5,938,197.42
Bearer biological assets
Oil and gas assets
Right-of-use assets 1,693,632.15 1,693,632.15
Intangible assets 52,410,346.09 52,410,346.09
Development
expenditure
Goodwill 53,174,339.31 53,174,339.31
Long-term prepaid
727,403.48 727,403.48
expenses
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Deferred tax assets 7,715,791.60 7,715,791.60
Other non-current assets 164,700.00 164,700.00
Total non-current assets 14,570,491,269.76 14,572,184,901.91 1,693,632.15
Total assets 26,916,476,412.30 26,918,170,044.45 1,693,632.15
Current liabilities:
Short-term borrowings 1,038,298,216.05 1,038,298,216.05
Held-for-trading
financial liabilities
Derivative financial
liabilities
Notes payable 918,494,979.38 918,494,979.38
Accounts payable 6,005,518,269.37 6,005,518,269.37
Receipts in advance
Contract liabilities 28,872,712.52 28,872,712.52
Employee benefits
10,262,304.62 10,262,304.62
payable
Taxes payable 21,244,602.02 21,244,602.02
Other payables 1,565,708.61 1,565,708.61
Including: Interest
payable
Dividends
payable
Held-for-sale liabilities
Non-current liabilities
20,029,777.78 20,029,777.78
due within one year
Other current liabilities 512,468,730.41 512,468,730.41
Total current liabilities 8,556,755,300.76 8,556,755,300.76
Non-current liabilities:
Long-term borrowings 180,268,000.00 180,268,000.00
Bonds payable 2,475,423,249.98 2,475,423,249.98
Including: Preferred
shares
Perpetual
bonds
Lease liabilities 1,693,632.15 1,693,632.15
Long-term payables
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Long-term employee
benefits payable
Provisions
Deferred income 8,397,770.66 8,397,770.66
Deferred tax liabilities 19,714,831.53 19,714,831.53
Other non-current
liabilities
Total non-current liabilities 2,683,803,852.17 2,685,497,484.32 1,693,632.15
Total liabilities 11,240,559,152.93 11,242,252,785.08 1,693,632.15
Owners’ equity:
Share capital 6,999,768,186.00 6,999,768,186.00
Other equity instruments 527,449,226.56 527,449,226.56
Including: Preferred
shares
Perpetual
bonds
Capital reserve 2,303,197,437.38 2,303,197,437.38
Less: Treasury shares
Other comprehensive
80,735,015.01 80,735,015.01
income
Special reserve
Surplus reserve 733,067,797.73 733,067,797.73
Unappropriated profit 5,031,699,596.69 5,031,699,596.69
Total owners’ equity 15,675,917,259.37 15,675,917,259.37
Total liabilities and owners’
26,916,476,412.30 26,918,170,044.45 1,693,632.15
equity
Description of adjustment
The Company has implemented the New Lease Standard since January 1, 2021.
(4) Description of retrospective adjustments in comparative data in prior periods due to initial application
of New Lease Standard in 2021
□ Applicable √ N/A
45. Others
None
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VI. Taxes
1. Major categories of taxes and tax rates
Tax category Taxation basis Tax rate
VAT payable is the output tax based on the
sales of goods and taxable labor income
Value added tax calculated pursuant to the tax law, net of 13%, 9%, 6%, 5%, 3%, 0%
the input tax that is allowed to be deducted
in the current period
Subject to the actual payment of VAT and
Urban maintenance and construction tax 7 %, 5%
consumption tax
Enterprise income tax Subject to the taxable income amount 25%, 20%, 19%, 17%, 16.5%, 15%, 0%
Disclosure of taxpayers (if any) with different rates of enterprise income tax:
Taxpayer Rate of enterprise income tax
Luxshare Precision Industry Co., Ltd. 15
Xiexun Electronic (Ji’an) Co., Ltd. 15
ASAP TECHNOLOGY (JIANGXI) CO., LTD. 15
Lanto Electronic Limited. 15
Bozhou Lanto Electronic Limited. 15
HUZHOU JIUDING ELECTRONIC CO., LTD. 15
Luxshare Automation (Jiangsu) Ltd. 15
MERRY ELECTRONICS (SUZHOU) CO., LTD. 15
Luxshare Electronic Technology (Kunshan) Co., Ltd. 15
Yongxin County Boshuo Electronics Co., Ltd. 15
Chuzhou Luxshare Precision Industry Co., Ltd. 15
M&A MERRY ELECTRONICS (HUIZHOU) CO., LTD. 15
FUJIAN JK WIRING SYSTEMS CO., LTD. 15
Jiangxi Luxshare Intelligent Manufacture Co., Ltd. 15
Jiangxi ASAP Electronic Co., Ltd. 15
Kunshan-Luxshare RF Technology Co., Ltd. 15
Suining Luxshare Precision Industry Co., Ltd. 15
Baoding Luxshare Precision Industry Co., Ltd. 15
Luxshare Precision Industry (Shanxi) Co., Ltd. 15
Dongguan Xuntao Electronic Co., Ltd. 15
Kunshan Luxshare Precision Industry Co., Ltd. 15
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Luxshare iTech (Zhejiang) Co., Ltd. 15
Shenzhen Luxshare Acoustics Technology Ltd. 15
Enshi Luxshare Precision Industry Co., Ltd. 15
Luxshare Precision Limited Note 1
Luxshare Precision Technology Co., Ltd. 16.5
Taiwan Luxshare Precision Limited 20
ICT-LANTO LIMITED(HK) Note 1
Luxshare Standard Limited (HK) Note 1
Luxshare Technologies Limited Note 1
Luxshare-ICT (Japan) Note 2
Yunding Technology Co., Ltd. Note 1
Luxis Technology Limited Note 1
Luxshare Precision Investment Co., Ltd. Note 1
SPEED TECH CORP. 20
Luxshare-ICT (India) 25
Luxshare Liantao (India) Co., Ltd. 25
Luxshare ICT, Inc. Note 3
Luxshare-ICT Europe Limited 19
Suk kunststofftechnik GmbH 15
Korea LuxshareICT Co., Ltd Note 4
Xuancheng Luxshare Precision Industry Co., Ltd. 15
LUXSHARE-ICT (VIETNAM) LIMITED. 20
LUXSHARE-ICT (VAN TRUNG) COMPANY LIMITED. 20
LUXSHARE-ICT (NGHE AN) LIMITED. 20
Caseteck Singapore PTE. LTD. 17
Other subsidiaries 25
2. Tax incentives
1. The Company was identified as a high-tech enterprise by Shenzhen Science and Technology Innovation
Commission, Shenzhen Finance Committee, and Shenzhen Tax Service, State Taxation Administration on
December 23, 2021, with the High-tech Enterprise Certificate No.GR202144203830 valid for three years.
As provided for in the Notice by the Ministry of Finance and the State Administration of Taxation on
Preferential Policies for Enterprise Income Taxes Related to Enterprises’ Technological Innovation and
the Notice by the State Administration of Taxation on Issues Concerning the Implementation of Preferential
Enterprise Income Taxes for High-tech Enterprises, the Company enjoys an enterprise income tax of 15%
for 2021.
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2. The subsidiary, Xiexun Electronic (Ji’an) Co., Ltd. (“Ji’an Xiexun”), was identified as a high-tech
enterprise by Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau,
and Jiangxi Provincial Tax Service, State Taxation Administration on September 14, 2020, with the
High-tech Enterprise Certificate No.GR202036001325 valid for three years. According to relevant
provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an
enterprise income tax rate of 15% for 2021.
3. The subsidiary, ASAP TECHNOLOGY (JIANGXI) CO., LTD. (“ASAP JIANGXI”), was identified as a
high-tech enterprise by Science and Technology Department of Jiangxi Province, Jiangxi Provincial
Finance Bureau, and Jiangxi Provincial Tax Service, State Taxation Administration on September 16, 2019,
with the High-tech Enterprise Certificate No.GR201936000710 valid for three years. According to relevant
provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an
enterprise income tax rate of 15% for 2021.
4. The subsidiary, Lanto Electronic Limited. (“Lanto Kunshan”), was identified as a high-tech enterprise by
the Jiangsu Provincial Department of Science and Technology, Jiangsu Provincial Department of Finance,
and Jiangsu Provincial Tax Service, State Taxation Administration on December 2, 2020, with the
High-tech Enterprise Certificate No.GF202032003737 valid for three years. According to relevant
provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an
enterprise income tax rate of 15% for 2021.
5. The sub-subsidiary, Bozhou Lanto Electronic Limited. (“Bozhou Lanto”), was identified as a high-tech
enterprise by Anhui Provincial Department of Science and Technology, Anhui Provincial Department of
Finance, and Anhui Provincial Tax Service, State Taxation Administration on September 18, 2021, with the
High-tech Enterprise Certificate No.GR202134001185 valid for three years. According to relevant
provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an
enterprise income tax rate of 15% for 2021.
6. The sub-subsidiary, HUZHOU JIUDING ELECTRONIC CO., LTD. (“HUZHOU JIUDING”), was
identified as a high-tech enterprise by the Zhejiang Provincial Department of Science and Technology,
Zhejiang Provincial Department of Finance, Zhejiang Provincial Tax Service, State Taxation
Administration and Local Taxation Bureau of Zhejiang Province on December 1, 2020, with the High-tech
Enterprise Certificate No.GR202033002604 valid for three years. According to relevant provisions of the
national high-tech enterprise income tax preferential policies in China, it enjoys an enterprise income tax
rate of 15% for 2021.
7. The subsidiary, Luxshare Automation (Jiangsu) Ltd. (“Jiangsu Automation”), was identified as a
high-tech enterprise by Jiangsu Provincial Department of Science and Technology, Jiangsu Provincial
Department of Finance, and Jiangsu Provincial Tax Service, State Taxation Administration on November
30, 2021, with the High-tech Enterprise Certificate No.GR202132006272 valid for three years. According
to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it
enjoys an enterprise income tax rate of 15% for 2021.
8. The sub-subsidiary, MERRY ELECTRONICS (SUZHOU) CO., LTD. (“MERRY SUZHOU”), was
identified as a high-tech enterprise by Jiangsu Provincial Department of Science and Technology, Jiangsu
Provincial Department of Finance, and Jiangsu Provincial Tax Service, State Taxation Administration on
December 2, 2020, with the High-tech Enterprise Certificate No.GR202032005557 valid for three years.
According to relevant provisions of the national high-tech enterprise income tax preferential policies in
China, it enjoys an enterprise income tax rate of 15% for 2021.
9. The subsidiary, Luxshare Electronic Technology (Kunshan) Co., Ltd. (“Luxshare Electronic Kunshan”),
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
was identified as a high-tech enterprise by Jiangsu Provincial Department of Science and Technology,
Jiangsu Provincial Department of Finance, and Jiangsu Provincial Tax Service, State Taxation
Administration on November 30, 2021, with the High-tech Enterprise Certificate No.GR202132006555
valid for three years. According to relevant provisions of the national high-tech enterprise income tax
preferential policies in China, it enjoys an enterprise income tax rate of 15% for 2021.
10. The sub-subsidiary, Yongxin County Boshuo Electronics Co., Ltd. (“Yongxin Boshuo”), was identified
as a high-tech enterprise by Jiangxi Provincial Department of Science and Technology, Jiangxi Provincial
Department of Finance, and Jiangxi Provincial Tax Service, State Taxation Administration on December 2,
2020, with the High-tech Enterprise Certificate No.GR202036001897 valid for three years. According to
relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys
an enterprise income tax rate of 15% for 2021.
11. The subsidiary, Chuzhou Luxshare Precision Industry Co., Ltd. (“Luxshare Chuzhou”), was identified
as a high-tech enterprise by Anhui Provincial Department of Science and Technology, Anhui Provincial
Department of Finance, and Anhui Provincial Tax Service, State Taxation Administration on September 9,
2019, with the High-tech Enterprise Certificate No.GR201934001733 valid for three years. According to
relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys
an enterprise income tax rate of 15% for 2021.
12. The sub-subsidiary, M&A MERRY ELECTRONICS (HUIZHOU) CO., LTD. (“M&A MERRY
HUIZHOU”), was identified as a high-tech enterprise by Guangdong Province Department of Science and
Technology, Guangdong Provincial Department of Finance, and Guangdong Provincial Tax Service, State
Taxation Administration on December 20, 2021, with the High-tech Enterprise Certificate
No.GR202144005561 valid for three years. According to relevant provisions of the national high-tech
enterprise income tax preferential policies in China, it enjoys an enterprise income tax rate of 15% for 2021.
13. The subsidiary, FUJIAN JK WIRING SYSTEMS CO., LTD. (“FUJIAN JK”), was identified as a
high-tech enterprise by Fujian Provincial Department of Science and Technology, Fujian Provincial
Department of Finance, and Fujian Provincial Tax Service, State Taxation Administration on December 1,
2020, with the High-tech Enterprise Certificate No.GR202035000014 valid for three years. According to
relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys
an enterprise income tax rate of 15% for 2021.
14. The subsidiary, Jiangxi Luxshare Intelligent Manufacture Co., Ltd. (“Intelligent Manufacture Jiangxi”),
was identified as a high-tech enterprise by Jiangxi Provincial Department of Science and Technology,
Jiangxi Provincial Department of Finance, and Jiangxi Provincial Tax Service, State Taxation
Administration on November 3, 2021, with the High-tech Enterprise Certificate No.GR202136000345
valid for three years. According to relevant provisions of the national high-tech enterprise income tax
preferential policies in China, it enjoys an enterprise income tax rate of 15% for 2021.
15. The sub-subsidiary, Jiangxi ASAP Electronic Co., Ltd. (“Boshuo Electronics”), was identified as a
high-tech enterprise by Jiangxi Provincial Department of Science and Technology, Jiangxi Provincial
Department of Finance, and Jiangxi Provincial Tax Service, State Taxation Administration on November 3,
2021, with the High-tech Enterprise Certificate No.GR202136000645 valid for three years. According to
relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys
an enterprise income tax rate of 15% for 2021.
16. The sub-subsidiary, Kunshan-Luxshare RF Technology Co., Ltd. (“Kunshan RF”), was identified as a
high-tech enterprise by Jiangsu Provincial Department of Science and Technology, Jiangsu Provincial
Department of Finance, and Jiangsu Provincial Tax Service, State Taxation Administration on November
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
30, 2021, with the High-tech Enterprise Certificate No.GR202132006790 valid for three years. According
to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it
enjoys an enterprise income tax rate of 15% for 2021.
17. The sub-subsidiary, Suining Luxshare Precision Industry Co., Ltd. (“Suining Luxshare”), was
identified as a high-tech enterprise by Sichuan Provincial Department of Science and Technology, Sichuan
Provincial Department of Finance, and Sichuan Provincial Tax Service, State Taxation Administration on
December 15, 2021, with the High-tech Enterprise Certificate No.GR202151003570 valid for three years.
According to relevant provisions of the national high-tech enterprise income tax preferential policies in
China, it enjoys an enterprise income tax rate of 15% for 2021.
18. The sub-subsidiary, Baoding Luxshare Precision Industry Co., Ltd. (“Baoding Luxshare”), was
identified as a high-tech enterprise by Hebei Provincial Department of Science and Technology, Hebei
Provincial Finance Bureau, and Hebei Provincial Tax Service, State Taxation Administration on September
10, 2019, with the High-tech Enterprise Certificate No.GR201913000851 valid for three years. According
to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it
enjoys an enterprise income tax rate of 15% for 2021.
19. The sub-subsidiary, Luxshare Precision Industry (Shanxi) Co., Ltd. (“Shanxi Luxshare”), was
identified as a high-tech enterprise by Shanxi Science and Technology Department, Shanxi Provincial
Department of Finance, and Shanxi Provincial Tax Service, State Taxation Administration on September
16, 2019, with the High-tech Enterprise Certificate No.GR201914000049 valid for three years. According
to relevant provisions of the national high-tech enterprise income tax preferential policies in China, it
enjoys an enterprise income tax rate of 15% for 2021.
20. The sub-subsidiary, Dongguan Xuntao Electronic Co., Ltd. (“Dongguan Xuntao”), was identified as a
high-tech enterprise by the Department of Science and Technology of Guangdong Province, Department of
Finance of Guangdong Province, and Guangdong Provincial Tax Service, State Taxation Administration
on December 2, 2019, with the High-tech Enterprise Certificate No.GR201944005411 valid for three years.
According to relevant provisions of the national high-tech enterprise income tax preferential policies in
China, it enjoys an enterprise income tax rate of 15% for 2021.
21. The subsidiary, Kunshan Luxshare Precision Industry Co., Ltd. (“Kunshan Luxshare”), was identified
as a high-tech enterprise by Jiangsu Provincial Department of Science and Technology, Jiangsu Provincial
Department of Finance, and Jiangsu Provincial Tax Service, State Taxation Administration on December 2,
2020, with the High-tech Enterprise Certificate No.GR202032002892 valid for three years. According to
relevant provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys
an enterprise income tax rate of 15% for 2021.
22. The subsidiary, Luxshare iTech (Zhejiang) Co., Ltd. (“iTech Zhejiang”), was identified as a high-tech
enterprise by Zhejiang Provincial Department of Science and Technology, Zhejiang Provincial Department
of Finance, and Zhejiang Provincial Tax Service, State Taxation Administration on December 1, 2020, with
the High-tech Enterprise Certificate No.GR202033001987 valid for three years. According to relevant
provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an
enterprise income tax rate of 15% for 2021.
23. The subsidiary, Shenzhen Luxshare Acoustics Technology Ltd. (“Luxshare Acoustics”), was identified
as a high-tech enterprise by Shenzhen Science and Technology Innovation Commission, Shenzhen Finance
Committee, and Shenzhen Tax Service, State Taxation Administration on December 11, 2020, with the
High-tech Enterprise Certificate No.GR202044204060 valid for three years. According to relevant
provisions of the national high-tech enterprise income tax preferential policies in China, it enjoys an
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
enterprise income tax rate of 15% for 2021.
24. The subsidiary, Enshi Luxshare Precision Industry Co., Ltd. (“Luxshare Enshi”), was qualified for tax
reduction in accordance with the Announcement on the Continuation of Preferential Enterprise Income Tax
Policies in the Western Region of China issued by the Ministry of Finance, the State Taxation
Administration and the National Development and Reform Commission which provided that enterprise
income tax should be levied at a reduced rate of 15% on enterprises engaged in the encouraged industries in
the western region for the period from January 1, 2021 to December 31, 2030. Since it is located at Enshi
Tujia and Miao Autonomous Prefecture, Hubei Province where enterprises can apply the preferential
enterprise income tax policies in the Western Region of China, it enjoys an enterprise income tax rate of 15%
for 2021.
25. The sub-subsidiary, Xuancheng Luxshare Precision Industry Co., Ltd. (“Luxshare Xuancheng”), was
identified as a high-tech enterprise by Anhui Provincial Department of Science and Technology, Anhui
Provincial Department of Finance, and Anhui Provincial Tax Service, State Taxation Administration on
September 18, 2021, with the High-tech Enterprise Certificate No.GR202134004975 valid for three years.
According to relevant provisions of the national high-tech enterprise income tax preferential policies in
China, it enjoys an enterprise income tax rate of 15% for 2021.
3. Others
Note 1. As per the tax law in Hong Kong, Hong Kong adopts a territorial source principle of taxation, under
which only profits which have a source in Hong Kong are taxable there, while profits sourced elsewhere are
not subject to Hong Kong gain tax. Luxshare Technologies Limited, Luxshare Standard Limited (HK),
ICT-LANTO LIMITED(HK), Luxshare Precision Limited, Yunding Technology Co., Ltd., Luxis Technology
Limited, and Luxshare Precision Investment Co., Ltd. are not required to pay income tax in Hong Kong.
Note 2. Luxshare-ICT (Japan) is entitled to the graded tax rate for the capital amounting to not more than
JPY100 million. Corporate income tax (national tax): at 15% for the portion of taxable income within JPY8
million (inclusive), and at 23.2% for the portion in excess thereof. Local corporate income tax (national tax): at
10.3% of total corporate taxable income (national tax).
Note 3. The applicable tax rate of Luxshare ICT, Inc is shown as follows:
Applicable tax rate
Income tax (federal) 21%
Local tax (state) 8.84%
Note 4. The applicable tax rate of Korea LuxshareICT Co., Ltd is shown as follows:
Total profits Corporate tax Local tax
Less than KRW200 million 10% 10% of corporate taxable
KWR200 million~KWR20 billion 20% income
KWR20 billion~KWR300 billion 22%
Above KWR300 billion 25%
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
VII. Notes to items in consolidated financial statements
1. Cash and bank balances
In RMB
Item Closing balance Opening balance
Cash on hand 323,716.04 9,919,560.76
Bank deposit 8,921,213,012.04 10,454,884,890.58
Other cash and bank balances 5,283,081,458.35 63,441,314.59
Total 14,204,618,186.43 10,528,245,765.93
Including: Total amount of funds
2,906,518,266.72 3,867,118,934.25
deposited abroad
Other descriptions
Bank deposits include interest incurred from fixed-term deposits amounting to RMB9,647,499.97;
The breakdown of cash and bank balances which are restricted in use by mortgage, pledge or freezing, etc., and
which are deposited abroad with restricted repatriation is as follows:
Item Closing balance Balance at the end of last
year
Security deposit of bank acceptance 3,080,883,997.37 10,678,394.18
bills
Credit deposits 5,079,240.43 13,933,745.95
Performance deposit 2,515,972.33 21,291,516.86
Term deposit or call deposit used for 2,194,602,248.22 17,537,657.60
guarantee
Total 5,283,081,458.35 63,441,314.59
2. Held-for-trading financial assets
In RMB
Item Closing balance Opening balance
Financial assets at fair value through profit
2,107,118,105.04 3,160,064,470.41
or loss
Including:
Derivative financial assets 115,918,643.05 305,388,419.95
Bank wealth management 1,991,199,461.99 2,854,676,050.46
Including:
Total 2,107,118,105.04 3,160,064,470.41
Other descriptions:
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
3. Derivative financial assets
In RMB
Item Closing balance Opening balance
Other descriptions:
4. Notes receivable
(1) Categorized presentation of notes receivable
In RMB
Item Closing balance Opening balance
Bank acceptance bill 137,325,482.78 251,899,317.40
Commercial acceptance bill 170,511,151.86 9,309,284.10
Total 307,836,634.64 261,208,601.50
In RMB
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Category Provision Book Provision Book
Proportio Proportio
Amount Amount proportio value Amount Amount proportio value
n n
n n
Including:
Notes receivable for
which bad-debt 307,839, 307,836,6 261,208,6 261,208,6
100.00% 3,247.78 0.00% 100.00% 0.00 0.00%
provision is made by 882.42 34.64 01.50 01.50
group
Including:
137,325, 137,325,4 251,899,3 251,899,3
Bank acceptance bill 44.61% 0.00 0.00% 96.44% 0.00 0.00%
482.78 82.78 17.40 17.40
Commercial 170,514, 170,511,1 9,309,284 9,309,284
55.39% 3,247.78 0.00% 3.56% 0.00 0.00%
acceptance bill 399.64 51.86 .10 .10
307,839, 307,836,6 261,208,6 261,208,6
Total 100.00% 3,247.78 0.00% 100.00% 0.00 0.00%
882.42 34.64 01.50 01.50
Provision for bad debts made individually:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion Reason for provision
Provision for bad debts made by group:
In RMB
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Descriptions on basis for determining the group:
If the bad-debt provision of notes receivable is made according to the general model of expected credit loss, please disclose the
relevant information of bad-debt provision with reference to the disclosure method of other receivables:
□ Applicable √ N/A
(2) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
Amount of change in the current period
Category Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable √ N/A
(3) Notes receivable pledged by the Company at the end of the period
In RMB
Item Pledged amount at the end of the period
Bank acceptance bill 51,933,961.58
Total 51,933,961.58
(4) Notes receivable that have been endorsed or discounted by the Company at the end of the period and
have not yet matured on the balance sheet date
In RMB
Derecognized amount at the end of the Amount not derecognized at the end of the
Item
period period
Bank acceptance bill 478,321,177.81
Total 478,321,177.81
(5) Notes which the Company transfers into accounts receivable at the end of the period because of drawers’
non-performance
In RMB
Amount transferred to accounts receivable at the end of the
Item
period
Other descriptions
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
(6) Notes receivable actually written off in the current period
In RMB
Item Write-off amount
Including the write-off of significant notes receivable:
In RMB
Whether the funds
Nature of notes Procedures for are generated by
Entity name Write-off amount Reasons for write-off
receivable write-off related-party
transactions
Instructions on the write-off of notes receivable:
5. Accounts receivable
(1) Categorized disclosure of accounts receivable
In RMB
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Category Provision Book Provision
Proportio Proportio Book value
Amount Amount proportio value Amount Amount proportio
n n
n n
Accounts receivable
for which bad-debt 39,549,7 39,549,7 37,656,32 37,527,22
0.12% 100.00% 0.00 0.27% 99.66% 129,099.70
provision is made 91.95 91.95 1.38 1.68
individually
Including:
Accounts receivable
31,677,4
for which bad-debt 54,227,5 31,623,18 13,862,65 23,626,68 13,839,026,
13,509.7 99.88% 0.17% 99.73% 0.17%
provision is made by 63.53 5,946.25 2,924.95 4.18 240.77
8
group
Including:
31,677,4
54,227,5 31,623,18 13,862,65 23,626,68 13,839,026,
Group by aging 13,509.7 99.88% 0.17% 99.73% 0.17%
63.53 5,946.25 2,924.95 4.18 240.77
8
31,716,9
93,777,3 31,623,18 13,900,30 61,153,90 13,839,155,
Total 63,301.7 100.00% 0.30% 100.00% 0.44%
55.48 5,946.25 9,246.33 5.86 340.47
3
Provision for bad debts made individually:
In RMB
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Closing balance
Description
Book balance Bad-debt provision Provision proportion Reason for provision
Entity 1 30,988,680.56 30,988,680.56 100.00% Unrecoverable
Entity 2 3,884,072.10 3,884,072.10 100.00% Unrecoverable
Entity 3 4,290,486.28 4,290,486.28 100.00% Unrecoverable
Entity 4 241,403.36 241,403.36 100.00% Unrecoverable
Entity 5 145,149.65 145,149.65 100.00% Unrecoverable
Total 39,549,791.95 39,549,791.95 -- --
Provision for bad debts made individually:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion Reason for provision
Provision for bad debts made by group:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Undue 31,337,853,591.16 16,204,622.15 0.05%
1 to 60 days overdue 274,521,348.60 13,726,067.48 5.00%
61 to 120 days overdue 34,491,417.46 10,347,425.22 30.00%
121 to180 days overdue 22,644,836.94 9,057,934.76 40.00%
181 to 365 days overdue 5,783,173.47 2,891,586.76 50.00%
1 to 2 years (excluding 1 year) 1,192,149.88 1,072,934.89 90.00%
Over 2 years 926,992.27 926,992.27 100.00%
Total 31,677,413,509.78 54,227,563.53 --
Descriptions on basis for determining the group:
Please refer to Note V, 10 Test and accounting treatment of impairment of financial assets.
Provision for bad debts made by group:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Descriptions on basis for determining the group:
If the bad-debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ N/A
Disclosure by aging
In RMB
215
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Aging Book balance
Within 1 year (including 1 year) 31,679,730,003.56
1 to 2 years 1,192,149.88
2 to 3 years 2,377,074.00
Over 3 years 33,664,074.29
3 to 4 years 2,675,393.73
4 to 5 years 30,988,680.56
Total 31,716,963,301.73
(2) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
Amount of change in the current period
Category Opening balance Recovery or Closing balance
Provision Write-off Others
reversal
Accounts
61,153,905.86 24,825,699.05 7,797,750.57 93,777,355.48
receivable
Total 61,153,905.86 24,825,699.05 7,797,750.57 93,777,355.48
Including significant amounts recovered or reversed from the current provision for bad debts:
In RMB
Entity name Amount recovered or reversed Recovery method
(3) Accounts receivable actually written off in the current period
In RMB
Item Write-off amount
Including the write-off of significant accounts receivable:
In RMB
Whether the funds
Nature of accounts Procedures for are generated by
Entity name Write-off amount Reasons for write-off
receivable write-off related-party
transactions
Descriptions on the write-off of accounts receivable:
(4) Accounts receivable with top five closing balance - by debtor
In RMB
216
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Closing balance of accounts Proportion in total closing Closing balance of bad-debt
Entity name
receivable balance of accounts receivable provision
Entity 1 17,873,506,938.34 56.35% 8,936,753.47
Entity 2 1,811,368,107.96 5.71% 905,684.05
Entity 3 1,683,558,136.61 5.31% 841,779.07
Entity 4 1,049,864,564.03 3.31% 524,932.28
Entity 5 837,357,956.82 2.64% 418,678.98
Total 23,255,655,703.76 73.32%
(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing involvement
Other descriptions:
(6) Accounts receivable derecognized due to transfer of financial assets
Item Amount of Ways of financial assets Gains or losses
derecognition transfer related to
derecognition
Entity 1 14,077,187,202.39 Sold -30,110,522.87
Total 14,077,187,202.39 -30,110,522.87
In 2021, the Company sold the accounts receivable of specific customers to banks and financial
institutions. As of December 31, 2021, the accounts receivable derecognized for the specific customer’s
amount to RMB14,077,187,202.39.
6. Receivables financing
In RMB
Item Closing balance Opening balance
Increase and decrease as well as fair value changes of receivables financing in the current period
□ Applicable √ N/A
If the provision for impairment of receivables financing is made according to the general model of expected credit loss, please refer
to the disclosure method of other receivables to disclose the relevant information of impairment provision:
□ Applicable √ N/A
Other descriptions:
7. Prepayments
(1) Presentation of prepayments by aging
In RMB
217
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 402,980,282.50 99.25% 177,457,391.32 99.05%
1 to 2 years 2,296,128.67 0.57% 1,264,401.36 0.70%
2 to 3 years 531,677.00 0.13% 172,178.32 0.10%
Over 3 years 208,404.44 0.05% 266,650.29 0.15%
Total 406,016,492.61 -- 179,160,621.29 --
Reasons for untimely settlement of prepayments in significant amount with aging over 1 year:
(2) Prepayments with top five closing balance - by prepayment beneficiary
Prepayment receiver Closing balance Proportion in total closing balance of
prepayments (%)
Entity 1 58,847,535.86 14.49
Entity 2 42,715,596.30 10.52
Entity 3 28,873,956.48 7.11
Entity 4 27,066,174.78 6.67
Entity 5 26,857,636.25 6.61
Total 184,360,899.67 45.40
Other descriptions:
8. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 598,456,702.88 407,990,780.79
Total 598,456,702.88 407,990,780.79
(1) Interest receivable
1) Classification of interest receivable
In RMB
Item Closing balance Opening balance
2) Significant overdue interest
In RMB
218
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether there is
Borrower Closing balance Overdue time Reasons for delay impairment and its
judgment basis
Other descriptions:
3) Bad-debt provision
□ Applicable √ N/A
(2) Dividends receivable
1 ) Classification of dividends receivable
In RMB
Item (or Investee) Closing balance Opening balance
2) Significant dividends receivable with aging over 1 year
In RMB
Whether there is
Reasons for
Item (or Investee) Closing balance Aging impairment and its
non-recovery
judgment basis
3 ) Bad-debt provision
□ Applicable √ N/A
Other descriptions:
(3) Other receivables
1) Classification of other receivables by nature
In RMB
Nature of receivables Closing book balance Opening book balance
Reserve fund 731,313.00 2,150,958.86
Security deposit 137,059,171.76 82,843,142.41
Export tax rebate receivable 187,123,564.48 52,519,780.76
Disbursement 56,222,486.93 61,811,236.98
Transfer funds of fixed assets 1,727,939.28 15,068,375.17
Insurance indemnity 59,200,000.00
Others 160,733,783.92 195,784,468.71
219
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 602,798,259.37 410,177,962.89
2) Bad-debt provision
In RMB
Stage I Stage II Stage III
Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total
12-month ECL
credit impaired) impaired)
Balance as at January 1,
2,187,182.10 2,187,182.10
2021
Balance as at January 1,
2021 in the current —— —— —— ——
period
Provision in the current
2,250,179.37 2,250,179.37
period
Reversal in the current
203,621.51 203,621.51
period
Other changes 107,816.53 107,816.53
Balance as at December
4,341,556.49 4,341,556.49
31, 2021
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable √ N/A
Disclosure by aging
In RMB
Aging Book balance
Within 1 year (including 1 year) 602,154,849.94
1 to 2 years 23,540.43
2 to 3 years 467,449.00
Over 3 years 152,420.00
Over 5 years 152,420.00
Total 602,798,259.37
3) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
Opening Amount of change in the current period
Category Closing balance
balance Provision Recovery or Write-off Others
220
Luxshare Precision Industry Co., Ltd. Annual Report 2021
reversal
Group by aging 2,187,182.10 2,250,179.37 203,621.51 0.00 107,816.53 4,341,556.49
Total 2,187,182.10 2,250,179.37 203,621.51 0.00 107,816.53 4,341,556.49
Including significant amounts reversed or recovered from the current provision for bad debts:
In RMB
Entity name Amount reserved or recovered Recovery method
4) Other receivables actually written off in the current period
In RMB
Item Write-off amount
Including the write-off of significant other receivables:
In RMB
Whether the funds
Nature of other Procedures for are generated by
Entity name Write-off amount Reasons for write-off
receivables write-off related-party
transactions
Descriptions on the write-off of other receivables:
5) Other receivables with top five closing balance - by debtor
In RMB
Proportion in total
Nature of Closing balance of
Entity name Closing balance Aging closing balance of
receivables bad-debt provision
other receivables
Entity 1 Export tax rebate 187,123,564.48 Undue 31.04% 935,617.82
Entity 2 Equity transfer funds 142,500,000.00 Undue 23.64% 712,500.00
Entity 3 Insurance indemnity 59,200,000.00 Undue 9.82% 296,000.00
Entity 4 Security deposit 32,716,869.40 Undue 5.43% 163,584.35
Entity 5 Borrowings 30,157,083.33 Undue 5.00% 150,785.42
Total -- 451,697,517.21 -- 74.93% 2,258,487.59
6) Receivables involving government grants
In RMB
Name of government Aging at the end of the Estimated time, amount
Entity name Closing balance
grant period and basis of collection
221
Luxshare Precision Industry Co., Ltd. Annual Report 2021
7) Other receivables derecognized due to transfer of financial assets
None
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
None
Other descriptions:
9. Inventories
Whether the Company need to comply with the disclosure requirements for the real estate industry
No
(1) Classification of inventories
In RMB
Closing Balance Opening Balance
Provision for Provision for
decline in value decline in value
of inventories or of inventories or
Item
Book balance provision for Book value Book balance provision for Book value
impairment of impairment of
contract contract
performance cost performance cost
Raw material 6,531,836,331.00 161,394,242.96 6,370,442,088.04 3,139,313,968.65 30,816,233.39 3,108,497,735.26
Products in
3,386,085,829.05 50,039,777.32 3,336,046,051.73 2,047,580,192.49 31,348,190.65 2,016,232,001.84
process
10,741,507,248.2 10,602,096,163.4
Goods on hand 139,411,084.80 8,023,281,968.11 67,217,791.93 7,956,064,176.18
3 3
Revolving
215,566,686.58 116,734.00 215,449,952.58 57,309,755.00 2,374.56 57,307,380.44
materials
Goods sold 78,396,684.90 243,458.90 78,153,226.00 29,388,057.62 160,985.17 29,227,072.45
Materials in
241,533,661.04 241,533,661.04 42,757,516.88 42,757,516.88
transit
Work in process -
60,796,035.94 3,761,445.61 57,034,590.33 923,498.10 923,498.10
outsourced
21,255,722,476.7 20,900,755,733.1 13,340,554,956.8 13,211,009,381.1
Total 354,966,743.59 129,545,575.70
4 5 5 5
222
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(2) Provision for decline in value of inventories and provision for impairment of contract performance cost
In RMB
Increase in the current period Decrease in the current period
Item Opening Balance Reversal or write Closing Balance
Provision Other Other
off
Raw material 30,816,233.39 86,466,854.63 152,728,576.57 107,883,862.28 733,559.35 161,394,242.96
Products in
31,348,190.65 19,900,825.95 5,619,959.52 6,353,938.25 475,260.55 50,039,777.32
process
Goods on hand 67,217,791.93 50,877,290.59 282,273,365.01 260,129,781.13 827,581.60 139,411,084.80
Revolving
2,374.56 120,251.95 5,892.51 116,734.00
materials
Goods sold 160,985.17 82,473.73 1,672,570.07 1,672,570.07 243,458.90
Materials in
transit
Work in process -
1,444,894.26 11,146,722.09 8,830,170.74 3,761,445.61
outsourced
Total 129,545,575.70 158,892,591.11 453,441,193.26 384,876,214.98 2,036,401.50 354,966,743.59
Other items with amount increased in current period are included due to changes in the scope of consolidation.
(3) Descriptions on closing balance of inventories containing capitalized amount of borrowing costs
(4) Descriptions on current amortization amount of contract performance costs
10. Contract assets
In RMB
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
The amount of and reasons for significant changes in the book value of contract assets in the current period:
In RMB
Item Change amount Reason for change
If the bad-debt provision of contract assets is made according to the general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ N/A
Provision for impairment of contract assets in the current period
In RMB
Item Provision in the current Reversal Write off/cancellation Reason
223
Luxshare Precision Industry Co., Ltd. Annual Report 2021
period
Other descriptions:
11. Held-for-sale assets
In RMB
Closing book Provision for Closing book Estimated Estimated
Item Fair value
balance impairment value disposal costs disposal time
Other descriptions:
12. Current portion of non-current assets
In RMB
Item Closing Balance Opening Balance
Significant debt investments/other debt investments
In RMB
Closing Balance Opening Balance
Debt item Effective Maturity Effective Maturity
Face value Coupon rate Face value Coupon rate
interest rate date interest rate date
Other descriptions:
13. Other current assets
In RMB
Item Closing Balance Opening Balance
Input tax to be deducted 2,049,189,830.82 1,540,111,512.16
Income tax prepaid 108,461,037.04 257,446,420.71
Other 3,404,952.87 6,927,712.62
Total 2,161,055,820.73 1,804,485,645.49
Other descriptions:
14. Debt investments
In RMB
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Principal 1,403,057,083.33 1,403,057,083.33
Interest 61,222,123.30 61,222,123.30
224
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 1,464,279,206.63 1,464,279,206.63
Significant debt investments
In RMB
Closing Balance Opening Balance
Debt item Effective Maturity Effective Maturity
Face value Coupon rate Face value Coupon rate
interest rate date interest rate date
Provision for impairment
In RMB
Stage I Stage II Stage III
Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total
12 -month ECL
credit impaired) unimpaired)
Balance as at January 1,
2021 in the current —— —— —— ——
period
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable √ N/A
Other descriptions:
15. Other debt investments
In RMB
Cumulative
provision for
Changes in
Cumulative loss
Opening Accrued fair value in Closing
Item Cost changes in recognized in Remarks
Balance interest the current Balance
fair value other
period
comprehensi
ve income
Other significant debt investments
In RMB
Closing Balance Opening Balance
Other debt item Effective Maturity Effective Maturity
Face value Coupon rate Face value Coupon rate
interest rate date interest rate date
Provision for impairment
In RMB
Stage I Stage II Stage III
Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total
12 -month ECL
credit impaired) unimpaired)
Balance as at January 1, —— —— —— ——
225
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2021 in the current
period
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable √ N/A
Other descriptions:
16. Long-term receivables
(1) Long-term receivables
In RMB
Closing Balance Opening Balance
Discount rate
Item Bad-debt Bad-debt
Book balance Book value Book balance Book value range
provision provision
Impairment of bad-debt provision
In RMB
Stage I Stage II Stage III
Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total
12 -month ECL
credit impaired) unimpaired)
Balance as at January 1,
2021 in the current —— —— —— ——
period
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable √ N/A
(2) Long-term receivables derecognized due to transfer of financial assets
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing
involvement
Other descriptions
17. Long-term equity investments
In RMB
Increase and decrease in the current period Closing
Opening Investme Other Closing balance
Additiona Declared Provision
balance Reduced nt profit comprehe Other balance of
Investee l cash for
(book investmen or loss nsive changes Other (book provision
investmen dividends impairme
value) t recognize income in equity value) for
t or profits nt
d under adjustmen impairme
226
Luxshare Precision Industry Co., Ltd. Annual Report 2021
equity t nt
method
I. Joint ventures
Riyimao
86,236,93 27,672,43 351,380.9 -7,238,92 -801,598. 106,220,2
Industrial
9.01 4.30 6 1.00 00 35.27
Co., Ltd.
Xuande
-168,137. 168,831.7
Energy -693.88
85 3
Co., Ltd.
86,236,93 -168,137. 27,841,26 351,380.9 -7,238,92 -802,291. 106,220,2
Subtotal
9.01 85 6.03 6 1.00 88 35.27
II. Associates
22,663,50 -394,382. 22,269,12
Siliconch
6.55 18 4.37
Zhuhai
Kinwong
237,597,3 -4,016,97 233,580,3 34,372,60
Flexible
05.22 9.45 25.77 8.46
Circuit
Co., Ltd.
Caldigit
59,234,58 -59,234,5
Holding
0.56 80.56
Limited
Assem
Technolo 53,795,91 -3,934,51 -24,091.5 2,079,272 -424,304. 51,492,28
gy Co., 8.44 0.48 8 .75 66 4.47
Ltd.
Taihan
97,337,32 1,641,552 -92,106,8 579,916.8 -7,451,94
Precision
7.66 .64 56.44 5 0.71
Co., Ltd.
Changshu
Lizhen
Smart
Technolo
gy 600,000,0 2,768,124 -28,540,8 574,227,2
Partnershi 00.00 .91 95.02 29.89
p
(Limited
Partnershi
p)
Vietnam 86,047,36 38,188,03 124,235,3
Meilv 4.31 1.32 95.63
227
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare
Co., Ltd.
Lihao
Optoelect
ronics
49,000,00 -1,046,76 47,953,23
Technolo
0.00 0.91 9.09
gy
(Nantong)
Co., Ltd.
1,156,676 51,768,12 1,896,055 -92,130,9 -56,575,3 -7,451,94 -424,304. 1,053,757 34,372,60
Subtotal
,002.74 4.91 .92 48.02 90.96 0.71 66 ,599.22 8.46
1,242,912 51,768,12 -168,137. 29,737,32 -91,779,5 -56,575,3 -14,690,8 -1,226,59 1,159,977 34,372,60
Total
,941.75 4.91 85 1.95 67.06 90.96 61.71 6.54 ,834.49 8.46
Other descriptions
18. Other investments in equity instruments
In RMB
Item Closing Balance Opening Balance
Beijing Xloong Technologies Co., Ltd. 10,979,152.89 10,977,900.79
Beijing Wiparking Technology Co., Ltd. 9,817,127.78 9,150,443.30
Jingtuo Liyin Technology (Beijing) Co.,
3,214,196.57 3,724,908.43
Ltd.
Zhejiang Tony Electronic Co., Ltd 210,278,829.12 114,221,319.04
Xuande Energy Co., Ltd. 749,467.66
Asia Pacific Emerging Industry Investment
937,374.40
Co., Ltd.
Total 235,976,148.42 138,074,571.56
Itemized disclosure of non-trading equity instrument investments in the current period
In RMB
Reasons for being
designated as Reasons for
Amount of other
equity carry-over of
comprehensive
Recognized Cumulative instruments at fair other
Item Cumulative gains income carried
dividend income losses value through comprehensive
over to retained
other income to
earnings
comprehensive retained earnings
income
Beijing Xloong Not for
979,152.89
Technologies Co., short-term trading
228
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Ltd. purposes
Beijing
Not for
Wiparking
182,872.22 short-term trading
Technology Co.,
purposes
Ltd.
Jingtuo Liyin
Not for
Technology
214,196.57 short-term trading
(Beijing) Co.,
purposes
Ltd.
Zhejiang Tony Not for
Electronic Co., 190,911,536.60 short-term trading
Ltd purposes
Not for
Xuande Energy
-280,153.40 short-term trading
Co., Ltd.
purposes
Asia
Pacific Emerging Not for
Industry 205,568.60 short-term trading
Investment Co., purposes
Ltd.
Other descriptions:
19. Other non-current financial assets
In RMB
Item Closing Balance Opening Balance
Financial assets at fair value through profit
5,700,000.00
or loss
Total 5,700,000.00
Other descriptions:
20. Investment properties
(1) Investment properties measured at cost
√ Applicable □ N/A
In RMB
Item Buildings Land use right Construction in progress Total
I. Original carrying
amount
229
Luxshare Precision Industry Co., Ltd. Annual Report 2021
1. Opening Balance 46,852,148.41 13,982,835.02 60,834,983.43
2. Increase in the current
9,161,172.49 4,581,115.13 13,742,287.62
period
(1) Purchase 2,612,903.29 3,836,878.53 6,449,781.82
(2) Transfer from
inventories\fixed
assets\construction in
progress
(3) Increase in business
6,548,269.20 744,236.60 7,292,505.80
combination
3. Decrease in the current
272,997.06 136,794.66 409,791.72
period
(1) Disposal
(2) Other transfer out 272,997.06 136,794.66 409,791.72
4. Closing Balance 55,740,323.84 18,427,155.49 74,167,479.33
II. Accumulated
depreciation and
amortization
1. Opening Balance 13,242,873.19 13,242,873.19
2. Increase in the current
1,950,658.98 1,950,658.98
period
(1) Provision or
1,950,658.98 1,950,658.98
amortization
3. Decrease in the current
26,743.56 26,743.56
period
(1) Disposal
(2) Other transfer out 26,743.56 26,743.56
4. Closing Balance 15,166,788.61 15,166,788.61
III. Provision for
impairment
1. Opening Balance
2. Increase in the current
period
230
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(1) Provision
3. Decrease in the current
period
(1) Disposal
(2) Other transfer out
4. Closing Balance
IV. Book value
1. Closing balance 40,573,535.23 18,427,155.49 59,000,690.72
2. Opening balance 33,609,275.22 13,982,835.02 47,592,110.24
(2) Investment properties measured at fair value
□ Applicable √ N/A
(3) Investment properties without title certificate
In RMB
Reasons for not obtaining the title
Item Book value
certificate
Other descriptions
21. Fixed assets
In RMB
Item Closing Balance Opening Balance
Fixed assets 34,113,259,322.43 19,761,012,854.95
Total 34,113,259,322.43 19,761,012,854.95
(1) Fixed assets
In RMB
Auxiliary Transportati
Office Machinery Computer Other Mould
Item Buildings production on Total
equipment equipment equipment equipment equipment
equipment equipment
I. Original
carrying
amount
231
Luxshare Precision Industry Co., Ltd. Annual Report 2021
1. Opening 7,021,631,0 196,559,557 10,705,689, 150,733,539 1,816,082,0 48,183,202. 2,780,524,3 2,223,661,7 24,943,065,
Balance 11.34 .77 574.89 .07 01.53 58 78.64 52.60 018.42
2. Increase
in the 4,210,617,2 134,276,736 13,483,629, 69,759,886. 735,713,540 23,841,192. 3,627,756,7 1,701,351,6 23,986,946,
current 81.35 .93 986.60 11 .83 97 07.05 05.44 937.28
period
(1) 848,495,623 95,408,185. 4,482,317,0 63,646,469. 490,034,849 5,639,317.9 1,909,311,8 1,526,140,9 9,420,994,2
Purchase .75 92 06.98 07 .59 5 28.89 78.50 60.65
(2) Transfer
in from 1,015,445,8 18,959,275. 3,824,832,3 245,678,691 5,590,750.5 374,043,824 175,210,626 5,659,780,6
19,299.11
construction 21.50 77 43.29 .24 7 .58 .94 33.00
in progress
(3) Increase
2,346,675,8 19,909,275. 5,176,480,6 6,094,117.9 12,611,124. 1,344,401,0 8,906,172,0
in business
36.10 24 36.33 3 45 53.58 43.63
combination
3. Decrease
in the 183,563,354 16,041,983. 1,045,080,6 4,486,020.1 113,623,105 4,881,952.0 147,000,690 80,147,890. 1,594,825,6
current .25 35 32.16 5 .34 7 .95 26 28.53
period
(1) Disposal 147,385,692 15,781,389. 1,034,152,9 4,340,807.8 110,596,617 4,573,965.4 89,625,488. 71,765,211. 1,478,222,1
or scrap .77 50 75.08 6 .42 6 57 16 47.82
(2)
Decrease in 6,467,188.7 2,646,365.9 1,227,998.2 10,444,630.
8,414.38 94,663.34
business 7 7 0 66
combination
36,177,661. 4,460,468.3 56,147,204. 8,382,679.1 106,158,850
(3) Other 252,179.47 50,548.95 380,121.95 307,986.61
48 1 18 0 .05
4. Closing 11,048,684, 314,794,311 23,144,238, 216,007,405 2,438,172,4 67,142,443. 6,261,280,3 3,844,865,4 47,335,186,
Balance 938.44 .35 929.33 .03 37.02 48 94.74 67.78 327.17
II.
Accumulate
d
depreciation
1. Opening 956,382,716 87,077,656. 1,926,857,2 55,540,034. 551,124,881 24,092,002. 773,123,648 730,494,340 5,104,692,4
Balance .80 22 12.94 17 .71 82 .53 .93 94.12
2. Increase
in the 809,962,790 44,930,376. 4,770,658,4 32,000,746. 344,766,449 14,631,298. 1,562,267,1 621,246,795 8,200,464,0
current .91 96 83.64 39 .55 14 45.26 .68 86.53
period
232
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(1) 476,527,026 35,160,543. 2,404,291,9 32,000,746. 344,766,449 7,866,008.8 900,343,251 621,246,795 4,822,202,7
Provision .41 21 73.33 39 .55 2 .34 .68 94.73
(2) Increase
333,435,764 9,769,833.7 2,366,366,5 6,765,289.3 661,923,893 3,378,261,2
in business
.50 5 10.31 2 .92 91.80
combination
3. Decrease
in the 33,731,526. 15,133,239. 248,884,994 2,040,574.1 55,876,380. 3,351,196.8 59,054,011. 19,273,245. 437,345,170
current 87 52 .67 9 80 1 42 81 .09
period
(1) Disposal 33,483,168. 11,496,141. 246,661,656 1,984,684.7 45,526,991. 3,113,686.5 58,493,166. 17,065,234. 417,824,730
or scrap 89 08 .77 4 42 4 50 25 .19
(2)
Decrease in 1,200,101.6 2,282,695.8
3,927.92 34,027.55 644,432.20 400,206.50
business 5 2
combination
3,633,170.5 1,023,236.2 9,704,957.1 2,208,011.5 17,237,744.
(3) Other 248,357.98 21,861.90 237,510.27 160,638.42
2 5 8 6 08
4. Closing 1,732,613,9 116,874,793 6,448,630,7 85,500,206. 840,014,950 35,372,104. 2,276,336,7 1,332,467,8 12,867,811,
Balance 80.84 .66 01.91 37 .46 15 82.37 90.80 410.56
III.
Provision
for
impairment
1. Opening 1,806,681.3 43,458,498. 2,563,440.1 5,084,008.5 24,373,349. 77,359,669.
31,156.29 42,534.87
Balance 2 43 1 7 76 35
2. Increase
in the 63,256,923. 254,592,907 20,998,644. 338,859,127
10,651.74
current 55 .72 91 .92
period
(1) 3,887,092.2 3,897,744.0
10,651.74
Provision 7 1
(2) Increase
63,256,923. 250,705,815 20,998,644. 334,961,383
in business
55 .45 91 .91
combination
3. Decrease
in the 48,775,955. 11,667,224. 1,592,535.1 62,103,203.
67,487.84
current 68 46 1 09
period
233
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(1) Disposal 48,409,234. 11,667,224. 1,592,535.1 61,736,482.
67,487.84
or scrap 98 46 1 39
(2)
Decrease in
366,720.70 366,720.70
business
combination
4. Closing 63,256,923. 1,806,681.3 249,275,450 2,495,952.2 14,415,429. 22,780,814. 354,115,594
41,808.03 42,534.87
Balance 55 2 .47 7 02 65 .18
IV. Book
value
1. Closing 9,252,814,0 196,112,836 16,446,332, 130,465,390 1,595,661,5 31,727,804. 3,970,528,1 2,489,616,7 34,113,259,
balance 34.05 .37 776.95 .63 34.29 46 83.35 62.33 322.43
2. Opening 6,065,248,2 107,675,220 8,735,373,8 95,162,348. 1,262,393,6 24,048,664. 2,002,316,7 1,468,794,0 19,761,012,
balance 94.54 .23 63.52 61 79.71 89 21.54 61.91 854.95
(2) Temporarily idle fixed assets
In RMB
Original carrying Accumulated Provision for
Item Book value Remarks
amount depreciation impairment
(3) Fixed assets leased out through operating lease
In RMB
Item Closing book value
(4) Fixed assets without title certificate
In RMB
Reasons for not obtaining the title
Item Book value
certificate
Workshop, office and dormitory buildings of
9,150,637.64 Note 1
Fujian JK
Changshu Luxshare Factory and Auxiliary
404,639,526.31 Newly built;the certificate is in process
Building Project
New Dormitory of Zhejiang Intelligent
129,832,130.87 Newly built;the certificate is in process
Manufacture
Cadre Training Center of Meite Technology
1,265,419.65 Newly built;the certificate is in process
(Suzhou) Co., Ltd.
234
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Plant and Dormitory for Jiangxi Intelligent
592,830,470.14 Newly built;the certificate is in process
Manufacture
Luxshare Dongguan factory 65,691,767.40 Newly built;the certificate is in process
Phase II plant of Ri Shan Zhejiang 743,471,969.86 Newly built;the certificate is in process
New plant of Rikai Yancheng 44,378,742.39 Newly built;the certificate is in process
Other descriptions
Note 1: The land occupied by the staff dormitory is in nature an allotted land, the use right of which was
acquired by the Company by means of transfer through agreement in line with relevant regulations at that
time.The property title formed based on the allotted land use right is not allowed to be transferred unless
the allocated land use right is converted to paid land use right.However, the existing land use right cannot
be transferred by agreement, as a result of which the property title to the staff dormitory building has not
been transferred to Fujian JK.
(5) Disposal of fixed assets
In RMB
Item Closing Balance Opening Balance
Other descriptions
22. Construction in progress
In RMB
Item Closing Balance Opening Balance
Construction in progress 3,685,336,499.02 1,596,064,894.58
Total 3,685,336,499.02 1,596,064,894.58
(1) Construction in progress
In RMB
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Workshop
2,131,800,600.48 2,131,800,600.48 1,311,923,496.51 1,311,923,496.51
construction
Equipment
installation 1,326,553,134.57 1,326,553,134.57 145,475,258.95 145,475,258.95
engineering
Mould
97,260,914.54 97,260,914.54 4,759,515.63 4,759,515.63
improvement
Other 129,721,849.43 129,721,849.43 133,906,623.49 133,906,623.49
235
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 3,685,336,499.02 3,685,336,499.02 1,596,064,894.58 1,596,064,894.58
(2) Changes in significant constructions in progress for the current period
In RMB
Amount Proporti Includin
Amount
transferr on of g:
Other of
Increase ed to accumul Amount Current
decrease accumul
Opening in the fixed Closing ated Project of interest Source
Item Budget in the ated
Balance current assets in Balance project progress current capitaliz of funds
current capitaliz
period the investme capitaliz ation rate
period ed
current nt in ed
interest
period budget interest
Changsh
u
Luxshare
1,471,78 364,175, 971,284, 1,335,46
worksho 90.74% 95.00% Other
7,728.51 573.69 528.00 0,101.69
p
construct
ion
Donggua
n
Luxshare
1,000,00 72,701,2 72,701,2
worksho 100.00% 100.00% Other
0,000.00 77.85 77.85
p
construct
ion
Worksho 1,200,00 279,843, 673,780, 496,213, 457,410,
51.21% 51.21% Other
p Project 0,000.00 970.61 606.06 912.86 663.81
Intellige
nt
Manufac
ture
1,082,66 89,543,7 89,543,7
Jiangxi 100.00% 100.00% Other
5,773.12 91.53 91.53
worksho
p
construct
ion
Yunzhon
g phase I 1,700,00 28,170,0 27,810,0 55,980,0
98.21% 98.21% Other
and 0,000.00 00.00 00.00 00.00
phase II
236
Luxshare Precision Industry Co., Ltd. Annual Report 2021
worksho
p
construct
ion
Yi’an
project 660,786, 361,487, 114,887, 332,219, 2,309,82 141,845,
88.00% 88.00% Other
construct 440.65 742.70 066.47 152.38 5.84 830.95
ion
Electroni
c 605,805, 487,150, 201,831, 285,318,
80.41% 80.41% Other
technolo 585.08 275.45 797.57 477.88
gy plant
Equipme
nt
installati
on 339,310, 339,310, 332,784, 6,525,17
98.08% 98.08% Other
project 171.16 171.16 992.17 8.99
of
Luxshare
Chuzhou
Equipme
nt
installati
on
6,228,47 1,644,97 1,430,03 214,933,
project 23.96% 26.41% Other
5,376.16 0,920.29 7,362.74 557.55
of
Luxshare
Yanchen
g
Equipme
nt
installati
670,445, 670,445, 670,445,
on 100.00% 100.00% Other
653.29 653.29 653.29
project
of Rida
Rugao
Equipme
nt
installati 847,976, 817,725, 729,137, 88,587,7
78.86% 96.43% Other
on 554.29 365.52 652.00 13.52
project
of Ri
237
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Shan
Jiashan
15,807,2
1,195,92 5,747,36 4,354,91 2,309,82 2,586,06
Total 53,282.2 -- -- --
2,356.38 4,586.24 5,592.39 5.84 1,524.39
6
(3) Provision for impairment of construction in progress for the current period
In RMB
Item Current provision amount Reasons for provision
Other descriptions
(4) Engineering materials
In RMB
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Other descriptions:
23. Bearer biological assets
(1) Bearer biological assets measured at cost
□ Applicable √ N/A
(2) Bearer biological assets measured at fair value
□ Applicable √ N/A
24. Oil and gas assets
□ Applicable √ N/A
25. Right-of-use assets
In RMB
Transportation
Item Buildings Machinery equipment Total
equipment
I. Original carrying
amount
1. Opening Balance 147,495,370.17 1,693,632.15 149,189,002.32
238
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Increase in the current
375,605,775.94 16,045,204.08 437,601.68 392,088,581.70
period
(1) New leases 192,804,650.78 4,751,216.27 125,220.28 197,681,087.33
(2) Increase in business
182,801,125.16 11,293,987.81 312,381.40 194,407,494.37
combination
(3) Adjustment due to
remeasurement
(4) Other
3. Decrease in the current
1,218,890.20 6,183,682.28 295,576.80 7,698,149.28
period
(1) Transferred to fixed
999,517.81 6,161,993.79 295,576.80 7,457,088.40
assets
(2) Decrease in business
combination
(3) Disposal 219,372.39 21,688.49 241,060.88
4. Closing Balance 521,882,255.91 11,555,153.95 142,024.88 533,579,434.74
II. Accumulated
depreciation
1. Opening Balance
2. Increase in the current
101,776,124.49 13,018,450.84 44,631.18 114,839,206.51
period
(1) Provision 93,483,680.99 12,465,970.48 105,949,651.47
(2) Increase in business
5,325,678.85 552,480.36 5,878,159.21
combination
(3) Other 2,966,764.65 44,631.18 3,011,395.83
3. Decrease in the current
14,030.31 6,257,283.74 6,271,314.05
period
(1) Disposal 3,396,153.69 3,396,153.69
(2) Decrease in business
combination
(3) Other 14,030.31 2,861,130.05 2,875,160.36
4. Closing Balance 101,762,094.18 6,761,167.10 44,631.18 108,567,892.46
III. Provision for
impairment
1. Opening Balance
2. Increase in the current
period
239
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(1) Provision
3. Decrease in the current
period
(1) Disposal
4. Closing Balance
IV. Book value
1. Closing balance 420,120,161.73 4,793,986.85 97,393.70 425,011,542.28
2. Opening balance 147,495,370.17 1,693,632.15 149,189,002.32
Other descriptions:
26. Intangible assets
(1) Intangible assets
In RMB
Non-patent
Item Land use right Patent right Software Other Total
technology
I. Original
carrying amount
1. Opening
1,178,602,217.69 928,068.13 86,906,922.50 126,554,925.95 42,037,843.00 1,435,029,977.27
Balance
2. Increase in the
871,020,331.52 4,632,385.90 37,393,821.51 167,731,293.03 66,261,416.79 1,147,039,248.75
current period
(1) Purchase 373,045,722.98 4,632,385.90 4,708,582.09 89,630,554.91 472,017,245.88
(2) Internal R&D
(3) Increase in
business 497,974,608.54 32,685,239.42 77,611,225.76 66,261,416.79 674,532,490.51
combination
(4) Other 489,512.36 489,512.36
3. Decrease in the
12,385,200.55 422,081.53 9,248,632.67 13,876,275.97 344,557.95 36,276,748.67
current period
(1) Disposal 8,507,623.27 398,726.60 8,665,391.95 13,759,962.53 384.06 31,332,088.41
(2) Decrease in
business 50,570.88 50,570.88
combination
(3) Other 3,877,577.28 23,354.93 583,240.72 65,742.56 344,173.89 4,894,089.38
240
Luxshare Precision Industry Co., Ltd. Annual Report 2021
4. Closing
2,037,237,348.66 5,138,372.50 115,052,111.34 280,409,943.01 107,954,701.84 2,545,792,477.35
Balance
II. Accumulated
amortization
1. Opening
87,448,877.55 598,750.61 47,718,654.08 28,335,659.12 5,766,826.26 169,868,767.62
Balance
2. Increase in the
73,206,682.74 252,255.39 4,829,593.63 94,125,874.39 474,841.65 172,889,247.80
current period
(1) Provision 51,286,373.91 252,255.39 4,829,593.63 62,967,122.44 474,841.65 119,810,187.02
(2) Increase in
business 21,920,308.83 31,158,751.95 53,079,060.78
combination
(3) Other
3. Decrease in the
76,189.85 419,185.56 7,727,670.55 11,679,882.61 47,638.81 19,950,567.38
current period
(1) Disposal 398,665.62 7,405,326.81 11,610,874.38 384.06 19,415,250.87
(2) Decrease in
business 32,543.28 32,543.28
combination
(3) Other 76,189.85 20,519.94 322,343.74 36,464.95 47,254.75 502,773.23
4. Closing
160,579,370.44 431,820.44 44,820,577.16 110,781,650.90 6,194,029.10 322,807,448.04
Balance
III. Provision for
impairment
1. Opening
Balance
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal
4. Closing
Balance
IV. Book value
1. Closing 1,876,657,978.22 4,706,552.06 70,231,534.18 169,628,292.11 101,760,672.74 2,222,985,029.31
241
Luxshare Precision Industry Co., Ltd. Annual Report 2021
balance
2. Opening
1,091,153,340.14 329,317.52 39,188,268.42 98,219,266.83 36,271,016.74 1,265,161,209.65
balance
The proportion of intangible assets formed through internal R&D in the balance of intangible assets at the end of this period.
(2) Land use right without title certificate
In RMB
Reasons for not obtaining the title
Item Book value
certificate
Other descriptions:
27. Development expenditure
In RMB
Increase in the current period Decrease in the current period
Opening Internal Recognized Converted to Closing
Item
Balance development Other as intangible current profit Balance
expenditure assets or loss
Total
Other descriptions
28. Goodwill
(1) Original carrying amount of goodwill
In RMB
Increase Decrease
Investee name or
Formed by
event forming Opening Balance Closing Balance
business Other Disposal Other
goodwill
combination
ASAP
Technology
42,325,745.85 42,325,745.85
(Jiangxi) Co.,
Ltd.
Lanto Electronic
376,682,429.24 376,682,429.24
Limited
Bozhou Lanto
9,564,372.61 9,564,372.61
Electronic
242
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Limited
M&A of
KERTONG 53,174,339.31 53,174,339.31
goodwill
Fujian JK Wiring
Systems Co., 17,717,209.29 17,717,209.29
Ltd..
Huzhou Jiuding
Electronic Co., 1,730,318.45 1,730,318.45
Ltd.
SpeedTech Corp. 26,656,146.69 26,656,146.69
Luxshare
Electronic
Technology 4,582,880.91 4,582,880.91
(Kunshan) Co.,
Ltd.
Suk
kunststofftechnik 9,552,894.63 9,552,894.63
GmbH
Meite Technology
(Suzhou) Co., 8,570,588.06 8,570,588.06
Ltd.
Meilv Electronic
(Huizhou) Co., 6,575,713.14 6,575,713.14
Ltd.
Meilv Electronics
(Shanghai) Co., 454,304.97 454,304.97
Ltd.
Wuxi Huihong
Electronic Co., 3,102,735.14 3,102,735.14
Ltd.
Castle Rock, Inc. 8,303,254.98 8,303,254.98
Taiqiao
Investment Co., 441,595.93 441,595.93
Ltd.
Luxcase
Precision
Technology 814,784,800.96 814,784,800.96
(Yancheng) Co.,
Ltd.
243
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Zhejiang Puxing
Electronic
804,455.51 804,455.51
Technology Co.,
Ltd.
Caldigit
41,765,582.41 41,765,582.41
Holding(Cayman)
Taihan Precision
9,972,872.88 9,972,872.88
Co., Ltd.
Total 569,434,529.20 867,327,711.76 3,102,735.14 1,433,659,505.82
(2) Provision for impairment of goodwill
In RMB
Investee name or Increase Decrease
event forming Opening Balance Closing Balance
Provision Other Disposal Other
goodwill
Meite Technology
(Suzhou) Co., 8,570,588.06 8,570,588.06
Ltd.
Suk
kunststofftechnik 9,552,894.63 9,552,894.63
GmbH
Meilv Electronics
(Shanghai) Co., 454,304.97 454,304.97
Ltd.
Fujian JK Wiring
Systems Co., 17,717,209.29 17,717,209.29
Ltd..
Total 36,294,996.95 36,294,996.95
Relevant information on asset group or set of asset groups to which the goodwill belongs
Descriptions on the goodwill impairment test process, key parameters (such as the growth rate in the forecast period, the growth rate
in the stable period, the profit rate, the discount rate, the forecast period, etc., when forecasting the present value of future cash flow)
and the recognition method of goodwill impairment loss
The goodwill of the Company is formed by business combinations not involving enterprises under common
control in previous years and this year. On the balance sheet date, the Company conducted impairment tests
on goodwill. The recoverable amount of the asset group involved in goodwill is determined according to the
present value of the future cash flow of the asset group and the net realizable value. The management
determines the growth rate and gross margin based on the macro market environment, historical experience
and the development stage forecast of product segments involved in different asset groups. Depending on the
different asset groups involved, the growth rate used in the forecast for the current year is 1.00% - 35.00%,
the gross margin is 7.50% - 26.00%, and the discount rate is 10.68% - 11.51%.The parameters used in
244
Luxshare Precision Industry Co., Ltd. Annual Report 2021
goodwill impairment test of major asset groups are as follows:
Asset group name Gross margin Growth rate Discount rate
Lanto Electronic Limited 20.00 % - 21.65% 2.00 % - 4.09% 10.82 %
Shenzhen Kertong Industrial Co., Ltd. 22.00 % - 23.00% 26.00 % - 27.10% 11.17 %
Luxcase Precision Technology 7.50 % - 9.73% 10.00 % - 35.00% 11.02 %
(Yancheng) Co., Ltd.
Influence of goodwill impairment test
Other descriptions
29. Long-term prepaid expenses
In RMB
Amortization
Increase in the Other reduced
Item Opening Balance amount in the Closing Balance
current period amount
current period
House decoration
424,783,399.73 339,656,026.43 173,723,767.93 590,715,658.23
fees
Other 63,303,645.24 151,337,009.18 72,340,590.23 142,300,064.19
Total 488,087,044.97 490,993,035.61 246,064,358.16 733,015,722.42
Other descriptions
30. Deferred income tax assets / deferred income tax liabilities
(1) Deferred income tax assets that are not offset
In RMB
Closing Balance Opening Balance
Item Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for impairment
334,568,858.40 63,227,661.81 178,973,738.82 27,259,356.59
of assets
Unrealized profit of
357,420,408.97 65,112,209.21 197,095,777.59 29,564,366.64
internal transaction
Deductible losses 3,434,269,746.64 544,802,910.66 1,093,128,995.53 151,850,386.35
Exchange differences of
65,447,863.20 13,089,572.55 27,288,912.60 5,457,782.50
foreign operations
Non-leave bonus 3,393,924.14 676,806.65 1,773,724.21 354,744.89
Government grants 489,494,362.59 87,213,362.00 396,003,023.27 70,194,455.38
245
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Share-based payment 311,751,257.24 75,531,955.67 390,170,003.29 67,974,211.12
Other 199,941,535.44 41,560,989.98 15,122,457.21 3,179,130.74
Total 5,196,287,956.62 891,215,468.53 2,299,556,632.52 355,834,434.21
(2) Deferred income tax liabilities that are not offset
In RMB
Closing Balance Opening Balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
difference difference
Assets valuation
appreciation of business
combination not 909,128,653.76 171,173,301.23 93,903,990.20 16,054,921.33
involving enterprises
under common control
Changes in fair value of
other investments in 191,890,689.53 28,783,603.43 95,831,927.34 14,374,789.10
equity instruments
Accelerated depreciation
6,009,902,532.36 905,906,182.00 5,363,997,971.61 806,120,054.47
of fixed assets
Support funds allocated
14,658,934.73 2,198,840.21 15,046,630.73 2,256,994.61
by the government
Accumulative
recognition of overseas
646,292,642.90 129,258,528.58 342,518,297.34 68,503,659.35
investment interests by
equity method
Prepaid pension 5,447,475.80 1,089,495.16 4,849,056.41 969,811.28
Allowance for bad debt
677,356.60 135,471.32 682,946.59 136,589.23
overrun
Valuation of derivative
211,399,624.82 33,099,925.45 320,117,316.21 48,017,597.53
financial instruments
Other 2,261,422.45 447,120.48 51,621,287.35 9,657,796.05
Total 7,991,659,332.95 1,272,092,467.86 6,288,569,423.78 966,092,212.95
(3) Deferred income tax assets or liabilities presented in net amount after offsetting
In RMB
Offset amount between Offset amount between
Closing balance of Opening balance of
Item deferred tax assets and deferred tax assets and
deferred tax assets or deferred tax assets or
liabilities at the end of liabilities at the
246
Luxshare Precision Industry Co., Ltd. Annual Report 2021
the period liabilities after offset beginning of the period liabilities after offset
Deferred tax assets 891,215,468.53 355,834,434.21
Deferred tax liabilities 1,272,092,467.86 966,092,212.95
(4) Details of unrecognized deferred income tax assets
In RMB
Item Closing Balance Opening Balance
(5) The deductible losses of unrecognized deferred income tax assets will be due in the following years
In RMB
Particular year Closing amount Opening amount Remarks
Other descriptions:
31. Other non-current assets
In RMB
Closing Balance Opening Balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Prepayments for equipment, project and 1,893,831,96 1,893,831,96 1,212,186,29 1,212,186,29
land 2.00 2.00 0.84 0.84
Prepaid pension 5,447,475.82 5,447,475.82 4,849,056.41 4,849,056.41
Other 5,025,743.67 5,025,743.67 6,164,295.36 6,164,295.36
1,904,305,18 1,904,305,18 1,223,199,64 1,223,199,64
Total
1.49 1.49 2.61 2.61
Other descriptions:
32. Short-term borrowings
(1) Classification of Short-term borrowings
In RMB
Item Closing Balance Opening Balance
Pledge loans 5,928,221,439.02 5,382,006,847.47
Mortgage loans 41,391,259.41 80,950,818.66
Guaranteed loans 64,979,271.97 871,234,184.03
Credit loans 5,885,043,367.59 1,242,876,948.33
247
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 11,919,635,337.99 7,577,068,798.49
Descriptions on classification of short-term borrowings:
As at December 31, 2021, the Company discounted bank acceptance bills issued mutually among companies
within the Group in the amount of RMB7,582,473,758.45, and presented them as short-term borrowings
(2) Overdue but unpaid short-term borrowings
The total amount of overdue but unpaid short-term borrowings at the end of the period is RMB, of which the significant overdue and
outstanding short-term borrowings are as follows:
In RMB
Borrower Closing Balance Loan interest rate Overdue time Overdue interest rate
Other descriptions:
33. Held-for-trading financial liabilities
In RMB
Item Closing Balance Opening Balance
Held-for-trading financial liabilities 41,436.00
Including:
Held-for-trading bonds issued 41,436.00
Including:
Total 41,436.00
Other descriptions:
34. Derivative financial liabilities
In RMB
Item Closing Balance Opening Balance
Other descriptions:
35. Notes payable
In RMB
Category Closing Balance Opening Balance
Commercial acceptance bill 234,500,590.93 128,292,099.33
Bank acceptance bill 280,012.21
Total 234,500,590.93 128,572,111.54
The total amount of notes payable due but unpaid at the end of this period is RMB.
248
Luxshare Precision Industry Co., Ltd. Annual Report 2021
36. Accounts payable
(1) Presentation of accounts payable
In RMB
Item Closing Balance Opening Balance
Within one year 45,255,253,965.04 23,001,670,496.95
One to two years 112,098,892.50 48,074,585.64
Two to three years 38,693,846.52 777,315.18
More than three years 10,118,963.61 1,035,206.06
Total 45,416,165,667.67 23,051,557,603.83
(2) Significant accounts payable with aging over 1 year
In RMB
Reasons for non-payment or carrying
Item Closing Balance
forward
Warranty bonds for workshop construction
Project payment 11,928,218.40
progress
Project payment 28,895,641.37 Acceptance pending for project
Project payment 6,890,000.00 Unexpired warranty bonds
Equipment payment 4,931,603.95 Dispute arising from equipment quality
Material payment 4,646,017.70 Incomplete information
Unsettlement due to incompletion of
Project payment 5,356,808.96
construction
Unsettlement due to incompletion of
Project payment 5,820,767.84
construction
Unsettlement due to incompletion of
Project payment 4,543,578.79
construction
Total 73,012,637.01 --
Other descriptions:
37. Receipts in advance
(1) Presentation of receipts in advance
In RMB
Item Closing Balance Opening Balance
249
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(2) Significant receipts in advance with aging over 1 year
In RMB
Reasons for non-payment or carrying
Item Closing Balance
forward
38 Contract liabilities
In RMB
Item Closing Balance Opening Balance
Goods payments received in advance 268,506,246.98 152,512,971.36
Total 268,506,246.98 152,512,971.36
Amount of and reason for significant changes in book value during the reporting period
In RMB
Item Change amount Reason for change
39. Employee benefits payable
(1) Presentation of employee benefits payable
In RMB
Item Opening Balance Increase Decrease Closing Balance
I. Short-term
1,362,258,894.71 15,668,099,039.88 14,973,064,960.96 2,057,292,973.63
compensation
II. Post employment
benefits - defined 35,274,789.60 937,712,989.07 930,575,388.97 42,412,389.70
contribution plan
III. Termination benefits 98,454.92 1,714,038.20 1,601,474.66 211,018.46
Total 1,397,632,139.23 16,607,526,067.15 15,905,241,824.59 2,099,916,381.79
(2) Presentation of short-term compensation
In RMB
Item Opening Balance Increase Decrease Closing Balance
1. Salary, bonus,
1,330,443,894.00 13,427,626,555.87 12,746,623,506.34 2,011,446,943.53
allowance and subsidy
2. Employee welfare 3,629,715.26 53,466,985.57 56,034,728.83 1,061,972.00
3. Social insurance
23,293,053.59 441,499,817.54 430,701,485.32 34,091,385.81
premium
250
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Including: Medical
19,737,830.72 377,258,064.34 368,286,236.76 28,709,658.30
insurance premium
Employment injury
2,197,080.72 29,508,920.74 29,070,058.54 2,635,942.92
insurance premium
Maternity insurance
1,358,142.15 34,732,832.46 33,345,190.02 2,745,784.59
premium
4. Housing provident
972,860.12 316,916,902.63 312,165,793.95 5,723,968.80
fund
5. Trade union funds and
1,547,495.17 14,688,217.39 14,805,680.82 1,430,031.74
staff education funds
6. Other short-term
2,371,876.57 1,413,900,560.88 1,412,733,765.70 3,538,671.75
compensation
Total 1,362,258,894.71 15,668,099,039.88 14,973,064,960.96 2,057,292,973.63
(3) Presentation of defined contribution plan
In RMB
Item Opening Balance Increase Decrease Closing Balance
1. Basic endowment
34,443,692.48 906,923,458.42 900,272,413.80 41,094,737.10
insurance premium
2. Unemployment
831,097.12 30,789,530.65 30,302,975.17 1,317,652.60
insurance premium
Total 35,274,789.60 937,712,989.07 930,575,388.97 42,412,389.70
Other descriptions:
40. Taxes payable
In RMB
Item Closing Balance Opening Balance
Value added tax 91,182,205.54 51,405,224.41
Enterprise income tax 289,614,289.13 61,775,887.49
Individual income tax 76,622,641.75 21,229,322.95
Urban maintenance and construction tax 29,252,309.25 39,628,090.50
Property tax 23,068,002.63 9,463,498.94
Education surcharges 17,112,381.32 24,409,566.22
Local education surcharges 11,090,231.72 15,752,322.98
Land use tax 4,341,775.20 2,197,387.91
Stamp duty 10,097,139.66 6,904,466.32
251
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Disability insurance 50,292,555.43
Other 13,366,064.65 4,655,723.91
Total 616,039,596.28 237,421,491.63
Other descriptions:
41. Other payable
In RMB
Item Closing Balance Opening Balance
Other payable 382,391,106.17 146,162,097.14
Total 382,391,106.17 146,162,097.14
(1) Interest payable
In RMB
Item Closing Balance Opening Balance
Significant overdue but unpaid interest:
In RMB
Borrower Overdue amount Reasons for delay
Other descriptions:
(2) Dividends payable
In RMB
Item Closing Balance Opening Balance
Other descriptions: it is required to disclose the reasons if there are key dividends payable that have not been paid for more than 1
year.
(3) Other payable
1 ) Presentation of other payable by nature
In RMB
Item Closing Balance Opening Balance
Within 1 year 345,015,789.15 144,334,594.60
1 -2 years 17,196,648.52 622,251.94
2 -3 years 14,409,891.93 410,000.00
Over 3 years 5,768,776.57 795,250.60
Total 382,391,106.17 146,162,097.14
252
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2 ) Other significant accounts payable aged over 1 year
In RMB
Reasons for non-payment or carrying
Item Closing Balance
forward
Other descriptions
42. Held-for-sale liabilities
In RMB
Item Closing Balance Opening Balance
Other descriptions:
43. Non-current liabilities due within one year
In RMB
Item Closing Balance Opening Balance
Long-term borrowings due within one year 157,786,550.24 278,527,714.63
Lease liabilities due within one year 112,293,039.92
Total 270,079,590.16 278,527,714.63
Other descriptions:
44. Other current liabilities
In RMB
Item Closing Balance Opening Balance
Short-term bonds payable 1,607,038,444.45 508,715,277.78
Government-backed fund 57,000,000.00
Entrusted loans 1,971,219,540.97
Output VAT to be levied 18,605,890.19 17,673,149.75
Payable for purchase returns 21,715,597.38
Other 4,843,599.88 39,869,128.36
Total 3,623,423,072.87 623,257,555.89
Increase and decrease in short-term bonds payable:
In RMB
Amortizat
Interest Current
Bond Face Bond Amount Opening Current ion of Closing
Issue date accrued at repaymen Other
name value maturity of issue Balance issue premium Balance
face value t
and
253
Luxshare Precision Industry Co., Ltd. Annual Report 2021
discount
Short-ter
April 500,000,0 508,715,2 508,715,2
m bonds 100.00 270 days
24,2020 00.00 77.78 77.78
payable
Short-ter
October 800,000,0 800,000,0 4,733,333 804,733,3
m bonds 100.00 270 days
22, 2021 00.00 00.00 .34 33.34
payable
Short-ter
Novembe 400,000,0 400,000,0 1,265,000 401,265,0
m bonds 100.00 90 days
r 17, 2021 00.00 00.00 .00 00.00
payable
Short-ter
Novembe 400,000,0 400,000,0 1,040,111 401,040,1
m bonds 100.00 90 days
r 25, 2021 00.00 00.00 .11 11.11
payable
2,100,000 508,715,2 1,600,000 7,038,444 508,715,2 1,607,038
Total -- -- --
,000.00 77.78 ,000.00 .45 77.78 ,444.45
Other descriptions:
45. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Item Closing Balance Opening Balance
Pledge loans 1,665,503,349.06 1,878,341.29
Mortgage loans 2,252,543,585.32 1,301,034,722.05
Guaranteed loans 72,759,492.87
Credit loans 1,034,289,765.84 192,286,175.07
Total 5,025,096,193.09 1,495,199,238.41
Descriptions on classification of long-term borrowings:
Other descriptions, including interest rate range:
46. Bonds payable
(1) Bonds payable
In RMB
Item Closing Balance Opening Balance
Convertible bonds 2,805,785,000.04 2,475,423,249.98
Total 2,805,785,000.04 2,475,423,249.98
254
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(2) Increase and decrease in bonds payable (excluding preferred shares, perpetual bonds and other
financial instruments classified as financial liabilities)
In RMB
Amortizat
Interest ion of Current Debt-to-e
Bond Face Bond Amount Opening Current Closing
Issue date accrued at premium repaymen quity
name value maturity of issue Balance issue Balance
face value and t changes
discount
Convertib
le bonds 3,000,000 March 11, 3,000,000 2,475,423 3,500,000 106,054,6 3,000,000 -424,861. 2,581,553
6 years
of ,000.00 2020 ,000.00 ,249.98 .00 77.72 .00 45 ,066.25
Luxshare
SpeedTec
h 230,100,0 March 10, 230,100,0 230,100,0 -5,868,06 224,231,9
3 years
convertibl 00.00 2021 00.00 00.00 6.21 33.79
e bonds
3,230,100 2,475,423 230,100,0 3,500,000 100,186,6 3,000,000 -424,861. 2,805,785
Total -- -- --
,000.00 ,249.98 00.00 .00 11.51 .00 45 ,000.04
(3) Descriptions on conditions and time for conversion of convertible bonds
The conversion period of the convertible bonds issued this time commences on the first trading day
six months after the end of the issue of the convertible bonds (November 9, 2020, i.e.the date when
the proceeds are transferred to the issuer’s account), and ends on the maturity date of the
convertible bonds (i.e.from May 10, 2021 (as the date of May 09, 2021 is a non-trading day, it
defers to May 10, 2021) to November 2, 2026 (it defers to the first trading day thereafter in case of
legal holidays or rest days;no additional interest will be charged to the payment during the deferred
period)).
(4) Descriptions on other financial instruments classified as financial liabilities
Basic information on preferred shares, perpetual bonds and other financial instruments outstanding at the end of the period.
Changes in preferred shares, perpetual bonds and other financial instruments outstanding at the end of the period.
In RMB
Outstanding Opening Increase Decrease Closing
financial
Quantity Book value Quantity Book value Quantity Book value Quantity Book value
instruments
Descriptions on the basis for classifying other financial instruments into financial liabilities
Other descriptions
255
Luxshare Precision Industry Co., Ltd. Annual Report 2021
47. Lease liabilities
In RMB
Item Closing Balance Opening Balance
Lease payment 336,593,292.75 157,440,735.91
Unrecognized financing costs -21,499,809.20 -12,978,050.00
Total 315,093,483.55 144,462,685.91
Other descriptions
48. Long-term payable
In RMB
Item Closing Balance Opening Balance
(1) Presentation of long-term payable by nature
In RMB
Item Closing Balance Opening Balance
Other descriptions:
(2) Special accounts payable
In RMB
Item Opening Balance Increase Decrease Closing Balance Reason
Other descriptions:
49. Long-term employee benefits payable
(1) Breakdown of Long-term employee benefits payable
In RMB
Item Closing Balance Opening Balance
(2) Changes in defined benefit plans
Present value of obligations in defined benefit plans:
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Plan assets:
In RMB
256
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item Amount recognized in the current period Amount recognized in the prior period
Net liabilities (net assets) of defined benefit plans
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Descriptions on the content of the defined benefit plans, the related risks, and the impact on the Company’s future cash flow, time
and uncertainty:
Descriptions on the major actuarial assumptions and sensitivity analysis results concerning the defined benefit plans:
Other descriptions:
50. Provisions
In RMB
Item Closing Balance Opening Balance Reason
Product quality warranty 923,738.96 1,360,598.63
Total 923,738.96 1,360,598.63 --
Other descriptions, including major assumptions and estimation descriptions related to significant provisions
51. Deferred income
In RMB
Item Opening Balance Increase Decrease Closing Balance Reason
Government grants 425,345,982.64 199,402,659.37 86,191,697.83 538,556,944.18
Total 425,345,982.64 199,402,659.37 86,191,697.83 538,556,944.18 --
Projects involving government grants:
In RMB
Amount Amount
New subsidy included in included in Amount of
Related to
Opening amount in non-operatin other cost offset in Other
Liabilities Closing Balance asset/
Balance the current g income in incomes in the current changes
income
period the current the current period
period period
Special
funds for
technologica
l 199,402,659. 85,648,103.2 Related to
413,834,324.74 527,588,880.88
transformati 37 3 asset
on and
industrial
upgrading
Land-related 11,511,657.90 543,594.60 10,968,063.30 Related to
257
Luxshare Precision Industry Co., Ltd. Annual Report 2021
refund asset
199,402,659. 86,191,697.8
Total 425,345,982.64 538,556,944.18
37 3
Other descriptions:
52. Other non-current liabilities
In RMB
Item Closing Balance Opening Balance
Deposit for lease of plant buildings 19,923.33
Government-backed fund 150,000,000.00
Other 1,207,763.79
Total 1,207,763.79 150,019,923.33
Other descriptions:
53. Share capital
In RMB
Increase and decrease (+, -)
Opening Shares Closing
New shares
Balance Stock dividend converted from Other Subtotal Balance
issued
capital reserve
6,999,768,186. 7,050,485,477.
Total shares 50,708,482.00 8,809.00 50,717,291.00
00 00
Other descriptions:
The Company’s share capital increased by RMB50,717,291.00 shares in the current period, including
50,708,482 shares exercised by the stock option incentive recipients independently, and 8,809 shares
converted from convertible bonds. After the said exercise and conversion, the Company’s share capital
increased to 7,050,485,477 shares.
54. Other equity instruments
(1) Basic information on preferred shares, perpetual bonds and other financial instruments outstanding at
the end of the period
None
(2) Changes in preferred shares, perpetual bonds and other financial instruments outstanding at the end of
the period
In RMB
258
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Outstanding Opening Increase Decrease Closing
financial
Quantity Book value Quantity Book value Quantity Book value Quantity Book value
instruments
Convertible 527,449,226. 527,358,025.
91,200.58
bonds 56 98
527,449,226. 527,358,025.
Total 91,200.58
56 98
Descriptions on the increase and decrease in other equity instruments in the current period, the reasons for the changes, and the basis
for relevant accounting treatment:
According to the Proposal on the Specific Plan for the Public Issue of Convertible Bond deliberated and
approved at the tenth conference of the fourth session of the Board of Directors of the Company, and the
Reply for Approval of Public Issue of Convertible Bonds by Luxshare Precision Industry Co., Ltd. (Zheng
Jian Xu Ke [2020] No.247) received by the Company from China Securities Regulatory Commission on
February 19, 2020, the Company was approved to publicly issue convertible bonds with a total face value
of RMB3 billion and a term of 6 years.The Company’s convertible bonds of RMB3 billion were listed for
trading on Shenzhen Stock Exchange on November 3, 2020, with an abbreviation name of “Luxshare
Convertible Bonds” and the bond code of “128136”.
Decrease in other equity instrument in the current period is represented as the decrease in convertible
bonds caused by conversing bonds to shares.
Other descriptions:
55. Capital reserve
In RMB
Item Opening Balance Increase Decrease Closing Balance
Capital premium (share
1,367,064,124.74 974,641,174.47 2,341,705,299.21
capital premium)
Other capital reserve 523,035,444.86 240,700,708.77 385,746,171.17 377,989,982.46
Total 1,890,099,569.60 1,215,341,883.24 385,746,171.17 2,719,695,281.67
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
Capital reserve - equity premium increased by RMB974,641,174.47 in the current period, including an
increase of RMB535,744,317.19 from stock option exercise, a transfer of RMB385,746,171.17 from other
capital reserve through stock option exercise, a conversion of RMB507,253.01 from convertible bonds, and
an increase of RMB52,643,433.10 by other ways.
Capital reserve - the increase in other capital reserve in the current period is due to the cost of share-based
payment increased by RMB240,700,708.77, and the decrease therein is due to the transfer of other capital
reserve to equity premium.
56. Treasury stock
In RMB
259
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item Opening Balance Increase Decrease Closing Balance
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
57. Other comprehensive income
In RMB
Amount recognized in the current period
Less:
amount
Less: amount
previously
previously
included
included in
in other
Amount of other
comprehe Attributabl Attributabl
income comprehensi
Opening nsive Less: e to the e to Closing
Item before tax ve income
Balance income income tax parent minority Balance
in the and
and expenses company shareholde
current transferred to
transferred after tax rs after tax
period profit or loss
to retained
for the
earnings
current
for the
period
current
period
I. Other comprehensive income
81,459,923. 96,214,73 14,508,81 81,705,91 163,165,
that cannot be reclassified into
45 4.80 7.00 7.80 841.25
profit or loss
Changes in fair value of other 81,459,923. 96,214,73 14,508,81 81,705,91 163,165,
investments in equity instruments 45 4.80 7.00 7.80 841.25
II. Other comprehensive income
-126,177,72 -105,391,5 -72,789,58 -32,601,99 -198,967
to be reclassified into profit or
6.51 78.31 6.03 2.28 ,312.54
loss
Translation difference of foreign -126,177,72 -105,391,5 -72,789,58 -32,601,99 -198,967
currency financial statements 6.51 78.31 6.03 2.28 ,312.54
-44,717,803. -9,176,843 14,508,81 8,916,331. -32,601,99 -35,801,
Total other comprehensive income
06 .51 7.00 77 2.28 471.29
Other descriptions, including those on the adjustment for conversion of the effective part of profit or loss of cash flow hedging into
the initial recognition amount of the hedged item:
58. Special reserve
In RMB
Item Opening Balance Increase Decrease Closing Balance
260
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Safety production fees 1,018,784.75 1,018,784.75
Total 1,018,784.75 1,018,784.75
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
59. Surplus reserve
In RMB
Item Opening Balance Increase Decrease Closing Balance
Statutory surplus reserve 733,067,797.73 252,093,708.88 985,161,506.61
Total 733,067,797.73 252,093,708.88 985,161,506.61
Description of surplus reserve, including those on increase and decrease for the current period and the reasons for the change:
60. Undistributed profits
In RMB
Item Current Period Prior Period
Undistributed profits at the end of last year before
17,996,149,257.73 11,764,987,172.39
adjustment
Undistributed profits at the beginning of the
17,996,149,257.73 11,764,987,172.39
period after adjustment
Add: Net profits attributable to the owners of the
7,070,520,386.57 7,225,462,752.58
parent company in the current period
Less: Apportion to statutory surplus reserve 252,093,708.88 370,732,766.55
Common stock dividends payable 773,891,489.58 644,615,942.06
Other 47,301.84 -21,048,041.37
Undistributed profits at the end of the period 24,040,637,144.00 17,996,149,257.73
Details of adjustment of undistributed profits at the beginning of the period:
1 ) The undistributed profits at the beginning of the period affected by the retroactive adjustment as stipulated in the Accounting
Standards for Business Enterprises and new regulations newly promulgated relating thereto amounted to RMB0.00.
2 ) The undistributed profits at the beginning of the period affected by the changes in accounting policies amounted to RMB0.00.
3 ) The undistributed profits at the beginning of the period affected by the correction of major accounting errors amounted to
RMB0.00.
4 ) The undistributed profits at the beginning of the period affected by changes in the scope of consolidation due to business
combination involving enterprises under control amounted to RMB0.00.
5 ) The undistributed profits at the beginning of the period affected by other adjustments amounted to RMB0.00.
261
Luxshare Precision Industry Co., Ltd. Annual Report 2021
61. Operating income and operating costs
In RMB
Amount recognized in the current period Amount recognized in the prior period
Item
Income Cost Income Cost
Principal business 152,257,625,983.60 133,514,500,539.03 91,793,434,304.26 75,153,299,514.88
Other business 1,688,471,806.80 1,533,835,753.85 707,824,907.28 616,707,534.70
Total 153,946,097,790.40 135,048,336,292.88 92,501,259,211.54 75,770,007,049.58
If the lower of audited nets profits including and excluding non-recurring profit or loss is negative
□ Yes √ No
Income related to information:
In RMB
Contract classification Segment 1 Segment 2 Total
By product
Including:
Computer connectivity
products and precision 7,856,595,729.78 7,856,595,729.78
components
Automotive connectivity
products and precision 4,142,675,174.19 4,142,675,174.19
components
Communication
connectivity products
3,269,476,642.60 3,269,476,642.60
and precision
components
Consumer electronics 134,637,995,600.46 134,637,995,600.46
Other connectors and
4,039,354,643.37 4,039,354,643.37
other business
By geographical areas of
operations
Including:
Domestic market 10,493,247,599.10 10,493,247,599.10
Overseas market 143,452,850,191.30 143,452,850,191.30
By markets or customers
Including:
By contract types
262
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Including:
By the period of
transferring products
Including:
By contract term
Including:
By sales channel
Including:
Direct sales 153,946,097,790.40 153,946,097,790.40
Total 153,946,097,790.40 153,946,097,790.40
Information related to performance obligations:
None
Information relating to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the incomes corresponding to the contracts signed whose performance has not been commenced or
completed amount to RMB0.00, of which RMB is expected to be recognized in, RMB is expected to be recognized in, and RMB is
expected to be recognized in.
Other descriptions
62. Taxes and surcharges
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Urban maintenance and construction tax 30,064,853.10 81,906,708.52
Education surcharges 14,616,280.44 45,589,613.48
Property tax 63,618,880.04 39,872,407.36
Land use tax 11,000,959.65 6,222,537.93
Vehicle and vessel use tax 80,571.50 1,594,540.33
Stamp duty 56,059,570.68 38,224,811.62
Local education surcharges 8,788,619.58 30,367,962.03
Other 9,582,322.15 6,997,157.54
Total 193,812,057.14 250,775,738.81
Other descriptions:
263
Luxshare Precision Industry Co., Ltd. Annual Report 2021
63. Selling expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Employee benefits 477,502,208.55 299,604,855.35
Storage and lease expenses 51,915,157.63 25,954,501.83
Travel expenses 7,698,136.97 10,523,347.33
Business entertainment expenses 23,190,907.73 20,355,079.41
Material expenditure 7,816,183.12 1,095,021.52
Transportation expenses 5,702,963.14 3,366,341.74
Consumables and miscellaneous purchases 47,560,953.11 5,583,719.60
Depreciation and amortization 8,650,043.25 5,752,130.91
Consulting fees 16,189,368.41 2,383,695.21
Office expenses 1,720,255.18 322,246.46
Other 141,961,986.71 102,106,936.22
Total 789,908,163.80 477,047,875.58
Other descriptions:
64. General expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Personnel benefits 2,040,701,402.50 1,460,800,684.09
Depreciation and amortization 636,539,244.20 251,028,760.61
Lease fee 54,750,988.28 62,104,694.48
Repair cost, miscellaneous purchase 103,842,977.48 125,433,880.08
Water and electricity 59,194,407.97 36,346,709.92
Travel and transportation expenses 29,058,122.92 26,568,577.76
Office expenses 187,814,810.66 115,440,868.62
Materials and consumption 303,188,844.16 164,759,105.43
Other expenses 326,817,985.33 221,469,927.64
Total 3,741,908,783.50 2,463,953,208.63
Other descriptions:
65. R&D expenses
In RMB
264
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item Amount recognized in the current period Amount recognized in the prior period
Personnel benefits 3,240,607,062.66 2,908,511,305.08
Mould and material cost 1,372,424,795.60 1,412,859,366.51
Consumables and miscellaneous 503,901,794.70 427,092,914.15
Depreciation and amortization 553,276,292.48 434,765,917.47
Repair and inspection 380,055,319.93 171,099,556.49
Service fees 119,031,894.75 73,318,711.87
Water and electricity 81,400,086.54 72,911,702.75
Transportation and travel expenses 31,528,985.33 29,788,220.49
Commercial insurance 2,078,437.06 4,911,888.67
Lease fee 61,161,176.98 47,239,062.80
Other expenses 296,834,556.71 162,306,490.05
Total 6,642,300,402.74 5,744,805,136.33
Other descriptions:
66. Financial expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Interest expenses 656,411,767.86 394,589,818.16
Including: interest cost of lease liabilities 30,548,145.32
Less: Interest income 361,773,700.27 144,116,091.77
Foreign exchange gains or losses 225,950,789.85 614,733,760.74
Other 34,077,016.61 39,620,655.76
Total 554,665,874.05 904,828,142.89
Other descriptions:
67. Other incomes
In RMB
Sources of other incomes Amount recognized in the current period Amount recognized in the prior period
Government grants 853,542,165.37 450,748,795.89
Total 853,542,165.37 450,748,795.89
68. Investment income
In RMB
265
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item Amount recognized in the current period Amount recognized in the prior period
Long-term equity investment income
29,737,321.95 24,799,841.42
accounted for using the equity method
Investment income from disposal of long-term
581,347.34 1,723,373.00
equity investment
Investment income from held-for-trading
706,688,280.62 508,055,516.99
financial assets during holding period
Gains from remeasurement of remaining
583,884.90
equities at fair value after loss of control
Difference between the original carrying
amount and the fair value of long-term equity
15,975,338.43
investment under cost method changed from
equity method
Gains from derecognition of financial assets
-171,521,013.80
measured at amortized cost.
Income from wealth management 107,341,490.30 113,778,334.95
Total 689,386,649.74 648,357,066.36
Other descriptions:
69. Net exposure hedging income
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Other descriptions:
70. Income from changes in fair value
In RMB
Sources of income from changes in fair
Amount recognized in the current period Amount recognized in the prior period
value
Held-for-trading financial assets -115,737,751.66 329,044,852.43
Including: Income from changes in fair
-115,737,751.66 329,044,852.43
value of derivative financial instruments
Total -115,737,751.66 329,044,852.43
Other descriptions:
71. Impairment losses of credit
In RMB
266
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item Amount recognized in the current period Amount recognized in the prior period
Bad debt loss of other receivables -2,046,557.86 -852,545.23
Bad debt loss of notes receivable -3,247.78
Bad debt loss of accounts receivable -24,825,699.05 -7,737,455.44
Total -26,875,504.69 -8,590,000.67
Other descriptions:
72. Impairment losses of assets
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
II. Loss of inventory depreciation and
impairment loss of contract performance -158,892,591.11 -60,363,851.75
cost
V. Impairment loss of fixed assets -3,897,744.01 -78,925,059.30
Total -162,790,335.12 -139,288,911.05
Other descriptions:
73. Income from disposal of assets
In RMB
Sources of income from asset disposal Amount recognized in the current period Amount recognized in the prior period
Loss on disposal of fixed assets -45,249,998.44 -2,309,694.02
Loss on disposal of intangible assets -16,594.21
Total -45,266,592.65 -2,309,694.02
74. Non-operating income
In RMB
Amount included in
Amount recognized in the Amount recognized in the prior
Item non-recurring profit or loss for
current period period
the period
Income from compensation for
1,860,909.33 4,109,194.81 1,860,909.33
breach of contract
Income from asset retirement 1,339,094.50 7,173,590.23 1,339,094.50
Income from insurance
622,245.83 622,245.83
indemnity
Other 17,274,286.94 10,649,503.20 17,274,286.94
267
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 21,096,536.60 21,932,288.24 21,096,536.60
Government grants included in current profit or loss:
In RMB
Whether the
subsidy affect Whether it is Amount in Amount in
Reasons for Nature and Related to
Grant item Granter the profit or a special the current the prior
grant type asset/ income
loss of the grant period period
current year
Other descriptions:
75. Non-operating expenses
In RMB
Amount included in
Amount recognized in the Amount recognized in the prior
Item non-recurring profit or loss for
current period period
the period
External donation 1,573,490.75 8,826,883.90 1,573,490.75
Asset retirement loss 19,504,908.68 42,346,561.68 19,504,908.68
Compensation, liquidated
17,481,196.86 368,635.63 17,481,196.86
damages and fines
Other 7,112,837.76 2,414,711.57 7,112,837.76
Total 45,672,434.05 53,956,792.78 45,672,434.05
Other descriptions:
76. Income tax expenses
(1) Income tax expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Current income tax expense 607,416,066.01 486,267,875.03
Deferred income tax expense -285,177,422.37 158,497,053.67
Total 322,238,643.64 644,764,928.70
(2) Reconciliation of income tax expenses to the accounting profit
In RMB
Item Amount recognized in the current period
Total profits 8,142,848,949.83
268
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Income tax expense calculated based on statutory/applicable tax
1,221,427,342.48
rate
Effect of different tax rates of subsidiaries operating in other
-339,827,146.62
jurisdictions
Effect of adjustment on income tax for prior period 8,937,497.60
Effect of non-deductible cost, expense and loss 22,968,140.94
Effect of utilizing deductible loss not recognized for deferred tax
-8,107,745.64
assets for prior period
Effect of deductible temporary difference or deductible loss not
248,819,876.05
recognized for deferred tax assets for the current period
Additional deduction of R&D expenses (presented in negative) -532,636,196.66
Difference from exercise of stock option -310,920,312.23
Additional deduction of expenses used for disable persons -620,631.77
Other 12,197,819.49
Income tax expenses 322,238,643.64
Other descriptions
77. Other comprehensive income
Please refer to Note VII, 57.
78. Items in the cash flow statement
(1) Other cash received related to operating activities
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Special subsidies and grants 941,612,664.44 620,035,223.62
Lease income 83,010,927.51 58,450,087.37
Interest income 361,773,700.27 144,116,091.77
Non-operating income 19,499,157.07 14,757,798.01
Recovery of current accounts and
1,240,625,072.70 341,220,838.10
disbursements
Total 2,646,521,521.99 1,178,580,038.87
Descriptions on other cash received related to operating activities:
(2) Other cash paid related to operating activities
In RMB
269
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item Amount recognized in the current period Amount recognized in the prior period
Selling expenses 272,687,431.13 171,690,889.32
General expenses 836,627,173.21 812,592,804.46
R&D expenses 983,858,805.26 971,330,641.74
Non-operating expenses 9,538,603.31 11,610,231.10
Inter-company transactions 239,332,761.28 70,545,074.10
Handling charges 34,077,016.62 39,620,655.76
Other 14,883,864.59 47,051,077.53
Total 2,391,005,655.40 2,124,441,374.01
Descriptions on other cash paid related to operating activities:
(3) Other cash received related to investing activities
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Obtain net cash received by subsidiaries 4,665,590,364.12
Total 4,665,590,364.12
Descriptions on other cash received related to investing activities:
(4) Other cash paid related to investing activities
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Income tax levied on equity transactions 371,929,911.39
Supplier borrowings 30,000,000.00
Other 1,208,914.50
Total 403,138,825.89
Descriptions on other cash paid relating to investing activities:
(5) Other cash received related to financing activities
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Short-term financing bonds 3,799,202,739.72 1,500,000,000.00
Convertible bonds 228,949,500.00 2,985,600,000.00
Taxes withheld from shareholder for
671,813,299.36
reduction of shares
270
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Other 5,965,056.90
Total 4,705,930,595.98 4,485,600,000.00
Descriptions on other cash received related to financing activities:
(6) Other cash paid related to financing activities
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Short-term financing bonds 2,700,000,000.00
Taxes prepaid for shareholder for reduction
671,813,299.36
of shares
Lease fee 82,320,708.73
Financing charges 7,388,317.66 14,511,270.50
Total 3,461,522,325.75 14,511,270.50
Descriptions on other cash paid related to financing activities:
79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
In RMB
Supplementary information Current period Prior period
1 . Reconciliation of net profit to cash flow
-- --
from operating activities:
Net profits 7,820,610,306.19 7,491,014,735.42
Add: Provision for impairment losses of
189,665,839.81 147,878,911.72
assets
Depreciation of fixed assets, depletion of oil
and gas assets, depreciation of bearer 4,822,202,794.73 2,212,448,100.25
biological assets
Depreciation of right of use assets 105,949,651.47
Amortization of intangible assets 119,810,187.02 66,781,202.42
Amortization of long-term prepaid expenses 246,064,358.16 137,587,798.08
Loss from disposal of fixed assets, intangible
assets and other long-term assets (“-” means 45,266,592.65 2,309,694.02
income)
Loss from fixed assets retirement (“-” means
18,165,814.18 34,858,852.91
income)
271
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Loss from changes in fair value (“-” means
115,737,751.66 -329,044,852.43
income)
Financial expenses (“-” means income) 656,411,767.86 394,589,818.16
Investment loss (“-” means income) -689,386,649.74 -648,357,066.36
Decrease in deferred income tax assets (“-”
-365,926,458.23 -216,359,243.84
means increase)
Increase in deferred income tax liabilities
306,000,254.91 367,907,819.95
(“-” means decrease)
Decrease in inventories (“-” means increase) -5,400,711,336.99 -5,549,633,761.96
Decrease in operating receivables (“-” means
-13,885,780,461.98 -1,149,269,162.66
increase)
Increase in operating accounts payable (“-”
13,180,686,505.30 3,910,498,640.37
means decrease)
Other
Net cash flow from operating activities 7,284,766,917.00 6,873,211,486.05
2 . Significant investing and financing
activities that do not involve cash receipts -- --
and payments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets acquired under finance leases
3 . Net changes in cash and cash equivalents: -- --
Closing balance of cash 8,921,536,728.08 10,464,804,451.34
Less: Opening balance of cash 10,464,804,451.34 6,147,339,924.26
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -1,543,267,723.26 4,317,464,527.08
(2) Net cash paid to acquire subsidiaries for the period
In RMB
Amount
Cash or cash equivalents paid in current period for business
6,020,000,000.00
combination incurred in current period
Including: --
Luxcase Precision Technology (Yancheng) Co., Ltd. 6,000,000,000.00
Zhejiang Puxing Electronic Technology Co., Ltd. 20,000,000.00
272
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Less: Cash and cash equivalents held by subsidiaries at the date of
4,525,053,713.82
purchase
Including: --
Luxcase Precision Technology (Yancheng) Co., Ltd. 4,522,153,794.04
Zhejiang Puxing Electronic Technology Co., Ltd. 2,899,919.78
Including: --
Net cash paid to acquire subsidiaries 1,494,946,286.18
Other descriptions:
As Luxcase Precision Technology (Yancheng) Co., Ltd.was acquired in the form of contributing additional
capital to increase shares, the cash and cash equivalents held by this subsidiary on the acquisition date are
presented in other cash received related to investing activities.
(3) Net cash received from disposal of subsidiaries in the current period
In RMB
Amount
Cash or cash equivalents received from disposal of subsidiaries in
17,500,000.00
the current period
Including: --
Wuxi Huihong Electronic Co., Ltd. 17,500,000.00
Less: Cash and cash equivalents held by subsidiaries on the date of
1,081,786.29
loss of control
Including: --
Wuxi Huihong Electronic Co., Ltd. 1,081,786.29
Including: --
Luxshare Precision Industry (Xi’an) Co., Ltd. 16,418,213.71
Other descriptions:
(4) Composition of cash and cash equivalents
In RMB
Item Closing Balance Opening Balance
I. Cash 8,921,536,728.08 10,464,804,451.34
Including: Cash on hand 323,716.04 9,919,560.76
Bank deposits available for payment at any
8,921,213,012.04 10,454,884,890.58
time
III. Closing balance of cash and cash
8,921,536,728.08 10,464,804,451.34
equivalents
273
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Other descriptions:
80. Notes to items in statement of changes in owners’ equity
Descriptions on the name of “other” items and the amount of adjustment for closing balance in the previous year
None
81. Assets with restricted ownership or right of use
In RMB
Item Closing book value Reasons for restriction
Cash and bank balances 5 ,283,081,458.35 Issue of notes and letter of credit
Notes receivable 51 ,933,961.58 Financing from pledge of notes receivable
Fixed assets 1 ,176,330,347.47 Financing from mortgage of fixed assets
Intangible assets 777 ,621,389.62 Financing from mortgage of land
Financing from pledge of held-for-trading
Held-for-trading financial assets 663 ,680,000.00
financial assets
Financing from pledge of accounts
Accounts receivable 49 ,644,035.79
receivable
Equity investment 5 ,809,775,702.93 Financing from pledge of equity
Total 13 ,812,066,895.74 --
Other descriptions:
82. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
Closing balance in foreign
Item Exchange rate Closing balance in RMB
currency
Cash and bank balances -- -- 3 ,809,946,844.03
Including: USD 549 ,726,199.35 6.3757 3 ,504,889,329.20
EUR 1 ,016,405.17 7.2197 7 ,338,140.43
HKD 18 ,613.71 0.8176 15 ,218.57
JPY 148 ,105,516.38 0.0554 8 ,207,267.19
TWD 935 ,408,419.98 0.2302 215 ,331,018.28
VND 34 ,638,767,833.33 0.0003 10 ,391,630.35
KRW 1 ,627,507,833.33 0.0054 8 ,788,542.30
274
Luxshare Precision Industry Co., Ltd. Annual Report 2021
GBP 21 ,204.00 8.6064 182 ,490.11
RUB 640 ,224,387.85 0.0856 54 ,803,207.60
Accounts receivable -- -- 27 ,826,548,538.48
Including: USD 4 ,361,041,363.31 6.3757 27 ,804,691,420.03
EUR 2 ,156,059.22 7.2197 15 ,566,100.77
HKD
JPY 3 ,104,794.91 0.0554 172 ,052.21
TWD 22 ,936,625.98 0.2302 5 ,280,011.30
VND 48 ,964,833.33 0.0003 14 ,689.45
KRW 152 ,641,616.67 0.0054 824 ,264.73
Long-term borrowings -- -- 378 ,468,877.94
Including: USD 19 ,502,777.91 6.3757 124 ,343,861.14
EUR
HKD
TWD 1 ,103,931,437.01 0.2302 254 ,125,016.80
Other receivables 19 ,928,358.09
Including: USD 1 ,429,404.56 6.3757 9 ,113,454.66
EUR 67 ,468.99 7.2197 487 ,105.87
JPY 13 ,950,414.69 0.0554 773 ,062.23
TWD 23 ,216,441.01 0.2302 5 ,344,424.72
VND 6 ,632,207,366.67 0.0003 1 ,989,662.21
KRW 240 ,181,085.19 0.0054 1 ,296,977.86
GBP 14 ,146.00 8.6064 121 ,746.13
RUB 9 ,368,275.93 0.0856 801 ,924.42
Short-term borrowings 2 ,218,863,494.96
Including: USD 341 ,515,779.70 6.3757 2 ,177,402,156.62
TWD 180 ,110,070.98 0.2302 41 ,461,338.34
Accounts payable 28 ,306,154,765.48
Including: USD 4 ,348,182,333.27 6.3757 27 ,722,706,102.23
EUR 246 ,432.18 7.2197 1 ,779,166.41
HKD 49 ,854.11 0.8176 40 ,760.72
JPY 187 ,198,720.98 0.0554 10 ,373,617.12
TWD 33 ,632,805.99 0.2302 7 ,742,271.94
VND 1 ,875,038,915,500.00 0.0003 562 ,511,674.65
275
Luxshare Precision Industry Co., Ltd. Annual Report 2021
KRW 29 ,876,448.15 0.0054 161 ,332.82
GBP 1 ,288.00 8.6064 11 ,085.04
RUB 9 ,681,712.03 0.0856 828 ,754.55
Other payables 39 ,768,243.29
Including: USD 3 ,797,438.16 6.3757 24 ,211,326.47
JPY 7 ,919,377.42 0.0554 438 ,852.30
TWD 39 ,028,634.01 0.2302 8 ,984,391.55
VND 16 ,719,194,666.67 0.0003 5 ,015,758.40
KRW 20 ,148,111.11 0.0054 108 ,799.80
GBP 116 ,589.00 8.6064 1 ,003,411.57
RUB 66 ,626.17 0.0856 5 ,703.20
Other descriptions:
(2) Descriptions on overseas business entities, including, with respect to significant overseas business
entities, disclosure of their overseas main business place, functional currency and selection basis, and the
reasons for changes in functional currency (if any).
□ Applicable √ N/A
83. Hedging
Disclosure of the qualitative and quantitative information of the hedged items, relevant hedging instruments and hedged risks
according to the hedging categories:
84. Government grants
(1) Basic information of government grants
In RMB
Amount included in current
Category Amount Presentation item
profit or loss
Related to asset 538 ,556,944.18 Deferred income 86 ,191,697.83
Related to income 767 ,350,467.54 Other income 767 ,350,467.54
(2) Return of government grants
□ Applicable √ N/A
Other descriptions:
276
Luxshare Precision Industry Co., Ltd. Annual Report 2021
85. Others
VIII. Changes in scope of consolidation
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control in the current period
In RMB
Income of the Net profit of
acquiree from the acquiree
Basis for
Time point of Cost of Equity Method of the from the
Name of Acquisition determination
equity equity acquisition equity acquisition acquisition
acquiree date of acquisition
acquisition acquisition ratio acquisition date to the date to the
date
end of the end of the
period period
Luxcase
Precision
6 ,000,000,00 Cash Obtainment 49 ,727,123,0 1 ,092,231,63
Technology Feb.1, 2021 51.83 % Feb.1, 2021
0.00 acquisition of control 10.93 8.01
(Yancheng)
Co., Ltd.
Caldigit
59 ,570,545.9 Control under Obtainment 211 ,936,482. 17 ,429,974.9
Holding(Cay Jan.1, 2021 40.00 % Jan.1, 2021
7 agreement of control 41 0
man)
Taihan
131 ,123,350. Control under Obtainment 220 ,040,667. 11 ,773,116.3
Precision Aug.1, 2021 26.71 % Aug.1, 2021
23 agreement of control 42 0
Co., Ltd.
Zhejiang
Puxing
20 ,000,000.0 Cash Obtainment 19 ,726,196.3
Electronic Aug.1, 2021 70.00 % Aug.1, 2021 -1,018,429.21
0 acquisition of control 3
Technology
Co., Ltd.
Other descriptions:
(2) Combination costs and goodwill
In RMB
Luxcase Precision Zhejiang Puxing
Caldigit Taihan Precision Co.,
Combination costs Technology (Yancheng) Electronic Technology
Holding(Cayman) Ltd.
Co., Ltd. Co., Ltd.
--Cash 6 ,000,000,000.00 20 ,000,000.00
-- Fair value of non-cash
277
Luxshare Precision Industry Co., Ltd. Annual Report 2021
assets
-- Fair value of issued or
assumed debts
-- Fair value of issued
equity securities
-- Fair value of
contingent consideration
-- Fair value of equity
shares held before the
59 ,570,545.97 131 ,123,350.23
acquisition date at the
acquisition date
-- Other
Total of combination cost 6 ,000,000,000.00 59 ,570,545.97 131 ,123,350.23 20 ,000,000.00
Less: share of fair value
of identifiable net assets 5 ,185,215,199.04 17 ,804,963.56 121 ,150,477.35 19 ,195,544.49
acquired
Amount of
goodwill/combination
cost less than the share of 814 ,784,800.96 41 ,765,582.41 9 ,972,872.88 804 ,455.51
fair value of identifiable
net assets acquired
Descriptions on methods for determining the fair value of combination costs, contingent considerations and changes therein:
Main reasons for the formation of large goodwill:
Other descriptions:
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
In RMB
Luxcase Precision
Zhejiang Puxing Electronic
Technology (Yancheng) Co., Caldigit Holding(Cayman) Taihan Precision Co., Ltd.
Technology Co., Ltd.
Ltd.
Fair value at Book value at Fair value at Book value at Fair value at Book value at Fair value at Book value at
acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition
date date date date date date date date
24 ,406,284,7 23 ,701,473,3 109 ,907,469. 91 ,423,949.8 670 ,860,493. 569 ,899,146. 46 ,757,216.9 46 ,757,216.9
Assets:
04.42 20.22 77 1 18 98 3 3
Cash and
10 ,672,117,0 10 ,672,117,0 18 ,271,881.6 18 ,271,881.6 143 ,991,433. 143 ,991,433.
bank 2 ,899,919.78 2 ,899,919.78
36.93 36.93 8 8 32 32
balances
Accounts 4 ,222,834,97 4 ,222,834,97 12 ,095,772.4 12 ,095,772.4 95 ,429,725.6 95 ,429,725.6 13 ,607,880.3 13 ,607,880.3
278
Luxshare Precision Industry Co., Ltd. Annual Report 2021
receivable 1.37 1.37 4 4 0 0 3 3
2 ,289,035,01 2 ,289,035,01 57 ,340,063.3 57 ,340,063.3 47 ,675,909.1 47 ,675,909.1 12 ,600,399.9 12 ,600,399.9
Inventories
5.01 5.01 6 6 6 6 4 4
5 ,061,624,81 4 ,670,679,67 220 ,051,363. 210 ,119,614. 14 ,318,313.0 14 ,318,313.0
Fixed assets 92 ,963.74 92 ,963.74
0.68 8.66 44 64 6 6
Intangible 506 ,818,185. 192 ,951,933. 18 ,490,480.0 89 ,819,609.8
6 ,960.10 3 ,665,418.20 2 ,935.14 2 ,935.14
assets 85 67 6 0
93 ,038,799.1 93 ,038,799.1 15 ,061,693.4 15 ,061,693.4
Prepayments 2 ,767,778.62 2 ,767,778.62 508 ,290.24 508 ,290.24
2 2 2 2
1 ,560,815,88 1 ,560,815,88 58 ,830,758.4 53 ,955,352.6
Other assets 848 ,529.87 848 ,529.87 2 ,819,478.44 2 ,819,478.44
5.46 5.46 4 4
14 ,401,412,3 14 ,225,209,4 65 ,395,061.3 59 ,879,578.8 217 ,326,768. 222 ,542,721. 19 ,335,010.5 19 ,335,010.5
Liabilities:
33.05 87.00 2 8 03 14 2 2
400 ,701,290. 400 ,701,290. 41 ,789,697.7 41 ,789,697.7
Borrowings
05 05 0 0
Accounts 12 ,010,441,5 12 ,010,441,5 58 ,506,728.0 58 ,506,728.0 59 ,344,981.7 59 ,344,981.7 11 ,016,405.1 11 ,016,405.1
payable 35.39 35.39 0 0 4 4 0 0
Deferred tax 176 ,202,846. 33 ,581,279.5 12 ,175,148.6
5 ,515,482.42 1 ,287,940.09 1 ,287,940.09
liabilities 05 0 3
Other 602 ,710,283. 602 ,710,283. 23 ,916,815.0 50 ,538,898.9
937 ,618.87 937 ,618.87 1 ,970,314.49 1 ,970,314.49
payables 41 41 0 7
Other 1 ,211,356,37 1 ,211,356,37 58 ,693,994.0 58 ,693,994.1
435 ,232.03 435 ,232.01 5 ,060,350.84 5 ,060,350.84
liabilities 8.15 8.15 9 0
10 ,004,872,3 9 ,476,263,83 44 ,512,408.4 31 ,544,370.9 453 ,533,725. 347 ,356,425. 27 ,422,206.4 27 ,422,206.4
Net assets
71.37 3.22 5 3 15 84 1 1
Less:
4 ,819,657,17 4 ,565,010,05 26 ,707,444.8 18 ,926,622.5 332 ,383,247. 254 ,568,625.
minority 8 ,226,661.92 8 ,226,661.92
2.33 2.64 9 0 80 32
interest
Net assets 5 ,185,215,19 4 ,911,253,78 17 ,804,963.5 12 ,617,748.4 121 ,150,477. 92 ,787,800.5 19 ,195,544.4 19 ,195,544.4
acquired 9.04 0.58 6 3 35 2 9 9
Methods for determining the fair value of identifiable assets and liabilities:
Contingent liabilities of the acquiree in business combination:
Other descriptions:
(4) Gains or losses arising from the re-measurement of equity held before the acquisition date at fair value
Where there is any transaction that realizes business combination step by step through multiple transactions and obtains control right
in the reporting period
□ Yes √ No
279
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(5) Relevant descriptions on the combination consideration or the fair value of the identifiable assets and
liabilities of the acquiree that cannot be reasonably determined on the acquisition date or at the end of the
current period
(6) Other descriptions
2. Business combination involving enterprises under common control
(1) Business combination involving enterprises under common control in the current period
In RMB
Basis for Income of the Net profit of
business combined the combined Income of the Net profit of
Basis for
Equity ratio combination party from party from combined the combined
Name of determining
obtained in involving Combination the beginning the beginning party during party during
combined the
business enterprises date of the current of the current the the
party combination
combination under period to the period to the comparison comparison
date
common combination combination period period
control date date
Other descriptions:
(2) Combination costs
In RMB
Combination costs
--Cash
-- Book value of non-cash assets
-- Book value of issued and assumed liabilities
-- Par value of issued equity securities
-- Contingent consideration
Descriptions on contingent considerations and changes therein:
Other descriptions:
(3) Book value of assets and liabilities of the acquiree at the combination date
In RMB
Combination date End of last period
Assets:
Cash and bank balances
280
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Accounts receivable
Inventories
Fixed assets
Intangible assets
Liabilities:
Borrowings
Accounts payable
Net assets
Less: minority interest
Net assets acquired
Contingent liabilities assumed by acquiree in business combinations:
Other descriptions:
3. Counter purchase
Basic information of transactions, basis for forming a reverse purchase, if assets and liabilities retained by listed company constitute
a business and its basis, determination of combination cost, adjustments on and calculation of equity treated as equity transactions:
4. Disposal of subsidiaries
Single disposal of investments in subsidiaries, i.e.the loss of control
√ Yes □ No
In RMB
Differen Amount
ce Determin of other
between ation compreh
the Gain or method ensive
Book
Basis for disposal Proporti Fair loss from and main income
value of
determin price and on of value of re-measu assumpti related to
Time the
Name of Equity Equity Equity ing the the share residual residual rement on for equity
point of residual
subsidiar disposal disposal disposal time of net equity on equity on of fair investme
losing equity on
y price ratio method point of assets of the date the date residual value of nt of the
control the date
losing the of losing of losing equity at residual subsidiar
of losing
control subsidiar control control fair equity on y
control
y at the value the date transferr
consolid of losing ed into
ated control investme
financial nt profit
281
Luxshare Precision Industry Co., Ltd. Annual Report 2021
statemen or loss
t level
correspo
nding to
the
disposal
of
investme
nt
Wuxi
Huihong Change
17 ,500,0 Feb.28, 581 ,347.
Electroni 68.97 % Sold of equity
00.00 2021 34
c Co., shares
Ltd.
Other descriptions:
Whether there is any situation where the investment in subsidiaries is disposed step by step through multiple transactions and the
control is lost in the current period
□ Yes √ No
5.Changes in consolidation scope for other reasons
Descriptions on changes in the scope of consolidation for other reasons (such as the establishment of new subsidiaries, liquidation of
subsidiaries, etc.)and related situations:
The Company’s changes in scope of consolidation caused by newly established subsidiaries in 2021 are
stated as follows:
Company Date of establishment
Luxis Technology Limited April 23, 2021
Yancheng Luxshare Precision Industry Co., Ltd. May 27, 2021
Hangzhou Xuntao Technology Co., Ltd. June 28, 2021
Rugao Luxshare Corporate Management Services Partnership
February 8, 2021
(Limited Partnership)
Lianxun Intelligent Equipment (Rugao) Co., Ltd. June 8, 2021
Luxshare Precision Technology(Xi’an) Co., Ltd. June 7, 2021
Luxshare Electronic Technology (Enshi) Co., Ltd. May 25, 2021
Luxis Technology (Kunshan) Co., Ltd. May 26, 2021
Luxshare Precision Investment Co.,Ltd. August 27, 2021
Yancheng Luxshare Corporate Management Services
September 18, 2021
Partnership (Limited Partnership)
Luxshare Intelligent Equipment (Yancheng) Co., Ltd. October 20, 2021
282
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxis Precision Intelligent Manufacture (Kunshan) Co., Ltd. July 2, 2021
Luxshare Intelligent Manufacture Electornic Service
August 16, 2021
(Kunshan) Co.,Ltd.
Liding Electronic Technology (Dongguan) Co.,Ltd. August 10, 2021
Luxshare Precision Technology(Nanjing) Co.,Ltd. October 19, 2021
Henan Lide Precision Industry Co., Ltd. July 27, 2021
Changzhi Luxshare Precision Industry Co., Ltd. November 3, 2021
The Company’s changes in scope of consolidation caused by deregistration of subsidiaries in 2021 are
stated as follows:
Company Date of deregistration
Ji’an Jizhou District Luxshare Electronic Co., Ltd. October 19, 2021
Luxshare-ICT International Cable, Inc. March 30, 2021
Speedtech (LS-ICT) Co., Limited November 2, 2021
LUXSHARE-ICT INTERNATIONAL B.V. April 6, 2021
6. Others
IX. Equity in other entities
1. Equity in subsidiaries
(1) Composition of the enterprise group
Name of Main place of Place of Nature of Shareholding ratio Method of
subsidiary business registration business Direct Indirect acquisition
Luxshare
Precision Investment
Hong Kong Hong Kong 100 .00% Establishment
Technology Co., consulting
Ltd.
Taiwan Luxshare Marketing
Taiwan Taiwan 100.00 % Establishment
Precision Limited business
Luxshare ICT, Marketing
USA USA 100.00 % Establishment
Inc. business
Luxshare-ICT Marketing
UK UK 100.00 % Establishment
Europe Limited business
283
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare
Hong Kong Hong Kong Trade 100.00 % Establishment
Precision Limited
Yunding
Investment
Technology Co., Hong Kong Hong Kong 100.00 % Establishment
consulting
Ltd.
Business
Huzhou Jiuding combination not
Processing and
Electronic Co., Huzhou Huzhou 100.00 % involving
manufacturing
Ltd. enterprises under
common control
LUXSHARE-ICT Marketing
Japan Japan 80.00 % Establishment
Japan Ltd. business
Korea
Marketing
LuxshareICT Co., Korea Korea 100.00 % Establishment
business
Ltd
Luxshare India Processing and
India Chennai 100.00 % Establishment
Private Limited manufacturing
Luxshare
Precision Investment
Hong Kong Hong Kong 100.00 % Establishment
Investment consulting
Co.,Ltd.
Luxis Technology Investment
Hong Kong Hong Kong 100.00 % Establishment
Limited consulting
Luxshare Liantao Processing and
India India 100.00 % Establishment
(India) Co., Ltd. manufacturing
Processing and
SUK PLASTICS Romania Romania 100.00 % Establishment
manufacturing
Business
combination not
ICT-LANTO
Hong Kong Hong Kong Trade 100.00 % involving
LIMITED(HK)
enterprises under
common control
Business
combination not
Processing and
SpeedTech Corp. Taiwan Taiwan 31.47 % involving
manufacturing
enterprises under
common control
Business
Processing and combination not
Castle Rock, Inc. Taiwan Xinbei City 12.59 %
manufacturing involving
enterprises under
284
Luxshare Precision Industry Co., Ltd. Annual Report 2021
common control
Business
combination not
Cyber Acoustics, Processing and
Taiwan Taiwan 22.03 % involving
LLC(USA) manufacturing
enterprises under
common control
Business
combination not
Caldigit Holding Processing and
Taiwan Taiwan 12.59 % involving
Limited manufacturing
enterprises under
common control
Business
Taiqiao combination not
Investment
Investment Co., Taiwan Taiwan 31.47 % involving
consulting
Ltd. enterprises under
common control
Business
combination not
Taihan Precision Processing and
Taiwan Taiwan 9.22 % involving
Co., Ltd. manufacturing
enterprises under
common control
Henan Lide
Processing and
Precision Industry Henan province Henan province 58.88 % Establishment
manufacturing
Co., Ltd.
Luxshare-ICT
Processing and
(Vietnam) Vietnam Vietnam 100.00 % Establishment
manufacturing
Limited
Luxshare
Precision Processing and
Vietnam Vietnam 100.00 % Establishment
(Yunzhong) Co., manufacturing
Ltd.
Luxshare-ICT
Processing and
(NGHE AN) Vietnam Vietnam 100.00 % Establishment
manufacturing
Limited
Kunshan
Luxshare Processing and
Kunshan Kunshan 100.00 % Establishment
Precision Industry manufacturing
Co., Ltd.
Kunshan
Processing and
Luxshare Kunshan Kunshan 100.00 % Establishment
manufacturing
Precision Mould
285
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Co., Ltd.
Luxshare
Precision Industry Processing and
Baoding Baoding 100.00 % Establishment
(Baoding) Co., manufacturing
Ltd.
Xuancheng
Luxshare Processing and
Anhui Xuancheng 100.00 % Establishment
Precision Industry manufacturing
Co., Ltd.
Luxsahre Electric
Processing and
(Shanghai) Co., Shanghai Shanghai 88.00 % Establishment
manufacturing
Ltd.
Luxshare
Precision Industry Processing and
Liyang Liyang 100.00 % Establishment
(Jiangsu) Co., manufacturing
Ltd.
Yancheng
Luxshare Processing and
Yancheng Yancheng 100.00 % Establishment
Precision Industry manufacturing
Co., Ltd.
Business
combination not
Lanto Electronic Processing and
Kunshan Kunshan 100.00 % involving
Limited manufacturing
enterprises under
common control
Business
Bozhou Lanto combination not
Processing and
Electronic Bozhou Bozhou 100.00 % involving
manufacturing
Limited enterprises under
common control
Bozhou Xuntao
Processing and
Electronic Bozhou Bozhou 100.00 % Establishment
manufacturing
Limited
Suining Luxshare
Processing and
Precision Industry Suining Suining 100.00 % Establishment
manufacturing
Co., Ltd.
Business
Merry Electronics combination not
Processing and
(Suzhou) Co., Suzhou Suzhou 51.00 % involving
manufacturing
Ltd. enterprises under
common control
286
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Beijing Luxshare
Acoustic Processing and
Beijing Beijing 100.00 % Establishment
Technology Co., manufacturing
Ltd.
Luxshare
Processing and
Precision Industry Changzhi Changzhi 100.00 % Establishment
manufacturing
(Shanxi) Co., Ltd.
Changzhi
Luxshare Processing and
Changzhi Changzhi 100.00 % Establishment
Precision Industry manufacturing
Co., Ltd.
Suzhou Liantao
Processing and
Electronic Co., Suzhou Suzhou 100.00 % Establishment
manufacturing
Ltd.
Wan’an Xiexun
Processing and
Electronic Co., Wan’an Wan’an 100.00 % Establishment
manufacturing
Ltd.
Business
combination
Xiexun Electronic Processing and
Ji’an Ji’an 100.00 % involving
(Ji'an) Co., Ltd. manufacturing
enterprises under
common control
ASAP
Technology Processing and
Ji’an Ji’an 100.00 % Establishment
(Jiangxi) Co., manufacturing
Ltd.
Business
Yongxin County
combination not
Boshuo Processing and
Yongxin County Yongxin County 100.00 % involving
Electronic Co., manufacturing
enterprises under
Ltd.
common control
Xinyu Xiexun
Processing and
Electronic Co., Xinyu Xinyu 100.00 % Establishment
manufacturing
Ltd.
Jiangxi ASAP
Processing and
Electronic Co., Ji’an Ji’an 100.00 % Establishment
manufacturing
Ltd.
Business
Fujian JK Wiring
Processing and combination not
Systems Co., Fuzhou Fuzhou 55.00 %
manufacturing involving
Ltd..
enterprises under
287
Luxshare Precision Industry Co., Ltd. Annual Report 2021
common control
Jianou JK Wiring Processing and
Jian’ou Jian’ou 55.00 % Establishment
Systems Co., Ltd. manufacturing
Luxshare Business
Electronic combination not
Processing and
Technology Kunshan Kunshan 100.00 % involving
manufacturing
(Kunshan) Co., enterprises under
Ltd. common control
Shenzhen
Luxshare Processing and
Shenzhen Shenzhen 100.00 % Establishment
Acoustics manufacturing
Technology Ltd.
Fengshun
Luxshare Processing and
Fengshun Fengshun 100.00 % Establishment
Precision Industry manufacturing
Co., Ltd.
Luxshare
Processing and
Precision Industry Chuzhou Chuzhou 100.00 % Establishment
manufacturing
(Chuzhou), Ltd.
Business
SuK combination not
Processing and
Kunststofftechnik Germany Germany 100.00 % involving
manufacturing
GmbH enterprises under
common control
Business
Luxshare combination not
Processing and
Automation Kunshan Kunshan 70.00 % involving
manufacturing
(Jiangsu) Ltd. enterprises under
common control
Dongguan
Luxshare Processing and
Dongguan Dongguan 100.00 % Establishment
Precision Industry manufacturing
Co., Ltd.
Guangdong
Luxshare& Merry Processing and
Dongguan Dongguan 51.00 % Establishment
Electronics Co., manufacturing
Ltd.
M&A Merry Business
Electronics Processing and combination not
Huizhou Huizhou 51.00 %
(Huizhou) Co., manufacturing involving
LTD. enterprises under
288
Luxshare Precision Industry Co., Ltd. Annual Report 2021
common control
Business
M&A Merry
combination not
Electronics
Shanghai Shanghai Trade 51.00 % involving
(Shanghai) Co.,
enterprises under
Ltd.
common control
Xingning
Luxshare Processing and
Xingning Xingning 100.00 % Establishment
Electronic Co., manufacturing
Ltd.
Jiangxi Luxshare
Intelligent Processing and
Ji’an Ji’an 100.00 % Establishment
Manufacture Co., manufacturing
Ltd.
Shenzhen
Luxshare Processing and
Shenzhen Shenzhen 70.00 % Establishment
Standard Co., manufacturing
Ltd.
Luxshare
Processing and
Standard Limited Hong Kong Hong Kong 70.00 % Establishment
manufacturing
(HK)
Luxshare
Processing and
Precision Industry Enshi Enshi 100.00 % Establishment
manufacturing
(Enshi) Co., Ltd.
Luxshare
Precision Industry Processing and
Suzhou Suzhou 100.00 % Establishment
(Suzhou) Co., manufacturing
Ltd.
Luxshare iTech
Processing and
(Zhejiang) Co., Jiashan Jiashan 100.00 % Establishment
manufacturing
LTD.
Luxshare
Intelligent
Manufacture Processing and
Changshu Changshu 100.00 % Establishment
Technology manufacturing
(Changshu) Co.,
Ltd.
Dongguan
Luxshare Processing and
Dongguan Dongguan 90.00 % Establishment
Technology Co., manufacturing
Ltd.
289
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare
Processing and
Technologies Hong Kong Hong Kong 90.00 % Establishment
manufacturing
Limited
Business
Donguan Xuntao combination not
Processing and
Electronic Co., Dongguan Dongguan 90.00 % involving
manufacturing
Ltd. enterprises under
common control
Xingning
Luxshare Processing and
Xingning Xingning 90.00 % Establishment
Technology Co., manufacturing
Ltd.
Kunshan-Luxshar
Processing and
e RF Technology Kunshan Kunshan 90.00 % Establishment
manufacturing
Co., Ltd.
Hangzhou Xuntao Hangzhou Hangzhou
Processing and
Technology Co., 90.00 % Establishment
manufacturing
Ltd.
Business
Zhejiang Puxing
combination not
Electronic Zhejiang Zhejiang Processing and
63.00 % involving
Technology Co., province province manufacturing
enterprises under
Ltd.
common control
Guangdong
Luxshare
Smart-Link Processing and
Dongguan Dongguan 90.00 % Establishment
Electronic manufacturing
Technology Co.,
Ltd.
Changshu
Luxshare
Industrial Investment
Changshu Changshu 100.00 % Establishment
Investment consulting
Management Co.,
Ltd.
Rugao Luxshare
Corporate
Management
Investment
Services Rugao Rugao 9.09 % Establishment
consulting
Partnership
(Limited
Partnership)
290
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Lianxun
Intelligent Processing and
Rugao Rugao 9.09 % Establishment
Equipment manufacturing
(Rugao) Co., Ltd.
Yancheng
Luxshare
Corporate
Management Investment
Yancheng Yancheng 9.09 % Establishment
Services consulting
Partnership
(Limited
Partnership)
Luxshare
Intelligent
Investment
Equipment Yancheng Yancheng 9.14 % Establishment
consulting
(Yancheng) Co.,
Ltd.
Kunshan
Luxshare
Enterprise Investment
Kunshan Kunshan 100.00 % Establishment
Management consulting
Development Co.,
Ltd.
Kunshan
Luxshare
Corporate
Management Investment
Kunshan Kunshan 9.09 % Establishment
Services consulting
Partnership
(Limited
Partnership)
Luxshare
Intelligent
Processing and
Equipment Kunshan Kunshan 9.46 % Establishment
manufacturing
(Kunshan) Co.,
Ltd.
Luxshare
Precision Processing and
Xi’an Xi’an 100.00 % Establishment
Technology(Xi’a manufacturing
n) Co., Ltd.
Luxshare Processing and
Enshi Enshi 100.00 % Establishment
Electronic manufacturing
291
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Technology
(Enshi) Co., Ltd.
Luxis Technology
Processing and
(Kunshan) Co., Kunshan Kunshan 100.00 % Establishment
manufacturing
Ltd.
Business
Luxcase Precision
combination not
Technology Processing and
Yancheng Yancheng 51.83 % involving
(Yancheng) Co., manufacturing
enterprises under
Ltd.
common control
Business
Ri Pei Computer
combination not
Accessory Processing and
Shanghai Shanghai 51.83 % involving
(Shanghai) Co., manufacturing
enterprises under
Ltd.
common control
Ri Shan Business
Computer combination not
Processing and
Accessory Jiashan Jiashan 51.83 % involving
manufacturing
(Jiashan) Co., enterprises under
Ltd. common control
Ri Ming Business
Computer combination not
Processing and
Accessory Shanghai Shanghai 51.83 % involving
manufacturing
(Shanghai) Co., enterprises under
Ltd. common control
Sheng-Rui Business
Electronic combination not
Processing and
Technology Shanghai Shanghai 51.83 % involving
manufacturing
(Shanghai) enterprises under
Limited common control
Business
Rida Intelligent
combination not
Manufacture Processing and
Rugao Rugao 51.83 % involving
Technology manufacturing
enterprises under
(Rugao) Co.,LTD.
common control
Business
Caseteck combination not
Investment
Singapore Singapore Singapore 51.83 % involving
consulting
PTE.LTD., enterprises under
common control
Luxshare Smart
Rugao Rugao Processing and 51.83 % Establishment
Technology
292
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(Rugao) Co., Ltd. manufacturing
Luxis Precision
Intelligent
Processing and
Manufacture Kunshan Kunshan 100.00 % Establishment
manufacturing
(Kunshan) Co.,
Ltd.
Luxshare
Intelligent
Manufacture
Processing and
Electornic Kunshan Kunshan 100.00 % Establishment
manufacturing
Service
(Kunshan) Co.,
Ltd.
Liding Electronic
Technology Processing and
Dongguan Dongguan 100.00 % Establishment
(Dongguan) Co., manufacturing
Ltd.
Luxshare
Precision Processing and
Nanjing Nanjing 100.00 % Establishment
Technology(Nanji manufacturing
ng) Co., Ltd.
Descriptions on the difference between the shareholding ratio and the voting right ratio in the subsidiary:
Basis for holding half or less voting rights but still controlling the investee, and holding more than half of the voting rights but not
controlling the investee:
Basis for the control of significant structured entities included in the consolidation scope:
Basis for determining whether a company is an agent or a principal:
Other descriptions:
(2) Significant non-wholly-owned subsidiaries
In RMB
Dividends declared and
Profit or loss attributable Balance of minority
Shareholding ratio of distributed to minority
Name of subsidiary to minority shareholders interest at the end of the
minority shareholders shareholders in the
in the current period period
current period
Fujian JK Wiring
45.00 % 6 ,899,005.47 71 ,691,258.05
Systems Co., Ltd..
Luxshare Automation
30.00 % 21 ,291,801.32 119 ,777,830.66
(Jiangsu) Ltd.
M&A Merry Electronics
49.00 % 49 ,435,159.94 259 ,162,160.63
(Huizhou) Co., LTD
293
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Merry Electronics
49.00 % 22 ,553,757.35 742 ,161,417.42
(Suzhou) Co., Ltd.
SpeedTech Corp. 68.53 % 139 ,416,880.55 598 ,295,857.99
Luxcase Precision
Technology (Yancheng) 48.17 % 446 ,137,087.51 5 ,290,647,766.48
Co., Ltd.
Descriptions on the difference between the shareholding ratio of minority shareholders and their voting right ratio in the subsidiary:
Other descriptions:
(3) Main financial information of significant non-wholly-owned subsidiaries
In RMB
Closing balance Opening balance
Name of
Non-curr Non-curr Non-curr Non-curr
subsidiar Current Total Current Total Current Total Current Total
ent ent ent ent
y assets assets liabilities liabilities assets assets liabilities liabilities
assets liabilities assets liabilities
Fujian
JK
Wiring 201 ,461, 39 ,539,0 241 ,000, 78 ,739,4 2 ,947,38 81 ,686,8 163 ,428, 37 ,881,6 201 ,310, 56 ,639,5 439 ,433. 57 ,078,9
Systems 773.41 06.41 779.82 90.18 2.89 73.07 973.90 49.81 623.71 28.54 25 61.79
Co.,
Ltd..
Luxshare
Automati
738 ,818, 27 ,111,4 765 ,930, 366 ,214, 456 ,501. 366 ,670, 632 ,811, 25 ,327,1 658 ,138, 334 ,035, 434 ,922. 334 ,470,
on
949.79 31.45 381.24 443.87 81 945.68 583.17 04.17 687.34 875.87 47 798.34
(Jiangsu)
Ltd.
M&A
Merry
Electroni
778 ,911, 188 ,620, 967 ,531, 432 ,751, 5 ,877,57 438 ,629, 922 ,468, 91 ,289,2 1 ,013,75 580 ,109, 7 ,737,36 587 ,846,
cs
522.39 083.25 605.64 659.97 6.98 236.95 906.46 71.11 8,177.57 436.01 9.47 805.48
(Huizhou
) Co.,
LTD.
Merry
Electroni
1 ,044,70 1 ,356,95 2 ,401,66 862 ,367, 24 ,681,8 887 ,048, 1 ,181,69 1 ,409,64 2 ,591,34 1 ,092,80 31 ,243,9 1 ,124,05
cs
7,295.02 6,783.45 4,078.47 112.91 27.98 940.89 7,694.14 5,063.39 2,757.53 6,110.91 18.32 0,029.23
(Suzhou)
Co., Ltd.
SpeedTe 2 ,600,26 1 ,592,28 4 ,192,54 1 ,835,15 490 ,362, 2 ,325,51 2 ,162,13 1 ,160,24 3 ,322,37 1 ,950,65 145 ,273, 2 ,095,92
ch Corp. 0,430.80 2,396.88 2,827.68 5,679.00 074.14 7,753.14 0,004.28 7,787.78 7,792.06 5,927.00 694.52 9,621.52
294
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxcase
Precision
Technolo 22 ,778,4 32 ,118,0 20 ,783,8 21 ,121,4
9 ,339,57 337 ,685,
gy 81,259.2 51,618.1 02,429.8 88,176.9
0,358.86 747.10
(Yanche 6 2 9 9
ng) Co.,
Ltd.
In RMB
Amount recognized in the current period Amount recognized in the prior period
Cash flow Cash flow
Name of Total Total
Operating from Operating from
subsidiary Net profits comprehensi Net profits comprehensi
income operating income operating
ve incomes ve incomes
activities activities
Fujian JK
Wiring 326 ,411,016. 15 ,331,123.2 15 ,082,244.8 19 ,186,063.7 250 ,073,562. -26,954,549.2 16 ,729,734.4
2 ,911,512.54
Systems Co., 33 7 3 6 76 3 2
Ltd..
Luxshare
863 ,982,192. 70 ,972,671.1 75 ,591,546.5 124 ,551,641. 766 ,700,321. 82 ,205,745.4 85 ,533,891.3 -31,470,651.0
Automation
72 1 6 02 47 0 9 3
(Jiangsu) Ltd.
M&A Merry
Electronics 1 ,280,685,86 100 ,888,081. 102 ,990,996. -113,129,941. 1 ,352,111,26 114 ,971,511. 114 ,817,091. 196 ,105,592.
(Huizhou) 3.21 51 60 39 5.87 03 01 33
Co., LTD.
Merry
Electronics 2 ,373,278,24 46 ,028,076.2 47 ,322,409.2 73 ,648,850.1 2 ,510,006,53 104 ,525,341. 105 ,446,016. 413 ,323,812.
(Suzhou) Co., 6.97 2 8 6 4.54 39 56 87
Ltd.
SpeedTech 4 ,316,395,11 378 ,360,435. 640 ,576,904. 251 ,280,685. 3 ,463,332,78 327 ,841,387. 365 ,550,567. 437 ,331,860.
Corp. 1.91 24 00 70 1.62 24 60 62
Luxcase
Precision
49 ,727,123,0 961 ,423,139. 991 ,691,069. 893 ,969,747.
Technology
10.93 90 76 46
(Yancheng)
Co., Ltd.
Other descriptions:
295
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(4) Major restrictions on the use of enterprise group assets and repayment of enterprise group debts
(5) Financial support or other support provided to structured entities included in the scope of consolidated
financial statements
Other descriptions:
2. Transactions in which the share of owners’ equity in the subsidiary changes and still controls the
subsidiary
(1) Descriptions on changes in the shares of owners’ equity in subsidiaries
(2) Impact of transactions on minority interest and owners’ equity attributable to the parent company
In RMB
Acquisition cost/ disposal consideration
--Cash
-- Fair value of non-cash assets
Total acquisition cost/ disposal consideration
Less: share of subsidiaries’ net assets calculated by the
proportion of acquired/disposed equity shares
Difference
Including: Adjustment to capital reserve
Adjustment to surplus reserve
Adjustment to undistributed profits
Other descriptions
3. Equity in joint ventures or associates
(1) Significant joint ventures or associates
Shareholding ratio Accounting
Name of joint treatment of
Main place of Place of Nature of
venture or investment in
business registration business Direct Indirect
associate joint venture or
associate
Descriptions on the difference between the shareholding ratio and the voting right ratio in the joint venture or associate:
Basis for holding less than 20% of the voting rights but having significant influence, or holding 20% or more of the voting rights but
without significant influence:
296
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(2) Main financial information of significant joint ventures
In RMB
Closing balance/Amount recognized in the Opening balance/Amount recognized in
current period the prior period
Current assets
Including: cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interests
Equity attributable to shareholders of the
parent company
Share of net assets calculated by
shareholding proportion
Adjusted items:
-- Goodwill
-- Unrealized profit of internal transactions
--Other
Book value of equity investment in joint
ventures
Fair value of equity investment in joint
ventures with published quoted price
Operating income
Financial expenses
Income tax expenses
Net profits
Net profit from discontinued operation
Other comprehensive income
Total comprehensive incomes
Dividends received from joint ventures in
the current year
297
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Other descriptions
(3) Main financial information of significant associates
In RMB
Closing balance/Amount recognized in the Opening balance/Amount recognized in
current period the prior period
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interests
Equity attributable to shareholders of the
parent company
Share of net assets calculated by
shareholding proportion
Adjusted items:
-- Goodwill
-- Unrealized profit of internal transactions
--Other
Book value of equity investment in
associates
Fair value of equity investment in
associates with published quoted price
Operating income
Net profits
Net profit from discontinued operation
Other comprehensive income
Total comprehensive incomes
Dividends received from associates in the
current year
Other descriptions
298
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(4) Summary financial information of insignificant joint ventures and associates
In RMB
Closing balance/Amount recognized in Opening balance/Amount recognized in
the current period the prior period
Joint ventures: -- --
Total amount of the following items
-- --
calculated according to shareholding ratio
Associates: -- --
Total amount of the following items
-- --
calculated according to shareholding ratio
Other descriptions
(5) Descriptions on significant restrictions on the ability of joint ventures or associates to transfer funds to
the Company
(6) Excess loss of joint ventures or associates
In RMB
Unrecognized losses in the
Name of joint venture or Cumulative unrecognized losses Cumulative unrecognized losses
current period (or net profit
associate accumulated in previous period at the end of the period
shared in the current period)
Other descriptions
(7) Unconfirmed commitments related to investment in joint ventures
(8) Contingent liabilities related to investment in joint ventures or associates
4. Significant joint operations
Name of joint Main place of Shareholding ratio / share
Place of registration Nature of business
operation business Direct Indirect
Descriptions on the difference between the shareholding ratio or share and the voting rights ratio in the joint operation:
Basis for classifying a separate entity into joint operation:
Other descriptions
5. Equity in structured entities not included in the consolidated financial statements
Descriptions on structured entities not included in the consolidated financial statements:
299
Luxshare Precision Industry Co., Ltd. Annual Report 2021
6. Others
X. Risks associated with financial instruments
1. Credit risks
Credit risks refer to the risks that one party to a financial instrument suffers financial losses due to the
failure of the other party to perform its obligations.The customer credit risks mainly faced by the
Company come from credit sale.Before signing a new contract, the Company will assess the credit risks
generated by new customers from perspectives such as external credit rating and, in some cases, bank
credit certification (when the same is available).The Company has a credit limit, which is the maximum
amount without additional approval, for each customer.
The Company ensures that its overall credit risk is within the controllable range through quarterly
monitoring of credit rating of existing customers and monthly review of aging analysis of accounts
receivable.Customers are grouped according to their credit characteristics when the credit risks from them
are monitored.Customers rated as “high risk” will be placed on the restricted customer list, and only with
additional approval can the Company sell them on credit in the future period, otherwise they must be
required to pay the corresponding amount in advance.
2. Market risks
Market risks of financial instruments refer to the risks that the fair value or future cash flow of financial
instruments will fluctuate due to market price changes, including exchange rate risk, interest rate risk and
other price risks.
(1) Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments will
fluctuate due to the change in market interest rate.The interest rate risk faced by the Company mainly
comes from the long-term and short-term borrowings from banks.The Company, under its current policy,
seeks to borrow in USD with a lower loan interest rate.In order to obtain loans, the Company has
provided guarantee for its wholly-owned overseas subsidiaries ICT-Lanto Limited and Luxshare
Precision Limited for overseas financing.
(2) Exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or future cash flow will
fluctuate due to the change in foreign exchange rate.The Company tries to match foreign currency income
with foreign currency expenditure to reduce exchange rate risk.In addition, the Company has signed
forward foreign exchange contracts to avoid exchange rate risk.
(3) Other price risks
The Company holds equity investments of other listed companies, and the management believes that the
market price risks faced by these investment activities is acceptable.
The equity investments of listed companies held by the Company are presented as follows:
Item Closing balance Balance at the end of last
year
Other investments in equity 210 ,278,829.12 114 ,221,319.04
instruments
300
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 210 ,278,829.12 114 ,221,319.04
3. Liquidity risks
Liquidity risks refer to, with respect to an enterprise, the risks of capital shortage to the enterprise when it
fulfills its obligation of settlement by cash or other financial assets.It is the Company’s policy to ensure
that there is sufficient cash to pay its debts as they fall due.The liquidity risks are controlled by the
financial department of the Company in a unified manner.By monitoring the cash balance, marketable
securities that can be realized at any time and rolling forecast of cash flow in the next 12 months, the
financial department ensures that the Company has sufficient funds to repay debts under all reasonable
forecasts.
XI. Disclosure of fair value
1. Closing fair value of assets and liabilities measured at fair value
In RMB
Closing balance of fair value
Item
Level I Level II Level III Total
I. Continuous fair value
-- -- -- --
measurement
(I) Held-for-trading
115 ,918,643.05 1 ,991,199,461.99 2 ,107,118,105.04
financial assets
1. Financial assets at fair
value through profit or 115 ,918,643.05 1 ,991,199,461.99 2 ,107,118,105.04
loss
(2) Equity instrument
5 ,700,000.00 5 ,700,000.00
investment
(3) Derivative financial
115 ,918,643.05 1 ,991,199,461.99 2 ,107,118,105.04
assets
(III) Other equity
210 ,278,829.12 25 ,697,319.30 235 ,976,148.42
instrument investments
(VI) Held-for-trading
41 ,436.00 41 ,436.00
financial liabilities
Including: held-for-trading
41 ,436.00 41 ,436.00
bonds issued
II. Non-continuous fair
-- -- -- --
value measurement
301
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Basis for determining the market price of the items continuously and not continuously measured at fair
value at level I
Level I inputs are quoted market price (unadjusted) in an active market for an identical asset or liability available
at the date of measurement.
3. Valuation technology and qualitative and quantitative information of important parameters used in the
items continuously and not continuously measured at fair value at level II.
Level II inputs are inputs other than quoted market price (Level I) that are directly or indirectly observable for the
asset or liability.
4. Valuation technology and qualitative and quantitative information of important parameters used in the
items continuously and not continuously measured at fair value at level III
Level III inputs are unobservable inputs for the asset or liability.
5. Adjustment information between the opening book value and the closing book value, and the sensitivity
analysis of unobservable parameters for items continuously measured at fair value at the third level
None
6. For items continuously measured at fair value, if there is conversion between different levels in the
current period, the reasons for the conversion and the policy for determining the conversion time point
None
7. Changes in valuation technology in the current period and reasons for changes
None
8. Fair value of financial assets and financial liabilities not measured at fair value
None
9. Others
None
302
Luxshare Precision Industry Co., Ltd. Annual Report 2021
XII. Related parties and related-party transactions
1. The parent company of the Company
Shareholding ratio of Voting rights ratio of
Name of parent
Place of registration Nature of business Registered capital the parent company the parent company
company
in the Company in the Company
Luxshare Limited Hong Kong Industry HKD10,000 38.63 % 38.63 %
Descriptions on the parent company of the Company
The ultimate controller of the Company is WANG Laichun and WANG Laisheng；
As of December 31, 2021, Luxshare Limited has pledged 19.23% of shares it held.
The ultimate controller of the enterprise is.
Other descriptions:
2. Subsidiaries of the Company
Please refer to Note “IX.Equity in other entities” for details of the Company’s subsidiaries
3. Joint ventures and associates of the Company
Please refer to Note “IX.Equity in other entities” for details of the Company’s significant joint ventures or associates.
Other joint ventures or associates that have related-party transactions with the Company in the current period or formed a balance due
to related-party transactions with the Company in the prior period are as follows:
Name of joint venture or associate Relationship with the Company
Joint-stock company of a majority-owned sub-subsidiary of the
Riyimao Industrial Co., Ltd.
Company
Joint-stock company of a majority-owned sub-subsidiary of the
Assem Technology Co., Ltd.
Company
Joint-stock company of a majority-owned sub-subsidiary of the
Xuande Energy Co., Ltd.
Company
Joint-stock company of a majority-owned sub-subsidiary of the
Ayala Design Co.,Ltd.(Japan)
Company
Joint-stock company of a majority-owned sub-subsidiary of the
Caldigit (UK) Limited
Company
Joint-stock company of a majority-owned sub-subsidiary of the
Caldigit American Inc.
Company
MERRY & LUXSHARE (VIET NAM) CO.,LTD Joint-stock company of the Company’s subsidiary
Zhuhai Kinwong Flexible Circuit Co., Ltd. Associates of the Company
Other descriptions
303
Luxshare Precision Industry Co., Ltd. Annual Report 2021
4. Other related parties
Name of other related parties Relationship between other related parties and the Company
Bisaisi Automotive Technology (Suzhou) Co., Ltd. An enterprise controlled by the Company’s parent company
BCS AUTOMOTIVE INTERFACE SOLUTIONS An enterprise controlled by the Company’s parent company
Luxsan Technology (Kunshan) Co., Ltd. An enterprise controlled by the Company’s parent company
Luxsan Precision Intelligent Manufacture (Kunshan) Co., Ltd. An enterprise controlled by the Company’s parent company
LUXSAN TECHNOLOGY LIMITED An enterprise controlled by the Company’s parent company
Guangzhou Luxvisions Innovation Technology Limited Other related party of the Company
Shangrao City Lijing Innovation Technology Co., Ltd. Other related party of the Company
Luxvisions Innovation Limited Other related party of the Company
Xunmu Information Technology (Shanghai) Co., Ltd. Controlled by the de facto controller
Other descriptions
5. Related-party transactions
(1) Related-party transactions of purchasing and selling goods, rendering and accepting services
Purchasing goods/accepting services
In RMB
Amount Whether the
Related-party Approved transaction Amount recognized in
Related party recognized in the transaction limit is
transactions limit the prior period
current period exceeded
Riyimao Industrial
Purchasing goods 14 ,579,642.24 No 8 ,030,338.04
Co., Ltd.
Assem Technology Equipment and
1 ,544,704.07 No 1 ,742,625.00
Co., Ltd. apparatus
Assem Technology
Other services 7 ,025,321.51 No 7 ,133.15
Co., Ltd.
Zhuhai Kinwong
Flexible Circuit Co., Purchasing goods 5 ,143.81 No 40 ,830,964.42
Ltd.
Bisaisi Automotive
Technology Purchasing goods 3 ,708,934.25 No 676 ,913.53
(Suzhou) Co., Ltd.
Guangzhou
Luxvisions
Purchasing goods 1 ,669,585.05 No 11 ,134.40
Innovation
Technology Limited
304
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxsan Technology
Purchasing goods 403 ,077.31 No
(Kunshan) Co., Ltd.
Luxsan Precision
Intelligent
Purchasing goods 20 ,052,496.84 No
Manufacture
(Kunshan) Co., Ltd.
LUXSAN
TECHNOLOGY Purchasing goods 27 ,367,615.80 No
LIMITED
MERRY &
LUXSHARE (VIET Purchasing goods 1 ,027,736.62 No
NAM) CO.,LTD
Selling goods/rendering services
In RMB
Amount recognized in the Amount recognized in the prior
Related party Related-party transactions
current period period
Riyimao Industrial Co., Ltd. Processing goods purchased 6 ,691.91
Riyimao Industrial Co., Ltd. Other services 886.00 1 ,842.54
Ayala Design Co., Ltd.(Japan) Selling products 4 ,495,492.93
Caldigit (UK) Limited Selling products 31 ,496,213.08
Caldigit American Inc. Selling products 135 ,401,289.61
Assem Technology Co., Ltd. Other services 297 ,821.29 7 ,133.15
Zhuhai Kinwong Flexible
Selling products 20 ,714.40
Circuit Co., Ltd.
Shangrao City Lijing
Innovation Technology Co., Selling products 346 ,000.00 1 ,383,434.92
Ltd.
Guangzhou Luxvisions
Equipment and apparatus 2 ,542,359.91 43 ,045,170.20
Innovation Technology Limited
Luxvisions Innovation Limited Selling products 18 ,034.55
Bisaisi Automotive Technology
Selling products 218 ,717,133.08 106 ,918,653.51
(Suzhou) Co., Ltd.
BCS AUTOMOTIVE
Selling products 910 ,682.54
INTERFACE SOLUTIONS
Luxsan Technology (Kunshan)
Selling products 417 ,147,307.20
Co., Ltd.
Luxsan Precision Intelligent
Selling products 20 ,080,496.26
Manufacture (Kunshan) Co.,
305
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Ltd.
Xunmu Information Technology
Selling products 10 ,792,326.99
(Shanghai) Co., Ltd.
MERRY & LUXSHARE (VIET
Selling products 16 ,898,647.66
NAM) CO.,LTD
Descriptions on related-party transactions of purchasing and selling goods, and providing and accepting services
The approved related-party transactions amounted to RMB 777 million in total.
(2) Related-party entrusted management/contracting and entrusted management/outsourcing
Entrusted management/contracting of the Company:
In RMB
Trusteeship
Commencement Pricing basis of
Types of Termination date income/contract
Name of Name of trustee/ date of trusteeship
entrusted / of entrustment / income
principal/owner contractor entrustment/contr income/contract
contracted assets contract recognized in the
act income
current period
Descriptions on related-party trusteeship/contract
Statement of entrusted management/outsourcing of the Company:
In RMB
Trusteeship
Commencement Pricing basis of
Types of Termination date income/contract
Name of Name of trustee/ date of trusteeship
entrusted / of entrustment / income
principal/owner contractor entrustment/contr income/contract
contracted assets contract recognized in the
act income
current period
Descriptions on related-party management/outsourcing
(3) Related-party lease
The Company acts as the lessor:
In RMB
Lease income recognized in the Lease income recognized in the
Name of lessee Types of leased assets
current period previous period
Riyimao Industrial Co., Ltd. Fixed assets 0.00 21 ,117.59
Xuande Energy Co., Ltd. Fixed assets 0.00 108 ,412.88
The Company acts as the lessee:
In RMB
Lease income recognized in the Lease income recognized in the
Name of lessor Types of leased assets
current period previous period
Luxsan Precision Intelligent Fixed assets and buildings 9 ,801,826.37 0.00
306
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Manufacture (Kunshan) Co.,
Ltd.
Descriptions on related-party leases
Name of Types of Current period Prior period
lessor leased assets Rental costs for short-term Rents Right-of-use Interest cost of Lease
leases and low-value asset paid assets increased lease liabilities payments
leases that are treated in a assumed recognized
simplified manner and
variable lease payments that
are not included in the
measurement of lease
liabilities
Luxsan Fixed assets 85 ,406,789.07 1 ,536,653.21
Precision and buildings
Intelligent
Manufacture
(Kunshan)
Co., Ltd.
(4) Related-party guarantee
The Company acts as the guarantor
In RMB
Commencement date of Maturity date of Whether the guarantee
Guaranteed party Amount of guarantee
guarantee guarantee has been fulfilled
Luxshare Precision
5 ,100,560,000.00 July 20, 2020 July 19, 2025 No
Limited
The Company acts as the guaranteed party
In RMB
Commencement date of Maturity date of Whether the guarantee
Guarantor Amount of guarantee
guarantee guarantee has been fulfilled
Descriptions on related-party guarantee
(5) Related-party loans
In RMB
Related party Loan amount Commencement date Maturity date Remarks
Borrow
Lend
307
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(6) Asset transfer and debt restructuring of related parties
In RMB
Amount recognized in the Amount recognized in the prior
Related party Related-party transactions
current period period
(7) Remuneration of key managers
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Compensation of key managers 10 ,465,440.15 11 ,414,640.00
Share-based payment of key managers 5 ,454,355.12 9 ,586,952.73
(8) Other related-party transactions
6. Accounts receivable and payable of related parties
(1) Receivables
In RMB
Closing balance Opening balance
Item Related party
Book balance Bad-debt provision Book balance Bad-debt provision
Accounts receivable
Shangrao City Lijing
Innovation 324 ,853.80 162.43
Technology Co., Ltd.
Guangzhou
Luxvisions
1 ,617,967.38 808.98 14 ,398,489.55 7 ,199.24
Innovation
Technology Limited
Bisaisi Automotive
Technology 158 ,076,590.05 79 ,038.30 59 ,654,508.75 29 ,827.25
(Suzhou) Co., Ltd.
Ayala Design
890 ,628.97 445.31
Co.,Ltd.(Japan)
Caldigit (UK)
17 ,773,116.02 8 ,886.56
Limited
Caldigit American
38 ,290,629.44 19 ,145.31
Inc.
BCS 95 ,631.05 47.82
308
Luxshare Precision Industry Co., Ltd. Annual Report 2021
AUTOMOTIVE
INTERFACE
SOLUTIONS
Assem Technology
311 ,427.22 155.71
Co., Ltd.
Luxsan Technology
39 ,532,101.88 19 ,766.05
(Kunshan) Co., Ltd.
Xunmu Information
Technology 12 ,256,936.88 6 ,128.47
(Shanghai) Co., Ltd.
Merry & Luxshare
（Vietnam） Co., 6 ,316,914.83 3 ,158.46
Ltd
Other receivables
Guangzhou
Luxvisions
69 ,933.44 349.67
Innovation
Technology Limited
Bisaisi Automotive
Technology 4 ,200.00 21.00
(Suzhou) Co., Ltd.
Xuande Energy Co.,
167 ,101.03 835.51 168 ,480.23 842.40
Ltd.
Luxsan Technology
685.63 3.43
(Kunshan) Co., Ltd.
BCS
AUTOMOTIVE
803 ,488.22 4 ,017.44
INTERFACE
SOLUTIONS
Merry & Luxshare
（Vietnam） Co., 84 ,161.60 420.81
Ltd
(2) Payables
In RMB
Item Related party Closing book balance Opening book balance
Accounts payable
Assem Technology Co., Ltd. 5 ,479,111.65
Guangzhou Luxvisions 1 ,445,279.42 12 ,581.87
309
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Innovation Technology Limited
Luxvisions Innovation Limited 80 ,169.45
Bisaisi Automotive Technology
2 ,980,261.04 447 ,157.67
(Suzhou) Co., Ltd.
Luxsan Precision Intelligent
Manufacture (Kunshan) Co., 37 ,710,113.75
Ltd.
Luxsan Technology (Kunshan)
398 ,415.58
Co., Ltd.
Riyimao Industrial Co., Ltd. 8 ,597,415.91 3 ,195,766.80
Zhuhai Kinwong Flexible
5 ,143.81
Circuit Co., Ltd.
Merry & Luxshare （Vietnam）
1 ,015,850.48
Co., Ltd
LUXSAN TECHNOLOGY
23 ,227,385.80
LIMITED
Other payables
Assem Technology Co., Ltd. 2 ,537.96
7. Commitment of related parties
8. Others
XIII. Share-based payment
1. General situation of share-based payment
√ Applicable □ N/A
In RMB
Total amount of the Company’s equity instruments granted in the current
52 ,092,000.00
period
Total amount of the Company’s equity instruments exercised in the current
53 ,480,164.00
period
Total amount of the Company’s equity instruments invalid in the current
16 ,851,105.02
period
The range of exercise prices of Company’s outstanding stock options at
See the following
the end of the period and the remaining term of the contract
The range of exercise prices of other equity instruments issued by the
See the following
Company at the end of the period and the remaining term of the contract
Other descriptions
310
Luxshare Precision Industry Co., Ltd. Annual Report 2021
The range of exercise prices of Company’s outstanding stock options at the end of the period and the remaining term of the
contract: (1) On September 25, 2018, the Proposal on Granting Stock Options to Grantees under the 2018 Stock Option
Incentive Plan of Luxshare Precision Industry Co., Ltd.was approved upon deliberation at the Fifth Meeting of the Fourth
Session of the Board of Directors of the Company. Accordingly, the Company granted 97.50 million of stock options to
1,899 eligible grantees at the exercise price of RMB17.58 per share.After 12 months from the date on which the
registration of grants was completed, grantees meeting the exercise conditions would exercise the options in five periods,
with a proportion of 20% for each period, in the following 60 months; According to the Proposal on Satisfying the Exercise
Conditions for the Second Exercise Period under the 2018 Stock Option Incentive Plan approved upon deliberation at the
Twenty-seventh Meeting of the Fourth Session of the Board of Directors of the Company held on December 2, 2020, given
that the exercise condition for the second exercise period under the 2018 Stock Option Incentive Plan had been matured, it
was agreed that 1,718 grantees of the 2018 Stock Option Incentive Plan would independently exercise their options at the
exercise price of RMB10.28 per share, with the estimated stock options to be exercised numbering 31,212,577 (the actual
number of stock options to be exercised shall be subject to registered number by Shenzhen Branch of China Securities
Depository and Clearing Co., Ltd.)
(2) On April 22, 2019, the Company held the Ninth Meeting of the Fourth Session of the Board of Directors, deliberating
and approving the Proposal on Granting Stock Options to Initial Grantees under the 2019 Stock Option Incentive Plan of
Luxshare Precision Industry Co., Ltd., whereby it was determined that 50,076,000 stock options would be granted to 348
eligible grantees and 12, 519,000 stock options would be reserved for future granting.The stock options initially granted
under this incentive plan was RMB 23.36 per share.On November 27, 2019, the Company held the Thirteenth Meeting of
the Fourth Session of the Board of Directors, deliberating and approving the Proposal on Granting Stock Options to
Grantees Reserved under the 2019 Stock Option Incentive Plan, pursuant to which the Company granted 16,274,700 stock
options to 263 eligible grantees at an exercise price of RMB17.93 per share, and after 12 months from the date on which
the registration of grants was completed, grantees meeting the exercise conditions would exercise the stock options in five
periods, with a proportion of 20% for each period, in the following 60 months.
On June 22, 2020, the Company held the Nineteenth Meeting of the Fourth Session of the Board of Directors, deliberating
and approving the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period under the 2019 Stock
Option Incentive Plan, pursuant to which the exercise condition for the first exercise period under the 2019 Stock Option
Incentive Plan was matured.Therefore, it was agreed that 339 initial grantees of the 2019 Stock Option Incentive Plan
would independently exercise their options at the exercise price of RMB13.70 per share, with the estimated stock options to
be exercised numbering 16,456,708 (the actual number of stock options to be exercised is subject to registered number by
Shenzhen Branch of China Securities Depository and Clearing Co., Ltd.).
On December 3,2021, the Company held the Sixth Meeting of the Fifth Session of the Board of Directors, deliberating and
approving the Proposal on Granting Stock Options to Grantees under the 2021 Stock Option Incentive Plan of Luxshare
Precision Industry Co., Ltd., whereby it was determined that 52,419,000 stock options would be granted to 1,097 eligible
grantees on December 3, 2021 as the grant date of the incentive plan.The exercise price of stock options initially granted
under this incentive plan was RMB 35.87 per share.Since 22 original grantees resigned from the Company and 3 original
grantees gave up all stock options to be granted to them for personal reasons, the number of grantees subject to this stock
option incentive was changed from 1,097 to 1,072 and the quantity of stock options granted was changed from 52,419,000
to 52,092,000.
2. Share-based payment settled in equity
√ Applicable □ N/A
In RMB
311
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Method of determining the fair value of equity instruments on the
Black-Scholes model
grant date
The determination is made by the Company according to the
Basis for determining the number of exercisable equity instruments equity instruments corresponding to the on-the-job grantees
and the Company’s performance forecast in the future.
Reasons for significant differences between current and prior
None
estimates
Cumulative amount of share-based payment settled in equity
937 ,782,848.94
included in the capital reserve
Total amount of share-based payment settled in equity recognized in
237 ,932,583.86
the current period
Other descriptions
(1) On September 25, 2018, the Company held the Fifth Meeting of the Fourth Session of the Board of Directors and the
Fifth Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on Granting
Stock Options to Grantees under the 2018 Stock Option Incentive Plan of Luxshare Precision Industry Co., Ltd., whereby it
was determined that 97,500,000 stock options would be granted to 1,899 eligible grantees on September 25, 2018 as the
grant date of the incentive plan.
On November 27, 2019, the Company held the Thirteenth Meeting of the Fourth Session of the Board of Directors and the
Thirteenth Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting
the Exercise Price and Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options as well as
the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period of the 2018 Stock Option Incentive Plan.
According to relevant provisions of the Measures for Managing Equity Incentives of Listed Companies, the Company’s 2018
Stock Option Incentive Plan (Draft) and the Administrative Measures for the Implementation and Assessment of the 2018
Stock Option Incentive Plan, and as authorized by the Company’s second extraordinary general meeting of shareholders in
2018, the adjustment of the exercise price and quantity under the stock option incentive plan and the cancellation of some
options was ratified in response to the implementation by the Company of the annual equity distribution plan in 2018 and the
resignation of grantees, etc..After the adjustment, the number of grantees was changed from 1,870 to 1,762, the quantity of
stock options granted was changed from 97,300,000 to 122,327,530, and the exercise price of stock options was changed
from RMB17.58 per share to RMB13.48 per share.
On June 22, 2020, the Company held the Nineteenth Meeting of the Fourth Session of the Board of Directors and the
Nineteen Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting
the Exercise Price and Quantity under the Stock Option Incentive Plans in 2018 and 2019, and Canceling Some Stock
Options. After the adjustment, the quantity of stock options that was not exercised was changed from 99,001,310 to
128,698,841, and the exercise price of stock options that was not exercised was changed from RMB13.48 per share to
RMB10.28 per share.
On December 2, 2020, the Company held the Twenty-seventh Meeting of the Fourth Session of the Board of Directors and
the Twenty-seventh Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on
Adjusting the Exercise Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options as well as
the Proposal on Satisfying the Exercise Conditions for the Second Exercise Period of the 2018 Stock Option Incentive Plan.
After the adjustment, the number of grantees subject to the stock option incentive plan was changed from 1,762 to 1,719, and
the quantity of stock options granted was changed from 127,217,803 to 125,056,043.
On July 2, 2021, the Company held the Second Meeting of the Fifth Session of the Board of Directors and the Second
Meeting of the Fifth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting the Exercise
312
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Price under the Stock Option Incentive Plans in 2018 and 2019, and Canceling Some Stock Options of the Stock Option
Incentive Plan in 2019. After the adjustment, the exercise price of stock options that was not exercised was changed from
RMB 10.28 per share to RMB 10.17 per share.
On September 30, 2021, the Company held the Fourth Meeting of the Fifth Session of the Board of Directors and the Fourth
Meeting of the Fifth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting the Exercise
Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options. After the adjustment, the number
of grantees subject to the stock option incentive plan was changed from 1,719 to 1,695, and the quantity of stock options
granted was changed from 93,843,466 to 92,964,441.
On December 3, 2021, the Company held the Sixth Meeting of the Fifth Session of the Board of Directors and the Sixth
Meeting of the Fifth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting the Exercise
Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options as well as the Proposal on
Satisfying the Exercise Conditions for the Third Exercise Period of the 2018 Stock Option Incentive Plan. After the
adjustment, the number of grantees subject to the stock option incentive plan was changed from 1,695 to 1,653, and the
quantity of stock options granted was changed from 92,964,441 to 90,887,187.
(2) On April 22, 2019, the Company held the Ninth Meeting of the Fourth Session of the Board of Directors and the Ninth
Meeting of the Fourth Session of the Board of Supervisors, at which it deliberated and approved the Proposal on Granting
Stock Options to Subordinated Grantees under the 2019 Stock Option Incentive Plan of Luxshare Precision Industry Co. ,
Ltd., determining that 50,076,000 stock options would be granted to 348 eligible initial grantees on April 22, 2019 as the
grant date of the incentive plan.
On November 27, 2019, the Company held the Thirteenth Meeting of the Fourth Session of the Board of Directors and the
Thirteenth Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting
the Exercise Price and Quantity under the 2019 Stock Option Incentive Plan and the Proposal on Granting Stock Options to
Grantees Reserved under the 2019 Stock Option Incentive Plan. Due to the implementation by the Company of the annual
equity distribution plan in 2018, the exercise price and quantity under the 2019 stock option incentive plan were
adjusted.After adjustment, the exercise price of the stock option initially granted was changed from RMB23.36 per share to
RMB17.93 per share, the quantity of stock options initially granted was changed from 50,076,000 to 65,098,800, and the
quantity of reserved stock options granted was changed from 12,519,000 to 16,274700. At the same time, the board of
directors considered that the Company and the grantees had met the conditions for the grant of reserved stock options under
the Company’s 2019 incentive plan, and consented to grant 16,274,700 stock options to 263 grantees on November 27, 2019
as the grant date of reserved stock options at the exercise price of RMB17.93 per share.
On June 22, 2020, the Company held the Nineteenth Meeting of the Fourth Session of the Board of Directors and the
Nineteenth Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on
Adjusting the Exercise Price and Quantity under the Stock Option Incentive Plans in 2018 and 2019, and Canceling Some
Stock Options, and the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period of the 2019 Stock
Option Incentive Plan. After this adjustment, the number of initial grantees under the 2019 stock option incentive plan was
adjusted from 348 to 340, the quantity of stock options initially granted was adjusted from 65,098,800 to 84,626,558, and the
exercise price of the stock options initially granted was adjusted from RMB17.93 per share to RMB13.70 per share;the
quantity of reserved stock options granted was adjusted from 16,241,700 to 21,113,740, and the exercise price thereof was
adjusted from RMB17.93 per share to RMB13.70 per share.
On January 22, 2021, the Company held the Twenty-ninth Meeting of the Fourth Session of the Board of Directors and the
Twenty-ninth Meeting of the Fourth Session of the Board of Supervisors, deliberating and approving the Proposal on
Adjusting the Reserved Name List of grantees, Exercise Quantity under the 2019 Stock Option Incentive Plan and Canceling
Some Stock Options as well as the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period of the 2019
313
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Stock Option Incentive Plan. After the adjustment, the number of grantees subject to the stock option incentive plan was
changed from 258 to 250, and the quantity of stock options granted was changed from 21,113,740 to 20,657,454.
On July 2, 2021, the Company held the Second Meeting of the Fifth Session of the Board of Directors and the Second
Meeting of the Fifth Session of the Board of Supervisors, deliberating and approving the Proposal on Adjusting the Exercise
Price under the Stock Option Incentive Plans in 2018 and 2019, and Canceling Some Stock Options of the Stock Option
Incentive Plan in 2019, as well as the Proposal on Satisfying the Exercise Conditions for the Second Exercise Period of the
2019 Stock Option Incentive Plan. After the adjustment, the number of initial grantees subject to the stock option incentive
plan was changed from 340 to 332, the quantity of stock options initially granted was changed from 65,977,698 to 65,232,789,
and the exercise price of stock options that was initially granted and reserved for grantees was changed from RMB 13.70 per
share to RMB 13.59 per share.
(3) On December 3,2021, the Company held the Sixth Meeting of the Fifth Session of the Board of Directors, deliberating
and approving the Proposal on Granting Stock Options to Grantees under the 2021 Stock Option Incentive Plan of
Luxshare Precision Industry Co., Ltd., whereby it was determined that 52,419,000 stock options would be granted to 1,097
eligible grantees on December 3, 2021 as the grant date of the incentive plan.The exercise price of stock options initially
granted under this incentive plan was RMB 35.87 per share.Since 22 original grantees resigned from the Company and 3
original grantees gave up all stock options to be granted to them for personal reasons, the number of grantees subject to this
stock option incentive was changed from 1,097 to 1,072 and the quantity of stock options granted was changed from
52,419,000 to 52,092,000.
3. Share-based payment settled in cash
□ Applicable √ N/A
4. Modification and termination of share-based payment
None
5. Others
None
XIV. Commitments and contingencies
1. Significant commitments
Significant commitments on the balance sheet date
The Company has no significant commitments to be disclosed.
314
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Contingencies
(1) Significant contingencies on the balance sheet date
The Company has no significant contingencies to be disclosed.(2) Notes shall be made if the Company has no
significant contingencies that need to be disclosed
The Company has no significant contingencies to be disclosed.
3. Others
XV. Events after the balance sheet date
1. Significant non-adjusting items
In RMB
Effected quantum on financial Reasons why the effected
Item Content
position and operating results quantum cannot be estimated
2. Profit distribution
In RMB
Profits or dividends planned to distribute 779 ,273,162.47
Profits or dividends approved to distribute 779 ,273,162.47
3. Sales return
4. Description on events after the balance sheet date
(I) Significant non-adjusting items
1. According to the resolution of the Seventh Meeting of the Fifth Session of the Board of Directors, the Company intends to raise
funds totaled up to RMB13,500,000,000 through private offering of shares.The number of shares to be issued privately is determined
as the amount obtained by dividing the total raise funds by the issue price this time, and shall not exceed 30% of the total share
capital of the Company before this issue, i.e.not more than 2,123,110,448 shares (inclusive).
2. According to the resolution of the Eighth Meeting of the Fifth Session of the Board of Directors, the Company intends to apply for
a comprehensive credit line amounting to RMB28.2 billion in aggregate from 16 banks. The above credit line will be subject to the
actual approval of these banks and comprises RMB loans, bank acceptance bills, letters of credit, letters of guarantee, forward foreign
exchange and other local and foreign currency credit varieties, with credit terms of one year for all.
3. On February 11, 2022, the Company made and entered into a Strategic Cooperation Framework Agreement ("Agreement") with
Chery Holding Group Co., LTD.(“Chery Holding”), Chery Automobile Co., LTD.(“Chery Automobile”) and Chery New Energy
Vehicle Co., LTD.(“Chery New Energy”) (Chery Holding, Chery Automobile, Chery New Energy and its related parties collectively
referred to as "Chery Group"), pursuant to which a strategic partnership between the two parties have been established.On the basis of
the Agreement, the Company and Chery New Energy intend to jointly establish a joint venture company which will specialize in
developing and manufacturing new energy vehicles, and provide a cutting-edge R&D design, mass production platform and sale
315
Luxshare Precision Industry Co., Ltd. Annual Report 2021
channel for Luxshare Precision's core automotive parts business, committed to achieving the Company’s medium- and long-term goal
of becoming the Tier 1 leader in the field of automotive parts.
4. In order to further improve its strategic layout, the Company intended to acquire 204,930,000 shares (representing approximately
11.09%, “Underlying Share 1”) of Time Interconnect Technology Limited (a company listed on the main board of the Hong Kong
Stock Exchange with a stock code of 01729.HK, “Time Interconnect Technology” or “Underlying Company”) held by Datatech
Investment Inc.("Seller 1") and 1,175,070,000 shares (representing approximately 63.58% , “Underlying Share 2”, and collectedly
referred to as “Underlying Shares” together with “Underlying Share 1”) of the Underlying Company held by Time Interconnect
Holdings Limited (“Seller 2”) at a price of HKD 0.8 per share (equivalent to approximately RMB 0.65 per share discounted by the
mid-rate of HKD1:RMB 0.81656 as announced by the People's Bank of China on February 11, 2022, the same as below) through
LUXSHARE PRECISION LIMITED (“LUXSHARE PRECISION”), a wholly-owned overseas subsidiary of the Company
y(“Acquisition”).Shares of the Underlying Company involved in the Acquisition totaled in 1,380,000,000 shares, representing
approximately 74.67%, with a total consideration amounting to HKD 1,104,000,000.00.In terms of the Acquisition, a Share Purchase
Agreement was made and entered into by and among Seller 1, Seller 2, LUXSHARE PRECISION and Lo Chung Wai, Paul on
February 11, 2022.
On 17 March 2022, LUXSHARE PRECISION paid the purchase price of HKD 1,104,000,000 in full to Seller 1 and Seller 2 and
completed the settlement of all Underlying Shares.Upon completion of the settlement, LUXSHARE PRECISION held 1,380,000,000
shares of Time Interconnect Technology in total, representing approximately 72.18% of the issued shares of Time Interconnect
Technology as of the close time on March 16, 2022.
On March 30, 2022, LUXSHARE PRECISION, as the offeror, gave a mandatory unconditional cash offer for acquisition of all issued
shares of Time Interconnect Technology and cancellation of all purchase options not exercised yet (excluding those already held by
LUXSHARE PRECISION and its parties acting in concert). This offer was terminated at 4:00 p.m.on April 19, 2022, as of which
LUXSHARE PRECISION has received valid acceptances of an aggregate of 594,000 offer shares under this offer (the "Accepted
Shares"), representing approximately 0.03% of the total issued shares of Time Interconnect Technology as of the close time on April 19,
2022; prior to the commencement of this offer, LUXSHARE PRECISION and its parties acting in concert had held 1,380,000,000
shares of Time Interconnect Technology in total, representing approximately 70.92% of the total issued shares of Time Interconnect
Technology as of the close time on March 25, 2022. As of the close time on April 19, 2022, after calculating the sum of the Accepted
Shares and the shares of Time Interconnect Technology held by LUXSHARE PRECISION and its parties acting in concert,
LUXSHARE PRECISION and its parties acting in concert held 1,380,594,000 shares of Time Interconnect Technology in total,
representing approximately 70.95% of the total issued shares of Time Interconnect Technology.
5. According to the resolution of the Eighth Meeting of the Fifth Session of the Board of Directors, the Company intends to take
appropriate low-risk investment and wealth management activities to improve the efficiency of using the Company's funds and further
increase the Company's proceeds. Therefore, the Company plans to purchase low-risk investment wealth management products with
high security and good liquidity by using its independently-owned idle funds with an amount up to RMB 4 billion, with a valid term
equal to or less than 12 months from the date of approval, provided that the Company ensures that such purchase will not affect the
Company’s normal production and operations and risks of such purchase can be effectively controlled.
XVI. Other significant events
1. Correction of previous accounting errors
(1) Retrospective restatement
In RMB
Accounting error corrected Processing procedure Name of the affected item in the Cumulative quantum affected
316
Luxshare Precision Industry Co., Ltd. Annual Report 2021
statements of the comparison
period
(2) Prospective Application
Reasons for adopting method of
Accounting error corrected Approval procedure
prospective application
2. Debt restructuring
3. Asset replacement
(1) Exchange of non-monetary assets
(2) Replacement of other assets
4. Annuity plan
5. Termination of operation
In RMB
Profits from
termination of
Income tax operation
Item Income Costs Total profits Net profits
expenses attributable to the
owners of the
parent company
Other descriptions
6. Segment information
(1) Determination basis and accounting policy of reporting segment
(2) Financial information of reporting segment
In RMB
Item Inter-segment offset Total
317
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(3) Descriptions on reasons why the Company has no reporting segment or cannot disclose the total assets
and liabilities of each reporting segment, if any
(4) Other descriptions
7. Other important transactions and events that have an impact on investors’ decision-making
8. Others
XVII. Notes to key items in financial statements of the company
1. Accounts receivable
(1) Categorized disclosure of accounts receivable
In RMB
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Category Provision Book Provision
Proportio Proportio Book value
Amount Amount proportio value Amount Amount proportio
n n
n n
Accounts receivable
for which bad-debt 241 ,403. 241 ,403. 241 ,403. 241 ,403.
0.01 % 100.00 % 0.01 % 100.00 %
provision is made 36 36 36 36
individually
Including:
241 ,403. 241 ,403. 241 ,403. 241 ,403.
Entity 1 0.01 % 0.01 %
36 36 36 36
Accounts receivable
for which bad-debt 2 ,908,04 6 ,424,42 2 ,901,62 6 ,927,99 4 ,846,81 6 ,923,152,
99.99 % 0.22 % 99.99 % 0.07 %
provision is made by 9,591.01 2.80 5,168.21 9,417.25 7.94 599.31
group
Including:
1 ,358,82 6 ,424,42 1 ,352,39 1 ,023,14 4 ,846,81 1 ,018,302,
Group by aging 46.72 % 0.47 % 14.76 % 0.47 %
2,492.40 2.80 8,069.60 9,566.63 7.94 748.69
Related party group
1 ,549,22 1 ,549,22 5 ,904,84 5 ,904,849,
in the scope of 53.27 % 85.23 %
7,098.61 7,098.61 9,850.62 850.62
consolidation
2 ,908,29 6 ,665,82 2 ,901,62 6 ,928,24 5 ,088,22 6 ,923,152,
Total 100.00 % 100.00 %
0,994.37 6.16 5,168.21 0,820.61 1.30 599.31
Provision for bad debts made individually:
318
Luxshare Precision Industry Co., Ltd. Annual Report 2021
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion Reason for provision
Entity 1 241 ,403.36 241 ,403.36 100 % It cannot be recovered
Total 241 ,403.36 241 ,403.36 -- --
Provision for bad debts made individually:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion Reason for provision
Provision for bad debts made by group:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Undue 1 ,338,844,558.04 669 ,422.28 0.05 %
1 to 60 days overdue 8 ,650,481.16 432 ,524.06 5.00 %
61 to 120 days overdue 2 ,581,119.38 774 ,335.81 30.00 %
121 to180 days overdue 2 ,885,223.98 1 ,154,089.59 40.00 %
181 to 365 days overdue 4 ,934,117.57 2 ,467,058.79 50.00 %
1 to 2 years(excluding 1year)
Over 2 years 926 ,992.27 926 ,992.27 100.00 %
Total 1 ,358,822,492.40 6 ,424,422.80 --
Descriptions on basis for determining the group:
Provision for bad debts made by group:
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Descriptions on basis for determining the group:
If the bad-debt provision for accounts receivable is made according to the general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ N/A
Disclosure by aging
In RMB
Aging Book balance
Within 1 year (including1 year) 2 ,907,122,598.74
Over 3 years 1 ,168,395.63
3-4 years 1 ,168,395.63
319
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 2 ,908,290,994.37
(2) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
Amount of change in the current period
Category Opening balance Recover or Closing balance
Provision Write off Other
reversal
Provision on an
241 ,403.36 241 ,403.36
individual basis
Provision on a
4 ,846,817.94 1 ,577,604.86 6 ,424,422.80
group basis
Total 5 ,088,221.30 1 ,577,604.86 6 ,665,826.16
Including significant amounts reversed or recovered from the current provision for bad debts:
In RMB
Entity name Amount recovered or reversed Recovery method
(3) Accounts receivable actually written off in the current period
In RMB
Item Write-off amount
Including the write-off of significant accounts receivable:
In RMB
Whether the funds
Nature of accounts Reasons for write Procedures for write are generated by
Entity name Write-off amount
receivable off off related-party
transactions
Descriptions on the write-off of other receivables:
(4) Accounts receivable with top five closing balance - by debtor
In RMB
Closing balance of accounts Proportion in total closing Closing balance of bad-debt
Entity name
receivable balance of accounts receivable provision
Entity 1 1 ,370,318,350.67 47.12 %
Entity 2 521 ,621,195.14 17.94 % 260 ,810.60
Entity 3 142 ,965,001.18 4.92 % 71 ,482.50
Entity 4 91 ,442,885.66 3.14 %
320
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Entity 5 81 ,685,003.81 2.81 % 40 ,842.50
Total 2 ,208,032,436.46 75.93 % --
(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing involvement
None
Other descriptions:
(6) Accounts receivable derecognized due to transfer of financial assets
None
2. Other receivables
In RMB
Item Closing balance Opening balance
Dividends receivable 211 ,543,626.19 11 ,543,626.19
Other receivables 423 ,508,501.65 543 ,164,102.94
Total 635 ,052,127.84 554 ,707,729.13
(1) Interest receivable
1 ) Classification of interest receivable
In RMB
Item Closing balance Opening balance
2 ) Significant overdue interest
In RMB
Whether there is
Borrower Closing balance Overdue time Reasons for delay impairment and its
judgment basis
Other descriptions:
3 ) Bad-debt provision
□ Applicable √ N/A
321
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(2) Dividends receivable
1 ) Classification of dividends receivable
In RMB
Item (or Investee) Closing balance Opening balance
Wan’an Xiexun Electronic Co., Ltd. 11 ,543,626.19 11 ,543,626.19
Lanto Electronic Limited 200 ,000,000.00
Total 211 ,543,626.19 11 ,543,626.19
2 ) Significant dividends receivable with aging over 1 year
In RMB
Whether there is
Reasons for
Item (or Investee) Closing balance Aging impairment and its
non-recovery
judgment basis
3 ) Bad-debt provision
□ Applicable √ N/A
Other descriptions:
(3) Other receivables
1 ) Classification of other receivables by nature
In RMB
Nature of receivables Closing book balance Opening book balance
Reserve fund 33 ,273.76 49 ,663.76
Security deposit 31 ,756,216.84
Import tax rebate receivable 20 ,052,713.03
Other 142 ,559,720.70 191 ,697,001.27
Current account 250 ,035,350.00 332 ,444,406.04
Total 424 ,384,561.30 544 ,243,784.10
2 ）Bad-debt provision
In RMB
Stage I Stage II Stage III
Bad-debt provision Total
12 -month ECL Lifetime ECL (without Lifetime ECL (with credit
322
Luxshare Precision Industry Co., Ltd. Annual Report 2021
credit impaired) unimpaired)
Balance as at January 1,
1 ,079,681.16 1 ,079,681.16
2021
Balance as at January 1,
2021 in the current —— —— —— ——
period
Reversal 203 ,621.51 203 ,621.51
Balance as at December
876 ,059.65 876 ,059.65
31, 2021
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable √ N/A
Disclosure by aging
In RMB
Aging Book balance
Within 1 year (including1 year) 424 ,384,561.30
Total 424 ,384,561.30
3 ) Bad-debt provision made, recovered or reversed in the current period
Bad-debt provision in the current period:
In RMB
Amount of change in the current period
Opening
Category Recover or Closing balance
balance Provision Write off Other
reversal
Group by aging 1 ,079,681.16 203 ,621.51 876 ,059.65
Total 1 ,079,681.16 203 ,621.51 876 ,059.65
Including significant amounts reversed or recovered from the current provision for bad debts:
In RMB
Entity name Amount reserved or recovered Recovery method
4 ) Other receivables actually written off in the current period
In RMB
Item Write-off amount
Including the write-off of significant other receivables:
In RMB
Nature of other Reasons for write Procedures for write Whether the funds
Entity name Write-off amount
receivables off off are generated by
323
Luxshare Precision Industry Co., Ltd. Annual Report 2021
related-party
transactions
Descriptions on the write-off of other receivables
5 ) Other receivables with top five closing balance - by debtor
In RMB
Proportion in total
Nature of Closing balance of
Entity name Closing balance Aging closing balance of
receivables bad-debt provision
other receivables
Entity 1 Current account 250 ,000,000.00 Undue 58.91 %
Equity transfer
Entity 2 142 ,500,000.00 Undue 33.58 % 712 ,500.00
funds
Entity 3 Security deposit 26 ,800,000.00 Undue 6.32 % 134 ,000.00
Entity 4 Security deposit 4 ,216,931.94 Undue 0.99 % 21 ,084.66
Entity 5 Security deposit 412 ,839.90 Undue 0.10 % 2 ,064.20
Total -- 423 ,929,771.84 -- 99.90 % 869 ,648.86
6 ) Receivables involving government grants
In RMB
Name of government Aging at the end of the Estimated time, amount
Entity name Closing balance
grant period and basis of collection
None
7 ) Other receivables derecognized due to transfer of financial assets
None
8 ) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
None
Other descriptions:
3. Long-term equity investments
In RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
324
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Investment in 21 ,141,692,140.2 21 ,113,131,960.4 13 ,406,253,703.4 13 ,377,693,523.6
28 ,560,179.80 28 ,560,179.80
subsidiaries 9 9 2 2
Investment in
joint ventures and 255 ,849,450.14 34 ,372,608.46 221 ,476,841.68 260 ,260,811.77 34 ,372,608.46 225 ,888,203.31
associates
21 ,397,541,590.4 21 ,334,608,802.1 13 ,666,514,515.1 13 ,603,581,726.9
Total 62 ,932,788.26 62 ,932,788.26
3 7 9 3
(1) Investment in subsidiaries
In RMB
Opening Increase and decrease in the current period Closing balance
Closing balance
Investee balance (book Additional Reduced Provision for of provision for
Other (book value)
value) investment investment impairment impairment
ASAP
Technology 271 ,442,772.2 273 ,465,444.2
3 ,004,414.72 981 ,742.65
(Jiangxi) Co., 1 8
Ltd.
Xiexun
243 ,789,479.7 244 ,934,671.3
Electronic 1 ,145,191.62
0 2
(Ji'an) Co., Ltd.
Suining
Luxshare
Precision 2 ,291,444.90 104 ,692.66 2 ,186,752.24
Industry Co.,
Ltd.
Luxshare
Precision 158 ,059,935.3 158 ,059,935.3
Technology Co., 2 2
Ltd.
ICT-LANTO 534 ,084,500.2 453 ,278,000.0 987 ,362,500.2
LIMITED 6 0 6
Luxshare
Precision 32 ,423,829.90 32 ,423,829.90
Limited
Lanto Electronic 3 ,288,818,885 3 ,312,908,584.
24 ,089,698.93
Limited .56 49
Dongguan
Leader 64 ,694,688.88 1 ,147,637.34 65 ,842,326.22
Precision
325
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Industry Co.,
Ltd.
Kunshan
Luxshare
522 ,944,914.6 516 ,652,244.2
Precision 6 ,292,670.44
7 3
Industry Co.,
Ltd.
Wan’an Xiexun
Electronic Co., 40 ,248,495.19 56 ,183.42 40 ,304,678.61
Ltd.
Fujian JK
Wiring Systems 97 ,098,001.20 248 ,878.44 96 ,849,122.76
Co., Ltd..
Ji’an Jizhou
district
Luxshare 8 ,050,100.95 8 ,050,100.95
Electronic Co.,
Ltd.
Xingning
Luxshare
215 ,943.92 159 ,965.41 26 ,003.07 349 ,906.26
Technology Co.,
Ltd.
Luxshare
Precision 768 ,384,558.8 771 ,166,474.2
2 ,781,915.36
Industry 6 2
(Chuzhou), Ltd.
SuK
Kunststofftechni 33 ,746,516.14 33 ,746,516.14
k GmbH
Fengshun
Luxshare
Precision 10 ,114,690.87 25 ,930.81 10 ,140,621.68
Industry Co.,
Ltd.
Shenzhen
Luxshare
3 ,924,994.27 2 ,171,669.55 6 ,096,663.82 28 ,560,179.80
Acoustics
Technology Ltd.
Dongguan
1 ,023,997,667 1 ,030,342,565.
Luxshare 6 ,344,897.56
.53 09
Precision
326
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Industry Co.,
Ltd.
Luxshare
Automation 41 ,355,980.68 4 ,618,875.45 45 ,974,856.13
(Jiangsu) Ltd.
Shenzhen
Luxshare
21 ,000,000.00 21 ,000,000.00
Standard Co.,
Ltd.
Jiangxi
Luxshare
1 ,059,279,991 1 ,076,908,293.
Intelligent 17 ,628,302.21
.07 28
Manufacture
Co., Ltd.
Donguan
Xuntao
-9,372,824.16 1 ,561,501.83 -10,934,325.99
Electronic Co.,
Ltd.
Luxshare
Electronic
2 ,246,910,803 2 ,257,826,412.
Technology 10 ,915,609.05
.19 24
(Kunshan) Co.,
Ltd.
Luxshare
Precision
101 ,391,220.0 101 ,400,809.2
Components 9 ,589.24
4 8
(Kunshan) Co.,
Ltd.
Luxshare
Precision 100 ,975,752.9 102 ,105,631.2
1 ,129,878.28
Industry (Enshi) 7 5
Co., Ltd.
Yongxin County
Boshuo
613 ,382.62 237 ,729.23 851 ,111.85
Electronic Co.,
Ltd.
LUXSHARE-IC
2 ,233,928.58 144 ,092.12 2 ,378,020.70
T 株式会社
Taiwan
103 ,613,239.9 120 ,492,441.4
Luxshare 16 ,879,201.47
3 0
Precision
327
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Limited
Luxshare-ICT,in
26 ,152,599.41 8 ,623,986.15 34 ,776,585.56
c.
Korea
Luxshare-ICT 4 ,069,963.65 1 ,090,328.95 5 ,160,292.60
Co.,Ltd.
LUXSHARE-IC
T EUROPE 458 ,762.29 -276,555.97 182 ,206.32
LIMITED
Merry
Electronics
3 ,496,808.33 1 ,294,333.06 4 ,791,141.39
(Suzhou) Co.,
Ltd.
Kunshan-Luxsh
are RF
22 ,320,648.93 8 ,568,147.74 30 ,888,796.67
Technology Co.,
Ltd.
M&A Merry
Electronics
417 ,479.98 2 ,102,915.10 2 ,520,395.08
(Huizhou) Co.,
LTD.
Jiangxi ASAP
Electronic Co., 1 ,508,715.42 477 ,815.16 1 ,986,530.58
Ltd.
Luxshare
Precision
Industry 682 ,828.16 675 ,585.46 1 ,358,413.62
(Baoding) Co.,
Ltd.
Luxshare
Precision
Industry 1 ,370,774.17 355 ,294.53 1 ,726,068.70
(Shanxi) Co.,
Ltd.
Guangdong
Luxshare
Smart-Link
467 ,029.39 467 ,029.39
Electronic
Technology Co.,
Ltd.
Guangdong 1 ,058,103.73 1 ,058,103.73
328
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare&
Merry
Electronic Co.,
Ltd.
Bozhou Lanto
Electronic 3 ,923,321.03 1 ,049,509.09 4 ,972,830.12
Limited
Kunshan
Luxshare
2 ,052,314.71 760 ,535.58 1 ,291,779.13
Precision Mould
Co., Ltd.
Huzhou Jiuding
Electronic Co., 944 ,286.31 272 ,586.50 1 ,216,872.81
Ltd.
Xinyu Xiexun
Electronic Co., 7 ,286,518.99 3 ,194,304.92 10 ,480,823.91
Ltd.
Luxshare
Precision
Industry (Xi’an)
Co., Ltd.
Luxshare
Precision
130 ,000,000.0 130 ,000,000.0
Industry
0 0
(Suzhou) Co.,
Ltd.
Luxshare iTech
747 ,520,596.6 778 ,806,257.1
(Zhejiang) Co., 31 ,285,660.54
5 9
LTD.
Bozhou Xuntao
Electronic 169 ,968.40 55 ,445.18 225 ,413.58
Limited
Dongguan
Luxshare 883 ,685,555.8 890 ,495,013.9
6 ,809,458.10
Technology Co., 5 5
Ltd.
Xuancheng
Luxshare
Precision 3 ,411,822.28 13 ,619,684.02 17 ,031,506.30
Industry Co.,
Ltd.
329
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Beijing
Luxshare
Acoustic 3 ,563,643.54 1 ,662,117.89 5 ,225,761.43
Technology Co.,
Ltd.
Luxshare
Intelligent
Manufacture 716 ,342,959.9 693 ,171,284.7 1 ,409,514,244.
Technology 7 6 73
(Changshu) Co.,
Ltd.
Xingning
Luxshare
143 ,840.32 38 ,896.21 182 ,736.53
Electronic Co.,
Ltd.
SpeedTech
906 ,496.72 617 ,360.96 1 ,523,857.68
Corp.
Luxshare
Technologies 1 ,872,619.53 -292,938.95 1 ,579,680.58
Limited
Luxshare Smart
Technology 100 ,000,000.0
12 ,000,000.00 88 ,000,000.00
(Rugao) Co., 0
Ltd.
Changshu
Luxshare
Industrial 110 ,210,000.0
30 ,000,000.00 80 ,210,000.00
Investment 0
Management
Co., Ltd.
Kunshan
Luxshare
Enterprise 200 ,000,000.0 200 ,000,000.0
Management 0 0
Development
Co., Ltd.
Luxshare
Precision
Industry 95 ,071.11 95 ,071.11
(Jiangsu) Co.,
Ltd.
330
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Rida Intelligent
Manufacture
Technology 4 ,564,728.72 4 ,564,728.72
（Rugao )
Co.,LTD.
Rikai Computer
5 ,760,562,165 5 ,760,562,165.
Accessories Co.,
.73 73
Ltd.
Luxis
Technology 151 ,471,194.5 151 ,471,194.5
(Kunshan) Co., 2 2
Ltd.
Luxshare
Electronic
Technology 15 ,000,000.00 15 ,000,000.00
(Enshi) Co.,
Ltd.
Liding
Electronic
Technology 55 ,590,269.64 55 ,590,269.64
(Dongguan)
Co., Ltd.
Luxshare
Precision
1 ,000,000.00 1 ,000,000.00
Technology(Xi’
an) Co., Ltd.
Luxis Precision
Intelligent
161 ,382,181.3 161 ,382,181.3
Manufacture
0 0
(Kunshan) Co.,
Ltd.
Luxshare
Precision
400 ,000.00 400 ,000.00
Technology(Nan
jing) Co., Ltd.
Luxsahre
Electronic
340 ,902.08 340 ,902.08
(Shanghai) Co.,
Ltd.
Ri Ming
663 ,622.71 663 ,622.71
Computer
331
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Accessory
(Shanghai) Co.,
Ltd.
Ri Pei Computer
Accessory
1 ,302,245.97 1 ,302,245.97
(Shanghai) Co.,
Ltd.
Sheng-Rui
Electronic
Technology 36 ,362.89 36 ,362.89
(Shanghai)
Limited
Ri Shan
Computer
Accessory 424 ,991.24 424 ,991.24
(Jiashan) Co.,
Ltd.
LUXSHARE-IC
T (VIETNAM) 1 ,790,298.57 1 ,790,298.57
LIMITED
Hangzhou
Xuntao
9 ,999,497.45 9 ,999,497.45
Technology Co.,
Ltd.
13 ,377,693,52 7 ,853,464,562 118 ,026,125.6 21 ,113,131,96
Total 28 ,560,179.80
3.62 .49 2 0.49
(2) Investment in joint ventures and associates
In RMB
Increase and decrease in the current period
Closing
Investme
Other balance
Opening nt profit Closing
Additiona comprehe Declared Provision of
balance Reduced or loss Other balance
Investee l nsive cash for provision
(book investmen recognize changes Other (book
investmen income dividends impairme for
value) t d under in equity value)
t adjustmen or profits nt impairme
equity
t nt
method
I. Joint ventures
II. Associates
Siliconch 22 ,663,5 -394,382. 22 ,269,1
332
Luxshare Precision Industry Co., Ltd. Annual Report 2021
06.55 18 24.37
Zhuhai
Kinwong
203 ,224, -4,016,97 199 ,207, 34 ,372,6
Flexible
696.76 9.45 717.31 08.46
Circuit
Co., Ltd.
225 ,888, -4,411,36 221 ,476, 34 ,372,6
Subtotal
203.31 1.63 841.68 08.46
225 ,888, -4,411,36 221 ,476, 34 ,372,6
Total
203.31 1.63 841.68 08.46
（3） Other descriptions
4. Operating income and operating costs
In RMB
Amount recognized in the current period Amount recognized in the prior period
Item
Income Cost Income Cost
Principal business 9 ,174,890,300.12 8 ,531,671,602.47 11 ,464,276,490.11 10 ,754,493,607.05
Other business 105 ,254,622.90 33 ,510,191.72 100 ,827,039.16 26 ,703,475.62
Total 9 ,280,144,923.02 8 ,565,181,794.19 11 ,565,103,529.27 10 ,781,197,082.67
Income related to information:
In RMB
Contract classification Segment 1 Segment 2 Total
By product types
Including:
By geographical areas of
operations
Including:
By markets or customers
Including:
By contract types
Including:
333
Luxshare Precision Industry Co., Ltd. Annual Report 2021
By the period of
transferring products
Including:
By contract term
Including:
By sales channel
Including:
Total
Information related to performance obligations:
N/A
Information relating to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the incomes corresponding to the contracts signed whose performance has not been commenced or
completed amount to RMB0.00, of which RMB is expected to be recognized in , RMB is expected to be recognized in , and RMB is
expected to be recognized in .
Other descriptions:
5. Investment income
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Long-term equity investment income
2 ,242,183,081.46 3 ,325,246,159.60
accounted for using the cost method
Long-term equity investment income
-4,411,361.63 452 ,498.12
accounted for using the equity method
Investment income from disposal of
-58,000.00
long-term equity investment
Investment income from held-for-trading
30 ,531,053.98 14 ,791,876.12
financial assets during holding period
Income from wealth management products 41 ,433,412.36 69 ,496,746.15
Gains from derecognition of financial assets
-41,003,477.92
measured at amortized cost.
Total 2 ,268,732,708.25 3 ,409,929,279.99
334
Luxshare Precision Industry Co., Ltd. Annual Report 2021
6. Others
XVIII. Supplementary information
Breakdown of non-recurring profit and loss for the current period
√ Applicable □ N/A
In RMB
Item Amount Remarks
Profit or loss from disposal of non-current
-57,241,855.39
assets
Government grants recognized in the current
profit or loss (except for the government
grants which are closely related to the
853 ,542,165.37
company’s normal business operations and
gained at a fixed amount or quantity
according to national uniform standards)
The difference between the original book
Gains from the excess of attributable fair
value and the fair value of long-term
value of identifiable net assets of the
equity investment under cost method
investee over the consideration paid for the 16 ,559,223.33
changed from equity method due to
acquisition of subsidiaries, associates and
inclusion of subsidiaries into the scope of
joint ventures
consolidation.
Profit or loss on assets under entrusted
95 ,298,693.93
investment or management
Except for effective hedging business related
to the company’s normal business
operations, profit or loss from changes in fair
value arising from the holding of
held-for-trading financial assets and 602 ,993,325.33
liabilities, and investment income from
disposal of held-for-trading financial assets
and liabilities, and available-for-sale
financial assets
Other non-operating income and expenses
-12,600,634.71
except the above items
Mainly refer to gains from derecognition
Other profit and loss items satisfying the
-170,939,666.46 of financial assets measured at amortized
definition of non-recurring profit and loss
cost.
Less: Affected quantum of income tax 211 ,043,425.20
Affected quantum of minority interest 61 ,644,659.76
335
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Total 1 ,054,923,166.44 --
Details of other profit and loss satisfying the definition of non-recurring profit and loss
□ Applicable √ N/A
The Company has no other items of profit and loss satisfying the definition of non-recurring profit and loss.
Description of classifying non-recurring profit and loss items enumerated in the Explanatory Announcement No.1 for Public
Company Information Disclosures – Non-recurring Profits and Losses as recurring profit and loss items
□ Applicable √ N/A
336
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2.Return on equity and earnings per share
Earnings per share
Profit in the reporting period Weighted average return on equity Basic earnings per share Diluted earnings per
(RMB/share) (RMB/share)
Net profit attributable to ordinary
22.35 % 1.01 0.99
shareholders of the Company
Net profit after deduction of
non-recurring profit and loss
19.34 % 0.86 0.84
attributable to ordinary
shareholders of the Company
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profit and net assets in financial reports disclosed according to International
Accounting Standards and Chinese Accounting Standards at the same time
□ Applicable √ N/A
(2) Difference of net profit and net asset in financial reports disclosed according to overseas accounting
standards and Chinese Accounting Standards at the same time
□ Applicable √ N/A
(3) Descriptions on the reasons for the differences of accounting data under the accounting standards at
home and abroad, and the name of the overseas institution if difference adjustment is made to the data
audited by an overseas audit institution
4. Others
Luxshare Precision Industry Co., Ltd.
Chairman: WANG Laichun
April 27, 2022
337
