Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxshare Precision Industry Co., Ltd.
Annual Report 2022
2023-027
April 2023
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Annual Report 2022
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 RMB1.30 (inclusive of
tax) per 10 shares to all shareholders on the basis of 7,130,392,419 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 2022
Table of Contents
Section I Important Note, Table of Contents and Definitions ........................................................ 2
Section II Company Profile and Key Financial Indicators ............................................................ 7
Section III Management’s Discussion and Analysis ..................................................................... 11
Section IV Corporate Governance ................................................................................................. 47
Section V Environment and Social Responsibilities ..................................................................... 72
Section VI Significant Matters ........................................................................................................ 96
Section VII Changes in shares and shareholders ........................................................................ 115
Section VIII Preference Shares ..................................................................................................... 122
Section IX Bonds ............................................................................................................................ 123
Section X Financial Report ........................................................................................................... 136
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 2022
Definitions
Terms means Definition
We/us, the Company or Luxshare-ICT means Luxshare Precision Industry Co., Ltd.
Luxshare Limited, founder and
Luxshare Limited means
controlling shareholder of Luxshare-ICT.
ICT-Lanto means ICT-Lanto Limited.
LUXSHARE PRECISION means Luxshare Precision Limited.
Luxshare Precision Industry (Jiangsu)
Luxshare Jiangsu means
Co., Ltd.
Luxshare Precision Industry (Shanxi)
Luxshare Shanxi means
Co., Ltd.
Dongguan Luxshare Precision Industry
Luxshare Dongguan means
Co., Ltd.
Luxshare Precision Industry (Suzhou)
Luxshare Suzhou means
Co., Ltd.
Luxshare Precision Industry (Chuzhou),
Luxshare Chuzhou means
Ltd.
Kunshan Luxshare Precision Industry
Luxshare Kunshan means
Co., Ltd.
Luxshare Precision Industry (Baoding)
Luxshare Baoding means
Co., Ltd.
Xuancheng Luxshare Precision Industry
Luxshare Xuancheng means
Co., Ltd.
Yancheng Luxshare Precision Industry
Luxshare Yancheng means
Co., Ltd.
Luxshare Precision Industry (Enshi) Co.,
Luxshare Enshi means
Ltd.
Luxshare Vietnam means Luxshare-ICT (Vietnam) Limited
Luxshare-ICT (Van Trung) Company
Luxshare Van Trung means
Limited
Luxshare Nghe An means Luxshare-ICT (Nghe An) Limited
Shenzhen Luxshare Acoustics
Luxshare Electroacoustic means
Technology Ltd.
Luxshare Smart Manufacturing means Luxshare iTech (Zhejiang) Co., LTD.
Guangdong Luxshare & Merry
Luxshare-Merry means
Electronics Co., Ltd.
ASAP Jiangxi means ASAP Technology (Jiangxi) Co., Ltd.
Xiexun Jiangxi means Xiexun Electronic (Ji’an) Co., Ltd.
Jiangxi Luxshare Intelligent Manufacture
Smart Manufacturing Jiangxi means
Co., Ltd.
Lanto Bozhou means Bozhou Lanto Electronic Limited
Xuntao Bozhou means Bozhou Xuntao Electronic Limited
Meite Suzhou means Merry Electronics (Suzhou) Co., Ltd.
Huzhou Jiuding means Huzhou Jiuding Electronic Co., Ltd.
Lanto Kunshan means Lanto Electronic Limited
Kunshan RF means Kunshan-Luxshare RF Technology Co.,
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd.
Liding Electronic Technology
Liding Dongguan means
(Dongguan) Co., Ltd.
Luxcase Precision Technology
LuxcaseICT Yancheng means
(Yancheng) Co., Ltd.
Xiexun Wan’an means Wan’an Xiexun Electronic Co., Ltd.
Luxshare Intelligent Manufacture
Smart Manufacturing Changshu means
Technology (Changshu) Co., Ltd.
Fujian JK means Fujian JK Wiring Systems Co., Ltd..
Xingning Electronics means Xingning Luxshare Electronic Co., Ltd.
Luxsan Kunshan means Luxsan Technology (Kunshan) Co., Ltd.
Bisaisi Automotive Technology (Suzhou)
BCS Suzhou means
Co., Ltd.
SpeedTech means SpeedTech Corp.
Luxshare Automation Jiangsu means Luxshare Automation (Jiangsu) Ltd.
Dongguan Luxshare Technology Co.,
Dongguan Luxshare Technology means
Ltd.
Luxshare Electronic Technology
Luxshare Electronic Kunshan means
(Kunshan) Co., Ltd.
Luxshare Electronic Technology (Enshi)
Luxshare Electronic Enshi means
Co., Ltd.
TIME Interconnect Technology means TIME Interconnect Technology Limited
Huarong Technology means Shenzhen Huarong Technology Co., Ltd.
Articles of Association of Luxshare
AOA means
Precision Industry Co., Ltd.
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Section II Company Profile and Key Financial Indicators
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
E-mail 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
Shenzhen Stock Exchange (www.szse.cn)
Company’s annual report
Media and website disclosing the Company’s The Securities Times, the Shanghai Securities News and
annual report http://www.cninfo.com.cn
Place for keeping annual report Securities Affairs Office of the Company
IV. Changes in registration particulars
Unified social credit code 91440300760482233Q
Changes in main business since the listing of the Company (if No
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
Rooms 1, 2 & 3, 4/F, No. 61 East Nanjing Road, Huangpu
Office address of accounting firm
District, Shanghai
Name of accountants signing this report LI Jing and DAN Jie
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
□Applicable N/A
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
2022 2021 Y/Y % Change 2020
Operating income
214,028,394,291.44 153,946,097,790.40 39.03% 92,501,259,211.54
(RMB)
Net profit attributable
to shareholders of the 9,163,104,849.54 7,070,520,386.57 29.60% 7,225,462,752.58
listed company (RMB)
Net profit attributable
to shareholders of the
listed company after
8,442,052,945.85 6,015,597,220.13 40.34% 6,088,901,850.86
deduction of
non-recurring gain or
loss (RMB)
Net cash flow from
operating activities 12,727,610,319.34 7,284,766,917.00 74.72% 6,873,211,486.05
(RMB)
Basic earnings per
1.29 1.01 27.72% 1.03
share (RMB/share)
Diluted earnings per
1.28 0.99 29.29% 1.01
(RMB/share)
Weighted average Increase by 0.65
23.00% 22.35% 30.29%
return on equity percentage points
December 31, 2022 December 31, 2021 Y/Y % Change December 31, 2020
Total assets (RMB) 148,384,319,074.71 120,572,098,167.88 23.07% 70,012,753,551.75
Net assets attributable
to shareholders of the 45,342,897,318.53 35,288,554,748.72 28.49% 28,101,816,234.56
listed company (RMB)
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Whether the lower of the net profit before and after deduction of non-recurring gain or loss in the past three accounting years has
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 non-recurring 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 income 41,599,710,846.10 40,361,448,994.51 63,291,092,079.16 68,776,142,371.67
Net profit attributable
to shareholders of the 1,803,320,580.17 1,980,710,225.65 2,616,244,464.13 2,762,829,579.59
listed company
Net profit attributable
to shareholders of the
listed company after
1,523,761,959.82 1,868,038,609.22 2,586,792,722.51 2,463,459,654.30
deduction of
non-recurring profit or
loss
Net cash flow from
1,278,178,911.17 1,144,968,241.78 538,167,178.29 9,766,295,988.10
operating 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 non-recurring gains or losses
Applicable □ N/A
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
In RMB
Item 2022 2021 2020 Remark
Gain or loss on disposal of non-current assets
(including allowance for impairment of assets that 40,397,780.40 -57,241,855.39 -35,503,173.93
has 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 602,294,263.90 853,542,165.37 450,749,695.89
provided in fixed amount or quantity continuously
according to the applicable polices of the country)
Interest in the fair value of the acquirees’
identifiable net assets at the date of acquisition in
16,559,223.33
excess of the investment cost of the relevant
subsidiaries, associates and joint ventures
Gain or loss on assets under entrusted investment or
50,525,057.66 95,298,693.93 113,778,335.78
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 for trading, financial liabilities held for trading 543,762,585.57 602,993,325.33 837,100,369.42
and available-for-sale financial assets, except for
effective hedges held in the ordinary course of
business
Other non-operating income and expenses 11,040,674.64 -12,600,634.71 30,554,498.37
Other gain or loss within the meaning of
-377,143,056.77 -170,939,666.46
non-recurring gain or loss
Less: Effect of income tax 100,226,804.81 211,043,425.20 214,489,873.68
Effect of minority interest (after tax) 49,598,596.90 61,644,659.76 45,628,950.13
1,136,560,901.7
Total 721,051,903.69 1,054,923,166.44 --
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Other items of gain or loss within the meaning of non-recurring gains or losses:
□Applicable N/A
We do not have any other item of gain or loss within the meaning of non-recurring gains or losses.
If the Company classifies any item of non-recurring gain or loss defined by or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss, please
explain the reason.
□Applicable N/A
We have not classified any item of non-recurring gain or loss defined by or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss in the
reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Section III Management’s Discussion and Analysis
I. Situations of our industry during 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 and data center, 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
As affected by global inflation, geopolitics and other factors in 2022, the consumer electronics industry remains challenging and
the overall market demand is subdued. However, the integration of emerging technologies, including the future 5G, Internet of
Things, artificial intelligence, health monitoring, virtual reality and new display, and new consumer electronics accelerates the
upgrading of consumer electronic products, leads to new product forms, and continues to promote the growth of the consumer
electronics market size.
(II) Communication and data center
Like the consumer electronics industry, the year of 2022 witnessed a challenging experience for the communications industry
with the demand slowing in 2022 due to geopolitics, global inflation, global economic downturns and the impact of varying degrees
of IC shortages on ODMs. However, in the long run, a series of technological innovations such as AIGC, the emergence of new
technologies, and the commercialization and popularization of 5G in the future will put forward higher requirements for computing
power and transmission. While promoting the expansion of the hardware terminal market, it will also further drive the rapid growth
of related industries such as the Internet of Things, computing power networks, data centers, base station RF, power management,
and thermal management. It is expected that the communications market will continue to maintain a rapid growth trend in the future.
(III) Automotive electronics
With the increasing demand for automobile safety, comfort and intelligence, the market size of new energy vehicles and
intelligent vehicles is rapidly expanding. According to Clean Technica data, the number of traded global new energy vehicles
exceeded 10 million for the first time, namely 10,091,164, a year-on-year increase of 56.4%, with a penetration rate being increased
to 14%., it is expected to reach a key threshold of 50% by 2035. At the same time, the survey data from relevant institutions showed
that the current global market penetration rate of new cars equipped with intelligent network connectivity functions is about 45%, and
it is expected that the market size will reach approx. 60% by 2025. Given the rapid development of automobile electrification,
networking and intelligence, the value chain and supply chain of new energy vehicles and intelligent vehicles are experiencing
accelerated restructuring. With the entry of new players and emerging automakers, the automotive parts market has become diverse
and the relatively closed supporting system is gradually being broken. Vehicle manufacturers are increasingly accepting and
welcoming parts with strong competitiveness, especially in areas such as automotive wiring harness/connectors, vehicle electronics,
intelligent cockpits, and automatic driving. Automotive parts companies with consumer experience have accumulated rapid iteration
capabilities, cost control awareness, timely response experience and understanding of the ecosystem in consumer electronics products,
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
which has greatly helped vehicle manufacturers promote and apply new products and technologies, and enhance their
competitiveness. At present, the electrification and intelligence of China’s automotive market is showing high growth, with the
development speed leading the world, which offers a platform for cultivation and development of Chinese Tier1 automotive
companies to go global.
(IV) Our position in the industry
During the reporting period, we ranked first on the list of 2022 backbone enterprises in electronic components 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 “2022 Forbes China Most Innovative Companies”, among others.
II. Our main business during the reporting period
We are committed to diversified layout of various product lines in different application scenarios as follows by deeply focusing
on and developing consumer electronics, automotive, communications, and medical industries, and continuously exploring value
through vertical integration from components, modules to systems in a forward or reverse direction:
1. In the office scenario, we have fully utilized the opportunity of interconnection of all things in the digital era to deeply deploy
smart display screens, smart conference systems, AR/VR/MR, smart speakers, laptops, controllers, tablet PCs, smartphones, wireless
charging, and security cameras in our cable assembly, connectors, wireless charging modules, acoustic modules, screen modules,
VCMs, vibration motors, SIPs, Mini LEDs, antenna modules and structural components, as well as system-level assembled products.
1.智能显示器 Smart display screen 9.控制器 Controller
2.TV 盒子 TV box 10.转换坞 Conversion dock
3.智能会议系统 Smart conference system 11.平板电脑 Tablet PC
4.AR/VR/MR 12.智能手写笔 Smart stylus
5.智能音响 Smart speaker 13.智能手机 Smartphone
6.蓝牙键盘 Bluetooth keyboard 14.无线充电 Wireless charging
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
7.笔记本电脑 Laptop 15.安防摄像头 Security camera
8.蓝牙鼠标 Bluetooth mouth
2. In the intelligent wearable scenario, as consumers pay further attention to sports and health, we have deployed product
interfaces such as AR glasses, bone conduction headphones, wireless bluetooth headphones, smart wristbands, and smart watches to
track and monitor consumers’ health data;
1.AR 眼睛 AR glass 4.智能指环 Smart ring
2.骨传导耳机 bone conduction headphone 5.智能手环 Smart wristband
3. 无 线 蓝 牙 耳 机 Wireless bluetooth 6.智能手表 Smart watch
headphone
3. In the indoor home application scenario, we pay great attention to consumers’ continuous pursuit of home life quality in areas
such as entertainment, audio-visual, beauty and fitness. We have also fully deployed product interfaces such as smart vacuum
cleaners, gamepads, smart adapters, electronic cigarettes, routers, smart speakers, e-readers, floor-cleaning robots, beauty devices,
TAG trackers and VR;
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
1.智能吸尘器 Smart Vacuum cleaner 9.智能音箱 Smart speaker
2.游戏手柄 Gamepad 10.智能音箱机器人 Smart speaker robot
3.智能转接头 Smart adapter 11.电子书 E-reader
4.充电宝 Power bank 12.扫地机器人 Floor-cleaning robot
5.电子烟 electronic cigarette 13.美容仪 Beauty device
6.智能插座 Smart socket 14.TAG 追踪器 TAG tracker
7.手机无线充 Mobile phone wireless charger 15.VR
8.路由器 Router
4. We have extended the capability of different product interfaces in multiple application scenarios to outdoor application
scenarios, so as to meet consumer demand for mobile device equipment and corresponding energy products through product lines
such as outdoor power supply, self-balancing scooters, electric scooters, smart car locks, electric car chargers and smart helmets;
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
1.户外电源 Outdoor power supply 4.智能车锁 Smart car lock
2.平衡车 Self-balancing scooter 5.电动车充电器 Electric motorcycle charger
3.电动滑板车 Electric scooter 6.智能头盔 Smart helmet
5. In the computing center scenario, we have extended from multi-category components and modules to complete server
assembly, and continue to provide original development and have a wide and deep patent layout in low-speed, high-speed IO
interface optical and electric transmission, and power products. Further, we take the lead in the R&D of high-speed connection
solution architecture matching high computing power data centers based on CPO/CPC technology. At the same time, with the
constant increase in the amount of transmitted data, thermal management issues arise. Last year, we successfully deployed a thermal
management system module, achieving vertical integration of complete data center solutions;
1.ACC/DAC 8.挂耳 Hanger
2.SSIO 9.水冷板 Water-cooled plate
3.HSIO 10.风扇 Fan
4.AOC 11.散热器 Heat sink
5.Transceiver 12.温控解决方案 Temperature control solution
6.光跳线 Optical fiber patch cord 13.UPS 单柜/锂电/双柜 UPS single cabinet / lithium /
7.线缆模组 Cable module double cabinet
14.通信电源：站点插柜、室内/室外柜
Communication power supply: site plug-in cabinet,
indoor/outdoor cabinet
6. In the RF communications scenario, we deeply integrated and focused on product lines such as antennas, CPE, tower
amplifier and RF units;
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
1.基站天线 Base station antenna 5.AAU
2.塔放/合路器 Tower amplifier/combiner 6.pRRU
3.射频拉远单元 Remote radio unit 7.室分天线 Indoor antenna
4.直放站 Repeater 8.CPE
7. Against the electrification, networking, and intellectualization of automobiles, we have extended our product layout to
multiple-category product lines inside and outside the cockpit through more than a decade of R&D and business exploration, which
now comprehensively cover core components such as automotive wire harnesses, connectors, smart network, intelligent cockpits, and
new energy vehicle power systems;
结合集团优势资源 丰富产品系列 铸就汽车 Tier 1 业务成长动力
Make advantage of the Group’s strengths and resources & Enrich products & Empower the growth momentum of the Tier 1
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
automobile manufacturer
线束 Wiring harness 连接器 Connector
整车线束 Wiring harness of the vehicle 低压连接器 Low-voltage connector
特种线束 Special wiring harness 高压连接器 High-voltage connector
充电枪 Charge gun 高速连接器 High-speed connector Busbar
新能源 New energy 智能网联 Intelligent network
DU 路测单元 Road test unit
BDU 车载通讯单元 Vehicle communication unit
逆变器 Inverter 智能天线 Smart Antenna
V2X
智能驾舱 Smart cockpit
多媒体仪表 Multimedia instrument
信息娱乐系统 Infotainment system
AR-HUD
DMS/OMS
域控制器 Domain controller
无线充电 Wireless charging
USB
电源网络隔离器 Power network isolator
智能制造 Smart manufacturing
嵌件注塑 Insert molding
PCBA
8. Starting with consumable products, we entered the medical product line. In reliance on our comprehensive abilities in light,
sound, electricity, magnetism, heat, and RF in the consumer electronics and communications industries accumulated over the years,
we have begun to rapidly integrate equipment product lines such as surgery and imaging.
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
监护类 Monitoring
血氧线 Wire used for oximeter
心电线 Wire used for ECG machine
温度线 Wire for temperature recording instrument
手术类 Surgery
吻合器线 Wire used for anastomosis
电刀线 Wire for electric knife
吻合器连接器 Anastomosis connector
除颤类 Defibrillation
体外除颤线 External defibrillation wire
体控除颤线 Body-controlled defibrillation wire
除颤器零件 Parts of defibrillator
设备内部类 Internal device
影像类（超声）Imaging (ultrasound)
影像类（MR）Imaging (MR)
各类医疗设备机内线 In-machine wire of medical devices of all kinds
超声换能器线 Wire used for ultrasound transducer
磁共振成像线圈线缆 Magnetic resonance imaging coil cable
III. Analysis of core competencies
(1) Digital application stimulates new potential of intelligent manufacturing
Given the continuous deep integration of the next generation of information technology and manufacturing, we have always
insisted on intelligent manufacturing as the underlying logic, and devoted great energy to promoting automated processes and digital
applications to empower the process development, personnel organization and production modes.
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
For the digital applications, we have introduced systems such as SAP, PLM, MES and WMS to further optimize the
management processes and production processes throughout the entire lifecycle from design, R&D, production to marketing,
procurement, warehousing and after sales, conduct precise, scientific and intelligent customer-oriented management, and constantly
strive to improve our production efficiency and product yield.
In terms of automated processes, we actively leverage the significant advantages of machine vision in precision, speed,
repeatability, reliability, and information aggregation to achieve precise positioning and error detection of precision electronic
components in process, active coordination and positioning of parts and fixtures in assembly, and machine AI-assisted inspection of
component product appearance. By relying on real-time feedback of measurement data from machine vision, we enhance the deep
self-learning ability of automated equipment and create a closed-loop control for automated processes.
(II) Forward-looking layout opens up a new growth curve
Under the guidance of our “three five-year” strategy, we always grasp the market dynamics, respond to industry growth trend,
take coordinated development as our fundamental purpose, make forward-looking layouts around the main business, and are
dedicated to providing the market with a perfect and integrated solution of industrial chains. On the one hand, capitalizing on our
comprehensive capabilities deeply accumulated and continuously optimized in the consumer electronics field, we have built “process
+ underlying technology” structure to continuously explore the mass market of new and old products for core customers and other
consumer electronics customers. In addition, we conduct horizontal expansion to empower automotive and communication sectors,
which highlights our differentiated advantages in relevant sectors, and effectively supports the implementation of commercial plans,
thereby achieving our diversified product layout. On the other hand, with many years of efforts in market segments, 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. We
make continuous efforts to explore product value by way of vertically integrating components, modules, and system-level assembly
in a forward or reverse direction.
In the era of the internationalization of industrial chains, our globalization layout is developing in depth. In addition to
Guangdong, Jiangxi, Jiangsu, Zhejiang, Anhui and other provinces in China, we have established mature production capacity bases
and R&D centers in such countries and regions as Vietnam, India and Mexico. While serving customers nearby and enhancing
product cost advantages, these bases and centers have gathered overseas sophisticated talents and offered strong support for the team
to explore high-end markets and provide high-quality services to customers.
(III) Scientific research innovation creates new momentum for growth
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
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
frontier technologies. Our R&D expenses are mainly divided into investment in cutting-edge technology and in product iteration. Our
investment in cutting-edge technology mainly focuses on our medium- and long-term product and business planning layout. About
30% of the overall R&D expenses are invested in innovative research and development in cutting-edge technology areas such as
underlying materials, processes, and production procedures, which contributes to enabling 30% of our products to enter the
“unpopulated area” of the global industry in the next 20 years. Our investment in product iteration focuses on R&D investment from
concept to NPI (New Product Introduction) of new solutions and products. Our R&D expenses and achievements have been
continuously increasing. To be specific, our R&D expenses totaled RMB20.834 billion in the past three years, including RMB8.447
billion during the reporting period; in terms of our R&D achievements, we have a total of 4,526 invention patents, an increase of
46.47% from the end of 2021.
(IV) The “dual carbon” concept generates new green vitality
To achieve the “dual carbon” goal in our production and operation, we actively practice the concept of green and low-carbon
development, and adhere to the strategy of “energy conservation and emission reduction and use of renewable energy as the main
method and carbon offset as a supplement” to gradually achieve the organic combination of carbon neutrality in our own operation,
industrial chain and value chain. As of the end of the reporting period, a total of our 43 plants passed ISO14001 environmental
management system certification in 2008, 9 plants passed ISO 50001 energy management system certification, 11 plants were rated
as national or provincial-level green factories, and 12 subsidiaries obtained UL 2799 zero waste to landfill certification with a
platinum rating.
Based on 1.5°C target led by the Science Based Targets initiative (SBTi), we steadily advance the action plan for carbon
accounting, reduction, and neutrality in accordance with the climate action plan roadmap. What’s more, we regularly review and
adjust our climate change strategy based on actual business operations, and adopt such methods as low-carbon transformation of
energy structure, optimization of waste emission management, rooftop photovoltaic construction, direct purchase of green electricity,
and green energy investment to contribute to our green and sustainable development.
(V) Building hubs for talents
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. On the one hand, 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-breakthrough 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
20
Luxshare Precision Industry Co., Ltd. Annual Report 2022
collective honor. At present, we have recruited outstanding talents in materials, automation, electronic information, molds, business
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
(1) Consumer electronics business
As affected by external factors such as geopolitics and global inflation in 2022, the consumer demand both at home and abroad
declined to varying degrees. What’s more, the production capacity of our important system manufacturers in central China was
blocked in the fourth quarter, causing a short-term passive decline in our sales of some components and module products, thereby
resulting in certain fluctuations in overall utilization rate. Despite severe external challenges, we consistently strengthened our
strategic thinking, maintained firm strategic resolve, and enhanced strategic planning. With these efforts, we achieved breakthroughs
in system assembly businesses such as smart mobile terminals, health wear, acoustic wear, as well as in core components and module
products such as smart terminal display modules, system packaging, and voice coil motors. With strong product R&D capabilities,
leading automation process development levels, efficient lean manufacturing capabilities, and high-quality delivery standards, we
continue to receive high praise and full affirmation from core customers, leading to an annual increase in market share for product
lines. In terms of new products and businesses, we fully recognize the development potential of industries such as human-machine
interaction and virtual reality in different fields including industry, transportation, medical care, and entertainment in the future.
During the reporting period, we actively made arrangements in this aspect and worked with top customers to make plans and seize
the golden development opportunity of the next five years. Facing highly complex new product interfaces, we continue to conduct
in-depth process analysis and technical decomposition to convert complex structures into multiple mature process flows, so as to help
customers achieve product development and launch through sound, light, electricity, magnetism, and other technology empowerment.
(2) Automotive business
Given the further “electrification”, “intelligence” and “networking” in the automotive industry in 2022, China’s new energy
vehicle industry is developing rapidly, and the proportion of automotive electronics in the manufacturing cost of the entire vehicle
increases significantly. We replied on a strong intelligent manufacturing platform, fully utilized the technology and customer
resources accumulated over many years in the fields of consumer electronics and communication fields, and took technology
development and customer empowerment as our orientation. Further, through the layout of multiple domestic production bases and
R&D centers, as well as the efficient synergy of domestic and foreign resources, we achieved trans-sector empowerment in the field
of automotive electronics. Driven by the trend of “electrification, networking, and intelligence” in the automotive industry, our
automotive business-related products (high/low-voltage wire harnesses, special wire harnesses, charging guns, automotive connectors,
21
Luxshare Precision Industry Co., Ltd. Annual Report 2022
intelligent cockpit domain controllers, LCD instruments, AR HUDs, and DMSs, etc.) have strong market demand, showing rapid
growth in performance. What’s more, Luxshare Limited, our controlling shareholder, purchased shares in Chery Holding Group Co.,
Ltd. and its subsidiaries (“Chery Group”) on February 11, 2022. Meanwhile, in order to build a cutting-edge R&D design, mass
production platform and export channels for our core automotive components and achieve the medium- and long-term goal of
becoming a Tier1 manufacturer of automotive components, we and Chery Group signed a Strategic Cooperation Framework
Agreement. Through complementary advantages with Chery Group, we rapidly improve our comprehensive ability as a Tier1
manufacturer of core automotive components, quickly optimize our products and increase product sales.
(3) Communication business
Our overall communication business showed rapid growth in 2022, but due to a series of geopolitical factors, many restrictions
such as overseas business environment and industry access policies hindered our continuous expansion of system product business in
North America. Nonetheless, we achieved fruitful results in core components such as electric connectors, optical connectors, optical
modules, and air-cooled/liquid-cooled heat dissipation components in both domestic and overseas markets. Meanwhile, we have
extensive and in-depth patent layouts in high-speed interconnect product-related technologies and actively leads or participates in the
preparation of industry standards such as the CPO optical interconnect standards and the international standards for equipment
professional interface QSFP112. Given the medium- and long-term rapid growth of global cloud service market, the new generation
of information technologies, such as cloud computing, big data, the Internet of Things, and artificial intelligence are applied
worldwide, further broadening the demand for related core components in the communication field. During the reporting period, we
continued to strengthen our R&D investment in core components in the communication field and devoted ourselves to improving our
basic capabilities of high/low-frequency electric connectors, optical connectors, optical modules, heat dissipation temperature control
equipment, and RF communication products. With “application of a generation, development of a new generation and research of the
newer generation” as the core product strategy, we have established a capability module for various fields. To further enhance vertical
integration of industries, promote trans-sector technological convergence and increase coverage of product lines, we took control of
TIME Interconnect Technology Limited through a tender offer on February 12, 2022, which further improves the strategic layout of
our interconnect products in the fields of communications, medical care, automotive and industry.
2. Revenue and cost
(1) Components of operating revenue
In RMB
2022 2021
Y/Y %
% of operating % of operating change
Amount Amount
revenue revenue
Total operating revenue 214,028,394,291.44 100% 153,946,097,790.40 100% 39.03%
By segment
Computer interconnect products
11,279,925,261.07 5.27% 7,856,595,729.78 5.10% 43.57%
and precision components
Automotive interconnect products 6,149,359,869.13 2.87% 4,142,675,174.19 2.69% 48.44%
22
Luxshare Precision Industry Co., Ltd. Annual Report 2022
and precision components
Communication interconnect
292.55
products and precision 12,834,368,214.51 6.00% 3,269,476,642.60 2.12%
%
components
Consumer electronics 179,666,857,997.07 83.95% 134,637,995,600.46 87.46% 33.44%
Other connectors and other
4,097,882,949.66 1.91% 4,039,354,643.37 2.62% 1.45%
business
By product
Computer interconnect products
11,279,925,261.07 5.27% 7,856,595,729.78 5.10% 43.57%
and precision components
Automotive interconnect products
6,149,359,869.13 2.87% 4,142,675,174.19 2.69% 48.44%
and precision components
Communication interconnect
292.55
products and precision 12,834,368,214.51 6.00% 3,269,476,642.60 2.12%
%
components
Consumer electronics 179,666,857,997.07 83.95% 134,637,995,600.46 87.46% 33.44%
Other connectors and other
4,097,882,949.66 1.91% 4,039,354,643.37 2.62% 1.45%
business
By region
Domestic market 20,224,747,347.20 9.45% 10,493,247,599.10 6.82% 92.74%
Overseas market 193,803,646,944.24 90.55% 143,452,850,191.30 93.18% 35.10%
By sales mode
Direct sales 214,028,394,291.44 100.00% 153,946,097,790.40 100.00% 39.03%
(2) Segments, products, regions or sales models representing more than 10% of operating revenue or profit
Applicable □N/A
In RMB
Y/Y %
Y/Y % Y/Y %
Gross Change in
Operating income Operating cost Change in Change in
margin operating
operating cost gross margin
revenue
By segment
Consumer electronics 179,666,857,997.07 159,057,762,186.53 11.47% 33.44% 33.28% 0.11%
By product
Consumer electronics 179,666,857,997.07 159,057,762,186.53 11.47% 33.44% 33.28% 0.11%
By region
Overseas market 193,803,646,944.24 170,964,362,210.55 11.78% 35.10% 35.01% 0.06%
By sales mode
Direct sales 214,028,394,291.44 187,928,880,285.38 12.19% 39.03% 39.16% -0.08%
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
23
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Segment Item Unit 2022 2021 Y/Y % change
Sales volume KPCS 651,927 692,107 -5.81%
Computer interconnect products Output KPCS 691,581 735,779 -6.01%
and precision components Inventories KPCS 39,654 43,672 -9.20%
Sales volume 1,000 sets 323.444 233,339 38.62%
Automotive interconnect products Output 1,000 sets 352,333 256,542 37.34%
and precision components Inventories 1,000 sets 28,889 23,203 24.50%
Sales volume KPCS 484,370 380,329 27.36%
Communication interconnect Output KPCS 522,561 413,793 26.29%
products and precision components Inventories KPCS 38,191 33,465 14.12%
Sales volume KPCS 3,727,774 3,495,842 6.63%
Output KPCS 4,233,740 3,773,559 12.19%
Consumer electronics
Inventories KPCS 505,965 277,717 82.19%
Sales volume KPCS 385,129 467,754 -17.66%
Output KPCS 416,004 508,283 -18.16%
Other connectors and other business
Inventories KPCS 30,874 40,529 -23.82%
Analysis of changes in the relevant data over 30% year on year
Applicable □N/A
The sales volume of automotive interconnect products and precision components is primarily due to business growth, while the
increase in inventory of consumer electronics is to meet the need for inventory reserves.
(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
Segment
Segment
In RMB
2022 2021
Y/Y %
Segment Item % of % of
Amount Amount change
operating cost operating cost
Computer interconnect
Cost of
products and precision 8,991,105,125.09 4.78% 6,296,204,929.34 4.66% 42.80%
sales
components
Automotive interconnect Cost of
5,159,940,778.89 2.75% 3,475,111,291.70 2.57% 48.48%
products and precision sales
24
Luxshare Precision Industry Co., Ltd. Annual Report 2022
components
Communication interconnect
Cost of
products and precision 11,405,956,391.67 6.07% 2,700,268,416.55 2.00% 322.40%
sales
components
Cost of 159,057,762,186. 119,338,834,375.1
Consumer electronics 84.64% 88.37% 33.28%
sales 53 5
Other connectors and other Cost of
3,314,115,803.20 1.76% 3,237,917,280.14 2.40% 2.35%
business sales
Remark
None
(6) Change in the scope of consolidation during the reporting period
Yes □No
Refer to “Section X Financial Report” - “VIII. Changes in 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) 177,860,435,488.62
Proportion of aggregate sales revenue from top 5 customers to
83.09%
annual sales revenue
Proportion of aggregate sales revenue from related parties
0.00%
among top 5 customers to annual sales revenue
Particulars of top 5 customers:
No. Name of customer Sales revenue (RMB) % of annual sales revenue
1 Customer 1 156,832,833,386.90 73.28%
2 Customer 2 6,508,408,117.69 3.04%
3 Customer 3 5,767,145,742.11 2.69%
4 Customer 4 5,553,794,391.18 2.59%
5 Customer 5 3,198,253,850.74 1.49%
Total -- 177,860,435,488.62 83.09%
Other information of major customers:
□Applicable N/A
Major suppliers of the Company:
Aggregate purchase amount from top 5 suppliers (RMB) 116,395,215,652.31
Proportion of aggregate purchase amount from top 5 suppliers
62.96%
to annual purchase cost
Proportion of aggregate purchase amount from related parties
0.00%
among top 5 suppliers to annual purchase cost
Particulars of top 5 suppliers:
25
Luxshare Precision Industry Co., Ltd. Annual Report 2022
No. Name of supplier Purchase amount (RMB) % of annual purchase cost
1 Supplier 1 107,417,124,303.85 58.11%
2 Supplier 2 3,469,445,795.86 1.88%
3 Supplier 3 1,947,273,086.88 1.05%
4 Supplier 4 1,872,417,885.96 1.01%
5 Supplier 5 1,688,954,579.76 0.91%
Total -- 116,395,215,652.31 62.96%
Other information of major suppliers:
□Applicable N/A
3. Expenses
In RMB
Y/Y %
2022 2021 Reason of material change
change
Primarily due to increase in the scope of
Sales expenses 831,398,139.60 789,908,163.80 5.25%
consolidation and business growth
Primarily due to increase in the scope of
consolidation and business growth. Some R&D
General expenses 5,075,668,085.35 3,741,908,783.50 35.64%
expenses are reclassified into general and
administrative expenses
Primarily due to the increase in borrowing
Financial expenses 882,721,138.77 554,665,874.05 59.14% interest and the fluctuations in foreign exchange
rates
Primarily due to increase in the scope of
R&D expenses 8,447,038,946.21 6,642,300,402.74 27.17%
consolidation and R&D investments
Primarily due to increase in differences of the
107.09
Income tax expenses 667,318,205.34 322,238,643.64 exercise prices of incentive shares and in total
%
profits
4. R&D investments
Applicable □N/A
Description of major R&D Expected effect on the future
Purpose Progress Objectives
project development of Company
Through the implementation of this
project, the R&D of high-precision
optical and sensor compound
To add new structural design
anti-shake camera motors can help
methods and introduce
R&D of high-precision customers solve the problem of
automated production Completed and To achieve the
optical and sensor blurry photos, and improve the
equipment into key put into mass mass production of
compound anti-shake image stability of photos and
production processes, thereby production project products
camera motor videos, also break the monopoly of
improving production
foreign giants in high-precision
efficiency and stability
smartphone camera technology and
reduce supply chain risks in the
industry
R&D of high-precision Injection molding technology Completed and To achieve the Through the implementation of this
low-pressure injection is a process in which molten put into mass mass production of project, the large-scale
26
Luxshare Precision Industry Co., Ltd. Annual Report 2022
molding technology for low-pressure injection production project products industrialization can be achieved
smartwatches molding material is injected, quickly with the help of our
cooled, and separated under intelligent production experience,
pressure to produce and through the deep upstream and
semi-finished or finished downstream cooperation with
products of a certain shape. domestic equipment and material
Low-pressure injection suppliers, this project will become
molding technology is a an important part of the
packaging process that uses “chain-building,
low injection pressure to chain-supplementing,
inject hot melt glue into the chain-extending, and
mold in a molten state and chain-strengthening” of the
quickly (3-60 seconds) domestic consumer electronics
solidify it. The packaged industry, driving the development
products have the effects of of the regional industry
insulation, temperature
resistance, dust resistance,
waterproofness, moisture
resistance, impact resistance,
shock absorption, and
chemical corrosion resistance.
To solve the current
Completed
inconvenience in the use of
consumer testing The product is successfully
wireless bluetooth headset,
and being applied, researched and developed, and is
such as being easy to lose or
R&D of bluetooth headset and two of To achieve the granted the patent, and its
difficulty in finding. This
function module based on product mass production of application in the bluetooth headset
project mainly researches and
mobile phone positioning processing project products can optimize the customers’
develops a functional module
designs have been product functions and enhance the
for bluetooth headset that
granted the patent product competitiveness
uses mobile phone
for utility model
positioning.
The product is successfully
researched and developed, and is
R&D of TWS headset To realize the
granted the patent, which can boost
body temperature To increase product functions functional
Completed the product competitiveness and
monitoring and heart rate and improve its performance applications and
also enhance the value and
monitoring functions obtain the patent
leadership of the Company in the
field of this product
R&D of wearable devices The product is successfully
for digital biomarkers of researched and developed, and is
To realize the
depression screening, granted the patent, which can boost
To increase product functions functional
high-altitude sickness Completed the product competitiveness and
and improve its performance applications and
prevention, mobile stress also enhance the value and
obtain the patent
detection and monitoring leadership of the Company in the
system field of this product
R&D of wearable devices
The product is successfully
for traffic accident
researched and developed, and is
prevention behavior To realize the
granted the patent, which can boost
detection, air quality To increase product functions Partially functional
the product competitiveness and
detection, and application and improve its performance completed applications and
also enhance the value and
of dynamic sensors in obtain the patent
leadership of the Company in the
vehicle navigation and
field of this product
positioning
R&D of wearable devices To realize the The product is successfully
To increase product functions
for virtual screen Completed functional researched and developed, and is
and improve its performance
extension application, applications and granted the patent, which can boost
27
Luxshare Precision Industry Co., Ltd. Annual Report 2022
smart housekeeper obtain the patent the product competitiveness and
application, intelligent also enhance the value and
home fire monitoring leadership of the Company in the
system, integration of field of this product
electronic nose technology
for detecting health hazard
gas
The product is successfully
researched and developed, and is
To realize the
R&D of battery-free RFID granted the patent, which can boost
To increase product functions functional
tag antenna for cold chain Completed the product competitiveness and
and improve its performance applications and
logistics also enhance the value and
obtain the patent
leadership of the Company in the
field of this product
The product is successfully
researched and developed, and is
To realize the
R&D of millimeter wave granted the patent, which can boost
To increase product functions functional
transmitting receiver for Completed the product competitiveness and
and improve its performance applications and
sensing applications also enhance the value and
obtain the patent
leadership of the Company in the
field of this product
All-in-one VR headset device,
also known as VR all-in-one
machine, allows users to fully
The R&D project The advanced process will enhance
experience 3D stereoscopic To achieve the
R&D of all-in-one VR has passed the our competitiveness in the industry,
visual effects in a virtual application and
glass/VR all-in-one design, debugging thereby laying the technical and
world without any input or mass production of
machine and verification market foundation for subsequent
output devices. It provides a the product
stage market exploration
good user experience and is
reasonably priced, so it has
been widely promoted.
This project of Luxshare
Its vibration level Electroacoustic takes the lead in
The R&D project
R&D of single-sided drive To fundamentally solve the is about 2 times the industry, which will have a
has entered the
shock-absorbing problem of the whole lower than that of considerable impact on the
small batch trial
micro-speakers machine resonance conventional development of future shock
production stage
speakers absorption technology and market
demand
To enable game consoles to
connect with gaming
peripherals, including display Completed and To achieve the This project will expand the
R&D of game console
screens, wired controllers, put into mass mass production of business fields of the Group’s
extension base technology
power supplies and USB flash production the project product products
disk, and to enhance the user
experience of game consoles
This project will expand and
Completed and To achieve the
R&D of automotive To develop new products and improve automotive product lines
put into mass mass production of
FAKA wiring harness technologies and enhance business growth
production the project product
momentum
This project will expand and
R&D of high-voltage Completed and To achieve the
To develop new products and improve automotive product lines
harness for new energy put into mass mass production of
technologies and enhance business growth
vehicles production the project product
momentum
R&D of AC charging gun To develop new products and Completed and To achieve the This project will expand and
2 of new energy vehicle technologies put into mass mass production of improve automotive product lines
28
Luxshare Precision Industry Co., Ltd. Annual Report 2022
mode production the project product and enhance business growth
momentum
The R&D project has
successfully enabled the
control of power battery
current output through
automotive microcontrollers
(MCUs), meeting In the stage of This project will expand and
To achieve the
R&D of automotive MCU international standards sample improve automotive product lines
mass production of
products TIA/EIA-568D and installation testing and enhance business growth
the project product
IEC-60603-7. and validation momentum
The electrical performance of
the product has a 100% pass
rate for conductivity, and IC
chip has passed the
functionality testing
Luxshare will gain irreplaceable
experience in terms of entering the
To develop and
R&D of 48V light hybrid 48V mild hybrid field, and its
To develop and apply 48V apply 48V
electric motor controller Completed subsequent similar products will
platform series products platform series
housing have a leading advantage, which
products
will improve its business
competitiveness
To achieve proprietary
Development of intelligent To achieve the The vertical integration will be
System-in-Package (SIP) and In the stage of
cockpit domain control mass production of further realized and the business
make breakthrough in the SIP sample
based on 8155-chip the project product competitiveness will be improved
technology
To develop new products and
technologies:
To isolate the faulty part and
provide a continuous and This project will expand and
To achieve the
stable power supply to the In the stage of improve automotive product lines
Power isolation switch mass production of
active safety system in order sample and enhance business growth
the project product
to achieve Level 3 momentum
autonomous driving in case
that automotive power supply
or circuit is abnormal.
To achieve the
This project will expand and
To enter the motor winding mass production of
DMI water-cooled motor improve automotive product lines
field and lay a foundation for In progress the project product
winding for stator and enhance business growth
producing motor assembly and accumulate
momentum
product experience
To optimize the process and
improve product performance
To be applied in To fully enter the new energy
and design on the basis of the
New generation of high the more vehicle market, Luxshare has a
first-generation high-voltage In progress
voltage connector mass-produced complete high-voltage connection
connectors, take the lead in
automotive models solution
the industry, become the main
product
The R&D project
The vehicle-grade energy storage
1200W vehicle To enable energy storage has passed the To achieve the
products will be developed and the
front-mounted energy products in the automotive trial production mass production of
market for vehicle front-mounted
storage device field debugging and the project product
energy will be explored
verification stage
29
Luxshare Precision Industry Co., Ltd. Annual Report 2022
The R&D project To meet the
has passed the standard power The expandable server
To be applied in the server
CRPS2000W design, debugging supply for communication track will have
power supplies
and verification mainstream data wide versatility
stage centers
R&D of defibrillation
To enhance the stability of To achieve the This project will enhance business
cable harness for medical In the stage of
defibrillator cable harness and mass production of growth momentum to increase our
cardiopulmonary trial production
achieve the independent R&D the project product market share in the medical cables
resuscitation devices
The interface is an external I/O
interface independently developed
To meet the PCIe
by Luxshare Technologies, and
5.0 standard, with
Luxshare Technologies has
the possibility to
proprietary IP ownership. The
meet PCIe 6.0
To solve the bottlenecks of current upgrade in server
R&D of ASM external standard in the
speed upgrading and size In the stage of interconnect solutions and the
high-speed connectors and future,
limitations of existing mass production architectural changes brought by
cable components based and promote the
external PCIE high-speed and delivery CXL will offer more opportunities
on PCIe5.0 self-developed
cables. for high-speed PCIe external
interface as a
interconnect solutions. Luxshare’s
standard interface
ASM interconnect solutions have
accepted by
been recognized by domestic
customers.
interconnect network customers
and put into mass production.
The interface is an external I/O
interface independently developed
To meet the PCIe by Luxshare Technologies, and
5.0 standard, with Luxshare Technologies has
the possibility to proprietary IP ownership. The
meet PCIe 6.0 interface has completed the
To solve the bottlenecks of
standard in the T/CECA75-2022 standard under
the speed upgrading, size In the stage of
OmniEdge CRE future, the China Electronics Component
limitations and compatibility testing and
connectors and promote the Association together with industry
of existing internal PCIE verification
self-developed customers and other manufacturers.
high-speed cables.
interface as a Multiple domestic and foreign
standard interface customers are verifying Luxshare’s
accepted by CRE products. This solution will
customers. help customers solve current
product problems and reduce
quality risks.
To enable product
performance to
meet the PCIe 5.0 In terms of Luxshare Technologies’
standard, with the Riser module, Luxshare
possibility to meet Technologies is only one partner
PCIe 6.0 standard for OCSP I/O module of some top
DC-MHS and OCSP server Achieved the in the future, and customers. The products meet the
PCIe Cable Riser &
modular solutions, Riser small patch enable module SI performance standards defined
Module
cables, and modules delivery structure to be in by top customers, comply with
line with the OCSP OCSP assembly structure
standardized standards, and can be delivered in
chassis scheme in modular form and assembled in L6
order to be modules.
delivered as an
integrated unit.
QSFP112 MSA product To develop the next In the stage of To enter the As a leading member of the QSFP
30
Luxshare Precision Industry Co., Ltd. Annual Report 2022
series generation of 112G testing and high-speed 112G MSA specification for the
Pam4 high-speed Ethernet I/O verification Ethernet 112G I/O first time, our position in the fields
connectors, AOCs, and cable connector, optical of communication connector,
products communication optical product, and copper cable
and copper cable will be greatly improved,
markets. enhancing the customers’
recognition of us.
The product scheme meets the
requirements on the latest
generation of CPU platform put
To achieve the
forward by a top customer, has
To improve the CPU heat In the stage of standardization and
been recognized by the customer
Eagle Stream cold plates dissipation efficiency of testing and the mass
and entered the list of
servers verification production of the
recommended suppliers, and
project product
jointly released a white paper on
the cold plate scheme together with
the customer.
With the
advantages such as
To realize the optoelectronic small size, high
conversion in the optical speed, and low
communication system, power
The innovations of this project in
convert electrical signals into consumption, the
network architecture, physical
R&D of 5G wireless optical signals at the Completed and 5G communication
layer optical devices, network
communication optical transmitting end, transmit put into mass optical module can
protocols and other aspects will
module them through optical fibers to production be applied in
reduce our costs and enhance
the receiving end, and then communication
business growth momentum.
convert the optical signals fields such as data
into electrical signals at the centers,
receiving end. transmission
networks and
mobile broadband.
1. Independent
bare wire design
2. Independent
1. To fill the gap of 112G product
connector design
design in China
To design 112G PAM4 signal 3. Independent
2. To double the signal
transmission cables based on high-speed circuit
R&D of external transmission rate under the premise
mainstream OSFP high-speed design and
high-speed cable printed of the same volume packaging,
copper cable interface types Completed simulation analysis
circuit boards based on support the highest single-channel
in order to meet the data technology
112G transmission rate 112G PAM-4 signal transmission,
center’s high throughput and 4. Process and and be compatible with 25G NRZ
bandwidth requirements manufacturing and 56G PAM-4 signal
control to ensure transmission downward.
the stability of
product
performance
1. Leveraging the
To develop small package 1. To achieve high-speed
processing ability
single-channel 112G optical single-channel 112G signal
R&D of hot-swappable of DSP, a single
modules that meet market transmission based on the silicon
400G optical transceiver product has the
demand, expand technology optical technology platform
module based on the Completed ability to expand
platforms, and expand 2. Advanced PCB materials, dense
four-channel QSFP-112 its application
product sequences to the next integration of high-speed signal
form factor modes and adapt to
generation of the technology processing for small packaging,
different scenarios
platform and power network design
2. With a single
31
Luxshare Precision Industry Co., Ltd. Annual Report 2022
laser light source, 3. Intensive layout and heat
four optical signals dissipation treatment
can be distributed
3. To be
compatible with
the latest
generation of
software control
interface protocols
Leveraging the platform of 5G
edge industrial gateways and the
R&D of field-level 5G In the stage of To achieve the
To increase product functions promotion of industrial
edge computing intelligent small-scale trial mass production of
and improve its performance interconnection and Industry 4.0,
industrial gateway production the project product
the project will increase the
product market share
To improve
miniaturization of
base station
antenna units, The dual-frequency base station
reduce the antenna of this project is currently
R&D of high-performance Product
To increase product functions influence between the mainstream application
base station antennas for development has
and improve its performance high and low direction in the market, with high
communication systems been completed
frequencies applicability and broad market
(decoupling), and prospects.
increase the
isolation of the
array
To reduce the volume and
weight, and improve
In the stage of To achieve the This project will expand market
R&D of 5G lightweight production efficiency of 5G
small batch mass production of shares and enhance business
integrated filter filters in order to enhance the
production the project product growth momentum
competitiveness of 5G filter
products
Completed, put
The development of new into mass
energy technologies has production and
continued to expand the granted the patent
Research based on a new market space for new energy for design To achieve the
This project will improve the
energy power cable charging guns and new The product has mass production of
product competitiveness
technology principle energy vehicle charging obtained the the project product
plugs, and also promoted the VDE/CCC/UL/U
demand for special power K/PSE/BIS and
cable components other national
certifications
Processing and The R&D project To achieve the This project will expand the market
To develop new products and
development of titanium has completed mass production of shares and enhance the business
technologies
alloy metal shell mass production the project product growth momentum
Processing and The R&D project To achieve the This project will expand the market
To develop new products and
development of titanium has completed mass production of shares and enhance the business
technologies
alloy metal keypad mass production the project product growth momentum
Particulars of R&D personnel
2022 2021 Y/Y % change
Number of R&D personnel (person) 18,421 16,103 14.39%
32
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Proportion of R&D personnel to total
7.77% 7.05% 0.72%
number of employees
Education background of R&D personnel
Undergraduate 8,327 5,602 48.64%
Master 332 302 9.93%
Other 9,762 10,199 -4.28%
Age of R&D personnel
Below 30 9,417 7,377 27.65%
30-40 7,706 8,339 -7.59%
Particulars of R&D expenses:
2022 2021 Y/Y % change
Amount of R&D expenses
8,447,038,946.21 6,642,300,402.74 27.17%
(RMB)
Proportion of R&D expenses to
3.95% 4.31% -0.36%
operating revenue
Amount of R&D expenses
0.00 0.00 0.00%
capitalized (RMB)
Proportion of capitalized R&D
0.00% 0.00% 0.00%
expenses to total R&D expenses
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 2022 2021 Y/Y % change
Sub-total of cash inflows from
243,587,978,384.02 152,974,773,173.48 59.23%
operating activities
Sub-total of cash outflows from
230,860,368,064.68 145,690,006,256.48 58.46%
operating activities
Net cash flow from operating
12,727,610,319.34 7,284,766,917.00 74.72%
activities
Sub-total of cash inflows from
10,037,921,670.41 59,103,742,247.41 -83.02%
investing activities
Sub-total of cash outflows from
23,364,287,513.52 67,483,404,233.19 -65.38%
investing activities
Net cash flows from investing
-13,326,365,843.11 -8,379,661,985.78 59.03%
activities
Sub-total of cash inflows from
76,864,295,489.69 42,545,854,141.42 80.66%
financing activities
Sub-total of cash outflows from 68,708,047,308.24 42,935,782,234.50 60.03%
33
Luxshare Precision Industry Co., Ltd. Annual Report 2022
financing activities
Net cash flows from financing
8,156,248,181.45 -389,928,093.08 -2,191.73%
activities
Net increase in cash and cash
8,390,881,701.43 -1,543,267,723.26 -643.71%
equivalents
Analysis of main causes of material changes in the related data
□Applicable N/A
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
Whether or
Amount % of total profit Reason not
sustainable
Income from investments and wealth
management products classified as
Investment income 998,278,358.77 8.95% No
financial assets at fair value through
profit or loss
Gain or loss on changes in Investment income on financial assets
13,625,720.11 0.12% No
fair value at fair value through profit or loss
Impairment of inventories and fixed
Impairment loss on assets -846,822,131.05 -7.59% No
assets
Revenue from penalty for violations
Non-operating income 34,312,299.74 0.31% and recovery of scrap value of No
abandoned assets
Non-operating expenses 30,805,374.33 0.28% Donations, compensations and penalties No
Gain on disposal of assets 47,931,529.63 0.43% Disposal of production equipment No
Other gains 602,294,263.90 5.40% Government grants related to income No
Loss on credit impairment -47,181,938.93 -0.42% Loss allowance on accounts receivable No
VI. Analysis of assets and liabilities
1. Material changes in components of assets
In RMB
December 31, 2022 January 1, 2022
Reason of material
% of total % of total Y/Y % Change
Amount Amount change
assets assets
Cash and bank
19,367,209,441.41 13.05% 14,204,618,186.43 11.78% 1.27%
balances
Optimization of
Accounts receivable 26,043,354,859.19 17.55% 31,623,185,946.25 26.23% -8.68% recoveries from
customers
34
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Contract assets 0.00% 0.00% 0.00%
Some inventories have
been sold in the first
quarter of 2023 due to the
Inventories 37,363,329,476.66 25.18% 20,900,755,733.15 17.33% 7.85%
expansion in scale of our
operations and increase
in inventory reserves
Investment properties 92,782,410.06 0.06% 59,000,690.72 0.05% 0.01% Increase in housing rental
Recognition of income
Long-term equity from investments in
2,000,007,642.66 1.35% 1,125,605,226.03 0.93% 0.42%
investments associates by equity
method
Expansion in the scale of
Fixed assets 44,026,022,703.69 29.67% 34,113,259,322.43 28.29% 1.38%
our operations
Construction in Unaccepted equipment
2,695,377,794.32 1.82% 3,685,336,499.02 3.06% -1.24%
progress and buildings
Right-of-use assets 941,749,814.66 0.63% 425,011,542.28 0.35% 0.28% Leased buildings
Replenishment of
Bank borrowings 14,911,899,668.93 10.05% 11,919,635,337.99 9.89% 0.16% working capital due to
expansion in the scale
Goods payments received
Contract liabilities 501,765,453.24 0.34% 268,506,246.98 0.22% 0.12%
in advance
Replenishment of the
Long-term funds required for
9,205,313,060.94 6.20% 5,025,096,193.09 4.17% 2.03%
borrowings investment due to the
expansion of scale
Lease payment net of the
Lease liabilities 800,739,041.51 0.54% 315,093,483.55 0.26% 0.28% unrecognized finance
charge
Expansion in the scale of
our operations and
Trade payables 49,786,483,552.54 33.55% 45,416,165,667.67 37.67% -4.12%
increase in purchase
orders
Analysis of high proportion of overseas assets:
□Applicable N/A
2. Assets and liabilities at fair value
Applicable □N/A
In RMB
Impairment
Gain or loss Aggregate
loss Amount Amount
on changes in changes in
Opening recognized acquired in sold in the Other Closing
Item fair value in fair value
balance in the the reporting reporting changes balance
the reporting recorded
current period period
period in equity
period
Financial assets
1. Financial assets
1,991,199, 102,504,713. 8,390,295,5 9,157,772,8 1,326,226,
held for trading
461.99 71 01.05 26.29 850.46
(excluding derivative
35
Luxshare Precision Industry Co., Ltd. Annual Report 2022
financial assets)
2. Derivative 115,918,64 -88,878,993.6 27,039,649
financial assets 3.05 0 .45
4. Other investments 235,976,1 154,880,31 50,000,000. 440,106,99
749,467.66
in equity instruments 48.42 1.90 00 2.66
Subtotal of financial 2,343,094, 13,625,720.1 154,880,31 8,440,295,5 9,158,522,2 1,793,373,
assets 253.46 1 1.90 01.05 93.95 492.57
Investment in equity 5,700,000. 30,000,000. 35,700,000
instruments 00 00 .00
2,348,794, 13,625,720.1 154,880,31 8,470,295,5 9,158,522,2 1,829,073,
Total
253.46 1 1.90 01.05 93.95 492.57
44,276,885.5 44,318,321
Financial liabilities 41,436.00
0 .50
Other changes
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
Closing balance of carrying
Item Reasons for restriction
amount
Cash and bank balances 2,054,791,011.90 Issue of notes and letter of credit
Notes receivable 469,338,331.89 Financing from pledge of notes receivable
Accounts receivable 1,049,804,176.80 Financing from pledge of accounts receivable
Equity investment 5,781,943,543.70 Financing from pledge of equity
Fixed assets 1,596,425,969.25 Financing from mortgage of fixed assets
Intangible asset 547,767,902.77 Financing from pledge of land use right
Held-for-trading financial assets 60,000,000.00 Financing from pledge of held-for-trading financial assets
Total 11,560,070,936.31
VII. Analysis of investments
1. Overall situation
Applicable □N/A
Amount of investment in 2022 (RMB) Amount of investment in 2021 (RMB) Y/Y % Change
1,166,241,440.00 7,623,854,176.00 -84.70%
2. Major equity investments acquired in the reporting period
□Applicable N/A
36
Luxshare Precision Industry Co., Ltd. Annual Report 2022
3. Major non-equity investment that have not yet been completed in the reporting period
□Applicable N/A
4. Investment in financial assets
(1) Securities investment
Applicable □N/A
In RMB
Gain or
loss on
Opening Aggregate Amount Amount Gain or Closing
Method changes
Initial balance changes in acquired sold in loss in balance Source
Type of Security Short of in fair Accounti
investment of fair value in the the the of of
security code name measur value in ng item
cost carrying recorded reporting reporting reporting carrying funds
ement the
amount in equity period period period amount
reporting
period
Investme
Stock
nt in
listed on Tony Self-o
22,500,000 Fair 210,278 132,100, 274,560,1 132,312, 342,379, other
domestic 603595 Elect 0.00 0.00 wned
.00 value ,829.12 428.80 70.59 842.10 257.92 equity
or overseas ronic funds
instrume
market
nts
Investme
Stock
nt in
listed on Self-o
SDM 50,000,000 Fair 22,480,0 19,108,00 50,000,0 22,480,0 72,480,0 other
domestic 430755 0.00 0.00 wned
C .00 value 00.00 0.00 00.00 00.00 00.00 equity
or overseas funds
instrume
market
nts
72,500,000 210,278 154,580, 293,668,1 50,000,0 154,792, 414,859,
Total -- 0.00 -- --
.00 ,829.12 428.80 70.59 00.00 842.10 257.92
(2) Investment in derivatives
Applicable □N/A
1) Investment in derivatives for the purpose of hedging during the reporting period
Applicable □N/A
In RMB 0’000
% of ending
Gain or loss on Amount Amount balance to
Initial changes in fair Aggregate changes acquired in sold in the net asset
Closing
Type of derivative investment value during in fair value the the as at the end
amount
cost the reporting recorded in equity reporting reporting of the
period period period reporting
period
37
Luxshare Precision Industry Co., Ltd. Annual Report 2022
1,827,774.3 1,777,380 55,577.5
Forward 5,184.08 54,182.69 -1,282.78 1.23%
1 .88 1
1,428,474.2 1,804,727 21,590.2
Option 397,843.68 2,454.98 -79.79 0.48%
8 .7 6
3,256,248.5 3,582,108 77,167.7
Total 403,027.76 56,637.67 -1,362.57 1.71%
9 .58 7
Whether there’s any material
change in the accounting
policies and accounting
principles for hedge business No material change
in the reporting period as
compared with the preceding
reporting period
Actual gain or loss in the 1) The actual loss from our investment in derivatives in the reporting period for the purpose of hedging is
reporting period RMB -13.6257 million.
We conduct foreign exchange derivative transactions for the purpose of fixing costs, avoiding and
Description of hedging effects preventing foreign exchange and interest rate risks. During the reporting period, our overall hedging effect
was in line with expectations.
Source of funds Self-owned funds
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
Analysis of risks associated financial derivative transactions, to control the risks associated with such transactions.
with the derivatives held in
3. We carefully examine the terms of contracts entered into with the relevant banks, and strictly implement
the reporting period
the risk management policy to prevent legal risks.
(including without limitation
4. We continuously follow up on the changes in the market price or fair value of the relevant foreign
market risk, liquidity risk,
exchange derivatives, promptly assesses the changes in risk exposures of such foreign exchange derivatives,
credit risk, operational risk
reports to the management on a regular basis, promptly reports the abnormal situations discovered, calls
and legal risk) and related risk
attention to the relevant risks, and takes the appropriate emergency measures.
control 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 Change in the fair value of a foreign exchange derivative is the difference between its fair market price in
value of derivatives, the the month in which the delivery date determined by the Company falls and its contract price.
specific approaches,
assumptions and parameters
used shall be disclosed)
Whether or not involved in
N/A
any litigation
Disclosure date of the
announcement of the Board of
Directors approving the February 21, 2022
investment in derivatives (if
any)
38
Luxshare Precision Industry Co., Ltd. Annual Report 2022
The Company conducts foreign exchange derivative transactions for the purpose of avoiding foreign
exchange risk arising from fluctuations in the foreign exchange rates of RMB, and effectively controlling the
Special opinion issued by the
uncertainties of costs caused by foreign exchange risk. The Company has established the Business
independent directors
Management Policy Regarding Financial Derivative Transactions, to enhance risk management and control
regarding the Company’s
over foreign exchange derivative transactions. In addition, the Company only provides self-owned funds,
investment in derivatives and
rather than any offering proceeds, as deposit for derivative transactions. The review, voting and other
related risk control measures
procedures relating to such transactions have complied with the Company Law, the AOA and other
applicable regulations.
2) Investment in derivatives for the purpose of speculation during the reporting period
□Applicable N/A
No investment in derivatives for the purpose of speculation existed during the reporting period.
5. Use of offering proceeds
□Applicable N/A
None of proceeds has been used 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 controlled and investee companies
Applicable □N/A
Major subsidiaries and investee companies representing more than 10% of the net profit of the Company
In RMB 0’000
Operati
Registered Total Net Operatin Net
Company Type Main business ng
capital assets assets g income profits
profit
Purchase and sale of electronic products,
Luxshare
Subsid data lines, connection lines, connectors, USD5,000,0 7,029,22 817,027 19,190,2 213,123 201,804
Precision
iary computer and peripherals, plastic and 00 0.12 .91 16.10 .33 .03
Limited
hardware products.
Sales and services in respect of internal
ICT-Lanto Subsid and external connection lines for IT, USD153,29 5,732,33 523,941 5,193,47 157,699 137,945
Limited iary communication and consumer electronic 0,323 5.66 .08 9.47 .29 .04
applications, and precision connectors.
39
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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.
Licensed items: production of Class II
medical devices; Class II value-added
telecommunications services. General
Lanto items: manufacturing of automotive
Subsid RMB2,320, 2,061,86 799,294 2,540,75 137,504 130,198
Electronic components and accessories; research and
iary 000,000 3.62 .62 6.01 .05 .73
Limited development of automotive components;
wholesale of automotive components and
accessories; sale of automotive
components and accessories; sale of
mechanical components and spare parts;
manufacturing of opto-electronic
components; sale of opto-electronic
components; research and development of
special electronic materials; research and
development of household appliances;
research and development of motorcycle
components; manufacturing of lighting
equipment; manufacturing of transformers,
rectifiers and inductors; manufacturing of
computer software, hardware and
peripheral devices; manufacturing of
power transmission, distribution and
control equipment.
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 (precision ≥ 0.05mm), metal product
molds, non-metal product molds and
standard parts for molds; production of
Luxcase
high-temperature resistant molded
Precision
Subsid insulating materials, stamped hardware RMB6,264, 3,134,85 1,270,0 7,418,68 216,407 200,061
Technology
iary parts, rivets, shafts, mechanical 312,296 6.93 00.39 0.74 .84 .82
(Yancheng)
components and other components for 3C
Co., Ltd.
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. General items:
40
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Manufacturing of mobile terminal devices;
manufacturing of communication
equipment; manufacturing of electronic
components; manufacturing of forgings
and powder metallurgy products;
manufacturing of computer software,
hardware, and peripheral devices; retail of
computer software, hardware, and
auxiliary equipment.
Subsidiaries acquired and disposed of during the reporting period
Applicable □N/A
Method of acquisition or Effect on the production, operation and results of
Company name
disposal the Company taken as a whole
No significant effect on the production, operation
Luxshare Precision Industry (Hubei) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Shenzhen Sanhe Rongyu Technology Co., Ltd. Purchase of shares
and results of the Company taken as a whole
Jiangxi Luxshare Intelligent Manufacture Co., Ltd. No significant effect on the production, operation
Newly established
Kunshan Branch and results of the Company taken as a whole
Dachuang Precision Intelligent Manufacture (Kunshan) No significant effect on the production, operation
Purchase of shares
Co., Ltd. and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Precision Industry (Wuhu) Co., Ltd. Newly established
and results of the Company taken as a whole
Dachuang Precision Intelligent Manufacture (Dongguan) No significant effect on the production, operation
Newly established
Co., Ltd. and results of the Company taken as a whole
No significant effect on the production, operation
Xingning Luxshare Technology Co., Ltd. Daping Branch Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
LUXSHARE PRECISION SINGAPORE PTE.LTD. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Rechuan Technology (Huizhou) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
TIME Interconnect Technology Limited Purchase of shares
and results of the Company taken as a whole
No significant effect on the production, operation
Speedtech Intelligence Co., Ltd. Newly established
and results of the Company taken as a whole
Dachuang Precision Intelligent Manufacture (Dongguan) No significant effect on the production, operation
Newly established
Co., Ltd. Dongkeng Branch and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare New Energy (Anhui) Co., Ltd. Newly established
and results of the Company taken as a whole
Xuancheng Luxshare Precision Industry Co., Ltd. No significant effect on the production, operation
Newly established
Xiamen Branch and results of the Company taken as a whole
No significant effect on the production, operation
Shenzhen Huarong Technology Co., Ltd. Purchase of shares
and results of the Company taken as a whole
No significant effect on the production, operation
TIME Interconnect Server Technology Limited Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Precision Industry Co., Ltd. Dongguan Branch Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Fengshun Luxshare Intelligent Manufacture Co., Ltd. Newly established
and results of the Company taken as a whole
41
Luxshare Precision Industry Co., Ltd. Annual Report 2022
No significant effect on the production, operation
Lisen Precision Technology (Kunshan) Co., Ltd. Joint venture
and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Automotive Technology (Shanghai) Co., LTD Joint venture
and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Precision Industry (Hefei) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Shantou Luxshare Technologies Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
SUK-PLASTICS S.R.L. Sale of shares
and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Electronic Service (Zhejiang) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Xingning Luxshare Technology Co., Ltd. Luofu Branch Newly established
and results of the Company taken as a whole
Jiashan Luxshare Business Management Service No significant effect on the production, operation
Newly established
Partnership (LP) and results of the Company taken as a whole
No significant effect on the production, operation
Huiju Dachuang Information (Shanghai) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Luxshare Precision Industry (Mingguang) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Luxcase Precision Technology (Kunshan) Co., Ltd. Newly established
and results of the Company taken as a whole
No significant effect on the production, operation
Jiashan Luxshare Intelligent Equipment Co., Ltd. Newly established
and results of the Company taken as a whole
Particulars of significant controlled and investee companies
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
Refer to I. Situations of our industry in the reporting period under Section III Management’s Discussion and Analysis.
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
42
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
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 Tier1 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 Tier1 capabilities on the
basis of cooperative 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 2022, we always stood in awe of market opportunities and challenges. 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 the context of complicated and volatile external situation in 2023, we will always adhere to our main business and strive to
accurately grasp the “changes” and “persistence” in the new development stage. By deeply understanding changes, overall trend and
development opportunities, we will firmly seize the initiative of high-quality growth. In the future, 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, 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.
In the field of consumer electronics, we will continue to explore existing customers and products, and consolidate the foundation.
On this basis, we will use our comprehensive development capabilities of underlying technologies and processes accumulated in the
field of consumer electronics to continuously empower and differentiate products. In addition, through the stacking of our
multi-category components and module products, we will create more ecological combinations in different application scenarios,
including upgrading the functions of existing products, and deeply empowering the integration of complex processes and multiple
technologies for new product interfaces. In addition, we will deeply analyze our existing service capabilities from the perspectives of
core components, modules and system-level products of different terminal products, conduct in-depth research on and offer precise
services to different customers with different needs and different scale volumes. Meanwhile, in reliance on forward-looking
predictions of demand for consumer electronics and continuous improvement of existing consumer pain points, we will make
43
Luxshare Precision Industry Co., Ltd. Annual Report 2022
breakthroughs take the lead in red ocean competition while overtaking competitors on a bend in the blue ocean exploration.
With respect to the automotive field, we will continue to cooperate with our domestic and foreign brand customers in the
development of components. Capitalizing on our customer platform, product matrix and manufacturing capabilities accumulated in
the consumer electronics and communication fields, and on the basis of automotive “nervous” system, we will further expand the
product lines of connectors, new energy, smart cabin, smart interconnect and other products. Meanwhile, in reliance on the vehicle
ODM platform jointly established with Chery and possible cooperation with more platforms in the future, we will continue to expand
more frontier R&D, design and mass production platforms and accesses to the overseas market, so as to win an opportunity to grow
from 0 to 1. Also, we will leverage our advantages to take part in the competition and to have our tier-1 products demonstrate more
inherent value in the market competition, and are committed to achieving our medium- and long-term goal of becoming a Tier1
supplier of global automotive components in the next three five-year.
In the communication field, the global AI boom is expected to drive the market demand for servers and related components and
modules with computing power at the core. In the future, with the large-scale launch of multimodal pre-trained models and related
derivative applications, such as natural language processing (NLP) and computer vision (CV) in the AI+GC era, the massive data
flow will increasingly depend on high-performance computing power and high-speed networks of data centers, which also provides
new opportunities for the development of high-speed interconnection technology. Facing innovative market opportunities, we will
deeply analyze the core value of the industrial chain, accurately grasp the key links that truly have the entry barriers and
technological autonomy, and target domestic and overseas top customers having demand to quickly form differentiated competitive
advantages. Under the guidance of this strategy, we will continue to strengthen R&D and innovation of related core technologies in
the fields such as network communication and base station radio frequency, accurately grasp the transformation trend of emerging
technologies of core components in data/super-computing centers such as electrical connection, optical connection and
air-cooled/liquid-cooled heat dissipation components, strive to improve the ability to provide high value-added products and services
to global leading customers, and open up more growth curves for the Company.
4. Capital required for future development strategy and capital utilization plan
As of December 31, 2022, our equity-debt ratio was 60.38%. In 2023, we will continue to promote the high-quality development
of our business in a solid and orderly manner, and we still have a need for funds in the expansion of new markets and investments of
new projects. 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 fully consider the effective
use of financing instruments at different periods according to the requirements of our development strategy and reasonably adjust our
asset and liability structure so as to create more value for our shareholders.
5. Future risks
(1) Risk of fluctuation of macro economy
The numerous uncertainties existing in the global macro environment at present, such as the trade frictions between China and
the United States, worsening geopolitical situation and extensive geopolitical struggles. Adverse factors in the macroeconomic
environment might increase the downward pressure on the global economy, and lead to elevated inflation in major developed
economies, which will significantly suppress household income, purchasing power, and consumption demand. If the uncertainties of
the macro environment continue for a long time, the industry and the Company will be impacted and face certain challenges.
(2) Exchange rate risk
At present, our revenue from the overseas market constitutes a large proportion in our total operating revenue, and our overseas
transactions are mainly settled in US Dollars. Our sales on the overseas market totaled RMB85,046,280,900, RMB143,452,850,200
and RMB193,803,646,900 in 2020, 2021 and 2022, representing 91.94%, 93.18% and 90.55% 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
44
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 are committed to promoting the high-quality growth of our business and continuously strengthen the horizontal expansion
and vertical integration 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 geopolitics, trade frictions between China and the United States and
other factors, our major 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 scale of our operations, 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 risks. We will further
diversify customers, products and business. With a focus on process + underlying technologies as the supporting point, we will
continue to carry out horizontal expansion and trans-sector empowerment, and strive to explore new markets and new business.
XII. Investigation, research, communication, interview and other activities
Applicable □N/A
Particulars of the
Main topic of
Method of Type of investigation and
Date Place Guests discussion and
communication guests research activity
information provided
available at
Refer to the Record
Company meeting
Introduction about of Investor Relations
room at No. 313
Strategic Cooperation Activity dated
February Beihuan Road, Communication Institutional
Institution Framework Agreement February 13, 2022
13, 2022 Qingxi Town, by telephone investors
signed between us and published on
Dongguan,
Chery Group www.cninfo.com.cn
Guangdong
on February 13, 2022
Refer to the Record
Company meeting
of Investor Relations
room at No. 313
Introduction about our Activity dated
February Beihuan Road, Communication Institutional
Institution private placement of February 23, 2022
22, 2022 Qingxi Town, by telephone investors
shares in 2022 published on
Dongguan,
www.cninfo.com.cn
Guangdong
on February 22, 2022
Refer to the Record
Company meeting
of Investor Relations
room at No. 313 Introduction about our
Activity dated April
April 28, Beihuan Road, Communication Institutional operating status in
Institution 28, 2022 published
2022 Qingxi Town, by telephone investors 2021 and the first
on
Dongguan, quarter of 2022
www.cninfo.com.cn
Guangdong
on April 30, 2022
May 6, 2022 Company meeting Others Others Investor Our performance Refer to the Record
45
Luxshare Precision Industry Co., Ltd. Annual Report 2022
room at No. 313 briefings in 2021 of Investor Relations
Beihuan Road, Activity dated May 6,
Qingxi Town, 2022 published on
Dongguan, www.cninfo.com.cn
Guangdong on May 7, 2022
Refer to the Record
Company meeting
of Investor Relations
room at No. 313 Communications at
On-site Activity dated May
May 18, Beihuan Road, our annual general
investigation Others Investor 18, 2022 published
2022 Qingxi Town, meeting of
and research on
Dongguan, shareholders
www.cninfo.com.cn
Guangdong
on May 19, 2022
Refer to the Record
Company meeting
of Investor Relations
room at No. 313 Introduction about our
Activity dated August
August 28, Beihuan Road, Communication Institutional operating results in the
Institution 28, 2022 published
2022 Qingxi Town, by telephone investors first half of 2022 and
on
Dongguan, general situation
www.cninfo.com.cn
Guangdong
on August 30, 2022
Refer to the Record
Company meeting
of Investor Relations
room at No. 313
Introduction about our Activity dated
October 30, Beihuan Road, Communication Institutional
Institution operating status for October 30, 2022
2022 Qingxi Town, by telephone investors
three quarters of 2022 published on
Dongguan,
www.cninfo.com.cn
Guangdong
on October 31, 2022
46
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Section IV Corporate Governance
I. Overview of our corporate governance
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 Shares on
Shenzhen Stock Exchange (2023 Revision), 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 general meeting of shareholders 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 general
meeting of shareholders 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 general meeting of shareholders considers any material matter that affects the interests of minority shareholders, the votes
cast by them are counted separately. All general meetings of shareholders 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 Remuneration and 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 the 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.
47
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(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, the Shanghai Securities News and www.cninfo.com.cn as the media for us to disclose
information. We have kept 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 hotline 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 is no significant difference between the actual circumstance of our corporate governance and 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 business
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 the law, and have
our own independent and complete assets. We have performed the relevant procedures for changes in assets and shareholding
according to the 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.
48
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(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 the 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.
(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 general meetings of shareholders held during the reporting
period
1. General meetings of shareholders held during the reporting period
Parentage of
investors Date of Date of
Session Type of meeting Resolution of the meeting
attending the meeting disclosure
meeting
A total of seven proposals,
including the Proposal on the
First extraordinary
Extraordinary general Company’s Compliance with the
general meeting of March 09, March 10,
meeting of 47.05% Conditions for Private Placement
shareholders in 2022 2022
shareholders of Shares, were approved by vote,
2022
as disclosed in our Announcement
No. 2022-021.
Annual general Annual general A total of 12 proposals, including
May 18, May 19,
meeting of meeting of 45.89% 2021 Work Report of the Board of
2022 2022
shareholders in shareholders Directors, were approved by vote,
49
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2021 as disclosed in our Announcement
No. 2022-047.
A total of 2 proposals, including
Second
Proposal on Application for
extraordinary Extraordinary general
September September Offering Super Short-term
general meeting of meeting of 57.98%
23, 2022 24, 2022 Commercial Papers, were
shareholders in shareholders
approved by vote, as disclosed in
2022
our Announcement No. 2022-081.
A total of three proposals,
including the Proposal on the
Third
2022 Stock Option Incentive Plan
extraordinary Extraordinary general
December December (Draft) of Luxshare Precision
general meeting of meeting of 46.20%
1, 2022 2, 2022 Industry Co., Ltd. and the
shareholders in shareholders
Summary Thereof, were approved
2022
by vote, as disclosed in our
Announcement No. 2022-102.
2. Extraordinary general meetings of shareholders convened at the request of preferred shareholders with
resumed voting rights
□Applicable N/A
V. Directors, supervisors and executives
1. Particulars
No. of
No. of Changes
End Openin shares
End addition in the Closing Cause of
date g dispose
A date of al shares number balance increase or
of the balanc d of in
Name Title Status Sex g the acquired of shares of decrease in
term e of the
e term of in the held due shares the number
of shares reporti
office reportin to other held of shares held
office held ng
g period reasons
period
Chairman
of the
Incu Februa May
WANG Board of Fem 5
mben ry 22, 18,
Laichun Directors ale 6
t 2009 2024
& General
Manager
Vice Additional
WANG Chairman Incu Februa May shares
Mal 5 5,227, 7,030,9 12,258,
Laishen of the mben ry 22, 18, acquired by
e 9 700 10 610
g Board of t 2009 2024 self-owned
Directors funds
50
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Additional
shares
Director &
Incu May May acquired as a
WANG Deputy Mal 3 128,03
mben 21, 18, 601,626 729,656 result of
Tao General e 8 0
t 2021 2024 exercise of
Manager
incentive
share options
Additional
shares
Director &
Incu May May acquired as a
Deputy Mal 4
LI Wei mben 21, 18, 506,989 506,989 result of
General e 3
t 2021 2024 exercise of
Manager
incentive
share options
Incu May May
ZHANG Independe Fem 6
mben 22, 18,
Ying nt director ale 0
t 2018 2024
LIU Incu May May
Independe Mal 5
Zhonghu mben 18, 18,
nt director e 8
a t 2021 2024
Incu May May
SONG Independe Fem 5
mben 18, 18,
Yuhong nt director ale 2
t 2021 2024
Chairman
of the Incu Decem May
XIA Fem 4
Board of mben ber 19, 18,
Yanrong ale 2
Supervisor t 2017 2024
s
MO Incu May May
Fem 4
Rongyin Supervisor mben 22, 18,
ale 3
g t 2018 2024
Incu Februa May
YI Fem 3
Supervisor mben ry 22, 18,
Peizan ale 8
t 2009 2024
Additional
Board shares
Secretary Incu May May acquired as a
HUANG Mal 5 439.39
& Deputy mben 25, 21, 219,695 659,085 result of
Dawei e 1 0
General t 2018 2024 exercise of
Manager incentive
share options
Additional
shares
WU Incu April May acquired as a
Mal 5 665.84
Tianson CFO mben 15, 21, 85,000 750,843 result of
e 3 3
g t 2019 2024 exercise of
incentive
share options
51
Luxshare Precision Industry Co., Ltd. Annual Report 2022
6,460, 8,444,2 14,905,
Total -- -- -- -- -- -- 0 0 --
963 20 183
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
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, 56 years old, resident of Hong Kong, China; EMBA, Shenzhen Graduate School of Tsinghua University; a
member of the 14th National Committee of the CPPCC; Vice Chairman of Guangdong Federation of Industry & Commerce; 2022
Guangdong 3.8 Red Flag Bearer; Invited Vice Chairman of China Association of Women Entrepreneurs; is now our Chairman of the
Board of Directors and General Manager; Ms. WANG Laichun worked in Sanyo (Shekou) from 1984 to 1986 and 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.
Mr. WANG Laisheng, 59 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, and has worked as the Vice
Chairman of our Board of Directors until now.
Mr. LI Wei, 43 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, 38 years old, Chinese nationality, undergraduate; is now chief of our Precision Component 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, 60 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
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, 58 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
52
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Guangzhou Yuexiu Financial Holding Group 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, 42 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, 43 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, 38 years old, Chinese nationality, joined our Finance Department in 2004, is now our supervisor. Ms. YI Peizan
is a member of our 1st through 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, 51 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 Shares on Shenzhen Stock Exchange (2023 Revision) and other applicable laws and regulations and
the AOA.
Mr. WU Tiansong, 53 years old, citizen of Chinese Taiwan, received a bachelor’s degree from the National Taiwan University of
Science and Technology, is now the CFO of 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
End date
receive
Beginning date of of the
Name Entity Position remunerations and
term of office term of
subsidies from
office
such entity
53
Luxshare Precision Industry Co., Ltd. Annual Report 2022
WANG Luxsan Precision Technology (Jiangsu) November 25,
Director No
Laichun Co., Ltd. 2020
WANG Bisaisi Automotive Technology
Chairman July 18, 2018 No
Laichun (Suzhou) Co., Ltd.
WANG Luxshare Electronic Technology
Chairman March 18, 2014 No
Laichun (Kunshan) Co., Ltd.
WANG Luxcase Precision Technology
Chairman February 3, 2021 No
Laichun (Yancheng) Co., Ltd.
Vice
WANG Chairman of November 12,
Xiexun Electronic (Ji’an) Co., Ltd. No
Laichun the Board of 2005
Directors
WANG
Fujian JK Wiring Systems Co., Ltd. Chairman June 18, 2012 No
Laichun
WANG Luxsan Precision Technology (Jiangsu) November 25,
Chairman No
Laisheng Co., Ltd. 2020
WANG Xunmu Information Technology General
April 27, 2021 No
Laisheng (Shanghai) Co., Ltd. Manager
Managing
WANG Lishan Smart Manufacturing November 18,
Director & No
Laisheng Technology (Guangdong) Co., Ltd. 2020
Manager
WANG Lishen Smart Manufacturing
Chairman February 3, 2021 No
Laisheng Technology (Shenzhen) Co., Ltd.
Managing
WANG BCS Automotive Interface Solutions Director & December 29,
No
Laisheng (Xi’an) Co., Ltd. General 2018
Manager
WANG November 12,
Xiexun Electronic (Ji’an) Co., Ltd. Chairman No
Laisheng 2005
Vice
WANG Chairman of
Lanto Electronic Limited May 12, 2011 No
Laisheng the Board of
Directors
WANG Kunshan Luxshare Precision Industry
Director October 25, 2011 No
Laisheng Co., Ltd.
Vice
WANG Chairman of
Donguan Xuntao Electronic Co., Ltd. July 10, 2012 No
Laisheng the Board of
Directors
WANG Dongguan Leader Precision Industry
Chairman August 16, 2012 No
Laisheng Co., Ltd.
Vice
WANG Kunshan Luxshare Precision Industry Chairman of
October 25, 2011 No
Laisheng Co., Ltd. the Board of
Directors
WANG Suining Luxshare Precision Industry Managing
January 11, 2013 No
Laisheng Co., Ltd. Director
WANG Xingning Luxshare Precision Industry Managing November 19,
No
Laisheng Co., Ltd. Director 2013
WANG Luxshare Precision Industry (Chuzhou) Managing
March 24, 2014 No
Laisheng Co., Ltd. Director
54
Luxshare Precision Industry Co., Ltd. Annual Report 2022
WANG Fengshun Luxshare Precision Industry Managing
July 4, 2014 No
Laisheng Co., Ltd. Director
WANG Dongguan Luxshare Precision Industry November 27,
Chairman No
Laisheng Co., Ltd. 2015
WANG Jiangxi Luxshare Intelligent December 25,
Director No
Laisheng Manufacture Co., Ltd. 2015
LIU Guangdong Provincial Expressway Independent September
December 4, 2017 Yes
Zhonghua Development Co., Ltd. director 20, 2025
LIU Independent March 12,
GEM Co., Ltd. March 20, 2019 Yes
Zhonghua director 2025
LIU Independent October
SGIS Songshan Co., Ltd. June 25, 2019 Yes
Zhonghua director 17, 2022
LIU Guangzhou Yuexiu Financial Holding Independent September
July 19, 2022 Yes
Zhonghua Group Co., Ltd. Director 17, 2023
Managing
Luxshare Intelligent Manufacture Director &
LI Wei August 16, 2021 No
Technology (Changshu) Co., Ltd. General
Manager
Managing
Luxshare Intelligent Equipment Director & December 29,
LI Wei No
(Kunshan) Co., Ltd. General 2020
Manager
Kunshan Luxshare Enterprise Managing November 4,
LI Wei No
Management Development Co., Ltd. Director 2020
November 20,
WANG Tao Lanto Electronic Limited Chairman No
2019
Managing
Luxshare Smart Manufacturing (Rugao) Director &
WANG Tao December 1, 2020 No
Co., Ltd. General
Manager
Managing
Luxshare Precision Technology Director &
WANG Tao October 19, 2021 No
(Nanjing) Co., Ltd. General
Manager
XIA Yanrong Luxshare iTech (Zhejiang) Co., LTD. Supervisor April 8, 2019 No
Zhuhai Kinwong Flexible Circuit Co.,
XIA Yanrong Supervisor December 3, 2018 No
Ltd.
Luxshare Precision Industry (Suzhou)
XIA Yanrong Supervisor February 18, 2019 No
Co., Ltd.
Luxshare Electronic (Shanghai) Co.,
XIA Yanrong Supervisor December 2, 2019 No
Ltd.
Luxshare Precision Industry (Enshi)
XIA Yanrong Supervisor October 24, 2018 No
Co., Ltd.
YI Peizan Xiexun Electronic (Ji’an) Co., Ltd. Supervisor August 28, 2017 No
Director &
HUANG Luxshare Electronic Technology
General March 17, 2014 No
Dawei (Kunshan) Co., Ltd.
Manager
Luxshare Electronic Technology
WU Tiansong Supervisor March 17, 2014 No
(Kunshan) Co., Ltd.
WU Tiansong Huzhou Jiuding Electronic Co., Ltd. Supervisor October 12, 2012 No
55
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Explanation
about the
N/A
posts held at
other entities
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 include the performance related to the sustainable
development into assessment, so as to realize our future development strategy and business objectives. The Remuneration Committee
under the Board of Directors discusses and reviews the remuneration-related issues on an annual basis. The meetings of the
Remuneration Committee shall be divided into regular meetings and interim meetings and each of such meetings shall be held at least
once every year. The remunerations of our independent directors are determined pursuant to the Independent Director Rules for
Listed Companies of the China Securities Regulatory Commission, the AOA and other relevant regulations, and with reference to the
overall economic environment and the remunerations offered by listed companies in the industry in which the Company operates,
and are then implemented after being reviewed and approved by the Board of Directors and the general meeting of shareholders. At
present, our independent directors receive RMB160,000 per year, plus reimbursement of travel, office and other expenses, from us.
Compensations of directors, supervisors and executives paid in the reporting period:
In RMB 0’000
Total Whether or not
remuneration receiving
received from remunerations
Name Title Gender Age Status
the Company from any
(inclusive of affiliate of the
tax) Company
WANG Chairman of the Board of Directors
Female 56 Incumbent 380 No
Laichun & General Manager
WANG Vice Chairman of the Board of
Male 59 Incumbent 330 No
Laisheng Directors
WANG Tao Director & Deputy General Manager Male 38 Incumbent 122 No
LI Wei Director & Deputy General Manager Male 43 Incumbent 122 No
ZHANG Ying Independent Director Female 60 Incumbent 16 No
LIU Zhonghua Independent Director Male 58 Incumbent 16 No
SONG Yuhong Independent Director Female 52 Incumbent 16 No
XIA Yanrong Supervisor Female 42 Incumbent 59.6 No
MO Rongying Supervisor Female 43 Incumbent 51.5 No
YI Peizan Supervisor Female 38 Incumbent 10.99 No
HUANG Board Secretary & Deputy General
Male 51 Incumbent 109.43 No
Dawei Manager
WU Tiansong CFO Male 53 Incumbent 133.06 No
Total -- -- -- -- 1,366.58 --
56
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 7th meeting of the 5th Board of
The 7th meeting of the 5th
February 21, 2022 February 22, 2022 Directors disclosed on www.cninfo.com.cn
Board of Directors
and the Securities Times (Announcement
No. 2022-006)
Refer to the Announcement on Resolutions
of the 8th meeting of the 5th Board of
The 8th meeting of the 5th
April 27, 2022 April 28, 2022 Directors disclosed on www.cninfo.com.cn
Board of Directors
and the Securities Times (Announcement
No. 2022-031)
Refer to the Announcement on Resolutions
of the 9th meeting of the 5th Board of
The 9th meeting of the 5th
July 6, 2022 July 7, 2022 Directors disclosed on www.cninfo.com.cn
Board of Directors
and the Securities Times (Announcement
No. 2022-053)
Refer to the Announcement on Resolutions
of the 10th meeting of the 5th Board of
The 10th meeting of the 5th
August 25, 2022 August 26, 2022 Directors disclosed on www.cninfo.com.cn
Board of Directors
and the Securities Times (Announcement
No. 2022-065)
Refer to the Announcement on Resolutions
of the 11th meeting of the 5th Board of
The 11th meeting of the 5th
September 15, 2022 September 16, 2022 Directors disclosed on www.cninfo.com.cn
Board of Directors
and the Securities Times (Announcement
No. 2022-076)
Refer to the Announcement on Resolutions
of the 12th meeting of the 5th Board of
The 12th meeting of the 5th
October 28, 2022 October 29, 2022 Directors disclosed on www.cninfo.com.cn
Board of Directors
and the Securities Times (Announcement
No. 2022-092)
Refer to the Announcement on Resolutions
of the 13th meeting of the 5th Board of
The 13th meeting of the 5th Directors disclosed on www.cninfo.com.cn,
November 11, 2022 November 14, 2022
Board of Directors the Securities Times and the Shanghai
Securities News (Announcement No.
2022-094)
Refer to the Announcement on Resolutions
of the 14th meeting of the 5th Board of
The 14th meeting of the 5th Directors disclosed on www.cninfo.com.cn,
December 5, 2022 December 6, 2022
Board of Directors the Securities Times and the Shanghai
Securities News (Announcement No.
2022-104)
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 general meetings of shareholders
Director No. of board No. of board No. of board No. of board No. of board Whether or not No. of
57
Luxshare Precision Industry Co., Ltd. Annual Report 2022
meetings meetings meetings meetings meetings having been general
attended present in present by present by absent from absent from two meetings of
during the person means of proxy consecutive shareholders
reporting communicati board meetings attended
period on equipment
WANG
8 2 6 0 0 No 4
Laichun
WANG
8 3 5 0 0 No 4
Laisheng
LI Wei 8 2 6 0 0 No 4
WANG Tao 8 2 6 0 0 No 4
ZHANG
8 3 5 0 0 No 4
Ying
LIU
8 2 6 0 0 No 4
Zhonghua
SONG
8 3 5 0 0 No 4
Yuhong
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.
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
scientificity, timeliness and effectiveness of decisions, and supervised and urged the implementation of resolutions of the Board of
Directors; actively implemented resolutions of the general meeting of shareholders and the Board of Directors, 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.
58
Luxshare Precision Industry Co., Ltd. Annual Report 2022
VII. Activities of the committees of the Board of Directors during the reporting period
No. of Performance
Date of Objections
Committee Members meetings Topics Important opinions and suggestions of other
meeting (if any)
held duties
BDO China Shu Lun Pan Certified
LIU Public Accountants introduced the
Zhonghua, 2021 annual audit plan and
ZHANG Communication arrangements, audit procedures and
Ying, SONG Meeting of Audit other issues with respect to the audit
Audit Yuhong and February Committee on of 2021 financial report; and
1
Committee BDO China 22, 2022 Annual Report requested the colleagues of the
Shu Lun Pan Audit Work in accounting firm to pay special
Certified 2021 attention to related party
Public transactions, pledged guarantees,
Accountants capitalization and expensing of
intangible assets and other issues.
Considered the
Proposal on the
2021 Annual
Report, the
Pursuant to the Company Law, the
Proposal on the
Code of Corporate Governance for
Reappointment of
Listed Companies promulgated by
the Accounting
the CSRC and the Work Rules of the
Firm, the Proposal
Audit Committee of the Board of
on Special Report
Directors, the Audit Committee
LIU on the Deposit
performed its duties diligently,
Zhonghua, and Use of
supervised our internal audit policies
Audit ZHANG April 22, Offering Proceeds
3 and implementation thereof,
Committee Ying and 2022 in 2021, the
reviewed our financial information,
SONG Proposal on the
guided the work of the Internal Audit
Yuhong 2021 Work Report
Department, supervised and urged
of the Internal
the audit conducted by the
Audit Department
accounting firm, and through
and the Proposal
sufficient communication and
on the Work
discussions, unanimously approved
Report of the
all reports considered.
Internal Audit
Department for
the First Quarter
of 2022.
Pursuant to the Company Law, the
Code of Corporate Governance for
Listed Companies promulgated by
LIU Considered the the CSRC and the Work Rules of the
Zhonghua, Work Report of Audit Committee of the Board of
Audit ZHANG August the Internal Audit Directors, the Audit Committee
3
Committee Ying and 10, 2022 Department for performed its duties diligently,
SONG the First Half of expressed opinions taking into
Yuhong 2022. account our actual situation, and
through sufficient communication
and discussions, unanimously
approved the Report.
59
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Pursuant to the Company Law, the
Code of Corporate Governance for
Listed Companies promulgated by
LIU Considered the the CSRC and the Work Rules of the
Zhonghua, Work Report of Audit Committee of the Board of
Audit ZHANG October the Internal Audit Directors, the Audit Committee
3
Committee Ying and 25, 2022 Department for performed its duties diligently,
SONG the Third Quarter expressed opinions taking into
Yuhong of 2022. account our actual situation, and
through sufficient communication
and discussions, unanimously
approved the Report.
Pursuant to the relevant provisions of
the Company Law, the Code of
Corporate Governance for Listed
Companies promulgated by the
CSRC and the Work Rules of the
Reviewed the
Remuneration and Appraisal
implementation of
Committee of the Board of Directors,
the performance
the Remuneration and Appraisal
appraisal,
Committee reviewed the
remuneration and
remuneration of the directors,
incentive plan for
supervisors and executives, and
the directors and
determined that we are developing
executives in the
ZHANG and improving fair and effective
Remunerat preceding year,
Ying, LIU performance appraisal criteria and
ion and February put forward a
Zhonghua 2 incentive and restraint mechanisms
Appraisal 22, 2022 reward proposal
and SONG for executives, and the remuneration
Committee for the directors
Yuhong of our executives consists of basic
and executives
monthly salaries and year-end
taking into
performance-based pay. On the basis
account our actual
of such understanding and proposal,
business situation,
we properly adjusted the basic
and studied the
monthly salaries of certain directors
remuneration and
and executives, in order to reflect
appraisal plan for
and produce the effect of incentive
the next year.
and fairness. The remuneration of
our directors, supervisors and
executives during the reporting
period are true, and conform to our
performance metrics.
60
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Pursuant to the Company Law, the
Code of Corporate Governance for
Listed Companies promulgated by
the CSRC and the Work Rules of the
Considered the
Remuneration and Appraisal
ZHANG Performance
Remunerat Committee of the Board of Directors,
Ying, LIU Appraisal
ion and September the Remuneration and Appraisal
Zhonghua 2 Measures for the
Appraisal 24, 2022 Committee reviewed the
and SONG 2021 Stock
Committee Performance Appraisal Measures for
Yuhong Option Incentive
the 2021 Stock Option Incentive
Plan.
Plan, determined that the Measures
reflected and produced the effect of
incentive and fairness, and
unanimously approved the Proposal.
Pursuant to the
Company Law,
the Code of
Corporate
Governance for
Listed Companies
promulgated by
the CSRC, the
Work Rules of the
Strategy
Committee of the
Pursuant to the Company Law, the
Board of
Code of Corporate Governance for
Directors and
Listed Companies promulgated by
other relevant
the CSRC, and the Work Rules of the
provisions, the
WANG Strategy Committee of the Board of
Strategy
Laichun, Directors, the Strategy Committee
Committee
Strategy ZHANG March 09, thoroughly analyzed and studied the
1 reviewed the
Committee Ying and 2022 industry in which we operate, and
material events
LIU put forward reasonable suggestions
occurred in 2021,
Zhonghua on the planning for and
reported our 2022
implementation of the development
strategic
strategies in respect of business,
development plan,
R&D and new products, which
considered the
produced significant effect.
Proposal on
Identification of
Climate Risks and
Opportunities and
Response
Strategies; and
studied the
significant
strategic issues in
connection with
our development.
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
61
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
579
reporting period (person)
Total number of current employees of the major subsidiaries at
236,353
the end of the reporting period (person)
Total number of current employees at the end of the reporting
236,932
period (person)
Total number of salaried employees during the reporting period
236,932
(person)
Total number of retired employees to or for whom the parent
and the major subsidiaries are obligated to make payments 0
(person)
Structure of profession
Type of profession Number of employees (person)
Production staff 198,549
Sales staff 2,628
Technical staff 18,421
Financial staff 438
Administrative staff 16,896
Total 236,932
Education
Degree of education Number of employees (person)
Undergraduate 16,196
College 22,508
Secondary specialized school, senior middle school and below 198,228
Total 236,932
2. Remuneration policies
We have established the administrative measures for the salaries, performance-based pay, year-end bonus and other
remuneration of employees of the Group, provided employees with competitive and guaranteed remuneration in a scientific an
reasonable manner, developed sound remuneration 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 remuneration 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,
62
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
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 8th meeting of the 5th Board of Directors and the 2021 annual general meeting of
shareholders, 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 7,084,301,477 shares, totaling RMB779,273,162.47. 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 1,153,099 shares, from 7,084,301,477 shares at the time of disclosure of the proposal to 7,085,454,576 shares as a result
of exercise of stock option incentive plan by the relevant grantees at their sole discretion and conversion of the convertible bonds to
shares. On the principle that the total amount distributable should remain the same, our profit distribution proposal for 2021 was
63
Luxshare Precision Industry Co., Ltd. Annual Report 2022
adjusted as follows: to distribute to all shareholders a cash dividend of RMB1.099820 (inclusive of tax) per 10 shares on the basis of
the total share capital of 7,085,454,576 shares, totaling RMB779,272,465.17 (inclusive of tax).
Special explanation about the cash dividend policy
Whether to comply with the provisions of the AOA or requirements of
Yes
resolutions of the general meeting of shareholders of the Company?
Whether the standard and ratio of cash dividend distribution are clear and
Yes
definite?
Whether the relevant decision-making process and mechanism are
Yes
sound?
Whether the independent directors have performed their duties and
Yes
exercised their functions?
Whether the minority shareholders have sufficient opportunities to
express their opinions and requests and their legitimate rights and Yes
interests are fully protected?
Whether the conditions and procedures in respect of any adjustment or
amendment of the cash dividend policy comply with the applicable Yes
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
Number of bonus shares per 10 shares (share) 0
Amount of cash dividends per 10 shares (RMB) (inclusive of
1.3
tax)
Share capital based on which the distribution proposal was
7,130,392,419
made (share)
Amount of cash dividends (RMB) (inclusive of tax) 926,951,014.47
Amount of cash dividends distributed in other ways (such as
0.00
share repurchase) (RMB)
Total amount of cash dividends (including other ways) (RMB) 926,951,014.47
Distributable profit (RMB) 6,970,581,669.73
Proportion of total cash dividends (including other ways) to the
100%
distributable profit
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 2022 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB1.30 (inclusive of tax)
per 10 shares on the basis of the total share capital of 7,130,392,419 shares, totaling RMB926,951,014.47 (inclusive of tax), 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 from the disclosure date of this announcement 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.
64
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 3, 2021, we held the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board of
Supervisors, deliberating and approving the Proposal on Achievement of Vesting Conditions for the Third Vesting Period under 2018
Stock Option Incentive Plan. 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 24, 2021 to September 23, 2022. For details, please refer to the
Suggestive Announcement (Revised) on Exercise at Their Sole Discretion in the Third Vesting Period under 2018 Stock Option
Incentive Plan (Announcement No. 2021-105). During the reporting period, the grantees exercised their options to purchase
1,573,156 shares in total within the second vesting period in initial grant under the 2019 Stock Option Incentive Plan.
On July 6, 2022, due to the equity distribution for 2021, the exercise price for the stock options granted but not yet exercised
under the 2018 stock option incentive plan was adjusted from RMB10.17 per share to RMB10.06 per share. For details, please refer
to the Announcement on Adjustment of the Exercise Prices under the 2018, 2019 and 2021 Stock Option Incentive Plans and
Cancellation of Some Stock Options under the 2019 Stock Option Incentive Plan (Announcement No. 2022-056).
On December 5, 2022, we held the 14th meeting of the fifth Board of Directors and the 14th meeting of the fifth Board of
Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Quantity and Cancellation of Some Sock
Options under the 2018 Stock Option Incentive Plan and the Proposal on Achievement of Vesting Conditions for the Fourth Exercise
Period of the 2018 Stock Option Incentive Plan. Due to the resignation of grantees or their failure to meet the assessment standards,
we adjusted the exercise quantity under the 2018 Stock Option Incentive Plan accordingly and cancelled 1,230,044 stock options
granted but not exercised. The number of grantees subject to the stock option incentive plan was changed from 1,653 to 1,607, and
the quantity of stock options granted but not exercised was changed from 60,875,365 to 59,645,321. For details, please refer to the
Announcement on Adjustment of the Exercise Quantity and Cancellation of Some Stock Options under the 2018 Stock Option
Incentive Plan and (Announcement No. 2022-107). Meanwhile, the grantees meeting these vesting conditions may exercise options
in the fourth vesting period at their sole discretion, and the actual exercisable period is from December 13, 2022 to September 22,
2023. For details, please refer to the Suggestive Announcement on Exercise at Their Sole Discretion in the Fourth Vesting Period
under 2018 Stock Option Incentive Plan (Announcement No. 2022-110). During the reporting period, the grantees exercised their
options to purchase 15,164,369 shares in total within the fourth vesting period of the 2018 Stock Option Incentive Plan.
(2) 2019 stock option incentive plan
On July 2, 2021, we held the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of Supervisors,
deliberating and approving the Proposal on Achievement of Vesting Conditions for the Second Vesting Period of the Initial Grant
under 2019 Stock Option Incentive Plan. 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 in Initial Grant under 2019 Stock
Option Incentive Plan (Announcement No. 2021-069). During the reporting period, the grantees exercised their options to purchase
1,573,156 shares in total within the second vesting period of the stock options in initial grant under the 2019 Stock Option Incentive
Plan.
On February 21, 2022, we held the 7th meeting of the fifth Board of Directors and the 7th meeting of the fifth Board of
Supervisors, deliberating and approving the Proposal on Adjustment of the List of Grantees in Reserved Grant and Option Quantity
as well as Cancellation of Some Options under the 2019 Stock Option Incentive Plan and the Proposal on Achievement of Vesting
Conditions for the Second Vesting Period under the 2019 Stock Option Incentive Plan. Due to the resignation of grantees or their
65
Luxshare Precision Industry Co., Ltd. Annual Report 2022
failure to meet the assessment standards, we adjusted the exercise quantity of reserved grant under the 2019 Stock Option Incentive
Plan accordingly and cancelled 599,316 stock options granted but not exercised. The number of grantees subject to the stock option
incentive plan was changed from 250 to 239, and the quantity of stock options granted but not exercised was changed from
16,547,958 to 15,948,642. For details, please refer to the Announcement on Adjustment of the List of Grantees in Reserved Grant and
Option Quantity as well as Cancellation of Some Options under the 2019 Stock Option Incentive Plan (Announcement No.
2022-008). Meanwhile, 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 March 3, 2022 to November 25, 2022. For details, please see the Suggestive
Announcement on Exercise at Their Sole Discretion in the Second Vesting Period in Reserved Grant under 2019 Stock Option
Incentive Plan (Announcement No. 2022-018). During the reporting period, the grantees exercised their options to purchase
3,955,702 shares in total within the second vesting period in reserved grant under the 2019 Stock Option Incentive Plan.
On July 4, 2022, we held the 9th meeting of the fifth Board of Directors and the 9th meeting of the fifth Board of Supervisors,
deliberating and approving the Proposal on Achievement of Vesting Conditions for the Third Vesting Period of the Initial Grant under
2019 Stock Option Incentive Plan. 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 July 22, 2022 to April 21, 2023. For details, please see the Suggestive
Announcement on Exercise at Their Sole Discretion in the Third Vesting Period of the Initial Grant under 2019 Stock Option
Incentive Plan (Announcement No. 2022-060). During the reporting period, the grantees exercised their options to purchase
12,824,126 shares in total within the third vesting period in initial grant under the 2019 Stock Option Incentive Plan.
On July 6, 2022, due to the equity distribution for 2021, and resignation, failure to meet the performance appraisal criteria or
other reasons on the part of the grantees, we adjusted the exercise price and quantity under the 2019 stock option incentive plan as
follows: 639,291 stock options first granted but not yet exercised were cancelled, the number of grantees was adjusted from 332 to
322, the number of stock options granted but not exercised was adjusted from 49,032,311 to 48,393,020, and the exercise price of
stock options subject to initial or reserved grant was changed from RMB13.59 per share to RMB13.48 per share. For details, please
refer to the Announcement on Adjustment of the Exercise Prices under the 2018, 2019 and 2021 Stock Option Incentive Plans and
Cancellation of Some Stock Options under the 2019 Stock Option Incentive Plan (Announcement No. 2022-056).
(3) 2021 stock option incentive plan
On July 6, 2022, due to the equity distribution for 2021, the exercise price for the stock options granted but not yet exercised
under the 2021 stock option incentive plan was adjusted from RMB35.87 per share to RMB35.76 per share. For details, please refer
to the Announcement on Adjustment of the Exercise Prices under the 2018, 2019 and 2021 Stock Option Incentive Plans and
Cancellation of Some Stock Options under the 2019 Stock Option Incentive Plan (Announcement No. 2022-056).
On September 14, 2021, we held the 11th meeting of the fifth Board of Directors and the 11th meeting of the fifth Board of
Supervisors, deliberating and approving the Proposal on Granting Stock Options to Grantees in Reserved Grant under the 2021 Stock
Option Incentive Plan, whereby it was determined that the grant date of reserved stock options would be September 15, 2022 and
13.101 million stock options would be granted to 365 eligible grantees. For details, please refer to the Announcement on Granting
Stock Options to Grantees in Reserved Grant under the 2021 Stock Option Incentive Plan (Announcement No. 2022-078).
On October 19, 2022, we completed the registration of reserved grant under our 2021 Stock Option Incentive Plan, and granted
12.7858 million registered stock options, representing 0.18% of our total share capital. There are 356 grantees, the abbreviation and
code of stock options are JLC5 and 037297, respectively. For details, please refer to the Announcement on Completion of
Registration of Reserved Grant under the 2021 Stock Option Incentive Plan (Announcement No. 2022-086).
(4) 2022 stock option incentive plan
With the approval of the 13th meeting of the 5th Board of Directors, the 13th meeting of the 5th Board of Supervisors and the
3rd extraordinary general meeting of shareholders in 2022, we introduced the 2022 stock option incentive plan.
On December 5, 2022, we held the 14th meeting of the fifth Board of Directors and the 14th meeting of the fifth Board of
Supervisors, deliberating and approving the Proposal on Granting Stock Options to Grantees under the 2022 Stock Option Incentive
Plan of Luxshare Precision Industry Co., Ltd., whereby it was determined that the grant date of stock options would be December 15,
66
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2022 and 172.021 million stock options would be granted to 3,759 eligible grantees. For details, please refer to the Announcement on
Granting Stock Options to Grantees under the 2022 Stock Option Incentive Plan (Announcement No. 2022-106).
On January 19, 2023, we completed the registration of grant under our 2022 Stock Option Incentive Plan, and granted 168.513
million registered stock options, representing 2.3671% of our total share capital. There are 3,505 grantees, the abbreviation and code
of stock options are JLC5 and 037325, respectively. For details, please refer to the Announcement on Completion of Registration of
Grant under the 2022 Stock Option Incentive Plan (Announcement No. 2023-004).
(5) Exercise of options during the reporting period
During the reporting period, the grantees exercised their options at their sole discretion to purchase 44,157,507 shares in total
under the relevant stock option incentive plans.
Share incentives granted to directors and executives
Applicable □N/A
Unit: shares
Exercise Market No. of
Open No. of
price of price at additional Grant
ing additional No. of No. of Opening No. of Closing
shares Closing the end restricted price of
balan stock shares shares balance shares balance
exercised balance of of the shares restricte
ce of options exercisable exercised of vested of
Name Title during the stock reporting granted d shares
stock granted during the during the restricted during the restricte
reporting options period during (RMB
optio during the reporting reporting shares reporting d shares
period held (RMB the per
ns reporting period period held period held
(RMB per per reporting share)
held period
share) share) period
Director
&
WANG 675,9 168,996.0
Deputy 337,992.00 13.5900 506,989.00 31.7500
Tao 85.00 0
General
Manager
Director
& 1,297
WANG 432,630.0
Deputy ,891. 865,261.00 10.0600 865,261.00 31.7500
Tao 0
General 00
Manager
Director
&
WANG 1,000,000.0 1,000,000.
Deputy 30.3500 31.7500
Tao 0 00
General
Manager
Director
&
675,9 168,996.0
LI Wei Deputy 337,992.00 13.5900 506,989.00 31.7500
85.00 0
General
Manager
Director
& 1,013
337,993.0
LI Wei Deputy ,978. 675,986.00 10.1700 675,985.00 31.7500
0
General 00
Manager
Director
&
1,000,000.0 1,000,000.
LI Wei Deputy 30.3500 31.7500
0 00
General
Manager
67
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Board
Secretary
HUAN
& 659,0 219,695.0
G 439,390.00 10.1700 439,390.00 31.7500
Deputy 85.00 0
Dawei
General
Manager
Board
Secretary
HUAN
&
G 500,000.00 30.3500 500,000.00 31.7500
Deputy
Dawei
General
Manager
WU
263,6
Tianson CFO 131,817.00 10.0600 263,634.00 31.7500
34.00
g
WU
405,5
Tianson CFO 135,198.00 85,000.00 13.4800 320,593.00 31.7500
93.00
g
WU
Tianson CFO 400,000.00 30.3500 400,000.00 31.7500
g
4,992
2,900,000.0 2,923,636.0 1,413,310 6,478,841.
Total -- ,151. -- -- 0 0 0 -- 0
0 0 .00 00
00
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 Remuneration and 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
remuneration and performance appraisal proposals and submitting the same to the Board of Directors for approval. During the
reporting period, our remuneration and performance appraisal policies for the executives have been implemented effectively.
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
68
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 encountered Solutions Progress of Subsequent
Company Integration plan
integration during adopted solution solution
integration
TIME
Interconnect
Completed Completed None N/A N/A N/A
Technology
Limited
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
April 28, 2023
report on internal controls in its entirety
Disclosure reference of the
Internal Control Certification Report 2023 of Luxshare Precision Industry Co., Ltd.
self-assessment report on internal
published on www.cninfo.com.cn
controls in its entirety
Ratio of total assets of the entities
covered by the assessment to total assets
68.46%
recorded in the consolidated financial
statements of the Company
Ratio of total operating revenue of the
entities covered by the assessment to
total operating revenue recorded in the 69.08%
consolidated financial statements of the
Company
Criteria for determination of deficiencies
Category Financial reporting Non-financial reporting
1. The material weaknesses in internal control over 1. The material weaknesses in internal control
financial reporting include: (A) fraud on the part of over non-financial reporting include: (A) any
Qualitative criteria directors, supervisors and executives; (B) failure to serious violation of the significant national
correct any material weakness in internal control within laws and regulations; (B) great outflow of
a reasonable time after the same was identified and management and technical personnel on key
69
Luxshare Precision Industry Co., Ltd. Annual Report 2022
reported to the management; (C) ineffective control posts; (C) absence of or ineffective control
environment; (D) any material misstatement in the system for important business relating to the
financial report for the current period that is identified production and operation of the Company;
by external auditor but fails to be identified through (D) ineffective internal control over
internal control; (E) any serious violation of the laws information disclosure, resulting in any
and regulations; (F) the Company running at a loss for public condemnation of the Company by any
consecutive years due to any reason other than regulatory authority; and (E) failure to correct
policy-related loss, which might threaten the any problem, in particular, any material
Company’s ability to continue as a going concern; and weakness or significant deficiency, identified
(G) ineffective supervision by the management and in any assessment of internal controls. 2. The
related functional departments over the internal control. significant deficiencies in internal control
2. The significant deficiencies in internal control over over non-financial reporting include: (A)
financial reporting include: (A) failure to select and defects in important business policies or
apply accounting policies pursuant to the generally system, or unsound internal control system;
accepted accounting principles; (B) failure to establish and (B) failure to review any information
anti-fraud procedures and controls; (C) absence of or disclosed externally and untruthfulness of any
ineffective control system for important business; (D) information disclosed. 3. General deficiencies
lack of internal controls in and disorderly management in internal control over financial reporting
of subsidiaries; and (E) great outflow of or frequent include deficiencies in control other than
changes in senior officers (especially those in charge of material weakness and significant deficiency.
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.
1. Material weakness: (1) amount of misstated 1. Material weakness: resulting in a direct
operating revenue ≥ 0.5% of total operating revenue; loss of more than RMB12 million and having
(2) amount of misstated profit ≥ 0.5% of total profit; (3) a material adverse effect on the Company. 2.
amount of misstated assets ≥ 0.5% of total assets; (4) Significant deficiency: resulting in a direct
amount of misstated owners’ equity ≥ 0.5% of total loss of more than RMB3 million and not
owners’ equity. 2. Significant deficiency: (1) 0.2% of more than RMB12 million, and any penalty
total operating revenue ≤ amount of misstated operating imposed by any competent government
revenue < 0.5% of total operating revenue; (2) 0.2% of authority of the country, but not having an
total profit ≤ amount of misstated profit < 0.5% of total adverse effect on the Company. 3. General
Quantitative criteria
profit; (3) 0.2% of total assets ≤ amount of misstated deficiency: resulting in a direct loss of not
assets < 0.5% of total assets; (4) 0.2% of total owners’ more than RMB3 million, and any penalty
equity ≤ amount of misstated owners’ equity < 0.5% of imposed by any competent government
total owners’ equity. 3. General deficiency: (1) amount authority at the provincial level or below, but
of misstated operating revenue < 0.2% of total not having an adverse effect on the Company.
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
0
financial reporting
Number of material weaknesses in
0
non-financial reporting
Number of significant deficiencies in
0
financial reporting
Number of significant deficiencies in
0
non-financial reporting
70
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2. Auditor’s report on internal controls
Applicable □N/A
Opinion issued in the internal control audit 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, 2022.
Disclosure of the internal control audit report Disclosed
Date of disclose of the audit report on internal controls in its
April 28, 2023
entirety
Disclosure reference of the audit report on internal controls in Internal Control Audit Report 2022 of Luxshare Precision
its entirety Industry Co., Ltd. published on www.cninfo.com.cn
Type of opinion issued in the internal control audit 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 audit 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
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.
71
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
Policies and industry standards related to environmental protection
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
1. Emission standards of air pollutants
The sulfuric acid mist, nitric acid mist (measured in NOX) and unit product benchmark exhaust volume generated by our
anodic oxidation line comply with the standards provided in Tables 5 and 6 of Discharge Standard of Electroplating Pollutants
(GB21900-2008); Section 3.9 of the Technical Specification for Application and Issuance of Pollutant Discharge Permit -
Electronics Industry (HJ1031-2019) provides that this standard uses non-methane hydrocarbons as a comprehensive control
indicator for VOC emissions; after the release and implementation of the Discharge Standard of Pollutants for Electronic Industry,
such Standard shall apply. In this project, the particulate matter generated from machining, sulfuric acid mist from aluminum
solution concentration, non-methane hydrocarbon from dispensing, gluing and printing and nitric acid mist from cleaning process
(measured in NOX) comply with Level 2 provided in the Integrated Emission Standard of Air Pollutants (DB32/4041-2021); the
concentration limit for unorganized waste gas monitoring points comply with the standards provided in Table 2 of the Integrated
Emission Standard of Air Pollutants (DB32/4041-2021); the SO2 and NOX generated by the combustion of natural gas boilers
comply with the special emission limits for air pollutants provided in the Table 3 of the Emission Standards of Boiler Air Pollutants
(DB32-4385-2022).
2. Discharge standards of water pollutants
The comprehensive wastewater generated by the said company is discharged to Yancheng Tongqi Water Co., Ltd., and the
discharge standards of the sewage treatment plant comply with the Level B provided in Table 1 of Water Quality Standards for
Discharge into Urban Sewers (GB/T31962-2015). The heavy metal wastewater reuse index in the anodizing surface treatment
process complies with the Discharge Standard of Electroplating Pollutants (GB21900-2008).
3. Emission standards of noise pollution
During the operation of its plant, it complies with Table 3 of the Standards on Noise Emissions at the Boundaries of Industrial
Enterprises (GB12348-2008).
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. For storage of general solid
wastes, it refers to the environmental protection requirements on anti-seepage, anti-rain, and anti-dust of the General Industrial
Solid Waste Storage and Landfill Pollution Control Standards (GB 18599-2020). For collection, storage and transportation of
hazardous wastes, it complies with the requirements of the Technical Specifications for the Collection, Storage and Transportation
of Hazardous Wastes (HJ2025-2012), the Pollution Control Standards for the Storage of Hazardous Wastes (GB 18597-2001) and
the Amendment (Announcement No. 36 of 2013 of the Ministry of Environmental Protection).
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
1. Emission standards of air pollutants
The oil mist generated by the CNC machines, particulate matter generated from machining, and non-methane hydrocarbon
from dispensing and coating processes comply with the corresponding standards provided in Table 3 of Integrated Emission
Standard of Air Pollutants (DB31_933-2015); the odor generated in the wastewater biochemical process complies with the
corresponding standards in provided in Table 3 of Emission Standard of Odor Pollutants (DB311025-2016); the concentration limits
72
Luxshare Precision Industry Co., Ltd. Annual Report 2022
at unorganized exhaust monitoring points in the plant comply with the corresponding standards provided in Appendix A of Control
Standard for Unorganized Emissions of Volatile Organic Compounds (GB37822-2019); the non-methane hydrocarbons and
particulate matter concentrations at unorganized exhaust monitoring points at the plant boundary comply with the special emission
limits for air pollutants provided in Table 3 of Integrated Emission Standard of Air Pollutants (DB31_933-2015); the odor complies
with the corresponding standards provided in Table 3 of Emission Standard of Odor Pollutants (DB311025-2016).
2. Discharge standards of water pollutants
The production wastewater of the said company is discharged to Jinshan Sea Outfall Engineering Co., Ltd., and the discharge
of the sewage treatment plant complies with Level 3 provided in Table 2 of the Integrated Standard of Wastewater Discharge
(DB31-199-2018).
3. Emission standards of noise pollution
During the operation of its plant, it complies with Table 3 of the Standards on Noise Emissions at the Boundaries of Industrial
Enterprises (GB12348-2008).
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. For storage of general solid
wastes, it refers to the environmental protection requirements on anti-seepage, anti-rain, and anti-dust of the General Industrial
Solid Waste Storage and Landfill Pollution Control Standards (GB18599-2020). For collection, storage and transportation of
hazardous wastes, it complies with the requirements of the Technical Specifications for the Collection, Storage and Transportation
of Hazardous Wastes (HJ2025-2012), the Pollution Control Standards for the Storage of Hazardous Wastes (GB 18597-2001) and
the Amendment (Announcement No. 36 of 2013 of the Ministry of Environmental Protection).
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
1. Emission standards of air pollutants
The emission concentrations of nitrogen oxides and sulfuric acid mist produced by our anode line comply with the emission
limits of air pollutants for new enterprises provided in Table 5 of the Discharge Standard of Electroplating Pollutants
(GB21900-2008), and the benchmark exhaust of the project complies with Table 6. The emission concentrations of non-methane
hydrocarbons from injection molding process complies with the special emission limits provided in Table 5 of the Emission
Standard of Pollutants from Synthetic Resin Industry (GB31572-2015), and the particulate matter, non-methane hydrocarbons,
xylene, benzene series, chromium and its compounds, nickel and its compounds from other processes comply with the emission
limits of atmospheric pollutants from organized emissions provided in Table 1 of the Integrated Emission Standard of Air Pollutants
(DB32/4041-2021). The emission concentrations of particulate matter, sulfuric acid mist, nitrogen oxides, non-methane
hydrocarbons, xylene, benzene series and its compounds, chromium and its compounds, and nickel and its compounds from
unorganized emissions comply with the concentration limits of air pollutant emission monitoring at the boundaries of enterprises
provided in Table 3 of the Integrated Emission Standard of Air Pollutants (DB32/4041-2021). The concentrations of unorganized
emission of ammonia, hydrogen sulfide and odor comply with Level 2 standards on new renovation and expansion provided in
Table 1 of, and the organized emission concentrations thereof comply with Table 2 of the Emission Standard of Odorous Pollutants
(GB14554-93). The concentrations of unorganized emission of non-methane hydrocarbons in the plant comply with Table 2 of the
Integrated Emission Standard of Air Pollutants (DB32/4041-2021). Alkali mist and phosphoric acid mist refer to the standards
provided in Table 1 of Integrated Emission Standard of Air Pollutants (DB31/933-2015). In accordance with the Notice of the
Nantong Municipal Government Office on Issuing the 2020 Air Pollution Prevention and Control Work Plan (Tong Zheng Ban Fa
[2020] No. 34), the low-nitrogen transformation task of gas-fired boilers has been fully completed, with the emission concentrations
of nitrogen oxides not exceeding 50 milligrams per cubic meter. The concentrations of SO2 and particulate matter emitted from the
exhaust gas of natural gas combustion in gas-fired boilers comply with the atmospheric pollutant emission concentration limits
provided in Table 3 of the Emission Standard of Boiler Air Pollutants (GB13271-2014).
2. Discharge standards of water pollutants
After the nickel-containing wastewater and chromium-containing wastewater in this project are treated by the wastewater
73
Luxshare Precision Industry Co., Ltd. Annual Report 2022
pretreatment equipment in the plant, the total chromium and total nickel in wastewater pretreatment plant outlet comply with the
standard limits provided in Table 3 of the Discharge Standard of Electroplating Pollutants (GB21900-2008); Rugao Fugang Water
Treatment Co., Ltd. as the sewage treatment plant in the park complies with Level 3 provided in Table 4 of Integrated Standards of
Wastewater Discharge (GB8979-1996) for water quality management. The ammonia nitrogen, total nitrogen, and total phosphorus
comply with the management requirements of Rugao Fugang Water Treatment Co., Ltd., and the total aluminum complies with the
standards provided in Table 3 of the Discharge Standard of Electroplating Pollutants (GB21900-2008); the benchmark drainage of
unit products complies with the requirements in Table 2 of the Discharge Standard of Electroplating Pollutants. The tail water from
the sewage treatment plant in the park is discharged into the central river after reaching the Level 1A standards provided in the
Pollutant Discharge Standards for Municipal Wastewater Treatment Plants (GB18918-2002). The pollutants in the recycled water in
the plant are managed in accordance with standard values of “open circulating cooling water system makeup water and washing
water” provided in Table 1 of the Water Quality for Urban Sewage Recycling and Industrial Use (GB/T19923-2005).
3. Emission standards for noise pollution
It complies with Class 3 provided in the Standards on Noise Emissions at the Boundaries of Industrial Enterprises
(GB12348-2008) during the operation of our plant, and the Class 2 provided in the Noise Emissions at the Boundaries of Industrial
Enterprises (GB12348-2008) during the day and night in Dongwei Village.
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. The storage of general solid
wastes in the plant are strictly set up and managed in accordance with the requirements of the General Industrial Solid Waste
Storage and Landfill Pollution Control Standards (GB 18599-2020) and its Amendment. The hazardous waste in the plant is strictly
managed in accordance with the Pollution Control Standards for the Storage of Hazardous Wastes (GB18597-2001) and its
Amendment, the Technical Specifications for the Collection, Storage and Transportation of Hazardous Wastes (HJ2025-2012) and
other documents.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
1. Emission standards of air pollutants
The sulfuric acid mist, nitric acid mist (measured in NOX) and unit product benchmark exhaust volume generated by our
anodic oxidation line comply with the standards provided in Tables 5 and 6 of Discharge Standard of Electroplating Pollutants
(GB21900-2008); Section 3.9 of the Technical Specification for Application and Issuance of Pollutant Discharge Permit -
Electronics Industry (HJ1031-2019) provides that this standard uses non-methane hydrocarbons as a comprehensive control
indicator for VOC emissions; after the release and implementation of the Discharge Standard of Water Pollutants for Electronic
Industry, such Standard shall apply. In this project, the particulate matter generated from machining, and the non-methane
hydrocarbons from dispensing and baking comply with the Level 2 provided in the Integrated Emission Standard of Air Pollutants
(GB16297-1996); the particulate matter generated from sandblasting processes, and non-methane hydrocarbons from injection
molding processes comply with the standard limits provided in Table 5 of the Emission Standard of Pollutants from Synthetic Resin
Industry (GB31572-2015); the non-methane hydrocarbons in unorganized exhaust gas at the plant boundary complies with the
Emission Standard of Pollutants from Synthetic Resin Industry (GB 31572-2015) and the Control Standards on Unorganized
Emissions of Volatile Organic Compounds (GB37822-2019). Nitrogen oxides, particulate matter, and sulfuric acid mist comply
with the Integrated Emission Standard of Air Pollutants (GB16297-1996); and the odor concentrations comply with the Emission
Standard of Odorous Pollutants (GB 14554-93).
2. Discharge standards of water pollutants
The comprehensive wastewater of the said company is collected and managed by Jiashan County Dadi Wastewater Treatment
Engineering Co., Ltd., and the discharge of such sewage treatment plant comply with Pollutants Discharge Standards for Electronic
Industry (GB 39731-2020). The heavy metal wastewater reuse index in the anodizing surface treatment process complies with the
Discharge Standard of Electroplating Pollutants (GB21900-2008).
3. Emission standards of noise pollution
74
Luxshare Precision Industry Co., Ltd. Annual Report 2022
W comply with Class 3 provided in the Standards on Noise Emissions at the Boundaries of Industrial Enterprises
(GB12348-2008) at the east and south boundaries of the plant, and the Class 4 provided in the Noise Emissions at the Boundaries of
Industrial Enterprises (GB12348-2008) at the west and north boundaries of the plant.
4. Discharge standards of solid wastes
The solid wastes of the said company mainly consist of general solid wastes and hazardous wastes. For storage of general solid
wastes, it refers to the environmental protection requirements on anti-seepage, anti-rain, and anti-dust of the General Industrial
Solid Waste Storage and Landfill Pollution Control Standards (GB18599-2020). For collection, storage and transportation of
hazardous wastes, it complies with the requirements of the Technical Specifications for the Collection, Storage and Transportation
of Hazardous Wastes (HJ2025-2012), the Pollution Control Standards for the Storage of Hazardous Wastes (GB 18597-2001) and
the Amendment (Announcement No. 36 of 2013 of the Ministry of Environmental Protection).
Environmental protection administrative permits
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
Environmental Impact Assessment Report (Table):
1. Computer component production project (phase I);
2. Computer component production project (phase II);
3. 3C precision mechanical parts production expansion project.
Approval and reply of environmental assessment:
1. Ting Huan Biao Fu [2017] No. 123;
2. Ting Huan Ping Shu [2019] No. 2;
3. Yan Huan Shen [2021] No. 02003.
Acceptance report:
1. Acceptance report of computer component production project (phase I);
2. Acceptance report of computer component production project (phase II);
3. Acceptance report of 3C precision mechanical parts production expansion project.
Pollution Permit No.:
Pollution Permit No.: 91320900MA1R8A0N2B001V Valid period: From February 23, 2023 to February 22, 2028.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
Environmental impact assessment table:
1. Precision electronic component adjustment project (Phase I);
2. Precision electronic component adjustment project (Phase II);
3. Precision electronic component project (Phase III);
4. Precision electronic component technical renovation project;
5. Environmental impact assessment report of Ri Ming watch project.
Approval and reply of environmental assessment:
1. Jin Huan Xu [2014] No. 479;
2. Jin Huan Xu [2015] No. 323;
3. Jin Huan Xu [2018] No. 170;
4. Jin Huan Xu [2019] No. 254;
5. Jin Huan Xu [2020] No. 27;
Acceptance report:
1. Completion acceptance report of precision electronic component adjustment project (phase I);
2. Completion acceptance report of precision electronic component adjustment project (phase II);
3. Completion acceptance report of precision electronic component project (phase III);
4. Completion acceptance report of precision electronic component technical renovation project;
75
Luxshare Precision Industry Co., Ltd. Annual Report 2022
5. Completion acceptance report of Ri Ming watch project.
Pollution Permit No.:
Pollution Permit No.:91310000572654085A001V, Valid period: from January 30, 2022 to January 29, 2027
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
Approval and reply of environmental assessment:
Smart terminal precision module project: Jiang Zheng Huan Shu Fu [2022] No. 2.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
Environmental Impact Assessment Report (Table):
1. Production project for new 75 million pieces of precision electronic components (Phase I);
2. Production project for new 75 million pieces of precision electronic components (Phase II);
3. 3C product display screen project for new 25 million pieces/set;
4. 3C product display screen project for expanded 47 million pieces/set;
Approval and reply of environmental assessment:
1. Shan Huan Han [2016] No. 91;
2. Shan Huan Han [2018] No. 91;
3. Deng Ji Biao Bei [2020] No. 088;
4. Deng Ji Biao Bei [2022] No. 007.
Acceptance report:
1. Acceptance report of production project for new 75 million pieces of precision electronic components (phase I);
2. Acceptance report of production project for the stage 1 of new 75 million pieces of precision electronic components (phase
II);
3. Acceptance report of production project for the stage 2 of new 75 million pieces of precision electronic components (phase
II);
4. Acceptance report of 3C product display screen project for new 25 million pieces/set;
5. 3C product display screen project for expanded 47 million pieces/set;
Pollution Permit No.:
Pollution Permit No.: 91330421336400470U001Z Valid period: From March 14, 2023 to March 13, 2028.
Industry standards and discharge of pollutants involved in production and business activities
Category Name of
of main main
Name of the Number Excessiv
pollutants pollutants Distribution Emission Total
Company or Discharge of Pollutant discharge Total e
and and of discharge concentration/ approved
its method discharge standards implemented emissions emission
characteri characterist outlets intensity emissions
subsidiaries outlets s
stic ic
pollutants pollutants
Treated Integrated Emission
Luxcase
exhaust gas Standard of Air Pollutants
Precision Plant roof,
Air meets the (DB32/4041-2021) and
Technology SO2 16 and both east 3.04 0.82 / /
pollutants standards and the Emission Standard of
(Yancheng) and west sides
is emitted at Boiler Air Pollutants
Co., Ltd.
high altitude (DB32-4385-2022)
76
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Treated Discharge Standard of
Luxcase
exhaust gas Electroplating Pollutants
Precision Plant roof,
Air meets the (GB21900-2008) and the
Technology NOx 19 and both east 21.01 1.7 1.7853 /
pollutants standards and Emission Standard of
(Yancheng) and west sides
is emitted at Boiler Air Pollutants
Co., Ltd.
high altitude (DB32-4385-2022)
Treated Integrated Emission
Luxcase
exhaust gas Standard of Air Pollutants
Precision Plant roof,
Air Particulate meets the (DB32/4041-2021) and
Technology 15 and both east 1.82 3.37 / /
pollutants matter standards and the Emission Standard of
(Yancheng) and west sides
is emitted at Boiler Air Pollutants
Co., Ltd.
high altitude (DB32-4385-2022)
Treated
Luxcase
exhaust gas
Precision Plant roof, Integrated Emission
Air meets the
Technology VOCs 23 and both east 1.71 Standard of Air Pollutants 8.06 / /
pollutants standards and
(Yancheng) and west sides (DB32/4041-2021)
is emitted at
Co., Ltd.
high altitude
Luxcase
Precision
Water Ammonia Pipe Main outlet of
Technology 1 1.59 / 3.01 49.04 /
pollutants nitrogen discharge sewage station
(Yancheng)
Co., Ltd.
Luxcase
Precision
Water Total Pipe Main outlet of
Technology 1 2.86 / 5.73 7.08 /
pollutants phosphorus discharge sewage station
(Yancheng)
Co., Ltd.
Luxcase
Precision
Water Total Pipe Main outlet of
Technology 1 22.54 / 51.86 69.86 /
pollutants nitrogen discharge sewage station
(Yancheng)
Co., Ltd.
Luxcase
Precision Integrated Wastewater
Water Anionic Pipe Main outlet of
Technology 1 0.07 Discharge Standard 0.20 / /
pollutants surfactant discharge sewage station
(Yancheng) (GB8978-1996)
Co., Ltd.
77
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxcase
Precision Chemical Integrated Wastewater
Water Pipe Main outlet of
Technology oxygen 1 41.75 Discharge Standard 92.53 729.32 /
pollutants discharge sewage station
(Yancheng) demand (GB8978-1996)
Co., Ltd.
Luxcase
Precision Integrated Wastewater
Water Pipe Main outlet of
Technology PH value 1 7.4 Discharge Standard / / /
pollutants discharge sewage station
(Yancheng) (GB8978-1996)
Co., Ltd.
Luxcase
Precision Integrated Wastewater
Water Pipe Main outlet of
Technology Fluoride 1 2.92 Discharge Standard 6.22 / /
pollutants discharge sewage station
(Yancheng) (GB8978-1996)
Co., Ltd.
Luxcase
Precision Integrated Wastewater
Water Suspended Pipe Main outlet of
Technology 1 32.92 Discharge Standard 88.23 / /
pollutants solids discharge sewage station
(Yancheng) (GB8978-1996)
Co., Ltd.
Luxcase
Precision Integrated Wastewater
Water Pipe Main outlet of
Technology Petroleum 1 0.38 Discharge Standard 0.95 / /
pollutants discharge sewage station
(Yancheng) (GB8978-1996)
Co., Ltd.
Luxcase Reuse of
Precision heavy Reuse Emission Standards of
Chromium Without
Technology metal without 1 0 Electroplating Pollutants 0 / /
VI discharge
(Yancheng) wastewat discharge (GB21900-2008)
Co., Ltd. er
Luxcase Reuse of
Precision heavy Reuse Emission Standards of
Without
Technology metal Total nickel without 1 0 Electroplating Pollutants 0 / /
discharge
(Yancheng) wastewat discharge (GB21900-2008)
Co., Ltd. er
78
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxcase Reuse of
Precision heavy Reuse Discharge Standard of
Total Without
Technology metal without 1 0 Electroplating Pollutants 0 / /
copper discharge
(Yancheng) wastewat discharge (GB21900-2008)
Co., Ltd. er
Luxcase Reuse of
Precision heavy Reuse Discharge Standard of
Total Without
Technology metal without 1 0 Electroplating Pollutants 0 / /
chromium discharge
(Yancheng) wastewat discharge (GB21900-2008)
Co., Ltd. er
Treated
Ri Ming
exhaust gas
Computer Integrated Emission
Air meets the
Accessory Oil mist 63 Plant roof 0.2 Standard of Air Pollutants 0.213 / /
pollutants standards and
(Shanghai) (DB31_933-2015)
is emitted at
Co., Ltd.
high altitude
Treated
Ri Ming
exhaust gas
Computer Integrated Emission
Air Particulate meets the
Accessory 6 Plant roof 2.7 Standard of Air Pollutants 0.845 / /
pollutants matter standards and
(Shanghai) (DB31_933-2015)
is emitted at
Co., Ltd.
high altitude
Treated
Ri Ming
exhaust gas
Computer Integrated Emission
Air meets the
Accessory VOCs 3 Plant roof 3.7 Standard of Air Pollutants 0.037 / /
pollutants standards and
(Shanghai) (DB31_933-2015)
is emitted at
Co., Ltd.
high altitude
Treated
Ri Ming
exhaust gas
Computer Integrated Emission
Air meets the
Accessory Oil smoke 1 Plant roof 0.6 Standard of Air Pollutants 0.004 / /
pollutants standards and
(Shanghai) (DB31_933-2015)
is emitted at
Co., Ltd.
high altitude
79
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ri Ming
Computer Integrated Wastewater
Water Pipe Main outlet of
Accessory PH value 1 7.4 Discharge Standard / / /
pollutants discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Suspended Pipe Main outlet of
Accessory 1 15 Discharge Standard 5.895 / /
pollutants solids discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Pipe Main outlet of
Accessory Petroleum 1 0.54 Discharge Standard 0.124 / /
pollutants discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Pipe Main outlet of
Accessory COD 1 49 Discharge Standard 18.69 33.842 /
pollutants discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Ammonia Pipe Main outlet of
Accessory 1 2.13 Discharge Standard 0.233 1.0527 /
pollutants nitrogen discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Anionic Pipe Main outlet of
Accessory 1 0.07 Discharge Standard 0.009 / /
pollutants surfactant discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
80
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ri Ming
Computer Integrated Wastewater
Water Total Pipe Main outlet of
Accessory 1 0.42 Discharge Standard 0.14 / /
pollutants phosphorus discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Total Pipe Main outlet of
Accessory 1 3.1 Discharge Standard 1.358 5.25 /
pollutants nitrogen discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Ri Ming
Computer Integrated Wastewater
Water Pipe Main outlet of
Accessory BOD5 1 31.6 Discharge Standard 5.772 / /
pollutants discharge sewage station
(Shanghai) (DB31-199-2018)
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas
Manufactur Discharge Standard of
Air NOx meets the
e 2 A2/A14 2.25 Electroplating Pollutants 3.423 11.987 /
pollutants (anode) standards and
Technology (GB21900-2008)
is emitted at
(Rugao)
high altitude
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas A2/A14/waste
Manufactur
Air NOx meets the water (Tong Zheng Ban Fa
e 3 32 1.451 11.987 /
pollutants (boiler) standards and treatment {2020} No. 34)
Technology
is emitted at station
(Rugao)
high altitude
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas A2/A14/waste Table 3 of Emission
Manufactur Particulate
Air meets the water Standard of Boiler Air
e matter 3 4.575 0.224 8.698 /
pollutants standards and treatment Pollutants
Technology (boiler)
is emitted at station (GB13271-2014)
(Rugao)
high altitude
Co., Ltd.
81
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Rida
Treated
Intelligent
exhaust gas A2/A14/waste Table 3 of Emission
Manufactur
Air SO2 meets the water Standard of Boiler Air
e 1 13 0.048 4.854 /
pollutants (boiler) standards and treatment Pollutants
Technology
is emitted at station (GB13271-2014)
(Rugao)
high altitude
Co., Ltd.
A2/A3/A14/A
Rida
Treated 15/A16/A17
Intelligent
exhaust gas wastewater
Manufactur Integrated Emission
Air Particulate meets the treatment
e 22 2.973 Standard of Air Pollutants 4.359 8.698 /
pollutants matter standards and station and
Technology (GB31572-2015)
is emitted at hazardous
(Rugao)
high altitude waste
Co., Ltd.
warehouse
A1/A2/A3/A1
Rida
Treated 4/A16/A17
Intelligent
Non-metha exhaust gas wastewater
Manufactur Integrated Emission
Air ne meets the treatment
e 18 1.626 Standard of Air Pollutants 5.577 8.948 /
pollutants hydrocarbo standards and station and
Technology (GB31572-2015)
n is emitted at hazardous
(Rugao)
high altitude waste
Co., Ltd.
warehouse
Rida
Treated Wastewater
Intelligent
exhaust gas treatment
Manufactur Emission Standard of
Air meets the station and
e Ammonia 2 0.7525 Odorous Pollutants 0.07 0.388 /
pollutants standards and hazardous
Technology (GB14554-93)
is emitted at waste
(Rugao)
high altitude warehouse
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas
Manufactur Wastewater Emission Standard of Air
Air meets the
e Alkali mist 1 treatment 0.95 Pollutants 0.044 0.099 /
pollutants standards and
Technology station (DB31/933-2015)
is emitted at
(Rugao)
high altitude
Co., Ltd.
82
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Rida
Treated A2/A14/waste
Intelligent
exhaust gas water
Manufactur Discharge Standard of
Air Sulfuric meets the treatment
e 4 0.43 Electroplating Pollutants 0.219 0.508 /
pollutants acid mist standards and station/hazard
Technology (GB21900-2008)
is emitted at ous waste
(Rugao)
high altitude warehouse
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas
Manufactur Nickel and Integrated Emission
Air meets the
e its 2 A2/A14 0.0016 Standard of Air Pollutants 0.00057 0.00463 /
pollutants standards and
Technology compounds (GB31572-2015)
is emitted at
(Rugao)
high altitude
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas
Manufactur Benzene Integrated Emission
Air meets the
e series of 2 A1 0.01575 Standard of Air Pollutants 0.008 0.034 /
pollutants standards and
Technology matters (GB31572-2015)
is emitted at
(Rugao)
high altitude
Co., Ltd.
Rida
Treated
Intelligent
exhaust gas
Manufactur Integrated Emission
Air Phosphoric meets the
e 2 A2/A14 / Standard of Air Pollutants 0.031 / /
pollutants acid mist standards and
Technology (DB31/933-2015)
is emitted at
(Rugao)
high altitude
Co., Ltd.
83
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Discharge Standard
Water Pipe Main outlet of
e PH 1 / (GB8978-1996), the / / /
pollutants discharge sewage station
Technology requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Discharge Standard
Water Suspended Pipe Main outlet of
e 1 10.523 (GB8978-1996), the 2.571 19.791 /
pollutants solids discharge sewage station
Technology requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Chemical Discharge Standard
Water Pipe Main outlet of
e oxygen 1 9.619 (GB8978-1996), the 2.125 98.956 /
pollutants discharge sewage station
Technology demand requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
84
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Discharge Standard
Water Ammonia Pipe Main outlet of
e 1 0.113 (GB8978-1996), the 0.026 9.896 /
pollutants nitrogen discharge sewage station
Technology requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Discharge Standard
Water Total Pipe Main outlet of
e 1 1.067 (GB8978-1996), the 0.165 0.990 /
pollutants phosphorus discharge sewage station
Technology requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Discharge Standard
Water Total Pipe Main outlet of
e 1 7.086 (GB8978-1996), the 2.251 29.687 /
pollutants nitrogen discharge sewage station
Technology requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
85
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Biochemica Discharge Standard
Water Pipe Main outlet of
e l oxygen 1 2.209 (GB8978-1996), the 0.477 19.791 /
pollutants discharge sewage station
Technology demand requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
Standards provided in
Table 3 of Discharge
Standard of Electroplating
Pollutants
(GB21900-2008), Level 3
Rida provided in Table 4 of
Intelligent Integrated Wastewater
Manufactur Discharge Standard
Water Total Pipe Main outlet of
e 1 0.091 (GB8978-1996), the 0.019 0.297 /
pollutants aluminum discharge sewage station
Technology requirements on pipe
(Rugao) connection of Rugao
Co., Ltd. Fugang Water Treatment
Co., Ltd., standards
provided in Table 3 of
Discharge Standard of
Electroplating Pollutants
(GB21900-2008)
Treatment of pollutants
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
Exhaust gas from CNC machining is treated by oil mist scrubber through oil mist absorption; exhaust gas from glue coating,
dispensing, and printing is treated through secondary activated carbon adsorption. According to routine monitoring reports of
existing projects, the removal rate of CNC machining exhaust gas after treatment by oil mist scrubber can reach over 85%.
According to the secondary adsorption activated carbon manual, with respect to the adsorption capacity of activated carbon for
various organic substances in the printing and dispensing exhaust gas, the removal efficiency of organic substances is 70% for
primary activated carbon particle adsorption and 90% for secondary activated carbon particle adsorption, which can meet the
relevant requirements of Level 2 of non-methane hydrocarbons in the Integrated Emission Standard of Air Pollutants
(DB32/4041-2021);
Dust generated from sandblasting, drilling, and laser engraving is treated by wet dust collector after collection. The emission
concentration and emission rate of dust generated from sandblasting, drilling, and laser engraving can meet the corresponding limits
provided in the Integrated Emission Standard of Air Pollutants (DB32/4041-2021). According to the Industrial Source Coefficient
Handbook for the Second National Pollution Source Census as the mechanical industry coefficient handbook - pre-treatment - dry
pre-treatment - shot blasting, dust can be removed by the single tube (multi-tube parallel) cyclone device with a removal efficiency
86
Luxshare Precision Industry Co., Ltd. Annual Report 2022
of 60%. Then after wet dust collector treatment, the removal efficiency can reach over 90%. Based on the actual operation of the
project, the removal efficiency of sandblasting dust after treatment by its own dust collector and then by wet dust collector can
reach over 90%, and the removal efficiency of drilling and laser engraving dust is around 85%. Therefore, the said company’s dust,
after treatment by wet dust collector, can be discharged in steady compliance with standards.
Natural gas boilers use domestically advanced low-nitrogen combustion technology, which is a feasible technology for the
Technical Specification for Application and Issuance of Pollutant Discharge Permits - Boilers. According to routine monitoring data
of existing projects and low-nitrogen combustion retrofitting and commissioning reports, the SO2, NOx, and particulate matter in
boiler flue gas can meet the corresponding limits of the Emission Standard of Boiler Air Pollutants (DB32/4385-2022).
2. Prevention measures for wastewater pollution:
The said company implements the principle of “separation of rainwater and sewage, and separation of clean water and polluted
water”. 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.
Domestic wastewater is treated using a two-stage septic tank system. The two-stage septic tank is composed of two interconnected
sealed septic tanks. Feces enter the first tank through an inlet pipe and flow downstream to the second tank, where suspended
organic matter in domestic wastewater is removed by sedimentation and anaerobic fermentation. This treatment facility is a primary
transitional domestic treatment structure. Comprehensive wastewater is degraded in the A/O biochemical system to remove organic
pollutants such as COD, nitrogen, and phosphorus. The system’s denitrification capacity is strengthened through a two-stage
biochemical system, and the treated wastewater is discharged to the sewage treatment plant. According to existing testing reports,
the quality of the said company’s effluent meets the relevant standards for the sewage station. Heavy metal wastewater is treated
and reused through a process of “sterilization + membrane treatment + evaporation and crystallization + ion exchange.” The main
process remains unchanged. The concentrated water of low-concentration wastewater is subject to ultrafiltration, sand filtration, and
reverse osmosis, while high-concentration wastewater is subject to sedimentation and pressure filtration before entering PFET
evaporation, and then the purified water is reused in the anodizing process.
3. Measures for noise pollution prevention:
The outdoor equipment, equipment near the plant boundary and cooling towers are environmentally friendly. In the layout plan
of the plant, the main workshop with concentrated noise is located in the center of the plant as much as possible. Other noise
sources are located as far away from the plant boundary as possible to reduce their impact on the external environment. Soundproof
windows (or double-layer soundproof windows) and soundproof doors are installed on the side of the workshop adjacent to the
plant boundary to reduce the impact of workshop noise on the external environment by enhancing sound insulation and reducing the
strength of the noise source. Vertical greening belts are planted within the plant area to effectively provide certain sound insulation
and noise reduction.
4. Prevention measures for hazardous waste pollution:
Hazardous waste warehouses, domestic waste rooms, and solid waste garbage rooms are set up in the plant to comprehensively
manage solid waste from various aspects such as generation, collection, storage, transportation, and disposal. Effective measures are
taken to prevent the loss of solid waste in the process of generation, collection, storage, and transportation, and the “three defenses”
are implemented. Effective disposal methods and technologies are adopted, and by focusing on the reuse of useful materials to “turn
waste into treasure’, we recycle a part of the resources and reduce the disposal burden. For those waste materials that cannot be
recycled yet, we effectively dispose of them in light of the principle of “harmlessness”.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
(1) A closed operation room is set up for the CNC machining process. All oil mist generated therefrom is treated through a
cyclone tower oil mist washing tower and discharged through a 17-meter-high exhaust duct. The oil mist in the discharged exhaust
gas meets the emission limits for air pollutants provided in the Integrated Emission Standard of Air Pollutants (DB31/933-2015);
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
according to routine monitoring reports of existing projects, the removal rate of CNC machining exhaust gas after treatment by oil
mist scrubber can reach over 85%.
(2) A closed operation room is set up for the laser engraving process. All dust generated therefrom is treated through a wet dust
collector and then discharged through a 22-meter-high exhaust duct. The removal efficiency can reach more than 75%, and the
particulate matter in the discharged waste gas meets the emission limits for air pollutants provided in the Integrated Emission
Standard of Air Pollutants (DB31/933-2015);
(3) All waste gas generated in the dispensing and coating process is collected and treated through an activated carbon
purification box, and then discharged through a 17-meter-high exhaust duct. The removal efficiency can reach more than 90%, and
the pollutants in the discharged waste gas meet the emission limits for air pollutants in the Integrated Emission Standard of Air
Pollutants (DB31/933-2015).
2. Prevention measures for wastewater pollution:
The said company implements the principle of “separation of rainwater and sewage, and separation of clean water and polluted
water”. 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. After
comprehensive wastewater is treated through emulsion breaking, precipitation, and biochemical treatment, it is discharged through
the same pipeline as the tail-water from pure water preparation and domestic wastewater. Some tail-water from pure water
preparation is reused as domestic facility water, and the intermediate water after treated in the sewage treatment station is reused in
the wet polishing process. The wastewater discharge outlet is equipped with online monitoring equipment and connected to the
Environmental Protection Bureau and Water Affairs Bureau. According to existing testing reports, the quality of the said company’s
effluent meets the relevant standards for the sewage station.
3. Measures for noise pollution prevention:
The outdoor equipment, equipment near the plant boundary and cooling towers are environmentally friendly. In the layout plan
of the plant, the main workshop with concentrated noise is located in the center of the plant as much as possible. Other noise
sources are located as far away from the plant boundary as possible to reduce their impact on the external environment. Soundproof
windows (or double-layer soundproof windows) and soundproof doors are installed on the side of the workshop adjacent to the
plant boundary to reduce the impact of workshop noise on the external environment by enhancing sound insulation and reducing the
strength of the noise source. Vertical greening belts are planted within the plant area to effectively provide certain sound insulation
and noise reduction.
4. Prevention measures for hazardous waste pollution:
Hazardous waste warehouses, domestic waste rooms, and solid waste garbage rooms are set up within the plant area to
comprehensively manage solid waste from various aspects such as generation, collection, storage, transportation, and disposal.
Effective measures are taken to prevent the loss of solid waste in the process of generation, collection, storage, and transportation,
and the “three defenses” are implemented. Effective disposal methods and technologies are adopted, and by focusing on the reuse of
useful materials to “turn waste into treasure’, we recycle a part of the resources and reduce the disposal burden. For those waste
materials that cannot be recycled yet, we effectively dispose of them in light of the principle of “harmlessness”.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
I, For the cutting fluid evaporates organic gases (measured in non-methane hydrocarbons) due to high-temperature cutting in
the CNC machining process of this project, the organic waste gas is collected by the overall workshop negative pressure system
after being treated by an oil mist separator that is equipped with the equipment, and treated through filtration and absorption by
activated carbon, and is then discharged in an organized manner through an exhaust pipe. The removal rate of non-methane
hydrocarbons is conservatively estimated to be 75%. For the non-methane hydrocarbons generated in processes such as injection
molding, gluing, and drying, this project adopts a treatment measure of “filtration + activated carbon adsorption.” For organic waste
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
gases (measured as non-methane hydrocarbons) generated in gluing and drying processes, they are planned to be collected by a
gas-collecting hood and then treated by the “filtration + activated carbon adsorption” process before being discharged in an
organized manner. For organic waste gases (measured as particulate matter) generated in spraying and drying processes, they are
planned to be collected by a gas-collecting hood and then treated by the “filtration + activated carbon adsorption” process before
being discharged in an organized manner. Particulate matter is mainly generated in the sandblasting process, and a two-stage wet
dust removal treatment measure is adopted. Through the wet dust removal technology, the dust particles are removed by being
condensed into large particles through strong collision with water mist, or being captured by inertia and centrifugal force. By taking
two-stage wet dust removal measure in this project, a removal efficiency of particulate matter is about 80%. Two-stage alkaline
spraying is used for acid and alkali waste gas in this project. According to the provided waste gas treatment design plan, this system
has a removal efficiency of about 95% for sulfuric acid mist and phosphoric acid mist, and an 85% removal efficiency for nitrogen
oxides, and ensures that the waste gas meets the emission standards. The sewage station waste gas in this project includes
particulate matter, ammonia, hydrogen sulfide, non-methane hydrocarbons produced in sewage treatment, as well as sulfuric acid
mist, alkaline mist, and non-methane hydrocarbons produced in the tank storage area. After being collected, the waste gas from the
storage tank and sewage treatment is treated by “alkali washing + water washing + defogging + microwave UV catalysis” before
being discharged together with the drying dust generated by the “bag filter” treatment. In accordance with the Notice of the Nantong
Municipal Government Office on Issuing the 2020 Air Pollution Prevention and Control Work Plan (Tong Zheng Ban Fa [2020] No.
34), the low-nitrogen transformation task of gas-fired boilers has been fully completed, with the emission concentrations of nitrogen
oxides not exceeding 50 milligrams per cubic meter. Based on the monitoring data of the boiler running at about 80% load inside
the plant, the nitrogen oxide emissions can meet the requirements of the Document (Tong Zheng Ban Fa) [2020] No. 34, with an
emission concentration not exceeding 50 milligrams/cubic meter.
2. Prevention measures for wastewater pollution:
The wastewater generated by this project include process wastewater, wastewater from waste gas treatment, wastewater from
workshop and plant floor washing, concentrated wastewater and backwash wastewater, emissions from gas-fired boilers,
wastewater from circulating cooling systems, initial rainwater, and domestic wastewater. The system at the wastewater treatment
station is mainly divided into five categories: chromium-containing wastewater treatment system, nickel-containing wastewater
treatment system, phosphorus-containing wastewater treatment system, organic wastewater treatment system, and general
wastewater treatment system.
The condensate from chromium-containing wastewater, after undergoing “reduced pressure evaporation” treatment, is treated
with the chromium-containing wastewater through “chemical precipitation + sand and charcoal filtration + ultrafiltration + ion
exchange + two-stage reverse osmosis (RO)” before being reused. The condensate from nickel-containing wastewater, after
undergoing “reduced pressure evaporation” treatment, is treated with the nickel-containing wastewater through “chemical
precipitation + sand and charcoal filtration + ultrafiltration + ion exchange + two-stage RO” before being reused. The condensate
from phosphorus-containing wastewater, after undergoing “two-stage coagulation and sedimentation + pressure filtration” treatment,
is treated with phosphorus-containing wastewater and wastewater from phosphorus-containing air pollution control through
“two-stage reaction and precipitation” treatment before being discharged into the receiving pool. Wastewater containing oil and
compressor wastewater are pre-treated with “acidification, breaking emulsion, and oil-water separation”, and then, together with
acidic wastewater and other wastewater from exhaust gas treatment, undergo “acidification, breaking emulsion, flotation, Fenton
oxidation, and coagulation and sedimentation” treatment. Then, together with organic wastewater/liquid, they undergo “coagulation
and sedimentation + catalytic oxidation” treatment, and finally, together with alkaline wastewater/liquid that has been pre-treated
with “coagulation and sedimentation”, plant floor washing wastewater, and initial rainwater, they undergo “hydrolysis, acidification,
precipitation + anaerobic and aerobic treatment + two-stage sedimentation tank” treatment before being discharged into the
receiving pool. General cleaning wastewater, grinding wastewater, and wastewater from pure water preparation are treated with
“coagulation and sedimentation + sand and charcoal filtration + ultrafiltration” before being reused.
3. Measures for noise pollution prevention:
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
When purchasing equipment, it selects equipment with small power and low noise as much as possible; use vibration reduction
mounts to weaken the vibration generated when the fan rotates; sets the sound source indoors as much as possible to achieve sound
insulation and noise reduction. It uses double-layer soundproof windows for lighting windows in workshops with high noise
equipment; arrange the main noise sources in the overall layout in the middle of the workshop, away from the plant boundary, and
add soundproof covers to equipment such as fans; equip the high-power equipment with special vibration reduction and noise
reduction equipment when purchasing it; and strengthen the greening of the factory area and establish a green isolation belt. In
addition, it plants trees and shrubs to create a green noise barrier around the factory boundary, absorbing sound and reducing noise.
4. Prevention measures for hazardous waste pollution:
It sets up a hazardous waste warehouse within the plant; establish a hazardous waste ledger management system to track and
record the entire process of hazardous waste circulation within the said company, combine it with production records to establish a
hazardous waste ledger; set up hazardous waste identification signs for the containers and packaging of hazardous waste, as well as
for the facilities and places for collecting, storing, transporting, and disposing of hazardous waste; it is forbidden to collect, store,
transport, or dispose of hazardous waste mixed with incompatible substances that have not been disposed of safely, and it is
forbidden to mix hazardous waste into non-hazardous waste for storage and disposal.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
1. Prevention measures for exhaust gas pollution:
It uses the electrostatic oil removal to absorb and treat oil mist of the exhaust gas from CNC machining, and uses secondary
activated carbon adsorption to treat exhaust gas from dispensing and injection molding. According to routine monitoring reports of
existing projects, the removal efficiency of electrostatic oil removal equipment for CNC machining can reach more than 85%;
sulfuric acid mist and nitric acid mist are treated with an alkali spray tower after being collected, and are only discharged after
meeting the emission standards.
According to the secondary adsorption activated carbon manual, with respect to the adsorption capacity of activated carbon for
various organic substances in the dispensing exhaust gas, the removal efficiency of organic substances is 70% for primary activated
carbon particle adsorption and 90% for secondary activated carbon particle adsorption, which can meet the relevant requirements of
Level 2 of non-methane hydrocarbons in the Integrated Emission Standard of Air Pollutants (GB16297-1996);
Dust generated from sandblasting, drilling, and laser engraving is treated by wet dust collector after collection. The emission
concentration and emission rate of dust generated from sandblasting, drilling, and laser engraving can meet the corresponding limits
provided in the Integrated Emission Standard of Air Pollutants (GB16297-1996). According to the Industrial Source Coefficient
Handbook for the Second National Pollution Source Census as the mechanical industry coefficient handbook - pre-treatment - dry
pre-treatment - shot blasting, dust can be removed by the single tube (multi-tube parallel) cyclone device with a removal efficiency
of 60%. Then after wet dust collector treatment, the removal efficiency can reach over 90%. Based on the actual operation of the
project, the removal efficiency of sandblasting dust after treatment by its own dust collector and then by wet dust collector can
reach over 90%, and the removal efficiency of drilling and laser engraving dust is around 85%. Therefore, the said company dust,
after treatment by wet dust collector, can be discharged in steady compliance with standards.
2. Prevention measures for wastewater pollution:
The said company implements the principle of “separation of rainwater and sewage, and separation of clean water and polluted
water”. 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.
Domestic wastewater is treated using a two-stage septic tank system. The two-stage septic tank is composed of two interconnected
sealed septic tanks. Feces enter the first tank through an inlet pipe and flow downstream to the second tank, where suspended
organic matter in domestic wastewater is removed by sedimentation and anaerobic fermentation. This treatment facility is a primary
transitional domestic treatment structure. Comprehensive wastewater is degraded in the A/O biochemical system to remove organic
pollutants such as COD, nitrogen, and phosphorus. The system’s denitrification capacity is strengthened through a two-stage
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
biochemical system, and the treated wastewater is discharged to the sewage treatment plant. According to existing testing reports,
the quality of the said company’s effluent meets the relevant standards for the sewage station. Heavy metal wastewater is treated
and reused through a process of “sterilization + membrane treatment + evaporation and crystallization + ion exchange.” The main
process remains unchanged. The concentrated water of low-concentration wastewater is subject to ultrafiltration, sand filtration, and
reverse osmosis, while high-concentration wastewater is subject to sedimentation and pressure filtration before entering PFET
evaporation, and then the purified water is reused in the anodizing process.
3. Measures for noise pollution prevention:
The outdoor equipment, equipment near the plant boundary and cooling towers are environmentally friendly. In the layout plan
of the plant, the main workshop with concentrated noise is located in the center of the plant area as much as possible. Other noise
sources are located as far away from the plant boundary as possible to reduce their impact on the external environment. Soundproof
windows (or double-layer soundproof windows) and soundproof doors are installed on the side of the workshop adjacent to the
plant boundary to reduce the impact of workshop noise on the external environment by enhancing sound insulation and reducing the
strength of the noise source. Vertical greening belts are planted within the plant area to effectively provide certain sound insulation
and noise reduction.
4. Prevention measures for hazardous waste pollution:
Hazardous waste warehouses, domestic waste rooms, and solid waste garbage rooms are set up within the plant area to
comprehensively manage solid waste from various aspects such as generation, collection, storage, transportation, and disposal.
Effective measures are taken to prevent the loss of solid waste during the process of generation, collection, storage, and
transportation, and the “three defenses” are implemented. Effective disposal methods and technologies are adopted, and by focusing
on the recycling of useful materials to “turn waste into treasure’, it recycles a part of the resources and reduce the disposal burden.
For those waste materials that cannot be recycled yet, it effectively disposes of them in light of the principle of “harmlessness”.
Environmental self-monitoring program
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to the pollution discharge
permit and environmental impact assessment requirements, tests the organized exhaust gas at the emission outlet once every half a
year generally, the unorganized exhaust gas once every half a year, wastewater discharge outlets once every quarter, and noise once
every six months, with the relevant test reports as data compliance support.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to the pollution discharge
permit and environmental impact assessment requirements, tests the organized exhaust gas at the emission outlet once every half a
year generally, the unorganized exhaust gas once every half a year, wastewater discharge outlets once every month, and noise once
every half quarter, with the relevant test reports as data compliance support.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to the environmental impact
assessment requirements, tests the organized exhaust gas at the emission outlet once every quarter, VOC waste gas once every half a
year, the unorganized exhaust gas once every half a year, wastewater discharge outlets once every month, and noise once every
quarter, with the relevant test reports as data compliance support.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
It updates and prepares the self-monitoring plan for next year at the end of each year according to the pollution discharge
permit and environmental impact assessment requirements, tests the organized exhaust gas at the emission outlet once every half a
year, the unorganized exhaust gas once every half a year, wastewater discharge outlets once every quarter, noise once every quarter
and rain outlets once every six months, with the relevant test reports as data compliance support.
Emergency plan for abrupt environmental pollution accidents
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxcase Plant has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd Edition) in 2022, and has
completed the formalities for expert review and filing with the filing No.: 320902-2022-003-H.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
Ri Ming Plant has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd Edition) in 2022, and has
completed the formalities for expert review and filing with the filing No.: 02-310116-2022-060-L.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
Completed in June 2021, with the filing No.: 320682-2021-065-M.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
Ri Shan Plant has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd Edition) in 2021, and has
completed the formalities for expert review and filing with the filing No.: 320421-2021-105-M.
Investment in environment governance and protection, and payment of environmental protection taxes
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
The total amount of investment related to environmental protection equipment was about RMB15.2 million and the total
amount of monthly environmental protection tax that is declared on a quarterly basis was RMB154,000.00 in 2022.
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
The total amount of investment related to environmental protection equipment was about RMB12.688 million and the total
amount of monthly environmental protection tax that is declared on a quarterly basis was RMB166.92 in 2022.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
The investment in environmental protection was about RMB12 million and the paid environmental protection tax was
RMB15,840.15 in 2022.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
The total amount of investment related to environmental protection equipment was about RMB14.32 million and the total
amount of monthly environmental protection tax that is declared on a quarterly basis was RMB13,884.00 in 2022.
Measures taken to reduce carbon emissions during the reporting period and their effects
Applicable □N/A
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
Investment
Improvement project Program Income (0’000 kwh)
(RMB0’000)
Optimization of solar hot
Utilization of solar energy waste system 25 157
water system
Energy saving optimization
Switch to cooling main engine to improve efficiency 18 57
of air conditioning system
Intelligent control of air conditioning for high
Yinrui Energy Saving 0 113
efficiency operation
Energy saving of exhaust
Energy saving control of exhaust gas tower 0 993
gas tower
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
Investment Income (0’000
Improvement project Program
(RMB0’000) kwh)
Compressed air leakage
Compressed air leakage improvement 0 66
improvement
CNC machine centralized Independent small transformer of CNC replaced by
0 23
pressure conversion centralized pressure conversion
92
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Replacement of air Conventional adsorption dryers replaced by zero-loss suction
0 44
compressors dryers
Replacement by energy
Ordinary lamps replaced by high-efficiency LED lamps 0 9.9
saving lamps
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
Annual
Improvement Investment Annual power cost
Program
project (RMB0’000) savings (kwh) savings
(RMB)
Lighting Based on the change in the plant workshop process and 3167.0 128206 96154
improvement staff’s actual needs for dormitory occupancy, it makes
rectification and optimization in the areas of sufficient or
excessive lighting, opens or removes isolation control
Exhaust gas Base on the actual production scale of workshop 0 663888 497916
equipment production, it adjusts downward the operation frequency of
control exhaust gas equipment while the demand of production is
met
Air conditioning Based on the outdoor temperature and workshop demand, it 0 967936 725952
temperature reasonably adjusts the air conditioning supply temperature
control to reduce the equipment operating load
BGA clean room Through the understanding of the product process, 50% ± 5 0 3388256 2541192
temperature and has seriously exceeded the product demand standard, and
humidity control after active discussion with the department heads, it
confirms that it controls the temperature and humidity
within 55% ± 15 based on the product standard demand
Nitrogen piping It connects the nitrogen pipelines in the plant in a 0 1526000 1144500
improvement reasonable manner to achieve interconnection of pipelines
in the whole plant, so as to avoid “big horse pulling small
car” in single region supply and lead to energy waste.
Improvement of It connects the pipelines of Buildings A14/A16 to reduce 0 1062160 796620
A6/A14 air the cost of power generation during power outages and add
pressure pipeline an efficient safeguard in case of sudden emergencies.
interconnection
Improvement of It adds split-type air conditioner to reduce the operating 10200 4391712 3293784
excessive load of the air conditioning units and reduce operating
temperature energy consumption
program of the
clean room
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
Investment
Improvement project Program Income (0’000 kwh)
(RMB0’000)
Ice machine energy Refer to area A. The ice machine and pump load are
0 406.2
saving system in areas automatically adjusted according to real-time monitoring of
93
Luxshare Precision Industry Co., Ltd. Annual Report 2022
B and C ice water and cooling water inlet and outlet temperatures
Air compressor room
linkage control system
Installation of online monitoring of air pressure systems, joint
and frequency 0 477
control and deployment of air compressors
conversion energy
saving improvement
Clean room air pressure
replaced by vacuum Switch air pressure to vacuum generator 0 57.6
suction
Centralized control of It sets the opening area and time to achieve automatic control
0 21.91
clean room lighting of light and reduce waste based on the production demand
Administrative penalties imposed due to environmental issues during the reporting period
Effects on the
Name of the Rectification
Reasons for listed company’s
Company or its Violations Penalty results measures of the
penalties production and
subsidiaries Company
operation
None None None None None None
Other environmental information to be disclosed
I. Luxcase Precision Technology (Yancheng) Co., Ltd.
The said company takes the initiative to make PRTR information disclosure at the platform of the Institute of Public and
Environmental Affairs (IPE) to the public, disclosing the emissions of wastewater and exhaust gas and related implementation
standards every year; and fills out and reports the annual environmental information in the pollution resource management system
“One Enterprise and One File” of Jiangsu Province (column of disclosure of enterprise environmental information according to the
law).
II. Ri Ming Computer Accessory (Shanghai) Co., Ltd.
The said company takes the initiative to make PRTR information disclosure at the platform of the Institute of Public and
Environmental Affairs (IPE) to disclose to the public the emissions of wastewater and exhaust gas and related implementation
standards every year; and fills out and reports the annual environmental information in the system of disclosure of the enterprise
environmental information according to the law (Shanghai), and make to the public the wastewater, exhaust gas, noise and other
pollution emission factors on the national pollution source information disclosure platform every month.
III. Rida Intelligent Manufacture Technology (Rugao) Co., Ltd.
The said company takes the initiative to make PRTR information disclosure at the platform of the Institute of Public and
Environmental Affairs (IPE) to the public, disclosing the emissions of wastewater and exhaust gas and related implementation
standards every year.
IV. Ri Shan Computer Accessory (Jiashan) Co., Ltd.
The said company takes the initiative to make PRTR information disclosure at the platform of the Institute of Public and
Environmental Affairs (IPE) to the public, disclosing the emissions of wastewater and exhaust gas and related implementation
standards every year; and fills out and reports the annual environmental information in the system of the disclosure of enterprise
environmental information according to the law (Zhejiang).
Other environmental information
Luxshare-ICT attaches great importance to possible impact of climate changes on the Company, and has established a carbon
neutral working group led by the Board of Directors, coordinated by the sustainable development center and participated in by all
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
plants to respond to issues related to climate changes in a comprehensive manner. Based on our actual business and with reference
to the external standards, it identifies the applicable climate risks and opportunities, rank them according to the increasing
probability of occurrence and degree of impact, and then submit them to the Strategy Committee of the Board of Directors for
deliberation and approval. When necessary, our risk management departments prepare or add the countermeasures for risks and
opportunities of higher importance and urgency. In addition, it works out a claim change action plant and implement a low-carbon
energy transition plan, and is committed to achieving carbon neutrality by 2025. During the reporting period, we actively used clean
energy and reduced greenhouse gas emissions by 394,605.79 tons of carbon dioxide equivalent through rooftop photovoltaic, green
procurement, direct purchase of green power and green energy fund investment or otherwise. Meanwhile, we promoted 266
energy-saving renovation projects for five major energy-using modules, including production electricity, gas supply system, central
air conditioning, workshop fan and living office, thereby reducing greenhouse gas emissions by a total of 117,404.85 tons of carbon
dioxide equivalent.
II. Description of social responsibilities
The Company’s 2022 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 actively participated in and contributed to the community development and building, and conducted colorful
activities to care for special groups and give back to society, and made contribution to a harmonious society. 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 2022
Section VI Significant Matters
I. Fulfillment 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
Fulfillm
Committed Commitment Commitm Commitm ent of
Commitments Commitment details
by Type ent date ent period commit
ments
In order to seriously protect the legitimate rights and
interests of the Company and all of its shareholders,
each of all directors and executives of the Company
hereby makes commitments as follows:
1. I promise not to damage the Company’s interest
by transferring benefits to any other entity or
individual free of charge or under unfair conditions
or otherwise;
2. I promise to restrain the duty-related consumption
of directors and executives;
3. I promise not to use the Issuer’s assets to engage
in investment and consumption irrelevant to their
HUANG
performance of powers and duties;
Dawei; LI
Wei; LIU 4. I promise to link the remuneration rules
Zhonghua; developed by the Board of Directors or the
SONG Remuneration Committee and the implementation of
Commitments the Issuer’s remedial measures for diluted earnings;
Yuhong;
relating to any 5. I promise to link the conditions for the exercise of
WANG
initial public Other the Issuer’s stock option incentives to be issued and February
Laichun; Long-term Ongoing
offering or commitments the implementation of the Issuer’s remedial 21, 2022
WANG
subsequent measures for diluted earnings; and
Laisheng;
fund raising
WANG Tao; 6. I promise to strictly fulfill the aforesaid
WU commitments to ensure that the Issuer’s remedial
Tiansong; measures for diluted earnings can be fulfilled
ZHANG effectively. If I breach or refuse to fulfill any
Ying commitments 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 CSRC, the Shenzhen Stock Exchange or any
other competent securities regulatory authority in
accordance with the applicable rules and regulations
established or promulgated by such regulatory
authorities, and indemnify the Issuer or its
shareholders for the losses (if any) arising therefrom
according to the law.
7. From the date of issuing this Letter of
96
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Commitment until the completion of this non-public
offering of stocks by the Issuer, if the CSRC has
issued other new provisions on measures to
compensate for diluted returns and commitments,
and the aforesaid commitments fail to meet such
new regulatory provisions issued by the CSRC, I
undertake to give supplementary commitments in
accordance with the latest provisions of the CSRC.
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 makes
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 promise to strictly fulfill the aforesaid
commitments to ensure that the Issuer’s remedial
measures for diluted earnings can be fulfilled
effectively. If we/I breach or refuse to fulfill any
commitment set forth above, I will make
explanations and apologies and perform other
Commitments Luxshare
obligations required by the applicable regulations,
relating to any Limited;
and agree to accept any punishment or regulatory
initial public WANG Other February
action that may be imposed on or taken against me Long-term Ongoing
offering or Laichun; commitments 21, 2022
by the CSRC, the Shenzhen Stock Exchange or any
subsequent WANG
other competent securities regulatory authority in
fund raising Laisheng
accordance with the applicable rules and regulations
established or promulgated by such regulatory
authorities, and indemnify the Issuer or its
shareholders for the losses (if any) arising therefrom
according to the law.
3. From the date of issuing this Letter of
Commitment until the completion of this non-public
offering of stocks by the Company, if the CSRC has
issued other new provisions on measures to
compensate for diluted returns and commitments,
and the aforesaid commitments fail to meet such
new regulatory provisions issued by the CSRC, we/I
undertake to give supplementary commitments in
accordance with the latest provisions of the CSRC.
Commitments
After the completion of the transactions
relating to
Commitments contemplated by the announcement on external
horizontal
relating to any investment and related-party transactions disclosed
competition,
initial public Luxshare by the Company on November 13, 2020, we and our November
related-party Long-term Ongoing
offering or Limited affiliates will not engage in any business that is the 13, 2020
transactions
subsequent same as or substantially in competition with the
and
fund raising business of the Company or any entity controlled by
occupation of
the Company in any manner.
funds
Commitments HUANG In accordance with the applicable regulations of the
relating to any Dawei; LI CSRC, in order to ensure the effective
initial public Bin; LIN Other implementation of the Company’s remedial July 11,
Long-term Ongoing
offering or Yifei; commitments measures for diluted earnings, each of the directors 2019
subsequent WANG and executives of the Company hereby makes
fund raising Laichun; commitments as follows:
97
Luxshare Precision Industry Co., Ltd. Annual Report 2022
WANG 1. I will not transfer benefits to any other entity or
Laisheng; individual without compensation or on unfair terms,
WU or otherwise damage the interest of the Company.
Tiansong; 2. I will exercise self-discipline in consumption in
XIONG performing my duties.
Tengfang; 3. I will not use the assets of the Company to engage
XU in any investment or consumption activity not in
Huaibin, connection with my duties.
XUE
4. I will, within my powers, procure the linkage
Haigao; YE
between the remuneration system adopted by the
Yiling;
Board of Directors or the Remuneration and
ZHANG
Appraisal Committee and the implementation of the
Ying
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 promise to strictly fulfill the aforesaid
commitments to ensure that the Company’s remedial
measures for diluted earnings can be fulfilled
effectively. 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 CSRC, 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 the law.
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.
Commitments Luxshare 2. We/I promise to effectively implement the
relating to any Limited; remedial measures for diluted earnings formulated
initial public WANG Other by the Company and fulfill our/my corresponding July 11,
Long-term Ongoing
offering or Laichun; commitments commitments on the remedial measures for diluted 2019
subsequent WANG earnings. If we/I breach or fail to perform the
fund raising Laisheng commitments set forth above, we/I agree to accept
any punishment or regulatory action that may be
imposed on or taken against us/me by the CSRC, 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. If we/I
breach or fail to fulfill the commitments set forth
above, resulting in losses to the Company or the
98
Luxshare Precision Industry Co., Ltd. Annual Report 2022
investors, we/I are/am willing to compensate for
such losses according to the law.
3. From the date of this commitment till the date of
completion of this offering, if the CSRC or any other
competent securities regulatory authority adopts any
new regulation regarding the remedial measures for
diluted earnings and commitments in 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.
Each of all directors and executives of the Company
hereby commitments as follows:
BAI Rujing;
CHEN (1) I will not transfer benefits to any other entity or
Chaofei; individual without compensation or on unfair terms,
DONG or otherwise damage the interest of the Company;
Jianhai; LI (2) I will exercise self-discipline in consumption in
Bin; LI performing my duties;
Jing; LI (3) I will not use the assets of the Company to
Commitments
Xiongwei; engage in any investment or consumption activity
relating to any
LIN Yifei; not in connection with my duties;
initial public Other March 11,
WANG Ji; (4) I will procure the linkage between the Long-term Ongoing
offering or commitments 2016
WANG remuneration system adopted by the Board of
subsequent
Laichun; Directors or the Remuneration and Appraisal
fund raising
WANG Committee and the implementation of the
Laisheng; Company’s remedial measures for diluted earnings;
XU
(5) If the Company establishes any share incentive
Huaibin; YE
plan in the future, I will procure the linkage between
Yiling;
the vesting conditions in respect of any share
ZHANG
incentives granted by the Company and the
Lihua
implementation of the Company’s remedial
measures for diluted earnings.
Luxshare Limited, as the controlling shareholder of
the Company, and WANG Laichun and WANG
Laisheng, as the actual controllers of the Company,
hereby make commitments 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.
Commitments Luxshare
relating to any Limited; 2. I, WANG Laichun, as the actual controller,
initial public WANG Other Chairman and General Manager of the Company, March 11,
undertake to perform my duties in accordance with Long-term Ongoing
offering or Laichun; commitments 2016
subsequent WANG the applicable laws and regulations and the articles
fund raising Laisheng 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.
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
99
Luxshare Precision Industry Co., Ltd. Annual Report 2022
my powers, or infringe on the interest of the
Company.
The commitments relating to horizontal competition,
related-party transactions and occupation of funds
are as follows: 1. We and other entities controlled by
us will reduce related-party transactions with the
Company to the maximum extent practicable. 2.
With respect to any related-party transaction
between us or any other entity controlled by us and
the Company that is unavoidable or exists
reasonably, we will carry out such transaction on an
Commitments
arm’s length basis and customary commercial terms,
relating to
Commitments ensure the fairness of the transaction price, perform
horizontal
relating to any the relevant decision-making process according to
competition,
initial public Luxshare the law, and guarantee that the legitimate rights and October
related-party Long-term Ongoing
offering or Limited interests of the Company and its shareholders will 15, 2014
transactions
subsequent not be damaged as a result of such transaction. 3. We
and
fund raising or any other entity controlled by us will not request
occupation of
the Company to offer any terms more favorable than
funds
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. For so long as we
remain the controlling shareholder of Luxshare-ICT,
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 and occupation of funds
are as follows: 1. We and all other entities controlled
by us at present or in the future will not, directly or
indirectly, engage in any business or activity that
competes, might compete or potentially competes
with the main business of the Company. 2. If any
Commitments
amendment of any applicable law or change in any
relating to
Commitments applicable policy of the country results in any actual
horizontal
relating to any or potential horizontal competition between us or
competition,
initial public Luxshare any other entity controlled by us and the Company October
related-party Long-term Ongoing
offering or Limited in any business, the Company shall have the 15, 2014
transactions
subsequent preemptive right on the same terms in respect of any
and
fund raising entrusted management (or management under
occupation of
contract or lease) or acquisition in connection with
funds
such business. 3. For so long as we remain the
controlling shareholder of Luxshare-ICT, 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.
Luxshare Commitments The commitments relating to horizontal competition,
Commitments
Limited; relating to related-party transactions and occupation of funds
relating to any
Shenzhen horizontal are as follows: we/I will not take advantage of
initial public July 30,
Zixin competition, our/my position as the controlling shareholder, Long-term Ongoing
offering or 2010
Investment related-party actual controller or shareholder (as applicable) and
subsequent
Co., Ltd.; transactions our/my affiliation with the Issuer to engage in any
fund raising
WANG and act to the detriment of the interest of the Issuer or its
100
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Laichun; occupation of other shareholders. With respect to any related-party
WANG funds transaction between us/me or any other entity
Laisheng controlled by us/me and the Issuer, we/I will carry
out such transaction on an arm’s length basis and
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 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.
The commitments relating to horizontal competition,
related-party transactions and occupation of funds
are as follows: We are not engaged in any business
that is the same as or similar to the business of the
Issuer or any entity controlled by the Issuer. For 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
Commitments country, and will not, directly or indirectly, engage
relating to in any business that is the same as, similar to or
Commitments Luxshare
horizontal substantially in competition with the business of the
relating to any Limited;
competition, Issuer or any entity controlled by the Issuer, or have
initial public Shenzhen July 30,
related-party substantial or relative control over any other Long-term Ongoing
offering or Zixin 2010
transactions company, organization or economic entity engaging
subsequent Investment
and in any business that is the same as, similar to or
fund raising Co., Ltd.
occupation of substantially in competition with the business of the
funds 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 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: I and other entities controlled by me
are not engaged in any business that is the same as
Commitments
or similar to the business of the Issuer or any entity
relating to
Commitments controlled by the Issuer. For so long as I retain
horizontal
relating to any WANG control over the Issuer directly or indirectly, I will
competition,
initial public Laichun; strictly comply with the applicable laws, regulations July 30,
related-party Long-term Ongoing
offering or WANG and codes of the country, and will not, directly or 2010
transactions
subsequent Laisheng indirectly, engage in any business that is the same as,
and
fund raising similar to or substantially in competition with the
occupation of
business of the Issuer or any entity controlled by the
funds
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
101
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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.
(1) For this shareholding increase plan and
subsequent share management, I will not conduct
insider trading or short term trading, or purchase or
sell shares during the sensitive period in strict
Commitments
accordance with the relevant provisions of
Other WANG on April 11, October
applicable laws, regulations and normative Fulfilled
commitments Laisheng Shareholding 2022 11, 2022
documents. (2) I will not reduce shares of the
Increase
Company during the period of the shareholding
increase and within the statutory period, and will
complete this shareholding increase plan during the
aforesaid period of implementation.
Luxshare Limited, as the controlling shareholder of
the Company, hereby undertakes not to sell any
Other Luxshare Other February February
share of the Company through the stock trading Fulfilled
commitments Limited commitments 3, 2021 2, 2022
system within 12 months after the completion of this
disposal.
Whether the
commitments
have been Yes
fulfilled on
time?
If any
commitment is
overdue,
explain
specific
reasons for the N/A
incomplete
performance
and detailed
plan of next
steps
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
102
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
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
Refer to “Section X Financial Report” - “VIII. Changes in scope of consolidation”.
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) 234.6
Consecutive years in which the domestic accounting firm has
15
provided auditing service
Certified public accountant of the domestic accounting firm LI Jing and Danjie
Consecutive years in which the certified public accountant of the
4
domestic accounting firm has provided auditing service
Whether a new accounting firm was engaged during the reporting period?
103
Luxshare Precision Industry Co., Ltd. Annual Report 2022
□ Yes No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor:
Applicable □N/A
We engaged BDO China Shu Lun Pan Certified Public Accountants LLP as our internal control auditor.
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 mediation or
Already
during the reporting 232.99 No Closed judgment, and N/A
enforced
period (arbitration) does not have a
material effect on
us.
The case is
Other litigation pending, and will
during the reporting 7,804.4 No Pending not have a Pending N/A
period (arbitration) 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.
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.
104
Luxshare Precision Industry Co., Ltd. Annual Report 2022
XIV. Material related-party transactions
1. Related-party transactions relating to day-to-day operation
Applicable □ N/A
% of
Market
the total Approved Whether
Relate price Informati
Pricin Amount amount limit of or not
d-part Transa available Date of on
Counterp Relatio g (in of the transaction exceed Method of
Type y ction for the disclosu disclosure
arty nship princi RMB0’0 same amount (in the settlement
transac price same type re available
ple 00) type of RMB0’00 approve
tions of at
transact 0) d limit
transactions
ions
Purchas
e of
Related Purcha Marke Fair August Announce
BCS goods Bank Fair market
legal sing t-set market 2,344.12 0.02% 5,000 No 26, ment No.:
Suzhou from transfer price
person goods prices price 2022 2022-071
related
party
Purchas
e of
Related Purcha Marke Fair August Announce
Luxsan goods 31,117.6 Bank Fair market
legal sing t-set market 0.21% 35,000 No 26, ment No.:
Kunshan from 2 transfer price
person goods prices price 2022 2022-071
related
party
Purchas
e of
Luxsan Related Purcha Marke Fair August Announce
goods 103,789. Bank Fair market
Hong legal sing t-set market 0.72% 105,000 No 26, ment No.:
from 98 transfer price
Kong person goods prices price 2022 2022-071
related
party
Sales of
Related goods Sales Marke Fair Februar Announce
BCS Bank Fair market
legal to of t-set market 39,438 0.26% 40,000 No y 22, ment No.:
Suzhou transfer price
person related goods prices price 2022 2022-012
persons
Sales of
Related goods Sales Marke Fair Februar Announce
Luxsan 64,361.9 Bank Fair market
legal to of t-set market 0.42% 65,000 No y 22, ment No.:
Kunshan 5 transfer price
person related goods prices price 2022 2022-012
persons
Sales of
Gaowei Related goods Sales Marke Fair April Announce
11,792.6 Bank Fair market
Hong legal to of t-set market 0.08% 12,000 No 28, ment No.:
4 transfer price
Kong person related goods prices price 2022 2022-040
persons
252,844.
Total -- -- -- 262,000 -- -- -- -- --
31
105
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Particulars of huge-amount sales returns N/A
If the total amount of daily related-party When expecting the annual daily related party transactions, the Company conducts the appraisal and calculation of possible
transactions that are expected to occur related party transactions according to the market situation, but the actually accrued amount is determined based on market
during the reporting period is estimated by situation, the two parties’ business development, actual demands and specific implementation progress, resulting in certain
type, the actual transactions occurred differences between actually accrued amount and expected amount. The foregoing belongs to the acts of normal business and
during the reporting period (if any) will not have a significant impact on daily operation and performance of the Company.
Reason of any great difference between
transaction price and reference market N/A
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.
7. Other significant related-party transactions
□ Applicable N/A
We have not conducted any other material related-party transaction during the reporting period.
106
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
Amount of
date of Actual date Actual Counter Whether or not
Guarantee guaranteed Type of Collateral Term of Fully
quota of guarantee guarantee (if provided for a
party quota guarantee (if any) guarantee executed?
announce occurrence amount any) related party
approved
ment
Guarantees provided by the Company for its subsidiaries
Disclosure
Amount of
date of Actual date Actual Counter Whether or not
Guarantee guaranteed Type of Collateral Term of Fully
quota of guarantee guarantee (if provided for a
party quota guarantee (if any) guarantee executed?
announce occurrence amount any) related party
approved
ment
Joint and
LUXSHARE April 20, July 20,
557,168 69,646 several Five years No Yes
PRECISION 2020 2020
guarantee
Joint and
LUXSHARE April 20, July 28,
68,949.54 0 several Five years No Yes
PRECISION 2021 2021
guarantee
107
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Total amount of guarantee Total actual amount of
approved to be provided for guarantees for
69,646
subsidiaries during the subsidiaries within the
reporting period (B1) reporting period (B2)
Total amount of guarantee Total actual guarantee
approved to be provided for balance for subsidiaries
626,117.54 69,646
subsidiaries as at the end of at the end of the
the reporting period (B3) reporting period (B4)
Guarantees provided by subsidiaries for each other
Disclosure
Amount of
date of Actual date Actual Counter Whether or not
Guarantee guaranteed Type of Collateral Term of Fully
quota of guarantee guarantee (if provided for a
party quota guarantee (if any) guarantee executed?
announce occurrence amount any) related party
approved
ment
TIME Six months
Interconnect Joint and from the
June 21,
Server 69.65 69.65 several expiration No Yes
2022
Technology guarantee date of
Co., Ltd. main debts
Linkz
International
Limited and Joint and
September Continuing
TIME 8,932.7 60.17 several No Yes
4, 2020 Security
Interconnect guarantee
Industrial Co.,
Ltd.
Linkz Joint and
December Continuing
International 5,806.26 0 several No Yes
14, 2020 Security
Limited guarantee
TIME
Joint and
Interconnect June 27, Continuing
3,126.45 0 several No Yes
Industrial Co., 2017 Security
guarantee
Ltd.
Linkz
International
Limited and Joint and
June 25, Continuing
TIME 2,679.81 0 several No Yes
2021 Security
Interconnect guarantee
Industrial Co.,
Ltd.
108
Luxshare Precision Industry Co., Ltd. Annual Report 2022
TIME
Joint and
Interconnect June 25, Continuing
2,704.46 0 several No Yes
Industrial Co., 2021 Security
guarantee
Ltd.
Linkz
International
Limited and Joint and
January Continuing
TIME 7,146.16 0 several No Yes
28, 2021 Security
Interconnect guarantee
Industrial Co.,
Ltd.
Linkz
International
Limited and Joint and
April 1, Continuing
TIME 5,627.6 0 several No Yes
2021 Security
Interconnect guarantee
Industrial Co.,
Ltd.
Linkz
International
Limited and Joint and
January Continuing
TIME 5,359.62 0 several No Yes
13, 2022 Security
Interconnect guarantee
Industrial Co.,
Ltd.
Linkz
International
Limited and Joint and
October 9, Continuing
TIME 7,146.16 951.19 several No Yes
2020 Security
Interconnect guarantee
Industrial Co.,
Ltd.
Linkz
International
Limited and Joint and
September Continuing
TIME 803.94 0 several No Yes
27, 2021 Security
Interconnect guarantee
Industrial Co.,
Ltd.
109
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Linkz
International
Limited and Joint and
September Continuing
TIME 1,253.63 0 several No Yes
27, 2021 Security
Interconnect guarantee
Industrial Co.,
Ltd.
TIME
Joint and
Interconnect November Continuing
6,252.89 3,796.4 several No Yes
Technology 15, 2021 Security
guarantee
Limited
TIME
Joint and
Interconnect October 2, Continuing
7,146.16 0 several No Yes
Industrial Co., 2019 Security
guarantee
Ltd.
TIME
Interconnect Joint and
April 27, Continuing
Technology 5,000 3,246.91 several No Yes
2020 Security
(Huizhou) guarantee
Limited
TIME
Interconnect Joint and
January 1, December
Technology 6,000 4,727.54 several No Yes
2018 31, 2023
(Huizhou) guarantee
Limited
TIME
Interconnect Joint and
January January 23,
Technology 10,800 2,450 several No Yes
24, 2022 2025
(Huizhou) guarantee
Limited
Three years
TIME
after
Interconnect Joint and
June 1, expiration
Technology 10,000 4,800 several No Yes
2022 of the debt
(Huizhou) guarantee
performanc
Limited
e period
Huaxun
Joint and
Industrial July 1, June 30,
5,000 2,010.33 several No Yes
(Suzhou) Co., 2021 2024
guarantee
Ltd.
110
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Huaxun
Joint and
Industrial August 4, August 3,
10,000 4,955.02 several No Yes
(Suzhou) Co., 2021 2026
guarantee
Ltd.
Three years
Huaxun after
Joint and
Industrial November expiration
4,000 763.54 several
(Suzhou) Co., 10, 2021 of the debt
guarantee
Ltd. performanc
e period
Three years
Huaxun after
Joint and
Industrial January expiration
11,000 10,025.42 several No Yes
(Suzhou) Co., 12, 2022 of the debt
guarantee
Ltd. performanc
e period
Huaxun
Joint and
Industrial April 6, April 5,
3,000 2,998.67 several No Yes
(Suzhou) Co., 2022 2025
guarantee
Ltd.
Huaxun
Joint and
Industrial June 1, June 1,
5,500 4,531.71 several No Yes
(Suzhou) Co., 2022 2025
guarantee
Ltd.
Three years
Huaxun after
Joint and
Industrial July 20, expiration
8,000 3,394.02 several No Yes
(Suzhou) Co., 2022 of the debt
guarantee
Ltd. performanc
e period
111
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Linkz
International
Limited,
TIME
Interconnect
Industrial Co.,
Ltd., TIME
Joint and
Interconnect September Continuing
15,185.59 3,573.08 several No Yes
Wiring 5, 2022 Security
guarantee
Technology
Co., Ltd. and
TIME
Interconnect
Server
Technology
Co., Ltd.
Total guarantee quota Total actual amount of
approved for subsidiaries guarantees for
31,842.55
within the reporting period subsidiaries within the
(C1) reporting period (C2)
Total guarantee quota Total actual guarantee
approved for the subsidiaries balance for subsidiaries
157,541.07 52,353.64
at the end of the reporting at the end of the
period (C3) reporting period (C4)
Total amount of guarantee provided by the Company (the sum of the above three items)
Total amount of guarantee Total actual amount of
approved during the guarantees within the
101,488.55
reporting period reporting period (i.e.
(A1+B1+C1) A2+B2+C2)
Total amount of guarantee Total actual guarantee
approved as at the end of the balance at the end of the
783,658.61 121,999.64
reporting period reporting period
(A3+B3+C3) (A4+B4+C4)
Ratio of total amount of guarantee actually provided
2.69%
(A4+B4+C4) to the net assets of the Company
Among which,
Amount of guarantee for shareholders, de facto controller
0
and their related parties (D)
Amount of debt guarantee provided for guaranteed party
whose asset-liability ratio is not less than 70% directly or 69,646
indirectly (E)
Amount of total guarantee over 50% of net assets (F) 0
112
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Total amount guaranteed (D+E+F) 69,646
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
Outstanding Overdue
Type Source of funds Total amount overdue uncollected wealth
amount amount
management products
Bank wealth 132,622.69 132,622.69 0 0
Self-owned funds
management amount
Total 132,622.69 132,622.69 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:
□ 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
3,759,422 Self-owned funds 3,759,422 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.
113
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
114
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Section VII Changes in shares and shareholders
I. Changes in shares
1. Changes in shares
Unit: Share
Before the change ＋,－ After the change
New shares Stock Shares converted from
Number Proportion Other Subtotal Number Proportion
issued dividend capital reserve
I. Non-tradable shares 6,152,646 0.09% 5,026,239 5,026,239 11,178,885 0.16%
1. Shares held by the State
2. Shares held by State-owned corporations
3. Shares held by other domestic investors 96,022 0.00% 831,461 831,461 927,483 0.01%
Incl.: Shares held by domestic
non-State-owned corporations
Shares held by domestic natural persons 96,022 0.00% 831,461 831,461 927,483 0.01%
4. Shares held by foreign investors 6,056,624 0.09% 4,194,778 4,194,778 10,251,402 0.15%
Incl.: Shares held by foreign corporations
Shares held by foreign natural persons 6,056,624 0.09% 4,194,778 4,194,778 10,251,402 0.15%
II. Tradable shares 7,065,170,118 99.91% 39,135,005 39,135,005 7,104,305,123 99.84%
1. RMB-denominated ordinary shares 7,065,170,118 99.91% 39,135,005 39,135,005 7,104,305,123 99.84%
2. Foreign currency-denominated shares listed
domestically
3. Foreign currency-denominated shares listed
overseas
4. Others
III. Total shares 7,071,322,764 100.00% 44,161,244 44,161,244 7,115,484,008 100.00%
Reasons of changes in shares:
Applicable □ N/A
1. During the reporting period, the Company issued 44,157,507 shares to the grantees under the stock option incentive plan
exercising their options at their sole discretion, the details of which are shown in “Section IV” - “XI. Implementation of share
incentive plans, employee stock ownership plans and other employee incentives granted by the Company”.
2. The Company publicly offered 30 million 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 3,737.
Approval of changes in shares:
Applicable □ N/A
1. Deliberation and approval by the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of
Supervisors of the Company on July 2, 2021.
2. Deliberation and approval by the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board of
115
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Supervisors of the Company on December 3, 2021.
3. Deliberation and approval by the 7th meeting of the fifth Board of Directors and the 7th meeting of the fifth Board of
Supervisors of the Company on February 21, 2022.
4. Deliberation and approval by the 9th meeting of the fifth Board of Directors and the 9th meeting of the fifth Board of
Supervisors of the Company on July 4, 2022.
5. Deliberation and approval by the 14th meeting of the fifth Board of Directors and the 14th meeting of the fifth Board of
Supervisors of the Company on December 5, 2022.
Transfer of share ownership:
Applicable □ N/A
1. Period in which the stock options vested in the second vesting period of the initial grant under the 2019 stock option incentive
plan may be exercised by the relevant grantees: From July 15, 2021 to April 21, 2022.
2. 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: From December 24, 2021 to September 23, 2022.
3. Period in which the stock options vested in the second vesting period in reserved grant under the 2019 stock option incentive
plan may be exercised by the relevant grantees: From March 3, 2022 to November 25, 2022.
4. Period in which the stock options vested in the third vesting period in initial grant under the 2019 stock option incentive plan
may be exercised by the relevant grantees: From July 22, 2022 to April 21, 2023.
5. Period in which the stock options vested in the fourth vesting period under the 2018 stock option incentive plan may be
exercised by the relevant grantees: From December 13, 2022 to September 22, 2023.
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 shares non-tradable shares
Shareholder non-tradable shares as non-tradable shares as Reason for restriction Unlock date
unlocked in the increased in the
at January 1, 2020 at December 31, 2020
reporting period reporting period
The restricted
conditions are
Lock-up shares for released according to
WNAG Tao 96,022 0 451,219 547,241
senior officers the requirements on
the lock-up shares for
senior officers
The restricted
conditions are
Lock-up shares for released according to
WANG Laisheng 5,227,700 0 3,966,257 9,193,957
senior officers the requirements on
the lock-up shares for
senior officers
The restricted
conditions are
Lock-up shares for released according to
LI Wei 0 0 380,242 380,242
senior officers the requirements on
the lock-up shares for
senior officers
The restricted
conditions are
Lock-up shares for released according to
HUANG Dawei 329,542 0 164,771 494,313
senior officers the requirements on
the lock-up shares for
senior officers
116
Luxshare Precision Industry Co., Ltd. Annual Report 2022
The restricted
conditions are
Lock-up shares for released according to
WU Tiansong 499,382 0 63,750 563,132
senior officers the requirements on
the lock-up shares for
senior officers
Total 6,152,646 0 5,026,239 11,178,885 -- --
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 2nd meeting of the fifth Board of Directors, the 6th meeting of the fifth Board of Directors,
the 6th meeting of the fifth Board of Directors, the 7th meeting of the fifth Board of Directors, the 9th meeting of the fifth Board of
Directors, and the 14th meeting of the fifth Board of Directors of the Company, the vesting conditions for the second vesting period
in initial grant under 2019 stock option incentive plan, the third vesting period under 2018 stock option incentive plan, the second
vesting period in reserved grant under 2019 stock option incentive plan, the third vesting period in initial grant under 2019 stock
option incentive plan, and the fourth 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 44,157,507
shares were issued to the grantees exercising options at their sole discretion during the reporting period.
2. The Company publicly offered 30 million 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 3,737.
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
Total ordinary preferred
Total number of Total number of preferred
shareholders as of shareholders with
ordinary stockholders with voting rights
the end of the voting rights
shareholders at the 291,302 340,682 0 restored at the end of last month 0
month prior to the restored at the end
end of the reporting before the disclosure date of the
disclosure date of of the reporting
period annual report (if any) (see note 8)
annual report period (if any) (see
note 8)
Shareholders holding more than 5% of shares or shares of the top 10 shareholders
Number of Increase or No. of Pledge, mark or freeze
Name of Type of Shareholding shares held at decrease of shares Number of restricted non-tradabl
shareholders shareholder percentage the end of the within the shares held e ordinary Status of shares Qty
reporting period reporting period shares held
Foreign legal 2,731,537,6
Luxshare Limited 38.39% 2,731,537,636 Pledged 1,076,610,000
person 36
Hong Kong Foreign legal 7.90% 561,802,268 -32033496 561,802,26
117
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Securities Clearing person 8
Company Limited
China Securities Domestic
Finance non-stated
1.19% 84,428,888 84,428,888
Corporation owned
Limited corporation
Central Huijin Stated owned
0.82% 58,041,012 58,041,012
Investment Ltd. corporation
China Merchants
Bank Co., Ltd. - Domestic
Ruiyuan Growth non-stated
0.68% 48,141,116 -5157183 48,141,116
Value Hybrid owned
Securities corporation
Investment Fund
Domestic
Pegatron
non-stated
Technology 0.56% 39,845,105 39,845,105
owned
(Shanghai) Co Ltd
corporation
E Fund -
Agricultural Bank Domestic
of China - E Fund non-stated
0.54% 38,656,343 38,656,343
Zhongzheng owned
Financial Asset corporation
Management Plan
China AMC-
Agricultural Bank Domestic
of China - China non-stated
0.54% 38,576,831 38,576,831
AMC Zhongzheng owned
Financial Asset corporation
Management Plan
Zhong Ou Fund -
Agricultural Bank Domestic
of China - Zhong non-stated
0.54% 38,557,184 38,557,184
Ou Zhongzheng owned
Financial Asset corporation
Management Plan
Yinhua Fund -
Agricultural Bank Domestic
of China - Yinhua non-stated
0.54% 38,508,814 38,508,814
Zhongzheng owned
Financial Asset corporation
Management Plan
Strategic investor or general legal person
becomes the top 10 shareholders due to
N/A
the placement of new shares (if any) (See
Note 3)
Affiliates or concert parties among the 1. Luxshare Limited is the controlling shareholder of the Company;
shareholders listed above 2. The Company is not aware of whether there are affiliates or persons acting in concert among the shareholders listed above.
Delegation or waiver of voting rights or
ownership of voting rights as a proxy in N/A
respect of the shareholders listed above
Description (if any) of special repurchase
shareholders among top 10 shareholders N/A
(refer to Note 10)
Shareholdings of top 10 unrestricted shareholders
Type
Name of shareholders Number of unrestricted shares held at the end of the reporting period
Type Qty
RMB ordinary
Luxshare Limited 2,731,537,636 2,731,537,636
shares
Hong Kong Securities Clearing Company RMB ordinary
561,802,268 561,802,268
Limited shares
China Securities Finance Corporation RMB ordinary
84,428,888 84,428,888
Limited shares
RMB ordinary
Central Huijin Investment Ltd. 58,041,012 58,041,012
shares
China Merchants Bank Co., Ltd. -
RMB ordinary
Ruiyuan Growth Value Hybrid Securities 48,141,116 48,141,116
shares
Investment Fund
RMB ordinary
Pegatron Technology (Shanghai) Co Ltd 39,845,105 39,845,105
shares
E Fund - Agricultural Bank of China - E
RMB ordinary
Fund Zhongzheng Financial Asset 38,656,343 38,656,343
shares
Management Plan
China AMC- Agricultural Bank of China
RMB ordinary
- China AMC Zhongzheng Financial 38,576,831 38,576,831
shares
Asset Management Plan
Zhong Ou Fund - Agricultural Bank of
RMB ordinary
China - Zhong Ou Zhongzheng Financial 38,557,184 38,557,184
shares
Asset Management Plan
Yinhua Fund - Agricultural Bank of
RMB ordinary
China - Yinhua Zhongzheng Financial 38,508,814 38,508,814
shares
Asset Management Plan
Affiliates or concert parties among top 10
N/A
holders of tradable ordinary shares, and
118
Luxshare Precision Industry Co., Ltd. Annual Report 2022
among top 10 holders of tradable 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
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 is the Chairman of the Board of Directors & General Manager of the
Company. In 1999, Ms. WANG Laichun and Mr. WANG Laisheng jointly purchased the
shares of Luxshare Limited. In 2004, she founded Luxshare Precision Industry (Shenzhen)
Main occupations and titles Co., Ltd. (now known as “Luxshare Precision Industry Co., Ltd.”) through Luxshare Limited
and acted as its Chairman of the Board of Directors.
Mr. WANG Laisheng serves as the Vice Chairman of the Board of Directors of the Company.
Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the shares of Luxshare
119
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Limited in 1999, and in 2004, Mr. WANG Laisheng and Ms. WANG Laisheng jointly
established founded Luxshare Precision Industry (Shenzhen) Co., Ltd. (now known as
“Luxshare Precision Industry 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 Laichun WANG Laisheng
Luxshare Limited
Luxshare-ICT
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
120
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Progress of sales of repurchased shares through call auction:
□ Applicable N/A
121
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Section VIII Preference Shares
□ Applicable N/A
We did not have any preferred share during the reporting period.
122
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 and
Bond Bond Maturity Bond Interest Trading
abbreviati Issue date Start date interest
name code date balance rate venue
on payment
method
Phase I
ultra-shor A lump
t-term sum
financing 22 payment
Interbank
bonds in Luxshare- 01228162 April 24, April 26, October 800,000, of
2.62% bond
2022 of ICT 5 2022 2022 21, 2022 000.00 principal
market
Luxshare SCP001 and
Precision interest at
Industry maturity
Co., Ltd.
Phase II
ultra-shor A lump
t-term sum
financing 22 payment
Interbank
bonds in Luxshare- 01228192 May 25, May 26, November 500,000, of
2.2% bond
2022 of ICT 2 2022 2022 22, 2022 000.00 principal
market
Luxshare SCP002 and
Precision interest at
Industry maturity
Co., Ltd.
Phase III 22 01228197 May 30, May 31, November 500,000, 2.15% A lump Interbank
123
Luxshare Precision Industry Co., Ltd. Annual Report 2022
ultra-shor Luxshare- 4 2022 2022 25, 2022 000.00 sum bond
t-term ICT payment market
financing SCP003 of
bonds in principal
2022 of and
Luxshare interest at
Precision maturity
Industry
Co., Ltd.
Phase IV
ultra-shor
t-term
A lump
financing 22
sum
bonds in Luxshare-
payment
2022 of ICT Interbank
01228215 June 15, June 17, May 14, 1,000,00 of
Luxshare SCP004 2.4% bond
2 2022 2022 2023 0,000.00 principal
Precision (STAR market
and
Industry Market
interest at
Co., Ltd. Notes)
maturity
(STAR
Market
Notes)
Phase V
ultra-shor
t-term
A lump
financing 22
sum
bonds in Luxshare-
payment
2022 of ICT Interbank
01228224 June 23, June 24, December 1,000,00 of
Luxshare SCP005 2.15% bond
6 2022 2022 21, 2022 0,000.00 principal
Precision (STAR market
and
Industry Market
interest at
Co., Ltd. Notes)
maturity
(STAR
Market
Notes)
Phase VI
ultra-shor A lump
t-term sum
financing 22 payment
Interbank
bonds in Luxshare- 01228249 July 14, July 15, April 11, 1,200,00 of
2.2% bond
2022 of ICT 1 2022 2022 2023 0,000.00 principal
market
Luxshare SCP006 and
Precision interest at
Industry maturity
Co., Ltd.
Phase VII
ultra-shor
A lump
t-term 22
sum
financing Luxshare-
payment
bonds in ICT Interbank
01228258 July 21, July 22, April 18, 800,000, of
2022 of SCP007 2.15% bond
5 2022 2022 2023 000.00 principal
Luxshare (STAR market
and
Precision Market
interest at
Industry Notes)
maturity
Co., Ltd.
(STAR
124
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Market
Notes)
Phase
VIII
A lump
ultra-shor
sum
t-term
22 payment
financing Interbank
Luxshare- 01228267 July 28, July 29, April 25, 800,000, of
bonds in 2.15% bond
ICT 4 2022 2022 2023 000.00 principal
2022 of market
SCP008 and
Luxshare
interest at
Precision
maturity
Industry
Co., Ltd.
Investors’ appropriate arrangements Institutional investors on the national interbank bond market (except for purchasers
(if 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
Name of bond Name of Contact person of
Office address accountants Phone
project intermediary Intermediary
signing this report
Phase I
ultra-short-term
financing bonds in China Merchants No. 2016 Shennan
None LUO Yingying 0755-88026159
2022 of Luxshare Bank Co., Ltd. Avenue, Shenzhen
Precision Industry
Co., Ltd.
Phase I
ultra-short-term
22 Jianguomennei
financing bonds in Huaxia Bank Co.,
Street, Dongcheng None LI Bailu 010-85237515
2022 of Luxshare Ltd.
District, Beijing
Precision Industry
Co., Ltd.
Phase I 20/F, Tower 3, Jiali
ultra-short-term Construction
Beijing Han Kun
financing bonds in Square, the 4th
(Shenzhen) Law None TONG Linwen 0755-36806500
2022 of Luxshare Central Road No.
Firm
Precision Industry 1, Futian District,
Co., Ltd. Shenzhen
Phase I BDO China Shu 10/F, Building 7,
LI Jing and ZHEN
ultra-short-term Lun Pan Certified Courtyard 16, ZHU Jiandi 010-88210608
Zhijie
financing bonds in Public Middle Road of
125
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2022 of Luxshare Accountants LLP West 4th Ring,
Precision Industry Haidian District,
Co., Ltd. Beijing
1101, 1102 and
Phase I
1103 Units, 11/F,
ultra-short-term Golden Credit
South Block,
financing bonds in Rating
Building 1, None XING Dong 010-62299850
2022 of Luxshare International Co.,
Chaowai West
Precision Industry Ltd.
Street, Chaoyang
Co., Ltd.
District, Beijing
Phase II
ultra-short-term 218 Haihe East
financing bonds in China Bohai Bank Road, Hedong
None HUANG Guihong 0755-36991314
2022 of Luxshare Co., Ltd. District, Tianjin,
Precision Industry China
Co., Ltd.
Phase II 20/F, Tower 3, Jiali
ultra-short-term Construction
Beijing Han Kun
financing bonds in Square, the 4th
(Shenzhen) Law None TONG Linwen 0755-36806500
2022 of Luxshare Central Road No.
Firm
Precision Industry 1, Futian District,
Co., Ltd. Shenzhen
Phase II 10/F, Building 7,
ultra-short-term BDO China Shu Courtyard 16,
financing bonds in Lun Pan Certified Middle Road of LI Jing and ZHEN
ZHU Jiandi 010-88210608
2022 of Luxshare Public West 4th Ring, Zhijie
Precision Industry Accountants LLP Haidian District,
Co., Ltd. Beijing
1101, 1102 and
Phase II
1103 Units, 11/F,
ultra-short-term Golden Credit
South Block,
financing bonds in Rating
Building 1, None XING Dong 010-62299850
2022 of Luxshare International Co.,
Chaowai West
Precision Industry Ltd.
Street, Chaoyang
Co., Ltd.
District, Beijing
Phase II 33-34/F, Oriental
ultra-short-term International
Interbank Market
financing bonds in Financial Plaza,
Clearing House None XIE Zhong 021-63326662
2022 of Luxshare 318 Zhongshan
Co., Ltd.
Precision Industry South Road,
Co., Ltd. Shanghai
Phase III
ultra-short-term
168 Yincheng
financing bonds in Bank of Shanghai
Middle Road, None DU Zhong 021-68476774
2022 of Luxshare Co., Ltd.
Shanghai
Precision Industry
Co., Ltd.
Phase III 20/F, Tower 3, Jiali
ultra-short-term Construction
Beijing Han Kun
financing bonds in Square, the 4th
(Shenzhen) Law None TANG Jianghua 0755-36806500
2022 of Luxshare Central Road No.
Firm
Precision Industry 1, Futian District,
Co., Ltd. Shenzhen
Phase III BDO China Shu 10/F, Building 7, LI Jing and ZHEN ZHU Jiandi 010-88210608
126
Luxshare Precision Industry Co., Ltd. Annual Report 2022
ultra-short-term Lun Pan Certified Courtyard 16, Zhijie
financing bonds in Public Middle Road of
2022 of Luxshare Accountants LLP West 4th Ring,
Precision Industry Haidian District,
Co., Ltd. Beijing
1101, 1102 and
Phase III
1103 Units, 11/F,
ultra-short-term Golden Credit
South Block,
financing bonds in Rating
Building 1, None XING Dong 010-62299850
2022 of Luxshare International Co.,
Chaowai West
Precision Industry Ltd.
Street, Chaoyang
Co., Ltd.
District, Beijing
Phase III 33-34/F, Oriental
ultra-short-term International
Interbank Market
financing bonds in Financial Plaza,
Clearing House None XIE Zhong 021-63326662
2022 of Luxshare 318 Zhongshan
Co., Ltd.
Precision Industry South Road,
Co., Ltd. Shanghai
Phase IV
ultra-short-term
financing bonds in 22 Jianguomennei
Huaxia Bank Co.,
2022 of Luxshare Street, Dongcheng None LI Bailu 010-85237515
Ltd.
Precision Industry District, Beijing
Co., Ltd. (STAR
Market Notes)
Phase IV
ultra-short-term
financing bonds in 168 Yincheng
Bank of Shanghai
2022 of Luxshare Middle Road, None SHI Yuzhou 021-68476774
Co., Ltd.
Precision Industry Shanghai
Co., Ltd. (STAR
Market Notes)
Phase IV
20/F, Tower 3, Jiali
ultra-short-term
Construction
financing bonds in Beijing Han Kun
Square, the 4th
2022 of Luxshare (Shenzhen) Law None TONG Linwen 0755-36806500
Central Road No.
Precision Industry Firm
1, Futian District,
Co., Ltd. (STAR
Shenzhen
Market Notes)
Phase IV
10/F, Building 7,
ultra-short-term
BDO China Shu Courtyard 16,
financing bonds in
Lun Pan Certified Middle Road of LI Jing and ZHEN
2022 of Luxshare ZHU Jiandi 010-88210608
Public West 4th Ring, Zhijie
Precision Industry
Accountants LLP Haidian District,
Co., Ltd. (STAR
Beijing
Market Notes)
Phase IV 1101, 1102 and
ultra-short-term 1103 Units, 11/F,
Golden Credit
financing bonds in South Block,
Rating
2022 of Luxshare Building 1, None XING Dong 010-62299850
International Co.,
Precision Industry Chaowai West
Ltd.
Co., Ltd. (STAR Street, Chaoyang
Market Notes) District, Beijing
Phase IV Interbank Market 33-34/F, Oriental
None XIE Zhong 021-63326662
ultra-short-term Clearing House International
127
Luxshare Precision Industry Co., Ltd. Annual Report 2022
financing bonds in Co., Ltd. Financial Plaza,
2022 of Luxshare 318 Zhongshan
Precision Industry South Road,
Co., Ltd. (STAR Shanghai
Market Notes)
Phase V
ultra-short-term
financing bonds in 168 Yincheng
Bank of Shanghai
2022 of Luxshare Middle Road, None DU Zhong 021-68476774
Co., Ltd.
Precision Industry Shanghai
Co., Ltd. (STAR
Market Notes)
Phase V
ultra-short-term
China Merchants
financing bonds in
China Merchants Bank Building,
2022 of Luxshare None LUO Yingying 0755-88026159
Bank Co., Ltd. No. 7088 Houhai
Precision Industry
Avenue, Shenzhen
Co., Ltd. (STAR
Market Notes)
Phase V
20/F, Tower 3, Jiali
ultra-short-term
Construction
financing bonds in Beijing Han Kun
Square, the 4th
2022 of Luxshare (Shenzhen) Law None TONG Linwen 0755-36806500
Central Road No.
Precision Industry Firm
1, Futian District,
Co., Ltd. (STAR
Shenzhen
Market Notes)
Phase V
10/F, Building 7,
ultra-short-term
BDO China Shu Courtyard 16,
financing bonds in
Lun Pan Certified Middle Road of LI Jing and ZHEN
2022 of Luxshare ZHU Jiandi 010-88210608
Public West 4th Ring, Zhijie
Precision Industry
Accountants LLP Haidian District,
Co., Ltd. (STAR
Beijing
Market Notes)
Phase V 1101, 1102 and
ultra-short-term 1103 Units, 11/F,
Golden Credit
financing bonds in South Block,
Rating
2022 of Luxshare Building 1, None XING Dong 010-62299850
International Co.,
Precision Industry Chaowai West
Ltd.
Co., Ltd. (STAR Street, Chaoyang
Market Notes) District, Beijing
Phase V
33-34/F, Oriental
ultra-short-term
International
financing bonds in Interbank Market
Financial Plaza,
2022 of Luxshare Clearing House None XIE Zhong 021-63326662
318 Zhongshan
Precision Industry Co., Ltd.
South Road,
Co., Ltd. (STAR
Shanghai
Market Notes)
Phase VI
ultra-short-term China Merchants
financing bonds in China Merchants Bank Building,
None LUO Yingying 0755-88026159
2022 of Luxshare Bank Co., Ltd. No. 7088 Houhai
Precision Industry Avenue, Shenzhen
Co., Ltd.
Phase VI Beijing Han Kun 20/F, Tower 3, Jiali
None TONG Linwen 0755-36806500
ultra-short-term (Shenzhen) Law Construction
128
Luxshare Precision Industry Co., Ltd. Annual Report 2022
financing bonds in Firm Square, the 4th
2022 of Luxshare Central Road No.
Precision Industry 1, Futian District,
Co., Ltd. Shenzhen
Phase VI 10/F, Building 7,
ultra-short-term BDO China Shu Courtyard 16,
financing bonds in Lun Pan Certified Middle Road of LI Jing and ZHEN
ZHU Jiandi 010-88210608
2022 of Luxshare Public West 4th Ring, Zhijie
Precision Industry Accountants LLP Haidian District,
Co., Ltd. Beijing
1101, 1102 and
Phase VI
1103 Units, 11/F,
ultra-short-term Golden Credit
South Block,
financing bonds in Rating
Building 1, None XING Dong 010-62299850
2022 of Luxshare International Co.,
Chaowai West
Precision Industry Ltd.
Street, Chaoyang
Co., Ltd.
District, Beijing
Phase VI 33-34/F, Oriental
ultra-short-term International
Interbank Market
financing bonds in Financial Plaza,
Clearing House None XIE Zhong 021-63326662
2022 of Luxshare 318 Zhongshan
Co., Ltd.
Precision Industry South Road,
Co., Ltd. Shanghai
Phase VII
ultra-short-term
financing bonds in 168 Yincheng
Bank of Shanghai
2022 of Luxshare Middle Road, None DU Zhong 021-68476774
Co., Ltd.
Precision Industry Shanghai
Co., Ltd. (STAR
Market Notes)
Phase VII
20/F, Tower 3, Jiali
ultra-short-term
Construction
financing bonds in Beijing Han Kun
Square, the 4th
2022 of Luxshare (Shenzhen) Law None GUO Qilin 0755-36806500
Central Road No.
Precision Industry Firm
1, Futian District,
Co., Ltd. (STAR
Shenzhen
Market Notes)
Phase VII
10/F, Building 7,
ultra-short-term
BDO China Shu Courtyard 16,
financing bonds in
Lun Pan Certified Middle Road of LI Jing and ZHEN
2022 of Luxshare ZHU Jiandi 010-88210608
Public West 4th Ring, Zhijie
Precision Industry
Accountants LLP Haidian District,
Co., Ltd. (STAR
Beijing
Market Notes)
Phase VII 1101, 1102 and
ultra-short-term 1103 Units, 11/F,
Golden Credit
financing bonds in South Block,
Rating
2022 of Luxshare Building 1, None XING Dong 010-62299850
International Co.,
Precision Industry Chaowai West
Ltd.
Co., Ltd. (STAR Street, Chaoyang
Market Notes) District, Beijing
Phase VII 33-34/F, Oriental
Interbank Market
ultra-short-term International
Clearing House None XIE Zhong 021-63326662
financing bonds in Financial Plaza,
Co., Ltd.
2022 of Luxshare 318 Zhongshan
129
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Precision Industry South Road,
Co., Ltd. (STAR Shanghai
Market Notes)
Phase VIII
ultra-short-term China Merchants
financing bonds in China Merchants Bank Building,
None LUO Yingying 0755-88026159
2022 of Luxshare Bank Co., Ltd. No. 7088 Houhai
Precision Industry Avenue, Shenzhen
Co., Ltd.
Phase VIII 20/F, Tower 3, Jiali
ultra-short-term Construction
Beijing Han Kun
financing bonds in Square, the 4th
(Shenzhen) Law None TONG Linwen 0755-36806500
2022 of Luxshare Central Road No.
Firm
Precision Industry 1, Futian District,
Co., Ltd. Shenzhen
Phase VIII 10/F, Building 7,
ultra-short-term BDO China Shu Courtyard 16,
financing bonds in Lun Pan Certified Middle Road of LI Jing and ZHEN
ZHU Jiandi 010-88210608
2022 of Luxshare Public West 4th Ring, Zhijie
Precision Industry Accountants LLP Haidian District,
Co., Ltd. Beijing
1101, 1102 and
Phase VIII
1103 Units, 11/F,
ultra-short-term Golden Credit
South Block,
financing bonds in Rating
Building 1, None XING Dong 010-62299850
2022 of Luxshare International Co.,
Chaowai West
Precision Industry Ltd.
Street, Chaoyang
Co., Ltd.
District, Beijing
Phase VIII 33-34/F, Oriental
ultra-short-term International
Interbank Market
financing bonds in Financial Plaza,
Clearing House None XIE Zhong 021-63326662
2022 of Luxshare 318 Zhongshan
Co., Ltd.
Precision Industry South Road,
Co., Ltd. Shanghai
Did the above-mentioned intermediaries change during the reporting period?
□ Yes No
4. Use of raised funds
In RMB
Rectifications
Comply with
of use of the
Operation of the usage, use
proceeds in
Name of bond special account plan and other
Total proceeds Used amount Unused amount violation of
project for proceeds (if agreements as
laws and
any) promised in the
regulations (if
prospectus?
any)
Phase I
ultra-short-term
financing bonds
800,000,000.00 800,000,000.00 0.00 Normal N/A Yes
in 2022 of
Luxshare
Precision
130
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Industry Co.,
Ltd.
Phase II
ultra-short-term
financing bonds
in 2022 of
500,000,000.00 500,000,000.00 0.00 Normal N/A Yes
Luxshare
Precision
Industry Co.,
Ltd.
Phase III
ultra-short-term
financing bonds
in 2022 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
financing bonds
in 2022 of
1,000,000,000. 1,000,000,000.
Luxshare 0.00 Normal N/A Yes
00 00
Precision
Industry Co.,
Ltd. (STAR
Market Notes)
Phase V
ultra-short-term
financing bonds
in 2022 of
1,000,000,000. 1,000,000,000.
Luxshare 0.00 Normal N/A Yes
00 00
Precision
Industry Co.,
Ltd. (STAR
Market Notes)
Phase VI
ultra-short-term
financing bonds
in 2022 of 1,200,000,000. 1,200,000,000.
0.00 Normal N/A Yes
Luxshare 00 00
Precision
Industry Co.,
Ltd.
Phase VII
ultra-short-term
financing bonds
in 2022 of
Luxshare 800,000,000.00 800,000,000.00 0.00 Normal N/A Yes
Precision
Industry Co.,
Ltd. (STAR
Market Notes)
Phase VIII
800,000,000.00 800,000,000.00 0.00 Normal N/A Yes
ultra-short-term
131
Luxshare Precision Industry Co., Ltd. Annual Report 2022
financing bonds
in 2022 of
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) As of the beginning of the reporting period, the conversion price of convertible bonds of the Company was RMB58.48 per
share.
(2) The conversion price was adjusted from RMB58.01 per share to RMB57.98 per share, which became effective on January 13,
2022, because 3,747,618 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 560,728
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 RMB57.98 per share to RMB57.97 per share, which became effective on January 25,
2022, because 1,132,798 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 270,342
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 RMB57.97 per share to RMB57.93 per share, which became effective on March 8,
2022, because 2,212,582 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 508,705
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 3,011,626 reserved
shares were exercised by grantees under 2019 stock option incentive plan of the Company.
(5) The conversion price was adjusted from RMB57.93 per share to RMB57.92 per share, which became effective on March 22,
2022, because 873,526 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 233,381
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 424,954 reserved
shares were exercised by grantees under 2019 stock option incentive plan of the Company.
(6) The conversion price was adjusted from RMB57.92 per share to RMB57.91 per share, which became effective on May 25,
2022, because 627.019 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 148,641
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.
132
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(7) The conversion price was adjusted from RMB57.91 per share to RMB57.80 per share, which become effective on July 13,
2022 because the Company implemented the annual equity distribution in 2021, and distributed RMB1.099820 in cash per 10 shares
to all shareholders based on the Company’s existing total share capital of 7,085,454,576 shares.
(8) The conversion price was adjusted from RMB57.80 per share to RMB57.75 per share, which became effective on July 27,
2022, because 880,088 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 7,580,662
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 79,033 reserved
shares were exercised by grantees under 2019 stock option incentive plan of the Company.
(9) The conversion price was adjusted from RMB57.75 per share to RMB57.73 per share, which became effective on September
7, 2022, because 468,709 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 2,920,986
shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 139,180 reserved
shares were exercised by grantees under 2019 stock option incentive plan of the Company.
(10) The conversion price was adjusted from RMB57.73 per share to RMB57.71 per share, which became effective on
November 22, 2022, because 379,470 shares were added arising from exercise by grantees under 2018 stock option incentive plan
and 1,911,486 shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 91,549
reserved shares were exercised by grantees under 2019 stock option incentive plan of the Company.
(11) The conversion price was adjusted from RMB57.71 per share to RMB57.63 per share, which became effective on
December 20, 2022, because 11,412,022 shares were added arising from exercise by grantees under 2018 stock option incentive plan
and 294,313 shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the
Company.
(12) As of the end of the reporting period, the conversion price of convertible bonds of the Company was RMB57.63 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 30,000,000 3,000,000,00 737,000.00 12,546 0.00% 2,999,263,00 99.98%
bonds of May 10, 2021 0.00 0.00
Luxshare
3. Top 10 holders of convertible corporate bonds
Unit: Share
Number of Amount of Percentage of
Nature of
convertible convertible convertible
S. Name of holder of convertible corporate holder of
corporate bonds corporate bonds corporate bonds
N. bonds convertible
held at the end of held at the end of held at the end of
corporate
the reporting the reporting the reporting
133
Luxshare Precision Industry Co., Ltd. Annual Report 2022
bonds period period (RMB) period
China Construction Bank Corporation -
Zhong Ou New Blue Chip Flexible
1 Others 1,971,939 214,834,866.29 6.57%
Allocation Hybrid Securities Investment
Fund
Stated
2 Hua Chuang Securities Co., Ltd. owned 1,038,866 113,180,295.24 3.46%
corporation
ICBC Credit Suisse Tianfeng Convertible
3 Bond Fixed Income Pension Product - Others 888,242 96,770,412.93 2.96%
Bank of China Limited
China Minsheng Banking Corp., Ltd. －
4 ICBC Credit Suisse Tianyi Bonds-type Others 821,495 89,498,594.27 2.74%
Securities Investment Fund
Fuguo Fuyi Enterprising Fixed Income
5 Pension Product - Industrial and Others 672,134 73,226,310.76 2.24%
Commercial Bank of China Limited
Foreign
6 UBS AG 624,992 68,090,378.43 2.08%
legal person
National Social Security Fund 1005
7 Others 602,980 65,692,259.08 2.01%
Portfolio
China Construction Bank Corporation -
8 Xinhua Zengyi Bond-type Securities Others 601,234 65,502,039.36 2.00%
Investment Fund
Stated
9 Northeast Securities Co., Ltd. owned 518,683 56,508,438.12 1.73%
corporation
The Hongkong and Shanghai Banking Foreign
10 504,811 54,997,139.21 1.68%
Corporation Limited legal person
4. Significant changes in the profitability, assets and credit status of the guarantors
□ Applicable N/A
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 (Lian He [2022] No. 4227) issued by China Lianhe Credit Rating Co., Ltd. on June 22,
2022, 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
134
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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, 2022 December 31, 2021 Y/Y% Change
Current ratio 1.1830 1.1154 6.06%
Equity-debt ratio 60.38% 62.03% -1.65%
Quick ratio 0.6824 0.7930 -13.95%
2022 2021 Y/Y% Change
Net profit, excluding 844,205.29 601,559.72 40.34%
non-recurring profit and loss
EBITDA - total debt ratio 60.45% 59.02% 1.43%
Interest coverage ratio 11.75 13.41 -12.38%
Cash interest coverage ratio 14.99 14.59 2.74%
EBITDA-to-interest coverage 19.43 21.47 -9.50%
ratio
Rate of loans due and repaid 100.00% 100.00% 0.00%
Rate of interest due and paid 100.00% 100.00% 0.00%
135
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Section X Financial Report
I. Auditor’s report
Audit opinion Standard Unqualified Opinion
Signing date of audit report April 27, 2023
Auditor BDO China Shu Lun Pan Certified Public Accountants LLP
Auditor report document number Xin Kuai Shi Bao Zi [2023] No. ZB10828
Name of certified public accountants LI Jing and DAN Jie
Main Body of Auditor’s Report
Auditor’s Report
Xin Kuai Shi Bao Zi [2023] No. ZB10828
To all shareholders of Luxshare Precision Industry Co., Ltd.,
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, 2022, 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, 2022, 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 Note 2. Sample the product sales revenue to make test
“V. Notes to consolidated financial statements” to the thereof according to different regions and customers:
financial statements. check supporting documents related to revenue
136
Luxshare Precision Industry Co., Ltd. Annual Report 2022
In 2022, Luxshare Precision’s operating income recognition;
presented in its consolidated financial statements 3. Implement the analytical procedures on income
amounted to RMB214,028,394,300.00. Luxshare and gross profit and determine whether there are
Precision has a large number of customers at home and abnormal fluctuations in the amount of revenue for the
abroad. Under different delivery methods, the Company current period;
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, 2022, 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 RMB38,125,952,900.00 and evaluate whether the judgment made by the
RMB762,623,400.00 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 2022 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.
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
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.
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;
(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 doubts 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.
BDO China Shu Lun Pan Certified Public Accountants LLP Chinese CPA: LI Jing (Project Partner)
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Chinese CPA: DAN Jie
Shanghai China April 27, 2023
II. Financial statements
Statements in notes to the financial statements are dominated in RMB.
1. Consolidated balance sheet
Prepared by: Luxshare Precision Industry Co., Ltd.
December 31, 2022
In RMB
Item December 31, 2022 January 1, 2022
Current assets:
Cash and bank balances 19,367,209,441.41 14,204,618,186.43
Balances with clearing agencies
Placements with banks and other
financial institutions
Held-for-trading financial assets 1,353,266,499.91 2,107,118,105.04
Derivative financial assets
Notes receivable 949,767,020.69 307,836,634.64
Accounts receivable 26,043,354,859.19 31,623,185,946.25
Receivable financing
Prepayments 586,577,865.23 406,016,492.61
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of insurance
contract reserves
Other receivables 431,123,451.91 598,456,702.88
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 37,363,329,476.66 20,900,755,733.15
Contract assets
Held-for-sale assets
Non-current assets due within one
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
year
Other current assets 2,197,204,594.09 2,161,055,820.73
Total current assets 88,291,833,209.09 72,309,043,621.73
Non-current assets:
Loans and advances to customers
Debt investments 1,739,251,540.45 1,464,279,206.63
Other debt investments
Long-term receivables
Long-term equity investment 2,000,007,642.66 1,125,605,226.03
Other investments in equity
440,106,992.66 235,976,148.42
instruments
Other non-current financial assets 35,700,000.00 5,700,000.00
Investment properties 92,782,410.06 59,000,690.72
Fixed assets 44,026,022,703.69 34,113,259,322.43
Construction in progress 2,695,377,794.32 3,685,336,499.02
Bearer biological assets
Oil and gas assets
Right-of-use assets 941,749,814.66 425,011,542.28
Intangible assets 2,695,684,053.67 2,222,985,029.31
Development expenditure
Goodwill 1,730,047,190.39 1,397,364,508.87
Long-term deferred expenses 810,913,529.72 733,015,722.42
Deferred tax assets 1,208,582,281.01 891,215,468.53
Other non-current assets 1,676,259,912.33 1,904,305,181.49
Total non-current assets 60,092,485,865.62 48,263,054,546.15
Total assets 148,384,319,074.71 120,572,098,167.88
Current liabilities:
Short-term borrowings 14,911,899,668.93 11,919,635,337.99
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
44,318,321.50 41,436.00
liabilities
Derivative financial liabilities
Notes payable 515,054,217.52 234,500,590.93
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Accounts payable 49,786,483,552.54 45,416,165,667.67
Receipts in advance 0.00 0.00
Contract liabilities 501,765,453.24 268,506,246.98
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
agency
Employee benefits payable 2,368,135,762.48 2,099,916,381.79
Taxes payable 841,385,173.92 616,039,596.28
Other payables 472,880,196.48 382,391,106.17
Including: Interest payable
Dividends payable 15,089,486.78
Fees and commissions payable
Amounts payable under
reinsurance contracts
Held-for-sale liabilities
Non-current liabilities due within
1,232,252,431.14 270,079,590.16
one year
Other current liabilities 3,957,037,125.24 3,623,423,072.87
Total current liabilities 74,631,211,902.99 64,830,699,026.84
Non-current liabilities:
Insurance contract reserves
Long-term borrowings 9,205,313,060.94 5,025,096,193.09
Bonds payable 2,689,623,546.98 2,805,785,000.04
Including: Preferred shares
Perpetual bonds
Lease liabilities 800,739,041.51 315,093,483.55
Long-term payables
Long-term employee benefits
payable
Provisions 682,513.39 923,738.96
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Deferred income 665,910,095.66 538,556,944.18
Deferred tax liabilities 1,606,645,177.00 1,272,092,467.86
Other non-current liabilities 324,039.05 1,207,763.79
Total non-current liabilities 14,969,237,474.53 9,958,755,591.47
Total liabilities 89,600,449,377.52 74,789,454,618.31
Owners’ equity:
Share capital 7,099,908,647.00 7,050,485,477.00
Other equity instruments 527,319,637.88 527,358,025.98
Including: Preferred shares
Perpetual bonds
Capital reserve 3,652,626,861.74 2,719,695,281.67
Less: Treasury shares
Other comprehensive income 651,458,316.25 -35,801,471.29
Special reserve 2,094,879.61 1,018,784.75
Surplus reserve 1,121,072,698.83 985,161,506.61
General risk reserve
Unappropriated profit 32,288,416,277.22 24,040,637,144.00
Total owners’ equity attributable to
45,342,897,318.53 35,288,554,748.72
equity holders of the parent company
Minority interests 13,440,972,378.66 10,494,088,800.85
Total owners’ equity 58,783,869,697.19 45,782,643,549.57
Total liabilities and owners’ equity 148,384,319,074.71 120,572,098,167.88
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, 2022 January 1, 2022
Current assets:
Cash and bank balances 2,470,873,229.56 999,340,773.61
Held-for-trading financial assets 425,160,741.00 597,571,722.08
Derivative financial assets
Notes receivable 96,318,451.09 162,983,735.09
Accounts receivable 6,130,919,579.55 2,901,625,168.21
Receivable financing
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Prepayments 153,214,652.87 475,784,600.82
Other receivables 250,596,765.44 635,052,127.84
Including: Interest receivable
Dividends receivable 150,000,000.00 211,543,626.19
Inventories 365,123,547.22 278,795,156.21
Contract assets
Held-for-sale assets
Non-current assets due within one
year
Other current assets 6,550,429,892.93 1,025,701,494.05
Total current assets 16,442,636,859.66 7,076,854,777.91
Non-current assets:
Debt investments 509,574,733.25 371,512,328.76
Other debt investments
Long-term receivables
Long-term equity investment 22,333,083,031.91 21,334,608,802.17
Other investments in equity
436,416,576.65 231,075,109.79
instruments
Other non-current financial assets 614,489,717.42 572,768,124.91
Investment properties
Fixed assets 156,454,801.57 154,033,992.55
Construction in progress 6,477,655.44 16,062,240.56
Bearer biological assets
Oil and gas assets
Right-of-use assets 60,287,106.95 66,189,643.97
Intangible assets 312,566,547.35 71,279,533.82
Development expenditure
Goodwill 53,174,339.31 53,174,339.31
Long-term deferred expenses 0.00
Deferred tax assets 5,787,962.17 9,473,895.76
Other non-current assets 2,465,600.00 41,620,656.64
Total non-current assets 24,490,778,072.02 22,921,798,668.24
Total assets 40,933,414,931.68 29,998,653,446.15
Current liabilities:
Short-term borrowings 1,000,555,555.56 1,892,374,226.82
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Held-for-trading financial
12,958,840.00
liabilities
Derivative financial liabilities
Notes payable 1,665,344,848.22 1,876,085,509.12
Accounts payable 3,869,002,157.32 1,683,682,881.16
Receipts in advance
Contract liabilities 11,694,420.46 2,776,607.46
Employee benefits payable 49,737,492.15 19,543,803.49
Taxes payable 5,987,485.42 5,588,631.90
Other payables 1,568,456,509.82 2,373,609.44
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due within
378,055,420.51 50,896,248.67
one year
Other current liabilities 3,841,635,343.15 1,607,362,301.65
Total current liabilities 12,403,428,072.61 7,140,683,819.71
Non-current liabilities:
Long-term borrowings 5,645,155,501.44 1,845,854,168.50
Bonds payable 2,689,623,546.98 2,581,553,066.25
Including: Preferred shares
Perpetual bonds
Lease liabilities 45,690,389.15 54,189,902.44
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 5,765,818.86 9,162,818.02
Deferred tax liabilities 60,231,489.77 34,451,813.60
Other non-current liabilities
Total non-current liabilities 8,446,466,746.20 4,525,211,768.81
Total liabilities 20,849,894,818.81 11,665,895,588.52
Owners’ equity:
Share capital 7,099,908,647.00 7,050,485,477.00
Other equity instruments 527,319,637.88 527,358,025.98
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Including: Preferred shares
Perpetual bonds
Capital reserve 4,069,645,567.93 3,080,149,716.35
Less: Treasury shares
Other comprehensive income 294,991,891.50 162,951,644.67
Special reserve
Surplus reserve 1,121,072,698.83 985,161,506.61
Unappropriated profit 6,970,581,669.73 6,526,651,487.02
Total owners’ equity 20,083,520,112.87 18,332,757,857.63
Total liabilities and owners’ equity 40,933,414,931.68 29,998,653,446.15
3. Consolidated income statement
In RMB
Item 2022 2021
I. Total operating income 214,028,394,291.44 153,946,097,790.40
Including: Operating income 214,028,394,291.44 153,946,097,790.40
Interest income
Premiums earned
Fee and commission
income
II. Total operating costs 203,642,032,034.98 146,970,931,574.11
Including: Operating costs 187,928,880,285.38 135,048,336,292.88
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 476,325,439.67 193,812,057.14
145
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Selling expenses 831,398,139.60 789,908,163.80
General expenses 5,075,668,085.35 3,741,908,783.50
R&D expenses 8,447,038,946.21 6,642,300,402.74
Financial expenses 882,721,138.77 554,665,874.05
Including: Interest
1,038,070,641.24 656,411,767.86
expenses
Interest
504,344,274.59 361,773,700.27
income
Add: Other income 602,294,263.90 853,542,165.37
Investment income (Loss is
998,278,358.77 689,386,649.74
indicated by “-”)
Including: Income from
investments in associates and joint 794,759,492.42 29,737,321.95
ventures
Income from
derecognition of financial assets -400,156,146.02 -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
13,625,720.11 -115,737,751.66
value (Loss is indicated by “-”)
Impairment losses of credit
-47,181,938.93 -26,875,504.69
(Loss is indicated by “-”)
Impairment losses of assets
-846,822,131.05 -162,790,335.12
(Loss is indicated by “-”)
Income from disposal of assets
47,931,529.63 -45,266,592.65
(Loss is indicated by “-”)
III. Operating profit (Loss is indicated by
11,154,488,058.89 8,167,424,847.28
“-”)
Add: Non-operating income 34,312,299.74 21,096,536.60
Less: Non-operating expenses 30,805,374.33 45,672,434.05
IV. Total profit (Total losses are indicated
11,157,994,984.30 8,142,848,949.83
by “-”)
Less: Income tax expenses 667,318,205.34 322,238,643.64
V. Net profit (Net loss is indicated by “-”) 10,490,676,778.96 7,820,610,306.19
(I) Categorized by the nature of
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
continuing operation
1. Net profit from continuing
10,490,676,778.96 7,820,610,306.19
operations (Net loss is indicated by “-”)
2. Net profit from discontinued
operations (Net loss is indicated by “-”)
(II) Categorized by ownership
1. Net profit attributable to
9,163,104,849.54 7,070,520,386.57
shareholders of the parent company
2. Net profit attributable to
1,327,571,929.42 750,089,919.62
non-controlling interests
VI. Other comprehensive income, net of
647,909,759.47 -23,685,660.51
tax
Other comprehensive income
attributable to owners of the parent 687,259,787.54 8,916,331.77
company, net of tax
(I) Other comprehensive income that
cannot be subsequently reclassified to 131,579,091.87 81,705,917.80
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
131,579,091.87 81,705,917.80
investments in equity instruments
4. Changes in fair value of
enterprises’ own credit risks
5. Others
(II) Other comprehensive income
555,680,695.67 -72,789,586.03
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
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
of other debt investments
5. Reserve for cash flow hedges
6. Translation differences of
financial statements denominated in 555,680,695.67 -72,789,586.03
foreign currencies
7. Others
Other comprehensive income
attributable to minority interests, net of -39,350,028.07 -32,601,992.28
tax
VII. Total comprehensive income 11,138,586,538.43 7,796,924,645.68
Total comprehensive income
attributable to owners of the parent 9,850,364,637.08 7,079,436,718.34
company
Total comprehensive income
1,288,221,901.35 717,487,927.34
attributable to minority interests
VIII. Earnings per share:
(I) Basic earnings per share 1.29 1.01
(II) Diluted earnings per share 1.28 0.99
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 RMB0.00 in the reporting period, and were RMB0.00 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 2022 2021
I. Total operating income 12,952,813,735.54 9,280,144,923.02
Less: Operating costs 12,051,823,934.39 8,565,181,794.19
Taxes and levies 12,941,878.95 6,084,601.77
Selling expenses 27,577,223.42 24,117,122.95
General expenses 146,709,569.94 162,180,125.16
R&D expenses 437,028,645.07 320,362,046.32
Financial expenses 333,162,964.83 227,705,129.43
Including: Interest
462,146,428.54 264,763,187.06
expenses
Interest income 117,198,473.67 55,788,891.39
Add: Other income 52,979,889.49 278,899,119.07
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Investment income (Loss is
1,361,112,472.06 2,268,732,708.25
indicated by “-”)
Including: Income from
investments in associates and joint 16,056,804.17 -4,411,361.63
ventures
Income from
derecognition of financial assets
-43,522,172.22 -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
16,705,913.20 2,187,784.65
value (Loss is indicated by “-”)
Impairment losses of credit
-8,375,363.61 -1,373,983.35
(Loss is indicated by “-”)
Impairment losses of assets
-4,468,874.95 -3,339,894.30
(Loss is indicated by “-”)
Income from disposal of
-192,009.60 15,567.99
assets (Loss is indicated by “-”)
II. Operating profit (Loss is indicated
1,361,331,545.53 2,519,635,405.51
by “-”)
Add: Non-operating income 4,192,819.73 299,873.15
Less: Non-operating expenses 248,053.30 528,129.00
III. Total profit (Total losses are
1,365,276,311.96 2,519,407,149.66
indicated by “-”)
Less: Income tax expenses 6,164,389.77 -1,529,939.13
IV. Net profit (Net loss is indicated by
1,359,111,922.19 2,520,937,088.79
“-”)
(I) Net profit from continuing
1,359,111,922.19 2,520,937,088.79
operation (Net loss is indicated by “-”)
(II) Net profit from discontinued
operations (Net loss is indicated by “-”)
V. Other comprehensive income, net of
132,040,246.83 82,216,629.66
tax
(I) Other comprehensive income
that cannot be subsequently reclassified 132,040,246.83 82,216,629.66
to profit or loss
1. Changes from
re-measurement of defined benefit plans
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
2. Other comprehensive income
that cannot be reclassified to profit or
loss under the equity method
3. Changes in fair value of other
132,040,246.83 82,216,629.66
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 1,491,152,169.02 2,603,153,718.45
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated statement of cash flows
In RMB
Item 2022 2021
I. Cash flows from operating activities:
Cash receipts from the sales of
231,311,294,189.07 143,070,164,356.03
goods and the rendering of services
Net increase in customer deposits
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
and deposits from banks and other
financial institutions
Net increase in loans from the
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 9,595,383,015.24 7,258,087,295.46
Other cash receipts relating to
2,681,301,179.71 2,646,521,521.99
operating activities
Sub-total of cash inflows from
243,587,978,384.02 152,974,773,173.48
operating activities
Cash payments for goods
204,048,286,382.64 125,194,510,007.35
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
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Cash payments for interest, fees
and commissions
Cash payments for insurance
policyholder dividends
Cash payments to and on behalf of
20,086,575,874.76 16,468,591,642.75
employees
Payments of various types of taxes 1,799,647,577.54 1,635,898,950.98
Other cash payments relating to
4,925,858,229.74 2,391,005,655.40
operating activities
Sub-total of cash outflows from
230,860,368,064.68 145,690,006,256.48
operating activities
Net cash flow from operating activities 12,727,610,319.34 7,284,766,917.00
II. Cash flows from investing activities:
Cash receipts from disposals and
8,259,554,985.04 53,300,796,496.89
recovery of investments
Cash receipts from investment
526,570,852.82 777,579,552.30
income
Net cash receipts from disposals of
fixed assets, intangible assets and other 506,778,473.84 343,357,620.39
long-term assets
Net cash receipts from disposals of
0.00 16,418,213.71
subsidiaries and other business entities
Other cash receipts relating to
745,017,358.71 4,665,590,364.12
investing activities
Sub-total of cash inflows from investing
10,037,921,670.41 59,103,742,247.41
activities
Cash payments to acquire or
construct fixed assets, intangible assets 13,584,140,261.73 12,567,222,230.86
and other long-term assets
Cash payments to acquire
8,390,295,501.05 54,495,943,096.22
investments
Net increase in pledged loans
receivables
Net cash payments for acquisitions
of subsidiaries and other business 961,816,227.15 17,100,080.22
entities
Other cash payments relating to
428,035,523.59 403,138,825.89
investing activities
152
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Sub-total of cash outflows from
23,364,287,513.52 67,483,404,233.19
investing activities
Net cash flow from investing activities -13,326,365,843.11 -8,379,661,985.78
III. Cash flows from financing
activities:
Cash receipts from capital
1,596,922,470.96 2,387,352,799.19
contributions
Including: Cash receipts from
capital contributions from minority 1,030,300,000.00 1,800,900,000.00
owners of subsidiaries
Cash receipts from borrowings 67,739,900,243.50 35,452,570,746.25
Other cash receipts relating to
7,527,472,775.23 4,705,930,595.98
financing activities
Sub-total of cash inflows from
76,864,295,489.69 42,545,854,141.42
financing activities
Cash repayments of borrowings 58,773,171,168.15 38,074,504,796.63
Cash payments for distribution of
dividends or profits or settlement of 1,796,754,390.90 1,399,755,112.12
interest expenses
Including: Payments for
distribution of dividends or profits to
minority owners of subsidiaries
Other cash payments relating to
8,138,121,749.19 3,461,522,325.75
financing activities
Sub-total of cash outflows from
68,708,047,308.24 42,935,782,234.50
financing activities
Net cash flow from financing activities 8,156,248,181.45 -389,928,093.08
IV. Effect of foreign exchange rate
833,389,043.75 -58,444,561.40
changes on cash and cash equivalents
V. Net increase in cash and cash
8,390,881,701.43 -1,543,267,723.26
equivalents
Add: Opening balance of cash and
8,921,536,728.08 10,464,804,451.34
cash equivalents
VI. Closing balance of cash and cash
17,312,418,429.51 8,921,536,728.08
equivalents
6. Statement of cash flows of the parent company
In RMB
153
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Item 2022 2021
I. Cash flows from operating activities:
Cash receipts from the sales of
10,929,088,841.65 14,258,035,135.82
goods and the rendering of services
Receipts of tax refunds 169,862,322.46 295,360,510.43
Other cash receipts relating to
12,206,141,292.86 10,782,694,066.14
operating activities
Sub-total of cash inflows from
23,305,092,456.97 25,336,089,712.39
operating activities
Cash payments for goods
12,697,462,668.02 14,298,865,162.82
purchased and services received
Cash payments to and on behalf of
224,427,747.93 177,817,539.81
employees
Payments of various types of taxes 21,569,336.18 29,081,311.32
Other cash payments relating to
10,060,056,726.22 9,840,822,402.98
operating activities
Sub-total of cash outflows from
23,003,516,478.35 24,346,586,416.93
operating activities
Net cash flow from operating activities 301,575,978.62 989,503,295.46
II. Cash flows from investing activities:
Cash receipts from disposals and
2,711,452,000.00 11,776,296,929.96
recovery of investments
Cash receipts from investment
1,448,310,422.70 2,106,637,671.03
income
Net cash receipts from disposals of
fixed assets, intangible assets and other 467,498.85 7,640,613.84
long-term assets
Net cash receipts from disposals of
subsidiaries and other business entities
Other cash receipts relating to
investing activities
Sub-total of cash inflows from investing
4,160,229,921.55 13,890,575,214.83
activities
Cash payments to acquire or
construct fixed assets, intangible assets 237,037,719.00 146,496,738.96
and other long-term assets
Cash payments to acquire
8,385,526,433.53 18,393,225,472.38
investments
154
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Net cash payments for acquisitions
of subsidiaries and other business
entities
Other cash payments relating to
0.00
investing activities
Sub-total of cash outflows from
8,622,564,152.53 18,539,722,211.34
investing activities
Net cash flow from investing activities -4,462,334,230.98 -4,649,146,996.51
III. Cash flows from financing
activities:
Cash receipts from capital
566,622,470.96 586,452,799.19
contributions
Cash receipts from borrowings 9,777,071,023.06 4,416,265,430.62
Other cash receipts relating to
7,521,511,778.98 4,471,016,039.08
financing activities
Sub-total of cash inflows from
17,865,205,273.00 9,473,734,268.89
financing activities
Cash repayments of borrowings 5,560,227,961.58 2,688,298,719.66
Cash payments for distribution of
dividends or profits or settlement of 1,133,386,845.40 958,024,940.64
interest expenses
Other cash payments relating to
5,344,266,086.84 3,384,213,580.92
financing activities
Sub-total of cash outflows from
12,037,880,893.82 7,030,537,241.22
financing activities
Net cash flow from financing activities 5,827,324,379.18 2,443,197,027.67
IV. Effect of foreign exchange rate
114,413,815.11 16,346,991.54
changes on cash and cash equivalents
V. Net increase in cash and cash
1,780,979,941.93 -1,200,099,681.84
equivalents
Add: Opening balance of cash and
680,555,773.61 1,880,655,455.45
cash equivalents
VI. Closing balance of cash and cash
2,461,535,715.54 680,555,773.61
equivalents
7. Consolidated statement of changes in owners’ equity
Current period
155
Luxshare Precision Industry Co., Ltd. Annual Report 2022
In RMB
2022
Equity attributable to owners of the parent company
Item Other equity instruments Less: Other General Minority Total owners’
Share Capital Special Surplus Unappropriated
Treasur comprehensi risk Others Subtotal interests equity
Preferred Perpetual
capital Others reserve reserve reserve profit
shares bonds y shares ve income reserve
527,35 2,719,6
I. Closing balance of the 7,050,48 -35,801,471. 1,018,7 985,161, 10,494,08 45,782,643,54
0.00 0.00 8,025.9 95,281. 0.00 0.00 24,040,637,144.00 35,288,554,748.72
preceding year 5,477.00 29 84.75 506.61 8,800.85 9.57
8 67
Add: Changes in
0.00 0.00
accounting policies
Corrections of
0.00 0.00
prior period errors
Business
combination involving
0.00 0.00
enterprises under
common control
Others 0.00 0.00
527,35 2,719,6
II. Opening balance of 7,050,48 -35,801,471. 1,018,7 985,161, 10,494,08 45,782,643,54
0.00 0.00 8,025.9 95,281. 0.00 0.00 24,040,637,144.00 35,288,554,748.72
the current year 5,477.00 29 84.75 506.61 8,800.85 9.57
8 67
III. Changes for the year 932,93
49,423,1 -38,38 687,259,787. 1,076,0 135,911, 2,946,883, 13,001,226,14
(Decrease is indicated 0.00 0.00 1,580.0 0.00 0.00 8,247,779,133.22 10,054,342,569.81
70.00 8.10 54 94.86 192.22 577.81 7.62
by “-”) 7
(I) Total comprehensive 687,259,787. 1,288,221, 11,138,586,53
9,163,104,849.54 9,850,364,637.08
income 54 901.35 8.43
156
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(II) Owners’ 932,93
49,423,1 -38,38 1,658,661, 2,640,978,038
contributions and 0.00 0.00 1,580.0 0.00 0.00 0.00 0.00 0.00 0.00 982,316,361.97
70.00 8.10 676.46 .43
reduction in capital 7
517,20
1. Ordinary shares 49,419,4 1,030,300, 1,596,922,470
3,037.9 566,622,470.96
contributed by owners 33.00 000.00 .96
6
2. Capital contribution
-38,38 213,45
from holders of other 3,737.00 178,801.53 178,801.53
8.10 2.63
equity instruments
3. Share-based payment 426,59
46,691,33 473,288,787.6
recognized in owners’ 7,450.7 426,597,450.75
6.87 2
equity 5
-11,082 581,670,3 570,587,978.3
4. Others -11,082,361.27
,361.27 39.59 2
135,911, -779,414,524.
(III) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -915,325,716.32 -779,414,524.10 0.00
192.22 10
1. Transfer to surplus 135,911,
-135,911,192.22 0.00 0.00
reserve 192.22
2. Transfer to general
0.00 0.00
risk reserve
3. Distributions to -779,270,547.
-779,270,547.26 -779,270,547.26
owners (or shareholders) 26
4. Others -143,976.84 -143,976.84 -143,976.84
(IV) Transfers within
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
owners’ equity
1. Capitalization of
0.00 0.00
capital reserve (or share
157
Luxshare Precision Industry Co., Ltd. Annual Report 2022
capital)
2. Capitalization of
surplus reserve (or share 0.00 0.00
capital)
3. Loss offset by surplus
0.00 0.00
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
1,076,0
(V) Special reserve 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,076,094.86 0.00 1,076,094.86
94.86
1. Transfer to special
5,435,4
reserve in the current 5,435,469.87 5,435,469.87
69.87
period
2. Amount utilized in the 4,359,3
4,359,375.01 4,359,375.01
current period 75.01
(VI) Others 0.00 0.00
527,31 3,652,6
IV. Closing balance of 7,099,90 651,458,316. 2,094,8 1,121,07 13,440,97 58,783,869,69
0.00 0.00 9,637.8 26,861. 0.00 0.00 32,288,416,277.22 45,342,897,318.53
the current period 8,647.00 25 79.61 2,698.83 2,378.66 7.19
8 74
Prior period
158
Luxshare Precision Industry Co., Ltd. Annual Report 2022
In RMB
2021
Equity attributable to owners of the parent company
Total
Item Other equity instruments Less: Other Minority
Share Capital Special Surplus General risk Unappropriate owners’
Treasury comprehensive Others Subtotal interests
Preferred Perpetual equity
capital Others reserve reserve reserve reserve d profit
shares bonds shares income
I. Closing balance of 6,999,76 527,449, 1,890,09 733,067,797.7 17,996,149,25 28,101,81 2,804,783,627 30,906,599,
0.00 0.00 0.00 -44,717,803.06 0.00 0.00
the preceding year 8,186.00 226.56 9,569.60 3 7.73 6,234.56 .51 862.07
Add: Changes in
0.00 0.00
accounting policies
Corrections of
0.00 0.00
prior period errors
Business
combination involving
0.00 0.00
enterprises under
common control
Others 0.00 0.00
II. Opening balance of 6,999,76 527,449, 1,890,09 733,067,797.7 17,996,149,25 28,101,81 2,804,783,627 30,906,599,
0.00 0.00 0.00 -44,717,803.06 0.00 0.00
the current year 8,186.00 226.56 9,569.60 3 7.73 6,234.56 .51 862.07
III. Changes for the
50,717,2 -91,200. 829,595, 1,018,784.7 252,093,708.8 6,044,487,886 7,186,738, 7,689,305,173 14,876,043,
year (Decrease is 0.00 0.00 0.00 8,916,331.77 0.00
91.00 58 712.07 5 8 .27 514.16 .34 687.50
indicated by “-”)
(I) Total 7,070,520,386 7,079,436, 717,487,927.3 7,796,924,6
8,916,331.77
comprehensive income .57 718.34 4 45.68
(II) Owners’ 50,717,2 -91,200. 829,595, 880,221,8 6,971,817,246 7,852,039,0
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
contributions and 91.00 58 712.07 02.49 .00 48.49
159
Luxshare Precision Industry Co., Ltd. Annual Report 2022
reduction in capital
1. Ordinary shares 50,708,4 535,744, 586,452,7 1,800,900,000 2,387,352,7
contributed by owners 82.00 317.19 99.19 .00 99.19
2. Capital contribution
-91,200. 507,253. 424,861.4
from holders of other 8,809.00 424,861.43
58 01 3
equity instruments
3. Share-based
240,700, 240,700,7 242,372,171
payment recognized in 1,671,462.93
708.77 08.77 .70
owners’ equity
52,643,4 52,643,43 5,169,245,783 5,221,889,2
4. Others
33.10 3.10 .07 16.17
252,093,708.8 -1,026,032,50 -773,938,7 -773,938,79
(III) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
8 0.30 91.42 1.42
1. Transfer to surplus 252,093,708.8 -252,093,708.
0.00 0.00
reserve 8 88
2. Transfer to general
0.00 0.00
risk reserve
3. Distributions to
-773,891,489. -773,891,4 -773,891,48
owners (or
58 89.58 9.58
shareholders)
4. Others -47,301.84 -47,301.84 -47,301.84
(IV) Transfers within
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
owners’ equity
1. Capitalization of
capital reserve (or 0.00 0.00
share capital)
2. Capitalization of 0.00 0.00
160
Luxshare Precision Industry Co., Ltd. Annual Report 2022
surplus reserve (or
share capital)
3. Loss offset by
0.00 0.00
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
1,018,784.7 1,018,784. 1,018,784.7
(V) Special reserve 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5 75 5
1. Transfer to special
1,018,784.7 1,018,784. 1,018,784.7
reserve in the current
5 75 5
period
2. Amount utilized in
0.00 0.00
the current period
(VI) Others 0.00 0.00
IV. Closing balance of 7,050,48 527,358, 2,719,69 1,018,784.7 985,161,506.6 24,040,637,14 35,288,55 10,494,088,80 45,782,643,
0.00 0.00 0.00 -35,801,471.29 0.00
the current period 5,477.00 025.98 5,281.67 5 1 4.00 4,748.72 0.85 549.57
161
Luxshare Precision Industry Co., Ltd. Annual Report 2022
8. Statement of changes in owners’ equity of the parent company
Current period
In RMB
2022
Other equity instruments Less: Other
Item Share Special Unappropriated Total owners’
Preferred Perpetual Capital reserve Treasury comprehensive Surplus reserve Others
capital Others reserve profit equity
shares bonds shares income
I. Closing balance of 7,050,485 527,358,0 3,080,149,716.3 18,332,757,85
0.00 0.00 0.00 162,951,644.67 0.00 985,161,506.61 6,526,651,487.02
the preceding year ,477.00 25.98 5 7.63
Add: Changes
in accounting 0.00
policies
Corrections
of prior period 0.00
errors
Others 0.00
II. Opening balance 7,050,485 527,358,0 3,080,149,716.3 18,332,757,85
0.00 0.00 0.00 162,951,644.67 0.00 985,161,506.61 6,526,651,487.02
of the current year ,477.00 25.98 5 7.63
III. Changes for the
49,423,17 1,750,762,255
year (Decrease is 0.00 0.00 -38,388.10 989,495,851.58 0.00 132,040,246.83 0.00 135,911,192.22 443,930,182.71
0.00 .24
indicated by “-”)
(I) Total
1,491,152,169
comprehensive 132,040,246.83 1,359,111,922.19
.02
income
(II) Owners’ 49,423,17 1,038,880,633
0.00 0.00 -38,388.10 989,495,851.58 0.00 0.00 0.00 0.00 0.00
contributions and 0.00 .48
162
Luxshare Precision Industry Co., Ltd. Annual Report 2022
reduction in capital
1. Ordinary shares
49,419,43 566,622,470.9
contributed by 517,203,037.96
3.00 6
owners
2. Capital
contribution from
3,737.00 -38,388.10 213,452.63 178,801.53
holders of other
equity instruments
3. Share-based
473,288,787.6
payment recognized 473,288,787.62
2
in owners’ equity
4. Others -1,209,426.63 -1,209,426.63
(III) Profit -779,270,547.
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 135,911,192.22 -915,181,739.48
distribution 26
1. Transfer to
135,911,192.22 -135,911,192.22 0.00
surplus reserve
2. Distributions to
-779,270,547.
owners (or -779,270,547.26
26
shareholders)
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 (or 0.00
share capital)
2. Capitalization of 0.00
163
Luxshare Precision Industry Co., Ltd. Annual Report 2022
surplus reserve (or
share capital)
3. Loss offset by
0.00
surplus reserve
4. Retained earnings
carried forward
from changes in 0.00
defined benefit
plans
5. Retained earnings
carried forward
from other 0.00
comprehensive
income
6. Others 0.00
(V) Special reserve 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Transfer to
special reserve in 0.00
the current period
2. Amount utilized
0.00
in the current period
(VI) Others 0.00
IV. Closing balance 7,099,908 527,319,6 4,069,645,567.9 20,083,520,11
0.00 0.00 0.00 294,991,891.50 0.00 1,121,072,698.83 6,970,581,669.73
of the current period ,647.00 37.88 3 2.87
Prior period
In RMB
Item 2021
164
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Other equity instruments Other
Less: Treasury Special Surplus Unappropriate Total owners’
Share capital Preferred Perpetual Capital reserve comprehensive Others
Others shares reserve reserve d profit equity
shares bonds income
I. Closing balance of 6,999,768,18 527,449,2 2,303,197,437.3 733,067,797 5,031,699,596
0.00 0.00 0.00 80,735,015.01 0.00 15,675,917,259.37
the preceding year 6.00 26.56 8 .73 .69
Add: Changes in
0.00
accounting policies
Corrections of
0.00
prior period errors
Others 0.00
II. Opening balance 6,999,768,18 527,449,2 2,303,197,437.3 733,067,797 5,031,699,596
0.00 0.00 0.00 80,735,015.01 0.00 15,675,917,259.37
of the current year 6.00 26.56 8 .73 .69
III. Changes for the
50,717,291.0 252,093,708 1,494,951,890
year (Decrease is 0.00 0.00 -91,200.58 776,952,278.97 0.00 82,216,629.66 0.00 2,656,840,598.26
0 .88 .33
indicated by “-”)
(I) Total
2,520,937,088
comprehensive 82,216,629.66 2,603,153,718.45
.79
income
(II) Owners’
50,717,291.0
contributions and 0.00 0.00 -91,200.58 776,952,278.97 0.00 0.00 0.00 0.00 0.00 827,578,369.39
0
reduction in capital
1. Ordinary shares
50,708,482.0
contributed by 535,744,317.19 586,452,799.19
0
owners
2. Capital
contribution from 8,809.00 -91,200.58 507,253.01 424,861.43
holders of other
165
Luxshare Precision Industry Co., Ltd. Annual Report 2022
equity instruments
3. Share-based
payment recognized 240,700,708.77 240,700,708.77
in owners’ equity
4. Others 0.00
(III) Profit 252,093,708 -1,025,985,19
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -773,891,489.58
distribution .88 8.46
1. Transfer to surplus 252,093,708 -252,093,708.
0.00
reserve .88 88
2. Distributions to
-773,891,489.
owners (or -773,891,489.58
58
shareholders)
3. Others 0.00
(IV) Transfers within
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. Capitalization of
capital reserve (or 0.00
share capital)
2. Capitalization of
surplus reserve (or 0.00
share capital)
3. Loss offset by
0.00
surplus reserve
4. Retained earnings
carried forward from
0.00
changes in defined
benefit plans
166
Luxshare Precision Industry Co., Ltd. Annual Report 2022
5. Retained earnings
carried forward from
0.00
other comprehensive
income
6. Others 0.00
(V) Special reserve 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Transfer to special
reserve in the current 0.00
period
2. Amount utilized in
0.00
the current period
(VI) Others 0.00
IV. Closing balance 7,050,485,47 527,358,0 3,080,149,716.3 985,161,506 6,526,651,487
0.00 0.00 0.00 162,951,644.67 0.00 18,332,757,857.63
of the current period 7.00 25.98 5 .61 .02
167
Luxshare Precision Industry Co., Ltd. Annual Report 2022
III. Basic information
(I) 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, 2022, the Company issued 7,099,908,647.00 shares in total, with its registered capital amounting to
RMB7,099,908,647.00. 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, 2023 for issuance.
(II) Scope of consolidated financial statements
The relevant information of subsidiaries of the Company is seen in Note “IX. Equity in other entities”.
The changes in scope of consolidation for this reporting period is seen in Note “VIII. 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. Significant accounting policies and accounting estimates
Reminders on specific accounting policies and accounting estimates:
The Company establishes the specific accounting policies and makes the specific accounting estimates with respect to the
impairment of financial instruments, depreciation of fixed assets, amortization of intangible assets, recognition of revenues and other
transactions or events in accordance with the relevant Accounting Standards for Business Enterprises based on the actual production
and operation characteristics of the Company.
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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, 2022, 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.
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
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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 consolidated financial statements.
The portions 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, and 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 of exercising control over an investee under the common control due to additional
investments 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 of exercising control over an investee not under common control due to additional
investments 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
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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 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, 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; and/or
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;
(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 “V. (19)
Long-term equity investments”.
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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:
－ 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
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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; or
3) this financial liability contains embedded derivatives that need to be split separately.
Based on the aforementioned conditions, these financial liabilities designated by the Company mainly include: (to describe the
specific designation in details)
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 and 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 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, and 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
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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.
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; or
－ 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 derecognition, 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
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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.
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 is 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.
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
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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”.
12. Accounts receivable
Please refer to Note V, 10 “Financial instruments”.
13. Other receivables
Determination and accounting treatment of expected credit losses of other receivables
Please refer to Note V, 10 “Financial instruments” for details of determination and accounting treatment of expected credit
losses of other receivables.
14. 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, contract performance cost, 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.
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 or 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; and 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
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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.
15. 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, 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 Note “V. 10. Test and accounting
treatment of impairment of financial assets”.
16. 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; and
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,
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, 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.
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17. 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
(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, 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.
18. 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.
19. 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 remaining balance is adjusted against the retained earnings. Where the
Company becomes capable of exercising control over an investee under the common control due to additional investments 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.
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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 of exercising control over an investee not under common control due to
additional investments 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 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 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.
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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 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.
20. 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).
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.
The Company measures the existing investment properties using the cost model. 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.
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21. 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; and all of other subsequent expenditures are recognized in profit or loss in the period in which
they are incurred.
(2) Method of depreciation
Estimated useful life Annual depreciation rate
Category Method of depreciation Residual value rate
(year) (%)
Buildings Straight-line method 20, 30 and 43 0, 1, 10 2.35-5
Machinery equipment Straight-line method 3-15 1, 10 6-33
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 10 9-30
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 3-15 1, 10 6-33
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.
(3) 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.
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(4) Identification basis, pricing and depreciation methods of fixed assets leased in under finance leases
Refer to Note V, 36 “Leases”.
22. 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.
23. 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 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 does not continue 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
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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.
24. Right-of-use assets
Please refer to Note V, 36 “Leases”.
25. 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 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 useful Amortization method Residual value rate Basis
life (year)
Software 3-10 Straight-line method None Estimated period of
benefit
Land use right 50 Straight-line method None Certificate of land
use rights
Patent right 10 Straight-line method None Right term
Non-patent technology 10 Straight-line method None Estimated period 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
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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 that all of the following conditions
are met; otherwise, it is recognized in profit or loss for the current period:
(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.
(3) Methods of impairment testing and provision for impairment of intangible assets
Refer to Note V, 26 “Impairment of long-term assets” for methods of impairment testing and provision for impairment of
intangible assets.
26. 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, right-of-use assets, intangible assets with finite useful life, oil and gas assets and other long-term assets
may be impaired at the balance sheet date, the Company performs an impairment test thereon. If the result of the impairment test
shows that the recoverable amount of an asset is lower than its carrying amount, the provision for impairment is made for the
difference and the difference is included in the impairment loss. The recoverable amount of an asset is the higher of its fair value
less disposal costs or 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 a 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
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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.
Once an impairment loss on the asset above is recognized, it will not be reversed in a subsequent period.
27. Long-term deferred expenses
Long-term deferred 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
Housing decoration fees Straight-line method Period of benefit
Others Straight-line method Period of benefit
28. 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 as the contract liabilities. The Company lists the contract assets and liabilities
under the same contract as net amount.
29. 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 includes 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.
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(3) Accounting treatment of termination benefits
The Company recognizes the employment remuneration 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
Other long-term employee benefits provided to employees by the Group are accounted for in accordance with the provisions
applicable to defined contribution plans if they are qualified as defined contribution plans; otherwise, they are accounted for in
accordance with the provisions applicable to defined benefit plans.
30. Lease liabilities
Refer to Note V, 36 “Leases” for the recognition and accounting methods of lease liabilities.
31. 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; or
where the contingency involves a large population of items, the best estimate is determined by weighting all possible
outcomes by their associated probabilities.
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.
32. 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.
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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 the 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, 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 the 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 exercise, 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.
If the Company has amended the terms and conditions of the cash-settled share-based payment agreement so that it will
become the equity-settled share-based payment, on the date of the amendment, regardless of whether during or after the vesting
period, the Company will measure the equity-settled share-based payment in accordance with the fair value on the date when the
equity instruments are granted, recognize the services received in the capital reserve, derecognize the liabilities of the cash-settled
share-based payment already determined on the amendment date, and recognize the difference between the two in the profit or loss
for the current period. If the amendment extends or shortens the vesting period, the Company will account for it based on the
amended vesting period.
33. 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 or services and obtain substantially all of economic benefits from them.
If the contract has two or more 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
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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; or
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 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 following 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
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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.
34. 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.
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 loss 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
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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 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.
35. 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; and
the transaction or event that is not business combination, and at the time of the occurrence, does not affect accounting
profit and 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 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
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reversed, the taxpayer involved intends to settle the current tax assets and liabilities on a net basis or obtain assets and settle
liabilities simultaneously.
36. 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
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.
If the rental concessions, deferred payment and other rent deductions with respect to existing lease contracts directly as a result
of COVID-19 pandemic meet the following conditions at the same time, the Company adopts the simplified method for all lease
choices, without assessing whether the lease changes occurred or reassessing the lease classification:
the lease consideration after concessions is reduced or substantially unchanged compared with the lease consideration before
concessions, and the lease consideration is undiscounted or discounted at the discount rate before concessions; and
other terms and conditions of the lease are determined to have not changed significantly after considering both qualitative and
quantitative factors.
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 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 or the lease term.
The Company determines whether the right-of-use assets are impaired and accounts for the identified impairment losses in
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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; or
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 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 equals 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
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adjustment to the carrying amount of right-of-use assets.
(5) Rental concessions related to COVID-19 epidemic
If adopting practicable expedients to any rental concessions related to COVID-19 epidemic, the Company does not assess
whether the lease change occurred, continues to calculate interest expense on lease liabilities at the discount rate before concessions
and recognize in profit or loss for the current period, and continues to depreciate right-of-use assets in the same manner as before
concessions. In the event of rent reductions, the Company treats the rent reductions as variable lease payments to be offset against
the cost or expense of the relevant assets by the amount undiscounted or the amount discounted at the discount rate before
concessions when the original rental payment obligation is discharged, such as when a rental concession agreement is reached, and
adjusts the lease liabilities accordingly; and in the event of deferred payment of rent, the Company offsets the rent against the lease
liabilities recognized in prior periods when rent is actually paid.
For short-term leases and leases of low-value assets, the Company continues to include the rent under the original contracts in
the cost or expense of the relevant assets in the same manner as before concessions. In the event of rent reductions, the Company
treats the rent reductions as variable lease payments to be offset against the cost or expense of the relevant assets during the period
of rent reductions; and in the event of deferred payment of rent, the Company recognizes the rent payable as a payable in the
original payment period and offsets the rent against the payable when the rent is actually paid.
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
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 and recognized 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; and
The consideration for the lease increases equals 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
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
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) Rental concessions related to COVID-19 epidemic
For the operating leases for which the Company adopts practicable expedients to any rental concessions related to COVID-19
epidemic, the Company continues to recognize the rent under the original contract as the lease income in the same manner as before
concessions. In the event of rent reductions, the Company treats the rent reductions as variable lease payments to be offset against
the lease income during the period of rent reductions; and in the event of deferred receipt of rent, the Company recognizes the rent
receivable during the original period as a receivable, and offsets the rent against the receivable recognized in prior periods when rent
is actually received.
For the finance leases for which the Company adopts practicable expedients to any rental concessions related to COVID-19
epidemic, the Company continues to calculate interest at the discount rate before concessions and recognize it as the lease income.
In the event of rent reductions, the Company treats the rent reductions as variable lease payments to be offset against the lease
income originally organized by the amount undiscounted or the amount discounted at the discount rate before concessions when the
right to receive original rent is waived, such as when a rental concession agreement is reached, with any shortage, if any, being
recognized in the investment income, and adjusts the finance lease receivables accordingly; and in the event of deferred receipt of
rent, the Company offsets the rent against the finance lease receivables recognized in prior periods when rent is actually paid.
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, 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 “V. (10) Financial instruments” for accounting treatment of the
financial asset.
37. Special Reserve
The Group accrues special reserve for safety production in accordance with the relevant regulations of the Ministry of Finance
and the Ministry of Emergency Response. The special reserve refers to the safety expenses mainly used in the course of production
and operation. The special reserve is recognized in the relevant cost or the profit or loss for the current period when it is withdrawn
and is also included in the special reserve account. When the Company utilizes the withdrawn safety production charges, expenses
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
are directly offset against the special reserve. In case of capital expenditures, the expenditures are calculated through the contraction
in progress account and are then recognized as a fixed asset when the safety project is ready for its intended use. Meanwhile, the
special reserve is offset against the cost of forming the fixed asset, and accumulated depreciation of the same amount is recognized.
Such fixed asset will not be depreciated in subsequent periods.
38. Other significant accounting policies and accounting estimates
None
39. Discontinued operations
A discontinued operation is a separately distinguishable component that meets one of the following conditions and has been
disposed of by the Company or classified by the Company as held for sale:
(1) the component represents a separate major business or a separate major area of operation;
(2) the component is part of an associated plan for the proposed disposition of a separate major business or a separate major area
of operation; or
(3) the component is a subsidiary acquired exclusively for resale.
Gains or losses from continuing operations and gains or losses from discontinued operations are presented separately in the
income statement. Gains or losses from operations such as impairment losses and reversals of amounts from discontinued operations
and gains or losses on disposals are presented as gains or losses from discontinued operations. For discontinued operations presented in
the current period, the Company restates the information previously presented as gains or losses from continuing operations in the
current financial statements as gains or losses from discontinued operations in the comparable accounting period.
40. 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
On December 30, 2021, the Ministry of 1. National policies require change; 2. the
Finance issued the Notice on Printing and Company held the 16th meeting of the fifth
Issuing the Interpretation No. 15 of the Board of Directors on April 27, 2023,
Accounting Standards for Business deliberating and approving the Proposal on
Enterprises (No. 35 [2021] of the Ministry Changes in Accounting Policies, and
of Finance); independent directors gave the consent The aforementioned accounting policies
On November 30, 2022, the Ministry of opinion on such issue independently. In have no significant impact on financial
Finance issued the Notice on Printing and accordance with the relevant provisions of statements of the Group and the
Issuing the Interpretation No. 16 of the the Rules Governing the Listing of Stocks Company
Accounting Standards for Business on the Shenzhen Stock Exchange (2023
Enterprises (No. 31 [2022] of the Ministry Revision) and the AOA, these changes in
of Finance). accounting policies are submitted to the
In accordance with the aforesaid Board of Directors for deliberation, but do
provisions, the Company adjusted its not require deliberation by the general
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
original accounting policies accordingly meeting of shareholders.
and began to implement them from the
specified start date.
(1) Implementation of Interpretation No. 15 of the Accounting Standards for Business Enterprises
On December 30, 2021, the Ministry of Finance issued the Interpretation No. 15 of the Accounting Standards for Business
Enterprises (No. 35 [2021] of the Ministry of Finance, hereinafter referred to as the “Interpretation No. 15”).
① Accounting treatment concerning sales in the trial operation
Interpretation No. 15 provides for the accounting treatment and presentation by enterprises of sales of the products or by-products
produced before the fixed assets reach the expected usable status or in the research and development process and provides that the
enterprises shall not offset costs of fixed assets or research and development expenditures against the net amount after offsetting
relevant costs against the relevant income from trial sale. Such provisions began to take effective from January 1, 2022, and the trial
sale that occurred from the beginning of the earliest period presented in the financial statements to January 1, 2022 shall be adjusted
retroactively. The Company’s implementation of such provisions has brought no material impact on the financial position and results of
operation of the Company.
② Judgment on onerous
Interpretation No. 15 provides that the “cost of performing the contract” considered by an enterprise when it judges whether a
contract constitutes an onerous contract shall include the incremental cost of performing the contract and the apportioned amount of
other costs directly related to the performance of the contract. Such requirements began to take effective from January 1, 2022, and
the enterprises shall implement such provisions with respect to all contracts with obligations outstanding as of January 1, 2022, and
adjust retained earnings and other related financial statement items at the beginning of the year in which such requirements are
implemented based on the cumulative effect, without adjusting the data in prior period comparative financial statements. The
Company’s application of such requirements has brought no material impact on the financial position and results of operation of the
Company.
(2) Implementation of Interpretation No. 16 of the Accounting Standards for Business Enterprises
On November 30, 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business
Enterprises (No. 31 [2022] of the Ministry of Finance, hereinafter referred to as the “Interpretation No. 16”).
① Accounting treatment concerning the effects of income tax on dividends from a financial instrument classified as an equity
instrument by the issuer
Interpretation No. 16 provides that for a financial instrument classified as an equity instrument by an enterprise, if the relevant
dividend payments are deducted before the enterprise income tax in accordance with the relevant provisions of tax policies, the
enterprise shall recognize the effects of income tax relating to dividends when recognizing the dividends payable. Since the effects of
income tax on such dividends are usually more directly related to the previous transactions or events that generated the distributable
profits, the enterprise shall include the effects of income tax on dividends in the item of current profit and loss or owner’s equity
(including other comprehensive income items) in accordance with the consistent accounting treatment adopted for previous
transactions or events that generated the distributable profits.
Such provisions began to take effective from January 1, 2022. The corresponding dividends payable that occurred between
January 1, 2022 and the date of implementation shall be adjusted in accordance with such provisions; and if the dividends occurred
prior to January 1, 2022 and the relevant financing instruments have not been derecognized on January 1, 2022, they shall be adjusted
retroactively. The Company’s implementation of such provisions has brought no material impact on the financial position and results of
operation of the Company.
② Accounting treatment concerning the change of cash-settled share-based payment to equity-settled share-based payment by
an enterprise
Interpretation No. 16 provides that where an enterprise changes the terms and conditions of a cash-settled share-based payment
agreement to an equity-settled share-based payment one, the enterprise shall, on the date of change (whether during the vesting
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
period or after the vesting period), calculate the equity-settled share-based payment at the fair value of the granted equity instrument
on the current day, include the services obtained in capital reserves, and at the same time, terminate the recognition of the
cash-settled share-based payment as a liability recognized on the date of change, and include the difference between the two in the
current profit and loss.
Such requirements began to take effective from January 1, 2022. The relevant transactions added between January 1, 2022 and
the date of implementation shall be adjusted in accordance with such provisions; and if the relevant transactions that occurred prior to
January 1, 2022 are not treated in accordance with such provisions, such transactions shall be adjusted retroactively. The Company
shall adjust retained earnings and other related financial statement items as of January 1, 2022 based on the cumulative effect, without
adjusting the data in prior period comparative financial statements. The Company’s implementation of such provisions has brought no
material impact on the financial position and results of operation of the Company.
③ Accounting treatment that the exemption of initial recognition shall not apply to the deferred income tax relating to assets
and liabilities arising from a single transaction
Interpretation No. 16 provides that the provisions of the Accounting Standards for Business Enterprises No. 18 - Income Tax
on the exemption from the initial recognition of deferred income tax liabilities and deferred income tax assets shall not apply to a
single transaction that is not a business combination, that does not affect accounting profits or the amount of taxable income (or
deductible loss) upon the occurrence of a transaction, and in which the initially recognized assets and liabilities result in an equal
amount of taxable temporary differences and deductible temporary differences (including lease transactions in which lease liabilities
are initially recognized by the lessee on the lease inception date and included in the right-of-use assets, and transactions in which
estimated liabilities are recognized and included in the relevant asset costs due to the disposal obligations of fixed assets, among
others, hereinafter referred to as “single transactions to which this Interpretation applies”). As for the taxable temporary differences
and deductible temporary differences arising from the initial recognition of assets and liabilities in a transaction, the enterprise shall,
in accordance with the Accounting Standards for Business Enterprises No. 18 - Income Tax and other relevant provisions,
respectively recognize the corresponding deferred income tax liabilities and deferred income tax assets upon the occurrence of the
transaction.
Such provisions began to take effective from January 1, 2023 and enterprises are allowed to implement them in advance in
2022. For a single transaction to which this Interpretation applies and which occurs from the beginning of the earliest period of
presentation of financial statements when this Interpretation is implemented for the first time to the effective date of this
Interpretation, and if taxable temporary differences and deductible temporary differences arise from the lease liabilities and
right-of-use assets recognized as a result of a single transaction to which this Interpretation applies as well as the recognized
estimated liabilities and corresponding assets relating to disposal obligations at the beginning of the earliest period of presentation of
financial statements when this Interpretation is implemented for the first time, the enterprise shall make adjustments in accordance
with the provisions of this Interpretation.
The Company’s implementation of such provisions has brought no material impact on the financial position and results of
operation of the Company.
(2) Changes in significant accounting estimates
□ Applicable N/A
41. 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
25%, 20%, 19%, 17%, 16.5%, 15%, 10%,
Enterprise income tax Subject to the taxable income amount
0%
Education surcharges 3% of actually paid turnover taxes 3%
Local education surcharges 2% of actually paid turnover taxes 2%
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
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
Suzhou Luxshare Technology Co., Ltd. 15
Suining Luxshare Precision Industry Co., Ltd. 15
Luxshare Precision Industry (Baoding) Co., Ltd. 15
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxshare Precision Industry (Shanxi) Co., Ltd. 15
Dongguan Xuntao Electronic Co., Ltd. 15
Kunshan Luxshare Precision Industry Co., Ltd. 15
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
SpeedTech Corp. 20
Luxshare India Private Limited 25
Luxshare Lanto India Private Limited 25
LUXSHARE-ICT, Inc. Note 3
LUXSHARE-ICT EUROPE LIMITED 19
SuK Kunststofftechnik GmbH 15
Korea Luxshare-ICT Co., Ltd. Note 4
Luxshare-ICT (Vietnam) Limited 0
Luxshare-ICT (Van Trung) Company Limited 10
Luxshare-ICT (Nghe An) Limited 0
Caseteck Singapore PTE. LTD. 17
Xuancheng Luxshare Precision Industry Co., Ltd. 15
Dongguan Huarong Communications Technology Co., Ltd. 15
Shenzhen Huarong Technology Co., Ltd. 15
TIME Interconnect Technology (Huizhou) Limited 15
Huaxun Industrial (Suzhou) Co., Ltd. 15
TIME Interconnect Technology Limited 16.5
TIME Interconnect Investment Limited 16.5
199
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TIME Interconnect (HK) Limited 16.5
TIME Interconnect Wiring Technology Co., Ltd. 16.5
TIME Interconnect Industrial Co., Ltd. 16.5
Huaxun Hong Kong Limited 16.5
Huaxun Cable Co., Ltd. 16.5
Linkz International Limited 16.5
HOVER MANUFACTURING COMPANY LIMITED 16.5
TIME Interconnect Server Technology Co., Ltd. 16.5
Other subsidiaries 25
2. Tax incentives
1. The Company was identified as a high-tech enterprise by the Science, Technology and Innovation Commission of Shenzhen
Municipality, Finance Bureau of Shenzhen Municipality, 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 2022.
2. The subsidiary, Xiexun Electronic (Ji’an) Co., Ltd. (“Ji’an Xiexun”), was identified as a high-tech enterprise by the 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 2022.
3. The subsidiary, ASAP Technology (Jiangxi) Co., Ltd. (“ASAP Jiangxi”), was identified as a high-tech enterprise by the
Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and Jiangxi Provincial Tax Service, State
Taxation Administration on December 14, 2022, with the High-tech Enterprise Certificate No. GR202236001286 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 2022.
4. The subsidiary, Lanto Electronic Limited (“Lanto Kunshan”), was identified as a high-tech enterprise by the Jiangsu Provincial
Department of Science and Technology, Department of Finance of Jiangsu Province, 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 2022.
5. The sub-subsidiary, Bozhou Lanto Electronic Limited (“Lanto Bozhou”), was identified as a high-tech enterprise by the Anhui
Provincial Department of Science and Technology, Department of Finance of Anhui Province, 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 2022.
6. The sub-subsidiary, Huzhou Jiuding Electronic Co., Ltd. (“Huzhou Jiuding”), was identified as a high-tech enterprise by the
Department of Science and Technology of Zhejiang Province, 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
200
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 2022.
7. The subsidiary, Luxshare Automation (Jiangsu) Ltd. (“Luxshare Automation Jiangsu”), was identified as a high-tech
enterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, 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 2022.
8. The sub-subsidiary, Merry Electronics (Suzhou) Co., Ltd. (“Meite Suzhou”), was identified as a high-tech enterprise by the
Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, 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 2022.
9. The subsidiary, Luxshare Electronic Technology (Kunshan) Co., Ltd. (“Luxshare Electronic Kunshan”), was identified as a
high-tech enterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, 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 2022.
10. The sub-subsidiary, Yongxin County Boshuo Electronics Co., Ltd. (“Yongxin Boshuo”), was identified as a high-tech
enterprise by the Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, 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 2022.
11. The subsidiary, Chuzhou Luxshare Precision Industry Co., Ltd. (“Luxshare Chuzhou”), was identified as a high-tech
enterprise by the Anhui Provincial Department of Science and Technology, Department of Finance of Anhui Province, and Anhui
Provincial Tax Service, State Taxation Administration on October 18, 2022, with the High-tech Enterprise Certificate No.
GR202234002571 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 2022.
12. The sub-subsidiary, Merry Electronics (Huizhou) Co., Ltd. (“Merry Huizhou”), 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 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 2022.
13. The subsidiary, Fujian JK Wiring Systems Co., Ltd. (“Fujian JK”), was identified as a high-tech enterprise by the 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 2022.
14. The subsidiary, Jiangxi Luxshare Intelligent Manufacture Co., Ltd. (“Smart Manufacturing Jiangxi”), was identified as a
high-tech enterprise by the Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, 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 2022.
15. The sub-subsidiary, Jiangxi ASAP Electronic Co., Ltd. (“Boshuo Electronics”), was identified as a high-tech enterprise by the
Science and Technology Department of Jiangxi Province, Jiangxi Provincial Finance Bureau, and Jiangxi Provincial Tax Service, State
201
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 2022.
16. The sub-subsidiary, Suzhou Luxshare Technology Co., Ltd. (“Suzou Luxshare Technology”), was identified as a high-tech
enterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, and Jiangsu
Provincial Tax Service, State Taxation Administration on November 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 2022.
17. The sub-subsidiary, Suining Luxshare Precision Industry Co., Ltd. (“Luxshare Suining”), was identified as a high-tech
enterprise by the Science & Technology Department of Sichuan Province, Sichuan Provincial Finance Department, 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 2022.
18. The sub-subsidiary, Luxshare Precision Industry (Baoding) Co., Ltd. (“Luxshare Baoding”), was identified as a high-tech
enterprise by the Hebei Provincial Department of Science and Technology, Hebei Provincial Finance Bureau, and Hebei Provincial
Tax Service, State Taxation Administration on December 26, 2022, with the High-tech Enterprise Certificate No. GR202213002272
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 2022.
19. The sub-subsidiary, Luxshare Precision Industry (Shanxi) Co., Ltd. (“Luxshare Shanxi”), was identified as a high-tech
enterprise by the Shanxi Science and Technology Department, Shanxi Provincial Department of Finance, and Shanxi Provincial Tax
Service, State Taxation Administration on December 12, 2022, with the High-tech Enterprise Certificate No. GR202214000862 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 2022.
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 22, 2022, with the High-tech Enterprise Certificate No.
GR202244014095 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 2022.
21. The subsidiary, Kunshan Luxshare Precision Industry Co., Ltd. (“Luxshare Kunshan”), was identified as a high-tech
enterprise by the Jiangsu Provincial Department of Science and Technology, Department of Finance of Jiangsu Province, 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 2022.
22. The subsidiary, Luxshare iTech (Zhejiang) Co., Ltd. (“iTech Zhejiang”), was identified as a high-tech enterprise by the
Department of Science and Technology of Zhejiang Province, 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 2022.
23. The subsidiary, Shenzhen Luxshare Acoustics Technology Ltd. (“Luxshare Electroacoustic”), was identified as a high-tech
enterprise by the Science, Technology and Innovation Commission of Shenzhen Municipality, Finance Bureau of Shenzhen
Municipality, 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 enterprise income tax rate of 15% for 2022.
24. The subsidiary, Enshi Luxshare Precision Industry Co., Ltd. (“Luxshare Enshi”), was qualified for tax reduction in
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 2022.
25. The sub-subsidiary, Xuancheng Luxshare Precision Industry Co., Ltd. (“Luxshare Xuancheng”), was identified as a high-tech
enterprise by the Anhui Provincial Department of Science and Technology, Department of Finance of Anhui Province, 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 2022.
26. According to the Article 6 of Circular No. 151/2014/TT-BTC issued by the Ministry of Finance on October 10, 2014,
Luxshare-ICT (Vietnam) Limited (“Luxshare Vietnam”) will be eligible for exemption from enterprise income tax for the first two
years and 50% reduction for next four years if realizing the investment plan in the industrial park. Among them, Zone E obtained an
Official Reply No. 619/CT-TTHT from the Tax Bureau of Bac Giang Province on February 28, 2018, confirming that Zone E has
obtained the qualifications of enjoying exemption from enterprise income tax for the first two years and 50% reduction for next four
years, and Luxshare Vietnam paid enterprise income tax at a 10% tax rate; and Zones T/U1 obtained an Official Reply No.
6555/CTBGI-TTHT from the Tax Bureau of Bac Giang Province on November 23, 2020, confirming that Zones T and U1 have
obtained the qualifications of enjoying exemption from enterprise income tax for the first two years and 50% reduction for next four
years and Luxshare Vietnam paid the enterprise income tax at a 0% tax rate in 2022.
27. According to the provisions of Article 14.1 of the Decree No. 85/2007/Q-TTg issued on June 11, 2007, any domestic and
foreign organization and individual investing in any project based in the Southeast Economic Zone of Nghe An will enjoy the
enterprise income tax rate of 10% for 15 years from the date when the investment project starts operation, and exemption from
enterprise income tax for 4 years from the date of taxable income and 50% reduction for next 9 years. Luxshare-ICT (Nghe An)
Limited (“Luxshare Nghe An”) obtained the Official Reply No. 2417/CT-TTHT from the Tax Bureau of Nghe An Province on July 1,
2020, confirming that Luxshare Nghe An paid the enterprise income tax at a 0% tax rate in 2022.
28. According to the Article 6 of Circular No. 151/2014/TT-BTC issued by the Ministry of Finance on October 10, 2014,
Luxshare-ICT (Van Trung) Company Limited (“Luxshare Van Trung”) is eligible for exemption from enterprise income tax for the
first two years and 50% reduction for next four years if realizing the investment plan in the industrial park, and obtained an Official
Reply No. 5675/CT-TTHT from the Tax Bureau of Bac Giang Province on October 13, 2020, confirming that Luxshare Van Trung
paid the enterprise income tax at a 10% tax rate in 2022.
29. Dongguan Huarong Communications Technology Co., Ltd. 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 20, 2021, with the High-tech Enterprise Certificate No. GR202144005374 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, it paid the
enterprise income tax at a 15% tax rate in 2022.
30. Shenzhen Huarong Technology Co., Ltd. was identified as a high-tech enterprise by the Science, Technology and
Innovation Commission of Shenzhen Municipality, Finance Bureau of Shenzhen Municipality, and Shenzhen Tax Service, State
Taxation Administration on December 23, 2021, with the High-tech Enterprise Certificate No. GR202144200244 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, it paid the enterprise
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Luxshare Precision Industry Co., Ltd. Annual Report 2022
income tax at a 15% tax rate in 2022.
31. TIME Interconnect Technology (Huizhou) Limited 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 19, 2022, with the High-tech Enterprise Certificate No. GR202244004084 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, it paid the enterprise
income tax at a 15% tax rate in 2022.
32. Huaxun Industrial (Suzhou) Co., Ltd. was identified as a high-tech enterprise by the Jiangsu Provincial Department of
Science and Technology, Department of Finance of Jiangsu Province, and Jiangsu Provincial Tax Service, State Taxation
Administration on December 26, 2022, with the High-tech Enterprise Certificate No. GR202232008533 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, it paid the enterprise income tax
at a 15% tax rate in 2022.
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 (USA) is shown as follows:
Applicable tax rate
Income tax (federal) 21%
Local tax (state) 8.84%
Note 4. The applicable tax rate of Korea Luxshare ICT Co., Ltd is shown as follows:
Total profits Corporate tax Local tax
Less than KRW200 million 10% 10% of corporate taxable income
KWR200 million~KWR20 billion 20%
KWR20 billion~KWR300 billion 22%
Above KWR300 billion 25%
VII. Notes to items in consolidated financial statements
1. Cash and bank balances
In RMB
204
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Item Closing balance Opening balance
Cash on hand 1,236,553.93 323,716.04
Bank deposit 17,311,181,875.58 8,921,213,012.04
Other cash and bank balances 2,054,791,011.90 5,283,081,458.35
Total 19,367,209,441.41 14,204,618,186.43
Including: Total amount of funds 3,147,696,598.47 2,906,518,266.72
deposited abroad
Total amount of funds restricted in use 2,054,791,011.90 5,283,081,458.35
due to mortgage, pledge or freezing, etc.
Other descriptions:
The breakdown of cash and bank balances which are restricted in use by mortgage, pledge or freezing, etc.as follows:
Item Closing balance Balance at the end of last year
Security deposit of bank acceptance bills 1,045,942,343.92 3,080,883,997.37
Credit deposit 713,933,913.76 5,079,240.43
Performance deposit 67,218,494.08 2,515,972.33
Term deposit or call deposit used for 227,696,260.14 2,194,602,248.22
guarantee
Total 2,054,791,011.90 5,283,081,458.35
2. Held-for-trading financial assets
In RMB
Item Closing balance Opening balance
Financial assets at fair value through profit 1,353,266,499.91 2,107,118,105.04
or loss
Including:
Including:
Derivative financial assets 27,039,649.45 115,918,643.05
Bank wealth management 1,326,226,850.46 1,991,199,461.99
Total 1,353,266,499.91 2,107,118,105.04
Other descriptions:
3. Notes receivable
(1) Categorized presentation of notes receivable
In RMB
205
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Item Closing balance Opening balance
Bank acceptance bill 853,752,545.27 137,325,482.78
Commercial acceptance bill 96,014,475.42 170,511,151.86
Total 949,767,020.69 307,836,634.64
In RMB
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Category Book Book
Provision Provision
Proportio Proportio
Amount Amount proportio value Amount Amount proportio value
n n
n n
Including:
Notes receivable for 96,315,3 100.00% 300,916. 0.31% 96,014,47 170,514,3 100.00% 3,247.78 170,511,1
which bad-debt 91.99 57 5.42 99.64 51.86
provision is made by
group
Including:
96,315,3 100.00% 300,916. 0.31% 96,014,47 170,514,3 100.00% 3,247.78 170,511,1
Total
91.99 57 5.42 99.64 51.86
Provision for bad debts made by group: 300,916.57
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Commercial acceptance
96,315,391.99 300,916.57 0.31%
bill
Total 96,315,391.99 300,916.57
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
Commercial 3,247.78 297,668.79 300,916.57
206
Luxshare Precision Industry Co., Ltd. Annual Report 2022
acceptance bill
Total 3,247.78 297,668.79 300,916.57
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 469,338,331.89
Total 469,338,331.89
(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 1,028,289,842.79
Total 1,028,289,842.79
(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
None
(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
207
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Instructions on the write-off of notes receivable:
None
4. Accounts receivable
(1) Categorized disclosure of accounts receivable
In RMB
Closing balance Opening balance
Bad-debt
Book balance Book balance Bad-debt provision
provision
Category Book
Provision Provision Book value
value
Amount Proportion Amount proportio Amount Proportion Amount proportio
n n
Accounts receivable 35,692,4 0.14% 35,692, 100.00% 39,549,79 0.12% 39,549,7 100.00%
for which bad-debt 10.70 410.70 1.95 91.95
provision is made
individually
Including:
Provision on an 35,692,4 0.14% 35,692, 100.00% 39,549,79 0.12% 39,549,7 100.00%
individual basis 10.70 410.70 1.95 91.95
Accounts receivable 26,147,7 99.86% 104,438 0.40% 26,043,35 31,677,41 99.88% 54,227,5 0.17% 31,623,185,
for which bad-debt 93,530.9 ,671.77 4,859.19 3,509.78 63.53 946.25
provision is made by 6
group
Including:
26,147,7 99.86% 104,438 0.40% 26,043,35 31,677,41 99.88% 54,227,5 0.17% 31,623,185,
Group by aging 93,530.9 ,671.77 4,859.19 3,509.78 63.53 946.25
6
26,183,4 100.00% 140,131 26,043,35 31,716,96 100.00% 93,777,3 31,623,185,
Total 85,941.6 ,082.47 4,859.19 3,301.73 55.48 946.25
6
Provision for bad debts made individually: 35,692,410.70
In RMB
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 4,367,165.01 4,367,165.01 100.00% Unrecoverable
Entity 3 241,403.36 241,403.36 100.00% Unrecoverable
208
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Entity 4 95,161.77 95,161.77 100.00% Unrecoverable
Total 35,692,410.70 35,692,410.70
Provision for bad debts made by group: 104,438,671.77
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Group by aging 26,147,793,530.96 104,438,671.77 0.40%
Total 26,147,793,530.96 104,438,671.77
Descriptions on basis for determining the group:
In RMB
Closing balance
Description
Account receivable Bad-debt provision Provision proportion
Undue 25,389,060,285.15 12,694,080.37 0.05
1 to 60 days overdue 587,181,192.45 29,359,059.62 5.00
61 to 120 days overdue 141,687,067.06 42,506,120.12 30.00
121 to 180 days overdue 5,157,468.31 2,062,987.32 40.00
181 to 365 days overdue 11,516,617.40 5,758,308.70 50.00
1 to 2 years (excluding 1 year)
11,327,849.47 10,195,064.52 90.00
overdue
Over 2 years overdue 1,863,051.12 1,863,051.12 100.00
Total 26,147,793,530.96 104,438,671.77
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 (including 1 year) 26,139,064,957.15
Including: undue 25,384,591,004.45
1 to 60 days overdue 589,079,637.69
61 to 120 days overdue 148,720,229.30
121 to 180 days overdue 5,157,468.31
181 to 365 days overdue 11,516,617.40
1 to 2 years 11,327,849.47
2 to 3 years 2,104,454.48
209
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Over 3 years 30,988,680.56
Over 5 years 30,988,680.56
Total 26,183,485,941.66
(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 93,777,355.48 45,942,584.71 4,269,301.72 4,680,444.00 140,131,082.47
receivable
Total 93,777,355.48 45,942,584.71 4,269,301.72 4,680,444.00 140,131,082.47
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
Accounts receivable actually written off 4,269,301.72
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
Closing balance of accounts Proportion in total closing Closing balance of bad-debt
Entity name
receivable balance of accounts receivable provision
Entity 1 9,287,704,722.79 35.47% 4,643,852.36
Entity 2 2,427,863,504.75 9.27% 1,213,931.75
Entity 3 1,689,772,807.75 6.45% 844,886.40
210
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Entity 4 1,688,551,494.86 6.45% 844,275.75
Entity 5 1,291,291,129.77 4.93% 645,645.56
Total 16,385,183,659.92 62.57%
(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
Item Amount of Ways of financial assets Gains or losses related
derecognition transfer to derecognition
Entity 1 16,400,464,657.36 Sold -310,709,969.32
Total 16,400,464,657.36 -310,709,969.32
In 2022, the Company sold the accounts receivable of specific customers to banks and financial institutions. As of December
31, 2022, the accounts receivable derecognized for the specific customer’s amount is RMB16,400,464,657.36 and the loss related to
derecognition amount is RMB310,709,969.32.
5. 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:
None
6. Prepayments
(1) Presentation of prepayments by aging
In RMB
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 578,774,779.64 98.67% 402,980,282.50 99.25%
1 to 2 years 5,930,449.93 1.01% 2,296,128.67 0.57%
211
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2 to 3 years 1,250,070.12 0.21% 531,677.00 0.13%
Over 3 years 622,565.54 0.11% 208,404.44 0.05%
Total 586,577,865.23 406,016,492.61
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 58,434,910.71 9.96
Entity 2 56,463,991.40 9.63
Entity 3 50,840,677.25 8.67
Entity 4 35,951,555.09 6.13
Entity 5 30,424,519.77 5.19
Total 232,115,654.22 39.58
Other descriptions:
7. Other receivables
In RMB
Item Closing balance Opening balance
Other receivables 431,123,451.91 598,456,702.88
Total 431,123,451.91 598,456,702.88
(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 overdue impairment and its
judgment basis
Other descriptions:
212
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 1,647,513.92 731,313.00
Security deposit 99,930,933.45 137,059,171.76
Export tax rebate receivable 143,831,836.92 187,123,564.48
Disbursement 32,488,722.87 56,222,486.93
Transfer funds of fixed assets 66,582.77 1,727,939.28
Insurance indemnity 59,200,000.00
Others 158,490,656.80 160,733,783.92
Total 436,456,246.73 602,798,259.37
2) Bad-debt provision
In RMB
213
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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, 4,341,556.49 4,341,556.49
2022
Balance as at January 1,
2022 in the current
period
Provision in the current 941,685.43 941,685.43
period
Other changes 49,552.90 49,552.90
Balance as at December 5,332,794.82 5,332,794.82
31, 2022
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) 435,419,059.56
Including: undue 413,437,541.79
1 to 60 days overdue 19,869,688.91
61 to 120 days overdue 562,100.70
121 to 180 days overdue 449,021.36
181 to 365 days overdue 1,100,706.80
1 to 2 years 425,049.70
2 to 3 years 140,420.00
Over 3 years 471,717.47
3 to 4 years 471,717.47
Total 436,456,246.73
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 Recovery or Closing balance
balance Provision Write-off Others
reversal
214
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Group by aging 4,341,556.49 941,685.43 49,552.90 5,332,794.82
Total 4,341,556.49 941,685.43 49,552.90 5,332,794.82
The amount in “others” includes the increase in combination
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 143,831,836.92 Undue 32.95% 719,159.18
Entity 2 Equity transfer funds 95,000,000.00 Undue 21.77% 475,000.00
Entity 3 Security deposit 21,000,000.00 Undue 4.81% 105,000.00
Entity 4 Security deposit 8,986,621.10 Undue 2.06% 44,933.11
Entity 5 Security deposit 8,920,000.00 Undue 2.04% 44,600.00
Total 277,738,458.02 63.63% 1,388,692.29
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
215
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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:
8. Inventories
Whether the Company needs 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 8,805,902,241.24 254,491,258.28 8,551,410,982.96 6,531,836,331.00 161,394,242.96 6,370,442,088.04
Products in 4,968,545,535.84 41,453,287.63 4,927,092,248.21 3,386,085,829.05 50,039,777.32 3,336,046,051.73
process
23,761,428,325.9 464,323,619.78 23,297,104,706.1 10,741,507,248.2 139,411,084.80 10,602,096,163.4
Goods on hand
3 5 3 3
Revolving 319,286,571.44 319,286,571.44 215,566,686.58 116,734.00 215,449,952.58
materials
Contract 97,678,729.66 97,678,729.66
performance cost
Goods sold 112,857,920.38 995,408.89 111,862,511.49 78,396,684.90 243,458.90 78,153,226.00
Materials in 38,828,113.69 38,828,113.69 241,533,661.04 241,533,661.04
transit
Work in process - 21,425,447.80 1,359,834.74 20,065,613.06 60,796,035.94 3,761,445.61 57,034,590.33
outsourced
Total 38,125,952,885.9 762,623,409.32 37,363,329,476.6 21,255,722,476.7 354,966,743.59 20,900,755,733.1
216
Luxshare Precision Industry Co., Ltd. Annual Report 2022
8 6 4 5
(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 Others Others
off
Raw material 161,394,242.96 211,180,501.81 573,758.03 116,461,377.65 2,195,866.87 254,491,258.28
Products in 50,039,777.32 2,571,563.46 1,060,180.68 10,097,872.47 41,453,287.63
process
Goods on hand 139,411,084.80 398,663,619.46 85,817,757.28 -12,066,672.80 464,323,619.78
Revolving 116,734.00 116,734.00
materials
Work in process - 3,761,445.61 2,401,610.87 1,359,834.74
outsourced
Goods sold 243,458.90 820,949.39 68,999.40 995,408.89
Total 354,966,743.59 613,236,634.12 573,758.03 205,926,659.88 227,066.54 762,623,409.32
RMB573,800.00 of “others” in the increase in the current period is included in the consolidation, and the amount of “others” in the
decrease in the current period is the exchange difference.
(3) Descriptions on closing balance of inventories containing capitalized amount of borrowing costs
None
(4) Descriptions on current amortization amount of contract performance costs
None
9. Other current assets
In RMB
Item Closing balance Opening balance
Input tax to be deducted 2,019,719,088.95 2,049,189,830.82
Income tax prepaid 69,527,937.14 108,461,037.04
large-amount deposit note 107,450,138.93
Others 507,429.07 3,404,952.87
Total 2,197,204,594.09 2,161,055,820.73
Other descriptions:
217
Luxshare Precision Industry Co., Ltd. Annual Report 2022
10. Debt investments
In RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Principal 1,620,000,000.00 1,620,000,000.00 1,403,057,083.33 1,403,057,083.33
Interest 119,251,540.45 119,251,540.45 61,222,123.30 61,222,123.30
Total 1,739,251,540.45 1,739,251,540.45 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) impaired)
Balance as at January 1,
2022 in the current
period
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable N/A
Other descriptions:
11. Long-term equity investments
In RMB
Increase and decrease in the current period
Investme
Others
Opening nt profit Closing Closing
comprehe Declared Provision
balance or loss Others balance balance of
Investee Additional Reduced nsive cash for
(book recognize changes Others (book provision for
investment investment income dividends impairme
value) d under in equity value) impairment
adjustmen or profits nt
equity
t
method
I. Joint ventures
Riyimao 106,220,2 23,777,78 2,113,184. -106,303. -11,509,3 -1,428,62 119,066,9
218
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Industrial 35.27 6.12 27 33 18.35 3.57 60.41
Co., Ltd.
106,220,2 23,777,78 2,113,184. -106,303. -11,509,3 -1,428,62 119,066,9
Subtotal
35.27 6.12 27 33 18.35 3.57 60.41
II. Associates
Subtotal of 1,053,757, 90,721,59 770,981,7 -65,915.0 548,062. -629,754. 1,915,313 34,372,608.4
associates 599.22 2.51 06.30 0 46 78 ,290.71 6
1,053,757, 90,721,59 770,981,7 -65,915.0 548,062. -629,754. 1,915,313 34,372,608.4
Subtotal
599.22 2.51 06.30 0 46 78 ,290.71 6
1,159,977, 90,721,59 794,759,4 2,047,269. 441,759. -11,509,3 -2,058,37 2,034,380 34,372,608.4
Total
834.49 2.51 92.42 27 13 18.35 8.35 ,251.12 6
Other descriptions:
12. Other investments in equity instruments
In RMB
Item Closing balance Opening balance
Beijing Xloong Technologies Co., Ltd. 10,773,818.02 10,979,152.89
Beijing Wiparking Technology Co., Ltd. 10,783,500.71 9,817,127.78
Jingtuo Liyin Technology (Beijing) Co., 2,983,866.23 3,214,196.57
Ltd.
Zhejiang Tony Electronic Co., Ltd. 342,379,257.92 210,278,829.12
Shenzhen Huaxida Technology Co., Ltd. 72,480,000.00
Xuande Energy Co., Ltd. 749,467.66
Asia Pacific Emerging Industry Investment 706,549.78 937,374.40
Co., Ltd.
Total 440,106,992.66 235,976,148.42
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
773,818.02
Technologies Co., short-term trading
219
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd. purposes
Beijing
Not for
Wiparking
783,500.71 short-term trading
Technology Co.,
purposes
Ltd.
Jingtuo Liyin
Not for
Technology
16,133.77 short-term trading
(Beijing) Co.,
purposes
Ltd.
Zhejiang Tony Not for
Electronic Co., 212,413.30 323,011,965.40 short-term trading
Ltd. purposes
Shenzhen
Not for
Huaxida
22,480,000.00 short-term trading
Technology Co.,
purposes
Ltd.
Asia
Pacific Emerging Not for
Industry 25,256.02 short-term trading
Investment Co., purposes
Ltd.
Other descriptions:
13. Other non-current financial assets
In RMB
Item Closing balance Opening balance
Financial assets at fair value through profit 35,700,000.00 5,700,000.00
or loss
Total 35,700,000.00 5,700,000.00
Other descriptions:
Equity investments
14. 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
220
Luxshare Precision Industry Co., Ltd. Annual Report 2022
amount
1. Opening balance 55,740,323.84 18,427,155.49 74,167,479.33
2. Increase in the current 70,283,343.77 10,981.32 70,294,325.09
period
(1) Purchase
(2) Transferred from 1,522,097.40 10,981.32 1,533,078.72
inventories\fixed
assets\construction in
progress
(3) Increase in business 68,761,246.37 68,761,246.37
combination
3. Decrease in the current 37,698,482.94 221,343.79 37,919,826.73
period
(1) Disposal 37,468,296.67 37,468,296.67
(2) Other transfer out
(3) Others 230,186.27 221,343.79 451,530.06
4. Closing balance 88,325,184.67 18,216,793.02 106,541,977.69
II. Accumulated
depreciation and
amortization
1. Opening balance 15,166,788.61 15,166,788.61
2. Increase in the current 11,985,012.32 11,985,012.32
period
(1) Provision or 5,724,873.85 5,724,873.85
amortization
(2) Increase in business 6,260,138.47 6,260,138.47
combination
3. Decrease in the current 13,392,233.30 13,392,233.30
period
(1) Disposal 13,348,080.97 13,348,080.97
(2) Other transfer out 44,152.33 44,152.33
4. Closing balance 13,759,567.63 13,759,567.63
III. Provision for
impairment
1. Opening balance
221
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2. Increase in the current
period
(1) Provision
3. Decrease in the current
period
(1) Disposal
(2) Other transfer out
4. Closing balance
IV. Book value
1. Closing book value 74,565,617.04 18,216,793.02 92,782,410.06
2. Opening book value 40,573,535.23 18,427,155.49 59,000,690.72
(2) Investment properties measured at fair value
□ Applicable N/A
15. Fixed assets
In RMB
Item Closing balance Opening balance
Fixed assets 44,026,022,703.69 34,113,259,322.43
Total 44,026,022,703.69 34,113,259,322.43
(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
1. Opening 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
2. Increase in 2,436,017,5 86,310,842. 10,660,551, 171,167,283 1,140,904,7 32,614,600. 3,279,649,1 2,495,674,1 20,302,889,
the current 79.51 09 317.57 .23 66.33 21 06.46 54.16 649.56
period
222
Luxshare Precision Industry Co., Ltd. Annual Report 2022
411,785,423 46,020,382. 7,208,858,9 88,528,183. 1,056,871,6 13,614,470. 2,593,747,9 2,241,158,2 13,660,585,
(1) Purchase
.96 01 36.26 33 33.99 39 95.34 35.09 260.37
(2) 1,329,863,1 25,573,127. 2,352,120,0 94,846.64 56,279,696. 3,767,493.2 503,348,942 194,640,014 4,465,687,3
Transferred 68.01 73 13.40 58 8 .55 .01 02.20
from
construction
in progress
(3) Increase in 515,969,374 9,994,647.5 817,331,790 81,461,782. 27,426,594. 14,707,833. 43,748,142. 44,999,815. 1,555,639,9
business .34 0 .68 89 88 45 50 62 81.86
combination
178,399,613 4,722,684.8 282,240,577 1,082,470.3 326,840.88 524,803.09 138,804,026 14,876,089. 620,977,105
(4) Others
.20 5 .23 7 .07 44 .13
3. Decrease in 121,027,538 52,181,209. 1,758,151,1 9,029,693.0 618,873,017 5,029,581.8 352,121,457 442,576,139 3,358,989,7
the current .37 23 00.39 3 .35 7 .60 .14 36.98
period
(1) Disposal 20,652,373. 51,624,133. 939,041,295 8,831,549.2 62,382,198. 4,893,345.6 201,477,363 341,566,657 1,630,468,9
or scrap 76 83 .27 8 10 7 .25 .85 17.01
(2) Decrease 35,271.44 398,705.08 8,039,298.5 67,343.98 929,797.07 9,470,416.1
in business 3 0
combination
100,339,893 158,370.32 811,070,506 198,143.75 556,490,819 68,892.22 149,714,297 101,009,481 1,719,050,4
(3) Others
.17 .59 .25 .28 .29 03.87
4. Closing 13,363,674, 348,923,944 32,046,639, 378,144,995 2,960,204,1 94,727,461. 9,188,808,0 5,897,963,4 64,279,086,
balance 979.58 .21 146.51 .23 86.00 82 43.60 82.80 239.75
II.
Accumulated
depreciation
1. Opening 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
2. Increase in 703,502,425 50,572,130. 4,186,344,0 93,217,214. 457,837,108 20,427,506. 1,407,189,8 1,119,905,4 8,038,995,7
the current .88 46 55.14 17 .23 17 55.45 69.94 65.44
period
565,749,084 38,897,705. 3,677,296,1 44,645,804. 435,767,046 9,557,013.6 1,367,254,6 1,088,813,1 7,227,980,7
(1) Provision
.29 30 93.18 61 .51 1 87.08 76.96 11.54
(2)
Transferred
from
investment
properties
(3) Increase in 85,066,282. 6,815,991.9 449,657,310 48,387,122. 22,039,582. 10,619,504. 25,224,205. 29,181,303. 676,991,303
223
Luxshare Precision Industry Co., Ltd. Annual Report 2022
business 53 4 .95 20 69 06 33 54 .24
combination
52,687,059. 4,858,433.2 59,390,551. 184,287.36 30,479.03 250,988.50 14,710,963. 1,910,989.4 134,023,750
(4) Others
06 2 01 04 4 .66
3. Decrease in 71,701,259. 4,552,703.9 502,847,118 4,026,405.4 251,209,321 4,557,046.1 114,512,318 192,643,074 1,146,049,2
the current 79 5 .27 1 .93 4 .46 .51 48.46
period
(1) Disposal 20,603,869. 3,221,869.7 324,222,022 3,847,716.8 21,683,613. 4,455,597.2 87,870,923. 150,414,113 616,319,725
or scrap 32 6 .15 1 59 9 21 .28 .41
(2) Decrease 1,837.06 142,608.42 1,758,931.7 41,511.17 120,391.21 2,065,279.6
in business 8 4
combination
51,095,553. 1,188,225.7 176,866,164 178,688.60 229,525,708 59,937.68 26,521,004. 42,228,961. 527,664,243
(3) Others
41 7 .34 .34 04 23 .41
4. Closing 2,364,415,1 162,894,220 10,132,127, 174,691,015 1,046,642,7 51,242,564. 3,569,014,3 2,259,730,2 19,760,757,
balance 46.93 .17 638.78 .13 36.76 18 19.36 86.23 927.54
III. Provision
for
impairment
1. Opening 63,256,923. 1,806,681.3 249,275,450 41,808.03 2,495,952.2 42,534.87 14,415,429. 22,780,814. 354,115,594
balance 55 2 .47 7 02 65 .18
2. Increase in 132,621.02 89,271.92 174,805,543 260,123.10 13,763,967. 4,931.62 15,818,283. 28,865,428. 233,740,171
the current .85 28 95 29 .03
period
132,621.02 67,240.68 174,672,969 260,123.10 13,763,967. 4,931.62 15,818,283. 28,865,359. 233,585,496
(1) Provision
.57 28 95 71 .93
(2)
Transferred
from
investment
properties
(3) Increase in 22,031.24 132,574.28 154,605.52
business
combination
(4) Others 68.58 68.58
3. Decrease in 132,621.02 34,585.99 76,584,945. 42,078.32 6,103,425.0 4,931.62 4,142,220.6 8,505,349.0 95,550,156.
the current 04 4 6 0 69
period
(1) Disposal 132,621.02 34,585.99 76,584,523. 41,682.89 6,103,425.0 4,931.62 4,141,950.8 8,505,349.0 95,549,070.
or scrap 62 4 3 0 01
224
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(2) Decrease
in business
combination
(3) Others 421.42 395.43 269.83 1,086.68
4. Closing 63,256,923. 1,861,367.2 347,496,049 259,852.81 10,156,494. 42,534.87 26,091,492. 43,140,893. 492,305,608
balance 55 5 .28 51 31 94 .52
IV. Book
value
1. Closing 10,936,002, 184,168,356 21,567,015, 203,194,127 1,903,404,9 43,442,362. 5,593,702,2 3,595,092,3 44,026,022,
book value 909.10 .79 458.45 .29 54.73 77 31.93 02.63 703.69
2. Opening 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,
book value 34.05 .37 776.95 .63 34.29 46 83.35 62.33 322.43
(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
Plant, office and dormitory buildings of 8,185,323.29
Note 1
Fujian JK
Changshu Luxshare Factory and Auxiliary 489,535,793.09 The certificate is undergoing the
Building Project formalities
New Dormitory of Zhejiang Intelligent 123,622,054.82 The certificate is undergoing the
Manufacture formalities
1,098,280.85 The certificate is undergoing the
Suzhou Meite Cadre Training Center
formalities
Plant and Dormitory of Jiangxi Intelligent 354,867,365.95 The certificate is undergoing the
Manufacture formalities
Plants A and B of Luxshare Dongguan 53,649,491.96 The certificate is undergoing the
225
Luxshare Precision Industry Co., Ltd. Annual Report 2022
formalities
Plant and Dormitory of Electronic 645,220,620.64 The certificate is undergoing the
Technology formalities
41,587,940.29 The certificate is undergoing the
Phase VI Plant of ASAP Technology
formalities
79,313,054.07 The certificate is undergoing the
New plant of LuxcaseICT Yancheng
formalities
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:
None
16. Construction in progress
In RMB
Item Closing balance Opening balance
Construction in progress 2,695,377,794.32 3,685,336,499.02
Total 2,695,377,794.32 3,685,336,499.02
(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
Plant construction 1,757,877,949.76 1,757,877,949.76 2,131,800,600.48 2,131,800,600.48
Equipment 630,505,432.98 630,505,432.98 1,326,553,134.57 1,326,553,134.57
installation
project
Mould 77,734,469.29 77,734,469.29 97,260,914.54 97,260,914.54
improvement
226
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Others 229,259,942.29 229,259,942.29 129,721,849.43 129,721,849.43
Total 2,695,377,794.32 2,695,377,794.32 3,685,336,499.02 3,685,336,499.02
(2) Changes in significant constructions in progress for the current period
In RMB
Amount Proporti
Amount
transferr on of
Other of Including: Current
Increase ed to accumul
decrease accumul Amount of interest
Opening in the fixed Closing ated Project Source of
Item Budget in the ated current capitaliz
balance current assets in balance project progress funds
current capitaliz capitalized ation
period the investme
period ed interest rate
current nt in
interest
period budget
Plant 2,128,82 1,335,46 190,561, 336,738, 1,189,28 86.59% 92.15%
construction 5,576.77 0,101.69 786.01 957.62 2,930.08
Other
of Luxshare
Changshu
Equipment 296,463, 245,346, 245,346, 82.76% 80.00%
installation 329.80 465.69 465.69
project of Other
Luxshare
Changshu
Vietnam 805,618, 457,410, 218,232, 664,369, 11,273,3 83.87% 98.33%
Other
plant project 010.28 663.81 070.17 391.40 42.58
Van Trung 59,100,0 55,980,0 3,120,00 59,100,0 100.00% 99.00%
phase I and 00.00 00.00 0.00 00.00
phase II Other
plant
construction
Yi’an project 180,613, 141,845, 20,142,8 161,988, 89.69% 90.00%
Other
construction 200.37 830.95 38.03 668.98
Electronic 603,560, 285,318, 283,378, 305,788, 262,908, 95.00% 95.00%
technology 261.74 477.88 371.10 269.02 579.96 Other
plant project
Equipment 339,310, 6,525,17 6,525,17 100.00% 100.00%
installation 171.16 8.99 8.99
project of Other
Luxshare
Chuzhou
Equipment 7,689,53 214,933, 1,461,06 1,604,36 71,633,5 28.54% 40.68% Other
227
Luxshare Precision Industry Co., Ltd. Annual Report 2022
installation 5,762.03 557.55 0,385.87 0,381.44 61.98
project of
LuxcaseICT
Yancheng
Equipment 230,243, 88,587,7 119,750, 204,345, 3,114,84 877,358. 83.33% 90.49%
installation 454.12 13.52 383.76 896.31 2.48 49
Other
project of Ri
Shan Jiashan
12,333,2 2,586,06 2,541,59 3,122,12 3,114,84 2,002,41
Total 69,766.2 1,524.39 2,300.63 8,074.78 2.48 0,907.76
7
(3) Provision for impairment of construction in progress for the current period
In RMB
Item Current provision amount Reasons for provision
Other descriptions
None
17. Right-of-use assets
In RMB
Transportation
Item Buildings Machinery equipment Total
equipment
I. Original carrying
amount
1. Opening balance 521,882,255.91 11,555,153.95 142,024.88 533,579,434.74
2. Increase in the current 857,555,147.72 2,609,600.64 860,164,748.36
period
(1) New leases 576,970,636.35 2,609,600.64 579,580,236.99
(2) Increase in business 273,756,264.72 273,756,264.72
combination
(3) Others 6,828,246.65 6,828,246.65
3. Decrease in the current 218,421,289.59 5,209,809.28 1,789.19 223,632,888.06
period
(1) Disposal 217,155,543.70 5,209,809.28 222,365,352.98
(2) Decrease in business
combination
(3) Others 1,265,745.89 1,789.19 1,267,535.08
228
Luxshare Precision Industry Co., Ltd. Annual Report 2022
4. Closing balance 1,161,016,114.04 8,954,945.31 140,235.69 1,170,111,295.04
II. Accumulated
depreciation
1. Opening balance 101,762,094.18 6,761,167.10 44,631.18 108,567,892.46
2. Increase in the current 203,502,331.85 6,310,717.34 40,914.00 209,853,963.19
period
(1) Provision 162,514,804.50 6,310,717.34 40,914.00 168,866,435.84
(2) Increase in business 33,876,798.97 33,876,798.97
combination
(3) Others 7,110,728.38 7,110,728.38
3. Decrease in the current 85,111,925.23 4,903,818.86 44,631.18 90,060,375.27
period
(1) Disposal 84,929,266.82 4,903,818.86 89,833,085.68
(2) Decrease in business
combination
(3) Others 182,658.41 44,631.18 227,289.59
4. Closing balance 220,152,500.80 8,168,065.58 40,914.00 228,361,480.38
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 book value 940,863,613.24 786,879.73 99,321.69 941,749,814.66
2. Opening book value 420,120,161.73 4,793,986.85 97,393.70 425,011,542.28
Other descriptions:
229
Luxshare Precision Industry Co., Ltd. Annual Report 2022
18. 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 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
2. Increase in the 402,757,161.76 189,229,320.81 14,541,628.95 129,574,650.89 1,837,187.89 737,939,950.30
current period
(1) Purchase 232,723,969.33 4,289,836.88 13,199,205.93 86,382,538.63 1,691,300.59 338,286,851.36
(2) Internal R&D
(3) Increase in 150,099,269.29 184,939,483.93 8,142,519.71 145,874.70 343,327,147.63
business
combination
(4) Other 19,933,923.14 1,342,423.02 35,049,592.55 12.60 56,325,951.31
increases
3. Decrease in the 6,522,552.13 3,815.64 35,120,486.91 33,608,309.31 1,359,985.39 76,615,149.38
current period
(1) Disposal 32,768,057.56 32,768,057.56
(2) Decrease in 465,713.64 465,713.64
business
combination
(3) Other 6,522,552.13 3,815.64 35,120,486.91 374,538.11 1,359,985.39 43,381,378.18
decrease
4. Closing 2,433,471,958.29 194,363,877.67 94,473,253.38 376,376,284.59 108,431,904.34 3,207,117,278.27
balance
II. Accumulated
amortization
1. Opening 160,579,370.44 431,820.44 44,820,577.16 110,781,650.90 6,194,029.10 322,807,448.04
balance
2. Increase in the 74,515,680.07 31,845,018.65 13,812,498.50 90,714,646.49 11,240,967.38 222,128,811.09
current period
(1) Provision 58,562,580.65 1,021,771.34 12,647,493.18 87,528,935.60 11,108,741.99 170,869,522.76
(2) Transferred
from investment
230
Luxshare Precision Industry Co., Ltd. Annual Report 2022
properties
(3) Increase in 14,827,771.66 30,823,247.31 3,022,377.74 132,213.98 48,805,610.69
business
combination
(4) Other increase 1,125,327.76 1,165,005.32 163,333.15 11.41 2,453,677.64
3. Decrease in the 9,825.76 1,683.39 15,644,762.70 17,768,731.90 78,030.78 33,503,034.53
current period
(1) Disposal 15,401,126.56 17,400,289.05 32,801,415.61
(2) Decrease in 366,655.17 366,655.17
business
combination
(3) Other 9,825.76 1,683.39 243,636.14 1,787.68 78,030.78 334,963.75
decrease
4. Closing 235,085,224.75 32,275,155.70 42,988,312.96 183,727,565.49 17,356,965.70 511,433,224.60
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 book 2,198,386,733.54 162,088,721.97 51,484,940.42 192,648,719.10 91,074,938.64 2,695,684,053.67
value
2. Opening book 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
value
The proportion of intangible assets formed through internal R&D in the balance of intangible assets at the end of this period is
0.00%.
231
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(2) Land use right without title certificate
In RMB
Reasons for not obtaining the title
Item Book value
certificate
The certificate is undergoing the
Shenzhen plots M0 and M1 228,405,796.61
formalities
Other descriptions:
19. Goodwill
(1) Original carrying amount of goodwill
In RMB
Increase Decrease
Investee name or
Formed by
event forming Opening balance Closing balance
business Others Disposal Others
goodwill
combination
ASAP 42,325,745.85 42,325,745.85
Technology
(Jiangxi) Co.,
Ltd.
Kunshan Lanto 376,682,429.24 376,682,429.24
Electronic
Limited
Bozhou Lanto 9,564,372.61 9,564,372.61
Electronic
Limited
M&A of 53,174,339.31 53,174,339.31
KERTONG
goodwill
Fujian JK Wiring 17,717,209.29 17,717,209.29
Systems Co., Ltd.
Huzhou Jiuding 1,730,318.45 1,730,318.45
Electronic Co.,
Ltd.
SpeedTech Corp. 26,656,146.69 26,656,146.69
Luxshare 4,582,880.91 4,582,880.91
Electronic
Technology
(Kunshan) Co.,
232
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd.
Suk 9,552,894.63 9,552,894.63
kunststofftechnik
GmbH
Merry Electronics 8,570,588.06 8,570,588.06
(Suzhou) Co.,
Ltd.
Merry Electronics 6,575,713.14 6,575,713.14
(Huizhou) Co.,
Ltd.
Merry Electronics 454,304.97 454,304.97
(Shanghai) Co.,
Ltd.
Castle Rock, Inc. 8,303,254.98 8,303,254.98
Taiqiao 441,595.93 441,595.93
Investment Co.,
Ltd.
Luxcase 814,784,800.96 814,784,800.96
Precision
Technology
(Yancheng) Co.,
Ltd.
Zhejiang Puxing 804,455.51 804,455.51
Electronic
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.
TIME 175,669,057.02 175,669,057.02
Interconnect
Technology
Limited
Shenzhen 157,013,624.50 157,013,624.50
Huarong
Technology Co.,
Ltd.
Total 1,433,659,505.82 332,682,681.52 1,766,342,187.34
233
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(2) Provision for impairment of goodwill
In RMB
Investee name or Increase Decrease
event forming Opening balance Closing balance
Provision Other Disposal Other
goodwill
Merry Electronics 8,570,588.06 8,570,588.06
(Suzhou) Co.,
Ltd.
Suk 9,552,894.63 9,552,894.63
kunststofftechnik
GmbH
Merry Electronics 454,304.97 454,304.97
(Shanghai) Co.,
Ltd.
Fujian JK Wiring 17,717,209.29 17,717,209.29
Systems Co.,
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
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% - 29.00%, the gross margin is 2.50% -
30.00%, and the discount rate is 10.42% - 11.09%. The parameters used in goodwill impairment test of major asset groups are as
follows:
Asset group name Gross margin Growth rate Discount rate
Kunshan Lanto Electronic Limited 18.50%-20.42% 1.50%-2.02% 10.47%
Shenzhen Kertong Industrial Co., Ltd. 23.00%-24.00% 7.0%-8.4% 10.97%
Luxcase Precision Technology
5.5%-6.2% 17.7%-20.0% 10.42%
(Yancheng) Co., Ltd.
Shenzhen Huarong Technology Co., Ltd. 2.5% 2%-2.2% 10.97%
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：
Influence of goodwill impairment test
Other descriptions:
234
Luxshare Precision Industry Co., Ltd. Annual Report 2022
20. Long-term deferred expenses
In RMB
Amortization
Increase in the Other reduced
Item Opening balance amount in the Closing balance
current period amount
current period
House decoration 590,715,658.23 344,457,915.35 251,897,926.91 683,275,646.67
fees
Others 142,300,064.19 128,953,020.08 143,615,201.22 127,637,883.05
Total 733,015,722.42 473,410,935.43 395,513,128.13 810,913,529.72
Other descriptions:
21. Deferred tax assets / deferred tax liabilities
(1) Deferred 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 657,614,145.51 120,807,667.80 334,568,858.40 63,227,661.81
of assets
Unrealized profit of 547,139,157.01 83,055,862.59 357,420,408.97 65,112,209.21
internal transaction
Deductible losses 4,720,193,354.02 720,299,236.63 3,434,269,746.64 544,802,910.66
Exchange differences of 33,377,229.80 6,675,445.96 65,447,863.20 13,089,572.55
foreign operations
Termination benefits 1,801,352.50 360,270.50
Non-leave bonus 4,402,578.27 660,386.74 3,393,924.14 676,806.65
Valuation of derivative 26,587,015.00 3,988,052.25
financial instruments
Government grants 632,820,537.44 100,039,648.41 489,494,362.59 87,213,362.00
Share-based payment 622,032,254.71 108,660,230.06 311,751,257.24 75,531,955.67
Tax and accounting 162,109,310.74 40,527,327.69
difference for
depreciation of fixed
assets
Tax and accounting 11,834,392.38 1,822,697.69 15,546,560.82 2,009,028.77
difference for
235
Luxshare Precision Industry Co., Ltd. Annual Report 2022
right-of-use assets
Others 144,569,697.93 21,685,454.69 184,394,974.62 39,551,961.21
Total 7,564,481,025.31 1,208,582,281.01 5,196,287,956.62 891,215,468.53
(2) Deferred 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 1,063,081,733.74 155,352,276.68 909,128,653.76 171,173,301.23
appreciation of business
combination not
involving enterprises
under common control
Changes in fair value of 347,049,284.20 52,057,392.63 191,890,689.53 28,783,603.43
other investments in
equity instruments
Accelerated depreciation 7,762,570,628.34 1,174,529,672.69 6,009,902,532.36 905,906,182.00
of fixed assets
Support funds allocated 14,271,238.70 2,140,685.81 14,658,934.73 2,198,840.21
by the government
Valuation of derivative 274,939,615.85 48,638,903.32 211,399,624.82 33,099,925.45
financial instruments
Accumulative 852,318,046.60 170,463,609.32 646,292,642.90 129,258,528.58
recognition of overseas
investment interests by
equity method
Prepaid pension 6,459,206.85 1,291,841.37 5,447,475.80 1,089,495.16
Allowance for bad debt 668,823.45 133,764.69 677,356.60 135,471.32
overrun
Others 13,580,203.27 2,037,030.49 2,261,422.45 447,120.48
Total 10,334,938,781.00 1,606,645,177.00 7,991,659,332.95 1,272,092,467.86
(3) Deferred tax assets or liabilities presented in net amount after offsetting
In RMB
Offset amount between Closing balance of Offset amount between Opening balance of
Item deferred tax assets and deferred tax assets or deferred tax assets and deferred tax assets or
liabilities at the end of liabilities after offset liabilities at the liabilities after offset
236
Luxshare Precision Industry Co., Ltd. Annual Report 2022
the period beginning of the period
Deferred tax assets 1,208,582,281.01 891,215,468.53
Deferred tax liabilities 1,606,645,177.00 1,272,092,467.86
(4) Details of unrecognized deferred tax assets
In RMB
Item Closing balance Opening balance
(5) The deductible losses of unrecognized deferred tax assets will be due in the following year
In RMB
Particular year Closing amount Opening amount Remarks
Other descriptions:
22. 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 1,663,116,05 1,663,116,05 1,893,831,96 1,893,831,96
land 9.58 9.58 2.00 2.00
Prepaid pension 6,459,206.83 6,459,206.83 5,447,475.82 5,447,475.82
Others 6,684,645.92 6,684,645.92 5,025,743.67 5,025,743.67
1,676,259,91 1,676,259,91 1,904,305,18 1,904,305,18
Total
2.33 2.33 1.49 1.49
Other descriptions:
23. Short-term borrowings
(1) Classification of Short-term borrowings
In RMB
Item Closing balance Opening balance
Pledge loans 1,284,267,389.38 5,928,221,439.02
Mortgage loans 294,954,654.15 41,391,259.41
Guaranteed loans 897,638,187.36 64,979,271.97
Credit loans 12,435,039,438.04 5,885,043,367.59
237
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Total 14,911,899,668.93 11,919,635,337.99
Descriptions on classification of 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 RMB0.00, 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:
None
24. Held-for-trading financial liabilities
In RMB
Item Closing balance Opening balance
Held-for-trading financial liabilities 44,318,321.50 41,436.00
Including:
Held-for-trading bonds issued 41,436.00 41,436.00
Derivative financial liabilities 44,276,885.50
Including:
Total 44,318,321.50 41,436.00
Other descriptions:
25. Notes payable
In RMB
Category Closing balance Opening balance
Bank acceptance bill 515,054,217.52 234,500,590.93
Total 515,054,217.52 234,500,590.93
The total amount of notes payable due but unpaid at the end of this period is RMB0.00.
26. Accounts payable
(1) Presentation of accounts payable
In RMB
Item Closing balance Opening balance
Within 1 year 49,695,071,669.97 45,255,253,965.04
238
Luxshare Precision Industry Co., Ltd. Annual Report 2022
1-2 years 74,344,408.63 112,098,892.50
2-3 years 9,178,439.03 38,693,846.52
More than 3 years 7,889,034.91 10,118,963.61
Total 49,786,483,552.54 45,416,165,667.67
(2) Significant accounts payable with aging over 1 year
In RMB
Reasons for non-payment or carrying
Item Closing balance
forward
Other descriptions:
27. Contract liabilities
In RMB
Item Closing balance Opening balance
Goods payments received in advance 501,765,453.24 268,506,246.98
Total 501,765,453.24 268,506,246.98
Amount of and reason for significant changes in book value during the reporting period
In RMB
Item Change amount Reason for change
28. Employee benefits payable
(1) Presentation of employee benefits payable
In RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term benefits 2,057,292,973.63 19,887,069,854.47 19,602,318,684.83 2,342,044,143.27
II. Post employment 42,412,389.70 1,086,794,293.00 1,103,175,563.49 26,031,119.21
benefits - defined
contribution plan
III. Termination benefits 211,018.46 45,634,473.12 45,784,991.58 60,500.00
Total 2,099,916,381.79 21,019,498,620.59 20,751,279,239.90 2,368,135,762.48
(2) Presentation of short-term benefits
In RMB
Item Opening balance Increase Decrease Closing balance
239
Luxshare Precision Industry Co., Ltd. Annual Report 2022
1. Salary, bonus, 2,011,446,943.53 18,001,615,401.71 17,709,719,984.35 2,303,342,360.89
allowance and subsidy
2. Employee welfare 1,061,972.00 112,391,361.90 106,938,101.70 6,515,232.20
3. Social insurance 34,091,385.81 521,891,673.23 534,837,322.90 21,145,736.14
premium
Including: Medical 28,709,658.30 447,054,103.38 456,900,466.05 18,863,295.63
insurance premium
Employment injury 2,635,942.92 35,769,002.12 37,072,778.73 1,332,166.31
insurance premium
Maternity insurance 2,745,784.59 39,068,567.73 40,864,078.12 950,274.20
premium
4. Housing provident 5,723,968.80 299,408,299.69 300,106,036.40 5,026,232.09
fund
5. Trade union funds and 1,430,031.74 20,908,576.88 19,333,264.16 3,005,344.46
staff education funds
6. Other short-term 3,538,671.75 930,854,541.06 931,383,975.32 3,009,237.49
benefits
Total 2,057,292,973.63 19,887,069,854.47 19,602,318,684.83 2,342,044,143.27
(3) Presentation of defined contribution plan
In RMB
Item Opening balance Increase Decrease Closing balance
1. Basic endowment 41,094,737.10 1,054,902,480.73 1,070,684,043.93 25,313,173.90
insurance premium
2. Unemployment 1,317,652.60 31,891,812.27 32,491,519.56 717,945.31
insurance premium
Total 42,412,389.70 1,086,794,293.00 1,103,175,563.49 26,031,119.21
Other descriptions:
29. Taxes payable
In RMB
Item Closing balance Opening balance
Value added tax 178,562,778.85 91,182,205.54
Enterprise income tax 357,553,487.54 289,614,289.13
Individual income tax 60,744,264.97 76,622,641.75
Urban maintenance and construction tax 54,221,444.33 29,252,309.25
240
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Property tax 26,963,503.04 23,068,002.63
Education surcharges 32,686,140.44 17,112,381.32
Local education surcharges 21,777,325.55 11,090,231.72
Land use tax 2,338,741.28 4,341,775.20
Stamp duty 48,783,498.15 10,097,139.66
Disability insurance 49,582,574.67 50,292,555.43
Others 8,171,415.10 13,366,064.65
Total 841,385,173.92 616,039,596.28
Other descriptions:
30. Other payables
In RMB
Item Closing balance Opening balance
Dividends payable 15,089,486.78
Other payables 457,790,709.70 382,391,106.17
Total 472,880,196.48 382,391,106.17
(1) Interest payable
In RMB
Item Closing balance Opening balance
Significant overdue but unpaid interest:
In RMB
Borrower Overdue amount Reasons for overdue
Other descriptions:
(2) Dividends payable
In RMB
Item Closing balance Opening balance
Dividends of ordinary shares 15,089,486.78
Total 15,089,486.78
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.
241
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(3) Other payables
1) Presentation of other payables by nature
In RMB
Item Closing balance Opening balance
Within 1 year 437,302,630.87 345,015,789.15
1 -2 years 3,828,361.57 17,196,648.52
2 -3 years 11,160,503.01 14,409,891.93
Over 3 years 5,499,214.25 5,768,776.57
Total 457,790,709.70 382,391,106.17
2) Other significant payables with aging over 1 year
In RMB
Reasons for non-payment or carrying
Item Closing balance
forward
Other descriptions:
31. Non-current liabilities due within one year
In RMB
Item Closing balance Opening balance
Long-term borrowings due within one year 828,839,225.82 157,786,550.24
Bonds payable due within one year 224,130,860.43
Lease liabilities due within one year 179,282,344.89 112,293,039.92
Total 1,232,252,431.14 270,079,590.16
Other descriptions:
32. Other current liabilities
In RMB
Item Closing balance Opening balance
Short-term bonds payable 3,840,115,068.49 1,607,038,444.45
Payable for purchase returns 38,288,770.18 21,715,597.38
Entrusted loans 1,971,219,540.97
Output VAT to be levied 68,866,600.31 18,605,890.19
Others 9,766,686.26 4,843,599.88
242
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Total 3,957,037,125.24 3,623,423,072.87
Increase and decrease in short-term bonds payable:
In RMB
Interest
Amou Amortization Current
Face Bond Opening Current accrued Closing
Bond name Issue date nt of of premium repayme
value maturity balance issue at face balance
issue and discount nt
value
Short-term 800,0
October 270 804,733, 804,733,
bonds 00,00
22, 2021 days 333.34 333.34
payable 0.00
Short-term 400,0
November 401,265, 401,265,
bonds 90 days 00,00
17, 2021 000.00 000.00
payable 0.00
Short-term 400,0
November 401,040, 401,040,
bonds 90 days 00,00
25, 2021 111.11 111.11
payable 0.00
Short-term 800,0
April 24, 178 800,000 10,363, 810,363,
bonds 00,00
2022 days ,000.00 555.56 555.56
payable 0.00
Short-term 500,0
May 25, 180 500,000 5,500,0 505,500,
bonds 00,00
2022 days ,000.00 00.00 000.00
payable 0.00
Short-term 500,0
May 30, 178 500,000 5,315,2 505,315,
bonds 00,00
2022 days ,000.00 77.78 277.78
payable 0.00
Short-term 1,000, 1,000,0 1,012,9
June 15, 270 12,953,
bonds 000,0 00,000. 53,424.
2022 days 424.66
payable 00.00 00 66
Short-term 1,000, 1,000,0
June 23, 180 10,750, 1,010,75
bonds 000,0 00,000.
2022 days 000.00 0,000.00
payable 00.00 00
Short-term 1,200, 1,200,0 1,212,2
July 14, 270 12,223,
bonds 000,0 00,000. 23,561.
2022 days 561.64
payable 00.00 00 64
Short-term 800,0
July 21, 270 800,000 7,633,9 807,633
bonds 00,00
2022 days ,000.00 72.60 ,972.60
payable 0.00
Short-term 800,0
July 28, 270 800,000 7,304,1 807,304
bonds 00,00
2022 days ,000.00 09.59 ,109.59
payable 0.00
8,200, 6,600,0 3,840,1
1,607,03 72,043, 4,438,96
Total 000,0 00,000. 15,068.
8,444.45 901.83 7,277.79
00.00 00 49
Other descriptions:
243
Luxshare Precision Industry Co., Ltd. Annual Report 2022
33. Long-term borrowings
(1) Classification of long-term borrowings
In RMB
Item Closing balance Opening balance
Pledge loans 3,163,203,834.77 1,665,503,349.06
Mortgage loans 1,992,850,059.15 2,252,543,585.32
Guaranteed loans 791,766,506.32 72,759,492.87
Credit loans 3,257,492,660.70 1,034,289,765.84
Total 9,205,313,060.94 5,025,096,193.09
Descriptions on classification of long-term borrowings:
Other descriptions, including interest rate range:
34. Bonds payable
(1) Bonds payable
In RMB
Item Closing balance Opening balance
Convertible bonds 2,689,623,546.98 2,805,785,000.04
Total 2,689,623,546.98 2,805,785,000.04
(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
Face Bond Amount Opening Current Other Closing
Bond name Issue date accrued at premium repaymen quity
value maturity of issue balance issue changes balance
face value and t changes
discount
Convertible 3,000,000 2,581,553 6,500,000 107,749,2 6,000,000 178,801.5 2,689,623
3,000,000 Novembe
bonds of 6 years ,000.00 ,066.25 .00 82.26 .00 3 ,546.98
,000.00 r 3, 2020
Luxshare
Convertible 230,100,0 224,231,9 -224,231,
230,100,0 March 10,
bonds of 3 years 00.00 33.79 933.79
00.00 2021
SpeedTech
3,230,100 2,805,785 6,500,000 107,749,2 6,000,000 178,801.5 -224,231, 2,689,623
Total --
,000.00 ,000.04 .00 82.26 .00 3 933.79 ,546.98
244
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(3) Descriptions on conditions and time for conversion of convertible bonds
The conversion period of the convertible bonds of Luxshare 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 9, 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:
35. Lease liabilities
In RMB
Item Closing balance Opening balance
Lease payment 863,481,119.65 336,593,292.75
Unrecognized financing costs -62,742,078.14 -21,499,809.20
Total 800,739,041.51 315,093,483.55
Other descriptions:
36. Provisions
In RMB
Item Closing balance Opening balance Reason
Product quality warranty 682,513.39 923,738.96
Total 682,513.39 923,738.96
Other descriptions, including major assumptions and estimation descriptions related to significant provisions:
37. Deferred income
In RMB
Item Opening balance Increase Decrease Closing balance Reason
245
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Government grants 538,556,944.18 302,954,947.67 175,601,796.19 665,910,095.66
Total 538,556,944.18 302,954,947.67 175,601,796.19 665,910,095.66 --
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
technological 302,954,947. 175,058,201. Related to
527,588,880.88 655,485,626.96
transformation 67 59 asset
and industrial
upgrading
Land-related Related to
10,968,063.30 543,594.60 10,424,468.70
refund asset
Other descriptions:
38. Other non-current liabilities
In RMB
Item Closing balance Opening balance
Others 324,039.05 1,207,763.79
Total 324,039.05 1,207,763.79
Other descriptions:
39. Share capital
In RMB
Increase and decrease (+, -)
Opening Shares Closing
New shares
balance Stock dividend converted from Others Subtotal balance
issued
capital reserve
7,050,485,477. 7,099,908,647.
Total shares 49,419,433.00 3,737.00 49,423,170.00
00 00
Other descriptions:
The Company’s share capital increased by RMB49,423,170.00 in the current period, including 49,419,433 shares
exercised by the stock option incentive recipients at their sole discretion, and 3,737 shares converted from
246
Luxshare Precision Industry Co., Ltd. Annual Report 2022
convertible bonds. After the said exercise and conversion, the Company’s share capital increased to
7,099,908,647.00 shares.
40. Other equity instruments
(1) Basic information on preferred shares, perpetual bonds and other financial instruments outstanding at
the end of the period
(2) 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
Convertible 527,358,025. 38,388.10 527,319,637.
bonds 98 88
527,358,025. 38,388.10 527,319,637.
Total
98 88
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”.
Other descriptions:
41. Capital reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Capital premium (share 2,341,705,299.21 1,080,987,729.91 3,422,693,029.12
capital premium)
Other capital reserve 377,989,982.46 473,288,787.62 621,344,937.46 229,933,832.62
Total 2,719,695,281.67 1,554,276,517.53 621,344,937.46 3,652,626,861.74
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
Capital reserve - share capital premium increased by RMB1,080,987,729.91 in the current period, including an increase of
RMB517,203,037.96 from stock option exercise, a transfer of RMB621,344,937.46 from other capital reserve through stock option
exercise, a conversion of RMB213,452.63 from convertible bonds, and an increase of RMB-57,773,698.14 by other ways.
247
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Capital reserve - the increase in other capital reserve in the current period is due to the cost of share-based payment increased by
RMB473,288,787.62, and the decrease therein is due to the transfer of other capital reserve to share capital premium.
42. 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 163,165,841 154,880,3 23,301,22 131,579,0 294,744,
that cannot be reclassified into .25 11.90 0.03 91.87 933.12
profit or loss
Changes in fair value of other 163,165,841 154,880,3 23,301,22 131,579,0 294,744,
investments in equity instruments .25 11.90 0.03 91.87 933.12
II. Other comprehensive income -198,967,31 516,330,6 555,680,6 -39,350,02 356,713,
to be reclassified into profit or 2.54 67.60 95.67 8.07 383.13
loss
Translation difference of foreign -198,967,31 516,330,6 555,680,6 -39,350,02 356,713,
currency financial statements 2.54 67.60 95.67 8.07 383.13
-35,801,471. 671,210,9 23,301,22 687,259,7 -39,350,02 651,458,
Total other comprehensive income
29 79.50 0.03 87.54 8.07 316.25
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:
43. Special reserve
In RMB
Item Opening balance Increase Decrease Closing balance
248
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Safety production 1,018,784.75 5,435,469.87 4,359,375.01 2,094,879.61
expenses
Total 1,018,784.75 5,435,469.87 4,359,375.01 2,094,879.61
Other descriptions, including those on the increase and decrease for the current period and the reasons for the change:
44. Surplus reserve
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 985,161,506.61 135,911,192.22 1,121,072,698.83
Total 985,161,506.61 135,911,192.22 1,121,072,698.83
Description of surplus reserve, including those on increase and decrease for the current period and the reasons for the change:
45. Undistributed profits
In RMB
Item Current Period Prior Period
Undistributed profits at the end of prior period 24,040,637,144.00 17,996,149,257.73
before adjustment
Undistributed profits at the beginning of the 24,040,637,144.00 17,996,149,257.73
period after adjustment
Add: Net profits attributable to the owners of the 9,163,104,849.54 7,070,520,386.57
parent company in the current period
Less: Apportion to statutory surplus reserve 135,911,192.22 252,093,708.88
Common stock dividends payable 779,270,547.26 773,891,489.58
Others 143,976.84 47,301.84
Undistributed profits at the end of the period 32,288,416,277.22 24,040,637,144.00
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 common control amounted to RMB0.00.
5) The undistributed profits at the beginning of the period affected by other adjustments amounted to RMB0.00.
249
Luxshare Precision Industry Co., Ltd. Annual Report 2022
46. 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 211,943,848,653.92 186,111,713,122.60 152,257,625,983.60 133,514,500,539.03
Other business 2,084,545,637.52 1,817,167,162.78 1,688,471,806.80 1,533,835,753.85
Total 214,028,394,291.44 187,928,880,285.38 153,946,097,790.40 135,048,336,292.88
If the lower of audited nets profits including and excluding non-recurring profit or loss is negative
□ Yes No
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:
47. Taxes and surcharges
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Urban maintenance and construction tax 134,237,633.10 30,064,853.10
Education surcharges 82,084,208.17 14,616,280.44
Property tax 75,088,009.87 63,618,880.04
Land use tax 9,681,156.59 11,000,959.65
Vehicle and vessel use tax 66,685.43 80,571.50
Stamp duty 119,933,691.80 56,059,570.68
Local education surcharges 43,726,505.69 8,788,619.58
Others 11,507,549.02 9,582,322.15
Total 476,325,439.67 193,812,057.14
Other descriptions:
48. Selling expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Employee benefits 547,517,120.77 477,502,208.55
250
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Storage and lease expenses 36,541,171.64 51,915,157.63
Consumables and miscellaneous purchases 31,804,228.22 47,560,953.11
Business entertainment expenses 25,994,673.80 23,190,907.73
Depreciation and amortization 14,527,746.62 8,650,043.25
Travel expenses 13,269,371.79 7,698,136.97
Material expenditure 10,789,563.43 7,816,183.12
Transportation expenses 5,306,607.96 5,702,963.14
Consulting fees 7,002,044.68 16,189,368.41
Office expenses 1,558,957.69 1,720,255.18
Others 137,086,653.00 141,961,986.71
Total 831,398,139.60 789,908,163.80
Other descriptions:
49. General and administrative expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Personnel benefits 2,752,635,462.67 2,040,701,402.50
Depreciation and amortization 780,606,889.02 636,539,244.20
Materials and consumption 613,926,759.41 303,188,844.16
Office expenses 194,254,096.88 187,814,810.66
Repair cost, miscellaneous purchase 182,254,970.23 103,842,977.48
Water and electricity 70,926,413.34 59,194,407.97
Lease fee 65,448,985.07 54,750,988.28
Travel and transportation expenses 39,010,434.62 29,058,122.92
Other expenses 376,604,074.11 326,817,985.33
Total 5,075,668,085.35 3,741,908,783.50
Other descriptions:
50. R&D expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Personnel benefits 4,296,689,104.43 3,240,607,062.66
Mould and material cost 1,659,569,732.34 1,372,424,795.60
Depreciation and amortization 894,098,153.77 553,276,292.48
251
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Consumables and miscellaneous 564,831,528.23 503,901,794.70
Repair and inspection 341,779,541.87 380,055,319.93
Service fees 225,595,394.86 119,031,894.75
Water and electricity 132,921,844.25 81,400,086.54
Lease fee 64,081,121.07 61,161,176.98
Transportation and travel expenses 35,267,611.83 31,528,985.33
Commercial insurance 3,153,481.73 2,078,437.06
Other expenses 229,051,431.83 296,834,556.71
Total 8,447,038,946.21 6,642,300,402.74
Other descriptions:
51. Financial expenses
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Interest expenses 1,038,070,641.24 656,411,767.86
Including: interest cost of lease liabilities 44,537,265.44 30,548,145.32
Less: Interest income 504,344,274.59 361,773,700.27
Foreign exchange gains or losses 337,513,015.17 225,950,789.85
Others 11,481,756.95 34,077,016.61
Total 882,721,138.77 554,665,874.05
Other descriptions:
52. Other incomes
In RMB
Sources of other incomes Amount recognized in the current period Amount recognized in the prior period
Financial rewards, subsidies and support
194,187,224.32 432,884,582.96
funds
Rewards for exports 44,911,446.82 95,287,694.56
Tax refunds 120,151,750.10 117,703,573.64
Special funds for technological
175,058,201.59 85,648,103.23
transformation and industrial upgrading
Funds for supporting development of
25,189,490.01 76,001,699.27
enterprises
Research and development grants 5,870,199.99 6,807,292.00
Grants for maintaining job position 19,791,620.85 23,714,082.26
252
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Patent grants 842,000.00 1,177,400.00
Land-related refund 543,594.60 543,594.60
Others 15,748,735.62 13,774,142.85
Total 602,294,263.90 853,542,165.37
53. Investment income
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Long-term equity investment income 794,759,492.42 29,737,321.95
accounted for using the equity method
Investment income from disposal of long-term 22,800,675.95 581,347.34
equity investment
Investment income from disposal of 525,062,938.11 706,688,280.62
held-for-trading financial assets
Dividends from other equity instrument 212,413.30
investments during holding period
Gains from remeasurement of remaining 583,884.90
equities at fair value after loss of control
Investment income from disposal of disposal 15,975,338.43
groups constituting business
Gains from derecognition of financial assets -400,156,146.02 -171,521,013.80
measured at amortized cost.
Income from wealth management 55,598,985.01 107,341,490.30
Total 998,278,358.77 689,386,649.74
Other descriptions:
54. 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 13,625,720.11 -115,737,751.66
Including: Income from changes in fair 13,625,720.11 -115,737,751.66
value of derivative financial instruments
Total 13,625,720.11 -115,737,751.66
Other descriptions:
253
Luxshare Precision Industry Co., Ltd. Annual Report 2022
55. Impairment losses of credit
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Bad debt loss of other receivables -941,685.43 -2,046,557.86
Bad debt loss of notes receivable -297,668.79 -3,247.78
Bad debt loss of accounts receivable -45,942,584.71 -24,825,699.05
Total -47,181,938.93 -26,875,504.69
Other descriptions:
56. 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 -613,236,634.12 -158,892,591.11
impairment loss of contract performance
cost
V. Impairment loss of fixed assets -233,585,496.93 -3,897,744.01
Total -846,822,131.05 -162,790,335.12
Other descriptions:
57. 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 44,833,504.83 -45,249,998.44
Loss on disposal of intangible assets -10,551.92 -16,594.21
Income from disposal of right-of-use assets 3,108,576.72
58. 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 current period
Income from compensation for 16,376,930.09 1,860,909.33 16,376,930.09
breach of contract
Income from asset retirement 5,538,035.76 1,339,094.50 5,538,035.76
Income from insurance 622,245.83
254
Luxshare Precision Industry Co., Ltd. Annual Report 2022
indemnity
Others 12,397,333.89 17,274,286.94 12,397,333.89
Total 34,312,299.74 21,096,536.60 34,312,299.74
Government grants included in current profit or loss:
In RMB
Whether the
subsidy Amount Amount
Whether it is
Reasons for Nature and affects the recognized in recognized in Related to
Grant item Granter a special
grant type profit or loss the current the prior asset/ income
grant
of the current period period
year
Other descriptions:
59. 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 current period
External donation 1,279,333.00 1,573,490.75 1,279,333.00
Asset retirement loss 13,071,784.99 19,504,908.68 13,071,784.99
Compensation, liquidated 6,424,974.87 17,481,196.86 6,424,974.87
damages and fines
Others 10,029,281.47 7,112,837.76 10,029,281.47
Total 30,805,374.33 45,672,434.05 30,805,374.33
Other descriptions:
60. 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 657,866,108.46 607,416,066.01
Deferred income tax expense 9,452,096.88 -285,177,422.37
Total 667,318,205.34 322,238,643.64
(2) Reconciliation of income tax expenses to the accounting profit
In RMB
255
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Item Amount recognized in the current period
Total profits 11,157,994,984.30
Income tax expense calculated based on statutory/applicable tax 1,673,699,247.65
rate
Effect of different tax rates of subsidiaries operating in other -77,877,002.82
jurisdictions
Effect of adjustment on income tax for prior period 9,002,683.75
Effect of non-taxable income -33,677,472.97
Effect of non-deductible cost, expense and loss 18,127,989.80
Effect of utilizing deductible loss not recognized for deferred tax -137,784,091.60
assets for prior period
Effect of deductible temporary difference or deductible loss not 199,368,193.99
recognized for deferred tax assets for the current period
Change in the balance of opening deferred tax assets/liabilities 19,976,797.47
caused by tax rate adjustment
Additional deduction of R&D expenses (presented in negative) -832,780,768.26
Difference from exercise of stock option -158,078,372.20
Additional deduction of expenses used for disable persons -6,613,441.45
Others -6,045,558.02
Income tax expenses 667,318,205.34
Other descriptions:
61. Other comprehensive income
Please refer to Note VII, (42) Other comprehensive income.
62. 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 729,647,415.38 941,612,664.44
Lease income 30,878,939.74 83,010,927.51
Interest income 504,344,274.59 361,773,700.27
Non-operating income 28,383,594.53 19,499,157.07
Recovery of current accounts and 1,388,046,955.47 1,240,625,072.70
disbursements
256
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Total 2,681,301,179.71 2,646,521,521.99
Descriptions on other cash received related to operating activities:
(2) Other cash paid related to operating activities
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Selling expenses 263,930,838.26 272,687,431.13
General and administrative expenses 1,414,021,613.64 836,627,173.21
R&D expenses 984,376,384.20 983,858,805.26
Non-operating expenses 17,733,589.34 9,538,603.31
Inter-company transactions 1,234,314,047.35 239,332,761.28
Handling charges 11,481,756.95 34,077,016.62
Transferred to restricted funds 1,000,000,000.00
Others 14,883,864.59
Total 4,925,858,229.74 2,391,005,655.40
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
Net cash received to acquire subsidiaries 4,665,590,364.12
Reversal of restricted funds 715,017,358.71
Recovery of suppliers’ borrowings 30,000,000.00
Total 745,017,358.71 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
Transferred to restricted funds 427,650,270.00
Income tax levied on equity transactions 371,929,911.39
Suppliers’ borrowings 30,000,000.00
Net cash paid for disposal of subsidiaries 385,253.59
Others 1,208,914.50
257
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Total 428,035,523.59 403,138,825.89
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 6,600,000,000.00 3,799,202,739.72
Convertible bonds 228,949,500.00
Taxes withheld from shareholder for 921,511,778.98 671,813,299.36
reduction of shares
Other 5,960,996.25 5,965,056.90
Total 7,527,472,775.23 4,705,930,595.98
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 4,400,000,000.00 2,700,000,000.00
Borrowings returned to minority 1,953,239,500.00
shareholders
Taxes prepaid for shareholder for reduction 921,511,778.98 671,813,299.36
of shares
Transferred to restricted funds 700,123,698.63
Lease fee 159,062,113.35 82,320,708.73
Financing charges 4,184,658.23 7,388,317.66
Total 8,138,121,749.19 3,461,522,325.75
Descriptions on other cash paid related to financing activities:
63. 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:
258
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Net profits 10,490,676,778.96 7,820,610,306.19
Add: Provision for impairment of assets 894,004,069.98 189,665,839.81
Depreciation of fixed assets, depletion of oil 7,233,705,585.39 4,822,202,794.73
and gas assets, depreciation of bearer
biological assets
Depreciation of right of use assets 168,866,435.84 105,949,651.47
Amortization of intangible assets 170,869,522.76 119,810,187.02
Amortization of Long-term deferred 395,513,128.13 246,064,358.16
expenses
Loss from disposal of fixed assets, intangible -47,931,529.63 45,266,592.65
assets and other long-term assets (“-” means
income)
Loss from fixed assets retirement (“-” means 7,533,749.23 18,165,814.18
income)
Loss from changes in fair value (“-” means -13,625,720.11 115,737,751.66
income)
Financial expenses (“-” means income) 1,038,070,641.24 656,411,767.86
Investment loss (“-” means income) -998,278,358.77 -689,386,649.74
Decrease in deferred income tax assets (“-” -316,866,043.97 -365,926,458.23
means increase)
Increase in deferred tax liabilities (“-” means 326,646,031.03 306,000,254.91
decrease)
Decrease in inventories (“-” means increase) -15,791,020,357.63 -5,400,711,336.99
Decrease in operating receivables (“-” means 6,415,757,847.29 -13,885,780,461.98
increase)
Increase in operating accounts payable (“-” 2,753,688,539.60 13,180,686,505.30
means decrease)
Other
Net cash flow from operating activities 12,727,610,319.34 7,284,766,917.00
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 17,312,418,429.51 8,921,536,728.08
259
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Less: Opening balance of cash 8,921,536,728.08 10,464,804,451.34
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 8,390,881,701.43 -1,543,267,723.26
(2) Net cash paid to acquire subsidiaries for the current period
In RMB
Amount
Cash or cash equivalents paid in current period for business 1,166,251,440.00
combination incurred in current period
Including:
TIME Interconnect Technology Limited 900,157,440.00
Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd. 10,000.00
Shenzhen Huarong Technology Co., Ltd. 266,084,000.00
Less: Cash and cash equivalents held by subsidiaries at the date of 204,435,212.85
purchase
Including:
TIME Interconnect Technology Limited 178,633,596.51
Shenzhen Huarong Technology Co., Ltd. 25,801,616.34
Including:
Net cash paid to acquire subsidiaries 961,816,227.15
Other descriptions:
The cash received from the disposal of subsidiaries was less than the cash and cash equivalents held by them, so the negative amount
was reclassified to other cash paid 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 180,111.14
the current period
Including:
Suk Plastic Romania 180,111.14
Less: Cash and cash equivalents held by subsidiaries on the date of 565,364.73
loss of control
Including:
260
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Suk Plastic Romania 565,364.73
Including:
Net cash received from disposal of subsidiaries -385,253.59
Other descriptions:
The cash received from the disposal of subsidiaries was less than the cash and cash equivalents held by them, so the negative amount
was reclassified to other cash paid related to investing activities.
(4) Composition of cash and cash equivalents
In RMB
Item Closing balance Opening balance
I. Cash 17,312,418,429.51 8,921,536,728.08
Including: Cash on hand 1,236,553.93 323,716.04
Bank deposits available for payment at any 17,311,181,875.58 8,921,213,012.04
time
III. Closing balance of cash and cash 17,312,418,429.51 8,921,536,728.08
equivalents
Other descriptions:
64. Assets with restricted ownership or right of use
In RMB
Item Closing book value Reasons for restriction
Cash and bank balances 2,054,791,011.90 Issue of notes and letter of credit
Notes receivable 469,338,331.89 Financing from pledge of notes receivable
Fixed assets 1,596,425,969.25 Financing from mortgage of fixed assets
547,767,902.77 Financing from mortgage of land use
Intangible assets
rights
1,049,804,176.80 Financing from pledge of accounts
Accounts receivable
receivable
Equity investment 5,781,943,543.70 Financing from pledge of equity
60,000,000.00 Financing from pledge of held-for-trading
Held-for-trading financial assets
financial assets
Total 11,560,070,936.31 --
Other descriptions:
261
Luxshare Precision Industry Co., Ltd. Annual Report 2022
65. 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 8,024,778,166.97
Including: USD 1,001,337,256.38 6.9646 6,973,913,455.75
EUR 5,213,545.53 7.4229 38,699,627.11
HKD 48,187,552.88 0.8933 43,044,495.36
JPY 171,810,767.41 0.0524 8,995,668.16
TWD 3,532,599,463.00 0.2273 802,959,857.94
VND 336,245,097,225.04 0.0003 99,360,426.23
KRW 2,032,258,022.81 0.0055 11,224,161.06
GBP 122,213.29 8.3941 1,025,870.57
INR 476,407,155.02 0.0842 40,103,954.31
SGD 1,051,619.78 5.1831 5,450,650.48
Accounts receivable 18,297,167,418.98
Including: USD 2,542,999,667.96 6.9646 17,710,975,487.44
EUR 113,457.84 7.4229 842,186.20
HKD 301,587,575.46 0.8933 269,399,133.53
JPY 19,813,065.05 0.0524 1,037,372.46
TWD 1,257,678,913.51 0.2273 285,870,417.04
VND 98,260,997,563.45 0.0003 29,036,124.78
KRW 832,699.62 0.0055 4,599.00
GBP 250.00 8.3941 2,098.53
Long-term borrowings 1,119,481,616.38
Including: USD 100,000,000.00 6.9646 696,460,000.00
EUR
HKD 32,444,444.32 0.8933 28,981,648.78
TWD 1,434,731,364.01 0.2273 326,114,439.04
VND 229,866,424,906.94 0.0003 67,925,528.56
Other receivables 211,772,380.15
262
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Including: USD 10,416,412.04 6.9646 72,546,143.27
EUR 1,300.00 7.4229 9,649.77
HKD 4,302,163.03 0.8933 3,842,993.17
JPY 14,481,256.16 0.0524 758,209.61
TWD 577,333,102.24 0.2273 131,227,814.14
VND 6,981,163,045.69 0.0003 2,062,933.68
KRW 95,137,620.86 0.0055 525,445.08
GBP 1,015.00 8.3941 8,520.01
INR 9,392,627.94 0.0842 790,671.42
Short-term borrowings 2,254,776,236.03
Including: USD 130,697,482.01 6.9646 910,255,683.21
HKD 60,565,066.72 0.8933 54,100,957.15
TWD 2,888,726,511.00 0.2273 656,607,535.95
VND 2,144,880,066,734.35 0.0003 633,812,059.72
Accounts payable 27,400,909,629.02
Including: USD 3,679,662,314.25 6.9646 25,627,376,153.81
EUR 1,199,889.73 7.4229 8,906,661.47
HKD 125,576,008.58 0.8933 112,173,281.18
JPY 109,545,506.13 0.0524 5,735,583.61
TWD 2,888,846,223.58 0.2273 656,634,746.62
VND 3,310,039,960,372.25 0.0003 978,116,808.29
KRW 140,552,120.22 0.0055 776,269.36
GBP 2,009.00 8.3941 16,863.75
INR 132,730,588.38 0.0842 11,173,260.93
Other payables 300,420,511.81
Including: USD 9,399,255.09 6.9646 65,462,051.99
HKD 31,923,186.52 0.8933 28,516,024.82
JPY 8,411,806.03 0.0524 440,425.34
TWD 874,416,628.99 0.2273 198,754,899.77
VND 21,351,772,825.72 0.0003 6,309,448.87
GBP 108,760.00 8.3941 912,942.32
263
Luxshare Precision Industry Co., Ltd. Annual Report 2022
INR 293,641.01 0.0842 24,718.70
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
Significant overseas business Main place of Functional Basis of choice of Functional currency changed
entities business currency functional currency or not?
The lawful currency of
Luxshare-ICT (Vietnam) Limited Vietnam VND the country of No
incorporation
The lawful currency of
Luxshare-ICT (Van Trung)
Vietnam VND the country of No
Company Limited
incorporation
The lawful currency of
Luxshare-ICT (Nghe An) Limited Vietnam VND the country of No
incorporation
66. Government grants
(1) Basic information of government grants
In RMB
Amount included in current
Category Amount Presentation item
profit or loss
Special funds for
technological transformation 655,485,626.97 Deferred income 175,058,201.59
and industrial upgrading
Land-related refund 10,424,468.70 Deferred income 543,594.60
Financial rewards, subsidies
194,187,224.32 Other gains 194,187,224.32
and support funds
Rewards for exports 44,911,446.82 Other gains 44,911,446.82
Tax refunds 120,151,750.10 Other gains 120,151,750.10
Funds for supporting
25,189,490.01 Other gains 25,189,490.01
development of enterprises
Research and development
5,870,199.99 Other gains 5,870,199.99
grants
Grants for maintaining job
19,791,620.85 Other gains 19,791,620.85
position
Patent grants 842,000.00 Other gains 842,000.00
Others 15,748,735.62 Other gains 15,748,735.62
264
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(2) Return of government grants
□ Applicable N/A
Other descriptions:
67. Others
None
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
TIME March 25, 900,157,440. 70.92% March 25, 4,623,757,73 151,274,015.
Interconnect 2022 00 Cash 2022 Obtainment 4.84 05
Technology acquisition of control
Limited
Shenzhen April 21, 266,084,000. 76.02% April 21, 2,426,984,55 -5,881,980.02
Huarong 2022 00 Cash 2023 Obtainment 6.96
Technology acquisition of control
Co., Ltd.
Other descriptions:
(2) Combination costs and goodwill
In RMB
Combination costs TIME Interconnect Technology Limited Shenzhen Huarong Technology Co., Ltd.
--Cash 900,157,440.00 266,084,000.00
-- Fair value of non-cash 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
265
Luxshare Precision Industry Co., Ltd. Annual Report 2022
the acquisition date at the acquisition
date
-- Others -10,622.26
Total of combination costs 900,157,440.00 266,073,377.74
Less: share of fair value of identifiable
724,488,382.98 109,059,753.24
net assets acquired
Amount of goodwill/combination costs
less than the share of fair value of 175,669,057.02 157,013,624.50
identifiable net assets acquired
Descriptions on methods for determining the fair value of combination costs, contingent considerations and changes therein:
“Others” refers to net assets other than the long-term equity investments in Huarong Technology by Shenzhen Sanhe Rongyu
Technology Co., Ltd. (“Sanhe Rongyu”) wholly acquired in a package deal, with the aim to acquire 7.168% equity interest of Sanyu
Rongyu in Huarong Technology.
Main reasons for the formation of large goodwill:
Other descriptions:
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
In RMB
TIME Interconnect Technology Limited Shenzhen Huarong Technology Co., Ltd.
Fair value at Book value at Fair value at Book value at
acquisition date acquisition date acquisition date acquisition date
Assets: 2,688,813,576.37 2,274,493,260.48 1,144,497,110.25 1,124,715,211.29
Cash and bank
183,285,688.90 183,285,688.90 25,792,868.85 25,792,868.85
balances
Accounts receivable 794,302,721.04 794,302,721.04 478,729,566.45 478,729,566.45
Inventories 545,384,926.94 545,384,926.94 126,552,977.25 126,168,458.94
Fixed assets 721,375,445.09 491,994,613.13 229,476,190.95 216,197,846.25
Intangible assets 261,642,422.38 76,702,938.45 64,697,562.83 58,578,526.88
Prepayments 16,503,852.27 16,503,852.27 2,641,904.56 2,641,904.56
Other assets 166,318,519.75 166,318,519.75 216,606,039.36 216,606,039.36
Liabilities: 1,658,493,449.95 1,658,493,449.95 1,001,042,736.32 998,075,451.48
Borrowings 867,342,359.14 867,342,359.14 161,071,049.85 161,071,049.85
Accounts payable 606,469,411.07 606,469,411.07 567,683,300.18 567,683,300.18
Deferred tax liabilities 453,913.46 453,913.46 2,967,284.84
Other payables 33,802,529.72 33,802,529.72 4,715,632.24 4,715,632.24
Other liabilities 150,425,236.56 150,425,236.56 264,605,469.21 264,605,469.21
Net assets 1,030,320,126.42 615,999,810.53 143,454,373.93 126,639,759.81
Less: minority interest 305,831,743.44 179,132,744.90 34,394,620.69 30,363,148.81
Net assets acquired 724,488,382.98 436,867,065.63 109,059,753.24 96,276,611.00
Methods for determining the fair value of identifiable assets and liabilities:
Contingent liabilities of the acquiree in business combination:
Other descriptions:
266
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(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
(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
Dachuang
Controlled by
Precision
the same
Intelligent March 25, Obtainment
100.00% ultimate
Manufacture 2022 of control
controlling
(Kunshan)
party
Co., Ltd.
Other descriptions:
(2) Combination costs
In RMB
Combination costs Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd.
--Cash 10,000.00
-- Book value of non-cash assets
-- Book value of issued and assumed liabilities
-- Par value of issued equity securities
-- Contingent consideration
267
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
Dachuang Precision Intelligent Manufacture (Kunshan) Co., Ltd.
Combination date End of prior period
Assets: 9,984,313.60
Cash and bank balances
Accounts receivable
Inventories
Fixed assets
Intangible assets
Construction in progress 9,984,313.60
Liabilities: 9,984,313.60
Borrowings
Accounts payable 9,984,313.60
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
Whether there is any situation where single disposal of investments in subsidiaries means the loss of control
Yes □ No
In RMB
Time Basis for Differen Proporti Book Fair Gain or Determinati Amount of other
Name of Equity Equity Equity
point of determin ce on of value of value of loss from on method comprehensive
subsidiar disposal disposal disposal
losing ing the between residual the residual re-measu and main income related
y price ratio method
control time the equity on residual equity on rement assumption to equity
268
Luxshare Precision Industry Co., Ltd. Annual Report 2022
point of disposal the date equity on the date of for fair investment of
losing price and of losing the date of losing residual value of the subsidiary
control the share control of losing control equity at residual transferred into
of net control fair equity on investment
assets of value the date of profit or loss
the losing
subsidiar control
y at the
consolid
ated
financial
statemen
t level
correspo
nding to
the
disposal
of
investme
nt
Suk 180,111. 100.00% Change
January 22,800,6
Plastic 14 Sold of equity
1, 2022 75.95
Romania shares
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 2022 are stated as follows:
Company Date of establishment
TIME Interconnect Server Technology Co., Ltd. April 26, 2022
Dachuang Precision Intelligent Manufacture (Dongguan) Co., Ltd. February 18, 2022
LUXSHARE PRECISION SINGAPORE PTE.LTD. February 25, 2022
Luxshare Precision Industry (Hefei) Co., Ltd. June 16, 2022
Luxshare Precision Industry (Hubei) Co., Ltd. January 6, 2022
269
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxshare Automotive Technology (Shanghai) Co., Ltd. June 9, 2022
Luxshare Precision Industry (Wuhu) Co., Ltd. January 28, 2022
Luxshare New Energy (Anhui) Co., Ltd. April 20, 2022
Luxshare Electronic Service (Zhejiang) Co., Ltd. July 13, 2022
Luxshare Rechuan Technology (Huizhou) Co., Ltd. February 25, 2022
Shantou Luxshare Technologies Co., Ltd. June 16, 2022
Fengshun Luxshare Intelligent Manufacture Co., Ltd. May 31, 2022
Luxshare Precision Industry (Mingguang) Co., Ltd. August 10, 2022
Jiashan Luxshare Business Management Service Partnership (LP) July 18, 2022
Jiashan Luxshare Intelligent Equipment Co., Ltd. December 9, 2022
Huiju Dachuang Information (Shanghai) Co., Ltd. July 26, 2022
Lisen Precision Technology (Kunshan) Co., Ltd. June 1, 2022
Luxcase Precision Technology (Kunshan) Co., Ltd. November 1, 2022
Speedtech Intelligence Co., Ltd. March 29, 2022
There was no change in scope of combination caused by cancellation of subsidies in 2022.
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
Luxshare-ICT Marketing
Dutch Dutch 100.00% Establishment
International B.V. business
Luxshare
Hong Kong Hong Kong Trade 100.00% Establishment
Precision Limited
Yunding Investment
Hong Kong Hong Kong 100.00% Establishment
Technology Co., consulting
270
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd.
Business
combination
Huzhou Jiuding
Processing and involving
Electronic Co., Huzhou Huzhou 100.00%
manufacturing enterprises not
Ltd.
under common
control
LUXSHARE-IC Marketing
Japan Japan 80.00 % Establishment
T Japan Ltd. business
Korea
Marketing
LuxshareICT Co., Korea Korea 100.00% Establishment
business
Ltd
Luxshare India Processing and
Indian Chennai 100.00% Establishment
Private Limited manufacturing
Luxshare
Precision Investment
Hong Kong Hong Kong 100.00% Establishment
Investment Co., consulting
Ltd.
Luxis Technology Investment
Hong Kong Hong Kong 100.00% Establishment
Limited consulting
Luxshare Liantao Processing and
Indian Indian 100.00% Establishment
(India) Co., Ltd. manufacturing
Business
TIME combination
Interconnect Investment involving
Hong Kong Hong Kong 70.95%
Technology consulting enterprises not
Limited under common
control
Business
combination
Huaxun Cable Investment involving
BVI BVI 70.95%
Co., Ltd. consulting enterprises not
under common
control
Business
combination
Linkz
involving
International Hong Kong Hong Kong Trade 70.95%
enterprises not
Limited
under common
control
Business
Huaxun combination
Industrial Processing and involving
Suzhou Suzhou 70.95%
(Suzhou) Co., manufacturing enterprises not
Ltd. under common
control
Business
combination
Huaxun Hong Investment involving
Hong Kong Hong Kong 70.95%
Kong Limited consulting enterprises not
under common
control
Lingxun Wire Shanghai Shanghai Processing and 67.40% Business
271
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Industry manufacturing combination
(Shanghai) Co., involving
Ltd. enterprises not
under common
control
Business
combination
Haohe
Investment involving
Manufacturing Hong Kong Hong Kong 70.95%
consulting enterprises not
Co., Ltd.
under common
control
Business
combination
Haohe (Kunshan)
Processing and involving
Electronic Kunshan Kunshan 70.95%
manufacturing enterprises not
Material Co., Ltd.
under common
control
Business
combination
Kunshan Deqin
Processing and involving
Machinery Co., Kunshan Kunshan 70.95%
manufacturing enterprises not
Ltd.
under common
control
Business
Time combination
Interconnect Investment involving
BVI BVI 70.95%
Inverstment consulting enterprises not
Limted under common
control
Business
combination
TIME
Investment involving
Interconnect Hong Kong Hong Kong 70.95%
consulting enterprises not
(HK) Limited
under common
control
Business
TIME
combination
Interconnect
Processing and involving
Technology Huizhou Huizhou 70.95%
manufacturing enterprises not
(Huizhou)
under common
Limited
control
Business
TIME combination
Interconnect involving
Hong Kong Hong Kong Trade 70.95%
Industrial Co., enterprises not
Ltd. under common
control
Business
TIME
combination
Interconnect
involving
Wiring Hong Kong Hong Kong Trade 70.95%
enterprises not
Technology Co.,
under common
Ltd.
control
Huizhou Huizhou Huizhou Processing and 70.95% Business
272
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Chuangxiang manufacturing combination
Technology Co., involving
Ltd. enterprises not
under common
control
Business
Huiju Robot combination
Technology Processing and involving
Shanghai Shanghai 70.95%
(Shanghai) Co., manufacturing enterprises not
Ltd. under common
control
Business
Huizhi Software combination
Technology Processing and involving
Huizhou Huizhou 70.95%
(Huizhou) Co., manufacturing enterprises not
Ltd. under common
control
TIME Business
Interconnect combination
Wiring Processing and involving
Huizhou Huizhou 70.95%
Technology manufacturing enterprises not
(Huizhou) Co., under common
Ltd. control
Business
TIME
combination
Interconnect
involving
Server Hong Kong Hong Kong Trade 70.95%
enterprises not
Technology Co.,
under common
Ltd.
control
Dachuang
Precision
Intelligent Processing and
Dongguan Dongguan 70.95% Establishment
Manufacture manufacturing
(Dongguan) Co.,
Ltd.
Dachuang Business
Precision combination
Intelligent Processing and involving
Kunshan Kunshan 70.95%
Manufacture manufacturing enterprises not
(Kunshan) Co., under common
Ltd. control
Huiju Dachuang
Information Processing and
Shanghai Shanghai 70.95% Establishment
(Shanghai) Co., manufacturing
Ltd.
Singapore
Marketing
Luxshare Co., Singapore Singapore 100.00% Establishment
business
Ltd.
Business
combination
ICT-LANTO involving
Hong Kong Hong Kong Trade 100.00%
LIMITED (HK) enterprises not
under common
control
273
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Business
combination
Processing and involving
SpeedTech Corp. Taiwan Taiwan 31.47%
manufacturing enterprises not
under common
control
Business
combination
Processing and involving
Castle Rock, Inc. Taiwan Xinbei City 12.59 %
manufacturing enterprises not
under common
control
Business
combination
Cyber Acoustics, Processing and involving
Taiwan Taiwan 22.03%
LLC (USA) manufacturing enterprises not
under common
control
Business
combination
Caldigit Holding Processing and involving
Taiwan Taiwan 12.59%
Limited manufacturing enterprises not
under common
control
Business
combination
Taiqiao
Investment involving
Investment Co., Taiwan Taiwan 31.47%
consulting enterprises not
Ltd.
under common
control
Business
combination
Taihan Precision Processing and involving
Taiwan Taiwan 9.22%
Co., Ltd. manufacturing enterprises not
under common
control
Luxshare-ICT
Processing and
(Vietnam) Vietnam Vietnam 100.00% Establishment
manufacturing
Limited
Luxshare-ICT
(Van Trung) Processing and
Vietnam Vietnam 100.00% Establishment
Company manufacturing
Limited
Luxshare-ICT
Processing and
(Nghe An) Vietnam Vietnam 100.00% Establishment
manufacturing
Limited
Kunshan
Luxshare Processing and
Kunshan Kunshan 100.00% Establishment
Precision manufacturing
Industry Co., Ltd.
Kunshan
Luxshare Processing and
Kunshan Kunshan 100.00% Establishment
Precision Mould manufacturing
Co., Ltd.
274
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxshare
Precision
Processing and
Industry Baoding Baoding 100.00% Establishment
manufacturing
(Baoding) Co.,
Ltd.
Xuancheng
Luxshare Processing and
Anhui Xuancheng 100.00% Establishment
Precision manufacturing
Industry Co., Ltd.
Luxshare
Electronic Processing and
Shanghai Shanghai 88.00% Establishment
(Shanghai) Co., manufacturing
Ltd.
Luxshare
Precision
Processing and
Industry Liyang Liyang 100.00% Establishment
manufacturing
(Jiangsu) Co.,
Ltd.
Yancheng
Luxshare Processing and
Yancheng Yancheng 100.00% Establishment
Precision manufacturing
Industry Co., Ltd.
Luxshare
Precision Processing and
Hefei Hefei 100.00% Establishment
Industry (Hefei) manufacturing
Co., Ltd.
Luxshare
Precision Processing and
Macheng Macheng 100.00% Establishment
Industry (Hubei) manufacturing
Co., Ltd.
Luxshare
Automotive
Processing and
Technology Shanghai Shanghai 90.00% Establishment
manufacturing
(Shanghai) Co.,
Ltd.
Luxshare
Precision Processing and
Wuhu Wuhu 100.00% Establishment
Industry (Wuhu) manufacturing
Co., Ltd.
Business
combination
Kunshan Lanto
Processing and involving
Electronic Kunshan Kunshan 100.00%
manufacturing enterprises not
Limited
under common
control
Business
combination
Bozhou Lanto
Processing and involving
Electronic Bozhou Bozhou 100.00%
manufacturing enterprises not
Limited
under common
control
Bozhou Xuntao Processing and
Bozhou Bozhou 100.00% Establishment
Electronic manufacturing
275
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Limited
Suining Luxshare
Processing and
Precision Suining Suining 100.00% Establishment
manufacturing
Industry Co., Ltd.
Business
Merry combination
Electronics Processing and involving
Suzhou Suzhou 51.00 %
(Suzhou) Co., manufacturing enterprises not
Ltd. under common
control
Beijing Luxshare
Acoustic Processing and
Beijing Beijing 100.00% Establishment
Technology Co., manufacturing
Ltd.
Luxshare
Precision Processing and
Changzhi Changzhi 100.00% Establishment
Industry (Shanxi) manufacturing
Co., Ltd.
Changzhi
Luxshare Processing and
Changzhi Changzhi 100.00% Establishment
Precision manufacturing
Industry Co., Ltd.
Suzhou Lanto
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
Processing and involving
Electronic (Ji’an) Ji’an Ji’an 100.00%
manufacturing enterprises
Co., Ltd.
under common
control
ASAP
Technology Processing and
Ji’an Ji’an 100.00% Establishment
(Jiangxi) Co., manufacturing
Ltd.
Business
Yongxin County combination
Boshuo Yongxin Yongxin Processing and involving
100.00%
Electronic Co., County County manufacturing enterprises not
Ltd. under 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.
Fujian JK Wiring Business
Processing and
Systems Co., Fuzhou Fuzhou 55.00% combination
manufacturing
Ltd.. involving
276
Luxshare Precision Industry Co., Ltd. Annual Report 2022
enterprises not
under common
control
Jianou JK Wiring Processing and
Jian’ou Jian’ou 55.00 % Establishment
Systems Co., Ltd. manufacturing
Business
Luxshare
combination
Electronic
Processing and involving
Technology Kunshan Kunshan 100.00%
manufacturing enterprises not
(Kunshan) Co.,
under common
Ltd.
control
Shenzhen
Luxshare Processing and
Shenzhen Shenzhen 100.00% Establishment
Acoustics manufacturing
Technology Ltd.
Fengshun
Luxshare Processing and
Fengshun Fengshun 100.00% Establishment
Precision manufacturing
Industry Co., Ltd.
Luxshare
Precision Processing and
Chuzhou Chuzhou 100.00% Establishment
Industry manufacturing
(Chuzhou), Ltd.
Luxshare New
Processing and
Energy (Anhui) Chuzhou Chuzhou 100.00% Establishment
manufacturing
Co., Ltd.
Luxshare
Precision
Processing and
Industry Chuzhou Chuzhou 100.00% Establishment
manufacturing
(Mingguang) Co.,
Ltd.
Business
combination
SuK
Processing and involving
Kunststofftechnik Germany Germany 100.00%
manufacturing enterprises not
GmbH
under common
control
Business
combination
Luxshare
Processing and involving
Automation Kunshan Kunshan 70.00%
manufacturing enterprises not
(Jiangsu) Ltd.
under common
control
Dongguan
Luxshare Processing and
Dongguan Dongguan 100.00% Establishment
Precision manufacturing
Industry Co., Ltd.
Guangdong
Luxshare &
Processing and
Merry Dongguan Dongguan 51.00% Establishment
manufacturing
Electronics Co.,
Ltd.
Merry Huizhou Huizhou Processing and 51.00% Business
277
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Electronics manufacturing combination
(Huizhou) Co., involving
Ltd. enterprises not
under common
control
Business
Merry combination
Electronics involving
Shanghai Shanghai Trade 51.00%
(Shanghai) Co., enterprises not
Ltd. under 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
Precision Processing and
Enshi Enshi 100.00% Establishment
Industry (Enshi) manufacturing
Co., Ltd.
Luxshare
Precision
Processing and
Industry Suzhou Suzhou 100.00% Establishment
manufacturing
(Suzhou) Co.,
Ltd.
Luxshare iTech
Processing and
(Zhejiang) Co., Jiashan Jiashan 100.00% Establishment
manufacturing
Ltd.
Luxshare
Electronic
Processing and
Service Jiashan Jiashan 100.00% Establishment
manufacturing
(Zhejiang) Co.,
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.
278
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxshare
Technologies Hong Kong Hong Kong Trade 90.00% Establishment
Limited
Business
combination
Donguan Xuntao
Processing and involving
Electronic Co., Dongguan Dongguan 90.00%
manufacturing enterprises not
Ltd.
under common
control
Xingning
Luxshare Processing and
Xingning Xingning 90.00% Establishment
Technology Co., manufacturing
Ltd.
Suzhou Luxshare
Processing and
Technology Co., Kunshan Kunshan 90.00% Establishment
manufacturing
Ltd.
Hangzhou
Xuntao Processing and
Hangzhou Hangzhou 90.00 % Establishment
Technology Co., manufacturing
Ltd.
Business
Zhejiang Puxing combination
Electronic Processing and involving
Zhejiang Zhejiang 63.00 %
Technology Co., manufacturing enterprises not
Ltd. under common
control
Dongguan
Luxshare
Smart-Link Processing and
Dongguan Dongguan 90.00% Establishment
Electronic manufacturing
Technology Co.,
Ltd.
Business
Shenzhen combination
Huarong Processing and involving
Shenzhen Shenzhen 68.42%
Technology Co., manufacturing enterprises not
Ltd. under common
control
Business
Dongguan
combination
Huarong
Processing and involving
Communications Dongguan Dongguan 68.42%
manufacturing enterprises not
Technology Co.,
under common
Ltd.
control
Business
Dongguan
combination
Huarong Supply
Processing and involving
Chain Dongguan Dongguan 68.42%
manufacturing enterprises not
Management Co.,
under common
Ltd.
control
Dongguan Business
Changlong Processing and combination
Dongguan Dongguan 68.42%
Communications manufacturing involving
Technology Co., enterprises not
279
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd. under common
control
Luxshare
Rechuan
Processing and
Technology Huizhou Huizhou 63.00 % Establishment
manufacturing
(Huizhou) Co.,
Ltd.
Business
Shenzhen Sanhe combination
Rongyu Processing and involving
Shenzhen Shenzhen 90.00%
Technology Co., manufacturing enterprises not
Ltd. under common
control
Shantou
Luxshare Processing and
Shantou Shantou 90.00% Establishment
Technologies Co., manufacturing
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)
Lianxun
Intelligent Processing and
Rugao Rugao 100.00% 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.
Jiashan Luxshare
Business
Investment
Management Jiashan Jiashan 9.09% Establishment
consulting
Service
Partnership (LP)
Jiashan Luxshare Investment
Jiashan Jiashan 9.14% Establishment
Intelligent consulting
280
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Equipment 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 manufacturing
(Xi’an) Co., Ltd.
Luxshare
Electronic Processing and
Enshi Enshi 100.00% Establishment
Technology manufacturing
(Enshi) Co., Ltd.
Luxis Technology
Processing and
(Kunshan) Co., Kunshan Kunshan 100.00% Establishment
manufacturing
Ltd.
Business
Luxcase
combination
Precision
Processing and involving
Technology Yancheng Yancheng 49.75%
manufacturing enterprises not
(Yancheng) Co.,
under common
Ltd.
control
Business
Ri Pei Computer combination
Accessory Processing and involving
Shanghai Shanghai 49.75%
(Shanghai) Co., manufacturing enterprises not
Ltd. under common
control
Business
Ri Shan
combination
Computer
Processing and involving
Accessory Jiashan Jiashan 49.75%
manufacturing enterprises not
(Jiashan) Co.,
under common
Ltd.
control
Ri Ming Business
Computer Processing and combination
Shanghai Shanghai 49.75%
Accessory manufacturing involving
(Shanghai) Co., enterprises not
281
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd. under common
control
Business
Sheng-Rui
combination
Electronic
Processing and involving
Technology Shanghai Shanghai 49.75%
manufacturing enterprises not
(Shanghai)
under common
Limited
control
Business
Rida Intelligent combination
Manufacture Processing and involving
Rugao Rugao 49.75%
Technology manufacturing enterprises not
(Rugao) Co., Ltd. under common
control
Business
combination
Caseteck
Investment involving
Singapore PTE. Singapore Singapore 49.75%
consulting enterprises not
LTD.
under common
control
Luxshare Smart
Processing and
Manufacturing Rugao Rugao 49.75% Establishment
manufacturing
(Rugao) Co., Ltd.
Luxcase
Precision
Processing and
Technology Kunshan Kunshan 49.75% Establishment
manufacturing
(Kunshan) Co.,
Ltd.
Luxis Precision
Intelligent
Processing and
Manufacture Kunshan Kunshan 100.00% Establishment
manufacturing
(Kunshan) Co.,
Ltd.
Luxshare
Intelligent
Manufacture
Processing and
Electronic 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
Technology Nanjing Nanjing 100.00% Establishment
manufacturing
(Nanjing) Co.,
Ltd.
Fengshun
Luxshare
Processing and
Intelligent Fengshun Fengshun 100.00% Establishment
manufacturing
Manufacture Co.,
Ltd.
282
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Lisen Precision
Technology Processing and
Kunshan Kunshan 76.47% Establishment
(Kunshan) Co., manufacturing
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% 9,952,024.62 81,778,214.01
Systems Co., Ltd..
Luxshare Automation 30.00% 5,449,686.88 130,939,834.33
(Jiangsu) Ltd.
Merry Electronics 49.00% 45,310,378.96 304,832,545.91
(Huizhou) Co., LTD.
Merry Electronics 49.00% 21,957,539.05 767,522,453.61
(Suzhou) Co., Ltd.
SpeedTech Corp. 68.81% 135,366,893.01 685,155,493.35
Luxcase Precision 50.25% 946,035,591.25 6,546,335,952.13
Technology (Yancheng)
Co., Ltd.
TIME Interconnect 29.05% 33,035,844.74 320,124,830.11
Technology Limited
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
Current Non-curr Total Current Non-curr Total Current Non-curr Total Current Non-curr Total
subsidiary
assets ent assets liabilities ent liabilities assets ent assets liabilities ent liabilities
283
Luxshare Precision Industry Co., Ltd. Annual Report 2022
assets liabilities assets liabilities
Fujian JK 225,387, 34,466,8 259,854, 76,066,2 2,058,74 78,124,9 201,461, 39,539,0 241,000, 78,739,4 2,947,38 81,686,8
Wiring 528.35 13.43 341.78 33.04 4.29 77.33 773.41 06.41 779.82 90.18 2.89 73.07
Systems Co.,
Ltd..
Luxshare 853,085, 31,453,1 884,538, 445,946, 2,125,62 448,072, 738,818, 27,111,4 765,930, 366,214, 456,501. 366,670,
Automation 188.44 15.58 304.02 568.61 0.97 189.58 949.79 31.45 381.24 443.87 81 945.68
(Jiangsu)
Ltd.
Merry 723,087, 195,161, 918,248, 291,492, 4,649,21 296,141, 778,911, 188,620, 967,531, 432,751, 5,877,57 438,629,
Electronics 556.75 034.15 590.90 142.26 2.01 354.27 522.39 083.25 605.64 659.97 6.98 236.95
(Huizhou)
Co., LTD.
Merry 1,118,64 1,248,85 2,367,49 779,877, 21,247,8 801,125, 1,044,70 1,356,95 2,401,66 862,367, 24,681,8 887,048,
Electronics 5,882.13 1,798.16 7,680.29 438.22 87.80 326.02 7,295.02 6,783.45 4,078.47 112.91 27.98 940.89
(Suzhou)
Co., Ltd.
SpeedTech 2,956,55 1,684,80 4,641,36 2,064,77 402,089, 2,466,86 2,600,26 1,592,28 4,192,54 1,835,15 490,362, 2,325,51
Corp. 6,156.98 6,869.65 3,026.63 1,284.20 189.01 0,473.21 0,430.80 2,396.88 2,827.68 5,679.00 074.14 7,753.14
Luxcase 21,717,3 10,085,7 31,803,1 18,462,8 299,403, 18,762,2 22,778,4 9,339,57 32,118,0 20,783,8 337,685, 21,121,4
Precision 82,026.0 61,927.4 43,953.5 05,711.4 365.43 09,076.8 81,259.2 0,358.86 51,618.1 02,429.8 747.10 88,176.9
Technology 8 8 6 6 9 6 2 9 9
(Yancheng)
Co., Ltd.
TIME 4,227,06 1,151,77 5,378,83 3,696,09 571,746, 4,267,84 0.00 0.00 0.00 0.00
Interconnect 3,889.34 0,360.26 4,249.60 7,636.04 429.42 4,065.46
Technology
Limited
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 362,337,917. 22,115,610.2 22,415,457.7 30,946,808.7 326,411,016. 15,331,123.2 15,082,244.8 19,186,063.7
Wiring 86 7 0 2 33 7 3 6
Systems Co.,
Ltd..
Luxshare 1,506,997,04 18,165,622.9 37,206,678.8 -142,482,023. 863,982,192. 70,972,671.1 75,591,546.5 124,551,641.
Automation 0.67 6 8 72 72 1 6 02
(Jiangsu) Ltd.
284
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Merry 1,203,376,37 92,470,161.1 93,204,867.9 201,137,711. 1,280,685,86 100,888,081. 102,990,996. -113,129,941.
Electronics 8.49 6 4 43 3.21 51 60 39
(Huizhou)
Co., LTD.
Merry 2,017,425,92 44,811,304.1 51,757,216.7 219,743,993. 2,373,278,24 46,028,076.2 47,322,409.2 73,648,850.1
Electronics 8.45 9 0 26 6.97 2 8 6
(Suzhou) Co.,
Ltd.
SpeedTech 4,449,205,49 376,451,128. 307,477,478. -259,182,005. 4,316,395,11 378,360,435. 640,576,904. 251,280,685.
Corp. 5.30 24 88 60 1.91 24 00 70
Luxcase 74,186,807,3 1,943,749,08 2,044,371,43 5,913,355,56 49,727,123,0 961,423,139. 991,691,069. 893,969,747.
Precision 58.22 0.02 5.54 9.06 10.93 90 76 46
Technology
(Yancheng)
Co., Ltd.
TIME 4,623,757,73 114,427,001. 80,670,057.7 82,748,267.0 0.00 0.00 0.00 0.00
Interconnect 4.84 90 2 7
Technology
Limited
Other descriptions:
(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
During the reporting period, the Company sold its some shares in its subsidiary Luxcase Precision Technology (Yancheng) Co., Ltd.
(“LuxcaseICT Yancheng”), and its original shareholding rate was changed from 51.8269% to 49.7544%.
(2) Impact of transactions on minority interest and owners’ equity attributable to the parent company
In RMB
Luxcase Precision Technology (Yancheng) Co., Ltd.
Acquisition cost/ disposal consideration
--Cash 260,000,000.00
285
Luxshare Precision Industry Co., Ltd. Annual Report 2022
-- Fair value of non-cash assets
Total acquisition cost/ disposal consideration 260,000,000.00
Less: share of subsidiaries’ net assets calculated by the 261,198,860.22
proportion of acquired/disposed equity shares
Difference -1,198,860.22
Including: Adjustment to capital reserve -1,198,860.22
Adjustment to surplus reserve
Adjustment to undistributed profits
Other descriptions:
3. Equity in joint ventures or associates
(1) 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 book value of investment 119,066,960.41 106,220,235.27
Total amount of the following items
calculated according to shareholding
ratio
--Net profit 23,777,786.12 27,841,266.03
--Other comprehensive income 2,113,184.27 351,380.96
--Total comprehensive income 25,890,970.39 28,192,646.99
Associates:
Total book value of investment 1,880,940,682.25 1,053,757,599.22
Total amount of the following items
calculated according to shareholding
ratio
--Net profit 770,981,706.30 1,896,055.92
--Other comprehensive income -65,915.00 -92,130,948.02
--Total comprehensive income 770,915,791.30 -90,234,892.10
Other descriptions:
X. Risks associated with financial instruments
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
286
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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.
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 instruments 414,859,257.92 210,278,829.12
Total 414,859,257.92 210,278,829.12
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 fair value
Item
Level I Level II Level I Total
I. Continuous fair value
-- -- -- --
measurement
(I) Held-for-trading
27,039,649.45 1,326,226,850.46 1,353,266,499.91
financial assets
287
Luxshare Precision Industry Co., Ltd. Annual Report 2022
1. Financial assets at
fair value through 27,039,649.45 1,326,226,850.46 1,353,266,499.91
profit or loss
(3) Derivative financial
27,039,649.45 27,039,649.45
assets
(4) Others 1,326,226,850.46 1,326,226,850.46
2. Designated as
financial assets at fair
35,700,000.00 35,700,000.00
value through profit or
loss
(2) Investment in
35,700,000.00 35,700,000.00
equity instruments
(III) Investment in
other equity 342,379,257.92 97,727,734.74 440,106,992.66
instruments
Total assets
continuously measured 342,379,257.92 27,039,649.45 1,459,654,585.20 1,829,073,492.57
at fair value
(VI) Held-for-trading
44,318,321.50 44,318,321.50
financial liabilities
Among them,
Held-for-trading bonds 41,436.00 41,436.00
issued
Derivative
44,276,885.50 44,276,885.50
financial liabilities
Total liabilities
continuously measured 44,318,321.50 44,318,321.50
at fair value
II. Non-continuous fair
-- -- -- --
value measurement
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.
288
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 level III
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
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 38.39% 38.39%
Descriptions on the parent company of the Company
The ultimate controller of the Company is WANG Laichun and WANG Laisheng；
As of December 31, 2022, Luxshare Limited has pledged 39.41% 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
289
Luxshare Precision Industry Co., Ltd. Annual Report 2022
3. Joint ventures and associates of the Company
Please refer to Note “IX (3). Equity in joint ventures or associates” 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
Lihao Optoelectronics Technology (Nantong) Co., Ltd. Joint-stock company of a majority-owned subsidiary of the
Company
Xinhao Photoelectric Technology（HK）Limited Joint-stock company of a majority-owned subsidiary of the
Company
MERRY & LUXSHARE (VIETNAM) CO., Ltd. Joint-stock company of the Company’s subsidiary
Zhuhai Kinwong Flexible Circuit Co., Ltd. Associates of the Company
Other descriptions:
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
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
BCS Automotive Interface Solutions An enterprise controlled by the Company’s parent company
Bisaisi Automotive Technology (Shenzhen) Co., Ltd. An enterprise controlled by the Company’s parent company
Guangzhou Luxvisions Innovation Technology Limited Other related party of the Company
Dongguan Terry Leather Co., Ltd. Other related party of the Company
Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. 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
Luxvisions Innovation (Ji’an) Co., Ltd. Other related party of the Company
Dongguan Gaowei Optical Electronics Co., Ltd. Other related party of the Company
COWELL OPTIC ELECTRONICS LTD Other related party of the Company
Chery Automobile Co., Ltd. Other related party of the Company
Chery Automobile Henan Co., Ltd. Other related party of the Company
Chery Commercial Vehicle (Anhui) Co., Ltd. Other related party of the Company
290
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Terry Precision Corporation Other related party of the Company
Terry Smart Manufacturing (Dongguan) Technology Co., Ltd. Other related party of the Company
Teleray (Hong Kong) International Company Limited Other related party of the Company
Xunmu Information Technology (Shanghai) Co., Ltd. Controlled by the de facto controller
Lishan Smart Manufacturing Technology (Guangdong) Co., Controlled by the de facto controller
Ltd.
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 Amount
Related-party Approved
Related party recognized in the transaction limit is recognized in the
transactions transaction limit
current period exceeded prior period
Riyimao Industrial Processing
19,083,384.89 No 14,579,642.24
Co., Ltd. services
Assem Technology Equipment and
1,642,783.57 No 1,544,704.07
Co., Ltd. apparatus
Assem Technology
Other services 1,015,414.60 No 7,025,321.51
Co., Ltd.
Assem Technology
Purchasing goods 20,623,798.84 No
Co., Ltd.
Zhuhai Kinwong
Flexible Circuit Purchasing goods No 5,143.81
Co., Ltd.
Bisaisi Automotive
Technology Purchasing goods 23,441,183.61 50,000,000.00 No 3,708,934.25
(Suzhou) Co., Ltd.
Guangzhou
Luxvisions
Innovation Purchasing goods 573,252.39 No 1,669,585.05
Technology
Limited
Guangzhou
Luxvisions
Innovation Service fees 2,365,923.22 No
Technology
Limited
Guangzhou
Luxvisions
Innovation Facilities 9,050.00 No
Technology
Limited
Luxsan
Technology Purchasing goods 311,176,270.99 350,000,000.00 No 403,077.31
(Kunshan) Co.,
291
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd.
Luxsan Precision
Intelligent
Water and
Manufacture 36,498,229.20 No 20,052,496.84
electricity
(Kunshan) Co.,
Ltd.
LUXSAN
TECHNOLOGY Purchasing goods 1,037,899,802.32 1,050,000,000.00 No 27,367,615.80
LIMITED
Merry &
Luxshare Purchasing goods 63,555,616.23 No 1,027,736.62
(Vietnam) Co., Ltd
BCS
Automotive Purchasing goods 33,585,700.71 No
Interface Solutions
Dongguan Terry
Purchasing goods 802,216.95 No
Leather Co., Ltd.
Lihao
Optoelectronics
Technology Purchasing goods 336,203.20 No
(Nantong) Co.,
Ltd.
Terry Smart
Manufacturing
(Dongguan) Purchasing goods 1,139,462.18 No
Technology Co.,
Ltd.
Xunmu
Information
Technology Purchasing goods 9,763,593.17 No
(Shanghai) Co.,
Ltd.
Dongguan Gaowei
Optical Electronics Service fees 2,474,770.49 No
Co., Ltd.
Teleray (Hong
Kong)
Purchasing goods 943,970.54 No
International
Company Limited
Luxvisions Housing rent,
Innovation water and 844,931.03 No
Limited electricity
Lishan Smart
Manufacturing
Water and
Technology 1,022,581.35 No
electricity
(Guangdong) Co.,
Ltd.
Selling goods/rendering services
In RMB
Amount recognized in the Amount recognized in the
Related party Related-party transactions
current period prior period
292
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Riyimao Industrial Co., Ltd. Other services 886.00
Assem Technology Co., Ltd. Other services 1,026,668.20 297,821.29
Shangrao City Lijing
Innovation Technology Co., Selling products 346,000.00
Ltd.
Guangzhou Luxvisions
Innovation Technology Equipment and apparatus 2,542,359.91
Limited
Guangzhou Luxvisions
Innovation Technology Selling products 4,182,806.58
Limited
Luxvisions Innovation
Selling products 18,034.55
Limited
Bisaisi Automotive
Technology (Suzhou) Co., Selling products 394,380,063.81 218,717,133.08
Ltd.
BCS
AUTOMOTIVE Selling products 1,916,774.55 910,682.54
INTERFACE SOLUTIONS
Luxsan Technology
Selling products 643,619,515.80 417,147,307.20
(Kunshan) Co., Ltd.
Luxsan Precision Intelligent
Manufacture (Kunshan) Co., Selling products 55,980,332.83 20,080,496.26
Ltd.
LUXSAN
Selling products 19,117,778.28
TECHNOLOGY LIMITED
Xunmu Information
Technology (Shanghai) Co., Selling products 14,868,596.51 10,792,326.99
Ltd.
Merry &
Luxshare （Vietnam） Co., Selling products 31,838,922.39 16,898,647.66
Ltd
Lihao Optoelectronics
Technology (Nantong) Co., Selling products 3,922,201.00
Ltd.
Xinhao
R&D and marketing
Photoelectric Technology 4,287,145.58
consulting fees
（HK）Limited
Bisaisi Automotive
Technology (Shenzhen) Co., Selling products 550.00
Ltd.
Dongguan Gaowei Optical
Selling products 991,782.45
Electronics Co., Ltd.
COWELL OPTIC
Selling products 117,926,402.49
ELECTRONICS LTD
Chery Automobile Co., Ltd. Selling products 28,562,202.47
Chery Automobile Henan
Selling products 559,356.88
Co., Ltd.
Chery Commercial Vehicle Selling products 220,361.59
293
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(Anhui) Co., Ltd.
Descriptions on related-party transactions of purchasing and selling goods, and rendering and accepting services
On August 25, 2022, the Company held the 10th meeting of the fifth session of Board of Directors and the 10th meeting of the
fifth session of Board of Supervisors, deliberating and approving the Proposal on the Prediction of Increase in Daily Related-party
Transactions of the Company in 2022:
to purchase goods from Luxsan Technology (Kunshan) Co., Ltd. in the amount of up to RMB350,000,000.00;
to purchase goods from Luxsan Technology Limited in the amount of up to RMB1,050,000,000.00;
to purchase goods from Bisaisi Automotive Technology (Suzhou) Co., Ltd. in the amount of up to RMB50,000,000.00;
to sell goods to Luxsan Technology (Kunshan) Co., Ltd. in the amount of up to RMB650,000,000.00;
to sell goods to COWELL OPTIC ELECTRONICS LTD in the amount of up to RMB120,000,000.00;
to sell goods to Bisaisi Automotive Technology (Suzhou) Co., Ltd. in the amount of up to RMB400,000,000.00;
(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 prior period
The Company acts as the lessee:
In RMB
Categor Expenses related Variable lease Assumed interest
Added right-of-use
Lessor y of to short-term payments through Paid rent expenses of lease
assets
leased leases and profit or loss not liabilities
294
Luxshare Precision Industry Co., Ltd. Annual Report 2022
assets low-value assets included in the
leases subject to measurement of
simplified lease liabilities, if
treatment, if any any
Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun
t t t t t t t t t Amount
recogni recogni recogni recogni recogni recogni recogni recogni recogni recogniz
zed in zed in zed in zed in zed in zed in zed in zed in zed in ed in the
the the the the the the the the the prior
current prior current prior current prior current prior current period
period period period period period period period period period
Luxsan
Fixed
Precision
assets
Intelligent 2,615,0 1,536,6 85,406,7
and
Manufacture 51.89 53.21 89.07
buildin
(Kunshan) Co.,
gs
Ltd.
Fixed
Luxvisions assets
170,770 17,685,
Innovation and
.30 567.07
(Ji’an) Co., Ltd. buildin
gs
Descriptions on related-party leases
(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
5,571,680,000.00 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
295
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(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 13,665,822.35 10,465,440.15
Share-based payment of key managers 3,842,203.80 5,454,355.12
(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
Guangzhou
Luxvisions
Accounts
Innovation 3,407,360.47 1,703.68 1,617,967.38 808.98
receivables
Technology
Limited
Bisaisi Automotive
Accounts
Technology 321,616,341.01 160,808.17 158,076,590.05 79,038.30
receivables
(Suzhou) Co., Ltd.
BCS
Accounts AUTOMOTIVE
24,913.91 12.46 95,631.05 47.82
receivables INTERFACE
SOLUTIONS
Accounts Assem Technology
335,321.60 167.66 311,427.22 155.71
receivables Co., Ltd.
Luxsan
Accounts Technology
173,086,093.05 86,543.05 39,532,101.88 19,766.05
receivables (Kunshan) Co.,
Ltd.
Luxsan Precision
Intelligent
Accounts
Manufacture 32,616,026.16 16,308.01
receivables
(Kunshan) Co.,
Ltd.
Accounts Xunmu
2,848,819.77 1,424.41 12,256,936.88 6,128.47
receivables Information
296
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Technology
(Shanghai) Co.,
Ltd.
Merry &
Accounts
Luxshare 8,503,901.75 4,251.95 6,316,914.83 3,158.46
receivables
(Vietnam) Co., Ltd
LUXSAN
Accounts
TECHNOLOGY 3,036,189.27 1,518.09
receivables
LIMITED
COWELL OPTIC
Accounts
ELECTRONICS 89,178,452.13 44,589.23
receivables
LTD
Bisaisi Automotive
Accounts Technology
621.50 0.31
receivables (Shenzhen) Co.,
Ltd.
Accounts Chery Automobile
6,792,611.72 3,396.31
receivables Co., Ltd.
Accounts Chery Automobile
632,073.27 316.04
receivables Henan Co., Ltd.
Chery Commercial
Accounts
Vehicle (Anhui) 249,008.60 124.50
receivables
Co., Ltd.
Terry Smart
Manufacturing
Accounts
(Dongguan) 126,839.11 63.42
receivables
Technology Co.,
Ltd.
Bisaisi Automotive
Other receivables Technology 5,699,756.88 28,498.78
(Suzhou) Co., Ltd.
Xuande Energy
Other receivables 164,996.62 824.98 167,101.03 835.51
Co., Ltd.
Luxsan
Technology
Other receivables 9,349.09 46.75 685.63 3.43
(Kunshan) Co.,
Ltd.
BCS
AUTOMOTIVE
Other receivables 803,488.22 4,017.44
INTERFACE
SOLUTIONS
Lihao
Optoelectronics
Other receivables Technology 3,922,636.50 19,613.18
(Nantong) Co.,
Ltd.
Merry &
Other receivables Luxshare 83,591.01 417.96 84,161.60 420.81
(Vietnam) Co., Ltd
Other receivables Xinhao 19,207.53 96.04
297
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Photoelectric
Technology（HK）
Limited
BCS
Prepayments Automotive 10,761,181.73
Interface Solutions
Bisaisi Automotive
Notes receivable Technology 12,071,807.98
(Suzhou) Co., Ltd.
(2) Payables
In RMB
Item Related party Closing book balance Opening book balance
Accounts payable Assem Technology Co., Ltd. 6,958,457.33 5,479,111.65
Guangzhou Luxvisions
Accounts payable Innovation Technology 149,969.97 1,445,279.42
Limited
Luxvisions Innovation
Accounts payable 75,514.52 80,169.45
Limited
Bisaisi Automotive
Accounts payable Technology (Suzhou) Co., 7,368,354.63 2,980,261.04
Ltd.
Luxsan Precision Intelligent
Accounts payable Manufacture (Kunshan) Co., 80,467,446.67 37,710,113.75
Ltd.
Luxsan Technology
Accounts payable 1,054,198.48 398,415.58
(Kunshan) Co., Ltd.
Accounts payable Riyimao Industrial Co., Ltd. 9,959,460.45 8,597,415.91
Zhuhai Kinwong Flexible
Accounts payable 5,143.81
Circuit Co., Ltd.
Dongguan Gaowei Optical
Accounts payable 2,404,063.04
Electronics Co., Ltd.
Merry &
Accounts payable 13,129,894.24 1,015,850.48
Luxshare (Vietnam) Co., Ltd
BCS
Accounts payable Automotive Interface 382,381.23
Solutions
LUXSAN
Accounts payable 907,791,605.59 23,227,385.80
TECHNOLOGY LIMITED
Lihao Optoelectronics
Accounts payable Technology (Nantong) Co., 267,949.42
Ltd.
Luxvisions Innovation (Ji’an)
Accounts payable 1,811,805.00
Co., Ltd.
Lishan Smart Manufacturing
Accounts payable 1,112,875.90
Technology (Guangdong)
298
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Co., Ltd.
Teleray (Hong Kong)
Accounts payable International Company 899,233.35
Limited
Terry Smart Manufacturing
Accounts payable (Dongguan) Technology Co., 1,653,291.06
Ltd.
Xunmu Information
Accounts payable Technology (Shanghai) Co., 1,154,129.50
Ltd.
Other payables Assem Technology Co., Ltd. 2,537.96
Other payables Riyimao Industrial Co., Ltd. 9,196.33
Teleray (Hong Kong)
Other payables International Company 44,737.19
Limited
BCS
Contract liabilities Automotive Interface 9,387.26
Solutions
Luxvisions Innovation (Ji’an)
Lease liabilities 17,024,178.30
Co., Ltd.
Luxsan Precision Intelligent
Lease liabilities Manufacture (Kunshan) Co., 65,504,587.32
Ltd.
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 168,513,000.00
period
Total amount of the Company’s equity instruments exercised in the current 49,415,696.00
period
Total amount of the Company’s equity instruments invalid in the current 2,468,651.00
period
299
Luxshare Precision Industry Co., Ltd. Annual Report 2022
The range of exercise prices of Company’s outstanding stock options at
See the following descriptions
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 descriptions
Company at the end of the period and the remaining term of the contract
Other descriptions:
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 5th meeting of the fourth session of 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 Achievement of the Exercise Conditions for the Second Exercise Period under the 2018 Stock Option
Incentive Plan approved upon deliberation at the 27th meeting of the fourth session of 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 9th meeting of the fourth session of 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.
(3) On November 27, 2019, the Company held the 13th meeting of the fourth session of Board of Directors, deliberating and
approving the Proposal on Grant of Stock Options to Grantees in Reserved Grant 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.
(4) On December 3,2021, the Company held the 6th meeting of the fifth session of 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.
On September 15, 2022, the Company held the 11th meeting of the fifth session of Board of Directors and the 11th meeting of
the fifth session of Board of Supervisors, deliberating and approving the Proposal on Grant of Stock Options to Grantees in Reserved
Grant under the 2021 Stock Option Incentive Plan, whereby it was determined that 13,101,000 stock options would be granted to 365
eligible grantees on September 15, 2022 as the grant date of the reserved stock options. The exercise price of reserved stock options
under this incentive plan was RMB 35.76 per share. Since 9 original grantees resigned from the Company or 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
365 to 356 and the quantity of stock options granted was changed from 13,101,000 to 12,785,800.
(5) On December 15, 2022, the Company held the 14th meeting of the fifth session of Board of Directors, deliberating and
300
Luxshare Precision Industry Co., Ltd. Annual Report 2022
approving the Proposal on Grant of Stock Options to Grantees under the 2022 Stock Option Incentive Plan of Luxshare Precision
Industry Co., Ltd., whereby it was determined that 172,021,000 stock options would be granted to 3,759 eligible grantees on
December 5, 2022 as the grant date of the reserved stock options. The exercise price of stock options initially granted under this
incentive plan was RMB 30.35 per share. Since 254 original grantees resigned from the Company or 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 3,759 to 3,505
and the quantity of stock options granted was changed from 172,021,000 to 168,513,000.
2. Share-based payment settled in equity
Applicable □ N/A
In RMB
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 1,392,773,414.52
included in the capital reserve
Total amount of share-based payment settled in equity recognized in 431,567,195.11
the current period
Other descriptions:
(1) On September 25, 2018, the Company held the 5th meeting of the fourth session of Board of Directors and the 5th meeting
of the fourth session of 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 13th meeting of the fourth session of Board of Directors and the 13th meeting
of the fourth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price and
Quantity under the 2018 Stock Option Incentive Plan and Cancellation of Some Stock Options as well as the Proposal on
Achievement of the Exercise Conditions for the Initial Exercise Period of the 2018 Stock Option Incentive Plan. 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 9th meeting of the fourth session of Board of Directors and the 19th meeting of the
fourth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price and Quantity
under the Stock Option Incentive Plans in 2018 and 2019, and Cancellation of 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 27th meeting of the fourth session of Board of Directors and the 27th meeting of
the fourth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Quantity under the
2018 Stock Option Incentive Plan and Cancellation of Some Stock Options as well as the Proposal on Achievement of the Exercise
Conditions for the Second Exercise Period of the 2018 Stock Option Incentive Plan. After the adjustment, the number of grantees
301
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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 2nd meeting of the fifth session of Board of Directors and the 2nd meeting of the fifth
session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price under the Stock Option
Incentive Plans in 2018 and 2019 and Cancellation of 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 4th meeting of the fifth session of Board of Directors and the 4th meeting of the
fifth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Quantity under the
2018 Stock Option Incentive Plan and Cancellation of 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 6th meeting of the fifth session of Board of Directors and the sixth meeting of the
fifth session of the Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Quantity under the
2018 Stock Option Incentive Plan and Cancellation of Some Stock Options as well as the Proposal on Achievement of 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.
On July 6, 2022, the Company held the 9th meeting of the fifth session of Board of Directors and the 9th meeting of the fifth
session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price under the Stock Option
Incentive Plans in 2018, 2019 and 2021, and Cancellation of Some Stock Options under the Stock Option Incentive Plan in 2019.
After the adjustment, the exercise price of stock options that was not exercised was changed from RMB 10.17 per share to RMB
10.06 per share.
On December 5, 2022, the Company held the 14th meeting of the fifth session of Board of Directors and the 14th meeting of
the fifth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Quantity under the
2018 Stock Option Incentive Plan and Cancellation of Some Stock Options as well as the Proposal on Achievement of the Exercise
Conditions for the Fourth 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 1,653 to 1,607, and the quantity of stock options granted was changed
from 60,875,365 to 59,645,321.
(2) On April 22, 2019, the Company held the 9th meeting of the fourth session of Board of Directors and the 9th meeting of the
fourth session of 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 13th meeting of the fourth session of Board of Directors and the 13th meeting
of the fourth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price and
Quantity under the 2019 Stock Option Incentive Plan and the Proposal on Grant of Stock Options to Grantees in Reserved Grant
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 16,274,700. 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.
302
Luxshare Precision Industry Co., Ltd. Annual Report 2022
On June 22, 2020, the Company held the 9th meeting of the fourth session of Board of Directors and the 9th meeting of the
fourth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price and Quantity
under the Stock Option Incentive Plans in 2018 and 2019, and Cancellation of Some Stock Options, and the Proposal on
Achievement of 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 29th Meeting of the fourth session of Board of Directors and the 29th Meeting of
the fourth session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the List of Grantees in
Reserved Grant, Exercise Quantity under the 2019 Stock Option Incentive Plan and Cancellation of Some Stock Options as well as
the Proposal on Achievement of the Exercise Conditions for the Initial Exercise Period of the 2019 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 2nd meeting of the fifth session of Board of Directors and the 2nd meeting of the fifth
session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of 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 Achievement of 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.
On July 6, 2022, the Company held the 9th meeting of the fifth session of Board of Directors and the 9th meeting of the fifth
session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price under the Stock Option
Incentive Plans in 2018, 2019 and 2021, and Cancellation of Some Stock Options of the Stock Option Incentive Plan in 2019, as well
as the Proposal on Achievement of the Exercise Conditions for the Third Exercise Period in Initial Grant under the 2019 Stock
Option Incentive Plan. After the adjustment, the number of initial grantees subject to the stock option incentive plan was changed
from 332 to 322, the quantity of stock options initially granted was changed from 49,032,311 to 48,393,020, and the exercise price of
stock options that was initially granted and reserved for grantees was changed from RMB 13.59 per share to RMB 13.48 per share.
(3) On December 3,2021, the Company held the 6th meeting of the fifth session of Board of Directors, deliberating and
approving the Proposal on Grant of 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.
On July 6, 2022, the Company held the 9th meeting of the fifth session of Board of Directors and the 9th meeting of the fifth
session of Board of Supervisors, deliberating and approving the Proposal on Adjustment of the Exercise Price under the Stock Option
Incentive Plans in 2018, 2019 and 2021, and Cancellation of Some Stock Options under the Stock Option Incentive Plan in 2019.
After the adjustment, the exercise price of stock options that was not exercised was changed from RMB 35.87 per share to RMB
35.76 per share.
(4) On September 15, 2022, the Company held the 11th meeting of the fifth session of Board of Directors and the 11th meeting
of the fifth session of Board of Supervisors, deliberating and approving the Proposal on Grant of Stock Options to Grantees in
Reserve Grant under the 2021 Stock Option Incentive Plan, whereby it was determined that 13,101,000 stock options would be
granted to 365 eligible grantees on September 15, 2022 as the grant date of the reserved stock options. The exercise price of reserved
303
Luxshare Precision Industry Co., Ltd. Annual Report 2022
stock options under this incentive plan was RMB 35.76 per share. Since 9 original grantees resigned from the Company or gave up
all stock options to be granted to them for personal reasons, the number of grantees in reserve grant under this stock option incentive
was changed from 365 to 356 and the quantity of stock options granted was changed from 13,101,000 to 12,785,800.
(5) On December 5, 2022, the Company held the 14th meeting of the fifth session of Board of Directors, deliberating and
approving the Proposal on Grant of Stock Options to Grantees under the 2022 Stock Option Incentive Plan of Luxshare Precision
Industry Co., Ltd., whereby it was determined that 172,021,000 stock options would be granted to 3,759 eligible grantees on
December 5, 2022 as the grant date of the stock options. The exercise price of stock options initially granted under this incentive plan
was RMB 30.35 per share. Since 245 original grantees resigned from the Company or gave up all stock options to be granted to them
for personal reasons, the number of grantees in reserved grant under this stock option incentive was changed from 3,759 to 3,505 and
the quantity of stock options granted was changed from 172,021,000 to 168,513,000.
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.
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.
304
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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
According to the resolution of
the 16th meeting of the fifth
session of Board of Directors,
the Company intends to apply
for a comprehensive credit
line amounting to RMB38.3
billion in aggregate from 17
banks. The above credit line
Obtain the comprehensive credit
will be subject to the actual
line from banks
approval of these banks,
including 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.
According to the resolution of
the 16th meeting of the fifth
session of Board of Directors,
the Company plans to obtain a
three-year syndicated loan
with the offshore
wholly-owned subsidiary
Provide guarantee for the
Luxshare Precision Limited as
syndicated loan of subsidiaries
the main borrower, and
provides a joint and several
liability guarantee of USD 800
million for the three-year
syndicated loan of the
wholly-owned subsidiary
Luxshare Precision Limited.
305
Luxshare Precision Industry Co., Ltd. Annual Report 2022
2. Profit distribution
In RMB
Profits or dividends planned to distribute 7,130,392,419.00
Profits or dividends approved to distribute 926,951,014.47
Profit distribution plan According to the resolutions of the 16th meeting of the fifth
session of Board of Directors, the Company distributes to all
shareholders a cash dividend of RMB1.30 (inclusive of tax)
per 10 shares on the basis of the total share capital of
7,130,392,419 shares, totaling RMB926,951,014.47 (inclusive
of tax), and to carry forward the retained profits for
distribution in subsequent years.
3. Sales return
None
4. Description on events after the balance sheet date
None
XVI. Other significant events
1. Correction of previous accounting errors
(1) Retrospective restatement
In RMB
Name of the affected item in the
Accounting error corrected Processing procedure statements of the comparison Cumulative quantum affected
period
None
(2) Prospective Application
Reasons for adopting method of
Accounting error corrected Approval procedure
prospective application
None
2. Debt restructuring
None
306
Luxshare Precision Industry Co., Ltd. Annual Report 2022
3. Asset replacement
(1) Exchange of non-monetary assets
None
(2) Replacement of other assets
4. Annuity plan
None
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:
None
6. Other significant transactions and events affecting the investors’ decisions
None
7. Others
The Company as a lessee
Item Current period Prior period
Interest expense on lease liabilities 44,537,265.44 30,548,145.32
Expenses related to short-term leases subject to simplified treatment that
are recognized in the cost of related assets and the profit or loss for the 141,495,257.27 131,587,654.61
current period
Expenses related to low-value assets leases subject to simplified
treatment that are recognized in the cost of related assets and the profit or
loss for the current period (excluding the expenses related to short-term
lease of low-value assets)
Variable lease payments recognized in the cost of related assets or the
307
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Item Current period Prior period
profit or loss for the current period, but not included in the measurement
of lease liabilities
Among them, From sale and leaseback transactions
Income from subletting right to use assets
Total cash outflows for leases 300,557,370.62 213,908,363.34
Relevant profit or loss arising from sale and leaseback transactions
Cash inflows from sale and leaseback transactions
Cash outflows from sale and leaseback transactions
XVII. Notes to key items in financial statements of the parent 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 Book
Provision Provision Book value
Amount Proportion Amount value Amount Proportion Amount
proportion proportion
Accounts receivable 241,403. 0.01% 241,403 100.00% 241,403.3 0.01% 241,403. 100.00%
for which bad-debt 36 .36 6 36
provision is made
individually
Including:
241,403. 0.01% 241,403 100.00% 241,403.3 0.01% 241,403. 100.00%
Entity 1
36 .36 6 36
Accounts receivable 6,146,04 99.99% 15,127, 0.25% 6,130,9 2,908,049 99.99% 6,424,42 0.22% 2,901,625,1
for which bad-debt 7,167.36 587.81 19,579. ,591.01 2.80 68.21
provision is made by 55
group
Including:
1,092,89 17.78% 15,127, 1.38% 1,077,7 1,358,822 46.72% 6,424,42 0.47% 1,352,398,0
Group by aging 7,234.00 587.81 69,646. ,492.40 2.80 69.60
19
Related party group 5,053,14 82.21% 5,053,1 1,549,227 53.27% 1,549,227,0
in the scope of 9,933.36 49,933. ,098.61 98.61
308
Luxshare Precision Industry Co., Ltd. Annual Report 2022
consolidation 36
6,146,28 100.00% 15,368, 6,130,9 2,908,290 100.00% 6,665,82 2,901,625,1
Total 8,570.72 991.17 19,579. ,994.37 6.16 68.21
55
Provision for bad debts made individually: 241,403.36
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 by groups: 15,127,587.81
In RMB
Closing balance
Description
Book balance Bad-debt provision Provision proportion
Undue 1,060,635,810.82 530,317.94 0.05%
1 to 60 days overdue 13,566,062.25 678,303.19 5.00%
61 to 120 days overdue 812,899.90 243,869.97 30.00%
121 to 180 days overdue 1,603,021.06 641,208.42 40.00%
181 to 365 days overdue 4,275,767.39 2,137,883.74 50.00%
1 to 2 years (excluding 1 year) 11,076,680.31 9,969,012.28 90.00%
overdue
Over 2 years overdue 926,992.27 926,992.27 100.00%
Total 1,092,897,234.00 15,127,587.81
Descriptions on basis for determining the group:
Group by aging
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 (including 1 year) 6,134,043,494.78
Including: undue 6,113,655,873.43
1 to 60 days overdue 13,695,933.00
61 to 120 days overdue 812,899.90
121 to 180 days overdue 1,603,021.06
309
Luxshare Precision Industry Co., Ltd. Annual Report 2022
181 to 365 days overdue 4,275,767.39
1 to 2 years 11,076,680.31
2-3 years 925,835.14
Over 3 years 242,560.49
Over 5 years 242,560.49
Total 6,146,288,570.72
(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 6,424,422.80 8,703,165.01 15,127,587.81
group basis
Total 6,665,826.16 8,703,165.01 15,368,991.17
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 receivables:
(4) Accounts receivable with top five closing balance - by debtor
In RMB
Entity name Closing balance of accounts Proportion in total closing Closing balance of bad-debt
310
Luxshare Precision Industry Co., Ltd. Annual Report 2022
receivable balance of accounts receivable provision
Entity 1 1,749,776,540.56 28.47%
Entity 2 1,052,420,233.45 17.12%
Entity 3 675,865,267.60 11.00%
Entity 4 363,192,623.33 5.91%
Entity 5 350,222,262.43 5.70%
Total 4,191,476,927.37 68.20%
(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 150,000,000.00 211,543,626.19
Other receivables 100,596,765.44 423,508,501.65
Total 250,596,765.44 635,052,127.84
(1) 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
Kunshan Lanto Electronic Limited 200,000,000.00
Luxshare Precision Industry (Chuzhou), 150,000,000.00
Ltd.
Total 150,000,000.00 211,543,626.19
2) Significant dividends receivable with aging over 1 year
In RMB
311
Luxshare Precision Industry Co., Ltd. Annual Report 2022
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:
(2) Other receivables
1) Classification of other receivables by nature
In RMB
Nature of receivables Closing book balance Opening book balance
Reserve fund 8,000.00 33,273.76
Security deposit 5,692,864.47 31,756,216.84
Others 95,013,902.20 142,559,720.70
Current account 385,572.60 250,035,350.00
Total 101,100,339.27 424,384,561.30
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) unimpaired)
Balance as at January 1, 876,059.65 876,059.65
2022
Balance as at January 1,
2022 in the current
period
Reversal 372,485.82 372,485.82
Balance as at December 503,573.83 503,573.83
31, 2022
Changes in book balance of provision for loss with significant changes in the current period
□ Applicable N/A
Disclosure by aging
In RMB
312
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Aging Book balance
Within 1 year (including 1 year) 101,100,339.27
Including: undue 101,100,339.27
Total 101,100,339.27
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 876,059.65 372,485.82 503,573.83
Total 876,059.65 372,485.82 503,573.83
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 Reasons for write Procedures for write are generated by
Entity name Write off amount
receivables off 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
Closing balance of
Entity name Nature of receivables Closing balance Aging closing balance of
bad-debt provision
other receivables
Entity 1 Equity transfer funds 95,000,000.00 Undue 93.97% 475,000.00
Entity 2 Security deposit 4,216,931.94 Undue 4.17% 21,084.66
Entity 3 Security deposit 412,839.90 Undue 0.41% 2,064.20
313
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Entity 4 Security deposit 298,575.04 Undue 0.30% 1,492.88
Entity 5 Current account 282,800.00 Undue 0.28%
Total 100,211,146.88 99.13% 499,641.74
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
Investment in 22,124,109,565.8 28,560,179.80 22,095,549,386.0 21,141,692,140.2 28,560,179.80 21,113,131,960.4
subsidiaries 6 6 9 9
Investment in 271,906,254.31 34,372,608.46 237,533,645.85 255,849,450.14 34,372,608.46 221,476,841.68
joint ventures and
associates
22,396,015,820.1 62,932,788.26 22,333,083,031.9 21,397,541,590.4 62,932,788.26 21,334,608,802.1
Total
7 1 3 7
(1) Investment in subsidiaries
In RMB
Increase and decrease in the current period Closing
Opening Closing
balance of
Investee balance Additional Reduced Provision for balance
Others provision for
(book value) investment investment impairment (book value)
impairment
ASAP 273,465,444. 6,121,678.10 279,587,122.
314
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Technology 28 38
(Jiangxi) Co.,
Ltd.
Xiexun
Electronic 244,934,671. 248,697,661.
3,762,990.34
(Ji’an) Co., 32 66
Ltd.
Suining
Luxshare
Precision 2,186,752.24 326,520.16 2,513,272.40
Industry Co.,
Ltd.
Luxshare
Precision 158,059,935. 158,059,935.
Technology 32 32
Co., Ltd.
ICT-LANTO 987,362,500. 987,362,500.
LIMITED 26 26
Luxshare
32,423,829.9 32,423,829.9
Precision
0 0
Limited
Kunshan
Lanto 3,312,908,58 83,102,385.9 3,396,010,97
Electronic 4.49 7 0.46
Limited
Dongguan
Leader
65,842,326.2 65,586,759.6
Precision 255,566.58
2 4
Industry Co.,
Ltd.
Kunshan
Luxshare
516,652,244. 519,241,909.
Precision 2,589,665.39
23 62
Industry Co.,
Ltd.
Wan’an
Xiexun 40,304,678.6 40,503,741.5
199,062.97
Electronic 1 8
Co., Ltd.
Fujian JK
Wiring 96,849,122.7 97,148,970.1
299,847.43
Systems Co., 6 9
Ltd..
Xingning
Luxshare
349,906.26 322,971.92 672,878.18
Technology
Co., Ltd.
Luxshare
Precision
771,166,474. 14,423,058.7 785,589,532.
Industry
22 7 99
(Chuzhou),
Ltd.
SuK
33,746,516.1 33,746,516.1
Kunststofftec
4 4
hnik GmbH
Fengshun 10,140,621.6 10,162,220.5
21,598.85
Luxshare 8 3
315
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Precision
Industry Co.,
Ltd.
Shenzhen
Luxshare
28,560,179.8
Acoustics 6,096,663.82 1,113,836.02 7,210,499.84
0
Technology
Ltd.
Dongguan
Luxshare
1,030,342,56 1,034,817,36
Precision 4,474,799.15
5.09 4.24
Industry Co.,
Ltd.
Luxshare
Automation 45,974,856.1 19,041,055.9 65,015,912.0
(Jiangsu) 3 2 5
Ltd.
Shenzhen
Luxshare 21,000,000.0 21,000,000.0
Standard Co., 0 0
Ltd.
Jiangxi
Luxshare
1,076,908,29 41,050,855.2 1,117,959,14
Intelligent
3.28 4 8.52
Manufacture
Co., Ltd.
Donguan
Xuntao -10,934,325. -10,363,501.
570,824.50
Electronic 99 49
Co., Ltd.
Luxshare
Electronic
2,257,826,41 12,639,377.1 2,270,465,78
Technology
2.24 2 9.36
(Kunshan)
Co., Ltd.
Luxshare
Precision
101,400,809. 106,126,860.
Components 4,726,051.59
28 87
(Kunshan)
Co., Ltd.
Luxshare
Precision
102,105,631. 102,776,306.
Industry 670,674.90
25 15
(Enshi) Co.,
Ltd.
Yongxin
County
Boshuo 851,111.85 256,219.85 1,107,331.70
Electronic
Co., Ltd.
LUXSHARE
-ICT Japan 2,378,020.70 762,892.72 3,140,913.42
Ltd.
Taiwan
Luxshare 120,492,441. 52,594,335.1 173,086,776.
Precision 40 5 55
Limited
316
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Luxshare-IC 34,776,585.5 11,820,355.2 46,596,940.8
T, inc. 6 5 1
Korea
Luxshare-IC 5,160,292.60 675,950.02 5,836,242.62
T Co., Ltd.
LUXSHARE
-ICT
182,206.32 182,206.32
EUROPE
LIMITED
Merry
Electronics 11,737,053.9
4,791,141.39 6,945,912.51
(Suzhou) 0
Co., Ltd.
Kunshan-Lu
xshare RF 30,888,796.6 30,888,796.6
Technology 7 7
Co., Ltd.
Merry
Electronics
2,520,395.08 734,706.78 3,255,101.86
(Huizhou)
Co., Ltd.
Jiangxi
ASAP
1,986,530.58 14,211.86 1,972,318.72
Electronic
Co., Ltd.
Luxshare
Precision
Industry 1,358,413.62 51,171.70 1,409,585.32
(Baoding)
Co., Ltd.
Luxshare
Precision
Industry 1,726,068.70 806,362.91 2,532,431.61
(Shanxi) Co.,
Ltd.
Dongguan
Luxshare
Smart-Link
467,029.39 144,862.94 611,892.33
Electronic
Technology
Co., Ltd.
Guangdong
Luxshare &
Merry 1,058,103.73 1,058,103.73
Electronics
Co., Ltd.
Bozhou
Lanto
4,972,830.12 1,344,494.80 6,317,324.92
Electronic
Limited
Kunshan
Luxshare
Precision 1,291,779.13 1,291,779.13
Mould Co.,
Ltd.
Huzhou
1,216,872.81 894,217.66 2,111,090.47
Jiuding
317
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Electronic
Co., Ltd.
Xinyu
Xiexun 10,480,823.9
6,141,108.78 4,339,715.13
Electronic 1
Co., Ltd.
Luxshare
Precision
130,000,000. 130,000,000.
Industry
00 00
(Suzhou)
Co., Ltd.
Luxshare
iTech 778,806,257. 24,125,424.9 802,931,682.
(Zhejiang) 19 5 14
Co., Ltd.
Bozhou
Xuntao
225,413.58 34,835.88 260,249.46
Electronic
Limited
Dongguan
Luxshare 890,495,013. 16,289,675.2 906,784,689.
Technology 95 3 18
Co., Ltd.
Xuancheng
Luxshare
17,031,506.3 20,548,360.7
Precision 3,516,854.46
0 6
Industry Co.,
Ltd.
Beijing
Luxshare
Acoustic 5,225,761.43 2,284,528.29 7,510,289.72
Technology
Co., Ltd.
Luxshare
Intelligent
Manufacture 1,409,514,24 31,818,887.1 1,441,333,13
Technology 4.73 4 1.87
(Changshu)
Co., Ltd.
Xingning
Luxshare
182,736.53 38,711.39 221,447.92
Electronic
Co., Ltd.
SpeedTech
1,523,857.68 767,235.24 2,291,092.92
Corp.
Luxshare
Technologies 1,579,680.58 2,708,494.19 4,288,174.77
Limited
Changshu
Luxshare
Industrial 110,210,000. 51,457,000.0 161,667,000.
Investment 00 0 00
Management
Co., Ltd.
Kunshan
200,000,000. 200,000,000.
Luxshare
00 00
Enterprise
318
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Management
Development
Co., Ltd.
Luxshare
Precision
Industry 95,071.11 89,149.14 184,220.25
(Jiangsu)
Co., Ltd.
Rida
Intelligent
Manufacture 12,642,132.7
4,564,728.72 8,077,404.07
Technology 9
(Rugao) Co.,
Ltd.
Rikai
Computer 5,760,562,16 10,258,776.0 5,770,757,30
63,635.06
Accessories 5.73 2 6.69
Co., Ltd.
Luxis
Technology 151,471,194. 95,474,836.4 246,946,030.
(Kunshan) 52 7 99
Co., Ltd.
Luxshare
Electronic
15,000,000.0 20,000,000.0 35,000,000.0
Technology
0 0 0
(Enshi) Co.,
Ltd.
Liding
Electronic
55,590,269.6 195,985,704. 251,575,973.
Technology
4 13 77
(Dongguan)
Co., Ltd.
Luxshare
Precision
27,601,994.9 28,601,994.9
Technology 1,000,000.00
8 8
(Xi’an) Co.,
Ltd.
Luxis
Precision
Intelligent 161,382,181. 143,783,418. 305,165,600.
Manufacture 30 80 10
(Kunshan)
Co., Ltd.
Luxshare
Precision
24,375,706.4 24,775,706.4
Technology 400,000.00
4 4
(Nanjing)
Co., Ltd.
Luxshare
Electronic
340,902.08 4,139,431.79 4,480,333.87
(Shanghai)
Co., Ltd.
Ri Ming
Computer
20,493,091.7 21,156,714.4
Accessory 663,622.71
2 3
(Shanghai)
Co., Ltd.
319
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ri Pei
Computer
Accessory 1,302,245.97 727,132.35 575,113.62
(Shanghai)
Co., Ltd.
Sheng-Rui
Electronic
Technology 36,362.89 10,985.44 47,348.33
(Shanghai)
Limited
Ri Shan
Computer
11,733,114.7 12,158,105.9
Accessory 424,991.24
3 7
(Jiashan)
Co., Ltd.
LUXSHARE
-ICT
1,790,298.57 1,218,051.06 572,247.51
(VIETNAM)
LIMITED
Hangzhou
Xuntao
9,999,497.45 3,923,894.98 6,075,602.47
Technology
Co., Ltd.
Dachuang
Precision
Intelligent 15,703,722.7 15,703,722.7
Manufacture 7 7
(Kunshan)
Co., Ltd.
Fengshun
Luxshare
Intelligent 2,104,000.00 2,104,000.00
Manufacture
Co., Ltd.
Luxshare
Intelligent
Manufacture
Electronic 5,000,000.00 5,000,000.00
Service
(Kunshan)
Co., Ltd.
Suzhou
Luxshare
2,454,628.88 2,454,628.88
Technology
Co., Ltd.
Yancheng
Luxshare
Corporate
Management
47,147.95 47,147.95
Services
Partnership
(Limited
Partnership)
Luxshare
Precision
144,254.59 144,254.59
Industry
(Wuhu) Co.,
320
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Ltd.
Dongguan
Huarong
Communicati
31,881.21 31,881.21
ons
Technology
Co., Ltd.
Luxshare
Precision
Components 321,813.49 321,813.49
(Suzhou)
Co., Ltd.
Zhejiang
Puxing
Electronic 66,287.67 66,287.67
Technology
Co., Ltd.
Luxshare
Rechuan
Technology 1,699,063.35 1,699,063.35
(Huizhou)
Co., Ltd.
Luxshare
Automotive
Technology 4,103.52 4,103.52
(Shanghai)
Co., Ltd.
Luxshare
Precision
Industry 299,659.78 299,659.78
(Hubei) Co.,
Ltd.
Luxshare-IC
T (Van
Trung) 531,336.23 531,336.23
Company
Limited
Shenzhen
Huarong
90,908.80 90,908.80
Technology
Co., Ltd.
21,113,131,9 996,052,805. 13,635,379.8 22,095,549,3 28,560,179.8
Total
60.49 37 0 86.06 0
(2) Investment in joint ventures and associates
In RMB
Increase and decrease in the current period Closing
balance
Opening Investme Other Closing
Additiona Declared Provision of
balance Reduced nt profit comprehe Other balance
Investee l cash for provision
(book investmen or loss nsive changes Others (book
investmen dividends impairme for
value) t recognize income in equity value)
t or profits nt impairme
d under adjustmen
nt
321
Luxshare Precision Industry Co., Ltd. Annual Report 2022
equity t
method
I. Joint ventures
II. Associates
22,269,12 -490,975. 21,778,14
Siliconch
4.37 61 8.76
Zhuhai 199,207,7 16,547,77 215,755,4 34,372,60
Kinwong 17.31 9.78 97.09 8.46
Flexible
Circuit
Co., Ltd.
221,476,8 16,056,80 237,533,6 34,372,60
Subtotal
41.68 4.17 45.85 8.46
221,476,8 237,533,6 34,372,60
Total
41.68 45.85 8.46
(3) Other descriptions
4. Notes receivable
(1) Categorized presentation of notes receivable
Item Closing balance Balance at the end of last year
Bank acceptance bill 7,954,368.11 819,766.07
Commercial acceptance bill 88,364,082.98 162,163,969.02
Total 96,318,451.09 162,983,735.09
(2) Notes receivable of the Company that have been endorsed or discounted and are not yet due as of the balance sheet date at
the end of the period
Balance derecognized at the Balance not derecognized at
Item
end of the period the end of the period
Bank acceptance bill 838,479,070.00
Total 838,479,070.00
5. 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 12,732,437,422.46 11,987,063,338.40 9,174,890,300.12 8,531,671,602.47
Other business 220,376,313.08 64,760,595.99 105,254,622.90 33,510,191.72
Total 12,952,813,735.54 12,051,823,934.39 9,280,144,923.02 8,565,181,794.19
322
Luxshare Precision Industry Co., Ltd. Annual Report 2022
Income related 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:
By the period of
transferring products
Including:
By contract term
Including:
By sales channel
Including:
Total
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:
323
Luxshare Precision Industry Co., Ltd. Annual Report 2022
6. Investment income
In RMB
Item Amount recognized in the current period Amount recognized in the prior period
Long-term equity investment income 1,300,000,000.00 2,242,183,081.46
accounted for using the cost method
Long-term equity investment income 16,056,804.17 -4,411,361.63
accounted for using the equity method
Investment income from disposal of 77,056,640.91 30,531,053.98
held-for-trading financing assets
Dividends from other equity instrument 212,413.30
investments during holding period
Income from wealth management products 11,308,785.90 41,433,412.36
Gains from derecognition of financial assets -43,522,172.22 -41,003,477.92
measured at amortized cost.
Total 1,361,112,472.06 2,268,732,708.25
7. Others
XVIII. Supplementary information
1. 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 assets 40,397,780.40
Government grants recognized in the current profit or loss 602,294,263.90
(except for the government grants which are closely related
to the company’s normal business operations and gained at
a fixed amount or quantity according to national uniform
standards)
Profit or loss on assets under entrusted investment or 50,525,057.66
management
Except for effective hedging business related to the 543,762,585.57
company’s normal business operations, profit or loss from
changes in fair value arising from the holding of
held-for-trading financial assets and liabilities, and
investment income from disposal of held-for-trading
financial assets and liabilities, and available-for-sale
324
Luxshare Precision Industry Co., Ltd. Annual Report 2022
financial assets
Other non-operating income and expenses except the above 11,040,674.64
items
Other profit and loss items satisfying the definition of -377,143,056.77
non-recurring profit and loss
Less: Affected quantum of income tax 100,226,804.81
Affected quantum of minority interest 49,598,596.90
Total 721,051,903.69 --
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
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) share (RMB/share)
Net profit attributable to ordinary
23.00% 1.29 1.28
shareholders of the Company
Net profit after deduction of
non-recurring profit and loss
21.38% 1.19 1.18
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
325
Luxshare Precision Industry Co., Ltd. Annual Report 2022
(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
None
4. Others
None
Luxshare Precision Industry Co., Ltd.
Chairman: WANG Laichun
April 27, 2023
326
