Zhejiang Dahua Technology Co., Ltd.
2022 Annual Report
Stock code: 002236
Stock Abbreviation: Dahua
Date of Disclosure: April 2023
This document is a translated version of the Chinese version 2022 Annual Report (“2022 年年度报告”),
and the published annual report in the Chinese version shall prevail.
The complete published Chinese 2022 Annual Report may be obtained at http://www.cninfo.com.cn.
Section I Important Notes, Contents and Definitions
The Board of Directors, Board of Supervisors, Directors, Supervisors and Senior
Management hereby guarantee that the information presented in this report are true,
accurate, and complete without any false records, misleading statements or material
omissions, and they will bear joint and several liability for such information.
Fu Liquan, the Company's legal representative, Xu Qiaofen, chief accountant, and
Zhu Zhuling, person in charge of accounting institution (Accounting Officer) hereby
declare and warrant that the financial statements in the annual report are authentic,
accurate, and complete.
All directors attended the meeting of the Board of Directors for deliberation of this
annual report.
During the reporting period, there was no significant change in the risks faced by the
Company. The Company has been trying to identify all kinds of risks and actively take
counter-measures to avoid and reduce the risks.
(1) Risk of technology upgrading: The smart IoT industry is a typical technology-
intensive industry, featuring extremely fast upgrading. If the Company is unable to keep
up with development trends of industrial technologies, to pay full attention to customers'
diversified needs, and to devote sufficient R&D investments, it may still face the risk of
losing market competitiveness due to discontinuous innovation. By increasing R & D
investment, the Company continues to strengthen research on such core technologies
as AI, video cloud, and machine vision, and reserves product, technology, management
and talent resources for a broader market in the future, so as to achieve sustainable and
steady business development.
(2) Risk of business model change: With the development of network
communications, cloud computing, big data, and AI, among other technologies, as well
as the upgrades of smartphone applications, the business model in the IoT era may have
an impact on the traditional industry development. If an enterprise fails to grasp
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opportunities brought about by the business model transformation in a timely manner, it
may face the risk that the original market pattern becomes broken. The Company
continues to focus on and study the major changes in global economy, industry and
technology, analyze the industry development logic, and predict the evolution of smart
IoT industry, the continuous integration of video, information communication and digital
technologies, and the diversification and uncertainty of customer demands. While
consolidating its current advantageous market, the Company is also actively exploring
and piloting new businesses and new commercial modes, with business and technical
layout.
(3) Risk of declined local fiscal payment capacity: At present, local fiscal debt is
relatively high. If the local fiscal payment capacity declines, it may slow down the growth
of industry demands, prolong the construction period of projects, extend the collection of
capitals, and delay customers' payment. The Company continues to improve the internal
control system and optimize the project review methods, select local projects carefully
and assess project risks systematically with prudent assessment of the market logic and
cash flow balance logic, and reasonable control of risks. In addition, it formulates plans
to deal with potential risks such as cash flow shortage, project delay, and payment delay.
(4) Exchange rate risk: The Company's export transactions have been mostly settled
in U.S. dollars. As our overseas business is in continuous growth, the fluctuation of
exchange rate may affect our profitability. The Company hedges and avoids exchange
rate risks by centralized management of foreign exchange funds and hedging of
purchase payments in line with its main use of U.S. dollars as the settlement currency.
(5) Risk of product safety: The Company attaches great importance to and
continuously strengthens resource investment to ensure safe and reliable system
operations so as to respond to product security risks on the Internet. However, hackers
attacks, computer viruses, physical security vulnerabilities, natural disasters, accidents,
power interruptions, telecommunications failures, terrorism, and warfare events may still
occur from time to time, resulting in security vulnerabilities, system failures, or service
interruptions. The Company has founded a cyber security committee, and set up a
professional security team to develop company-level product safety plans, ensuring
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product safety in the whole process from demands, design, to coding and testing. At the
same time, the Company actively carries out technical exchanges and cooperation with
mainstream safety enterprises, safety evaluation agencies and corresponding industry
associations to provide customers with safe products and solutions.
(6) Intellectual property risk: The promotion of the Company's globalization strategy
and its own brand strategy may expose the Company to intellectual property rights risks
and patent infringement, as well as such risks as business relations, fluctuations in the
public opinion environment, increased legal proceedings and rising costs. With a high
priority on technological innovation, the Company has established a mechanism for the
protection and management of intangible assets such as innovation achievements, own
brands and trade secrets, so as to continuously gather advantageous intellectual
property assets; with the establishment of an intellectual property compliance and risk
control system, the Company continuously strengthens its ability to understand and
master intellectual property laws and regulations as well as the administrative and
judicial environment in the regions where it operates.
(7) Risk of international operations: The Company's products and solutions are
available in more than 100 countries and regions overseas. As such, its international
business operations may be exposed to risks of trade protection (e.g. FCC ban in the
U.S.) and political situations (e.g. local wars) in the countries and regions where it
operates. The Company actively guards against and responds to risks of international
operations by establishing an overseas compliance risk control system. It continuously
strengthens the understanding and adaptability of the laws and regulations as well as the
political and economic environment of the regions where its business is involved, and
formulates differentiated business strategies based on "one country, one policy" in
accordance with the changes in politics and economy of different regions to reduce
operational risks.
(8) Risk of the supply chain: The Company comprehensively reviews all kinds of
potential risks in the supply chain, and strengthens the ability of continuous safe supplies
of key materials to ensure supply chain security by developing backup solutions and
building rich channels with diversified supply sources.
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The profit distribution proposal approved by the board of directors is: Taking
3,326,264,570 as the basis, RMB 2.41 (tax included) of cash dividend and 0 bonus share
(tax included) for every 10 shares will be distributed to all shareholders, instead of
common reserve capitalizing.
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Table of Contents
Section I Important Notes, Contents and Definitions........................................................................... 1
Section II Company Profile and Key Financial Indicators ..................................................................11
Section III Management Discussion and Analysis.............................................................................. 16
Section IV Corporate Governance .......................................................................................................117
Section V Environmental and Social Responsibilities ..................................................................... 144
Section VI Significant Events.............................................................................................................. 145
Section VII Changes in Shares and Information about Shareholders............................................ 173
Section VIII Information of Preferred Shares .................................................................................... 183
Section IX Situation on Corporate Bonds ......................................................................................... 184
Section X Financial Report .................................................................................................................. 185
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Documents Available for Reference
I. Financial statements signed and sealed by the Company's person in charge, the
chief accountant, and the person in charge of accounting department (accounting officer).
II. The original copy of the Audit Report with the seal of the Accounting Firm and
signed and stamped by Certified Public Accountants.
III. The said documents are prepared and placed at the Company's Securities
Investment Department for reference by investors.
6
Definitions
Item of definition Refers To Definitions
Reporting Period Refers To From January 1, 2022 to December 31, 2022
Dahua, company, the company Refers To Zhejiang Dahua Technology Co., Ltd.
Dahua System Engineering, System
Refers To Zhejiang Dahua System Engineering Co., Ltd.
Engineering Company
Dahua Vision Technology Refers To Zhejiang Dahua Vision Technology Co., Ltd.
Dahua Security Network, Operation
Refers To Zhejiang Dahua Security Network Operation Service Co., Ltd.
Company
Dahua Ju'an Refers To Zhejiang Dahua Ju'an Technology Co., Ltd.
Guangxi Dahua Information Refers To Guangxi Dahua Information Technology Co., Ltd.
Guangxi Security Refers To Guangxi Dahua Security Service Co., Ltd.
Xiaohua Technology, Hangzhou
Refers To Hangzhou Xiaohua Technology CO., LTD.
Xiaohua
Dahua Zhilian Refers To Zhejiang Dahua Zhilian Co., Ltd.
Dahua Investment, Dahua
Refers To Zhejiang Dahua Investment Management Co., Ltd.
Investment Management
Guangxi Zhicheng, Dahua Zhicheng Refers To Guangxi Dahua Zhicheng Co., Ltd.
Hangzhou Huacheng, Huacheng
Refers To Hangzhou Huacheng Network Technology Co., Ltd.
Network
Xinjiang Information Refers To Xinjiang Dahua Zhixin Information Technology Co., Ltd.
HuaRay Technology Refers To Zhejiang HuaRay Technology Co., Ltd.
Fuyang Hua'ao Refers To Hangzhou Fuyang Hua'ao Technology Co., Ltd.
Huafei Intelligent Refers To Zhejiang Huafei Intelligent Technology CO., LTD.
Huachuang Vision Refers To Zhejiang Huachuang Vision Technology Co., Ltd.
Guizhou Huayi Refers To Guizhou Huayi Shixin Technology Co., Ltd.
Xinjiang Zhihe Refers To Xinjiang Dahua Zhihe Information Technology Co., Ltd.
Guangxi Huacheng Refers To Guangxi Huacheng Technology Co., Ltd.
Meitan Dahua Technology Refers To Guizhou Meitan Dahua Information Technology Co., Ltd.
Inner Mongolia Zhimeng Refers To Inner Mongolia Dahua Zhimeng Information Technology Co., Ltd.
Xinjiang Zhitian Refers To Xinjiang Dahua Zhitian Information Technology Co., Ltd.
Xinjiang Xinzhi Refers To Xinjiang Dahua Xinzhi Information Technology Co., Ltd.
Xinjiang Huayue Refers To Xinjiang Dahua Huayue Information Technology Co., Ltd.
Leapmotor Technology Refers To Zhejiang Leapmotor Technology Co., Ltd.
Leapmotor Refers To Leapmotor Automobile Co., Ltd.
Tianjin Dahua Information, Tianjin
Refers To Tianjin Dahua Information Technology Co., Ltd.
Dahua
Hunan Dahua Zhilong, Dahua
Refers To Hunan Dahua Zhilong Information Technology Co., Ltd.
Zhilong
Huaxiao Technology Refers To Zhejiang Huaxiao Technology Co., Ltd.
Vision Technology Refers To Zhejiang Fengshi Technology Co., Ltd.
Xi'an Dahua Zhilian, Xi'an Dahua Refers To Xi'an Dahua Zhilian Technology Co., Ltd.
Jiangsu Huaruipin Technology Co. Ltd. (former known as Wuxi
Huaruipin Refers To
Dahua Ruipin Technology Co., Ltd.)
Beijing Huayue Refers To Beijing Huayue Shangcheng Information Technology Service
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Co., Ltd.
Shanghai Huashang Chengyue Information Technology Service
Shanghai Huashang Refers To
Co., Ltd.
Dahua Jinzhi Refers To Zhejiang Dahua Jinzhi Technology Co., Ltd.
Dahua Guangxun Refers To Sichuan Dahua Guangxun Photoelectric Technology Co., Ltd.
Dahua Hong Kong, Dahua (HK)
Refers To Dahua Technology (HK) Limited
Limited
Zhoushan Operation Refers To Zhejiang Zhoushan Digital Development Operation Co. Ltd.
Yunnan Zhili Refers To Yunnan Zhili Technology Co., Ltd
Guangxi Dahua Technology Refers To Guangxi Dahua Technology Co., Ltd.
Zhejiang Huayixin Technology Co., Ltd. (former known as
Huayixin Refers To
“Zhejiang Dahua Memory Technology Co., Ltd.”)
Huaruijie Refers To Zhejiang Huaruijie Technology Co., Ltd.
Chengdu Zhilian Refers To Chengdu Dahua Zhilian Information Technology Co., Ltd.
Chengdu Zhian Refers To Chengdu Dahua Zhian Information Technology Service Co., Ltd.
Chengdu Dahua Zhishu Information Technology Service Co.,
Chengdu Zhishu Refers To
Ltd.
Chengdu Zhichuang Refers To Chengdu Zhichuang Yunshu Technology Co., Ltd.
Chengdu Smart Network Refers To Chengdu Huishan Smart Network Technology Co., Ltd.
Huakong Software Refers To Zhejiang Huakong Software Co., Ltd.
Huacheng Software Refers To Hangzhou Huacheng Software Co., Ltd.
Guizhou Dahua Refers To Guizhou Dahua Information Technology Co., Ltd.
Henan Dahua Refers To Henan Dahua Zhilian Information Technology Co., Ltd.
Huajian Refers To Zhejiang Huajian Technology Co., Ltd.
Zhengzhou Dahua Zhian Refers To Zhengzhou Dahua Zhian Information Technology Co., Ltd.
Dahua International Refers To Dahua Technology International Co., Ltd.
Anhui Zhilian Refers To Anhui Dahua Zhilian Information Technology Co., Ltd.
Anhui Zhishu Refers To Anhui Dahua Zhishu Information Technology Co., Ltd.
Changsha Dahua Refers To Changsha Dahua Technology Co., Ltd.
Tianjin Huajian Refers To Tianjin Huajian Technology Co., Ltd.
Wuhu Huajian Refers To Wuhu Huajian Technology Co., Ltd.
Zhejiang Pixfra Refers To Zhejiang Pixfra Technology Co., Ltd.
Yiwu Huaxi Refers To Yiwu Huaxi Technology Co., Ltd.
Dahua Operation Refers To Zhejiang Dahua Intelligent IoT Operation Service Co., Ltd.
Nanyang Intelligent Refers To Nanyang Dahua Intelligent Information Technology Co., Ltd.
Yibin Huahui Refers To Yibin Huahui Information Technology Co., Ltd.
Chengdu Huazhiwei Refers To Chengdu Huazhiwei Technology Co., Ltd.
IMOU Xi'an Refers To Xi'an IMOU Zhilian Technology Co., Ltd.
Luoyang Zhiyu Refers To Luoyang Dahua Zhiyu Information Technology Co., Ltd.
Huaqi Intelligence Refers To Zhejiang Huaqi Intelligent Technology Co., Ltd.
Chengdu Information Refers To Chengdu Dahua Wisdom Information Technology Co., Ltd.
Dahua USA Refers To Dahua Technology USA Inc.
Dahua Europe Refers To Dahua Europe B.V.
Dahua Middle East Refers To Dahua Technology Middle East FZE
Dahua Mexico Refers To Dahua Technology Mexico S.A. DE C.V
8
Dahua Chile Refers To Dahua Technology Chile SpA
Dahua Malaysia Refers To Dahua Security Malaysia SDN. BHD.
Dahua Korea Refers To Dahua Technology Korea Company Limited
Dahua Indonesia Refers To PT. Dahua Vision Technology Indonesia
Dahua Colombia Refers To Dahua Technology Colombia S.A.S
Dahua Australia Refers To Dahua Technology Australia PTY LTD
Dahua Singapore Refers To Dahua Technology Singapore Pte. Ltd.
Dahua South Africa Refers To Dahua Technology South Africa Proprietary Limited
Dahua Peru Refers To Dahua Technology Perú S.A.C
Dahua Russia Refers To Dahua Technology Rus Limited Liability Company
DAHUA TECHNOLOGY BRASIL COMRCIO ESERVIOS EM
Dahua Brazil Refers To
SEGURANA ELETRNICA LTDA
Dahua Canada Refers To Dahua Technology Canada INC.
Dahua Panama Refers To Dahua Technology Panama S.A.
Dahua Hungary Refers To Dahua Technology Hungary Kft
Dahua Poland Refers To Dahua Technology Poland Sp. z o.o.
Dahua Italy Refers To Dahua Technology Italy S.R.L.
Dahua Tunisia Refers To Dahua Technology Tunisia Limited Liability Company
Dahua Kenya Refers To Dahua Technology Kenya Limited
Dahua UK Refers To Dahua Technology UK Limited
Dahua Germany Refers To Dahua Technology GmbH
Dahua Serbia Refers To Dahua Technology SRB d.o.o.
Dahua India Refers To Dahua Technology India Private Limited
Dahua Turkey Refers To Dahua Guvenlik Teknolojileri Sanayive Ticaret A.S.
Dahua Czech Refers To Dahua Technology Czech s.r.o.
Dahua Argentina Refers To Dahua Argentina S.A.
Dahua Spain Refers To Dahua Iberia, S.L.
Dahua Kazakhstan Refers To Dahua Technology Kazakhstan LLP
Dahua Denmark Refers To Dahua Technology Denmark Aps.
Dahua France Refers To Dahua Technology France SAS
Dahua Lorex (US) Corporation Refers To Lorex Corporation
Dahua Technology Holdings Refers To Dahua Technology Holdings Limited
Dahua New Zealand Refers To Dahua Technology New Zealand Limited
Dahua Netherlands Refers To Dahua Technology Netherlands B.V.
Dahua Morocco Refers To Dahua Technology Morocco SARL
Dahua Romania Refers To Dahua Technology S.R.L
Dahua Uzbekistan Refers To Dahua Vision LLc
Dahua Lorex (Canada) Corporation Refers To Lorex Technology Inc.
Dahua Bulgaria Refers To Dahua Technology Bulgaria EOOD
Dahua Sri Lanka Refers To Dahua Technology China (Pvt) LTD
Dahua Pakistan Refers To Dahua Technology Pakistan (private) Limited
Dahua Thailand Refers To Dahua Technology(Thailand) Co.,LTD.
Dahua Nigeria Refers To Dahua Technology Nigeria Representative Ltd
9
Dahua Israel Refers To Dahua Technology Israel Ltd.
Dahua Mexico Service Refers To VISMEXTECH DHM SERVICIOS, S.A. DEC.V.
Huacheng Netherlands Refers To Imou Network Technology Netherlands B.V.
Dahua Lorex (UK) Corporation Refers To Lorex Technology UK Limited
Dahua Japan Refers To Dahua Technology Japan LLC
Huacheng Hong Kong Refers To Huacheng Network (HK) Technology Limited
Dahua Qatar Refers To Dahua Technology QFZ LLC
Dahua Pacific Refers To Dahua Technology Pacific S.A
INTELBRAS S.A. INDSTRIA DE TELECOMUNICAO
INTELBRAS S.A. Refers To
ELETRNICA BRASILEIRA
Dahua Technology Middle East for Maintenance Single Person
Dahua Saudi Arabia Refers To
Company
Dahua Bengal Refers To Dahua Technology Bangladesh Private Limited
IMOU Australia Refers To IMOU NETWORK TECHNOLOGY AUSTRALIA PTY LTD
IMOU Vietnam Refers To CNG TY TNHH CNG NGH IMOU NETWORK VIT NAM
HuaRay Singapore Refers To HUARAY TECHNOLOGY SINGAPORE PTE. LTD.
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Section II Company Profile and Key Financial Indicators
I. Company Information
Stock Abbreviation DAHUA Stock Code 002236
Stock Exchange Shenzhen Stock Exchange
Company Name in
浙江大华技术股份有限公司
Chinese
Company Abbreviation in
DAHUA
Chinese
Company Name in Foreign
ZHEJIANG DAHUA TECHNOLOGY CO.,LTD.
Language (If any)
Legal Representative Fu Liquan
Registered Address 1187 Bin'an Road, Binjiang District, Hangzhou City
Post Code of Registered
310053
Address
Change of the Company’s On November 9, 2005, the Company’s registered address changed from the 15th floor
Registered Address of Tianyuan Building, 508 Wensan Road, Hangzhou to the present registered address.
Office Address No. 1399 Bixing Road, Binjiang District, Hangzhou City
Post Code of Office
310053
Address
Website www.dahuatech.com
E-mail zqsw@dahuatech.com
II. Contact Person and Contact Information
Secretary of the Board Representative of Securities Affairs
Name Wu Jian Li Sirui
No. 1399 Bixing Road, Binjiang No. 1399 Bixing Road, Binjiang
Contact Address
District, Hangzhou City District, Hangzhou City
Tel. 0571-28939522 0571-28939522
Fax 0571-28051737 0571-28051737
E-mail zqsw@dahuatech.com zqsw@dahuatech.com
III. Information Disclosure and Location
The stock exchange website where the Company
Shenzhen Stock Exchange (http://www.szse.cn)
discloses the annual report
The media outlets and their websites where the Securities Times and Juchao Information Network
Company discloses the annual report http://www.cninfo.com.cn/
Location for Annual Report of the Company Securities Investment Department
11
IV. Registration Change
Unified Social Credit Code 91330000727215176K
Changes in Main Business Since Listing (If any) No Change
Change of Controlling Shareholders (If any) No Change
V. Other Related Information
Accounting Firm Hired by the Company
BDO China Shu Lun Pan CPAs (special general
Name of the Accounting Firm
partnership)
4/F, New Huangpu Financial Plaza, No.61, Nanjing East
Office Address of the Accounting Firm
Road, Shanghai
Name of Signing Public Accountant Zhong Jiandong, Zhang Junhui
The sponsor institution hired by the company to perform the continuous supervision in the reporting period
□ Applicable Not applicable
The financial adviser hired by the company to perform the continuous supervision in the reporting period
□ Applicable Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company needs retroactive adjustment or restatement of accounting data in prior years or not
□ Yes No
Increase/Decrease
Compared with the
2022 2021 2020
Same Period of the
Previous Year
Operating revenue
30,565,370,012.64 32,835,479,336.85 -6.91% 26,465,968,181.10
(RMB)
Net profit attributable
to shareholders of
2,324,356,092.20 3,378,410,889.60 -31.20% 3,902,778,775.35
the listed Company
(RMB)
Net profit attributable
to shareholders of
the listed company
1,580,552,515.57 3,103,383,711.14 -49.07% 2,735,061,861.04
after deducting non-
recurring gains and
losses (RMB)
Net cash flow
generated by
1,053,587,649.46 1,727,560,748.01 -39.01% 4,401,533,068.39
operational activities
(RMB)
Basic Earnings per
0.79 1.15 -31.30% 1.34
Share (RMB/Share)
Diluted Earnings per
0.79 1.15 -31.30% 1.33
Share (RMB/Share)
Weighted Average 9.49% 15.58% -6.09% 22.09%
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ROE
Increase/Decrease at
the End of the
Current Year
End of 2022 End of 2021 End of 2020
Compared with the
End of the Previous
Year
Total assets (RMB) 46,252,893,804.54 44,055,872,021.97 4.99% 36,595,034,080.75
Net assets
attributable to
shareholders of the 25,836,798,918.61 23,617,602,513.55 9.40% 19,773,030,426.40
listed company
(RMB)
The Company’s net profits before and after deducting non-recurring profits and losses, whichever is lower, are
negative in the last three fiscal years, and the audit report of last year shows that there is uncertainty in the Company’s
ability to continue as a going concern.
□ Yes No
The net profits before and after deducting non-recurring profits and losses, whichever is lower, is negative.
□ Yes No
VII. Differences in Accounting Data Under Domestic and Foreign Accounting
Standards
(1) Differences of net profits and net assets in the financial reports disclosed according to the
international accounting standards and Chinese accounting standards
□ Applicable Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the
financial reports disclosed according to international accounting standards and Chinese accounting standards.
(2) Differences between the net profits and net assets in the financial reports disclosed
according to the overseas accounting standards and Chinese accounting standards
□ Applicable Not applicable
During the reporting period of the company, there is no difference between the net profits and net assets in the
financial reports disclosed according to overseas accounting standards and Chinese accounting standards.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 5,847,968,885.65 8,239,116,955.32 7,084,782,632.05 9,393,501,539.62
Net Profit Attributable
to Shareholders of 355,574,576.71 1,164,274,391.00 173,252,223.18 631,254,901.31
the Listed Company
Net profit attributable
to shareholders of
345,713,991.57 909,925,852.54 328,220,836.46 -3,308,165.00
the listed company
after deducting non-
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recurring gains and
losses
Net cash flow
generated by -2,473,101,850.64 745,307,203.88 844,416,967.60 1,936,965,328.62
operating activities
Whether the above financial indicators or their totals are significantly different from the financial indicators disclosed in
the Company’s quarterly and semi-annual reports
□ Yes No
IX. Non-recurring Gains and Losses Items and Their Amounts
Applicable □ Not applicable
Unit: RMB
Item Amount in 2022 Amount in 2021 Amount in 2020 Note
Profits or losses from disposal of
non-current assets (including the
694,299,856.79 47,555,142.92 1,136,183,266.58
write-off for the accrued
impairment of assets)
The government subsidies
included in the current profits and
losses (excluding the government
subsidies closely related to
regular businesses of the 245,885,438.60 217,227,114.97 207,848,405.50
Company, in line with national
policies, and consecutively
received by a standard quota or
quantity)
Gains or losses from investment
or asset management entrusted to -40,735,247.48 104,368,534.48 9,327,707.25
others
Gains or losses from debt
-414,996.80 -56,076.90
restructuring
Profits and losses resulting from
the changes in fair value for
holding trading financial assets
and trading financial liabilities, and
investment income from disposal
of trading financial assets, trading
-14,286,907.57 81,148,682.33 196,450,796.20
financial liabilities, and financial
assets available for trading,
excluding the effective hedging
businesses related to the regular
business operation of the
Company
Reversal of the receivables
depreciation reserves for separate 2,151,340.72 2,384,082.35
impairment test
Non-Operating Revenue and
5,535,034.55 -1,402,020.22 -9,645,488.43
expenses other than the above
Other gains and losses items that
-134,254,380.85 -40,319,290.13 -92,017,627.11
fit the definition of non-recurring
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gains and losses
Less: Impact of income tax 49,067,502.67 78,172,720.73 254,721,170.78
Impact of minority equity
-34,690,941.34 55,322,188.26 28,093,057.25
(after tax)
Total 743,803,576.63 275,027,178.46 1,167,716,914.31 --
Other gains or losses that fit the definition of non-recurring gains or losses:
□ Applicable Not applicable
The Company has no other gains or losses that fit the definition of non-recurring gains or losses.
Note for the definition of non-recurring gains and losses listed in the No. 1 Explanatory Announcement on Information
Disclosure for Companies Issuance Their Securities to the Public - Non-recurring gains and losses, as recurring gains
and losses.
□ Applicable Not applicable
The Company did not define any non-recurring gains and losses listed in the No. 1 Explanatory Announcement on
Information Disclosure for Companies Issuance Their Securities to the Public - Non-recurring gains and losses as
recurring gains and losses.
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Section III Management Discussion and Analysis
I. Industry Overview during the Reporting Period
2022 marks a year full of challenges. With the global economy recession and market demand
shrinking due to multiple unfavorable factors such as inflation, intensified trade friction, supply chain
turbulence, and regional conflicts. The smart IoT industry encounters a periodic slowdown in the
growth rate.
Despite the severe external situation, when it comes to the essence of industry development,
digital economy and industrial digitization are still important driving forces for global economic growth
and the smart IoT industry still possesses broad development space and market prospects. At the
same time, with the development of AI foundation model technology, AI is gradually entering the AGI
(General Artificial Intelligence) development stage, which will further accelerate the promotion and
application of digital and intelligent technology globally.
The integrated development of digitalization and AGI will bring a new round of development cycle
to the industry, so as to meet the demand for digital upgrading of traditional industries. The integrated
application of video-centric IoT sensing technology, foundation model and multimodal technology will
satisfy more fragmented market demands, and will be more deeply integrated into urban
management, enterprise production and operation, and other business fields.
II. Main Businesses of the Company during the Reporting Period
1. Main businesses and products
Dahua is world-leading video-centric smart IoT solutions and service provider. Supported by two
major technological strategies, AIoT and the IoT Digital Intelligence Platform, the Company effectively
integrates technologies such as artificial intelligence, big data and IoT into its products and solutions
to serve the digital innovation of cities and the digital intelligent transformation of enterprises,
facilitating the continuous improvement of the Company's status in the smart IoT industry.
In the field of urban business, focusing on the business vision of "secure society, orderly city,
green development for the benefit of people, and enhanced governance efficiency", the Company has
established a new type of smart city ecology of "unified architecture, utilization and compatibility with
existing facilities, capacity sharing, and commercial openness". In industries such as transportation,
traffic police, ports, public livelihood, and ecological environment, we have gained insights into over
5,000 segmented scenarios and launched over 200 industry solutions; in the field of enterprise
business, advanced technologies such as AI and big data are deeply integrated with industry
scenarios, providing insights into over 3,000 segmented business scenarios, accumulating over 300
industry solutions, and achieving full coverage of enterprise "safety system, production value, and
business management".
Faced up with the leap in business complexity and granularity, the Company adheres to the
principle of "technology iteration guided by business, and business upgrading driven by technology
iteration", and continues to increase investment and construction in the two major technology
strategies of AIoT and the IoT Digital Intelligence Platform. On the one hand, the Company has
constructed a full stack AIoT capability centered on video and continuously deepens and enriches
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scenario adaptation and industrial service capabilities to provide the market with more diversified
sensing, connectivity, computing, and intelligent services. On the other hand, by adhering to the
technology strategy of IoT Digital Intelligence Platform, the Company speeds up the construction of
comprehensive services and agile development capabilities for solutions based on data and business
requirements, continues to create business scenarios and paradigm applications, so as to establish a
digital transformation intelligence base with full coverage of private cloud, public cloud and technology
development, and improve its business value. With the development and maturity of technologies
such as multimode and foundation model, video-centric multimodal fusion sensing intelligence
technology will bring more efficient and more scalable technologies, products and solutions of higher
quality to digital transformation markets of cities and enterprises.
Company Strategy Map
On the basis of technological research and innovation, the Company continues to increase
investment and construction in the foundation of its "5 Full" capabilities that include "full sensing, full
intelligence, full connection, full computing, and full ecosystem", so as to establish an industry-leading
video-centric IoT infrastructure R&D and solution closed-loop service, which includes "multimodal
sensing of video and non-video, full coverage of sensing cognitive intelligence, diversified connectivity,
and synchronization of end-user, edge, and cloud", based on an integrated technical support system
from "basic IoT sensing, intelligent synchronization and integration of end-user and edge, data
intelligent processing, to full link information security protection", thus continuously maintaining the
leadership of its technologies and products in the industry. At the same time, the Company actively
creates an open, cooperative, and win-win digital technology ecosystem to make digital infrastructure,
industry paradigm applications, algorithm capabilities and data intelligence available to partners and
industry developers.
Full sensing: To establish an industry-leading all-round sensing system through visual, multi-
spectrum, time, space and other dimensions to maintain precise adaptation of products and
technology to scenarios, so as to faithfully present the physical world in the digital way.
Full connection: To construct a data connectivity system that meets the needs of diverse scenarios,
consolidate the foundation of data value connectivity that integrates IoT sensing and information
interconnection, and continuously improve the ability of IoT sensing access and integration;
Full computing: To accumulate resources in image computing power, AI computing power, general
computing power, etc., and build a full-network computing architecture featuring unified scheduling
and collaborative computing power and algorithms of end-user, edge, and cloud.
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Full intelligence: To realize the closed-loop from sensing intelligence to data intelligence and to
business Intelligence, the Company has built an autonomous system based on algorithms, big data
and business platforms to meet industry needs and to facilitate value identification in client data and
intelligent decision-making, namely full intelligence.
Full ecosystem: To open up the ecology of business, software, algorithms, hardware, etc. for
cooperation, build an ecosystem featuring co-construction, win-win outcome and symbiosis, and
create a smart IoT community
1.1 Full Sensing
The Company continues to develop multidimensional awareness products and technologies,
refine and improve the technical framework of "Universe 6D Awareness" products, and continuously
develop industry and scenario applications, bringing richer products and more advanced technology.
Technical Framework of Universe 6D Awareness Product
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By steadily improving patented core algorithms, the Company has continuously made
Full color Full space Full time Full frequency
Snow Owl/Aurora 3.0 Super Depth of Field 3.0 Dicoria 2.0 Radar Vision Convergence
AI Beauty... Spatiotemporal Clustering... Intelligent Trajectory... Thermal Imaging Linkage...
4K Aurora Starship/Nimble Series Skyscanner/Aura Series Universe/Mini Hubble
Create barrier products with business as the orientation and scenario as the core.
In 2022, the multidimensional awareness technology was further implemented. In the full-space
dimension, the application of technologies such as panoramic multi-camera mosaic, super depth of
field 3.0, and multi-camera multi-direction brings wider and further views for videos, and achieves
continuous clarity. In the full-time dimension, technologies such as Dicoria 2.0, predictive focusing,
adaptive tracking of moving targets, and flicker elimination have achieved precise capture of dynamic
targets and realistic restoration of moving images; In the full-color dimension, technologies such as
4K Aurora 3.0, automatic wide dynamic, full color ultra sensitivity, and intelligent zoned fill light ensure
the adaptation for all weather and scenarios; In the full-frequency dimension, by integrating radar,
thermal imaging, hyperspectral, laser and other technologies, the products' sensory antennas are
greatly extended, further expanding the range of sensing.
1.1.1 Video sensory products
By applying leading technologies within the visible light spectrum range in an innovative manner,
new series such as full-color ultra-sensitivity, panoramic multi-details and universe intelligence are
launched. At the same time, the high-definition coaxial series has been iteratively upgraded.
(1) Full-color ultra-sensitivity
The new 4K ultra high-definition aurora product has been launched. By applying a 20 Tops main
control chip, a 1/1.2 inch large target area ultra-sensitive sensor, ion coating and other technologies,
images are enhanced based on AI computing power, greatly improving night vision image effects,
reducing noise, and achieving more realistic colors and accurate restoration of target objects. The
Skyscanner PRO Series feature upgraded patented technologies such as Super Depth of Field 3.0,
Dicoria 2.0, AI Snow Owl, and intelligent zoned fill light as well as glass heating and flicker elimination
technologies, greatly improving environmental adaptability against adverse scenarios such as rain,
snow, and ultra-low illumination. Full-color ultra-sensitive series
(2) Panoramic multi-details
With the development of industry application demands and technologies, the form of high-end
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intelligent products has gradually evolved from unidirectional single camera to unidirectional multi-
camera and multi-directional multi-camera, achieving the linkage of panoramic + detail, and
panoramic + PTZ. A single device can grasp the overall situation, control details and adapt to various
application scenarios with wider views and clearer images. Dahua Starship Skyline adopts the
Company's innovative design of triple-camera structure, loads the module sub-cabin, and can expand
the functions of radar, multi-code and laser light filling, so as to meet the needs of customers in more
dimensions. Aura PRO is designed with innovative three-layer panoramic structure integrated with
full-structure intelligence and up to 25X optical zoom to achieve the application of omnidirectional
panoramic view, panoramic details, and the linkage of gun camera and ball camera. Mini Hubble
breaks through the technical problems in the industry such as obvious seam and large blind area of
medium-and-low altitude multi-view stitching. Through the innovation of basic materials and structural
design, mini Hubble realizes lighter structure, more convenient installation, more suitable for B-end
scenario, and empowers hundreds of industries.
Panoramic multi-details
(3) Universe intelligence
With the development of industry business applications, industry intelligent products need to
achieve more adaptability to scenario applications, more in-depth business processes, and more
professional and precise intelligent detection. The Company continues to launch intelligent product
series to meet the business needs of all industries, providing intelligent services for industries such as
public security, traffic management, emergency command, urban operation, livelihood services,
industrial production, education and medical care, and smart energy, enabling digital transformation
of all industries.
Skyline, the product for roadside parking, features ultra-sensitive night vision, 3D vehicle chassis
projection, binocular 8-parking space relay, and eight intelligent vehicle detection algorithms, and can
accurately detect parking events and match parking space associations, assisting in the intelligent
development of urban parking facilities. The Company has launched a series of products for the
energy industry such as mining, explosion-proof, and low-power transmission lines, loaded with 5G,
Wi-Fi6, long-distance transmission technology, and various intelligent applications, to meet the
application needs of explosion-proof, anti-corrosion, and high-temperature resistance scenarios. The
vehicle road collaborative camera features extremely low latency, high-precision timing, precise
exposure timestamps, open computing power, and multi-business parallelism, leading to a safer and
more efficient collaborative intelligent transportation. The new generation of intelligent building
products supports simultaneous recognition of multiple people, voice recognition, and customized
voice prompts for scenarios, and meets the requirements of undisturbed sensing and recognition at
night, greatly improving recognition accuracy and traffic efficiency. It also supports functions such as
access control permission verification, ID card verification, call intercom, attendance, helmet
recognition, mask recognition, and is widely used in industries such as residential buildings, campus,
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hospitals, construction sites, enterprises, and governments.
Universe intelligence
(4) Coaxial HD
Through more than a decade of continuous exploration and innovation, Dahua HDCVI
technology and products have achieved real-time transmission of high-definition images,
synchronous transmission of audio and video, environmental monitoring, and environmental
awareness. The Company continues to make innovation for customer business scenarios. Based on
full-color technology, Dahua has launched its full-color products, achieving 7*24 hour color image
output. The time-sharing light compensation technology is adopted to effectively alleviate the light
pollution problem. Dahua has innovatively introduced the scenario adaptation technology, facilitating
the products to adapt to various scenarios without manual operation by customers and bringing great
convenience to customers. The active defense products are combined with intelligent functions,
which can carry out event prediction and intervention, reducing the probability of event occurrence
and protecting the property safety of users.
Coaxial HD
1.1.2 Full-frequency domain sensing products
(1) Non-video sensing products
In a more sensitive, extensive and multidimensional way of awareness, non-video sensing
products empower the digital transformation of all walks of life in an all-around way.
Deeply rooted in wireless technology, the Company has been continuously innovating its alarm
products. The release of the AIRFLY 3.0 Wireless Protocol Standard has greatly enhanced device
stability; the use of diversity antenna technology has significantly increased wireless transmission
distance; the optimization of wireless channel adaptive selection technology has enhanced the anti-
interference ability; and the standardization and modularization of wireless design have improved
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development efficiency. Dahua has released multiple wireless products in the Airshield Series, and
has been continuously optimizing the alarm cloud business, and enhancing the competitiveness of
the solution. The wired intrusion alarm solution is closely aligned with industry and customer demands.
The Company continuously optimizes product functionality, improves their usability and optimizes
construction wiring plans, so as to reduce construction costs, and continuously create value for
customers. In the field of transportation, the Company is the first to introduce dynamic truck scales
featuring high measurement accuracy, strong deformation resistance and convenient debugging. The
products can achieve precise weighing without stopping the vehicles, facilitating the overload
operation management of large trucks. In addition, products such as radar velocimeters, pedestrian
flow radars, visibility detectors, and sentinel sonar are applied in business to meet the demands of
industry customers, assisting in road traffic safety management.
Non-Video Awareness
Airshield Series Wireless Alarm Products
(2) Universe 6D sensing products
The universe 6D sensing products break through the awareness ability of visible light bands, and
comprehensively enhance the adaptability, fusion, and correlation of awareness based on an
innovative combination of space, time, color, brightness, and multi-spectral band technology, making
the digital world more realistic. The Universe Hubble Series effectively integrates visible light and
thermal imaging and supports various intelligent applications, so as to achieve high-definition
panoramic view, long-distance target detection and tracking, and can be applied to industries such as
forest fire prevention, land and resource protection, river management, and border and coastal
defense; The hyperspectral water quality detector is equipped with a built-in 10 Tops ultra powerful
computing power chip, high-precision liquid level radar, and GPS positioning module, breaking
through the limitations of the three primary colors of the human eye. It uses a large amount of data to
stimulate AI neural network training iterations, and multi-camera and multi-awareness modules to
detect and ensure the safety of water quality in the water area; With the deep integration of millimeter
wave radar technology and video technology, the products of Radar Vision Series are widely used in
business fields such as traffic flow detection, security notice, traffic event detection, and holographic
display; The newly launched 6-lane speed measurement column solves the speed measurement
problems in the scenarios where high-speed vehicles are merging or closely followed in multiple
lanes, further empowering traffic safety management.
Universe 6D Awareness
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1.1.3 Audio sensing products
Dahua has released multiple categories of audio products, including industrial audio, consumer
audio, conference audio, and functional audio, forming a multimodal audio and video solution. The
Company possesses the ability to develop, design, produce, evaluate, and certify full link audio
products for single body-cavity-single board-hand board-whole machine in free field, diffusion field,
and pressure field environments. Dahua has set up professional acoustic laboratories, reverberation
laboratories, electrical and acoustic testing instruments, as well as simulation software. The core
technology stack can achieve audio acquisition, transmission, modulation and demodulation
processing, and can also load solutions such as audio encoding and decoding, audio quality
processing, audio event detection, and speech recognition.
(1) Intelligent audio
With core technologies such as voiceprint feature recognition, sound source positioning and
open algorithm model training, the Company has built a series of intelligent audio products with a
close loop of front-end collection, edge analysis, and central business. The products can be applied
to business scenarios such as industrial equipment exception monitoring, pipeline leakage monitoring,
animal chirping recognition, campus bullying control, and car whistle control.
(2) Interactive audio
The Company has released products such as public broadcasting, professional sound
reinforcement, and high-definition pickup, and can provide a full range of products and solutions. The
broadcasting system can be integrated with the platform and linked with video monitoring to achieve
unified control. The sensing of events through video monitoring, the analyzing and decision making
on business platforms, and the controlling executed by the broadcasting systems form the closed-
loop of business. The professional sound reinforcement system can be integrated with the large
screen display system to be applied in venues such as lecture halls, large, medium and small
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conference rooms, opera houses, banquet halls, sports venues, etc., creating audio and video
interaction and immersive experience to meet customers' needs for high-quality audio scenarios.
1.1.4 Control interactive products
The world of physics is rich and colorful. In many scenarios, there are rich interactions between
people and people, as well as people and things. Multidimensional awareness is applied to refine the
real world, with multivariate connection to collect data and intelligent computing to build scenarios of
digital intelligence, so as to finally make things an extension of people's touch, improve the interaction
between people and things, and bring people closer. The Company has launched various control
interactive products in various fields and scenarios such as smart office, vehicle management,
personnel access, access control intercom and alarm, industry, and safety supervision, empowering
the development of industries.
Residence sector
(1) Scenario of vehicle management and guidance
Dahua has perfectly combined video with display, and mechanical control, and continues to
release the "Ruijie" barrier gate all-in-one machine and snap-display all-in-one machine; It has
released an intelligent sound-light police parking space detection camera that supports electric micro
PTZ platform debugging for more convenient deployment; The products support functions such as
new energy vehicle parking space management, VIP parking space management, and non-standard
parking alarm, bringing better parking guidance experience and more standardized parking
management. Facing the rapid closed-loop of parking business, the Company continues to release a
series of products such as entrance and exit management terminals, guidance managers, and
parking management terminals to help reduce costs and increase efficiency. By connecting the
parking management service to the cloud platform, the on-site pre-payment and non-contact payment
can be realized, and finally vehicles can enter and leave the parking lot with non-contact pass-
through, bringing the superlative experience to users.
(2) Scenario of personnel entrance and exit
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The Company has released a new second-generation control intelligent pedestrian passage gate,
which adopts Dahua's universe industry self-developed technology and relies on the accumulation of
experience in all industries and scenarios to continuously strengthen the core components of the
mechanical control part, so as to match complex application scenarios; By adopting a new aviation
stretching process for production, the external surface is free of polishing, while the infrared selection
standard is established to ensure normal use in harsh weather such as rain and fog; The products
adopt large angle, high-power, IP67 grade infrared radiation tubes to reduce construction leveling and
alignment requirements among equipment to realize rapid installation.
(3) Scenario of building access control
Deep intelligent algorithms allow precise recognition, fast and insensitive recognition, and
simultaneous recognition of multiple people in various complex light environments. At the same time,
the intelligent detection capability can effectively defend against various prosthetic methods such as
electronic photos, videos, and 3D headsets, comprehensively improving the security of the control
system. Through the intelligent phonetic algorithm, the voice command can directly control the access
control equipment to realize contactless call intercom and code scanning door opening. In addition,
the broadcast voice can be customized through TTS voice synthesis technology, and the interactive
experience can be comprehensively improved through intelligent video image processing technology.
The devices support advertising functions and can be used as electronic door signs or
park/community announcements and commercial advertisements, empowering the value addition of
business. Integrating access control, intercom, attendance, and advertising functions, the intelligent
access control series products can be used in multiple scenarios, saving equipment procurement,
management, and operation costs, meeting the demands of various scenarios such as enterprise
parks, communities, campuses, construction sites, stations, hospitals, etc., and comprehensively
improving the competitiveness of the solution as well as the user experience.
(4) Scenario of building video intercoms
By combining functions such as intelligent recognition, intelligent video, visual intercom, elevator
linkage, and abnormal alarm, the Company has released a series of doorstep and indoor unit
products and corresponding solutions to simplify the business process among visitors, owners, and
property management centers. The products have access to intelligent cloud platforms and wireless
cloud, making the deployment easier. Personnel can answer visitor calls and receive property
information anytime and anywhere. Remote door opening and visual intercom have been realized,
effectively improving the efficiency and safety management ability of personnel at community
entrances and exits, bringing more convenience to property owners, and improving property
management efficiency.
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(5) Scenario of building emergency alarm
The Company has launched SOS Terminals specifically designed for communities, hospitals,
schools, and other public places, which support multiple transmission methods such as 4G, PSTN,
and wired networks. The terminals will actively register with the management platform or machine to
enable remote alarm through video; it can also trigger emergency alarm through intelligent voice
recognition, so as to save time for those seeking help and deter criminals, ensuring the safety of
public places.
Industrial sector
Dahua has launched an industry-leading series of intelligent air switch products, integrating
intelligent lighting and intelligent air conditioning control terminals. With rich experience in the field of
control and connection, the Company is able to combine wireless networking technology and digital
perception computing with traditional low-voltage appliances to achieve data collection and remote
control. Through a visual data management platform, risk assessment of power consumption units
and AI intelligent application strategies can be implemented based on big data analysis, so as to build
a safe electricity IoT environment for customers, promote efficient and intelligent electricity
management new models, integrate digital intelligence technology into electricity consumption, thus
assisting in realization of green and energy-saving buildings.
Safety supervision sector
In the safety supervision sector, Dahua has launched a series of products such as environment
monitoring all-in-one machine, machine room inspection all-in-one machine, IoT host and dynamic
ring host. Through the collection and analysis of various types of sensors for atmospheric
environment, power environment, water conservancy, and intrusion, as well as the intelligent
interaction with front-end video, the Company has realized the comprehensive control of power
consumption, power, environment and security data of the data center, as well as centralized
monitoring and unified operation and maintenance services to enable the operation and maintenance
managers to timely control the on-site operation status, and achieve innovative applications such as
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energy conservation and consumption reduction, automatic inspection, and safety supervision in
enterprises.
In the future, the Company will continue to expand in the field of control interaction, and further
optimize diversified interaction control terminals, ubiquitous and scenario-based intelligent algorithms
to create the sense of nature and immersion and bring users a superlative experience.
1.2 Full Connection
The vigorous development of multidimensional awareness has broken the traditional network
boundary, and gradually built the "multivariate connection" ability from information, people, things and
scenarios to services with the operation and maintenance management system as the framework.
Dahua provides end-to-end products, solutions, and value connection services that are suitable for all
scenarios to promote the comprehensive upgrade of the network in the digital intelligence era through
"channel upgrade, interaction amplification, security enhancement, and platform integration".
1.2.1 Wired transmission
In the field of PoE technology, the Company has comprehensively upgraded from standard PoE
to intelligent PoE 3.0, bringing stronger, wider and more convenient power over Ethernet services.
Industrial grade switches provided by Dahua feature high-quality industrial design standards,
excellent fast ring network, and multi-level management functions, providing data access capabilities
in demanding scenarios. The "PoE 3.0" switch, industrial grade switch, and intelligent cloud
management switch support PoE BT 90W, intelligent PoE, ultra long distance PoE, handheld
operation and maintenance, industrial ring network ERPS, and other functions to meet the needs of
customers for high-power access and efficient operation and maintenance scenarios. These products
can ensure high-speed and reliable data transmission in various harsh environments. At the same
time, with the advanced distributed switch matrix architecture, the high-performance multi-core CPUs
and switching chips are used to build a business control integration. The ultra-high switching capacity
and compact body provide more access channels to meet the demands of different scenarios.
1.2.2 Mobile IoT/wireless transmission
The Company has released UWB, Bluetooth AOA, Bluetooth Beacon, GPS/BD, active/passive
RFID, LoRa and other gateway products to provide submeter-level high-precision positioning and
regional meter-level positioning, realize long-distance and low-power IoT coverage, and cooperate
with video applications to form a variety of integration solutions, so as to meet diversified application
needs of customers, and support the intelligent upgrading of apps in energy, building, retail, education
and other industries.
Wireless products such as wireless AP/AC, Wi-Fi 6 wireless router, industrial-grade 4G/5G router,
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industrial-grade 5G CPE, wireless bridge, etc., integrate the functions of Mesh networking, multi WAN
load balancing, TDMA technology, smart antenna and so on to realize the innovative integration of
video, 5G and Wi-Fi 6 technologies, solve the full wireless coverage in the 5G era, and significantly
improve the wireless transmission performance under the condition of constantly improving video
resolution and increasing access quantity. Dahua has upgraded and optimized point-to-point and
point-to-multipoint data feedback for wireless bridge products, achieving the separation of data and
video services and making the services more stable and reliable. AP/AC enterprise wireless coverage
has been integrated with routing control to provide full wireless coverage with low latency, no wiring
and roaming Internet access for enterprise, office and other scenarios.
1.2.3 Cyber security and privacy protection
Products such as video security access gateway, security access control gateway, security
boundary, video protection system, video encryption server, and video security certificate are
integrated with security protection measures such as security access, stream integrity verification,
stream encryption, key management, certificate authentication, etc., to provide security schemes of
secret evaluation, classified protection, video watermark, 35114, so that video data can be collected,
transmitted, stored, shared and used in an encrypted and protected manner, providing users with
end-to-end protection for the entire life cycle of data.
Dahua has attached great importance to network security and privacy protection. Since the
promulgation of laws and regulations such as the Cybersecurity Law of the People's Republic of
China, the Data Security Law of the People's Republic of China, the Personal Information Protection
Law of the People's Republic of China, and the General Data Protection Regulation of the European
Union, the Company has actively responded by establishing a Network Security and Data Protection
Compliance Team to closely monitor the dynamics of global cyber security laws and regulations, fully
carry out internal interpretation and external communication, and develop compliance strategies that
align with the business. At the same time, strictly complying with legal and regulatory requirements,
the Company has organized comprehensive risk assessment and compliance audit. In addition, the
Company has collaborated with third-party authorities to introduce external evaluation and
certification, and has passed ISO 27001 Information Security Management System Certification, ISO
27701 Privacy Information Management System Certification and IoT service privacy protection
certification.
In order to further improve the level of cyber security protection for products and services, and
better protect customer security rights and interests, during the reporting period, the Company has
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upgraded and iterated the security baseline to Version 2.3, and the privacy baseline to Version 2.1.
With the Security Baseline and Privacy Baseline based on and practicing the design principle
centering on security and privacy, Dahua has adopted identity authenticity, permission consistency,
non-repudiation, confidentiality, integrity, availability, and privacy as the core security elements to
construct a multidimensional security framework covering physical security, system security,
application security, data security, cyber security, and privacy protection.
In the aspects of research and application of key security and privacy technologies, TEE trusted
computing, HIDS host intrusion detection, code obfuscation reinforcement, end-to-end encryption and
other technologies have been widely integrated and applied, comprehensively improving the active
defense capabilities of products and services. Due to the continuous improvement of product safety
protection capabilities, during the reporting period, Dahua successfully passed authoritative
certifications such as ETSI EN 303645, CC EAL 2+, and IoT Reassuring Product.
Dahua PSIRT actively participates in industry and public activities and has joined multiple
authoritative vulnerability management and technical organizations, including the China National
Vulnerability Database (CNVD), China National Vulnerability Database of Information Security
(CNNVD), and China National Industrial Cyber Security Vulnerability Database (CICSVD). By fully
leveraging the role as a member within the organizations, Dahua has established a collaborative
network security threat information sharing mechanism. During the reporting period, Dahua was
awarded the title of "2022 Advanced Enterprise in Vulnerability Management Practice" by the MIIT
Cyber Security Threat Information Sharing Platform.
1.3 Full Computing
In the era of comprehensive digital transformation, Cloud of Things has accelerated its coverage
in various industries and generated diversified data. Computing power has become a new productivity.
In the face of diverse scenarios, it is difficult to effectively meet the ever-changing demands through
the same kind of computing power. The Company's intelligent computing makes breakthroughs in
computing power construction, architecture complementation, and computing integration. Through
virtualization, container and other deployment methods, the Company can quickly realize the full
compatibility of high-performance computing resources, adapt to all kinds of CPUs, GPUs and NPUs,
fully realize resource pooling, and build a continuously driven full-stack innovation.
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Computing power construction: Server+AI chip is the foundation for building various
computing, as well as enabling systems and software. Relying on its solid accumulation in
technology, the Company has achieved resource pooling of computing resources (such as image
computing power, AI computing power, general computing power, and specialized computing
power) and full-stack adaptation, and constructed the sustainable driven full-stack innovation. At
the same time, in order to adapt to the constantly changing external environment, the Company
has actively expanded the range of domestic strategic partners to define diverse computing
power based on rich application experience and understanding of computing power.
Complementary architecture: The Company has tailored two computing architectures in the
differentiated long-tail scenarios:
Embedded computing architecture: By improving single chip performance and combined
computing power, the Company attempts to fully unleash the performance and value of
specified algorithms, and continuously launch leading and professional AI products;
Video cloud computing architecture: By implementing the intelligent scheduling of pooled
computing power, the unified scheduling of algorithm library end-user, edge, and cloud
computing power resources across the entire network, and the access of third-party
algorithms, the Company has achieved high concurrency, high throughput, and high
efficiency computing, so as to continuously empower open and win-win AI services.
Computing integration: The Company will give full play to the advantages of computing power
and architecture, converge the computing data of the entire network, and achieve integrated
computing and deep exploration through dual engines of view intelligence and data intelligence,
to provide driving force for business decision-making and index optimization, and empower
scenario-based segmentation applications.
Open ecosystem: As AIoT further evolves, demands of segmented industries have become long-
tailed and fragmented, with plenty of third-party professional partners in each field. In addition to
the cooperation mode of whole machine, Dahua, based on its basic hardware capability and
perfect software framework, can also provide partners with more options for product co-creation
solutions through DHOP, Docker containerization and other technologies, so as to create
competitive sub-divided industry products. Southbound-wise, Dahua collaborates with third-party
algorithm providers to load third-party algorithms onto our intelligent devices for computing power
applications, and deepen cooperation to strengthen customer stickiness; Northbound-wise, the
Company cooperates with partners with the ability to develop software based on standard
operating systems, where Dahua provides mainstream platform product selection, standard
operating system operating environment, and complete services such as access, storage, and
decoding, to form complementary business capabilities.
For the processing of massive data in AIoT, the Company has comprehensively upgraded
products in the field of intelligent computing. Including: Edge intelligent box IVD, storage-intelligence
integration IVSS, high-density computing IVSS, high-density storage EVS, and high-performance
storage EVS. The Company continuously enriches industry algorithms and improves product
intelligence performance to promote the implementation of various industry businesses.
1.3.1 Edge Intelligent Computing
Dahua continues to upgrade the performance of deep learning algorithms, achieving highlight
functions such as multi-channel multi intelligence, intelligent round patrol, tidal intelligence, intelligent
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clustering, and flexible exchange of storage intelligence; It has released multiple industry storage-
intelligence integrated all-in-one machines, exploring various sub-industry intelligence such as energy
security, electricity, emergency control, financial compliance, natural resources, behavior analysis,
etc.; Dahua continuously explores business norms in various fields and is committed to going deep
into industry through edge computing, assisting manpower to achieve efficient patrol inspection, and
effectively solving the massive data processing, real-time response, data security and other problems
faced by AI applications in the industry.
Edge Intelligence AI Series has rich algorithm decoupling modes for free selection and
matching. The products can be mixed and loaded with AI open intelligence, paired with a training
server/Yunrui to achieve intelligent autonomous training. The algorithm can be combined and
packaged with various industry all-in-one machines to meet various needs of customers.
Edge intelligent box IVD series integrates a variety of intelligent services, adapts to a variety of
application environments at the edge, realizes edge intelligent transformation, computing power
supplement and flexible deployment, and achieves the expansion capability of intelligent services.
The economical edge intelligent box is neat in size and possesses the anti-corrosion design for wide
temperature range, making the product adaptable to the edge computing environment. It has a built-in
high computing power chip, which can load various algorithms to deal with intelligent management in
small scenarios, so that AI can better serve as a new driving force for intelligent transformation. In
terms of integration of storage and intelligence, AI intelligent transcoding technology can realize the
integration of intelligent analysis and AI transcoding at the same time, quickly refine the data value,
provide more accurate and comprehensive information input for business decisions, realize low
latency of data and analysis interaction, and ensure business sinking management and local
decision-making nearby.
Inclusive AI: NVR products have gradually been upgraded from general to intelligent, so as to
improve the ease of use of AI while ensuring the high accuracy of the algorithm. The intelligence,
display, and storage of intelligent NVR are highly integrated, making it simple and easy to employ,
suitable for intelligent applications in small and medium-sized scenarios, and absolutely
advantageous in making use of existing facilities and transforming one machine for multiple purposes.
Based on the latest three major technological methods of "time division", "domain division" and
"combination", the optimization and integration of intelligent services will bring the limited computing
power of GPU into full play, which is different from conventional intelligent applications, so as to make
the business more refined. At the same time, it also accesses and converges all kinds of intelligent
data information at the front end, and makes secondary analysis with pre-intelligent pictures and
feature vectors, so as to improve the efficiency and accuracy of intelligent retrieval and realize
business closed-loop.
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1.3.2 Centric intelligent computing
In order to quickly respond to the current trend of digital intelligence transformation in the market,
the Company has built a unified open intelligence architecture for central intelligent computing based
on the mature architecture, and improved the layout by building a 2+2+N system, that is, two engines
of view intelligence + algorithm training, as well as two directions of awareness and cognition. The
open algorithm system built with 2+2+N as the core realizes the full-scenario coverage of the
algorithm, the self closed-loop of business and that of operation and maintenance, making products
really convenient and easy to use, so as to comprehensively support the two vertical businesses of
the government and enterprises.
The centric intelligent computing products, covering the mainstream X86, ARM platform and AI
computing platform, provide diversified computing power for the digital intelligence of the industry.
With its deep accumulation in technology, Dahua has independently developed intelligent analysis
cards and comparison cards, further enriching and expanding the ecological compatibility in the cloud
computing sector. We provide various forms of products such as software and hardware integrated
machines, pure hardware, and pure algorithm software to satisfy diversified user demands and sales
models.
In the field of specialized intelligence of storage, computing and inspection, the Company
relies on smart view engine, full-analysis and full-comparison products to create a standard
solution to optimize the data processing algorithm, provide industry-leading resolution capabilities
and second-level comparison capabilities for hundreds of billions of data, provide extremely fast
computing capabilities for large-scale data processing services, realize high-precision and high-
performance awareness analysis and retrieval comparison of various elements, and fully serve
the big data applications in various industries at the city level.
In the emerging field of long-tail intelligence, the Company aims to meet the long-tail needs
of various industries and output an intelligent hierarchical grading system from L1 to L5. Through
the combination of algorithm training engine + algorithm library + algorithm package + rule
engine, N algorithm packages are quickly generated based on the algorithm training engine. The
algorithm library is included for unified management, scheduling and arrangement. With the
configuration of rules, the Company has realized the fast delivery and flexible loading of
algorithms and achieved the synergy of task, algorithm and computing power in the whole link of
end-user, edge and cloud, which gives full play to the intelligent value.
The Company has launched a series of centric intelligent computing products:
EVS Series products are based on high-density storage, RAID 2.0, erasure code RAID, unified
cluster, intelligent operation and maintenance and other technologies to ensure the safety and
reliability of data storage. Technologies such as intelligent analysis of large number of roads, rapid
data structure and integration of intelligent storage and management are combined to realize fast
retrieval of target data, long-term storage of value data, and closed-loop operation of edge data,
which gives new value to centralized data storage.
The High-performance Dual-channel Series integrates multiple high-performance 64-bit
processors on a single machine, greatly improving the parallel data processing ability of the entire
machine, and meeting users' demands for large number of channels and high-resolution front-end
access and storage; The Unified Cloud Series integrates multi-machine cluster management
technology to achieve unified device registration management and unified storage capacity
management, dynamically and evenly store front-end devices to sub-nodes in the cluster, and
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automatically migrate within the cluster when a single machine encounters a failure to ensure storage
security of business data; The products provide unified operation and maintenance management
functions, which allows users to view hardware operation information such as the recording status
and the hard drives in the cluster. Fault alarms will be reported in real-time to reduce user operation
and maintenance costs, so as to provide centralized storage solutions with high capacity,
performance, reliability, and security for various video systems.
1.3.3 Cloud computing and big data
Based on cloud computing and big data technology, the Company focuses on video IoT
scenarios with business at the center and aims to achieve online view data, value computing, and
business enabling. It builds data technology systems such as data storage, data computing, data
governance, data analysis and modeling, data sharing and operation to construct cloud-native digital
technology infrastructure. The Company continues to increase investment in technological innovation
and R&D, drive the closed-loop of data value chain, activate the power of digital elements, and fully
tap the potential of smart IoT data, helping cities and enterprises in digital transformation to jointly
develop digital society and digital economy.
Based on the in-depth insights into smart IoT data and business, the Company integrates the
technological advantages of cloud computing and big data to achieve a smart IoT big data platform
centering on data online, view intelligence, data intelligence, and business enablement.
In 2022, the Company has made progress in big data as planned by continuing to enrich the IoT
awareness data access capabilities for its big data business, improve the computing power network
synchronization of end-user, edge, and cloud, strengthen cloud-native heterogeneous elastic
scheduling capabilities, consolidate the foundation of data fusion computing platforms, further explore
the value of view data, and stimulate innovation in video IoT data applications. The Company has
made the following achievements:
(1) Connect everything with intelligence to construct an online data network and solidify the
foundation of digital elements.
Targeting a richer range of awareness scenarios and capabilities, Dahua has realized a widely
compatible awareness aggregation access with higher efficiency and lower latency through IoT
models and other technical frameworks, to provide large-scale and highly reliable view storage and
IoT awareness databases. With a unified elastic architecture, a data network with wide connectivity,
highly reliable storage, and high-performance access is constructed to achieve efficient aggregation
of IoT awareness data and improve network compatibility. The difficulty of management is thus
significantly reduced, making video IoT data a fresh and important data element for data development
and utilization.
The Company has developed more than 2,500 types of IoT sensing devices in 69 categories
(such as checkpoints, parking lot capture camera, access control, RFID, smoke sensing, panoramic
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camera, radar, MAC acquisition, air switch gateway, power transmission device, network device, heart
rate collector, etc.). It has developed more than thousands of scenario-based IoT models for key
management areas in cities and enterprises to build a complete sensing system. It has the capability
of connecting and aggregating tens of millions of devices and EB-level data. The unified architecture,
which integrates spatial-temporal features, has the industry-leading ultra-large four-tier (disk-level,
node-level, rack-level, storage pool-level) liable data storage capabilities, which has further improved
multi-cloud management, nearby storage, mixed storage, heterogeneous compatibility, and unified
management capabilities; The online data network has laid a solid foundation for data fusion
applications, allowing data to aggregate on demand and seamlessly be connected intelligently.
(2) The collaboration of view and computing power across the entire network, and the
opening of algorithm ecological framework continuously inject power into the digital
intelligence era.
The Company's Cloud Computing Network Architecture products can realize the unified
management of computing power through the intelligent commanding center, separate operators and
algorithms through Algorithm Library, realize multi-dimensional collaborations between algorithms,
computing power and data at end-user, edge, and cloud, load algorithm self-training and
implementation capabilities, build a framework for algorithm integration into an open ecology, and
achieve decoupling of software and hardware, decoupling of algorithms and computing power,
decoupling of algorithms and business, decoupling of algorithms and model, as well as decoupling of
algorithms and manufacturer.
Through scenario-oriented algorithm iteration and multi-dimensional intelligent scheduling
strategy, the algorithm capacities for business scenarios have been quickly generated through
continuous training and autonomous configuration of target models; By improving third-party vendor
algorithm access framework and optimizing the unified management of multi-device and multi-vendor
algorithms for end-user, edge, and cloud in the algorithm library, the Company has enriched the
algorithm ecosystem, and achieved complementary advantages of multiple algorithm ecosystems;
Through data synchronization and algorithm synchronization of end-user, edge, and cloud, unified
management of algorithms and models for end-user, edge, and cloud can be achieved. Computing
results for edges and end-users can be directly reused by the center to avoid repeated analysis.
Through computing power collaboration and task collaboration, full awareness and refined utilization
universe computing resources among end-user, edge, and cloud can be achieved. The unification of
business among end-user, edge, and cloud can give full play to the synchronization of end-user, edge,
and cloud, and protect the investment value of clients.
The Company has developed more than 1,000 professional algorithms, and has shared these
algorithms with AI companies according to their respective areas in the industry to solve the complex
underlying problem of computing power. The Company has participated in the digital intelligent
transformation of its clients to promote co-prosperity in the AI industry.
The scenario-based, networked, and ecological smart view engine has realized the coordination
of algorithms, computing power, data and tasks of end-user, edge, and cloud, and created intelligent
clouds, thus effectively improving the calculation efficiency, algorithm utility, and investment
conversion rate, and further facilitating the intelligent development of the industry.
(3) Data intelligence deeply explores the value of view data, stimulates innovation in data
applications, and helps businesses develop in depth into the industry.
Smart data engine is a digital intelligence fusion computing engine for intelligent computing and
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data computing, consisting of full-stack technologies and products including big-data computing
storage engine, data integration, data development, data governance, data service, data operation,
digital intelligent awareness, label factory, data exploration, knowledge mapping, low generation code
application engine, and digital intelligence hub.
The one-stop smart data engine, based on cloud-native technology, provides great elastic scaling,
which can be flexibly implemented stand-alone or extended to thousands of nodes according to the
load, which reduces the barriers and enables the inclusive analysis and application of industry data
elements. Dahua also provides a unified workbench throughout the entire life cycle of service data,
effectively improving the efficiency of multi role collaboration and full link data flow; The engine is
open to ecology and supports the co-construction of a data ecosystem on a unified platform.
The data storage computing framework is designed to support the integration and processing of
diversified computing models and featured heterogeneous data. IoT and information data association
are realized from the beginning of data collection and governance. Based on business objects, the
framework can extract relevant data on demand for fusion computing to avoid repeated data storage
and split computing. Through data fusion, computing power fusion, and computing fusion, data
processing performance has been improved by more than 200%, and computing efficiency has been
improved by 50%.
High quality and efficiency of technical services such as data governance and development are
ensured through full-process intelligence. The Company has gained insights into industry data and
business, gained extensive practical experience, and built data algorithm capabilities. In multiple links
of data transfer, intelligent capability engines can be loaded to improve data governance,
development, and computing efficiency, enable business innovation in an agile way, and make data
intelligence benefit more people. At the same time, based on its insights into video IoT data and
industry, the Company deeply explores data contents to build a data system from data to information
and knowledge, increasing the value density of video IoT data, reducing the difficulty of data
application innovation, and assisting various industries in further widespread application.
Relying on rich data standards, industry models, and data labels, Dahua continues to strengthen
its exploration of view value, accumulate self-service data exploration, awareness relationship mining,
label collision, awareness map, low code collage and other view big data capabilities for the smart
data engine in the smart city, city governance and other industries, as well as the practice process of
enterprise digital transformation, so as to drive in-depth business development with digital intelligence.
(4) Develop business enablement platforms to open up underlying capacities and boost
digital intelligent transformation of the industry
The smart application enablement platform is a comprehensive system of open capacities that
cover various resources and basic applications of video IoT, which include open video capability,
open AI capability, open data development capability, open data resources, open computing
resources, and open storage resources. The application enablement platform is built as a "digital
intelligence hub" based on the practical experience gained in the video industry, the in-depth
understanding of cloud-native technology and the concept of building an ecology featuring practice,
openness and sharing. The platform can provide more comprehensive capabilities for agile business
iteration and boost the digital intelligent transformation of the industry.
The business enablement platform empowers industry partners, collaborates with partner
application capabilities, enriches the customer application ecosystem, and assists in the digital
transformation of customers in industries such as smart cities and smart transportation.
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Based on the IoT Digital Intelligence Mid-end Architecture, the Company has launched a series
of products and services with significant technological competitiveness and product advantages, and
achieved great success in the global market. Currently, the architecture platform has been
successfully delivered in more than 6,500 projects.
1.4 Full Intelligence
Dahua has maintained a leading position in the field of artificial intelligence, and mainly focuses
on the R&D and industrialization of the vision. With its deep technical accumulation and practical
experience, Dahua has made layouts in algorithm research and engineering technology and achieved
significant results in data-driven algorithm solution production lines, hardware deployment, and AI
security and trustworthiness. The Company is committed to empowering thousands of industries with
AI technology, further expanding government and enterprise digitization business, and increasing the
penetration rate.
1.4.1 Development trends of AI technology
In the field of artificial intelligence, the Company insists to make high-intensity investment in R&D
to promote the large-scale implementation of the artificial intelligence industry and continue to
maintain its leading position in the industry. Recent launch of emerging technologies and related
applications such as GPT, as well as their excellent generation performance, have marked a new
starting point for the development of artificial intelligence from AIGC to AGI. Continuous
breakthroughs have been made in foundation model and multimodal technologies, demonstrating
Dahua's technological advantages in the field of machine vision. The Company has accumulated a
large amount of industry experience in multiple industries of the government and enterprises. By
combining its multimodal and foundation model technology capabilities, the Company will focus on
promoting the R&D of visual foundation models for industry applications and implementation based
on industry demands, to further accelerate the business expansion of government and enterprise
digitalization and improve the penetration rate.
（1） Significant improvement of the generalization, accuracy, and expressiveness of
foundation models
Foundation model technology can learn from massive scenario data of multiple types and
conclude general capabilities across scenarios and businesses. Being able to grasp the most
universal characteristics and rules, it has become the universe foundation model with the most
powerful capability in generalization. Foundation models can better capture subtle differences and
patterns in data with higher accuracy. In some tasks, foundation models have surpassed human in
performance. In the future, combined with multimodal technology, universal foundation models will be
able to visually describe images and express more comprehensive visual content when conducting
visual analysis, which will effectively enhance the data value of vision. For example, it can achieve
the recognition of continuous and complex behaviors and be applied to business scenarios such as
production operation compliance and event analysis. Being able to meet the demands that cannot be
achieved by a large number of lightweight models, visual foundation models can significantly improve
productivity and production efficiency, provide users with new generation intelligent products and
services, accelerate AI industrialization upgrading and expand the market scale.
（2） Visual foundation models that combine industry characteristics will better meet the
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implementation demand of the industry.
On the basis of universal visual foundation models and in combination with industry demands,
industry experience are solidified into algorithm models to achieve the visual foundation models for
the industry. Serving as the brain of the industry, they can provide users with expert-level artificial
intelligence services.
The Company developed industry visual foundation models for vertical industry applications
based on professional knowledge of the industry and obtained significant advantages in terms of
effect and accuracy. The industry visual foundation models are integrated with multiple types and
cross-scenario visual analysis capabilities, which can significantly reduce the delivery quantity of
algorithms and reduce the R&D costs of artificial intelligence solutions. Through autonomous learning,
the industry visual foundation models will continue to improve its capability, which will greatly improve
the efficiency of industry production management. At the same time, the generalization capability of
industry visual foundation models will make improvement in scenario adaptability, allowing for faster
adaptation to different application scenarios and requirements. With the continuous in-depth
application of the industry visual foundation model capability in scenarios, the R&D efficiency and
supply capacity of AI will be effectively increased in the long tail fragmented market.
At the same time, in order to accelerate the industrial deployment of industry visual foundation
models, it is necessary to reduce the cost of foundation model utilization. Therefore, the ten billion-
level visual foundation model will be miniaturized to reduce the demand for computing power on the
inference side, and implement synchronization of edge and cloud, thus further improving the
efficiency of intelligent computing.
（3） Fusion processing of multimodal data will continuously improve IoT awareness
capabilities.
Cross sensor fusion has become an important development trend in the smart IoT industry, such
as vision-vision fusion, audio-vision fusion, radar-vision fusion, smoke sensor and vision fusion,
multispectral data fusion, etc. Based on the fusion of multimodal technology with industry foundation
visual models, data from different modalities will be integrated to jointly train the models, thus
improving the accuracy of IoT awareness in a more effective manner.
（4） The implementation of foundation model technology requires deep accumulation of
algorithms, engineering, and markets.
Through the years, the Company has accumulated a large amount of mature experience in
algorithm development, engineering deployment, and industry. In the field of visual foundation model
technology, it has rich practical experience in self-supervision, zero sample learning, comparative
learning, single model multitasking, model distillation, multimodal fusion, and has launched
applications such as automated annotation and image generation. Foundation models also require
extremely high engineering capabilities such as software systems, algorithm architectures, and
intelligent computing. In recent years, the Company has developed the "Jinn" AI Open Platform,
which includes an algorithm R&D engineering system, an elastic distributed training framework and a
model optimization and deployment framework, laying the foundation for the R&D of visual foundation
models.
In the process of implementing artificial intelligence industrialization, Dahua has accumulated rich
practical experience in multiple industries, which is crucial for the implementation of visual foundation
models in the industry and solving the pain points in the AI industry. At the same time, the Company
has accumulated a large number of industry clients. It can quickly reach clients based on industry
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demands and accelerate the implementation of foundation model applications. Through rapid
penetration and promotion on the demand side, it will also drive the sustained growth of intelligent
businesses in various industries.
In the future, the Company's technological breakthroughs and industrialization in the field of
industry visual foundation models will accelerate the promotion of digitization and intelligence of the
industry. The industry digital intelligence platform will become the brain of industry intelligence,
achieving self decision-making and evolution and bringing efficient and convenient service
experiences to industry users. The transformation from "awareness intelligence" to "cognitive
intelligence" will change users' habits in application utilization and form a new competitiveness for the
company.
1.4.2 AI engineering
To realize large-scale industrialization of AI, efficient end-to-end solution development and
delivery capabilities are needed. Dahua continues to focus on building its Jinn AI development
platform, JinnPlatform, which is an one-stop AI development platform for developers allowing full
workflow management of AI development from data processing, model training, optimization and
transplantation, algorithm management, solution development, to algorithm validation and testing.
The Company built computing power in 2017, and released a full-stack algorithm development
platform in 2019 to realize a full-chain closed-loop from data management to solution delivery. In
2021, the Company upgraded and released a modular solution development platform. In 2022, it
continued to upgrade the Jinn platform to provide efficient support for massive fragmentation and
scenario demands.
（1） Develop AI by AI with continuous optimization of semi-automatic machine learning
(SAML).
In order to provide faster and better support for the development of AI scenario-based algorithms,
Dahua continuous to optimize the semi-automatic machine learning (SAML) technology based on its
own business characteristics. SAML can automatically search for the optimal network structure in the
prior library based on algorithm requirements. Compared with the algorithm in the same period of last
year, the technology saves 50% of manpower while improving model performance by an average of 5%
and reducing model time by an average of 5%, making AI development by AI more intelligent.
Deployed on the Jinn AI Development Platform, this technology has efficiently supported the output of
over 2,000 customized business models in 2022.
The future development and implementation of industry foundation models allows utilizing the
ability of industry visual foundation models to supervise small model training, which will effectively
improve the performance and R&D efficiency of small models.
（2） Data-driven algorithm solutions production lines are constantly upgraded.
The platform supports large-scale elastic distributed training, with built-in hybrid accuracy and
semi-automatic machine learning technologies. It supports over 1 million tasks per year and can
develop a simple algorithm in just 10 minutes; The model adopts standardized component
management in the algorithm library to support mainstream models in the industry. With built-in high-
precision practical algorithms, it has managed over 1,000 algorithm components. By utilizing the
modular design capabilities of Blocks, it can develop low code algorithm solutions, and the developed
algorithms can be automatically simulated and validated in real scenarios.
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1.4.3 Scenario-based AI capability
The Company regards AI as one of its core strategies and has always been committed to the
innovative R&D and industrialization of the world's leading AI technologies. In the process of AI
evolution from centralized industrialization to large-scale industrialization, the Company focuses on
scenario-based applications and core technology research and continues to promote the
industrialization and commercial success of AI. At present, Dahua owns national enterprise
technology centers, national post-doctoral scientific research workstations, Zhejiang Enterprise
Research Institute, Zhejiang Engineering Research Center and Zhejiang Key Laboratory, as well as
the AI R&D teams with more than 1,000 members. It has won the first place in more than 60 AI
algorithm competitions and evaluations at home and abroad, published more than 110 papers in core
journals, applied for more than 2,100 AI patents, and undertaken 19 national and provincial scientific
research projects. During the reporting period, the Company has won the first place in 5 AI algorithm
competitions and evaluations, applied for over 600 AI patents, and undertaken 7 national and
provincial scientific research projects.
Fully build scenario-based AI business capability
In 2022, the Company continued to expand its intelligent applications in more than 30 industries,
including urban management, transportation, construction, electricity, finance, manufacturing,
petroleum and chemistry, logistics, steel, health, coal and emergency rescue. The Company has good
understanding of clients' production management processes, and provides abundant scenario-based
AI application solutions through innovating technologies and upgrading systems, so as to improve the
production quality and efficiency for clients and achieve win-win results.
（1） Efficiently meet the demand of scenario-based intelligent solutions of each industry
through the integration of business architecture system featuring "dot+line+network"
and the four-layered technical architecture system.
In the business architecture system featuring “dot+line+network”, diversified coverage of single
point algorithms over value scenarios can be realized. Around the application goals of business
scenarios, a large number of algorithms are concatenated by industry to form industry algorithm
solutions. By flexibly combining and scheduling scenario-based algorithm solutions, intelligent
integration across businesses is achieved; At the same time, a four-layered technical architecture
system composed of the Jinn platform, operator components, general algorithm solutions, and
industry algorithm solutions decouples from the technical side, providing end-to-end efficient
scenario-based customization and development capabilities, and accelerating the implementation of
industry intelligence.
At present, over 1,200 industry-leading algorithms and more than 230 industry algorithm
solutions have been released, covering more than 100 industry segments, to meet various demands
in a timely manner. Take the intelligent energy algorithm solution as an example, it includes functional
applications such as instrument inspection, defect detection, conveyor belt safety control, oil
unloading safety monitoring, crown block safety monitoring, and wearing compliance, achieving safe
production, efficiency improvement, and cost reduction in the energy industry; Take urban big data
governance as an example, the intelligent solutions and data of various vertical businesses such as
water level management, sand dredge monitoring, urban construction management, fireworks
monitoring, etc. are integrated on a unified digital intelligence empowerment platform, and various
algorithms are employed flexibly according to the actual needs of the business to achieve the
transformation from data intelligence to business intelligence, greatly improving the level of business
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governance. Dahua has successfully explored the incremental market for hardware through software,
making it a key control point for future business.
（2） Enhancing the replicability of algorithms, universalization has efficiently met the
demands for scenario-based AI.
Through years of practical experience and innovative attempts, the Company has built three
modes, namely "quick customization by the Company", "convenient development by users" and
"general algorithm paradigm". These three modes can draw on and complement each other's
strengths; At the same time, through continuous universalization, high replicability of algorithms can
be achieved.
"Quick customization by the Company" refers to the end-to-end customization by the Company.
On the basis of the four-layered technical architecture system, a unified operator and solution
architecture is implemented with operators as the center. Through the top-level design of operators
and frameworks, the universality and replicability of operators are increased, so as to improve the
efficiency of end-to-end customization.
Based on the unified architecture of operators and solutions, multiple universal algorithm
solutions have been designed, including target intrusion, quantity statistics, and target proportion.
While ensuring the universality of the algorithms, the algorithm's effectiveness and scenario coverage
have been ensured during "convenient development by users", assisting in the intelligent
transformation and upgrading of non-standard scenarios.
The research and application of the "general algorithm paradigm" are further promoted.
Industrialized applications have been implemented in fields such as tooling compliance, change event
detection, action definition, image search by image, and virtual target filtering, achieving training-free
algorithms and improving the richness of algorithm supply.
In the future, industry visual foundation models will continue to significantly improve the
replicability of algorithms on the existing basis, while the existing algorithm paradigms and
architecture will provide rich industry and engineering experiences for industry visual foundation
models to accelerate their implementation in the industry.
（3） Achieve a qualitative leap in scenario-adapted capability of intelligent products and
platforms through the system architecture of "releasing an algorithm is to release a
solution"
To realize business intelligence, algorithm, hardware product and platform need to be integrated
to form a complete solution. The large number of fragmented and scenario-based AI requirements
pose great challenges to the delivery cycle and the development cost of complete solutions, and have
become a major obstacle in the actual implementation process of empowering enterprises and
industries with AI. Based on the industry application paradigm, the Company upgrades the algorithms,
systems, applications and the software architecture of platforms and adjusts the intelligence business,
so that products and platforms can adapt themselves to algorithms without any customized
development. Releasing an algorithm is to release a complete solution, which greatly shortens the
development cycle and reduces the development cost. This technology has been applied in smart city
governance solutions. In response to the characteristics of diverse functions and complex business in
urban governance, it has quickly completed the loading of over 100 intelligent functions through
abstract universal algorithm paradigms, reducing the development cycle by 50%.
（4） Dahua continuously promotes technological innovation and application
implementation, and deeply explores technologies such as small sample synthesis,
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single model multi-tasking, model distillation and compression, ViT, etc., to solve pain
points in scenario-based AI applications.
Although the success of deep learning relies on massive amounts of data, as AI deepens into
scenario-based applications, deep learning technologies based on zero sample and fewer sample
learning have become a research hotspot in both academia and industry. With the accumulation of
weak supervision and semi-supervised learning technology, AIGC and other technical fields, the
Company made a breakthrough in small sample synthesis technology in 2022 and implemented the
technology in the intelligent security inspection scenario for the first time. With this technology, new
hazardous item detection is supported with only five effective samples, improving the product
competitiveness.
Although the computing power of a single device continues to increase, as AI solutions become
more complex and have more and more functions, it becomes crucial to fully utilize and allocate
computing power. By upgrading the training framework and application architecture, single model
multitasking and low bit technology have been widely applied in the Company's AI algorithms, greatly
reducing the application cost of the algorithms. For example, with this technology, the model
parameters of SMD algorithm are reduced by 35%, the algorithm memory is lowered from 20M to 4M,
and computing power required is lowered from 1T to 0.3T.
Industry visual foundation models require extremely high computing power, therefore, it is
extremely important to effectively reduce the computing power required for the deployment of
inference platforms. The Company has accumulated model distillation and compression technologies,
applied them to the industry's visual foundation models, realized the miniaturization of models, and
deployed them in centric computing and edge computing with high efficiency and low cost, which will
further accelerate the implementation of market promotion.
（5） Facing the risks and challenges in artificial intelligence security, Dahua has
accelerated the industrialized implementation of trusted AI technologies such as
adversarial attacks, anti-counterfeiting, and privacy computing to ensure AI security
and trustworthiness.
The Company has conducted research on adversarial attack and defense technology. In 2022,
Dahua won the first place in both the CVPR2022 Workshop Classification Task Defense and Open
Set Defense competitions. By innovatively applying methods such as complex adversarial sample
generation and joint adversarial training, Dahua is able to greatly improve algorithm robustness and
defense performance. The relevant technologies have been applied in fields such as universal object
detection and license plate recognition, with a defense rate as high as 99%.
Through its exploration of anti-counterfeiting feature extraction and forgery generation
technologies, Dahua has broken through the challenge of 3D attack prevention, enhanced the anti-
counterfeiting ability of live detection algorithms, and comprehensively improved the security
performance of intelligent building products. It has been certified in the special security evaluation by
China Academy of Information and Communications Technology as excellent.
By comprehensively applying trusted execution environment technology and security
reinforcement technology, the Company has taken the lead in the industry in applying privacy
computing technologies to AI platforms, improving the level of security and privacy protection during
data flow and usage, and achieving safe, reliable, and controllable AI development. Jinn Trusted AI
Open Platform is the first in the industry to pass the trusted privacy computing evaluation by China
Academy of Information and Communications Technology and the security evaluation by the Third
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Research Institute of The Ministry of Public Security.
1.5 Full Ecosystem
The digital economy has emerged as a key driving force in promoting the intelligent, green and
high-quality development of the economic society. Collaborative innovation and open development
are expected to provide vital safeguards for the sound development of the digital economy. Upholding
the concept of "Full Ecosystem", the Company anchors on the realization of customer value. By
building all-round open capabilities from technology, business to service, and opening up to industry
customers and developers with hardware, software, algorithms, services and business ecology, the
Company works together with its partners to pioneer new fields and create new dynamics, so as to
jointly develop infinite possibilities for industrial development and empower the digital transformation
of various industries.
1.5.1 Hardware Open Platform and Ecological Cooperation
This mainly includes the Dahua Hardware Open Platform (DHOP) and the open access of third-
party platforms (Device Network SDK, Playback SDK).
The DHOP provides extensive tool development suite from model conversion, compilation,
bundling, debugging to operation and maintenance, thus simplifying the development by third parties.
It supports hardware and software decoupling, and provides such functions as storage and arithmetic
hardware resource services, multimedia function services, AI acceleration engine services, and basic
IT services for various devices, to meet all kinds of custom business requirements of third-party
developers.
Based on the DHOP, the Company has self-developed dozens of specialized smart apps to
provide basic intelligence for its edge-end devices, enabling rapid development and software
customization of devices. By 2022, Dahua had signed contracts with over 300 domestic and overseas
algorithm vendors for reciprocal cooperation in developing apps in various fragmented industry
scenarios, such as garbage bag breakage detection, water level monitoring, parts detection in the
energy industry, and wagon number identification, to quickly and effectively meet the business needs
of end customers and revitalize the intelligent IOT ecological app market. The third-party platform
access capability was continuously updated to over 550 protocols in 2022, and mutually beneficial
partnerships were established with more than 500 industry platforms, with active integration into the
ecosystems of various partners.
The DHOP supports open hardware functions of the product matrix of edge-end devices, for
exploring new intelligent scenarios, supporting open training servers and smart view, and realizing the
full-chain closed-loop rapid implementation of new intelligent scenarios.
1.5.2 Software Open Platform and Ecological Cooperation
As for the technical open system, the Company continues to build up core capabilities based on
the three key domains of IOT awareness, smart view and data intelligence, while expanding the
scope of open capabilities for various partners in response to their needs. Meanwhile, we continue to
improve the cooperation friendliness for cooperation scenarios and reduce the cost of technical
integration of partners. Based on the technical requirements of partners, we keep optimizing the form
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of open functions, and continuously enriching the content of eco-products and eco-solutions, to build
a flexible multi-level open system of "interface-component-module-product-solution". Through the
dual drive of "content+form", we make constant optimization to shape an integrated open system of
view functions for various cooperation scenarios.
In terms of market cooperation, we classify and differentiate cooperation for customers' demands
by factors such as region, industry and customer nature, and continuously output value for partners
through various means including business opportunity sharing, product certification for release,
marketing channel merging and brand cooperation.
Regarding the management system, we have set up a two-tier customer management
organization consisting of the headquarters and provincial districts, mobilizing all kinds of resources
and optimizing the process system internally, while extracting the value of existing partners and
analyzing and identifying new partners externally, with differentiated resources allocated to partners of
different levels. Moreover, we have made the software ecosystem management a priority for our
Company, with independent operations.
On empowerment and support, we provide partners with all types of technical services,
empowerment support and training and certification, and continue to reduce their learning costs to
ensure that they efficiently acquire and utilize the value of various capabilities enabled by the Dahua
Software Open System and continuously benefit from them. Through these value co-creation and
sharing actions, we aim to continuously enhance the breadth and depth of technical cooperation and
ultimately form a highly trustworthy and stable technical ecosystem.
1.5.3 Algorithm Opening and Ecological Cooperation
Empower partners with the ability to industrialize AI at scale to achieve business success and
mutual growth. In the trend of digital transformation, many clients from different industries use AI to
improve production efficiency. As AI industrialization represents a field with considerable opportunities,
the Company works together with its partners and clients to build an AI ecosystem. The Company
provides targeted empowerment tools for partners with different levels of demand, thus accelerating
the process of AI industrialization.
With so many AI chip manufacturers and different chip capabilities, algorithm deployment can be
time-consuming and laborious. The Company provides an algorithm deployment tool as a one-click
optimization deployment solution for algorithm manufacturers with certain algorithm development
capabilities. This tool now covers more than 70 types of network structures and over 60 kinds of chips,
and has been delivered to dozens of domestic and international manufacturers, facilitating the rapid
transformation of clients' self-developed algorithms into products.
For clients with insufficient AI development capability, the Company provides Jinn Studio, a
lightweight AI open platform (Jinn), enabling clients to use their own data to train scenario-based
private algorithms. Jinn Studio has been implemented in Yunrui's public cloud and enterprise private
solutions, with cooperation with clients already carried out in fields of ecological protection, smart
manufacturing, and urban governance. Meanwhile, for partners with AI development capability,
including integrators, the Company provides more than 300 commercial algorithm solutions for typical
scenarios so as to help clients quickly complete the upgrade of AI industrialization. With the
commercialization of the foundation visual model ahead, the Company will also empower its partners
with the foundation model capability to boost their market expansion in various industries.
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1.5.4 Service Opening-up and Ecological Cooperation
With the customer-oriented service concept, Dahua has been gradually building four service
systems covering the whole market and the full business, including the integrated delivery system,
technical support system, operation and maintenance management system, and training and
certification system; meanwhile, by integrating its corporate resources and pooling the power of the
ecology, Dahua provides full life-cycle services of products and solutions to the market. Our vision is
to build a world-class efficient and professional delivery platform that improves customers' response
speed and efficiency, and become a superb service value creator.
Dahua has formed a three-tier service network to provide technical services to customers
worldwide, with 51 branches worldwide and a service network covering 180 countries. It has 9 spare
parts distribution centers and 173 spare parts stations (46 spare parts stations in China), with 4000+
project managers and technical service personnel and over 1000 service partners, offering efficient
service support for customers and markets and delivering constant superior experience.
1.5.5 Business Opening-up and Ecological Cooperation
Taking ecological development as the most important strategic initiative, the Company has been
committed to building a win-win cooperation ecosystem and creating value together with its partners.
Our main objective is to develop the ecosystem at full speed with all efforts based on the needs of our
customers, and to give full play to the power of the ecosystem for common development. Centering
on value for a win-win ecosystem matches and emphasizes the eco-concept about win-win
cooperation. By consolidating its advantages in developing the digital intelligence ecology, Dahua will
continue to implement capabilities and key initiatives including deep market cultivation, resource
investment, and channel expansion, on the basis of, to jointly create value and achieve win-win
development with partners on this new journey of digital intelligence.
With the gradual economic recovery and tremendous market opportunities, Dahua will work
together with its partners to build a business ecosystem with strong profitability, excellent operating
experience and sustainable development. Based on internal optimization and improvement of its
entire chain, the Company will continue to strengthen its technical strength, deepen its business
innovation, broaden its business scope, and optimize services, to fully empower its partners, enhance
their core competitiveness, and achieve co-construction, symbiosis and win-win outcome.
2. Software Platform
The human society has entered the era of digitalization and intelligence. Digitalization and
intelligence will continue to drive the sustainable, green and high-quality development of society. The
platform architecture of the Company has been continuously improved for more than a decade.
Through the "one system and dual platforms", namely the unified architecture of IoT Digital
Intelligence Middle-Platform System, and Urban Platform and Enterprise Platform, and the co-
developed Dahua Wanxiang Platform (http://open.dahuatech.com), the Company has materialized its
collaborative development with customers and partners.
Through the three-tier arrangements and regional system, the Company has established
development centers in 6 major provinces to keep close contact with and serve customers on the
front line. The Product Development Team and the Solution Development Team have been working to
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lay a solid foundation to produce industrial paradigms. The five research institutes have been
developing cutting-edge technologies to prepare the Company for its future development. Through
the two major technical systems of AIoT and the IoT Digital Intelligence Platform, the Company has
created the “dual-category horizontal” layout of smart IoT, with fully open capabilities in IoT, digital
intelligence, and enhanced industrial accumulation, to promote the digital and intelligent upgrade of
the entire industry.
Supported by such core technical capabilities as AI, cloud computing and big data, the Company
has launched the City Platform through a unified software architecture, to realize its social missions of
making the society more secure, cities more orderly, governance more efficient and life better; in
addition, it has launched the Enterprise Platform to help clients optimize security systems, improve
production efficiency and facilitate operation management. The Company also pays great attention to
data security and privacy protection, which has been taken as one of guiding principles, developing
platforms and solutions with strengthened protection capabilities.
2.1 Unified Technical Architecture
The Company has established an integrated technical support system to empower the digital
transformation of the industry and provided city-level and enterprise-level technical platforms for
clients' application. The Company has developed cloud-edge-users smart IoT sensing and computing
analysis capabilities supported by its big data and AI. At the same time, it attaches great importance
to data security and privacy protection to ensure business compliance.
The Company has developed IoT models in the key management areas of cities and enterprises
to build a network of sensing system based on the access capability of numerous devices, enabling
IoT data collection on demand. Massive amounts of data are processed through the smart view
engine and the smart data engine. Through the intelligent upgrade of the entire process, the
Company creates value from industry data and make digital innovation benefit more people. To
quickly respond to clients' sensitive demands, the Company has built a software component system
and developed industry paradigms, enabling business to innovate in an agile way.
2.2 Sensitive Service Organization
To better serve clients and partners, the Company has comprehensively upgraded the structures
of product R&D and front-line services. Through the product department and architecture department
which run through the organization, the Company can gain insights into business, research and
develop products, replicate solutions and constantly optimize business. With the collaborations
among multiple departments, the Company has stepped up the development of the smart IoT
platform, and created the industry paradigm.
The Company places R&D organizations at the front line. By the end of 2022, the regional
construction of 6 provincial development centers had been completed, with highly efficient resource
sharing, exploring new business opportunities to create new value with clients while boosting the
digital intelligent transformation of the entire industry.
The middle platform organization is responsible for technology evolution and business
improvement, building industry-specific IoT cloud bases and formulating industry-specific strategies to
direct actions in all projects nationwide. The business front-end organization coordinates multiple
roles, and serves clients directly, with quick responses, and flexible and effective agile services. The
middle platform organization summarizes and draws upon the successful experience at the front end,
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formulates strategic and tactical plans, and coordinates the operations of different business middle
platform capabilities to provide services swiftly for front-end teams and create a virtuous circle.
To better solve the business pain points of overseas clients, the Company improves its software
development capability to respond to overseas clients' demands for software. The Company has
established an independent overseas software R&D team and strengthened R&D resources in
particular. Local service teams have been built in the six major overseas regions for key projects and
accounts there, providing more professional, reliable and easy-to-use software services for overseas
clients.
By upgrading its organizational capabilities, the Company has rapidly improved its ability to meet
clients' software needs, making the overall collaborations more effective and efficient, and business
processes more smooth.
Special actions in software business, a company-level strategic focus, are taken to facilitate
sales and technical management. On the one hand, the Company strengthens the management of
software business opportunities, increasing business opportunities through stepping up cooperation,
and promoting business opportunities transformation by reviewing regular business opportunities with
strengthened accountability; on the other, the Company improves software sales skills within the
sales systems, enabling its salespeople to better understand clients, business and software, so as to
respond to clients' needs in a more accurate and faster way. In addition, independent accounting is
implemented in software performance. Tasks are broken down into horizontal and vertical indicators,
allocated to individual employees. These performance targets are interconnected in order to boost
their achievement rate. A software technology team is built to directly respond to clients' needs in a
more swift way. This provides strong organizational support for achieving software business targets.
2.3 Construction of Reusable Large Modules
Based on a unified technical middle platform with unified protocols, the Company reduces
development costs, improves development efficiency and makes products easier to use through
efficient reuse of business modules. This accelerates the incubation of baseline products and the
empowerment of regional development centers, while enabling regional R&D centers to quickly meet
clients' business needs, support the rapid delivery of large projects and accelerate the customer
response speed. By modular products of industrial platforms for flexible assembly, the Company has
achieved rapid iteration and release of products.
The Company has always adhered to the client-oriented principle when developing industry-
specific software platforms. Guided by business targets and driven by technology, the Company
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continuously deepens its insight into industry paradigms and has built a complete 4-layer
componentized system: general (G) layer, basic (B) layer, field-specific (F) layer and mixed (M) layer.
Through the flexible assembly from this componentized 4-layer system, the Company can construct
diverse industry-specific applications, which can quickly meet clients' needs for sensitive development.
To support component management and automated construction, the Company has built the internal
Firefly Component Management Platform, with continuous industrial experience accumulation, which
has evolved into a one-stop integrated development platform with capabilities from engineering
building to R&D verification. For example, to serve the business needs of urban street management,
we selected 8 components including data collection, smart identification, message transfer and early
warning disposal for assembly, business transfer and customized development, and officially released
the Urban Street Management Subsystem to our client in just 45 days, which improved the overall
business efficiency by 100% while substantially reducing R&D costs.
2.4 Data Security and Privacy Protection
With the vigorous development of national information construction in recent years, various
industries are engaged in digital transformation. In the field of pan-security, IT data includes not only
traditional video footage, but also personnel information in enterprises, patients' information in
hospitals, and core research results in universities. These data are of great value as production
materials for enterprises. However, information security incidents are nothing but common, resulting
in the leakage of citizens' privacy or even affecting national and social security.
In response to the security storage and operation needs of databases, the Company has
released the Secret Realm Security Database as the last line of defense for information security
following cyber security and audio/video encryption, forming a security vault for data. With its three
core capabilities of the SQL command execution engine, data encryption storage engine, and key
management system, it enhances the security protection level for data transmission, disk storage,
memory operation, and SQL code. All data is encrypted and stored in the database in a cryptographic
state, preventing data leakage through one-stop, systematic security services.
1) Native security: By modifying the database kernel, we employ a multi-layer key protection
system based on the SQL command execution engine for the full-link encryption of data. We provide
hardware-level key protection system and Trusted Execution Environment (TEE) to achieve memory-
level encryption, and prevent information leakage caused by network interception through secure
network transmission. By adopting the cryptographic storage with one key for one machine, the data
becomes available but not visible, thus protecting files from being leaked even if the database is
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illegally downloaded.
2) Insensitive connection: It has 100% mySQL compatibility and the usage is transparent but
insensitive to users. Original business data can also be migrated to the secure database easily, with
almost no loss in performance compared with the native mySQL.
3）Visualized operation and maintenance: It provides a monitoring panel of database operation,
including CPU, memory and storage space usage in real time, and mySQL statistics analysis. It also
supports data backup and recovery. The backup data can be quickly recovered to the new server
through the key even if the host is damaged, so as to protect the data from loss and ensure stable
business operation.
3. Solutions for City-level Businesses: Digital and Intelligent Transformation Empowerment for
Urban Digital Innovation
3.1 Business Overview
With the establishment of the National Data Bureau and the implementation of the Plan for the
Overall Layout of Building a Digital China, the government is guarding the building of digital China in
multiple dimensions from the top management structure to mechanism guarantee measures , leading
it into the fast lane and accelerating the realization of a digital economy. Meanwhile, with the fully
resumed building of a digital government and digital economy , the data-driven platform-based model
gradually leads to new business types and new modes in the digital economy, with the government,
enterprises and the public collaborating to boost the development of the digital economy.
Under the major trend of digital transformation of the government for quality and efficiency
enhancement, Dahua closely follows the pace of industrial development in digital infrastructure
construction and digital application implementation, and focuses on the four urban business sectors
of secure society, orderly city, enhanced governance efficiency, and environmental protection for the
benefit of people with video IOT sensing technology as the core. Through digital intelligence
integration and application innovation, Dahua safeguards the deployment of urban businesses, and
contributes to the realization of the beautiful vision of "harmonious coexistence of man and city, man
and society, and man and nature".
3.2 Core Strategy
Dedicated to implementing digital intelligence capabilities in various urban scenarios, the
Company provides differentiated and customized proprietary products and solutions in accordance
with the various stages of urban digital transformation in different fields. In such mature business
fields as smart traffic management, social security, and smart emergency response, we focus on
enhancing the depth of products and solutions by incorporating our experience in 2000+ business
segments, striving to deliver professional experience to our customers with more ease, more care
and more dedication. In such innovative business fields as digital government, smart transportation,
smart water conservancy, green ecology, fundamental governance and rural revitalization, we focus
on improving the breadth of our products and solutions by further expanding the implementation in
3000+ business segments, thus empowering cities with digital intelligence and benefiting people's
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livelihood with AI. Besides, the Company has always been practicing the value proposition of building
an inclusive ecosystem, continuously enhancing its open ecosystem capacity, expanding the scope of
open ecosystem, and deepening its open ecosystem strategy for various stakeholders including
urban management-related customers, industry vendors, and partners, so as to build a new smart city
ecology featuring "unified architecture, utilization and compatibility with existing facilities, capacity
sharing, and commercial openness" together with eco-partners.
Technology leads innovation and innovation drives development. The Company focuses on the
integration of the two technical strategies, namely the AIoT and IoT digital intelligence platform, with
urban business scenarios, so as to build a digital intelligence base for urban digital transformation. It
keeps working on such business fields as digital government, smart transportation, smart water
conservancy, smart environmental protection and public security, aiming to realize a new outlook of
urban management featuring secure society, orderly city, enhanced governance efficiency and green
development for the benefit of people.
AIoT
The Company attaches great attention to AIoT technical strategies and builds city-leading
capabilities in sensing, connection, edge computing and control & interactions. Through the
combination of AIoT and business scenarios, we are building a scenario-based city-level IoT sensing
system.
Through practical accumulation and deep insight into over 5000 urban scenarios, the Company
has integrated AI with various IOT sensing technologies, from the visible band to the infrared band
and then to the hyperspectral band, realizing the upgrade from ordinary video surveillance to infrared
temperature measurement, smoke and fire detection, and then to water quality monitoring and pest
monitoring. In addition, the Company has merged the spectral technology with such technologies as
radar, Beidou and RFID to achieve all-weather classified detection and identification, speed
measurement, distance measurement and positioning of targets, playing an irreplaceable role in such
innovative fields as vehicle-road coordination and autopilot.
The integration of AIoT drives the upgrading of the sensing, connection and control system of a
city, continuously enhancing its sensing capability, thus providing more efficient and accurate data
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support for comprehensive analysis, diagnosis and decision making on urban business and
accelerating the advent of the era when everything is smartly connected.
IoT Digital Intelligence Platform
By adhering to the IoT Digital Intelligence Platform technology strategy, and based on data and
business requirements, the Company has developed the core technology of video IoT and created
industry-level paradigms. Through online data, smart view, and smart data, the Company continues to
upgrade its capability of business enablement, building a solid basis for the digital and intelligent
transformation of cities.
Focused on insights into urban business scenarios and key targets of urban management, the
Company has developed over 1000 IoT models, to build a sensing network supported by the access
capability of numerous devices, enabling the collection of IoT data on demand. Massive data is
managed and dispatched by the smart view engine to build an efficient and collaborative network of
algorithm, computing power and data of end-user, edge, and cloud for customers, continuously
improving the availability of IoT data. Meanwhile, through the one-stop smart data engine, the data is
processed and consolidated across the whole process, with intelligent capabilities loaded in multiple
links of data flow to boost the efficiency of data governance, development and calculation. Through
the intelligent upgrade of the entire process, the Company creates value from industry data and
makes digital innovation benefit more people.
City Platform 2.0
Based on the AIoT and the IoT Digital Intelligence Platform, the Company has built five hubs of
capabilities, i.e. business process center, command and scheduling center, auxiliary decision-making
center, resource governance center, and safety supervision center, to upgrade the City Platform 2.0
featuring shared infrastructure, centralized business management, and unified scheduling of urban
resources, and to fully enable the effective monitoring, management, prevention and disposal in cities.
The business process center, driven by incidents, promotes the closed loop of business
processes, and focuses on the improvement of the all-round urban governance ability. The command
and scheduling center focuses on improving the coordination ability in urban governance. The
auxiliary decision-making center, based on the digital and intelligent analysis, focuses on improving
the coordination and decision-making ability of cities. The resource governance center focuses on
improving the unified planning ability of cities. The safety supervision center focuses on improving the
unified supervision ability of cities.
Application in Multiple Business Scenarios
With scenarios as the basis and data the cornerstone, under the framework of the City Platform
2.0, the Company boosts online handling of business processes and digitalization of business
scenarios, and continuously promotes scenario-based applications and closed-loop solutions. Based
on the deep understanding and years of practice in digital government, smart traffic police, smart
transportation, social governance, smart emergency response, and public service, among others, the
Company has developed scenario-based solutions for different fields in various industries, and
promoted the restructuring and optimization in government governance processes and models, with
continuously enhanced sensible decision-making and service efficiency.
3.3 Practice of Values in All Industries
Standard Guidance
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The rapid development of the intelligent IOT can never be separated from the guidance of
industry standards, and the urban digital innovation is even more dependent on sound industry
standards. As a top player in the industry, the Company has been committed to promoting the
standardization and regularization of the industry. During the recent 10 years of rapid industry
development, the Company, together with industry experts, has been actively promoting, exploring
and improving relevant standards and systems, be it national standards, industry standards, group
standards or key local standards, contributing the wisdom and strength of Dahua to the development
of the entire industry standard system.
During the application phase of video image networking, the Company is devoted to promoting
the standardization of video networking throughout the industry, to alleviate the difficulties in product
interfacing, data integration and system maintenance caused by discrepancies in local standards.
From such local standards as the DB33/T 629 series, DB11/T 384 series and DB50/T 216 series of
video networking to the national standard GB/T28181-2011 released in 2011 and then to the national
standard GB/T28181-2022 released in 2022, Dahua has been the core drafting unit to promote the
formulation and improvement of standards.
With the advent of the era of IOT Digital Intelligence and, a singular networked and shared
application of video images can no longer meet the requirements of the era. Based on years of
experience in standard formulation and improvement, the Company is dedicated to establishing a set
of standard system architecture containing seven categories of content: collection, transmission,
intelligent analysis, application service, governance operation and maintenance, security and
management, applicable to video image intelligent application and IOT digital intelligence, so as to
address the contradiction between the rapid development of IoT digital intelligence application and
the lagging standard construction. In 2020, the Company began to apply its experience in developing
standards on video to the digital transformation of enterprises and cities. From 2021 to 2022, it
participated in the development of industry standards and group standards on biometric identification,
RF and video integrated vehicle identification, and smart city device connection management and
services, vigorously propelling the development of relevant standards and associated applications of
IoT digital intelligence.
In addition to national standards and industry standards, the Company is also dedicated to
providing local standard development services for key provincial and municipal customers based on
its capability in standard system architecture to address the standardization needs of local business
deployment in the urban digitalization process. In Shandong, the Company proposed four
specifications for information collection, governance and unified coding, becoming the basis for video
image data governance in the province. In Sichuan, the Company led the preparation of the visual
computing construction guidelines, becoming the specification for the intelligent development of video
images in the province. In Zhejiang, it participated in the preparation of 6 standards on public video
resources, becoming the standard for the deployment of video image spots and data management in
the province. In Guangdong, Anhui, Hunan, Hubei and Guizhou, it also contributed its strength in the
standardization process of urban digital transformation in public security, big data and IoT digital
intelligence.
Value Co-creation
AI ubiquity, AIoT integration, and IoT data commercialization have become the major trend of
urban digital construction. The Company joins hands with its partners from industries, academia and
research institutes to explore various application scenarios of city-level businesses and give full play
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to their respective strengths in areas of computing power, algorithms and software platforms, to
collectively create greater value for both industries and customers.
(1) AI Ubiquity:
Traditionally, AI applications in industries are time-consuming and costly, from the submission of
requests by customers to the formation of standard algorithms. This is especially true in various
industry segments, where scenarios are diversified and algorithm needs are fragmented, so the
traditional algorithm development model cannot meet the demand for rapid application deployment in
industries. Powered by technologies, Dahua fully opens up the product connection capability of
ecological partners through its DHOP platform, underpinned by four major capabilities, i.e. open
hardware resources, open function interfaces, open unified access and open AI acceleration engine.
In the field of vehicle-road coordination, various advanced algorithm technologies of partners in
vehicle-road coordination are loaded into Dahua's professional cameras, forming complementary
advantages between Dahua and its ecological manufacturers, providing low-latency, high-precision
and highly reliable data to sense the road environment, analyze traffic events and detect behaviors of
traffic actors, thus assisting partners in building intelligent applications in line with vehicle-road
coordination scenarios. In the field of water conservancy, partners can load various algorithms for
video recognition of water levels and flow velocities of mountain torrents into Dahua DHOP cameras
based on their profound experiences in the field, to jointly develop new products and promote the
digitalization of scenarios in water conservancy. In the field of rail transportation, partners are able to
train recognition algorithms for four types of personnel, including security guards, property owners,
and crew members, by using the AI open training platform provided by Dahua, combined with their
accumulated data on industry scenarios, without any code development, to supervise on-site staff
with alerts on irregularities and improve the on-site work efficiency. The Dahua AI open training
platform significantly lowers the threshold for developing and utilizing AI algorithms in various industry
scenarios, and accelerates the industrial applications of AI.
(2) AIoT Integration:
In the field of vehicle-road coordination, the Company has developed industry-leading special
cameras featuring low latency, high-precision timing, high frame rate, time-stamp frame-by-frame
binding and open ecology, which are deeply integrated with such data on laser-point cloud and
meteorology, and combined with smart traffic infrastructure to build a roadside sensing system with
holographic awareness, all-domain intelligence and full-scale integration for vehicle-road coordination.
In the meantime, we continue to explore the ecological co-creation with vehicle networking
enterprises, and integrate our technologies with their vehicle and cloud networks to realize real-time
information interaction between vehicles, roads, and clouds in all aspects, and carry out active safety
control of vehicles and roads, and collaborative road management, building a new smart networked
system with "vehicle-road-cloud" integration.
In the field of water conservancy, the Ministry of Water Resources officially issued the
requirements for the construction and operation of rainwater sensing and dam safety monitoring
facilities for small reservoirs nationwide in 2021, explicitly specifying that video monitoring, rainwater
sensing and dam safety monitoring are required for small reservoirs. To meet the business needs, the
Company has developed a low-power, 4G sensing front-end series, which can be quickly deployed in
the field while accessing rainwater sensing devices including rain barrels and water level meters. In
addition, it has integrated such dam safety monitoring devices as seepage gauges, osmometers and
BeiDou GNSS terminals to form a complete AIoT solution.
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(3) IoT Data Capitalization:
The Company is committed to maximizing the value of video data, with continuous exploration of
capabilities of enhancing video-enabled urban governance together with eco-partners based on the
capitalization and commercialization of IoT data. With the targets of safe, efficient and sound urban
operation, clean and orderly urban management, and precise and refined services for the people, the
Company has built city-level video empowerment centers to access urban video data resources for
intelligent analysis and real-time monitoring of urban operation status. In this way, it provides more
than 100 kinds of intelligent algorithms for various urban governance scenarios, such as urban
environments, street order, public sanitation, municipal facilities, and flood prevention, empowering
eco-partners to develop more industry applications tailored to customers' field operations. In a project
in Henan, we built a unified video empowerment center for our client, aggregating city-wide video and
mobile law enforcement devices, with over 70 kinds of city management algorithms loaded. By
connecting to Dahua's city-level video empowerment center, our eco-partners developed field
applications such as the city management law enforcement sub-system, municipal facilities sub-
system, and command and coordination sub-system, thus effectively raising the client's urban
governance capabilities and realizing the capitalization of IoT data.
3.4 Deepening Scenario Values
The Company is committed to innovating and implementing urban digitalization in fields such as
secure society, orderly city, enhanced governance efficiency and green development for the benefit of
people to develop solutions for different government industry scenarios. The Company always bears
in mind the social mission of making the society safer, cities more orderly, governance more efficient
and people's life better.
(1) Making the Society Safer
"Safeguard the new development pattern with the new security pattern". The Company strives to
fulfill its social mission of "building a safer China" by providing comprehensive solution services in
four areas, i.e. public safety, traffic safety, life safety and production safety. It is committed to
materializing the vision of making the society stable and orderly, people travelling safely, masses
living securely and enterprises operating smoothly.
In terms of solutions for the public security, the Company has seized the opportunities
presented by the rapid development of video image intelligence in China's 14th Five-Year Plan, and
has built six application systems, namely, the IOT data access system, the view integration operation
system, the multi-dimensional big data system, the AI matrix model open system, the AR command
and dispatch system, and the security prevention and control business system, centered on the
intelligent IOT capability and supported by the two major capabilities of smart view and smart data,
thus providing customers with richer data access capability, faster target tracking capability, more
efficient data association capability, more convenient command and dispatch capability and more
intelligent security protection capability. In this way, security protection is ensured in all aspects from
cities to villages, from highways to railroads, and from forests to river basins, so as to strengthen the
security of the people and society.
In terms of solutions for the traffic safety, the Company is oriented by the national road traffic
safety plan of the 14th Five-Year Plan, and deepens its efforts in reducing the number of traffic
accidents while controlling their magnitude. With the focus on preventing traffic accidents at the
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source, the Company explores the application of big data and AI technology in traffic management,
and introduces innovative solutions such as traffic accident analysis, traffic safety portrait analysis,
and comprehensive management of traffic hazards, in order to assess the accident trends, uncover
traffic hazards, and achieve precise targeting, thereby resolving deep-rooted problems and improving
the essential traffic safety.
In terms of solutions for the life safety, we aim at "efficient containment and accurate
response", with intensively integrated and efficiently collaborative smart emergency solutions to
improve the monitoring and sensing capability and emergency response capability, so as to make the
risk containment of disasters and accidents more efficient, the allocation of emergency resources
more proper and the coordinated response more rapid. With multi-dimensional monitoring of "smoke,
gas, water, and electricity" data, we provide integrated "sensing + monitoring + analysis + disposal"
urban fire protection IOT monitoring solutions to enhance the ability to identify hidden dangers and
ensure fire safety in cities. For example, the Company supported the building of a fire protection
system in a district of Hangzhou, with the establishment of a comprehensive control platform for
intelligent fire protection. It enabled the networking of more than 30,000 units, access to more than
460,000 IoT devices, and the application of multi-scenario video AI, thus forming a digital fire
protection hub and putting in place a multi-dimensional localized fire protection model to achieve fine
management of fire safety, early warning of predicted fire risks, and accurate and efficient fire-fighting
and rescue. Meanwhile, a closed-loop process for the basic management of hidden fire hazards was
put in place to expedite the response to fire incidents.
(2) Making Cities More Orderly
Orientated around the digitalization of the transportation industry, the Company empowers
various scenarios, including urban traffic order management, rail station operation and management,
and intelligent guard of rail traction substations, with advanced digital technologies, to boost the
digital transformation and upgrade of the transportation industry, and promote more orderly and high-
quality transportation management and operation of transportation facilities.
Rail transit solutions have become a direction that cities are actively investing in, in response
to the high capacity, low energy consumption and relatively clean and environmentally friendly
features of rail transit. According to statistics, rail transit in some cities carries nearly fifty percent of
their entire public transportation, which is expected to further rise to more than seventy percent.
Therefore, maintaining the orderly operation of rail transit is crucial to ensuring the orderly public
mobility in cities. With the goal of ensuring the orderly operation of rail transit, smart station solutions
for urban rail transit address customers' pain points during operations, by applying such technologies
as AI, binocular stereo vision, video stitching, and target recognition to conduct intelligent analysis of
people and objects entering subway stations in real time. By structurally displaying information about
people, human bodies, and objects, and actively analyzing and giving sound and light alerts on
passengers' abnormal behaviors, including reverse walking on escalators, falling down, ticket evasion,
passing objects through bars, and climbing over shield doors, it enables early detection, prevention
and rescue of abnormal events in stations. These solutions carry out refined passenger flow analysis
management, with real-time monitoring of in-station passenger flows, interchange passenger flows,
and passenger flows passing through shield gates. With historical data, they can intelligently predict
future peak events and locations of station passenger flows, and coordinate station staff to guide
passengers in advance to ensure stable station operations. They can manage the entire safety of the
station, and aggregate the data onto the higher-level supervisory platform, thus enabling holographic
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awareness, active evolution, intelligent diagnosis and autonomous operation of rail transit stations as
intelligent urban rail in the new era, providing strong support for the high-quality and orderly
development of urban mobility.
In terms of smart guard solutions for railroad traction substations, these substations play a
vital role in powering trains, ensuring that trains run safely, punctually and efficiently. As these traction
substations become larger in scale, wider in coverage and increasing in number, the traditional mode
of human supervision has become inefficient in precision while high in cost. For this reason, the
transformation of intelligent safety protection, intelligent remote inspection and intelligent safety
operation becomes particularly relevant in the operation and management of railroad traction
substations. The Company has been deeply involved in the intelligent and unmanned transformation
of more than 600 railroad traction substations in China. By establishing such sub-systems as video
monitoring, access control management, environmental monitoring, intelligent control and inspection,
thermal imaging temperature diagnosis, operation management and panoramic AR, we enable the
monitoring of substation scenes, unmanned inspection, safe operation control and integrated
awareness of substation equipment and operation environment. Dahua's smart guard solutions for
railroad traction substations ensure personnel operational safety by identifying helmet at the entrance
of the operation area, setting tripwires for the area, and raising alarms for area intrusion. For the daily
inspection and special inspection of substations, intelligent inspection algorithms are employed to
realize automatic identification of the values and states of equipment meters, cutters, indicators, lights,
and pressing plates at regular intervals or on demand. By monitoring the hot spots temperature of
primary equipment such as main transformers and capacitor reactors with thermographic intelligent
temperature measurement devices, it ensures normal operation of equipment. The use of IoT
awareness technologies greatly lightens the workload of daily inspection personnel and better
ensures the safe and orderly operation of railroads.
(3) Making Governance More Efficient
The Company has always been practicing "business-guided, scenario-based deployment",
empowering urban governance model innovation with digital intelligence. Holding on to the
opportunities arising from the modernization of urban governance systems and capabilities, the
Company provides overall solutions for one-stop management, fine urban governance, grassroots
governance, and community governance, solving various complex problems in urban governance
with intelligent means and real-time online data to enhance public satisfaction.
The solutions of fine urban governance apply such technologies as big data, IoT, cloud
computing and AI to enhance the intelligence of cities, with focus on the fields of street management,
urban sanitation and comprehensive governance. These solutions can intelligently monitor and make
an alert on urban flooding, waste classification, illegal parking on streets, occupied side walk for store
operation, stony waste falling from trucks, unauthorized construction, and missing manhole covers,
and build a city operation and management mode that integrates "sensing, analysis, coordination,
command and service", thus enhancing the fine urban management capabilities and facilitating the
innovation of urban management means, modes and concepts.
(4) Making People's Life Better
"Powered by AI, we adhere to the protection of lucid waters and lush mountains and the
enhancement of people's welfare". Focusing on two major fields of natural ecology and administrative
services, the Company provides integrated applications of IoT sensing in industry-specific business
scenarios including ecological protection, arable land red line guarding, digital twins of water
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conservancy, intelligent elderly care, and food safety, to boost ecological development and make
people's life better.
Relying on digital IoT, AI, Internet+ and other technologies, the smart elderly care solutions
focus on businesses for a variety of scenarios such as living rooms, activity rooms and community
activity centers, taking institutions, communities and households as the basic units, realizing real-time
monitoring of the physical health of the elderly, abnormal behavior warning, and timely alerting of
emergencies, upgrading elderly care services through technologies in aspects such as elderly safety,
elderly health and medical care services.
Through the integration of video AI and IoT sensing application technologies, the smart
solutions for environmental protection achieve the intelligent monitoring and early warning of
various scenarios, especially sewage outlets, to prevent the occurrence of such incidents as illegal
discharge, excessive discharge and human interference on online monitoring, improve the intelligent
application level of prevention and regulation of fixed pollution sources, and accelerate the
transformation of pollution prevention from post-event processing to proactive early warning and
prevention, thus contributing to the achievement of dual-carbon goals for better climate. For example,
in a province in the central and western China, it helped realizing the smart visual supervision of the
discharge of more than 800 key enterprises of pollution sources in 11 cities in the province, with real-
time intelligent management of their discharge status, intelligent early warning of abnormal
discharges, and joint analysis and research on monitoring data to achieve multi-dimensional holistic
management of corporate discharges. Early warnings are issued for suspected abnormal behavior at
sampling points of outfalls to prevent interference with the monitoring sampling process that may
compromise the monitoring data so as to guarantee the truthfulness and accuracy of monitoring data.
The smart visual monitoring and early warning has transformed the traditional management mode of
pollution discharge, with enhanced management capability and efficiency. Meanwhile, it realizes the
networking and sharing of video resources of pollution sources at the provincial, municipal and county
levels, and builds an AI intelligent management system for pollution sources to improve the digital
intelligence of pollution prevention and control management, promote precise and scientific pollution
control, and contribute to pollution prevention.
For the smart solutions for water conservancy, we continuously delve deeper in two major
directions, namely industrial products and industrial algorithms, and explore the needs of business
scenarios, with applications in various areas of water conservancy such as hydrological monitoring,
small reservoir metering, water conservancy project supervision, and river and lake protection. For
example, in a hydrological station project of a river commission, the integrated solution of low-power
intelligent front-end + solar kit incorporating video capture, storage, transmission and analysis was
applied, greatly lowering the project deployment and implementation costs while improving the
delivery efficiency. Based on the network coverage and power supply conditions in the water
conservancy industry, the Company has launched differentiated algorithm training and application
programs on the cloud, edge and end user, and deployed an algorithm training platform in a provincial
Yellow River Authority to assist the owner in incubating featured algorithms that closely match their
needs in actual projects, and jointly explore new models for the development and application of
industrial algorithms.
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4 Enterprise-level Business Solutions: Explore Deep into Industries and Facilitate the Digital
Intelligence Upgrade of Enterprises
4.1 Business Overview
The Company is committed to becoming the preferred supplier of intelligent IoT infrastructure,
the professional service provider of scenario-based digital intelligence applications and the key
builder of the intelligent IoT ecology, helping users optimize their security system, boost their
production efficiency, and support their business management. Through extensive ecological
cooperation, we aim to establish a win-win eco-partnership system, build a smart IOT ecological
community, and fully empower enterprise users to achieve digital intelligence upgrade.
In terms of enterprise businesses, the Company extends into various industries with insight into
the industrial trend, and explores the digital and intelligent needs of enterprises to provide quality
digital intelligence upgrade solutions for each customer. In the fields of manufacturing, construction,
education, electricity, petrochemistry, coal, iron and steel, finance, healthcare, logistics, culture &
tourism, agricultural products, and retail, the Company is actively engaged in innovative practices,
and is committed to becoming the most trusted partner for the digital intelligence upgrade of
enterprises by focusing on optimizing the security system, boosting the production efficiency, and
assisting in management, among other customer value realization.
4.2 Core Strategy
The company has accumulated extensive industry applications while serving the digital
transformation of enterprises. By analyzing these industry applications, it's discovered that different
customers have shown similarity in the application logic of basic businesses, and a large number of
basic businesses and industry businesses also rely on shared middle platform capabilities. In order to
serve the digital transformation of customers from various industries more efficiently, we have
upgraded the solution framework to a unified (1+5+2+N) framework, i.e. 1 set of unified framework to
serve the digital transformation operations, 5 major capability middle platforms to build internal
engines, and 2 major platforms to support N types of enterprise applications, thus accelerating the
roll-out of industrial applications and speeding up the coverage of the scenarios and businesses of
industrial customers.
Middle platform capacity building for enterprises
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IoT middle platform: A set of intelligent IoT architecture is used to access evolving IoT devices in
enterprise business with low code, to solve the problem of the increasing variety of connected
devices on the one hand, and the problem of the increasing networking scale at the park level,
provincial level and national level on the other.
Data middle platform: It provides means of data storage query, processing management and
integrated display, with videos, pictures and structured data as a whole. On the one hand, it solves
the problem of continuously growing data scales and types in enterprise businesses, and mutual
integration required. On the other, it transforms the scenario awareness data into more valuable
business cognition data through comprehensive means such as big data, expert knowledge and
experience accumulation.
Smart Middle Platform: It provides professional AI capability and open AI capability to enable
intelligence in the general and customized scenarios of enterprise businesses. Through awareness
intelligence, IoT intelligence, and data intelligence, it empowers enterprises with more comprehensive
awareness capability, stronger IoT capability, and greater data value.
Interaction Middle Platform： It perfects the twin capability by means of AR display, VR display,
3D display and real-world 3D, improves the data expression capability by means of low-code walls,
and refines the control capability by means of large-screen managers, so that the value of enterprise
digital transformation can be materialized.
Open middle platform: On the one hand, it attracts professional manufacturers in the industry into
a company's business system to jointly enhance the capability foundations; on the other, it opens the
company's capability system to empower its eco-partners and provide more convenient services to its
enterprise customers.
2 major platforms to support N types of applications
For different industry and business needs of enterprises, the Company can provide the locally-
deployed "Haorui" platform and the cloud-deployed "YunRui" platform, in which generic park solutions
and industry-specific solutions are deployed in line with clients' scenarios, continuously consolidating
the existing businesses while exploring replicable and scalable business scenarios of digital
intelligence.
Based on the construction of enterprise middle platform capabilities and the expansion of basic
park businesses, the Company has delved into various industry segments in more than 3,000
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industrial scenarios, such as factories, hospitals, schools, parks, and chemical facilities, to refine
scenario-based solutions and extract in-depth industry business values, providing customers with
implementable, quantifiable, and calculable scenario-based digital intelligence solutions.
4.3 Practice of Values in All Industries
In the fields of enterprise businesses, the Company is actively engaged in innovative practices,
and is committed to becoming the most trusted partner for their digital intelligence upgrade by
focusing on optimizing the security system, boosting the production efficiency, assisting in their
management and other customer value realization.
Security System Optimization
Safety production is a long-term national basic policy as well as the cornerstone of corporate
production and operation. The Company continues to delve into the actual production and operation
scenarios of customers, and combines the capabilities of video IoT with scenarios to achieve
visualization, digitalization and intelligentization based on actual scenarios with the five capabilities of
"Full Sensing, Full Connection, Full Intelligence, Full Computing and Full Ecosystem", so as to
guarantee the safety of personnel, equipment and facilities, production environment and public order
during the production and operation of enterprises.
(1) Personnel safety
Protecting workers' life safety and occupational health is the essence of safety production. Based
on enterprises' safety requirements for their production process, the Company integrates the daily
preventive measures for safety production with AI, realizing early warnings for non-compliant dressing
and abnormal work apparatus in working areas, detecting and analyzing irregularities in the operation
process, and training algorithms for special analysis and diagnostic needs. An application scenario is
an oil depot AI project in the petrochemical industry. With a provincial AI intelligent middle platform, it
allows the intelligent diagnosis of violations in the daily operations of its affiliated oil depots. Relying
on the algorithm training platform, it completes the algorithm training of special wears and behaviors
such as goggles and instrument operations, and eventually implements an AI intelligent middle
platform that integrates 34 kinds of intelligent algorithms for safe operations, providing effective
intelligent management tools for the safety of oil depot operations.
(2) Equipment and facilities safety
Equipment and facilities are the carriers of production and operation of an enterprise; to protect
their safety is to guarantee its lifeline of the enterprise. Based on the mechanisms and requirements
for equipment operation and maintenance in the production process of enterprises, the Company
combines the inspection mechanism of equipment and facilities with AI to achieve, for example, the
daily monitoring and early warning of the operation status of important production devices, regular
and periodic inspection of equipment and facilities, and the analysis and review of major operation
processes of equipment and facilities, which can significantly reduce the repetitive work of daily
inspection personnel and improve the input conditions for predictive maintenance of equipment and
facilities. A specific application scenario is as follows: The online substation inspection solution in the
electric power industry adopts high-precision thermal imaging to realize non-contact long-distance
temperature sensing, and high-precision PTZ to realize data collection of abnormal status of voltage,
current, switch and indicator light of transformers and reactors. The sensing of water accumulation,
temperature and wind speed in the station and the remote control of lights and air conditioners by
dynamic environment monitoring devices realize the mode shift from manual dominance to machine
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dominance, and from on-site operations to remote confirmations in common inspections, including
lights-out inspection, gale inspection, thunderstorm inspection, routine inspection, and one-key
smooth control video with double confirmation. Compared with manual inspection, machines can
improves the efficiency of inspection and maintenance, site control, switch operation, and emergency
repair, with optimized process, released manpower, optimized management and better quality, thus
saving available human resources for more substation operation and maintenance.
(3) Production environment safety
Production environment is the core place of enterprise production and operation. Companies
should adhere to the basic national policy of environmental protection in their production. We conduct
research and development around common hidden dangers in enterprises such as fire, electricity,
dust and exhaust emissions, and integrate the production environment with the capabilities of video
IoT. Through intelligent fire protection IoT solutions, real-time monitoring of enterprise fires and fire
protection networking are realized; through intelligent air switch solutions, the behavior of enterprise
electricity consumption is analyzed and different strategies are adopted when reaching the early
warning and alarm stages to ensure normal electricity consumption of users, with overload and
overcurrent protection, leakage protection, short-circuit protection, arcing protection, and overvoltage
and undervoltage protection; meanwhile the electricity level, current, voltage, and temperature are
detected to ensure the safe electricity consumption. The intelligent smoke, dust, and emission video
detection system enables intelligent video analysis of each monitoring area, and provides timely
alarms once abnormal smoke, dust, and emissions occur, enhancing the response speed of
enterprises to environmental abnormalities, timely detecting and controlling their environmental risks,
and reducing the probability of environmental incidents.
(4) Public order safety
Backed by the construction of smart parks, it strengthens the passage control of production parks
and broadens the fine management of public order. The digital twins technology is employed to
visualize all elements of the spatial structure of a park. Combined with location sensing and video
fusion, it displays the location and image information of personnel and vehicles in real time to realize
focused and structured management of all elements of personnel, vehicles and materials in large-
scale production parks. For example, it provides all-round monitoring of vehicles transporting
hazardous chemical once they enter the park, including their running status, routes, drivers, the use
of dedicated parking lots, and violations, thus improving the safety and standardization of these
vehicles. It provides comprehensive protection of public safety for enterprise operation, management
and safety, improves the management efficiency of parks, enhances parks' safety, and boosts the
intelligent development of parks.
Production Efficiency Improvement
With the continuous development of digital economy, enterprises have an ever more clear
demand for digital transformation. Based on our excellent video technology and intelligent IoT
capability, the Company applies advanced technologies such as visual sensing, AI, big data, and IoT,
to assist enterprises in digital transformation and upgrade from multiple value dimensions like the
digital operation and management of parks, and the digital upgrading of factories (production quality
improvement, production efficiency boost, production cost reduction, and production management
improvement).
(1) Digital operation and management of parks
Traditional industrial business parks are mainly managed by people, resulting in high cost and
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low efficiency in integrated park management. Industrial business parks feature more than 100,000-
level staff, 1,000-level daily visitors, 10,000-level long-term resident staff and a large total number of
vehicles in and out, posing a huge challenge to the integrated operation of visitor management, staff
access management, logistics vehicle management, warehouse platform management and security
and fire alarm in traditional industrial business parks. The intelligent integrated management platform
for digital industrial business parks built by the Company realizes the integrated intelligent
management of attendance, access control, control area, entrances and exits and security and fire
protection through structured information of people and vehicles, enabling marked improvement in the
digital and intelligent management level of business parks.
(2) Digital upgrading of factories
The Company delves into the core areas of enterprise production and boosts the digital
upgrading of factories from multiple dimensions of production process, product quality, personnel
safety and equipment maintenance, through such technical means as intelligent sensing, intelligent
detection, intelligent logistics, and smart data.
Realize the comprehensive digitalization of workshops: Based on the integrated application
of IoT technologies, visual perception and processing technologies, and middleware technologies, it
achieves comprehensive processing and correlation of multi-dimensional heterogeneous data for on-
site subjective/objective data from production equipment, sensors, AGVs, forklifts, and personnel,
combined with the data from business systems such as MES, ERP, and WMS. By improving the
integrity of data, it boosts comprehensive on-site cognition and meets the needs of complex business
scenarios in workshops.
Strengthen the control of the production process: Relying on our video monitoring capability,
coupled with the digital twin technology, we are able to link such information systems as SCP, MES,
EAM, BI and EMS, and integrate physical scenarios and business information system data, to visually
sense the real scenarios of production operations and real-time data, so as to realize the longitudinal
penetration of data and videos in factories, production lines and work sites, detect problems in the
production process at the first time, quickly locate the causes of abnormal alarms, take timely
elimination measures, and boost the decision-making and response efficiency.
Enable visual traceability of the entire production process: To address the pain points of
product defects and batch quality defects in the production process, automatic intelligent detection is
enabled to contain quality risks within the production process. Meanwhile, the business data systems
including the MES, ERP and WMS are connected to achieve visual traceability of the entire
production process of a single product, thus facilitating rapid response to customer complaints and
inquiries about the root causes of product quality defects.
Maintain key production equipment: By means of front-end sensing devices, we can obtain
data such as the vibration, temperature, and rotational speed of the devices in real time, to analyze
their operation status and predict their failure in advance, so that maintenance and repair can be
carried out at an early stage to extend their service life and reduce the loss caused by their failure,
helping manufacturing enterprises guarantee the normal operation of key devices.
Reduce the cost and improve the efficiency of workshops: With self-developed automation
equipment and flexible lines, combined with AGV systems and visual inspection technical means, the
Company penetrate deep into 3C, garment and textile, automobile, machinery and equipment,
agricultural products, household appliances, pharmaceutical and logistics industries, and realize
automatic and intelligent operation of workshop logistics and warehouse logistics by deploying
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automated production lines, AGV, visual inspection, RFID, and sensors, so that these workshops
feature a high degree of automation and flexibility, and intelligent operations are promoted in multiple
scenarios from production workshops, semi-finished product warehouses, finished product
warehouses and logistics warehouses, significantly reducing customer production costs and winning
trust of customers. For example, in an automobile project, 100 AGV robots are deployed to drive
production with work orders, achieving automatic disc allocation, automatic production line loading,
automatic warehousing, and automatic preparation and shipment, improving the disc allocation
efficiency, cutting human costs, and reducing the material cache area by 30%.
Mine deep into the value of manufacturing data: Build a big data industrial platform, with
horizontal interconnection of visual data, IoT data and information system data around marketing,
production and supply, and after-sales services, and analyze and mine the data to extract data value
to support business collaboration, simplify business processes, and assist management decisions,
thus realizing production management system upgrade. For example, in a 3C manufacturing project,
real-time data collection, aggregation, processing, analysis and application are realized across all
areas of the manufacturing base, enabling visual management of the base's production business
execution, logistics and shipment, product quality, energy use, and employee on duty, as well as
traceable and digital production control, with production efficiency and per capita output steadily
increasing to 93%.
Operation Management Facilitation
Based on our capabilities in sensing, connectivity, computing, intelligence and ecology, we aim to
achieve online resources, intelligent businesses and data-driven decision-making. By establishing a
full-domain, full-time digital twin sensing system for enterprises, we enable multi-dimensional and
multi-level accurate monitoring of operating conditions. Data resources are integrated, business
applications are coordinated, and events are handled in a closed-loop manner. By sorting out data
indicators in various dimensions and making dynamic and accurate calculations, the management is
streamlined, operations are made simpler, and administration becomes more efficient, so that the
park data can be "visible", events be "manageable", and operations be "controllable".
Through the digital twin technology, 3D visualization and digital video fusion are realized to
facilitate level-by-level visualization from parks, buildings, interiors, and equipment in enterprise parks
for managers, and build an integrated management system incorporating monitoring, warning,
diagnosis, and analysis for enterprise park management; by integrating information and videos of
production data, processes, and core equipment in manufacturing, the real state of entities is
displayed, improving the efficiency of production management.
Centered on power sources, grids, loads, storage, charging and inspections, it enables real-time
monitoring of the overall energy data across the enterprise, with automatic deployment of energy use
strategies, making the micro-grid in the enterprise park self-adaptive. Meanwhile, it tracks the flow of
each energy source and the carbon footprint to realize the efficient use of energy throughout the
building, facilitating energy saving and emission reduction of the enterprise to fulfill the dual carbon
strategy.
Relying on such technologies as the IoT, cloud computing and big data, multi-type and multi-
brand intelligent equipment resources are integrated and connected to the intelligent park
management platform via an IoT system, to collect, analyze, aggregate and apply enterprise data in a
unified manner. A new digital management system is established, which enables data boards for
operational management and business situations through intelligent and big data analysis, assisting
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managers in making business decisions. For example, in terms of intelligent identification and data
analysis of passenger flows, it realizes macro control of tourists in scenic spots, and enables unified
display of scenic spot data through data interconnection with parking, ticketing and toilet systems,
thus empowering the smart management and operation of scenic spots. In terms of the commercial
chain business, accurate statistics of passenger flows enable the awareness of store operation value
data, which is connected to the business system data to assist operators in decision making.
4.4 Deepening Scenario Values
Focusing on enterprise business scenarios, the Company has been working intensively in
manufacturing, construction, education, electric power, petrochemical, coal, steel, finance, healthcare,
logistics, culture and tourism, agriculture, and retail. Particularly in such core scenarios as parks,
workshops, energy production sites, hospitals, and campuses/classrooms, the Company provides
customers with implementable, quantifiable, and calculable scenario-based digital intelligence
solutions.
Energy production - Intelligent multidimensional awareness is integrated into production
inspections, shaping a new mode of digital intelligent operation and maintenance
In the field of energy production, equipment operation and maintenance also faces numerous
difficulties and challenges, such as limited operation and maintenance personnel, heavy inspection
tasks, and complex operation and maintenance environment. It has always been an area of concern
for the Company to explore how to combine AI technologies with industrial IoT technologies, so that
repetitive tasks can be taken over by machines with intelligent and automated equipment
management, thereby improving the inspection efficiency and inspection quality, reducing inspection
safety risks, and providing intelligent decision-making for the rapid handling of emergency events in a
closed loop.
Leveraging its advantages in the intelligent IoT, the Company realizes human-like inspections of
production operations through its full-awareness capabilities, providing enterprises with a new mode
of digital and intelligent operation and maintenance. Various types of intelligent IoT inspection
methods are adopted to realize equipment ledger management, inspection plan preparation and
automatic execution, intelligent data analysis and early warning, data archiving, and all-weather, all-
time intelligent unmanned inspection through the back-office "desktop" inspection process, without
the need for personnel to go to the site, creating a new mode for the digital and intelligent operation
and maintenance of enterprises. It has been applied in multiple industries. For instance, in the electric
power industry, this O&M mode reduces labor and time costs while enhancing enterprises' digital
construction, with 60% increase in inspection efficiency, 30% reduction in O&M costs, and 10%
reduction in safety violations.
Workshop - The organic integration of industrial data and smart visual unleashes data
value and boosts lean production
In the industrial field, data is a fundamental resource for the integration of manufacturing and
information technologies. However, its value in the production process has not been truly reflected
from its collection to its application. During the process of building digital intelligence solutions for
workshops, the Company observed that the organic integration of industrial IoT, which provides
objective data for management, and video systems, which provide real-time visualization of sites,
created a "digital-visual fusion" base for industrial sites based on the digital twins, enabling more
comprehensive elemental awareness and human-machine interaction.
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This "digital-visual fusion" base achieves personnel management in the business management
logic from personnel safety, to personnel behavior, and to personnel literacy.
It creates the full lifecycle management of equipment from non-standard equipment development
and O&M to equipment health. As for quality optimization in workshops, it realizes the archive
management of data and videos on product quality from the production process and manufacture to
production retracing. It makes data flow, and ultimately brings value to business from data awareness
and presentation to decision-making support.
The Company has gradually demonstrated the effectiveness of the digital intelligence application
in the intelligent workshops built in a number of head manufacturing enterprises: These workshops
can improve the production efficiency by about 10% on average, reduce the processing personnel by
more than 70% with the application of automated equipment, boost the average efficiency of
equipment by 25% with the management of equipment health, and decrease the product batch failure
rate by 15% with continuous optimization of the quality process. By calculation, the digitalization of
workshops can reduce the overall comprehensive operating costs by about 15%. We will continue to
explore new paths for the integration of digital intelligence technologies and industrial manufacturing
scenarios, and promote digital intelligence innovation to power lean factory production.
Campus - Serve the digital intelligence reform of education with the focus on "balance,
precision, efficiency and security"
In the education industry, the Company focuses on the four value orientations of "balanced
education, precise teaching, efficient management, and safe guard" to serve the digital intelligence
reform of education with technologies. Leveraging its strengths in video and AI, the Company has
launched the teaching recording solution, which combines with the construction of "three classrooms"
to realize remote interactive teaching and high-quality resource sharing and promote education
balance. The Company has been vigorously exploring businesses and products related to smart
classrooms, and prioritize it as a key development direction, to transform traditional classrooms into
smart classrooms, so as to boost the teaching efficiency, improve the teaching environment and
assist in teaching evaluation. The AI classroom solution is launched to realize structured teaching
process through AI, and provide intelligent classroom patrol management for schools to enhance the
objectivity and effectiveness of teaching management. Meanwhile, based on the objective
performance of each student in the classroom, it can combine with the intelligent lesson preparation
system to provide targeted training for different weaknesses of each student, achieving precise
teaching. Through the smart blackboard, the traditional podium-centered teaching mode is replaced
by multi-way interactions in the classroom, mobilizing students' imagination and enlivening the
classroom. The "smart lighting" solution solves the "uneven lighting" and "easy flickering" problems in
traditional classrooms, and creates more comfortable and intelligent classroom lighting to reduce
students' myopia risk and support their growth in a healthy learning environment.
For example, in a key university, the Company has helped solve the problem of over-speeding
vehicles on campus, with a 40% reduction in over-speeding vehicles; by building smart dormitory
management, the satisfaction of the logistics has increased by 25%. The construction of an integrated
municipal bureau-school risk prevention and control system in Shaoxing City, covering 1,200 schools
in 6 districts and counties, has set up an all-round, bureau-school integrated campus safety
prevention and control system to strengthen campus safety. The Company has constructed smart
classrooms for schools in Taixing City, Jiangsu Province, to create more comfortable and intelligent
classroom lighting, reduce the risk of myopia among students, facilitate precise teaching, improve
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education quality, and promote balanced and high-quality development of education in the region.
Hospital - Focus on intelligence and boost the construction of "three-in-one" smart
hospitals
In the process of supporting the construction of intelligent hospitals, the Company has always
focused on the core capacity building of hospitals and the "three-in-one" (medical care, service and
management) philosophy of national intelligent hospitals. By creating one-stop solutions for seven
hospital intelligence systems (hospital building intelligence, patient service intelligence, medical
business intelligence, management decision-making intelligence, etc.), focusing on such aspects as
patient experience, medical care and hospital management, we aim to improve the efficiency of
medical services and enhance the level of fine hospital management in all aspects. By means of
video awareness, multi-element IoT, full-scene intelligence and digital visualization application, it
enables harmonious, efficient and intelligent operation of hospitals and delivers brand-new
experience for the intelligence upgrade of hospital.
Regarding its businesses, the Company comprehensively adapts to and serves the whole
process of patient care from admission, consultation to hospitalization and logistics management of
hospitals. For admission, we provide intelligent admission management such as intelligent security
check, key personnel pre-identification and contactless temperature measurement. Comprehensive
information guide and number calling service is provided for registration service, waiting, examination
and medicine collection. For the "one patient, one companion" at special times, the Company has
launched an intelligent management solution for visiting companions that integrates personnel
information collection, intercom and access control, which greatly enhances the safety and efficiency
of ward management. In order to improve the service quality and efficiency of nursing care, the
Company has introduced a smart ward solution, which covers nursing care intercom, nursing
information screen, bedside interaction, and mobile transfusion, among others.
For example, in a large 3A hospital in Zhejiang, the Company has established such solutions for
medical and nursing intercom, doctor-patient companion, mobile nursing, and nurse station
informatization to solve the problem of ward nursing information flow, and applied multidimensional
awareness technologies to assist in medical decision-making, realizing collaborative awareness of
patients, medical care, hospitals, and medical equipment, thus saving 40% of repetitive paper work,
optimizing 30% of the work content, and improving 20% of the medical and nursing efficiency. It
promotes the harmony between doctors and patients while improving the quality of medical care and
service efficiency, satisfying people's high standards and requirements for medical and health
services.
Park - Full-scene intelligent awareness boosts the digital intelligence upgrade of park
management
With the continued deployment of digital intelligence technologies, the role played by the
Company in parks is also constantly upgraded, becoming increasingly more important. The Company
has long been developing park digitization, starting from the security monitoring business at the
beginning to providing comprehensive digital intelligent park solution services, realizing the shift from
single scene coverage to multi-scene multi-business collaboration, and from the edge business to the
core business of park management and operation. Based on smart IoT technologies, the Company
aims to build a new type of digital intelligent building parks that are safe, convenient, intelligent, green
and efficient, thus enhancing users' office experience, reducing the operating costs of enterprises,
improving the efficiency of management departments, transforming traditional parks into intelligent
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parks, and bringing tangible value for customers.
For example, the Company has helped a 3C electronic enterprise to solve the access issue of
more than 100,000 people, with a 20% increase in access efficiency, and improved its daily visitor
management of 1,000 visitors to transform from human governance to digital governance. Moreover,
it has enabled the IoT access to the original system, thus achieving unified processing. The intelligent
application has enhanced the security management of the perimeter, personnel, vehicles and
information of the park, thus resolving the shortage of administrative personnel in the park and
reducing the management workload by 30%.
5. Small and Medium-sized Business (SMB)
Small and medium-sized enterprises are the first to perceive the gradual pick-up of the market as
the economy continues to recover. The smart IoT industry is rapidly penetrating into downstream
markets, with rapidly growing industry demand. Facing the fragmented market with widely
differentiated product demands, Dahua relies on the video + IoT multi-dimensional intelligent
application, and directly targets the terminal market segments, with continuous efforts in improving
products and services. It persistently broadens and deepens the coverage of channels, and joins
hands with partners to build a win-win digital intelligence ecosystem to jointly create values. By
consolidating its advantages in developing the digital intelligence ecology, Dahua will continue to
implement capabilities and key initiatives including deep market cultivation, resource investment, and
channel expansion to enhance its capability of integrated empowerment, jointly create value and
achieve win-win development with partners on this new journey of digital intelligence.
5.1 Expand and refine channels to open up business segments
With the surge in demand for various intelligent scenario segments in the IoT industry driven by
relevant policies in China, Dahua has accumulated solutions for more than 5,000 scenarios in
thousands of industries based on its continuous build-up of video-centric IoT technologies and its
capabilities in hardware integration, AI and solution integration to scenarios, and can further penetrate
into the downstream market across the industry and continuously tap into the fragmented market
product demand, hence enhancing the core competitiveness of end-user service providers. In a
fragmented market, the defining factor is the coverage of channels. Our SMB business always
adheres to the horizontal expansion and vertical deepening of channel coverage. In addition, with the
aim of establishing a "digital marketing service platform system for cloud-ecommerce and partners",
we work to realize the digital operation for partners and load "full-stack security+" business for them.
Moreover, we continue to expand specialized partners to further explore downstream SMB business,
which will in turn stimulate SMB demands more and yield significant results.
5.2 Expand channels for incremental markets and build an integrated IoT management
platforms
Focusing on value customers of small and medium-sized enterprises, our SMB is committed to
building one-stop integrated IoT management platforms incorporating products, solutions, operations
and services for small and medium-sized enterprises and related practitioners. These platforms can
be connected to such major products as videos, access control systems, visual intercom systems,
public radio systems, fire-fighting systems, transmission systems, parking management, display
systems, and charging pile systems, encompassing nearly 10,000 access layer devices, and can
build one-stop solutions for scenarios of residential quarters, offices, stores and factory parks to help
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small and medium-sized enterprises reduce costs and increase efficiency.
5.3 Build partners' core competitiveness to boost their high-quality development
Centering on the channel business capability, delivery empowerment capability and operation
capability in the process of digital transformation of small and medium-sized enterprises, we provide
partners with "accurate and effective" empowerment plans at high frequency through both online and
offline methods. Meanwhile, the SMB group in China always insists on empowering thousands of
businesses in all industry with the five capabilities of "full awareness, full intelligence, full connectivity,
full computing and full ecosystem", so as to continuously build partners' core competitiveness and
improve their channel business capabilities. In addition, the SMB business in China integrates the
resources of the delivery center and operation center to continuously build the channel ecosystem
and deliver such services as standardized project delivery capability and operation capability to help
SMEs in digital intelligence transform and upgrade.
6 Yunrui: A Cloud Service Platform for Digital Intelligence Upgrading of Enterprises
6.1 Business Overview
Through leading cloud-based intelligent applications and open AI algorithm ecosystem, our
enterprise-oriented platform Dahua Yunrui guides enterprises to optimize their management efficiency,
boost business efficiency, explore data value and avoid operational risks. Comprising the public cloud
SaaS applications, an open platform for developers, and AI capability modules, Dahua Yunrui
features low cost, high availability, rapid deployment and flexible expansion, which plays an important
supporting role in developing corporate software systems. Leveraging the platform advantages,
Yunrui provides customers with cloud digital intelligence services with low threshold and easy
application, so as to speed up enterprise digital intelligence transformation.
During the reporting period, the development of the SaaS industry showed a trend from pan-
industry and generality to deep development in both industries and businesses. As for the vertical
industry direction, the digital intelligence IoT SaaS was deepening its penetration in the enterprise
operation and management process. With SaaS products for vertical industries, suppliers are
required to have deeper understanding of industries, more agile response to demands, and stricter
requirements on development costs.
In response to the changing industry trends, Dahua Yunrui continuously improves its knowledge
of industries through in-depth exploration of corporate business scenarios, creates industry scenario-
based intelligent applications, improves various scenario-based IoT solutions, and expands
application-level ecological capabilities to provide smart IoT services more suitable for corporate
operation and management. In terms of business scenario intelligence, Dahua Yunrui has added
nearly 50 kinds of cloud intelligence algorithms and early warning signals, which greatly enriches the
scenario adaptation capability of enterprises in the process of digital intelligence upgrading. Moreover,
it has further optimized the AI open platform to make the process of independent training and
distribution of user algorithms simpler and more convenient. In terms of improving IoT solutions,
Yunrui has built a highly stable access architecture, which integrates the front and back-end intelligent
devices and edge platforms of Dahua, enriching the access applications of various IoT-aware devices
and forming an integrated solution of end user, edge and cloud. In terms of eco-application expansion,
Dahua Yunrui is actively building an ISV eco-partner system, creating a middle platform for low-code
development which has been made open to the public. By leveraging the open ecology, Yunrui has
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enriched its business capabilities and realized the win-win development with its partners.
6.2 Industrial Application
Yunrui's product applications cover various scenarios including chain operation, community
property, logistics, construction sites, farming, cultural tourism, general education, parking and parks.
At present, the platform has served over 7,000 enterprises, helped nearly 1.6 million enterprise
managers and operators, connected 150,000 stores, served more than 7,000 residential quarters with
6 million owners, served over 15,000 parking lots with more than 10 million parking fee payments,
and provided smart IoT services for over 4,000 schools and enterprise parks in various kinds.
As for the development of business and technologies, Yunrui continues to refine business
scenarios in various industries and accumulate technologies. Yunrui and Cloud-Link have completed
the splitting of services to precisely match customers' usage scenarios, with differentiated
development of products and services for B- and C-end customers, and enhanced scenario-based
implementation capabilities and ease of use of products. Yunrui has comprehensively deployed its
basic capabilities across the board to build four major middle platforms of IoT, business, data and AI,
providing basic SaaS services for cloud-based products in various industries and improving business
reusability and product stability.
Closed-loop enterprise solutions are provided. Through public cloud deployment, Yunrui provides
enterprises with more convenient and low-cost deployment capabilities for various projects, while
simultaneously offering mobile apps, small programs, PC terminals, and WEB access to various user
groups, greatly improving the convenience of human-computer interaction for the implementation of
enterprise solutions in various industries, offering more effective closed-loop scenarios for various
enterprises, and greatly enhancing the competitiveness of our enterprise solutions in various
industries.
6.3 Cooperation Mode
Through rapid development, Dahua Yunrui has established a set of fully open matching system
for business and technologies, while covering open hardware connection, open middle platform
fundamental capabilities and open industrial SAAS business. With the public cloud as the carrier,
Dahua Yunrui provides rich open interfaces and creates a low-code development community to
continuously meet developers' requirements for app development and customization, and rapidly
empowers customers in various industries to build required industrial SaaS products with its
ecosystem. Dahua Yunrui has simultaneously established an IoT access middle platform to
comprehensively integrate various IoT devices, and strengthened the access capability of the IoT
hardware into ecosystem to support the closed-loop IoT business of ecological customers. By
accessing high-quality industry ecological partners such as DingTalk, WeCom, and Xiao Du, Dahua
Yunrui actively promotes the ecological cooperation of enterprises and further enhances the
completeness and efficiency of Yunrui SAAS applications by integrating organization and enterprise
business, thus promoting the closed-loop business and pipeline loading capabilities of Dahua Yunrui
products.
7. Operator Business: Jointly Expand the Digital Intelligence Market with Complementary
Capabilities
The video surveillance industry is rapidly transforming towards the "digital intelligence stage"
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featuring high definition, intelligence, large scale and intensiveness. Relying on operators' large-
bandwidth communication networks and channel coverage capabilities, combined with Dahua's
leading capabilities in video perception, storage, video analysis, processing and AI recognition, the
two parties join forces in "computing power + capability" on key fields such as AI, cloud computing,
big data and IoT to expand the digital intelligence market together and boost the development of
digital economy.
Regarding front-end products, targeting the household market and SMEs clustered market, the
Company collaborates with operators to build front-end AI devices supporting full-color HD two-way
intercom and structured multi-computing power, which are widely used in business scenarios such as
housekeeping and countryside safety. The devices have been applied on a large scale in such
provinces as Guangdong, Zhejiang, Sichuan, Guangxi, Guizhou, Shaanxi, Liaoning and Hunan,
serving over 5 million households.
Regarding software platforms, the Company has created a video capability platform tailored for
operators to enhance the overall solution competitiveness. This video capability platform features
strengthened application capabilities, and a dedicated algorithm library, with enhanced algorithm
access, accuracy, and distribution capabilities. In addition, the platform further integrates with
operators' business, realizing the multi-tenant and business navigation mode, zero equipment
installation and maintenance configuration, batch addition of national standard equipment, and
installation and maintenance account attachment. By cooperating with operators to package different
AI scenario-based solutions, the platform also significantly compresses the storage and computing
costs by accessing cloud, thus reducing the usage costs of target customers.
In the government/enterprise industry market, the Company actively interacts with operators'
provincial/municipal/county companies in various industries such as social governance, ecological
protection, natural resources, education and healthcare. The Company brings into play its expertise in
products and solutions, complemented by operators' capabilities in links, computing power and
services for joint development to serve the digital intelligence transformation of governments and
enterprises.
8. Innovated Business
In recent years, the scope of smart IoT industry has been extended. Based on the in-depth
understanding of customers' diversified demands and rich experience in the field of smart IoT industry
over the years, Dahua continues to develop innovated business in the field of industrial IoT, and
provides customers with more abundant and complete solutions. The Company has been looking for
fields with great growth potential and enormous market size, and has developed innovated business
through talent selection and corresponding incentive mechanism. The rapid development of
innovated business has greatly broadened the channel of the Company's smart IoT, which is an
important driving force for the Company to keep moving forward at a high speed.
8.1 Machine Vision/Autonomous Mobile Robot
HuaRay Technology, a subsidiary of Dahua, focuses on the core fields of industrial Internet,
intelligent manufacturing and intelligent logistics, and stays committed to the research on industrial
digitalization, and intelligent industrial vision and warehousing logistics. Its business includes machine
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vision and autonomous mobile robot:
Machine vision achieves high-precision detection, identification, measurement, positioning and
guidance functions by robots and automation equipment rather than human eyes, assisting
enterprises to build digital workshops and smart factories;
Autonomous mobile robot is powered by battery, and equipped with electromagnetic, vision,
laser and other navigation modules. It can move autonomously along the planned route, and
serves as a means of transportation with safety protection and a variety of load shifting
functions.
Focusing on industry scenario-based requirements, HuaRay Technology provides downstream
users with full-link product solutions and system services through awareness, algorithms, solutions
and rich applications for industrial Internet.
With years of technological accumulation, HuaRay Technology has developed core technologies
such as optical imaging, high-precision image processing, visual algorithm programming, embedded
heterogeneous computing, miniaturized hardware design with ultra-low power consumption, cluster
scheduling, autonomous navigation and intelligent battery management system. In addition, with
machine vision algorithm platform and robot RCS scheduling platform as the core, HuaRay
Technology has launched serial products and solutions for industrial vision equipment, including area
scan camera, line scan camera, smart camera, code reader, and 3D camera, as well as for all type of
autonomous mobile robot including latent robot, load shifting/heavy load robot and forklift robot, all of
which have been successfully applied in lithium photovoltaic, logistics, 3C manufacturing, textile,
electricity, automotive and parts, liquid crystal panels, food, semiconductor and other industries. For
example, in the lithium and PCB industry, the newly released 2500W 2CH CXP-6 industrial camera is
widely used in high rate detection (positioning, defect detection) scenarios, the 2K small-size Gigabit
line scan camera is successfully applied in the winding detection process of lithium electricity, and the
whole series of code readers is deployed on a large scale in the coding reading scenario of lithium
electricity, achieving the full process coverage and traceability. Another example is the food industry.
Forklift AMR is provided for a leading enterprise on a large scale with four-way shuttle and other
automation equipment, to realize the modern storage practice of efficient unmanned handling in large
production bases in multiple regions.
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HuaRay Technology continues to explore new terminal application scenarios to help customers
improve quality, increase efficiency, cut cost and reduce inventory, so as to ultimately achieve
"interconnectivity, man-machine collaboration, data-driven, and intelligent transformation",
empowering all types of industries and promoting the development of innovative global intelligent
manufacturing.
1. Machine vision
With the evolution of industrial automation technology, the machine vision industry scales up
applications gradually. The global market size of GGII is expected to exceed RMB 120 billion by 2025.
With the algorithm platform software as the core, HuaRay Technology integrates industrial
cameras, smart cameras, smart sensors, and other products into solutions to realize the application
of defect detection, positioning guidance, identification and measurement, providing customers with
one-stop procurement and vision solutions for subdivided industries.
In 2022, Version 3.0 of the machine vision algorithm platform was released with 160+ application
tool sets and 1,500+ operators to enrich the AI+ applications in various industries with the latest deep
learning training platform, which fully supports secondary development. The product range of
industrial cameras has been enriched, with resolutions ranging from 300,000 pixels to 600
megapixels. The interfaces support GigE, USB, CameraLink, 10GigE and CoaXPress.
Machine vision algorithm platform
HuaRay Technology has independently developed machine vision algorithm platform MVP, which
is dedicated to providing customers with algorithm tools to quickly build vision applications. Based on
cloud edge collaboration of industrial Internet, concurrent big data processing, interconnectivity,
cluster scheduling and other core technologies, HuaRay Technology has established a big data
detection model by adopting the overall architecture of "cloud-edge-end user" and the integration of
edge computing server and device, and by carrying out training in awareness, cognition and decision
making through a deep learning algorithm combining visual images of a large quantity of industrial
parts. The model can realize high-precision and high-efficiency 2D and 3D vision positioning, image
recognition, defect detection, 3D reconstruction and other functions. In addition, it adopts GUI visual
interface, allowing users to freely build the visual process and quickly configure visual solutions by
simply dragging. It supports multi-task synchronization and multi-process asynchrony as well as the
provision of rich communication interfaces to meet the demands for the highly efficient application of
multiple products. At the same time, the deep learning interface has been opened on the MVP
algorithm platform, supporting the reasoning application of AI model.
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Machine vision hardware products
In the aspect of machine vision hardware products, HuaRay Technology has gradually changed
from the manufacturer of single industrial cameras to the provider of machine vision core components.
It offers a full series of products related to vision integration solution, such as area scan camera, line
scan camera, 3D camera, smart camera, code reader, vision controller, lens and light source.
2. Autonomous mobile robot
Autonomous mobile robots have achieved rapid development with global technological
innovation and industrial upgrading. According to GGII statistics, its market size is expected to exceed
RMB 100 billion in 2026.
HuaRay Technology has launched the typical intelligent logistics system with extensive
application, including industrial autonomous mobile robot, automatic charging, communication system
(AP/5G), and robot cluster scheduling algorithm platform, to provide intelligent factories with all kinds
of solutions such as automatic loading and unloading, and Goods-to-Person (GTP) picking system.
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Autonomous mobile robot mass scheduling solution
HuaRay Technology RCS scheduling system: Control the collaborative operation of multiple
robots simultaneously and enable the coordination of multiple machine types, satisfying requirements
of different scenarios such as the transport between production lines of the factory warehouse and
the selection of the e-commerce warehouse. Mass cluster scheduling capability and global traffic
control capability have been developed to support cross-region and cross-layer scenarios.
Multi-vehicle scheduling free of congestion: With combined broadcast and low latency,
enable global route planning, real-time adjustment and self-learning algorithm to realize
traffic prediction and other scheduling strategies;
Multidimensional task allocation: Upgrade multidimensional data mining and data analysis to
achieve task consolidation/pre-allocation and equipment pre-scheduling capabilities;
Wide-area scene adaptation: Support access to all kinds of automation equipment (machine,
hoist, robotic arm, ladder control, access control, etc.) to realize the whole process of multi-
floor unmanned scheduling.
Autonomous mobile robot hardware products
The industrial handling robots of HuaRay Technology, including latent robot, load shifting/heavy
load robot and forklift robot, support diverse network systems and intelligent charging systems, and
are widely used in modern storage management, and production and handling scenarios in various
industries. The new generation of latent robot series products has been released in 2022, enabling
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more stable and safe products, faster deployment, and higher operation accuracy. Its load
specifications cover typical scenarios such as 600 Kg, 1000 Kg, 2000 Kg and 3000 Kg. The
navigation mode realizes laser SLAM navigation, visual navigation, inertial navigation and multi-
sensor integrated navigation, which it compatible with visual obstacle avoidance and TOF three-
dimensional obstacle avoidance, and achieves a positioning accuracy of ±5mm. The 5G
communication scheduling forklift has a small control latency, which realizes business expansion from
indoor to outdoor. It has been widely applied in the new energy, auto parts, textile, 3C and household
appliance industries.
At present, the products of HuaRay Technology have steadily extend the coverage from China to
Japan, South Korea, South Asia, Europe, North America, and other regions, and is gradually
expanding the influence in the global market.
8.2 Smart Life
Imou, a subsidiary of Dahua, is a value-added service provider of home intelligent hardware and
software based on AI and cloud computing capability with vision technology as the core, and also a
security-centric home intelligent solution provider.
After years of development, Imou has established four product systems, namely, “Imou Security,
Imou Internet, Imou Robot and Imou Lighting”, to serve the global civil smart IoT market, providing the
full scenario home intelligent solutions for global consumers based on the AI capability of Imou and
the support of Imou Cloud platform. Imou strives to create a simpler, safer and smarter life for each
user through cutting-edge technology and intelligent products.
1. Intelligent home products
Leveraging its technological superiority, Imou focuses on core products to meet the diversified
product requirements of consumers in the household scenario. In 2022, Imou announced the all-sided
launch of smart home business, and proposed the 2+4+N strategy. Four series of smart home
products have been established based on the core technology of cloud +AI to launch full-scale Imou
smart home products.
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Imou Security includes home surveillance cameras, smart door locks, smart doorbells and smart
cat eyes and other product categories. It is dedicated to ensuring family security through the
constantly upgraded vision-centric smart home security system. In 2022, a new generation of battery-
driven camera TB3 and AI upgraded series of home cameras were developed to enrich the functions
of home cameras through deep integration with intelligent vision and video technology, and, in terms
of wireless technology, a number of models have been developed to support Wi-Fi 6, innovatively
improving and enriching the user experience of smart home on the basis of meeting the rigid
requirements of home security.
Smart door locks, smart cat eyes, and smart doorbells facilitate the in-depth development of the
access scenario based on the core vision advantages. In 2022, the new ROCK1 series products were
developed and the alarm security system for wandering, intimidation, high temperature, and illegal
users was launched integrating visual AI and awareness system, offering all-day video surveillance,
call services, intelligent weather services, and other services. At present, smart door locks have been
promoted and applied in the preliminary decoration business of smart home for leading real estate
developers such as Country Garden, Poly Group and Binjiang Real Estate.
Imou Internet includes wireless routers, infrared remote controls, sensors, and other products.
Keeping up with the latest wireless technology, it released a variety of Wi-Fi 6 routers in 2022 to tap
into domestic operators and the sales channels of overseas countries, which not only provide
consumers with various types of smart home products, but also offer a more stable wireless network
to ensure a smooth wireless experience.
Imou Robot includes robot vacuums, hand-held floor washing machines and other products. In
2022, RV2, an ultra-thin all-around robot vacuum, was released with an ultra-thin body design and
functions of automatic dust collection, and automatic cleaning and drying of mop, truly freeing
consumers from housework and allowing them to enjoy convenient life. In addition, SV1, the
intelligent sterilizing hand-held floor washing machine, was launched to reinforce the floor cleaning
function with sterilizing effect, so that users can be more efficient with their housework.
Imou Lighting includes a series of lighting products such as smart bulbs and sockets. In 2022,
CL1B-5, the smart color bulb, was released to bring the goodness of life to consumers through the
integration of technology and beauty.
2. Imou Cloud IoT cloud platform
With respect to IoT cloud platform, Imou focuses on the PaaS cloud platform services in the field
of IoT. In order to meet users' demands for the storage and application of IoT data, Imou is committed
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to the research and development, operation and application of large-scale, high-security cloud
resources, achieving diversified functions such as access, encryption, forwarding, storage, intelligent
analysis and calculation of IoT device data. The strong cloud business team and well-developed
cloud business architecture provide the foundation for the intelligent devices independently developed
by Imou to access cloud. By 2022, the number of AIoT device access and users of Imou Cloud
worldwide has grown rapidly, with the overall increase of AIoT device access exceeding 30%, global
user registration increase exceeding 40%, and overseas user increase of more than 100%. The
global monthly active users of Imou Cloud platform are reaching 12 million, demonstrating an
increase of more than 40%.
For regular consumers, Imou Cloud provides consumers with paid scenario-oriented and
customized value-added services such as cloud storage, call reminder, AI reminder, and device
sharing, optimizing user experience focusing on the core functions of device preview, device addition,
and voice intercom. In 2022, Imou further upgraded cloud disk service and launched online duty
service to constantly meet the demands of users in diversified scenarios. In addition, according to the
usage and consumption habits of overseas users, Imou has reconstructed the overseas value-added
service system by taking into account the differentiation of overseas scenarios. The overseas value-
added service has been expanded to major business countries in America, Asia and other regions.
For enterprise-level customers, Imou Cloud platform continues to improve the reliable operation
and maintenance management capability of cross-region nodes and cross-cloud vendors, providing
various complex application development for Imou Cloud developers and strategic customers. In
terms of device access, rapid import of third-party brand products is made possible through SDK, IoT
module, and video module to facilitate access to Imou Cloud by more customer products. In terms of
application, Imou provides open AIoT capability for third-party SaaS developers through Open AI and
Open SDK.
Imou will continue to delve into service application scenarios to optimize products, innovate
technologies, and further develop smart home ecosystem, providing more abundant and high-quality
security protection and smart life experience for global consumers and smart home enthusiasts.
8.3 Automotive Electronics
Hirige, a subsidiary of Dahua, focuses on intelligent vehicle products and industry solutions.
Giving full play to the technical advantages in the field of video, taking video as the core, laying out
the direction of smart driving, and combining radar, AI, perceptual data analysis and processing
technologies, it is dedicated to becoming an industry-leading supplier and solution provider of
intelligent vehicle electronic products with video technology as the core. Currently, Hirige has
obtained IATF16949 quality management system certification, as well as the national high-tech
enterprise certification. Its product solutions provide comprehensive services for passenger vehicles
at home and abroad, commercial vehicle customers as well as consumers and industry users at all
levels.
1. Passenger vehicle market
Aiming at the factory-installed products of passenger cars, Hirige integrates sophisticated smart
driving technology into the factory-installed products, and realizes smart driving, automatic parking
and other technical systems through the on-board camera, on-board radar, domain control and other
products. Hirige has independently developed Hi-Pilot smart driving system, which can sense the
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road environment in real time with the help of visual sensors and radar sensors, and identify road
lane lines, roadsides, vehicles, pedestrians and other information. Combined with artificial intelligence,
high precision positioning, vehicle control, path planning, decision control algorithm and other
technologies, the horizontal and vertical control and man-machine interaction of vehicles are realized.
At present, Hirige has achieved mass production of L2+ class auxiliary driving system, intelligent
parking system, 1R1V system, and intelligent cockpit system, empowering the digital and intelligent
transformation of the automotive industry.
Hirige has always been deeply engaged in cultivating the top customers of its own brand of
passenger vehicles, officially mass-producing full-automatic parking products, auxiliary driving
products, and 1R1V products based on the integration of vision and ultrasonic radar, and has
obtained designated projects from a variety of auto factories. Hirige will continue to increase its
investment in intelligent driving sensors, algorithms and system products, give full play to the
technical advantages of automotive electronics based on vision, ultrasonic and millimeter-wave radar
integrated with perception, and release more competitive solutions on intelligent driving and intelligent
cockpit.
In 2022, Hirige launched 1R1V, 3R1V and other integrated cost-effective solutions in the field of
intelligent driving, enabling functions of the full series of L2 ADAS intelligent driving, including ACC,
LCC, AEB, LDW, FCW, LKA, TJA, ICA, TSR, and IHMA, as well as supporting ADAS five-star scoring
of CNCAP2021 version and I-VISTA2020 version. In addition, Hirige has launched a lightweight
driving-parking integrated solution, thus providing a more adaptive version of intelligent driving
products for the intelligent system of automobile enterprises. The solution realizes more complex and
reliable driving-parking integrated function, supports active safety, HWA highway assisted driving, and
intelligent parking assisted, and gets ready to upgrade to a higher level intelligent driving system in
the future.
In the field of intelligent cockpit, Hirige determines the shifting of development orientation from
cockpit safety system to cockpit interactive system and cockpit health system. The mass production
of all kinds of vision sensors in the cockpit has been achieved, and intelligent algorithms in the cockpit
have been released to realize driver fatigue detection, dangerous driving behavior recognition,
gesture and emotion recognition, heart rate detection and other functions. Meanwhile, 360
circumnavigation algorithm has also been released in view of the performance improvement of
vehicle and engine. Hirige is dedicated to assisting customers to create intelligent cockpit with distinct
features and enhancing the in-cockpit driving experience.
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With the accelerated improvement of intelligent driving function, products of Hirige have made
advance in development by leaps and bounds. In the field of vision sensors, Hirige has released and
applied products with different resolutions of circum view, front view and panorama view. It has also
achieved mass production of these products by working with a number of domestic top OEM auto
factories, effectively improving the market share and laying the foundation for further market
expansion.
In the field of millimeter wave radar, Hirige is committed to making sustained and vigorous
investment with the trend of vehicle radar localization. It has launched third-generation of forward
radar and blind area radar with better performance, and extended product coverage leveraging
development of cockpit radar and door anti-collision radar. In addition, Hirige has invested in the pre-
study of imaging radar, which has laid the foundation for the subsequent rapid growth.
2. Commercial vehicle market
At present, a large number of domestic commercial vehicle resources carry a large number of
passenger and freight besides aviation, railway and water transportation, making commercial vehicles
closely related to people's production and life. However, safety problems such as traffic accidents,
casualties and cargo damage have become increasingly prominent, and major traffic accidents have
been reported frequently. After speeding and fatigue driving, traffic accidents caused by blind areas of
vision have significantly increased. Front-vehicle collision alarm, lane departure alarm, fatigue driving
alarm and driving behavior analysis have gradually become the standard configurations of active
safety advanced auxiliary driving construction projects of commercial vehicle all over the country.
Hirige has deeply studied vehicle operation scenarios, combined with the actual vehicle operation
environment, and conducted in-depth exploration in the effect and efficiency of the algorithm, so as to
further improve the performance of the product system and realize the factory-installed and after-
market-installed intelligent vehicle solutions through active safety products, auxiliary driving products,
360-degree panoramic view system and other product systems, and intelligently empower
commercial vehicles. At present, the solution has been widely applied in the freight logistics, waste
residue, "tourist bus, Class C or above passenger car, and special vehicle for the transport of
hazardous chemicals, fireworks and crackers and civil explosives", public transportation, school
buses, sanitation vehicles and other fields, providing advanced automotive electronic products and
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solutions to the world.
Key technologies for 2022 full-force advancement in commercial vehicle market: Focus on the
precision optimization of Beidou positioning, the stability optimization of new national standard
products and the optimization of intelligent algorithms. Products and solutions: In addition to the
improvement of the traditional bus, rental cars, engineering vehicles, Hirige has also expanded
market in the emerging industry segment: Offer industry solutions in marine, three-wheeled gas truck,
forklift, pavement treatment and other industries. Model projects: A series of benchmarking projects
have been established, such as Changsha public transportation integration system, Dalian
comprehensive leasing management and application system, and Guangdong intelligent ship in
inland river basin, among others.
In 2023, Hirige will practice the strategy of deploying superior resources to develop key industries
in the commercial vehicle market. To meet the new national standard, a number of functions have
been added to driving recorders, including audio and video recording, Bluetooth communication,
wireless public network communication, automatic time calibration, and driver identification. In
addition, positioning are further enhanced, and 1R1V active safety system is launched, further
facilitating business development in the intelligent commercial vehicles market. In the market of
“tourist bus, Class C or above passenger car, special vehicle for the transport of hazardous chemicals,
fireworks and crackers and civil explosives, and heavy duty vehicles” and freight transport, the
coverage and application of three-piece set of the new national standard (ministry standard
machine/ADAS/DSM) will be promoted at a faster pace in accordance with the new national standard
laws and regulations. In the public transportation market, Hirige will fully complete the coverage of
national public transportation from provinces to cities, and promote the full scale implementation of
the second-generation public transportation integration solution (including bus dispatching, active
safety, blind area monitoring, 360-degree panoramic view, passenger flow statistics, illegal occupation
of bus lanes, zebra crossing monitoring, and electronic rearview mirror). In the rental car market,
Hirige will accomplish full-system product release, and increase provincial market share with the
issue of the national regulations on the control of online car hailing.
Hirige will maintain the investment in commercial vehicle market research and development, and
delve into research on customer business demands to constantly improve our products and solutions,
aiming to provide customers with high quality and high value solutions, help customers solve
business problems, improve customer satisfaction, and make contributions to the development of the
transportation industry.
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8.4 Smart Security Check
Adhering to the mission of "Offer the world more peace, enjoy life with more assurance", Huajian
Technology, a subsidiary of Dahua, is dedicated to the research and development of innovative
solutions in the field of security check, commercial supermarket anti-theft and industrial testing with
artificial intelligence, big data, and IoT technology as the core. With the rapid development of
technologies such as artificial intelligence, big data and IoT, these technologies have been deeply and
innovatively integrated with the security check industry, and global users are in need of reliable,
convenient and advanced smart security check equipment and services, making security check
intelligence usher in a new round of development opportunities. With IoT technology and AI analysis
technology as the core, Huajian Technology promotes the reform and development of the security
check industry, bringing new business opportunities and new vitality to the industry.
1. Products of security-check machine
In terms of products of security-check machine, Huajian Technology takes its own research and
development capability as the industry foothold, and continues to explore and innovate in the fields
including intelligent view, substance identification, civil aviation standards and other security products
and technical standards representing the top level of the industry. Huajian Technology independently
developed a new generation of image algorithm engine "Qingkong", which greatly improves the
precision and hierarchy of the imaging picture of the security-check machine, and optimizes the
working environment of manual and machine judgment under the premise of ensuring the localization
of components. At the same time, leveraging the advantages of AI deep learning training, security-
check machines of Huajian Technology can not only accurately identify organic matters, inorganic
matters, and compounds, but also can effectively identify certain kinds of explosive prohibited
substances of high risk, breaking the barriers of foreign security-check machine brands towards such
technology.
2. Products of security-check door
Huajian Technology has considerable technical accumulation and project experience in the field
of security-check door technology. In the process of independent research, it is found that prohibited
articles such as mobile phones and knives can be accurately identified through high-precision
magnetic field combined with AI deep learning. Such technology fit perfectly with the major demand of
"strict control of examination room order, recommend the use of intelligent security-check door".
While improving the inspection speed and accuracy of examination room, the intelligent security-
check door of Huajian Technology can summarize the information of examination room inspection
and report it to the central management platform to generate big data of examination room
supervision. In addition, in the field of fine metal identification, Huajian Technology was the first to
introduce the acceptance standard of half a paper clip to the market, which has been widely
recognized by customers.
Huajian Technology attaches great importance to the value and innovation of product solutions in
practical application scenarios. It has launched products and solutions with distinct industry attributes
for rail transportation, justice, hospital, education and other industries, enabling its products to
maintain the high standard, multi-level competitiveness. In the future, Huajian Technology will
continue to implement the strategic policy of taking market demands as the guide and R&D as the
core productivity, and move towards the high-end security check market. The core components of
security check, THz millimeter wave, CT security check equipment and civil aviation security check
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equipment will be the main R&D investment orientations in the future. Huajian Technology shall make
full use of its own technical advantages and characteristics to create a new generation of high-value
security check equipment with unique characteristics.
8.5 Smart Fire Protection
Huaxiao Technology is an advanced fire protection product and solution provider. Based on the
core technologies of IoT, big data, cloud computing and video AI, it is continuously committed to
providing advanced full-field fire protection products and solutions for the fire safety of individuals,
enterprises and government customers worldwide, so as to achieve early warning, early prevention
and control, and early treatment of fire and other disasters, and improve the overall fire safety of
society.
1. Fire protection products
Focusing on the development of the firefighting industry, the Company has always been adhering
to the philosophy of developing market with technological innovation. On the basis of continuously
enriching the product lines of intelligent firefighting, safe use of electricity, integrated AI for security
and firefighting, and firefighting equipment, the Company further independently developed industrial
firefighting products and full series of traditional firefighting products in 2022, providing customers
with a complete line-up of fire safety products from traditional firefighting, intelligent firefighting to
industrial firefighting. In 2022, the Company started to expand overseas markets by releasing a
number of overseas certified products, gradually gaining recognition for its brand in overseas markets.
2. Solutions
After years of development and market accumulation in intelligent firefighting, the Company has
proposed the development strategy of digital intelligence firefighting based on the transformation from
the physical firefighting world to the digital world. Through the infrastructure construction of intelligent
awareness front-end, big data analysis and calculation platforms, and intelligent business control
platforms, Dahua integrates and connects horizontal and vertical business systems, and digs deeper
into the value of data to build the integrated solution of Dahua Digital Intelligence Firefighting V1.0
with the firefighting brain as the core.
Around the four business sectors of governments, enterprises, households and firefighting
services, the Digital Intelligence Firefighting V1.0 integrates the eight kinds of system products,
namely, general firefighting, intelligent firefighting, industrial firefighting, security-firefighting
intelligence, safe use of electricity, digital intelligence platform, firefighting equipment and cooperative
ecology, to provide customers with information-based capabilities of IoT, computing, decision-making
and sharing, thus realizing more comprehensive, efficient and intelligent fire safety management.
For governments, the Company refines various digital application scenarios, and digs deeper into
the value of data, so as to continuously strengthen firefighting business applications. From fire hazard
awareness to closed-loop primary governance, from the implementation of primary units'
responsibility to the assessment of supervisory work at each level, from single-department
management to co-construction, co-management and sharing across multiple departments, from
massive data aggregation to fire work index research, from simple data warning and notification to
multi-video linkage, map linkage and rescue linkage, our solutions focus on solving practical
management difficulties and pain points of fire departments, so as to truly enhance their fire risk
prevention capability and management efficiency. With the construction idea of unified planning at the
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municipal level, piloting in districts, counties, towns and sub-districts, and full-scale deployment, we
aim to seize the golden opportunities arising from the digital reform of governments and integrate
intelligent firefighting into the construction of smart cities.
For enterprises, the Company exerts its technical advantages in integrated safety and firefighting
products, and focuses on the target of securing fire safety for their production. By integrating building
fire prevention, risk source control, firefighting training and practice, and firefighting management
systems with the intelligent early warning platform, the Company creates a two-tier structure
consisting of integrated independent management of safety and firefighting at the lower level and
remote online supervision at the upper level, making firefighting management data more visible and
comprehensive, and transforming single corporate fire safety to comprehensive management.
For fire services and households, the Company focuses on the fire safety management and third-
party operation service needs of towns and sub-districts. It enriches the access to front-end products
such as traditional fire alarms, safe use of electricity, visualized smoke sensors, industrial gas, and
charging piles, and improves the functions of hidden danger inspection and maintenance of the visual
fire cloud platform, so as to realize one-stop services for intelligent firefighting equipment access
management, operation guard, maintenance and self-management.
8.6 Smart Storage
Huayixin Technology, Dahua's subsidiary, is an innovative high-tech company specializing in the
R&D, production and sales of storage products, including solid state drives (SSD), memory cards, U-
disks, mobile SSDs, memory sticks, and embedded storage products to meet the needs of consumer-
grade, surveillance-grade, industrial-grade, and enterprise-grade application scenarios.
With the industrial development and upgrading and the strategic path of focusing on independent
R&D in the industry, the Company made significant breakthroughs in storage product R&D and
technological innovation in 2022. We have released heavyweight products in all product lines of SSD,
memory cards, memory sticks, U-disks, PSSDs, and embedded storage, especially in the core SSD
product line, with a full range of industry-grade SSD products.
The Company focused on the R&D of new SSD products throughout the year. In the in-vehicle
video surveillance industry, a new generation of S820 series in-vehicle video surveillance SSD
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products with domestic main controllers and domestic particles were launched, specifically designed
for in-vehicle video surveillance scenarios with frequent vibrations. For industry scenarios similar to
industrial control units, the first generation of the I800 series SSDs for the SATA industry with
domestic main controllers and particles were launched, supporting M.2, mSATA, and 2.5-inch product
forms, PLP dual power-down protection, and commercial-grade wide work temperature from -20 to
85℃, thus satisfying the storage demand for multiple industries. In the IT application innovation
industry, the E920 and E800 series of full-capacity IT SSDs were launched, accredited by FeiTeng,
Loongson, UnionTeck UOS, and Kirin OS, among other related certifications. As for consumer
products, a new generation of C970 series cost-effective NVMe SSDs were launched, supporting
PCIe Gen4.0x4 with high read speeds of up to 50,000 MB/s and sequential write speeds of up to
4,700 MB/s, delivering brand new speed experiences. Another consumer product launched was the
first generation of QLC SATA SSD products with domestic QLC particles and ultra-high cost
performance, gaining much recognition from the industry and the market.
For the memory card product line, a new generation of W100 series of surveillance-grade wide
temperature memory cards were launched, featuring a new domestic 128L NAND FLash, with high
cost performance. They support a wide working temperature of -25 - 85℃ with high durability, and are
fully compatible with Dahua's mainstream security surveillance equipment such as security
surveillance cameras, body-worn cameras, and dome cameras. In addition, the H100 series in the
form SD card, suitable for the in car surveillance scenarios, was launched, also catering to working
scenarios with high durability and wide temperature ranges. For the consumer market, the C100 SD
memory cards for DSLR camera storage were launched to meet the 4K HD storage needs of various
DSLR cameras.
For the memory product line, the X4000 series of DDR4 RGB products for the Gaming market
were launched, featuring Samsung B-die particles, supporting 3600 Mhz and XMP2.0, thus
completing the high-end DDR product line. For general consumers, the C600 series of DDR4 RGB
memory sticks were launched, with the capacity up to 32 GB. For the IT application innovation market,
the E500 series of DDR4 memory sticks were launched, and IT certified.
For the U-disk product line, a variety of mainstream USB2.0/3.0 direct plug U-disks, and high-
speed solid-state U-disks were successively released. The solid-state U-disk S806/S809 series,
featuring domestic QLC particles, supports 512 GB large capacity, and Type-A and Type-C dual
interfaces.
For the PSSD product line, the consumer-grade T70 series of 2 TB high-capacity SATA PSSDs
and the T80 series of NVMe PSSDs for high-speed storage scenarios were launched to meet the
storage needs of different users.
Huayixin Technology vigorously strengthens the construction of its marketing network. While
steadily developing the channel market, it actively expands the industry market, with outstanding
performance in such industries as automotive, industrial automation, security surveillance, cloud
storage, cloud computing and healthcare. Meanwhile, it has established a marketing network
centering on Hangzhou and radiating to various countries and regions in China and abroad, with
products exported to more than 100 countries and regions worldwide.
With the vision of being a "pioneer in secure storage", Huayixin is committed to providing storage
solutions with high quality, serving as the storage base of AloT development. With its global partners,
Huayixin is building an industrial ecosystem and embracing the smart upgrade of solutions Made in
China, to grow together with technologies, industries and users.
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8.7 Thermal Imaging
Our subsidiary Pixfra Technology takes thermal imaging as its core technology and provides
movements, modules, complete products, vision products and complete solutions worldwide. The
Company focuses on the design, R&D, production, sales and technical services of thermal imaging
pan-security equipment, industrial temperature measurement and business vision products. Its
products and solutions are widely used in numerous fields such as industrial temperature
measurement, biological temperature measurement, natural ecology, new energy, carbon neutrality,
perimeter security, outdoor sports, smart elderly care, and consumer electronics. The Company is
dedicated to sensing the world with temperature, by developing cutting-edge thermal imaging
products and solutions to serve customers worldwide.
The main products of Pixfra Technology include pan-security products, industrial temperature
measurement products, business vision products, and industrial applications and solutions built on
these main products.
1. Pan-security products
Pixfra Technology has launched a series of pan-security thermal imaging products, including
gun-shape cameras, PTZs, rotating cameras, and cooled thermal imaging. Thermal imaging cameras
are characterized by temperature monitoring, all-weather monitoring, night vision without light, high
resistance to concealment, and good weather resistance. They are widely used in park perimeters,
indoor fire prevention, robot inspection integration, forest fire prevention, fishing prohibitions, and
natural ecological protection scenarios to realize applications such as human/vehicle intrusion
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identification, indoor fire warning, straw burning prohibition, and illegal fishing supervision, which
greatly boosts the supervision efficiency and intelligence of enterprises and governments.
2. Industrial temperature measurement products
Industrial temperature measurement products are in forms of pocket cameras, gun-shaped
cameras, PTZs, dome cameras, and hand-held thermometers to measure regular temperature
ranges or ultra-high temperature ranges, featuring diverse product forms, high temperature
measurement accuracy, and wide temperature measurement ranges. They can be widely used in
scenarios such as power distribution cabinets, machine rooms, power plants, substations and steel
enterprises, providing customers with real-time temperature detection and temperature abnormality
analysis and alarm, effectively improving the supervision efficiency of enterprises and detecting
abnormalities timely for handling.
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3. Commercial vision products
Based on the thermal imaging products featuring night vision without light, Pixfra Technology has
developed a variety of thermal imaging telescope products. These products can enable observation
of targets such as animals at night, which can be used for outdoor adventure, parent-child
entertainment, park security, field search and rescue, and law enforcement and patrol to achieve
rapid target observation and positioning. Meanwhile, the series of digital movement and network
movement products have been launched for third-party integration customers to integrate them in
their complete products.
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4. Industrial applications and solutions
Pixfra Technology provides industrial application solutions for different segments, including forest
fire prevention solutions, fishing prohibition solutions, urban three-dimensional prevention and control
solutions, substation temperature monitoring and inspection solutions, gas leak detection solutions,
cultural, historical and cultural construction solutions, charging pile temperature and fire prevention
solutions, fire monitoring solutions for high-rise buildings, fire prevention solutions for warehouses,
homeland security monitoring, and new energy security monitoring.
9. Develop Green Environmental Protection and Low-carbon Business
Dahua always adheres to the responsibility of protecting the environment and practicing green
development. During the reporting period, the Company actively carried out innovative green design
for products, reduced product energy consumption and promoted green expansion and business
upgrading in the global market through clean technologies.
In terms of software, the Company has built the Dahua Cloud Platform, which integrates cloud
computing, big data and data center, with the goal of making the cloud "green" and "carbon neutral".
The consolidation of servers restricts the growth of the number of servers and reduces the purchase
of equipment. The unified cloud platform also greatly simplifies operation and maintenance, and
improves the efficiency by 488 times compared with the deployment of distributed systems with
physical servers.
After the establishment, the Dahua Cloud Platform reduced carbon emissions by a total of 47.5%
in 2022, with the biggest reductions coming from the reduced power consumption of servers. The
Company delved into the field of cloud service innovation and leveraged cloud computing
technologies to empower carbon neutrality. The Dahua Cloud Platform sustained a stable PUE below
1.36 in 2022, with significant improvement in energy efficiency.
The improved accessibility of the Dahua IoT platform further boosts the cost reduction and
efficiency improvement of enterprises. By reconstructing and optimizing the key modules of PaaS
services, it increases the single-node device access of platform products by 50%, reduces system
memory and process resource consumption by 20%, enhances the development efficiency of new
device access by 30%, and further cuts the cost of basic IoT.
In terms of hardware, the Company has designed an integrated solar power supply system.
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Without power from the grid, it can provide stable and reliable power supply for the equipment to
meet most scenarios of power tower installation, with higher stability, longer cycle life of over 2000
times (100% DOD), and low-temperature automatic heating function to ensure stable operation of the
system at temperatures of -20℃ - 60℃.
In addition, the low-power battery camera products designed by the Company are energy-
efficient in three major ways. Firstly, only ultra-low power sensors are in the working state while
battery cameras are in the standby mode, and all the sensors are activated for recording only when a
person is detected passing by. Secondly, ultra-low-power parts and components such as sensors,
pocket cameras and power supply chips are selected to ensure that devices consume the minimum
power in both the standby state and the full activation state. Thirdly, all the unnecessary fill light is
disabled when the camera is in the standby mode to avoid ambient light pollution. Through the above
energy-saving clean design, an ordinary lithium battery can support the battery camera for more than
half a year, thus reducing lithium battery loss.
III. Core Competitiveness Analysis
As the Company continues to deepen its services for the digital transformation of cities and
enterprises, users' needs become more diversified and fragmented. While meeting market demands
with such characteristics, the Company continues to iterate and optimize itself along the whole chain
of R&D, marketing, supply chain and delivery services, so as to build up its unique competitiveness in
the face of the diversified and fragmented smart IoT market.
1. Invest in R&D and Innovation by Adhering to the Core Concept of "Full Sensing, Full
Connection, Full Intelligence, Full Computing, and Full Ecosystem" and Striving to Meet Client
Demand
Technologies such as AI, big data and 5G have accelerated the integration of the video and IoT
industry, enabling machines to sense, understand and think about everything in the world like human
beings, which is the symbol of the smart IoT era. The development of technologies has been
constantly enriching and advancing the dimensions of data, thus propelling smart IoT to enter the
next stage of development. At present, as smart IoT has entered numerous industries, the
development of various business areas has put forward higher requirements for data. Driven by data
upgrading, clients need to sense more dimensions, make more diverse connections, process data
faster, and interact more efficiently.
Dahua has the first-mover advantage in vision AI based on the Vision Transformer model, and
the accumulated experience in industry application and algorithm development, leading the industry
in scenario application and industrialization. The Company will iterate and upgrade in the direction of
foundation vision models, develop industry-leading vision pre-training foundation models based on
industry experience, and realize the productization of algorithms based on such models, so that the
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Company's intelligent SKUs can be reduced and the penetration of intelligent products can be
increased to meet the needs of more digital intelligence scenarios. Meanwhile, the Company will
continue to iterate and optimize the performance of foundation models, making its first-mover
advantage main competitiveness.
Dahua always invests in R&D and innovation, with customer needs as the guide and the
effectiveness of products and solutions for customers as the criterion. It continues to enhance the
independent innovation and leadership in core key technologies and consolidate its foundation of
digital intelligence. After years of accumulation, the technical capabilities of the Company in AI, AIoT,
big data, software and other aspects have become more mature. In the face of this fragmented
market, the Company has the capability of developing a complete set of solutions and the
corresponding organization and management capabilities to solve clients' problems in specific
scenarios.
2. Continue to Optimize the Global Marketing Network and Expand Client Coverage
The Company has a global marketing and service network. By the end of 2022, the Company
had established 32 provincial offices in China. Dahua steps up its effort at the marketing end to
increase client coverage and continues to provide service for small and medium-sized enterprises in
low-level administrative divisions, to build a win-win ecosystem. It continuously cover more industry
clients, and customers previously left behind have been reached. At the same time, the Company
focuses on building multidimensional eco-partners and comprehensive altruistic service platforms to
boost the sustainable innovation and development of our partners.
The Company has an extensive and in-depth distribution network overseas, laying a solid
foundation for the stable growth of its basic businesses, while continuously expanding its brand
influence. Meanwhile, it offers solutions and services to overseas medium- and high-end urban clients
and industry clients. Relying on its strong technical strength, localized sales networks, and globalized
logistics and after-sales service systems, the Company continues to broaden its business
opportunities, strengthen the adaptation of its solutions to local markets, and gradually increase the
share of solution revenues in its overseas market. By continuing to cultivate international business
development and management teams and enhancing local business development and organizational
operation capabilities, the Company is further expanding into international markets.
3. Promote Intelligent Manufacturing and Optimize the Supply Ecosystem and Supply
Layout by Taking Supply Security as the Core
In the face of the complicated and ever-changing business environment such as intense
geopolitical conflicts, trade competition and technological changes, as well as the increased
uncertainty of customer demand in the digital era, supply chain resilience and sustainability have
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emerged as one of the core competitiveness factors of enterprises.
The Company continues to strengthen the ability of safe material supplies. First, we have
reduced risk materials from the source of product development. Then, we have optimized supply
chain management to reduce material supply risks, such as minimizing exclusive supplies while
diversifying supplier sources, strategically increasing the proportion of leading suppliers across
sectors, expanding supply chain security management strategies to the core upstream of key
suppliers, improving overseas supplier management systems to enhance local raw material
procurement capabilities overseas, dynamic management strategy and risk material inventory
strategies, and applying supply security platforms for closed-loop management, all of which aim to
strengthen the reliability of material supplies.
The Company continues to enhance the flexible product manufacturing and delivery capability. In
2022, a new manufacturing base was established in Changsha to realize the coordination between
the Hangzhou manufacturing headquarters and the Changsha base, thus enhancing the delivery
capability in Chinese market. Meanwhile, production automation equipment and management
information systems were introduced into the overseas manufacturing center, a new sub-HUB was
set in the European supply center, and standardized warehousing systems were installed in the
overseas sub-warehouses to further enhance the compliance and efficiency of localized
manufacturing and warehousing logistics operations overseas.
The Company continues to enhance its risk pre-management capabilities. It has established a
risk assessment system, with regular end-to-end reviews of internal and external RPN risk values for
the business. It has also established a library of multiple risk plans for various fields to respond and
react to possible risk events in a timely manner and minimize their impacts on the supply chain.
In the context of supply chain digitization and globalization, the Company continuously improves
its supply efficiency and guarantees supply sustainability by building an integrated digital platform
from demand forecasting to supply delivery, accommodating multiple bases, multiple logistics centers
and multiple new business models.
4. Improve Delivery and Service Capabilities to Shape Great Client Experience
With the customer-oriented core value concept, Dahua has been gradually building four service
systems covering the whole market and the full business, namely the integrated delivery system,
technical support system, operation and maintenance management system, and training and
certification system; meanwhile, by integrating its corporate resources and pooling the power of the
ecosystem, Dahua provides full life-cycle services of products and solutions to the market to
accelerate customers' responses and improve their efficiency. Our vision is to build a world-class
efficient and professional delivery platform and become a superb service value creator.
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Under the guidance of its global business strategy, Dahua makes use of the layout and ability of
its global delivery and service centers to provide clients with precise and intelligent services and
solutions. The headquarters, subsidiaries, and authorized service centers have formed a
multidimensional service network to offer high-quality services to our global customers, improving the
service experience and customer perception and continuously enhancing the overall service
satisfaction. Dahua has formed a three-tier service network to provide technical services to customers
worldwide, with 51 branches worldwide and a service network covering 180 countries. It has 9 spare
parts distribution centers and 173 spare parts stations (46 spare parts stations in China), with 4000+
project managers and technical service personnel, and over 1000 service partners, offering efficient
service support for customers and markets and continuously delivering supreme service experience.
With the increasing penetration of smart IoT into all walks of life and business and the ever more
complex deliveries, in order to meet the growing demand for software customization, Dahua has set
up software support centers in major provincial areas in China to help with software R&D in the
provinces and surrounding areas, and flexibly and quickly meet the customization needs of clients, so
as to build service competitiveness and improve client satisfaction with its efficient delivery.
5. Adhere to the Full Ecosystem Strategy and Build a Smart IoT Ecosystem Community
featuring Co-construction, Win-win Outcome and Symbiosis
The Company upgraded the full ecosystem in 2022. With the core of eco-cooperation for value
creation, we have optimized the ecological development strategy, scenario-based innovation, and
industrial digital intelligence upgrade. In the trillion yuan-worth smart IoT industry, Dahua has adhered
to the concept of openness and win-win cooperation, and worked with its eco-partners to build the
full-scenario closed-loop capability, so as to empower the digital and intelligent upgrade in numerous
industries. We are committed to realizing the full opening up in aspects from hardware, software and
algorithms to services and business ecosystems. We have enabled open connectivity of equipment
through DHOP, developed diverse components based on the foundation of the IoT digital intelligence
platform to open up the capability from PaaS to SaaS, and provided one-stop algorithm training
services on Jinn Artificial Intelligence Open Platform. For service partners and business partners, we
have insisted on the business philosophy of "delivering convenience to partners while solving
complexity by ourselves", to optimize the corresponding marketing policies, resource support and
organization, so as to build a benign sharing and win-win ecosystem, realize the industrial vision of
"connect all things with cloud, and create a future with digital intelligence".
6. Strengthen Compliance and Create a Fair and Clean Cooperation Environment
In the context of business globalization, Dahua attaches great importance to business operation
compliance, with continuous optimization of corporate governance and internal management. It
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further advances the improvement of its ethical governance system for science and technology,
enhances its ethical governance capacity, improves data security and privacy protection, strengthens
the management of the product quality system, and further improves the compliance system that
follows the export control and economic sanction regulations of major economies around the world.
We explicitly prohibit fair trade violations and advocate our position on compliant competition. Dahua
has always maintained a sound management strategy and managed compliance risks by adopting
the approach of "one country, one policy". Meanwhile, the Company is committed to strict business
code of conduct and ethical rules, and adheres to the principle of “honesty for success”, aiming at
building a transparent, fair, equal, honest and trustworthy business cooperation environment for its
employees, suppliers and clients.
7. Adhere to the "Client-oriented, Employee-based" Principle to Create the Dahua Model of
Common Prosperity
Dahua always adheres to the core "Client-oriented, Employee-based" principle. Through
developing the client-oriented business process and organization, the Company deepens its
organizational ability and promotes business in low-level administrative divisions; meanwhile, by
advocating the high-performance culture, it encourages hard work for rewards, and continues to
promote the Employee Development Community Plan to actively create value for employees.
Dahua has embarked on a new journey of common prosperity. By promoting the construction of
an ecosystem for the common development of employees, it has made continuous efforts in career
development, income growth, welfare and work condition improvement, and social responsibility
practice of all employees, and continuously improved the material and spiritual prosperity of them. It
is hoped that through five years of efforts, the Company will build a platform for common development
and create the Dahua model of common prosperity.
IV. Main Business Analysis
1. Overview
The Plan for the Overall Layout of Building a Digital China states that it is necessary to fully
empower economic and social development, strengthen and expand the digital economy, and
promote the deep integration of digital technologies with the real economy. In the digitalization
process, rapidly increasing AI applications have further expanded the market space for video-based
intelligent IoT. Thus digital intelligence business systems based on video applications show
increasingly higher value. At present, the overall intelligent transformation and upgrading of industries
is still at an early stage, featuring both opportunities and challenges in the face of digital intelligence
development demands from thousands of industries. It has become a general consensus for
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governments and enterprises to achieve high-quality development through digital intelligence
transformation, and there are also strong demands from industries for digital intelligence
transformation. However, such demands are fragmented and differentiated among different industries
or even within industries. The current challenge is how to reduce costs, quickly meet the fragmented
and differentiated market demands in a controlled way, and enhance the economies of scale.
With the expansion of the market room, the continuous emergence of new demands and the
acceleration of new technology upgrading and iteration, the economies of scale for the transformation
and upgrading of digital intelligence are bound to be achieved through a continuously penetrating
process. We will maintain sufficient strategic concentration and investment, with great emphasis on
the accumulation and investment in R&D innovation and the exploration of cutting-edge technologies.
For one thing, we will continue to develop in-depth industrial solutions, to stay on top in key
capabilities such as AIoT awareness, IoT digital intelligence platforms and scenario-based AI, thus
strengthen our competitiveness; for another, we will keep strengthening our marketing and delivery
service organization, and continue to expand the scope of ecological cooperation with our customers,
so that they can enjoy comprehensive service experience. In addition, we will continuously deepen
and broaden the transformation and upgrading business of industrial digital intelligence, to satisfy and
cultivate customers' business scenario habits, enhance their business adhesion, strengthen our
overall competitiveness, and consolidate our stronghold in the industry to maintain our leading
position.
During the reporting period, the Company adhered to the business philosophy of fine
management and high-quality development despite the impact of numerous factors at home and
abroad, achieving an operating revenue of RMB 30.565 billion, with a decrease of 6.91% on a year-
on-year basis. It realized a net profit attributable to shareholders of the listed company amounting to
RMB 2.324 billion after deducting non-recurring gains and losses, with a decrease of 31.20% on a
year-on-year basis.
Continue to precisely invest in R&D and further strengthen the capabilities of "Full
Sensing, Full Connection, Full Intelligence, Full Computing, and Full Ecosystem". The
Company has taken technological innovation as the core and invested heavily in R&D. In 2022, the
Company invested RMB 3.883 billion in R&D, with an increase of 12.49% on a year-to-year basis,
accounting for 12.70% of the operating revenue. Apart from maintaining the investments in traditional
video technologies, the Company has constantly enhanced R&D and product launch in such technical
fields as multidimensional awareness, AI, cloud computing and big data, software platforms, machine
vision and robots, 5G, and cyber security, to further improve the capabilities of "full sensing, full
connection, full intelligence, full computing, and full ecosystem". With the focus on valuable business
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scenarios, we have worked to construct industry-leading solutions, products and technical systems.
Product quality has been further improved, and scenario-based industry-specific solutions gain
deeper understanding of the industries and have wider coverage.
Insist on altruistic thinking and strengthen the ecosystem to fully support high-quality
business development. Faced with unprecedented opportunities from the development of digital
economy, we will continue to explore and work with our eco-partners to build a comprehensive
altruistic service platform integrating technologies, products, solutions, operations, services, and
business management consultation, so as to facilitate the continuous innovation and development of
our partners. In China, we have accelerated front-line business response through city-based business
deployment, capacity deployment in forms of training empowerment and special support, hierarchical
management, business authority delegation, and management decision delegation. Overseas
distribution deployment has focused on customer grading, precise investment and marketing, and
brand coverage strengthening. Integrators deployment has focused on key markets and customers,
while reinforcing the deployment support system.
Upgrade the operating capability of software and build a sensitive service organization.
The Company has upgraded and maintained the organization of product R&D and front-line services
in an all-round way. Through the cooperation of multiple departments, the Company has realized a
virtuous circle of business insight, product R&D, scheme replication and continuous optimization. The
Company has placed R&D organizations at the front line. By the end of 2022, the construction of 6
provincial development centers had been completed, with highly efficient resource sharing, exploring
new business opportunities to create new value with clients while boosting the digital intelligent
transformation of the entire industry. The middle platform organization has carried out intelligent
scheduling and combination of central platform capabilities in different business areas and formulated
strategic and tactical plans. Through the upgrade of organizational capability, the Company has
rapidly improved the capability to quickly meet clients' demands for software, making the overall
coordination more accurate and efficient, and the business more smooth.
Promote the development of innovative business and build a smart IoT ecosystem
community. Based on the in-depth understanding of diversified demands of clients, the Company
has continued to develop innovated businesses, including related business in the field of industrial
Internet, smart household, smart firefighting, smart storage, automotive electronics, and smart
security inspection, so as to fully stimulate the vitality of talents and continuously expand new high-
speed growth points for the Company. At the same time, the Company has given full play to the
advantages of its platforms, and cooperated with partners in multiple dimensions, such as hardware,
software, algorithms, services and business, to create a smart IoT ecosystem community featuring
94
co-construction, win-win outcome and symbiosis, so as to jointly create greater value for clients.
2. Revenue and Costs
(1) Operating revenue structure
Unit: RMB
2022 2021
Year-on-year
Proportion in Proportion in increase or
Amount Operating Amount Operating decrease
Revenue Revenue
Total Revenue 30,565,370,012.64 100% 32,835,479,336.85 100% -6.91%
By Industry
Smart IoT
30,565,370,012.64 100.00% 32,835,479,336.85 100.00% -6.91%
Industry
By Product
Smart IoT
Products and 25,187,418,289.20 82.40% 28,040,635,027.05 85.40% -10.18%
Solutions
Including:
Software 1,478,048,030.19 4.84% 1,600,941,024.00 4.88% -7.68%
Business
Innovative
4,116,225,405.96 13.47% 2,847,600,678.83 8.67% 44.55%
Business (Note)
Others 1,261,726,317.48 4.13% 1,947,243,630.97 5.93% -35.20%
By Region
Domestic 15,799,558,052.51 51.69% 19,346,695,166.19 58.92% -18.33%
Overseas 14,765,811,960.13 48.31% 13,488,784,170.66 41.08% 9.47%
Domestic Sub-business Segment
2022 2021 Year-on-
Proportion in Proportion in year
Amount Domestic Operating Amount Domestic Operating increase or
Revenue Revenue decrease
To G 4,325,525,354.94 27.38% 5,851,992,165.62 30.25% -26.08%
To B 8,267,364,222.98 52.32% 8,622,417,208.13 44.57% -4.12%
Others 3,206,668,474.59 20.30% 4,872,285,792.44 25.18% -34.19%
Total 15,799,558,052.51 100.00% 19,346,695,166.19 100.00% -18.33%
Note: Innovative business mainly includes machine vision and mobile robots, smart living, automotive electronics,
smart security inspection, smart fire control, smart storage, thermal imaging, and other relevant businesses; the
innovative businesses in 2021 do not include thermal imaging business; the same as below.
(2) Industry, product, or region accounting for more than 10% of the Company's operating revenue or profit
Applicable □ Not applicable
Unit: RMB
Increase or Increase and Increase or
Gross decrease of decrease of decrease of
Operating revenue Operating Cost
margin operating operating cost gross profit
revenue over the same compared with
95
compared with period of last the same
the same year period of last
period of last year
year
By Industry
Smart IoT
30,565,370,012.64 18,989,797,670.92 37.87% -6.91% -5.33% -1.04%
Industry
By Product
Smart IoT
Products
25,187,418,289.20 15,106,909,590.16 40.02% -10.18% -8.05% -1.39%
and
Solutions
Including:
Software 1,478,048,030.19 457,050,171.52 69.08% -7.68% -12.44% 1.68%
Business
Innovated 44.55% 42.27% 1.07%
4,116,225,405.96 2,759,497,499.20 32.96%
Business
By Region
Domestic 15,799,558,052.51 10,555,743,715.88 33.19% -18.33% -13.01% -4.09%
Overseas 14,765,811,960.13 8,434,053,955.04 42.88% 9.47% 6.43% 1.63%
Domestic
Sub-
business
Segment
To G 4,325,525,354.94 2,630,397,451.54 39.19% -26.08% -22.83% -2.56%
To B 8,267,364,222.98 5,253,517,092.63 36.45% -4.12% 5.16% -5.61%
Others 3,206,668,474.59 2,671,829,171.71 16.68% -34.19% -28.36% -6.77%
When the statistical caliber of the company's main business data is adjusted in the reporting period, the company's
main business data should be subject to the one after the statistical caliber at the end of the reporting period is
adjusted in the most recent year.
□ Applicable Not applicable
(3) Is the company's physical sales income greater than the labor income?
Yes □ No
Year-on-year
Industry
Item Unit 2022 2021 increase or
Classification
decrease
Sales volume Unit/set 78,831,492 81,323,449 -3.06%
Smart IoT Production
Unit/set 78,017,213 86,427,557 -9.73%
Industry output
Stock Unit/set 13,068,772 13,883,051 -5.87%
Reasons for over 30% changes in related data on year-on-year basis
□ Applicable Not applicable
(4) Performance of major sales contracts and major procurement contracts signed by the Company as of the
report period
□ Applicable Not applicable
96
(5) Operating Cost Structure
Industry Classification
Unit: RMB
2022 2021
Year-on-year
Industry Proportion to Proportion to
Item increase or
Classification Amount Operating Amount Operating decrease
Cost Cost
Smart IoT Operating
18,989,797,670.92 100.00% 20,058,513,158.33 100.00% -5.33%
Industry Cost
Product Classification
Unit: RMB
2022 2021 Year-on-
Product Proportion to Proportion to year
Item
Classification Amount Operating Amount Operating increase or
Cost Cost decrease
Smart IoT
Operating
Products and 15,106,909,590.16 79.55% 16,429,520,447.87 81.91% -8.05%
Cost
Solutions
Including:
Operating
Software 457,050,171.52 2.41% 521,983,098.73 2.60% -12.44%
Cost
Business
Innovated Operating 2,759,497,499.20 14.53% 42.27%
1,939,617,607.05 9.67%
Business Cost
Operating 1,123,390,581.56 5.92% -33.50%
Others 1,689,375,103.41 8.42%
Cost
(6) Has the scope of consolidation changed during the reporting period?
Yes □ No
1) The Company invested to establish 10 domestic subsidiaries including Zhejiang Pixfra Technology Co., Ltd.,
Yiwu Huaxi Technology Co., Ltd., Zhejiang Dahua Intelligent IOT Operation Service Co., Ltd., Nanyang Dahua
Intelligent Information Technology Co., Ltd., Yibin Huahui Information Technology Co., Ltd., Chengdu Huazhiwei
Technology Co., Ltd., Xi'an IMOU Zhilian Technology Co., Ltd., Luoyang Dahua Zhiyu Information Technology Co., Ltd.,
Zhejiang Huaqi Intelligent Technology Co., Ltd. and Chengdu Dahua Wisdom Information Technology Co., Ltd., and 5
overseas subsidiaries including Dahua Technology Middle East for Maintenance Single Person Company, Dahua
Technology Bangladesh Private Limited, IMOU NETWORK TECHNOLOGY AUSTRALIA PTY LTD, and CNG TY
TNHH CNG NGH IMOU NETWORK VIT NAM and HUARAY TECHNOLOGY SINGAPORE PTE. LTD. The above
subsidiaries have been incorporated into the scope of consolidation since the date of establishment.
2) In this period, the Company transferred 90% of the equity of Sichuan Dahua Guangxun Photoelectric
Technology Co., Ltd.it previously held. The shareholding decreased from 100% to 10% after such transfer. It no longer
has control over the company, and therefore it was not included in the scope of consolidation any more since the date
of transfer.
3) In this period, the Company transferred 29.56% of the equity of Zhejiang Huachuang Vision Technology Co.,
Ltd.it held. The shareholding decreased from 51% to 21.44% after such transfer. It no longer has control over the
company, and therefore it was not included in the scope of consolidation any more since the date of transfer.
97
4) The Company transferred 100% equities of Lorex Technology Inc., Lorex Corporation and Lorex Technology UK
Limited held by it during the current period. The said companies shall not be included in the consolidated statements
as of the date of transfer.
(7) Major changes or adjustments to the company's business, products, or services during the reporting
period
□ Applicable Not applicable
(8) Major Clients and Suppliers
The Company's Major Clients
Total sales amount of the top five customers 3,387,448,948.76
Proportion of the total sales amount of the top five
11.09%
customers to the total annual sales
Proportion of the total sales amount of the related parties
4.15%
in the top five customers to the total annual sales
Profiles of the Company's top five customers
Proportion to the annual
No. Name of customer Sales amount (yuan)
sales
1 Company 1 1,379,341,673.42 4.51%
2 Company 2 (related party) 885,573,057.86 2.90%
3 Company 3 397,077,803.57 1.30%
4 Company 4 (related party) 380,766,424.13 1.25%
5 Company 5 344,689,989.78 1.13%
Total -- 3,387,448,948.76 11.09%
Other Information Notes for Major Clients
□ Applicable Not applicable
Major suppliers
Total Purchase Amount of Top Five Suppliers (yuan) 4,237,228,515.27
Proportion of the total purchase amount of top five
19.89%
suppliers to the total annual purchase amount
Proportion of the total purchase amount of the related
parties in top five suppliers to the total annual purchase 0.00%
amount
Profiles of the Company's top five suppliers
Proportion to the total
No. Supplier Name Purchase amount (yuan)
annual purchase amount
1 Company 1 1,798,203,642.46 8.44%
2 Company 2 739,110,544.52 3.47%
3 Company 3 599,709,505.61 2.82%
4 Company 4 550,399,905.13 2.58%
5 Company 5 549,804,917.55 2.58%
Total -- 4,237,228,515.27 19.89%
Other Information Notes for Major Suppliers
98
□ Applicable Not applicable
3. Expenses
Unit: RMB
Year-on-year Statement on
2022 2021
increase or decrease Significant Changes
Sales Expenses 5,115,163,159.61 4,663,973,834.28 9.67%
Administration
1,143,968,823.89 955,015,503.39 19.79%
expenses
Exchange earnings
increased because of
Financial Expenses -510,976,797.98 249,710,940.58 -304.63%
exchange rate
fluctuations.
Research and
development 3,883,005,582.82 3,451,978,394.17 12.49%
expense
4. R&D Investment
R&D personnel of the Company
2022 2021 Change Ratio
Number of R&D personnel 12,219 11,388 7.30%
Percentage of R&D personnel 51.80% 49.80% 2.00%
Education background of R&D personnel
Bachelor 7,900 7,349 7.50%
Master and above 3,242 3,022 7.28%
Age of R&D personnel
Under 30 7,140 6,685 6.81%
30-40 4,652 4,370 6.45%
Company's R&D investment
2022 2021 Change Ratio
R&D investment (yuan) 3,883,005,582.82 3,451,978,394.17 12.49%
The proportion of R&D
investment to operating 12.70% 10.51% 2.19%
revenue
Capitalized R&D investment 0.00 0.00 0.00%
Proportion of capitalized R&D
0.00% 0.00% 0.00%
investment to R&D investment
Causes and effects of significant changes in the composition of R&D personnel
□ Applicable Not applicable
The reason for the significant change in the proportion of the total amount of R&D investment to operating revenue
compared with last year
□ Applicable Not applicable
Reasons and rational explanations on the substantial change in capitalization rate of R&D investment
□ Applicable Not applicable
99
5. Cash Flow
Unit: RMB
Year-on-year increase
Item 2022 2021
or decrease
Subtotal of cash inflow from
36,530,473,767.40 36,210,742,547.14 0.88%
operational activities
Subtotal of cash outflow from
35,476,886,117.94 34,483,181,799.13 2.88%
operational activities
Net cash flow generated by
1,053,587,649.46 1,727,560,748.01 -39.01%
operating activities
Subtotal of cash inflow from
2,991,957,633.76 1,982,143,965.34 50.95%
investment activities
Subtotal of cash outflows from
3,591,920,704.41 3,837,021,324.81 -6.39%
investment activities
Net amount of cash flow
generated by investment -599,963,070.65 -1,854,877,359.47 67.65%
activities
Subtotal of cash inflow from
5,909,237,490.28 3,928,758,562.85 50.41%
financing activities
Subtotal of cash outflow from
6,253,025,354.87 3,434,893,674.47 82.04%
financing activities
Net cash flow generated by
-343,787,864.59 493,864,888.38 -169.61%
financing activities
Net Increase in Cash and
260,888,200.31 259,124,082.79 0.68%
Cash Equivalents
Description of the main factors affecting the significant changes in related data over the same period of last year
Applicable □ Not applicable
1. The net cash flow from operating activities decreased by 39.01% compared with the same period of previous year,
mainly due to the increase of payroll in this period compared with that of the previous year.
2. The net cash flow from investing activities increased by 67.65% year-on-year, which mainly came from the
increased net amount from transferring the subsidiaries and the increased net amount of income and expenditure from
national debt reverse repurchase in the current period.
3. The net cash flow from financing activities decreased by 169.61% year-on-year, which mainly came from decreased
net income and expenditure of bank loans in the current period.
Reasons for the significant difference between the net cash flow generated by the company's operating activities in the
reporting period and the net profit in the current year
□ Applicable Not applicable
V. Non-Main Business Analysis
□ Applicable Not applicable
100
VI. Analysis of Assets and Liabilities
1. Significant changes in assets composition
Unit: RMB
End of 2022 Early 2022 Proportion
Statement on
Proportion Proportion increase
Significant
Amount To Total Amount To Total and
Changes
Assets Assets decrease
Cash and
Bank 8,029,878,650.77 17.36% 7,731,002,784.77 17.55% -0.19% No major changes.
Balances
Accounts
15,411,908,561.50 33.32% 14,654,490,643.49 33.26% 0.06% No major changes.
receivable
Contract
106,335,405.35 0.23% 163,432,100.37 0.37% -0.14% No major changes.
Assets
Inventory 7,315,372,440.02 15.82% 6,810,041,288.82 15.46% 0.36% No major changes.
Investment
423,035,823.82 0.91% 311,065,023.43 0.71% 0.20% No major changes.
Property
Long-term
Equity 1,461,099,644.55 3.16% 1,243,872,752.91 2.82% 0.34% No major changes.
Investment
Mainly due to the
transfer of the
Projects of Smart
Fixed Assets 4,643,617,574.85 10.04% 2,187,435,714.17 4.97% 5.07% IoT Solution R & D
and
Industrialization
into fixed assets
Mainly due to the
transfer of the
Projects Projects of Smart
under 423,535,552.03 0.92% 1,992,834,055.03 4.52% -3.60% IoT Solution R & D
Construction and
Industrialization
into fixed assets
Right-of-use
314,700,977.50 0.68% 248,577,371.97 0.56% 0.12% No major changes.
Assets
Short-term
257,943,618.51 0.56% 325,648,230.98 0.74% -0.18% No major changes.
loan
This was mainly
caused by the
increase of project
Contract funds received in
1,219,548,011.88 2.64% 864,989,993.78 1.96% 0.68%
liabilities advance and
service fees
received in
advance.
This was mainly
Long-term caused by
453,825,000.00 0.98% 1,552,500,000.00 3.52% -2.54%
loan repayment for the
long-term loans.
Lease 196,340,654.27 0.42% 140,606,139.33 0.32% 0.10% No major changes.
101
Liabilities
The proportion of overseas assets is relatively high
□ Applicable Not applicable
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: RMB
Purcha
Changes in Sales
Cumulati Impairme se
At the fair value amoun
ve fair nt loss of amount At the end of
beginning of gains and t of the Other
Item value the of the the reporting
the reporting losses in reporti variations
changes reporting reportin period
period the current ng
in equity period g
period period
period
Financial Assets
1.
-
Derivative
1,132,173.53 1,132,045.1 -128.36
financial
7
assets
2. Other
non- -
945,619,965.9 3,654,377.9 931,043,130.3
current 18,231,213.
7 1 3
financial 55
assets
3.
-
Receivabl 792,709,781.5 679,441,917.6
113,267,863.
es 7 2
95
financing
4. Others 1,470,000.00 1,470,000.00
Financial - -
1,740,931,921 1,611,955,047
assets 19,363,258. 109,613,614
.07 .95
subtotal 72 .40
- -
1,740,931,921 1,611,955,047
Total 19,363,258. 109,613,614
.07 .95
72 .40
Financial 26,652,319.
26,652,319.25
liabilities 25
Are there any significant changes in the measurement attributes of the company's main assets during the reporting
period?
□ Yes No
3. Restrictions on asset rights as of the end of the reporting period
As of December 31, 2022, restricted assets of the Company are as follows:
Item Closing balance (RMB) Cause of restrictions
Cash and Bank Balances 130,637,542.35 Guarantee letter security deposit and other restricted funds
Accounts receivable 7,912,141.60 Supply chain finance not derecognized
Notes receivable and 1,156,827,692.59 Pledge used to issue bank acceptance bills and endorsed or
102
receivables financing discounted notes not derecognized
Long-term Receivables 120,632,081.66 Pledge for bank borrowings
Non-current Assets Due
within 1 Year 27,786,159.55 Pledge for bank borrowings
Total 1,443,795,617.75
VII. Investment Analysis
1. Overview
Applicable □ Not applicable
Investment in the Reporting Period Investment for the same Period of
Rate of Change
(RMB) Last Year
512,368,718.70 1,046,668,256.53 -51.05%
2. Significant equity investments acquired during the reporting period
□ Applicable Not applicable
3. Major non-equity investments underway during the reporting period
Applicable □ Not applicable
Unit: RMB
Reas
Cum
ons
ulativ
For
e
Unre
The Invol Cumulati Inco
ache
Inves ved Amount ve Actual Ca me
d Discl
tment indus Invested Investme pita Progr Antici by
Invest Plann osing Disclosing
Item in try in in the nt as of l ess of pated The
ment ed Date Index (If
Name Fixed inves Current the End So Proje Inco End
Mode Progr (If Any)
Asset tment Reportin of urc ct me Of
ess Any)
s or proje g Period Reportin e The
And
Not cts g Period Repo
Antici
rting
pated
Perio
Reve
d
nue
Phase
II
constru
ction
Sel
project Juchao
Smar f- Not
of Self- In Marc Informatio
t IoT 214,083, 1,233,16 rais appli
Smart constr Yes constr h 27, n Network
Indus 280.95 4,709.34 ed cable
Manufa uction uction 2021 http://cninf
try fun .
cturing o.com.cn/
ds
Base in
Hangzh
ou
Item
103
Constru Sel
Juchao
ction Smar f- Not
Self- In Marc Informatio
Project t IoT 276,150, 801,922, rais appli
constr Yes constr h 27, n Network
of Xi'an Indus 636.22 308.53 ed cable
uction uction 2021 http://cninf
R&D try fun .
o.com.cn/
Center ds
Project
of
Smart Sel
Juchao
IoT Smar f- Not
Self- In Marc Informatio
Solution t IoT 540,609, 1,880,35 rais appli
constr Yes constr h 27, n Network
R&D Indus 950.51 7,137.60 ed cable
uction uction 2021 http://cninf
and try fun .
o.com.cn/
Industri ds
alizatio
n
New
project
of
Sel
Southw Juchao
Smar f- Not
est Self- In Marc Informatio
t IoT 48,013,2 84,276,9 rais appli
R&D constr Yes constr h 27, n Network
Indus 23.52 52.86 ed cable
Center uction uction 2021 http://cninf
try fun .
of o.com.cn/
ds
Dahua
Co.,
Ltd.
1,078,85 3,999,72
Total -- -- -- -- -- -- -- --
7,091.20 1,108.33
4. Financial assets investment
(1). Securities investment
□ Applicable Not applicable
No such case as securities investment during the reporting period.
(2). Derivatives investment
Applicable □ Not applicable
1) Derivatives investments for hedging purposes during the reporting period
Applicable □ Not applicable
Unit: RMB ten thousand
Proportion
Changes
of
in fair
Amount Amount investment
value Cumulative
Types of Initial purchased sold during amount in
gains and fair value Closing
derivatives investment during the the the
losses in changes in balance
investment amount reporting reporting company’s
the equity
period period net assets at
current
end of the
period
reporting
104
period
Foreign exchange
-2,778.44 625,054.87 669,780.73 55,141.49 2.13%
contract
Total -2,778.44 625,054.87 669,780.73 55,141.49 2.13%
Explanation of
whether the
The Company calculated and presented its foreign exchange derivatives trading business in
Company’s
accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and
hedging business
Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 37 -
accounting policies
Presentation of Financial Instruments and other relevant provisions. Held-for-trading financial
and specific
assets/held-for-trading financial liabilities were adopted for initial and subsequent measurements
accounting
of the foreign exchange contracts. The fair values of the foreign exchange contracts were
principles have
basically determined by referencing the different parameters of the financial institutions based on
changed
the then market conditions as well as the remaining term and duration of transaction, so as to be
significantly during
recognized as the held-for-trading financial assets or held-for-trading financial liabilities. There
the reporting
was no significant change in the fair values of the foreign exchange contracts compared with that
period compared
in the previous reporting period.
with the previous
reporting period
Description of
actual profit and
The actual profit and loss amounted to RMB -18,304,600 during the reporting period.
loss during the
reporting period
The Company carried out foreign exchange hedging business appropriately as the case may be,
Descriptions of the
which could effectively reduce the risks in foreign exchange market and avoid exchange rate
effect of hedging
risks.
Sources of funds
for derivatives Equity Fund
investment
Risk analysis and
description of
control measures
for derivatives
positions during
For details of risk analysis and control measures, please refer to the "Announcement on
the reporting
Conducting Foreign Exchange Hedging Transactions" (Announcement No. 2022-026), which was
period (including
disclosed by the Company on April 23, 2022.
but not limited to
market risk,
liquidity risk, credit
risk, operational
risk, legal risk, etc.)
Changes in market
prices or product
fair value of
invested
The Company recognized and measured its foreign exchange hedging business in accordance
derivatives during
with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
the reporting
Financial Instruments, Accounting Standards for Business Enterprises No. 37 - Presentation of
period, and the
Financial Instruments and other relevant provisions. The fair values of foreign exchange forward
analysis of the fair
contracts were basically measured and recognized by referencing the different parameters of the
value of derivatives
financial institutions based on the then market conditions as well as the remaining term and
should disclose the
duration of the transaction. The loss from fair value change of foreign exchange forward contracts
specific methods
was RMB 27.7844 million during the reporting period.
used and the
setting of related
assumptions and
parameters.
105
Litigation involved
N/A
(if applicable)
Disclosure date of
board of directors'
announcement on
April 23, 2022
the approval of
derivatives
investment (if any)
Disclosure date of
shareholder
meeting's
announcement on May 17, 2022
the approval of
derivatives
investment (if any)
Independent
directors' special
opinions on the
For details, please refer to the "Independent Opinions of Independent Directors on Related
Company's
Matters" disclosed by the Company on April 23, 2022.
derivatives
investment and risk
control
2) Derivatives investments for speculative purposes during the reporting period
□ Applicable Not applicable
The Company had no derivatives investments for speculative purposes during the reporting period.
5. Utilization of raised funds
□ Applicable Not applicable
No use of funds in the reporting period of the Company
VIII. Major Assets and Equity Sales
1. Major assets sales
□ Applicable Not applicable
No major assets were sold during the reporting period of the Company
106
2. Major equity sales
Applicable □ Not applicable
Whether
The net the
profits transfer
contribut The was
ed by the proportio implement
equities n of the ed as
to the net Whether planned; if
listed The profits all the it was not
Whether The
Transacti Company influence contribut Pricing equities implement
it is a relationshi Date of
Counterpar Equities Date of on price from the of the ed to the principle involved ed as
related p with the Disclosu Disclosure Index
ty sold sale (RMB ten beginnin sale on listed of equity have planned,
transacti counterpar re
thousand) g of the the Company selling been the
on ty
current Company by equity transferr reasons
period to selling in ed for this and
the date the total measures
of sale net taken by
(RMB ten profits the
thousand Company
) should be
specified
Lorex Lorex It was
Technolog business confirme
y Inc., and its d by the
Lorex related Parties
Corporatio assets after Juchao
It was
n, Lorex Decemb account adding Novemb Information
Skywatch, implement
Technolog er 27, 48,203.97 -2,684.15 for a 23.09% the No N/A Yes er 25, Network
Inc. ed as
y UK 2022 small amount 2022 http://cninfo.com
planed
Limited, scale of of the .cn
100% the capital
equities of Company increase
the ’s overall for the
aforesaid business target
107
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108
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Investment
Co., Ltd.
109
IX. Analysis of Major Subsidiaries and Associates
Applicable □ Not applicable
Major subsidiaries and joint-stock companies with a net profit impact of over 10%.
Unit: RMB
Company Company
Main businesses Registered Capital Total Assets Net Assets Operating revenue Operating Profit Net Profit
Name Type
Design, construction and installation of
construction projects; technology
development, services, consultation and
Zhejiang transfer; development, manufacturing,
Dahua System Subsidiary installation and marketing of electronic
500,000,000.00 3,724,564,835.97 1,236,615,304.74 1,096,807,548.87 -181,848,681.56 -133,024,196.18
Engineering Company products, safety equipment and
Co., Ltd. communication devices; manufacturing and
marketing of computer hardware and
software; import and export of goods and
technologies
Technology development, services,
consultation, and transfer; manufacturing,
marketing and system services of computer
Zhejiang
hardware and software; design,
Dahua Vision Subsidiary
development, manufacturing and marketing 1,306,810,000.00 22,948,673,792.67 2,361,572,066.99 23,253,433,625.13 468,688,751.31 396,110,592.94
Technology Company
of electronic products and safety equipment;
Co., Ltd.
marketing and technical services of IOT
equipment; warehousing services, bonded
warehouse operation
Technology development, services,
consultation, and transfer; manufacturing
and marketing of computer hardware and
Zhejiang software; development, manufacturing and
Subsidiary
Dahua Zhilian marketing of electronic products and 1,110,000,000.00 7,369,405,188.73 700,069,887.71 8,189,212,212.46 62,445,526.67 46,685,838.67
Company
Co., Ltd. electronic components, safety equipment
and communication devices; leasing of self-
owned houses; warehousing services;
catering services; import and export of
110
goods
Development, design, production and
marketing of new energy vehicles and auto
Zhejiang
parts; development, technical services and
Leapmotor Joint stock - -
marketing of computer software, electronic 1,142,706,059.00 19,267,848,009.35 8,258,848,932.61 12,384,630,217.08
Technology company 5,226,802,394.40 5,108,885,722.61
products, and communication products;
Co., Ltd.
consultation of computer application
technologies; import and export business
Notes: The aforesaid data of Leapmotor Technology are the data that have been disclosed, calculated, and verified by it in accordance with International Accounting
Standards.
111
Acquisition and disposal of subsidiaries during the reporting period
Applicable □ Not applicable
Method of acquisition and disposal of
Impact on overall production
Company Name subsidiaries during the reporting
management and performance
period
No significant impact on overall
Sichuan Dahua Guangxun
Transferred production, operation, and
Photoelectric Technology Co., Ltd.
performance
No significant impact on overall
Zhejiang Huachuang Vision
Transferred production, operation, and
Technology Co., Ltd.
performance
No significant impact on overall
Lorex Technology Inc. Transferred production, operation, and
performance
No significant impact on overall
Lorex Corporation Transferred production, operation, and
performance
No significant impact on overall
Lorex Technology UK Limited Transferred production, operation, and
performance
No significant impact on overall
Zhejiang Pixfra Technology Co., Ltd. Established with investment production, operation, and
performance
No significant impact on overall
Yiwu Huaxi Technology Co., Ltd. Established with investment production, operation, and
performance
No significant impact on overall
Zhejiang Dahua Intelligent IoT
Established with investment production, operation, and
Operation Service Co., Ltd.
performance
No significant impact on overall
Nanyang Dahua Intelligent
Established with investment production, operation, and
Information Technology Co., Ltd.
performance
No significant impact on overall
Yibin Huahui Information Technology
Established with investment production, operation, and
Co., Ltd.
performance
No significant impact on overall
Chengdu Huazhiwei Technology Co.,
Established with investment production, operation, and
Ltd.
performance
No significant impact on overall
Xi'an IMOU Zhilian Technology Co.,
Established with investment production, operation, and
Ltd.
performance
No significant impact on overall
Luoyang Dahua Zhiyu Information
Established with investment production, operation, and
Technology Co., Ltd.
performance
No significant impact on overall
Zhejiang Huaqi Intelligent Technology
Established with investment production, operation, and
Co., Ltd.
performance
No significant impact on overall
Chengdu Dahua Wisdom Information
Established with investment production, operation, and
Technology Co., Ltd.
performance
Dahua Technology Middle East for No significant impact on overall
Maintenance Single Person Established with investment production, operation, and
Company performance
No significant impact on overall
Dahua Technology Bangladesh
Established with investment production, operation, and
Private Limited
performance
112
No significant impact on overall
IMOU NETWORK TECHNOLOGY
Established with investment production, operation, and
AUSTRALIA PTY LTD
performance
No significant impact on overall
CNG TY TNHH CNG NGH
Established with investment production, operation, and
IMOU NETWORK VIT NAM
performance
No significant impact on overall
HUARAY TECHNOLOGY
Established with investment production, operation, and
SINGAPORE PTE. LTD.
performance
X. Structured Entity Controlled by the Company
□ Applicable Not applicable
XI. Prospects for the Future Development of the Company
1. Realize high-quality development
Dahua will continue to focus on the smart IoT industry, and adhere to the strategic positioning of
a video-centric smart IoT solution and service provider, and the two major business directions of cities
and enterprises. With insights into industrial scenarios and profound understanding of client needs,
the Company will provide refined smart IoT solutions, so as to promote high-quality, green and
innovative development of the economy and society.
Dahua will carry forward its core values characterized by the "customer-oriented, employee-
based" principle, fulfill the mission of “enabling a safer society and smarter living”, and maintain its
market presence by delivering outstanding products and services, to create more value for clients,
bring technical benefits to numerous industries, and make unremitting efforts to build a beautiful and
harmonious world.
The Company will continue to invest intensively in the R&D of AI to promote its large-scale
deployment and maintain the leading position in the industry. The Company has accumulated a large
amount of industry experience in multiple industries of the government and enterprises. By combining
its multimodal and foundation model technology capabilities, the Company will focus on promoting the
R&D of visual foundation models for industry applications and implementation based on industry
demands, to further accelerate the business expansion of government and enterprise digitalization
and improve the penetration rate.
In 2023, the Company will deepen its altruistic thinking, strengthen ecological construction,
enhance the ability to satisfy the needs of various industries for digital intelligence, step up investment
113
in innovative business, optimize the construction of global marketing networks, reinforce
organizational capabilities to promote the decentralization of operations, and keep reinforcing the
construction of global compliance systems, in order to maintain stable revenue growth, while
continuing to improve gross profit levels and cash flows, thus achieving high-quality development with
solid net profit growth.
2. Focus on prioritized tasks
(1) The Company will continuously ramp up investment in innovation and core technologies to
forge technical barriers, adhere to the two major technical directions of AIoT and IoT digital
intelligence platforms and strengthen R&D and investment in the field of artificial intelligence.
Combining multi-modal and foundation model technical capabilities, we will push forward the
development and industrial implementation of industrial vision foundation models for industry
applications, accelerate AI industrialization and upgrade, and further expand the scale of digital
intelligence business for cities and enterprises.
(2) The Company will strengthen the technical ecosystem, perfect products and solutions to
effectively solve the pain points of customers in each industry segment, and enhance our
responsiveness to demand to promote customers' digital intelligence transformation. We will
vigorously strengthen ecological cooperation in software development, enrich systematic business
components, realize efficient reuse of components, and build ubiquitous IoT access capability to keep
market leadership and improve industrial landscape.
(3) The Company will optimize the construction of global marketing networks, and continuously
deploy business in China's key prefectures and major overseas countries, with strengthened regional
operating capabilities. We will join hands with eco-partners to delve deeper into industries, accelerate
the response speed to front-line business and enhance service content, as well as precisely match
resources and cultivate customers with greater value.
(4) The Company will continuously incubate innovative businesses, grasp strategic
opportunities of innovative businesses and emerging industries, polish products and solutions swiftly,
and seek high-speed growth.
(5) The Company will safeguard the security and strengthen the resilience of the supply chain,
quickly build a low-cost global supply system, and continuously improve the capacity for stable and
efficient supplies as well as systematic delivery and services for the global market.
114
(6) The Company will improve the effectiveness of business operations, strengthen financial and
IT investment, and continuously iterate and reduce business operation costs.
(7) The Company will strengthen organizational capabilities and deploy operational talents in
lower-level administrative areas, cultivate talent teams, build a stable personnel structure, and
promote a virtuous circle consisting of management personnel and technical professionals; we will
develop a high-performance culture and review organizational responsibilities to improve
organizational and per capita effectiveness, encourage hard work with rewards, and continue to
promote the "Employee Development Community Plan".
(8) The Company will continue to strengthen the construction of the global compliance system.
XII. Reception of Visits, Communication, Interviews, and Other Activities in the
Report Period
Applicable □ Not applicable
Main content of the Index of the
Reception Reception Reception Reception discussion and the basic
Reception objects
Time location Method target type information information
provided of research
The overall
development
conditions of each
List of
business segment
Records of
of the Company in
Investor
5 institutions including 2021, the
Relations on
March 9, Meeting Field Industrial Securities influences of
Institution March 11,
2022 room Investigation and macroeconomic
2022 issued
Tianfeng Securities changes on
by Juchao
business
Information
development and
Network
prospects of the
Company’s
business.
List of
Records of
Dahua
Group’s
195 institutions such The Company’s
Institutions Investor
April 23, Meeting Telephone as Essence Fund and business
and Relations on
2022 room communication Eastmoney as well as conditions and
individuals April 23,
7 individual investors prospects in 2021.
2022 issued
by Juchao
Information
Network
Briefly reviewed Records of
Institutions Helixin Investment
May 16, Meeting Field the Company’s Investor
and and 4 individual
2022 room Investigation overall financial Relations on
individuals investors
and operating May 16,
115
conditions since 2022 on
2021, and CNINFO
discussed its
current business
layout and
development
prospects
127 institutional
investors such as
The business
China International Records of
conditions in the
Capital Corporation Investor
Institutions first half of 2022
August 20, Meeting Telephone and J.P. Morgan Relations on
and and development
2022 room communication Securities as well as August 20,
individuals prospect in the
14 individual investors 2022 on
second half of
such as Zhao CNINFO
2022
Guodong and Chen
Wenhua
List of
Records of
Dahua
The Company’s Group’s
15 institutional business Investor
investors such as development and Relations on
August 25, Meeting Field
Institution Shanyuan Investment development August 25
2022 room Investigation
Management and status in the and August
Northeast Securities second half of 26, 2022
2022 issued by
Juchao
Information
Network
List of
Records of
The Company’s
Dahua
planning and
Group’s
achievements in
Investor
digital intelligence
7 institutional Relations on
upgrading as well
September Meeting Field investors such as September
Institution as corporate
20, 2022 room Investigation Essence Securities 20 and
strategy and
and PICC AMC September
management
22, 2022
measures in the
issued by
second half of
Juchao
2022
Information
Network
127 institutional
Records of
investors such as
The Company’s Investor
Institutions Huatai Securities and
October Meeting Telephone recent business Relations on
and China Securities as
29, 2022 room communication conditions and October 29,
individuals well as two individual
prospects 2022 on
investors, i.e., Hu
CNINFO
Qiang and Li Yuanwu
116
Section IV Corporate Governance
I. Basic Situation on Corporate Governance
Dahua has strictly established a "three meeting and one layer" corporate governance structure
for the shareholders' meeting, board of directors, supervisory board, and management by following
the Company Law, Securities Law, Code of Corporate Governance for Listed Companies and other
relevant laws, regulations, and regulatory documents of regulatory authorities. There are four special
committees under the board of directors, including the Strategy Committee, Audit Committee,
Nomination Committee, and Remuneration and Appraisal Committee, with each having clear
responsibilities and coordinated operations.
During the reporting period, the Company constantly improved corporate governance structure,
established a sou internal control system, constantly improved the Company's standardized operation
level, strictly performed the information disclosure obligations, and focused on protection of the
investors' interests. The actual situation of corporate governance is in line with the laws, regulations,
regulatory documents, and rules of self-regulation on the governance of listed companies issued by
China Securities Regulatory Commission and Shenzhen Stock Exchange.
(I) Shareholders and Shareholders Meeting
The Company convenes and holds the General Meeting of Shareholders and treats all
shareholders equally in strict accordance with the provisions and requirements of Company Law of
the People’s Republic of China, Articles of Association and Rules of Procedure for the General
Meeting of Shareholders, which guarantees the shareholders’ rights to know, to participate in and to
vote on the major issues of the Company. During the reporting period, the Company organized 3
shareholders' general meetings to make resolutions on periodic reports, stock incentive plans and
other issues. The Company hires a lawyer to issue legal opinions on the convening of the General
Meeting of Shareholders, the qualifications of the attenders, the qualifications of the convener, the
voting procedure, and the voting results to ensure that the operation mechanism of the General
Meeting of Shareholders complies with relevant provisions, and protects the legitimate rights and
interests of the shareholders.
(II) The Company and its Controlling Shareholders
The Company is independent from the controlling shareholder in terms of business, personnel,
assets, finance and organizations as the Company and the controlling shareholder calculate their
respective accounts, assumes their respective responsibilities and risks independently. During the
reporting period, the controlling shareholders of the Company were able to strictly regulate their
behaviors, without interference in, directly or indirectly, the Company's decision-making and business
activities beyond the general meetings, nor any non-operational appropriation of the capital of listed
Companies.
(III) Directors and Board of Directors
The Company elects the directors and appoints the independent directors in strict accordance
with the selection and employment procedure specified in the Company Law and the Articles of
Association. At present, the Company has seven directors, including three independent directors, all
of whom are experts in corporate management and financial accounting and other fields. The number
and composition of the board of directors meet the requirements of relevant laws and regulations and
117
the “Articles of Association”. All of the Company's directors should perform their duties with integrity
and diligence in accordance with the principles of maximizing the interests of the company and
shareholders. The Board of Directors convened board meetings and implemented the resolutions of
the shareholders' meeting in strict accordance with "Articles of Association" and "Rules of Procedure
of the Board of Directors"; All the directors were able to perform their due duties and conscientiously
attended the Board meetings and shareholders' meetings to safeguard the legitimate rights and
interests of the Company and shareholders.
(IV) Supervisors and the Board of Supervisors
The Company strictly elects the supervisors by the election and appointment procedures
specified in the Company Law and the Articles of Association. Currently, there are three supervisors
in the company, with the number and composition meeting the requirements of relevant laws and
regulations and the Articles of Association. The board of supervisors convenes supervisor meetings
in strict accordance with the Articles of Association and the Rules of Procedure of the Board of
Supervisors. All the supervisors perform their duties conscientiously, and effectively supervise and
express independent opinions on the legitimacy and compliance of the corporate finance, directors,
and senior managers in fulfilling their duties, in an integral, diligent and conscientious manner, to
safeguard the legitimate rights and interests of the Company and shareholders.
(V) Senior Management
The Company's senior management, with clear responsibilities, performs duties in strict
accordance with the Articles of Association and other management systems. They are diligent in
carrying out and executing the resolutions of the Board of Directors.
(VI) Performance Appraisal and Incentive and Constraint Mechanisms
To further establish and improve the company's incentive mechanism and strengthen the
company's philosophy of sustainable development of both management and core employees, the
company implements an equity restricted stock incentive plan which reinforce the interest sharing and
restraint mechanisms applied to shareholders and core business personnel. It has maintained the
stability of management teams and business leaders, guaranteed the realization of the company's
development strategy and business objectives, and ensured the company's sound long-term
development. The appointment of company executives is open, transparent and complies with laws
and regulations.
(VII) Stakeholders
The company fully respects and safeguards the legitimate rights and interests of relevant
stakeholders. While striving to achieve a steady growth in the company's performance, the company
also effectively treats and protects the legitimate rights and interests of all stakeholders, strengthens
the communication and cooperation between interested parties and the Company and continuously
improves product quality, and attaches importance to corporate social responsibility to realize the
balance of interests among shareholders, employees, society, etc., in order to promote the company
for sustainable, stable and healthy development.
(VIII) Information Disclosure and Investor Relations
The Company performs its obligations for information disclosure truthfully, accurately, timely,
and completely in strict accordance with the relevant laws and regulations and the Company's
"Information Disclosure Management System" and "Investor Relations Management System", and
designates Securities Times and www.cninfo.com as the media channels for such disclosure; the
Company strictly keeps the confidentiality of undisclosed information. According to the Company's
118
"Inside Information Confidentiality System", registering and filing internal information insiders has
been done properly. The internal information insider filing system has been established and submitted
to the regulatory authorities for record in time as required, and the behavior of submitting company
information to external information users has been strictly regulated. During the reporting period, no
incidence of stock trading based on insider information has occurred.
At the same time, the Company actively engages in communication with investors by setting up
an special column of investor relations management on its official website, and answering investors'
questions through the investor interaction platform of Shenzhen Stock Exchange and the Company's
investor hotline, so as to keep investors' communication channels available, help investors
understand and work with the Company, improve the Company's transparency, and protect the
legitimate rights and interests of all shareholders.
Whether the actual status of corporate governance significantly deviates from laws, administrative regulations and the
rules issued by the China Securities Regulatory Commission regarding the governance of listed companies.
□ Yes No
There is no significant difference between the actual situation of corporate governance and laws, administrative
regulations and the rules issued by China Securities Regulatory Commission regarding the governance of listed
companies.
II. The Company's Independence from the Controlling Shareholders, Actual
Controllers in Asset, Personnel, Finance, Organization, Business, etc.
The company and the controlling shareholders are completely separated in terms of business,
personnel, assets, organization, and finance, and has independent and complete businesses and
capabilities of independent operation.
1. Business independence
The company's business is independent of the controlling shareholders, actual controllers and
other enterprises under their control, and has an independent and complete R&D, production,
procurement, and sales system; the technology required for production and operation is legal,
independently owned, or licensed for use by the company with no asset disputes. The company has
signed all external contracts independently, and has the ability to independently make production and
operation decisions and engage in production and business activities.
2. Staff Independence
The company's personnel are independent from the controlling shareholders, actual controllers
and other companies controlled by them. The company has an independent human resources
department responsible for labor, personnel, and payroll management. The Company has established
an independent labor, personnel, and salary management system. The production, operation, and
administration are independent of the controlling shareholders, actual controllers, and other
companies controlled by them; the recommendation, election, and appointment of directors,
supervisors, and senior managers of the Company are conducted legally and independently; senior
management personnel such as the president, executive president, senior vice president, board
secretary, and finance director did not hold positions other than directors and supervisors for
controlling shareholders, actual controllers, and other companies controlled by them or receive
salaries from them; the Company's financial staff do not have a part-time job with the controlling
shareholders, actual controllers, and other companies controlled by them.
3. Asset Independence
119
The company's assets are independent from the controlling shareholders, actual controllers and
other companies controlled by them. The company's main assets include the ownership and use
rights of complete land, plants, machinery and equipment, trademarks, patents, non-patented
technology required for the main business, and an independent raw material procurement and
product sales system. The property rights of the above assets are clear and completely independent
of the controlling shareholders and major shareholders. There was misappropriation of the company's
assets by the controlling shareholders and major shareholders.
4. Institutional Independence
The company's organizations are independent from the controlling shareholders, actual
controllers and other companies controlled by them. The Company has established decision-making,
implementation, and supervision bodies for general meeting of shareholders, board of directors and
board of supervisors. It has also appointed senior managers such as president, executive president,
senior vice president, board secretary, and chief financial officer; the Company has set up specialized
departments equipped with the necessary personnel independently responsible for
domestic/overseas sales, R&D, supply chain, delivery and service, quality and service, finance, legal
affairs, securities, internal audit, human resources, administration, IT, and other functions. The
internal organizations perform their respective operational management responsibilities under the
leadership of the board of directors and the president in accordance with the rules and regulations;
there have been no cases in which the controlling shareholders, actual controllers, and other
companies controlled by them are confused with their identities and duties; There is no circumstance
in which the controlling shareholder or actual controller interferes with its organizational setup.
5. Financial Independence
The company's finance is independent from the controlling shareholders, actual controllers and
other companies controlled by them. The company has established an independent financial
department with full-time financial accounting personnel, and has established an independent
financial accounting system for independent financial decisions. It has a standardized financial
accounting system and financial management system for subsidiaries; the company has
independently opened a basic deposit account so that there is no sharing of bank accounts with
actual controllers, controlling shareholders, and other companies controlled by it; the company
handled tax registrations with the Zhejiang Provincial State Tax Bureau and the Zhejiang Provincial
Local Tax Bureau and paid taxes independently as required by law.
III Horizontal competition
□ Applicable Not applicable
IV. Relevant Situation of the Annual General Meeting of Shareholders and the
Extraordinary General Meeting of Shareholders Held in the Reporting Period
1. The shareholders' meetings for this reporting period
Percentage
Conference Conference Date of Date of
of Investors Conference Resolution
Session Type Conference Disclosure
Involved
First Extraordinary Extraordinary April 22, April 23, For more information, please refer
48.86%
General Meeting General 2022 2022 to the Announcement of
120
of Shareholders in Meeting Resolutions Made on the First
2022 Extraordinary General Meeting of
Shareholders in 2022 on
www.cninfo.com.cn
For more information, please refer
to the Announcement on the
2021 Annual Annual
May 16, May 17, Resolutions Made on the 2021
General Meeting General 47.77%
2022 2022 Annual General Meeting of
of Shareholders Meeting
Shareholders in
www.cninfo.com.cn
For more information, please refer
Second
to the Announcement of
Extraordinary Extraordinary
October 17, October Resolutions Made on the Second
General Meeting General 41.13%
2022 18, 2022 Extraordinary General Meeting of
of Shareholders in Meeting
Shareholders in 2022 in
2022
www.cninfo.com.cn
2. Convening of the Extraordinary General Meeting of Shareholders upon request of the
preferred stockholders whose voting rights are restored
□ Applicable Not applicable
IV. Directors, Supervisors and Senior Management
1. Basic information
Numb
Numb
Number er of
er of
of share Number Reason
share
shares s Other of s for
Startin Termin s
Positi held at increa chang shares increas
Nam Gen A g date ation decre
Post on the sed in es held at e and
e der ge of Date of ased
status beginnin the (share the end decreas
tenure tenure in the
g of the perio ) of the e in
period
period d period shares
(share
(share) (shar
)
e)
Chairm
Fu April August
an and Incum Mal 1,023,86 1,023,86
Liqua 56 1, 11, 0 0 0
Preside bent e 8,980 8,980
n 2005 2023
nt
Particip
ated in
the
Compa
ny’s
equity
Vice April August -
Wu Incum Mal 69,250,8 69,172,8 incentiv
Chairm 51 1, 11, 0 0 78,00
Jun bent e 86 86 e plan,
an 2005 2023 0
and the
shares
held by
him/her
were
repurch
121
ased
and
cancelle
d
April August
Chen Incum Fem 71,262,8 71,262,8
Director 56 1, 11, 0 0 0
Ailing bent ale 13 13
2005 2023
Particip
ated in
the
Compa
ny’s
equity
incentiv
Director e plan,
and includin
Zhao March August -
Executi Incum Mal 2,025,00 1,639,00 g
Yunin 46 22, 11, 0 0 386,0
ve bent e 0 0 repurch
g 2018 2023 00
Preside asing
nt and
cancelli
ng
shares
and
granting
new
shares
Liu Indepe Augus August
Incum Mal
Hanli ndent 60 t 12, 11, 0 0 0 0 0
bent e
n Director 2020 2023
Dece
Cao Indepe August
Incum Mal mber
Yanlo ndent 48 11, 0 0 0 0 0
bent e 20,
ng Director 2023
2021
Indepe Augus August
Zhan Incum Mal
ndent 58 t 12, 11, 0 0 0 0 0
g Yuli bent e
Director 2020 2023
Song April August
Supervi Incum Fem
Maoy 41 3, 11, 0 0 0 0 0
sor bent ale
uan 2008 2023
Zhen
Augus August
g Supervi Incum Fem
44 t 12, 11, 50,200 0 0 0 50,200
Jiepin sor bent ale
2020 2023
g
Zuo April August
Supervi Incum Fem
Pengf 45 3, 11, 0 0 0 0 0
sor bent ale
ei 2008 2023
Particip
ated in
the
Senior Compa
Octob August
Liu Vice Incum Mal 61,80 1,059,90 ny’s
42 er 12, 11, 998,100 0 0
Ming Preside bent e 0 0 equity
2020 2023
nt incentiv
e plan,
includin
g
122
repurch
asing
and
cancelli
ng
shares
and
granting
new
shares
Particip
ated in
the
Compa
ny’s
equity
incentiv
e plan,
Senior Febru includin
August -
Li Vice Incum Mal ary 1,270,00 1,195,00 g
48 11, 0 0 75,00
Zhijie Preside bent e 27, 0 0 repurch
2023 0
nt 2020 asing
and
cancelli
ng
shares
and
granting
new
shares
Particip
ated in
the
Compa
ny’s
equity
incentiv
e plan,
Senior includin
Octob August
Song Vice Incum Mal 546,0 g
45 er 12, 11, 0 0 0 546,000
Ke Preside bent e 00 repurch
2020 2023
nt asing
and
cancelli
ng
shares
and
granting
new
shares
Secreta Particip
ry of ated in
the Dece the
August -
Wu Board Incum Mal mber 1,912,33 1,879,33 Compa
49 11, 0 0 33,00
Jian and bent e 1, 5 5 ny’s
2023 0
Senior 2005 equity
Vice incentiv
Preside e plan,
123
nt includin
g
repurch
asing
and
cancelli
ng
shares
and
granting
new
shares
Particip
ated in
the
Compa
ny’s
equity
incentiv
CFO e plan,
and Febru includin
Xu August -
Senior Incum Fem ary 1,170,00 1,047,00 g
Qiaof 51 11, 0 0 123,0
Vice bent ale 27, 0 0 repurch
en 2023 00
Preside 2020 asing
nt and
cancelli
ng
shares
and
granting
new
shares
Particip
ated in
the
Compa
ny’s
equity
incentiv
e plan,
Senior includin
Xu March August -
Vice Incum Mal 1,170,00 1,137,00 g
Zhich 57 22, 11, 0 0 33,00
Preside bent e 0 0 repurch
eng 2018 2023 0
nt asing
and
cancelli
ng
shares
and
granting
new
shares
Particip
Senior ated in
Zhu March August -
Vice Incum Mal 1,590,22 1,330,22 the
Jiant 41 22, 11, 0 0 260,0
Preside bent e 5 5 Compa
ang 2018 2023 00
nt ny’s
equity
124
incentiv
e plan,
includin
g
repurch
asing
and
cancelli
ng
shares
and
granting
new
shares
Particip
ated in
the
Compa
ny’s
equity
incentiv
Director e plan,
Zhan and includin
May Decem -
g Executi Resig Mal 3,032,89 2,710,15 g
46 20, ber 16, 0 0 322,7
Xing ve ned e 3 3 repurch
2010 2022 40
ming Preside asing
nt and
cancelli
ng
shares
and
granting
new
shares
Particip
ated in
the
Compa
ny’s
equity
incentiv
e plan,
Senior Febru includin
Jiang Decem -
Vice Resig Mal ary 1,570,00 1,203,80 g
Xiaol 43 ber 16, 0 0 366,2
Preside ned e 27, 0 0 repurch
ai 2022 00
nt 2020 asing
and
cancelli
ng
shares
and
granting
new
shares
-
1,179,17 1,178,10
Total -- -- -- -- -- -- 0 0 1,069, --
1,432 2,292
140
125
Whether there is any outgoing directors, supervisors, or dismissal of senior management in their term of office during
the reporting period.
Yes □ No
Mr. Zhang Xingming resigned as the Company’s director, CEO and his position at the Special Committee of the Board
of Directors, and Mr. Jiang Xiaolai resigned as the Company’s Senior Vice President due to the adjustment of the
Company’s business management during the reporting period. See Announcement on Adjustment of Some Directors
and Senior Executives and the Appointment of Securities Affairs Representatives disclosed by the Company on
Juchao Information Network on December 20, 2022 for details.
Changes of Directors, Supervisors and Senior Management of the Company
Applicable □ Not applicable
Name Title Type Date Causes
They work at the
subsidiaries after
Director and resignation due to
Zhang Xingming Resigned December 16, 2022
Executive President adjustment of the
Company’s business
management
They work at the
subsidiaries after
Senior Vice resignation due to
Jiang Xiaolai Dismissal December 16, 2022
President adjustment of the
Company’s business
management
2. Positions
Professional backgrounds, major work experiences and current main responsibilities of the incumbent directors,
supervisors, and senior management of the Company
Mr. Fu Liquan, Chinese nationality, permanent residence in Cyprus, born in 1967, graduated from Zhejiang University
with an EMBA degree. As one of the main founders of the Company, he served as chairman and president of the
Company, and now serves as chairman and president of the Company. In 2018, his employment was renewed by
China Security Association as an expert of the Expert Committee of China Security & Protection Industry Association.
He has won the honors of “Outstanding Figure Award of China Security - Tribute to the 40 Years Anniversary of
Reform and Opening Up”, “Top Ten Influential Zhejiang Entrepreneurs”, “Model Worker of Zhejiang Province”, “40
Figures of Industry Innovative Development of Zhejiang over the 40 years Anniversary of Reform and Opening Up”,
“Excellent Enterprise Operator with Outstanding Contributions to the Information Economy”, “Excellent Builder of
Socialism with Chinese Characteristics in the New Era of Non-Public Economy in Zhejiang Province”, “Outstanding
Contributions Award in ‘Ingenuity for a Safe China’”, Global Security Contribution Award, Top Ten Figures in Security
and Protection Industry, and the Best CEO of listed companies of Forbes.
Mr. Wu Jun, Chinese nationality, born in 1972, with a bachelor's degree, engineer, served as vice chairman and vice
president of the Company and general manager of Zhejiang Dahua System Engineering Co., Ltd. He now serves as
vice chairman of the Company and executive director of Zhejiang Dahua System Engineering Co., Ltd.
Ms. Chen Ailing, Chinese nationality, born in 1967, has the right of permanent residence in Cyprus, and holds bachelor
degree. As one of the main founders of the Company, she served as director and CFO of the Company, and now
serves as director of the Company.
126
Mr. Zhao Yuning, Chinese nationality, was born in 1977 and graduated from National University of Singapore with a
master degree in science. From July 2000 to June 2017, he successively served as technical engineer, regional sales
manager, national general manager, vice president and president of regional sales department, and senior vice
president at Huawei Technologies Co., Ltd. He is currently the director and executive president of the Company.
Mr. Liu Hanlin, Chinese nationality, born in 1963, holds postgraduate degree. He successively served as Assistant,
Lecturer, Associate Professor and Professor of the School of Accounting, Hangzhou Dianzi University, vice-president
and president of the School of Finance and Economics, and Secretary of the Party Committee of the School of
Accounting. He is currently a professor of Hangzhou Dianzi University, a member of the Chinese Institute of Certified
Public Accountants, a director of Electronic Branch of Accounting Society of China, a director and member of the
Accounting Society of Zhejiang Province, an executive director of the Zhejiang Auditing Society, an executive director
of Zhejiang Association of CFO, the deputy director of Zhejiang Province Management Accounting Expert Advisory
Committee, and the director of Zhejiang Province Management Accounting Application Innovation Research Center,
and an independent director of Litian Pictures Holdings Limited, Zhejiang Runyang New Material Technology Co., Ltd.,
Zhejiang Great Shengda Packaging Co., Ltd. and Hangzhou Crysound Electrical Co., Ltd., and an independent
director of the Company.
Mr. Zhang Yuli, Chinese nationality, born in 1965, holds Ph.D. Economics degree. He served as head of the enterprise
management department, Executive Deputy Director of MBA Center, Vice President of Graduate Studies, and vice-
president and president of Business School of Nankai University. He is currently a professor and doctoral supervisor at
Business School of NanKai University, director of Innovation and Entrepreneurship Collaborative Promotion Center of
National Business Administration Graduate Education Steering Committee, and director of Tianjin University
Philosophy and Social Sciences Key Research Base "Entrepreneurship and Small and Medium-sized Enterprises
Management Research Base". He is currently a member of National College Graduates Employment and
Entrepreneurship Guidance Committee, member of the Management Department of Science and Technology
Commission of Ministry of Education, member of Chinese Advanced MBA Education Accreditation Committee,
member of Tianjin Discipline Assessment Group and Professional Degree Education Steering Committee, evaluation
expert of the National Natural Science Foundation of China and the National Social Science Foundation of China, and
independent director of Tianjin Benefo Tejing Electric Co., Ltd. and Tianjin Port Holdings Co., Ltd. and director of
Tianjin TEDA Construction Group Co., Ltd. at the same time. He won special allowance of the State Council in 2004,
and selected as Distinguished Professor Chang Jiang Scholars Program of Ministry of Education in 2013 He is
Independent Director of the Company.
Mr. Cao Yanlong, Chinese nationality, was born in 1975, and holds PhD degree. He successively served as lecturer
and postdoctoral researcher of College of Biosystems Engineering and Food Science of Zhejiang University, visiting
scholar of the Center for Precision Technologies of University of Huddersfield, and assistant to director of Hangzhou
Economy and Information Technology Committee. He is currently professor of School of Mechanical Engineering of
Zhejiang University, president of Shandong Industrial Technology Research Institute of Zhejiang University,
independent director of Hangzhou Youngsun Intelligent Equipment Co., Ltd., and independent director of the Company.
Ms. Song Maoyuan, Chinese nationality, was born in 1982 and holds Bachelor degree. She now serves as chairman
of the Board of Supervisors and secretary to president of the Company.
Ms. Zheng Jieping, Chinese nationality, was born in 1979 and holds Bachelor degree. She served as the director of
the HR Compensation and Performance Division of the Company from October 2014 to June 2018, and has been
serving as the director of HR Organization Management, Compensation and Performance Division of the Company
since July 2018, and has been serving as deputy general manager of Human Resources Department of the Company,
and the supervisor of the Company since January 2021.
127
Ms. Zuo Pengfei, Chinese nationality, was born in 1978, and holds Bachelor degree. She joined the Company since
2001. She is currently the supervisor of the Company, the chairman of the labor union, the director of human
resources employee relations, and the supervisor of Hangzhou Xiaohua Technology Co., Ltd.
Mr. Liu Ming, Chinese nationality, born in 1981, holds a master degree. He joined the company in 2006, and in the
recent five years, he has served as the chairman of Hardware Development Department of R&D Center of the
Company, general manager of Front Product Line of R&D Center, deputy general manager of Product R&D
Department of R&D Center, and deputy general manager of R&D Center. He has been serving as deputy general
manager of R&D Center of the Company since March 2020. He now serves as senior vice president of the Company
and deputy general manager of R&D Center of the Company.
Mr. Li Zhijie, Chinese nationality, born in 1975, holds a master degree, From March 2005 to August 2017, he served
as technical engineer, director of the Delivery and Service Department of the Representative Office, national delivery
representative, and vice president of Regional Delivery Department of Huawei Technologies Co., Ltd., and has been
serving as general manager of the Delivery and Service Center of the Company since September 2017, and now
serves as senior vice president and general manager of the Delivery and Service Center of the Company, and
president of Zhejiang Dahua Smart IOT Operation Service Co., Ltd.
Mr. Song Ke, Chinese nationality, born in 1978, holds a master degree, served as manager of IT Department of
Hangzhou H3C Co., Ltd., general manager of IT Center and supervisor of Zhejiang Dahua Technology Co., Ltd. He
now serves as senior vice president and general manager of Process IT Center of the Company.
Mr. Wu Jian, Chinese nationality, born in 1974, holds master degree, served as secretary of the Board of Directors and
vice president of the Company in the recent five years, and now serves as secretary of the Board of Directors and
senior vice president of the Company.
Ms. Zu Qiaofen, Chinese nationality, born in 1972, holds a college degree, Served as chief financial officer of the
Company's Finance Center from January 2015 to January 2017; From January 2017 to December 2017, deputy
general manager of the Company's Finance Center; the general manager of the Company's Finance Center since
December 2017. now serves as CFO and senior vice president of the Company and general manager of the
Company's Finance Center.
Mr. Xu Zhicheng, Chinese nationality, was born in 1966, holds a college degree. He successively served as deputy
general manager of marketing, general manager, and supervisor of the Company from September 2013 to June 2015,
and has been serving as general manager of the Internal Audit Department of the Company since June 2015, and now
serves as senior vice president and general manager of the Internal Audit Department of the Company and the
general manager of the Quality Management Center.
Mr. Zhu Jiantang, Chinese nationality, born in 1982, holds bachelor degree. From March 2012 to January 2015, he
has successively served as Product Director of R&D and Deputy General Manager of R&D Center. Since January
2015, he has been the general manager of the Company's Supply Chain Management Center. He is currently the
senior vice president of the Company and the general manager of the Supply Chain Management Center.
Position held in shareholders entities
□ Applicable Not applicable
Position held in other entities
Applicable □ Not applicable
Renumeration
Name of office- Position held in other
Name of other entity received from other
holder entities
entity or not
Ningbo Huayang Venture Capital Investment
Fu Liquan Executive Partner No
Partnership (Limited Partnership)
Fu Liquan Hangzhou Gulin Equity Investment Partnership Executive Partner No
128
(limited partnership)
Ningbo Huaqi Investment Management
Fu Liquan Executive Partner No
Partnership (Limited Partnership)
Zhejiang Huashi Investment Management Co.,
Fu Liquan Executive Director No
Ltd.
Chen Ailing Zhejiang Huanuokang Technology Co., Ltd. Chairman No
Zhejiang Huashi Investment Management Co.,
Chen Ailing General Manager No
Ltd.
Hangzhou Huaxi Information Technology Co., Executive Director and
Chen Ailing No
Ltd. General Manager
Ningbo Hualing Venture Capital Investment
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huali Investment Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huayan Investment Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huadi Investment Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huaqian Investment Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huagu Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Ningbo Huaqi Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Huayan Capital (Hangzhou) Private Equity Fund
Chen Ailing Chairman No
Management Co., Ltd.
Hangzhou Huazhen Equity Investment
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Hua’ao Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang I Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang II Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang III Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Jikang IV Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Ruipin Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Hangzhou Zhiao Enterprise Management
Chen Ailing Executive Partner No
Partnership (Limited Partnership)
Chen Ailing Zhejiang Lancable Technology Co., Ltd. Director No
Ningbo Huakun Venture Capital Investment
Wu Jun Executive Partner No
Partnership (Limited Partnership)
Zhoushan Xinhao Technology Development Executive Director and
Wu Jun No
Co., Ltd. General Manager
Zhejiang Runyang New Material Technology
Liu Hanlin Independent Director Yes
Co., Ltd.
Liu Hanlin Litian Pictures Holdings Limited Independent Director Yes
Liu Hanlin Zhejiang Great Shengda Packaging Co., Ltd. Independent Director Yes
Liu Hanlin Hangzhou Crysound Electrical Co., Ltd. Independent Director No
Zhang Yuli Tianjin TEDA Construction Group Co., Ltd. Director No
Zhang Yuli Tianjin Benefo Tejing Electric Co., Ltd. Independent Director Yes
Zhang Yuli Tianjin Port Holdings Co., Ltd. Independent Director Yes
Cao Yanlong Hangzhou Hanmo Industrial Group Co., Ltd. Supervisor No
Cao Yanlong Shandong Chuangzhi Intelligent Technology Executive Director and No
129
Co., Ltd. General Manager
Cao Yanlong Hangzhou Xiaotu Technology Co., Ltd. Manager No
Hangzhou Youngsun Intelligent Equipment Co.,
Cao Yanlong Independent Director Yes
Ltd.
Hangzhou Hanyu Star Wheel Transmission
Cao Yanlong Director Yes
Technology Co., Ltd.
Song Maoyuan Guangdong Zhishi Digital Technology Co., Ltd. Supervisor No
Hangzhou Huaxi Information Technology Co.,
Song Maoyuan Supervisor No
Ltd.
Hangzhou Huarong Investment Management
Zheng Jieping General Manager No
Co., Ltd.
Positions held in other companies N/A
Penalties imposed by CSRC on incumbent or outgoing directors, supervisors, and senior management during the
reporting period in the last three years
□ Applicable Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
The followings are the decision-making program, determination basis and actual payment of remuneration for directors,
supervisors, and senior management.
Top management of the Company shall be evaluated by the performance commitments of senior management and the
department managers and those above shall be evaluated by their work report at the end of the year. The managers
have made a system of responsibility for business objectives in their term of office, and formulated the assessment
method in which the company-level KPI index commitments are combined with individual performance commitments.
They have met these indexes, meaning that they are able to complete their respective tasks in the latest term of office.
The Company will increase their remuneration or adopt other incentive measures, as appropriate, based on their
completion of objectives.
Remuneration of directors, supervisors and senior management in the reporting period of the Company
Unit: RMB ten thousand
Total Whether to
remuneration receive
Position
Name Post Gender Age from the remuneration
status
Company from related
before tax parties or not
Chairman,
Fu Liquan Male 56 Incumbent 71.22 No
President
Vice
Wu Jun Male 51 Incumbent 8.78 No
Chairman
Chen Ailing Director Female 56 Incumbent 0 No
Director,
Zhao Yuning Executive Male 46 Incumbent 203.26 No
President
Independent
Liu Hanlin Male 60 Incumbent 25 No
Director
Independent
Zhang Yuli Male 48 Incumbent 25 No
Director
Independent
Cao Yanlong Male 58 Incumbent 25 No
Director
Song Supervisor Female 41 Incumbent 55.17 No
130
Maoyuan
Employee
Zheng Jieping Female 44 Incumbent 132.54 No
Supervisor
Employee
Zuo Pengfei Female 45 Incumbent 78.51 No
Supervisor
Senior Vice
Liu Ming Male 42 Incumbent 181.91 No
President
Senior Vice
Li Zhijie Male 48 Incumbent 171.74 No
President
Senior Vice
Song Ke Male 45 Incumbent 166.84 No
President
Senior Vice
President and
Wu Jian Male 49 Incumbent 170.14 No
Secretary of
the Board
Senior Vice
President and
Xu Qiaofen Chief Female 51 Incumbent 159.49 No
Financial
Officer
Senior Vice
Xu Zhicheng Male 57 Incumbent 180.15 No
President
Senior Vice
Zhu Jiantang Male 41 Incumbent 187.73 No
President
Director,
Zhang
Executive Male 46 Resigned 242.26 No
Xingming
President
Senior Vice
Jiang Xiaolai Male 43 Resigned 151.97 No
President
Total -- -- -- -- 2,236.71 --
VI. The Performance of the Duties of Directors During the Reporting Period
1. The Board for this reporting period
Conference Session Date of Conference Date of Disclosure Conference Resolution
For more information, please refer
to the Announcement of Resolutions
The 26th meeting of the
February 16, 2022 February 17, 2022 Made at the Twenty-Sixth Meeting
seventh Board of Directors
of the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
to the Announcement of Resolutions
The twenty-seventh
Made at the Twenty-Seventh
meeting of the seventh April 1, 2022 April 2, 2022
Meeting of the Seventh Board of
Board of Directors
Directors disclosed on
www.cninfo.com.cn
For more information, please refer
The twenty-eighth meeting to the Announcement of Resolutions
of the seventh Board of April 6, 2022 April 7, 2022 Made at the Twenty-Eighth Meeting
Directors of the Seventh Board of Directors
disclosed on www.cninfo.com.cn
The twenty-ninth meeting For more information, please refer
of the seventh Board of April 11, 2022 April 12, 2022 to the Announcement of Resolutions
Directors Made at the Twenty-Ninth Meeting
131
of the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
to the Announcement of Resolutions
The thirtieth meeting of the
April 22, 2022 April 23, 2022 Made at the Thirtieth Meeting of the
seventh Board of Directors
Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-first meeting of to the Announcement of Resolutions
the seventh Board of June 2, 2022 June 3, 2022 Made at the Thirty-first Meeting of
Directors the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-second meeting to the Announcement of Resolutions
of the seventh Board of June 27, 2022 June 28, 2022 Made at the Thirty-Second Meeting
Directors of the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-third meeting of to the Announcement of Resolutions
the seventh Board of August 19, 2022 August 20, 2022 Made at the Thirty-Third Meeting of
Directors the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-fourth meeting of to the Announcement of Resolutions
September 30,
the seventh Board of September 29, 2022 Made at the Thirty-Fourth Meeting
2022
Directors of the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-fifth meeting of to the Announcement of Resolutions
the seventh Board of October 28, 2022 October 29, 2022 Made at the Thirty-Fifth Meeting of
Directors the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-sixth meeting of to the Announcement of Resolutions
November 24,
the seventh Board of November 23, 2022 Made at the Thirty-sixth Meeting of
2022
Directors the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-seventh meeting to the Announcement of Resolutions
December 20,
of the seventh Board of December 19, 2022 Made at the Thirty-seventh Meeting
2022
Directors of the Seventh Board of Directors
disclosed on www.cninfo.com.cn
For more information, please refer
The thirty-eighth meeting of to the Announcement of Resolutions
December 24,
the seventh Board of December 23, 2022 Made at the Thirty-eighth Meeting of
2022
Directors the Seventh Board of Directors
disclosed on www.cninfo.com.cn
2. Attendance of directors at the BOD meetings and shareholders' general meetings
Attendance of directors at the BOD meetings and shareholders' general meetings
Number Number Number of Number of Number Whether Number of
of board of attendances of attendances of absent from attendance of
Name of
meetings attending board meetings by of board absences board shareholders'
director
to attend the board means of meetings by at board meetings in general
during meetings telecommunications entrustees meetings person for meetings
132
the on site two
reporting consecutive
period times
Fu
13 13 0 0 0 No 3
Liquan
Wu Jun 13 13 0 0 0 No 3
Chen
13 13 0 0 0 No 3
Ailing
Zhang
11 11 0 0 0 No 2
Xingming
Liu
13 0 13 0 0 No 1
Hanlin
Zhang
13 0 13 0 0 No 1
Yuli
Cao
13 0 13 0 0 No 2
Yanlong
Explanation for failure to attend the board meeting in person twice in a row
N/A
3. Objections of directors to related issues of the company
Whether the directors challenge the company's related issues?
□ Yes No
During the reporting period, no director raised objections to the company's related issues.
4. Other information on directors' performance of duties
Whether director's proposals on the company issues are accepted?
Yes □ No
Note on the acceptance or rejection of director's proposals on company issues.
During the reporting period, the directors performed their duties with integrity, diligence, conscientiousness, and
loyalty according to "Company Law", "Securities Law", "Code of Corporate Governance for Listed Companies" and
relevant laws and regulations, and "Articles of Association", "Rules of Procedure of the Board of Directors" and other
regulations and requirements, actively participated in corporate governance and decision-making on significant
matters, and provided professional opinions on the Company's sustainable development. All the directors performed
their duties with diligence, and played a due role in safeguarding the interests of the Company and shareholders,
especially the public shareholders. The Company has listened actively and adopted the reasonable suggestions of
directors.
VII. Performance of the Special Committee Under the Board of Directors During
the Reporting Period
Number Offered The
Details of
Committee of Date of Important Performance
Members Meeting Content Objections
Name Meetings Conference Ideas and of the Others
(if any)
Held Suggestions Duties
Audit Liu Hanlin, April 12, Review "2021
4
Committee Chen 2022 Annual
133
Ailing, Cao Financial
Yanlong Report" and
"Report for the
First Quarter of
2022” and other
issues
Review “2022
August 12, Semi-Annual
2022 Report” and
other issues
Review "Report
October for the Third
24, 2022 Quarter of 2022”
and other issues
Deliberated and
arranged the
audit matters in
December
the annual
30, 2022
report and
internal audit
matters
Deliberated and
March 30, verified the
2022 equity incentive
issues in 2022
Deliberated and
Zhang
determined the
Xingming
remunerations
(left office
Remuneration for the directors,
on
and Appraisal 2 supervisors, and
December
Committee the senior
16, 2022), April 12,
executives, the
Liu Hanlin, 2022
repurchase and
Zhang Yuli
cancellation of
restricted
shares under
equity-based
incentives
Deliberated and
Cao
verified the data
Nomination Yanlong, December
1 of the appointed
Committee Liu Hanlin, 16, 2022
senior
Fu Liquan
executives
Fu Liquan,
Zhang Yuli,
Wu Jun, Review
Zhang Company
Strategy April 12,
Xingming 1 Development
Committee 2022
(resigned Strategy of Year
on 2022
December
16, 2022)
VIII. Performance of the Supervisory Committee
Has the supervisory board discovered any risk in the company during the supervision in the reporting period
134
□ Yes No
The supervisory board had no objection to the supervisory matters in the report period.
IX. Employees in the Company
1. Number, profession composition and educational background of the employees
Number of incumbent employees in the parent company
12,376
at the end of the reporting period (person)
Number of incumbent employees in major subsidiaries at
11,211
the end of the reporting period (person)
Total number of incumbent employees at the end of the
23,587
reporting period (person)
Number of employees receiving salaries in current period
23,587
(person)
Number of retired employees requiring the parent
7
company and major subsidiaries to bear their costs
Profession composition
Number of employees for profession composition
Type of profession composition
(person)
Salesperson 4,903
R&D personnel 12,219
Management personnel 416
Supply chain 4,315
Professional support staff 1,734
Total 23,587
Educational background
Type of educational background Number of employees (person)
Master and above 4,077
Bachelor 13,193
College, technical secondary school 3,224
Others 3,093
Total 23,587
2. Remuneration policies
The Company has established complete remuneration management systems and incentive mechanisms in strict
accordance with Labor Law, Labor Contract Law and other relevant laws and regulations, departmental rules, and
normative documents, providing the employees with competitive remunerations. The Company links its remuneration
system and performance appraisal system with the business performance of the Company, which fully arouses the
enthusiasm of the employees and effectively improves the executive force and responsibility consciousness of
employees, thus better attracting and retaining talents and providing guarantee for sustainable, stable development of
the Company in respect of human resources.
3. Training plan
The Company has been dedicated to the building of employee education and training system, established the
internal lecturer management measures including new employee training and in-service employee training,
135
implemented training credits management system, improved the comprehensive quality of the Company's employees,
created good leaning atmosphere, established learning organization and comprehensively helped employees to
improve their ability to meet challenges and reforms in the future, thus providing powerful talent guarantee and support
for sustainable, fast growth of the Company and achieving joint development of employees and the Company.
4. Labor outsourcing
□ Applicable Not applicable
X. Profits Distribution of the Company and Capitalization of Capital Reserves
Profits Distribution policies during the reporting period, especially the formulation, implementation, or adjustment of the
cash dividend policies
Applicable □ Not applicable
The Company held the 2021 Annual General Meeting of Shareholders on May 16, 2022, at which the Company
deliberated and approved the 2021 profit distribution plan: Based on total share capital of 2,994,550,730 shares, cash
dividend of RMB 2.70 (tax included) for each 10 shares was distributed to all shareholders, with a total amount of RMB
808,528,697.10, and no bonus share issued and no capitalization of capital reserves. Such profit distribution plan was
implemented completely on June 1, 2022.
Special notes on cash dividend policies
Whether they comply with the requirements of the
Company's articles of incorporation or the resolutions of Yes
the General Meeting of Shareholders:
Whether the dividend standards and proportions are
Yes
distinct and clear:
Whether the relevant decision-making procedures and
Yes
mechanisms are complete:
Whether the independent directors performed their duties
Yes
and played their due role:
Whether the minority shareholders have the opportunity
to fully express their opinions and appeals, and whether
Yes
their legitimate rights and interests have been fully
protected:
Whether relevant conditions and procedures are
compliant and transparent when the cash dividend No adjustments or changes on cash dividend policies
policies are being adjusted or changed:
The Company's profits during the reporting period and the parent company's shareholders' profits distribution are
positive but a cash dividend distribution preplan is not proposed.
□ Applicable Not applicable
Profit Distribution and Capital Reserve Converted to Share Capital in the Reporting Period
Applicable □ Not applicable
Number of bonus shares per 10 shares (shares) 0
Number of dividend payout per 10 shares (RMB) (tax
2.41
included)
Equity base in the distribution preplan (shares) 3,326,264,570
136
The amount of cash dividends (yuan) (including tax) 801,629,761.37
The amount of cash dividends (yuan) in other ways (such
0.00
as share repurchase)
The total amount of cash dividends (including in other
801,629,761.37
ways) (yuan)
Distributable profits (RMB) 18,562,292,103.53
The ratio of the total amount of cash dividends (including
100%
in other ways) to the total amount of profit distribution
Latest cash dividend
If the Company's development stage is not easy to define but there are significant capital expenditure arrangements,
when the profits are being distributed, the proportion of the cash dividends in this profit distribution should be at least
20%
Details of the preplans on profit distribution or capitalization of capital reserves
Based on the latest total capital of 3,326,264,570 shares, the company will distribute RMB 2.41 (tax-inclusive) to all
shareholders for every 10 shares, with a total cash dividend of RMB 801,629,761.37, and no bonus share will be given
and no capitalization of capital reserves. The undistributed profits will be carried forward to the next year. If the total
capital stock changes due to convertible bonds into equity, share repurchase, equity incentive exercise, listing of new
shares through refinancing and other reasons before implementation of the distribution plan, the company will adjust
the proportion of distribution on the principle of keeping total amount unchanged. The matter shall be implemented
after being deliberated and approved at the general meeting of shareholders
XI. Implementation of the Company's Equity Incentive Plan, Employee Stock
Ownership Plan or Other Employee Incentive Measures
Applicable □ Not applicable
1. Equity incentive
1. On April 2, 2022, "2022 Stock Options and Restricted Stock Incentive Plan (Draft)" and its Abstracts were reviewed
and approved at the 27th session of the 7th Board of Directors and the 17th session of the 7th Board of Supervisors. It
was proposed to adopt the Stock Option Incentive Plan to grant a total of 74.864 million share options to 4,345
incentive objects of the Company at the exercise price of RMB 16.86 yuan/share, and it is proposed to adopt the
Restricted Stock Incentive Plan to grant a total of 74.864 million restricted shares to 4,345 incentive objects at the
grant price of RMB 8.43 yuan/share.
On May 16, 2022, "2022 Stock Options and Restricted Stock Incentive Plan (Draft)" and its Abstracts were reviewed
and approved at the General Meeting of Shareholders, authorizing the Board of Directors to handle the matters related
to the Company's stock incentive plan.
2. On April 22, 2022, the "Proposal on the Repurchase and Cancellation of Certain Restricted Shares (I)" and the
"Proposal on the Repurchase and Cancellation of Certain Restricted Shares (II)" were reviewed and approved at the
30th meeting of the 7th Board of Directors and the 20th meeting of the 7th Board of Supervisors. It was agreed to
repurchase and cancel the restricted shares of first grant of the third period and the reserved grant of the second
period of the 2018 Restricted Stock Incentive Plan, which have not reached the conditions for release and that have
been granted but not yet unlocked by the incentive objects who have resigned, as well as the restricted shares of the
second period of the 2020 Restricted Stock Incentive Plan, which have not reached the conditions for release. A total
of 36,127,260 restricted shares held by 2,899 incentive objects were repurchased and canceled. On May 17, 2022, the
"Proposal on the Repurchase and Cancellation of Certain Restricted Shares (I)" and the "Proposal on the Repurchase
and Cancellation of Certain Restricted Shares (II)" were reviewed and approved at the General Meeting of
Shareholders. The relevant cancellation was completed and disclosed on August 24, 2022.
137
3. On June 27, 2022, the "Proposal on Adjusting Matters Related to 2022 Stock Option and Restricted Stock Incentive
Plan" and the "Proposal on Granting Stock Option and Restricted Stock to Incentive Objects" were reviewed and
approved at the 32nd meeting of the 7th Board of Directors and the 22nd meeting of the 7th Board of Supervisors.
Since some previous incentive objects no longer meet the incentive conditions due to their resignation, and some has
given up due to personal reasons, the subscription of stock options and restricted shares granted by the Company,
The Company adjusted the number of incentive objects and the quantity of rights and interests granted in this incentive
plan. The number of incentive objects to be granted in the incentive plan has been adjusted from 4,345 to 4,265, and
the total number of shares to be granted has been adjusted from 149,728,000 to 149,715,100, of which the number of
stock options to be granted has been adjusted from 74.864 million to 74.8585 million, and the number of restricted
shares has been adjusted from 74.864 million to 74.8566 million. Since the Company has implemented 2021 annual
equity distribution, the exercise price of stock options has been adjusted from RMB 16.86 yuan/share to RMB 16.59
yuan/share, and the grant price of restricted shares has been adjusted from RMB 8.43 yuan/share to RMB 8.16
yuan/share. At the same time, the Board of Directors confirmed the grant conditions and considered that the grant
conditions had been met. Therefore, it was determined to grant stock options and restricted stocks to the incentive
objects The incentive award date is June 27, 2022.
On July 12, 2022, the Company disclosed the "Announcement on the Completion of the Registration of Granted Stock
Options under the 2022 Stock Option and Restricted Stock Incentive Plan" and the "Announcement on the Completion
of the Registration of Granted Restricted Stock under the 2022 Stock Option and Restricted Stock Incentive Plan"，in
which 74,735,300 stock options granted to 4,249 objects were registered on July 11, 2022, and the 74,737,700
restricted shares granted to 4,249 objects were listed on Shenzhen Stock Exchange on July 15, 2022.
Share incentives for the Company's directors, supervisors, and senior executives
Applicable □ Not applicable
Unit: share
Num
Num
Num Num The Num ber of
Num ber of Num
ber ber exercis Num ber of restri
ber stock Market Num ber of
of of e price ber of restri cted The
of optio price at ber restri
vesti vest of the stock cted stock grantin
stock ns the of cted
ng ed vested optio stock s g price
optio newly end of unlo stock
shar shar shares ns s newly of
Nam ns grant the cked s
Post es es during held held grant restrict
e held ed reporti shar held
durin durin the at the at the ed ed
at the durin ng es in at the
g the g the reporti end begin durin stocks
begin g the period this end
repo repo ng of the ning g the (yuan/s
ning repor (yuan/s perio of the
rting rting period perio of the repor hare)
of the ting hare) d perio
perio perio (yuan/s d perio ting
year perio d
d d hare) d perio
d
d
Vice
Wu 78,00
Chair 0 0 0 0 0 0 11.31 0 0 0 0
Jun 0
man
Direc
tor,
Zhao
Exec 544,0 544,0 1,202 816,0 816,0
Yuni 0 0 0 0 11.31 0 8.43
utive 00 00 ,000 00 00
ng
Presi
dent
Liu Seni 424,0 424,0 574,2 636,0 636,0
0 0 0 0 11.31 0 8.43
Ming or 00 00 00 00 00
138
Vice
Presi
dent
Seni
or
Li 424,0 424,0 711,0 636,0 636,0
Vice 0 0 0 0 11.31 0 8.43
Zhijie 00 00 00 00 00
Presi
dent
Seni
or
Song 364,0 364,0 546,0 546,0
Vice 0 0 0 0 11.31 0 0 8.43
Ke 00 00 00 00
Presi
dent
Secr
etary
of the
Boar
Wu d, 424,0 424,0 669,0 636,0 636,0
0 0 0 0 11.31 0 8.43
Jian Seni 00 00 00 00 00
or
Vice
Presi
dent
CFO,
Seni
Xu
or 364,0 364,0 669,0 546,0 546,0
Qiaof 0 0 0 0 11.31 0 8.43
Vice 00 00 00 00 00
en
Presi
dent
Seni
Xu or
424,0 424,0 669,0 636,0 636,0
Zhic Vice 0 0 0 0 11.31 0 8.43
00 00 00 00 00
heng Presi
dent
Seni
Zhu or
424,0 424,0 896,0 636,0 636,0
Jiant Vice 0 0 0 0 11.31 0 8.43
00 00 00 00 00
ang Presi
dent
3,392 3,392 5,468 5,088 5,088
Total -- 0 0 0 -- -- 0 --
,000 ,000 ,200 ,000 ,000
Evaluation and Incentive Mechanisms for Senior Management
Top management of the Company shall be evaluated by the performance commitments of senior management
and the department managers and those above shall be evaluated by their work report at the end of the year. The
managers have made a system of responsibility for business objectives in their term of office, and formulated the
assessment method in which the company-level KPI index commitments are combined with individual performance
commitments. They have met these indexes, meaning that they are able to complete their respective tasks in the latest
term of office. The Company will increase their remuneration or adopt other incentive measures, as appropriate, based
on their completion of objectives.
2. Implementation of employee stock ownership plan
□ Applicable Not applicable
139
3. Other employee incentive measures
□ Applicable Not applicable
XII. Development and Implementation of Internal Control System During the
Reporting Period
1. Development and implementation of internal control system
The Company has established and effectively implemented a sound internal control system in accordance with
the "Basic Norms of Enterprise Internal Control" and its supporting guidelines, as well as other internal control
regulatory requirements, and in light of the Company's current situation. The internal control system covers all
business links related to financial reporting and information disclosure affairs in the company's business activities,
including the Rules of Procedure of the Board of Directors, Rules of Procedure of the Board of Supervisors,
Supervision and Management of Subsidiaries, Seal Management, Investment and Financing Management, Human
Resources Management, Information System Management, Capital Activities, Procurement Management, Asset
Management, Sales and Collection Management, Cost and Expense Management, Information System Security
Management, and Information Disclosure Affairs Management.
The Company has set up the Audit Committee under the board of directors, leading internal audit institutions, to
inspect and supervise the establishment and implementation of the company's internal control, and to conduct
systematic internal audit and supervision of the Company's economic activities. The Company has established a "risk-
oriented, system-based, process-bonded, control-enabled, and IT-supported" risk management system framework to
fully support the corporate strategies. Through identifying risks and evaluating their levels in terms of severity,
likelihood, and effectiveness of existing measures, we improve the hierarchical decision-making authorization system
according to the acceptable level of risks, establish or optimize systems and processes, promote the IT-supported
processes and other control activities, and complete process systems, to comprehensively address the internal and
external risks that may be foreseen in production and operation activities. The Company emphasizes the cultivation of
risk awareness and regularly organizes risk management training for all departments, so as to strengthen the
Company's risk warning and handling capabilities and develop the risk control awareness among all staff.
According to the identification of material weaknesses in the financial reporting internal control of the Company, as
of the base date of the internal control assessment report, there is no material weakness in the internal control over
financial reports, and the Company has maintained effective internal control on financial reports in all material aspects
in accordance with the requirements of the enterprise internal control system and relevant regulations. According to
the identification of material weaknesses in non-financial reporting internal control of the Company, no material
weaknesses in non-financial reporting internal control were found as of the base date of the internal control
assessment report.
2. Details of material weakness in internal control found during the reporting period
□ Yes No
XIII. Company's Management of Subsidiaries During the Reporting Period
Problems Subsequent
Company Reorganization Progress of Adopted Progress of
Encountered in Settlement
Name Plan Reorganization Solutions Solution
Reorganization Plan
140
Not Not Not Not
Not applicable. Not applicable. Not applicable.
applicable. applicable. applicable. applicable.
XIV. Internal Control Self-Evaluation Report and Internal Control Audit Report
1. Internal control self-evaluation report
Date of full-text disclosure for internal
April 28, 2023
control assessment report
Full-text disclosure index for internal
http://www.cninfo.com.cn
control assessment report
Percentage of total asset from units
included in the assessment out of the
100.00%
total asset from the company's
consolidated financial statements
The proportion of operating revenue
of parties included in the assessment
to the operating revenue from the 100.00%
Company's consolidated financial
statements
Defect identification criteria
Category Financial Report Non-financial reports
Signs of material weakness in The identification of non-financial
financial reporting include: report defects is mainly determined
(1) Corrupt practices of directors, by the extent of their influence on
supervisors, and senior managers of validity of business process and the
the Company; probability of occurrence.
(2) Material misstatements in the If the defect is less likely to occur,
current Financial Report discovered which may reduce the work efficiency
by the Certified Public Accountants or result, or with a greater
but not recognized by the internal uncertainty, or make it deviate from
control of the Company; the expected goal, then it should be
(3) Invalid internal control and defined as a common defect;
supervision of the External Financial If the defect is likely to occur and will
Report and the Financial Report of significantly lower the work efficiency
the Company by the Audit Committee or effect, significantly increase the
and the Audit Department. uncertainty, or make it deviate from
Signs of significant deficiencies in the expected goal, then it is a
Qualitative standards
financial reporting include: significant defect. If the defect is
(1) Failure to select and apply the likely to occur and will seriously lower
accounting policies in accordance the work efficiency or effect, or
with the accepted accounting seriously increase the uncertainty, or
standards; make it seriously deviate from the
(2) Failure to establish anti-fraud expected goal, then it is a major
procedure and control measures; defect.
(3) No appropriate control Signs of material weakness in non-
mechanism established or financial reporting internal control
appropriate compensating control include:
implemented for accounting 1) The decision-making procedures
treatment of irregular or special of the Company are not scientific,
transactions; such as decision-making errors,
(4) There are one or more defects in causing failure to meet the desired
the control of final financial reporting objectives after mergers and
process, and no reasonable acquisitions.
141
guarantee that the financial 2) Violation of national laws and
statements can achieve the goal of regulations, resulting in investigation
being true and complete. by relevant departments and
General deficiencies refer to the regulatory bodies;
control deficiencies other than the 3) Loss of management personnel or
material deficiencies and important key technical personnel;
deficiencies described above. 4) Frequent negative news in the
media;
5) The results of internal control
assessment, especially major or
important deficiencies, have not been
rectified;
6) Lack of system control or
systematic failure of major business.
See the follows for the quantitative
standards established by the
Company for the appraisal on the
internal control defects uncovered by
Losses which have been or may be
the financial reports
incurred due to internal control
The quantitative criteria are based on
deficiencies and are related to the
operating revenue and total assets.
profit statement should be measured
Losses which have been or may be
by the operating revenue indicators.
incurred due to internal control
If the misreporting amount in the
deficiencies and are related to the
financial statement, which may be
profit statement should be measured
incurred by the deficiencies alone or
by the operating revenue indicators If
together with other deficiencies, is
the misreporting amount in the
less than 0.5% of the operating
financial statement, which may be
revenue, it is considered as a general
incurred by the deficiencies alone or
defect; If it exceeds 0.5% of the
together with other deficiencies, is
operating revenue but is less than
less than 0.5% of the operating
1%, then it is an significant defect; If
revenue, it is considered as a general
it exceeds 1% of the operating
defect; If it exceeds 0.5% of the
revenue, then it is considered as a
operating revenue but is less than
Quantitative standards major defect.
1%, then it is an significant defect; If
Losses which have been or may be
it exceeds 1% of the operating
incurred due to internal control
revenue, then it is considered as a
deficiencies and are related to the
major defect.
asset management should be
Losses which have been or may be
measured by the total asset
incurred due to internal control
indicators. If the misstated amount in
deficiencies and are related to the
the financial statement, which may
asset management should be
be incurred by the defect alone or
measured by the total asset
together with other deficiencies, is
indicators. If the misstated amount in
less than 0.5% of the total asset, it is
the financial statement, which may
considered as a general defect; If it
be incurred by the defect alone or
exceeds 0.5% of the total asset but
together with other defects, is less
less than 1%, it is an important
than 0.5% of the total asset, it is
defect; If it exceeds 1% of the total
considered as a common defect; If it
asset, it is considered as a major
exceeds 0.5% of the total asset but is
defect.
less than 1%, then it is considered as
an important defect; If it exceeds 1%
of the total asset, it is considered as
a major defect.
Number of material weakness in
0
financial reports
Number of material weakness in non- 0
142
financial reports
Number of significant deficiency in
0
financial reports
Number of significant deficiency in
0
non-financial report
2. Internal control audit report
Applicable □ Not applicable
Deliberations Paragraph in the Internal Control Audit Report
In our opinion, Dahua has maintained effective internal control, in all material respects, with respect to the financial
statements in accordance with the "Basic Norms of Enterprise Internal Control" and relevant important regulations
promulgated on December 31, 2022.
Disclosure in the internal control audit report Disclosure
Date of full-text disclosure for the internal control audit
April 28, 2023
report
Full-text disclosure index for the internal control audit
http://www.cninfo.com.cn
report
Opinion type in the internal control audit report Standard unqualified opinion
Whether there are material deficiencies in the non-
No
financial reports
Whether the accounting firm has issued an internal control audit report with modified opinions
□ Yes No
Whether the opinions in the internal control audit report issued by the accounting firm are consistent with those in the
self-evaluation report issued by the board of directors
Yes □ No
XV. Rectification of Self-inspection Problems of Special Actions for Corporate
Governance of Listed Companies
N/A
143
Section V Environmental and Social Responsibilities
I. Major Environmental Issues
Whether the listed company and its subsidiaries belong to the key pollutant discharging units announced by the
environmental protection department
□ Yes No
II. Social Responsibilities
For details, refer to the "2022 Social Responsibility Report" and the "2022 Annual Environmental, Social and
Governance Report" published on www.cninfo.com.cn () on the same day.
III. Consolidation and Expansion of Poverty Alleviation Achievements and Rural
Revitalization
In the reporting period, there have been no targeted poverty alleviation and rural revitalization activities in the
Company.
144
Section VI Significant Events
I. Performance of Commitments
1. Commitments that have been fulfilled by the Company's actual controller(s), shareholders,
related parties, acquirers, the Company and the relevant parties during the reporting period
and those that have not been fulfilled by the end of the reporting period
Applicable □ Not applicable
Party making Commitment
Commitments Content Time Term Performance
commitments Type
The number of shares
transferred each year during
his/her term of service shall
not exceed 25 percent of the
total number of shares he/she
Commitments holds in the Company; he/she
Fu Liquan,
made during Commitment shall not transfer his/her July Being
Chen Ailing, Long-
initial public on restricted shares in the Company within 15, fulfilled
Wu Jun, Zhu term
offerings or shares half a year after he/she leaves 2007 normally
Jiangming
refinancing the Company; within the next
twelve months, the number of
shares sold through the stock
exchange listing transactions
shall not exceed 50% of the
total shares he/she holds.
Commitments
Commitment to practical
made during All directors March Being
Other fulfilment of the measures for Long-
initial public and senior 26, fulfilled
commitments return filling involved in non- term
offerings or executives 2021 normally
public offering
refinancing
Commitments
Commitment to practical
made during March Being
Fu Liquan, Other fulfilment of the measures for Long-
initial public 26, fulfilled
Chen Ailing commitments return filling involved in non- term
offerings or 2021 normally
public offering
refinancing
(1) He/she will not directly
engage in operational activities
that constitute horizontal
competition with the stock
company's business; (2) for
companies he/she held or
Other
indirectly held, he/she will fulfill
commitments to Commitment June Being
Fu Liquan, the obligations under this Long-
minority on horizontal 30, fulfilled
Chen Ailing commitment through agencies term
shareholders of competition 2007 normally
and personnel (including but
the Company
not limited to directors and
managers); (3) if the stock
company further expands its
range of products and
business scope, he/she and
the company held by him/her
145
will not compete with the
expanded range of products or
businesses of the stock
company.
Whether the commitment is fulfilled on time Yes
Where the commitment is overdue, the specific
reasons for not completing the performance and Not applicable.
the following work plan shall be explained in detail
2. If there is a profit forecast for the Company's assets or projects, and the reporting period is
still within the profit forecast period, the Company shall make an explanation on the fulfillment
and its reasons
□ Applicable Not applicable
II. Non-operational capital occupation over listed companies by controlling
shareholders and their related parties
□ Applicable Not applicable
During the reporting period, there is no non-operational capital occupation over listed companies by controlling
shareholders and their related parties.
III. Illegal external guarantees
□ Applicable Not applicable
No illegal external guarantees during the reporting period.
IV. Statement by the Board of Directors on the "Non-Standard Audit Report" of the
Last Period
□ Applicable Not applicable
V. Explanations Made by the Board of Directors, the Board of Supervisors, and
Independent Directors (If Any) on the "Non-standard Audit Report" from the
Accounting Firm during the Reporting Period
□ Applicable Not applicable
VI. Changes in Accounting Policies and Accounting Estimates or Correction of
Significant Accounting Errors Compared with the Previous Year's Financial Report
Applicable □ Not applicable
For changes in the accounting policies and accounting methods of the Company during the reporting period, refer to
"Section X Financial Report / V. Significant Accounting Polices and Accounting Estimates / 36. Changes in Significant
Accounting Policies and Accounting Estimates"
146
VII. Changes in the Scope of Consolidated Financial Statements Compared with
the Previous Year's Financial Report
Applicable □ Not applicable
(1) The Company invested to establish 10 domestic subsidiaries including Zhejiang Pixfra Technology Co., Ltd., Yiwu
Huaxi Technology Co., Ltd., Zhejiang Dahua Intelligent IOT Operation Service Co., Ltd., Nanyang Dahua Intelligent
Information Technology Co., Ltd., Yibin Huahui Information Technology Co., Ltd., Chengdu Huazhiwei Technology Co.,
Ltd., Xi'an IMOU Zhilian Technology Co., Ltd., Luoyang Dahua Zhiyu Information Technology Co., Ltd., Zhejiang Huaqi
Intelligent Technology Co., Ltd. and Chengdu Dahua Wisdom Information Technology Co., Ltd., and 5 overseas
subsidiaries including Dahua Technology Middle East for Maintenance Single Person Company, Dahua Technology
Bangladesh Private Limited, IMOU NETWORK TECHNOLOGY AUSTRALIA PTY LTD, and CNG TY TNHH CNG
NGH IMOU NETWORK VIT NAM and HUARAY TECHNOLOGY SINGAPORE PTE. LTD. The above subsidiaries
have been incorporated into the scope of merger since the date of establishment.
(2) In this period, the Company transferred 90% of the equity of Sichuan Dahua Guangxun Photoelectric Technology
Co., Ltd. The shareholding decreased from 100% to 10% after such transfer. It no longer has control over the
company, and therefore it was not included in the scope of merger any more since the date of transfer.
(3) In this period, the Company transferred 29.56% of the equity of Zhejiang Huachuang Vision Technology Co., Ltd. it
held. The shareholding decreased from 51% to 21.44% after such transfer. It no longer has control over the company,
and therefore it was not included in the scope of merger any more since the date of transfer.
(4) The Company transferred 100% equities of Lorex Technology Inc., Lorex Corporation and Lorex Technology UK
Limited held by it during the current period. The said companies shall not be included in the consolidated statements
as of the date of transfer.
VIII. Appointment and Dismissal of Accounting Firms
Currently appointed accounting firms
BDO China Shu Lun Pan CPAs (special general
Names of domestic accounting firms
partnership)
Remuneration to domestic accounting firms (Unit: RMB
200
ten thousand)
Years of continuous audit service of domestic accounting
19
firms
Names of Certified Public Accountants from domestic
Zhong Jiandong, Zhang Junhui
accounting firms
Zhong Jiandong has been in service for 5 consecutive
The continuous period of audit service for certified public
years, and Zhang Junhui has been in service for 3
accountants in domestic accounting firms
consecutive years
Whether to reappoint accounting firms for current period
□ Yes No
Appointment of accounting firms, financial advisers, or sponsors for internal control auditing
Applicable □ Not applicable
During the reporting period, the Company hired BDO China Shu Lun Pan CPAs (special general partnership) as the
internal control audit accounting firm, and paid a total of RMB 400,000 for internal control audit during this period.
147
IX. Delisting after Disclosure of the Annual Report
□ Applicable Not applicable
X. Bankruptcy and Restructuring
□ Applicable Not applicable
No such case as bankruptcy and reorganization related event during the reporting period.
XI. Significant Lawsuits and Arbitrations
□ Applicable Not applicable
There is no major lawsuit or arbitration during this reporting period.
XII. Penalties and Rectification
□ Applicable Not applicable
No such case as penalty and rectification during the reporting period.
XIII. Integrity of the Company, Its Controlling Shareholders and Actual Controllers
□ Applicable Not applicable
XIV. Significant Related-party Transactions
1. Related transactions relevant to daily operations
□ Applicable Not applicable
No such case as significant related-party transactions connected with daily operations.
2. Related transactions in acquisition or sale of assets or equities
Applicable □ Not applicable
For details, see "7. Other significant related-party transactions" in this section.
3. Significant related-party transactions arising from joint investments on external parties
Applicable □ Not applicable
For details, see "7. Other significant related-party transactions" in this section.
4. Related-party creditor's rights and debts
□ Applicable Not applicable
No such case as related credits and debts during the reporting period.
148
5. Transactions with related financial companies
□ Applicable Not applicable
No deposit, loan, credit or other financial business between the Company and the related financial company and the
related parties.
6. Transactions between the financial company controlled by the Company and the related
parties
□ Applicable Not applicable
There are no deposit, loan, credit, or other financial business between the financial company controlled by the
Company and the related parties.
7. Other significant related-party transactions
Applicable □ Not applicable
1. On February 16, 2022, the Company held the 26th Meeting of the 7th Board of Directors, deliberated and approved
the Proposal on Adjusting Related Matters and Related Transactions of Industrial Fund, agreeing that the subscribed
capital of Zhoushan Huayan Chuangxi Equity Investment Partnership (Limited Partnership) jointly invested by the
Company and Related Parties would be increased from RMB 150.1 million to RMB 258.01 million, where some original
partners increased their capital contributions and four new limited partners were added. The Company has not
increased its capital contribution this time. After the change, the Company capital contribution proportion is changed
from 33.32% to 19.38%.
2. On April 22, 2022, meeting the "Proposal on Giving up the Subsidiary's Right of First Refusal(ROFR) and Related-
party Transactions" was reviewed and approved at the 30th meeting of the 7th Board of Directors, where Zhang Hui,
the shareholder of Zhejiang Huafei Intelligent Technology Co., Ltd.(the Company’s holding subsidiary), transferred his
13.50% equity to Ningbo Hualing Venture Capital Investment Partnership (Limited Partnership) at a price of RMB
15,903,000 and the Board of Directors agreed that the Company may give up the right of first refusal.
3. The Company held the 35th meeting of seventh Board of Directors on October 28, 2022, at which the Proposal on
Transferring the Equities of the Controlled Subsidiary and Abandoning the Preemptive Right and Related Transactions
was deliberated and approved. The Board of Directors of the Company agreed to transfer 29.56% equities of Zhejiang
Huachuang Vision Technology Co., Ltd. (hereinafter referred to as “Huachuang Vision”), one of the Company’s
controlled subsidiaries, to five external investors such as Hangzhou Zhechuang Qizhi Equity Investment in Emerging
Industries Partnership (a limited partnership) at the price of RMB 153.7 million. Meanwhile, the Board of Directors
agreed that Ningbo Huayu Investment Management Partnership Enterprise (Limited Partnership), another shareholder
of Huachuang Vision, would transfer Huachuang Vision’s 49% equities to the external investors and Huachuang
Vision’s management team, and abandoned the relevant right of first refusal(ROFR).
4. The Company held the 38th meeting of the seventh Board of Directors and the 26th meeting of the seventh Board of
Supervisors on December 23, 2022, at which the Company deliberated and approved Proposal on the Implementation
of Equity Incentive Plan and Related Transactions of the Controlled Subsidiary and agreed that Zhejiang HuaRay
Technology Co., Ltd. (“HuaRay Technology”), one of the Company’s controlled subsidiaries, would propose to offer an
equity-based incentive for its management and core employees by means of capital and share increase. By
149
participating in this equity incentive, the incentive objects will increase the total capital of RMB 16,328,500 (of which
RMB 4,830,918 shall serve as the increased registered capital, and the rest shall be included into capital reserve) to
HuaRay Technology directly or through Hangzhou Jurui Lingba Enterprise Management Partnership (a limited
partnership), an employee shareholding platform, of which Mr. Zhang Xingming, the Company’s former director and
senior executive, will directly invest RMB 4,082,100 to HuaRay Technology (corresponding to the increased registered
capital of RMB 1,207,730).
Website for disclosing the interim report on significant related-party transactions
Announcement name Disclosure date Website for the disclosure
Announcement on Adjusting Matters
Juchao Information Network
Related to Industrial Funds and February 17, 2022
http://www.cninfo.com.cn/
Related Transactions
Announcement on Giving up the
Subsidiary's Priority to Accept Juchao Information Network
April 23, 2022
Transfer and Related-party http://www.cninfo.com.cn/
Transactions
Announcement on Equity Transfer of
Holding Subsidiaries and Waiver of Juchao Information Network
October 29, 2022
Preemptive Right, and Related http://www.cninfo.com.cn/
Transactions
Announcement on the
Implementation of Equity Incentive Juchao Information Network
December 24, 2022
Plan and Related Transactions at the http://www.cninfo.com.cn/
Controlled Subsidiary
XV. Significant Contracts and Performance
1. Matters on trusteeship, contracting, and leasehold
(1) Matters on trusteeship
□ Applicable Not applicable
No such case as custody during the reporting period.
(2) Contracting
□ Applicable Not applicable
No such case as contracting during the reporting period.
(3) Leasing
Applicable □ Not applicable
Explanations on leases
During the reporting period, some of the Company's own real estate properties were used for rental, and there are no
other leases of major property except for the leased real estate property used for office, warehouse, and production
workshops.
Cases that brought the profit and loss accounted for more than 10% of the Company's total profit during the reporting
150
period
□ Applicable Not applicable
No such leases that brought the profit and loss accounted for more than 10% of the Company's total profit during the
reporting period.
2. Significant guarantees
Applicable □ Not applicable
Unit: RMB ten thousand
External guarantees from the Company and its subsidiaries (excluding guarantees to the subsidiaries)
Announceme
Guarante
nt date of Du
Actual Actual Type of e for
disclosure of Guarante Term of e
Guaranteed party occurrenc guarantee guarante related
the e amount guarantee or
e date amount e parties or
guarantee not
not
cap
Total amount of
Total amount of guarantees external guarantees
approved during the reporting actually occurred
period (A1) during the reporting
period (A2)
Total balance of
Total amount of external
external guarantees
guarantees approved by the end of
at the end of the
the reporting period (A3)
reporting period (A4)
Company's guarantees to subsidiaries
Announceme
Guarante
nt date of Du
Actual Actual Type of e for
disclosure of Guarante Term of e
Guaranteed party occurrenc guarantee guarante related
the e amount guarantee or
e date amount e parties or
guarantee not
not
cap
Joint
2019.06.26
2019.06.2 liability
18,000.00 - Yes No
6 guarante
2022.06.25
e
Two years
after the
Joint
maturity of
February liability
25,000.00 the debts Yes No
17, 2020 guarante
in the
e
master
contract
Two years
after the
Zhejiang Dahua Joint
October 22, 874,176.4 maturity of
Vision Technology April 13, liability
2022 6 24,000.00 the debts Yes No
Co., Ltd. 2020 guarante
in the
e
master
contract
Three
years after
Joint the
February liability maturity of
30,000.00 Yes No
23, 2021 guarante the debts
e in the
master
contract
May 12, Joint May 12,
8,000.00 Yes No
2021 liability 2021-
151
guarante December
e 31, 2022
Three
years after
Joint the
August 2, liability maturity of
50,000.00 Yes No
2021 guarante the debts
e in the
master
contract
Three
years after
Joint the
Septemb
liability maturity of
er 27, 60,000.00 Yes No
guarante the debts
2021
e in the
master
contract
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
Novembe liability date of
20,000.00 Yes No
r 10, 2021 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Two years
after the
Joint
maturity of
October liability
22,000.00 the debts No No
13, 2017 guarante
in the
e
master
contract
Two years
after the
Joint
Septemb 27,858.40 maturity of
liability
er 21, (USD 40 the debts No No
guarante
2018 million) in the
e
master
contract
Joint From April
April 7, liability 7, 2020 to
53,000.00 No No
2020 guarante March 31,
e 2024
Two years
after the
Joint
maturity of
August liability
60,000.00 the debts No No
12, 2020 guarante
in the
e
master
contract
Two years
Joint
after the
August liability
33,000.00 maturity of No No
18, 2020 guarante
the debts
e
in the
152
master
contract
Five years
upon
Joint
expiration
Septemb liability
30,000.00 of debt No No
er 1, 2020 guarante
period of
e
master
contract
Three
years after
Joint the
February 100,000.0 liability maturity of
No No
4, 2021 0 guarante the debts
e in the
master
contract
Three
years after
Joint the
July 26, liability maturity of
44,000.00 No No
2021 guarante the debts
e in the
master
contract
From
Joint
August 1,
August 1, liability
3,500.00 2021 to No No
2020 guarante
July 31,
e
2023
Three
years after
Joint the
Septemb
liability maturity of
er 27, 90,000.00 No No
guarante the debts
2021
e in the
master
contract
Three
years after
Joint the
October liability maturity of
20,000.00 No No
20, 2021 guarante the debts
e in the
master
contract
Three
years after
Joint the
June 10, liability maturity of
30,000.00 No No
2022 guarante the debts
e in the
master
contract
From
effective
date of the
Commitme
Joint nt Letter to
June 10, liability three years
20,000.00 No No
2022 guarante after the
e maturity
date of
each note
discounted
by the
153
China
Merchants
Bank within
the credit
extension
period
Three
years after
Joint the
July 22, liability maturity of
20,000.00 No No
2022 guarante the debts
e in the
master
contract
Three
years after
Joint the
July 25, liability maturity of
35,000.00 No No
2022 guarante the debts
e in the
master
contract
From
Joint
Septemb September
liability
er 19, 60,000.00 19, 2022 to No No
guarante
2022 September
e
18, 2024
One years
upon
Joint
expiration
April 29, liability
10,000.00 of debt Yes No
2021 guarante
period of
e
master
contract
One years
upon
Joint
41,787.60 expiration
April 29, liability
(USD 60 of debt Yes No
2021 guarante
million) period of
e
master
contract
Joint
38,305.30 April 30,
April 29, liability
(USD 55 2021-May Yes No
2021 guarante
million) 14, 2022
e
Three
Zhejiang Dahua August 27, 333,500.0 years after
Zhilian Co., Ltd. 2022 0 Joint the
Septemb
liability maturity of
er 27, 15,000.00 Yes No
guarante the debts
2021
e in the
master
contract
From
effective
date of the
Commitme
nt Letter to
Joint three years
Novembe liability after the
16,000.00 Yes No
r 10, 2021 guarante maturity
e date of
each note
discounted
by the
China
Merchants
154
Bank within
the credit
extension
period
From
Joint
16,715.04 December
Decembe liability
(USD 24 3, 2021 to Yes No
r 3, 2021 guarante
million) May 31,
e
2022
One years
upon
Joint
expiration
Decembe liability
3,500.00 of debt Yes No
r 3, 2021 guarante
period of
e
master
contract
Two years
after the
Joint
Septemb maturity of
liability
er 24, 30,000.00 the debts No No
guarante
2020 in the
e
master
contract
Three
years after
Joint the
July 26, liability maturity of
16,500.00 No No
2021 guarante the debts
e in the
master
contract
Three
years after
Joint the
Novembe liability maturity of
20,000.00 No No
r 10, 2021 guarante the debts
e in the
master
contract
From
Joint
3,482.30 December
Decembe liability
(USD 5 3, 2021 to No No
r 3, 2021 guarante
million) December
e
2, 2024
From
Joint
March 25,
March 25, liability
8,000.00 2022 to No No
2022 guarante
December
e
31, 2023
One years
upon
Joint
41,787.60 expiration
April 29, liability
(USD 60 of debt No No
2022 guarante
million) period of
e
master
contract
One years
upon
Joint
expiration
April 29, liability
1,000.00 of debt No No
2022 guarante
period of
e
master
contract
Joint From May
38,305.30
May 14, liability 14, 2022 to
(USD 55 No No
2022 guarante May 14,
million)
e 2023
155
Three
years after
Joint the
June 10, liability maturity of
16,000.00 No No
2022 guarante the debts
e in the
master
contract
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
16,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
20,000.00 - No No
25, 2022 guarante
2025.08.25
e
From
Joint
Septemb September
liability
er 19, 15,000.00 19, 2022 to No No
guarante
2022 September
e
18, 2024
Joint
15,322.12 2022.11.16
Novembe liability
(USD 22 - No No
r 16, 2022 guarante
million) 2023.05.14
e
Three
years after
Joint the
August 2, liability maturity of
5,000.00 Yes No
2021 guarante the debts
e in the
master
contract
From
effective
date of the
Zhejiang Dahua Commitme
System October 22, nt Letter to
23,700.00
Engineering Co., 2022 three years
Ltd. after the
Joint maturity
Novembe liability date of
4,000.00 Yes No
r 10, 2021 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
156
Two years
after the
Joint
maturity of
August liability
1,000.00 the debts No No
30, 2019 guarante
in the
e
master
contract
Three
years after
Joint the
Novembe liability maturity of
6,000.00 No No
r 10, 2021 guarante the debts
e in the
master
contract
Three
years after
Joint the
June 10, liability maturity of
4,000.00 No No
2022 guarante the debts
e in the
master
contract
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
4,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Three
years after
Joint the
July 25, liability maturity of
5,000.00 No No
2022 guarante the debts
e in the
master
contract
Joint
2022.08.25
August liability
500.00 - No No
25, 2022 guarante
2025.08.25
e
Joint
742.29 (1 April 25,
April 20, liability
million 2021-April Yes No
2021 guarante
Euros) 25, 2022
e
Dahua Technology April 23,
60,000.00 From
(HK) Limited 2022 Joint
1,392.92 March 25,
March 25, liability
(USD 2 2022 to No No
2022 guarante
million) March 25,
e
2023
DAHUA Joint October
3482.30
TECHNOLOGY April 23, October liability 21, 2021-
10,000.00 (USD 5 Yes No
MEXICO S.A. DE 2022 21, 2021 guarante October
million)
C.V e 20, 2022
157
Joint September
696.46
Septemb liability 1, 2021-
(USD 1 No No
er 1, 2021 guarante December
million)
e 1, 2023
Joint From
3,482.3
October liability 2022.10.21
(USD 5 No No
21, 2022 guarante to
million)
e 2023.10.20
Six months
upon
Joint
expiration
February liability
2,000.00 of debt Yes No
4, 2021 guarante
period of
e
master
contract
Three
years after
Joint the
February liability maturity of
10,000.00 Yes No
23, 2021 guarante the debts
e in the
master
contract
Three
years after
Joint the
Septemb
liability maturity of
er 27, 5,000.00 Yes No
Hangzhou guarante the debts
2021
Huacheng Network April 23, e in the
45,000.00
Technology Co., 2022 master
Ltd. contract
Two years
after the
Joint
maturity of
August liability
5,000.00 the debts No No
30, 2019 guarante
in the
e
master
contract
Three
years after
Joint the
July 26, liability maturity of
5,500.00 No No
2021 guarante the debts
e in the
master
contract
Joint
2022.08.25
August liability
6,500.00 - No No
25, 2022 guarante
2025.08.25
e
August 12,
973.72 Joint
2020 -
Dahua Technology April 23, August (GBP liability
2,000.00 Signature No No
UK Limited 2022 12, 2020 1.16 guarante
of notice of
million) e
termination
Joint November
975.04
Dahua Technology April 23, Novembe liability 19, 2021-
5,000.00 (USD 1.4 Yes No
USA Inc. 2022 r 19, 2021 guarante November
million)
e 18, 2022
Three
years after
Joint the
Zhejiang Huayixin 1,392.92
April 29, liability maturity of
Technology Co., May 17, 2022 4,323.54 (USD 2 Yes No
2021 guarante the debts
Ltd. million)
e in the
master
contract
158
Three
years after
Joint the
April 29, liability maturity of
1,000.00 No No
2022 guarante the debts
e in the
master
contract
Three
years after
Joint the
1,392.92
May 16, liability maturity of
(USD 2 No No
2022 guarante the debts
million)
e in the
master
contract
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
1,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
200.00 - No No
25, 2022 guarante
2025.08.25
e
From
Joint
October
October liability
800.00 21, 2022 to No No
21, 2022 guarante
September
e
18, 2024
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
Novembe liability date of
2,000.00 Yes No
r 10, 2021 guarante each note
e discounted
Zhejiang Fengshi
October 22, by the
Technology Co., 14,000.00
2022 China
Ltd.
Merchants
Bank within
the credit
extension
period
From
Joint effective
June 10, liability date of the
2,000.00 No No
2022 guarante Commitme
e nt Letter to
three years
159
after the
maturity
date of
each note
discounted
by the
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
10,000.00 - No No
25, 2022 guarante
2025.08.25
e
From
Joint
October
October liability
2,000.00 21, 2022 to No No
21, 2022 guarante
September
e
18, 2024
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
Novembe liability date of
1,000.00 Yes No
r 10, 2021 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Three
years after
Joint the
Jiangsu Huaruipin
October 22, October liability maturity of
Technology Co. 4,300.00 1,000.00 No No
2022 20, 2021 guarante the debts
Ltd.
e in the
master
contract
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
1,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
160
Joint
2022.08.25
August liability
800.00 - No No
25, 2022 guarante
2025.08.25
e
From
Joint
October
October liability
1,500.00 21, 2022 to No No
21, 2022 guarante
September
e
18, 2024
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
Novembe liability date of
500.00 Yes No
r 10, 2021 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
From
effective
date of the
Zhejiang Huaxiao Commitme
April 23,
Technology Co., 2,000.00 nt Letter to
2022
Ltd. three years
after the
Joint maturity
June 10, liability date of
1,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
200.00 - No No
25, 2022 guarante
2025.08.25
e
From
Joint
October
October liability
800.00 21, 2022 to No No
21, 2022 guarante
September
e
18, 2024
From
Joint
Septemb September
liability
er 27, 3,000.00 27, 2021 to Yes No
guarante
2021 September
e
18, 2022
Xi'an Dahua From
April 23,
Zhilian Technology 20,000.00 effective
2022
Co., Ltd. Joint date of the
Novembe liability Commitme
5,000.00 Yes No
r 10, 2021 guarante nt Letter to
e three years
after the
maturity
161
date of
each note
discounted
by the
China
Merchants
Bank within
the credit
extension
period
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
5,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
10,000.00 - No No
25, 2022 guarante
2025.08.25
e
From
Joint
October
October liability
2,500.00 21, 2022 to No No
21, 2022 guarante
September
e
18, 2024
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
Novembe liability date of
5,000.00 Yes No
r 10, 2021 guarante each note
e discounted
by the
China
Zhengzhou Dahua Merchants
Zhian Information April 23, Bank within
15,000.00
Technology Co., 2022 the credit
Ltd. extension
period
From
effective
date of the
Commitme
Joint nt Letter to
June 10, liability three years
5,000.00 No No
2022 guarante after the
e maturity
date of
each note
discounted
by the
162
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
3,000.00 - No No
25, 2022 guarante
2025.08.25
e
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
Novembe liability date of
5,000.00 Yes No
r 10, 2021 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
Chengdu Dahua extension
Zhian Information April 23, period
15,000.00
Technology 2022 From
Service Co., Ltd. effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
10,000.00 No No
2022 guarante each note
e discounted
by the
China
Merchants
Bank within
the credit
extension
period
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
1,000.00 No No
Changsha Dahua 2022 guarante each note
October 22,
Technology Co., 6,000.00 e discounted
2022
Ltd. by the
China
Merchants
Bank within
the credit
extension
period
Joint 2022.08.25
August
3,000.00 liability - No No
25, 2022
guarante 2025.08.25
163
e
From
Joint
October
October liability
2,000.00 21, 2022 to No No
21, 2022 guarante
September
e
18, 2024
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
500.00 No No
2022 guarante each note
Zhejiang Pixfra
April 23, e discounted
Technology Co., 1,000.00
2022 by the
Ltd.
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
500.00 - No No
25, 2022 guarante
2025.08.25
e
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
500.00 No No
Zhejiang Huafei 2022 guarante each note
Intelligent April 23, e discounted
1,000.00
Technology CO., 2022 by the
LTD. China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
200.00 - No No
25, 2022 guarante
2025.08.25
e
From
effective
date of the
Commitme
nt Letter to
three years
Joint
Zhejiang Huajian after the
April 23, June 10, liability
Technology Co., 1,000.00 500.00 maturity No No
2022 2022 guarante
Ltd. date of
e
each note
discounted
by the
China
Merchants
Bank within
164
the credit
extension
period
Joint
2022.08.25
August liability
200.00 - No No
25, 2022 guarante
2025.08.25
e
From
effective
date of the
Commitme
nt Letter to
three years
after the
Joint maturity
June 10, liability date of
500.00 No No
2022 guarante each note
Hangzhou Xiaohua
April 23, e discounted
Technology CO., 1,000.00
2022 by the
LTD.
China
Merchants
Bank within
the credit
extension
period
Joint
2022.08.25
August liability
200.00 - No No
25, 2022 guarante
2025.08.25
e
Zhejiang Dahua Joint
2022.08.25
Security Network April 23, August liability
1,000.00 500.00 - No No
Operation Service 2022 25, 2022 guarante
2025.08.25
Co., Ltd. e
Zhejiang Dahua
April 23,
Jinzhi Technology 1,000.00 No such case during the reporting period
2022
Co., Ltd.
Guangxi Dahua
Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Guangxi Dahua
April 23,
Technology Co., 1,000.00 No such case during the reporting period
2022
Ltd.
Anhui Dahua
Zhilian Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Anhui Dahua
Zhishu Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Chengdu Dahua
Zhilian Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Chengdu Dahua
Zhishu Information April 23,
1,000.00 No such case during the reporting period
Technology 2022
Service Co., Ltd.
Chengdu Huishan
Smart Network April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
165
Chengdu
Zhichuang Yunshu April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Hangzhou Fuyang
April 23,
Hua'ao Technology 1,000.00 No such case during the reporting period
2022
Co., Ltd.
Hangzhou
April 23,
Huacheng 1,000.00 No such case during the reporting period
2022
Software Co., Ltd.
Henan Dahua
Zhilian Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Hunan Dahua
Zhilong Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Tianjin Dahua
Information April 23,
1,000.00 No such case during the reporting period
Technology Co., 2022
Ltd.
Tianjin Huajian
April 23,
Technology Co., 1,000.00 No such case during the reporting period
2022
Ltd.
Yiwu Huaxi
April 23,
Technology Co., 1,000.00 No such case during the reporting period
2022
Ltd.
Zhejiang Dahua
Intelligent IoT April 23,
1,000.00 No such case during the reporting period
Operation Service 2022
Co., Ltd.
Zhejiang Huakong April 23,
1,000.00 No such case during the reporting period
Software Co., Ltd. 2022
Dahua Technology April 23,
No such case during the reporting period
Japan LLC 2022 100.00
DAHUA EUROPE April 23,
10,000.00 No such case during the reporting period
B.V. 2022
Dahua Technology April 23,
No such case during the reporting period
Singapore Pte.Ltd. 2022 200.00
Dahua Technology April 23,
2,000.00 No such case during the reporting period
Poland Sp.Zo.O. 2022
Dahua Technology April 23,
2,000.00 No such case during the reporting period
Hungary Kft 2022
Dahua Technology
April 23,
India Private 4,000.00 No such case during the reporting period
2022
Limited
166
DAHUA
TECHNOLOGY
BRASIL
COMRCIO E April 23,
2,000.00 No such case during the reporting period
SERVIOS EM 2022
SEGURANA
ELETRNICA
LTDA
Dahua Technology April 23,
1,000.00 No such case during the reporting period
Middle East FZE 2022
Dahua Technology April 23,
3,000.00 No such case during the reporting period
Perú S.A.C 2022
Dahua Technology
April 23,
Rus Limited 2,000.00 No such case during the reporting period
2022
Liability Company
Dahua Technology April 23,
No such case during the reporting period
Australia PTY LTD 2022 500.00
Dahua Technology
April 23,
South Africa No such case during the reporting period
2022 500.00
Proprietary Limited
Dahua Technology April 23,
1,000.00 No such case during the reporting period
Canada INC. 2022
Dahua Guvenlik
April 23,
Teknolojileri Sanayi 1,000.00 No such case during the reporting period
2022
ve Ticaret A.S.
Dahua Technology April 23,
No such case during the reporting period
SRB d.o.o. 2022 100.00
Dahua Technology April 23,
No such case during the reporting period
Bulgaria EOOD 2022 100.00
April 23,
Dahua Iberia, S.L. No such case during the reporting period
2022 100.00
Dahua Security
April 23,
Malaysia SDN. No such case during the reporting period
2022 100.00
BHD.
Dahua Technology April 23,
No such case during the reporting period
Kazakhstan LLP 2022 100.00
167
PT. Dahua Vision
April 23,
Technology No such case during the reporting period
2022 100.00
Indonesia
Dahua Technology
April 23,
Korea Company No such case during the reporting period
2022 100.00
Limited
Dahua Technology April 23,
No such case during the reporting period
S.R.L. 2022 100.00
Dahua Technology April 23,
No such case during the reporting period
France SAS 2022 700.00
April 23,
Dahua Vision LLc No such case during the reporting period
2022 500.00
Dahua Technology
April 23,
New Zealand No such case during the reporting period
2022 100.00
Limited
Dahua Technology April 23,
No such case during the reporting period
GmbH 2022 300.00
Dahua Technology April 23,
2,000.00 No such case during the reporting period
Colombia S.A.S. 2022
Dahua Technology April 23,
No such case during the reporting period
Panama S.A. 2022 100.00
Dahua Technology April 23,
No such case during the reporting period
Chile SpA 2022 100.00
Dahua Technology
April 23,
Tunisia Limited No such case during the reporting period
2022 100.00
Liability Company
Dahua Technology April 23,
No such case during the reporting period
Kenya Limited 2022 100.00
Dahua Technology April 23,
No such case during the reporting period
China (Pvt) LTD 2022 100.00
Dahua Technology
April 23,
Pakistan (private) No such case during the reporting period
2022 100.00
Limited
Dahua Technology April 23,
No such case during the reporting period
Morocco SARL 2022 100.00
Dahua Argentina April 23,
No such case during the reporting period
S.A. 2022 100.00
168
Dahua Technology April 23,
No such case during the reporting period
Czech s.r.o. 2022 100.00
Dahua Technology April 23,
No such case during the reporting period
Denmark ApS 2022 100.00
Dahua Technology April 23,
No such case during the reporting period
Netherlands B.V. 2022 100.00
Dahua
April 23,
Technology(Thaila No such case during the reporting period
2022 100.00
nd) Co.,LTD.
Dahua Technology April 23,
No such case during the reporting period
Italy S.R.L. 2022 100.00
Total amount of
Total amount of guarantees to guarantees to
subsidiaries approved during the 1,492,000.00 subsidiaries actually 430,083.16
reporting period (B1) occurred during the
reporting period (B2)
Total balance of
Total amount of guarantees to guarantees actually
subsidiaries approved by the end of 1,492,000.00 paid to subsidiaries at 1,003,594.04
the reporting period (B3) the end of the
reporting period (B4)
Subsidiaries' guarantees to subsidiaries
Announceme
Guarante
nt date of Du
Actual Actual Type of e for
disclosure of Guarante Term of e
Guaranteed party occurrenc guarantee guarante related
the e amount guarantee or
e date amount e parties or
guarantee not
not
cap
Total amount of
Total amount of guarantees to guarantees to
subsidiaries approved during the subsidiaries actually
reporting period (C1) occurred during the
reporting period (C2)
Total balance of
Total amount of guarantees to guarantees actually
subsidiaries approved by the end of paid to subsidiaries at
the reporting period (C3) the end of the
reporting period (C4)
Total amount of company guarantees (namely sum of the previous three major items)
Total amount of
Total amount of guarantees guarantees actually
approved during the reporting 1,492,000.00 occurred during the 430,083.16
period (A1+B1+C1) reporting period
(A2+B2+C2)
Total balance of
Total amount of guarantees guarantees actually
approved by the end of the 1,492,000.00 paid at the end of the 1,003,594.04
reporting period (A3+B3+C3) reporting period
(A4+B4+C4)
Total amount of actual guarantees (A4+B4+C4) as a
38.84%
percentage of the Company's net assets
Including:
169
Balance of guarantees provided to the shareholders, actual
controllers, and their related parties (D)
Balance of debt guarantees directly or indirectly offered to
guaranteed objects with asset-liability ratio exceeding 70% 963,594.04
(E)
Amount of the portion of the total guarantee amount
exceeding 50% of net assets (F)
Total amount of the above three guarantees (D+E+F) 963,594.04
Notes on unexpired guarantees with guarantee
responsibilities occurred or possible joint liabilities within the
reporting period (if any)
Notes on providing external guarantees in violation of
specified procedures (if any)
3. Entrusting Others to Manage Cash Assets
(1) Entrusted Financing
Applicable □ Not applicable
Entrusted financing during the reporting period
Unit: RMB ten thousand
Impairment
Overdue amount accrued
Entrusted Unexpired
Specific type Funding source outstanding for overdue
amount balance
amount financial
management
Financial
products of
Equity Fund 50,000.00 50,000.00
securities
companies
Total 50,000.00 50,000.00
Specific matters on high-risk entrusted capital management with a large amount for a single item, or with low security
and poor liquidity
Applicable □ Not applicable
Unit: RMB ten thousand
Act Wh
Act ual eth Ite
ual reco Amo er m
Nam
Ref pro very unt ther ove
e of Whe
Trust eren Exp fit of of e rvie
trust ther
ee Paym ce ect and profi prov will w
ee Ca Inve it
orga Sta ent for ed los ts ision be and
orga pit Ter stm pass
nizati Prod Am rtin deter ann ear s and for entr rela
nizat al mina ent ed
on uct oun g minat ualiz nin duri loss imp ust ted
ion So tion dire the
(or type t dat ion ed gs ng es airm ed que
(or ur date ctio legal
trust e meth rate (if the duri ent fina ry
nam ce n proc
ee) od of any rep ng accr nci ind
e of edur
type retur ) orti the ued al ex
trust es
n ng rep (if pla (if
ee)
peri ortin any) n in any
od g the )
peri futu
170
od re
Priv
ate
equi
ty
fund
prod
ucts
,
fixe
Paym
d
ent of
Guo Fe inco
Asset Eq Febr princi
sen Secu bru me -
Mana 50, uit uary pal Une
Secu rities ary ass 4,0
geme 000 y 9, and xpir Yes No
rities com 10, ets, 73.
nt .00 Fu 203 inco ed
co., pany 202 equi 52
Plan nd 1 me at
Ltd. 1 ty
matur
ass
ity
ets,
publ
ic
equi
ty
hybr
id
fund
s
-
50,
4,0
Total 000 -- -- -- -- -- -- -- -- -- --
73.
.00
52
Cases of entrusted financing expected to be unable to recover the principal or cases that may result in impairment
□ Applicable Not applicable
(2) Entrusted Loans
□ Applicable Not applicable
No such case as entrusted loan during the reporting period.
4. Other Significant Contracts
□ Applicable Not applicable
No such case as other significant contract during the reporting period.
XVI. Explanations on Other Significant Matters
Applicable □ Not applicable
The Company initiated its non-public offering of shares to China Mobile Communications Group Co., Ltd. in 2021,
and obtained Approval of Non-public Offering of Shares of Zhejiang Dahua Technology Co., Ltd. (Z.J.X.K. (2022) No.
853) issued by China Securities Regulatory Commission on April 24, 2022, which indicated that China Securities
Regulatory Commission consented the Company’s application for this non-public offering. On June 3, 2022, due to the
implementation of the 2021 equity distribution, the Company's non-public issuance price was adjusted from RMB
171
17.67 yuan/share to RMB 17.40 yuan/share, and the number of shares issued was adjusted from no more than
288,624,700 shares (inclusive) to no more than 293,103,400 shares (inclusive).
The Company disclosed Report on Non-public Offering of Shares to Specific Investors, Announcement on Non-
public Offering of Shares to Specific Investors and other documents on March 31, 2023 and April 12, 2023. The
Company completed its non-public offering of shares to China Mobile Communications Group Co., Ltd. The
293,103,400 shares issued in this non-public offering shall be listed on the exchange as of April 14, 2023. The
Company’s total capital stock will change from 3,033,161,170 shares to 3,326,264,570 shares.
The announcements above have been disclosed on Securities Times and http://www.cninfo.com.cn, as
designated by the Company.
XVII. Significant Events of the Company’s Subsidiaries
□ Applicable Not applicable
172
Section VII Changes in Shares and Information about
Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
Before the change Increase or decrease in the change (+, -) After the change
Shares
Bonu convert
Shares
Percenta s ed from Percenta
Number newly Others Subtotal Number
ge share capital ge
issued
s reserve
s
I. Shares
with - -
1,079,962,7 74,737,7 1,075,053,8
limited 36.06% 0 0 79,646,6 4,908,94 35.44%
94 00 50
sales 44 4
condition
1.
Shares
0 0.00% 0 0 0 0 0 0 0.00%
held by
state
2.
Shares
held by
state- 0 0.00% 0 0 0 0 0 0 0.00%
owned
legal
persons
3.
- -
Other 1,079,953,1 74,737,7 1,075,053,8
36.06% 0 0 79,637,0 4,899,34 35.44%
domestic 94 00 50
44 4
shares
Of
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domestic
legal
persons
Sha
res held
- -
by 1,079,953,1 74,737,7 1,075,053,8
36.06% 0 0 79,637,0 4,899,34 35.44%
domestic 94 00 50
44 4
natural
persons
4. 9,600 0.00% 0 0 0 -9,600 -9,600 0 0.00%
173
Foreign
shares
Of
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
foreign
legal
persons
Sha
res held
by
9,600 0.00% 0 0 0 -9,600 -9,600 0 0.00%
foreign
natural
persons
II.
Shares
1,914,587,9 43,519,3 43,519,3 1,958,107,3
without 63.94% 0 0 0 64.56%
36 84 84 20
restrictio
ns
1.
RMB 1,914,587,9 43,519,3 43,519,3 1,958,107,3
63.94% 0 0 0 64.56%
ordinary 36 84 84 20
shares
2.
Foreign
shares 0 0.00% 0 0 0 0 0 0 0.00%
listed in
China
3.
Foreign
shares
listed in 0 0.00% 0 0 0 0 0 0 0.00%
foreign
countrie
s
4.
0 0.00% 0 0 0 0 0 0 0.00%
Other
-
2,994,550,7 74,737,7 38,610,4 3,033,161,1
III. Total 100.00% 0 0 36,127,2 100.00%
30 00 40 70
60
Reasons for changes in shares
Applicable □ Not applicable
1. In June 27, 2022, the Company granted 74,737,700 shares of restricted stocks to 4,249 incentive objects. These
stocks were listed on Shenzhen Stock Exchange on July 15, 2022;
2. In August 2022, the Company repurchased and cancelled a total number of 36,127,260 restricted stocks which had
been included in the 2018 and 2020 incentive plans. These restricted stocks included the restricted stocks which failed
to reach the conditions on restriction on sales and the restricted stocks which were held by resigned incentive objects.
3. According to relevant regulations, the Company shall lock the shares held by its directors, supervisors and senior
executives through reverification at the beginning of each year and shall lock the shares held by the resigned directors,
174
supervisors and senior executives in different proportions at different stages based on their resignation dates and
former terms of office.
Approval for changes in shares
Applicable □ Not applicable
1. The Company’s 2022 equity-based incentive plan was deliberated and approved by the 27th meeting of the Seventh
Board of Directors, the 17th meeting of the seventh Board of Supervisors and the 2021 Annual General Meeting of
Shareholders;
2. The Company’s repurchase and cancellation of some restricted stocks in 2018 and 2020 incentive plans were
approved at the 30th meeting of the Seventh Board of Directors and the 20th meeting of the Seventh Board of
Supervisors on April 22, 2022, and at the 2021 Annual General Meeting of Shareholders on May 16, 2022.
Transfer for changes in shares
Applicable □ Not applicable
1. On June 27, 2022, the Company granted 74,737,700 shares of restricted stocks to 4,249 incentive objects. These
stocks were listed on Shenzhen Stock Exchange on July 15, 2022;
2. In August 2022, the Company repurchased and cancelled a total number of 36,127,260 restricted stocks which had
been included in the 2018 and 2020 incentive plans. These restricted stocks included the restricted stocks which failed
to reach the conditions on restriction on sales and the restricted stocks which were held by resigned incentive objects.
Effects of changes in shares on the basic earnings per share ("EPS"), diluted EPS, net assets per share, attributable to
common shareholders of the Company, and other financial indexes over the last year and last period
□ Applicable Not applicable
Other contents that the Company considers necessary or are required by the securities regulatory authorities to
disclose
□ Applicable Not applicable
2. Changes in restricted stocks
Applicable □ Not applicable
Unit: share
Number Of Number of Number of Number of
Shares With increased unlocked shares with
Name of Limited Sales shares with shares with limited sales Reasons for Date of
Shareholder Condition At limited sales limited sales condition at limited sales unlocking
The Beginning condition in condition in the end of the
Of The Period current period current period period
According to According to
the relevant the relevant
provisions of provisions of
Fu Liquan 767,901,735 0 0 767,901,735
executives executives
shares shares
management management
According to According to
the relevant the relevant
Zhu provisions of provisions of
160,577,490 0 40,144,373 120,433,117
Jiangming director’s director’s
shares shares
management management
Chen Ailing 53,447,110 0 0 53,447,110 According to According to
175
the relevant the relevant
provisions of provisions of
director’s director’s
shares shares
management management
According to According to
the relevant the relevant
provisions of provisions of
Wu Jun 51,938,164 0 78,000 51,860,164
director’s director’s
shares shares
management management
According to According to
the the
regulations on regulations on
Zhang senior senior
3,032,170 0 322,017 2,710,153
Xingming executives executives
and equity and equity
incentive incentive
shares shares
According to According to
the the
regulations on regulations on
senior senior
Wu Jian 1,912,001 0 510,750 1,401,251
executives executives
and equity and equity
incentive incentive
shares shares
According to According to
the the
regulations on regulations on
senior senior
Jiang Xiaolai 1,567,500 0 363,700 1,203,800
executives executives
and equity and equity
incentive incentive
shares shares
According to According to
the the
regulations on regulations on
senior senior
Zhao Yuning 2,025,000 0 892,250 1,132,750
executives executives
and equity and equity
incentive incentive
shares shares
According to According to
the the
regulations on regulations on
senior senior
Chen Yuqing 1,376,963 0 303,000 1,073,963
executives executives
and equity and equity
incentive incentive
shares shares
According to According to
Other senior
the the
executives
regulations on regulations on
and equity 36,184,661 37,705,146 0 73,889,807
senior senior
incentive
executives executives
objects
and equity and equity
176
incentive incentive
shares shares
Total 1,079,962,794 37,705,146 42,614,090 1,075,053,850 -- --
II. Issuance and listing of securities
1. Securities (excluding preferred share) issued in reporting period
Applicable □ Not applicable
Name of
Issuance Number of
the stock Transaction
Issue price (or Quantity of Listing approved Disclosure Date of
and its termination
Date interest issuance date listed Index Disclosure
derivative date
rate) transactions
securities
Stocks
Juchao
June July
Information July 12,
DAHUA 27, 8.16 74,737,700 15, 74,737,700
Network 2022
2022 2022
Announcement
Convertible corporate bonds, separately-traded convertible corporate bonds, corporate bonds
Other derivative securities
Description of the issuance of securities (not including preferred stocks) during the reporting period
According to the "Proposal on the Company's Stock Option and Restricted Stock Incentive Plan in 2022 (Draft) and its
Abstracts”, which has been reviewed and approved at the shareholders' meeting of the Company in 2021, the
"Proposal on Adjusting Related Issues of the Stock Option and Restricted Stock Incentive Plan of 2022" and the
"Proposal on Granting Stock Option and Restricted Stocks to Incentive Objects" which have been reviewed and
approved at the 32nd meeting of the 7th Board of Directors. In June 27, 2022, the Company granted 74,737,700
shares of restricted stocks to 4,249 incentive objects, with a subscription price of RMB 8.16 per share. These stocks
were listed on Shenzhen Stock Exchange on July 15, 2022.
2. Explanation on changes in total number of the Company's shares & the structure of
shareholders and the structure of assets and liabilities
Applicable □ Not applicable
According to the "Proposal on the Company's Stock Option and Restricted Stock Incentive Plan in 2022 (Draft) and its
Abstracts”, which has been reviewed and approved at the shareholders' meeting of the Company in 2021, the
"Proposal on Adjusting Related Issues of the Stock Option and Restricted Stock Incentive Plan of 2022" and the
"Proposal on Granting Stock Option and Restricted Stocks to Incentive Objects" which have been reviewed and
approved at the 32nd meeting of the 7th Board of Directors. On June 27, 2022, the Company granted 74,737,700
shares of restricted stocks to 4,249 incentive objects. The Company’s total capital stock changed to 3,033,161,170
shares after this granting of restricted stocks.
3. Existing shares held by internal staff of the Company
□ Applicable Not applicable
177
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholdings
Unit: share
Total
Number of
Total
Preferred
number of
Shareholde Total number of
common
Total rs (If Any) preferred
shareholde
Number of (Refer to shareholders (if any)
rs at the
Common Note 8) (refer to Note 8) with
end of
Shareholde Whose resumed voting
185,289 previous 117,469 0 0
rs at The Voting rights at the end of
month
End of The Rights previous month
before the
Reporting have been before the disclosure
disclosure
Period Recovered date of the annual
date of the
at the End report
annual
of the
report
Reporting
Period
Shareholding list of shareholders with over 5% shares or top ten shareholders
Number of Pledges, markings
Number of Number of
shares or freezing
Shareholdi shares held Changes in shares
Name of Nature of held
ng at the end the held with
Shareholde Sharehold without State
Percentag of the reporting limited
r er limited Of Number
e reporting period sales
sales Shares
period conditions
condition
Domestic
1,023,868,9 767,901,7 255,967,2 216,478,2
Fu Liquan Natural 33.76% 0 Pledge
80 35 45 12
Person
Domestic
Zhu 160,175,49 120,433,1 39,742,37 11,700,00
Natural 5.28% -402,000 Pledge
Jiangming 0 17 3 0
Person
Hong Kong
Overseas
Securities 158,134,60 158,134,6
Legal 5.21% 0
Clearing 8 34,493,267 08
Person
Co. Ltd.
Domestic
53,447,11 17,815,70 31,800,00
Chen Ailing Natural 2.35% 71,262,813 0 Pledge
0 3 0
Person
Domestic
51,860,16 17,312,72
Wu Jun Natural 2.28% 69,172,886 -78,000
4 2
Person
Domestic
China
Non-state-
Securities 39,611,24
owned 1.31% 39,611,241 0 0
Finance 1
Legal
Co., Ltd.
Person
China State-
Galaxy owned 35,914,16
1.18% 35,914,160 -2,257,939 0
Securities Legal 0
Co., Ltd. Person
Liu Domestic 0.46% 13,838,281 7,703,100 0 13,838,28
178
Wenhua Natural 1
Person
China Life
Insurance
Company
Ltd. －
traditional 10,799,73
Others 0.36% 10,799,739 4,299,927 0
－general 9
insurance
products-
005L-
CT001 S.
PICC Life
Insurance
Company
Limited－
dividends Others 0.28% 8,621,950 6,413,550 0 8,621,950
－
dividends
of personal
insurance
Strategic investors or
general legal entities
becoming top 10
shareholders as a result Not applicable.
of the placement of new
shares (if any) (see Note
3)
Description of the
association relationship Mr. Fu Liquan and Ms. Chen Ailing are husband and wife. The Company Is Unaware Of
or concerted action of Whether Other Shareholders Have Associated Relationship Or Are Persons Acting In
above-mentioned Concert
shareholders
Explanation of the above
shareholders involved in
proxy/trustee voting Not applicable.
rights and abstention
from voting rights
Special note on the
existence of repurchase
special accounts among Not applicable.
the top 10 shareholders
(if any) (see Note 10)
Shareholding of the top ten shareholders without limited sales condition
Type of shares
Number of shares held without limited sales condition at the end of
Name of Shareholder Type of
the reporting period Number
shares
RMB
255,967,2
Fu Liquan 255,967,245 commo
45
n stock
RMB
Hong Kong Securities 158,134,6
158,134,608 commo
Clearing Co. Ltd. 08
n stock
RMB 39,742,37
Zhu Jiangming 39,742,373
commo 3
179
n stock
RMB
China Securities 39,611,24
39,611,241 commo
Finance Co., Ltd. 1
n stock
RMB
China Galaxy Securities 35,914,16
35,914,160 commo
Co., Ltd. 0
n stock
RMB
17,815,70
Chen Ailing 17,815,703 commo
3
n stock
RMB
17,312,72
Wu Jun 17,312,722 commo
2
n stock
RMB
13,838,28
Liu Wenhua 13,838,281 commo
1
n stock
China Life Insurance
Company Ltd. － RMB
10,799,73
traditional －general 10,799,739 commo
9
insurance products- n stock
005L-CT001 S.
PICC Life Insurance
RMB
Company Limited－
8,621,950 commo 8,621,950
dividends－dividends of
n stock
personal insurance
Explanation on
associated relationship
or persons acting in
concert among top ten
Mr. Fu Liquan and Ms. Chen Ailing are husband and wife. The Company Is Unaware Of
shareholders without
Whether Other Shareholders Have Associated Relationship Or Are Persons Acting In
limited shares, and
Concert
between top ten
shareholders without
limited shares and top
ten shareholders
Explanation on Top Ten
Common Shareholders’
At the end of the reporting period, Liu Wenhua, an individual shareholder, held 9,439,741
Participation in
shares of the Company through an ordinary account and 4,398,540 shares of the Company
Securities Margin
through a credit account, totaling 13,838,281 shares.
Trading (If Any) (see
Note 4)
Whether the Company's top ten common shareholders or top ten common shareholders without limited shares agree
on any repurchase transaction in the reporting period
□ Yes No
None of the Company's top ten common shareholders or top ten common shareholders without limited shares agreed
on repurchase in the reporting period.
2. Particulars about the controlling shareholder
Nature of the controlling shareholder: Natural person-owned
Type of the controlling shareholder: Natural person
Whether he/she has obtained the
Name of the controlling shareholder Nationality right of residence in another country
or region
180
Fu Liquan China Yes
Main occupation and title Chairman and President of the Company
Mr. Fu Liquan, the controlling shareholder, directly held 7.98% of the shares
Shares held in other listed of Leapmotor (HK.09863). Mr. Fu Liquan and Zhu Jiangming, Ms. Liu
companies by controlling or holding Yunzhen (Mr. Zhu Jiangming’s spouse) and Ms. Chen Ailing (Mr. Fu Liquan’s
in the reporting period spouse) acted in concert to jointly and finally hold approximate 27.46% of the
shares of Leapmotor.
Change of the controlling shareholders in the reporting period
□ Applicable Not applicable
No change has happened to the controlling shareholder in the reporting period of the Company
3. The actual controller of the Company and persons acting in concert
Nature of the actual controller: Domestic natural person
Type of the actual controller: Natural person
Whether he/she has
Name of the actual Relationship with the actual obtained the right of
Nationality
controller controller residence in another
country or region
Fu Liquan Himself China Yes
Chen Ailing Himself China Yes
Mr. Fu Liquan holds the position of the chairman and president of the Company; Ms.
Main occupation and title
Chen Ailing holds the position of the director of the Company
Information about other
listed companies at home
N/A
and abroad controlled in
the last ten years
Change of the actual controller in the reporting period
□ Applicable Not applicable
No change has happened to the actual controller in the reporting period
Block Digram for Property Right and Control Relationship between the Company and Actual Controllers
The actual controller controls the Company via trust or other ways of asset management
□ Applicable Not applicable
4. The accumulated number of shares pledged by the controlling shareholder or the first
majority shareholder of the Company and his/her persons acting in concert accounted for 80%
of all the shares held by him/her in the Company
□ Applicable Not applicable
181
5. Particulars about other corporate shareholders with shareholding proportion over 10%
□ Applicable Not applicable
6. Particulars on share reduction restricted for controlling shareholders, actual controller,
restructuring party or other commitment entities
□ Applicable Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting Period
The progress on share repurchases
□ Applicable Not applicable
The progress in reduction of re-purchase shares by means of centralized competitive bidding transaction
□ Applicable Not applicable
182
Section VIII Information of Preferred Shares
□ Applicable Not applicable
There are no preferred shares in the reporting period.
183
Section IX Situation on Corporate Bonds
□ Applicable Not applicable
184
Section X Financial Report
I. Audit Reports
Audit opinion type Standard Unqualified Opinion
Signature Date of audit report April 27, 2023
BDO China Shu Lun Pan CPAs (special general
Name of audit institution
partnership)
Audit report ref. Xin Kuai Shi Bao Zi [2023] No. ZF10766
Name of Certified Public Accountant Zhong Jiandong, Zhang Junhui
Audit Report Text
To the shareholders of Zhejiang Dahua Technology Co., Ltd.:
I. Opinion
We have audited the financial statements of Zhejiang Dahua Technology Co., Ltd. (hereinafter
referred to as Dahua), including the parent company's and the consolidated balance sheet as of
December 31, 2022, the parent company's and the consolidated income statement, the parent
company's and the consolidated cash flow statement and the parent company's and the consolidated
statement of changes in owners' equity in 2022, as well as the notes to relevant financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in
accordance with "Accounting Standards for Business Enterprises”, which fairly reflects the financial
position of the merged companies and the parent company as of December 31, 2022, and the
operating results and cash flows of the merger and the parent company in 2022.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public
Accountants in China. Our responsibilities under those standards are further described in the CPA's
Responsibilities for the Audit of the Financial Statements section of our report. According to the “Code
of Ethics for Chinese Certified Public Accountants”, we are independent of Dahua and 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 audit opinions.
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.
185
The key audit matters that we identified in the audit are as follows:
Key Audit Matters How the matter was addressed in the audit
A. Recognition of revenue
The operating revenue of Dahua in 2022 was RMB The main audit procedure we implemented for the above key audit item includes:
30,565,370,000, which is an important part of Dahua's profit ① Understand the internal control system in relation to revenue recognition ,the
statement. Since the revenue is one of Dahua's key design and implementation of the financial accounting system, and test the
performance indicators, there is an inherent risk that the effectiveness of its operation; ② Check the agreements of relevant contracts for
management may alter the time point of revenue recognition different sales types in accordance with the actual situation of the specific
in order to meet specific targets or expectations. Therefore, businesses, and evaluate whether the revenue recognition meets the
we identify the recognition of revenue as a key audit item. requirements of Accounting Standards for Business Enterprises; ③ Perform an
Based on the accounting policy of Dahua, the Company's analytical procedures to judge the reasonableness of the changes in sales
main products include security standard products, system revenue and gross profit margin; ④ for the annual sales amount and the
integration and other labor services. Among them, the outstanding amount at the end of the year, sample and confirm with customers by
security standard products for domestic sales were letter, and the export sales income shall be certified by the customs; ⑤ Different
delivered to customers or picked up by customers based on types of income samples shall be tested: For standard products for domestic
the contractual terms in the sales contract. The revenue sales and overseas sales of overseas subsidiaries, sample the out-of-stock
was recognized after customers received and accepted the records, shipping orders, customer countersign records, received payment
goods and the Company obtained the evidence proving the records and so on.; for standard products exported by domestic companies,
customers' receipt of goods; for the security standard check the out-of-stock records, customs declaration, bill of lading, and received
products exported by domestic companies, the revenue was payment records; For system integration sales, check the product delivery
recognized after the goods were declared and exported, records, shipping list and contract list, unpacking acceptance report, acceptance
and for the security standard products sold overseas by report for the completion of installation and commissioning, received payment
overseas subsidiaries, the revenue was recognized after the records and so on. ⑥ Sample the transactions made before or after the balance
customer received and accepted the goods; the revenue sheet date and check their out-of-stock records, customs declaration, and other
from the system integration sales was recognized after the relevant supportive documents to confirm whether the revenues have been
acceptance of goods by customers; the revenue from the recognized in an appropriate accounting period.
labor services sales was recognized when relevant labor
services were provided. See Notes III (26) for details.
B. Recoverability of accounts receivable
The net receivable of Dahua at the end of 2022 was RMB We evaluated the recoverability of accounts receivable by the following
15,411,908,600. The management needs to make procedure: ① Understand the management and the internal control of key
significant judgments about the identification of accounts financial reporting related to credit control, account recovery and assessment of
receivable impairment accounts, the likelihood of inward impairment provision for receivables, and evaluate the effectiveness of the design
cash flows of future customers. The management's and operation of the internal control; ② Understand the Company's management
estimates and assumptions are uncertain. Since the amount procedures for customers' credit and the collection measures for overdue debts;
of accounts receivable is significant to the financial ③ For accounts receivable for which the expected credit loss is calculated based
186
statements as a whole and the recoverability involves the on the combination of credit risk characteristics, review the management's
estimation and judgment of future cash flows, we recognize division of the combination, and assess the reasonableness of the expected
the recoverability of accounts receivable as a key audit credit loss rate based on the estimates including historical credit loss rate, current
matter. circumstance and prediction of the future economic condition. We assessed the
reasonableness of the accrued proportion with reference to the historical audit
experience and prospective information, tested the accuracy of the portfolio
classification and aging division of the accounts receivable, and recalculated the
accuracy of the accrued amount of the expected credit loss; we sampled the
accounts receivable subject to separate bad debt provision, and reviewed the
basis for the Management’s assessment of the expected credit loss based on the
financial position and credit position of the customer, historical repayment records
and prediction of the future economic condition. We validated the management's
assessment against the evidence we have obtained during the audit process,
including background information, transaction history and payment status of the
customer, and forward-looking considerations; ④ Test the payment received after
the balance sheet date; ⑤ Perform the correspondence-based confirmation
procedure and check whether the confirmation results are consistent; ⑥ Analyze
whether there are amounts of accounts receivable that cannot be recovered and
need to be written off.
IV. Other Information
The management of Dahua (hereinafter referred to as the Management) is responsible for the
other information. The other information includes the information covered in Dahua's annual report in
2022, but excludes the financial statements and our audit report.
Our opinion on the financial statements does not cover the other information and we do not and
will not express any form of assurance conclusion thereon.
In combination with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Management is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and
187
design, implement and maintain necessary internal control to ensure that the financial statements are
free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, the Management is responsible for assessing Dahua's
ability to continue operating, disclosing matters related to continuous operation (if applicable) and
using the hypothesis of continuous operation unless there is a plan to liquidate, terminate operations
or no other realistic options.
The management is responsible for supervising the financial reporting process of Dahua.
VI. CPA'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 audit 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 the audit standards 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 made on the basis of these financial statements.
As part of an audit in accordance with the audit standards, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures to address 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 one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design appropriate
audit procedures, but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.
(III) Evaluate the appropriateness of accounting policies used, and the reasonableness of
accounting estimates and related disclosures made, by the Management.
(IV) Conclude on the appropriateness of using the going concern assumption by the
Management. At the same time, draw a conclusion, based on the audit evidence obtained, on
whether there is significant uncertainty in matters or situations that may cause major doubts about
Dahua's ability in continuous operation. If we conclude that a material uncertainty exists, we are
required to draw attention in our audit report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the information
available up to the date of our audit report. However, future events or conditions may result in
Dahua's inability to continue operating.
(V) Evaluate the overall presentation (including the disclosures), structure and content of the
financial statements, and whether the financial statements fairly reflect the relevant transactions and
events.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the
entities or business activities within Dahua to express an opinion on the consolidated financial
188
statements. We are responsible for guiding, supervising, and implementing the group audit, and
remain solely responsible for our audit opinion.
We have communicated with those charged with governance on such matters as the scope of
audit as planned, the schedule and material audit findings, including the defects in the internal control
that are worth paying attention to found in this audit.
We have also provided those charged with governance with a statement on observing the
professional ethics related to independence, and communicated with those charged with governance
on all the relationships and other matters that might be reasonably deemed to affect our
independence, and relevant preventative measures.
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 audit 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 CPAs Chinese CPA: Zhong Jiandong
(Special general partnership) (Project partner)
Chinese CPA: Zhang Junhui
Shanghai, China April 27, 2023
II. Financial Statements
Units of financial reports in the notes: yuan
1. Consolidated Balance Sheet
Prepared by: Zhejiang Dahua Technology Co., Ltd.
Unit: RMB
Item December 31, 2022 January 1, 2022
Current Assets:
Cash and Bank Balances 8,029,878,650.77 7,731,002,784.77
Deposit Reservation for Balance
Loans to Banks and Other
Financial Institutions
Trading Financial Assets 1,470,000.00 2,602,173.53
189
Derivative Financial Assets
Notes receivable 872,302,071.18 839,861,562.35
Accounts receivable 15,411,908,561.50 14,654,490,643.49
Receivables Financing 679,441,917.62 792,709,781.57
Prepayments 121,691,239.14 171,034,046.65
Premium Receivable
Reinsurance Accounts Receivable
Reinsurance Contract Reserves
Receivable
Other Receivables 401,849,246.88 546,477,779.16
Including: interest receivable
Dividends Receivable 8,519,063.17
Buying Back the Sale of Financial
Assets
Inventory 7,315,372,440.02 6,810,041,288.82
Contract Assets 106,335,405.35 163,432,100.37
Holding for-sale assets
Non-current Assets Due within 1
476,871,949.75 602,567,293.78
Year
Other Current Assets 1,352,406,151.72 1,190,585,874.34
Subtotal of Current Assets 34,769,527,633.93 33,504,805,328.83
Non-current Assets:
Granting of loans and advances
Investment in Creditor's Rights
Investment in Other Creditor's
Rights
Long-term Receivables 1,436,256,651.54 1,891,368,121.39
Long-term Equity Investment 1,461,099,644.55 1,243,872,752.91
Investment in Other Equity
Instruments
Other Non-current Financial Assets 931,043,130.33 945,619,965.97
Investment Property 423,035,823.82 311,065,023.43
Fixed Assets 4,643,617,574.85 2,187,435,714.17
Projects under Construction 423,535,552.03 1,992,834,055.03
Productive Biological Assets
Oil and gas assets
Right-of-use Assets 314,700,977.50 248,577,371.97
Intangible Assets 557,183,251.12 584,129,741.43
Development Expenditure
Goodwill 6,615,294.18 42,685,490.30
Long-term Deferred Expenses 130,626,422.97 45,876,764.73
Deferred Income Tax Assets 1,014,419,944.15 960,374,829.82
Other Non-current Assets 141,231,903.57 97,226,861.99
Subtotal of Non-current Assets 11,483,366,170.61 10,551,066,693.14
190
Total assets 46,252,893,804.54 44,055,872,021.97
Current Liabilities:
Short-term loan 257,943,618.51 325,648,230.98
Borrowings from the Central Bank
Borrowings from Banks and Other
Financial Institutions
Transactional financial liabilities 26,652,319.25
Derivative Financial Liabilities
Notes Payable 4,364,097,761.17 4,472,998,965.03
Accounts Payable 7,340,277,388.29 7,329,740,650.71
Received Prepayments
Contract liabilities 1,219,548,011.88 864,989,993.78
Financial Assets Sold for
Repurchase
Deposit Taking and Interbank
Deposit
Receiving from Vicariously Traded
Securities
Receiving from Vicariously Sold
Securities
Payroll payable 1,583,203,165.43 1,964,503,166.13
Tax Payable 326,881,747.78 677,076,594.01
Other Payables 1,004,056,999.91 677,752,701.47
Including: interest payable
Dividends Payable 16,060,762.89
Service Charge and Commission
Payable
Reinsurance Accounts Payable
Holding for-sale liabilities
Non-current Liabilities Due within 1
2,558,010,785.73 890,848,742.47
Year
Other Current Liabilities 166,004,612.27 208,631,381.45
Subtotal of Current Liabilities 18,846,676,410.22 17,412,190,426.03
Non-current Liabilities:
Insurance Contract Reserves
Long-term loan 453,825,000.00 1,552,500,000.00
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Lease Liabilities 196,340,654.27 140,606,139.33
Long-term Payables
Long-term payroll payable
Expected Liabilities 227,764,387.93 297,851,786.62
Deferred Income 104,663,047.38 103,218,676.13
191
Deferred Income Tax Liabilities 1,168,473.33 61,778,504.44
Other Non-current Liabilities 204,084,072.08 317,381,981.28
Subtotal of Non-current Liabilities 1,187,845,634.99 2,473,337,087.80
Total Liabilities 20,034,522,045.21 19,885,527,513.83
Shareholders' Equity:
Share Capital 3,033,161,170.00 2,994,550,730.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 3,950,209,243.25 2,939,512,235.75
Less: Treasury Share 609,859,632.00 277,169,524.09
Other Comprehensive Incomes 36,942,339.77 76,005,792.49
Special Reserves
Surplus Reserves 1,553,691,005.92 1,553,691,005.92
General Risk Reserves
Undistributed Profits 17,872,654,791.67 16,331,012,273.48
Total Shareholders' Equity
25,836,798,918.61 23,617,602,513.55
Attributable to the Parent Company
Minority Shareholders' Equity 381,572,840.72 552,741,994.59
Total Shareholders' Equity 26,218,371,759.33 24,170,344,508.14
Total Liabilities and Shareholders'
46,252,893,804.54 44,055,872,021.97
Equity
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting
institution: Zhu Zhuling
2. Balance Sheet of the Parent Company
Unit: RMB
Item December 31, 2022 January 1, 2022
Current Assets:
Cash and Bank Balances 4,022,841,447.49 2,453,629,292.19
Trading Financial Assets
Derivative Financial Assets
Notes receivable 178,821,430.81 113,182,073.02
Accounts receivable 4,837,478,515.65 5,235,718,728.84
Receivables Financing 1,061,433,149.01 762,320,674.93
Prepayments 11,881,594.83 22,564,616.46
Other Receivables 13,025,162,686.64 13,227,344,584.64
Including: interest receivable
Dividends Receivable
Inventory 950,125,105.39 191,101,106.37
Contract Assets 27,158,633.27 14,676,165.82
Holding for-sale assets
Non-current Assets Due within 1
35,911,131.98 59,323,331.52
Year
Other Current Assets 627,219,565.83 548,317,361.69
192
Subtotal of Current Assets 24,778,033,260.90 22,628,177,935.48
Non-current Assets:
Investment in Creditor's Rights
Investment in Other Creditor's
Rights
Long-term Receivables 12,287,217.89 44,677,236.12
Long-term Equity Investment 5,482,249,288.75 5,294,492,906.78
Investment in Other Equity
Instruments
Other Non-current Financial Assets 908,573,130.33 919,563,465.97
Investment Property 317,849,081.03 161,109,748.15
Fixed Assets 1,627,286,403.38 623,652,394.47
Projects under Construction 34,991,576.38 890,954,831.96
Productive Biological Assets
Oil and gas assets
Right-of-use Assets 114,223,037.09 98,695,719.37
Intangible Assets 132,109,501.05 148,019,536.32
Development Expenditure
Goodwill
Long-term Deferred Expenses 69,447,374.46 25,121,726.63
Deferred Income Tax Assets 39,347,253.53 76,637,574.05
Other Non-current Assets 25,825,038.50 5,922,846.72
Subtotal of Non-current Assets 8,764,188,902.39 8,288,847,986.54
Total assets 33,542,222,163.29 30,917,025,922.02
Current Liabilities:
Short-term loan 3,632,141.60 3,066,910.69
Transactional financial liabilities
Derivative Financial Liabilities
Notes Payable 485,319,623.33 359,510,011.35
Accounts Payable 1,074,133,501.08 924,291,734.49
Received Prepayments
Contract liabilities 169,956,348.75 65,805,975.35
Payroll payable 1,116,235,627.09 1,349,324,493.47
Tax Payable 140,279,695.45 405,454,928.48
Other Payables 1,328,875,885.44 850,741,529.57
Including: interest payable
Dividends Payable 16,060,762.89
Holding for-sale liabilities
Non-current Liabilities Due within 1
2,393,499,176.95 785,270,294.02
Year
Other Current Liabilities 85,397,527.74 52,587,668.99
Subtotal of Current Liabilities 6,797,329,527.43 4,796,053,546.41
Non-current Liabilities:
193
Long-term loan 350,000,000.00 1,450,000,000.00
Bonds Payable
Including: Preferred Stocks
Perpetual Bonds
Lease Liabilities 64,598,842.13 53,205,974.57
Long-term Payables
Long-term payroll payable
Expected Liabilities 2,204,024.80 3,534,391.50
Deferred Income
Deferred Income Tax Liabilities 44,483,008.83
Other Non-current Liabilities 392,972.39 2,669,429.68
Subtotal of Non-current Liabilities 417,195,839.32 1,553,892,804.58
Total Liabilities 7,214,525,366.75 6,349,946,350.99
Shareholders' Equity:
Share Capital 3,033,161,170.00 2,994,550,730.00
Other Equity Instruments
Including: Preferred Stocks
Perpetual Bonds
Capital Reserves 3,788,412,149.09 2,925,020,649.68
Less: Treasury Share 609,859,632.00 277,169,524.09
Other Comprehensive Incomes
Special Reserves
Surplus Reserves 1,553,691,005.92 1,553,691,005.92
Undistributed Profits 18,562,292,103.53 17,370,986,709.52
Total Shareholders' Equity 26,327,696,796.54 24,567,079,571.03
Total Liabilities and Shareholders'
33,542,222,163.29 30,917,025,922.02
Equity
3. Consolidated Income Statement
Unit: RMB
Item 2022 2021
I. Total Operating Revenue 30,565,370,012.64 32,835,479,336.85
Including: Operating Revenue 30,565,370,012.64 32,835,479,336.85
Interest Income
Earned Premiums
Service Charge and
Commission Income
II. Total Operating Cost 28,808,656,031.31 29,561,717,851.11
Including: Operating Cost 18,989,797,670.92 20,058,513,158.33
Interest Expenditures
Service Charge and
Commission Expenses
Surrender Value
Net Claims Paid
194
Net Amount of Withdrawn
Reserve for Insurance Liability
Contract
Policyholder Dividend
Expense
Reinsurance Cost
Taxes and Surcharges 187,697,592.05 182,526,020.36
Sales Expenses 5,115,163,159.61 4,663,973,834.28
Administration expenses 1,143,968,823.89 955,015,503.39
Research and development
3,883,005,582.82 3,451,978,394.17
expense
Financial Expenses -510,976,797.98 249,710,940.58
Including: interest
129,841,192.93 96,871,668.06
expenses
Interest Income 197,933,592.28 184,577,399.09
Add: Other income 988,838,317.21 1,028,017,800.27
Investment Income (Mark "-"
280,749,308.20 -194,259,295.37
for Loss)
Including: Investment
Income from Affiliates and Joint -399,809,570.81 -269,439,343.85
Ventures
Profits from
recognition Termination of Financial -1,731,597.86
Assets at Amortized Cost
Exchange Gains (Mark "-" for
Losses)
Profit of Net Exposure
Hedging (Mark "-" for Loss)
Incomes from changes in fair
-46,015,577.97 125,378,610.62
value (losses marked with "-")
Credit Impairment Losses
-596,505,944.29 -745,010,186.63
(Mark "-" for Loss)
Asset Impairment Losses
-106,653,049.64 -49,902,275.84
(Mark "-" for Loss)
Asset Disposal Income (Mark
2,965,788.77 34,204,677.33
"-" for Loss)
III. Operating Profit (Mark "-" for
2,280,092,823.61 3,472,190,816.12
Loss)
Add: Non-operating Revenues 17,921,304.59 12,043,175.28
Less: Non-operating Expenses 10,836,066.92 14,572,711.07
IV. Total Profit (Mark "-" for Total
2,287,178,061.28 3,469,661,280.33
Loss)
Less: Income Tax Expense 25,327,807.96 58,114,707.75
V. Net Profit (Mark "-" for Net Loss) 2,261,850,253.32 3,411,546,572.58
(I) Classified by operation
continuity
1. Net Profit as a Going Concern
2,261,850,253.32 3,411,546,572.58
(Mark "-" for Net Loss)
2. Net Profit of Discontinued
195
Operation (Mark "-" for Net Loss)
(II) Classified by the attribution of
ownership
1. Net Profit Attributable to
2,324,356,092.20 3,378,410,889.60
Shareholders of Parent Company
2. Minority Shareholders' Profit
-62,505,838.88 33,135,682.98
and Loss
VI. Net Amount of Other
-39,267,173.55 14,719,520.43
Comprehensive Incomes after Tax
Net Amount of Other
Comprehensive Incomes after Tax
-39,063,452.72 14,848,269.36
Attributable to the Parent Company's
Owner
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Re-measure the variation of
the defined benefit plan
2. Other comprehensive
income that cannot be transferred to
P/L under the equity method
3. Changes in the fair value of
investment in other equity
instruments
4. Changes in the fair value of
the credit risk of the enterprise
5. Others
(II) Other comprehensive income
-39,063,452.72 14,848,269.36
that will be reclassified as P/L
1. Other comprehensive
income that can be transferred to P/L
under the equity method
2. Changes in the fair value of
investment in other creditor's rights
3. Financial assets reclassified
into other comprehensive income
4. Provisions for the credit
impairment of investment in other
creditor's rights
5. Cash flow hedge reserves
6. Currency translation
-39,063,452.72 21,289,820.46
difference
7. Others -6,441,551.10
Net Amount of Other
Comprehensive Incomes After Tax -203,720.83 -128,748.93
Attributable to Minority Shareholders
VII. Total Comprehensive Income 2,222,583,079.77 3,426,266,093.01
Total Comprehensive Income
Attributable to the Parent Company's 2,285,292,639.48 3,393,259,158.96
Owner
Total Comprehensive Income
-62,709,559.71 33,006,934.05
Attributable to Minority Shareholders
VIII. Earnings per Share
(I) Basic Earnings per Share 0.79 1.15
(II) Diluted Earnings per Share 0.79 1.15
Legal representative: Fu Liquan Person in charge of accounting: Xu Qiaofen Person in charge of the accounting
institution: Zhu Zhuling
196
4. Income Statement of the Parent Company
Unit: RMB
Item 2022 2021
I. Operating Revenue 8,458,444,111.37 9,743,217,163.52
Less: Operating Cost 1,230,036,081.64 1,278,222,643.67
Taxes and Surcharges 122,607,735.59 124,697,827.94
Sales Expenses 2,337,221,204.22 2,259,362,660.46
Administration expenses 615,717,298.20 548,096,369.70
Research and development
2,714,151,497.47 2,610,573,358.32
expense
Financial Expenses -18,613,854.17 12,468,559.31
Including: interest expenses 93,567,329.76 77,853,360.36
Interest Income 110,285,473.81 69,153,966.58
Add: Other income 797,553,509.91 821,967,678.89
Investment Income (Mark "-"
-302,194,016.65 -271,711,088.77
for Loss)
Including: Investment
Income from Affiliates and Joint -455,385,100.70 -303,537,703.31
Ventures
Profits from
Derecognition of Financial Assets at -3,752,816.76
Amortized Cost (Mark "-" for Loss)
Profit of Net Exposure
Hedging (Mark "-" for Loss)
Incomes from changes in fair
-10,144,713.55 103,445,980.57
value (losses marked with "-")
Credit Impairment Losses
-1,310,481.21 -44,475,017.30
(Mark "-" for Loss)
Asset Impairment Losses
-6,453,322.10 -1,783,389.96
(Mark "-" for Loss)
Asset Disposal Income (Mark
1,109,370.89 34,190,019.31
"-" for Loss)
II. Operating Profit (Mark "-" for Loss) 1,935,884,495.71 3,551,429,926.86
Add: Non-operating Revenues 4,169,504.86 6,009,693.14
Less: Non-operating Expenses 5,180,651.11 8,094,190.26
III. Total Profit (Mark "-" for Total
1,934,873,349.46 3,549,345,429.74
Loss)
Less: Income Tax Expense 4,336,964.90 135,109,985.70
IV. Net Profit (Mark "-" for Net Loss) 1,930,536,384.56 3,414,235,444.04
(I) Net Profit as a Going Concern
1,930,536,384.56 3,414,235,444.04
(Mark "-" for Net Loss)
(II) Net Profit of Discontinued
Operation (Mark "-" for Net Loss)
V. Net Amount of Other
-522,554.00
Comprehensive Incomes After Tax
(I) Other comprehensive income
that cannot be reclassified into profit
197
or loss
1. Re-measure the variation of
the defined benefit plan
2. Other comprehensive
income that cannot be transferred to
P/L under the equity method
3. Changes in the fair value of
investment in other equity
instruments
4. Changes in the fair value of
the credit risk of the enterprise
5. Others
(II) Other comprehensive income
-522,554.00
that will be reclassified as P/L
1. Other comprehensive
income that can be transferred to P/L
under the equity method
2. Changes in the fair value of
investment in other creditor's rights
3. Financial assets reclassified
into other comprehensive income
4. Provisions for the credit
impairment of investment in other
creditor's rights
5. Cash flow hedge reserves
6. Currency translation
difference
7. Others -522,554.00
VI. Total Comprehensive Income 1,930,536,384.56 3,413,712,890.04
VII. Earnings per Share
(I) Basic Earnings per Share 0.65 1.16
(II) Diluted Earnings per Share 0.65 1.16
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2022 2021
I. Cash Flow Generated by
Operational Activities:
Cash from Sales of Merchandise
33,784,604,846.55 33,384,841,745.99
and Provision of Services
Net Increase in Customer's Bank
Deposits and Interbank Deposits
Net Increase in Borrowings from
the Central Bank
Net Increase in Borrowings from
Other Financial Institutions
Cash Arising from Receiving
Premiums for the Original Insurance
Contract
Net Amount Arising from
Reinsurance Business
Net Increase in Deposits and
Investments from Policyholders
198
Cash Arising from Interests,
Service Charges and Commissions
Net Increase in Borrowings from
Banks and Other Financial
Institutions
Net Increase in Repurchase
Business Funds
Net Amount of Cash Received
from the Vicariously Traded
Securities
Tax Refund 1,494,092,979.78 1,604,253,811.38
Other Received Cashes Related to
1,251,775,941.07 1,221,646,989.77
Operational Activities
Subtotal of cash inflow from
36,530,473,767.40 36,210,742,547.14
operational activities
Cash Paid for Merchandise and
23,777,092,221.87 23,903,491,799.57
Services
Net Increase in Loans and
Advances to Customers
Net Increase in Deposits with
Central Bank and Other Financial
Institutions
Cash Paid for Original Insurance
Contract Claims
Net increase of funds lent
Cash Paid for Interests, Service
Charges and Commissions
Cash Paid for Policy Dividends
Cash Paid to and for Employees 7,458,518,121.11 6,398,936,181.16
Cash Paid for Taxes and
2,068,760,288.72 2,121,025,465.57
Surcharges
Other Paid Cashes Related to
2,172,515,486.24 2,059,728,352.83
Operational Activities
Subtotal of cash outflow from
35,476,886,117.94 34,483,181,799.13
operational activities
Net cash flow generated by operating
1,053,587,649.46 1,727,560,748.01
activities
II. Cash Flow from Investment
Activities:
Cash Arising from Disposal of
2,264,115,058.67 1,463,356,586.35
Investments
Cash Arising from Investment
24,768,046.36 35,284,145.19
Incomes
Net Cash Arising from Disposal of
Fixed Assets, Intangible Assets and 11,943,847.27 48,030,451.90
Other Long-term Assets
Net Cash Arising from Disposal of
Subsidiaries and Other Business 665,433,193.86 385,714,582.64
Units
Other Received Cashes Related to
25,697,487.60 49,758,199.26
Investment Activities
Subtotal of cash inflow from
2,991,957,633.76 1,982,143,965.34
investment activities
Cash Paid for Purchase and 1,295,439,929.32 1,227,449,411.36
199
Construction of Fixed Assets,
Intangible Assets and Other Long-
term Assets
Cash Paid for Investments 2,238,484,786.11 2,589,050,059.94
Net Increase in Pledge Loans
Net Cash Paid for Acquisition of
Subsidiaries and Other Business
Units
Other Paid Cashes Related to
57,995,988.98 20,521,853.51
Investment Activities
Subtotal of cash outflows from
3,591,920,704.41 3,837,021,324.81
investment activities
Net amount of cash flow generated
-599,963,070.65 -1,854,877,359.47
by investment activities
III. Cash Flow from Financing
Activities:
Cash Arising from Absorbing
642,408,134.84 67,365,784.31
Investments
Including: Cash Arising from
Subsidiaries Absorbing Investments 32,548,502.84 67,365,784.31
by Minority Shareholders
Cash Arising from Borrowings 5,266,376,091.63 3,806,867,910.97
Other Received Cashes Related to
453,263.81 54,524,867.57
Financing Activities
Subtotal of cash inflow from financing
5,909,237,490.28 3,928,758,562.85
activities
Cash Paid for Debts Repayment 4,841,487,732.91 2,432,673,259.88
Cash Paid for Distribution of
Dividends and Profits or Payment of 910,569,303.98 885,055,753.43
Interests
Including: Dividends and Profits
Paid to Minority Shareholders by
Subsidiaries
Other Paid Cashes Related to
500,968,317.98 117,164,661.16
Financing Activities
Subtotal of cash outflow from
6,253,025,354.87 3,434,893,674.47
financing activities
Net cash flow generated by financing
-343,787,864.59 493,864,888.38
activities
IV. Impact of Fluctuation in Exchange
151,051,486.09 -107,424,194.13
Rate on Cash and Cash Equivalents
V. Net Increase in Cash and Cash
260,888,200.31 259,124,082.79
Equivalents
Add: Cash and Cash Equivalents
7,617,576,852.32 7,358,452,769.53
at the Commencement of the Period
VI. Cash and Cash Equivalents at the
7,878,465,052.63 7,617,576,852.32
End of the Period
6. Cash Flow Statement of the Parent Company
Unit: RMB
Item 2022 2021
I. Cash Flow Generated by
Operational Activities:
Cash from Sales of Merchandise 8,412,862,445.50 6,814,252,952.65
200
and Provision of Services
Tax Refund 505,983.44
Other Received Cashes Related to
1,025,365,997.09 897,991,518.57
Operational Activities
Subtotal of cash inflow from
9,438,228,442.59 7,712,750,454.66
operational activities
Cash Paid for Merchandise and
805,027,908.27 1,001,707,001.37
Services
Cash Paid to and for Employees 4,335,058,098.20 3,623,125,123.86
Cash Paid for Taxes and
1,263,894,274.07 1,415,807,182.17
Surcharges
Other Paid Cashes Related to
1,275,450,400.47 1,257,591,343.28
Operational Activities
Subtotal of cash outflow from
7,679,430,681.01 7,298,230,650.68
operational activities
Net cash flow generated by operating
1,758,797,761.58 414,519,803.98
activities
II. Cash Flow from Investment
Activities:
Cash Arising from Disposal of
1,235,609,621.67 1,809,031,326.07
Investments
Cash Arising from Investment
9,173,028.68 20,503,926.08
Incomes
Net Cash Arising from Disposal of
Fixed Assets, Intangible Assets and 18,870,107.90 146,923,237.40
Other Long-term Assets
Net Cash Arising from Disposal of
Subsidiaries and Other Business
Units
Other Received Cashes Related to
Investment Activities
Subtotal of cash inflow from
1,263,652,758.25 1,976,458,489.55
investment activities
Cash Paid for Purchase and
Construction of Fixed Assets,
480,624,220.25 369,346,869.72
Intangible Assets and Other Long-
term Assets
Cash Paid for Investments 989,118,779.17 3,445,226,468.00
Net Cash Paid for Acquisition of
Subsidiaries and Other Business
Units
Other Paid Cashes Related to
Investment Activities
Subtotal of cash outflows from
1,469,742,999.42 3,814,573,337.72
investment activities
Net amount of cash flow generated
-206,090,241.17 -1,838,114,848.17
by investment activities
III. Cash Flow from Financing
Activities:
Cash Arising from Absorbing
609,859,632.00
Investments
Cash Arising from Borrowings 1,893,632,141.60 2,180,070,170.57
Other Received Cashes Related to
2,488,594,518.78 2,184,087,134.95
Financing Activities
Subtotal of cash inflow from financing
4,992,086,292.38 4,364,157,305.52
activities
201
Cash Paid for Debts Repayment 1,393,066,910.69 1,127,003,259.88
Cash Paid for Distribution of
Dividends and Profits or Payment of 875,930,736.99 856,158,521.30
Interests
Other Paid Cashes Related to
2,751,592,825.48 1,638,664,236.33
Financing Activities
Subtotal of cash outflow from
5,020,590,473.16 3,621,826,017.51
financing activities
Net cash flow generated by financing
-28,504,180.78 742,331,288.01
activities
IV. Impact of Fluctuation in Exchange
613,656.19 -880,222.72
Rate on Cash and Cash Equivalents
V. Net Increase in Cash and Cash
1,524,816,995.82 -682,143,978.90
Equivalents
Add: Cash and Cash Equivalents
2,408,352,525.10 3,090,496,504.00
at the Commencement of the Period
VI. Cash and Cash Equivalents at the
3,933,169,520.92 2,408,352,525.10
End of the Period
202
7. Consolidated Statement of Changes in Owners' Equity
Amount of this period
Unit: RMB
2022
Shareholders' Equity Attributable to the Parent Company's Owner
Other Equity
Instruments Gene Minority Total
Item Other Spec Sharehol
Less: ral Sharehold
Share Prefe Perp Capital Compreh ial Surplus Undistribut Oth ders'
Treasury Risk Subtotal ers' Equity
Capital rred etual Oth Reserves ensive Rese Reserves ed Profits ers Equity
Share Rese
Stoc Bond ers Incomes rves
rves
ks s
I. Balance
at the 2,994,550 2,939,512 277,169, 76,005,7 1,553,691 16,331,01 23,617,60 552,741, 24,170,34
End of ,730.00 ,235.75 524.09 92.49 ,005.92 2,273.48 2,513.55 994.59 4,508.14
Last Year
Add:
Changes
in
Accountin
g Policies
Correcti
on of
Errors in
the
Previous
Period
Consoli
dated
under the
Same
Control
Others
203
II.
Balance
2,994,550 2,939,512 277,169, 76,005,7 1,553,691 16,331,01 23,617,60 552,741, 24,170,34
at the
,730.00 ,235.75 524.09 92.49 ,005.92 2,273.48 2,513.55 994.59 4,508.14
Start of
This Year
III.
Increases
or
Decrease
- -
s in This 38,610,44 1,010,697 332,690, 1,541,642, 2,219,196, 2,048,027,
39,063,4 171,169,
Period 0.00 ,007.50 107.91 518.19 405.06 251.19
52.72 153.87
(Mark "-"
for
Decrease
s)
(I) Total
- -
Compreh 2,324,356, 2,285,292, 2,222,583,
39,063,4 62,709,5
ensive 092.20 639.48 079.77
52.72 59.71
Income
(II)
Sharehol
ders'
38,610,44 476,971,7 332,690, 182,892,0 87,713,0 270,605,1
Contributi
0.00 22.71 107.91 54.80 91.86 46.66
on and
Reduction
in Capital
1． Com
mon
- -
stock 38,610,44 278,018,9 332,690, 848,502.
16,060,76 15,212,26
invested 0.00 05.02 107.91 84
2.89 0.05
by the
owner
2． Capit
al
Invested
by
Holders
204
of Other
Equity
Instrumen
ts
3． Amou
nt of
Share-
based
Payments 198,952,8 198,952,8 86,864,5 285,817,4
Recorded 17.69 17.69 89.02 06.71
into
Sharehol
ders'
Equity
4． Other
s
(III) Profit - - -
Distributio 782,713,5 782,713,5 782,713,5
n 74.01 74.01 74.01
1． Appro
priation of
Surplus
Reserves
2． Appro
priation of
General
Risk
Reserves
3． Distri
bution to
- - -
Owners
782,713,5 782,713,5 782,713,5
(or
74.01 74.01 74.01
Sharehol
ders)
4． Other
s
205
(IV)
Internal
Carry-
forward of
Sharehol
ders'
Equity
1． Capit
al
Reserves
Transferr
ed into
Capital
(or Share
Capital)
2． Surpl
us
Reserves
Transferr
ed into
Capital
(or Share
Capital)
3． Surpl
us
Reserves
Covering
Losses
4． Carry
-forward
retained
earnings
of the
variation
of the
defined
benefit
206
plan
5． Other
Carry-
forward
Retained
Earnings
of the
Compreh
ensive
Income
6. Others
(V)
Special
Reserves
1． Withd
rawal in
this
period
2． Used
in This
Period
-
(VI) 533,725,2 533,725,2 337,552,5
196,172,
Others 84.79 84.79 98.77
686.02
IV.
Balance
at the 3,033,161 3,950,209 609,859, 36,942,3 1,553,691 17,872,65 25,836,79 381,572, 26,218,37
End of ,170.00 ,243.25 632.00 39.77 ,005.92 4,791.67 8,918.61 840.72 1,759.33
This
Period
Amount of Previous Period
Unit: RMB
2021
Item Shareholders' Equity Attributable to the Parent Company's Owner Minority Total
Share Other Equity Capital Less: Other Spec Surplus Gene Undistribut Oth Subtotal Sharehol Sharehold
207
Capital Instruments Reserves Treasury Compreh ial Reserves ral ed Profits ers ders' ers' Equity
Prefe Perp Share ensive Rese Risk Equity
rred etual Oth Incomes rves Rese
Stoc Bond ers rves
ks s
I. Balance
at the 2,995,579 1,989,655 581,968, 61,157,5 1,553,691 13,754,91 19,773,03 430,611, 20,203,64
End of ,590.00 ,334.05 930.89 23.13 ,005.92 5,904.19 0,426.40 683.70 2,110.10
Last Year
Add:
Changes
in
Accountin
g Policies
Correcti
on of
Errors in
the
Previous
Period
Consoli
dated
under the
Same
Control
O
thers
II.
Balance
2,995,579 1,989,655 581,968, 61,157,5 1,553,691 13,754,91 19,773,03 430,611, 20,203,64
at the
,590.00 ,334.05 930.89 23.13 ,005.92 5,904.19 0,426.40 683.70 2,110.10
Start of
This Year
III.
- -
Increases 949,856,9 14,848,2 2,576,096, 3,844,572, 122,130, 3,966,702,
1,028,860 304,799,
or 01.70 69.36 369.29 087.15 310.89 398.04
.00 406.80
Decrease
208
s in This
Period
(Mark "-"
for
Decrease
s)
(I) Total
Compreh 14,848,2 3,378,410, 3,393,259, 33,006,9 3,426,266,
ensive 69.36 889.60 158.96 34.05 093.01
Income
(II)
Sharehol
ders' - - -
291,559,3 85,362,2 376,921,6
Contributi 1,028,860 12,211,17 304,799,
75.81 54.73 30.54
on and .00 0.99 406.80
Reduction
in Capital
1． Com
mon
- - -
stock 296,308,6 65,534,2 361,842,9
1,028,860 7,461,896 304,799,
invested 50.60 69.52 20.12
.00 .20 406.80
by the
owner
2． Capit
al
Invested
by
Holders
of Other
Equity
Instrumen
ts
3． Amou
nt of - -
19,827,9 13,247,19
Share- 6,580,789 6,580,789.
85.21 5.63
based .58 58
Payments
209
Recorded
into
Sharehol
ders'
Equity
4． Other 1,831,514 1,831,514. 1,831,514.
s .79 79 79
(III) Profit - - -
Distributio 802,314,5 802,314,5 802,314,5
n 20.31 20.31 20.31
1． Appro
priation of
Surplus
Reserves
2． Appro
priation of
General
Risk
Reserves
3． Distri
bution to
- - -
Owners
802,314,5 802,314,5 802,314,5
(or
20.31 20.31 20.31
Sharehol
ders)
4． Other
s
(IV)
Internal
Carry-
forward of
Sharehol
ders'
Equity
1． Capit
al
210
Reserves
Transferr
ed into
Capital
(or Share
Capital)
2． Surpl
us
Reserves
Transferr
ed into
Capital
(or Share
Capital)
3． Surpl
us
Reserves
Covering
Losses
4． Carry
-forward
retained
earnings
of the
variation
of the
defined
benefit
plan
5． Other
Carry-
forward
Retained
Earnings
of the
Compreh
ensive
211
Income
6. Others
(V)
Special
Reserves
1． Withd
rawal in
this
period
2． Used
in This
Period
(VI) 962,068,0 962,068,0 3,761,12 965,829,1
Others 72.69 72.69 2.11 94.80
IV.
Balance
at the 2,994,550 2,939,512 277,169, 76,005,7 1,553,691 16,331,01 23,617,60 552,741, 24,170,34
End of ,730.00 ,235.75 524.09 92.49 ,005.92 2,273.48 2,513.55 994.59 4,508.14
This
Period
8. Statement of Changes in Owners' Equity of the Parent Company
Amount of this period
Unit: RMB
2022
Other Equity Instruments Other
Item Less: Special Total
Share Preferr Perpet Capital Comprehen Surplus Undistributed Othe
Othe Treasury Reserv Shareholders'
Capital ed ual Reserves sive Reserves Profits rs
rs Share es Equity
Stocks Bonds Incomes
I. Balance at 2,994,550,73 2,925,020,64 277,169,52 1,553,691,00 17,370,986,70 24,567,079,57
the End of 0.00 9.68 4.09 5.92 9.52 1.03
212
Last Year
Add:
Changes in
Accounting
Policies
Correction
of Errors in
the Previous
Period
Others
II. Balance at
2,994,550,73 2,925,020,64 277,169,52 1,553,691,00 17,370,986,70 24,567,079,57
the Start of
0.00 9.68 4.09 5.92 9.52 1.03
This Year
III. Increases
or Decreases
in This 38,610,440.0 863,391,499. 332,690,10 1,191,305,394 1,760,617,225
Period (Mark 0 41 7.91 .01 .51
"-" for
Decreases)
(I) Total
1,930,536,384 1,930,536,384
Comprehensi
.56 .56
ve Income
(II)
Shareholders
' Contribution 38,610,440.0 419,952,914. 332,690,10 125,873,246.7
and 0 63 7.91 2
Reduction in
Capital
1． Common
stock 38,610,440.0 278,018,905. 332,690,10 -
invested by 0 02 7.91 16,060,762.89
the owner
2． Capital
Invested by
Holders of
213
Other Equity
Instruments
3． Amount
of Share-
based
Payments 141,934,009. 141,934,009.6
Recorded 61 1
into
Shareholders
' Equity
4． Others
- -
(III) Profit
782,713,574.0 782,713,574.0
Distribution
1 1
1． Appropri
ation of
Surplus
Reserves
2． Distributi
on to Owners - -
(or 782,713,574.0 782,713,574.0
Shareholders 1 1
)
3． Others
(IV) Internal
Carry-
forward of
Shareholders
' Equity
1． Capital
Reserves
Transferred
into Capital
(or Share
Capital)
2． Surplus
214
Reserves
Transferred
into Capital
(or Share
Capital)
3． Surplus
Reserves
Covering
Losses
4． Carry-
forward
retained
earnings of
the variation
of the
defined
benefit plan
5． Other
Carry-
forward
Retained
Earnings of
the
Comprehensi
ve Income
6. Others
(V) Special
Reserves
1． Withdraw
al in this
period
2． Used in
This Period
443,438,584. 486,921,168.2
(VI) Others 43,482,583.46
78 4
IV. Balance 3,033,161,17 3,788,412,14 609,859,63 1,553,691,00 18,562,292,10 26,327,696,79
215
at the End of 0.00 9.09 2.00 5.92 3.53 6.54
This Period
Amount of Previous Period
Unit: RMB
2021
Other Equity Instruments Other
Item Less: Special Total
Share Preferr Perpet Capital Comprehen Surplus Undistributed Othe
Othe Treasury Reserv Shareholders'
Capital ed ual Reserves sive Reserves Profits rs
rs Share es Equity
Stocks Bonds Incomes
I. Balance at
2,995,579,59 1,976,156,77 581,968,93 1,553,691,00 14,759,065,78 20,703,046,78
the End of 522,554.00
0.00 5.91 0.89 5.92 5.79 0.73
Last Year
Add:
Changes in
Accounting
Policies
Correction
of Errors in
the Previous
Period
Others
II. Balance at
2,995,579,59 1,976,156,77 581,968,93 1,553,691,00 14,759,065,78 20,703,046,78
the Start of 522,554.00
0.00 5.91 0.89 5.92 5.79 0.73
This Year
III. Increases
or Decreases
-
in This - 948,863,873. 2,611,920,923 3,864,032,790
304,799,40 -522,554.00
Period (Mark 1,028,860.00 77 .73 .30
6.80
"-" for
Decreases)
(I) Total
3,414,235,444 3,413,712,890
Comprehensi -522,554.00
.04 .04
ve Income
216
(II)
Shareholders
- -
' Contribution - 286,805,225.7
16,965,321.0 304,799,40
and 1,028,860.00 7
3 6.80
Reduction in
Capital
1． Common
-
stock - - 296,308,650.6
304,799,40
invested by 1,028,860.00 7,461,896.20 0
6.80
the owner
2． Capital
Invested by
Holders of
Other Equity
Instruments
3． Amount
of Share-
based
Payments -
-9,503,424.83
Recorded 9,503,424.83
into
Shareholders
' Equity
4． Others
- -
(III) Profit
802,314,520.3 802,314,520.3
Distribution
1 1
1． Appropri
ation of
Surplus
Reserves
2． Distributi
on to Owners - -
(or 802,314,520.3 802,314,520.3
Shareholders 1 1
)
217
3． Others
(IV) Internal
Carry-
forward of
Shareholders
' Equity
1． Capital
Reserves
Transferred
into Capital
(or Share
Capital)
2． Surplus
Reserves
Transferred
into Capital
(or Share
Capital)
3． Surplus
Reserves
Covering
Losses
4． Carry-
forward
retained
earnings of
the variation
of the
defined
benefit plan
5． Other
Carry-
forward
Retained
Earnings of
the
218
Comprehensi
ve Income
6. Others
(V) Special
Reserves
1． Withdraw
al in this
period
2． Used in
This Period
965,829,194. 965,829,194.8
(VI) Others
80 0
IV. Balance
2,994,550,73 2,925,020,64 277,169,52 1,553,691,00 17,370,986,70 24,567,079,57
at the End of
0.00 9.68 4.09 5.92 9.52 1.03
This Period
219
III. Basic Information about the Company
Zhejiang Dahua Technology Co., Ltd. (hereinafter referred to as "Company" or "the Company") was incorporated
under the official approval document No. 18 [2002] issued by Zhejiang Provincial People's Government Work Leading
Group for Enterprise Listing in June 2002, a stock corporation established on the basis of overall change of the former
Hangzhou Dahua Information Technology Co., Ltd. It was co-founded by five natural persons, including Fu Liquan,
Chen Ailing, Zhu Jiangming, Liu Yunzhen and Chen Jianfeng.
On April 22, 2008, the Company issued 16.8 million shares of common stock in RMB to the general public for the first
time under the approval document No. 573 [2008] Securities Regulatory Issuance, issued by China Securities
Regulatory Commission ("CSRC"). It was listed on Shenzhen Stock Exchange on May 20, 2008 with a registered
capital of RMB 66.8 million and the change registration filed with Administration for Industry and Commerce was
completed on May 23, 2008. The Company's unified social credit code is 91330000727215176K. The Company falls
within the intelligent Internet of Things industry.
As of December 31, 2022, the Company has issued a total of 3,033,161,170 shares, with a registered capital of
3,033,161,170.00 yuan. The registered address is No.1187, Bin'an Road, Binjiang District, Hangzhou, and the
headquarters located at No.1399, Binxing Road, Binjiang District, Hangzhou.
The main operating activities of the Company include the follows: general items: software development; manufacturing
of digital video surveillance systems; marketing of digital video surveillance systems manufacturing of safety
equipment; marketing of safety equipment; manufacturing of Iot equipment; marketing of Iot devices; research and
development of Iot technologies; Iot technical services; Iot application services; big data services; services of 5G
communication technologies; manufacturing of computer hardware, software and peripheral equipment; wholesale of
computer hardware, software and auxiliary equipment; retail of computer hardware, software and auxiliary equipment;
manufacturing of cloud computing equipment; marketing of cloud computing equipment; technical services of cloud
computing equipment; manufacturing of communication devices; marketing of communication devices; manufacturing
of mobile communication devices; marketing of mobile communication devices; manufacturing of network equipment;
marketing of network equipment; manufacturing of display devices; marketing of display devices; manufacturing of
intelligent unmanned aerial vehicles; marketing of intelligent unmanned aerial vehicles; manufacturing of general
equipment (not including manufacturing of special equipment); manufacturing of radars and auxiliary equipment;
research and development of distribution switch controllers; manufacturing of distribution switch controllers; marketing
of distribution switch controllers; manufacturing of instruments and apparatuses; marketing of instruments and
apparatuses; manufacturing of electronic components; wholesale of electronic components; retail of electronic
components; manufacturing of photovoltaic equipment and components; marketing of photovoltaic equipment and
components; manufacturing of metal products for safety and fire control; manufacturing of lighting appliances;
marketing of lighting appliances; research and development of mechanical equipment; marketing of mechanical
equipment; manufacturing of mechanical and electrical equipment; marketing of mechanical and electrical equipment;
marketing of electronic products; manufacturing of wearable intelligent devices; marketing of wearable intelligent
devices; manufacturing of metal structures; marketing of metal structures; manufacturing of stereo equipment;
marketing of stereo equipment; manufacturing of special equipment for environmental protection; marketing of special
equipment for environmental protection; production of special labor protection supplies; marketing of special labor
protection supplies; manufacturing of VR equipment; online marketing (except for marketing of licensed commodities);
technical services, technology development, technology consultation, technology exchange, technology transfer,
technology popularization; services of information system integration; integration of intelligent control systems; AI
public data platform; system integration services of AI applications; computer system services; Internet data services;
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data processing and storage support services; security system monitoring services; electronic and mechanical
equipment maintenance (not including special equipment); leasing services (not including licensed leasing services);
parking services; environmental protection monitoring; import and export of goods; import and export of technologies
(the business license holder can carry out business activities independently according to law except for the items
subject to approval according to law). Licensed items: marketing of Class II and III ray devices; production of
radioisotopes (except for radiopharmaceuticals for positron emission computed tomography); marketing of Class II, III,
IV and V radioactive sources; design of construction engineering; production of Class II and III ray devices (for the
items which are subject to approval according to law, business activities can be carried out only after being approved
by relevant competent authority, and the specific business items shall be subject to the approval).
The actual controllers of the Company are Fu Liquan and Chen Ailing.
This financial statement has been approved by Board of Directors on April 27, 2023.
For details of the scope of the consolidated financial statements for the current period, refer to Notes IX “Equity in
Other Entities”, and for details of the changes in the scope of the consolidated financial statement for the current
period, refer to Notes VIII “Changes in the Scope of Consolidation”.
IV. Basis for Preparing the Financial Statement
1. Basis for the preparation
The Company prepares the financial statement, as a going concern, based on transactions and matters that have
actually occurred, in accordance with Accounting Standards for Business Enterprises - Basic Standards issued by the
Ministry of Finance and all specific accounting standards, application guidelines for accounting standards for business
enterprises, explanations on the accounting standards for business enterprises and other related regulations
(hereinafter referred to as "Accounting Standards for Business Enterprises" collectively), and the disclosure provisions
in the Preparation Rules for Information Disclosures by Companies Offering Securities to the Public No. 15 - General
Provisions on Financial Reports issued by CSRC.
2. Going concern
The Company has the capability to continue as a going concern for at least 12 months as of the end of current
reporting period, without any significant item affecting the capability for continuing as a going concern.
V. Significant Accounting Polices and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
The following disclosures cover the specific accounting policies and accounting estimates formulated by the Company
according to the characteristics of its production and operation.
1. Statement on compliance with Accounting Standards for Business Enterprises
This financial statement is in compliance with the requirements in the Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance and presents truly and completely the financial position of the merged
companies and the parent company as at December 31, 2022 and the operating results and cash flows of the merged
companies and the parent company in 2022.
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2. Accounting period
The fiscal year of the Company 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
For the domestic operating entities of the Company and its overseas operating entity Dahua Technology (HK) Limited,
the functional currency is Renminbi ("RMB"). The other overseas operating entities take the appropriate currency as
the functional currency on the basis of the currency in the major economic environment in which they operate. This
financial statement is presented in RMB.
5. The accounting treatment of business combinations involving enterprises under common
control and business combinations not involving enterprises under common control
Business combination involving entities under common control: The assets and liabilities acquired by the merging
party in business combination (including goodwill incurred in the acquisition of the merged party by ultimate controlling
party) shall be measured at the book value of the assets and liabilities of the merged party in the consolidated financial
statements of the ultimate controlling party on the date of combination. The difference between the book value of the
net assets obtained and the book value of the consideration paid for the combination (or total nominal value of the
issued shares) is adjusted to capital premium in capital reserve. Adjustments shall be made to retained earnings in the
event that the share premiums in the capital reserves are not sufficient for write-down.
Business combination involving entities not under common control: The cost of combination is the fair value of the
assets paid, the liabilities incurred or assumed, and the equity securities issued by the acquirer to acquire the control
of the acquiree on the date of acquisition. Where the cost of combination is higher than the fair value of the identifiable
net assets acquired from the merging party in business combination, such difference shall be recognized as goodwill;
where the cost of combination is less than the fair value of the identifiable net assets acquired from the merging party
in business combination, such difference shall be charged to the profit or loss for the period. The identifiable assets,
liabilities and contingent liabilities of the acquiree obtained in the combination that satisfy the recognition criteria shall
be measured by the fair value on the date of acquisition.
The fees which are directly related to the business combination shall be recognized as the profit or loss in the period
when the costs are incurred; the transaction expenses of issuing equity securities or debt securities for business
merger shall be initially capitalized for equity securities or debt securities.
6. Preparation method of consolidated financial statements
(1) Scope of Consolidation
The scope of consolidation of the consolidated financial statements is based on controlling interests and includes the
Company and all the subsidiaries. Control means that the Company has the power with respect to the investee to
obtain variable returns by engaging in relevant activities of the investee, and has the ability to influence the amount of
its returns by applying its power with respect to the investee.
(2) Procedures of Consolidation
222
The Company treats the enterprise group as a single accounting entity and prepares the consolidated financial
statements in accordance with the unified accounting policy to reflect the Group's overall financial position, operating
results, and cash flow. The influence from the internal transactions between the Company and the subsidiaries or
between different subsidiaries shall be eliminated. Internal transactions show that impairment loss of relevant assets
shall be recognized as such loss in full. In preparing the consolidated financial statements, where the accounting
policies and the accounting periods are inconsistent between the Company and subsidiaries, the financial statements
of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company.
The shares belonging to minority shareholders in owner's equity, the net profit or loss and the comprehensive income
of the subsidiary of the current period are presented separately under the owners' equity in the consolidated balance
sheet, the net profits, and the total comprehensive income in the consolidated income statement respectively. Where
losses attributable to the minority shareholders of a subsidiary of the current period exceed the minority shareholders'
interest entitled in the shareholders' equity of the subsidiary at the beginning of the period, the excess shall be offset
against the equity of minority shareholders.
① Acquisition of Subsidiaries or Business
For acquisition of subsidiaries or business due to business combination involving entities under common control during
the reporting period, the operating results and cash flow of such subsidiaries or business from the beginning to the end
of the reporting period when the merger occurs are included in the consolidated income statement; and the opening
balance and comparative figures of the consolidated financial statements should be adjusted simultaneously as if the
consolidated reporting entity has been in existence since the beginning of the control by the ultimate controlling party.
In connection with imposing control over the investee under common control due to additional investment and other
reasons, the equity investment held before gaining the control of the combined party is recognized as relevant profit or
loss, other comprehensive income and changes in other net assets at the later of the date of acquisition of the original
equity and the date when the combining and the merged parties are under common control, and shall be written down
to the opening balance retained earnings or current profit or loss in the comparative reporting period.
Additional subsidiaries or business due to business combination involving entities not under common control during
the reporting period will be included in the consolidated financial statements as of the date of acquisition on the basis
of the fair value of the identifiable assets, liabilities or contingent liabilities determined on the date of acquisition.
In connection with imposing control over the investee not under common control due to additional investment and
other reasons, the equity of acquiree held before acquisition date shall be remeasured at the fair value of such equity
on the acquisition date and the difference between fair value and book value shall be recognized as investment
income in current period. Other comprehensive income that may later be reclassified into profit or loss and changes in
other owner's equity accounted by equity method contained in the acquiree's equity held before the acquisition date
shall be transferred to current investment gains on the date of acquisition.
② Disposal of Subsidiaries or Business
a. General Treatment
When losing control of the investee due to partial disposal of the equity investment, or any other reasons, the
remaining equity investment is remeasured at fair value at the date in which control is lost. The sum of consideration
received from disposal of equity investment and the fair value of the remaining equity investment, net of the difference
between the sum of the Company's previous share of the subsidiary's net assets recorded from the acquisition date or
combination date and the sum of goodwill, is recognized in investment income in the period in which control is lost.
Other comprehensive income that may later be reclassified into profit or loss and changes in other owner's equity
accounted by equity method in connection with the equity investment of the original subsidiaries shall be transferred to
the current investment gains when the control is lost.
b. Disposal of Subsidiary Achieved by Stages
223
When the equity investment of subsidiaries is disposed of through multiple transactions until the control is lost, such
multiple transactions are generally treated as a package deal if the terms, conditions, and economic impact of the
transactions to dispose of the subsidiary's equity investment satisfy one or more of the following conditions:
ⅰ. These transactions are achieved at the same time or the mutual effects on each other are considered;
ⅱ. A complete set of commercial results can be achieved with reference to the series of transactions as a whole;
ⅲ. Occurrence of a transaction depends on the occurrence of at least one of the other transactions;
ⅳ. One transaction recognized separately is not economical, but it is economical when considered together with other
transactions.
If multiple transactions are recognized as a package deal, these transactions shall be subject to accounting treatment
as a transaction to dispose of the subsidiaries and lose control. The differences between the price on each disposal
and disposal of investment on the subsidiary's net assets shall be recognized in other comprehensive income in the
consolidated financial statements, and included in profit or loss for the period when the control is lost.
If the transactions are not a package deal, accounting treatment for partial disposal of equity investments of the
subsidiary without losing control shall be applied before control is lost. When the control is lost, general accounting
treatment for disposal of a subsidiary shall be used.
③ Acquisition of Minority Equity of Subsidiaries
The Company shall adjust the share premium in the capital reserve of the consolidated balance sheet with respect to
any difference between the long-term equity investment arising from the purchase of minority interest and the net
assets attributing to the parent company continuously calculated on the basis of the newly increased share proportion
as of the acquisition date or date of combination or, adjust the retained earnings if the share premium in the capital
reserve is insufficient for write-down.
④ Partial Disposal of Equity Investment in Subsidiaries without Losing Control
The difference between the disposal consideration and the share of net assets in the subsidiaries calculated from
disposal of long-term equity investment as of the date of acquisition or combination date shall be adjusted to share
premium in the capital reserve in the consolidated balance sheet. Adjustments shall be made to retained earnings in
the event that the share premiums in the capital reserves are not sufficient for write-down.
7. Classification of joint venture arrangement and accounting treatment methods for joint
operation
Joint venture arrangement is classified into joint operation and joint venture.
Joint operation means the joint venture arrangement in which the joint venture parties have the assets and assume the
liabilities related to such arrangement.
The Company recognizes the following items related to the share of interests in the joint operation:
(1) The assets separately held by the Company and assets jointly held as recognized by the share of the Company;
(2) The liabilities separately assumed by the Company and liabilities jointly assumed as recognized by the share of the
Company;
(3) Income from selling the share of the Company in the output of the joint operation;
(4) Income from joint operation of the sold output as recognized by the share of the Company;
(5) The expenses separately incurred and expenses jointly incurred as recognized by the share of the Company;
The Company adopts the equity method for the investment of the joint venture. For details, refer to this section
Financial Report - V. Significant Accounting Polices and Accounting Estimates - 19. Long-term equity investment.
224
8. Recognition criteria of cash and cash equivalents
Cash means the cash on hand and deposits that are available for payment at any time of the Company. Cash
equivalents mean the investments held by the Company which are short-term, highly liquid, easy to be converted into
known amounts of cash and have little risk of value change.
9. Conversion of transactions and financial statements denominated in foreign currencies
(1) Foreign currency transactions
Foreign currency transactions shall be translated into functional currency at the spot exchange rate on the day when
the transactions occurred.
The Balance of foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet
date. The resulting exchange differences are recognized in profit or loss for the current period, except for those
differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency for
acquisitions, construction, or production of the qualified assets, which should be included in current profit and loss.
2. Translation of foreign currency financial statements
All assets and liabilities items in balance sheet are translated based on spot exchange rate on the balance sheet date;
owners' equity items other than "undistributed profit" are translated at a spot exchange rate when accrued. Revenue
and expense items in the income statement are translated at a spot exchange rate at the transaction occurrence date.
For disposal of overseas operation, the translation difference as stated in the foreign currency financial statements
relating to overseas operation, is accounted for in the profit and loss account in the current period from owners' equity
items.
10. Financial instruments
A financial asset, financial liability or equity instrument is recognized when the Company becomes a party to the
financial instrument contract.
(1) Classification of the financial instruments
According to the Company's business model for management of the financial assets and the contractual cash flow
features of the financial assets, the financial assets, when initially recognized, are classified as: financial assets at
amortized cost, financial assets at fair value through other comprehensive income (debt instruments) and financial
assets at fair value through profit or loss.
The financial assets which satisfy the following conditions, and are not designated as financial assets at fair value
through profit or loss will be classified by the Company as financial assets at amortized cost:
－ The business model is designed to collect the contractual cash flow;
－ The contractual cash flow is only used to pay the principal and the interests based on the outstanding principal
amount.
The financial assets which satisfy the following conditions, and are not designated as financial assets at fair value
through profit or loss will be classified by the Company as the financial assets (equity instruments) at fair value through
other comprehensive income:
－ The business model is designed to both collect the contractual cash flow and sell the financial assets;
－ The contractual cash flow is only used to pay the principal and the interests based on the outstanding principal
amount.
For non-trading investments in equity instruments, the Company may, at the time of initial recognition, irrevocably
designate them as financial assets (equity instruments) at fair value through other comprehensive income. Such
225
designation is based on the individual investments, and relevant investments fall within the definition of the equity
instrument from the perspective of the issuer.
Except for the financial assets at amortized cost, and financial assets at fair value through other comprehensive
income, all the remaining financial assets are classified as the financial assets at fair value through profit or loss. At the
time of initial recognition, the financial assets which should have been classified as financial assets at amortized cost
or financial assets at fair value through other comprehensive income can be irrevocably designated by the Company
as financial assets at fair value through profit or loss if the accounting mismatch can be eliminated or significantly
reduced.
The financial liabilities, when initially recognized, are classified as: financial liabilities at fair value through profit or loss
and financial liabilities at amortized cost.
Financial liabilities which meet one of the following conditions will be, when initially measured, designated as financial
liabilities at fair value through profit or loss:
1) Such designation may be able to eliminate or significantly reduce the accounting mismatch.
2) The portfolio of financial liabilities or the portfolio of financial assets and financial liabilities shall be subject to
management and performance evaluation on the basis of fair value according to the enterprise risk management or
investment strategy contained in the formal documentations, and a report shall be made to the key management
personnel within the enterprise on this basis.
3) Such financial liabilities shall contain embedded derivatives to be split separately.
(2) Recognition and measurement of financial instruments
① Financial assets at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term
receivables and creditors investment, which shall be initially measured at fair value, and the relevant transaction
expenses should be initially capitalized; The accounts receivable that do not contain material financing compositions
and those for which the Company decides to not take into account the financing compositions of no more than one
year shall be initially measured at the contract transaction price.
The interest calculated by effective interest method during the holding period is recorded into the current profit and
loss.
At the time of recovery or disposal, the difference between the price obtained and the book value shall be included in
the current profit or loss.
② Financial assets measured at fair value and whose changes are included in other comprehensive income (debt
instruments)
Financial assets measured at fair value and its changes are included in other comprehensive income (debt
instruments) include receivables financing and investments in other creditor's rights. They are initially measured at fair
value, and the relevant transaction expenses should be initially capitalized. These financial assets are subsequently
measured at fair value, and the change in fair value, other than the interest, the impairment loss or profit and the profit
or loss on foreign exchange, shall be included in other comprehensive income.
Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be
removed from other comprehensive income and included in the profit or loss for the period.
③ Financial assets measured at fair value and whose changes are included in other comprehensive income (equity
instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in other
equity instruments. They are initially measured at fair value, and the transaction expenses shall be initially capitalized.
These financial assets are subsequently measured at fair value, and the change in fair value shall be included in other
comprehensive income. The dividends obtained shall be included in the profit or loss for the period.
226
Upon derecognition, the cumulative profits or losses previously included in other comprehensive income shall be
removed from other comprehensive income and included in the carry-forward retained earnings.
④ Financial assets measured at fair value and whose changes are included in the current profit or loss
Financial assets at fair value through profit or loss include trading financial assets, derivative financial assets, and
other non-current financial assets. They are initially measured at fair value, and the transaction expenses related to
them are included in the current profit or loss. These financial assets are subsequently measured at fair value, and the
change in fair value shall be included in the profit or loss for the period.
⑤ Financial liabilities at fair value through profit or loss in this period
Financial liabilities at fair value through profit or loss include trading financial liabilities and derivative financial liabilities.
They are initially measured at fair value, and the transaction expenses related to them are included in the profit or loss
for the period. These financial liabilities are subsequently measured at fair value, and the change in fair value shall be
included in the profit or loss for the period.
Upon derecognition, the difference between their book value and the consideration paid is included in the profit or loss
for the period.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term loans, notes payable, accounts payable, other payables, long-
term loans, bonds payable, and long-term payables. They are initially measured at fair value, and the transaction
expenses shall be initially capitalized.
The interest calculated by effective interest method during the holding period is recorded into the current profit and
loss.
Upon derecognition, the difference between the consideration paid and the book value of these financial liabilities is
included in the current profit or loss.
(3) Derecognition and transfer of financial assets
When one of the following conditions is met, financial assets are derecognized by the Company:
－ The contractual right to receive cash flows from financial assets is terminated;
－ The financial assets have been transferred and nearly all the risks and rewards related to the ownership of the
financial assets have been transferred to the transferee;
－ The financial assets have been transferred and although the Company neither transfers or retains all the risks and
rewards related to the ownership of the financial assets, the Company retains no control of the financial assets;
The financial assets when transferred will not be derecognized if the Company has retained nearly all the risks and
rewards related to the ownership of the financial assets.
The substance-over-form principle shall be adopted while making judgment on whether the transfer of financial assets
satisfies the above conditions for termination of recognition.
The transfer of financial assets can be classified into entire transfer and partial transfer. If the transfer of an entire
financial asset satisfies the conditions for termination of recognition, the difference between the two amounts below
shall be recorded into profit or loss for the period:
① The book value of the financial asset transferred;
② The consideration received as a result of the transfer, plus the accumulative amount of the change in fair value
previously recorded into the owners' equity (in cases where the transferred financial assets are financial assets
measured at fair value and whose changes are included in other comprehensive income (debt instruments)).
If the partial transfer of financial assets satisfies the conditions for termination of recognition, the overall book value of
the transferred financial asset shall be apportioned according to their respective relative fair value between the
recognition terminated part and the remaining part, and the difference between the two amounts below shall be
recorded into profit or loss for the current period:
227
② The book value of the recognition terminated portion;
② The sum of consideration of the derecognized portion and the corresponding portion of accumulated change in fair
value previously recorded into owners' equity (in cases where the transferred financial assets are financial assets
measured at fair value and whose changes are included in other comprehensive income (debt instruments)).
Financial assets will still be recognized if they fail to satisfy the conditions for termination of recognition, with the
consideration received recognized as a financial liability.
(4) Derecognition of financial liabilities
When the current obligation under a financial liability is completely or partially discharged, the recognition of the whole
or relevant portion of the liability is terminated; an agreement is entered between the Company and a creditor to
replace the original financial liabilities with new financial liabilities with substantially different terms, terminate the
recognition of the original financial liabilities as well as recognize the new financial liabilities.
If all or part of the contract terms of the original financial liabilities are substantially amended, the recognition of the
original financial liabilities will be terminated in full or in part, and the financial liabilities whose terms have been
amended shall be recognized as a new financial liability.
When recognition of financial liabilities is terminated in full or in part, the difference between the book value of the
financial liabilities terminated and the consideration paid (including transferred non-cash assets or new financial liability)
is recognized in profit or loss for the current period.
Where the Company repurchases part of its financial liabilities, the book value of such financial liabilities will be
allocated according to the relative fair value between the continued recognized part and terminated part on the
repurchase date. The difference between the book value of the financial liabilities terminated and the consideration
paid (including transferred non-cash assets or new financial liability) is recognized in profit or loss for the current period.
(5) Method of determining the fair values of financial assets and liabilities
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active
market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation
technique. The Company uses the valuation technique when it is applicable under current conditions and there are
enough available data and other information to support and the technique should maximize the use of relevant
observable. It chooses the inputs which are consistent with the asset or liability's characteristics considered by market
participants in the transaction of the relevant asset or liability and makes the maximum use of relevant observable
inputs. Unobservable inputs are used under the circumstance that the relevant observable inputs cannot be obtained
or not feasible.
(6) Test method and accounting treatment for impairment of financial assets
The Company estimates the expected credit loss on the financial assets at amortized cost, the financial assets at fair
value through other comprehensive income (debt instruments), and the financial guarantee contracts, either alone or in
combination.
Taking into the reasonable and well-grounded information including past matters, current situation and prediction of
future economic conditions, the Company calculates the possibly weighted amount of the present value of the
difference between the cash flows receivable under the contract and the cash flows expected to be received, taking
the risk of default as the weight, and recognizes the expected credit loss.
If the credit risk of this financial instrument has been significantly increased upon initial recognition, the Company
measures its loss provision in accordance with the amount equivalent to the expected credit loss of the financial
instrument throughout the duration; if the credit risk of this financial instrument is not significantly increased upon initial
recognition, the Company will measure the loss provision of this financial instrument by the amount of its expected
credit loss in the 12 months to come. The increased or reversed amount of the loss provision resulting therefrom is
included in the current profit or loss as the impairment loss or profit.
228
By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on the initial
recognition date, the Company determines the relative change in the risk of default over the expected life of financial
instruments to assess whether the credit risk of financial instruments has increased significantly since initial
recognition. If the financial instrument becomes overdue for more than 30 days, the Company believes that the credit
risk of this financial instrument has been significantly increased, unless there are concrete evidences that the credit
risk of this financial instrument has not been significantly increased upon initial recognition.
If the financial instrument carries low credit risk at the balance sheet date, the Company believes that the credit risk of
this financial instrument is not significantly increased upon initial recognition.
If there are objective evidences showing that a certain financial asset has been subject to credit impairment, the
Company will accrue impairment provision for this financial asset on the individual asset basis.
The Company will always measure the loss provision for the accounts receivable and contract assets arising from the
transactions regulated by "Accounting Standard for Business Enterprises No.14 — Revenue" (2017), whether they
contain material financing compositions or not, by the amount of the expected credit loss throughout the duration.
For the lease receivables, the Company will always measure the loss provision for the accounts receivable, by the
amount of the expected credit loss throughout the duration.
If the Company no longer reasonably expects that the cash flow of the financial asset contract can be recovered as a
whole or in part, the book balance of such financial assets will be directly reduced.
11. Notes receivable
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial
instruments
12. Accounts receivable
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial
instruments
13. Receivables financing
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial
instruments
14. Other receivables
Determination method and accounting treatment for the expected credit loss of other receivables
Refer to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial
instruments
15. Inventories
(1) Category of inventory
Inventories are classified as raw materials, commodity stocks, products in progress and materials commissioned for
processing.
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The inventories are initially measured at cost, which comprises the cost of purchase, cost of conversion and other
expenditure incurred in bringing the inventories to their present location and condition.
(2) Determination of cost
Cost of inventories is determined using the weighted average method.
(3) Basis for the determination of net realizable value and different type of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. When the cost of
inventories is higher than their net realizable value, reserve for stock depreciation shall be accrued. The net realizable
value means the amount after deducting the estimated cost of completion, estimated selling expenses and relevant
taxes from the estimated selling price of inventories in the daily activities.
Net realizable value of held-for-sale commodity stocks, such as finished goods, goods-in-stock, and held-for-sale raw
materials, during the normal course of production and operation, shall be determined by their estimated sales less the
related selling expenses and taxes; the net realizable value of material inventories, which need to be processed,
during the normal course of production and operation, shall be determined by the amount after deducting the
estimated cost of completion, estimated selling expenses and relevant taxes from the estimated selling price of
finished goods; the net realizable value of inventories held for execution of sales contracts or labor contracts shall be
calculated on the ground of the contracted price. If an enterprise holds more inventories than the quantity stipulated in
the sales contract, the net realizable value of the exceeding part shall be calculated on the ground of general selling
price.
If the factors influencing the write-down of the inventory value have disappeared, resulting in higher net realizable
value of inventories than their book value after the reserve for stock depreciation is accrued, a reversal shall apply in
the amount of reserve for stock depreciation previously accrued, and the reserved amount shall be included in the
current profit or loss.
(4) Inventory system
The perpetual inventory system is adopted.
(5) Amortization of low-value consumables and packaging materials
① Low-value consumables are amortized using the immediate write-off method;
② Packaging materials are amortized using the immediate write-off method.
16. Contract assets
(1) Recognition method and criteria of contract assets
The Company lists contract assets or contract liabilities in the balance sheet according to the relationship between
performance obligations and customer payments. Considerations that the Company has the right to collect for
commodities transferred or services provided to customers (and such right depends on other factors than passing of
time) are presented as contract assets. The contract assets and contract liabilities under the same contract are
presented in net amount. The Company separately presents the right possessed to collect consideration from
customers unconditionally (only depending on the passing of time) as accounts receivable.
(2) Determination method and accounting treatment method for the expected credit loss of contract assets
For the determination method and accounting treatment method for the expected credit loss of contract assets, refer to
this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial instruments.
17. Contract costs
The contract costs comprise the contract performance cost and the cost to obtain a contract.
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The costs incurred by the Company for contract performance which fall outside the scope of the enterprise accounting
standards such as inventories, fixed assets or intangible assets will be identified as an asset of the contract
performance costs upon satisfying all of the following conditions:
The costs are directly related to one existing contract or one contract that is expected to be obtained.
The costs enrich the Company's resources for future contract performance.
The costs are estimated to be recovered.
The incremental costs which are incurred by the Company to obtain the contract and are expected to be recovered will
be identified as an asset of the costs to obtain a contract.
The assets related to the contract costs will be amortized on the same basis for recognition of the income from
commodities or services related to the assets; but if the amortization period of the costs to obtain the contract is no
more than 1 year, the Company will include such costs in the current profit or loss once occurred.
In case that the book value of assets related to contract costs is higher than the difference between the two items
below, the Company will accrue the impairment provision for the extra part, and recognize that part as impairment loss:
(1) Estimated residual consideration to be obtained from transfer of commodities or services related to the assets;
(2) Estimated costs incurred from transfer of relevant commodities or services.
If the factors for impairment in the previous periods are subsequently changed, making the aforesaid difference higher
than the book value of the assets, the Company will reverse the accrued impairment provision and include it in the
current profit or loss, provided that the book value of the reversed assets does not exceed the book value of the assets
without impairment provision accrued on such date of reversal.
18. Holding assets for sale
An asset of which the book value is recovered mainly through sale (including exchange of non-monetary asset of a
commercial nature) rather than non-continuous use of a non-current asset or disposal group is classified as a holding
asset for sale.
A non-current asset or disposed group is classified by the Company as holding for sale if it meets the following criteria
at the same time:
(1) Immediate sale could be made under the current circumstances in accordance with the convention of selling such
kind of assets or disposal groups in similar transactions;
(2) Selling is highly likely to occur, i.e., the Company has made a resolution on a sales plan and obtained confirmed
purchase commitments, and the sales is predicted to be completed within 1 year. If required by relevant provisions that
selling shall only be made after approved by the relevant competent authority or supervision department of the
Company, such approval should have been obtained.
If the book value of the non-current assets (excluding financial assets, deferred income tax assets, and assets to
constitute payroll payable) or disposal groups classified as holding for-sale assets is higher than the net amount after
deducting the selling expenses from the book value, the book value will be written down to the net amount after
deducting the selling expenses from the fair value, and the amount written down will be recognized as the impairment
loss of assets and included in the current profit or loss. At the same time, the impairment provision for holding for-sale
assets will be accrued.
19. Long-term equity investment
(1) Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when requiring the
unanimous consent of the parties sharing control before making decisions about the relevant activities of the
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arrangement. The Company together with the other joint venture parties can jointly control over the investee and are
entitled to the right of the net assets of the investee, as the investee is joint venture of the Company.
Significant influence refers to the power to participate in making decisions on the financial and operating policies of an
enterprise, but not the power to control, or jointly control, the formulation of such policies with other parties. Where the
Company can exercise 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 through business combination
For the long-term equity investment in the subsidiaries arising from business combination involving entities under
common control, the initial investment cost of the long-term equity investment is the share with reference to the book
value of the shareholders' equity of the merged party in the consolidated financial statements of the ultimate controlling
party on the date of combination. The share premium in the capital reserve shall be adjusted according to the
difference between the initial investment cost of the long-term equity investment and the carrying amount of the
consideration paid; if the share premium in the capital reserve is insufficient to offset, the retained earnings shall be
adjusted. In connection with imposing control over the investee under common control as a result of additional
investment and other reasons, the share premium shall be adjusted according to the difference between the initial
investment cost of the long-term equity investment as recognized by the above principle and the carrying value of the
long-term equity investment before combination and the sum of carrying value of newly paid consideration for
additional shares acquired on the date of combination. If the share premium is insufficient for write-down, the retained
earnings shall be offset.
For the long-term equity investment in the subsidiaries arising from business combinations involving entities not under
common control, the cost of the combination ascertained on the date of acquisition shall be taken as the initial
investment cost of the long-term equity investment. In connection with imposing control over the investee not under
common control as a result of additional investment and other reasons, the initial investment cost shall be the sum of
the book value of the equity investment originally held and the newly increased initial investment cost.
② Long-term equity investments acquired by the means other than business combination
The initial cost of a long-term equity investment obtained by cash payment shall be the purchase costs actually paid.
The initial cost of investment of a long-term equity investment obtained by means of issuance of equity securities shall
be the fair value of the equity securities issued.
(3) Subsequent measurement and recognition of profit or loss
① Long-term equity investment calculated by cost method
Long-term equity investment in subsidiaries of the Company is calculated by cost method, unless the investment
meets the conditions for holding for sale. except for the actual consideration paid for the acquisition of investment or
the declared but not yet distributed cash dividends or profits which are included in the consideration, investment gains
are recognized as the Company' shares of the cash dividends or profits declared by the investee.
② Long-term equity investment accounted for by equity method
Long-term equity investments of associates and jointly controlled entities are calculated using equity method. Where
the initial investment cost of the long-term equity investment exceeds the investor's interest in the fair value of the
investee's identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost;
where the initial investment cost is less than the investor's interest in the fair value of the investee's identifiable net
assets at the acquisition date, the difference shall be charged to the profit or loss for the current period. At the same
time, the cost of the long-term equity investment shall be adjusted.
The Company recognizes the investment income and other comprehensive income according to the shares of net
profit or loss and other comprehensive income realized by the investee which it shall be entitled or shared respectively,
and simultaneously makes adjustment to the book value of long-term equity investment; The book value of long-term
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equity investment shall be reduced by attributable share of the profit or cash dividends for distribution declared by the
investee. In relation to other changes in the owner's equity except for net profits and losses, other comprehensive
income and profit distributions of the investee (hereinafter referred to as “Changes in Other Owner's Equity”), the book
value of the long-term equity investment shall be adjusted and included in owner's equity.
When determining the amount of proportion of net profit or loss, other comprehensive income and other changes in the
owner's equity in the investee which it entitles, the fair value of each identifiable net assets of the investee at the time
when the investment is obtained shall be used as basis, and according to the accounting policies and accounting
period of the Company, adjustment shall be made to the net profit and other comprehensive income of the investee.
The unrealized profit or loss resulting from transactions between the Company and its associates or joint venture shall
be eliminated in proportion to the investor's equity interest of investee, based on which investment income or loss shall
be recognized, except for those assets invested or sold constituting a business. Any losses resulting from transactions,
which are attributable to impairment of assets, shall be fully recognized.
The net loss incurred by the Company to the joint ventures or affiliates is capped when the carrying amount of long-
term equity investment and the long-term equity that substantially constitutes the net investment in the joint ventures or
affiliates have been wrote down to zero, except to the extent that the Company has an additional loss obligation. If the
joint ventures or affiliates later realize net profit, the Company will resume recognition of the income share after the
income share makes up the unrecognized loss share.
③ Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the book value and the consideration actually
received shall be included in the current profit or loss.
If the remaining equity is still subject to the equity method in partial disposal of the long-term equity investment under
the equity method, other comprehensive income recognized in the original equity investment shall be carried forward
at the appropriate proportion on the same basis used by the investee for direct disposal of relevant assets or liabilities,
and other changes in the owner's equity shall be carried forward into the current profit or loss at the appropriate
proportion.
When losing the control or material influence over the investee due to disposal of the equity investment and other
reasons, other comprehensive income recognized in the original equity investment due to adoption of the equity
method shall be subject to accounting treatment on the same basis used by the investee for direct disposal of relevant
assets or liabilities when ceasing to use the equity method, and other changes in the owner's equity shall be carried
forward into the current profit or loss in full when ceasing to use the equity method.
If the control over the investee is lost due to partial disposal of the equity investment and other reasons, and if the
remaining equities can exercise common control or material influence over the investee in preparing the individual
financial statements, the remaining equities shall be accounted by the equity method and shall be adjusted as if such
remaining equities have been accounted for under the equity method since they are obtained. Other comprehensive
income recognized before the control over the investee is obtained shall be carried forward pro rata on the same basis
used by the investee for direct disposal of relevant assets or liabilities, and other changes in the owner's equity
recognized under the equity method shall be carried forward into the current profit or loss pro rata. The remaining
equities which cannot exercise common control or material influence over the investee shall be recognized as financial
assets, and the difference between their fair value and book value on the date when the control is lost shall be
included in the current profit or loss. Other comprehensive income recognized and other changes in the owner's equity
recognized before the control over the investee is obtained shall be carried forward in full.
If the disposal of the equity investment in the subsidiaries through multiple transactions until loss of the control is a
package deal, each transaction shall be subject to accounting treatment as a transaction to dispose of the equity
investment in the subsidiaries and to lose the control; the difference between the price for each disposal before loss of
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the control and the book value of the long-term equity investment of the equity disposed of shall be first recognized as
other comprehensive income in the individual financial statements and shall then be carried forward to the profit or loss
for the very period when the control is lost. If it is not a package deal, each transaction shall be subject to accounting
treatment.
20. Investment property
Investment property refers to the real estate held to generate rental income or capital appreciation, or both, including
leased land use rights, land use rights held for transfer after appreciation, and leased buildings (including buildings that
are leased after completion of self-construction or development activities and buildings in construction or development
that are used for rental in the future).
The Company adopts the cost mode to measure the existing investment property. The subsequent expenditure related
to the investment property will be included in the cost of the investment property when relevant economic benefits are
likely to flow in and costs can be measured reliably, or otherwise be included in the current profit or loss when
occurred. Investment property measured at cost - buildings held for leasing shall adopt the same depreciation policy
for fixed assets of the company, land use rights held for leasing shall adopt the same amortization policy for the
intangible assets.
21. Fixed assets
(1) Determination and initial measurement of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to
others, or for administrative purposes; and have a service life of more than one fiscal year. Fixed asset is recognized
when it meets the following conditions at the same time: ① It is probable that the economic benefits associated with
the fixed asset will flow to the enterprise; ② Its cost can be reliably measured.
The fixed assets are initially measured at cost (with the impact of predicted discard expense taken into account).
The subsequent expenditure related to the fixed assets will be included in the cost of the fixed assets when the
economic benefits in connection therewith are likely to flow in and costs can be measured reliably; the book value of
the replaced part will be derecognized; all other subsequent expenditure will be included in the current profit or loss
when occurred.
(2) Methods for depreciation
Useful lives of Annual depreciation
Category Depreciation method Residual Ratio
depreciation rate
Housing and building Straight-line method 20 5% 4.75%
Machinery and
Straight-line method 5-10 5% 19.00%-9.50%
equipment
Means of transport Straight-line method 4-8 5% 23.75%-11.88%
Electronic and other
Straight-line method 3-5 5% 31.67%-19.00%
equipment
Fixed assets are depreciated by categories using the straight-line method, and the annual depreciation rates are
determined by categories based upon their estimated useful lives and their estimated residual values. Where the parts
of a fixed asset have different useful lives or cause economic benefits for the enterprise in different ways, different
depreciation rates or depreciation methods shall apply, and each part is depreciated separately.
(3) Disposal of fixed assets
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When fixed assets are disposed of or when no economic benefits can be expected through use or disposal thereof,
such fixed assets will be derecognized. The income from disposal of the fixed assets through sale, transfer, scrapping
or damage with the book value thereof and relevant taxes deducted is included in the current profit or loss.
22. Projects under construction
The projects under construction are measured at the actual cost. The actual cost comprises the building cost,
installation cost, borrowing cost qualified for capitalization and other necessary expenditures incurred to bring the
projects under construction to the conditions before they are made ready for the intended use. The projects under
construction will be converted into fixed assets when they are ready for intended use and will be depreciated from the
next month on.
23. Borrowing costs
(1) Criteria for recognition of capitalized borrowing costs
For borrowing costs incurred by the Company that are directly attributable to the acquisition, construction or production
of assets qualified for capitalization, the costs will be capitalized and included in the costs of the related assets. Other
borrowing costs shall be recognized as expense in the period in which they are incurred and included in profit or loss
for the current period.
Assets qualified for capitalization 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
The capitalization period shall refer to the period between the commencement and the cessation of capitalization of
borrowing costs, excluding the period in which capitalization of borrowing costs is temporarily suspended.
Capitalization of borrowing costs begins when the following three conditions are fully satisfied:
① Asset expenditures (including cash paid, transferred non-currency assets or expenditure for holding debt liability for
the acquisition, construction or production of assets qualified for capitalization) have been occurred;
② borrowing costs have been incurred;
③ acquisition, construction or production necessary to enable the asset reach its intended state of serviceability or
marketability have commenced.
Capitalization of borrowing costs shall be suspended during periods in which the qualifying asset under acquisition and
construction or production ready for the intended use or sale.
(3) Suspension of capitalization period
Capitalization of borrowing costs shall be 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; if the interruption is a necessary step for making the qualifying asset under acquisition and construction or
production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing
costs incurred during such period shall be recognized as profits and losses of the current period. When the acquisition
and construction or production of the asset resumes, the capitalization of borrowing costs commences.
(4) Calculation of capitalization rate and amount of borrowing costs
Specific borrowings for the acquisition, construction or production of assets qualified for capitalization, borrowing costs
of the specific borrowings actually incurred in the current period minus the interest income earned on the unused
borrowing loans as a deposit in the bank or as investment income earned from temporary investment will be used to
determine the amount of borrowing costs for capitalization.
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General borrowings for the acquisition, construction or production of assets qualified for capitalization, the to-be-
capitalized amount of interests on the general borrowing shall be calculated and determined by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements minus the specifically
borrowed loans by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and
determined according to the weighted average interest rate of the general borrowing.
During the capitalization, the difference between the principal and interest of special borrowings in foreign currency
shall be capitalized and included in the cost of assets qualified for capitalization. The difference between the principal
and interest of the borrowings in foreign currency other than the special borrowings in foreign currency shall be
included in the current profit or loss.
24. Intangible assets
(1) Valuation method of intangible assets
① Intangible assets are initially measured at cost upon acquisition
The costs of an externally purchased intangible asset include the purchase price, relevant taxes and expenses paid,
and other expenditures directly attributable to putting the asset into condition for its intended use.
② Subsequent measurement
The service life of intangible assets shall be analyzed and judged upon acquisition.
As for intangible assets with a finite service life, they are amortized using the straight-line method over the term in
which economic benefits are brought to the firm; If the term in which economic benefits are brought to the firm by an
intangible asset cannot be estimated, the intangible asset shall be taken as an intangible asset with indefinite service
life, and shall not be amortized.
(2) Estimation of service life of the intangible assets with limited service life
Item Estimated useful lives Basis
Land use rights 40 or 50 years Land use certificate
Non-patented technology 5-10 years Expected benefited period
Software 2-5 years Expected benefited period
Trademark rights 6 years Expected benefited period
Software copyright 10 years Expected benefited period
For an intangible asset with a finite service life, review on its service life and amortization method is performed at the
end of each end.
Upon review, service life and amortization method for the intangible assets are the same with the previous estimate at
the end of this period.
(3) The basis for the judgment of intangible assets with uncertain service life and the procedure for reviewing their
service life
As at the balance sheet date, the Company has no intangible assets with uncertain service life.
(4) Specific criteria for the division of research phase and development phase
The expenses for internal research and development projects of the Company are divided into expenses in the
research phase and expenses in the development phase.
Research phase: Scheduled innovative investigations and research activities to obtain and understand scientific or
technological knowledge.
Development phase: Apply the research outcomes or other knowledge to a plan or design prior to a commercial
production or use in order to produce new or essentially-improved materials, devices, products, etc.
(5) Specific condition for capitalizing expenditure during the development phase
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Expenses in the research phase are recorded into the profits and losses for the current period when they occur. The
expenses in the development phase are recognized as intangible assets if the following conditions are fulfilled, and are
included in the current profit or loss if following conditions are not fulfilled:
① Complete such intangible asset to make it technically feasible for use or for sale;
② There is intention to complete the intangible asset for use or sale;
③ The ways in which intangible asset generates economic benefits, including there is evidence that the products
produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is
for internal use, there is evidence that there exists usage for the intangible asset;
④ There is sufficient support in terms of technology, financial resources and other resources in order to complete the
development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤ The expenses attributable to the development stage of the intangible asset can be measured reliably.
If the expenses in the research phase and expenses in the development phase cannot be distinguished, all the
expenses incurred for R&D are included in the current profit or loss.
25. Impairment of long-term assets
Long-term assets, such as long-term equity investment, investment properties that are measured at cost, fixed assets,
construction in progress, intangible assets with limited service life and oil and gas assets are tested for impairment if
there is any indication that an asset may be impaired at the balance sheet date. If the result of the impairment test
indicates that the recoverable amount of the asset is less than its book value, a provision for impairment and an
impairment loss are recognized for the amount by which the asset's book value exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and the present value of the future cash
flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the
individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable
amount of a group of assets to which the asset belongs to is determined. A group of assets is the smallest group of
assets that is able to generate cash inflows independently.
For the goodwill arising from business combination, intangible assets with uncertain service life, and intangible assets
which are not ready for intended use, impairment test shall be conducted at least at the end of each year, regardless
of whether there are signs of impairment or not.
When the Company carry out impairment test to goodwill, the Company shall, as of the purchasing day, allocate on a
reasonable basis the book value of the goodwill formed by merger of enterprises to the relevant asset groups, or if
there is a difficulty in allocation, to allocate it to the sets of asset groups. Relevant asset groups or the sets of asset
groups mean those can benefit from the synergy of business combination.
For the purpose of impairment test on the relevant asset groups or the sets of asset groups containing goodwill, if any
evidence shows that the impairment of asset groups or sets of asset groups related to goodwill is possible, an
impairment test will be made first on the asset groups or sets of asset groups not containing goodwill, thus calculating
the recoverable amount and comparing it with the relevant book value so as to recognize the corresponding
impairment loss. An impairment test will be made on the asset groups or sets of asset groups containing goodwill to
compare the book value of these asset groups or sets of asset groups with the recoverable amount. Where the
recoverable amount is lower than the book value, the amount of impairment loss shall set off and be apportioned to the
book value of the goodwill in the asset groups or sets of asset groups, and then set off the book value of other assets
pro rata according to the proportion of the book value of other assets other than the goodwill in the asset groups or
sets of asset groups.
Once the above asset impairment loss is recognized, it will not be reversed in the subsequent accounting periods.
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26. Long-term deferred expenses
Long-term deferred expenses are expenses which have occurred but will benefit over 1 year and shall be amortized
over the current period and subsequent periods.
The amortization period and amortization method of various expenses are:
Item Amortization method Amortization period
Improvement expenditure of fixed assets
Straight-line method By period of benefit
leased by operating lease
Renovation Cost Straight-line method By period of benefit
27. Contract liabilities
The Company lists contract assets or contract liabilities in the balance sheet according to the relationship between
performance obligations and customer payments. The Company lists the obligation to transfer commodities or offer
services to customers for the consideration received or receivable from customers as contract liabilities. The contract
assets and contract liabilities under the same contract are presented in net amount.
28. Employee compensation
(1) Accountant treatment of short-term remuneration
During the accounting period when the staff provides service, the Company will recognize the short-term remuneration
actually incurred as liabilities, and the liabilities would be charged into current profits and loss or costs of assets.
The Company will pay social insurance and housing funds, and will make provision of trade union funds and staff
education costs in accordance with the requirements. During the accounting period when the staff provides service,
the Company will determine the relevant amount of employee benefits in accordance with the required provision basis
and provision ratios.
Employee compensation actually incurred by the Company will be included in the current profit or loss or relevant
asset costs when actually incurred, in which non-monetary benefits will be measured at the fair value.
(2) Accountant treatment of retirement benefit plan
① Defined contribution plan
The Company will pay basic pension insurance and unemployment insurance in accordance with the relevant
provisions of the local government for the staff. During the accounting period when the staff provides service, the
Company will calculate the amount payable in accordance with the local stipulated basis and proportions which will be
recognized as liabilities, and the liabilities would be charged into current profits and loss or costs of assets.
② Defined benefit scheme
The welfare responsibilities generated from defined benefit scheme based on the formula determined by projected unit
credit method would be vested to the service period of the staff and charged into current profits and loss or costs of
assets.
(3) Accountant treatment of termination benefits
If the dismissal welfare is provided by the Company to employees, the employee compensation liabilities arising from
the dismissal welfare shall be determined at the earliest of the following two, and included in the current profits and
losses: When the company cannot unilaterally withdraw the dismissal welfare provided due to the termination of labor
relations plan or layoff proposal; When the company determines the costs or expenses associated with the
restructuring involving the payment of dismissal welfare.
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29. Estimated liabilities
The Company shall recognize the obligations related to contingencies as estimated liabilities, 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 will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities shall be initially measured at the best estimate of the expenditure required to settle the related
present obligation.
Factors pertaining to a contingency such as risk, uncertainties, and time value of money shall be taken into account as
a whole in reaching the best estimate. Where the effect of the time value of money is material, the best estimate shall
be determined by discounting the related future cash outflow.
The expenses required have a successive range, in which the possibilities of occurrence of each result are the same,
and the best estimate should be determined as the middle value for the range; in other circumstances, the best
estimate will be handled as follows, respectively:
For the contingencies involving a single item, it will be determined according to the amount most likely to occur.
For the contingencies involving several items, it will be determined according to the possible results and the relevant
possibilities.
Where some or all of the expenditure required to settle an estimated liability is expected to be reimbursed by a third
party, the reimbursement is separately recognized as an asset when it is virtually certain that the reimbursement will
be received. The amount recognized for the reimbursement is limited to the book value of the estimated liability.
The Company will review the book value of the estimated liabilities on the balance sheet date, and if there are
concrete evidences that such book value cannot reflect the current best estimate, the book value will be adjusted
according to the current best estimate.
30. Share-based payment
The Company's share-based payment refers to a transaction in which an enterprise determines the liabilities on the
basis of equity instruments granting or bearing for the acquisition of service from its employees or other parties. The
Company's share-based payment is equity-settled.
As to an equity-settled share-based payment in return for services of employees, calculation will be based on the fair
value of the equity instrument granted to the employees. The share-based payment transactions vested immediately
after the date of grant will be included in the relevant cost or expense based on the fair value of the equity instrument
on the date of grant, and the capital reserve will be increased accordingly. For the services within the waiting period or
the share-based payment transactions that may only be vested when the specified performance conditions are met
after the date of grant, the Company will include the services obtained in the current period in relevant cost or expense
and increase the capital reserve at the fair value on the date of grant according to the best estimate of the number of
the exercisable equity instruments on each balance sheet date in the waiting period.
If the terms of the equity-settled share-based payment are amended, the Company shall recognize the services
received at least based on the situation before the amendment was made. In addition, any amendment resulting in the
increase of the fair value of the equity instrument granted or changes that are beneficial to the staff on the amendment
date, will be recognized as an increase in the service received.
If the equity instruments vested are canceled during the waiting period, the Company will take the vested equity
instruments canceled as accelerated exercise, and immediately include the amount to recognized during the waiting
period in the current profit or loss. At the same time, the capital reserve will be recognized. However, if new equity
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instruments are vested and they are verified at the vesting date of new equity instrument as alternatives vested to
canceled equity instruments, the treatment on the new equity instrument is in conformity with the modified treatment
on disposal of equity instrument.
31. Income
(1) Accounting policies for revenue recognition and measurement
If the Company performed the obligations in the contract, revenue shall be recognized when the customer acquires the
right of control over relevant commodities or services. Acquisition of control over relevant commodities or services
means gaining the ability to direct the use of such commodities or services and obtain nearly all the economic benefits
therefrom.
If the contract contains two or more performance obligations, the Company shall apportion the transaction price to
each individual performance obligation on the contract commencement date according to the relative proportion of the
individual selling price of the commodities or services promised by each individual performance obligation. The
Company measures the revenue according to the transaction price apportioned to each individual performance
obligation.
The transaction price refers to the amount of consideration that the Company is expected to be entitled to collect due
to the transfer of commodities or services to customers, excluding the payments collected on behalf of third parties
and the payments expected to be returned to customers. The Company will determine the transaction price according
to the contract provisions and its past practices, and may take into account the impact from the variable consideration,
the major financing components in the contract, the non-cash consideration, the payable customer consideration and
other factors when determining the transaction price. The Company shall determine the transaction price containing
the variable consideration according to the amount not exceeding the amount by which the accumulative recognized
revenue is much more unlikely to be significantly reversed when relevant uncertainties are eliminated. If there are
major financing components in the contract, the Company shall determine the transaction price according to the
amount due assumed to be paid in cash when the customer acquires the control over the commodities or services,
and shall amortize the difference between such transaction price and the contract consideration using the effective
interest rate method during the contract period.
When one of the following conditions is met, it belongs to the performance obligation within a certain period of time, or
otherwise it belongs to the performance obligation at a certain point of time:
The customer acquires and consumes the economic benefits arising from the Company's performance while the
company performs the contract.
The customer can control the commodities in progress during the Company's performance.
The commodities produced by the Company during the performance possess have irreplaceable usage, and the
company has the right to collect payment for the performance part accumulated so far during the entire contract period.
For the performance obligations performed within a certain period of time, the Company shall recognize the revenue
according to the performance progress within that period of time, except that the performance progress cannot be
reasonably determined. The Company will determine the performance progress through the output or input method by
taking into account the nature of commodities or services. If the performance progress cannot be reasonably
recognized and the costs incurred are expected to be compensated, the Company will recognize the revenue
according to the amount of costs incurred until the performance progress can be reasonably recognized.
For the performance obligations performed at a certain point of time, the Company will recognize the revenue when
the customer acquires the right of control over relevant commodities or services. While determining whether the
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customer has acquired the control over the commodities or services, the Company shall take the following into
consideration:
The Company has the current collection right for the such commodities or services, that is, the customer has the
current payment obligation for such commodities or services.
The Company has transferred the legal title of such commodities to the customer, that is, the customer already has
the legal title of such commodities.
The Company has transferred the physical commodities to the customer, that is, the customer has possessed the
physical commodities.
The Company has transferred the major risks and rewards of the commodity title to the customer, that is, the
customer has acquired the major risks and rewards of the commodity title.
The customer has accepted such commodities or services.
(2) Specific principles
① Principle for recognizing revenue from the domestic sales of standard products: The Company sells its security
standard products to the project clients, dealers, and other customers through direct selling and marketing both. The
Company sign sales contracts with and customers, and send the goods to customers according to the contractual
terms of delivery, or the customers pick up goods. The revenue is recognized after the customer receives and accepts
the goods and the Company obtains the evidence proving the client's receipt of goods.
② Principle for recognizing revenue from the overseas sales of standard products: If the domestic company makes
direct export, the FOB and CIF terms are generally adopted and the Company recognizes the sale income after the
product is declared and exported. If a foreign subsidiary sells the goods abroad, the goods will be sent to the customer
or the customer will collect the goods according to the delivery method agreed with the customer, and the income will
be recognized when the customer receives and accepts the goods.
③ Principle for recognizing system-integrated sales revenue: The sales of the system-integrated products of the
Company include providing the supporting services such as plan design, supporting products, installation, debugging
and system trial running. The sales income will be recognized upon acceptance.
④ Principle for recognizing the income from labor services: The income is recognized when the labor service is
provided.
Difference in the accounting policies for revenue recognition arising from different business models of the same kind of
business
N/A
32. Government subsidies
(1) Type
Government grants are monetary assets and non-monetary assets acquired by the Company from the government
free of charge. Government grants are classified into government grants related to assets and government grants
related to revenue.
Government grants related to assets refer to government grants acquired by the Company for the purpose of
purchasing or constructing or otherwise forming long-term assets. Government grants related to revenue refer to the
government grants other than those related to assets.
(2) Confirmation of time point
Government grants related to assets will be measured at the actual amount of money received at the time of receipt.
The assets (bank deposits) and deferred income shall be period by period included in the profits and losses of the
current period in a reasonable and systematic manner from the time the assets are available for use (those related to
the Company's daily activities shall be included in other income; those unrelated to the Company's daily activities shall
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be recognized as non-operating revenue). When the relevant assets are disposed of (sold, transferred, scrapped, etc.)
at or before the end of their service life, the balance of the deferred income that has not yet been apportioned will be
transferred to the current-period income from the disposal of the assets on an one-time manner, and will not be
deferred.
For government grants related to revenue, they will be recognized as profit and loss of the current period according to
the amount receivable for government grants obtained under fixed quota standards, otherwise, they will be recognized
as profit and loss of the current period when it is actually received.
(3) Accounting treatment
Government grants related to assets shall write off the book value of relevant assets or be recognized as deferred
income. When recognized as deferred income, the government grant related to assets will be period by period credited
to the profits and losses of the current period in a reasonable and systematic manner within the service life of relevant
assets (those related to the Company's daily activities shall be recognized as other income; those unrelated to the
Company's daily activities shall be recognized as non-operating revenue).
The revenue-related government grants shall be recognized as deferred income if they are used to compensate
relevant expenses or losses in subsequent periods, and they shall be included in profit and loss of the current period
(those related to Company's routine activities shall be included in other income; those unrelated to the Company's
routine activities shall be included in non-operating revenue) or used to offset relevant expenses or losses during the
recognition of related expenses or losses; the grants used to compensate related expenses or losses incurred shall be
included in profit and loss of the current period (those related to Company's routine activities shall be included in other
income; those unrelated to the Company's routine activities shall be included in non-operating revenue) or used to
offset relevant expenses or losses.
The policy-oriented concessional loan discount interests obtained by the Company will be subject to accounting
treatment in the following two circumstances:
① Where the finance allocates the discount interest funds to the lending bank, and the lending bank provides loans to
the Company at the policy preferential interest rate, the Company will take the actually received loan amount as the
entry value of the loan, and the relevant borrowing costs shall be calculated according to the loan principal and the
policy preferential interest rate.
② If the finance directly allocates the discount interest funds to the Company, the Company shall set off the
corresponding discount interest against the relevant borrowing costs.
33. Deferred income tax assets / deferred income tax liabilities
Income tax comprises current income tax and deferred income tax. Except for the income taxes arising from the
business combination and the transactions or matters that are directly included in the owner's equity (including other
comprehensive income), the Company will include the current income tax and deferred income tax into the current
profit or loss.
Deferred income tax assets and deferred income tax liabilities will be calculated and recognized according to the
difference (temporary difference) between the tax basis and the book value of assets and liabilities.
Deferred income tax assets are recognized to the extent that it is probable that future taxable income will be available
against which deductible temporary differences can be utilized. For deductible losses and tax credits that can be
reversed in the future period, deferred income tax assets shall be recognized to the extent that it is probable that
taxable income will be available in the future to offset the deductible losses and tax credits.
Save as the exceptions, deferred income tax liabilities shall be recognized for the taxable temporary difference.
The exceptions where deferred income tax assets and liabilities are not recognized include:
Initial recognition of the goodwill;
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Transactions or events that are neither business combinations nor affect profit and taxable income (or deductible loss)
when occurring.
Taxable temporary difference related to investment in the subsidiaries, affiliates and joint ventures will be recognized
as deferred income tax liabilities, unless the Company can control the time to reverse such temporary difference and
such temporary difference is much more unlikely to be reversed in the predictable future. Deductible temporary
difference related to investment in the subsidiaries, affiliates and joint ventures will be recognized as deferred income
tax assets when such temporary difference is much more likely to be reversed in the predictable future and is much
more likely to be obtained to deduct the taxable income of the deductible temporary difference.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities will be measured at
the tax rate applicable during the recovery of relevant assets or payment of relevant liabilities as expected according to
the provisions of the tax law.
On the balance sheet date, the Company will review the book value of the deferred income tax assets. If no sufficient
taxable income is likely to be obtained to offset the benefits of deferred income tax assets in the future, the book value
of deferred income tax assets shall be written down. The amount written down shall be reversed when it is likely to
obtain sufficient taxable income.
After granted the legal rights of net settlement and with the intention to use net settlement or obtain assets and repay
debt at the same time, the net amount after offsetting its current income tax assets and current income tax liabilities
shall be recorded.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities will be presented by
the net amount after offsetting when the following conditions are fulfilled:
The taxpayer is granted the legal rights to settle current income tax assets and current income tax liabilities on a net
basis;
Deferred income tax assets and deferred income tax liabilities are related to income tax to be paid by the same entity
liable for paying tax to the same tax collection and management authority or related to different entities liable for
paying tax, but the relevant entity liable for paying tax is intended to apply net settlement of current income tax assets
and liabilities or, at the same time, obtain assets, repay debt whenever every deferred income tax assets and liabilities
with importance would be reversed in the future.
34. Lease
Lease means the contract by which the lessor transfers the right to use the assets to the lessee for a given period to
obtain the consideration. On the commencement of the contract, the Company will assess whether the contract is a
lease or contains the lease. If a party to the contract conveys the right to control the use of one or more identified
assets for a given period to obtain a consideration, this contract is a lease or contains the lease.
If a contract contains several individual leases, the Company will split the contract and conduct accounting treatment
of each individual lease separately. If a contact contains both lease and non-lease, the lessee and the lessor will split
the lease and non-lease parts.
If all the following conditions are met, the Company will simplify all the lease options without assessing whether the
lease is changed or reassessing the lease classification:
The lease consideration after reduction is less or remains substantially the same compared with the lease
consideration before reduction, and the lease consideration may either be undiscounted or discounted by the discount
rate before reduction;
Other terms and conditions of lease are identified without significant change after taking the qualitative and
quantitative factors into full account.
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(1) The Company as a lessee
① Right-of-use assets
The Company recognizes the right-to-use assets for the lease other than short-term lease and low-value asset lease
on the commencement of the lease term. The right-to-use assets are initially measured at cost which includes:
Initial measurement amount of lease liabilities;
The lease payment paid on or before the commencement of the lease term; if there are lease incentives, the relevant
amount of lease incentives enjoyed shall be deducted;
Initial direct cost incurred by the Company;
The estimated costs incurred by the Company for dismantling and removing the leased asset, restoring the site
where the leased asset is located or restoring the leased asset to the state agreed in the lease terms, but excluding
the cost incurred to produce the inventory.
The Company will depreciate the right-to-use assets through the straight-line method. If it can be reasonably
recognized that the title of the leased asset is acquired at the expiration of the lease term, the Company shall accrue
depreciation within the remaining service life of the leased asset; or otherwise, the leased asset shall be depreciated
within the shorter of the lease term and the remaining service life of the leased asset.
The Company will determine whether the right-of-use assets are impaired and conduct accounting treatment over the
identified impairment loss according to the principles set out in this section Financial Report - V. Significant Accounting
Polices and Accounting Estimates - 25. Impairment of long-term assets.
② Lease liabilities
The Company recognizes the lease liabilities for the lease other than short-term lease and low-value asset lease on
the commencement of the lease term. Lease liabilities shall be initially measured at the present value of the unpaid
lease payments. Lease payments include:
Fixed payment (including actual fixed payment), and if there are lease incentives, the relevant amount of lease
incentives shall be deducted;
Variable lease payment depending on the index or ratio;
Predicted payment on the basis of the guaranteed residual value provided by the Company;
Exercise price of the call option, provided that the Company will exercise such option, as reasonably determined;
Payment for exercise of the lease termination option, provided that the lease term reflects the Company’s future
exercise of the lease termination option.
The interest rate implicit in lease is applied by the Company as the discount rate. If the interest rate implicit in lease
cannot be reasonably determined, the Company's interest rate on incremental borrowings is applied as the discount
rate.
The Company shall calculate the interest expense of the lease liabilities during each period of the lease term at a fixed
periodic interest rate and include it in the current profit or loss or relevant asset cost.
The variable lease payment which is not included in the measurement of lease liabilities shall be included in the
current profit or loss or relevant asset cost when actually incurred.
If any of the following circumstances happens on commencement of the lease term, the Company will remeasure the
lease liabilities and adjust the corresponding right-of-use assets, and if the book value of the right-of-use assets has
been reduced to zero, but the lease liabilities still need to be further reduced, the difference shall be included in the
current profit or loss:
When the assessment result of the call option, renewal option or termination option is changed or the actual exercise
of the aforesaid option is inconsistent with the original assessment result, and the Company remeasures the lease
liabilities at the present value worked out according to the changed lease payment and the revised discount rate;
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When there are changes in the actual fixed payment, the estimated payable amount of guaranteed residual value, or
the index or ratio applied to determine the amount of lease payments, the Company remeasures the lease liabilities at
the present value worked out according to the changed lease payment and the original discount rate. If the change in
the lease payment originates from the change in the floating interest rate, the present value will be calculated using the
revised discount rate.
③ Short-term lease and low-value asset lease
The Company chooses not to recognize the right-of-use assets and lease liabilities for the short-term lease and low-
value asset lease, and records relevant lease payment into the current profit or loss or relevant asset cost according to
the straight-line method in each period of the lease term. Short-term lease means the lease of no more than 12
months and excluding the call option on the commencement of the lease term. Low-value asset lease means a lease
of lower value when the single leased asset is brand-new. If the Company sublets or is expected to sublet the leased
assets, the original lease is not a low-value asset lease.
④ Lease change
If the lease is changed and meets all of the following conditions, the Company will conduct accounting treatment with
respect to such lease change as a single lease:
Such lease change has expanded the scope of lease by adding the right to use one or more leased assets;
The increased consideration and the separate consideration for the expanded part of the scope of lease shall be
equivalent to the amount adjusted according to this contract.
If the lease change is not taken as a separate lease for accounting treatment, on the effective date of the lease change,
the Company will re-apportion the consideration of the changed contract, re-determine the lease term, and remeasure
the lease liabilities at the present value worked out according to the changed lease payment and the revised discount
rate.
If the lease change results in narrower scope of lease or shorter lease term, the Company will reduce the book value
of the right-of-use assets accordingly, and will include relevant gain or loss from partial or full termination of the lease
in the current profit or loss. If other lease changes result in re-measurement of the lease liabilities, the Company will
adjust the book value of the right-to-use assets accordingly.
(2) The Company as a lessor
On commencement of the lease term, the Company will divide the lease into financial lease and operating lease.
Financial lease means the lease that has substantially transferred almost all the risks and rewards related to the title of
the leased assets, whether or not the title will be finally transferred. Operating lease means any lease other than
financial lease. When the Company serves as a lessor of the sublease, the sublease will be classified on the basis of
the right-to-use assets resulting from the original lease.
① Accounting treatment of operating lease
The lease receipts for the operating lease will be recognized as the rental income according to the straight-line method
during each period of the lease term. The initial direct fee related to the operating lease to be incurred by the Company
will be capitalized and will be apportioned and included in the current profit or loss on the same basis as that for
recognition of the rental income in the lease term. The variable lease payments that are not included in the lease
receipts shall be included in the current profit or loss when they actually occur. In case of a change to the operating
lease, the Company will conduct accounting treatment with respect to the changed operating lease as a new lease as
of the effective date of the change, and the lease payments received in advance or receivable with respect to the lease
before the change will be taken as the lease receipts for the new lease.
② Accounting treatment of financial lease
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On the commencement of the lease term, the Company will recognize the financial lease receivables for the financial
lease, and derecognize the financial lease assets. The Company will take the net lease investment as the entry value
of the financial lease receivables when initially measuring the financial lease receivables. The net lease investment is
the sum of the unguaranteed residual value and the present value of the unreceived lease receipts discounted
according to the interest rate implicit in lease on the commencement of the lease term.
The Company will calculate and recognize the interest income during each period of the lease term at a fixed periodic
interest rate. The derecognition and impairment of the financial lease receivables will be subject to accounting
treatment according to this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10.
Financial instruments.
The variable lease payments that are not included in the measurement of the net lease investment shall be included in
the current profit or loss when they actually occur.
If the financial lease is changed and meets all of the following conditions, the Company will conduct accounting
treatment with respect to such change as a single lease:
Such change has expanded the scope of lease by increasing the right to use one or more leased assets;
The increased consideration and the separate consideration for the expanded part of the scope of lease shall be
equivalent to the amount adjusted according to this contract.
If the change in the financial lease is not subject to accounting treatment as a single lease, the Company will treat the
changed lease in the following circumstances:
If the change takes effect on commencement of the lease term and the lease is classified as operating lease, the
Company will conduct accounting treatment with respect to such lease as a new lease as of the effective date of the
lease change, and will take the net lease investment before the effective date of the lease change as the book value of
the leased asset;
If the change takes effect on the commencement date of the lease, and such lease is classified as the financial lease,
the Company will conduct accounting treatment according to the policy regarding modification or re-negotiation of the
contract in this section Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial
instruments.
(3) Sale and leaseback transaction
The Company evaluates and determines whether the asset transfer in the sale and leaseback transaction belongs to a
sale in accordance with the provisions of this section Financial Report - V. Significant Accounting Polices and
Accounting Estimates - 31. Income.
① Acting as a lessee
If the asset transfer in the sale and leaseback transaction is a sale, the Company as the lessee shall measure the
right-of-use asset arising from the sale and leaseback according to the part related to the right of use acquired from
the leaseback in the original book value of the asset, and only recognize relevant gain or loss on the rights transferred
to the lessor; if the asset transfer in the sale and leaseback transaction is not a sale, the Company as the lessee shall
continue to recognize the transferred asset, and recognize a financial liability equal to the transfer income. For
accounting treatment of the financial liabilities, refer to this section Financial Report - V. Significant Accounting Polices
and Accounting Estimates - 10. Financial instruments.
② Acting as a lessor
If the asset transfer in the sale and leaseback transaction is a sale, the Company as the lessee shall conduct
accounting treatment with respect to the asset purchase and conduct accounting treatment with respect to the asset
lease according to the policy in the foregoing "2. The Company as a lessor"; if the asset transfer in the sale and
leaseback transaction is not a sale, the Company as the lessor shall derecognize the transferred asset, but recognize
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a financial asset equal to the transfer income. For accounting treatment of the financial assets, refer to this section
Financial Report - V. Significant Accounting Polices and Accounting Estimates - 10. Financial instruments.
35. Other significant accounting policies and accounting estimates
(1) Termination of operation
Termination of business is a separately distinguishable constituent part that satisfies one of the following conditions
and that has been disposed of or classified by the Company as held for sale:
①This constituent part represents an independent primary business or a separate principal operating area;
②This constituent part is part of an associated plan to dispose an independent primary business or a separate
principal operating area;
③ This constituent part is a subsidiary acquired for resale.
The profit or loss from going concern and the profit or loss from discontinued operation will be separately presented in
the income statement. The operating profit or loss and the profit or loss from disposal, including impairment loss and
reversed amount from discontinued operation, will be presented as the profit or loss from discontinued operation. For
the discontinued operation presented in the current period, the Company will present the information previously
presented as the profit or loss from going concern as the profit or loss from discontinued operation during the
comparable accounting period.
(2) Repurchase of the Company's shares
The Company's shares repurchased by the Company for reducing the registered capital or rewarding employees shall
be treated as the treasury shares based on the actual amount paid, and shall be checked and registered at the same
time. If the repurchased shares are canceled, the difference between the actual amount paid for the repurchase and
the total par value of shares calculated based on the par value of the canceled shares and the number of canceled
shares will be set off against the capital reserve. If the capital reserve is insufficient, the retained earnings will be
written off; if the repurchased shares are awarded to the employees of the Company, it shall be categorized as equity-
settled share-based payment. When the Company receives the payment made by employees who exercise their rights
to purchase such shares, the amount shall be used to write off the cost of treasury shares delivered to employees and
the capital reserve in the waiting period and meanwhile, the capital reserve (stock premium) shall be adjusted
according to the difference.
36. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
Applicable □ Not applicable
① Implementation of Interpretation of Accounting Standards for Business Enterprises No.15
On December 30, 2021, the Ministry of Finance released the Interpretation of Accounting Standards for Business
Enterprises No.15 (CaiKuai (2021) No. 35, hereinafter referred to as “Interpretation No. 15”).
a. Accounting treatment for trial sales
Interpretation No. 15 stipulates how an enterprise conducts accounting treatment for and presents the sales of the
products or by-products produced before the fixed assets reach the predetermined serviceable state or during the
R&D process. It also stipulates that the net income of the trial sales shall not be used for offsetting the costs of fixed
assets or R&D expenditures. This Regulation shall come into effect as of January 1, 2022. Enterprises should make
retroactive adjustments for trial sales occurring between the beginning of the first period presented in the financial
247
statements and January 1, 2022. The implementation of such regulations has no significant impact on the financial
position and operating result of the Company.
b. Judgment on loss contracts
Interpretation No. 15 specifies that the “costs for performing the contract” considered by an enterprise in determining
whether a contract constitutes a loss contract shall include both the incremental cost for performing the contract and
the amortized amount of other costs directly related to the performance of the contract. This Regulation shall come into
effect as of January 1, 2022. Enterprises should execute this Regulation for the contracts whose obligations haven’t
been fulfilled completely by January 1, 2022. The cumulative impact index shall be adjusted for the retained earnings
and other related financial statement items at the beginning of the year in which the Regulation took into force, and the
data of the comparative financial statement in the previous period shall not be adjusted. The implementation of such
regulations has no significant impact on the financial position and operating result of the Company.
② Implementation of Interpretation of Accounting Standards for Business Enterprises No.16
On November 30, 2022, the Ministry of Finance released the Interpretation of Accounting Standards for Business
Enterprises No.16 (CaiKuai (2022) No. 31, hereinafter referred to as “Interpretation No. 16”).
a. Accounting treatment for income tax influence of dividends related to financial instruments classified as equity
instruments by the issuer
As stipulated in Interpretation No. 16, for the financial instruments which are classified as equity instruments by
enterprises, where relevant dividend expenditures are deducted before enterprise income tax in accordance with
relevant provisions of tax policies, the income tax influence related to dividends shall be recognized when the
dividends payable are recognized, and the income tax influence of the dividends shall be included in the item of
current profit and loss or owner’s equity (including the item of other comprehensive income) in the way consistent with
the accounting treatment adopted for transactions or matters which could generate profit available for distribution in
the past.
The Regulation shall come into effect as of the date of promulgation. The relevant dividends payable occurring from
January 1, 2022, to the effective date of the Regulation shall be adjusted in accordance with the Regulation.
Retroactive adjustments shall be made for the relevant financial instruments which occurred before January 1, 2022,
and had not been derecognized by January 1, 2022. The implementation of such regulations has no significant impact
on the financial position and operating result of the Company.
b. Accounting treatment of the condition when a cash-settled share-based payment is modified to be an equity-settled
share-based payment by an enterprise
Interpretation No. 16 specifies the following: where an enterprise modifies the terms and conditions of a cash-settled
share-based payment to turn it into an equity-settled share-based payment, the enterprise shall, on the modification
date (whether occurring within or after the waiting period), calculate the equity-settled share-based payment based on
the fair value of the granted equity instrument on the very day, including the services already acquired into the capital
reserve, derecognize the liabilities of the cash-settled share-based payment already recognized by the modification
date, and include the difference between the two into current profit or loss.
The Regulation shall come into effect as of the date of promulgation. The relevant new transactions occurring from
January 1, 2022, to the effective date shall be adjusted in accordance with the Regulation. Retroactive adjustments
shall be made for the relevant transactions which occurred before January 1, 2022 and had not been disposed of in
accordance with the Regulation. The cumulative impact index shall be adjusted for the retained earnings and other
related items recorded on January 1, 2022, and the data of the comparative financial statement in the previous period
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shall not be adjusted. The implementation of such regulations has no significant impact on the financial position and
operating result of the Company.
(2) Changes in significant accounting estimates
□ Applicable Not applicable
Ⅵ. Taxes
1. Major categories of taxes and tax rates
Tax Type Taxation basis Tax rate
According to the provisions of the tax
law, the sales tax shall be calculated
on the basis of the income by selling
goods and taxable services. After 13%, 9%, 6%, simple collection rate
VAT deducting the input tax that is of 5%, simple collection rate of 3%,
allowed to be deducted from the 0% and tax-free
sales tax in the current period, the
difference shall be the value added
tax
Urban Maintenance and Construction
Actually paid turnover tax 7%、5%
Tax
Enterprise Income Tax Taxable income 15%、16.5%、20%、25%
Education Surcharges Actually paid turnover tax 3%
Local Education Surcharges Actually paid turnover tax 2%
If there are multiple taxpayers with different enterprise income tax rates, specify the situation
Name of taxpayer Income tax rate
Zhejiang Dahua Technology Co., Ltd. 15%
Zhejiang Dahua System Engineering Co., Ltd. 15%
Zhejiang HuaRay Technology Co., Ltd. 15%
Zhejiang Huaxiao Technology Co., Ltd. 15%
Zhejiang Huafei Intelligent Technology CO., LTD. 15%
Zhejiang Huaruijie Technology Co., Ltd. 15%
Zhejiang Huajian Technology Co., Ltd. 15%
Hangzhou Huacheng Software Co., Ltd. 15%
Xinjiang Dahua Zhixin Information Technology Co., Ltd. 15%
Xinjiang Dahua Zhihe Information Technology Co., Ltd. 15%
Xinjiang Dahua Zhitian Information Technology Co., Ltd. 15%
Xinjiang Dahua Huayue Information Technology Co., Ltd. 15%
Xinjiang Dahua Xinzhi Information Technology Co., Ltd. 15%
Inner Mongolia Dahua Zhimeng Information Technology
15%
Co., Ltd.
Guangxi Dahua Zhicheng Co., Ltd. 15%
Guangxi Huacheng Technology Co., Ltd. 15%
Guizhou Meitan Dahua Information Technology Co., Ltd. 15%
Zhejiang Dahua Ju'an Technology Co., Ltd. 20%
Guangxi Dahua Technology Co., Ltd. 20%
Zhejiang Huakong Software Co., Ltd. 20%
Yunnan Zhili Technology Co., Ltd 20%
Guizhou Dahua Information Technology Co., Ltd. 20%
Dahua Technology (HK) Limited 16.5%
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Hangzhou Xiaohua Technology CO., LTD. 20%
Zhejiang Dahua Intelligent IoT Operation Service Co.,
20%
Ltd.
Chengdu Zhichuang Yunshu Technology Co., Ltd. 20%
Chengdu Huishan Smart Network Technology Co., Ltd. 20%
Guizhou Huayi Shixin Technology Co., Ltd. 20%
Zhejiang Zhoushan Digital Development Operation Co.
20%
Ltd.
Tianjin Dahua Information Technology Co., Ltd. 20%
Yibin Huahui Information Technology Co., Ltd. 20%
Anhui Dahua Zhilian Information Technology Co., Ltd. 20%
Chengdu Dahua Zhishu Information Technology Service
20%
Co., Ltd.
Chengdu Huazhiwei Technology Co., Ltd. 20%
Chengdu Dahua Wisdom Information Technology Co.,
20%
Ltd.
Nanyang Dahua Intelligent Information Technology Co.,
20%
Ltd.
Zhejiang Huaqi Intelligent Technology Co., Ltd. 20%
Luoyang Dahua Zhiyu Information Technology Co., Ltd. 20%
Other domestic companies 25%
Other overseas companies Applicable to local tax rate
2. Preferential tax rate
(1) According to the Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2020 (Guo
Ke Huo Zi [2020] No. 251) issued by the Office for the Administration of the Certification of National High-tech
Enterprises on December 29, 2020, the Company was certified as a high-tech enterprise, valid for 3 years. The
corporate income tax for this year was reduced to a rate of 15%.
(2) According to the Reply on the Filing of High-tech Enterprises in Zhejiang Province in 2019 (Guo Ke Huo Zi [2020]
No.32) issued by the Office for the Administration of the Certification of National High-tech Enterprises on January 20,
2020, our subsidiary Zhejiang Dahua System Engineering Co., Ltd. was certified as a high-tech enterprise, valid for 3
years. The corporate income tax for this year was reduced to a rate of 15%.
(3) According to the Announcement on the Filing of the First Batch of High-tech Enterprises of Zhejiang Province
Certified in 2021 issued by the Office for the Administration of the Certification of National High-tech Enterprises on
January 24, 2022, our subsidiaries Zhejiang HuaRay Technology Co., Ltd. and Zhejiang Huaxiao Technology Co., Ltd.
were certified as high-tech enterprises, validity for 3 years. The corporate income tax for this year was paid at a
reduced rate of 15%.
(4) According to the Reply on the Filing of the First Batch of High-tech Enterprises in Zhejiang Province in 2020 (Guo
Ke Huo Zi [2020] No.251) issued by the Office for the Administration of the Certification of National High-tech
Enterprises on December 29, 2020, our subsidiary Zhejiang Huafei Intelligent Technology Co., Ltd. was certified as a
high-tech enterprise, with validity for 3 years. The corporate income tax for this year was paid at a reduced rate of 15%.
(5) According to the Notice on the Filing and Publicity of High-tech Enterprises Certified by the Certification Body of
Zhejiang Province in 2022 issued by the Office for the Administration of the Certification of National High-tech
Enterprises on December 24, 2022, our subsidiaries Zhejiang Huaruijie Technology Co., Ltd., Zhejiang Huajian
Technology Co., Ltd. and Hangzhou Huacheng Software Co., Ltd. were certified as high-tech enterprises, with validity
for 3 years. The corporate income tax for this year was paid at a reduced rate of 15%.
(6) According to the Announcement of the State Taxation Administration on Matters Concerning the Implementation of
Preferential Income Tax Policies Supporting the Development of Small Low-Profit Enterprises and Individual Industrial
250
and Commercial Households (Announcement No.8/2021 of the State Taxation Administration), and the Announcement
of the Ministry of Finance and the State Taxation Administration on Further Implementing the Preferential Income Tax
Policies for Micro and Small Enterprises (Announcement No.13/2022 of the Ministry of Finance and the State Taxation
Administration), the annual taxable income of the following subsidiaries that is no more than RMB 1 million shall be
taxed at a reduced rate of 12.5% for tax purpose, and the enterprise income tax shall be paid at a rate of 20%; and the
annual taxable income exceeding RMB 1 million but no more than RMB 3 million shall be taxed at a reduced rate of 25%
and the enterprise income tax shall be paid at a rate of 20%: Zhejiang Dahua Ju'an Technology Co., Ltd., Yiwu Huaxi
Technology Co., Ltd., Guangxi Dahua Technology Co., Ltd., Shanghai Huashang Chengyue Information Technology
Service Co., Ltd., Beijing Huayue Shangcheng Information Technology Service Co., Ltd., Zhejiang Dahua Storage
Technology Co., Ltd., Zhejiang Huakong Software Co., Ltd., Yunnan Zhili Technology Co., Ltd, Guizhou Dahua
Information Technology Co., Ltd., Hangzhou Xiaohua Technology Co., Ltd., Zhejiang Dahua Intelligent IOT Operation
Service Co., Ltd., Chengdu Zhichuang Yunshu Technology Co., Ltd., Chengdu Huishan Smart Network Technology
Co., Ltd., Guizhou Huayi Shixin Technology Co., Ltd., Zhejiang Zhoushan Digital Development Operation Co. Ltd.,
Tianjin Dahua Information Technology Co., Ltd., Yibin Huahui Information Technology Co., Ltd., Anhui Dahua Zhilian
Information Technology Co., Ltd., Chengdu Dahua Zhishu Information Technology Service Co., Ltd., Chengdu
Huazhiwei Technology Co., Ltd., Chengdu Dahua Intelligent Information Technology Co., Ltd., Nanyang Dahua
Intelligent Information Technology Co., Ltd., Zhejiang Huaqi Intelligent Technology Co., Ltd. and Luoyang Dahua Zhiyu
Information Technology Co., Ltd.
(7) According to the document CaiShui [2011] No.58 by the Ministry of Finance, the State Administration of Taxation,
and the General Administration of Customs and the Announcement [2020] No. 23 of the Ministry of Finance, the
following subsidiaries can enjoy preferential tax policies related to the Development of the West Regions Program from
2011 to 2030: Xinjiang Dahua Zhixin Information Technology Co., Ltd., Xinjiang Dahua Zhihe Information Technology
Co., Ltd., Xinjiang Dahua Zhitian Information Technology Co., Ltd., Xinjiang Dahua Huayue Information Technology
Co., Ltd., Xinjiang Dahua Xinzhi Information Technology Co., Ltd., Inner Mongolia Dahua Zhimeng Information
Technology Co., Ltd., Guangxi Dahua Zhicheng Co., Ltd., Guangxi Huacheng Technology Co., Ltd. and Guizhou
Meitan Dahua Information Technology Co., Ltd. The corporate income tax for this year was paid at a reduced rate of
15%.
(8) According to the Notice on Value-added Tax Policies for Software Products (CaiShui [2011] No.100) by the Ministry
of Finance and the State Administration of Taxation, the sales of software products independently developed by
Zhejiang Dahua Technology Co., Ltd., Zhejiang Dahua System Engineering Co., Ltd., Hangzhou Xiaohua Technology
Co., Ltd., Zhejiang Huafei Intelligent Technology Co., Ltd., Jiangsu Huaruipin Technology Co., Ltd., Zhejiang Huaruijie
Technology Co., Ltd., Zhejiang Huajian Technology Co., Ltd., Zhejiang Huaxiao Technology Co., Ltd., Zhejiang Pixfra
Technology Co., Ltd., Hangzhou Huacheng Software Co., Ltd., Zhejiang HuaRay Technology Co., Ltd. and Hangzhou
Huacheng Network Technology Co., Ltd. shall be subject to a value-added tax at the rate of 13% first, and the actual
tax burden of more than 3% will be refunded after being reviewed and approved by the competent tax authorities.
(9) According to the Announcement on Relevant Policies for Deepening the Value-added Tax Reform (Joint
Announcement [2019] No. 39) by the Ministry of Finance, the State Administration of Taxation, and the General
Administration of Customs, from April 1, 2019 to December 31, 2021, the taxpayers from the productive and
consumer-oriented service sectors may increase 10% of current deductible input tax to offset the taxable amount
(hereinafter referred to as “Additional Deduction Policy”). According to Several Policies for Promoting the Recovery
and Development of Hard-hit Industries in the Service Sector (Fa Gai Cai Jin [2022] No. 271), the Additional Deduction
Policy for value-added taxes in the service sector will be extended, and in 2022, the taxpayers from the productive and
consumer-oriented service sectors may increase respectively 10% and 15% of the deductible input tax to offset the
taxable amount in the current period. The subsidiaries of the Company, Zhejiang Dahua Security Network Operation
251
Service Co., Ltd., Beijing Huayue Shangcheng Information Technology Service Co., Ltd., Shanghai Huashang
Chengyue Information Technology Service Co., Ltd., Chengdu Dahua Zhilian Information Technology Co., Ltd.,
Guangxi Dahua Zhicheng Co., Ltd., Guangxi Huacheng Technology Co., Ltd., Tianjin Dahua Information Technology
Co., Ltd., Xinjiang Dahua Zhihe Information Technology Co., Ltd. and Zhejiang Dahua Vision Technology Co., Ltd.
Xinjiang Branch meet the requirements in the Additional Deduction Policy for value-added taxes and have enjoyed
preferential tax policies for additional deduction of input taxes from 2022.
Ⅶ. Notes to the Items in the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB
Item Closing balance Opening balance
Cash on Hand 2,535.81 23,443.62
Bank Balance 7,787,399,232.70 7,326,702,072.79
Other Cash and Bank Balances 242,476,882.26 404,277,268.36
Total 8,029,878,650.77 7,731,002,784.77
Including: Total Amount
1,259,307,799.53 1,237,766,508.87
Deposited in Overseas Banks
The total amount
restricted for use due to mortgage, 130,637,542.35 96,491,171.83
pledge or freeze
The amount restricted for use due to mortgage, pledge or freeze:
Balance at the end of the previous
Item Closing balance
year
Bid/performance bond 110,737,143.60 78,754,709.42
Deposits for notes 13,583,198.60
Frozen funds 19,900,398.75 4,153,263.81
Total 130,637,542.35 96,491,171.83
2. Trading Financial Assets
Unit: RMB
Item Closing balance Opening balance
Financial assets at fair value through
1,470,000.00 2,602,173.53
profit or loss in this period
Including: Derivative Financial Assets 1,132,173.53
Financial products 1,470,000.00 1,470,000.00
Total 1,470,000.00 2,602,173.53
252
3. Notes Receivable
(1) Disclosure of Notes Receivable
Unit: RMB
Item Closing balance Opening balance
Bank Acceptance Notes 631,542,296.47 565,521,840.25
Commercial Acceptance Notes 240,759,774.71 274,339,722.10
Total 872,302,071.18 839,861,562.35
Unit: RMB
Closing balance Opening balance
Bad debt Bad debt
Book balance Book balance
provision provision
Categor
y Accru Book Accru Book
Percen ed value Percen ed value
Amount Amount Amount Amount
tage propo tage propo
rtion rtion
Notes
Receiva
ble with
the Bad
Debt
Provisio 6,550,20 6,550,20 100.0
0.75%
n 8.04 8.04 0%
Accrued
Based
on
Single
Item
Includin
g:
Comme
rcial
6,550,20 6,550,20 100.0
Accepta 0.75%
8.04 8.04 0%
nce
Notes
Notes
Receiva
ble with
the Bad
Debt
Provisio 911,616, 100.00 39,314,2 4.31 872,302, 872,390, 99.25 32,529,0 3.73 839,861,
n 343.99 % 72.81 % 071.18 616.35 % 54.00 % 562.35
Accrued
Based
on
Combin
ations
Includin
g:
Bank 638,799, 70.07 7,257,67 1.14 631,542, 571,898, 65.07 6,376,54 565,521,
1.11%
Accepta 974.81 % 8.34 % 296.47 384.64 % 4.39 840.25
253
nce
Notes
Comme
rcial
272,816, 29.93 32,056,5 11.75 240,759, 300,492, 34.18 26,152,5 8.70 274,339,
Accepta
369.18 % 94.47 % 774.71 231.71 % 09.61 % 722.10
nce
Notes
911,616, 100.00 39,314,2 872,302, 878,940, 100.00 39,079,2 839,861,
Total
343.99 % 72.81 071.18 824.39 % 62.04 562.35
Bad debt provision based on combinations: RMB 39,314,272.81
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Bank Acceptance Notes 638,799,974.81 7,257,678.34 1.14%
Commercial Acceptance
272,816,369.18 32,056,594.47 11.75%
Notes
Total 911,616,343.99 39,314,272.81
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if the
bad debt provisions of notes receivable are made according to the general model of expected credit losses:
□ Applicable Not applicable
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Written Off Others balance
Reversed
Bank
Acceptance 6,376,544.39 903,212.49 -22,078.54 7,257,678.34
Notes
Commercial
Acceptance 32,702,717.65 -646,123.18 32,056,594.47
Notes
Total 39,079,262.04 257,089.31 -22,078.54 39,314,272.81
Significant amount of recovered or reversed bad debt provision in this period:
□ Applicable Not applicable
(3) Notes receivable that the Company has pledged at the end of the period
Unit: RMB
Item Pledged amount by the end of period
Bank Acceptance Notes 526,956,639.23
Total 526,956,639.23
(4) Notes receivable that the Company has endorsed or discounted at the end of the period
and that have not yet expired on the balance sheet date
Unit: RMB
254
Derecognised amount at the end of Not derecognised amount at the end
Item
period of period
Bank Acceptance Notes 24,731,965.07
Total 24,731,965.07
(5) Notes that are converted by the Company into accounts receivable at the end of the period
for non-performance of the drawer
Unit: RMB
Amount Converted into Accounts Receivable at the End
Item
of the Period
Commercial Acceptance Notes 34,622,163.48
Total 34,622,163.48
4. Accounts Receivable
(1) Categorical disclosure of accounts receivable
Unit: RMB
Closing balance Opening balance
Bad debt Bad debt
Book balance Book balance
provision provision
Catego Accr Accr
ry Book Book
ued value ued value
Perce Perce
Amount Amount prop Amount Amount prop
ntage ntage
ortio ortio
n n
Accou
nts
receiva
bles
with
the
bad
debt 591,779,6 3.20 591,779, 100. 587,384,4 3.40 587,384, 100.
provisi 32.41 % 632.41 00% 95.64 % 495.64 00%
on
accrue
d
based
on
single
item
Includi
ng:
Accou
nts
receiva 591,779,6 3.20 591,779, 100. 587,384,4 3.40 587,384, 100.
ble 32.41 % 632.41 00% 95.64 % 495.64 00%
with
insignif
255
icant
single
amoun
t but
accrue
d for
separa
te
provisi
on of
bad
debt
Accou
nts
receiva
bles
with
the
bad
debt 17,881,36 96.80 2,469,45 13.8 15,411,90 16,675,21 96.60 2,020,72 12.1 14,654,49
provisi 6,096.82 % 7,535.32 1% 8,561.50 2,796.56 % 2,153.07 2% 0,643.49
on
accrue
d
based
on
combin
ations
Includi
ng:
Portfoli
o 2:
Aging
17,881,36 96.80 2,469,45 13.8 15,411,90 16,675,21 96.60 2,020,72 12.1 14,654,49
Analysi
6,096.82 % 7,535.32 1% 8,561.50 2,796.56 % 2,153.07 2% 0,643.49
s
Portfoli
o
18,473,14 100.0 3,061,23 15,411,90 17,262,59 100.0 2,608,10 14,654,49
Total
5,729.23 0% 7,167.73 8,561.50 7,292.20 0% 6,648.71 0,643.49
Bad Debt Provision Accrued Based on Single Item: RMB 591,779,632.41
Unit: RMB
Closing balance
Name Reason for making
Book balance Bad debt provision Accrued proportion
bad debt provision
Expected to be
Customer 1 260,153,530.00 260,153,530.00 100.00%
unable to recover
Expected to be
Customer 2 225,140,645.36 225,140,645.36 100.00%
unable to recover
Expected to be
Customer 3 49,001,963.55 49,001,963.55 100.00%
unable to recover
Expected to be
Customer 4 38,693,240.50 38,693,240.50 100.00%
unable to recover
Expected to be
Customer 5 18,790,253.00 18,790,253.00 100.00%
unable to recover
256
Total 591,779,632.41 591,779,632.41
Bad Debt Provision Accrued Based on Combinations: RMB 2,469,457,535.32
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Within 1 year (including 1
13,084,171,203.70 654,241,626.47 5.00%
year)
1 to 2 years 2,099,026,480.57 209,902,648.06 10.00%
2 to 3 years 888,681,376.06 266,604,412.82 30.00%
3 to 4 years 740,285,133.41 370,142,566.71 50.00%
4 to 5 years 503,178,109.10 402,542,487.28 80.00%
5 years or above 566,023,793.98 566,023,793.98 100.00%
Total 17,881,366,096.82 2,469,457,535.32
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if the
bad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable Not applicable
Disclosure by age
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 13,084,171,203.70
1 to 2 years 2,108,343,765.62
2 to 3 years 913,526,456.01
3 years or above 2,367,104,303.90
3 to 4 years 1,023,194,700.91
4 to 5 years 728,883,845.46
5 years or above 615,025,757.53
Total 18,473,145,729.23
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Written Off Others balance
Reversed
Bad debt 2,608,106,648 618,126,859.8 144,111,969.2 - 3,061,237,167
provision .71 4 7 20,884,371.55 .73
2,608,106,648 618,126,859.8 144,111,969.2 - 3,061,237,167
Total
.71 4 7 20,884,371.55 .73
(3) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Accounts receivable actually written off 144,111,969.27
257
(4) Accounts receivable of the top five closing balances collected by debtors
The accounts receivable of the top five balances at the end of the period collected by the debtors was summed up to
RMB 2,436,407,987.93, accounting for 13.19% of the total balance at the end of the period of accounts receivable.
The balance at the end of the period for bad debt provision accrued was RMB 272,987,839.69 accordingly.
(5) The amount of assets and liabilities generated due to transferred receivables that the
Company still keeps recourse or retains part of corresponding rights or interests
The amount of liabilities that
The amount of assets that the Company the Company still keeps
Item still keeps recourse or retains part of recourse or retains part of
corresponding rights or interests corresponding rights or
interests
Supply chain finance not
7,912,141.60 7,912,141.60
derecognized
Total 7,912,141.60 7,912,141.60
(6) Accounts receivable derecognized due to the transfer of financial assets
1) In accordance with the non-recourse accounts receivables purchase agreement signed between Dahua Hong Kong,
the subsidiary, and J.P.Morgan Chase in this period, the Company transferred the accounts receivables of USD
7,330,987.28 to J.P.Morgan Chase, which is equivalent to RMB 51,057,394.01. The amount of accounts receivables
was derecognised after the transfer.
2) In accordance with the non-recourse accounts receivables purchase agreement signed between Dahua Hong Kong,
the subsidiary, and Banco Santander of Spain in this period, the Company transferred the accounts receivables of
USD 29,938,567.71 to Banco Santander of Spain, which is equivalent to RMB 208,510,148.67. The amount of
accounts receivables was derecognised after the transfer;
3) In accordance with the non-recourse accounts receivables purchase agreement signed between Dahua USA, the
subsidiary, and JPMorgan Chase in this period, the Company transferred the accounts receivables of USD 437,918.50
to J.P.Morgan Chase, which is equivalent to RMB 3,049,927.19. The amount of accounts receivables was
derecognised after the transfer;
4) In accordance with the non-recourse accounts receivables purchase agreement signed between Dahua Vision, the
subsidiary, and Jinan Branch of China Merchants Bank Co., Ltd. in this period, the Company transferred the accounts
receivables of RMB 1,630,000.00 to Jinan Branch of China Merchants Bank Co., Ltd. The amount of accounts
receivables was derecognised after the transfer;
5) In accordance with the non-recourse accounts receivables purchase agreement signed between the Company
Dahua Technology and Sinosure Commercial Factoring (Shenzhen) Co., Ltd. in this period, the Company transferred
the accounts receivables of RMB 174,585.85 to Sinosure Commercial Factoring (Shenzhen) Co., Ltd. The amount of
accounts receivables was derecognised after the transfer;
6) In accordance with the non-recourse accounts receivables purchase agreement signed between the subsidiary
Hangzhou Huacheng and Shenzhen Qianhai Pingyu Commercial Factoring Co., Ltd. in this period, the Company
258
transferred the accounts receivables of RMB 351,515.74 to Shenzhen Qianhai Pingyu Commercial Factoring Co., Ltd.
The amount of accounts receivables was derecognised after the transfer.
5. Receivables Financing
(1) Disclosure of receivables financing
Unit: RMB
Item Closing balance Opening balance
Bank Acceptance Notes 679,441,917.62 792,709,781.57
Total 679,441,917.62 792,709,781.57
The increase and decrease of accounts receivable financing in the current period and the changes in the fair value.
□ Applicable Not applicable
Please refer to the disclosing methods of other receivables for the information disclosure of depreciation provisions, if
the depreciation provisions of accounts receivable financing are made according to the general model of expected
credit losses:
□ Applicable Not applicable
(2) Financing of accounts receivable pledged by the Company at the end of the period
Unit: RMB
Item Pledged amount by the end of period
Bank Acceptance Notes 605,139,088.29
Total 605,139,088.29
(3) Financing of accounts receivable that the Company has endorsed or discounted at the end
of the period and that have not yet expired on the balance sheet date
Unit: RMB
Derecognised amount at the end of Not derecognised amount at the end of
Item
period period
Bank Acceptance Notes 195,972,472.49
Total 195,972,472.49
6. Prepayments
(1) Aging analysis of prepayments is as follows
Unit: RMB
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 98,788,464.16 81.18% 150,234,638.63 87.84%
259
1 to 2 years 11,055,223.64 9.08% 14,193,274.00 8.30%
2 to 3 years 8,871,438.20 7.29% 4,364,375.43 2.55%
3 years or above 2,976,113.14 2.45% 2,241,758.59 1.31%
Total 121,691,239.14 -- 171,034,046.65 --
(2) Advance payment of the top five closing balances by prepayment parties
The advance payment of the top five closing balances by the concentration of prepayment parties was summed up to
RMB 58,571,484.08, accounting for 48.13% of the total closing balance of the advance payment.
7. Other Receivables
Unit: RMB
Item Closing balance Opening balance
Dividends Receivable 8,519,063.17
Other Receivables 393,330,183.71 546,477,779.16
Total 401,849,246.88 546,477,779.16
(1) Dividends Receivable
1) Classification of Dividends Receivable
Unit: RMB
Project (or Invested Unit) Closing balance Opening balance
Intelbras S.A. 8,519,063.17
Total 8,519,063.17
2) Provision for bad debts
□ Applicable Not applicable
(2) Other receivables
1) Other receivables categorized by the nature of the funds
Unit: RMB
Nature of the funds Closing balance Opening balance
Deposits 189,076,400.18 184,675,342.15
Prepaid or advance expense 117,681,402.84 114,389,093.05
Equity Transfer Fund 41,929,391.85 228,000,000.00
Export tax rebate 1,759,198.88 941,680.81
Employee home loan 108,572,799.00 112,565,185.64
Others 14,710,466.36 9,088,852.20
Total 473,729,659.11 649,660,153.85
260
2) Provision for bad debts
Unit: RMB
Phase One Phase Two Phase Three
Expected credit Expected credit
Bad debt provision Expected credit Total
losses for the entire losses for the entire
losses in the next 12
extension (without extension (with credit
months
credit impairment) impairment)
Balance on January
71,264,795.95 31,145,413.53 772,165.21 103,182,374.69
1, 2021
Balance in the
Current Period on
January 1, 2022
--Transfer to phase
-3,928,145.37 3,928,145.37
two
--Transfer to phase
-3,453.16 -41,679.66 45,132.82
three
Provisions of this
2,038,269.81 215,379.20 2,253,649.01
period
Reversals in this
24,028,319.44 103,334.43 24,131,653.87
period
Write off in this
172,393.66 107,701.38 304,587.95 584,682.99
period
Other variations -320,211.44 -320,211.44
Balance as of
42,812,272.88 36,962,447.67 624,754.85 80,399,475.40
December 31, 2022
Book balance changes with significant changes in loss provision in the current period
□ Applicable Not applicable
Disclosure by age
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 287,714,109.96
1 to 2 years 80,884,486.86
2 to 3 years 44,394,417.54
3 years or above 60,736,644.75
3 to 4 years 28,019,284.25
4 to 5 years 10,600,033.09
5 years or above 22,117,327.41
Total 473,729,659.11
3) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Category Opening Amount of Changes in the Current Period Closing
261
balance Recovered or balance
Accrued Written Off Others
Reversed
Bad debt 103,182,374.6
2,253,649.01 24,131,653.87 584,682.99 -320,211.44 80,399,475.40
provision 9
103,182,374.6
Total 2,253,649.01 24,131,653.87 584,682.99 -320,211.44 80,399,475.40
9
4) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Other accounts receivable actually written off 584,682.99
5) Other receivables of the top five closing balances collected by debtors
Unit: RMB
As a percentage
of total other Bad debt
Nature of the
Name of Unit Closing balance Aging receivables at provision at the
funds
the end of the end of the period
period
Equity Transfer
Company 1 41,929,391.85 Within 1 year 8.85% 2,096,469.59
Fund
Company 2 Deposits 17,702,160.00 Within 1 year 3.74% 885,108.00
Company 3 Deposits 14,790,000.00 1-2 years 3.12% 1,479,000.00
Company 4 Deposits 12,000,000.00 5 years or above 2.53% 12,000,000.00
Prepaid or
Company 5 advance 6,417,000.00 Within 1 year 1.35% 320,850.00
expense
Total 92,838,551.85 19.59% 16,781,427.59
6） There are no other accounts receivable related to government subsidies.
7) There are no other accounts receivable derecognised due to transfer of financial assets.
8) There are no assets and liabilities generated due to other transferred receivables that the
Company still keeps recourse or retains part of corresponding rights or interests.
8. Inventory
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
Impairment of Impairment of
Item Inventories or Inventories or
Book balance Book value Book balance Book value
Provision for Provision for
Impairment of Impairment of
Performance Performance
262
Cost Cost
2,938,477,842 2,895,383,180 2,352,908,447 2,319,240,801
Raw materials 43,094,661.62 33,667,646.69
.47 .85 .73 .04
Work-in- 1,198,499,421 1,180,412,331 1,153,151,247 1,132,775,809
18,087,089.24 20,375,437.77
progress .22 .98 .13 .36
Finished 3,045,977,790 2,993,401,370 3,047,677,900 2,960,805,491
52,576,420.27 86,872,409.00
goods .56 .29 .85 .85
Outsourced
246,175,556.9 246,175,556.9 397,219,186.5 397,219,186.5
work-in-
0 0 7 7
progress
7,429,130,611 113,758,171.1 7,315,372,440 6,950,956,782 140,915,493.4 6,810,041,288
Total
.15 3 .02 .28 6 .82
(2) Provision for impairment of inventories and provision for impairment of contract
performance cost
Unit: RMB
Increased in the current period Decreased in the current period
Opening Closing
Item Reversals or
balance Accrued Others Others balance
write-offs
Raw materials 33,667,646.69 46,282,374.80 39,118,978.70 -2,263,618.83 43,094,661.62
Work-in-
20,375,437.77 23,171,174.83 18,994,668.62 6,464,854.74 18,087,089.24
progress
Finished
86,872,409.00 52,485,204.36 63,816,139.56 22,965,053.53 52,576,420.27
goods
140,915,493.4 121,938,753.9 121,929,786.8 113,758,171.1
Total 27,166,289.44
6 9 8 3
9. Contract Assets
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Completed
101,450,982.5 100,489,071.0
but unsettled 8,632,619.32 100,346.47 8,532,272.85 961,911.45
1 6
assets
O&M service 6,968,929.49 71,994.55 6,896,934.94 6,135,599.16 61,355.99 6,074,243.17
Quality
113,734,287.2
guarantee 22,828,089.70 90,906,197.56 69,575,083.69 12,706,297.55 56,868,786.14
6
deposit
129,335,836.0 106,335,405.3 177,161,665.3 163,432,100.3
Total 23,000,430.72 13,729,564.99
7 5 6 7
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if the
bad debt provisions of contract assets are made according to the general model of expected credit losses:
□ Applicable Not applicable
Provision for impairment accrued for contract assets in this period:
263
Unit: RMB
Provisions of this Reversals in this Write-off in this
Item Causes
period period period
Completed but
861,564.98
unsettled assets
O&M service 10,638.56
Quality guarantee
10,121,792.15
deposit
Total 10,132,430.71 861,564.98 ——
10. Non-current Assets Due within 1 Year
Unit: RMB
Item Closing balance Opening balance
Long-term accounts receivables due
476,871,949.75 602,567,293.78
within 1 year
Total 476,871,949.75 602,567,293.78
Note: The amount of long-term receivables pledged by the Company at the end of the period is RMB 27,786,159.55.
See “XIV. Commitments and Contingencies/1. Significant commitments” for details.
11. Other Current Assets
Unit: RMB
Item Closing balance Opening balance
Not deducted input tax 790,981,344.36 595,811,123.81
Prepaid enterprise income tax 27,989,091.94 40,343,125.22
Return cost receivable 8,005,696.54 24,964,365.85
National debt reverse repurchase 520,497,000.00 525,000,000.00
Issue expenses 4,933,018.88 4,467,259.46
Total 1,352,406,151.72 1,190,585,874.34
12. Long-term Receivables
(1) Long-term receivables
Unit: RMB
Closing balance Opening balance
Range
Bad Bad of
Item debt debt
Book balance Book value Book balance Book value discoun
provisio provisio t rate
n n
Installme
nt
1,436,256,651.5 1,436,256,651.5 1,891,368,121.3 1,891,368,121.3
Payment
4 4 9 9
for Selling
Products
264
Including:
Unrealize
3.69%-
d 203,616,598.02 203,616,598.02 291,382,982.77 291,382,982.77
10.93%
Financing
Income
1,436,256,651.5 1,436,256,651.5 1,891,368,121.3 1,891,368,121.3
Total --
4 4 9 9
Book balance changes with significant changes in loss provision in the current period
□ Applicable √ Not applicable
(2) Long-term receivables derecognised due to transfer of financial assets
There are no long-term receivables derecognised due to transfer of financial assets.
(3) Assets/liabilities generated due to transferred long-term receivables that the Company still
keeps recourse or retains part of corresponding rights or interests
There are no assets/liabilities generated due to transferred long-term receivables that the Company still keeps
recourse or retains part of corresponding rights or interests.
Other notes
The amount of long-term receivables pledged by the Company at the end of the period is RMB 120,632,081.66. See
“XIV. Commitments and Contingencies/1. Significant commitments” for details.
265
13. Long-term equity investments
Unit: RMB
Decrease/Increase in the current period
Adjus
Investment tment Closing
Cash
Opening profit and on Provision Closing balance of
The invested Investm dividends
balance (book Investment loss other Other for balance (book provision
entity ent or profit
value) s recognized comp changes in impairme Others value) for decline
decrea declared
increased under the rehen equity nt in value
sed to
equity sive accrued
distribute
method incom
e
I. Joint ventures
II. Affiliates
444,970,435.1 29,055,846 53,757,343.7 66,629,581.7 23,682,4 570,282,566.4
Intelbras S.A. -448,230.26
0 .59 3 0 10.40 6
Ruicity Digital
Technology Co., 70,394,509.15 781,209.66 71,175,718.81
Ltd.
Zhejiang
-
Leapmotor 643,076,870.5 447,806,326. 650,470,259.1
440,412,937.
Technology Co., 1 37 8
70
Ltd.
Shuzi Dongyang
Technology 1,776,7
2,205,415.98 -428,622.82
Operation Co., 93.16
Ltd.
Hangzhou
Juhuanyan
723,496.
Information 723,496.39 723,496.39
39
Technology Co.,
Ltd.
Shaoxing Dahua 500,231.45 4,144.30 504,375.75
266
Security
Services Co.,
Ltd.
Guangdong
Zhishi Digital
-111,942.30 111,942.30
Technology Co.,
Ltd.
Zhejiang
Huanuokang 8,926,2 -
15,113,578.10
Technology Co., 88.85 6,187,289.25
Ltd.
Ningbo Huayan
Chuangxi
Venture Capital
Investment 62,135,559.93 -313,839.08 1,233,247.18 63,054,968.03
Partnership
(Limited
Partnership)
Dezhou Shuzhi
Information
3,392,656.30 14,863.33 3,407,519.63
Technology Co.,
Ltd.
Sichuan Hengji
Anhua Internet
of Things 1,360,000.00 -68,148.46 1,291,851.54
Technology Co.,
Ltd.
Guangxi FTZ
Huaqin Wisdom
Park Technology
500,000.00 -38,470.88 461,529.12
Research
Institute Co.,
Ltd.
Ningbo Cida
Yongshun
1,665,000.
Intelligent -26,799.41 1,638,200.59
00
Technology Co.,
Ltd.
267
Zhejiang
Huachuang
- - 111,488,000.0
Vision 98,812,655.44
6,779,081.93 5,896,262.63 0
Technology Co.,
Ltd.
-
1,243,872,752 31,220,846 10,703, 509,772,892. 23,682,4 723,496. 111,151,712.0 1,461,099,644.
Subtotal 399,809,570. 723,496.39
.91 .59 082.01 62 10.40 39 4 55
81
-
1,243,872,752 31,220,846 10,703, 509,772,892. 23,682,4 723,496. 111,151,712.0 1,461,099,644.
Total 399,809,570. 723,496.39
.91 .59 082.01 62 10.40 39 4 55
81
268
14. Other Non-current Financial Assets
Unit: RMB
Item Closing balance Opening balance
Investment in equity instruments 375,902,994.01 349,744,582.17
Investment in financial products 555,140,136.32 595,875,383.80
Total 931,043,130.33 945,619,965.97
15. Investment Properties
(1) Investment properties measured by cost method
Applicable □ Not applicable
Unit: RMB
Buildings and Projects under
Item Land use rights Total
constructions Construction
I. Original book value
1. Opening
382,153,185.05 9,091,828.00 391,245,013.05
Balance
2. Increased in
130,349,947.56 7,541,774.65 137,891,722.21
the Current Period
(1)
Purchase
(2) Transfer
of fixed
130,349,947.56 7,541,774.65 137,891,722.21
assets\intangible
assets
(3)
Acquisition
3. Decreased in
6,573,852.64 817,873.57 7,391,726.21
the Current Period
(1) Disposal
(2) Transfer
to fixed
6,573,852.64 817,873.57 7,391,726.21
assets/intangible
assets
4. Closing
505,929,279.97 15,815,729.08 521,745,009.05
Balance
II. Accumulated
Depreciation and
Amortization
1. Opening
78,431,596.38 1,748,393.24 80,179,989.62
Balance
2. Increased in
19,768,264.31 920,155.18 20,688,419.49
the Current Period
(1) Accrual 18,679,203.01 194,525.61 18,873,728.62
269
or Amortization
(2) Transfer
of fixed
1,089,061.30 725,629.57 1,814,690.87
assets\intangible
assets
3. Decreased in
2,007,681.86 151,542.02 2,159,223.88
the Current Period
(1) Disposal
(2) Transfer
to fixed
2,007,681.86 151,542.02 2,159,223.88
assets/intangible
assets
4. Closing
96,192,178.83 2,517,006.40 98,709,185.23
Balance
III. Impairment
Provision
1. Opening
Balance
2. Increased in
the Current Period
(1) Accrual
3. Decreased in
the Current Period
(1) Disposal
(2) Other
Transfer-out
4. Closing
Balance
IV. Book value
1. Closing
Balance on Book 409,737,101.14 13,298,722.68 423,035,823.82
Value
2. Opening
Balance on Book 303,721,588.67 7,343,434.76 311,065,023.43
Value
(2) Investment properties measured at fair value
□ Applicable Not applicable
(3) Investment properties with certificates of title not granted
Unit: RMB
Reasons for Certificates of Title not
Item Book value
Granted
Dahua Digital Intelligence Industry In the process of obtaining the real
155,923,314.69
Park - New Headquarters Building estate certificates
Xi’an R&D and Sales Center of In the process of obtaining the real
115,485,442.47
Dahua estate certificates
Phase II, Dahua Intelligent (IoT)
524,922.75 Completed in March 2023
Industrial Park Construction Project
270
16. Fixed Assets
Unit: RMB
Item Closing balance Opening balance
Fixed Assets 4,643,617,574.85 2,187,435,714.17
Total 4,643,617,574.85 2,187,435,714.17
(1) Fixed assets
Unit: RMB
Housing and Machinery and Means of Electronic and
Item Total
building equipment transport other equipment
I. Original book
value:
1. Opening 1,641,755,474.5 1,376,902,529.8 3,480,933,708.1
416,430,728.04 45,844,975.80
Balance 1 4 9
2. Increased
2,584,954,805.2 3,092,336,788.1
in the Current 119,547,004.01 5,921,851.68 381,913,127.14
9 2
Period
(1) Purchase 5,628,258.53 119,547,004.01 5,921,851.68 381,650,741.82 512,747,856.04
(2) Transferred
From 2,572,752,694.1 2,573,015,079.4
262,385.32
Construction in 2 4
Progress
(3) Acquisition
(4) Transfer of
investment 6,573,852.64 6,573,852.64
properties
3.
Decreased in the 132,155,602.47 885,955.13 17,676,239.57 51,735,705.34 202,453,502.51
Current Period
(1) Disposal or
1,805,654.91 798,344.51 17,214,036.03 34,637,144.94 54,455,180.39
Scrapping
(2) Transfer to
investment real 130,349,947.56 130,349,947.56
estate
(3) Disposal of
87,610.62 462,203.54 17,098,560.40 17,648,374.56
subsidiaries
4. Currency
Translation 80,670.40 49,574.81 85,365.19 2,235,356.68 2,450,967.08
Difference
5. Closing 4,094,635,347.7 1,709,315,308.3 6,373,267,960.8
535,141,351.73 34,175,953.10
Balance 3 2 8
II. Accumulated
depreciation
1. Opening 1,293,497,994.0
336,592,432.99 126,212,868.67 28,737,613.16 801,955,079.20
Balance 2
2. Increased 131,509,439.44 38,601,458.08 6,065,586.52 310,631,247.51 486,807,731.55
271
in the Current
Period
(1) Accrual 129,501,757.58 38,601,458.08 6,065,586.52 310,631,247.51 484,800,049.69
(2) Transfer of
investment 2,007,681.86 2,007,681.86
properties
3.
Decreased in the 1,492,071.31 451,275.51 10,302,770.80 39,730,280.28 51,976,397.90
Current Period
(1) Disposal or
403,010.01 448,501.19 10,284,475.24 28,351,594.89 39,487,581.33
Scrapping
(2) Transfer to
investment real 1,089,061.30 1,089,061.30
estate
(3) Disposal of
2,774.32 18,295.56 11,378,685.39 11,399,755.27
subsidiaries
4. Currency
Translation 15,730.72 44,951.48 78,568.70 1,181,807.46 1,321,058.36
Difference
5. Closing 1,074,037,853.8 1,729,650,386.0
466,625,531.84 164,408,002.72 24,578,997.58
Balance 9 3
III. Impairment
Provision
1. Opening
Balance
2. Increased
in the Current
Period
(1) Accrual
3.
Decreased in the
Current Period
(1) Disposal or
Scrapping
4. Closing
Balance
IV. Book value
1. Closing
3,628,009,815.8 4,643,617,574.8
Balance on Book 370,733,349.01 9,596,955.52 635,277,454.43
9 5
Value
2. Opening
1,305,163,041.5 2,187,435,714.1
Balance on Book 290,217,859.37 17,107,362.64 574,947,450.64
2 7
Value
(2) Fixed assets with certificates of title not granted
Unit: RMB
Reasons for certificates of title not
Item Book value
granted
Dahua Digital Intelligence Industry In the process of obtaining the real
1,028,132,654.51
Park - New Headquarters Building estate certificates
272
Xi’an R&D and Sales Center of In the process of obtaining the real
850,208,923.61
Dahua estate certificates
Phase III, Dahua Intelligent (IoT)
324,643,761.36 Completed in March 2023
Industrial Park Construction Project
Phase II, Dahua Intelligent (IoT)
417,521,940.65 Completed in March 2023
Industrial Park Construction Project
17. Construction in Progress
Unit: RMB
Item Closing balance Opening balance
Projects under Construction 423,535,552.03 1,992,834,055.03
Total 423,535,552.03 1,992,834,055.03
(1) Construction in progress
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Phase I,
Urban
Intelligent
Information 37,183,163.71 37,183,163.71 34,489,372.65 34,489,372.65
Industry
Construction
Project
The phase II
construction
project of the
287,731,881.7 287,731,881.7
smart 16,685,912.78 16,685,912.78
4 4
manufacturing
base in
Hangzhou
Construction
Project of 461,248,638.2 461,248,638.2
2,055,434.16 2,055,434.16
Xi'an R & D 8 8
Center
The
construction
project of 221,631,343.2 221,631,343.2
48,727.24 48,727.24
Xi'an 8 8
Marketing
Center
Project of
Smart IoT
Solution R & 880,987,482.8 880,987,482.8
19,100,734.18 19,100,734.18
D and 1 1
Industrializatio
n
New project of
Southwest 84,276,952.86 84,276,952.86 26,334,500.78 26,334,500.78
R&D Center
273
of Dahua Co.,
Ltd.
New projects
of
Southwestern
154,424,552.6 154,424,552.6
China 29,054,744.55 29,054,744.55
7 7
Operation
Center of
Dahua
109,760,074.4 109,760,074.4
Others 51,356,090.94 51,356,090.94
3 3
423,535,552.0 423,535,552.0 1,992,834,055 1,992,834,055
Total
3 3 .03 .03
274
(2) Changes in significant construction in progress
Unit: RMB
Capit
alizati
Includin
Project on
Other g:
accumula Accum rate
amount capitali
tive ulated of the
Increased in Transfer amount s Project zed
Budg Opening Closing investme capitali intere Capital
Item Name the current of fixed assets in decrea Progres interest
et balance balance nt as a zed st in Source
period this period sed in s amount
percenta interest the
current in the
ge of the amount curre
period current
budget nt
period
perio
d
Project of
Smart IoT RMB
Solution R 912 282,466,672.9 1,144,353,421.5 Equity
880,987,482.81 19,100,734.18 139.06% 98.36%
& D and millio 5 8 Fund
Industrializ n
ation
The phase
II
constructio RMB
n project of 827 106.36% Equity
287,731,881.74 75,451,175.88 346,497,144.84 16,685,912.78 97.93%
the smart millio (Note 1) Fund
manufactur n
ing base in
Hangzhou
Constructio RMB
n Project of 734 204,142,421.0 Equity
461,248,638.28 663,335,625.21 2,055,434.16 98.86% 98.86%
Xi'an R & millio 9 Fund
D Center n
The RMB
100.00 Equity
constructio 300 221,631,343.28 96,422,180.35 318,004,796.39 48,727.24 115.56%
% Fund
n project of millio
275
Xi'an n
Marketing
Center
Phase I,
Urban
RMB
Intelligent
39.33 Equity
Information 34,489,372.65 2,693,791.06 37,183,163.71 94.53% 94.53%
millio Fund
Industry
n
Constructio
n Project
New
project of
RMB
Southwest
417 Equity
R&D 26,334,500.78 57,942,452.08 84,276,952.86 22.01% 22.01%
millio Fund
Center of
n
Dahua Co.,
Ltd.
New
projects of
RMB
Southwest
396 125,369,808.1 154,424,552.6 Equity
ern China 29,054,744.55 42.46% 42.46%
millio 2 7 Fund
Operation
n
Center of
Dahua
1,941,477,964.0 844,488,501.5 2,472,190,988.0 313,775,477.6
Total
9 3 2 0
Note 1: Fixed assets of RMB 443,849,828.33 were transferred to the project in 2021.
276
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
18. Right-of-use Assets
Unit: RMB
Item Housing and building Machinery and equipment Total
I. Original book value
1. Opening Balance 334,918,568.44 8,884,640.73 343,803,209.17
2. Increased in the
227,226,694.13 227,226,694.13
Current Period
3. Decreased in the
95,860,760.32 95,860,760.32
Current Period
4. Foreign Currency
2,987,394.00 2,987,394.00
Translation Difference
5. Closing Balance 469,271,896.25 8,884,640.73 478,156,536.98
II. Accumulated
depreciation
1. Opening Balance 95,077,759.85 148,077.35 95,225,837.20
2. Increased in the
131,276,055.79 888,464.02 132,164,519.81
Current Period
(1) Accrual 131,276,055.79 888,464.02 132,164,519.81
3. Decreased in the
64,669,160.55 64,669,160.55
Current Period
(1) Disposal 64,669,160.55 64,669,160.55
4. Foreign Currency
734,363.02 734,363.02
Translation Difference
5. Closing Balance 162,419,018.11 1,036,541.37 163,455,559.48
III. Impairment Provision
1. Opening Balance
2. Increased in the
Current Period
(1) Accrual
3. Decreased in the
Current Period
(1) Disposal
4. Closing Balance
IV. Book value
1. Closing Balance on
306,852,878.14 7,848,099.36 314,700,977.50
Book Value
2. Opening Balance on
239,840,808.59 8,736,563.38 248,577,371.97
Book Value
277
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
19. Intangible Assets
(1) Details of intangible assets
Unit: RMB
Non-
Land use Trademark Software
Item Patent right patented Software Total
rights rights copyright
technology
I. Original
book value
1. Opening 576,821,57 73,060,508. 161,464,15 2,046,545.6 4,000,000.0 817,392,78
Balance 3.87 70 2.94 0 0 1.11
2.
Increased in 31,048,462. 31,866,335.
817,873.57
the Current 11 68
Period
(1) 18,908,218. 18,908,218.
Purchase 48 48
(2) Internal
research
and
developmen
t
(3)
Acquisition
(4) Transfer
of 12,140,243. 12,140,243.
construction 63 63
in progress
(5) Transfer
of
817,873.57 817,873.57
investment
properties
3.
Decreased
8,303,697.6 4,530,000.0 37,569,199. 50,402,897.
in the
5 0 46 11
Current
Period
1,804,487.9 2,566,410.9
(1) Disposal 761,923.00
0 0
(2) Transfer
to 7,541,774.6 7,541,774.6
investment 5 5
real estate
(3) Disposal
4,530,000.0 35,764,711. 40,294,711.
of
0 56 56
subsidiaries
4. Currency
3,654,280.7 3,674,194.3
Translation 10,160.00 9,753.60
4 4
Difference
5. Closing 569,345,90 68,530,508. 158,597,69 2,056,299.2 4,000,000.0 802,530,41
Balance 9.79 70 6.33 0 0 4.02
II.
278
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Accumulate
d
amortization
1. Opening 41,806,205. 53,434,775. 131,975,51 2,046,545.6 4,000,000.0 233,263,03
Balance 34 25 3.49 0 0 9.68
2.
Increased in 13,129,859. 4,852,950.4 28,710,877. 46,693,687.
the Current 00 2 59 01
Period
12,978,316. 4,852,950.4 28,710,877. 46,542,144.
(1) Accrual
98 2 59 99
(2) Transfer
of
151,542.02 151,542.02
investment
properties
3.
Decreased
4,530,000.0 32,105,984. 37,361,614.
in the 725,629.57
0 65 22
Current
Period
1,735,748.6 1,735,748.6
(1) Disposal
2 2
(2) Transfer
to
725,629.57 725,629.57
investment
real estate
(3) Disposal
4,530,000.0 30,370,236. 34,900,236.
of
0 03 03
subsidiaries
4. Currency
2,742,296.8 2,752,050.4
Translation 9,753.60
3 3
Difference
5. Closing 54,210,434. 53,757,725. 131,322,70 2,056,299.2 4,000,000.0 245,347,16
Balance 77 67 3.26 0 0 2.90
III.
Impairment
Provision
1. Opening
Balance
2.
Increased in
the Current
Period
(1) Accrual
3.
Decreased
in the
Current
Period
(1) Disposal
4. Closing
279
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Balance
IV. Book
value
1. Closing
515,135,47 14,772,783. 27,274,993. 557,183,25
Balance on
5.02 03 07 1.12
Book Value
2. Opening
535,015,36 19,625,733. 29,488,639. 584,129,74
Balance on
8.53 45 45 1.43
Book Value
(2) No land use right without the certificate of title at the end of the period
20. Goodwill
(1) Original book value of goodwill
Unit: RMB
The invested Increased in the current period Decreased in the current period
entity or
Opening Generated Closing
matters which
balance from business Disposal balance
formed
goodwill combination
Dahua
Technology 6,615,294.18 6,615,294.18
Italy S.R.L.
Lorex
Technology 36,070,196.12 36,070,196.12
Inc.
Total 42,685,490.30 36,070,196.12 6,615,294.18
(2) Impairment provision for goodwill
Unit: RMB
Information about the asset group or asset group combination where the goodwill is located
The invested entity name Amount of Information about the asset group or asset group combination where it is
or goodwill located
matters which formed
goodwill
6,615,294.18 The asset group relating to the goodwill formed by acquisition of Dahua
Dahua Technology Italy Technology Italy S.R.L., that is, the long-term asset group, including fixed
S.R.L. assets and intangible assets, formed for Dahua Technology Italy S.R.L. on
December 31, 2022.
Explain the goodwill impairment test process, key parameters (e.g. growth rate at forecast period, growth rate at
steady period, profit rate, discount rate, forecast period, etc. when the present value of future cash flow is estimated)
and the confirmation method of goodwill impairment loss:
The recoverable amount is determined mainly according to the present value of the expected future cash flow of the
relevant asset group. Its future cash flow is determined based on the 5-year financial budget for 2023-2027 approved
by the management, with a discount rate of 14% to 18%. Cash flows over 5 years are calculated on the basis of zero
growth rate. The growth rate is determined based on the growth forecast of the relevant industry and does not exceed
the long-term average growth rate of the industry. Future cash flow estimates are based on management’s estimated
280
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
sales amount, cost of sales, and operating expenses during the forecast period based on past performance and
expectations of market development.
Result of goodwill impairment test
The Company assessed the recoverable amount of goodwill. The recoverable amount of the asset group of Dahua
Technology Italy S.R.L. was higher than the book value. There was no sign of impairment of the goodwill of the asset
group.
21. Long-term Deferred Expenses
Unit: RMB
Prepaid
Increased in the Other Amounts
Item Opening balance Expenses in This Closing balance
current period Decreased
Period
Improvement
expenditure of
fixed assets 45,876,764.73 62,604,651.87 32,733,139.22 2,247,788.97 73,500,488.41
leased by
operating lease
Renovation Cost 63,903,741.77 6,777,807.21 57,125,934.56
Total 45,876,764.73 126,508,393.64 39,510,946.43 2,247,788.97 130,626,422.97
22. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred income tax assets not written off
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred Income Tax Deductible temporary Deferred Income Tax
difference Assets difference Assets
Provision for
2,926,506,726.22 578,958,458.15 2,552,444,179.21 521,830,114.13
Impairment of Assets
Unrealized Profit
from Internal 871,706,793.72 172,050,495.83 921,491,510.12 185,000,859.88
Transactions
Deductible Losses 819,688,449.21 143,540,714.98 539,801,646.05 94,981,532.35
Equity incentive
27,100,033.66 4,227,763.19
expense
Expected Liabilities 192,813,041.57 29,194,206.38 235,881,836.61 35,883,364.90
Payroll payable 255,864,043.82 42,002,714.30 259,988,223.28 42,643,270.84
Costs from Tax
Increase Due to 358,704,786.40 75,803,754.22 326,697,479.46 70,722,772.85
Absence of Invoice
Changes in fair value
1,458,799.36 364,699.84 1,021,963.72 255,490.93
gains and losses
Others 117,004,064.43 21,715,178.38 49,539,884.10 9,057,423.94
Total 5,570,846,738.39 1,067,857,985.27 4,886,866,722.55 960,374,829.82
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2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Non-offset deferred income tax liabilities
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred Income Tax Taxable temporary Deferred Income Tax
difference Liabilities difference Liabilities
The gross profit of
77,645,933.88 13,600,068.25 105,723,742.64 18,998,931.10
sales by installments
Changes in fair value
of financial 273,376,308.00 41,006,446.20 284,526,701.97 42,779,573.34
instruments
Total 351,022,241.88 54,606,514.45 390,250,444.61 61,778,504.44
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Offset
Unit: RMB
Amount of Deferred Balance of Deferred Amount of Deferred Balance of Deferred
Income Tax Assets Income Tax Assets or Income Tax Assets Income Tax Assets or
Item Offset against Liabilities after Offset Offset against Liabilities after Offset
Liabilities at the End at the End of the Liabilities at the Start at the Start of the
of the Period Period of the Period Period
Deferred Income Tax
53,438,041.12 1,014,419,944.15 960,374,829.82
Assets
Deferred Income Tax
53,438,041.12 1,168,473.33 61,778,504.44
Liabilities
(4) Deferred income tax assets or liabilities listed by net amount after offset
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 428,369,185.61 414,539,114.69
Deductible Losses 1,228,910,987.48 770,269,801.97
Total 1,657,280,173.09 1,184,808,916.66
(5) Details of unrecognized deferred income tax assets
Unit: RMB
Year Closing balance Opening balance Notes
2022 13,558,094.01
2023 31,938,173.71 31,967,123.71
2024 123,444,991.24 129,611,292.94
2025 260,585,329.81 261,674,362.25
2026 331,765,660.29 333,458,929.06
2027 481,176,832.43
Total 1,228,910,987.48 770,269,801.97
282
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
23. Other Non-current Assets
Unit: RMB
Closing balance Opening balance
Provi
Item Provision sion
Book balance for Book value Book balance for Book value
impairment impair
ment
Contract
29,115,751.74 29,115,751.74 35,741,476.55 35,741,476.55
Assets
Prepayment
s for
purchase of 50,986,092.83 50,986,092.83 61,485,385.44 61,485,385.44
engineering
equipments
Prepayment
s for
40,020,000.00 40,020,000.00
acquisition of
land
Prepayment
s for
21,110,059.00 21,110,059.00
acquisition of
real estate
Total 141,231,903.57 141,231,903.57 97,226,861.99 97,226,861.99
24. Short-term Loans
(1) Categories of short-term loan
Unit: RMB
Item Closing balance Opening balance
Fiduciary loans 249,800,000.00 294,230,000.00
Discount of notes not matured 7,912,141.60 29,964,651.09
Interest payable for short-term loan 231,476.91 1,453,579.89
Total 257,943,618.51 325,648,230.98
(2) At the end of the year, there are no unpaid short-term loans that have been overdue.
25. Trading financial liabilities
Unit: RMB
Item Closing balance Opening balance
Transactional financial liabilities 26,652,319.25
Of which: Derivative financial
26,652,319.25
liabilities
Total 26,652,319.25
283
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
26. Notes payable
Unit: RMB
Types Closing balance Opening balance
Commercial acceptance bill 2,821,289,185.08 2,689,373,228.96
Bank acceptance bill 1,542,808,576.09 1,783,625,736.07
Total 4,364,097,761.17 4,472,998,965.03
27. Accounts payable
(1) Details of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payment for purchase of materials 6,577,743,073.06 6,755,965,348.15
Payment for engineering equipments 762,534,315.23 573,775,302.56
Total 7,340,277,388.29 7,329,740,650.71
(2) Important accounts payable aged over 1 year
There are no important accounts payable aged over 1 year.
28. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Payments for sales of goods 378,029,459.81 301,188,575.89
Pre-payments from construction
559,859,741.12 390,506,325.54
projects
Sales of points 55,754,785.19 45,733,110.88
Service expense collected in
225,904,025.76 127,561,981.47
advance
Total 1,219,548,011.88 864,989,993.78
29. Payroll payable
(1) Details of payroll payable
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
I. Short-term
1,961,520,228.87 6,699,099,530.57 7,097,681,665.44 1,562,938,094.00
remuneration
II. Dimission benefits
- defined contribution 2,982,937.26 333,667,892.70 333,662,213.85 2,988,616.11
plan
III. Dismissal welfare 44,450,697.14 27,174,241.82 17,276,455.32
Total 1,964,503,166.13 7,077,218,120.41 7,458,518,121.11 1,583,203,165.43
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2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Details of short-term remuneration
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
1. Wages or salaries,
bonuses, allowances 1,658,561,542.60 5,890,513,658.15 6,283,389,184.14 1,265,686,016.61
and subsidies
2. Staff welfare 123,748,580.16 123,727,122.68 21,457.48
3. Social insurance
1,263,720.55 203,560,056.82 203,409,287.79 1,414,489.58
contributions
Including: medical
421,897.70 193,740,477.25 192,919,307.81 1,243,067.14
insurance
Work injury
114,111.84 8,327,821.37 8,270,510.77 171,422.44
insurance premium
Maternity
727,711.01 1,491,758.20 2,219,469.21
insurance premium
4. Housing funds 55,304.46 377,782,955.24 377,767,373.19 70,886.51
5. Labor union and
301,639,661.26 103,494,280.20 109,388,697.64 295,745,243.82
education funds
Total 1,961,520,228.87 6,699,099,530.57 7,097,681,665.44 1,562,938,094.00
(3) Details of defined contribution plans
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
1. Basic pension
2,825,955.34 319,178,290.26 319,263,338.28 2,740,907.32
insurance
2. Unemployment
156,981.92 14,489,602.44 14,398,875.57 247,708.79
insurance
Total 2,982,937.26 333,667,892.70 333,662,213.85 2,988,616.11
30. Taxes and fees payable
Unit: RMB
Item Closing balance Opening balance
VAT 174,205,171.22 228,793,071.57
Enterprise Income Tax 94,127,161.97 340,653,457.58
Individual income tax 27,792,426.06 22,921,726.41
Urban Maintenance and Construction
8,019,521.09 42,050,328.33
Tax
Education surcharges (including local
5,728,229.41 30,028,462.18
education surcharges)
Stamp duty 7,984,104.22 3,555,576.99
Others 9,025,133.81 9,073,970.95
Total 326,881,747.78 677,076,594.01
285
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
31. Other payables
Unit: RMB
Item Closing balance Opening balance
Dividends Payable 16,060,762.89
Other Payables 1,004,056,999.91 661,691,938.58
Total 1,004,056,999.91 677,752,701.47
(1) Dividends payable
Unit: RMB
Item Closing balance Opening balance
Equity Incentive Restricted Stock
16,060,762.89
Dividend
Total 16,060,762.89
(2) Other payables
1) Other payables listed by nature of funds
Unit: RMB
Item Closing balance Opening balance
Deposits 118,085,781.49 139,819,795.34
Temporarily borrowed and advance
230,952,097.15 222,989,981.74
payments
Restricted share repurchase
609,859,632.00 277,169,524.09
obligations
Others 45,159,489.27 21,712,637.41
Total 1,004,056,999.91 661,691,938.58
2） Other major payables aged over 1 year
There are no significant other payables aged over 1 year.
32. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term debt due within one year 2,376,950,000.00 775,500,000.00
Lease liabilities due within 1 year 123,421,101.68 93,008,992.50
Interest payable due within 1 year 2,639,684.05 2,339,749.97
Other loans due within 1 year 55,000,000.00 20,000,000.00
Total 2,558,010,785.73 890,848,742.47
286
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
33. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
To-be-transferred sales taxes in
46,811,489.60 60,826,417.44
installments
To-be-transferred sales taxes of
94,461,157.60 62,496,325.49
contract liabilities
Notes not derecognised 24,731,965.07 85,308,638.52
Total 166,004,612.27 208,631,381.45
34. Long-term loans
(1) Classification of long-term loans
Unit: RMB
Item Closing balance Opening balance
Pledged loans 77,000,000.00 102,500,000.00
Fiduciary loans 376,825,000.00 1,450,000,000.00
Total 453,825,000.00 1,552,500,000.00
35. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease Liabilities 196,340,654.27 140,606,139.33
Total 196,340,654.27 140,606,139.33
36. Accrued liabilities
Unit: RMB
Item Closing balance Opening balance Causes
Pending litigation 1,111,463.96 1,775,746.00 Pending litigation
Others 135,647.46 23,705.16 Loss-making contract
Expected after-sales
213,524,280.22 256,486,842.50 After-sales maintenance
maintenance cost
Expected return amount
12,992,996.29 39,565,492.96 Expected sales return
after the period
Total 227,764,387.93 297,851,786.62 --
37. Deferred income
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance Causes
current period current period
Government Received
103,218,676.13 7,617,500.00 6,173,128.75 104,663,047.38
subsidies government
287
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
subsidies related
to assets
Total 103,218,676.13 7,617,500.00 6,173,128.75 104,663,047.38 --
Projects related to government subsidies:
Unit: RMB
Amou
nt
The
recor
Amou
ded Relat
nt
as Oth ed to
The Amount Writte
The amount of non- er asset
Opening Recorded as n off
Liabilities new subsidies opera vari Closing balance s/relat
balance Other Income Costs
in this period ting atio ed to
in This Period in
reven ns incom
This
ue in e
Perio
this
d
perio
d
Special
awards for
Fuyang
Relat
Dahua
ed to
Intelligenc 49,175,662.96 3,172,623.48 46,003,039.48
asset
e (IoT)
s
Industrial
Park
Project
Phase I
investmen
t financial
incentive
fund for Relat
security ed to
52,475,437.53 1,372,749.96 51,102,687.57
video asset
surveillanc s
e product
production
base
project
Funding of
Hangzhou
for
manufactu Relat
ring ed to
1,567,575.64 7,617,500.00 1,627,755.31 7,557,320.33
enterprise asset
technologi s
cal
transform
ation
Total 103,218,676.13 7,617,500.00 6,173,128.75 104,663,047.38
Other notes:
1. According to the FuJingGuan [2017] No.35 document and the FuCaiQi [2017] No.506 document issued by
Economic Development Zone Management Committee and the Finance Bureau of Fuyang District, Hangzhou, the
subsidiary Zhejiang Dahua Zhilian Co., Ltd. received the special subsidies for the Fuyang Dahua Intelligent (IoT)
288
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Industrial Park in 2015 and 2017, respectively, RMB 31,660,000 each time, totaling RMB 63,320,000. As the
government grant related to assets, it is recognized as deferred income and will be recognized as other income in
installments based on the estimated service life of the asset (20 years).
2. According to the FuJingGuan [2019] No.18 and [2020] No. 39 documents and the FuCaiQi [2019] No.286 document
issued by Fuyang Economic Development Zone Management Committee and the Finance Bureau of Fuyang District,
Hangzhou, in 2019 and 2020, the subsidiary Zhejiang Dahua Zhilian Co., Ltd. received financial incentive funds of
RMB 27,455,000 and RMB 26,050,000, respectively, for the phase I investment of the production base of security
video surveillance products, which was recognized as deferred income as a government subsidy related to assets, and
recognized as other income in installments based on the estimated service life of the asset (20 years).
3. According to the FuJingXinCai [2019] No.49 document and the FuCaiQi [2019] No.804 document issued by
Economic and Information Bureau of Fuyang District, Hangzhou and the Finance Bureau of Fuyang District, Hangzhou,
in 2019, the subsidiary Zhejiang Dahua Zhilian Co., Ltd. received a total of RMB 9,197,700 in 2019 from the first batch
of funds for technical renovation projects of municipal manufacturing enterprises as government subsidies related to
assets, which were recognized as deferred income, and recognized as other income in installments based on the
estimated service life of the assets (15–111 months). According to the HangCaiQi [2022] No.35 document issued by
the Finance Bureau of Hangzhou City and the Economic and Information Bureau of Hangzhou City, the subsidiary
Zhejiang Dahua Zhilian Co., Ltd. received a total of RMB 7,617,500 in 2022 from the funds for technical renovation
projects of municipal manufacturing enterprises as government subsidies related to assets, which were recognized as
deferred income, and recognized as other income in installments based on the estimated service life of the assets (9–
115 months).
38. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
To-be-transferred sales taxes in
169,084,072.08 227,381,981.28
installments
Other loans 35,000,000.00 90,000,000.00
Total 204,084,072.08 317,381,981.28
Other notes:
The Company and CDB Development Fund reached a cooperation intention to increase the capital of the Company's
subsidiary, Zhejiang Dahua Zhilian Co., Ltd. The Capital Increase Agreement stipulates that CDB Development Fund
will not send senior management personnel such as directors and supervisors to Dahua Zhilian; the Company shall
pay an annual investment profit of 1.2% to CDB Development Fund through dividends and repurchase premium. The
Company shall redeem the equity of CDB Development Fund in Dahua Zhilian on a phase-by-phase basis from 2022
to 2024, of which RMB 35,000,000.00 is recognized as other non-current liabilities, and RMB 55,000,000.00 of non-
current liabilities due within 1 year.
39. Share capital
Unit: RMB
Increased or decreased amount in this period (+/-)
Opening Shares Closing
Shares
balance Bonus converted balance
newly Others Subtotal
shares from capital
issued
reserves
289
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
-
2,994,550,7 74,737,700. 38,610,440. 3,033,161,1
Total shares 36,127,260.
30.00 00 00 70.00
00
Other notes:
(1) According to the decision of the 30th Session of the 7th Board of Directors of the Company held on April 22, 2022
and the amended Articles of Association and the solution of the 2021 Annual Shareholders' General Meeting of the
Company, the Company repurchased and canceled 36,127,260 Restricted RMB Ordinary Shares (A Shares) that had
been granted but not been released to 2,889 incentive objects, reduced the registered capital by RMB 36,127,260.00,
and the registered capital after the change was reduced to RMB 2,958,423,470.00. The above capital reduction has
been verified by Verification Report Xin Kuai Shi Bao Zi [2022] No. ZF10892 issued by BDO China Shu Lun Pan CPAs
(special general partnership). The procedures for the industrial and commercial change have been completed on
August 11, 2022.
(2) According to the resolutions of the Company's 2021 Annual General Meeting of Shareholders and the resolutions
of the 27th and 32th sessions of the 7th Board of Directors, the restricted stocks were subscribed by 4,249 restricted
stock incentive objects, with the registered capital increased by RMB 74,737,700.00, and up to RMB 3,033,161,170.00.
The above capital contribution has been verified by Verification Report Xin Kuai Shi Bao Zi [2022] No.ZF10895 issued
by BDO China Shu Lun Pan CPAs (special general partnership). The procedures for the industrial and commercial
change have been completed on November 10, 2022.
40. Capital reserve
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Capital premium
(capital share 1,573,230,760.64 740,232,541.68 331,062,222.73 1,982,401,079.59
premium)
Other capital
1,366,281,475.11 621,811,897.93 20,285,209.38 1,967,808,163.66
reserves
Total 2,939,512,235.75 1,362,044,439.61 351,347,432.11 3,950,209,243.25
Other notes, including increases or decreases in this period and their reasons:
(1) The amount of employee service that the Company received in exchange by equity payments in this period
was RMB 285,817,406.71. Other capital reserve was increased by RMB 153,001,194.59. Share premium was
increased by RMB 132,816,212.12.
(2) In the equity-settled share-based payment in current period, minority shareholders enjoy a portion of RMB
86,864,589.02, which reduces other capital reserves by RMB 20,285,209.38 and share premium by RMB
66,579,379.64.
(3) In this period, the Company repurchased and canceled 36,127,260 shares of the granted but unlocked
restricted shares, reducing the share capital by RMB 36,127,260.00, and reducing the capital reserves (share
premium) by RMB 257,103,026.98.
(4) According to the resolution of 2021 Annual Shareholders' General Meeting and the decisions of the 27th and
32nd sessions of the 7th Board of Directors of the Company, in the end, 74,737,700 restricted stocks were
subscribed by 4,249 restricted stock incentive objects. The actual subscription amount paid by the restricted stock
incentive objects was RMB 609,859,632.00, which was recorded in the capital reserve (share premium) as RMB
535,121,932.00.
290
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(5) The capital reserve (share premium) was reduced by RMB 7,379,816.11 in total in this period due to the
acquisition and disposal of minority interests of the subsidiaries.
(6) The impact of changes in other owners' equity of the joint venter that the Company should enjoy under the
current equity method increased other capital reserves by RMB 509,772,892.62.
(7) Due to the change in shareholding ratio of subsidiaries, the capital reserve (share premium) was adjusted and
increased by RMB 31,332,208.28.
41. Treasury share
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Restricted shares 277,169,524.09 609,859,632.00 277,169,524.09 609,859,632.00
Total 277,169,524.09 609,859,632.00 277,169,524.09 609,859,632.00
Other notes, including increases or decreases in this period and their reasons:
(1) 74,737,700 restricted shares were granted by the Company to the employees, with a grant price of RMB 8.16 per
share. The actual subscription amount paid by the restricted stock incentive objects was RMB 609,859,632.00. The
amount of full recognition of liabilities and treasury shares in respect of repurchase was RMB 609,859,632.00.
(2) In this period, the Company repurchased 36,127,260 shares of the granted but unlocked restricted shares,
reducing the share capital by RMB 36,127,260.00, reducing the capital reserves (share premium) by RMB
257,103,026.98, and reducing the corresponding treasury stock amount by RMB 277,169,524.09 at the same time.
42. Other comprehensive income
Unit: RMB
Amount Occurred in the Current Period
Less:
Less: Recorded
recorded into other
into other comprehe
comprehe nsive
Attributabl
nsive incomes
Opening Less: Attributabl e to the Closing
Item Before tax incomes in
balance Income e to the minority balance
balance in in previous
Tax Company sharehold
this period previous period and
Expense after tax ers after
period and transferre
tax
transferre d to
d to P/L in retained
current earnings
period in current
period
II. Other
comprehe
nsive - - -
76,005,79 36,942,33
income 39,267,17 39,063,45 203,720.8
2.49 9.77
that will be 3.55 2.72 3
reclassifie
d into P/L
Curre 76,005,79 - - - 36,942,33
ncy 2.49 39,267,17 39,063,45 203,720.8 9.77
291
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
conversio 3.55 2.72 3
n
difference
Other
comprehe - - -
76,005,79 36,942,33
nsive 39,267,17 39,063,45 203,720.8
2.49 9.77
incomes 3.55 2.72 3
in total
43. Surplus reserves
Unit: RMB
Increased in the Decreased in the
Item Opening balance Closing balance
current period current period
Statutory surplus
1,553,691,005.92 1,553,691,005.92
reserve
Total 1,553,691,005.92 1,553,691,005.92
44. Undistributed profits
Unit: RMB
Item Current Period Previous Period
Undistributed Profit before
Adjustment at the End of Previous 16,331,012,273.48 13,754,915,904.19
Period
Undistributed Profit after Adjustment
16,331,012,273.48 13,754,915,904.19
at the Start of the Period
Add: net profit attributable to parent
2,324,356,092.20 3,378,410,889.60
company's owner in current period
Less: Payable Dividends on Ordinary
808,528,697.10 802,815,330.12
Shares
Add: Common stock dividends
corresponding to repurchase and 25,815,123.09 500,809.81
cancellation of restricted stocks
Undistributed Profit at the End of the
17,872,654,791.67 16,331,012,273.48
Period
45. Operating revenue and operating cost
(1). Operating revenue and operating cost
Unit: RMB
Amount Occurred in the Current Period Amount Occurred in the Previous Period
Item
Income Cost Income Cost
Main Business 30,161,716,309.37 18,684,304,073.94 32,428,149,656.66 19,774,022,620.74
Other businesses 403,653,703.27 305,493,596.98 407,329,680.19 284,490,537.59
Total 30,565,370,012.64 18,989,797,670.92 32,835,479,336.85 20,058,513,158.33
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2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Whether the lower of audited net profit before or after non-recurring gains and losses is negative
□ Yes No
(2). Information related to operating revenue and operating cost (by product)
Amount Occurred in the Current Period
Item
Income Cost
Smart IoT Products and Solutions 25,187,418,289.20 15,106,909,590.16
Including: Software Business 1,478,048,030.19 457,050,171.52
Innovated Business 4,116,225,405.96 2,759,497,499.20
Others 1,261,726,317.48 1,123,390,581.56
Total 30,565,370,012.64 18,989,797,670.92
(3). Information related to operating revenue and operating cost (by region)
Amount Occurred in the Current Period
Item
Income Cost
Domestic 15,799,558,052.51 10,555,743,715.88
Overseas 14,765,811,960.13 8,434,053,955.04
Total 30,565,370,012.64 18,989,797,670.92
Information about performance of obligations:
The Company fulfills its performance obligations in a timely manner as agreed in the contract and recognizes the
related income when the customer obtains control of the relevant goods, which is mainly divided into fulfilling the
performance obligations at a certain point in time and fulfilling the performance obligations within a certain period of
time.
The Company recognizes income from the sales of goods when control of the goods passes, i.e., when the goods are
delivered to the counterparty's designated location, or to the counterparty's designated carrier, or when they are
delivered to the counterparty for acceptance.
The Company identifies part of the business as a performance obligation to be fulfilled within a certain period of time
according to the nature of the business. The Company shall recognize the income according to the performance
progress within that period of time, except where the performance progress cannot be reasonably recognized. The
Company employs the output method or input method to determine the performance progress. If the performance
progress cannot be reasonably recognized and the costs incurred are expected to be compensated, the income shall
be recognized according to the amount of costs incurred until the performance progress can be reasonably recognized.
46. Taxes and surcharges
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
293
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Urban Maintenance and Construction
85,046,979.25 93,674,700.26
Tax
Education Surcharges 60,753,558.66 66,900,180.70
House property tax 20,430,778.31 5,020,976.54
Land usage tax 1,722,816.00 1,582,249.84
Vehicle and vessel use tax 57,285.50 54,477.12
Stamp duty 17,295,563.62 13,090,002.82
Others 2,390,610.71 2,203,433.08
Total 187,697,592.05 182,526,020.36
47. Sales expenses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Labor cost 3,054,002,350.17 2,713,172,276.64
After-sales service expense 347,770,558.29 393,715,272.90
Transportation and vehicle expenses 38,162,453.78 31,157,041.82
Marketing expense 507,623,672.50 407,591,038.57
Administrative expenses 164,392,490.70 165,583,832.18
Traveling expense 242,619,313.30 216,345,258.74
Business entertainment 205,931,581.17 217,267,974.65
Taxation and insurance expense 212,677,239.07 254,117,501.39
Communication expense 24,856,805.07 20,100,393.11
Knowledge resource fee 74,744,704.72 59,291,228.83
Depreciation cost and asset
158,905,072.75 120,984,253.62
amortization
Others 83,476,918.09 64,647,761.83
Total 5,115,163,159.61 4,663,973,834.28
48. Administrative expenses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Labor cost 737,894,844.39 619,589,132.72
Depreciation cost and asset
133,589,218.51 88,782,890.04
amortization
Administrative expenses 81,062,193.37 67,733,677.55
Consumables and service fees 37,687,414.35 45,566,242.50
Knowledge resource fee 88,112,477.47 74,395,945.23
Transportation and vehicle expenses 3,181,164.59 4,104,418.10
Traveling expense 5,526,857.80 6,734,247.40
Business entertainment 8,796,525.93 8,649,414.88
Others 48,118,127.48 39,459,534.97
Total 1,143,968,823.89 955,015,503.39
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2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
49. R&D expenses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Labor cost 3,436,548,913.49 3,078,589,312.96
Research consumables and service
216,082,660.80 161,469,376.34
fees
Depreciation cost and asset
95,196,552.16 92,045,974.97
amortization
Traveling expense 49,067,671.55 55,748,892.57
Administrative expenses 40,756,648.46 34,893,102.21
Communication expense 25,135,407.16 22,183,895.12
Others 20,217,729.20 7,047,840.00
Total 3,883,005,582.82 3,451,978,394.17
50. Financial expenses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Interest expense 129,841,192.93 96,871,668.06
Including: interest expenses on lease
13,841,181.48 9,736,635.62
liabilities
Less: interest income 197,933,592.28 184,577,399.09
The profit or loss on foreign
-481,747,756.10 306,423,980.11
exchange
Others 38,863,357.47 30,992,691.50
Total -510,976,797.98 249,710,940.58
51. Other incomes
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Sources of other incomes
Period Period
Government subsidies 988,838,317.21 1,028,017,800.27
Total 988,838,317.21 1,028,017,800.27
52. Investment income
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Long-term equity investment income
-399,809,570.81 -269,439,343.85
measured by equity method
Investment income from disposal of
633,376,394.76 14,454,620.04
long-term equity investment
Investment income of transactional
124,950.00
financial assets during holding period
Investment Income from Disposal
-18,304,555.76 37,729,496.43
Trading Financial Assets
295
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Gain on debt restructuring -414,996.80 -56,076.90
After losing control, the remaining
58,339,877.68
equity is re-measured at fair value
Investment income on other non-
current financial assets during the 9,173,028.68 22,409,109.76
holding period
Investment income from national
791,371.25 642,899.15
debt reverse repurchase
Profits from recognition termination of
-2,527,190.80
financial assets
Total 280,749,308.20 -194,259,295.37
53. Income from changes in fair value
Unit: RMB
Source of the income from changes Amount Occurred in the Current Amount Occurred in the Previous
in fair value Period Period
Trading Financial Assets -1,132,045.17 110,231.80
Including: gains from changes at
fair value of derivative financial -1,132,045.17 110,231.80
instruments
Transactional financial liabilities -26,652,319.25
Other Non-current Financial Assets -18,231,213.55 125,268,378.82
Total -46,015,577.97 125,378,610.62
54. Credit impairment loss
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Bad debt losses of other receivables 21,878,004.86 -9,291,983.87
Bad debt losses of accounts
-618,126,859.84 -718,632,868.55
receivable
Bad debt losses of notes receivable -257,089.31 -23,526,885.31
Bad debt losses on receivables
6,441,551.10
financing
Total -596,505,944.29 -745,010,186.63
55. Asset impairment losses
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Loss from Impairment of Inventories
-96,658,687.52 -43,566,062.09
and Impairment of Performance Cost
Impairment Losses on Long-term
-723,496.39
Equity Investment
Impairment losses on contract assets -9,270,865.73 -6,336,213.75
Total -106,653,049.64 -49,902,275.84
296
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
56. Asset disposal income
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Sources of the asset disposal income
Period Period
Income from disposal of fixed assets 1,146,254.67 34,004,512.04
Income from the disposal of right-of-
1,819,534.10 200,165.29
use assets
Total 2,965,788.77 34,204,677.33
57. Non-operating revenue
Unit: RMB
Amount recorded into non-
Amount Occurred in the Amount Occurred in the
Item recurring profit and loss in
Current Period Previous Period
current period
Government subsidies 2,100,000.00 111,808.80 2,100,000.00
Gains and losses of non-
1,648,667.29 1,661,717.35 1,648,667.29
current asset retirement
Others 14,172,637.30 10,269,649.13 14,172,637.30
Total 17,921,304.59 12,043,175.28 17,921,304.59
Government subsidies recorded into current period P/L:
Unit: RMB
Subsidies
Influence
Previous
Profit and Related to
Special This period's period's
Subsidy Distributin Distributin Types of Loss in assets/rel
Subsidy amount of amount of
items g Entity g Reason Nature the ated to
or not occurrence occurrenc
Current income
e
Year or
not
Subsidies
are
received
for
undertakin
g state
functions
Retention
to protect
allowance Other
certain
for overseas 111,808.8 Related to
Subsidy public Yes No
overseas governme 0 income
utilities,
employee nts
secure
s
socially
necessary
products'
supply, or
perform
price
control
297
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
function
Subsidies
received
due to
engageme
nt in
specific
2021 industries
Economic
"Straight and trades
and
Through encourage
Informatio
Wuzhen" d and Related to
n Bureau Reward Yes No 100,000.00
Global supported income
of
Internet by the
Tongxiang
Competiti State
City
on (obtained
by
national
policies
and
regulation
s)
Subsidies
obtained
Hangzhou
due to
High-tech
local
Industry
Subsidy support
Developm
funding for policies
ent Zone 2,000,000.0 Related to
Phoenix Subsidy such as Yes No
(Binjiang) 0 income
Action investmen
Developm
Plan t
ent and
promotion
Reform
by local
Bureau
governme
nts
58. Non-operating expenditures
Unit: RMB
Amount recorded into non-
Amount Occurred in the Amount Occurred in the
Item recurring profit and loss in
Current Period Previous Period
current period
Donations 1,796,127.69 6,150,317.17 1,796,127.69
Gains and losses of non-
2,030,871.71 2,765,871.80 2,030,871.71
current asset retirement
Water conservancy fund 167,592.46 135,169.92
Others 6,841,475.06 5,521,352.18 6,841,475.06
Total 10,836,066.92 14,572,711.07 10,668,474.46
59. Income tax expense
(1) Income tax expense statement
Unit: RMB
Item Amount Occurred in the Current Amount Occurred in the Previous
298
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Period Period
Current income tax expense 155,717,141.34 196,811,813.43
Deferred income tax expense -130,389,333.38 -138,697,105.68
Total 25,327,807.96 58,114,707.75
(2) Adjustment process of accounting profit and income tax expenses
Unit: RMB
Item Amount Occurred in the Current Period
Total Profit 2,287,178,061.28
Income tax expense calculated at statutory/applicable tax
343,076,709.19
rate
Impact by applying different tax rates to subsidiaries 57,747,079.08
Impact of income tax before adjustment in this period -74,883,294.81
Impact of the non-deductible costs, expenses and losses 43,993,920.71
Impact of additional deduction of the research and
-470,138,655.13
development expenses
Others 125,532,048.92
Income tax expense 25,327,807.96
60. Other Comprehensive Incomes
See Note 42 for details.
61. Items of Cash Flow Statement
(1) Other cash receipts relating to operating activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Interest Income 115,853,521.82 73,826,022.93
Government subsidies 991,467,035.95 1,020,878,478.91
Tender and performance guarantee
34,276,474.54 83,062,969.71
deposit
Incomings and outgoings and
96,874,605.04 41,473,476.57
advanced payments
Others 13,304,303.72 2,406,041.65
Total 1,251,775,941.07 1,221,646,989.77
(2) Other cash payments relating to operating activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Administrative expenses 355,623,778.96 257,623,098.08
Communication expense 59,345,879.58 59,747,229.64
Business entertainment 216,201,652.45 230,187,196.11
299
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Traveling expense 296,659,094.56 278,738,761.16
Marketing expense 391,397,115.26 267,267,001.71
Transportation and vehicle expenses 44,409,896.02 31,157,041.82
Knowledge resource fee 133,575,452.95 131,977,078.95
Research and development
consumption and external inspection 100,723,946.02 101,460,485.44
fee
Taxation and insurance expense 77,631,185.38 254,884,579.54
Tender and performance guarantee
86,652,672.09 60,618,062.18
deposit
Incomings and outgoings and
131,684,066.18 115,025,798.09
advanced payments
Consumables and service fees 248,782,048.70 202,657,426.37
Others 29,828,698.09 68,384,593.74
Total 2,172,515,486.24 2,059,728,352.83
(3) Other cash receipts relating to investing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Receipts of cash from forward
25,697,487.60 49,758,199.26
exchange contracts
Total 25,697,487.60 49,758,199.26
(4) Other cash payments related to investing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Cash paid for forward exchange
44,002,044.90 20,521,853.51
contracts
Paid frozen funds relating to the
13,993,944.08
investment
Total 57,995,988.98 20,521,853.51
(5) Other cash receipts related to financing activities
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Receipts of loans from non-financial
54,524,867.57
institutions
Withdrawn loan deposit etc. 453,263.81
Total 453,263.81 54,524,867.57
(6) Other cash payments related to financing activities
Unit: RMB
Item Amount Occurred in the Current Amount Occurred in the Previous
300
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Period Period
Leasing fees paid 130,670,138.16 112,180,597.35
Listing fees paid 3,695,037.14 4,530,800.00
Loan deposit and others paid 453,263.81
Cashes for purchasing minority
82,140,000.00
equity
Equity repurchase cash paid 284,463,142.68
Total 500,968,317.98 117,164,661.16
62. Supplementary Information on Cash Flow Statement
(1) Supplementary information about the Cash Flow Statement
Unit: RMB
Supplementary information Amount of this period Amount of Previous Period
1． Reconciliation of net profit to
cash flows from operational activities
Net Profit 2,261,850,253.32 3,411,546,572.58
Add: provision for impairment of
703,158,993.93 794,912,462.47
assets
Depreciation of fixed assets,
oil and gas assets, productive 503,479,252.70 318,313,654.19
biological assets
Depreciation of Right-of-use
132,164,519.81 100,221,147.86
Assets
Amortization of Intangible
46,736,670.60 46,059,748.23
Assets
Amortization of long-term
39,510,946.43 28,361,393.05
deferred expenses
Losses on disposal of fixed
assets, intangible assets and other
-2,965,788.77 -34,204,677.33
long-term assets (mark "-" for
incomes)
Losses on scrapping of fixed
382,204.42 1,104,154.45
assets (mark "-" for incomes)
Losses on fair value changes
46,015,577.97 -125,378,610.62
(mark "-" for incomes)
Financial expenses (mark "-"
-367,030,819.99 403,295,648.17
for incomes)
Losses on investment (mark "-
-283,691,495.80 194,259,295.37
" for incomes)
Decrease on deferred income
-74,076,700.95 -133,202,841.66
tax assets (mark "-" for increases)
Increase on deferred income
-60,610,031.11 -5,494,264.02
tax liabilities (mark "-" for decreases)
Decrease on inventories (mark
-1,007,449,606.32 -1,927,516,518.82
"-" for increases)
Decrease on operational
-512,792,543.01 -2,547,374,670.44
receivables (mark "-" for increases)
Increase on operational -656,911,190.48 1,189,944,162.66
301
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
payables (mark "-" for decreases)
Others 285,817,406.71 12,714,091.87
Net cash flow generated by
1,053,587,649.46 1,727,560,748.01
operating activities
2． Major investing and financing
activities that do not involve cash
receipts and payment
Conversion of Debt into Capital
Convertible corporate bond within
1 year
Fixed Assets under Finance Lease
3． Net changes in cash and cash
equivalents:
Closing balance of cash 7,878,465,052.63 7,617,576,852.32
Less: opening balance of cash 7,617,576,852.32 7,358,452,769.53
Add: closing balance of cash
equivalents
Less: opening balance of cash
equivalents
Net Increase in Cash and Cash
260,888,200.31 259,124,082.79
Equivalents
(2) Net cash receipts from disposal of subsidiaries in this period
Unit: RMB
Amount
Cash or cash equivalents used for disposal of
592,909,263.02
subsidiaries which was received in this period
Including:
Zhejiang Huachuang Vision Technology Co., Ltd. 153,700,000.00
Sichuan Dahua Guangxun Photoelectric Technology Co.,
1,080,000.00
Ltd.
Lorex corporation, Lorex Technology UK Limited and
438,129,263.02
Lorex Technology Inc.
Less: Cash and cash equivalents held by subsidiary on
155,476,069.16
date when the control is lost
Including:
Zhejiang Huachuang Vision Technology Co., Ltd. 107,660,418.63
Sichuan Dahua Guangxun Photoelectric Technology Co.,
1,937.97
Ltd.
Lorex corporation, Lorex Technology UK Limited and
47,813,712.56
Lorex Technology Inc.
Plus: cash or cash equivalents received in the current
period from the disposal of subsidiaries in previous 228,000,000.00
periods
Including:
Zhejiang Huatu Microchip Technology Co., Ltd. 228,000,000.00
Net cash arising from disposal of subsidiaries 665,433,193.86
302
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(3) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 7,878,465,052.63 7,617,576,852.32
Including: cash on hand 2,535.81 23,443.62
Bank deposit for payment at
7,746,722,778.16 7,305,614,048.36
any time
Other cash and bank balances
131,739,738.66 311,939,360.34
for payment at any time
II. Balance of Cash and Cash
7,878,465,052.63 7,617,576,852.32
Equivalents at the End of the Period
63. Assets whose Ownership or Rights to Use is Restricted
Unit: RMB
Item Book value at the end of the period Cause of restrictions
Guarantee letter security deposit and
Cash and Bank Balances 130,637,542.35
other restricted funds
Supply chain finance not
Accounts receivable 7,912,141.60
derecognized
Pledge used to issue bank
Notes receivable and receivables
1,156,827,692.59 acceptance bills and endorsed or
financing
discounted notes not derecognized
Long-term Receivables 120,632,081.66 Pledge for bank borrowings
Non-current Assets Due within 1 Year 27,786,159.55 Pledge for bank borrowings
Total 1,443,795,617.75
64. Monetary Items in Foreign Currencies
(1) Monetary items in foreign currencies
Unit: RMB
Closing balance in foreign Exchange rate for Closing Balance Converted
Item
currencies conversion into RMB
Cash and Bank Balances
Including: USD 145,707,305.87 6.9646 1,014,793,102.46
EUR 22,672,341.95 7.4229 168,294,527.06
HKD 22,294,712.70 0.8933 19,915,198.01
INR 1,133,915,442.51 0.0841 95,392,603.80
BRL 39,568,481.33 1.3174 52,128,751.55
ZAR 118,655,362.24 0.4113 48,805,265.81
Total amount of other
208,784,074.91
currencies
Accounts receivable
Including: USD 598,981,193.66 6.9646 4,171,664,421.39
EUR 106,913,348.87 7.4229 793,607,097.34
HKD 613,835.25 0.8933 548,320.61
INR 5,431,100,562.08 0.0841 456,900,757.06
303
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
AUD 40,498,530.21 4.7138 190,901,971.70
PLN 106,810,983.69 1.5878 169,595,083.66
Total amount of other
523,324,029.85
currencies
Long-term loan
Including: USD
EUR
HKD
Accounts Payable
Including: USD 253,423,852.82 6.9646 1,764,995,765.35
INR 3,759,787,012.51 0.0841 316,298,605.18
EUR 673,677.58 7.4229 5,000,641.31
AED 2,016,245.49 1.8966 3,824,006.16
MXN 10,119,717.11 0.3577 3,619,614.10
BRL 2,613,578.18 1.3174 3,443,209.42
Total amount of other
10,502,026.90
currencies
(2) Notes on overseas business entities, including that for the important overseas business
entities, the overseas main premises, functional currency and selection basis shall be
disclosed. If there are changes on its functional currency, the causes for the changes shall be
disclosed as well.
Applicable □ Not applicable
Since the overseas business entity of the Company, Dahua Technology (HK) Limited, does not have autonomy over
its business activities, which are the extension of the business activities of the Company, constituting the business
activities of the Company, RMB shall be used as its functional currency.
65. Government subsidies
(1) Basic information about government subsidies
Unit: RMB
Amount taken to current
Types Amount Items reported
P&L
VAT refund 745,052,878.61 Other Incomes 745,052,878.61
Financial subsidy for
science and technology 95,577,000.00 Other Incomes 95,577,000.00
R&D plan projects
Leading policy R&D
46,981,400.00 Other Incomes 46,981,400.00
funding
Special financial award
22,081,493.98 Other Incomes 22,081,493.98
funds
Core Electronics, High-End
General-Purpose Chips
12,293,400.00 Other Incomes 12,293,400.00
and Basic Software
Products special fund
Subsidies for stable
10,637,322.58 Other Incomes 10,637,322.58
positions
Patent subsidies 7,294,600.00 Other Incomes 7,294,600.00
Tax refund 7,292,218.35 Other Incomes 7,292,218.35
Special funds for foreign 5,869,017.00 Other Incomes 5,869,017.00
304
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
trade and economic
development
Export credit insurance
5,031,812.33 Other Incomes 5,031,812.33
premium subsidies
Post-doctoral research
4,880,000.00 Other Incomes 4,880,000.00
funding
Intellectual property
3,886,400.00 Other Incomes 3,886,400.00
incentive funds
Subsidy funding for R&D
expenses of high-tech 3,825,000.00 Other Incomes 3,825,000.00
businesses
Special awards for Fuyang
Deferred income/other
Dahua Intelligence (IoT) 63,320,000.00 3,172,623.48
incomes
Industrial Park
Enterprise's Reward for
2,252,386.99 Other Incomes 2,252,386.99
Attracting Talent
Reward for Manufacturing
2,150,000.00 Other Incomes 2,150,000.00
Enterprises
Subsidy funding for
2,000,000.00 Non-operating Revenue 2,000,000.00
Phoenix Action Plan
Funding of Hangzhou for
manufacturing enterprise Deferred income/other
16,815,200.00 1,627,755.31
technological incomes
transformation
Provincial government
quality award incentive 1,500,000.00 Other Incomes 1,500,000.00
funds
Phase I investment
financial incentive fund for
Deferred income/other
security video surveillance 53,505,000.00 1,372,749.96
incomes
product production base
project
High-tech enterprise
1,000,000.00 Other Incomes 1,000,000.00
subsidies
National Industrial Design
1,000,000.00 Other Incomes 1,000,000.00
Center Project
VAT deduction 883,220.53 Other Incomes 883,220.53
Subsidies for enterprise
460,095.11 Other Incomes 460,095.11
practical training
2021 "Straight Through
Wuzhen" Global Internet 100,000.00 Non-operating Revenue 100,000.00
Competition
Rent subsidy 79,700.00 Other Incomes 79,700.00
VAT exemption 32,431.98 Other Incomes 32,431.98
Others 2,604,811.00 Other Incomes 2,604,811.00
(2) Return of government subsidies
□ Applicable Not applicable
305
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
VIII. Changes in the Scope of Consolidation
1. No business consolidation under non-common control during this period
2. No business consolidation under common control during this period
3. Disposal of subsidiaries
Is there any situation where disposal of investment in subsidiaries in a single transaction causes loss of control
Yes □ No
Unit: RMB
At the
level
of
consol
idated The
financi amou
al nt of
The
state other
deter
ments compr
minati
corres ehens
on
pondi ive
metho
ng to incom
Gains d and
the Perce Book Fair es
Basis or main
dispos ntage value value relate
for losses assu
al of of of d to
deter from mptio
Time- price remai remai remai the
Name Metho minin re- ns of
Equity Equity point and ning ning ning equity
of ds of g the meas the
dispos dispos of loss the equity equity equity invest
Subsi equity time- ureme fair
al al of dispos on the on the on the ment
diarie dispos point nt of value
price ratio contro al of date date date of the
s al of loss remai of
l invest of loss of loss of loss origin
of ning remai
ment, of of of al
contro equity ning
the contro contro contro subsid
l at fair equity
differe l l l iary
value on the
nce in transf
date
the erred
of loss
net into
of
asset invest
contro
share ment
l
of the profits
subsid and
iary losses
shall
be
gaine
d
Sichu Signe
Equity
an d
transf
Dahu 1,080, Equity March Equity 1,267, -
90.00 10.00 120,0 140,8 er
a 000.0 transf 29, Transf 350.5 20,81 0.00
% % 00.00 16.73 agree
Guan 0 er 2022 er 5 6.73
ment
gxun Agree
price
Photo ment
306
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
electri and
c compl
Techn eted
ology the
Co., delive
Ltd. ry of
proper
ty
rights
Signe
d
Equity
Transf
Zhejia
er
ng
Agree Equity
Huach
Nove ment transf
uang 153,7 Equity 80,22 53,28 111,48 58,19
29.56 mber and 21.44 er
Vision 00,00 transf 8,869. 8,939. 8,000. 9,060. 0.00
% 3, compl % agree
Techn 0.00 er 55 05 00 95
2022 eted ment
ology
the price
Co.,
delive
Ltd.
ry of
proper
ty
rights
Signe
d
Lorex
Equity
Corpo
Transf
ration,
er
Lorex
Agree
Techn
Dece ment
ology 482,0 Equity 536,8
100.0 mber and
UK 39,71 transf 06,46
0% 27, compl
Limite 7.69 er 3.49
2022 eted
d and
the
Lorex
delive
Techn
ry of
ology
proper
Inc
ty
rights
Is there any situation where disposal of investment in subsidiaries is achieved through multiple transactions in various
stages, causing loss of control in this period
□ Yes No
4. Changes in the Scope of Consolidation for Other Reasons
Explanations on the changes in the scope of consolidation caused by other reasons (for example, newly established
subsidiaries, subsidiaries clearing, etc.) and relevant information:
The Company invested to establish 10 domestic subsidiaries in this period, including Zhejiang Pixfra Technology Co.,
Ltd., Yiwu Huaxi Technology Co., Ltd., Zhejiang Dahua Intelligent IOT Operation Service Co., Ltd., Nanyang Dahua
Intelligent Information Technology Co., Ltd., Yibin Huahui Information Technology Co., Ltd., Chengdu Huazhiwei
Technology Co., Ltd., Xi'an IMOU Zhilian Technology Co., Ltd., Luoyang Dahua Zhiyu Information Technology Co.,
307
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Ltd., Zhejiang Huaqi Intelligent Technology Co., Ltd. and Chengdu Dahua Intelligent Information Technology Co., Ltd.
and 5 overseas subsidiaries, including Dahua Technology Middle East for Maintenance Single Person Company,
Dahua Technology Bangladesh Private Limited, IMOU NETWORK TECHNOLOGY AUSTRALIA PTY LTD, CNG TY
TNHH CNG NGH IMOU NETWORK VIT NAM and HUARAY TECHNOLOGY SINGAPORE PTE. LTD. The above
subsidiaries have been incorporated into the scope of consolidation since the date of establishment.
IX. Equity in Other Entities
1. Equity in Subsidiaries
(1) Composition of the enterprise group
Name of Main Place of Registered Business Shareholding Percentage Acquisition
Subsidiaries Business Address Nature Direct Indirect Method
Dahua Binjiang Binjiang Electronics
System District, District, and 100.00% Establishment
Engineering Hangzhou Hangzhou information
Binjiang Binjiang Electronics
Dahua Vision
District, District, and 100.00% Establishment
Technology
Hangzhou Hangzhou information
Dahua Binjiang Binjiang Electronics
Security District, District, and 100.00% Establishment
Network Hangzhou Hangzhou information
Binjiang Binjiang Electronics
Dahua Ju'an District, District, and 51.00% Establishment
Hangzhou Hangzhou information
Guangxi Electronics
Youjiang Youjiang
Dahua and 100.00% Establishment
District, Baise District, Baise
Information information
Qingxiu Qingxiu
Guangxi
District, District, Service 100.00% Establishment
Security
Nanning Nanning
Binjiang Binjiang Electronics
Hangzhou 45.00%
District, District, and Establishment
Xiaohua (Note 1)
Hangzhou Hangzhou information
Fuyang Fuyang Electronics
90.09%
Dahua Zhilian District, District, and Establishment
(Note 2)
Hangzhou Hangzhou information
Dahua Fuyang Fuyang Investment &
investment District, District, investment 75.00% Establishment
management Hangzhou Hangzhou management
Electronics
Guangxi Youjiang Youjiang
and 65.00% Establishment
Zhicheng District, Baise District, Baise
information
Binjiang Binjiang Electronics
Hangzhou
District, District, and 51.00% Establishment
Huacheng
Hangzhou Hangzhou information
Electronics
Xinjiang Shihezi, Shihezi,
and 92.00% Establishment
Information Xinjiang Xinjiang
information
Binjiang Binjiang Sci-tech
HuaRay 42.23%
District, District, popularization Establishment
Technology (Note 3)
Hangzhou Hangzhou and
308
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
application
services
industry
Fuyang Fuyang Electronics
Fuyang
District, District, and 51.00% Establishment
Hua'ao
Hangzhou Hangzhou information
Binjiang Binjiang Electronics
Huafei 45.50%
District, District, and Establishment
Intelligent (Note 4)
Hangzhou Hangzhou information
Guanshanhu Guanshanhu Electronics
Guizhou
District, District, and 100.00% Establishment
Huayi
Guiyang Guiyang information
Qira County, Qira County, Electronics
Xinjiang Zhihe Hotan, Hotan, and 97.00% Establishment
Xinjiang Xinjiang information
Electronics
Guangxi Wuzhou, Wuzhou,
and 90.00% Establishment
Huacheng Guangxi Guangxi
information
Electronics
Meitan Dahua Zunyi, Zunyi,
and 100.00% Establishment
Technology Guizhou Guizhou
information
New District, New District,
Inner Bai County, Bai County, Electronics
Mongolia Chahar Right Chahar Right and 95.00% Establishment
Zhimeng Wing Back Wing Back information
Banner Banner
Hetian Hetian
Electronics
Xinjiang County, County,
and 97.00% Establishment
Zhitian Hetian, Hetian,
information
Xinjiang Xinjiang
Shache Shache
County, County, Electronics
Xinjiang
Kashgar Kashgar and 100.00% Establishment
Xinzhi
District, District, information
Xinjiang Xinjiang
Electronics
Xinjiang Kashgar, Kashgar,
and 100.00% Establishment
Huayue Xinjiang Xinjiang
information
Electronics
Tianjin Binhai Tianjin Binhai
Tianjin Dahua and 100.00% Establishment
New Area New Area
information
Shuangpai Shuangpai Electronics
Dahua
County, County, and 90.00% Establishment
Zhilong
Yongzhou City Yongzhou City information
Fuyang Fuyang
District, District, Electronics
Vision
Hangzhou Hangzhou and 100.00% Establishment
Technology
City, Zhejiang City, Zhejiang information
Province Province
Fuyang Fuyang
District, District, Electronics
Huaxiao
Hangzhou Hangzhou and 51.00% Establishment
Technology
City, Zhejiang City, Zhejiang information
Province Province
Xi'an City, Xi'an City, Electronics
Xi'an Dahua Shaanxi Shaanxi and 100.00% Establishment
Province Province information
309
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Wuxi City, Wuxi City, Electronics
Huaruipin Jiangsu Jiangsu and 51.00% Establishment
Province Province information
Xicheng Xicheng Electronics
Beijing
District, District, and 100.00% Establishment
Huayue
Beijing Beijing information
Electronics
Shanghai Putuo District, Putuo District,
and 100.00% Establishment
Huashang Shanghai Shanghai
information
Wucheng Wucheng
District, District, Electronics
Dahua Jinzhi Jinhua City, Jinhua City, and 100.00% Establishment
Zhejiang Zhejiang information
Province Province
Zhoushan Zhoushan Electronics
Zhoushan
City, Zhejiang City, Zhejiang and 58.80% Establishment
Operation
Province Province information
Lijiang City, Lijiang City, Electronics
Yunnan Zhili Yunnan Yunnan and 90.00% Establishment
Province Province information
Liuzhou City, Liuzhou City,
Guangxi Guangxi Guangxi Electronics
Dahua Zhuang Zhuang and 100.00% Establishment
Technology Autonomous Autonomous information
Region Region
Binjiang Binjiang Electronics
Huayixin District, District, and 51.00% Establishment
Hangzhou Hangzhou information
Binjiang Binjiang Electronics
Huaruijie District, District, and 51.00% Establishment
Hangzhou Hangzhou information
Longquanyi Longquanyi Electronics
Chengdu
District, District, and 100.00% Establishment
Zhilian
Chengdu Chengdu information
Longquanyi Longquanyi Electronics
Chengdu
District, District, and 100.00% Establishment
Zhian
Chengdu Chengdu information
Longquanyi Longquanyi Electronics
Chengdu
District, District, and 100.00% Establishment
Zhishu
Chengdu Chengdu information
Longquanyi Longquanyi Electronics
Chengdu
District, District, and 100.00% Establishment
Zhichuang
Chengdu Chengdu information
Chengdu Electronics
Dayi County, Dayi County,
Smart and 90.00% Establishment
Chengdu Chengdu
Network information
Electronics
Huakong Wuyi County, Wuyi County,
and 100.00% Establishment
Software Jinhua City Jinhua City
information
Binjiang Binjiang Electronics
Huacheng
District, District, and 100.00% Establishment
Software
Hangzhou Hangzhou information
Nanming Nanming Electronics
Guizhou
District, District, and 100.00% Establishment
Dahua
Guiyang Guiyang information
Zhengzhou, Zhengzhou, Electronics
Henan Dahua 100.00% Establishment
Henan Henan and
310
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
information
Binjiang Binjiang Electronics
45.00%
Huajian District, District, and Establishment
(Note 5)
Hangzhou Hangzhou information
Electronics
Zhengzhou Zhengzhou, Zhengzhou,
and 100.00% Establishment
Dahua Zhian Henan Henan
information
Electronics
Dahua
Singapore Singapore and 100.00% Establishment
International
information
Electronics
Anhui Zhilian Hefei, Anhui Hefei, Anhui and 100.00% Establishment
information
Electronics
Anhui Zhishu Hefei, Anhui Hefei, Anhui and 100.00% Establishment
information
Electronics
Wuhu Huajian Wuhu, Anhui Wuhu, Anhui and 100.00% Establishment
information
Electronics
Changsha Changsha, Changsha,
and 100.00% Establishment
Dahua Hunan Hunan
information
Electronics
Tianjin Hexi District, Hexi District,
and 100.00% Establishment
Huajian Tianjin Tianjin
information
Xiaoshan Xiaoshan Electronics
Zhejiang
District, District, and 51.00% Establishment
Pixfra
Hangzhou Hangzhou information
Yiwu City, Yiwu City, Electronics
Yiwu Huaxi Zhejiang Zhejiang and 100.00% Establishment
Province Province information
Xiaoshan Xiaoshan Electronics
Dahua
District, District, and 100.00% Establishment
Operation
Hangzhou Hangzhou information
Nanyang City, Nanyang City, Electronics
Nanyang
Henan Henan and 100.00% Establishment
Intelligent
Province Province information
Yibin City, Yibin City, Electronics
Yibin Huahui Sichuan Sichuan and 100.00% Establishment
Province Province information
Chengdu City, Chengdu City, Electronics
Chengdu
Sichuan Sichuan and 100.00% Establishment
Huazhiwei
Province Province information
Xi'an City, Xi'an City, Electronics
IMOU Xi'an Shaanxi Shaanxi and 100.00% Establishment
Province Province information
Luoyang City, Luoyang City, Electronics
Luoyang
Henan Henan and 100.00% Establishment
Zhiyu
Province Province information
Binjiang Binjiang Electronics
Huaqi
District, District, and 100.00% Establishment
Intelligence
Hangzhou Hangzhou information
Chongzhou Chongzhou Electronics
Chengdu
City, Chengdu City, Chengdu and 100.00% Establishment
Information
City City information
Dahua Hong Electronics
Hong Kong Hong Kong 100.00% Establishment
Kong and
311
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
information
Electronics
Dahua USA USA USA and 100.00% Establishment
information
Electronics
Dahua Europe Netherlands Netherlands and 100.00% Establishment
information
Electronics
Dahua Middle United Arab United Arab
and 100.00% Establishment
East Emirates Emirates
information
Electronics
Dahua Mexico Mexico Mexico and 100.00% Establishment
information
Electronics
Dahua Chile Chile Chile and 100.00% Establishment
information
Electronics
Dahua
Columbia Columbia and 100.00% Establishment
Colombia
information
Electronics
Dahua
Australia Australia and 100.00% Establishment
Australia
information
Electronics
Dahua
Singapore Singapore and 100.00% Establishment
Singapore
information
Electronics
Dahua South
South Africa South Africa and 100.00% Establishment
Africa
information
Electronics
Dahua Peru Peru Peru and 100.00% Establishment
information
Electronics
Dahua Brazil Brazil Brazil and 100.00% Establishment
information
Electronics
Dahua Russia Russia Russia and 100.00% Establishment
information
Electronics
Dahua
Canada Canada and 100.00% Establishment
Canada
information
Electronics
Dahua
Panama Panama and 100.00% Establishment
Panama
information
Electronics
Dahua
Hungary Hungary and 100.00% Establishment
Hungary
information
Electronics
Dahua Poland Poland Poland and 100.00% Establishment
information
Electronics
Dahua Tunisia Tunisia Tunisia and 100.00% Establishment
information
Electronics
Dahua Kenya Kenya Kenya and 100.00% Establishment
information
Electronics
Dahua UK UK UK 100.00% Establishment
and
312
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
information
Electronics
Dahua
Bulgaria Bulgaria and 100.00% Establishment
Bulgaria
information
Electronics
Dahua Serbia Serbia Serbia and 100.00% Establishment
information
Electronics
Dahua
Germany Germany and 100.00% Establishment
Germany
information
Electronics
Dahua
Malaysia Malaysia and 100.00% Establishment
Malaysia
information
Electronics
Dahua Korea South Korea South Korea and 100.00% Establishment
information
Electronics
Dahua
Indonesia Indonesia and 67.00% Establishment
Indonesia
information
Electronics
Dahua India India India and 100.00% Establishment
information
Electronics
Dahua Turkey Turkey Turkey and 100.00% Establishment
information
Electronics
Czech Czech
Dahua Czech and 100.00% Establishment
Republic Republic
information
Electronics
Dahua
Argentina Argentina and 100.00% Establishment
Argentina
information
Electronics
Dahua Spain Spain Spain and 100.00% Establishment
information
Electronics
Dahua
Kazakhstan Kazakhstan and 100.00% Establishment
Kazakhstan
information
Electronics
Dahua
Denmark Denmark and 100.00% Establishment
Denmark
information
Electronics
Dahua France France France and 100.00% Establishment
information
Dahua Electronics
Technology Hong Kong Hong Kong and 100.00% Establishment
Holdings information
Electronics
Dahua
Morocco Morocco and 100.00% Establishment
Morocco
information
Business
Dahua Electronics combination
Technology Italy Italy and 100.00% not under
Italy information common
control
Electronics
Dahua
Uzbekistan Uzbekistan and 100.00% Establishment
Uzbekistan
information
313
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Electronics
Dahua
Netherlands Netherlands and 100.00% Establishment
Netherlands
information
Electronics
Dahua Sri
Sri Lanka Sri Lanka and 100.00% Establishment
Lanka
information
Electronics
Dahua
Pakistan Pakistan and 100.00% Establishment
Pakistan
information
Electronics
Dahua New
New Zealand New Zealand and 100.00% Establishment
Zealand
information
Electronics
Dahua
Thailand Thailand and 99.98% Establishment
Thailand
information
Electronics
Dahua
Romania Romania and 100.00% Establishment
Romania
information
Electronics
Dahua Nigeria Nigeria Nigeria and 100.00% Establishment
information
Electronics
Dahua Israel Israel Israel and 100.00% Establishment
information
Electronics
Dahua Mexico
Mexico Mexico and 100.00% Establishment
Service
information
Electronics
Huacheng
Netherlands Netherlands and 100.00% Establishment
Netherlands
information
Electronics
Dahua Japan Japan Japan and 100.00% Establishment
information
Electronics
Dahua Qatar Qatar Qatar and 100.00% Establishment
information
Electronics
Huacheng
Hong Kong Hong Kong and 100.00% Establishment
Hong Kong
information
Electronics
Dahua Pacific Panama Panama and 100.00% Establishment
information
Electronics
Dahua Saudi
Saudi Arabia Saudi Arabia and 100.00% Establishment
Arabia
information
Electronics
Dahua Bengal Bangladesh Bangladesh and 100.00% Establishment
information
Electronics
IMOU
Australia Australia and 100.00% Establishment
Australia
information
Electronics
IMOU
Vietnam Vietnam and 100.00% Establishment
Vietnam
information
Electronics
HuaRay
Singapore Singapore and 100.00% Establishment
Singapore
information
314
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Explanations on the fact that the proportion of the shares held by a subsidiary differs from that of voting rights:
(1) The Company directly holds 45% equity in Hangzhou Xiaohua Technology Co., Ltd., and as agreed upon, Zhejiang
Huashi Investment Management Co., Ltd. grants its voting rights of 12% to the Company. The Company effectively
holds 57% of the voting rights in Hangzhou Xiaohua Technology Co., Ltd., which constitutes working control so as to
incorporate it into the scope of consolidation.
(2) Based on the industrial and commercial registration data, the CDB Development Fund holds equity in the Company.
According to the cooperation agreement between the Company and CDB Development Fund, CDB Development
Fund shall not appoint senior management personnel, such as directors and supervisors, to Dahua Zhilian; regarding
its investment, the Company shall pay an annual investment profit of 1.2% to CDB Development Fund through
dividends, repurchase premiums, etc. In addition, the Company shall redeem the CDB Development Fund's equity in
Dahua Zhilian period by period from 2022 to 2024, using its amount of investment as other non-current liabilities, and
reclassifying those due within one year to "non-current liabilities due within one year". The Company effectively holds
100% voting rights and equity in Dahua Zhilian.
(3) On December 23, 2022, Zhejiang HuaRay Technology Co., Ltd. implemented equity incentives for its management
and core employees through capital increase and share expansion, with the registered capital increased by RMB
4,830,918. After these equity incentives were completed, the shareholding ratio of the Company in HuaRay
Technology was changed from 45.90% to 42.23%. After the dilution of equity, the Company is still the largest
shareholder of HuaRay Technology. The remaining shareholders have a relatively low and dispersed shareholding
ratio, and HuaRay Technology is still a controlling subsidiary of the Company covered by the Company’s consolidated
statements.
(4) The Company directly holds 45.50% equity in Zhejiang Huafei Intelligent Technology Co., Ltd. and as agreed upon,
Ningbo Hualing Venture Capital Investment Partnership (Limited Partnership) grants 16% of its voting rights to the
Company. The Company effectively holds 61.50% of the voting rights in Zhejiang Huafei Intelligence Technology Co.,
Ltd., which constitutes working control so as to incorporate it into the scope of consolidation.
(5) The Company directly holds 45% equity in Zhejiang Huajian Technology Co., Ltd., and as agreed upon, Ningbo
Hualing Venture Capital Investment Partnership (Limited Partnership) grants 40% of its voting rights to the Company.
The Company effectively holds 85% of the voting rights in Zhejiang Huajian Technology Co., Ltd., which constitutes
working control so as to incorporate it into the scope of consolidation.
2. The transactions that lead to changes in the shareholder's equity in the subsidiaries while
still has working control over the subsidiary
(1) Explanation of the changes in the shareholder's equity in the subsidiaries
1) In December 2022, the registered capital of HuaRay Technology increased from RMB 55,555,556 to RMB
60,386,474. Due to the Company's abandonment of the same proportion of capital increase right and preemptive right
of HuaRay Technology, the Company's original 45.90% equity holding in HuaRay Technology was diluted to 42.23%.
After the dilution of equity, the Company is still the largest shareholder of HuaRay Technology. The remaining
shareholders have a low and dispersed shareholding ratio, and HuaRay Technology is still a subsidiary of the
Company, and is incorporated into the scope of consolidation.
2) In January, 2022, the Company acquired 49.00% of the equity of Zhejiang Dahua Security Network Operation
Service Co., Ltd. (hereinafter referred to as the "Operation Company") held by Ningbo Huayu Investment Management
Partnership Enterprise (Limited Partnership) with a consideration of RMB 74,940,000. After the acquisition of equity,
the 51.00% equity that the Company held in Operation Company was increased to 100.00%, and Operation Company
became a wholly-owned subsidiary of the Company.
315
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
3) In January 2022, the registered capital of Guizhou Huayi Shixin Technology Co., Ltd. (hereinafter referred to as
“Guizhou Huayi”) was decreased from RMB 50,000,000 to RMB 22,500,000 and the original 45.00% equity of the
Company in Guizhou Huayi was not decreased by the Company in this capital decrease. After the decrease of capital,
the equity of the Company in Guizhou Huayi was increased to 100.00% and Guizhou Huayi became a wholly-owned
subsidiary of the Company.
4) In July 2022, Zhejiang Dahua System Engineering Co., Ltd. and Tianjin Chaoxi Shangyi Intelligent Technology
Development Co., Ltd. (hereinafter referred to as “Chaoxi Shangyi”) entered into an agreement with respect to transfer
of the equity in Tianjin Dahua Information Technology Co., Ltd. (hereinafter referred to as “Tianjin Dahua”), in which
Dahua System Engineering acquired the 35.00% equity of Tianjin Dahua held by Chaoxi Shangyi with a consideration
of RMB 4,200,000. After the acquisition of equity, the previous 65.00% equity of Dahua System Engineering in Tianjin
Dahua was increased to 100.00%, and Tianjin Dahua became a wholly-owned subsidiary of Dahua System
Engineering.
(2) The effect of the transactions on the equity of the minority shareholders and the shareholder's equity
attributable to the parent company
Unit: RMB
Operator Guizhou Huayi Tianjin Dahua HuaRay Technology
Purchase
cost/Disposal
consideration
-- Cash 74,940,000.00 3,000,000.00 4,200,000.00
-- Fair value of non-
cash assets
Purchase cost/ Total
disposal 74,940,000.00 3,000,000.00 4,200,000.00
consideration
Less: the share of
net assets of the
subsidiary calculated
67,816,784.89 2,935,271.57 4,008,127.43 31,332,208.28
based on the ratio of
equity
obtained/disposed
Difference 7,123,215.11 64,728.43 191,872.57 -31,332,208.28
Among them: adjust
-7,123,215.11 -64,728.43 -191,872.57 31,332,208.28
the capital reserve
Adjusted
surplus reserve
Adjusted
undistributed profits
3. Equity in joint venture arrangements or affiliates
(1) Essential Joint Ventures or Affiliates
316
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Shareholding Percentage Accounting
Names of Treatment of
Main Place of Registered Business
Joint Ventures Investment in
Business Address Nature Direct Indirect
or Affiliates Joint Ventures
or Affiliates
Zhejiang
Binjiang Binjiang
Leapmotor Automobile
District, District, 7.88% Equity Method
Technology Manufacturing
Hangzhou Hangzhou
Co., Ltd.
(2) Main Financial Information of Essential Affiliates
Unit: RMB
Closing balance / amount occurred in Opening balance / amount occurred
the current period in the previous period
Leapmotor Technology Leapmotor Technology
Current Assets 13,638,401,767.11 8,954,852,441.73
Non-current Assets 5,629,446,242.24 3,571,622,208.81
Total Assets 19,267,848,009.35 12,526,474,650.54
Current Liabilities 9,257,386,586.22 4,329,520,551.40
Non-current Liabilities 1,751,612,490.52 966,737,754.87
Total Liabilities 11,008,999,076.74 5,296,258,306.27
Minority Shareholders' Equity
Equity attributable to shareholders of 8,258,848,932.61 7,230,216,344.27
the parent company
Share of net assets calculated based 650,470,259.18 643,076,870.51
on the shareholding ratio
Adjustments
- Goodwill
- Unrealized Profit from Internal
Transactions
- Others
Book value of equity investment in
650,470,259.18 643,076,870.51
affiliates
Fair value of equity investment in
affiliates with a public offer
Operating revenue 12,384,630,217.08 3,132,058,814.23
Net Profit -5,108,885,722.61 -2,845,773,807.89
Net Profit of Discontinued Operation
Other Comprehensive Incomes
Total Comprehensive Income -5,108,885,722.61 -2,845,773,807.89
Dividends from affiliates in this year
(3) Financial Summary of Non-essential Joint Ventures and Affiliates
Unit: RMB
317
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Closing balance / amount occurred in Opening balance / amount occurred
the current period in the previous period
Joint ventures:
The total count of the following items
based on the shareholding ratios
Affiliates:
Total book value of investments 810,629,385.37 600,795,882.40
The total count of the following items
based on the shareholding ratios
--Net profit 40,603,366.89 53,312,980.44
--Other comprehensive income -448,230.26 -4,705,087.48
--Total comprehensive income 40,155,136.63 48,607,892.96
X. Risks Relating to Financial Instruments
In the business operation, the Company is facing with various financial risks: credit risk, liquidity risk and market
risk (including exchange rate risk, interest rate risk and other price risks).
The overall objective of the Company's risk management is to formulate risk management policies that can
minimize risks without affecting the Company's competitiveness and adaptability to changes too much.
(I) Credit Risk
The credit risk refers to the risk of financial loss to the Company as a result of a counterparty's failure to fulfill its
contractual obligations. The Company is mainly facing with the customer credit risk arising from sales on account.
Before signing a new contract, the Company will assess the new customer's credit risk, including external credit rating
and the credibility letter from a bank under some circumstances (if such information is available). The Company has
set a credit limit for sales on account for each customer. Such limit shall be the maximum amount with no additional
approval needed.
The Company ensures that the overall credit risk is within the controllable range through quarterly monitoring of
credit ratings of existing customers, and monthly review of aging analysis on accounts receivable. When monitoring
customers' credit risk, the Company groups them according to their credit characteristics. Customers rated as "high
risk" will be placed on the restricted customer list. The Company can provide them with O/A in the future period only
when additional approval is obtained. Otherwise they must make relevant payment in advance.
For overseas customers, the Company mainly uses wire transfer as a payment method. According to the credit
evaluation of each customer, the Company gives different credit lines and credit account periods, and agrees on the
payment method and account period in the commodity procurement contract between the two parties. After the sales
of products, the Company has a dedicated person responsible for tracking, reconciliation, and payment reminding. In
addition, the Company introduced export credit insurance to ensure that the return risk from overseas customers is
within controllable range.
(II) Liquidity Risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligation of settlement by cash
or other financial assets.
The Company's policy is to ensure that there is sufficient cash to repay the liabilities due. The liquidity risk is
under the concentrated control of the Company's Financial Department. Through monitoring the balance of cash and
securities cashable at any time and rolling forecasting the cash flow in the next 12 months, the Financial Department
ensures that the Company has sufficient funds to repay its debts under all reasonable predictions.
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2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
The financial liabilities of the Company are listed as follows based on the undiscounted contractual cash flow:
Unit: RMB
December 31, 2022
Item
Within 1 year 1 years or above Total
Short-term loan 257,943,618.51 257,943,618.51
Notes Payable 4,364,097,761.17 4,364,097,761.17
Accounts Payable 7,340,277,388.29 7,340,277,388.29
Other Payables 1,004,056,999.91 1,004,056,999.91
Non-current Liabilities Due
2,569,150,636.83 2,569,150,636.83
within 1 Year
Long-term loan 453,825,000.00 453,825,000.00
Lease Liabilities 209,266,176.61 209,266,176.61
Total 15,535,526,404.71 663,091,176.61 16,198,617,581.32
December 31, 2021
Item
Within 1 year 1 years or above Total
Short-term loan 325,648,230.98 325,648,230.98
Notes Payable 4,472,998,965.03 4,472,998,965.03
Accounts Payable 7,329,740,650.71 7,329,740,650.71
Other Payables 677,752,701.47 677,752,701.47
Non-current Liabilities
897,508,057.06 897,508,057.06
Due within 1 Year
Long-term loan 1,552,500,000.00 1,552,500,000.00
Lease Liabilities 154,577,298.75 154,577,298.75
Total 13,703,648,605.25 1,707,077,298.75 15,410,725,904.00
(III) Market Risk
The market risk of financial instruments refers to the risk of fluctuation at fair value of financial instruments or
future cash flows with the change of market prices, including exchange rate risks, interest rate risks and other price
risks.
1. Interest rate risk
The interest rate risk refers to the risk in which the fair value or future cash flow of financial instruments changes
due to the change of market interest rate. The interest rate risk faced with by the Company is mainly from bank loans.
The Company's assets and liabilities relating to interest rate are respectively bank deposits and short-term loans,
whose interest rate risk is low.
2. Exchange rate risk
The exchange rate risk refers to the risk in which the fair value or future cash flow of financial instruments
changes due to the change of foreign exchange rate. The Company will try its best to match the revenues with the
expenses in foreign currency, to lower the exchange rate risk. In addition, the Company may also sign forward foreign
exchange contracts or currency swap contracts to avoid exchange rate risks.
The exchange rate risk faced with by the Company is mainly from financial assets and liabilities in USD. The
amounts of assets and liabilities in foreign currencies and converted into RMB are listed as below:
Unit: RMB
Closing balance Opening balance
Item USD Other foreign Total USD Other foreign Total
currencies currencies
Cash and
Bank 1,014,793,102.46 593,320,421.14 1,608,113,523.60 2,354,710,497.05 916,354,449.93 3,271,064,946.98
Balances
Accounts
4,171,664,421.39 2,134,877,260.22 6,306,541,681.61 3,483,123,214.93 1,480,563,785.67 4,963,687,000.60
receivable
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2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Accounts
1,764,995,765.35 342,688,103.07 2,107,683,868.42 1,643,617,962.46 352,288,239.87 1,995,906,202.33
Payable
Total 6,951,453,289.20 3,070,885,784.43 10,022,339,073.63 7,481,451,674.44 2,749,206,475.47 10,230,658,149.91
XI. Disclosure of Fair Values
1. Fair values of the assets and liabilities at the end of the period
Unit: RMB
Fair values at period-end
Item First level Second level Third level
measurement at a measurement at fair measurement at fair Total
fair value value value
I. Constant
measurement at fair -- -- -- --
value
(I) Trading Financial
1,470,000.00 1,470,000.00
Assets
1. Financial assets
measured at fair
1,470,000.00 1,470,000.00
value through profit
or loss in this period
(1) Investment in
debt instrument
(2) Investment in
equity instrument
(3) Derivative
Financial Assets
(4) Others 1,470,000.00 1,470,000.00
2. Financial assets
that are designated
to be measured at
fair value through
profit or loss in this
period
(1) Investment in
debt instrument
(2) Investment in
equity instrument
(II) Investment in
Other Creditor's
Rights
(III) Investment in
Other Equity
Instruments
(IV) Investment
Property
(V) Biological Assets
(VI) Receivables
679,441,917.62 679,441,917.62
Financing
(VII) Other Non-
555,140,136.32 375,902,994.01 931,043,130.33
current Financial
320
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Assets
1. Financial assets
measured at fair
555,140,136.32 375,902,994.01 931,043,130.33
value through profit
or loss in this period
(1) Investment in
debt instrument
(2) Investment in
375,902,994.01 375,902,994.01
equity instrument
(3) Derivative
Financial Assets
(4) Others 555,140,136.32 555,140,136.32
2. Financial assets
that are designated
to be measured at
fair value through
profit or loss in this
period
(1) Investment in
debt instrument
(2) Others
Total assets
constantly measured 1,236,052,053.94 375,902,994.01 1,611,955,047.95
at fair value
(VIII) Transactional
26,652,319.25 26,652,319.25
financial liabilities
Of which: Derivative
26,652,319.25 26,652,319.25
financial liabilities
Total amount of
liabilities constantly
26,652,319.25 26,652,319.25
measured at their fair
values
II. Non-constant
measurement at fair -- -- -- --
values
2. For the continuous and non-continuous second-level fair value measurement items, the
valuation techniques adopted and the qualitative and quantitative information of important
parameters
The fair value of the derivative financial assets/derivative financial liabilities is measured and recognized with reference
to different parameters determined by the financial institutions on the basis of the market conditions then existing as
well as the remaining term and transaction term of such transaction.
Due to the short remaining term of the receivables financing, the book value is close to the fair value, and the nominal
amount is used as the fair value.
Other non-current financial assets are valued on the basis of quotations provided by financial institutions.
3. For the continuous and non-continuous third-level fair value measurement items, the
valuation techniques adopted and the qualitative and quantitative information of important
parameters
Evaluate the value and net book assets based on the income method and asset-based method.
321
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
4. The fair value of financial assets and financial liabilities not measured at fair value
The fair value of financial assets and financial liabilities measured by the Company at amortized cost is equivalent to
the book value.
XII. Related Parties and Related-party Transactions
1. The Company's Parent Company
Proportion of
Shareholding
Name of parent Registered Registered voting rights of
Business Nature ratio of the
company Address Capital the parent
parent company
company
Fu Liquan 33.76% 33.76%
Chen Ailing 2.35% 2.35%
The final controllers of the Company are Mr. Fu Liquan and Ms. Chen Ailing.
2. Information about the Company's subsidiaries
For details of subsidiaries of the Company, see Note "IX. Equities in other entities".
3. Information about the Company's joint ventures and affiliates
For details of significant joint ventures and associates of the Company, see Note "IX. Equities in other entities".
Here are the information about other joint ventures and affiliates that have related-party transactions with the Company
in the current period or have balance from related-party transactions with the Company in the previous period:
Names of joint ventures and affiliates Relationship with the Company
Intelbras S.A. Affiliate
Guangdong Zhishi Digital Technology Co., Ltd. Affiliate
Zhejiang Leapmotor Technology Co., Ltd. and its affiliates Affiliate and enterprise where the actual controller has
(Note 1) significant influence
Ruicity Digital Technology Co., Ltd. and its affiliates (Note
Affiliate
2)
Shaoxing Dahua Security Services Co., Ltd. Affiliate
Hangzhou Juhuanyan Information Technology Co., Ltd. Affiliate
Dezhou Shuzhi Information Technology Co., Ltd. Affiliate
Ningbo Dahua Anbang Security Services Co., Ltd. (Note
Affiliate
3)
Zhoushan Dahua Technology Co., Ltd. (Note 3) Affiliate
Taizhou Dahua Security Services Co., Ltd. (Note 3) Affiliate
China Standard Intelligent Security Technology Co., Ltd.
Affiliate
(Note 4)
Zhejiang Huachuang Vision Technology Co., Ltd. Affiliate
Ningbo Cida Yongshun Intelligent Technology Co., Ltd. Affiliate
Shuzi Dongyang Technology Operation Co., Ltd. (Note 5) Affiliate
Other notes:
Note 1: "Zhejiang Leapmotor Technology Co., Ltd. and its affiliates" includes a total of nine companies that have
related transactions with our company, namely Zhejiang Leapmotor Technology Co., Ltd., Leapmotor Automobile Co.,
Ltd., Hangzhou Leapmotor Automobile Sales Service Co., Ltd., Zhejiang Youchong New Energy Technology Co., Ltd.,
Wuhan Lingchao Automobile Sales Service Co., Ltd., Zhejiang Leapmotor Automobile Sales Service Co., Ltd., Jinhua
322
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Leapmotor New Energy Automotive Parts Technology Co., Ltd., Zhejiang Lingsheng Technology Co., Ltd. and
Shanghai Leapmotor Automobile Marketing Service Co., Ltd,.
Note 2: "Ruicity Digital Technology Co., Ltd. and its affiliates" includes Ruicity Digital Technology Co., Ltd. and its
subsidiary, Ruicity (Shandong) Digital Technology Co. Ltd.
Note 3: The equity of the Company in Ningbo Dahua Anbang Security Service Co., Ltd., Zhoushan Dahua Technology
Co., Ltd., and Taizhou Dahua Security Service Co. Ltd. has been fully transferred in 2021. However, due to the
resignation of director Wu Yunlong in March 2021, it is still recognized as having affiliated relationship within 12
months of leaving office, and the affiliated relationship ended in March 2022.
Note 4: the Company disposed of all the equity in China Standard Intelligent Security Technology Co., Ltd. in July
2021, and ended the affiliated relationship in July 2022.
Note 5: Shuzi Dongyang Technology Operation Co., Ltd. ended its affiliated relationship in July 2022.
4. Information about other related parties
Relationship between the Company and other related
Names of other related parties
parties
Ningbo Hualing Venture Capital Investment Partnership
Enterprise controlled by the actual controller
(Limited Partnership)
Zhejiang Huanuokang Technology Co., Ltd. Enterprise controlled by the actual controller
Enterprise controlled by the persons acting in concert of
Hangzhou Xianmai Technology Co., Ltd.
the actual controller
Huayan Capital (Hangzhou) Private Equity Fund
Enterprise controlled by the actual controller
Management Co., Ltd.
Zhoushan Zhixin Equity Investment Partnership (Limited
Enterprise controlled by the actual controller
Partnership)
Zhoushan Weixin Equity Investment Partnership (Limited Enterprise where the actual controller has significant
Partnership) influence
Enterprise where the actual controller and major
Zhejiang Lancable Technology Co., Ltd.
stockholder have significant influence
Enterprise significantly influenced by the major
Hangzhou Xunwei Robotics Technology Co., Ltd.
shareholder of the Company
Enterprise controlled by the major shareholder of the
Hangzhou Xintu Technology Co., Ltd.
Company
Zhejiang Zhihua Internet of Things Technology Co., Ltd. Subsidiary of the affiliate
China Mobile Communications Group Co., Ltd. and its
Group with significant influence on the Company
affiliates
Enterprise once controlled by the spouse of senior
Hangzhou Nuojia Technology Co., Ltd. (Note 1)
manager of the Company
Zhoushan Dahua Security Service Co., Ltd. (Note 2) Subsidiary of the affiliate
Ningxia Shendun Security Services Co., Ltd. (Note 3) Subsidiary in which the Company previously invested
Company A and other companies under its control Related parties
Enterprise where the actual controller served as a
Lorex Technology Inc.
director within 12 months
Enterprise where the actual controller served as a
Lorex Corporation
director within 12 months
Other notes:
Note 1: Hangzhou Nuojia Technology Co., Ltd. was a business controlled by the spouse of a senior manager of the
Company. The spouse disposed of shares and lost the control over the business in January 2022, but it is still
recognized as an associated party within 12 months after the disposal, and the associated relationship will end in
January 2023.
323
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Note 2: Zhoushan Dahua Security Service Co., Ltd. is a wholly-owned subsidiary of Zhoushan Dahua Technology Co.,
Ltd. The Company has transferred all the equity of Zhoushan Dahua Technology Co., Ltd. in 2021. However, due to
the resignation of director Wu Yunlong in March 2021, it was still recognized as an affiliated relationship within 12
months of his resignation, and the affiliated relationship ended in March 2022.
Note 3: Ningxia Shendun Security Services Co., Ltd. was a subsidiary of Ningxia Electronic Technology Co., Ltd. In
July 2022, the Company transferred all the equity in Ningxia Electronic Technology Co., Ltd. and ended the affiliated
relationship.
5. Information about related-party transactions
(1) Related-party transactions involving purchase and selling of merchandise and provision
and acceptance of labor services
Merchandise purchase and acceptance of labor services
Unit: RMB
Content of the Amount Over the Amount
Approved
Related parties related - party Occurred in the transaction limit Occurred in the
transaction limit
transaction Current Period or not Previous Period
Company A and
Purchase of
other companies 426,715,803.76 No 312,733,064.61
materials
under its control
China Mobile Material
Communications procurement,
29,900,094.13 No 26,475,168.51
Group Co., Ltd. acceptance of
and its affiliates services
Zhejiang
Material
Huachuang
procurement,
Vision 28,553,150.81 No
acceptance of
Technology Co.,
services
Ltd.
Hangzhou Nuojia
Acceptance of
Technology Co., 743,921.51 No 1,421,238.25
services
Ltd.
Zhejiang
Huanuokang Purchase of
426,548.59 No 1,960,984.98
Technology Co., materials
Ltd.
Zhejiang
Lancable Purchase of
212,400.00 No
Technology Co., materials
Ltd.
Ruicity Digital
Acceptance of
Technology Co., 188,679.25 No
services
Ltd.
Hangzhou Material
Xunwei Robotics procurement,
86,820.97 No 482,981.66
Technology Co., acceptance of
Ltd. services
Zhejiang
Material
Leapmotor
procurement,
Technology Co., 24,065.76 No 215,752.96
acceptance of
Ltd. and its
services
affiliates
324
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Zhoushan Dahua
Acceptance of
Security Service No 5,664,073.17
services
Co., Ltd.
Hangzhou
Xianmai Purchase of
No 3,072.41
Technology Co., materials
Ltd.
Sales of merchandise and provision of services
Unit: RMB
Content of the related - Amount Occurred in the Amount Occurred in the
Related parties
party transaction Current Period Previous Period
Intelbras S.A. Sales of merchandise 885,573,057.86 720,474,247.16
Zhejiang Leapmotor Sales of merchandise
Technology Co., Ltd. and its and provision of 380,507,828.89 101,968,210.47
affiliates services
China Mobile Communications Sales of merchandise
Group Co., Ltd. and its and provision of 296,167,428.28 187,576,809.94
affiliates services
Guangdong Zhishi Digital
Sales of merchandise 13,638,759.40 22,404,476.13
Technology Co., Ltd.
Ruicity Digital Technology Co.,
Sales of merchandise 26,862,367.12 19,953,157.33
Ltd. and its affiliates
Ningbo Cida Yongshun
Sales of merchandise 8,809,463.47
Intelligent Technology Co., Ltd.
Zhejiang Huanuokang
Sales of merchandise 3,183,710.56 2,344,116.26
Technology Co., Ltd.
Sales of merchandise
Dezhou Shuzhi Information
and provision of 2,177,472.29
Technology Co., Ltd.
services
Sales of merchandise
Zhejiang Huachuang Vision
and provision of 1,820,337.98
Technology Co., Ltd.
services
Hangzhou Nuojia Technology
Sales of merchandise 1,014,877.85 48,096.46
Co., Ltd.
Shuzi Dongyang Technology Provision of labor
651,905.66
Operation Co., Ltd. services
Company A and other
Sales of merchandise 152,369.23 294,853.87
companies under its control
Hangzhou Xunwei Robotics
Sales of merchandise 20,973.45 50,849.58
Technology Co., Ltd.
Hangzhou Xintu Technology Provision of labor
4,716.96 332,382.48
Co., Ltd. services
Zhejiang Zhihua Internet of
Sales of merchandise 1,769.91 29,734.52
Things Technology Co., Ltd.
Ningbo Dahua Anbang
Sales of merchandise 1,954,159.23
Security Services Co., Ltd.
Hangzhou Juhuanyan
Information Technology Co., Sales of merchandise 957,547.16
Ltd.
Zhoushan Dahua Technology
Sales of merchandise 95,153.09
Co., Ltd.
China Standard Intelligent
Sales of merchandise 7,256.63
Security Technology Co., Ltd.
Taizhou Dahua Security
Sales of merchandise 730.07
Services Co., Ltd.
325
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(2) Related leasing
The Company being the lessor:
Unit: RMB
Type of the leased Rental income confirmed in Rental income confirmed in
Name of the lessee
assets this period the previous period
Zhejiang Leapmotor Technology Buildings and
258,595.24 1,165,489.71
Co., Ltd. and its affiliates constructions
Zhejiang Huanuokang Buildings and
738,825.30 34,285.72
Technology Co., Ltd. constructions
Huayan Capital (Hangzhou)
Buildings and
Private Equity Fund 29,766.33
constructions
Management Co., Ltd.
Company A and other
Transport equipment 15,486.73 15,044.25
companies under its control
Ruicity Digital Technology Co.,
Transport equipment 28,723.15
Ltd. and its affiliates
The Company being the lessee:
Unit: RMB
Simplified rental
Variable lease
expenses for
payments not
short-term Interest expense
included in the Increased right-
leases and low- Rent paid on lease
measurement of of-use assets
value asset liabilities borne
lease liabilities (if
leases (if
Type applicable)
Name applicable)
of the
of the Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun
leased
lessor t t t t t t t t t t
assets
Occurr Occurr Occurr Occurr Occurr Occurr Occurr Occurr Occurr Occurr
ed in ed in ed in ed in ed in ed in ed in ed in ed in ed in
the the the the the the the the the the
Curren Previo Curren Previo Curren Previo Curren Previo Curren Previo
t us t us t us t us t us
Period Period Period Period Period Period Period Period Period Period
Zhejia
ng
Leapm
otor Machin
Techno ery
1,034, 266,40 8,884,
logy and
915.00 1.09 640.73
Co., equip
Ltd. ment
and its
affiliate
s
(3) Related guarantee
The Company being the guarantor:
326
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Unit: RMB
Amount Guarantee fulfilled
Secured parties Starting date Maturity date
guaranteed completely or not
Zhejiang Dahua Vision
180,000,000.00 June 26, 2019 June 25, 2022 Yes
Technology Co., Ltd.
Two years after the
Zhejiang Dahua Vision maturity of the debts
250,000,000.00 February 17, 2020 in the master Yes
Technology Co., Ltd.
contract
Two years after the
Zhejiang Dahua Vision maturity of the debts
240,000,000.00 April 13, 2020 in the master Yes
Technology Co., Ltd.
contract
Three years after the
Zhejiang Dahua Vision maturity of the debts
300,000,000.00 February 25, 2021 in the master Yes
Technology Co., Ltd.
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua Vision
200,000,000.00 November 10, 2021 date of each note Yes
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Two years after the
Zhejiang Dahua Vision maturity of the debts
220,000,000.00 October 13, 2017 No
Technology Co., Ltd. in the master
contract
Zhejiang Dahua Vision Two years after the
Technology Co., Ltd. maturity of the debts
40,000,000.00 September 21, 2018 No
(guarantee currency is in the master
US dollar) contract
Zhejiang Dahua Vision
530,000,000.00 April 7, 2020 March 31, 2024 No
Technology Co., Ltd.
Two years after the
Zhejiang Dahua Vision maturity of the debts
600,000,000.00 August 12, 2020 No
Technology Co., Ltd. in the master
contract
Two years after the
Zhejiang Dahua Vision maturity of the debts
330,000,000.00 August 18, 2020 No
Technology Co., Ltd. in the master
contract
Five years upon
Zhejiang Dahua Vision expiration of debt
300,000,000.00 August 15, 2020 period of master No
Technology Co., Ltd.
contract
Three years after the
Zhejiang Dahua Vision 1,000,000,000.0 maturity of the debts
February 4, 2021 No
Technology Co., Ltd. 0 in the master
contract
Zhejiang Dahua Vision
80,000,000.00 May 12, 2021 December 31, 2022 Yes
Technology Co., Ltd.
Three years after the
Zhejiang Dahua Vision maturity of the debts
440,000,000.00 July 26, 2021 No
Technology Co., Ltd. in the master
contract
Zhejiang Dahua Vision
35,000,000.00 August 1, 2021 July 31, 2023 No
Technology Co., Ltd.
Three years after the
Zhejiang Dahua Vision
500,000,000.00 August 2, 2021 maturity of the debts Yes
Technology Co., Ltd. in the master
327
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
contract
Three years after the
Zhejiang Dahua Vision maturity of the debts
600,000,000.00 September 27, 2021 Yes
Technology Co., Ltd. in the master
contract
Three years after the
Zhejiang Dahua Vision maturity of the debts
900,000,000.00 September 27, 2021 No
Technology Co., Ltd. in the master
contract
Three years after the
Zhejiang Dahua Vision maturity of the debts
200,000,000.00 October 20, 2021 No
Technology Co., Ltd. in the master
contract
Three years after the
Zhejiang Dahua Vision maturity of the debts
300,000,000.00 June 10, 2022 No
Technology Co., Ltd. in the master
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua Vision
200,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Three years after the
Zhejiang Dahua Vision maturity of the debts
200,000,000.00 July 22, 2022 No
Technology Co., Ltd. in the master
contract
Three years after the
Zhejiang Dahua Vision maturity of the debts
350,000,000.00 July 25, 2022 in the master No
Technology Co., Ltd.
contract
Zhejiang Dahua Vision
600,000,000.00 September 19, 2022 September 18, 2024 No
Technology Co., Ltd.
One years upon
Zhejiang Dahua Zhilian expiration of debt
100,000,000.00 May 1, 2021 Yes
Co., Ltd. period of master
contract
Zhejiang Dahua Zhilian
Co., Ltd. (guarantee 60,000,000.00 May 1, 2021 April 30, 2022 Yes
currency is US dollar)
Zhejiang Dahua Zhilian
Co., Ltd. (guarantee 55,000,000.00 April 30, 2021 May 14, 2022 Yes
currency is US dollar)
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua Zhilian
160,000,000.00 November 10, 2021 date of each note Yes
Co., Ltd.
discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Dahua Zhilian
Co., Ltd. (guarantee 24,000,000.00 December 3, 2021 May 31, 2022 Yes
currency is US dollar)
Two years after the
Zhejiang Dahua Zhilian maturity of the debts
300,000,000.00 March 28, 2019 No
Co., Ltd. in the master
contract
Zhejiang Dahua Zhilian 165,000,000.00 July 26, 2021 Three years after the No
328
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Co., Ltd. maturity of the debts
in the master
contract
Three years after the
Zhejiang Dahua Zhilian maturity of the debts
150,000,000.00 September 27, 2021 in the master Yes
Co., Ltd.
contract
Three years after the
Zhejiang Dahua Zhilian maturity of the debts
200,000,000.00 November 10, 2021 in the master No
Co., Ltd.
contract
One years upon
Zhejiang Dahua Zhilian expiration of debt
35,000,000.00 December 3, 2021 period of master Yes
Co., Ltd.
contract
Zhejiang Dahua Zhilian
Co., Ltd. (guarantee 5,000,000.00 December 3, 2021 December 2, 2024 No
currency is US dollar)
Zhejiang Dahua Zhilian
80,000,000.00 March 25, 2022 December 31, 2023 No
Co., Ltd.
Zhejiang Dahua Zhilian One years upon
expiration of debt
Co., Ltd. (guarantee 60,000,000.00 May 1, 2022 No
period of master
currency is US dollar) contract
One years upon
Zhejiang Dahua Zhilian expiration of debt
10,000,000.00 May 1, 2022 No
Co., Ltd. period of master
contract
Zhejiang Dahua Zhilian
Co., Ltd. (guarantee 55,000,000.00 May 14, 2022 May 14, 2023 No
currency is US dollar)
Three years after the
Zhejiang Dahua Zhilian maturity of the debts
160,000,000.00 June 10, 2022 No
Co., Ltd. in the master
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua Zhilian
160,000,000.00 June 10, 2022 date of each note No
Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Dahua Zhilian
200,000,000.00 August 25, 2022 August 25, 2025 No
Co., Ltd.
Zhejiang Dahua Zhilian
150,000,000.00 September 19, 2022 September 18, 2024 No
Co., Ltd.
Zhejiang Dahua Zhilian
Co., Ltd. (guarantee 22,000,000.00 November 16, 2022 May 14, 2023 No
currency is US dollar)
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua System
40,000,000.00 November 10, 2021 date of each note Yes
Engineering Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Two years after the
Zhejiang Dahua System maturity of the debts
10,000,000.00 August 30, 2019 in the master No
Engineering Co., Ltd.
contract
329
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Three years after the
Zhejiang Dahua System maturity of the debts
50,000,000.00 August 2, 2021 Yes
Engineering Co., Ltd. in the master
contract
Three years after the
Zhejiang Dahua System maturity of the debts
60,000,000.00 November 10, 2021 in the master No
Engineering Co., Ltd.
contract
Three years after the
Zhejiang Dahua System maturity of the debts
40,000,000.00 June 10, 2022 No
Engineering Co., Ltd. in the master
contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Dahua System
40,000,000.00 June 10, 2022 date of each note No
Engineering Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Three years after the
Zhejiang Dahua System maturity of the debts
50,000,000.00 July 25, 2022 in the master No
Engineering Co., Ltd.
contract
Zhejiang Dahua System
5,000,000.00 August 25, 2022 August 25, 2025 No
Engineering Co., Ltd.
Dahua Technology (HK)
Limited (guarantee 1,000,000.00 April 25, 2021 April 25, 2022 Yes
currency is EUR)
Dahua Technology (HK)
Limited (guarantee 2,000,000.00 March 25, 2022 March 25, 2023 No
currency is US dollar)
DAHUA TECHNOLOGY
MEXICO S.A. DE C.V
1,000,000.00 September 1, 2021 December 1, 2023 No
(guaranteed currency is
US dollar)
DAHUA TECHNOLOGY
MEXICO S.A. DE C.V
5,000,000.00 October 21, 2021 October 20, 2022 Yes
(guaranteed currency is
US dollar)
DAHUA TECHNOLOGY
MEXICO S.A. DE C.V
5,000,000.00 October 21, 2022 October 20, 2023 No
(guaranteed currency is
US dollar)
Hangzhou Huacheng Six months upon
expiration of debt
Network Technology Co., 20,000,000.00 February 4, 2021 period of master Yes
Ltd. contract
Hangzhou Huacheng Three years after the
maturity of the debts
Network Technology Co., 100,000,000.00 February 25, 2021 in the master Yes
Ltd. contract
Hangzhou Huacheng Two years after the
maturity of the debts
Network Technology Co., 50,000,000.00 August 30, 2019 in the master No
Ltd. contract
Hangzhou Huacheng Three years after the
maturity of the debts
Network Technology Co., 55,000,000.00 July 26, 2021 No
in the master
Ltd. contract
Hangzhou Huacheng Three years after the
50,000,000.00 September 27, 2021 Yes
Network Technology Co., maturity of the debts
330
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Ltd. in the master
contract
Hangzhou Huacheng
Network Technology Co., 65,000,000.00 August 25, 2022 August 25, 2025 No
Ltd.
Dahua Technology UK
Sign the Termination
Limited (guaranteed 1,160,000.00 August 12, 2020 No
Notice Letter
currency is GBP)
Dahua Technology USA
Inc. (guaranteed currency 1,400,000.00 November 19, 2021 November 18, 2022 Yes
is US dollar)
Zhejiang Huayixin Three years after the
Technology Co., Ltd. maturity of the debts
2,000,000.00 May 2, 2021 Yes
(guarantee currency is in the master
US dollar) contract
Three years after the
Zhejiang Huayixin maturity of the debts
10,000,000.00 April 29, 2022 No
Technology Co., Ltd. in the master
contract
Zhejiang Huayixin Three years after the
Technology Co., Ltd. maturity of the debts
2,000,000.00 May 16, 2022 No
(guarantee currency is in the master
US dollar) contract
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huayixin
10,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Huayixin
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Zhejiang Huayixin
8,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Fengshi
20,000,000.00 November 10, 2021 date of each note Yes
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Fengshi
20,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Fengshi
100,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Zhejiang Fengshi
20,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
Three years after the
Jiangsu Huaruipin maturity of the debts
10,000,000.00 October 20, 2021 in the master No
Technology Co. Ltd.
contract
331
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Jiangsu Huaruipin
10,000,000.00 November 10, 2021 date of each note Yes
Technology Co. Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Jiangsu Huaruipin
10,000,000.00 June 10, 2022 date of each note No
Technology Co. Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Jiangsu Huaruipin
8,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co. Ltd.
Jiangsu Huaruipin
15,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co. Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huaxiao
5,000,000.00 November 10, 2021 date of each note Yes
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huaxiao
10,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Huaxiao
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Zhejiang Huaxiao
8,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
Xi'an Dahua Zhilian
30,000,000.00 September 27, 2021 September 18, 2022 Yes
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Xi'an Dahua Zhilian
50,000,000.00 November 10, 2021 date of each note Yes
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Xi'an Dahua Zhilian
50,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Xi'an Dahua Zhilian 100,000,000.00 August 25, 2022 August 25, 2025 No
332
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Technology Co., Ltd.
Xi'an Dahua Zhilian
25,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
Zhengzhou Dahua Zhian after the maturity
Information Technology 50,000,000.00 November 10, 2021 date of each note Yes
Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
Zhengzhou Dahua Zhian after the maturity
Information Technology 50,000,000.00 June 10, 2022 date of each note No
Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhengzhou Dahua Zhian
Information Technology 30,000,000.00 August 25, 2022 August 25, 2025 No
Co., Ltd.
From effective date
of the Commitment
Letter to three years
Chengdu Dahua Zhian after the maturity
Information Technology 50,000,000.00 November 10, 2021 date of each note Yes
Service Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
Chengdu Dahua Zhian after the maturity
Information Technology 100,000,000.00 June 10, 2022 date of each note No
Service Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
From effective date
of the Commitment
Letter to three years
after the maturity
Changsha Dahua
10,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Changsha Dahua
30,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
Changsha Dahua
20,000,000.00 October 21, 2022 September 18, 2024 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Pixfra
5,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Pixfra 5,000,000.00 August 25, 2022 August 25, 2025 No
333
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
Zhejiang Huafei after the maturity
Intelligent Technology 5,000,000.00 June 10, 2022 date of each note No
CO., LTD. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Huafei
Intelligent Technology 2,000,000.00 August 25, 2022 August 25, 2025 No
CO., LTD.
From effective date
of the Commitment
Letter to three years
after the maturity
Zhejiang Huajian
5,000,000.00 June 10, 2022 date of each note No
Technology Co., Ltd. discounted by the
China Merchants
Bank within the credit
extension period
Zhejiang Huajian
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology Co., Ltd.
From effective date
of the Commitment
Letter to three years
after the maturity
Hangzhou Xiaohua
5,000,000.00 June 10, 2022 date of each note No
Technology CO., LTD. discounted by the
China Merchants
Bank within the credit
extension period
Hangzhou Xiaohua
2,000,000.00 August 25, 2022 August 25, 2025 No
Technology CO., LTD.
Zhejiang Dahua Security
Network Operation 5,000,000.00 August 25, 2022 August 25, 2025 No
Service Co., Ltd.
(4) Asset transfer and debt restructuring of related parties
Unit: RMB
Content of the related - Amount Occurred in the Amount Occurred in the
Related parties
party transaction Current Period Previous Period
Zhejiang Leapmotor
Procurement of fixed
Technology Co., Ltd. and 842,105.08 1,477,775.60
assets
its affiliates
Zhejiang Huanuokang
Selling of fixed assets 3,078.06
Technology Co., Ltd.
Ruicity Digital Technology
Selling of fixed assets 112,127.64
Co., Ltd.
(5) Remuneration to key management personnel
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Salary of key management personnel 22,367,156.79 28,506,768.94
334
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(6) Other related-party transactions
1. On February 16, 2022, the Company held the 26th Meeting of the 7th Board of Directors, deliberated and approved
the Proposal on Adjusting Related Matters and Related Transactions of Industrial Fund, agreeing that the subscribed
capital of Zhoushan Huayan Chuangxi Equity Investment Partnership (Limited Partnership) jointly invested by the
Company and Related Parties would be increased from RMB 150.1 million to RMB 258.01 million, where some original
partners increased their capital contributions and four new limited partners were added. The Company has not
increased its capital contribution this time. After the change, the Company capital contribution proportion is changed
from 33.32% to 19.38%.
2. On April 22, 2022, meeting the "Proposal on Giving up the Subsidiary's Right of First Refusal(ROFR) and Related-
party Transactions" was reviewed and approved at the 30th meeting of the 7th Board of Directors, where Zhang Hui,
the shareholder of Zhejiang Huafei Intelligent Technology Co., Ltd.(the Company’s holding subsidiary), transferred his
13.50% equity to Ningbo Hualing Venture Capital Investment Partnership (Limited Partnership) at a price of RMB
15,903,000 and the Board of Directors agreed that the Company may give up the right of first refusal.
3. The Company held the 35th meeting of seventh Board of Directors on October 28, 2022, at which the Proposal on
Transferring the Equities of the Controlled Subsidiary and Abandoning the Preemptive Right and Related Transactions
was deliberated and approved. The Board of Directors of the Company agreed to transfer 29.56% equities of Zhejiang
Huachuang Vision Technology Co., Ltd. (hereinafter referred to as “Huachuang Vision”), one of the Company’s
controlled subsidiaries, to five external investors such as Hangzhou Zhechuang Qizhi Equity Investment in Emerging
Industries Partnership (a limited partnership) at the price of RMB 153.7 million. Meanwhile, the Board of Directors
agreed that Ningbo Huayu Investment Management Partnership Enterprise (Limited Partnership), another shareholder
of Huachuang Vision, would transfer Huachuang Vision’s 49% equities to the external investors and Huachuang
Vision’s management team, and abandoned the relevant right of first refusal(ROFR).
4. The Company held the 38th meeting of the seventh Board of Directors and the 26th meeting of the seventh Board of
Supervisors on December 23, 2022, at which the Company deliberated and approved Proposal on the Implementation
of Equity Incentive Plan and Related Transactions of the Controlled Subsidiary and agreed that Zhejiang HuaRay
Technology Co., Ltd. (“HuaRay Technology”), one of the Company’s controlled subsidiaries, would propose to offer an
equity-based incentive for its management and core employees by means of capital and share increase. By
participating in this equity incentive, the incentive objects will increase the total capital of RMB 16,328,500 (of which
RMB 4,830,918 shall serve as the increased registered capital, and the rest shall be included into capital reserve) to
HuaRay Technology directly or through Hangzhou Jurui Lingba Enterprise Management Partnership (a limited
partnership), an employee shareholding platform, of which Mr. Zhang Xingming, the Company’s former director and
senior executive, will directly invest RMB 4,082,100 to HuaRay Technology (corresponding to the increased registered
capital of RMB 1,207,730).
5. During the reporting period, the Company, in consideration of the strategy and actual business development,
transferred its 20% equity in Zhejiang Huanuokang Technology Co., Ltd. to Ningbo Hualing Venture Capital
Investment Partnership (Limited Partnership), Hangzhou Kangpi Enterprise Management Partnership (Limited
Partnership), Hangzhou Jikang I Enterprise Management Partnership (Limited Partnership) and Hangzhou Jikang IV
Enterprise Management Partnership (Limited Partnership) at a total price of RMB 24,000,000. This transaction price is
based on the evaluation report issued by Zhejiang Zhongqihua Assets Appraisal Co., Ltd. (Zhe Zhong Qi Hua Ping
Bao Zi (2022) No.0373).
335
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
6. Receivables and payables of the related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item Name Related parties Bad debt Bad debt
Book balance Book balance
provision provision
Accounts
Intelbras S.A. 397,867,692.70 19,895,705.61 206,318,099.10 10,320,331.98
receivable
Accounts
Lorex Corporation 421,294,479.95 22,971,174.01
receivable
China Mobile
Accounts Communications
169,771,631.78 13,418,528.87 111,247,639.49 7,895,521.54
receivable Group Co., Ltd. and
its affiliates
Zhejiang Leapmotor
Accounts
Technology Co., Ltd. 125,228,191.88 6,287,574.59 89,391,704.45 4,647,793.73
receivable
and its affiliates
Zhejiang Huachuang
Accounts
Vision Technology 66,484,746.14 6,468,047.41
receivable
Co., Ltd.
Accounts Ruicity Digital
18,091,127.92 904,556.40 4,915,729.56 245,786.48
receivable Technology Co., Ltd.
Guangdong Zhishi
Accounts
Digital Technology 7,558,397.45 377,919.87 6,365,249.54 318,262.48
receivable
Co., Ltd.
Ningbo Cida
Accounts
Yongshun Intelligent 6,944,214.63 347,210.73
receivable
Technology Co., Ltd.
Zhejiang
Accounts
Huanuokang 5,029,172.47 319,416.79 2,738,506.81 146,705.87
receivable
Technology Co., Ltd.
Company A and
Accounts
other companies 2,703,192.68 694,554.83 2,603,710.63 204,923.51
receivable
under its control
Accounts Lorex Technology
1,589,271.42 87,438.04
receivable Inc.
Hangzhou
Accounts Juhuanyan
1,208,000.00 344,113.20 1,208,000.00 181,613.20
receivable Information
Technology Co., Ltd.
Accounts Hangzhou Nuojia
652,335.00 32,616.75 1,947.00 97.35
receivable Technology Co., Ltd.
Shaoxing Dahua
Accounts
Security Services 50,000.00 25,000.00 50,000.00 15,000.00
receivable
Co., Ltd.
Huayan Capital
(Hangzhou) Private
Accounts
Equity Fund 181.50 9.08
receivable
Management Co.,
Ltd.
Accounts Hangzhou Xintu
81.66 4.08 81.72 4.09
receivable Technology Co., Ltd.
Accounts Ningbo Dahua
1,472,000.00 73,600.00
receivable Anbang Security
336
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Services Co., Ltd.
China Standard
Accounts
Intelligent Security 1,017,406.10 279,911.05
receivable
Technology Co., Ltd.
Hangzhou Xunwei
Accounts
Robotics Technology 850.00 42.50 6,800.00 340.00
receivable
Co., Ltd.
Company A and
Accounts
other companies 54,676,147.76
Prepaid
under its control
Zhejiang Leapmotor
Accounts
Technology Co., Ltd. 949,000.00
Prepaid
and its affiliates
China Mobile
Contract Communications
7,126,589.32 1,219,481.49
Assets Group Co., Ltd. and
its affiliates
Contract Ruicity Digital
481,393.33 24,069.67
Assets Technology Co., Ltd.
Ningbo Hualing
Venture Capital
Other
Investment 41,800,000.00 4,180,000.00
Receivables
Partnership (Limited
Partnership)
Zhoushan Weixin
Other Equity Investment
24,320,000.00 2,432,000.00
Receivables Partnership (Limited
Partnership)
Zhoushan Zhixin
Other Equity Investment
25,080,000.00 2,508,000.00
Receivables Partnership (Limited
Partnership)
China Mobile
Other Communications
1,523,267.68 401,163.38 748,826.97 62,441.35
Receivables Group Co., Ltd. and
its affiliates
(2) Payables
Unit: RMB
Item Name Related parties Closing balance Opening balance
China Mobile
Accounts Payable Communications Group 40,781,816.94 44,367,897.15
Co., Ltd. and its affiliates
Zhejiang Huachuang
Accounts Payable 4,578,103.79
Vision Technology Co., Ltd.
Hangzhou Nuojia
Accounts Payable 1,346,249.09 2,079,553.10
Technology Co., Ltd.
Zhejiang Huanuokang
Accounts Payable 586,402.95 1,678,007.32
Technology Co., Ltd.
Ruicity Digital Technology
Accounts Payable 200,000.00
Co., Ltd.
Zhejiang Lancable
Accounts Payable 175,176.90
Technology Co., Ltd.
Ningxia Shendun Security
Accounts Payable 350,375.00
Services Co., Ltd.
337
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Hangzhou Xianmai
Accounts Payable 4.95
Technology Co., Ltd.
Hangzhou Xunwei
Accounts Payable Robotics Technology Co., 11,406.18
Ltd.
Zhejiang Leapmotor
Accounts Payable Technology Co., Ltd. and 19,080.00 12,128,172.59
its affiliates
China Mobile
Contract liabilities Communications Group 7,772,167.32 592,504.29
Co., Ltd. and its affiliates
Zhejiang Leapmotor
Contract liabilities Technology Co., Ltd. and 491,074.23
its affiliates
Dezhou Shuzhi Information
Contract liabilities 105,185.84
Technology Co., Ltd.
Zhejiang Zhihua Internet of
Contract liabilities Things Technology Co., 2,830.19 2,830.19
Ltd.
Hangzhou Xintu
Contract liabilities 1,362.62 1,362.66
Technology Co., Ltd.
China Mobile
Other Payables Communications Group 1,070,000.00 720,000.00
Co., Ltd. and its affiliates
Zhejiang Leapmotor
Other Payables Technology Co., Ltd. and 173,520.00 173,520.00
its affiliates
Zhejiang Huanuokang
Other Payables 63,070.00 63,070.00
Technology Co., Ltd.
XIII. Share-based payment
1. Overview of share-based payment
Applicable □ Not applicable
Unit: RMB
Total amount of equity instruments granted by the 74,737,700 restricted stocks and 74,735,300 stock
Company in current period options
Total amount of equity instruments exercised by the
Company in current period
Total amount of equity instruments of the Company 36,127,260 shares of restricted stock
invalidated in current period
The range of the exercise prices of outstanding stock The exercise price of stock option is RMB 16.59 per
options issued by Company at the end of the period and share, and the remaining period of the contract is 42
the remaining contractual term months
The range of the exercise prices of other outstanding The granting price of restricted stock is RMB 8.16 per
equity instruments issued by Company at the end of the share, and the remaining term of the contract is 42
period and the remaining contractual term months
Other notes:
(1) Overview to Equity Incentive Plan
338
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Granting of restricted stocks and stock options in 2022
According to the "Proposal on the Company's Stock Option and Restricted Stock Incentive Plan in 2022 (Draft) and its
Abstracts” reviewed and approved at the 27th session of the 7th Board of Directors held by the Company on April 1,
2022 and approved at the 2021 Annual Shareholders' General Meeting held on May 16, 2022, the Company granted
74.864 million restricted stocks and 74.864 million stock options under its equity incentive plan.
After review at the 32nd session of the 7th Board of Directors held on June 27, 2022, the Company granted the
restricted stocks and stock options on the granting date of June 27, 2022. The Company actually granted 74,737,700
restricted stocks to 4,249 senior managers, other managers and key business personnel on the granting date of June
27, 2022 at the granting price of RMB 8.16; and granted 74,735,300.00 stock options on the granting date of June 27,
2022 at the granting price of RMB 16.59.
The validity period, lock-up period and unlocking period of the equity incentive plan are as follows: the validity period of
the restricted stock incentive plan is from the date of registration of the grant of the restricted stocks to the date of
unlocking or repurchase and cancellation of all the restricted stocks granted to the incentive objects, which shall be no
longer than 48 months. The restricted stocks granted shall be unlocked in three phases upon expiry of a 12-month
period from the date of registration of the grant, and the percentage of restricted stocks unlocked in these phases shall
be 40%, 30% and 30%, respectively.
The unlocking performance conditions are as follows:
Unlocking time Period of unlocking Performance conditions
It starts from the first trading
date upon expiry of the 12-
Based on the operating revenue in 2021,
month period from the date of
the annual revenue growth rate in 2022
registration of the grant and
Unlocking condition for the first time was not less than 16%; or based on the net
ends on the last trading date
profit in 2021, the net profit growth rate in
within the 24-month period from
2022 was not less than 16%;
the date of registration of the
grant
It starts from the first trading
date upon expiry of the 24-
Based on the operating revenue in 2021,
month period from the date of
the annual revenue growth rate in 2023 is
registration of the grant and
Unlocking condition for the second time not less than 34%; or based on the net
ends on the last trading date
profit in 2021, the net profit growth rate in
within the 36-month period from
2023 is not less than 34%
the date of registration of the
grant
It starts from the first trading
date upon expiry of the 36-
Based on the operating revenue in 2021,
month period from the date of
the annual revenue growth rate in 2024 will
registration of the grant and
Unlocking condition for the third time be not less than 56%; or based on the net
ends on the last trading date
profit in 2021, the net profit growth rate in
within the 48-month period from
2024 will be not less than 56%
the date of registration of the
grant
(2) The employees of the Company and its subsidiaries hold the equity of the subsidiary HuaRay Technology through
capital increase, direct or indirect equity transfers. According to the fair value of the investors recently introduced by
the subsidiary Huaray Technology, the confirmed share-based payment fee is RMB 171,491,932.01.
(3) The employees of the Company and its subsidiaries hold the equity of Zhejiang Huachuang Vision Technology Co.,
Ltd. through capital increase, direct or indirect equity transfers. According to the fair value of the investors recently
339
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
introduced by Zhejiang Huachuang Vision Technology Co., Ltd., the confirmed share-based payment fee is RMB
17,969,750.64.
2. Situation of equity-settled share-based payment
Applicable □ Not applicable
Unit: RMB
The fair value of the restricted stocks shall be determined
based on the stock price and the grant cost of the stocks
The method for determining the fair value of equity or stock price of the most recent external investor entry
instruments on the day of granting as at the grant date, while the fair value of the stock
options shall be determined under the Black-Scholes
Model
The basis for determining the amount of exercisable Estimated according to equity instruments held by the
equity instruments employees
Reason for the significant difference between the
N/A
estimation of current period and the previous period
The accumulated amount of equity-settled share-based
268,081,796.37
payment counted into the capital reserve
Amount of equity-settled share-based payment confirmed
285,817,406.71
in current period
Other notes:
(1) The amount of employee service that the Company received in exchange by equity payments in this period was
RMB 285,817,406.71. Other capital reserve was increased by RMB 153,001,194.59. Share premium was increased by
RMB 132,816,212.12.
(2) In the equity-settled share-based payment of the Company in current period, minority shareholders enjoy a portion
of RMB 86,864,589.02, which reduces other capital reserves by RMB 20,285,209.38 and share premium by RMB
66,579,379.64.
3. Situation of cash-settled share-based payment
□ Applicable Not applicable
4. Modification and termination of share-based payment
N/A
XIV. Commitments and contingencies
1. Significant commitments
Important commitments on the balance sheet day
As of December 31, 2022, the Company's pledge information was as follows:
340
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(1) On August 19, 2016, the subsidiary Xinjiang Dahua Zhixin Information Technology LLC pledged its future accounts
receivable amounting to RMB 351,064,980.00 incurred from the available service fee under the Franchise Agreement
for the Shihezi "Safe Shicheng" PPP Project, and signed the Fixed Assets Loan Contract (total contract amount: RMB
230,000,000.00, contract No.: 2016-01) with Shihezi Sub-Branch of the Construction Bank of China, to provide a
guarantee for the loan (term of borrowing: from August, 2016 to August, 2027, loan contract No.: 2016-01) of Xinjiang
Dahua Zhixin Information Technology LLC amounting to RMB 230,000,000.00. As of December 31, 2022, the pledged
receivables amounted to RMB 148,418,241.21 (including the long-term receivable balance RMB 120,632,081.66, and
the balance of the non-current assets mature within one year RMB 27,786,159.55). The loan balance under the
guarantee contract was RMB 102,500,000.00 (where the long-term loan balance was RMB 77,000,000.00, and the
balance of non-current liabilities mature within one year was RMB 25,500,000.00).
(2) The Company and Hangzhou Branch of Zheshang Bank Co., Ltd. entered into the "Guarantee Contract for Pledge
of Asset Pool", with the number (33100000) Zheshang Asset Pool Quality (2022) No. 13331 (the contract term is from
July 6, 2022 to June 28, 2023), to provide a guarantee for the "Asset Pool Business Cooperation Agreement" signed
by the Company together with the subsidiary Zhejiang Dahua Vision Technology Co., Ltd., the subsidiary Zhejiang
Dahua System Engineering Co., Ltd., and Hangzhou Branch of Zheshang Bank Co., Ltd. The financing amount for the
fund's pledge pool cannot be more than RMB 2.5 billion.
Under the notes pool business, as of December 31, 2022, the Company had undue notes receivable of RMB
557,019,628.36 (where RMB 550,000,000.00 was related party notes receivable that should be included in the scope
of consolidation), the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. had undue notes receivable of RMB
514,195,449.97 (where RMB 100,000,000.00 was related party notes receivable that should be included in the scope
of consolidation), and the subsidiary Zhejiang Dahua System Engineering Co., Ltd. had undue notes receivable of
RMB 3,437,928.71. Under the pledge, the Company issued the bank acceptance bills in the amount of RMB
25,958,400.08, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank acceptance bills in the
amount of RMB 683,564,071.13, and the subsidiary Zhejiang Dahua System Engineering Co., Ltd. issued the bank
acceptance bills in the amount of RMB 717,937.90.
(3) The subsidiary Zhejiang Dahua Zhilian Co., Ltd. and Hangzhou Branch of Zheshang Bank Co., Ltd. entered into
the "Guarantee Contract for Pledge of Asset Pool", with the number (33100000) Zheshang Asset Pool Quality (2022)
No. 13592 (the contract term is from June 30, 2022 to June 28, 2023), to provide a guarantee for the "Asset Pool
Business Cooperation Agreement" signed by Zhejiang Dahua Zhilian Co., Ltd. together with Hangzhou Branch of
Zheshang Bank Co., Ltd. The financing amount for the fund pledge pool cannot be more than RMB 0.5 billion.
Under the notes pool business, as of December 31, 2022, RMB 374,823,475.97 of undue notes receivable (of which
RMB 184,067,974.00 was related party notes that should be included in the scope of the consolidated financial
statements) of the subsidiary Zhejiang Dahua Zhilian Co., Ltd. was pledged for the issuance of acceptance bills. Under
the pledge, the subsidiary Zhejiang Dahua Zhilian Co., Ltd. issued the bank acceptance bills in the amount of RMB
252,673,187.70.
(4) The Company and Hangzhou Branch of China Merchants Bank Co., Ltd. signed the "Credit Agreement for Notes
Pool Business" (No.: 571XY2022013930), which promised a special credit limit of RMB 1.5 billion for the notes pool,
and allocated the same limit to the subsidiary Zhejiang Dahua Vision Technology Co., Ltd., the subsidiary Zhejiang
Dahua System Engineering Co., Ltd., the subsidiary Hangzhou Huacheng Network Technology Co., Ltd., the
subsidiary Zhejiang Fengshi Technology Co., Ltd., the subsidiary Zhejiang Huafei Intelligent Technology Co., Ltd., the
subsidiary Zhejiang Huayixin Technology Co., Ltd., the subsidiary Zhejiang Huaxiao Technology Co., Ltd.,, the
subsidiary Zhejiang Huajian Technology Co., Ltd., the subsidiary Xi'an Dahua Zhilian Technology Co., Ltd., the
subsidiary Zhejiang Dahua Intelligent IoT Operation Service Co., Ltd., and the subsidiary Zhejiang Dahua Zhilian Co.,
Ltd.
341
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Under the notes pool business, the Company had undue notes receivable of RMB 104,100,040.95 as of December 31,
2022 (where RMB 100,000,000.00 was related party notes receivable that should be included in the scope of
consolidation), the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. had undue notes receivable of RMB
295,513,476.94 (where RMB 50,000,000.00 was related party notes receivable that should be included in the scope of
consolidation), the subsidiary Zhejiang Fengshi Technology Co., Ltd. had undue notes receivable of RMB
22,394,862.58 (where RMB 9,023,717.36 was related party notes receivable that should be included in the scope of
consolidation), the subsidiary Zhejiang Dahua System Engineering Co., Ltd. had undue notes receivable of RMB
8,126,447.52, the subsidiary Zhejiang Huafei Intelligent Technology Co., Ltd. had undue notes receivable of RMB
275,360.00, the subsidiary Zhejiang Huaxiao Technology Co., Ltd. had undue notes receivable of RMB 5,248,284.23,
the subsidiary Zhejiang Huajian Technology Co., Ltd. has undue notes receivable of RMB 609,457.00, and the
subsidiary Zhejiang Dahua Intelligent IoT Operation Service Co., Ltd. had undue notes receivable of RMB 764,000.00
pledged for issuing bank acceptance bills. Under the pledge, the Company issued the bank acceptance bills in the
amount of RMB 1,579,198.17, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank acceptance
bills in the amount of RMB 5,985,402.47, the subsidiary Hangzhou Huacheng Network Technology Co., Ltd. issued the
bank acceptance bills in the amount of RMB 163,043,563.67, the subsidiary Zhejiang Fengshi Technology Co., Ltd.
issued the bank acceptance bills in the amount of RMB 177,603,768.07, the subsidiary Zhejiang Huafei Intelligent
Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 151,226.77, the subsidiary Zhejiang
Huayixin Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 134,164.22, the subsidiary
Zhejiang Huajian Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 453,981.18, the
subsidiary Zhejiang Huaxiao Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 113,103.96,
the subsidiary Zhejiang Dahua Intelligent IoT Operation Service Co., Ltd. issued the bank acceptance bills in the
amount of RMB 64,697.07 and the subsidiary Zhejiang Zhilian Co., Ltd. issued the bank acceptance bills in the amount
of RMB 785,743.12.
(5) The subsidiary Zhejiang Dahua Vision Technology Co., Ltd. and Bank of Hangzhou Co., Ltd. entered into the
"Pledge Contract for Maximum Amount of Individual Asset Management" (No.:7514ATMG202100073, the contract
term is from May 26, 2021 to May 25, 2024), to provide a guarantee for the "Asset Management Service Agreement"
signed by the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. and Hangzhou Bank Co., Ltd. The credit limit of
the notes pool cannot be more than RMB 0.2 billion.
Under the notes pool business, as of December 31, 2022, RMB 64,241,087.49 of undue notes receivable of the
subsidiary Zhejiang Dahua Vision Technology Co., Ltd. were pledged for the issuance of acceptance bills. Under the
pledge, the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. issued the bank acceptance bills in the amount of
RMB 37,417,829.13.
(6) Under the Asset Pool Charge-off Agreement PPHJHYZCZ 20220801 No.001 made by and between the Company
and Ping An Bank Limited Hangzhou Branch, a special credit line of RMB 1 billion in note pool was granted and was
also allocated to the subsidiary Zhejiang Dahua Vision Technology Co., Ltd., the subsidiary Jiangsu Huaruipin
Technology Co., Ltd., the subsidiary Zhejiang Pixfra Technology Co., Ltd. and the subsidiary Changsha Dahua
Technology Co., Ltd.
Under the notes pool business, as of December 31, 2022, the Company had undue notes receivable of RMB
152,000,000.00 (where RMB 150,000,000.00 was related party notes receivable that should be included in the scope
of consolidation), the subsidiary Zhejiang Dahua Vision Technology Co., Ltd. had undue notes receivable of RMB
180,790,634.99 (where RMB 50,000,000.00 was related party notes receivable that should be included in the scope of
consolidation), and the subsidiary Jiangsu Huaruipin Technology Co., Ltd. had undue notes receivable of RMB
4,994,929.49 pledged for issuing bank acceptance bills. Under the pledge, the subsidiary Zhejiang Dahua Vision
Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 129,674,293.88, the subsidiary Jiangsu
342
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Huaruipin Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 10,679,526.35, the subsidiary
Zhejiang Pixfra Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB 1,214,717.10 and the
subsidiary Changsha Dahua Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB
4,839,243.21.
(7) The subsidiary Zhejiang HuaRay Technology Co., Ltd. and Hangzhou Branch of China Merchants Bank Co., Ltd.
entered into the "Credit Agreement for Notes Pool Business", agreeing on a credit limit of RMB 0.2 billion for notes
pool business.
Under the notes pool business, as of December 31, 2022, RMB 36,652,354.68 of undue notes receivable of the
subsidiary Zhejiang HuaRay Technology Co., Ltd. were pledged for the issuance of acceptance bills. Under the pledge,
the subsidiary Zhejiang HuaRay Technology Co., Ltd. issued the bank acceptance bills in the amount of RMB
36,156,377.94.
2. Contingencies
(1) Important contingent matters on the balance sheet day
No important contingent matters on the balance sheet day.
(2) No important contingent matter to be disclosed by the Company.
XV. Events after the Balance Sheet Date
1. Distribution of profits
Unit: RMB
Profits or dividends to be distributed 801,629,761.37
Profits or dividends reviewed and approved for releasing 801,629,761.37
Based on the latest total capital of 3,326,264,570 shares
of the Company, the Company will distribute RMB 2.41
(tax included) to all shareholders for every 10 shares,
with a total cash dividend of RMB 801,629,761.37, and
Profit Distribution Plan no bonus share will be given and no capitalization of
capital reserves. The undistributed profits will be carried
forward to the next year. The matter shall be implemented
after being deliberated and approved at the general
meeting of shareholders
2. Other events after the balance sheet date
(1) On February 17, 2023, the "Proposal on Proposed Increase of Capital by Some Senior Managers and Core
Employees of the Company to the Spin-off Subsidiaries and Related Transactions" was reviewed and approved at
the 39th session of the 7th Board of Directors. The Board of Directors agreed that some senior managers and core
employees of the Company increased the capital of RMB 6,049,190 to the holding subsidiary Zhejiang HuaRay
Technology Co., Ltd. (where the registered capital was increased by RMB 1,675,676 and the balance was included
in the capital reserves). 11 natural persons consisting of senior managers including Zhao Yuning, Zhu Jiantang, Xu
Zhicheng, Liu Ming, Wu Jian, Li Zhijie, Song Ke and Xu Qiaofen, the supervisor Zheng Jieping and core employees
343
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
including Hao Chunshan and Chenqiang increased directly the capital by RMB 4,839,353 in total, and the
management team and core employees of the Company increased the capital by RMB 1,209,837 in total through
holding shares in the platforms including Hangzhou Jurui Lingyi Enterprise Management Partnership (Limited
Partnership) and Hangzhou Jurui Lingsan Enterprise Management Partnership (Limited Partnership). After this
capital increase, the equity of the Company in HuaRay Technology is changed from 42.23% to 41.09%, and
HuaRay Technology is still a holding subsidiary of the Company covered by the Company’s consolidated
statements.
(2) On March 17, 2023, the "Proposal on Capital Increase and Share Expansion in the Holding Subsidiary to
Introduce Investors and Related Transactions" was reviewed and approved at the 40th session of the 7th Board of
Directors held by the Company. The Board of Directors agreed that the holding subsidiary of the Company HuaRay
Technology introduced through capital increase and share expansion a total of 8 investors (hereinafter referred to
as “Investors”) including Yibin Lvneng Equity Investment Partnership (Limited Partnership), Hefei Guoxuan High-
tech Power Energy Co., Ltd. and Zhu Jiangming. The Investors will increase the monetary capital of HuaRay
Technology by RMB 260,000,061 (where RMB 8,934,710 is taken as the new registered capital and the balance is
included in the capital reserves), and obtain a total of 12.58% equity in HuaRay Technology after the capital
increase. After this capital increase, the equity of the Company in HuaRay Technology is changed from 41.09% to
35.92%, and HuaRay Technology is still a holding subsidiary of the Company covered by the Company’s
consolidated statements.
(3) The Company applied to China Securities Regulatory Commission ("CSRC") for issuance of shares to
specific objects in 2021 On April 18, 2022, the application of the Company for issuance of shares to specific objects
was reviewed approved by the Issuance Examination Committee of the China Securities Regulatory Commission.
On April 24, 2022, CSRC issued the "Reply on Approving the Non-public Issuance of Shares by Zhejiang Dahua
Technology Co., Ltd.” (Zheng Jian License [2022] No. 853) to approve the application of the Company. In March
2023, the Company has issued 293,103,400 shares to specific objects, and received a net raised fund of RMB
5,089,832,584.72, including the increased registered capital of RMB 293,103,400.00 and the share premium of
RMB 4,796,729,184.72. The above fund raising business has been verified through Xin Kuai Shi Bao Zi [2023] No.
ZF10231 Verification Report issued by BDO China Shu Lun Pan CPAs (special general partnership).
XVI. Other Significant Events
1. Subsection information
(1) Basis for determining the reporting subsection and the accounting policy
The Company determines the operation subsection based on internal organization structure, management
requirements, internal reporting system, etc. The Company has only one operational subsection, namely the R&D,
production, and sales of intelligent IoT products. The accounting policy of the reporting subsection is consistent with
that of the Company.
(2) Financial information of the reporting subsection
Regional subsection
Unit: RMB
344
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Item Operating revenue Operating Cost
Domestic 15,799,558,052.51 10,555,743,715.88
Overseas 14,765,811,960.13 8,434,053,955.04
Total 30,565,370,012.64 18,989,797,670.92
Product subsection
Unit: RMB
Item Operating revenue Operating Cost
Smart IoT Products and
25,187,418,289.20 15,106,909,590.16
Solutions
Including: Software Business 1,478,048,030.19 457,050,171.52
Innovated Business 4,116,225,405.96 2,759,497,499.20
Others 1,261,726,317.48 1,123,390,581.56
Total 30,565,370,012.64 18,989,797,670.92
XVII. Notes to Main Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1) Categorical disclosure of accounts receivable
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Categor
y Accrued Book Accrued Book
Percent value Percent value
Amount Amount proporti Amount Amount proporti
age age
on on
Account
s
receiva
bles
with the
bad
debt 38,693, 38,693, 100.00 32,146, 32,146, 100.00
0.78% 0.60%
provisio 240.50 240.50 % 763.01 763.01 %
n
accrued
based
on
single
item
Inclu
ding:
Account
s
receiva
4,933,4 4,837,4 5,328,3 5,235,7
bles 96,000, 92,669,
79,139. 99.22% 1.95% 78,515. 87,755. 99.40% 1.74% 18,728.
with the 623.96 027.03
61 65 87 84
bad
debt
provisio
345
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
n
accrued
based
on
combin
ations
Inclu
ding:
Portfoli
o 1:
3,990,0 3,990,0 4,399,8 4,399,8
Related
54,640. 80.25% 54,640. 49,905. 82.08% 49,905.
Parties
72 72 57 57
Portfoli
o
Portfoli
o 2:
Aging
943,424 96,000, 847,423 928,537 92,669, 835,868
Analysi 18.97% 10.18% 17.32% 9.98%
,498.89 623.96 ,874.93 ,850.30 027.03 ,823.27
s
Portfoli
o
4,972,1 4,837,4 5,360,5 5,235,7
100.00 134,693 100.00 124,815
Total 72,380. 78,515. 34,518. 18,728.
% ,864.46 % ,790.04
11 65 88 84
Individual provision for bad debts: RMB 38,693,240.50
Unit: RMB
Closing balance
Name Reason for making
Book balance Bad debt provision Accrued proportion
bad debt provision
Expected to be
Customer 1 38,693,240.50 38,693,240.50 100.00%
unable to recover
Total 38,693,240.50 38,693,240.50
A combination of provision for bad debts: RMB 96,000,623.96
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Accrued proportion
Within 1 Year 634,537,826.92 31,726,891.34 5.00%
1 to 2 years 214,701,397.29 21,470,139.73 10.00%
2 to 3 years 61,777,024.59 18,533,107.38 30.00%
3 to 4 years 13,583,118.42 6,791,559.21 50.00%
4 to 5 years 6,731,026.85 5,384,821.48 80.00%
5 years or above 12,094,104.82 12,094,104.82 100.00%
Total 943,424,498.89 96,000,623.96
Please refer to the disclosing methods of other receivables for the information disclosure of bad debts provisions, if the
bad debt provisions of accounts receivable are made according to the general model of expected credit losses:
□ Applicable Not applicable
Disclosure by age
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 4,435,372,460.31
346
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
1 to 2 years 288,995,411.49
2 to 3 years 158,183,517.59
3 years or above 89,620,990.72
3 to 4 years 53,215,275.56
4 to 5 years 15,437,090.50
5 years or above 20,968,624.66
Total 4,972,172,380.11
(2) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Written Off Others balance
Reversed
Bad debt 124,815,790.0 134,693,864.4
25,469,893.93 15,591,819.51
provision 4 6
124,815,790.0 134,693,864.4
Total 25,469,893.93 15,591,819.51
4 6
(3) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Accounts receivable actually written off 15,591,819.51
(4) Accounts receivable of the top five closing balances collected by debtors
The accounts receivable of the top five balances collected by the debtors at the end of the period was summed up to
RMB 3,822,823,956.92, accounting for 76.88% of the total balance at the end of the period of accounts receivable.
The balance at the end of the period for bad debt provision accrued was RMB 10,422,055.90 accordingly.
(5) The amount of assets and liabilities generated due to transferred receivables that the
Company still keeps recourse or retains part of corresponding rights or interests
The amount of assets that the
The amount of liabilities that the
Company still keeps recourse
Company still keeps recourse or
Item or retains part of
retains part of corresponding rights
corresponding rights or
or interests
interests
Supply chain finance not derecognized 3,632,141.60 3,632,141.60
Total 3,632,141.60 3,632,141.60
347
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
(6) Accounts receivable derecognized due to the transfer of financial assets
In accordance with the non-recourse accounts receivables purchase agreement signed between the Company and
Sinosure Commercial Factoring (Shenzhen) Co., Ltd. in this period, the Company transferred the accounts receivables
of RMB 174,585.85 to Sinosure Commercial Factoring (Shenzhen) Co., Ltd. The amount of accounts receivables was
derecognised after the transfer.
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other Receivables 13,025,162,686.64 13,227,344,584.64
Total 13,025,162,686.64 13,227,344,584.64
(1) Other receivables
1) Other receivables categorized by the nature of the funds
Unit: RMB
Nature of the funds Closing balance Opening balance
Deposits 42,975,357.36 43,647,007.12
Prepaid or advance expense 42,425,892.12 35,796,731.49
Equity Transfer Fund 228,000,000.00
Employee home loan 84,743,250.00 85,353,302.20
Incomings and outgoings 12,872,094,567.04 12,878,290,499.25
Others 14,709,388.90 8,043,517.60
Total 13,056,948,455.42 13,279,131,057.66
2) Provision for bad debts
Unit: RMB
Phase One Phase Two Phase Three
Expected credit Expected credit
Bad debt provision Expected credit Total
losses for the entire losses for the entire
losses in the next 12
extension (without extension (with credit
months
credit impairment) impairment)
Balance on January
46,606,805.15 4,544,002.82 635,665.05 51,786,473.02
1, 2021
Balance in the
Current Period on
January 1, 2022
--Transfer to phase
-525,537.48 525,537.48
two
--Transfer to phase
-965.00 -7,864.00 8,829.00
three
Provisions of this
1,088,521.40 1,088,521.40
period
Reversals in this 20,817,791.83 103,334.43 20,921,126.26
348
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
period
Write off in this
37,098.38 30,001.00 101,000.00 168,099.38
period
Balance as of
25,225,412.46 6,120,196.70 440,159.62 31,785,768.78
December 31, 2022
Book balance changes with significant changes in loss provision in the current period
□ Applicable Not applicable
Disclosure by age
Unit: RMB
Aging Book balance
Within 1 year (including 1 year) 11,740,672,677.06
1 to 2 years 880,224,982.17
2 to 3 years 190,441,001.10
3 years or above 245,609,795.09
3 to 4 years 57,005,895.73
4 to 5 years 185,039,868.32
5 years or above 3,564,031.04
Total 13,056,948,455.42
3) Provision for bad debts accrued, recovered or reversed in this period
Provision for bad debts in the current period:
Unit: RMB
Amount of Changes in the Current Period
Opening Closing
Category Recovered or
balance Accrued Written Off Others balance
Reversed
Bad debt
51,786,473.02 1,088,521.40 20,921,126.26 168,099.38 31,785,768.78
provision
Total 51,786,473.02 1,088,521.40 20,921,126.26 168,099.38 31,785,768.78
4) Accounts receivable actually written off in this period
Unit: RMB
Item Write-off amount
Other accounts receivable actually written off 168,099.38
5) Other receivables of the top five closing balances collected by debtors
Unit: RMB
As a percentage
Bad debt
of total other
Name of Nature of provision at
Closing balance Aging receivables at
Unit the funds the end of
the end of the
the period
period
349
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Incomings RMB 7,545,461,432.97 within 1
Company
and 7,545,484,353.52 year, RMB 21,740.16 for 1-2 57.79%
1
outgoings years, RMB 1,180.39 for 3-4 years
Incomings
Company
and 3,181,344,450.56 Within 1 year 24.37%
2
outgoings
RMB 636,388,243.83 within 1
Incomings
Company year, RMB 682,719,801.86 for 1-2
and 1,356,402,945.68 10.39%
3 years, RMB 37,294,899.99 for 2-3
outgoings
years
Incomings
Company RMB 73,400,000.00 within 1 year,
and 208,212,831.00 1.59%
4 RMB 134,812,831.00 for 1-2 years
outgoings
RMB 10,170,475.10 within 1 year,
Incomings RMB 8,757,718.98 for 1-2 years,
Company
and 196,214,519.41 RMB 8,822,249.05 for 2-3 years, 1.50%
5
outgoings RMB 9,052,406.35 for 3-4 years,
RMB 159,411,669.93 for 4-5 years
Total 12,487,659,100.17 95.64%
6) There are no other accounts receivable related to government subsidies.
7) There are no other accounts receivable derecognised due to transfer of financial assets.
8) There are no assets and liabilities arising from other transfer of account receivables and
continued involvement.
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Provision Provision
Item for for
Book balance Book value Book balance Book value
impairmen impairmen
t t
Investment
in 4,651,487,417.0 4,651,487,417.0 4,496,090,820.4 4,496,090,820.4
subsidiarie 5 5 2 2
s
Investment
in affiliates 723,496.3
831,485,368.09 830,761,871.70 798,402,086.36 798,402,086.36
and joint 9
ventures
5,482,972,785.1 723,496.3 5,482,249,288.7 5,294,492,906.7 5,294,492,906.7
Total
4 9 5 8 8
(1) Investment in subsidiaries
Unit: RMB
The Opening Decrease/Increase in the current period Closing Closing
invested balance (book Investments Investment Provisi Other balance (book balance of
entity value) increased decreased on for s value) provision for
350
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
impair decline in
ment value
accrue
d
Zhejiang
Dahua
System 529,327,934.87 5,685,195.55 535,013,130.42
Engineering
Co., Ltd.
Zhejiang
Dahua
Security
Network 27,167,117.78 74,982,959.48 102,150,077.26
Operation
Service Co.,
Ltd.
Zhejiang
Dahua
Ju'an 5,100,000.00 5,100,000.00
Technology
Co., Ltd.
Guangxi
Dahua
Information 6,125,103.44 34,444.29 6,159,547.73
Technology
Co., Ltd.
Dahua
Technology
666,155,168.00 2,785,944.00 668,941,112.00
(HK)
Limited
Zhejiang
Dahua
1,291,819,901. 1,295,016,312.
Vision 3,196,410.87
23 10
Technology
Co., Ltd.
Guangxi
Dahua
Security 20,002,580.76 20,002,580.76
Service Co.,
Ltd.
Hangzhou
Xiaohua
5,566,322.65 285,110.82 5,851,433.47
Technology
CO., LTD.
Zhejiang
Dahua 1,000,878,603. 1,001,657,517.
778,914.30
Zhilian Co., 29 59
Ltd.
Zhejiang
Dahua
Investment 62,175,000.00 62,175,000.00
Manageme
nt Co., Ltd.
Guangxi
Dahua
71,222,114.85 40,150.00 71,262,264.85
Zhicheng
Co., Ltd.
351
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Hangzhou
Huacheng
Network 28,640,671.21 1,462,143.14 30,102,814.35
Technology
Co., Ltd.
Zhejiang
HuaRay
30,924,317.09 2,995,431.78 33,919,748.87
Technology
Co., Ltd.
Hangzhou
Fuyang
Hua'ao 5,100,000.00 10,520.63 5,110,520.63
Technology
Co., Ltd.
Zhejiang
Huafei
Intelligent 25,009,108.90 610,200.44 25,619,309.34
Technology
CO., LTD.
Zhejiang
Huachuang
29,140,163.5
Vision 29,140,163.54
4
Technology
Co., Ltd.
Guizhou
Huayi
Shixin 1,800,000.00 1,800,000.00
Technology
Co., Ltd.
Zhejiang
Fengshi
9,005,362.29 23,613.09 9,028,975.38
Technology
Co., Ltd.
Dahua
Technology
8,102,000.00 8,102,000.00
Holdings
Limited
Zhejiang
Huaxiao
37,718,778.03 598,627.34 38,317,405.37
Technology
Co., Ltd.
Xi'an Dahua
Zhilian
100,143,631.14 575,167.57 100,718,798.71
Technology
Co., Ltd.
Jiangsu
Huaruipin
17,857,697.14 69,514.47 17,927,211.61
Technology
Co. Ltd.
Beijing
Huayue
Shangchen
g
10,487,121.08 188,004.65 10,675,125.73
Information
Technology
Service Co.,
Ltd.
352
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Zhejiang
Dahua
Jinzhi 60,000,000.00 60,000,000.00
Technology
Co., Ltd.
Shanghai
Huashang
Chengyue
Information 1,518,160.86 413,238.07 1,931,398.93
Technology
Service Co.,
Ltd.
Sichuan
Dahua
Guangxun
Photoelectri 5,530,000.00 297,247.19 5,827,247.19
c
Technology
Co., Ltd.
Zhejiang
Zhoushan
Digital
Developme 17,640,000.00 17,640,000.00
nt
Operation
Co. Ltd.
Guangxi
Dahua
30,000,000.00 30,000,000.00
Technology
Co., Ltd.
Yunnan
Zhili
4,500,000.00 4,500,000.00
Technology
Co., Ltd
Zhejiang
Huayixin
25,603,273.28 15,776,984.82 41,380,258.10
Technology
Co., Ltd.
Zhejiang
Huaruijie
51,198,299.94 1,150,978.75 52,349,278.69
Technology
Co., Ltd.
Chengdu
Dahua
Zhilian
50,035,193.18 310,839.39 50,346,032.57
Information
Technology
Co., Ltd.
Chengdu
Dahua
Zhian
Information 100,000,000.00 100,000,000.00
Technology
Service Co.,
Ltd.
Chengdu
5,500,000.00 300,000.00 5,800,000.00
Huishan
353
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Smart
Network
Technology
Co., Ltd.
Zhejiang
Huajian
13,540,903.07 9,979,899.00 23,520,802.07
Technology
Co., Ltd.
Xinjiang
Dahua
Zhixin
2,055.08 2,055.08
Information
Technology
Co., Ltd.
Guangxi
Huacheng
95,025.00 28,702.03 123,727.03
Technology
Co., Ltd.
Hangzhou
Huacheng
386,348.72 1,451,798.47 1,838,147.19
Software
Co., Ltd.
Dahua
Technology 72,864.00 72,864.00
Canada Inc.
Chengdu
Dahua
Zhishu
Information 10,000,000.00 10,000,000.00
Technology
Service Co.,
Ltd.
Zhengzhou
Dahua
Zhian
30,000,000.00 30,000,000.00
Information
Technology
Co., Ltd.
Dahua
Technology
1,000,000.00 1,000,000.00
Internationa
l Pte. Ltd.
Changsha
Dahua
100,000,000.00 9,858.24 100,009,858.24
Technology
Co., Ltd.
Zhejiang
Pixfra
50,982,181.36 50,982,181.36
Technology
Co., Ltd.
Zhejiang
Dahua
Intelligent
IoT 15,285,360.32 15,285,360.32
Operation
Service Co.,
Ltd.
354
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Henan
Dahua
Zhilian
54,567.30 54,567.30
Information
Technology
Co., Ltd.
4,496,090,820. 190,364,007.3 34,967,410.7 4,651,487,417.
Total
42 6 3 05
(2) Investment in affiliates and joint ventures
Unit: RMB
Decrease/Increase in the current period
Invest
ment Closin
profit Adjust Cash g
Openin Closin
and ment dividen Provisi balanc
Name g g
Invest Invest loss on Other ds or on for e of
of balanc balanc
ments ment recogn other chang profit impair provisi
Investe e Others e
increas decrea ized compr es in declar ment on for
es (book (book
ed sed under ehensi equity ed to accrue decline
value) value)
the ve distribu d in
equity income te value
metho
d
I. Joint ventures
II. Affiliates
Zhejia
ng
Leapm -
643,07 447,80 650,47
otor 440,41
6,870. 6,326. 0,259.
Techno 2,937.
51 37 18
logy 70
Co.,
Ltd.
Hangz
hou
Juhua
nyan
Inform 723,49 723,49 723,49
ation 6.39 6.39 6.39
Techno
logy
Co.,
Ltd.
Ruicity
Digital
70,394 71,175
Techno 781,20
,509.1 ,718.8
logy 9.66
5 1
Co.,
Ltd.
Shuzi
-
Dongy 2,205, 1,776,
428,62
ang 415.98 793.16
2.82
Techno
355
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
logy
Operat
ion
Co.,
Ltd.
Zhejia
ng
Huanu
15,113 -
okang 8,926,
,578.1 6,187,
Techno 288.85
0 289.25
logy
Co.,
Ltd.
Ningbo
Huaya
n
Chuan
gxi
Ventur
e
62,135 - 63,054
Capital 1,233,
,559.9 313,83 ,968.0
Invest 247.18
3 9.08 3
ment
Partne
rship
(Limite
d
Partne
rship)
Dezho
u
Shuzhi
Inform
3,392, 14,863 3,407,
ation
656.30 .33 519.63
Techno
logy
Co.,
Ltd.
Sichua
n
Hengji
Anhua
Interne -
1,360, 1,291,
t of 68,148
000.00 851.54
Things .46
Techno
logy
Co.,
Ltd.
Zhejia
ng
Huach
uang - - 55,732 41,361
Vision 8,770, 5,600, ,879.6 ,554.5
Techno 336.38 988.77 6 1
logy
Co.,
Ltd.
356
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
-
798,40 10,703 443,43 55,732 830,76
Subtot 455,38 723,49 723,49
2,086. ,082.0 8,584. ,879.6 1,871.
al 5,100. 6.39 6.39
36 1 78 6 70
70
-
798,40 10,703 443,43 55,732 830,76
455,38 723,49 723,49
Total 2,086. ,082.0 8,584. ,879.6 1,871.
5,100. 6.39 6.39
36 1 78 6 70
70
4. Operating revenue and operating cost
Unit: RMB
Amount Occurred in the Current Period Amount Occurred in the Previous Period
Item
Income Cost Income Cost
Main Business 8,401,027,073.37 1,188,553,267.61 9,704,836,761.33 1,250,287,354.08
Other businesses 57,417,038.00 41,482,814.03 38,380,402.19 27,935,289.59
Total 8,458,444,111.37 1,230,036,081.64 9,743,217,163.52 1,278,222,643.67
5. Investment income
Unit: RMB
Amount Occurred in the Current Amount Occurred in the Previous
Item
Period Period
Long-term equity investment income
-455,385,100.70 -303,537,703.31
measured by equity method
Investment income from disposal of
147,553,843.81 281,454.95
long-term equity investment
Investment Income from Disposal
8,493,150.68
Trading Financial Assets
Investment income on other non-
current financial assets during the 9,173,028.68 22,409,109.76
holding period
Investment income from national debt
791,371.25 642,899.15
reverse repurchase
Profits from recognition termination of
-4,157,038.98
financial assets
Gain on debt restructuring -170,120.71
Total -302,194,016.65 -271,711,088.77
XVIII. Supplementary Information
1. Breakdown of non-recurring gains and losses for this period
Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains and losses from disposal of
694,299,856.79
non-current assets
357
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
The government subsidies included
in the current profits and losses
(excluding the government subsidies
closely related to regular businesses 245,885,438.60
of the Company, in line with national
policies, and consecutively received
by a standard quota or quantity)
Gains or losses from investment or
asset management entrusted to -40,735,247.48
others
Gains or losses from debt
-414,996.80
restructuring
Profits and losses resulting from the
changes in fair value for holding held-
for-trading financial assets and held-
for-trading financial liabilities, and
investment income from disposal of
held-for-trading financial assets, -14,286,907.57
held-for-trading financial liabilities,
and financial assets available for
sale, excluding the effective hedging
businesses related to the regular
business operation of the Company
Reversal of the receivables
depreciation reserves for separate 2,151,340.72
impairment test
Non-Operating Revenue and
5,535,034.55
expenses other than the above
Other gains and losses items that fit
the definition of non-recurring gains -134,254,380.85
and losses
Less: Impact of income tax 49,067,502.67
Impact of minority equity -34,690,941.34
Total 743,803,576.63 --
Other gains or losses that fit the definition of non-recurring gains or losses:
□ Applicable Not applicable
The Company has no other gains or losses that fit the definition of non-recurring gains or losses.
Note for the definition of non-recurring gains and losses listed in the No. 1 Explanatory Announcement on Information
Disclosure for Companies Issuance Their Securities to the Public - Non-recurring gains and losses, as recurring gains
and losses.
□ Applicable Not applicable
2. Return on net assets and earnings per share
Earnings per share
Profit for the reporting
Weighted Average ROE Basic Earnings per Share Diluted Earnings per Share
period
(RMB/Share) (RMB/Share)
Net profit attributable to
common shareholders of 9.49% 0.79 0.79
the Company
358
2022 Annual Report of Zhejiang Dahua Technology Co., Ltd.
Net profit attributable to
common shareholders of
the Company after 6.45% 0.53 0.53
deducting non-recurring
gains and losses
3. Differences in accounting data between domestic and overseas accounting standards
(1) Differences of net profits and net assets in the financial reports disclosed according to the
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
(2) Differences of net profits and net assets in the financial reports disclosed according to the
overseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
Zhejiang Dahua Technology Co., Ltd.
Legal representative: Fu Liquan
April 28, 2023
359
