Goertek Inc.
Annual Report 2023
March 2024
Annual Report 2023Section Ⅰ Important Notes, Contents and Interpretations
The Board of Directors, the Supervisory Board, directors, supervisors and senior managementof the Company guarantee that the information presented in this report shall be together bewholly liable for the truthfulness, accuracy and completeness of its contents and free from falsestatement, misrepresentations and material omissions, and will undertake individual and jointlegal liabilities.Jiang Bin, the person in charge of the Company, and Li Yongzhi, the person in charge ofaccounting and the accounting department (accounting supervisor) guarantee that the financialreport in this annual report is authentic, accurate and complete. All directors have attended theboard meeting to review the annual report.The future plans and some forward-looking statements mentioned herein are planned matterswhich shall not constitute a substantial commitment of the Company to investors. Bothinvestors and relevant persons should understand the differences among plan, forecast andcommitment. Please pay attention to investment risks.The Company faces the risks in market, operation and management. Investors are kindlyreminded to pay attention to possible investment risks. For details, refer to "Section IIIManagement Discussion and Analysis, XI Outlook for the Future Development of theCompany" in this report.The profit distribution proposal considered and approved by the Board of Directors is as follows:
based on the total share capital registered on the record date of equity distribution minus therepurchased shares in the Company's specific securities repurchase account, the Company willdistribute cash dividend of RMB 1.00 (tax inclusive) for per 10 shares to all the shareholders.There will be no bonus shares or conversion of capital surplus into share capital.
Contents
Section Ⅰ Important Notes, Contents and Interpretations ...... 2
Section Ⅱ Company Information and Financial Highlights ...... 7
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 41
Section V Environmental and Social Responsibilities ...... 69
Section VI Important Matters ...... 72
Section VII Share Changes and Shareholder Information ...... 83
Section VIII Preference Shares ...... 91
Section IX Bonds ...... 92
Section X Financial Report ...... 93
Directory of Reference Files
(1) Financial statements with signatures and seals of the legal representative, the person in charge ofaccounting and the person in charge of accounting department (accounting supervisor);
(2) The originals of 2023 annual report signed by the legal representative of the Company;
(3) The originals of the auditor's report with the seal of accounting firm and the signature and sealof the certified public accountants;
(4) The originals of all company documents and announcements publicly disclosed in mediadesignated by China Securities Regulatory Commission (CSRC) during the reporting period.
Interpretations
Terms | Refers to | Content of interpretation |
Company, the Company, Goertek Inc. | Refers to | Goertek Inc. |
Goertek Group | Refers to | Goertek Group Co., Ltd., Controlling shareholder of the Company |
Goertek Microelectronics | Refers to | Goertek Microelectronics Inc. controlled subsidiary of the Company |
Goertek Optical | Refers to | Goertek Optical Technology Co., Ltd, controlled subsidiary of the Company |
ODM | Refers to | Original Design and Manufacturing |
JDM | Refers to | Joint Design and Manufacturing |
Micro speaker | Refers to | The micro electro-acoustic components that transform electrical signal into acoustic signal, generate driving force through the magnetic line cutting of voice coil in magnetic field, to drive the diaphragm vibration, which then pushes the air for sounding. Compared with the micro receiver, it's characterized by higher power, wide frequency response and high fidelity, which is generally used for playing the sound. |
MEMS | Refers to | Based on micron/nano technology, Micro electro mechanical system (MEMS) is a technology developed for designing, processing, manufacturing, measuring and controlling micron/nano materials. MEMS can integrate mechanical components, optical system and electric control system of driving components into a whole unit of microsystem, featured with miniaturization, intelligence, multi-function, high integration and being suitable for mass production. |
Speaker module | Refers to | The acoustic component composed of one or several micro speakers and other electronic devices, which are assembled together through an injection molded housing. |
Smart wearable devices | Refers to | A portable device that can be worn or carried directly, or integrated into the user's clothes or accessories. |
Virtual Reality/VR | Refers to | A computer simulation system that can generate a simulation environment, where users can experience virtual situations. |
Mixed reality/MR | Refers to | A new visual environment that can integrate the real and virtual situations, where users, the real world, and virtual digital objects can coexist and interact in real time. |
Augmented Reality/AR | Refers to | A technology that skillfully integrates virtual information with the real world. By making extensive use of multimedia, 3D modeling, real-time tracking and registration, intelligent interaction, sensing and other technical means, it applies the computer-generated text, images, 3D models, music, video and other virtual information to the real world after simulation. These two kinds of information complement each other to achieve "augmentation" of the real world. |
Smart wireless earphones | Refers to | The new types of smart wireless earphones represented by TWS (True Wireless Stereo) earphones connect the left and right earphones with smart phones or other terminal devices through Bluetooth technology to form an independent stereo system, which realizes touch control, voice control, body information collection and other functions by adding various sensors. |
Microsystem module | Refers to | Also known as SiP (System in Package) packaging module at the system level, it integrates multiple chips and passive components into the same package through advanced packaging technologies such as 3D packaging, to form a module with whole or main functions of an electronic system, so as to realize the optimal combination of performance, volume, weight and other indicators. It is a versatile next-generation microelectronics technology. |
Sensor | Refers to | A detection device that is capable of feeling the measured information, and able to transform the information into electrical signals or other required forms of |
information for output based on certain rules, in order to meet the requirements of information transmission, processing, storage, display, recording and control. | ||
Micro-nano optical components | Refers to | Optical components based on micro-structured materials. They offer significant advantages over traditional optical components in terms of making optical systems lighter, more integrated, and more capable of using intelligent sensing technology. |
3D sensing | Refers to | The process of obtaining three-dimensional information about an object by using light, sound, electromagnetism, or other means to contact the surface of the object. The measured information is then converted into an electrical signal or other desired form of information output according to a certain rule. |
GPS | Refers to | Goertek Production System. It is a comprehensive operation system that integrates automation, information communication, artificial intelligence, green and low-carbon technologies. It aims to promote manufacturing transformation and upgrading, optimize the management and cooperation mode of the whole chain, and improve the core competitiveness of the company and the happiness of employees. |
The Company Law | Refers to | Company Law of the People's Republic of China |
The Securities Law | Refers to | Securities Law of the People's Republic of China |
Articles of Association | Refers to | Articles of Association of Goertek Inc. |
CSRC | Refers to | China Securities Regulatory Commission |
RMB, RMB 10,000, RMB 100,000,000 | Refers to | yuan (RMB), ten thousand yuan (RMB), hundred million yuan (RMB) |
Reporting period | Refers to | January 1, 2023 to December 31, 2023 |
Notes:
1.In this report, any difference between the sum of some amounts and the sum of detailed items is due to rounding.
2.This report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between thetwo versions, the Chinese version shall prevail.
Section Ⅱ Company Information and Financial Highlights
I. Company Information
Stock abbreviation | Goertek Inc. | Stock code | 002241 |
The stock exchange where stocks are listed | Shenzhen Stock Exchange | ||
Name of the Company in Chinese | 歌尔股份有限公司 | ||
Abbreviation of the Company in Chinese | 歌尔股份 | ||
Name of the Company in English (if any) | Goertek Inc. | ||
Abbreviation of the Company in English (if any) | Goertek | ||
Legal representative of the Company | Jiang Bin | ||
Registered address | 268 Dongfang Road, High-tech Industrial Development District, Weifang | ||
Postal code of registered address | 261031 | ||
History of changes in registered address of the Company | No change | ||
Business address | 268 Dongfang Road, High-tech Industrial Development District, Weifang | ||
Postal code of business address | 261031 | ||
Company website | http://www.goertek.com | ||
ir@goertek.com |
II. Contacts and Contact Information
Board Secretary | Securities Affairs Representative | |
Name | Xu Dapeng | Xu Yanqing |
Contact address | 268 Dongfang Road, High-tech Industrial Development District, Weifang | 268 Dongfang Road, High-tech Industrial Development District, Weifang |
Tel. | 0536-3055688 | 0536-3055688 |
Fax | 0536-3056777 | 0536-3056777 |
ir@goertek.com | ir@goertek.com |
III. Media for Information Disclosure and Place of the Report
Website of the stock exchange for release of the Annual Report | Shenzhen Stock Exchange (http://www.szse.cn) |
Name and website of the media for release of the Annual Report | Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, CNINFO (http://www.cninfo.com.cn) |
Place where the Annual Report is available for inspection | Office of Board of Directors of the Company |
IV. Changes in Registration
Unified Social Credit Code | 91370700729253432M |
The changes in main business since the Company was listed (if any) | No change |
Changes of controlling shareholders of the Company (if any) | No change |
V. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm | Zhongxi CPAs (Special General Partnership) |
Business address of the accounting firm | Room 1101, No. 11, Chongwenmenwai Street, Dongcheng District, Beijing |
Names of accountants signing the report | Du Yeqin, Zhang Shuli |
The sponsor institution engaged by the Company to perform continuous supervision during the reporting period? Applicable ? Not applicableThe financial advisor engaged by the Company to perform continuous supervision during the reporting period? Applicable ? Not applicableⅥ. Key Accounting Data and Financial IndicatorsWhether the Company performed a retrospective adjustment or restatement of previous accounting data? Yes ? No
2023 | 2022 | Year-on-year change | 2021 | |
Revenue (RMB) | 98,573,902,273.14 | 104,894,324,162.26 | -6.03% | 78,221,418,618.02 |
Net profit attributable to shareholders of the Company (RMB) | 1,088,076,730.88 | 1,749,181,131.83 | -37.80% | 4,274,702,999.38 |
Net profit attributable to shareholders of the Company excluding non-recurring gains and losses (RMB) | 859,926,918.87 | 1,627,378,630.73 | -47.16% | 3,832,421,177.27 |
Net cash flow from operating activities (RMB) | 8,151,888,243.38 | 8,317,113,364.68 | -1.99% | 8,598,475,527.88 |
Basic earnings per share (RMB) | 0.32 | 0.52 | -38.46% | 1.29 |
Diluted earnings per share (RMB) | 0.32 | 0.52 | -38.46% | 1.28 |
Weighted average return on net assets | 3.59% | 6.17% | -2.58% | 17.61% |
End of 2023 | End of 2022 | Year-on-year change | End of 2021 | |
Total assets (RMB) | 73,744,409,441.15 | 77,176,355,467.91 | -4.45% | 61,079,051,133.27 |
Net assets attributable to shareholders of the Company (RMB) | 30,810,590,551.00 | 29,491,882,199.49 | 4.47% | 27,327,747,993.97 |
Indicate whether the lower of the net profit before and after non-recurring gains and losses was negative for the last three accountingyears, or the latest auditor's report indicated that there was uncertainty about the Company's ability to continue as a going concern.? Yes ? NoIndicate whether the lower of the net profit before and after non-recurring gains and losses was negative.? Yes ? No
Ⅶ. Differences in accounting data between domestic and overseas accounting standards
1. Differences in net profits and net assets in the financial reports disclosed according to InternationalFinancial Reporting Standards and China Accounting Standards
? Applicable ? Not applicableDuring the reporting period, there is no difference in net profits and net assets in the financial reports disclosed pursuant toInternational Financial Reporting Standards and China Accounting Standards.
2. Differences in net profits and net assets in the financial reports disclosed according to overseasaccounting standards and China Accounting Standards? Applicable ? Not applicableDuring the reporting period, there is no difference in net profits and net assets in the financial reports disclosed pursuant to foreignaccounting standards and China Accounting Standards.Ⅷ. Key Quarterly Financial Indicators
Unit: RMB
The first quarter | The second quarter | The third quarter | The fourth quarter | |
Revenue | 24,122,252,634.31 | 21,050,325,234.60 | 28,775,249,801.07 | 24,626,074,603.16 |
Net profit attributable to shareholders of the Company | 106,175,127.83 | 315,621,829.78 | 470,337,212.13 | 195,942,561.14 |
Net profit attributable to shareholders of the Company excluding non-recurring gains and losses (RMB) | 15,112,875.19 | 425,863,646.15 | 345,293,902.06 | 73,656,495.47 |
Net cash flow from operating activities | 134,286,338.03 | 1,967,742,875.47 | 1,299,068,883.40 | 4,750,790,146.48 |
Whether there is significant difference between the above financial indicators and that of what disclosed in the quarterly reports andsemi-annual reports? Yes ? NoⅨ. Non-recurring Gains and Losses
? Applicable ? Not applicable
Unit: RMB
Item | 2023 | 2022 | 2021 | Explanation |
Gains and losses on disposal of non-current assets (including the write-off portion of the provision for asset impairment) | -123,882,680.16 | 122,922,237.61 | -122,148,708.58 | Mainly loss on retirement of fixed assets |
Government grants included in the current gains and losses (except for those that are closely related to the normal business operations of the Company, comply with national policy regulations, are enjoyed according to established standards, and have a continuous impact on the Company's gains and losses) | 331,548,590.64 | 351,383,799.43 | 464,119,437.91 | Mainly special funds for enterprise innovation and development and other government grants |
Item | 2023 | 2022 | 2021 | Explanation |
Gains and losses from changes in the fair value of financial assets and liabilities, and from the disposal of financial assets and liabilities, held by non-financial enterprises, except for effective hedging businesses related to the normal operating business of the Company. | -26,138,756.91 | -367,080,970.87 | 185,179,920.90 | |
Other non-operating income and expenditures other than those mentioned above | 28,631,472.04 | 15,710,102.76 | 13,554,671.71 | |
Other profit and loss items that meet the definition of non-recurring profit and loss | 66,527,741.91 | 42,288,231.23 | 2,603,363.20 | Mainly tax benefits and investment income from certificates of deposits and other products |
Less: Impact of income tax | 35,531,401.22 | 26,114,589.64 | 84,270,186.15 | |
Impact of minority interests (after tax) | 13,005,154.29 | 17,306,309.42 | 16,756,676.88 | |
Total | 228,149,812.01 | 121,802,501.10 | 442,281,822.11 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
? Applicable ? Not applicableMainly tax benefits and investment income from certificates of deposits and other productsDescription of defining the non-recurring profit and loss items, which are listed in Explanatory Announcement No. 1 on InformationDisclosure for Companies with Public Offerings of Securities as recurring profit and loss? Applicable ? Not applicableThe Company did not classify any item of the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies with Public Offerings of Securities as recurring profit and loss in the reporting period.
Section III Management Discussion and AnalysisⅠ. The situation of the industry during the reporting periodDuring the reporting period, the Company's main business is categorized into the industry of the manufacturing of computer,communication, and other electronic devices, and is divided into three product segments: precision component, smart audio device andsmart hardware. The Company mainly focuses in consumer electronics and automotive electronics industries, and provides a widerange of products including acoustics, optics, microelectronics and structural precision components, as well as smart hardware productssuch as virtual reality (VR)/mixed reality (MR)/augmented reality (AR) products, TWS smart earphones, smart wearable devices,gaming console and accessories, and smart home products. The Company serves the global leading clients in the technology andconsumer electronics industry with vertically integrated product solutions of precision components and smart hardware, as well asR&D and manufacturing services.In the mobile era, where smartphone was considered as a core hardware, a large number of well-known enterprises in technology andconsumer electronics industry had emerged worldwide thru the integration of hardware devices, software content and innovativeapplications, and drove the whole industry to achieve significant growth and development through a long period of time. In recentyears, the pace of innovation on smartphone hardware and software, as well as the growth of smartphone market size, were both sloweddown. The consumer electronics industry gradually stepped into the post-mobile era, and new kinds of smart hardware products havebecome the primary growth driver of hardware market in the industry.The integration of smart hardware and advanced technologies as AI, 5G, intelligent sensing and interaction, software algorithms andothers has created a large amount of new application scenarios and market demands, and further promoted the development of smarthardware products. In recent years, we have seen remarkable development in AI in particular. The large language models (LLMs) hadmade significant strides in 2023 and brought unprecedented impact to many fields including science, technology, art, education, andentertainment. The development of AI is expected to create more software applications and use cases for smart hardware products,which will help the development of these products in long term.According to IDC, due to many unfavorable factors such as the weak global economic recovery, intensified geopolitical conflicts, andinadequate demand from end-users, the global smartphone shipments fell to 1.17 billion units in 2023 (-3.2% YoY). The slowdown ofthe innovation in both smartphone hardware technology and software application scenarios also impacted the market demand of relatedprecision components.In 2023, the market performance of smart hardware products was varied. According to Canalys, global shipments of smart wearableproducts reached about 186 million units (+2% YoY). Global shipments of TWS earphones reached about 295 million units (+2.4%YoY). The market for smart wearable products and TWS earphones continued to grow steadily, despite weak consumer demand. Alongwith the development of technologies such as intelligent interaction and health monitoring, and the expansion of application scenarios,the market size of these products is expected to further grow in the future.VR, MR, and AR products remained the most popular directions in the consumer electronics industry in 2023. According to IDC,global shipments of VR, MR, and AR products totaled approximately 6.7 million units (-23.5% YoY). The VR and MR industries sawa decline in shipments in the short term, due to insufficient consumer demand and inadequate software content. However, there weremany exciting things happened in the industry. On one hand, with the advancement of technologies like image sensing and spatialcomputing, mainstream VR products commonly integrated hardware and software content to support MR applications. The boundariesbetween VR and MR are further blurred, and MR products have become the mainstream of the market. On the other hand, many leadingconsumer electronics companies released new MR products or announced plans to develop Metaverse related products in 2023, whichshows that the whole industry considers it as an important product direction and continuously promotes the development. Meanwhile,the market for AR products continues to grow rapidly and the hardware technologies are maturing. The potential integration of AR andAI has attracted the attention and investment of industry-leading companies. The development of VR, MR, and AR products will alsofurther promote the development of related technologies and components, such as micro displays, optical components, sensors, etc.The government attaches great importance to the development of the Metaverse industry. In September 2023, the Ministry of Industryand Information Technology (MIIT) and four other ministries jointly issued the "Three-Year Action Plan for the InnovativeDevelopment of the Metaverse Industry (2023-2025)". The plan further clarifies the principles, goals, key tasks, and supportingmeasures for the development of Metaverse industry, which is expected to continuously promote the healthy development of theindustry.The Company will seize the new industrial opportunities in the post-mobile era, such as new smart hardware products, AI, andMetaverse. The Company will continuously consolidate the core competitiveness based on existing advantages, expand the business
of new smart hardware products and related precision components, and actively engage in new product directions to support the long-term and healthy development of the company's business.From the perspective of the industry competition, the global technology and consumer electronics industries still show a centralizedtrend. Top enterprises with strong competitiveness and brand awareness demonstrate competitive advantages by possessing a largeamount of technologies, talents, funds, brands and industrial ecosystem resources, keep investing in the field of smart hardware andAI, and continuously lead the product and technology innovation in the industry.From the perspective of industry supply chain, on one hand, China still has advantages in terms of political/economic environment,infrastructure, industrial completeness, talent resources, and other aspects. The overall competitiveness of electronic manufacturingenterprises in China is improving, and continuously fulfill the demands of the global supply chain. On the other hand, considering thecomplicated international political and economic environment, these enterprises need to prudently tackle the challenges of setting up aglobal supply chain layout.II. The Company's main business during the reporting periodThe Company serves the global leading clients in the technology and consumer electronics industry with vertically integrated productsolutions of precision components and smart hardware, as well as R&D and manufacturing services.The Company's main business divides into three product segments: precision component, smart audio device and smart hardware. Theprecision components business focuses on acoustics, optics, microelectronics, structural components, and other precision components.The products include micro speakers/receivers, speaker modules, haptic components (actuators), wireless charging components,antenna, MEMS sensors, microsystem modules, VR/MR optical components and modules, AR optical components, micro/nano opticalcomponents, 3D structured light modules, AR optical engine modules, AR HUD modules, precision structural components, etc. Theabove products are widely used in a variety of consumer electronics, including smartphones, tablets, smart wireless earphones, VR,MR, AR, smart wearables, smart homes, and automotive electronics. Smart audio device business focuses on providing products relatedto audio, voice interaction, AI, and other technologies, such as wireless earphones (TWS), wired/wireless earphones, smart speakers,etc. Smart hardware business focuses on providing products related to entertainment, health and home security. The main productsinclude VR, MR, AR, smart wearable products, gaming consoles and accessories, smart home products, etc. The Company continuedto explore automotive electronics business opportunities during the reporting period and made progress in the fields of car sensors,optical components and modules of AR HUD, etc.The Company has innovative competitive advantages in the fields of acoustics, optics, MEMS microelectronics and precisionmanufacturing, and owns a great amount of intellectual property rights in the field of precision components. The Company hasaccumulated rich experience in products and projects by cooperating with industry-leading clients in the field of smart audio deviceand smart hardware through "ODM", "JDM" and other business modes. During the reporting period, the Company maintained strong,long-term cooperative relationships with leading clients in the global technology and consumer electronics industry. As a result, theCompany has been highly recognized by global clients for its product solutions and services, and remains the industry-leadingmanufacturer in the fields of micro speakers, MEMS microphones, MEMS sensors, VR/MR products, TWS, smart wearable products,gaming console and accessories, etc.In the fourth quarter of 2023, the Company acquired 100% of the equity of Uphoton Technology (Shaoxing) Co., Ltd. This acquisitionwill further strengthen the Company's position in the fields of micro/nano optical components, projection/display modules, and 3Dsensing technology. It will also effectively improve the Company's comprehensive competitiveness in the field of precision optics andsupport the long-term development of the Company's optical business.During the reporting period, the global economic was in a weak recovery, and many major countries raised the interest rates, whichsuppressed the demand of consumer electronics products worldwide. For some smart hardware products, the shipment in the reportingperiod was lower than expected, and brought negative impacts to the Company's revenue and profitability. The Company also hasexperienced a short-term sales structure change caused by the rapid revenue growth of some lower-margin projects, which impactedthe Company's overall gross margin. Due to the combined effects of the above factors, the Company's revenue and net profitexperienced a decline in the reporting period. However, the Company's core competitiveness and industry position remain strong. Themanagement and all employees are committed to seize the opportunities of the recovery of the consumer electronics industry and thedevelopment of new smart hardware products, to strive to improve the Company's operating performance in the near future, as well asto pursuit a long-term, sustainable development of the Company.During the reporting period, the Company won multiple honors, including being ranked the 4th in the 2023 Top 100 ElectronicComponents Enterprises of China, 15th in the 2023 Top 100 Competitive Enterprises in China's Electronics Information Industry, 55th
in the 2023 Top 500 Private Enterprises in China's Manufacturing Industry, 86th in the 2023 Top 500 Private Enterprises in China, andheld the position of executive member company of China Information Technology Industry Federation.Ⅲ. Analysis of Core Competitiveness
1. Industry-leading precise and intelligent manufacturing capabilities
In technology and consumer electronics related fields, the Company has been widely recognized for precision manufacturingcapabilities and obtains great reputation. Relying on the core capabilities and long-term experience in the field of precisionmanufacturing, the Company has continuously improved the processing accuracy, efficiency and quality of precision components andsmart hardware products. The Company has in-house development capabilities of various core raw materials, and the Company adoptedmultiple advanced processes and technologies such as ultra-high-precision mold, high-precision metal/non-metal processing, ultrasonictechnology and laser technology, to build industry-leading precision manufacturing capabilities in the production of precision opticalcomponents, MEMS sensors, microsystem modules and precision structural parts, thus ensuring the delivery of the products with highprecision, high efficiency and high quality.The Company, based on the capacities of advanced equipment development and flexible automation production, actively explores theintelligent manufacturing mode for upgrading and develops the Goertek Production System (GPS). In the fields of automation, machinevision and AI related to intelligent manufacturing, the Company has built a future-oriented core capability of intelligent manufacturingby continuing investing in independent R&D, introducing global advanced technologies, core equipment and best practice experiencefor system integration, thus improving the manufacturing in all aspects through the application of information, automation, artificialintelligence and other technologies. The Company promotes the transformation of its manufacturing to a more digitalized, connected,intelligent, and service-oriented model, and to build the core capabilities of future-oriented intelligent manufacturing.
2. Multi-technologies integration platform and strong team of R&D personnel
The Company has established a product R&D and manufacturing platform integrating materials, structures, electronic circuits, softwarealgorithms, wireless communication, advanced technology, testing, automation and other technologies. Through cross-domaintechnology integration, the Company provides clients with advanced and systematic solutions for precision components and smarthardware products. The Company attaches great importance to the integration and cultivation of outstanding talents in the fields ofacoustics, optics, microelectronics, wireless communication, precision manufacturing, automation, and other sectors around the world.The Company has set up a team of technical personnel with profound technical strength and rich experience in product projects, andhas made a long-term cooperation with many well-known universities and scientific research institutions, such as Tsinghua University,Peking University, Shandong University, Southeast University, University of Science and Technology of China, Xiamen University,and Changchun University of Science and Technology, which forms an open and comprehensive technology R&D platform in supportof continuous innovation and R&D of technologies and products.During the reporting period, the Company applied for 3,003 patents, including 2,249 invention patents. A total of 2,185 patents hasbeen granted, including 1,394 invention patents. As of December 31, 2023, the Company has totally applied for 32,209 patents,including 4,031 foreign patent applications and 17,896 invention patents applications; a total of 19,905 patents have been granted,including 6,809 invention patents.
3. Continuous strategic innovation and transformation, and stable high-value client resourcesFacing the complex macroeconomic situation of domestic and overseas, the management of the Company actively carries out strategicalinnovation and transformation. While continuing to consolidate the core competitive advantages in conventional business, the Companyfirmly grasps the innovation opportunities of next-generation smart hardware products in the technology and consumer electronicsindustry. Relying on the high-value client resources and good client relationships worldwide, the Company, oriented by the market andtechnology, continues to explore new business growth opportunities in the fields of consumer electronics and automotive electronics.The Company optimizes the allocation of strategical resource, supports strategical product development, continues strengthening andfurther utilizing the client resource advantages by closely following the world-class clients, in an effort to transform the needs of high-value clients into an inexhaustible driving force for the Company's sustainable development.
4. Excellent core management team
Although the Company experiences a rapid and sound development, the core management team keeps a steady and efficient style asalways. Facing the challenges and demands of smart hardware products in the post mobile era such as rapid development, high quality,high precision manufacturing, short delivery cycle and complex client certification process, the core management team promptlyresponses to the market and makes changes and innovations continuously, to keep and enhance the Company's capabilities of strategicmanagement, operation, R&D, precision and intelligent manufacturing. The Company attaches importance to and promotes theinternationalization, specialization and rejuvenation of its core management team, and actively brings in senior management talents
and professionals from many international leading enterprises. At the same time, the Company has strengthened the echelon of itstalent team, more and more young talents grow up into the Company's core management team through training and practice. TheCompany builds a management team with both experience and vitality that continues to promote the Company's stable and fastdevelopment in the future.IV. Analysis of Main Business
1. Overview
In 2023, the global economic recovery was weak and the international environment was unusually complex. China's economy alsofaced many challenges and difficulties including the insufficient consumer demand. Despite the severe and complex environment,China withstood external pressure and overcame internal difficulties, and successfully achieve the main economic and socialdevelopment goals.In the reporting period, facing the challenges of a sluggish consumer electronics industry, weak market demand and slower-than-expected development of the smart hardware products, the management and all employees had worked diligently and successfullycompleted the main business goals in business expansion, project delivery and operation improvement. The Company continued touphold its product strategy of "Precision Components + Smart Hardware", and to serve leading clients in the global technology andconsumer electronics industries. The Company continued to promote the business development of precision components such asacoustics, optics, microelectronics, and structural parts, as well as smart hardware businesses including VR, MR, AR, smart wirelessearphones, smart wearable devices, and smart home products. Meanwhile, the Company had also made meaningful progress in theautomotive electronics business. In the field of smart manufacturing, the Company was actively engaged in the development of theGoertek Production System (GPS), a future-oriented intelligent manufacturing model with Goertek characteristics, which will help theCompany to further consolidate its core competitiveness as a manufacturing enterprise.During the reporting period, the Company's management team took effective measures to overcome the negative impact of the businessfluctuations of a particular product project in 2022, and took it as an opportunity to continuously improve its client-oriented awarenessand client service capabilities. These efforts above have achieved positive results in 2023. In terms of internal management, theCompany continued to optimize the organization structure, to improve the management of operation and to keep a highly effectiveinternal decision-making process. At the same time, the Company actively explored the application of big data and AI technology ininternal operation, continuously improved the level of digitalization and informatization, to establish a solid management and operationfoundation for long-term development in the future.During the reporting period, due to weak demand in the consumer electronics industry and a decline in the market for some smarthardware products such as VR, the Company's revenue decreased slightly compared to last year, and business profitability was alsoaffected to a certain extent. Additionally, the Company experienced a short-term change in sales structure caused by rapid sales growthin some lower-margin projects, impacting the Company's overall gross margin. Despite these short-term performance challenges, theCompany's core competitiveness and industry position remained strong. Management and all employees are committed to seizing theopportunities presented by the recovery of the consumer electronics industry and the development of new smart hardware products,striving to improve the Company's operating performance in the near future, and pursuing long-term, sustainable development.During the reporting period, the Company achieved revenue of RMB 98,573.9023 million, a 6.03% YoY decline. The Companyachieved a net profit attributable to shareholders of listed companies of RMB 1,088.0767 million, a 37.80% YoY decline. The operatingcost of the Company was RMB 89,753.0642 million, a 3.73% YoY decline.During the reporting period, the total amount of the Company's selling expenses, administrative expenses, R&D expenses, and financialexpenses was RMB 7,798.7093 million, a 5.11% YoY decline.During the reporting period, the Company invested RMB 4,572.8554 million in R&D, accounting for 4.64% of revenue and 14.50%of the latest audited net assets of the Company.During the reporting period, the net cash flow from operating activities of the Company was RMB 8,151.8882 million, a 1.99% YoYdecline.
2. Revenue and cost
(1) Composition of revenue
Unit: RMB
2023 | 2022 | Year-on-year change | |||
Amount | Proportion to revenue | Amount | Proportion to revenue | ||
Total of revenue | 98,573,902,273.14 | 100% | 104,894,324,162.26 | 100% | -6.03% |
Classified by industry | |||||
Electronic components | 95,885,691,189.51 | 97.27% | 102,966,939,788.80 | 98.16% | -6.88% |
Other business income | 2,688,211,083.63 | 2.73% | 1,927,384,373.46 | 1.84% | 39.47% |
Classified by product | |||||
Precision components | 12,991,833,787.27 | 13.18% | 14,003,616,502.68 | 13.35% | -7.23% |
Smart audio device | 24,185,269,052.84 | 24.54% | 25,880,868,282.31 | 24.67% | -6.55% |
Smart hardware | 58,708,588,349.40 | 59.56% | 63,082,455,003.81 | 60.14% | -6.93% |
Other business income | 2,688,211,083.63 | 2.73% | 1,927,384,373.46 | 1.84% | 39.47% |
Classified by region | |||||
Domestic | 7,180,017,243.40 | 7.28% | 9,182,257,334.82 | 8.75% | -21.81% |
Overseas | 91,393,885,029.74 | 92.72% | 95,712,066,827.44 | 91.25% | -4.51% |
Classified by sales mode | |||||
Direct selling | 98,164,328,961.68 | 99.58% | 104,414,898,362.49 | 99.54% | -5.99% |
Distribution | 409,573,311.46 | 0.42% | 479,425,799.77 | 0.46% | -14.57% |
(2) Industries, products, regions and sales modes accounting for more than 10% of the Company's operating revenue oroperating profit? Applicable ? Not applicable
Unit: RMB
Operating revenue | Operating cost | Gross profit margin | YoY change (%) of operating revenue | YoY change (%) of operating cost | YoY change (%) of gross profit margin | |
Classified by industry | ||||||
Electronic components | 95,885,691,189.51 | 87,326,051,000.75 | 8.93% | -6.88% | -4.57% | -2.20% |
Classified by product | ||||||
Precision components | 12,991,833,787.27 | 10,329,768,695.82 | 20.49% | -7.23% | -6.39% | -0.71% |
Smart audio device | 24,185,269,052.84 | 22,555,549,272.05 | 6.74% | -6.55% | -7.63% | 1.09% |
Smart hardware | 58,708,588,349.40 | 54,440,733,032.88 | 7.27% | -6.93% | -2.88% | -3.87% |
Classified by region | ||||||
Domestic | 5,837,928,345.91 | 5,379,650,970.76 | 7.85% | -23.88% | -19.86% | -4.62% |
Overseas | 90,047,762,843.60 | 81,946,400,029.99 | 9.00% | -5.51% | -3.36% | -2.02% |
Classified by sales mode | ||||||
Direct selling | 95,480,495,737.95 | 86,972,923,164.72 | 8.91% | -6.84% | -4.53% | -2.20% |
Distribution | 405,195,451.56 | 353,127,836.03 | 12.85% | -15.06% | -13.56% | -1.51% |
In case the statistical caliber of the Company's main business data was adjusted in the reporting period, the Company's main businessdata for the preceding period adjusted according to the caliber at the end of the period shall be indicated? Applicable ? Not applicable
(3) Whether the Company's goods sales income is greater than the services income
? Yes ? No
Classification of industry | Item | Unit | 2023 | 2022 | Year-on-year change |
Electronic components industry | Sales volume | Ten thousand PCS | 428,520.45 | 453,825.95 | -5.58% |
Output volume | Ten thousand PCS | 425,166.92 | 461,666.20 | -7.91% | |
Inventory volume | Ten thousand PCS | 38,522.81 | 41,876.34 | -8.01% |
Reasons for YoY change over 30% in the above data? Applicable ? Not applicable
(4) Fulfillment of significant sales and procurement contracts signed by the Company during the reporting period? Applicable ? Not applicable
(5) Composition of operating cost
Classification of industry
Unit: RMB
Classification of industry | Item | 2023 | 2022 | Year-on-year change | ||
Amount | Proportion to operating cost | Amount | Proportion to operating cost | |||
Electronic components | Direct materials | 76,130,381,986.14 | 87.18% | 80,345,630,863.86 | 87.80% | -5.25% |
Direct labor expenses | 4,052,203,462.29 | 4.64% | 4,168,178,564.20 | 4.56% | -2.78% | |
Manufacturing expenses | 7,143,465,552.32 | 8.18% | 6,995,389,252.63 | 7.64% | 2.12% |
(6) Whether there is any change in consolidation scope during the reporting period
? Yes ? NoDuring the reporting period, the Company established 3 subsidiaries. They are respectively Chongqing Goertek Auto Technology Co.,Ltd., Goertek Smart Technology Vina Co.,Ltd., and GMI Technology GmbH. The Company's subsidiary, Goertek Optical TechnologyCo., Ltd., acquired 100% equity of Uphoton Technology (Shaoxing) Co., Ltd. The latter and its subsidiaries are included in theconsolidated statements.The Company deregistered one of its subsidiaries, Kunshan Goertek Electronics Co., Ltd. during this period.
(7) Significant changes or adjustments in respect of business, products or services of the Company during the reportingperiod? Applicable ? Not applicable
(8) Major clients and suppliers
Major clients of the Company
Total sales amount from top five clients (RMB) | 87,481,440,616.00 |
Proportion of total sales from top five clients to total annual sales | 88.75% |
Proportion of sales from related parties among top five clients to total annual sales | 0.00% |
Information of top five clients
No. | Name of client | Sales amount (RMB) | Proportion to total annual sales amount |
1 | Client 1 | 42,761,773,279.56 | 43.38% |
2 | Client 2 | 26,633,971,746.92 | 27.02% |
3 | Client 3 | 8,586,104,544.28 | 8.71% |
4 | Client 4 | 6,106,476,920.65 | 6.20% |
5 | Client 5 | 3,393,114,124.59 | 3.44% |
Total | - | 87,481,440,616.00 | 88.75% |
Other information of major clients? Applicable ? Not applicableThe top five clients do not have associated relationship with the Company. The Company's directors, supervisors, senior management,core technicians, shareholders holding more than 5% of total shares, actual controllers and other related parties do not directly orindirectly own rights or interests in the major clients.Major suppliers of the Company
Total purchase amount from top five suppliers (RMB) | 35,197,986,931.06 |
Proportion of total purchase amount from top five suppliers to total annual purchase amount | 46.16% |
Proportion of purchase amount from related parties among top five suppliers to total annual purchase amount | 0.00% |
Information of top five suppliers
No. | Name of supplier | Purchase amount (RMB) | Proportion to total annual purchase amount |
1 | Supplier 1 | 24,067,772,914.22 | 31.56% |
2 | Supplier 2 | 4,930,897,186.89 | 6.47% |
3 | Supplier 3 | 2,784,472,064.44 | 3.65% |
4 | Supplier 4 | 1,912,643,290.61 | 2.51% |
5 | Supplier 5 | 1,502,201,474.90 | 1.97% |
Total | - | 35,197,986,931.06 | 46.16% |
Other information of major suppliers? Applicable ? Not applicableThe top five suppliers do not have associated relationship with the Company. The Company's directors, supervisors, senior management,core technicians, shareholders holding more than 5% of total shares, actual controllers and other related parties do not directly orindirectly own rights or interests in the major suppliers.
3. Expenses
Unit: RMB
2023 | 2022 | Year-on-year change | Reason for significant change | |
Selling expenses | 528,150,303.42 | 548,298,842.05 | -3.67% | No significant change |
General and administrative expenses | 2,202,814,353.55 | 2,294,505,645.46 | -4.00% | No significant change |
Financial expenses | 351,775,148.64 | 149,123,081.74 | 135.90% | Mainly because the Company obtained more long term loans to improve the loan structure led to an increase in interest expense. |
Research and development expenses | 4,715,969,451.42 | 5,226,525,154.99 | -9.77% | No significant change |
4. R&D Investment
? Applicable ? Not applicable
Name of major R&D project | Purpose of project | Status of project | Objectives | Expected effects on the future development of the Company |
R&D project of micro speaker module | Develop a new generation of micro speaker module products with high sensitivity, low distortion, large amplitude, waterproof and dustproof features. | In progress | Collaborate with major clients to iterate intelligent hardware products, complete R&D of a number of micro speaker module products, and achieve mass production and application on client products | It helps continuously consolidate the Company's competitive advantage and market share in the field of acoustic precision components. |
R&D project of MEMS sensor and microsystem module | To develop MEMS sensors and microsystem module products applied to smart hardware and automotive electronics. | In progress | Complete the R&D, verification, application and mass production of MEMS sensors and microsystem modules featuring voice interaction, adapterization and noise reduction, signal transmission and status monitoring, used in the field of smart hardware and automotive electronics | It helps facilitate the Company's business expansion in the field of MEMS sensors and microsystem modules, and further enhance the Company's comprehensive strength in the field of MEMS. |
R&D project of VR/MR/AR precision optical components and modules | Develop the precision optical components and module products by using emerging optical technologies such as ''Pancake'' folded-lightpath lenses and optical waveguide technology, and promote their application in VR/MR/AR products. | In progress | Complete the R&D and mass production of optical lens and module products for new generation of all-in-one VR/MR products, and improve the ability of comprehensive solution of optical devices and light engines for AR products. | It helps enhance the Company's competitive advantage and market share in the field of VR/MR/AR precision optical components and modules, promote the Company's ability to provide clients with customized VR/MR/AR optical solutions, and improve the Company's vertical integration ability and profitability in the field of VR/MR/AR. |
R&D project of AR optical modules | To develop micro projection modules for AR, AR-HUD, and so on, and promote its application in consumer electronics, automotive electronics, etc. | In progress | Complete the design, technical verification and commercial application of related micro projection modules, and develop micro projection module solutions for consumer electronics and automotive electronics | It helps enhance the competitiveness of the Company in AR optical modules, and extend the Company's capabilities in optical modules to the field of automotive electronics |
R&D project of all-in-one VR/MR Head Mounted Display | Develop lightweight all-in-one VR/MR HMD products featuring high-definition display, precise motion tracking, etc. | In progress | Cooperate with clients to complete R&D, validation, mass production of a number of new-generation all-in- | It helps consolidate the Company's competitive advantage and market share in the field of VR/MR. |
Name of major R&D project | Purpose of project | Status of project | Objectives | Expected effects on the future development of the Company |
one VR/MR HMD products based on the latest chip platform | ||||
R&D project of TWS smart earphones | Develop a new generation of TWS smart earphones | In progress | Cooperate with our client to complete R&D, validation, mass production of a number of new-generation of TWS smart earphones | It helps consolidate the Company's competitive advantage and market share in the field of TWS smart earphones. |
R&D project of smart wearable devices for sport and health related applications | Develop a new generation of smart wearable devices with functions of independent communication, health monitoring features and etc. | In progress | Cooperate with our client to complete R&D, validation, mass production of a new generation of smart watches and smart bands | It helps consolidate the Company's competitive advantage and market share in smart wearable devices such as smart watches and smart bands |
R&D project of smart wireless lightweight AR glasses | Develop wireless lightweight AR glasses and their main functional modules for future AR applications. | In progress | Complete the R&D and trial production of a number of AR glasses products, based on the latest chip platform, with the functions of data processing and wireless communication, using advanced precision optical technologies and micro-display technologies such as optical waveguide and silicon-based LED, so as to develop the solution capability for AR glasses and their main functional modules | It helps enhance the Company's R&D experience and technology accumulation in the field of AR and facilitate the business expansion of the Company in AR field. |
Details of R&D personnel
2023 | 2022 | Year-on-year change | |
Number of R&D personnel | 12,377 | 12,305 | 0.59% |
Proportion of R&D personnel to total number of employees | 15.21% | 14.42% | 0.79% |
Education background of R&D personnel | |||
Bachelor | 8,078 | 8,099 | -0.26% |
Master | 2,417 | 2,550 | -5.22% |
PhD | 63 | 54 | 16.67% |
Age structure of R&D personnel | |||
Below the age of 30 | 5,059 | 5,346 | -5.37% |
Aged between 30 to 40 | 6,329 | 6,172 | 2.54% |
Over the age of 40 | 989 | 787 | 25.67% |
The Company's investment in R&D
2023 | 2022 | Year-on-year change |
Amount of R&D Investment (RMB) | 4,572,855,380.03 | 5,198,312,190.48 | -12.03% |
Proportion of R&D investment to revenue | 4.64% | 4.96% | -0.32% |
Capitalized amount of R&D investment (RMB) | 542,789,272.24 | 597,278,121.61 | -9.12% |
Proportion of capitalized R&D investment to R&D investment | 11.87% | 11.49% | 0.38% |
Reasons and impacts of significant changes in R&D personnel composition of the Company? Applicable ? Not applicableReasons for significant changes in the proportion of total R&D investment to revenue compared to preceding year? Applicable ? Not applicableReasons for and explanation of its reasonableness of significant changes in capitalized R&D investment and rationale? Applicable ? Not applicable
5. Cash flow
Unit: RMB
Item | 2023 | 2022 | Year-on-year change |
Sub-total of cash inflow from operating activities | 80,166,508,468.96 | 92,960,786,011.89 | -13.76% |
Sub-total of cash outflow from operating activities | 72,014,620,225.58 | 84,643,672,647.21 | -14.92% |
Net cash flow from operating activities | 8,151,888,243.38 | 8,317,113,364.68 | -1.99% |
Sub-total of cash inflow from investing activities | 5,194,943,904.22 | 1,141,805,421.45 | 354.98% |
Sub-total of cash outflow from investing activities | 12,778,336,083.57 | 10,218,818,104.61 | 25.05% |
Net cash flow from investing activities | -7,583,392,179.35 | -9,077,012,683.16 | -16.45% |
Sub-total of cash inflow from financing activities | 29,078,690,255.10 | 31,722,066,906.40 | -8.33% |
Sub-total of cash outflow from financing activities | 27,304,205,611.87 | 29,714,438,433.99 | -8.11% |
Net cash flow from financing activities | 1,774,484,643.23 | 2,007,628,472.41 | -11.61% |
Net increase in cash and cash equivalents | 2,352,733,172.97 | 1,662,092,566.77 | 41.55% |
Main influencing factors of significant year-on-year changes in relevant data? Applicable ? Not applicableThe sub-total of cash inflow from investing activities increased by 354.98% year-on-year to RMB 5,194.9439 million. This was mainlydue to the receipt of principal from the maturity of term deposits and the increase in cash received from foreign exchange derivativeinvestments.The reason for significant difference between the net cash flow from the Company's operating activities during the reporting periodand net profit in current year.? Applicable ? Not applicableThe net cash flow generated from operating activities exceeded the net profit of the current year by 699.67%, mainly due to the impactof non-cash items such as depreciation of fixed assets and amortization of intangible assets. At the same time, the amount of accountsreceivable recovered by the Company increased during the period.
V. Analysis of Non-Main Business? Applicable ? Not applicable
Unit: RMB
Amount | Proportion in total profit | Explanation of the cause | Whether it is sustainable | |
Investment income | -73,393,865.89 | -9.28% | Mainly due to the Company's investment losses in foreign exchange derivatives during the reporting period | No |
Gains on changes in fair value | 115,909,152.44 | 14.65% | Mainly due to changes in the fair value of the Company's equity investments during the reporting period | No |
Asset impairment losses | -299,625,741.31 | -37.87% | Mainly because the Company made some provision for inventory write-down during the reporting period | No |
Non-operating income | 34,817,135.08 | 4.40% | Mainly refers to the amount that the Company was unable to pay and the liquidated damages collected during the reporting period | No |
Non-operating expenses | 152,852,797.95 | 19.32% | Mainly due to the non-current asset destruction and scrapping losses of the Company during the reporting period | No |
Other income | 372,861,056.96 | 47.13% | Mainly due to the government grants included in the current profit and loss by the Company during the reporting period | No |
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: RMB
End of 2023 | At the beginning of 2023 | YoY change (%) | Note of significant change | |||
Amount | Proportion in total assets | Amount | Proportion in total assets | |||
Cash at bank and on hand | 14,737,312,329.71 | 19.98% | 12,682,871,091.80 | 16.41% | 3.57% | The Company's operating cash flow remained stable, while investment cash outflow decreased, leading to an increase in free cash flow. |
Accounts receivable | 12,424,618,676.81 | 16.85% | 14,396,180,782.93 | 18.63% | -1.78% | The decline in the Company's revenue scale in the fourth |
quarter led to a decrease in the ending balance of accounts receivable. | ||||||
Contract assets | ||||||
Inventories | 10,794,894,394.42 | 14.64% | 17,348,670,744.58 | 22.45% | -7.81% | The Company strengthened inventory management during the reporting period, resulting in a decrease in ending inventory. |
Investment properties | ||||||
Long-term equity investments | 760,220,882.07 | 1.03% | 361,008,671.83 | 0.47% | 0.56% | The Company increased long-term equity investment in the industrial chain during the reporting period. |
Fixed assets | 22,305,456,354.63 | 30.25% | 21,459,756,268.25 | 27.77% | 2.48% | During the reporting period, some of the Company's projects under construction reached the intended usable state and were transferred to fixed assets. |
Construction in progress | 2,071,280,343.55 | 2.81% | 2,424,443,775.33 | 3.14% | -0.33% | |
Right-of-use assets | 615,431,849.91 | 0.83% | 580,175,922.73 | 0.75% | 0.08% | |
Short-term borrowings | 5,214,491,316.62 | 7.07% | 7,120,846,026.67 | 9.22% | -2.15% | The Company optimized its loan structure and repaid some short-term borrowings during the reporting period. |
Contract liabilities | 3,472,638,215.20 | 4.71% | 2,295,347,547.31 | 2.97% | 1.74% | |
Long-term borrowings | 6,631,470,751.86 | 8.99% | 2,206,000,000.00 | 2.85% | 6.14% | The Company optimized its loan structure during the reporting period, resulting in an increase in long-term borrowings. |
Lease liabilities | 518,159,559.63 | 0.70% | 470,704,507.75 | 0.61% | 0.09% | |
Accounts payable | 17,582,263,359.17 | 23.84% | 25,748,758,270.19 | 33.32% | -9.48% | Company's accounts payable for materials not yet due decreased. |
Foreign assets account for a relatively high proportion? Applicable ? Not applicable
Asset details | Cause of formation | Assets scale (RMB) | Location | Operation mode | Measures to ensure asset safety | Earnings | Proportion of overseas assets in the net assets of the Company | Whether there is a significant impairment risk |
Goertek Technology Vina Company Limited | Establishment | 4,739,848,864.35 | Vietnam | Production & sales | Effective internal control mechanism | Normal | 15.38% | No |
Other circumstances | The assets scale refers to the net assets of overseas subsidiaries. The proportion of overseas assets in the net assets of the Company refers to the proportion of the net assets of overseas subsidiaries in the net assets of the listed Company at the end of the reporting period. |
2. Assets and liabilities measured at fair value
? Applicable ? Not applicable
Unit: RMB
Item | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Impairment accrued in current period | Purchase amount in the reporting period | Sales amount in the reporting period | Other changes | Closing balance |
Financial assets | ||||||||
1. Financial assets held for trading (excluding derivative financial assets) | 152,722,198.06 | 90,315,106.30 | 254,500,000.00 | 17,322,107.10 | 3,000,000.00 | 483,215,197.26 | ||
2. Derivative financial assets | 185,939,899.60 | -82,278,125.54 | 568,120.37 | 104,229,894.43 | ||||
3. Other debt investments | ||||||||
4. Investments in other equity instruments | 699,249,262.24 | -55,947,128.51 | 11,835,470.16 | 591,269,883.71 | ||||
5. Other non-current financial assets | 318,661,575.31 | 30,388,698.95 | 109,223,851.41 | 137,739,380.06 | 2,105,498.79 | 322,640,244.40 | ||
6. Financing receivables | 22,375,874.12 | 21,722,444.40 | 35,039,088.41 | 9,059,230.11 | ||||
Sub-total of financial assets | 1,378,948,809.33 | 38,425,679.71 | -55,947,128.51 | 385,446,295.81 | 190,100,575.57 | 17,509,089.32 | 1,510,414,449.91 | |
Total of above amounts | 1,378,948,809.33 | 38,425,679.71 | -55,947,128.51 | 385,446,295.81 | 190,100,575.57 | 17,509,089.32 | 1,510,414,449.91 | |
Financial liabilities | 202,293,742.46 | 77,483,472.73 | 201,994,258.68 | 197,224,742.46 | 129,579,785.95 |
Other changesNoneWhether the measurement attributes of major assets of the Company have changed significantly during the reporting period? Yes ? No
3. Restrictions on asset rights as of the end of reporting period
Item | Book value at the end of the reporting period (RMB) | Reasons for restrictions |
Cash at bank and on hand | 1,456,289,098.94 | Deposit for bills and borrowings |
Notes receivable | 100,866,907.03 | Bill pledge, discount, etc. |
Intangible assets
Intangible assets | 61,897,657.63 | Used for mortgage purposes |
Current portion of non-current assets | 453,106,027.78 | Bank-issued financing guarantees, bills, etc. |
Other non-current assets | 533,377,444.44 | Bank-issued financing guarantees, bills, etc. |
Total | 2,605,537,135.82 |
Ⅶ. Analysis of Investment
1. Overall situation
? Applicable ? Not applicable
Investment amount in 2023 (RMB) | Investment amount in 2022 (RMB) | YoY change (%) |
8,889,964,898.25 | 9,210,478,674.05 | -3.48% |
2. Major equity investments acquired during the reporting period
? Applicable ? Not applicable
3. Major non-equity investments in progress during the reporting period
? Applicable ? Not applicable
4. Financial asset investment
(1) Securities investment
? Applicable ? Not applicable
Unit: RMB
Security type | Security code | Security abbreviation | Initial investment cost | Accounting measurement model | Book value at the beginning | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Purchase amount in the reporting period | Sales amount in the reporting period | Profit and loss in the reporting period | Book value at the end of the reporting period | Accounting items | Source of funds |
Domestic and foreign stocks | KOPN | KOPN | 84,852,571.05 | Fair value measurements | 32,722,198.06 | 27,956,409.20 | 17,322,107.10 | -7,707,816.68 | 43,356,500.16 | Financial assets held for trading | Self-raised funds | ||
Total | 84,852,571.05 | - | 32,722,198.06 | 27,956,409.20 | 17,322,107.10 | -7,707,816.68 | 43,356,500.16 | - | - | ||||
Date of announcement disclosure by the Board of Directors for approval of securities investment | February 11, 2017 | ||||||||||||
Date of announcement disclosure by shareholders meeting for approval of securities investment (if any) | March 2, 2017 |
(2) Derivatives investment
? Applicable ? Not applicable
1) Investments in derivatives for hedging during the reporting period
? Applicable ? Not applicable
Unit: RMB 10,000
Type of derivatives investment | Amount of initial investment | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Amount of purchase during the reporting period | Amount of sales during the reporting period | Closing balance | Proportion of investment amount in the Company's net asset at the end of the reporting period |
Option | - | 292,513.2 | 1,997.66 | 817,276.27 | 912,182.14 | 197,607.33 | 6.41% |
Type of derivatives investment | Amount of initial investment | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Amount of purchase during the reporting period | Amount of sales during the reporting period | Closing balance | Proportion of investment amount in the Company's net asset at the end of the reporting period |
Forward | - | 616,367.1 | 5,937.6 | 2,856,619.43 | 2,512,572.41 | 960,414.12 | 31.17% | |
Swap | - | 317,806.82 | -8,414.73 | 1,276,382.86 | 949,663.98 | 644,525.7 | 20.92% | |
Total | - | 1,226,687.12 | -479.47 | 4,950,278.56 | 4,374,418.53 | 1,802,547.15 | 58.50% | |
Description of whether the accounting policies and specific accounting principles for the Company's hedging business has changed significantly compared with that of previous reporting period | The Company's derivatives transactions are calculated in accordance with Accounting Standards for Business Enterprises No. 22 — Recognition and Measurement of Financial Instruments. The initial measurement is based on the fair value of the derivatives on the date of the signing of the transaction contracts, and the subsequent measurement is based on its fair value. The derivative instrument with positive fair value is recognized as an asset, while the one with negative fair value is recognized as a liability. The gains and losses generated by changes in fair value are directly recognized in current profit and loss. The accounting policies and specific accounting principles for the Company's derivatives have no significant change compared with that of previous reporting period. | |||||||
Statement of actual profit and loss in the reporting period | The Group confirmed the gains and losses from derivatives transactions in 2023, recognizing a loss of RMB 4.7947 million from changes in fair value and an investment loss of RMB 134.7784 million, for a total loss of RMB 139.5731 million; the hedged project generated a gain of RMB 113.2053 million due to exchange rate fluctuations in 2023. In total, the Group's net loss from derivative transactions in 2023 was RMB 26.3678 million, after taking into account the changes in the value of the hedging instruments and the hedged items. | |||||||
Statement of hedging effect | To avoid exchange rate risks in daily operations, the Company hedged against its risks through financial derivatives. The changes in the value of the financial derivatives effectively hedged the risk of changes in the existing position, and the overall hedging result is within expectations. | |||||||
Source of funds for derivatives investment | Self-raised funds | |||||||
Risk analysis and control measures for derivatives positions during the | 1. The financial derivatives transactions carried out by the Company are for the purpose of fixing costs, avoiding and preventing risks of foreign exchange rate and interest rate, and prohibiting any risk speculation. The trading quota of the Company's financial derivatives shall not exceed the authorized quota as reviewed and approved by the Board of Directors or the general meeting of shareholders. 2. The Company has formulated a strict management system for financial derivatives transactions, which clearly stipulates the operating principles, approval authority, responsible departments and persons, internal operating procedures, information isolation measures, internal risk |
Type of derivatives investment | Amount of initial investment | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Amount of purchase during the reporting period | Amount of sales during the reporting period | Closing balance | Proportion of investment amount in the Company's net asset at the end of the reporting period |
reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | reporting system and risk handling procedures, and information disclosure of financial derivatives transactions, in order to control trading risks arising therefrom. 3. The Company shall carefully review the terms of contracts signed with qualified banks and other financial institutions, and strictly implement the risk management system to prevent legal risks. 4. The Company's business personnel will continue to track the changes in the open market price or fair value of financial derivatives, timely assess the changes in risk exposure of financial derivatives transactions, and regularly report to the management of the Company. If any abnormal situation, inform the Board of Directors of the risk and take emergency measures accordingly. 5. The internal audit department regularly conducts internal audit on the compliance of financial derivatives transactions. | |||||||
In case of changes in market price or fair value of invested derivatives during the reporting period, the analysis of fair value of the derivatives shall disclose the specific methods used and the setting of relevant assumptions and parameters | Changes in the fair value of foreign exchange derivatives are calculated based on the difference between the fair market price and the contract price in the month of the settlement date determined by the Company. | |||||||
Involvement in litigation (if applicable) | None | |||||||
Date of announcement disclosure by the Board of Directors for approval of the | April 18, 2023 |
Type of derivatives investment | Amount of initial investment | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Amount of purchase during the reporting period | Amount of sales during the reporting period | Closing balance | Proportion of investment amount in the Company's net asset at the end of the reporting period |
investment in derivatives (if any) | ||||||||
Date of announcement disclosure by shareholders meeting for approval of the investment in derivatives (if any) | May 11, 2023 | |||||||
Special opinions of independent directors on the Company's derivatives investment and risk control | The Company carries out financial derivatives transactions mainly to avoid the risks caused by exchange rate and interest rate fluctuations, and to effectively control the cost uncertainty caused by exchange rate and interest rate risks. The Company has formulated the "Securities Investment and Derivatives Transaction Management System of Goertek Inc.", which is conducive to strengthening the risk management and control of financial derivatives transactions, is in line with the overall interests of the Company, and does not harm the legitimate rights and interests of small and medium-sized shareholders. Therefore, the Company has been approved to carry out the business above. |
2) Investments in derivatives for speculation during the reporting period
? Applicable ? Not applicableThe Company did not make any investment in derivatives for speculation during the reporting period.
5. Use of raised funds
? Applicable ? Not applicable
(1) Overall use of raised funds
? Applicable ? Not applicable
Unit: RMB 10,000
Year of raising | Means of raising | Total amount of raised funds | Net amount of raised funds | Total amount of raised funds used during the reporting period | Accumulated amount of raised funds that have been used | Total amount of raised funds with changed purposes during the reporting period | Accumulated total amount of raised funds with changed purposes | Proportion of accumulated total amount of raised funds with changed purposes | Total amount of raised funds that have not been yet used | Purpose of the raised funds that have not been yet used | The amount of raised funds that have been idle for more than two years |
2020 | Public issuance of convertible corporate bonds | 400,000 | 398,903 | 64,993.75 | 402,197.33 | 53,703.18 | 53,703.18 | 13.43% | 37.05 | As of the end of this reporting period, unused raised funds are deposited in the special account for raised funds. | 0.00 |
Total | - | 400,000 | 398,903 | 64,993.75 | 402,197.33 | 53,703.18 | 53,703.18 | 13.43% | 37.05 | - | 0.00 |
Description of overall use of raised funds | |||||||||||
The Company actually invested RMB 649.9375 million of raised funds in current period. As of December 31, 2023, the Company had used a total of RMB 4,021.9733 million of raised funds. All raised funds have been invested. The total amount of unused raised funds is RMB 370,500 (including interest income), which is deposited in the Company's special account for raised funds. |
(2) Projects in which the raised funds were proposed to be invested
? Applicable ? Not applicable
Unit: RMB 10,000
Committed investment projects and investment of over-raised funds | Whether the project has been changed (including partial changes) | Total committed investment of raised funds | Total investment after adjustment (1) | Amount invested during the reporting period | Accumulated investment amount at the end of the reporting period (2) | Investment progress at the end of the period (3)=(2)/(1) | The date on which the project reaches its intended usage state | Benefits realized during the reporting period | Whether it achieved the expected benefits | Whether there is any significant change in the feasibility of the project |
Committed investment projects | ||||||||||
The project of binaural true wireless smart earphones | No | 218,903 | 218,903 | 0.06 | 220,141.98 | 100.57% | August 31, 2022 | 3,292.91 | No | No |
AR/VR and related optical module project - | No | 60,000 | 60,000 | 2.47 | 60,583.85 | 100.97% | August 31, 2022 | 15,507.79 | No | No |
Committed investment projects and investment of over-raised funds | Whether the project has been changed (including partial changes) | Total committed investment of raised funds | Total investment after adjustment (1) | Amount invested during the reporting period | Accumulated investment amount at the end of the reporting period (2) | Investment progress at the end of the period (3)=(2)/(1) | The date on which the project reaches its intended usage state | Benefits realized during the reporting period | Whether it achieved the expected benefits | Whether there is any significant change in the feasibility of the project |
AR/VR project | ||||||||||
AR/VR and related optical module project - optical module project | No | 40,000 | 40,000 | 6,739.3 | 40,497.33 | 101.24% | June 30, 2023 | 995.36 | No | No |
Qingdao R&D center project | Yes | 80,000 | 27,270.99 | 4,548.74 | 27,270.99 | 100.00% | Not applicable | Not applicable | Not applicable | Yes |
Permanent replenishment of working capital | Not applicable | 0.00 | 52,729.01 | 53,703.18 | 53,703.18 | - | Not applicable | Not applicable | Not applicable | Not applicable |
Sub-total of committed investment projects | - | 398,903 | 398,903 | 64,993.75 | 402,197.33 | - | - | 19,796.06 | - | - |
Direction of the investment with over raised funds | ||||||||||
Not applicable | ||||||||||
Total | - | 398,903 | 398,903 | 64,993.75 | 402,197.33 | - | - | 19,796.06 | - | - |
Explain the reasons for failure to achieve the planned progress and estimated profit by item (including the reasons why "Not applicable" is selected under "Whether the estimated profit was achieved") | ① In 2023, due to market changes, client project fluctuations, and other reasons, the project of binaural true wireless smart earphones, AR/VR project, and AR/VR-related optical module project did not achieve the expected benefits this year. ②Since the second half of 2022, the macro economy, the consumer electronics industry, and the Company's business operations all faced new challenges. The implementation background of the Qingdao R&D center project also changed significantly. After review and approval at the 11th meeting of the 6th Board of Directors on December 5, 2023, the 10th meeting of the 6th Supervisory Board, and the 2nd extraordinary general meeting of 2023 on December 21, 2023, the remaining raised funds originally planned for the Qingdao R&D center project would be used to permanently replenish the working capital for the Company's daily production and operation, as well as business development. | |||||||||
Description of significant change in the feasibility of the project | For details, please refer to Ⅶ. Analysis of Investment - 5. Use of raised funds - (3) Changes in the projects in which the raised funds were proposed to be invested. | |||||||||
Amount, use of over-raised funds and progress of | Not applicable |
Committed investment projects and investment of over-raised funds | Whether the project has been changed (including partial changes) | Total committed investment of raised funds | Total investment after adjustment (1) | Amount invested during the reporting period | Accumulated investment amount at the end of the reporting period (2) | Investment progress at the end of the period (3)=(2)/(1) | The date on which the project reaches its intended usage state | Benefits realized during the reporting period | Whether it achieved the expected benefits | Whether there is any significant change in the feasibility of the project |
use thereof | ||||||||||
Change in location of the project invested with raised funds | Applicable | |||||||||
Occurred in previous years | ||||||||||
On August 20, 2020, the Company held the 8th meeting of the 5th Board of Directors and the 6th meeting of the 5th Supervisory Board, which reviewed and approved the Proposal on Changing the Implementation Subject and Implementation Location of Some Investment Projects with Raised Capital and Increasing the Capital of Wholly-owned Subsidiaries, and agreed to change: the implementation subject of AR/VR and related optical module project from Goertek Inc. to the Company's subsidiaries Weifang Goertek Electronics Co., Ltd. and Goertek Optical; The implementation location was changed accordingly from Goertek Photoelectric Park in Weifang High-tech Zone to Weifang Goertek Plant, east of Gaoxin No. 2 Road, south of Yuqing East Street in Weifang comprehensive free trade zone and Goertek Optical Plant, phase III of Goertek Photoelectric Park in Weifang High-tech Zone; The Company increased the capital to Weifang Goertek Electronics Co., Ltd. with the raised funds of RMB 600 million and increased the capital to Goertek Optical with the raised funds of RMB 400 million, for the purpose of specific implementation of above-mentioned investment projects. | ||||||||||
Adjustment on how to invest the projects with raised funds | Not applicable | |||||||||
Upfront investment of the project with raised funds and replacement thereof | Applicable | |||||||||
On July 9, 2020, the Company held the 7th meeting of the 5th Board of Directors and the 5th meeting of the 5th Supervisory Board, which reviewed and approved the Proposal on Replacing the Self-Raised Funds Invested in the Projects in Advance with the Raised Funds, and agreed to use the raised funds to replace the self-raised funds of RMB 315.7238 million invested in the investment projects in advance. The fund replacement above has been verified by Zhongxi CPAs (Special General Partnership), and an authentication report has been issued. | ||||||||||
Temporary replenishment of working capital with idle raised funds | Applicable | |||||||||
① On July 9, 2020, the Company held the 7th meeting of the 5th Board of Directors and the 5th meeting of the 5th Supervisory Board, which reviewed and approved the Proposal on Temporary Replenishment of Working Capital with Idle Raised Funds. It was agreed that the Company shall use the idle raised funds not exceeding RMB 2.5 billion to temporarily supplement working capital. The validity period shall not exceed 12 months from the date of approval by the Board of Directors. After expiration, it shall be returned to the special account for raised funds in a timely manner. The Company returned RMB 0.8 billion and RMB 1.7 billion of the raised funds to the special account for raised funds in advance on September 17, 2020 and November 4, 2020 respectively. ② On November 5, 2020, the Company held the 11th meeting of the 5th Board of Directors and the 9th meeting of the 5th Supervisory Board, which reviewed and approved the Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds. It was agreed that the Company temporarily supplements the working capital with idle raised funds of no more than RMB 2.5 billion. The validity period shall not exceed 12 months from the date of approval by the Board of Directors. After expiration, it shall be returned to the Company's special account for raised funds in a timely manner. The Company returned RMB 0.5 billion and RMB 2 billion of the raised funds to the special account for raised funds on October 29, 2021 and November 3, 2021 respectively. ③ On November 8, 2021, the Company held the 24th meeting of the 5th Board of Directors and the 19th meeting of the 5th Supervisory Board, which reviewed and approved the Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds. It was agreed that the Company temporarily supplements the working capital with idle raised funds of no more than RMB 1.2 billion. The validity period shall not exceed 12 months from the date of approval by the Board of Directors. After expiration, it shall be returned to the Company's special account for raised funds in a timely manner. The Company returned the above-mentioned RMB 300 million, RMB 100 million and RMB 100 million of the raised funds to the special account for raised funds on February 24, 2022, May 16, 2022, and August 29, 2022 respectively. The Company returned the remaining RMB 700 million of the raised funds to the special account for raised funds on November 4, 2022. ④ On November 21, 2022, the Company held the 1st meeting of the 6th Board of Directors and the 1st meeting of the 6th Supervisory Board, which reviewed and approved the Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds. It was agreed that the Company temporarily supplements the working capital with idle raised funds of RMB 450 million. The validity period of which shall not exceed 12 months from the date of approval by the Board of Directors. After expiration, it shall be returned |
Committed investment projects and investment of over-raised funds | Whether the project has been changed (including partial changes) | Total committed investment of raised funds | Total investment after adjustment (1) | Amount invested during the reporting period | Accumulated investment amount at the end of the reporting period (2) | Investment progress at the end of the period (3)=(2)/(1) | The date on which the project reaches its intended usage state | Benefits realized during the reporting period | Whether it achieved the expected benefits | Whether there is any significant change in the feasibility of the project |
to the special account for raised funds in a timely manner. The Company returned the above-mentioned RMB 450 million of the raised funds to the special account for raised funds on November 16, 2023. | ||||||||||
Permanent replenishment of working capital | The Company held the 11th meeting of the 6th Board of Directors and the 10th meeting of the 6th Supervisory Board on December 5, 2023, and held the 2nd extraordinary general meeting of 2023 on December 21, 2023, which reviewed and approved the Proposal on Changing the Use of Part of the Raised Funds to Permanently Replenish Working Capital. It was agreed that the remaining raised funds originally planned for the Qingdao R&D center project would be used to permanently replenish the working capital for the Company's daily production and operation, as well as business development. On December 22, 2023, the Company transferred the above-mentioned RMB 537.0318 million for permanent replenishment of working capital to the general account of Goertek Technology Co., Ltd. | |||||||||
Amount and reasons for the balance of raised funds in the implementation of the project | Not applicable | |||||||||
Purpose of the raised funds that have not been yet used | As of the end of this reporting period, unused raised funds were deposited in the special account for raised funds. | |||||||||
Problems or other situations in the use and disclosure of raised funds | None |
(3) Changes in the projects in which the raised funds were proposed to be invested
? Applicable ? Not applicable
Unit: RMB 10,000
New project after change | Original project before change | The total amount of raised funds planned to be invested in the new project (1) | Actual investment amount during this reporting period | Actual cumulative investment amount as of the end of the period (2) | Investment progress at the end of the period (3)=(2)/(1) | The date on which the project reaches its intended usage state | Benefits realized during the reporting period | Whether it achieved the expected benefits | Whether the feasibility of the new project has changed significantly |
Permanent replenishment of working capital | Qingdao R&D center project | 52,729.01 | 53,703.18 | 53,703.18 | - | Not applicable | Not applicable | Not applicable | Not applicable |
Total | - | 52,729.01 | 53,703.18 | 53,703.18 | - | - | - | - | - |
Reasons for changes, decision-making procedures, and information disclosure (by project) | Since the second half of 2022, the macro economy, the consumer electronics industry, and the Company's business operations all faced new challenges. The implementation background of the Qingdao R&D center project also changed significantly in the following aspects: ① Significant changes in macro economy and consumer electronics industry Since the second half of 2022, the consumer electronics industry has been affected by multiple negative factors, including the global economic slowdown, high inflation in major European and American |
countries, and continuous interest rate hikes by central banks such as the Federal Reserve. As a result, the market demand for consumer electronics has declined. Global shipments of VR/AR products declined significantly in 2023, according to data from IDC, Canalys, and Counterpoint. Shipments of smart wearables (smart watches and smart bands) and TWS smart earphones in the same period also fell below expectations to varying degrees. The development of major smart hardware products in the consumer electronics industry had undergone significantly changes since the initial implementation of the Qingdao R&D center project. It's necessary for the Company to prudently evaluate and adjust the scale and pace of the Company's resource investment according to the changes in the external environment, and make corresponding adjustments to the Company's related fundraising projects. ② Changes in the Company's business operations Since the second half of 2022, the Company's operating performance has fluctuated. This is due to the overall insufficient market demand for traditional and emerging smart hardware products, the lower-than-expected terminal sales of the Company's clients, and the fluctuations in the specific product project. The Company's business operations and revenue growth have changed significantly since the Qingdao R&D center project was first implemented. This requires the Company to adjust the scale and pace of its overall resource investment, including the fundraising projects, to ensure that its resource investment is in line with its business development. In addition, the Company has invested in the design, research and development, and experimental capabilities of precision optical components required for VR/AR products, as well as advanced process technology capabilities such as nano-imprinting in Weifang, Shanghai, and other places in recent years. This investment can, to some extent, fulfill some of the functions originally planned for the Qingdao R&D center project. The Company is also working closely with the National Virtual Reality Innovation Center (Qingdao) to make better use of the existing resources of the Qingdao R&D center project. Decision-making procedures and information disclosure: On December 5, 2023, the Company conducted the 11th meeting of the 6th Board of Directors and the 10th meeting of the 6th Supervisory Board. Additionally, on December 21, 2023, the Company held its 2nd extraordinary 'general meeting of the year. These meetings reviewed and approved the Proposal on Changing the Use of Part of the Raised Funds to Permanently Replenish Working Capital. For more details, please refer to the announcement made by Goertek Inc. on December 6, 2023, disclosed on the Company's designated information disclosure media. | |
Cases and reasons for not reaching the planned progress or expected benefits (by project) | Not applicable |
Description of significant changes in the feasibility of the new project | Not applicable |
Ⅷ. Sales of major assets and equities
1. Sales of major assets
? Applicable ? Not applicableThe Company did not sell any major assets during the reporting period.
2. Sales of major equity
? Applicable ? Not applicable
Ⅸ. Analysis of major subsidiaries and associates
? Applicable ? Not applicableMajor subsidiaries and associates with an impact of more than 10% on the Company's net profit
Unit: RMB
Name of company | Type of company | Main business | Registered capital | Total assets | Net asset | Operating revenue | Operating profit | Net profit |
Goertek Technology Vina Company Limited | Subsidiary | Electronic component manufacturing | USD 120,000,000 | 11,839,433,292.53 | 4,739,848,864.35 | 19,494,416,161.59 | 703,073,226.87 | 681,158,372.06 |
Name of company | Type of company | Main business | Registered capital | Total assets | Net asset | Operating revenue | Operating profit | Net profit |
Goertek (HongKong) Co., Limited | Subsidiary | Trade and investment | USD 1,000,000 | 15,022,058,814.99 | 1,899,140,181.16 | 83,041,950,587.21 | 417,978,150.29 | 352,370,090.30 |
Goertek Intelligence Technology Co., Ltd. | Subsidiary | Electronic component manufacturing | 350,000,000.00 | 2,855,524,321.73 | 282,856,592.01 | 6,368,986,368.88 | 305,414,592.13 | 307,408,139.93 |
Yili Precision Manufacturing Co., Ltd. | Subsidiary | Electronic component manufacturing | 330,000,000.00 | 2,699,530,121.75 | 1,117,680,164.40 | 2,587,950,145.32 | 285,114,297.70 | 255,938,632.59 |
Rongcheng Goertek Technology Co., Ltd. | Subsidiary | Electronic component manufacturing | 2,100,000,000.00 | 7,276,682,209.51 | 2,352,497,685.46 | 42,072,590,896.18 | 226,437,113.34 | 183,074,829.58 |
Weifang Goertek Microelectronics Co., Ltd. | Subsidiary | Electronic component manufacturing | 500,000,000.00 | 2,659,366,300.21 | 1,870,818,274.25 | 2,058,212,163.52 | 126,783,965.01 | 121,935,895.54 |
Weifang Goertek Electronics Co., Ltd. | Subsidiary | Electronic component manufacturing | 1,636,601,925.00 | 9,391,149,470.21 | 2,117,620,316.01 | 25,918,055,522.17 | -308,913,686.53 | -221,382,708.53 |
Acquisition and disposal of subsidiaries during the reporting period? Applicable ? Not applicable
Name of company | Approach on acquisition and disposal of subsidiaries during the reporting period | Impact on overall production, operation and performance |
Chongqing Goertek Auto Technology Co., Ltd. | Newly established | No significant impact |
Goertek Smart Technology Vina Co.,Ltd. | Newly established | No significant impact |
GMI Technology GmbH | Newly established | No significant impact |
Uphoton Technology (Shaoxing) Co., Ltd. | Equity acquisition | Strengthening the Company's layout in the optical field and supporting the long-term future development of the Company's optical business |
Kunshan Goertek Electronics Co., Ltd | Deregistered | No significant impact |
Description of major subsidiaries and associatesNone
Ⅹ. Structural Entities Controlled by the Company? Applicable ? Not applicableXI. Outlook for the Future Development of the Company
1. Industry trend and competition
The global technology and consumer electronics industry is continuing to shift from the mobile Internet era to the post-mobile era. Therapid development of AI technology in recent years has brought new influences and opportunities to the development process of thisindustry.In the era of mobile Internet, smartphones and their peripheral products are the main drivers of development in the technology andconsumer electronics industries. However, in recent years, the innovation speed of software and hardware of smartphone products hasslowed down, and the growth of market scale has stagnated. IDC predicts that global smartphone shipments will reach 1.2 billion unitsin 2024, with an approximate 2.8% YoY increase. With the slow growth of the smartphone market, the industry generally expectsemerging smart hardware products, such as VR, MR, and AR devices, to become the main driving force for the development of theindustry in the post-mobile era.
In 2023, the development speed and market size growth of some emerging smart hardware products were slower than expected. Thiswas due to both external objective factors, such as the weak global economic recovery, interest rate hikes in major European andAmerican countries, and insufficient market demand, and internal industry factors, such as the need for further breakthroughs in keytechnologies for some products, the need for further development of product application scenarios, and the need for further enrichmentof software applications and content. The development of emerging smart hardware products is still being actively promoted. Well-known technology and consumer electronics manufacturers continue to invest heavily in this field and continue to launch newrepresentative products. Driven by the industry as a whole, and with the recovery of the macro economy and the consumer electronicsindustry, emerging smart hardware products are expected to continue to develop healthily in the next few years.IDC predicts global shipments of VR and MR devices to reach 24.7 million units by 2028, with a compound annual growth rate ofabout 29.2% from 2023 to 2028. With the development of software and hardware technologies such as image sensing and spatialcomputing, the boundaries between VR and MR are further blurred, and MR products have gradually become the mainstream of themarket. In the next few years, more well-known manufacturers in the industry are expected to follow this product technology trend.The exploration of application scenarios and software content for MR products is expected to accelerate and usher in explosive growth.IDC predicts global AR device shipments to reach 10.9 million units by 2028, with a compound annual growth rate of about 87.1%from 2024 to 2028. AR products have the product characteristics of "blending the virtual and real worlds", the ability to seamlesslylink with the mobile Internet content ecosystem, and the potential for integration with AI technology, showing huge future applicationpotential and market potential. Well-known manufacturers in the industry continue to promote the development of related newtechnologies such as semiconductor chips, microdisplays, and optical waveguides. As the relevant technical bottlenecks are overcome,mature AR products are expected to be gradually introduced to the market in the next few years and usher in rapid development.Canalys predicts global smart wearable shipments to reach 204 million units in 2024, with an approximate 10% YoY increase. Asconsumers pay more attention to exercise and health in the post-mobile era, high-precision and high-reliability vital signs monitoringtechnology, especially ECG, blood pressure monitoring, and non-invasive blood glucose monitoring technology, is currently the focusof innovation for hundreds of millions of patients with hypertension, diabetes, and subhealthy individuals around the world. Relevanttechnological breakthroughs in the above fields are expected to bring new explosive growth to smart wearable products.In recent years, the development of AI technology, represented by large language models, has been remarkable. It is also expected tobring new development opportunities for the consumer electronics industry and emerging smart hardware products. On the one hand,the combination of AI and emerging smart hardware products will create a wide range of new product application scenarios, makingsmart hardware products more intelligent and user-friendly. This will improve the consumer experience of smart hardware productsand create new market demand. AI has significant efficiency advantages in content creation. It can help solve the problem of insufficientsoftware and content for VR and MR smart hardware products. This will promote consumer demand, enhance adhesiveness of user,and better support the innovation and development of business models. AI technology also has broad application prospects in thesoftware/hardware development and intelligent manufacturing of smart hardware products.The development of emerging smart hardware products and the accompanying increase in demand for precision optical componentsand modules, precision acoustic components, MEMS sensors and microsystem modules, haptic components, precision structural parts,and other related products will present new growth opportunities for the Company's emerging smart hardware and precisioncomponents businesses. Embracing the opportunities presented by the post-mobile era, the Company will actively respond, build onits existing advantages, continue to consolidate core competitiveness, actively expand existing business, and actively lay out newproduct and business directions to achieve sustained and healthy development of the Company.In terms of industry competitive pattern, the concentration trend in the global technology and consumer electronics industries isexpected to continue. In the post-mobile era, massive investment in technological innovation and R&D is required for the developmentof smart hardware products, for which the "soft power" of the ecosystem, such as developer base, user base, software applications,entertainment content, community loyalty and data monetization, becomes more and more important. The leading companies withcapital, talent, technology and ecosystem advantages are expected to strengthen their competitive advantages, so as to lead technologyand product innovation in the industry.In terms of the supply chain, the electronic manufacturers in China are strengthening their overall competitiveness. These manufacturersare expected to better meet the needs of electronic product manufacturing in the post-mobile era and gain new opportunities ofdevelopment. However, it should also be noted that the changes in international political and economic landscapes, especially therelationship between major countries, may have a significant impact to pattern of the industrial supply chain. To which, manufacturersneed to pay more attention and respond carefully and scientifically.
2. Strategy for future development
Looking into the future, the Company will actively respond to the innovation-driven development strategy, promote the upgrade ofindustrial structure, strengthen technological innovation, and accelerate the development of a modern industrial system. It will seize
the opportunities presented by the post-mobile era, actively track the development trends of advanced technologies such as 5G, AI,IoT, and cloud computing, and closely follow the evolution and application of AI technologies. It will continuously deepen its presencein the fields of emerging smart hardware and precision components, strengthen strategic partnerships with leading global clients, andfulfill its economic and social responsibilities, thus to achieve stable and healthy growth of enterprise value in return for shareholders.
(1) Actively grasp the new opportunities in the post-mobile era, and further promote the Company's strategy of "precision components+ smart hardware". Continue to strengthen the competitiveness of precision components and smart hardware products, and activelydevelop the business related to next-generation smart hardware products. Utilize the synergy between the Company's componentbusiness and system device business, continue to strengthen the core capabilities in precision and intelligent manufacturing, create aGoertek Production System for the future intelligent manufacturing era, and provide clients with first-class vertically integrated productsolutions and "one-stop" R&D and manufacturing services.
(2) Continue the key-account strategy, remain client-oriented, maintain good relationships with core clients, and utilize the Company'sadvantages in client resources. Focus on serving leading clients in the global technology and consumer electronics industry, andcontinue to consolidate long-term strategic cooperation with clients. Closely follow the strategical planning and development of world-class clients, and to create a global system of R&D, manufacturing and sales services accordingly. Continue to satisfy our clients withour business, technology, engineering, operation and delivery services, in order to achieve win-win cooperation and to grow with theworld-class clients.
(3) Adhere to technological innovation and continue to invest in R&D. Constantly improve the Company's technical competitivenessin acoustics, optics, microelectronics, microdisplay, precision manufacturing, automation, IT technology, software algorithms, etc., tobuild the core technical competitiveness for future development. Firmly implement the talent strategy by recruiting outstandingpersonnel in management and technology fields around the world, build and effectively motivate a first-class talent team, thus toprovide sufficient talents for future development of the Company.
(4) Constantly improve corporate governance and management, and promote the standardized and efficient internal operation.Continuously improve the internal structure, processes and internal management system. Strengthen the awareness of lean operation,improve the level of lean operation and seek benefits from it. Being market-oriented and client-oriented, continues to push forwardinternal reform and innovation, and to build core competitiveness upon continuous reform and innovation activities. Continuouslyenhance the digitalization and informatization of internal operations management, and actively explore the application of big data andartificial intelligence technologies in operations. Create an excellent corporate culture, undertake the core values of "client orientation,employee development, trustworthy, cooperation and mutual benefits", and earnestly fulfill economic and social responsibilities, to bea great company.
3. Business operation during the reporting period and business plan for next year
During the reporting period, the Company carried the "precision components + smart hardware" strategy, remained client-oriented, andfocused on key accounts. By leveraging the synergy between the components business and system device business, the Companycompleted various important tasks such as business expansion, project delivery, and operation improvement. The Company'smanagement team strengthened its crisis management awareness and actively carried out work to continuously promote clientorientation and client service capabilities, achieving positive results. The Company continued to promote organizational changes andoperational management improvements, maintain efficient internal decision-making operations, and improve internal operationalmanagement levels, laying a solid management and operational foundation for future long-term development. The Company continuedto invest in R&D and technological innovation, completed more patent applications and gained more patent approvals, strengthenedthe capabilities of R&D and talent team, and further strengthened the core competitiveness of the Company. The Company's revenueand profitability declined to a certain extent during the reporting period due to a combination of factors, including sluggish overalldemand in the consumer electronics industry, declining shipments of VR and other smart hardware products, and changes in theCompany's business structure. Despite the short-term pressure on its performance, the Company's core competitiveness and industryposition remained strong. These temporary setbacks will not undermine the Company's foundation for stable development nor alter theoverall trend of its long-term, healthy growth.Looking into the year of 2024, the Company still faces many challenges due to weak recovery of global economy and the complexitiesin the external environment. However, there are new business opportunities in the global technology and consumer electronics industry.The application areas of emerging smart hardware products are constantly expanding, the software and hardware ecosystem iscontinuously being improved, and the integrated development of emerging smart hardware and AI technologies bring new opportunitiesto the industry. The management and the staff of the Company will continue to implement our strategy and to achieve businessobjectives, so as to return the shareholders with good business performance and continuous growth of the value of the Company.
(1) Maintain strategic focus and grasp development opportunities
The Company will seize the business opportunities of smart hardware products in the post-mobile era by adhering to the "precisioncomponents + smart hardware" strategy and utilize the synergy between the components and system device business. The Companywill further expand the business of smart hardware products by virtue of its core technological capabilities and advanced productsolutions in the field of precision components. And through that business development, the Company will create more applications anddemand for the precision components. By integrating the core capabilities in precision manufacturing and intelligent manufacturing,the Company will be able to provide first-class "one-stop" R&D and manufacturing services to global clients
(2) Adhere to the client orientation philosophy and key-accounts strategy, identify and serve strategic clientsFollow the strategy and business plan of core clients, the Company will carry out corresponding business, products and capacity plans,work with the client in their frameworks and schedules and provide industry-leading R&D and manufacturing services. The Companywill continuously build excellent client service team to satisfy our clients in long term in all aspects of business, technology, engineering,operation, and delivery, to enhance client loyalty and satisfaction, and achieve mutual benefits cooperation with clients.
(3) Empower business expansion and create new opportunities
Based on the integration of the existing business advantages in precision components and smart hardware products, the Company willfurther explore new directions and opportunities. By grasping the opportunities in precision optical components and modules, sensors,microsystem modules, VR, MR, AR, smart wearables, and other products, the Company will secure the key projects to obtain coreclients and follow up with new opportunities in automotive electronics, microdisplay, and other fields as well.
(4) Improve lean operation and complete successful delivery of key projects
The Company will constantly promote the idea of lean operation to improve the level of operation and to support the business objectiveswith high-quality and efficient operation. The Company will actively build the Goertek Production System, a new intelligentmanufacturing model that meets future market needs. The Company will make thorough planning of its resources, ensure the deliveryof key projects that closely related to the strategy and the business objectives, and to achieve the goals of the Company.
(5) Continue to invest in independent R&D and technological innovation, strengthen core competitiveness with talent strategyThe Company will continue to invest in R&D and technological innovations centered on future strategic directions, and strengthen thetechnical capabilities in the fields of acoustics, optics, microelectronics, microdisplay, precision and intelligent manufacturing. TheCompany will integrate the managerial and technical talents globally, keep bringing in high-level talents, carry out solid efforts in theselection, cultivation, motivation and retention of talents, and to support the Company's strategic implementation and businessdevelopment with high-quality talent echelon.
(6) Effectively control risks and maintain healthy operation
The Company will continue to maintain a sound business strategy, strengthen risk awareness, pay close attention to changes in theexternal environment, perform effective control on risk indicators in production operation of the Company, take the initiative to identifyand resolve potential risks, and ensure sustainable development of production and operation activities.
4. The demand and planning of fund
The Company maintains a healthy asset and liability structure, and obtained a good long-term cooperative relationship with banks andother major financial institutions. In 2024, the Company will continue to improve the management of cash, optimize payment terms,control capital expenditure and enhance the efficiency of fund. The Company will carefully evaluate various financing tools to optimizethe asset-liability ratio and debt structure and carefully manage financial derivatives trading activities with strict standards, to activelyavoid liquidity risks and foreign exchange risks. And with all the measures above, to thus provide stable and sufficient financial supportto the development of the Company.
5. Future risks
(1) Macroeconomic risks
Global economy has yet to recover. Inflation remains high in major European and American countries. Unfavorable factors thataffecting investment and consumption still exist, which may hinder the development of the global technology and consumer electronicsindustry in the short term. The world political and economic situation remains complex. Trade disputes between major countries andgeopolitical events have brought uncertainties to the global economy, which may adversely affect the business of the Company. Someintelligent hardware products, such as smartphones, have slowed down or stagnated in growth rate, and some next-generation smarthardware products may develop slower than expected. This may impact the global market demand as well as the Company's businessperformance.
(2) Operational risks
① Risks of relatively concentrated clients
The competitive pattern of global technology and consumer electronics industry, along with the Company's business model and keyaccount strategy, determined a relatively concentrated client structure. As a result, the business income from a few core clients accountsfor a large proportion of the Company's overall income. Although the above clients are global industry leaders who have significantcompetitive advantages and market position, and have maintained long-term and stable cooperative relations with the Company, undersome special circumstances, they may bring fluctuations and risks to the Company's business if their business activities fluctuate, ortheir relationship with the Company changes.
② Risks of exchange rate fluctuation
Exports constitute a significant portion of the Company's total income. At the same time, the Company also imports a considerablenumber of raw materials, equipment and other products from overseas. These import and export businesses are primarily settled in USdollars. Although the Company has adopted appropriate risk hedging tools, the significant fluctuation of foreign exchange rates maystill bring certain exchange rate risks to the Company.
③ Risks of loss of core technical talents
The technology and consumer electronics industry is a talent intensive industry. Therefore, the demand for core technical talents isstrong, and the competition for talents is very fierce. Core technical talents are the key resources for the Company to continuouslyimprove its core competitiveness and realize long-term development. For this reason, the Company will continue to improve variousincentive and restraint mechanisms in order to retain core technical talents. Under fierce competition, there may still be the loss of coretechnical talents, which may put the Company at a disadvantage in the competition and affect the business development.
(3) Risks of management
In recent years, the Company's various product lines have expanded rapidly, leading to a larger business scale and a wider range ofproducts. This has placed higher demands on the Company's overall operational and management capabilities. The Companyimplements the strategic plan of developing core client business and exploring new opportunities, which requires the Company'smanagement to maintain excellent abilities of judgment, execution and management. If the Company's management fails to match thebusiness growth, or fails to be improved to meet the needs of the Company's development, it may affect the execution of strategicplanning and the delivery of business objectives, thus bringing management risks to the Company.Ⅻ. Reception, research, communication, interview and other activities during the reportingperiod
? Applicable ? Not applicable
Reception time | Reception place | Type of communication | Type of attendees | List of attendees | Main content of discussion and information provided | Index of related information |
April 21, 2023 | The Company | Other | Other | Investors attending the Company's performance presentation meeting of 2022 | The Company's overall operation and business development | The record of investor relations activities published on www.cnifo.com.cn on April 21, 2023 |
May 10, 2023 | The Company | Field research | Other | Investors attending the Company's 2022 annual general meeting | The Company's overall operation and business development | The record of investor relations activities published on www.cnifo.com.cn on May 10, 2023 |
XIII. Implementation of the Action Plan for Improving Quality and Investor Returns
Has the Company disclosed the Action Plan for Improving Quality and Investor Returns?? Yes ? NoIn line with the guidelines outlined in the conference of the Political Bureau of the Central Committee of the CPC and the State Councilexecutive meeting to invigorate the market and boost investor confidence, and to safeguard the interests of all shareholders, theCompany has formulated the Action Plan for Improving Quality and Investor Returns. The specific measures and progress of theCompany's implementation are as follows:
1. Focus on the main business, create value for shareholders, and take actions to feedback the societyThe Company's main businesses include precision components business, smart audio devices business, and smart hardware business.The Company serves the leading global clients in the technology and consumer electronics industry by providing them with verticallyintegrated products of precision components and smart hardware, as well as related design, R&D, and manufacturing services.Driven by the mission of "A better life enriched by technology", the Company is committed to creating value for all shareholders andthe society. After more than 20 years of development, the Company has built industry-leading precision manufacturing and intelligentmanufacturing capabilities. In terms of internal management, the Company builds a strong management team that ensures efficientinternal decision-making and maintains a high level of lean operations. In terms of external cooperation, the Company has long-termstrategic cooperation with industry-leading clients and has stable relationships with them.Looking into the future, the Company will focus on its main business, actively respond to the innovation-driven development strategy,actively track the development trends of advanced technologies such as 5G, AI, IoT, and cloud computing. It will continuously deepenits presence in the fields of emerging smart hardware and precision components, strengthen strategic partnerships with leading globalclients, and fulfill its corporate economic and social responsibilities. Through the Company's stable and healthy growth, it willmaximize enterprise value and shareholder returns. The Company will always strive to create value for its shareholders while feedingback the society.
2. Continue to strengthen technological innovation capabilities and build industry-leading core competitivenessTechnological innovation is the driving force behind business growth. It is at the forefront of the Company's agenda. The Companyattaches great importance to the integration and cultivation of outstanding talents in the fields of acoustics, optics, microelectronics,wireless communication, precision manufacturing, automation, and other sectors around the world. The Company has set up a team oftechnical talents with profound technical strength and rich experience in product projects and has made long-term cooperation withmany well-known universities and scientific research institutions, forming an open and comprehensive technology R&D platform insupport of continuous innovation and R&D of technologies and products. As of December 31, 2023, the Company has totally appliedfor 32,209 patents, including 4,031 foreign patent applications and 17,896 invention patents applications; a total of 19,905 patents havebeen granted, including 6,809 invention patents.Looking ahead, the Company will continue to invest in R&D and technological innovations centered on future strategic directions, andstrengthen its technical capabilities in the fields of acoustics, optics, microelectronics, microdisplay, precision manufacturing, andintelligent manufacturing. The Company will integrate the managerial and technical talents globally, keep bringing in high-level talents,carry out solid efforts in the selection, cultivation, motivation and retention of talents, and to support the Company's strategicimplementation and business development with high-quality talent echelon.
3. Continue to improve corporate governance, business management, and lean operation levelsThe Company will continue to standardize the governance mechanisms of "General meeting, Board of Directors, Supervisory Board,and senior management" to improve the level of corporate governance, continuously improve the internal control system, and solidifythe foundation of internal governance. The Company will clearly define its rights and obligations, as well as those of its shareholdersto prevent the abuse of shareholder rights or the exploitation of the management's dominant position, which could harm the interestsof minority investors. The Company will encourage the active participation of minority investors in general meetings, facilitate theinvolvement of various types of investors in decision-making on major matters, and enhance investors' influence and satisfaction. TheCompany will continue to strengthen its internal control system and enhance risk management to improve decision-making capabilities.This will create a virtuous cycle for the Company's development and provide strong protection for the legitimate rights and interests ofthe shareholders.In the face of a complex and ever-changing market landscape and industry trends, the Company's management team will furtherenhance its operational management capabilities, uphold its client orientation approach, and strengthen business expansion tocontinuously cultivate new growth drivers. The Company will continuously enhance its lean operations capabilities to drive efficiencyand support the achievement of its business objectives. The Company will continue to maintain a sound business strategy, strengthenrisk awareness, and take the initiative to identify and resolve potential risks to ensure the sustainable development of its productionand operational activities.
4. Actively repurchase shares to enhance investor confidence
Based on the unwavering confidence in the Company's future development and the recognition of its long-term value, the Companyhas initiated a share repurchase plan to further enhance its long-term incentive mechanism. This move aims to effectively align theinterests of shareholders, the Company, and its core team, thereby fostering sustainable growth and reinforcing investor confidence.On October 26, 2023, the Company's Board of Directors held the 10th meeting of the 6th Board of Directors. During the meeting, theProposal on the Repurchase of Company Shares through Continuous Trading Approach was reviewed and approved. The Companyis authorized to use its own funds to repurchase a portion of its outstanding A-shares through continuous trading approach. These
repurchased shares will be utilized for future employee stock ownership plans or stock option incentive plans. The total amount offunds allocated for the repurchase shall not be less than RMB 500 million (inclusive) and not exceed RMB 700 million (inclusive).The repurchase price per share shall not exceed RMB 25.49 (inclusive). The repurchase period shall extend for 12 months from thedate of the Board of Directors' approval of the repurchase plan.The Company initiated the above-mentioned stock repurchase on November 16, 2023, through continuous trading approach via thespecial securities repurchase account. As of December 31, 2023, the Company had repurchased a total of 9,632,700 shares throughcontinuous trading approach with the specific securities repurchase account, representing 0.28% of the Company's total outstandingshares. The repurchase cost was RMB 177,637,427.00 (excluding transaction fees). As of the reporting date of this report, the Companyhas repurchased 34,205,700 shares through continuous trading approach via the specific securities repurchase account, accounting for
1.00% of the total share capital of the Company. The repurchase cost is RMB 596,685,920.70 (excluding transaction costs).
5. Increase cash dividends and enhance investor returns
Shareholder returns are a top priority for the Company. The Company has strictly implemented the Shareholder Return Plan for theNext Three Years (2022-2024), and clarifies the standard, ratio, and the decision-making procedures of the distribution policy, whichensures the continuity and stability of the profit distribution policy, in order to fully protect the legitimate rights and interests of minorityinvestors. From 2021 to 2023, the Company's cumulative cash dividends reached RMB 1.509 billion, accounting for 51.01% of theaverage annual net profit from 2020 to 2022. In addition, to demonstrate its confidence in long-term growth, the Company hasconducted multiple share repurchases. Between 2021 and 2023, the total repurchase amount reached RMB 2.178 billion.In 2024, the Company's proposed profit distribution plan for the year 2023 is as follows: based on the total share capital registered onthe record date of equity distribution minus the repurchased shares in the Company's specific securities repurchase account, theCompany will distribute cash dividend of RMB 1.00 (tax inclusive) for per 10 shares to all the shareholders, as well as 0 bonus shares(tax inclusive), and there is no conversion of capital surplus into share capital. Although the Company experienced a certain degree ofdecline in revenue and net profit during the reporting period, it continued its consistent cash dividend payout to enhance shareholderreturns.In the future, the Company will continue to prioritize investors, striving to enhance shareholder returns and fulfill its obligations as apublicly listed entity. It remains dedicated to the strategy of 'improving quality and investor returns,' focusing on main business,fostering sustainable growth, and elevating corporate governance standards. These efforts aim to bolster investor confidence andcontribute positively to market stability and sentiment.
Section IV Corporate GovernanceⅠ. Corporate Governance in PracticeDuring the reporting period, the Company continuously improved the corporate governance structure, the internal management andcontrol system, and continued to carry out corporate governance activities in strict accordance with the requirements of relevant laws,regulations and normative documents such as the Company Law, the Securities Law, Code of Corporate Governance for ListedCompanies, Rules Governing the Listing of Shares on Shenzhen Stock Exchange as well as with relevant documents of China SecuritiesRegulatory Commission and the relevant instructions of Shandong Securities Regulatory Bureau, so as to further standardize theCompany's operation and improve the level of corporate governance.During the reporting period, the Company has comprehensively reviewed its relevant corporate governance policies per the latestrequirements of the Opinions of the General Office of the State Council on Reforming the Independent Director System of ListedCompanies, the Measures for the Administration of Independent Directors of Listed Companies, No 3 Guideline for Supervision ofListed Companies - Cash Dividend Distribution of Listed Companies, and the Guidelines for Articles of Association of ListedCompanies. In combination with the Company's actual situation and business development needs, the Company had revised more than10 rules and regulations, including the Articles of Association and the Working System for Independent Directors.By the end of the reporting period, the actual practice of corporate governance met the relevant requirements of the above laws,administrative regulations, departmental rules and normative documents on the governance of listed companies, and no documentsconcerning administrative supervision measures taken by the regulatory authorities was received.As of the end of the reporting period, the Company's corporate governance practices complied with the relevant regulatory requirementsissued by the China Securities Regulatory Commission (CSRC). The details are as follows:
1. Shareholders and general meetings: The Company convened and held general meetings in strict accordance with the Rules for theGeneral Meetings of Listed Companies and the Company's Rules of Procedure of General Meetings, so as to ensure that all shareholders,especially minority shareholders, enjoy equal status and fully exercise their rights. In addition, lawyers were engaged to witness thelegitimacy of the convening, holding and voting procedures of each general meeting of shareholders.
2. The Company and controlling shareholders: The Company, with independent business and operation autonomy, is independent ofthe controlling shareholders in business, personnel, assets, organizations and finance. The Board of Directors, Supervisory Board andinternal institutions of the Company operate independently. The Company's controlling shareholder strictly regulates its own behavior,and there was no direct or indirect interference with the Company's operations and decision-making beyond the general meeting ofshareholders.
3. Directors and the Board of Directors: The Company elects directors in strict accordance with the election and appointment proceduresstipulated in the Articles of Association. There are three independent directors in the Board, the number of directors and the compositionof the Board of Directors meet the requirements of laws and regulations and the Articles of Association. All directors of the Companycarried out their work per the Rules of Procedure of the Board of Directors and Working System for Independent Directors". Theyattended the Board of Directors and general meetings, participated in relevant knowledge training, and were familiar with relevant lawsand regulations.
4. Supervisors and the Supervisory Board: The election of supervisors and the composition of the Supervisory Board were in strictaccordance with relevant provisions of the Company Law and Articles of Association. The Company's supervisors strictly followed theRules of Procedure of the Supervisory Board. They diligently carried out their responsibilities, effectively overseeing and providingindependent opinions on the Company's major affairs, related party transactions, financial status, and the performance of directors andmanagers.
5. Performance evaluation and incentive-restraint mechanism: The Company has gradually improved its fair and transparentperformance evaluation standards and incentive and restraint mechanism for directors, supervisors and senior management. Theappointment of Company's senior management is open and transparent, and in line with the provisions of laws and regulations.
6. Stakeholders: The Company fully respects and safeguards the legitimate rights and interests of stakeholders, actively engages incommunication and collaboration with them to achieve a balanced alignment of societal, shareholder, corporate, and employee interests.This collective effort drives the Company's sustained and robust development.
7. Information disclosure and investor relations: The Company duly performed the disclosure obligations in accordance with theprovisions of Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Articles of Association and Investor RelationsManagement Rules, and discloses information as per the law, so as to ensure that the information disclosure is true, accurate, complete,timely, fair, concise, clear, free from false statement, misrepresentations and material omissions. All shareholders were given equal
access to the information. The Company has formulated and continuously renewed the Insider Information Management Rules, furtherimproved insider information management, strengthened the confidentiality of insider information, maintained the fair principle ofinformation disclosure, and protected the legitimate rights and interests of investors. The Company has designated the Board Secretaryas the person in charge of the Company's investor relations management, responsible for managing the Company's informationdisclosure and investor relations, as well as investor reception and consultations. The Company has designated Securities Times, ChinaSecurities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) as the Company'sinformation disclosure media. In 2023, the Company disclosed over 160 announcements to reveal its financial statements, operatinginformation and other significant matters to shareholders and the public in a timely manner. Meanwhile, the Company has launched aspecial column for investor relations on its official website and answers investors' questions through interactive platforms such asHudongyi of the Shenzhen Stock Exchange (http://irm.cninfo.com.cn) and the Company's investors' hotline assisting the investors inunderstanding the Company, successfully establishing a fair and effective communication bridge between the Company, its investors,and the public.Whether there is any significant difference between actual situation of corporate governance and laws, administrative regulations andthe provisions on governance of listed companies issued by CSRC? Yes ? NoThere is no significant difference between the actual situation of corporate governance and the laws, administrative regulations and theprovisions on governance of listed companies issued by CSRCⅡ. Particulars about the independence of the Company from controlling shareholder andactual controller in terms of the assets, personnel, finance, organization and businessThe Company has the capability of self-operation in its marketing, production, procurement, etc., and does not depend on majorshareholders or affiliated enterprises. The ownership of the assets is clear and belongs to the Company. There is no mixed operationwith major shareholders. The Company is completely separated from the controlling shareholders in terms of business, personnel,assets, organization, and finance. The Company has an independent and complete business, as well as the capability of self-operation.
1. Business independence: The Company had its own production, procurement and sales system, and was completely independent ofcontrolling shareholder in terms of business.
2. Personnel separation: There is a department responsible for the Company's labor, personnel and salary management. Rules andregulations have been established for assessment of employees' performance. Personnel of the Company were independent from thecontrolling shareholder. The Senior Management of the Company did not hold any positions other than director and supervisor in therelated shareholders and other entities with same or similar business.
3. Institutional independence: The Board of Directors, Supervisory Board, Senior Management and other internal organization of theCompany operated independently, and each functional department is completely independent from controlling shareholder in terms ofauthority, personnel, production operation premises, etc, and there is no subordinate relationship between the controlling shareholderand its functional departments.
4. Asset independence: The ownership of the assets between the Company and the controlling shareholder was clear. The Companyhas its independent and complete production system, auxiliary production system and supporting facilities, as well as land use rights,housing property rights, intellectual property rights, and other assets.
5. Financial independence: The Company has its own separate financial department and an independent accounting system and financialmanagement system from the controlling shareholder. The Company makes financial decisions on its own according to therequirements of relevant accounting systems of listed companies. The Company implements vertical management of the financialaffairs of its subsidiaries. The Company opened accounts in the bank independently, made tax declarations, and performed taxobligations independent of shareholders according to law.
Ⅲ. Horizontal Competition? Applicable ? Not applicable
Ⅳ. Annual General Meeting and Extraordinary General Meeting held during the ReportingPeriod
1. General meeting of shareholders during the reporting period
Session | Type of meeting | Percentage of investor participation | Convening date | Disclosure date | Meeting resolution |
General meeting of shareholders of 2022 | Annual general meeting of shareholders | 28.09% | May 10, 2023 | May 11, 2023 | For details, refer to the Announcement of Resolutions of the 2022 Annual General Meeting published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The first extraordinary general meeting of shareholders in 2023 | Extraordinary general meeting of shareholders | 28.60% | August 8, 2023 | August 9, 2023 | For details, refer to the Announcement of the Resolution of the 1st Extraordinary General Meeting in 2023 published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
Note: The percentage of investor participation refers to the percentage of the number of shares held by the participating investors tothe total share capital of the Company.
2. Extraordinary general meeting of shareholders requested by the Preference shareholders with votingrights restored? Applicable ? Not applicableV. Directors, Supervisors and Senior Management
1. Basic Information
Name | Gender | Age | Position | Appointment status | Term start date | Term end date | Number of shares held at the beginning of the period(shares) | Number of shares increased during the period (shares) | Number of shares decreased during the period (shares) | Other increase/decrease (shares) | Number of shares held at the end of the period (shares) | Reason for change in shares |
Jiang Bin | Male | 58 | Chairman | Incumbent | July 27, 2007 | November 14, 2025 | 287,397,406 | 287,397,406 | ||||
Li Youbo | Male | 47 | Director | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
President | Incumbent | April 7, 2023 | November 14, 2025 | |||||||||
Vice President | Appointments and Removals | June 2, 2021 | April 7, 2023 | |||||||||
Duan Huilu | Male | 48 | Director | Incumbent | February 4, 2016 | November 14, 2025 | 3,474,500 | 3,474,500 | ||||
Vice President | Incumbent | March 25, 2011 | November 14, 2025 | |||||||||
Liu Yaocheng | Male | 51 | Director | Incumbent | May 10, 2023 | November 14, 2025 | ||||||
Wang Kun | Female | 48 | Independent Director | Incumbent | November 8, 2019 | November 14, 2025 | ||||||
Huang Yidong | Female | 59 | Independent Director | Incumbent | November 15, 2022 | November 14, 2025 |
Name | Gender | Age | Position | Appointment status | Term start date | Term end date | Number of shares held at the beginning of the period(shares) | Number of shares increased during the period (shares) | Number of shares decreased during the period (shares) | Other increase/decrease (shares) | Number of shares held at the end of the period (shares) | Reason for change in shares |
Jiang Fuxiu | Male | 55 | Independent Director | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
Feng Pengbo | Male | 56 | Chairman of Supervisory Board | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
Xu Xiaofeng | Female | 47 | Employee representative Supervisor | Incumbent | September 17, 2013 | November 14, 2025 | ||||||
Wei Wenbin | Male | 46 | Employee representative Supervisor | Incumbent | April 27, 2021 | November 14, 2025 | ||||||
Gao Xiaoguang | Male | 48 | Vice President | Incumbent | April 12, 2012 | November 14, 2025 | ||||||
Liu Chunfa | Male | 48 | Vice President | Incumbent | October 10, 2013 | November 14, 2025 | 864,000 | 864,000 | ||||
Jiang Hongzhai | Male | 54 | Vice President | Incumbent | October 10, 2013 | November 14, 2025 | ||||||
Yu Dachao | Male | 46 | Vice President | Incumbent | October 24, 2016 | November 14, 2025 | ||||||
Rao Yi | Male | 41 | Vice President | Incumbent | April 7, 2023 | November 14, 2025 | ||||||
Li Yongzhi | Male | 46 | Chief Financial Officer | Incumbent | January 27, 2021 | November 14, 2025 | ||||||
Xu Dapeng | Male | 40 | Board Secretary | Incumbent | April 23, 2023 | November 14, 2025 | ||||||
Jiang Long | Male | 50 | Director and Vice Chairman | Resigned | July 27, 2007 | April 6, 2023 | 250,345,197 | 250,345,197 | ||||
President | Resigned | October 30, 2014 | April 6, 2023 | |||||||||
Kazuyoshi Yoshinaga | Male | 57 | Vice President | Resigned | October 24, 2016 | March 7, 2023 | ||||||
Jia Jun'an | Male | 53 | Vice President, Board Secretary | Resigned | October 10, 2013 | April 22, 2023 | 800,000 | 800,000 | ||||
Total | - | - | - | - | - | - | 542,881,103 | 542,881,103 | - |
Whether there is any resignation of directors, supervisors and senior management during the reporting period? Yes ? NoDuring the reporting period, Director, Vice Chairman and President Jiang Long, Vice President Kazuyoshi Yoshinaga and VicePresident and Board Secretary Jia Jun'an were dismissed for personal reasons.Changes in directors, supervisors and senior management? Applicable ? Not applicable
Name | Position | Type | Date | Reason |
Kazuyoshi Yoshinaga | Vice President | Dismissal | March 7, 2023 | Personal reason |
Jiang Long | Director and Vice Chairman | Resigned | April 6, 2023 | Personal reason |
President | Dismissal | April 6, 2023 | Personal reason | |
Li Youbo | President | Appointments and Removals | April 7, 2023 | There was a change in position from Vice President to President |
Name | Position | Type | Date | Reason |
during the reporting period. | ||||
Rao Yi | Vice President | Appointment | April 7, 2023 | Appointed as the Vice President of the Company |
Jia Jun'an | Board Secretary, Vice President | Dismissal | April 22, 2023 | Work arrangement |
Xu Dapeng | Board Secretary | Appointment | April 23, 2023 | Appointed as the Board Secretary of the Company |
Liu Yaocheng | Director | Elected | May 10, 2023 | Elected as a non-independent director of the 6th Board of Directors of the Company |
2. Biographical Information
Professional backgrounds, main working experience and current duties of the Directors, Supervisors and the Senior Management
(1) Members of the Board of Directors of the Company
Jiang Bin, male, Chinese citizen with no foreign residency rights, was born in September 1966. He holds a master's degree in businessadministration from Tsinghua University and a bachelor's degree in electronic engineering from Beihang University. Mr. Jiangcurrently serves as the Chairman of the Board of the Company, which he founded in 2001. With over 30 years of experience in theelectro-acoustic industry, he also holds positions as a deputy to the 14th National People's Congress, a standing member of the 13thExecutive Committee of the All-China Federation of Industry and Commerce, and the Executive Director of the China Virtual RealityIndustry Association. Mr. Jiang has been honored with titles such as National Model Worker, Model Worker in Shandong Province,National Leading Entrepreneur in the Electronic Information Industry, Industry Leading Entrepreneur in Shandong Province, andOutstanding Figure in Shandong Province. Additionally, he has received the Highest Award in Science and Technology in ShandongProvince.Li Youbo, male, Chinese citizen with no foreign residency rights, was born in December 1977. He holds a bachelor's degree inautomation from Dalian University of Technology. Mr. Li currently serves as a Director and President of the Company. He joined theCompany in 2003 and has held various positions including engineer, technical manager, head of the business division, and VicePresident. He has nearly 20 years of experience in the R&D and manufacturing of electro-acoustic components and complete machines.Duan Huilu, male, Chinese citizen with no foreign residency rights, was born in February 1976. He holds a bachelor's degree inaccounting from Shandong University of Finance and Economics. Mr. Duan currently serves as a director and Vice President of theCompany. He joined the Company in 2001 and has held various positions including accountant, financial manager, manager of thefinance department, and Chief Financial Officer. He has more than 20 years of experience in enterprise finance.Liu Yaocheng, male, Chinese citizen with permanent residency in the United States, was born in October 1973. He holds a Ph.D. inmaterials science and engineering, a master's degree in electronic engineering from Stanford University, and master's and bachelor'sdegrees in materials science and engineering from Tsinghua University. Mr. Liu currently serves as the director of the Company. Hejoined the Company in 2019 and has held various positions, including head of the Company's Strategy and Investment Department andhead of the Company's Central Research Institute. Mr. Liu has worked at IBM semiconductor R&D center, McKinsey & Company,and Silex Microsystems AB, gaining extensive experience in technology R&D, strategic planning, investment, and M&A.Wang Kun, female, Chinese citizen with no foreign residency rights, was born in April 1976. She holds a Ph.D. in accounting from theHong Kong University of Science and Technology and a bachelor's degree in accounting from Nankai University. Currently, she servesas an associate professor in the Department of Accounting at Tsinghua University's School of Economics and Management.Additionally, she holds the positions of deputy director and senior research fellow at the Research Center for Corporate Governance atTsinghua University. She also serves as an independent director for the Company, China International Futures Co., Ltd., and LUSTERLightTech Co., Ltd. Previously, she worked as a lecturer and director of doctoral programs in the Department of Accounting at TsinghuaUniversity's School of Economics and Management. She also held positions as an independent director for Beijing Thunisoft Co., Ltd.and Integrated Electronic Systems Lab Co., Ltd. She has won the Excellence in Teaching Award of the School of Economics andManagement of Tsinghua University for several times and has rich experience in finance and auditing.
Huang Yidong, female, Chinese citizen with permanent residency in Japan, was born in March 1965, with a Ph.D. in electronicengineering from Tsinghua University. She is currently a professor in the Department of Electronic Engineering at Tsinghua University,deputy director of the academic committee at Tsinghua University, foreign academician of the National Academy of Engineering, andfellow of the OSA. She is also the executive director of the Chinese Optical Society, vice chairman of the China Education Society ofElectronics, vice president of the Branch of China Association of Higher Education, deputy editor-in-chief of ACS Photonics, andindependent director of the Company and Advanced Fiber Resources (Zhuhai), Ltd. She formerly served as a distinguished researcherat the NEC Institute of Optical-Wireless Devices, the deputy dean and head of the Department of Electronic Engineering of TsinghuaUniversity, and the dean of the Tianjin Institute of Electronic Information of Tsinghua University.Jiang Fuxiu, male, Chinese citizen with no foreign residency rights, who was born in June 1969, served as a postdoctoral fellow inaccounting at Guanghua School of Management, Peking University, and has a Ph.D. in economics from Nanjing University. He iscurrently a professor and doctoral supervisor in the Department of Finance, Business School of Renmin University of China and adirector of the Environmental, Social and Governance (ESG) Research Center of the National Academy of Development and Strategyof Renmin University of China. He also serves as an independent director of the Company. He used to serve as an independent directorof Beijing Chunju Technology Co., Ltd., Northcom Group Co., Ltd., Yantai Longyuan Power Technology Co., Ltd., Utour Group Co.,Ltd., Datang International Power Generation Co., Ltd., etc.
(2) Members of the Board of Supervisors of the Company
Feng Pengbo, male, Chinese citizen with no foreign residency rights, was born in July 1968. He holds a bachelor's degree in mechanicalmanufacturing technology and equipment from the Xi'an University of Technology and the professional title of Senior Engineer, andhas won the honor of model worker in Shandong Province. He is currently the chairman of the Board of Supervisors of the Company.Mr. Feng joined the Company in 2003 and successively served as an engineer, chief engineer, section supervisor, section chief, andvice president of the Company. Mr. Feng is an expert in automation and has rich experience in automation equipment R&D andmanufacturing.Xu Xiaofeng, female, Chinese citizen with no foreign residency rights, who was born in October 1977, holds a bachelor's degree inelectrical technology from Zhengzhou Institute of Aeronautical Industry Management and a bachelor's degree in businessadministration from China University of Petroleum. She is currently a supervisor of the Company. Ms. Xu joined the company in 2001,and successively served as the assistant manager of the quality control department, the enterprise development department, and theoperation department, and the head of the Company's employee service center. She has rich experience in enterprise management.Wei Wenbin, male, Chinese citizen with no foreign residency rights, was born in July 1978. He holds a bachelor's degree in materialshaping and control engineering from Jilin University. He is currently a supervisor and the general manager of the Human ResourcesDepartment of the Company. Mr. Wei joined the Company in 2004, and successively served as the head of the company's productionand operation management department, human resources management department, lean manufacturing management department,employee management, etc.
(3) Senior management of the Company
Li Youbo (Please refer to the above.)Liu Chunfa, male, Chinese citizen with no foreign residency rights, was born in October 1976. He graduated from Lanzhou RailwayCollege, majoring in mechatronics. He is currently a Vice President of the Company. Mr. Liu joined the Company in 1999. Hesuccessively served as engineer and assistant manager of the R&D department, technical manager of the technical engineeringdepartment, senior product manager, head of the manufacturing department, senior manager of the R&D department, head of thebusiness department, etc. Mr. Liu has over 20 years of experience in the field of electroacoustic components, especially in microspeakers and receivers.Jiang Hongzhai, male, Chinese citizen with no foreign residency rights, was born in December 1970. He graduated from ShandongCollege of Information Technology with a major in computer application. Currently, he serves as a Vice President of the Company.Previously, Mr. Jiang held positions as the factory director of Yuefeng Electronic Technology (Dongguan) Co., Ltd., and as an engineerat Weifang Radio Eighth Factory. Mr. Jiang joined the Company in 2006 and successively served as deputy general manager of the
equipment department, head of the employee management department and the leader of subsidiaries' business, etc. Mr. Jiang has morethan 20 years of experience in the field of precision machining, and has rich experience in administration and infrastructure, etc.Yu Dachao, male, Chinese citizen with no foreign residency rights, was born in May 1978. He holds a bachelor's degree in computerscience and engineering from Tianjin University of Technology. He is currently a Vice President of the Company. Mr. Yu joined theCompany in 2005 and successively served as the manager of R&D department, product manager, deputy general manager of the R&Ddepartment, head of the business department, and head of the supply chain management department. He has extensive experience insmart electronics development and supply chain management.Gao Xiaoguang, male, Chinese citizen with no foreign residency rights, was born in March 1976. He holds a master's degree in businessadministration from Southern Cross University, Australia. He is currently a Vice President of the Company. Mr. Gao joined theCompany in 2001 and has since held positions including manager, deputy general manager of the marketing department, deputy generalmanager of the electroacoustic business department, and head of the marketing system. He has rich experience in market expansion,key account management, human resource management, etc.Duan Huilu (Please refer to the above.)Rao Yi, male, Chinese citizen, was born in June 1983. He has a bachelor's degree in electronic science and technology from TsinghuaUniversity and economics from Peking University, and a master's degree in electronic science and technology from TsinghuaUniversity. He has a Ph.D. in optoelectronics from the University of California, Berkeley. He is currently the Vice President of theCompany and the head of the optics business. Mr. Rao joined the Company in 2019. He previously worked for Bandiwith10Corporation and Rokid US in the United States. He has received several honorary titles, including the Science and Technology YouthAward of Shandong Province and the Special Prize of Tianjin Science and Technology Invention. He has rich experience in the fieldof virtual reality/augmented reality optics.Li Yongzhi, male, Chinese citizen with no foreign residency rights, was born in November 1978. He holds a master's degree in businessmanagement and a bachelor's degree in management from Hefei University of Technology. He is currently the Chief Financial Officerand head of the accounting department of the Company. Mr. Li joined the Company in 2005 and successively served as accountantand financial manager of the financial department. Mr. Li is a senior accountant and a certified management accountant (CMA) withnearly 20 years of experience in corporate finance.Xu Dapeng, male, Chinese citizen with no foreign residency rights, was born in November 1984. He holds a master's degree inmanagement from Renmin University of China and a bachelor's degree in economics from Hunan University. He currently serves asthe Board Secretary of the Company and holds the Board Secretary Qualification Certificate. Mr. Xu joined the Company in 2015 andhas successively worked in the Company's marketing system and securities department. He successively held the positions of marketingdirector, securities affairs representative, etc. He has rich experience in the fields of marketing, securities finance, investor relationsmanagement, etc.Positions held in shareholders' entities? Applicable ? Not applicable
Name | Entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
Jiang Bin | Goertek Group Co., Ltd. | Chairman | November 15, 2021 | November 14, 2024 | No |
Jiang Long | Goertek Group Co., Ltd. | Director | November 15, 2021 | November 14, 2024 | No |
Duan Huilu | Goertek Group Co., Ltd. | Director | November 15, 2021 | November 14, 2024 | No |
Description of incumbency in shareholders’ entities | None |
Positions held in other entities? Applicable ? Not applicable
Name | Entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
Jiang Bin | Weifang Goertek Electronics Co., Ltd. | Chairman | November 23, 2019 | November 22, 2025 | No |
Jiang Bin | Goertek Optical Technology Co., Ltd | Chairman | April 20, 2022 | April 19, 2025 | No |
Jiang Bin | Beijing Goertek Investment Management Co., Ltd. | Executive Director | January 22, 2019 | January 21, 2025 | No |
Jiang Bin | Weifang Goertek Education Investment Co., Ltd. | Executive Director | March 22, 2019 | March 21, 2025 | No |
Jiang Long | Rongcheng Goertek Technology Co., Ltd. | Chairman | July 15, 2020 | July 14, 2026 | No |
Jiang Long | Goertek Electronics, Inc. | Director | May 1, 2020 | April 30, 2026 | No |
Jiang Long | Weifang Goertek Electronics Co., Ltd. | Director / CEO | November 26, 2019 | November 25, 2025 | No |
Jiang Long | Goertek Optical Technology Co., Ltd | Director / CEO | April 21, 2022 | April 20, 2025 | No |
Jiang Long | Goertek Technology Co., Ltd. | Executive Director / CEO | December 10, 2021 | December 9, 2026 | No |
Jiang Long | Goertek Intelligence Technology Co., Ltd. | Executive Director / CEO | August 18, 2020 | August 17, 2026 | No |
Jiang Long | Goertek Microelectronics Inc. | Chairman | October 20, 2020 | April 23, 2023 | No |
Jiang Long | Qingdao Goertek Intelligent Sensor Co., Ltd. | Executive Director | October 22, 2021 | April 24, 2023 | No |
Jiang Long | Weifang Goertek Microelectronics Co., Ltd. | Executive Director | December 9, 2019 | April 27, 2023 | No |
Jiang Long | Shanghai Goertek Microelectronics Co., Ltd. | Executive Director | October 14, 2020 | April 23, 2023 | No |
Jiang Long | Beijing Goertek Microelectronics Co., Ltd. | Executive Director | August 7, 2020 | May 11, 2023 | No |
Jiang Long | Wuxi Goertek Microelectronics Co., Ltd. | Executive Director | August 7, 2020 | April 27, 2023 | No |
Jiang Long | Shenzhen Goertek Microelectronics Co., Ltd. | Executive Director | July 23, 2020 | May 16, 2023 | No |
Jiang Long | Rongcheng Goertek Microelectronics Co., Ltd. | Executive Director | November 1, 2021 | April 26, 2023 | No |
Jiang Long | Qingdao Goertek Microelectronics Research Institute Co., Ltd. | Executive Director | November 30, 2020 | April 24, 2023 | No |
Jiang Long | Enkris Semiconductor Inc. | Director | November 18, 2021 | August 7, 2023 | No |
Jiang Long | Qingdao Virtual Reality Institute Co., Ltd. | Chairman | April 12, 2022 | April 11, 2025 | No |
Name | Entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
Jiang Long | Goertek Optical Technology (Shanghai) Co., Ltd | Director | February 16, 2022 | February 15, 2025 | No |
Jiang Long | Qingdao Goertek Horizons Technology Co., Ltd | Director / CEO | May 19, 2022 | May 18, 2025 | No |
Jiang Long | Goertek Optical Technology (Qingdao) Co., Ltd | Director | June 29, 2022 | June 28, 2025 | No |
Duan Huilu | Goertek Technology Vina Company Limited | Director | January 31, 2019 | September 25, 2023 | No |
Duan Huilu | Goertek Technology Co., Ltd. | Supervisor | August 14, 2021 | August 13, 2024 | No |
Duan Huilu | Goertek Investment Co., Ltd. | Executive Director / CEO | December 7, 2015 | December 6, 2025 | No |
Duan Huilu | Weifang Goertek Electronics Co., Ltd. | Director | November 23, 2021 | November 22, 2024 | No |
Duan Huilu | Weifang Goertek Trading Co., Ltd. | Executive Director / CEO | August 26, 2020 | August 25, 2026 | No |
Duan Huilu | Qingdao Goertek Acoustics Technology Co., Ltd. | Executive Director / CEO | November 15, 2023 | November 24, 2026 | No |
Duan Huilu | Beijing Goertek Investment Management Co., Ltd. | Supervisor | January 22, 2019 | January 21, 2025 | No |
Duan Huilu | Goertek (HongKong) Co., Limited | Director | April 24, 2019 | April 23, 2025 | No |
Duan Huilu | Goertek Technology (Hong Kong) Co., Limited | Director | November 3, 2023 | November 2, 2026 | No |
Duan Huilu | Qingdao Goertek Commercial Factoring Co., Ltd. | Executive Director | January 11, 2021 | January 10, 2024 | No |
Li Youbo | Shanghai Goertek Technology Co., Ltd. | CEO | July 23, 2020 | November 13, 2023 | No |
Li Youbo | Weifang Goertek Electronics Co., Ltd. | Supervisor | May 9, 2022 | November 16, 2023 | No |
Li Youbo | Weifang Goertek Electronics Co., Ltd. | Executive Director / CEO | November 16, 2023 | November 15, 2026 | No |
Liu Yaocheng | Goertek Optical Technology Co., Ltd | Director | June 27, 2022 | June 26, 2025 | No |
Liu Yaocheng | Shenzhen Elementplus Material Technology Co., Ltd. | Director | September 5, 2023 | September 4, 2026 | No |
Liu Yaocheng | GravityXR Electronics and Technology Co., Ltd. | Director | April 17, 2023 | April 16, 2026 | No |
Liu Yaocheng | Shenzhen Camsense | Director | October 20, 2022 | November 30, 2023 | No |
Name | Entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
Technology Co., Ltd. | |||||
Liu Yaocheng | Uphoton Technology (Shaoxing) Co., Ltd. | Director | June 13, 2022 | June 12, 2025 | No |
Liu Yaocheng | SeeYA Technology Corporation | Director | March 17, 2023 | March 16, 2026 | No |
Wang Kun | China International Futures Co., Ltd. | Independent Director | September 1, 2017 | No | |
Wang Kun | Huadian Heavy Industries Co., Ltd. | Independent Director | February 1, 2020 | September 7, 2023 | No |
Wang Kun | GalaxyCore Inc. | Independent Director | April 15, 2020 | December 1, 2023 | No |
Wang Kun | LUSTER LightTech Co., Ltd. | Independent Director | September 28, 2020 | No | |
Huang Yidong | Seetrum Companion (Shanghai) Enterprise Management Center (Limited Partnership) | Managing Partner | November 12, 2020 | July 27, 2023 | No |
Huang Yidong | Advanced Fiber Resources (Zhuhai), Ltd. | Independent Director | March 31, 2021 | March 30, 2024 | No |
Huang Yidong | Beijing Seetrum Technology Co., Ltd. | Supervisor | May 20, 2021 | July 14, 2023 | No |
Huang Yidong | Tianjin Hi-Chip Technology Group Corporation | Director | April 29, 2022 | July 7, 2023 | No |
Jiang Fuxiu | Beijing Chunju Technology Co., Ltd. | Independent Director | April 12, 2022 | June 6, 2023 | No |
Liu Chunfa | Goertek Vina Co., Ltd | Director | January 1, 2019 | December 31, 2024 | No |
Liu Chunfa | Goertek Technology Vina Company Limited | Director | January 31, 2019 | September 25, 2023 | No |
Liu Chunfa | Shanghai Goertek Technology Co., Ltd. | Supervisor | April 25, 2020 | April 24, 2026 | No |
Liu Chunfa | Yili Precision Manufacturing Co., Ltd . | Executive Director | November 9, 2023 | November 8, 2026 | No |
Jiang Hongzhai | Yili Precision Manufacturing Co., Ltd . | Executive Director | July 5, 2019 | November 9, 2023 | No |
Jiang Hongzhai | Weifang Goertek Communication Technology Co., Ltd. | Executive Director | June 26, 2021 | June 25, 2024 | No |
Jiang Hongzhai | Dongguan JoyForce Precision Manufacturing Co., Ltd. | Executive Director | December 11, 2019 | January 31, 2024 | No |
Jiang Hongzhai | Kunshan Goertek Electronics Co., Ltd | Executive Director | November 9, 2020 | November 20, 2023 | No |
Jiang Hongzhai | Nanning Goertek Electronics Co., Ltd | Chairman | November 12, 2021 | November 11, 2024 | No |
Name | Entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
Jiang Hongzhai | Nanning Goertek Trading Co., Ltd. | Chairman | November 29, 2021 | November 28, 2024 | No |
Jiang Hongzhai | Goertek Technology Vina Company Limited | Director / CEO | September 25, 2023 | September 24, 2026 | No |
Jiang Hongzhai | Goertek Vina Co., Ltd | Director / CEO | September 22, 2023 | September 21, 2026 | No |
Jiang Hongzhai | Goertek Precision Industry Vietnam Company Limited | Director / CEO | October 2, 2023 | October 1, 2026 | No |
Jiang Hongzhai | Goertek Smart Technology Vina Co.,Ltd. | Director / CEO | March 15, 2023 | March 14, 2026 | No |
Yu Dachao | Beijing Goertek Technology Co., Ltd. | Executive Director / CEO | November 30, 2019 | November 13, 2023 | No |
Yu Dachao | Xi'an Goertek Electronic Technology Co., Ltd. | Executive Director | May 7, 2019 | November 6, 2023 | No |
Yu Dachao | Qingdao Goertek Acoustics Technology Co., Ltd. | Executive Director / CEO | December 10, 2021 | November 15, 2023 | No |
Yu Dachao | Yishui TECO Electronic Technology Co., Ltd. | Chairman / CEO | December 10, 2019 | November 24, 2023 | No |
Yu Dachao | Goertek Technology Vina Company Limited | Director | January 31, 2021 | September 25, 2023 | No |
Gao Xiaoguang | Shenzhen Goertek Technology Co., Ltd. | Executive Director | October 29, 2021 | October 28, 2024 | No |
Gao Xiaoguang | Shenzhen Goertek Technology Co., Ltd. | CEO | October 29, 2021 | October 25, 2023 | No |
Gao Xiaoguang | Shanghai Goertek Technology Co., Ltd. | Executive Director | April 25, 2020 | April 24, 2026 | No |
Gao Xiaoguang | Goertek Electronics, Inc. | Manager | December 19, 2018 | December 18, 2024 | No |
Gao Xiaoguang | Beijing Goertek Technology Co., Ltd. | Executive Director | November 13, 2023 | November 12, 2026 | No |
Gao Xiaoguang | Goertek Technology Korea Co., Ltd. | Director | March 31, 2023 | March 30, 2026 | No |
Rao Yi | Goertek Optical Technology Co., Ltd | Director | April 21, 2022 | April 20, 2025 | No |
Rao Yi | Goertek Optical Technology (Shanghai) Co., Ltd | CEO | February 16, 2022 | February 15, 2025 | No |
Rao Yi | Goertek Optical Technology (Qingdao) Co., Ltd | CEO | June 29, 2022 | June 28, 2025 | No |
Rao Yi | Zhongrong Zhige Technology (Tianjin) Co., Ltd. | Executive Director | April 1, 2022 | March 31, 2025 | No |
Rao Yi | Uphoton Technology | Director | June 13, 2022 | June 12, 2025 | No |
Name | Entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
(Shaoxing) Co., Ltd. | |||||
Jia Jun'an | Goertek Investment Co., Ltd. | Supervisor | December 7, 2021 | November 7, 2023 | No |
Jia Jun'an | Weifang Goertek Electronics Co., Ltd. | Supervisor | November 26, 2019 | June 12, 2023 | No |
Jia Jun'an | Zhongchuang Zhige Technology (Tianjin) Co., Ltd. | Executive Director | March 31, 2022 | March 30, 2025 | No |
Li Yongzhi | Goertek Intelligence Technology Co., Ltd. | Supervisor | August 18, 2020 | August 17, 2026 | No |
Li Yongzhi | Kunshan Goertek Electronics Co., Ltd | Supervisor | November 9, 2020 | November 20, 2023 | No |
Li Yongzhi | Qingdao Goertek Commercial Factoring Co., Ltd. | Supervisor | January 11, 2021 | January 10, 2027 | No |
Li Yongzhi | Nanning Goertek Electronics Co., Ltd | Supervisor | November 12, 2021 | November 11, 2024 | No |
Li Yongzhi | Nanning Goertek Trading Co., Ltd. | Supervisor | November 29, 2021 | November 28, 2024 | No |
Li Yongzhi | Xi'an Goertek Electronic Technology Co., Ltd. | Supervisor | May 7, 2019 | May 6, 2025 | No |
Li Yongzhi | Yishui TECO Electronic Technology Co., Ltd. | Supervisor | December 10, 2019 | December 9, 2025 | No |
Li Yongzhi | Rongcheng Goertek Technology Co., Ltd. | Supervisor | July 15, 2020 | July 14, 2026 | No |
Li Yongzhi | Goertek Microelectronics Inc. | Director | December 23, 2020 | December 22, 2026 | No |
Li Yongzhi | Weifang Goertek Electronics Co., Ltd. | Supervisor | June 12, 2023 | June 11, 2026 | No |
Li Yongzhi | Weifang Goertek Electronics Co., Ltd. | Supervisor | November 16, 2023 | November 15, 2026 | No |
Li Yongzhi | Goertek Investment Co., Ltd. | Supervisor | November 7, 2023 | November 6, 2026 | No |
Feng Pengbo | Bei Ge (Weifang) Intelligent technology Co., Ltd | Chairman | August 31, 2021 | No | |
Wei Wenbin | Weifang Goertek Communication Technology Co., Ltd. | CEO | June 26, 2021 | June 25, 2024 | No |
Description of incumbency in other entities | None |
Penalties imposed by securities regulatory authorities on current and outgoing directors, supervisors and senior management of thecompany in the past three years
? Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
The decision-making procedure, basis and actual payment of the remuneration of directors, supervisors and senior managementThe remuneration for the directors and senior management of the Company shall be proposed to the Board of Directors by theRemuneration and Assessment Committee; The remuneration for the senior management shall be deliberated and determined by theBoard of Directors; The remuneration for directors shall be deliberated by the Board of Directors before being submitted to the generalmeeting of shareholders for determination;The remuneration for supervisors shall be deliberated by the Supervisory Board before being submitted to the general meeting ofshareholders for determination.Proposal on the remuneration for directors, supervisors, and senior management approved by the above-mentioned approval authorityof the Company is as follows:
Proposal on the remuneration of directors:
Non-independent directors who hold concurrent senior management or other positions in the Company will be compensated accordingto the remuneration proposal for senior management determined by the Board of Directors or the employment contract signed with theCompany. They will not be additionally compensated as directors. The remuneration standard of the Chairman of the Board is RMB
1.8 million per year before tax and paid on a monthly basis.
The allowance for independent directors of the Company is RMB 180,000 per person per year before tax and paid on a monthly basis.Proposal on the remuneration of senior management of the Company:
The remuneration for the Company's senior management is based on the remuneration standard for their respective positions or theprovisions of their employment contracts.The remuneration for senior management consists of basic remuneration and performance-based remuneration. Among them, the basicremuneration shall be determined by the Company by reference to the market or industry remuneration standards in combination withtheir positions, responsibilities, abilities, and other factors, and will be paid on a monthly basis; The performance-based remunerationshall be determined based on factors such as the performance assessment period score and the position weight of each seniormanagement member, in accordance with the Company's relevant performance assessment management regulations. The remunerationwill then be submitted to the Company's Remuneration and Assessment Committee for approval.Proposal on the remuneration of supervisors:
Supervisors who hold actual positions in the Company will receive remuneration based on their actual positions in the Company, inaccordance with the Company's relevant basic remuneration standards and performance-based assessment standards, without additionalsupervisor's allowance; Supervisors who do not actually work in the Company will not be paid.Additional explanation of the above proposal:
Normal working expenses incurred by the directors, supervisors, and senior management of the Company in the course of theCompany's business shall be borne by the Company. When directors, supervisors, and senior management of the Company leave theirpositions due to a change in the term of office, re-election, resignation during their term, or for any other reason, their remunerationwill be calculated and paid based on their actual term of service.Remuneration of directors, supervisors and senior management during reporting period
Unit: RMB 10,000
Name | Gender | Age | Position | Appointment status | The total amount of pre-tax remuneration received from the Company | Whether to get paid by the related party of the Company |
Jiang Bin | Male | 58 | Chairman | Incumbent | 180.00 | No |
Li Youbo | Male | 47 | Director, President | Incumbent | 102.84 | No |
Duan Huilu | Male | 48 | Director, Vice President | Incumbent | 89.32 | No |
Liu Yaocheng | Male | 51 | Director | Incumbent | 77.07 | No |
Wang Kun | Female | 48 | Independent Director | Incumbent | 18.00 | No |
Huang Yidong | Female | 59 | Independent Director | Incumbent | 18.00 | No |
Jiang Fuxiu | Male | 55 | Independent Director | Incumbent | 18.00 | No |
Name | Gender | Age | Position | Appointment status | The total amount of pre-tax remuneration received from the Company | Whether to get paid by the related party of the Company |
Feng Pengbo | Male | 56 | Chairman of Supervisory Board | Incumbent | 45.24 | No |
Xu Xiaofeng | Female | 47 | Employee Representative Supervisor | Incumbent | 69.23 | No |
Wei Wenbin | Male | 46 | Employee Representative Supervisor | Incumbent | 73.32 | No |
Gao Xiaoguang | Male | 48 | Vice President | Incumbent | 88.44 | No |
Liu Chunfa | Male | 48 | Vice President | Incumbent | 88.54 | No |
Jiang Hongzhai | Male | 54 | Vice President | Incumbent | 85.49 | No |
Yu Dachao | Male | 46 | Vice President | Incumbent | 85.07 | No |
Rao Yi | Male | 41 | Vice President | Incumbent | 95.81 | No |
Li Yongzhi | Male | 46 | Chief Financial Officer | Incumbent | 66.10 | No |
Xu Dapeng | Male | 40 | Board Secretary | Incumbent | 55.95 | No |
Jiang Long | Male | 50 | Vice Chairman, CEO | Resigned | 25.64 | No |
Jia Jun'an | Male | 53 | Vice President, Board Secretary | Resigned | 25.58 | No |
Kazuyoshi Yoshinaga | Male | 57 | Vice President | Resigned | 23.15 | No |
Total | - | - | - | - | 1,330.79 | - |
Other circumstances? Applicable ? Not applicable
VI. Performance of Directors' Duties during the Reporting Period
1. Board of Directors
Session | Convening date | Disclosure date | Meeting resolution |
The 3rd Meeting of the 6th Board of Directors | April 7, 2023 | April 8, 2023 | For details, refer to the Announcement on the Resolution of the 3rd Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 4th Meeting of the 6th Board of Directors | April 17, 2023 | April 18, 2023 | For details, refer to the Announcement on the Resolution of the 4th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 5th Meeting of the 6th Board of Directors | April 23, 2023 | April 24, 2023 | For details, refer to the Announcement on the Resolution of the 5th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 6th Meeting of the | June 27, 2023 | June 28, 2023 | For details, refer to the Announcement on the Resolution |
Session | Convening date | Disclosure date | Meeting resolution |
6th Board of Directors | of the 6th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) | ||
The 7th Meeting of the 6th Board of Directors | July 19, 2023 | July 20, 2023 | For details, refer to the Announcement on the Resolution of the 7th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 8th Meeting of the 6th Board of Directors | August 28, 2023 | August 29, 2023 | For details, refer to the Announcement on the Resolution of the 8th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 9th Meeting of the 6th Board of Directors | October 12, 2023 | October 13, 2023 | For details, refer to the Announcement on the Resolution of the 9th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 10th Meeting of the 6th Board of Directors | October 26, 2023 | October 27, 2023 | For details, refer to the Announcement on the Resolution of the 10th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 11th Meeting of the 6th Board of Directors | December 5, 2023 | December 6, 2023 | For details, refer to the Announcement on the Resolution of the 11th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
The 12th Meeting of the 6th Board of Directors | December 28, 2023 | December 29, 2023 | For details, refer to the Announcement on the Resolution of the 12th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
2. Directors' attendance at the meetings of Board of Directors and general meetings of shareholders
Directors' attendance at the meetings of Board of Directors and general meetings of shareholders | |||||||
Name | Number of Attendance required during the reporting period (times) | Attendance in person (times) | Attendance by Tele-communication (times) | Entrusted presence (times) | Absence (times) | Whether there is absence in person for two consecutive times | Attendance of the general meeting of shareholders (times) |
Jiang Bin | 10 | 8 | 2 | 0 | 0 | No | 3 |
Jiang Long | 0 | 0 | 0 | 0 | 0 | No | 0 |
Li Youbo | 10 | 5 | 5 | 0 | 0 | No | 3 |
Duan Huilu | 10 | 9 | 1 | 0 | 0 | No | 3 |
Liu Yaocheng | 8 | 5 | 2 | 0 | 1 | No | 2 |
Wang Kun | 10 | 0 | 10 | 0 | 0 | No | 3 |
Huang | 10 | 0 | 10 | 0 | 0 | No | 3 |
Yidong | |||||||
Jiang Fuxiu | 10 | 0 | 10 | 0 | 0 | No | 3 |
Statement on absence from two consecutive meetings of the BoardNone
3. Objections raised by directors to relevant matters of the Company
Whether directors raise any objection to relevant matters of the Company? Yes ? NoNo objection was raised to relevant matters of the Company during the reporting period.
4. Other details on the performance of duties by directors
Whether proposals made by directors were adopted by the Company? Yes ? NoStatement on the adoption or non-adoption of proposals made by the directorsDuring the reporting period, the directors of the Company carried out work in strict accordance with the Company Law, the SecuritiesLaw, Code of Corporate Governance for Listed Companies, Rules Governing the Listing of Shares on Shenzhen Stock Exchange, Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Normative Operation of Listed Companies on theMain Board, Articles of Association and Rules of Procedure of the Board of Directors. They fulfilled their duty of due diligence byforming a consensus after full discussion on major governance and business matters of the Company, and resolutely supervising anddriving the implementation of the board resolution, so as to ensure the decision-making process being scientific, timely and efficient,play a positive role in the sustained, healthy and stable development of the Company, and effectively safeguard the legitimate rightsand interests of the Company and all shareholders.VII. Performance of Special Committees under the Board of Directors during the ReportingPeriod
Committee name | Members | Number of meetings held | Convening date | Meeting content | Important opinions and suggestions proposed | Performance of other duties | Specific objections (if any) |
Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 6 | January 16, 2023 | We reviewed and approved proposals such as Special Auditor's Report on the Deposit and Use of Funds Raised in Q4 2022 and Inspection Report on Matters including Related Transactions and Guarantees in the 2nd half of 2022, etc. | Approved | Not applicable | Not applicable |
Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 6 | April 7, 2023 | We reviewed and approved proposals such as Proposal on Deliberation of Financial Accounts of 2022, and Proposal on the Deliberation of Self-assessment Report on Internal Control of 2022, etc. | Approved | Not applicable | Not applicable |
Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 6 | August 17, 2023 | We reviewed and approved proposals such as Proposal on the Deliberation of Financial Reports of the First Half of 2023, and Special Auditor's | Approved | Not applicable | Not applicable |
Committee name | Members | Number of meetings held | Convening date | Meeting content | Important opinions and suggestions proposed | Performance of other duties | Specific objections (if any) |
Report on the Deposit and Use of Funds Raised in the First Half of 2023, etc. | |||||||
Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 6 | October 9, 2023 | We reviewed and approved such as Proposal for Acquiring Shares of Subsidiaries Held by Related Parties, etc. | Approved | Not applicable | Not applicable |
Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 6 | October 23, 2023 | We reviewed and approved proposals such as Proposal on the Deliberation of the Quarterly Report in Q3 2023, and Special Auditor's Report on the Deposit and Use of Funds Raised in Q3 2023, etc. | Approved | Not applicable | Not applicable |
Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 6 | December 25, 2023 | We reviewed and approved such as Proposal on the Deliberation of the Work Procedures of the Audit Committee's Annual Report and Proposal on the Deliberation of the Implementation Rules of the Audit Committee, etc. | Approved | Not applicable | Not applicable |
Remuneration and assessment committee | Jiang Fuxiu, Jiang Bin, Huang Yidong | 6 | April 6, 2023 | We reviewed and approved proposals such as Proposal on the Adjustment of the List of Incentive Participants and the Number of the Reserved Granted Stock Option and the Cancellation of Some Stock Option in the 2021 Stock Option Incentive Plan, and Proposal on the Achievement of the Exercise Conditions for the First Exercise Period in the 2021 Stock Option Incentive Plan, etc. | Approved | Not applicable | Not applicable |
Remuneration and assessment committee | Jiang Fuxiu, Jiang Bin, Huang Yidong | 6 | April 7, 2023 | We reviewed and approved Proposal on Adjustment of Reserved Share in the "Home No. 6" Employee Stock Ownership Plan , etc. | Approved | Not applicable | Not applicable |
Remuneration and assessment committee | Jiang Fuxiu, Jiang Bin, Huang Yidong | 6 | June 21, 2023 | We reviewed and approved proposals such as Proposal on Cancellation of Unexercised Stock Options at the Expiration of the First Exercise Period of the Initial Granted Stock Options in the 2021 Stock | Approved | Not applicable | Not applicable |
Committee name | Members | Number of meetings held | Convening date | Meeting content | Important opinions and suggestions proposed | Performance of other duties | Specific objections (if any) |
Option Incentive Plan and Proposal on Adjusting the Exercise Price of the Company's 2021 and 2022 Stock Option Incentive Plan, etc. | |||||||
Remuneration and assessment committee | Jiang Fuxiu, Jiang Bin, Huang Yidong | 6 | July 14, 2023 | We reviewed and approved proposals such as Proposal on the Cancellation of the Grant of Reserved Equity Interests in the 2022 Stock Option Incentive Plan and Proposal on the Deliberation of Goertek Inc.'s "Home No. 7 ESOP (Draft) and Its Abstract, etc. | Approved | Not applicable | Not applicable |
Remuneration and assessment committee | Jiang Fuxiu, Jiang Bin, Huang Yidong | 6 | August 17, 2023 | We reviewed and approved proposals such as Proposal on the Adjustment of the List of Incentive Participants and the Number of Initial Granted Stock Option in the 2023 Stock Option Incentive Plan, and Proposal on Granting Stock Options to the Participants, etc. | Approved | Not applicable | Not applicable |
Remuneration and assessment committee | Jiang Fuxiu, Jiang Bin, Huang Yidong | 6 | December 25, 2023 | We reviewed and approved Proposal on Amending the Implementation Rules of the Remuneration and Assessment Committee of Goertek Inc., etc. | Approved | Not applicable | Not applicable |
VIII. Performance of the Supervisory Board
Whether the Supervisory Board found out any risk of the Company in its supervision activities during the reporting period.? Yes ? NoThe Supervisory Board has no objection to the matters supervised during the reporting period.
IX. Personnel of the Company
1. Number of staff, specialty composition and educational level
Number of staff of the parent company at the end of the reporting period | 25,038 |
Number of Staff of major subsidiaries at the end of the reporting period | 56,332 |
Total number of staff at the end of the reporting period | 81,370 |
Total number of staff who receive remuneration during the reporting period | 81,370 |
Number of retired staff the Company and its major subsidiaries are required to compensate | 0 |
Specialty composition | |
Category | Number |
Production staff | 56,240 |
Sales staff | 725 |
Technical staff | 19,989 |
Financial staff | 274 |
Administrative staff | 4,142 |
Total | 81,370 |
Educational level | |
Category | Number |
PhD | 88 |
Master | 3,310 |
Bachelor | 14,615 |
College degree | 14,748 |
Below college degree | 48,609 |
Total | 81,370 |
2. Remuneration policy
The Company has always prioritized a people-oriented approach, recognizing that talent is a core asset for corporate development. Wecontinue to provide our employees with a variety of compensation and welfare benefits, paying attention to their work and life needs,and continuously striving to improve their sense of belonging and well-being.Regarding remuneration, the Company continuously conducts remuneration adjustments and optimizations to ensure that ourremuneration remains competitive with industry benchmarks. In 2023, for core positions and talents supporting the strategic newbusiness development of the Company, a special remuneration adjustment strategy was implemented to effectively achieve precisiontalent attraction and retention. To guarantee the talent reserve, the Company continuously raises the remuneration level of freshgraduates, adopts the incentive project of "reward" to retain high-potential talents, and offers the incentive project of "moat" to coreengineers.In terms of incentives, the Company continues optimizing the remuneration distribution mechanism for all employees to ensure thatthe remuneration distribution is closely linked to individual and organizational performance. This will stimulate a culture of highperformance. The Company also implements stock option incentive plans for backbone employees. Long-term incentives have becomean important way for the Company to attract, retain, and motivate employees to achieve the mutual development of the enterprise andits employees. In 2023, the Company released a new "Home No. 7" Employee Stock Ownership Plan and the 2023 Stock OptionIncentive Plan, which covered almost 6,000 employees.Regarding welfare, the Company establishes a diverse welfare system with the characteristics of a home culture, aiming to enhanceemployees' sense of belonging and well-being. The Company offers a variety of welfare programs for its employees, including eightcategories: comfortable accommodation, education support, delightful entertainment, exclusive benefits, convenient living conditions,holiday benefits, health care, and emotional support. Additionally, the Company offers over 50 welfare sub-projects and continues tohold creative and warm activities to protect employees' well-being in a comprehensive, multi-level, and three-dimensional manner.
3. Training programs
In 2023, the Human Resources Management Department worked in line with the Company's development strategy and businessdemands. The Company also paid attention to the enhancement of personnel's professional knowledge and comprehensive ability, soas to further strengthen the diversified cultivation system of talents. Various personnel training programs were comprehensivelypromoted. Cadre training was refined and perfected and a breakthrough was made in the training of digital personnel. Professionalpersonnel were trained in all aspects and new staff were trained to further expand the integration of production and education. TheCompany gradually systematized and standardized its training resources. By constructing an administrative system and mechanism
and promoting functional play, the Company fostered an organizational learning atmosphere, with a commitment to building a learningorganization that comprehensively helps employees improve their abilities and grow.In 2024, the Company, under the unified planning of the learning and development center, will deepen the integration of strategicbusiness development and talents training by closely surrounding the talent strategy. Horizontally, the Company will expand the groupsof trainees. Vertically, the Company will improve various types of training programs, strengthen the overall talent training system, andstep up the training for strategic personnel such as cadres and digital talents to meet the Company's strategic needs for strategic talents.Simultaneously, the company will accelerate the digitization and informatization of training to enhance employees' learningexperiences comprehensively. This initiative aims to bolster employees' capabilities and facilitate the development of a skilledworkforce, thereby ensuring the Company's sustained growth.
4. Labor outsourcing
? Applicable ? Not applicableX. Profit Distribution and Conversion of Capital Surplus into Share CapitalFormulation, execution or adjustment of profit distribution policy, especially the cash dividend during the reporting period? Applicable ? Not applicableThe Company has strictly implemented the Shareholder Return Plan for the Next Three Years (2022-2024), and clarified the standard,ratio, and decision-making procedures of the distribution policy, which ensures the continuity and stability of the profit distributionpolicy, in order to fully protect the legitimate rights and interests of minority investors. The Company did not make changes to theprofit distribution policy during the reporting period.
Special description of the cash dividend policy | |
Whether in compliance with provisions in the Articles of Association or requirements of the resolution of the extraordinary general meeting of shareholders: | Yes |
Whether the dividend standard and the proportion are definite and clear: | Yes |
Whether the related decision-making procedures and mechanisms are complete: | Yes |
Whether independent directors perform their duties responsibly and play their due roles: | Yes |
If the Company chooses not to distribute cash dividends, it shall disclose the specific reasons and outline the measures to be taken to enhance investor returns: | Not applicable |
Whether minority shareholders have the opportunity to fully express their opinions and demands and their legitimate rights and interests are fully protected: | Yes |
Whether the conditions and procedures are transparent and comply with regulations while the cash dividend policy is adjusted or changed: | The cash dividend policy has not been adjusted. |
The profits of Goertek in the reporting period and the parent company's profits distributable to shareholders are positive, but theCompany did not put forward a proposed plan for cash dividend distribution.? Applicable ? Not applicableProfit distribution and conversion of capital surplus into share capital during the reporting period.? Applicable ? Not applicable
Number of bonus shares per 10 shares | 0 |
Dividend per 10 shares (RMB) (tax inclusive) | 1.00 |
Conversion of capital surplus into share capital per 10 shares (shares) | 0 |
Share capital base of the distribution proposal (shares) | 3,382,928,889 |
Cash dividend amount (RMB) (tax inclusive) | 338,292,888.90 |
Cash dividend amount distributed by other means (such as shares repurchase) (RMB) | 177,637,427.00 |
Total cash dividends (including other means) (RMB) | 515,930,315.90 |
Distributable profit (RMB) | 11,036,440,853.38 |
Proportion of total cash dividends (including other means) in total profit distribution | 100% |
Cash dividends | |
If the Company is in developing stage, and there are major capital expenditure arrangements, the minimum proportion of cash dividends in profit distribution should reach 20%. | |
Detailed description of the proposal for profit distribution or capitalization from capital surplus funds | |
According to the standard unqualified auditor report issued by Zhongxi CPAs (Special General Partnership) for the Company, the net profit attributable to the shareholders of the Company in the Company's consolidated financial statement in 2023 is RMB 1,088,076,730.88. The parent company reports a net profit of RMB 2,185,304,824.52. The statutory surplus reserve fund is RMB 218,530,482.45 in the Company's consolidated financial statement in 2023, plus the undistributed profit at the beginning of the period and minus the actually distributed cash dividend of RMB 340,516,294.90 for the year of 2022, the undistributed profit in the consolidated statement amounts to RMB 17,038,581,549.12 and the undistributed profit of the parent company amounts to RMB 11,036,440,853.38 as of December 31, 2023. The Company's profit available for distribution to shareholders in 2023 is RMB 11,036,440,853.38, according to the principle that profit distribution should be based on the lower of the profit available for distribution of the parent company and the profit available for distribution of the consolidated financial statements. In accordance with the relevant provisions of the Company Law and Articles of Association, the proposed profit distribution of the Company in 2023 is as follows: based on the total share capital registered on the record date of equity distribution minus the repurchased shares in the Company's specific securities repurchase account and the principle of unchanged distribution ratio, the Company will distribute cash dividend of RMB 1.00 (tax inclusive) for per 10 shares to all the shareholders, as well as 0 bonus shares (tax inclusive), and there is no conversion of capital surplus into share capital. Up to now, there are 34,205,700 shares in the Company’s specific securities repurchase account, the amount of cash dividend is calculated based on the current total share capital of 3,417,134,589 shares after deducting the above repurchased shares. The total amount of cash dividends is RMB 338,292,888.90 (tax inclusive), which accounts for 31.09% of the net profit attributable to shareholders of the listed company in 2023. If the Company's total share capital changes due to share buybacks, the exercise of stock option incentive objects, material asset restructuring, cancellation of share buybacks, share increase for refinancing, or other reasons between the disclosure of the Company's profit distribution plan for 2023 and the date of registration of equity distribution, the Company will adjust the total distribution amount based on the principle of unchanged distribution ratio. |
XI. Implementation of Stock Option Incentive Plan, Employee Stock Ownership Plan orOther Employee Incentives? Applicable ? Not applicable
1. Stock option incentive
(1) Stock Option Incentive Plan in 2021 (hereinafter referred to as "the Incentive Plan 2021 ")On April 16, 2021, the Company convened the 19th meeting of the 5th Board of Directors and the 14th meeting of the 5th SupervisoryBoard, which approved proposals such as Proposal on the Deliberation of the 2021 Stock Option Incentive Plan (Draft) and Its Abstractof Goertek Inc., etc. On May 7, 2021, the proposals mentioned above were approved on the annual general meeting of 2020. TheIncentive Plan 2021 was approved. The Board of Directors was authorized to handle relevant matters regarding the Incentive Plan 2021.On April 7, 2023, the Company convened the 3rd meeting of the 6th Board of Directors and the 3rd meeting of the 6th SupervisoryBoard, and approved Proposal on the Adjustment of the List of Incentive Participants and the Number of Reserved Granted StockOption and the Cancellation of Some Stock Option in the 2021 Incentive Plan and Proposal on the Achievement of the ExerciseConditions of Reserved Granted Stock Options for the First Exercise Period in the 2021 Stock Option Incentive Plan. The Board ofDirectors determined that the exercise conditions for the first exercise period of the reserved grant portion of the Incentive Plan 2021had been fulfilled, and the incentive participants may exercise their options from the processing completion time to April 19, 2024.
On June 27, 2023, the Company convened the 6th meeting of the 6th Board of Directors and the 5th meeting of the 6th SupervisoryBoard, which approved Proposal on Cancellation of Unexercised Stock Options at the Expiration of the First Exercise Period of theInitial Granted Stock Options in the 2021 Stock Option Incentive Plan, Proposal on Adjusting the Exercise Price of the Company's2021 and 2022 Stock Option Incentive Plan, Proposal on the Adjustment of the List of Incentive Participants and the Number of InitialGranted Stock Option and the Cancellation of Some Stock Option in the 2021 Stock Option Incentive Plan, and Proposal on theAchievement of the Exercise Conditions of Initial Granted Stock Options for the Second Exercise Period in the 2021 Stock OptionIncentive Plan. Pursuant to the above resolutions, the Company canceled the unexercised stock options at the expiration of the firstexercise period of the initial granted stock options in the Incentive Plan 2021, adjusted the exercise price of the initial and reservedgranted stock options in the Incentive Plan 2021 in accordance with the authorization of the annual general meeting; At the same time,the Board of Directors determined that the exercise conditions of initial granted stock options for the second exercise period in theIncentive Plan 2021 had been fulfilled, and the incentive participants may exercise their rights upon completion of the exerciseprocedures to June 23, 2024.On August 7, 2023, the Company completed the procedures related to the independent exercise of the initial granted stock options forthe second exercise period and the granted reserved shares for the first exercise period in the Incentive Plan 2021 aforementioned inthe China Securities Depository and Clearing Corporation Limited Shenzhen Branch. As of the end of the reporting period, theCompany's initial granted stock options in 2021 were in the second exercise period, while the granted reserved stock option were inthe first exercise period.
(2) Stock Option Incentive Plan in 2022 (hereinafter referred to as "the Incentive Plan 2022")On July 8, 2022, the Company convened the 31st meeting of the 5th Board of Directors and the 25th meeting of the 5th SupervisoryBoard, which approved proposals such as Proposal on the Deliberation of the 2022 Stock Option Incentive Plan (Draft) and Its Abstractof Goertek Inc.etc. On July 26, 2022, the aforementioned proposals were ratified at the first extraordinary general meeting of 2022.The Incentive Plan 2022 was approved. The Board of Directors were authorized to handle relevant matters regarding the Incentive Plan2022.On June 27, 2023, the Company convened the 6th meeting of the 6th Board of Directors and the 5th meeting of the 6th SupervisoryBoard, which approved Proposal on Adjusting the Exercise Price of the Company's 2021 and 2022 Stock Option Incentive Plan. Theexercise price of the initial and reserved granted stock options in the Incentive Plan 2022 was adjusted pursuant to the authorizationgiven by the stockholders' meeting, as the Company implemented the 2022 Equity Allocation Plan.On July 19, 2023, the Company held the 7th meeting of the 6th Board of Directors and the 6th meeting of the 6th Supervisory Board,which approved Proposal on the Cancellation of the Grant of Reserved Equity Interests in the 2022 Stock Option Incentive Plan. Inaccordance with the authorization from the stockholders' meeting, the Board of Directors decided to cancel the grant of reserved stockoptions in the Incentive Plan 2022. As of the end of the reporting period, the initial granted stock options in 2022 were in the exercisewaiting period.
(3) Stock Option Incentive Plan in 2023 (hereinafter referred to as "the Incentive Plan 2023")On July 19, 2023, the Company convened the 7th meeting of the 6th Board of Directors, which approved proposals such as Proposalon the Deliberation of the 2023 Stock Option Incentive Plan (Draft) and Its Abstract of Goertek Inc.,etc. The participants eligible forincentives under the Incentive Plan 2023 include key management personnel and business leaders of the Company and its subsidiaries.On August 8, 2023, the proposals mentioned above were approved on the 1st extraordinary general meeting of 2023. The IncentivePlan 2023 was approved. The Board of Directors were authorized to handle relevant matters regarding the Incentive Plan 2023.On August 28, 2023, the Company convened the 8th meeting of the 6th Board of Directors and the 7th meeting of the 6th SupervisoryBoard, which approved Proposal on the Adjustment of Incentive Participants and the Number of Initial Granted Stock Options in the2023 Stock Option Incentive Plan, and Proposal on Granting Stock Options to the Participants. Due to work changes or resignations,153 incentive participants no longer meet the requirements to participate in the Incentive Plan 2023. As a result, the Board of Directorsof the Company adjusted the total number of initial incentive participants in the Incentive Plan 2023 from 5,704 to 5,551, and thenumber of initially granted stock options from 210,000,000 to 208,990,900. The number of stock options reserved for grant remainedunchanged, while the total number of stock options to be granted to incentive participants was adjusted from 225,200,000 to224,190,900. Additionally, the Board of Directors determined that the conditions for the initial grant in the Incentive Plan 2023 havebeen met and set August 28, 2023 as the date for the initial grant.On September 26, 2023, the Company completed the registration of the initial granted stock options in the Incentive Plan 2023 andgranted 208,990,900 stock options to 5,551 eligible participants. As of the end of the reporting period, the initial granted stock optionsin 2023 were in the exercise waiting period.Stock options granted to directors and senior management? Applicable ? Not applicable
Unit: share
Name | Position | Number of stock options held at the beginning of the year | Number of stock options newly granted during the reporting period | Number of exercisable stocks during the reporting period | Number of stocks exercised during the reporting period | Exercise price of stocks exercised during the reporting period (Yuan per share) | Number of stock options held at the end of the reporting period | Market price at the end of the reporting period (Yuan per share) | Number of restricted stocks held at the beginning of the reporting period | Number of stocks unlocked in the current period | Number of restricted stocks newly granted during the reporting period | Grant price of restricted stocks (Yuan per share) | Number of restricted stocks held at the end of the reporting period |
Xu Dapeng | Board Secretary | 86,000 | 73,100 | - | 29.03 | 30,100 | 21.01 | ||||||
Total | - | 86,000 | 73,100 | - | - | 30,100 | - | - | |||||
Remarks (if any) |
The assessment and incentive mechanism for senior managementThe remuneration standard for senior management shall be formulated by the remuneration and assessment committee, andimplemented after approval by the Board of Directors.
2. Implementation of employee stock ownership plan
? Applicable ? Not applicableAll valid employee stock ownership plans during the reporting period
Participants | Number | Total shares held | Changes | Shareholding percentage | Source of funds |
Home No. 4 ESOP: Directors (excluding independent directors), supervisors, senior management, key management personnel and key business personnel | 4,000 | 0 | None | 0.00% | Not applicable |
Home No. 5 ESOP: Directors (excluding independent directors), supervisors, senior management, key management personnel and key business personnel | 25 | 0 | None | 0.00% | Self-raised |
Home No. 6 ESOP: Directors (excluding independent directors), supervisors, senior management personnel, and key business personnel | 1,000 | 67,338,040 | None | 1.97% | Self-raised |
Home No. 7 ESOP: Middle and senior management and key business personnel of the Company and its holding subsidiaries and other eligible employees, as determined by the Board of Directors | 40 | 3,658,800 | None | 0.11% | Self-raised |
Total shares held of directors, supervisors and senior management in ESOPs during the reporting period
Name | Position | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | Shareholding percentage |
Duan Huilu, Liu Yaocheng, Xu Xiaofeng, Wei Wenbin, Gao Xiaoguang, Liu Chunfa, Jiang Hongzhai, Jia Jun'an (resigned as the Board Secretary in April 2023), Feng Pengbo, Yu Dachao, Yoshinaga Kazuyoshi (resigned in March 2023), Li Yongzhi, Li Youbo, Xu Dapeng | Directors, supervisors, senior management | 3,039,000 | 11,780,000 | 0.34% |
Changes of asset management agency during the reporting period? Applicable ? Not applicableChanges in shareholders' equity caused by shares disposal of the participants and other reasons during the reporting period? Applicable ? Not applicableBy the end of the reporting period, the Company's "Home No. 4" ESOP and "Home No. 5" ESOP have been sold out and the liquidationhas been completed. The Company's "Home No. 6" ESOP held 67,338,040 shares, accounting for 1.97% of total shares, while the"Home No. 7" ESOP held 3,658,800 shares, accounting for 0.11% of total share capital.Exercise of shareholders' rights during the reporting periodDuring the reporting period, the ESOPs exercised the shareholders' rights to participate in cash dividend of 2022, but did not participatein voting of the general meeting of shareholders or exercise other shareholders' rights.Other relevant situations and descriptions related to ESOPs during the reporting period? Applicable ? Not applicableThe Company shall continue to manage the ESOP in accordance with the ESOP Management Measures. During the reporting period,the third lock-up period of the Company's "Home No. 4" ESOP expired, allowing holders to sell 2,190,100 shares in the secondarymarket. 4,791,250 shares under the "Home No. 5" ESOP were reverted to the Company at the initial purchase price due to the holder'sresignation or failure to meet all unlocking conditions in personal assessment, and the remaining 700,875 shares held can be sold inthe secondary market after being unlocked; As of the end of the reporting period, the Company's shares held under the "Home No. 4"ESOP and "Home No. 5" ESOP had been sold through centralized bidding; 2,651,720 shares were recovered under the "Home No. 6"ESOP due to the departure of the holder. The recoveries and disposals mentioned above comply with the relevant agreements outlinedin the ESOP.Changes in members of the Management Committee of the ESOPs? Applicable ? Not applicableFinancial impacts of the ESOPs during the reporting period and relevant accounting treatment? Applicable ? Not applicableIn accordance with the Accounting Standard for Business Enterprises No.11 - Share-based Payments: The equity-settled share-basedpayment in exchange for services received from employees could not exercise until the completion of services for a vesting period, oruntil the achievement of a specified performance condition. The Company at each balance sheet date during the vesting periodrecognizes the services received for the current period as related costs or expenses, and capital surplus, at amount equal to the fair valueof the equity instruments at the grant date, based on the best estimate of the number of equity instruments expected to exercise. In 2023,the amortized expenses of the Company's "Home No. 4" ESOP, "Home No. 5" ESOP, "Home No. 6" ESOP and "Home No. 7" ESOPwere RMB 7.2233 million, RMB -82.7473 million, RMB 244.5334 million and RMB 6.1696 million respectively, which wererecognized as related expenses and capital surplus.Termination of ESOP during the reporting period? Applicable ? Not applicableOn July 29, 2023, the Company published Announcement of Goertek Inc. on the Completion and Termination of the Sale of "Home No.4" ESOP and "Home No. 5" ESOP. The "Home No. 4" ESOP and "Home No. 5" ESOP were completed and terminated on July 29,2023.
3. Other employee incentive measures
? Applicable ? Not applicable
XII. Construction and implementation of the Company's Internal Control System During theReporting Period
1. Construction and implementation of internal control
The Company has implemented a rigorous and effective internal control system that is tailored to its specific needs in strict accordancewith Basic Standards for Enterprise Internal Control, as well as relevant laws, regulations, and normative documents. The internalaudit department is responsible for overseeing and assessing the implementation of this system. The Board of Directors conducts an
annual self-evaluation of the Company's internal controls and discloses Internal Control Self-Evaluation Report. Simultaneously, theCompany engages an accounting firm to conduct an internal control audit of the Company.The Company consistently enhances its internal control in compliance with relevant laws, regulations, normative documents, andArticles of Association. During the reporting period, the Company optimized over 10 rules and regulations, including IndependentDirectors' Work System, and all work was performed in compliance with various systems. The Company manages its major internalcontrols and matters, including governance and organizational structure, internal supervision, human resources policies, corporateculture building, social responsibility, fund management, sales and procurement, R&D, engineering projects, asset management, relatedparty transactions, external guarantees, investment management, use of raised funds, financial reports, information disclosure, andsubsidiary control, in a strict, adequate and effective manner.During the reporting period, the Company did not encounter any material deficiencies or significant deficiencies in its internal controlover financial and non-financial reporting. The Company has maintained effective internal control in all significant areas, as requiredby the corporate internal control standard system and relevant regulations.
2. Details of material defects of internal control detected during the reporting period? Yes ? NoXIII. Management and controls of subsidiaries during the Reporting Period
Name of company | Reorganization plan | Reorganization progress | Problems encountered in the reorganization | Measures taken | Progress in solution | Follow-up solution |
Uphoton Technology (Shaoxing) Co., Ltd. | Integrate with the Company's optical products-related businesses, adjust the organization and personnel according to the needs of business development, unify financial management, and complement each other's advantages, so as to realize the synergy effect of the business combination. | Under normal progress | None | Not applicable | Not applicable | Not applicable |
XIV. Assessment Report on Internal Control or Auditor's Report on Internal Control
1. Assessment of internal control
Disclosure date of the Internal Control Self-assessment Report | March 28, 2024 | |
Disclosure index of the Internal Control Self-assessment Report | The Goertek Inc. Self-Assessment Report on Internal Control of 2023 disclosed on www.cninfo.com.cn on March 28, 2024 | |
Proportion of the total assets of entities included in the assessment scope to the total assets of the Company's consolidated financial statements | 100.00% | |
Proportion of the total income of entities included in the assessment scope to the total income of the Company's consolidated financial statements | 100.00% | |
Defect Identification Standard | ||
Category | Financial report | Non-financial report |
Qualitative criteria | The qualitative standard of the assessment of internal control defects in financial reporting determined by the Company are as follows: Signs of material deficiencies in financial reporting include: (1) Fraud of directors, supervisors and senior management on the financial report; (2) Corrections of previously disclosed financial reports; (3) Material misstatement of current period financial statements identified by certified public accountant but not identified by the Company's internal control; (4) Ineffective supervision on the financial statements by the audit committee and the internal audit department. Signs of significant deficiencies in financial reporting include: (1) Failure to select and apply accounting policies in accordance with Generally Accepted Accounting Principles; (2) No anti-fraud procedures and control measures have been established; (3) No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control; (4) One or more defects is or are existing in the control of the financial reporting process, that the prepared financial statements cannot be reasonably guaranteed to be true and complete. General defects: other internal control defects. | The qualitative standard of the assessment of internal control defects in non-financial reporting determined by the Company are as follows: The identification of defects in non-financial reports is mainly determined by the impact of defects on the effectiveness of business processes and the possibility of occurrence. Defects are defined as general defects if they are less likely to happen, and will lower the work efficiency or effect, increase the uncertainty of the effect or make it deviate from the expected goal; Defects are defined as significant deficiencies if they are likely to happen and will significantly lower the work efficiency or effect, significantly increase the uncertainty of the effect, or make it deviate from the expected goal; Defects are defined as material deficiencies if they are likely to happen and will seriously lower the work efficiency or effect, seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal. | |||
Quantitative criteria | (2) If one of the following conditions is met, it may | The quantitative standard of the assessment of internal control defects in non-financial reporting is in accordance with the quantitative standard of defects in financial reporting. | |||
Number of material deficiencies in financial reporting | 0 | ||||
Number of material deficiencies in non-financial reporting | 0 | ||||
Number of significant deficiencies in financial reporting | 0 | ||||
Number of significant deficiencies in non-financial reporting | 0 |
2. Auditor's Report on Internal Control
? Applicable ? Not applicable
The opinion paragraph in the Auditor's Report on Internal Control | |
We believe that Goertek Inc. maintained effective internal control over accounting reports in all material aspects in accordance with Basic Standards for Internal Enterprise Control and relevant provisions on December 31, 2023. | |
Disclosure of the Auditor's Report on Internal Control | Disclosed |
Disclosure date of the Auditor's Report on Internal Control | March 28, 2024 |
Disclosure index of the Auditor's Report on Internal Control | The Audit Report on Internal Control of Goertek Inc. (Zhong Xi Special Audit No. 2024T00220) was published on www.cninfo.com.cn on March 28, 2024 |
Type of internal control auditor's report opinions | Standard Unqualified Opinion |
Material deficiencies found in non-financial reporting | No |
Whether the accounting firm issued a modified auditor's report on internal controls? Yes ? NoWhether the Auditor's Report on Internal Control is consistent with the Self-assessment Report of the Board of Directors? Yes ? No
XV. Rectification of Problems Identified by Self-examination in the Special Actions onGovernance of Listed CompaniesNot applicable
Section V Environmental and Social ResponsibilitiesI. Major Environmental IssuesWhether the listed company or its subsidiaries are entities with pollutant discharges announced by local environmental protectionauthorities? Yes ? NoPolicies and industry standards related to environmental protectionAccording to the Decision of the National Development and Reform Commission on Amending the Catalogue of Industrial StructureAdjustment (2019 version), all projects of Goertek Inc. are classified as encouraged projects, aligning with national industrialdevelopment policies. These projects also comply with the requirements outlined in the Opinions of the People's Government ofShandong Province on the Implementation of the "Three Lines and One List" Ecological Zoning Management Approach. The pollutantsemitted by the projects strictly adhere to the standards stipulated in environmental assessments and emission permits.All projects of Yili Precision Manufacturing Co., Ltd. are carried out in line with national industrial development policies according tothe Decision of the National Development and Reform Commission on Amending the Catalogue of Industrial Structure Adjustment(2019 version); and the projects meet the requirements of the Opinions of the People's Government of Shandong Province on theImplementation of the "Three Lines and One List" Ecological Zoning Management Approach. The project's pollutants are incompliance with the requirements of environmental assessment and emission permit standards.Administrative licenses for environmental protectionGoertek Inc. obtained the registration receipt of the pollution discharge permit in accordance with the Measures for the Managementof Pollution Discharge Permits (Trial) (Revised in 2019). The registration number is 91370700729253432M004Y, and the certificateis valid from November 30, 2023 to November 29, 2028.Yili Precision Manufacturing Co., Ltd. has applied for a pollution discharge permit as required. The certificate number is913707840744048096001V, and the certificate is valid from July 7, 2022 to July 6, 2027.Industry emission standards and the details of pollutant emissions involved in production and operation activities
Name of the Company or subsidiaries | Types of major pollutants and particular pollutants | Name of major pollutants and particular pollutants | Type of discharge | Number of discharging ports | Locations of discharging ports | Concentration/intensity of pollutant discharged | Enforced standards of pollutant discharge | Total discharge volume | Total approved discharge volume | Discharge exceeding the standard |
Yili Precision Manufacturing Co., Ltd. | Wastewater | COD; ammonia nitrogen | Intermittent discharge | 1 | In the plant | COD: 50mg/L; ammonia nitrogen: 5mg/L | COD: 500mg/L; ammonia nitrogen: 45mg/L | COD13.1422t/a; ammonia nitrogen: 2.28592t/a | COD65.133t/a; ammonia nitrogen: 5.862t/a | None |
Yili Precision Manufacturing Co., Ltd. | Solid waste | Hazardous waste | Indirect discharge | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | None |
Treatment of pollutantsIn accordance with The Environmental Impact Assessment and Approval, the Company constructs supporting treatment facilities forgas waste, establishes supporting measures for solid waste storage, disposal, and comprehensive utilization, along with leakageprevention and seepage prevention measures, and ensures the normal enforcement of all the above measures.In accordance with The Environmental Impact Assessment and Approval, Yili Precision Manufacturing Co., Ltd. constructs supportingtreatment facilities for water and gas waste, takes measures of noise reduction, storage, disposal and comprehensive utilization of solidwaste, and leakage and seepage prevention, and ensures the normal operation of all above measures.Environmental self-monitoring programmeThe Company entrusts third-party monitoring organizations to monitor the environmental factors of the plant area and issue aninspection report every year in strict accordance with the requirements of the discharge permit.Yili Precision Manufacturing Co., Ltd. has installed online equipment for monitoring COD, ammonia nitrogen, flow rate and PH valueat the main wastewater discharge outlet, which is networked with the local department of environmental protection authorities. A third-party monitoring organization shall be entrusted to conduct monitoring of wastewater, waste gas, groundwater, and soil pollutants in
strict accordance with the requirements of the discharge permit and to issue an inspection report, and related information shall bedisclosed as required.Emergency response plan for unexpected environmental eventsGoertek Inc., combined with the National Environmental Emergency Response Plan and the Guidelines to Develop EmergencyResponse Plan for Environmental Pollution Accidents, has formulated the Environmental Emergency Response Plan of Goertek Inc.based on various risk factors, and has reported the plan to the High-tech Branch of Weifang Municipal Ecology and EnvironmentBureau for recording (No. 370708-2022-036-L). Goertek also organizes relevant training and drills on a regular basis, in order toimprove the emergency response ability of employees and achieve continuous improvement.In view of various risk factors, Yili Precision Manufacturing Co., Ltd. refers to The National Environmental Emergency Plan and TheGuidelines to Develop Emergency Response Plan for Environmental Pollution Accidents, formulates the Yili EnvironmentalEmergency Plan, and puts it on record in the Anqiu Branch of Weifang Municipal Ecology and Environment Bureau (record No.370784-2023-003-H). Relevant training and drills are organized on a regular basis to further improve employees' ability to deal withemergency events and achieve continuous improvement.Investment in environmental governance and protection and the payment of environmental protection taxThe Company and its subsidiaries pay environmental protection tax as required, with a total of RMB 95,164.14 in 2023. All paymentshave been made as of the date of this Report.Measures taken to reduce carbon emissions during the reporting period and their effects? Applicable ? Not applicableTo actively respond to the national strategy of "peak carbon dioxide emissions and carbon neutrality", the Company adhered to thecarbon reduction concept of "client orientation, differentiated control, and targeted satisfaction". The Company implemented refinedcarbon emission management that is tailored to client requirements, kept promoting its low-carbon transformation, and contributed tothe construction of a green and low-carbon future society.During the reporting period, the Company's manufacturing plants located in Weifang and Rongcheng in Shandong Province, Dongguanin Guangdong Province, and Bac Ninh Province in Vietnam emitted 49,184.5 tons of CO
equivalent in Scope 1 and 359,524.7 tons ofCO
equivalent in Scope 2. The third-party certification authority verified in accordance with ISO 14064-1:2018 Greenhouse Gases -Part 1: Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emission andRemovals and issued the greenhouse gas verification statement.To reduce energy consumption during operations, the Company actively promoted energy conservation and carbon reduction effortsin accordance with the Energy Conservation Project Management System. During the reporting period, the Company achieved acumulative reduction of 33,798.6 tons of CO
equivalent of greenhouse gas emissions through 160 energy-saving improvements suchas air conditioning, air pressure, and lighting systems.To optimize the energy structure, the Company implemented the construction of distributed photovoltaic power stations, market-oriented green electricity transactions, renewable energy certificate trading, and other methods to enhance the utilization of clean energy.During the reporting period, the Company's photovoltaic power plants had an installed capacity of 49.37 MW. The Company purchased86,108 MWh of green power, 14,139 MWh of power with Chinese renewable energy certificates, and 212 MWh of power withinternational renewable energy certificates.Administrative penalties received for environmental issues during the reporting periodNoneOther environmental information that should be disclosedNoneOther information related to environmental protectionNone
II. Performance of Social ResponsibilityDuring the reporting period, while the Company was committed to achieving its own development, it has also performed well in theprotection of the rights and interests of shareholders, creditors, employees, suppliers, clients and consumers, as well as in environmentalprotection and sustainable development, public relations and social public welfare undertakings. For details, see the 2023Environmental, Social and Governance (ESG) Report of Goertek Inc. released on "www.cninfo.com.cn" on March 28, 2024.
III. Consolidate and Carry Forward the Achievements of Poverty Alleviation and RuralRevitalizationFor details, see the 2023 Environmental, Social and Governance (ESG) Report of Goertek Inc. released on "www.cninfo.com.cn" onMarch 28, 2024.
Section VI Important Matters
I. Fulfillment of Commitments
1. The commitments of the Company's actual controllers, shareholders, related parties, purchasers and companies that have been completely fulfilledduring the reporting period or remain valid by the end of the reporting period.? Applicable ? Not applicable
Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
Commitments made during the joint-stock reform | Not applicable | |||||
Commitments made in the report of acquisition or in the report of equity changes | Not applicable | |||||
Commitments made during asset restructuring | Not applicable | |||||
Commitments made during initial public offering or refinancing | Mr. Jiang Bin, the actual controller, and Mr. Jiang long, shareholder and the related party of the actual controller | Commitment to restricted stock | Mr. Jiang Bin and Mr. Jiang Long promise that the Company shares transferred each year during their tenure will not exceed 25% of the total company shares held by them, and the shares will not be transferred within six months after their resignation in future | October 8, 2007 | Long-term standing | Strictly fulfilled |
Commitments made during initial public offering or refinancing | Mr. Jiang Bin and Ms. Hu Shuangmei, the actual controllers of the Company, Goertek Group Co., Ltd and Mr. Jiang Long, the shareholders who hold more than 5% of the Company shares | Horizontal competition related commitment | At present, there is no competition between the main businesses of Goertek Inc. and the commitment parties (company and persons) in this clause or other entities controlled by the commitment parties (company and persons). In future, in order to fundamentally avoid the possibility of competing with Goertek Inc., the commitment parties (company and persons) promise as follows: 1) The commitment parties (company and persons) will not engage in the same or similar business as Goertek Inc. in order to avoid direct or indirect competition to the production and operation | October 8, 2007 | Long-term standing | Strictly fulfilled |
Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
of Goertek Inc. Efforts will be made to urge other entities controlled by the commitment parties (company and persons) not to directly or indirectly participate in or carry out any business activity that compete with the production and operation of Goertek Inc. 2) If the commitment parties (company and persons) and the other entities controlled by the commitment parties (company and persons) except Goertek Inc., have competitive businesses of the same kind with Goertek Inc., which may bring unfair impacts on Goertek Inc. in terms of market share, business opportunities and resource allocation, etc. The commitment parties (company and persons) and other entities controlled by the commitment parties (company and persons) except Goertek Inc. will voluntarily give up business competition with Goertek Inc. 3) The commitment parties (company and persons) undertake to give Goertek Inc. the pre-emption right on the purchase of any assets and business to be sold, and will do its best to ensure that the price of the transaction is determined on the basis of fair, reasonable and normal commercial transactions with independent third parties. 4) The commitment parties (company and persons) will not be restricted from engaging in or continuing to engage in existing production business, in particular to provide Goertek Inc. with relevant materials and services needed for its operation. Since the date of issuance of this letter of commitment, the commitment parties (company and persons) undertake to indemnify Goertek Inc. for any loss or expense suffered or incurred in violation of any of the terms of this commitment. | ||||||
Stock option incentive commitments | The Company | Others commitments | Stock option incentive plan of 2021: The Company undertakes not to provide loans or any other form of financial assistance to any participants to obtain relevant rights and interests under this incentive plan, including guarantee for their loans | April 16, 2021 | From the issuance date of the commitment to the completion of the | Strictly fulfilled |
Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
implementation of the stock option incentive plan of 2021 | ||||||
Stock option incentive commitments | The Company | Others commitments | Stock option incentive plan of 2022: The Company undertakes not to provide loans or any other form of financial assistance to any participants to obtain relevant rights and interests under this incentive plan, including guarantee for their loans | July 8, 2022 | From the issuance date of the commitment to the completion of the implementation of the stock option incentive plan of 2022 | Strictly fulfilled |
Stock option incentive commitments | The Company | Others commitments | Stock option incentive plan of 2023: The Company undertakes not to provide loans or any other form of financial assistance to any participants to obtain relevant rights and interests under this incentive plan, including guarantee for their loans | July 19, 2023 | From the issuance date of the commitment to the completion of the implementation of the stock option incentive plan of 2023 | Strictly fulfilled |
Other commitments made to minority shareholders | The Company | Others commitments | From March 5, 2020 to the end of the use of the funds raised from convertible corporate bonds issuing or within 36 months after the funds raised are in place, the Company will no longer increase the funds usage in financial business (including capital investment, borrowing, guarantee and other forms of capital investment). The Company will not use the funds raised directly or in disguise for financial business | March 5, 2020 | From March 5, 2020 to the end of the use of funds raised or within 36 months after the funds raised are in place | Fully performed |
Other commitments made to minority shareholders | The Company | Others commitments | The Company's temporary use of some idle raised funds to supplement the working capital shall be used only for production and operation related to the main business. The | November 21, 2022 | During the time period of temporary | Fully performed |
Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
Company shall not directly or indirectly use raised funds for the subscription or placement of new shares, or for the trading of shares and their derivatives, convertible bonds, etc. The Company undertakes that temporarily use of idle raised funds to supplement working capital shall be for daily production and operation activities only. The Company will not use idle raised funds to directly or indirectly make high-risk investments such as securities investment and derivatives trading. | liquidity replenishment with raised funds starting from November 21, 2022 | |||||
Other commitments made to minority shareholders | Mr. Jia Jun'an, Vice President, Board Secretary | Commitment to restricted stock | Not to reduce his holdings of company shares or engaging in insider trading or short-swing trading within 6 months from September 23, 2022, nor to buy or sell company stocks during sensitive time periods. | September 23, 2022 | For the next 6 consecutive months from September 23, 2022 | Fully performed |
Other commitments made to minority shareholders | All directors of the Company | Commitment on repurchase | This share repurchase will not impair the Company's ability to fulfill its debt obligations and continue as a going concern. | October 26, 2023 | Within 12 months from October 26, 2023, or until the completion of this repurchase. | Strictly fulfilled |
Whether the commitments are fulfilled on time | Yes | |||||
If the commitments are not fulfilled within the time limit, specific reasons for the failure of complying and the work plan for the next step shall be explained in details | Not applicable |
2. If the Company's assets or projects have profit forecasts and the reporting period is still in the profitforecasting period, the Company shall make statement on whether the assets or projects reach the originalprofit forecast and provide relevant reasons? Applicable ? Not applicableII. Non-operational Occupation of Funds by Controlling Shareholders and Other RelatedParties to Listed Companies
? Applicable ? Not applicableDuring the reporting period of the Company, there is no non-operational occupation of funds by controlling shareholders or otherrelated parties to the Company.III. External Guarantee in Violation of Regulations? Applicable ? Not applicableThe Company has no violation of external guarantee during the reporting period.
IV. Explanation made by the Board of Directors about the modified audit opinion for thelatest period? Applicable ? Not applicableV. Explanation of the Accounting Firm's "Modified Auditor's Report" by the Board ofDirectors, the Supervisory Board and Independent Directors (if Any) During the ReportingPeriod? Applicable ? Not applicableVI. Explanation of changes in Accounting Policies, Accounting Estimates or Correction ofMajor Accounting Errors Compared with the Financial Report of Previous Year
? Applicable ? Not applicableSee Section X (V) 39 "Changes in significant accounting policies and accounting estimates" for details
VII. Explanation of Changes in the Scope of the Consolidated Statements Compared withPrevious Year's Financial Report? Applicable ? Not applicableDuring the reporting period, the Company acquired 3 subsidiaries through establishment. They are respectively Chongqing GoertekAuto Technology Co., Ltd., Goertek Smart Technology Vina Co.,Ltd., and GMI Technology GmbH. The Company's holding subsidiary,Goertek Optical Technology Co., Ltd., acquired 100% equity of Uphoton Technology (Shaoxing) Co., Ltd. The latter and itssubsidiaries are included in the consolidated statements.During the reporting period, the Company deregistered 1 subsidiary: Kunshan Goertek Electronics Co., Ltd.
VIII. Appointment and Dismissal of Accounting Firms
Accounting firm currently appointed
Name of the domestic accounting firm | Zhongxi CPAs(Special General Partnership) |
Remuneration of the domestic accounting firm (unit: RMB 10,000) | 300 |
Consecutive audit service years of the domestic accounting firm | 5 |
Name of certified public accountant of the domestic accounting firm | Du Yeqin, Zhang Shuli |
Consecutive audit service years of certified public accountant of the domestic accounting firm | Du Yeqin has been in service for 4 years, and Zhang Shuli for 2 years |
Name of overseas accounting firms (if any ) | None |
Remuneration of overseas accounting firms (unit: RMB 10,000) (if any) | 0 |
Consecutive audit service years of overseas accounting firms (if any) | None |
Names of certified public accountants of the overseas accounting firms | None |
Consecutive audit service years of certified public accountants of overseas accounting firms (if any) | None |
Whether to reappoint accounting firm in current period? Yes ? NoEmployment of internal control audit accounting firms, financial consultants or sponsors? Applicable ? Not applicableDuring the reporting period, the Company engaged Zhongxi CPAs (Special General Partnership) as the internal control audit accountingfirm and paid the internal control audit fee of RMB 800,000 that has been included in the total compensation of RMB 3 million paidto Zhongxi CPAs (Special General Partnership).IX. Delisting After the Disclosure of Annual Report? Applicable ? Not applicableX. Bankruptcy or Reorganization Related Events
? Applicable ? Not applicableNo bankruptcy or reorganization related events occurred during the reporting period.XI. Significant Lawsuit and Arbitration Events? Applicable ? Not applicableNo significant litigation or arbitration events occurred during the reporting period.XII. Punishment and Rectification? Applicable ? Not applicableNo punishment or rectification occurred during the reporting period.XIII. Integrity Issues of the Company, Controlling Shareholders and Actual Controllers? Applicable ? Not applicable
XIV. Significant Related Party Transactions
1. Related party transactions related to daily operations
? Applicable ? Not applicableNo significant related party transactions related to daily operations occurred during the reporting period.
2. Related party transactions involving the acquisition or sale of assets or equity? Applicable ? Not applicableNo significant related party transactions involving the acquisition or sale of assets or equity occurred during the reporting period.
3. Related party transactions of joint external investment
? Applicable ? Not applicableNo significant related party transactions of joint external investment occurred during the reporting period.
4. Related party transactions of credits and liabilities
? Applicable ? Not applicableWhether there are non-operating related creditor's rights and debts? Yes ? NoCreditor's rights receivable from related partiesNoneDebt due to related parties
Related parties | Relations with related party | Cause of formation | Opening balance (RMB 10,000) | Increased amount in the current period (RMB 10,000) | Amount returned in the current period (RMB 10,000) | Interest rate | Interest in the current period (RMB 10,000) | Closing balance (RMB 10,000) |
Goertek Group Co., Ltd. | Controlling shareholder of the Company | Borrowing of funds | 0 | 1,100.00 | 0 | 3.45% | 4.95 | 1,100.00 |
Impact of related parties' debts on the Company's operating results and financial position | No significant impact |
5. Business with affiliated financial company
? Applicable ? Not applicableThere is no finance company that has a related party relationship with the Company.
6. Business between the related parties and the financial company controlled by the Company? Applicable ? Not applicableThere was no financial company controlled by the Company.
7. Other significant related party transactions
? Applicable ? Not applicableNo other significant related party transactions occurred during the reporting period.
XV. Significant Contracts and Executions
1. Trusteeship, contracting and leasing
(1) Trusteeship
? Applicable ? Not applicableNo trusteeship occurred during the reporting period.
(2) Contracting
? Applicable ? Not applicableNo major contracting occurred during the reporting period.
(3) Leasing
? Applicable ? Not applicableNo significant leasing occurred during the reporting period.
2. Significant guarantees
? Applicable ? Not applicable
Unit: RMB 10,000
External guarantee of the Company and its subsidiaries (excluding guarantees for subsidiaries) | ||||||||||
Name of guaranteed party | Disclosure date of the amount limit of the guarantee | The amount limit of the guarantee | Actual occurrence date | Actual amount guaranteed | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the guarantee is complete | Whether guarantee for related parties |
Not applicable | ||||||||||
The Company's guarantee to its subsidiaries | ||||||||||
Name of guaranteed party | Disclosure date of the amount limit of the guarantee | The amount limit of the guarantee | Actual occurrence date | Actual amount guaranteed | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the guarantee is complete | Whether guarantee for related parties |
Goertek (HongKong) Co., Limited | March 30, 2022 | 177,067.50 | September 10, 2022 | 7,082.70 | Joint liability guarantee | 1 year | Yes | No | ||
October 20, 2022 | 7,082.70 | Joint liability guarantee | 1 year | Yes | No | |||||
May 17, 2022 | 20,893.97 | Joint liability guarantee | 1 year | Yes | No | |||||
May 24, 2022 | 14,519.54 | Joint liability guarantee | 1 year | Yes | No | |||||
Goertek Technology Vina Company Limited | March 30, 2022 | 65,000 | June 22, 2022 | 824.23 | Joint liability guarantee | 1 year | Yes | No | ||
June 22, 2022 | 105.86 | Joint liability guarantee | 1 year | Yes | No | |||||
April 18, 2023 | 20,681.48 | September 1, 2023 | 4,907.44 | Joint liability guarantee | 1 year | No | No | |||
December 1, 2021 | 339,969.6 | April 1, 2023 | 91,289.28 | Joint liability guarantee | 94 months | No | No | |||
Goertek Precision Industry Vietnam Company Limited | December 1, 2021 | 254,977.2 | April 1, 2023 | 68,071.47 | Joint liability guarantee | 94 months | No | No | ||
Qingdao Goertek Horizons | April 18, 2023 | 650 | July 6, 2023 | 7.72 | Joint liability | 1 year | No | No |
Technology Co., Ltd | guarantee | |||||||||
Goertek Microelectronics Inc. | March 30, 2022 | 2,124.81 | November 18, 2022 | 22.77 | Joint liability guarantee | 1 year | Yes | No | ||
Weifang Goertek Microelectronics Co., Ltd. | March 30, 2022 | 300 | May 12, 2022 | 10 | Joint liability guarantee | 1 year | Yes | No | ||
Rongcheng Goertek Microelectronics Co., Ltd. | March 30, 2022 | 300 | May 12, 2022 | 0 | Joint liability guarantee | 1 year | Yes | No | ||
Goertek Microelectronics Inc. | April 18, 2023 | 1,062.41 | November 16, 2023 | 21.97 | Joint liability guarantee | 1 year | No | No | ||
Total amount of guarantee limit to subsidiaries approved during the reporting period (B1) | 429,642.39 | Total amount of actual guarantee to subsidiaries occurred during the reporting period (B2) | 214,839.65 | |||||||
Total amount of guarantee limit to subsidiaries approved at the end of the reporting period (B3) | 1,269,381.50 | Total balance of actual guarantee to subsidiaries occurred at the end of the reporting period (B4) | 164,297.88 | |||||||
The guarantee between subsidiaries | ||||||||||
Name of guaranteed party | Disclosure date of the amount limit of the guarantee | The amount limit of the guarantee | Actual occurrence date | Actual amount guaranteed | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the guarantee is complete | Whether guarantee for related parties |
Not applicable | ||||||||||
Total amount of company guarantee (namely the sum of the previous three items) | ||||||||||
Total amount of guarantee limit approved during the reporting period (A1+B1+C1) | 429,642.39 | Total amount of actual external guarantee occurred during the reporting period (A2+B2+C2) | 214,839.65 | |||||||
Total amount of external guarantee limit approved at the end of the reporting period (A3+B3+C3) | 1,269,381.50 | Total balance of actual external guarantee occurred at the end of the reporting period (A4+B4+C4) | 164,297.88 | |||||||
The proportion of the total amount of actual guarantee (i.e. A4+B4+C4) to the net assets of the Company | 5.33% | |||||||||
Including: | ||||||||||
Balance of guarantees for shareholders, actual controllers and their affiliate parties (D) | 0 | |||||||||
Balance of guarantee provided directly or indirectly to the parties with an asset-liability ratio of more than 70% (E) | 7.72 | |||||||||
Amount of total guarantees exceeding 50% of net assets (F) | 0 | |||||||||
Total amount of the above three kinds of guarantees (D+E+F) | 7.72 | |||||||||
Explanation of unexpired guarantee contracts for which there are guarantee liabilities or there are evidence showing the possibility of joint and several liability for repayment during the reporting period (if any) | None |
Description of external guarantees provided in violation of prescribed procedures (if any) | None |
Specific description of complex guaranteesNone
3. Management trust of cash assets
(1) Entrusted financial investment
? Applicable ? Not applicableNo major entrusted financial management occurred during the reporting period of the Company.
(2) Entrusted loans
? Applicable ? Not applicableNo entrusted loans occurred during the reporting period.
4. Other major contracts
? Applicable ? Not applicableNo other significant contracts occurred during the reporting period.XVI. Explanation of Other Significant Matters
? Applicable ? Not applicableIn accordance with the requirements of laws and regulations, the Company has disclosed the significant matters that occurred duringthe reporting period on http://www.cninfo.com.cn, Securities Times, China Securities Journal, Shanghai Securities News and SecuritiesDaily. Other than that, no other significant matters occurred.
XVII. Significant Matters Occurred to Subsidiaries of the Company
? Applicable ? Not applicableOn November 10, 2020, the Company held the 12th meeting of the 5th board of directors and the 10th meeting of the 5th SupervisoryBoard, which approved The Proposal of Planning the Spin-off of the Holding Subsidiary. It agreed to plan and prepare the spin-off ofthe Company's holding subsidiary Goertek Microelectronics Co., Ltd. For details, please see The Informative Announcement of GoertekInc. on Planning and Preparing the Spin-off of Holding Subsidiary issued on November 11, 2020.The 17th meeting of the 5th board of directors and the 12th meeting of the 5th Supervisory Board were held on March 1, 2021 toapprove The Proposal on the Introduction of External Investors of the Holding Subsidiary and Affiliate Transactions. It agreed toaccept a total of RMB 2,149.987749 million capital investment from 15 external investors, including Qingdao MicroelectronicsInnovation Center Co., Ltd., Mr. Tang Wenbo, Gongqingcheng Chunlin Equity Investment Partnership(L.P.), Qingdao HenghuitaiIndustry Development Fund Co., Ltd., and Goertek Group Co., Ltd., in exchange of 10.4075% of Goermicro's equity after above capitalincrease and share expansion. After the above investment, the percentage of shares of Goermicro held by the Company was dilutedfrom 95.8773% to 85.8989%, which did not change the accounting consolidation scope of the financial statements of the Company.Details can be found in The Announcement of Goertek Inc. on the Introduction of External Investors of the Holding Subsidiary andAffiliate Transactions issued on March 2, 2021.On April 21, 2021, the Company held the 20th meeting of the 5th Board of Directors and the 15th meeting of the 5th SupervisoryBoard, which approved The Proposal on 'Plan for the Spin-off of Goertek Microelectronics Inc., a subsidiary of Goertek Inc., for Listingon the Growth Enterprise Board' and other related proposals. Details can be found in related announcements published in ChinaSecurities Journal, Securities Times, Shanghai Securities News, Securities Daily and http://www.cninfo.com.cnon April 22, 2021.On November 8, 2021, the Company held the 24th meeting of the 5th Board of Directors and the 19th meeting of the 5th SupervisoryBoard, which approved The Proposal of 'Planning on the Spin-off of Goertek Microelectronics Inc. and Listing on the GrowthEnterprise Board of Shenzhen Stock Exchange (Revised)' and other related proposals. The above-mentioned proposals have beenreviewed and approved by the Company's first extraordinary general meeting of shareholders in 2021. Details can be found in related
announcements published in China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily andhttp://www.cninfo.com.cn on November 9, 2021 and November 26, 2021.On December 28, 2021, Goertek Microelectronics Inc. received The Notice of Acceptance of Application Documents for Initial PublicOffering of Shares and Listing on GEM of Goertek Microelectronics Inc. (Shenzhen Stock Exchange (2021) No. 549). In accordancewith related regulations, the Shenzhen Stock Exchange checked the application report and related application documents submitted byGoertek Microelectronics Inc. for initial public offering and listing on GEM, and decided to accept the application. Details can befound in The Informative Announcement of Goertek on The Acceptance of Shenzhen Stock Exchange of The Application Documents ofThe Spin-off of Goertek Microelectronics Inc. and Listing on GEM issued by the Company on December 29, 2021.According to the Announcement on the Results of the 74th Review Meeting of the GEM Listing Committee in 2022 issued by theShenzhen Stock Exchange on October 19, 2022, Goertek Microelectronics Inc. (IPO) meets the requirements for issuance, listing andinformation disclosure.On March 31, 2023, as the financial information recorded in the IPO application documents of Goertek Microelectronics Inc. hadexpired, a supplementary submission was required. According to the relevant provisions of the Review Rules of Shenzhen StockExchange for Stock Issuance and Listing, the review for issuance and listing review was suspended.On June 26, 2023, the Shenzhen Stock Exchange resumed its IPO audit in accordance with Article 61 of the Rules for the Examinationof the Offering and Listing of Securities by Companies Listed on the Shenzhen Stock Exchange, following the completion of financialinformation updates by Goertek Microelectronics Inc.In October 2023, the Company purchased the 1.8468% shares held by Jiang Long, a minority shareholder of the subsidiary GoertekMicroelectronics Inc. using its own capital of RMB 23,273,750.00. After the transaction, the Company's shareholding in GoertekMicroelectronics Inc. was changed from 85.90% to 87.75%.So far, Goertek Microelectronics Inc. is in the process of registering with the China Securities Regulatory Commission, and the auditis proceeding as expected.
Section VII Share Changes and Shareholder Information
I. Changes in Shares
1. Changes in shares
Unit: share
Before the change | Increases or decreases (+, -) | After the change | |||||||
Number | Percentage | New shares | Bonus shares | Transferred from reserves | Other | Sub-total | Number | Percentage | |
I. Shares Subject to Selling Restrictions | 414,250,361 | 12.11% | -7,089,534 | -7,089,534 | 407,160,827 | 11.90% | |||
1. State shareholding | |||||||||
2. Shares held by state-owned corporates | |||||||||
3. Shares held by other domestic shareholders | 414,250,361 | 12.11% | -7,089,534 | -7,089,534 | 407,160,827 | 11.90% | |||
Including: held by domestic corporates | |||||||||
held by domestic individuals | 414,250,361 | 12.11% | -7,089,534 | -7,089,534 | 407,160,827 | 11.90% | |||
4. Shares held by foreign shareholders | |||||||||
Including: held by foreign corporates | |||||||||
held by foreign individuals | |||||||||
II. Shares Without Restrictions | 3,006,152,839 | 87.89% | 7,089,534 | 7,089,534 | 3,013,242,373 | 88.10% | |||
1. RMB common shares | 3,006,152,839 | 87.89% | 7,089,534 | 7,089,534 | 3,013,242,373 | 88.10% | |||
2. Domestic listed foreign shares | |||||||||
3. Overseas listed foreign shares | |||||||||
4. Others | |||||||||
III. Total Number of Shares | 3,420,403,200 | 100.00% | 3,420,403,200 | 100.00% |
Reasons for changes in shares? Applicable ? Not applicableApproval of changes in shares? Applicable ? Not applicableTransfer of ownership change of shares? Applicable ? Not applicableThe impact of share changes on the financial indicators such as basic earnings per share, diluted earnings per share and net assets pershare attributable to the Company's common shareholders in the latest year and the latest period? Applicable ? Not applicableOther content that the Company considers necessary or that the securities regulator requires to be disclosed? Applicable ? Not applicable
2. Changes in restricted shares
? Applicable ? Not applicable
Unit: share
Name of shareholder | Starting number of restricted shares in reporting period | Increased in reporting period | Decreased in current period | Closing number of restricted shares in reporting period | Type for restricted shares | Date of the removal of restrictions |
Jiang Bin | 215,548,054 | 215,548,054 | Restricted shares of senior executives | Unlock 25% of shares held per annum | ||
Jiang Long | 187,758,898 | 62,586,299 | 62,586,299 | 187,758,898 | Restricted shares of senior executives | 62,586,299 restricted shares were released from lock-up on October 6, 2023 |
Hu Shuangmei | 16,200,000 | 16,200,000 | 0 | Restricted shares of senior executives | 16,200,000 restricted shares were released from lock-up on May 13, 2023 | |
Sun Hongbin | 7,089,534 | 7,089,534 | 0 | Restricted shares of senior executives | 7,089,534 restricted shares were released from lock-up on May 15, 2023 | |
Duan Huilu | 2,605,875 | 2,605,875 | Restricted shares of senior executives | Unlock 25% of shares held per annum | ||
Jia Jun'an | 600,000 | 200,000 | 200,000 | 600,000 | Restricted shares of senior executives | 200,000 restricted shares were released from lock-up on October 23, 2023 |
Liu Chunfa | 648,000 | 648,000 | Restricted shares of senior executives | Unlock 25% of shares held per annum | ||
Total | 430,450,361 | 62,786,299 | 86,075,833 | 407,160,827 | - | - |
II. Issuance and Listing of Securities
1. Securities issuance (excluding preference shares) during the reporting period
? Applicable ? Not applicable
2. Description of changes in the total number of shares, the structure of shareholders, and the structure ofassets and liabilities? Applicable ? Not applicable
3. Existing internal employee shares
? Applicable ? Not applicableIII. Shareholders and actual controllers
1. Number of shareholders and corresponding shareholding
Unit: share
Total number of common shareholders at the end of the reporting period | 386,707 | Total number of common shareholders as the end of the previous month before disclosure | 399,382 | Total number of preference shareholders whose voting rights were restored at the end of the | 0 | Total number of preference shareholders whose voting rights were restored at the end of the previous month before disclosure date of the annual report | 0 |
date of the annual report | reporting period (if any) | |||||||
Shareholding of shareholders with more than 5% of shares or the top 10 shareholders (Excluding lending of shares through refinancing) | ||||||||
Name of shareholder | Type of shareholder | Percentage | Total common shares held at the end of the reporting period | Increase/ decrease during the reporting period | The number of common shares held with trading restrictions | The number of shares held without trading restrictions | Pledge or freeze status | |
Share status | Number | |||||||
Goertek Group Co., Ltd. | Domestic non-state-owned corporation | 14.84% | 507,680,170 | 0 | 0 | 507,680,170 | Not applicable | 0 |
Jiang Bin | Domestic Individual | 8.40% | 287,397,406 | 0 | 215,548,054 | 71,849,352 | Not applicable | 0 |
Jiang Long | Domestic Individual | 7.32% | 250,345,197 | 0 | 187,758,898 | 62,586,299 | Pledged | 65,000,000 |
Hong Kong Securities Clearing Company Ltd. (HKSCC) | Overseas corporation | 3.29% | 112,527,947 | -12,047,341 | 0 | 112,527,947 | Not applicable | 0 |
China Securities Finance Corporation Limited | Other | 2.43% | 83,044,011 | 0 | 0 | 83,044,011 | Not applicable | 0 |
Goertek Inc. - Home No. 6 ESOP | Other | 1.97% | 67,338,040 | 67,338,040 | 0 | 67,338,040 | Not applicable | 0 |
Hu Shuangmei | Domestic Individual | 0.47% | 16,200,000 | 0 | 0 | 16,200,000 | Not applicable | 0 |
Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | Other | 0.47% | 15,936,093 | 7,090,800 | 0 | 15,936,093 | Not applicable | 0 |
Pi Taotao | Domestic Individual | 0.46% | 15,762,700 | 1,662,700 | 0 | 15,762,700 | Not applicable | 0 |
China Everbright Bank Co., Ltd.-Aegon-Industrial Business Model Preferred Hybrid Securities Investment Fund (LOF) | Other | 0.44% | 15,064,030 | 15,064,030 | 0 | 15,064,030 | Not applicable | 0 |
Strategic investors or general legal entities who become the top 10 shareholders as a result of the placement of new shares (if any) | None | |||||||
Explanation of the association of the above shareholders or their action in concert | Jiang Bin and Jiang Long are brothers. Jiang Bin and Hu Shuangmei are couple. Goertek Group Co., Ltd. is controlled by Jiang Bin and Jiang Long; Goertek Inc. - Home No. 6 ESOP is the Company's ESOP; The Company does not know whether the other top ten shareholders are related or acting in concert with each other. | |||||||
Explanation on | None |
entrustment/acceptance and waiver of voting rights by the aforesaid shareholders | |||
Special notes on the existing special account of securities repurchasing in the Top 10 shareholders (if any) | None | ||
Shareholding of the top 10 shareholders with unlimited conditions of sale (Excluding lending of shares through refinancing) | |||
Name of shareholder | Number of shares without sales restrictions held at the end of the reporting period | Type of shares | |
Type of shares | Number | ||
Goertek Group Co., Ltd. | 507,680,170 | Ordinary shares in RMB | 507,680,170 |
Hong Kong Securities Clearing Company Ltd. (HKSCC) | 112,527,947 | Ordinary shares in RMB | 112,527,947 |
China Securities Finance Corporation Limited | 83,044,011 | Ordinary shares in RMB | 83,044,011 |
Jiang Bin | 71,849,352 | Ordinary shares in RMB | 71,849,352 |
Goertek Inc. - Home No. 6 ESOP | 67,338,040 | Ordinary shares in RMB | 67,338,040 |
Jiang Long | 62,586,299 | Ordinary shares in RMB | 62,586,299 |
Hu Shuangmei | 16,200,000 | Ordinary shares in RMB | 16,200,000 |
Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | 15,936,093 | Ordinary shares in RMB | 15,936,093 |
Pi Taotao | 15,762,700 | Ordinary shares in RMB | 15,762,700 |
China Everbright Bank Co., Ltd.-Aegon-Industrial Business Model Preferred Hybrid Securities Investment Fund (LOF) | 15,064,030 | Ordinary shares in RMB | 15,064,030 |
Explanation on association or action in concert among top 10 shareholders of shares without sales restrictions, or between top 10 shareholders of shares without sales restrictions and top 10 shareholders | Jiang Bin and Jiang Long are brothers. Jiang Bin and Hu Shuangmei are couple. Goertek Group Co., Ltd. is controlled by Jiang Bin and Jiang Long; Goertek Inc. - Home No. 6 ESOP is the Company's ESOP; The Company does not know whether the other top ten shareholders are related or acting in concert with each other. | ||
Explanation on the top ten common shareholders' participation in the financing and loan businesses of securities trades(if any) | At the end of the reporting period, the shares held by Goertek Group Co., Ltd., the controlling shareholder of the Company include the 150,000,000 shares held in the client credit transaction guarantee securities account of Southwest Securities Co., Ltd. At the end of the period, Pi Taotao held 15,762,700 shares of the Company through the securities margin trading account. |
Shareholding of top 10 shareholders involved in the securities refinancing transactions? Applicable ? Not applicable
Unit: share
Shareholding of top 10 shareholders involved in the Securities Lending Transactions | ||||||||
Name of shareholder (full name) | Shareholding of the general account and credit account at the beginning of the period | Shares involved in the Securities Lending Transactions that have not been returned at the beginning of the period | Shareholding of the general account and credit account at the end of the period | Shares involved in the Securities Lending Transactions that have not been returned at the end of the period | ||||
Number in total | Percentage of total share capital | Number in total | Percentage of total share capital | Number in total | Percentage of total share capital | Number in total | Percentage of total share capital |
Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | 8,845,293 | 0.26% | 1,025,700 | 0.03% | 15,936,093 | 0.47% | 1,264,000 | 0.04% |
Changes in the top ten shareholders from the previous period? Applicable ? Not applicable
Unit: share
Changes in the top ten shareholders from the end of the previous period | |||||
Name of shareholder (full name) | Entry/Exit during the reporting period | Number of shares involved in Securities Lending Transactions that have not been returned at the end of the period | Number of shares in the general account, credit account, or involved in Securities Lending Transactions that have not been returned at the end of the period | ||
Number in total | Percentage of total share capital | Number in total | Percentage of total share capital | ||
National Social Security Fund Portfolio 103 | Exit | 0 | 0.00% | 0 | 0.00% |
Chen Shihui | Exit | 0 | 0.00% | 0 | 0.00% |
Tian'an Life Insurance Co., Ltd. - traditional products | Exit | 0 | 0.00% | 0 | 0.00% |
Dajia Life Insurance Co., Ltd. - universal products | Exit | 0 | 0.00% | 0 | 0.00% |
Taiping Life Insurance Co., Ltd. | Exit | 0 | 0.00% | 0 | 0.00% |
Goertek Inc. - Home No. 6 ESOP | Entry | 0 | 0.00% | 67,338,040 | 1.97% |
Hu Shuangmei | Entry | 0 | 0.00% | 16,200,000 | 0.47% |
Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | Entry | 1,264,000 | 0.04% | 17,200,093 | 0.50% |
Pi Taotao | Entry | 0 | 0.00% | 15,762,700 | 0.46% |
China Everbright Bank Co., Ltd.-Aegon-Industrial Business Model | Entry | 0 | 0.00% | 15,064,030 | 0.44% |
Changes in the top ten shareholders from the end of the previous period | |||||
Name of shareholder (full name) | Entry/Exit during the reporting period | Number of shares involved in Securities Lending Transactions that have not been returned at the end of the period | Number of shares in the general account, credit account, or involved in Securities Lending Transactions that have not been returned at the end of the period | ||
Number in total | Percentage of total share capital | Number in total | Percentage of total share capital | ||
Preferred Hybrid Securities Investment Fund (LOF) |
Whether the Company's top 10 common shareholders and top 10 common shareholders without share sales restrictions agreed on anyrepurchase transaction in the reporting period? Yes ? NoNone of the Company's top 10 common shareholders and top 10 common shareholders without share sales restrictions agreed on anyrepurchase in the reporting period.
2. Particulars about the controlling shareholder
Nature of the controlling shareholder: Private corporateType of the controlling shareholder: Legal entity
Name of the controlling shareholder | Legal representative/Head of the Company | Date of establishment | Organization code | Business scope |
Goertek Group Co., Ltd. | Jiang Bin | April 24, 2001 | 913707007286084226 | Residential interior decoration; medical services; technology import and export; investing activities conducted with own funds; non-residential real estate leasing; technical services; wholesale of edible agricultural products; tree planting management; electronic products sales, etc. |
Shareholdings of the controlling shareholder in other listed companies | None |
Change of the controlling shareholders in the reporting period? Applicable ? Not applicableNo change on the controlling shareholder of the Company in the reporting period
3. Actual controllers of the Company and persons acting in concert with the actual controller
Nature of the actual controllers: Domestic individualType of the actual controllers: Individual
Name of the actual controller | Relationship with the actual controller | Nationality | Whether he/she has obtained the right of residence in another country or region |
Jiang Bin | Himself | China | No |
Hu Shuangmei | Himself | China | No |
Jiang Long | Acting in concert (including agreement, relative and common control) | China | No |
Main occupation and title | Mr. Jiang Bin is currently the chairman of board of the Company; Mr. Jiang Long served as the |
vice chairman and president of the Company during the reporting period. (He resigned from the above positions on April 6, 2023). Mr. Jiang Long is currently the senior consultant of the Company | |
Information about other listed companies at home and abroad controlled in the last ten years | Goertek Inc. |
Change on the actual controllers in the reporting period? Applicable ? Not applicableNo change on the actual controllers of the Company in the reporting periodBlock Diagram for Property Right and Control Relationship Between the Company and its Actual Controllers
The actual controller controls the Company via trust or other ways of asset management? Applicable ? Not applicable
4. All the pledged shares account for 80% of the total shares held by the controlling shareholder or No.1shareholder of the Company and their persons acting in concert? Applicable ? Not applicable
5. Particulars about other corporate shareholders with over 10% shares of the Company? Applicable ? Not applicable
6. Particulars on share sales restrictions for controlling shareholders, actual controllers, or other partiesinvolved in the reorganization of the Company or in any commitments related to the sales of share? Applicable ? Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting Period
Progress of share repurchase? Applicable ? Not applicable
Disclosure time of the plan | Number of shares to be repurchased (share) | Percentage of total share capital | Amount to be repurchased (RMB 10,000) | Period of proposed repurchase | Purpose of repurchase | Number of repurchases (share) | Proportion of repurchased shares to the underlying shares covered by the Stock Incentive Plan (if any) |
October 27, 2023 | 27,461,749 | 0.80% | 50,000 (inclusive) - 70,000 (inclusive) | Within 12 months from the date of approval by the Board of Directors of this repurchase | For ESOP or stock option incentive plan | 9,632,700 |
Jiang Bin
Jiang Bin | Hu Shuangmei |
Goertek Group Co., Ltd.
Goertek Group Co., Ltd.Goertek Inc.
plan, unless therelevant conditionsare met earlier, therepurchase periodshall expire.
Note: As of the reporting date of this report, the Company has repurchased 34,205,700 shares through the continuous biddingapproach via the special securities repurchase account, accounting for 1.00% of the total share capital of the Company. The paymentamount (excluding transaction costs) is RMB 596,685,920.70.The progress of repurchased shares reduction through centralized trading at competitive price? Applicable ? Not applicable
Section VIII Preference Shares? Applicable ? Not applicableThere are no preference shares in the reporting period.
Section IX Bonds
? Applicable ? Not applicable
Section X Financial Report
I. Auditor's Report
Auditor's Opinion | Standard unqualified opinion |
Auditor's Report Sign-off Date | March 27, 2024 |
Name of the audit institution | Zhongxi CPAs (Special General Partnership) |
Auditor's Report Number | Zhong Xi Cai Shen No. 2024S00362 |
Name of the Certified Public Accountant | Du Yeqin, Zhang Shuli |
Auditor's Report
Zhong Xi Cai Shen No. 2024S00362To all the shareholders of Goertek Inc.,I. OpinionWe have audited the accompanying financial statements of Goertek Inc. (hereinafter referred to as "Goertek"), including theconsolidated and Company's balance sheets as of December 31, 2023, consolidated and Company's income statements, consolidatedand Company's cash flow statements, consolidated and Company's statements of changes in shareholder' equity, and notes to thefinancial statements for the year then ended.In our opinion, the accompanying financial statements have been prepared in all material aspects in accordance with the AccountingStandards for Business Enterprises, fairly reflecting the consolidated and Company's financial position as of December 31, 2023 andof the consolidated and Company's financial performance and cash flows for 2023.II. Basis for OpinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilitiesunder those Standards are further described in the "Certified Public Accountants' Responsibilities for the Audit of the FinancialStatements" section of the auditor's report. We are independent of Goertek Inc. in accordance with the Code of Ethics for CertifiedPublicAccountants of China ("Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditor's opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, are of most significance in our audit of the financial statementsof the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters. We determine that the following matters are criticalaudit matters that need to be communicated in the audit report.(I) Revenue recognition
1. Description of the matters
Goertek Inc. is mainly in the business of producing and selling electronic components, and for the accounting policy of revenuerecognition, please refer to ''32. Revenue '' in ''V. Significant Accounting Policies and Accounting Estimates'' of notes to the financialstatements. In 2023, the operating revenue in the consolidated financial statements of Goertek Inc. is RMB 98,573.90 million.Revenue is one of the key performance indicators of Goertek Inc. and is the major source of profit of the Company, and the accuracyand completeness of revenue recognition has a significant impact on the profits of the Company. Therefore, we identified therecognition of Goertek Inc.'s revenue as a key audit matter.
2. Audit measures
We performed the following audit procedures in recognition of the operating revenue:
(1) Understood, evaluated and tested the design and operation effectiveness of internal control related to revenue recognition;
(2) Performed analytical review procedure to analyze the rationality of changes in the operating revenue and gross profits;
(3) Identified the risk in the commodity ownership and the contractual terms related to remuneration transfer, evaluated whether theaccounting policies for revenue recognition in different modes were appropriate, and evaluated whether the time point for revenuerecognition of the Company was consistent with the requirements in the Accounting Standards for Business Enterprises by checkingthe major sales contracts or orders, understanding the policies for receipt and return of goods, communicating with the managementand other procedures;
(4) Selected samples to check the sales contracts or orders, sales invoices, shipping orders, declarations for exportation, waybills(receipt forms), bank slips and other supporting documents related to revenue recognition, and executed external confirmationprocedures on a sampling basis;
(5) Selected samples to reconcile the shipping orders, declarations for exportation, waybills (receipt forms) and other supportingdocuments against the product sales revenue recognized before and after the balance sheet date to evaluate whether the revenue wasrecognized in the appropriate accounting period.(II) Goodwill impairment
1. Description of the matters
For the provision for impairment of goodwill, please refer to the accounting policy of "26. Impairment of Long-term Assets" in "(V)Important accounting policies and accounting estimates" of notes to the financial statements for details. As of December 31, 2023, thebook value of goodwill was RMB 605.03 million, which mainly resulted from the goodwill generated from the acquisition of thesubsidiary Uphoton Technology (Shaoxing) Co., Ltd. in the current year, which amounted to RMB 588.17 million.In accordance with the Accounting Standards for Business Enterprises, the Company's management performs an impairment test ongoodwill at the end of each year and adjusts the book value of goodwill based on the results of the impairment test. The process ofassessing goodwill impairment is complex. Predicting the recoverable amount involves estimating the present value of future cashflows for the asset group. The management needs to make significant judgments and assumptions in its forecasts. The use of differentassumptions can have a significant impact on the assessment of the recoverable amount of goodwill, as they are affected bymanagement's judgment of the future market and economic environment.Since the book value of goodwill has a significant impact on financial statements and the provision for impairment of goodwill requiresthe management to make significant accounting judgments and estimates, we identified the impairment of goodwill as a key auditmatter.
2. Audit measures
We mainly implemented the following audit procedures for the impairment of goodwill:
(1) Understood, evaluated, and tested the design and operation effectiveness of internal control related to the impairment of goodwill;
(2) Review whether the management's determination of the asset group and allocation method for goodwill comply with the provisionsof the Accounting Standards for Business Enterprises;
(3) Assess the competency, professionalism, and objectivity of the external evaluation organization hired by the management;
(4) Discuss with the external evaluation institution the reasonableness of the evaluation method, key evaluation assumptions, parameterselection, forecast of future income, and discount rate of cash flow used in the goodwill impairment test;
(5) Review the valuation method used for the asset group containing the goodwill and the evaluation report issued by the externalevaluation institution.IV. Other InformationThe Management of Goertek Inc. (the Management) is responsible for Other Information. Other Information includes informationcovered in the 2023 Annual Report of Goertek Inc. but excludes financial statements and auditor's reports.Our auditor's opinions on financial statements do not cover Other Information. We also do not express any kind of verificationconclusion on Other Information.In combination with our audit of the financial statements, we're obliged to read the Other Information. In the process, we considerwhether the Other Information is materially inconsistent with the financial statements or the information we obtained during the audit,or whether there is a material misstatement.Based on the work that we have already done, if we conclude that the Other Information contains material misstatements, we shouldreport the fact. In this regard, we have nothing to report.V. Responsibilities of Management and Governance for the Financial Statements
The management of Goertek Inc. is responsible for the preparation and fair presentation of the financial statements in accordance withthe Accounting Standards for Business Enterprises, and for the design, implementation and maintenance of such internal controlnecessary to ensure that the financial statements are free from material misstatement, whether due to fraud or error.In preparing the financial statements, Management is responsible for assessing the ability of Goertek Inc. to continue as a going concern,disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management intendsto liquidate Goertek Inc. or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the financial reporting process of Goertek Inc.VI. Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with the Auditing Standards will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably 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 Auditing Standards, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements due to fraud or error, design and perform auditprocedures to address those risks, and obtain audit evidence that is sufficient and appropriate as the basis for our opinion. The risk ofnot detecting a material misstatement resulting from fraud is higher than that resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit to design appropriate audit procedures.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by Management.
4. Conclude on the appropriateness of Management's use of the going concern basis of accounting. And, based on the audit evidenceobtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Goertek Inc.'s abilityto continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, to express a qualified opinion. Ourconclusions are based on the information obtained up to the date of our auditor's report. However, future events or conditions maycause Goertek Inc. to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements fairlyrepresent the underlying transactions and events.
6. Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities within Goertek Inc. toexpress an opinion on the financial statements. We are responsible for the instruction, supervision and execution of the Group's audit,and assume full responsibility for the auditor's opinion.We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regardingindependence and communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence and, where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were of most significance in theaudit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expectedto outweigh the public interest benefits of such communication.
Zhongxi CPAs (Special General Partnership) | Certified Public Accountant in China (Engagement partner) | |
Du Yeqin | ||
Beijing China | Certified Public Accountant in China: | |
Zhang Shuli |
March 27, 2024
II. Financial StatementsThe currency in the notes to the financial statements is: RMB
1. Consolidated Balance Sheet
Prepared by: Goertek Inc.
December 31, 2023
Unit: RMB
Item | December 31, 2023 | January 1, 2023 |
Current assets: | ||
Cash at bank and on hand | 14,737,312,329.71 | 12,682,871,091.80 |
Deposit reservation for balance | ||
Lending funds | ||
Financial assets held for trading | 587,445,091.69 | 338,662,097.66 |
Derivative financial assets | ||
Notes receivable | 139,468,321.29 | 25,847,492.24 |
Accounts receivable | 12,424,618,676.81 | 14,396,180,782.93 |
Financing receivables | 9,059,230.11 | 22,375,874.12 |
Advances to suppliers | 254,633,800.07 | 50,656,153.43 |
Premiums receivable | ||
Reinsurance accounts receivable | ||
Provision of cession receivable | ||
Other receivables | 89,261,417.90 | 96,442,803.18 |
Including: Interest receivable | ||
Dividends receivable | ||
Redemptory financial asset for sale | ||
Inventories | 10,794,894,394.42 | 17,348,670,744.58 |
Contract assets | ||
Assets held for sale | ||
Current portion of non-current assets | 494,634,708.33 | 70,302,566.25 |
Other current assets | 509,834,064.49 | 530,991,435.56 |
Total current assets | 40,041,162,034.82 | 45,563,001,041.75 |
Non-current assets: | ||
Loans and advances disbursed | ||
Debt investments | ||
Other debt investments | ||
Long-term receivables | ||
Long-term equity investments | 760,220,882.07 | 361,008,671.83 |
Investments in other equity instruments | 591,269,883.71 | 699,249,262.24 |
Other non-current financial assets | 322,640,244.40 | 318,661,575.31 |
Investment properties | ||
Fixed assets | 22,305,456,354.63 | 21,459,756,268.25 |
Construction in progress | 2,071,280,343.55 | 2,424,443,775.33 |
Bearer biological assets |
Item | December 31, 2023 | January 1, 2023 |
Oil and gas assets | ||
Right-of-use assets | 615,431,849.91 | 580,175,922.73 |
Intangible assets | 3,280,071,024.41 | 2,720,793,670.68 |
Development costs | 446,804,705.86 | 361,178,111.91 |
Goodwill | 605,033,979.56 | 16,859,185.08 |
Long-term prepaid expenses | 412,046,659.67 | 337,561,524.06 |
Deferred tax assets | 1,609,355,102.73 | 1,461,726,750.47 |
Other non-current assets | 683,636,375.83 | 964,135,835.23 |
Total non-current assets | 33,703,247,406.33 | 31,705,550,553.12 |
Total assets | 73,744,409,441.15 | 77,268,551,594.87 |
Current liabilities: | ||
Short-term borrowings | 5,214,491,316.62 | 7,120,846,026.67 |
Borrowings from banks and other financial institutions | ||
Borrowing funds | ||
Financial liabilities held for trading | 129,579,785.95 | 202,293,742.46 |
Derivative financial liabilities | ||
Notes payable | 4,538,354,620.68 | 4,850,498,246.08 |
Accounts payable | 17,582,263,359.17 | 25,748,758,270.19 |
Advances from clients | ||
Contract liabilities | 3,472,638,215.20 | 2,295,347,547.31 |
Financial assets sold for repurchase | ||
Client deposits and deposits from banks and other financial institutions | ||
Receiving from vicariously traded securities | ||
Receiving from vicariously sold securities | ||
Employee benefits payable | 1,219,545,540.65 | 1,039,571,778.39 |
Taxes payable | 120,856,054.02 | 284,911,767.58 |
Other payables | 87,474,942.48 | 78,974,306.79 |
Including: Interest payable | ||
Dividends payable | ||
Handling charges and commissions payable | ||
Dividend payable for reinsurance | ||
Liabilities held for sale | ||
Current portion of non-current liabilities | 1,072,169,260.73 | 1,095,618,327.74 |
Other current liabilities | 4,718,260.10 | 4,252,178.60 |
Total current liabilities | 33,442,091,355.60 | 42,721,072,191.81 |
Non-current liabilities: | ||
Reserve fund for insurance contracts | ||
Long-term borrowings | 6,631,470,751.86 | 2,206,000,000.00 |
Debentures payable |
Item | December 31, 2023 | January 1, 2023 |
Including: Preference shares | ||
Perpetual bonds | ||
Lease liabilities | 518,159,559.63 | 470,704,507.75 |
Long-term payables | ||
Long-term employee benefits payable | ||
Provisions | ||
Deferred income | 519,084,658.34 | 532,374,144.38 |
Deferred tax liabilities | 757,980,175.34 | 906,537,829.44 |
Other non-current liabilities | 348,058,624.72 | 172,261,037.39 |
Total non-current liabilities | 8,774,753,769.89 | 4,287,877,518.96 |
Total liabilities | 42,216,845,125.49 | 47,008,949,710.77 |
Shareholders' equity: | ||
Share capital | 3,420,403,200.00 | 3,420,403,200.00 |
Other equity instruments | ||
Including: Preference shares | ||
Perpetual bonds | ||
Capital surplus | 8,998,372,370.61 | 10,280,659,251.03 |
Less: Treasury stock | 278,530,746.47 | 2,291,973,146.75 |
Other comprehensive income | -40,934,939.89 | 122,377,334.36 |
Specific reserve | 1,551,313.67 | |
Surplus reserve | 1,665,066,603.96 | 1,446,536,121.51 |
General risk reserve | 6,081,200.00 | 6,081,200.00 |
Undistributed profits | 17,038,581,549.12 | 16,509,551,595.59 |
Total equity attributable to the owners of the Company | 30,810,590,551.00 | 29,493,635,555.74 |
Minority interests | 716,973,764.66 | 765,966,328.36 |
Total shareholders' equity | 31,527,564,315.66 | 30,259,601,884.10 |
Total liabilities and shareholders' equity | 73,744,409,441.15 | 77,268,551,594.87 |
Legal representative: Jiang Bin | Principal in charge of accounting: Li Yongzhi | Head of the accounting department: Li Yongzhi |
2. Parent company balance sheet
Unit: RMB
Item | December 31, 2023 | January 1, 2023 |
Current assets: | ||
Cash at bank and on hand | 7,261,479,909.89 | 3,297,113,271.47 |
Financial assets held for trading | 43,356,500.16 | 182,610,198.06 |
Derivative financial assets | ||
Notes receivable | 118,113,089.55 | 7,252,050.59 |
Accounts receivable | 6,598,701,135.53 | 8,870,599,478.20 |
Financing receivables | 14,606,619.59 | 20,812,233.59 |
Advances to suppliers | 25,044,450.75 | 12,302,281.24 |
Other receivables | 5,265,145,730.57 | 7,549,205,233.13 |
Item | December 31, 2023 | January 1, 2023 |
Including: Interest receivable | ||
Dividends receivable | ||
Inventories | 2,635,810,098.44 | 4,322,610,550.17 |
Contract assets | ||
Assets held for sale | ||
Current portion of non-current assets | 494,634,708.33 | 70,184,291.67 |
Other current assets | 97,125,290.56 | 150,596,159.89 |
Total current assets | 22,554,017,533.37 | 24,483,285,748.01 |
Non-current assets: | ||
Debt investments | ||
Other debt investments | ||
Long-term receivables | ||
Long-term equity investments | 9,126,400,831.64 | 6,761,368,254.99 |
Investments in other equity instruments | ||
Other non-current financial assets | 212,858,392.98 | 187,386,179.39 |
Investment properties | ||
Fixed assets | 8,821,843,731.49 | 10,645,143,425.63 |
Construction in progress | 445,271,386.99 | 1,126,851,927.87 |
Bearer biological assets | ||
Oil and gas assets | ||
Right-of-use assets | 223,664,825.78 | 280,327,936.71 |
Intangible assets | 1,567,110,323.92 | 1,984,169,023.39 |
Development costs | 369,518,862.88 | 241,947,146.57 |
Goodwill | ||
Long-term prepaid expenses | 34,955,204.06 | 20,436,053.45 |
Deferred tax assets | 808,632,854.34 | 830,807,911.11 |
Other non-current assets | 536,224,536.38 | 669,073,701.52 |
Total non-current assets | 22,146,480,950.46 | 22,747,511,560.63 |
Total assets | 44,700,498,483.83 | 47,230,797,308.64 |
Current liabilities: | ||
Short-term borrowings | 3,053,875,769.23 | 4,444,406,920.52 |
Financial liabilities held for trading | 9,365,000.00 | 19,392,000.00 |
Derivative financial liabilities | ||
Notes payable | 4,648,667,927.19 | 4,648,250,141.38 |
Accounts payable | 5,790,045,232.84 | 9,328,082,173.15 |
Advances from clients | ||
Contract liabilities | 683,902,938.19 | 1,005,783,290.09 |
Employee benefits payable | 520,368,677.52 | 493,789,544.79 |
Taxes payable | 28,220,254.58 | 40,037,090.10 |
Other payables | 1,143,932,322.71 | 2,600,416,992.05 |
Including: Interest payable | ||
Dividends payable | ||
Liabilities held for sale |
Item | December 31, 2023 | January 1, 2023 |
Current portion of non-current liabilities | 380,313,974.50 | 1,006,575,141.61 |
Other current liabilities | 1,280,795.69 | 1,487,433.65 |
Total current liabilities | 16,259,972,892.45 | 23,588,220,727.34 |
Non-current liabilities: | ||
Long-term borrowings | 4,894,000,000.00 | 2,206,000,000.00 |
Debentures payable | ||
Including: Preference shares | ||
Perpetual bonds | ||
Lease liabilities | 222,212,481.50 | 267,086,388.96 |
Long-term payables | ||
Long-term employee benefits payable | ||
Provisions | ||
Deferred income | 171,703,915.50 | 184,692,979.14 |
Deferred tax liabilities | 400,038,411.93 | 578,621,000.58 |
Other non-current liabilities | ||
Total non-current liabilities | 5,687,954,808.93 | 3,236,400,368.68 |
Total liabilities | 21,947,927,701.38 | 26,824,621,096.02 |
Shareholders' equity: | ||
Share capital | 3,420,403,200.00 | 3,420,403,200.00 |
Other equity instruments | ||
Including: Preference shares | ||
Perpetual bonds | ||
Capital surplus | 6,909,206,304.38 | 8,421,030,014.05 |
Less: Treasury stock | 278,530,746.47 | 2,291,973,146.75 |
Other comprehensive income | -12,650.40 | |
Specific reserve | ||
Surplus reserve | 1,665,063,821.56 | 1,446,533,339.11 |
Undistributed profits | 11,036,440,853.38 | 9,410,182,806.21 |
Total shareholders' equity | 22,752,570,782.45 | 20,406,176,212.62 |
Total liabilities and shareholders' equity | 44,700,498,483.83 | 47,230,797,308.64 |
3. Consolidated income statement
Unit: RMB
Item | 2023 | 2022 |
I. Revenue | 98,573,902,273.14 | 104,894,324,162.26 |
Including: Operating revenue | 98,573,902,273.14 | 104,894,324,162.26 |
Interest income | ||
Earned premium | ||
Total revenue from handling charges and commissions | ||
II. Total Operating Cost | 97,795,818,309.31 | 101,718,859,767.81 |
Including: cost of sales | 89,753,064,209.99 | 93,233,476,543.28 |
Interest expense |
Item | 2023 | 2022 |
Handling charge and commission expense | ||
Surrender value | ||
Net payments for insurance claims | ||
Net amount of withdrawal of insurance contract reserve | ||
Expenditures of policy dividend | ||
Amortized reinsurance expenditures | ||
Taxes and surcharges | 244,044,842.29 | 266,930,500.29 |
Selling expenses | 528,150,303.42 | 548,298,842.05 |
General and administrative expenses | 2,202,814,353.55 | 2,294,505,645.46 |
Research and development expenses | 4,715,969,451.42 | 5,226,525,154.99 |
Financial expenses | 351,775,148.64 | 149,123,081.74 |
Including: Interest expenses | 544,691,878.33 | 303,539,076.90 |
Interest income | 279,661,791.52 | 189,356,256.02 |
Add: Other income | 372,861,056.96 | 373,205,863.18 |
Investment income ("-" for loss) | -73,393,865.89 | -36,243,969.62 |
Including: Investment income from associates and joint ventures | -28,435,998.08 | 2,298,237.32 |
Gains or losses arising from derecognised financial assets at amortised cost | -5,724,287.70 | -23,037,232.06 |
Exchange gains ("-" for loss) | ||
Net exposure hedging income ("-" for loss) | ||
Gains on changes in fair value ("-" for loss) | 115,909,152.44 | -57,081,334.97 |
Credit impairment losses ("-" for loss) | 17,395,066.06 | -14,220,595.92 |
Asset impairment losses ("-" for loss) | -299,625,741.31 | -1,782,744,359.91 |
Gains on disposal of assets ("-" for loss) | -2,037,658.52 | -47,898,939.73 |
III. Operating Profit ("-" for loss) | 909,191,973.57 | 1,610,481,057.48 |
Add: Non-operating income | 34,817,135.08 | 21,477,460.44 |
Less: Non-operating expenses | 152,852,797.95 | 122,730,370.49 |
IV. Total Profit ("-" for total losses) | 791,156,310.70 | 1,509,228,147.43 |
Less: Income tax expenses | -228,254,892.89 | -281,790,237.36 |
V. Net profit ("-" for net loss) | 1,019,411,203.59 | 1,791,018,384.79 |
(I) Classification by continuity of operations | ||
1. Net profit from continuing operations ("-" for net loss) | 1,019,411,203.59 | 1,791,018,384.79 |
2. Net profit from discontinued operations ("-" for net loss) | ||
(II) Classification by ownership of the equity | ||
1. Net profit attributable to the shareholders of the Company | 1,088,076,730.88 | 1,749,181,131.83 |
2. Minority interests | -68,665,527.29 | 41,837,252.96 |
VI. Other comprehensive income, net of tax | -161,476,471.40 | 225,089,038.47 |
Other comprehensive income, net of tax attributable to the shareholders of the Company | -163,312,274.25 | 222,524,103.93 |
Item | 2023 | 2022 |
(I) Other comprehensive income items which will not be reclassified subsequently to profit or loss | -92,161,581.61 | 2,195,604.99 |
1. Changes in remeasurement of defined benefit plan | ||
2. Shares of other comprehensive income of the investee accounted for using equity method that will not be subsequently reclassified to profit or loss | ||
3. Changes in fair value of investments in other equity instruments | -92,161,581.61 | 2,195,604.99 |
4. Changes in fair value attributable to change in the credit risk of financial liability designated at FVPL | ||
5. Others | ||
(II) Other comprehensive income items which will be reclassified subsequently to profit or loss | -71,150,692.64 | 220,328,498.94 |
1. Shares of other comprehensive income of the investee accounted for using equity method that will be reclassified to profit or loss | -12,650.40 | -27,351,340.30 |
2. Changes in fair value of other debt investments | ||
3. Shares of financial assets reclassified to other comprehensive income | ||
4. Provision for credit impairment of other debt investments | ||
5. Effective portion of gains or losses on hedging instruments in a cash flow hedge | ||
6. Translation differences on translation of foreign currency financial statements | -71,138,042.24 | 247,679,839.24 |
7. Others | ||
Net other comprehensive income, net of tax, attributable to minority shareholders | 1,835,802.85 | 2,564,934.54 |
VII. Total comprehensive income | 857,934,732.19 | 2,016,107,423.26 |
Attributable to the shareholders of the Company | 924,764,456.63 | 1,971,705,235.76 |
Attributable to minority shareholders | -66,829,724.44 | 44,402,187.50 |
VIII. Earnings per share | ||
(I) Basic earnings per share | 0.32 | 0.52 |
(II) Diluted earnings per share | 0.32 | 0.52 |
In case of combination of enterprises under common control during current period, the net profit before combination realized byacquiree is RMB 0.00. The net profit realized by the acquiree in the previous period is RMB 0.00.
Legal representative: Jiang Bin | Principal in charge of accounting: Li Yongzhi | Head of the accounting department: Li Yongzhi |
4. Parent Company Income Statement
Unit: RMB
Item | 2023 | 2022 |
I. Revenue | 28,761,890,617.55 | 42,977,392,050.91 |
Less: Cost of sales | 24,341,394,089.94 | 37,992,035,039.68 |
Taxes and surcharges | 124,703,875.55 | 166,468,610.77 |
Selling expenses | 388,403,329.76 | 357,947,471.28 |
General and administrative expenses | 1,688,533,595.04 | 1,883,669,477.96 |
Research and development expenses | 2,298,748,673.83 | 2,842,072,542.12 |
Financial expenses | 262,664,628.13 | -286,250,474.81 |
Including: Interest expenses | 339,586,343.34 | 244,537,695.61 |
Interest income | 135,037,374.40 | 119,926,860.39 |
Add: Other income | 62,665,388.48 | 59,312,468.45 |
Investment income ("-" for loss) | 2,299,697,147.05 | 656,680,494.07 |
Including: Investment income from associates and joint ventures | -23,010,602.53 | -7,694,836.13 |
Gains or losses arising from derecognised financial assets at amortised cost ("-" for loss) | -313,191.66 | |
Net exposure hedging income ("-" for loss) | ||
Gains on changes in fair value ("-" for loss) | -81,515,891.85 | 81,215,298.02 |
Credit impairment losses ("-" for loss) | 4,387,353.96 | 7,287,106.67 |
Asset impairment losses ("-" for loss) | -71,056,486.81 | -1,496,859,325.46 |
Gains on disposal of assets ("-" for loss) | 245,214,426.66 | -3,522,548.55 |
II. Operating Profit ("-" for loss) | 2,116,834,362.79 | -674,437,122.89 |
Add: Non-operating income | 20,530,603.91 | 10,715,077.09 |
Less: Non-operating expenses | 108,467,674.06 | 88,097,731.93 |
III. Total profit ("-" for total losses) | 2,028,897,292.64 | -751,819,777.73 |
Less: Income tax expenses | -156,407,531.88 | -393,042,246.95 |
IV. Net profit ("-" for net loss) | 2,185,304,824.52 | -358,777,530.78 |
(I) Net profit from continuing operations ("-" for net loss) | 2,185,304,824.52 | -358,777,530.78 |
(II) Net profit from discontinued operations ("-" for net loss) | ||
V. Other comprehensive income, net of tax | -12,650.40 | |
(I) Other comprehensive income items which will not be reclassified subsequently to profit or loss | ||
1. Changes in remeasurement of defined benefit plan | ||
2. Shares of other comprehensive income of the investee accounted for using equity method that will not be subsequently reclassified to profit or loss | ||
3. Changes in fair value of investments in other equity instruments | ||
4. Changes in fair value attributable to change in the credit risk of financial liability designated at FVPL |
Item | 2023 | 2022 |
5. Others | ||
(II) Other comprehensive income items which will be reclassified subsequently to profit or loss | -12,650.40 | |
1. Shares of other comprehensive income of the investee accounted for using equity method that will be reclassified to profit or loss | -12,650.40 | |
2. Changes in fair value of other debt investments | ||
3. Shares of financial assets reclassified to other comprehensive income | ||
4. Provision for credit impairment of other debt investments | ||
5. Effective portion of gains or losses on hedging instruments in a cash flow hedge | ||
6. Translation differences on translation of foreign currency financial statements | ||
7. Others | ||
VI. Total comprehensive income | 2,185,292,174.12 | -358,777,530.78 |
VII. Earnings per share | ||
(I) Basic earnings per share | ||
(II) Diluted earnings per share |
5. Consolidated statement of cash flows
Unit: RMB
Item | 2023 | 2022 |
I. Cash flows from operating activities: | ||
Cash received from sale of goods or rendering of services | 75,929,642,962.84 | 87,859,623,816.37 |
Net increase in client deposits and deposits from banks and other financial institutions | ||
Net increase in borrowings from banks and other financial institutions | ||
Net increase in borrowing funds from other financial institutions | ||
Cash receipts from original insurance contract premium | ||
Net cash received from reinsurance business | ||
Net increase in deposits and investments from policy holders | ||
Cash received from for interests, fees and commissions | ||
Net increase in borrowing funds | ||
Net increase in repurchase business funds | ||
Net cash received from securities trading brokerage | ||
Refund of taxes and surcharges | 2,261,673,960.35 | 3,177,120,800.53 |
Item | 2023 | 2022 |
Cash received relating to other operating activities | 1,975,191,545.77 | 1,924,041,394.99 |
Sub-total of cash inflow from operating activities | 80,166,508,468.96 | 92,960,786,011.89 |
Cash paid for goods and services | 59,071,783,992.11 | 70,912,862,925.28 |
Net increase in loans and advances to clients | ||
Net increase in deposits with central bank and other financial institutions | ||
Payments of claims for original insurance contracts | ||
Net increase in lending funds | ||
Cash paid for interests, fees and commissions | ||
Cash payments of policy dividend | ||
Cash paid to and on behalf of employees | 8,776,104,462.25 | 9,048,023,602.48 |
Payments of taxes and surcharges | 919,231,302.84 | 835,585,413.96 |
Cash paid relating to other operating activities | 3,247,500,468.38 | 3,847,200,705.49 |
Sub-total of cash outflow from operating activities | 72,014,620,225.58 | 84,643,672,647.21 |
Net cash flow from operating activities | 8,151,888,243.38 | 8,317,113,364.68 |
II. Cash flows from investing activities | ||
Cash received from disposal of investments | 4,634,462,748.31 | 1,060,923,791.21 |
Cash received from returns on investments | 60,793,940.52 | 9,371,384.39 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 386,789,592.09 | 49,533,749.98 |
Net cash received from disposal of subsidiaries and other business units | 2,205,000.00 | 322,965.16 |
Cash received relating to other investing activities | 110,692,623.30 | 21,653,530.71 |
Sub-total of cash inflow from investing activities | 5,194,943,904.22 | 1,141,805,421.45 |
Cash paid to acquire fixed assets, intangible assets and other long-term assets | 6,949,791,208.28 | 8,090,107,306.38 |
Cash paid to acquire investments | 5,298,074,936.07 | 2,118,347,402.73 |
Net increase in pledged loans | ||
Net cash paid to acquire subsidiaries and other business units | 457,663,281.50 | |
Cash paid relating to other investing activities | 72,806,657.72 | 10,363,395.50 |
Sub-total of cash outflow from investing activities | 12,778,336,083.57 | 10,218,818,104.61 |
Net cash flow from investing activities | -7,583,392,179.35 | -9,077,012,683.16 |
III. Cash flows from financing activities | ||
Cash received from capital contributions | 395,195,770.87 | |
Including: Cash received from capital contributions by minority shareholders of subsidiaries | 276,358,071.55 | |
Cash received from borrowings | 25,573,744,456.01 | 28,642,971,147.51 |
Cash received relating to other financing activities | 3,504,945,799.09 | 2,683,899,988.02 |
Sub-total of cash inflow from financing activities | 29,078,690,255.10 | 31,722,066,906.40 |
Item | 2023 | 2022 |
Cash repayments of borrowings | 23,316,046,943.91 | 25,446,211,817.27 |
Cash payments for distribution of dividends, profits, or cash payments for interest expenses | 836,849,923.30 | 953,234,131.28 |
Including: Cash payments for dividends and profits to minority shareholders of the subsidiaries | ||
Cash payments relating to other financing activities | 3,151,308,744.66 | 3,314,992,485.44 |
Sub-total of cash outflow from financing activities | 27,304,205,611.87 | 29,714,438,433.99 |
Net cash flow from financing activities | 1,774,484,643.23 | 2,007,628,472.41 |
IV. Effect of foreign exchange rate changes on cash and cash equivalents | 9,752,465.71 | 414,363,412.84 |
V. Net Increase in cash and cash equivalents | 2,352,733,172.97 | 1,662,092,566.77 |
Add: Cash and cash equivalents at beginning of year | 10,799,993,468.81 | 9,137,900,902.04 |
VI. Cash and cash equivalents at end of year | 13,152,726,641.78 | 10,799,993,468.81 |
6. Parent company cash flow statement
Unit: RMB
Item | 2023 | 2022 |
I. Cash flows from operating activities: | ||
Cash received from sale of goods or rendering of services | 31,268,693,118.12 | 44,433,843,690.52 |
Refund of taxes and surcharges | 965,640,380.86 | 2,133,662,516.06 |
Cash received relating to other operating activities | 257,945,473.34 | 444,026,016.74 |
Sub-total of cash inflow from operating activities | 32,492,278,972.32 | 47,011,532,223.32 |
Cash paid for goods and services | 23,349,870,042.92 | 35,135,811,819.24 |
Cash paid to and on behalf of employees | 3,681,964,108.86 | 4,730,047,823.61 |
Payments of taxes and surcharges | 136,209,295.26 | 204,340,880.43 |
Cash paid relating to other operating activities | 1,854,137,805.40 | 2,185,115,476.07 |
Sub-total of cash outflow from operating activities | 29,022,181,252.44 | 42,255,315,999.35 |
Net cash flow from operating activities | 3,470,097,719.88 | 4,756,216,223.97 |
II. Cash flows from investing activities | ||
Cash received from disposal of investments | 3,264,003,156.55 | 292,167,856.22 |
Cash received from returns on investments | 2,387,913,891.50 | 650,503,164.62 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,668,167,310.60 | 2,121,526,013.95 |
Net cash received from disposal of subsidiaries and other business units | ||
Cash received relating to other investing activities | 40,656,843,708.32 | 13,607,538,495.79 |
Sub-total of cash inflow from investing activities | 48,976,928,066.97 | 16,671,735,530.58 |
Cash paid to acquire fixed assets, intangible assets and other long-term assets | 2,957,290,194.36 | 5,264,058,543.36 |
Cash paid to acquire investments | 5,640,909,149.45 | 1,586,419,475.27 |
Item | 2023 | 2022 |
Net cash paid to acquire subsidiaries and other business units | ||
Cash paid relating to other investing activities | 38,368,792,587.00 | 17,199,579,824.51 |
Sub-total of cash outflow from investing activities | 46,966,991,930.81 | 24,050,057,843.14 |
Net cash flow from investing activities | 2,009,936,136.16 | -7,378,322,312.56 |
III. Cash flows from financing activities | ||
Cash received from capital contributions | 118,837,699.32 | |
Cash received from borrowings | 16,889,444,099.91 | 24,900,350,751.32 |
Cash received relating to other financing activities | 10,860,975,443.26 | 9,056,368,411.19 |
Sub-total of cash inflow from financing activities | 27,750,419,543.17 | 34,075,556,861.83 |
Cash repayments of borrowings | 16,265,467,720.00 | 22,139,255,620.15 |
Cash payments for distribution of dividends, profits, or cash payments for interest expenses | 680,133,116.84 | 882,706,689.89 |
Cash payments relating to other financing activities | 11,831,691,300.83 | 10,020,646,445.56 |
Sub-total of cash outflow from financing activities | 28,777,292,137.67 | 33,042,608,755.60 |
Net cash flow from financing activities | -1,026,872,594.50 | 1,032,948,106.23 |
IV. Effect of foreign exchange rate changes on cash and cash equivalents | 4,961,350.31 | 59,283,372.51 |
V. Net Increase in cash and cash equivalents | 4,458,122,611.85 | -1,529,874,609.85 |
Add: Cash and cash equivalents at beginning of year | 1,950,415,593.45 | 3,480,290,203.30 |
VI. Cash and cash equivalents at end of year | 6,408,538,205.30 | 1,950,415,593.45 |
7. Consolidated statement of changes in shareholders' equity
Amount of current period
Unit: RMB
Item | 2023 | ||||||||||||||
Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
Preference shares | Perpetual bonds | Other | |||||||||||||
I. Balance at December 31, 2022 | 3,420,403,200.00 | 10,280,659,251.03 | 2,291,973,146.75 | 122,377,334.36 | 1,446,536,121.51 | 6,081,200.00 | 16,507,798,239.34 | 29,491,882,199.49 | 765,942,754.69 | 30,257,824,954.18 | |||||
Add: Changes in accounting policy | 1,753,356.25 | 1,753,356.25 | 23,573.67 | 1,776,929.92 | |||||||||||
Corrections of errors in previous period | |||||||||||||||
Other | |||||||||||||||
II. Balance at January 1, 2023 | 3,420,403,200.00 | 10,280,659,251.03 | 2,291,973,146.75 | 122,377,334.36 | 1,446,536,121.51 | 6,081,200.00 | 16,509,551,595.59 | 29,493,635,555.74 | 765,966,328.36 | 30,259,601,884.10 | |||||
III. Changes in Current Period ("-" for decrease) | -1,282,286,880.42 | -2,013,442,400.28 | -163,312,274.25 | 1,551,313.67 | 218,530,482.45 | 529,029,953.53 | 1,316,954,995.26 | -48,992,563.70 | 1,267,962,431.56 | ||||||
(I) Total comprehensive income | -163,312,274.25 | 1,088,076,730.88 | 924,764,456.63 | -66,829,724.44 | 857,934,732.19 | ||||||||||
(II) Capital invested and reduced by owners | -1,290,364,092.98 | -2,013,442,400.28 | 723,078,307.30 | 16,911,244.29 | 739,989,551.59 | ||||||||||
1. Common shares invested by owners | 184,101,356.18 | 177,655,190.77 | 6,446,165.41 | 8,649,522.87 | 15,095,688.28 | ||||||||||
2. Capital contributed from other equity instrument holders | |||||||||||||||
3. Amounts of | 172,286,003.87 | 172,286,003.87 | 8,159,660.58 | 180,445,664.45 |
Item | 2023 | ||||||||||||||
Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
Preference shares | Perpetual bonds | Other | |||||||||||||
share-based payments recognized in shareholders' equity | |||||||||||||||
4. Other | -1,646,751,453.03 | -2,191,097,591.05 | 544,346,138.02 | 102,060.84 | 544,448,198.86 | ||||||||||
(III) Profit distribution | 218,530,482.45 | -559,046,777.35 | -340,516,294.90 | -340,516,294.90 | |||||||||||
1. Appropriation of surplus reserve | 218,530,482.45 | -218,530,482.45 | |||||||||||||
2. Appropriation of general risk reserve | |||||||||||||||
3. Dividends to owners or shareholders | -340,516,294.90 | -340,516,294.90 | -340,516,294.90 | ||||||||||||
4. Other | |||||||||||||||
(IV) Internal carry-over of shareholders' equity | |||||||||||||||
1. Capital surplus converted into capital (or share capital) | |||||||||||||||
2. Surplus reserve converted into capital (or share capital) | |||||||||||||||
3. Surplus reserve for making up losses | |||||||||||||||
4. Carry-over |
Item | 2023 | ||||||||||||||
Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
Preference shares | Perpetual bonds | Other | |||||||||||||
undistributed profits from defined benefit plan changes | |||||||||||||||
5. Carry-over undistributed profits from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Specific reserve | 1,551,313.67 | 1,551,313.67 | 1,551,313.67 | ||||||||||||
1. Withdrawal in current period | 7,551,472.89 | 7,551,472.89 | 7,551,472.89 | ||||||||||||
2. Use in current period | -6,000,159.22 | -6,000,159.22 | -6,000,159.22 | ||||||||||||
(VI) Other | 8,077,212.56 | 8,077,212.56 | 925,916.45 | 9,003,129.01 | |||||||||||
IV. Balance at December 31, 2023 | 3,420,403,200.00 | 8,998,372,370.61 | 278,530,746.47 | -40,934,939.89 | 1,551,313.67 | 1,665,066,603.96 | 6,081,200.00 | 17,038,581,549.12 | 30,810,590,551.00 | 716,973,764.66 | 31,527,564,315.66 |
Amount in previous period
Unit: RMB
Item | 2022 | ||||||||||||||
Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
Preference shares | Perpetual bonds | Other | |||||||||||||
I. Balance at December 31, 2021 | 3,416,321,036.00 | 9,478,106,194.30 | 2,291,973,146.75 | -100,146,769.57 | 1,446,536,121.51 | 6,081,200.00 | 15,372,823,358.48 | 27,327,747,993.97 | 603,640,714.30 | 27,931,388,708.27 | |||||
Add: Changes in accounting policy | |||||||||||||||
Corrections of errors in previous period | |||||||||||||||
Other | |||||||||||||||
II. Balance at January 1, 2022 | 3,416,321,036.00 | 9,478,106,194.30 | 2,291,973,146.75 | -100,146,769.57 | 1,446,536,121.51 | 6,081,200.00 | 15,372,823,358.48 | 27,327,747,993.97 | 603,640,714.30 | 27,931,388,708.27 | |||||
III. Changes in Current Period ("-" for decrease) | 4,082,164.00 | 802,553,056.73 | 222,524,103.93 | 1,134,974,880.86 | 2,164,134,205.52 | 162,302,040.39 | 2,326,436,245.91 | ||||||||
(I) Total comprehensive income | 222,524,103.93 | 1,749,181,131.83 | 1,971,705,235.76 | 44,402,187.50 | 2,016,107,423.26 | ||||||||||
(II) Capital invested and reduced by owners | 4,082,164.00 | 858,469,728.22 | 862,551,892.22 | 117,995,183.97 | 980,547,076.19 | ||||||||||
1. Common shares invested by owners | 4,082,164.00 | 209,719,886.13 | 213,802,050.13 | 179,264,458.74 | 393,066,508.87 | ||||||||||
2. Capital contributed from other equity |
instrument holders | |||||||||||||||
3. Amounts of share-based payments recognized in shareholders' equity | 648,749,842.09 | 648,749,842.09 | 10,626,166.45 | 659,376,008.54 | |||||||||||
4. Other | -71,895,441.22 | -71,895,441.22 | |||||||||||||
(III) Profit distribution | -668,411,117.00 | -668,411,117.00 | -668,411,117.00 | ||||||||||||
1. Appropriation of surplus reserve | |||||||||||||||
2. Appropriation of general risk reserve | |||||||||||||||
3. Dividends to owners or shareholders | -668,411,117.00 | -668,411,117.00 | -668,411,117.00 | ||||||||||||
4. Other | |||||||||||||||
(IV) Internal carry-over of shareholders' equity | |||||||||||||||
1. Capital surplus converted into capital (or share capital) | |||||||||||||||
2. Surplus reserve converted into capital (or share capital) | |||||||||||||||
3. Surplus reserve for making up losses | |||||||||||||||
4. Carry-over undistributed profits from |
8. Parent company statement of changes in shareholders' equity
Amount of current period
Unit: RMB
Item | 2023 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
I. Balance at December 31, 2022 | 3,420,403,200.00 | 8,421,030,014.05 | 2,291,973,146.75 | 1,446,533,339.11 | 9,410,101,500.47 | 20,406,094,906.88 | ||||||
Add: Changes in accounting policy | 81,305.74 | 81,305.74 | ||||||||||
Corrections of errors in previous period | ||||||||||||
Other | ||||||||||||
II. Balance at January 1, 2023 | 3,420,403,200.00 | 8,421,030,014.05 | 2,291,973,146.75 | 1,446,533,339.11 | 9,410,182,806.21 | 20,406,176,212.62 | ||||||
III. Changes in Current Period ("-" | -1,511,823,709.67 | -2,013,442,400.28 | -12,650.40 | 218,530,482.45 | 1,626,258,047.17 | 2,346,394,569.83 |
defined benefitplan changes
defined benefit plan changes | |||||||||||||||
5. Carry-over undistributed profits from other comprehensive income | |||||||||||||||
6. Other | |||||||||||||||
(V) Specific reserve | |||||||||||||||
1. Withdrawal in current period | 9,450,078.52 | 9,450,078.52 | 9,450,078.52 | ||||||||||||
2. Use in current period | -9,450,078.52 | -9,450,078.52 | -9,450,078.52 | ||||||||||||
(VI) Other | -55,916,671.49 | 54,204,866.03 | -1,711,805.46 | -95,331.08 | -1,807,136.54 | ||||||||||
IV. Balance at December 31, 2022 | 3,420,403,200.00 | 10,280,659,251.03 | 2,291,973,146.75 | 122,377,334.36 | 1,446,536,121.51 | 6,081,200.00 | 16,507,798,239.34 | 29,491,882,199.49 | 765,942,754.69 | 30,257,824,954.18 |
Item | 2023 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
for decrease) | ||||||||||||
(I) Total comprehensive income | -12,650.40 | 2,185,304,824.52 | 2,185,292,174.12 | |||||||||
(II) Capital invested and reduced by owners | -1,513,757,170.83 | -2,013,442,400.28 | 499,685,229.45 | |||||||||
1. Common shares invested by owners | 177,655,190.77 | -177,655,190.77 | ||||||||||
2. Capital contributed from other equity instrument holders | ||||||||||||
3. Amounts of share-based payments recognized in shareholders' equity | 132,994,282.20 | 132,994,282.20 | ||||||||||
4. Other | -1,646,751,453.03 | -2,191,097,591.05 | 544,346,138.02 | |||||||||
(III) Profit distribution | 218,530,482.45 | -559,046,777.35 | -340,516,294.90 | |||||||||
1. Appropriation of surplus reserve | 218,530,482.45 | -218,530,482.45 | ||||||||||
2. Dividends to owners or shareholders | -340,516,294.90 | -340,516,294.90 | ||||||||||
3. Other | ||||||||||||
(IV) Internal carry-over of shareholders' equity | ||||||||||||
1. Capital surplus converted into capital (or share capital) | ||||||||||||
2. Surplus reserve converted into capital (or share |
Item | 2023 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
capital) | ||||||||||||
3. Surplus reserve for making up losses | ||||||||||||
4. Carry-over undistributed profits from defined benefit plan changes | ||||||||||||
5. Carry-over undistributed profits from other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Specific reserve | ||||||||||||
1. Withdrawal in current period | 4,789,872.64 | 4,789,872.64 | ||||||||||
2. Use in current period | -4,789,872.64 | -4,789,872.64 | ||||||||||
(VI) Other | 1,933,461.16 | 1,933,461.16 | ||||||||||
IV. Balance at December 31, 2023 | 3,420,403,200.00 | 6,909,206,304.38 | 278,530,746.47 | -12,650.40 | 1,665,063,821.56 | 11,036,440,853.38 | 22,752,570,782.45 |
Amount in previous period
Unit: RMB
Item | 2022 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
I. Balance at December 31, 2021 | 3,416,321,036.00 | 7,706,634,091.21 | 2,291,973,146.75 | 1,446,533,339.11 | 10,437,290,148.25 | 20,714,805,467.82 | ||||||
Add: Changes in accounting policy |
Item | 2022 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
Corrections of errors in previous period | ||||||||||||
Other | ||||||||||||
II. Balance at January 1, 2022 | 3,416,321,036.00 | 7,706,634,091.21 | 2,291,973,146.75 | 1,446,533,339.11 | 10,437,290,148.25 | 20,714,805,467.82 | ||||||
III. Changes in Current Period ("-" for decrease) | 4,082,164.00 | 714,395,922.84 | -1,027,188,647.78 | -308,710,560.94 | ||||||||
(I) Total comprehensive income | -358,777,530.78 | -358,777,530.78 | ||||||||||
(II) Capital invested and reduced by owners | 4,082,164.00 | 714,395,922.84 | 718,478,086.84 | |||||||||
1. Common shares invested by owners | 4,082,164.00 | 114,831,273.32 | 118,913,437.32 | |||||||||
2. Capital contributed from other equity instrument holders | ||||||||||||
3. Amounts of share-based payments recognized in shareholders' equity | 599,564,649.52 | 599,564,649.52 | ||||||||||
4. Other | ||||||||||||
(III) Profit distribution | -668,411,117.00 | -668,411,117.00 | ||||||||||
1. |
Item | 2022 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
Appropriation of surplus reserve | ||||||||||||
2. Dividends to owners or shareholders | -668,411,117.00 | -668,411,117.00 | ||||||||||
3. Other | ||||||||||||
(IV) Internal carry-over of shareholders' equity | ||||||||||||
1. Capital surplus converted into capital (or share capital) | ||||||||||||
2. Surplus reserve converted into capital (or share capital) | ||||||||||||
3. Surplus reserve for making up losses | ||||||||||||
4. Carry-over undistributed profits from defined benefit plan changes | ||||||||||||
5. Carry-over undistributed profits from other comprehensive income | ||||||||||||
6. Other | ||||||||||||
(V) Specific reserve |
Item | 2022 | |||||||||||
Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
Preference shares | Perpetual bonds | Other | ||||||||||
1. Withdrawal in current period | 9,450,078.52 | 9,450,078.52 | ||||||||||
2. Use in current period | -9,450,078.52 | -9,450,078.52 | ||||||||||
(VI) Other | ||||||||||||
IV. Balance at December 31, 2022 | 3,420,403,200.00 | 8,421,030,014.05 | 2,291,973,146.75 | 1,446,533,339.11 | 9,410,101,500.47 | 20,406,094,906.88 |
III. Company ProfileGoertek Inc. (hereinafter referred to as ''the Company'' or ''Goertek'') was established on July 27, 2007, through an overall change ofWeiFang IEA Electro-Acoustic Co., Ltd. (hereinafter referred to as "IEA").IEA, the predecessor of the Company, was a joint venture established by law on June 25, 2001. In May 2007, the Company was changedto a domestic enterprise with the approval of the document of Wei Wai Jing Mao Wai Zi (2007) No. 172.Based on the resolution of the 2nd extraordinary general meeting of IEA in 2007, held on June 26, 2007, Weifang YitonggongElectronics Co., Ltd (renamed as "Goertek Group Co., Ltd." in October 2016, hereinafter referred to as "Goertek Group") transferredits 29.40 million shares in IEA to 17 natural persons including Jiang Bin and Jiang Long, Langfang Development Zone YongzhenElectronic Technology Co., Ltd. (hereinafter referred to as "Yongzhen Electronic") and Beijing Yirun Venture Capital Investment Co.,Ltd (hereinafter referred to as "Yirun VCI").On July 18, 2007, Goertek Group, Yongzhen Electronic, Yirun VCI and the 17 persons including Jiang Bin and Jiang Long jointlyentered into an initiator agreement, changing IEA as a whole to Goertek Acoustic Inc. in the form of initiation, in which the auditednet assets of IEA as of June 30, 2007, were taken as the capital contribution upon stock discount at a ratio of approximately 1:0.8As approved by the document of China Securities Regulatory Commission [2008] No. 613, the principal underwriter CITIC SecuritiesCo., Ltd. issued 30 million common shares (A-shares) through offline inquiry and placement in combination with online subscription,pricing, and issue, at the price of RMB 18.78 per share. The raised funds mentioned above were verified by Bandung Certified PublicAccountants Co., Ltd. which issued the capital verification report (Wan Kuai Ye Zi [2008] No. 19). The stocks of the Company werelisted and traded at Shenzhen Stock Exchange on May 22, 2008. The Company changed its registered capital to RMB 120 million andcompleted the registration of industrial and commercial change on July 22, 2008.As reviewed and approved at the Company's annual general meeting of 2008, held on April 17, 2009, the total share capital of theCompany, namely 120 million shares as of December 31, 2008, was taken as the basis to convert capital surplus to share capital. 10bonus shares for every 10 shares were converted to all shareholders, and a total of 120 million bonus shares converted. Thus, the totalshare capital of the Company was changed to 240 million shares. The above change in the registered capital has been verified byBandung Asia Certified Public Accountants Co., Ltd. which has issued the capital verification report (Wan Ya Kuai Ye Zi (2009) No.2427), and the registration of industrial and commercial change was completed on July 20, 2009.As reviewed and approved at the Company's annual general meeting of 2009, held on February 26, 2010, the total share capital of theCompany, namely 240 million shares as of December 31, 2009, was taken as the basis to convert capital surplus to share capital. 5bonus shares for every 10 shares were converted to all shareholders, and a total of 120 million bonus shares were converted. Thus, thetotal share capital of the Company was changed to 360 million shares. The above change in the registered capital has been verified byCrowe Horwath Certified Public Accountants Co., Ltd. which has issued the capital verification report (Hao Hua Yan Zi [2020] No.20). The registration of industrial and commercial change was completed on March 30, 2010.As approved by the China Securities Regulatory Commission in its Reply on Approving Non-public Issuing of Stocks by GoertekAcoustic Inc. (Zheng Jian Xu Ke [2010] No. 1255), on September 29, 2010, the Company had the principal underwriter CITICSecurities Co., Ltd. to issue 15.791275 million (A-shares) to 5 specific entities through private issuing at the price of RMB 33.01 pershare. The net amount of actual raised funds was RMB 506.21998775 million. The raised funds above have been verified by CroweHorwath Certified Public Accountants Co., Ltd. which has issued the capital verification report (Hao Hua Yan Zi [2010] No. 90. TheCompany changed its registered capital to RMB 375.791275 million and completed the registration of industrial and commercialchange on December 13, 2010.As reviewed and approved at the Company's annual general meeting of 2010, held on May 25, 2011, the total share capital of theCompany, namely 375.791275 million shares as of December 31, 2010, was taken as the basis to convert capital surplus to share capital.10 bonus shares for every 10 shares were converted to all shareholders, and a total of 375.791275 million bonus shares were converted.Upon such conversion, the total share capital of the Company was changed to 751.582550 million shares. The above change in theregistered capital has been verified by Crowe Horwath Certified Public Accountants Co., Ltd. which has issued the capital verificationreport (Guo Hao Yan Zi [2011] No. 49), and the registration of industrial and commercial change was completed on June 24, 2011.As approved by the China Securities Regulatory Commission in its Reply on Approving Non-public Issuing of Stocks by GoertekAcoustic Inc. (Zheng Jian Xu Ke [2012] No. 108), GF Securities Co., Ltd. issued 96.434183 million shares (A-shares) in RMB to 10specific entities through private issuing at the price of RMB 24.69 per share, and the net amount of actual raised funds was RMB2,320.77885875 million. The raised funds mentioned above have been verified by Crowe Horwath Certified Public Accountants Co.,Ltd. (Special General Partnership) which has issued the capital verification report (Guo Hao Yan Zi [2012] No. 408A14). The Companychanged its registered capital to RMB 848,016,733 and completed the registration of industrial and commercial change on May 7, 2012.
As reviewed and approved at the Company's annual general meeting of 2012 held on May 9, 2013, the Company's total share capitalof 848,016,733 shares as of December 31, 2012, was taken as the basis for distributing cash dividends of RMB 1.5 (tax inclusive) forevery 10 shares to all the shareholders, with cash dividends of RMB 127,202,509.95 in total. The Company also converted capitalsurplus to share capital, and 8 bonus shares for every 10 shares were converted to all shareholders, with a total of 678,413,386 sharesconverted. Upon such conversion, the total share capital of the Company was changed to 1,526,430,119 shares. The above change inthe registered capital has been verified by Crowe Horwath Certified Public Accountants Co., Ltd. (Special General Partnership) whichhas issued the capital verification report (Guo Hao Yan Zi [2013] No. 408A0001). The registration of industrial and commercial changewas completed on June 19, 2013.On June 2, 2016, Goertek Acoustic Inc. changed its name to Goertek Inc. As the holder of the convertible bonds of the Companyrequested conversion of shares, the registered capital of the Company was changed to RMB 1,526,581,348. The scope of business waschanged to development, manufacturing and sales of: Acoustic, optical and wireless communication technologies and related products,robots and automation equipment, intelligent electromechanical and information products, precision molds for electronic products,precision hardware, semiconductor products and MEMS products, consumer electronics, LED package and relevant applicationproducts; development and sales of the software related to the above products; services related to the above technologies and products;import and export of goods and technologies (excluding radio transmission and satellite receiving equipment, and excluding the itemsprohibited by the national laws and regulations). (For the items requiring approval by law, business activities may only be conductedin respect thereof upon approval of relevant departments)As reviewed and approved at the Company's annual general meeting of 2016, held on April 14, 2017, the Company's total share capitalof 1,538,642,707 shares as of April 27, 2017, on which the profit distribution equity of the Company was registered, was taken as thebasis for the distribution of cash dividends RMB 1.5 (tax inclusive) for every 10 shares to all the shareholders, with a total of RMB230,796,406.05 distributed. The Company also converted capital surplus to share capital, and 10 bonus shares per every 10 shares wereconverted to all shareholders.According to the Proposal on Redemption of ''Goertek Convertible Bonds'' reviewed and approved at the 8th meeting of the 4th Boardof Directors held by the Company on May 23, 2017, it was resolved to exercise the conditional redemption right of ''Goertek ConvertibleBonds'' to redeem all the unconverted ''Goertek Convertible Bonds'' at the price of the par value of the bonds plus the accrued interestfor the corresponding period. ''Goertek Convertible Bonds'' was no longer traded and converted from June 30, 2017. After the abovechange, the Company changed its registered capital to RMB 3,245,103,948, and completed the registration of industrial and commercialchange on November 3, 2017.According to the Proposal on Early Redemption of ''Goertek Convertible Bonds No. 2'' reviewed and approved at the 13th meeting ofthe 5th Board of Directors and the 11th meeting of the 5th Supervisory Board held by the Company on January 15, 2021, it was resolvedto exercise the conditional redemption right of ''Goertek Convertible Bonds No. 2'' to redeem all the ''Goertek Convertible Bonds No.2'', at the price of the par value of the bonds plus the accrued interest. As of March 3, 2021, ''Goertek Convertible Bonds No. 2'' wasno longer traded and converted. After the above change, the Company changed its registered capital to RMB 3,416,321,036, andcompleted the registration of industrial and commercial change on June 22, 2021.The Company's initial grant of certain stock options under the 2021 Stock Option Incentive Plan entered its first exercise period onJune 24, 2022. Due to employees' exercise of the right, the Company issued 4,082,164 A-shares to the incentive targets. The sharecapital of the Company has been changed to RMB 3,420,403,200.The registered address of the Company headquarters: 268 Dongfang Road, Weifang Hi-Tech Industrial Development Zone.The main businesses of the Company and its subsidiaries (collectively referred to as the "Group") include precision componentsbusiness, smart audio device business and smart hardware business which are categorized into the industry of the manufacturing ofcomputers, communication, and other electronic equipment. The Company operates mainly in consumer electronics, automotiveelectronics and other industries, with the main products including acoustics, optics, microelectronics, structural components and otherprecision components, as well as smart hardware products such as virtual reality (VR)/mixed reality (MR)/augmented reality (AR)products, TWS smart earphones, smart wearable devices, gaming console and accessories, and smart home products.These financial statements have been approved by the Board of Directors of the Company on March 27, 2024.As of December 31, 2023, the Group has included a total of 68 subsidiaries into its scope of consolidation, and for details, please referto Note X "Equity in Other Entities". In terms of consolidated scope, the Group gained 12 subsidiaries and disposed of 1 subsidiary inthe current period compared with the previous year. For details, please refer to Note IX "Changes in the Scope of Consolidation"..
IV. Basis for Preparing the Financial Statement
1. Basis for the preparation
The Group has prepared the financial statements on a going concern basis, based on the actual transactions and matters in accordancewith The Accounting Standards for Business Enterprises - Basic Standards (issued by Order No. 33 of the Ministry of Finance andamended by Order No. 76 of the Ministry of Finance) issued by the Ministry of Finance, 42 specific accounting standards, applicationguidelines of accounting standards for business enterprises, explanations on the accounting standards for business enterprises and otherrelated regulations (hereinafter collectively referred to as "Accounting Standards for Business Enterprises") issued and amended on orafter 15 February 2006, and Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 -General Provisions on Financial Reports (2023 Revision) issued by CSRC.According to relevant provisions in the Accounting Standards for Business Enterprises, the Group's accounting is based on the accrualbasis. These financial statements are prepared on the basis of historical cost, except for certain financial instruments. In case of assetimpairment, the appropriate impairment provision shall be accrued according to relevant regulations.
2. Continue as a going concern
The Company evaluated its ability to continue as a going concern for 12 months after the end of the current reporting period, withoutmatters or circumstances causing significant doubt over the ability to continue as a going concern. Therefore, these financial statementswere prepared on a going concern basis.V. Significant Accounting Policies and Accounting EstimatesNotes to specific accounting policies and accounting estimates:
The Group has formulated several specific accounting policies and accounting estimates in respect of the revenue recognition, researchand development costs, and other transactions and matters, according to the provisions of relevant Accounting Standards for BusinessEnterprises on the basis of the actual production and operation characteristics. For details, please refer to the descriptions in 32."Revenue" and 25 "intangible assets (2)" of Note V. For explanation on the major accounting judgments and estimates made by themanagement, please refer to 38. "Other important accounting policies and accounting estimates" of Note V.
1. Statement of compliance with Accounting Standards for Business EnterprisesThe financial statements have been prepared by the Group in compliance with the requirements of the Accounting Standards forBusiness Enterprises, and give a true and complete view of the financial status of the Company and the Group as at December 31, 2023,as well as the business performance, and cash flows and other relevant information for the year 2023. In addition, the financialstatements of the Company and the Group comply in all material aspects with the requirements concerning disclosure of the financialstatements and the notes specified in Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 - General Provisions on Financial Reports (2023 Revision) by CSRC.
2. Accounting period
The accounting period of the Group is divided by annual accounting period and interim accounting period. Interim accounting periodmeans a reporting period that is shorter than a complete accounting year. The Company adopts the calendar year as its accounting year,namely January 1 to December 31 of each year.
3. Business cycle
The normal business cycle means the period from the Group's purchase of the assets for processing to realization of cash or cashequivalents. The Group takes 12 months as a business cycle and adopts the business cycle as liquidity classification standard for assetsand liabilities.
4. Functional currency
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries are operated, and theCompany and its domestic subsidiaries take RMB as the functional currency. Goertek (HongKong) Co., Limited, Goertek Technology(Hong Kong) Co., Limited, Goertek Microelectronics (Hong Kong) Co., Ltd., Optimas Capital Partners Fund LP, and Goertek
Microelectronics Holdings Co., Ltd. use USD as their functional currency, and all other overseas subsidiaries of the Company take thelawful currency of the country or region where their registered addresses are located as their functional currency. The currency adoptedby the Group in preparing these financial statements is RMB.
5. Determination method and selection basis of materiality criteria
? Applicable ? Not applicable
Item | Materiality criteria |
Significant provision for bad debts on an individual basis | The amount of provision for bad debts on an individual basis accounts for more than 10% of the total amount of bad debt provisions for receivables and is more than RMB 10 million |
Significant prepayments with an aging of more than one year |
Prepayments with an aging of more than one year account for more than 10%of the total prepayments and the amount is more than RMB 10 million
Significant construction in progress | Individual budget greater than RMB 100 million and accumulated carrying amount greater than RMB 50 million |
Significant goodwill | The individual amount accounts for more than 10% of the total goodwill and is greater than RMB 100 million |
Significant accounts payable aged over one year | Accounts payable with an aging of more than one year account for more than 10% of the total accounts payable and the amount is more than RMB 10 million |
Significant contract liabilities aged over one year | Contract liabilities with an aging of more than one year account for more than 10% of the total contract liabilities and the amount is more than RMB 10 million |
Significant other payables aged over one year | Other payables with an aging of more than one year account for more than 10% of the total other payables and the amount is more than RMB 10 million |
Significant investment activities | An individual investment activity accounts for more than 10% of the total cash inflow or outflow related to the investment activity received or paid, and the amount is more than RMB 500 million |
Significant capitalized R&D projects | The balance of an individual capitalized R&D project accounts for 10% of the total development expenditure and is greater than RMB 50 million |
Significant non-wholly-owned subsidiaries | The total assets or revenue of a non-wholly-owned subsidiary accounts for more than 10% of those of the Group |
Significant joint ventures and associated enterprises | The value of an individual investment accounts for more than 2% of the total assets of the Group and the amount is more than RMB 500 million |
6. Accounting treatments for business combination of enterprises under and not under common controlBusiness combination means the transaction or matter in which two or more separate enterprises are combined into one reporting entity.Business combination is divided into business combination of enterprises under common control and business combination ofenterprises not under common control.
(1) Business combination involving enterprises under common control
Business combination involving enterprises under common control is the combination in which enterprises combined are controlledby the same party or parties before and after the combination, and such control is not temporary. In the business combination ofenterprises under common control, the party which acquires the control of other enterprises in the business combination is the acquirerand the other enterprises in the business combination are the combined parties. Business combination date is the date on which theacquirer actually acquires the control of the acquirees.The assets and liabilities acquired by the acquirer are measured on the basis of book value of acquirees on business combination date.The difference between the book value of the net assets acquired by the acquirer and the book value of the consideration paid for thecombination (or total par value of the shares issued) is adjusted to capital surplus (share capital premiums). Adjustments shall be madeto undistributed profits in the event that the capital surplus (share capital premiums) are not sufficient for write-down.Any direct costs incurred by the acquirer as a result of the business combination are recognized in the profit or loss for current periodwhen incurred.
(2) Business combination of enterprises not under common control
Business combination of enterprises not under common control is the combination in which the enterprises combined are not controlledby the same party or parties before and after the business combination. In the business combination of enterprises not under commoncontrol, the party which acquires the control of other enterprises in the business combination on the acquisition date is the acquirer andthe other enterprises in the business combination are the acquired parties. Acquisition date is the date on which the acquiring partyactually acquires the control of the acquired parties.In the business combination of enterprises not under common control, the cost of combination includes the fair value of assets paid,liabilities incurred or assumed and equity securities issued by the acquiring party in exchange for the control of the acquired parties onthe acquisition date, the audit, legal service, assessment, consulting and other intermediate fees incurred for business combination ofenterprises, and other management fees, which are recognized in the profit or loss for the current period when incurred. The costs ofthe acquiring party for issuing equity or debt securities as part of the business consideration for the business combination are includedin the initially recognized amount of these equity or debt securities. The contingent business consideration shall be included in thecombination cost at its fair value on the acquisition date, and the goodwill shall be adjusted and combined accordingly if the contingentconsideration needs to be adjusted when new or further evidences arise in connection with the circumstances existing on the acquisitiondate within 12 months after the acquisition date. The acquisition cost incurred by the acquiring party and the identifiable net assetsacquired in the business combination shall be measured at the fair value on the acquisition date. If the combination cost is higher thanthe fair value of the identifiable net assets acquired from the acquired parties on the acquisition date, the difference thereof shall berecognized as the goodwill. If the combination cost is lower than the fair value of the identifiable net assets acquired from the acquiredparties in the business combination, the fair value of the identifiable assets, liabilities and contingent liabilities as well as themeasurement of the combination cost shall be first reviewed. If upon review, the combination cost is still lower than the fair value ofthe identifiable net assets acquired from the acquired parties in the business combination, such difference shall be recognized in theprofit or loss for current period.If the deductible temporary difference acquired by the acquiring party from the acquired parties is not recognized for failure to meetthe conditions for recognition of the deferred tax assets on the acquisition date, and if new or further information is obtained within 12months after the acquisition date, showing that relevant circumstances on the acquisition date have already existed and it is expectedthat the economic benefits brought about by the deductible temporary difference of the acquiring party on the acquisition date may berealized, relevant deferred tax assets shall be recognized and the goodwill shall be reduced. If the goodwill is insufficient for write-down, the difference will be recognized in the profit or loss for current period. In addition to the above condition, the deferred taxassets recognized in connection with the combination of enterprises shall be recognized in the profit or loss for current period.If the business combination of enterprises not under common control is realized step by step through multiple transactions, whethersuch transactions fall within a "package deal" shall be judged according to the standards for judgment of "package deal" in the Noticeby the Ministry of Finance of Issuing the Interpretation No. 5 of the Accounting Standards for Business Enterprises (Finance andAccounting [2012] No. 19) and Article 51 of the Accounting Standards for Business Enterprises No. 33 - Consolidated FinancialStatements (see 7(2) of Note V). If they fall within "package deal", see the description in the previous paragraphs of this part and "19.Long-term equity investments" of Note V for accounting treatment. If they do not fall within "package deal", relevant accountingtreatment shall be distinguished for individual financial statements and consolidated financial statements:
In the individual financial statements, the sum of the book value of the equity investment of the acquired parties held before theacquisition date and the increased investment cost on the acquisition date shall be taken as the initial investment cost of such investment.If other comprehensive income is involved in the equity of the acquired parties held before the acquisition date, the accounting treatmentof other comprehensive income while disposing such investment, shall be conducted on the same basis as the direct disposal of relatedassets or liabilities by the acquired parties.In the consolidated financial statements, the equity of the acquired parties held before the acquisition date shall be remeasured at thefair value of such equity on the acquisition date, and the difference between the fair value and its book value shall be recognized ininvestment income in current period. If other comprehensive income is involved in the equity of the acquired parties held before theacquisition date, the accounting treatment of other comprehensive income related, shall be conducted on the same basis as the directdisposal of related assets or liabilities by the acquired parties.
7. Judgment criteria for control and method for preparing the consolidated financial statements
(1) Principles for determination of the scope of consolidated financial statements
The scope of the consolidation of consolidated financial statements shall be determined on the basis of control. Control means that theGroup enjoys variable returns through its power in the invested parties and its participation in relevant activities of the invested parties,and is able to influence the amount of such returns by applying its power in the invested parties. The Company and all its subsidiariesare included in the scope of consolidation. Subsidiary means the entity controlled by the Group.
The Group shall launch re-assessment, if the changes in relevant facts and circumstances that lead to changes in relevant elements ofthe above control definition occur.
(2) Method for preparing the consolidated financial statements
The Company shall include the subsidiaries into the scope of consolidation from the date when it obtains the net assets and actualcontrol over the production and operation decisions of the subsidiaries. It shall cease to do so as of the date when the actual control islost. For the disposal subsidiaries, the business performance and cash flows prior to the disposal date have been appropriately includedin the consolidated income statement and consolidated statement of cash flows. The opening balance of the consolidated balance sheetsshall not be adjusted for the subsidiaries disposed in current period. For the subsidiaries added through the combination of enterprisesnot under common control, the business performance and cash flows have been appropriately included in the consolidated incomestatement and consolidated cash flow statement after acquisition date. The opening balance and comparative figures of consolidatedfinancial statements shall not be adjusted. For the subsidiaries added during combination of enterprises under common control and thesubsidiaries under absorption combination, the business performance and cash flows, from the beginning of current period toacquisation date, have been appropriately included in consolidated income statement and consolidated cash flow statement. Thecomparison figures in the consolidated financial statements shall be adjusted at the same time.In preparing the consolidated financial statements, if the accounting policies or accounting periods of the subsidiaries are different fromthose of the Company, the financial statements of the subsidiaries shall be adjusted based on the accounting policies and accountingperiods of the Company. The individual financial statements of the subsidiaries acquired from combination of enterprises not undercommon control are adjusted based on the fair value of the identifiable net assets on the acquisition date.All the material account balances, transactions and unrealized profits within the Group shall be offset during preparation of theconsolidated financial statements.The shareholders' equity and current net gains or losses of the subsidiaries which are not owned by the Company shall be separatelylisted under the shareholders' equity and net profit in the consolidated financial statements as minority interest and minority interests.These current gains or losses of the subsidiaries which are attributable to the minority interest shall be presented as "minority interests"under the net profit of the consolidated financial statements. If the losses of the subsidiaries attributed to the minority shareholders aremore than the shareholders' equity owned by the minority shareholders in such subsidiaries at the beginning of the period, the minorityinterests shall be offset.If the control of the previous subsidiaries is lost due to disposal of some equity investments or for any other reasons, the remainingequity shall be re-measured at fair value on the date when control is lost. The difference between the sum of consideration receivedfrom disposal of equity and the fair value of the remaining equity, and the Company's share of the previous subsidiaries' net assetscalculated at the previous shareholding proportion from the acquisition date, shall be recognized in investment income in the periodwhen control is lost. Other comprehensive income related to the equity investment of the previous subsidiaries shall be conducted onthe same basis as the direct disposal of related assets or liabilities by the acquired parties when the control is lost (Except for the changecaused by the re-measurement of net liabilities or net assets of the defined benefit plan in the previous subsidiary, the remaining partshall be converted into investment income for current period). Thereafter, such remaining equity shall be subject to subsequentmeasurement according to the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investments or AccountingStandards for Business Enterprises No. 22 - Confirmation and Measurement of Financial Instruments and other relevant regulations.For details, please refer to "19. Long-term equity investments" of Note V or "11. Financial instruments" of Note V.If the Group disposes of the equity investment of the subsidiaries step by step through multiple transactions until it loses the controlthereof, it is necessary to determine whether such transactions fall within "a package deal". The multiple transactions shall be taken as"package deal" for accounting treatment, if the terms, conditions and economic impacts of the transactions undertaken to dispose theequity investment of the subsidiaries meet one or more of the following conditions: ① these transactions are entered into at the sametime or with their impacts on each other considered; ② a complete business result may be achieved only when these transactions whentaken as a whole; ③ one transaction depends on at least one of the other transactions; ④ one transaction is not economical on its own,but it is economical when considered together with other transactions. If they do not fall within "package deal", each of them shall besubject to accounting treatment according to the principles applicable to ''Partial disposal of the long-term equity investments in thesubsidiaries without losing control'' (for details, please refer to (2) ④ of 19 of Note V) and ''Loss of control of the previous subsidiariesdue to disposal of some equity investments or for any other reasons'', as appropriate. If the transactions taken to dispose of the equityinvestment in the subsidiaries until loss of control are recognized as "package deal", these transactions shall be subject to accountingtreatment as one transaction in which the subsidiaries are disposed and the control is lost. However, the difference between the pricefor each disposal before the control is lost and share of such subsidiaries' net assets as a result of disposal of investment, shall berecognized in other comprehensive income in the consolidated financial statements, and be included in profit or loss for the periodwhen the control is lost.
8. Classification of joint venture arrangement and accounting treatment methods for joint operationNone
9. Criteria for determining cash and cash equivalents
Cash and cash equivalents of the Group include cash on hand, deposits available at any time for payment, and short-term (generallydue within three months from the date of purchase) and highly liquid investments which are readily convertible into known amountsof cash and subject to an insignificant risk of changes in value.
10. Foreign currency business and foreign currency statement translation
(1) Conversion method of foreign currency transaction
A foreign currency transaction of the Group is translated into the functional currency at initial recognition, using the spot exchangerate prevailing at the date of the transaction (it means, in most cases, the central parity of the foreign exchange rate announced by thePeople's Bank of China on that day; the same hereinafter). However, a foreign currency exchange transaction or other foreign currencyexchange involved transaction of the Group is translated into the functional currency using the actual exchange rate.
(2) Translation method of monetary items denominated in foreign currencies and non-monetary items denominated in foreigncurrenciesThe foreign currency monetary items on the balance sheet date are translated at the spot exchange rate on the balance sheet date, andthe exchange differences arising therefrom are included in the current gains and losses, except for the exchange difference of theprincipal and interest of foreign currency special loans related to the acquisition and construction of assets eligible for capitalization.Non-monetary items denominated in foreign currency that are measured at historical cost shall still be valued in the functional currencyand converted at the spot exchange rate as of the transaction date. Non-monetary items denominated in foreign currency that aremeasured at fair value are converted by using the exchange rate at the date when fair value is determined and the difference betweenthe converted functional currency amount and the prior amount in functional currency is recorded as profit or loss arising from a changein fair value (including exchange rate change) for the current period or other comprehensive income.
(3) Translation method of foreign currency financial statements
The foreign currency financial statements of overseas operations shall be converted into Chinese currency statements in accordancewith the following methods: The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balancesheet date; except for "undistributed profits", other items of shareholder's equity are converted at the spot exchange rate at the time ofoccurrence. Revenues and expenses in the profit statement are translated using the average exchange rates prevailing in the period ofthe transactions. Undistributed profits in the beginning of the year are the undistributed profits at the end of the prior year as translated;undistributed profits at the end of the period are calculated and presented according to the translated profit distributions; exchangedifferences from translation between translated assets and translated liabilities and equities are recognized in other comprehensiveincome as exchange differences from translation. When the Group disposes of, and loses the control over, an overseas operation,exchange differences from translation which are presented in "equity" of the balance sheet and related to the overseas operation are,all or based on the disposal proportion, transferred to the profit or loss of the period of disposal.Cash flows denominated in foreign currencies and cash flows of overseas subsidiaries are translated using the average exchange ratesprevailing in the period of the cash flows. Any impact of exchange rate changes on cash is presented as a separate adjusting item in thecash flow statement.The amount in the beginning of the year and the actual amount of the prior year are presented as translated amounts based on the prioryear's financial statements.When all the equities of the Group in an overseas operation are disposed, or the control over an overseas operation is lost for a disposalof partial equity investments or any other reason, exchange differences which are presented in "shareholder's equity/owner's equity" ofthe balance sheet, related to the overseas operation and attributable to the parent company are all transferred to the profit or loss of theperiod of disposal.If the proportion of equities in an overseas operation declines (but the control over that overseas operation is not lost) for a disposal ofpartial equity investments or any other reason, exchange differences which are related to that partial disposal are attributed to minorityinterest and not transferred to the profit or loss of the period of disposal. When the disposal of overseas operation involves a part of theequities in an associate or joint venture, exchange differences from translation which are related to the overseas operation are, basedon the disposal proportion, transferred to the profit or loss of the period of disposal.
For any monetary item denominated in a foreign currency which is substantially net investment in an overseas operation, in theconsolidated financial statements, exchange differences from the exchange rate changes are recognized in other comprehensive incomeas "exchange differences from translation", and when the overseas operation is disposed, are transferred to the profit or loss of theperiod of disposal.
11. Financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party to a financial instrument contract.
(1) Classification, recognition and measurement of financial assets
Pursuant to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, financialassets are classified by the Group into financial assets at amortized cost, financial assets at fair value through other comprehensiveincome, and financial assets at fair value through profit and loss.Financial assets, when initially recognized, shall be measured at fair value. For the financial assets measured at fair value through profitand loss, the related transaction costs shall be included directly into current gains and losses. For the financial assets or financialliabilities of other categories, the related transaction costs shall be included in the initially recognized amount. For the accountsreceivable or notes receivable arising from the sale of products or the provision of labor services, which do not include or considermajor financing components, the amount of consideration that the Group is expected to be entitled to is taken as the initially recognizedamount.
① Financial assets measured at amortized cost
The Group's business model for managing financial assets is aimed to collect contractual cash flow, and the contractual cash flowcharacteristics of such financial assets are consistent with the basic lending arrangement, i.e., the cash flow generated on a specific dateis only the payment of principal and interest based on the amount of outstanding principal. For such financial assets, the Group shallperform subsequent measurements at the amortized cost by effective interest method. The gains or losses arising from amortization orimpairment shall be included in current gains and losses.
② Financial assets at fair value through other comprehensive income
The Group's business model for managing this type of financial assets aims both to collect the contractual cash flow and to sell it, andthe characteristics of contractual cash flow of this type of financial assets shall be consistent with the basic lending arrangement. TheGroup measures these financial assets at fair value and the changes thereof shall be included in other comprehensive income, but theimpairment losses or gains, exchange gains and losses and interest income calculated by the effective interest method shall be includedin current gains and losses.Apart from that, the Group shall designate some investments in non-trading equity instruments as financial assets measured at fairvalue and the changes thereof shall be included in other comprehensive income. The Group will include the relevant dividend incomeof this type of financial assets into current gains and losses, and the changes in fair value into other comprehensive income. Upon thetermination of recognition of financial assets, the accumulated gains or losses previously included in other comprehensive income shallbe transferred out of other comprehensive income and transferred to the undistributed profits, other than being included in current gainsand losses.
③ Financial assets at fair value through profit or loss
The financial assets except those classified into financial assets measured at amortized cost and financial assets at fair value throughother comprehensive income as mentioned above, are classified by the Group into those measured at fair value through profit and loss.In addition, at initial recognition, part of the financial assets can be recognized by the Group as financial assets measured at fair valuethrough profit and loss, to eliminate or significantly reduce accounting mismatch. The financial assets are subsequently measured bythe Group at fair value, and changes in fair value are included in current gains and losses.
(2) Classification, recognition and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities at fair value through profit and loss, and other financialliabilities. For the financial liabilities at fair value through profit and loss, the related transaction costs shall be included directly incurrent gains and losses. For other financial liabilities, the related transaction costs shall be included in the initially recognized amount.
① Financial liabilities at fair value through profit and loss
The financial liabilities at fair value through profit and loss shall include financial liabilities held for trading (including derivativesfalling into the category of financial liabilities) and financial liabilities designated as those measured at fair value through profit or lossat initial recognition.
Financial liabilities held for trading (including derivatives falling into the category of financial liabilities) shall be subsequentlymeasured at fair value. Except for hedging accounting, changes in fair value shall be included in current gains and losses.The amount of change in the fair value of a financial liability which is designated as those measured at fair value through profit or lossdue to change in the Group's own credit risks shall be included in other comprehensive income. Upon the termination of recognitionof such liability, the accumulative change in its fair value caused by the change of its own credit risk included in other comprehensiveincome is transferred to undistributed profits. The changes in its fair value shall be recorded in current gains and losses. If the treatmentof the impact on the credit risk change of the financial liabilities in the above manner will cause or expand the accounting mismatch inthe profit and loss, the Group will recognize all the gains or losses (including the changes in the Group's own credit risks) of thefinancial liabilities into current gains and losses.
② Other financial liabilities
Other financial liabilities except those caused by the transfer of financial assets that do not conform to the conditions for derecognitionor continue to relate to the transferred financial assets and financial guarantee contracts shall be classified as financial liabilitiesmeasured at amortized cost, which shall be subsequently measured at amortized cost, and the gains or losses arising from derecognitionor amortization shall be included in current gains and losses.
(3) Principle of recognition and measurement method of financial asset transfer
The financial asset shall be de-recognized if: ① The contractual right to receive cash flows of the financial asset is terminated; ②Thefinancial asset has been transferred and almost all risks and rewards in the ownership of the financial asset have been transferred to thetransferee; or ③ The financial asset has been transferred and the enterprise has neither transferred nor retained almost all risks andrewards in the ownership of the financial asset, but has waived its control over the financial asset.If the enterprise does not transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset and ifthe enterprise does not waive its control over the financial asset, it shall, according to the extent of its continuous involvement in thetransferred financial asset, recognize the relevant financial asset and recognize the relevant liabilities accordingly. The extent ofinvolvement in the financial asset transferred, refers to the company's exposure to changes in the value of the financial assets.If the overall transfer of a financial asset meets the conditions for de-recognition, the difference between the book value of thetransferred financial asset and the sum of the transfer consideration received and the change in fair value originally recognized in othercomprehensive income will be recognized in current gains and losses.If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferred financial assets isapportioned between the derecognized part and the non-derecognized part according to their respective relative fair values, and thedifference between the sum of the transfer consideration received and the change in fair value originally recognized in othercomprehensive income and apportioned to the de-recognition component and the aforesaid attributed book value will be recognized incurrent gains and losses.If a financial asset is sold with the right of recourse or an endorsement, the Group needs to determine whether almost all the risks andrewards related to the ownership of the financial asset have been transferred. If all the risks and rewards related to the ownership of thefinancial asset have been transferred to the transferee, the Group shall de-recognize the financial asset; If all the risks and rewardsrelated to the ownership of the financial asset have been retained, the Group shall not de-recognize the financial asset. If none of therisks and rewards related to the ownership of the financial asset has been transferred or retained, the Group shall continue to determinewhether it retains the control over the asset, and the accounting standard stated in the aforesaid paragraphs shall apply.
(4) Derecognition of financial liabilities
When the current obligations of a financial liability (or part of it) have been discharged, the financial liability (or that part of thefinancial liability) shall be de-recognized by the Group accordingly. When the Group (borrower) signs an agreement with a lender toreplace a financial liability with a new one, in case of substantially different terms of contract between the new one and the originalone, the Group shall derecognize the original one and recognize the new one. If a substantial modification is made to all (or part of)the original financial liabilities by the Group, the original financial liabilities shall be de-recognized, and at the same time, a newfinancial liability shall be recognized in accordance with the modified terms.If all (or a part of) the financial liability is de-recognized, the difference between the book value allocated to the derecognized part andthe consideration paid (including the transferred non-cash assets or the liabilities assumed) is included in current gains and losses bythe Group.
(5) Offset of financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financial liabilities, which is enforceable for the timebeing, and the Group plans to settle on a netting basis or capitalize financial assets and serve financial liabilities, any net amount from
netting of financial assets and financial liabilities shall be included in the balance sheet. Otherwise financial assets and financialliabilities shall be included separately in the balance sheet and shall not offset each other.
(6) Method of determining the fair value of financial assets and financial liabilities
Fair value refers to the price that market participants can receive by selling an asset or need to pay by transferring a liability in theorderly transactions on the measurement date. The fair value of a financial instrument in an active market is determined by the Groupat the price quoted in the active market. The quotation in an active market refers to the price that is easily acquired from exchanges,brokers, industry associations, pricing service agencies, and the like on a regular basis and represents the actual market transactions infair trade. If there is no financial instrument in an active market, its fair value shall be determined by the Group via valuation techniques.Valuation techniques include looking into the prices used in recent market transactions by parties who refer to familiar situations andtrade voluntarily and the current fair value of other financial instruments which are essentially the same, as well as using the discountedcash flow method, the option pricing model and the like. During valuation, the Group shall adopt the valuation techniques applicableunder the current circumstances and supported by sufficient available data and other information, select the input values consistentwith the characteristics of assets or liabilities considered by market participants in the transactions of related assets or liabilities, andgive priority to the relevant observable input values as much as possible. The unobservable input values are used only when the relevantinput values are unavailable or impracticable.
(7) Equity instruments
An equity instrument is a contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. TheGroup's issuance (including refinancing), repurchase, sales or cancellation of an equity instrument shall be accounted for as a changeto equity. Transaction costs of an equity transaction are accounted for as a deduction from equity. The Group does not recognizechanges in the fair value of equity instruments.If the Group's equity instruments distribute dividends (covering "interest" incurred by instruments classified as equity instruments)during the existence thereof, the dividends shall be treated as profit distribution.
12. Impairment of financial assets
The financial assets for which the Group needs to recognize the impairment losses are financial assets measured at amortized cost,which mainly include notes receivable, accounts receivable, other receivables, contract assets, and so on.
(1) Method for recognizing provision for impairment
Based on the expected credit loss, the Group shall make provision for impairment of the aforementioned items by its applicablemeasurement method (general method or simplified method) of expected credit loss and recognize the credit impairment losses.Credit loss means the difference between all contractual cash flows receivable by the Group in accordance with the contract and allcash flows expected to be received, discounted at the original actual interest rate, i.e., the present value of all cash shortages. Purchasedor originated credit-impaired financial assets shall be discounted by the Group according to credit-adjusted effective interest rateadjusted by credit of such financial assets.According to the general methods to measure expected credit losses, the Group evaluates whether the credit risk of the financial assets(including other applicable items; the same hereinafter) has increased significantly since the initial recognition at each balance sheetdate. If the credit risk of the financial instrument has increased significantly since the initial recognition, the Group measures its lossallowance according to the amount equivalent to the expected credit loss of the financial instrument over its expected lifetime; if thecredit risk has not increased significantly since initial recognition, the Group measures its loss allowance according to the amountequivalent to the expected credit loss of the financial instrument in the next 12 months. When assessing expected credit loss, the Groupgives consideration to all reasonable and well-founded information, including forward-looking information.For financial instruments with relatively low credit risks on the balance sheet date, the Group assumes that their credit risks have notincreased significantly since initial recognition, and measures loss allowance based on the expected credit loss within the next 12months.
(2) Criteria for judging whether the credit risks have increased significantly since initial recognitionWhen the default probability of a financial asset within the expected duration determined on the balance sheet date is significantlyhigher than that in initial recognition, it suggests that the credit risks of the financial asset have significantly increased. Except underspecial circumstances, the Group determines whether credit risks have increased significantly since initial recognition by estimatingthe changes in lifetime risk of default occurring based on the changes in 12-month risk of default occurring as a reasonable.
(3) Grouping method for assessing the expected credit risks
The Group carries out separate credit risk evaluation for financial assets with significantly different credit risks, including receivablesin dispute with the other party or involving litigation or arbitration; accounts receivable where there are obvious signs that the debtormay not be able to fulfill the repayment obligation, etc.Except for the financial assets that are individually assessed for credit risks, the Group shall classify the financial assets into differentgroups in view of the common risk characteristics, and assess the credit risks on the basis of groups.
(4) Accounting treatment methods for impairment of financial assets
At the end of a period, the Group shall calculate the expected credit loss of all types of financial assets. If the expected credit loss isgreater than the book value of its current provision for impairment, the difference shall be recognized as impairment loss; if it is lessthan the book value of current provision for impairment, the difference shall be recognized as impairment gain.
(5) Determination method for measurement of expected credit losses of various financial assets
①Notes receivable
For note receivable, the Group measures loss allowance according to the amount equivalent to the expected credit loss over the lifetime.Depending on their credit risk characteristics, notes receivable are classified into different groups:
Item | Basis for determining groups |
Bank acceptance notes | The acceptor is a bank with low credit risk |
Commercial acceptance notes | By acceptor's credit risk (the same as that of accounts receivable) |
②Accounts receivable
For accounts receivable not containing significant financing components, the Group measures loss allowance according to the amountequivalent to the expected credit loss over the lifetime.Except for accounts receivable for which credit risk is assessed separately, depending on their credit risk characteristics, accountsreceivable is classified into different groups:
Item | Basis for determining groups |
Accounts receivable aging group | Except for the receivables for which the loss allowance of impairment has been calculated separately, the Group shall determine, through present situation analysis, the proportion of allowance for bad debt based on the expected credit loss rate of identical or similar receivables in previous years with similar credit risk characteristics classified by aging |
Related party group | The parent and subsidiary companies included in the consolidated financial statements are divided into groups according to equity relationship. |
③Other receivables and factoring receivables
The Group measures impairment losses based on whether the credit risk of other receivables and factoring receivables has increasedsignificantly since initial recognition, using an amount equivalent to expected credit loss within the next 12 months or entire duration.
④Financing receivables
Financing receivables are primarily classified as notes receivable and accounts receivable which are measured at fair value throughother comprehensive income and are presented under "financing receivables" if they have original maturity of up to one year (includingone year) or under other debt investments if they have original maturity more than one year as from the initial recognition date.Based on their credit risk characteristics, financing receivables are classified into different groups:
Item | Basis for determining groups |
Bank acceptance notes | The acceptor is a bank with low credit risk |
Commercial acceptance notes | Classified by the acceptor's credit risk, the same as that of the "Accounts receivable" group |
Accounts receivable | Same as that of the "Accounts Receivable" group |
13. Notes receivable
For further details, please see this Note V. 11. "Financial Instruments" and 12. "Impairment of Financial Assets".
14. Accounts receivable
For further details, please see this Note V. 11. "Financial Instruments" and 12. "Impairment of Financial Assets".
15. Financing receivables
For further details, please see this Note V. 11. "Financial Instruments" and 12. "Impairment of Financial Assets".
16. Other receivables
For further details, please see this Note V. 11. "Financial Instruments" and 12. "Impairment of Financial Assets".
17. Contract assets
The Group records the right where the client has not paid the contract consideration but the Group has performed its contract obligationand the Group is not prevented from being unconditionally paid by the client (depending on the lapse of time only) as contract assetsin the balance sheet. Contract assets and contract liabilities under the same contract are listed on a net basis. Contract assets and contractliabilities under different contracts will not be offset.For methods of determining and accounting for expected credit losses on contract assets, please see the Note V.12. "Impairment ofFinancial Assets".
18. Inventories
(1) Classification of inventory
Inventory types include among others raw materials, goods in stock, revolving materials and products in progress.
(2) Valuation methods of inventory acquired and sold
When inventory is acquired, it is measured based on actual cost, including purchase cost, processing cost and other costs. Wheninventory is acquired and sold, it is priced according to the monthly weighted average method.
(3) Basis for determining net realisable values of inventories and method for making provision for decline in the value of inventoriesNet realizable value means the estimated selling price of inventory less the estimated cost to be incurred by the time of completion, theestimated selling expense and related taxes. In determining the net realizable value of inventory, based on obtained evidence, the Groupconsiders the purpose of the inventory and the impact of any matters occurring after the balance sheet date.On the balance sheet date, inventory is measured at cost or net realizable value (whichever is lower). If the net realizable value is lowerthan its cost, the Group will make provision for inventory depreciation. The provision for decline in the value of inventories is generallymade at the difference between an inventory item's cost and its net realizable value. For the inventory with a large quantity and relativelylow unit price, the provision for decline in the value of inventories is accrued based on the inventory category; for inventories associatedwith product series manufactured and sold in the same area, with the same or similar end use or purpose, and are difficult to be measuredseparately from other items, the provision for decline in the value of inventories are aggregated. For raw materials with a large quantityand low unit price, the provision of inventory depreciation is generally made according to the time the inventory has been kept.After the provision of inventory depreciation is made, if the original trigger for inventory write-down has disappeared so that the netrealizable value of the inventory is higher than the book value, the amount of provision of inventory depreciation shall be reversed, andthe reversed amount shall be recognized in current gains and losses.
(4) The existing stock inventory system is a perpetual inventory system.
(5) Amortization method of revolving materials
The Group's revolving materials include low-value consumables and packaging materials. Large revolving materials are amortized atthe time of receipt over months of the expected useful life. Other low-value consumables are amortized at the time of receipt using theone-off amortization method. Packaging materials are amortized at the time of receipt using the one-off amortization method.
19. Long-term equity investments
Long-term equity investments in this part refer to the long-term equity investments through which the Group has control, joint controlor significant influence over investee. The long-term equity investments through which the Group does not have control, joint controlor significant influence over investee, is taken as a financial asset at fair value recorded in current gains and losses. If it is non-trading,the Group can choose to designate it as a financial asset at fair value recorded in other comprehensive income at initial recognition.For details about the relevant accounting policy, please see this Note V. 11. "Financial Instrument".Joint control refers to the Group's common control of an arrangement in accordance with relevant agreement, and the relevant activitiesof the arrangement must be unanimously agreed by the participants sharing the control before a decision can be made. Significant
influence refers to the Group's right to participate in the decision-making of an invested entity's financial and operational policies, butnot to control or jointly control the formulation of these policies with other parties.
(1) Determination of investment cost
For long-term equity investments arising from business combination under the same control, the proportion of the book value of thestakeholders' equity of the merged party in the consolidated financial statements of the final controlling party is regarded as the initialinvestment cost of long-term equity investments on the combination date. If there is a difference between the initial investment cost oflong-term equity investments and the cash paid, non-cash assets transferred, and book value of liabilities assumed, the capital surplusshall be adjusted. Where the capital surplus is insufficient to absorb the difference, undistributed profits shall be adjusted. Theinvestments cost which adopts the equity securities issued as the consideration should be adopted as the initial investments cost of thelong-term equity investments according to the proportion of the book value of the stakeholders' equity of the merged party in theconsolidated financial statements of the final controlling party, and adjust the capital surplus by the difference between the initialinvestments cost of long-term equity investments and the amount of issued stock's face value (regarded as share capital). If the capitalsurplus is insufficient to absorb the difference, undistributed profits should be adjusted. If the equity of the acquiree under the samecontrol is acquired step by step through multiple transactions leading to a merger of enterprises under the same control, the transactionsshall be confirmed whether they belong to a "package transaction": If they belong to a "package transaction", all transactions shall betreated as one transaction over which the acquiree has control. If it is not a "package transaction", the Group regards the initial cost ofthe long-term equity investments as the proportion of the shareholders' equity of the acquired enterprise to the carrying amount in theconsolidated financial statements of the final controller at the date of combination. If there is a difference between the initial investmentscost of long-term equity investments on the date of combination and the sum of the book value of the long-term equity investmentsbefore the merger plus the book value of the new share payment consideration on the date of combination, the capital surplus shall beadjusted. Where the capital surplus is insufficient to absorb the difference, undistributed profits shall be adjusted. If the equityinvestment held before the combination date is measured using the equity method or recorded as a financial asset at fair value in othercomprehensive income. The other comprehensive income recognized as a result will not be accounted temporarily.For the acquisition of long-term equity investments involving enterprises under common control, the Group regards the initial cost ofthe long-term equity investments at that date as business combination cost, including the sum of fair values of assets paid, liabilitiesincurred or borne, and equity securities issued, by the buyer. If the equity of the acquiree is acquired step by step through multipletransactions leading to a merger of enterprises under different control, the transactions shall be confirmed whether they belong to a"package transaction": If they belong to a "package transaction", all transactions shall be treated as one transaction over which theacquiree has control. If it is not a "package transaction", the sum of the book value of the original equity investments plus the newinvestments cost is regarded as the initial investments cost of long-term equity investments calculated by the cost method. If theprevious equity is measured using the equity method, the relevant other comprehensive income will not be accounted temporarily.Acquisition-related costs including auditing fees, legal services fees, valuation advice fees and other relevant management fees aregenerally recognized in profit or loss as incurred.A long-term equity investments acquired other than through a business combination is initially measured at the cost, and such cost isdetermined at the amount of cash paid by the Group, the fair value of the equity securities issued by the Group, the value agreed in aninvestment contract or agreement, the fair value or book value of asset exchanged in the non-monetary asset exchange, or the fair valueof the long-term equity investments. Costs, taxes and other necessary expenses directly related to the acquisition of the long-term equityinvestments are also included in the investment cost. If additional investments addition has a significant influence over investee, orjointly control other than the control over investee, the cost of long-term equity investments shall be the sum of the fair value of theoriginal equity investments determined according to Accounting Standards for Business Enterprises No. 22 - Recognition andMeasurement of Financial Instruments and the cost of the additional investment.
(2) Method of subsequent measurement and recognition of gains and losses
The long-term equity investments through which the Group has joint control (except for joint operation) or significant influence overinvestee shall be calculated by the equity method. The Group's financial statements use the cost method to calculate long-term equityinvestments that constitutes control over invested entities.
① Long-term equity investments calculated by cost method
Under the cost method, a long-term equity investment is measured at initial investments cost. Increasing or reducing investments willadjust the cost of long-term equity investments accordingly. Except for actual price paid when the investment is obtained or the cashdividends or profits that are included in the consideration that has been declared but not yet disbursed, the current investment incomeshall be recognized according to the cash dividends or profits declared by the invested entity.
② Long-term equity investments accounted by equity method
When the initial investments cost of long-term equity investments accounted under equity method is greater than the investments, thedifference in the fair value share of the identifiable net assets of the invested entity is enjoyed, without adjusting the initial investmentscost of long-term equity investments; when the initial investments cost is less than the investments, the difference in the fair valueshare of the identifiable net assets of the invested entity is included in the current gains and losses, and the cost of long-term equityinvestments shall be adjusted accordingly.When the equity method is adopted, according to the share of the net profit and loss and other comprehensive income realized by theinvested entity, the investment income and other comprehensive income shall be recognized respectively, and the book value of thelong-term equity investments shall be adjusted; the book value of the long-term equity investments is reduced correspondingly inaccordance with the portion of the profits or cash dividends declared and distributed by the invested entity; for changes in owner'sequity other than net profit and loss, other comprehensive income and profit distribution of the invested entity, the book value of long-term equity investments shall be adjusted and included in capital surplus. The share of net profit and loss of the invested entity shall berecognized, based on the fair value of various identifiable assets of the invested entity when the investment is made, after adjustmentof the net profit of the invested entity. When the accounting policy and accounting period adopted by the invested entity are inconsistentwith those of the Group, the investment income and other comprehensive income shall be recognized based on the adjusted financialstatements of the invested entity in accordance with the Group's accounting policies and accounting period. For the Group's transactionswith its associates and joint ventures, if the invested or sold asset does not constitute a business, unrealized gains or losses resultingfrom the transactions are recognized as investment income or loss to the extent that those attributable to the Group's equity interest areeliminated. However, unrealized losses resulting from the Group's transactions with its invested entity in respect of impairment losseson the transferred assets should not be eliminated. If the asset invested by the Group to its associates and joint ventures constitutes abusiness, to the extent that the investor realizes long-term equity investments other than control, the fair value of the invested businessshall be the initial investments cost of the additional long-term equity investments, and the difference between the initial investmentscost and the book value of the invested business shall be recorded in the profit or loss of the current period. If the asset sold by theGroup to its associates and joint ventures constitutes a business, the difference between the consideration received and the book valueof the invested business shall be recorded in the profit or loss of the current period. If the asset purchased by the Group from itsassociates or joint ventures constitutes a business, the accounting shall be made pursuant to the Accounting Standards for BusinessEnterprises No. 20 - Business Combination shall apply, the gain or loss from the transaction shall be fully recognized.The Group de-recognizes its share of net losses of the invested entity after the carrying amount of the long-term equity investmentstogether with any long-term interests that substantially constitute part of its net investments in the invested entity shall be written downto zero. In addition, if the Group has the obligation to bear additional losses to the invested entity, the provisions shall be recognizedaccording to the expected obligations and be recorded in the investment losses of the current period. Where net profits are subsequentlymade by the invested entity, the Group resumes recognizing its share of those profits only after its share of the profits exceeds the shareof losses previously not recognized.
③ Acquisition of minority interest
When preparing consolidated financial statements, if there is a difference between the new long-term equity investments acquired as aresult of the purchase of minority shares and the share of net assets continuously calculated from the date of purchase (or merger) ofthe subsidiary based on the new shareholding ratio, the capital surplus shall be adjusted. Where capital surplus is insufficient to offsetthe difference, the undistributed profits are adjusted.
④ Long-term equity investments disposal
In consolidated financial statements, where a parent company partially disposes of a long-term equity investment in a subsidiary withoutlosing the control over it, the difference between the disposing price and the net assets of the subsidiary obtained from the disposal ofthe long-term equity investments shall be recognized in the shareholder's equity. If it's partial disposal by a parent company of a long-term equity investment in a subsidiary and the control over the subsidiary is lost, the accounting policy stipulated in this Note V. 7. (2)"Method for Preparing the Consolidated Financial Statements" shall apply.For disposal of long-term equity investments in other situations, the difference between the disposed equity's book value and the actualproceeds is included in the current gains and losses.When the Group reduces its ownership interest in investee but continues to use the equity method for long-term equity investments,other comprehensive income previously recorded as shareholders' equity is disposed in proportion, subject to the accounting treatmentapplicable to the assets or liabilities related to direct disposal of the invested entity. The equity recognized by the Group, other than thechange of the net profits and loss, other comprehensive income and profit distribution of the invested entity, is transferred to currentgains and losses in proportion.When the Group reduces its ownership interest but the Group continues to use the cost method for long-term equity investments, forthe other comprehensive income recognized by the Group using equity method prior to the control over the investee or under financial
instrument recognition and measurement standard, other comprehensive income previously recorded as shareholders' equity is subjectto the accounting treatment applicable to the assets or liabilities related to direct disposal of the invested entity and is transferred tocurrent gains and losses in proportion. Then the other changes in shareholders' equity recognized by the Group using equity method,not arising from the change of the net profits and loss, other comprehensive income or profit distribution of the invested entity, arereclassified to profit and loss in proportion.If the Group loses its control over the invested entity due to the disposal of a portion of an equity investment, the equity method isadopted in the preparation of individual financial statements when the remaining equity allows the Group to exercise joint control orhold significant influence on the invested entity, and the remaining equity after disposal is regarded as being adjusted by the equitymethod at the time of acquisition; if the remaining equity after disposal does not allow the Group to exercise joint control or holdsignificant influence on the invested entity, it is calculated in accordance with the relevant provisions of financial instrument recognitionand measurement standards, and the difference between the fair value and the book value on the day when the control is lost is recordedin current gains and losses. If other comprehensive income recognized, using the equity method or under the standards for recognitionand measurement of financial instruments before the Group obtains the control over the invested entity, is subject to the accountingtreatment applicable to the assets or liabilities related to direct disposal of the invested entity when the control over the invested entityis lost, changes in the shareholders' equity of the net assets of the invested entity recognized using the equity method, except for netgains and losses, other comprehensive income and profit distributions, shall be transferred to current gains and losses when the controlover the invested entity is lost. Other comprehensive income and other shareholders' equity are transferred in proportion when theremaining equity after disposal is calculated by the equity method. If the remaining equity after disposal is calculated in accordancewith the standards for recognition and measurement of financial instruments, other comprehensive income and other shareholders'equity are transferred in full.If joint control or significant influence on the invested entity is lost by the Group due to the disposal of some equity investments, theremaining equity after disposal is calculated according to the financial instrument recognition and measurement standards. Thedifference between the fair value and the book value on the day when joint control or significant influence is lost is recorded in currentgains and losses. Other comprehensive income of the equity investment previously recognized using the equity method is subject tothe accounting treatment applicable to the assets or liabilities related to direct disposal of the invested entity when the Group stopsusing the equity method. Shareholders' equity recognized by the Group, other than the change of the net profits and loss, othercomprehensive income and profit distribution of the invested entity, is reclassified to profit and losses fully when the Group stops usingthe equity method.The equity investments in the subsidiary is disposed of step by step by the Group through multiple transactions until the control is lost.The aforementioned transactions, if belong to package transactions, are disposed as one transaction for disposal of the equityinvestments of the subsidiary and loss of control. The difference between the price of each disposal before the control is lost and thebook value of long-term equity investments related to the disposed equity are recorded in other comprehensive income, and thentransferred to the profit or loss of the current period when the control is lost.
20. Investment properties
Measurement of investment propertiesMeasurement by cost methodDepreciation or amortization methodInvestment properties mean the properties held for the purpose of rent earning or capital appreciation, or both. It includes the land userights that have been leased, the land use rights that are held for transfer upon appreciation, and the leased buildings. In addition, thevacant buildings held by the Group for the purpose of leases will also be reported as investment properties, if the board of directors (orsimilar authority) makes a resolution in written form that expressly indicates that the buildings will be used for leases and the intentionof holding will not change in the short term.Investment properties are initially measured at cost. Subsequent expenses related to investment properties shall, if economic profitsrelated to the property are likely to be gained and its costs can be measured reliably, be recorded as the cost of investment properties.Other subsequent expenditures are recorded in the current gains and losses when incurred.The Group adopts the cost model for subsequent measurement of investment properties. The investment properties are depreciated oramortized in accordance with policies consistent with building or land use rights.When self-use properties or inventories are converted to investment properties, or investment properties are converted to self-useproperties, the value after the conversion shall be recognized at the book value before the conversion.
When investment properties are disposed or permanently withdrawn from use and is not expected to obtain economic benefits from itsdisposal, the investment properties shall be de-recognized. The disposal income from the sale, transfer, abandonment or destruction ofinvestment properties less its book value and relevant taxes shall be recognized in current losses and profits.
21. Fixed assets
(1) Recognition criteria
Fixed assets mean the tangible assets held with an estimated useful life exceeding one fiscal year for the production of goods, provisionof labor services, leasing or management. Fixed assets may be recognized when they meet the following conditions: Economic benefitsrelating to the fixed asset are likely to be gained by the Group, and the cost of the fixed asset can be measured reliably. Fixed assetsare initially measured at cost, with the influence of estimated abandonment cost taken into account.
(2) Depreciation methods
Category | Depreciation methods | Estimated useful life | Residual value rate | Annual depreciation rate |
Buildings | Straight-line method | 20-30 years | 5%-10% | 3%-4.75% |
Production equipment | Straight-line method | 5-10 years | 5%-10% | 9%-19% |
Measuring equipment | Straight-line method | 5-10 years | 5%-10% | 9%-19% |
Office equipment | Straight-line method | 5 years | 5%-10% | 18%-19% |
Transportation equipment | Straight-line method | 5 years | 5%-10% | 18%-19% |
Fixed assets are depreciated over their estimated useful lives using the straight-line method from the month following that in whichthey reach their intended usable condition.The estimated net residual value is the amount that the Group would currently obtain from the disposal of a fixed asset, net of estimateddisposal costs, assuming that the fixed asset has completed its estimated useful life and is in the condition expected at the end of itsuseful life.
(3) Explanation of other matters:
Subsequent expenditures relating to fixed assets are included in the cost of fixed assets and the carrying amount of the replaced part isderecognized if it is probable that the economic benefits associated with the fixed asset will flow and its cost can be measured reliably.Other subsequent expenditures, except for these, are recognized in profit or loss when incurred.Fixed assets are derecognized when they are in a disposal condition or when no economic benefits are expected to arise from their useor disposal. The difference between the disposal proceeds from the sale, transfer, retirement or destruction of fixed assets, net of theircarrying amount and related taxes, is recognized in profit or loss for the current period.The Group reviews the useful life, estimated net residual value and depreciation method of fixed assets at least at the end of the yearand treats any changes as changes in accounting estimates.
22. Construction in progress
Construction in progress is measured at actual cost, including various construction expenditures incurred during the period ofconstruction, capitalized borrowing costs and other related expenses before the project reaches the predetermined conditions for use.Fixed assets under construction are transferred to fixed assets at their estimated value from the date they are ready for the intended use.This is done in accordance with the project budget, costs, or actual project expenses. This applies when the project has reached itsintended condition of use but the final accounts have not yet been finalized. Equipment scheduled for installation is transferred to fixedassets upon reaching the intended condition of use, while equipment requiring installation and commissioning is transferred to fixedassets after reaching the intended condition of use.Criteria and timing for specific transfer of each category of the Company's construction in progress to fixed assets:
Category | Criteria and timing for the transfer to fixed assets |
Buildings | (1) The main construction works and ancillary works have been substantially completed; |
Category | Criteria and timing for the transfer to fixed assets |
(2) The construction projects have met the predetermined design requirements and have been accepted by units responsible for investigation, design, construction, and supervision; (3) The works have been accepted by external departments including fire-fighting and planning departments; (4) Construction works that have reached the intended condition of use but have not yet been finalized are transferred to fixed assets at their estimated value based on the actual cost of the works from the date of reaching the intended condition of use. | |
Machines and equipment that require installation and commissioning | (1) The relevant equipment and other supporting facilities have been installed; (2) The equipment can maintain normal and stable operation for a period of time after commissioning; (3) The production equipment can produce qualified products stably for a period of time; (4) The equipment has been accepted by asset managers and users. |
23. Borrowing costs
Borrowing costs include interest on borrowing, amortization of discount or premium, auxiliary expenses and exchange differences dueto foreign currency borrowing, etc. Borrowing costs that can be directly attributable to the acquisition, construction or production ofassets eligible for capitalization shall be capitalized when the asset expenditure has been incurred, the borrowing cost has been incurred,and the acquisition, construction or production necessary to make the asset reach the predetermined conditions for use or sale hasstarted, and the capitalization shall discontinue when the constructed or produced assets eligible for capitalization reach thepredetermined conditions for use or sale. The remaining borrowing costs are recognized as costs at the time of occurrence.The amount to be capitalized is the actual interest expense incurred on the specific borrowings less any bank interest earned fromunused funds of the designated borrowings or any investment income arising from the temporary investment of those funds. The amountto be capitalized on the general borrowings is calculated by applying a capitalization rate to the weighted average of the excess amountsof cumulative expenditures on the asset over and above the amounts of the specific borrowings. Capitalization rate is calculated anddetermined based on the weighted average interest rate of general borrowings.During the period of capitalization, exchange differences arising from special borrowings in a foreign currency shall be fully capitalized,and exchange differences arising from general borrowings in a foreign currency shall be recognized in gains and losses.Assets eligible for capitalization refer to fixed assets, investment properties, inventories and other assets that need to go through quitea long time of acquisition or production activities to reach the predetermined usable or salable state.If an abnormal interruption of assets eligible for capitalization occurs in the process of acquisition, construction or production andcontinues over 3 months, the capitalization of borrowing costs shall cease and shall not restart until the acquisition, construction orproduction of such assets resume.
24. Right-of-use assets
See Note 36. "Lease"for details
25. Intangible assets
(1) Estimated useful life and its determination basis, estimation, amortization method or review procedures
Intangible assets mean the identifiable non-monetary assets owned or controlled by the Group without physical substance.The intangible assets shall be initially measured at cost. Expenses related to the intangible assets are recognized in the cost of intangibleassets when it is likely that the associated economic benefits will be gained by the Group and the associated costs can be measuredreliably. Other expenses related to the intangible assets are recognized in profit or loss for the period in which it is incurred.The acquired land use right is generally recognized as intangible assets. Expenses related to land use right and construction cost frombuildings such as self-built factory, etc. are recognized as intangible assets and fixed assets, respectively. In the case of purchasedbuildings, related costs are shared between the cost of land use rights and the cost of buildings. The related costs that cannot be allocatedreasonably are recognized as fixed assets.When intangible assets with a finite useful life are available for use, their original cost is amortized over their estimated useful lifeusing the straight-line method. Intangible assets with uncertain useful life shall not be amortized.
The amortization method for intangible assets with finite useful life is as follows:
Item | Estimated useful life | Amortization method | Basis for determination |
Land-use right | 37-50 years | Straight-line method | Property rights registration period |
Non-patent technology | 2-10 years | Straight-line method | Expected years of economic benefits |
Patent right | 7-10 years | Straight-line method | Expected years of economic benefits |
Trade mark | 5 years | Straight-line method | Expected years of economic benefits |
Software | 3-10 years | Straight-line method | Expected years of economic benefits |
For intangible assets with a finite useful life, the Group reviews their useful life and amortization method at the end of the period, andaccounts for any change as a change in an accounting estimate. For intangible assets with uncertain useful life, the Group reviews theiruseful life. If it is evident that the duration of associated economic benefits is predictable, the useful life is estimated and the asset isamortized pursuant to amortization policies for intangible assets with finite useful life.
(2) Scope and accounting treatment of R&D expenditures
The Group classifies various expenses directly related to conducting R&D activities as R&D expenditures, including employees'remuneration, direct investments, depreciation expenses, depreciation expenses of right-of-use assets, equipment commissioning andtesting expenses, external R&D services, and amortization of intangible assets.The expenditure for research and development projects in the Group is divided into research phase expenditure and development phaseexpenditure.The classification into the expenditure in the research phase or the expenditure in the development phase in relation to internal R&Dprojects of the Group conforms to the following standards:
Expenditures in the research phase are defined as those spent in an innovative, explorative and planned investigation to acquire andunderstand new scientific or technical knowledge. The research is the preparation in documents and other aspects for furtherdevelopment. It is very uncertain whether the completed research will move onto the development phase and whether the developmentwill lead to the emergence of an intangible asset. Therefore, the Group includes the expenditures in the research phase in expenses andrecognize them in the profit or loss of the current period.Expenditures in the development phase refer to the expenditures incurred during the stage of applying research results or otherknowledge to a project or design to produce new or substantially improved materials, devices and products before commercial massproduction or use. As the development phase comes after the research phase, the majority of basic conditions for a new product ortechnology have been established. Thus, the Group recognizes the expenditures in development phase eligible for capitalization asintangible assets. Gross expenditures incurred in the period from the point when the conditions for capitalization are satisfied to thepoint when intangible assets are ready for the intended purpose are capitalized. No adjustment will be made further for any expenditurethat has been included in expense and recognized in profit or loss before the same intangible assets have met the conditions forcapitalization in the development phase.Expenditures in the research phase are included in the current gains and losses when incurred.Expenditures in the development phase are recognized as intangible assets only when the following conditions are all satisfied, or areincluded in the profit or loss of the current period:
① Having completed the intangible assets, enabling them to be technically feasible for use or sale;
② Having the intention to complete the intangible assets and use or sell them;
③ The ways in which intangible assets generate economic benefits, including the proof that there is a market for the product producedusing the intangible assets or for the intangible assets. Where the intangible assets are used internally, their usefulness shall be proved;
④ Having sufficient technical, financial and other resources to complete the development of the intangible assets, and having theability to use or sell the intangible asset;
⑤ Expenditures attributable to the development phase of the intangible assets can be measured reliably.If it is impossible to distinguish between expenditures in the research phase and expenditures in the development phase, the R&Dexpenditures incurred shall be included in the profit or loss of the current period.
26. Impairment of long-term assets
For non-current and non-financial assets including fixed assets, construction in progress, intangible assets with finite useful life,investment properties measured at cost, and long-term equity investments in subsidiaries, associates and joint ventures, the Groupassesses whether there is an indication of impairment at the date of balance sheet. If there is such an indication, the Group estimatesthe recoverable amount and carries out an impairment test. An impairment test shall be conducted every year for intangible assets withuncertain goodwill and useful life and those have not yet reached the usable state, regardless of whether there are signs of impairment.If the impairment test results show that the recoverable amount of an asset is lower than its book value, the provision for impairmentis accrued according to the difference and is recorded in the impairment loss. The recoverable amount is the higher of the net amountof the fair value of the asset less the disposal expenses and the present value of the expected future cash flow of the asset. The fairvalue of an asset is measured as the price agreed in a sales contract concluded in good faith. In absence of any such sales contract, ifthere is an active market for the asset, the best information available is used as a basis to estimate the fair value of the asset. Disposalexpenses include legal fees, taxes and transportation fees related to the disposal of an asset, and direct expenses incurred to make theasset salable. The present value of expected future cash flows of an asset is measured by applying an appropriate discount rate to theexpected future cash flows generated during the continuous use of the asset at the time of final disposal. The asset impairment provisionis calculated and recognized on the basis of individual assets. In the case of difficulty in estimating the recoverable amount of anindividual asset, the recoverable amount of the asset group to which the individual asset belong is calculated. An asset group is thesmallest unit of combined assets that can generate cash inflows independently.For goodwill listed separately in the financial statements, the carrying amount of such goodwill arising from business combinations isallocated to relevant asset groups or asset groups. If the test results show that the recoverable amount of asset groups or combinationof asset groups containing allocated goodwill is lower than its book value, the corresponding impairment loss shall be recognized. Theamount of impairment loss shall firstly be deducted from the carrying amount of goodwill embodied in the asset groups or combinationof asset groups, then be deducted from the carrying amounts of other assets based on the proportions of their carrying amounts in theasset groups or combination of asset groups.The impairment losses of assets will not be reversed in subsequent periods once recognized.
27. Long-term prepaid expenses
Long-term prepaid expenses refer to expenses that have already incurred but should be borne by the current and future instalments fora period of more than one year. Long-term prepaid expenses shall be amortized according to the straight-line method within theestimated period of benefit.
28. Contract liabilities
Contract liabilities are defined as the Group's obligation to transfer goods to a client for received or receivable consideration from theclient. The Group presents as contract liabilities, at the earlier time point of actual payment by a client or the payment due, if the Grouphas paid the contract consideration or the Group has acquired the right to collect unconditionally before the goods are transferred bythe Group to the client. Contract assets and contract liabilities under the same contract are listed on a net basis. Contract assets andcontract liabilities under different contracts will not be offset.
29. Employee benefits
(1) Accounting treatment of short-term benefits
The Group's employee benefits consists mainly of short-term employee benefits, post-employment benefits, termination benefits andother long-term employee benefits. Including:
Short-term employee benefits include employee wages or salaries, bonuses, allowances and subsidies, employee welfare fees, medicalinsurance contributions, maternity insurance contributions and work injury insurance contributions, housing provident fundcontributions, union running costs and employee education costs, and non-monetary benefits. During the accounting period when theemployees provide services for the Group, the short-term remuneration actually incurred is recognized as a liability and recorded inthe current gains and losses or related asset costs. The non-monetary welfare in short-term remuneration should be measured at fairvalue.
(2) Accounting treatment of post-employment benefits
Post-employment benefit mainly covers basic pension insurance and unemployment insurance. Most of post-employment benefit plansare mainly defined benefit plans. The defined benefit plans of the Group are basic pension insurance and unemployment insurance, andthe contributions thereto are recorded in the asset cost or the profit or loss of the current period when they occur.
(3) Accounting treatment of termination benefits
Where the Group terminates the labor relationship with an employee before the labor contract expires, or offers proposed compensationfor encouraging the employee to accept the redundancies voluntarily, if the Group cannot unilaterally withdraw the termination benefitsprovided by the termination of labor relations plan or reduction proposal, and the Group recognizes the costs related to thereorganization involving the payment of the termination benefits (whichever comes first), the employee benefits liabilities arising fromthe termination benefits are recognized and recorded in the current gains and losses. However, termination benefits which are expectednot to be fully paid within twelve months after the end of the annual reporting period are accounted for as other long-term employeebenefits.Internal employee retirement programs are accounted for, using the above method applicable to termination benefits. The Grouprecognizes in the profit or loss of the current period (termination benefits) employee salaries and contributions to the employee's socialinsurance covered by its internal retirement program from the day when the employees stop their services until their statutory retirementdates, when the conditions for provisions are satisfied.
(4) Accounting treatment of other long-term employee benefits
If other long-term employee benefit provided by the Group for its employees constitutes the defined contribution plan, the accountingtreatment for the defined contribution plan applies. In any other circumstance, the accounting treatment for the defined benefit planapplies.
30. Provisions
Obligation relating to a contingent are recognized as provisions when they meet the following conditions: (1) the Group has a presentobligation related to a contingency; (2) it is probable that an outflow of economic benefits will be required to settle the obligation; and
(3) the amount of the obligation can be measured reliably.
Provisions are measured against the best estimate of the consideration required to settle the present obligation at the balance sheet date,taking into account factors pertaining to a contingency such as the risks, uncertainties and time value of money.If all or part of the expenses required to settle the provisions are expected to be compensated by a third party, the amount ofcompensation is recognized separately as an asset when it is basically recognized that it can be received, and the recognizedcompensation amount doesn't exceed the book value of the provision.
31. Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment is a transaction where equity instruments are granted or equity instrument-based liabilities are assumed for theconsideration of the services provided by employees or other parties. Share-based payment is classified into equity-settled share-basedpayment and cash-settled share-based payment.
① Equity-settled share-based payment
Equity-settled share-based payments made for the consideration of the services provided by the employees, is measured at the fairvalue of equity instruments on the date of grant to the employees. In the case that the right can be exercised after the completion ofservices in the vesting period or satisfaction of stipulated performance conditions, the fair value amount shall, on the basis of the bestestimate of the quantity of equity instruments with vesting in the vesting period, be recorded in relevant cost or expense using thestraight-line method. In the case that the right can be exercised immediately after the grant, it is recorded in relevant cost or expenseon the grant date, and the capital surplus is increased accordingly.On each balance sheet date during the vesting period, the Group makes the best estimate based on the latest available follow-upinformation such as changes in the number of employees with vested rights, and revises the estimated number of equity instrumentswith vesting. The impact of the above estimation is recorded in the cost or expense of the current period, and the capital surplus adjustedaccordingly.
Equity-settled share-based payments made for the consideration of the services provided by other parties shall, if the fair value of theservices can be measured reliably, is measured at fair value at the date of grant, and if the fair value of the services cannot be measuredreliably but the fair value of the equity instruments can be measured reliably, is measured at fair value at the date of acquisition. Theyare recorded in the cost or expense, and the shareholder's equity is increased accordingly.
② Cash-settled share-based payment
Cash-settled share-based payment shall be measured according to the fair value of liabilities determined on the basis of shares or otherequity instruments undertaken by the Group. In the case that the right is exercised immediately after the grant, it is recorded in relevantcost or expense, and the liability is increased accordingly. If the right is exercised only after the completion of services in the vestingperiod and satisfaction of stipulated performance conditions, on each balance sheet date within the vesting period, based on the bestestimate of the vesting condition and according to the fair value of the liabilities assumed by the Group, the services acquired in thecurrent period are recorded in the costs or expenses, and the liability is increased accordingly.On each balance sheet date and settlement date before the settlement of related liabilities, the fair value of liabilities shall be re-measured,and the changes shall be recorded in the current gains and losses.
(2) Accounting treatment related to modification and termination of share-based payment planWhen the Group modifies the share-based payment plan, if the fair value of the granted equity instruments is increased by modification,the increase of the services acquired shall be recognized according to the increase of the fair value of the equity instruments. Theincrease of fair value of equity instruments refers to the difference between the fair values of equity instruments before and aftermodification on the modification date. If the total fair value of share-based payment is reduced by modification or other ways that areunfavorable to employees, the accounting treatment of the acquired services will continue, as if the change never happened unless theGroup cancels some or all of the granted equity instruments.During the vesting period, if the granted equity instruments are canceled, the Group will treat the cancellation of the granted equityinstruments as accelerated exercise, and immediately record the amount to be recognized in the remaining vesting period into thecurrent gains and losses, and recognize the capital surplus at the same time. If the employee or other party can choose to meet the non-vesting condition but fails to meet it during the vesting period, the Group will treat it as cancellation for granting equity instruments.
(3) Accounting treatment of share-based payment transactions involving the Group and the Company's shareholders or de factocontrollersShare-based payment transactions involving the Group and the Company's shareholders or de facto controllers, where one of thesettlement enterprise and the service receiving enterprise is located within the Group and the other outside the Group, are treated in theGroup's consolidated financial statements in accordance with the following provisions:
①If the settlement enterprise settles the transaction with its own equity instruments, the share-based payment transaction is treated asequity-settled share-based payment; otherwise, it is treated as cash-settled share-based payment.If the settlement enterprise is an investor of the service recipient, it is recognized as a long-term equity investment in the servicerecipient based on the fair value of the equity instrument or the fair value of the liabilities to be assumed at the date of grant, withcapital surplus (other capital surplus) or liabilities recognized at the same time.
②If the service recipient does not have a settlement obligation or has granted its own equity instruments to its own employees, theshare-based payment transaction is treated as equity-settled share-based payment; if the service recipient has a settlement obligationand has granted its own equity instruments to its own employees, the share-based payment transaction is treated as cash-settled share-based payment.If the service recipient and the settlement enterprise are not the same entity, the share-based payment transaction shall be recognizedand measured in the separate financial statements of both the service recipient and the settlement enterprise, respectively, in accordancewith the above principles.
32. Revenue
Revenue recognition and measurement accounting policies disclosed by business typeRevenue represents the total inflow of economic benefits arising from the Group's ordinary activities, leading to an increase inshareholders' equity and not related to shareholders' invested capital. Revenue from contracts between the Group and clients isrecognized when the client obtains control over the relevant goods (including labor, the same below), subject to the following conditionsbeing met simultaneously: parties to the contract have approved and committed to fulfilling their respective obligations; the contractdefines the rights and obligations of the parties regarding the transferred goods or labor provision; the contract includes clear paymentterms for the transferred goods; the contract holds commercial substance, meaning it will alter the Group's future cash flows' risk,
timing, or amount upon fulfillment; and it is probable that the consideration from transferring goods to clients will be recoverable. Inthis context, acquiring control over the relevant goods means being able to dominate the use of the goods and derive almost fulleconomic benefits from it.At the contract commencement date, the Group identifies each individual performance obligation existing under the contract, andapportions the trading price to each individual performance obligation based on the proportion of the selling prices of the goodscommitted by the individual performance obligations. The trading price is determined by taking into account of the influence of variableconsideration, major financing components in the contract, non-cash consideration, consideration payable to clients and other factors.If each individual performance obligation under the contract meets any of the following conditions, the Group will, according to theprogress of performance in the relevant performance period, recognize the part of trading price apportioned to the individualperformance obligation as a revenue: the client obtains and consumes economic benefits from the performance by the Group at thetime of performance; the client has control over the goods in production during the performance by the Group; the goods producedduring the performance by the Group have irreplaceable use, and the Group is entitled to be paid for the completed part of the obligationup to now in the entire contract period. The performance schedule is determined by output method or input method according to thenature of the goods transferred. If the performance schedule cannot be reasonably determined and the incurred costs of the Group areexpected to be compensated, the revenue is recognized according to the amount of the incurred costs until the performance schedulecan be reasonably determined.If none of the above conditions is met, the Group recognizes revenue at the point in time when the client obtains control over therelevant goods, based on the transaction price apportioned to that single performance obligation. To determine whether the clientobtains the control over the goods, the Group considers the following indications: the Group enjoys the current right to be paid for thegoods, and the client has the current obligation to pay for the goods; the Group has transferred legal ownership of the goods to theclient, and the client has owned the legal ownership over the goods; the Group has delivered the goods physically to the client, and theclient has possessed the goods in kind; the Group has passed on to the client major risks and rewards of the ownership of the goods,and the client has received the major risks and rewards of the ownership of the goods; the client has accepted the goods; and any otherindication that the client has obtained the control over the goods.Specific methods for revenue recognition from product sales:
The Group's sales business is categorized into domestic sales and overseas sales. Both domestic sales and overseas sales have generalmode and VMI mode, with specific revenue recognition policies for sales as follows:
① Domestic sales
A. General sales modeThe Group arranges production according to a sales contract or order with a client; upon shipment from the warehouse, the productsare transported and delivered to the place of delivery designated by the client; the client's warehousing employee checks the quantityof the products and also carries out a spot check for the quality of the products; after the quantity and quality are accepted, the employeewill sign and stamp on the receipt for confirmation. The revenue is recognized when the Group obtains the signed and stamped receiptor when the Group obtains the signed and stamped receipt and makes a reconciliation with the client.B. VMI sales modeThe Group arranges production according to a sales contract or order with the client; upon shipment from the warehouse, the productswill be transported and delivered to the delivery place designated by the client; the warehouse personnel checks the quantity of theproducts and also carries out a spot check for the quality of the products; after the quantity and quality are accepted, the warehousepersonnel will sign and stamp on the receipt for confirmation. Sales revenue will be recognized based on the actual receipt of goods bythe client and reconciliation with the client.
② Overseas sales
A. General sales modeThe Group arranges production according to a sales contract or order with a client; the export delivery is made through customsclearance after the products are verified as qualified through inspection; for the purpose of delivering the products, the revenue isrecognized at the time of control transfer depending on specific terms of trade.B. VMI sales modeThe Group arranges production according to a sales contract or order with a client; the export is made through customs clearance afterthe products are verified as qualified through inspection; after the Group completes export declaration formalities and obtains an exportdeclaration form, and the products are transported to the place designated by the client, the revenue is recognized when the clientaccepts the products.The same type of business, if with different operating models, entails different revenue recognition and measurement methods.
None
33. Contract costs
Contract costs include incremental costs incurred to obtain contracts and contract performance costs.If the incremental cost incurred by the Group to acquire the contract is expected to be recovered, it is recognized as an asset as thecontract acquisition cost.A cost incurred for performing a contract which does not fall within the regulated scope of accounting standards for business enterprisesother than Accounting Standards for Business Enterprises No. 14 - Revenue (revised in 2017) shall be recognized as an asset if: ①such cost directly relates to a current or expected contract, including direct labor, direct materials, manufacturing costs (or similarcosts), costs clearly borne by clients and other costs only incurred due to the contract; ② such cost increases the resources of the Groupfor fulfilling its obligations in the future; and ③ such cost is expected to be recoverable.Assets related to contract costs are amortized to profit or loss using the same basis as revenue recognition for the goods to which theasset relates; however, if the asset is amortized over a period of less than one year, it is recognized in profit or loss in the period inwhich it is incurred.When the carrying amount of an asset related to contract costs is greater than the difference between the following two items, theCompany makes a provision for impairment and recognizes it as an asset impairment loss for the excess:
①The residual consideration that the Group expects to obtain for the transfer of goods or services related to the asset;
②The estimated costs to be incurred for the transfer of such related goods or services.
If there is a subsequent reversal of the provision for asset impairment, the carrying amount of the asset after the reversal should notexceed its value on the reversal date if no impairment provision had been made.
34. Government grants
Government grants refer to the monetary assets and non-monetary assets obtained by the Group from the government free of charge,excluding the investment made by the government as an investor which enjoys the corresponding owner's equity. Government grantsare divided into asset-related government grants and income-related government grants. Asset-related government grants refer to thegovernment grants obtained by the Group and used for acquiring or forming long-term assets by other means. Other government grantsare defined as government grants related to income. If no target of grants is specified in government documents, government grants areclassified into government grants related to assets and government grants related to income as follows: (1) if the government documentstipulates grants for a defined project, the grants will be divided according to the proportion of expenditures transformed into assetsand expenditures recorded in expenses in the budget of the defined project, and the proportion will be reviewed at each balance sheetdate and be changed if necessary; and (2) if the government document contains general statement on the purpose of grants, other thana defined project, the grants will be treated as government grants related to income. Government grants in the form of monetary assetsshall be measured at the amount received or receivable. Government grants in the form of non-monetary assets shall be measured atfair value. If the fair value cannot be reliably acquired, the government grants shall be measured at nominal amount. Government grantsmeasured at nominal amount shall be directly recorded in the current gains and losses.The Group recognizes and measures government grants generally at the time of receipt according to the actually received amounts.However, at the end of the period, the subsidy shall be measured according to the amount receivable when there is conclusive evidencethat it can meet the relevant conditions stipulated by the financial support policy and is expected to receive financial support funds. Agovernment grants measured at the amount receivable shall meet the following conditions: (1) the amount of grant receivable has beenconfirmed in a governmental document or can be reasonably estimated according to any officially issued measures for the managementof financial support funds, without significant uncertainty in the estimated amount; (2) the measurement is based on the financialsupport projects and its measures for the management of financial support funds officially released and proactively disclosed by localfiscal authority according to the Government Information Disclosure Regulations, and the measures are inclusive (applicable to anyeligible enterprise), other than for specific enterprises; (3) the relevant grant approval document has clearly stated the period of payment,and as the payment of the grant is guaranteed by corresponding fiscal budgets, there is reasonable assurance that the payment will bemade within certain time of period; and (4) other relevant conditions should be met according to the actual situation of the Group andthe grant (if any).Asset-related government grants are recognized as deferred income, and shall be recorded in current gains and losses in stages accordingto a reasonable and systematic method within the useful life of the relevant assets. If income-related government grants are received ascompensation for related costs or losses in future periods, they are recognized as deferred income, and are recorded in current gains
and losses during the period when the related costs or losses are recognized; those received as compensation for related costs or lossesincurred are directly included in the profit or loss of the current period. If a government grants contains an asset-related component andan income-related component, the two components are subject to separate accounting treatment. If it is difficult to distinguish them,the subsidy shall be classified as income-related government grants.Government grants related to the daily operating activities of the Group shall be recorded in other income according to the nature ofoperating business. Government grants unrelated to the daily activities are recorded in non-operating income.Where any recognized government grants need to be returned, in the case of related deferred income balance, the carrying amount ofthe deferred income balance shall be written down, and any excess shall be recognized in the profit or loss of the current period. Inother circumstances, the returned subsidy is directly recorded in the profit or loss of the current period.
35. Deferred tax assets/liabilities
(1) Current income taxes
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the amount expectedto be paid (or returned) according to the requirements of tax laws. The taxable income used to calculate the current income tax expenseis derived from adjustments made to the pre-tax accounting profit for the current reporting period in accordance with relevant taxregulations.
(2) Deferred tax assets and liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax bases, or between the carryingamounts of those items that are not recognized as assets or liabilities and of which the tax bases can be determined according to taxlaws and tax bases, deferred tax assets and liabilities are recognized using the balance sheet liability method.For temporary differences arising from the initial recognition of goodwill, no corresponding deferred tax liabilities are recognized. Fortemporary differences arising from the initial recognition of assets or liabilities in transactions other than business combinations thatdo not affect either the accounting profit or taxable income (or deductible losses), and where the initial recognition of assets andliabilities does not result in equivalent taxable temporary differences and deductible temporary differences, no corresponding deferredincome tax assets or liabilities are recognized. In addition, for the taxable temporary differences associated with investments insubsidiaries, associates and joint ventures, if the Group is able to control the timing of the reversal of the temporary difference and itis probable that the temporary difference will not reverse in the foreseeable future, no deferred tax liability is recognized. Except forthe above exceptions, the Group recognizes deferred tax liabilities arising from all other taxable temporary differences. For thedeductible temporary differences associated with investments in subsidiaries, associates and joint ventures, the corresponding deferredtax assets shall not be recognized if it is not probable that the temporary difference will reverse in the foreseeable future, or if it is notprobable that taxable profits will be available in the future against which the deductible temporary difference can be utilized. For theabove exceptions, deferred tax assets for deductible temporary differences are recognized by the Group to the extent that it is probablethat taxable profits will be available against which the deductible temporary differences can be utilized.For deductible losses and tax credits that can be carried forward to later years, the corresponding deferred tax assets are recognized tothe extent that the future taxable income that can be used to offset the deductible losses and tax credits is likely to be obtained.At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax laws, that are expected to beapplicable when the asset is realized or the liability is settled.On the balance sheet date, the carrying amount of deferred tax assets shall be reviewed. If it is unlikely to obtain sufficient taxableincome in the future to offset against the profits arising from deferred tax assets, the carrying amount of the deferred tax assets shall bewritten down. When it is probable that sufficient taxable income will be available, such written-down amount shall be subsequentlyreversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.Except that current income taxes and deferred taxes arising from transactions or events recognized in other comprehensive income ordirectly recorded in shareholders' equity are recorded in other comprehensive income or shareholders' equity, and that deferred taxesarising from business combinations adjust the carrying amount of goodwill, all other current income taxes and deferred tax expensesor gains are recorded in the profit or loss of the current period.
(4) Income tax offset
When there is a legal right to settle on a net basis and the intention is to settle on a net basis or to realize assets and to settle liabilitiessimultaneously, the current income tax assets and current income tax liabilities of the Group are offset and presented as net amount.
When there is a legal right to settle current income tax assets and current income tax liabilities on a net basis, and the deferred taxassets and deferred tax liabilities are related to the income tax levied by the same tax administration department on the same tax payeror to different tax payers, but in each future period of reversing material deferred tax assets and liabilities, the tax payers involvedintend to settle the current income tax assets and liabilities on a net basis or realize assets and settle liabilities at the same time, thedeferred tax assets and deferred tax liabilities of the Group are offset and presented as net amount.
36. Lease
(1) Accounting treatment of leases as lessee
A lease is a contract under which the Group transfers or acquires the right to control the use of one or more identified assets for aspecific period of time in exchange for consideration or payment. At the inception date of a contract, the Group assesses whether thecontract is a lease or contains a lease.The Group acts as lessee:
The Group's categories of leased assets are mainly buildings.
①Initial measurement
On the commencement date of a lease, the Group recognizes the right to use the leased asset over the lease term as a right-of-use asset,and recognizes the present value of the outstanding lease payments as a lease liability, excluding short-term leases and leases of low-value assets. When measuring the present value of a lease payment, the Group uses the interest rate implicit in the lease as the discountrate, and adopts the incremental borrowing rate as the lessee's discount rate if the interest rate implicit in the lease is not determinable.
②Subsequent measurement
The Group depreciates right-of-use assets according to the depreciation provisions outlined in Accounting Standards for BusinessEnterprises No. 4 - Fixed Assets. See Note V.21 for details. If ownership of the leased asset can be reasonably assured at the end of thelease term, the Group depreciates it over the remaining useful life of the asset. If the Group can reasonably determine that it will obtainthe ownership of leased assets when the lease term expires, the Group depreciates the right-of-use assets over the remaining useful lifeof the leased assets.For lease liabilities, the Group calculates its interest expense at a fixed periodic rate for each period during the lease term, which ischarged to current profit or loss or included in the cost of the related assets. Variable lease payments not included in the measurementof lease liabilities, when actually incurred, shall be recorded in the current gains and losses or related asset costs.Following the commencement date of the lease term, when there are changes in the substantive fixed payments, the projected amountpayable for the residual value of the guarantee, the indexes or ratios used to determine the lease payments, or the valuation results oractual exercise of purchase options, lease renewal options or termination options, the Group re-measures the lease liability based onthe present value of the lease payments after such changes and adjusts the book value of the right-of-use asset accordingly. If thecarrying amount of the right-of-use asset has been reduced to zero, but the lease liability needs to be further reduced, the Grouprecognizes the remaining amount in profit or loss for the current period.
③ Short-term leases and leases of low-value assets
For short-term leases (with a lease term of less than 12 months from the commencement date) and leases of low-value assets, the Groupadopts a simplified approach by not recognizing right-of-use assets and lease liabilities; instead, the Group recognizes the leasepayments as part of the cost of the related assets or in profit or loss for the current period, on a straight-line basis or other systematicand reasonable basis, in each period during the lease term.
(2) Accounting treatment of leases as lessor
The Group acts as lessor:
The Group classifies leases into finance leases and operating leases based on their transaction substance at the inception date of thelease. A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of the leased asset. Operatingleases are leases other than finance leases.
①Operating lease
The Group uses the straight-line method to recognize lease collections under operating leases as rental income in each period duringthe lease term. Variable lease payments relating to operating leases that are not recognized as lease collections are recognized in profitor loss when they are actually incurred.
②Finance lease
On the commencement date of the lease term, the Group recognizes finance lease receivables and derecognizes finance lease assets.Finance lease receivables are initially measured at the net investment in the lease (the sum of the unguaranteed residual value and thepresent value of lease receivables not yet received at the commencement date of the lease term discounted at the interest rate embeddedin the lease), and interest income is recognized over the lease term calculated at a constant periodic rate. Variable lease paymentsobtained by the Group that are not included in the measurement of the net investment in leases are recognized in profit or loss whenthey are actually incurred.
37. Specific reserve
According to the relevant regulations of the Ministry of Finance and the Ministry of Emergency Management, the Group accruesspecific reserve for production safety. The specific reserve is mainly used for safety expenditure in the process of production andoperation.The provision for specific reserve is recognized as relevant cost or profit or loss for the current period, and it is also included in specificreserve. The specific reserve is written down when withdrawal of safety fund is of expense expenditure. If it is capital expenditure, theexpenditure incurred is recorded in construction in progress and recognized as fixed assets when the project is completed and is readyfor the intended use, and meanwhile, specific reserve is written down at the cost of the fixed assets and accumulated depreciation isrecognized at the same amount. Consequently, such fixed assets are not depreciated in subsequent periods.
38. Other significant accounting policies and accounting estimates
While using accounting policies, due to the uncertainty in operating activities, the Group needs to make judgment, estimates andassumptions on the book value of accounts which cannot be measured accurately. The judgment, estimates and assumptions are madebased on the historical experience of the Group's management and other factors that are considered to be relevant. The judgments,estimates and assumptions would affect the reported amounts of incomes, expenses, assets and liabilities, as well as the disclosure ofcontingent liabilities at the balance sheet date. However, the actual results from the uncertainty in the estimates may differ from thecurrent estimates made by the Group's management, subject to further significant adjustments to the carrying amounts of the affectedassets or liabilities.The above judgments, estimates and assumptions will be reviewed periodically by the Group on the going-concern basis. If a changein accounting estimates only affects the period in which the change occurs, the affected amount will be recognized in the period inwhich the change occurs. If the change affects both the period in which the change occurs and future periods, the affected amount willbe recognized in the period in which the change occurs.At the balance sheet date, the major fields in which the Group is required to make the judgments, estimates and assumptions on theamounts in the financial statements are shown below:
(1) Revenue recognition
As stated in this Note V. 32. '' Revenue '', the Group's revenue recognition involves the following significant accounting judgments andestimates: identification of client contracts; estimation of the recoverability of the considerations enjoyed due to the transfer of goodsto clients; identification of performance obligations in contracts; estimation of the variable consideration in a contract and the amountof accumulated recognized revenue that is unlikely to be significantly reversed when the relevant uncertainty is eliminated; whetherthere is material financing component in a contract; estimation of separate selling prices of individual performance obligations in acontract; determination on whether the performance obligation shall be performed in a time span or at a point of time; and determinationof performance progress.The Group makes judgments based on historical experience and practices, and major changes in judgments and estimates would haveimpact (and even significant impact) on the change of operating revenue, operating cost, and profit and loss during the current or futureperiods.
(2) Lease
① Identification of a lease
While identifying that a contract is or contains a lease, the Group needs to assess whether there is an identified asset and the client hasthe right to use the asset for a certain period. During assessment, the Group shall consider the nature or substantial replacement of theasset, and whether the client has the right to obtain almost all economic benefits arising from the use of the asset during the period andcan control the use of the asset.
② Classification of a lease
The Group as the lessor classifies leases into operating leases and financing leases. In the classification process, the management needsto make appropriate analysis and judgment on whether all risks and rewards related to the ownership of leased assets have beensubstantially transferred to the lessee.
③ Lease liabilities
The Group, as a lessee, initially measures the lease liabilities at the present value of lease payments that are unpaid at the leasecommencement date. For measuring the present value of the lease payment, the Group estimates the discounting rate in use and thelease term of the lease contract with an option of renewal or termination. For assessing the lease term, the Group considers all the factsand circumstances related to the economic benefits brought by the exercise of the option by the Group, including expected changes inthe facts and circumstances from the lease commencement date to the option exercise date. Different judgments and estimates wouldaffect the recognition of lease liabilities and right-of-use assets and further affect the profit or loss of subsequent periods.
(3) Impairment of financial assets
The Group assesses impairments of financial instruments using the expected credit loss model, where the Group is required to makesignificant judgments and estimates, as well as consider all reasonable and evidence-based information, including forward-lookinginformation. In making the judgments and estimates, the Group predicts expected changes in debtor's credit risk based on historicaldata, as well as economic policies, macroeconomic indicators, industry risks, external market conditions, technical conditions, changesin client conditions and other factors.
(4) Provisions for the decline in value of inventories
Under accounting policies for inventories, the Group measures inventories according to the lower of cost and net realizable value. Forthe inventories with cost higher than net realizable value as well as obsolete and unsalable inventories, the Group calculates provisionsfor the impairment of inventories. The inventories are impaired to their net reliable value, depending on the assessment of salability ofinventories and their net realizable value. To identify inventory impairment, the management is required to make judgments andestimates after obtaining conclusive evidence, as well as considering the purpose of inventories held, the impact of events occurringafter the balance sheet date and other factors. Any difference between actual results and prior estimates will, in the period when relevantestimates are changed, affect the carrying amount of inventories and the provision for inventory impairment or reversal thereof.
(5) Fair value of financial instruments
If there is no financial instrument in an active trading market, its fair value is determined by the Group through various valuationmethods. The valuation techniques include disclosed cash flow modeling, etc. In the valuation process, the Group needs to estimatefuture cash flow, credit risk, market volatility and correlation, etc. and choose an appropriate discounting rate. These relevantassumptions are uncertain, and their changes would affect the fair value of financial instruments. For equity instrument investments orcontracts with public quotes, the Group will not regard costs as the best fair value estimate.
(6) Impairment provision for long-term assets
For non-current assets other than financial assets, the Group will, at the balance sheet date, judges whether there is an indication ofimpairment. For intangible assets with an uncertain useful life, the impairment test will be carried out annually and when there is anindication of impairment. The impairment test will be carried out for non-current assets other than financial assets, when there is anindication that the carrying amount cannot be recovered.When the book value of an asset or group of assets is higher than the recoverable amount, the higher of the net of the fair value lessdisposal costs and the present value of estimated future cash flows represents the impairment.The net of the fair value less disposal costs is determined by the sales agreement price or observable market price of similar assets infair trade reduced by incremental costs directly attributable to the disposal of the asset.Important judgments shall be made on the output, selling price, related operating costs and discount rate used in calculating presentvalue of the asset (or a group of assets) in estimation of present value of future cash flows. When estimating the recoverable amount,the Group uses all relevant information available, including the output, selling price and related operating costs predicted on the basisof reasonable and evidence-based assumptions.The Group tests whether goodwill is impaired at least annually. This requires estimating the present value of future cash flows of anasset group or combination of asset groups to which goodwill has been allocated. When estimating the present value of future cashflows, the Group needs to predict cash flows generating from an asset group or combination of asset groups in the future, and choosesan appropriate discount rate to determine the present value of future cash flows.
(7) Depreciation and amortization
The Group depreciates and amortizes investment properties, fixed assets and intangible assets over their respective useful life, usingthe straight-line method, with their respective residual value taken into account. The Group periodically reviews the useful life of assetsto determine the amounts of depreciation and amortization expenses for each reporting period. The useful life is determined by the
Group based on its historic experience acquired on similar assets and expected technical development. For significant changes in priorestimates, depreciation and amortization expenses will be adjusted in the coming periods.
(8) Development costs
When determining capitalized amounts, the Group's management needs to assume estimated future cash flows, appropriate discountrates and expected return periods of relevant assets.The Group's management believes that the products with its self-developed proprietary technology have a broad market and goodprospects, and the market reaction to the products produced with these intangible assets also supports the management's pre-estimatedincome arising from the project. However, the increasing competition makes the management reconsider the assumptions about marketshare and estimated gross profits of the products. After a thorough review, the Group's management believes that the book value ofintellectual properties can be fully recovered notwithstanding a lowered rate of return of the products. The Group will continue to keepclose attention on relevant developments. Once there is an indication that it is necessary to adjust the assumptions of relevant accountingestimates, the Group will make adjustment in the period when that indication appears.
(9) Deferred tax assets
To the extent that it is likely that there will be sufficient taxable profits to cover the losses, the Group recognizes deferred tax assets forall unused tax losses. In this case, the Group's management shall make important judgments to estimate the time and amount of futuretaxable profits and, by taking into account of its tax plan, to determine the amount of deferred tax assets that should be recognized.
(10) Income tax
In normal operating activities of the Group, there are some transactions with certain uncertainties in final tax treatment and calculation.Tax deductible expenses for some items are subject to review and approval by tax authority. Any difference between final results andinitially estimated amounts due to these tax matters exerts impact on income taxes and deferred taxes of the period when the finalresults are determined.
39. Changes in significant accounting policies and accounting estimates
(1) Important changes in accounting policy
? Applicable ? Not applicable
Unit: RMB
Contents and causes of changes in accounting policy | Statement items significantly affected | Impact amount |
On November 30, 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business Enterprises (Finance and Accounting [2022] No. 31) ("the Interpretation"). The Interpretation stipulates that "deferred income taxes related to assets and liabilities arising from individual transactions are not applicable to initial recognition exemption", and this would become effective on January 1, 2023. | Deferred income tax assets, deferred income tax liabilities, undistributed profits, and minority interests | See the Note V. 39. (3) for more details. |
(2) Changes in significant accounting estimates
? Applicable ? Not applicable
(3) Status of financial statement adjustments as of the beginning of the year of first-time implementation of the newaccounting standards starting from 2023? Applicable ? Not applicableAdjustment descriptionOn November 30, 2022, the Ministry of Finance issued the Interpretation No. 16 of the Accounting Standards for Business Enterprises(Finance and Accounting [2022] No. 31) ("the Interpretation"). The Interpretation stipulates that "deferred income taxes related toassets and liabilities arising from individual transactions are not applicable to initial recognition exemption", and this would becomeeffective on January 1, 2023.For lease liabilities and right-of-use assets recognized at the beginning of the earliest period for the presentation of financial statementsin which this Interpretation is first applied as a result of a single transaction to which this Interpretation applies and which give rise to
a taxable temporary difference and a deductible temporary difference, the Company shall, in accordance with the Interpretation andThe Accounting Standards for Business Enterprises No. 18 - Income Taxes, adjust the cumulative effect to retained earnings as well asto other relevant financial statement items at the beginning of the earliest period for the presentation of the financial statements. As theInterpretation has not resulted in material impact on the Company's financial statements, no retrospective adjustments have been madeto prior years' financial statements.The effect of the above changes in accounting policies on the financial statements as of January 1, 2023 is presented below:
Consolidated balance sheet
Item | December 31, 2022 | January 1, 2023 | Adjustments |
Deferred tax assets | 1,369,530,623.51 | 1,461,726,750.47 | 92,196,126.96 |
Deferred tax liabilities | 816,118,632.40 | 906,537,829.44 | 90,419,197.04 |
Undistributed profits | 16,507,798,239.34 | 16,509,551,595.59 | 1,753,356.25 |
Minority interests | 765,942,754.69 | 765,966,328.36 | 23,573.67 |
Company balance sheet
Item | December 31, 2022 | January 1, 2023 | Adjustments |
Deferred tax assets | 788,677,414.86 | 830,807,911.11 | 42,130,496.25 |
Deferred tax liabilities | 536,571,810.07 | 578,621,000.58 | 42,049,190.51 |
Undistributed profits | 9,410,101,500.47 | 9,410,182,806.21 | 81,305.74 |
40. Others
None
VI. Taxable Items
1. Major tax types and rates
Tax types | Taxation basis | Tax rate |
VAT | Output taxes on taxable income shall be calculated at the rate of 13%, 9% and 6%, and value added taxes are calculated and paid according to the difference resulting from the deduction of the allowed deductible input tax in the period. | 13%, 9%, 6% |
City maintenance and construction tax | 7% and 5% of actually-paid turnover tax | 7%、5% |
Enterprise income tax | 15% or 25%, for overseas subsidiaries, the tax shall be paid according to the statutory tax rate of the country or region where it is located. | 25%、15% |
Education surcharge | 3% of the amount of actually-paid turnover tax | 3% |
Local education surcharges | 2% of the amount of actually-paid turnover tax | 2% |
Disclose the specific information in the case of tax payers with different tax rates of enterprise income tax
Name of taxpayer | Rate of income tax |
Goertek Inc. | 15% |
Weifang Goertek Electronics Co., Ltd. | 15% |
Goertek Microelectronics Inc. | 15% |
Qingdao Goertek Microelectronics Research Institute Co., Ltd. | 25% |
Qingdao Goertek Intelligent Sensor Co., Ltd. | 25% |
Weifang Goertek Microelectronics Co., Ltd. | 15% |
Rongcheng Goertek Microelectronics Co., Ltd. | 15% |
Beijing Goertek Microelectronics Co., Ltd. | 25% |
Name of taxpayer | Rate of income tax |
Shenzhen Goertek Microelectronics Co., Ltd. | 5% |
Wuxi Goertek Microelectronics Co., Ltd. | 25% |
Shanghai Goertek Microelectronics Co., Ltd. | 25% |
Goertek Microelectronics Holdings Co., Ltd. | 16.5% |
Goertek Microelectronics (Hong Kong) Co., Ltd. | 16.5% |
GOERTEK MICROELECTRONICS CORPORATION | The federal tax rate for enterprise income tax is 21%, and the local enterprise income tax rate in California is 8.84%. |
GOERTEK MICROELECTRONICS KOREA Co., LTD. | Corporation tax: Tax rate shall be 9% if the income is less than KRW 200 million; 19% if the income is KRW 200 million-20 billion; 21% if the income is KRW 20 billion-300 billion; and 24% if the income is more than KRW 300 billion. local corporation tax: 10% of taxable income |
Goertek Microelectronics Vietnam Company Limited | 20% |
GMI Technology GmbH | 24% |
Weifang Goertek Trading Co., Ltd. | 25% |
Yishui Goertek Electronics Co., Ltd. | 25% |
Yili Precision Manufacturing Co., Ltd. | 15% |
Weifang Goertek Communication Technology Co., Ltd. | 25% |
Goertek Optical Technology Co., Ltd | 15% |
Goertek Optical Technology (Qingdao) Co., Ltd | 25% |
Goertek Optical Technology (Shanghai) Co., Ltd | 25% |
Uphoton Technology (Shaoxing) Co., Ltd. | 25% |
Uphoton Technology (Beijing) Co., Ltd. | 25% |
Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | 15% |
Shaoxing Uphoton Precision Technology Co., Ltd. | 25% |
Hangzhou Uphoton Optoelectronics Technology Co., Ltd. | 25% |
Tianjin Uphoton Technology Co., Ltd. | 25% |
Nanjing Uphoton Technology Co., Ltd. | 25% |
Hefei 3D OptoLink Technology Co., Ltd. | 25% |
Jiaxing Guochao Optoelectronics Technology Co.,Ltd. | 25% |
Goertek Technology Co., Ltd. | 15% |
Beijing Goertek Technology Co., Ltd. | 15% |
Qingdao Goertek Acoustics Technology Co., Ltd. | 25% |
Shenzhen Goertek Technology Co., Ltd. | 15% |
Shanghai Goertek Technology Co., Ltd. | 25% |
Nanjing Goertek Technology Co., Ltd. | 25% |
Weifang Lokomo Precision Industry Co., Ltd. | 15% |
Goertek Investment Co., Ltd. | 25% |
Beijing Goertek Investment Management Co., Ltd. | 25% |
Olive Smart Hardware Investment Center LP | -- |
Dongguan JoyForce Precision Manufacturing Co., Ltd. | 15% |
Goertek Intelligence Technology Co., Ltd. | 15% |
Rongcheng Goertek Technology Co., Ltd. | 25% |
Qingdao Goertek Commercial Factoring Co., Ltd. | 25% |
Name of taxpayer | Rate of income tax |
Nanning Goertek Electronics Co., Ltd | 25% |
Nanning Goertek Trading Co., Ltd. | 25% |
Xi'an Goertek Electronic Technology Co., Ltd. | 15% |
Yishui TECO Electronic Technology Co., Ltd. | 25% |
Qingdao Resonance Phase I Venture Capital Fund Partnership (Limited Partnership) | -- |
Weifang Goertek Electronics Co., Ltd. | 25% |
Qingdao Goertek Horizons Technology Co., Ltd | 25% |
Weifang High-tech Zone Goertek Education Center | 25% |
Chongqing Goertek Auto Technology Co., Ltd. | 25% |
Goertek Vina Co., Ltd | 20% |
Goertek Technology Korea Co., Ltd. | Corporation tax: Tax rate shall be 9% if the income is less than KRW 200 million; 19% if the income is KRW 200 million-20 billion; 21% if the income is KRW 20 billion-300 billion; and 24% if the income is more than KRW 300 billion. local corporation tax: 10% of taxable income |
Goertek (HongKong) Co., Limited | The tax rate of 8.25% is applied to the taxable profit which does not exceed HKD 2,000,000, and the tax rate of 16.5% is applied to the part of taxable profit which exceeds HKD 2,000,000. |
Goertek Technology Vina Company Limited | 20% |
Goertek Precision Industry Vietnam Company Limited | 20% |
Goertek Smart Technology Vina Co.,Ltd. | 20% |
Goertek Europe ApS | 22% |
Goertek Seiki Technology Co., Ltd. | Combined tax rate of 39.35% |
Optimas Capital Partners Fund LP | -- |
Goertek Electronics, Inc. | The federal tax rate for enterprise income tax is 21%, and the local enterprise income tax rate in California is 8.84%. |
Goertek Technology Taiwan Co., Ltd. | 20% |
Goertek Technology Japan Co., Ltd. | Combined tax rate of 38% |
Goertek Technology (Hong Kong) Co., Limited | 16.5% |
2. Tax incentives
(1) According to the Announcement on the Filing of the First Batch of High-tech Enterprises Identified and Reported by ShandongProvince's Identification Agency in 2023 issued by the Office of the Leading Group for the Recognition and Management of NationalHigh-tech Enterprises on December 18, 2023, the Company has been recognized as a high-tech enterprise for a three-year validityperiod, and the preferential period for corporate income tax is from January 1, 2023 to December 31, 2025. The corporate income taxrate of 15% applied to the Company for FY2023.
(2) According to the Announcement on the Filing of the Second Batch of High-tech Enterprises Identified and Reported by ShandongProvince's Identification Agency in 2023 issued by the Office of the Leading Group for the Recognition and Management of NationalHigh-tech Enterprises on December 28, 2023, the subsidiaries, namely Weifang Goertek Electronics Co., Ltd., Weifang GoertekMicroelectronics Co., Ltd. and Weifang Lokomo Precision Industry Co., Ltd., have been recognized as high-tech enterprises for athree-year validity period. The preferential period for corporate income tax is from January 1, 2023 to December 31, 2025. Thecorporate income tax rate of 15% applied to Weifang Goertek Electronics Co., Ltd., Weifang Goertek Microelectronics Co., Ltd. andWeifang Lokomo Precision Industry Co., Ltd. for FY2023.
(3) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Qingdao in 2022, issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on January 6, 2023, the subsidiary GoertekMicroelectronics Inc. has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential period for
enterprise income tax is from January 1, 2022 to December 31, 2024. The corporate income tax rate of 15% applied to GoertekMicroelectronics Inc. for FY2023.
(4) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shandong Province in 2022, issued by theOffice of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 4, 2023, two subsidiaries,Rongcheng Goertek Microelectronics Co., Ltd. and Yili Precision Manufacturing Co., Ltd., have been recognized as a high-techenterprise for a validity period of 3 years, and the preferential period for enterprise income tax is from January 1, 2022 to December31, 2024. The enterprise income tax rate of 15% applied to Rongcheng Goertek Microelectronics Co., Ltd. and Yili PrecisionManufacturing Co., Ltd. for year 2023.
(5) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shandong Province in 2021 issued by theOffice of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 4, 2022, a subsidiary,Goertek Optical Technology Co., Ltd, has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferentialperiod for enterprise income tax is from January 1, 2021 to December 31, 2023. The enterprise income tax rate of 15% applied to thesubsidiary, Goertek Optical Technology Co., Ltd, for year 2023.
(6) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shandong Province in 2021 issued by theOffice of Leading Group for the Recognition and Management of National High-Tech Enterprises on December 16, 2021, a subsidiary,Jiaxing Uphoton Optoelectronics Technology Co., Ltd, has been recognized as a high-tech enterprise for a validity period of 3 years,and its preferential period for enterprise income tax is from January 1, 2021 to December 31, 2023. The enterprise income tax rate of15% applied to the subsidiary, Jiaxing Uphoton Optoelectronics Technology Co., Ltd., for year 2023.
(7) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Qingdao in 2022 issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on December 14, 2022, Goertek TechnologyCo., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential period for enterprise incometax is from January 1, 2022 to December 31, 2024. The enterprise income tax rate of 15% applied to the subsidiary, Goertek TechnologyCo., Ltd., for year 2023.
(8) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Qingdao in 2023 issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on January 9, 2024, Beijing GoertekTechnology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential period forenterprise income tax is from January 1, 2023 to December 31, 2025. The enterprise income tax rate of 15% applies to the subsidiary,Beijing Goertek Technology Co., Ltd., for year 2023.
(9) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shenzhen in 2022 issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on December 19, 2022, a subsidiary, ShenzhenGoertek Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential periodfor enterprise income tax is from January 1, 2022 to December 31, 2024. The enterprise income tax rate of 15% applied to the subsidiary,Shenzhen Goertek Technology Co., Ltd., for year 2023.
(10) According to the Notice on Publishing the Filings of the Second Batch of High-Tech Enterprises in Guangdong Province in 2021issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on December 20, 2021,Dongguan JoyForce Precision Manufacturing Co., Ltd., a subsidiary of the Company, has been recognized as a high-tech enterprisefor a validity period of 3 years, and its preferential period for enterprise income tax is from January 1, 2021 to December 31, 2023. Theenterprise income tax rate of 15% applies to the subsidiary, Dongguan JoyForce Precision Manufacturing Co., Ltd. for year 2023.
(11) According to the Announcement on Filing the Second Batch of High-Tech Enterprises in Guangdong Province in 2022 issued bythe Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on December 22, 2022, GoertekIntelligence Technology Co., Ltd., a subsidiary of the Company, has been recognized as a high-tech enterprise for a validity period of3 years, and its preferential period for enterprise income tax is from January 1, 2022 to December 31, 2024. The enterprise income taxrate of 15% applied to the subsidiary, Goertek Intelligence Technology Co., Ltd., for year 2023.
(12) According to the Announcement of the Ministry of Finance, the State Taxation Administration, and the National Developmentand Reform Commission on the Continuation of the Corporate Income Tax Policies for the Development of the Western Region(Announcement of the Ministry of Finance, the State Taxation Administration, and the National Development and Reform Commission[2020] No. 23) issued on April 23, 2020, the tax rate for enterprises in the encouraged category based in the western region will bereduced to 15% starting from January 1, 2021 to December 31, 2030. The enterprise income tax rate of 15% applied to the subsidiary,Xi'an Goertek Electronic Technology Co., Ltd., for year 2023.
(13) The subsidiary, Goertek (HongKong) Co., Limited, is a qualified entity under the two-tier profits tax system and its taxable profitsare subject to a tax rate of 8.25% on the portion up to HKD 2,000,000 and 16.5% on the portion in excess of HKD 2,000,000.
(14) According to the Announcement of the Ministry of Finance and the State Taxation Administration on Tax Policies Relating toFurther Supporting the Development of Micro and Small Enterprises and Individual Entrepreneurs (Announcement of the Ministry ofFinance and the State Taxation Administration No. 12 of 2023), from January 1, 2023, to December 31, 2027, for small and micro-profit enterprises, the portion of their annual taxable income that is not more than RMB 3 million shall be deducted to 25% of theirtaxable income, subject to a 20% corporate income tax. The subsidiary, Shenzhen Goertek Microelectronics Co., Ltd., is eligible forthe above tax incentives and implemented an effective enterprise income tax rate of 5% in 2023.
(15) According to the laws of Vietnam, GOERTEK MICROELECTRONICS VIETNAM COMPANY LIMITED and Goertek SmartTechnology Vina Co.,Ltd., subsidiaries of the Company, enjoy tax exemption for 4 years and a 50% reduction of payable tax amountsfor 9 subsequent years. The preferential CIT rate is 10% for 15 years from the first year of income generation. At the same time, startingfrom the first profitable year (after making up for the losses of previous years), the first to fourth years are exempt from corporateincome tax, and the fifth to thirteenth years are subject to a 50% reduction in corporate income tax. If the enterprise has no taxableprofit within three years from the start of tax incentive activities, the tax holiday and tax reduction period will be calculated from thefourth year of operation. The subsidiary is exempt from corporate income tax in 2023.
3. Others
NoneVII. Notes to consolidated financial statements
1. Cash at bank and on hand
Unit: RMB
Item | Closing balance | Opening balance |
Cash on hand | 60,959.92 | 33,671.21 |
Bank deposits | 13,158,606,545.21 | 11,290,088,881.75 |
Other monetary funds | 1,578,644,824.58 | 1,392,748,538.84 |
Total | 14,737,312,329.71 | 12,682,871,091.80 |
Including: Total amounts deposited abroad | 1,235,686,922.34 | 1,370,158,074.20 |
Other explanations:
Other monetary funds at the end of the period consisted primarily of notes, bonds, letter of credit deposits and funds deposited in theCompany's securities account.
2. Financial assets held for trading
Unit: RMB
Item | Closing balance | Opening balance |
Financial assets at fair value through profit and loss | 587,445,091.69 | 338,662,097.66 |
Including: | ||
Investments in equity instruments | 480,161,497.26 | 152,722,198.06 |
Derivative financial assets | 104,229,894.43 | 185,939,899.60 |
Investment in debt instruments | 3,053,700.00 | |
Total | 587,445,091.69 | 338,662,097.66 |
3. Notes receivable
(1) Notes receivable listed by classification
Unit: RMB
Item | Closing balance | Opening balance |
Bank acceptance notes | 139,468,321.29 | 25,847,492.24 |
Item | Closing balance | Opening balance |
Total | 139,468,321.29 | 25,847,492.24 |
(2) Disclosure by method of bad debt accrual
Unit: RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
Notes receivable with bad debt provision by group | 139,468,321.29 | 100.00% | 139,468,321.29 | 25,847,492.24 | 100.00% | 25,847,492.24 | ||||
Including: | ||||||||||
Bank acceptance notes | 139,468,321.29 | 100.00% | 139,468,321.29 | 25,847,492.24 | 100.00% | 25,847,492.24 | ||||
Total | 139,468,321.29 | 100.00% | 139,468,321.29 | 25,847,492.24 | 100.00% | 25,847,492.24 |
Bad-debt provision by portfolio: Bank acceptance notes
Unit: RMB
Name | Closing balance | ||
Book balance | Bad-debt provision | Proportion of accrual | |
Bank acceptance notes | 139,468,321.29 | 0.00 | 0.00% |
Total | 139,468,321.29 | 0.00 |
Description for basis of determining the group:
Please see Note V.12. "Impairment of Financial Assets" for more details.If the bad-debt provision for notes receivable is based on the general model of expected credit losses:
? Applicable ? Not applicable
(3) Accrual, recovery or reversal of bad debt provision in current period
None
(4) Notes receivable pledged at the end of the period
Unit: RMB
Item | Amount pledged at the end of the period |
Bank acceptance notes | 866,907.031 |
Total | 866,907.03 |
Note: 1 The amount of note pledge arises from splitting a large-denomination note into multiple smaller-denomination bankacceptances.
(5) Notes receivable endorsed or discounted by the Group at the end of the period and not yet due on thebalance sheet date
Unit: RMB
Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
Bank acceptance notes | 100,000,000.00 | |
Total | 100,000,000.00 |
(6) Notes converted to accounts receivable at the end of the period due to non-performance of the drawerNone
(7) Notes receivable actually written off in the current period
None
4. Accounts receivable
(1) Disclosed by age of accounts receivable
Unit: RMB
Aging | Closing book balance | Opening book balance |
Within 1 year (including 1 year) | 12,543,107,806.98 | 14,532,856,996.39 |
1 to 2 years | 4,839,100.06 | 10,227,450.14 |
2 to 3 years | 6,516,243.34 | 638,249.98 |
Over 3 years | 1,281,318.57 | 1,471,433.27 |
3 to 4 years | 470,416.03 | 1,397,650.48 |
4 to 5 years | 643,084.98 | 0.00 |
Over 5 years | 167,817.56 | 73,782.79 |
Total | 12,555,744,468.95 | 14,545,194,129.78 |
(2) Disclosure by method of bad debt accrual
Unit: RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
Accounts receivable with bad debts provision by group | 12,555,744,468.95 | 100.00% | 131,125,792.14 | 1.04% | 12,424,618,676.81 | 14,545,194,129.78 | 100.00% | 149,013,346.85 | 1.02% | 14,396,180,782.93 |
Including: | ||||||||||
Accounts receivable aging group | 12,496,453,228.93 | 99.53% | 130,829,335.94 | 1.05% | 12,365,623,892.99 | 14,310,390,851.16 | 98.39% | 147,839,330.46 | 1.03% | 14,162,551,520.70 |
Factoring receivables group | 59,291,240.02 | 0.47% | 296,456.20 | 0.50% | 58,994,783.82 | 234,803,278.62 | 1.61% | 1,174,016.39 | 0.50% | 233,629,262.23 |
Total | 12,555,744,468.95 | 100.00% | 131,125,792.14 | 1.04% | 12,424,618,676.81 | 14,545,194,129.78 | 100.00% | 149,013,346.85 | 1.02% | 14,396,180,782.93 |
Bad debt provision on a group basis: Accounts receivable aging group
Unit: RMB
Name | Closing balance | ||
Book balance | Bad-debt provision | Proportion of accrual | |
Within 1 year | 12,483,816,566.96 | 124,838,165.68 | 1.00% |
1 to 2 years | 4,839,100.06 | 1,451,730.02 | 30.00% |
2 to 3 years | 6,516,243.34 | 3,258,121.67 | 50.00% |
Over 3 years | 1,281,318.57 | 1,281,318.57 | 100.00% |
Total | 12,496,453,228.93 | 130,829,335.94 |
Description for basis of determining the group:
Please see Note V.12. "Impairment of Financial Assets".
Provision for bad debts by group: portfolio of factoring receivables
Unit: RMB
Name | Closing balance | ||
Book balance | Bad-debt provision | Proportion of accrual | |
Undue | 59,291,240.02 | 296,456.20 | 0.50% |
Overdue 1-90 days | |||
Overdue 91-180 days | |||
Overdue 181-360 days | |||
Overdue more than 360 days | |||
Total | 59,291,240.02 | 296,456.20 |
Description for basis of determining the group:
Please see Note V.12. "Impairment of Financial Assets".If the bad-debt provision for accounts receivable is made in accordance with the general model of expected credit losses:
? Applicable ? Not applicable
(3) Accrual, recovery or reversal of bad debt provision in current period
Provision for bad debts of the current period:
Unit: RMB
Category | Opening balance | Changes in amount of the current period | Closing balance | |||
Accrual | Recovery or reversal | Write-off | Other | |||
Accounts receivable aging group | 147,839,330.46 | -18,543,124.53 | -1,533,130.01 | 130,829,335.94 | ||
Factoring receivables group | 1,174,016.39 | -877,560.19 | 296,456.20 | |||
Total | 149,013,346.85 | -19,420,684.72 | -1,533,130.01 | 131,125,792.14 |
Among them, significant information of bad debt provision withdrawn or written back in the current period:
NoneBad debt provision for factoring receivables accrued, reversed or recovered during the period
Bad-debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment has not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Opening balance | 1,174,016.39 | 1,174,016.39 | ||
Opening balance for the current period: | ||||
- Transferred to Stage 2 | ||||
- Transferred to Stage 3 | ||||
- Reversed to Stage 2 | ||||
- Reversed to Stage 1 | ||||
Accrual in the current period | -877,560.19 | -877,560.19 | ||
Reversal in the current period | ||||
Resale in the current period |
Bad-debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment has not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Written off in the current period | ||||
Other changes | ||||
Closing balance | 296,456.20 | 296,456.20 |
(4) Accounts receivable actually written off in current period
None
(5) Accounts receivable and contract assets with the top five closing balances by debtor
Unit: RMB
Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion of total closing balance of accounts receivable and contract assets | Closing balance of bad-debt provision for accounts receivable and provision for impairment of contract assets |
Company 1 | 4,034,105,962.28 | 4,034,105,962.28 | 32.13% | 40,341,059.62 | |
Company 2 | 2,724,413,747.66 | 2,724,413,747.66 | 21.70% | 27,244,137.48 | |
Company 3 | 1,145,816,845.87 | 1,145,816,845.87 | 9.13% | 11,458,168.46 | |
Company 4 | 935,170,577.92 | 935,170,577.92 | 7.45% | 9,351,705.78 | |
Company 5 | 778,536,665.92 | 778,536,665.92 | 6.20% | 7,785,366.66 | |
Total | 9,618,043,799.65 | 9,618,043,799.65 | 76.61% | 96,180,438.00 |
5. Financing receivables
(1) Presentation of receivables financing by category
Unit: RMB
Item | Closing balance | Opening balance |
Notes receivable | 9,059,230.11 | 22,375,874.12 |
Total | 9,059,230.11 | 22,375,874.12 |
(2) Disclosure by method of bad debt accrual
Unit: RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
Bad debts provision by group | 9,059,230.11 | 100.00% | 9,059,230.11 | 22,375,874.12 | 100.00% | 22,375,874.12 | ||||
Including: | ||||||||||
Bank | 9,059,230.11 | 100.00% | 9,059,230.11 | 22,375,874.12 | 100.00% | 22,375,874.12 |
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
acceptance notes | ||||||||||
Total | 9,059,230.11 | 100.00% | 9,059,230.11 | 22,375,874.12 | 100.00% | 22,375,874.12 |
Bad-debt provision by portfolio: Bank acceptance notes
Unit: RMB
Name | Closing balance | ||
Book balance | Bad-debt provision | Proportion of accrual | |
Bank acceptance notes | 9,059,230.11 | 0.00% | |
Total | 9,059,230.11 |
Description for basis of determining the group:
Please see Note V.12. "Impairment of Financial Assets".Bad-debt provision is made based on the general model of expected credit losses.None
(3) Accrual, recovery or reversal of bad-debt provisions in the current periodNone
(4) Receivables financing pledged by the Company at the end of the period
None
(5) Receivables financing that the Company has endorsed or discounted at the end of the period and is notyet due at the balance sheet date
Unit: RMB
Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
Notes receivable | 1,509,375.671 | |
Total | 1,509,375.67 |
Note: 1 represents bank acceptance notes
(6) Receivables financing actually written off in the current period
None
(7) Changes in receivables financing and fair value in the current period
Please see Section III. VI. 2. "Assets and Liabilities Measured at Fair Value".
(8) Explanation of other matters:
None
6. Other receivables
Unit: RMB
Item | Closing balance | Opening balance |
Other receivables | 89,261,417.90 | 96,442,803.18 |
Item | Closing balance | Opening balance |
Total | 89,261,417.90 | 96,442,803.18 |
(1) Interest receivable
None
(2) Dividends receivable
None
(3) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
Nature of payment | Closing book balance | Opening book balance |
Tax refund for export receivable | 1,541,663.86 | |
Security deposit | 49,771,093.46 | 56,247,217.13 |
Current account | 14,229,621.87 | 9,261,136.47 |
Withholding and remitting social insurance and housing provident fund | 51,391,844.67 | 53,852,019.34 |
Other | 578,282.97 | 572,915.09 |
Total | 115,970,842.97 | 121,474,951.89 |
2) Disclosed by age of other receivable
Unit: RMB
Aging | Closing book balance | Opening book balance |
Within 1 year (including 1 year) | 80,649,301.96 | 84,047,670.81 |
1 to 2 years | 10,178,400.76 | 10,851,113.92 |
2 to 3 years | 5,017,037.63 | 11,279,658.86 |
Over 3 years | 20,126,102.62 | 15,296,508.30 |
3 to 4 years | 10,157,378.27 | 3,010,094.34 |
4 to 5 years | 782,527.91 | 6,358,648.54 |
Over 5 years | 9,186,196.44 | 5,927,765.42 |
Total | 115,970,842.97 | 121,474,951.89 |
3) Disclosure by method of bad debt accrual
? Applicable ? Not applicable
4) Provision for bad debts
Bad-debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit impaired) | Lifetime expected credit loss (credit impaired) | ||
Opening balance | 24,697,356.80 | 334,791.91 | 25,032,148.71 | |
Opening balance for the current period: |
Bad-debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit impaired) | Lifetime expected credit loss (credit impaired) | ||
- Transferred to Stage 2 | ||||
- Transferred to Stage 3 | -299,401.17 | 299,401.17 | ||
- Reversed to Stage 2 | ||||
- Reversed to Stage 1 | ||||
Accrual in the current period | 1,784,803.76 | 240,814.90 | 2,025,618.66 | |
Current reversal | ||||
Current resale | ||||
Amount written off in the current period | 375,196.63 | 375,196.63 | ||
Other changes | -25,005.68 | -1,848.65 | -26,854.33 | |
Closing balance | 26,207,765.07 | 501,660.00 | 26,709,425.07 |
5) Accrual, recovery or reversal of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
Category | Opening balance | Changes in amount of the current period | Closing balance | |||
Accrual | recovery or reversal | Resale or write-off | Other | |||
Bad debts provision by group | 25,032,148.71 | 2,025,618.66 | 375,196.63 | -26,854.33 | 26,709,425.07 | |
Total | 25,032,148.71 | 2,025,618.66 | 375,196.63 | -26,854.33 | 26,709,425.07 |
Among them, significant amount in bad debt provision written back or withdrawn in the current period:
None
6) Other receivables actually written off in the current period
Unit: RMB
Item | Written off amount |
Other receivables actually written off | 375,196.63 |
Among them, write-off of other significant receivables:
None
7) Other receivables of the 5 highest closing balance by debtor
Unit: RMB
Company name | Nature of payment | Closing balance | Aging | Ratio in the total closing balance of other receivables | Closing balance of bad debt provision |
Company 1 | Withholding and remitting social insurance and housing provident fund | 51,391,844.67 | Within 1 year | 44.31% | 513,918.45 |
Company 2 | Current account | 9,574,815.14 | Within 1 year | 8.26% | 95,748.15 |
Company 3 | Deposit | 6,254,993.44 | Over 3 years | 5.39% | 6,254,993.44 |
Company 4 | Deposit | 6,152,865.94 | Over 3 years | 5.31% | 6,152,865.94 |
Company 5 | Security deposit | 3,000,000.00 | 1 to 2 years | 2.59% | 900,000.00 |
Total | 76,374,519.19 | 65.86% | 13,917,525.98 |
8) Presented in other receivables due to centralized management of funds
None
9) Other receivables involving government grants
None
7. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: RMB
Aging | Closing balance | Opening balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 253,097,169.07 | 99.40% | 50,645,746.34 | 99.98% |
1 to 2 years | 850,916.46 | 0.33% | 10,407.09 | 0.02% |
2 to 3 years | 605,114.54 | 0.24% | ||
Over 3 years | 80,600.00 | 0.03% | ||
Total | 254,633,800.07 | 50,656,153.43 |
Explanation of reasons why advances to suppliers aged more than 1 year with significant amount are not settled in time:
None
(2) Advance payment in the five highest closing balance by seller
Company name | Book balance | Percentage of total balance of prepayment (%) |
Company 1 | 182,216,772.84 | 71.56 |
Company 2 | 11,314,216.62 | 4.44 |
Company 3 | 9,107,519.13 | 3.58 |
Company 4 | 7,455,062.25 | 2.93 |
Company 5 | 5,079,901.43 | 1.99 |
Total | 215,173,472.27 | 84.50 |
8. Inventories
Whether the Company needs to comply with disclosure requirements of real estate industryNo
(1) Inventory classification
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Inventory provision or provision for impairment of contract performance cost | Book value | Book balance | Inventory provision or provision for impairment of contract performance cost | Book value | |
Raw materials | 5,294,238,418.73 | 126,412,070.17 | 5,167,826,348.56 | 6,446,001,906.31 | 258,676,409.56 | 6,187,325,496.75 |
Products in progress | 1,175,295,870.64 | 3,985,092.59 | 1,171,310,778.05 | 2,676,387,256.76 | 565,750,473.85 | 2,110,636,782.91 |
Goods in stock | 4,120,631,607.08 | 82,093,360.33 | 4,038,538,246.75 | 8,733,573,211.28 | 246,557,267.39 | 8,487,015,943.89 |
Revolving materials | 417,219,021.06 | 417,219,021.06 | 563,692,521.03 | 563,692,521.03 | ||
Total | 11,007,384,917.51 | 212,490,523.09 | 10,794,894,394.42 | 18,419,654,895.38 | 1,070,984,150.80 | 17,348,670,744.58 |
(2) Inventory provision or provision for impairment of contract performance cost
Unit: RMB
Item | Opening balance | Increased amount in the current period | Decreased amount in the current period | Closing balance | ||
Accrual | Other | Write-back or resale | Other | |||
Raw materials | 258,676,409.56 | 279,268,684.21 | 410,931,433.70 | 601,589.90 | 126,412,070.17 | |
Products in progress | 565,750,473.85 | 13,898,901.19 | 575,739,019.04 | -74,736.59 | 3,985,092.59 | |
Goods in stock | 246,557,267.39 | 119,697,494.76 | 284,501,456.95 | -340,055.13 | 82,093,360.33 | |
Total | 1,070,984,150.80 | 412,865,080.16 | 1,271,171,909.69 | 186,798.18 | 212,490,523.09 |
Provision for inventory falling price by portfolio
Unit: RMB
Portfolio name | End of the period | Beginning of the period | ||||
Closing balance | Provision | Provision ratio | Opening balance | Provision | Provision ratio | |
Aging portfolio | 8,999,461,128.51 | 145,516,023.37 | 1.62% | 15,450,873,908.55 | 145,610,260.60 | 0.94% |
Total | 8,999,461,128.51 | 145,516,023.37 | 1.62% | 15,450,873,908.55 | 145,610,260.60 | 0.94% |
Criteria for making provision for inventories by portfolioPlease see Note V. 18. (3) for the criteria for making provision for inventories by aging portfolio.Note: The Company's individual provisions for inventories are as follows: Closing book balance of RMB 2,007,923,789.00, provisionfor inventory of RMB 66,974,499.72; Opening book balance of RMB 2,968,780,986.83, provision for inventory of RMB925,373,890.20.
(3) Explanation of the closing balance of inventory containing the capitalized amount of borrowing costsThe closing balance of inventory contains no capitalized borrowing costs.
(4) Explanation of amortization amount of contract performance cost in current period
None
9. Current portion of non-current assets
Unit: RMB
Item | Closing balance | Opening balance |
Current portion of non-current assets | 494,634,708.33 | 70,302,566.25 |
Total | 494,634,708.33 | 70,302,566.25 |
(1) Debt investments maturing within one year
? Applicable ? Not applicable
(2) Other debt investments maturing within one year
? Applicable ? Not applicable
10. Other current assets
Unit: RMB
Item | Closing balance | Opening balance |
Input tax retained for VAT | 330,575,153.58 | 288,229,492.06 |
Input tax to be verified and to be deducted | 82,547,638.67 | 74,879,772.45 |
Advance payment of enterprise income tax | 81,283,426.42 | 152,235,755.00 |
Other | 15,427,845.82 | 15,646,416.05 |
Total | 509,834,064.49 | 530,991,435.56 |
11. Investments in other equity instruments
Unit: RMB
Name of project | Closing balance | Opening balance | Gains recognized in other comprehensive income in the current period | Losses recognized in other comprehensive income in the current period | Accumulated gains recognized in other comprehensive income at the end of the period | Accumulated losses recognized in other comprehensive income at the end of the period | Dividend income recognized in the current period | Reasons for designation of financial assets at fair value through other comprehensive income |
Investment projects of the Fund Company | 287,540,812.75 | 399,417,490.79 | 92,161,581.61 | 43,034,531.24 | Non-trading equity instrument | |||
Mobvoi Inc. | 141,654,000.00 | 139,292,000.00 | Non-trading equity instrument | |||||
Shenzhen New Radio Technology Co., Ltd. | 20,000,000.00 | 20,000,000.00 | Non-trading equity instrument | |||||
Nanjing Xinshijie Microelectronics Technology Co., Ltd. | 50,000,000.00 | 50,000,000.00 | Non-trading equity instrument | |||||
KOLMOSTAR (CAYMAN) LIMITED | 35,413,500.00 | 34,823,000.00 | Non-trading equity instrument | |||||
EMPOWER | 56,661,570.96 | 55,716,771.45 | Non-trading |
Name of project | Closing balance | Opening balance | Gains recognized in other comprehensive income in the current period | Losses recognized in other comprehensive income in the current period | Accumulated gains recognized in other comprehensive income at the end of the period | Accumulated losses recognized in other comprehensive income at the end of the period | Dividend income recognized in the current period | Reasons for designation of financial assets at fair value through other comprehensive income |
SEMICONDUCTOR, INC. | equity instrument | |||||||
Total | 591,269,883.71 | 699,249,262.24 | 92,161,581.61 | 43,034,531.24 |
Disclose investments in non-trading equity instruments of the period by item
Unit: RMB
Name of project | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive income transferred to undistributed profits | Reasons for designation of financial assets at fair value through other comprehensive income | Reasons for other comprehensive income transferred to undistributed profits |
Investment projects of the Fund Company | 43,034,531.24 | Non-trading equity instrument | ||||
Mobvoi Inc. | Non-trading equity instrument | |||||
Shenzhen New Radio Technology Co., Ltd. | Non-trading equity instrument | |||||
Nanjing Xinshijie Microelectronics Technology Co., Ltd. | Non-trading equity instrument | |||||
KOLMOSTAR (CAYMAN) LIMITED | Non-trading equity instrument | |||||
EMPOWER SEMICONDUCTOR, INC. | Non-trading equity instrument |
12. Long-term equity investments
Unit: RMB
Invested entity | Opening balance (book value) | Opening balance of provision for impairment | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||||||
Investment addition | Investment reduction | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared | Provision for impairment | Other | |||||
I. Joint Venture | ||||||||||||
II. Affiliated enterprises | ||||||||||||
Qingdao Virtual Reality Institute Co., Ltd. | 38,076,721.23 | -6,503,389.21 | 31,573,332.02 | |||||||||
Enkris Semiconductor Inc. | 130,626,786.73 | 1,077,993.66 | 7,069,667.85 | 138,774,448.24 | ||||||||
SeeYA Technology Corporation | 600,000,000.00 | -12,047,708.95 | -12,650.40 | 1,933,461.16 | 589,873,101.81 | |||||||
Uphoton Technology (Shaoxing) Co., Ltd. | 192,305,163.87 | 183,544,068.53 | -10,962,893.58 | 2,201,798.24 | ||||||||
Sub-total | 361,008,671.83 | 600,000,000.00 | 183,544,068.53 | -28,435,998.08 | -12,650.40 | 11,204,927.25 | 760,220,882.07 |
Invested entity | Opening balance (book value) | Opening balance of provision for impairment | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||||||
Investment addition | Investment reduction | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared | Provision for impairment | Other | |||||
Total | 361,008,671.83 | 600,000,000.00 | 183,544,068.53 | -28,435,998.08 | -12,650.40 | 11,204,927.25 | 760,220,882.07 |
The recoverable amount is determined as the net of fair value less disposal expenses.? Applicable ? Not applicableThe recoverable amount is determined as the present value of the expected future cash flows.? Applicable ? Not applicableOther explanations:
Beijing Uphoton Technology Co., Ltd. was renamed Uphoton Technology (Shaoxing) Co., Ltd. in May 2023. The Company acquiredits full equity in November 2023.
13. Other non-current financial assets
Unit: RMB
Item | Closing balance | Opening balance |
Financial assets at fair value through profit and losses | 322,640,244.40 | 318,661,575.31 |
Total | 322,640,244.40 | 318,661,575.31 |
14. Fixed assets
Unit: RMB
Item | Closing balance | Opening balance |
Fixed assets | 22,305,456,354.63 | 21,459,756,268.25 |
Liquidation of fixed assets | ||
Total | 22,305,456,354.63 | 21,459,756,268.25 |
(1) Overview of fixed assets
Unit: RMB
Item | Buildings | Production equipment | Measuring equipment | Office equipment | Transportation equipment | Total |
I. Original book value: | ||||||
1. Opening balance | 9,846,837,869.96 | 19,502,022,305.64 | 2,694,853,713.38 | 730,219,472.84 | 24,316,005.03 | 32,798,249,366.85 |
2. Amount increased in current period | 1,605,156,371.96 | 2,437,049,233.28 | 488,975,418.16 | 21,990,486.03 | 1,840,065.06 | 4,555,011,574.49 |
(1) Purchase | 672,521,552.22 | 27,158,764.07 | 4,605,379.22 | 1,721,025.59 | 706,006,721.10 | |
(2) Transfer from construction in progress | 1,521,769,333.38 | 1,778,536,972.06 | 465,602,915.03 | 16,024,928.78 | 3,781,934,149.25 | |
(3) Increase in business combinations | 19,936,589.82 | 2,009,199.23 | 134,855.95 | 22,080,645.00 | ||
(4) Impact of difference from translation of statements in foreign currency | -17,805,144.15 | -33,945,880.82 | -3,786,260.94 | -649,021.20 | -15,816.48 | -56,202,123.59 |
(5) Provisional estimate adjustment | 101,192,182.73 | 101,192,182.73 |
Item | Buildings | Production equipment | Measuring equipment | Office equipment | Transportation equipment | Total |
3. Amount decreased in current period | 9,228,904.70 | 880,886,558.54 | 244,454,367.36 | 54,276,809.81 | 4,899,367.67 | 1,193,746,008.08 |
(1) Disposal or scrapping | 831,003,157.31 | 185,295,509.03 | 54,276,809.81 | 4,899,367.67 | 1,075,474,843.82 | |
(2) Transfer to construction in progress | 49,883,401.23 | 59,158,858.33 | 109,042,259.56 | |||
(3) Provisional estimate adjustment | 9,228,904.70 | 9,228,904.70 | ||||
4. Closing balance | 11,442,765,337.22 | 21,058,184,980.38 | 2,939,374,764.18 | 697,933,149.06 | 21,256,702.42 | 36,159,514,933.26 |
II. Accumulated depreciation | ||||||
1. Opening balance | 1,629,850,461.15 | 7,682,942,786.21 | 1,022,137,288.30 | 406,250,135.41 | 17,847,505.87 | 10,759,028,176.94 |
2. Amount increased in current period | 345,167,260.69 | 2,211,965,785.31 | 308,223,701.69 | 97,364,174.76 | 1,581,012.33 | 2,964,301,934.78 |
(1) Accrual | 346,795,279.98 | 2,222,972,988.99 | 309,054,911.52 | 97,521,991.66 | 1,587,024.18 | 2,977,932,196.33 |
(2) Impact of difference from translation of statements in foreign currency | -1,628,019.29 | -11,007,203.68 | -831,209.83 | -157,816.90 | -6,011.85 | -13,630,261.55 |
3. Amount decreased in current period | 309,426,696.34 | 82,126,291.52 | 33,575,410.39 | 4,507,498.66 | 429,635,896.91 | |
(1) Disposal or scrapping | 290,368,772.28 | 76,107,495.31 | 33,575,410.39 | 4,507,498.66 | 404,559,176.64 | |
(2) Transfer to construction in progress | 19,057,924.06 | 6,018,796.21 | 25,076,720.27 | |||
4. Closing balance | 1,975,017,721.84 | 9,585,481,875.18 | 1,248,234,698.47 | 470,038,899.78 | 14,921,019.54 | 13,293,694,214.81 |
III. Impairment provision | ||||||
1. Opening balance | 568,248,570.99 | 8,918,010.08 | 2,298,340.59 | 579,464,921.66 | ||
2. Amount increased in current period | ||||||
(1) Accrual | ||||||
3. Amount decreased in current period | 16,655,500.49 | 2,067,172.65 | 377,884.70 | 19,100,557.84 | ||
(1) Disposal or scrapping | 16,655,500.49 | 2,067,172.65 | 377,884.70 | 19,100,557.84 | ||
4. Closing balance | 551,593,070.50 | 6,850,837.43 | 1,920,455.89 | 560,364,363.82 | ||
IV. Book value | ||||||
1.Closing book value | 9,467,747,615.38 | 10,921,110,034.70 | 1,684,289,228.28 | 225,973,793.39 | 6,335,682.88 | 22,305,456,354.63 |
Item | Buildings | Production equipment | Measuring equipment | Office equipment | Transportation equipment | Total |
2. Opening book value | 8,216,987,408.81 | 11,250,830,948.44 | 1,663,798,415.00 | 321,670,996.84 | 6,468,499.16 | 21,459,756,268.25 |
(2) Fixed assets temporarily idle
Unit: RMB
Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Notes |
Buildings | 371,765,001.33 | 90,786,632.42 | 280,978,368.91 | ||
Production equipment | 2,043,229,312.29 | 431,214,331.98 | 535,805,477.57 | 1,076,209,502.74 | |
Measuring equipment | 15,240,800.52 | 2,895,227.79 | 1,478,628.28 | 10,866,944.45 | |
Office equipment | 20,701,208.67 | 9,922,992.91 | 1,513,336.37 | 9,264,879.39 | |
Total | 2,450,936,322.81 | 534,819,185.10 | 538,797,442.22 | 1,377,319,695.49 |
(3) Fixed assets leased out through operating leases
Unit: RMB
Item | Closing book value |
Buildings | 216,922,724.32 |
Production equipment and other equipment | 315,288,605.04 |
Total | 532,211,329.36 |
(4) Overview of the fixed assets for which certificates of title to be obtained
Unit: RMB
Item | Book value | Reasons for not obtaining the certificate of title |
9# Factory building | 138,197,532.71 | Property rights certificate under processing |
52# Apartment | 179,298,857.57 | Property rights certificate under processing |
23# Apartment | 2,487,035.33 | Property rights certificate under processing |
65# Factory building | 64,551,575.38 | Property rights certificate under processing |
66# Factory building | 64,502,857.03 | Property rights certificate under processing |
Total | 449,037,858.02 |
(5) Liquidation of fixed assets
None
15. Construction in progress
Unit: RMB
Item | Closing balance | Opening balance |
Construction in progress | 2,014,541,273.09 | 2,276,965,736.33 |
Construction materials | 56,739,070.46 | 147,478,039.00 |
Total | 2,071,280,343.55 | 2,424,443,775.33 |
(1) Overview of construction in progress
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Self-made equipment | 445,893,021.27 | 445,893,021.27 | 239,378,426.17 | 239,378,426.17 | ||
Unaccepted equipment | 407,651,208.82 | 407,651,208.82 | 530,677,599.03 | 530,677,599.03 | ||
Infrastructure construction | 94,544,059.28 | 94,544,059.28 | 147,355,671.17 | 147,355,671.17 | ||
Sporadic projects | 92,050,448.89 | 92,050,448.89 | 183,389,745.14 | 183,389,745.14 | ||
B4 Factory building | 90,019,857.17 | 90,019,857.17 | ||||
B3 Factory building | 87,367,915.53 | 87,367,915.53 | ||||
A7 Factory building | 82,278,754.04 | 82,278,754.04 | ||||
A8 Factory building | 81,270,534.70 | 81,270,534.70 | ||||
C8 Factory building | 73,918,047.41 | 73,918,047.41 | ||||
80# Factory building | 70,498,165.12 | 70,498,165.12 | 5,762,284.64 | 5,762,284.64 | ||
A5 Factory building | 69,865,450.61 | 69,865,450.61 | ||||
B5 Factory building | 69,399,452.46 | 69,399,452.46 | ||||
A1 Power center | 61,274,301.68 | 61,274,301.68 | ||||
A6 Factory building | 59,116,843.41 | 59,116,843.41 | ||||
A2 Carport | 52,070,864.72 | 52,070,864.72 | ||||
C7 Factory building | 49,204,958.23 | 49,204,958.23 | ||||
83# Factory building | 47,193,044.87 | 47,193,044.87 | ||||
A3 Factory building | 45,591,287.12 | 45,591,287.12 | ||||
5# Office building | 16,549,975.01 | 16,549,975.01 | ||||
C Power center | 12,648,040.32 | 12,648,040.32 | ||||
78# Factory building | 5,870,826.50 | 5,870,826.50 | 4,873,511.68 | 4,873,511.68 | ||
79# Factory building | 264,215.93 | 264,215.93 | 90,592.49 | 90,592.49 | ||
71# Factory building | 18,649,051.46 | 18,649,051.46 | ||||
2# Office building | 287,041,263.11 | 287,041,263.11 | ||||
63# Factory building | 158,512,473.50 | 158,512,473.50 | ||||
39# Factory | 111,488,614.81 | 111,488,614.81 |
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
building | ||||||
74# Factory building | 64,820,307.60 | 64,820,307.60 | ||||
64# Factory building | 59,007,078.74 | 59,007,078.74 | ||||
75# Factory building | 57,780,367.36 | 57,780,367.36 | ||||
76# Factory building | 54,322,988.22 | 54,322,988.22 | ||||
65# Factory building | 37,794,076.56 | 37,794,076.56 | ||||
66# Factory building | 37,772,311.18 | 37,772,311.18 | ||||
68# Factory building | 34,968,643.25 | 34,968,643.25 | ||||
69# Factory building | 34,606,945.61 | 34,606,945.61 | ||||
73# Factory building | 34,217,551.92 | 34,217,551.92 | ||||
77# Factory building | 26,720,487.51 | 26,720,487.51 | ||||
Reconstruction and expansion of factory buildings | 10,924,075.53 | 10,924,075.53 | ||||
70# Factory building | 21,058,712.36 | 21,058,712.36 | ||||
67# Factory building | 36,939,485.41 | 36,939,485.41 | ||||
72# Factory building | 78,813,471.88 | 78,813,471.88 | ||||
Total | 2,014,541,273.091 | 2,014,541,273.09 | 2,276,965,736.33 | 2,276,965,736.33 |
Note: 1 The construction in progress during the current period increased by RMB 129,304,411.07 due to business combination,corresponding to the closing balance of RMB 132,441,234.67.
(2) Increase or decrease of significant construction in progress in current period
Unit: RMB
Name of project | Budget amount | Opening balance | Increased amount in the current period | Amount transferred to fixed assets in current period | Other amount decreased in current period | Closing balance | Proportion of total project input to budget | Project progress | Accumulated amount of interest capitalization | Including: Amount of interest capitalization in current period | Interest capitalization rate for current period | Source of funds |
B4 Factory building | 139,809,600.00 | 91,253,005.90 | 1,233,148.73 | 90,019,857.17 | 64.39% | 70.00% | Other | |||||
B3 Factory building | 119,543,340.00 | 88,564,736.29 | 1,196,820.76 | 87,367,915.53 | 73.08% | 80.00% | Other | |||||
A7 Factory building | 139,809,600.00 | 83,405,860.26 | 1,127,106.22 | 82,278,754.04 | 58.85% | 70.00% | Other | |||||
A8 Factory building | 139,809,600.00 | 82,383,829.70 | 1,113,295.00 | 81,270,534.70 | 58.13% | 70.00% | Other | |||||
C8 Factory building | 119,543,340.00 | 74,930,623.40 | 1,012,575.99 | 73,918,047.41 | 61.83% | 70.00% | Other | |||||
80# Factory building | 187,000,000.00 | 5,762,284.64 | 64,735,880.48 | 70,498,165.12 | 37.70% | 30.00% | Other | |||||
A5 Factory building | 119,543,340.00 | 70,822,511.58 | 957,060.97 | 69,865,450.61 | 58.44% | 70.00% | Other | |||||
B5 Factory building | 119,543,340.00 | 70,350,129.89 | 950,677.43 | 69,399,452.46 | 58.05% | 70.00% | Other | |||||
A2 Carport | 127,484,280.00 | 52,784,164.24 | 713,299.52 | 52,070,864.72 | 40.84% | 50.00% | Other | |||||
Total | 1,212,086,440.00 | 5,762,284.64 | 679,230,741.74 | 8,303,984.62 | 676,689,041.76 |
(3) Provision for impairment of construction in progress in current period
None
(4) Impairment testing of construction in progress
? Applicable ? Not applicable
(5) Construction materials
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Construction materials | 56,739,070.46 | 56,739,070.46 | 147,478,039.00 | 147,478,039.00 | ||
Total | 56,739,070.46 | 56,739,070.46 | 147,478,039.00 | 147,478,039.00 |
16. Bearer biological assets
(1) Bearer biological assets measured at cost
? Applicable ? Not applicable
(2) Impairment test for bearer biological assets measured at cost
? Applicable ? Not applicable
(3) Bearer biological assets measured at fair value
? Applicable ? Not applicable
17. Oil and gas assets
? Applicable ? Not applicable
18. Right-of-use assets
(1) Right-of-use assets
Unit: RMB
Item | Buildings | Other | Total |
I. Original book value | |||
1. Opening balance | 795,474,434.63 | 795,474,434.63 | |
2. Amount increased in current period | 173,065,005.09 | 229,830.81 | 173,294,835.90 |
(1) New leases in the current period | 173,294,486.32 | 173,294,486.32 | |
(2) Business combination | 2,045,389.59 | 229,830.81 | 2,275,220.40 |
(3) Impact of difference from translation of statements in foreign currency | -2,274,870.82 | -2,274,870.82 | |
3. Amount decreased in current period | 87,578,314.32 | 87,578,314.32 | |
(1) Disposal | 87,578,314.32 | 87,578,314.32 | |
(2) Others | |||
4. Closing balance | 880,961,125.40 | 229,830.81 | 881,190,956.21 |
II. Accumulated depreciation | |||
1. Opening balance | 215,298,511.90 | 215,298,511.90 | |
2. Amount increased in current period | 128,312,643.91 | 4,014.51 | 128,316,658.42 |
(1) Accrual | 129,550,209.76 | 4,014.51 | 129,554,224.27 |
(2) Impact of difference from translation of statements in foreign currency | -1,237,565.85 | -1,237,565.85 | |
3. Amount decreased in current period | 77,856,064.02 | 77,856,064.02 | |
(1) Disposal | 77,856,064.02 | 77,856,064.02 | |
(2) Others | |||
4. Closing balance | 265,755,091.79 | 4,014.51 | 265,759,106.30 |
III. Impairment provision | |||
1. Opening balance | |||
2. Amount increased in current period | |||
(1) Accrual | |||
3. Amount decreased in current period | |||
(1) Disposal | |||
4. Closing balance | |||
IV. Book value | |||
1.Closing book value | 615,206,033.61 | 225,816.30 | 615,431,849.91 |
2. Opening book value | 580,175,922.73 | 580,175,922.73 |
(2) Impairment test of right-of-use assets
? Applicable ? Not applicable
19. Intangible assets
(1) Overview of intangible assets
Unit: RMB
Item | Land-use right | Patent right | Non-patent technology | Software | Trade mark | Total |
I. Original book value | ||||||
1. Opening balance | 1,571,927,427.61 | 8,964,410.00 | 3,566,513,741.73 | 271,462,621.56 | 5,418,868,200.90 | |
2. Amount increased in current period | 587,797,846.19 | 138,000,000.00 | 457,162,678.29 | 75,264,505.31 | 76,000,000.00 | 1,334,225,029.79 |
(1) Purchase | 536,000,791.36 | 73,773,612.34 | 609,774,403.70 | |||
(2) Internal R&D | 457,162,678.29 | 457,162,678.29 | ||||
(3) Increase in business combinations | 62,026,800.00 | 138,000,000.00 | 1,442,792.12 | 76,000,000.00 | 277,469,592.12 | |
(4) Impact of difference from translation of statements in foreign currency | -10,229,745.17 | 48,100.85 | -10,181,644.32 | |||
3. Amount decreased in current period | 157,012,868.28 | 3,658,774.16 | 160,671,642.44 | |||
(1) Disposal | 157,012,868.28 | 3,658,774.16 | 160,671,642.44 | |||
4. Closing balance | 2,159,725,273.80 | 146,964,410.00 | 3,866,663,551.74 | 343,068,352.71 | 76,000,000.00 | 6,592,421,588.25 |
II. Accumulated amortization | ||||||
1. Opening balance | 204,881,055.54 | 3,735,170.83 | 2,316,871,264.20 | 172,587,039.65 | 2,698,074,530.22 | |
2. Amount increased in current period | 41,454,378.62 | 2,539,298.14 | 688,964,311.28 | 40,723,021.35 | 1,266,666.67 | 774,947,676.06 |
(1) Accrual | 41,906,844.38 | 2,539,298.14 | 688,964,311.28 | 40,681,289.74 | 1,266,666.67 | 775,358,410.21 |
(2) Impact of difference from translation of statements in foreign currency | -452,465.76 | 41,731.61 | -410,734.15 | |||
3. Amount decreased in current period | 157,012,868.28 | 3,658,774.16 | 160,671,642.44 | |||
(1) Disposal | 157,012,868.28 | 3,658,774.16 | 160,671,642.44 | |||
4. Closing balance | 246,335,434.16 | 6,274,468.97 | 2,848,822,707.20 | 209,651,286.84 | 1,266,666.67 | 3,312,350,563.84 |
III. Impairment |
Item | Land-use right | Patent right | Non-patent technology | Software | Trade mark | Total |
provision | ||||||
1. Opening balance | ||||||
2. Amount increased in current period | ||||||
(1) Accrual | ||||||
3. Amount decreased in current period | ||||||
(1) Disposal | ||||||
4. Closing balance | ||||||
IV. Book value | ||||||
1.Closing book value | 1,913,389,839.64 | 140,689,941.03 | 1,017,840,844.54 | 133,417,065.87 | 74,733,333.33 | 3,280,071,024.41 |
2. Opening book value | 1,367,046,372.07 | 5,229,239.17 | 1,249,642,477.53 | 98,875,581.91 | 2,720,793,670.68 |
At the end of this period, the proportion of intangible assets created through internal research and development of the Company to thebalance of intangible assets is 53.22%.
(2) Overview of land-use right without certificates of title
None
(3) Impairment testing of intangible assets
? Applicable ? Not applicable
20. Development costs
Unit: RMB
Items | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Internal development costs | Increase in business combination | Recognized as intangible assets | Transfer to current profit and loss | |||
Self-developed technologies for electroacoustic products | 361,178,111.91 | 542,789,272.24 | 457,162,678.29 | 446,804,705.86 |
21. Goodwill
(1) Original book value of goodwill
Unit: RMB
Name of the invested entity or matter forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Formed by business combinations | Other | Disposal | Other |
Goertek Electronics, Inc. | 1,743,540.56 | 1,743,540.56 | ||||
Weifang Goertek Communication Technology Co., Ltd. | 15,115,644.52 | 15,115,644.52 | ||||
Goertek Europe ApS | 8,831,473.29 | 8,831,473.29 | ||||
Uphoton Technology (Shaoxing) Co., Ltd. | 588,174,794.48 | 588,174,794.48 | ||||
Total | 25,690,658.37 | 588,174,794.48 | 613,865,452.85 |
(2) Impairment provision for goodwill
Unit: RMB
Name of the invested entity or matter forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Accrual | Other | Disposal | Other | |||
Goertek Europe ApS | 8,831,473.29 | 8,831,473.29 | ||||
Total | 8,831,473.29 | 8,831,473.29 |
(3) Information about the asset group or combination of asset groups of goodwill
Name | Composition and basis of the asset group or combination of asset groups | Operating segment and basis | Consistent with prior years or not |
Uphoton Technology (Shaoxing) Co., Ltd. System Business | This includes long-term assets related to system business operations in Uphoton Technology (Shaoxing) Co., Ltd., which generate cash inflows largely independent of those generated by other assets or asset groups. | For internal management purposes, this asset group falls under the Precision Components business. | Not applicable |
Uphoton Technology (Shaoxing) Co., Ltd. - Components Business | This includes long-term assets related to components business operations in Uphoton Technology (Shaoxing) Co., Ltd., which generate cash inflows largely independent of those generated by other assets or asset groups | For internal management purposes, this asset group falls under the Precision Components business. | Not applicable |
Other explanationsThe composition of the asset group or portfolio of asset groups of significant goodwill:
Composition of the asset group or combination of asset groups | Uphoton Technology (Shaoxing) Co., Ltd. - System business (RMB) | Uphoton Technology (Shaoxing) Co., Ltd. - Components business (RMB) |
Book value of the asset group or combination of asset groups | 61,640,450.89 | 175,438,206.36 |
Book value of goodwill apportioned to the asset group or combination of asset groups | 152,925,446.56 | 435,249,347.92 |
Book value of the asset group or combination of asset groups containing goodwill | 214,565,897.45 | 610,687,554.28 |
Note: Method of apportioning goodwill to this asset group or portfolio of asset groups: The apportionment is based on the proportionof the fair value of each asset group or combination of asset groups to the total fair value of the relevant asset group or combination ofasset groups.
(4) Specific method for determining the recoverable amount
The recoverable amount is determined as the net of fair value less disposal expenses.? Applicable ? Not applicableThe recoverable amount is determined as the present value of the expected future cash flows.? Applicable ? Not applicable
Unit: RMB
Item | Book value | Recoverable amount | Impairment amount | Projection period | Key parameters for the projection period | Key parameters for the stabilization period | Basis for determining key parameters for the stabilization period |
Uphoton Technology (Shaoxing) Co., Ltd. System Business | 214,565,897.45 | 236,091,100.00 | 2024-2031 | Revenue growth rate 11.48% - 193.10%; discount rate 13.55% | Revenue growth rate 0%; discount rate 13.55% | Based on the past performance of the asset group and projections for market expectations | |
Uphoton Technology (Shaoxing) Co., Ltd. - Components Business | 610,687,554.28 | 678,498,100.00 | 2024-2031 | Revenue growth rate 9.86% - 198.19%; discount rate 13.55% | Revenue growth rate 0%; discount rate 13.55% | Based on the past performance of the asset group and projections for market expectations | |
Total | 825,253,451.73 | 914,589,200.00 |
Reasons for apparent discrepancies between the foregoing information and information used for impairment testing in prior years orexternal informationNoneReasons for apparent discrepancies between the information used in the Company's impairment tests in prior years and the actualsituation in the current yearNone
(5) Fulfillment of performance commitments and corresponding impairment of goodwillPerformance commitments existed at the time goodwill was formed and are within the performance commitment period for thereporting period or the preceding period of the reporting period.? Applicable ? Not applicable
22. Long-term prepaid expenses
Unit: RMB
Item | Opening balance | Increased amount in the current period | Amortized amount in the current period | Other decreased amount | Closing balance |
Expenditure on house improvement | 303,437,303.26 | 272,537,509.29 | 201,617,256.13 | 7,380,279.88 | 366,977,276.54 |
IT project service fee | 27,084,151.68 | 25,778,938.11 | 18,995,011.85 | 33,868,077.94 | |
Design fee | 6,787,569.12 | 2,406,540.12 | 4,381,029.00 | ||
Financing guarantee fee | 252,500.00 | 9,000,000.00 | 3,002,500.00 | 6,250,000.00 | |
Other | 618,693.92 | 48,417.73 | 570,276.19 | ||
Total | 337,561,524.06 | 307,935,141.32 | 226,069,725.83 | 7,380,279.88 | 412,046,659.67 |
Other explanations:
Other decreases in expenditures for house improvements in the current period were primarily due to adjustments made by the Companybased on final settlement amounts.
23. Deferred tax assets/liabilities
(1) Deferred tax assets not offset
Unit: RMB
Item | Closing balance | Opening balance | ||
Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
Provision for impairment of assets | 187,791,490.61 | 29,792,145.97 | 1,714,479,986.93 | 259,912,213.28 |
Unrealized profit from intra-group transactions | 1,131,161,206.27 | 188,180,881.90 | 1,106,784,542.91 | 182,217,984.94 |
Deductible loss | 7,949,926,507.37 | 1,253,526,618.03 | 4,978,155,153.32 | 825,412,239.76 |
Government grants | 123,854,596.87 | 20,310,571.81 | 303,540,279.67 | 47,040,683.06 |
Financial assets held for trading - changes in fair value of equity instrument | 52,130,372.98 | 7,819,555.95 | ||
Changes in the fair value of derivative financial instruments | 97,304,476.36 | 15,034,908.60 | 182,318,270.45 | 29,492,906.86 |
Temporary differences of fixed assets | 38,356,112.38 | 5,753,416.86 | 42,335,704.66 | 6,350,355.70 |
Expenses of share-based payment | 75,231,226.39 | 11,284,683.96 | ||
Lease liabilities | 630,560,463.73 | 96,756,559.56 | 590,093,259.12 | 92,196,126.96 |
Total | 10,158,954,853.59 | 1,609,355,102.73 | 9,045,068,796.43 | 1,461,726,750.47 |
(2) Deferred tax liabilities not offset
Unit: RMB
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
Asset appreciation after business combination not involving enterprises under common control | 251,185,339.82 | 41,487,520.22 | 4,126,637.34 | 1,031,659.32 |
Changes in the fair value of derivative financial instruments | 104,229,894.43 | 17,197,932.59 | 185,939,899.60 | 27,939,770.90 |
Difference in time point | 5,935,766.66 | 1,483,941.67 | 5,039,047.50 | 1,259,761.87 |
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
for recognition of interest income of factoring business | ||||
Difference between the book value of fixed assets and their tax bases | 3,454,994,983.11 | 596,025,479.50 | 4,664,457,309.75 | 783,266,986.21 |
Financial assets held for trading - changes in fair value of equity instrument | 47,858,392.97 | 7,178,758.95 | 17,469,694.02 | 2,620,454.10 |
Right-of-use assets | 615,431,849.91 | 94,606,542.41 | 580,175,922.73 | 90,419,197.04 |
Total | 4,479,636,226.90 | 757,980,175.34 | 5,457,208,510.94 | 906,537,829.44 |
(3) Deferred tax assets or liabilities presented in net amount after offsetting
Unit: RMB
Item | Amount of deferred tax assets and liabilities mutually offset at the end of the period | Closing balance of deferred tax assets or liabilities after offsetting | Amount of deferred tax assets and liabilities mutually offset at the beginning of the period | Opening balance of deferred tax assets or liabilities after offsetting |
Deferred tax assets | 1,609,355,102.73 | 1,461,726,750.47 | ||
Deferred tax liabilities | 757,980,175.34 | 906,537,829.44 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item | Closing balance | Opening balance |
Deductible temporary difference | 1,368,219,823.12 | 108,002,751.78 |
Deductible loss | 987,684,531.31 | 1,113,018,229.33 |
Government grants | 201,469,460.92 | 8,950,659.40 |
Unrealized profit from intra-group transaction | 355,291,930.95 | 228,644,722.04 |
Lease liabilities | 14,603,113.98 | 8,300,246.38 |
Total | 2,927,268,860.28 | 1,466,916,608.93 |
(5) Deductible loss of unrecognized deferred tax assets will expire in the following years
Unit: RMB
Year | Closing balance | Opening balance | Notes |
2023 | 42,489,136.50 | ||
2024 | 18,696,741.06 | 55,578,667.67 | |
2025 | 55,803,979.86 | 115,720,117.70 | |
2026 | 100,932,581.25 | 129,251,092.62 | |
2027 | 132,003,790.64 | 104,866,432.82 | |
2028 | 226,015,025.30 | 44,300,430.49 | |
2029 | 34,117,796.46 | 84,671,122.89 | |
2030 | 40,430,198.27 | 131,354,916.79 | |
2031 | 163,633,635.10 | 215,711,939.66 |
2032 | 164,201,128.77 | 189,074,372.19 | |
2033 | 51,849,654.60 | ||
Total | 987,684,531.31 | 1,113,018,229.33 |
24. Other non-current assets
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Contract assets | 119,469.27 | 1,194.69 | 118,274.58 | |||
Prepayment for long-term assets | 150,258,931.39 | 150,258,931.39 | 269,755,356.88 | 269,755,356.88 | ||
Certificates of deposits issued by banks | 998,012,152.77 | 998,012,152.77 | 655,000,458.30 | 655,000,458.30 | ||
Guarantee deposits | 30,000,000.00 | 30,000,000.00 | ||||
Prepaid long-term borrowings financing costs | 101,102,677.91 | 101,102,677.91 | ||||
Equity investment transfer receivable | 8,461,633.81 | 8,461,633.81 | ||||
The portion due within one year (Note VII. 9) | -494,634,708.33 | -494,634,708.33 | -70,303,760.94 | -1,194.69 | -70,302,566.25 | |
Total | 683,636,375.83 | 683,636,375.83 | 964,135,835.23 | 964,135,835.23 |
25. Assets with restricted ownership or right to use
Unit: RMB
Item | End of the period | Beginning of the period | ||||||
Book balance | Book value | Restriction type | Restriction description | Book balance | Book value | Restriction type | Restriction description | |
Cash at bank and on hand | 1,456,289,098.94 | 1,456,289,098.94 | Pledged | Handling of notes, loans, etc. | 1,392,748,538.84 | 1,392,748,538.84 | Pledged | Handling of notes, loans, etc. |
Notes receivable | 100,866,907.03 | 100,866,907.03 | Pledged | Bill pledge, discount, etc. | 5,848,815.01 | 5,848,815.01 | Pledged | Bill pledge |
Intangible assets | 61,897,657.63 | 61,897,657.63 | Collateral | Used for mortgage purposes | ||||
Current portion of non-current assets | 453,106,027.78 | 453,106,027.78 | Pledged | Bank-issued financing Guarantee deposits, bills, etc. | 70,184,291.67 | 70,184,291.67 | Pledged | Bank-issued financing guarantees, bills, etc. |
Other non-current assets | 533,377,444.44 | 533,377,444.44 | Pledged | 544,796,722.20 | 544,796,722.20 | Pledged | ||
Total | 2,605,537,135.82 | 2,605,537,135.82 | 2,013,578,367.72 | 2,013,578,367.72 |
26. Short-term borrowings
(1) Types of short-term borrowings
Unit: RMB
Item | Closing balance | Opening balance |
Secured borrowings | 191,949,621.83 | 508,878,860.80 |
Credit borrowings | 4,922,541,694.79 | 6,611,967,165.87 |
Discounted borrowing | 100,000,000.00 | |
Total | 5,214,491,316.62 | 7,120,846,026.67 |
Explanation of the types of short-term borrowings:
The balance of secured borrowings at the end of the period amounted to RMB191,949,621.83 (principal of RMB191,232,900.00 andinterest of RMB716,721.83), which was guaranteed by Goertek Group Co., Ltd.
(2) Short-term borrowings that are overdue and not repaid
None
27. Financial liabilities held for trading
Unit: RMB
Item | Closing balance | Opening balance |
Financial liabilities held for trading | 129,579,785.95 | 202,293,742.46 |
Including: | ||
Derivative financial liabilities | 129,579,785.95 | 202,293,742.46 |
Total | 129,579,785.95 | 202,293,742.46 |
28. Notes payable
Unit: RMB
Type | Closing balance | Opening balance |
Commercial acceptance notes | 30,000,000.00 | 170,000,000.00 |
Bank acceptance notes | 4,223,514,820.18 | 4,269,924,397.04 |
Domestic letter of credit | 284,839,800.50 | 410,573,849.04 |
Total | 4,538,354,620.68 | 4,850,498,246.08 |
The amount of notes payable due and unpaid at the end of this period is RMB 0.00.
29. Accounts Payable
(1) Presentation of accounts payable
Unit: RMB
Item | Closing balance | Opening balance |
Material cost and others | 16,626,231,694.18 | 23,460,996,615.58 |
Payment for equipment | 234,749,834.37 | 1,794,480,008.06 |
Payment for construction projects | 721,281,830.62 | 493,281,646.55 |
Total | 17,582,263,359.17 | 25,748,758,270.19 |
(2) Important accounts payable aged over one year or overdue
None
30. Other payables
Unit: RMB
Item | Closing balance | Opening balance |
Other payables | 87,474,942.48 | 78,974,306.79 |
Total | 87,474,942.48 | 78,974,306.79 |
(1) Interest payable
None
(2) Dividends payable
None
(3) Other payables
1) Presentation of other payables by nature of payment
Unit: RMB
Item | Closing balance | Opening balance |
Current accounts payable | 30,601,293.49 | 19,961,968.64 |
Employee benefits payable | 2,959,471.15 | 3,334,897.96 |
Deposits and security deposits payable | 53,914,177.84 | 55,677,440.19 |
Total | 87,474,942.48 | 78,974,306.79 |
2) Important other payables with aging over one year or overdue
None
31. Contract liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Advance payment received for products | 3,472,638,215.20 | 2,295,347,547.31 |
Total | 3,472,638,215.20 | 2,295,347,547.31 |
Important contract liabilities with aging over one yearNoneAmount and causes of significant changes in book value during the reporting periodNone
32. Employee benefits payable
(1) Presentation of employee benefits payable to employees
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
I. Short-term payroll | 999,017,864.86 | 8,515,882,608.64 | 8,300,010,277.01 | 1,214,890,196.49 |
II. Post-employment benefits—defined contribution plans | 676,271,041.48 | 676,090,643.92 | 180,397.56 | |
II. Termination benefits | 40,553,913.53 | 144,863,803.36 | 180,942,770.29 | 4,474,946.60 |
Total | 1,039,571,778.39 | 9,337,017,453.48 | 9,157,043,691.22 | 1,219,545,540.65 |
(2) Presentation of short-term payroll
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
1. Salaries, bonuses, allowances and subsidies | 984,016,293.41 | 7,511,709,457.94 | 7,288,410,368.68 | 1,207,315,382.67 |
2. Employee welfare fee | 425,130,211.82 | 425,130,211.82 | ||
3. Social insurance premium | 112,235.72 | 309,226,236.55 | 309,224,908.60 | 113,563.67 |
Incl.: Medical insurance premium | 77,449.20 | 287,594,427.77 | 287,567,981.59 | 103,895.38 |
Work injury insurance premium | 19,864,037.70 | 19,856,638.63 | 7,399.07 | |
Maternity insurance premium | 34,786.52 | 1,767,771.08 | 1,800,288.38 | 2,269.22 |
4. Housing provident fund | 246,638,584.30 | 246,608,284.30 | 30,300.00 | |
5. Labor union expenditure and employee education expenses | 14,889,335.73 | 23,178,118.03 | 30,636,503.61 | 7,430,950.15 |
Total | 999,017,864.86 | 8,515,882,608.64 | 8,300,010,277.01 | 1,214,890,196.49 |
(3) Presentation of defined contribution plans
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
1. Basic endowment insurance premium | 647,818,393.48 | 647,644,021.14 | 174,372.34 | |
2. Unemployment insurance premium | 28,452,648.00 | 28,446,622.78 | 6,025.22 | |
Total | 676,271,041.48 | 676,090,643.92 | 180,397.56 |
Other explanations:
The Group contributes to mandatory pension program and unemployment benefit programs established by government authority. Underthese programs, the Group makes monthly contributions to these programs at certain percentages according to the social insurancecontribution base for 2023. Except the above monthly contributions, the Group is not under other payment obligations. Correspondingexpenditures are recorded in the current gains and losses, or related asset costs when incurred.
33. Taxes payable
Unit: RMB
Item | Closing balance | Opening balance |
VAT | 20,391,817.39 | 38,043,970.81 |
Enterprise income tax | 29,601,348.32 | 174,981,926.24 |
Personal income tax | 13,907,551.43 | 11,883,118.28 |
City maintenance and construction tax | 4,043,865.01 | 10,809,326.00 |
Education surcharge | 816,335.64 | 3,269,592.35 |
Local education surcharges | 732,968.31 | 3,106,645.36 |
Housing property tax | 22,511,435.33 | 19,768,868.36 |
Land use tax | 6,287,778.70 | 2,934,841.41 |
Stamp duties tax | 21,505,223.06 | 20,091,251.59 |
Water resource tax | 48.00 | |
Environmental protection tax | 14,105.18 | 22,179.18 |
Item | Closing balance | Opening balance |
Withholding tax | 1,043,625.65 | |
Total | 120,856,054.02 | 284,911,767.58 |
34. Current portion of non-current liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Long-term borrowings due within one year (Note VII, 36) | 945,537,351.58 | 992,791,555.56 |
Lease liabilities due within one year (Notes VII, 37) | 126,507,675.26 | 102,826,772.18 |
Long-term employee benefits payable due within one year | 124,233.89 | |
Total | 1,072,169,260.73 | 1,095,618,327.74 |
Other explanations:
Long-term employee benefits payable due within one year represents the non-competition compensation payable to departed employeesof the subsidiary, Uphoton Technology (Shaoxing) Co., Ltd.
35. Other current liabilities
Unit: RMB
Item | Closing balance | Opening balance |
VAT payable—tax on items to be resold | 4,718,260.10 | 4,252,178.60 |
Total | 4,718,260.10 | 4,252,178.60 |
Change in short-term debentures payable:
None
36. Long-term borrowings
(1) Types of long-term borrowings
Unit: RMB
Item | Closing balance | Opening balance |
Mortgage borrowings | 150,213,125.00 | |
Secured borrowings | 3,269,566,929.13 | 1,100,982,361.11 |
Credit borrowings | 4,157,228,049.31 | 2,097,809,194.45 |
Long-term borrowings due within one year (Note VII, 34) | -945,537,351.58 | -992,791,555.56 |
Total | 6,631,470,751.86 | 2,206,000,000.00 |
Description of types of long-term borrowings:
The balance of secured borrowings at the end of the period was RMB 3,269,566,929.13 (principal of RMB 3,293,607,500.00 andinterest adjustment of RMB -24,040,570.87), of which the principal of RMB 1,700,000,000.00 was guaranteed by Goertek Group Co.,Ltd. and RMB 1,593,607,500.00 was guaranteed by the Company for its subsidiary.Other explanations, including interest rate range:
The interest rate range for long-term borrowings on December 31, 2023 was 2.40% - 7.21% (December 31, 2022: 2.65% - 3.7%).
37. Lease liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Lease payment | 718,922,935.00 | 639,092,280.68 |
Plus: Unrecognized financing fees | -74,255,700.11 | -65,561,000.75 |
Lease liabilities due within one year (Notes VII, 34) | -126,507,675.26 | -102,826,772.18 |
Total | 518,159,559.63 | 470,704,507.75 |
38. Deferred income
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Cause of formation |
Government grants | 532,374,144.38 | 78,520,570.00 | 91,810,056.04 | 519,084,658.34 | Please see Note XI. "Government Grants" for more details. |
Total | 532,374,144.38 | 78,520,570.00 | 91,810,056.04 | 519,084,658.34 | - |
39. Other non-current liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Equity of other partners of the fund company | 348,058,624.72 | 172,261,037.39 |
Total | 348,058,624.72 | 172,261,037.39 |
40. Share capital
Unit: RMB
Opening balance | Increase or decrease in the change (+, -) | Closing balance | |||||
New shares | Bonus shares | Transferred from reserves | Other | Sub-total | |||
Total shares | 3,420,403,200.00 | 3,420,403,200.00 |
Other explanations:
As of December 31, 2023, the 65,000,000 shares of the Company held by the controlling shareholders and their persons acting inconcert have been pledged, representing 1.90% of total shares of the Company. Specifically, Mr. Jiang Long, a shareholder of theCompany, pledged 65,000,000 shares of the Company in his possession to China Merchants Securities Asset Management CompanyLimited for the period from June 1, 2023 to June 1, 2024.
41. Capital surplus
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Capital premium (Share capital premium) | 9,444,850,530.59 | 285,989,624.44 | 1,686,106,939.05 | 8,044,733,215.98 |
Other capital surplus | 835,808,720.44 | 182,565,014.67 | 64,734,580.48 | 953,639,154.63 |
Total | 10,280,659,251.03 | 468,554,639.11 | 1,750,841,519.53 | 8,998,372,370.61 |
Other explanations, including the increase and decrease in the current period and explanation of reasons for changes:
① Capital surplus - Share capital premium increased by RMB 285,989,624.44 this year. Reasons: a.The release of the employee
stock ownership plan and the exercise of stock options resulting in the conversion of other capital surplus to share capital premiumof RMB 62,532,782.24, b The granting of the Company's "Home No. 5" Employee Stock Ownership Plan, where the actualreleased shares were less than the target due to individual performance evaluation, resulting in an increase in capital surplus -share capital premium of RMB 39,355,486.02 due to the sale price of the corresponding shares; c The change in shareholdingratio as a result of contribution by minority shareholders of subsidiaries, increasing the share capital premium by
RMB184,101,356.18. Please see Note X.2. "The Share of Owner's Equity in the Subsidiary Has Changed and Still Controls theTransactions of the Subsidiary".
② Capital surplus - Share capital premium decreased by RMB 1,686,106,939.05 this year, as a result of the non-trading transfer of
the Company's shares in the Company's special securities repurchase account for repurchase to the special account of theCompany's "Home 6" and "Home 7" Employee Stock Ownership Plan at a price lower than the cost of repurchase.
③ Capital surplus - other capital surplus increased by RMB 182,565,014.67 this year. Reasons: a.The share-based payment resultingin RMB 172,286,003.87, b The effect of changes in other owners' equity of invested units under the equity method, whichincreased by RMB 10,279,010.80.
④ Capital surplus - other capital surplus decreased by RMB 64,734,580.48 this year. Reasons: a. As the employee stock ownershipplan has reached the release stage and the stock options has entered exercise period, a capital surplus of RMB 62,532,782.24 istransferred to share capital premium; b.The disposal of affiliated companies this year, with RMB 2,201,798.24 of other capitalsurplus recognized transferred out under the equity method upon the time of disposal.
42. Treasury stock
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Shares of the Company repurchased for employee stock programs or stock option incentives | 2,291,973,146.75 | 177,655,190.77 | 2,191,097,591.05 | 278,530,746.47 |
Total | 2,291,973,146.75 | 177,655,190.77 | 2,191,097,591.05 | 278,530,746.47 |
Other explanations, including the increase and decrease in the current period and explanation of reasons for changes:
As of December 31, 2023, there were cumulatively 12,901,311.00 treasury stock, representing 0.38% of the total share capital of theCompany.
(1) Repurchase of treasury stock in the current period
The Company held the Tenth Meeting of the Sixth Session of the Board of Directors on October 26, 2023, during which the Boarddeliberated and approved the Proposal on the Repurchase of the Company's Shares by means of Centralized Bidding, among others. Itagreed that the Company would repurchase its shares by means of centralized bidding trading for the Employee Stock Ownership Planor the Stock Option Incentive Plan at a price of not more than RMB25.49/share, and that the total amount of the funds to be used forthe repurchase wouldn't be less than RMB 500 million and not more than RMB 700 million, with an implementation period of 12months from the date of the approval of this repurchase by the Board. As of December 31, 2023, a total of 9,632,700.00 shares of theCompany had been repurchased under this share repurchase proposal.
(2) Transfer of treasury stock in the current period
67,338,040 shares in the Company's specific securities repurchase account for repurchase were transferred to the special account relatedto the Company's "Home No. 6" Employee Stock Ownership Plan at RMB 7 per share on a non-trading basis, and 3,658,800 shares inthe Company's specific securities repurchase account for repurchase were transferred to the special account related to the Company's"Home No. 7" Employee Stock Ownership Plan at RMB 9.19 per share on a non-trading basis, all of which received the "Confirmationof Securities Transfer Registration" issued by the Shenzhen Branch of China Securities Depository & Clearing Corporation.
43. Other comprehensive income
Unit: RMB
Item | Opening balance | 2023 | Closing balance | |||||
Amount incurred before income tax in the current period | Less: Recorded in other comprehensive income for the previous period and transferred in profit or loss for the current period | Less: Recorded in other comprehensive income for the previous period and transferred in undistributed profits for the current period | Less: Income tax expenses | Amount after tax attributable to the parent company | Attributed after tax to minority shareholders | |||
I. Other comprehensive income that cannot be subsequently reclassified into profit or loss | 49,127,050.37 | -119,814,848.69 | -92,161,581.61 | -27,653,267.08 | -43,034,531.24 | |||
Changes in the fair value of investments in other equity instruments | 49,127,050.37 | -119,814,848.69 | -92,161,581.61 | -27,653,267.08 | -43,034,531.24 | |||
II. Other comprehensive income that will be reclassified into profit or loss | 73,250,283.99 | -67,721,492.41 | -71,150,692.64 | 3,429,200.23 | 2,099,591.35 | |||
Including: other comprehensive income that can be converted into profit or loss under the equity method | -12,650.40 | -12,650.40 | -12,650.40 | |||||
Difference from translation of financial statements in foreign currency | 73,250,283.99 | -67,708,842.01 | -71,138,042.24 | 3,429,200.23 | 2,112,241.75 | |||
Total other comprehensive incomes | 122,377,334.36 | -187,536,341.10 | -163,312,274.25 | -24,224,066.85 | -40,934,939.89 |
Other explanations, including the adjustment of the effective part of cash flow hedging gains and losses into the initially recognizedamount of the hedged item:
Other comprehensive income that cannot be subsequently reclassified into profit and loss: Under the item of changes in the fair valueof investments in other equity instruments, RMB -27,653,267.08 is attributable to minority shareholders after tax, which is the equityof other partners of the fund company. The statement is presented in other non-current liabilities.Other comprehensive income that will be reclassified into profit or loss: Under the item of difference from translation of financialstatements in foreign currency, RMB 3,429,200.23 is attributable to minority shareholders after tax. Of which, RMB 1,593,397.38 isthe equity of other partners of the fund company. The statement is presented in other non-current liabilities.
44. Specific reserve
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Safety production expenses | 7,551,472.89 | 6,000,159.22 | 1,551,313.67 | |
Total | 7,551,472.89 | 6,000,159.22 | 1,551,313.67 |
45. Surplus reserve
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Statutory surplus reserve | 1,446,536,121.51 | 218,530,482.45 | 1,665,066,603.96 | |
Total | 1,446,536,121.51 | 218,530,482.45 | 1,665,066,603.96 |
Explanation of surplus reserve, including the increase and decrease in the current period and explanation of reasons for changes:
According to the Company Law and the Articles of Association, the Company allocates 10% of net profits to the statutory surplusreserve. The Company does not need to allocate further amounts if the cumulative amount of the statutory surplus reserve reaches morethan 50% of the registered capital.The Company may extract any surplus reserves after extracting the statutory surplus reserve. Any surplus reserve may be used to coverthe losses of previous years or increase the share capital after approval.
46. General risk reserve
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Reserve for risks in financing factoring business | 6,081,200.00 | 6,081,200.00 |
Note: According to the Notice by the General Office of the China Banking and Insurance Regulatory Commission of Strengtheningthe Supervision and Administration of Commercial Factoring Enterprises (YBJBF [2019] No. 205), the Group allocates 1% of theclosing balance of financing factoring business to the provision for risks.
47. Undistributed profits
Unit: RMB
Item | 2023 | 2022 |
Undistributed profits at the end of last period before adjustment | 16,507,798,239.34 | 15,372,823,358.48 |
Adjustments to the total undistributed profits at the beginning of the period (upward +, downward -) | 1,753,356.25 | |
Undistributed profits at the beginning of the period after adjustment | 16,509,551,595.59 | 15,372,823,358.48 |
Plus: Net profit attributable to the owner of the parent company in the current period | 1,088,076,730.88 | 1,749,181,131.83 |
Less: Withdrawal of statutory surplus reserve | 218,530,482.45 | |
Common stock dividends payable | 340,516,294.90 | 668,411,117.00 |
Add: Disposal of investments in other equity instruments | 54,204,866.03 | |
Undistributed profits at the end of the period | 17,038,581,549.12 | 16,507,798,239.34 |
Details of the adjustment of the undistributed profits at the beginning of the period:
1) The undistributed profits affected by the retroactive adjustment in accordance with Accounting Standards for Business Enterprisesand the related new regulations at the beginning of the period is RMB 0.00.
2) The undistributed profits affected by the changes in accounting policy at the beginning of the period is RMB 1,753,356.25.
3) The undistributed profits affected by the correction of major accounting errors at the beginning of the period is RMB 0.00.
4) The undistributed profits affected by the change of consolidation scope caused by the common control at the beginning of theperiod is RMB 0.00.
5) The undistributed profits affected by other adjustments at the beginning of the period is RMB 0.00.
48. Operating revenue and cost of sales
Unit: RMB
Item | 2023 | 2022 | ||
Revenue | Cost of sales | Revenue | Cost of sales | |
Main business | 95,885,691,189.51 | 87,326,051,000.75 | 102,966,939,788.80 | 91,509,198,680.69 |
Other business | 2,688,211,083.63 | 2,427,013,209.24 | 1,927,384,373.46 | 1,724,277,862.59 |
Total | 98,573,902,273.14 | 89,753,064,209.99 | 104,894,324,162.26 | 93,233,476,543.28 |
Whether the lower of the audited net profit before and the audited net profit after deducting non-recurring gains and losses is negative? Yes ? NoBreakdown information on revenue and cost of sales:
Unit: RMB
Classification of contracts | Division 1 | Total | ||
Revenue | Cost of sales | Revenue | Cost of sales | |
Business type | ||||
Including: | ||||
Electronic components | 95,885,691,189.51 | 87,326,051,000.75 | 95,885,691,189.51 | 87,326,051,000.75 |
Other business income | 2,688,211,083.63 | 2,427,013,209.24 | 2,688,211,083.63 | 2,427,013,209.24 |
By product | ||||
Precision components | 12,991,833,787.27 | 10,329,768,695.82 | 12,991,833,787.27 | 10,329,768,695.82 |
Smart audio device | 24,185,269,052.84 | 22,555,549,272.05 | 24,185,269,052.84 | 22,555,549,272.05 |
Smart hardware | 58,708,588,349.40 | 54,440,733,032.88 | 58,708,588,349.40 | 54,440,733,032.88 |
Other business income | 2,688,211,083.63 | 2,427,013,209.24 | 2,688,211,083.63 | 2,427,013,209.24 |
By business regions | ||||
Including: | ||||
Domestic | 7,180,017,243.40 | 6,612,077,879.45 | 7,180,017,243.40 | 6,612,077,879.45 |
Overseas | 91,393,885,029.74 | 83,140,986,330.54 | 91,393,885,029.74 | 83,140,986,330.54 |
By sales channel | ||||
Including: | ||||
Direct selling | 98,164,328,961.68 | 89,396,202,983.71 | 98,164,328,961.68 | 89,396,202,983.71 |
Distribution | 409,573,311.46 | 356,861,226.28 | 409,573,311.46 | 356,861,226.28 |
Total | 98,573,902,273.14 | 89,753,064,209.99 | 98,573,902,273.14 | 89,753,064,209.99 |
Information about performance obligations:
NoneInformation about the trading price apportioned to remaining performance obligations:
NoneInformation about variable consideration in contracts:
None
Significant contract changes or significant transaction price adjustmentsNone
49. Taxes and surcharges
Unit: RMB
Item | 2023 | 2022 |
City maintenance and construction tax | 46,734,999.87 | 66,516,485.50 |
Education surcharge | 14,688,215.43 | 20,113,757.39 |
Housing property tax | 77,267,139.98 | 72,739,156.82 |
Land use tax | 20,383,547.91 | 12,404,902.13 |
Vehicle and vessel use tax | 30,785.06 | 50,823.89 |
Stamp duties tax | 71,773,016.90 | 75,852,578.16 |
Local education surcharges | 12,871,438.36 | 19,015,218.97 |
Local water conservancy construction fund | 160,251.76 | |
Water resource tax | 42.00 | 230.00 |
Environmental protection tax | 95,164.14 | 77,095.67 |
Other offshore taxes | 200,492.64 | |
Total | 244,044,842.29 | 266,930,500.29 |
Other explanations:
Please see Note VI. "Taxes", for details of the criteria for the accrual of various taxes and surcharges.
50. General and administrative expenses
Unit: RMB
Item | 2023 | 2022 |
Employee benefits | 1,378,056,739.51 | 1,167,274,863.96 |
Share-based apportioned payment | 123,216,341.40 | 465,535,747.22 |
Office expenses | 150,877,872.27 | 165,198,225.61 |
Consulting fees | 101,711,188.82 | 54,679,471.16 |
Depreciation cost | 123,107,194.98 | 99,094,366.24 |
Amortization of intangible assets | 77,773,070.95 | 59,414,772.34 |
Recruitment and training fees | 28,411,122.33 | 49,182,108.76 |
Rental fees | 13,213,201.57 | 13,335,129.18 |
Entertainment expenses | 32,629,383.74 | 27,173,035.83 |
Travel expenses | 24,076,778.72 | 29,354,745.57 |
Security expenses | 33,212,938.64 | 40,398,042.61 |
Property insurance | 11,593,701.38 | 8,548,266.15 |
Other expenses | 104,934,819.24 | 115,316,870.83 |
Total | 2,202,814,353.55 | 2,294,505,645.46 |
51. Selling expenses
Unit: RMB
Item | 2023 | 2022 |
Employee benefits | 384,050,131.79 | 377,301,268.94 |
Share-based apportioned payment | 16,712,392.29 | 44,473,697.53 |
Item | 2023 | 2022 |
Rental fees | 5,501,255.44 | 5,212,260.22 |
Sales commission | 14,212,724.06 | 19,599,978.50 |
Insurance expenses | 15,520,423.96 | 17,874,354.85 |
Entertainment expenses | 23,518,137.66 | 15,172,602.51 |
Travel expenses | 27,461,090.78 | 16,715,766.24 |
Office expenses | 22,905,403.44 | 21,541,427.80 |
Depreciation cost | 15,677,618.00 | 14,823,196.77 |
Other expenses | 2,591,126.00 | 15,584,288.69 |
Total | 528,150,303.42 | 548,298,842.05 |
52. Research and development expenses
Unit: RMB
Item | 2023 | 2022 |
Employee benefits | 2,284,730,251.52 | 2,210,936,970.20 |
Direct input cost | 1,119,216,253.90 | 1,822,282,210.46 |
Amortization of intangible assets | 686,732,187.64 | 628,118,767.01 |
Depreciation cost | 220,771,853.79 | 165,357,575.09 |
Share-based apportioned payment | 44,742,283.43 | 126,807,377.90 |
Design fees | 76,956,945.55 | 33,121,202.94 |
Other expenses | 282,819,675.59 | 239,901,051.39 |
Total | 4,715,969,451.42 | 5,226,525,154.99 |
53. Financial expenses
Unit: RMB
Item | 2023 | 2022 |
Interest expense | 544,691,878.33 | 303,539,076.90 |
Interest income | -279,661,791.52 | -189,356,256.02 |
Exchange gains and losses | -10,282,609.82 | -21,268,273.24 |
Other | 97,027,671.65 | 56,208,534.10 |
Total | 351,775,148.64 | 149,123,081.74 |
54. Other income
Unit: RMB
Sources of other income | 2023 | 2022 |
Government grants | 331,548,590.64 | 351,383,799.43 |
Tax benefit included | 36,245,618.91 | 15,097,894.50 |
Return of individual tax handling fee | 5,066,847.41 | 6,724,169.25 |
Total | 372,861,056.96 | 373,205,863.18 |
55. Gains on changes in fair value
Unit: RMB
Sources of gains on changes in fair value | 2023 | 2022 |
Financial assets held for trading | 8,036,980.76 | 98,748,584.12 |
Including: Gains on changes in fair | -82,278,125.54 | 164,830,672.72 |
Sources of gains on changes in fair value | 2023 | 2022 |
value due to derivative financial instruments | ||
Financial liabilities held for trading | 77,483,472.73 | -171,961,305.71 |
Other non-current financial assets | 30,388,698.95 | 16,131,386.62 |
Total | 115,909,152.44 | -57,081,334.97 |
56. Investment income
Unit: RMB
Item | 2023 | 2022 |
Return on long-term equity investments measured by the equity method | -28,435,998.08 | 2,298,237.32 |
Investment income from disposal of long-term equity investments | 24,822,113.27 | 287,784,190.15 |
Investment income from disposal of financial assets held for trading | -142,047,909.35 | -309,999,635.90 |
Investment income from products such as certificates of deposits | 85,249,228.88 | 20,466,167.48 |
Profits arising from derecognised financial assets at amortised cost | -5,724,287.70 | -23,037,232.06 |
Discount losses of financing receivables that meet the conditions for derecognition | -7,257,012.91 | -13,755,696.61 |
Total | -73,393,865.89 | -36,243,969.62 |
57. Credit impairment losses
Unit: RMB
Item | 2023 | 2022 |
Credit impairment losses on bad debts of accounts receivable | 19,420,684.72 | -16,834,146.02 |
Credit impairment losses on bad debts of other receivables | -2,025,618.66 | 2,613,550.10 |
Total | 17,395,066.06 | -14,220,595.92 |
58. Asset impairment losses
Unit: RMB
Item | 2023 | 2022 |
Loss of inventory falling prices and impairment loss of contract performance costs | -299,626,936.00 | -1,203,279,438.25 |
Impairment loss of fixed assets | -579,464,921.66 | |
Impairment loss of contract assets | 1,194.69 | |
Total | -299,625,741.31 | -1,782,744,359.91 |
59. Gains on disposal of assets
Unit: RMB
Source of income from disposal of assets | 2023 | 2022 |
Gains on disposal of fixed assets | -7,467,928.73 | -47,534,013.23 |
Income from disposal of intangible assets | 2,600,000.00 |
Source of income from disposal of assets | 2023 | 2022 |
Income from disposal of right-of-use assets | 2,830,270.21 | -364,926.50 |
Total | -2,037,658.52 | -47,898,939.73 |
60. Non-operating income
Unit: RMB
Item | 2023 | 2022 | Amount recorded in current non-recurring gains and losses |
Gains from damage and liquidation of non-current assets | 21,927.79 | 464,291.05 | 21,927.79 |
Other | 34,795,207.29 | 21,013,169.39 | 34,795,207.29 |
Total | 34,817,135.08 | 21,477,460.44 | 34,817,135.08 |
Other explanations:
Non-operating income - other incomes that are mainly unpayable amounts and liquidated damages collected, etc.
61. Non-operating expenses
Unit: RMB
Item | 2023 | 2022 | Amount recorded in current non-recurring gains and losses |
Donation given | 3,204,356.82 | 4,251,201.32 | 3,204,356.82 |
Losses from damage and liquidation of non-current assets | 146,689,062.70 | 117,427,303.86 | 146,689,062.70 |
Other | 2,959,378.43 | 1,051,865.31 | 2,959,378.43 |
Total | 152,852,797.95 | 122,730,370.49 | 152,852,797.95 |
62. Income tax expenses
(1) Income tax expense statement
Unit: RMB
Item | 2023 | 2022 |
Current income tax expenses | 73,435,975.15 | 164,522,364.79 |
Deferred income tax expenses | -301,690,868.04 | -446,312,602.15 |
Total | -228,254,892.89 | -281,790,237.36 |
(2) Adjustment process of accounting profit and income tax expenses
Unit: RMB
Item | 2023 |
Total profit | 791,156,310.70 |
Income tax expense calculated at statutory/applicable tax rate | 118,673,446.60 |
Impact of different tax rates applied to subsidiaries | -96,593,877.62 |
Impact of adjusting income tax in previous periods | -18,705,277.74 |
Impact of non-taxable income | -930,017.51 |
Impact of non-deductible costs, expenses and losses | 9,396,171.14 |
Impact of deductible loss of unrecognized deferred tax assets in previous period | -37,028,429.29 |
Impact of deductible temporary differences or deductible losses of | 271,089,406.31 |
Item | 2023 |
unrecognized deferred tax assets in current period | |
Changes in balance of beginning deferred tax assets/liabilities due to tax rate adjustment | 236,413.17 |
Impact of the weighted deduction of research and development expenses | -423,580,388.30 |
Income tax credits for environmental equipment | -208,407.07 |
Impact of share-based payment | -50,888,864.93 |
Impact of subsidiary write-off | 284,932.35 |
Income tax expenses | -228,254,892.89 |
63. Other comprehensive income
Please see the Note VII. 43. for details.
64. Cash flow statement items
(1) Cash related to operating activities
Cash received related to other operating activities
Unit: RMB
Item | 2023 | 2022 |
Government grants | 318,295,104.60 | 343,436,863.16 |
Current account | 1,192,795,974.16 | 1,258,014,604.41 |
Interest income | 276,592,905.39 | 183,221,677.04 |
Other | 187,507,561.62 | 139,368,250.38 |
Total | 1,975,191,545.77 | 1,924,041,394.99 |
Cash paid related to other operating activities
Unit: RMB
Item | 2023 | 2022 |
Research and development expenses | 1,471,298,287.84 | 2,084,157,358.43 |
Current account | 1,184,408,340.40 | 1,129,587,037.65 |
Office expenses | 173,783,275.71 | 186,739,653.41 |
Rental fees | 18,714,457.01 | 18,547,389.40 |
Consulting fees | 101,711,188.82 | 54,679,471.16 |
Entertainment expenses | 56,147,521.40 | 42,345,638.34 |
Travel expenses | 51,537,869.50 | 46,070,511.81 |
Insurance expenses | 27,114,125.34 | 26,422,621.00 |
Sales commission | 14,212,724.06 | 19,599,978.50 |
Other | 148,572,678.30 | 239,051,045.79 |
Total | 3,247,500,468.38 | 3,847,200,705.49 |
(2) Cash related to investing activities
Cash received related to other investing activities
Unit: RMB
Item | 2023 | 2022 |
Option premiums received | 37,885,965.58 | 21,653,530.71 |
Margin recovered on investments in foreign | 72,806,657.72 |
Item | 2023 | 2022 |
exchange derivative transactions | ||
Total | 110,692,623.30 | 21,653,530.71 |
Significant cash received related to investing activities
Unit: RMB
Item | 2023 | 2022 |
Cash received from foreign exchange derivative investment operations | 514,370,207.66 | 223,389,534.87 |
Cash received on disposal of long-term equity investments | 672,983,096.09 | |
Principal recovered on maturity of term deposits | 3,902,853,504.00 | |
Total | 4,417,223,711.66 | 896,372,630.96 |
Cash paid related to other investing activities
Unit: RMB
Item | 2023 | 2022 |
Margin paid on investments in foreign exchange derivative transactions | 72,806,657.72 | |
Net cash paid for disposal of subsidiaries and other business units | 10,363,395.50 | |
Total | 72,806,657.72 | 10,363,395.50 |
Significant cash paid related to investing activities
Unit: RMB
Item | 2023 | 2022 |
Cash paid to acquire long-term equity investments | 600,000,000.00 | 250,000,000.00 |
Principal to purchase large deposits | 390,000,000.00 | 520,817,430.56 |
Principal deposited in term deposits | 3,498,371,185.32 | 487,522,000.00 |
Total | 4,488,371,185.32 | 1,258,339,430.56 |
(3) Cash related to financing activities
Cash received related to other financing activities
Unit: RMB
Item | 2023 | 2022 |
Various securities in other currencies recovered | 2,758,448,774.94 | 2,601,999,441.96 |
Interest income on raised funds | 3,068,886.13 | 6,134,578.99 |
Contributions from other partners of the fund company | 188,082,000.00 | 75,765,967.07 |
Subscription of employee stock ownership plan | 504,990,652.00 | |
Proceeds from the sale of treasury shares not meeting exercise conditions | 39,355,486.02 | |
Borrowings from non-financial institutions, etc. | 11,000,000.00 | |
Total | 3,504,945,799.09 | 2,683,899,988.02 |
Explanations on cash received related to other financing activities:
None
Cash paid related to other financing activities
Unit: RMB
Item | 2023 | 2022 |
Various security deposit payments for other monetary capital | 2,813,467,201.78 | 3,078,483,092.56 |
Rental fees payment | 111,526,372.99 | 128,750,261.16 |
Financing expense paid with borrowings | 9,000,000.00 | 103,495,260.30 |
Listing expense of the Goertek Microelectronics subsidiary | 2,180,318.91 | 4,263,871.42 |
Repurchase of treasury stock | 177,655,190.77 | |
Cash paid for acquisition of minority interests in subsidiaries | 23,273,750.00 | |
Repayment of borrowings from non-financial institutions and interest, etc. | 14,205,910.21 | |
Total | 3,151,308,744.66 | 3,314,992,485.44 |
Explanations of cash paid for other financing activities:
NoneChanges in liabilities arising from financing activities? Applicable ? Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Cash variations | Non-cash variations | Cash variations | Non-cash variations | |||
Short-term borrowings | 7,120,846,026.67 | 19,719,120,456.00 | 320,299,573.43 | 21,945,774,739.48 | 5,214,491,316.62 | |
Other accounts payable - dividends payable | 340,516,294.90 | 340,516,294.90 | ||||
Long-term borrowings (including those maturing within one year) | 3,198,791,555.56 | 5,854,624,000.01 | 390,198,380.70 | 1,866,605,832.83 | 7,577,008,103.44 | |
Lease liabilities (including those maturing within one year) | 573,531,279.93 | 194,049,887.86 | 111,526,372.99 | 11,387,559.91 | 644,667,234.89 | |
Total | 10,893,168,862.16 | 25,573,744,456.01 | 1,245,064,136.89 | 24,264,423,240.20 | 11,387,559.91 | 13,436,166,654.95 |
(4) Explanation on cash flows presented on a net basis
None
(5) Significant activities and financial effects that do not involve current cash flows but affect theCompany's financial position or may affect the Company's cash flows in the futureNone
65. Supplementary information for cash flow statement
(1) Supplementary information for cash flow statement
Unit: RMB
Supplementary information | Amount of current period | Amount in previous period |
1. Reconciliation of net profit to cash flow from operating activities | ||
Net profit | 1,019,411,203.59 | 1,791,018,384.79 |
Add: Provision for impairment of assets | 299,625,741.31 | 1,782,744,359.91 |
Credit impairment losses | -17,395,066.06 | 14,220,595.92 |
Depreciation of fixed assets, depletion of oil and gas assets and depreciation of bearer biological assets | 2,938,786,849.35 | 2,737,354,154.43 |
Depreciation of right-of-use assets | 128,357,416.63 | 132,043,964.75 |
Amortization of intangible assets | 775,354,156.85 | 688,160,164.63 |
Long-term prepaid expenses | 226,069,725.83 | 92,970,355.03 |
Losses on disposal of fixed assets, intangible assets and other long-term assets (Use "-" for gain) | 2,037,658.52 | 47,898,939.73 |
Loss on retirement of fixed assets (Use "-" for gain) | 146,667,134.91 | 116,963,012.81 |
Loss on changes in fair value (Use "-" for gain) | -115,909,152.44 | 57,081,334.97 |
Financial expenses (Use "-" for gain) | 458,210,031.50 | -67,001,475.56 |
Investment loss (Use "-" for gain) | 60,412,565.28 | -548,959.05 |
Decrease in deferred tax assets (Use "-" for gain) | -111,839,854.19 | -874,406,201.70 |
Increase in deferred tax liabilities (Use "-" for decrease) | -190,279,710.41 | 426,185,243.00 |
Decrease in inventory (Use "-" for increase) | 7,430,247,429.32 | -6,108,031,112.07 |
Decrease of operating receivable items (Use "-" for increase) | 2,106,126,474.60 | -2,061,081,561.57 |
Increase in operational payables (Use "-" for decrease) | -7,184,440,025.66 | 8,882,166,156.12 |
Other | 180,445,664.451 | 659,376,008.54 |
Net cash flow from operating activities | 8,151,888,243.38 | 8,317,113,364.68 |
2. Significant investing and financing activities that do not involve cash receipts and payments: | ||
Debts transferred to capital | ||
Convertible corporate bonds due within one year | ||
Fixed assets under finance lease | ||
3. Net changes in cash and cash equivalents: |
Supplementary information | Amount of current period | Amount in previous period |
Closing balance of cash | 13,152,726,641.78 | 10,799,993,468.81 |
Less: Opening balance of cash | 10,799,993,468.81 | 9,137,900,902.04 |
Add: Closing balance of cash equivalents | ||
Less: Opening balance of cash equivalents | ||
Net increase in cash and cash equivalents | 2,352,733,172.97 | 1,662,092,566.77 |
Note: 1 The other RMB 180,445,664.45 was generated from share-based payments, as detailed in Note XV. 4. "Share-basedPayment Expenses for the Current Period".
(2) Net cash paid for the acquisition of subsidiaries in the current period
Unit: RMB
Amount | |
Cash or cash equivalents paid in the period for business combination occurring in the period | 588,524,771.29 |
Including: | |
Uphoton Technology (Shaoxing) Co., Ltd. | 588,524,771.29 |
Less: Cash and cash equivalents held by the subsidiary on the date of purchase | 130,861,489.79 |
Including: | |
Uphoton Technology (Shaoxing) Co., Ltd. | 130,861,489.79 |
Including: | |
Net cash paid to acquire subsidiary | 457,663,281.50 |
(3) Net amount of cash received for disposal of subsidiaries in the current period
Unit: RMB
Amount | |
Cash or cash equivalents received in the current period from the disposal of subsidiaries | 0.00 |
Less: Cash and cash equivalents held by the Company on the date of loss of control | 0.00 |
Plus: Cash or cash equivalents received in the current period from the disposal of subsidiary in prior periods | 2,205,000.00 |
Including: | |
Qingdao Resonance Venture Capital Management Co., Ltd. | 2,205,000.00 |
Net cash received on disposal of subsidiaries | 2,205,000.00 |
(4) Composition of cash and cash equivalents
Unit: RMB
Item | Closing balance | Opening balance |
I. Cash | 13,152,726,641.78 | 10,799,993,468.81 |
Including: Cash on hand | 60,959.92 | 33,671.21 |
Bank deposits that can be used for payment at any time | 13,030,309,956.22 | 10,799,959,797.60 |
Other monetary funds that can be used for payment at any time | 122,355,725.64 |
Item | Closing balance | Opening balance |
II. Cash and cash equivalents balance at the end of the period | 13,152,726,641.78 | 10,799,993,468.81 |
(5) Presentation of assets falling under the category of cash and cash equivalents restricted in use
None
(6) Monetary capital other than cash and cash equivalents
Unit: RMB
Item | Amount of current period | Amount in previous period | Reasons for not being categorized as cash and cash equivalents |
Bank deposits - term deposits and accrued interest | 128,296,588.99 | 490,129,084.15 | Term of more than three months |
Other monetary capital | 1,456,289,098.94 | 1,392,748,538.84 | Restriction of use |
Total | 1,584,585,687.93 | 1,882,877,622.99 |
(7) Description of other significant activities
None
66. Notes on items in the statement of changes in equity
Indicate the "Other" items for which adjustments have been made to the prior year-end balance and the amount of such adjustments:
None
67. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Item | Closing foreign currency balance | Converted exchange rate | Closing converted RMB balance |
Cash at bank and on hand | 2,433,851,049.95 | ||
Including: USD | 230,164,405.72 | 7.0827 | 1,630,185,436.39 |
EUR | 733,794.18 | 7.8592 | 5,767,035.22 |
HKD | 1,463,699.77 | 0.90622 | 1,326,434.01 |
JPY | 52,217,737.00 | 0.050213 | 2,622,009.23 |
KRW | 284,841,404.77 | 0.005514 | 1,570,615.51 |
TWD | 5,786,384.00 | 0.230557 | 1,334,091.34 |
VND | 2,687,704,355,708.82 | 0.000292 | 784,809,671.87 |
DKK | 5,918,355.00 | 1.053630 | 6,235,756.38 |
Accounts receivable | 10,490,308,374.73 | ||
Including: USD | 1,479,162,188.93 | 7.0827 | 10,476,462,035.53 |
EUR | 78,342.34 | 7.8592 | 615,708.12 |
HKD | |||
JPY | 9,061,056.00 | 0.050213 | 454,982.80 |
KRW | 71,774,637.29 | 0.005514 | 395,765.35 |
TWD | 47,750,423.80 | 0.230557 | 11,009,194.46 |
VND | 4,694,138,581.21 | 0.000292 | 1,370,688.47 |
Item | Closing foreign currency balance | Converted exchange rate | Closing converted RMB balance |
Other receivables | 38,115,094.26 | ||
Including: USD | 1,502,063.73 | 7.0827 | 10,638,666.78 |
EUR | 960.00 | 7.8592 | 7,544.83 |
JPY | 149,326,688.00 | 0.050213 | 7,498,140.98 |
KRW | 252,023,691.00 | 0.005514 | 1,389,658.63 |
TWD | 1,747,793.00 | 0.230557 | 402,965.91 |
VND | 62,069,801,366.18 | 0.000292 | 18,124,382.00 |
DKK | 51,000.00 | 1.053630 | 53,735.13 |
Short-term borrowings | 1,104,215,895.17 | ||
Including: USD | 147,645,600.57 | 7.0827 | 1,045,729,495.16 |
VND | 200,295,890,446.31 | 0.000292 | 58,486,400.01 |
Accounts payable | 12,127,485,014.60 | ||
Including: USD | 1,654,951,358.41 | 7.0827 | 11,721,523,986.21 |
EUR | 864,357.45 | 7.8592 | 6,793,158.07 |
HKD | 90,000.00 | 0.90622 | 81,559.80 |
JPY | 27,656,995.38 | 0.050213 | 1,388,740.71 |
KRW | 2,891,931.97 | 0.005514 | 15,946.11 |
GBP | 4,252.90 | 9.0411 | 38,450.89 |
VND | 1,356,471,678,893.57 | 0.000292 | 396,089,730.24 |
DKK | 1,474,372.00 | 1.053630 | 1,553,442.57 |
Other payables | 11,454,241.60 | ||
Including: USD | 628,315.76 | 7.0827 | 4,450,172.03 |
EUR | 2,880.00 | 7.8592 | 22,634.50 |
JPY | 53,166,572.00 | 0.050213 | 2,669,653.08 |
KRW | 94,893,322.00 | 0.005514 | 523,241.78 |
TWD | 3,499,525.00 | 0.230557 | 806,839.99 |
VND | 7,189,251,520.82 | 0.000292 | 2,099,261.44 |
DKK | 837,522.45 | 1.053630 | 882,438.78 |
Current portion of non-current liabilities | 568,619,254.17 | ||
Including: USD | 74,937,875.62 | 7.0827 | 530,762,491.65 |
JPY | 143,364,878.90 | 0.050213 | 7,198,780.66 |
VND | 104,993,088,548.53 | 0.000292 | 30,657,981.86 |
Lease liabilities | 66,831,355.80 | ||
Including: USD | 2,568,504.07 | 7.0827 | 18,191,943.78 |
JPY | 73,176,220.01 | 0.050213 | 3,674,397.54 |
VND | 153,989,775,615.32 | 0.000292 | 44,965,014.48 |
Long-term borrowings | 1,047,470,751.86 | ||
Including: USD | 147,891,447.03 | 7.0827 | 1,047,470,751.86 |
EUR | |||
HKD |
(2) Explanation of overseas operating entities, including, the main overseas operating places, bookkeepingbase currency and selection basis for important overseas operating entities, and the reasons for changes inbookkeeping base currency.? Applicable ? Not applicable
Name of the important overseas operating entity | Main location of business operation | Accounting currency | Accounting currency selection basis | Whether there is any change in the accounting currency |
Goertek Vina Co., Ltd | Vietnam | VND | Legal currency of the country where it is registered | No |
Goertek Technology Vina Company Limited | Vietnam | VND | Legal currency of the country where it is registered | No |
Goertek (HongKong) Co., Limited | Hong Kong | USD | Currency adopted in business receipts and payments | No |
68. Lease
(1) The Company acts as the lessee
? Applicable ? Not applicableVariable lease payments not included in the measurement of lease liabilities? Applicable ? Not applicableLease costs for short-term leases or low-value assets with simplified treatment? Applicable ? Not applicable
① For information on right-of-use assets and lease liabilities, please see Note VII. 18 and 37.
② Information on items recorded in current profit or loss and relevant asset costs
Item | Amount for the current period (RMB) | Amount for the previous period (RMB) |
Short-term lease expense (simplified treatment applies) | 32,797,509.77 | 70,892,405.81 |
Interest on lease liabilities included in finance expenses | 18,846,223.92 | 17,092,607.19 |
Income derived from the sublease of the right-of-use assets | 661,958.40 | 1,196,937.46 |
③ Cash outflows related to leases
Item | Category of cash flows | Amount for the current period (RMB) | Amount for the previous period (RMB) |
Cash for repayment of principal and interest of lease liabilities | Cash outflows from financing activities | 111,526,372.99 | 128,750,261.16 |
Payment for short-term leases and leases for low-value assets (simplified treatment applies) | Cash outflows from operating activities | 32,797,509.77 | 70,892,405.81 |
Total | 144,323,882.76 | 199,642,666.97 |
Situations involving sale and leaseback transactionsNone
(2) The Company acts as the lessor
Operating leases as the lessor? Applicable ? Not applicable
Unit: RMB
Item | Lease income | Including: Income related to variable lease payments not included in lease receipts |
Other business income | 138,288,596.78 | |
Total | 138,288,596.78 |
Finance leases as the lessor? Applicable ? Not applicableUndiscounted lease receipts for each of the next five years? Applicable ? Not applicableReconciliation of undiscounted lease receipts to net investment in leasesNone
(3) Gains or losses on sales under finance leases recognized as a manufacturer or distributor
? Applicable ? Not applicable
69. Others
NoneVIII. Research and Development Expenditures
Unit: RMB
Item | 2023 | 2022 |
Employee benefits | 2,582,668,704.22 | 2,512,120,442.26 |
Direct input cost | 1,317,327,855.54 | 2,050,496,920.16 |
Amortization of intangible assets | 686,736,441.00 | 628,231,765.42 |
Depreciation cost | 261,114,008.41 | 183,966,651.97 |
Share-based apportioned payment | 44,742,283.43 | 129,159,362.00 |
Design fees | 79,996,429.65 | 36,530,138.39 |
Other expenses | 286,173,001.41 | 283,297,996.40 |
Total | 5,258,758,723.66 | 5,823,803,276.60 |
Including: Expensed R&D expenditure | 4,715,969,451.42 | 5,226,525,154.99 |
Capitalized R&D expenditure | 542,789,272.24 | 597,278,121.61 |
1. R&D projects eligible for capitalization
Unit: RMB
Item | Opening balance | Increased amount in the current period | Decreased amount in the current period | Closing balance | ||||
Internal development costs | Other | Increase in business combination | Recognized as intangible assets | Transfer to current profit and loss | Other | |||
Project 1 | 51,729,692.37 | 183,440,177.79 | 235,169,870.16 | |||||
Project 2 | 23,624,892.56 | 38,341,210.21 | 61,966,102.77 | |||||
Project 3 | 32,810,345.82 | 32,810,345.82 | ||||||
Project 4 | 24,275,113.11 | 24,275,113.11 | ||||||
Project 5 | 13,895,824.91 | 13,895,824.91 | ||||||
Other | 285,823,526.98 | 250,026,600.40 | 457,162,678.29 | 78,687,449.09 |
Item | Opening balance | Increased amount in the current period | Decreased amount in the current period | Closing balance | ||||
Internal development costs | Other | Increase in business combination | Recognized as intangible assets | Transfer to current profit and loss | Other | |||
Total | 361,178,111.91 | 542,789,272.24 | 457,162,678.29 | 446,804,705.86 |
Significant capitalized R&D projects
Item | R&D progress | Estimated completion time | Expected form of economic benefits | Timing of start of capitalization | Specific basis for start of capitalization |
Project 1 | 95% | January 31, 2024 | Generate revenue | February 28, 2022 | Qualified engineering validation test |
Project 2 | 95% | January 31, 2024 | Generate revenue | February 28, 2022 | Qualified engineering validation test |
Impairment provision for development expendituresNone
2. Important outsourced R&D projects in progress
NoneIX. Changes in Consolidation Scope
1. Business combination not under common control
(1) Business combination not under the same control occurring during the period
Unit: RMB
Name of the acquired entity | Date of equity acquisition | Cost of equity acquisition | Equity ratio acquired | Method of equity acquisition | Acquisition date | Basis for determining the acquisition date | Revenue of the acquired entity from the acquisition date to the end of the period | Net profit of the acquired entity from the acquisition date to the end of the period | Cash flow of the acquired entity from the acquisition date to the end of the period |
Uphoton Technology (Shaoxing) Co., Ltd. | May 30, 2022 | 200,000,000.00 | 10.53% | Monetary capital injection | November 20, 2023 | Actual acquisition of control | 13,925,424.03 | -19,402,755.46 | -74,646,122.83 |
Other explanations:
Uphoton Technology (Shaoxing) Co., Ltd. includes its headquarters and its subsidiaries Uphoton Technology (Beijing) Co., Ltd.,Jiaxing Uphoton Optoelectronics Technology Co., Ltd., Shaoxing UPhoton Precision Technology Co., Ltd., Hangzhou UphotonOptoelectronics Technology Co., Ltd., Tianjin Uphoton Technology Co., Ltd., Nanjing Uphoton Technology Co., Ltd., Hefei 3DOptoLink Technology Co., Ltd., and Jiaxing Guochao Optoelectronics Technology Co.,Ltd., totaling nine companies.
(2) Cost of combination and goodwill
Unit: RMB
Cost of combination | Uphoton Technology (Shaoxing) Co., Ltd. |
—Cash | 588,524,771.29 |
—Fair value of non-cash assets | |
- Fair value of debts issued or assumed | |
- Fair value of equity securities issued | 215,372,464.72 |
- Fair value of contingent considerations |
Cost of combination | Uphoton Technology (Shaoxing) Co., Ltd. |
- Fair value at acquisition date of equity interests held prior to acquisition date | 206,164,383.56 |
- Others | |
Total cost of combination | 1,010,061,619.57 |
Less: Fair value of net identifiable assets acquired | 421,886,825.09 |
Amount by which goodwill/cost of combination is less than the fair value of identifiable net assets acquired | 588,174,794.48 |
Method of determining the fair value of the cost of combination:
The fair value of the net assets being consolidated is determined in accordance with the valuation results determined by the asset-basedmethod, and the cost of combination is determined by negotiation in accordance with the valuation results determined by the incomeapproach.The subsidiary, Goertek Optical Technology Co., Ltd, acquired 100% of the equity held by the original shareholder of UphotonTechnology (Shaoxing) Co., Ltd. by a combination of directed capital increase and cash payment, including the new registered capital(paid-in capital) of 60,280,745.00 shares, with a par value of RMB1 per share. The issue price was determined in accordance with thevaluation results determined by the income approach.Explanations of contingent considerations and changes theretoNoneMajor reasons for large goodwill:
At the acquisition date, goodwill resulted from the excess of the acquirer's cost of combination over the fair value of the net identifiableassets of the acquired entity.
(3) Identifiable assets and liabilities of the acquired entity at the acquisition date
Unit: RMB
Uphoton Technology (Shaoxing) Co., Ltd. | ||
Fair value at the acquisition date | Book value at the acquisition date | |
Assets: | ||
Cash at bank and on hand | 131,355,031.79 | 131,355,031.79 |
Accounts receivable | 12,986,883.49 | 12,986,883.49 |
Inventories | 17,977,451.45 | 12,636,493.40 |
Fixed assets | 22,080,645.00 | 20,896,103.66 |
Intangible assets | 277,469,592.12 | 29,674,119.84 |
Construction in progress | 129,304,411.07 | 134,522,249.80 |
Other assets | 62,937,765.26 | 62,937,765.26 |
Liabilities: | ||
Borrowings | 151,181,875.001 | 151,181,875.00 |
Accounts payable | 18,979,206.48 | 18,979,206.48 |
Deferred tax liabilities | 41,722,056.31 | |
Other liabilities | 20,239,756.46 | 21,200,754.32 |
Net asset | 421,988,885.93 | 213,646,811.44 |
Less: Minority interests | 102,060.84 | -1,278,622.39 |
Net assets acquired | 421,886,825.09 | 214,925,433.83 |
Note: 1 represents long-term borrowingsMethod of determining the fair value of identifiable assets and liabilities:
The fair value of identifiable assets and liabilities is determined in accordance with the valuation results determined by the asset-basedmethod.
Contingent liabilities of the acquired entity assumed in a business combination:
None
(4) Gains or losses arising from the remeasurement of equity interests held prior to the date of acquisition at fair valueWhether there are transactions in which a business combination is realized in steps through multiple transactions and control isobtained during the reporting period.? Yes ? No
Unit: RMB
Name of the acquired entity | Time of acquisition of equity interest previously held prior to the acquisition date | Percentage of equity interest acquired prior to the acquisition date | Acquisition cost of equity interest held prior to the acquisition date | Acquisition method of equity interest held prior to the acquisition date | Carrying amount of equity interest held prior to the acquisition date at the acquisition date | Fair value of equity interest previously held prior to the acquisition date at the acquisition date | Gains or losses arising from the remeasurement of equity interests previously held prior to the acquisition date at fair value at the acquisition date | Method of determining the fair value of equity interests previously held prior to the acquisition date at the acquisition date and major assumptions | Amounts transferred to investment earnings or retained earnings from other comprehensive income related to previously held equity interests prior to the acquisition date |
Uphoton Technology (Shaoxing) Co., Ltd. | May 30, 2022 | 10.53% | 200,000,000.00 | Monetary capital injection | 183,544,068.53 | 206,164,383.56 | 24,822,113.27 | Income Approach | 2,201,798.24 |
(5) Explanations relating to cases in which the combination consideration or the fair value of the acquiree's identifiable assetsor liabilities cannot be reasonably determined at the acquisition date or at the end of the period in which the combinationtook placeNone
(6) Explanation of other matters:
None
2. Business combination under common control
None
3. Counter purchase
None
4. Disposal of subsidiaries
Whether there is any transaction or event of loss of control of subsidiaries in the current period? Yes ?NoWhether there is any step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control in thecurrent period? Yes ?No
5. Change of consolidation scope for other reasons
Explain the changes in the consolidation scope caused by other reasons (such as newly established subsidiaries, liquidationsubsidiaries, etc.) and relevant information:
During the current period, the Company acquired 3 subsidiaries through establishment. They are respectively Chongqing Goertek AutoTechnology Co., Ltd., Goertek Smart Technology Vina Co.,Ltd., and GMI Technology GmbH.The Company deregistered one of its subsidiaries, Kunshan Goertek Electronics Co., Ltd. during this period.
6. Others
NoneX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the Group
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Weifang Goertek Electronics Co., Ltd. | RMB 1,636,601,925 | Weifang | Weifang | Production | 85.89% | 14.11% | Business combination involving enterprises under common control |
Goertek Microelectronics Inc. | RMB 582,080,100 | Qingdao | Qingdao | R&D, production & sales | 87.75% | Establishment | |
Qingdao Goertek Microelectronics Research Institute Co., Ltd. | RMB 100,000,000 | Qingdao | Qingdao | R&D, production & sales | 87.75% | Establishment | |
Qingdao Goertek Intelligent Sensor Co., Ltd. | RMB 500,000,000 | Qingdao | Qingdao | R&D, production & sales | 87.75% | Establishment | |
Weifang Goertek Microelectronics Co., Ltd. | RMB 500,000,000 | Weifang | Weifang | R&D, production & sales | 87.75% | Business combination not involving enterprises under common control | |
Rongcheng Goertek Microelectronics Co., Ltd. | RMB 300,000,000 | Rongcheng | Rongcheng | R&D, production & sales | 87.75% | Establishment | |
Beijing Goertek Microelectronics Co., Ltd. | RMB 5,000,000 | Beijing | Beijing | Sales | 87.75% | Establishment | |
Shenzhen Goertek Microelectronics Co., Ltd. | RMB 5,000,000 | Shenzhen | Shenzhen | R&D and sales | 87.75% | Establishment |
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Wuxi Goertek Microelectronics Co., Ltd. | RMB 5,000,000 | Wuxi | Wuxi | R&D | 87.75% | Establishment | |
Shanghai Goertek Microelectronics Co., Ltd. | RMB 10,000,000 | Shanghai | Shanghai | R&D | 87.75% | Establishment | |
Goertek Microelectronics Holdings Co., Ltd. | USD 22.4035 million | Hong Kong | Hong Kong | Investment | 87.75% | Establishment | |
Goertek Microelectronics (Hong Kong) Co., Ltd. | USD 0.5 million | Hong Kong | Hong Kong | Trade | 87.75% | Establishment | |
GOERTEK MICROELECTRONICS CORPORATION | USD 1 million | USA | USA | R&D and sales | 87.75% | Establishment | |
GOERTEK MICROELECTRONICS KOREA CO.,LTD | KRW 300 million | Korea | Korea | R&D and sales | 87.75% | Establishment | |
GOERTEK MICROELECTRONICS VIETNAM COMPANY LIMITED | VND 904,657 million | Vietnam | Vietnam | Production & sales | 87.75% | Establishment | |
GMI Technology GmbH | EUR 50,000 | Austria | Austria | R&D and sales | 87.75% | Establishment | |
Weifang Goertek Trading Co., Ltd. | RMB 50,000,000 | Weifang | Weifang | Import and export trade | 100.00% | Establishment | |
Yishui Goertek Electronics Co., Ltd. | RMB 30,000,000 | Yishui | Yishui | Production & sales | 100.00% | Establishment | |
Yili Precision Manufacturing Co., Ltd. | RMB 330,000,000 | Weifang | Weifang | Production & sales | 100.00% | Establishment | |
Weifang Goertek Communication Technology Co., Ltd. | RMB 10,500,000 | Weifang | Weifang | Production & sales | 100.00% | Business combination not involving enterprises under common control | |
Goertek Optical Technology Co., | RMB 981,960,745 | Weifang | Weifang | Production & sales | 61.10% | Business combination |
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Ltd | not involving enterprises under common control | ||||||
Goertek Optical Technology (Qingdao) Co., Ltd | RMB 100,000,000 | Qingdao | Qingdao | R&D, production & sales | 61.10% | Establishment | |
Goertek Optical Technology (Shanghai) Co., Ltd | RMB 100,000,000 | Shanghai | Shanghai | R&D, production & sales | 61.10% | Establishment | |
Uphoton Technology (Shaoxing) Co., Ltd. | RMB 214,000 | Shaoxing | Shaoxing | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
Uphoton Technology (Beijing) Co., Ltd. | RMB 10,000,000 | Beijing | Beijing | R&D | 61.10% | Business combination not involving enterprises under common control | |
Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | RMB 250,000,000 | Jiaxing | Jiaxing | R&D, production & sales | 61.10% | Business combination not involving enterprises under common control | |
Shaoxing Uphoton Precision Technology Co., Ltd. | RMB 115,000,000 | Shaoxing | Shaoxing | R&D, production & sales | 61.10% | Business combination not involving enterprises under common control | |
Hangzhou Uphoton Optoelectronics Technology Co., Ltd. | RMB 45,000,000 | Hangzhou | Hangzhou | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
Tianjin Uphoton | RMB 20,000,000 | Tianjin | Tianjin | R&D and | 61.10% | Business |
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Technology Co., Ltd. | sales | combination not involving enterprises under common control | |||||
Nanjing Uphoton Technology Co., Ltd. | RMB 10,000,000 | Nanjing | Nanjing | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
Hefei 3D OptoLink Technology Co., Ltd. | RMB 5,315,789 | Hefei | Hefei | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
Jiaxing Guochao Optoelectronics Technology Co.,Ltd. | RMB 3,333,300 | Jiaxing | Jiaxing | R&D and sales | 42.77% | Business combination not involving enterprises under common control | |
Goertek Technology Co., Ltd. | RMB 950,000,000 | Qingdao | Qingdao | R&D | 100.00% | Establishment | |
Beijing Goertek Technology Co., Ltd. | RMB 10,000,000 | Beijing | Beijing | R&D | 100.00% | Business combination involving enterprises under common control | |
Qingdao Goertek Acoustics Technology Co., Ltd. | RMB 20,000,000 | Qingdao | Qingdao | R&D and trading | 100.00% | Establishment | |
Shenzhen Goertek Technology Co., Ltd. | RMB 50,000,000 | Shenzhen | Shenzhen | R&D and design | 100.00% | Business combination involving enterprises under common control | |
Shanghai Goertek | RMB 10,000,000 | Shanghai | Shanghai | R&D | 100.00% | Establishment |
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Technology Co., Ltd. | |||||||
Nanjing Goertek Technology Co., Ltd. | RMB 50,000,000 | Nanjing | Nanjing | R&D | 100.00% | Establishment | |
Weifang Lokomo Precision Industry Co., Ltd. | RMB 50,000,000 | Weifang | Weifang | Production & sales | 100.00% | Business combination involving enterprises under common control | |
Goertek Investment Co., Ltd. | RMB 100,000,000 | Shanghai | Shanghai | Investment | 100.00% | Establishment | |
Beijing Goertek Investment Management Co., Ltd. | RMB 50,000,000 | Beijing | Beijing | Investment asset management | 100.00% | Establishment | |
Olive Smart Hardware Investment Center LP | RMB 300,000,000 | Qingdao | Qingdao | Equity investment | 100.00% | Establishment | |
Dongguan JoyForce Precision Manufacturing Co., Ltd. | RMB 180,000,000 | Dongguan | Dongguan | R&D, production & sales | 100.00% | Establishment | |
Goertek Intelligence Technology Co., Ltd. | RMB 350,000,000 | Dongguan | Dongguan | R&D, production & sales | 100.00% | Establishment | |
Rongcheng Goertek Technology Co., Ltd. | RMB 2,100,000,000 | Rongcheng | Rongcheng | R&D, production & sales | 100.00% | Establishment | |
Qingdao Goertek Commercial Factoring Co., Ltd. | RMB 50,000,000 | Qingdao | Qingdao | Commercial factoring | 100.00% | Establishment | |
Nanning Goertek Electronics Co., Ltd | RMB 80,000,000 | Nanning | Nanning | R&D, production & sales | 100.00% | Establishment | |
Nanning Goertek Trading Co., Ltd. | RMB 10,000,000 | Nanning | Nanning | Trade | 100.00% | Establishment | |
Xi'an Goertek Electronic Technology Co., | RMB 8,000,000 | Xi'an | Xi'an | R&D | 100.00% | Establishment |
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Ltd. | |||||||
Yishui TECO Electronic Technology Co., Ltd. | RMB 145,000,000 | Yishui | Yishui | R&D, production & sales | 100.00% | Establishment | |
Qingdao Resonance Phase I Venture Capital Fund Partnership (Limited Partnership) | RMB 757,580,000 | Qingdao | Qingdao | Investment | 52.80% | Establishment | |
Weifang Goertek Electronics Co., Ltd. | RMB 1,350,000,000 | Weifang | Weifang | Production & sales | 100.00% | Establishment | |
Qingdao Goertek Horizons Technology Co., Ltd | RMB 100,000,000 | Qingdao | Qingdao | Production & sales | 100.00% | Establishment | |
Weifang High-tech Zone Goertek Education Center | RMB 300,000 | Weifang | Weifang | Education and training | 100.00% | Establishment | |
Chongqing Goertek Auto Technology Co., Ltd. | RMB 10,000,000 | Chongqing | Chongqing | R&D, production & sales | 100.00% | Establishment | |
Goertek Vina Co., Ltd | USD 40 million | Vietnam | Vietnam | Production & sales | 98.00% | 2.00% | Establishment |
Goertek Technology Korea Co., Ltd. | KRW 1,535.135 million | Korea | Korea | R&D and trading | 100.00% | Establishment | |
Goertek (HongKong) Co., Limited | USD 1 million | Hong Kong | Hong Kong | Trade and investment | 100.00% | Establishment | |
Goertek Technology Vina Company Limited | USD 120 million | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
Goertek Precision Industry Vietnam Company Limited | USD 100 million | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
Goertek Smart Technology Vina Co.,Ltd. | USD 60 million | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
Goertek Europe ApS | DKK 50,000 | Denmark | Denmark | Sales services | 100.00% | Establishment |
Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
Direct | Indirect | ||||||
Goertek Seiki Technology Co., Ltd. | JPY 80 million | Japan | Japan | R&D, production & sales | 100.00% | Establishment | |
Optimas Capital Partners Fund LP | USD 56,488,691.9 | Hong Kong | Hong Kong | Investment | 76.92% | Establishment | |
Goertek Electronics, Inc. | USD 0.1 million | USA | USA | R&D and trading | 100.00% | Business combination not involving enterprises under common control | |
Goertek Technology Taiwan Co., Ltd. | TWD 28.899 million | Taiwan | Taiwan | Trade | 100.00% | Establishment | |
Goertek Technology Japan Co., Ltd. | JPY 50 million | Japan | Japan | R&D and trading | 100.00% | Establishment | |
Goertek Technology (HongKong) Co., Limited | USD 1 million | Hong Kong | Hong Kong | Trade and investment | 100.00% | Establishment |
Explanation of the shareholding ratio in subsidiaries different from the voting ratio:
NoneBasis for holding half or less of the voting power but still controlling the investee, and holding more than half of the voting rights butnot controlling the investee:
NoneBasis for controlling important structured entities included in the consolidation scope:
NoneBasis for determining whether a company is an agent or a principal:
None
(2) Important non-wholly-owned subsidiary
None
(3) Main financial information of major non-wholly-owned subsidiaries
None
(4) Major restrictions on using the Group's assets and paying off the Group's debts
None
(5) Financial support or other support provided to structured entities included in consolidated financial statementsNone
2. The share of owner's equity in the subsidiary has changed and still controls the transactions of thesubsidiary
(1) Explanation of changes in the share of shareholders' equity in subsidiaries
① In January 2023, the subsidiary Qingdao Resonance Phase I Venture Capital Fund Partnership (Limited Partnership) accepted aunilateral capital increase of RMB 80.8080 million from the minority shareholders, with paid-in capital of RMB 80.8080 million. Afterthe completion of this capital increase, the Company's shareholding in Qingdao Resonance Phase I Venture Capital Fund Partnership(Limited Partnership) changed from 72.00% to 52.80%, and the capital surplus increased by RMB 652,164.33 as a result of thistransaction.
② In October 2023, the Company purchased 1.8468% of the equity held by Jiang Long, a minority shareholder of its subsidiary,Goertek Microelectronics Inc. with its own funds of RMB 23,273,750.00. After the completion of this transaction, the Company'sshareholding in Goertek Microelectronics Inc. changed from 85.90% to 87.75%, and the capital surplus increased by RMB57,719,238.80 as a result of this transaction.
③ In November 2023, the subsidiary Goertek Optical Technology Co., Ltd. purchased 100% of the equity of Uphoton Technology(Shaoxing) Co., Ltd. in which the Company is a shareholder, (hereinafter referred to as "Uphoton Technology"). Among them, theCompany purchased 67.541% equity interest in Uphoton Technology (including 10.526% equity interest held by the Company and
0.818% equity interest held by a related party) with its own funds of approximately RMB 795 million, and purchased 32.459% equityinterest in Uphoton Technology by increasing its registered capital by RMB 60,280,745.00 through directional share capital increase.After the completion of this capital increase, the Company's shareholding in Goertek Optical Technology Co., Ltd. changed from 65.10%to 61.10%, and the capital surplus was increased by RMB 125,729,953.05 as a result of this transaction.
(2) The impact of transactions on minority' equity and the equity attributable to the parent company
Unit: RMB
Qingdao Resonance Phase I Venture Capital Fund Partnership (Limited Partnership) | Goertek Microelectronics Inc. | Goertek Optical Technology Co., Ltd | |
Purchase cost/disposal consideration | 80,808,000.00 | 23,273,750.00 | 215,372,464.72 |
—Cash | 80,808,000.00 | 23,273,750.00 | |
—Fair value of non-cash assets | 215,372,464.72 | ||
Total purchase cost/disposal consideration | 80,808,000.00 | 23,273,750.00 | 215,372,464.72 |
Less: The net asset share of a subsidiary calculated according to the proportion of the equity acquired/disposed | 80,155,835.67 | 80,992,988.80 | 89,642,511.67 |
Difference | 652,164.33 | 57,719,238.80 | 125,729,953.05 |
Including: Adjustment of capital surplus | 652,164.33 | 57,719,238.80 | 125,729,953.05 |
Adjusted surplus reserve | |||
Undistributed profits after adjustment |
3. Rights and interests in joint venture arrangements and associated enterprises
(1) Important joint ventures and associated enterprises
None
(2) Main financial information of important joint ventures
None
(3) Main financial information of important associated enterprises
None
(4) Summary of financial information of unimportant joint ventures and associates
Unit: RMB
Closing balance/amount incurred in current period | Opening balance/amount incurred in previous period | |
Joint ventures: | ||
The total of the following items calculated according to the shareholding ratio | ||
Associated enterprises: | ||
Total book value of investment | 760,220,882.07 | 361,008,671.83 |
The total of the following items calculated according to the shareholding ratio | ||
—Net profit | -28,435,998.08 | 2,298,237.32 |
—Other comprehensive income | -12,650.40 | -15,493,341.86 |
—Total comprehensive income | -28,448,648.48 | -13,195,104.54 |
(5) Statement of important restrictions on the ability of joint ventures or associates to transfer capital to theCompany
None
(6) Excess losses incurred by joint ventures or associated enterprises
None
(7) Unrecognized commitments related to the investment in joint ventures
None
(8) Contingent liabilities related to the investment in joint ventures or associatesNone
4. Important joint operation
None
5. Rights and interests in structured entities not included in consolidated financial statementsExplanation of structured entities not recorded in the consolidated financial statements:
None
6. Others
None
XI. Government Grants
1. Government grants recognized at the end of the reporting period based on amounts receivable
? Applicable ? Not applicableReasons for not receiving the projected amount of government grants at the projected time point? Applicable ? Not applicable
2. Liability items involving government grants
? Applicable ? Not applicable
Unit: RMB
Accounting items | Opening balance | Amount of new subsidies in current period | Amount included in non-operating income of the current period | Amount transferred to other income in the current period | Other changes in the current period | Closing balance | Related to assets/income |
Deferred income | 532,374,144.38 | 65,520,570.00 | 91,341,623.56 | 36,000.001 | 506,517,090.82 | Asset-related | |
Deferred income | 13,000,000.00 | 432,432.48 | 12,567,567.52 | Income-related | |||
Total | 532,374,144.38 | 78,520,570.00 | 91,774,056.04 | 36,000.00 | 519,084,658.34 |
Note: 1 Decrease in the current period - Other decrease of RMB 36,000.00 represents payments to project partners after atransfer to other accounts payable.
3. Government grants recognized in gains and losses for the current period
? Applicable ? Not applicable
Unit: RMB
Accounting items | Amount incurred during the period | Amount incurred in the previous period |
Other income - directly credited | 239,774,534.60 | 185,375,500.06 |
Other income - transferred from deferred income | 91,774,056.04 | 166,008,299.37 |
Total | 331,548,590.64 | 351,383,799.43 |
XII. Risks Related to Financial Instruments
1. Various risks arising from financial instruments
The major financial instruments of the Group include equity investments, accounts receivable, borrowings and accounts payable, etc.For details on the financial instruments, please see this Note VII. Relevant Items. Risks related to the financial instruments and theGroup's risk management policy used for reducing these risks is stated as follows. The Group's management manages and monitorsthese exposures to ensure that these risks are controlled within a limited scope.The Group analyzes the reasonableness of risk variables and the impact of potential changes on current loss or profit or shareholder'sequity using sensitivity analysis techniques. As risk variables rarely change in isolation, and the correlation between any two of therisk variables will have a great effect on the final impact amount of a certain risk variable, the following disclosures are made assumingthat each variable changes in isolation.(I) Risk management goals and policiesThe Group's risk management aims to reach appropriate balancing between risks and benefits, to minimize the negative impact of riskson the Group's operating results, and to maximize the interests of shareholders and other equity investors. Based on these riskmanagement goals, the Group's basic strategy for risk management is to determine and analyze various risks faced by the Group,
establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliablemanner to control the risks within a limited scope.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate change. The Group's exposure to foreign exchange mainly involvesUS dollars. Except that the Company and its subsidiaries purchase and sell in USD, EUR, JPY, VND, DKK, HKD, TWD and KRW,other main business of the Group is measured and settled in RMB. As of December 31, 2023, the Company's monetary items in foreigncurrencies are detailed in Note VII.67. Except for the assets or liabilities, certain financial assets for trading, certain financial liabilitiesfor trading, certain investments in other equity instruments, certain other non-current financial assets and certain other non-currentassets described in that table, which are in foreign currencies, the Group's assets and liabilities are mainly in RMB. The foreignexchange risks arising from the assets and liabilities denominated in foreign currencies may have an impact on the operating results ofthe Group.The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risks. The Company has largevolume of export sales, and needs to import some raw materials. Some equipment for research, development, production and testingof the Company also needs to be purchased from abroad. The Company's export sales and imported raw materials are mainly settled inUSD. The depreciation of USD and the appreciation of RMB will reduce the procurement cost of imported raw materials, but adverselyaffect the competitiveness of the Company's products in overseas markets. Considering the import of raw materials and export ofproducts, the appreciation of RMB against USD will affect the Company's profitability to some extent.Sensitivity analysis over foreign exchange risks:
When other variables remain unchanged, the possible reasonable changes in USD currency rate may have the following effects oncurrent gains and losses, as well as shareholders' equity:
Item | Change in exchange rate | 2023 | 2022 | ||
Impact on net profit (RMB) | Impact on shareholders' equity (RMB) | Impact on net profit (RMB) | Impact on shareholders' equity (RMB) | ||
USD | 3% appreciation against RMB | -51,954,213.77 | -53,372,215.77 | -17,700,129.48 | -20,864,011.13 |
USD | 3% depreciation against RMB | 51,954,213.77 | 53,372,215.77 | 17,700,129.48 | 20,864,011.13 |
(2) Interest rate risk - cash flow change risk
The Group's risk of cash flow changes of financial instruments arising from interest rate changes mainly involves floating rate bankborrowings. At present, the interest rate of the Group's bank borrowings is mainly floating rate.Interest rate risk sensitivity analysis:
The sensitivity analysis over interest rate risks is conducted based on the following assumptions:
? Changes in market interest rates affect the interest income or expense of financial instruments with variable interest rates;
? For fixed-rate financial instruments measured at fair value, changes in market interest rates only affect their interest incomeor expense;
? For derivative financial instruments designated as hedge instruments, changes in market interest rates affect their fair value,and all interest rate hedging is expected to be highly effective;
? Changes in fair values of derivative financial instruments and other financial assets and liabilities are calculated using thediscounted cash flow method at the market interest rate on the balance sheet date.On the basis of the above assumptions, when other variables remain unchanged, the possible reasonable changes in interest rates mayhave the following effects on current gains and losses, as well as shareholders' equity:
Item | Interest rate change | 2023 | 2022 | ||
Impact on net profit (RMB) | Impact on shareholders' equity (RMB) | Impact on net profit (RMB) | Impact on shareholders' equity (RMB) | ||
Bank borrowings | Float up by 10% | -44,382,185.25 | -44,186,512.56 | -24,185,541.46 | -24,185,541.46 |
Bank borrowings | Float down by 10% | 44,382,185.25 | 44,186,512.56 | 24,185,541.46 | 24,185,541.46 |
(3) Other price risks
None
2. Credit risk
As of December 31, 2023, the maximum credit risk exposure that may cause the Group's financial loss resulted from the loss in theGroup's financial assets caused by the counterparty's failure to perform its contractual obligations.In order to reduce credit risk, the Group sets up a team to determine the credit limit, conduct credit approval, and implement othermonitoring procedures to ensure that necessary measures are taken to recover overdue claims. Additionally, the Company cooperateswith commercial insurance institutions to insure for high-risk clients, so as to reduce the risk of bad debts from credit sale. In addition,the Group reviews the recovery of each individual receivable on each balance sheet date to ensure that adequate bad debt provision ismade for unrecoverable amounts. Therefore, the Group's management believes that the credit risk undertaken by the Group has beengreatly reduced.The Group has put in place necessary policies to ensure that all its clients have good credit records.The Group's non-cash cash at bank and on hand are mainly deposited with financial institutions with good credit. The managementbelieves that there is no significant credit risk, and it is expected that the default of counterparty will not cause significant losses to theGroup.
(1) There is no overdue and undepreciated amount in the Group's receivables;
(2) The analysis of financial assets with individual impairment involves the judgment on the factors to be considered in the impairmentof the financial assetsNone
3. Liquidity risk
When managing liquidity risk, the Group maintains and monitors cash and cash equivalents the management deems sufficient to meetthe Group's business needs and reduce the impact of cash flow fluctuations. The management of the Group monitors the use of bankborrowings and ensure the compliance with borrowing agreements.The Group uses bank borrowings and equity instruments as its main sources of funds. As of December 31, 2023, the unused bank creditline of the Group was RMB 40.933 billion (December 31, 2022: RMB 31.583 billion).
2. Hedging
None
3. Financial assets
(1) Classification by mode of transfer
? Applicable ? Not applicable
(2) Financial assets derecognized due to transfers
? Applicable ? Not applicable
Unit: RMB
Item | Mode of financial asset transfer | Amount of financial assets derecognized | Gains or losses related to derecognition |
Financing receivables | Endorsement by notes | 1,509,375.67 |
Item | Mode of financial asset transfer | Amount of financial assets derecognized | Gains or losses related to derecognition |
Total | 1,509,375.67 |
(3) Financial assets resulting from ongoing involvement in asset transfers
? Applicable ? Not applicable
Unit: RMB
Item | Mode of asset transfer | Amount of assets from continued involvement | Amount of liabilities from continued involvement |
Notes receivable | Discounted notes | 100,000,000.00 | 100,000,000.00 |
Accounts receivable | Factoring with recourse | 75,000,000.00 | 75,000,000.00 |
Total | 175,000,000.00 | 175,000,000.00 |
XIII. Disclosure of Fair Value
1. The ending fair value of assets and liabilities measured at fair value
Unit: RMB
Item | Fair value of closing | |||
The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
I. Continuous fair value measurement | - | - | - | - |
(I) Financial assets held for trading | 43,356,500.16 | 104,229,894.43 | 439,858,697.10 | 587,445,091.69 |
1. Financial assets measured at fair value through profit and loss | 43,356,500.16 | 104,229,894.43 | 439,858,697.10 | 587,445,091.69 |
(1) Debt instrument investment | 3,053,700.00 | 3,053,700.00 | ||
(2) Equity instrument investment | 43,356,500.16 | 436,804,997.10 | 480,161,497.26 | |
(3) Derivative financial assets | 104,229,894.43 | 104,229,894.43 | ||
(II) Investment in other equity instruments | 591,269,883.71 | 591,269,883.71 | ||
(III) Accounts receivable financing | 9,059,230.11 | 9,059,230.11 | ||
(IV) Other non-current financial assets | 322,640,244.40 | 322,640,244.40 | ||
Total assets consistently measured at fair value | 43,356,500.16 | 104,229,894.43 | 1,362,828,055.32 | 1,510,414,449.91 |
(5) Financial liabilities held for trading | 129,579,785.95 | 129,579,785.95 | ||
Derivative financial liabilities | 129,579,785.95 | 129,579,785.95 | ||
Total liabilities continuously measured at fair value | 129,579,785.95 | 129,579,785.95 |
Item | Fair value of closing | |||
The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
II. Non-continuous fair value measurement | - | - | - | - |
2. Determination basis for the market price of continuous and non-continuous first-level fair valuemeasurement items
The closing price at the end of the year is used as the basis for determining the market price of the shares of foreign listed companiesheld by the Company.
3. Qualitative and quantitative information on the valuation techniques and important parameters used incontinuous and non-continuous second-level fair value measurement itemsDirectly or indirectly observable input values of related assets or liabilities except first-level inputs.
4. Qualitative and quantitative information on the valuation techniques and important parameters used incontinuous and non-continuous third-level fair value measurement itemsBasis for determining fair value according to the value assessed under the income method and the asset-based method and the net bookasset.
5. Adjustment information and sensitivity analysis of non-observable parameters between beginning andclosing book value for continuous third-level fair value measurement itemsNone
6. Conversion among different levels in the current period, reasons for conversion and the policy fordetermining conversion time points in continuous fair value measurement items,
None
7. Changes in valuation techniques during the current period and reasons for changesNone
8. Fair value of financial assets and financial liabilities not measured at fair valueNone
9. Others
None
XIV. Related Parties and Related Transactions
1. Information about the parent company of the Company
Parent company name | Registration place | Business nature | Registered capital | Shareholding ratio of the Company to the Company | Proportion of voting rights of the Company in the Company |
Goertek Group Co., Ltd. | Weifang | Equity investment management, etc. | RMB 100 million | 14.84% | 14.84% |
Explanation of the parent company of the Company
The Company's parent company and final parent company is Goertek Group Co., Ltd.The final controller of the Company is Goertek Group Co., Ltd.
2. Information on subsidiaries of the Company
For details of the Company's subsidiaries, please see Note X.1. "Interests in Subsidiaries".
3. Information on joint ventures and associated enterprises of the CompanyFor details of significant joint ventures or associates of the Company, please see Note X.3. "Interests in Joint Venture Arrangementsor Associated Enterprises".Other joint ventures or associates with which the Company has entered into related-party transactions during the current period, orwith which the Company has entered into related-party transactions in prior periods, resulting in balances, are summarized asfollows:
None
4. Information on other related parties
Name of other related parties | Relationship between other related parties and the Company |
Jiang Bin | Actual controller and chairman of board of the Company |
Hu Shuangmei | Actual controller |
Goertek Robotics Co., Ltd. | Business of the same actual controller |
Weifang Goer Farm Co., Ltd. | Business of the same actual controller |
Weifang Goer Manor Trading Co., Ltd. | Business of the same actual controller |
Weifang Goer Manor Food & Beverage Co., Ltd. | Business of the same actual controller |
Weifang Goer Property Service Co., Ltd. | Business of the same actual controller |
Weifang Point Hotel Management Co., Ltd. | Business of the same actual controller |
Weihai Goer Ecological Agriculture Co., Ltd. | Business of the same actual controller |
Dotcom Investment Co., Ltd. | Enterprise controlled by an affiliated natural person |
Beijing Bubble Lab Co., Ltd. | Enterprise controlled by an affiliated natural person |
Weifang Daozao Catering Company Co., Ltd. | Business of the same actual controller in the past 12 months |
Weifang Goer Real Estate Co., Ltd. | Business of the same actual controller |
Weifang Dotcom Catering Management Co., Ltd. | Enterprise controlled by an affiliated natural person |
Qingdao Dotcom Catering Management Co., Ltd. | Enterprise controlled by an affiliated natural person |
Bei Ge (Weifang) Intelligent technology Co., Ltd | Business of the same actual controller |
Weifang Goer School | Business of the same actual controller |
Shandong Goer Education Group Co., Ltd. | Business of the same actual controller |
Weifang High-Tech Zone Yasong Linju Kindergarten | Business of the same actual controller |
Weifang High-Tech Zone Zhuohe Kindergarten | Business of the same actual controller |
Dynaudio (Shanghai) Co., Ltd. | Enterprise controlled by an affiliated natural person |
Goerdyna Holding A/S | Enterprise controlled by an affiliated natural person |
Qingdao Point Hotel Management Co., Ltd. | Business of the same actual controller |
Wemake (Weihai) Digital Creative Technology Co., Ltd. | Business of the same actual controller |
Wemake (Qingdao) Digital Creative Technology Co., Ltd. | Business of the same actual controller |
Goerlife Co., Ltd. | Business of the same actual controller |
Weihai Point Hotel Management Co., Ltd. | Business of the same actual controller |
Weifang Goerdyna Technology Co., Ltd. | Enterprise controlled by an affiliated natural person |
Shenzhen Goerdyna Technology Co., Ltd. | Enterprise controlled by an affiliated natural person |
Name of other related parties | Relationship between other related parties and the Company |
GoerDyna Technology Co., Ltd. | Enterprise controlled by an affiliated natural person |
Beijing Xiaoniao Tingting Technology Co., Ltd | Business of the same actual controller, de-registered in December 2022 |
Wemake (Beijing) Digital Creative Technology Co., Ltd. | Business of the same actual controller |
Weifang Dotcom Garden Floriculture Co., Ltd | Enterprise controlled by an affiliated natural person |
Little Bird Co., Ltd | Enterprise controlled by an affiliated natural person |
Anqiu Wenge Vocational Training School Co., Ltd. | Business of the same actual controller |
AKM Industrial Company Limited | The Company's associate, externally disposed of in July 2022 |
Gongqingcheng Zhuiyuan Phase II Venture Capital Partnership (Limited Partnership) | An enterprise actually controlled by Mr. Liu Chengmin, the former director of the Company and a joint investor of GravityXR Electronics and Technology Co., Ltd. |
Shenzhen Zhuiyuan Fortune Investment Partnership (Limited Partnership) | An enterprise actually controlled by Mr. Liu Chengmin, the former director of the Company and a joint investor of Uphoton Technology (Shaoxing) Co., Ltd. |
Jiang Long | Person acting in concert with the actual controller |
Zhuoguang Xiangrong Technology (Tianjin) Partnership (Limited Partnership) | An entity controlled by affiliated natural persons as managing partners |
Other explanations:
Bei Ge (Weifang) Intelligent technology Co., Ltd, formerly known as Beihang Goer (Weifang) Intelligent Robot Co., Ltd.; Goerdyna-Holding A/S, formerly known as Dynaudio Holding A/S.
5. Related party transactions
(1) Related transactions involving commodity purchase, and rendering and receipt of servicesStatement of purchasing goods/accepting labor services
Unit: RMB
Related parties | Related transactions | 2023 | Approved trading limit | Exceed the trading limit or not | 2022 |
AKM Industrial Company Limited | Purchasing raw materials | 45,308,209.26 | No | 203,633,398.93 | |
Weifang Goer Farm Co., Ltd. | Purchasing goods and services | 30,152,987.69 | No | 49,549,859.14 | |
Weifang Point Hotel Management Co., Ltd. | Purchasing goods and services | 18,459,368.72 | No | 16,117,887.30 | |
Goertek Group Co., Ltd. | Purchasing goods and services | 10,560,575.44 | No | 7,040,506.52 | |
Weifang Goer Manor Trading Co., Ltd. | Purchasing goods | 9,106,065.56 | No | 8,499,702.97 | |
Weifang Goer Property Service Co., Ltd. | Purchasing goods and services | 8,537,213.68 | No | 8,688,125.52 | |
Qingdao Virtual Reality Institute Co., Ltd. | Purchasing goods and services | 5,978,660.00 | No | 11,968,898.11 | |
Goerlife Co., Ltd. | Purchasing goods | 5,740,373.09 | No | ||
Little Bird Co., Ltd | Purchasing goods | 3,707,246.20 | No | 1,023,036.15 | |
Qingdao Point Hotel Management Co., Ltd. | Receiving labor service | 3,420,930.82 | No | 4,594,268.33 | |
Weifang Goer Manor | Purchasing goods | 2,722,466.87 | No | 2,643,410.57 |
Related parties | Related transactions | 2023 | Approved trading limit | Exceed the trading limit or not | 2022 |
Food & Beverage Co., Ltd. | |||||
Dotcom Investment Co., Ltd. | Purchasing goods and services | 1,961,849.91 | No | 1,015,175.98 | |
Weifang Dotcom Catering Management Co., Ltd. | Purchasing goods and services | 1,509,999.78 | No | 2,752,240.44 | |
Weihai Goer Ecological Agriculture Co., Ltd. | Purchasing goods | 1,278,997.98 | No | 1,778,882.75 | |
Weifang Goerdyna Technology Co., Ltd. | Purchasing goods | 1,164,161.55 | No | 7,057,138.25 | |
Bei Ge (Weifang) Intelligent technology Co., Ltd | Purchasing goods and services | 930,387.64 | No | 3,960,783.47 | |
Wemake (Qingdao) Digital Creative Technology Co., Ltd. | Purchasing goods and services | 388,732.33 | No | 74,709.16 | |
Wemake (Weihai) Digital Creative Technology Co., Ltd. | Purchasing goods and services | 160,610.11 | No | 256,136.46 | |
Dynaudio (Shanghai) Co., Ltd. | Purchasing goods | 154,867.26 | No | ||
Weifang Daozao Catering Company Co., Ltd. | Purchasing goods and services | 90,943.71 | No | 303,917.60 | |
Beijing Bubble Lab Co., Ltd. | Purchasing goods and services | 77,080.00 | No | 2,312,197.60 | |
Weifang Dotcom Garden Floriculture Co., Ltd | Purchasing goods | 56,865.00 | No | 17,463.00 | |
Qingdao Dotcom Catering Management Co., Ltd. | Purchasing goods | 25,751.20 | No | 21,818.80 | |
Weihai Point Hotel Management Co., Ltd. | Receiving labor service | 6,520.00 | No | 14,876.00 | |
Goertek Robotics Co., Ltd. | Purchasing goods and services | 6,509.43 | No | 3,722,511.29 | |
Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | Purchasing goods | 2,982.00 | No | ||
Beijing Xiaoniao Tingting Technology Co., Ltd | Purchasing goods | No | 1,768,403.43 | ||
Weifang Goer School | Receiving labor service | No | 65,140.00 | ||
Wemake (Beijing) Digital Creative Technology Co., Ltd. | Receiving labor service | No | 61,072.39 |
Related parties | Related transactions | 2023 | Approved trading limit | Exceed the trading limit or not | 2022 |
Goerdyna Holding A/S | Purchasing goods and services | No | 13,356.22 | ||
Weifang Goer Real Estate Co., Ltd. | Receiving labor service | No | 3,600.00 |
Statement of sales of goods/rendering of services
Unit: RMB
Related parties | Related transactions | 2023 | 2022 |
Weifang Goerdyna Technology Co., Ltd. | Sales of goods and services | 69,547,848.39 | 29,201,690.39 |
Little Bird Co., Ltd | Sales of goods and services | 18,577,049.95 | 11,728,490.03 |
GoerDyna Technology Co., Ltd. | Rendering of service | 14,695,747.58 | |
Qingdao Virtual Reality Institute Co., Ltd. | Sales of goods and services | 2,274,163.05 | 2,011,217.85 |
Goertek Group Co., Ltd. | Sales of goods and services | 1,969,742.55 | 3,136,184.07 |
Goertek Robotics Co., Ltd. | Sales of goods and services | 1,781,327.65 | 1,535,597.08 |
Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | Sales of goods | 928,504.68 | 424,929.60 |
AKM Industrial Company Limited | Sales of goods | 806,403.77 | 7,937,930.55 |
Goerlife Co., Ltd. | Rendering of service | 794,500.99 | |
Qingdao Point Hotel Management Co., Ltd. | Rendering of service | 294,339.63 | |
Dotcom Investment Co., Ltd. | Rendering of service | 252,283.71 | |
Weifang Dotcom Catering Management Co., Ltd. | Sales of goods and services | 173,954.04 | 719,821.85 |
Weifang Goer Manor Trading Co., Ltd. | Sales of goods | 39,374.10 | 128,364.96 |
Bei Ge (Weifang) Intelligent technology Co., Ltd | Sales of goods | 22,950.00 | 677,865.74 |
Dynaudio (Shanghai) Co., Ltd. | Sales of goods and services | 14,908.64 | 132,629.36 |
Wemake (Qingdao) Digital Creative Technology Co., Ltd. | Rendering of service | 14,000.00 | |
Goerdyna Holding A/S | Sales of goods | 933.11 | 22,683.88 |
Beijing Xiaoniao Tingting Technology Co., Ltd | Sales of goods | 8,203,382.90 | |
Weifang Goer Farm Co., Ltd. | Sales of goods | 1,121,814.20 | |
GravityXR Electronics and Technology Co., Ltd. | Sales of goods | 578,775.60 | |
Anqiu Wenge Vocational Training School Co., Ltd. | Sales of goods | 22,641.51 |
Explanation of related party transactions in purchasing and selling goods, rendering and receiving labor servicesThe above related transactions with Uphoton Technology (Shaoxing) Co., Ltd. and its subsidiaries represent the amounts of relatedoperations prior to the date of the business combination.
(2) Related entrusted management/contracting and entrusted management/outsourcing
None
(3) Information of related lease
The Company acts as the lessor:
Unit: RMB
Name of lessee | Type of leased assets | Lease income recognized in current period | Lease income recognized in last period |
Weifang Goerdyna Technology Co., Ltd. | Building | 10,454,141.23 | 5,489,586.84 |
Shenzhen Goerdyna Technology Co., Ltd. | Building | 1,834,855.07 | |
Goerlife Co., Ltd. | Building | 285,057.26 | |
Weifang High-Tech Zone Yasong Linju Kindergarten | Building | 209,885.71 | 152,190.47 |
Bei Ge (Weifang) Intelligent technology Co., Ltd | Building | 196,812.00 | 175,318.29 |
Shandong Goer Education Group Co., Ltd. | Building | 53,175.80 | |
Weifang Point Hotel Management Co., Ltd. | Building | 52,283.19 | 317,976.42 |
Weifang Goer Farm Co., Ltd. | Building | 51,185.84 | |
Dotcom Investment Co., Ltd. | Building | 39,633.03 | 39,633.03 |
Wemake (Weihai) Digital Creative Technology Co., Ltd. | Building | 39,633.03 | 28,899.08 |
Weifang High-Tech Zone Zhuohe Kindergarten | Building | 24,000.00 | |
Goertek Group Co., Ltd. | Building | 7,217.70 | 12,735.85 |
Anqiu Wenge Vocational Training School Co., Ltd. | Building | 114,285.71 | |
Weifang Dotcom Catering Management Co., Ltd. | Building | 39,633.03 |
The Company acts as the lessee:
Unit: RMB
Name of lessor | Type of leased assets | Rental charges for simplified treatment of short-term leases and low-value asset leases (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rent paid | Interest expenses incurred on lease liabilities | Increased right-of-use assets | |||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||
Qingdao Virtual Reality Institute Co., Ltd. | Equipment | 564,889.38 | 615,087.00 | 638,325.00 | 615,087.00 | ||||||
Goertek Group Co., Ltd. | Building | 293,970.88 | 224,177.95 | 224,177.95 | 668,878.77 | 7,519.10 |
(4) Related guarantees
The Company acts as the guarantor
Unit: RMB
Guaranteed party | Guarantee amount | Starting date of guarantee | Maturity date of guarantee | Whether the guarantee has been performed fully |
Goertek (HongKong) Co., Limited | 70,827,000.00 | September 10, 2022 | February 5, 2023 | Yes |
Goertek (HongKong) Co., Limited | 70,827,000.00 | October 20, 2022 | February 5, 2023 | Yes |
Goertek (HongKong) Co., Limited | 208,939,650.00 | May 17, 2022 | April 26, 2023 | Yes |
Goertek (HongKong) Co., Limited | 145,195,350.00 | May 24, 2022 | May 4, 2023 | Yes |
Goertek Technology Vina Company Limited | 912,892,836.92 | April 1, 2023 | December 15, 2026 | No |
Goertek Precision Industry Vietnam Company Limited | 680,714,663.08 | April 1, 2023 | December 15, 2026 | No |
Goertek Technology Vina Company Limited | 11,732,000.00 | June 22, 2022 | June 21, 2023 | Yes |
Goertek Technology Vina Company Limited | 1,080,000.00 | June 22, 2022 | June 21, 2023 | Yes |
Weifang Goertek Microelectronics Co., Ltd. | 3,000,000.00 | May 12, 2022 | May 11, 2023 | Yes |
Rongcheng Goertek Microelectronics Co., Ltd. | 3,000,000.00 | May 12, 2022 | May 11, 2023 | Yes |
Goertek Microelectronics Inc. | 21,248,100.00 | November 18, 2022 | November 17, 2023 | Yes |
Qingdao Goertek Horizons Technology Co., Ltd | 5,000,000.00 | July 6, 2023 | July 5, 2024 | No |
Goertek Technology Vina Company Limited | 49,074,441.78 | September 1, 2023 | August 30, 2024 | No |
Goertek Microelectronics Inc. | 10,624,050.00 | November 16, 2023 | November 15, 2024 | No |
The Company acts as the guaranteed party
Unit: RMB
Guarantor | Guarantee amount | Starting date of guarantee | Maturity date of guarantee | Whether the guarantee has been performed fully |
Goertek Group Co., Ltd. | 198,315,600.00 | February 28, 2023 | August 27, 2023 | Yes |
Goertek Group Co., Ltd. | 200,000,000.00 | March 29, 2022 | March 29, 2027 | No |
Goertek Group Co., Ltd. | 200,000,000.00 | June 24, 2022 | March 29, 2027 | No |
Goertek Group Co., Ltd. | 20,000,000.00 | July 19, 2022 | January 19, 2023 | Yes |
Goertek Group Co., Ltd. | 200,000,000.00 | July 29, 2022 | July 28, 2025 | No |
Goertek Group Co., Ltd. | 500,000,000.00 | September 19, 2022 | September 19, 2025 | No |
Goertek Group Co., Ltd. | 100,000,000.00 | January 11, 2023 | August 11, 2023 | Yes |
Goertek Group Co., Ltd. | 140,000,000.00 | March 17, 2023 | September 17, 2023 | Yes |
Goertek Group Co., Ltd. | 30,000,000.00 | June 9, 2023 | December 8, 2023 | Yes |
Goertek Group Co., Ltd. | 50,000,000.00 | October 26, 2023 | November 23, 2023 | Yes |
Goertek Group Co., Ltd. | 191,232,900.00 | December 11, 2023 | June 10, 2024 | No |
Goertek Group Co., Ltd. | 600,000,000.00 | November 20, 2023 | November 16, 2028 | No |
Goertek Group Co., Ltd. | 30,000,000.00 | December 27, 2023 | February 22, 2024 | No |
Goertek Group Co., Ltd. | 35,000,000.00 | September 2, 2022 | May 31, 2023 | Yes |
Goertek Group Co., Ltd. | 9,000,000.00 | March 23, 2022 | May 31, 2023 | Yes |
Goertek Group Co., Ltd. | 2,500,000.00 | March 23, 2022 | May 31, 2023 | Yes |
Goertek Group Co., Ltd. | 279,058,380.00 | September 2, 2022 | July 31, 2023 | Yes |
Goertek Group Co., Ltd. | 130,000,000.00 | September 2, 2022 | May 31, 2023 | Yes |
Goertek Group Co., Ltd. | 50,000,000.00 | September 2, 2022 | May 31, 2023 | Yes |
Goertek Group Co., Ltd. | 26,000,000.00 | September 2, 2022 | May 31, 2023 | Yes |
Goertek Group Co., Ltd. | 252,000,000.00 | June 1, 2023 | May 31, 2024 | No |
Goertek Group Co., Ltd. | 12,000,000.00 | June 14, 2023 | May 31, 2024 | No |
Goertek Group Co., Ltd. | 50,000,000.00 | September 6, 2023 | September 5, 2024 | No |
Goertek Group Co., Ltd. | 601,264,228.43 | July 31, 2023 | July 30, 2024 | No |
Explanation of related guaranteeNone
(5) Funds borrowed from related parties
Unit: RMB
Related parties | Amount of borrowing | Start date | Due date | Explanation |
Borrowing | ||||
Goertek Group Co., Ltd. | 11,000,000.00 | November 15, 2023 | November 14, 2026 | Interest rate of 3.45% per annum, and interest for the current period of RMB 49,545.83 |
Lending |
(6) Transfer of assets and debt restructuring of related parties
Unit: RMB
Related parties | Related transactions | 2023 | 2022 |
Weifang Goer Farm Co., Ltd. | Purchasing fixed assets, etc. | 6,508,282.21 | 3,453,438.60 |
Bei Ge (Weifang) Intelligent technology Co., Ltd | Purchasing fixed assets, etc. | 3,559,740.00 | |
Wemake (Weihai) Digital Creative Technology Co., Ltd. | Purchasing fixed assets, etc. | 2,607,860.92 | 9,513,110.31 |
Goertek Group Co., Ltd. | Purchasing fixed assets, etc. | 466,429.41 | 1,175,396.00 |
Weifang Point Hotel Management Co., Ltd. | Disposal of fixed assets | 72,902.23 | |
Weifang Goerdyna Technology Co., Ltd. | Disposal of fixed assets | 12,574.24 | 6,676,812.63 |
Weifang Dotcom Catering Management Co., Ltd. | Purchasing fixed assets, etc. | 7,281.42 | |
Weifang Goer Farm Co., Ltd. | Disposal of fixed assets | 5,270.97 | |
Weifang Goer Real Estate Co., Ltd. | Purchasing fixed assets, etc. | 27,820,895.00 | |
Qingdao Virtual Reality Institute Co., Ltd. | Purchasing fixed assets, etc. | 1,314,599.09 | |
Beijing Bubble Lab Co., Ltd. | Purchasing fixed assets, etc. | 592,444.40 | |
Dynaudio (Shanghai) Co., Ltd. | Purchasing fixed assets, etc. | 492,566.37 | |
Goertek Group Co., Ltd. | Disposal of fixed assets | 249,760.94 | |
Qingdao Virtual Reality Institute Co., Ltd. | Disposal of fixed assets | 2,646.30 |
Wemake (Weihai) Digital Creative Technology Co., Ltd. | Disposal of fixed assets | 478.33 |
(7) Remuneration of key management
Unit: RMB
Item | 2023 | 2022 |
Remuneration of key management | 14,754,040.68 | 16,911,750.00 |
The remuneration for the aforementioned key management includes compensation received by related individuals, other than directors,supervisors, or senior managers, who serve in the Company or its subsidiaries and receive remuneration based on their actual positionsor contracts they have entered into.
(8) Other related transactions
Item | Related transactions | Amount of current period | Amount in previous period |
Jiang Long | Purchase of equity | 23,273,750.00 | |
Shareholder of Uphoton Technology (Shaoxing) Co., Ltd., a related party of the Company | Purchase of equity | 12,267,043.01 | |
Uphoton Technology (Shaoxing) Co., Ltd. | Equity investment | 200,000,000.00 | |
GravityXR Electronics and Technology Co., Ltd. | Equity investment | 90,000,000.00 | |
GoerDyna Technology Co., Ltd. | Equity transfer | 1,397,700.00 | |
Jiang Bin | Capital increase to subsidiaries | 64,290,000.00 | |
Jiang Long | Capital increase to subsidiaries | 64,290,000.00 | |
Goertek Group Co., Ltd. | Capital increase to subsidiaries | 64,000,000.00 | |
Zhuoguang Xiangrong Technology (Tianjin) Partnership (Limited Partnership) | Capital increase to subsidiaries | 60,200,000.00 |
6. Receivables and payables of related parties
(1) Items with accounts receivable
Unit: RMB
Name of project | Related parties | Closing balance | Opening balance | ||
Book balance | Bad-debt provision | Book balance | Bad-debt provision | ||
Accounts receivable | Weifang Goerdyna Technology Co., Ltd. | 19,811,361.10 | 198,113.61 | 10,399,970.66 | 103,999.71 |
Accounts receivable | Little Bird Co., Ltd | 4,517,594.90 | 45,175.95 | 2,181,873.05 | 21,818.73 |
Accounts receivable | GoerDyna Technology Co., Ltd. | 1,570,053.86 | 15,700.54 | ||
Accounts | Goertek Robotics Co., | 836,487.15 | 8,364.87 | 186,792.73 | 1,867.93 |
Name of project | Related parties | Closing balance | Opening balance | ||
Book balance | Bad-debt provision | Book balance | Bad-debt provision | ||
receivable | Ltd. | ||||
Accounts receivable | Goertek Group Co., Ltd. | 345,666.71 | 3,456.67 | 104,206.00 | 1,042.06 |
Accounts receivable | Dotcom Investment Co., Ltd. | 251,597.26 | 2,515.97 | ||
Accounts receivable | Goerlife Co., Ltd. | 123,888.38 | 1,238.88 | ||
Accounts receivable | Weifang High-Tech Zone Yasong Linju Kindergarten | 86,400.00 | 864.00 | 4,500.00 | 45.00 |
Accounts receivable | Bei Ge (Weifang) Intelligent technology Co., Ltd | 25,933.50 | 259.34 | ||
Accounts receivable | Weifang Goer Farm Co., Ltd. | 1,636.00 | 16.36 | ||
Accounts receivable | Shandong Goer Education Group Co., Ltd. | 1,064.00 | 10.64 | ||
Accounts receivable | AKM Industrial Company Limited | 466,054.46 | 4,660.54 | ||
Accounts receivable | Weifang Dotcom Catering Management Co., Ltd. | 81,198.36 | 811.98 | ||
Accounts receivable | Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | 30,460.37 | 304.60 | ||
Accounts receivable | Weifang Goer Manor Trading Co., Ltd. | 17,614.54 | 176.15 |
(2) Items with accounts payable
Unit: RMB
Name of project | Related parties | Closing book balance | Opening book balance |
Accounts payable | Qingdao Virtual Reality Institute Co., Ltd. | 1,980,142.50 | 6,797,327.04 |
Accounts payable | Weifang Goer Farm Co., Ltd. | 1,584,580.35 | 640,072.69 |
Accounts payable | Wemake (Weihai) Digital Creative Technology Co., Ltd. | 1,380,241.71 | |
Accounts payable | Little Bird Co., Ltd | 931,430.20 | 360,559.97 |
Accounts payable | Goertek Group Co., Ltd. | 641,304.60 | 902,885.49 |
Accounts payable | Goerlife Co., Ltd. | 615,481.70 | |
Accounts payable | Dotcom Investment Co., Ltd. | 163,401.79 | |
Accounts payable | Weifang Goerdyna Technology Co., Ltd. | 118,359.31 | 831,553.78 |
Accounts payable | Qingdao Point Hotel Management Co., Ltd. | 37,894.08 | 258,802.92 |
Accounts payable | Weifang Goer Manor Food & Beverage Co., Ltd. | 37,573.87 | 17,707.81 |
Accounts payable | Weifang Point Hotel Management Co., Ltd. | 20,181.00 | 331,842.00 |
Accounts payable | Weifang Dotcom Catering Management Co., Ltd. | 9,083.59 | 237,005.09 |
Accounts payable | Bei Ge (Weifang) Intelligent technology Co., Ltd | 7,775.53 | 28,248.00 |
Name of project | Related parties | Closing book balance | Opening book balance |
Accounts payable | Weihai Goer Ecological Agriculture Co., Ltd. | 2,680.00 | 26,800.00 |
Accounts payable | Beijing Bubble Lab Co., Ltd. | 550.00 | 165,554.34 |
Accounts payable | AKM Industrial Company Limited | 48,787,168.95 | |
Accounts payable | Dynaudio (Shanghai) Co., Ltd. | 556,600.00 | |
Accounts payable | Weifang Goer Manor Trading Co., Ltd. | 264,603.04 | |
Accounts payable | Wemake (Qingdao) Digital Creative Technology Co., Ltd. | 172,083.50 | |
Accounts payable | Weifang Dotcom Garden Floriculture Co., Ltd | 7,296.00 | |
Contract liabilities | Little Bird Co., Ltd | 24,277.58 | 33.57 |
Other payables | Weifang Goer Property Service Co., Ltd. | 23,623.90 | |
Other payables | Weifang Goer Real Estate Co., Ltd. | 805.20 | |
Other payables | Goertek Group Co., Ltd. | 11,000,000.00 | |
Other payables | Bei Ge (Weifang) Intelligent technology Co., Ltd | 28,248.00 |
7. Commitment of related parties
None
8. Others
None
XV. Share-based Payment
1. Overview of share-based payment
? Applicable ? Not applicable
Unit: RMB
Category of recipients | Granted in the current period | Exercised in the current period | Unlocked in the current period | Lapsed in the current period | ||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
Production staff | 42,671,380 | 33,255,195.58 | 289,923 | 6,018,805.24 | 579,473 | 9,590,227.74 | 16,524,607 | -12,173,035.04 |
Sales staff | 15,445,890 | 18,796,143.35 | 127,588 | 2,648,735.62 | 1,521,027 | 21,640,139.91 | 5,243,911 | -9,801,025.20 |
Management staff | 160,645,730 | 273,290,108.07 | 1,437,055 | 32,349,397.35 | 12,139,281 | 176,540,536.31 | 30,397,692 | -153,878,829.10 |
R&D staff | 81,272,440 | 68,602,005.94 | 1,036,409 | 21,515,844.03 | 5,996,844 | 85,331,418.48 | 36,056,737 | -44,791,006.92 |
Total | 300,035,440 | 393,943,452.94 | 2,890,975 | 62,532,782.24 | 20,236,625 | 293,102,322.44 | 88,222,947 | -220,643,896.26 |
Stock options or other equity instruments issued and outstanding at the end of the period? Applicable ? Not applicable
Category of recipients | Stock options issued and outstanding at the end of the period | Other equity instruments issued and outstanding at the end of the period | ||
Range of exercise prices | Remaining period of the contract | Range of exercise prices | Remaining period of the contract | |
Production staff | RMB 14/share, RMB 18.37/share, RMB 29.03/share, RMB 34.14/share | 4 months, 5 months, 8 months, 16 months, 17 months, 20 months, 28 months, 32 months | RMB 1.5/RMB 1 registered capital, RMB 2/share | 21 months, 48 months |
Sales staff | ||||
Management staff | ||||
R&D staff |
Other explanations:
Other equity instruments issued and outstanding at the end of the period are capital increase equity.The exercise price of the 2023 Stock Option Incentive Plan is RMB 18.37 per share, with remaining contractual terms of 8, 20 and 32months;The exercise price of the 2022 Stock Option Incentive Plan is RMB 34.14 per share, with remaining contractual terms of 5 and 17months;The exercise price of the 2021 Stock Option Incentive Plan is RMB 29.03 per share, with a remaining contractual term of 4 months;The exercise price of the 2020 Stock Option Incentive Plan of Goertek Microelectronics is RMB 14 per share, with remainingcontractual terms of 16 and 28 months;The exercise price of the capital increase stock option incentive of Goertek Microelectronics is RMB 2/share, with a remainingcontractual term of 21 months;The exercise price of the capital increase stock option incentive of Goertek Optical Technology Co., Ltd is RMB 1.5/RMB 1 registeredcapital, with a remaining contractual term of 48 months.
2. Share-based payment settled with equity
? Applicable ? Not applicable
Unit: RMB
Determination method of the fair value of equity instruments at the date of grant | The stock option adopts the BS model, with the closing price on the date of the general meeting and the capital increase equity as the appraised value for the Employee Stock Ownership Plan. |
Key parameters for the fair value of equity instruments at the grant date | Historical volatility, risk-free rate of return, dividend yield |
Basis for determining the quantity of equity instruments with vesting | Management's best estimate |
Reason for significant difference in estimation in the current period and estimation in the last period | None |
Accumulative amount of equity-settled share-based payment included in capital surplus | 2,183,414,129.03 |
Total amount of share-based payment settled with equity in current period | 180,445,664.45 |
3. Cash-settled payment settled in cash
? Applicable ? Not applicable
4. Share-based payment expense in the current period
? Applicable ? Not applicable
Unit: RMB
Category of recipients | Equity-settled share-based payment expense | Cash-settled share-based payment expense |
Production staff | -4,225,352.67 | |
Sales staff | 16,712,392.29 | |
Management staff | 123,216,341.40 | |
R&D staff | 44,742,283.43 | |
Total | 180,445,664.45 |
5. Modification and termination of share-based payment
Due to the substandard performance in 2023 and the failure to meet the exercise conditions for the first exercise period of the 2022Stock Option Incentive Plan, the Company intends to cancel the corresponding stock options.
Due to the substandard performance in 2023 and the failure to meet the exercise conditions for the third exercise period of the 2020Stock Option Incentive Plan, the subsidiary Goertek Microelectronics Inc. has canceled corresponding stock options.
6. Others
None
XVI. Commitments and Contingencies
1. Important commitments
Important commitments on the balance sheet dateNone
2. Contingencies
(1) Important contingencies on the balance sheet date
(1) Contingent liabilities arising from pending litigations and arbitrations, and financial impact therefromNone
(2) Contingent liabilities arising from guarantees of debts provided to other units, and financial impact therefromAs of the report date, except for the ongoing guarantees provided by the Company to its subsidiaries Goertek Technology VinaCompany Limited, Goertek Precision Industry Vietnam Company Limited, Qingdao Goertek Horizons Technology Co., Ltd, andGoertek Microelectronics Inc. as specified in Note XIV.5, there are no debt guarantees provided by the Company to other entities.
(3) Contingent liabilities related to the investment in joint ventures or associates
None
(4) Other contingent liabilities and financial impact therefrom
None
(2) The Company shall make a statement even if it does not have important contingencies to be disclosedThere are no important contingencies to be disclosed in the Company.
3. Others
None
XVII. Matters after Balance Sheet Date
1. Important non-adjustment matters
None
2. Profit distribution
Dividend to be distributed per 10 shares (RMB) | 1.00 |
Dividend shares to be distributed per 10 shares (shares) | |
Conversion of capital surplus into share capital per 10 shares (shares) | |
Dividend per 10 shares declared after deliberation and approval (RMB) | 1.00 |
Dividend shares per 10 shares declared after deliberation and approval (shares) | |
Conversion of capital surplus into share capital per 10 shares |
declared after deliberation and approval (shares) | |
Profit distribution plan | Based on the total share capital registered on the record date of equity distribution minus the repurchased shares in the Company's specific securities repurchase account, the Company will distribute cash dividend of RMB 1.00 (tax inclusive) for every 10 shares to all the shareholders, as well as 0 bonus shares (tax inclusive), and there is no conversion of capital surplus into share capital. |
3. Sales return
None
4. Explanation of other matters after the balance sheet date
None
XVIII. Other Important Matters
1. Correction of early accounting errors
None
2. Debt restructuring
None
3. Asset replacement
None
4. Annuity plan
None
5. Discontinued operation
None
6. Division information
(1) Basis for determining reporting divisions and accounting policies
None
(2) Financial information of reporting divisions
None
(3) If the Company does not have any reporting division, or if it cannot disclose the total assets andliabilities of each reporting division, the reasons shall be stated.The Group determines its operating divisions on the basis of its internal organizational structure, management requirements and internalreporting system, and determines its reporting divisions and discloses division information on the basis of its operating divisions.An operating division is a component of the Group that meets all of the following conditions: (1) the component generates revenuesand incurs expenses in its day-to-day activities; (2) the management of the Group is able to evaluate the operating results of thecomponent on a regular basis in order to decide on the allocation of resources to the component and to evaluate its performance; and
(3) the Group is able to obtain the component's relevant accounting information, such as its financial position, results of operations,
and cash flows. Two or more operating divisions are combined into one operating division if they have similar economic characteristicsand if certain conditions are met.No division information is presented as over 90.00% of the Group's revenues and results are derived from the electronic productsbusiness.
(4) Explanation of other matters:
None
7. Other important transactions and matters that have an impact on investors' decisionsNone
8. Others
NoneXIX. Notes to Major Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1) Disclosed by age of accounts receivable
Unit: RMB
Aging | Closing book balance | Opening book balance |
Within 1 year (including 1 year) | 6,620,847,221.89 | 8,896,875,781.94 |
1 to 2 years | 826,365.28 | |
2 to 3 years | 780,660.09 | |
Total | 6,621,627,881.98 | 8,897,702,147.22 |
(2) Disclosure by method of bad debt accrual
Unit: RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
Accounts receivable with bad debts provision by group | 6,621,627,881.98 | 100.00% | 22,926,746.45 | 0.35% | 6,598,701,135.53 | 8,897,702,147.22 | 100.00% | 27,102,669.02 | 0.30% | 8,870,599,478.20 |
Including: | ||||||||||
Group by aging | 2,254,422,300.81 | 34.05% | 22,926,746.45 | 1.02% | 2,231,495,554.36 | 2,686,302,309.44 | 30.19% | 27,102,669.02 | 1.01% | 2,659,199,640.42 |
Related party group | 4,367,205,581.17 | 65.95% | 4,367,205,581.17 | 6,211,399,837.78 | 69.81% | 6,211,399,837.78 | ||||
Total | 6,621,627,881.98 | 100.00% | 22,926,746.45 | 0.35% | 6,598,701,135.53 | 8,897,702,147.22 | 100.00% | 27,102,669.02 | 0.30% | 8,870,599,478.20 |
Bad debt reserve grouping: Group by aging
Unit: RMB
Name | Closing balance | ||
Book balance | Bad-debt provision | Proportion of accrual | |
Within 1 year | 2,253,641,640.72 | 22,536,416.40 | 1.00% |
1 to 2 years | |||
2 to 3 years | 780,660.09 | 390,330.05 | 50.00% |
Over 3 years | |||
Total | 2,254,422,300.81 | 22,926,746.45 |
Description for basis of determining the group:
Please see Note V.12. "Impairment of Financial Assets".
Bad debt provision grouping: Related party group
Unit: RMB
Name | Closing balance | ||
Book balance | Bad-debt provision | Proportion of accrual | |
Within 1 year | 4,367,205,581.17 | ||
1 to 2 years | |||
2 to 3 years | |||
Over 3 years | |||
Total | 4,367,205,581.17 |
Description for basis of determining the group:
Please see Note V.12. "Impairment of Financial Assets".If the bad-debt provision for accounts receivable is made in accordance with the general model of expected credit losses:
? Applicable ? Not applicable
(3) Accrual, recovery or reversal of bad debt provision in current period
Provision for bad debts of the current period:
Unit: RMB
Category | Opening balance | Changes in amount of the current period | Closing balance | |||
Accrual | recovery or reversal | Write-off | Other | |||
Accounts receivable with bad debts provision by group | 27,102,669.02 | -4,175,922.57 | 22,926,746.45 | |||
Total | 27,102,669.02 | -4,175,922.57 | 22,926,746.45 |
Among them, significant information of bad debt provision withdrawn or written back in the current period:
None
(4) Accounts receivable actually written off in current period
None
(5) Accounts receivable and contract assets with the top five closing balances by debtor
Unit: RMB
Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion of total closing balance of accounts receivable and contract assets | Closing balance of bad-debt provision for accounts receivable and provision for impairment of contract assets |
Company 1 | 1,582,513,609.49 | 1,582,513,609.49 | 23.90% | ||
Company 2 | 1,463,688,410.53 | 1,463,688,410.53 | 22.11% | ||
Company 3 | 1,077,947,952.00 | 1,077,947,952.00 | 16.28% | 10,779,479.52 | |
Company 4 | 835,234,187.19 | 835,234,187.19 | 12.61% | ||
Company 5 | 223,956,312.60 | 223,956,312.60 | 3.38% | 2,239,563.13 | |
Total | 5,183,340,471.81 | 5,183,340,471.81 | 78.28% | 13,019,042.65 |
2. Other receivables
Unit: RMB
Item | Closing balance | Opening balance |
Other receivables | 5,265,145,730.57 | 7,549,205,233.13 |
Total | 5,265,145,730.57 | 7,549,205,233.13 |
(1) Interest receivable
None
(2) Dividends receivable
None
(3) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
Nature of payment | Closing book balance | Opening book balance |
Current account | 5,239,987,500.43 | 7,513,774,764.36 |
Security deposit | 2,244,358.04 | 5,919,227.94 |
Withholding and remitting social insurance and housing provident fund | 23,468,164.65 | 30,376,964.77 |
Total | 5,265,700,023.12 | 7,550,070,957.07 |
2) Disclosed by age of accounts receivable
Unit: RMB
Aging | Closing book balance | Opening book balance |
Within 1 year (including 1 year) | 5,135,306,494.91 | 7,416,585,872.52 |
1 to 2 years | 41,976.80 | 133,312,317.97 |
2 to 3 years | 130,321,400.00 | 3,266.41 |
Over 3 years | 30,151.41 | 169,500.17 |
3 to 4 years | 966.41 | 69,500.17 |
4 to 5 years | 29,185.00 | |
Over 5 years | 100,000.00 | |
Total | 5,265,700,023.12 | 7,550,070,957.07 |
3) Disclosure by method of bad debt accrual
Bad-debt provisions are made on the basis of the general model of expected credit losses:
Unit: RMB
Bad-debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit impaired) | Lifetime expected credit loss (credit impaired) | ||
Balance as of January 1, 2023: | 865,723.94 | 865,723.94 | ||
Balance as of January 1, 2023 in the current period |
Bad-debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit impaired) | Lifetime expected credit loss (credit impaired) | ||
- Transferred to Stage 3 | -100,000.00 | 100,000.00 | ||
Accrual in the current period | -211,431.39 | -211,431.39 | ||
Amount written off in the current period | 100,000.00 | 100,000.00 | ||
Balance as of December 31, 2023: | 554,292.55 | 554,292.55 |
Basis of classification by stage and percentage of bad-debt provisionsPlease see Note V. 11. "Financial Instruments" and 12. "Impairment of Financial Assets" for details.Significant changes in the book value of changes in the allowances for losses in the current period? Applicable ? Not applicable
4) Accrual, recovery or reversal of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
Category | Opening balance | Changes in amount of the current period | Closing balance | |||
Accrual | Recovery or reversal | Resale or write-off | Other | |||
Group by aging | 865,723.94 | -211,431.39 | 100,000.00 | 554,292.55 | ||
Total | 865,723.94 | -211,431.39 | 100,000.00 | 554,292.55 |
Among them, significant amount in bad debt provision written back or withdrawn in the current period:
None
5) Other receivables actually written off in the current period
Unit: RMB
Item | Written off amount |
Other receivables actually written off | 100,000.00 |
Among them, write-off of other significant receivables:
None
6) Other receivables of the 5 highest closing balance by debtor
Unit: RMB
Company name | Nature of payment | Closing balance | Aging | Ratio in the total closing balance of other receivables | Closing balance of bad debt provision |
Company 1 | Current account | 2,107,423,719.35 | Within 1 year | 40.02% | |
Company 2 | Current account | 865,803,426.28 | Within 1 year | 16.44% | |
Company 3 | Current account | 485,800,000.00 | Within 1 year | 9.22% | |
Company 4 | Current account | 344,659,853.53 | Within 1 year | 6.55% | |
Company 5 | Current account | 292,111,000.00 | Within 1 year | 5.55% | |
Total | 4,095,797,999.16 | 77.78% |
7) Presented in other receivables due to centralized management of funds
None
8) Other receivables involving government grants
None
9) Other receivables derecognized due to transfer of financial assets
None10) Amount of assets and liabilities formed by transferring other receivables and continuing to be involvedNone
3. Long-term equity investments
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
Investment in subsidiaries | 8,536,527,729.83 | 8,536,527,729.83 | 6,569,063,091.12 | 6,569,063,091.12 | ||
Investment in associated businesses and joint ventures | 589,873,101.81 | 589,873,101.81 | 192,305,163.87 | 192,305,163.87 | ||
Total | 9,126,400,831.64 | 9,126,400,831.64 | 6,761,368,254.99 | 6,761,368,254.99 |
(1) Investment in subsidiaries
Unit: RMB
Invested entity | Opening balance (book value) | Opening balance of provision for impairment | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
Investment addition | Investment reduction | Provision for impairment | Other | |||||
Weifang Goertek Electronics Co., Ltd. | 1,488,304,723.26 | -7,858,657.26 | 1,480,446,066.00 | |||||
Weifang Goertek Trading Co., Ltd. | 51,546,414.15 | -754,885.85 | 50,791,528.30 | |||||
Yishui Goertek Electronics Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||||
Yili Precision Manufacturing Co., Ltd. | 338,545,768.13 | -754,307.18 | 337,791,460.95 | |||||
Goertek Optical Technology Co., Ltd | 607,050,022.61 | -2,312,926.89 | 604,737,095.72 | |||||
Goertek Technology Co., Ltd. | 989,713,683.90 | -3,860,566.74 | 985,853,117.16 | |||||
Beijing Goertek Technology Co., Ltd. | 56,817,642.83 | -2,240,829.20 | 54,576,813.63 | |||||
Qingdao Goertek Acoustics Technology Co., Ltd. | 88,947,844.55 | 88,947,844.55 |
Invested entity | Opening balance (book value) | Opening balance of provision for impairment | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
Investment addition | Investment reduction | Provision for impairment | Other | |||||
Shenzhen Goertek Technology Co., Ltd. | 84,637,158.50 | -3,590,168.58 | 81,046,989.92 | |||||
Shanghai Goertek Technology Co., Ltd. | 29,902,086.64 | -772,145.53 | 29,129,941.11 | |||||
Nanjing Goertek Technology Co., Ltd. | 50,966,504.86 | 324,979.34 | 51,291,484.20 | |||||
Weifang Lokomo Precision Industry Co., Ltd. | 51,931,401.90 | 127,397.00 | 52,058,798.90 | |||||
Goertek Investment Co., Ltd. | 83,000,000.00 | 1,915,886.26 | 84,915,886.26 | |||||
Beijing Goertek Investment Management Co., Ltd. | 4,335,646.74 | 786,287.15 | 5,121,933.89 | |||||
Dongguan JoyForce Precision Manufacturing Co., Ltd. | 31,370,980.55 | -51,208.67 | 31,319,771.88 | |||||
Goertek Vina Co., Ltd | 247,634,379.61 | 247,634,379.61 | ||||||
Goertek Technology Korea Co., Ltd. | 66,743,212.77 | 66,743,212.77 | ||||||
Goertek Electronics, Inc. | 210,826,960.74 | -5,888,831.84 | 204,938,128.90 | |||||
Goertek Technology Taiwan Co., Ltd. | 129,098,963.28 | 129,098,963.28 | ||||||
Goertek Technology Japan Co., Ltd. | 134,228,936.73 | 134,228,936.73 | ||||||
Goertek Seiki Technology Co., Ltd. | 1,024,111.56 | 1,024,111.56 | ||||||
Goertek Intelligence Technology Co., Ltd. | 355,555,180.68 | -670,013.53 | 354,885,167.15 | |||||
Goertek Microelectronics Inc. | 819,445,743.75 | 23,273,750.00 | 842,719,493.75 | |||||
Beijing Goertek Microelectronics Co., Ltd. | 5,053,458.52 | 5,053,458.52 | ||||||
Qingdao Goertek Microelectronics Research Institute Co., Ltd. | 460,436.04 | 460,436.04 | ||||||
Qingdao Goertek Intelligent Sensor Co., Ltd. | 842,096.78 | 842,096.78 | ||||||
Rongcheng Goertek Microelectronics Co., Ltd. | 524,895.84 | 524,895.84 | ||||||
Shanghai Goertek Microelectronics Co., Ltd. | 2,758,811.23 | 2,758,811.23 | ||||||
Shenzhen Goertek Microelectronics Co., Ltd. | 1,206,995.30 | 1,206,995.30 |
Invested entity | Opening balance (book value) | Opening balance of provision for impairment | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
Investment addition | Investment reduction | Provision for impairment | Other | |||||
Weifang Goertek Microelectronics Co., Ltd. | 17,208,205.72 | 17,208,205.72 | ||||||
Wuxi Goertek Microelectronics Co., Ltd. | 940,460.62 | 940,460.62 | ||||||
Qingdao Goertek Commercial Factoring Co., Ltd. | 51,774,832.46 | -123,078.96 | 51,651,753.50 | |||||
Kunshan Goertek Electronics Co., Ltd | 152,443,503.48 | 65,000,376.95 | 217,443,880.43 | |||||
Rongcheng Goertek Technology Co., Ltd. | 104,738,296.56 | 1,999,919,593.77 | 2,104,657,890.33 | |||||
Nanning Goertek Electronics Co., Ltd | 80,233,954.95 | -48,406.52 | 80,185,548.43 | |||||
Xi'an Goertek Electronic Technology Co., Ltd. | 8,928,624.34 | -92,573.04 | 8,836,051.30 | |||||
Weifang High-tech Zone Goertek Education Center | 300,000.00 | 300,000.00 | ||||||
Qingdao Resonance Phase I Venture Capital Fund Partnership (Limited Partnership) | 160,000,000.00 | 120,000,000.00 | 280,000,000.00 | |||||
Qingdao Goertek Horizons Technology Co., Ltd | 30,021,151.54 | -21,151.54 | 30,000,000.00 | |||||
Chongqing Goertek Auto Technology Co., Ltd. | 2,600,000.00 | 2,600,000.00 | ||||||
Total | 6,569,063,091.12 | 2,184,908,519.14 | 217,443,880.43 | 8,536,527,729.83 |
(2) Investment in associated businesses and joint ventures
Unit: RMB
Invested entity | Opening balance (book value) | Opening balance of provision for impairment | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||||||
Investment addition | Investment reduction | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared | Provision for impairment | Other | |||||
I. Joint Venture | ||||||||||||
II. Affiliated enterprises | ||||||||||||
SeeYA Technology Corporation | 600,000,000.00 | -12,047,708.95 | -12,650.40 | 1,933,461.16 | 589,873,101.81 | |||||||
Uphoton Technology (Shaoxing) Co., Ltd. | 192,305,163.87 | 183,544,068.53 | -10,962,893.58 | 2,201,798.24 | ||||||||
Sub-total | 192,305,163.87 | 600,000,000.00 | 183,544,068.53 | -23,010,602.53 | -12,650.40 | 4,135,259.40 | 589,873,101.81 | |||||
Total | 192,305,163.87 | 600,000,000.00 | 183,544,068.53 | -23,010,602.53 | -12,650.40 | 4,135,259.40 | 589,873,101.81 |
The recoverable amount is determined as the net of fair value less disposal expenses.
? Applicable ? Not applicableThe recoverable amount is determined as the present value of the expected future cash flows.? Applicable ? Not applicableReasons for apparent discrepancies between the foregoing information and information used for impairment testing in prior years orexternal informationNoneReasons for apparent discrepancies between the information used in the Company's impairment tests in prior years and the actualsituation in the current yearNone
(3) Explanation of other matters:
None
4. Operating revenue and cost of sales
Unit: RMB
Item | 2023 | 2022 | ||
Revenue | Cost of sales | Revenue | Cost of sales | |
Main business | 20,835,240,359.16 | 17,348,440,379.48 | 35,652,094,423.46 | 32,162,388,871.15 |
Other business | 7,926,650,258.39 | 6,992,953,710.46 | 7,325,297,627.45 | 5,829,646,168.53 |
Total | 28,761,890,617.55 | 24,341,394,089.94 | 42,977,392,050.91 | 37,992,035,039.68 |
Information about performance obligations:
NoneInformation about the trading price apportioned to remaining performance obligations:
The amount of revenue corresponding to performance obligations that have been contracted for but not yet fulfilled or not yet completedat the end of the reporting period is RMB 0.00.Significant contract changes or significant transaction price adjustmentsNone
5. Investment income
Unit: RMB
Item | 2023 | 2022 |
Return on long-term equity investments measured by the equity method | -23,010,602.53 | -7,694,836.13 |
Investment income from disposal of long-term equity investments | -183,130,911.21 | -10,604,892.81 |
Investment income from disposal of financial assets held for trading | 96,188,704.20 | 9,695,767.32 |
Dividend income from long-term equity investments of subsidiaries | 2,337,367,940.73 | 645,651,914.62 |
Investment income from products such as certificates of deposits | 74,716,107.04 | 20,466,167.48 |
Gains or losses arising from derecognised financial assets at amortised cost | -313,191.66 | |
Discount losses of financing receivables that meet the conditions for derecognition | -2,120,899.52 | -833,626.41 |
Other | ||
Total | 2,299,697,147.05 | 656,680,494.07 |
6. Others
None
XX. Supplementary Information
1. Statement of non-recurring gains and losses for the current period
? Applicable ? Not applicable
Unit: RMB
Item | Amount | Explanation |
Gains or losses from disposal of non-current assets | -123,882,680.161 | Mainly loss on retirement of fixed assets |
Government grants included in the current gains and losses (except for those that are closely related to the normal business operations of the Company, comply with national policy regulations, are enjoyed according to established standards, and have a continuous impact on the Company's gains and losses) | 331,548,590.64 | Mainly special funds for enterprise innovation and development and other government grants |
Gains and losses from changes in the fair value of financial assets and liabilities, and from the disposal of financial assets and liabilities, held by non-financial enterprises, except for effective hedging businesses related to the normal operating business of the Company. | -26,138,756.91 | |
Other non-operating income and expenditures other than those mentioned above | 28,631,472.04 | |
Other profit and loss items that meet the definition of non-recurring profit and loss | 66,527,741.91 | Mainly tax benefits and investment income from certificates of deposits and other products |
Less: Impact of income tax | 35,531,401.22 | |
Impact of minority interests (after tax) | 13,005,154.29 | |
Total | 228,149,812.01 | -- |
Note: 1 "+" in non-recurring profit and loss items denotes gains or income, while "-" denotes losses or expenses.Details of other profit and loss items that meet the definition of non-recurring profit and loss:
? Applicable ? Not applicableMainly tax benefits and investment income from certificates of deposits and other productsDescription of defining the non-recurring profit and loss items, which are listed in Explanatory Announcement No. 1 on InformationDisclosure for Companies with Public Offerings of Securities - Non-Recurring Profit and Loss, as recurring profit and loss? Applicable ? Not applicable
2. Net assets income rate and earnings per share
Profit during the reporting period | Weighted average return on net assets | Earnings per share | |
Basic earnings per share (RMB / share) | Diluted earnings per share (RMB / share) | ||
Net profit attributable to ordinary shareholders of the Company | 3.59% | 0.32 | 0.32 |
Net profit attributable to | 2.84% | 0.25 | 0.25 |
ordinary shareholders of theCompany after deducting non-recurring gains and losses
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and net assets in the financial reports disclosed pursuant to internationalaccounting standards and Chinese accounting standards at the same time? Applicable ? Not applicable
(2) Differences in net profits and net assets in the financial reports disclosed pursuant to foreign accountingstandards and Chinese accounting standards at the same time? Applicable ? Not applicable
(3) Explanation of reasons for differences in accounting data under domestic and foreign accountingstandards; if the data audited by an overseas audit firm is adjusted for differences, the name of the overseasfirm shall be indicated.
4. Others
None
Goertek Inc. | |||
Chairman: Jiang Bin | |||
March 27, 2024 | |||