Hangzhou Hikvision Digital Technology Co., Ltd.
2021 Half Year ReportJanuary to June 2021
July 24
th2021
Hikvision 2021 Half Year Report
Section I Important Notes, Contents and DefinitionsThe Board of Directors, Board of Supervisors, directors, supervisors and senior management ofHangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as the “Company”) herebyguarantee that the information presented in this report shall be together be wholly liable for thetruthfulness, accuracy and completeness of its contents and free of any false records, misleadingstatements or material omissions, and will undertake individual and joint legal liabilities.Chen Zongnian, the Company's legal representative, Jin Yan, the person in charge of theaccounting work, and Zhan Junhua, the person in charge of accounting department (accountingsupervisor) hereby declare and warrant that the financial statements in this half year report areauthentic, accurate and complete.All directors of the Company have attended the board meeting to review this report.The half year proposal of profit distribution or share distribution from capital reserve passed upondeliberation at the meeting of the Board of Directors (not applicable): The Company will notdistribute cash dividend, distribute bonus shares, or distribute shares from capital reserve during thecurrent reporting period.
Note:
This document is a translated version of the Chinese version 2021 Half Year Report (“2021年半年度报告”), and the published announcements in the Chinese version shall prevail. The completepublished Chinese 2021 Half Year Report may be obtained at www.cninfo.com.cn.
Hikvision 2021 Half Year Report
Please read the full annual report and pay particular attention to the following risk factors:
1) Global COVID-19 epidemic risk: The global threat of COVID-19 epidemic has not yet been eliminated,and there are uncertainties in economic development. If the epidemic situation in the area where theCompany's business is located intensifies, the adverse impact on the Company's business operations willincrease accordingly.
2) Supply chain risks: COVID-19 epidemic and political conflicts have brought adverse impact on theglobal raw material supply system. The Company has been making efforts to enhance management forour supply chain and optimize inventory adjustments and controls. However, if systemic risks arise in theglobal supply chain, the Company’s operating capabilities may be affected.
3) Risk of technology upgrade: Technologies such as artificial intelligence (AI), big data, cloud computing,and edge computing are developing rapidly. The speed of technology diffusion is accelerating. If theCompany is unable to closely track and adapt to the changes in cutting-edge technologies, or fails toquickly realize business innovation, the risk of uncertainty in the company's future development willincrease.
4) Risk of internal management: The continual expansion of business scale, the continuous increase ofnew products and new businesses, and the continuous growth in total number of employees led to asignificant rise of internal management complexity and higher requirements on the Company'smanagement system. The Company’s sustainable development will face certain risks if the managementlevel fails to proportionally address the Company’s business expansion.
5) Global business risks: The Company operates in more than 150 countries and regions around the world.As the potential risks of epidemic, debt issues, political conflicts, and exchange rate fluctuations in variouscountries around the world are difficult to eliminate, the Company’s overseas business operations may beadversely affected.
6) Legal and compliance risk: The world's multilateral trading system is facing adverse impacts. The lawsand regulations of various regions that need to be complied with for business activities are verycomplicated. China and overseas countries have stricter data supervision and business compliancerequirements. If the Company's legal compliance capbilities cannot keep up with the situation, it will bringadverse impacts on the Company's operations.
Hikvision 2021 Half Year Report
7) Risk of exchange rate fluctuation: The Company carries out operations in various countries and regions
with different currencies, mainly settled in non-RMB currency (mainly in USD). Exchange ratefluctuations could have impact on foreign exchange exposures arising out of sales, procurement andfinancing, which could likely affect the profitability level of the Company.
8) Risk of cybersecurity: The Company has always attached great importance and taken active measuresto enhance cybersecurity performance of our products and systems. However, in the context of Internetapplications, there is still a possibility of deliberate attempts, including computer viruses, malicioussoftware, hacker and others to intentionally attack our systems or products, causing cybersecurity issues.
9) Risk of intellectual property (IP) rights: The Company continues to maintain a relatively large scale of
R&D investment, and produces considerable technical milestones. At the same time, the Companyimplements well-organized intellectual property right (IPR) protection measures. However, the risk ofintellectual property disputes and the risk of intellectual property rights violations still exist.
The above notices might not be all-inclusive of all other potential risks. Please pay attention to potential investmentrisks.
Hikvision 2021 Half Year Report
CONTENTS
Section I Important Notes, Contents and Definitions ...... 1
Section II Corporate Profile & Key Financial Data ...... 7
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 29
Section V Environmental and Social Responsibility ...... 33
Section VI Significant Events ...... 34
Section VII Changes in Shares and Information about Shareholders ...... 49
Section VIII Information of Preferred Shares ...... 63
Section IX Bonds ...... 64
Section X Financial Report ...... 65
Section XI Documents Available for Reference ...... 207
Section XII Other Disclosure Information ...... 208
Hikvision 2021 Half Year Report
Definitions
| Term | Definition |
| Reporting Period | From January 1st 2021 to June 30th 2021 |
| Articles of Associations | Articles of Associations for Hangzhou Hikvision Digital Technology Co., Ltd |
| Hikvision, our Company, the Company | Hangzhou Hikvision Digital Technology Co., Ltd |
| CETC | China Electronics Technology Group Ltd., the actual controller of the Company |
| CETHIK | CETHIK Group Co., Ltd. Controlling Shareholder of the Company |
| Qianmo Jiaying | Hangzhou Qianmo Jiaying Equity Investment Partnership (Limited Partnership) (formerly Hangzhou Hikvision Equity Investment Partnership (Limited Partnership)) |
| EZVIZ, EZVIZ Network, Smart Home | Hangzhou EZVIZ Network Co., Ltd.(According to the context, also refers to the corresponding business) |
| HikRobot | Hangzhou Hikrobot Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| HikAuto | Hangzhou HikAuto Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| HikMicro | Hangzhou Hikmicro Sensing Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| HikSemi, Hikstorage | Wuhan Hikstorage Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| HikImaging | Hangzhou Hikimaging Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| HikFire | Hangzhou Hikfire Technology Co., Ltd. (According to the context, also refers to the corresponding business) |
| HikSecurityCheck, HikRayin | Hangzhou Rayin Technology Co,. Ltd. (According to the context, also refers to the corresponding business) |
| Hangzhou Innovation Industry Park | Located in Hangzhou, Zhejiang Province, the planned use is for R&D, office space and supporting facilities. |
| Chengdu Science and Technology Park | Located in Chengdu, Sichuan Province, the planned use is for R&D, office space and supporting facilities. |
| Chongqing Science and Technology Park | Located in Chongqing, the planned use is for production plants, warehouses and supporting facilities. |
| Xi’an Science and Technology Park | Located in Xi'an, Shaanxi Province, the planned use is for R&D, office space and supporting facilities. |
| Shijiazhuang Science and Technology Park | Located in Shijiazhuang City, Hebei Province, the planned use is R&D, office space and supporting facilities. |
Hikvision 2021 Half Year Report
| Term | Definition |
| Wuhan Science and Technology Park | Located in Wuhan, Hubei Province, the planned use is for R&D, office space and supporting facilities. |
| Wuhan Intelligence Industry Park | Located in Wuhan, Hubei Province, the planned use is for production plants, warehouses and supporting facilities. |
| Zhengzhou Science and Technology Park | Located in Zhengzhou, Henan Province, the planned use is R&D, office space and supporting facilities, etc. |
| EZVIZ Industry Park | EZVIZ smart home product industry park, located in Hangzhou, Zhejiang Province, is planned to be used for R&D, office space and supporting facilities of Hangzhou EZVIZ Network Co., Ltd. |
| Innovative Business | A long investment cycle, business prospects uncertain, has the high risk and uncertainty, in need for direct or indirect investment in exploration, in order for the Company to timely enter into new areas of business. Initially disclosed in Announcement about Management Measures for Core Staff Investment in Innovative Business (《核心员工跟投创新业务管理办法》) (www.cninfo.com.cn). In this report, innovative business also refers to EZVIZ, HikRobot, HikAuto, HikMicro, HikStorage, HikImaging, HikFire, HikRayin and their related business or products. |
Hikvision 2021 Half Year Report
Section II Corporate Profile & Key Financial DataI. Corporate Information
| Stock abbreviation | HIKVISION | Stock code | 002415 |
| Stock exchange where the shares of the Company are listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 杭州海康威视数字技术股份有限公司 | ||
| Abbr. of the Company name in Chinese (if any) | 海康威视 | ||
| Name of the Company in English (if any) | HANGZHOU HIKVISION DIGITAL TECHNOLOGY CO., LTD | ||
| Abbr. of the Company name in English (if any) | HIKVISION | ||
| Legal representative | Chen Zongnian | ||
| Board Secretary | Securities Affairs Representative | |
| Name | Huang Fanghong | Zhou Xinyi |
| Address | No. 518 WuLianWang Street, Binjiang District, Hangzhou | No. 518 WuLianWang Street, Binjiang District, Hangzhou |
| Tel. | 0571-88075998; 0571-89710492 | 0571-89710492 |
| Fax | 0571-89986895 | 0571-89986895 |
| hikvision@hikvision.com | hikvision@hikvision.com |
Hikvision 2021 Half Year Report
| Newspaper designated by the Company for information disclosure | Securities Times, China Securities Journal |
| Website for release of the Half Year Report | www.cninfo.com.cn |
| Place where the Half Year Report is available for inspection | Office of the Board of Directors of the Company |
| First half year of 2021 | First half year of 2020 | YoY Change (%) | |
| Operating income (RMB) | 33,902,098,368.10 | 24,271,159,243.76 | 39.68% |
| Net profit attributable to shareholders of the Company (RMB) | 6,481,424,653.39 | 4,623,972,830.87 | 40.17% |
| Net profit attributable to shareholders of the Company excluding non-recurring gains and losses (RMB) | 6,221,476,627.98 | 4,463,498,377.68 | 39.39% |
| Net cash flows from operating activities (RMB) | 1,962,853,772.15 | 69,966,340.57 | 2,705.43% |
| Basic earnings per share (RMB/share) | 0.695 | 0.493 | 40.97% |
| Diluted earnings per share (RMB/share) | 0.695 | 0.493 | 40.97% |
| Weighted average ROE | 11.62% | 9.75% | 1.87% |
| On June 30th 2021 | On December 31st 2020 | Change(%) between December 31st 2020 and June 30th 2021 | |
| Total assets (RMB) | 87,118,829,064.12 | 88,701,682,384.20 | -1.78% |
| Net assets attributable to shareholders of the Company (RMB) | 52,905,875,478.79 | 53,794,311,162.05 | -1.65% |
| The total share capital of the Company as of the previous trading day of the annual report disclosure (share) | 9,335,806,114 |
| Fully diluted earnings per share (RMB/share) calculated with the latest share capital | 0.6943 |
Hikvision 2021 Half Year Report
V. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Difference in the financial report of net profits and net assets according to the disclosure of InternationalFinancial Reporting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of InternationalFinancial Reporting Standards (IFRS) and China Accounting Standards in the reporting period.
2. Difference in the financial report of net profits and net assets according to the disclosure of OverseasAccounting Standards and China Accounting Standards
□ Applicable √ Inapplicable
There is no difference in the financial report of net profits and net assets according to the disclosure of OverseasAccounting Standards and China Accounting Standards in the reporting period.
3. Explanation of the differences in accounting data under domestic and overseas accounting standards
□ Applicable √ Inapplicable
VI. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Inapplicable
Unit：RMB
| Item | Amount |
| Profit or loss from disposal of non-current assets (including the write-off for the impairment provision of assets) | -1,805,042.17 |
| The government subsidies included in the current profits and losses (excluding the government subsidy closely related to regular course of business of the Company and government subsidy based on standard quota or quantitative continuous application according to the state industrial policy.) | 224,341,379.44 |
| Profits and losses attributed to change in fair value for held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, and derivative financial liabilities; and investment income from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, excluding the effective hedging business related to the regular business operation of the Company. | 45,938,231.46 |
| Other non-operating income and expenditures except the items mentioned above | 28,546,193.64 |
| Less: Impact of income tax | 12,489,507.02 |
| Impact of the minority interests (after tax) | 24,583,229.94 |
| Total | 259,948,025.41 |
Hikvision 2021 Half Year Report
Explain the reasons if the Company classifies an item as a non-recurring gain/loss according to the definition in the<Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-recurring Gains and Losses>, or classifies any non-recurring gain/loss item mentioned in theaforementioned note as a recurrent gain/loss item
□ Applicable √ Inapplicable
In the reporting period, the Company did not classify an item as a non-recurring gain/loss according to thedefinition in the <Explanatory Announcement No. 1 on Information Disclosure for Companies Offering TheirSecurities to the Public—Non-recurring Gains and Losses> into a recurrent gain/loss item
Hikvision 2021 Half Year Report
Section III Management Discussion and AnalysisI. The principal business of the Company during the reporting periodThere was no significant change for the principal business of the Company during the current reporting period.Please refer to 2020 Annual Report for details.II. Core Competitiveness AnalysisThere was no significant change in the Company's core competitiveness during the current reporting period.For details, Please refer to 2020 Annual Report for details.III. Core business analysisWhether consistent with the Company’s core business disclosure during the current reporting period
√ yes □ no
In the first half year of 2021, some countries and regions continued to suffer periodical economic stagnationand recession as the outbreak of COVID-19 epidemic was not effectively controlled. At the same time, the U.S.government continued to put pressure on Chinese science-and-technology enterprises, which further affected globalsupply chains and market conditions. In the face of the conflicts and changes in the global environment, theCompany has always taken technological innovation as the most important means for its survival and development,and has continued to promote its sound development.During the reporting period, the Company achieved a total operating income of RMB 33.90 billion, with yearover year growth of 39.68%; the net profits attributable to shareholders of the listed company was RMB 6.48 billion,with year over year growth of 40.17%. The Company's overall gross profit margin for the first half year of 2021was 46.30%.
(1) Increase inputs in R&D and consolidate basic capabilities to embrace opportunities and challenges
During the reporting period, the Company continued to adhere to technological innovation and maintainedinputs in research and development (R&D). In the first half year of 2021, the Company invested RMB 3.88 billion
Hikvision 2021 Half Year Report
in R&D, which accounted for 11.44% of the Company's operating income, representing a further increase of theR&D expense ratio. In terms of hardware, the Company continued to strengthen its dominant position in the fieldof video products, and actively implemented intellectualized upgrade of non-video products. In terms of software,the Company continued to build its supporting capacities for large system software so as to support the rapiddevelopment and iteration of industry applications. Hikvision continues to improve its technology system with IoTperception, artificial intelligence and big data as the core, and its comprehensive competitiveness is further enhanced.
(2) Forge ahead with determination, innovative businesses is creating a new pattern
During the reporting period, the spin-off of smart home business was steadily and orderly rolled out, andEZVIZ Network as a whole was changed to a limited liability company by shares and entered the stage of pre-listingcounseling period. With solid accumulation of algorithm and strong hardware and software developmentcapabilities, Hikrobot focused on mobile robot and machine vision business, and continued to help the developmentof global intelligent manufacturing. Other innovative businesses continued to develop rapidly and graduallyopenning up new opportunities. The innovative businesses as a whole accounted for 16.46% of the Company'srevenue in the first half year of 2021 and is gradually becoming a new driving force for the Company's furtherdevelopment.
(3) Conduct prudent operation and ensure supply chain security
During the reporting period, the Company worked closely with its supplier partners and continued the highinventory strategy for raw materials, continuously promoting the replenishment and optimization of raw materialsto cope with the uncertainty of overseas political and epidemic situations and to safeguard the supply chain.Meanwhile, the Company strengthened the fine management of supply chain, optimized delivery efficiency, andensured stable delivery of products and solutions.
(4) Improve operations and continue to promote the construction of a compliance system
Hikvision has always adhered to the business philosophy of "professionalism, integrity and honesty". Facingexternal pressure, the Company has strengthened its cost control and optimization efforts and strived to improve itsinternal operation. Meanwhile, the Company continues to promote the construction of a global compliance system
Hikvision 2021 Half Year Report
to further drive internationalization of the Company's governance system and control level, and to ensure a healthyand sustainable business development.Year-over-Year Changes in Key financial data
Unit: RMB
| First half year of 2021 | First half year of 2020 | YoY (%) | Note of Change | |
| Operating Income | 33,902,098,368.10 | 24,271,159,243.76 | 39.68% | Market demand has grown steadily, and operating income has grown accordingly |
| Operating costs | 18,205,195,764.46 | 12,193,719,945.38 | 49.30% | Increase in accordance with operating income growth |
| Selling expenses | 4,190,678,349.80 | 3,420,291,518.42 | 22.52% | No significant change |
| Administrative expenses | 880,577,747.56 | 864,959,489.94 | 1.81% | No significant change |
| Financial expenses | -122,524,438.07 | -227,972,206.73 | 46.25% | Affected by fluctuation in foreign exchange rate, increase in foreign currency exchange losses |
| Income Tax Expenses | 427,530,365.26 | 952,552,145.97 | -55.12% | The evaluation and appraisal time period of key software company for the Company was inconsistent (the evaluation and appraisal time period of the previous year was in the third quarter), led to inconsistent confirmation and recognition time period for income tax settlement and tax difference, resulting in fluctuations |
| R&D investments | 3,877,769,884.09 | 3,063,423,679.69 | 26.58% | No significant change |
| Net cash flows from Operating Activities | 1,962,853,772.15 | 69,966,340.57 | 2705.43% | Increase in sales collection in this period |
| Net cash flows from Investment Activities | -1,093,875,260.68 | -1,494,484,813.41 | 26.81% | No significant change |
| Net cash flows from Financing Activities | -8,179,553,539.73 | -3,478,066,296.84 | -135.18% | Increase in net outflow of borrowings and dividend payments during the current reporting period |
| Net increase in cash and cash equivalents | -7,384,873,758.46 | -4,892,161,050.91 | -50.95% | Affected by the increase in financing expenditures in the current reporting period |
Hikvision 2021 Half Year Report
Operating income structure
Unit：RMB
| First half year of 2021 | First half year of 2020 | YoY Change (%) | |||
| Amount | Proportion to operating income | Amount | Proportion to operating income | ||
| Total operating income | 33,902,098,368.10 | 100.00% | 24,271,159,243.76 | 100.00% | 39.68% |
| Classified by industry | |||||
| Video products and video services | 33,902,098,368.10 | 100.00% | 24,271,159,243.76 | 100.00% | 39.68% |
| Classified by product/business | |||||
| Products and Services | 27,912,531,793.59 | 82.33% | 21,460,287,527.81 | 88.42% | 30.07% |
| Constructions | 411,198,176.84 | 1.21% | 300,094,975.52 | 1.24% | 37.02% |
| Subtotal | 28,323,729,970.43 | 83.54% | 21,760,382,503.33 | 89.66% | 30.16% |
| Smart home business | 1,871,108,774.85 | 5.52% | 1,179,170,706.81 | 4.86% | 58.68% |
| Robotic business | 1,220,189,435.48 | 3.60% | 542,724,420.13 | 2.23% | 124.83% |
| Other innovative businesses Note | 2,487,070,187.34 | 7.34% | 788,881,613.49 | 3.25% | 215.27% |
| Subtotal | 5,578,368,397.67 | 16.46% | 2,510,776,740.43 | 10.34% | 122.18% |
| Classified by region | |||||
| Domestic | 24,434,618,189.74 | 72.07% | 16,728,998,825.16 | 68.93% | 46.06% |
| Overseas | 9,467,480,178.36 | 27.93% | 7,542,160,418.60 | 31.07% | 25.53% |
| First half year of 2021 | First half year of 2020 | YoY Change (%) | |
| PBG | 77.17 | 59.68 | 29.31% |
| EBG | 72.19 | 59.14 | 22.07% |
| SMBG | 61.74 | 30.00 | 105.80% |
| Total | 211.10 | 148.82 | 41.85% |
Hikvision 2021 Half Year Report
Industries, products or regions accounting for more than 10% of the Company’s operating income oroperating profit
√ Applicable □ Inapplicable
Unit: RMB
| Operating income | Operating cost | Gross margin | YoY Change (%) of operating income | YoY Change (%) of operating cost | YoY Change (%) of gross margin | |
| Classified by industry | ||||||
| Video products and video services | 33,902,098,368.10 | 18,205,195,764.46 | 46.30% | 39.68% | 49.30% | -3.46% |
| Classified by product/business | ||||||
| Products and Services | 27,912,531,793.59 | 14,658,060,589.78 | 47.49% | 30.07% | 40.72% | -3.98% |
| Constructions | 411,198,176.84 | 291,842,825.70 | 29.03% | 37.02% | 24.06% | 7.42% |
| Subtotal | 28,323,729,970.43 | 14,949,903,415.48 | 47.22% | 30.16% | 40.35% | -3.83% |
| Smart home business | 1,871,108,774.85 | 1,172,850,667.99 | 37.32% | 58.68% | 58.16% | 0.21% |
| Robotic business | 1,220,189,435.48 | 642,233,986.43 | 47.37% | 124.83% | 136.14% | -2.52% |
| Other innovative businesses | 2,487,070,187.34 | 1,440,207,694.56 | 42.09% | 215.27% | 172.60% | 9.06% |
| Subtotal | 5,578,368,397.67 | 3,255,292,348.98 | 41.64% | 122.18% | 111.13% | 3.05% |
| Classified by region | ||||||
| Domestic | 24,434,618,189.74 | 13,251,763,818.92 | 45.77% | 46.06% | 49.62% | -1.28% |
| Overseas | 9,467,480,178.36 | 4,953,431,945.54 | 47.68% | 25.53% | 48.46% | -8.08% |
| Industry | Item | First half year of 2021 | First half year of 2020 | Increase/ decrease over previous year | ||
| Amount | Proportion to operating cost | Amount | Proportion to operating cost | |||
| Video products and video services | Operating cost | 18,205,195,764.46 | 100.00% | 12,193,719,945.38 | 100.00% | 49.30% |
Hikvision 2021 Half Year Report
Classified by product/business
Unit: RMB
| Product/business | Item | First half year of 2021 | First half year of 2020 | YoY Change (%) | ||
| Amount | Proportion to operating cost | Amount | Proportion to operating cost | |||
| Products and Services | Operating cost | 14,658,060,589.78 | 80.52% | 10,416,612,740.28 | 85.43% | 40.72% |
| Constructions | Operating cost | 291,842,825.70 | 1.60% | 235,236,267.84 | 1.93% | 24.06% |
| Subtotal | Operating cost | 14,949,903,415.48 | 82.12% | 10,651,849,008.12 | 87.36% | 40.35% |
| Smart home business | Operating cost | 1,172,850,667.99 | 6.44% | 741,575,630.80 | 6.08% | 58.16% |
| Robotic business | Operating cost | 642,233,986.43 | 3.53% | 271,967,778.00 | 2.23% | 136.14% |
| Other innovative businesses | Operating cost | 1,440,207,694.56 | 7.91% | 528,327,528.46 | 4.33% | 172.60% |
| Subtotal | Operating cost | 3,255,292,348.98 | 17.88% | 1,541,870,937.26 | 12.64% | 111.13% |
| June 30th 2021 | December 31st 2020 | YoY Change (%) | Note of significant change | |||
| Amount | Percentage of total assets | Amount | Percentage of total assets | |||
| Cash and bank balances | 27,732,252,975.47 | 31.83% | 35,459,729,108.27 | 39.98% | -8.15% | Cash dividend distributions lead to a decrease in monetary funds |
| Accounts receivable | 23,802,312,768.61 | 27.32% | 21,979,380,716.86 | 24.78% | 2.54% | No significant change |
| Contract assets | 184,239,074.35 | 0.21% | 245,754,510.98 | 0.28% | -0.07% | No significant change |
Hikvision 2021 Half Year Report
| June 30th 2021 | December 31st 2020 | YoY Change (%) | Note of significant change | |||
| Amount | Percentage of total assets | Amount | Percentage of total assets | |||
| Inventories | 15,094,505,445.05 | 17.33% | 11,477,906,040.70 | 12.94% | 4.39% | Expansion of production and sales scale led to increased procurement and stocking |
| Long-term equity investment | 861,206,603.12 | 0.99% | 864,026,710.23 | 0.97% | 0.02% | No significant change |
| Fixed assets | 6,258,625,760.95 | 7.18% | 5,876,007,536.60 | 6.62% | 0.56% | No significant change |
| Construction in process | 1,705,622,399.38 | 1.96% | 1,425,235,193.72 | 1.61% | 0.35% | Increase in construction investments on Science and Technology Parks in various locations |
| Right-of-use assets | 379,766,223.73 | 0.44% | - | - | 0.44% | Impact of the implementation of the new lease standard in 2021 |
| Short-term borrowings | 3,142,918,040.93 | 3.61% | 3,999,246,634.59 | 4.51% | -0.90% | decrease in demands for temporary capital turnover |
| Contract liabilities | 2,490,674,992.63 | 2.86% | 2,161,166,671.26 | 2.44% | 0.42% | No significant change |
| Long-term borrorwings | 1,911,015,151.08 | 2.19% | 1,961,167,761.30 | 2.21% | -0.02% | No significant change |
| Lease liabilities | 199,494,520.78 | 0.23% | - | - | 0.23% | Impact of the implementation of the new lease standard in 2021 |
Hikvision 2021 Half Year Report
3. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB
| Item | Opening balance | Profit or loss from change in fair value during the current reporting period | Cumulative changes in fair value included in equity | Provision for decline in value during the current reporting period | Purchased amount during the period | Sales during the period | Closing balance |
| Financial assets | |||||||
| Derivative financial assets | 22,679,846.77 | 9,989,549.68 | 32,620,061.54 | ||||
| Other non-current financial assets | 491,939,067.27 | -23,277,319.84 | 468,661,747.43 | ||||
| Receivables for financing | 1,959,601,195.25 | 1,120,170,492.09 | |||||
| Subtotal of financial assets | 2,474,220,109.29 | -13,287,770.16 | 1,621,452,301.06 | ||||
| Financial Liabilities | 7,405,771.15 | 3,738,240.76 | 3,651,541.77 | ||||
| Item | Closing Book Value (RMB) | Reasons for being restricted |
| Cash and bank balance | 92,288,855.62 | Various cash deposits and other restricted funds |
| Notes receivable | 610,856,089.84 | Endorsed to suppliers |
| Right-of-use assets | 34,568,644.07 | Right-of-use assets resulted from sale and leaseback |
| Long-term receivables | 1,812,883,463.06 | Pledge for long-term borrowings |
| Total | 2,550,597,052.59 |
Hikvision 2021 Half Year Report
| Investment during the first half year of 2021 (RMB) | Investment during the first half year of 2020 (RMB) | YoY (%) |
| 1,097,198,077.60 | 1,309,423,538.62 | -16.21% |
Hikvision 2021 Half Year Report
3. Significant non-equity investment during the current reporting period
√ Applicable □ Inapplicable
Unit: RMB
| Project name | Invest method | Fixed assets investment or not | Project industry | Investment during the current reporting period | Cumulative amount of investment by the end of the current reporting period | Source of funds | Project schedule | Reasons for not reaching planned progress and expected benefits | Disclosure Date (if applicable) | Disclosure Index (if applicable) |
| Chengdu Science and Technology Park Project | Self-built | YES | Video product and video service | 128,026,667.79 | 649,653,461.12 | Self-fund | 32.99% | None | September 23rd 2017 | Announcement on Investment and Construction of Chengdu Science and Technology Park Project in Chengdu (No. 2017-033) |
| Chongqing Science and Technology Park Project-phase 2 | Self-built | YES | Video product and video service | 144,149,199.63 | 393,959,450.42 | Self-fund | 100.00% | None | September 23rd 2017 | Announcement on Investment and Construction of Chongqing Science and Technology Park in Chongqing (No. 2017-035) |
| Hangzhou Innovation Industry Park | Self-built | YES | Video product and video service | 24,816,079.94 | 362,637,782.43 | Specific Loan | 35.34% | None | September 23rd 2017 | Announcement on Investment and Construction of Hangzhou Innovation Industry Park Project in Hangzhou (No. 2017-034) |
| Xi’an Science and Technology Park Project | Self-built | YES | Video product and video service | 115,889,658.76 | 128,568,833.69 | Self-fund | 5.64% | None | September 23rd 2017 | Announcement on Investment and Construction of Xi’an Science and Technology Park in Xi’an (2017-031) |
Hikvision 2021 Half Year Report
| Project name | Invest method | Fixed assets investment or not | Project industry | Investment during the current reporting period | Cumulative amount of investment by the end of the current reporting period | Source of funds | Project schedule | Reasons for not reaching planned progress and expected benefits | Disclosure Date (if applicable) | Disclosure Index (if applicable) |
| Shijiazhuang Science and Technology Park Project | Self-built | YES | Video product and video service | 46,522,461.29 | 48,583,014.75 | Self-fund | 5.41% | None | March 22nd 2018 | Announcement on Investment and Construction of Shijiazhuang Science and Technology Park in Shijiazhuang (2018-016) |
| EZVIZ Industry Park | Self-built | YES | Video product and video service | 41,416,910.43 | 43,748,977.51 | Self-fund | 5.48% | None | - | - |
| Zhengzhou Science and Technology Park Project | Self-built | YES | Video product and video service | 4,800,801.74 | 18,330,211.27 | Self-fund | 3.78% | None | - | - |
| Wuhan Intelligence Industry Park Project | Self-built | YES | Video product and video service | - | 4,339,622.64 | Self-fund | 0.15% | None | September 23rd2017 | Announcement on Investment and Construction of Wuhan Intelligence Industry Park in Wuhan (2017-036) |
| Wuhan Science and Technology Park Project | Self-built | YES | Video product and video service | 2,043,915.61 | 4,414,462.50 | Self-fund | 0.34% | None | September 23rd2017 | Announcement on Investment and Construction of Wuhan Science and Technology Park Project in Wuhan (2017-032) |
Hikvision 2021 Half Year Report
| Project name | Invest method | Fixed assets investment or not | Project industry | Investment during the current reporting period | Cumulative amount of investment by the end of the current reporting period | Source of funds | Project schedule | Reasons for not reaching planned progress and expected benefits | Disclosure Date (if applicable) | Disclosure Index (if applicable) |
| Total | -- | -- | -- | 507,665,695.19 | 1,654,235,816.33 | -- | -- |
Hikvision 2021 Half Year Report
(2) Derivatives Investments
√ Applicable □ Inapplicable
Unit: 0,000 RMB
| Operation party of derivatives investment | Whether Related party | Whether related transaction | Type of derivatives investment | Initial investment amount of derivatives investment | Initial date | Termination date | Opening investment amount | Purchased amount during the reporting period | Sold amount during the reporting period | Impairment provisions (if any) | Closing investment amount | Proportion of closing investment amount to the Company’s net assets at the end of the reporting period | Actual gain or loss during the reporting period |
| Commercial bank | No | No | foreign exchange contract | 351,670.38 | October 21st 2020 | December 20th 2021 | 351,670.38 | 295,153.42 | 269,295.04 | 4.99% | 7,044.03 | ||
| Total | 351,670.38 | -- | -- | 351,670.38 | 295,153.42 | 269,295.04 | 4.99% | 7,044.03 | |||||
| Capital source of derivatives investment | Company’s own fund | ||||||||||||
| Prosecution (if applicable) | Nil | ||||||||||||
| Announcement date for approvals of derivatives investment from the board of directors (if any) | December 25th 2019/April 17th 2021 | ||||||||||||
| Announcement date for approvals of derivatives investment from the general meeting of shareholders (if any) | May 16th 2020 | ||||||||||||
Hikvision 2021 Half Year Report
| Risk analysis and control measures (including but not limited to, market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) of holding derivatives during the reporting period | For details of the risk analysis and control measures, please refer to the Announcement on Conducting Foreign Exchange Hedging Transactions in 2020 (NO. 2019-065) dated December 25th 2019 and the Announcement on Conducting Foreign Exchange Hedging Transactions in 2021 (NO. 2021-030) dated April 17th 2021 of the Company |
| Change of market price or fair value of invested derivatives during the reporting period; specific methods, related assumptions and parameter setting of the derivatives’ fair value analysis should be disclosed | The Company’s accounting of derivatives’ fair value is mainly about the outstanding contracts signed with banks for forward exchange settlement during the reporting period. Held-for-trading financial assets/liabilities are determined with difference between the quoted price and forward exchange price in outstanding forward exchange contracts at the end of the period. |
| During the current reporting period, whether there was significant changes of accounting policies and accounting principles of the Company’s derivatives comparing to the prior reporting period | Nil |
| Specific opinions on the Company’s derivatives investments and risk control from independent directors | Nil |
Hikvision 2021 Half Year Report
VIII. Analysis of major subsidiaries and holding companies
√Applicable □Inapplicable
Information about major subsidiaries, and holding companies that contribute above 10% of the Company’s netprofit
| Company name | Company type | Principal business | Registered capital | Total assets | Net assets | Net profit |
| Hangzhou Hikvision Technology Co., Ltd. | Subsidiary | General projects: technical services, technology development, technical consultation, technical exchanges, technology transfer, technology promotion; digital video surveillance system manufacturing; digital video surveillance system sales; security equipment manufacturing; security equipment sales; computer software, hardware and peripheral equipment manufacturing; computers Wholesale of software, hardware and auxiliary equipment; Electronic components manufacturing; electronic components wholesale; Internet of Things equipment manufacturing; Internet of Things equipment sales; mobile terminal equipment manufacturing; mobile terminal equipment sales; communication equipment manufacturing; communication equipment sales; Production of special labor protection products; sales of special labor protection products; manufacturing of refrigeration and air-conditioning equipment; sales of refrigeration and air-conditioning equipment; Manufacturing of electrical machinery and equipment; sales of electrical machinery and equipment; manufacturing of transformers, rectifiers and inductors; Research and development of power distribution switch control equipment; sales of power distribution switch control equipment; sales of batteries; sales of electronic products; Artificial intelligence hardware sales; software development; computer system services; | 1,000 million | 39,935,834,510.78 | 4,542,786,482.29 | 42,871,317.85 |
Hikvision 2021 Half Year Report
security system monitoring services;information technology consulting services;information system integration services;information system operation andmaintenance services; Big data services;Internet data services; data processing andstorage support services; Internet of Thingstechnical services; Internet of Thingsapplication services; marketing planning(except for projects that must be approvedin accordance with the law, carry outbusiness activities independently accordingto law with business license).Licensed items: import and export ofgoods; import and export of technology(items that are subject to approval inaccordance with the law can only be carriedout after approval by the relevantdepartments, and the specific business itemsare subject to the approval results).
Hikvision 2021 Half Year Report
Information about obtaining and disposal of subsidiaries during the reporting period
√ Applicable □ Inapplicable
| Company name | Equity acquisition and disposal method during the reporting period | Impact on overall production results |
| Shanghe Smart City Technology Co., Ltd. | Cash contribution | Business development |
| Chongqing EZVIZ Electronics Co., Ltd. | Cash contribution | Business development |
| Hangzhou EZVIZ Technology Co., Ltd. | Releasing the entrustment agreement | Reorganization |
| Hundure Technology (Shanghai) Co., Ltd. | Liquidation & cancellation | Reorganization |
Hikvision 2021 Half Year Report
(5) Global business risk: The Company proactively studied and researched policies, trade laws, regulationsand relevant substantial changes of various countries around the world, and developed countermeasures to reducevarious potential trade compliance risks.
(6) Legal compliance risk: The Company continued to strengthen the construction of compliance and riskcontrol system, conducted immediate and full-cycle risk supervision and control of business, and improved its legalcompliance capability.
(7) Exchange rate fluctuation risk: The Company attached great importance to the control of exchange raterisk, and hedged and avoided exchange rate risk by various means while ensuring security and liquidity. Forexchange rate risk exposure, the Company actively adopted financial hedging tools (e.g., hedging), not takingspeculation as the purpose, and conducted risk management in a reasonable manner.
(8) Network security risk: The Company has always attached great importance to and actively takenmeasures to improve the security performance of its products and systems, established the product security systemby setting up a professional information security team, integrated product security requirements, security design,security development, security testing and other links into the product development process, ensured continuousimprovement of product and system security and provided customers with more secure products and solutions inthe Internet/IoT application environment.
(9) Risk of intellectual property rights: The Company has set up a professional team for intellectualproperty rights which is responsible for the daily management and maintenance of intellectual property rights (e.g.,trademarks and patents) and for combating infringement against the Company's intellectual property rights byvarious legal means (e.g., administrative investigation and court litigation).
Hikvision 2021 Half Year Report
Section IV Corporate GovernanceI. Annual General Meeting and Extraordinary General Meetings convened during the ReportingPeriod
1. Annual General Meeting convened during the reporting period
| Meeting | Nature | Proportion of participating investors | Convened Date | Disclosure Date | Resolution of the Meeting |
| The first Extraordinary General Meeting of Shareholders in 2021 | Extraordinary General Meeting of Shareholders | 70.0131% | March 5th 2021 | March 6th 2021 | 9 proposals including the Proposal on Election of Non-Independent Directors of the Fifth Session of the Board of Directors were reviewed and voted. For details, please refer to the Company's announcement: No. 2021-020. |
| 2020 Annual General Meeting | Annual General Meeting | 70.2837% | May 14th 2021 | May 15th 2021 | 20 proposals including the 2020 Annual Report and Summary were reviewed and voted. For details, please refer to the Company's announcement: No. 2021-039. |
Hikvision 2021 Half Year Report
| Name | Position | Types of change | Data | Reason |
| Gong Hongjia | Director | Left the position after the expiry of his tenure | March 5th 2021 | General election |
| Cheng Tianzong | Independent Director | Left the position after the expiry of his tenure | March 5th 2021 | General election |
| Wang Zhidong | Independent Director | Left the position after the expiry of his tenure | March 5th 2021 | General election |
| Wang Qiuchao | Director | Appointment and dismissal | March 5th 2021 | General election |
| Wu Xiaobo | Independent Director | Elected | March 5th 2021 | General election |
| Hu Ruimin | Independent Director | Elected | March 5th 2021 | General election |
| Li Shuhua | Independent Director | Elected | March 5th 2021 | General election |
| Guan Qingyou | Independent Director | Elected | March 5th 2021 | General election |
| Chneg Huifang | Chairman of the Supervisory Board | Left the position after the expiry of his tenure | March 5th 2021 | General election |
| Hong Tianfeng | Chairman of the Supervisory Board | Appointment and dismissal | March 5th 2021 | General election |
| Lu Jianzhong | Supervisor | Appointment and dismissal | March 5th 2021 | General election |
| Gong Hongjia | Vice Chairman | Left the position after the expiry of his tenure | March 12th 2021 | General election |
| Fu Baijun | Senior deputy general manager | Left the position after the expiry of his tenure | March 12th 2021 | General election |
| Jiang Yufeng | Senior deputy general manager | Left the position after the expiry of his tenure | March 12th 2021 | General election |
| Xu Peng | Senior deputy general manager | Hired | March 12th 2021 | General election |
| Guo Xudong | Senior deputy general manager | Hired | March 12th 2021 | General election |
Hikvision 2021 Half Year Report
IV. The implementation of an Equity Incentive Plan, Employee Stock Incentive Plan, or other incentive plans
√Applicable □Inapplicable
During the reporting period, the Company has completed the third vesting, repurchase and cancellation of the2016 Restricted Share Incentive Sheme and the first vesting, repurchase and cancellation of the 2018 RestrictedShare Incentive ShemeOn December 25
th
2020, the Proposal on Vesting Conditional Achievements for the Third Vesting Period ofthe 2016 Restricted Share Incentive Scheme, the Proposal on the Third Repurchase and Cancellation of theGranted but Unvested Restricted Shares under the Restricted Share Incentive Scheme of 2016, the Proposal onVesting Conditional Achievements for the First Vesting Period of the 2018 Restricted Share Incentive Scheme, andthe Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under theRestricted Share Incentive Scheme of 2018 were deliberated and adopted by the 20
thMeeting of the fourth sessionof the Board of Directors and the 17
th
Meeting of the fourth session of the Board of Supervisors of the Company.According to the authorization of the 2
nd
Extraordinary General Meeting of 2016 and the 2
nd
ExtraordinaryGeneral Meeting of 2018 of the Company, The Company handled the vesting of a total of 66,796,439 restrictedshares for 5,937 incentive grantees. The restricted shares were listed for circulation on January 20
th
2021; at thesame time, 7,611,076 granted but unvested shares that did not meet the incentive conditions were repurchased andcancelled, and the repurchase and cancellation procedures were completed as of June 30
th
2021.For details, please refer to the Indicative Announcement on Vesting, Listing and Circulation of Shares in theThird Vesting Period of the 2016 Restricted Share Incentive Scheme (Announcement No.: 2021-004), IndicativeAnnouncement on Vesting, Listing and Circulation of Shares in the First Vesting Period of the 2018 Restricted ShareIncentive Scheme (Announcement No. 2021-005), and Announcement on the Completion of the Third Repurchaseand Cancellation of the Granted but Unvested Restricted Shares under the 2016 Restricted Share Incentive Schemeand the First Repurchase and Cancellation of the Granted but Unvested Restricted Shares under the 2018 RestrictedShare Incentive Scheme (Announcement No.: 2021-042) issued by the Company on January 18
th
2021 ad July 2
nd
2021, respectively.
As of the end of the current reporting period, the Company has a total of 68,762,683 granted but unvestedshares, accounting for 0.74% of the Company's total share capital.
The Company performs accounting treatments related to restricted share incentive plans in accordance with
Hikvision 2021 Half Year Report
the requirements of Accounting Standards for Business Enterprises No. 11-Share Payments and other relatedaccounting standards. The cost of the shares granted by the 2018 Restricted Share Incentive Scheme is amortizedduring the vesting period.During the reporting period, the amortization cost of the Company's 2018 Restricted Share Incentive Schemehad no significant impact on the Company's financial status and operating results. For details, please refer toFinancial Statement Note (XI)-Share-based Payment.
Hikvision 2021 Half Year Report
Section V Environmental and Social ResponsibilityI. Significant environmental issues
Whether the Company or any of its subsidiarids should be categorized as a critical pollutant enterprises publishedby national environmental protection department
□Yes √No.
II. Social responsibilitiesDuring the reporting period, the Company has not yet carried out poverty alleviation and rural revitalization.
Hikvision 2021 Half Year Report
Section VI Significant EventsI. Complete and incomplete commitments of the Company and its actual controller, shareholders, relatedparties, acquirers, and other related parties for the commitments during the current reporting period.
□Applicable √Inapplicable
No such case during the current reporting period.II. The Company’s funds used by the controlling shareholder or its related parties for non-operatingpurposes.
□ Applicable √ Inapplicable
No such case duiring the current reporting period.
III. Illegal provision of guarantees for external parties
□ Applicable √ Inapplicable
No such case in the current reporting period.
IV. Engagement and disengagement of the CPA firmHas the half year report been audited?
□ Yes √ No
The Company's half year report has not been audited.
V. Explanation given by the board of directors, supervisory committee and independent directors (ifapplicable) regarding the “non-standard auditor’s report” issued by the CPA firm for the current reportingperiod
□ Applicable √ Inapplicable
VI. Explanation given by the board of directors regarding the “non-standard auditor’s report” forthe prior reporting period
□ Applicable √ Inapplicable
Hikvision 2021 Half Year Report
VII. Bankruptcy and restructuring
□ Applicable √ Inapplicable
No such case during the reporting period.VIII. Material litigationsMaterial litigation and arbitration
□ Applicable √ Inapplicable
The Company had no material litigation or arbitration during the current reporting period.Other litigation matters
□ Applicable √Inapplicable
IX. Punishments and rectifications
□ Applicable √ Inapplicable
No such case during the reporting period.X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Inapplicable
XI. Significant related-party transaction
1. Related-party transactions arising from routine daily operations
√Applicable □Inapplicable
Hikvision 2021 Half Year Report
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related party transactions | Trading Amount （0’000 RMB） | Proportion to the amount of similar transactions. | Approved trading quota (0’000 RMB） | Whether exceed the approved quota | Settlement method | Disclosure date | Disclosure reference |
| Subsidiaries or research institutes of CETC | Under the common control of the Company’s actual controller. | Procurement | Procurement, receiving services | Reference market price; Agreed on price | 95,404.99 | 4.25% | 150,000 | No | Payment on delivery | March 13th 2021 | Announcement on the forecast of daily related-party transactions in 2021 (No. 2021-024) |
| Shanghai Fullhan Micro Co., Ltd. and its subsidiaries | The Company’s shareholder who holds more than 5% of the Company’s shares, Gong Hongjia is the director of the related party | Procurement | 43,502.85 | 1.94% | 90,000 | No | Payment on delivery | ||||
| Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries | Wu Weiqi, director of the Company, served as director of this company | Procurement | 9,276.50 | 0.41% | 20,000 | No | Payment on delivery | ||||
| Wuhu Sensor Technology Co., Ltd.and its subsidiaries | Wu Weiqi, director of the Company, served as director of this company | Procurement | 5,364.45 | 0.24% | 15,000 | No | Payment on delivery | ||||
| Zhiguang Hailian Big Data Technology Co., Ltd. and its subsidiaries | An associated company held by the company | Procurement | - | 0.00% | 500 | No | Payment on delivery |
Hikvision 2021 Half Year Report
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related party transactions | Trading Amount （0’000 RMB） | Proportion to the amount of similar transactions. | Approved trading quota (0’000 RMB） | Whether exceed the approved quota | Settlement method | Disclosure date | Disclosure reference |
| Zhejiang Haishi Huayue Digital Technology Co., Ltd. | A joint venture company held by the company; The Company’s senior management is appointed as this company’s chairman | Procurement | - | 0.00% | 500 | No | Payment on delivery | ||||
| Shenzhen Hikvision City Service Operation Co., Ltd. and its subsidiaries | A joint venture company held by the company | Procurement | 3.10 | 0.00% | 500 | No | Payment on delivery | ||||
| Subsidiaries or research institutes of CETC | Under the common control of the Company’s actual controller. | Sales | Providing services, selling products, commercial goods | Reference market price; Agreed on price | 23,576.67 | 0.70% | 70,000 | No | Payment on delivery | March 13th 2021 | Announcement on the forecast of daily related-party transactions in 2021 (No. 2021-024) |
| Daishan Hailai Yunzhi Technology Co., Ltd. | A joint venture company held by the company | Sales | 1,685.88 | 0.05% | 5,000 | No | Payment on delivery | ||||
| Wuhu Sensor Technology Co., Ltd.and its subsidiaries | Wu Weiqi, director of the Company, served as director of this company | Sales | 46.55 | 0.00% | 1,000 | No | Payment on delivery | ||||
| Zhejiang Haishi Huayue Digital Technology Co., Ltd. | A joint venture company held by the company; The Company’s senior management is | Sales | 757.13 | 0.02% | 5,000 | No | Payment on delivery |
Hikvision 2021 Half Year Report
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related party transactions | Trading Amount （0’000 RMB） | Proportion to the amount of similar transactions. | Approved trading quota (0’000 RMB） | Whether exceed the approved quota | Settlement method | Disclosure date | Disclosure reference |
| appointed as this company’s chairman | |||||||||||
| Sanmenxia Xiaoyun Vision Technology Co., Ltd. | An associated company held by the company | Sales | - | 0.00% | 1,000 | No | Payment on delivery | ||||
| Shenzhen Wanyu Security Service Technology Co., Ltd. and its subsidiaries | The Company’s senior management is appointed as directors of this company | Sales | - | 0.00% | 500 | No | Payment on delivery | ||||
| Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries | Wu Weiqi, director of the Company, served as director of this company | Sales | 10.84 | 0.00% | 1,000 | No | Payment on delivery | ||||
| Qinghai Qingtang Big Data Co., Ltd. | An associated company held by the company | Sales | 52.37 | 0.00% | 1,000 | No | Payment on delivery | ||||
| Zhiguang Hailian Big Data Technology Co., Ltd. and its subsidiaries | An associated company held by the company | Sales | 2,307.94 | 0.07% | 5,000 | No | Payment on delivery | ||||
| Jiaxin Haishi JiaAn Zhicheng Technology Co., Ltd. | An associated company held by the company | Sales | 809.85 | 0.02% | 7,000 | No | Payment on delivery | ||||
| Xuzhou Kangbo Urban Operation | A joint venture company held by the company | Sales | 1.17 | 0.00% | 1,000 | No | Payment on delivery |
Hikvision 2021 Half Year Report
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related party transactions | Trading Amount （0’000 RMB） | Proportion to the amount of similar transactions. | Approved trading quota (0’000 RMB） | Whether exceed the approved quota | Settlement method | Disclosure date | Disclosure reference |
| Management Service Co., Ltd. | |||||||||||
| Guangxi Haishi Urban Operation Management Co., Ltd. and its subsidiaries | A joint venture company held by the company | Sales | 34.74 | 0.00% | 2,000 | No | Payment on delivery | ||||
| Zhejiang City Digital Technology Co., Ltd. | A joint venture company held by the company | Sales | 1,276.85 | 0.04% | 6,000 | No | Payment on delivery | ||||
| Shenzhen Hikvision City Service Operation Co., Ltd. and its subsidiaries | A joint venture company held by the company | Sales | 1,097.71 | 0.03% | 6,000 | No | Payment on delivery | ||||
| Yunnan Yinghai Parking Service Co., Ltd. | A joint venture company held by the company | Sales | - | 0.00% | 4,000 | No | Payment on delivery | ||||
| Total | 185,209.59 | - | 392,000 | - | - | - | - | ||||
| Details on significant sales return | None | ||||||||||
| Total amount of related transactions projected based on different categories, and the actual performance during the current reporting period (if any) | None | ||||||||||
| Reasons on significant difference between trading price and market referencing price (if applicable) | Not applicable | ||||||||||
Hikvision 2021 Half Year Report
2. Related-party transactions regarding purchase and disposal of assets or equity
□Applicable √Inapplicable
No such case in the reporting period.
3. Significant related-party transactions arising from joint investments on external parties
□Applicable √Inapplicable
No such case in the reporting period.
4. Related credit and debt transactions
□ Applicable √Inapplicable
No related-parties’ creditor’s rights or debts during the reporting period.
5. Deals with related-party financial companies and financial companies controlled by the Company
√Applicable □Inapplicable
Deposit business
| Related Party | Relationship | Maximum daily deposit limit (0,000 RMB) | Deposit interest rate range | Opening Balance (0,000 RMB) | Amout incurred (0,000 RMB) | Clsoing Balance(0,000 RMB) |
| CETC Finance Co., Ltd. | Under the common control of the Company's ultimate controller | 1,089,594.87 | 2.00% | 400,000.00 | - | 400,000.00 |
| Related Party | Relationship | Busiess Type | Total Amount (0,000 RMB) | Actual amout incurred (0,000 RMB) |
| CETC Finance Co., Ltd. | Under the common control of the Company's ultimate controller | Credit | 300,000.00 | - |
Hikvision 2021 Half Year Report
On April 18
th2019, the Proposal on Entering into the Entrusted Management Agreement and Related-PartyTransaction with the Controlling Shareholder was deliberated and adopted by the 10
th
Meeting of the fourth sessionof the Board of Directors of the Company. On April 19
th2019, the Company entered into the Entrusted ManagementAgreement with CETHIK and Hangzhou EZVIZ Technology Co., Ltd. (hereinafter referred to as "EZVIZTechnology"), agreeing that CETHIK shall entrust EZVIZ Network to enforce the actual operation and managementrights over its wholly-owned subsidiary EZVIZ Technology. On March 27
th
2021, to further optimize the businessprocess of EZVIZ Network, based on the actual production and operation needs of EZVIZ Network, and uponconsensus of the three parties through amicable and full negotiation, EZVIZ Network signed the TerminationAgreement of the Entrusted Management Agreement with CETHIK and EZVIZ Technology. EZVIZ Network willno longer exercise the actual operation and management rights over EZVIZ Technology or be responsible for theproduction, operation and management of EZVIZ Technology.Disclosure website for provisional reports on significant related-party transactions:
| Title of provisional repo/rts | Disclosure date | Disclosure website |
| Announcement on the Signing of the "Entrusted Management Agreement" and Related Party Transactions with the Controlling Shareholders (Announcement No. 2019-026) | April 20th 2019 | www.cninfo.com.cn |
| Announcement on the Signing of the "Entrusted Management Agreement" Termination Agreement and Related Party Transactions Progress (Announcement No. 2021-025) | March 30th 2021 | www.cninfo.com.cn |
Hikvision 2021 Half Year Report
On December 3
rd2018, the Proposal on Carrying out Financial Leasing Related Party Transactions betweenthe Holding Innovative Business Subsidiary and China Electronics Technology Leasing Co. Ltd. was approved atthe 7th meeting of the 4
thBoard of Directors of the Company. In 2019, the Company's holding subsidiary HangzhouHikMicro Sensing Technology Ltd. and China Electronics Technology Leasing Co. Ltd. signed the FinancialLeasing Contract, where HIKMICRO used some of its own equipment to start leaseback business with ChinaElectronics Technology Leasing Co. Ltd.; the financing amount was RMB 70 million, term of lease 48 months andannual lease rate 3.80%.
Hikvision 2021 Half Year Report
2. Significant guarantees
√Applicable □ Inapplicable
Unit: RMB’0000
| Guarantees provided by the Company to its subsidiaries | ||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee Cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Term of guarantee | Fulfilled or not | Guarantee for a related party or not |
| Hangzhou Hikvision Technology Co., Ltd. | April 17th 2021 | 1,010,000.00 | October 24th 2019 | 415,499.35 | Joint guarantee | 2019.10.24-2025.09.25 | No | Yes |
| Urumqi HaiShi Xin’An Electronic Technology Co., Ltd. | April 17th 2021 | 40,000.00 | March 29th 2019 | 26,307.14 | Joint guarantee | 2019.03.29-2028.06.20 | No | Yes |
| Luo Pu HaiShi Ding Xin Electronic Technology Co., Ltd. | April 17th 2021 | 30,000.00 | March 26th 2019 | 22,240.00 | Joint guarantee | 2019.03.26-2035.06.26 | No | Yes |
| Pi Shan HaiShi Yong An Electronic Technology Co., Ltd. | April 17th 2021 | 30,000.00 | March 26th 2019 | 21,978.00 | Joint guarantee | 2019.03.26-2040.06.26 | No | Yes |
| Mo Yu HaiShi Electronic Technology Co., Ltd. | April 17th 2021 | 25,000.00 | March 26th 2019 | 17,980.00 | Joint guarantee | 2019.03.26-2035.03.26 | No | Yes |
| Hangzhou Hikvision System Technology Co., Ltd. | April 17th 2021 | 46,000.00 | November 29th 2019 | 14,558.33 | Joint guarantee | 2019.11.29-2023.11.17 | No | Yes |
| Yu Tian HaiShi Mei Tian Electronic Technology Co., Ltd. | April 17th 2021 | 30,000.00 | March 26th 2019 | 9,560.00 | Joint guarantee | 2019.03.26-2034.03.26 | No | Yes |
| Hikvision Singapore Pte. Ltd. | April 17th 2021 | 78,900.00 | September 15th 2020 | 6,354.75 | Joint guarantee | 2020.09.15-2023.12.31 | No | Yes |
| Chongqing Hikvision Technology Co., Ltd. | April 17th 2021 | 82,250.00 | March 23rd 2020 | 2,955.08 | Joint guarantee | 2020.03.23-2022.3.22 | No | Yes |
| Hangzhou Hikvision Electronics Co., Ltd. | April 17th 2021 | 25,000.00 | March 6th 2021 | 2,019.09 | Joint guarantee | 2021.03.06-2022.3.05 | No | Yes |
Hikvision 2021 Half Year Report
| Hikvision International Co., Ltd. | April 17th 2021 | 33,000.00 | May 10th 2018 | 1,957.13 | Joint guarantee | 2018.05.10-2022.5.31 | No | Yes |
| Wuhan Hikvision Technology Co., Ltd. | April 17th 2021 | 20,000.00 | Not happened during the reporting period | |||||
| Shijiazhuang Hikvision Technology Co., Ltd. | April 17th 2021 | 20,000.00 | Not happened during the reporting period | |||||
| Xi’an Hikvision Digital Technology Co., Ltd. | April 17th 2021 | 20,000.00 | Not happened during the reporting period | |||||
| Chengdu Hikvision Digital Technology Co., Ltd. | April 17th 2021 | 20,000.00 | Not happened during the reporting period | |||||
| Shanghe Smart City Technology Co., Ltd. | April 17th 2021 | 20,000.00 | Not happened during the reporting period | |||||
| Zhenping Haikang Juxin Digital Technology Co., Ltd. | April 17th 2021 | 18,000.00 | Not happened during the reporting period | |||||
| Hefei Hikvision Digital Technology Co., Ltd. | April 17th 2021 | 10,000.00 | Not happened during the reporting period | |||||
| Nanchang Hikvision Digital Technology Co., Ltd. | April 17th 2021 | 10,000.00 | Not happened during the reporting period | |||||
| Zhengzhou Hikvision Digital Technology Co., Ltd. | April 17th 2021 | 10,000.00 | Not happened during the reporting period | |||||
| Nanjing Hikvision Digital Technology Co., Ltd. | April 17th 2021 | 10,000.00 | Not happened during the reporting period | |||||
| Chongqing Hikvision System Technology Co., Ltd. | April 17th 2021 | 10,000.00 | Not happened during the reporting period | |||||
| Prama Hikvision India Private Limited | April 17th 2021 | 6,000.00 | Not happened during the reporting period | |||||
Hikvision 2021 Half Year Report
| Hikvision USA Inc. | April 17th 2021 | 2,100.00 | Not happened during the reporting period | ||||||
| Hikvision Europe B.V. | April 17th 2021 | 2,000.00 | Not happened during the reporting period | ||||||
| PT. Hikvision Technology Indonesia | April 17th 2021 | 1,400.00 | Not happened during the reporting period | ||||||
| Hikvision Turkey Technology And Security Systems Commerce JSC | April 17th 2021 | 350.00 | Not happened during the reporting period | ||||||
| Total guarantee cap for subsidiaries approved during the reporting period(B1) | 1,610,000.00 | Total actual guarantee amount for subsidiaries during the reporting period(B2) | 781,997.72 | ||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period(B3) | 1,610,000.00 | Total actual guarantee balance for subsidiaries at the end of the reporting period(B4) | 541,408.87 | ||||||
| Guarantees provided by the Company’s subsidiary to another subsidiary | |||||||||
| Guaranteed party | Disclosure date of announcement of the guarantee cap | Guarantee Cap | Actual occurrence date | Actual guaranteed amount | Type of guarantee | Term of guarantee | Fulfilled or not | Guarantee for a related party or not | |
| Hangzhou Haikang Intelligent Technology Co., Ltd. | April 17th 2021 | 50,000.00 | Not happened during the reporting period | ||||||
| Hangzhou Hikmicro Intelligent Technology Co., Ltd. | April 17th 2021 | 30,000.00 | Not happened during the reporting period | ||||||
| Hangzhou Hikstorage Technology Co., Ltd. | April 17th 2021 | 10,000.00 | Not happened during the reporting period | ||||||
| Total guarantee cap for subsidiaries approved during the reporting period (C1) | 90,000.00 | Total actual guarantee amount for subsidiaries during the reporting period (C2) | - | ||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period（C3） | 90,000.00 | Total actual guarantee balance for subsidiaries at the end of the reporting period(C4) | - | ||||||
Hikvision 2021 Half Year Report
| The total amount of Company’s guarantees (that is, the total of the first three items) | |||
| Total guarantee cap approved during the reporting period（A1+B1+C1） | 1,700,000.00 | Total actual guarantee amount during the reporting period（A2+B2+C2） | 781,997.72 |
| Total approved guarantee cap at the end of reporting period（A3+B3+C3） | 1,700,000.00 | Total actual guarantee balance at the end of the reporting period（A4+B4+C4） | 541,408.87 |
| Portion of the total actual guarantee (A4+B4+C4) amount in net assets of the Company | 10.23% | ||
| Of which: | |||
| The balance of guarantee for shareholders, actual controllers and their affiliates. (D) | 0 | ||
| Amount of debt guarantees provided directly or indirectly for entities with a liability-to-asset ratio over 70% (E) | 508,916.69 | ||
| Total amount of guarantee exceeding 50% of net assets (F) | 0 | ||
| Total guarantee amount of the above-mentioned 3 kinds of guarantees (D+E+F) | 508,916.69 | ||
Hikvision 2021 Half Year Report
3. Entrusted financial management
□ Applicable √ Inapplicable
No such case during the reporting period
4. Significant contracts for daily operations
□ Applicable √ Inapplicable
5. Other significant contracts
□ Applicable √ Inapplicable
XIII. Other significant events
√ Applicable □ Inapplicable
On January 8
th2021, the Proposal on Adjustment of Domestic Listing Board for the Spin-off of the Company’sSubsidiary Hangzhou EZVIZ Network Co., Ltd., the Proposal on the Spin-off of the Subsidiary Hangzhou EZVIZNetwork Co., Ltd. to be Listed on the Science and Technology Innovation Board and other related proposals weredeliberated and adopted by the 21
st
Meeting of the fourth session of the
Board of Directors and the 18
th
Meeting ofthe fourth session of the Board of Supervisors of the Company, agreeing the initial public offering of ordinary shares(A shares) in RMB of EZVIZ Network after the shareholding reform and listing of EZVIZ Network on the scienceand technology innovation board of Shanghai Stock Exchange. For details, please refer to the Proposal of HangzhouHikvision Digital Technology Co., Ltd. on the Spin-off of its Subsidiary Hangzhou EZVIZ Network Co., Ltd. to beListed on the Science and Technology Innovation Board issued by the Company on January 9
th
2021.
XIV. Significant events of the Company’s subsidiaries
√ Applicable □Inapplicable
During the reporting period, the Company steadily promoted the spin-off of EZVIZ Network to be listed onthe Science and Technology Innovation Board of Shanghai Stock Exchange. On January 8
th
2021, the Proposal on
Hikvision 2021 Half Year Report
the Spin-off of the Company’s Subsidiary Hangzhou EZVIZ Network Co., Ltd. to be Listed on the Science andTechnology Innovation Board was deliberated and adopted by the 21
st
Meeting of the fourth session of the Board ofDirectors and the 18
th Meeting of the fourth session of the Board of Supervisors of the Company. On June 23
rd2021,the Proposal on the Overall Restructuring of the the Company’s Holding Subsidiary Hangzhou EZVIZ Network Co.,Ltd. as Limited Liability Company by Shares was deliberated and adopted by the 3
rd
Meeting of the StrategyCommittee in 2021 of the fifth session of the
Board of Directors of the Company. On June 24
th
2021, EZVIZNetwork as a whole was restructured and changed to a limited liability company by shares. On July 2
nd2021,Zhejiang Securities Regulatory Bureau of China Securities Regulatory Commission accepted the application filedby EZVIZ Network for initial public offering of A shares and pre-listing counseling for listing on the Science andTechnology Innovation Board.
Hikvision 2021 Half Year Report
Section VII Changes in Shares and Information about Shareholders
I. Changes in Share Capital
1. Table of changes in share capital
Unit: Share
| Before the change | Changes in the period (+, -) | After the change | |||||||
| Shares | Ratio | New Shares Issued | Bonus share | Share transferred from capital reserve | Others | Sub-total | Shares | Ratio | |
| 1. Shares subject to conditional restriction(s) | 1,248,025,260 | 13.36% | -55,138,469 | -55,138,469 | 1,192,886,791 | 12.78% | |||
| 1)State holdings | |||||||||
| 2)Shares held by State-owned corporate | |||||||||
| 3) Other domestic shares | 306,488,295 | 3.28% | -76,220,858 | -76,220,858 | 230,267,437 | 2.47% | |||
| Including: held by domestic corporates | |||||||||
| held by domestic natural person | 306,488,295 | 3.28% | -76,220,858 | -76,220,858 | 230,267,437 | 2.47% | |||
| 4) Foreign shares | 941,536,965 | 10.08% | 21,082,389 | 21,082,389 | 962,619,354 | 10.31% | |||
Hikvision 2021 Half Year Report
| Before the change | Changes in the period (+, -) | After the change | |||||||
| Shares | Ratio | New Shares Issued | Bonus share | Share transferred from capital reserve | Others | Sub-total | Shares | Ratio | |
| Including:held by overseas corporates | |||||||||
| held by overseas natural person | 941,536,965 | 10.08% | 21,082,389 | 21,082,389 | 962,619,354 | 10.31% | |||
| 2. Shares without restriction | 8,095,391,930 | 86.64% | 47,527,393 | 47,527,393 | 8,142,919,323 | 87.22% | |||
| 1) RMB ordinary shares | 8,095,391,930 | 86.64% | 47,527,393 | 47,527,393 | 8,142,919,323 | 87.22% | |||
| 2) Domestically listed foreign shares | |||||||||
| 3) Foreign shares listed overseas | |||||||||
| 4) Others | |||||||||
| 3. Total | 9,343,417,190 | 100.00% | -7,611,076 | -7,611,076 | 9,335,806,114 | 100.00% | |||
Hikvision 2021 Half Year Report
Incentive Scheme of 2018 were deliberated and adopted by the 20
th Meeting of the fourth session of the Board of Directors and the 17
thMeeting of the fourth sessionof the Board of Supervisors of the Company. According to the authorization of the 2
nd
Extraordinary General Meeting of 2016 and the 2
nd
Extraordinary GeneralMeeting of 2018 of the Company, the Board of Directors agreed to repurchase and cancel some of the granted but unvested restricted share that did not meet theconditions for share incentive. On March 5
th2021, the Proposal on the Third Repurchase and Cancellation of Granted but Unvested Restricted Shares under theRestricted Share Incentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under theRestricted Share Incentvie Scheme of 2018 were deliberated and adopted by the 1
st
Extraordinary General Meeting in 2021. On June 30
th2021, the Company hascompleted the repurchase and cancellation procedures for the above 7,611,076 restricted shares. The total share capital of the Company was reduced by 7,611,076shares from 9,343,417,190 shares to 9,335,806,114 shares.
Approval for changes in share capital
√Applicable □Inapplicable
On December 25
th
2020, the Proposal on the Third Repurchase and Cancellation of Granted but Unvested Restricted Shares under the Restricted ShareIncentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under the Restricted ShareIncentive Scheme of 2018 were deliberated and adopted by the 20
th
Meeting of the fourth session of the Board of Directors and the 17
th
Meeting of the fourth sessionof the Board of Supervisors of the Company. According to the authorization of the 2
nd Extraordinary General Meeting of 2016 and the 2
nd
Extraordinary GeneralMeeting of 2018 of the Company, the Board of Directors agreed to repurchase and cancel 7,611,076 shares of the granted but unvested restricted shares that did notmeet the conditions for share incentive. On March 5
th
2021, the Proposal on the Third Repurchase and Cancellation of Granted but Unvested Restricted Shares underthe Restricted Share Incentive Scheme of 2016 and the Proposal on the First Repurchase and Cancellation of Granted but Unvested Restricted Shares under theRestricted Share Incentive Scheme of 2018 were deliberated and adopted by the 1
stExtraordinary General Meeting in 2021.
Hikvision 2021 Half Year Report
Transfer for changes in share capital
√Applicable □Inapplicable
On June 30
th2021, the third repurchase and cancellation under the Restricted Share Incentive Scheme of 2016 and the first repurchase and cancellation under theRestricted Share Incentive Scheme of 2018 were completed, and the total share capital of the Company was reduced by 7,611,076 shares from 9,343,417,190 shares to9,335,806,114 shares.
Information about the implementation of share repurchase
□Applicable √Inapplicable
The implementation progress of reducing and repurchasing shares by centralized bidding
□Applicable √Inapplicable
Effects of changes in share capital on the basic earnings per share ("EPS"), diluted EPS, net assets per share attributable to common shareholders of theCompany, and other financial indexes over the last year and last period
□Applicable √Inapplicable
Other contents that the Company considers necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
2. Changes in restricted shares
√ Applicable □ Inapplicable
Hikvision 2021 Half Year Report
Unit: Share
| Name of shareholder | Opening restricted shares | Increased in current period | Vested in current period | Closing restricted shares | Note for restricted shares | Date of unlocking |
| Gong Hongjia | 762,461,110 | 200,043,704 | 962,504,814 | Restricted shares for senior executives | According to the relevant provisions of shares management for senior executives | |
| Hu Yangzhong | 136,591,708 | 48,150 | 136,639,858 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Grantees of restricted share incentive plan (consolidated) | 143,170,198 | 0 | 66,796,439 | 68,762,683 | Equity Incentive Restricted Shares | January 20th 2021 |
| Jiang Haiqing | 7,718,761 | 36,900 | 7,755,661 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | According to the relevant provisions of shares management for senior executives | |
| Wu Weiqi | 8,483,992 | 44,550 | 8,528,542 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Jia Yonghua | 3,303,858 | 32,850 | 3,336,708 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Li Pan | 3,184,688 | 32,850 | 3,217,538 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Huang Fanghong | 191,875 | 44,000 | 235,875 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Fu Baijun | 266,250 | 165,750 | 432,000 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for |
Hikvision 2021 Half Year Report
| Name of shareholder | Opening restricted shares | Increased in current period | Vested in current period | Closing restricted shares | Note for restricted shares | Date of unlocking |
| senior executives | ||||||
| Jiang Yufeng | 207,225 | 118,275 | 325,500 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Xu Lirong | 194,400 | 32,850 | 227,250 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| He Hongli | 207,225 | 41,400 | 248,625 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Pu Shiliang | 77,105 | 84,820 | 161,925 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Jin Yan | 50,800 | 96,200 | 147,000 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Bi Huijuan | 36,750 | 94,200 | 130,950 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Jin Duo | 49,275 | 32,850 | 82,125 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Cai Changyang | 49,275 | 32,850 | 82,125 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for |
Hikvision 2021 Half Year Report
| Name of shareholder | Opening restricted shares | Increased in current period | Vested in current period | Closing restricted shares | Note for restricted shares | Date of unlocking |
| senior executives | ||||||
| Xu Ximing | 0 | 29,550 | 29,550 | Restricted shares for senior executives + partial of the unlocked restricted shares turning into restricted shares for senior executives | ||
| Wang Qiuchao | 26,250 | 0 | 26,250 | Restricted shares for senior executives | ||
| Qu Liyang | 11,812 | 0 | 11,812 | Restricted shares for senior executives | ||
| Total | 1,066,282,557 | 201,011,749 | 66,796,439 | 1,192,886,791 | -- | -- |
Hikvision 2021 Half Year Report
III. Total number of shareholders and their shareholdings
Unit: Share
| Total number of common shareholders at the end of the reporting period | 219,924 | Total number of preferred shareholders with voting rights restored at the end of the current reporting period (if any) | 0 | ||||||
| Particulars about shares held by common shareholders with a shareholding percentage over 5% or the Top 10 of them | |||||||||
| Name of shareholder | Nature of shareholder | Share- holding 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 | Pledged or frozen | ||
| Status | Amount | ||||||||
| China Electronics Technology HIK Group Co., Ltd. | State-owned corporation | 38.91% | 3,632,897,256 | 0 | 0 | 3,632,897,256 | Pledged | 50,000,000 | |
| Gong Hongjia | Overseas individual | 10.31% | 962,504,814 | -54,110,000 | 962,504,814 | 0 | Pledged | 202,100,000 | |
| Xinjiang Weixun Investment Management Limited Partnership | Domestic non-state- owned corporation | 4.83% | 450,795,176 | 0 | 0 | 450,795,176 | Pledged | 17,810,000 | |
| Shanghai Gaoyi Asset Management Partnership (Limited Partnership) - Gaoyi Adjacent Mountain 1 Yuanwang Fund | Other | 2.30% | 215,000,000 | -35,000,000 | 0 | 215,000,000 | - | - | |
| Xinjiang Pukang Investment Limited Partnership | Domestic non-state-owned corporation | 1.95% | 182,510,174 | 0 | 0 | 182,510,174 | Pledged | 35,630,000 | |
| The 52nd Research | State-owned | 1.94% | 180,775,044 | 0 | 0 | 180,775,044 | - | - | |
Hikvision 2021 Half Year Report
| Institute at China Electronics Technology Group Corporation | corporation | ||||||||||
| Hu Yangzhong | Domestic Individual | 1.66% | 155,246,477 | -26,940,000 | 136,639,858 | 18,606,619 | - | - | |||
| Hong Kong Securities Clearing Company Ltd.(HKSCC) | Overseas corporation | 1.08% | 100,546,982 | -235,883,008 | 0 | 100,546,982 | - | - | |||
| Bank of China Co., Ltd. - Efunds Blue Chip Select Hybrid Securities Investment Fund | Other | 0.96% | 90,000,160 | 20,000,135 | 0 | 90,000,160 | - | - | |||
| Guo Minfang | Domestic Individual | 0.72% | 66,936,698 | 45,954,340 | 0 | 66,936,698 | - | - | |||
| Explanation on associated relationship or concerted actions among the above-mentioned shareholders: | China Electronics Technology HIK Group Co., Ltd. and The 52nd Research Institute at China Electronics Technology Group Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd.. Ms. Chen Chunmei, limited partner of Xinjiang Pukang Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Xinjiang Weixun Investment Management Limited Partnership and Xinjiang Pukang Investment Limited Partnership. Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert parties in accordance with the Measures for Management of the Disclosure of the Shareholding Changes of Shareholders of the Listed Company. | ||||||||||
| Particulars about shares held by the Top 10 common shareholders holding shares that are not subject to trading restriction(s) | |||||||||||
| Name of shareholder | Number of common shares without trading restrictions held at the period-end | Type of shares | |||||||||
| Type | Number | ||||||||||
| China Electronics Technology HIK Group Co., Ltd. | 3,632,897,256 | RMB common shares | 3,632,897,256 | ||||||||
| Xinjiang Weixun Investment Management Limited Partnership | 450,795,176 | RMB common shares | 450,795,176 | ||||||||
Hikvision 2021 Half Year Report
| Shanghai Gaoyi Asset Management Partnership (Limited Partnership) - Gaoyi Adjacent Mountain 1 Yuanwang Fund | 215,000,000 | RMB common shares | 215,000,000 | |
| Xinjiang Pukang Investment Limited Partnership | 182,510,174 | RMB common shares | 182,510,174 | |
| The 52nd Research Institute at China Electronics Technology Group Co. Ltd. | 180,775,044 | RMB common shares | 180,775,044 | |
| Hong Kong Securities Clearing Company Ltd.(HKSCC) | 100,546,982 | RMB common shares | 100,546,982 | |
| Bank of China Co., Ltd. - Efunds Blue Chip Select Hybrid Securities Investment Fund | 90,000,160 | RMB common shares | 90,000,160 | |
| Guo Minfang | 66,936,698 | RMB common shares | 66,936,698 | |
| Central Huijin Investment Co., Ltd. | 65,818,800 | RMB common shares | 65,818,800 | |
| CITIC Securities Company Limited | 58,796,352 | RMB common shares | 58,796,352 | |
| Explanation on associated relationship and concerted actions among top ten common shareholders holding shares without trading restrictions, and among top ten common shareholders and top ten common shareholders holding shares without trading restrictions | China Electronics Technology HIK Group Co., Ltd. and The 52nd Research Institute at China Electronics Technology Group Co., Ltd. are all subject to control of China Electronics Technology Group Co. Ltd. Ms. Chen Chunmei, limited partner of Xinjiang Pukang Investment Limited Partnership, is the spouse of Mr. Gong Hongjia, foreign individual shareholder of the Company. Hu Yangzhong, domestic individual, is holding shares in both Xinjiang Weixun Investment Management Limited Partnership and Xinjiang Pukang Investment Limited Partnership. Except for these, the Company does not know whether the other shareholders are related parties or whether they are acting-in-concert parties in accordance with the Measures for Management of the Disclosure of the Shareholding Changes of Shareholders of the Listed Company. | |||
Hikvision 2021 Half Year Report
| Name | Title | Tenure status | Shares held at the beginning of the current reporting period (shares) | Shares increased during the current reporting period (shares) | Shares decreased during the current reporting period (shares) | Shares held at the end of the current reporting period (Shares) | Number of restricted stocks held at the beginning of the current reporting period (shares) | Number of restricted stocks granted in the current reporting period (shares) | Number of restricted stocks held at the end of the current reporting period (shares) |
| Chen Zongnian | Chairman | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Qu Liyang | Director | Incumbent | 15,750 | 0 | 0 | 15,750 | 0 | 0 | 0 |
| Wang Qiuchao | Director | Incumbent | 35,000 | 0 | 0 | 35,000 | 0 | 0 | 0 |
| Hu Yangzhong | Director, General Manager (CEO) | Incumbent | 182,186,477 | 0 | 26,940,000 | 155,246,477 | 48,150 | 0 | 0 |
| Wu Weiqi | Director, Standing Deputy General Manager | Incumbent | 11,371,389 | 0 | 2,740,300 | 8,631,089 | 44,550 | 0 | 0 |
| Wu Xiaobo | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hu Ruimin | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Li Shuhua | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Guan Qingyou | Independent Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hong Tianfeng | Supervisor Chairman | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Lu Jianzhong | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Xu Lirong | Supervisor | Incumbent | 303,000 | 0 | 0 | 303,000 | 32,850 | 0 | 0 |
Hikvision 2021 Half Year Report
| Name | Title | Tenure status | Shares held at the beginning of the current reporting period (shares) | Shares increased during the current reporting period (shares) | Shares decreased during the current reporting period (shares) | Shares held at the end of the current reporting period (Shares) | Number of restricted stocks held at the beginning of the current reporting period (shares) | Number of restricted stocks granted in the current reporting period (shares) | Number of restricted stocks held at the end of the current reporting period (shares) |
| He Hongli | Senior Deputy General Manager | Incumbent | 331,500 | 0 | 0 | 331,500 | 41,400 | 0 | 0 |
| Cai Changyang | Senior Deputy General Manager | Incumbent | 109,500 | 0 | 0 | 109,500 | 32,850 | 0 | 0 |
| Xu Ximing | Senior Deputy General Manager | Incumbent | 197,000 | 0 | 0 | 197,000 | 197,000 | 0 | 118,200 |
| Bi Huijuan | Senior Deputy General Manager | Incumbent | 273,000 | 0 | 0 | 273,000 | 168,000 | 0 | 73,800 |
| Pu Shiliang | Senior Deputy General Manager | Incumbent | 295,900 | 0 | 0 | 295,900 | 144,820 | 0 | 60,000 |
| Jin Duo | Senior Deputy General Manager | Incumbent | 109,500 | 0 | 0 | 109,500 | 32,850 | 0 | 0 |
| Jin Yan | Senior Deputy General Manager, Person in charge of finance | Incumbent | 284,000 | 0 | 0 | 284,000 | 162,200 | 0 | 66,000 |
Hikvision 2021 Half Year Report
| Name | Title | Tenure status | Shares held at the beginning of the current reporting period (shares) | Shares increased during the current reporting period (shares) | Shares decreased during the current reporting period (shares) | Shares held at the end of the current reporting period (Shares) | Number of restricted stocks held at the beginning of the current reporting period (shares) | Number of restricted stocks granted in the current reporting period (shares) | Number of restricted stocks held at the end of the current reporting period (shares) |
| Huang Fanghong | Senior Deputy General Manager, Board Secretary | Incumbent | 402,500 | 0 | 0 | 402,500 | 110,000 | 0 | 66,000 |
| Chen Junke | Senior Deputy General Manager | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Xu Peng | Senior Deputy General Manager | Incumbent | 128,740 | 0 | 51,496 | 77,244 | 128,740 | 0 | 77,244 |
| Guo Xudong | Senior Deputy General Manager | Incumbent | 73,800 | 0 | 29,520 | 44,280 | 73,800 | 0 | 44,280 |
| Gong Hongjia | Vice Chairman | Left the position | 1,016,614,814 | 0 | 54,110,000 | 962,504,814 | 0 | 0 | 0 |
| Cheng Tianzhong | Independent Director | Left the position | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Wang Zhidong | Independent Director | Left the position | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cheng Huifang | Supervisor Chairman | Left the position | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Hikvision 2021 Half Year Report
| Name | Title | Tenure status | Shares held at the beginning of the current reporting period (shares) | Shares increased during the current reporting period (shares) | Shares decreased during the current reporting period (shares) | Shares held at the end of the current reporting period (Shares) | Number of restricted stocks held at the beginning of the current reporting period (shares) | Number of restricted stocks granted in the current reporting period (shares) | Number of restricted stocks held at the end of the current reporting period (shares) |
| Fu Baijun | Senior Deputy General Manager | Left the position | 495,000 | 0 | 0 | 495,000 | 163,950 | 0 | 63,000 |
| Jiang Yufeng | Senior Deputy General Manager | Left the position | 325,500 | 0 | 0 | 325,500 | 36,900 | 0 | 0 |
| Total | -- | -- | 1,213,552,370 | 0 | 83,871,316 | 1,129,681,054 | 1,418,060 | 0 | 568,524 |
Hikvision 2021 Half Year Report
Section VIII Information of Preferred Shares
□ Applicable √ Inapplicable
There is no preferred share existed for the Company during the current reporting period.
Hikvision 2021 Half Year Report
Section IX Bonds
□ Applicable √ Inapplicable
Hikvision 2021 Half Year Report
Section X Financial Report
I. Audit reportWhether audit has been performed on the half year report
□ Yes √ No
The Company’s 2021 Half Year Report has not been audited
Hikvision 2021 Half Year Report
Consolidated Balance Sheet
Unit: RMB
| Item | Notes | On June 30th 2021 | On December 31st 2020 |
| Current Assets: | |||
| Cash and bank balances | (V)1 | 27,732,252,975.47 | 35,459,729,108.27 |
| Held-for-trading financial assets | (V)2 | 32,620,061.54 | 22,679,846.77 |
| Notes receivable | (V)3 | 1,125,257,592.27 | 1,303,252,705.19 |
| Accounts receivable | (V)4 | 23,802,312,768.61 | 21,979,380,716.86 |
| Receivables for financing | (V)5 | 1,120,170,492.09 | 1,959,601,195.25 |
| Prepayments | (V)6 | 388,106,182.29 | 296,334,689.86 |
| Other receivables | (V)7 | 802,820,545.50 | 519,143,350.82 |
| Inventories | (V)8 | 15,094,505,445.05 | 11,477,906,040.70 |
| Contract assets | (V)9 | 184,239,074.35 | 245,754,510.98 |
| Non-current assets due within one year | (V)10 | 1,150,804,899.71 | 1,001,208,813.83 |
| Other current assets | (V)11 | 856,896,820.26 | 497,914,506.64 |
| Total Current Assets | 72,289,986,857.14 | 74,762,905,485.17 | |
| Non-current Assets: | |||
| Long-term receivables | (V)12 | 1,914,155,006.05 | 2,105,570,004.53 |
| Long-term equity investment | (V)13 | 861,206,603.12 | 864,026,710.23 |
| Other non-current financial assets | (V)14 | 468,661,747.43 | 491,939,067.27 |
| Fixed assets | (V)15 | 6,258,625,760.95 | 5,876,007,536.60 |
| Construction in progress | (V)16 | 1,705,622,399.38 | 1,425,235,193.72 |
| Right-of-use assets | (V)17 | 379,766,223.73 | |
| Intangible assets | (V)18 | 1,231,275,229.76 | 1,251,317,923.69 |
| Goodwill | (V)19 | 258,727,796.75 | 274,203,665.20 |
| Long-term deferred expenses | (V)20 | 99,951,903.09 | 108,584,686.85 |
| Deferred tax assets | (V)21 | 885,071,819.69 | 820,380,954.86 |
| Other non-current assets | (V)22 | 765,777,717.03 | 721,511,156.08 |
| Total Non-current Assets | 14,828,842,206.98 | 13,938,776,899.03 | |
| Total Assets | 87,118,829,064.12 | 88,701,682,384.20 |
Hikvision 2021 Half Year Report
Consolidated Balance Sheet-continued
Unit: RMB
| Item | Notes | On June 30th 2021 | On December 31st 2020 |
| Current Liabilities: | |||
| Short-term borrowings | (V)23 | 3,142,918,040.93 | 3,999,246,634.59 |
| Held-for-trading financial liabilities | (V)24 | 3,651,541.77 | 7,405,771.15 |
| Notes payable | (V)25 | 1,209,714,255.88 | 1,036,920,229.85 |
| Accounts payable | (V)26 | 12,448,273,747.80 | 13,593,884,790.19 |
| Contract liabilities | (V)27 | 2,490,674,992.63 | 2,161,166,671.26 |
| Payroll payable | (V)28 | 2,825,271,298.77 | 2,877,786,430.71 |
| Taxes payable | (V)29 | 1,630,608,808.16 | 1,770,057,908.62 |
| Other payables | (V)30 | 2,047,386,116.59 | 1,525,053,355.95 |
| Non-current liabilities due within one year | (V)31 | 3,520,220,816.79 | 3,507,680,339.78 |
| Other current liabilities | (V)32 | 747,671,171.39 | 745,711,579.57 |
| Total Current Liabilities | 30,066,390,790.71 | 31,224,913,711.67 | |
| Non-current Liabilities: | |||
| Long-term borrowings | (V)33 | 1,911,015,151.08 | 1,961,167,761.30 |
| Lease liabilities | (V)34 | 199,494,520.78 | |
| Long-term payables | (V)35 | 8,389,432.79 | 39,595,459.35 |
| Provisions | (V)36 | 159,098,659.69 | 151,443,871.02 |
| Deferred income | (V)37 | 190,729,918.28 | 190,878,987.69 |
| Deferred tax liabilities | (V)21 | 90,172,303.25 | 92,979,823.89 |
| Other non-current liabilitie | (V)38 | 511,594,361.52 | 560,959,368.74 |
| Total non-current liabilities | 3,070,494,347.39 | 2,997,025,271.99 | |
| Total liabilities | 33,136,885,138.10 | 34,221,938,983.66 | |
| Owners’ Equity | |||
| Share capital | (V)39 | 9,335,806,114.00 | 9,343,417,190.00 |
| Capital reserves | (V)40 | 5,183,088,784.77 | 5,178,777,462.09 |
| Less: Treasury shares | (V)41 | 1,023,188,723.04 | 1,121,918,737.47 |
| Other comprehensive income | (V)42 | (92,227,117.80) | (84,993,926.94) |
| Surplus reserves | (V)43 | 4,672,505,348.00 | 4,672,505,348.00 |
| Retained earnings | (V)44 | 34,829,891,072.86 | 35,806,523,826.37 |
| Total owners' equity attributable to owner of the Company | 52,905,875,478.79 | 53,794,311,162.05 | |
| Minority equity | 1,076,068,447.23 | 685,432,238.49 | |
| Total owners' equity | 53,981,943,926.02 | 54,479,743,400.54 | |
| Total liabilities and owners' equity | 87,118,829,064.12 | 88,701,682,384.20 |
Hikvision 2021 Half Year Report
Balance sheet of the parent company
Unit: RMB
| Item | Notes | On June 30th 2021 | On December 31st 2020 |
| Current Assets: | |||
| Cash and bank balances | 22,705,834,693.65 | 23,476,606,330.08 | |
| Notes receivable | 370,004,721.44 | 107,411,912.35 | |
| Accounts receivable | (XV)1 | 23,907,902,986.24 | 24,193,392,179.36 |
| Receivables for financing | 21,579,977.87 | 12,216,215.65 | |
| Prepayments | 72,051,251.61 | 62,946,087.75 | |
| Other receivables | (XV)2 | 1,198,721,134.79 | 726,703,133.65 |
| Inventories | 325,074,405.29 | 204,216,250.73 | |
| Contract assets | 3,563,131.57 | 3,311,250.08 | |
| Non-current assets due within one year | 70,471,164.31 | 71,208,685.76 | |
| Other current assets | 24,586,583.85 | 10,110,869.86 | |
| Total Current Assets | 48,699,790,050.62 | 48,868,122,915.27 | |
| Non-current Assets: | |||
| Long-term accounts receivable | 35,746,795.12 | 47,762,348.01 | |
| Long-term equity investment | (XV)3 | 6,920,188,651.76 | 6,727,373,453.97 |
| Other non-current financial assets | 465,777,527.43 | 489,054,847.27 | |
| Fixed assets | 2,742,544,667.09 | 2,762,700,997.83 | |
| Construction in progress | 401,652,840.56 | 388,903,828.81 | |
| Right-of-use assets | 75,012,711.54 | ||
| Intangible assets | 150,740,259.56 | 158,917,438.86 | |
| Long-term deferred expenses | 36,014,031.88 | 43,264,691.73 | |
| Deferred tax assets | 127,239,937.72 | 110,066,596.99 | |
| Other non-current assets | 14,073,185.02 | 2,740,576.47 | |
| Total Non-current Assets | 10,968,990,607.68 | 10,730,784,779.94 | |
| Total Assets | 59,668,780,658.30 | 59,598,907,695.21 |
Hikvision 2021 Half Year Report
Balance sheet of the parent company - continued
Unit: RMB
| Item | Notes | On June 30th 2021 | On December 31st 2020 |
| Current Liabilities: | |||
| Short-term borrowings | - | 1,431,233,375.00 | |
| Accounts payable | 373,452,615.01 | 540,664,512.60 | |
| Contract liabilities | 305,078,391.27 | 240,629,015.92 | |
| Payroll payable | 1,804,466,802.62 | 1,618,357,135.99 | |
| Taxes payable | 1,458,059,455.50 | 1,539,095,196.97 | |
| Other payables | 3,475,728,776.12 | 659,214,959.62 | |
| Non-current liabilities due within one year | 3,121,270,737.26 | 3,219,794,958.37 | |
| Other current liabilities | 554,919,670.37 | 589,167,743.26 | |
| Total Current Liabilities | 11,092,976,448.15 | 9,838,156,897.73 | |
| Non-current Liabilities: | |||
| Long-term borrowings | - | - | |
| Lease liabilities | 35,664,046.98 | ||
| Provisions | 74,510,513.83 | 85,230,299.84 | |
| Deferred Income | 103,943,615.85 | 122,455,935.44 | |
| Other non-current liabilities | 511,594,361.52 | 560,959,368.74 | |
| Total non-current liabilities | 725,712,538.18 | 768,645,604.02 | |
| Total liabilities | 11,818,688,986.33 | 10,606,802,501.75 | |
| Owners’ Equity | |||
| Share capital | 9,335,806,114.00 | 9,343,417,190.00 | |
| Capital reserves | 4,762,676,910.92 | 4,770,210,334.16 | |
| Less: Treasury shares | 1,023,188,723.04 | 1,121,918,737.47 | |
| Surplus reserves | 4,672,505,348.00 | 4,672,505,348.00 | |
| Retained earnings | 30,102,292,022.09 | 31,327,891,058.77 | |
| Total owners' equity | 47,850,091,671.97 | 48,992,105,193.46 | |
| Total liabilities and owners' equity | 59,668,780,658.30 | 59,598,907,695.21 |
Hikvision 2021 Half Year Report
Consolidated Income Statement
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period |
| I. Total operating income | (V)45 | 33,902,098,368.10 | 24,271,159,243.76 |
| Less：Total operating costs | (V)45 | 18,205,195,764.46 | 12,193,719,945.38 |
| Business taxes and surcharges | (V)46 | 280,470,004.15 | 168,072,165.25 |
| Selling expenses | 4,190,678,349.80 | 3,420,291,518.42 | |
| Administrative expenses | 880,577,747.56 | 864,959,489.94 | |
| Research and Development (R&D) expenses | 3,877,769,884.09 | 3,063,423,679.69 | |
| Financial expenses | (V)47 | (122,524,438.07) | (227,972,206.73) |
| Including：Interest expenses | 110,613,426.61 | 94,137,084.05 | |
| Interest income | 411,998,029.35 | 306,973,066.18 | |
| Add: Other Income | (V)48 | 1,076,047,292.02 | 994,778,394.15 |
| Investment income | (V)49 | 169,311,455.72 | 150,219,709.56 |
| Including: Investment losses in associated enterprise and joint-venture enterprise | (1,821,107.11) | (8,942,717.69) | |
| Losses from changes in fair values | (V)50 | (9,549,529.40) | (20,436,436.96) |
| Credit impairment losses | (V)51 | (311,905,460.79) | (152,772,469.77) |
| Impairment losses of assets | (V)52 | (258,336,972.38) | (165,394,158.33) |
| Asset disposal income | 3,760,896.87 | 21,554.99 | |
| II. Operating profit | 7,259,258,738.15 | 5,595,081,245.45 | |
| Add: Non-operating income | (V)53 | 42,002,720.90 | 31,721,207.08 |
| Less: Non-operating expenses | (V)54 | 18,855,336.72 | 7,378,765.56 |
| III. Total profit | 7,282,406,122.33 | 5,619,423,686.97 | |
| Less: Income tax expenses | (V)55 | 427,530,365.26 | 952,552,145.97 |
| IV. Net profit | 6,854,875,757.07 | 4,666,871,541.00 | |
| 4.1 Classification by continuous operation | |||
| (a) Net profit on continuous operation | 6,854,875,757.07 | 4,666,871,541.00 | |
| (b) Net loss on terminated operation | - | ||
| 4.2 Classification by attribution of ownership | |||
| (a) Profit or loss attributable to minority shareholders | 373,451,103.68 | 42,898,710.13 | |
| (b) Net profit attributable to owners of parent company | 6,481,424,653.39 | 4,623,972,830.87 | |
| V. Other comprehensive income, net of income tax | (V)42 | (8,260,441.80) | (26,796,178.37) |
| Other comprehensive income attributable to owners of the Company, net of tax | (7,233,190.86) | (24,482,915.47) | |
| (I) Items that will not be reclassified subsequently to profit or loss | - | - | |
| (II) Other comprehensive income to be reclassified to profit or loss in subsequent periods | (7,233,190.86) | (24,482,915.47) |
Hikvision 2021 Half Year Report
| Item | Notes | Amount for the current period | Amount for the prior period |
| 1. Exchange differences arising on conversion of financial statements denominated in foreign currencies | (7,233,190.86) | (24,482,915.47) | |
| Other comprehensive income attributable to minority interests, net of tax | (1,027,250.94) | (2,313,262.90) | |
| VI. Total comprehensive income | 6,846,615,315.27 | 4,640,075,362.63 | |
| Total comprehensive income attributable to owners of the parent company | 6,474,191,462.53 | 4,599,489,915.40 | |
| Total comprehensive income attributable to minority shareholders | 372,423,852.74 | 40,585,447.23 | |
| VII. Earnings per share | |||
| (I) Basic earnings per share | (XVI)2 | 0.695 | 0.493 |
| (II) Diluted earnings per share | (XVI)2 | 0.695 | 0.493 |
Hikvision 2021 Half Year Report
Income statement of the parent company
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period |
| I. Total operating income | (XV)4 | 12,917,726,385.73 | 11,584,268,085.23 |
| Less: Total operating Cost | (XV)4 | 2,509,299,575.74 | 2,922,006,997.48 |
| Business taxes and surcharges | 150,551,978.92 | 127,523,350.50 | |
| Selling expenses | 1,783,224,294.68 | 1,378,570,165.20 | |
| Administrative expenses | 314,616,473.56 | 382,045,872.60 | |
| Research and Development (R&D) expenses | 2,720,506,560.34 | 2,190,386,100.23 | |
| Financial expenses | (343,124,665.61) | (200,603,140.91) | |
| Including : Interest expenses | 10,397,669.93 | 13,789,744.18 | |
| Interest income | 308,600,906.50 | 215,501,593.83 | |
| Add: Other income | 814,486,093.98 | 797,244,362.60 | |
| Investment income | (XV)5 | 111,957,469.10 | 192,706,003.20 |
| Including: Investment losses in associated enterprise and joint-venture enterprise | (3,799,685.50) | (3,628,950.89) | |
| Losses from changes in fair values | (23,277,319.84) | (13,017,332.26) | |
| Credit impairment losses | (40,842,757.19) | (15,105,661.89) | |
| Gains (losses) on asset impairment | (78,025.86) | 1,095,084.66 | |
| Asset disposal income | 3,833,547.49 | 2,863.84 | |
| II. Operating profit | 6,648,731,175.78 | 5,747,264,060.28 | |
| Add: Non-operating income | 3,802,072.88 | 8,749,908.65 | |
| Less: Non-operating expenses | 9,890,999.61 | 1,267,522.90 | |
| III. Total profit | 6,642,642,249.05 | 5,754,746,446.03 | |
| Less: Income tax expenses | 410,183,878.83 | 812,649,281.30 | |
| IV. Net profit | 6,232,458,370.22 | 4,942,097,164.73 | |
| V. Other comprehensive income, net of income tax | - | - | |
| VI. Total comprehensive income | 6,232,458,370.22 | 4,942,097,164.73 |
Hikvision 2021 Half Year Report
Consolidated Cash Flow Statement
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 36,645,553,356.23 | 27,244,048,844.95 | |
| Receipts of tax refunds | 1,948,391,576.36 | 1,718,589,299.56 | |
| Other cash receipts relating to operating activities | (V)56(1) | 1,110,525,511.10 | 707,923,092.38 |
| Sub-total of cash inflows from operating activities | 39,704,470,443.69 | 29,670,561,236.89 | |
| Cash payments for goods purchased and services received | 25,383,102,780.25 | 19,503,212,062.93 | |
| Cash paid to and on behalf of employees | 6,909,644,086.23 | 5,587,456,744.73 | |
| Payments of various types of taxes | 2,538,596,422.62 | 2,463,618,915.37 | |
| Other cash payments relating to operating activities | (V)56(2) | 2,910,273,382.44 | 2,046,307,173.29 |
| Sub-total of cash outflows from operating activities | 37,741,616,671.54 | 29,600,594,896.32 | |
| Net Cash flows from Operating Activities | (V)57(1) | 1,962,853,772.15 | 69,966,340.57 |
| II. Cash flows from Investing Activities: | |||
| Cash receipts from recovery of investments | 3,831,776,958.90 | 967,045,868.90 | |
| Cash receipts from investment income | 116,643,801.97 | 150,000,000.00 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 6,017,061.25 | 2,855,619.32 | |
| Other cash receipts relating to investing activities | (V)56(3) | 6,182,818.55 | 14,990,732.87 |
| Sub-total of cash inflows from investing activities | 3,960,620,640.67 | 1,134,892,221.09 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 1,285,789,284.17 | 1,397,220,231.04 | |
| Cash paid to acquire investments | 3,761,350,647.76 | 1,232,156,803.46 | |
| Net cash paid for disposal of subsidiaries and other business units | (VI)1(1) | 7,355,969.42 | - |
| Sub-total of cash outflows from investing activities | 5,054,495,901.35 | 2,629,377,034.50 | |
| Net cash flows from Investing Activities | (1,093,875,260.68) | (1,494,484,813.41) | |
| III. Cash flows from financing activities: | |||
| Cash receipts from capital contributions | 5,750,000.00 | 154,264,987.03 | |
| Including: cash receipts from capital contributions from minority owners of subsidiaries | 5,750,000.00 | 154,264,987.03 | |
| Cash receipts from borrowings | 1,439,276,251.61 | 3,445,980,000.00 | |
| Cash receipts from issuance of bonds and SCP | - | 999,500,000.00 | |
| Sub-total of cash inflows from financing activities | 1,445,026,251.61 | 4,599,744,987.03 | |
| Cash repayments of borrowings | 2,352,226,510.55 | 1,459,216,468.29 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 7,064,746,308.01 | 6,554,304,815.58 | |
| Including : Dividends and profits paid by subsidiaries to minority shareholders | 1,500,000.00 | - | |
| Other cash payments relating to financing activities | (V)56(4) | 207,606,972.78 | 64,290,000.00 |
| Sub-total of cash outflows from financing activities | 9,624,579,791.34 | 8,077,811,283.87 | |
| Net cash flows from Financing Activities | (8,179,553,539.73) | (3,478,066,296.84) | |
| IV. Effect of foreign exchange rate changes on Cash and Cash Equivalents | (74,298,730.20) | 10,423,718.77 | |
| V. Net Decrease in Cash and Cash Equivalents | (V)57(1) | (7,384,873,758.46) | (4,892,161,050.91) |
| Add: Opening balance of Cash and Cash Equivalents | (V)57(1) | 35,024,837,878.31 | 26,515,668,008.40 |
| VI. Closing Balance of Cash and Cash Equivalents | (V)57(2) | 27,639,964,119.85 | 21,623,506,957.49 |
Hikvision 2021 Half Year Report
Cash Flow Statements of the parent company
Unit: RMB
| Item | Notes | Amount for the current period | Amount for the prior period |
| I. Cash flows from Operating Activities:: | |||
| Cash receipts from the sale of goods and the rendering of services | 14,695,266,847.20 | 10,102,563,972.01 | |
| Receipts of tax refunds | 737,640,128.60 | 751,843,296.77 | |
| Other cash receipts relating to operating activities | 810,301,539.46 | 375,348,009.24 | |
| Sub-total of cash inflows from operating activities | 16,243,208,515.26 | 11,229,755,278.02 | |
| Cash payments for goods acquired and services received | 3,146,599,060.27 | 3,428,323,188.51 | |
| Cash payments to and on behalf of employees | 3,533,262,244.48 | 3,021,694,357.17 | |
| Payments of various types of taxes | 1,854,362,234.39 | 1,820,418,512.27 | |
| Other cash payments relating to operating activities | 1,193,441,671.96 | 1,332,281,567.50 | |
| Sub-total of cash outflows from operating activities | 9,727,665,211.10 | 9,602,717,625.45 | |
| Net Cash flows from Operating Activities | 6,515,543,304.16 | 1,627,037,652.57 | |
| II. Cash flows from Investing Activities: | |||
| Cash receipts from recovery of investments | - | 2,800,000.00 | |
| Cash receipts from investment income | 120,143,801.97 | 150,000,000.00 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 6,720,944.51 | 1,142,724.61 | |
| Other cash receipts relating to investing activities | 7,834,524,088.17 | 1,698,134,887.49 | |
| Sub-total of cash inflows from investing activities | 7,961,388,834.65 | 1,852,077,612.10 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 189,587,482.90 | 294,745,004.28 | |
| Cash payments to acquire investments | 205,000,000.00 | 725,748,730.00 | |
| Other cash payments relating to investing activities | 8,126,886,684.35 | - | |
| Sub-total of cash outflows from investing activities | 8,521,474,167.25 | 1,020,493,734.28 | |
| Net Cash flows from Investing Activities | (560,085,332.60) | 831,583,877.82 | |
| III. Cash flows from Financing Activities | |||
| Cash receipts from borrowings | - | 2,480,000,000.00 | |
| Cash receipts from issuance of bonds and SCP | - | 999,500,000.00 | |
| Other cash receipts relating to financing activities | 9,731,292,792.85 | - | |
| Sub-total of cash inflows from financing activities | 9,731,292,792.85 | 3,479,500,000.00 | |
| Cash repayments of borrowings | 1,430,000,000.00 | 1,000,000,000.00 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 6,966,343,191.95 | 6,455,560,277.48 | |
| Other cash payments relating to financing activities | 7,859,321,152.86 | - | |
| Sub-total of cash outflows from financing activities | 16,255,664,344.81 | 7,455,560,277.48 | |
| Net Cash flows from Financing Activities | (6,524,371,551.96) | (3,976,060,277.48) | |
| IV. Effect of foreign exchange rate changes on Cash and Cash Equivalents | (7,549,854.62) | 32,767,298.25 | |
| V. Net decrease in cash and cash equivalents | (576,463,435.02) | (1,484,671,448.84) | |
| Add: Opening balance of cash and cash equivalents | 23,264,693,578.70 | 16,656,028,410.72 | |
| VI. Closing Balance of Cash and Cash Equivalents | 22,688,230,143.68 | 15,171,356,961.88 |
Hikvision 2021 Half Year Report
Consolidated Statement of Changes in Owners' Equity
Unit: RMB
| Items | Amount for the first half of 2021 | |||||||
| Owner’s equity attributable to the parent company | Minority interests | Total owners' equity | ||||||
| Share capital | Capital reserves | Less: Treasury share | Other comprehensive income | Surplus reserve | Retained profits | |||
| I. Closing balance of the prior year | 9,343,417,190.00 | 5,178,777,462.09 | 1,121,918,737.47 | (84,993,926.94) | 4,672,505,348.00 | 35,806,523,826.37 | 685,432,238.49 | 54,479,743,400.54 |
| II. Increase or decrease in the current period | (7,611,076.00) | 4,311,322.68 | (98,730,014.43) | (7,233,190.86) | - | (976,632,753.51) | 390,636,208.74 | (497,799,474.52) |
| (I) Total comprehensive income | - | - | - | (7,233,190.86) | - | 6,481,424,653.39 | 372,423,852.74 | 6,846,615,315.27 |
| (II) Owners’ contributions and reduction in capital | (7,611,076.00) | 4,311,322.68 | (37,631,007.23) | - | - | - | 19,712,356.00 | 54,043,609.91 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - | 5,750,000.00 | 5,750,000.00 |
| 2. Share-based payment recognized in owners’ equity | - | 119,354,237.28 | - | - | - | - | 14,754,392.73 | 134,108,630.01 |
| 3. Others | (7,611,076.00) | (115,042,914.60) | (37,631,007.23) | - | - | - | (792,036.73) | (85,815,020.10) |
| (III) Profit distribution | - | - | (61,099,007.20) | - | - | (7,458,057,406.90) | (1,500,000.00) | (7,398,458,399.70) |
| 1. Transfer to surplus reserves | - | - | - | - | - | - | - | - |
| 2. Distributions to shareholders | - | - | (61,099,007.20) | - | - | (7,458,057,406.90) | (1,500,000.00) | (7,398,458,399.70) |
| 3. Others | - | - | - | - | - | - | - | - |
| III. Closing balance of the current period | 9,335,806,114.00 | 5,183,088,784.77 | 1,023,188,723.04 | (92,227,117.80) | 4,672,505,348.00 | 34,829,891,072.86 | 1,076,068,447.23 | 53,981,943,926.02 |
Hikvision 2021 Half Year Report
Consolidated Statement of Changes in Owners' Equity-continued
Unit: RMB
| Items | Amount for the first half of 2020 | |||||||
| Owner’s equity attributable to the parent company | Minority interests | Total owners' equity | ||||||
| Share capital | Capital reserves | Less: Treasury share | Other comprehensive income | Surplus reserve | Retained profits | |||
| I. Closing balance of the prior year | 9,345,010,696.00 | 4,126,943,698.96 | 2,148,273,864.36 | (53,541,146.99) | 4,672,505,348.00 | 28,961,389,145.22 | 568,825,008.31 | 45,472,858,885.14 |
| II. Increase or decrease in the current period | - | 449,550,562.28 | (101,334,592.80) | (24,482,915.47) | - | (1,917,534,656.33) | 164,628,787.73 | (1,226,503,628.99) |
| (I) Total comprehensive income | - | - | - | (24,482,915.47) | - | 4,623,972,830.87 | 40,585,447.23 | 4,640,075,362.63 |
| (II) Owners’ contributions and reduction in capital | - | 449,550,562.28 | - | - | - | - | 121,593,340.50 | 571,143,902.78 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - | 154,264,987.03 | 154,264,987.03 |
| 2. Share-based payment recognized in owners’ equity | - | 460,632,426.68 | - | - | - | - | 20,536,489.07 | 481,168,915.75 |
| 3.The amount formed by the acquisition of minority shareholders' equity | - | (33,016,354.85) | - | - | - | - | (31,273,645.15) | (64,290,000.00) |
| 4.The amount formed by transferring the shares of the subsidiary | - | 2,380,508.81 | - | - | - | - | (2,380,508.81) | - |
| 5.The amount formed by the disposal of asset group | - | 19,553,981.64 | - | - | - | - | (19,553,981.64) | - |
| (III) Profit distribution | - | - | (101,334,592.80) | - | - | (6,541,507,487.20) | 2,450,000.00 | (6,437,722,894.40) |
| 1. Transfer to surplus reserves | - | - | - | - | - | - | - | - |
| 2. Distributions to shareholders | - | - | (101,334,592.80) | - | - | (6,541,507,487.20) | 2,450,000.00 | (6,437,722,894.40) |
| 3. Others | - | - | - | - | - | - | - | - |
| III. Closing balance of the current period | 9,345,010,696.00 | 4,576,494,261.24 | 2,046,939,271.56 | (78,024,062.46) | 4,672,505,348.00 | 27,043,854,488.89 | 733,453,796.04 | 44,246,355,256.15 |
Hikvision 2021 Half Year Report
Statement of Changes in Owners' Equity of the parent company
Unit: RMB
| Item | Amount for the first half of 2021 | |||||
| Share capital | Capital reserves | Less: Treasury share | Surplus reserve | Retained profits | Total owners' equity | |
| I. Closing balance of the prior year | 9,343,417,190.00 | 4,770,210,334.16 | 1,121,918,737.47 | 4,672,505,348.00 | 31,327,891,058.77 | 48,992,105,193.46 |
| II. Increase or decrease in the current period | (7,611,076.00) | (7,533,423.24) | (98,730,014.43) | - | (1,225,599,036.68) | (1,142,013,521.49) |
| (I) Total comprehensive income | - | - | - | - | 6,232,458,370.22 | 6,232,458,370.22 |
| (II) Owners’ contributions and reduction in capital | (7,611,076.00) | (7,533,423.24) | (37,631,007.23) | - | - | 22,486,507.99 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - |
| 2. Share-based payment recognized in owners’ equity | - | 107,499,558.04 | - | - | - | 107,499,558.04 |
| 3. Others | (7,611,076.00) | (115,032,981.28) | (37,631,007.23) | - | - | (85,013,050.05) |
| (III) Profit distribution | - | - | (61,099,007.20) | - | (7,458,057,406.90) | (7,396,958,399.70) |
| 1.Transfer to surplus reserve | - | - | - | - | - | - |
| 2.Distributions to shareholders | - | - | (61,099,007.20) | - | (7,458,057,406.90) | (7,396,958,399.70) |
| 3. Others | - | - | - | - | - | - |
| III. Closing balance of the current period | 9,335,806,114.00 | 4,762,676,910.92 | 1,023,188,723.04 | 4,672,505,348.00 | 30,102,292,022.09 | 47,850,091,671.97 |
Hikvision 2021 Half Year Report
Statement of Changes in Owners' Equity of the parent company-continued
Unit: RMB
| Item | Amount for the first half of 2020 | |||||
| Share capital | Capital reserves | Less: Treasury share | Surplus reserve | Retained profits | Total owners' equity | |
| I. Closing balance of the prior year | 9,345,010,696.00 | 4,064,833,739.52 | 2,148,273,864.36 | 4,672,505,348.00 | 25,196,894,651.27 | 41,130,970,570.43 |
| II. Increase or decrease in the current period | - | 481,168,915.75 | (101,334,592.80) | - | (1,599,410,322.47) | (1,016,906,813.92) |
| (I) Total comprehensive income | - | - | - | - | 4,942,097,164.73 | 4,942,097,164.73 |
| (II) Owners’ contributions and reduction in capital | - | 481,168,915.75 | - | - | - | 481,168,915.75 |
| 1. Capital contribution from shareholders | - | - | - | - | - | - |
| 2. Share-based payment recognized in owners’ equity | - | 481,168,915.75 | - | - | - | 481,168,915.75 |
| 3. Others | - | - | - | - | - | - |
| (III) Profit distribution | - | - | (101,334,592.80) | - | (6,541,507,487.20) | (6,440,172,894.40) |
| 1.Transfer to surplus reserve | - | - | - | - | - | - |
| 2.Distributions to shareholders | - | - | (101,334,592.80) | - | (6,541,507,487.20) | (6,440,172,894.40) |
| 3. Others | - | - | - | - | - | - |
| III. Closing balance of the current period | 9,345,010,696.00 | 4,546,002,655.27 | 2,046,939,271.56 | 4,672,505,348.00 | 23,597,484,328.80 | 40,114,063,756.51 |
st 2021 to June 30
th2021
I. Basic Information about the CompanyHangzhou Hikvision Digital Technology Co., Ltd. (hereinafter referred to as "Company" or "the Company" or“Hikvision”), is a Sino-foreign equity joint venture company, formerly known as "Hangzhou Hikvision DigitalTechnology Ltd", established on November 30
th2001 in Hangzhou upon the approval letter of Hangzhou High-tech No.604 [2001] issued by Hangzhou High-tech Industrial Development Zone Management Committee. On June 25
th2008,with approval of document No. 598 [2008] issued by the MOFCOM (The Ministry of Commerce of the People'sRepublic of China), the company was renamed as “Hangzhou Hikvision Digital Technology Co., Ltd.”, headquartered inHangzhou, and obtained the business license of enterprise No.91330000733796106P. On May 28
th2010, the Companywas listed on the Shenzhen Stock Exchange.
On June 26
th2019, authorized by the Company’s first Extraordinary General Meeting in 2014, the Companycompleted procedures of repurchase and cancellation of some of the 509,625 restricted stocks that did not meet theincentive conditions, and the total share capital of the Company was adjusted to 9,347,956,306 shares.
On September 3
rd2019, authorized by the Company’s second Extraordinary General Meeting in 2016, the Companycompleted procedures of repurchase and cancellation of some of the 2,945,610 restricted stocks that did not meet theincentive conditions, and the total share capital of the Company was adjusted to 9,345,010,696 shares.
On December 17
th2020, authorized by the Company’s second Extraordinary General Meeting in 2016, the Companycompleted procedures of repurchase and cancellation of some of the 1,593,506 restricted stocks that did not meet theincentive conditions, and the total share capital of the Company was adjusted to 9,343,417,190 shares.
On June 30
th2021, authorized by the Company’s second Extraordinary General Meeting in 2016 and the secondExtraordinary General Meeting in 2018, the Company completed procedures of repurchase and cancellation of some ofthe 7,611,076 restricted stocks that did not meet the incentive conditions, and the total share capital of the Company wasadjusted to 9,335,806,114 shares. For details of the share capital, please refer to Note (V), 39.
As of June 30
th
2021, the Company’s total registered capital is RMB 9,335,806,114, with total capital shares of9,335,806,114 shares (face value RMB 1 per share), of which restricted A-shares were 1,192,886,791 shares, A-shareswithout restriction are 8,142,919,323 shares.
The Company is involved in the sector of other electronic equipment manufacturing of the electronic industry. Themain business activities of the Company are licensed business items as follows: Class II and Class III ray device production;Class II and Class III ray device sales; Radioisotope production (except for short-half-life radiopharmaceuticals formedical use); Class II, Class III, Class IV and Class V radioactive sources sales; all kinds of engineering and constructionactivities; goods import and export, and technology import and export( as for the items subject to the approval of laws,business activities can be carried out only after being approved by the relevant departments, and the specific operationitems shall be in accordance with the approved norms.) General items: digital video surveillance system manufacturing;digital video surveillance system sales; security equipment manufacturing; security equipment sales; manufacturing of IoTequipment; sales of IoT equipment; manufacturing of intelligent unmanned aerial vehicles; sales of intelligent unmannedaerial vehicles; manufacturing of service consumption robots; manufacturing of industrial robots; manufacturing of robotsfor special operations; sales of intelligent robots; manufacturing of computer software and hardware and peripherals;wholesale of computer software and hardware and auxiliary equipment; manufacturing of communication equipment;sales of communication equipment; manufacturing of network equipment; sales of network equipment; manufacturing ofdisplay devices; sales of display devices; manufacturing of intelligent on-board equipment; sales of intelligent on-boardequipment; manufacturing of auto parts and accessories; wholesale of auto parts and accessories; manufacturing of electricsignal appliance and device; sales of electric signal appliance and device; manufacturing of mechanical and electricalequipment; sales of mechanical and electrical equipment; manufacturing of special labor protective supplies; sales ofspecial labor protective supplies; sales of electronic products; sales of digital cultural and creative technology equipment;
st 2021 to June 30
th2021
technical services, technical development, technical consultation, technical exchange, technical transfer and technicalpromotion; software development; information system integration services; computer system services; research anddevelopment of IoT technologies; IoT technology services; IoT application services; big data services; data processingand storage support services; security system monitoring services; security technology defense system design andconstruction services; electronic and mechanical equipment maintenance (excluding special equipment); parking lotservices; digital cultural and creative content application services; environmental protection monitoring; for-profit privatetraining institution engaged in science and technology training (excluding discipline and language cultural education andtraining for primary and secondary school students). For details about business scope of the Company and its subsidiaries,please refer to Note (VII) 1.
The Company’s and consolidated financial reports were approved for issuance by the 3
rd meeting of the 5
thsessionBoard of Directors of the Company on July 23
rd2021.
For consolidation scope of the financial statements of the current reporting period, please refer to Note (VII) “Interestin other entities”. For changes in consolidation scope of the financial statements during the current reporting period, pleaserefer to “changes in the consolidation scope” in Note (VI).
II. Basis of preparation of financial statementsBasis of preparation of financial statementsThe Company and its subsidiaries (hereinafter referred to as "the Group") have adopted the Accounting Standards forBusiness Enterprises ("ASBE") and relevant provisions issued by the Ministry of Finance ("MoF"). In addition, the Grouphas disclosed relevant financial information in accordance with Information Disclosure and Presentation Rules forCompanies Offering Securities to the Public No. 15－General Provisions on Financial Reporting (revised in 2014).
Going concernThe Group has evaluated its going concern for 12 months going forward starting from June 30
th2021, and there is nofactor that may cast significant doubt on the entity's ability to continue as a going concern. Therefore, the financialstatements have been prepared on a going concern basis.
Bookkeeping base and valuation principlesThe Group measures the accounting elements in accordance with the accrual accounting basis. Except certain financialinstruments are measured by fair value, these financial statements are prepared in accordance with the measurements basisof historical costs. If the asset decreases in value, the provision for impairment of assets should be made according torelevant regulations.
According to the historical cost measurement, the assets shall be measured as per the amount of cash or cash equivalentpaid at the time of purchase, or the fair value of consideration paid for the purchase of such assets. The liabilities shall bemeasured in accordance with the amount of funds or assets actually received when undertaking current obligations, or thecontract amount when undertaking the current obligations, or the amount of cash or cash equivalents required for payingback the debts in daily activities.
The fair value is a price received by the market participants from selling asset or transferring liability during orderlytransaction at the measurement date. No matter the fair value is observable or estimated by using valuation technique, themeasured and disclosed fair value in the financial statement shall be determined on this basis.
st
2021 to June 30
th2021
When measuring non-financial assets at fair value, the assets shall be measured considering the ability of marketparticipants to use the assets for optimal use to generate economic benefits, or to sell the assets to other market participantsto use the assets for optimal use to generate economic benefits.
For the financial assets measured with transaction price at the initial recognition, and the use of valuation techniquesinvolving unobservable inputs in the subsequent fair value measurement, the valuation technique is corrected in thevaluation process in order to make the initial recognition results confirmed by valuation techniques equal to the transactionprice.
Based on the observable extent of the input value of the fair value, and the importance of such input value to the fair valuemeasurement, the fair value measurement is divided into three levels:
? Level 1: The input value is the unadjusted offer of the same assets or liabilities on active market acquired on measurementdate;? Level 2: The input value is the input value of relevant assets or liabilities observable directly or indirectly in addition tolevel 1 input value;? Level 3: The input value is the non-observable input value of relevant assets or liabilities.
III. Significant accounting policies and accounting estimates
1. Statement for Compliance with Accounting Standards for Business Enterprises (ASBE)The financial statements of the Company have been prepared in accordance with ASBE, and present truly and completely,the Company's and consolidated financial position as of June 30
th2021; and the Company's and consolidated results ofoperations, the Company’s and consolidated changes in shareholders' equity, and the Company’s and consolidated cashflows for the first half of 2021.
2. Accounting Period
The Group has adopted the calendar year as its accounting year from January 1
st to December 31
st
each year.
3. Business Cycle
The business cycle refers to the period from purchase of assets used for processing to realization of cash or cash equivalents.The Group business cycle is usually 12 months.
4. Functional currency
Renminbi (“RMB”) is the currency in the primary economic environments in which the Company and its domesticsubsidiaries are operated. The Company and its domestic subsidiaries take RMB as their functional currency. Overseassubsidiaries of the Company determine their functional currency on the basis of the primary economic environment inwhich it operates. For functional currency of overseas subsidiaries of the Company, see Note (V) 59. The Group adoptsRMB to prepare its financial statements.
5. The accounting treatment of business combinations involving enterprises under common control and businesscombinations not involving enterprises under common control
Hikvision 2021 Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th
2021
Business combinations are classified into business combinations involving enterprises under common control and businesscombinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of thecombining enterprises are ultimately controlled by the same party or parties both before and after the combination, andthat control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entitiesat the date of the combination. The difference between the carrying amount of the net assets obtained and the carryingamount of the consideration paid for the combination is adjusted to the share premium in capital reserve. If the sharepremium is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combination in which all of thecombining enterprises are not ultimately controlled by the same party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurredor assumed, and equity securities issued by the acquirer in exchange for control of the acquiree. If a business combinationnot under the common control is realized step by step through multiple transactions, the cost of the combination is the sumof the consideration paid on the purchase date and the fair value of the equity of the purchasee already held before thepurchase date on the purchase date. The intermediary expenses incurred by the acquirer in respect of auditing, legalservices, valuation and consultancy services, etc. and other associated administrative expenses attributable to the businesscombination are recognized in profit or loss when they are incurred.
The acquiree’s identifiable assets, liabilities and contingent liabilities, acquired by the acquirer in a business combination,that meet the recognition criteria shall be measured at fair value at the acquisition date.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, thedifference is treated as an asset and recognized as goodwill, which is measured at cost on initial recognition. Where thecost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirerfirstly reassesses the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilitiesand measurement of the cost of combination. If after that reassessment, the cost of combination is still less than theacquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remaining differenceimmediately into profit or loss for the current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses, and is presentedseparately in the consolidated financial statements.
st
2021 to June 30
th
2021
6. Preparation method of consolidated financial statements
6.1 Preparation method of consolidated financial statements
The scope of consolidated financial statements shall be confirmed based on the control. Control right means that aninvestor may control an investee; the investor may participate in relevant activities of the investee to obtain variablerewards and also be able to use the control rights for the investee to influence its amount of returns. The Group will re-evaluate, if the change of the relevant facts and circumstances leading to the change of the relevant elements involved inthe above definition of control.
The merger of subsidiary starts from the Group obtaining the control power of the subsidiary, and terminates when theGroup loses the control power of the subsidiary.
As for subsidiaries disposed by the Group, operating results and cash flows prior to the disposal date (the date of losingcontrol right) have been properly included in the consolidated profit statement and consolidated cash flow statement.
For a subsidiary acquired through a business combination not involving enterprises under common control, the operatingresults and cash flows from the acquisition date (the date when control is obtained) are included in the consolidated incomestatement and consolidated statement of cash flows.
No matter when the business combination occurs in the reporting period, subsidiaries acquired through a businesscombination involving enterprises under common control are included in the Group's scope of consolidation as if they hadbeen included in the scope of consolidation from the date when they first came under the common control of the ultimatecontrolling party. Their operating results and cash flows from the beginning of the earliest reporting period are includedin the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on theuniform accounting policies and accounting periods set out by the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as minority interests and presented as"minority equity" in the consolidated balance sheet. The portion of net profits or losses of subsidiaries for the periodattributable to minority interests is presented as "minority interests" in the consolidated income statement below the "netprofit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders' portion of the opening balance of owners' equity of the subsidiary, the excess amount are still allocatedagainst minority interests.
st
2021 to June 30
th2021
Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the loss of control over thesubsidiary is accounted for as equity transactions. The carrying amounts of the total owners' equity attributable to ownerof the Company and minority equity are adjusted to reflect the changes in their relative interests in the subsidiary. Thedifference between the amount by which the minority interests are adjusted and the fair value of the consideration paid orreceived is adjusted to capital reserve under owners' equity. If the capital reserve is not sufficient to absorb the difference,the excess is adjusted against retained earnings.
In the case that the equity of the acquiree is obtained through multiple deals step by step to finally form the businesscombination not under the common control, the business combination shall be handled differently based on whether it is"package deal": where it is package deal, the Company accounts each deal as a deal to obtain the control. If the deal is nota "package deal", a deal where the control is obtained on the acquisition date will be subject to accounting. The acquiree'sequity held before the acquisition date will be remeasured based on the fair value of the equity on the acquisition date andthe difference between the fair value and book value will be included in the profit or loss in the current period. If theacquiree's equity held before the acquisition date involves any changes in the other comprehensive income or in any otherowner's equity accounted by the equity method, such equity changes will be converted into the profit or loss in the currentperiod on the acquisition date.
7. Joint arrangement classification and joint operation accounting
Joint arrangements include joint operation and joint ventures. Such classification is defined based on the rights andobligations of the joint parties in the joint arrangement, taking into account the structure and legal form of sucharrangement and also the contractual provisions. Joint operation refers to a joint arrangement where the joint venture isentitled to assets related to this arrangement and bear liabilities related to this arrangement. Joint ventures mean that jointventure parties are merely entitled to joint venture arrangements of net assets of such arrangements.
The Groups investment in any joint venture is accounted by the equity method. See the details in Note (III) "15.3.2 Long-term equity investment accounted under the equity method".
The Group confirms its assets held separately according to the arrangement of joint operation and those held jointly inproportion to the Group's share; confirms its liabilities held separately and those held jointly in proportion to the Group'sshare ; confirms its revenue from the sale of its share of the output arising from the joint operation; confirms its share ofthe revenue from the sale of the output by the joint operation; confirms the expenses incurred by the Group alone and theexpenses incurred by the joint operation corresponding to the share of the Group therein. The assets, liabilities, revenuesand expenses related to the joint operation are accounted and confirmed by the Group in accordance with the regulationsapplicable to specific assets, liabilities, revenues, and expenses.
8. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are the Group'sshort-term (Generally refers to due within three months from the purchase date), highly liquid investments that are readilyconvertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
9. Conversion of transactions and financial statements denominated in foreign currencies.
9.1 Transactions denominated in foreign currencies
st 2021 to June 30
th2021
A foreign currency transaction is recorded, on initial recognition, by applying an exchange rate that approximates theactual spot exchange rate on the date of transaction; The exchange rate that approximates the actual spot exchange rate onthe date of transaction is calculated according to the middle price of market exchange rate at the beginning of the monthin which the transaction happened.
At the balance sheet date, foreign currency monetary items are translated into [RMB] using the spot exchange rates at thebalance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at thebalance sheet date and those on initial recognition or at the previous balance sheet date are recognized in profit or loss forthe period, except for exchange differences related to a specific-purpose borrowing denominated in foreign currency thatqualify for capitalization are capitalized as part of the cost of the qualifying asset during the capitalization period.
When the consolidated financial statements include foreign operation(s), if there is foreign currency monetary itemconstituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates arerecognized as "exchange differences arising on conversion of financial statements denominated in foreign currencies " inother comprehensive income, and in profit and loss for the period upon disposal of the foreign operation.
Foreign currency non-monetary items measured at historical cost are converted to the amounts in functional currency atthe spot exchange rates on the dates of the transactions. Foreign currency non-monetary items measured at fair value arere-converted at the spot exchange rate on the date the fair value is determined. Difference between the re-convertedfunctional currency amount and the original functional currency amount is treated as changes in fair value (includingchanges of exchange rate) and is recognized in profit and loss or as other comprehensive income.
9.2 Conversion of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation areconverted from the foreign currency into RMB using the following method: assets and liabilities on the balance sheet aretranslated at the spot exchange rate prevailing at the balance sheet date; shareholders' equity items are converted at thespot exchange rates at the dates on which such items arose; all items in the income statement as well as items reflectingthe distribution of profits are translated at exchange rates that approximate the actual spot exchange rates on the dates ofthe transactions; The difference between the converted assets and the aggregate of liabilities and shareholders' equity itemsis recognized into other comprehensive income and shareholders’ equity.
The foreign currency cash flows and cash flows of overseas subsidiaries adopt the exchange rate similar to the spot rate atthe date of cash flows for conversion. The affected amount of cash and cash equivalents due to the change of exchangerate, as an adjustment item, shall be separately listed as "the impact of cash and cash equivalents due to the change ofexchange rate" in the cash flow statement.
The closing balances of the prior year and the actual amount of the prior year are presented at the converted amounts ofthe prior year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over a foreign operation due todisposal of certain interest in it or other reasons, the Group transfers the accumulated exchange differences arising on
st 2021 to June 30
th
2021
conversion of financial statements of this foreign operation attributable to the owners' equity of the Company and presentedunder shareholders' equity, to profit or loss in the period in which the disposal occurs.
In case of a disposal or other reason that does not result in the Group losing control over a foreign operation, but only adecrease in proportion of overseas business interests, the proportionate share of accumulated exchange differences arisingon conversion of financial statements are re-attributed to minority interests and are not recognized in profit and loss undercurrent period. For partial disposals of equity interests in foreign operations, which are associates or joint ventures, theproportionate shares of the accumulated exchange differences arising on conversion of financial statements of foreignoperations is reclassified to profit or loss under current period.
10. Financial Instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to a contract of financial instrument.
For the purchase or sale of a financial asset in conventional manner, the asset to be received and the liability to be assumedwill be recognized on the trading day, or the asset sold will be derecognized on the trading day.
Financial assets and financial liabilities are measured by fair value upon initial recognition. For financial assets andfinancial liabilities at fair value through profit and loss, the relevant trading costs will be directly charged to profit and lossof the current period. For other types of financial assets and financial liabilities, the relevant trading costs will be bookedinto the initial recognition amount. Upon initial recognition of accounts receivable which have no material financingcomponents or have not taken into consideration the financing components in contracts with a term not exceeding oneyear according to Accounting Standards for Business Enterprise No. 14 – Revenue (“Revenue Standard”), such initialamount is measured by the transaction price as defined under the Revenue Standard.
Effective interest rate method refers to the method of calculating the amortized cost of financial asset or financial liabilityand apportioning interest income or interest expenses to each accounting period.
Effective interest rate refers to the interest rate used for discounting the estimated future cash flows of a financial asset ora financial liability for an expected subsisting period into the balance of book value of the financial asset or the amortizedcost of the financial liability. When determining the effective interest rate, the expected cash flows are estimated on thebasis of considering all contractual terms of the financial asset or financial liability (such as early repayment, extendedterm, call option or other similar option) but without considering the expected credit loss.
The amortized cost of a financial asset or a financial liability refers to the initial recognition amount of such financial assetor financial liability, less the repaid amount of principal, plus or minus the accrued amortized amount calculated byamortization of the difference between the initial recognition amount and the amount on maturity by using the effectiveinterest rate method, and then deducts the accrued provision for losses (only applicable to financial assets).
10.1 Classification, Confirmation and Measurement of Financial Assets
After initial recognition, the Group will adopt amortized cost, fair value through other comprehensive income, or fair valuethrough profit and loss for subsequent measurement depending on different categories of financial assets.
st
2021 to June 30
th
2021
The Group will classify a financial asset into a financial asset measured at amortized cost if the contractual terms of thefinancial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding and the financial asset is held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows. Financial assets classified by the Group as financial asset measured by amortizedcost include cash and cash equivalents, notes receivables and accounts receivable, other receivables (except for tax refundreceivable) and long-term receivables.
The Group will classify a financial asset into a financial asset measured by fair value through other comprehensive incomeif the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principaland interest on the principal amount outstanding, and the financial asset is held within a business model whose objectiveis achieved by both collecting contractual cash flows and selling the financial assets. This category of financial assetsmainly includes financial assets with a maturity of more than one year from the date of acquisition and which are presentedunder other debt investments, financial assets maturing within one year (inclusive) from the balance sheet date and whichare presented under non-current assets maturing within one year, as well as the accounts receivable and notes receivableclassified as fair value at the time of acquisition and their changes are included in other comprehensive income are listedin the receivables for financing, and for those have acquisition period within one year (including one year) are listed inother current assets.
At the time of initial recognition, the Group may, on the basis of a single financial asset, irrevocably designate aninvestment in an equity instrument held for non-trading purpose recognized or without consideration in a business mergernot under common control as a financial asset at fair value through other comprehensive income. This type of financialassets is presented as investment in other equity instruments.
Financial assets which have satisfied one of the following conditions indicate that such financial assets are held for tradingpurpose by the Group:
? The purpose of acquiring the relevant financial asset is mainly for sale in recent period.? At the time of initial recognition, the relevant financial asset is a part of an identifiable portfolio of financialinstruments under collective management, and there is objective evidence showing a recent and actual existence of short-term profitable mode.
? The relevant financial assets are derivatives, excluding derivatives which satisfy the definition under financialguarantee contracts and derivatives which are designated as effective hedging instruments.
Financial assets at fair value through profit and loss include financial assets which are classified as financial assets at fairvalue through profit and loss and financial assets designated at fair value through profit and loss:
? Financial assets which do not satisfy the conditions of being classified as financial assets measured at amortized costor as financial assets at fair value through other comprehensive income, they will be classified as financial assets at fairvalue through profit and loss.
? At the time of initial recognition, in order to eliminate or substantially reduce mismatch in accounting, the Groupmay irrevocably designate a financial asset as a financial asset measured at fair value with changes through profit and loss.
Financial assets at fair value through profit and loss will be presented as held-for-trading financial assets. If such financialassets have a maturity of more than one year from the balance sheet date (or without a fixed maturity) and which areexpected to be held for more than one year, they will be presented under other non-current financial assets.
st 2021 to June 30
th
2021
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost adopt the effective interest rate method for subsequent measurement accordingto amortized cost, the profit or loss when impairment occurs or upon derecognition will be accounted in profit and loss ofthe current period.
The Group recognizes interest income by using effective interest rate method for financial assets measured at amortizedcost. The Group determines interest income by multiplying the balance of book value of financial assets with the effectiveinterest rate except under the following circumstances:
? For acquired or generated financial assets which incurred credit impairment already, their interest income will bedetermined by using the amortized cost of such financial asset calculated with the credit adjusted effective interest rate.
? For acquired or generated financial assets which have not incurred credit impairment but incur credit impairment inthe subsequent period, the Group will determine their interest income by using the amortized cost of such financial assetsmultiplied with the effective interest rate in the subsequent period. If such financial asset ceases to have credit impairmentdue to improvement in credit risk in the subsequent period, then the Group should change to multiply the effective interestrate with the balance of book value of such financial asset instead to determine the interest income.
10.1.2 Financial asset at fair value through other comprehensive income
The impairment loss or profit, or interest income calculated by using the effective interest rate method, relating to financialasset at fair value through other comprehensive income should be accounted in the profit and loss of the current period,and other changes in fair value of such financial assets will be accounted in other comprehensive income. The amountcharged by such financial asset to the profit and loss of each period is deemed to be equal to the amount which has beenmeasured by amortized cost and charged to the profit and loss of each period. Upon derecognition of such financial asset,the accumulated profit or loss previously charged to other comprehensive income will be reversed from othercomprehensive income and charged to profit and loss of the current period.
For non-trading equity instrument investment designated at fair value through other comprehensive income, its changesin fair value will be recognized in other comprehensive income. Upon derecognition of such financial asset, theaccumulated profit or loss charged to other comprehensive income will be reversed from other comprehensive income andcharged to retained earnings. During the period when such investment in equity instruments for non-trading purpose areheld by the Group, the right to receive dividends by the Group has been established, and economic benefits related todividends are likely to flow into the Group, and if the amount of dividends may be measured reliably, the dividend incomeis recognized and accounted in the profit and loss of the current period.
10.1.3 Financial asset at fair value through profit and loss
For financial asset at fair value through profit and loss, subsequent measurement will be calculated at fair value, the profitor loss arising from changes in fair value and the dividend and interest income relating to such financial asset will beaccounted in the profit and loss of the current period.
10.2 Impairment of Financial Assets
For financial assets measured at amortized cost, financial assets that are classified as financial asset at fair value throughother comprehensive income, contract assets, lease receivables, and financial guarantee contracts that do not meet the
st 2021 to June 30
th2021
conditions for termination of recognition due to the transfer of financial assets or continue to be involved in financialliabilities formed by the transferred financial assets, the Group will handle impairment on the basis of expected credit lossand recognize loss provision.
The Group’s consideration of contract assets, notes receivable and accounts receivable that are generated by transactionsregulated by revenue standards and do not contain significant financing components or that do not consider financingcomponents in contracts that are not more than one year old, as well as those operating lease receivables formed fromtransactions that are defined by the Accounting Standards for Business Enterprises No. 21-Leasing, the loss reserve shallbe measured based on the amount of the expected credit loss during the entire duration.
For other financial instruments, other than acquired or generated financial assets which have incurred credit impairmentalready, the Group will assess on each balance sheet date the changes in credit risk of the relevant financial instrumentssince initial recognition. If the credit risk of such financial asset has significantly increased after initial recognition, theGroup will calculate its loss provision based on the amount equivalent to the expected credit loss for the entire subsistingperiod. If the credit risk of such financial asset since initial recognition has not increased significantly, the Group willcalculate its loss provision according to the expected credit loss amount of such financial asset for the next 12 months.The amount of increase or reversal in the provision for credit loss, apart from financial assets classified as financial assetat fair value through other comprehensive income, is accounted in the profit and loss of the current period. For financialasset classified as measured at fair value through other comprehensive income, the Group will recognize its credit lossprovision in other comprehensive income and charged the impairment loss or gain to the profit and loss of the currentperiod, and will not decrease the book value of such financial asset presented in the balance sheet.
The Group has calculated the loss provision equivalent to the expected credit loss amount for the entire subsisting periodof the financial instrument in the preceding accounting period, but at the balance sheet date of the current period, suchfinancial instrument is no longer under the condition of significant increase in credit risk since initial recognition, theGroup calculates the loss provision for such financial instrument on the balance sheet date of the current period accordingto an amount equivalent to the expected credit loss for the next 12 months, and the resulting loss provision reversal amountwill be counted as impairment gain and booked into the profit and loss of the current period.
10.2.1 Significant increase in credit risk
The Group uses available and reasonable forward-looking information with justification, by comparing the default risk ofthe financial instrument at the balance sheet date with the default risk on the initial recognition date, to confirm whetherthe credit risk of the financial instrument has significantly increased after initial recognition. When using the financialinstrument impairment rules for loan commitment and financial guarantee contracts, the date when the Group becomes aparty of an irrevocable commitment is deemed as the initial recognition date.
The Group considers the following factors when assessing whether the credit risk has significantly increased:
(1) Whether a significant change has been caused to the internal price indicator due to changes in credit risk.
(2) Whether the external credit rating of financial instrument has actual or expected significant changes.
(3) Whether the actual or expected internal credit rating of the debtor has been downgraded.
(4) Whether adverse changes have occurred in the business, finance or economic conditions which are expected to causesignificant changes in the capability of the debtor to perform debt repayment obligations.
(5) Whether actual or expected significant changes have occurred in the operating results of the debtor.
(6) Whether significant adverse changes have occurred in the supervision, economic or technical environment in whichthe debtor operates.
(7) Whether significant changes have occurred in the value of security pledged for the debt or the quality of guarantee
st
2021 to June 30
th2021
or credit enhancement provided by third parties. Such changes are expected to reduce the debtor’s economicmotivation of repayment according to contractual term or influence the probability of default.
(8) Whether significant changes have occurred in the economic motivation which will lower the expectation ofrepayment by the borrower according to the contractual term.
(9) Whether significant changes have occurred in the expected performance and repayment behavior of the debtor.
Whether or not the credit risks increase significantly after the foregoing assessments, if any contractual payment for anyfinancial instrument that overdue for over (including) 30 days, it indicates the credit risks of that financial instrument haveincreased significantly.
On the balance sheet date, if the Group determines that the financial instrument only carries low credit risks, then it assumesthat the credit risks of the financial instrument have not increased significantly since the initial recognition. If the risk ofdefault on financial instruments is low, the borrower is highly able to perform its contractual cash flow obligations in theshort term, and even if the economic situation and operating environment are adversely changed over a long period of timebut not necessarily reducing the borrower’s performance of its contractual cash obligations, the financial instrument isconsidered as having a lower credit risk.
10.2.2 Financial assets which have incurred credit impairment already
When one or more events which will have adverse effect on the expected future cash flows from the financial asset of theGroup have occurred, such financial asset will become a financial asset which have incurred credit impairment already.The evidence of credit impairment occurred in a financial asset includes the following observable information:
(1) Material financial difficulties have occurred in the issuer or debtor;
(2) Breach of contract by the debtor, such as default or overdue for the payment of interest or repayment of principal;
(3) Due to economic or contractual considerations relating to financial difficulties of the debtor, the creditor has grantedconcession to the debtor under no other circumstances;
(4) The debtor is likely to go bankrupt or carry out other financial restructuring;
(5) The financial difficulties of the issuer or debtor have caused the disappearance of the active market for the financialasset;
(6) The purchase or generation of a financial asset at a large discount, such discount reflects the fact of occurrence of creditloss.
10.2.3 Confirmation of expected credit loss
The Group’s accounts receivable, other receivables (except for tax refund receivables), contract assets, lease receivablesand long-term receivables, that are individually significant and the debtor has serious financial difficulties, are determinedon the basis of individual for its credit loss. For the remaining accounts receivable, other receivables (except for tax refundreceivables), contract assets, lease receivables and long-term receivables, an impairment matrix is used to determine thecredit losses of relevant financial instruments on a portfolio basis.The Group determines credit losses by assessing theprobability of breach and loss given default based on the credit ratings on a portfolio basis of notes receivable andreceivables. On the basis of common risk characteristics, the Group places financial instruments in different groups. Thecommon credit risk characteristics adopted by the Group include: financial instrument type, credit risk rating, initialrecognition date, remaining contract period, industry of debtor, geographic location of debtor, and etc.
The Group confirms the expected credit loss of the relevant financial instrument according to the following method:
? In respect of a financial asset, the credit loss is the present value of the difference between the contractual cash
st 2021 to June 30
th
2021
flow that the group should receive and the cash flow that it expects to receive.? In respect of lease receivables, the credit loss is the present value of the difference between the contractual cashflow that the group should receive and the cash flow that it expects to receive.? In respect of a financial guarantee contract (for specific accounting policies, please refer to Note (III), 10.4.1.2.1),the credit loss is the present value of the difference between Group’s expected payment amount for thecompensation made to the contract holder due to the occurrence of credit loss and the amount expected to bereceived by the Group from such contract holder, debtor or any other parties.? In respect of financial assets with credit impairment on the balance sheet date but they are not acquired orgenerated financial assets with credit impairment, the credit loss represents the difference between the balanceof the book value of such financial asset and the present value of the estimated future cash flows discounted bythe original effective interest rate.
The factors reflected by the method used for calculating expected credit loss of financial instruments by the Group include:
an unbiased weighted average amount determined by assessing a series of probable outcomes; time value of currency;reasonable and justifiable information relating to past events, prevailing conditions and forecast of future economicconditions obtained on the balance sheet date without incurring unnecessary additional cost or effort.
10.2.4 Write-off on financial asset
When the Group ceases to have reasonable expectation on the possible collection of all or part of the contractual cashflows from the financial asset, the balance of book value of such financial asset will be written off directly. Such a write-off constitutes a de-recognition of the relevant financial asset.
10.3 Transfer of financial asset
A financial asset that fulfills one of the following conditions will be de-recognized: (1) termination of contractual rightsto receive cash flows from the financial asset; (2) upon transfer of such financial asset and transfer of substantially all therisks and rewards in respect of the ownership of such financial asset to the transferee; (3) upon transfer of such financialasset, though the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownershipof such financial asset, yet it has not retained the control over such financial asset.
If the Group has not transferred nor retained substantially all the risks and rewards in respect of the ownership of suchfinancial asset, and has retained the control over such financial asset, then such transferred financial asset will continue tobe recognized, and the relevant liabilities will continue to be recognized, according to the level of the Group’s continuousinvolvement in such transferred financial asset. The relevant liabilities will be measured by the Group according to thefollowing method:
? If the transferred financial asset is measured by amortized cost, the book value of the relevant liabilities is equivalentto the book value of the transferred asset of continuous involvement less the amortized cost of the rights retained by theGroup (if the Group has retained the relevant rights due to transfer of the financial asset) and plus the amortized cost ofthe obligations undertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of thefinancial asset), and the relevant liabilities are not designated as financial liabilities at fair value through profit and loss ofthe current period.
? If the transferred financial asset is measured by fair value, the book value of the relevant liabilities is equivalent tothe book value of the transferred asset of continuous involvement less the fair value of the rights retained by the Group (ifthe Group has retained the relevant rights due to transfer of the financial asset) and plus the fair value of the obligationsundertaken by the Group (if the Group has undertaken the relevant obligations due to transfer of the financial asset), andthe fair value of the rights and obligations shall be measured at the fair value on a separate basis.
st 2021 to June 30
th
2021
For full transfer, which satisfies the conditions of derecognition, of the financial assets, the difference between the sum ofthe book value of the transferred financial assets as at the date of derecognition and the consideration received from suchtransfer and the accumulated amount of change in fair value originally included in other comprehensive income, whichcorresponds to the amount in respect of derecognition, shall be recognized in the profit and loss for the current period. Ifthe transfer of the financial assets by the Group is designated as investment in equity instrument held for non-tradingpurpose measured at fair value through other comprehensive income, the accumulated gains or losses previously includedin other comprehensive income shall be transferred out from other comprehensive income and be included in retainedearnings.
For transfer in part, which satisfies the conditions of derecognition, of the financial assets, the book value of the entirefinancial assets before the transfer shall be shared between the derecognized portion and the continuous recognition portionat their respective relative fair value on the date of transfer, and the difference between the sum of the considerationreceived from derecognition and the accumulated amount of change in fair value originally included in othercomprehensive income, which corresponds to the amount in respect of derecognition, and the book value of thederecognized portion as at the date of derecognition shall be included in the profit and loss of the current period. If thetransfer of the financial assets by the Group is designated as investment in equity instrument for non-trading purposemeasured at fair value through other comprehensive income, the accumulated gains or losses previously included in othercomprehensive income shall be transferred out from other comprehensive income and be included in retained earnings.
For full transfer, which does not satisfy the conditions of derecognition, of the financial assets, the Group will continue torecognize the entire financial assets transferred and the consideration received as a result of the asset transfer is recognizedas a liability when received.
10.4 Classification, confirmation and measurement of financial liabilities and equity instruments
Pursuant to the contractual terms of the issued financial instruments and the substantive economic condition as reflected,but not in legal terms only, combined with the definitions of financial liabilities and equity instruments, the Group hasclassified such financial instruments or the components thereof as financial liabilities or equity instruments upon initialrecognition.
10.4.1 Classification, confirmation and measurement of financial liabilities
Financial liabilities are classified into financial liabilities at fair value through profit and loss of the current period andother financial liabilities upon initial recognition.
10.4.1.1 Financial liabilities at fair value through profit and loss of the current period
Financial liabilities at fair value through profit and loss of the current period comprise of financial liabilities held fortrading purpose (including derivatives of financial liabilities) and financial liabilities designated as measured at fair valuethrough profit and loss of the current period. Except for derivatives of financial liabilities, which are presented separately,financial liabilities at fair value through profit and loss of the current period are presented as financial liabilities held fortrading.
Financial liabilities that fulfill one of the following conditions suggest that the Group assumes such financial liabilities fortrading purpose:
? Assumption of the relevant financial liabilities is mainly for the purpose of the recent repurchases.
st
2021 to June 30
th2021
? The relevant financial liabilities, upon initial recognition, are part of a portfolio of identifiable financial instrumentsunder centralized management, and available objective evidence shows the recent and actual existence of a short-term profit-making model.? The relevant financial liabilities are derivatives, except derivatives which satisfy the definition of financial guaranteecontract and derivatives designated as effective hedging instruments.
Financial liabilities can be designated, upon initial recognition, by the Group as financial liabilities at fair value throughprofit and loss of the current period, provided that they have satisfied one of the following conditions: (1) such designationcan eliminate or substantially reduce accounting mismatches; (2) managing and evaluating the performance of portfoliosof financial liabilities, or portfolios of financial assets and financial liabilities, on fair value basis and reporting internallyto key personnel of the Group on this basis in accordance with the risk management or investment strategies specified informal written documents of the Group; (3) hybrid contracts, with embedded derivatives, have satisfied the conditions.
Financial liabilities held for trading purpose use fair value for subsequent measurement, gains or losses arise from changesin fair value and the dividends or interest expenses relating to such financial liabilities are accounted in the profit and lossof the current period.
For financial liabilities designated at fair value through profit and loss of the current period, changes in fair value of suchfinancial liabilities caused by changes in the Group’s own credit risks shall be included in other comprehensive income,and other changes in fair value shall be included in the profit and loss of the current period. On derecognition of suchfinancial liabilities, the accumulated amount of changes in fair value as a result of changes in our own credit risk includedpreviously in other comprehensive income shall be transferred to retained earnings. Dividends or interest expenses relatingto such financial liabilities shall be included in the profit and loss of the current period. If handling the effect of changesin credit risk of such financial liabilities according to the aforesaid method would cause or magnify the accountingmismatches in profit and loss, the Group will include all gains or losses of those financial liabilities (including the amountaffected by changes in their own credit risk) in the profit and losses of the current period.
10.4.1.2 Other financial liabilities
Excluding transfer of financial assets not complying with derecognition conditions, or financial liabilities as a result ofcontinuous involvement in transferred financial assets, as well as the financial guarantee contracts, the other financialliabilities will be classified as financial liabilities measured at amortized cost, subsequent measurement will be based onamortized cost, gains or losses on derecognition or amortization will be accounted in the profit and loss of the currentperiod.
If the Group and the counterparty have revised or renegotiated the contract, this has not resulted in the derecognition offinancial liabilities measured at amortized cost for subsequent measurement, but has caused changes in the contractualcash flows, then the Group should recalculate the book value of such financial liabilities, and the relevant gains or lossesshall be accounted in the profit and loss of the current period. The recalculated book value of such financial liabilities willbe determined by the Group by discounting the cash flows from the renegotiated or revised contract with the original effectinterest rate of the financial liabilities. All costs or expenses incurred in the revision or renegotiation of the contract willbe reflected in the adjusted book value of financial liabilities after such revision, and will be amortized during theremaining period of the revised financial liabilities.
10.4.1.2.1 Financial guarantee contract
Financial guarantee contract refers to a contract that requests the issuer to provide a specific amount of compensation tothe contract holder who suffers losses when a specific debtor fails to repay the debt on due date according to the initial orrevised terms of the debt instrument. In respect of financial liabilities which are not designated at fair value through profit
st 2021 to June 30
th2021
and loss of the current period, or in respect of financial guarantee contract for financial liabilities arising from transfer offinancial assets not complying with derecognition conditions or continuous involvement in the transferred financial assets,the measurement after initial recognition will be based on the amount of provision for losses, or the balance of initialrecognized amount after deducting the accumulated amortized amount confirmed in accordance with the relevantprovisions of the Revenue Standard, whichever the higher.
10.4.2 Derecognition of financial liabilities
When the existing obligations of a financial liability have been wholly or partially discharged, such financial liability orsuch part of it will be derecognized. When the Group (as borrower) and the lender enter into an agreement to undertakenew financial liabilities for replacing the original financial liabilities, if substantive difference exists in the contractualterms between the new financial liabilities and the original financial liabilities, the Group should derecognize the originalfinancial liabilities while at the same time recognizes the new financial liabilities.
When a financial liability is wholly or partially derecognized, the difference between the book value of the derecognizedportion and the consideration paid (including non-cash asset transferred out or new financial liabilities undertaken) willbe accounted in the profit and loss of the current period.
10.4.3 Equity instrument
Equity instrument refers to a contract which can prove the ownership of remainder interest in assets after deducting allliabilities of the Group. The Group issues (including refinances), repurchases, sells or cancels equity instruments fortreatment of changes in equity. The Group will not recognize changes in the fair value of equity instruments. Tradingexpenses relating to equity transactions will be deducted from equity.
The Group’s distribution to holder of equity instrument is treated as profit distribution, the share dividends paid out willnot affect the total equity of shareholders.
10.5 Derivatives and embedded derivatives
Derivatives include foreign exchange forward contract and foreign exchange option contract, etc. Derivatives are measuredat fair value initially on the date of signing the relevant contract and will be measured at fair value for subsequentmeasurement.
For a hybrid contract constituted by an embedded derivative and a master contract, if the master contract is in respect of afinancial asset, the Group will not split the embedded derivative from the hybrid contract, but will consider such hybridcontract as a whole unit to which the accounting standards and rules for classification of financial assets are applicable.
If the master contract included in the hybrid contract is not in respect of a financial asset, and fulfills the followingconditions at the same time, the Group will split the embedded derivative from the hybrid contract to be treated as aseparate subsisting derivative.
(1) The economic characteristics and risks of the embedded derivative are not closely connected to the economic
characteristics and risks of the master contract.
(2) A separate instrument containing the same terms as the embedded derivative fits the definition of a derivative.
(3) The hybrid contract is not measured at fair value and changes in fair value are accounted through profit and loss of
the current period.
st
2021 to June 30
th2021
If an embedded derivative is split from the hybrid contract, the accounting treatment adopted by the Group for the mastercontract within the hybrid contract will be in accordance with the applicable accounting standards and rules. If the Groupis unable to measure the fair value of the embedded derivative reliably according to the terms and conditions of theembedded derivative, the fair value of such embedded derivative will be determined by the difference between the fairvalue of the hybrid contract and the fair value of the master contract. After adoption of the above method, if the fair valueof such embedded derivative is still unable to be measured separately on the acquisition date or subsequent balance sheetdate, the Group will designate the entire hybrid contract as a financial instrument measured at fair value through profit andloss of the current period.
10.6 Offsetting between financial assets and financial liabilities
When the Group has legal right to offset the recognized financial assets and financial liabilities, and such legal right isenforceable currently, while at the same time the Group plans to perform netting settlement, or to liquidate the financialasset and repay the financial liability at the same time, the amount after offsetting between the financial asset and financialliability will be presented in the balance sheet. Save as said above, the financial asset and financial liability are presentedseparately in the balance sheet without offsetting each other.
11. Receivables for financing
Among the notes receivable measured at fair value through other comprehensive income, the ones with a term of less than(including) one year since they are acquired will be listed as receivables for financing; the ones with a term of more than(including) one year since they are acquired will be listed as other debt investment. The relevant accounting policy isexplained in Note (III), 10.1, 10.2 and 10.3.
12. Inventories
12.1 Categories of inventories
The Group's inventory mainly includes finished products, products in process and raw materials held in daily activities.Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and otherexpenditures incurred in bringing the inventories to their present location and condition.
12.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average method.
12.3 Basis for determining net realizable value of inventories
The inventory is measured according to cost and net realizable value, whichever is lower, on the date of balance sheet.When the net realizable value is lower than cost, withdraw inventory impairment reserves.
The net realizable value refers to the amount derived by deducting the potential cost, estimated selling expense and relativetaxes to the completion date from the estimated sales price of inventory in daily activities. When determining net realizablevalue of inventories, take the obtained conclusive evidence as basis and consider the purposes of holding inventories andinfluence of events after the balance sheet date.
st 2021 to June 30
th2021
For the low-price stocks in large quantity, provision for the inventory price drops will be made based on the categories ofstocks; for the stocks that are related to the products manufactured and sold in the same region, that have identical orsimilar ultimate use or purpose and that are hard to separate from other items when being measured, they are consolidatedfor provision for the inventory price drops; for other stocks, the provision for the inventory price drops will be made basedon the cost of a single stock item in excess of the net realizable value.
After provision for inventory depreciation reserves is made, if the factors resulting in the write-down of inventoryimpairment have disappeared and causing the net realizable value higher than its book value, such inventory impairmentprovision are recovered and reversed, and the reversed amount recorded in profits and losses of the current period.
12.4 Inventory count system
The perpetual inventory system is maintained for stock system.
12.5 Amortization method for low cost and short-lived consumable items and packaging materials
Packaging materials and low cost and short-lived consumable items are amortized using the immediate write-off method.
13. Contract Assets
13.1 Method and standard for determination of contract assets
Contract assets refer to the Group’s right to consideration in exchange for goods or services that the Group has transferredto a customer when that right is conditioned on something other than the passage of time. The Group’s unconditional (i.e.,depending on the passage of time only) right to receive consideration from the customer is separately presented asreceivables.
13.2 Methods for determining and accounting of expected credit loss of contract assets
For details of methods for determining and accounting of expected credit loss of contract assets, please refer to Note (III)-
10.2 Impairment of financial instruments.
14. Assets held for sale
Non-current assets and disposal groups are classified as held for sale category when the Group recovers the book valuethrough a sale (including an exchange of non-monetary assets that has commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held for sale are required to satisfy the following conditions at the sametime: (1) the asset or disposal group is available for immediate sale in its present condition subject to terms that are usualand customary for sales of such asset or disposal group; (2) the sale is highly probable, i.e. the Group has made a resolutionabout a selling plan and obtained a confirmed purchase commitment and the sale is expected to be completed within oneyear.
Hikvision 2021 Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th
2021
Non-current assets or disposal groups classified as held for sale are measured at the lower of the book value and the netamount of the fair value less the cost of disposal. Where the carrying amount is higher than the net amount of fair valueless the cost of disposal, the carrying amount should be reduced to the net amount of fair value less the cost of disposal,and such reduction is recognized as impairment loss of assets and included in profit or loss for the period. In the meantime,provision for impairment of held-for-sale assets is made. When there is an increase in the net amount of fair value of non-current assets held for sale less the cost of disposal at the subsequent balance sheet date, the original deduction should bereversed from impairment loss of assets recognized after the classification as held for sale, and the reversed amount isincluded in profit or loss for the period. The impairment loss of assets recognized before the classification as held for saleis not reversed.
Non-current assets or non-current assets within disposal groups classified as held for sale are not depreciated or amortized,and the interests and other costs of liabilities of disposal group classified as held for sale continue to be recognized.
All or part of equity investments in an associate or joint venture are classified as held-for-sale assets. For the part that isclassified as held for sale, it is no longer accounted through equity method since the date of the classification.
15. Long-term Equity Investment
15.1 Basis for determining joint control and significant influence over investee
Control is the power to govern an entity through participating in relevant activities of the investee; the investor is able toobtain variable benefits from its activities, and at same time, to use the control rights on the investee to influence theamount of returns. Joint control means that joint control for certain arrangement in accordance with relevant agreements;activities relevant to the arrangement cannot be decided until obtaining the unanimous consent of parties sharing controlright. Significant influence is the power to participate in the financial and operating policy decisions of the investee but isnot control or joint control over those policies. When determining whether an investing enterprise is able to exercisecontrol or significant influence over an investee, the effect of potential voting rights of the investee, such as currentconvertible debts, current executable warrants, etc., held by the investing enterprises or other parties shall be considered.
15.2 Determination of initial investment cost
For a long-term equity, investment acquired through a business combination involving enterprises under common control,the shares of merged party's book value of owners' equity in the final controlling party consolidated financial statementsobtained on the merger date shall be considered as the initial investment cost of long-term equity investment. Thedifferences between the initial investment cost of long-term equity investment and the paid cash, the transferred non-cashassets and the book value of the assumed debts are adjusted against the capital surplus; if the capital surplus is not sufficientto be offset, the remaining balance is adjusted against retained earnings. In the case of issued equity securities treated asconsolidation consideration, share of book value of owner's equity of merged party in the final controlling partyconsolidated financial statements is regarded as initial investment cost of long-term equity investments on the date ofconsolidation; capital reserve shall be adjusted in accordance with taking total nominal value of issued share as capitalshare, the difference between the initial investment cost of long-term equity investments and total book value of issuedshares; In case the capital reserve is not enough for writing down, the retained earnings shall be adjusted.
For a long-term equity investment acquired through business combination not involving enterprises under common control,and the merging cost confirmed on the purchased date are regarded as the initial investment cost.
st 2021 to June 30
th
2021
The intermediate expenses made by the combining party or purchaser for audit, legal service, assessment and othermanagement related expenses during the business merger should be included into the current profit and loss as it happens.
Long-term equity investment obtained by other means other than long-term equity investment formed by businesscombination shall be initially measured at cost.
15.3 Subsequent measurement and recognition of profit or loss
15.3.1 Long-term equity investment accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in the Company's financialstatements. A subsidiary is an investee that is controlled by the Group.
The long-term equity investment accounted by the cost method shall be measured at its initial investment cost. If there areadditional investments or disinvestments, the long-term equity investment cost shall be adjusted. Income from theinvestment in the current period shall be recognized in accordance with the cash dividends or profits declared and issuedby the investee.
15.3.2 Long-term equity investment accounted for using the equity method
Except for investments in associates and joint ventures that are wholly or partly classified as holding assets for sale, theGroup accounts for investment in associates and joint ventures using the equity method. An associate is an entity overwhich the Group has significant influence and a joint venture is an entity over which the Group can only exercise jointcontrol along with other investors on the investee’s net assets.
Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Group’s share ofthe fair value of the investee’s identifiable net assets at the time of acquisition, no adjustment is made to the initialinvestment cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’sidentifiable net assets at the time of acquisition, the difference is recognized in profit or loss for the period, and the cost ofthe long-term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss and other comprehensive income of theinvestee for the period as investment income or loss and comprehensive income for the period, meanwhile, the book valueof the long-term equity investment shall be adjusted; The Group shall accordingly reduce the book value of the long-termequity investment in terms of the part that shall be enjoyed according to the profit or cash dividends declared by theinvested unit to be distributed; For other changes in the owners' equity of the invested unit other than net profits and losses,other comprehensive incomes and the profit distribution, the book value of long-term equity investment shall be adjustedand be included into the capital reserves. The Group shall, on the ground of the fair value of all identifiable assets of theinvested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the investedentity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by theinvested unit are different from those adopted by the Group, the adjustment shall be made for the financial statements ofthe invested unit in accordance with the accounting policies and accounting periods of the Group to recognize the
st 2021 to June 30
th2021
investment income and other comprehensive incomes. For the transaction incurred between the group and associatedenterprises and joint ventures, invested or sold assets don't constitute a business, the part that doesn't achieve internaltransaction profit or loss or belongs to the Group calculated according to the enjoyed ratio will be offset, and the profit orloss on investment will be confirmed on this basis. But for the unrealized loss arising from the internal transaction betweenthe Group and the invested unit, if such transaction loss is defined as the impairment loss of the transferred asset, theycannot be offset.
When the Group determines the net loss of the invested unit that shall be shared, it is necessary to write-down the bookvalue of the long-term equity investment and other long-term equities substantially constituting the net investment of theinvested unit to zero as a limit. Besides, if the Group is obliged to bear extra loss for the invested unit, it shall be necessaryto determine provisions and record them to current investment loss in compliance with obligations expected to be assumed.If the invested unit realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsetsits attributable share of the un-confirmed losses, resume recognizing its attributable share of profits.
15.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually received and the carryingamount is recognized in profit or loss for the period.
16. Fixed Assets
16.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others,or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognized onlywhen it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can bemeasured reliably. Fixed assets are initially measured at cost.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and if it is probable thateconomic benefits associated with the asset will flow to the Group and the subsequent expenditures can be measuredreliably. Meanwhile the carrying amount of the replaced part is derecognized. Other subsequent expenditures arerecognized in profit or loss in the period in which they are incurred.
16.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month subsequent to the one inwhich it is ready for intended use. The useful life, estimated net residual value rate and annual depreciation rate of eachcategory of fixed assets are as follows:
| Class | Depreciation period (years) | Residual value rate (%) | Annual depreciation rate (%) |
| Buildings and Constructions | 20 years | 10 | 4.5 |
| General-purpose equipment | 3-5 years | 10 | 18.0-30.0 |
st 2021 to June 30
th2021
| Special-purpose equipment | 3-5 years | 10 | 18.0-30.0 |
| Means of transportation | 5 years | 10 | 18.0 |
st 2021 to June 30
th2021
19.1 Intangible Assets Valuation Method and Service Life
Intangible assets include land use right, intellectual property (IP), application software, and franchise, etc.
An intangible asset is measured initially at cost. When an intangible asset with a finite useful life is available for use, itsoriginal cost is amortized over its estimated useful life using the straight-line method. The useful life and predicted netresidual value of various intangible assets are shown as follows:
| Class | Service life (year) | Salvage value rate (%) |
| Land use right | 40 or 50 years | - |
| IP Right | 10 Years | - |
| Application Software | 5-10 years | - |
| Franchise | Franchised operating period | - |
st 2021 to June 30
th2021
If the expenditures cannot be distinguished between the research phase and development phase, the Group recognizes allof them in profit or loss for the period. The costs of the intangible assets generated by internal development activities onlyinclude the total expenditure incurred from the time point when the capitalization conditions are available to the pointwhen the intangible assets are used for their intended purposes; for the expenditure that already becomes an expenditurein the profit and loss statement before the capitalization conditions are available during development of the same intangibleasset, no adjustment will be made.
20. Long-term Assets Impairment
The Group assesses at each balance sheet date whether there is any indication that the long-term equity investment, fixedassets, construction in process, right-of-use assets and intangible assets with a finite useful life may be impaired. If thereis any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Intangible assetswith indefinite useful life and intangible assets not yet available for use are tested for impairment annually, irrespective ofwhether there is any indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverable amount of anindividual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverableamount is determined by the higher of 1) net amount of fair value of the asset or asset group deducted by the disposalexpenses; or 2) the present value of the expected future cash flows of the asset or asset group.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted as animpairment provision and is recognized in profit or loss for the period.
Goodwill impairment test shall be conducted at the end of each year at least. Goodwill impairment test shall be conductedin accordance with the concerned asset group or asset portfolio. That is to allocate the book value of goodwill to the assetgroup or asset portfolio that is expected to benefit from the synergies of the combination in a reasonable way from the dateof purchasing. When recoverable amount of apportion-included asset group or asset portfolio of goodwill is less than bookvalue of goodwill, impairment loss shall be recognized. Firstly, amount of impairment loss shall be apportioned to thebook value of goodwill of the said asset group or asset portfolio, and then book value of other assets, except for goodwill,in asset group or asset portfolio shall be abated in proportion.
Once the impairment loss of such assets is recognized, it can not be reversed in any subsequent period.
21. Long-term deferred expenses
Long-term deferred expenses are the expenses that are already incurred but will be shared in the current reporting periodand later periods with amortization term of more than one year, mainly for the expenses on betterment of leased fixedassets. Long-term deferred expenses are evenly amortized in installments in three years during the expected benefit period.
22. Contract liabilities
st 2021 to June 30
th2021
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration receivedor receivable from customers. Contract assets and contract liabilities under the same contract are presented in net terms.
23. Employee compensation
23.1 Accountant Arrangement Method of Short-term Remuneration
During accounting period when the Group's employees provide services, actual short-term remuneration shall berecognized as the liabilities and current profit and loss or relevant asset cost. The Group’s employee benefits and welfareare included into current profit and loss or relevant asset cost according to actual amount occurred during the period. Ifthe employee benefits and welfare is non-monetary, it shall be measured according to its fair value.
During the accounting period that the employees service the Group, the Group pays social insurance premiums such asmedical insurance premium, industrial injury insurance premium, maternity insurance premium and housing accumulationfund for its employees, as well as labor union expenditure and employee education expenses calculated and withdrawnaccording to the regulations, corresponding employee remuneration amount shall be calculated and determined inaccordance with specified calculation and withdrawal basis and proportion to recognize corresponding liabilities andincluded into the current profit and loss or relevant asset cost.
23.2 Accountant Arrangement Method of Post-employment Benefits
All post-employment benefits shall be considered as the defined contribution plan.
In the accounting period when the employee serves for the Group, the deposited amount calculated based on definedcontribution plan shall be recognized as liabilities and included in the current profit and loss or relevant asset cost.
23.3 Accountant Arrangement Method of the Termination Benefits
Where the Group provides termination benefits, the employee remuneration liabilities caused by such termination benefitswill be determined as the following date, whichever is earlier, and will be included in the current profit and loss: 1) Whenthe Group cannot unilaterally withdraw the termination benefits provided due to labor relation cancellation plan oremployee lay-off suggestion; or 2）when the Group determines costs or expenses in relation with the restructuring of thepaid termination benefits.
24. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency such as products qualityassurance, etc. And it is probable that an outflow of economic benefits will be required to settle the obligation, and theamount of the obligation can be measured reliably.
Hikvision 2021 Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th
2021
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation atthe balance sheet date, taking into account factors pertaining to a contingency such as the risks, uncertainties and timevalue of money. Where the effect of the time value of money is material, the amount of the provision is determined bydiscounting the related future cash outflows.
25. Share-based Payment
Share-based payment refers to a transaction in which the Group grants the equity instruments or undertakes the equity-instrument-based liabilities in return for services from employees. The Group's share-based payment is an equity-settledshare-based payment.
A share-based payment is a transaction which the Group grants equity instruments, or incurs liabilities for amounts thatare determined based on the price of equity instruments, in return for services rendered by employees. The Group's share-based payments are equity-settled share-based payments.
25.1 Equity-settled share-based payments
Grants to employees are equity-settled share-based payments.Equity-settled share-based payments in exchange for services rendered by employees are measured at the fair value of theequity instruments granted to employees at the grant date. Such amount is recognized as related costs or expenses on astraight-line basis over the vesting period, with a corresponding increase in capital reserve.
At each balance sheet date during the vesting period, the Group makes the best estimate according to the subsequent latestinformation of change in the number of employees who are granted with options that may vest, etc. and revises the numberof equity instruments expected to vest. The effect of the above estimate is recognized as related costs or expenses, with acorresponding adjustment to capital reserve.
25.2. Accounting treatment related to implementation, modification and termination of share-based payment arrangement
In case the Group modifies a share-based payment arrangement, if the modification increases the fair value of the equityinstruments granted, the Group will include the incremental fair value of the equity instruments granted in the measurementof the amount recognized for services received. If the modification increases the number of the equity instruments granted,the Group will include the fair value of additional equity instruments granted in the measurement of the amount recognizedfor services received. The increase in the fair value of the equity instruments granted is the difference between fair valueof the equity instruments before and after the modification on the date of the modification. If the Group modifies the termsor conditions of the share-based payment arrangement in a manner that reduces the total fair value of the share-basedpayment arrangement, or is not otherwise beneficial to the employee, the Group will continue to account for the servicesreceived as if that modification had not occurred, other than a cancellation of some or all the equity instruments granted.
If cancellation of the equity instruments granted occurs during the vesting period, the Group will account for thecancellation of the equity instruments granted as an acceleration of vesting, and recognize immediately the amount thatotherwise would have been recognized over the remainder of the vesting period in profit or loss for the period, with acorresponding recognition in capital reserve. When the employee or counterparty can choose whether to meet the non-
st 2021 to June 30
th
2021
vesting condition but the condition is not met during the vesting period, the Group treats it as a cancellation of the equityinstruments granted.
26. Revenue
26.1 Accounting policies applied in revenue recognition and measurement
The revenue of the Group is mainly generated from business types as follows:
(1) Revenue from sale of products
Product sales revenue is the revenue from sales of video surveillance products, smart home products, robotics productsand other products of the Group.
(2) Project construction revenue
Project construction revenue is the revenue from constructions related to intelligent security solution projects providedby the Group.
(3) Cloud service and other service revenue
Revenue from cloud services and other services refers to cloud services such as storage services, video services, andtelephone services provided by the Group, maintenance services related to security projects, and other services, etc.
When (or as) a performance obligation in a contract was satisfied, i.e., when (or as) the customer obtains control of relevantgoods or services, the Group recognizes as revenue the amount of the transaction price that is allocated to that performanceobligation. A performance obligation is the Group’s commitment to transfer to a customer a good or service (or a bundleof goods or services) that is distinct, in a contract with the customer. The transaction price is the amount of considerationto which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excludingamounts collected on behalf of third parties and amounts that the Group expects to refund to the customer.
Revenue is recognized over time by reference to the progress towards complete satisfaction of the relevant performanceobligation if one of the following criteria is met: (1) the customer simultaneously receives and consumes the benefitsprovided by the Group’s performance as the Group performs; (2) the Group’s performance creates or enhances an assetthat the customer controls as the Group performs; or (3) the Group’s performance does not create an asset with analternative use to the Group and the Group has an enforceable right to payment for performance completed to date.Otherwise, revenue is recognized at a point in time when the customer obtains control of the distinct good or service.
The Group adopts the output method to determine the progress of performance, that is, the progress of contractperformance is determined according to the value of the goods or services that have been transferred to the customer inthe view of the customer. When the performance progress cannot be reasonably determined, and the costs incurred can beexpected to be compensated, the Group recognizes revenue based on the amount of costs incurred until the performanceprogress can be reasonably determined.
If the contract contains two or more performance obligations, the Group allocates the transaction price to each singleperformance obligation on the contract start date in accordance with the relative proportion of the individual selling priceof the goods or services promised by each single performance obligation. However, if there is strong evidence that thecontract discount or variable consideration is only related to one or more (but not all) performance obligations in thecontract, the Group allocates the contract discount or variable consideration to the relevant one or more performancesobligation. Individual selling price refers to the price at which the Group sells goods or services to customers separately.Where the individual selling price cannot be directly observed, the Group comprehensively considers all relevant
st 2021 to June 30
th
2021
information that can be reasonably obtained, and uses the observable input value to the maximum to estimate the individualselling price.
If there is variable consideration in the contract, the Group determines the best estimate of variable consideration basedon the expected value or the most likely amount. The transaction price including variable consideration shall not exceedthe amount that is likely to cause no significant reversal of accumulated recognized revenue when the relevant uncertaintyis eliminated. At each balance sheet date, the Group re-estimates the amount of variable consideration that should beincluded in the transaction price.
For sales with sales return terms attached, as the customer obtains ownership of related goods, the Group recognizesrevenue in accordance with the consideration (excluding expected refund amounts due to sales returns) that the Group isexpected to receive due to the transfer of goods or services to the customer, and recognizes expected liabilities inaccordance with expected refund amounts due to sales returns. The remaining amount, subsequent to deduction of expectedcosts from collecting the goods (including the decrease in value of the returned goods), is recognized as an asset inaccordance with the carrying amount during the expected transfer of returned goods after deducting the costs of the abovenet assets carried forward.
For sales with quality assurance clauses, if the quality assurance provides a separate service beyond the assurance to thecustomer that the goods or services sold meet established standards, the quality assurance constitutes a single performanceobligation. Otherwise, the Group conducts accounting for quality assurance responsibilities in accordance with theAccounting Standards for Business Enterprises No. 13-Contingencies.
The additional purchase option of customers includes customer reward incentives. With respect to the additional purchaseoption with material rights provided to customers, the Group regards it as a single performance obligation, and recognizesrelevant revenue upon obtaining the control over relevant goods or services by the customers who exercise the purchaseoption in future or upon lapse of such option. If a stand-alone selling price of the additional purchase option of customersis not directly observable, the Group shall consider all relevant information including the difference in discount obtainedwith and without the exercise of such option by customers and the possibility of exercising such option by customersduring estimation.
If there is a significant financing component in the contract, the Group determines the transaction price based on theamount payable in cash when the customer assumes control of the goods or services. The difference between thetransaction price and the contract consideration is amortized using the effective interest rate method during the contractperiod. On the contract commencement date, the Group does not consider the significant financing components in thecontract if the interval between the customer obtaining control of the goods or services and the price being paid by thecustomer is not more than one year.
The Group judges whether the Group’s identity is the principal or agent when engaging in transactions based on whetherit has control over the goods or services before transferring the goods or services to customers. If the Group is able tocontrol the goods or services before transferring them to customers, the Group is the principal responsible person, andrevenue is recognized based on the total amount of consideration received or receivable; otherwise, the Group is an agentand recognizes revenue based on the amount of commissions or fees which the Group is expected to be entitled to charge.The amount of commissions or fees is determined based on the total amount of consideration received or receivable net ofthe amount payable to other parties.
When the Group collects amounts of sold goods or services in advance from the customer, the Group will firstly recognizethe amounts as a liability and then transfer to revenue until satisfying relevant performance obligations. When the advancesfrom customers is non-refundable and the customer may give up all or part of contract right, and the Group is expected tobe entitled to obtain amounts associated with contract rights given up by the customer, the above amounts shall beproportionally recognized as revenue in accordance with the model of exercising contract rights by the customer; otherwise,the Group will transfer the relevant balance of the above liability to revenue only when the probability is extremely low
st 2021 to June 30
th2021
for the customer to satisfy remaining performance obligations.
27. Cost of contract
27.1 Cost of obtaining a contract
Incremental costs incurred by the Group to obtain a contract (that is, costs that would not have occurred without a contract)and expected to be recovered are recognized as an asset, and amortized using the same basis as revenue recognition forthe goods or services to which the asset relates, and included in current profit or loss. If the amortization period of theasset does not exceed one year, it is included in current profit or loss when it occurs. Other expenses incurred by the Groupin order to obtain the contract shall be included in current profit or loss when incurred, unless it is clearly borne by thecustomer.
27.2 Cost of contract fulfillment
The cost of the Group’s performance of a contract that does not fall within the scope of accounting standards other thanthe revenue standard and meets the following conditions is recognized as an asset: (1) The cost is directly related to acurrent or anticipated contract; (2) The cost increases the Group’s resources for fulfilling performance obligations in thefuture; (3) The cost is expected to be recovered. The aforesaid assets are amortized on the same basis as the recognitionof income from goods or services related to the assets, and are included in the current profit or loss.
The Group’s asset in relation to contract costs are mainly contract performance costs, and they are included in inventoriesbased on their current nature.
27.3 Impairment of contract costs
In determining impairment losses on assets related to contract costs, impairment losses are first determined for other assetsrecognized in accordance with other relevant ASBEs and related to the contract; then, for assets related to contract costswhose carrying value is higher than the difference between the following two items, the Group makes provision forimpairment for the excess to be recognized as asset impairment losses: (1) the remaining amount of consideration that theGroup expects to receive as a results of transfer of goods or services to which the asset relates; (2) the estimated costs tobe incurred in connection with the transfer of relevant goods or services.
After the provision for impairment for the asset related to contract costs is made, if the difference between the above twoitems is higher than the carrying amount of the asset due to changes in the factors of impairment in previous periods, theoriginal provision for impairment of the asset is reversed and included in the current profit or loss, but the carrying amountof the asset after the reversal shall not exceed the carrying amount of the asset on the reversal date assuming no provisionfor impairment is made.
28. Types of governmental subsidies and accounting treatment methods
Government subsidies refer to the monetary and non-monetary assets obtained by the Group from the government for free.Government subsidies are recognized when they can meet the conditions attached to the government subsidies and can bereceived.
If a government subsidy is a monetary asset, it shall be measured at the amount received or receivable.
28.1 Judgment basis and Accountant treatment of government subsidy related to assets
st
2021 to June 30
th
2021
The government subsidies for Chongqing Manufacture Base construction and etc. are used for constructions and formslong-term assets, and therefore are categorized as government subsidy related to assets.
A government grant related to an asset is recognized as deferred income, and it should be evenly amortized to profit orloss over the useful life of the related asset.
28.2 Judgment basis and accountant treatment of government subsidy related to income
The Group receives government subsidies including subsidies for Value-Added-Tax rebate (VAT rebate), subsidies forspecial projects, tax refunds, and Value-Added-Tax deductions, etc. which are used to compensate the group-related costsor losses, and therefore are categorized as government subsidy related to income.
For a government grant related to income, if the subsidy is a compensation for related expenses or losses to be incurred insubsequent periods, it is recognized as deferred income, and recognized in profit or loss over the periods in which therelated costs or losses are recognized; If the subsidy, such as VAT Rebate, is a compensation for related expenses or lossesalready incurred, it is recognized immediately in profit or loss for the period.
For government subsidies related to the Group’s daily operations shall be booked into other income; for those not relatedto the Group’s daily operations, shall be booked into non-operating income/expense.
For the policy-backed preferential subsidized loan, if the Ministry of Finance will appropriate the subsidy amount to thelending bank, who will grant the loan to the Group at the policy-backed preferential interest rate, the actually receivedloan amount will be the entry value of the loan and the loan-related expenses will be calculated based on the loan principaland policy-backed preferential interest rate.
29. Deferred Tax Assets / Deferred Tax Liabilities
The income tax expenses include current income tax and deferred income tax.
29.1. Current Income Tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at theamount expected to be paid (or recovered) according to the requirements of tax laws.
29.2 Deferred Tax Assets and Deferred Tax Liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between thenil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determinedaccording to tax laws, deferred tax assets and liabilities are recognized through the balance sheet liability method.
st 2021 to June 30
th
2021
Deferred tax is generally recognized for all temporary differences. Deferred tax assets for deductible temporary differencesare recognized to the extent that it is probable that taxable profits will be available against which the deductible temporarydifferences can be utilized. However, for temporary differences associated with the initial recognition of goodwill and theinitial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither theaccounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability isrecognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognized to the extent that it isprobable that future taxable profits will be available against which the deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, exceptwhere the Group is able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporarydifferences associated with such investments are only recognized to the extent that it is probable that there will be taxableprofits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeablefuture.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the applicabletax rates in the period in which the related assets are recovered or the related liabilities are recovered in accordance withthe tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except when they arise fromtransactions or events that are directly recognized in other comprehensive income or in shareholders' equity, in which casethey are recognized in other comprehensive income or in shareholders' equity; and when they arise from businesscombinations, in which case they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it is no longer probablethat sufficient taxable profits will be available in the future to allow the benefit of deferred tax assets to be utilized. Suchreduction in amount is reversed when it becomes probable that sufficient taxable profits will be available.
29.3 Offset of Income Tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the assetsand settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets anddeferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity ordifferent taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realize the assetsand liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities areexpected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
30. Lease
Lease refers to a contract that conveys the right to use an asset for a period of time in exchange for consideration.
The Group assesses whether a contract is, or contains, a lease at the inception date. The Group does not re-assess whether
st
2021 to June 30
th2021
a contract contains a lease unless the terms and conditions of the contract are changed.
30.1 The Group as the lessee
30.1.1 Separating components of lease
In case the contract contains one or more lease and non-lease components, the Group separates each lease component andnon-lease component, and allocates the consideration to the lease and non-lease components based on the proportion ofrelative stand-alone prices of the components.
30.1.2 Right-of-use assets
The Group recognizes the right-of-use assets for leases on the commencement date of the lease term, except for short-termlease and lease of low-value assets. The commencement date of the lease term refers to the date from which the lessormakes the leased assets available for use by the Group. Right-of-use assets are initially measured at cost. The cost includes:
? Initial measurement amount of lease liabilities;? Amount of lease payment made at or before the commencement date of the lease, less any lease incentives received;? Initial direct costs incurred by the Group;? An estimate of any costs to be incurred by the Group in dismantling and removing the underlying asset, or restoringthe site on which it is located, or restoring the leased assets to the conditions as agreed under the terms of the lease,excluding costs incurred to produce inventories.
The Group calculates depreciation of the right-of-use assets in accordance with the relevant depreciation provisions ofAccounting Standards for Business Enterprises No. 4 - Fixed Assets. The right-of-use asset is depreciated over the shorterof the lease term and the useful life of the right-of-use asset, unless there is a transfer of ownership or purchase optionwhich is reasonably certain to be exercised at the end of the lease term.
The Group determines whether the right-of-use assets are impaired and accounts for the identified impairment loss inaccordance with the provisions of Accounting Standards for Business Enterprises No. 8 - Impairment of Assets.
30.1.3 Lease liabilities
The Group initially measures the lease liability on the commencement date at an amount equal to the present value of thelease payments during the lease term that are not paid at that date, except short-term lease and lease of low-value assets.In calculating the present value of the lease payments, the Group adopts the interest rate implicit in the lease as the discountrate. The Group uses its incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the leased assetduring the lease term, including:
? Fixed payments, including in-substance fixed payments, less any lease incentives receivable;? Variable lease payments that depend on an index or rate;? The exercise price of a purchase option, if the Group is reasonably certain to exercise that option;? Payments for terminating the lease, if the lease term reflects the lessee exercising the option to terminate the lease;? Amounts expected to be payable by the Group under residual value guarantees.
Variable lease payments based on an index or a rate are initially measured using the index or the rate at the commencementdate. Variable lease payments that are not included in the measurement of lease liabilities are recognized in the currentloss and profit or related asset costs when actually incurred.
After the commencement date of the lease term, the Group calculates interest expense of lease liabilities in each period oflease term at fixed periodic rate and recognizes in the current loss and profit or relevant asset costs.
Hikvision 2021 Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
After the commencement date of the lease term, the Group remeasures the lease liability and adjusts the correspondingright-of-use assets under the following circumstances. If the carrying value of the right-of-use assets has been reduced tozero while the lease liability needs to be further reduced, the Group will recognize the difference into the current loss andprofit:
? In case of any change of the lease term or any change in the valuation of the purchase option, the Group remeasures
the lease liability at the present value calculated based on the modified lease payments and the revised discount rate;? In the event of any change in the amount expected to be payable based on the residual value guaranteeS or any changeof the index or proportion adopted to determine the lease payments, the Group remeasures the lease liability at thepresent value calculated based on the changed lease payments and the original discount rate. In the event of anymodification in lease payments resulting from the change in floating interest rate, the present value is calculated usingthe revised discount rate.
30.1.4 Short-term lease and lease of low-value assets
The Group has elected not to recognize the right-of-use assets and lease liabilities for short-term leases and leases of low-value assets in connection with building and construction, machinery equipment, transportation facilities, office equipmentand other equipment. Short-term lease refers to lease with a term no more than 12 months from the commencement dateof lease term and without purchase option. Lease of low-value assets refers to lease for single lease asset with low valuewhen it is new. The Group recognizes lease payments under short-term leases and leases of low-value assets as the currentloss and profit or the relevant asset costs on a straight-line basis over each period during the lease term.
30.1.5 Lease modification
In case of lease modification, the Group makes accounting treatment of such lease change as a separate lease if all of thefollowing conditions are met:
? such lease modification increases the scope of the lease by adding the right to use one or more lease assets;? the increased consideration is commensurate with the stand-alone price for the increase in scope and any appropriate
adjustments to reflect the circumstances of the particular contract.
Where accounting treatment is not made for lease modification as a separate lease, at the effective date of leasemodification, the Group reallocates the contract consideration after the modification, redetermines the lease term, andremeasures the lease liability based on the present value calculated according to the modified lease payments and therevised discount rate.
In the event that the lease scope is decreased or the lease term is shortened as a result of the lease modification, the Groupreduces the carrying amount of the right-of-use assets, and recognizes the relevant gains or losses relating to the partial orfull termination of the lease in the income statement; for the lease liabilities remeasured due to other lease modifications,the Group adjusts the carrying amount of the right-of-use assets accordingly.
30.2 The Group as the lessor
30.2.1 Separating components of lease
In case the contract contains both lease and non-lease components, the Group allocates the contract consideration inaccordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue on portion oftransaction prices, based on the respective stand-alone prices of the lease component and the non-lease component.
30.2.2 Classification of lease
Finance lease is a lease that substantially transfers all the risks and rewards of incidental to ownership of an underlyingasset. Operating lease refers to the leases other than finance lease.
30.2.2.1 The Group records the operating lease business as the lessor
The Group recognizes the lease payments from operating leases as rental income on a straight-line basis for all periods
st 2021 to June 30
th2021
over the lease term. The Group's initial direct costs incurred in connection with operating leases is capitalized as incurred,recognized in the income statement over the lease term on the same basis as the lease income.Variable lease payments acquired by the Group in connection with operating leases that are not included in the leasepayments are recognized in the current loss and profit when they are actually incurred.
30.2.2.2 The Group records the finance lease business as the lessor
On the commencement date of the lease term, the Group uses the net lease investment as the carrying value of the financelease receivables and derecognizes the finance lease assets. Net lease investment is the sum of present value ofunguaranteed residual value and lease payments receivable discounted at the interest rate implicit in lease on thecommencement date of the lease term.
Lease payments receivable, which refer to amounts receivable by the Group from the lessee for conveying the right to usethe leased assets during the lease term, include:
? Fixed payment including in-substance fixed payments by the lessee, less any lease incentives payable;? Variable lease payments that depend on an index or rate;? The exercise price of a purchase option, if the lessee is reasonably certain to exercise that option;? Payments for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease;? Residual value guarantees provided to the Group by the lessee, a party related to the lessee, or a third party unrelatedto the lessor that is capable of discharging the obligations under the guarantee.
The variable lease payments that are not included in the measurement of the net lease investment are included in the currentloss and profit when actually incurred.
The Group calculates and recognizes the interest income in each period of the lease term according to the fixed periodicinterest rate.
30.2.3 Lease modification
In case of a medication of the operating lease, the Group accounts for it as a new lease as of the effective date of themodification, any prepaid or accrued lease payments relating to the original lease are considered as payments for the newlease .
In case of modification of finance lease, the Group accounts for the modification of a finance lease as a separate lease ifall of the following conditions are met:
? The modification increases the scope of the lease by adding the right to use one or more lease assets;? The consideration for the lease increases by an amount that is commensurate with the stand-alone price for theincrease in scope, and any appropriate adjustments to that price to reflect the circumstances of the particular contract.
If a modification of finance lease is not accounted for as a separate lease, the Group accounts for the changed lease underthe following circumstances:
? If the modification becomes effective on the commencement date of the lease and the lease is classified as anoperating lease, the Group accounts for it as a new lease from the effective date of the lease modification and measuresas the net lease investment prior to the effective date of the lease modification as the carrying value of the leasedasset.? If the modification becomes effective on the commencement date of the lease and the lease is classified as a finance
lease, the Group accounts for it in accordance with the provisions of Accounting Standards for Business EnterprisesNo. 22 - Recognition and Measurement of Financial Instruments regarding the modification or renegotiation ofcontracts.
st 2021 to June 30
th2021
30.3 Sale and leaseback transaction
30.3.1 The Group as the seller-lessee
The Group assesses and determines whether the transfer of the asset in sale and leaseback transaction qualifies as a sale inaccordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue. If the transfer doesnot qualify as a sale, the Group continues to recognize the transferred asset and at the same time recognize a financialliability equal to the transfer proceeds and account for the financial liability in accordance with the provisions ofAccounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. If thetransfer of the asset qualifies as a sale, the Group measures the right-of-use asset arising from the leaseback as theproportion of the previous carrying amount of the asset that relates to the right of use retained. The gain or loss recognisedis limited to the proportion of the total gain or loss that relates to the rights transferred to the buyer-lessor.
30.3.2 The Group as the buyer-lessor
If the transfer of the asset in a sale and leaseback transaction does not qualify as a sale, the Group does not recognize thetransferred asset, but recognizes a financial asset equal to the transfer proceeds and account for the financial asset inaccordance with the provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurementof Financial Instruments. If the transfer of the asset qualifies as a sale, the Group accounts for the purchase of the asset inaccordance with other applicable Accounting Standards for Business Enterprises and account for the lease of the asset.
31. Important judgments while applying accounting policy, and key assumptions and uncertainty factors appliedfor accounting estimate
During the process of using accounting policy described in note (III), due to the uncertainty in operation activities, thegroup should judge, estimate and assume the book value of the report items which may not be metered reliably. Thesejudgments, estimates and assumptions are based on the historical experience of the Group's management and other relatedfactors. Differences may exist between the actual results and the Group’s estimate.
The Group regularly reviews the above judgments, assumptions and estimations on the basis of continuous operation. Ifthe changes of accounting estimate only influence current period, the influence amount will be affirmed during thechanging period; if it influences the current period and subsequent periods, the influence amount will be recognized in thecurrent period and future period.- Key assumptions and uncertainties used in accounting estimateOn balance sheet date, key assumptions and uncertainties for performing accounting estimates on book value of assets andliabilities in subsequent future periods are:
Impairment provision for inventories
Except for contract performance costs, inventories are measured at the lower of cost or net realizable value. For rawmaterials, the latest or future actual purchase price is used as the basis for determining the net realizable value; For productsin progress, the actual selling price of the latest or future finished product minus the estimated costs and costs that will beincurred when similar products are completed in the current period, the estimated selling expenses and related taxes to beincurred, is used as the basis for determining the net realizable value; For finished products, the actual selling price of thelatest or future finished product minus the estimated selling expenses and related taxes will be incurred, is used as the basisfor determining the net realizable value. The Group will regularly conduct a comprehensive stocktaking to review the
st
2021 to June 30
th2021
impairment circumstances on defective, obsoleted or slow-moving inventory if any; in addition, the Group's managementwill regularly review the impairment circumstance of inventory with long storage time according to the inventory aginglist. The review procedure includes the comparison between book value of defective, obsoleted or slow-moving inventoriesand inventory with long storage time and its corresponding net realizable value in order to determine whether to withdrawprovisions on the defective, obsoleted or slow-moving inventory and inventory with long storage time. Based on the aboveprocedure, the Group's management deems that the full provision amounts have been withdrawn for inventory.
Impairment of accounts receivable
Except for accounts receivable whose credit losses are determined on the basis of individual basis, the Group adopts animpairment matrix to determine its expected credit loss provision. Based on the historical loss rate, the Group determinesthe proportion of corresponding loss reserves for various types of accounts receivable with similar risk characteristics. Theimpairment matrix is determined based on the historical overdue ratio and default of the Group, taking into accountreasonable and well-founded industry forward-looking information. As of June 30
th
2021, the Group has reassessed thehistorically observable overdue ratio and considered changes in forward-looking information.The amount of the provisionfor expected credit losses will change as the estimation of the Group. The details on the provision for expected credit lossesof the accounts receivable of the Group are given in Note (V). 4.
Useful life and predicted net residual value of fixed asset
The Group's estimation of fixed assets useful life is based on the historical experience of actual usable term of fixed assetswith similar properties and functions, the estimation of predicted net residual value is the amount obtained currently bythe Group from the assets after deducting the anticipated disposal expense based on the anticipated status assuming theconditions that fixed assets' predicted useful life expires and fixed assets are at the end of useful life. The Group shallconduct the review on the predicted service life and predicted net residual value of fixed assets at least annually. For thecurrent reporting period, the Group's management did not see signs either indicating a shortened or extended useful life ofthe Group’s fixed asset or indicating a change in predicted net residual value.
Accrued liabilities of product quality warranty
Accrued liabilities of product quality assurance are costs and expenses incurred to meet the established standards ofproduct quality assurance obligations to customers in accordance with the product contract; the Group made such anestimation according to the predicted repair and replacement cost of relevant products. The estimation considers theproduct claim rate trend, historic defect rate, industry practice and other major estimations. The management deems thatthe current estimation on accrued liabilities of product quality warranty is reasonable, however, the Group will continueto review the conditions of product repairs, and will conduct adjustment if any sign indicating the need to make adjustmentson accounting estimates.
Deferred tax assets and deferred tax liabilities
Deferred income tax assets and deferred income tax liabilities are measured at the applicable income tax rate during theperiod when the relevant asset is expected to be recovered or the relevant debt is expected to be paid off. The expectedapplicable income tax rate is determined according to the relevant current tax regulations and the actual situation of theGroup. If the estimated income tax rate is different from the original estimate, the management of the Group will adjust it.
st 2021 to June 30
th
2021
The realization of deferred income tax assets mainly depends on the actual future profits and the effective tax rate oftemporary difference in the future applicable years. If the actual profit in the future is less than the estimation, or actualtax rate is lower than the estimation, then the confirmed deferred income tax assets will be reversed and confirmed in theincome statement during the corresponding period. If the actual profit in the future is more than the estimation, or actualtax rate is higher than the estimation, then the corresponding deferred income tax assets might be adjusted and confirmedin the income statement during the corresponding period.
Goodwill impairment
When performing impairment test on goodwill, the predicted present value of future cash flows of relevant asset group orasset group portfolio included the goodwill need to be calculated, the future cash flows of relevant asset group or assetgroup portfolio need to be estimated, and the proper pretax rate that fairly reflects the current market time value of moneyand specific asset risk need to be determined. When the future actual result is different from the original estimation, thegoodwill impairment loss will alter.
Fair value measurement and valuation process
Held-for-trading financial assets, receivables for financing, and other non-current financial assets of the Group aremeasured at fair value in the financial statement. When valuating the fair value of these assets, the Group preferably usesobtainable and observable market data. If no observable data is available, the Group will organize an internal evaluationpanel or hire qualified third-party valuers to conduct valuation. The Finance Department and evaluation panel of the Groupwill work closely with the hired valuers to determine appropriate valuation techniques and the input values of the valuationmodel. The valuation techniques and input values used for valuating the fair value of various assets are disclosed in Note(IX).
st 2021 to June 30
th2021
32. Significant alternation in accounting policy and accounting estimations
32.1 Significant changes in accounting policies
| Changes in accounting policies and reasons | Approval Procedures | Notes |
| New Lease Standards From January 1st, 2021, the Group implements the Accounting Standard for Business Enterprises No. 21 - Leases revised by the Ministry of Finance in 2018 (hereinafter referred to as the "New Lease Standards" and the lease standards before the revision as the "Original Lease Standards"). The New Lease Standards have improved the definition of leases and added the identification, separation, combination and other contents of leases. The New Lease Standards have cancelled the classification of lessee’s operating leases and finance leases and required the recognition of right-of-use assets and lease liabilities and separate recognition of depreciation and interest expense for all leases (except short-term leases and leases of low-value assets) on the commencement date of the lease term; The subsequent measurement of lease by the lessee has been improved, the accounting treatment in the case of option re-assessment and lease modification has been added, and relevant disclosure requirements have been added. In addition, it also enriches the disclosure by the lessor. Please refer to Note (III) 30 for details of the revised accounting policies of the Group for recognition and measurement of leases as lessee and lessor. For contracts existing before the date of initial application, the Group chose not to reassess whether it is a lease or contains a lease on the date of initial execution. The Group as the lessee The Group adjusts the amount of retained earnings and the amount of relevant items in the financial statements on the initial application date according to the cumulative impact of the initial application of the New Lease Standards, in which the information of the comparable is not be adjusted. For operating lease other than low-value lease prior to the date of initial adoption, the Group electes to apply one or more of the following simplified approach depending on each lease: ? Any lease that will be completed within 12 months of the date of initial execution shall be treated as short-term lease; ? The same discount rate shall be used for leases with similar characteristics when measuring the lease liability; ? The measurement of right-of-use assets does not include initial direct costs; ? In case of any extension option or termination option, the Group may determine the lease term according to the actual exercise of the option before the first adoption date and other latest conditions; ? If a lease is modified occurs before the date of initial adoption, the Group will account for it according to the final arrangement of the lease modification. On the date of initial adoption, the Group makes the following adjustments as a result of the implementation of the New Lease Standards: ? For finance lease prior to the date of initial adoption, the Group will respectively measure the right-of-use asset and lease liability based on the original carrying values of the finance lease assets and finance lease payables on the date of initial adoption. ? For operating lease prior to the date of initial adoption, the Group shall measure the lease liability on the date of initial adoption based on the current value of the remaining lease payments discounted according to the lessee's incremental | Such alternations in accounting policy were approved by the Group at board of director general meeting. | None |
st 2021 to June 30
th2021
| On January 1st 2021, right-of-use assets are disclosed by category as follows: Unit: RMB | |||||
| Item | January 1st 2021 | ||||
| Building and construction | 333,243,923.96 | ||||
| Special-purpose equipment | 45,330,337.75 | ||||
| Transportation vehicles | 14,423,291.59 | ||||
| Total | 392,997,553.30 | ||||
st
2021 to June 30
th2021
32.2 The impact of the implementation of the New Lease Standards on the relevant items in the consolidated balance sheetat the beginning of the period is shown below:
Unit: RMB
| Item | Original Lease Standard | Reclassified (Note) | New Lease Standard |
| Current Assets: | |||
| Prepayments | 296,334,689.86 | (2,952,118.77) | 293,382,571.09 |
| Other receivables | 519,143,350.82 | (117,288.00) | 519,026,062.82 |
| Other current assets | 497,914,506.64 | (477,453.85) | 497,437,052.79 |
| Non-current Assets: | |||
| Fixed assets | 5,876,007,536.60 | (45,330,337.75) | 5,830,677,198.85 |
| Right-of-use assets | 392,997,553.30 | 392,997,553.30 | |
| Current Liabilities: | |||
| Non-current liabilities due within one year | 3,507,680,339.78 | 137,118,074.50 | 3,644,798,414.28 |
| Non-current Liabilities: | |||
| Long-term payables | 39,595,459.35 | (23,052,993.27) | 16,542,466.08 |
| Lease Liabilities | 230,055,273.70 | 230,055,273.70 |
| Item | Original Lease Standard | Reclassified (Note) | New Lease Standard |
| Current Assets: | |||
| Right-of-use assets | 66,446,154.01 | 66,446,154.01 | |
| Current Liabilities: | |||
| Non-current liabilities due within one year | 3,219,794,958.37 | 29,999,165.05 | 3,249,794,123.42 |
| Non-current Liabilities: | |||
| Lease Liabilities | 36,446,988.96 | 36,446,988.96 |
st 2021 to June 30
th2021
Note: Due to the implementation of the new lease standards, the Company recognizes right-of-use assets of RMB66,446,154.01 and lease liabilities (including those due within one year) of RMB 66,446,154.01.
st 2021 to June 30
th2021
IV. Taxes
1. Major categories of taxes and tax rates
| Category of tax | Basis of tax computation | Tax rate |
| Enterprise income tax | Taxable income | 25% (Note 1) |
| VAT | For the taxable product sales revenue or taxable labor revenue, the Company and its domestic subsidiaries are ordinary Value-added Tax payers; the VAT payable is the balance of input tax after deducting the deductible output tax. | 6%, 9%, 13% and simple collection rate of 5%, 3% (Note 3) |
| City maintenance and construction tax | Actual payable turnover tax | 7% |
| Education surcharges | Actual payable turnover tax | 3% |
| Local education surcharges | Actual payable turnover tax | 2% |
Hikvision 2021 Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
(4) In accordance with the Replies on Publishing identified High-tech Enterprises of Zhejiang Province in 2019(GuoKeHuoZi [2020] No. 32) issued by the leading group office of Zhejiang high-tech enterprise identificationmanagement work on January 20
th2020, the Company’s wholly-owned subsidiary, Hangzhou Hikvision SystemTechnology Co., Ltd. (Hangzhou System) and the Company’s joint venture subsidiary Hangzhou KuangxinTechnology Co., Ltd. (Hangzhou Kuangxin) , was recognized as a high-tech enterprise and was valid for 3 years from2019 to 2021. Therefore, the enterprise income rate shall be calculated and paid on the basis of a reduced tax rate of15% in the current reporting period. (2020:15%)
(5) In accordance with the Notice on Publishing the List of Third Batch of Proposed Identified High-tech Enterprises ofShanghai in 2020 issued by Shanghai High-tech Enterprise Identification Office on November 20
th2020, theCompany’s wholly-owned subsidiary, Shanghai Goldway Intelligent Transportation System Co., Ltd. (“ShanghaiGoldway”) was identified as the high-tech enterprise with a valid term of 3 years, from 2020 to 2022. Therefore, itscorporate income tax is at a reduced rate of 15% in the current reporting period. (2020:15%)
(6) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Provincein 2020 (Guo Ke Huo Zi [2020] No. 251) issued by the Leading Group Office of National High-tech EnterpriseIdentification Management on December 29
th2020, the Company’s joint-venture subsidiary, Hangzhou HikrobotTechnology Co., Ltd. (“Hangzhou Robotic Technology”) were identified as the high-tech enterprises with a valid termof 3 years, from 2020 to 2022. Therefore, the enterprise income tax in the current reporting period is at a reduced rateof 15%. (2020:15%)
(7) In accordance with the Letter of Reply on Publishing the List of Identified High-tech Enterprises of Zhejiang Provincein 2020 (Guo Ke Huo Zi [2020] No. 32) issued by the Leading Group Office of National High-tech EnterpriseIdentification Management on January 20
th
2020, the Company’s joint-venture subsidiary, Hangzhou HikmicroSensing Technology Co., Ltd. (“Hangzhou Hikmicro”) were identified as the high-tech enterprises with a valid termof 3 years, from 2019 to 2021.
According to the Ministry of Finance, the State Administration of Taxation, the National Development and ReformCommission, and the Ministry of Industry and Information Technology Announcement No. 45 of 2020 Announcementon the Corporate Income Tax Policy for Promoting the High-quality Development of the Integrated Circuit Industryand Software Industry, the state encourages integrated circuit design, equipment, materials, packaging, testingcompanies and software companies will be exempted from corporate income tax for the first year to the second yearfrom the profitable year, and levied half of the corporate income tax at a statutory tax rate of 25% from the third yearto the fifth year. Hangzhou Hikmicro is a qualified integrated circuit design company and is expected to enter into aprofitable year this year.
(8) In accordance with the Announcement on Promoting the Income Tax Policies of High-quality Developed Enterprisesin the Integrated Circuit Industry and the Software Industry (Announcement [2020] No. 45 jointly by the MOF, SAT,NDRC and MIIT), enterprises engaging in integrated circuit design, equipment, materials, packaging, testing andsoftware encouraged by the state are entitled to exemption from enterprise income tax in the first and second yearsafter start of profiting and pays enterprise income tax at half of the 25% statutory tax rate in the third to fifth years.The Company’s joint venture subsidiaries, Hangzhou EZVIZ Software Co., Ltd. (“EZVIZ Software”) and HangzhouMicroimage Software Co., Ltd. (“Microimage Software”), are qualified software companies and are entitled toexemption from enterprise income tax in the current reporting period (2020: tax-exempted).
Note 2: In accordance with the requirements of the Notice on Software Product Value-added Tax Policy (Cai Shui [2011]No. 100) promulgated by the Ministry of Finance and the State Administration of Taxation, as for self-developed softwareproducts sales of the Company, Hangzhou System, the Company’s joint-venture subsidiaries such as HangzhouHikRobotic Technology, Hangzhou HikAuto Software Co., Ltd. (“HikAuto”), Hangzhou EZVIZ Software, Wuhan HikStorage Technology Co., Ltd., Hangzhou HikStorage Technology Ltd. (“HikStorage”), Hangzhou Hikimaging TechnologyCo., Ltd., Hangzhou Hikfire Technology C o., Ltd. (“Hikfire”), Hangzhou Rayin Technology Co., Ltd. (“Rayin”),Microimage Software and Hangzhou Kuangxin, the VAT shall be calculated and paid with tax rate of 17% at first, then theportion with actual tax bearing excess 3% shall be refunded after State Administration of Taxation reviews.
st 2021 to June 30
th2021
Note 3: In accordance with the Announcement on Relevant Policies for Deepening the Value-Added Tax Reform (JointAnnouncement [2019] No. 39) jointly issued by the Ministry of Finance, the State Administration of Taxation and theGeneral Administration of Customs, from April 1
st 2019 to December 31
st2021, taxpayers in the production and livingservices industry are allowed to deduct an additional 10% of the current deductible input tax to deduct the tax payable(“Additional Deduction Policy”), the Company’s joint venture subsidiaries, Henan Hua’An Bao Quan IntelligentDevelopment Co., Ltd. (“Hua’an Baoquan Intelligent”), Henan Hua’an Security Services Co., Ltd. (“Hua’an SecurityServices”), and Henan Haikang Hua’An BaoQuan Electronics Co., Ltd. (“Hua’An BaoQuan Electronics”), engaging ininformation technology service industry, and their sales of information technology services accounted for more than 50%of its total sales, are complying with the provisions of the Additional Deduction Policy and were entitled to additionaldeduction preferential tax policy of input tax since April 1
st2019.
Based on the Joint Announcement [2019] No. 39, since April 1
st
2019, taxpayers are subject to VAT taxable sales orimported goods, the VAT rates had been adjusted from 16% and 10% to 13% and 9% respectively.
The VAT rate for the services provided by the Company’s taxpayers is 6%, and part of taxable service income is applicableto the simple collection rate of 5% and 3%.
st
2021 to June 30
th
2021
V. Notes to items in the consolidated financial statements
1. Cash and bank balances
| Item | Closing Balance | Opening Balance | ||||
| Foreign currency amount | Exchange rate for conversion | RMB amount | Foreign currency amount | Exchange rate for conversion | RMB amount | |
| Cash： | ||||||
| RMB | - | - | 17,711.11 | - | - | 17,959.62 |
| EUR | 28,897.50 | 7.6862 | 222,111.95 | 71,638.34 | 8.0250 | 574,897.70 |
| INR | 2,226,484.70 | 0.0869 | 193,481.52 | 2,504,019.19 | 0.0891 | 223,108.11 |
| USD | 37,184.53 | 6.4601 | 240,215.80 | 32,776.72 | 6.5249 | 213,864.82 |
| GBP | 6,338.38 | 8.9410 | 56,671.46 | 6,341.78 | 8.8903 | 56,380.33 |
| Other currencies | - | - | 19,819.64 | - | - | 18,836.93 |
| Bank balance： | ||||||
| RMB | - | - | 24,516,667,961.16 | - | - | 27,789,108,210.05 |
| USD | 200,480,296.15 | 6.4601 | 1,295,122,761.15 | 941,351,972.89 | 6.5249 | 6,142,227,487.92 |
| EUR | 144,296,760.60 | 7.6862 | 1,109,093,761.32 | 52,026,066.91 | 8.0250 | 417,509,186.97 |
| GBP | 19,928,672.85 | 8.9410 | 178,182,263.98 | 11,204,897.40 | 8.8903 | 99,614,899.38 |
| INR | 1,120,810,944.76 | 0.0869 | 97,398,471.10 | 1,203,270,539.96 | 0.0891 | 107,211,405.11 |
| RUB | 621,594,434.80 | 0.0888 | 55,197,585.81 | 1,742,132,380.50 | 0.0877 | 152,785,009.77 |
| BRL | 61,024,191.76 | 1.3028 | 79,502,317.02 | 54,535,451.03 | 1.2551 | 68,447,444.59 |
| CAD | 7,868,875.11 | 5.2097 | 40,994,478.65 | 5,383,485.44 | 5.1161 | 27,542,449.88 |
| JPY | 594,440,839.55 | 0.0584 | 34,715,345.03 | 336,505,067.09 | 0.0632 | 21,267,120.24 |
| AED | 18,367,690.42 | 1.7580 | 32,290,399.76 | 36,263,518.29 | 1.7761 | 64,407,634.83 |
| THB | 124,548,137.22 | 0.2015 | 25,096,449.65 | 14,687,508.85 | 0.2328 | 3,419,252.06 |
| HKD | 28,052,675.20 | 0.8321 | 23,342,631.03 | 13,632,862.61 | 0.8416 | 11,473,417.17 |
| AUD | 3,576,171.25 | 4.8528 | 17,354,443.86 | 2,279,274.45 | 5.0163 | 11,433,524.41 |
| ZAR | 34,576,247.06 | 0.4501 | 15,562,768.80 | 14,765,683.20 | 0.4458 | 6,582,541.57 |
| PLN | 7,282,882.13 | 1.7009 | 12,387,454.21 | 12,359,893.85 | 1.7520 | 21,654,534.02 |
| KRW | 1,799,856,117.54 | 0.0057 | 10,259,179.87 | 855,655,685.00 | 0.0060 | 5,133,934.11 |
| Other currencies | - | - | 37,517,328.32 | - | - | 18,195,337.35 |
| Other currency funds: | ||||||
| RMB | - | - | 92,736,731.47 | - | - | 463,887,119.07 |
| USD | 6,915,610.24 | 6.4601 | 44,675,533.72 | 3,101,420.39 | 6.5249 | 20,236,457.90 |
| EUR | 774,356.27 | 7.6862 | 5,951,857.16 | 465,821.33 | 8.0250 | 3,738,216.17 |
| Other currencies | - | - | 7,453,240.92 | - | - | 2,748,878.19 |
| Total | 27,732,252,975.47 | 35,459,729,108.27 | ||||
| Including: deposited in overseas banks | 766,732,314.21 | 782,389,029.81 | ||||
st 2021 to June 30
th
2021
Details of other currency funds:
| Closing Balance | Opening Balance | |||||
| Item | Foreign currency amount | Exchange rate for conversion | RMB amount | Foreign currency amount | Exchange rate for conversion | RMB amount |
| Capitals with limitations： | ||||||
| Bank acceptance bill | - | - | 443,250.07 | - | - | 8,484.61 |
| Deposits for letter of guarantee | - | - | 50,699,985.96 | - | - | 44,417,713.65 |
| Deposits for letter of Credit in BRL | 274,141.18 | 1.3028 | 357,151.13 | 283,313.18 | 1.2551 | 355,586.37 |
| Tax Operation Margin for India | 120,305.98 | 0.0869 | 10,454.59 | 120,305.95 | 0.0891 | 10,719.26 |
| Deposits for letter of Credit in RMB | - | - | 21,540,000.00 | - | - | - |
| Other security deposit | - | - | 2,253,376.24 | 60,000.00 | 4.7050 | 282,300.00 |
| Other capitals with limitations | - | - | 16,984,637.63 | - | - | 389,816,426.07 |
| Subtotal | 92,288,855.62 | 434,891,229.96 | ||||
| Capitals without limitations: | ||||||
| Deposit in Alipay, Tenpay, etc. | 23,865,469.36 | - | - | 25,263,562.38 | ||
| Other currency funds in USD | 5,365,712.34 | 6.4601 | 34,663,038.29 | 4,662,441.59 | 6.5249 | 30,421,965.14 |
| Other currency funds in ZAR | - | - | - | 23,875.03 | 0.0877 | 2,093.84 |
| Other currency funds in EUR | - | - | - | 3,965.11 | 8.0250 | 31,820.01 |
| Subtotal | 58,528,507.65 | 55,719,441.37 | ||||
| Total | 150,817,363.27 | 490,610,671.33 | ||||
| Item | Closing Balance | Opening Balance |
| Financial assets measured at fair value through current gain and loss | 32,620,061.54 | 22,679,846.77 |
| Including: derivative financial assets | 32,620,061.54 | 22,679,846.77 |
| Total | 32,620,061.54 | 22,679,846.77 |
| Category | Closing Balance | Opening Balance |
| Bank acceptance bill | 893,082,402.65 | 1,003,388,157.28 |
| Commercial acceptance bill | 232,175,189.62 | 299,864,547.91 |
| Total | 1,125,257,592.27 | 1,303,252,705.19 |
st
2021 to June 30
th
2021
3.2 As of June 30
th2021, the pledged notes receivable by the Group is nil.
3.3 At the end of the current reporting period, notes receivable endorsed by the Group but not yet due at thebalance sheet day
Unit：RMB
| Category | Derecognized amount as of June 30th 2021 | Amount not derecognized as of June 30th 2021 |
| Bank acceptance bill Note (V)-30.3 | - | 610,856,089.84 |
| Total | - | 610,856,089.84 |
| Category | Amounts transferred into accounts receivable as of June 30th 2021 |
| Commercial Acceptance Bill | 29,886,894.42 |
| Total | 29,886,894.42 |
| Item | Closing Balance | ||
| Accounts receivable | Credit loss provision | Proportion (%) | |
| Within credit period | 13,908,017,211.24 | 67,892,012.25 | 0.49 |
| Within 1 year after exceeding credit period | 8,650,470,382.80 | 342,217,169.16 | 3.96 |
| 1-2 years after exceeding credit period | 1,423,179,116.77 | 338,705,918.34 | 23.80 |
| 2-3 years after exceeding credit period | 1,072,722,797.05 | 574,960,931.68 | 53.60 |
| 3-4 years after exceeding credit period | 326,461,889.47 | 254,762,597.29 | 78.04 |
| Over 4 years after exceeding credit period | 227,463,105.31 | 227,463,105.31 | 100.00 |
| Subtotal | 25,608,314,502.64 | 1,806,001,734.03 | 7.05 |
st 2021 to June 30
th2021
4.2 Classified disclosure of credit loss provision by methods
Unit: RMB
| Category | Closing Balance | ||||
| Carrying amount | Credit loss provision | Book Value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | |
| Provision for credit loss on a single basis | - | - | - | - | - |
| Provision for credit loss by portfolios | 25,608,314,502.64 | 100.00 | 1,806,001,734.03 | 7.05 | 23,802,312,768.61 |
| Total | 25,608,314,502.64 | 100.00 | 1,806,001,734.03 | 7.05 | 23,802,312,768.61 |
| Category | Beginning Balance | ||||
| Carrying amount | Credit loss provision | Book Value | |||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | |
| Provision for credit loss on a single basis | - | - | - | - | - |
| Provision for credit loss by portfolios | 23,491,775,903.07 | 100.00 | 1,512,395,186.21 | 6.44 | 21,979,380,716.86 |
| Total | 23,491,775,903.07 | 100.00 | 1,512,395,186.21 | 6.44 | 21,979,380,716.86 |
| Customer | Closing balance | ||
| Carrying amount | Credit loss provision | Proportion (%) | |
| Portfolio A | 3,888,424,720.21 | 113,031,569.59 | 2.91 |
| Portfolio B | 16,073,854,190.90 | 1,526,870,959.69 | 9.50 |
| Portfolio C | 5,646,035,591.53 | 166,099,204.75 | 2.94 |
| Total | 25,608,314,502.64 | 1,806,001,734.03 | 7.05 |
st 2021 to June 30
th
2021
As of June 30
th 2021 and January 1
st2021, the credit risk and expected credit losses of accounts receivable from portfolio A are as follows:
Unit: RMB
| Age | Closing balance | Beginning balance | ||||||
| Estimated average loss rate (%) | Carrying value | Credit loss provision | Book value | Estimated average loss rate (%) | Carrying value | Credit loss provision | Book value | |
| Within credit period | 0.02 | 2,920,681,186.29 | 719,059.43 | 2,919,962,126.86 | 0.02 | 2,971,260,488.09 | 604,959.50 | 2,970,655,528.59 |
| Within 1 year after exceeding credit period | 1.32 | 803,386,839.63 | 10,638,186.66 | 792,748,652.97 | 2.02 | 640,220,646.55 | 12,955,798.75 | 627,264,847.80 |
| 1-2 years after exceeding credit period | 36.05 | 79,565,557.66 | 28,679,492.96 | 50,886,064.70 | 51.50 | 82,533,903.30 | 42,503,136.38 | 40,030,766.92 |
| 2-3 years after exceeding credit period | 83.46 | 71,304,021.35 | 59,507,715.26 | 11,796,306.09 | 90.10 | 40,717,280.97 | 36,686,603.66 | 4,030,677.31 |
| 3-4 years after exceeding credit period | 100.00 | 12,431,662.09 | 12,431,662.09 | - | 100.00 | 5,809,507.07 | 5,809,507.07 | - |
| Over 4 years after exceeding credit period | 100.00 | 1,055,453.19 | 1,055,453.19 | - | 100.00 | 830,934.85 | 830,934.85 | - |
| Total | 2.91 | 3,888,424,720.21 | 113,031,569.59 | 3,775,393,150.62 | 2.66 | 3,741,372,760.83 | 99,390,940.21 | 3,641,981,820.62 |
| Age | Closing balance | Beginning balance | ||||||
| Estimated average loss rate (%) | Carrying value | Credit loss provision | Book value | Estimated average loss rate (%) | Carrying value | Credit loss provision | Book value | |
| Within credit period | 1.03 | 6,077,420,279.44 | 62,861,159.97 | 6,014,559,119.47 | 0.76 | 6,294,425,956.16 | 48,017,503.05 | 6,246,408,453.11 |
| Within 1 year after exceeding credit period | 4.12 | 7,273,471,475.34 | 299,403,299.11 | 6,974,068,176.23 | 3.77 | 5,727,639,925.20 | 216,155,232.48 | 5,511,484,692.72 |
| 1-2 years after exceeding credit period | 20.16 | 1,253,426,402.15 | 252,735,318.10 | 1,000,691,084.05 | 20.69 | 1,426,493,413.08 | 295,122,043.56 | 1,131,371,369.52 |
| 2-3 years after exceeding credit period | 49.33 | 959,076,761.29 | 473,111,202.01 | 485,965,559.28 | 57.51 | 665,262,321.85 | 382,616,768.44 | 282,645,553.41 |
| 3-4 years after exceeding credit period | 76.24 | 301,757,205.55 | 230,057,913.37 | 71,699,292.18 | 83.09 | 238,233,041.29 | 197,947,096.87 | 40,285,944.42 |
| Over 4 years after exceeding credit period | 100.00 | 208,702,067.13 | 208,702,067.13 | - | 100.00 | 146,749,340.78 | 146,749,340.78 | - |
| Total | 9.50 | 16,073,854,190.90 | 1,526,870,959.69 | 14,546,983,231.21 | 8.87 | 14,498,803,998.36 | 1,286,607,985.18 | 13,212,196,013.18 |
st 2021 to June 30
th2021
As of June 30
th 2021 and January 1
st2021, the credit risk and expected credit losses of accounts receivable from portfolio C are as follows:
Unit: RMB
| Age | Closing balance | Beginning balance | ||||||
| Estimated average loss rate (%) | Carrying value | Credit loss provision | Book value | Estimated average loss rate (%) | Carrying value | Credit loss provision | Book value | |
| Within credit period | 0.09 | 4,909,915,745.51 | 4,311,792.85 | 4,905,603,952.66 | 0.20 | 4,736,831,208.62 | 9,676,562.96 | 4,727,154,645.66 |
| Within 1 year after exceeding credit period | 5.61 | 573,612,067.83 | 32,175,683.39 | 541,436,384.44 | 6.84 | 391,071,518.27 | 26,753,464.86 | 364,318,053.41 |
| 1-2 years after exceeding credit period | 63.52 | 90,187,156.96 | 57,291,107.28 | 32,896,049.68 | 51.18 | 69,085,009.97 | 35,354,825.98 | 33,730,183.99 |
| 2-3 years after exceeding credit period | 100.00 | 42,342,014.41 | 42,342,014.41 | - | 100.00 | 28,016,950.72 | 28,016,950.72 | - |
| 3-4 years after exceeding credit period | 100.00 | 12,273,021.83 | 12,273,021.83 | - | 100.00 | 11,470,715.01 | 11,470,715.01 | - |
| Over 4 years after exceeding credit period | 100.00 | 17,705,584.99 | 17,705,584.99 | - | 100.00 | 15,123,741.29 | 15,123,741.29 | - |
| Total | 2.94 | 5,646,035,591.53 | 166,099,204.75 | 5,479,936,386.78 | 2.41 | 5,251,599,143.88 | 126,396,260.82 | 5,125,202,883.06 |
| Credit loss provision | Total |
| Balance on January 1st 2021 | 1,512,395,186.21 |
| Provision/(reverse) during the current reporting period | 302,443,301.79 |
| Derecognition of financial assets (including direct write-downs) and transfer out | (7,437,696.81) |
| Difference arised from foreign currency statement translation | (1,399,057.16) |
| Balance on June 30th 2021 | 1,806,001,734.03 |
st 2021 to June 30
th
2021
Actual write-off of accounts receivable during current reporting period:
In the current reporting period, the amount of actual accounts receivable write-off is RMB 8,321,415.61, and RMB883,718.80 is recollected after writing-off.
4.4 Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
| Name of the Party | Relationship with the Company | Book value balance of accounts receivable | Closing balance for credit loss provision | Proportion (%) of the total balance of accounts receivable at the end of the current reporting period |
| CETC’s subsidiary company A (Note) | Related Party | 385,903,069.21 | 124,699,227.90 | 1.51 |
| Third Party A | Third party | 307,412,691.27 | 3,079,948.14 | 1.20 |
| Third Party B | Third party | 246,281,362.97 | 487,108.46 | 0.96 |
| Third Party C | Third party | 144,073,830.98 | 276,671.42 | 0.56 |
| Third Party D | Third party | 96,859,002.40 | 3,934,633.09 | 0.38 |
| Total | 1,180,529,956.83 | 132,477,589.01 | 4.61 |
| Item | Closing Balance | Opening Balance |
| Bank acceptance bill | 1,120,170,492.09 | 1,959,601,195.25 |
| Total- | 1,120,170,492.09 | 1,959,601,195.25 |
| Item | Derecognized amount as of June 30th 2021 (note) | Amount not derecognized as of June 30th 2021 |
| Bank acceptance bill | 1,742,762,080.69 | - |
| Total- | 1,742,762,080.69 | - |
st 2021 to June 30
th2021
6. Prepayments
6.1 Prepayments by aging analysis
Unit: RMB
| Aging | Closing Balance | Opening Balance | ||
| Carrying amount | Proportion (%) | Carrying amount | Proportion (%) | |
| Within 1 year | 299,556,093.13 | 77.18 | 261,740,350.78 | 89.22 |
| 1-2 years | 67,210,259.92 | 17.32 | 20,302,314.17 | 6.92 |
| 2-3 years | 10,779,307.27 | 2.78 | 9,021,070.25 | 3.07 |
| Over 3 years | 10,560,521.97 | 2.72 | 2,318,835.89 | 0.79 |
| Total | 388,106,182.29 | 100.00 | 293,382,571.09 | 100.00 |
st
2021 to June 30
th
2021
7. Other receivables
7.1 Other receivables by aging
Unit: RMB
| Item | Closing Balance | ||
| Other receivables | Bad debt provision | Proportion (%) | |
| Within contract period | 699,964,008.04 | 2,551,178.13 | 0.36 |
| Within 1 year | 78,649,546.76 | 2,361,636.27 | 3.00 |
| 1-2 years | 9,467,840.34 | 1,985,358.99 | 20.97 |
| 2-3 years | 27,274,454.15 | 11,133,432.18 | 40.82 |
| 3-4 years | 17,810,085.16 | 12,356,524.48 | 69.38 |
| Over 4 years | 11,290,239.81 | 11,247,498.71 | 99.62 |
| Subtotal | 844,456,174.26 | 41,635,628.76 | 4.93 |
| Item | Closing Balance | Opening Balance |
| Temporary payments for receivables | 628,024,719.34 | 294,409,377.31 |
| Guarantee deposits | 189,605,664.05 | 173,447,240.76 |
| Investment intention fund | 1,000,000.00 | 1,000,000.00 |
| Tax rebates | 310,191.78 | 67,714,444.77 |
| Others | 25,515,599.09 | 33,758,132.77 |
| Total | 844,456,174.26 | 570,329,195.61 |
st 2021 to June 30
th
2021
7.3 Provision for credit loss
Unit: RMB
| Category | Opening balance | Amount of changes in the current reporting period | Difference resulted from foreign currency statements Conversion | Closing balance | ||
| Provision or reverse | Recollect | Resell or write off | ||||
| Other receivables | 51,303,132.79 | (9,417,803.41) | - | - | (249,700.62) | 41,635,628.76 |
| Total | 51,303,132.79 | (9,417,803.41) | - | - | (249,700.62) | 41,635,628.76 |
| bed debts allowance | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (credit impairment has not incurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Balance on January 1st 2021 | 3,092,760.15 | 9,818,044.78 | 38,392,327.86 | 51,303,132.79 |
| The book balance of other receivables on January 1st 2021 in the current reporting period | ||||
| --Transfer into stage 2 | (3,092,760.15) | 3,092,760.15 | - | - |
| -- Transfer into stage 3 | (9,818,044.78) | 9,818,044.78 | - | |
| --provision/(reverse) in the current reporting period | 2,800,878.75 | 1,254,235.11 | (13,472,917.27) | (9,417,803.41) |
| -- Derecognition of financial assets (including direct write-down) and transfer out | - | - | - | - |
| Other changes | (249,700.62) | - | - | (249,700.62) |
| Balance on June 30th 2021 | 2,551,178.13 | 4,346,995.26 | 34,737,455.37 | 41,635,628.76 |
st
2021 to June 30
th
2021
7.5 Top five debtors based on corresponding closing balance of other receivables
Unit: RMB
| Entities | Relationship with the Company | Nature | Closing balance | Aging | Proportion of total closing balance for other receivables (%) | Closing balance for credit loss provision |
| Third party E | Third party | Temporary payments for receivables | 7,018,264.26 | With in the contract period | 0.83 | 76,499.08 |
| Third party F | Third party | Guarantee deposits | 6,927,179.05 | Within 1 year | 0.82 | 288,863.37 |
| Third party G | Third party | Temporary payments for receivables | 5,513,580.00 | With in the contract period | 0.65 | 60,098.02 |
| Third party H | Third party | Guarantee deposits | 3,738,423.66 | With in the contract period | 0.44 | 40,748.82 |
| Third party I | Third party | Guarantee deposits | 3,500,000.00 | With in the contract period | 0.41 | 38,150.00 |
| Total | 26,697,446.97 | 3.15 | 504,359.29 |
st 2021 to June 30
th2021
8. Inventories
8.1 Categories of inventories
Unit: RMB
| Category | Closing Balance | Opening Balance | ||||
| Carrying amount | Provision for decline in value of inventories/ Impairment provision for contract performance cost | Book value | Carrying amount | Provision for decline in value of inventories/ Impairment provision for contract performance cost | Book value | |
| Raw materials | 6,915,560,569.62 | 194,526,225.36 | 6,721,034,344.26 | 5,307,099,264.63 | 96,173,520.97 | 5,210,925,743.66 |
| Work-in-progress | 638,385,039.92 | - | 638,385,039.92 | 364,831,525.62 | - | 364,831,525.62 |
| Finished goods | 7,629,308,362.10 | 654,681,758.24 | 6,974,626,603.86 | 5,863,464,370.61 | 516,926,580.56 | 5,346,537,790.05 |
| Contract performance cost | 760,459,457.01 | - | 760,459,457.01 | 555,610,981.37 | - | 555,610,981.37 |
| Total | 15,943,713,428.65 | 849,207,983.60 | 15,094,505,445.05 | 12,091,006,142.23 | 613,100,101.53 | 11,477,906,040.70 |
| Category | Opening balance | Increase in the current reporting period | Decrease in the current reporting period | Effect on conversion of financial statements denominated in foreign currencies | Closing Balance | |
| Reversals | Write-off | |||||
| Raw materials | 96,173,520.97 | 98,613,564.09 | - | 260,859.70 | - | 194,526,225.36 |
| Finished goods | 516,926,580.56 | 153,987,401.28 | - | 13,864,740.86 | (2,367,482.74) | 654,681,758.24 |
| Subtotal | 613,100,101.53 | 252,600,965.37 | - | 14,125,600.56 | (2,367,482.74) | 849,207,983.60 |
st 2021 to June 30
th2021
9. Contract assets
9.1 Details of contract assets:
Unit: RMB
| Items | Closing Balance | Opening Balance | ||||
| Carrying amount | Provisions for impairment | Book value | Carrying amount | Provisions for impairment | Book value | |
| Constructions | 120,801,235.95 | 6,843,535.66 | 113,957,700.29 | 179,392,556.16 | 1,363,383.44 | 178,029,172.72 |
| Maintainence services | 71,055,883.20 | 774,509.14 | 70,281,374.06 | 68,243,992.61 | 518,654.35 | 67,725,338.26 |
| Total | 191,857,119.15 | 7,618,044.80 | 184,239,074.35 | 247,636,548.77 | 1,882,037.79 | 245,754,510.98 |
| Items | Closing Balance | ||||
| Carrying amount | Provisions for impairment | Book value | |||
| Amount | Proportion (%) | Amount | Provision proportion (%) | Amount | |
| Provision for impairment on a single item | - | - | - | - | - |
| Provision for impairment by portfolio | 191,857,119.15 | 100.00 | 7,618,044.80 | 3.97 | 184,239,074.35 |
| Total | 191,857,119.15 | 100.00 | 7,618,044.80 | 3.97 | 184,239,074.35 |
| Credit loss provision | Expected credit loss during the whole duration (No credit impairment occurred) | Expected credit loss during the whole duration (Credit impairment occurred) | Total |
| Balance on January 1st 2021 | 1,882,037.79 | - | 1,882,037.79 |
| Provision during the current reporting period | 5,736,007.01 | - | 5,736,007.01 |
| Balance on June 30th 2021 | 7,618,044.80 | - | 7,618,044.80 |
| Item | Closing Balance | Opening Balance |
| Long-term receivables due within one year (Note (V) 12) | 1,150,804,899.71 | 1,001,208,813.83 |
| Total | 1,150,804,899.71 | 1,001,208,813.83 |
st
2021 to June 30
th2021
11. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible VAT input | 705,088,455.51 | 391,898,131.26 |
| Prepaid corporate income tax | 45,361,243.85 | 41,520,799.46 |
| Prepaid tariff | 32,329,062.36 | 22,446,422.69 |
| Others | 74,118,058.54 | 41,571,699.38 |
| Total | 856,896,820.26 | 497,437,052.79 |
Hikvision 2021 Half Year Report
Notes to Financial Statements arFor the reporting period from January 1
st 2021 to June 30
th2021
12. Long-term receivables
12.1 Details of long-term receivables
Unit: RMB
| Item | Closing balance | Opening balance | Range of discount rate | ||||
| Carrying amount | Provision for credit loss | Book value | Carrying amount | Provision for credit loss | Book value | ||
| Financial leases receivables | 331,157,010.38 | 29,130,391.03 | 302,026,619.35 | 332,860,621.51 | 21,387,061.50 | 311,473,560.01 | 0.13%-10.52% |
| Including: Unrealized income from financing | 16,009,607.90 | - | 16,009,607.90 | 20,751,939.07 | - | 20,751,939.07 | - |
| Installments for selling goods | 2,869,171,328.65 | 106,238,042.24 | 2,762,933,286.41 | 2,890,406,667.71 | 95,101,409.36 | 2,795,305,258.35 | 3.85%-5.62% |
| Including: Unrealized income from financing | 689,702,955.21 | - | 689,702,955.21 | 738,142,438.88 | - | 738,142,438.88 | - |
| Less: Non-current assets due within one year (Note (V) 10) | 1,265,079,116.45 | 114,274,216.74 | 1,150,804,899.71 | 1,092,345,496.98 | 91,136,683.15 | 1,001,208,813.83 | - |
| Total | 1,935,249,222.58 | 21,094,216.53 | 1,914,155,006.05 | 2,130,921,792.24 | 25,351,787.71 | 2,105,570,004.53 | - |
Hikvision 2021 Half Year ReportNotes to Financial Statements arFor the reporting period from January 1
st 2021 to June 30
th2021
As of June 30
th2021, the credit risk and expected credit losses of long-term receivables of these customers are as follows:
Unit: RMB
| Age | Closing balance | ||
| Amounts | Credit loss provision | Estimated average loss rate (%) | |
| Within credit period | 2,526,073,126.75 | 27,410,017.06 | 1.09 |
| Within 1 year after exceeding credit period | 404,148,057.87 | 16,852,965.89 | 4.17 |
| 1-2 years after exceeding credit period | 172,046,784.54 | 33,876,050.25 | 19.69 |
| 2-3 years after exceeding credit period | 54,999,223.73 | 22,450,683.12 | 40.82 |
| 3-4 years after exceeding credit period | 27,470,743.58 | 19,188,314.39 | 69.85 |
| Over 4 years after exceeding credit period | 15,590,402.56 | 15,590,402.56 | 100.00 |
| Total | 3,200,328,339.03 | 135,368,433.27 | 4.23 |
| Credit loss provision | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses in the next 12 months | Expected credit losses for the entire duration (No credit impairment occurred) | Expected credit losses for the entire duration (Credit impairment has occurred) | ||
| Balance on January 1st 2021 | 31,592,759.56 | 43,368,646.94 | 41,527,064.36 | 116,488,470.86 |
| On January 1st 2021, the book balance of long-term accounts receivable in the current reporting period | ||||
| Transfer into stage 2 | (31,592,759.56) | 31,592,759.56 | - | - |
| Transfer into stage 3 | - | (15,702,335.71) | 15,702,335.71 | - |
| Provision/(reverse) during the current reporting period | 27,410,017.06 | (8,530,054.65) | - | 18,879,962.41 |
| Balance on June 30th 2021 | 27,410,017.06 | 50,729,016.14 | 57,229,400.07 | 135,368,433.27 |
Hikvision 2021 Half Year ReportNotes to Financial Statements arFor the reporting period from January 1
st 2021 to June 30
th2021
13. Long-term equity investment
Unit: RMB
| The invested entity | Opening Balance | Increase/Decrease in the current reporting period | Closing Balance | Closing balance for impairment provision | |||||||
| Additional Investments | Investment reduction | Investment Profit (Loss) recognized under the equity Method | Adjustment: Other comprehensive income | Other Changes in equity | Declaration of cash dividends or profit distribution | Impairment provision | others | ||||
| 1. Joint venture companies | |||||||||||
| Hangzhou Haikang Intelligent Industrial Equity Investment Fund Partnership (L.P.) | 612,479,371.62 | - | - | (12,551,789.97) | - | - | - | - | - | 599,927,581.65 | - |
| Daishan Hailai Yunzhi Technology Co., Ltd. | 15,253,091.76 | - | - | 641,313.41 | - | - | (999,000.00) | - | - | 14,895,405.17 | - |
| Zhejiang City Digital Technology Co., Ltd. | 11,864,018.37 | - | - | (159,024.43) | - | - | - | - | - | 11,704,993.94 | - |
| Zhejiang Haishi Huayue Digital Technology Co., Ltd. | 9,985,577.32 | - | - | 828,972.15 | - | - | - | - | - | 10,814,549.47 | - |
| Shenzhen Hikvision Urban Service Operation Co., Ltd. | 6,029,569.69 | - | - | (2,392,706.11) | - | - | - | - | - | 3,636,863.58 | - |
| Guangxi Haishi Urban Operation Management Co., Ltd. | 5,296,695.36 | - | - | (2,055,245.77) | - | - | - | - | - | 3,241,449.59 | - |
| Yunnan Yinghai Parking Service Co., Ltd. | 4,841,060.76 | - | - | 8,854.38 | - | - | - | - | - | 4,849,915.14 | - |
| Xuzhou Kangbo Urban Operation Management Service Co., Ltd. | 4,631,286.58 | - | - | (459,987.17) | - | - | - | - | - | 4,171,299.41 | - |
| Subtotal | 670,380,671.46 | - | - | (16,139,613.51) | - | - | (999,000.00) | - | - | 653,242,057.95 | - |
Hikvision 2021 Half Year ReportNotes to Financial Statements arFor the reporting period from January 1
st 2021 to June 30
th2021
| The invested entity | Opening Balance | Increase/Decrease in the current reporting period | Closing Balance | Closing balance for impairment provision | |||||||
| Additional Investments | Investment reduction | Investment Profit (Loss) recognized under the equity Method | Adjustment: Other comprehensive income | Other Changes in equity | Declaration of cash dividends or profit distribution | Impairment provision | others | ||||
| 2. Associated Companies | |||||||||||
| Wuhu Sensor Technology Co., Ltd. | 58,491,264.42 | - | - | 5,507,128.76 | - | - | - | - | - | 63,998,393.18 | - |
| Maxio Technology (Hangzhou) Co., Ltd. | 91,955,638.61 | - | - | 11,326,714.57 | - | - | - | - | - | 103,282,353.18 | - |
| Zhiguang Hailian Big Data Technology Co., Ltd. | 21,253,058.87 | - | - | (540,524.81) | - | - | - | - | - | 20,712,534.06 | - |
| Sanmenxia Xiaoyun Vision Technology Co., Ltd. | 3,671,496.93 | - | - | (934,201.11) | - | - | - | - | - | 2,737,295.82 | - |
| Jiaxin Haishi JiaAn Zhicheng Technology Co., Ltd. | 8,479,131.27 | - | - | (1,061,192.51) | - | - | - | - | - | 7,417,938.76 | - |
| Qinghai Qingtang Big Data Co., Ltd. | 9,795,448.67 | - | - | 20,581.50 | - | - | - | - | - | 9,816,030.17 | - |
| Subtotal | 193,646,038.77 | - | - | 14,318,506.40 | - | - | - | - | - | 207,964,545.17 | - |
| Total | 864,026,710.23 | - | - | (1,821,107.11) | - | - | (999,000.00) | - | - | 861,206,603.12 | - |
st
2021 to June 30
th2021
14. Other non-current financial assets
Unit: RMB
| Invested Entity (Note 1) | Shareholding % | Opening balance | Additional investment during the current reporting period | Investment recovery during the current reporting period | Changes in fair value during the current reporting period | Closing balance |
| CETC Finance Co., Ltd. (Note 2) | 3.83% | 423,435,737.20 | - | - | (14,474,296.26) | 408,961,440.94 |
| Hangzhou Confirmware Technology Co., Ltd. | 9.52% | 31,092,032.62 | - | - | (6,623,948.55) | 24,468,084.07 |
| Zhejiang Tuxun Technology Co.,Ltd. (Zhejiang Tuxun) | 8.13% | 32,222,764.45 | - | - | (2,179,075.03) | 30,043,689.42 |
| Zhengzhou Guokong Smart City Technology Co., Ltd. | 7.00% | 700,000.00 | - | - | - | 700,000.00 |
| Guangxi Jilian Haibao Technical Service Co., Ltd. | 5.10% | 2,884,220.00 | - | - | - | 2,884,220.00 |
| Shenzhen Wanyu Security Service Technology Co., Ltd. | 5.00% | 1,000,000.00 | - | - | - | 1,000,000.00 |
| Nanwang Information Industry Group Co., Ltd. | 0.25% | 604,313.00 | - | - | - | 604,313.00 |
| Total | 491,939,067.27 | - | - | (23,277,319.84) | 468,661,747.43 |
| Items | Building and construction | General-purpose equipment | Special-purpose equipment | Transportation vehicles | Total |
| I. Total original carrying amount | |||||
| 1. Opening balance | 5,100,087,402.39 | 942,058,072.93 | 2,045,680,662.52 | 96,077,396.86 | 8,183,903,534.70 |
| 2. Increase in the current reporting period | 571,684,990.60 | 150,526,825.40 | 74,323,636.44 | 3,179,247.08 | 799,714,699.52 |
| 1) purchase | 19,647,303.10 | 148,863,146.75 | 56,386,090.80 | 3,179,247.08 | 228,075,787.73 |
| 2) transferred from construction in progress | 552,037,687.50 | 1,663,678.65 | 17,937,545.64 | - | 571,638,911.79 |
| 3.Decrease in the current reporting period | 4,004,642.66 | 6,382,897.79 | 37,144,204.94 | 2,933,276.26 | 50,465,021.65 |
| 1) disposal or write-off | 4,004,642.66 | 6,382,897.79 | 37,144,204.94 | 2,933,276.26 | 50,465,021.65 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (704,992.96) | (2,644,292.66) | (1,231,524.73) | (60,110.60) | (4,640,920.95) |
| 5.Closing Balance | 5,667,062,757.37 | 1,083,557,707.88 | 2,081,628,569.29 | 96,263,257.08 | 8,928,512,291.62 |
st 2021 to June 30
th2021
| Items | Building and construction | General-purpose equipment | Special-purpose equipment | Transportation vehicles | Total |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 992,312,042.71 | 368,166,922.57 | 937,726,505.61 | 55,020,864.96 | 2,353,226,335.85 |
| 2. Increase in the current reporting period | 118,417,107.80 | 82,987,945.72 | 153,088,959.47 | 5,823,963.60 | 360,317,976.59 |
| (1) accrual | 118,417,107.80 | 82,987,945.72 | 153,088,959.47 | 5,823,963.60 | 360,317,976.59 |
| 3.Decrease in the current reporting period | 2,221,567.66 | 5,291,282.67 | 31,514,132.13 | 2,567,655.46 | 41,594,637.92 |
| (1) disposal or write- off | 2,221,567.66 | 5,291,282.67 | 31,514,132.13 | 2,567,655.46 | 41,594,637.92 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (135,423.02) | (1,476,565.78) | (406,015.55) | (45,139.50) | (2,063,143.85) |
| 5.Closing balance | 1,108,372,159.83 | 444,387,019.84 | 1,058,895,317.40 | 58,232,033.60 | 2,669,886,530.67 |
| III. Provision for decline in value | |||||
| 1.Opening balance | - | - | - | - | - |
| 2.Increase in the current reporting period | - | - | - | - | - |
| 3. Decrease in the current reporting period | - | - | - | - | - |
| 4.Closing balance | - | - | - | - | - |
| IV. Total book value | |||||
| Closing balance on book value | 4,558,690,597.54 | 639,170,688.04 | 1,022,733,251.89 | 38,031,223.48 | 6,258,625,760.95 |
| Opening balance on book value | 4,107,775,359.68 | 573,891,150.36 | 1,107,954,156.91 | 41,056,531.90 | 5,830,677,198.85 |
| Item | Carrying amount | Reason for certificates of title not granted |
| Office building for branches | 16,054,560.00 | In the process of obtaining the real estate certificates |
| Fuzhou High-tech Zone Innovation Park | 104,644,180.00 | In the process of obtaining the real estate certificates after transferred to fixed assets |
| Total | 120,698,740.00 |
st 2021 to June 30
th2021
16. Construction in progress
16.1 Details of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision | Book value | Carrying amount | Provision | Book value | |
| Chengdu Science and Technology Park Project | 649,653,461.12 | - | 649,653,461.12 | 521,626,793.33 | - | 521,626,793.33 |
| Hangzhou Innovation Industry Park | 362,637,782.43 | - | 362,637,782.43 | 337,821,702.49 | - | 337,821,702.49 |
| Xi’an Science and Technology Park Project | 128,568,833.69 | - | 128,568,833.69 | 12,679,174.93 | - | 12,679,174.93 |
| Shijiazhuang Science and Technology Park Project | 48,583,014.75 | 48,583,014.75 | 2,060,553.46 | 2,060,553.46 | ||
| Chongqing Science and Technology Park Phase II Project | - | - | - | 249,810,250.79 | - | 249,810,250.79 |
| Others | 516,179,307.39 | - | 516,179,307.39 | 301,236,718.72 | - | 301,236,718.72 |
| Total | 1,705,622,399.38 | - | 1,705,622,399.38 | 1,425,235,193.72 | - | 1,425,235,193.72 |
| Item | Budget (RMB 0,000) | Opening balance | Increase in the current reporting period | Transferred to fixed assets during the current reporting period | Effect on conversion of financial statements denominated in foreign currencies | Other Reductions (Note 1) | Closing balance | Amount invested as proportion of budget amount (%) | Construction in Progress (%) | Accumulated capitalized interest and profit/loss on exchange (Note 2) | Including: capitalized interest and profit/loss on exchange for the current reporting period | Capitalization rate for interest in the current reporting period (%) | Source of funds |
| Chengdu Science and Technology Park Project | 196,900.00 | 521,626,793.33 | 128,026,667.79 | - | - | - | 649,653,461.12 | 32.99% | 32.99% | - | - | - | Self- financing |
| Hangzhou Innovation Industry Park | 102,600.00 | 337,821,702.49 | 24,816,079.94 | - | - | - | 362,637,782.43 | 35.34% | 35.34% | 5,113,014.05 | (48,573,001.14) | 0.85% | Special loan |
st 2021 to June 30
th2021
Note 1: Other reductions during the the current reporting period were the completed decoration project that transferred to the long-term deferred expenses.
Note 2: This amount is calculated by interest expense for specific foreign currency borrowings, less interest income for unused borrowing fund and profit/loss on exchange rate difference.
As of June 30
th2021, the Group did not have any sign of impairment of projects under construction; therefore, no provision for impairment loss was booked.
| Item | Budget (RMB 0,000) | Opening balance | Increase in the current reporting period | Transferred to fixed assets during the current reporting period | Effect on conversion of financial statements denominated in foreign currencies | Other Reductions (Note 1) | Closing balance | Amount invested as a proportion of budget amount (%) | Construction in Progress (%) | Accumulated capitalized interest and profit/loss on exchange (Note 2) | Including: capitalized interest and profit/loss on exchange for the current reporting period | Capitalization rate for interest in the current reporting period (%) | Source of funds |
| Xi’an Science and Technology Park project | 227,800.00 | 12,679,174.93 | 115,889,658.76 | - | - | - | 128,568,833.69 | 5.64% | 5.64% | - | - | - | Self- financing |
| Shijiazhuang Science and Technology Park Project | 89,800.00 | 2,060,553.46 | 46,522,461.29 | - | - | - | 48,583,014.75 | 5.41% | 5.41% | - | - | - | Self- financing |
| EZVIZ Industry Park | 79,800.00 | 2,332,067.08 | 41,416,910.43 | - | - | - | 43,748,977.51 | 5.48% | 5.48% | - | - | - | Self- financing |
| Zhengzhou Science and Technology Park Project | 48,500.00 | 13,529,409.53 | 4,800,801.74 | - | - | - | 18,330,211.27 | 3.78% | 3.78% | - | - | - | Self- financing |
| Chongqing Science and Technology Park project- phase 2 | 40,000.00 | 249,810,250.79 | 144,149,199.63 | 393,959,450.42 | - | - | - | 100.00% | 100.00% | - | - | - | Self- financing |
| Others | - | 285,375,242.11 | 349,370,657.32 | 177,679,461.37 | (1,080,606.45) | 1,885,713.00 | 454,100,118.61 | - | - | - | - | - | Self- financing |
| Total | 785,400.00 | 1,425,235,193.72 | 854,992,436.90 | 571,638,911.79 | (1,080,606.45) | 1,885,713.00 | 1,705,622,399.38 | - | - | 5,113,014.05 | (48,573,001.14) |
st
2021 to June 30
th2021
17. Right-of-use assets
Unit:RMB
| Items | Houses and Buildings | General Equipment | Dedicated Equipment | Transportation Facility | Total |
| I. Total original carrying amount | |||||
| 1. Opening balance | 333,243,923.96 | - | 92,164,518.65 | 14,423,291.59 | 439,831,734.20 |
| 2. Increased | 68,151,993.38 | - | - | 3,282,584.49 | 71,434,577.87 |
| (1)New Lease | 68,151,993.38 | - | - | 3,282,584.49 | 71,434,577.87 |
| 3. Decreased | 2,329,019.32 | - | - | - | 2,329,019.32 |
| (1) The lease contract expires or terminates early | 2,329,019.32 | - | - | - | 2,329,019.32 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (3,903,177.22) | - | - | (638,394.71) | (4,541,571.93) |
| 5. Ending balance | 395,163,720.80 | - | 92,164,518.65 | 17,067,481.37 | 504,395,720.82 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | - | - | 46,834,180.90 | - | 46,834,180.90 |
| 2. Increased | 64,816,040.75 | - | 10,761,693.68 | 3,032,484.93 | 78,610,219.36 |
| (1) Provisons | 64,816,040.75 | - | 10,761,693.68 | 3,032,484.93 | 78,610,219.36 |
| 3. Decreased | 397,017.82 | - | - | - | 397,017.82 |
| (1) The lease contract expires or terminates early | 397,017.82 | - | - | - | 397,017.82 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | (354,812.23) | - | - | (63,073.12) | (417,885.35) |
| 5. Ending balance | 64,064,210.70 | - | 57,595,874.58 | 2,969,411.81 | 124,629,497.09 |
| III. Provision for decline in value | |||||
| 1. Opening balance | - | - | - | - | - |
| 2. Increased | - | - | - | - | - |
| 3. Decreased | - | - | - | - | - |
| 4. Ending balance | - | - | - | - | - |
| IV. Total book value | |||||
| 1. Closing balance on book value | 331,099,510.10 | - | 34,568,644.07 | 14,098,069.56 | 379,766,223.73 |
| 2. Opening balance on book value | 333,243,923.96 | - | 45,330,337.75 | 14,423,291.59 | 392,997,553.30 |
st
2021 to June 30
th2021
18. Intangible assets
18.1 Details of Intangible assets
Unit: RMB
| Item | Land use right | Intellectual property right | Application Software | Franchise | Total |
| I. Total original carrying amount | |||||
| 1. Opening balance | 1,224,893,932.49 | 70,044,034.88 | 298,812,867.42 | 13,091,615.51 | 1,606,842,450.30 |
| 2. Increased | 1,049,256.40 | - | 13,400,485.18 | 679,111.39 | 15,128,852.97 |
| (1) Purchase | 1,049,256.40 | - | 13,400,485.18 | 679,111.39 | 15,128,852.97 |
| 3. Decreased | - | - | 885,704.45 | - | 885,704.45 |
| (1)Disposal or write-off | - | - | 885,704.45 | - | 885,704.45 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | - | 1,832.65 | (1,163,339.57) | 1,345.85 | (1,160,161.07) |
| 5. Closing balance | 1,225,943,188.89 | 70,045,867.53 | 310,164,308.58 | 13,772,072.75 | 1,619,925,437.75 |
| II. Total accumulated amortization | |||||
| 1.Opening balance | 76,612,562.29 | 60,718,480.10 | 217,067,323.75 | 1,126,160.47 | 355,524,526.61 |
| 2. Increased | 13,374,944.47 | 2,212,337.53 | 18,566,322.13 | 906,062.01 | 35,059,666.14 |
| (1)Accrual | 13,374,944.47 | 2,212,337.53 | 18,566,322.13 | 906,062.01 | 35,059,666.14 |
| 3. Decreased | - | - | 788,876.70 | - | 788,876.70 |
| (1)Disposal or write-off | - | - | 788,876.70 | - | 788,876.70 |
| 4. Effect on conversion of financial statements denominated in foreign currencies | - | (3,733.05) | (1,141,518.77) | 143.76 | (1,145,108.06) |
| 5. Closing balance | 89,987,506.76 | 62,927,084.58 | 233,703,250.41 | 2,032,366.24 | 388,650,207.99 |
| III. Provision for decline in value | |||||
| 1. Opening balance | - | - | - | - | - |
| 2. Increased | - | - | - | - | - |
| 3. Decreased | - | - | - | - | - |
| 4. Closing balance | - | - | - | - | - |
| IV. Total book value | |||||
| 1. Closing balance on book value | 1,135,955,682.13 | 7,118,782.95 | 76,461,058.17 | 11,739,706.51 | 1,231,275,229.76 |
| 2. Opening balance on book value | 1,148,281,370.20 | 9,325,554.78 | 81,745,543.67 | 11,965,455.04 | 1,251,317,923.69 |
| Item | Carrying value | Reasons for not getting the title certificate |
| Land use right of Nanchang Science and Technology Park | 103,874,856.90 | The land certificate is still in process |
| Total | 103,874,856.90 |
st 2021 to June 30
th2021
19. Goodwill
19.1 Goodwill book value
Unit: RMB
| The name of the investee or the matter that forming a goodwill | Opening balance | Increased | Decreased | Effect on conversion of financial statements denominated in foreign currencies | Closing balance |
| Business combination not involving enterprises under common control | Liquidation & cancellation | ||||
| Secure Holdings Limited (SHL) | 130,320,174.19 | - | - | (1,294,233.98) | 129,025,940.21 |
| HuaAn Baoquan Intelligence and its subsidiaries | 61,322,871.63 | - | - | - | 61,322,871.63 |
| Hangzhou Kuangxin Technology Co., Ltd. | 59,060,454.06 | - | - | - | 59,060,454.06 |
| Hundure Technology (Shanghai) Co., Ltd. | 13,774,405.88 | - | 13,774,405.88 | - | - |
| BK EESTI AKTSIASELTS | 4,826,266.94 | - | - | (203,755.67) | 4,622,511.27 |
| SIA “BK Latvia” | 4,819,569.44 | - | - | (203,472.92) | 4,616,096.52 |
| ZAO Hikvision | 67,349.64 | - | - | - | 67,349.64 |
| Hangzhou Haikang Zhicheng Investment and Development Co., Ltd. | 12,573.42 | - | - | - | 12,573.42 |
| Total | 274,203,665.20 | - | 13,774,405.88 | (1,701,462.57) | 258,727,796.75 |
| Invested unit | Opening Balance | Increased | Amortized | Difference of foreign currency translation | Closing balance |
| Improvement expenditure for leased fixed asset | 108,584,686.85 | 18,066,543.34 | 26,104,715.70 | (594,611.40) | 99,951,903.09 |
| Total | 108,584,686.85 | 18,066,543.34 | 26,104,715.70 | (594,611.40) | 99,951,903.09 |
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Provision for impairment losses of assets | 619,743,698.69 | 165,036,649.43 | 439,119,363.43 | 118,145,320.66 |
| Provision for credit loss | 1,826,388,333.68 | 375,744,721.05 | 1,539,163,635.55 | 317,826,951.61 |
| Payroll payables | 340,995,206.97 | 67,364,166.74 | 340,995,206.97 | 67,364,166.74 |
| Share-based payment | 481,007,150.91 | 76,607,409.18 | 395,569,612.03 | 63,817,274.43 |
| Provisions | 116,834,580.56 | 17,346,673.52 | 125,721,860.51 | 20,746,514.91 |
| Expenditure without invoice | 165,341,805.58 | 34,963,772.08 | 343,485,705.59 | 79,499,747.08 |
| Unrealized profit from inter-group transactions | 1,362,398,463.76 | 204,683,716.45 | 1,332,036,632.93 | 203,654,079.47 |
| Changes in the fair value of derivative financial instruments | 3,342,073.74 | 835,518.44 | 4,862,446.50 | 1,215,611.63 |
| Deferred income | 142,894,727.35 | 22,580,305.74 | 175,339,879.57 | 28,307,816.27 |
| Total | 5,058,946,041.24 | 965,162,932.63 | 4,696,294,343.08 | 900,577,482.80 |
st 2021 to June 30
th2021
21.2 Deferred tax liabilities that are not presented on net off basis
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Difference in accelerated depreciation/amortization of assets | 823,144,399.91 | 153,669,507.40 | 794,946,638.24 | 155,500,598.94 |
| Changes in the fair value of derivative financial instruments | 28,126,415.53 | 7,031,603.88 | 18,487,400.00 | 4,621,850.00 |
| Changes in fair value of other non-current financial assets | 63,748,699.43 | 9,562,304.91 | 87,026,019.27 | 13,053,902.89 |
| Total | 915,019,514.87 | 170,263,416.19 | 900,460,057.51 | 173,176,351.83 |
| Item | Closing balance | Opening balance | ||
| Offset amount at the end of the reporting period | Deferred tax assets or liabilities at the net amount after offset | Offset amount at the beginning of the reporting period | Deferred tax assets or liabilities at the net amount after offset | |
| Deferred tax assets | 80,091,112.94 | 885,071,819.69 | 80,196,527.94 | 820,380,954.86 |
| Deferred tax liabilities | 80,091,112.94 | 90,172,303.25 | 80,196,527.94 | 92,979,823.89 |
| Item | Closing balance | Opening balance |
| Contract assets | 522,238,731.65 | 600,392,481.02 |
| Prepayments for equipment | 146,685,635.87 | 26,838,623.06 |
| Prepayments for acquisition of land | 79,938,875.22 | 79,046,571.00 |
| Prepayments for infrastructure | 16,914,474.29 | 15,233,481.00 |
| Total | 765,777,717.03 | 721,511,156.08 |
| Item | Closing balance | Opening balance |
| Fiduciary loan | 3,142,918,040.93 | 3,999,246,634.59 |
| Total | 3,142,918,040.93 | 3,999,246,634.59 |
| Item | Closing balance | Opening balance |
| Financial liabilities measured at fair value through current profits and losses | 3,651,541.77 | 7,405,771.15 |
| Including: derivative financial liabilities | 3,651,541.77 | 7,405,771.15 |
| total | 3,651,541.77 | 7,405,771.15 |
Hikvision 2021 Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
25. Notes payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance Bill | 1,209,714,255.88 | 1,036,920,229.85 |
| Total | 1,209,714,255.88 | 1,036,920,229.85 |
| Item | Closing balance | Opening balance |
| Payments for goods | 12,304,461,476.16 | 13,461,766,461.74 |
| Payables on equipment | 143,812,271.64 | 132,118,328.45 |
| Total | 12,448,273,747.80 | 13,593,884,790.19 |
| Item | Closing balance | Opening balance |
| Advanced receipts from sales of products | 1,883,864,456.98 | 1,605,290,145.88 |
| Advanced receipts for construction settlement payment | 356,004,365.61 | 401,866,195.59 |
| Advanced receipts from services | 250,806,170.04 | 154,010,329.79 |
| Total | 2,490,674,992.63 | 2,161,166,671.26 |
st
2021 to June 30
th
2021
services are rendered.
28. Payroll payable
28.1 Details of payroll payable
Unit: RMB
| Item | Opening balance | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| 1.Short-term remuneration | 2,858,597,482.49 | 6,449,497,859.69 | 6,545,612,764.54 | 2,762,482,577.64 |
| 2. Termination benefits – defined contribution scheme | 19,188,948.22 | 407,631,094.60 | 364,031,321.69 | 62,788,721.13 |
| Total | 2,877,786,430.71 | 6,857,128,954.29 | 6,909,644,086.23 | 2,825,271,298.77 |
| Item | Opening balance | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| 1.Wages or salaries, bonuses, allowances and subsidies | 2,671,062,392.28 | 5,813,722,297.06 | 5,897,873,744.93 | 2,586,910,944.41 |
| 2.Staff welfare | 14,300.82 | 90,298,417.48 | 90,298,251.48 | 14,466.82 |
| 3.Social insurance contributions | 11,227,541.93 | 244,066,969.48 | 223,057,781.09 | 32,236,730.32 |
| Including: Medical insurance | 10,852,343.07 | 233,971,668.95 | 214,082,443.10 | 30,741,568.92 |
| Injury insurance | 330,255.63 | 6,971,949.60 | 6,246,317.09 | 1,055,888.14 |
| Maternity insurance | 44,943.23 | 3,123,350.93 | 2,729,020.90 | 439,273.26 |
| 4.Housing funds | 146,194.01 | 257,834,706.10 | 257,881,712.21 | 99,187.90 |
| 5.Labor union and education fund | 176,147,053.45 | 43,575,469.57 | 76,501,274.83 | 143,221,248.19 |
| Subtotal | 2,858,597,482.49 | 6,449,497,859.69 | 6,545,612,764.54 | 2,762,482,577.64 |
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1.Basic pension insurance | 18,665,404.09 | 394,163,208.63 | 352,020,520.81 | 60,808,091.91 |
| 2.Unemployment insurance | 523,544.13 | 13,467,885.97 | 12,010,800.88 | 1,980,629.22 |
| Subtotal | 19,188,948.22 | 407,631,094.60 | 364,031,321.69 | 62,788,721.13 |
| Item | Closing balance | Opening balance |
| Enterprise income tax | 1,001,851,547.52 | 1,403,744,369.98 |
| Value-added tax | 365,711,957.54 | 294,728,811.39 |
| City construction and maintenance tax | 24,629,195.29 | 17,924,699.09 |
| Education surcharges | 17,349,795.66 | 7,547,297.38 |
| Local education surcharges | 11,854,439.47 | 5,437,435.12 |
| Others | 209,211,872.68 | 40,675,295.66 |
st
2021 to June 30
th
2021
Item
| Item | Closing balance | Opening balance |
| Total | 1,630,608,808.16 | 1,770,057,908.62 |
| Item | Closing balance | Opening balance |
| Dividend payable | 651,635,862.26 | 205,898,523.84 |
| Other payables | 1,395,750,254.33 | 1,319,154,832.11 |
| Total | 2,047,386,116.59 | 1,525,053,355.95 |
| Item | Closing balance | Opening balance |
| Dividends of incentive restricted shares | 144,401,634.30 | 205,898,523.84 |
| Dividends of non-restricted shares | 507,234,227.96 | - |
| Total | 651,635,862.26 | 205,898,523.84 |
| Item | Closing balance | Opening balance |
| Unexpired commercial acceptance bills that were endorsed (Note (V)-3) | 610,856,089.84 | 482,454,604.99 |
| Guarantee and deposit fees | 385,198,228.33 | 298,869,865.03 |
| Collection and payment on behalf | 201,771,898.24 | 157,485,875.39 |
| Accrued expenses | 130,492,655.46 | 337,678,697.37 |
| Other expense payable | 67,431,382.46 | 42,665,789.33 |
| Total | 1,395,750,254.33 | 1,319,154,832.11 |
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year (Note (V) 33) | 3,342,160,117.94 | 3,486,243,087.91 |
| Lease liabilities due within one year (Note (V), 34) | 174,958,269.90 | 156,420,687.89 |
| Long-term payables due within one year (Note (V) 35) | 3,102,428.95 | 2,134,638.48 |
| Total | 3,520,220,816.79 | 3,644,798,414.28 |
| Item | Closing balance | Opening balance |
| Subscription payment of restricted shares | 511,594,361.52 | 560,959,368.73 |
| Output VAT to be transferred | 236,076,809.87 | 184,752,210.84 |
| Total | 747,671,171.39 | 745,711,579.57 |
st 2021 to June 30
th2021
33. Long-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledged loan (Note 1) | 1,498,890,006.05 | 1,556,927,316.08 |
| Fiduciary loan (Note 2) | 3,564,285,262.97 | 3,700,483,533.13 |
| Other borrowing (Note 3) | 190,000,000.00 | 190,000,000.00 |
| Less：Long-term loans due within one year (Note (V) 31) | 3,342,160,117.94 | 3,486,243,087.91 |
| Total | 1,911,015,151.08 | 1,961,167,761.30 |
st
2021 to June 30
th2021
34. Lease liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Lease liabilities | 374,452,790.68 | 386,475,961.59 |
| Less ：Lease liabilities due within one year (Note (V), 31) | 174,958,269.90 | 156,420,687.89 |
| Total | 199,494,520.78 | 230,055,273.70 |
| Item | Closing balance | Opening balance |
| Purchase goods in installments | 11,491,861.74 | 10,677,104.56 |
| Borrowing | - | 8,000,000.00 |
| Less: Long-term payables due within one year (Note (V), 31) | 3,102,428.95 | 2,134,638.48 |
| Total | 8,389,432.79 | 16,542,466.08 |
| Item | Closing balance | Opening balance |
| Product quality warranty | 159,098,659.69 | 151,443,871.02 |
| Total | 159,098,659.69 | 151,443,871.02 |
| Item | Opening balance | Increase in current reporting period | Decrease in current reporting period | Closing balance | Details |
| Government Subsidies | 190,878,987.69 | 69,654,000.00 | 69,803,069.41 | 190,729,918.28 | Note |
| Total | 190,878,987.69 | 69,654,000.00 | 69,803,069.41 | 190,729,918.28 |
| Liability Items | Opening Balance | Increase in current reporting period | Amounts booked into other income during the current reporting period | Other changes | Closing Balance | Related to assets/related to incomes |
| Chongqing Manufacture Park construction | 76,835,135.44 | - | 34,907,015.44 | - | 41,928,120.00 | Related to assets |
| Other special subsidies | 32,815,600.80 | 11,340,500.00 | 5,455,672.03 | - | 38,700,428.77 | Related to assets |
| Other special subsidies | 81,228,251.45 | 58,313,500.00 | 29,440,381.94 | - | 110,101,369.51 | Related to incomes |
| Subtotal | 190,878,987.69 | 69,654,000.00 | 69,803,069.41 | - | 190,729,918.28 |
st
2021 to June 30
th2021
38. Other non-current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Subscription for restricted stocks | 511,594,361.52 | 560,959,368.74 |
| Total | 511,594,361.52 | 560,959,368.74 |
| Opening balance | Changes for the current reporting period | Closing balance | |||||
| New issue of shares | Bonus issue | Transfer from Capital Reserve | Others (Note) | Subtotal | |||
| 2021.06.30 | |||||||
| Total shares | 9,343,417,190.00 | - | - | -- | (7,611,076.00) | (7,611,076.00) | 9,335,806,114.00 |
| Item | Opening balance | Increase in the current reporting period (Note 1) | Decrease in the current reporting period (Note 2) | Closing balance |
| 2021.06.30 | ||||
| Share premium | 4,747,808,907.38 | - | 120,076,361.59 | 4,627,732,545.79 |
| Other capital reserves | 430,968,554.71 | 124,387,684.27 | - | 555,356,238.98 |
| Total | 5,178,777,462.09 | 124,387,684.27 | 120,076,361.59 | 5,183,088,784.77 |
| Item | Opening Balance | Increase in the current reporting period | Decrease in the current reporting period (Note 1) | Closing balance |
| 2021.06.30 | ||||
| Restricted shares incentive scheme | 1,121,918,737.47 | - | 98,730,014.43 | 1,023,188,723.04 |
| Total | 1,121,918,737.47 | - | 98,730,014.43 | 1,023,188,723.04 |
st
2021 to June 30
th
2021
42. Other comprehensive income
Unit: RMB
| Item | Opening balance | Amounts occurred in the current reporting period | Closing balance | ||||
| The before-income-tax amount incurred during the current reporting period | Less: transfer to current period P/L from previous other comprehensive income | Less: income tax expense | Attributable to the parent company (after tax) | Attributable to minority shareholders (after tax) | |||
| 2021.06.30 | |||||||
| Other incomes that may be reclassified subsequently to profit or loss | (84,993,926.94) | (8,260,441.80) | - | - | (7,233,190.86) | (1,027,250.94) | (92,227,117.80) |
| Included: Effect on conversion of financial statements denominated in foreign currencies | (84,993,926.94) | (8,260,441.80) | - | - | (7,233,190.86) | (1,027,250.94) | (92,227,117.80) |
| Other comprehensive income | (84,993,926.94) | (8,260,441.80) | - | - | (7,233,190.86) | (1,027,250.94) | (92,227,117.80) |
| Item | Opening balance | Increase in the current reporting period | Decrease in the current reporting period | Closing balance |
| 2021.06.30 | ||||
| Statutory surplus reserves (Note) | 4,672,505,348.00 | - | - | 4,672,505,348.00 |
| Total | 4,672,505,348.00 | - | - | 4,672,505,348.00 |
| Item | First half year of 2021 | First half year of 2020 |
| Retained Earnings at the close of the prior reporting period | 35,806,523,826.37 | 28,961,389,145.22 |
| Add: Net profit attributable to the parent company for the current reporting period | 6,481,424,653.39 | 4,623,972,830.87 |
| Subtract: Statutory surplus reserves | - | - |
| Dividends payable on common shares (Note) | 7,458,057,406.90 | 6,541,507,487.20 |
| Retained earnings at the end of the current reporting period | 34,829,891,072.86 | 27,043,854,488.89 |
| Item | First half year of 2021 | First half year of 2020 | ||
| Revenue | Cost | Revenue | Cost | |
| Operating income | 33,662,102,661.75 | 18,023,388,922.41 | 24,068,056,071.82 | 12,100,735,573.06 |
| Other operating income | 239,995,706.35 | 181,806,842.05 | 203,103,171.94 | 92,984,372.32 |
| Total | 33,902,098,368.10 | 18,205,195,764.46 | 24,271,159,243.76 | 12,193,719,945.38 |
st
2021 to June 30
th2021
45.2 Operating business (by business type)
Unit: RMB
| Item | First half year of 2021 | |
| Revenue | Cost | |
| Product sales | 32,693,068,598.93 | 17,565,104,081.49 |
| Construction contract | 411,198,176.84 | 291,842,825.70 |
| Provide services | 557,835,885.98 | 166,442,015.22 |
| Total | 33,662,102,661.75 | 18,023,388,922.41 |
| Item | First half year of 2021 | |
| Revenue | Cost | |
| Recognized at some point | 32,693,068,598.93 | 17,565,104,081.49 |
| Recognition took place within a certain period of time | 969,034,062.82 | 458,284,840.92 |
| Total | 33,662,102,661.75 | 18,023,388,922.41 |
| Item | First half year of 2021 | |
| Revenue | Cost | |
| Products and Services | 27,672,536,087.24 | 14,476,253,747.73 |
| Constructions | 411,198,176.84 | 291,842,825.70 |
| Subtotal | 28,083,734,264.08 | 14,768,096,573.43 |
| Smart home business | 1,871,108,774.85 | 1,172,850,667.99 |
| Robotic business | 1,220,189,435.48 | 642,233,986.43 |
| Other innovative businesses | 2,487,070,187.34 | 1,440,207,694.56 |
| Subtotal | 5,578,368,397.67 | 3,255,292,348.98 |
| Total | 33,662,102,661.75 | 18,023,388,922.41 |
st
2021 to June 30
th
2021
exceeds the performance obligation completed to date, the excess portion will be recognized as contract liabilities. TheGroup presents contract assets and contract liabilities under the same contract on a net basis.
The Group provides customers with operation and maintenance services. Since customers obtain and consume theeconomic benefits generated by the performance of the Group at the same time when the Group performs its obligations,the Group recognizes revenue according to the performance progress by treating them as the obligations within certainperiod.
The customers of the Group pay the Group for the maintenance services by milestone payments in accordance with thecontract. For the portion where the Group has obtained an unconditional right to the payment, it will be recognized asaccounts receivable, while the remaining portion will be recognized as contract assets; where the contract price receivedor receivable by the Group exceeds the performance obligation completed to date, the excess portion will be recognizedas contract liabilities. The Group presents contract assets and contract liabilities under the same contract on a net basis.
The Group provides cloud services including storage service, video service, and telephone service to its customers. Suchservices are performance obligations to be satisfied during a period of time, and revenue is recognized based on theperformance progress over the period in which such services are rendered. As customers have prepaid for cloud servicesat the time of purchase, the Group recognizes the payments for cloud services received at the time of transaction as acontract liability, and recognizes revenue based on the performance progress over the period in which such services arerendered.
Sales rebates to distributors of the Group may be accumulated when they purchase products from the Group, and aredeductible for payments for goods to be purchased in the future. Such sales rebates enable distributors to enjoy discountsin their future purchase of goods, which are not available to the same type of customers. Therefore, the commitment tooffer such discounts to distributors on their future purchase prices is a separate performance obligation. Such commitmentis recognized as a contract liability based on the transaction price allocated on the basis of the fair value of rebates whenthe sales transaction takes place, and is recognized as revenue when distributors use the sales rebates for deduction ofpurchase prices.
The Group provides quality assurance for the sold video surveillance products, smart home products, robotic products andother products and related accessories, as well as the assets constructed. The quality assurance related to the products soldby the Group cannot be purchased separately, and is a guarantee to customers that the products sold meet the establishedstandards, therefore, the Group conducts accounting treatment in accordance with the Accounting Standards for BusinessEnterprises No. 13 - Contingencies, please refer to Note (III), 24 and Note (V), 36 for details.
For sales to end consumers through the online trading platform, a 7-day or 30-day right of return is provided accordingly.At the time of revenue recognition, a return payable is recognized for the goods expected to be returned according to theamount expected to be returned due to the sales return; in addition, a return cost receivable is recognized according to thebalance of the book value of the goods expected to be returned at the time of transfer net of the estimated cost of recoveringthe goods, and carrying over costs according to net amount of book value of the transferred goods at the time of transfernet of the cost of the aforementioned assets. The Group estimates the number of returns at the portfolio level with itsaccumulated historical experience and adopting the expected value method. In view of the stable return rate in previousyears, it is most unlikely that there will be a significant reversal for the accumulated recognized revenue.
Descriptions of allocation to the remaining performance obligations:
As of June 30
th
2021, all the remaining performance obligations are part of the contracts with original expected contractterm not exceeding one year. The Group expects to recognize all of them as revenue within the next year.
st 2021 to June 30
th2021
46. Business Taxes and Surcharges
Unit: RMB
| Items | First half year of 2021 | First half year of 2020 |
| City construction and maintenance tax | 134,355,040.58 | 79,448,007.54 |
| Education surcharges | 58,455,669.70 | 34,694,864.30 |
| Local education surcharges | 38,968,756.10 | 23,124,847.79 |
| Real estate tax | 24,311,814.02 | 8,518,237.11 |
| Stamp duty | 21,686,242.96 | 11,993,613.72 |
| Tax on use of land | 2,495,394.98 | 1,810,901.96 |
| Vehicle and vessel tax | 97,409.94 | 93,490.92 |
| Others | 99,675.87 | 8,388,201.91 |
| Total | 280,470,004.15 | 168,072,165.25 |
| Items | First half year of 2021 | First half year of 2020 |
| Interest expenses | 113,369,214.89 | 117,407,704.24 |
| Less：Interest income | 411,998,029.35 | 306,973,066.18 |
| Interest expense on lease liabilities | 7,517,245.71 | - |
| Foreign exchange losses | 99,472,543.57 | 2,749,318.63 |
| Less﹕Capitalized specific loan interests and foreign exchange differences on specific loan | (48,573,001.14) | 50,688,176.68 |
| Others | 20,541,585.97 | 9,532,013.26 |
| Total | (122,524,438.07) | (227,972,206.73) |
| Items | First half year of 2021 | First half year of 2020 |
| VAT Rebates | 852,085,468.02 | 784,320,169.82 |
| Special subsidies | 212,725,665.41 | 180,572,947.23 |
| Tax relief | 11,236,158.59 | 29,885,277.10 |
| Total | 1,076,047,292.02 | 994,778,394.15 |
| Items | First half year of 2021 | First half year of 2020 |
| Long-term equity investment losses based on equity method | (1,821,107.11) | (8,942,717.69) |
| Investment losses from disposal of subsidiaries and other business units | (14,952,528.43) | - |
| Investment income from other non-current financial assets during the holding period | 115,644,801.97 | 150,000,000.00 |
| Investment income from disposal of held-for-trading financial assets | 70,440,289.29 | 9,162,427.25 |
| Total | 169,311,455.72 | 150,219,709.56 |
| Sources of losses from changes in fair values | First half year of 2021 | First half year of 2020 |
| Held-for-trading financial assets | 9,989,549.68 | 849,343.33 |
| Including: gains on the changes in fair value of derivative financial instruments | 9,989,549.68 | 849,343.33 |
| Losses from changes in fair value of other non-current financial assets | (23,277,319.84) | (13,017,332.26) |
| Held-for-trading financial liabilities | 3,738,240.76 | (8,268,448.03) |
| Including: gains (losses) on the changes in fair value of derivative financial instruments | 3,738,240.76 | (8,268,448.03) |
| Total | (9,549,529.40) | (20,436,436.96) |
st 2021 to June 30
th
2021
51. Credit impairment loss
Unit: RMB
| Items | First half year of 2021 | First half year of 2020 |
| Credit impairment losses of accounts receivable | (302,443,301.79) | (124,133,185.36) |
| Credit impairment reverses (losses) of other receivables | 9,417,803.41 | (10,010,654.15) |
| Credit impairment losses of long-term receivables | (18,879,962.41) | (18,628,630.26) |
| Total | (311,905,460.79) | (152,772,469.77) |
| Items | First half year of 2021 | First half year of 2020 |
| Losses on inventory devaluation | (252,600,965.37) | (165,394,158.33) |
| Contract assets impairment loss | (5,736,007.01) | - |
| Total | (258,336,972.38) | (165,394,158.33) |
| Items | First half year of 2021 | First half year of 2020 | The amount booked into current period non-recurring profits and looses |
| Fines and confiscations | 37,237,863.29 | 21,590,256.57 | 37,237,863.29 |
| Special subsidies | 699,538.62 | 5,094,743.17 | 699,538.62 |
| Others | 4,065,318.99 | 5,036,207.34 | 4,065,318.99 |
| Total | 42,002,720.90 | 31,721,207.08 | 42,002,720.90 |
| Items | First half year of 2021 | First half year of 2020 | The amount booked into current period non-recurring profits and looses |
| Local water conservancy construction fund | 532,409.04 | 572,889.30 | - |
| Others | 18,322,927.68 | 6,805,876.26 | 18,322,927.68 |
| Total | 18,855,336.72 | 7,378,765.56 | 18,322,927.68 |
| Items | First half year of 2021 | First half year of 2020 |
| Income tax for the current reporting period | 1,069,559,057.65 | 1,081,938,656.65 |
| Deferred income tax expenses | (67,498,385.47) | (129,343,124.91) |
| Differences in filing and payment of income tax in previous reporting years | (574,530,306.92) | (43,385.77) |
| Total | 427,530,365.26 | 952,552,145.97 |
st
2021 to June 30
th
2021
56. Notes to consolidated cash flow statement items
56.1 Other cash receipts relating to operating activities
Unit: RMB
| Items | First half year of 2021 | First half year of 2020 |
| Interest income | 411,998,029.35 | 306,973,066.18 |
| Government subsidies | 213,276,134.62 | 211,985,670.32 |
| Others | 485,251,347.13 | 188,964,355.88 |
| Total | 1,110,525,511.10 | 707,923,092.38 |
| Item | First half year of 2021 | First half year of 2020 |
| Advertising and Selling services | 639,292,692.68 | 557,200,285.44 |
| Office expenses and business expenses | 451,237,280.55 | 370,845,812.71 |
| Shipping and transportation expense | 361,571,642.21 | 322,420,666.54 |
| R&D expense | 488,010,595.94 | 457,282,381.38 |
| Travelling expense | 177,869,752.82 | 141,639,591.57 |
| Rental expense | 47,709,562.38 | 101,520,803.75 |
| Others | 744,581,855.86 | 95,397,631.90 |
| Total | 2,910,273,382.44 | 2,046,307,173.29 |
| Item | First half year of 2021 | First half year of 2020 |
| Receipts of financing lease payments | 6,182,818.55 | 14,990,732.87 |
| Total | 6,182,818.55 | 14,990,732.87 |
| Item | First half year of 2021 | First half year of 2020 |
| The consideration paid for the acquisition of minority shareholders' equity | - | 64,290,000.00 |
| Repurchase of restricted shares | 122,644,057.28 | - |
| Repayment of lease liabilities | 84,962,915.50 | - |
| Total | 207,606,972.78 | 64,290,000.00 |
| Supplementary information | First half year of 2021 | First half year of 2020 |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 6,854,875,757.07 | 4,666,871,541.00 |
| Add: Impairment of assets | 258,336,972.38 | 165,394,158.33 |
| Provision for credit losses | 311,905,460.79 | 152,772,469.77 |
| Fixed assets depreciation | 360,317,976.59 | 367,971,970.82 |
| Amortization of intangible assets | 35,059,666.14 | 77,059,953.77 |
st 2021 to June 30
th2021
Supplementary information
| Supplementary information | First half year of 2021 | First half year of 2020 |
| Right-of-use assets depreciation | 78,610,219.36 | - |
| Long-term deferred expenses amortization | 26,104,715.70 | 19,788,072.87 |
| Gains on disposal of fixed assets, intangible assets and other long-term assets | (3,760,896.87) | (21,554.99) |
| Obsolescence losses of fixed assets, intangible assets and other long-term assets | 5,565,939.04 | 1,112,772.90 |
| Losses from changes in fair value | 9,549,529.40 | 20,436,436.96 |
| Financial expenses | 144,968,551.48 | 64,849,445.01 |
| Investment income | (169,311,455.72) | (150,219,709.56) |
| Share-based payment based on equity settlement | 134,108,630.01 | 481,168,915.75 |
| Decrease of restricted funds | 342,602,374.34 | 89,281,783.26 |
| Increase in deferred income tax assets | (64,690,864.83) | (172,723,276.65) |
| Increase (decrease) in deferred income tax liabilities | (2,807,520.64) | 43,380,151.74 |
| Increase in inventories | (3,866,832,886.98) | (107,946,257.22) |
| Increase in operating receivables | (1,752,934,304.33) | (355,309,356.48) |
| Decrease in operating payables | (738,665,021.37) | (5,320,219,156.63) |
| Increase (decrease) in deferred income | (149,069.41) | 26,317,979.92 |
| Net cash flows from operating activities | 1,962,853,772.15 | 69,966,340.57 |
| 2. Significant investing and financing activities not involving cash receipts and payments: | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 27,639,964,119.85 | 21,623,506,957.49 |
| Less: Opening balance of cash | 35,024,837,878.31 | 26,515,668,008.40 |
| Add: Closing balance of cash equivalents | - | - |
| Less: Opening balance of cash equivalents | - | - |
| Net decrease in cash and cash equivalents | (7,384,873,758.46) | (4,892,161,050.91) |
| Item | Closing balance | Opening balance |
| Cash | 27,639,964,119.85 | 35,024,837,878.31 |
| Including: Cash on hand | 750,011.48 | 1,105,047.51 |
| Bank deposit for payment at any time | 27,580,685,600.72 | 34,968,013,389.43 |
| Other monetary capital for payment at any time | 58,528,507.65 | 55,719,441.37 |
| Cash equivalents | - | - |
| Closing balance of cash and cash equivalents | 27,639,964,119.85 | 35,024,837,878.31 |
st
2021 to June 30
th2021
58. Assets with restriction in ownership or use rights
Unit: RMB
| Item | Book value at the end of the current reporting period | Cause of restriction |
| Monetary fund(s) | 92,288,855.62 | Various guarantee deposits and other restricted funds |
| Notes receivable | 610,856,089.84 | Endorsed to suppliers |
| Right-of-use assets | 34,568,644.07 | Sale and leaseback leased right-of-use assets |
| Long-term receivables | 1,812,883,463.06 | Pledged for long-term borrowings |
| Total | 2,550,597,052.59 |
| Items | Balance in foreign currency at the end of the reporting period | Exchange rate for conversion | Balance of RMB converted at the end of the reporting period |
| Monetary funds | |||
| Including: USD | 195,279,784.69 | 6.4601 | 1,261,526,937.09 |
| EUR | 134,796,197.72 | 7.6862 | 1,036,070,534.91 |
| GBP | 12,974,201.91 | 8.9410 | 116,002,339.32 |
| JPY | 563,961,856.34 | 0.0584 | 32,935,372.41 |
| AED | 18,367,690.42 | 1.7580 | 32,290,399.76 |
| RUB | 307,737,703.83 | 0.0888 | 27,327,108.10 |
| HKD | 27,233,714.97 | 0.8321 | 22,661,174.23 |
| AUD | 2,343,767.65 | 4.8528 | 11,373,835.67 |
| PLN | 6,125,795.54 | 1.7009 | 10,419,365.63 |
| KRW | 1,508,183,198.25 | 0.0057 | 8,596,644.23 |
| SGD | 1,448,679.42 | 4.8027 | 6,957,572.65 |
| NZD | 469,170.73 | 4.5153 | 2,118,446.58 |
| ZAR | 8,571.36 | 0.4501 | 3,857.97 |
| TRY | 358.98 | 0.7397 | 265.54 |
| INR | 1,701.73 | 0.0869 | 147.88 |
| Accounts receivable | |||
| Including: EUR | 217,143,356.67 | 7.6862 | 1,669,007,268.00 |
| USD | 108,385,139.92 | 6.4601 | 700,178,842.37 |
| HKD | 37,214,645.30 | 0.8321 | 30,966,306.35 |
| Short-term borrowings | |||
| Including: EUR | 8,217,927.84 | 7.6862 | 63,164,637.00 |
| GBP | 2,009,398.78 | 8.9410 | 17,966,034.49 |
| Accounts payable | |||
| Including: USD | 253,958,760.31 | 6.4601 | 1,640,598,987.48 |
| HKD | 754,452,712.22 | 0.8321 | 627,780,101.84 |
| EUR | 2,039,154.77 | 7.6862 | 15,673,351.39 |
| Long-term borrowings due within one year |
st 2021 to June 30
th2021
Items
| Items | Balance in foreign currency at the end of the reporting period | Exchange rate for conversion | Balance of RMB converted at the end of the reporting period |
| Including: EUR | 402,397,777.78 | 7.6862 | 3,092,909,799.57 |
| Name of overseas subsidiaries | Main overseas operational office | Recording Currency | Basis of selection |
| HDT International Ltd. | Hongkong China | HKD | Selection based on local economic environment |
| Hikvision Europe BV | Netherlands | USD | Selection based on local economic environment |
| Prama Hikvision Indian Private Limited | India | INR | Selection based on local economic environment |
| Hikvision UK Limited | UK | GBP | Selection based on local economic environment |
| Hikvision Italy (S.R.L.) | Italy | EUR | Selection based on local economic environment |
| Hikvision International Co., Limited | Hongkong China | USD | Selection based on local economic environment |
| Hikvision Australia PTY Ltd. | Australia | AUD | Selection based on local economic environment |
| Hikvision Spain, S.L. | Spain | EUR | Selection based on local economic environment |
| Hikvision France SAS | France | EUR | Selection based on local economic environment |
| Hikvision Singapore Pte. Ltd | Singapore | SGD | Selection based on local economic environment |
| Hikvision South Africa (Pty) Ltd. | South Africa | ZAR | Selection based on local economic environment |
| Hikvision FZE | Dubai | USD | Selection based on local economic environment |
| Hikvision Poland Spolka Z ograniczona Odpowiedzialnoscia. | Poland | PLN | Selection based on local economic environment |
| Hikivision do Brasil Comercio de Equipamentos de Seguran?a Ltda. | Brazil | BRL | Selection based on local economic environment |
| Hikvision LLC | Russia | RUB | Selection based on local economic environment |
| EZVIZ Inc. | USA | USD | Selection based on local economic environment |
| Cooperative Hikvision Europe U.A. | Netherlands | USD | Selection based on local economic environment |
| Hikvision Korea Limited | Korea | KRW | Selection based on local economic environment |
| Hikvision Colombia SAS | Columbia | COP | Selection based on local economic environment |
| Hikvision Kazakhstan limited liability partnership | Kazakhstan | KZT | Selection based on local economic environment |
| Pyronix Ltd | UK | GBP | Selection based on local economic environment |
| Microwave Solutions Limited | UK | GBP | Selection based on local economic environment |
| Secure Holdings limited | UK | GBP | Selection based on local economic environment |
| Hikvision Turkey Technology And Security Systems Commerce Corporation | Turkey | TRY | Selection based on local economic environment |
| ZAO Hikvision | Russia | RUB | Selection based on local economic environment |
| Hikvision Hungary Limited | Hungary | HUF | Selection based on local economic environment |
| Hikvision New Zealand Limited | New Zealand | NZD | Selection based on local economic environment |
| Hikvision Czech s.r.o. | Czech | CZK | Selection based on local economic environment |
| Hikvision Deutschland GmbH | Germany | EUR | Selection based on local economic environment |
| Hikvision Kenya (Pty) Ltd | Kenya | KES | Selection based on local economic environment |
| LLC Hikvision Tashkent | Uzbekistan | UZS | Selection based on local economic environment |
| Hikvision (Malaysia) SDN. BHD | Malaysia | MYR | Selection based on local economic environment |
| Hikvision USA,Inc. | USA | USD | Selection based on local economic environment |
| Hikvision Canada INC. | Canada | CAD | Selection based on local economic environment |
| Hikvision Mexico S.A.de C.V. | Mexico | MXN | Selection based on local economic environment |
| Hikvision Panama Commercial S.A. | Panama | USD | Selection based on local economic environment |
| Hikvision Pakistan (SMC-Private) Limited | Pakistan | PKR | Selection based on local economic environment |
| Hikvision Peru Closed Stock Company | Peru | PEN | Selection based on local economic environment |
| Hikvision Central America S.A. | Panama | USD | Selection based on local economic environment |
st
2021 to June 30
th2021
Name of overseas subsidiaries
| Name of overseas subsidiaries | Main overseas operational office | Recording Currency | Basis of selection |
| Hikvision Technology Egypt JSC | Egypt | EGP | Selection based on local economic environment |
| PT. Hikvision Technology Indonesia | Indonesia | IDR | Selection based on local economic environment |
| Hikvision Technologies S.R.L., | Romania | RON | Selection based on local economic environment |
| Hikvision IOT (Thailand) Co.,Ltd. | Thiland | THB | Selection based on local economic environment |
| Hikvision West Africa Limited | Nigeria | NGN | Selection based on local economic environment |
| EZVIZ International Limited | Honkong China | HKD | Selection based on local economic environment |
| Hikvision Azerbaijan Limited Liability | Azerbaijan | AZN | Selection based on local economic environment |
| Hikvision Japan K.K. | Japan | JPY | Selection based on local economic environment |
| Hikvision Argentina S.R.L. | Argentina | ARS | Selection based on local economic environment |
| HIKVISION Morocco LLC | Morocco | MAD | Selection based on local economic environment |
| Hikvision Technology Israel Ltd | Israel | ILS | Selection based on local economic environment |
| EZVIZ Europe B.V. | Netherlands | EUR | Selection based on local economic environment |
| BK Grup? UAB | Lithuania | EUR | Selection based on local economic environment |
| BK EESTI AKTSIASELTS | Estonia | EUR | Selection based on local economic environment |
| SIA "BK Latvia" | Latvia | EUR | Selection based on local economic environment |
| Category | Amount | Financial Report Items | Amount booked in current profit and loss |
| VAT Rebate | 852,085,468.02 | Other Income | 852,085,468.02 |
| Special subsidies | 404,155,122.31 | ||
| Including: other special subsidies | 327,319,986.87 | Deferred income / Other income/ Non-operating income | 178,518,188.59 |
| Chongqing Manufacture Park construction subsidies | 76,835,135.44 | Deferred income / Other income | 34,907,015.44 |
| Tax Reduction | 11,236,158.59 | Other income/ Non-operating income | 11,236,158.59 |
| Total | 1,267,476,748.92 | 1,076,746,830.64 |
st
2021 to June 30
th2021
VI. Changes in consolidation scope
1. Disposal of a subsidiary
1.1 Loss of control of a subsidiary due to a single disposal of investment in the subsidiary
Unit: RMB
| Name of the subsidiary | Equity disposal ratio（%） | Equity disposal method | Point of loss of control | The basis for determining the point of loss of control | The difference between the disposal price and the disposal investment corresponding to the consolidated financial statement level of the subsidiary’s net asset share | Percentage of remaining equity on the date of loss of control | Book value of remaining equity on the date of loss of control | The fair value of the remaining equity on the date of loss of control | Re-measure the gains or losses arising from the remaining equity at fair value | The method and main assumptions for determining the fair value of the remaining equity on the date of loss of control |
| Hangzhou EZVIZ Technology Co., Ltd. (EZVIZ Technology) | 60.00 | Releasing the entrusted management agreement | 2021/3/27 | Transfer of control | 1,178,122.55 | 0.00 | - | - | - | - |
st
2021 to June 30
th2021
EZVIZ Network's losses on disposal of EZVIZ Technology:
Unit: RMB
| Amount | |
| Consideration received for disposal of the subsidiary (Note 1) | 8,000,000.00 |
| Less: net assets disposed | 9,963,537.59 |
| Net losses of the disposal | (1,963,537.59) |
| Cash and cash equivalents received from disposal of the subsidiary | - |
| Less: cash and cash equivalents held by the subsidiary | 7,355,969.42 |
| Net cash received from disposal of the subsidiary | (7,355,969.42) |
| Company Name | Time of establishment | Registered capital | Amount of contribution of the Group | Ratio of contribution (%) |
| Shanghe Smart City Technology Co., Ltd. ("Shanghe Smart City") (Note 1) | April 2021 | RMB 44.0571 mn | RMB 41.8542 mn | 95 |
| Chongqing EZVIZ Electronics Co., Ltd. ("Chongqing EZVIZ) (Note 2) | June 2021 | RMB 100 mn | RMB 60.00 mn | 60 |
| Company Name | Date of equity disposition | Proportion of shareholding (%) |
| Hundure Technology (Shanghai) Co., Ltd. | April 2021 | 100 |
st 2021 to June 30
th
2021
VII. Interest in other entities
1. Equity in subsidiaries
(1) Composition of the corporate group
| Name | Location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| Hangzhou Hikvision System Technology Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | System integration, Technology development | 100.00 | - | Establishment |
| Hangzhou Hikvision Technology Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | manufacture | 100.00 | - | Establishment |
| Hangzhou Hikvision Security Equipment Leasing Services Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Finance lease | 100.00 | - | Establishment |
| Chongqing Hikvision System Technology Co., Ltd. | Chongqing | Chongqing | System integration | 100.00 | - | Establishment |
| Hikvision USA, Inc. | USA | Los Angeles | Sales | 100.00 | - | Establishment |
| HDT International Ltd. | Hong Kong China | Hong Kong China | Sales | 95.00 | 5.00 | Establishment |
| Prama Hikvision Indian Private Limited | India | Mumbai | Sales | 58.00 | - | Business combination not involving enterprises under common control |
| Hikvision Europe B.V. | Europe | Amsterdam | Sales | - | 100.00 | Establishment |
| Hikvision FZE | Dubai | Dubai | Sales | 100.00 | - | Establishment |
| Hikvision Singapore Pte. Ltd | Singapore | Singapore | Sales | 100.00 | - | Establishment |
| Chongqing Hikvision Technology Co., Ltd. | Chongqing | Chongqing | Manufacture | 100.00 | - | Establishment |
| Hangzhou Fuyang Hik Baotai Security Technology Services Co., Ltd. (Note 1) | Hangzhou | Hangzhou, Zhejiang | Construction | - | 51.00 | Establishment |
| Hikvision South Africa (Pty) Co., Ltd. | South Africa | South Africa | Sales | 100.00 | - | Establishment |
| Hikvision Italy S.R.L. | Italy | Milan | Sales | - | 100.00 | Establishment |
| Hikvision do Brasil Comercio de Equipamentos de Seguran?a Ltda. | Brazil | Brazil | Sales | 95.00 | 5.00 | Establishment |
| Hikvision Australia PTY Co., Ltd. | Australia | Australia | Sales | 100.00 | - | Establishment |
| Hikvision International Co., Limited | Hong Kong China | Hong Kong China | Sales | 100.00 | - | Establishment |
| Hikvision France SAS | France | France | Sales | - | 100.00 | Establishment |
| Hikvision Spain,S.L. | Spain | Spain | Sales | - | 100.00 | Establishment |
| Shanghai Goldway Intelligent Transportation System Co., Ltd. | Shanghai | Shanghai | Manufacture | 100.00 | - | Business combination not involving enterprises |
st 2021 to June 30
th2021
Name
| Name | Location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| under common control | ||||||
| ZAO Hikvision | Russia | St. Peterburg | Sales | - | 100.00 | Business combination not involving enterprises under common control |
| Henan Hua’an Baoquan Intelligent Development Co., Ltd. | Zhengzhou | Zhengzhou Henan | Construction | 93.86 | - | Business combination not involving enterprises under common control |
| Henan Hua’an Security Services Co., Ltd. | Zhengzhou | Zhengzhou Henan | Services | - | 84.47 | Business combination not involving enterprises under common control |
| Hundure Technology (Shanghai) Co., Ltd. (Note 2) | Shanghai | Shanghai | Manufacture | 100.00 | - | Business combination not involving enterprises under common control |
| Hikvision UK Limited | UK | UK | Sales | - | 100.00 | Establishment |
| Hikvision Poland Spolka Z Ograniczona Odpowiedzialnoscia | Poland | Poland | Sales | - | 100.00 | Establishment |
| Hangzhou Hikvision Electronics Co., Ltd.（Note 3） | Hangzhou | Hangzhou Zhejiang | Manufacture | 71.30 | - | Establishment |
| Cooperative Hikvision Europe U.A. | Netherlands | Netherlands | Sales | 99.00 | 1.00 | Establishment |
| Hikvision Canada Inc. | Canada | Canada | Sales | 100.00 | - | Establishment |
| Hikvision LLC | Moscow | Moscow | Sales | 100.00 | - | Establishment |
| Hikvision Korea Limited | Korea | Korea | Sales | 100.00 | - | Establishment |
| Hangzhou EZVIZ Network Co., Ltd. (Note 5) | Hangzhou | Hangzhou Zhejiang | Technology development | 60.00 | - | Establishment |
| EZVIZ Inc. | USA | Los Angeles | Sales | - | 60.00 | Establishment |
| Hangzhou Haikang Zhicheng Investment Development Ltd | Hangzhou | Hangzhou Zhejiang | System integration | 80.00 | - | Business combination not involving enterprises under common control |
| Hangzhou Hikrobot Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 60.00 | - | Establishment |
| Hangzhou HikAuto Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 60.00 | - | Establishment |
| Hangzhou Hikvision Communication Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 70.00 | - | Establishment |
| Hangzhou Hikmicro Sensing Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 60.00 | - | Establishment |
| Hikvision Turkey Technology And Security Systems Commerce Corporation | Turkey | Istanbul | Sales | 100.00 | - | Establishment |
st
2021 to June 30
th2021
Name
| Name | Location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| Hikvision Colombia SAS | Columbia | Santa Fe Bogota | Sales | 100.00 | - | Establishment |
| Hikvision Kazakhstan limited liability partnership | Kazakhstan | Astana | Sales | 100.00 | - | Establishment |
| Secure Holding Limited | British | Sheffield | Manufacture | - | 100.00 | Business combination not involving enterprises under common control |
| Pyronix Limited | British | Sheffield | Manufacture | - | 100.00 | Business combination not involving enterprises under common control |
| Microwave Solutions Limited | British | Sheffield | Manufacture | - | 100.00 | Business combination not involving enterprises under common control |
| Hikvision Hungary Limited | Hungary | Hungary | Sales | - | 100.00 | Establishment |
| Hikvision New Zealand Limited | New Zealand | Auckland | Sales | - | 100.00 | Establishment |
| Urumqi HaiShi Xin’An Electronic Technology Co., Ltd. | Urumqi | Urumqi, Xinjiang | Construction | - | 90.00 | Establishment |
| Hangzhou Ximu Intelligent Technology Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Manufacture | - | 60.00 | Business combination involving enterprises under common control |
| LLC Hikvision Tashkent | Uzbekistan | Tashkent | Sales | 100.00 | - | Establishment |
| Hikvision Kenya (Pty) Ltd | Kenya | Kenya | Sales | - | 100.00 | Establishment |
| Hangzhou HikAuto Software Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Technology Development | - | 60.00 | Establishment |
| Hangzhou Hikrobot Intelligent Technology Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Technology Development | - | 60.00 | Establishment |
| Wuhan HikStorage Technology Co., Ltd. | Wuhan | Wuhan Hubei | Technology development | 60.00 | - | Establishment |
| Chengdu Hikvision Digital Technology Co., Ltd. | Chengdu | Chengdu Sichuan | Technology development | 100.00 | - | Establishment |
| MoYuHaiShi Electronic Technology Co., Ltd. | Hetian | Hetian Xinjiang | Construction | - | 85.00 | Establishment |
| Hangzhou EZVIZ Software Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | - | 60.00 | Establishment |
| PiShan HaiShi YongAn Electronic Technology Co., Ltd. | Hetian | Hetian Xinjiang | System integration | - | 90.00 | Establishment |
st
2021 to June 30
th2021
Name
| Name | Location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| Henan Haikang Hua’an BaoQuan Electronics Co., Ltd. | Zhengzhou | Zhengzhou Henan | Construction | 93.86 | - | Establishment |
| Hikvision Czech s.r.o. | Czech | Czech | Sales | - | 100.00 | Establishment |
| Hikvision (Malaysia) SDN. BHD | Malaysia | Malaysia | Sales | - | 100.00 | Establishment |
| Hikvision Deutschland GmbH | Germany | Germany | Sales | - | 100.00 | Establishment |
| Hikvision Xi’an Xueliang Construction Project Management Co., Ltd. | Xi’an | Xi’an Shanxi | Construction | - | 99.00 | Establishment |
| Luo Pu District HaiShi Ding Xin Electronic Technology Co., Ltd. | Hetian | Hetian Xinjiang | System integration | - | 90.00 | Establishment |
| Yu Tian HaiShi Mei Tian Electronic Technology Co., Ltd. | Hetian | Hetian Xinjiang | System integration | - | 98.00 | Establishment |
| Xi’An Hikvision Digital Technology Co., Ltd. | Xi’An | Xi’an Shanxi | Technology development | 100.00 | - | Establishment |
| Wuhan Hikvision Technology Co., Ltd. | Wuhan | Wuhan Hubei | Technology development | 100.00 | - | Establishment |
| Wuhan Hikvision Science and Technology Co., Ltd. | Wuhan | Wuhan Hubei | Sales | 100.00 | - | Establishment |
| Wuhan Hiksafety Technology Co., Ltd. | Wuhan | Wuhan Hubei | Sales | - | 60.00 | Establishment |
| Hangzhou Hikimaging Technology Co., Ltd. | Hangzhou | Hangzhou, Zhejiang | Technology development | 60.00 | - | Establishment |
| Hikvision Mexico S.A.de C.V. | Mexico | Mexico | Sales | - | 100.00 | Establishment |
| Guizhou Hikvision Transportation Big Data Co., Ltd. | Guiyang | Guiyang, Guizhou | Technology development | 55.00 | - | Establishment |
| Xinjiang CET Yihai Information Technology Co., Ltd. | Urumqi | Urumqi, Xinjiang | System integration | 60.00 | - | Establishment |
| Hikvision Panama Commercial S.A | Panama | Panama | Sales | - | 100.00 | Establishment |
| Hikvision Pakistan (SMC-Private) Limited | Pakistan | Pakistan | Sales | - | 100.00 | Establishment |
| Hikvision Peru Closed Stock Company | Peru | Peru | Sales | 95.00 | 5.00 | Establishment |
| Hikvision Technology Israel Co., Ltd. | Israel | Israel | Sales | - | 100.00 | Establishment |
| Nanjing Hikvision Digital Technology Co., Ltd. | Nanjing | Nanjing, Jiangsu | Sales | 100.00 | - | Establishment |
| Shijiazhuang Hikvision Technology Co., Ltd. | Shijiazhuang | Shijiazhuang Hebei | Technology development | 100.00 | - | Establishment |
| Zhengzhou Hikvision Digital Technology Co., Ltd. | Zhengzhou | Zhengzhou Henan | Sales | 100.00 | - | Establishment |
| Hikvision Central America S.A. | Panama | Panama | Sales | - | 100.00 | Establishment |
| Hikvision West Africa Limited | Nigeria | Nigeria | Sales | 94.00 | 6.00 | Establishment |
| Hikvision Technology Egypt JSC | Egypt | Egypt | Sales | - | 100.00 | Establishment |
st 2021 to June 30
th2021
Name
| Name | Location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| Hangzhou EZVIZ Technology Co., Ltd. (Note 4) | Hangzhou | Hangzhou Zhejiang | Sales | - | 60.00 | Business merger under the common control |
| Hangzhou Kuangxin Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 80.00 | - | Business merger not involving enterprises under the common control |
| Hikvision Digital Technology (Shanghai) Co., Ltd. | Shanghai | Shanghai | Technology development, sales | 100.00 | - | Establishment |
| Nanchang Hikvision Digital Technology Co., Ltd. | Nanchang | Nanchang Jiangxi | Technology development | 100.00 | - | Establishment |
| Zhejiang Hiksafety Technology Co., Ltd. | Jiangshan | Jiangshan Zhejiang | Technology development | - | 60.00 | Establishment |
| Zhenping County Haikang Juxin Digital Technology Co., Ltd. | Zhenping | Zhenping Henan | System integration | - | 90.00 | Establishment |
| Hefei Hikvision Digital Technology Co., Ltd. | Hefei | Hefei Anhui | Technology development | 100.00 | - | Establishment |
| Tianjin Hikvision Information Technology Co., Ltd. | Tianjin | Tianjin | Technology development | 100.00 | - | Establishment |
| Fuzhou Hikvision Digital Technology Co., Ltd. | Fuzhou | Fuzhou Fujian | System integration | 100.00 | - | Establishment |
| Anhui Hikvision Urban Operation Service Co., Ltd. | Xuancheng | Xuancheng Anhui | System integration | - | 100.00 | Establishment |
| Ningbo Haikang Parking System Operation Co., Ltd. | Ningbo | Ningbo Zhejiang | Technology development | 70.00 | - | Establishment |
| Guangzhou Hikvision Technology Co., Ltd. | Guangzhou | Guangzhou Guangdong | Technology development | 100.00 | - | Establishment |
| Hangzhou Hikfire Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 60.00 | - | Establishment |
| PT. Hikvision Technology Indonesia | Indonesia | Indonesia | Sales | - | 100.00 | Establishment |
| EZVIZ International Limited | Hongkong | Hongkong China | Sales | - | 60.00 | Establishment |
| Hikvision Technologies S.R.L., | Romania | Romania | Sales | - | 100.00 | Establishment |
| Hikvision Azerbaijan Limited Liability | Azerbaijan | Azerbaijan | Sales | - | 100.00 | Establishment |
| Hikvision IOT (Thailand) CO.,LTD. | Thailand | Thailand | Sales | - | 100.00 | Establishment |
| Hikvision Japan K.K. | Japan | Japan | Sales | - | 100.00 | Establishment |
| Hikvision Argentina S.R.L. | Argentina | Argentina | Sales | 95.00 | 5.00 | Establishment |
| Hangzhou HikStorage Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | - | 60.00 | Establishment |
st 2021 to June 30
th
2021
Name
| Name | Location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition Method | |
| Direct | Indirect | |||||
| Hangzhou Rayin Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | 60.00 | - | Establishment |
| Kunming Hikvision Digital Technology Co., Ltd. | Kunming | Kunming Yunnan | Sales | 100.00 | - | Establishment |
| Hangzhou Microimage Software Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | - | 60.00 | Establishment |
| Hangzhou Microimage Intelligent Technology Co., Ltd. | Hangzhou | Hangzhou Zhejiang | Technology development | - | 60.00 | Establishment |
| Jinan Hikvision Digital Technology Co., Ltd. | Jinan | Jinan Shandong | Sales | 100.00 | - | Establishment |
| Hikvision Morocco LLC | Morocco | Morocco | Sales | - | 100.00 | Establishment |
| EZVIZ Europe B.V. | Netherland | Netherland | Sales | - | 60.00 | Establishment |
| BK Grup? UAB | Lithuania | Lithuania | Sales | - | 100.00 | Business merger not involving enterprises under the common control |
| BK EESTI AKTSIASELTS | Estonia | Estonia | Sales | - | 100.00 | Business merger not involving enterprises under the common control |
| SIA “BK Latvia” | Latvia | Latvia | Sales | - | 100.00 | Business merger not involving enterprises under the common control |
| Shanghe Smart City Technology Co., Ltd. | Ji’nan | Ji’nan | System integration | - | 95.00 | Establishment |
| Chongqing EZVIZ Electronics Co., Ltd. | Chongqing | Chongqing | Manufacture | - | 60.00 | Establishment |
st 2021 to June 30
th2021
EZVIZ Technology and at a rate 1% above the interest rate for loans over five years announced by the People's Bank Of China. EZVIZ Network has the right to unilaterally decide toextend or early terminate the entrusted management relationship. Upon termination of the entrusted management, EZVIZ Network can only handle the matter in one of the following twoways (EZVIZ Network has the right to decide on the choice of these two ways): (I) EZVIZ Technology shall be liquidated, and CETHIK shall only be entitled to recover the actual capitalcontribution and the unpaid capital possession fee payable; (II) The equity of EZVIZ Technology shall be transferred from CETHIK to EZVIZ Network or any third party designated byEZVIZ Network, and the equity acquisition price shall be equal to the actual capital contribution and the unpaid capital possession fee payable. As a result, EZVIZ Network has achievedthe control of EZVIZ Technology. As CETHIK is the controlling shareholder of both the Company and EZVIZ Technology, therefore, this entrusted management of EZVIZ Technologyconstitutes a business combination under the common control.
In 2021, EZVIZ Network intends to terminate the entrusted management of EZVIZ Technology. In March 2021, EZVIZ Network signed the Termination Agreement of the EntrustedManagement Agreement with HIKCET and EZVIZ Technology, agreeing that the Entrusted Management Agreement shall be terminated on March 27
th
2021. After the termination of theEntrusted Management Agreement, EZVIZ Network will no longer exercise the actual operation and management rights over EZVIZ Technology, be responsible for the production,operation and management of EZVIZ Technology and enjoy other rights over EZVIZ Technology as agreed in the Entrusted Management Agreement. The Group ceased to control EZVIZTechnology with effect from March 27, 2021 and therefore ceased to include the operations of EZVIZ Technology in the scope of consolidation of the consolidated financial statements.
Note 5: On June 23
rd2021, the Proposal on the Overall Restructuring of the the Company’s Holding Subsidiary Hangzhou EZVIZ Network Co., Ltd. as Limited Liability Company byShares was deliberated and adopted by the 3
rd Meeting of the Strategy Committee in 2021 of the fifth session of the Board of Directors of the Company. On June 24
th2021, EZVIZNetwork as a whole was restructured and changed to a limited liability company by shares, and its name was changed to Hangzhou EZVIZ Networks Co., Ltd.
2. Equity in joint ventures or associates
(1) Aggregated financial information of insignificant joint-ventures and associates
Unit：RMB
| Closing balance / Amount for the first half of 2021 | Opening balance / Amount for the first half of 2020 | |
| Associates： | ||
| The aggregate carrying amount of investments in associates | 207,964,545.17 | 193,646,038.77 |
| The aggregate amount of the following items calculated based on the Company’s equity share percentage of the associates | ||
| - Net income (loss) | 14,318,506.40 | (11,409,841.26) |
| - Other comprehensive income | - | - |
| --Total comprehensive income (loss) | 14,318,506.40 | (11,409,841.26) |
| Joint Ventures: | ||
| Total investment book value | 653,242,057.95 | 670,380,671.46 |
| The sum of the following items calculated according to the shareholding ratio |
st 2021 to June 30
th
2021
| Closing balance / Amount for the first half of 2021 | Opening balance / Amount for the first half of 2020 | |
| - Net income | (16,139,613.51) | 2,467,123.57 |
| - Other comprehensive income | - | - |
| - Total comprehensive income (loss) | (16,139,613.51) | 2,467,123.57 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
VIII. Risks associated with financial instrument
The Group's principal financial instruments include cash and bank balances, notes receivable, accounts receivable,receivables for financing, other receivables (except for tax refund receivable), other non-current financial assets, long-term receivables, borrowings, notes payable, accounts payable, other payables, part of the other current liabilities, leaseliabilities, long-term payables, derivative financial instruments, etc. Details of these financial instruments are set out inNote (V). Below are the risks associated with such financial instruments and the risk management policies adopted by theGroup to mitigate such risks. The management of the Group manages and monitors such risk exposures to ensure suchrisks are contained within a prescribed scope.
1. Classification of financial instruments
Unit: RMB
| Items | Ending balance of the current reporting period | Ending balance of the prior year (on December 31st 2020) |
| Financial assets： | ||
| Measured at fair value through current profit and loss | ||
| Held –for-trading financial assets | 32,620,061.54 | 22,679,846.77 |
| Other non-current financial assets | 468,661,747.43 | 491,939,067.27 |
| Measured at fair value through other comprehensive income | ||
| Receivables for financing | 1,120,170,492.09 | 1,959,601,195.25 |
| Measured at amortized cost | ||
| Cash and bank balances | 27,732,252,975.47 | 35,459,729,108.27 |
| Notes receivable | 1,125,257,592.27 | 1,303,252,705.19 |
| Accounts receivable | 23,802,312,768.61 | 21,979,380,716.86 |
| Other receivables (except for tax refund receivable) | 802,510,353.72 | 451,428,906.05 |
| Long-term receivables | 1,914,155,006.05 | 2,105,570,004.53 |
| Financial liabilities | ||
| Measured at fair value through current profit and loss | ||
| Held-for-trading financial liabilities | 3,651,541.77 | 7,405,771.15 |
| Measured at amortized cost | ||
| Short-term borrowings | 3,142,918,040.93 | 3,999,246,634.59 |
| Notes payable | 1,209,714,255.88 | 1,036,920,229.85 |
| Accounts payable | 12,448,273,747.80 | 13,593,884,790.19 |
| Other payables | 2,047,386,116.59 | 1,525,053,355.95 |
| Non-current liabilities due within one year | 3,520,220,816.79 | 3,507,680,339.78 |
| Other current liabilities | 511,594,361.52 | 560,959,368.73 |
| Long-term borrowings | 1,911,015,151.08 | 1,961,167,761.30 |
| Lease liabilities | 199,494,520.78 | - |
| Long-term payables | 8,389,432.79 | 39,595,459.35 |
| Other non-current liabilities | 511,594,361.52 | 560,959,368.74 |
Hikvision 2021Half Year Report
Notes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
2. Objectives and policies of risk management
The Group engages in risk management with the aim of achieving an appropriate balance between risk and return, wherethe negative effects of risks against the Group’s operating results are minimized, in order to maximize the benefits ofshareholders and other stakeholders. Based on such objective in risk management, the underlying strategy of the Group’srisk management is to ascertain and analyze all types of risks exposures of the Group, establish appropriate risk tolerancethresholds, carry out risk management procedures and perform risk monitoring on all kinds of risks in a timely and reliablemanner, thus containing risk exposures within a prescribed scope.
2.1 Market risks
2.1.1 Foreign exchange risks
Foreign exchange risks refer to the risk that losses will occur because of changes in foreign exchange rates. The Companyis primarily exposed to risks relating to the currencies such as USD, EUR, HKD and etc. The Group’s subsidiaries in themainland of China whose procurement, sales and financing are denominated in RMB, USD, EUR, and HKD. otherprincipal activities are settled in RMB. The Group’s subsidiaries in Hong Kong and outside China are principally engagedin procurement, sales, financing and other major business activities in local currencies such as USD, EUR, GBP, RUB,and etc.
As of June 30
th
2021, except for monetary items of foreign currencies set out in Note (V) 59, the Group mainly adoptedthe functional currency of each of its subsidiary to present the balance of its assets and liabilities. The foreign exchangerisks arising from assets and liabilities denominated in USD, EUR and HKD (which has been converted into RMB) asfollows may generate significant impact on the operating results of the Group.
Unit: RMB
| Currencies | Assets | Liabilities | ||
| Closing balance | Opening balance | Closing balance | Opening balance | |
| USD | 1,961,705,779.46 | 7,122,984,916.85 | 1,640,598,987.48 | 1,886,490,280.88 |
| EUR | 2,705,077,802.91 | 1,480,297,345.67 | 3,171,747,787.96 | 3,284,414,031.21 |
| HKD | 53,627,480.58 | 14,808,404.16 | 627,780,101.84 | 134,884,213.28 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
Change in foreign exchange rates
| Change in foreign exchange rates | First half year of 2021 | First half year of 2020 | ||
| Effect on profit | Effect on shareholders’ equity | Effect on profit | Effect on shareholders’ equity | |
| 5% appreciation of USD against functional currency | 16,055,339.60 | 16,055,339.60 | 360,638,240.99 | 360,638,240.99 |
| 5% depreciation of USD against functional currency | (16,055,339.60) | (16,055,339.60) | (360,638,240.99) | (360,638,240.99) |
| 5% appreciation of EUR against functional currency | (23,333,499.25) | (23,333,499.25) | (119,861,226.89) | (119,861,226.89) |
| 5% depreciation of EUR against functional currency | 23,333,499.25 | 23,333,499.25 | 119,861,226.89 | 119,861,226.89 |
| 5% appreciation of HKD against functional currency | (28,707,631.06) | (28,707,631.06) | (1,402,595.54) | (1,402,595.54) |
| 5% depreciation of HKD against functional currency | 28,707,631.06 | 28,707,631.06 | 1,402,595.54 | 1,402,595.54 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th
2021
(Note (V). 5), other receivables (Note (V). 7), non-current assets due within one year (Note (V). 10), long-term receivables(Note (V). 12), etc., and derivative financial assets that are not included in the scope of impairment assessment and aremeasured at fair value through current profit or loss (Note (V). 2). As of the balance sheet date, the book value of theGroup’s financial assets represents its maximum credit risk exposure.
In order to reduce credit risk, the Group has formed a team to determine the credit limit, conduct credit approval, andimplement other monitoring procedures to ensure that necessary measures are taken to recover over-due debt. In addition,the Group reviews the recovery of financial assets on each balance sheet date to ensure that sufficient credit loss provisionsare made for relevant financial assets. Therefore, the management of the Group believes that the credit risk exposure ofthe Group has been reduced significantly.
The credit risk on cash and bank balances of the Group is low as they are deposited with banks with high credit ratings.
For accounts receivable, contract assets and long-term receivables, the Group has put in place relevant policies to controlcredit risk exposure. The Group assesses credit quality of customers and sets corresponding credit period based on thecustomer’s financial status, the possibility of obtaining guarantees from third parties, credit history and other factors suchas current market conditions. The Group will regularly monitor the credit history of its customers. For customers withpoor credit history, the Group takes various measures, such as written payment reminders, shorten or cancel the creditperiod, to ensure that the overall credit risk of the Group is maintained in a controllable range. For accounts receivableand contract assets, the Group uses a simplified method, that is, to measure the loss provision based on the amountequivalent to the expected credit loss for the entire duration. For details of the relevant expected credit loss measurement,see (Note (V). 4 & Note (V)-9). For long-term receivables, the Group calculates the expected credit losses based on theexpected credit loss rate in the next 12 months or the entire duration based on the default risk exposure. For details of therelated expected credit loss measurement, see (Note (V). 12).
The Group’s notes receivable and receivables for financing are mainly bank acceptance notes and commercial acceptancenotes with high credit ratings of the counterparties, which the Group does not consider to be subject to significant creditrisk and will not incur any material loss due to default by the counterparties.
For other receivables (except for tax refund receivable), the Group regularly monitors the debtor’s credit history. Fordebtors with poor credit history, the Group takes various measures such as written payment reminders to ensure that theGroup’s overall credit risk is maintained in a controllable range. For other receivables (except for tax refund receivable),the Group calculates the expected credit loss based on the expected credit loss ratio in the next 12 months or the entireduration based on the default risk exposure. For details of the relevant expected credit loss measurement, see (Note (V).
7).
The Group’s risk exposure is distributed among multiple contractors and multiple customers, so the Group has nosignificant credit concentration risk.
2.3. Liquidity risk
The Group maintains and monitors a level of cash and cash equivalents deemed adequate by the management to meet theoperation needs of the Group and to reduce the effect of cash flow movements when managing liquidity risk. Themanagement of the Group monitors the usage of bank borrowings, and ensures compliance with borrowing agreements.
According to the term to maturity of non-discounted and remaining contract obligations, the financial liabilities held bythe Group are analyzed as below:
Unit：RMB
| June 30th 2021 | ||||
| Within one year | 1-5 years | More than five years | Total | |
| Non-derivative financial liabilities | ||||
| Short-term borrowings | 3,194,236,819.88 | - | - | 3,194,236,819.88 |
| Notes payable | 1,209,714,255.88 | - | - | 1,209,714,255.88 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
June 30th2021
| June 30th 2021 | ||||
| Within one year | 1-5 years | More than five years | Total | |
| Accounts payable | 12,448,273,747.80 | - | - | 12,448,273,747.80 |
| Other payables | 2,047,386,116.59 | - | - | 2,047,386,116.59 |
| Other current liabilities | 511,594,361.52 | - | - | 511,594,361.52 |
| Other non-current liabilities | - | 511,594,361.52 | - | 511,594,361.52 |
| Long-term borrowings (including those due within one year) | 3,428,730,462.73 | 1,142,161,021.50 | 1,191,123,170.53 | 5,762,014,654.76 |
| Lease liabilities (including those due within one year) | 187,422,302.07 | 209,661,103.48 | - | 397,083,405.55 |
| Long-term payables (including those due within one year) | 10,129,742.13 | 3,178,350.15 | - | 13,308,092.28 |
| Derivative financial instruments | ||||
| Forward foreign exchange contracts- settled in the gross amount | ||||
| - Cash inflow | 1,571,859,381.19 | - | - | 1,571,859,381.19 |
| - Cash outflow | 1,546,891,010.77 | - | - | 1,546,891,010.77 |
| - Net cash outflow | (24,968,370.42) | - | - | (24,968,370.42) |
| Items | Closing fair value | |||
| Level 1 | Level 2 | Level 3 | Total | |
| I. Continuous fair value measurement | - | 1,149,139,011.86 | 468,661,747.43 | 1,617,800,759.29 |
| (I) Financial assets measured at fair value through profit and loss | ||||
| 1. Held-for-trading Financial Assets | - | 32,620,061.54 | - | 32,620,061.54 |
| -- Derivative financial assets | - | 32,620,061.54 | - | 32,620,061.54 |
| 2. Other non-current financial assets | - | - | 468,661,747.43 | 468,661,747.43 |
| (II) Receivables for financing | - | 1,120,170,492.09 | - | 1,120,170,492.09 |
| Total assets measured continuously at fair value | - | 1,152,790,553.63 | 468,661,747.43 | 1,621,452,301.06 |
| (III) Financial liabilities measured at fair value through profit and loss | ||||
| 1. Held-for-trading Financial Liabilities | - | 3,651,541.77 | - | 3,651,541.77 |
| - Derivative financial liabilities | - | 3,651,541.77 | - | 3,651,541.77 |
| Total liabilities measured continuously at fair value | - | 3,651,541.77 | - | 3,651,541.77 |
| Fair value at June 30th 2021 | Estimation technique | Inputs | |
| Forward Foreign Exchange Contracts (Assets) | 32,620,061.54 | Discounted cash flow approach | Forward exchange rate Discounted rate that reflects the credit risk of counterparty |
| Forward Foreign Exchange Contracts (Liabilities) | (3,651,541.77) | Discounted cash flow approach | Forward exchange rate Discounted rate that reflects the credit risk of counterparty |
| Receivables for financing | 1,120,170,492.09 | Discounted cash flow approach | Discounted rate that reflects the credit risk of counterparty |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
3. The third level of fair value measurement item, the valuation techniques and important parameters used
Unit: RMB
| Items | Fair value at June 30th 2021 | Valuation techniques | Inputs |
| Other non-current financial assets-- Investment in equity instruments of private companies | 468,661,747.43 | Market approach /Income approach | Comparable public companies’ PB (price/book value) ratio within the same industry /Future cash flows, Discount rate |
| Other non-current financial assets | Amount |
| Book value on January 1st 2021 | 491,939,067.27 |
| Increase in the current reporting period | - |
| Decrease in the current reporting period | - |
| Changes in fair value booked into profit and loss during the current reporting period | (23,277,319.84) |
| Book value on June 30th 2021 | 468,661,747.43 |
| Name | Place of registration | Nature of business | Registered capital | Shareholding ratio of parent company in the Company (%) | Percentage of voting rights of parent company to the Company (%) |
| China Electronics Technology HIK Group Co., Ltd. (CETHIK) | Hangzhou, Zhejiang | Industrial investment | RMB 660 million | 38.91 | 38.91 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
3. Information on the joint ventures and associated companies of the CompanyFor details of the associates and joint ventures of the Company, see Note (V) 13.
Other joint ventures and associates that had related party transactions with the Group in the current reporting period, or inthe prior periods and formed balances are as follows:
| Name of the associates or joint ventures | Relationship with the Company |
| Wuhu Sensor-Tech Intelligent Technology Co., Ltd. (Wuhu SensorTech) and its subsidiaries | Associated company |
| Maxio Technology (Hangzhou) Co., Ltd. and its subsidiaries (Maxio Technology) and its subsidiaries | Associated company |
| Zhiguang Hailian Big Data Technology Co., Ltd. (Zhiguang Hailian) and its subsidiaries | Associated company |
| Jiaxin Haishi JiaAn Zhicheng Technology Co., Ltd. (Haishi JiaAn) | Associated company |
| Qinghai Qingtang Big Data Co., Ltd. (Qingtang Big Data) | Associated company |
| Sanmenxia Xiaoyun Vision Technology Co., Ltd. (Xiaoyun Vision Technology) | Associated company |
| Daishan Hailai Yunzhi Technology Co., Ltd. (Daishan Hailai) | Joint venture |
| Guangxi Haishi City Operation Management Co., Ltd. (hereinafter referred to as Guangxi Haishi) and its subsidiaries | Joint venture |
| Shenzhen Hikvision City Service Operation Co., Ltd. (hereinafter referred to as Shenzhen City Service) and its subsidiaries | Joint venture |
| Xuzhou Kangbo City Operation Management Service Co., Ltd. (Xuzhou Kangbo) | Joint venture |
| Yunnan Yinghai Parking Service Co., Ltd. (Yunnan Yinghai) | Joint venture |
| Zhejiang City Digital Technology Co., Ltd. (Zhejiang City Digital Technology) | Joint venture |
| Zhejiang Haishi Huayue Digital Technology Co., Ltd. (Haishi Huayue) | Joint venture |
| Name | Relationship |
| Gong Hongjia | Major shareholder of the company that holds more than 5% of the share of the Company |
| Shanghai Fullhan Microelectronics Co., Ltd. (Shanghai Fullhan Micro) and its subsidiaries | Gong Hongjia or his relative(s) serve(s) as the director(s) |
| Shenzhen Wanyu Security Service Technology Co., Ltd. (Shenzhen Wanyu Security Service) and its subsidiaries | The Group’s senior management serve(s) as director(s) of this company |
| Confirmware Technology(Hangzhou) Co., Ltd. (Hangzhou Confirmware) | The Group’s senior management serve(s) as director(s) of this company (Note 1) |
| Subsidiaries of CETE (Note 2) | Under common control of the ultimate controlling party of the Company |
| Related party | Transaction type | Amount occurred in the first half of 2021 | Amount occurred in the first half of 2020 |
| Subsidiaries of CETE | Purchase of materials and receiving of services | 954,049,928.17 | 323,746,490.02 |
| Shanghai Fullhan Micro and its subsidiaries | Purchase of materials and receiving of services | 435,028,505.73 | 118,628,840.93 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
Related party
| Related party | Transaction type | Amount occurred in the first half of 2021 | Amount occurred in the first half of 2020 |
| Maxio Technology and its subsidiaries | Purchase of materials and receiving of services | 92,764,981.98 | 19,810,600.40 |
| Wuhu SensorTech | Purchase of materials and receiving of services | 53,644,520.05 | 14,756,006.59 |
| Shenzhen City Service and its subsidiaries | Purchase of materials and receiving of services | 31,026.60 | - |
| Zhiguang Hailian and its subsidiaries | Purchase of materials and receiving of services | - | 135,782.26 |
| Total | 1,535,518,962.53 | 477,077,720.20 |
| Related party | Transaction content | Amount occurred in the first half of 2021 | Amount occurred in the first half of 2020 |
| Subsidiaries of CETE | Sales of products and rendering of services | 235,766,661.73 | 101,516,082.64 |
| Zhiguang Hailian and its subsidiaries | Sales of products and rendering of services | 23,079,409.79 | 7,162,512.65 |
| Daishan Hailai | Sales of products and rendering of services | 16,858,777.71 | 10,415,978.76 |
| Zhejiang City Digital Technology | Sales of products and rendering of services | 12,768,503.75 | - |
| Shenzhen City Service and its subsidiaries | Sales of products and rendering of services | 10,977,086.27 | - |
| Haishi JiaAn | Sales of products and rendering of services | 8,098,509.33 | 7,210,092.95 |
| Haishi Huayue | Sales of products and rendering of services | 7,571,255.78 | 654,410.58 |
| Qingtang Big Data | Sales of products and rendering of services | 523,744.57 | 3,008.85 |
| Wuhu Sensor Tech and its subsidiaries | Sales of products and rendering of services | 465,469.78 | 788,831.51 |
| Guangxi Haishi and its subsidiaries | Sales of products and rendering of services | 347,360.64 | - |
| Maxio Technology and its subsidiaries | Sales of products and rendering of services | 108,371.68 | 106,463.72 |
| Xuzhou Kangbo | Sales of products and rendering of services | 11,672.59 | 684,022.41 |
| Hangzhou Confirmware | Sales of products and rendering of services | Not applicable | 297,876.12 |
| Xiaoyun Vision Technology | Sales of products and rendering of services | - | 518,530.99 |
| Wanyu Security and its subsidiaries | Sales of products and rendering of services | - | 198,230.06 |
| Total | 316,576,823.62 | 129,556,041.24 |
| Related Party | Content of related party transaction | Amount occurred in the first half of 2021 | Balance at the end of the current reporting period | Amount occurred in the first half of 2020 | Opening Balance |
| Subsidiaries of CETE (Note) | Deposit into fixed deposits | - | 4,000,000,000.00 | - | 4,000,000,000.00 |
| Total | - | 4,000,000,000.00 | - | 4,000,000,000.00 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th
2021
Note: the fixed deposits that the Group deposited into China Electronic Technology Finance Co., Ltd.
The above transactions are executed at market prices.
(2) Guaranteed by the related party
As required by the project owner, China Electronics Technology Group Co., Ltd. has provided a joint guarantee toresponsibility and duties of construction projects of “Safe Chongqing, Emergency Control System Digital ConstructionProject”, including 41 districts and counties, signed by the Group’s subsidiary Chongqing Hikvision System TechnologyLtd. (Chongqing System) Meanwhile, the Company, Hikvision, provides a counter guarantee to China ElectronicsTechnology Group Co., Ltd.
(3) Other related party transactions
Financial Leasing
Pursuant to resolution of the Company’s 7
th meeting of the fourth session of the Board of Directors held on December 3
rd
2018, the Group’s subsidiary Hangzhou Hikmicro signed a financial leasing contract with a subordinate company of CETC,HikMicro will carry out sale and leaseback business of part of its self-owned equipment with the CETC’s subordinatecompany. The new financing amount in 2019 was RMB 70 million, with lease term of 48 months, and the annual leaserate is 3.8%.
Entrusted management of the interest expenditure of borrowed funds
On April 19
th
2019, CETHIK signed an entrusted management agreement with the holding subsidiary of the Company,Hangzhou EZVIZ Network Ltd. (“EZVIZ Network”) to entrust EZVIZ Network to exercise the actual operatingmanagement right over Hangzhou EZVIZ Technology Ltd. (“EZVIZ Technology”), and be fully responsible for theproduction, operation and management of EZVIZ Technology, and EZVIZ Network shall not charge fixed entrustedmanagement fees from CETHIK while EZVIZ Network is entitled to the 100% distributable profits generated by EZVIZTechnology prior to or after the entrusted management. At the same time, EZVIZ Network shall make a payment toCETHIK as occupying fund fees at the basis of paid-in capital of EZVIZ Technology of RMB 8,000,000.00 and at aninterest rate up by 1% for loans over five years in the Central Bank. In 2021, EZVIZ Network intends to terminate theentrusted management of EZVIZ Technology. In March 2021, EZVIZ Network signed the Termination Agreement of theEntrusted Management Agreement with CETHK and EZVIZ Technology, agreeing that the Entrusted ManagementAgreement shall be terminated on March 27
th
2021. After the termination of the Entrusted Management Agreement, EZVIZNetwork will no longer exercise the actual operation and management rights over EZVIZ Technology, or be responsiblefor the production, operation and management of EZVIZ Technology, or enjoy other rights over EZVIZ Technology asagreed in the Entrusted Management Agreement. The Group ceased to control EZVIZ Technology since March 27
th2021and therefore ceased to include the operations of EZVIZ Technology in the scope of consolidation of the consolidatedfinancial statements. The interest expenses on the above-mentioned capital possession incurred in the current reportingperiod amounts to RMB 131,659.87.
6. Receivables from related parties and payables to related parties
(1) Receivables from related parties
Unit: RMB
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Accounts receivable | Subsidiaries of CETE | 807,312,606.88 | 282,285,697.99 | 694,163,118.90 | 108,859,842.53 |
| Accounts receivable | Haishi JiaAn | 38,934,270.11 | 2,379,088.95 | 29,762,113.04 | 975,776.51 |
| Accounts receivable | Daishan Hailai | 26,482,758.72 | 1,104,331.04 | 16,387,257.40 | 194,920.07 |
| Accounts receivable | Zhiguang Hailian and its subsidiaries | 19,309,417.97 | 805,360.02 | 9,436,662.00 | 111,434.71 |
| Accounts receivable | Zhejiang City Digital Technology | 15,838,908.55 | 660,482.49 | 12,427,421.59 | 561,604.39 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
Item
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Accounts receivable | Xiaoyun Vision Technology | 9,437,647.51 | 2,332,836.52 | 10,929,211.22 | 412,855.37 |
| Accounts receivable | Haishi Huayue | 7,892,207.73 | 329,105.06 | 2,112,591.44 | 42,509.22 |
| Accounts receivable | Shenzhen City Service and its subsidiaries | 3,617,345.50 | 150,843.31 | - | - |
| Accounts receivable | Qingtang Big Data | 981,086.50 | 40,911.31 | 660,000.00 | 29,832.00 |
| Accounts receivable | Wuhu Sensor Tech and its subsidiaries | 821,865.40 | 9,564.48 | 823,165.40 | 37,207.08 |
| Accounts receivable | Maxio Technology and its subsidiaries | 25,553.08 | 1,065.56 | 45,667.50 | 538.88 |
| Accounts receivable | Xuzhou Kangbo | - | - | 786,702.90 | 35,558.97 |
| Accounts receivable | Hangzhou Confirmware | Not applicable | Not applicable | 83,150.00 | 981.17 |
| Total | 930,653,667.95 | 290,099,286.73 | 777,617,061.39 | 111,263,060.90 | |
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Notes receivable | Subsidiaries of CETE (Note 1) | 59,647,280.05 | - | 78,876,284.35 | - |
| Notes receivable | Zhiguang Hailian and its subsidiaries (Note 2) | 5,300,000.00 | - | 1,120,000.00 | - |
| Notes receivable | Zhejiang City Digital Technology | 3,744,385.00 | - | - | - |
| Notes receivable | Haishi JiaAn | 700,000.00 | - | 9,147,466.00 | - |
| Total | 69,391,665.05 | - | 89,143,750.35 | - | |
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Other receivables | Subsidiaries of CETE | 407,459.00 | 12,987.04 | 132,459.00 | 1,563.02 |
| Other receivables | Shenzhen City Service and its subsidiaries | 140,000.00 | 1,526.00 | 140,000.00 | 1,652.00 |
| Other receivables | Wuhu Sensor Tech and its subsidiaries | 55,150.31 | 620.02 | - | - |
| Other receivables | Haishi Huayue | - | - | 279,452.11 | 3,297.53 |
| Total | 602,609.31 | 15,133.06 | 551,911.11 | 6,512.55 | |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
Unit: RMB
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Long-term receivables (including those due within one year) | Subsidiaries of CETE | 72,400,514.95 | 2,957,165.61 | 73,512,305.64 | 2,015,923.07 |
| Long-term receivables (including those due within one year) | Yunnan Yinghai | 21,682,324.62 | 243,674.77 | 21,444,096.16 | 253,040.33 |
| Long-term receivables (including those due within one year) | Shenzhen City Service and its subsidiaries | 6,596,792.86 | 90,764.07 | - | - |
| Long-term receivables (including those due within one year) | Xuzhou Kangbo | 1,541,554.20 | 16,901.90 | 1,581,135.63 | 29,277.25 |
| Long-term receivables | Xiaoyun Vision Technology | 2,295.00 | 25.02 | 2,295.00 | 103.73 |
| Total | 102,223,481.63 | 3,308,531.37 | 96,539,832.43 | 2,298,344.38 | |
| Item | Related Party | Closing balance | Opening balance | ||
| Carrying balance | Credit loss provision | Carrying balance | Credit loss provision | ||
| Prepayments | Subsidiaries of CETE | 9,445,570.82 | - | 4,339,675.60 | - |
| Prepayments | Wuhu Sensor Tech and its subsidiaries | 677,070.05 | - | - | - |
| Total | 10,122,640.87 | - | 4,339,675.60 | - | |
| Item | Related Party | Closing balance | Opening balance |
| Accounts payable | Subsidiaries of CETE | 429,754,644.57 | 360,026,227.41 |
| Accounts payable | Shanghai Fullhan Micro and its subsidiaries | 325,836,826.73 | 117,676,674.67 |
| Accounts payable | Maxio Technology and its subsidiaries | 21,596,194.44 | 545,124.36 |
| Accounts payable | Wuhu Sensor Tech and its subsidiaries | 2,526,478.80 | 6,286,164.42 |
| Total | 779,714,144.54 | 484,534,190.86 |
| Item | Related Party | Closing balance | Opening balance |
| Notes Payable | Shanghai Fullhan Micro and its subsidiaries | 25,421,749.08 | 3,648,820.00 |
| Notes Payable | Subsidiaries of CETE | 6,421,083.48 | 17,301,547.82 |
| Total | 31,842,832.56 | 20,950,367.82 |
| Item | Related Party | Closing balance | Opening balance |
| Contract liabilities | Subsidiaries of CETE | 4,668,876.96 | 10,507,934.92 |
| Contract liabilities | Maxio Technology and its subsidiaries | 872,640.00 | - |
| Contract liabilities | Xuzhou kangbo | 438,321.27 | 201,887.56 |
| Contract liabilities | Zhiguang Hailian and its | 8,168.00 | 57,630.00 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th
2021
Item
| Item | Related Party | Closing balance | Opening balance |
| subsidiaries | |||
| Contract liabilities | Daishan Hailai | - | 688.00 |
| Total | 5,988,006.23 | 10,768,140.48 |
| Item | Related Party | Closing balance | Opening balance |
| Other payables | Subsidiaries of CETE | 53,983,406.39 | 47,056,334.07 |
| Other payables | Shanghai Fullhan Micro and its subsidiaries | 200,000.00 | 100,000.00 |
| Other payables | Wuhu Sensor Tech and its subsidiaries | 52,040.00 | - |
| Other payables | Zhejiang City Digital Technology | 10,000.00 | - |
| Other payables | Zhiguang Hailian and its subsidiaries | 2,000.00 | - |
| Total | 54,247,446.39 | 47,156,334.07 |
| Item | Related Party | Closing balance | Opening balance |
| Long-term payables (including those due within one year) | Subsidiaries of CETE | - | 8,000,000.00 |
| Total | - | 8,000,000.00 |
| Item | Related Party | Closing balance | Opening balance |
| Lease liabilities (including those due within one year) | Subsidiaries of CETE | 32,031,556.07 | 41,213,376.81 |
| Total | 32,031,556.07 | 41,213,376.81 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
Each batch of restricted shares shall not be unlocked unless fulfilling, each time, by the Company its unlock performancecriteria (including net asset yield and operating income growth rate), and by grantees’ individual performance criteriasimultaneously. Where, during any year of the unlocking period, any one or more unlock criteria for the Company orindividuals is or are not fulfilled, such portion of subject shares shall be cancelled, and no grantees shall be entitled tomake another application for unlocking those subject shares in the future years. The cancelled restricted shares will berepurchased by the Company based on the grant price.
On December 23
rd
2016, after consideration and approval by the general meeting, the Company granted 52,326,858restricted shares to grantees at a grant price of RMB 12.63 per share (“2016 Share Incentive Scheme”). The Lock-upPeriod of the Subject Shares shall last for a period of 24 months commencing on the grant date, during which the SubjectShares granted to grantees under the scheme shall be subject to lock-up and shall not be transferable. The Unlocking Periodshall be the 24 to 60 months following the grant of restricted shares (including Lock-up Period), during which granteesmay, subject to unlocking conditions stipulated by the scheme being satisfied, apply for unlocking in 3 tranches: the firstunlocking period shall be the 24 to 36 months following the grant date and the number of shares to be unlocked shall be40% of the aggregate number of the Subject Shares granted; the second unlocking period shall be the 36 to 48 monthsfollowing the grant date and the number of shares to be unlocked shall be 30% of the aggregate number of the SubjectShares granted; the third unlocking period shall be the 48 to 60 months following the grant date and the number of sharesto be unlocked shall be 30% of the aggregate number of the Subject Shares granted. As of December 31
st
2020, all restrictedshares awarded in 2016 have been closed.
On December 20
th 2018, authorized by the 2
ndextraordinary general meeting of 2018 and reviewed by the board ofdirectors, the Company granted 121,195,458 restricted shares to grantees at a grant price of RMB 16.98 per share (“2018Share Incentive Scheme”). The Lock-up Period of the Subject Shares shall last for a period of 24 months commencing onthe grant date, during which the Subject Shares granted to grantees under the scheme shall be subject to lock-up and arenot transferable. The Unlocking Period shall be the 24 to 60 months following the grant of restricted shares (includingLock-up Period), during which grantees may, subject to unlocking conditions stipulated by the scheme being satisfied,apply for unlocking in 3 tranches: the first unlocking period shall be the 24 to 36 months following the grant date and thenumber of shares to be unlocked shall be 40% of the aggregate number of the Subject Shares granted; the second unlockingperiod shall be the 36 to 48 months following the grant date and the number of shares to be unlocked shall be 30% of theaggregate number of the Subject Shares granted; the third unlocking period shall be the 48 to 60 months following thegrant date and the number of shares to be unlocked shall be 30% of the aggregate number of the Subject Shares granted.The Company has completed the equity registration work in January 2019.
The 2018 share incentive performance evaluation indicators were revised at the 2019 annual general meeting convenedon May 15
th2020 by approval of the Proposal on Revision to the Company’s Performance Evaluation Indicators for the2018 Restricted Share Incentive Scheme. The historical comparison value of the compounded operating income growthrate and the benchmark companies’ comparison value over the same period will be used as alternative evaluation indicators,that is, if either of the two indicators were satisfied, the Company’s performance evaluation indicator for the currentunlocking period is considered to be satisfied. The particulars of the revision are set out as follows: the performanceevaluation indicators set out in the Company’s 2018 Restricted Share Incentive Scheme (Revision to the Draft) that “thecompounded operating income growth rate at the year before the time of unlocking is no less than 20% and no less than
thpercentiles level of growth rate of the benchmark companies at the same period as compared to those at the year beforethe time of grant” was revised to be that “the compounded operating income growth rate at the year before the time ofunlocking is no less than 20% or no less than 75
thpercentiles level of growth rate of benchmark companies at the sameperiod as compared to those at the year before the time of grant”.
Unit: share
| 2016 Share Incentive Scheme | First half year of 2021 | 2020 |
| Total of equity instruments outstanding at the beginning of the reporting period | - | 21,974,740 |
| Total of equity instruments granted during the current reporting period | - | - |
| Total of equity instruments vested during the current reporting period | - | 21,204,645 |
| Total of equity instruments forfeited during the current reporting period (Note) | - | 770,095 |
| Total of equity instruments outstanding at the end of the reporting period | - | - |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
2016 Share Incentive Scheme
| 2016 Share Incentive Scheme | First half year of 2021 | 2020 |
| The exercise price (ex-rights) of the outstanding Share-based payments of the Company at the end of the reporting period and the remaining period of the contract | - | - |
| 2018 Share Incentive Scheme | First half year of 2021 | 2020 |
| Total of equity instruments outstanding at the beginning of the reporting period | 68,762,683 | 121,195,458 |
| Total of equity instruments granted (share dividend) during the current reporting period | - | - |
| Total of equity instruments vested during the current reporting period | - | 45,591,794 |
| Total of equity instruments forfeited during the current reporting period | - | 6,840,981 |
| Total of equity instruments outstanding at the end of the reporting period | 68,762,683 | 68,762,683 |
| The exercise price (ex-rights) of the outstanding Share-based payments of the Company at the end of the reporting period and the remaining period of the contract | RMB 16.98/share & 30 months | RMB 16.98/share & 36 months |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
Hikvision, Co-Investment Staff and Hikvision Labor Union executed the Supplemental Agreement to the EntrustedInvestment Agreement (hereafter referred to as “Supplemental Agreement”) in December 2020. On December 25
th2020,Hikvision convened the 20
th meeting of the 4
thsession of the Board to consider and approve the Proposal on Revision toManagement Measures for Core Staff Co-Investment in Innovative Businesses. The new version of Management Measuresfor Core Staff Co-Investment in Innovative Businesses (hereafter referred to as “Management Measures (New Version)”)has added the authentic right for equity shares of co-investment plan held by staff and equity shares of innovative businesssubsidiaries indirectly held by them, specified the processing measures of investment equity shares held by staff after theylose the qualification or are cancelled to be qualified for co-investment, and added the systems of management committee,and etc.
On December 31
st
2020, co-investment plan execution and management committee approved the ImplementationProvisions for Management Measures for Core Staff Co-Investment in Innovative Businesses (hereafter referred to as“Provisions (New Version)”). Pursuant to the Management Measures (New Version) and Provisions (New Version), theLock-up Period in respect of plan A’s equity shares with the authentic right shall last for a period of a full-five years duringwhich the staff has served for the Company or its subsidiaries; the Lock-up Period in respect of plan B’s equity with theauthentic right shall last for a period of a full-five years during which the staff has served for the corresponding innovativebusiness subsidiary or its subsidiaries.
The Co-Investment Platform grants Co-Investment Staff additional equity annually. The Group determines whether share-based payment shall be constituted based on the fair value of equity instruments newly obtained by the Group’s staff inCo-Investment Platform on each granting date. During the current reporting period, the Group recognized share-basedpayment of RMB 34,331,085.41 in aggregate based on the fair value of services obtained by the Group.
2. Information of the share-based payment through equity settlements
Restrictive Share Incentive Sheme
Unit: RMB
| 2016 Share Incentive Scheme | 2018 Share Incentive Scheme | |
| Method of determine the fair value of equity instruments at the grant date | Determined based on stock price at the grant date and the costs of restricted shares during Lock-up Period | Determined based on stock price at the grant date and the costs of restricted shares during Lock-up Period |
| Recognition basis of the number of the equity instruments qualified for vesting | Determined based on the results estimation of each vesting period | Determined based on the results estimation of each vesting period |
| Reasons of the significant difference between the estimates of the current reporting period with that of the prior year | None | None |
| Accumulative amount of share-based payment through equity settlement and further included in the capital reserve | 345,213,163.42 | 952,525,929.29 |
| Total amount of the expenses recognized according to share-based payment through equity settlement in the current reporting period | - | 99,777,544.60 |
| Share Incentive Scheme of Staff Co-Investment in Innovative Businesses | |
| Method of determining the fair value of equity instruments at the grant date | Evaluated and determined based on income method at the grant date |
| Recognition basis of the number of the equity instruments qualified for vesting | Estimated and determined based on the performance result conditions of each vesting period |
| Accumulative amount of share-based payment through equity settlement and further included in the capital reserve | 141,218,467.27 |
| Total amount of the expenses recognized according to share-based payment through equity settlement in the current reporting period | 34,331,085.41 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st 2021 to June 30
th2021
th2021, accumulative amount of share-based payment through equity settlement of RMB 45,355,945.94 was includedin the equity of minority shareholders.
3. There is no share-based payment through cash settlements
4. There is no termination of share-based payment or modification or termination of equity incentive plan for co-investment in innovative businesses during the current reporting period.
XII. Commitments and contingencies
1. Significant commitments
(1) Capital commitments
Unit: RMB’000
| Closing balance | Opening balance | |
| Contracted but not yet recognized in financial statements | ||
| - Commitment on construction of long-term assets | 9,363,845 | 9,573,577 |
| - Commitment on external investments | 42,400 | 42,400 |
| Total | 9,406,245 | 9,615,977 |
| Item | First half year of 2021 | First half year of 2020 |
| External revenue generated in domestic area | 24,434,618,189.74 | 16,728,998,825.16 |
| External revenue generated in overseas area | 9,467,480,178.36 | 7,542,160,418.60 |
| Total | 33,902,098,368.10 | 24,271,159,243.76 |
| Item (Note) | On June 30th 2021 | On January 1st 2021 |
| Non-current assets in domestic area | 10,030,658,958.45 | 9,366,029,699.84 |
| Non-current assets in overseas area | 669,088,072.24 | 683,828,015.60 |
Hikvision 2021Half Year ReportNotes to Financial StatementsFor the reporting period from January 1
st
2021 to June 30
th2021
Total
| Total | 10,699,747,030.69 | 10,049,857,715.44 |
st 2021 to June 30
th2021
XV. Notes to major items of financial statements of the parent company
1. Accounts receivable
1.1 Disclosure by age
Unit: RMB
| Aging | Closing Balance | ||
| Accounts receivable | Credit loss provision | Proportion (%) | |
| Within credit period | 10,044,845,328.59 | 12,667,712.11 | 0.13 |
| Within 1 year after exceeding credit period | 13,440,134,969.21 | 80,836,756.57 | 0.60 |
| 1-2 years after exceeding credit period | 476,157,367.58 | 93,789,656.21 | 19.70 |
| 2-3 years after exceeding credit period | 193,983,415.33 | 79,184,030.14 | 40.82 |
| 3-4 years after exceeding credit period | 63,882,997.89 | 44,622,937.33 | 69.85 |
| Over 4 years after exceeding credit period | 98,478,012.10 | 98,478,012.10 | 100.00 |
| Subtotal | 24,317,482,090.70 | 409,579,104.46 | 1.68 |
| Category | Closing balance | Opening balance | ||||||||
| Carrying balance | Credit loss provision | Book value | Carrying balance | Credit loss provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage (%) | Amount | Amount | Percentage (%) | Amount | Percentage (%) | Amount | |
| Provision for credit loss on a single basis | - | - | - | - | - | - | - | - | - | - |
| Provision for credit loss by portfolios | 24,317,482,090.70 | 100.00 | 409,579,104.46 | 1.68 | 23,907,902,986.24 | 24,550,291,739.99 | 100.00 | 356,899,560.63 | 1.45 | 24,193,392,179.36 |
| Total | 24,317,482,090.70 | 100.00 | 409,579,104.46 | 1.68 | 23,907,902,986.24 | 24,550,291,739.99 | 100.00 | 356,899,560.63 | 1.45 | 24,193,392,179.36 |
st
2021 to June 30
th
2021
Accounts receivable provision for credit loss by portfolios
Unit: RMB
| Customer | Closing balance | ||
| Carrying balance | Credit loss provision | Proportion (%) | |
| Subsidiaries’ customers | 20,381,978,651.77 | - | - |
| Portfolio A | 2,853,418.50 | 269,130.60 | 9.43 |
| Portfolio B | 3,932,446,443.30 | 409,106,396.73 | 10.40 |
| Portfolio C | 203,577.13 | 203,577.13 | 100.00 |
| Total | 24,317,482,090.70 | 409,579,104.46 | 1.68 |
st 2021 to June 30
th2021
1.4 Top five debtors based on corresponding closing balance of accounts receivable
Unit: RMB
| Name of the Party | Relationship with the Company | Book value balance of accounts receivable | Closing balance for credit loss provision | Proportion (%) of the total balance of accounts receivable at the end of the current reporting period |
| Subsidiary A | Subsidiary | 20,310,799,871.11 | - | 83.52 |
| CETC’s subsidiary company A | Related party | 107,188,293.34 | 12,278,929.18 | 0.44 |
| Third party J | Third party | 94,685,424.77 | 3,616,529.85 | 0.39 |
| Third party C | Third party | 81,027,333.17 | 2,474,020.60 | 0.33 |
| Third party K | Third party | 60,110,711.53 | 2,506,616.67 | 0.25 |
| Total | 20,653,811,633.92 | 20,876,096.30 | 84.93 |
| Category | Closing balance | Opening Balance |
| Dividends receivable | 22,910,404.14 | 22,910,404.14 |
| Other receivables | 1,175,810,730.65 | 703,792,729.51 |
| Total | 1,198,721,134.79 | 726,703,133.65 |
| Investees | Closing balance | Opening Balance |
| Subsidiaries of CETE | 22,910,404.14 | 22,910,404.14 |
| Total | 22,910,404.14 | 22,910,404.14 |
st
2021 to June 30
th2021
2.3 other receivables
(1) Other receivables by aging
Unit: RMB
| Item | Closing Balance | ||
| Other receivables | Credit loss provision | Proportion (%) | |
| Within contract period | 1,155,646,315.54 | 1,161,268.09 | 0.10 |
| Within 1 year | 16,083,095.83 | 670,698.87 | 4.17 |
| 1-2 years | 1,179,608.56 | 228,661.66 | 19.38 |
| 2-3 years | 4,459,430.84 | 1,820,339.67 | 40.82 |
| 3-4 years | 7,285,860.94 | 5,005,353.87 | 68.70 |
| Over 4 years | 3,965,059.03 | 3,922,317.93 | 98.92 |
| Subtotal | 1,188,619,370.74 | 12,808,640.09 | 1.08 |
| Nature | Closing balance | Opening balance |
| Payments by related parties within the Group | 746,108,383.58 | 454,474,087.76 |
| Temporary payments for receivables | 378,394,848.41 | 219,103,746.42 |
| Guarantee deposit | 58,923,847.65 | 47,835,041.47 |
| Others | 5,192,291.10 | 3,797,396.93 |
| Total | 1,188,619,370.74 | 725,210,272.58 |
st
2021 to June 30
th2021
2.5 Top 5 debtors of other receivables in terms of closing balance
Unit：RMB
| The name of entity | Relationship with the Company | Nature | Closing balance | Aging | Percentage to total other receivables (%) | Closing balance for credit loss provision |
| Subsidiary B | Subsidiary | Internal Payment | 317,627,502.35 | Within contract period | 26.72 | - |
| Subsidiary C | Subsidiary | Internal Payment | 78,815,021.00 | Within contract period | 6.63 | - |
| Subsidiary D | Subsidiary | Internal Payment | 50,142,126.67 | Within contract period | 4.22 | - |
| Subsidiary E | Subsidiary | Internal Payment | 45,372,931.99 | Within contract period | 3.82 | - |
| Subsidiary F | Subsidiary | Internal Payment | 44,491,239.07 | Within contract period | 3.74 | - |
| Total | 536,448,821.08 | 45.13 | - |
st 2021 to June 30
th2021
3. Long-term equity investment
Unit: RMB
| Item | Closing Balance | Opening Balance | ||||
| Carrying Balance | Provisions | Book Value | Carrying Balance | Provisions | Book Value | |
| Investment in subsidiaries | 6,110,445,091.30 | - | 6,110,445,091.30 | 5,912,831,208.01 | - | 5,912,831,208.01 |
| Inestments in associated enterprises and joint ventures | 809,743,560.46 | - | 809,743,560.46 | 814,542,245.96 | - | 814,542,245.96 |
| Total | 6,920,188,651.76 | - | 6,920,188,651.76 | 6,727,373,453.97 | - | 6,727,373,453.97 |
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Blance of impairment loss provision at the end of the current reporting period |
| Hangzhou Hikvision System Technology Co., Ltd. | 848,272,492.62 | 8,641,258.60 | - | 856,913,751.22 | - | - |
| Hangzhou Hikvision Security Equipment Leasing Services Co., Ltd. | 200,000,000.00 | - | - | 200,000,000.00 | - | - |
| Shanghai Goldway Intelligent Transportation System Co., Ltd. | 23,000,000.00 | - | - | 23,000,000.00 | - | - |
| Chongqing Hikvision System Technology Co., Ltd. | 700,000,000.00 | - | - | 700,000,000.00 | - | - |
| Hundure Technology (Shanghai) Co., Ltd. | 37,247,790.28 | - | 37,247,790.28 | - | - | - |
| Hangzhou EZVIZ Network Co., Ltd. | 61,742,747.98 | 1,262,275.86 | - | 63,005,023.84 | - | - |
| Hangzhou Haikang Zhicheng Investment and Development Co., | 24,000,000.00 | - | - | 24,000,000.00 | - | - |
st
2021 to June 30
th
2021
Name of investee
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Blance of impairment loss provision at the end of the current reporting period |
| Ltd. | ||||||
| Hangzhou Hikrobot Technology Co., Ltd. | 138,957,632.99 | 2,264,319.14 | - | 141,221,952.13 | - | - |
| Hangzhou HikAuto Technology Co., Ltd. | 186,488,555.60 | 525,422.22 | - | 187,013,977.82 | - | - |
| Hangzhou Hikvision Communication Technology Co., Ltd. | 7,000,000.00 | - | - | 7,000,000.00 | - | - |
| Hangzhou Hikmicro Sensing Technology Co., Ltd. | 182,201,437.54 | 256,834.42 | - | 182,458,271.96 | - | - |
| HDT International Ltd. | 87,786.14 | - | - | 87,786.14 | - | - |
| Prama Hikvision Indian Private Limited | 1,585,696.80 | - | - | 1,585,696.80 | - | - |
| Hikvision International Co., Limited | 79,423.52 | - | - | 79,423.52 | - | - |
| Hikvision Australia Pty Ltd. | 2,866,850.00 | - | - | 2,866,850.00 | - | - |
| Hikvision Singapore Pte. Ltd. | 1,900,590.00 | - | - | 1,900,590.00 | - | - |
| Hikvision South Africa (Pty) Ltd. | 1,578,650.00 | - | - | 1,578,650.00 | - | - |
| Hikvision Dubai FZE | 1,870,351.40 | - | - | 1,870,351.40 | - | - |
| Hikvision Brazil Participacoes Ltda. | 4,579,750.50 | - | - | 4,579,750.50 | - | - |
| Hikvision Limited Liability Company | 647,249.19 | - | - | 647,249.19 | - | - |
| Co?peratief Hikvision Europe U.A. | 65,485.53 | - | - | 65,485.53 | - | - |
| Hikvision Korea Limited | 1,535,850.00 | - | - | 1,535,850.00 | - | - |
| Hikvision Colombia SAS | 1,337,440.00 | - | - | 1,337,440.00 | - | - |
st
2021 to June 30
th2021
Name of investee
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Blance of impairment loss provision at the end of the current reporting period |
| Hikvision Kazakhstan limited liability partnership | 4,758.69 | - | - | 4,758.69 | - | - |
| Hikvision Turkey Technology And Security Systems Commerce Corporation | 1,148,115.83 | - | - | 1,148,115.83 | - | - |
| Chongqing Hikvision Technology Co., Ltd. | 102,318,598.74 | 270,503.22 | - | 102,589,101.96 | - | - |
| Hikvision USA, Inc. | 1,546,160.00 | - | - | 1,546,160.00 | - | - |
| Hikvision Canada, Inc. | 994,442.54 | - | - | 994,442.54 | - | - |
| Henan Hua’An Bao Quan Intelligent Development Co., Ltd. | 98,334,200.00 | - | - | 98,334,200.00 | - | - |
| Henan Haikang Hua’An Bao Quan Electronics Co., Ltd. | 33,940,800.00 | - | - | 33,940,800.00 | - | - |
| Hangzhou Hikvision Technology Co., Ltd. | 1,066,917,232.70 | 4,809,775.59 | - | 1,071,727,008.29 | - | - |
| Hangzhou Hikvision Electronics Co., Ltd. | 411,410,425.15 | 1,463,492.82 | - | 412,873,917.97 | - | - |
| Wuhan HikStorage Technology Co., Ltd. | 60,869,464.15 | - | - | 60,869,464.15 | - | - |
| Chengdu Hikvision Digital Technology Co., Ltd. | 540,086,104.32 | 96,562.79 | - | 540,182,667.11 | - | - |
| Hangzhou HikAuto Software Co., Ltd. | 14,536,174.60 | 1,364,269.52 | - | 15,900,444.12 | - | - |
| Hangzhou Haikang Intelligent Technology Co., Ltd. | 8,689,143.96 | 1,061,396.50 | - | 9,750,540.46 | - | - |
| Hangzhou EZVIZ Software Co., Ltd. | 35,084,155.82 | 3,326,480.96 | - | 38,410,636.78 | - | - |
| LLC Hikvision Tashkent | 833,014.00 | - | - | 833,014.00 | - | - |
| Xi’An Hikvision Digital Technology Co., Ltd. | 85,000,000.00 | 115,000,000.00 | - | 200,000,000.00 | - | - |
st 2021 to June 30
th
2021
Name of investee
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Blance of impairment loss provision at the end of the current reporting period |
| Wuhan Hikvision Technology Co., Ltd. | 12,600,000.00 | - | - | 12,600,000.00 | - | - |
| Wuhan Hikvision Science and Technology Co., Ltd. | 150,250,000.00 | - | - | 150,250,000.00 | - | - |
| Hangzhou Hikimaging Technology Co., Ltd. | 50,948,433.82 | 343,984.00 | - | 51,292,417.82 | - | - |
| Guizhou Haikang Transportation Big Data Co., Ltd. | 22,000,000.00 | - | - | 22,000,000.00 | - | - |
| Xinjiang CET Yihai Information Technology Co., Ltd. | 24,000,000.00 | - | - | 24,000,000.00 | - | - |
| Nanjing Hikvision Digital Technology Co., Ltd. | 80,000,000.00 | - | - | 80,000,000.00 | - | - |
| Hangzhou Kuangxin Technology Co., Ltd. | 112,000,000.00 | - | - | 112,000,000.00 | - | - |
| Zhengzhou Hikvision Digital Technology Co., Ltd. | 65,000,000.00 | 15,000,000.00 | - | 80,000,000.00 | - | - |
| Nanchang Hikvision Digital Technology Co., Ltd. | 80,000,000.00 | - | - | 80,000,000.00 | - | - |
| Hikvision Digital Technology (Shanghai) Co., Ltd. | 80,000,000.00 | - | - | 80,000,000.00 | - | - |
| Hefei Hikvision Digital Technology Co., Ltd. | 35,000,000.00 | - | - | 35,000,000.00 | - | - |
| Tianjin Hikvision Information Technology Co., Ltd. | 50,348,846.40 | 311,770.88 | - | 50,660,617.28 | - | - |
| Ningbo Hikvision Parking System Operation Co., Ltd. | 35,000,000.00 | - | - | 35,000,000.00 | - | - |
| Hikvision Peru Closed Stock Company | 1,598,042.50 | - | - | 1,598,042.50 | - | - |
| Hangzhou HikStorage Technology Co., Ltd. | 2,843,875.79 | 433,223.10 | - | 3,277,098.89 | - | - |
| Shijiazhuang Hikvision Technology Co., Ltd. | 45,000,000.00 | 5,404,525.03 | - | 50,404,525.03 | - | - |
| Zhejiang Haikang Fire Protection and Control Co., Ltd. | 84,004.82 | 36,218.00 | - | 120,222.82 | - | - |
st 2021 to June 30
th2021
Name of investee
| Name of investee | Opening balance | Increase during the current reporting period | Decrease during the current reporting period | Closing balance | Write-off of impairment provision during the current reporting period | Blance of impairment loss provision at the end of the current reporting period |
| Hikvision Argentina S.R.L | 1,793,559.15 | - | - | 1,793,559.15 | - | - |
| Fuzhou Hikvision Digital Technology Co., Ltd. | 50,814,676.49 | 242,991.50 | - | 51,057,667.99 | - | - |
| Hangzhou Hikfire Technology Co., Ltd. | 61,871,362.21 | 534,041.46 | - | 62,405,403.67 | - | - |
| Hangzhou Rayin Technology Co., Ltd. | 60,702,536.80 | 212,153.88 | - | 60,914,690.68 | - | - |
| Hangzhou Microimage Software Co., Ltd. | 2,090,633.38 | 930,785.30 | - | 3,021,418.68 | - | - |
| Kunming Hikvision Digital Technology Co., Ltd. | 126,666.06 | 50,107,696.34 | - | 50,234,362.40 | - | - |
| Jinan Hikvision Digital Technology Co., Ltd. | - | 20,929,479.32 | - | 20,929,479.32 | - | - |
| Hanghou Hikmicro Intelligent Technology Co., Ltd. | - | 32,213.12 | - | 32,213.12 | - | - |
| Total | 5,912,831,208.01 | 234,861,673.57 | 37,247,790.28 | 6,110,445,091.30 | - | - |
st 2021 to June 30
th2021
3.2 Investments in associated enterprises and joint ventures
Unit：RMB
| Name of investee | Opening balance | Increase/Decrease during the current reporting period | Closing Balance | Blance of impairment loss provision at the end of the current reporting period | ||||||
| Additional Investments | Reduced Investments | Investment income (losses) recognized under the equity method | Other comprehensive income adjustment | Declared cash dividends or profit distribution | Provision for impairment | Others | ||||
| 1.Joint Ventures | ||||||||||
| Haikang Intelligent Fund | 612,479,371.62 | - | - | (12,551,789.97) | - | - | - | - | 599,927,581.65 | - |
| Daishan Hailai | 15,253,091.76 | - | - | 641,313.41 | - | (999,000.00) | - | - | 14,895,405.17 | - |
| Haishi Huayue | 9,985,577.32 | - | - | 828,972.15 | - | - | - | - | 10,814,549.47 | - |
| Xuzhou Kangbo | 4,631,286.58 | - | - | (459,987.17) | - | - | - | - | 4,171,299.41 | - |
| Shenzhen City Service | 6,029,569.69 | - | - | (2,392,706.11) | - | - | - | - | 3,636,863.58 | - |
| Yunnan Yinghai | 4,841,060.76 | - | - | 8,854.38 | - | - | - | - | 4,849,915.14 | - |
st
2021 to June 30
th2021
Name ofinvestee
| Name of investee | Opening balance | Increase/Decrease during the current reporting period | Closing Balance | Blance of impairment loss provision at the end of the current reporting period | ||||||
| Additional Investments | Reduced Investments | Investment income (losses) recognized under the equity method | Other comprehensive income adjustment | Declared cash dividends or profit distribution | Provision for impairment | Others | ||||
| Zhejiang City Digital Technology | 11,864,018.37 | - | - | (159,024.43) | - | - | - | - | 11,704,993.94 | - |
| Guangxi Haishi | 5,296,695.36 | - | - | (2,055,245.77) | - | - | - | - | 3,241,449.59 | - |
| Subtotal | 670,380,671.46 | - | - | (16,139,613.51) | - | (999,000.00) | - | - | 653,242,057.95 | - |
| 2.Associated Enterprises | ||||||||||
| Wuhu Sensor Tech | 58,491,264.42 | - | - | 5,507,128.76 | - | - | - | - | 63,998,393.18 | - |
| Maxio Technology | 54,621,802.54 | - | - | 7,352,742.56 | - | - | - | - | 61,974,545.10 | - |
| Zhiguang Hailian | 21,253,058.87 | - | - | (540,524.81) | - | - | - | - | 20,712,534.06 | - |
| Qingtang Big Data | 9,795,448.67 | - | - | 20,581.50 | - | - | - | - | 9,816,030.17 | - |
st
2021 to June 30
th2021
Name ofinvestee
| Name of investee | Opening balance | Increase/Decrease during the current reporting period | Closing Balance | Blance of impairment loss provision at the end of the current reporting period | ||||||
| Additional Investments | Reduced Investments | Investment income (losses) recognized under the equity method | Other comprehensive income adjustment | Declared cash dividends or profit distribution | Provision for impairment | Others | ||||
| Subtotal | 144,161,574.50 | - | - | 12,339,928.01 | - | - | - | - | 156,501,502.51 | - |
| Total | 814,542,245.96 | - | - | (3,799,685.50) | - | (999,000.00) | - | - | 809,743,560.46 | - |
st
2021 to June 30
th2021
4. Operating income and operating cost
Unit：RMB
| Item | First half year of 2021 | First half year of 2020 | ||
| Income | Cost | Income | Cost | |
| Operating income | 11,407,122,363.03 | 2,425,620,927.40 | 10,618,881,901.13 | 2,861,919,283.95 |
| Other operating income | 1,510,604,022.70 | 83,678,648.34 | 965,386,184.10 | 60,087,713.53 |
| Total | 12,917,726,385.73 | 2,509,299,575.74 | 11,584,268,085.23 | 2,922,006,997.48 |
| Item | First half year of 2021 | First half year of 2020 |
| Long-term equity investment income (losses) calculated by cost method | 3,500,000.00 | (2,550,000.00) |
| Long-term equity investment losses measured by equity method | (3,799,685.50) | (3,628,950.89) |
| Investment losses from disposal of asset group | (3,387,647.37) | - |
| Investment income of other non-current financial assets during the holding period | 115,644,801.97 | 150,000,000.00 |
| Proceeds from the disposal of asset groups | - | 48,884,954.09 |
| Total | 111,957,469.10 | 192,706,003.20 |
| Item | Amount | Description |
| Profit or loss from disposal of non-current assets | (1,805,042.17) | / |
| The government subsidies included in the current profits and losses (excluding the government subsidy closely related to regular course of business of the Company and government subsidy based on standard quota or quantitative continuous enjoyment according to the state industrial policy) | 224,341,379.44 | / |
| In addition to the Company's normal business related to the effective hedging business, gains and losses on changes in fair value arising from holding derivative financial assets, derivative financial liabilities, other non-current financial assets, and investment gains from the disposal of the above-mentioned financial assets/financial liabilities and receivables financing | 45,938,231.46 | / |
| Other non-operating income and expense except the items mentioned above | 28,546,193.64 | / |
| Impact of income tax | (12,489,507.02) | / |
| The impact of minority equity | (24,583,229.94) | / |
| Total | 259,948,025.41 | / |
st
2021 to June 30
th2021
2. Return on net assets and earnings per share
The return on net assets and earnings per share have been prepared by Hangzhou Hikvision Digital Technology Co.,Ltd. in accordance with the Information Disclosure and Presentation Rules for Companies Making Public Offeringof Securities No. 9 – Calculation and Disclosure of Return on Net Assets and Earnings per Share (Revised in 2010)issued by China Securities Regulatory Commission.
Unit：RMB
| Profit for the reporting period | Weighted average return on net assets (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | 11.62% | 0.695 | 0.695 |
| Net profit excluding non-recurring items of profit or loss attributable to ordinary shareholders of the Company | 11.15% | 0.667 | 0.667 |
Hikvision 2021 Half Year Report
Section XI Documents Available for Reference
1. The financial report was signed by the Company's legal representative.
2. The financial report was signed and sealed by the person in charge of the Company, the person incharge of accounting work and person in charge of accounting organization.
3. Original copy of all the Company's documents and announcements were published on thenewspapers designated by CSRC within the reporting period.
The above documents are completely placed at the Company's board of directors’ office.
Hikvision 2021 Half Year Report
Section XII Other Disclosure Information
I. Other major social security issuesWhether there is any other major social security issues for the listed compay and its subsidiaries
□Yes √No □Not applicable
Whether the company was administratively punished during the reporting period
□Yes √No □Not applicable
II. Reception of activities including research, communication and interviews during the report period
√ Applicable □ Inapplicable
| Time of reception | Location of reception | Method of reception | Type of reception object | Reception object | The main content of the discussion and the information provided | Index of basic situation of the research |
| December 22nd 2020 to January 11th 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 106 investors including China Asset Management-Zhang Fan, etc. | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From December 22rd 2020 to January 11th 2021 |
| January 12th 2021 to January 29th 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 138 investors including Huachuang Securities-Meng Can, etc. | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From January 12th 2021 to January 29th 2021 |
| February 1st 2021 to March 2nd 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 56 investors including Haitong self-operated -Wang Jing, etc. | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From February 1st 2021 to March 2nd 2021 |
| March 3rd 2021 to March 17th 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 145 investors including Orient Securities-Kuai Jian, etc. | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From March 3rd 2021 to March 17th 2021 |
| April 17th 2021 | Headquarters meeting room of the Company | Performance result conference call | Institutional investors and individual investors | 928 investors including E Fund-Ni Chunyao etc. | The Company's operating conditions in 2020 and the first quarter of 2021 | CNINF, Investor Relations Activity Record: April 17th 2021 |
| April 18th 2021 to April 30th 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 220 investors including Ping An Fund-Zhu Chunyu etc. | The Company's operating conditions and future prospects | CNINF, Investor Relations Activity Record: From April 18th 2021 to April 30th 2021 |
| May 10th 2021 to May 21st | Headquarters meeting room of | Site Research and telephone | Institutional investors | 95 investors including Boshi Fund-Chen | The Company's operating conditions | CNINF, Investor Relations Activity Record: |
Hikvision 2021 Half Year Report
| Time of reception | Location of reception | Method of reception | Type of reception object | Reception object | The main content of the discussion and the information provided | Index of basic situation of the research |
| 2021 | the Company | communication | Pengyang etc. | and future prospects | From May 10th 2021 to May 21st 2021 | |
| May 24th 2021 June 11th 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 79 investors including Dongzheng Asset Management-Zhang Mingyu etc. | The Company's operating conditions and future prospects | Investor Relations Activity Record: From May 24th 2021 June 11th 2021 |
| June 15th 2021 to June 25th 2021 | Headquarters meeting room of the Company | Site Research and telephone communication | Institutional investors | 39 investors including Shen Wan Hongyuan Asset Management-Qin Qing etc. | The Company's operating conditions and future prospects | Investor Relations Activity Record: From June 15th 2021 to June 25th 2021 |