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立讯精密:2021年年度报告(英文版)

公告原文类别 2022-05-11 查看全文

Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare Precision Industry Co. Ltd.Annual Report 2021

April 2022This document is a translated version of the Chinese version Annual Report 2021 of Luxshare Precision Industry Co.Ltd.(“《立讯精密 2021年年度报告》”)and the published Annual Report 2021 of Luxshare Precision Industry Co.Ltd.in the Chinese version shall prevail. The

complete published Chinese Annual Report 2021 of Luxshare Precision Industry Co.Ltd. may be obtained at www.cninfo.com.cn.

1Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section I Important Note Table of Contents and Definitions

The Board of Directors the Board of Supervisors directors supervisors and executives

of the Company hereby warrant that the information contained in this Annual Report is true

accurate and complete and this Annual Report is free from any misrepresentation misleading

statement or material omission and agree to assume joint and several liability for this Annual

Report.WANG Laichun Principal of the Company CFO WU Tiansong and Chief Accountant

CHEN Huiyong hereby represent that the financial statements contained in this Annual

Report are true accurate and complete.All directors of the Company attended the meeting of the Board of Directors reviewing

this Report.The relevant risks facing the Company are set out in “Section III Management’sDiscussion and Analysis - XI. Prospects for future development of the Company”.According to the profit distribution proposal approved by the Board of Directors the

Company will distribute a cash dividend of RMB1.10 (inclusive of tax) per 10 shares to all

shareholders on the basis of 7084301477 shares and will not distribute any bonus shares or

transfer any capital reserve to the share capital for the reporting period.

2Luxshare Precision Industry Co. Ltd. Annual Report 2021

Table of Contents

Section I Important Note Table of Contents and Def... 2

Section II Company Profile and Financial Highlight... 7

Section III Management’s Discussion and Analysis ... 11

Section IV Corporate Governance .................... 51

Section V Environment and Social Responsibilities .. 75

Section VI Significant Events ...................... 85

Section VII Changes in shares and shareholders .... 105

Section VIII Preference Shares .................... 115

Section IX Bonds .................................. 116

Section X Financial Report ........................ 129

3Luxshare Precision Industry Co. Ltd. Annual Report 2021

List of References

1. Financial statements signed and chopped by the principal CFO and Chief Accountant of the Company;

2. Original of the auditor’s report stamped with the seal of the accounting firm and signed and chopped by the certified public

accountants;

3. Originals of all documents of the Company publicly disclosed on the website for information disclosure designated by the

China Securities Regulatory Commission during the reporting period and related announcements; and

4. Other references.

4Luxshare Precision Industry Co. Ltd. Annual Report 2021

Definitions

Terms Definition

We/us the Company or

means Luxshare Precision Industry Co. Ltd.Luxshare-ICT

Luxshare Limited means Luxshare Limited founder and controlling shareholder of Luxshare-ICT.ICT-Lanto means ICT-Lanto Limited.Luxshare Precision means Luxshare Precision Limited.Luxshare Jiangsu means Luxshare Precision Industry (Jiangsu) Co. Ltd.Luxshare Shanxi means Shanxi Luxshare Precision Industry Co. Ltd.Luxshare Dongguan means Dongguan Luxshare Precision Industry Co. Ltd.Luxshare Suzhou means Luxshare Precision Industry (Suzhou) Co. Ltd.Luxshare Chuzhou means Luxshare Precision Industry (Chuzhou) Co. Ltd.Luxshare Kunshan means Kunshan Luxshare Precision Industry Co. Ltd.Luxshare Baoding means Luxshare Precision Industry (Baoding) Co. Ltd.Luxshare Xuancheng means Xuancheng Luxshare Precision Industry Co. Ltd.Luxshare Yancheng means Yancheng Luxshare Precision Industry Co. Ltd.Luxshare Enshi means Luxshare Precision Industry (Enshi) Co. Ltd.Luxshare Vietnam means Luxshare-ICT (Vietnam) Limited.Luxshare Van Trung means Luxshare-ICT (Van Trung) Company Limited.Luxshare Nghe An means Luxshare-ICT (Nghe An) Limited.Luxshare Electroacoustic means Shenzhen Luxshare Electroacoustic Technology Co. Ltd.Luxshare Smart Manufacturing means Luxshare Smart Manufacturing (Zhejiang) Co. Ltd.Luxshare-Merry means Guangdong Luxshare-Merry Electronics Co. Ltd.ASAP Jiangxi means ASAP Technology (Jiangxi) Co. Ltd.Xiexun Jiangxi means Xiexun Electronic (Ji’an) Co. Ltd.Smart Manufacturing Jiangxi means Jiangxi Luxshare Smart Manufacturing Co. Ltd.Lanto Bozhou means Bozhou Lanto Electronic Limited.Xuntao Bozhou means Bozhou Xuntao Electronic Limited.Meite Suzhou means Meite Technology (Suzhou) Co. Ltd.Huzhou Jiuding means Huzhou Jiuding Electronic Co. Ltd.Lanto Kunshan means Lanto Electronic Limited.Kunshan RF means Kunshan Luxshare Radio Frequency Technology Co. Ltd.Liding Dongguan means Liding Electronic Technology (Dongguan) Co. Ltd.Rikai Yancheng means Rikai Precision Technology (Yancheng) Co. Ltd.Xiexun Wan’an means Wan’an Xiexun Electronic Co. Ltd.Smart Manufacturing Changshu means Changshu Luxshare Smart Manufacturing Co. Ltd.Fujian JK means Fujian JK Wiring Systems Co. Ltd.Xingning Electronics means Xingning Luxshare Electronics Co. Ltd.Luxsan Kunshan means Luxsan Technology (Kunshan) Co. Ltd.BCS Suzhou means BCS Automotive Interface Solutions (Suzhou) Co. Ltd.SpeedTech means SpeedTech Corp.

5Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare Automation Jiangsu means Luxshare Automation (Jiangsu) Co. Ltd.Dongguan Luxshare Technology means Dongguan Luxshare Technology Co. Ltd.Luxshare Electronic Kunshan means Luxshare Electronic Technology (Kunshan) Co. Ltd.Luxshare Electronic Enshi means Luxshare Electronic Technology (Enshi) Co. Ltd.AOA means Articles of Association of Luxshare Precision Industry Co. Ltd.

6Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section II Company Profile and Financial Highlights

I. Company profile

Stock short name Luxshare-ICT Stock code 002475

Stock exchange Shenzhen Stock Exchange

Chinese name 立讯精密工业股份有限公司

Chinese short name 立讯精密

English name (if any) Luxshare Precision Industry Co. Ltd.English short name (if any) Luxshare-ICT

Legal representative WANG Laichun

2/F Block A Sanyang New Industrial Zone West Haoyi Shajing Street Baoan District

Registered address

Shenzhen

Postal code of registered address 518104

History of changes in registered

N/A

address

Office address No. 313 Beihuan Road Qingxi Town Dongguan Guangdong

Postal code of office address 523642

Company website www.luxshare-ict.com

Email Public@luxshare-ict.com

II. Contact person and contact information

Board Secretary Securities Affairs Representative

Name HUANG Dawei LI Ruihao

No. 313 Beihuan Road Qingxi Town No. 313 Beihuan Road Qingxi Town

Address

Dongguan Guangdong Dongguan Guangdong

Telephone 0769-87892475 0769-87892475

Fax 0769-87732475 0769-87732475

E-mail David.Huang@luxshare-ict.com Ray.Li@luxshare-ict.com

III. Media for information disclosure and place for keeping annual report

Website of the stock exchange disclosing the Company’s

Securities Times

annual report

Media and website disclosing the Company’s annual report www.cninfo.com.cn

Place for keeping annual report Securities Affairs Office of the Company

IV. Changes in registration particulars

Change in organization code Unified social credit code: 91440300760482233Q

Changes in main business since the listing No

7Luxshare Precision Industry Co. Ltd. Annual Report 2021

of the Company (if any)

Changes in controlling shareholder (if any) No

V. Other related information

Accounting firm engaged by the Company:

Name of accounting firm BDO China Shu Lun Pan Certified Public Accountants LLP

Office address of accounting firm Rooms 1 2 & 3 4/F No. 61 East Nanjing Road Huangpu District Shanghai

Name of accountants signing this report LI Jing and WEI Gang

Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:

√ Applicable □ N/A

Name of sponsor Office address of sponsor Names of sponsor representatives Period of ongoing supervision

19/F North Tower Excellence Times

CITIC Securities Co. Ltd. Plaza (Phase II) No. 8 3rd Central HE Feng and LIU From December 2 2020 to

Road Futian District Shenzhen Guanzhong December 31 2021

Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting

period

□ Applicable √ N/A

VI. Key accounting data and financial indicators

Did the Company need to retrospectively adjust or re-state any accounting data of prior accounting years?

□ Yes √ No

2021 2020 Y/Y % Change 2019

Operating revenue (RMB) 153946097790.40 92501259211.54 66.43% 62516314588.42

Net profit attributable to

shareholders of the listed company 7070520386.57 7225462752.58 -2.14% 4713820644.90

(RMB)

Net profit attributable to

shareholders of the listed company

after deduction of extraordinary 6015597220.13 6088901850.86 -1.20% 4435974109.41

gain or loss (RMB)

Net cash flows from operating

activities (RMB) 7284766917.00 6873211486.05 5.99% 7465988174.33

Basic earnings per share

(RMB/share) 1.01 1.03 -1.94% 0.68

Diluted earnings per share

(RMB/share) 0.99 1.01 -1.98% 0.67

Weighted average return on net 22.35% 30.29% Decrease by 7.94 perassets centage points 26.55%

December 31 2021 December 31 2020 Y/Y % Change December 31 2019

Total assets (RMB) 120572098167.88 70012753551.75 72.21% 49377910671.23

Net assets attributable to

shareholders of the listed company 35288554748.72 28101816234.56 25.57% 20296618968.52

(RMB)

Whether the lower of the net profit before and after deduction of extraordinary gain or loss in the past three accounting years has

8Luxshare Precision Industry Co. Ltd. Annual Report 2021

been negative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is

uncertain?

□ Yes √ No

Whether the lower of the net profit before and after deduction of extraordinary gain or loss is negative?

□ Yes √ No

VII. Differences in accounting data arising from adoption of Chinese and foreign accounting

standards concurrently

1. Differences in net profit and net assets disclosed in the financial statements prepared according to the

international accounting standards and the Chinese accounting standards

□ Applicable √ N/A

There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according

to the international accounting standards and the Chinese accounting standards.

2. Differences in net profit and net assets disclosed in the financial statements prepared according to the

foreign accounting standards and the Chinese accounting standards

□ Applicable √ N/A

There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according

to the foreign accounting standards and the Chinese accounting standards.VIII. Main quarterly financial indicators

In RMB

First quarter Second quarter Third quarter Fourth quarter

Operating revenue 21019011536.13 27127972915.37 32865598826.82 72933514512.08

Net profit attributable to

shareholders of the listed company 1349512048.43 1739717980.42 1600431354.99 2380859002.73

Net profit attributable to

shareholders of the listed company

after deduction of extraordinary 1167112633.01 1355153041.64 1471991374.50 2021340170.98

gain or loss

Net cash flows from operating

activities 663348870.24 1524553521.56 5419705921.15 -322841395.95

Whether there’s any significant difference between the financial indicators set forth above or aggregate amounts thereof and the

corresponding financial indicators contained in any quarterly or semi-annual report already disclosed?

□ Yes √ No

IX. Items and amounts of extraordinary gains or losses

√ Applicable □ N/A

In RMB

9Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item 2021 2020 2019 Remark

Gain or loss on disposal of non-current assets

(including allowance for impairment of assets that has -57241855.39 -35503173.93 -110085527.48

been written off)

Government grants recognized in profit or loss

(excluding government grants that are closely related

to the business of the Company and are provided in 853542165.37 450749695.89 232311428.35

fixed amount or quantity continuously according to

the applicable polices of the country)

Difference between

the original

carrying amount of

Interest in the fair value of the acquirees’ identifiable long-term

net assets at the date of acquisition in excess of the investment and fair

investment cost of the relevant subsidiaries 16559223.33 value of newly

associates and joint ventures consolidated subsidiaries upon

change from the

equity method to

the cost method

Gain or loss on assets under entrusted investment or

management 95298693.93 113778335.78 89722710.32

Gain or loss on changes in fair value of financial

assets held for trading and financial liabilities held for

trading and gain on disposal of financial assets held

for trading financial liabilities held for trading and 602993325.33 837100369.42 131736631.37

available-for-sale financial assets except for effective

hedges held in the ordinary course of business

Other non-operating income and expenses -12600634.71 30554498.37 -999739.32

Mainly gain on

Other gain or loss within the meaning of -170939666.46 0.00 0.00 derecognition of extraordinary gain or loss financial assets at

amortized cost

Less: Effect of income tax 211043425.20 214489873.68 55533801.99

Effect of minority interest (after tax) 61644659.76 45628950.13 9305165.76

Total 1054923166.44 1136560901.72 277846535.49 --

Other items of gain or loss within the meaning of extraordinary gains or losses:

□ Applicable √ N/A

We do not have any other item of gain or loss within the meaning of extraordinary gains or losses.If the Company classifies any item of extraordinary gain or loss defined by or listed in the Explanatory Announcement No. 1 on

Information Disclosure for Companies Publicly Offering Securities - Extraordinary Gain or Loss as recurrent profit or loss please

explain the reason.□ Applicable √ N/A

We have not classified any item of extraordinary gain or loss defined by or listed in the Explanatory Announcement No. 1 on

Information Disclosure for Companies Publicly Offering Securities - Extraordinary Gain or Loss as recurrent profit or loss in the

reporting period.

10Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section III Management’s Discussion and Analysis

I. Situations of our industry in the reporting period

During the reporting period we are engaged in the research and development (R&D) manufacturing and sale of products in the

fields of consumer electronics communication automotive electronics and healthcare among others. Our products and businesses

are diversified and vertically integrated and cover components modules and system assembly.(I) Consumer electronics

In the industry of consumer electronics the development and innovation of applied technologies and diversified growth of

consumer demands jointly promote the upgrading of consumer electronic products and related product lines and continued growth of

the consumer electronics market size. According to Statista the global consumer electronics market size grew at a compound annual

growth rate (CAGR) of 2.90% from 2015 to 2020 and is expected to reach USD1098 billion in 2025. The advancement of 5G and

artificial intelligence (AI) technologies will promote the development of different kinds of smart mobile smart wearable

AR/VR/MR smart home smart display and other IoT devices. The acceleration of upgrading of terminal products will drive the

increase in the integration level of electronic components contained therein and improvement of technological level. The one-stop

solution providers that are able to provide the brand customers with better production processes and higher integration level and

require the input of less resources will get more orders for related components and finished products. Accordingly the Company's

business expansion and industrial operations are expected to fully benefit.(II) Communication and data center

In the field of communication and data center the series of technical innovation and emerging of new technologies promote the

evolution from traditional IT infrastructure to data infrastructure and along with the continuous development of the Internet

e-commerce video cloud computing and other Internet vertical industries have been rapidly springing up and the global data center

market has come into multiple periods of rapid growth. According to IDC the shipments and sales of the global server market

reached 13539000 units and USD99.22 billion in 2021 representing an increase of 6.9% and 6.4% respectively. The global Internet

data center market size grew at a CAGR of more than 10% from 2012 to 2021.Global server shipments from 2016 to 2021 Global server sales from 2016 to 2021

Global server shipments (10000 units) Global server sales (USD100 million)

The ever increasing demands for new data centers by IT telecommunication banking financial service and investment (BFSI)

e-government and smart city projects and wide application of AI and IoT technologies in the future will further promote growth of

the communication and data center market size. According to IDC the global server market size is expected to reach USD126.5

billion in 2027.

11Luxshare Precision Industry Co. Ltd. Annual Report 2021

(III) Automotive electronics

Smart electric vehicles represent an opportunity of the century for the automotive industry of China. China has the largest

automotive market with the highest level of openness and inclusion and most consumers in the world utilizes the most advanced

smart vehicle technologies and attracts all major carmakers in the world. China ranks among the first in the world in terms of number

of smart vehicle brands and models. At present China’s smart vehicle market is transiting from the policy-driven period to the period

of market-driven high growth in an all-round way. In 2021 the sales volume of electric vehicles reached 3.52 million units in China

representing an increase of 160% as compared with 2020. China has ranked first in the world in terms of sales volume of electric

vehicles for seven consecutive years and the sales volume of electric vehicles in China is expected to further increase by 47% to

about 5 million units in 2022. The penetration of electric vehicles increased from 7.2% at the beginning of 2021 to 19% at the end of

2021 representing an exponential growth as compared with 10 years ago and showing great potentialities of growth.

In 2021 the penetration of electric vehicles began to increase rapidly in China and the transition to clean

transportation is accelerating.Penetration of electric vehicles

sales volume (k)

Source: China Association of Automobile Manufacturers

In addition to “electrification” “intelligentization” and “interconnection” are also developing vigorously. Statistics show that

about 20% new passenger cars are equipped with driver assistance system the penetration of L2 driver assistance system into the

electric vehicle market reaches 38% electric vehicles has basically realized full coverage of Internet of Vehicles (IoV) functions and

some major carmakers have begun to sell new vehicles powered by V2X technology. Chinese consumers are more willing to accept

smart electric vehicles and medium- and high-end smart electric vehicles occupy increasingly greater shares on the business and

consumer markets. Traditional smart mobile phone players begin to enter the smart electric vehicle sector; on the other hand electric

vehicle manufacturers begin to produce smart mobile phones. Along with the popularization of “intelligentization” vehicles will

become large-sized mobile smart and computing terminals. In the next stage carmakers need to build ecosystems to break through

the tight encirclement connect vehicles with consumer electronics create more consumption scenarios and realize full coverage of

“human-vehicle-home” scenarios.(IV) Our position in the industry

During the reporting period we ranked first on the 34th list of top 100 electronic component manufacturers of China (2021)published by the China Electronic Components Association and were awarded the honorable titles of “Top 500 Private EnterprisesOf China” “Top 500 Private Manufacturers Of China” and “2021 Model of China’s Digital Economic Industry” among others.

12Luxshare Precision Industry Co. Ltd. Annual Report 2021

II. Our main business in the reporting period

We concentrate our efforts on the specialization in and optimization of underlying technologies made in-depth deployments in

acoustic visual power (wired/wireless) wireless communication and other fields to meet future demands. Our products have been

widely applied in the fields of consumer electronics communication and automotive. By comprehensively mastering the

technologies relating to various components and modules and super-precision manufacturing technologies accumulated over the

years we give full play to our advantages in vertical integration and continuously restructure the supply chain in the field of system

assembly to create more value for our customers thereby gaining customers’ support and confidence.In launching a new product we focus on the product quality yield rate and optimization of production costs on the basis of

innovative production technology intelligent automation and digital platform thereby enabling us to make continuous and

substantial breakthroughs in new markets new customers and new products. In the implementation of related controls there is no

doubt that the automation technologies lay the strong foundation for our core competencies. Therefore we attach great importance

to the continuous exploration of automatic and smart manufacturing technologies. Our core team’s spirit of in-depth exploration of

processes and determination to accomplish all tasks assigned guarantee the success in the development and design of automation

technologies. According to the requirements for appearance size functions and reliability of products we disassemble and study all

manufacturing processes and make efforts to solve process challenges with reference to our past experience and advanced

technologies available on the market. With the goal of zero loss and zero defect we strive to realize the reasonableness

standardization and automation of designs in terms of yield rate efficiency cost etc.After the completion of process study we realize process design through automation including automation of work stations

handling and positioning testing warehousing logistics and production processes. Standardization is the prerequisite for automation

because standardized products cannot be made without the use of standardized equipment and processes. With respect to the products

that have a low demand and change frequently we mainly use man-machine flexible automation technologies. In the design of

automatic equipment we make plans for MES system IoT access and key work station information flows needing to be controlled

simultaneously and build a model of digital factory on that basis. Thereafter we convert all problems and phenomenon into data and

then process and judge the data systematically and present the same in the form of visual reports to realize whole-process

traceability of products materials people equipment fixtures process technology and quality information among others implement

close-end control and ensure the effective realization of automation. On that basis we introduce digital models use modeling

approaches to connect production with data flows and through the use of big data cloud computing AI digital twin and other

technologies deeply explore the information and trends behind data seek benefits from data and finally realize intelligentization

and self-judgment self decision-making self-adjustment and self-execution by machines so that the machines are able to solve

tangible problems and predict intangible problems on their own thereby achieving the long-term goal of smart manufacturing.

13Luxshare Precision Industry Co. Ltd. Annual Report 2021

1.精益化3.数字化

* 工艺的深度拆解和前瞻研究 * IOT、制造数字化集成

*设计的合理化、标准化和简单化*可视化控制中心和管理

*产线的精益布局规划*运营流程自动化贯通

1. Leanness 3. Digitalization

* In-depth disassembly of and forward-looking research on * Digital integration of IoT and manufacturing

processes * Visual control center and management

* Reasonableness standardization and simplification of * Automation of the whole operation process

design

* Lean layout of production lines

2.自动化4.智能化

*搬运-加工-检测-物流-仓储的全流程自动化*机器自感知、自学习、自决策、自执行

*柔性自动化系统分析*解决有形的问题和预测无形的问题

*数据驱动管理决策

2. Automation 4. Intelligentization

* Whole-process automation of handling processing testing * Self-sensing self-learning self decision-making and

logistics and warehousing self-execution of machines

* Analysis of flexible automation system * Solve tangible problems and predict intangible problems

* Data-driven management decision-making物理域精益生产布局精益工艺研究工艺数字化流程数字化

Physical field Lean production layout Lean process study Technological Process digitalization

digitalization精益化数字化智能制造信息域制成自动化

Leanness Digitalization Smart manufacturing Information field Manufacturing automation自动化智能化预测性分析物流自动化高级决策支持

Automation Intelligentization Predictive analysis Logistics Advanced decision-making

automation support

(I) Consumer electronics business

14Luxshare Precision Industry Co. Ltd. Annual Report 2021

From the perspective of applications consumer electronics communication and automotive are our main product and business

segments. In the field of consumer electronics we continue our product mix in prior years follow the trends of metaverse AIoT

smart life and high-speed transmission and enrich our product offerings in a steady and orderly manner. Our product offerings

include acoustic products (such as TWS earphone) smart home products (such as 5G CPE and Wi-Fi 6 portable router) smart

terminal products (such as wearable watch and wristband AR/VR/MR) computer accessories (such as Dock) intelligent stylus

video conference equipment and wired and wireless high-watt rapid charging accessories for various PC/NB/mobile phone brands for

retail sale.We have been engaged in the field of consumer electronics for years while satisfying the customers’ demands made continuous

breakthroughs to build the strong capability to provide customers with comprehensive solutions. We have the advantages in

intelligentization digitalization and globalization on the vast consumer electronics market. We make dynamitic adjustments

continuously and clearly understand the existing market and the incremental market. With respect to the existing market such as the

business relating to PC and smart mobile phones we have mature technical capabilities capital equipment and customer resources.As the most trusted partner of our customers we are not only able to in conjunction with our premium customers achieve self-worth

in the field of premium products and the existing products we are good at but also in the upgrading of products and technologies

leverage our mature resources grasp the opportunities to enter the market of higher-level products at optimal cost and maximize the

rewards. With respect to the incremental market such as health & wellness metaverse and other applications we believe that the

premium customers on the existing market will continue to take the lead. By leveraging our good reputation and solid partnership

with our customers built by us over the years our management will continue to keep abreast of the market analyze and accurately

grasp the situations of technology development of the industry from the perspectives of consumers brand customers and supply

chain continuously improve product attractions required by the incremental market and make all-round deployments from

components modules to system.Though we face many external challenges such as disengagement between China and the United States and geopolitics we

have high hopes for and are confident about the future development of our consumer electronics business. In the past ten years

through continuous upper-level industry guidance development of designated customers improvement of the quality and

development of high-quality supply chain and with the long-term and strong support and investments in different areas China has

gradually built the most complete and systemic consumer electronics supply chain in the world and takes the lead in in-depth

deployment talent pool policy support and other issues in respect of supply chain on all market segments. In view of our strong head

start advantage and the competitive situation on the consumer electronics market we keep improving and enhancing all kinds of

capabilities and on the basis of our global deployment completed over the years and our stable strategic focus develop incremental

businesses at home and abroad according to the development requirements of customers. The present and foreseeable situations show

that the strong will be always strong. Our strategic goals conform to those of our customers.

15Luxshare Precision Industry Co. Ltd. Annual Report 2021

智能音箱 快充适配器 VR眼镜 5G路由器 智能穿戴 机壳天线

Smart speaker Rapid charging VR eyeglasses 5G router Smart wearable Casing antenan

adapter

电子烟 无线充模组 声学模组 震动马达 5G模组 天线

Electronic cigarette Wireless charging Acoustic module Vibration motor 5G module Antenna

module射频线材线缆机构件连接器核心工艺智能制造

Radio frequency Wire and cable Mechanical Connector Core technology

components Smart manufacturing

(II) Communication business

Driven by 5G big data and edge computing technologies the ICT industry puts forward higher requirements for data

transmission hardware equipment shows a tendency towards gradual opening of interfaces and high integration of functions and

interconnect components show a tendency towards high speed high density high reliability and low loss. On the basis of the

application scenarios of our products in the field of data and communication and centering on the application and development

trend of data center we have gradually enriched our product offerings and on the basis of electric connection (high-speed electric

connectors and cables) optical connection (AOC and optical modules) radio frequency (RF) communication (base station antennas

base station filters tower mounted amplifiers duplexer combiners RRUs AAUs and small base stations) and other existing

products have developed thermal management (heat pipes VC axial fans cold plates and water cooling radiators) industrial

connection and other products further increasing our product coverage. In 2022 we will develop server and other complete unit

assembly business center on the “complete unit + core components” double development strategy and strive to grow into a

comprehensive solution provider offering all kinds of products in the field of data and communication.

16Luxshare Precision Industry Co. Ltd. Annual Report 2021

电连接产品线服务器交换机整机组装产品线

Electric connection products Server Switch Complete unit assemblies光连接产品线综合布线基础设施热管理产品线

Optical connection products Cabling system Infrastructure Thermal management

products汇聚交换机接入交换机数据中心机架群机架内服务器群

Aggregation switch Access switch Data center rack cluster Server cluster inside rack

We have focused on the development of core technological capabilities and basic R&D capabilities through research of

simulation technology new materials and new processes and application of testing technologies and provide strong technical support

for communication interconnect products in different forms. With respect to system-level products through disassembly of modules

and components contained in the products and single-point manufacturing processes and technologies we are able to realize highly

or wholly automated efficient and high-quality production and manufacturing of large and small batches of products.基础设施服务器综合布线浸没机柜

Infrastructure Server Cabling system Immersion cabinet精密模组高速连接器高速线缆线缆模组

Precision module High-speed connector High-speed cable Cable module滤波器热管理核心零部件高速裸线开发

17Luxshare Precision Industry Co. Ltd. Annual Report 2021

Filter Thermal management Core components Development of high-speed

bare wire精密冲压和注塑射频散热部件

Precision stamping and injection Radio frequency Radiator

molding基础制造能力压铸机加钣金

Basic manufacturing capability Die casting Tooling Sheet metal冲压注塑表面处理基础服务平台

Stamping Injection molding Surface treatment Basic service platform本地工程服务中心全球化采购自动化设备开发零件中心

Local engineering service center Global purchasing Development of automatic Component center

equipment

Due to the effect of disengagement between China and the United States and geopolitics exports of the domestic

communication and data center industries face certain shocks and challenges. With respect to the further exploitation of opportunities

of external circulation we always regard the technical capabilities as the foundation for business development and driven by the

technologies and with the support of our strong precision manufacturing capability actively exploit the overseas market. In addition

we will firmly grasp the opportunities provided by the “Eastern Data Western Computing” program and replacement with

home-made goods focus on internal circulation and actively seek new opportunities in the domestic communication industry. We

believe that we will get more and better business opportunities than traditional communication product manufacturers as we will

apply our rich experience accumulated in the consumer electronics precision manufacturing industry to the new communication

industry.(III) Automotive business

In view of the development of electric vehicles we have made long-term plans for automotive business and included wire

harness connection system new energy smart interconnect smart cabin and smart manufacturing in our product offerings.Leverage the superior resources of the Group enrich product offerings and create driving force

for the growth of automotive tier-1 business线束整车线束特种线束充电枪

18Luxshare Precision Industry Co. Ltd. Annual Report 2021

Wire harness Vehicle wire harness Special wire harness Charging gun连接器低压连接器高压连接器高速连接器

Connector Low-voltage connector High-voltage connector High-speed connector新能源逆变器智能网联路测单元

New energy Inverter Smart interconnect Road-side unit车载通讯单元智能天线智能驾舱多媒体仪表

Telematics control unit Smart antenna Smart cabin Multi-media instrument panel信息娱乐系统域控制器无线充电电源网络隔离器

Infotainment system Domain controller Wireless charging Power and network isolator智能制造嵌件注塑

Smart manufacturing Insert molding

Wire harness is an essential system-level component for a vehicle is flexible important and widely used covers all

configurations of a vehicle and provides reliable power supply signals and data to all electric appliances so they serve as “arteries”

of the “neural network” of a vehicle. According to Markets and Markets the global automotive wire harness market size was

expected to reach USD47 billion in 2021. Through vertical integration we have grown into a comprehensive supplier specialized in

the design validation and manufacturing of low-voltage and high-voltage vehicle wire harnesses special wire harnesses charging

guns and other products. We stick to the customer oriented service concept and satisfy the customers’ demands with our efficient

customized design and development production facilities located in the neighborhood of our customers and our strong precision

manufacturing capabilities accumulated over the years. In additional to traditional carmakers we have developed some major

emerging customers.Automotive is one of the largest markets for connectors. Automotive connectors account for 22% in the global connector

industry where smart electric vehicles are the largest growth driver. According to Bishop & Associates the global automotive

connector market size was USD15.210 billion in 2019 and is expected to reach USD19.452 billion in 2025. We have designed and

developed all kinds of connectors required on vehicles including low-voltage connectors high-voltage connectors high-speed

connectors and customized connection systems among others. We exploit the existing customer market through our wire harness

business and enhance the synergistic effect with our existing consumer electronic and business-type products to promote growth of

business. Our proprietary gigabit Ethernet connector adopts a wholly shielded double cable connection structure and can be widely

used on infotainment systems ADASs domain controllers and other products.In order to satisfy the demands of the smart electric vehicle market we launched key components of the power system of

electric vehicles including battery disconnect unit (BDU) power distribution unit (PDU) and inverters. In 2021 the global

automotive PDU market size was USD7 billion and the inverter market size was USD3 billion. PDU is designed to distribute and

manage electric power in the high-voltage system of new energy vehicles and can integrate MBS master control charging module

DC module PTC control module and other functions. BDU is specially designed for installation inside battery packs and is a kind of

distribution box. Inverter is a device that converts direct current in batteries into three-phase alternating current required by electric

motors and a core component of new energy vehicles. The power output and battery life of electric motors directly depend on the

performance of inverters.The IoV relies on the new-generation information communication technology receives information from and transmits

information to moving vehicles and can play an important role in vehicle safety traffic control information service smart city and

intelligent transportation. At present IoV applications are key projects of government and OEMs and require coordination among

multiple devices such as road-side unit (RSU) which collects environment traffic condition traffic sign and other information and

sends the same to vehicles telematics control unit (TCU) which effects two-way communication between vehicles and external

networks central gateway (CGW) which connects all electronic devices on a vehicle and other products. We focus on the

development of wireless communication and automotive electronic products and currently offer RSUs TCUs and CGWs.

19Luxshare Precision Industry Co. Ltd. Annual Report 2021

According to Visteon the global smart cabin market size was about USD44.7 billion in 2020 and is expected to reach USD73.8

billion in 2025. The penetration of smart cabin into new vehicles in China is expected to exceed 75% in 2025. At present the basic

configuration of a smart cabin on the market includes digital instrument panel streaming rearview mirror HUD rear seat screen and

IoV modules among others which can provide passengers with navigation environmental monitoring entertainment and other

directly perceivable information satisfy diversified human-machine interaction requirements provide better ride experience and

create more consumption scenarios. Our products include AR-HUD infotainment system cabin entertainment domain LCD

instrument panel driver monitoring system power isolation module etc. and USB port and wireless charging module are relatively

mature products. In the future more consumer electronic functions will be applied in cabins so we can fully leverage our

technologies accumulated over the years in the field of consumer electronics.We also provide customers with smart manufacturing services including insert molding PCBA and other product services by

leveraging our economy of scale and lean production.In February 2022 we entered into a Strategic Cooperation Framework Agreement with Chery Holding Group pursuant to

which we and Chery New Energy Automobile Co. Ltd. will establish a joint venture specialized in R&D and manufacturing of

new energy vehicles in the form of ODM. This business platform will produce vehicles for brand customers provide a frontier

R&D and mass production platform and access to the overseas market for our core automotive component business and help us

develop our tier-1 business. We have been engaged in the field of consumer electronics for years and accumulated a solid industrial

base and strong ODM capability and are familiar with ODM operation and management model. Chery has rich experience in the

field of traditional vehicles and solid technological base. Our superior products will have an opportunity to grow from 0 to 1

through this joint venture ODM platform and the incremental business provided by Chery and we will leverage our advantages to

take part in the competition in order to have our tier-1 products pass validation by the brand customers.Along with the wide application of consumer electronics products on vehicles our technologies experience and customer

resources accumulated over the years in the field of consumer electronics will help our automotive business segment better grasp

the trend and develop more products and customers. We will keep pace with our premium customers at home and abroad

accurately grasp the development direction of technologies and the industry and actively promote the technological upgrading of

products and reduction of costs through technology to continuously provide our customers with products and solutions that are

competitive in both technology and business. Our medium-to-long term goal is to grow into a tier-1 manufacturer in the global

automotive component industry in the next three to five years.

20Luxshare Precision Industry Co. Ltd. Annual Report 2021

III. Analysis of core competencies

(I) Smart manufacturing under the lean production mode

Since our establishment we have adhered to our original intention focused on precision manufacturing and through

development and application of advanced digital tools and automatic production processes and continuous optimization of system

structure organization and production mode ensure our production system is able to rapidly adapt to the continuously expanding

production lines and meet the constantly changing market demands.

1. Modern optimization of smart process

We implement the lean production mode pursuant to 7-S management standard carry out production according to demands

meet the demands of different customers for different products with the optimal production rhythm and have introduced many digital

system tools for example:

(1) SAP system that connects all links in our internal operation and connects customers through EDI system and suppliers

through SRM system;

(2) PLM system in respect of product R&D that integrates product-related processes designs software and simulation models

and scientifically manages product data in the entire life cycle from design development production marketing

purchasing to after-sale services;

(3) MES system in respect of production and manufacturing that integrates human tooling equipment jigs materials

customer demands and other factors and uses AI and 5G technologies to implement optimal management of the whole

process from receipt of customer demands to delivery of products;

(4) WMS smart warehousing system that effectively deals with and manages our complicated inbound and outbound goods

improves the goods turnover and inventory turnover greatly reduces overstock and occupation of funds and make

warehousing management more accurate simple and efficient; and

(5) Budget management and BI system in respect of financial and accounting operation that realizes efficient preparation of

budgets and effective control review and analysis and manages and controls risks using big data.We continuously optimize our management processes and production processes implement customer oriented precise scientific

and intelligent management and constantly strive to improve our production efficiency and product yield.

2. Advanced automatic process design and application

As a global leading provider of diversified component solutions high-quality precision manufacturing has always been one ofour core competencies. Since our listing our precision manufacturing capability has developed from “automation with passivepositioning” to “automation with active positioning” and finally to “full automatic and smart” super-precision modularized

manufacturing today. In the automatic manufacturing of products we connect product design with the design of automatic

manufacturing process seamlessly and on the basis of ensuring our process capability at key work stations takes the lead in the

industry have introduced AI visual robots to realize positioning error detection and judgment in the production process of precision

electronic components active and mutual positioning between components and jigs in the assembly process and AI-assisted

inspection of appearance of component products. We widely use automated guided vehicles (AGVs) on production lines and

warehouses to give support to modern smart logistics and warehousing system. In addition we use big data and AI technologies in

conjunction with our proprietary algorithms to feed back real-time measuring and testing data thereby ensuring the reliable quality

assurance and full traceability of products and enabling the automatic production lines to have the deep learning capability to realizeclose-end control over the automation technology which marks that we have formally entered into the stage of “smart precision

21Luxshare Precision Industry Co. Ltd. Annual Report 2021manufacturing” from “precision manufacturing” in the early stage and “quality assured precision manufacturing” in the middle stage.

3. Advanced comprehensive quality management system

Quality is the foothold of a company and one of the most important core values provided by a company to its customers. Since

our establishment we have adopted “quality is our lifeline” as one of our corporate values established and improved the quality

management system using scientific and effective quality management approaches and integrated quality assurance into the whole

process from design manufacturing inspection packaging to transportation of products. We have a full set of advanced NPI ( new

product introduction) management process and control quality from the development and design of products to lay a solid basis for

successful mass production of products. In the each stage of development of a new product such as POC (proof of concept) Proto

(model verification) EVT (engineering verification test) DVT (design verification test) PVT (process verification test) and MP

(mass production) etc. we take the highest requirement for mass production that each stage should satisfy as the criteria for approval

of entry into the next stage. We attach great importance to quality precautions and implement design quality controls focusing on

quality cost manufacturing and automation to shorten the period from engineering development to mass production. Due to our

excellent quality assurance capability we have received praise from our customers continuously and enhanced customer adhesion.(II) Forward-looking strategic deployment

Our management keeps abreast of market trends and developments of the industry through industrial researches and internal

seminars reviews our development situations makes in-depth analysis of the boundaries of our business and capabilities enhances

the implementation of the “three five-year” strategic plan and continuously explores the ways of diversified innovations and

development. Our development towards new products and new areas is based on multi-dimensional analysis of industrial

development customer demands competitors the value we can provide the space we can play profitability return on investment

and other aspects of the industries customers and end users and detailed sand table exercise by our core management.

1. Vertically integrated one-stop service capability

We focus on providing the market with perfect comprehensive solutions covering the entire industry chain. We provide full

coverage products from core components modules to system-level assembly. We have proprietary key process capabilities including

design and processing of molds/jigs bare copper wire drawing plastic particle molding stamping/press forging precision implant

molding surface treatment SMT SiP and system-level assembly testing. In addition we have a number of national CNAS

certification labs responsible for preliminary development validation in-process quality inspection and failure analysis. Therefore

we have vertically integrated production capabilities for core components modules to system-level assembly that are relatively

complete and have realized close-end management from key materials parts modules core technologies to data of all stages in

respect of all core acoustic optical and electric module products such as acoustic modules vibration motors voice coil motors

antenna modules wireless charging modules and all kinds of terminal products such as accessory system IoT equipment acoustic

wearable devices smart wearable devices and smart mobile phones. With our understanding of the market demands over the years

we are able to provide comprehensive one-stop professional services from product proposal design validation to mass production

and even to logistic cooperation after-sale quality tracking and warranty thus further enhancing our competitive advantage in rapid

response to demands of customers timely and efficient engineering cooperation and cost control with quality guaranteed.

2. Industrial synergistic effect

In order to provide the customers with greater and better values in addition to our vertically integrated one-stop service

capability we manage and integrate purchasing R&D and manufacturing activities of consumer electronics communication

automotive healthcare and other business segments in a centralized manner to minimize the use of resources accelerate trans-sector

technological convergence improve production efficiency and product yield seek synergistic effect reduce overall costs for

customers and ensure our return on investment.

22Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Global service deployment

Economic globalization is the profound background and fundamental trend of the development and evolution of global economy

in the 21st century. As the players of economic globalization transnational companies directly promote the development of economic

globalization. From the perspective of market in the era of global intelligentization the electronics industry is the field with the most

thorough allocation of global resources and market competition at present.After more than ten years’ development we have gradually built a global system integrating development sales FAE (field

application engineer) and manufacturing. We now have 16 sales & FAE offices abroad which in addition to providing services to

our customers from nearby locations actively attract sales R&D and management talents of different fields throughout the world to

introduce fresh blood and draw out the potential capacities of the teams. This approach not only can be horizontally replicated in new

product operation teams but also can maintain the capability boundary of all functional teams and personnel at the same level. In

addition in order to optimize our cost structure we have established industrial zones and manufacturing facilities in some foreign

countries to serve global brand customers. We are committed to satisfying the demands of customers keep abreast of market

demands through our global sales & FAE network accelerate R&D of new products produce high value-added products; leverage

our local manufacturing capabilities throughout the world and advantages in smart manufacturing shorten the production and

transportation cycle of products further enhance the cost advantage of products and improve quality and efficiency to provide our

customers throughout the world with more competitive services.(III) R&D and technological innovation

1. Continuous increase in R&D investment

Since our listing we have placed R&D and innovation on an important position in our development made continuous

investments in technology R&D vigorously upgraded traditional manufacturing processes continuously improved the level of

automatic production and realized platformization of all precision manufacturing processes. We also attach great importance to the

long-term development of underlying materials and innovative production technologies. Our R&D team has continuously learned and

explored advanced precision manufacturing technologies and product applications in the countries and regions mastering frontier

technologies and established a number of advanced technology development labs with certain core customers to jointly develop

frontier technologies. We have established advanced production technology and manufacturing process R&D platforms in Dongguan

Kunshan Taiwan and the United States and own a R&D and smart manufacturing team taking the lead in the industry. Our R&D

expenses are mainly classified into early stage R&D expenses and product upgrading expenses. Early stage R&D expenses are

incurred in connection with medium-to-long term product and business planning and deployment and consist of investments in new

products and new areas and R&D expenses relating to underlying technologies accounting for about 30% of our total R&D expenses.Product upgrading expenses are incurred in the process from concept to NPI (new product introduction) of new solutions and new

products. All early stage R&D expenses and product upgrading expenses are expensed as incurred to reduce the pressure of asset

amortization costs in the future. Our R&D expenses have been continuously increasing and totaled RMB16.763 billion in the past

three years. In the reporting period our R&D expenses totaled RMB6.642 billion.

2. Innovation capabilities and patents

Innovation is the soul of the era of knowledge economy. As a hi-tech company we always attach great importance to the

management and protection of intellectual properties (IPs) have established and continuously improved our IP policy complied with

all IP laws and regulations established IP department and engaged professionals to actively carry out application protection

operation and maintenance activities in respect of IPs. We encourage our employees to actively make innovations reduce product

costs and increase our profits. On the other hand we actively prevent risk of infringement and protect our and our customers’

legitimate rights and interests. As of the end of this reporting period we own 3?090 valid patents an increase of 44.46% as compared

with the end of 2020.

23Luxshare Precision Industry Co. Ltd. Annual Report 2021

We firmly believe that R&D and technological innovation are an important means to realize forward-looking deployment and

will drive our development. The continuous and steady R&D investments will not only consolidate our leading position and

advantages in the industry but also enhance our risk bearing capability in an ever-changing macro environment and lay a solid

foundation for our continuous and rapid development in the future.(IV) Corporate culture focusing on sustainable development

1. All-round customer-oriented culture

Since our establishment we have adhered to the philosophy of “customer first” and been committed to providing our customers

with complete and perfect comprehensive solutions taking into comprehensive consideration response speed engineering

cooperation service quality flexible delivery cost control and other factors. Our leading technologies and excellent quality

assurance capability have helped us build a good brand image and reputation in the industry and brought high-quality customers to

us. After years of cultivation we have established stable cooperation relationships with a lot of global leading brands and

manufacturers in the fields of consumer electronics communication and automotive. Over the years we have kept pace with the

strategic steps made by our major customers cautiously assessed the development trends of the industry from the perspective of

brand customers and end consumers and made forward-looking deployments to occupy the new markets and new channels to ensure

that we maintain the lead. We think what customers think and are eager to help the customers in need. Under the guidance of the

service philosophy of “customer first” in addition to fulfilling the tasks assigned by the customers we have also continuously

identified the pain points of the customers in their applications fully leveraged our resource and platform advantages and taken the

initiative to provide the customers with optimization proposals and suggestions to highlight our competencies. Our commitment to

fulfill all missions has been generally recognized in the industry.

2. Spirit of workmanship that constantly strives for perfection

We are unable to make continuous improvement in smart manufacturing product R&D internal management social

responsibility and other areas without our employees’ striving for perfection at work and accomplishment of each task in such

manner that is higher than the customer standard stricter than the industrial standard and more excellent than what has been done

yesterday. That is the key internal driving force behind continuous recognition of us by the customers and our rapid development. In

the future we will remain true to our original aspiration not only carry on the spirit of workmanship that constantly strives for

perfection in our traditional superior fields but also foster such spirit in our new teams and new business segments strive to

accomplish the strategic goals in the “three five-year” plan period with the spirit of enterprise and achieve a win-win situation with

our customers shareholders and employees.

3. Talent selection training use and retention mechanisms deeply integrated with corporate culture

The core competencies of a company will be ultimately reflected in the soft power arising from in-depth integration and mutual

nourishment of talents and corporate culture. Core talents are the basis for the sustainable development of a company and the

cornerstone for cultivating the talents required by a company. We have adhered to the strategy of invigorating the business through

talents and continuously improved our talent echelon building system and talent pool mechanism. We vigorously recruit outstanding

talents required in our development who recognize and conform to the distinctive characteristics of our corporate culture to

continuously augment our team of core talents. On the other hand we continuously improve our talent training system and talent

selection system. Along with the growth of our business we continuously put forward new and reasonable requirements for our

employees encourage them to make self break-through in the boundary of their capabilities and continuously improve their personal

competencies and management capabilities to contribute new energy to our development. Under the nurture of our corporate culture

of being pragmatic and enterprising constantly striving for perfection and fulfilling the missions we provide the key employees

with a vast space to exercise their talents and effectively stimulate their sense of mission sense of achievement and sense of

collective honor. At present we have recruited outstanding talents in materials automation electronic information molds business

24Luxshare Precision Industry Co. Ltd. Annual Report 2021

management and other fields throughout the world to create a talent pool for our sustainable development. We clearly know how to

attract and retain talents. To develop a virtuous circle of people creating the environment and the environment creating people

through in-depth integration of talents and corporate culture is our strongest core competency. Through effective talent mechanisms

we have sufficient talents in our traditional superior fields and have laid the foundation for our rapid development in new areas and

businesses.IV. Analysis of main business

1. Overview

In 2021 the external environment became more complicated and severe. The domestic and overseas economic development

faced numerous pressures and was greatly affected by the changes unseen in a century and the epidemic disease of the century.During the reporting period we faced more risks and challenges in our development for example the repeated outbreaks of

COVID-19 at home and abroad causing interruption of the upstream supply chain and blockade of logistic routes shortage of chips

and materials throughout the world sharp rise of the prices of staple commodities and logistic and transportation costs and delay in

the mass production and delivery of certain new products.In addition the learning curve of some new products/businesses during rapid growth and the regular cycle of some existing

products affected our financial indicators to a certain extent. During the reporting period we invested in and controlled Rikai

Precision Technology (Yancheng) Co. Ltd. (“Rikai Yancheng”). Since 2021 due to great demands from customers for the precision

display structure module products for mobile phones in the coming years the scale of operation of Rikai Yancheng increased rapidly.However the huge investment in the preliminary development and automation optimization in respect of the precision display

structure module products for mobile phones and large proportion of raw materials to the total cost of such products greatly affected

the overall product margin of Rikai Yancheng and in turn affected the consolidated gross margin of Luxshare-ICT. In addition after

experiencing the strong demands from industries/market and consumers for smart wearable acoustic products the shipments of our

smart wearable acoustic products dropped sharply in 2021 which had a periodic effect on the operating revenue and net profit of this

business. The development of this business is expected to become stable in 2022. We will continue to leverage our core competencies

give full play to our value as an important partner of our key customers and promote the steady and high-quality development of this

business.Facing the market competitions and internal and external pressures and challenges we work hard to overcome the difficulties

focus on the formulation and implementation of the “three five-year” strategic plan and further enhance short- medium- and

long-term forward-looking deployments taking into account the new situations and new opportunities. During the reporting period

we fully leveraged our advantages in smart digital and modular high-end manufacturing and flexible management further

consolidated the foundation of the big precision and smart manufacturing platform intensively implemented vertically integrated

allocation of resources and effective coordination of all product lines and business segments improved the efficiency of internal

organization and made praise-worthy achievements in both existing and new businesses.

(1) Consumer electronics business

During the reporting period we stuck to the strategy of diversified vertical integration and production penetration in the field of

consumer electronics. In 2021 with respect to smart wearable healthcare products as an important member of our family of

system-level products though the delivery of certain products was delayed due to the epidemic situation at home and abroad and

shortage of materials our excellent performance in product development automatic production process premium quality flexible

delivery and other areas was well recognized by our key customers laying a solid foundation for the provision by us of in-depth and

diversified services such as system assembly and different kinds of core components in respect of this product line. With respect to

SiP products despite the effect of overseas epidemic situation our performance was generally mature and realized full coverage of

smart wearable healthcare products. On the basis of thorough assessment of return on investment utilization rate and other operating

25Luxshare Precision Industry Co. Ltd. Annual Report 2021

metrics and in-depth analysis of this technology development route taking into account our strategy of access to the overseas market

for system products we will make further plans in respect of smart wearable acoustic products and peripheral functional module

system packaging business in the short term and develop chip/semiconductor module packaging business in the long term. With

respect to system products for mobile phones the joint venture platform established by us and our controlling shareholder vigorously

promoted smart and digital practices and built an integrated smart platform covering product scheduling production process analysis

asset management energy monitoring personnel management failure analysis remote assistance and other activities in order to

continuously improve our operation and management level and effectively satisfy our customers’ increasingly personalized high

quality and rapidly evolving demands. Our integrated smart development and production platform covering the whole process make

full preparation for large-scale replication and group/global operation in the days to come.With respect to the vast consumer electronics market we keep our eyes open and wash grains of gold out of the sand. In the

recent years by leveraging our strong core competencies and the demonstration effect of big customers through our premium

services to many global well-known brand customers we have made excellent achievements in smart terminal smart life computer

accessory and other solutions and accumulated strength for the diversified development of our consumer electronics business at the

customer and product sides. Our products include acoustic optical and electric modules smart accessory system acoustic system

IoT equipment wearable devices etc. Through in-depth market/customer researches we have established executable development

plans and growth objectives and our cooperation with global customers having great potentialities has been upgraded from simple

cooperation in components and modules to integrated and all-round cooperation in complete unit system solutions. At present we are

carrying out business as planned with the support and recognition of the market and customers as what they did in the past. In view

of the relatively fragmented market we will further focus on resources and make thorough assessments in the future and strive to

develop related business into important drivers of our sustainable growth in the next five to ten years.

(2) Automotive business

In 2021 despite the weak market demand and chip shortage caused by the epidemic situation at home and abroad the overall

development of our automotive business generally meets the expectations of our management. Along with the continuous

development of “electrification” “intelligentization” and “interconnection” of vehicles and trans-sector application of consumer

electronic products and technologies on vehicles we actively grasp market opportunities and fully leverage our technologies and

customer resources accumulated over the years in the fields of consumer electronics and communication in order to ensure that our

existing automotive business catches the trend more accurately and to develop product lines and strategic customers in a more

intensive and focused manner. At present our main products cover automotive wire harnesses (vehicle wire harnesses special wire

harnesses charging guns etc.) connectors (high-voltage low-voltage and high-speed connectors Busbar etc.) smart new energy

(PDUs BDUs inverters energy storage etc.) smart interconnect (RSUs TCUs etc.) and smart cabin/control (domain controllers

infotainment system and multi-media instrument panels). We will guided by the trend of technology development and strategy to

focus on/enable customers continuously provide our customers with products and solutions that are competitive in the world in both

technical and commercial metrics by leveraging our manufacturing facilities and product R&D centers distributed around the

country and the synergistic effect of domestic and overseas resources.

(3) Communication business

During the reporting period our supercomputing center business grew rapidly as a result of our continuous technology

development in the field of communication. However the unreasonable interference by foreign entities of the same trade in the

context of China-US trade friction affected the continued development of our communication business in North America. On the

basis of further improving our capabilities in respect of existing high/low-frequency electric connector optical connector and RF

communication products during the reporting period we focused on the development of thermal system management industrial

connector and other new products and new businesses further enhanced vertical integration of industries trans-sector technological

convergence and increased coverage of product lines with a view to growing into a comprehensive data and communication solution

26Luxshare Precision Industry Co. Ltd. Annual Report 2021

provider. The global market has continuous demands for communication equipment. Along with the further development of smart

manufacturing metaverse smart driving and IoT by virtue of our complete product lines and platforms and our understanding and

application of frontier technologies we will continuous exploit the global market and increase our market shares.During the reporting period our sales revenues totaled RMB153.946 billion an increase of 66.43% year on year; profit totaled

RMB8.143 billion an increase of 0.09% year on year; and net profit attributable to the owners of the parent totaled RMB7.071

billion a decrease of 2.14% year on year.

2. Revenue and cost

(1) Components of operating revenue

In RMB

20212020

Y/Y %

Amount % of operating % of operating Change revenue Amount revenue

Total operating revenue 153946097790.40 100% 92501259211.54 100% 66.43%

By segment

Computer interconnect products and

precision components 7856595729.78 5.10% 3521361712.58 3.81% 123.11%

Automotive interconnect products and

precision components 4142675174.19 2.69% 2844031362.75 3.07% 45.66%

Communication interconnect products

and precision components 3269476642.60 2.12% 2265420000.59 2.45% 44.32%

Consumer electronics 134637995600.46 87.46% 81818160358.88 88.45% 64.56%

Other connectors and other business 4039354643.37 2.62% 2052285776.74 2.22% 96.82%

By product

Computer interconnect products and

precision components 7856595729.78 5.10% 3521361712.58 3.81% 123.11%

Automotive interconnect products and

precision components 4142675174.19 2.69% 2844031362.75 3.07% 45.66%

Communication interconnect products

and precision components 3269476642.60 2.12% 2265420000.59 2.45% 44.32%

Consumer electronics 134637995600.46 87.46% 81818160358.88 88.45% 64.56%

Other connectors and other business 4039354643.37 2.62% 2052285776.74 2.22% 96.82%

By region

Domestic market 10493247599.10 6.82% 7454978348.07 8.06% 40.75%

Overseas market 143452850191.30 93.18% 85046280863.47 91.94% 68.68%

By sales mode

Direct sales 153946097790.40 100.00% 92501259211.54 100.00% 66.43%

(2) Segments products or regions representing more than 10% of operating revenue or profit

√ Applicable □ N/A

In RMB

Y/Y % Change Y/Y % Y/Y %

Operating revenue Operating cost Gross margin in operating Change in Change in revenue operating cost gross margin

By segment

Consumer electronics 134637995600.46 119338834375.15 11.36% 64.56% 77.54% -6.48%

By product

Consumer electronics 134637995600.46 119338834375.15 11.36% 64.56% 77.54% -6.48%

By region

Domestic market 10493247599.10 8421880523.04 19.74% 40.75% 44.47% -2.06%

Overseas market 143452850191.30 126626455769.84 11.73% 68.68% 81.05% -6.03%

By sales mode

27Luxshare Precision Industry Co. Ltd. Annual Report 2021

Direct sales 153946097790.40 135048336292.88 12.28% 66.43% 78.23% -5.81%

In case of any adjustment to the statistic scale for main business data the main business data of the most recent reporting period as

adjusted according to the statistic scale applied at the end of the current reporting period:

□ Applicable √ N/A

(3) Whether the Company’s revenue from sale of tangible goods is higher than the revenue from labor

service?

√ Yes □ No

Segment Item Unit 2021 2020 Y/Y % Change

Sales volume KPCS 692107 510910 35.47%

Computer interconnect products and precision

components Output KPCS 735779 537997 36.76%

Inventories KPCS 43672 27087 61.23%

Sales volume 1?000 sets 233339 172912 34.95%

Automotive interconnect products and precision

components Output 1?000 sets 256542 184502 39.05%

Inventories 1?000 sets 23203 11590 100.20%

Sales volume KPCS 380329 470565 -19.18%

Communication interconnect products and

precision components Output KPCS 413793 514389 -19.56%

Inventories KPCS 33465 43824 -23.64%

Sales volume KPCS 3495842 3299993 5.93%

Consumer electronics Output KPCS 3773559 3661402 3.06%

Inventories KPCS 277717 361409 -23.16%

Sales volume KPCS 467754 312258 49.80%

Other connectors and other business Output KPCS 508283 348814 45.72%

Inventories KPCS 40529 36556 10.87%

Analysis of changes in the relevant data over 30% year on year:

√ Applicable □ N/A

During the reporting period our output and sales volume increased as a result of increase in sales.

(4) Performance of material sales contracts and material purchase contracts by the Company as of the end

of the reporting period

□ Applicable √ N/A

(5) Components of operating cost

Classification of segments

In RMB

20212020

Segment Item Y/Y %

Amount % of operating cost Amount

% of operating Change

cost

Computer interconnect products and

precision components 6296204929.34 4.66% 2765866774.16 3.65% 127.64%

Automotive interconnect products

and precision components 3475111291.70 2.57% 2374148439.75 3.13% 46.37%

Communication interconnect

products and precision components 2700268416.55 2.00% 1818503189.96 2.40% 48.49%

Consumer electronics 119338834375.15 88.37% 67217502600.73 88.71% 77.54%

Other connectors and other business 3237917280.14 2.40% 1593986044.98 2.10% 103.13%

Analysis

None

28Luxshare Precision Industry Co. Ltd. Annual Report 2021

(6) Change in the scope of consolidation during the reporting period

√ Yes □ No

Luxis Technology Limited Yancheng Luxshare Precision Industry Co. Ltd. Hangzhou Xuntao Technology Co. Ltd. Rugao

Luxshare Business Management Service Partnership (LP) Lianxun Smart Equipment (Rugao) Co. Ltd. Luxshare Technology

(Xi’an) Co. Ltd. Luxshare Electronic Technology (Enshi) Co. Ltd. Luxis Technology (Kunshan) Co. Ltd. Luxshare Investment

Co. Ltd. Yancheng Luxshare Business Management Service Partnership (LP) Luxshare Smart Equipment (Yancheng) Co. Ltd.Luxis Precision Intelligent Manufacturing (Kunshan) Co. Ltd. Luxshare Smart Manufacturing & Electronic Service (Kunshan) Co.Ltd. Liding Electronic Technology (Dongguan) Co. Ltd. Luxshare Technology (Nanjing) Co. Ltd. Henan Leader Precision

Industry Co. Ltd. and Changzhi Luxshare Precision Industry Ltd. that were newly established by us Rikai Precision Technology

(Yancheng) Co. Ltd. and Zhejiang Puson Electronic Technology Co. Ltd. that were acquired by us in cash and Caldigit Holding

(Cayman) and Taihan Precision Technology Co. Ltd. that were controlled by us by contract during the reporting period are

included in the scope of consolidation. Wuxi Huihong Electronics Co. Ltd. that was transferred by us and Ji’an Jizhou Luxshare

Electronics Co. Ltd. Speedtech (LS-ICT) Co. Limited Luxshare International Cable Co. Ltd. and Luxshare-ICT International B.V.that were liquidated and deregistered during the reporting period are removed from the scope of consolidation.

(7) Material changes or adjustments in respect of business products or services of the Company during the

reporting period

□ Applicable √ N/A

(8) Major customers and suppliers

Major customers of the Company:

Aggregate sales revenue from top 5 customers (RMB) 128399408091.77

Proportion of aggregate sales revenue from top 5 customers to annual sales revenue 83.41%

Proportion of aggregate sales revenue from related parties among top 5 customers to annual sales revenue 0.00%

Particulars of top 5 customers:

No. Name of customer Sales revenue (RMB) % of annual sales revenue

1 Customer 1 114055710068.00 74.09%

2 Customer 2 5033592065.75 3.27%

3 Customer 3 3621465625.47 2.35%

4 Customer 4 3188059176.36 2.07%

5 Customer 5 2500581156.19 1.62%

Total -- 128399408091.77 83.41%

Other information of major customers:

□ Applicable √ N/A

Major suppliers of the Company:

Aggregate purchase amount from top 5 suppliers (RMB) 75982606355.38

Proportion of aggregate purchase amount from top 5 suppliers to annual purchase cost 57.96%

Proportion of aggregate purchase amount from related parties among top 5 suppliers to annual purchase cost 0.00%

Particulars of top 5 suppliers:

No. Name of supplier Purchase amount (RMB) % of annual purchase cost

1 Supplier 1 68529282195.97 52.28%

2 Supplier 2 2220179015.43 1.69%

3 Supplier 3 1986097524.70 1.52%

4 Supplier 4 1718167435.10 1.31%

29Luxshare Precision Industry Co. Ltd. Annual Report 2021

5 Supplier 5 1528880184.17 1.17%

Total -- 75982606355.38 57.96%

Other information of major suppliers:

□ Applicable √ N/A

3. Expenses

In RMB

2021 2020 Y/Y % Change Reason of material changes

Sales expenses 789908163.80 477047875.58 65.58% Primarily due to increase in the scope of consolidation and business growth

General expenses 3741908783.50 2463953208.63 51.87% Primarily due to increase in the scope of consolidation and business growth

Financial expenses 554665874.05 904828142.89 -38.70% Primarily due to fluctuations in foreign exchange rates

R&D expenses 6642300402.74 5744805136.33 15.62% Primarily due to increase in the scope of consolidation and R&D investments

Primarily due to increase in pre-tax

Income tax expenses 322238643.64 644764928.70 -50.02% deduction of differences in the exercise price of incentive shares and additional deduction

of R&D expenses

4. R&D investments

√ Applicable □ N/A

Expected effect on the

Description of major

Purpose Progress Objectives future development of

R&D project

Company

Project relating to To develop new In progress To optimize the Our R&D and

acoustic products functions and new functions of the relevant manufacturing

processes of TWS products and realize capabilities in respect

earphones headphones stable mass production of acoustic products

and other acoustic with high quality. will be improved

products develop new R&D cycle of new

products and products will be

continuously improve shortened and our

production efficiency. competencies will be

enhanced.Project relating to To develop new Partially completed To improve the While getting

smart wearable functions of smart functions automation recognition from

products wearable products and level of production customers the results

improve the production lines production of our smart wearable

process. efficiency and product business will be

yield of the relevant increased and our

products. competencies will be

enhanced.Millimeter wave To develop new Completed To make breakthroughs Our advantage in the

dielectric antenna products and new in the use on traditional vertical integration of

30Luxshare Precision Industry Co. Ltd. Annual Report 2021

components project performance and millimeter wave components will be

reduce production costs. antennas reduce the enhanced and market

dimensions of products share of the relevant

and effectively lower product lines will be

costs. increased.New-type linear motor To optimize product In progress To optimize technical Our advantage in the

project mix and reduce R&D indicators and vertical integration of

costs. cooperate with the components will be

customers in the enhanced and market

relevant tests mass share of the relevant

production and product lines will be

deliveries. increased.SIP system level To develop new In progress To upgrade our Our advantage in the

double side packaging technologies and new traditional SiP module vertical integration of

project processes and improve packaging technology components will be

production efficiency. fully fill the bottom enhanced and market

space of chips reduce share of the relevant

the residue stress after product lines will be

packaging ensure the increased.reliability of package

products and improve

the technical

capabilities of product

packaging.Project relating to To develop 400G In progress To expand the Our advantage in the

optical module high-speed optical application scenarios vertical integration of

products modules and and market for components will be

preliminary develop high-speed optical enhanced and market

next-generation optical modules develop share of the relevant

modules. product series enrich product lines will be

high-speed product increased.lines and realize mass

production of the

relevant products.Project relating to To develop In progress To develop proprietary Our technical

high-speed cables transmission cable interfaces for servers advantage in the

assemblies that provide switches communication and

high-speed signals for high-performance data center cable

super data centers and computers and other products will be

5G services. products and increase enhanced and market

the speed. share will be

increased.Project relating to To develop improve Partially completed To improve our Our product lines and

automotive wire and upgrade vehicle technical capability to market share in the

31Luxshare Precision Industry Co. Ltd. Annual Report 2021

harnesses wire harnesses motor develop automotive field of automotive

wire harnesses wire harness products will be further

automotive steering satisfy different increased.wire harnesses new customization

energy battery pack requirements and

wire harnesses and increase operating

other products. revenue.Project relating to To develop high and Partially completed To improve our Our product lines and

automotive connectors low voltage connectors manufacturing market share in the

high-speed connectors capability and field of automotive

customized connector production efficiency. will be further

structures and other Our proprietary gigabit increased.automotive connectors. Ethernet connector

adopts a wholly

shielded double cable

connection structure

and has been widely

used on infotainment

systems ADASs

domain controllers and

other products.Project relating to To develop Partially completed To improve our Our product lines and

power system of high-voltage manufacturing market share in the

electric vehicles high-current battery capability and field of automotive

disconnect control production efficiency. will be further

module new-generation The process increased.on-board bidirectional development trial

DC power supply and production and PPAP

other power system certification in respect

products for electric of our new-generation

vehicles. on-board bidirectional

DC power supply have

been completed.Project relating to To develop RSU TCU Partially completed Our IoV smart RSU has Our product lines and

automotive smart and other automotive realized remote market share in the

interconnect products interconnect products. coverage short field of automotive

communication delay will be further

high success rate of increased.message sending and

other functions.Multi-cavity The robot will change Completed To replace manual Through automation

automatic sorting the operation mode of handling identification upgrading of

robot project manual cavity-by-cavity plate feeding and other production lines our

plate feeding on the labor intensive production efficiency

32Luxshare Precision Industry Co. Ltd. Annual Report 2021

production lines for operations and realize and product yield will

micro products in the cavity-by-cavity plate be improved.injection molding feeding for micro

workshop in the past products made from

greatly improve injection molding.workplace safety

realize automatic

production and

promote automation

upgrading in the

industry. Through

further upgrading of the

equipment to improve

the stability of the

equipment during

production and finally

realize automatic

production of micro

products in the injection

molding workshop.AI automatic The AI automatic Completed To replace manual Through automation

inspection system inspection system will handling inspection upgrading of

project change the traditional and other labor production lines our

operation mode of intensive operations production efficiency

visual inspection and realize precise and product yield will

realize automatic inspection of be improved.inspection and promote appearance dimensions

automation upgrading and other essential

in the industry. Through factors of precision

further upgrading of the components for

equipment to improve electronic products.the reliability and

stability of production

and finally realize

unmanned workshops.Particulars of R&D personnel:

2021 2020 Y/Y % change

Number of R&D personnel 16103 15154 6.26%

Proportion of R&D personnel to total number of employees 7.06% 8.79% -1.73%

Education background of R&D personnel - - -

Undergraduate 7393 7126 3.75%

Master 260 256 1.56%

Others 10199 9310 9.55%

Ages of R&D personnel - - -

Below 30 8325 7865 5.85%

30-40689765075.99%

33Luxshare Precision Industry Co. Ltd. Annual Report 2021

Above 40 881 782 12.66%

Particulars of R&D expenses:

2021 2020 Y/Y % Change

Amount of R&D expenses (RMB) 6642300402.74 5744805136.33 15.62%

Proportion of R&D expenses to operating revenue 4.31% 6.21% -1.90%

Amount of R&D expenses capitalized (RMB) 0.00 0.00 0.00%

Proportion of capitalized R&D expenses to total R&D expenses 0.00% 0.00% 0.00%

Analysis of the cause and effect of significant change in the composition of R&D personnel:

□ Applicable √ N/A

Analysis of significant change in the proportion of R&D expenses to operating revenue compared with 2019:

□ Applicable √ N/A

Analysis and reasonableness of significant change in the proportion of R&D expenses capitalized:

□ Applicable √ N/A

5. Cash flows

In RMB

Item 2021 2020 Y/Y % Change

Cash provided by operating activities 152974773173.48 101344544382.43 50.95%

Cash used in operating activities 145690006256.48 94471332896.38 54.22%

Net cash flows from operating activities 7284766917.00 6873211486.05 5.99%

Cash provided by investment activities 59103742247.41 56134501620.87 5.29%

Cash used in investment activities 67483404233.19 65282235798.95 3.37%

Net cash flows from investment activities -8379661985.78 -9147734178.08 -8.40%

Cash provided by financing activities 42545854141.42 31843182893.74 33.61%

Cash used in financing activities 42935782234.50 25056689251.71 71.35%

Net cash flows from financing activities -389928093.08 6786493642.03 -105.75%

Net increase in cash and cash equivalents -1543267723.26 4317464527.08 -135.74%

Analysis of main causes of material changes in the related data:

√ Applicable □ N/A

1. The cash provided by operating activities was RMB152974773200 an increase of 50.95% year on year primarily due to an

increase in sales sales revenue collected and tax rebates received.

2. The cash used in operating activities was RMB145?690?006?300 an increase of 54.22% year on year primarily due to an increase

in the raw materials purchased and employee benefits paid.

3. The net cash flows from financing activities was -RMB389?928?100 a decrease of 105.75% year on year primarily due to

repayment of short-term borrowings loans and interest during the reporting period.Analysis of significant difference between net cash flows from operating activities during the reporting period and net profit in

current year:

□ Applicable √ N/A

V. Analysis of non-main business

√ Applicable □ N/A

In RMB

34Luxshare Precision Industry Co. Ltd. Annual Report 2021

Amount % of total profit Reason

Whether or not

sustainable

Income from investments and wealth

Investment income 689386649.74 8.47% management products classified as financial No

assets at fair value through profit or loss

Gain or loss on changes in fair

value -115737751.66 -1.42%

Investment income on financial assets at fair

value through profit or loss No

Impairment loss on assets -162790335.12 -2.00% Allowance for impairment of inventories and fixed assets No

Non-operating income 21096536.60 0.26% Revenue from retirement of assets No

Non-operating expenses 45672434.05 0.56% Loss on disposal of fixed assets No

Gain on disposal of assets -45266592.65 -0.56% Disposal of production equipment No

Other gains 853542165.37 10.48% Government grants No

Credit loss -26875504.69 -0.33% Impairment loss on accounts receivable and other receivables No

VI. Analysis of assets and liabilities

1. Material changes in components of assets

In RMB

December 31 2021 January 1 2021

Y/Y % % of total % of total Change Reason of material change Amount assets Amount assets

Cash and bank

14204618186.4311.78%10528245765.9315.01%-3.23%

balances

Business growth (including

Accounts receivable 31623185946.25 26.23% 13839155340.47 19.73% 6.50% increase in the scope of

consolidation)

Contract assets 0.00% 0.00% 0.00%

Increase in inventory storage

level along with increase in our

Inventories 20900755733.15 17.33% 13211009381.15 18.83% -1.50% scale of operation (including

increase in the scope of

consolidation)

Investment properties 59000690.72 0.05% 47592110.24 0.07% -0.02%

Long-term equity

1125605226.030.93%1208540333.291.72%-0.79%

investment

Increase in investment in factory

Fixed assets 34113259322.43 28.29% 19761012854.95 28.17% 0.12% buildings dormitories and equipment (including increase in

the scope of consolidation)

Factory building dormitory and

workshop renovation projects in

Construction in

3685336499.02 3.06% 1596064894.58 2.27% 0.79% progress and equipment that has

progress not yet been accepted (including

increase in the scope of

consolidation)

Adoption by us of the new lease

Right of use assets 425011542.28 0.35% 149189002.32 0.21% 0.14% accounting standard since

January 1 2021

Replenishment of working

Short-term borrowings 11919635337.99 9.89% 7577068798.49 10.80% -0.91% capital (including increase in the

scope of consolidation)

Contract liabilities 268506246.98 0.22% 152512971.36 0.22% 0.00% Advances from clients

35Luxshare Precision Industry Co. Ltd. Annual Report 2021

Increase in loans to satisfy the

Long-term loans 5025096193.09 4.17% 1495199238.41 2.13% 2.04% requirements of new projects (including increase in the scope

of consolidation)

Adoption by us of the new lease

Lease liabilities 315093483.55 0.26% 144462685.91 0.21% 0.05% accounting standard since

January 1 2021

Financial assets held Forward exchange facilities

2107118105.04 1.75% 3160064470.41 4.50% -2.75% wealth management and other

for trading investments

Prepayments for materials and

Advances to suppliers 406016492.61 0.34% 179160621.29 0.26% 0.08% customs deposits (including increase in the scope of

consolidation)

Share transfer prices export

Other receivables 598456702.88 0.50% 407990780.79 0.58% -0.08% rebates and deposits and

insurance indemnities receivable

Other current assets 2161055820.73 1.79% 1804485645.49 2.57% -0.78% Input tax credits and prepaid and refundable income tax

Factory building and workshop

Long-term deferred

733015722.42 0.61% 488087044.97 0.70% -0.09% renovation expenses (including

expenses increase in the scope of

consolidation)

Share-based payments

unrealized profit on internal asset

Deferred tax assets 891215468.53 0.74% 355834434.21 0.51% 0.23% transactions government grants

deductible losses before tax and

other timing differences

Prepayments for equipment

Other non-current

1904305181.49 1.58% 1223199642.61 1.74% -0.16% engineering projects and land

assets (including increase in the scope

of consolidation)

Notes payable 234500590.93 0.19% 128572111.54 0.18% 0.01% Increase in note transactions

Increase in raw materials

purchased in order to fulfill

Accounts payable 45416165667.67 37.67% 23051557603.83 32.86% 4.81% orders along with our business

growth (including increase in the

scope of consolidation)

Other payables 382391106.17 0.32% 146162097.14 0.21% 0.11% Accrued expenses and security deposits payable

Short-term bonds and

Other current

3623423072.87 3.01% 623257555.89 0.89% 2.12% inter-company trade account

liabilities payable (including increase in

the scope of consolidation)

Deferred income 538556944.18 0.45% 425345982.64 0.61% -0.16% Government grants relating to capital

Accelerated depreciation of fixed

assets and temporary difference

Deferred tax liabilities 1272092467.86 1.06% 966092212.95 1.38% -0.32% arising from increase in appraised value of business

combinations not under common

control

Analysis of high proportion of overseas assets:

□ Applicable √ N/A

36Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Assets and liabilities at fair value

√ Applicable □ N/A

In RMB

Beginning Gain or loss on

Aggregate Impairment loss

Item changes in fair changes in fair recognized in Amount acquired in Amount sold in the Other balance value value recorded the current the reporting period reporting period changes

Ending balance

in equity period

Financial assets

1. Financial assets held for

trading (excluding 2854676050.46 73732025.24 19182537140.74 20119745754.45 1991199461.99

derivative financial assets)

2. Derivative financial

assets 305388419.95 -189469776.90 115918643.05

3. Investment in other

equity instruments 138074571.56 96140150.00 1761426.86 235976148.42

Subtotal of financial assets 3298139041.97 -115737751.66 96140150.00 19182537140.74 20119745754.45 1761426.86 2343094253.46

Investment in equity

instruments 5700000.00 5700000.00

Total 3298139041.97 -115737751.66 96140150.00 19188237140.74 20119745754.45 1761426.86 2348794253.46

Financial liabilities 0.00 41436.00 41436.00

Other changes:

Other changes are the principal of other equity instruments included due to increase in the scope of consolidation.Whether there’s any material change in the measurement properties of main assets of the Company during the reporting period?

□ Yes √ No

3. Encumbrances on assets as of the end of the reporting period

On September 30 2021 the 4th meeting of the 5th Board of Directors considered and adopted the Proposal for Applying for an Acquisition Loan from the Banks and Pledging the Shares of the

Subsidiary pursuant to which we intended to apply to four banks for a syndicated acquisition loan of up to RMB3.4 billion for a term of five years which would be mainly used to replace our

capital contribution already made to Rikai Yancheng. We pledged 48.013% shares of Rikai Yancheng as security for such acquisition loan for a term of five years. The relevant information was

disclosed in our Announcement on Applying for an Acquisition Loan from the Banks and Pledging the Shares of the Subsidiary (No. 2021-080). During the reporting period we completed theprocedures relating to the pledge of the shares of Rikai Yancheng for a term of five years. See “Section X Financial Report – VII. Notes to Items in Consolidated Financial Statements – 81.Assets with restricted ownership or right of use”.

37Luxshare Precision Industry Co. Ltd. Annual Report 2021

VII. Analysis of investments

1. Overall situation

√ Applicable □ N/A

Amount of investment in 2021 (RMB) Amount of investment in 2020 (RMB) Y/Y % Change

7623854176.003122574000.00144.15%

2. Major equity investments acquired in the reporting period

√ Applicable □ N/A

In RMB

Investment

Status as of Whether or not Date of Disclosure

Method of Amount of Shareholding Source of Term of Expected income/ loss in

Investee Main business Partner Product type the balance involved in any disclosure (if reference

investment investment percentage funds investment income the reporting

sheet date litigation any) (if any)

period

Technology development

technical consulting and

technical services in

respect of computer

accessories; design R&D

and production of

precision stamping molds

(precision ≥ 0.02mm)

precision cavity molds

Rikai (precision ≥ 0.05mm) Announce

Precision metal product molds ment No.Technolog non-metal product molds 2021-017

Capital Self-owned Electronic February 4

y and standard parts for 6?000000000.00 50.01% N/A Long-term Paid in full 0.00 0.00 No published

injection funds components 2021

(Yanchen molds; production of on

g) Co. high-temperature resistant www.cnin

Ltd. molded insulating fo.com.cn

materials stamped

hardware parts rivets

shafts mechanical

components and other

components for 3C

electronics products;

industrial design product

design (exterior design

structural design circuit

38Luxshare Precision Industry Co. Ltd. Annual Report 2021

design graphic design

etc.); lease of own idle

equipment; wholesale

commission agency

(except auction) import

export and supporting

services in respect of the

aforesaid products and

related components.Business not subject to

licensing: manufacturing

of computer software

hardware and peripherals.Total -- -- 6?000000000.00 -- -- -- -- -- -- 0.00 0.00 -- -- --

3. Major non-equity investments that have not yet been completed in the reporting period

□ Applicable √ N/A

4. Investment in financial assets

(1) Investment in securities

√ Applicable □ N/A

In RMB

Gain or loss on Aggregate Amount

Initial Beginning Amount sold in Gain or loss in

Short Method of changes in fair changes in fair acquired in Ending carrying Accounting Source of

Type of security Security code investment carrying the reporting the reporting

name measurement value in the value recorded in the reporting amount item funds

cost amount period period

reporting period equity period

Investment

Stock listed on

Tony in other Self-owned

domestic or 603595 22500000.00 Fair value 114221319.04 96057510.08 162951644.67 0.00 0.00 96057510.08 210278829.12

Electronic equity funds

overseas market

instruments

Total 22500000.00 -- 114221319.04 96057510.08 162951644.67 0.00 0.00 96057510.08 210278829.12 -- --

Disclosure date of the announcement of the Board

of Directors approving the investment in securities

Disclosure date of the announcement of the

shareholders’ meeting approving the investment in

39Luxshare Precision Industry Co. Ltd. Annual Report 2021

securities (if any)

(2) Investment in derivatives

√ Applicable □ N/A

In RMB0’000

% of ending

Allowance balance to the Actual gain or

Whether or not Initial

Type of Date of Date of Beginning Amount acquired in Amount sold in the for net asset as at loss in the

Counterparty Affiliation a related-party investment Ending balance

derivative commencement termination balance the reporting period reporting period impairment the end of the reporting

transaction cost

loss (if any) reporting period

period

Bank Non-affiliate No Forward 48545.26 48545.26 534737.11 578098.28 5184.08 0.15% 19739.28

Bank Non-affiliate No Option 463920.39 463920.39 1659594.71 1725671.42 397843.68 11.27% 49352.43

Total 512465.65 -- -- 512465.65 2194331.82 2303769.7 403027.76 11.42% 69091.71

Source of funds Self-owned funds

Whether or not involved in any litigation N/A

Disclosure date of the announcement of the Board of

January 23 2021

Directors approving the investment in derivatives (if any)

Disclosure date of the announcement of the shareholders’

meeting approving the investment in derivatives (if any)

1. We conduct foreign exchange derivative transactions for the purpose of fixing costs and avoiding and preventing foreign exchange and interest rate risks and

prohibit any speculation.

2. We have established strict business management policy regarding financial derivative transactions which contain explicit provisions on the principle of operation

approving power internal operating process information segregation measures internal risk controls information disclosure and other issues relating to financial

derivative transactions to control the risks associated with such transactions.Analysis of risks associated with the derivatives held in the

3. We carefully examine the terms of contracts entered into with the relevant banks and strictly implement the risk management policy to prevent legal risks.

reporting period (including without limitation market risk

4. Our Finance Department continuously follows up on the changes in the market price or fair value of the relevant foreign exchange derivatives promptly assesses

liquidity risk credit risk operational risk and legal risk) and

the changes in risk exposures of such foreign exchange derivatives reports to the management on a regular basis promptly reports the abnormal situations

related risk control measures

discovered calls attention to the relevant risks and takes the appropriate emergency measures.

5. In order to prevent any delay in the delivery of forward exchange contracts we attach great importance to the management of accounts receivable and have

established safety management measures to prevent any delay in the payment of accounts receivable.

6. Our Internal Audit Department is responsible for supervising and auditing the decision-making management execution and other issues in respect of foreign

exchange derivative transactions.Changes in the market price or fair value of the derivatives

held in the reporting period (in the analysis of the fair value Change in the fair value of a foreign exchange derivative is the difference between its fair market price in the month in which the delivery date determined by the

of derivatives the specific approaches assumptions and Company falls and its contract price.parameters used shall be disclosed)

40Luxshare Precision Industry Co. Ltd. Annual Report 2021

Whether there’s any material change in the accounting

policies and accounting principles for the measurement of

No material change

derivatives in the reporting period as compared with the

preceding reporting period

The Company conducts foreign exchange derivative transactions for the purpose of avoiding foreign exchange risk arising from fluctuations in the foreign exchange rates

Special opinion issued by the independent directors of RMB and effectively controlling the uncertainties of costs caused by foreign exchange risk. The Company has established the Business Management Policy Regarding

regarding the Company’s investment in derivatives and Financial Derivative Transactions to enhance risk management and control over foreign exchange derivative transactions. In addition the Company only provides

related risk control measures self-owned funds rather than any offering proceeds as deposit for derivative transactions. The review voting and other procedures relating to such transactions have

complied with the Company Law the AOA and other applicable regulations.

5. Use of offering proceeds

√Applicable □N/A

(1) Description of use of offering proceeds

√ Applicable □ N/A

In RMB0’000

Total amount of

Total amount of Aggregate amount Total amount of offering Aggregate amount of Percentage of Total amount Purpose and

Total offering proceeds

Year of Method of offering proceeds of offering proceeds whose purpose offering proceeds offering proceeds of unused whereabouts of

offering that has remained

offering offering used in the proceeds that has was changed in the whose purpose has whose purpose offering unused offering

proceeds unused for more

reporting period been used reporting period been changed has been changed proceeds proceeds

than two years

Public offering

2020 of convertible 300000 24478.69 298881.41 0 0 0.00% 0 N/A 0

corporate bonds

Total -- 300000 24478.69 298881.41 0 0 0.00% 0 -- 0

Description of use of offering proceeds

Pursuant to the Reply on Approval of Public Offering of Convertible Corporate Bonds by Luxshare Precision Industry Co. Ltd. from the China Securities Regulatory Commission (CSRC) we publicly issued 30?000?000 convertible

corporate bonds of par value of RMB100.00 each and raised RMB3?000?000?000.00 in total. After deduction of the underwriter fee and sponsor fee of RMB14400000.00 (inclusive of tax) paid to our underwriter CITIC Securities

Co. Ltd. the total subscription amount received was RMB2?985?600?000.00 and after deduction of legal fee audit and capital verification fee credit rating fee information disclosure and other charges the net proceeds from this

offering were RMB2?984?743?424.52.In 2020 we used the offering proceeds of RMB2744027590.66 of which RMB2744027273.53 was invested in the relevant fund-raising investment projects (RMB2001653153.13 was used to replace to the amount

pre-invested) and RMB317.13 was used to pay the relevant account management fee service charge and other charges.In 2021 we used the offering proceeds of RMB 244786916.51 of which RMB244786780.12 was invested in the relevant fund-raising investment projects and RMB136.39 was used to pay the relevant account management fee

service charge and other charges. The interest generated by the offering proceeds in 2021 is RMB657387.96. As of December 31 2021 the balance of the account of offering proceeds was RMB0.00 and the special account for

depositing the offering proceeds was cancelled.

(2) Committed fund-raising investment projects

√ Applicable □ N/A

In RMB0’000

41Luxshare Precision Industry Co. Ltd. Annual Report 2021

Whether

Whether the Progress of Whether the

Total Total Amount Aggregate amount Date that the Income there’s any

project has investment as of project has

Committed investment project and use of committed investment invested in the already invested as project is ready earned in the significant

been changed the end of the produced

over-raised funds investment amount as reporting of the end of the for its intended reporting change in the

or partially reporting period the desired

amount adjusted (1) period reporting period (2) use period feasibility of

changed (3) =(2)/(1) result

the project

Committed investment project

Smart mobile terminal module production

No 110000 110000 24249.84 110145.15 100.13% March 1 2021 84759.2 N/A No

line upgrading and expansion project

Smart wearable equipment components

production line upgrading and expansion No 60000 60000 25.23 60031.76 100.05% May 1 2021 33952.62 Yes No

project

New smart wearable equipment project

with an annual production capacity of 4 No 60000 60000 0.04 60026.58 100.04% August 1 2020 12682.33 Yes No

million sets

Replenishment of working capital No 70000 70000 203.56 68677.91 98.11% N/A No

Subtotal - 300000 300000 24478.67 298881.4 -- - 131394.15 - -

Use of over-raised funds

N/A

Total - 300000 300000 24478.67 298881.4 -- -- 131394.15 - -

Failure to meet the scheduled progress and The smart wearable equipment components production line upgrading and expansion project failed to produce the desired result primarily due to shortage of critical raw materials

produce the desired result and reason resulting in a decrease in the operating results. We activelystocked up with the relevant raw materials so the profit of the project reached 96.62% of the predicted profit in 2021 and

thereof (please describe on a project by 99.14% of the predicted profit in aggregate.project basis)

Reason of significant change in the None

feasibility of the project

Amount and use of over-raised funds and N/A

progress of use thereof

Change in the place of the fund-raising N/A

investment project

Adjustment of the method of N/A

implementation of the fund-raising

investment project

Funds already invested in the fund-raising Applicable

investment project

We have already invested RMB2?001?653?153.13 of self-raised funds in the projects for which the public offering of convertible corporate bonds was made in 2020 prior to the

completion thereof as verified by BDO China Shu Lun Pan Certified Public Accountants LLP in its Report Xin Kuai Shi Bao Zi [2020] No. ZB11783 dated December 1 2020.

42Luxshare Precision Industry Co. Ltd. Annual Report 2021

Temporary replenishment of working N/A

capital with the unused offering proceeds

Amount of surplus offering proceeds and N/A

reason thereof

Purpose and whereabouts of unused As of December 31 2021 the balance of the account of offering proceeds was RMB0.00 and the offering proceeds were used in full.offering proceeds

Problems and other matters existing in the None

use and disclose of offering proceeds

(3) Changes in the fund-raising investment projects

□ Applicable √ N/A

There’s no change in the fund-raising investment projects during the reporting period.VIII. Sale of material assets and equities

1. Sale of material assets

□ Applicable √ N/A

No material asset has been sold during the reporting period.

2. Sale of material equities

□ Applicable √ N/A

IX. Analysis of major subsidiaries and associates

√ Applicable □ N/A

Major subsidiaries and associates representing more than 10% of the net profit of the Company:

In RMB

Company name Type Main business Registered capital Total assets Net assets Operating revenue Operating profit Net profit

Luxshare Purchase and sale of electronic products data lines connection

Precision Subsidiary lines connectors computer and peripherals plastic and hardware USD5000000 59466332306.97 5491597678.03 135508345248.07 3286048713.01 3236547298.11

Limited products.Sales and services in respect of internal and external connection

ICT-LANTO

Subsidiary lines for IT communication and consumer electronic applications USD153290323 39670045411.95 3756939895.20 33200135705.13 860084363.00 729281287.52

LIMITED

and precision connectors.Rikai Precision subsidiary Technology development technical consulting and technical RMB6264312296 32118051618.12 10996563441.13 49727123010.93 1255106809.05 1092231638.01

43Luxshare Precision Industry Co. Ltd. Annual Report 2021

Technology services in respect of computer accessories; design R&D and

(Yancheng) Co. production of precision stamping molds (precision ≥ 0.02mm)

Ltd. precision cavity molds (precision ≥ 0.05mm) metal product molds

non-metal product molds and standard parts for molds; production

of high-temperature resistant molded insulating materials stamped

hardware parts rivets shafts mechanical components and other

components for 3C electronics products; industrial design product

design (exterior design structural design circuit design graphic

design etc.); lease of own idle equipment; wholesale commission

agency (except auction) import export and supporting services in

respect of the aforesaid products and related components. Business

not subject to licensing: manufacturing of computer software

hardware and peripherals.Computer peripherals connection lines and connectors; new-type

electronic components (electronic devices) instruments and

accessories for communication and IT purpose plastic rubber and

hardware products; research development production and sale of

special electronic equipment testing instruments tools molds

remote control dynamic models and related supplies and

components; production and sale of power supply units and

wireless transmission products; development of software; import

and export of goods and technology (except any business that is

Lanto

subject to licensing restricted or prohibited pursuant to the

Electronic Subsidiary RMB2?320?000?000 18989845478.63 7396344211.40 24850269766.84 1530454712.74 1374091215.23

applicable laws and administrative regulations) (any business

Limited

subject to approval according to law may only be operated with the

approval of the competent authorities). Business not subject to

licensing: manufacturing of automotive components and

accessories; research and development of automotive components;

wholesale of automotive components and accessories; sale of

mechanical components and components; manufacturing of

opto-electronic components; sale of opto-electronic components;

research and development of special electronic materials; research

and development of household appliances.

44Luxshare Precision Industry Co. Ltd. Annual Report 2021

Subsidiaries acquired and disposed of during the reporting period:

√ Applicable □ N/A

Company name Method of acquisition or disposal Effect on the production operation and results of the Company taken as a whole

Rugao Luxshare Business Management Service No significant effect on the production

Partnership (LP) Newly established operation and results of the Company taken as a whole

No significant effect on the production

Luxis Technology Limited Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Luxshare Precision Industry (Yancheng) Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Luxis Technology (Kunshan) Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Luxshare Electronic Technology (Enshi) Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Lianxun Smart Equipment (Rugao) Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Luxshare Technology (Xi’an) Co. Ltd. Newly established operation and results of the Company

taken as a whole

Luxis Precision Intelligent Manufacturing No significant effect on the production

(Kunshan) Co. Ltd. Newly established operation and results of the Company taken as a whole

Liding Electronic Technology (Dongguan) Co. No significant effect on the production

Ltd. Newly established operation and results of the Company taken as a whole

Luxshare Smart Manufacturing & Electronic No significant effect on the production

Service (Kunshan) Co. Ltd. Newly established operation and results of the Company taken as a whole

No significant effect on the production

Luxshare Investment Co. Ltd. Newly established operation and results of the Company

taken as a whole

Yancheng Luxshare Business Management No significant effect on the production

Service Partnership (LP) Newly established operation and results of the Company taken as a whole

No significant effect on the production

Luxshare Technology (Nanjing) Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Luxshare Smart Equipment (Yancheng) Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Changzhi Luxshare Precision Industry Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Hangzhou Xuntao Technology Co. Ltd. Newly established operation and results of the Company

taken as a whole

No significant effect on the production

Henan Leader Precision Industry Co. Ltd. Newly established operation and results of the Company

taken as a whole

CALDIGIT HOLDING LIMITED Controlled No significant effect on the production

45Luxshare Precision Industry Co. Ltd. Annual Report 2021

operation and results of the Company

taken as a whole

No significant effect on the production

Taihan Precision Technology Co. Ltd. Controlled operation and results of the Company

taken as a whole

Capital injection and acquisition of No significant effect on the production Rikai Precision Technology (Yancheng) Co. Ltd. control operation and results of the Company taken as a whole

No significant effect on the production

Zhejiang Puson Electronic Technology Co. Ltd. Purchase of shares operation and results of the Company

taken as a whole

No significant effect on the production

Caseteck Singapore PTE. LTD. Purchase of shares operation and results of the Company

taken as a whole

No significant effect on the production

Ji’an Jizhou Luxshare Electronics Co. Ltd. Deregistered operation and results of the Company

taken as a whole

No significant effect on the production

Speedtech (LS-ICT) Co. Ltd. Deregistered operation and results of the Company

taken as a whole

No significant effect on the production

Luxshare-ICT International B.V. Deregistered operation and results of the Company

taken as a whole

No significant effect on the production

Luxshare International Cable Co. Ltd. Deregistered operation and results of the Company

taken as a whole

No significant effect on the production

Wuxi Huihong Electronics Co. Ltd. Sale of shares operation and results of the Company

taken as a whole

Particulars of major controlled subsidiaries and associates:

N/A

X. Structured entities controlled by the Company

□ Applicable √ N/A

XI. Prospects for future development of the Company

1. Situations of the industry

In recent years despite certain fluctuations the global smart mobile phone market size has been growing generally. According

to IDC the global smart phone shipments reached 1.35 units in 2021 representing an increase of 7% year on year. After the arrival

of the 5G era the CAGR of the global smart mobile phone market is expected to reach 3.6% from 2020 to 2025. The application of

new-generation communication technologies will further drive the market demands for mobile phones give rise to competitions over

diversified functions and upgraded performance on the existing market for mobile phones and accelerate the upgrading of precision

electronic components and assemblies resulting in an increase in the market size of precision electronic components and assemblies

and product variety. The advancement of 5G and AI technologies will promote the development of different kinds of smart mobile

smart wearable AR/VR/MR smart home smart display and other IoT devices. Driven by the IoT ecosystem and market trends and

call for green and environment friendly sustainable development the terminal products having smart interconnect health check

environment friendly and other functions will deeply affect people’s habits and customs and be widely accepted by consumers of all

ages. The acceleration of upgrading of terminal products will drive the increase in the integration level of electronic components

contained therein and improvement of technological level. The one-stop solution providers that are able to provide the brand

customers with better production processes and higher integration level and require the input of less resources will get more orders

for related components and finished products. Our business development and industrial operation are expected to fully benefit from

this trend.In the field of communication and data center the series of technical innovation and emerging of new technologies promote the

46Luxshare Precision Industry Co. Ltd. Annual Report 2021

evolution from traditional IT infrastructure to data infrastructure and along with the continuous development of the Internet

e-commerce video cloud computing and other Internet vertical industries have been rapidly springing up and the global data center

market has come into multiple periods of rapid growth. Driven by 5G big data and edge computing technologies the ICT industry

puts forward higher requirements for data transmission hardware equipment shows a tendency towards gradual opening of interfaces

and high integration of functions and interconnect components show a tendency towards high speed high density high reliability

and low loss. In the technology evolution from 4G to 5G base stations tend to have more ports and more wave numbers. Small size

and weather resistance put forward increasingly high requirements for precision manufacturing. Compared with manufacturers of

traditional communication products we will leverage our rich experience in precision manufacturing of consumer electronic products

in the new communication business and are expected to get more and better business opportunities. The communication interconnect

market is witnessing rapid upgrading of products and enters an era of tremendous data. Along with the sharp increase in data volume

the demands for interconnect products for data processing will grow sharply.The development of 5G communication technology automotive wireless communication technology AI and other

new-generation information technologies and ever increasing demands of consumers for automotive safety and entertainment during

ride among others will promote the continuous increase in the electrification level of vehicles resulting in further extension of

application scenarios for automotive electronics and increase in penetration rate which will be beneficial for the continuous and

rapid development of the industry of automotive electronics. As the future development direction of vehicles new energy vehicles

enjoy the support of national policies their market size grows steadily and the penetration of electric vehicles increases continuously.China has the largest automotive market with the highest level of openness and inclusion and most consumers in the world utilizes

the most advanced smart vehicle technologies and attracts all major carmakers in the world. China ranks among the first in the world

in terms of number of smart vehicle brands and models. The existence of a variety of players on the automotive market will promote

the industry to make innovations and bring more opportunities and challenges to component manufacturers. We have built a

complete development framework covering components modules sub-systems and whole systems and made complete deployments

for core products.

2. Future growth strategy

On the basis of our core management’s forward-looking plans in respect of market products and customers and through our

employees’ unremitting efforts to work conscientiously fulfill all tasks and make innovations we have made diversified integrated

and coordinated strategic deployments in the fields of consumer electronics communication and automotive. In light of the new

market situations we clearly know that opportunities coexist with challenges and will keep investing in the future and give full play

to our strong core competencies and advantages in various areas to provide more core value for the industry and our customers.In the next few years the consumer electronics business will continue to occupy an important position in the Company. We will

continue to implement and deepen the concept of vertical integration from components modules to system and strive to change the

traditional supply ideas and approaches restructure the supply chain and maximize the synergistic effect to continue to improve our

capability to create value for our customers and seek sustainable development. Meanwhile with respect to certain core modules and

processes we will follow the strategic principle of “old products new customers and new market” strive to extend and deepen the

application of products and increase their shares on different markets and among different customers to further improve our ability

to prevent operating risks. In light of the general economic development trend of enhancing internal and external circulations and the

general background that huge demands for consumer electronic products will be stimulated the smart consumer electronic products

that change life with technology will grow vigorously. Our products include smart wearable smart home smart display etc. We have

strong comprehensive capabilities in respect of core components and system assembly for complete units and have made full

preparations for new products/businesses. In the field of AR/VR/MR we will make complete and in-depth product deployment

leverage our remarkable advantages in production process lean production automation and other areas and strive to make good

achievements in the new area. In the field of communication interconnect by focusing on technology development and combining

the efforts of enterprises universities and research institutes we are leading the way in certain market segments in the world. In the

context of the “Eastern Data Western Computing” project we will actively exploit all-round and multi-level development

opportunities. In the future we will adhere to the strategic principle of integrating “application development and early research”

closely follow the market trends and frontier technologies and strive to make all-round breakthroughs on more market segments.With respect to the radio frequency communication business we will focus on the strategic plan of “core components + modules +system” make continuous investments in design and R&D improve the capability to produce core components on our own and

improve our internal operation efficiency in lean production supply chain management and other areas through transformation and

upgrading towards digitalization. Facing the business opportunities brought by “electrification” “intelligentization” and

“interconnection” of vehicles to Chinese automotive companies we have established clear strategic objectives that is to focus on the

tier-1 core component market. In the waves of electrification of automotive consumption the stable supply pattern in the past will be

broken and comprehensive manufacturers that have rich experience in both the fields of consumer electronics and automotive will

get more business opportunities. In the next few years we will continue to apply our experience of precision manufacturing in the

field of consumer electronics and communication and our capability to develop communication-level high speed transmission

solutions to the automotive business and give full play to our advantages. Meanwhile we will continuously improve our tier-1

47Luxshare Precision Industry Co. Ltd. Annual Report 2021

capabilities on the basis of our joint venture vehicle ODM platform and embrace the new challenges and new opportunities brought

by the flourishing era of smart EV.

3. Business plan for the next year

In 2021 though we faced all sorts of challenges from the internal and external environment we always stood in awe of market

opportunities. We worked hard to fulfill all tasks and overcome all kinds of difficulties while accomplishing the objectives

established at the beginning of the year and developed the business plan for the next year

In 2022 we will continue to exploit our main business and firmly implement the established business plans. While seeking new

opportunities in respect of component module and system solutions on the consumer electronics smart mobile smart wearable and

other IoT markets such as display modules for smart mobile terminals rear cover modules for smart mobile terminals voice coil

motors RF front modules AR/VR/MR we will focus on the development of automotive communication industrial energy

healthcare and other new markets new materials new processes new applications and new technologies. With respect to entities and

businesses newly acquired or incubated we will fully leverage our strengths and give support in customer resources supply chain

resources lean production automation digitalization intelligentization etc. in order to achieve the strategic objectives of rapid

cultivation and benefit amplification. With respect to the automotive business we will continue to cooperate with our domestic and

foreign brand customers in the development of components and on the basis of automotive “nervous” system further expand the

lines of connectors (high-voltage low-voltage and high-speed connectors Busbar etc.) new energy (PDUs BDUs inverters energy

storage etc.) smart cabin (domain controllers infotainment system multi-media instrument panels etc.) smart interconnect (RSUs

TCUs etc.) and other products. Meanwhile in reliance on the vehicle ODM platform jointly established with Chery that provides

our core automotive component business with a frontier R&D design and mass production platform and access to the overseas

market we will vigorously develop our tier-1 business. Our superior products will have an opportunity to grow from 0 to 1 through

the incremental business provided by other brand customers of this ODM platform and Chery and we will leverage our advantages

to take part in the competition to have our tier-1 products pass validation by the brand customers. Our medium-to-long term goal is

to grow into a tier-1 manufacturer in the global automotive component industry in the next three to five years. With respect to the

communication business we always regard the technical capabilities as the foundation for our business development. We will drive

the growth of electric connection optical connection RF communication thermal management and other existing core component

products by leveraging our technologies and strong precision manufacturing capability and through vertical integration make further

deployments in the server and other whole unit assembly business center on the “complete unit + core components” double

development strategy and strive to grow into a comprehensive solution provider offering all kinds of products in the field of data and

communication. In 2022 while seeking business development we will work harder to improve our operation and management

capabilities further enhance our platforms to ensure that they meet the development requirements of the relevant business segments

and incorporate digital management in all links in operation. With respect to organization management cadre management and

performance incentives we will continue to explore the ways to upgrade and optimize the current management modes through

continuous improvement of mechanisms effectively arouse the initiative of cadres and pool the wisdom and efforts of everyone to

give full play to the organizational effectiveness.

4. Capital required for future development strategy and capital utilization plan

As of December 31 2021 our equity-debt ratio was 62.03%. In 2022 our business is expected to maintain rapid growth and the

exploitation of new markets and entry of production of new projects require enormous capital. Therefore we published the financing

plan by private offering of shares in February 2022 in order to support our sustainable development in the diversified field of

consumer electronics and automotive in the next few years. Along with the improvement of our position in the industry and

stabilization of our relationship with customers we have obtained certain competitive advantages. We will continue to strictly control

capital expenditures in each project regularly analyze and review the return on investment in each capital expenditure project and

continue to improve our management of accounts receivable inventories and other areas to maximize the efficiency of capital

utilization. We will consider all available sources of financing at different periods according to the requirements of our development

strategy to create more value for our shareholders.

5. Future risks

(1) Risk of fluctuation of macro economy

The numerous uncertainties existing in the domestic and foreign macro environment at present such as the spread of the

epidemic situation throughout the world the trade frictions between China and the United States complicated and grave global

political situation worsening geopolitical situation and extensive geopolitical struggles might result in slowdown of global economy

and affect people’s income purchasing power and willingness to spend. If the uncertainties of the macro environment continue for a

long time the industry will be impacted and face certain challenges.

(2) Risk of foreign exchange rate

At present our revenue from the overseas market constitutes a large proportion in our total operating revenue and our overseas

48Luxshare Precision Industry Co. Ltd. Annual Report 2021

transactions are mainly settled in US Dollars. Our sales on the overseas market totaled RMB57?465?383?800 RMB85?046?280?900

and RMB143452850200 in 2019 2020 and 2021 representing 91.92% 91.94% and 93.18% of our revenue from main business

respectively. Because China implements the managed floating rate system the foreign exchange rates fluctuate along with the

changes in domestic and foreign political and economic environment. If the foreign exchange rates fluctuate greatly the exchange

gains or losses may affect our operating results. In order to reduce the uncertainties caused by fluctuations of foreign exchange rates

on our operating results we will strive to keep abreast of the movement of foreign exchange rates strictly control the proportion of

foreign currency denominated assets in our net assets and through foreign exchange derivative transactions reduce the effect of the

fluctuation of foreign exchange rates.

(3) Management risk

We have been growing rapidly in recent years and continuously expanded our business in consumer electronics communication

automotive and other fields. We have a great number of operating entities which are relatively decentralized. Due to the impact of the

trade frictions between China and the United States and spread of the epidemic situation throughout the world our customers will put

forward increasingly high requirements for the international deployment of our production capacity which will in turn put forward

higher requirements for our operation and management capabilities and pool of outstanding talents. If our management level cannot

satisfy the requirements of the rapid growth of our scale of operation we may face certain management risks.

(4) Risk of relative concentration of customers

We attach great importance to maintaining long-term and stable cooperation relationships with our major customers. At present

our customers are relatively concentrated most of whom are engaged in consumer electronics. Though they are first-class customers

in the industry have strong and leading competencies on the market and have maintained years of stable cooperation relationship

with us if any major customer falls into serious difficulties in its operation we may face certain operating risk.In view of these risks we will adopt sound risk management concept establish effective risk management mechanisms and

continuously improve our risk management policies to promote our sustainable healthy development.XII. Investigation research communication interview and other activities

√ Applicable □ N/A

Main topic of Particulars of the

Date Place Method of discussion and investigation and communication Type of guest Guest information research activity

provided available at

Company Refer to Luxshare-ICT

meeting room at (stock code: 002475)

No. 313 Beihuan Explanation Information about

April 28 2021 Road Qingxi Communication Institution Institutional about our Investigation and

Town by telephone investors operating results Research Activity

Dongguan in 2020 (20210430) published

Guangdong on www.cninfo.com.cn on April 30 2021

Company

meeting room at Introduction Refer to the Record of

No. 313 Beihuan about our Investor Relations

April 30 2021 Road Qingxi Communication Institution Institutional general situation Activity dated April 30

Town by telephone investors and future 2021 published on

Dongguan development www.cninfo.com.cn on

Guangdong plans May 6 2021

Company

meeting room at Introduction Refer to the Record of

No. 313 Beihuan about our Investor Relations

May 18 2020 Road Qingxi Communication Institution Institutional strategic Activity dated May 18

Town by telephone investors deployments and 2021 published on

Dongguan related www.cninfo.com.cn on

Guangdong businesses May 19 2021

August 25 2020 Company Communication Institution Institutional Introduction Refer to the Record of meeting room at by telephone investors about our Investor Relations

49Luxshare Precision Industry Co. Ltd. Annual Report 2021

No. 313 Beihuan operating results Activity dated August

Road Qingxi in the first half 25 2021 published on

Town of 2021 and www.cninfo.com.cn on

Dongguan general situation August 26 2021

Guangdong

50Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section IV Corporate Governance

I. Basic Introduction

We have always been committed to promoting the establishment and improvement of a modern corporate system regulating the

operation of the listed company and improving the corporate governance structure. During the reporting period we kept on

improving our corporate governance structure established and improved rules and regulations regulated corporate operations

strengthened information disclosure actively conducted investor relations management and improved corporate governance level in

strict accordance with the requirements of the Company Law the Securities Law the Rules Governing the Listing of Stocks on the

Shenzhen Stock Exchange the Guidelines for Articles of Association of Listed Companies the Code of Corporate Governance for

Listed Companies the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock Exchange No. 1 – Code of

Operations for Companies Listed on the Main Board and other applicable laws regulations and normative documents.(I) Shareholders and shareholders’ meeting: We perform the procedures for convening holding and voting at shareholders’

meetings in strict accordance with the Company Law the AOA the Rules of Procedure of the Shareholders’ Meeting and other

relevant provisions and requirements and treat all shareholders fairly. We permit shareholders to elect to vote in person or on line at

our shareholders’ meetings so as to enable minority shareholders to fully exercise their voting rights. When a shareholders’ meeting

considers any related-party transaction we require the interested shareholders to abstain from voting and ensure that such

related-party transaction is conducted on an arm’s length basis without prejudice to the interests of shareholders. When a

shareholders’ meeting considers any material matter that affects the interests of minority shareholders the votes cast by them are

counted separately. All shareholders’ meetings are convened and held by our Board of Directors in the presence of lawyers.(II) Relationship with the controlling shareholder: We are independent of our controlling shareholder in operation assets

personnel organization and finance and each of our Board of Directors Board of Supervisors and other internal bodies operates

independently. Our controlling shareholder is strict with itself and has not directly or indirectly interfered with our decision-making

and business activities without the authorization of the shareholders’ meeting or occupied our funds for non-operating purpose.(III) Directors and Board of Directors: We elect directors and engage independent directors in strict accordance with the relevant

procedures set forth in the Company Law and the AOA. We now have seven directors including three independent directors who are

experts in law accounting and other areas. The number of members and composition of our Board of Directors comply with the

requirements of the applicable laws and regulations and the AOA. Our Board of Directors has four committees including Audit

Committee Strategy Committee Nomination Committee and Compensation and Performance Appraisal Committee each of which

has a reasonable member structure and provides scientific and professional opinions and references for the decision-making of the

Board of Directors. Our Board of Directors has convened and held meetings and implemented the resolutions of the shareholders’

meeting in strict accordance with the AOA and the Rules of Procedure of the Board of Directors. All directors have performed their

duties diligently and seriously attended the meetings of the Board of Directors and shareholders and safeguarded the legitimate

rights and interests of the Company and the shareholders.(IV) Supervisors and Board of Supervisors: Our Board of Supervisors has elected supervisors in strict accordance with the

relevant procedures set forth in the Company Law and the AOA. We now have three supervisors including one chairman. The

number of members and composition of our Board of Supervisors comply with the requirements of the applicable laws and

regulations and the AOA. Our Board of Supervisors has convened and held meetings in strict with the AOA and the Rules of

Procedure of the Board of Supervisors. All supervisors have seriously performed their duties effectively supervised and expressed

independent opinions on our financial affairs and the legality and regulatory compliance of the performance of duties by our directors

and executives in good faith and diligently and safeguarded the legitimate rights and interests of the Company and the shareholders.(V) Performance appraisal and incentive and restraint mechanisms: In order to establish sound incentive mechanisms and

enhance the concept of joint sustainable development of the Company and the management and key employees we have

implemented the share incentive plans to enhance the benefit sharing and restrain mechanisms between shareholders and key

business personnel maintain the stability of the management team and key business personnel ensure the achievement of our

development strategy and business objectives and seek long-term stable development. The appointment of our executives is open

and transparent and complies with the applicable laws and regulations.(VI) Stakeholders: We fully respect the legitimate rights and interests of stakeholders and strive to coordinate and balance the

interests of society shareholders the Company employees and other stakeholders and jointly promote our sustained and steady

development.(VII) Information disclosure and transparency: We have performed our information disclosure obligations truthfully accurately

timely and completely in strict accordance with the applicable laws and regulations and our Information Disclosure Management

Measures and designated the Securities Times and www.cninfo.com.cn as the media for us to disclose information. We have kept

51Luxshare Precision Industry Co. Ltd. Annual Report 2021

non-public information in strict confidence seriously registered and reported the insiders pursuant to our Insider Management Policy

established the filing policy for insiders and timely submitted the same to the competent regulatory authorities for the record in

accordance with the relevant provisions. We also strictly regulate the reporting of our information to external information users.When receiving specific visitors we receive them in strict accordance with the relevant requirements require each of them to sign a

Letter of Commitment and timely disclose the relevant record of investigation and research activity on the e-interaction platform of

the Shenzhen Stock Exchange. During the reporting period we did not take advantage of any inside information to trade our shares.We have set up hotlines for investors and investor relations management section and designated special persons responsible for

timely communication with investors. In addition we take the initiative to timely contact and communicate with and report relevant

matters to the competent regulatory authorities in order to accurately understand the relevant regulatory requirements for

information disclosure and further improve the transparency and quality of our information disclosure. We have disclosed

information in a true accurate complete and timely manner in strict accordance with the requirements for substance and form to

ensure that all shareholders have access to our information through different channels.Is there any significant difference between the actual circumstance of corporate governance of the Company and the requirements of

the applicable laws administrative regulations and the provisions of the CSRC regarding corporate governance of the listed

companies?

□ Yes √ No

There isn’t any significant difference between the actual circumstance of our corporate governance and the requirements of the

applicable laws administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies.II. The Company’s independence of its controlling shareholder and actual controller in assets

personnel finance organization and operation

During the reporting period we operated in strict compliance with the Company Law and the AOA gradually improved our

corporate governance structure were independent of our controlling shareholder in assets personnel finance organization and

operation had our own independent and complete business were independent in management and had independent R&D

production and sales systems. During the reporting period our production and operation were stable and we had sound internal

bodies and were able to operate independently in compliance with the applicable regulations.(I) Integrity of assets

We are a company limited by shares established through an overall change in organization form according to law and have our

own independent and complete assets. We have performed the relevant procedures for changes in assets and shareholding according

to law. We have not provided any guarantee for the obligations of shareholders on the security of our assets or credit or lent any loan

or credit line granted to us to any shareholder. We have full control over all of our assets and none of our assets or funds is occupied

by our controlling shareholder to the detriment of our interest.(II) Independence in personnel

Our directors supervisors and executives have been legally appointed in accordance with the Company Law the AOA and other

applicable laws rules and regulations. All of our executives (except independent directors) exclusively work in and receive

remunerations form the Company and do not hold any post (other than director and supervisor) concurrently in any affiliate of

shareholders or any entity engaging in any business same as or similar to our business. We are independent in employees manage

their remunerations social security and other affairs independently and have sound personnel management policies and system in

place.(III) Independence in finance

We have independent financial accounting department and internal audit department and independent accounting system and

financial management policies in place that comply with the applicable regulations and make financial decisions independently.Since our establishment we have opened separate bank accounts filed tax returns and paid taxes independently according to law and

executed external contracts independently and had not shared any bank account or paid any tax in combination with any shareholder.(IV) Independence in organization

We have established a sound governance structure composed of the shareholders’ meeting the Board of Directors and the Board

of Supervisors and independent and complete operation and management bodies that meet our development requirements and

conform to our actual situations each of which performs its powers and functions independently in accordance with the AOA and

our internal management system. Since our establishment our production operation and offices have been totally independent of our

shareholders.

52Luxshare Precision Industry Co. Ltd. Annual Report 2021

(V) Independence in operation

We have complete corporate property rights and independent R&D production and sales systems carry out business

independently keep separate accounts and make decisions and assume liabilities and risks independently and do not rely on any

shareholder or other affiliate in our production and operation activities.III. Horizontal Competition

□ Applicable √ N/A

IV. Annual and extraordinary shareholders’ meetings held during the reporting period

1. Shareholders’ meetings held during the reporting period

Parentage of

Session Type of meeting investors attending Date of meeting Date of disclosure Resolution of the

the meeting meeting

2020 Work Report of the

Board of Directors and

2020 annual Annual shareholders’ other 12 proposals were shareholders’ meeting 43.58% May 18 2021 May 19 2021 approved by vote as meeting disclosed in our

Announcement No.

2021-056.

Proposal for Applying for

Offering Super

First extraordinary Extraordinary Short-term Commercial

shareholders’ shareholders’ 46.41% October 25 2021 October 26 2021 Papers and other 4

meeting in 2021 meeting proposals were approved by vote as disclosed in

our Announcement No.

2021-090.

2. Extraordinary shareholders’ meetings convened on the requisition of holders of preferred shares whose

voting rights have been restituted

□ Applicable √ N/A

53Luxshare Precision Industry Co. Ltd. Annual Report 2021

V. Directors supervisors and executives

1. Particulars

No. of No. of Changes in

Beginning End date Beginning additional shares the number

Cause of

Name Title Status Sex Age date of the of the balance of shares disposed of of shares

Ending increase or

term of term of shares held acquired in in the held due to

balance of decrease in

office office the reporting reporting other shares held the number

period period reasons of shares held

Chairman of the

WANG Laichun Board of Directors & General Incumbent Female 55

February May 18

2220092024

Manager

Liquidation

of shares to

Vice Chairman of

WANG Laisheng the Board of Incumbent Male 58 February May 18 6970267 1742567 5227700 satisfy

Directors 22 2009 2024 personal

capital

demands

Additional

shares

May 21 May 18 acquired as a WANG Tao Director & Deputy General Manager Incumbent Male 37 0 96022 96022 2021 2024 result of exercise of

incentive

share options

Director and

LI Wei Deputy General Incumbent Male 42 May 21 May 18

Manager 2021 2024

ZHANG Ying Independent Incumbent Female 59 May 22 May 18 director 2018 2024

LIU Zhonghua Independent Incumbent Male 57 May 18 May 18 director 2021 2024

SONG Yuhong Independent director Incumbent Female 51

May 18 May 18

20212024

XIA Yanrong Chairman of the

Board of Incumbent Female

41 December May 18

1920172024

54Luxshare Precision Industry Co. Ltd. Annual Report 2021

Supervisors

MO Rongying Supervisor Incumbent Female 42 May 22 May 18 2018 2024

YI Peizan Supervisor Incumbent Female 37 February May 18 22 2009 2024

Board Secretary &

HUANG Dawei Deputy General Incumbent Male 50 May 25 May 21 439390 439390

Manager 2018 2024

Additional

shares

WU Tiansong CFO Incumbent Male 52 April 15 May 21

acquired as a

365034300809665843

2019 2024 result of exercise of

incentive

share options

Additional

shares

acquired as a

LI Bin Director & Deputy General Manager Retired Male 45

April 18 May 21 2095552 1216773 3312325

2012 2021 result of exercise of

incentive

share options

Additional

shares

acquired as a

YE Yiling Director & Deputy Retired Female 51 November May 21 General Manager 776705 177880 954585 3 2011 2021 result of exercise of

incentive

share options

XU Huaibin Independent May 6 May 21 director Retired Male 65 2015 2021

LIN Yifei Independent Retired Male 47 May 6 May 21 director 2015 2021

Total -- -- -- -- -- -- 10646948 1791484 1742567 10695865 --

55Luxshare Precision Industry Co. Ltd. Annual Report 2021

Whether any director or supervisor retired or any executive was removed during the reporting period?

□ Yes √ No

Changes in directors supervisors and executives:

√ Applicable □ N/A

Name Title Type Date Reason

LI Bin Director Retired upon expiration of term of office May 18 2021 Re-elected of the Board of Directors

YE Yiling Director Retired upon expiration of term of office May 18 2021 Re-elected of the Board of Directors

XU Huaibin Independent Director Retired upon expiration of term of office May 18 2021 Re-elected of the Board of Directors

LIN Yifei Independent Director Retired upon expiration of term of office May 18 2021 Re-elected of the Board of Directors

LI Bin Deputy General Retired upon expiration Manager of term of office May 21 2021 Re-elected of the Board of Directors

YE Yiling Deputy General Retired upon expiration Manager of term of office May 21 2021 Re-elected of the Board of Directors

WANG Tao Director Elected May 18 2021 Re-elected of the Board of Directors

LI Wei Director Elected May 18 2021 Re-elected of the Board of Directors

LIU Zhonghua Independent Director Elected May 18 2021 Re-elected of the Board of Directors

SONG Yuhong Independent Director Elected May 18 2021 Re-elected of the Board of Directors

WANG Tao Deputy General Manager Appointed May 21 2021 Re-elected of the Board of Directors

LI Wei Deputy General Manager appointed May 21 2021 Re-elected of the Board of Directors

2. Positions held

Professional background and main work experience of our current directors supervisors and executives and main positions held by

them in the Company:

(I) Directors

Ms. WANG Laichun 55 years old resident of Hong Kong China; EMBA Shenzhen Graduate School of Tsinghua University;

is now our Chairman of the Board of Directors and General Manager; former Director of the Shenzhen High-tech Industry

Association and Vice Chairman of the Shenzhen Electronics Industry Association. Ms. WANG Laichun worked in the Wiring

Business Unit of Foxconn a subsidiary of Hon Hai Group for nearly ten years since 1988 and left Foxconn in 1997 to start her own

business. In 1999 Ms. WANG Laichun and Mr. WANG Laisheng jointly purchased the shares of Luxshare Limited. In 2004 she

founded Luxshare Precision Industry (Shenzhen) Co. Ltd. through Luxshare Limited and acted as its Chairman of the Board of

Directors. Ms. WANG Laichun is the Chairman of our 1st 2nd 3rd 4th and 5th Board of Directors.Mr. WANG Laisheng 58 years old resident of Hong Kong China; is now our Vice Chairman of the Board of Directors; former

Executive Director of the Shenzhen Quality Association and Director of the Guangdong Laboratory Federation. Mr. WANG

Laisheng was engaged in individual business since mid-1980s. Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the

shares of Luxshare Limited in 1999 and founded Luxshare Precision Industry (Shenzhen) Co. Ltd. in 2004. Mr. WANG Laisheng is

the Vice Chairman of our 1st 2nd 3rd 4th and 5th Board of Directors.Mr. LI Wei 42 years old Chinese nationality undergraduate; is now chief of our Precision Component Business Unit. Mr. LI

Wei has nearly 20 years’ experience in precision manufacturing and has been engaged in product design validation and quality

management in many precision manufacturing companies. He joined Luxshare-ICT in July 2019 responsible for the operation and

management of the Corporate Business Division.Mr. WANG Tao 37 years old Chinese nationality undergraduate from the Southeast University; is now chief of our Acoustic

Business Unit. Mr. WANG Tao has rich experience in precision manufacturing of components. He joined Luxshare-ICT in April

2009 responsible for product development and management.

Ms. ZHANG Ying 59 years old Chinese nationality; Doctor of Laws Wuhan University; postdoctoral fellowship in law

Chinese Academy of Social Sciences; associate professor of the Shenzhen University Law School. Ms. ZHANG Ying joined the

China University of Geosciences in 1984 as a lecturer and the Institute of Political Science and Law Wuhan Academy of Social

Sciences in 1994 as an assistant researcher and has acted as the Executive Director of the China European Law Research Association

56Luxshare Precision Industry Co. Ltd. Annual Report 2021

since 2009. Ms. ZHANG Ying has obtained the qualification as an independent director from the Shenzhen Stock Exchange and is

an Independent Director of our 4th and 5th Board of Directors.Mr. LIU Zhonghua 57 years old Chinese nationality without foreign permanent residence master professor of accounting; is

now professor and tutor of postgraduates of the Guangdong University of Foreign Studies School of Accounting Director of the

Accounting Society of China Vice Chairman of the Accounting Society for Foreign Economic Relations & Trade of China

Executive Vice Chairman of the Guangdong Association of Management Accountants and Executive Director of the Accounting

Society of Guangdong. Mr. LIU Zhonghua has obtained the qualification as an independent director from the Shenzhen Stock

Exchange and is an Independent Director of Guangdong Provincial Expressway Development Co. Ltd. GEM Co. Ltd. and SGIS

Songshan Co. Ltd.Ms. SONG Yuhong 51 years old Chinese nationality; Master of Laws Wuhan University; Bachelor of Laws Southwest

University of Political Science & Law; MBA Grandes écoles de Commerce; is now partner of DeHeng Law Offices (Shenzhen)

and mediator of the International Commercial Mediation Center for Belt and Road Initiative – Luohu Court of Shenzhen Mediation

Center. Ms. SONG Yuhong has obtained the qualification as an independent director from the Shenzhen Stock Exchange and is an

Independent Director of our 5th Board of Directors.(II) Supervisors

Ms. XIA Yanrong 41 years old Chinese nationality undergraduate majoring in financial management is now our supervisor.Ms. XIA Yanrong worked at the Finance Department of 3CEMS Group Prime Technology (Guangzhou) Co. Ltd. from January 2003

to April 2006 and the Finance Department of Dachang Electronic Technology (Suzhou) Co. Ltd. a subsidiary of P-TWO from

April 2006 to April 2009 and joined us since April 2009 and served as chief of the Finance Department at Kunshan Lanto and chief

of the Finance Department and chief of the Credit Management Department at Luxshare-ICT and is now Director of our Central

Finance Department and Credit Management Department. Ms. XIA Yanrong is a member of our 4th and 5th Board of Supervisors.Ms. MO Rongying 42 years old Chinese nationality majoring in business administration is now our supervisor. She was chief

of the Planning Department at Thomson Multimedia (Dongguan) Co. Ltd. before joining us in June 2007 as chief of the Central

Customs Affairs Department. Ms. MO Rongying is a member of our 4th and 5th Board of Supervisors.Ms. YI Peizan 37 years old Chinese nationality joined our Finance Department in 2004 is now our supervisor. Ms. YI Peizan

is a member of our 1st 2nd 3rd 4th and 5th Board of Supervisors.(III) Executives

Ms. WANG Laichun whose resume is set out in “Directors” above.Mr. WANG Tao whose resume is set out in “Directors” above.Mr. LI Wei whose resume is set out in “Directors” above.Mr. HUANG Dawei 50 years old citizen of Chinese Taiwan graduated from the National Tsing Hua University Institute of

Industrial Engineering Master of Industrial Engineering is now our Deputy General Manager and Board Secretary. Mr. HUANG

Dawei worked in a Fortune 500 company responsible for market development and operation management before joining Luxshare

Electronic Kunshan as the legal representative director and General Manager in June 2013. Mr. HUANG obtained a Qualification

Certificate for Board Secretary from the Shenzhen Stock Exchange in October 2017 and meets the qualifications required in the

Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and other applicable laws and regulations and the AOA.Mr. WU Tiansong 52 years old citizen of Chinese Taiwan received a bachelor’s degree from the National Taiwan University

of Science and Technology is now chief of the Finance Department at Luxshare-ICT. Mr. WU Tiansong served as a senior auditor at

the Audit Department of Deloitte Touche Tohmatsu Limited from August 1996 to August 1999 and worked in the Underwriting

Department of Taiwan Yuanda Securities Corp. and served as the chief of the Accounting Director at Taiwan P-TWO Industries Inc.and Uniwill Computer Corp. and chief of the Finance Department at Zhongshan Ichia Electronics Co. Ltd. from September 1999 to

March 2009. He joined us in 2011.Positions held in shareholders:

□ Applicable √ N/A

Positions held in other entities:

√ Applicable □ N/A

Beginning date Whether or not

Name Entity Position of the term of End date of the receive

office term of office remunerations and subsidies

57Luxshare Precision Industry Co. Ltd. Annual Report 2021

from such entity

WANG Laichun Luxsan Precision Technology Director November 25 No

(Jiangsu) Co. Ltd. 2020

WANG Laichun BCS Automotive Interface Chairman July 18 2018 No

Solutions (Suzhou) Co. Ltd.WANG Laichun Luxshare Electronic Technology Chairman March 18 2014 No

(Kunshan) Co. Ltd.WANG Laichun Rikai Precision Technology Chairman February 3 No

(Yancheng) Co. Ltd. 2021

WANG Laichun Xiexun Electronic (Ji’an) Co. Vice Chairman November 12 No

Ltd. 2005

WANG Laichun Fujian JK Wiring Systems Co. Chairman June 18 2012 No

Ltd.WANG Luxsan Precision Technology Chairman November 25 No

Laisheng (Jiangsu) Co. Ltd. 2020

WANG Xunmu Information Technology General April 27 2021 No

Laisheng (Shanghai) Co. Ltd. Manager

WANG Lishan Smart Manufacturing Managing November 18 No

Laisheng Technology (Guangdong) Co. Director & 2020

Ltd. Manager

WANG Lishen Smart Manufacturing Chairman February 3 No

Laisheng Technology (Shenzhen) Co. Ltd. 2021

WANG BCS Automotive Interface Managing December 29 No

Laisheng Solutions (Xi’an) Co. Ltd. Director & 2018

General

Manager

WANG Xiexun Electronic (Ji’an) Co. Chairman November 12 No

Laisheng Ltd. 2005

WANG Lanto Electronic Limited Vice Chairman May 12 2011 No

Laisheng

WANG Kunshan Luxshare Precision Director October 25 No

Laisheng Industry Co. Ltd. 2011

WANG Donguan Xuntao Electronic Co. Vice Chairman July 10 2012 No

Laisheng Ltd.WANG Dongguan Leader Precision Chairman August 16 No

Laisheng Industry Co. Ltd. 2012

WANG Kunshan Luxshare Precision Vice Chairman October 25 No

Laisheng Industry Co. Ltd. 2011

WANG Suining Luxshare Precision Managing January 11 No

Laisheng Industry Co. Ltd. Director 2013

WANG Xingning Luxshare Precision Managing November 19 No

Laisheng Industry Co. Ltd. Director 2013

WANG Luxshare Precision Industry Managing March 24 2014 No

Laisheng (Chuzhou) Ltd. Director

WANG Fengshun Luxshare Precision Managing July 4 2014 No

Laisheng Industry Co. Ltd. Director

WANG Dongguan Luxshare Precision Chairman November 27 No

Laisheng Industry Co. Ltd. 2015

WANG Jiangxi Luxshare Intelligent Director December 25 No

Laisheng Manufacture Co. Ltd. 2015

LIU Zhonghua Guangdong Provincial Independent December 4 September 20 Yes

Expressway Development Co. Director 2017 2022

Ltd.LIU Zhonghua GEM Co. Ltd. Independent March 20 2019 March 12 Yes

Director 2025

LIU Zhonghua SGIS Songshan Co. Ltd. Independent June 25 2019 June 24 2022 Yes

58Luxshare Precision Industry Co. Ltd. Annual Report 2021

Director

SONG Yuhong Jiangxi GETO New Materials Co. Independent May 1 2017 November 11 Yes

Ltd. Director 2021

LI Wei Luxshare Intelligent Manufacture Managing August 16 No

Technology (Changshu) Co. Ltd. Director & 2021

General

Manager

LI Wei Luxshare Smart Equipment Managing December 29 No

(Kunshan) Co. Ltd. Director & 2020

General

Manager

LI Wei Kunshan Luxshare Business Managing November 4 No

Management Development Co. Director 2020

Ltd.WANG Tao Lanto Electronic Limited Chairman November 20 No

2019

WANG Tao Luxshare Smart Manufacturing Managing December 1 No

(Rugao) Co. Ltd. Director & 2020

General

Manager

WANG Tao Luxshare Technology (Nanjing) Managing October 19 No

Co. Ltd. Director & 2021

General

Manager

XIA Yanrong Luxshare Intelligent Manufacture Supervisor April 8 2019 No

(Zhejiang) Co. Ltd.XIA Yanrong Zhuhai Kinwong Flexible Circuit Supervisor December 3 No

Co. Ltd. 2018

XIA Yanrong Luxshare Precision Industry Supervisor February 18 No

(Suzhou) Co. Ltd. 2019

XIA Yanrong Luxshare Electrical (Shanghai) Supervisor December 2 No

Co. Ltd. 2019

XIA Yanrong Luxshare Precision Industry Supervisor October 24 No

(Enshi) Co. Ltd. 2018

YI Peizan Xiexun Electronic (Ji’an) Co. Supervisor August 28 No

Ltd. 2017

HUANG Dawei Luxshare Electronic Technology Director & March 17 2014 No

(Kunshan) Co. Ltd. General

Manager

WU Tiansong Luxshare Electronic Technology Supervisor March 17 2014 No

(Kunshan) Co. Ltd.WU Tiansong Huzhou Jiuding Electronic Co. Supervisor October 12 No

Ltd. 2012

Punishments imposed by the securities regulatory authorities in the past three years on the directors supervisors and executives of the

Company currently in office or leaving office during the reporting period:

□ Applicable √ N/A

3. Remunerations of directors supervisors and executives

Decision-making process criteria for determination and actual amount in respect of remunerations of directors supervisors and

executives:

During the reporting period directors supervisors and executives were subject to performance appraisal and their annual

income consisted of basic annual salaries and long-terms incentives and was determined on the basis of our business situation and

the result of year-end performance appraisal. Our independent directors receive an emolument of RMB80000 per year each plus

reimbursement of travel office and other expenses from us.Remunerations of directors supervisors and executives paid in the reporting period:

59Luxshare Precision Industry Co. Ltd. Annual Report 2021

In RMB0’000

Total Whether or not

remuneration receiving

Name Title Sex Age Status received from the remunerations from

Company any affiliate of the

(inclusive of tax) Company

Chairman of the Board of

WANG Laichun Directors & General Female 55 Incumbent 240 No

Manager

WANG Laisheng Vice Chairman of the Board of Directors Male 58 Incumbent 240 No

WANG Tao Director & Deputy General Manager Male 37 Incumbent 95.11 No

LI Wei Director and Deputy General Manager Male 42 Incumbent 85.2 No

LI Bin Director & Deputy General Manager Male 45 Retired 180.68 No

YE Yiling Director & Deputy General Manager Female 51 Retired 116.44 No

XU Huaibin Independent director Male 65 Retired 8 No

LIN Yifei Independent director Male 47 Retired 8 No

ZHANG Ying Independent director Female 59 Incumbent 8 No

LIU Zhonghua Independent director Male 57 Incumbent 0 No

SONG Yuhong Independent director Female 51 Incumbent 0 No

XIA Yanrong Chairman of the Board of Supervisors Female 41 Incumbent 48.26 No

MO Rongying Supervisor Female 42 Incumbent 41.06 No

YI Peizan Supervisor Female 37 Incumbent 9.23 No

HUANG Dawei Board Secretary & Deputy General Manager Male 50 Incumbent 93.86 No

WU Tiansong CFO Male 52 Incumbent 121.16 No

Total - - 1295 -

VI. Performance of duties by the directors during the reporting period

1. Meetings of the Board of Directors held during the reporting period

Session Date of meeting Date of disclosure Resolution of the meeting

Refer to the Announcement on Resolutions of the

29th meeting of the 4th Board thJanuary 22 2021 January 23 2021 29 meeting of the 4

th Board of Directors disclosed

of Directors on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-007).

Refer to the Announcement on Resolutions of the

30th meeting of the 4th Board th thJanuary 28 2021 January 29 2021 30 meeting of the 4 Board of Directors disclosed of Directors on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-015).

Refer to the Announcement on Resolutions of the

31st meeting of the 4th Board st thApril 20 2021 April 21 2021 31 meeting of the 4 Board of Directors disclosed of Directors on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-028).

32nd meeting of the 4th Board Refer to the Announcement on Resolutions of the April 27 2021 April 28 2021 32nd meeting of the 4thof Directors Board of Directors disclosed

on www.cninfo.com.cn and the Securities Times

60Luxshare Precision Industry Co. Ltd. Annual Report 2021

(Announcement No. 2021-050).

Refer to the Announcement on Resolutions of the

1st meeting of the 5th Board 1st meeting of the 5th Board of Directors disclosed

of Directors May 21 2021 May 22 2021 on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-057).

Refer to the Announcement on Resolutions of the

2nd meeting of the 5th Board ndJuly 2 2021 July 3 2021 2 meeting of the 5

th Board of Directors disclosed

of Directors on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-062).

Refer to the Announcement on Resolutions of the

3rd meeting of the 5th Board rd thAugust 24 2021 August 25 2021 3 meeting of the 5 Board of Directors disclosed of Directors on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-071).

Refer to the Announcement on Resolutions of the

4th meeting of the 5th Board September 30 thOctober 8 2021 4 meeting of the 5

th Board of Directors disclosed

of Directors 2021 on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-077).

Refer to the Announcement on Resolutions of the

5th meeting of the 5th Board thOctober 27 2021 October 28 2021 5 meeting of the 5

th Board of Directors disclosed

of Directors on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-092).

Refer to the Announcement on Resolutions of the

6th meeting of the 5th Board 6th meeting of the 5th Board of Directors disclosed

of Directors December 3 2021 December 4 2021 on www.cninfo.com.cn and the Securities Times

(Announcement No. 2021-096).

2. Attendance of the directors at meetings of the Board of Directors and shareholders

Attendance of the directors at meetings of the Board of Directors and shareholders

No. of board

meetings No. of

No. of board No. of Whether or not

held during board

meetings having been No. of

Director meetings present by

board No. of board

meetings meetings absent from shareholders’ the present in means of two meeting reporting person communication

present by absent from

proxy consecutive attended period equipment board meetings

WANG Laichun 10 7 3 0 0 No 2

WANG Laisheng 10 7 3 0 0 No 2

LI Bin 4 2 2 0 0 No 1

YE Yiling 4 1 3 0 0 No 1

ZHANG Ying 10 7 3 0 0 No 2

XU Huaibin 4 2 2 0 0 No 1

LIN Yifei 4 2 2 0 0 No 1

LI Wei 6 4 2 0 0 No 2

WANG Tao 6 4 2 0 0 No 2

LIU Zhonghua 6 4 2 0 0 No 2

SONG Yuhong 6 4 2 0 0 No 2

Explanation about absence from two consecutive meetings of the Board of Directors:

3. Objections raised by the directors regarding matters of the Company

Whether any director has raised any objection regarding matters of the Company?

□ Yes √ No

No director has raised any objection regarding matters of the Company during the reporting period.

61Luxshare Precision Industry Co. Ltd. Annual Report 2021

4. Other information regarding the performance of duties by the directors

Whether the suggestions put forward by the directors have been adopted by the Company?

√ Yes □ No

Explanation about the adoption or non-adoption by the Company of the suggestions put forward by the directors:

During the reporting period all of our directors have performed their duties diligently in strict accordance with the Company

Law the Securities Law the Code of Corporate Governance for Listed Companies the AOA the Rules of Procedure of the Board of

Directors and other relevant provisions and requirements actively attended meetings of the Board of Directors and shareholders;

taken the initiative to ask for information about our operation management financial position and material events had deep

discussions about all resolutions submitted to the Board of Directors for consideration expressed opinions on our material corporate

governance issues and business decisions and through sufficient communication and discussions reached a consensus to ensure the

scientificness timeliness and effectiveness of decisions and supervised and urged the implementation of resolutions of the Board of

Directors; actively implemented resolutions of the Board of Directors and the shareholders and safeguarded the legitimate rights and

interests of the Company and all shareholders. We will continue to improve our corporate governance structure further enhance the

scientific decision-making level of the Board of Directors and its committees give full play to the role of independent directors in our

corporate governance and promote our operational compliance and continued healthy development.

62Luxshare Precision Industry Co. Ltd. Annual Report 2021

VII. Activities of the committees of the Board of Directors during the reporting period

No. of

Committee Members meetings Date of meeting Topics Important opinions and suggestions

Performance Objections

held of other duties (if any)

Considered the Proposal for Pursuant to the Company Law the Code

Re-appointment of the Accounting of Corporate Governance for Listed

Firm Companies promulgated by the CSRC

and the Work Rules of the Audit

April 9 Committee of the Board of Directors the

2021 Audit Committee performed its duties diligently expressed opinions taking into

account our actual situation and through

sufficient communication and

discussions unanimously approved the

Proposal.WANG Laichun XU Considered the 2020 Financial Pursuant to the Company Law the Code

Audit Committee Huabin and LIN 2 Report the Special Report on the of Corporate Governance for Listed

Yifei Deposit and Use of Offering Proceeds Companies promulgated by the CSRC

in 2020 the 2020 Work Report of the and the Work Rules of the Audit

Internal Audit Department and the Committee of the Board of Directors the

Work Report of the Internal Audit Audit Committee performed its duties

April 15 Department for the First Quarter of diligently supervised our internal audit

2021 2021. policies and implementation thereof reviewed our financial information

guided the work of the Internal Audit

Department supervised and urged the

audit conducted by the accounting firm

and through sufficient communication

and discussions unanimously approved

all reports considered.Considered the Work Report of the Pursuant to the Company Law the Code

Internal Audit Department for the of Corporate Governance for Listed

First Half of 2021. Companies promulgated by the CSRC

LIU Zhonghua July 22 and the Work Rules of the Audit Audit Committee ZHANG Ying and 2

SONG Yuhong 2021

Committee of the Board of Directors the

Audit Committee performed its duties

diligently expressed opinions taking into

account our actual situation and through

sufficient communication and

63Luxshare Precision Industry Co. Ltd. Annual Report 2021

discussions unanimously approved the

Report.Considered the Work Report of the Pursuant to the Company Law the Code

Internal Audit Department for the of Corporate Governance for Listed

Third Quarter of 2021. Companies promulgated by the CSRC

and the Work Rules of the Audit

October 14 Committee of the Board of Directors the

2021 Audit Committee performed its duties diligently expressed opinions taking into

account our actual situation and through

sufficient communication and

discussions unanimously approved the

Report.Reviewed the implementation of the Pursuant to the relevant provisions of the

performance appraisal compensation Company Law the Code of Corporate

and incentive plan for the directors Governance for Listed Companies

and executives in the preceding year promulgated by the CSRC and the Work

put forward a reward proposal for the Rules of the Compensation and

directors and executives taking into Performance Appraisal Committee of the

account our actual business situation Board of Directors the Compensation

and studied the compensation and and Performance Appraisal Committee

performance appraisal plan for the reviewed the compensation of the

next year. directors supervisors and executives and

determined that we are developing and

Compensation and WANG Laichun improving fair and effective performance

Performance ZHANG Ying and 1 February appraisal criteria and incentive and

Appraisal Committee XU Huabin 22 2021 restraint mechanisms for executives and the compensation of our executives

consists of basic monthly salaries and

year-end performance-based pay. On the

basis of such understanding and proposal

we properly adjusted the basic monthly

salaries of certain directors and

executives in order to reflect and produce

the effect of incentive and fairness. The

compensation of our directors

supervisors and executives in the

reporting period is true and conforms to

our performance metrics.

64Luxshare Precision Industry Co. Ltd. Annual Report 2021

Considered the Performance Pursuant to the Company Law the Code

Appraisal Measures for the 2021 of Corporate Governance for Listed

Stock Option Incentive Plan. Companies promulgated by the CSRC

and the Work Rules of the Compensation

and Performance Appraisal Committee of

Compensation and ZHANG Ying LIU the Board of Directors the Compensation

Performance Zhonghua and 1 September and Performance Appraisal Committee

Appraisal Committee SONG Yuhong 24 2021 reviewed the Performance Appraisal

Measures for the 2021 Stock Option

Incentive Plan determined that the

Measures reflected and produced the

effect of incentive and fairness and

unanimously approved the Proposal.Considered the Proposal for Pursuant to the Company Law the Code

Examination of Qualifications of of Corporate Governance for Listed

Candidates for Non-independent Companies promulgated by the CSRC

Directors of the 5th Board of Directors and the Work Rules of the Nomination

WANG Laichun and the Proposal for Examination of Committee of the Board of Directors the Nomination LIN Yifei and 1 April 5 Qualifications of Candidates for Nomination Committee performed its Committee ZHANG Ying 2021 Independent Directors of the 5

th duties diligently examined the

Board of Directors. qualifications of the relevant personnel

expressed opinions and put forward

suggestions and through sufficient

communication and discussions

unanimously approved all Proposals.Pursuant to the Company Law the Pursuant to the Company Law the Code

Code of Corporate Governance for of Corporate Governance for Listed

Listed Companies promulgated by the Companies promulgated by the CSRC

CSRC the Work Rules of the Strategy and the Work Rules of the Strategy

Committee of the Board of Directors Committee of the Board of Directors the

WANG Laichun XU March 29 and other relevant provisions the Strategy Committee thoroughly analyzed Strategy Committee Huabin and ZHANG 1 2021 Strategy Committee reviewed the and studied the industry in which we Ying material events occurred in 2020 operate and put forward reasonable

reported our 2021 strategic suggestions on the planning for and

development plan and studied the implementation of the development

significant strategic issues in strategies in respect of business R&D

connection with our development. and new products which produced

significant effect.

65Luxshare Precision Industry Co. Ltd. Annual Report 2021

VIII. Activities of the Board of Supervisors

Whether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reporting

period?

□ Yes √ No

The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.IX. Employees

1. Number structure of profession and education of employees

Number of current employees of the parent at the end of the reporting period 520

Total number of current employees of the major subsidiaries at the end of the

reporting period 227632

Total number of current employees at the end of the reporting period 228152

Total number of salaried employees during the reporting period 228152

Total number of retired employees to or for whom the parent and the major

subsidiaries are obligated to make payments 0

Structure of profession

Type of profession Number of employees

Production staff 192873

Sales staff 2574

Technical staff 16103

Financial staff 354

Administrative staff 16248

Total 228152

Education

Degree of education Number of employees

Undergraduate 13982

College 21432

Secondary specialized school senior middle school and below 192738

Total 228152

2. Compensation policies

We have established the administrative measures for the salaries performance-based pay year-end bonus and other

compensation of employees of the Group provided employees with competitive and guaranteed compensation in a scientific an

reasonable manner developed sound compensation management policies paid contributions to the social insurance packages and

housing provident fund for and salaries to the employees on time in strict accordance with the applicable laws and regulations and

resolutely rejected any bonded labor. In order to help employees better understand the match between their job responsibilities and

capabilities we have developed a multi-dimensional performance appraisal system including self-assessment and supervisor’s

assessment in order to objectively and comprehensively reflect employees’ annual performance. We conduct annual employee

performance communication activities to ensure that each employee receives sufficient support and resources for his/her career

development in Luxshare-ICT and to enhance and optimize the work experience of each employee. The compensation packages

provided by us to employees consist of year-end bonuses project bonuses share incentives for key officers and bonuses for

outstanding employees among others. During the reporting period we further optimized performance appraisal fully appraised the

performance of teams and individuals and effectively improved the execution ability and awareness of responsibility of employees

which will help us retain and attract outstanding talents and human resources required for our development.

3. Training programs

We attach great importance to the career development plans of employees concentrate our efforts on the training of personnel

and have established a sound personnel training system to attract and motivate more excellent talents and promote common growth

of employees and the Group. We have built an integrated online and offline learning platform providing multi-dimensional specialty

training for different types of employees and new projects. The platform provides all employees with hierarchical targeted training of

66Luxshare Precision Industry Co. Ltd. Annual Report 2021

different categories that target different groups of people and satisfy different needs. For example with respect to senior middle and

grassroots managers and key reserve talents with great potentialities we conduct the “Star Cultivation Series” training in order to

build an efficient and dynamic team; and with respect to the personnel in manufacturing R&D technology marketing supply chain

and other critical fields we conduct the “Juneng Series” training in order to continuously improve the professional capabilities of

employees on different posts. In addition we carry out school-enterprise cooperation projects and encourage the employees to obtain

certification of professional qualifications from the Company and society in order to enhance our production level and social

recognition of us as a whole. We have also built the “Jushi Series” “Luxshare Classroom” “Senior Management Forum” and other

learning and communication platforms in order to provide excellent Luxshare employees with stages to demonstrate themselves

create a sound learning environment and promote the integration and communications among all employees. In addition with a view

to promoting the implementation of important strategies and changes we have conducted the “Jubian Series” training according to

business needs. In order to regulate the employee training we have established and periodically updated the Administrative Measures

for Education and training the Operating Procedures for Education and training and Administrative Measures for Internal Lecturers

which define the training system covering all stages from induction orientation on-the-job transfer to promotion and each factory

has established the Operating Procedures for Education and training and relevant administrative measures by reference to the

Group’s management standards and annual training plans for the factory and its departments according to its annual development

plan to effectively enhance the core competencies of employees and the Company improve the employees’ professional capabilities

and promote the sustainable growth of the Company.

4. Outsourced workers

□ Applicable √ N/A

X. Profit distribution and transfer of capital reserve to the share capital

Adoption implementation or adjustment of the profit distribution policy in particular cash dividend policy during the reporting

period

√ Applicable □ N/A

Pursuant to the resolutions adopted by the 31st meeting of the 4th Board of Directors and the 2020 annual shareholders’ meeting

we proposed to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax) per 10 shares on the basis of the total

share capital of 7035426367 shares or RMB773896900.37 (inclusive of tax) in total. In case of any change in our total share

capital due to any share repurchase exercise of share incentives material asset restructuring cancellation of repurchased share or

otherwise prior to the record date for the relevant equity distribution we would adjust the distribution payable per share accordingly

on the principle that the total amount distributable should remain the same.During the period from the disclosure of such profit distribution proposal to the implementation thereof our total share capital

increased by 2461 shares from 7035426367 shares at the time of disclosure of the proposal to 7?035?428?828 shares as a result of

conversion of the convertible bonds to shares. On the principle that the total amount distributable should remain the same our profit

distribution proposal for 2020 was adjusted as follows: to distribute to all shareholders a cash dividend of RMB1.099999 (inclusive

of tax) per 10 shares on the basis of the total share capital of 7?035?428?828 shares or RMB773891489.58 (inclusive of tax) in total.Special explanation about the cash dividend policy

Whether comply with the provisions of the articles of association or requirements of resolutions of the

shareholders’ meeting of the Company? Yes

Whether the standard and ratio of cash dividend distribution are clear and definite? Yes

Whether the relevant decision-making process and mechanism are sound? Yes

Whether the independent directors have performed their duties and exercised their functions? Yes

Whether the minority shareholders have sufficient opportunities to express their opinions and requests and

their legitimate rights and interests are fully protected? Yes

Whether the conditions and procedures in respect of any adjustment or amendment of the cash dividend policy

comply with the applicable regulations and are transparent? Yes

Whether the Company has made a profit in the reporting period and the parent has profits available for distribution to the

shareholders but the Company does not propose to distribute cash dividends?

□ Applicable √ N/A

Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:

√ Applicable □ N/A

67Luxshare Precision Industry Co. Ltd. Annual Report 2021

Number of bonus shares per 10 shares 0

Amount of cash dividends per 10 shares (inclusive of tax) 1.10

Share capital based on which the distribution proposal was made 7084301477

Amount of cash dividends (inclusive of tax) 779273162.47

Amount of cash dividends distributed in other ways (such as share repurchase) (RMB) 0.00

Total amount of cash dividends (RMB) 779273162.47

Distributable profit (RMB) 6526651487.02

Proportion of total cash dividends to the distributable profit 100%

Particulars of cash dividends distributed for the reporting period

Others

Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital

Our 2021 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax)

per 10 shares on the basis of the total share capital of 7084301477 shares or RMB779273162.47 (inclusive of tax) in total and

to carry forward the retained profits for distribution in subsequent years. In case of any change in our total share capital due to any

share repurchase exercise of share incentives material asset restructuring cancellation of repurchased share or otherwise prior to

the record date for the relevant equity distribution we will adjust the distribution payable per share accordingly on the principle

that the total amount distributable should remain the same. The 2021 Profit Distribution Proposal is subject to approval by the

shareholders’ meeting.XI. Implementation of share incentive plans employee stock ownership plans and other

employee incentives granted by the Company

√ Applicable □ N/A

1. Share incentives

(1) 2018 stock option incentive plan

On December 2 2020 the 27th meeting of the 4th Board of Directors and the 27th meeting of the 4th Board of Supervisors

considered and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the Second Vesting Period of the 2018

Stock Option Incentive Plan pursuant to which the grantees who have satisfied the vesting conditions may exercise the stock options

vested in the second vesting period in their sole discretion from December 22 2020 to September 24 2021. Refer to the Cautionary

Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the 2018 Stock Option Incentive

Plan (Announcement No.2020-108) for details.During the reporting period the grantees exercised their options to purchase 13854690 shares in total within the second vesting

period of the 2018 Stock Option Incentive Plan.On July 2 2021 due to the equity distribution for 2020 the exercise price for the stock options granted but not yet exercised

under the 2018 stock option incentive plan was adjusted from RMB10.28 per share to RMB10.17 per share. Refer to the

Announcement on Adjustment of the Exercise Prices under the 2018 and 2019 Stock Option Incentive Plans and Cancellation of

Certain Stock Options under the 2019 Stock Option Incentive Plan (Announcement No.2021-064) for details.On September 30 2021 due to resignation of certain grantees for personal reasons the number of grantees was adjusted from

1?719 to 1?695 and the number of stock options exercisable under the 2018 Stock Option Incentive Plan was adjusted by cancelling

920766 stock options granted but not yet exercised so the number of stock options granted but not yet exercised was adjusted from

93843466 to 92964441. Refer to the Announcement on Adjustment of the Number of Stock Options Exercisable and Cancellation

of Certain Stock Options under the 2018 Stock Option Incentive Plan (Announcement No.2021-082) for details.On December 3 2021 the 6th meeting of the 5th Board of Directors and the 6th meeting of the 5th Board of Supervisors

considered and approved the Proposal for Adjustment of the Number of Stock Options Exercisable and Cancellation of Certain Stock

Options under the 2018 Stock Option Incentive Plan and the Proposal Regarding the Satisfaction of the Vesting Conditions for the

Third Vesting Period of the 2018 Stock Option Incentive Plan pursuant to which due to resignation failure to meet the performance

appraisal criteria or other reasons on the part of the grantees the number of grantees was adjusted from 1?695 to 1?650 and the

number of stock options exercisable under the 2018 Stock Option Incentive Plan was adjusted by cancelling 1851452 stock options

granted but not yet exercised so the number of stock options granted but not yet exercised was adjusted from 92964441 to

91112989; the grantees who have satisfied the vesting conditions may exercise the stock options vested in the third vesting period in

their sole discretion from December 24 2021 to September 23 2022. Refer to the Announcement on Cancellation of Certain Stock

Options under and Revision of the Number of Stock Options Exercisable in the Third Vesting Period of the 2018 Stock Option

Incentive Plan (Announcement No.2021-104) and the Cautionary Announcement on Adoption of the Discretionary Exercise Method

for the Third Vesting Period of the 2018 Stock Option Incentive Plan as Revised (Announcement No.2021-105) for details.

68Luxshare Precision Industry Co. Ltd. Annual Report 2021

During the reporting period the grantees exercised their options to purchase 19597470 shares in total within the third vesting

period of the 2018 Stock Option Incentive Plan.

(2) 2019 stock option incentive plan

On June 22 2020 the 19th meeting of the 4th Board of Directors and the 19th meeting of the 4th Board of Supervisors considered

and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the First Vesting Period of the Stock Options

Granted under the 2019 Stock Option Incentive Plan pursuant to which the grantees who have satisfied the vesting conditions may

exercise the stock options vested in the first vesting period in their sole discretion from July 7 2020 to April 21 2021. Refer to the

Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting Period of the Stock Options

Granted under the 2019 Stock Option Incentive Plan (Announcement No.2020-049) for details.During the reporting period the grantees exercised their options to purchase 1291186 shares in total within the first vesting

period of the stock options granted under the 2019 Stock Option Incentive Plan.On January 22 2021 due to resignation failure to meet the performance appraisal criteria or other reasons on the part of the

grantees the number of grantees was adjusted from 258 to 250 and the number of stock options available under the 2019 Stock

Option Incentive Plan was adjusted by cancelling 456286 stock options granted but not yet exercised so the number of stock options

granted but not yet exercised was adjusted from 21113740 to 20657454. Refer to the Announcement on Adjustment of the List of

Grantees and Number of Stock Options Available and Cancellation of Certain Stock Options under the 2019 Stock Option Incentive

Plan (Announcement No.2021-009) for details.On January 22 2021 the 29th meeting of the 4th Board of Directors and the 29th meeting of the 4th Board of Supervisors

considered and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the First Vesting Period of the Stock

Options Available under the 2019 Stock Option Incentive Plan pursuant to which the grantees who have satisfied the vesting

conditions may exercise the stock options vested in the first vesting period in their sole discretion from February 8 2021 to

November 26 2021. Refer to the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting

Period of the Stock Options Available under the 2019 Stock Option Incentive Plan (Announcement No.2021-021) for details.During the reporting period the grantees exercised their options to purchase 4109496 shares in total within the first vesting

period of the stock options available under the 2019 Stock Option Incentive Plan.On July 2 2021 due to the equity distribution for 2020 and resignation failure to meet the performance appraisal criteria or

other reasons on the part of the grantees we adjusted the 2019 stock option incentive plan as follows: the number of grantees was

adjusted from 340 to 332; 744909 stock options granted but not yet exercised were cancelled so the number of stock options granted

but not yet exercised was adjusted from 65977698 to 65232789; and the exercise price of the stock options granted or available

was changed from RMB13.70 per share to RMB13.59 per share. Refer to the Announcement on Adjustment of the Exercise Prices

under the 2018 and 2019 Stock Option Incentive Plans and Cancellation of Certain Stock Options under the 2019 Stock Option

Incentive Plan (Announcement No.2021-064) for details.On July 2 2021 the 2nd meeting of the 5th Board of Directors and the 2nd meeting of the 5th Board of Supervisors considered and

approved the Proposal Regarding Satisfaction of the Vesting Conditions for the Second Vesting Period of the Stock Options Granted

under the 2019 Stock Option Incentive Plan pursuant to which the grantees who have satisfied the vesting conditions may exercise

the stock options vested in the second vesting period in their sole discretion from July 15 2021 to April 21 2022. Refer to the

Cautionary Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the Stock Options

Granted under the 2019 Stock Option Incentive Plan (Announcement No.2021-069) for details.During the reporting period the grantees exercised their options to purchase 14627322 shares in total within the second vesting

period of the stock options granted under the 2019 Stock Option Incentive Plan.

(3) 2021 stock option incentive plan

With the approval of the 4th meeting of the 5th Board of Directors the 4th meeting of the 5th Board of Supervisors and the 1st

extraordinary shareholders’ meeting in 2021 we introduced the 2021 stock option incentive plan.The first grant under the plan was completed on December 3 2021 and registered on December 9 2021. 52092000 stock

options (short name: Luxshare JLC4; code: 037192) in total representing 0.74% of our total share capital at the time of grant were

granted to 1072 grantees at the exercise price of RMB35.87 per share.

(4) Exercise of options during the reporting period

During the reporting period the grantees exercised their options to purchase 53480164 shares in total under the relevant stock

option incentive plans.

69Luxshare Precision Industry Co. Ltd. Annual Report 2021

Share incentives granted to directors and executives

√ Applicable □N/A

Unit: shares

No. of Exercise Market No. of

Beginning additional No. of No. of

price of

shares Ending price at Beginning No. of additional Grant

balance of stock shares shares the end of shares restricted price of

Ending

Name Title stock options exercisable exercised

exercised balance of balance of

during the stock the restricted vested shares restricted

balance of

options granted during the during the reporting options reporting shares during the granted shares

restricted

shares

held during the reporting reporting reporting period period period held

period

(RMB per held

reporting during the (RMB per

period reporting share) held

period (RMB per share) share) period

WU Tiansong CFO 395451 0 131817 131817 10.17 263634 49.20

WU Tiansong CFO 574585 0 168992 168992 13.59 405593 49.20

HUANG Deputy

Dawei General

Manager 659085 0 219695 0 659085 49.20

& Board

Secretary

LI Wei Director

&

Deputy 1689963 0 506989 0 1689963 49.20

General

Manager

WANG Tao Director

&

Deputy 1973876 0 601626 0 1973876 49.20

General

Manager

LI Bin Director

&

Deputy 2636342 0 878781 878781 10.17 1757561 49.20

General

Manager

LI Bin Director

&

Deputy 1351970 0 337992 337992 13.59 1013978 49.20

General

Manager

YE Yiling Director 962265 0 320755 87880 10.17 874385 49.20

&

70Luxshare Precision Industry Co. Ltd. Annual Report 2021

Deputy

General

Manager

YE Yiling Director

&

Deputy 540789 0 135196 90000 13.59 450789 49.20

General

Manager

Total - 10784326 0 3301843 1695462 -- 9088864 -- 0 0 0 -- 0

Remark (if any) Upon re-appointment of the Board of Directors in April 2021 LI Bin and YE Yiling resigned as directors but continue to hold other posts in the Company.Performance appraisal and incentives in respect of executives

All of our executives were appointed by the Board of Directors fairly and transparently in compliance with the applicable laws and regulations. Our executives report to the Board of

Directors and are responsible for achieving the operating targets set by the Board of Directors. We have established effective incentive and constraint mechanisms in order to stimulate the

executives to perform their duties diligently and improve our level of operation and management and operating results. The performance of our executives is directly linked to their income and

assessed by comparing the goals set by us with their actual accomplishment of tasks. The Compensation and Performance Appraisal Committee of the Board of Directors is responsible for

year-end assessment of the achievement of goals working ability and performance of duties in respect of our directors supervisors and executives and developing the compensation and

performance appraisal proposals and submitting the same to the Board of Directors for approval. During the reporting period our compensation and performance appraisal policies for the

executives have been implemented effectively.

71Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Implementation of employee stock ownership plan

□ Applicable √ N/A

3. Other employee incentives

□ Applicable √ N/A

XII. Establishment and implementation of internal controls during the reporting period

1. Establishment and implementation of internal controls

We have established a relatively sound internal control system that has run effectively in strict accordance with the Company

Law the Securities Law the Basic Internal Control Standards for Enterprises the Application Guide for Internal Controls of

Enterprises and other applicable laws regulations and normative documents taking into account the characteristics of our industry

and our actual business situation. From the perspective of corporate management technology R&D and business processes we have

established effective internal controls and improved our corporate governance level and efficiency of decision-making which

guarantees the legal and regulatory compliance of our operation and management security of our assets and the truthfulness and

completeness of our financial reports and other information and effectively promote the steady implementation of our strategies.Our internal control system has a reasonable structure can satisfy the requirements of our management and development and

runs effectively. Our internal controls over financial reporting non-financial reporting and other material matters are effective

achieve the objectives and protect the interests of the Company and all shareholders.

2. Material weakness in internal control identified during the reporting period

□ Yes √ No

XIII. Management and control of subsidiaries during the reporting period

Problems

Company Integration plan Progress of encountered Solutions Progress Subsequent integration during integration adopted of solution solution

Rikai Precision Control the subsidiary through its Completed No N/A N/A N/A

Technology board of directors and manage

(Yancheng) Co. the assets personnel finance

Ltd. organization operation and other

matters of the subsidiary in an

all-round way through

appointment of officers to the

subsidiary

XIV. Self-assessment report on internal controls or auditor’s report on internal controls

1. Self-assessment report on internal controls

Date of disclose of the self-assessment report on internal controls April 28 2022

in its entirety

Disclosure reference Self-assessment Report on Internal Controls 2021 of Luxshare

Precision Industry Co. Ltd. published on www.cninfo.com.cn

Ratio of total assets of the entities covered by the assessment to 75.60%

total assets recorded in the consolidated financial statements of

the Company

Ratio of total operating revenue of the entities covered by the 84.91%

72Luxshare Precision Industry Co. Ltd. Annual Report 2021

assessment to total operating revenue recorded in the

consolidated financial statements of the Company

Criteria for determination of deficiencies

Type Financial reporting Non-financial reporting

Qualitative criteria 1. The material weaknesses in internal control over 1. The material weaknesses in internal control over

financial reporting include: (A) fraud on the part of non-financial reporting include: (A) any serious

directors supervisors and executives; (B) failure to violation of the significant national laws and

correct any material weakness in internal control regulations; (B) great outflow of management and

within a reasonable time after the same was identified technical personnel on key posts; (C) absence of or

and reported to the management; (C) ineffective ineffective control system for important business

control environment; (D) any material misstatement relating to the production and operation of the

in the financial report for the current period that is Company; (D) ineffective internal control over

identified by external auditor but fails to be identified information disclosure resulting in any public

through internal control; (E) any serious violation of condemnation of the Company by any regulatory

the laws and regulations; (F) the Company running at authority; and (E) failure to correct any problem in

a loss for consecutive years due to any reason other particular any material weakness or significant

than policy-related loss which might threaten the deficiency identified in any assessment of internal

Company’s ability to continue as a going concern; controls. 2. The significant deficiencies in internal

and (G) ineffective supervision by the management control over non-financial reporting include: (A)

and related functional departments over the internal defects in important business policies or system or

control. 2. The significant deficiencies in internal unsound internal control system; and (B) failure to

control over financial reporting include: (A) failure to review any information disclosed externally and

select and apply accounting policies pursuant to the untruthfulness of any information disclosed. 3.generally accepted accounting principles; (B) failure General deficiencies in internal control over financial

to establish anti-fraud procedures and controls; (C) reporting include deficiencies in control other than

absence of or ineffective control system for important material weakness and significant deficiency.business; (D) lack of internal controls in and

disorderly management of subsidiaries; and (E) great

outflow of or frequent changes in senior officers

(especially those in charge of internal control

financial and human resources departments) or great

outflow of personnel on the relevant posts. 3. General

deficiencies in internal control over financial

reporting include deficiencies in control other than

material weakness and significant deficiency.Quantitative criteria 1. Material weakness: (1) amount of misstated 1. Material weakness: resulting in a direct loss of

operating revenue ≥ 0.5% of total operating revenue; more than RMB12 million and having a material

(2) amount of misstated profit ≥ 0.5% of total profit; adverse effect on the Company. 2. Significant

(3) amount of misstated assets ≥ 0.5% of total assets; deficiency: resulting in a direct loss of more than

(4) amount of misstated owners’ equity ≥ 0.5% of RMB3 million and not more than RMB12 million

total owners’ equity. 2. Significant deficiency: (1) and any penalty imposed by any competent

0.2% of total operating revenue ≤ amount of government authority of the country but not having

misstated operating revenue < 0.5% of total operating an adverse effect on the Company. 3. General

revenue; (2) 0.2% of total profit ≤ amount of deficiency: resulting in a direct loss of not more than

misstated profit < 0.5% of total profit; (3) 0.2% of RMB3 million and any penalty imposed by any

total assets ≤ amount of misstated assets < 0.5% of competent government authority at the provincial

total assets; (4) 0.2% of total owners’ equity ≤ level or below but not having an adverse effect on

amount of misstated owners’ equity < 0.5% of total the Company.owners’ equity. 3. General deficiency: (1) amount of

misstated operating revenue < 0.2% of total operating

revenue; (2) amount of misstated profit < 0.2% of

total profit; (3) amount of misstated assets < 0.2% of

total assets; (4) amount of misstated owners’ equity <

0.2% of total owners’ equity.

Number of material weaknesses in financial reporting 0

Number of material weaknesses in non-financial reporting 0

Number of significant deficiencies in financial reporting 0

73Luxshare Precision Industry Co. Ltd. Annual Report 2021

Number of significant deficiencies in non-financial reporting 0

2. Auditor’s report on internal controls

□ Applicable √ N/A

3. Internal control certification report

Opinion issued in the internal control certification report

Pursuant to the Basic Internal Control Standards for Enterprises promulgated by the Ministry of Finance and other relevant

provisions the Company has maintained effective internal controls in all material respects as of December 31 2021.Disclosure of the internal control certification report Disclosed

Date of disclosure of the internal control certification report in its April 28 2022

entirety

Disclosure reference Internal Control Certification Report 2021 of Luxshare Precision

Industry Co. Ltd. published on www.cninfo.com.cn

Type of opinion issued in the internal control certification report Standard unqualified opinion

Whether there’s any material weakness in non-financial No

reporting

Whether the accounting firm issued a modified internal control certification report?

□ Yes √ No

Whether the internal control certification report issued by the accounting firm conforms to the opinion issued by the self-assessment

report of the Board of Directors?

√Yes □ No

XV. Rectification of non-compliance identified in the special self-examination of corporate

governance of the listed company

Pursuant to the requirements of the Announcement on Launching the Special Campaign for Corporate Governance of the Listed

Companies issued by the CSRC we carried out self-examination of our corporate governance in strict accordance with the Company

Law the Securities Law the AOA the Rules of Procedure of the Board of Directors the Rules of Procedure of the Board of

Supervisors and other applicable laws regulations and normative documents in an orderly manner on the principle of seeking truth

from facts and completed the Questionnaire for Self-Examination of Corporate Governance of the Listed Company which includes

119 questions covering seven areas.

Our self-examination showed that we operated in compliance with the applicable regulations and was governed well during the

reporting period and did not identify any material non-compliance in our corporate governance. We will continue to improve our

level of corporate governance and further promote our high-quality development.

74Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section V Environment and Social Responsibilities

I. Major environmental issues

Whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authority

√ Yes □ No

Name of

main

Name of the pollutants Number Discharge of Distribution Emission Pollutant discharge Total Company or and method discharge of discharge concentratio standards

Total approved Excessive

its subsidiaries characteris outlets outlets n implemented

emissions emissions emissions

tic

pollutants

Taken over by

the wastewater

Rikai treatment plant

Precision Ammonia after the Technology Sewage

(Yancheng) nitrogen

treatment by the 1

wastewater station

2.705291407.2249.04/

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision Total after the

Technology phosphoru treatment by the 1 Sewage 0.921442 8mg/l 2.46 7.08 /

(Yancheng) s wastewater station

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision Total after the Technology nitrogen treatment by the 1

Sewage

station 9.398368 60mg/l 25.07 69.86 / (Yancheng) wastewater

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision after the

Technology Anionic surfactant treatment by the 1

Sewage

station 0.100312 15 mg/l 0.27 / / (Yancheng) wastewater

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision after the

Technology pH level treatment by the 1 Sewage 0 6-9 0 / /

(Yancheng) wastewater station

Co. Ltd. treatment station

meets the

standards

75Luxshare Precision Industry Co. Ltd. Annual Report 2021

Taken over by

the wastewater

Rikai treatment plant

Precision Chemical after the

Technology oxygen treatment by the 1 Sewage station 60.29317 500 mg/l 160.85 729.32 / (Yancheng) demand wastewater

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision after the

Technology Fluoride treatment by the 1 Sewage 8.576927 20 mg/l 22.88 / /

(Yancheng) wastewater station

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision Suspended after the Technology solids treatment by the 1

Sewage 30.80756 400 mg/l 82.19 / /

(Yancheng) wastewater station

Co. Ltd. treatment station

meets the

standards

Taken over by

the wastewater

Rikai treatment plant

Precision after the

Technology Petroleum treatment by the 1 Sewage 0.801746 20 mg/l 2.14 / /

(Yancheng) wastewater station

Co. Ltd. treatment station

meets the

standards

Environmental

Rikai protection B4、B5、B6、

Precision (secondary

Technology VOCs activated carbon 51 C4、C5、C6、3.15 60 mg/l 18.40 / /

(Yancheng) and oil mist C7、B7、C3、

Co. Ltd. washing tower) B3

equipment

Environmental

protection (oil

Rikai mist washing B4、B5、B6、

Precision tower low

Technology SO2 nitrogen 51 C4、C5、C6、0.76 20 mg/l 2.05 / /

(Yancheng) combustion C7、B7、C3、

Co. Ltd. alkali spray B3

tower)

equipment

Environmental

Rikai protection (wet B4、B5、B6、

Precision dust removal

Technology Particulate matter low nitrogen 51

C4、C5、C6、5.53 50 mg/l 13.95 / /

(Yancheng) combustion C7、B7、C3、

Co. Ltd. direct discharge) B3

equipment

Rikai Environmental B4、B5、B6、

Precision protection NOx 51 C4、C5、C6、15.23 60 mg/l 1.78 1.7853 /

Technology (secondary activated carbon C7、B7、C3、(Yancheng) and oil mist B3

76Luxshare Precision Industry Co. Ltd. Annual Report 2021

Co. Ltd. washing tower)

equipment

Rishan Level 3 provided in

Computer Chemical the Integrated

Accessories oxygen Pipe discharge 1 Main outlet 500mg/L Standards of Wastewater 50.562 112.2094 / (Jiashan) Co. demand

Ltd. Discharge (GB8979-1996)

Restrictions on

Rishan Indirect Discharge

Computer of Nitrogen and

Accessories Ammonia nitrogen Pipe discharge 1 Main outlet 35mg/L

Phosphorus

(Jiashan) Co. Pollutants from

4.01411.2209/

Ltd. Wastewater of Industrial

Enterprises

Rishan Discharge

Computer Total Standards of Accessories

(Jiashan) Co. nickel

Pipe discharge 1 Main outlet 0.1mg/L Electroplating 0.001 0.02 /

Pollutants

Ltd. (GB21900-2008)

Rishan Discharge

Computer

Accessories Total

Standards of

chromium Pipe discharge 1 Main outlet 0.5mg/L Electroplating 0.012 0.026 / (Jiashan) Co. Pollutants

Ltd. (GB21900-2008)

Rishan Collect in a

Computer centralized Roof of Integrated

Accessories VOC manner and then 26 F1/F2/F3/F4/F5/F7/F9/F 120mg/m3

Emission Standards

(Jiashan) Co. emit after of Air Pollutants

9.3310.8962/

Ltd. pretreatment 10/F11 (GB16297-1996)

Rishan Collect in a

Computer centralized Roof of Integrated

Accessories Particulate matter manner and then 12 F3/F5/F6-1/ 120mg/m3

Emission Standards

of Air Pollutants 1.876 10.595 / (Jiashan) Co. emit after F6-2/F7

Ltd. pretreatment (GB16297-1996)

Rishan Collect in a Discharge

Computer Nitrogen centralized Standards of Accessories manner and then 8 Roof of 200mg/m3 Electroplating 0.554 0.903 /

(Jiashan) Co. oxide emit after F5/F7 Pollutants

Ltd. pretreatment (GB21900-2008)

Level 3 provided in

Riming the Table 2 of the

Computer Wastewate South of the Integrated Accessories r (PH) Pipe discharge 1 sewage 7.4 Standards of / / / (Shanghai) station Wastewater

Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming Wastewate the Table 2 of the Computer r South of the Integrated Accessories (suspende Pipe discharge 1 sewage 15 Standards of 4.771 / / (Shanghai) d solids) station Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming the Table 2 of the

Computer South of the Integrated

Accessories Wastewater (chroma) Pipe discharge 1 sewage 40 Standards of 4.522 / / (Shanghai) station Wastewater

Co. Ltd. Discharge (DB31

199-2018)

77Luxshare Precision Industry Co. Ltd. Annual Report 2021

Level 3 provided in

Riming Wastewate the Table 2 of the

Computer r South of the Integrated

Accessories (chemical Pipe discharge 1 sewage 72 Standards of 11.425 33.842 /

(Shanghai) oxygen station Wastewater

Co. Ltd. demand) Discharge (DB31

199-2018)

Level 3 provided in

Riming the Table 2 of the

Computer Wastewater South of the Integrated Accessories (petroleum Pipe discharge 1 sewage 0.54 Standards of 0.195 / / (Shanghai) ) station Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming Wastewate the Table 2 of the Computer r South of the Integrated Accessories (ammonia Pipe discharge 1 sewage 9.62 Standards of 0.785 1.05 / (Shanghai) nitrogen) station Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming the Table 2 of the

Computer Wastewate South of the Integrated

Accessories r (anionic Pipe discharge 1 sewage 0.07 Standards of 0.088 / /

(Shanghai) surfactant) station Wastewater

Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming the Table 2 of the

Computer Wastewater (total South of the Integrated Accessories

(Shanghai) phosphoru

Pipe discharge 1 sewage 0.42 Standards of 0.061 5.25 /

s) station Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming the Table 2 of the

Computer Wastewate South of the Integrated

Accessories r (total Pipe discharge 1 sewage 5.253.1 Standards of 1.938 / /

(Shanghai) nitrogen) station Wastewater

Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming the Table 2 of the

Computer Wastewate South of the Integrated

Accessories r (five-day Pipe discharge 1 sewage 31.6 Standards of 3.609 / /

(Shanghai) BOD) station Wastewater

Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Riming Wastewate the Table 2 of the Computer

Accessories r

South of the Integrated

Pipe discharge 1 sewage 0.316 Standards of / / /

(Shanghai) (aluminum ) station Wastewater Co. Ltd. Discharge (DB31

199-2018)

Riming Treated exhaust

Computer Exhaust gas meets the Integrated

Accessories gas (oil standards and is 63 Plant roof 0.1 Emission Standards

(Shanghai) mist) emitted at high of Air Pollutants

1.3464//

Co. Ltd. altitude (DB31_933-2015)

Riming Exhaust Treated exhaust 7 Plant roof 0.067 Integrated 0.554 3.02 /

Computer gas gas meets the Emission Standards

78Luxshare Precision Industry Co. Ltd. Annual Report 2021

Accessories (particulat standards and is of Air Pollutants

(Shanghai) e matter) emitted at high (DB31_933-2015)

Co. Ltd. altitude

Riming Treated exhaust

Computer

Accessories Exhaust

gas meets the Emission Standards

gas (odor) standards and is 1 Plant roof ND for Odor Pollutants 0 / / (Shanghai) emitted at high (DB311025-2016)

Co. Ltd. altitude

Riming Exhaust Treated exhaust

Computer gas gas meets the Integrated

Accessories (non-meth standards and is 3 Plant roof ND Emission Standards 0 0.1348 /

(Shanghai) ane hydrocarb emitted at high

of Air Pollutants

Co. Ltd. altitude (DB31_933-2015) on)

Level 3 provided in

Sheng Rui the Table 2 of the

Electronic Wastewate South of the Integrated

Technology r (total Pipe discharge 1 sewage ND Standards of 0.000143 0.0054 /

(Shanghai) nickel) station of the plant Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui South of the the Table 2 of the Electronic

Technology Wastewate Pipe discharge 1 sewage

Integrated

(Shanghai) r (PH) station of

7.5 Standards of / / /

the plant Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui

Electronic Wastewate South of the

the Table 2 of the

Technology r (total Pipe discharge 1 sewage

Integrated

phosphoru station of 0.32 Standards of 0.164 / / (Shanghai) s) the plant Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui the Table 2 of the

Electronic Wastewate South of the Integrated

Technology r (total Pipe discharge 1 sewage 1.95 Standards of 0.84 27.63 /

(Shanghai) nitrogen) station of

Co. Ltd. the plant

Wastewater

Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui the Table 2 of the

Electronic Wastewate South of the r Integrated Technology (ammonia Pipe discharge 1

sewage

(Shanghai) station of

1.43 Standards of 0.192 0.988 /

Co. Ltd. nitrogen) the plant

Wastewater

Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui

Electronic South of the

the Table 2 of the

Integrated

Technology Wastewate sewage

(Shanghai) r (COD)

Pipe discharge 1 station of 134 Standards of 47.867 52.45 / Wastewater

Co. Ltd. the plant Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui South of the the Table 2 of the Electronic

Technology Wastewate sewage

Integrated

(Shanghai) r (chroma)

Pipe discharge 1 station of 1 Standards of 2.283 / /

the plant Wastewater Co. Ltd. Discharge (DB31

199-2018)

79Luxshare Precision Industry Co. Ltd. Annual Report 2021

Level 3 provided in

Sheng Rui the Table 2 of the

Electronic Wastewate South of the r sewage Integrated Technology (suspende Pipe discharge 1 (Shanghai) station of

16 Standards of 13.087 / /

d solids) the plant Wastewater Co. Ltd. Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui

Electronic Wastewate South of the

the Table 2 of the

Integrated

Technology r sewage

(Shanghai) (petroleum

Pipe discharge 1 station of ND Standards of 0.632 / / Wastewater

Co. Ltd. ) the plant Discharge (DB31

199-2018)

Level 3 provided in

Sheng Rui South of the the Table 2 of the Electronic Integrated

Technology Wastewate Pipe discharge 1 sewage 2.66 Standards of 0.043 / /

(Shanghai) r (LAS) station of Wastewater

Co. Ltd. the plant Discharge (DB31

199-2018)

Sheng Rui

Electronic Exhaust

Treated exhaust Discharge

gas gas meets the Standards of Technology (Nitrogen standards and is 17

Plant roof

and 1/F 0.2 Electroplating 0.071 3.442 / (Shanghai) oxide) emitted at high Pollutants Co. Ltd. altitude (GB21900-2008)

Sheng Rui Exhaust Treated exhaust Discharge Electronic gas meets the Standards of

Technology gas (sulfuric standards and is 15

1/F of the

plant ND Electroplating 0 / / (Shanghai) acid mist emitted at high Pollutants Co. Ltd. altitude (GB21900-2008)

Sheng Rui

Electronic Exhaust

Treated exhaust

gas meets the Integrated

Technology gas (particulat standards and is 6 Plant roof 2.2

Emission Standards

(Shanghai) emitted at high of Air Pollutants

0.8832.533/

Co. Ltd. e matter) altitude (DB31_933-2015)

Sheng Rui Treated exhaust

Electronic Exhaust gas meets the Integrated

Technology gas (alkali standards and is 15 1/F of the ND Emission Standards 0 / /

(Shanghai) mist) emitted at high plant of Air Pollutants

Co. Ltd. altitude (DB31_933-2015)

Sheng Rui Treated exhaust

Electronic Exhaust gas meets the Sewage Emission Standards Technology gas (odor) standards and is 1 station ND for Odor Pollutants 0 / / (Shanghai) emitted at high (DB311025-2016)

Co. Ltd. altitude

Sheng Rui Exhaust Treated exhaust Emission Standards

Electronic gas gas meets the of Pollutants from

Technology (non-methane standards and is 1 Plant roof 1.21 Synthetic Resin 0.016 / / (Shanghai)

Co. Ltd. hydrocarb

emitted at high Industry

on) altitude (GB31572-2015)

Construction and operation of pollution prevention facilities

I. Rikai Precision Technology (Yancheng) Co. Ltd.

1. 7 sets of low nitrogen combustion systems: The denitration facilities operate for 8400 hours per year.

2. 17 sets of dust removal systems: The dust removal facilities operate for 8400 hours per year.

3. 15 sets of organic exhaust gas collection and treatment systems.

4. 13 sets of acid exhaust gas treatment systems.

II. Rishan Computer Accessories (Jiashan) Co. Ltd.Wastewater: The plant implements the divergence of clean water and sewage and the divergence of rain and sewage and

separately pretreats the wastewater containing chromium nickel phosphorus and nitro and organic wastewater and after they meet

the standards then directly discharges them into the pipe. The pH CODcr SS and petroleum at the pipe inlet meet the Level 3

provided in Integrated Standards of Wastewater Discharge (GB8979-1996) and the ammonia nitrogen and total phosphorus are

80Luxshare Precision Industry Co. Ltd. Annual Report 2021

lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants from

Wastewater of Industrial Enterprises (DB33/887-2013); the discharge of Class-A pollutants such as total chromium CR VI and

nickel are lower than the limits of indirect discharge to Taihu Lake Basin in the Table 1 of the Discharge Standards of Electroplating

Water Pollutants (DB33/2260-2020); CODcr and petroleum at the discharge outlet of phosphorus-containing wastewater treatment

facilities meet the Level 3 provided in the Integrated Standards of Wastewater Discharge (GB8978-1996); the total phosphorus is

lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants from

Wastewater of Industrial Enterprises (DB33/887-2013); the pH and CODcr at the discharge outlet of nitro-containing wastewater

treatment facilities meet the Level 3 provided in Integrated Standards of Wastewater Discharge (GB8978-1996) and ammonia

nitrogen is lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants

from Wastewater of Industrial Enterprises (DB33/887-2013); the pH CODcr SS and petrolem at the discharge outlet of organic

wastewater treatment facilities meet the Level 3 provided in Integrated Standards of Wastewater Discharge (GB8978-1996); in

general the washing wastewater is collected separately and after pretreament some is reused while some is discharged. The total

reuse rate of production wastewater in two days is monitored at 31.0% and 32.4% meeting the requirements. The online monitoring

facility is installed at the wastewater pipe inlet to monitor pH CODcr ammonia nitrogen and other factors; the standardized rain

outlets and signboards are set within the plant. The wastewater treatment facilities are built including one accident emergency pool

covering an area of 2776 m3 and two initial rain collection pools covering a total area of 806 m3.Exhaust gas: The main production equipment are laid out in accordance with the environmental impact assessment: CNC

equipment is installed respectively at F1 F2 and F3 workshops; the anode line is arranged in F5 workshop; the volatile oil mist

generated by the workshops of CNC equipment (F1 F2 and F3) is treated by the supporting treatment facility (i.e. electrostatic oil

removal facility) and then emitted through a 25m-high exhaust funnel after it meets the Level 2 of the Integrated Emission Standards

of Air Pollutants (GB16297-1996); the particulate exhaust gas generated by the workshops of sandblast equipment (F1 F2 and F3) is

treated by the supporting treatment facility (i.e. spray tower) and then emitted through a 25m-high exhaust funnel after it meets the

Level 2 of the Integrated Emission Standards of Air Pollutants (GB16297-1996); the injection molding exhaust gas generated by the

workshops of the injection molding equipment (F5 and F9) is treated by the activated carbon adsorption device and then emitted

through a 25m-high exhaust funnel after it meets the special emission limits of air pollutants provided in Table 5 of the Emission

Standards of Pollutants from Synthetic Resin Industry (GB31572-2015); the exhaust gas such as sulfuric acid mist and nitric acid

mist generated by the workshop of the anode line (F5) is treated by the supporting treatment facility (i.e. alkali liquor spray tower)

and then emitted through a 25m-high exhaust funnel after it meets the emission limits provided in Table 5 of the Emission Standards

of Electroplating Pollutants (GB21900-2008); the VOC exhaust gas generated by the assembly workshop is treated by the activated

carbon adsorption device and then emitted through a 25m-high exhaust funnel after it meets the Level 2 provided in the Integrated

Emission Standards of Air Pollutants (GB16297-1996).The plant is 420 meters away from its nearest sensitive point in the northwest i.e. Maojia Community meeting the

requirements.Noise: According to the monitoring results the noise at the east and south boundaries of the plant meets Class 3 of the Standards

on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008) and the noise at the west and north boundaries

meets Class 4 of the Standards on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008).Solid waste: 1. A classified collection system is established for solid waste which is classified into hazardous waste and general

solid waste. Meanwhile the domestic waste and industry solid waste shall be divided on connection. The sludge produced by waste

water is separately pressed filtered and collected through being classified into three types such as nickel containing sludge

chromium containing sludge and physical and chemical sludge. 2. The temporary storage place for general solid waste is set up in the

production plant. General solid waste such as metal leftovers and injection molding waste is bagged and collected in the temporary

storage place according to the requirements. 3. A special temporary storage place for hazardous waste covering an area of 648 m2 is

set up in the production plant to collect and temporarily store hazardous waste according to the relevant requirements. 4. The

temporary storage place for used sulfuric acid phosphoric acid and other raw material packaging barrels is set up according to the

requirements of the temporary storage place for hazardous waste. 5. Metal leftovers sandblast waste and collected dust among

others are sold to recycling companies for comprehensive utilization. The biochemical sludge produced by wastewater treatment is

collected and sent to the urban waste treatment system and domestic waste is uniformly transported and treated by the local

environmental sanitation department. 6. Hazardous waste such as waste cutting fluid grinding waste residue waste packaging

materials (sodium hydroxide etc.) (sludge containing nickel and chromium and physical and chemical sludge) is collected and

entrusted to qualified units for disposal.III. Riming Computer Accessories (Shanghai) Co. Ltd.

1. Measures for noise pollution prevention: The outdoor equipment the equipment close to the plant boundaries and the cooling

tower are environmentally friendly. Most equipment is installed in the workshop and on the roof of the workshop a reasonable layout.The basic shock absorption is made when the equipment is installed the fan is equipped with silencer and the flexible connector is

used for the connection of blast pipes.

2. Measures for hazardous waste pollution prevention: The plant is equipped with the special hazardous waste cans and

warehouses implements the “Three Prevention” system and carries out irregular self check and self correction;

3. Measures for exhaust gas pollution prevention: A regular check is carried out for the completeness of the waste gas tower

body liquid tank spray system filling materials gas-liquid separator etc. and the filling materials are replaced in time; after the air

volume of the extraction equipment is adjusted and balanced the full-automatic control is adopted so that each extraction point falls

within a reasonable air volume range.

4. Measures for wastewater pollution prevention: The principle of divergence is implemented. Different kinds of wastewater

enter the corresponding sewage pool through different pipes. The pipes are overhead and pasted with signs of flow direction. The

completeness of the pipes is checked regularly and any abnormality if found will be handled immediately. All pools and floors of

the sewage station are paved and hardened for anti seepage and anti corrosion.IV. Sheng Rui Electronic Technology (Shanghai) Co. Ltd.

1. Measures for noise pollution prevention: The outdoor equipment the equipment close to the plant boundaries and the cooling

81Luxshare Precision Industry Co. Ltd. Annual Report 2021

tower are environmentally friendly. Most equipment is installed in the workshop and on the roof of the workshop a reasonable layout.The basic shock absorption is made when the equipment is installed the fan is equipped with silencer and the flexible connector is

used for the connection of blast pipes.

2. Measures for hazardous waste pollution prevention: The plant is equipped with the special hazardous waste cans and

warehouses implements the “Three Prevention” system and carries out irregular self check and self correction;

3. Measures for exhaust gas pollution prevention: A regular check is carried out for the completeness of the waste gas tower

body liquid tank spray system filling materials gas-liquid separator etc. and the filling materials are replaced in time; after the air

volume of the extraction equipment is adjusted and balanced the full-automatic control is adopted so that each extraction point falls

within a reasonable air volume range.

4. Measures for wastewater pollution prevention: The principle of divergence is implemented. Different kinds of wastewater

enter the corresponding sewage pool through different pipes. The pipes are overhead and pasted with signs of flow direction. The

completeness of the pipes is checked regularly and any abnormality if found will be handled immediately. All pools and floors of

the sewage station are paved and hardened for anti seepage and anti corrosion.Environmental impact assessment of construction projects and other environmental protection administrative permits

I. Rikai Precision Technology (Yancheng) Co. Ltd.Area B: 1. Impact of wastewater discharge on main protection objectives. After this project is completed the comprehensive

wastewater produced by the whole plant will be 942900t/a (2694t/d) representing 22.5% of the comprehensive wastewater

treatment capacity (i.e. 12000 t/d); the heavy metal wastewater produced by the whole plant will be 168700t/a (482t/d) but the

wastewater treatment capacity (150t/d) of the heavy metal wastewater treatment center currently in progress cannot meet the

requirements of heavy metal wastewater treatment capacity after completion of this project. Therefore it is feasible to connect the

pipes for the heavy metal wastewater of this project only if the heavy mental treatment center’s treatment capacity meets the heavy

mental wastewater volume of this project. 2. Impact analysis of air environment. The maximum ground concentration of each

pollutant is less than 10% of its corresponding standards and the predicted maximum concentration value based on calculation plus

the maximum value based on monitoring of regional pollutants also meet the standards. Therefore the air quality of the surrounding

environmental sensitive points can meet the requirements notwithstanding under most unfavorable conditions. As can be seen the

pollutants discharged by the project have little impact on the environment and will not change the functions of the surrounding air

environment. 3. Impact of noise on the surrounding environment. The Company has implemented the corresponding sound insulation

measures and accordingly the predicted noise value at the boundaries of the whole plant during the day and at night meets Level 3

provided in the Standard on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008). 4. Environmental impact

of solid waste. The solid waste produced by this project can realize zero discharge without secondary pollution after being properly

treated and disposed. 5. Impact analysis of groundwater environment. According to the prediction results of groundwater on the

abnormal working conditions namely if the sewage state has continuous leakage the maximum contribution value is 45.309mg/L

when the concentration of Cr VI at 10m downstream is 1000d and with reference to the standard (Level 3 of groundwater quality

standard is 0.05mg/L) Cr VI of the groundwater (100d and 1000d) at 100m downstream meets the Level 3 standard; the maximum

contribution value is 181.237 mg/L when the concentration of Ni at 10m downstream is 1000d and with reference to the standard

(Level 3 of groundwater quality standard is 0.05mg/L) the Ni of the groundwater (100d and 1000d) at 200m downstream meets the

Level 3 standard.Area C: 1. Impact on air environment: According to the calculation results of air estimation model the maximum ratio of each

pollutant is less than 10% of the rating standards after completion of this project and is determined as Level 2. After technology

transformation the unorganized exhaust gas emission in Area C does not exceed the standards outside the plant boundaries. The

health protection distance is required to be set by extending 100m outside the C4-C7 production workshops namely by extending

33m outside the east boundary of the plant 12m outside the west boundary of the plant and 80m outside the north boundary of the

plant. There are no sensitive protection targets such as residents within the above-mentioned scope. 2. Impact on water environment:

After the technology transformation project is completed the heavy metal wastewater in area C is treated by the heavy metal zero

discharge system and then reused in the anodic oxidation process; the wet polishing wastewater is treated by the wet polishing

wastewater treatment facility and then reused in the wet polishing process; after the chemical polishing wastewater is treated by the

phosphoric acid concentration system the waste acid is entrusted to a qualified unit for treatment; the wastewater and cooling water

produced by pure water preparation are discharged as clean water; the initial rain collected and comprehensive sewage after being

treated by the comprehensive sewage station are sent to Yancheng City Tongqi Water Co. Ltd. for in-depth treatment and the

domestic sewage after being treated by septic pool is sent to Yancheng City Tongqi Water Co. Ltd. for in-depth treatment. The

project has little impact on the regional surface water environment. 3. Impact on acoustic environment: After technology

transformation the high noise sources in Area C are rationally laid out and effectively governed which has little impact on the plant

boundaries and surrounding residents. 4. Impact of solid waste After technology transformation the solid waste in Area C are

effectively treated and treated which has little impact on the environment. 5. Impact on groundwater environment: After technology

transformation the zoning prevention and control measures are taken towards potential impact on groundwater and soil with the aim

to effectively preventing the leachate or wastewater seeping into and polluting groundwater. Therefore this project has little impact

on groundwater environment. 6. Impact on risk environment: After the technology transformation the reasonable risk prevention

measures and emergency plans are taken and formulated in Area C to ensure that the risk level will fall within a controllable and

bearable scope.To sum up this project has little impact on regional environment quality and will not change its functions and categories.II. Rishan Computer Accessories (Jiashan) Co. Ltd.Shan Huan Han [2016] No. 91 Bao Gao Biao Bei [2017] No. 010 Bao Gao Biao Bei [2017] No. 013 Shan Huan Han [2018]

No. 91 and Deng Ji Baio Bei [2020] No. 088.III. Riming Computer Accessories (Shanghai) Co. Ltd.Jin Huan Xu [2012] No. 34 Jin Huan Xu [2014] No. 479 Jin Huan Xu [2015] No. 195 Jin Huan Xu [2015] No. 323 Jin Huan

82Luxshare Precision Industry Co. Ltd. Annual Report 2021

Xu [2018] No. 170 Jin Huan Xu [2019] No. 254 and Jin Huan Xu [2020] No. 27.IV. Sheng Rui Electronic Technology (Shanghai) Co. Ltd.Jin Huan Xu [2012] No. 544 Jin Huan Yan [2012] No. 62 Jin Huan Yuan [2014] No. 126 Jin Huan Xu [2018] No. 187 Jin

Huan Xu [2020] No. 245 and the Pollution Discharge Permit No.: 91310000575815657F001P.Emergency plan for abrupt environmental pollution accidents

I. Rikai Precision Technology (Yancheng) Co. Ltd.Yancheng Luxcase has formulated the Emergency Plan for Abrupt Environmental Pollution Accidents.II. Rishan Computer Accessories (Jiashan) Co. Ltd.In September 2021 Rishan Computer has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd

Edition) and has completed the formalities for expert review and filing with the filing No.: 330421-2021-105-M.III. Riming Computer Accessories (Shanghai) Co. Ltd.Riming Computer has prepared the Emergency Plan within the valid term and suitable to the plant and has filed with the

ecological environment bureau with filing No.: 02-310116-2019-048-L.IV. Sheng Rui Electronic Technology (Shanghai) Co. Ltd.Sheng Rui Electronic has prepared the Emergency Plan within the valid term and suitable to the plant and has filed with the

ecological environment bureau with filing No.: 02-310116-2021-022-M.Environmental self-monitoring program

I. Rikai Precision Technology (Yancheng) Co. Ltd.Rikai Yancheng has formulated the Monitoring Program in accordance with the environment impact assessment report.II. Rishan Computer Accessories (Jiashan) Co. Ltd.Rishan Computer has prepared the Self-monitoring program for 2022 in December 2021 to test the organized exhaust gas at the

emission outlet once every half a year the unorganized exhaust gas once a year indicators of suspended solids and petroleum at the

inlet of wastewater once a month indicators of total chromium Cr VI and total nickel once a day and noise once a quarter.III. Riming Computer Accessories (Shanghai) Co. Ltd.Riming Computer updates the Environmental Self-monitoring Program in accordance with the requirements of the pollutant

discharge license and environment assessment and entrusts a qualified third-party monitoring agency with sampling testing and

issuing a compliance report.IV. Sheng Rui Electronic Technology (Shanghai) Co. Ltd.Riming Computer updates the Environmental Self-monitoring Program in accordance with the requirements of the pollutant

discharge license and environment assessment and entrusts a qualified third-party monitoring agency with sampling testing and

issuing a compliance report.Administrative penalties imposed due to environmental issues during the reporting period

Name of the Effects on the

Company or

its Reasons for penalty Violations Penalty results

listed company’s

production and Rectification measures of the Company

subsidiaries operation

On November 3 1. An independent wastewater pipe will

2020 Jiaxing be added in the north within the plant

Ecological through which the pretreated production

Environment Rishan wastewater meeting the standard will be

Bureau checked Computer is the transmitted to the main discharge outlet.Rishan’s plant subsidiary of A parshall flume will be built at the main

located at No. 89 Violate the Rikai Computer discharge outlet and a set of automatic

Changjiang Road provisions On February 4 2021 (now known as monitoring device meeting the

Huimin Street of Article 10 Jiaxing Ecological Rikai Yancheng) standardization requirements will be

Rishan Jiashan County and of the Law Environment Bureau when the newly installed to monitor the quality of

Computer discovered that the of the imposed an Company production wastewater. The original

Accessories total phosphorus People’s Administrative consummated wastewater pipe will be used for

(Jiashan) concentration of the Republic of Penalty (Jia Huan the closing on domestic sewage discharge and the

Co. Ltd. wastewater at its China on the (Shan) Fa Zi [2021] February 3 original online monitoring device is used

main sewage Prevention No. 3) amounting to 2021. This for internal monitoring of domestic

discharge outlet is and Control RMB250000 on administrative sewage quality. After transformation the

9.66mg/L of Water Rishan Computer. penalty has no Company’s internal domestic sewage

exceeding Level 1 Pollution. effects on the and the production wastewater are

provided in Table 1 Company’s diverged. The independent online

of the Restrictions production and monitoring system monitors the water

on Indirect operation. quality facilitating future environmental

Discharge of protection monitoring and management

Nitrogen and work. Once abnormal data exceeding the

Phosphorus standards are found the response

83Luxshare Precision Industry Co. Ltd. Annual Report 2021

Pollutants from measures can be taken immediately to

Wastewater of stop the discharge of corresponding

Industrial water sources until they meet the

Enterprises discharge requirements of environmental

(DB33/887-2013) protection. 2. The emergency pool and

namely 8mg/L. sewage pipe are checked on a regular

basis every year and the manufacturer is

arranged to flush the rain and sewage

pipe network at least once a year. 3. The

environmental protection risk

assessment the environmental protection

measure acceptance and process

monitoring and management are strictly

implemented towards the new

reconstructed expanded

projects/production processes.Other environment information to be disclosed

N/A

Measures taken to reduce carbon emissions during the reporting period and their effects

√ Applicable □ N/A

The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn) the information

disclosure website designated by the Company together with this report on the same day.Other environmental information

The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn) the information

disclosure website designated by the Company together with this report on the same day.II. Social responsibility

The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn) the information

disclosure website designated by the Company together with this report on the same day.III. Consolidation and expansion of poverty alleviation and rural revitalization

The Company did not carry out the work on poverty alleviation and rural revitalization during the reporting period or have

subsequent relevant plans.

84Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section VI Significant Events

I. Performance of commitments

1. Complete and incomplete commitments of the Company and its actual controller shareholders related

parties acquirers and other related parties for the commitments by the end of the reporting period.√ Applicable □ N/A

Date of Term of

Giver of Commitmen Performa

Commitments Details of commitments commitment commitme

commitments t type nce

s nts

Commitments relating to the

transformation into share holding

system

Commitments made in any acquisition

report or report on changes in equity

Commitments relating to any asset

restructuring

Pursuant to the applicable

regulations of the China

Securities Regulatory

Commission in order to

ensure the implementation

of the remedial measures

HUANG for diluted earnings of the

Dawei LI Company each of the

Bin LIN directors and executives

Yifei WANG of the Company hereby

commitments as follows:

Laichun 1. I will not transfer The

WANG benefits to any other commitm

Commitments relating to any initial Other

Laisheng WU entity or individual ents have

public offering or subsequent fund commitment without compensation or July 112019 Permanent

Tiansong

raising s on unfair terms or

been

XIONG otherwise damage the fulfilled

Tengfang XU interest of the Company. strictly

2. I will exercise

Huaibin XUE self-discipline in

Haigao YE consumption in

Yiling performing my duties.ZHANG Ying 3. I will not use the assets

of the Company to engage

in any investment or

consumption activity not

in connection with my

duties.

4. I will within my

85Luxshare Precision Industry Co. Ltd. Annual Report 2021

powers procure the

linkage between the

compensation system

adopted by the Board of

Directors or the

Compensation and

Performance Appraisal

Committee and the

implementation of the

Company’s remedial

measures for diluted

earnings.

5. I will within my

powers procure the

linkage between the

vesting conditions in

respect of any share

incentives granted by the

Company and the

implementation of the

Company’s remedial

measures for diluted

earnings.

6. I undertake to strictly

fulfill the commitments

set forth above to ensure

the implementation of the

remedial measures for

diluted earnings of the

Company. If I breach or

refuse to fulfill any

commitment set forth

above I will make

explanations and

apologies and perform

other obligations required

by the applicable

regulations and agree to

accept any punishment or

regulatory action that may

be imposed on or taken

against me by the China

Securities Regulatory

Commission the

Shenzhen Stock Exchange

or any other competent

securities regulatory

authority pursuant to the

applicable rules and

regulations established or

promulgated by such

regulatory authorities and

indemnify the Company

or its shareholders for the

losses (if any) arising

therefrom according to

law.

86Luxshare Precision Industry Co. Ltd. Annual Report 2021

In order to seriously

protect the legitimate

rights and interests of the

Company and all of its

shareholders each of the

controlling shareholder

and actual controllers of

the Company hereby

commitments as follows:

1. We/I will not interfere

with management and

operation of the Company

beyond our/my powers or

infringe on the interest of

the Company.

2. We/I will procure the

implementation of the

remedial measures for

diluted earnings of the

Company and fulfill

our/my commitments in

connection therewith. If

We/I breach or refuse to

fulfill any commitment set

forth above We/I agree to

Luxshare accept any punishment or The

regulatory action that may

Limited

Other be imposed on or taken

commitm

WANG

commitment against us/me by the

July 11 ents have

Permanent

Laichun China Securities 2019 been

s

WANG Regulatory Commission fulfilled

the Shenzhen Stock

Laisheng Exchange or any other strictly

competent securities

regulatory authority

pursuant to the applicable

rules and regulations

established or

promulgated by such

regulatory authorities and

indemnify the Company

or the investors for the

losses (if any) arising

therefrom according to

law.

3. From the date of this

commitment till the date

of completion of this

offering if the China

Securities Regulatory

Commission or any other

competent securities

regulatory authority

adopts any new regulation

regarding the remedial

measures for diluted

earnings and

commitments in

87Luxshare Precision Industry Co. Ltd. Annual Report 2021

connection therewith and

the commitments set forth

above do not satisfy the

requirements of such new

regulation We/I will make

supplementary

commitments pursuant to

the new regulation.Luxshare Limited as the

controlling shareholder of

the Company and WANG

Laichun and WANG

Laisheng as the actual

controllers of the

Company hereby

commitment as follows:

1. We Luxshare Limited

as the controlling

shareholder of the

Company undertake not

to interfere with

management and

operation of the Company

beyond our powers or

infringe on the interest of

the Company.

2. I WANG Laichun as

the actual controller

Chairman and General

Luxshare Manager of the Company The

undertake to perform my

Limited

Other duties in accordance with

commitm

WANG

commitment the applicable laws and

March 11 ents have

Permanent

Laichun regulations and the 2016 been

s

WANG articles of association of fulfilled

the Company and not to

Laisheng interfere with strictly

management and

operation of the Company

beyond my powers or

infringe on the interest of

the Company.

3. I WANG Laisheng as

the actual controller and

Vice Chairman of the

Company undertake to

perform my duties in

accordance with the

applicable laws and

regulations and the

articles of association of

the Company and not to

interfere with

management and

operation of the Company

beyond my powers or

infringe on the interest of

the Company.

88Luxshare Precision Industry Co. Ltd. Annual Report 2021

Each of the directors and

executives of the

Company hereby

commitments as follows:

(1) I will not transfer

benefits to any other

entity or individual

without compensation or

on unfair terms or

otherwise damage the

interest of the Company.

(2) I will exercise

BAI Rujing self-discipline in

CHEN consumption in

performing my duties.Chaofei (3) I will not use the

DONG assets of the Company to

Jianhai LI engage in any investment

or consumption activity

Bin LI Jing not in connection with my The

LI Xiongwei duties.LIN Yifei Other (4) I will procure the

commitm

March 11 ents have

WANG Ji commitment linkage between the Permanent

compensation system 2016 been

WANG s adopted by the Board of fulfilled

Laichun Directors or the

WANG Compensation and

strictly

Performance Appraisal

Laisheng XU Committee and the

Huaibin YE implementation of the

Yiling Company’s remedial

measures for diluted

ZHANG earnings.Lihua (5) If the Company

establishes any share

incentive plan in the

future I will procure the

linkage between the

vesting conditions in

respect of any share

incentives granted by the

Company and the

implementation of the

Company’s remedial

measures for diluted

earnings.Commitmen The commitments relating

to horizontal competition

ts relating to related-party transactions The

horizontal and occupation of funds

commitm

competition are as follows:

Luxshare October 15 ents have

related-party 1. We and all other entities Permanent

Limited controlled by us at present 2014 been

transactions or in the future will not fulfilled

and directly or indirectly

occupation engage in any business or

strictly

activity that competes or

of funds might compete or

89Luxshare Precision Industry Co. Ltd. Annual Report 2021

potentially compete with

the main business of the

Company.

2. If any amendment of

any applicable law or

change in any applicable

policy of the country

results in any actual or

potential horizontal

competition between us or

any other entity controlled

by us and the Company in

any business the

Company shall have the

preemptive right on the

same terms in respect of

any entrusted

management (or

management under

contract or lease) or

acquisition in connection

with such business.

3. So long as we remain

the controlling

shareholder of the

Company the

commitments set forth

above shall be

unconditional and

irrevocable. If we breach

any commitment set forth

above we will jointly and

severally fully timely and

adequately indemnify the

losses of the Company

arising therefrom.The commitments relating

to horizontal competition

related-party transactions

Commitmen and occupation of funds

ts relating to are as follows:

horizontal 1. We and other entities

The

controlled by us will commitm

competition

Luxshare reduce related-party October 15 ents have

related-party transactions with the Permanent

Limited

transactions Company to the maximum

2014 been

extent practicable. fulfilled

and 2. With respect to any strictly

occupation related-party transaction

of funds between us or any other

entity controlled by us and

the Company that is

unavoidable or exists

90Luxshare Precision Industry Co. Ltd. Annual Report 2021

reasonably we will carry

out such transaction on an

arm’s length basis and

customary commercial

terms ensure the fairness

of the transaction price

perform the relevant

decision-making process

according to law and

guarantee that the

legitimate rights and

interests of the Company

and its shareholders will

not be damaged as a result

of such transaction.

3. We or any other entity

controlled by us will not

request the Company to

offer any terms more

favorable than the terms

that may be offered by

any third party in an arm’s

length transaction or

accept any such terms

offered by the Company.

4. So long as we remain

the controlling

shareholder of the

Company the

commitments set forth

above shall be

unconditional and

irrevocable. If we breach

any commitment set forth

above we will jointly and

severally fully timely and

adequately indemnify the

losses of the Company

arising therefrom.The commitments relating

Commitmen to horizontal competition

ts relating to related-party transactions

The

horizontal and occupation of funds

WANG commitm

competition are as follows: I and other

Laichun July 30 ents have

related-party entities controlled by me Permanent

WANG 2010 been

transactions are not engaged in any

Laisheng fulfilled

and business that is the same

strictly

occupation as or similar to the

of funds business of the Issuer or

any entity controlled by

91Luxshare Precision Industry Co. Ltd. Annual Report 2021

the Issuer. So long as I

retain control over the

Issuer directly or

indirectly I will strictly

comply with the

applicable laws

regulations and codes of

the country and will not

directly or indirectly

engage in any business

that is the same as similar

to or substantially in

competition with the

business of the Issuer or

any entity controlled by

the Issuer or have

substantial or relative

control over any other

company organization or

economic entity engaging

in any business that is the

same as similar to or

substantially in

competition with the

business of the Issuer or

any entity controlled by

the Issuer in or outside

China. I will use my

control over the other

entities controlled by me

to cause such entities to

fulfill the commitments

set forth above in the

same manner. If I breach

any commitment set forth

above I agree to assume

the relevant legal

liabilities including

without limitation to

indemnify the Issuer and

its minority shareholders

for all losses arising

therefrom.Luxshare Commitmen The commitments relating July 30 Permanent The

92Luxshare Precision Industry Co. Ltd. Annual Report 2021

Limited ts relating to to horizontal competition 2010 commitm

Shenzhen horizontal related-party transactions ents have

Zixin competition and occupation of funds been

Investment related-party are as follows: We are not fulfilled

Co. Ltd. transactions engaged in any business strictly

and that is the same as or

occupation similar to the business of

of funds the Issuer or any entity

controlled by the Issuer.So long as we retain

control over the Issuer

directly or indirectly we

will strictly comply with

the applicable laws

regulations and codes of

the country and will not

directly or indirectly

engage in any business

that is the same as similar

to or substantially in

competition with the

business of the Issuer or

any entity controlled by

the Issuer or have

substantial or relative

control over any other

company organization or

economic entity engaging

in any business that is the

same as similar to or

substantially in

competition with the

business of the Issuer or

any entity controlled by

the Issuer in or outside

China. We will use our

control over the other

entities controlled by us to

cause such entities to

fulfill the commitments

set forth above in the

same manner. If we

breach any commitment

set forth above we agree

93Luxshare Precision Industry Co. Ltd. Annual Report 2021

to assume the relevant

legal liabilities including

without limitation to

indemnify the Issuer and

its minority shareholders

for all losses arising

therefrom.The commitments relating

to horizontal competition

related-party transactions

and occupation of funds

are as follows: We/I will

not take advantage of

our/my position as the

controlling shareholder

actual controller or

shareholder (as

applicable) and our/my

affiliation with the Issuer

to engage in any act to the

detriment of the interest of

Luxshare

Commitmen the Issuer or its other

Limited

ts relating to shareholders. With respect

Shenzhen The

horizontal to any related-party

Zixin commitm

competition transaction between us/me

Investment July 30, ents have

related-party or any other entity Permanent

Co. Ltd. 2010 been

transactions controlled by us/me and

WANG fulfilled

and the Issuer we/I will carry

Laichun strictly

occupation out such transaction on an

WANG

of funds arm’s length basis and

Laisheng

customary commercial

terms and will not request

the Issuer to offer any

terms more favorable than

the terms that may be

offered by any third party

in an arm’s length

transaction or accept any

such terms offered by the

Issuer. We/I will strictly

perform all related-party

transaction agreements (if

any) entered into with the

Issuer in good faith and

94Luxshare Precision Industry Co. Ltd. Annual Report 2021

will not seek any interest

or benefit in contravention

of the commitments set

forth above. If we/I breach

any commitment set forth

above we/I agree to

indemnify the Issuer and

its minority shareholders

for all losses arising

therefrom.Luxshare Limited as the

controlling shareholder of

The

the Company hereby

commitm

Other undertakes not to sell any

Luxshare February 3 February ents have

commitment share of the Company

Limited 2021 2 2022 been

s through the stock trading

fulfilled

system within 12 months

strictly

after the completion of

this disposal.After the completion of

the transactions

contemplated by the

announcement on external

Commitmen investment and

ts relating to related-party transactions

The

horizontal disclosed by the Company

Commitments relating to share commitm

competition on November 13 2020

incentives Luxshare November ents have

related-party we and our affiliates will Permanent

Limited 13 2020 been

transactions not engage in any

fulfilled

and business that is the same

strictly

occupation as or substantially in

of funds competition with the

business of the Company

or any entity controlled by

the Company in any

manner.Luxshare Limited as the

controlling shareholder of

Other the Company hereby

Luxshare July 22 February

commitment undertakes not to sell any Fulfilled

Limited 2020 2 2022

s share of the Company

through the stock trading

system within 6 months

95Luxshare Precision Industry Co. Ltd. Annual Report 2021

after the completion of

this disposal.Commitments made to the minority

shareholders of the Company

Whether the commitments have been

Yes

fulfilled on time?

If any commitment fails to be fulfilled

on time please state the specific N/A

reason and the relevant action plan

2. If the Company has made any profit forecast on its assets or project and the reporting period falls within

the period of such profit forecast explanation about whether the goal has been achieved and the relevant

reasons

□ Applicable √ N/A

II. Occupation of funds of the listed company by the controlling shareholder and other related

parties for non-operating purposes

□ Applicable √ N/A

During the reporting period no controlling shareholder or its related party used capital of the listed company for non-operating

purposes.III. Illegal provision of guarantees for external parties

□ Applicable √ N/A

We have not provided any external guarantee in contravention of the applicable regulations during the reporting period.IV. Explanation made by the Board of Directors about the modified audit opinion for the

latest period

□ Applicable √ N/A

V. Explanation by the Board of Directors the Board of Supervisors and the independent

directors (if any) about the modified auditor’s report issued by the accounting firm for the

reporting period

□ Applicable √ N/A

VI. Explanation about changes in accounting policies and accounting estimates or correction

of significant accounting errors when compared to the previous financial year

□ Applicable √ N/A

96Luxshare Precision Industry Co. Ltd. Annual Report 2021

The Company has no changes in accounting policies and accounting estimates or correction of significant accounting errors during

the reporting period.VII. Explanation about changes in consolidation scope when compared to the previous

financial year

√ Applicable □ N/A

The consolidation scope for this period adds by new establishment Luxis Technology Limited Luxshare Precision Industry

(Yancheng) Co. Ltd. Hangzhou Xuntao Technology Co. Ltd. Rugao Lixun Enterprise Management Service Partnership (Limited

Partnership) Lianxun Intelligent Equipment (Rugao) Co. Ltd. Luxshare Precision Technology (Xi’an) Co. Ltd. Luxshare

Electronic Technology (Enshi) Co. Ltd. Lixin Technology (Kunshan) Co. Ltd. Luxshare Precision Investment Co. LTd.Yancheng Lixun Enterprise Management Service Partnership (Limited Partnership) Lixun Intelligent Equipment (Yancheng) Co.Ltd. Luxis Precision Intelligent Manufacturing (Kunshan) Co. Ltd. Lixun Intelligent Electronic Service (Kunshan) Co. Ltd. Liding

Electronic Technology (Dongguan) Co. Ltd. Luxshare Precision Technology (Nanjing) Co. Ltd. Henan Lide Precision Industry

Co. Ltd. and Changzhi Lixun Precision Industry Co. Ltd.; the consolidation scope adds by cash acquisition Rikai Precision

Technology (Yancheng) Co. Ltd. Zhejiang Puxing Electronic Technology Co. Ltd.; the consolidation scope addes by agreement

control Caldigit Holding (Cayman) and Tainhan Precision Co. Ltd.; the shares held in Wuxi Huihong Electronics Co. Ltd. are

transferred during this period so it is not included in the consolidation scope; Ji’an City Jihzou District Lixun Electronics Co. Ltd.Speedtech (LS-ICT) Co. Limited Lixun International Cable Co. Ltd. and Luxshare-ICT International B.V. are cancelled by

liquidation so they are not included in the consolidation scope.VIII. Appointment and dismissal of accounting firms

Accounting firm currently engaged:

Name of domestic accounting firm BDO China Shu Lun Pan Certified Public Accountants LLP

Remuneration of domestic accounting firm (in RMB0’000) 230

Consecutive years in which the domestic accounting firm has

14

provided auditing service

Certified public accountant of the domestic accounting firm LI Jing WEI Gang

Consecutive years in which the certified public accountant of the

5

domestic accounting firm has provided auditing service

Name of foreign accounting firm (if any) None

Remuneration of foreign accounting firm (in RMB0’000) (if any) 0

Consecutive years in which the foreign accounting firm has

None

provided auditing service (if any)

Certified public accountant of the foreign accounting firm (if

None

any)

Consecutive years in which the certified public accountant of the None

97Luxshare Precision Industry Co. Ltd. Annual Report 2021

foreign accounting firm has provided auditing service (if any)

Whether a new accounting firm was engaged during the reporting period?

□ Yes √ No

Engagement of accounting firm for auditing internal controls financial advisor or sponsor:

□ Applicable √ N/A

IX. Possibility of listing suspension and termination after disclosure of the annual report

□ Applicable √ N/A

X. Matters relating to bankruptcy and reorganization

□ Applicable √ N/A

We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.XI. Material litigation and arbitration proceedings

√ Applicable □ N/A

Amount Whether a Enforcement of Information

Date of

Background claimed provision is Status Result and effect judgment/ disclosure

disclosure

(RMB0’000) recognized award available at

The case has been

settled/ closed by

Other litigation Closed by

mediation or won

during the reporting 89.57 No Closed mediation or N/A

and does not have

period enforced

a material effect

on us.The case is

Other litigation pending and will

during the reporting 47706.74 No Pending not have a Pending N/A

period material effect on

us.XII. Penalty and rectification

□ Applicable √ N/A

We have not been subject to any punishment or required to make any rectification during the reporting period.

98Luxshare Precision Industry Co. Ltd. Annual Report 2021

XIII. Integrity of the Company its controlling shareholder and actual controller

√ Applicable □ N/A

There wasn’t any outstanding court judgment or overdue debt of a large amount involving us or our controlling shareholder or actual

controllers during the reporting period.XIV. Material related-party transactions

1. Related-party transactions relating to day-to-day operation

√ Applicable □ N/A

Approv

% of the Market

ed limit

total Whethe price

of

Related- Amount amount r or not Method availabl

Pricing Transact transacti Date of Information

Counterp Relation party (in of the exceed of e for the

Type principl ion on disclosu disclosure

arty ship transacti RMB0’ same the settleme same

e price amount re available at

ons 000) type of approve nt type of

(in

transacti d limit transacti

RMB0’

ons ons

000)

Announcement

Purchas on Expected

e of Daily Related

Related Purchasi Market- Fair Fair April

BCS goods Bank Party

legal ng set market 370.89 0.00% 200 Yes market 21

Suzhou from transfer Transactions for

person goods prices price price 2021

related 2021

party (Announcement

No.: 2021-039)

Announcement

on Expected

Sales of Daily Related

Related Market- Fair Fair April

BCS goods to Sales of 21871. Bank Party

legal set market 0.14% 27500 No market 21

Suzhou related goods 71 transfer Transactions for

person prices price price 2021

persons 2021

(Announcement

No.: 2021-039)

Announcement

on Expected

Sales of

Related Market- Fair Fair Added Daily

Luxsan goods to Sales of 41714. Bank October

legal set market 0.27% 50000 No market Related Party

Kunshan related goods 73 transfer 8 2021

person prices price price Transactions for

persons

2021

(Announcement

99Luxshare Precision Industry Co. Ltd. Annual Report 2021

No.: 2021-081)

63957.

Total -- -- -- 77700 -- -- -- -- --

33

Particulars of huge-amount sales

N/A

returns

If the total amount of daily When expecting the annual daily related party transactions the Company conducts the appraisal and

related-party transactions that are calculation of possible related party transactions according to the market situation but the actually

expected to occur during the reporting accrued amount is determined based on market situation the two parties’ business development

period is estimated by type the actual actual demands and specific implementation progress resulting in certain differences between

transactions occurred during the actually accrued amount and expected amount. The foregoing belongs to the acts of normal business

reporting period (if any) and will not have a significant impact on daily operation and performance of the Company.Reason of any great difference

between transaction price and N/A

reference market price (if applicable)

2 Related-party transactions involving acquisition or sales of assets or equities

□ Applicable √ N/A

We have not conducted any related-party transaction involving acquisition or sales of assets or equities during the reporting period.

3. Related-party transactions involving joint external investment

□ Applicable √ N/A

The Company had no related-party transactions on joint investments during the reporting period.

4. Accounts receivable from and payable to related parties

□ Applicable √ N/A

We did not have any accounts receivable from or payable to any related party during the reporting period.

5. Financial business with its related financial companies

□ Applicable √ N/A

There are no deposits loans credits or other financial transactions between the Company its related financial companies and related

parties.

6. Financial business between the financial companies controlled by the Company and related parties

□ Applicable √ N/A

There are no deposits loans credits or other financial transactions between the financial companies controlled by the Company and

related parties.

100Luxshare Precision Industry Co. Ltd. Annual Report 2021

7. Other significant related-party transactions

□ Applicable √ N/A

We have not conducted any other material related-party transaction during the reporting period.XV. Significant contracts and performance thereof

1. Trusteeship contracting and leases

(1) Trusteeship

□ Applicable √ N/A

No such case during the reporting period.

(2) Contracting

□ Applicable √ N/A

No such case during the reporting period.

(3) Leases

□ Applicable √ N/A

No such case during the reporting period.

2. Material guarantees

√ Applicable □ N/A

In RMB0’000

External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries)

Disclosure

Whether

date of

Counter or not

announcem Maximum Effective Actual Whether

Type of Collateral guarant Term of provided

Obligor ent on the amount date of amount or not

guarantee (if any) ee (if guarantee for a

maximum guaranteed guarantee guaranteed expired

any) related

amount

party

guaranteed

Guarantees provided by the Company for its subsidiaries

Disclosure Whether

date of Counter or not

Maximum Effective Actual Whether

announcem Type of Collateral guarant Term of provided

Obligor amount date of amount or not

ent on the guarantee (if any) ee (if guarantee for a

guaranteed guarantee guaranteed expired

maximum any) related

amount party

101Luxshare Precision Industry Co. Ltd. Annual Report 2021

guaranteed

LUXSHAR

Joint and

E April 20 Five

510056 July 20 2020 several No Yes

PRECISIO 2020 years

guarantee

N

LUXSHAR

Joint and

E April 20 June 29

9563.55 several A year No Yes

PRECISIO 2021 2021

guarantee

N

ICT-LANT

O/LUXSH Joint and

April 20

ARE 277342.95 several A year No Yes

2021

PRECISIO guarantee

N

LUXSHAR

Joint and

E April 20 July 28 Five

63119.43 several No Yes

PRECISIO 2021 2021 years

guarantee

N

Total amount of Total amount of

guarantee approved to guarantee actually

be provided for 350025.93 provided for subsidiaries

subsidiaries during the during the reporting

reporting period (B1) period (B2)

Total amount of

Total amount of

guarantee approved to

guarantee actually

be provided for

860081.93 provided for subsidiaries

subsidiaries as at the end

as at the end of the

of the reporting period

reporting period (B4)

(B3)

Guarantees provided by subsidiaries for each other

Disclosure

Whether

date of

Counter or not

announcem Maximum Effective Actual Whether

Type of Collateral guarant Term of provided

Obligor ent on the amount date of amount or not

guarantee (if any) ee (if guarantee for a

maximum guaranteed guarantee guaranteed expired

any) related

amount

party

guaranteed

Total amount of guarantee provided by the Company

Total amount of guarantee Total amount of

approved during the reporting 350025.93 guarantee actually

period (A1+B1+C1) provided during the

102Luxshare Precision Industry Co. Ltd. Annual Report 2021

reporting period

(A2+B2+C2)

Total amount of

Total amount of guarantee guarantee actually

approved as at the end of the 860081.93 provided as at the end of

reporting period (A3+B3+C3) the reporting period

(A4+B4+C4)

Ratio of total amount of guarantee actually

provided (A4+B4+C4) to the net assets of the 0.00%

Company

Including:

Outstanding guarantees provided for shareholders

0

actual controller and their affiliates (D)

Explanation about warranty liability already

incurred or possible several and joint liquidation

None

liability shown by evidence during the reporting

period for the undue guarantees (if any)

Explanation about external guarantees provided in

contravention of the established procedures (if None

any)

Particulars of the guarantees provided using complex method:

N/A

3. Entrusted management of cash assets

(1)Entrusted wealth management

√ Applicable □ N/A

Entrusted wealth management during the reporting period:

In RMB0’000

Impairment amount

made for overdue

Type Source of funds Total amount Outstanding amount Overdue amount uncollected wealth

management

products

Bank wealth

Self-owned funds 272472.82 199119.95 0 0

management amount

Total 272472.82 199119.95 0 0

Details of entrusted wealth management with individually significant amount or low safety poor liquidity high risk

□ Applicable √ N/A

Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:

103Luxshare Precision Industry Co. Ltd. Annual Report 2021

□ Applicable √ N/A

(2)Entrusted loans

√ Applicable □ N/A

Entrusted loans during the reporting period:

In RMB0’000

Total amount Source of funds Outstanding amount Overdue amount

863350 Self-owned funds 863350 0

Details of entrusted loans with individually significant amount or low safety poor liquidity high risk

□ Applicable √ N/A

Entrusted loans the principal of which may be unrecoverable or which may otherwise be impaired:

□ Applicable √ N/A

4. Other significant contracts

□ Applicable √ N/A

We have not entered into any other material contract during the reporting period.XVI. Other significant matters

□ Applicable √ N/A

The Company has no other significant matters to be explained during the reporting period.XVII. Significant events of subsidiaries of the Company

□ Applicable √ N/A

104Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section VII Changes in shares and shareholders

I. Changes in shares

1. Changes in shares

Unit: Share

Before the change +- After the change

Shares

New converted Proportio Stock Proportio

Number shares from Other Subtotal Number

n dividend n

issued capital

reserve

1100792-485527-485527

I. Non-tradable shares 0.16% 6152646 0.09%

155

1. Shares held by the State

2. Shares held by

State-owned corporations

3. Shares held by other -275578 -275578

28518080.04%960220.00%

domestic investors 6 6

Incl.: Shares held by

domestic non-State-owned

corporations

Shares held by domestic -275578 -275578

28518080.04%960220.00%

natural persons 6 6

4. Shares held by foreign -209948 -209948

81561130.12%60566240.09%

investors 9 9

Incl.: Shares held by foreign

corporations

Shares held by foreign natural -209948 -209948

81561130.12%60566240.09%

persons 9 9

7006825583442458344247065170

II. Tradable shares 99.84% 99.91%

87088118

1. RMB-denominated 7006825 5834424 5834424 7065170

99.84%99.91%

ordinary shares 870 8 8 118

2. Foreign

currency-denominated shares

listed domestically

105Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Foreign

currency-denominated shares

listed overseas

4. Others

7017833534889753488977071322

III. Total shares 100% 100%

79133764

Reasons of changes in shares:

√ Applicable □ N/A

1. On June 22 2020 the Company held the 19th meeting of the fourth Board of Directors and the 19th meeting of the fourth

Board of Supervisors at which the Proposal on Satisfaction of Vesting Conditions for the First Vesting Period Initially Granted

under 2019 Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise

options in the first vesting period at their sole discretion and the actual exercisable period is from July 7 2020 to April 21 2021.Refer to the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting Period of the 2019

Stock Option Incentive Plan (Announcement No.2020-049) for details. During the reporting period the grantees exercised 1291186

shares in total in the first vesting period initially vested under 2019 stock option incentive plan.

2. On December 2 2020 the Company held the 17th meeting of the fourth Board of Directors and the 27th meeting of the fourth

Board of Supervisors at which the Proposal on Satisfaction of Vesting Conditions for the Second Vesting Period under 2018 Stock

Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the second

vesting period at their sole discretion and the actual exercisable period is from December 22 2020 to September 24 2021. Refer to

the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the 2018 Stock

Option Incentive Plan (Announcement No.2020-108) for details. During the reporting period the grantees exercised 13854690

shares in total in the second vesting period under 2018 stock option incentive plan.

3. On January 22 2021 the Company held the 29th meeting of the fourth Board of Directors and the 29th meeting of the fourth

Board of Supervisors at which the Proposal on Satisfaction of Vesting Conditions for the First Vesting Period Reserved under 2019

Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the

first vesting period at their sole discretion and the actual exercisable period is from February 8 2021 to November 26 2021. For

details please see the Suggestive Announcement on Exercise at Their Sole Discretion in the First Vesting Period Reserved under

2019 Stock Option Incentive Plan (Announcement No. 2021-021). During the reporting period the grantees exercised 4109496

shares in total in the first vesting period reserved under 2019 stock option incentive plan.

4. On July 2 2021 the Company held the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of

Supervisors at which the Proposal on Satisfaction of Vesting Conditions for the Second Vesting Period Initially Granted under 2019

Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the

second vesting period at their sole discretion and the actual exercisable period is from July 15 2021 to April 21 2022. For details

please see the Suggestive Announcement on Exercise at Their Sole Discretion in the Second Vesting Period Initially Granted under

2019 Stock Option Incentive Plan (Announcement No. 2021-069). During the reporting period the grantees exercised 14627322

shares in total in the second vesting period initially vested under 2019 stock option incentive plan.

5. On December 3 2021 the Company held the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board

of Supervisors at which the Proposal on Satisfaction of Vesting Conditions for the Third Vesting Period under 2018 Stock Option

Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the third vesting

period at their sole discretion and the actual exercisable period is from December 10 2021 to September 23 2022. For details please

see the Suggestive Announcement on Exercise at Their Sole Discretion in the Third Vesting Period under 2018 Stock Option

Incentive Plan (Announcement No. 2021-102). During the reporting period the grantees exercised 19597470 shares in total in the

third vesting period under 2018 stock option incentive plan.

106Luxshare Precision Industry Co. Ltd. Annual Report 2021

6. The Company publicly offered 30000000 convertible corporate bonds (abbreviation: Luxshare Convertible Bonds; bond

code: 128136) on November 3 2020 and the period for which the convertible corporate bonds can be converted into shares is from

May 10 2021 to November 2 2026. During the reporting period the number of shares converted into by bonds was 8809.Approval of changes in shares:

√ Applicable □ N/A

1. Review and approve by the 19th meeting of the fourth Board of Directors and the 19th meeting of the fourth Board of

Supervisors of the Company;

2. Review and approve by the 27th meeting of the fourth Board of Directors and the 27th meeting of the fourth Board of

Supervisors of the Company;

3. Review and approve by the 29th meeting of the fourth Board of Directors and the 29th meeting of the fourth Board of

Supervisors of the Company;

4. Review and approve by the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of Supervisors of

the Company;

5. Review and approve by the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board of Supervisors of

the Company.Transfer of share ownership:

√ Applicable □ N/A

1. Period in which the stock options vested in the first vesting period initially granted under the 2019 stock option incentive plan

may be exercised by the relevant grantees at their sole discretion: from July 7 2020 to April 21 2021;

2. Period in which the stock options vested in the second vesting period under the 2019 stock option incentive plan may be

exercised by the relevant grantees at their sole discretion: from December 22 2020 to September 24 2021;

3. Period in which the stock options vested in the first vesting period reserved under the 2019 stock option incentive plan may

be exercised by the relevant grantees at their sole discretion: from February 8 2021 to November 26 2021;

4. Period in which the stock options vested in the second vesting period initially granted under the 2019 stock option incentive

plan may be exercised by the relevant grantees at their sole discretion: From July 15 2021 to April 21 2022;

5. Period in which the stock options vested in the third vesting period under the 2018 stock option incentive plan may be

exercised by the relevant grantees at their sole discretion: from December 10 2021 to September 23 2022.Effect of changes in shares on the basic earnings per share diluted earnings per share net assets per share attributable to ordinary

shareholders and other financial indicators of the Company in the preceding year and the most recent reporting period:

□ Applicable √ N/A

Other information disclosed as the Company deems necessary or required by the securities regulatory authorities:

□ Applicable √ N/A

2、Changes in non-tradable shares

√ Applicable □ N/A

Unit: Share

Number of Number of Balance of

Balance of

non-tradable non-tradable non-tradable

non-tradable Reason for

Shareholder shares shares increased shares as at Unlock date

shares as at restriction

unlocked in in the reporting December 31

January 1 2020

the reporting period 2020

107Luxshare Precision Industry Co. Ltd. Annual Report 2021

period

November 25 2021 (the

Lock-up shares

day next to the sixth month

XUE Haigao 912578 0 912578 0 for senior

following expiry of the

officers

original term of office)

November 25 2021 (the

Lock-up shares

day next to the sixth month

LI Bin 1571664 0 1571664 0 for senior

following expiry of the

officers

original term of office)

November 25 2021 (the

Lock-up shares

day next to the sixth month

XIONG Tengfang 367566 0 367566 0 for senior

following expiry of the

officers

original term of office)

November 25 2021 (the

Lock-up shares

day next to the sixth month

YE Yiling 582529 0 582529 0 for senior

following expiry of the

officers

original term of office)

The restricted conditions

Lock-up shares are released according to

WU Tiansong 273775 225607 0 499382 for senior the requirements on the

officers lock-up shares for senior

officers

The restricted conditions

Lock-up shares are released according to

WANG Laisheng 6970267 0 1742567 5227700 for senior the requirements on the

officers lock-up shares for senior

officers

The restricted conditions

Lock-up shares are released according to

HUANG Dawei 329542 0 0 329542 for senior the requirements on the

officers lock-up shares for senior

officers

The restricted conditions

Lock-up shares are released according to

WANG Tao 0 96022 0 96022 for senior the requirements on the

officers lock-up shares for senior

officers

Total 11007921 321629 5176904 6152646 -- --

108Luxshare Precision Industry Co. Ltd. Annual Report 2021

II. Offering and listing of securities

1. Offering of securities (other than preferred shares) during the reporting period

□ Applicable √ N/A

2. Changes in total number of shares shareholding structure and structure of assets and liabilities of the

Company

√ Applicable □ N/A

1. Upon review and approval by the 19th meeting of the fourth Board of Directors the 27th meeting of the fourth Board of

Directors the 29th meeting of the fourth Board of Directors the 6th meeting of the fifth Board of Directors and the 2nd meeting of the

fifth Board of Directors of the Company the vesting conditions for the first vesting period initially granted under 2019 stock option

incentive plan the second vesting period under 2018 stock option incentive plan the first vesting period reserved under 2019 stock

option incentive plan the second vesting period initially granted under 2019 stock option incentive plan and the third vesting period

under 2018 stock option incentive plan were satisfied and the Company agreed that the relevant stock option grantees of the

Company exercise options at their sole discretion and a total of additional 53480164 shares were issued to the grantees exercising

options at their sole discretion during the reporting period.

2. The Company publicly offered 30000000 convertible corporate bonds (abbreviation: Luxshare Convertible Bonds; bond

code: 128136) on November 3 2020 and the period for which the convertible corporate bonds can be converted into shares is from

May 10 2021 to November 2 2026. During the reporting period the number of shares converted into by bonds was 8809.

3. Outstanding employee shares

□ Applicable √ N/A

III. Shareholders and actual controllers

1. Number of shareholders and shareholding structure of the Company

Unit: Share

Total number of

preferred

Total number of Total number of

shareholders

ordinary preferred

Total number whose voting

shareholders at shareholders

of ordinary rights had been

the end of the whose voting

shareholders at restituted at the

258745 month 326906 rights had been 0 0

the end of the end of the month

immediately restituted at the

reporting immediately

preceding the end of the

period preceding the

date of this reporting period (if

date of this

annual report any) (Note 8)

annual report (if

any) (Note 8)

Shareholding of ordinary shareholders holding more than 5% of the shares or top 10 ordinary shareholders

109Luxshare Precision Industry Co. Ltd. Annual Report 2021

Changes Pledge mark or freeze

No. of

in No. of

ordinary Changes in

sharehold non-tradab

shares held shareholdin

Status of Sharehold ing le

Shareholder at the end g during the

shareholder ing ratio during ordinary

of the reporting Status of shares Quantity

the shares

reporting period

reporting held

period

period

Foreign 2731537 -1387084 2731537

Luxshare Limited 38.63% 0 Pledge 525407503

corporation 636 33 636

Hong Kong

Foreign 5938357 10828288 5938357

Securities Clearing 8.40% 0

corporation 64 4 64

Company Limited

China Securities

Domestic

Finance 8442888 8442888

non-stated owned 1.19% 0

Corporation 8 8

corporation

Limited

Central Huijin

Stated owned 5804101 -3854300 5804101

Asset Management 0.82% 0

corporation 2 2 2

Co. Ltd.China Merchants

Bank Co. Ltd. -

Domestic

Ruiyuan Growth 5329829 5329829

non-stated owned 0.75% 0

Value Hybrid 9 9

corporation

Securities

Investment Fund

Pegatron Domestic

39845103984510

Technology non-stated owned 0.56% 0

55

(Shanghai) Co Ltd corporation

E Fund -

Agricultural Bank

Domestic

of China - E Fund 3865634 3865634

non-stated owned 0.55% 0

Zhongzheng 3 3

corporation

Financial Asset

Management Plan

Industrial and

Commercial Bank

of China Limited – Domestic

38631783863178

Zhong Ou Times non-stated owned 0.55% 0

88

Pioneer Stock corporation

Sponsored

Securities

110Luxshare Precision Industry Co. Ltd. Annual Report 2021

Investment Fund

China AMC-

Agricultural Bank

Domestic

of China - China 3857683 3857683

non-stated owned 0.55% 0

AMC Zhongzheng 1 1

corporation

Financial Asset

Management Plan

Zhong Ou Fund -

Agricultural Bank

Domestic

of China - Zhong 3855718 3855718

non-stated owned 0.55% 0

Ou Zhongzheng 4 4

corporation

Financial Asset

Management Plan

Strategic investors or general

corporations becoming top 10 ordinary

N/A

shareholders as a result of rights issues

(if any) (Note 3)

1. Luxshare Limited is the controlling shareholder of the Company;

Affiliates or concert parties among the 2. The Company is not aware of whether there are associates or persons acting in concert as

shareholders listed above defined in the Administrative Measures for the Information Disclosure of Shareholding

Changes of Shareholders of Listed Companies.Delegation or waiver of voting rights

or ownership of voting rights as a

N/A

proxy in respect of the shareholders

listed above

Shares held by top 10 holders of tradable shares

Number of tradable shares held at the end of the Type

Shareholder

reporting period Type Quantity

RMB-denominat

Luxshare Limited 2731537636 2731537636

ed ordinary share

Hong Kong Securities Clearing RMB-denominat

593835764593835764

Company Limited ed ordinary share

China Securities Finance Corporation RMB-denominat

8442888884428888

Limited ed ordinary share

Central Huijin Asset Management Co. RMB-denominat

5804101258041012

Ltd. ed ordinary share

China Merchants Bank Co. Ltd. -

RMB-denominat

Ruiyuan Growth Value Hybrid 53298299 53298299

ed ordinary share

Securities Investment Fund

Pegatron Technology (Shanghai) Co 39845105 RMB-denominat 39845105

111Luxshare Precision Industry Co. Ltd. Annual Report 2021

Ltd ed ordinary share

E Fund - Agricultural Bank of China -

RMB-denominat

E Fund Zhongzheng Financial Asset 38656343 38656343

ed ordinary share

Management Plan

Industrial and Commercial Bank of

China Limited – Zhong Ou Times RMB-denominat

3863178838631788

Pioneer Stock Sponsored Securities ed ordinary share

Investment Fund

China AMC- Agricultural Bank of

RMB-denominat

China - China AMC Zhongzheng 38576831 38576831

ed ordinary share

Financial Asset Management Plan

Zhong Ou Fund - Agricultural Bank of

RMB-denominat

China - Zhong Ou Zhongzheng 38557184 38557184

ed ordinary share

Financial Asset Management Plan

Affiliates or concert parties among top

10 holders of tradable ordinary shares

and among top 10 holders of tradable N/A

ordinary shares and top 10 ordinary

shareholders

Engagement by top 10 ordinary

shareholders in margin trading (if any) N/A

(Note 4)

Did any top 10 ordinary shareholder or top 10 holder of tradable ordinary shares conduct any transaction under repurchase agreement

during the reporting period?

□ Yes √ No

No top 10 ordinary shareholder or top 10 holder of tradable ordinary shares has conducted any transaction under repurchase

agreement during the reporting period

2. Controlling shareholder of the Company

Nature of controlling shareholder: Controlled by foreign investor

Type of controlling shareholder: Corporation

Name of controlling Legal representative/ Change in organization

Date of establishment Main business

shareholder principal code

Investment and share

Luxshare Limited WANG Laichun August 27 1999

holding

Shares held by the controlling

shareholder in other

companies listed on domestic None

or foreign stock exchanges

during the reporting period

112Luxshare Precision Industry Co. Ltd. Annual Report 2021

Change in the controlling shareholder during the reporting period:

□ Applicable √ N/A

Our controlling shareholder has remained unchanged during the reporting period.

3. Actual controllers of the Company and their concerted parties

Nature of actual controllers: Natural person

Type of actual controllers: Natural person

Relationship with the Whether or not hold a residence permit in any

Name of actual controller Nationality

actual controller other country or region

WANG Laichun Himself Hong Kong No

WANG Laisheng Himself Hong Kong No

Ms. WANG Laichun Chairman and General Manager of our Company former director of

Shenzhen High-tech Industry Association and Vice Chairman of Shenzhen Electronics

Industry Association purchased shares of Luxshare Limited jointly with Mr. WANG

Laisheng in 1999 and founded and served as Chairman of Luxshare Precision Industry

(Shenzhen) Co. Ltd. in 2004 through Luxshare HK.Main occupations and titles

Mr. WANG Laisheng serves as the vice chairman of the Company and previously worked as

the managing director of Shenzhen Quality Association and the director of Guangdong

Laboratories Federation. Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the

shares of Luxshare Limited in 1999 and in 2004 Mr. WANG Laisheng and Ms. WANG

Laisheng jointly founded Luxshare Precision Industry (Shenzhen) Co. Ltd..Whether or not control any other

company listed on a domestic or

None

foreign stock exchange in the past

ten years

Change in the actual controllers during the reporting period:

□ Applicable √ N/A

Our actual controllers have remained unchanged during the reporting period.Diagram of ownership and control relationship between the Company and its actual controllers:

WANG WANG

Laichun Laisheng

Luxshare Limited

Luxshare-ICT

113Luxshare Precision Industry Co. Ltd. Annual Report 2021

Whether the actual controllers control the Company through any trust or other ways of asset management?

□ Applicable √ N/A

4. The Company’s controlling shareholder or top 1 shareholder and its persons acting in concert pledged

account for 80% in total of the Company’s shares held by them

□ Applicable √ N/A

5. Other institutional shareholders owning over 10% of shares

□ Applicable √ N/A

6. Restrictions on shareholding reduction of the controlling shareholder actual controller restructuring

parties and other commitment subjects

□ Applicable √ N/A

IV. Specific implementation of share repurchases during the reporting period

Progress of share repurchase:

□ Applicable √ N/A

Progress of sales of repurchased shares through call auction:

□ Applicable √ N/A

114Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section VIII Preference Shares

□ Applicable √ N/A

We did not have any preferred share during the reporting period.

115Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section IX Bonds

√ Applicable □ N/A

I. Enterprise bonds

□ Applicable √ N/A

The Company had no enterprise bonds during the reporting period.II. Corporate bonds

□ Applicable √ N/A

The Company had no corporate bonds during the reporting period.III. Non-financial corporate debt financing instruments

√ Applicable □ N/A

1. Basic information of non-financial corporate debt financing instruments

In RMB

Principal

Bond Maturity Bond and interest Trading

Bond name Bond code Issue date Start date Interest rate

abbreviation date balance payment venue

method

Phase I

ultra-short-t

erm

A lump sum

financing

21 payment of Interbank

bonds in January 13 January 15 October 12 800000000

Luxshare-I 012100153 3.30% principal bond

2021 of 2021 2021 2021 .00

CT SCP001 and interest market

Luxshare

at maturity

Precision

Industry

Co. Ltd.Phase II

A lump sum

ultra-short-t

21 payment of Interbank

erm August 18 August 20 November 900000000

Luxshare-I 012103051 2.45% principal bond

financing 2021 2021 18 2021 .00

CT SCP002 and interest market

bonds in

at maturity

2021 of

116Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare

Precision

Industry

Co. Ltd.Phase III

ultra-short-t

erm

A lump sum

financing

21 payment of Interbank

bonds in August 24 August 25 November 500000000

Luxshare-I 012103127 2.45% principal bond

2021 of 2021 2021 23 2021 .00

CT SCP003 and interest market

Luxshare

at maturity

Precision

Industry

Co. Ltd.Phase IV

ultra-short-t

erm

A lump sum

financing

21 payment of Interbank

bonds in October 20 October 22 July 19 800000000

Luxshare-I 012103825 3.00% principal bond

2021 of 2021 2021 2022 .00

CT SCP004 and interest market

Luxshare

at maturity

Precision

Industry

Co. Ltd.Phase V

ultra-short-t

erm

A lump sum

financing

21 payment of Interbank

bonds in November November February 400000000

Luxshare-I 012105034 2.53% principal bond

2021 of 16 2021 11 2021 15 2022 .00

CT SCP005 and interest market

Luxshare

at maturity

Precision

Industry

Co. Ltd.Phase VI

ultra-short-t

erm A lump sum

financing 21 payment of Interbank

November November February 400000000

bonds in Luxshare-I 012105157 2.53% principal bond

242021252021232022.00

2021 of CT SCP006 and interest market

Luxshare at maturity

Precision

Industry

117Luxshare Precision Industry Co. Ltd. Annual Report 2021

Co. Ltd.Investors’ appropriate arrangements (if Institutional investors on the national interbank bond market (except for purchasers

any) prohibited by laws and regulations of China)

Applicable trading mechanism Public trading

Whether there is the risk of

termination of listing (if any) and No

countermeasures

Bonds overdue but not yet repaid

□ Applicable √ N/A

2. Trigger and implementation of the issuer or investor option provisions or investor protection provisions

□ Applicable √ N/A

3. Intermediaries

Name of bond Name of Name of accountants Contact person of

Office address Phone

project intermediary signing this report Intermediary

Phase I

ultra-short-term China Merchants

financing bonds in China Merchants Bank Building No.None MIAO Jianmin 0755-88026159

2021 of Luxshare Bank Co. Ltd. 7088 Houhai

Precision Industry Avenue Shenzhen

Co. Ltd.Phase I

ultra-short-term

Shanghai Pudong No. 12 Zhongshan

financing bonds in

Development Bank Dongyi Road None ZHENG Yang 021-61616388

2021 of Luxshare

Co. Ltd. Shanghai

Precision Industry

Co. Ltd.

3401 Office

Phase I

Building of

ultra-short-term

Beijing Tian Yuan Shenzhen Stock

financing bonds in

(Shenzhen) Law Exchange Square None TAN Qing 0755-82550700

2021 of Luxshare

Firm 2012 Shennan

Precision Industry

Avenue Futian

Co. Ltd.District Shenzhen

Phase I 10/F Building 7

ultra-short-term BDO China Shu Lun Courtyard 16

LI Jing and ZHEN

financing bonds in Pan Certified Public Middle Road of ZHU Jiandi 010-88210608

Zhijie

2021 of Luxshare Accountants LLP West 4th Ring

Precision Industry Haidian District

118Luxshare Precision Industry Co. Ltd. Annual Report 2021

Co. Ltd. Beijing

Phase I 1101 1102 and 1103

ultra-short-term Units 11/F South

Golden Credit

financing bonds in Block Building 1

Rating International None CUI Lei 010-62299850

2021 of Luxshare Chaowai West

Co. Ltd.Precision Industry Street Chaoyang

Co. Ltd. District Beijing

Phase I

33-34/F Oriental

ultra-short-term

Interbank Market International

financing bonds in

Clearing House Co. Financial Plaza 318 None XIE Zhong 021-63326662

2021 of Luxshare

Ltd. Zhongshan South

Precision Industry

Road Shanghai

Co. Ltd.Phase I

ultra-short-term

Beijing Financial No. B17 Financial

financing bonds in

Assets Exchange Street Xicheng None GUO Bing 010-57896722

2021 of Luxshare

Co. Ltd. District Beijing

Precision Industry

Co. Ltd.Phase II

ultra-short-term

168 Yincheng

financing bonds in Bank of Shanghai

Middle Road None JIN Yu 021-68476774

2021 of Luxshare Co. Ltd.

Shanghai

Precision Industry

Co. Ltd.Phase II

Building 1

ultra-short-term

Courtyard 10

financing bonds in China CITIC Bank

Guanghua Road None LI Qingping 010-66635909

2021 of Luxshare Co. Ltd.

Chaoyang District

Precision Industry

Beijing

Co. Ltd.

3401 Office

Phase II

Building of

ultra-short-term

Beijing Tian Yuan Shenzhen Stock

financing bonds in

(Shenzhen) Law Exchange Square None TAN Qing 0755-82550700

2021 of Luxshare

Firm 2012 Shennan

Precision Industry

Avenue Futian

Co. Ltd.District Shenzhen

Phase II 10/F Building 7

BDO China Shu Lun

ultra-short-term Courtyard 16 LI Jing and ZHEN

Pan Certified Public ZHU Jiandi 010-88210608

financing bonds in Middle Road of Zhijie

Accountants LLP

2021 of Luxshare West 4th Ring

119Luxshare Precision Industry Co. Ltd. Annual Report 2021

Precision Industry Haidian District

Co. Ltd. Beijing

Phase II 1101 1102 and 1103

ultra-short-term Units 11/F South

Golden Credit

financing bonds in Block Building 1

Rating International None CUI Lei 010-62299850

2021 of Luxshare Chaowai West

Co. Ltd.Precision Industry Street Chaoyang

Co. Ltd. District Beijing

Phase II

33-34/F Oriental

ultra-short-term

Interbank Market International

financing bonds in

Clearing House Co. Financial Plaza 318 None XIE Zhong 021-63326662

2021 of Luxshare

Ltd. Zhongshan South

Precision Industry

Road Shanghai

Co. Ltd.Phase II

ultra-short-term

Beijing Financial No. B17 Financial

financing bonds in

Assets Exchange Street Xicheng None GUO Bing 010-57896722

2021 of Luxshare

Co. Ltd. District Beijing

Precision Industry

Co. Ltd.Phase III

ultra-short-term China Merchants

financing bonds in China Merchants Bank Building No.None MIAO Jianmin 0755-88026159

2021 of Luxshare Bank Co. Ltd. 7088 Houhai

Precision Industry Avenue Shenzhen

Co. Ltd.

3401 Office

Phase III

Building of

ultra-short-term

Beijing Tian Yuan Shenzhen Stock

financing bonds in

(Shenzhen) Law Exchange Square None TAN Qing 0755-82550700

2021 of Luxshare

Firm 2012 Shennan

Precision Industry

Avenue Futian

Co. Ltd.District Shenzhen

Phase III 10/F Building 7

ultra-short-term Courtyard 16

BDO China Shu Lun

financing bonds in Middle Road of LI Jing and ZHEN

Pan Certified Public ZHU Jiandi 010-88210608

2021 of Luxshare West 4th Ring Zhijie

Accountants LLP

Precision Industry Haidian District

Co. Ltd. Beijing

Phase III Golden Credit 1101 1102 and 1103

ultra-short-term Rating International Units 11/F South None CUI Lei 010-62299850

financing bonds in Co. Ltd. Block Building 1

120Luxshare Precision Industry Co. Ltd. Annual Report 2021

2021 of Luxshare Chaowai West

Precision Industry Street Chaoyang

Co. Ltd. District Beijing

Phase III

33-34/F Oriental

ultra-short-term

Interbank Market International

financing bonds in

Clearing House Co. Financial Plaza 318 None XIE Zhong 021-63326662

2021 of Luxshare

Ltd. Zhongshan South

Precision Industry

Road Shanghai

Co. Ltd.Phase III

ultra-short-term

Beijing Financial No. B17 Financial

financing bonds in

Assets Exchange Street Xicheng None GUO Bing 010-57896722

2021 of Luxshare

Co. Ltd. District Beijing

Precision Industry

Co. Ltd.Phase IV

ultra-short-term

22 Jianguomennei

financing bonds in Huaxia Bank Co.Street Dongcheng None LI Minji 010-85237515

2021 of Luxshare Ltd.

District Beijing

Precision Industry

Co. Ltd.Phase IV

ultra-short-term

168 Yincheng

financing bonds in Bank of Shanghai

Middle Road None JIN Yu 021-68476774

2021 of Luxshare Co. Ltd.

Shanghai

Precision Industry

Co. Ltd.

3401 Office

Phase IV

Building of

ultra-short-term

Beijing Tian Yuan Shenzhen Stock

financing bonds in

(Shenzhen) Law Exchange Square None TAN Qing 0755-82550700

2021 of Luxshare

Firm 2012 Shennan

Precision Industry

Avenue Futian

Co. Ltd.District Shenzhen

Phase IV 10/F Building 7

ultra-short-term Courtyard 16

BDO China Shu Lun

financing bonds in Middle Road of LI Jing and ZHEN

Pan Certified Public ZHU Jiandi 010-88210608

2021 of Luxshare West 4th Ring Zhijie

Accountants LLP

Precision Industry Haidian District

Co. Ltd. Beijing

Phase IV Golden Credit 1101 1102 and 1103

None CUI Lei 010-62299850

ultra-short-term Rating International Units 11/F South

121Luxshare Precision Industry Co. Ltd. Annual Report 2021

financing bonds in Co. Ltd. Block Building 1

2021 of Luxshare Chaowai West

Precision Industry Street Chaoyang

Co. Ltd. District Beijing

Phase IV

33-34/F Oriental

ultra-short-term

Interbank Market International

financing bonds in

Clearing House Co. Financial Plaza 318 None XIE Zhong 021-63326662

2021 of Luxshare

Ltd. Zhongshan South

Precision Industry

Road Shanghai

Co. Ltd.Phase IV

ultra-short-term

Beijing Financial No. B17 Financial

financing bonds in

Assets Exchange Street Xicheng None LI Minji 010-85237515

2021 of Luxshare

Co. Ltd. District Beijing

Precision Industry

Co. Ltd.Phase V

ultra-short-term 218 Haihe East

financing bonds in China Bohai Bank Road Hedong

None LI Fu’an 022-58563383

2021 of Luxshare Co. Ltd. District Tianjin

Precision Industry China

Co. Ltd.

3401 Office

Phase V

Building of

ultra-short-term

Beijing Tian Yuan Shenzhen Stock

financing bonds in

(Shenzhen) Law Exchange Square None TAN Qing 0755-82550700

2021 of Luxshare

Firm 2012 Shennan

Precision Industry

Avenue Futian

Co. Ltd.District Shenzhen

Phase V 10/F Building 7

ultra-short-term Courtyard 16

BDO China Shu Lun

financing bonds in Middle Road of LI Jing and ZHEN

Pan Certified Public ZHU Jiandi 010-88210608

2021 of Luxshare West 4th Ring Zhijie

Accountants LLP

Precision Industry Haidian District

Co. Ltd. Beijing

Phase V 1101 1102 and 1103

ultra-short-term Units 11/F South

Golden Credit

financing bonds in Block Building 1

Rating International None CUI Lei 010-62299850

2021 of Luxshare Chaowai West

Co. Ltd.Precision Industry Street Chaoyang

Co. Ltd. District Beijing

Phase V Interbank Market 33-34/F Oriental None XIE Zhong 021-63326662

122Luxshare Precision Industry Co. Ltd. Annual Report 2021

ultra-short-term Clearing House Co. International

financing bonds in Ltd. Financial Plaza 318

2021 of Luxshare Zhongshan South

Precision Industry Road Shanghai

Co. Ltd.Phase V

ultra-short-term

Beijing Financial No. B17 Financial

financing bonds in

Assets Exchange Street Xicheng None LI Minji 010-85237515

2021 of Luxshare

Co. Ltd. District Beijing

Precision Industry

Co. Ltd.Phase VI

ultra-short-term 218 Haihe East

financing bonds in China Bohai Bank Road Hedong

None LI Fuan 022-58563383

2021 of Luxshare Co. Ltd. District Tianjin

Precision Industry China

Co. Ltd.

3401 Office

Phase VI

Building of

ultra-short-term

Beijing Tian Yuan Shenzhen Stock

financing bonds in

(Shenzhen) Law Exchange Square None TAN Qing 0755-82550700

2021 of Luxshare

Firm 2012 Shennan

Precision Industry

Avenue Futian

Co. Ltd.District Shenzhen

Phase VI 10/F Building 7

ultra-short-term Courtyard 16

BDO China Shu Lun

financing bonds in Middle Road of LI Jing and ZHEN

Pan Certified Public ZHU Jiandi 010-88210608

2021 of Luxshare West 4th Ring Zhijie

Accountants LLP

Precision Industry Haidian District

Co. Ltd. Beijing

Phase VI 1101 1102 and 1103

ultra-short-term Units 11/F South

Golden Credit

financing bonds in Block Building 1

Rating International None CUI Lei 010-62299850

2021 of Luxshare Chaowai West

Co. Ltd.Precision Industry Street Chaoyang

Co. Ltd. District Beijing

Phase VI

33-34/F Oriental

ultra-short-term

Interbank Market International

financing bonds in

Clearing House Co. Financial Plaza 318 None XIE Zhong 021-63326662

2021 of Luxshare

Ltd. Zhongshan South

Precision Industry

Road Shanghai

Co. Ltd.

123Luxshare Precision Industry Co. Ltd. Annual Report 2021

Phase VI

ultra-short-term

Beijing Financial No. B17 Financial

financing bonds in

Assets Exchange Street Xicheng None LI Minji 010-85237515

2021 of Luxshare

Co. Ltd. District Beijing

Precision Industry

Co. Ltd.Did the above-mentioned intermediaries change during the reporting period?

□ Yes √ No

4. Use of raised funds

In RMB

Rectifications of Comply with the

Operation of use of the usage use plan

Name of bond special account proceeds in and other

Total proceeds Used amount Unused amount

project for proceeds (if violation of laws agreements as

any) and regulations promised in the

(if any) prospectus?

Phase I

ultra-short-term

financing bonds

in 2021 of 800000000.00 800000000.00 0.00 Normal N/A Yes

Luxshare

Precision

Industry Co. Ltd.Phase II

ultra-short-term

financing bonds

in 2021 of 900000000.00 900000000.00 0.00 Normal N/A Yes

Luxshare

Precision

Industry Co. Ltd.Phase III

ultra-short-term

financing bonds

in 2021 of 500000000.00 500000000.00 0.00 Normal N/A Yes

Luxshare

Precision

Industry Co. Ltd.Phase IV

ultra-short-term 800000000.00 800000000.00 0.00 Normal N/A Yes

financing bonds

124Luxshare Precision Industry Co. Ltd. Annual Report 2021

in 2021 of

Luxshare

Precision

Industry Co. Ltd.Phase V

ultra-short-term

financing bonds

in 2021 of 400000000.00 400000000.00 0.00 Normal N/A Yes

Luxshare

Precision

Industry Co. Ltd.Phase VI

ultra-short-term

financing bonds

in 2021 of 400000000.00 400000000.00 0.00 Normal N/A Yes

Luxshare

Precision

Industry Co. Ltd.Use of proceeds in the construction projects

□ Applicable √ N/A

Change by the Company of the usage of the above-mentioned proceeds during the reporting period

□ Applicable √ N/A

5. Adjustment of credit rating results during the reporting period

□ Applicable √ N/A

6. Implementation and changes of guarantees debt repayment plans and other debt repayment security

measures during the reporting period and their effects on bond investors

□ Applicable √ N/A

IV. Convertible corporate bonds

√ Applicable □ N/A

1. Historic adjustment of conversion price

1. The original conversion price of convertible bonds of the Company was RMB58.48 per share.

2. The conversion price was adjusted from RMB58.48 per share to RMB58.44 per share which became effective on January 13

2021 because 4304604 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 445471

shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.

3. The conversion price was adjusted from RMB58.44 per share to RMB58.38 per share which became effective on February

125Luxshare Precision Industry Co. Ltd. Annual Report 2021

24 2021 because 5459122 shares were added arising from exercise by grantees under 2018 stock option incentive plan and

3767011 shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the

Company.

4. The conversion price was adjusted from RMB58.38 per share to RMB58.36 per share which became effective on March 11

2021 because 2649238 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 967132

shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.

5. The conversion price was adjusted from RMB58.36 per share to RMB58.25 per share which become effective on July 8

2021 because the Company implemented the annual equity distribution in 2020 and distributed RMB1.099999 in cash per 10 shares

to all shareholders based on the Company’s existing total share capital of 7035428828 shares.

6. The conversion price was adjusted from RMB58.25 per share to RMB58.20 per share which became effective on July 22

2021 because 1032246 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 7360758

shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.

7. The conversion price was adjusted from RMB58.20 per share to RMB58.18 per share which became effective on September

6 2021 because 374655 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 3417190

shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 16075 reserved

shares were exercised by grantees under 2019 stock option incentive plan of the Company.

8. The conversion price was adjusted from RMB58.18 per share to RMB58.16 per share which became effective on November

10 2021 because 34828 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 2501419

shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 32328 reserved

shares were exercised by grantees under 2019 stock option incentive plan of the Company.

9. The conversion price was adjusted from RMB58.16 per share to RMB58.05 per share which became effective on December

29 2021 because 14413326 shares were added arising from exercise by grantees under 2018 stock option incentive plan and

1112879 shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan and 41598

reserved shares were exercised by grantees under 2019 stock option incentive plan of the Company.

10. The conversion price was adjusted from RMB58.05 per share to RMB58.01 per share which became effective on December

31 2021 because 5184144 shares were added arising from exercise by grantees under 2018 stock option incentive plan and 365642

shares were added arising from exercise by grantees in initial grant under 2019 stock option incentive plan of the Company.

11. As of the end of the reporting period the conversion price of convertible bonds of the Company was RMB58.01 per share.

2. Accumulative conversion of convertible bonds into shares

√ Applicable □ N/A

Proportion of

accumulative

Proportion of

Amount of converted

Number of amount of

Convertible Beginning Total issued accumulative share to the Amount of

Total issue accumulative unconverted

bond and ending convertible converted total shares unconverted

amount converted bonds to the

abbreviation dates bonds (piece) shares issued by the bonds (RMB)

shares (share) total issued

(RMB) Company

amount

before

conversion

Convertible

300000000299948130

bonds of May 10 2021 30000000 518700.00 8809 0.02% 99.98%

0.000.00

Luxshare

126Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Top 10 holders of convertible corporate bonds

Unit: Share

Number of

Amount of Percentage of

convertible

Nature of holder convertible corporate convertible corporate

Name of holder of convertible corporate corporate bonds

No. of convertible bonds held at the end bonds held at the end

bonds held at the end of

corporate bonds of the reporting of the reporting

the reporting

period (RMB) period

period

China Construction Bank Corporation -

Zhong Ou New Blue Chip Flexible

1 Other 1521569 192110258.80 5.07%

Allocation Hybrid Securities Investment

Fund

ICBC Credit Suisse Tianfeng

Convertible Bond Fixed Income

2 Other 1374891 173590987.88 4.58%

Pension Product - Bank of China

Limited

Stated owned

3 Hua Chuang Securities Co. Ltd. 1129630 142624824.54 3.77%

corporation

Fuguo Fuyi Enterprising Fixed Income

4 Pension Product - Industrial and Other 745035 94066629.03 2.48%

Commercial Bank of China Limited

Foreign

5 UBS AG 667423 84267493.13 2.23%

corporation

Stated owned

6 Northeast Securities Co. Ltd. 550303 69480156.17 1.83%

corporation

Stated owned

7 China Galaxy Securities Co. Ltd. 523593 66107804.99 1.75%

corporation

China Everbright Bank Co. Ltd.-

8 Bosera Enhanced Convertible Other 479957 60598410.91 1.60%

Bonds-type Securities Investment Fund

Dacheng Fund - Postal Saving Bank -

9 Dacheng Fund - Postal Savings I Other 429957 54285510.91 1.43%

Collective Asset Management Plan

ICBC Credit Suisse Tianyi Hybrid

10 Pension Product - Industrial and Other 416608 52600092.86 1.39%

Commercial Bank of China Limited

4. Significant changes in the profitability assets and credit status of the guarantors

□ Applicable √ N/A

127Luxshare Precision Industry Co. Ltd. Annual Report 2021

5. The Company’s liabilities changes in credit at the end of the reporting period and cash arrangements for

debt repayment in future years

According to the Credit Rating Report issued by China Lianhe Credit Rating Co. Ltd. on May 20 2021 the long-term credit

rating of the Company as the entity is AA+ and the credit rating of the convertible bonds of the Company is AA+. There is nosignificant change in the Company’s liabilities and credit. For main accounting data and financial indicators please see the “VIIIMain Accounting Date and Financial Indicators in the Past Two Years” under Section IX of this report.V. The loss in the scope of consolidated statements of the Company during the reporting

period exceeded 10% of the net assets at the end of previous reporting period

□ Applicable √ N/A

VI. Overdue interest-bearing debts other than bonds at the end of the reporting period

□ Applicable √ N/A

VII. Was there violations of rules and regulations during the reporting period?

□ Yes √ No

VIII. Main accounting data and financial indicators of the Company for most recent two

years as of the end of the reporting period

In RMB0’000

Item December 31 2021 December 31 2020 Y/Y% Change

Current ratio 1.1154 1.2918 -13.66%

Equity-debt ratio 62.03% 55.86% 6.17%

Quick ratio 0.793 0.8986 -11.75%

2021 2020 Y/Y% Change

Net profit excluding

601559.72608890.19-1.20%

non-recurring profit and loss

EBITDA - total debt ratio 59.02% 87.03% -28.01%

Interest coverage ratio 13.41 21.62 -37.97%

Cash interest coverage ratio 14.59 22.12 -34.04%

EBITDA-to-interest coverage

21.4727.74-22.60%

ratio

Rate of loans due and repaid 100% 100%

Rate of interest due and paid 100% 100%

128Luxshare Precision Industry Co. Ltd. Annual Report 2021

Section X Financial Report

I. Auditor’s report

Audit opinion Standard Unqualified Opinion

Signing date of audit report April 27 2022

Auditor BDO China Shu Lun Pan Certified Public Accountants LLP

Auditor report document number Xin Kuai Shi Bao Zi [2022] No. ZB10640

Name of certified public accountants LI Jing and WEI Gang

Auditor’s Report

I. Audit opinion

We have audited the financial statements of Luxshare Precision Industry Co. Ltd. (“Luxshare Precision”) which

comprise the consolidated and parent company’s balance sheets as at December 31 2021 and the consolidated and

parent company’s income statements the consolidated and parent company’s statements of cash flows and the

consolidated and parent company’s statements of changes in owners’ equity for the year then ended and the notes to the

financial statements.In our opinion the accompanying financial statements are prepared in all material respects in accordance with the

Accounting Standards for Business Enterprises and fairly present the consolidated and parent company’s financial

position as of December 31 2021 and the consolidated and parent company’s operating results and cash flows for the

year then ended.II. Basis for opinion

We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of thefinancial statements” section of our report. We are independent of Luxshare Precision with the Code of Ethics for

Chinese Certified Public Accountants and we have fulfilled our other ethical responsibilities in accordance with the

Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion.III. Key audit matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the

financial statements of the current period. These matters were addressed in the context of our audit of the financial

statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters.Key audit matters identified in our audit are summarized as below:

Key audit matters How we addressed the matter in our audit

(I) Revenue recognition

For details of the accounting policy for and 1. Understand evaluate and test the design of the

analysis on revenue recognition please see the key internal controls of the management related to

accounting policies described in the Item (26) under the revenue recognition and the operational effectivenessNote “III. Significant accounting policies and of those controls;accounting estimates” and the Item (45) under the “V. 2. Sample the product sales revenue to make testNotes to consolidated financial statements” to the thereof according to different regions and customers;

financial statements. check supporting documents related to revenue

In 2021 Luxshare Precision’s operating income recognition;

presented in its consolidated financial statements 3. Implement the analytical procedures on income

amounted to RMB153946097800. Luxshare Precision and gross profit and determine whether there are

has a large number of customers at home and abroad. abnormal fluctuations in the amount of revenue for the

Under different delivery methods the Company current period;

129Luxshare Precision Industry Co. Ltd. Annual Report 2021

recognizes revenue upon the transfer of control of a 4. Understand the modes of cooperation between

related product to a customer. If a customer is also the the Company and customers and suppliers and

supplier of some raw materials the Company evaluate the product liability share and the transfer of

recognizes the purchase of raw materials and sales of control;

products respectively based on the transfer of inventory 5. Evaluate the accuracy and completeness of

risks and rewards product liability credit risk bearers revenue in conjunction with the confirmation

and business nature that is the sales revenue is procedures for receivables & payables and inventories;

recognized based on the gross amount. The revenue is and

one of the Company’s key performance indicators and 6. Analyze the post-period recovery of accounts

the main source of the Company’s profits so we receivable.identify the revenue from product sales as the key audit

matter based on the importance of the accounting policy

for revenue recognition and the amount involved.(II) Provision for decline in value of inventories

Please see the accounting policies described in the 1. Understand evaluate and test the design of theItem (11) under the Note “III. Significant accounting key internal controls of the management related to thepolicies and accounting estimates” and the Item (7) provision for decline in value of inventories and theunder the Note “V. Notes to consolidated financial operational effectiveness of those controls;statements” to the financial statements. 2. Obtain the Company’s calculation sheet of the

As at December 31 2021 Luxshare Precision’s provision for decline in value of inventories review

inventories and provision for decline in value of the net realizable value of inventories and the

inventories presented in its consolidated financial provision for decline in value of inventories and

statements amounted to RMB21255722500.00 and evaluate whether the judgment made by the

RMB354966700.00 respectively. Inventories of the management in determining the net realizable value of

Company are stated at the lower of cost or net inventories is reasonable;

realizable value. For finished products their net 3. Check the quantity and conditions of

realizable value is determined at the estimated selling inventories focus on inspecting the long-term

price of these inventories less the estimated costs inventories and analyze the adequacy of the provision

necessary to make the sale and relevant taxes; for the for decline in value of inventories if any indication

inventories that need to be processed in the ordinary exists that such inventories may be impaired in

production and operation process their net realizable conjunction with roll-forward procedures; and

value is determined at the estimated selling price of 4. Check the current changes of the provision for

finished products less the estimated costs of completion decline in value of inventories made in previous years

and the estimated costs necessary to make the sale and and analyze the rationality of the changes in the

relevant taxes. The determination of the net realizable provision for decline in value of inventories.value of inventories involves the management’s use of

significant accounting estimates and judgments and the

provision for decline in value of inventories is of

significance to the consolidated financial statements so

we identify the provision for decline in value of

inventories as the key audit matter.IV. Other information

The management of Luxshare Precision (“management”) is responsible for other information. Other information

comprises the information included in the 2021 Annual Report of Luxshare Precision but does not include the financial

statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in

doing so consider whether the other information is materially inconsistent with the financial statements or our

knowledge obtained in the audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this other

information we are required to report that fact. We have nothing to report in this regard.V. Responsibilities of the management and those charged with governance for the financial statements

The management is responsible for the preparation and fair presentation of the financial statements in accordance

with Accounting Standards for Business Enterprises and designing implementing and maintaining internal control that

is necessary to enable the financial statements that are free from material misstatement whether due to fraud or error.

130Luxshare Precision Industry Co. Ltd. Annual Report 2021

In preparing the financial statements the management is responsible for assessing Luxshare Precision’s ability to

continue as a going concern disclosing as applicable matters related to going concern and using the going concern

basis of accounting unless the management either intends to liquidate Luxshare Precision or to cease operations or have

no realistic alternative but to do so.Those charged with governance of Luxshare Precision (hereinafter referred to as “those charged with governance”)

are responsible for overseeing Luxshare Precision’s financial reporting process.VI. Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement whether due to fraud or error and to issue an auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with

China Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with China Standards on Auditing we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error

design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is

higher than that resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations

or the override of internal control;

(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances but not for the purpose to express opinions on the effectiveness of internal control;

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by the management;

(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and

meanwhile based on the audit evidence obtained on whether a material uncertainty exists related to events or

conditions that may cast significant doubt on Luxshare Precision’s ability to continue as a going concern. If we

conclude that a material uncertainty exists we are required to draw attention in our auditor’s report to the related

disclosures in the financial statements. If such disclosures are inadequate we are required to modify our opinion. Our

conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However future events or

conditions may cause Luxshare Precision to cease to continue as a going concern;

(5) Evaluate the overall presentation (including disclosure) structure and content of the financial statements and

whether the financial statements represent the underlying transactions and events in a manner that achieves fair

presentation; and

(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business

activities within Luxshare Precision to express an opinion on the consolidated financial statements. We are responsible

for the direction supervision and performance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and

timing of the audit and significant audit findings including any significant deficiencies in internal control that we

identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical

requirements regarding independence and communicate with them all relationships and other matters that may

reasonably be thought to bear on our independence and where applicable related safeguards.From the matters communicated with those charged with governance we determine those matters that were of

most significance in the audit of the financial statements of the current period and are therefore the key audit matters.We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter

or when in extremely rare circumstances we determine that a matter should not be communicated in our report because

the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such

communication.II. Financial statements

Statements in notes to the financial statements are dominated in RMB.

131Luxshare Precision Industry Co. Ltd. Annual Report 2021

1. Consolidated balance sheet

Prepared by: Luxshare Precision Industry Co. Ltd.December 31 2021

In RMB

Item December 31 2021 December 31 2020

Current assets:

Cash and bank balances 14204618186.43 10528245765.93

Balances with clearing agencies

Placements with banks and other

financial institutions

Held-for-trading financial assets 2107118105.04 3160064470.41

Derivative financial assets

Notes receivable 307836634.64 261208601.50

Accounts receivable 31623185946.25 13839155340.47

Receivable financing

Prepayments 406016492.61 183886937.70

Premiums receivable

Amounts receivable under

reinsurance contracts

Reinsurer’s share of insurance

contract reserves

Other receivables 598456702.88 407990780.79

Including: Interest receivable

Dividends receivable

Financial assets purchased under

resale agreements

Inventories 20900755733.15 13211009381.15

Contract assets

Held-for-sale assets

Non-current assets due within one

year

Other current assets 2161055820.73 1804485645.49

Total current assets 72309043621.73 43396046923.44

Non-current assets:

Loans and advances to customers

132Luxshare Precision Industry Co. Ltd. Annual Report 2021

Debt investments 1464279206.63

Other debt investments

Long-term receivables

Long-term equity investment 1125605226.03 1208540333.29

Other investments in equity

235976148.42138074571.56

instruments

Other non-current financial assets 5700000.00

Investment properties 59000690.72 47592110.24

Fixed assets 34113259322.43 19761012854.95

Construction in progress 3685336499.02 1596064894.58

Bearer biological assets

Oil and gas assets

Right-of-use assets 425011542.28

Intangible assets 2222985029.31 1265161209.65

Development expenditure

Goodwill 1397364508.87 533139532.25

Long-term prepaid expenses 733015722.42 488087044.97

Deferred tax assets 891215468.53 355834434.21

Other non-current assets 1904305181.49 1223199642.61

Total non-current assets 48263054546.15 26616706628.31

Total assets 120572098167.88 70012753551.75

Current liabilities:

Short-term borrowings 11919635337.99 7577068798.49

Loans from the central bank

Taking from banks and other

financial institutions

Held-for-trading financial

41436.00

liabilities

Derivative financial liabilities

Notes payable 234500590.93 128572111.54

Accounts payable 45416165667.67 23051557603.83

Receipts in advance

Contract liabilities 268506246.98 152512971.36

Financial assets sold under

repurchase agreements

133Luxshare Precision Industry Co. Ltd. Annual Report 2021

Customer deposits and deposits

from banks and other financial

institutions

Funds from securities trading

agency

Funds from underwriting securities

agency

Employee benefits payable 2099916381.79 1397632139.23

Taxes payable 616039596.28 237421491.63

Other payables 382391106.17 146162097.14

Including: Interest payable

Dividends payable

Fees and commissions payable

Amounts payable under

reinsurance contracts

Held-for-sale liabilities

Non-current liabilities due within

270079590.16278527714.63

one year

Other current liabilities 3623423072.87 623257555.89

Total current liabilities 64830699026.84 33592712483.74

Non-current liabilities:

Insurance contract reserves

Long-term borrowings 5025096193.09 1495199238.41

Bonds payable 2805785000.04 2475423249.98

Including: Preferred shares

Perpetual bonds

Lease liabilities 315093483.55

Long-term payables

Long-term employee benefits

payable

Provisions 923738.96 1360598.63

Deferred income 538556944.18 425345982.64

Deferred tax liabilities 1272092467.86 966092212.95

Other non-current liabilities 1207763.79 150019923.33

Total non-current liabilities 9958755591.47 5513441205.94

Total liabilities 74789454618.31 39106153689.68

134Luxshare Precision Industry Co. Ltd. Annual Report 2021

Owners’ equity:

Share capital 7050485477.00 6999768186.00

Other equity instruments 527358025.98 527449226.56

Including: Preferred shares

Perpetual bonds

Capital reserve 2719695281.67 1890099569.60

Less: Treasury shares

Other comprehensive income -35801471.29 -44717803.06

Special reserve 1018784.75

Surplus reserve 985161506.61 733067797.73

General risk reserve

Unappropriated profit 24040637144.00 17996149257.73

Total owners’ equity attributable to

35288554748.7228101816234.56

equity holders of the parent company

Minority interests 10494088800.85 2804783627.51

Total owners’ equity 45782643549.57 30906599862.07

Total liabilities and owners’ equity 120572098167.88 70012753551.75

Legal representative: WANG Laichun Chief financial officer: WU Tiansong Head of accounting department: CHEN Huiyong

2. Balance sheet of the parent company

In RMB

Item December 31 2021 December 31 2020

Current assets:

Cash and bank balances 999340773.61 1890655455.45

Held-for-trading financial assets 597571722.08 2238600282.87

Derivative financial assets

Notes receivable 162983735.09 147912632.85

Accounts receivable 2901625168.21 6923152599.31

Receivable financing

Prepayments 475784600.82 295993095.73

Other receivables 635052127.84 554707729.13

Including: Interest receivable

135Luxshare Precision Industry Co. Ltd. Annual Report 2021

Dividends receivable 211543626.19 11543626.19

Inventories 278795156.21 151961355.37

Contract assets

Held-for-sale assets

Non-current assets due within one

year

Other current assets 1025701494.05 143001991.83

Total current assets 7076854777.91 12345985142.54

Non-current assets:

Debt investments 371512328.76

Other debt investments

Long-term receivables

Long-term equity investment 21334608802.17 13603581726.93

Other investments in equity

231075109.79704349663.13

instruments

Other non-current financial assets 572768124.91

Investment properties

Fixed assets 154033992.55 142429101.80

Construction in progress 16062240.56 5938197.42

Bearer biological assets

Oil and gas assets

Right-of-use assets 66189643.97

Intangible assets 71279533.82 52410346.09

Development expenditure

Goodwill 53174339.31 53174339.31

Long-term prepaid expenses 727403.48

Deferred tax assets 9473895.76 7715791.60

Other non-current assets 41620656.64 164700.00

Total non-current assets 22921798668.24 14570491269.76

Total assets 29998653446.15 26916476412.30

Current liabilities:

Short-term borrowings 1892374226.82 1038298216.05

Held-for-trading financial

liabilities

Derivative financial liabilities

136Luxshare Precision Industry Co. Ltd. Annual Report 2021

Notes payable 1876085509.12 918494979.38

Accounts payable 1683682881.16 6005518269.37

Receipts in advance

Contract liabilities 2776607.46 28872712.52

Employee benefits payable 19543803.49 10262304.62

Taxes payable 5588631.90 21244602.02

Other payables 2373609.44 1565708.61

Including: Interest payable

Dividends payable

Held-for-sale liabilities

Non-current liabilities due within

50896248.6720029777.78

one year

Other current liabilities 1607362301.65 512468730.41

Total current liabilities 7140683819.71 8556755300.76

Non-current liabilities:

Long-term borrowings 1845854168.50 180268000.00

Bonds payable 2581553066.25 2475423249.98

Including: Preferred shares

Perpetual bonds

Lease liabilities 54189902.44

Long-term payables

Long-term employee benefits

payable

Provisions

Deferred income 9162818.02 8397770.66

Deferred tax liabilities 34451813.60 19714831.53

Other non-current liabilities

Total non-current liabilities 4525211768.81 2683803852.17

Total liabilities 11665895588.52 11240559152.93

Owners’ equity:

Share capital 7050485477.00 6999768186.00

Other equity instruments 527358025.98 527449226.56

Including: Preferred shares

Perpetual bonds

Capital reserve 3080149716.35 2303197437.38

137Luxshare Precision Industry Co. Ltd. Annual Report 2021

Less: Treasury shares

Other comprehensive income 162951644.67 80735015.01

Special reserve

Surplus reserve 985161506.61 733067797.73

Unappropriated profit 6526651487.02 5031699596.69

Total owners’ equity 18332757857.63 15675917259.37

Total liabilities and owners’ equity 29998653446.15 26916476412.30

3. Consolidated income statement

In RMB

Item 2021 2020

I. Total operating income 153946097790.40 92501259211.54

Including: Operating income 153946097790.40 92501259211.54

Interest income

Premiums earned

Fee and commission

income

II. Total operating costs 146970931574.11 85611417151.82

Including: Operating costs 135048336292.88 75770007049.58

Interest expenses

Fee and commission

expenses

Surrenders

Claims and policyholder

benefits (net of mounts recoverable from

reinsurers)

Changes in insurance

contract reserves (net of reinsurers’ share)

Insurance policyholder

dividends

Expenses for reinsurance

accepted

Taxes and levies 193812057.14 250775738.81

Selling expenses 789908163.80 477047875.58

General expenses 3741908783.50 2463953208.63

R&D expenses 6642300402.74 5744805136.33

138Luxshare Precision Industry Co. Ltd. Annual Report 2021

Financial expenses 554665874.05 904828142.89

Including: Interest

656411767.86394589818.16

expenses

Interest

361773700.27144116091.77

income

Add: Other income 853542165.37 450748795.89

Investment income (Loss is

689386649.74648357066.36

indicated by “-”)

Including: Income from

investments in associates and joint 29737321.95 24799841.42

ventures

Income from

derecognition of financial assets -171521013.80

measured at amortized cost

Foreign exchange gains (Loss

is indicated by “-”)

Net exposure hedging income

(Loss is indicated by “-”)

Income from changes in fair

-115737751.66329044852.43

value (Loss is indicated by “-”)

Impairment losses of credit

-26875504.69-8590000.67

(Loss is indicated by “-”)

Impairment losses of assets

-162790335.12-139288911.05

(Loss is indicated by “-”)

Income from disposal of assets

-45266592.65-2309694.02

(Loss is indicated by “-”)

III. Operating profit (Loss is indicated by

8167424847.288167804168.66

“-”)

Add: Non-operating income 21096536.60 21932288.24

Less: Non-operating expenses 45672434.05 53956792.78

IV. Total profit (Total losses are indicated

8142848949.838135779664.12

by “-”)

Less: Income tax expenses 322238643.64 644764928.70

V. Net profit (Net loss is indicated by “-”) 7820610306.19 7491014735.42

(I) Categorized by the nature of

continuing operation

1. Net profit from continuing

7820610306.197491014735.42

operations (Net loss is indicated by “-”)

139Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Net profit from discontinued

operations (Net loss is indicated by “-”)

(II) Categorized by ownership

1. Net profit attributable to

7070520386.577225462752.58

shareholders of the parent company

2. Net profit attributable to

750089919.62265551982.84

non-controlling interests

VI. Other comprehensive income net of

-23685660.51-214366575.46

tax

Other comprehensive income

attributable to owners of the parent 8916331.77 -210319955.80

company net of tax

(I) Other comprehensive income that

cannot be subsequently reclassified to 81705917.80 -44824020.81

profit or loss

1. Changes from re-measurement

of defined benefit plans

2. Other comprehensive income

that cannot be reclassified to profit or

loss under the equity method

3. Changes in fair value of other

81705917.80-44824020.81

investments in equity instruments

4. Changes in fair value of

enterprises’ own credit risks

5. Others

(II) Other comprehensive income

-72789586.03-165495934.99

that will be reclassified to profit or loss

1. Other comprehensive income

that will be reclassified to profit or loss

under the equity method

2. Changes in fair value of other

debt investments

3. Amounts of financial assets

reclassified into other comprehensive

income

4. Provision for credit impairment

of other debt investments

5. Reserve for cash flow hedges

6. Translation differences of -72789586.03 -165495934.99

140Luxshare Precision Industry Co. Ltd. Annual Report 2021

financial statements denominated in

foreign currencies

7. Others

Other comprehensive income

attributable to minority interests net of -32601992.28 -4046619.66

tax

VII. Total comprehensive income 7796924645.68 7276648159.96

Total comprehensive income

attributable to owners of the parent 7079436718.34 7015142796.78

company

Total comprehensive income

717487927.34261505363.18

attributable to minority interests

VIII. Earnings per share:

(I) Basic earnings per share 1.01 1.03

(II) Diluted earnings per share 0.99 1.01

For any business combination involving enterprises under common control for the reporting period the net profits of the absorbed

party prior to the combination are RMB in the reporting period and were RMB in prior period.Legal representative: WANG Laichun Chief financial officer: WU Tiansong Head of accounting department: CHEN Huiyong

4. Income statement of the parent company

In RMB

Item 2021 2020

I. Total operating income 9280144923.02 11565103529.27

Less: Operating costs 8565181794.19 10781197082.67

Taxes and levies 6084601.77 18261507.97

Selling expenses 24117122.95 35063571.34

General expenses 162180125.16 56228389.80

R&D expenses 320362046.32 378120159.26

Financial expenses 227705129.43 96281059.07

Including: Interest

264763187.0675305134.45

expenses

Interest income 55788891.39 16540879.08

Add: Other income 278899119.07 79872863.79

Investment income (Loss is

2268732708.253409929279.99

indicated by “-”)

Including: Income from -4411361.63 452498.12

141Luxshare Precision Industry Co. Ltd. Annual Report 2021

investments in associates and joint

ventures

Income from

derecognition of financial assets

-41003477.92

measured at amortized cost (Loss is

indicated by “-”)

Net exposure hedging income

(Loss is indicated by “-”)

Income from changes in fair

2187784.6535468629.87

value (Loss is indicated by “-”)

Impairment losses of credit

-1373983.35-1815106.23

(Loss is indicated by “-”)

Impairment losses of assets

-3339894.30146637.49

(Loss is indicated by “-”)

Income from disposal of

15567.9993414.42

assets (Loss is indicated by “-”)

II. Operating profit (Loss is indicated

2519635405.513723647478.49

by “-”)

Add: Non-operating income 299873.15 36922.70

Less: Non-operating expenses 528129.00 2523203.41

III. Total profit (Total losses are

2519407149.663721161197.78

indicated by “-”)

Less: Income tax expenses -1529939.13 13833532.26

IV. Net profit (Net loss is indicated by

2520937088.793707327665.52

“-”)

(I) Net profit from continuing

2520937088.793707327665.52

operation (Net loss is indicated by “-”)

(II) Net profit from discontinued

operations (Net loss is indicated by “-”)

V. Other comprehensive income net of

82216629.66-44873885.23

tax

(I) Other comprehensive income

that cannot be subsequently reclassified 82216629.66 -44873885.23

to profit or loss

1. Changes from

re-measurement of defined benefit plans

2. Other comprehensive income

that cannot be reclassified to profit or

loss under the equity method

142Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Changes in fair value of other

82216629.66-44873885.23

investments in equity instruments

4. Changes in fair value of

enterprises’ own credit risks

5. Others

(II) Other comprehensive income

that will be reclassified to profit or loss

1. Other comprehensive income

that will be reclassified to profit or loss

under the equity method

2. Changes in fair value of other

debt investments

3. Amounts of financial assets

reclassified into other comprehensive

income

4. Provision for credit

impairment of other debt investments

5. Reserve for cash flow hedges

6. Translation differences of

financial statements denominated in

foreign currencies

7. Others

VI. Total comprehensive income 2603153718.45 3662453780.29

VII. Earnings per share:

(I) Basic earnings per share

(II) Diluted earnings per share

5. Consolidated statement of cash flows

In RMB

Item 2021 2020

I. Cash flows from operating activities:

Cash receipts from the sales of

143070164356.0397065870437.67

goods and the rendering of services

Net increase in customer deposits

and deposits from banks and other

financial institutions

Net increase in loans from the

143Luxshare Precision Industry Co. Ltd. Annual Report 2021

central bank

Net increase in taking from other

financial institutions

Cash payments for claims and

policyholders’ benefits under direct

insurance contracts

Net cash receipts from reinsurance

business

Net cash receipts from

policyholders’ deposits and investment

contract liabilities

Cash receipts from interest fees

and commissions

Net increase in taking from banks

and other financial institutions

Net increase in financial assets

sold under repurchase arrangements

Net cash received from securities

trading agency

Receipts of tax refunds 7258087295.46 3100093905.89

Other cash receipts relating to

2646521521.991178580038.87

operating activities

Sub-total of cash inflows from

152974773173.48101344544382.43

operating activities

Cash payments for goods

125194510007.3578908490079.24

purchased and services received

Net increase in loans and advances

to customers

Net increase in balance with the

central bank and due from banks and

other financial institutions

Cash payments for claims and

policyholders’ benefits under direct

insurance contracts

Net increase in placements with

banks and other financial institutions

Cash payments for interest fees

and commissions

Cash payments for insurance

144Luxshare Precision Industry Co. Ltd. Annual Report 2021

policyholder dividends

Cash payments to and on behalf of

16468591642.7511976189826.48

employees

Payments of various types of taxes 1635898950.98 1462211616.65

Other cash payments relating to

2391005655.402124441374.01

operating activities

Sub-total of cash outflows from

145690006256.4894471332896.38

operating activities

Net cash flow from operating activities 7284766917.00 6873211486.05

II. Cash flows from investing activities:

Cash receipts from disposals and

53300796496.8955479505473.33

recovery of investments

Cash receipts from investment

777579552.30487104548.83

income

Net cash receipts from disposals of

fixed assets intangible assets and other 343357620.39 105209975.47

long-term assets

Net cash receipts from disposals of

16418213.7162681623.24

subsidiaries and other business entities

Other cash receipts relating to

4665590364.12

investing activities

Sub-total of cash inflows from investing

59103742247.4156134501620.87

activities

Cash payments to acquire or

construct fixed assets intangible assets 12567222230.86 7502140356.20

and other long-term assets

Cash payments to acquire

54495943096.2257696197909.00

investments

Net increase in pledged loans

receivables

Net cash payments for acquisitions

of subsidiaries and other business 17100080.22 83897533.75

entities

Other cash payments relating to

403138825.89

investing activities

Sub-total of cash outflows from

67483404233.1965282235798.95

investing activities

Net cash flow from investing activities -8379661985.78 -9147734178.08

145Luxshare Precision Industry Co. Ltd. Annual Report 2021

III. Cash flows from financing

activities:

Cash receipts from capital

2387352799.191610278326.76

contributions

Including: Cash receipts from

capital contributions from minority 1800900000.00 1091126000.00

owners of subsidiaries

Cash receipts from borrowings 35452570746.25 25747304566.98

Other cash receipts relating to

4705930595.984485600000.00

financing activities

Sub-total of cash inflows from

42545854141.4231843182893.74

financing activities

Cash repayments of borrowings 38074504796.63 23976420698.67

Cash payments for distribution of

dividends or profits or settlement of 1399755112.12 1065757282.54

interest expenses

Including: Payments for

distribution of dividends or profits to 12150000.00

minority owners of subsidiaries

Other cash payments relating to

3461522325.7514511270.50

financing activities

Sub-total of cash outflows from

42935782234.5025056689251.71

financing activities

Net cash flow from financing activities -389928093.08 6786493642.03

IV. Effect of foreign exchange rate

-58444561.40-194506422.92

changes on cash and cash equivalents

V. Net increase in cash and cash

-1543267723.264317464527.08

equivalents

Add: Opening balance of cash and

10464804451.346147339924.26

cash equivalents

VI. Closing balance of cash and cash

8921536728.0810464804451.34

equivalents

6. Statement of cash flows of the parent company

In RMB

Item 2021 2020

I. Cash flows from operating activities:

Cash receipts from the sales of 14258035135.82 7317370785.47

146Luxshare Precision Industry Co. Ltd. Annual Report 2021

goods and the rendering of services

Receipts of tax refunds 295360510.43 138658293.85

Other cash receipts relating to

10782694066.141643814995.33

operating activities

Sub-total of cash inflows from

25336089712.399099844074.65

operating activities

Cash payments for goods

14298865162.828120664222.33

purchased and services received

Cash payments to and on behalf of

177817539.81135105794.86

employees

Payments of various types of taxes 29081311.32 105195119.59

Other cash payments relating to

9840822402.981963131078.26

operating activities

Sub-total of cash outflows from

24346586416.9310324096215.04

operating activities

Net cash flow from operating activities 989503295.46 -1224252140.39

II. Cash flows from investing activities:

Cash receipts from disposals and

11776296929.9613929048580.41

recovery of investments

Cash receipts from investment

2106637671.033416407362.80

income

Net cash receipts from disposals of

fixed assets intangible assets and other 7640613.84 27330856.05

long-term assets

Net cash receipts from disposals of

63942000.00

subsidiaries and other business entities

Other cash receipts relating to

investing activities

Sub-total of cash inflows from investing

13890575214.8317436728799.26

activities

Cash payments to acquire or

construct fixed assets intangible assets 146496738.96 125735695.16

and other long-term assets

Cash payments to acquire

18393225472.3819459676016.32

investments

Net cash payments for acquisitions

of subsidiaries and other business

entities

147Luxshare Precision Industry Co. Ltd. Annual Report 2021

Other cash payments relating to

investing activities

Sub-total of cash outflows from

18539722211.3419585411711.48

investing activities

Net cash flow from investing activities -4649146996.51 -2148682912.22

III. Cash flows from financing

activities:

Cash receipts from capital

586452799.19527162579.34

contributions

Cash receipts from borrowings 4416265430.62 1543324080.00

Other cash receipts relating to

4471016039.084485600000.00

financing activities

Sub-total of cash inflows from

9473734268.896556086659.34

financing activities

Cash repayments of borrowings 2688298719.66 1882450000.00

Cash payments for distribution of

dividends or profits or settlement of 958024940.64 662016221.81

interest expenses

Other cash payments relating to

3384213580.9211364675.69

financing activities

Sub-total of cash outflows from

7030537241.222555830897.50

financing activities

Net cash flow from financing activities 2443197027.67 4000255761.84

IV. Effect of foreign exchange rate

16346991.54-7911773.68

changes on cash and cash equivalents

V. Net increase in cash and cash

-1200099681.84619408935.55

equivalents

Add: Opening balance of cash and

1880655455.451261246519.90

cash equivalents

VI. Closing balance of cash and cash

680555773.611880655455.45

equivalents

7. Consolidated statement of changes in owners’ equity

Current period

In RMB

2021

Item

Equity attributable to owners of the parent company Minori Total

148Luxshare Precision Industry Co. Ltd. Annual Report 2021

Other equity Other ty owners

instruments Less: compr Unapp interes ’

Share Specia Surplu Genera

Prefe Perpe Capital Treasu ehensi ropriat Subtot

ts equity

capita l s l risk Other

l rred tual

reserve ry ve ed al

Other reserve reserve reserve

share bond shares incom profit

s s e

6999

I. Closing 5274 1890 -4471 73306 17996 28101 2804 30906

768

balance of the 0.00 0.00 4922 09956 0.00 7803. 0.00 7797. 0.00 1492 8162 78362 5998

186.0

preceding year 6.56 9.60 06 73 57.73 34.56 7.51 62.07

0

Add:

Changes in

0.000.00

accounting

policies

Correcti

ons of prior 0.00 0.00

period errors

Business

combination

involving

0.000.00

enterprises

under common

control

Others 0.00 0.00

6999

II. Opening 5274 1890 -4471 73306 17996 28101 2804 30906

768

balance of the 0.00 0.00 4922 09956 0.00 7803. 0.00 7797. 0.00 1492 8162 78362 5998

186.0

current year 6.56 9.60 06 73 57.73 34.56 7.51 62.07

0

III. Changes for

the year 5071 82959 25209 6044 7186 7689 14876

-91289161018

(Decrease is 7291 0.00 0.00 5712. 0.00 3708. 0.00 48788 73851 30517 0436

00.58331.77784.75

indicated by .00 07 88 6.27 4.16 3.34 87.50

“-”)

(I) Total 7070 7079 71748 7796

8916

comprehensive 52038 43671 7927. 92464

331.77

income 6.57 8.34 34 5.68

(II) Owners’

5071829598802269717852

contributions -912

72910.000.005712.0.000.000.000.000.000.001802.8172403904

and reduction in 00.58.0007496.008.49

capital

1. Ordinary 5070 53574 58645 1800 2387

149Luxshare Precision Industry Co. Ltd. Annual Report 2021

shares 8482 4317. 2799. 90000 35279

contributed by .00 19 19 0.00 9.19

owners

2. Capital

contribution

8809-912507254248642486

from holders of.0000.583.011.431.43

other equity

instruments

3. Share-based

240702407024237

payment 1671

0708.0708.2171.

recognized in 462.93

777770

owners’ equity

526435264351695221

4. Others 433.1 433.1 24578 88921

003.076.17

25209-1026-7739-7739

(III) Profit

0.000.000.000.000.000.000.000.003708.0.0003250387910.0038791

distribution

880.30.42.42

1. Transfer to

3708.937080.000.00

surplus reserve

88.88

2. Transfer to

general risk 0.00 0.00

reserve

3. Distributions -7738 -7738 -7738

to owners (or 91489 91489 91489

shareholders) .58 .58 .58

-4730-4730-4730

4. Others

1.841.841.84

(IV) Transfers

within owners’ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

equity

1. Capitalization

of capital

0.000.00

reserve (or

share capital)

2. Capitalization

of surplus

0.000.00

reserve (or

share capital)

3. Loss offset by 0.00 0.00

150Luxshare Precision Industry Co. Ltd. Annual Report 2021

surplus reserve

4. Retained

earnings carried

forward from

0.000.00

changes in

defined benefit

plans

5. Retained

earnings carried

forward from

0.000.00

other

comprehensive

income

6. Others 0.00 0.00

(V) Special 1018 1018 1018

0.000.000.000.000.000.000.000.000.000.000.00

reserve 784.75 784.75 784.75

1. Transfer to

special reserve 1018 1018 1018

in the current 784.75 784.75 784.75

period

2. Amount

utilized in the 0.00 0.00

current period

(VI) Others 0.00 0.00

7050

IV. Closing 5273 2719 -3580 98516 24040 35288 10494 45782

4851018

balance of the 0.00 0.00 5802 69528 0.00 1471. 1506. 0.00 6371 5547 0888 6435

477.0784.75

current period 5.98 1.67 29 61 44.00 48.72 00.85 49.57

0

Prior period

In RMB

2020

Equity attributable to owners of the parent company

Other equity Other Minorit

Item instruments Less: compr Unapp Total Share Specia Surplu Genera y

Prefe Perp Capital Treasu ehensi ropriat Subtot owners’ capita l s l risk Other interest

rred etual reserve ry ve ed al equity l Other reserve reserve reserve s

share bond shares incom profit

s s e

I. Closing 5349 2654 16560 36233 11764 20296 14530 21749

balance of the 001 69287 2152. 5031. 9871 6189 84326. 703294

151Luxshare Precision Industry Co. Ltd. Annual Report 2021

preceding year 738.0 4.21 74 18 72.39 68.52 20 .72

0

Add:

Changes in

0.000.00

accounting

policies

Correcti

ons of prior 0.00 0.00

period errors

Busines

s combination

involving

0.000.00

enterprises

under common

control

Others 0.00 0.00

5349

II. Opening 2654 16560 36233 11764 20296 14530 21749

001

balance of the 0.00 0.00 0.00 69287 0.00 2152. 0.00 5031. 0.00 9871 6189 84326. 703294

738.0

current year 4.21 74 18 72.39 68.52 20 .72

0

III. Changes for

1650

the year 5274 -7645 -2103 37073 6231 7805 13516 91568

766

(Decrease is 0.00 0.00 4922 93304 0.00 19955 0.00 2766. 0.00 16208 19726 99301. 96567.

448.0

indicated by 6.56 .61 .80 55 5.34 6.04 31 35

0

“-”)

(I) Total -1877 7225 7037 73032

265551

comprehensive 49263 46275 71348 65472.

982.84

income .28 2.58 9.30 14

(II) Owners’

392252748469414131099625132

contributions

33210.000.0049229822.0.000.000.000.000.000.006223647318.69688.

and reduction.006.56399.954742

in capital

1. Ordinary

392248793527161091116182

shares

33219258.2579.26000.88579.

contributed by.0034340034

owners

2. Capital

contribution 5274 52744

527449

from holders of 4922 9226.

226.56

other equity 6.56 56

instruments

152Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Share-based

3474034740

payment 45170 351920

3580.3580.

recognized in 74.25 654.98

7373

owners’ equity

1160611606

4004215611

4. Others 983.3 983.3

44.22227.54

22

37073-1015-6447-65828

(III) Profit -13500

0.000.000.000.000.000.000.000.002766.0.0051711843514351.6

distribution 000.00

558.21.666

1. Transfer to

2766.327660.000.00

surplus reserve

55.55

2. Transfer to

general risk 0.00 0.00

reserve

3. Distributions -6446 -6446 -65811

-13500

to owners (or 15942 15942 5942.0

000.00

shareholders) .06 .06 6

-1684-1684-16840

4. Others

09.6009.609.60

1611

(IV) Transfers -1611 -2257 21216

543-1354-1354

within owners’ 0.00 0.00 0.00 54312 0.00 0692. 0.00 0.00 0.00 450.9 0.00

127.0241.55241.55

equity 7.00 52 7

0

1.

1611

Capitalization -1611

543

of capital 54312 0.00 0.00

127.0

reserve (or 7.00

0

share capital)

2.

Capitalization

of surplus 0.00 0.00

reserve (or

share capital)

3. Loss offset

by surplus 0.00 0.00

reserve

4. Retained

earnings carried 0.00 0.00

forward from

153Luxshare Precision Industry Co. Ltd. Annual Report 2021

changes in

defined benefit

plans

5. Retained

earnings carried

-225721216

forward from -1354 -1354

0692.450.9

other 241.55 241.55

527

comprehensive

income

6. Others 0.00 0.00

(V) Special

0.000.000.000.000.000.000.000.000.000.000.000.000.000.00

reserve

1. Transfer to

special reserve

0.000.00

in the current

period

2. Amount

utilized in the 0.00 0.00

current period

(VI) Others 0.00 0.00

6999

IV. Closing 5274 1890 -4471 73306 17996 28101 28047 30906

768

balance of the 0.00 0.00 4922 09956 0.00 7803. 0.00 7797. 0.00 1492 8162 83627. 599862

186.0

current period 6.56 9.60 06 73 57.73 34.56 51 .07

0

8. Statement of changes in owners’ equity of the parent company

Current period

In RMB

2021

Other equity

instruments Other

Item Less: Unappr Total Share Capital compreh Special Surplus

capital Preferr Perpet

Treasury opriate Other owners’

reserve ensive reserve reserve

ed ual Other shares d profit equity income

shares bonds

I. Closing 69997 52744 50316

2303198073507330671567591

balance of the 68186. 0.00 0.00 9226.5 0.00 0.00 99596.

7437.3815.01797.737259.37

preceding year 00 6 69

Add:

0.00

Changes in

154Luxshare Precision Industry Co. Ltd. Annual Report 2021

accounting

policies

Correctio

ns of prior 0.00

period errors

Others 0.00

II. Opening 69997 52744 50316

2303198073507330671567591

balance of the 68186. 0.00 0.00 9226.5 0.00 0.00 99596.

7437.3815.01797.737259.37

current year 00 6 69

III. Changes for

14949

the year 50717 -9120 776952 822166 252093 2656840

0.000.000.000.0051890.

(Decrease is 291.00 0.58 278.97 29.66 708.88 598.26

33

indicated by “-”)

(I) Total 25209

8221662603153

comprehensive 37088.

29.66718.45

income 79

(II) Owners’

contributions 50717 -9120 776952 8275783

0.000.000.000.000.000.000.00

and reduction in 291.00 0.58 278.97 69.39

capital

1. Ordinary

shares 50708 535744 5864527

contributed by 482.00 317.19 99.19

owners

2. Capital

contribution

8809.0-9120507253.424861.4

from holders of

00.58013

other equity

instruments

3. Share-based

payment 240700 2407007

recognized in 708.77 08.77

owners’ equity

4. Others 0.00

-1025

(III) Profit 252093 -7738914

0.000.000.000.000.000.000.000.0098519

distribution 708.88 89.58

8.46

-25209

1. Transfer to 252093

3708.80.00

surplus reserve 708.88

8

155Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Distributions -77389

-7738914

to owners (or 1489.5

89.58

shareholders) 8

3. Others 0.00

(IV) Transfers

within owners’ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

equity

1. Capitalization

of capital reserve 0.00

(or share capital)

2. Capitalization

of surplus

0.00

reserve (or share

capital)

3. Loss offset by

0.00

surplus reserve

4. Retained

earnings carried

forward from

0.00

changes in

defined benefit

plans

5. Retained

earnings carried

forward from

0.00

other

comprehensive

income

6. Others 0.00

(V) Special

0.000.000.000.000.000.000.000.000.000.000.00

reserve

1. Transfer to

special reserve in

0.00

the current

period

2. Amount

utilized in the 0.00

current period

(VI) Others 0.00

IV. Closing 70504 0.00 0.00 52735 308014 0.00 162951 0.00 985161 65266 1833275

156Luxshare Precision Industry Co. Ltd. Annual Report 2021

balance of the 85477. 8025.9 9716.35 644.67 506.61 51487. 7857.63

current period 00 8 02

Prior period

In RMB

2020

Other equity

instruments Other

Item Less: Unapprop Total Share Capital compre Special Surplus

Preferr Perpet Treasur riated Other owners’ capital reserve hensive reserve reserve

ed ual Other y shares profit equity income

shares bonds

I. Closing 5349 30703

125608362335231850411225847

balance of the 00173 97725.

900.24031.18188.81583.54

preceding year 8.00 31

Add:

Changes in

0.00

accounting

policies

Correcti

ons of prior 0.00

period errors

Others 0.00

II. Opening 5349 30703

125608362335231850411225847

balance of the 00173 0.00 0.00 0.00 97725. 0.00 0.00

900.24031.18188.81583.54

current year 8.00 31

III. Changes for

the year 1650 52744 -76720

-44873370732271319544500696

(Decrease is 76644 0.00 0.00 9226. 0287.9 0.00 0.00

885.23766.55407.8875.83

indicated by 8.00 56 3

“-”)

(I) Total

-22303370732736850244

comprehensive

192.71665.5272.81

income

(II) Owners’

3922352744

contributions 844342 14110153

321.00.000.009226.0.000.000.000.000.00

and reduction in 839.07 86.63

056

capital

1. Ordinary

39223

shares 487939 52716257

321.0

contributed by 258.34 9.34

0

owners

157Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Capital

contribution 52744

52744922

from holders of 9226.

6.56

other equity 56

instruments

3. Share-based

payment 347403 34740358

recognized in 580.73 0.73

owners’ equity

900009000000.0

4. Others

00.000

(III) Profit 370732 -101534 -64461594

0.000.000.000.000.000.000.000.00

distribution 766.55 8708.61 2.06

1. Transfer to 370732 -370732

0.00

surplus reserve 766.55 766.55

2. Distributions

-644615-64461594

to owners (or

942.062.06

shareholders)

3. Others 0.00

(IV) Transfers 16115 -16115

-225702121645-1354241.within owners’ 43127 0.00 0.00 0.00 43127. 0.00 0.00 0.00

692.520.9755

equity .00 00

1.

Capitalization 16115 -16115

of capital 43127 43127. 0.00

reserve (or .00 00

share capital)

2.

Capitalization

of surplus 0.00

reserve (or

share capital)

3. Loss offset

by surplus 0.00

reserve

4. Retained

earnings carried

forward from

0.00

changes in

defined benefit

plans

158Luxshare Precision Industry Co. Ltd. Annual Report 2021

5. Retained

earnings carried

forward from -22570 2121645 -1354241.other 692.52 0.97 55

comprehensive

income

6. Others 0.00

(V) Special

0.000.000.000.000.000.000.000.000.000.000.00

reserve

1. Transfer to

special reserve

0.00

in the current

period

2. Amount

utilized in the 0.00

current period

(VI) Others 0.00

IV. Closing 6999 52744 23031

80735733067503169915675917

balance of the 76818 0.00 0.00 9226. 97437. 0.00 0.00

015.01797.73596.69259.37

current period 6.00 56 38

III. Basic information

1. Company profile

Luxshare Precision Industry Co. Ltd. (“Company” or “the Company”) is a company limited by shares

established by Shenzhen Zixin Investment Co. Ltd. (“Zixin Investment”) and Luxshare Limited as

founders after being approved by Shenzhen People’s Government and Shenzhen Bureau of Trade and

Industry in February 2009. Company’s Uniform Social Credit Code: 91440300760482233Q. The

Company was listed on Shenzhen Stock Exchange in September 2010. The Company pertains to the

communication equipment industry.As of December 31 2021 the Company issued 7050485477.00 shares in total with its registered

capital amounting to RMB7050485477.00. The Company’s registered office is located at 2/F Block A

Sanyo New Industrial Zone West Haoyi Community Shajing Street Bao’an District Shenzhen China

while its place of business is located at No.313 North Ring Road Qingxi Town Dongguan City

Guangdong China. The main business activities of the Company include production and operation of

connecting wires connectors computer peripherals and plastic hardware products. The Company’s

parent company is Luxshare Limited and its de facto controllers are WANG Laichun and WANG

Laisheng.The financial statements were approved by the Company’s board of directors on April 27 2022 for

issuance.The relevant information of subsidiaries of the Company is seen in the Note “VII. Interests in otherentities”.

159Luxshare Precision Industry Co. Ltd. Annual Report 2021The changes in scope of consolidation for this reporting period is seen in the Note “VI. Changes in scopeof consolidation”.IV. Basis of preparation of financial statements

1. Basis of preparation

The Company has prepared its financial statements in accordance with the requirements of the

Accounting Standards for Business Enterprises - Basic Standard promulgated by the Ministry of Finance

of the PRC specific accounting standards guidelines for application of accounting standards for

enterprises interpretation of accounting standards for enterprises and other relevant regulations

successively promulgated (collectively “Accounting Standards for Business Enterprises”) and the

Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 -

General Provisions on Financial Reports issued by China Securities Regulatory Commission.

2. Going concern

The Company prepares its financial statements on a going concern basis. The Company has the ability to

continue as a going concern within 12 months from the end of the reporting period and detected no major

events that may affect such ability.V. Important accounting policies and accounting estimates

Reminders on specific accounting policies and accounting estimates:

N/A

1. Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements prepared by the Company conform to the requirements of the Accounting

Standards for Business Enterprises issued by the Ministry of Finance and truly and completely reflect the

consolidated and parent company’s financial positions as of December 31 2020 and the consolidated and

parent company’s operating results and cash flows for the year then ended.

2. Accounting period

The Company’s accounting year is from January 1 to December 31 of each calendar year.

3. Operating cycle

The Company’s operating cycle is 12 months.

4. Functional currency

The Company uses RMB as its functional currency. The subsidiaries of the Company determine its

functional currency based on the primary economic environment in which such subsidiaries operate.

160Luxshare Precision Industry Co. Ltd. Annual Report 2021

These financial statements are presented in RMB.

5. Accounting treatment of business combinations involving enterprises under common control and

business combinations not involving enterprises under common control

Business combination involving enterprises under common control: The assets and liabilities acquired by

the absorbing party in a business combination (including goodwill formed through the acquisition by the

ultimate controller of the absorbed party) are measured according to the carrying amount of the assets and

liabilities of the absorbed party in the financial statements of ultimate controller on the combination date.The difference between the carrying amount of the net assets obtained in a business combination and the

carrying amount of the consideration paid for the combination (or the aggregate face value of shares

issued as consideration) is adjusted to the equity premium in the capital reserve. If the equity premium in

the capital reserve is not sufficient to absorb the difference any excess shall be adjusted against retained

earnings.Business combination not involving enterprises under common control: The cost of combination is the

aggregate of the fair values at the acquisition date of the assets given liabilities incurred or assumed

and equity securities issued by the acquirer in exchange for control of the acquiree. Where the cost of a

business combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net

assets the difference is recognized as goodwill; where the cost of a business combination is lower than

the acquirer’s interest in the fair value of the acquiree’s identifiable net assets the difference is

recognized in profit or loss for the current period. The acquiree’s identifiable assets liabilities and

contingent liabilities that are acquired in the combination meeting the recognition criteria are measured at

the fair value on the date of acquisition.The costs incurred directly attributable to the business combination are recognized in profit or loss for the

current period when incurred; the transaction costs for issue of equity securities or debt securities are

recognized in the amount initially recognized of equity securities or debt securities.

6. Method of preparation of consolidated financial statements

1. Scope of consolidation

The scope of consolidated financial statements is determined on the basis of control and includes those of

the Company and all of its subsidiaries. “Control” means the power of the Company over the investee

through which the Company will enjoy variable returns by participating in the relevant activities and has

the ability to use the power over the investee to affect the Company’s return amount.

2. Consolidation procedures

The Company regards the entire enterprise group as an accounting entity and prepares the consolidated

financial statements according to the uniformed accounting policies reflecting the overall financial

positions operating results and cash flows of this enterprise group. The effects of other intragroup

transactions (between the Company and its subsidiaries or between subsidiaries) are eliminated. Where

the intragroup transactions show that relevant assets have suffered impairment losses those losses are

recognized fully. Where the accounting policies and periods adopted by all subsidiaries are not in line

with those of the Company the necessary adjustments are made to the financial statements of these

subsidiaries based on the accounting policies and periods of the Company when preparing the

161Luxshare Precision Industry Co. Ltd. Annual Report 2021

consolidated financial statements.That portion of owner’s equities net profits or losses and comprehensive income of subsidiaries for the

period attributable to minority interests are separately presented in the consolidated balance sheet below

the “owners’ equity” line item in the consolidated income statement below the “net profit” and “totalcomprehensive income” as “minority interests”. When the amount of loss for the current period

attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ share of the

opening balance of owners’ equity of the subsidiary the excess is allocated against minority interests.

(1) Increase in subsidiaries or businesses

Where a subsidiary or business is acquired during the reporting period through a business combination

involving enterprises under common control operating results and cash flows of this subsidiary or

business from the beginning of the period in which the combination takes place to the end of the reporting

period are included in the consolidated financial statements. Meanwhile the adjustments are made to the

opening balances of the consolidated financial statements and the relevant items of the comparative

statement and the combined reporting entity is deemed to have existed since the time when the ultimate

controller begins to exercise control.Where the Company becomes capable to exercise control over an investee under the common control due

to additional investment or other reasons for equity investments held before acquiring control of the

absorbed party the relevant gains or losses other comprehensive income and other changes in net assets

recognized during the period from the later of the date of acquisition of original equity or the date when

the absorbing party and the absorbed party are under the common control until the combination date are

respectively offset against opening balances of retained earnings during the comparative reporting period

or profit or loss for the current period.Where a subsidiary or business is acquired during the reporting period through a business combination

not involving enterprises under common control it is included in the consolidated financial statements

from the date of acquisition based on the fair value of identifiable assets liabilities and contingent

liabilities determined on the date of acquisition.Where the Company becomes capable to exercise control over an investee not under common control due

to additional investment or other reasons for the acquiree’s equity held prior to the date of acquisition

the Company remeasures the fair value of the equity on the date of acquisition and the difference

between the fair value of the equity and its carrying amount is recognized in profit or loss for the current

period. Where the acquiree’s equity held prior to the date of acquisition involves other comprehensive

income that can be reclassified to profit or loss and changes in other owners’ equity under equity method

such other comprehensive income and changes are transferred to the income of the period in which the

date of acquisition falls.

(2) Disposal of subsidiaries

* General disposal

When the Company loses control over the investee due to disposal of partial equity investments or other

reasons for the remaining equity investments after disposal the Company remeasures the remaining

equity investments after disposal at the fair value on the date when the Company loses its control. The

difference between the sum of the consideration from disposal of equity and the fair value of remaining

equity less the sum of an original subsidiary’s share of net assets and goodwill continuously calculated

from the date of acquisition or combination according to original shareholding ratio is recognized as the

investment return for the period in which the control is lost. Other comprehensive income relating to the

original subsidiary’s equity investments that will be reclassified to profit or loss and changes in other

162Luxshare Precision Industry Co. Ltd. Annual Report 2021

owners’ equity under the equity method is transferred into the investment income for the period when the

control is lost.* Disposal of subsidiaries by steps

Where the subsidiary’s equity investments are disposed by steps through multiple transactions until the

control is lost and the terms and conditions of all transactions on disposal of the subsidiary’s equity

investments and the economic impact thereof fall within one or more of the following circumstances then

it usually indicates that multiple transaction events belong a single package:

i. these transactions are concluded simultaneously or after the influence on each other is considered;

ii. these transactions as a whole can achieve a complete commercial result;

iii. the occurrence of one transaction depends on that of at least one other transaction;

iv. a transaction is not economical alone but economical when considered together with other

transactions.Where all transactions belong to a single package the Company accounts for such transactions as one

transaction to dispose of and lose its control over the subsidiary; however the difference between the

proceeds from each disposal before loss of control and the share owned by the Company in the net assets

of the subsidiary in relation to the investment disposed of is recognized in other comprehensive income in

the consolidated financial statements which is wholly transferred to the profit or loss in the period in

which the control is lost.Where all transactions do not belong to a single package prior to the loss of control the Company

accounts for such transactions as partial disposal of a subsidiary’s equity investments in the event that the

control is not lost; and when the control is lost the Company accounts for such transactions in accordance

with the general methods of disposal of subsidiaries.

(3) Acquisition of a subsidiary’s minority equity

The difference between the long-term equity investments newly obtained by the Company due to

acquisition of minority equity and its share of the subsidiary’s net assets continuously calculated from the

date of acquisition or combination according to new shareholding ratio is adjusted against the equity

premium in the capital reserve in the consolidated balance sheet. If the equity premium in the capital

reserve is not sufficient to absorb the difference any excess shall be adjusted against retained earnings.

(4) Partial disposal of the subsidiary’s equity investments in the event that the control is not lost

The difference between the proceeds from disposal and the share owned by the Company in the net assets

of the subsidiary in relation to the long-term equity investment disposed of that is calculated continuously

from the date of acquisition or combination is adjusted against the equity premium in the capital reserve

in the consolidated balance sheet. In case the equity premium in the capital reserve is not sufficient to

absorb the difference the remaining balance is adjusted against the retained earnings.

7. Classification of joint arrangements and accounting treatment of joint operations

Joint arrangements are classified into joint operations and joint ventures.Where a party to a joint arrangement enjoys relevant assets and assumes relevant liabilities of such an

arrangement this case belongs to a joint operation.The Company recognizes the following items relating to its interest in the joint operation:

(1) the assets held individually by the Company and the Company’s share of the assets held jointly;

(2) the liabilities incurred individually by the Company and the Company’s share of the liabilities

incurred jointly;

163Luxshare Precision Industry Co. Ltd. Annual Report 2021

(3) the Company’s revenue from the sales of its share of output of the joint operation;

(4) the Company’s share of revenue from the sales of assets by the joint operation; and

(5) the expenses incurred individually by the Company and the Company’s share of the expenses

incurred jointly by the joint operation.The Company accounts for investments in joint ventures using the equity method and the details are seen

in Note “III. (XIV) Long-term equity investments”.

8. Recognition of cash and cash equivalents

Cash comprises cash on hand and deposits of the Company that can be readily withdrawn on demand.Cash equivalents comprise short-term highly liquid investments held by the Company that are readily

convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

9. Foreign currency transactions and translation of foreign currency financial statements

1. Foreign currency transactions

The foreign currency transactions are recorded by translating the amount of a foreign currency into RMB

at the spot exchange rate prevailing on the 1st of each month.The balances of foreign currency monetary items are translated using the spot exchange rate at the

balance sheet date. Exchange differences arising therefrom are recognized in profit or loss for the current

period except for exchange differences generated by specific-purpose borrowings in a foreign currency

related to acquisition of qualifying assets which should be accounted for according to the capitalization

principles of borrowing costs.

2. Translation of financial statements denominated in foreign currencies

The asset and liability items in the balance sheet are translated at the spot exchange rates at the balance

sheet date. Items of owners’ equity except for “unappropriated profit” are translated at the spot exchange

rates at the dates on which such items arose. Income and expenses in the income statement are translated

at the exchange rates similar to the spot exchange rates at the dates of the transactions.When the Company disposes of a foreign operation it transfers the translation differences relating to

translation of the financial statements of that foreign operation from the owners’ equity to profit or loss

for the current period.

10. Financial instruments

When the Company becomes a party to a financial instrument contract a financial asset liability or

equity instrument is recognized.

1. Classification of financial instruments

Based on the Company’s business model for managing financial assets and the cash flow characteristics

of financial assets the financial assets are classified into on initial recognition: financial assets measured

at its amortized cost financial assets at fair value through other comprehensive income and financial

assets at fair value through profit or loss.The Company classifies financial assets that meet the following criteria at the same time and are not

designated as at fair value through profit or loss as the financial assets measured at amortized cost:

164Luxshare Precision Industry Co. Ltd. Annual Report 2021

- the business model aims to collect contractual cash flows; and

- the contractual cash flows are generated only from payment of principal and interest on the

outstanding principal.The Company classifies financial assets that meet the following criteria at the same time and are not

designated as at fair value through profit or loss as the financial assets (debt instruments) at fair value

through other comprehensive income:

- the business model aims to collect contractual cash flows and sell such financial assets; and

- the contractual cash flows are generated only from payment of principal and interest on the

outstanding principal.The Company irrevocably designates the non-trading equity instruments as financial assets (equity

instruments) at fair value through other comprehensive income on initial recognition. Such designation is

made on the basis of a single investment and the relevant investments meet the definition of an equity

instrument from the issuer’s perspective.Except for the financial assets measured at amortized cost and the financial assets at fair value through

other comprehensive income the Company classifies all of other remaining financial assets as the

financial assets at fair value through profit or loss. If the accounting mismatch can be eliminated or

significantly reduced on initial recognition the Company may irrevocably designate the financial assets

that should have been classified as those measured at amortized cost or those at fair value through other

comprehensive income as the financial assets at fair value through profit or loss.On initial recognition financial liabilities are classified into the following two categories: financial

liabilities at fair value through profit or loss and financial liabilities measured at amortized cost.A financial liability may be designated as at fair value through profit or loss on initial measurement if one

of the following conditions is met:

1 ) the designation eliminates or significantly reduces accounting mismatch.

2 ) a group of financial liabilities or a group of financial assets and financial liabilities is managed and its

performance is evaluated on a fair value basis and information about the group is reported on that basis to

the enterprise’s key management personnel according to such risk management or investment strategy set

out in official written documents.

3 ) this financial liability contains embedded derivatives that need to be split separately.

2. Recognition and measurement of financial instruments

(1) Financial assets measured at amortized cost

The financial assets measured at amortized cost including notes receivable accounts receivable other

receivables long-term receivables and debt investments are initially measured at fair value and the

relevant transaction costs are charged to the initially recognized amount; the accounts receivable that do

not contain any significant financing component or are recognized by the Company without taking into

consideration the significant financing components under the contracts with a term of less than one year

are initially measured at the contractual trading price.The interest calculated using the effective interest method during the holding period is recognized in the

profit or loss for the current period.On recovery or disposal of a financial asset the difference between the proceeds and the carrying amount

165Luxshare Precision Industry Co. Ltd. Annual Report 2021

of the financial asset is recognized in profit or loss for the current period.

(2) Financial assets (debt instruments) at fair value through other comprehensive income

Financial assets (debt instruments) at fair value through other comprehensive income including

receivable financing and other debt investments are initially measured at fair value and the relevant

transaction costs are recognized in initially recognized amount. These financial assets are subsequently

measured at fair value changes in fair value other than the interest calculated using the effective interest

method impairment loss or gain and profit or loss on exchange are recognized in other comprehensive

income.On derecognition the cumulative gain or loss previously included in other comprehensive income is

removed out from other comprehensive income and recognized in profit or loss for the current period.

(3) Financial assets (equity instruments) at fair value through other comprehensive income

Financial assets (equity instruments) at fair value through other comprehensive income including other

equity investments are initially measured at fair value and the relevant transaction costs are recognized

in initially recognized amount. These financial assets are subsequently measured at fair value and

changes in fair value are recognized in other comprehensive income. The dividends received are

recognized in profit or loss for the current period.On derecognition the cumulative gain or loss previously included in other comprehensive income is

removed out from other comprehensive income and included in retained earnings.

(4) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss including held-for-trading financial assets derivative

financial assets and other non-current financial assets are initially measured at fair value and the relevant

transaction costs are included in profit or loss for the current period. These financial assets are

subsequently measured at fair value and changes in fair value are included in profit or loss for the current

period.

(5) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss including held-for-trading financial liabilities and

derivative financial liabilities are initially measured at fair value and the relevant transaction costs are

recognized in profit or loss for the current period. These financial liabilities are subsequently measured at

fair value and changes in fair value are recognized in profit or loss for the current period.On derecognition the difference between their carrying amount and the consideration paid is included in

profit or loss for the current period.

(6) Financial liabilities measured at the amortized cost

The financial liabilities measured at the amortized cost including short-term borrowings notes payable

accounts payable other payables long-term borrowings bonds payable long-term payables are initially

measured at fair value and the relevant transaction costs are charged to the initially recognized amount.The interest calculated using the effective interest method during the holding period is recognized in the

profit or loss for the current period.On derecognition the difference between the consideration paid and the carrying amount of these

financial liabilities is recognized in profit or loss for the current period.

166Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Derecognition and transfer of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

- the contractual right to receive cash flows from the financial assets has expired;

- the financial asset has been transferred and all the risks and rewards of ownership of the financial

asset are substantially transferred to the transferee;

- the financial asset has been transferred and the Company neither transferred nor retained a substantial

portion of all risks and rewards incidental to the ownership of the financial asset but did not retain

control over the financial asset.When a financial asset is transferred if the Company retains substantially all the risks and rewards of

ownership of a financial asset it does not derecognize the financial asset.When the Company determines whether a transfer of a financial asset satisfies the derecognizing criteria

prescribed above it gives weight to the substance rather than form.The Company divides a transfer of a financial asset into a transfer of the financial asset in its entirety or a

transfer of part of the financial asset. For a transfer of a financial asset in its entirety that satisfies the

derecognizing criteria the difference between the following two amounts is recognized in profit or loss

for the current period:

(1) the carrying amount of the financial asset transferred; and

(2) the sum of the consideration received from the transfer and (if the financial asset transferred is a

financial asset (debt instrument) measured at fair value through other comprehensive income) any

cumulative changes in fair value that was originally recognized in owners’ equity.If part of the transferred financial asset qualifies for derecognizing the carrying amount of the transferred

financial asset in its entirety is allocated between the part that continues to be recognized and the part that

is derecognized based on the relative fair values of those parts. The difference between the following two

amounts is recognized in profit or loss for the current period:

(1) the carrying amount allocated to the part derecognized; and

(2) the sum of the consideration received for the part derecognized and (if the financial asset transferred is

a financial asset (debt instrument) measured at fair value through other comprehensive income) the

amount of the part derecognized corresponding to the cumulative changes in fair value that was originally

recognized in owners’ equity.A financial asset that does not qualify for derecognition continues to be recognized and the consideration

received is recognized as a financial liability.

4. Derecognition of financial liabilities

If the present obligations of a financial liability are discharged in part or whole the financial liability or

any part thereof is derecognized; an agreement between the Company and the creditor to replace the

existing financial liability with a new financial liability with substantially different terms is accounted for

as an extinguishment of the existing financial liability and the recognition of a new financial liability.A substantial modification to the terms of an existing financial liability or any part thereof is accounted

for as an extinguishment of the existing financial liability or any part thereof and the financial liability

with modified terms is recognized as a new financial liability at the same time.

167Luxshare Precision Industry Co. Ltd. Annual Report 2021

When the Company derecognizes a financial liability or any part thereof it recognizes the difference

between the carrying amount of the financial liability derecognized and the consideration paid (including

any non-cash assets transferred or new financial liabilities assumed) in profit or loss for the current

period.If the Company repurchases part of a financial liability it allocates the carrying amount of the financial

liability in its entirety between the part that continues to be recognized and the part that is derecognized

based on the relative fair values of those parts on the date of the repurchase. The difference between the

carrying amount of the financial liability derecognized and the consideration paid (including any

non-cash assets transferred or new financial liabilities assumed) is recognized in profit or loss for the

current period.

5. Method of determination of the fair value of financial assets and financial liabilities

If there is an active market for a financial instrument the quoted price in the active market is used to

establish the fair value of the financial instrument. If there is no active market for a financial instrument a

valuation technique is used to establish the fair value of the financial instrument. On valuation the

Company adopts the valuation technique which applies to the current circumstances and is supported by

sufficient data available and other information selects the input value consistent with the characteristics

of the asset or liability considered by the market participants in the transaction of the relevant asset or

liability and prioritizes using the relevant observable input value. The unobservable input value can be

used only when the relevant observable input value cannot be obtained or it’s impracticable to obtain the

relevant observable input value.

6. Test and accounting treatment of impairment of financial assets

The Company estimates the expected credit losses of financial assets measured at amortized cost

financial assets (debt instruments) at fair value through other comprehensive income and financial

guarantee contracts on a single or joint basis.The Company comprehensively considers reasonable and well-founded information about past events

current conditions and predictions of future economic conditions as well as the possibility of default to

calculate the probability-weighted amount of the present value of the difference between cash flows

receivable from contracts and cash flows expected to be recovered and include it in the expected credit

loss.The Company recognizes a loss allowance equal to the lifetime expected credit losses if the credit risk has

increased significantly since initial recognition or to the expected credit losses within the next 12 months

if the credit risk has not increased significantly since initial recognition. The added or reversed loss

reserves arising therefrom are recognized in profit or loss for the current period as impairment losses or

gains.The Company compares the possibility of default at the balance sheet date with the possibility of default

upon initial recognition to determine the relative change in the default risks of financial instrument

during the expected lifetime and assess whether the credit risk of the financial instruments has increased

significantly since initial recognition. If a financial instrument is past due for more than 30 days the

Company usually believes that credit risk of the financial instrument has increased significantly unless

there is clear evidence that credit risk of the financial instrument has not increased significantly since

initial recognition.

168Luxshare Precision Industry Co. Ltd. Annual Report 2021

If a financial instrument has low credit risk on the balance sheet date the Company believes that credit

risk of the financial instrument has not increased significantly since initial recognition.If there is objective evidence indicating that a financial asset has been impaired for its credit the

Company makes a provision for impairment of the financial asset on an individual basis.With respect to accounts receivable and contract assets that arise from the transactions regulated under

the Accounting Standards for Business Enterprises No.14 - Revenue (2017) whether to include

significant financing components the Company always measures its loss reserves based on an amount

equal to the expected credit loss during the entire life of accounts receivable and contract assets.For lease receivables the Company always measures its loss reserves based on an amount equal to the

expected credit loss during the entire life of these receivables.If the Company no longer reasonably expects that the contractual cash flows of a financial asset can be

recovered in whole or in part it directly reduces the carrying amount of such financial asset.

11. Notes receivable

Please refer to Note V 10 “Financial instruments” for details of the Group’s accounting treatment of

notes receivable and the method to determine the expected credit loss thereof.

12. Accounts receivable

Please refer to Note V 10 “Financial instruments” for details of the Group’s accounting treatment of

accounts receivable and the method to determine the expected credit loss thereof.

13. Receivable financing

Please refer to Note V 10 “Financial instruments” for details of the Group’s accounting treatment of

receivable financing and the method to determine the expected credit loss thereof.

14. Other receivables

Determination and accounting treatment of expected credit losses of other receivables

Please refer to Note V 10 “Financial instruments” for details of the Group’s accounting treatment of

other receivables and the method to determine the expected credit loss thereof.

15. Inventories

1. Classification and cost of inventories

Inventories are classified into: materials in transit raw materials revolving materials goods on hand

products in process goods sold work in process - outsourced etc.Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase costs of

conversion and other expenditures incurred in bringing the inventories to their present location and

condition.

169Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Pricing methods of inventories transferred out

The Company delivers inventories at the price calculated using the weighted-average system monthly in

arrears.

3. Determination basis of net realizable value of different types of inventories

At the balance sheet date inventories are measured at the lower of cost and net realizable value. If the

cost of inventories is higher than the net realizable value a provision for decline in value of inventories is

made. Net realizable value is the estimated selling price in the ordinary course of business less costs

expected to be incurred until completion and the estimated costs necessary to make the sale and relevant

taxes.For finished products goods on hand materials available for sales and other merchandise inventories

available for sales in the ordinary production and operation process their net realizable value is

determined at the estimated selling price of these inventories less the estimated costs necessary to make

the sale and relevant taxes; for the inventories that need to be processed in the ordinary production and

operation process their net realizable value is determined at the estimated selling price of finished

products less the costs to be incurred until completion and the estimated costs necessary to make the sale

and relevant taxes. The net realizable value of the inventories held to satisfy sales or service contracts is

based on the contract price. If the quantity of inventories held is more than the quantity ordered in the

sales contracts the net realizable value of the excess portion of inventories is based on general selling

prices.After the provision for decline in value of inventories is made if the circumstances that previously caused

inventories to be written down below cost no longer exist so that the net realizable value is higher than

the carrying amount of inventories the reversal is made to the extent of the amount originally provided

for the decline in value of inventories. The amount of the reversal is recognized in profit or loss for the

current period.

4. Inventory systems for inventories

A perpetual inventory system is adopted.

5. Amortization of low-value consumables and packing materials

The Company’s revolving materials include low-value consumables and packing materials. The revolving

materials with significant amounts are amortized monthly in accordance with the estimated useful life

upon applying for use; and the other low-value consumables and packing materials are amortized using

immediate write-off method upon applying for use.

16. Contract assets

1. Recognition methods and standards of contract assets

The Company presents the contract assets or liabilities in the balance sheet based on the relationship

between performance obligations and customer payments. The Company presents the right to receive the

consideration for the goods or services that have been transferred or offered to customers (that is

170Luxshare Precision Industry Co. Ltd. Annual Report 2021

depending on factors other than the passage of time) as the contract assets. The Company lists the

contract assets and liabilities under the same contract as net amount. The Company separately presents its

owned right to unconditionally (that is only depending on the passage of time) receive consideration

from customers as the accounts receivable.

2. Determination and accounting treatment of expected credit losses of contract assets

Determination and accounting treatment of expected credit losses of contract assets are seen in the Note

“(X) VI. Test and accounting treatment of impairment of financial assets”.

17. Contract costs

Contract costs include contract performance cost and contract acquisition costs.The cost incurred by the Company to perform a contract is not be governed by the standards on

inventories fixed assets or intangible assets and if meeting the following criteria is recognized as an

asset as the contract performance cost:

* such cost is directly related to an existing or expected contract.* such cost increases the Company’s future resources for fulfilling its performance obligations.* such cost is expected to be recovered.If the incremental cost incurred by the Company to obtain a contract is expected to be recovered it is

recognized as an asset as the cost for contract acquisition.The Company amortizes the asset related to the contract cost on the same basis as the recognition of the

revenue of the goods or services related to the asset; provided that if the cost for contract acquisition is

amortized for not more than one year the Company includes it into the profit or loss for the current

period in which it is incurred.If the carrying amount of the asset related to the contract cost is higher than the difference between the

following two amounts then the Company makes a provision for impairment of the excess and

recognizes it as an impairment loss for the asset:

1. the remaining consideration expected to be obtained due to the transfer of the goods or services related to

the asset; and

2. the cost to be incurred due to the transfer of the relevant goods or services.

If the impairment factors for prior periods have changed afterwards so that the above difference is higher

than the carrying amount of the asset then the Company reverses a provision for impairment originally

made and includes it in the profit or loss for the current period provided that the carrying amount after

reverse should not exceed the carrying amount the asset would have reached on the date of reverse had

the provision for impairment been not made.

18. Held-for-sale assets

The assets of which carrying amount is recovered mainly through sales (including through exchange of

non-monetary assets with commercial substance) rather than continuous use of non-current assets or

disposal groups are classified as the held-for-sale assets.The Company classifies the non-current assets or disposal groups which meet all the following conditions

as the held-for-sale assets:

(1) they can be sold immediately under current conditions according to the practice of sales of such assets

or disposal groups in similar transactions; and

171Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) the sale is very likely to happen that is the Company has made a resolution on a sale plan and

obtained a confirmed purchase commitment and such sale is expected to be completed within one year.The sale has been approved by the relevant authority or regulatory department of the Company if it is

required to be so approved by the relevant provisions. For the non-current assets (excluding financial

assets deferred tax assets and assets formed by the employee benefits) or disposal groups classified as

the held-for-sale assets if their carrying amount is higher than the fair value net of sale expenses then the

carrying amount is reduced to the fair value net of sale expenses. That reduction in amount is recognized

as an impairment loss of the assets and charged to profit or loss for the current period. A provision for

impairment of the held-for-sale assets is recognized accordingly.

19. Debt investments

Please refer to Note V 10 “Financial instruments” for details of the Group’s accounting treatment of debt

investments and the method to determine the expected credit loss thereof.

20. Other debt investments

None

21. Long-term receivables

None

22. Long-term equity investments

1. Judgment criteria of joint control and significant influence

Joint control is the agreed sharing of control over an arrangement and the relevant activities of such

arrangement must be decided upon the unanimous consent of the parties sharing control. If the Company

can exercise joint control over the investee along with other parties to joint ventures and enjoy rights over

net assets of the investee the investee is a joint venture of the Company.Significant influence is the power to participate in the financial and operating policy decisions of an

investee but is not control or joint control with other parties over the establishment of those policies. If

the Company can have significant influence over the investee the investee is an associate of the

Company.

2. Determination of initial investment cost

(1) Long-term equity investments formed by business combination

In case of a long-term equity investment of a subsidiary acquired through a business combination

involving entities under common control the initial investment cost of the long-term equity investment is

the Company’s share of the carrying amount of the owners’ equity of the absorbed party in the

consolidated financial statements of the ultimate controller at the date of combination. The difference

between the initial investment cost of the long-term equity investment and the carrying amount of the

consideration paid for the combination is treated as an adjustment to the equity premium in the capital

reserve. In case the equity premium in the capital reserve is not sufficient to absorb the difference the

172Luxshare Precision Industry Co. Ltd. Annual Report 2021

remaining balance is adjusted against the retained earnings. Where the Company becomes capable to

exercise control over an investee under the common control due to additional investment or other reasons

the difference between the initial investment cost of the long-term equity investment recognized in the

light of above principles and the sum of the carrying amount of the long-term equity investment prior to

combination plus the carrying amount of new consideration paid for further acquisition of shares on

combination date is adjusted to the equity premium. If the equity premium is not sufficient to absorb the

difference any excess is adjusted against retained earnings.In case of a long equity investment acquired through a business combination not involving enterprises

under common control the Company regards the cost of combination determined on the date of

acquisition as the initial investment cost of the long-term equity investment. If the Company becomes

capable to exercise control over an investee not under common control due to additional investment or

other reasons the initial investment cost is the sum of the carrying amount of the equity investment

originally held and the new investment cost.

(2) Long-term equity investments obtained through forms other than business combination

For a long-term equity investment acquired by paying cash the initial investment cost is the actual

purchase price.For a long-term equity investment acquired by the issue of equity securities the initial investment cost is

the fair value of equity securities issued.

3. Subsequent measurement and determination of profit or loss

(1) Long-term equity investments accounted for using the cost method

The Company accounts for the long-term equity investments of the subsidiaries using the cost method

unless these investments meet the held-for-sale conditions. Except for cash dividends or profit

distributions declared but undistributed included in the price or consideration actually paid on acquisition

of investments the Company recognizes its cash dividends or profit distributions declared by the investee

as investment income in the current period.

(2) Long-term equity investments accounted for using the equity method

The long-term equity investments of associates and joint ventures are accounted for using the equity

method. Where the initial investment cost of a long-term equity investment exceeds the Company’s

interest in the fair values of the investee’s identifiable net assets at the acquisition date no adjustment is

made to the initial investment cost of the long-term equity investment. Where the initial investment cost

is less than the Company’s interest in the fair values of the investee’s identifiable net assets at the

acquisition date the difference is charged to profit or loss for the current period and the cost of the

long-term equity investment is adjusted accordingly.The Company respectively recognizes its share of the net profits or losses and other comprehensive

income made by the investee as investment income or losses and other comprehensive income and

adjusts the carrying amount of the long-term equity investment accordingly. The carrying amount of the

long-term equity investment is reduced by the portion of any profit distributions or cash dividends

declared by the investee that is attributed to the Company. The Company adjusts the carrying amount of

the long-term equity investment for other changes in owners’ equity of the investee other than net profits

or losses other comprehensive income and profit distributions (“changes in other owners’ equity”) and

includes the corresponding adjustment in owners’ equity.For recognition of its share of the investee’s net profits or losses or other comprehensive income and

173Luxshare Precision Industry Co. Ltd. Annual Report 2021

changes in other owners’ equity the Company recognizes its share of the investee’s net profits and other

comprehensive income after making appropriate adjustments based on the fair value of the investee’s

identifiable net assets at the date of acquisition in accordance with its accounting policies and period.For unrealized profits or losses resulting from intragroup transactions between the Company and

associates or joint ventures the portion attributable to the Company is eliminated and based on this the

investment income is recognized unless the invested or sold assets constitute the business. The

impairment loss of assets in the unrealized losses resulting from intragroup transactions between the

Company and the investee is fully recognized.The Company discontinues recognizing its share of net losses of the associate or joint venture after the

carrying amount of the long-term equity investment together with any long-term interests that in

substance form part of the Company’s net investment in the associate or joint venture are reduced to zero

except to the extent that the Company has incurred obligations to assume additional losses. Where the

associate or joint venture makes net profits subsequently the Company resumes recognizing its share of

those profits only after its share of the profits equals the share of losses not recognized.

(3) Disposal of long-term equity investments

On disposal of a long term equity investment the difference between the proceeds actually received and

the carrying amount is recognized in profit or loss for the current period.If on partial disposal of long-term equity investments accounted for using the equity method the

remaining equity is still accounted for using the equity method the portion previously included in other

comprehensive income is accounted for on a pro-rata basis with the same basis as the relevant assets or

liabilities directly disposed of by the investee and changes in other owners’ equity are transferred to

profit or loss for the current period on a pro-rata basis.When the Company loses joint control or significant influence on the investee due to disposal of equity

investments or other reasons the original equity investment included in other comprehensive income due

to the use of equity method is accounted for on the same basis as the relevant assets or liabilities directly

disposed of by the investee when the equity method discontinues and the changes in other owners’ equity

are fully transferred to profit or loss for the current period when the equity method discontinues.Where the Company loses control over the investee due to disposal of partial equity investments if in

preparing separate financial statements the Company can exercise joint control or significant influence

on the investee by virtue of its remaining equity the remaining equity switches to the equity method for

accounting and is adjusted as if it is accounted for using the equity method since acquisition. Other

comprehensive income recognized prior to acquisition of the control on the investee is carried forward

proportionally on the same basis as the investee’s direct disposal of related assets or liabilities and

changes in other owners’ equity recognized using the equity method are transferred to profit or loss for

the current period on a pro-rata basis; if the Company cannot exercise joint control or significant

influence on the investee by virtue of its remaining equity the remaining equity is recognized as financial

assets and the difference between the fair value and the carrying amount on the date when the Company

loses control is recognized in profit or loss for the current period and other comprehensive income and

changes in other owners’ equity recognized prior to acquisition of the control on the investee are fully

carried forward.Where all transactions from disposal of equity investments in a subsidiary through multiple transactions

by steps until the loss of control belong to a single package the Company accounts for each transaction as

a disposal of equity investments in a subsidiary and the loss of control; however the difference between

the proceeds from each disposal before loss of control and the carrying amount of the long-term equity

174Luxshare Precision Industry Co. Ltd. Annual Report 2021

investments corresponding to the equity disposed of is first recognized in other comprehensive income in

separate financial statements and then transferred to the profit or loss in the period in which the control is

lost. Where all transactions do not belong to a single package the Company accounts for each transaction

respectively.

23. Investment properties

Measurement of investment properties

Measured at cost

Depreciation or amortization methods

The Company’s investment property is property held to earn rentals or for capital appreciation or both

including land use rights that have been leased out land use rights that are held and ready to be

transferred after appreciation and buildings that have been leased out (including those that are available

for rental after being built by the Company itself or completion of development activities and are being

built or in progress for rental in the future).The Company measures the existing investment properties using the cost model. Subsequent costs

incurred for an investment property are included in the cost of the investment property when it is probable

that the associated economic benefits will flow to the Company and the cost of the asset can be measured

reliably. Subsequent costs that fail to meet the recognition criteria above are recognized in profit or loss in

the period in which they are incurred. For investment properties measured using cost model for

measurement - the buildings available for rental follow the same depreciation policies as those of the

Company’s fixed assets and land use rights available for rental follow the same amortization policies as

those of intangible assets.

24. Fixed assets

(1) Recognition of fixed assets

Fixed assets are held for use in the production or supply of goods or services for rental to others or for

administrative purposes and have useful lives more than one accounting year. A fixed asset is recognized only

when both of the following conditions are met:

(1) it is probable that economic benefits associated with the fixed asset will flow to the enterprise; and

(2) the cost of fixed assets can be measured reliably.

A fixed asset of the Company is initially measured at its cost and in determining the cost of a fixed asset the

Company considers the effect of any expected costs of abandoning the asset at the end of its use.Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable

that the associated economic benefits will flow to the Company and the cost of the asset can be measured reliably;

the carrying amount of the part to be replaced is derecognized; all of other subsequent expenditures are recognized

in profit or loss in the period in which they are incurred.

175Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) Method of depreciation

Estimated useful life Annual depreciation rate

Category Method of depreciation Residual value rate

(years) (%)

Buildings Straight-line method 20 1 10 4.50-5

Machinery equipment Straight-line method 3-10 1 10 9-33

Auxiliary production

Straight-line method 5-10 10 9-18

equipment

Transportation

Straight-line method 3-5 1 10 18-33

equipment

Mould equipment Straight-line method 3 10 30

Office equipment Straight-line method 3-5 1 10 18-33

Computer equipment Straight-line method 3-10 1 10 10-33

Other equipment Straight-line method 3-10 1 10 10-33

The Company provides for depreciation of fixed assets by category using the straight-line method and

determines the depreciation rate on the category estimated useful life and estimated net residual value of fixed

assets. For fixed assets with the provision for impairment the depreciation amount will be determined in the

future based on the carrying amount after deduction of the provision for impairment and remaining useful life. If

a fixed asset has various component parts which have different useful lives or provide benefits to the enterprise in

different manners these component parts are depreciated separately by selecting different depreciation rates or

methods.The depreciation policy adopted for the fixed assets leased in under finance lease is consistent with that for the

self-owned fixed assets. If there is reasonable certainty that the lessee will obtain ownership of the leased asset by

the end of the lease term the leased asset is depreciated over its useful life; if there is no reasonable certainty that

the lessee will obtain ownership of the leased asset by the end of the lease term the leased asset is depreciated

over the shorter of the lease term and its useful life.

(3) Identification basis pricing and depreciation methods of fixed assets leased in under finance leases

If the clauses of the lease agreement made and entered into by and between the Company and the lessor stipulate

one of the following conditions the relevant asset will be recognized as the asset leased in under finance lease:

(1) the ownership of the leased asset belongs to the Company after the lease term expires;

(2) the Company has the option to purchase the asset at the price much lower than the fair value of the asset at the

time of exercise of option;

(3) the lease term accounts for the majority of the useful life of the leased asset;

(4) the present value of the minimum lease payment at the commencement date of the lease is not significantly

different from the fair value of the asset; or

(5) the leased asset is of a specialized nature such that only the lessee can use them without major modifications

being made.At the inception of the lease the Company records the leased asset at an amount equal to the lower of the fair

value of the leased asset and the present value of the minimum lease payments and recognizes a long-term

176Luxshare Precision Industry Co. Ltd. Annual Report 2021

payable at an amount equal to the minimum lease payments. The difference between the recorded amount of the

leased asset and the recorded amount of the payable is accounted for as unrecognized finance charge.

(4) Disposal of fixed assets

A fixed asset is derecognized when it is disposed of or when no future economic benefits are expected to

be generated from its use or disposal. When a fixed asset is sold transferred retired or damaged the

Company recognizes the amount of any proceeds on disposal net of the carrying amount and related taxes

and fee in profit or loss for the current period.

25. Construction in progress

A construction in progress is measured at the actual cost incurred. Actual cost includes construction and

installation fees qualifying borrowing costs and other necessary expenses necessarily incurred for

bringing the asset to working condition for its intended use. The construction in progress is transferred to

fixed assets when meeting working conditions for its intended use and the Company begins to make

provision from next month.

26. Borrowing costs

1. Recognition of capitalization of borrowing costs

Borrowing costs incurred by the company that are directly attributable to the acquisition construction or

production of a qualifying asset are capitalized as part of the cost of the relevant asset. The amounts of

other borrowing costs incurred are recognized as an expense in the period in which they are incurred and

recorded into profit or loss for the current period.Qualifying assets are assets (fixed assets investment property inventories etc.) that necessarily take a

substantial period of time for acquisition construction or production to get ready for their intended use or

sale.

2. Capitalization period of borrowing costs

Capitalization period is the period from the date of commencement of capitalization of borrowing costs to

the date of cessation of capitalization excluding any period over which capitalization is suspended.The capitalization of borrowing costs can commence only when all of the following conditions are

satisfied:

(1) expenditures for the asset are being incurred and such expenditures include those expenditures

incurred for the acquisition construction or production of the qualifying asset that have resulted in

payments of cash transfer of non-cash assets or the assumption of interest-bearing liabilities;

(2) borrowing costs are being incurred; and

(3) activities relating to the acquisition construction or production of the asset that are necessary to

prepare the asset for its intended use or sale have commenced.When the qualifying asset being acquired constructed or produced has become ready for its intended use

or sale the capitalization ceases.

3. Period over which capitalization is suspended

Capitalization of borrowing costs is suspended during periods in which the acquisition construction or

177Luxshare Precision Industry Co. Ltd. Annual Report 2021

production of a qualifying asset is interrupted abnormally when the interruption is for a continuous

period of more than 3 months. However capitalization of borrowing costs continues when the

interruption is a necessary part of the process of preparing that asset for its intended use or sale. The

borrowing costs incurred during these periods of interruption are recognized as profit or loss for the

current period and the capitalization of borrowing costs continues until the acquisition construction or

production of that asset is resumed.

4. Calculation methods of rate and amount of capitalization of borrowing cost

Where funds are borrowed under a specific-purpose borrowing for the acquisition construction or

production of a qualifying asset the amount of borrowing costs to be capitalized is the actual borrowing

costs incurred for the current period less any bank interest earned from depositing the borrowed funds

before being used on the asset or any investment income on the temporary investment of those funds.Where funds are borrowed under general-purpose borrowings and are utilized for the acquisition

construction or production of a qualifying asset the Company determines the amount of borrowing costs

to be capitalized on such borrowings by multiplying a capitalization rate of the utilized general-purpose

borrowings by the weighted average of the excess amounts of cumulative expenditures on the asset over

and above the amounts of specific-purpose borrowings. The capitalization rate is the weighted average of

the actual interest rates applicable to the general-purpose borrowings.During the capitalization period exchange differences related to the principal and interest on a

specific-purpose borrowing denominated in foreign currency are capitalized as part of the cost of the

qualifying asset. The exchange differences arising from foreign currency borrowings and interest thereon

other than specific-purpose borrowings denominated in foreign currency are recognized in profit or loss

for the current period.

27. Biological assets

None

28. Oil and gas assets

None

29. Right-of-use assets

Please refer to Note V 42 “Leases” for details of the determination and accounting treatment of

right-of-use assets.

30. Intangible assets

(1) Pricing methods useful lives and impairment tests

1. Pricing methods of intangible assets

(1) The Company initially measures an intangible asset at cost of acquisition;

The cost of a separately acquired intangible asset comprises its purchase price related taxes and any

178Luxshare Precision Industry Co. Ltd. Annual Report 2021

directly attributable expenditure for preparing the asset for its intended use.

(2) Subsequent measurement

The Company analyzes and assesses the useful life of an intangible asset on its acquisition.A finite-lived intangible asset is amortized during the period over which the asset generates economic

benefits for the enterprise; an intangible asset is regarded as having an indefinite useful life when there is

no foreseeable limit to the period over which the asset is expected to generate economic benefits for the

enterprise and is not be amortized.

2. Estimated useful lives of intangible assets with finite life

Item Estimated Amortization Residual value Basis

useful life method rate

Software 3-10 Straight-line None Estimated period

method of benefit

Land use right 50 Straight-line None Certificate of land

method use rights

Patent right 10 Straight-line None Right term

method

Non-patent 10 Straight-line None Estimated period

technology method of benefit

3. Basis for judgement of an intangible asset with indefinite useful life and procedures for review of

useful life

The Company reviews the useful life of the indefinite intangible assets at the end of each period.Upon review the useful life of intangible assets is still indefinite.

(2) Accounting policies for internal research and development expenditure

1. Specific criteria for an internal research and development project that are classified into the

research phase and the development phase

Expenditure on an internal research and development project is classified into expenditure on the research

phase and expenditure on the development phase.Research phase: the stage of original and planned investigation and research activity undertaken with the

prospect of gaining and understanding new scientific or technical knowledge.Development phase: the stage of the application of research findings or other knowledge to a plan or

design for the production of new or substantially improved materials devices or products etc. before the

start of commercial production or use.

2. Specific criteria of expenditure on the development phase qualifying for capitalization

Expenditure on the research phase is recognized in profit or loss for the period in which it is incurred.Expenditure on the development phase is recognized as an intangible asset only when the Company

demonstrates all of the following conditions are met; otherwise it is recognized in profit or loss for the

current period:

179Luxshare Precision Industry Co. Ltd. Annual Report 2021

(1) the technical feasibility of completing the intangible asset so that it will be available for use or sale;

(2) the intention to complete the intangible asset and use or sell it;

(3) how the intangible asset will generate economic benefits. Among other things the Company can

demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or if

it is to be used internally the usefulness of the intangible asset;

(4) the availability of adequate technical financial and other resources to complete the development of and

the ability to use or sell the intangible asset; and

(5) its ability to measure reliably the expenditure attributable to the intangible asset during its development

phase.If the Company fails to discriminate between expenditure on the research phase and expenditure on the

development phase all expenditures on research and development are recognized in the profit or loss for

the current period.

31. Impairment of long-term assets

Where any indication exists that long-term equity investments investment properties measured at the cost

model fixed assets construction in progress intangible assets with finite useful life and other long-term

assets may be impaired at the balance sheet date the Company performs an impairment test thereon. The

result of the impairment test shows that the recoverable amount of an asset is lower than its carrying

amount the difference is made the provision for impairment and included in the impairment loss. The

recoverable amount of an asset is the higher of its fair value less disposal costs and the present value of

the future cash flows expected to be derived from the asset. The provision for impairment of assets is

calculated and recognized for an individual asset and if it is not possible to estimate the recoverable

amount of the individual asset the Company determines the recoverable amount of the asset group to

which the asset belongs. An asset group is the smallest identifiable group of assets that generates cash

inflows.Goodwill generated in a business combination indefinite-lived intangible assets and intangible assets

which do not meet the working conditions for its use are tested for impairment at least at the end of each

year irrespective of whether there is any indication that the asset may be impaired.For the purpose of impairment testing of the Company the carrying amount of goodwill generated in a

business combination is from the acquisition date allocated on a reasonable basis to each of the related

asset groups. If it is not possible to allocate to the related asset groups it is allocated to each of the related

sets of asset groups. Each of the related asset groups or sets of asset groups shall be an asset group or set

of asset groups that is able to benefit from the synergies of the business combination.In testing an asset group or a set of asset groups to which goodwill has been allocated for impairment

there may be an indication that a related asset group or set of asset groups may be impaired. In such

circumstances the Company firstly tests the asset group or set of asset groups excluding the amount of

goodwill allocated for impairment calculates its recoverable amount compares the recoverable amount

with the related carrying amount and recognizes any impairment loss. Then the Company tests the asset

group or set of asset groups to which goodwill has been allocated for impairment and compares its

carrying amount and recoverable amount. When the recoverable amount is less than its carrying amount

the amount of impairment loss first reduces the carrying amount of any goodwill allocated to the asset

group or set of asset groups and then reduces the carrying amount of other assets (other than goodwill)

within the asset group or set of asset groups pro rata on the basis of the carrying amount of each asset.

180Luxshare Precision Industry Co. Ltd. Annual Report 2021

Once an impairment loss on the asset above is recognized it will not be reversed in a subsequent period.

32. Long-term prepaid expenses

Long-term prepaid expenses mean those that have been incurred but should be amortized in the current

period and the subsequent periods of more than one year.The amortization period and method of expenses are shown as follows:

Item Amortization method Amortization period

Decoration fees Straight-line method Period of benefit

Others Straight-line method Period of benefit

33. Contract liabilities

The Company presents the contract assets or liabilities in the balance sheet based on the relationship

between performance obligations and customer payments. The Company presents the obligations to

transfer goods or offer services to customers as the consideration received or receivable from customers

the contract liabilities. The Company lists the contract assets and liabilities under the same contract as net

amount.

34. Employee benefits

(1) Accounting treatment of short-term benefits

The Company recognizes the short-term benefits actually incurred during the accounting period when the

employees serve the Company as liabilities and include the same as part of the cost of related assets or in

profit or loss for the current period.The employee benefits corresponding to payments of social security contributions and housing funds for

employees by the Company and the appropriation to labor union funds and employee education fees are

determined on such provision basis and at such provision rate as stipulated during the period when the

employees provide services for the Company.The staff welfare incurred by the Company is stated as the amount actually incurred and recorded into

profit or loss for the current period or cost of related assets; non-monetary benefits are measured at fair

value.

(2) Accounting treatment of post-employment benefits

(1) Defined contribution plans

The Company pays basic endowment insurance and unemployment insurance for employees pursuant to

the relevant regulations of the local government. The amounts payable therefor during the accounting

period when the employees serve the Company are calculated according to the payment base and

proportion stipulated by the local regulations which are recognized in profit or loss for the current period

or the cost of related assets as liabilities. The Company pays a certain proportion of the total wages of an

employee to the annuity plan/local social insurance institution and the corresponding expenses are

181Luxshare Precision Industry Co. Ltd. Annual Report 2021

recognized in profit or loss for the current period or the cost of related assets.

(2) Defined benefit plans

The Company according to the formula determined by the expected cumulative benefit unit method

attributes the benefit obligations arising from the defined benefit plan to the service period of the

employees and recognizes them in the profit or loss for the current period or the cost of related assets.The deficit or surplus formed by the present value of obligations in the defined benefit plan minus the fair

value of assets therein is recognized as the net liabilities or net assets of the defined benefit plan. If the

defined benefit plan has surplus the Company measures the net assets of the defined benefit plan

according to the lower of the surplus and the upper limit of assets in the defined benefit plan.All obligations in the defined benefit plan including obligations expected to be paid within 12 months

after the end of the annual reporting period for employee services are discounted based on the market

yield of treasury bonds or high-quality corporate bonds in active markets that match the term and

currency of the obligations in the defined benefit plan on the balance sheet date.The service cost generated by the defined benefit plan and the net interest of the net liabilities or net

assets of the defined benefit plan are recognized in the profit or loss for the current period or the cost of

related assets; changes arising from the re-measurement of net liabilities or net assets of the defined

benefit plan are included in other comprehensive income and are not be converted back to profit or loss

in subsequent accounting periods. At the end of the original defined benefit plan the part originally

included in other comprehensive income is fully carried forward to unappropriated profit within the scope

of equity.In the settlement of the defined benefit plan the gain or loss of settlement is recognized according to the

difference between the present value of the obligations in the defined benefit plan and the settlement price

determined on the settlement date.

(3) Accounting treatment of termination benefits

The Company recognizes the employment compensation liabilities generated by termination benefits and

records them into the profit or loss for the current period on the earlier of: when the Company cannot

unilaterally withdraw the severance benefits provided as a result of the labor relationship termination plan

or layoff proposal or when it recognizes the costs or expenses related to the restructuring of the severance

benefits payment.

(4) Accounting treatment of other long-term employee benefits

35. Lease liabilities

The Company has elected to recognize the cumulative effect from the initial application of the New Lease

Standard as an adjustment to the opening balances of retained earnings and other related items in the

financial statements in the initial year of such application with comparative information not restated.For the operating leases existing before the date of initial application of the New Lease Standard the

lease liability is measured at the present value of the remaining lease payments at the date of initial

application of the New Lease Standard that is discounted at the Company’s incremental borrowing rate at

the date of initial application of the New Lease Standard and for each lease the right-of-use asset is

measured at either of the followings:

* the carrying amount recognized by adopting the New Lease Standard from the commencement date of

182Luxshare Precision Industry Co. Ltd. Annual Report 2021

lease term discounted by the Company’s incremental borrowing rate at the date of initial application of

the New Lease Standard.* an amount equal to the lease liability adjusted by the amount of any prepaid lease payments.For leases classified as operating leases before the date of initial application the Company at the same

time of using aforementioned methods adopts one or more of the following practical expedients to

account for each lease:

1) accounted as short-term leases for the leases for which the lease term ends within 12 months of the

date of initial application;

2) applied a single discount rate to leases with similar characteristics when measuring lease liabilities;

3) excluded initial direct costs from measuring the right-of-use assets;

4) determined the lease term according to the actual exercise or other updates of options before the date

of initial application if the contract contains options to extend or terminate the lease;

5) adjusted the right-of-use assets by the amount of onerous contract provision recognized in the balance

sheet before the date of initial application if the contract including leases is measured as an onerous

contract before the date of initial application in accordance with Note “III. (24) Provisions” to the

financial statements as an alternative of testing the impairment of right-of-use assets;

6) accounted for lease modifications before the date of initial application according to the final

arrangement of the lease modifications under the New Lease Standard without retrospective adjustments.In measuring the lease liabilities the lease payments are discounted by the Company at the leasee’s

incremental borrowing rate as at January 1 2021.For leases classified as finance lease before the date of initial application the right-of-use asset and the

lease liabilities are measured at the original carrying amount of the asset leased in under finance lease and

obligations under finance lease at the date of initial application.

36. Provisions

The Company recognizes an obligation related to a contingency as a provision when all of the following

conditions are satisfied:

(1) the obligation is a present obligation of the Company;

(2) it is probable that an outflow of economic benefits from the Company will be required to settle the

obligation; and

(3) the amount of the obligation can be measured reliably.

Provisions are initially measured at the best estimate of the expenditure required to settle the related

present obligation.Factors pertaining to a contingency such as the risks uncertainties and time value of money are taken into

account as a whole when the Company reaches the best estimate. Where the effect of the time value of

money is material the best estimate is determined by discounting the related future cash outflows.Where there is a continuous range of the expenditure required and each possible outcome in that range is

as likely as any other the best estimate is the mid-point of that range. Under any other circumstances the

best estimate is accounted for as follows:

* where the contingency involves a single item the best estimate is the most likely amount.* where the contingency involves a large population of items the best estimate is determined by weighting

all possible outcomes by their associated probabilities.

183Luxshare Precision Industry Co. Ltd. Annual Report 2021

Where all or some of the expenditure required to settle an estimated liability is expected to be reimbursed

by a third party the reimbursement is recognized as a separate asset when it is virtually certain that

reimbursement will be received. The amount recognized for the reimbursement does not exceed the

carrying amount of the estimated liability.The Company reviews the carrying amount of a provision at the balance sheet date. Where there is clear evidence

that the carrying amount of a provision does not reflect the current best estimate the carrying amount is adjusted

to the current best estimate.

37. Share-based payment

A share-based payment of the Company is a transaction in which the Company grants equity instruments

or incurs liabilities for amounts that are determined based on the price of equity instruments in return for

services rendered by employees or other parties. A share-based payment of the Company is classified as

either an equity-settled share-based payment or a cash-settled share-based payment.

1. Equity-settled share-based payment and equity instruments

An equity-settled share-based payment in exchange for services received from the employees is measured

at the fair value of equity instruments granted to the employees. If the right under the share-based

payment vests immediately following the grant the Company on grant date recognizes related costs or

expenses at an amount equal to the fair value of the equity instruments with a corresponding increase in

capital reserve. If the rights under a share-based payment do not vest until the completion of services for a

vesting period or until the achievement of a specified performance condition at each balance sheet date

during the vesting period the Company makes the best estimate of the number of equity instruments

expected to vest and based on this recognizes the services received in the current period in the related

costs or expenses at an amount equal to the fair value on the grant date with a corresponding increase in

capital reserve.If the terms of equity-settled share-based payment are modified the services received are recognized at

least pursuant to the unmodified terms. In addition any modifications that increase the fair value of the

equity instruments or changes that are beneficial to employees on the modification date are recognized as

an increase in services.If the granted equity instrument is cancelled within the vesting period the Company treats the

cancellation of equity instrument granted as the accelerated exercise and the amount to be recognized

during the remaining vesting period is immediately charged to profit or loss for the current period and the

capital reserve is recognized at the same time. However if a new equity instrument is granted and on the

grant date thereof is deemed to replace the cancelled equity instrument then the substitute equity

instrument granted is accounted for pursuant to the terms and conditions for accounting for original

equity instrument.

2. Cash-settled share-based payment and equity instruments

A cash-settled share-based payment is measured at the fair value of the liability incurred being a liability

which is determined based on the price of the Company’s shares or other equity instruments. If the right

under the share-based payment vests immediately following the grant the Company on grant date

recognizes related costs or expenses at an amount equal to the fair value of the liabilities assumed with a

corresponding increase in liabilities. If the rights under a share-based payment do not vest until the

184Luxshare Precision Industry Co. Ltd. Annual Report 2021

completion of services for a vesting period or until the achievement of a specified performance condition

at each balance sheet date during the vesting period the Company makes the best estimate of the number

of equity instruments expected to vest and based on this recognizes the services received in the current

period in the related costs or expenses at an amount equal to the fair value of the liabilities assumed by

the Company and includes the same in the liabilities accordingly. Until the liability is settled the

Company remeasures the fair value of the liability at each balance sheet date and at the date of settlement

with changes recognized in profit or loss for the current period.

38. Preferred shares perpetual bonds and other financial instruments

39. Revenue

Accounting policies adopted for the recognition and measurement of revenue

1. Accounting policies adopted for the recognition and measurement of revenue

The revenue is recognized at the time when the Company has discharged the performance obligations in

the contract that is when the customer obtains the control of the related goods or services. Obtainment of

the control of the related goods or services means the ability to direct the use of such goods and services

and obtain substantially all of economic benefits from them.If the contract has two or multiple performance obligations the Company allocates the transaction price

to each individual performance obligation on the inception of the contract by reference to relative

standalone selling prices of goods or services promised thereby. The Company measures revenue based

on the transaction price allocated to each individual performance obligation.The transaction price is the amount of consideration to which the Company is entitled arising from the

transfer of goods or services to the customer excluding the amount collected on behalf of a third party

and expected to be returned to the customer. The Company determines the transaction price with

reference to the contract terms and in conjunction with past customary practices and in doing so

considers variable consideration significant financing components in the contract non-cash consideration

consideration payable to customers and other factors. The Company determines the transaction price

including variable consideration to the extent that it is highly probable that its inclusion will not result in a

significant revenue reversal of accumulatively recognized revenue in the future when the uncertainty has

been subsequently resolved. If there is a significant financing component in the contract the Company

determines the transaction price based on the presumed amount payable in cash when the customer

obtains the control of goods or services and amortizes the differences between the transaction price and

the contract consideration using the actual interest method within the term of the contract.When meeting one of the following criteria it belongs to the obligation performed over time otherwise it

constitutes the obligation performed at a point in time:

* the customer obtains and consumes the economic benefits generated by the Company’s performance

when the Company performs the contract.* the customer can control the products in progress in the performance of the contract by the Company.* the products produced in the process of the Company’s performance have irreplaceable uses and the

Company has the right to collect payment for the cumulative performance that has been completed up to

date throughout the term of the contract.For the obligation performed over time the Company recognizes the revenue based on the performance

progress over time unless the performance progress cannot be reasonably determined. The Company

185Luxshare Precision Industry Co. Ltd. Annual Report 2021

determines the progress of performance obligation by taking the nature of goods or services and using the

output/input method. When the performance progress cannot be reasonably determined and the costs

incurred are expected to be recoverable the Company recognizes the revenue to the extent of costs

incurred until the performance progress can be reasonably determined.For the obligation performed at a point in time the Company recognizes the revenue at the point in time

when the customer obtains the control of the related goods or services. When judging whether the

customer has obtained the control of goods or services the Company considers the followings signs:

* the Company has the current right to receive payment for such goods or services that is the customer

has the current obligation to make payment for such goods or services;

* the Company has transferred the legal ownership of such goods to the customer that is the customer

has the legal ownership of such goods;

* the Company has transferred such goods to the customer physically that is the customer has taken

possession of such goods physically;

* the Company has transferred major risks and rewards of ownership of such goods to the customer that

is the customer has obtained major risks and rewards of ownership of such goods; and

* the customer has accepted such goods or services.

2. Specific methods of revenue recognition

The Company organizes the production according to the sales contracts signed with or the orders placed

by customers and identifies the following models based on different geographical locations of customers

and inventory management methods:

(1) General sales

For domestic sales the Company ships goods to the delivery location designated by a customer and

recognizes the revenue after the customer has signed the receipt of the products; and for foreign sales the

goods are delivered according to specific trade terms and the revenue is recognized at a point in time

when the control is transferred.

(2) Supplier management inventory

Under this model the Company ships the goods to the designated warehouse the customer picks up the

goods from the warehouse and the revenue is recognized at a point in time when the control is

transferred.Difference in the accounting policy for revenue recognition arising from adoption of different modes of operation for the same kind

of business

None.

40. Government grants

1. Category

Government grants are monetary assets or non-monetary assets from the government to the Company at

no consideration. Government grants are classified into government grants related to assets and

government grants related to income.Government grants related to assets are government grants whose primary condition is that the Company

should purchase construct or otherwise acquire long-term assets. Government grants related to income

are government grants other than those related to assets.

186Luxshare Precision Industry Co. Ltd. Annual Report 2021

The specific standard based on which the Company classifies a grant as a government grant related to

assets is that: the grant obtained by the Company is used to purchase construct or otherwise acquire

long-term assets.The specific standard based on which the Company classifies a grant as a government grant related to

income is that: government grants related to income are government grants other than those related to

assets.When classifying a grant whose subsidy object is not clearly specified in the government documents as a

government grant related to assets or a government grant related to income the Company judges whether

the grant is used to purchase construct or otherwise acquire long-term assets.

2. Recognition time point

When the Company actually receives the government grant a government grant related to assets of the

Company is recognized and since the long-term assets are available for use the Company equally

amortizes the deferred income based on the estimated useful life of long-term assets and then transfers the

same to the profit or loss for the current period.When the Company actually receives the government grant a government grant related to income of the

Company is recognized and the Company recognizes it in the non-operating income or other income over

the periods in which the related costs are recognized if the grant is a compensation for related expenses or

losses to be incurred by the Company in subsequent periods and directly recognizes it in the

non-operating income or other income for the current period on acquisition if the grant is a compensation

for related expenses or losses incurred by the Company.The government grant is recognized when the Company meets the conditions attaching to the government

grant and can receive the government grant.

3. Accounting treatment

The government grants related to assets are offset against the carrying amount of the related assets or

recognized as deferred income. If a grant is recognized as deferred income it is charged to profit or loss

for the current period in a reasonable and systematic manner within the useful life of related assets (the

grant related to the daily activities of the Company is recognized in other income otherwise it is

recognized in non-operating income);

The government grant related to income which is a compensation for related expenses or losses to be

incurred by the Company in subsequent periods is recognized as the deferred income and charged to the

profit or losses over the period when related costs or losses are recognized (the grant related to the daily

activities of the Company is recognized in other income otherwise it is recognized in non-operating

income) or offset against related costs or losses; and the government grant related to income which is a

compensation for related expenses or losses incurred by the Company is directly recognized in profit or

loss for the current period (the grant related to the daily activities of the Company is recognized in other

income otherwise it is recognized in non-operating income) or offset against related costs or losses.The policy-related preferential loan interest discounts obtained by the Company are accounted for

separately according to the following two circumstances:

(1) If the finance department allocates the interest discount funds to the lending bank and then the

lending bank offers a loan to the Company at the policy-based preferential interest rate the Company

187Luxshare Precision Industry Co. Ltd. Annual Report 2021

recognizes the loan amount actually received as the recorded amount of the loan and calculates the

borrowing costs according to the loan principal and such policy-based preferential interest rate.

(2) If the finance department directly allocates the interest discount funds to the Company the Company

offsets the corresponding interest subsidy against the related borrowing costs.

41. Deferred tax assets/deferred tax liabilities

Income tax includes current and deferred tax. Except for the income tax arising from business

combinations and transactions or events recognized directly in owners’ equity (including other

comprehensive income) the Company recognizes current tax and deferred tax in profit or loss for the

current period.The deferred tax assets and deferred tax liabilities are calculated and recognized based on the difference

(temporary difference) between the tax base of assets and liabilities and the carrying amount of assets and

liabilities.A deferred tax asset is recognized for the deductible temporary difference to the extent that it is probable

that future taxable income amounts will be available against which the deductible temporary difference

can be utilized. A deferred tax asset is recognized for the carryforward of unused deductible losses and

tax credits to the extent that it is probable that future taxable income amounts will be available against

which the deductible losses and tax credits can be utilized.A deferred tax liability is recognized for taxable temporary difference except for special circumstances.Special circumstances under which the deferred tax assets or deferred tax liabilities are not recognized for

the taxable temporary difference include:

* the initial recognition of goodwill;

* the transaction or event that is not business combination and at the time of the occurrence does not

affect accounting profit or taxable income amount (or deductible loss).A deferred tax liability is recognized for the taxable temporary difference related to investments in

subsidiaries associates and joint ventures unless the Company is able to control the timing of the reversal

of the temporary difference and it is probable that the temporary difference will not reverse in the

foreseeable future. A deferred tax asset is recognized for the deductible temporary difference related to

investments in subsidiaries associates and joint ventures when it is probable that the temporary difference

will reverse in the foreseeable future and taxable income amounts will be available in the future against

which the deductible temporary difference can be utilized.At the balance sheet date deferred tax assets and deferred tax liabilities are measured at the tax rates that

are expected to apply to the period when the asset is realized or the liability is settled according to the

requirements of tax laws.The Company reviews the carrying amount of the deferred tax assets at the balance sheet date. The

Company reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable

that sufficient taxable income amounts will be available in future periods to allow the benefit of the

deferred tax asset to be utilized. Any such reduction in amount is reversed to the extent that it becomes

probable that sufficient taxable income amounts will be available.The current tax assets and current tax liabilities are offset and presented on a net basis when the Company

has the statutory right to settle on a net basis and intends to settle on a net basis or to obtain assets and

188Luxshare Precision Industry Co. Ltd. Annual Report 2021

settle liabilities simultaneously.At the balance sheet date deferred tax assets and deferred tax liabilities are offset and presented on a net

basis when both of the following conditions are satisfied:

* the taxpayer has the statutory right to settle the current tax assets and current tax liabilities on a net basis;

and

* the deferred tax assets and deferred tax liabilities are related to income taxes levied by the same tax

authority on the same taxpayer or different taxpayers provided that during the period in which each

material deferred tax asset and liability will be reversed the taxpayer involved intends to settle the current

tax assets and liabilities on a net basis or obtain assets and settle liabilities simultaneously.

42. Leases

(1) Accounting treatment of operating leases

Please refer to paragraph (3) of this section for details of determination and accounting treatment of leases under

the New Lease Standard.

(2) Accounting treatment of finance leases

Please refer to paragraph (3) of this section for details of determination and accounting treatment of leases under

the New Lease Standard.

(3) Determination and accounting treatment of leases under the New Lease Standard

Accounting policies applicable since January 1 2021

The term “lease” refers to an agreement whereby the lessor conveys to the lessee the right to use an asset

for consideration in an agreed period of time. The Company shall assess whether a contract is a lease

contract or contains a lease at the commencement date of the contract which can be identified if one

party to the contract conveys the right to use one or more identified assets for exchange of consideration

in an agreed period of time.If a contract contains several individual leases the Company will split the contract and account for each

individual lease separately. If a contract contains both lease and non-lease components the lessee and the

lessor will separate the lease and non-lease components.

1. The Company as a lessee

(1) Right-of-use assets

At the commencement date of the lease the Company recognizes right-of-use assets for leases excluding

short-term leases and leases of low-value assets. The right-of-use assets are initially measured at cost

comprising the following:

* the amount of the initial measurement of lease liability;

* any lease payments made at or before the commencement date less any lease incentives received (if any);

* any initial direct costs incurred to the Company; and

* costs expected to be incurred to the Company for disassembly and removal of leased assets restoration of

the site where the leased asset is located or recovery of the leased asset to the condition agreed upon

under the terms of the lease excluding costs incurred to produce inventories.The right-of-use assets are depreciated by using a straight-line method subsequently. A leased asset is

189Luxshare Precision Industry Co. Ltd. Annual Report 2021

depreciated over its remaining useful life if the ownership of this leased asset can be reasonably obtained

at the maturity date of the lease term otherwise the leased asset is depreciated over the shorter of its

remaining useful life and the lease term.The Company determines whether the right-of-use assets are impaired and accounts for the identifiedimpairment losses in accordance with the principles stated in Note “III. (20) Impairment of long-termassets”.

(2) Lease liabilities

At the commencement date of the lease the Company recognizes lease liabilities for leases excluding

short-term leases and leases of low-value assets. The lease liabilities are initially measured at the present

value of the outstanding lease payments including:

* fixed payments (including in-substance fixed payments) less any lease incentives receivable (if any);

* variable lease payments that are based on an index or a rate;

* amounts expected to be payable by the Company for the guaranteed residual value;

* the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and

* payments of penalties for terminating the lease if the lease term reflects the Company exercising that

option.The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily

determined the Company’s incremental borrowing rate is applied.Interest expenses incurred to the lease liabilities over the term of the relevant lease are calculated by the

Company based on fixed periodic interest rate and recognized in the current profit or loss or the cost of

the related assets.Variable lease payments excluded from the measurement of lease liabilities are charged to profit or loss in

the period when they are incurred or included in cost of related assets.After the commencement date of the lease term the Company will re-measure the lease liabilities and

adjust relevant right-of-use assets in one of the following cases and charge the difference to the current

profit or loss if the carrying amount of the right-of-use assets is decreased to zero but that of the lease

liabilities needs to be deducted further:

* When there is a change in the assessment of a purchase option lease renewal option or termination option

or the actual exercise of the aforementioned options is not consistent with the original assessment the

Company will re-measure the lease liabilities at the present value of the modified lease payments

discounted by using the revised discount rate.* When there is a change in the in-substance fixed payments the expected payable for the guaranteed residual

value or the index or rate used to determine the lease payments the Company will re-measure the lease

liabilities at the present value of the modified lease payments discounted by using the original discount rate.However if the change in the lease payments is caused by the fluctuation of the floating interest the present

value shall be discounted by using the revised discount rate.

(3) Short-term leases and leases of low-value assets

The Company chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and

leases of low-value assets and recognize in the current profit or loss or the cost of the related assets

payments associated with short-term leases and leases of low-value assets on a straight-line basis over the

term of the relevant lease. Short-term leases are leases with a lease term of 12 months or less without a

purchase option at the commencement date of leases. Leases of low-value assets are leases for which the

190Luxshare Precision Industry Co. Ltd. Annual Report 2021

single leased asset is of low value when it is brand new. Lease of an asset that is sub-leased or that is

expected to be sub-leased by the Company is not included in the lease of low-value assets.

(4) Lease modification

The Company accounts for a lease modification as a separate lease if both of the following conditions exist:

* The modification has increased the scope of the lease by adding the right to use one or more leased assets;

and

* The consideration for the lease increases equivalents to the standalone price for the increase in scope of

lease and any appropriate adjustments to that standalone price to reflect the circumstances of the

particular contract.For a modification that is not accounted for as a separate lease at the effective date of the modification the

Company will allocate the consideration in the modified contract determine the lease term of the modified

lease and re-measure the lease liabilities at the present value of the modified lease payments discounted by

using the revised discount rate.For modifications that decrease the scope of the lease or shorten the lease term the Company decreases the

carrying amount of the right-of-use asset accordingly and recognizes a gain or loss arising from the partial

or full termination of the lease into the current profit or loss. For other modifications resulting to a

re-measurement of lease liabilities the Company makes a corresponding adjustment to the carrying amount

of right-of-use assets.The Company leases plants from the governments or platform companies held by the governments with

conditional rent-free agreements executed with local governments and government platforms in which

conditions such as tax targets employment targets and output targets are stipulated thus variable lease

payments are formed. These variable lease payments are not included in the measurement of lease

liabilities and recognized in profit or loss when they are actually incurred.

2. The Company as a lessor

At the commencement date of the lease the Company classifies leases as finance leases and operating

leases. Finance leases refer to the leases to which the Company has transferred substantially all the risks

and rewards of ownership of the leased assets regardless whether the ownership has transferred or not. All

other leases are classified as operating leases. The Company when acting as a sub-lease lessor classifies

the sub-leases based on the right-of-use assets arising from the original leases.

(1) Accounting treatment for operating lease

Rent receipts from operating lease are recognized as rental income on a straight-line basis over the term of

the relevant lease. Initial direct costs related to operating lease are capitalized when incurred and are

allocated to profit or loss on the same basis as rental income over the lease term. Variable lease payments

not included in the rent receipts are recognized in profit or loss when incurred actually. An operating lease

if modified is accounted for as a new lease from the effective date of the modification with receipts in

advance or rent receivables related to the lease before the modification recognized as the rent receipts of the

new lease.

(2) Accounting treatment for finance lease

191Luxshare Precision Industry Co. Ltd. Annual Report 2021

At the commencement date of the lease the Company recognizes finance lease receivables and

derecognizes assets held under finance leases. Lease receivables are presented at an amount equal to the

net investment in the lease for the initial measurement. The net investment in the lease is the sum of any

unguaranteed residual value and the present value of the rent receipts not received yet as of the

commencement date of the lease discounted at the interest rate implicit in the lease.Interest incomes over the term of the relevant lease are calculated by the Company based on fixed periodic

interest rate. The Company accounts for derecognition and impairment of finance lease receivables in

accordance with Note “III. (10) Financial instruments”.Variable lease payments that are not included in the measurement of the net investment in the lease are

recognized in profit or loss when incurred actually.The Company accounts for a finance lease modification as a separate lease if both of the following

conditions exist:

* The modification has increased the scope of the lease by adding the right to use one or more leased assets;

* The consideration for the lease increases equivalents to the standalone price for the increase in scope of

lease and any appropriate adjustments to that standalone price to reflect the circumstances of the

particular contract.For a modification to a finance lease that is not accounted for as a separate lease the Company accounts for

the modification as follows:

* if the lease would have been classified as an operating lease had the modification been in effect at the

commencement date of the lease the Company accounts for the lease modification as a new lease from the

effective date of the modification and measures the carrying amount of the leased asset as the net

investment in the lease immediately before the effective date of the lease modification; or

* if the lease would have been classified as a finance lease had the modification been in effect at the

commencement date of the lease the Company accounts for the lease modification in accordance with therequirements in Note “III. (10) Financial instruments - Policies on the contract modifications orre-negotiation”.

3. Sale and leaseback transactions

The Company assesses and determines whether the transfer of an asset in the sale and leasebacktransactions is accounted for as a sale of that asset pursuant to the principles stated in Note “III. (26)Revenue”.

(1) The Company as a lessee

If the transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted

for as a sale of the asset the Company as a lessee measures the right-of-use asset arising from the

leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use

retained and recognizes only the amount of any gain or loss that relates to the rights transferred to the

lessor accordingly; and if the transfer of an asset in the sale and leaseback transactions does not satisfy the

requirements to be accounted for as a sale of the asset the Company as a lessee continues to recognizethe transferred asset and a financial liability equal to the transfer proceeds. Please refer to Note “III. (10)Financial instruments” for accounting treatment of the financial liability.

(2) The Company as a lessor

If the transfer of an asset in the sale and leaseback transactions satisfies the requirements to be accounted

for as a sale of the asset the Company as a lessor accounts for the purchase of the asset and for the lease

subject to the above policies stated in “2. The Company as a lessor”; and if the transfer of an asset in the

sale and leaseback transactions does not satisfy the requirements to be accounted for as a sale of the asset

192Luxshare Precision Industry Co. Ltd. Annual Report 2021

the Company as a lessor does not recognize the transferred asset and instead recognizes a financial asset

equal to the transfer proceeds. Please refer to Note “III. (10) Financial instruments” for accounting

treatment of the financial asset.Accounting policies applicable prior to January 1 2021

Leases are classified as finance leases and operating leases. Finance leases refer to the lease to which

substantially all the risks and rewards of the asset ownership have transferred substantially. All other

leases are classified as operating lease.

1. Accounting treatment for operating lease

(1) Lease expenses paid by the Company for leasing in the asset are amortized using a straight-line

method throughout the lease term including the rent-free period and recognized in expenses for the

current period. The initial direct expenses paid by the Company in connection with the lease transaction

are recognized in expenses for the current period.When the asset lessor bears the lease-related expenses to be assumed by the Company the Company

deducts these expenses from total rent and then amortizes such deducted rent during the lease term and

recognizes the same in expenses for the current period.

(2) Lease expenses received by the Company for leasing out the asset are allocated using a straight-line

method throughout the lease term including the rent-free period and recognized as the lease-related

income. The initial direct expenses paid by the Company in connection with the lease transaction are

recognized in expenses for the current period; if such initial direct expenses are of a large amount the

initial direct costs are capitalized and recognized in profit or loss by installments on the same basis as the

recognition of the lease-related income throughout the lease term.When the Company bears the lease-related expenses to be assumed by the lessee the Company deducts

these expenses from total rent and then allocates such deducted rent during the lease term.

2. Accounting treatment for finance lease

(1) Assets leased in under finance leases: At the inception of the lease the Company records the leased

asset at an amount equal to the lower of the fair value of the leased asset and the present value of the

minimum lease payments and recognizes a long-term payable at an amount equal to the minimum lease

payments. The difference between the recorded amount of the leased asset and the recorded amount of the

payable is accounted for as unrecognized finance charge. The Company amortizes unrecognized finance

charge during the lease term using the effective interest method and recognizes the same in financial

expenses. The initial direct expenses incurred by the Company are recognized in the value of leased-in

asset.

(2) Assets leased out under finance leases: At the inception of the lease the Company recognizes the

difference between the sum of finance lease receivables and unguaranteed residual value and their present

value as unearned finance income and recognizes the same as lease revenue in each period over which

the rent will be received. The initial direct expenses incurred by the Company in connection with the

lease transactions are recognized in the finance lease receivable initially measured and reduces the

amount of income recognized during the lease term.

43. Other significant accounting policies and accounting estimates

None

193Luxshare Precision Industry Co. Ltd. Annual Report 2021

44. Changes in significant accounting policies and accounting estimates

(1) Changes in significant accounting policies

√ Applicable □ N/A

Changes in accounting policies and

Approval procedure Remarks

associated reasons

(1) Applying the Accounting Standards for

Examination and approval by the board of

Business Enterprises No.21 - Leases

directors

(revised in 2018)The Ministry of Finance of the People’s Republic of China (hereinafter referred to as the “Ministry ofFinance”) revised and issued the Accounting Standards for Business Enterprises No.21 - Leases

(hereinafter referred to as the “New Lease Standard”) in 2018 and the Company has implemented the New

Lease Standard since January 1 2021 according to which the Company chooses to not assess whether a

contract is a lease contract or contains a lease at the date of initial application for contracts that have been

concluded before the date of initial application.* The Company as a lessee

The Company has elected to recognize the cumulative effect from the initial application of the New Lease

Standard as an adjustment to the opening balances of retained earnings and other related items in the

financial statements in the initial year of such application with comparative information not restated.For the operating leases existing before the date of initial application of the New Lease Standard the

lease liability is measured at the present value of the remaining lease payments at the date of initial

application of the New Lease Standard that is discounted at the Company’s incremental borrowing rate at

the date of initial application of the New Lease Standard and for each lease the right-of-use asset is

measured at either of the followings:

* the carrying amount recognized by adopting the New Lease Standard from the commencement date of

lease term discounted by the Company’s incremental borrowing rate at the date of initial application of

the New Lease Standard.* an amount equal to the lease liability adjusted by the amount of any prepaid lease payments.For leases classified as operating leases before the date of initial application the Company at the same

time of using aforementioned methods adopts one or more of the following practical expedients to

account for each lease:

1) accounted as short-term leases for the leases for which the lease term ends within 12 months of the

date of initial application;

2) applied a single discount rate to leases with similar characteristics when measuring lease liabilities;

3) excluded initial direct costs from measuring the right-of-use assets;

4) determined the lease term according to the actual exercise or other updates of options before the date of

initial application if the contract contains options to extend or terminate the lease;

5) adjusted the right-of-use assets by the amount of onerous contract provision recognized in the balance

sheet before the date of initial application if the contract including leases is measured as an onerous

contract before the date of initial application in accordance with Note “III. (24) Provisions” to the

financial statements as an alternative of testing the impairment of right-of-use assets;

6) accounted for lease modifications before the date of initial application according to the final

194Luxshare Precision Industry Co. Ltd. Annual Report 2021

arrangement of the lease modifications under the New Lease Standard without retrospective adjustments.In measuring the lease liabilities the lease payments are discounted by the Company at the leasee’s

incremental borrowing rate as at January 1 2021.Unpaid minimum lease payment of operating lease with significant 157440735.91

amount disclosed in the consolidated financial statements as at

December 31 2020

Present value discounted by the Company’s incremental borrowing rate 144462685.91

as at January 1 2021

Lease liabilities under the New Lease Standard as at January 1 2021 144462685.91

Difference between the discounted present value and the lease 0.00

liabilities

For leases classified as finance lease before the date of initial application the right-of-use asset and the

lease liabilities are measured at the original carrying amount of the asset leased in under finance lease and

obligations under finance lease respectively at the date of initial application.* The Company as a lessor

For sub-lease classified as an operating lease before the date of initial application and still existing as at or

after the date of initial application the Company re-assesses the sub-lease by applying the remaining

contract valid term and contract terms and conditions of the original lease and the sub-lease and classifies

the sub-lease subject to the New Lease Standard. For sub-lease classified as a financial lease the

Company accounts for it as new finance lease.Except sub-lease the Company is not required to make any adjustments to leases with the Company as a

lessor subject to the New Lease Standard. The Company accounts for leases by applying the New Lease

Standard from the date of initial application.* Main effects of the Company’s application of the New Lease Standard on the financial statements are stated

as follows:

Changes in accounting Approval Affected items of Amount affected on balance as at

policies and associated procedure the financial January 1 2021

reasons statements Combination Parent

company

(1) Adjustments made Prepayments -4726316.41

by the Company as a Right-of-use assets 149189002.32 1693632.15

lessee to operating Lease liabilities 144462685.91 1693632.15

leases existing before

the date of initial

application

(2) Application of Interpretation No.14 of Accounting Standards for Business Enterprises

On February 2 2021 the Ministry of Finance released Interpretation No.14 of Accounting Standards for

Business Enterprises (Cai Kuai [2021] No.1) (hereinafter referred to as the “Interpretation No.14”) which

195Luxshare Precision Industry Co. Ltd. Annual Report 2021

should come into force from the date of releasement. Relevant businesses transacted from the January 1

2021 to the date of application shall be adjusted subject to the Interpretation No.14.

Interpretation

* Public-private-partnership (“PPP”) project contracts

Interpretation No.14 is applicable to PPP project contracts satisfying the requirements of “dual features”

and “dual controls” as stated in the Interpretation No.14. Relevant PPP project contracts that were fulfilled

before December 31 2020 and have not been completed as of the effective date of Interpretation No.14

should be adjusted retrospectively and in case of retrospective adjustment impracticable the opening

balance of retained earnings and that of other relevant line items in the financial statements for the current

year of the application date should be adjusted based on the cumulative effect of applying of Interpretation

No.14 from the earliest period when the retrospective adjustment is practicable with no information in the

comparable period restated. The Company’s application of such requirements has brought no material

impact on the financial position and results of operation of the Company.* Benchmark interest rate reform

Interpretation No.14 introduces practical expedients for modifications of recognition basis of cash flows

related to financial instrument contract and lease contract resulting from the benchmark interest rate reform.According to requirements of Interpretation No.14 transactions related to benchmark interest rate reform

that occurred before December 31 2020 should be adjusted retrospectively unless the retrospective

adjustment is impracticable with no comparative information in the financial statements of the prior period

restated. On the effective date of Interpretation No.14 the difference between the original carrying amount

and new carrying amount for financial assets and liabilities is recognized in the opening balance of retained

earnings or other comprehensive income for the reporting period of the year when applying Interpretation

No.14. The Company’s application of such requirements has brought no material impact on the financial

position and results of operation of the Company.

(3) Application of the Notice on Adjusting the Application Scope of Accounting Regulations on Rental

Concessions Related to COVID-19 Epidemic

On June 19 2020 the Ministry of Finance released the Accounting Regulations on Rental Concessions

Related to COVID-19 Epidemic (Cai Kuai [2020] No.10) which regulated that a company can choose to

adopt practicable expedients to any reduction in lease payments directly resulting from COVID-19

epidemic such as rental concession and delayed payment of rents provided that such reduction satisfied

relevant conditions.On May 26 2021 the Ministry of Finance released the Notice on Adjusting the Application Scope of

Accounting Regulations on Rental Concessions Related to COVID-19 Epidemic (Cai Kuai [2021] No.9)

which should come into force from the date of releasement. According to this notice the application

scope of rental concessions related to COVID-19 epidemic is adjusted hence the practical expedients

only applicable to any reduction in lease payments due before June 30 2021 can also be applied to any

reduction in lease payments due before June 30 2022 but other applicable conditions remain unchanged.The Company has chosen practical expedients to account for all lease contracts satisfying the conditions

before the adjustment of the application scope and all similar lease contracts satisfying the conditions on

and after the adjustment of the application scope. Meanwhile the Company also retrospectively adjusts

relevant lease contracts that have been accounted for by adopting lease modification requirements before

the releasement of this notice but makes no adjustments on comparative information in the financial

196Luxshare Precision Industry Co. Ltd. Annual Report 2021

statements of the prior period. For any rental concession incurred from January 1 2021 to the effective

date of this notice which has not accounted for subject to requirements of this notice the Company will

make adjustments retrospectively subject to requirements of this notice.

(4) Application of presentation related to the centralized management of funds stipulated in Interpretation

No.15 of Accounting Standards for Business Enterprises

On December 30 2021 the Ministry of Finance released Interpretation No.15 of Accounting Standards

for Business Enterprises (Cai Kuai [2021] No.35) (hereinafter referred to as the “Interpretation No.15”)

according to which the “presentation related to the centralized management of funds” should come into

force from the date of releasement and financial statement information in comparative period shall be

adjusted retrospectively.Interpretation No.15 makes clear regulations on the presentation and disclosure in the balance sheet of the

balances related to the centralized management of funds of the parent company and its members through

internal clearing houses finance companies etc. The implementation of these provisions has not had

material impact on the Company’s financial position and operating results.

(2) Changes in significant accounting estimates

□ Applicable √ N/A

(3) Description of adjustments in opening balances of line items in financial statements of the year due to

initial application of New Lease Standard since 2021

√ Applicable □ N/A

Did the line items of the opening assets and liabilities require adjustment?

√ Yes □ No

Consolidated balance sheet

In RMB

Item December 31 2020 January 1 2021 Adjusted amount

Current assets:

Cash and bank balances 10528245765.93 10528245765.93

Balances with clearing

agencies

Placements with banks

and other financial

institutions

Held-for-trading

3160064470.413160064470.41

financial assets

Derivative financial

assets

Notes receivable 261208601.50 261208601.50

197Luxshare Precision Industry Co. Ltd. Annual Report 2021

Accounts receivable 13839155340.47 13839155340.47

Receivable financing

Prepayments 183886937.70 179160621.29 -4726316.41

Premiums receivable

Amounts receivable

under reinsurance contracts

Reinsurer’s share of

insurance contract reserves

Other receivables 407990780.79 407990780.79

Including: Interest

receivable

Dividends

receivable

Financial assets

purchased under resale

agreements

Inventories 13211009381.15 13211009381.15

Contract assets

Held-for-sale assets

Non-current assets due

within one year

Other current assets 1804485645.49 1804485645.49

Total current assets 43396046923.44 43391320607.03 -4726316.41

Non-current assets:

Loans and advances to

customers

Debt investments

Other debt investments

Long-term receivables

Long-term equity

1208540333.291208540333.29

investment

Other investments in

138074571.56138074571.56

equity instruments

Other non-current

financial assets

Investment properties 47592110.24 47592110.24

Fixed assets 19761012854.95 19761012854.95

198Luxshare Precision Industry Co. Ltd. Annual Report 2021

Construction in progress 1596064894.58 1596064894.58

Bearer biological assets

Oil and gas assets

Right-of-use assets 149189002.32 149189002.32

Intangible assets 1265161209.65 1265161209.65

Development

expenditure

Goodwill 533139532.25 533139532.25

Long-term prepaid

488087044.97488087044.97

expenses

Deferred tax assets 355834434.21 355834434.21

Other non-current assets 1223199642.61 1223199642.61

Total non-current assets 26616706628.31 26765895630.63 149189002.32

Total assets 70012753551.75 70157216237.66 144462685.91

Current liabilities:

Short-term borrowings 7577068798.49 7577068798.49

Loans from the central

bank

Taking from banks and

other financial institutions

Held-for-trading

financial liabilities

Derivative financial

liabilities

Notes payable 128572111.54 128572111.54

Accounts payable 23051557603.83 23051557603.83

Receipts in advance

Contract liabilities 152512971.36 152512971.36

Financial assets sold

under repurchase agreements

Customer deposits and

deposits from banks and

other financial institutions

Funds from securities

trading agency

Funds from

underwriting securities

199Luxshare Precision Industry Co. Ltd. Annual Report 2021

agency

Employee benefits

1397632139.231397632139.23

payable

Taxes payable 237421491.63 237421491.63

Other payables 146162097.14 146162097.14

Including: Interest

payable

Dividends

payable

Fees and commissions

payable

Amounts payable under

reinsurance contracts

Held-for-sale liabilities

Non-current liabilities

278527714.63278527714.63

due within one year

Other current liabilities 623257555.89 623257555.89

Total current liabilities 33592712483.74 33592712483.74

Non-current liabilities:

Insurance contract

reserves

Long-term borrowings 1495199238.41 1495199238.41

Bonds payable 2475423249.98 2475423249.98

Including: Preferred

shares

Perpetual

bonds

Lease liabilities 144462685.91 144462685.91

Long-term payables

Long-term employee

benefits payable

Provisions 1360598.63 1360598.63

Deferred income 425345982.64 425345982.64

Deferred tax liabilities 966092212.95 966092212.95

Other non-current

150019923.33150019923.33

liabilities

Total non-current liabilities 5513441205.94 5657903891.85 144462685.91

200Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total liabilities 39106153689.68 39250616375.59 144462685.91

Owners’ equity:

Share capital 6999768186.00 6999768186.00

Other equity instruments 527449226.56 527449226.56

Including: Preferred

shares

Perpetual

bonds

Capital reserve 1890099569.60 1890099569.60

Less: Treasury shares

Other comprehensive

-44717803.06-44717803.06

income

Special reserve

Surplus reserve 733067797.73 733067797.73

General risk reserve

Unappropriated profit 17996149257.73 17996149257.73

Total owners’ equity

attributable to equity holders 28101816234.56 28101816234.56

of the parent company

Minority interests 2804783627.51 2804783627.51

Total owners’ equity 30906599862.07 30906599862.07

Total liabilities and owners’

70012753551.7570157216237.66144462685.91

equity

Description of adjustment

The Company has implemented the New Lease Standard since January 1 2021.Balance sheet of the parent company

In RMB

Item December 31 2020 January 1 2021 Adjusted amount

Current assets:

Cash and bank balances 1890655455.45 1890655455.45

Held-for-trading

2238600282.872238600282.87

financial assets

Derivative financial

assets

Notes receivable 147912632.85 147912632.85

Accounts receivable 6923152599.31 6923152599.31

201Luxshare Precision Industry Co. Ltd. Annual Report 2021

Receivable financing

Prepayments 295993095.73 295993095.73

Other receivables 554707729.13 554707729.13

Including: Interest

receivable

Dividends

11543626.1911543626.19

receivable

Inventories 151961355.37 151961355.37

Contract assets

Held-for-sale assets

Non-current assets due

within one year

Other current assets 143001991.83 143001991.83

Total current assets 12345985142.54 12345985142.54

Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity

13603581726.9313603581726.93

investment

Other investments in

704349663.13704349663.13

equity instruments

Other non-current

financial assets

Investment properties

Fixed assets 142429101.80 142429101.80

Construction in progress 5938197.42 5938197.42

Bearer biological assets

Oil and gas assets

Right-of-use assets 1693632.15 1693632.15

Intangible assets 52410346.09 52410346.09

Development

expenditure

Goodwill 53174339.31 53174339.31

Long-term prepaid

727403.48727403.48

expenses

202Luxshare Precision Industry Co. Ltd. Annual Report 2021

Deferred tax assets 7715791.60 7715791.60

Other non-current assets 164700.00 164700.00

Total non-current assets 14570491269.76 14572184901.91 1693632.15

Total assets 26916476412.30 26918170044.45 1693632.15

Current liabilities:

Short-term borrowings 1038298216.05 1038298216.05

Held-for-trading

financial liabilities

Derivative financial

liabilities

Notes payable 918494979.38 918494979.38

Accounts payable 6005518269.37 6005518269.37

Receipts in advance

Contract liabilities 28872712.52 28872712.52

Employee benefits

10262304.6210262304.62

payable

Taxes payable 21244602.02 21244602.02

Other payables 1565708.61 1565708.61

Including: Interest

payable

Dividends

payable

Held-for-sale liabilities

Non-current liabilities

20029777.7820029777.78

due within one year

Other current liabilities 512468730.41 512468730.41

Total current liabilities 8556755300.76 8556755300.76

Non-current liabilities:

Long-term borrowings 180268000.00 180268000.00

Bonds payable 2475423249.98 2475423249.98

Including: Preferred

shares

Perpetual

bonds

Lease liabilities 1693632.15 1693632.15

Long-term payables

203Luxshare Precision Industry Co. Ltd. Annual Report 2021

Long-term employee

benefits payable

Provisions

Deferred income 8397770.66 8397770.66

Deferred tax liabilities 19714831.53 19714831.53

Other non-current

liabilities

Total non-current liabilities 2683803852.17 2685497484.32 1693632.15

Total liabilities 11240559152.93 11242252785.08 1693632.15

Owners’ equity:

Share capital 6999768186.00 6999768186.00

Other equity instruments 527449226.56 527449226.56

Including: Preferred

shares

Perpetual

bonds

Capital reserve 2303197437.38 2303197437.38

Less: Treasury shares

Other comprehensive

80735015.0180735015.01

income

Special reserve

Surplus reserve 733067797.73 733067797.73

Unappropriated profit 5031699596.69 5031699596.69

Total owners’ equity 15675917259.37 15675917259.37

Total liabilities and owners’

26916476412.3026918170044.451693632.15

equity

Description of adjustment

The Company has implemented the New Lease Standard since January 1 2021.

(4) Description of retrospective adjustments in comparative data in prior periods due to initial application

of New Lease Standard in 2021

□ Applicable √ N/A

45. Others

None

204Luxshare Precision Industry Co. Ltd. Annual Report 2021

VI. Taxes

1. Major categories of taxes and tax rates

Tax category Taxation basis Tax rate

VAT payable is the output tax based on the

sales of goods and taxable labor income

Value added tax calculated pursuant to the tax law net of 13% 9% 6% 5% 3% 0%

the input tax that is allowed to be deducted

in the current period

Subject to the actual payment of VAT and

Urban maintenance and construction tax 7 % 5%

consumption tax

Enterprise income tax Subject to the taxable income amount 25% 20% 19% 17% 16.5% 15% 0%

Disclosure of taxpayers (if any) with different rates of enterprise income tax:

Taxpayer Rate of enterprise income tax

Luxshare Precision Industry Co. Ltd. 15

Xiexun Electronic (Ji’an) Co. Ltd. 15

ASAP TECHNOLOGY (JIANGXI) CO. LTD. 15

Lanto Electronic Limited. 15

Bozhou Lanto Electronic Limited. 15

HUZHOU JIUDING ELECTRONIC CO. LTD. 15

Luxshare Automation (Jiangsu) Ltd. 15

MERRY ELECTRONICS (SUZHOU) CO. LTD. 15

Luxshare Electronic Technology (Kunshan) Co. Ltd. 15

Yongxin County Boshuo Electronics Co. Ltd. 15

Chuzhou Luxshare Precision Industry Co. Ltd. 15

M&A MERRY ELECTRONICS (HUIZHOU) CO. LTD. 15

FUJIAN JK WIRING SYSTEMS CO. LTD. 15

Jiangxi Luxshare Intelligent Manufacture Co. Ltd. 15

Jiangxi ASAP Electronic Co. Ltd. 15

Kunshan-Luxshare RF Technology Co. Ltd. 15

Suining Luxshare Precision Industry Co. Ltd. 15

Baoding Luxshare Precision Industry Co. Ltd. 15

Luxshare Precision Industry (Shanxi) Co. Ltd. 15

Dongguan Xuntao Electronic Co. Ltd. 15

Kunshan Luxshare Precision Industry Co. Ltd. 15

205Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare iTech (Zhejiang) Co. Ltd. 15

Shenzhen Luxshare Acoustics Technology Ltd. 15

Enshi Luxshare Precision Industry Co. Ltd. 15

Luxshare Precision Limited Note 1

Luxshare Precision Technology Co. Ltd. 16.5

Taiwan Luxshare Precision Limited 20

ICT-LANTO LIMITED(HK) Note 1

Luxshare Standard Limited (HK) Note 1

Luxshare Technologies Limited Note 1

Luxshare-ICT (Japan) Note 2

Yunding Technology Co. Ltd. Note 1

Luxis Technology Limited Note 1

Luxshare Precision Investment Co. Ltd. Note 1

SPEED TECH CORP. 20

Luxshare-ICT (India) 25

Luxshare Liantao (India) Co. Ltd. 25

Luxshare ICT Inc. Note 3

Luxshare-ICT Europe Limited 19

Suk kunststofftechnik GmbH 15

Korea LuxshareICT Co. Ltd Note 4

Xuancheng Luxshare Precision Industry Co. Ltd. 15

LUXSHARE-ICT (VIETNAM) LIMITED. 20

LUXSHARE-ICT (VAN TRUNG) COMPANY LIMITED. 20

LUXSHARE-ICT (NGHE AN) LIMITED. 20

Caseteck Singapore PTE. LTD. 17

Other subsidiaries 25

2. Tax incentives

1. The Company was identified as a high-tech enterprise by Shenzhen Science and Technology Innovation

Commission Shenzhen Finance Committee and Shenzhen Tax Service State Taxation Administration on

December 23 2021 with the High-tech Enterprise Certificate No.GR202144203830 valid for three years.As provided for in the Notice by the Ministry of Finance and the State Administration of Taxation on

Preferential Policies for Enterprise Income Taxes Related to Enterprises’ Technological Innovation and

the Notice by the State Administration of Taxation on Issues Concerning the Implementation of Preferential

Enterprise Income Taxes for High-tech Enterprises the Company enjoys an enterprise income tax of 15%

for 2021.

206Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. The subsidiary Xiexun Electronic (Ji’an) Co. Ltd. (“Ji’an Xiexun”) was identified as a high-tech

enterprise by Science and Technology Department of Jiangxi Province Jiangxi Provincial Finance Bureau

and Jiangxi Provincial Tax Service State Taxation Administration on September 14 2020 with the

High-tech Enterprise Certificate No.GR202036001325 valid for three years. According to relevant

provisions of the national high-tech enterprise income tax preferential policies in China it enjoys an

enterprise income tax rate of 15% for 2021.

3. The subsidiary ASAP TECHNOLOGY (JIANGXI) CO. LTD. (“ASAP JIANGXI”) was identified as a

high-tech enterprise by Science and Technology Department of Jiangxi Province Jiangxi Provincial

Finance Bureau and Jiangxi Provincial Tax Service State Taxation Administration on September 16 2019

with the High-tech Enterprise Certificate No.GR201936000710 valid for three years. According to relevant

provisions of the national high-tech enterprise income tax preferential policies in China it enjoys an

enterprise income tax rate of 15% for 2021.

4. The subsidiary Lanto Electronic Limited. (“Lanto Kunshan”) was identified as a high-tech enterprise by

the Jiangsu Provincial Department of Science and Technology Jiangsu Provincial Department of Finance

and Jiangsu Provincial Tax Service State Taxation Administration on December 2 2020 with the

High-tech Enterprise Certificate No.GF202032003737 valid for three years. According to relevant

provisions of the national high-tech enterprise income tax preferential policies in China it enjoys an

enterprise income tax rate of 15% for 2021.

5. The sub-subsidiary Bozhou Lanto Electronic Limited. (“Bozhou Lanto”) was identified as a high-tech

enterprise by Anhui Provincial Department of Science and Technology Anhui Provincial Department of

Finance and Anhui Provincial Tax Service State Taxation Administration on September 18 2021 with the

High-tech Enterprise Certificate No.GR202134001185 valid for three years. According to relevant

provisions of the national high-tech enterprise income tax preferential policies in China it enjoys an

enterprise income tax rate of 15% for 2021.

6. The sub-subsidiary HUZHOU JIUDING ELECTRONIC CO. LTD. (“HUZHOU JIUDING”) was

identified as a high-tech enterprise by the Zhejiang Provincial Department of Science and Technology

Zhejiang Provincial Department of Finance Zhejiang Provincial Tax Service State Taxation

Administration and Local Taxation Bureau of Zhejiang Province on December 1 2020 with the High-tech

Enterprise Certificate No.GR202033002604 valid for three years. According to relevant provisions of the

national high-tech enterprise income tax preferential policies in China it enjoys an enterprise income tax

rate of 15% for 2021.

7. The subsidiary Luxshare Automation (Jiangsu) Ltd. (“Jiangsu Automation”) was identified as a

high-tech enterprise by Jiangsu Provincial Department of Science and Technology Jiangsu Provincial

Department of Finance and Jiangsu Provincial Tax Service State Taxation Administration on November

30 2021 with the High-tech Enterprise Certificate No.GR202132006272 valid for three years. According

to relevant provisions of the national high-tech enterprise income tax preferential policies in China it

enjoys an enterprise income tax rate of 15% for 2021.

8. The sub-subsidiary MERRY ELECTRONICS (SUZHOU) CO. LTD. (“MERRY SUZHOU”) was

identified as a high-tech enterprise by Jiangsu Provincial Department of Science and Technology Jiangsu

Provincial Department of Finance and Jiangsu Provincial Tax Service State Taxation Administration on

December 2 2020 with the High-tech Enterprise Certificate No.GR202032005557 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in

China it enjoys an enterprise income tax rate of 15% for 2021.

9. The subsidiary Luxshare Electronic Technology (Kunshan) Co. Ltd. (“Luxshare Electronic Kunshan”)

207Luxshare Precision Industry Co. Ltd. Annual Report 2021

was identified as a high-tech enterprise by Jiangsu Provincial Department of Science and Technology

Jiangsu Provincial Department of Finance and Jiangsu Provincial Tax Service State Taxation

Administration on November 30 2021 with the High-tech Enterprise Certificate No.GR202132006555

valid for three years. According to relevant provisions of the national high-tech enterprise income tax

preferential policies in China it enjoys an enterprise income tax rate of 15% for 2021.

10. The sub-subsidiary Yongxin County Boshuo Electronics Co. Ltd. (“Yongxin Boshuo”) was identified

as a high-tech enterprise by Jiangxi Provincial Department of Science and Technology Jiangxi Provincial

Department of Finance and Jiangxi Provincial Tax Service State Taxation Administration on December 2

2020 with the High-tech Enterprise Certificate No.GR202036001897 valid for three years. According to

relevant provisions of the national high-tech enterprise income tax preferential policies in China it enjoys

an enterprise income tax rate of 15% for 2021.

11. The subsidiary Chuzhou Luxshare Precision Industry Co. Ltd. (“Luxshare Chuzhou”) was identified

as a high-tech enterprise by Anhui Provincial Department of Science and Technology Anhui Provincial

Department of Finance and Anhui Provincial Tax Service State Taxation Administration on September 9

2019 with the High-tech Enterprise Certificate No.GR201934001733 valid for three years. According to

relevant provisions of the national high-tech enterprise income tax preferential policies in China it enjoys

an enterprise income tax rate of 15% for 2021.

12. The sub-subsidiary M&A MERRY ELECTRONICS (HUIZHOU) CO. LTD. (“M&A MERRYHUIZHOU”) was identified as a high-tech enterprise by Guangdong Province Department of Science and

Technology Guangdong Provincial Department of Finance and Guangdong Provincial Tax Service State

Taxation Administration on December 20 2021 with the High-tech Enterprise Certificate

No.GR202144005561 valid for three years. According to relevant provisions of the national high-tech

enterprise income tax preferential policies in China it enjoys an enterprise income tax rate of 15% for 2021.

13. The subsidiary FUJIAN JK WIRING SYSTEMS CO. LTD. (“FUJIAN JK”) was identified as a

high-tech enterprise by Fujian Provincial Department of Science and Technology Fujian Provincial

Department of Finance and Fujian Provincial Tax Service State Taxation Administration on December 1

2020 with the High-tech Enterprise Certificate No.GR202035000014 valid for three years. According to

relevant provisions of the national high-tech enterprise income tax preferential policies in China it enjoys

an enterprise income tax rate of 15% for 2021.

14. The subsidiary Jiangxi Luxshare Intelligent Manufacture Co. Ltd. (“Intelligent Manufacture Jiangxi”)

was identified as a high-tech enterprise by Jiangxi Provincial Department of Science and Technology

Jiangxi Provincial Department of Finance and Jiangxi Provincial Tax Service State Taxation

Administration on November 3 2021 with the High-tech Enterprise Certificate No.GR202136000345

valid for three years. According to relevant provisions of the national high-tech enterprise income tax

preferential policies in China it enjoys an enterprise income tax rate of 15% for 2021.

15. The sub-subsidiary Jiangxi ASAP Electronic Co. Ltd. (“Boshuo Electronics”) was identified as a

high-tech enterprise by Jiangxi Provincial Department of Science and Technology Jiangxi Provincial

Department of Finance and Jiangxi Provincial Tax Service State Taxation Administration on November 3

2021 with the High-tech Enterprise Certificate No.GR202136000645 valid for three years. According to

relevant provisions of the national high-tech enterprise income tax preferential policies in China it enjoys

an enterprise income tax rate of 15% for 2021.

16. The sub-subsidiary Kunshan-Luxshare RF Technology Co. Ltd. (“Kunshan RF”) was identified as a

high-tech enterprise by Jiangsu Provincial Department of Science and Technology Jiangsu Provincial

Department of Finance and Jiangsu Provincial Tax Service State Taxation Administration on November

208Luxshare Precision Industry Co. Ltd. Annual Report 2021

30 2021 with the High-tech Enterprise Certificate No.GR202132006790 valid for three years. According

to relevant provisions of the national high-tech enterprise income tax preferential policies in China it

enjoys an enterprise income tax rate of 15% for 2021.

17. The sub-subsidiary Suining Luxshare Precision Industry Co. Ltd. (“Suining Luxshare”) was

identified as a high-tech enterprise by Sichuan Provincial Department of Science and Technology Sichuan

Provincial Department of Finance and Sichuan Provincial Tax Service State Taxation Administration on

December 15 2021 with the High-tech Enterprise Certificate No.GR202151003570 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in

China it enjoys an enterprise income tax rate of 15% for 2021.

18. The sub-subsidiary Baoding Luxshare Precision Industry Co. Ltd. (“Baoding Luxshare”) was

identified as a high-tech enterprise by Hebei Provincial Department of Science and Technology Hebei

Provincial Finance Bureau and Hebei Provincial Tax Service State Taxation Administration on September

10 2019 with the High-tech Enterprise Certificate No.GR201913000851 valid for three years. According

to relevant provisions of the national high-tech enterprise income tax preferential policies in China it

enjoys an enterprise income tax rate of 15% for 2021.

19. The sub-subsidiary Luxshare Precision Industry (Shanxi) Co. Ltd. (“Shanxi Luxshare”) was

identified as a high-tech enterprise by Shanxi Science and Technology Department Shanxi Provincial

Department of Finance and Shanxi Provincial Tax Service State Taxation Administration on September

16 2019 with the High-tech Enterprise Certificate No.GR201914000049 valid for three years. According

to relevant provisions of the national high-tech enterprise income tax preferential policies in China it

enjoys an enterprise income tax rate of 15% for 2021.

20. The sub-subsidiary Dongguan Xuntao Electronic Co. Ltd. (“Dongguan Xuntao”) was identified as a

high-tech enterprise by the Department of Science and Technology of Guangdong Province Department of

Finance of Guangdong Province and Guangdong Provincial Tax Service State Taxation Administration

on December 2 2019 with the High-tech Enterprise Certificate No.GR201944005411 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in

China it enjoys an enterprise income tax rate of 15% for 2021.

21. The subsidiary Kunshan Luxshare Precision Industry Co. Ltd. (“Kunshan Luxshare”) was identified

as a high-tech enterprise by Jiangsu Provincial Department of Science and Technology Jiangsu Provincial

Department of Finance and Jiangsu Provincial Tax Service State Taxation Administration on December 2

2020 with the High-tech Enterprise Certificate No.GR202032002892 valid for three years. According to

relevant provisions of the national high-tech enterprise income tax preferential policies in China it enjoys

an enterprise income tax rate of 15% for 2021.

22. The subsidiary Luxshare iTech (Zhejiang) Co. Ltd. (“iTech Zhejiang”) was identified as a high-tech

enterprise by Zhejiang Provincial Department of Science and Technology Zhejiang Provincial Department

of Finance and Zhejiang Provincial Tax Service State Taxation Administration on December 1 2020 with

the High-tech Enterprise Certificate No.GR202033001987 valid for three years. According to relevant

provisions of the national high-tech enterprise income tax preferential policies in China it enjoys an

enterprise income tax rate of 15% for 2021.

23. The subsidiary Shenzhen Luxshare Acoustics Technology Ltd. (“Luxshare Acoustics”) was identified

as a high-tech enterprise by Shenzhen Science and Technology Innovation Commission Shenzhen Finance

Committee and Shenzhen Tax Service State Taxation Administration on December 11 2020 with the

High-tech Enterprise Certificate No.GR202044204060 valid for three years. According to relevant

provisions of the national high-tech enterprise income tax preferential policies in China it enjoys an

209Luxshare Precision Industry Co. Ltd. Annual Report 2021

enterprise income tax rate of 15% for 2021.

24. The subsidiary Enshi Luxshare Precision Industry Co. Ltd. (“Luxshare Enshi”) was qualified for tax

reduction in accordance with the Announcement on the Continuation of Preferential Enterprise Income Tax

Policies in the Western Region of China issued by the Ministry of Finance the State Taxation

Administration and the National Development and Reform Commission which provided that enterprise

income tax should be levied at a reduced rate of 15% on enterprises engaged in the encouraged industries in

the western region for the period from January 1 2021 to December 31 2030. Since it is located at Enshi

Tujia and Miao Autonomous Prefecture Hubei Province where enterprises can apply the preferential

enterprise income tax policies in the Western Region of China it enjoys an enterprise income tax rate of 15%

for 2021.

25. The sub-subsidiary Xuancheng Luxshare Precision Industry Co. Ltd. (“Luxshare Xuancheng”) was

identified as a high-tech enterprise by Anhui Provincial Department of Science and Technology Anhui

Provincial Department of Finance and Anhui Provincial Tax Service State Taxation Administration on

September 18 2021 with the High-tech Enterprise Certificate No.GR202134004975 valid for three years.According to relevant provisions of the national high-tech enterprise income tax preferential policies in

China it enjoys an enterprise income tax rate of 15% for 2021.

3. Others

Note 1. As per the tax law in Hong Kong Hong Kong adopts a territorial source principle of taxation under

which only profits which have a source in Hong Kong are taxable there while profits sourced elsewhere are

not subject to Hong Kong gain tax. Luxshare Technologies Limited Luxshare Standard Limited (HK)

ICT-LANTO LIMITED(HK) Luxshare Precision Limited Yunding Technology Co. Ltd. Luxis Technology

Limited and Luxshare Precision Investment Co. Ltd. are not required to pay income tax in Hong Kong.Note 2. Luxshare-ICT (Japan) is entitled to the graded tax rate for the capital amounting to not more than

JPY100 million. Corporate income tax (national tax): at 15% for the portion of taxable income within JPY8

million (inclusive) and at 23.2% for the portion in excess thereof. Local corporate income tax (national tax): at

10.3% of total corporate taxable income (national tax).

Note 3. The applicable tax rate of Luxshare ICT Inc is shown as follows:

Applicable tax rate

Income tax (federal) 21%

Local tax (state) 8.84%

Note 4. The applicable tax rate of Korea LuxshareICT Co. Ltd is shown as follows:

Total profits Corporate tax Local tax

Less than KRW200 million 10% 10% of corporate taxable

KWR200 million~KWR20 billion 20% income

KWR20 billion~KWR300 billion 22%

Above KWR300 billion 25%

210Luxshare Precision Industry Co. Ltd. Annual Report 2021

VII. Notes to items in consolidated financial statements

1. Cash and bank balances

In RMB

Item Closing balance Opening balance

Cash on hand 323716.04 9919560.76

Bank deposit 8921213012.04 10454884890.58

Other cash and bank balances 5283081458.35 63441314.59

Total 14204618186.43 10528245765.93

Including: Total amount of funds

2906518266.723867118934.25

deposited abroad

Other descriptions

Bank deposits include interest incurred from fixed-term deposits amounting to RMB9647499.97;

The breakdown of cash and bank balances which are restricted in use by mortgage pledge or freezing etc. and

which are deposited abroad with restricted repatriation is as follows:

Item Closing balance Balance at the end of last

year

Security deposit of bank acceptance 3080883997.37 10678394.18

bills

Credit deposits 5079240.43 13933745.95

Performance deposit 2515972.33 21291516.86

Term deposit or call deposit used for 2194602248.22 17537657.60

guarantee

Total 5283081458.35 63441314.59

2. Held-for-trading financial assets

In RMB

Item Closing balance Opening balance

Financial assets at fair value through profit

2107118105.043160064470.41

or loss

Including:

Derivative financial assets 115918643.05 305388419.95

Bank wealth management 1991199461.99 2854676050.46

Including:

Total 2107118105.04 3160064470.41

Other descriptions:

211Luxshare Precision Industry Co. Ltd. Annual Report 2021

3. Derivative financial assets

In RMB

Item Closing balance Opening balance

Other descriptions:

4. Notes receivable

(1) Categorized presentation of notes receivable

In RMB

Item Closing balance Opening balance

Bank acceptance bill 137325482.78 251899317.40

Commercial acceptance bill 170511151.86 9309284.10

Total 307836634.64 261208601.50

In RMB

Closing balance Opening balance

Book balance Bad-debt provision Book balance Bad-debt provision

Category Provision Book Provision Book

Proportio Proportio

Amount Amount proportio value Amount Amount proportio value

n n

n n

Including:

Notes receivable for

which bad-debt 307839 3078366 2612086 2612086

100.00%3247.780.00%100.00%0.000.00%

provision is made by 882.42 34.64 01.50 01.50

group

Including:

137325137325425189932518993

Bank acceptance bill 44.61% 0.00 0.00% 96.44% 0.00 0.00%

482.7882.7817.4017.40

Commercial 170514 1705111 9309284 9309284

55.39%3247.780.00%3.56%0.000.00%

acceptance bill 399.64 51.86 .10 .10

307839307836626120862612086

Total 100.00% 3247.78 0.00% 100.00% 0.00 0.00%

882.4234.6401.5001.50

Provision for bad debts made individually:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion Reason for provision

Provision for bad debts made by group:

In RMB

212Luxshare Precision Industry Co. Ltd. Annual Report 2021

Closing balance

Description

Book balance Bad-debt provision Provision proportion

Descriptions on basis for determining the group:

If the bad-debt provision of notes receivable is made according to the general model of expected credit loss please disclose the

relevant information of bad-debt provision with reference to the disclosure method of other receivables:

□ Applicable √ N/A

(2) Bad-debt provision made recovered or reversed in the current period

Bad-debt provision in the current period:

In RMB

Amount of change in the current period

Category Opening balance Recovery or Closing balance

Provision Write-off Others

reversal

Including significant amounts recovered or reversed from the current provision for bad debts:

□ Applicable √ N/A

(3) Notes receivable pledged by the Company at the end of the period

In RMB

Item Pledged amount at the end of the period

Bank acceptance bill 51933961.58

Total 51933961.58

(4) Notes receivable that have been endorsed or discounted by the Company at the end of the period and

have not yet matured on the balance sheet date

In RMB

Derecognized amount at the end of the Amount not derecognized at the end of the

Item

period period

Bank acceptance bill 478321177.81

Total 478321177.81

(5) Notes which the Company transfers into accounts receivable at the end of the period because of drawers’

non-performance

In RMB

Amount transferred to accounts receivable at the end of the

Item

period

Other descriptions

213Luxshare Precision Industry Co. Ltd. Annual Report 2021

(6) Notes receivable actually written off in the current period

In RMB

Item Write-off amount

Including the write-off of significant notes receivable:

In RMB

Whether the funds

Nature of notes Procedures for are generated by

Entity name Write-off amount Reasons for write-off

receivable write-off related-party

transactions

Instructions on the write-off of notes receivable:

5. Accounts receivable

(1) Categorized disclosure of accounts receivable

In RMB

Closing balance Opening balance

Book balance Bad-debt provision Book balance Bad-debt provision

Category Provision Book Provision

Proportio Proportio Book value

Amount Amount proportio value Amount Amount proportio

n n

n n

Accounts receivable

for which bad-debt 395497 395497 3765632 3752722

0.12%100.00%0.000.27%99.66%129099.70

provision is made 91.95 91.95 1.38 1.68

individually

Including:

Accounts receivable

316774

for which bad-debt 542275 3162318 1386265 2362668 13839026

13509.799.88%0.17%99.73%0.17%

provision is made by 63.53 5946.25 2924.95 4.18 240.77

8

group

Including:

316774

54227531623181386265236266813839026

Group by aging 13509.7 99.88% 0.17% 99.73% 0.17%

63.535946.252924.954.18240.77

8

317169

93777331623181390030611539013839155

Total 63301.7 100.00% 0.30% 100.00% 0.44%

55.485946.259246.335.86340.47

3

Provision for bad debts made individually:

In RMB

214Luxshare Precision Industry Co. Ltd. Annual Report 2021

Closing balance

Description

Book balance Bad-debt provision Provision proportion Reason for provision

Entity 1 30988680.56 30988680.56 100.00% Unrecoverable

Entity 2 3884072.10 3884072.10 100.00% Unrecoverable

Entity 3 4290486.28 4290486.28 100.00% Unrecoverable

Entity 4 241403.36 241403.36 100.00% Unrecoverable

Entity 5 145149.65 145149.65 100.00% Unrecoverable

Total 39549791.95 39549791.95 -- --

Provision for bad debts made individually:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion Reason for provision

Provision for bad debts made by group:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion

Undue 31337853591.16 16204622.15 0.05%

1 to 60 days overdue 274521348.60 13726067.48 5.00%

61 to 120 days overdue 34491417.46 10347425.22 30.00%

121 to180 days overdue 22644836.94 9057934.76 40.00%

181 to 365 days overdue 5783173.47 2891586.76 50.00%

1 to 2 years (excluding 1 year) 1192149.88 1072934.89 90.00%

Over 2 years 926992.27 926992.27 100.00%

Total 31677413509.78 54227563.53 --

Descriptions on basis for determining the group:

Please refer to Note V 10 Test and accounting treatment of impairment of financial assets.Provision for bad debts made by group:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion

Descriptions on basis for determining the group:

If the bad-debt provision for accounts receivable is made according to the general model of expected credit loss please refer to the

disclosure method of other receivables to disclose the relevant information of bad debt provision:

□ Applicable √ N/A

Disclosure by aging

In RMB

215Luxshare Precision Industry Co. Ltd. Annual Report 2021

Aging Book balance

Within 1 year (including 1 year) 31679730003.56

1 to 2 years 1192149.88

2 to 3 years 2377074.00

Over 3 years 33664074.29

3 to 4 years 2675393.73

4 to 5 years 30988680.56

Total 31716963301.73

(2) Bad-debt provision made recovered or reversed in the current period

Bad-debt provision in the current period:

In RMB

Amount of change in the current period

Category Opening balance Recovery or Closing balance

Provision Write-off Others

reversal

Accounts

61153905.8624825699.057797750.5793777355.48

receivable

Total 61153905.86 24825699.05 7797750.57 93777355.48

Including significant amounts recovered or reversed from the current provision for bad debts:

In RMB

Entity name Amount recovered or reversed Recovery method

(3) Accounts receivable actually written off in the current period

In RMB

Item Write-off amount

Including the write-off of significant accounts receivable:

In RMB

Whether the funds

Nature of accounts Procedures for are generated by

Entity name Write-off amount Reasons for write-off

receivable write-off related-party

transactions

Descriptions on the write-off of accounts receivable:

(4) Accounts receivable with top five closing balance - by debtor

In RMB

216Luxshare Precision Industry Co. Ltd. Annual Report 2021

Closing balance of accounts Proportion in total closing Closing balance of bad-debt

Entity name

receivable balance of accounts receivable provision

Entity 1 17873506938.34 56.35% 8936753.47

Entity 2 1811368107.96 5.71% 905684.05

Entity 3 1683558136.61 5.31% 841779.07

Entity 4 1049864564.03 3.31% 524932.28

Entity 5 837357956.82 2.64% 418678.98

Total 23255655703.76 73.32%

(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing involvement

Other descriptions:

(6) Accounts receivable derecognized due to transfer of financial assets

Item Amount of Ways of financial assets Gains or losses

derecognition transfer related to

derecognition

Entity 1 14077187202.39 Sold -30110522.87

Total 14077187202.39 -30110522.87

In 2021 the Company sold the accounts receivable of specific customers to banks and financial

institutions. As of December 31 2021 the accounts receivable derecognized for the specific customer’s

amount to RMB14077187202.39.

6. Receivables financing

In RMB

Item Closing balance Opening balance

Increase and decrease as well as fair value changes of receivables financing in the current period

□ Applicable √ N/A

If the provision for impairment of receivables financing is made according to the general model of expected credit loss please refer

to the disclosure method of other receivables to disclose the relevant information of impairment provision:

□ Applicable √ N/A

Other descriptions:

7. Prepayments

(1) Presentation of prepayments by aging

In RMB

217Luxshare Precision Industry Co. Ltd. Annual Report 2021

Closing balance Opening balance

Aging

Amount Proportion Amount Proportion

Within 1 year 402980282.50 99.25% 177457391.32 99.05%

1 to 2 years 2296128.67 0.57% 1264401.36 0.70%

2 to 3 years 531677.00 0.13% 172178.32 0.10%

Over 3 years 208404.44 0.05% 266650.29 0.15%

Total 406016492.61 -- 179160621.29 --

Reasons for untimely settlement of prepayments in significant amount with aging over 1 year:

(2) Prepayments with top five closing balance - by prepayment beneficiary

Prepayment receiver Closing balance Proportion in total closing balance of

prepayments (%)

Entity 1 58847535.86 14.49

Entity 2 42715596.30 10.52

Entity 3 28873956.48 7.11

Entity 4 27066174.78 6.67

Entity 5 26857636.25 6.61

Total 184360899.67 45.40

Other descriptions:

8. Other receivables

In RMB

Item Closing balance Opening balance

Other receivables 598456702.88 407990780.79

Total 598456702.88 407990780.79

(1) Interest receivable

1) Classification of interest receivable

In RMB

Item Closing balance Opening balance

2) Significant overdue interest

In RMB

218Luxshare Precision Industry Co. Ltd. Annual Report 2021

Whether there is

Borrower Closing balance Overdue time Reasons for delay impairment and its

judgment basis

Other descriptions:

3) Bad-debt provision

□ Applicable √ N/A

(2) Dividends receivable

1 ) Classification of dividends receivable

In RMB

Item (or Investee) Closing balance Opening balance

2) Significant dividends receivable with aging over 1 year

In RMB

Whether there is

Reasons for

Item (or Investee) Closing balance Aging impairment and its

non-recovery

judgment basis

3 ) Bad-debt provision

□ Applicable √ N/A

Other descriptions:

(3) Other receivables

1) Classification of other receivables by nature

In RMB

Nature of receivables Closing book balance Opening book balance

Reserve fund 731313.00 2150958.86

Security deposit 137059171.76 82843142.41

Export tax rebate receivable 187123564.48 52519780.76

Disbursement 56222486.93 61811236.98

Transfer funds of fixed assets 1727939.28 15068375.17

Insurance indemnity 59200000.00

Others 160733783.92 195784468.71

219Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 602798259.37 410177962.89

2) Bad-debt provision

In RMB

Stage I Stage II Stage III

Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total

12-month ECL

credit impaired) impaired)

Balance as at January 1

2187182.102187182.10

2021

Balance as at January 1

2021 in the current —— —— —— ——

period

Provision in the current

2250179.372250179.37

period

Reversal in the current

203621.51203621.51

period

Other changes 107816.53 107816.53

Balance as at December

4341556.494341556.49

312021

Changes in book balance of provision for loss with significant changes in the current period

□ Applicable √ N/A

Disclosure by aging

In RMB

Aging Book balance

Within 1 year (including 1 year) 602154849.94

1 to 2 years 23540.43

2 to 3 years 467449.00

Over 3 years 152420.00

Over 5 years 152420.00

Total 602798259.37

3) Bad-debt provision made recovered or reversed in the current period

Bad-debt provision in the current period:

In RMB

Opening Amount of change in the current period

Category Closing balance

balance Provision Recovery or Write-off Others

220Luxshare Precision Industry Co. Ltd. Annual Report 2021

reversal

Group by aging 2187182.10 2250179.37 203621.51 0.00 107816.53 4341556.49

Total 2187182.10 2250179.37 203621.51 0.00 107816.53 4341556.49

Including significant amounts reversed or recovered from the current provision for bad debts:

In RMB

Entity name Amount reserved or recovered Recovery method

4) Other receivables actually written off in the current period

In RMB

Item Write-off amount

Including the write-off of significant other receivables:

In RMB

Whether the funds

Nature of other Procedures for are generated by

Entity name Write-off amount Reasons for write-off

receivables write-off related-party

transactions

Descriptions on the write-off of other receivables:

5) Other receivables with top five closing balance - by debtor

In RMB

Proportion in total

Nature of Closing balance of

Entity name Closing balance Aging closing balance of

receivables bad-debt provision

other receivables

Entity 1 Export tax rebate 187123564.48 Undue 31.04% 935617.82

Entity 2 Equity transfer funds 142500000.00 Undue 23.64% 712500.00

Entity 3 Insurance indemnity 59200000.00 Undue 9.82% 296000.00

Entity 4 Security deposit 32716869.40 Undue 5.43% 163584.35

Entity 5 Borrowings 30157083.33 Undue 5.00% 150785.42

Total -- 451697517.21 -- 74.93% 2258487.59

6) Receivables involving government grants

In RMB

Name of government Aging at the end of the Estimated time amount

Entity name Closing balance

grant period and basis of collection

221Luxshare Precision Industry Co. Ltd. Annual Report 2021

7) Other receivables derecognized due to transfer of financial assets

None

8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement

None

Other descriptions:

9. Inventories

Whether the Company need to comply with the disclosure requirements for the real estate industry

No

(1) Classification of inventories

In RMB

Closing Balance Opening Balance

Provision for Provision for

decline in value decline in value

Item of inventories or of inventories or

Book balance provision for Book value Book balance provision for Book value

impairment of impairment of

contract contract

performance cost performance cost

Raw material 6531836331.00 161394242.96 6370442088.04 3139313968.65 30816233.39 3108497735.26

Products in

3386085829.0550039777.323336046051.732047580192.4931348190.652016232001.84

process

10741507248.210602096163.4

Goods on hand 139411084.80 8023281968.11 67217791.93 7956064176.18

33

Revolving

215566686.58116734.00215449952.5857309755.002374.5657307380.44

materials

Goods sold 78396684.90 243458.90 78153226.00 29388057.62 160985.17 29227072.45

Materials in

241533661.04241533661.0442757516.8842757516.88

transit

Work in process -

60796035.943761445.6157034590.33923498.10923498.10

outsourced

21255722476.720900755733.113340554956.813211009381.1

Total 354966743.59 129545575.70

4555

222Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) Provision for decline in value of inventories and provision for impairment of contract performance cost

In RMB

Increase in the current period Decrease in the current period

Item Opening Balance Reversal or write Closing Balance

Provision Other Other

off

Raw material 30816233.39 86466854.63 152728576.57 107883862.28 733559.35 161394242.96

Products in

31348190.6519900825.955619959.526353938.25475260.5550039777.32

process

Goods on hand 67217791.93 50877290.59 282273365.01 260129781.13 827581.60 139411084.80

Revolving

2374.56120251.955892.51116734.00

materials

Goods sold 160985.17 82473.73 1672570.07 1672570.07 243458.90

Materials in

transit

Work in process -

1444894.2611146722.098830170.743761445.61

outsourced

Total 129545575.70 158892591.11 453441193.26 384876214.98 2036401.50 354966743.59

Other items with amount increased in current period are included due to changes in the scope of consolidation.

(3) Descriptions on closing balance of inventories containing capitalized amount of borrowing costs

(4) Descriptions on current amortization amount of contract performance costs

10. Contract assets

In RMB

Closing Balance Opening Balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

The amount of and reasons for significant changes in the book value of contract assets in the current period:

In RMB

Item Change amount Reason for change

If the bad-debt provision of contract assets is made according to the general model of expected credit loss please refer to the

disclosure method of other receivables to disclose the relevant information of bad debt provision:

□ Applicable √ N/A

Provision for impairment of contract assets in the current period

In RMB

Item Provision in the current Reversal Write off/cancellation Reason

223Luxshare Precision Industry Co. Ltd. Annual Report 2021

period

Other descriptions:

11. Held-for-sale assets

In RMB

Closing book Provision for Closing book Estimated Estimated

Item Fair value

balance impairment value disposal costs disposal time

Other descriptions:

12. Current portion of non-current assets

In RMB

Item Closing Balance Opening Balance

Significant debt investments/other debt investments

In RMB

Closing Balance Opening Balance

Debt item Effective Maturity Effective Maturity

Face value Coupon rate Face value Coupon rate

interest rate date interest rate date

Other descriptions:

13. Other current assets

In RMB

Item Closing Balance Opening Balance

Input tax to be deducted 2049189830.82 1540111512.16

Income tax prepaid 108461037.04 257446420.71

Other 3404952.87 6927712.62

Total 2161055820.73 1804485645.49

Other descriptions:

14. Debt investments

In RMB

Closing Balance Opening Balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Principal 1403057083.33 1403057083.33

Interest 61222123.30 61222123.30

224Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 1464279206.63 1464279206.63

Significant debt investments

In RMB

Closing Balance Opening Balance

Debt item Effective Maturity Effective Maturity

Face value Coupon rate Face value Coupon rate

interest rate date interest rate date

Provision for impairment

In RMB

Stage I Stage II Stage III

Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total

12 -month ECL

credit impaired) unimpaired)

Balance as at January 1

2021 in the current —— —— —— ——

period

Changes in book balance of provision for loss with significant changes in the current period

□ Applicable √ N/A

Other descriptions:

15. Other debt investments

In RMB

Cumulative

provision for

Changes in

Cumulative loss

Opening Accrued fair value in Closing

Item Cost changes in recognized in Remarks

Balance interest the current Balance

fair value other

period

comprehensi

ve income

Other significant debt investments

In RMB

Closing Balance Opening Balance

Other debt item Effective Maturity Effective Maturity

Face value Coupon rate Face value Coupon rate

interest rate date interest rate date

Provision for impairment

In RMB

Stage I Stage II Stage III

Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total

12 -month ECL

credit impaired) unimpaired)

Balance as at January 1 —— —— —— ——

225Luxshare Precision Industry Co. Ltd. Annual Report 2021

2021 in the current

period

Changes in book balance of provision for loss with significant changes in the current period

□ Applicable √ N/A

Other descriptions:

16. Long-term receivables

(1) Long-term receivables

In RMB

Closing Balance Opening Balance

Discount rate

Item Bad-debt Bad-debt

Book balance Book value Book balance Book value range

provision provision

Impairment of bad-debt provision

In RMB

Stage I Stage II Stage III

Bad-debt provision Lifetime ECL (without Lifetime ECL (with credit Total

12 -month ECL

credit impaired) unimpaired)

Balance as at January 1

2021 in the current —— —— —— ——

period

Changes in book balance of provision for loss with significant changes in the current period

□ Applicable √ N/A

(2) Long-term receivables derecognized due to transfer of financial assets

(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing

involvement

Other descriptions

17. Long-term equity investments

In RMB

Increase and decrease in the current period Closing

Opening Investme Other Closing balance

balance Additiona Declared Provision

Investee Reduced nt profit comprehe Other

balance of

(book l cash for investmen or loss nsive changes Other (book provision

value) investmen dividends impairmet recognize income in equity value) for

t or profits nt

d under adjustmen impairme

226Luxshare Precision Industry Co. Ltd. Annual Report 2021

equity t nt

method

I. Joint ventures

Riyimao

86236932767243351380.9-723892-801598.1062202

Industrial

9.014.3061.000035.27

Co. Ltd.Xuande

-168137.168831.7

Energy -693.88

853

Co. Ltd.

8623693-168137.2784126351380.9-723892-802291.1062202

Subtotal

9.01856.0361.008835.27

II. Associates

2266350-394382.2226912

Siliconch

6.55184.37

Zhuhai

Kinwong

2375973-40169723358033437260

Flexible

05.229.4525.778.46

Circuit

Co. Ltd.Caldigit

5923458-592345

Holding

0.5680.56

Limited

Assem

Technolo 5379591 -393451 -24091.5 2079272 -424304. 5149228

gy Co. 8.44 0.48 8 .75 66 4.47

Ltd.Taihan

97337321641552-921068579916.8-745194

Precision

7.66.6456.4450.71

Co. Ltd.Changshu

Lizhen

Smart

Technolo

gy 6000000 2768124 -285408 5742272

Partnershi 00.00 .91 95.02 29.89

p

(Limited

Partnershi

p)

Vietnam 8604736 3818803 1242353

Meilv 4.31 1.32 95.63

227Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare

Co. Ltd.Lihao

Optoelect

ronics

4900000-1046764795323

Technolo

0.000.919.09

gy

(Nantong)

Co. Ltd.

115667651768121896055-921309-565753-745194-424304.10537573437260

Subtotal

002.744.91.9248.0290.960.7166599.228.46

12429125176812-168137.2973732-917795-565753-146908-12265911599773437260

Total

941.754.91851.9567.0690.9661.716.54834.498.46

Other descriptions

18. Other investments in equity instruments

In RMB

Item Closing Balance Opening Balance

Beijing Xloong Technologies Co. Ltd. 10979152.89 10977900.79

Beijing Wiparking Technology Co. Ltd. 9817127.78 9150443.30

Jingtuo Liyin Technology (Beijing) Co.

3214196.573724908.43

Ltd.Zhejiang Tony Electronic Co. Ltd 210278829.12 114221319.04

Xuande Energy Co. Ltd. 749467.66

Asia Pacific Emerging Industry Investment

937374.40

Co. Ltd.Total 235976148.42 138074571.56

Itemized disclosure of non-trading equity instrument investments in the current period

In RMB

Reasons for being

designated as Reasons for

Amount of other

equity carry-over of

comprehensive

Recognized Cumulative instruments at fair other

Item Cumulative gains income carried

dividend income losses value through comprehensive

over to retained

other income to

earnings

comprehensive retained earnings

income

Beijing Xloong Not for

979152.89

Technologies Co. short-term trading

228Luxshare Precision Industry Co. Ltd. Annual Report 2021

Ltd. purposes

Beijing

Not for

Wiparking

182872.22 short-term trading

Technology Co.purposes

Ltd.Jingtuo Liyin

Not for

Technology

214196.57 short-term trading

(Beijing) Co.

purposes

Ltd.Zhejiang Tony Not for

Electronic Co. 190911536.60 short-term trading

Ltd purposes

Not for

Xuande Energy

-280153.40 short-term trading

Co. Ltd.purposes

Asia

Pacific Emerging Not for

Industry 205568.60 short-term trading

Investment Co. purposes

Ltd.Other descriptions:

19. Other non-current financial assets

In RMB

Item Closing Balance Opening Balance

Financial assets at fair value through profit

5700000.00

or loss

Total 5700000.00

Other descriptions:

20. Investment properties

(1) Investment properties measured at cost

√ Applicable □ N/A

In RMB

Item Buildings Land use right Construction in progress Total

I. Original carrying

amount

229Luxshare Precision Industry Co. Ltd. Annual Report 2021

1. Opening Balance 46852148.41 13982835.02 60834983.43

2. Increase in the current

9161172.494581115.1313742287.62

period

(1) Purchase 2612903.29 3836878.53 6449781.82

(2) Transfer from

inventories\fixed

assets\construction in

progress

(3) Increase in business

6548269.20744236.607292505.80

combination

3. Decrease in the current

272997.06136794.66409791.72

period

(1) Disposal

(2) Other transfer out 272997.06 136794.66 409791.72

4. Closing Balance 55740323.84 18427155.49 74167479.33

II. Accumulated

depreciation and

amortization

1. Opening Balance 13242873.19 13242873.19

2. Increase in the current

1950658.981950658.98

period

(1) Provision or

1950658.981950658.98

amortization

3. Decrease in the current

26743.5626743.56

period

(1) Disposal

(2) Other transfer out 26743.56 26743.56

4. Closing Balance 15166788.61 15166788.61

III. Provision for

impairment

1. Opening Balance

2. Increase in the current

period

230Luxshare Precision Industry Co. Ltd. Annual Report 2021

(1) Provision

3. Decrease in the current

period

(1) Disposal

(2) Other transfer out

4. Closing Balance

IV. Book value

1. Closing balance 40573535.23 18427155.49 59000690.72

2. Opening balance 33609275.22 13982835.02 47592110.24

(2) Investment properties measured at fair value

□ Applicable √ N/A

(3) Investment properties without title certificate

In RMB

Reasons for not obtaining the title

Item Book value

certificate

Other descriptions

21. Fixed assets

In RMB

Item Closing Balance Opening Balance

Fixed assets 34113259322.43 19761012854.95

Total 34113259322.43 19761012854.95

(1) Fixed assets

In RMB

Auxiliary Transportati

Office Machinery Computer Other Mould

Item Buildings production on Total

equipment equipment equipment equipment equipment

equipment equipment

I. Original

carrying

amount

231Luxshare Precision Industry Co. Ltd. Annual Report 2021

1. Opening 70216310 196559557 10705689 150733539 18160820 48183202. 27805243 22236617 24943065

Balance 11.34 .77 574.89 .07 01.53 58 78.64 52.60 018.42

2. Increase

in the 42106172 134276736 13483629 69759886. 735713540 23841192. 36277567 17013516 23986946

current 81.35 .93 986.60 11 .83 97 07.05 05.44 937.28

period

(1)84849562395408185.4482317063646469.4900348495639317.9190931181526140994209942

Purchase .75 92 06.98 07 .59 5 28.89 78.50 60.65

(2) Transfer

in from 10154458 18959275. 38248323 245678691 5590750.5 374043824 175210626 56597806

19299.11

construction 21.50 77 43.29 .24 7 .58 .94 33.00

in progress

(3) Increase

2346675819909275.517648066094117.912611124.1344401089061720

in business

36.102436.3334553.5843.63

combination

3. Decrease

in the 183563354 16041983. 10450806 4486020.1 113623105 4881952.0 147000690 80147890. 15948256

current .25 35 32.16 5 .34 7 .95 26 28.53

period

(1) Disposal 147385692 15781389. 10341529 4340807.8 110596617 4573965.4 89625488. 71765211. 14782221

or scrap .77 50 75.08 6 .42 6 57 16 47.82

(2)

Decrease in 6467188.7 2646365.9 1227998.2 10444630.

8414.3894663.34

business 7 7 0 66

combination

36177661.4460468.356147204.8382679.1106158850

(3) Other 252179.47 50548.95 380121.95 307986.61

481180.05

4. Closing 11048684 314794311 23144238 216007405 24381724 67142443. 62612803 38448654 47335186

Balance 938.44 .35 929.33 .03 37.02 48 94.74 67.78 327.17

II.Accumulate

d

depreciation

1. Opening 956382716 87077656. 19268572 55540034. 551124881 24092002. 773123648 730494340 51046924

Balance .80 22 12.94 17 .71 82 .53 .93 94.12

2. Increase

in the 809962790 44930376. 47706584 32000746. 344766449 14631298. 15622671 621246795 82004640

current .91 96 83.64 39 .55 14 45.26 .68 86.53

period

232Luxshare Precision Industry Co. Ltd. Annual Report 2021

(1)47652702635160543.2404291932000746.3447664497866008.890034325162124679548222027

Provision .41 21 73.33 39 .55 2 .34 .68 94.73

(2) Increase

3334357649769833.7236636656765289.366192389333782612

in business.50510.312.9291.80

combination

3. Decrease

in the 33731526. 15133239. 248884994 2040574.1 55876380. 3351196.8 59054011. 19273245. 437345170

current 87 52 .67 9 80 1 42 81 .09

period

(1) Disposal 33483168. 11496141. 246661656 1984684.7 45526991. 3113686.5 58493166. 17065234. 417824730

or scrap 89 08 .77 4 42 4 50 25 .19

(2)

Decrease in 1200101.6 2282695.8

3927.9234027.55644432.20400206.50

business 5 2

combination

3633170.51023236.29704957.12208011.517237744.

(3) Other 248357.98 21861.90 237510.27 160638.42

258608

4. Closing 17326139 116874793 64486307 85500206. 840014950 35372104. 22763367 13324678 12867811

Balance 80.84 .66 01.91 37 .46 15 82.37 90.80 410.56

III.Provision

for

impairment

1. Opening 1806681.3 43458498. 2563440.1 5084008.5 24373349. 77359669.

31156.2942534.87

Balance 2 43 1 7 76 35

2. Increase

in the 63256923. 254592907 20998644. 338859127

10651.74

current 55 .72 91 .92

period

(1)3887092.23897744.0

10651.74

Provision 7 1

(2) Increase

63256923.25070581520998644.334961383

in business

55.4591.91

combination

3. Decrease

in the 48775955. 11667224. 1592535.1 62103203.

67487.84

current 68 46 1 09

period

233Luxshare Precision Industry Co. Ltd. Annual Report 2021

(1) Disposal 48409234. 11667224. 1592535.1 61736482.

67487.84

or scrap 98 46 1 39

(2)

Decrease in

366720.70366720.70

business

combination

4. Closing 63256923. 1806681.3 249275450 2495952.2 14415429. 22780814. 354115594

41808.0342534.87

Balance 55 2 .47 7 02 65 .18

IV. Book

value

1. Closing 92528140 196112836 16446332 130465390 15956615 31727804. 39705281 24896167 34113259

balance 34.05 .37 776.95 .63 34.29 46 83.35 62.33 322.43

2. Opening 60652482 107675220 87353738 95162348. 12623936 24048664. 20023167 14687940 19761012

balance 94.54 .23 63.52 61 79.71 89 21.54 61.91 854.95

(2) Temporarily idle fixed assets

In RMB

Original carrying Accumulated Provision for

Item Book value Remarks

amount depreciation impairment

(3) Fixed assets leased out through operating lease

In RMB

Item Closing book value

(4) Fixed assets without title certificate

In RMB

Reasons for not obtaining the title

Item Book value

certificate

Workshop office and dormitory buildings of

9150637.64 Note 1

Fujian JK

Changshu Luxshare Factory and Auxiliary

404639526.31 Newly built;the certificate is in process

Building Project

New Dormitory of Zhejiang Intelligent

129832130.87 Newly built;the certificate is in process

Manufacture

Cadre Training Center of Meite Technology

1265419.65 Newly built;the certificate is in process

(Suzhou) Co. Ltd.

234Luxshare Precision Industry Co. Ltd. Annual Report 2021

Plant and Dormitory for Jiangxi Intelligent

592830470.14 Newly built;the certificate is in process

Manufacture

Luxshare Dongguan factory 65691767.40 Newly built;the certificate is in process

Phase II plant of Ri Shan Zhejiang 743471969.86 Newly built;the certificate is in process

New plant of Rikai Yancheng 44378742.39 Newly built;the certificate is in process

Other descriptions

Note 1: The land occupied by the staff dormitory is in nature an allotted land the use right of which was

acquired by the Company by means of transfer through agreement in line with relevant regulations at that

time.The property title formed based on the allotted land use right is not allowed to be transferred unless

the allocated land use right is converted to paid land use right.However the existing land use right cannot

be transferred by agreement as a result of which the property title to the staff dormitory building has not

been transferred to Fujian JK.

(5) Disposal of fixed assets

In RMB

Item Closing Balance Opening Balance

Other descriptions

22. Construction in progress

In RMB

Item Closing Balance Opening Balance

Construction in progress 3685336499.02 1596064894.58

Total 3685336499.02 1596064894.58

(1) Construction in progress

In RMB

Closing Balance Opening Balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Workshop

2131800600.482131800600.481311923496.511311923496.51

construction

Equipment

installation 1326553134.57 1326553134.57 145475258.95 145475258.95

engineering

Mould

97260914.5497260914.544759515.634759515.63

improvement

Other 129721849.43 129721849.43 133906623.49 133906623.49

235Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 3685336499.02 3685336499.02 1596064894.58 1596064894.58

(2) Changes in significant constructions in progress for the current period

In RMB

Amount Proporti Includin

Amount

transferr on of g:

Other of

Increase ed to accumul Amount Current

decrease accumul

Opening in the fixed Closing ated Project of interest Source

Item Budget in the ated

Balance current assets in Balance project progress current capitaliz of funds

current capitaliz

period the investme capitaliz ation rate

period ed

current nt in ed

interest

period budget interest

Changsh

u

Luxshare

147178364175971284133546

worksho 90.74% 95.00% Other

7728.51573.69528.000101.69

p

construct

ion

Donggua

n

Luxshare

100000727012727012

worksho 100.00% 100.00% Other

0000.0077.8577.85

p

construct

ion

Worksho 120000 279843 673780 496213 457410

51.21% 51.21% Other

p Project 0000.00 970.61 606.06 912.86 663.81

Intellige

nt

Manufac

ture

108266895437895437

Jiangxi 100.00% 100.00% Other

5773.1291.5391.53

worksho

p

construct

ion

Yunzhon

g phase I 170000 281700 278100 559800

98.21% 98.21% Other

and 0000.00 00.00 00.00 00.00

phase II

236Luxshare Precision Industry Co. Ltd. Annual Report 2021

worksho

p

construct

ion

Yi’an

project 660786 361487 114887 332219 230982 141845

88.00% 88.00% Other

construct 440.65 742.70 066.47 152.38 5.84 830.95

ion

Electroni

c 605805 487150 201831 285318

80.41% 80.41% Other

technolo 585.08 275.45 797.57 477.88

gy plant

Equipme

nt

installati

on 339310 339310 332784 652517

98.08% 98.08% Other

project 171.16 171.16 992.17 8.99

of

Luxshare

Chuzhou

Equipme

nt

installati

on

622847164497143003214933

project 23.96% 26.41% Other

5376.160920.297362.74557.55

of

Luxshare

Yanchen

g

Equipme

nt

installati

670445670445670445

on 100.00% 100.00% Other

653.29653.29653.29

project

of Rida

Rugao

Equipme

nt

installati 847976 817725 729137 885877

78.86% 96.43% Other

on 554.29 365.52 652.00 13.52

project

of Ri

237Luxshare Precision Industry Co. Ltd. Annual Report 2021

Shan

Jiashan

158072

119592574736435491230982258606

Total 53282.2 -- -- --

2356.384586.245592.395.841524.39

6

(3) Provision for impairment of construction in progress for the current period

In RMB

Item Current provision amount Reasons for provision

Other descriptions

(4) Engineering materials

In RMB

Closing Balance Opening Balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Other descriptions:

23. Bearer biological assets

(1) Bearer biological assets measured at cost

□ Applicable √ N/A

(2) Bearer biological assets measured at fair value

□ Applicable √ N/A

24. Oil and gas assets

□ Applicable √ N/A

25. Right-of-use assets

In RMB

Transportation

Item Buildings Machinery equipment Total

equipment

I. Original carrying

amount

1. Opening Balance 147495370.17 1693632.15 149189002.32

238Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Increase in the current

375605775.9416045204.08437601.68392088581.70

period

(1) New leases 192804650.78 4751216.27 125220.28 197681087.33

(2) Increase in business

182801125.1611293987.81312381.40194407494.37

combination

(3) Adjustment due to

remeasurement

(4) Other

3. Decrease in the current

1218890.206183682.28295576.807698149.28

period

(1) Transferred to fixed

999517.816161993.79295576.807457088.40

assets

(2) Decrease in business

combination

(3) Disposal 219372.39 21688.49 241060.88

4. Closing Balance 521882255.91 11555153.95 142024.88 533579434.74

II. Accumulated

depreciation

1. Opening Balance

2. Increase in the current

101776124.4913018450.8444631.18114839206.51

period

(1) Provision 93483680.99 12465970.48 105949651.47

(2) Increase in business

5325678.85552480.365878159.21

combination

(3) Other 2966764.65 44631.18 3011395.83

3. Decrease in the current

14030.316257283.746271314.05

period

(1) Disposal 3396153.69 3396153.69

(2) Decrease in business

combination

(3) Other 14030.31 2861130.05 2875160.36

4. Closing Balance 101762094.18 6761167.10 44631.18 108567892.46

III. Provision for

impairment

1. Opening Balance

2. Increase in the current

period

239Luxshare Precision Industry Co. Ltd. Annual Report 2021

(1) Provision

3. Decrease in the current

period

(1) Disposal

4. Closing Balance

IV. Book value

1. Closing balance 420120161.73 4793986.85 97393.70 425011542.28

2. Opening balance 147495370.17 1693632.15 149189002.32

Other descriptions:

26. Intangible assets

(1) Intangible assets

In RMB

Non-patent

Item Land use right Patent right Software Other Total

technology

I. Original

carrying amount

1. Opening

1178602217.69928068.1386906922.50126554925.9542037843.001435029977.27

Balance

2. Increase in the

871020331.524632385.9037393821.51167731293.0366261416.791147039248.75

current period

(1) Purchase 373045722.98 4632385.90 4708582.09 89630554.91 472017245.88

(2) Internal R&D

(3) Increase in

business 497974608.54 32685239.42 77611225.76 66261416.79 674532490.51

combination

(4) Other 489512.36 489512.36

3. Decrease in the

12385200.55422081.539248632.6713876275.97344557.9536276748.67

current period

(1) Disposal 8507623.27 398726.60 8665391.95 13759962.53 384.06 31332088.41

(2) Decrease in

business 50570.88 50570.88

combination

(3) Other 3877577.28 23354.93 583240.72 65742.56 344173.89 4894089.38

240Luxshare Precision Industry Co. Ltd. Annual Report 2021

4. Closing

2037237348.665138372.50115052111.34280409943.01107954701.842545792477.35

Balance

II. Accumulated

amortization

1. Opening

87448877.55598750.6147718654.0828335659.125766826.26169868767.62

Balance

2. Increase in the

73206682.74252255.394829593.6394125874.39474841.65172889247.80

current period

(1) Provision 51286373.91 252255.39 4829593.63 62967122.44 474841.65 119810187.02

(2) Increase in

business 21920308.83 31158751.95 53079060.78

combination

(3) Other

3. Decrease in the

76189.85419185.567727670.5511679882.6147638.8119950567.38

current period

(1) Disposal 398665.62 7405326.81 11610874.38 384.06 19415250.87

(2) Decrease in

business 32543.28 32543.28

combination

(3) Other 76189.85 20519.94 322343.74 36464.95 47254.75 502773.23

4. Closing

160579370.44431820.4444820577.16110781650.906194029.10322807448.04

Balance

III. Provision for

impairment

1. Opening

Balance

2. Increase in the

current period

(1) Provision

3. Decrease in the

current period

(1) Disposal

4. Closing

Balance

IV. Book value

1. Closing 1876657978.22 4706552.06 70231534.18 169628292.11 101760672.74 2222985029.31

241Luxshare Precision Industry Co. Ltd. Annual Report 2021

balance

2. Opening

1091153340.14329317.5239188268.4298219266.8336271016.741265161209.65

balance

The proportion of intangible assets formed through internal R&D in the balance of intangible assets at the end of this period.

(2) Land use right without title certificate

In RMB

Reasons for not obtaining the title

Item Book value

certificate

Other descriptions:

27. Development expenditure

In RMB

Increase in the current period Decrease in the current period

Opening

Item Internal Recognized Converted to

Closing

Balance development Other as intangible current profit Balance

expenditure assets or loss

Total

Other descriptions

28. Goodwill

(1) Original carrying amount of goodwill

In RMB

Increase Decrease

Investee name or

event forming Opening Balance Formed by Closing Balance

goodwill business Other Disposal Other

combination

ASAP

Technology

42325745.8542325745.85

(Jiangxi) Co.Ltd.Lanto Electronic

376682429.24376682429.24

Limited

Bozhou Lanto

9564372.619564372.61

Electronic

242Luxshare Precision Industry Co. Ltd. Annual Report 2021

Limited

M&A of

KERTONG 53174339.31 53174339.31

goodwill

Fujian JK Wiring

Systems Co. 17717209.29 17717209.29

Ltd..Huzhou Jiuding

Electronic Co. 1730318.45 1730318.45

Ltd.SpeedTech Corp. 26656146.69 26656146.69

Luxshare

Electronic

Technology 4582880.91 4582880.91

(Kunshan) Co.Ltd.Suk

kunststofftechnik 9552894.63 9552894.63

GmbH

Meite Technology

(Suzhou) Co. 8570588.06 8570588.06

Ltd.Meilv Electronic

(Huizhou) Co. 6575713.14 6575713.14

Ltd.Meilv Electronics

(Shanghai) Co. 454304.97 454304.97

Ltd.Wuxi Huihong

Electronic Co. 3102735.14 3102735.14

Ltd.Castle Rock Inc. 8303254.98 8303254.98

Taiqiao

Investment Co. 441595.93 441595.93

Ltd.Luxcase

Precision

Technology 814784800.96 814784800.96

(Yancheng) Co.Ltd.

243Luxshare Precision Industry Co. Ltd. Annual Report 2021

Zhejiang Puxing

Electronic

804455.51804455.51

Technology Co.Ltd.Caldigit

41765582.4141765582.41

Holding(Cayman)

Taihan Precision

9972872.889972872.88

Co. Ltd.Total 569434529.20 867327711.76 3102735.14 1433659505.82

(2) Provision for impairment of goodwill

In RMB

Investee name or Increase Decrease

event forming Opening Balance Closing Balance

goodwill Provision Other Disposal Other

Meite Technology

(Suzhou) Co. 8570588.06 8570588.06

Ltd.Suk

kunststofftechnik 9552894.63 9552894.63

GmbH

Meilv Electronics

(Shanghai) Co. 454304.97 454304.97

Ltd.Fujian JK Wiring

Systems Co. 17717209.29 17717209.29

Ltd..Total 36294996.95 36294996.95

Relevant information on asset group or set of asset groups to which the goodwill belongs

Descriptions on the goodwill impairment test process key parameters (such as the growth rate in the forecast period the growth rate

in the stable period the profit rate the discount rate the forecast period etc. when forecasting the present value of future cash flow)

and the recognition method of goodwill impairment loss

The goodwill of the Company is formed by business combinations not involving enterprises under common

control in previous years and this year. On the balance sheet date the Company conducted impairment tests

on goodwill. The recoverable amount of the asset group involved in goodwill is determined according to the

present value of the future cash flow of the asset group and the net realizable value. The management

determines the growth rate and gross margin based on the macro market environment historical experience

and the development stage forecast of product segments involved in different asset groups. Depending on the

different asset groups involved the growth rate used in the forecast for the current year is 1.00% - 35.00%

the gross margin is 7.50% - 26.00% and the discount rate is 10.68% - 11.51%.The parameters used in

244Luxshare Precision Industry Co. Ltd. Annual Report 2021

goodwill impairment test of major asset groups are as follows:

Asset group name Gross margin Growth rate Discount rate

Lanto Electronic Limited 20.00 % - 21.65% 2.00 % - 4.09% 10.82 %

Shenzhen Kertong Industrial Co. Ltd. 22.00 % - 23.00% 26.00 % - 27.10% 11.17 %

Luxcase Precision Technology 7.50 % - 9.73% 10.00 % - 35.00% 11.02 %

(Yancheng) Co. Ltd.Influence of goodwill impairment test

Other descriptions

29. Long-term prepaid expenses

In RMB

Amortization

Increase in the Other reduced

Item Opening Balance amount in the Closing Balance

current period amount

current period

House decoration

424783399.73339656026.43173723767.93590715658.23

fees

Other 63303645.24 151337009.18 72340590.23 142300064.19

Total 488087044.97 490993035.61 246064358.16 733015722.42

Other descriptions

30. Deferred income tax assets / deferred income tax liabilities

(1) Deferred income tax assets that are not offset

In RMB

Closing Balance Opening Balance

Item Deductible temporary Deductible temporary

Deferred tax assets Deferred tax assets

differences differences

Provision for impairment

334568858.4063227661.81178973738.8227259356.59

of assets

Unrealized profit of

357420408.9765112209.21197095777.5929564366.64

internal transaction

Deductible losses 3434269746.64 544802910.66 1093128995.53 151850386.35

Exchange differences of

65447863.2013089572.5527288912.605457782.50

foreign operations

Non-leave bonus 3393924.14 676806.65 1773724.21 354744.89

Government grants 489494362.59 87213362.00 396003023.27 70194455.38

245Luxshare Precision Industry Co. Ltd. Annual Report 2021

Share-based payment 311751257.24 75531955.67 390170003.29 67974211.12

Other 199941535.44 41560989.98 15122457.21 3179130.74

Total 5196287956.62 891215468.53 2299556632.52 355834434.21

(2) Deferred income tax liabilities that are not offset

In RMB

Closing Balance Opening Balance

Item Taxable temporary Taxable temporary

Deferred tax liabilities Deferred tax liabilities

difference difference

Assets valuation

appreciation of business

combination not 909128653.76 171173301.23 93903990.20 16054921.33

involving enterprises

under common control

Changes in fair value of

other investments in 191890689.53 28783603.43 95831927.34 14374789.10

equity instruments

Accelerated depreciation

6009902532.36905906182.005363997971.61806120054.47

of fixed assets

Support funds allocated

14658934.732198840.2115046630.732256994.61

by the government

Accumulative

recognition of overseas

646292642.90129258528.58342518297.3468503659.35

investment interests by

equity method

Prepaid pension 5447475.80 1089495.16 4849056.41 969811.28

Allowance for bad debt

677356.60135471.32682946.59136589.23

overrun

Valuation of derivative

211399624.8233099925.45320117316.2148017597.53

financial instruments

Other 2261422.45 447120.48 51621287.35 9657796.05

Total 7991659332.95 1272092467.86 6288569423.78 966092212.95

(3) Deferred income tax assets or liabilities presented in net amount after offsetting

In RMB

Offset amount between Offset amount between

Closing balance of Opening balance of

Item deferred tax assets and deferred tax assets and

deferred tax assets or deferred tax assets or

liabilities at the end of liabilities at the

246Luxshare Precision Industry Co. Ltd. Annual Report 2021

the period liabilities after offset beginning of the period liabilities after offset

Deferred tax assets 891215468.53 355834434.21

Deferred tax liabilities 1272092467.86 966092212.95

(4) Details of unrecognized deferred income tax assets

In RMB

Item Closing Balance Opening Balance

(5) The deductible losses of unrecognized deferred income tax assets will be due in the following years

In RMB

Particular year Closing amount Opening amount Remarks

Other descriptions:

31. Other non-current assets

In RMB

Closing Balance Opening Balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Prepayments for equipment project and 189383196 189383196 121218629 121218629

land 2.00 2.00 0.84 0.84

Prepaid pension 5447475.82 5447475.82 4849056.41 4849056.41

Other 5025743.67 5025743.67 6164295.36 6164295.36

190430518190430518122319964122319964

Total

1.491.492.612.61

Other descriptions:

32. Short-term borrowings

(1) Classification of Short-term borrowings

In RMB

Item Closing Balance Opening Balance

Pledge loans 5928221439.02 5382006847.47

Mortgage loans 41391259.41 80950818.66

Guaranteed loans 64979271.97 871234184.03

Credit loans 5885043367.59 1242876948.33

247Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 11919635337.99 7577068798.49

Descriptions on classification of short-term borrowings:

As at December 31 2021 the Company discounted bank acceptance bills issued mutually among companies

within the Group in the amount of RMB7582473758.45 and presented them as short-term borrowings

(2) Overdue but unpaid short-term borrowings

The total amount of overdue but unpaid short-term borrowings at the end of the period is RMB of which the significant overdue and

outstanding short-term borrowings are as follows:

In RMB

Borrower Closing Balance Loan interest rate Overdue time Overdue interest rate

Other descriptions:

33. Held-for-trading financial liabilities

In RMB

Item Closing Balance Opening Balance

Held-for-trading financial liabilities 41436.00

Including:

Held-for-trading bonds issued 41436.00

Including:

Total 41436.00

Other descriptions:

34. Derivative financial liabilities

In RMB

Item Closing Balance Opening Balance

Other descriptions:

35. Notes payable

In RMB

Category Closing Balance Opening Balance

Commercial acceptance bill 234500590.93 128292099.33

Bank acceptance bill 280012.21

Total 234500590.93 128572111.54

The total amount of notes payable due but unpaid at the end of this period is RMB.

248Luxshare Precision Industry Co. Ltd. Annual Report 2021

36. Accounts payable

(1) Presentation of accounts payable

In RMB

Item Closing Balance Opening Balance

Within one year 45255253965.04 23001670496.95

One to two years 112098892.50 48074585.64

Two to three years 38693846.52 777315.18

More than three years 10118963.61 1035206.06

Total 45416165667.67 23051557603.83

(2) Significant accounts payable with aging over 1 year

In RMB

Reasons for non-payment or carrying

Item Closing Balance

forward

Warranty bonds for workshop construction

Project payment 11928218.40

progress

Project payment 28895641.37 Acceptance pending for project

Project payment 6890000.00 Unexpired warranty bonds

Equipment payment 4931603.95 Dispute arising from equipment quality

Material payment 4646017.70 Incomplete information

Unsettlement due to incompletion of

Project payment 5356808.96

construction

Unsettlement due to incompletion of

Project payment 5820767.84

construction

Unsettlement due to incompletion of

Project payment 4543578.79

construction

Total 73012637.01 --

Other descriptions:

37. Receipts in advance

(1) Presentation of receipts in advance

In RMB

Item Closing Balance Opening Balance

249Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) Significant receipts in advance with aging over 1 year

In RMB

Reasons for non-payment or carrying

Item Closing Balance

forward

38 Contract liabilities

In RMB

Item Closing Balance Opening Balance

Goods payments received in advance 268506246.98 152512971.36

Total 268506246.98 152512971.36

Amount of and reason for significant changes in book value during the reporting period

In RMB

Item Change amount Reason for change

39. Employee benefits payable

(1) Presentation of employee benefits payable

In RMB

Item Opening Balance Increase Decrease Closing Balance

I. Short-term

1362258894.7115668099039.8814973064960.962057292973.63

compensation

II. Post employment

benefits - defined 35274789.60 937712989.07 930575388.97 42412389.70

contribution plan

III. Termination benefits 98454.92 1714038.20 1601474.66 211018.46

Total 1397632139.23 16607526067.15 15905241824.59 2099916381.79

(2) Presentation of short-term compensation

In RMB

Item Opening Balance Increase Decrease Closing Balance

1. Salary bonus

1330443894.0013427626555.8712746623506.342011446943.53

allowance and subsidy

2. Employee welfare 3629715.26 53466985.57 56034728.83 1061972.00

3. Social insurance

23293053.59441499817.54430701485.3234091385.81

premium

250Luxshare Precision Industry Co. Ltd. Annual Report 2021

Including: Medical

19737830.72377258064.34368286236.7628709658.30

insurance premium

Employment injury

2197080.7229508920.7429070058.542635942.92

insurance premium

Maternity insurance

1358142.1534732832.4633345190.022745784.59

premium

4. Housing provident

972860.12316916902.63312165793.955723968.80

fund

5. Trade union funds and

1547495.1714688217.3914805680.821430031.74

staff education funds

6. Other short-term

2371876.571413900560.881412733765.703538671.75

compensation

Total 1362258894.71 15668099039.88 14973064960.96 2057292973.63

(3) Presentation of defined contribution plan

In RMB

Item Opening Balance Increase Decrease Closing Balance

1. Basic endowment

34443692.48906923458.42900272413.8041094737.10

insurance premium

2. Unemployment

831097.1230789530.6530302975.171317652.60

insurance premium

Total 35274789.60 937712989.07 930575388.97 42412389.70

Other descriptions:

40. Taxes payable

In RMB

Item Closing Balance Opening Balance

Value added tax 91182205.54 51405224.41

Enterprise income tax 289614289.13 61775887.49

Individual income tax 76622641.75 21229322.95

Urban maintenance and construction tax 29252309.25 39628090.50

Property tax 23068002.63 9463498.94

Education surcharges 17112381.32 24409566.22

Local education surcharges 11090231.72 15752322.98

Land use tax 4341775.20 2197387.91

Stamp duty 10097139.66 6904466.32

251Luxshare Precision Industry Co. Ltd. Annual Report 2021

Disability insurance 50292555.43

Other 13366064.65 4655723.91

Total 616039596.28 237421491.63

Other descriptions:

41. Other payable

In RMB

Item Closing Balance Opening Balance

Other payable 382391106.17 146162097.14

Total 382391106.17 146162097.14

(1) Interest payable

In RMB

Item Closing Balance Opening Balance

Significant overdue but unpaid interest:

In RMB

Borrower Overdue amount Reasons for delay

Other descriptions:

(2) Dividends payable

In RMB

Item Closing Balance Opening Balance

Other descriptions: it is required to disclose the reasons if there are key dividends payable that have not been paid for more than 1

year.

(3) Other payable

1 ) Presentation of other payable by nature

In RMB

Item Closing Balance Opening Balance

Within 1 year 345015789.15 144334594.60

1 -2 years 17196648.52 622251.94

2 -3 years 14409891.93 410000.00

Over 3 years 5768776.57 795250.60

Total 382391106.17 146162097.14

252Luxshare Precision Industry Co. Ltd. Annual Report 2021

2 ) Other significant accounts payable aged over 1 year

In RMB

Reasons for non-payment or carrying

Item Closing Balance

forward

Other descriptions

42. Held-for-sale liabilities

In RMB

Item Closing Balance Opening Balance

Other descriptions:

43. Non-current liabilities due within one year

In RMB

Item Closing Balance Opening Balance

Long-term borrowings due within one year 157786550.24 278527714.63

Lease liabilities due within one year 112293039.92

Total 270079590.16 278527714.63

Other descriptions:

44. Other current liabilities

In RMB

Item Closing Balance Opening Balance

Short-term bonds payable 1607038444.45 508715277.78

Government-backed fund 57000000.00

Entrusted loans 1971219540.97

Output VAT to be levied 18605890.19 17673149.75

Payable for purchase returns 21715597.38

Other 4843599.88 39869128.36

Total 3623423072.87 623257555.89

Increase and decrease in short-term bonds payable:

In RMB

Amortizat

Interest Current

Bond Face Bond Amount Opening Current ion of Closing

Issue date accrued at repaymen Other

name value maturity of issue Balance issue premium Balance

face value t

and

253Luxshare Precision Industry Co. Ltd. Annual Report 2021

discount

Short-ter

April 5000000 5087152 5087152

m bonds 100.00 270 days

24202000.0077.7877.78

payable

Short-ter

October 8000000 8000000 4733333 8047333

m bonds 100.00 270 days

22202100.0000.00.3433.34

payable

Short-ter

Novembe 4000000 4000000 1265000 4012650

m bonds 100.00 90 days

r 17 2021 00.00 00.00 .00 00.00

payable

Short-ter

Novembe 4000000 4000000 1040111 4010401

m bonds 100.00 90 days

r 25 2021 00.00 00.00 .11 11.11

payable

210000050871521600000703844450871521607038

Total -- -- --

000.0077.78000.00.4577.78444.45

Other descriptions:

45. Long-term borrowings

(1) Classification of long-term borrowings

In RMB

Item Closing Balance Opening Balance

Pledge loans 1665503349.06 1878341.29

Mortgage loans 2252543585.32 1301034722.05

Guaranteed loans 72759492.87

Credit loans 1034289765.84 192286175.07

Total 5025096193.09 1495199238.41

Descriptions on classification of long-term borrowings:

Other descriptions including interest rate range:

46. Bonds payable

(1) Bonds payable

In RMB

Item Closing Balance Opening Balance

Convertible bonds 2805785000.04 2475423249.98

Total 2805785000.04 2475423249.98

254Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) Increase and decrease in bonds payable (excluding preferred shares perpetual bonds and other

financial instruments classified as financial liabilities)

In RMB

Amortizat

Interest ion of Current Debt-to-e

Bond Face Bond Amount Opening Current Closing

Issue date accrued at premium repaymen quity

name value maturity of issue Balance issue Balance

face value and t changes

discount

Convertib

le bonds 3000000 March 11 3000000 2475423 3500000 1060546 3000000 -424861. 2581553

6 years

of 000.00 2020 000.00 249.98 .00 77.72 .00 45 066.25

Luxshare

SpeedTec

h 2301000 March 10 2301000 2301000 -586806 2242319

3 years

convertibl 00.00 2021 00.00 00.00 6.21 33.79

e bonds

323010024754232301000350000010018663000000-424861.2805785

Total -- -- --

000.00249.9800.00.0011.51.0045000.04

(3) Descriptions on conditions and time for conversion of convertible bonds

The conversion period of the convertible bonds issued this time commences on the first trading day

six months after the end of the issue of the convertible bonds (November 9 2020 i.e.the date when

the proceeds are transferred to the issuer’s account) and ends on the maturity date of the

convertible bonds (i.e.from May 10 2021 (as the date of May 09 2021 is a non-trading day it

defers to May 10 2021) to November 2 2026 (it defers to the first trading day thereafter in case of

legal holidays or rest days;no additional interest will be charged to the payment during the deferred

period)).

(4) Descriptions on other financial instruments classified as financial liabilities

Basic information on preferred shares perpetual bonds and other financial instruments outstanding at the end of the period.Changes in preferred shares perpetual bonds and other financial instruments outstanding at the end of the period.In RMB

Outstanding Opening Increase Decrease Closing

financial

instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value

Descriptions on the basis for classifying other financial instruments into financial liabilities

Other descriptions

255Luxshare Precision Industry Co. Ltd. Annual Report 2021

47. Lease liabilities

In RMB

Item Closing Balance Opening Balance

Lease payment 336593292.75 157440735.91

Unrecognized financing costs -21499809.20 -12978050.00

Total 315093483.55 144462685.91

Other descriptions

48. Long-term payable

In RMB

Item Closing Balance Opening Balance

(1) Presentation of long-term payable by nature

In RMB

Item Closing Balance Opening Balance

Other descriptions:

(2) Special accounts payable

In RMB

Item Opening Balance Increase Decrease Closing Balance Reason

Other descriptions:

49. Long-term employee benefits payable

(1) Breakdown of Long-term employee benefits payable

In RMB

Item Closing Balance Opening Balance

(2) Changes in defined benefit plans

Present value of obligations in defined benefit plans:

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Plan assets:

In RMB

256Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item Amount recognized in the current period Amount recognized in the prior period

Net liabilities (net assets) of defined benefit plans

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Descriptions on the content of the defined benefit plans the related risks and the impact on the Company’s future cash flow time

and uncertainty:

Descriptions on the major actuarial assumptions and sensitivity analysis results concerning the defined benefit plans:

Other descriptions:

50. Provisions

In RMB

Item Closing Balance Opening Balance Reason

Product quality warranty 923738.96 1360598.63

Total 923738.96 1360598.63 --

Other descriptions including major assumptions and estimation descriptions related to significant provisions

51. Deferred income

In RMB

Item Opening Balance Increase Decrease Closing Balance Reason

Government grants 425345982.64 199402659.37 86191697.83 538556944.18

Total 425345982.64 199402659.37 86191697.83 538556944.18 --

Projects involving government grants:

In RMB

Amount Amount

New subsidy included in included in Amount of

Related to

Opening amount in non-operatin other cost offset in Other

Liabilities Closing Balance asset/

Balance the current g income in incomes in the current changes

income

period the current the current period

period period

Special

funds for

technologica

l 199402659. 85648103.2 Related to

413834324.74527588880.88

transformati 37 3 asset

on and

industrial

upgrading

Land-related 11511657.90 543594.60 10968063.30 Related to

257Luxshare Precision Industry Co. Ltd. Annual Report 2021

refund asset

199402659.86191697.8

Total 425345982.64 538556944.18

373

Other descriptions:

52. Other non-current liabilities

In RMB

Item Closing Balance Opening Balance

Deposit for lease of plant buildings 19923.33

Government-backed fund 150000000.00

Other 1207763.79

Total 1207763.79 150019923.33

Other descriptions:

53. Share capital

In RMB

Increase and decrease (+ -)

Opening

Shares

Closing

Balance New shares Stock dividend converted from Other Subtotal Balance

issued

capital reserve

6999768186.7050485477.

Total shares 50708482.00 8809.00 50717291.00

0000

Other descriptions:

The Company’s share capital increased by RMB50717291.00 shares in the current period including

50708482 shares exercised by the stock option incentive recipients independently and 8809 shares

converted from convertible bonds. After the said exercise and conversion the Company’s share capital

increased to 7050485477 shares.

54. Other equity instruments

(1) Basic information on preferred shares perpetual bonds and other financial instruments outstanding at

the end of the period

None

(2) Changes in preferred shares perpetual bonds and other financial instruments outstanding at the end of

the period

In RMB

258Luxshare Precision Industry Co. Ltd. Annual Report 2021

Outstanding Opening Increase Decrease Closing

financial

instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value

Convertible 527449226. 527358025.

91200.58

bonds 56 98

527449226.527358025.

Total 91200.58

5698

Descriptions on the increase and decrease in other equity instruments in the current period the reasons for the changes and the basis

for relevant accounting treatment:

According to the Proposal on the Specific Plan for the Public Issue of Convertible Bond deliberated and

approved at the tenth conference of the fourth session of the Board of Directors of the Company and the

Reply for Approval of Public Issue of Convertible Bonds by Luxshare Precision Industry Co. Ltd. (Zheng

Jian Xu Ke [2020] No.247) received by the Company from China Securities Regulatory Commission on

February 19 2020 the Company was approved to publicly issue convertible bonds with a total face value

of RMB3 billion and a term of 6 years.The Company’s convertible bonds of RMB3 billion were listed fortrading on Shenzhen Stock Exchange on November 3 2020 with an abbreviation name of “LuxshareConvertible Bonds” and the bond code of “128136”.Decrease in other equity instrument in the current period is represented as the decrease in convertible

bonds caused by conversing bonds to shares.Other descriptions:

55. Capital reserve

In RMB

Item Opening Balance Increase Decrease Closing Balance

Capital premium (share

1367064124.74974641174.472341705299.21

capital premium)

Other capital reserve 523035444.86 240700708.77 385746171.17 377989982.46

Total 1890099569.60 1215341883.24 385746171.17 2719695281.67

Other descriptions including those on the increase and decrease for the current period and the reasons for the change:

Capital reserve - equity premium increased by RMB974641174.47 in the current period including an

increase of RMB535744317.19 from stock option exercise a transfer of RMB385746171.17 from other

capital reserve through stock option exercise a conversion of RMB507253.01 from convertible bonds and

an increase of RMB52643433.10 by other ways.Capital reserve - the increase in other capital reserve in the current period is due to the cost of share-based

payment increased by RMB240700708.77 and the decrease therein is due to the transfer of other capital

reserve to equity premium.

56. Treasury stock

In RMB

259Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item Opening Balance Increase Decrease Closing Balance

Other descriptions including those on the increase and decrease for the current period and the reasons for the change:

57. Other comprehensive income

In RMB

Amount recognized in the current period

Less:

amount

Less: amount

previously

previously

included

included in

in other

Amount of other

comprehe Attributabl Attributabl

Opening income comprehensi

Item nsive Less: e to the e to

Closing

Balance before tax ve income income income tax parent minority Balance

in the and

and expenses company shareholde

current transferred to

transferred after tax rs after tax

period profit or loss

to retained

for the

earnings

current

for the

period

current

period

I. Other comprehensive income

81459923.962147314508818170591163165

that cannot be reclassified into

454.807.007.80841.25

profit or loss

Changes in fair value of other 81459923. 9621473 1450881 8170591 163165

investments in equity instruments 45 4.80 7.00 7.80 841.25

II. Other comprehensive income

-12617772-1053915-7278958-3260199-198967

to be reclassified into profit or

6.5178.316.032.28312.54

loss

Translation difference of foreign -12617772 -1053915 -7278958 -3260199 -198967

currency financial statements 6.51 78.31 6.03 2.28 312.54

-44717803.-917684314508818916331.-3260199-35801

Total other comprehensive income

06.517.00772.28471.29

Other descriptions including those on the adjustment for conversion of the effective part of profit or loss of cash flow hedging into

the initial recognition amount of the hedged item:

58. Special reserve

In RMB

Item Opening Balance Increase Decrease Closing Balance

260Luxshare Precision Industry Co. Ltd. Annual Report 2021

Safety production fees 1018784.75 1018784.75

Total 1018784.75 1018784.75

Other descriptions including those on the increase and decrease for the current period and the reasons for the change:

59. Surplus reserve

In RMB

Item Opening Balance Increase Decrease Closing Balance

Statutory surplus reserve 733067797.73 252093708.88 985161506.61

Total 733067797.73 252093708.88 985161506.61

Description of surplus reserve including those on increase and decrease for the current period and the reasons for the change:

60. Undistributed profits

In RMB

Item Current Period Prior Period

Undistributed profits at the end of last year before

17996149257.7311764987172.39

adjustment

Undistributed profits at the beginning of the

17996149257.7311764987172.39

period after adjustment

Add: Net profits attributable to the owners of the

7070520386.577225462752.58

parent company in the current period

Less: Apportion to statutory surplus reserve 252093708.88 370732766.55

Common stock dividends payable 773891489.58 644615942.06

Other 47301.84 -21048041.37

Undistributed profits at the end of the period 24040637144.00 17996149257.73

Details of adjustment of undistributed profits at the beginning of the period:

1 ) The undistributed profits at the beginning of the period affected by the retroactive adjustment as stipulated in the Accounting

Standards for Business Enterprises and new regulations newly promulgated relating thereto amounted to RMB0.00.

2 ) The undistributed profits at the beginning of the period affected by the changes in accounting policies amounted to RMB0.00.

3 ) The undistributed profits at the beginning of the period affected by the correction of major accounting errors amounted to

RMB0.00.

4 ) The undistributed profits at the beginning of the period affected by changes in the scope of consolidation due to business

combination involving enterprises under control amounted to RMB0.00.

5 ) The undistributed profits at the beginning of the period affected by other adjustments amounted to RMB0.00.

261Luxshare Precision Industry Co. Ltd. Annual Report 2021

61. Operating income and operating costs

In RMB

Amount recognized in the current period Amount recognized in the prior period

Item

Income Cost Income Cost

Principal business 152257625983.60 133514500539.03 91793434304.26 75153299514.88

Other business 1688471806.80 1533835753.85 707824907.28 616707534.70

Total 153946097790.40 135048336292.88 92501259211.54 75770007049.58

If the lower of audited nets profits including and excluding non-recurring profit or loss is negative

□ Yes √ No

Income related to information:

In RMB

Contract classification Segment 1 Segment 2 Total

By product

Including:

Computer connectivity

products and precision 7856595729.78 7856595729.78

components

Automotive connectivity

products and precision 4142675174.19 4142675174.19

components

Communication

connectivity products

3269476642.603269476642.60

and precision

components

Consumer electronics 134637995600.46 134637995600.46

Other connectors and

4039354643.374039354643.37

other business

By geographical areas of

operations

Including:

Domestic market 10493247599.10 10493247599.10

Overseas market 143452850191.30 143452850191.30

By markets or customers

Including:

By contract types

262Luxshare Precision Industry Co. Ltd. Annual Report 2021

Including:

By the period of

transferring products

Including:

By contract term

Including:

By sales channel

Including:

Direct sales 153946097790.40 153946097790.40

Total 153946097790.40 153946097790.40

Information related to performance obligations:

None

Information relating to the transaction price allocated to the remaining performance obligations:

At the end of the reporting period the incomes corresponding to the contracts signed whose performance has not been commenced or

completed amount to RMB0.00 of which RMB is expected to be recognized in RMB is expected to be recognized in and RMB is

expected to be recognized in.Other descriptions

62. Taxes and surcharges

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Urban maintenance and construction tax 30064853.10 81906708.52

Education surcharges 14616280.44 45589613.48

Property tax 63618880.04 39872407.36

Land use tax 11000959.65 6222537.93

Vehicle and vessel use tax 80571.50 1594540.33

Stamp duty 56059570.68 38224811.62

Local education surcharges 8788619.58 30367962.03

Other 9582322.15 6997157.54

Total 193812057.14 250775738.81

Other descriptions:

263Luxshare Precision Industry Co. Ltd. Annual Report 2021

63. Selling expenses

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Employee benefits 477502208.55 299604855.35

Storage and lease expenses 51915157.63 25954501.83

Travel expenses 7698136.97 10523347.33

Business entertainment expenses 23190907.73 20355079.41

Material expenditure 7816183.12 1095021.52

Transportation expenses 5702963.14 3366341.74

Consumables and miscellaneous purchases 47560953.11 5583719.60

Depreciation and amortization 8650043.25 5752130.91

Consulting fees 16189368.41 2383695.21

Office expenses 1720255.18 322246.46

Other 141961986.71 102106936.22

Total 789908163.80 477047875.58

Other descriptions:

64. General expenses

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Personnel benefits 2040701402.50 1460800684.09

Depreciation and amortization 636539244.20 251028760.61

Lease fee 54750988.28 62104694.48

Repair cost miscellaneous purchase 103842977.48 125433880.08

Water and electricity 59194407.97 36346709.92

Travel and transportation expenses 29058122.92 26568577.76

Office expenses 187814810.66 115440868.62

Materials and consumption 303188844.16 164759105.43

Other expenses 326817985.33 221469927.64

Total 3741908783.50 2463953208.63

Other descriptions:

65. R&D expenses

In RMB

264Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item Amount recognized in the current period Amount recognized in the prior period

Personnel benefits 3240607062.66 2908511305.08

Mould and material cost 1372424795.60 1412859366.51

Consumables and miscellaneous 503901794.70 427092914.15

Depreciation and amortization 553276292.48 434765917.47

Repair and inspection 380055319.93 171099556.49

Service fees 119031894.75 73318711.87

Water and electricity 81400086.54 72911702.75

Transportation and travel expenses 31528985.33 29788220.49

Commercial insurance 2078437.06 4911888.67

Lease fee 61161176.98 47239062.80

Other expenses 296834556.71 162306490.05

Total 6642300402.74 5744805136.33

Other descriptions:

66. Financial expenses

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Interest expenses 656411767.86 394589818.16

Including: interest cost of lease liabilities 30548145.32

Less: Interest income 361773700.27 144116091.77

Foreign exchange gains or losses 225950789.85 614733760.74

Other 34077016.61 39620655.76

Total 554665874.05 904828142.89

Other descriptions:

67. Other incomes

In RMB

Sources of other incomes Amount recognized in the current period Amount recognized in the prior period

Government grants 853542165.37 450748795.89

Total 853542165.37 450748795.89

68. Investment income

In RMB

265Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item Amount recognized in the current period Amount recognized in the prior period

Long-term equity investment income

29737321.9524799841.42

accounted for using the equity method

Investment income from disposal of long-term

581347.341723373.00

equity investment

Investment income from held-for-trading

706688280.62508055516.99

financial assets during holding period

Gains from remeasurement of remaining

583884.90

equities at fair value after loss of control

Difference between the original carrying

amount and the fair value of long-term equity

15975338.43

investment under cost method changed from

equity method

Gains from derecognition of financial assets

-171521013.80

measured at amortized cost.Income from wealth management 107341490.30 113778334.95

Total 689386649.74 648357066.36

Other descriptions:

69. Net exposure hedging income

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Other descriptions:

70. Income from changes in fair value

In RMB

Sources of income from changes in fair

Amount recognized in the current period Amount recognized in the prior period

value

Held-for-trading financial assets -115737751.66 329044852.43

Including: Income from changes in fair

-115737751.66329044852.43

value of derivative financial instruments

Total -115737751.66 329044852.43

Other descriptions:

71. Impairment losses of credit

In RMB

266Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item Amount recognized in the current period Amount recognized in the prior period

Bad debt loss of other receivables -2046557.86 -852545.23

Bad debt loss of notes receivable -3247.78

Bad debt loss of accounts receivable -24825699.05 -7737455.44

Total -26875504.69 -8590000.67

Other descriptions:

72. Impairment losses of assets

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

II. Loss of inventory depreciation and

impairment loss of contract performance -158892591.11 -60363851.75

cost

V. Impairment loss of fixed assets -3897744.01 -78925059.30

Total -162790335.12 -139288911.05

Other descriptions:

73. Income from disposal of assets

In RMB

Sources of income from asset disposal Amount recognized in the current period Amount recognized in the prior period

Loss on disposal of fixed assets -45249998.44 -2309694.02

Loss on disposal of intangible assets -16594.21

Total -45266592.65 -2309694.02

74. Non-operating income

In RMB

Amount included in

Amount recognized in the Amount recognized in the prior

Item non-recurring profit or loss for

current period period

the period

Income from compensation for

1860909.334109194.811860909.33

breach of contract

Income from asset retirement 1339094.50 7173590.23 1339094.50

Income from insurance

622245.83622245.83

indemnity

Other 17274286.94 10649503.20 17274286.94

267Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 21096536.60 21932288.24 21096536.60

Government grants included in current profit or loss:

In RMB

Whether the

subsidy affect Whether it is Amount in Amount in

Reasons for Nature and Related to

Grant item Granter the profit or a special the current the prior

grant type asset/ income

loss of the grant period period

current year

Other descriptions:

75. Non-operating expenses

In RMB

Amount included in

Amount recognized in the Amount recognized in the prior

Item non-recurring profit or loss for

current period period

the period

External donation 1573490.75 8826883.90 1573490.75

Asset retirement loss 19504908.68 42346561.68 19504908.68

Compensation liquidated

17481196.86368635.6317481196.86

damages and fines

Other 7112837.76 2414711.57 7112837.76

Total 45672434.05 53956792.78 45672434.05

Other descriptions:

76. Income tax expenses

(1) Income tax expenses

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Current income tax expense 607416066.01 486267875.03

Deferred income tax expense -285177422.37 158497053.67

Total 322238643.64 644764928.70

(2) Reconciliation of income tax expenses to the accounting profit

In RMB

Item Amount recognized in the current period

Total profits 8142848949.83

268Luxshare Precision Industry Co. Ltd. Annual Report 2021

Income tax expense calculated based on statutory/applicable tax

1221427342.48

rate

Effect of different tax rates of subsidiaries operating in other

-339827146.62

jurisdictions

Effect of adjustment on income tax for prior period 8937497.60

Effect of non-deductible cost expense and loss 22968140.94

Effect of utilizing deductible loss not recognized for deferred tax

-8107745.64

assets for prior period

Effect of deductible temporary difference or deductible loss not

248819876.05

recognized for deferred tax assets for the current period

Additional deduction of R&D expenses (presented in negative) -532636196.66

Difference from exercise of stock option -310920312.23

Additional deduction of expenses used for disable persons -620631.77

Other 12197819.49

Income tax expenses 322238643.64

Other descriptions

77. Other comprehensive income

Please refer to Note VII 57.

78. Items in the cash flow statement

(1) Other cash received related to operating activities

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Special subsidies and grants 941612664.44 620035223.62

Lease income 83010927.51 58450087.37

Interest income 361773700.27 144116091.77

Non-operating income 19499157.07 14757798.01

Recovery of current accounts and

1240625072.70341220838.10

disbursements

Total 2646521521.99 1178580038.87

Descriptions on other cash received related to operating activities:

(2) Other cash paid related to operating activities

In RMB

269Luxshare Precision Industry Co. Ltd. Annual Report 2021

Item Amount recognized in the current period Amount recognized in the prior period

Selling expenses 272687431.13 171690889.32

General expenses 836627173.21 812592804.46

R&D expenses 983858805.26 971330641.74

Non-operating expenses 9538603.31 11610231.10

Inter-company transactions 239332761.28 70545074.10

Handling charges 34077016.62 39620655.76

Other 14883864.59 47051077.53

Total 2391005655.40 2124441374.01

Descriptions on other cash paid related to operating activities:

(3) Other cash received related to investing activities

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Obtain net cash received by subsidiaries 4665590364.12

Total 4665590364.12

Descriptions on other cash received related to investing activities:

(4) Other cash paid related to investing activities

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Income tax levied on equity transactions 371929911.39

Supplier borrowings 30000000.00

Other 1208914.50

Total 403138825.89

Descriptions on other cash paid relating to investing activities:

(5) Other cash received related to financing activities

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Short-term financing bonds 3799202739.72 1500000000.00

Convertible bonds 228949500.00 2985600000.00

Taxes withheld from shareholder for

671813299.36

reduction of shares

270Luxshare Precision Industry Co. Ltd. Annual Report 2021

Other 5965056.90

Total 4705930595.98 4485600000.00

Descriptions on other cash received related to financing activities:

(6) Other cash paid related to financing activities

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Short-term financing bonds 2700000000.00

Taxes prepaid for shareholder for reduction

671813299.36

of shares

Lease fee 82320708.73

Financing charges 7388317.66 14511270.50

Total 3461522325.75 14511270.50

Descriptions on other cash paid related to financing activities:

79. Supplementary information to cash flow statement

(1) Supplementary information to cash flow statement

In RMB

Supplementary information Current period Prior period

1 . Reconciliation of net profit to cash flow

----

from operating activities:

Net profits 7820610306.19 7491014735.42

Add: Provision for impairment losses of

189665839.81147878911.72

assets

Depreciation of fixed assets depletion of oil

and gas assets depreciation of bearer 4822202794.73 2212448100.25

biological assets

Depreciation of right of use assets 105949651.47

Amortization of intangible assets 119810187.02 66781202.42

Amortization of long-term prepaid expenses 246064358.16 137587798.08

Loss from disposal of fixed assets intangible

assets and other long-term assets (“-” means 45266592.65 2309694.02

income)

Loss from fixed assets retirement (“-” means

18165814.1834858852.91

income)

271Luxshare Precision Industry Co. Ltd. Annual Report 2021

Loss from changes in fair value (“-” means

115737751.66-329044852.43

income)

Financial expenses (“-” means income) 656411767.86 394589818.16

Investment loss (“-” means income) -689386649.74 -648357066.36

Decrease in deferred income tax assets (“-”

-365926458.23-216359243.84

means increase)

Increase in deferred income tax liabilities

306000254.91367907819.95

(“-” means decrease)

Decrease in inventories (“-” means increase) -5400711336.99 -5549633761.96

Decrease in operating receivables (“-” means

-13885780461.98-1149269162.66

increase)

Increase in operating accounts payable (“-”

13180686505.303910498640.37

means decrease)

Other

Net cash flow from operating activities 7284766917.00 6873211486.05

2 . Significant investing and financing

activities that do not involve cash receipts -- --

and payments:

Conversion of debt into capital

Convertible bonds due within one year

Fixed assets acquired under finance leases

3 . Net changes in cash and cash equivalents: -- --

Closing balance of cash 8921536728.08 10464804451.34

Less: Opening balance of cash 10464804451.34 6147339924.26

Add: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents -1543267723.26 4317464527.08

(2) Net cash paid to acquire subsidiaries for the period

In RMB

Amount

Cash or cash equivalents paid in current period for business

6020000000.00

combination incurred in current period

Including: --

Luxcase Precision Technology (Yancheng) Co. Ltd. 6000000000.00

Zhejiang Puxing Electronic Technology Co. Ltd. 20000000.00

272Luxshare Precision Industry Co. Ltd. Annual Report 2021

Less: Cash and cash equivalents held by subsidiaries at the date of

4525053713.82

purchase

Including: --

Luxcase Precision Technology (Yancheng) Co. Ltd. 4522153794.04

Zhejiang Puxing Electronic Technology Co. Ltd. 2899919.78

Including: --

Net cash paid to acquire subsidiaries 1494946286.18

Other descriptions:

As Luxcase Precision Technology (Yancheng) Co. Ltd.was acquired in the form of contributing additional

capital to increase shares the cash and cash equivalents held by this subsidiary on the acquisition date are

presented in other cash received related to investing activities.

(3) Net cash received from disposal of subsidiaries in the current period

In RMB

Amount

Cash or cash equivalents received from disposal of subsidiaries in

17500000.00

the current period

Including: --

Wuxi Huihong Electronic Co. Ltd. 17500000.00

Less: Cash and cash equivalents held by subsidiaries on the date of

1081786.29

loss of control

Including: --

Wuxi Huihong Electronic Co. Ltd. 1081786.29

Including: --

Luxshare Precision Industry (Xi’an) Co. Ltd. 16418213.71

Other descriptions:

(4) Composition of cash and cash equivalents

In RMB

Item Closing Balance Opening Balance

I. Cash 8921536728.08 10464804451.34

Including: Cash on hand 323716.04 9919560.76

Bank deposits available for payment at any

8921213012.0410454884890.58

time

III. Closing balance of cash and cash

8921536728.0810464804451.34

equivalents

273Luxshare Precision Industry Co. Ltd. Annual Report 2021

Other descriptions:

80. Notes to items in statement of changes in owners’ equity

Descriptions on the name of “other” items and the amount of adjustment for closing balance in the previous year

None

81. Assets with restricted ownership or right of use

In RMB

Item Closing book value Reasons for restriction

Cash and bank balances 5 283081458.35 Issue of notes and letter of credit

Notes receivable 51 933961.58 Financing from pledge of notes receivable

Fixed assets 1 176330347.47 Financing from mortgage of fixed assets

Intangible assets 777 621389.62 Financing from mortgage of land

Financing from pledge of held-for-trading

Held-for-trading financial assets 663 680000.00

financial assets

Financing from pledge of accounts

Accounts receivable 49 644035.79

receivable

Equity investment 5 809775702.93 Financing from pledge of equity

Total 13 812066895.74 --

Other descriptions:

82. Foreign currency monetary items

(1) Foreign currency monetary items

In RMB

Closing balance in foreign

Item Exchange rate Closing balance in RMB

currency

Cash and bank balances -- -- 3 809946844.03

Including: USD 549 726199.35 6.3757 3 504889329.20

EUR 1 016405.17 7.2197 7 338140.43

HKD 18 613.71 0.8176 15 218.57

JPY 148 105516.38 0.0554 8 207267.19

TWD 935 408419.98 0.2302 215 331018.28

VND 34 638767833.33 0.0003 10 391630.35

KRW 1 627507833.33 0.0054 8 788542.30

274Luxshare Precision Industry Co. Ltd. Annual Report 2021

GBP 21 204.00 8.6064 182 490.11

RUB 640 224387.85 0.0856 54 803207.60

Accounts receivable -- -- 27 826548538.48

Including: USD 4 361041363.31 6.3757 27 804691420.03

EUR 2 156059.22 7.2197 15 566100.77

HKD

JPY 3 104794.91 0.0554 172 052.21

TWD 22 936625.98 0.2302 5 280011.30

VND 48 964833.33 0.0003 14 689.45

KRW 152 641616.67 0.0054 824 264.73

Long-term borrowings -- -- 378 468877.94

Including: USD 19 502777.91 6.3757 124 343861.14

EUR

HKD

TWD 1 103931437.01 0.2302 254 125016.80

Other receivables 19 928358.09

Including: USD 1 429404.56 6.3757 9 113454.66

EUR 67 468.99 7.2197 487 105.87

JPY 13 950414.69 0.0554 773 062.23

TWD 23 216441.01 0.2302 5 344424.72

VND 6 632207366.67 0.0003 1 989662.21

KRW 240 181085.19 0.0054 1 296977.86

GBP 14 146.00 8.6064 121 746.13

RUB 9 368275.93 0.0856 801 924.42

Short-term borrowings 2 218863494.96

Including: USD 341 515779.70 6.3757 2 177402156.62

TWD 180 110070.98 0.2302 41 461338.34

Accounts payable 28 306154765.48

Including: USD 4 348182333.27 6.3757 27 722706102.23

EUR 246 432.18 7.2197 1 779166.41

HKD 49 854.11 0.8176 40 760.72

JPY 187 198720.98 0.0554 10 373617.12

TWD 33 632805.99 0.2302 7 742271.94

VND 1 875038915500.00 0.0003 562 511674.65

275Luxshare Precision Industry Co. Ltd. Annual Report 2021

KRW 29 876448.15 0.0054 161 332.82

GBP 1 288.00 8.6064 11 085.04

RUB 9 681712.03 0.0856 828 754.55

Other payables 39 768243.29

Including: USD 3 797438.16 6.3757 24 211326.47

JPY 7 919377.42 0.0554 438 852.30

TWD 39 028634.01 0.2302 8 984391.55

VND 16 719194666.67 0.0003 5 015758.40

KRW 20 148111.11 0.0054 108 799.80

GBP 116 589.00 8.6064 1 003411.57

RUB 66 626.17 0.0856 5 703.20

Other descriptions:

(2) Descriptions on overseas business entities including with respect to significant overseas business

entities disclosure of their overseas main business place functional currency and selection basis and the

reasons for changes in functional currency (if any).□ Applicable √ N/A

83. Hedging

Disclosure of the qualitative and quantitative information of the hedged items relevant hedging instruments and hedged risks

according to the hedging categories:

84. Government grants

(1) Basic information of government grants

In RMB

Amount included in current

Category Amount Presentation item

profit or loss

Related to asset 538 556944.18 Deferred income 86 191697.83

Related to income 767 350467.54 Other income 767 350467.54

(2) Return of government grants

□ Applicable √ N/A

Other descriptions:

276Luxshare Precision Industry Co. Ltd. Annual Report 2021

85. Others

VIII. Changes in scope of consolidation

1. Business combination not involving enterprises under common control

(1) Business combination not involving enterprises under common control in the current period

In RMB

Income of the Net profit of

acquiree from the acquiree

Basis for

Time point of Cost of Equity Method of the from the

Name of Acquisition determination

equity equity acquisition equity acquisition acquisition

acquiree date of acquisition

acquisition acquisition ratio acquisition date to the date to the

date

end of the end of the

period period

Luxcase

Precision

6 00000000 Cash Obtainment 49 7271230 1 09223163

Technology Feb.1 2021 51.83 % Feb.1 2021

0.00 acquisition of control 10.93 8.01

(Yancheng)

Co. Ltd.Caldigit

59 570545.9 Control under Obtainment 211 936482. 17 429974.9

Holding(Cay Jan.1 2021 40.00 % Jan.1 2021

7 agreement of control 41 0

man)

Taihan

131 123350. Control under Obtainment 220 040667. 11 773116.3

Precision Aug.1 2021 26.71 % Aug.1 2021

23 agreement of control 42 0

Co. Ltd.Zhejiang

Puxing

20 000000.0 Cash Obtainment 19 726196.3

Electronic Aug.1 2021 70.00 % Aug.1 2021 -1018429.21

0 acquisition of control 3

Technology

Co. Ltd.Other descriptions:

(2) Combination costs and goodwill

In RMB

Luxcase Precision Zhejiang Puxing

Caldigit Taihan Precision Co.Combination costs Technology (Yancheng) Electronic Technology

Holding(Cayman) Ltd.Co. Ltd. Co. Ltd.--Cash 6 000000000.00 20 000000.00

-- Fair value of non-cash

277Luxshare Precision Industry Co. Ltd. Annual Report 2021

assets

-- Fair value of issued or

assumed debts

-- Fair value of issued

equity securities

-- Fair value of

contingent consideration

-- Fair value of equity

shares held before the

59570545.97131123350.23

acquisition date at the

acquisition date

-- Other

Total of combination cost 6 000000000.00 59 570545.97 131 123350.23 20 000000.00

Less: share of fair value

of identifiable net assets 5 185215199.04 17 804963.56 121 150477.35 19 195544.49

acquired

Amount of

goodwill/combination

cost less than the share of 814 784800.96 41 765582.41 9 972872.88 804 455.51

fair value of identifiable

net assets acquired

Descriptions on methods for determining the fair value of combination costs contingent considerations and changes therein:

Main reasons for the formation of large goodwill:

Other descriptions:

(3) Identifiable assets and liabilities of the acquiree on the acquisition date

In RMB

Luxcase Precision

Zhejiang Puxing Electronic

Technology (Yancheng) Co. Caldigit Holding(Cayman) Taihan Precision Co. Ltd.Technology Co. Ltd.Ltd.Fair value at Book value at Fair value at Book value at Fair value at Book value at Fair value at Book value at

acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition

date date date date date date date date

244062847237014733109907469.91423949.8670860493.569899146.46757216.946757216.9

Assets:

04.4220.22771189833

Cash and

10672117010672117018271881.618271881.6143991433.143991433.

bank 2 899919.78 2 899919.78

36.9336.93883232

balances

Accounts 4 22283497 4 22283497 12 095772.4 12 095772.4 95 429725.6 95 429725.6 13 607880.3 13 607880.3

278Luxshare Precision Industry Co. Ltd. Annual Report 2021

receivable 1.37 1.37 4 4 0 0 3 3

22890350122890350157340063.357340063.347675909.147675909.112600399.912600399.9

Inventories

5.015.01666644

506162481467067967220051363.210119614.14318313.014318313.0

Fixed assets 92 963.74 92 963.74

0.688.66446466

Intangible 506 818185. 192 951933. 18 490480.0 89 819609.8

6960.103665418.202935.142935.14

assets 85 67 6 0

93038799.193038799.115061693.415061693.4

Prepayments 2 767778.62 2 767778.62 508 290.24 508 290.24

2222

15608158815608158858830758.453955352.6

Other assets 848 529.87 848 529.87 2 819478.44 2 819478.44

5.465.4644

14401412314225209465395061.359879578.8217326768.222542721.19335010.519335010.5

Liabilities:

33.0587.0028031422

400701290.400701290.41789697.741789697.7

Borrowings

050500

Accounts 12 0104415 12 0104415 58 506728.0 58 506728.0 59 344981.7 59 344981.7 11 016405.1 11 016405.1

payable 35.39 35.39 0 0 4 4 0 0

Deferred tax 176 202846. 33 581279.5 12 175148.6

5515482.421287940.091287940.09

liabilities 05 0 3

Other 602 710283. 602 710283. 23 916815.0 50 538898.9

937618.87937618.871970314.491970314.49

payables 41 41 0 7

Other 1 21135637 1 21135637 58 693994.0 58 693994.1

435232.03435232.015060350.845060350.84

liabilities 8.15 8.15 9 0

10004872394762638344512408.431544370.9453533725.347356425.27422206.427422206.4

Net assets

71.373.2253158411

Less:

48196571745650100526707444.818926622.5332383247.254568625.

minority 8 226661.92 8 226661.92

2.332.64908032

interest

Net assets 5 18521519 4 91125378 17 804963.5 12 617748.4 121 150477. 92 787800.5 19 195544.4 19 195544.4

acquired 9.04 0.58 6 3 35 2 9 9

Methods for determining the fair value of identifiable assets and liabilities:

Contingent liabilities of the acquiree in business combination:

Other descriptions:

(4) Gains or losses arising from the re-measurement of equity held before the acquisition date at fair value

Where there is any transaction that realizes business combination step by step through multiple transactions and obtains control right

in the reporting period

□ Yes √ No

279Luxshare Precision Industry Co. Ltd. Annual Report 2021

(5) Relevant descriptions on the combination consideration or the fair value of the identifiable assets and

liabilities of the acquiree that cannot be reasonably determined on the acquisition date or at the end of the

current period

(6) Other descriptions

2. Business combination involving enterprises under common control

(1) Business combination involving enterprises under common control in the current period

In RMB

Basis for Income of the Net profit of

business combined the combined Income of the Net profit of

Basis for

Equity ratio combination party from party from combined the combined

Name of determining

obtained in involving Combination the beginning the beginning party during party during

combined the

business enterprises date of the current of the current the the

party combination

combination under period to the period to the comparison comparison

date

common combination combination period period

control date date

Other descriptions:

(2) Combination costs

In RMB

Combination costs

--Cash

-- Book value of non-cash assets

-- Book value of issued and assumed liabilities

-- Par value of issued equity securities

-- Contingent consideration

Descriptions on contingent considerations and changes therein:

Other descriptions:

(3) Book value of assets and liabilities of the acquiree at the combination date

In RMB

Combination date End of last period

Assets:

Cash and bank balances

280Luxshare Precision Industry Co. Ltd. Annual Report 2021

Accounts receivable

Inventories

Fixed assets

Intangible assets

Liabilities:

Borrowings

Accounts payable

Net assets

Less: minority interest

Net assets acquired

Contingent liabilities assumed by acquiree in business combinations:

Other descriptions:

3. Counter purchase

Basic information of transactions basis for forming a reverse purchase if assets and liabilities retained by listed company constitute

a business and its basis determination of combination cost adjustments on and calculation of equity treated as equity transactions:

4. Disposal of subsidiaries

Single disposal of investments in subsidiaries i.e.the loss of control

√ Yes □ No

In RMB

Differen Amount

ce Determin of other

between ation compreh

the Gain or method ensive

Book

Basis for disposal Proporti Fair loss from and main income

value of

determin price and on of value of re-measu assumpti related to

Time the

Name of Equity Equity Equity ing the the share residual residual rement on for equity

point of residual

subsidiar disposal disposal disposal time of net equity on equity on of fair investme

losing equity on

y price ratio method point of assets of the date the date residual value of nt of the

control the date

losing the of losing of losing equity at residual subsidiar

of losing

control subsidiar control control fair equity on y

control

y at the value the date transferr

consolid of losing ed into

ated control investme

financial nt profit

281Luxshare Precision Industry Co. Ltd. Annual Report 2021

statemen or loss

t level

correspo

nding to

the

disposal

of

investme

nt

Wuxi

Huihong Change

17 5000 Feb.28 581 347.

Electroni 68.97 % Sold of equity

00.00202134

c Co. shares

Ltd.Other descriptions:

Whether there is any situation where the investment in subsidiaries is disposed step by step through multiple transactions and the

control is lost in the current period

□ Yes √ No

5.Changes in consolidation scope for other reasons

Descriptions on changes in the scope of consolidation for other reasons (such as the establishment of new subsidiaries liquidation of

subsidiaries etc.)and related situations:

The Company’s changes in scope of consolidation caused by newly established subsidiaries in 2021 are

stated as follows:

Company Date of establishment

Luxis Technology Limited April 23 2021

Yancheng Luxshare Precision Industry Co. Ltd. May 27 2021

Hangzhou Xuntao Technology Co. Ltd. June 28 2021

Rugao Luxshare Corporate Management Services Partnership

February 8 2021

(Limited Partnership)

Lianxun Intelligent Equipment (Rugao) Co. Ltd. June 8 2021

Luxshare Precision Technology(Xi’an) Co. Ltd. June 7 2021

Luxshare Electronic Technology (Enshi) Co. Ltd. May 25 2021

Luxis Technology (Kunshan) Co. Ltd. May 26 2021

Luxshare Precision Investment Co.Ltd. August 27 2021

Yancheng Luxshare Corporate Management Services

September 18 2021

Partnership (Limited Partnership)

Luxshare Intelligent Equipment (Yancheng) Co. Ltd. October 20 2021

282Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxis Precision Intelligent Manufacture (Kunshan) Co. Ltd. July 2 2021

Luxshare Intelligent Manufacture Electornic Service

August 16 2021

(Kunshan) Co.Ltd.Liding Electronic Technology (Dongguan) Co.Ltd. August 10 2021

Luxshare Precision Technology(Nanjing) Co.Ltd. October 19 2021

Henan Lide Precision Industry Co. Ltd. July 27 2021

Changzhi Luxshare Precision Industry Co. Ltd. November 3 2021

The Company’s changes in scope of consolidation caused by deregistration of subsidiaries in 2021 are

stated as follows:

Company Date of deregistration

Ji’an Jizhou District Luxshare Electronic Co. Ltd. October 19 2021

Luxshare-ICT International Cable Inc. March 30 2021

Speedtech (LS-ICT) Co. Limited November 2 2021

LUXSHARE-ICT INTERNATIONAL B.V. April 6 2021

6. Others

IX. Equity in other entities

1. Equity in subsidiaries

(1) Composition of the enterprise group

Name of Main place of Place of Nature of Shareholding ratio Method of

subsidiary business registration business Direct Indirect acquisition

Luxshare

Precision Investment

Hong Kong Hong Kong 100 .00% Establishment

Technology Co. consulting

Ltd.Taiwan Luxshare Marketing

Taiwan Taiwan 100.00 % Establishment

Precision Limited business

Luxshare ICT Marketing

USA USA 100.00 % Establishment

Inc. business

Luxshare-ICT Marketing

UK UK 100.00 % Establishment

Europe Limited business

283Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare

Hong Kong Hong Kong Trade 100.00 % Establishment

Precision Limited

Yunding

Investment

Technology Co. Hong Kong Hong Kong 100.00 % Establishment

consulting

Ltd.Business

Huzhou Jiuding combination not

Processing and

Electronic Co. Huzhou Huzhou 100.00 % involving

manufacturing

Ltd. enterprises under

common control

LUXSHARE-ICT Marketing

Japan Japan 80.00 % Establishment

Japan Ltd. business

Korea

Marketing

LuxshareICT Co. Korea Korea 100.00 % Establishment

business

Ltd

Luxshare India Processing and

India Chennai 100.00 % Establishment

Private Limited manufacturing

Luxshare

Precision Investment

Hong Kong Hong Kong 100.00 % Establishment

Investment consulting

Co.Ltd.Luxis Technology Investment

Hong Kong Hong Kong 100.00 % Establishment

Limited consulting

Luxshare Liantao Processing and

India India 100.00 % Establishment

(India) Co. Ltd. manufacturing

Processing and

SUK PLASTICS Romania Romania 100.00 % Establishment

manufacturing

Business

combination not

ICT-LANTO

Hong Kong Hong Kong Trade 100.00 % involving

LIMITED(HK)

enterprises under

common control

Business

combination not

Processing and

SpeedTech Corp. Taiwan Taiwan 31.47 % involving

manufacturing

enterprises under

common control

Business

Processing and combination not

Castle Rock Inc. Taiwan Xinbei City 12.59 %

manufacturing involving

enterprises under

284Luxshare Precision Industry Co. Ltd. Annual Report 2021

common control

Business

combination not

Cyber Acoustics Processing and

Taiwan Taiwan 22.03 % involving

LLC(USA) manufacturing

enterprises under

common control

Business

combination not

Caldigit Holding Processing and

Taiwan Taiwan 12.59 % involving

Limited manufacturing

enterprises under

common control

Business

Taiqiao combination not

Investment

Investment Co. Taiwan Taiwan 31.47 % involving

consulting

Ltd. enterprises under

common control

Business

combination not

Taihan Precision Processing and

Taiwan Taiwan 9.22 % involving

Co. Ltd. manufacturing

enterprises under

common control

Henan Lide

Processing and

Precision Industry Henan province Henan province 58.88 % Establishment

manufacturing

Co. Ltd.Luxshare-ICT

Processing and

(Vietnam) Vietnam Vietnam 100.00 % Establishment

manufacturing

Limited

Luxshare

Precision Processing and

Vietnam Vietnam 100.00 % Establishment

(Yunzhong) Co. manufacturing

Ltd.Luxshare-ICT

Processing and

(NGHE AN) Vietnam Vietnam 100.00 % Establishment

manufacturing

Limited

Kunshan

Luxshare Processing and

Kunshan Kunshan 100.00 % Establishment

Precision Industry manufacturing

Co. Ltd.Kunshan

Processing and

Luxshare Kunshan Kunshan 100.00 % Establishment

manufacturing

Precision Mould

285Luxshare Precision Industry Co. Ltd. Annual Report 2021

Co. Ltd.Luxshare

Precision Industry Processing and

Baoding Baoding 100.00 % Establishment

(Baoding) Co. manufacturing

Ltd.Xuancheng

Luxshare Processing and

Anhui Xuancheng 100.00 % Establishment

Precision Industry manufacturing

Co. Ltd.Luxsahre Electric

Processing and

(Shanghai) Co. Shanghai Shanghai 88.00 % Establishment

manufacturing

Ltd.Luxshare

Precision Industry Processing and

Liyang Liyang 100.00 % Establishment

(Jiangsu) Co. manufacturing

Ltd.Yancheng

Luxshare Processing and

Yancheng Yancheng 100.00 % Establishment

Precision Industry manufacturing

Co. Ltd.Business

combination not

Lanto Electronic Processing and

Kunshan Kunshan 100.00 % involving

Limited manufacturing

enterprises under

common control

Business

Bozhou Lanto combination not

Processing and

Electronic Bozhou Bozhou 100.00 % involving

manufacturing

Limited enterprises under

common control

Bozhou Xuntao

Processing and

Electronic Bozhou Bozhou 100.00 % Establishment

manufacturing

Limited

Suining Luxshare

Processing and

Precision Industry Suining Suining 100.00 % Establishment

manufacturing

Co. Ltd.Business

Merry Electronics combination not

Processing and

(Suzhou) Co. Suzhou Suzhou 51.00 % involving

manufacturing

Ltd. enterprises under

common control

286Luxshare Precision Industry Co. Ltd. Annual Report 2021

Beijing Luxshare

Acoustic Processing and

Beijing Beijing 100.00 % Establishment

Technology Co. manufacturing

Ltd.Luxshare

Processing and

Precision Industry Changzhi Changzhi 100.00 % Establishment

manufacturing

(Shanxi) Co. Ltd.Changzhi

Luxshare Processing and

Changzhi Changzhi 100.00 % Establishment

Precision Industry manufacturing

Co. Ltd.Suzhou Liantao

Processing and

Electronic Co. Suzhou Suzhou 100.00 % Establishment

manufacturing

Ltd.Wan’an Xiexun

Processing and

Electronic Co. Wan’an Wan’an 100.00 % Establishment

manufacturing

Ltd.Business

combination

Xiexun Electronic Processing and

Ji’an Ji’an 100.00 % involving

(Ji'an) Co. Ltd. manufacturing

enterprises under

common control

ASAP

Technology Processing and

Ji’an Ji’an 100.00 % Establishment

(Jiangxi) Co. manufacturing

Ltd.Business

Yongxin County

combination not

Boshuo Processing and

Yongxin County Yongxin County 100.00 % involving

Electronic Co. manufacturing

enterprises under

Ltd.common control

Xinyu Xiexun

Processing and

Electronic Co. Xinyu Xinyu 100.00 % Establishment

manufacturing

Ltd.Jiangxi ASAP

Processing and

Electronic Co. Ji’an Ji’an 100.00 % Establishment

manufacturing

Ltd.Business

Fujian JK Wiring

Processing and combination not

Systems Co. Fuzhou Fuzhou 55.00 %

manufacturing involving

Ltd..enterprises under

287Luxshare Precision Industry Co. Ltd. Annual Report 2021

common control

Jianou JK Wiring Processing and

Jian’ou Jian’ou 55.00 % Establishment

Systems Co. Ltd. manufacturing

Luxshare Business

Electronic combination not

Processing and

Technology Kunshan Kunshan 100.00 % involving

manufacturing

(Kunshan) Co. enterprises under

Ltd. common control

Shenzhen

Luxshare Processing and

Shenzhen Shenzhen 100.00 % Establishment

Acoustics manufacturing

Technology Ltd.Fengshun

Luxshare Processing and

Fengshun Fengshun 100.00 % Establishment

Precision Industry manufacturing

Co. Ltd.Luxshare

Processing and

Precision Industry Chuzhou Chuzhou 100.00 % Establishment

manufacturing

(Chuzhou) Ltd.

Business

SuK combination not

Processing and

Kunststofftechnik Germany Germany 100.00 % involving

manufacturing

GmbH enterprises under

common control

Business

Luxshare combination not

Processing and

Automation Kunshan Kunshan 70.00 % involving

manufacturing

(Jiangsu) Ltd. enterprises under

common control

Dongguan

Luxshare Processing and

Dongguan Dongguan 100.00 % Establishment

Precision Industry manufacturing

Co. Ltd.Guangdong

Luxshare& Merry Processing and

Dongguan Dongguan 51.00 % Establishment

Electronics Co. manufacturing

Ltd.M&A Merry Business

Electronics Processing and combination not

Huizhou Huizhou 51.00 %

(Huizhou) Co. manufacturing involving

LTD. enterprises under

288Luxshare Precision Industry Co. Ltd. Annual Report 2021

common control

Business

M&A Merry

combination not

Electronics

Shanghai Shanghai Trade 51.00 % involving

(Shanghai) Co.enterprises under

Ltd.common control

Xingning

Luxshare Processing and

Xingning Xingning 100.00 % Establishment

Electronic Co. manufacturing

Ltd.Jiangxi Luxshare

Intelligent Processing and

Ji’an Ji’an 100.00 % Establishment

Manufacture Co. manufacturing

Ltd.Shenzhen

Luxshare Processing and

Shenzhen Shenzhen 70.00 % Establishment

Standard Co. manufacturing

Ltd.Luxshare

Processing and

Standard Limited Hong Kong Hong Kong 70.00 % Establishment

manufacturing

(HK)

Luxshare

Processing and

Precision Industry Enshi Enshi 100.00 % Establishment

manufacturing

(Enshi) Co. Ltd.

Luxshare

Precision Industry Processing and

Suzhou Suzhou 100.00 % Establishment

(Suzhou) Co. manufacturing

Ltd.Luxshare iTech

Processing and

(Zhejiang) Co. Jiashan Jiashan 100.00 % Establishment

manufacturing

LTD.Luxshare

Intelligent

Manufacture Processing and

Changshu Changshu 100.00 % Establishment

Technology manufacturing

(Changshu) Co.

Ltd.Dongguan

Luxshare Processing and

Dongguan Dongguan 90.00 % Establishment

Technology Co. manufacturing

Ltd.

289Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare

Processing and

Technologies Hong Kong Hong Kong 90.00 % Establishment

manufacturing

Limited

Business

Donguan Xuntao combination not

Processing and

Electronic Co. Dongguan Dongguan 90.00 % involving

manufacturing

Ltd. enterprises under

common control

Xingning

Luxshare Processing and

Xingning Xingning 90.00 % Establishment

Technology Co. manufacturing

Ltd.Kunshan-Luxshar

Processing and

e RF Technology Kunshan Kunshan 90.00 % Establishment

manufacturing

Co. Ltd.Hangzhou Xuntao Hangzhou Hangzhou

Processing and

Technology Co. 90.00 % Establishment

manufacturing

Ltd.Business

Zhejiang Puxing

combination not

Electronic Zhejiang Zhejiang Processing and

63.00 % involving

Technology Co. province province manufacturing

enterprises under

Ltd.common control

Guangdong

Luxshare

Smart-Link Processing and

Dongguan Dongguan 90.00 % Establishment

Electronic manufacturing

Technology Co.Ltd.Changshu

Luxshare

Industrial Investment

Changshu Changshu 100.00 % Establishment

Investment consulting

Management Co.Ltd.Rugao Luxshare

Corporate

Management

Investment

Services Rugao Rugao 9.09 % Establishment

consulting

Partnership

(Limited

Partnership)

290Luxshare Precision Industry Co. Ltd. Annual Report 2021

Lianxun

Intelligent Processing and

Rugao Rugao 9.09 % Establishment

Equipment manufacturing

(Rugao) Co. Ltd.Yancheng

Luxshare

Corporate

Management Investment

Yancheng Yancheng 9.09 % Establishment

Services consulting

Partnership

(Limited

Partnership)

Luxshare

Intelligent

Investment

Equipment Yancheng Yancheng 9.14 % Establishment

consulting

(Yancheng) Co.Ltd.Kunshan

Luxshare

Enterprise Investment

Kunshan Kunshan 100.00 % Establishment

Management consulting

Development Co.Ltd.Kunshan

Luxshare

Corporate

Management Investment

Kunshan Kunshan 9.09 % Establishment

Services consulting

Partnership

(Limited

Partnership)

Luxshare

Intelligent

Processing and

Equipment Kunshan Kunshan 9.46 % Establishment

manufacturing

(Kunshan) Co.Ltd.Luxshare

Precision Processing and

Xi’an Xi’an 100.00 % Establishment

Technology(Xi’a manufacturing

n) Co. Ltd.Luxshare Processing and

Enshi Enshi 100.00 % Establishment

Electronic manufacturing

291Luxshare Precision Industry Co. Ltd. Annual Report 2021

Technology

(Enshi) Co. Ltd.

Luxis Technology

Processing and

(Kunshan) Co. Kunshan Kunshan 100.00 % Establishment

manufacturing

Ltd.Business

Luxcase Precision

combination not

Technology Processing and

Yancheng Yancheng 51.83 % involving

(Yancheng) Co. manufacturing

enterprises under

Ltd.common control

Business

Ri Pei Computer

combination not

Accessory Processing and

Shanghai Shanghai 51.83 % involving

(Shanghai) Co. manufacturing

enterprises under

Ltd.common control

Ri Shan Business

Computer combination not

Processing and

Accessory Jiashan Jiashan 51.83 % involving

manufacturing

(Jiashan) Co. enterprises under

Ltd. common control

Ri Ming Business

Computer combination not

Processing and

Accessory Shanghai Shanghai 51.83 % involving

manufacturing

(Shanghai) Co. enterprises under

Ltd. common control

Sheng-Rui Business

Electronic combination not

Processing and

Technology Shanghai Shanghai 51.83 % involving

manufacturing

(Shanghai) enterprises under

Limited common control

Business

Rida Intelligent

combination not

Manufacture Processing and

Rugao Rugao 51.83 % involving

Technology manufacturing

enterprises under

(Rugao) Co.LTD.common control

Business

Caseteck combination not

Investment

Singapore Singapore Singapore 51.83 % involving

consulting

PTE.LTD. enterprises under

common control

Luxshare Smart

Rugao Rugao Processing and 51.83 % Establishment

Technology

292Luxshare Precision Industry Co. Ltd. Annual Report 2021

(Rugao) Co. Ltd. manufacturing

Luxis Precision

Intelligent

Processing and

Manufacture Kunshan Kunshan 100.00 % Establishment

manufacturing

(Kunshan) Co.Ltd.Luxshare

Intelligent

Manufacture

Processing and

Electornic Kunshan Kunshan 100.00 % Establishment

manufacturing

Service

(Kunshan) Co.Ltd.Liding Electronic

Technology Processing and

Dongguan Dongguan 100.00 % Establishment

(Dongguan) Co. manufacturing

Ltd.Luxshare

Precision Processing and

Nanjing Nanjing 100.00 % Establishment

Technology(Nanji manufacturing

ng) Co. Ltd.Descriptions on the difference between the shareholding ratio and the voting right ratio in the subsidiary:

Basis for holding half or less voting rights but still controlling the investee and holding more than half of the voting rights but not

controlling the investee:

Basis for the control of significant structured entities included in the consolidation scope:

Basis for determining whether a company is an agent or a principal:

Other descriptions:

(2) Significant non-wholly-owned subsidiaries

In RMB

Dividends declared and

Profit or loss attributable Balance of minority

Shareholding ratio of distributed to minority

Name of subsidiary to minority shareholders interest at the end of the

minority shareholders shareholders in the

in the current period period

current period

Fujian JK Wiring

45.00%6899005.4771691258.05

Systems Co. Ltd..Luxshare Automation

30.00%21291801.32119777830.66

(Jiangsu) Ltd.M&A Merry Electronics

49.00%49435159.94259162160.63

(Huizhou) Co. LTD

293Luxshare Precision Industry Co. Ltd. Annual Report 2021

Merry Electronics

49.00%22553757.35742161417.42

(Suzhou) Co. Ltd.SpeedTech Corp. 68.53 % 139 416880.55 598 295857.99

Luxcase Precision

Technology (Yancheng) 48.17 % 446 137087.51 5 290647766.48

Co. Ltd.Descriptions on the difference between the shareholding ratio of minority shareholders and their voting right ratio in the subsidiary:

Other descriptions:

(3) Main financial information of significant non-wholly-owned subsidiaries

In RMB

Closing balance Opening balance

Name of

subsidiar Non-curr Non-curr Non-curr Non-currCurrent Total Current Total Current Total Current Total

y ent ent ent ent assets assets liabilities liabilities assets assets liabilities liabilities

assets liabilities assets liabilities

Fujian

JK

Wiring 201 461 39 5390 241 000 78 7394 2 94738 81 6868 163 428 37 8816 201 310 56 6395 439 433. 57 0789

Systems 773.41 06.41 779.82 90.18 2.89 73.07 973.90 49.81 623.71 28.54 25 61.79

Co.Ltd..Luxshare

Automati

738818271114765930366214456501.366670632811253271658138334035434922.334470

on

949.7931.45381.24443.8781945.68583.1704.17687.34875.8747798.34

(Jiangsu)

Ltd.M&A

Merry

Electroni

778911188620967531432751587757438629922468912892101375580109773736587846

cs

522.39083.25605.64659.976.98236.95906.4671.118177.57436.019.47805.48

(Huizhou

) Co.LTD.Merry

Electroni

104470135695240166862367246818887048118169140964259134109280312439112405

cs

7295.026783.454078.47112.9127.98940.897694.145063.392757.536110.9118.320029.23

(Suzhou)

Co. Ltd.SpeedTe 2 60026 1 59228 4 19254 1 83515 490 362 2 32551 2 16213 1 16024 3 32237 1 95065 145 273 2 09592

ch Corp. 0430.80 2396.88 2827.68 5679.00 074.14 7753.14 0004.28 7787.78 7792.06 5927.00 694.52 9621.52

294Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxcase

Precision

Technolo 22 7784 32 1180 20 7838 21 1214

933957337685

gy 81259.2 51618.1 02429.8 88176.9

0358.86747.10

(Yanche 6 2 9 9

ng) Co.Ltd.In RMB

Amount recognized in the current period Amount recognized in the prior period

Name of Cash flow Cash flow Total Total

subsidiary Operating from Operating from Net profits comprehensi Net profits comprehensi

income operating income operating

ve incomes ve incomes

activities activities

Fujian JK

Wiring 326 411016. 15 331123.2 15 082244.8 19 186063.7 250 073562. -26954549.2 16 729734.4

2911512.54

Systems Co. 33 7 3 6 76 3 2

Ltd..Luxshare

863982192.70972671.175591546.5124551641.766700321.82205745.485533891.3-31470651.0

Automation

72160247093

(Jiangsu) Ltd.M&A Merry

Electronics 1 28068586 100 888081. 102 990996. -113129941. 1 35211126 114 971511. 114 817091. 196 105592.(Huizhou) 3.21 51 60 39 5.87 03 01 33

Co. LTD.Merry

Electronics 2 37327824 46 028076.2 47 322409.2 73 648850.1 2 51000653 104 525341. 105 446016. 413 323812.(Suzhou) Co. 6.97 2 8 6 4.54 39 56 87

Ltd.SpeedTech 4 31639511 378 360435. 640 576904. 251 280685. 3 46333278 327 841387. 365 550567. 437 331860.Corp. 1.91 24 00 70 1.62 24 60 62

Luxcase

Precision

497271230961423139.991691069.893969747.

Technology

10.93907646

(Yancheng)

Co. Ltd.Other descriptions:

295Luxshare Precision Industry Co. Ltd. Annual Report 2021

(4) Major restrictions on the use of enterprise group assets and repayment of enterprise group debts

(5) Financial support or other support provided to structured entities included in the scope of consolidated

financial statements

Other descriptions:

2. Transactions in which the share of owners’ equity in the subsidiary changes and still controls the

subsidiary

(1) Descriptions on changes in the shares of owners’ equity in subsidiaries

(2) Impact of transactions on minority interest and owners’ equity attributable to the parent company

In RMB

Acquisition cost/ disposal consideration

--Cash

-- Fair value of non-cash assets

Total acquisition cost/ disposal consideration

Less: share of subsidiaries’ net assets calculated by the

proportion of acquired/disposed equity shares

Difference

Including: Adjustment to capital reserve

Adjustment to surplus reserve

Adjustment to undistributed profits

Other descriptions

3. Equity in joint ventures or associates

(1) Significant joint ventures or associates

Shareholding ratio Accounting

Name of joint treatment of

Main place of Place of Nature of

venture or investment in

business registration business

associate Direct Indirect joint venture or

associate

Descriptions on the difference between the shareholding ratio and the voting right ratio in the joint venture or associate:

Basis for holding less than 20% of the voting rights but having significant influence or holding 20% or more of the voting rights but

without significant influence:

296Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) Main financial information of significant joint ventures

In RMB

Closing balance/Amount recognized in the Opening balance/Amount recognized in

current period the prior period

Current assets

Including: cash and cash equivalents

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Minority interests

Equity attributable to shareholders of the

parent company

Share of net assets calculated by

shareholding proportion

Adjusted items:

-- Goodwill

-- Unrealized profit of internal transactions

--Other

Book value of equity investment in joint

ventures

Fair value of equity investment in joint

ventures with published quoted price

Operating income

Financial expenses

Income tax expenses

Net profits

Net profit from discontinued operation

Other comprehensive income

Total comprehensive incomes

Dividends received from joint ventures in

the current year

297Luxshare Precision Industry Co. Ltd. Annual Report 2021

Other descriptions

(3) Main financial information of significant associates

In RMB

Closing balance/Amount recognized in the Opening balance/Amount recognized in

current period the prior period

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Minority interests

Equity attributable to shareholders of the

parent company

Share of net assets calculated by

shareholding proportion

Adjusted items:

-- Goodwill

-- Unrealized profit of internal transactions

--Other

Book value of equity investment in

associates

Fair value of equity investment in

associates with published quoted price

Operating income

Net profits

Net profit from discontinued operation

Other comprehensive income

Total comprehensive incomes

Dividends received from associates in the

current year

Other descriptions

298Luxshare Precision Industry Co. Ltd. Annual Report 2021

(4) Summary financial information of insignificant joint ventures and associates

In RMB

Closing balance/Amount recognized in Opening balance/Amount recognized in

the current period the prior period

Joint ventures: -- --

Total amount of the following items

----

calculated according to shareholding ratio

Associates: -- --

Total amount of the following items

----

calculated according to shareholding ratio

Other descriptions

(5) Descriptions on significant restrictions on the ability of joint ventures or associates to transfer funds to

the Company

(6) Excess loss of joint ventures or associates

In RMB

Unrecognized losses in the

Name of joint venture or Cumulative unrecognized losses Cumulative unrecognized losses

current period (or net profit

associate accumulated in previous period at the end of the period

shared in the current period)

Other descriptions

(7) Unconfirmed commitments related to investment in joint ventures

(8) Contingent liabilities related to investment in joint ventures or associates

4. Significant joint operations

Name of joint Main place of Shareholding ratio / share

Place of registration Nature of business

operation business Direct Indirect

Descriptions on the difference between the shareholding ratio or share and the voting rights ratio in the joint operation:

Basis for classifying a separate entity into joint operation:

Other descriptions

5. Equity in structured entities not included in the consolidated financial statements

Descriptions on structured entities not included in the consolidated financial statements:

299Luxshare Precision Industry Co. Ltd. Annual Report 2021

6. Others

X. Risks associated with financial instruments

1. Credit risks

Credit risks refer to the risks that one party to a financial instrument suffers financial losses due to the

failure of the other party to perform its obligations.The customer credit risks mainly faced by the

Company come from credit sale.Before signing a new contract the Company will assess the credit risks

generated by new customers from perspectives such as external credit rating and in some cases bank

credit certification (when the same is available).The Company has a credit limit which is the maximum

amount without additional approval for each customer.The Company ensures that its overall credit risk is within the controllable range through quarterly

monitoring of credit rating of existing customers and monthly review of aging analysis of accounts

receivable.Customers are grouped according to their credit characteristics when the credit risks from them

are monitored.Customers rated as “high risk” will be placed on the restricted customer list and only with

additional approval can the Company sell them on credit in the future period otherwise they must be

required to pay the corresponding amount in advance.

2. Market risks

Market risks of financial instruments refer to the risks that the fair value or future cash flow of financial

instruments will fluctuate due to market price changes including exchange rate risk interest rate risk and

other price risks.

(1) Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments will

fluctuate due to the change in market interest rate.The interest rate risk faced by the Company mainly

comes from the long-term and short-term borrowings from banks.The Company under its current policy

seeks to borrow in USD with a lower loan interest rate.In order to obtain loans the Company has

provided guarantee for its wholly-owned overseas subsidiaries ICT-Lanto Limited and Luxshare

Precision Limited for overseas financing.

(2) Exchange rate risk

Exchange rate risk refers to the risk that the fair value of financial instruments or future cash flow will

fluctuate due to the change in foreign exchange rate.The Company tries to match foreign currency income

with foreign currency expenditure to reduce exchange rate risk.In addition the Company has signed

forward foreign exchange contracts to avoid exchange rate risk.

(3) Other price risks

The Company holds equity investments of other listed companies and the management believes that the

market price risks faced by these investment activities is acceptable.The equity investments of listed companies held by the Company are presented as follows:

Item Closing balance Balance at the end of last

year

Other investments in equity 210 278829.12 114 221319.04

instruments

300Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 210 278829.12 114 221319.04

3. Liquidity risks

Liquidity risks refer to with respect to an enterprise the risks of capital shortage to the enterprise when it

fulfills its obligation of settlement by cash or other financial assets.It is the Company’s policy to ensure

that there is sufficient cash to pay its debts as they fall due.The liquidity risks are controlled by the

financial department of the Company in a unified manner.By monitoring the cash balance marketable

securities that can be realized at any time and rolling forecast of cash flow in the next 12 months the

financial department ensures that the Company has sufficient funds to repay debts under all reasonable

forecasts.XI. Disclosure of fair value

1. Closing fair value of assets and liabilities measured at fair value

In RMB

Closing balance of fair value

Item

Level I Level II Level III Total

I. Continuous fair value

--------

measurement

(I) Held-for-trading

115918643.051991199461.992107118105.04

financial assets

1. Financial assets at fair

value through profit or 115 918643.05 1 991199461.99 2 107118105.04

loss

(2) Equity instrument

5700000.005700000.00

investment

(3) Derivative financial

115918643.051991199461.992107118105.04

assets

(III) Other equity

210278829.1225697319.30235976148.42

instrument investments

(VI) Held-for-trading

41436.0041436.00

financial liabilities

Including: held-for-trading

41436.0041436.00

bonds issued

II. Non-continuous fair

--------

value measurement

301Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Basis for determining the market price of the items continuously and not continuously measured at fair

value at level I

Level I inputs are quoted market price (unadjusted) in an active market for an identical asset or liability available

at the date of measurement.

3. Valuation technology and qualitative and quantitative information of important parameters used in the

items continuously and not continuously measured at fair value at level II.Level II inputs are inputs other than quoted market price (Level I) that are directly or indirectly observable for the

asset or liability.

4. Valuation technology and qualitative and quantitative information of important parameters used in the

items continuously and not continuously measured at fair value at level III

Level III inputs are unobservable inputs for the asset or liability.

5. Adjustment information between the opening book value and the closing book value and the sensitivity

analysis of unobservable parameters for items continuously measured at fair value at the third level

None

6. For items continuously measured at fair value if there is conversion between different levels in the

current period the reasons for the conversion and the policy for determining the conversion time point

None

7. Changes in valuation technology in the current period and reasons for changes

None

8. Fair value of financial assets and financial liabilities not measured at fair value

None

9. Others

None

302Luxshare Precision Industry Co. Ltd. Annual Report 2021

XII. Related parties and related-party transactions

1. The parent company of the Company

Shareholding ratio of Voting rights ratio of

Name of parent

Place of registration Nature of business Registered capital the parent company the parent company

company

in the Company in the Company

Luxshare Limited Hong Kong Industry HKD10000 38.63 % 38.63 %

Descriptions on the parent company of the Company

The ultimate controller of the Company is WANG Laichun and WANG Laisheng;

As of December 31 2021 Luxshare Limited has pledged 19.23% of shares it held.The ultimate controller of the enterprise is.Other descriptions:

2. Subsidiaries of the Company

Please refer to Note “IX.Equity in other entities” for details of the Company’s subsidiaries

3. Joint ventures and associates of the Company

Please refer to Note “IX.Equity in other entities” for details of the Company’s significant joint ventures or associates.Other joint ventures or associates that have related-party transactions with the Company in the current period or formed a balance due

to related-party transactions with the Company in the prior period are as follows:

Name of joint venture or associate Relationship with the Company

Joint-stock company of a majority-owned sub-subsidiary of the

Riyimao Industrial Co. Ltd.Company

Joint-stock company of a majority-owned sub-subsidiary of the

Assem Technology Co. Ltd.Company

Joint-stock company of a majority-owned sub-subsidiary of the

Xuande Energy Co. Ltd.Company

Joint-stock company of a majority-owned sub-subsidiary of the

Ayala Design Co.Ltd.(Japan)

Company

Joint-stock company of a majority-owned sub-subsidiary of the

Caldigit (UK) Limited

Company

Joint-stock company of a majority-owned sub-subsidiary of the

Caldigit American Inc.Company

MERRY & LUXSHARE (VIET NAM) CO.LTD Joint-stock company of the Company’s subsidiary

Zhuhai Kinwong Flexible Circuit Co. Ltd. Associates of the Company

Other descriptions

303Luxshare Precision Industry Co. Ltd. Annual Report 2021

4. Other related parties

Name of other related parties Relationship between other related parties and the Company

Bisaisi Automotive Technology (Suzhou) Co. Ltd. An enterprise controlled by the Company’s parent company

BCS AUTOMOTIVE INTERFACE SOLUTIONS An enterprise controlled by the Company’s parent company

Luxsan Technology (Kunshan) Co. Ltd. An enterprise controlled by the Company’s parent company

Luxsan Precision Intelligent Manufacture (Kunshan) Co. Ltd. An enterprise controlled by the Company’s parent company

LUXSAN TECHNOLOGY LIMITED An enterprise controlled by the Company’s parent company

Guangzhou Luxvisions Innovation Technology Limited Other related party of the Company

Shangrao City Lijing Innovation Technology Co. Ltd. Other related party of the Company

Luxvisions Innovation Limited Other related party of the Company

Xunmu Information Technology (Shanghai) Co. Ltd. Controlled by the de facto controller

Other descriptions

5. Related-party transactions

(1) Related-party transactions of purchasing and selling goods rendering and accepting services

Purchasing goods/accepting services

In RMB

Amount Whether the

Related-party Approved transaction Amount recognized in

Related party recognized in the transaction limit is

transactions limit the prior period

current period exceeded

Riyimao Industrial

Purchasing goods 14 579642.24 No 8 030338.04

Co. Ltd.Assem Technology Equipment and

1 544704.07 No 1 742625.00

Co. Ltd. apparatus

Assem Technology

Other services 7 025321.51 No 7 133.15

Co. Ltd.Zhuhai Kinwong

Flexible Circuit Co. Purchasing goods 5 143.81 No 40 830964.42

Ltd.Bisaisi Automotive

Technology Purchasing goods 3 708934.25 No 676 913.53

(Suzhou) Co. Ltd.Guangzhou

Luxvisions

Purchasing goods 1 669585.05 No 11 134.40

Innovation

Technology Limited

304Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxsan Technology

Purchasing goods 403 077.31 No

(Kunshan) Co. Ltd.Luxsan Precision

Intelligent

Purchasing goods 20 052496.84 No

Manufacture

(Kunshan) Co. Ltd.LUXSAN

TECHNOLOGY Purchasing goods 27 367615.80 No

LIMITED

MERRY &

LUXSHARE (VIET Purchasing goods 1 027736.62 No

NAM) CO.LTD

Selling goods/rendering services

In RMB

Amount recognized in the Amount recognized in the prior

Related party Related-party transactions

current period period

Riyimao Industrial Co. Ltd. Processing goods purchased 6 691.91

Riyimao Industrial Co. Ltd. Other services 886.00 1 842.54

Ayala Design Co. Ltd.(Japan) Selling products 4 495492.93

Caldigit (UK) Limited Selling products 31 496213.08

Caldigit American Inc. Selling products 135 401289.61

Assem Technology Co. Ltd. Other services 297 821.29 7 133.15

Zhuhai Kinwong Flexible

Selling products 20 714.40

Circuit Co. Ltd.Shangrao City Lijing

Innovation Technology Co. Selling products 346 000.00 1 383434.92

Ltd.Guangzhou Luxvisions

Equipment and apparatus 2 542359.91 43 045170.20

Innovation Technology Limited

Luxvisions Innovation Limited Selling products 18 034.55

Bisaisi Automotive Technology

Selling products 218 717133.08 106 918653.51

(Suzhou) Co. Ltd.BCS AUTOMOTIVE

Selling products 910 682.54

INTERFACE SOLUTIONS

Luxsan Technology (Kunshan)

Selling products 417 147307.20

Co. Ltd.Luxsan Precision Intelligent

Selling products 20 080496.26

Manufacture (Kunshan) Co.

305Luxshare Precision Industry Co. Ltd. Annual Report 2021

Ltd.Xunmu Information Technology

Selling products 10 792326.99

(Shanghai) Co. Ltd.MERRY & LUXSHARE (VIET

Selling products 16 898647.66

NAM) CO.LTD

Descriptions on related-party transactions of purchasing and selling goods and providing and accepting services

The approved related-party transactions amounted to RMB 777 million in total.

(2) Related-party entrusted management/contracting and entrusted management/outsourcing

Entrusted management/contracting of the Company:

In RMB

Trusteeship

Commencement Pricing basis of

Types of Termination date income/contract

Name of Name of trustee/ date of trusteeship

entrusted / of entrustment / income

principal/owner contractor entrustment/contr income/contract

contracted assets contract recognized in the

act income

current period

Descriptions on related-party trusteeship/contract

Statement of entrusted management/outsourcing of the Company:

In RMB

Trusteeship

Commencement Pricing basis of

Types of Termination date income/contract

Name of Name of trustee/ date of trusteeship

entrusted / of entrustment / income

principal/owner contractor entrustment/contr income/contract

contracted assets contract recognized in the

act income

current period

Descriptions on related-party management/outsourcing

(3) Related-party lease

The Company acts as the lessor:

In RMB

Lease income recognized in the Lease income recognized in the

Name of lessee Types of leased assets

current period previous period

Riyimao Industrial Co. Ltd. Fixed assets 0.00 21 117.59

Xuande Energy Co. Ltd. Fixed assets 0.00 108 412.88

The Company acts as the lessee:

In RMB

Lease income recognized in the Lease income recognized in the

Name of lessor Types of leased assets

current period previous period

Luxsan Precision Intelligent Fixed assets and buildings 9 801826.37 0.00

306Luxshare Precision Industry Co. Ltd. Annual Report 2021

Manufacture (Kunshan) Co.Ltd.Descriptions on related-party leases

Name of Types of Current period Prior period

lessor leased assets Rental costs for short-term Rents Right-of-use Interest cost of Lease

leases and low-value asset paid assets increased lease liabilities payments

leases that are treated in a assumed recognized

simplified manner and

variable lease payments that

are not included in the

measurement of lease

liabilities

Luxsan Fixed assets 85 406789.07 1 536653.21

Precision and buildings

Intelligent

Manufacture

(Kunshan)

Co. Ltd.

(4) Related-party guarantee

The Company acts as the guarantor

In RMB

Commencement date of Maturity date of Whether the guarantee

Guaranteed party Amount of guarantee

guarantee guarantee has been fulfilled

Luxshare Precision

5 100560000.00 July 20 2020 July 19 2025 No

Limited

The Company acts as the guaranteed party

In RMB

Commencement date of Maturity date of Whether the guarantee

Guarantor Amount of guarantee

guarantee guarantee has been fulfilled

Descriptions on related-party guarantee

(5) Related-party loans

In RMB

Related party Loan amount Commencement date Maturity date Remarks

Borrow

Lend

307Luxshare Precision Industry Co. Ltd. Annual Report 2021

(6) Asset transfer and debt restructuring of related parties

In RMB

Amount recognized in the Amount recognized in the prior

Related party Related-party transactions

current period period

(7) Remuneration of key managers

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Compensation of key managers 10 465440.15 11 414640.00

Share-based payment of key managers 5 454355.12 9 586952.73

(8) Other related-party transactions

6. Accounts receivable and payable of related parties

(1) Receivables

In RMB

Closing balance Opening balance

Item Related party

Book balance Bad-debt provision Book balance Bad-debt provision

Accounts receivable

Shangrao City Lijing

Innovation 324 853.80 162.43

Technology Co. Ltd.Guangzhou

Luxvisions

1617967.38808.9814398489.557199.24

Innovation

Technology Limited

Bisaisi Automotive

Technology 158 076590.05 79 038.30 59 654508.75 29 827.25

(Suzhou) Co. Ltd.Ayala Design

890628.97445.31

Co.Ltd.(Japan)

Caldigit (UK)

17773116.028886.56

Limited

Caldigit American

38290629.4419145.31

Inc.BCS 95 631.05 47.82

308Luxshare Precision Industry Co. Ltd. Annual Report 2021

AUTOMOTIVE

INTERFACE

SOLUTIONS

Assem Technology

311427.22155.71

Co. Ltd.Luxsan Technology

39532101.8819766.05

(Kunshan) Co. Ltd.Xunmu Information

Technology 12 256936.88 6 128.47

(Shanghai) Co. Ltd.Merry & Luxshare(Vietnam) Co. 6 316914.83 3 158.46

Ltd

Other receivables

Guangzhou

Luxvisions

69933.44349.67

Innovation

Technology Limited

Bisaisi Automotive

Technology 4 200.00 21.00

(Suzhou) Co. Ltd.Xuande Energy Co.

167101.03835.51168480.23842.40

Ltd.Luxsan Technology

685.633.43

(Kunshan) Co. Ltd.BCS

AUTOMOTIVE

803488.224017.44

INTERFACE

SOLUTIONS

Merry & Luxshare(Vietnam) Co. 84 161.60 420.81

Ltd

(2) Payables

In RMB

Item Related party Closing book balance Opening book balance

Accounts payable

Assem Technology Co. Ltd. 5 479111.65

Guangzhou Luxvisions 1 445279.42 12 581.87

309Luxshare Precision Industry Co. Ltd. Annual Report 2021

Innovation Technology Limited

Luxvisions Innovation Limited 80 169.45

Bisaisi Automotive Technology

2980261.04447157.67

(Suzhou) Co. Ltd.Luxsan Precision Intelligent

Manufacture (Kunshan) Co. 37 710113.75

Ltd.Luxsan Technology (Kunshan)

398415.58

Co. Ltd.Riyimao Industrial Co. Ltd. 8 597415.91 3 195766.80

Zhuhai Kinwong Flexible

5143.81

Circuit Co. Ltd.Merry & Luxshare (Vietnam)

1015850.48

Co. Ltd

LUXSAN TECHNOLOGY

23227385.80

LIMITED

Other payables

Assem Technology Co. Ltd. 2 537.96

7. Commitment of related parties

8. Others

XIII. Share-based payment

1. General situation of share-based payment

√ Applicable □ N/A

In RMB

Total amount of the Company’s equity instruments granted in the current

52092000.00

period

Total amount of the Company’s equity instruments exercised in the current

53480164.00

period

Total amount of the Company’s equity instruments invalid in the current

16851105.02

period

The range of exercise prices of Company’s outstanding stock options at

See the following

the end of the period and the remaining term of the contract

The range of exercise prices of other equity instruments issued by the

See the following

Company at the end of the period and the remaining term of the contract

Other descriptions

310Luxshare Precision Industry Co. Ltd. Annual Report 2021

The range of exercise prices of Company’s outstanding stock options at the end of the period and the remaining term of the

contract: (1) On September 25 2018 the Proposal on Granting Stock Options to Grantees under the 2018 Stock Option

Incentive Plan of Luxshare Precision Industry Co. Ltd.was approved upon deliberation at the Fifth Meeting of the Fourth

Session of the Board of Directors of the Company. Accordingly the Company granted 97.50 million of stock options to

1899 eligible grantees at the exercise price of RMB17.58 per share.After 12 months from the date on which the

registration of grants was completed grantees meeting the exercise conditions would exercise the options in five periods

with a proportion of 20% for each period in the following 60 months; According to the Proposal on Satisfying the Exercise

Conditions for the Second Exercise Period under the 2018 Stock Option Incentive Plan approved upon deliberation at the

Twenty-seventh Meeting of the Fourth Session of the Board of Directors of the Company held on December 2 2020 given

that the exercise condition for the second exercise period under the 2018 Stock Option Incentive Plan had been matured it

was agreed that 1718 grantees of the 2018 Stock Option Incentive Plan would independently exercise their options at the

exercise price of RMB10.28 per share with the estimated stock options to be exercised numbering 31212577 (the actual

number of stock options to be exercised shall be subject to registered number by Shenzhen Branch of China Securities

Depository and Clearing Co. Ltd.)

(2) On April 22 2019 the Company held the Ninth Meeting of the Fourth Session of the Board of Directors deliberating

and approving the Proposal on Granting Stock Options to Initial Grantees under the 2019 Stock Option Incentive Plan of

Luxshare Precision Industry Co. Ltd. whereby it was determined that 50076000 stock options would be granted to 348

eligible grantees and 12 519000 stock options would be reserved for future granting.The stock options initially granted

under this incentive plan was RMB 23.36 per share.On November 27 2019 the Company held the Thirteenth Meeting of

the Fourth Session of the Board of Directors deliberating and approving the Proposal on Granting Stock Options to

Grantees Reserved under the 2019 Stock Option Incentive Plan pursuant to which the Company granted 16274700 stock

options to 263 eligible grantees at an exercise price of RMB17.93 per share and after 12 months from the date on which

the registration of grants was completed grantees meeting the exercise conditions would exercise the stock options in five

periods with a proportion of 20% for each period in the following 60 months.On June 22 2020 the Company held the Nineteenth Meeting of the Fourth Session of the Board of Directors deliberating

and approving the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period under the 2019 Stock

Option Incentive Plan pursuant to which the exercise condition for the first exercise period under the 2019 Stock Option

Incentive Plan was matured.Therefore it was agreed that 339 initial grantees of the 2019 Stock Option Incentive Plan

would independently exercise their options at the exercise price of RMB13.70 per share with the estimated stock options to

be exercised numbering 16456708 (the actual number of stock options to be exercised is subject to registered number by

Shenzhen Branch of China Securities Depository and Clearing Co. Ltd.).On December 32021 the Company held the Sixth Meeting of the Fifth Session of the Board of Directors deliberating and

approving the Proposal on Granting Stock Options to Grantees under the 2021 Stock Option Incentive Plan of Luxshare

Precision Industry Co. Ltd. whereby it was determined that 52419000 stock options would be granted to 1097 eligible

grantees on December 3 2021 as the grant date of the incentive plan.The exercise price of stock options initially granted

under this incentive plan was RMB 35.87 per share.Since 22 original grantees resigned from the Company and 3 original

grantees gave up all stock options to be granted to them for personal reasons the number of grantees subject to this stock

option incentive was changed from 1097 to 1072 and the quantity of stock options granted was changed from 52419000

to 52092000.

2. Share-based payment settled in equity

√ Applicable □ N/A

In RMB

311Luxshare Precision Industry Co. Ltd. Annual Report 2021

Method of determining the fair value of equity instruments on the

Black-Scholes model

grant date

The determination is made by the Company according to the

Basis for determining the number of exercisable equity instruments equity instruments corresponding to the on-the-job grantees

and the Company’s performance forecast in the future.Reasons for significant differences between current and prior

None

estimates

Cumulative amount of share-based payment settled in equity

937782848.94

included in the capital reserve

Total amount of share-based payment settled in equity recognized in

237932583.86

the current period

Other descriptions

(1) On September 25 2018 the Company held the Fifth Meeting of the Fourth Session of the Board of Directors and the

Fifth Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on Granting

Stock Options to Grantees under the 2018 Stock Option Incentive Plan of Luxshare Precision Industry Co. Ltd. whereby it

was determined that 97500000 stock options would be granted to 1899 eligible grantees on September 25 2018 as the

grant date of the incentive plan.On November 27 2019 the Company held the Thirteenth Meeting of the Fourth Session of the Board of Directors and the

Thirteenth Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting

the Exercise Price and Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options as well as

the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period of the 2018 Stock Option Incentive Plan.According to relevant provisions of the Measures for Managing Equity Incentives of Listed Companies the Company’s 2018

Stock Option Incentive Plan (Draft) and the Administrative Measures for the Implementation and Assessment of the 2018

Stock Option Incentive Plan and as authorized by the Company’s second extraordinary general meeting of shareholders in

2018 the adjustment of the exercise price and quantity under the stock option incentive plan and the cancellation of some

options was ratified in response to the implementation by the Company of the annual equity distribution plan in 2018 and the

resignation of grantees etc..After the adjustment the number of grantees was changed from 1870 to 1762 the quantity of

stock options granted was changed from 97300000 to 122327530 and the exercise price of stock options was changed

from RMB17.58 per share to RMB13.48 per share.On June 22 2020 the Company held the Nineteenth Meeting of the Fourth Session of the Board of Directors and the

Nineteen Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting

the Exercise Price and Quantity under the Stock Option Incentive Plans in 2018 and 2019 and Canceling Some Stock

Options. After the adjustment the quantity of stock options that was not exercised was changed from 99001310 to

128698841 and the exercise price of stock options that was not exercised was changed from RMB13.48 per share to

RMB10.28 per share.On December 2 2020 the Company held the Twenty-seventh Meeting of the Fourth Session of the Board of Directors and

the Twenty-seventh Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on

Adjusting the Exercise Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options as well as

the Proposal on Satisfying the Exercise Conditions for the Second Exercise Period of the 2018 Stock Option Incentive Plan.After the adjustment the number of grantees subject to the stock option incentive plan was changed from 1762 to 1719 and

the quantity of stock options granted was changed from 127217803 to 125056043.On July 2 2021 the Company held the Second Meeting of the Fifth Session of the Board of Directors and the Second

Meeting of the Fifth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting the Exercise

312Luxshare Precision Industry Co. Ltd. Annual Report 2021

Price under the Stock Option Incentive Plans in 2018 and 2019 and Canceling Some Stock Options of the Stock Option

Incentive Plan in 2019. After the adjustment the exercise price of stock options that was not exercised was changed from

RMB 10.28 per share to RMB 10.17 per share.On September 30 2021 the Company held the Fourth Meeting of the Fifth Session of the Board of Directors and the Fourth

Meeting of the Fifth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting the Exercise

Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options. After the adjustment the number

of grantees subject to the stock option incentive plan was changed from 1719 to 1695 and the quantity of stock options

granted was changed from 93843466 to 92964441.On December 3 2021 the Company held the Sixth Meeting of the Fifth Session of the Board of Directors and the Sixth

Meeting of the Fifth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting the Exercise

Quantity under the 2018 Stock Option Incentive Plan and Canceling Some Stock Options as well as the Proposal on

Satisfying the Exercise Conditions for the Third Exercise Period of the 2018 Stock Option Incentive Plan. After the

adjustment the number of grantees subject to the stock option incentive plan was changed from 1695 to 1653 and the

quantity of stock options granted was changed from 92964441 to 90887187.

(2) On April 22 2019 the Company held the Ninth Meeting of the Fourth Session of the Board of Directors and the Ninth

Meeting of the Fourth Session of the Board of Supervisors at which it deliberated and approved the Proposal on Granting

Stock Options to Subordinated Grantees under the 2019 Stock Option Incentive Plan of Luxshare Precision Industry Co.Ltd. determining that 50076000 stock options would be granted to 348 eligible initial grantees on April 22 2019 as the

grant date of the incentive plan.On November 27 2019 the Company held the Thirteenth Meeting of the Fourth Session of the Board of Directors and the

Thirteenth Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting

the Exercise Price and Quantity under the 2019 Stock Option Incentive Plan and the Proposal on Granting Stock Options to

Grantees Reserved under the 2019 Stock Option Incentive Plan. Due to the implementation by the Company of the annual

equity distribution plan in 2018 the exercise price and quantity under the 2019 stock option incentive plan were

adjusted.After adjustment the exercise price of the stock option initially granted was changed from RMB23.36 per share to

RMB17.93 per share the quantity of stock options initially granted was changed from 50076000 to 65098800 and the

quantity of reserved stock options granted was changed from 12519000 to 16274700. At the same time the board of

directors considered that the Company and the grantees had met the conditions for the grant of reserved stock options under

the Company’s 2019 incentive plan and consented to grant 16274700 stock options to 263 grantees on November 27 2019

as the grant date of reserved stock options at the exercise price of RMB17.93 per share.On June 22 2020 the Company held the Nineteenth Meeting of the Fourth Session of the Board of Directors and the

Nineteenth Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on

Adjusting the Exercise Price and Quantity under the Stock Option Incentive Plans in 2018 and 2019 and Canceling Some

Stock Options and the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period of the 2019 Stock

Option Incentive Plan. After this adjustment the number of initial grantees under the 2019 stock option incentive plan was

adjusted from 348 to 340 the quantity of stock options initially granted was adjusted from 65098800 to 84626558 and the

exercise price of the stock options initially granted was adjusted from RMB17.93 per share to RMB13.70 per share;the

quantity of reserved stock options granted was adjusted from 16241700 to 21113740 and the exercise price thereof was

adjusted from RMB17.93 per share to RMB13.70 per share.On January 22 2021 the Company held the Twenty-ninth Meeting of the Fourth Session of the Board of Directors and the

Twenty-ninth Meeting of the Fourth Session of the Board of Supervisors deliberating and approving the Proposal on

Adjusting the Reserved Name List of grantees Exercise Quantity under the 2019 Stock Option Incentive Plan and Canceling

Some Stock Options as well as the Proposal on Satisfying the Exercise Conditions for the Initial Exercise Period of the 2019

313Luxshare Precision Industry Co. Ltd. Annual Report 2021

Stock Option Incentive Plan. After the adjustment the number of grantees subject to the stock option incentive plan was

changed from 258 to 250 and the quantity of stock options granted was changed from 21113740 to 20657454.On July 2 2021 the Company held the Second Meeting of the Fifth Session of the Board of Directors and the Second

Meeting of the Fifth Session of the Board of Supervisors deliberating and approving the Proposal on Adjusting the Exercise

Price under the Stock Option Incentive Plans in 2018 and 2019 and Canceling Some Stock Options of the Stock Option

Incentive Plan in 2019 as well as the Proposal on Satisfying the Exercise Conditions for the Second Exercise Period of the

2019 Stock Option Incentive Plan. After the adjustment the number of initial grantees subject to the stock option incentive

plan was changed from 340 to 332 the quantity of stock options initially granted was changed from 65977698 to 65232789

and the exercise price of stock options that was initially granted and reserved for grantees was changed from RMB 13.70 per

share to RMB 13.59 per share.

(3) On December 32021 the Company held the Sixth Meeting of the Fifth Session of the Board of Directors deliberating

and approving the Proposal on Granting Stock Options to Grantees under the 2021 Stock Option Incentive Plan of

Luxshare Precision Industry Co. Ltd. whereby it was determined that 52419000 stock options would be granted to 1097

eligible grantees on December 3 2021 as the grant date of the incentive plan.The exercise price of stock options initially

granted under this incentive plan was RMB 35.87 per share.Since 22 original grantees resigned from the Company and 3

original grantees gave up all stock options to be granted to them for personal reasons the number of grantees subject to this

stock option incentive was changed from 1097 to 1072 and the quantity of stock options granted was changed from

52419000 to 52092000.

3. Share-based payment settled in cash

□ Applicable √ N/A

4. Modification and termination of share-based payment

None

5. Others

None

XIV. Commitments and contingencies

1. Significant commitments

Significant commitments on the balance sheet date

The Company has no significant commitments to be disclosed.

314Luxshare Precision Industry Co. Ltd. Annual Report 2021

2. Contingencies

(1) Significant contingencies on the balance sheet date

The Company has no significant contingencies to be disclosed.(2) Notes shall be made if the Company has no

significant contingencies that need to be disclosed

The Company has no significant contingencies to be disclosed.

3. Others

XV. Events after the balance sheet date

1. Significant non-adjusting items

In RMB

Effected quantum on financial Reasons why the effected

Item Content

position and operating results quantum cannot be estimated

2. Profit distribution

In RMB

Profits or dividends planned to distribute 779 273162.47

Profits or dividends approved to distribute 779 273162.47

3. Sales return

4. Description on events after the balance sheet date

(I) Significant non-adjusting items

1. According to the resolution of the Seventh Meeting of the Fifth Session of the Board of Directors the Company intends to raise

funds totaled up to RMB13500000000 through private offering of shares.The number of shares to be issued privately is determined

as the amount obtained by dividing the total raise funds by the issue price this time and shall not exceed 30% of the total share

capital of the Company before this issue i.e.not more than 2123110448 shares (inclusive).

2. According to the resolution of the Eighth Meeting of the Fifth Session of the Board of Directors the Company intends to apply for

a comprehensive credit line amounting to RMB28.2 billion in aggregate from 16 banks. The above credit line will be subject to the

actual approval of these banks and comprises RMB loans bank acceptance bills letters of credit letters of guarantee forward foreign

exchange and other local and foreign currency credit varieties with credit terms of one year for all.

3. On February 11 2022 the Company made and entered into a Strategic Cooperation Framework Agreement ("Agreement") with

Chery Holding Group Co. LTD.(“Chery Holding”) Chery Automobile Co. LTD.(“Chery Automobile”) and Chery New Energy

Vehicle Co. LTD.(“Chery New Energy”) (Chery Holding Chery Automobile Chery New Energy and its related parties collectively

referred to as "Chery Group") pursuant to which a strategic partnership between the two parties have been established.On the basis of

the Agreement the Company and Chery New Energy intend to jointly establish a joint venture company which will specialize in

developing and manufacturing new energy vehicles and provide a cutting-edge R&D design mass production platform and sale

315Luxshare Precision Industry Co. Ltd. Annual Report 2021

channel for Luxshare Precision's core automotive parts business committed to achieving the Company’s medium- and long-term goal

of becoming the Tier 1 leader in the field of automotive parts.

4. In order to further improve its strategic layout the Company intended to acquire 204930000 shares (representing approximately

11.09% “Underlying Share 1”) of Time Interconnect Technology Limited (a company listed on the main board of the Hong Kong

Stock Exchange with a stock code of 01729.HK “Time Interconnect Technology” or “Underlying Company”) held by Datatech

Investment Inc.("Seller 1") and 1175070000 shares (representing approximately 63.58% “Underlying Share 2” and collectedly

referred to as “Underlying Shares” together with “Underlying Share 1”) of the Underlying Company held by Time Interconnect

Holdings Limited (“Seller 2”) at a price of HKD 0.8 per share (equivalent to approximately RMB 0.65 per share discounted by the

mid-rate of HKD1:RMB 0.81656 as announced by the People's Bank of China on February 11 2022 the same as below) through

LUXSHARE PRECISION LIMITED (“LUXSHARE PRECISION”) a wholly-owned overseas subsidiary of the Company

y(“Acquisition”).Shares of the Underlying Company involved in the Acquisition totaled in 1380000000 shares representing

approximately 74.67% with a total consideration amounting to HKD 1104000000.00.In terms of the Acquisition a Share Purchase

Agreement was made and entered into by and among Seller 1 Seller 2 LUXSHARE PRECISION and Lo Chung Wai Paul on

February 11 2022.On 17 March 2022 LUXSHARE PRECISION paid the purchase price of HKD 1104000000 in full to Seller 1 and Seller 2 and

completed the settlement of all Underlying Shares.Upon completion of the settlement LUXSHARE PRECISION held 1380000000

shares of Time Interconnect Technology in total representing approximately 72.18% of the issued shares of Time Interconnect

Technology as of the close time on March 16 2022.On March 30 2022 LUXSHARE PRECISION as the offeror gave a mandatory unconditional cash offer for acquisition of all issued

shares of Time Interconnect Technology and cancellation of all purchase options not exercised yet (excluding those already held by

LUXSHARE PRECISION and its parties acting in concert). This offer was terminated at 4:00 p.m.on April 19 2022 as of which

LUXSHARE PRECISION has received valid acceptances of an aggregate of 594000 offer shares under this offer (the "Accepted

Shares") representing approximately 0.03% of the total issued shares of Time Interconnect Technology as of the close time on April 19

2022; prior to the commencement of this offer LUXSHARE PRECISION and its parties acting in concert had held 1380000000

shares of Time Interconnect Technology in total representing approximately 70.92% of the total issued shares of Time Interconnect

Technology as of the close time on March 25 2022. As of the close time on April 19 2022 after calculating the sum of the Accepted

Shares and the shares of Time Interconnect Technology held by LUXSHARE PRECISION and its parties acting in concert

LUXSHARE PRECISION and its parties acting in concert held 1380594000 shares of Time Interconnect Technology in total

representing approximately 70.95% of the total issued shares of Time Interconnect Technology.

5. According to the resolution of the Eighth Meeting of the Fifth Session of the Board of Directors the Company intends to take

appropriate low-risk investment and wealth management activities to improve the efficiency of using the Company's funds and further

increase the Company's proceeds. Therefore the Company plans to purchase low-risk investment wealth management products with

high security and good liquidity by using its independently-owned idle funds with an amount up to RMB 4 billion with a valid term

equal to or less than 12 months from the date of approval provided that the Company ensures that such purchase will not affect the

Company’s normal production and operations and risks of such purchase can be effectively controlled.XVI. Other significant events

1. Correction of previous accounting errors

(1) Retrospective restatement

In RMB

Accounting error corrected Processing procedure Name of the affected item in the Cumulative quantum affected

316Luxshare Precision Industry Co. Ltd. Annual Report 2021

statements of the comparison

period

(2) Prospective Application

Reasons for adopting method of

Accounting error corrected Approval procedure

prospective application

2. Debt restructuring

3. Asset replacement

(1) Exchange of non-monetary assets

(2) Replacement of other assets

4. Annuity plan

5. Termination of operation

In RMB

Profits from

termination of

Income tax operation

Item Income Costs Total profits Net profits

expenses attributable to the

owners of the

parent company

Other descriptions

6. Segment information

(1) Determination basis and accounting policy of reporting segment

(2) Financial information of reporting segment

In RMB

Item Inter-segment offset Total

317Luxshare Precision Industry Co. Ltd. Annual Report 2021

(3) Descriptions on reasons why the Company has no reporting segment or cannot disclose the total assets

and liabilities of each reporting segment if any

(4) Other descriptions

7. Other important transactions and events that have an impact on investors’ decision-making

8. Others

XVII. Notes to key items in financial statements of the company

1. Accounts receivable

(1) Categorized disclosure of accounts receivable

In RMB

Closing balance Opening balance

Book balance Bad-debt provision Book balance Bad-debt provision

Category Provision Book Provision

Proportio Book value

Amount Amount proportio value

Proportio

Amount Amount proportio

n n

n n

Accounts receivable

for which bad-debt 241 403. 241 403. 241 403. 241 403.

0.01%100.00%0.01%100.00%

provision is made 36 36 36 36

individually

Including:

241403.241403.241403.241403.

Entity 1 0.01 % 0.01 %

36363636

Accounts receivable

for which bad-debt 2 90804 6 42442 2 90162 6 92799 4 84681 6 923152

99.99%0.22%99.99%0.07%

provision is made by 9591.01 2.80 5168.21 9417.25 7.94 599.31

group

Including:

1358826424421352391023144846811018302

Group by aging 46.72 % 0.47 % 14.76 % 0.47 %

2492.402.808069.609566.637.94748.69

Related party group

1549221549225904845904849

in the scope of 53.27 % 85.23 %

7098.617098.619850.62850.62

consolidation

2908296665822901626928245088226923152

Total 100.00 % 100.00 %

0994.376.165168.210820.611.30599.31

Provision for bad debts made individually:

318Luxshare Precision Industry Co. Ltd. Annual Report 2021

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion Reason for provision

Entity 1 241 403.36 241 403.36 100 % It cannot be recovered

Total 241 403.36 241 403.36 -- --

Provision for bad debts made individually:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion Reason for provision

Provision for bad debts made by group:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion

Undue 1 338844558.04 669 422.28 0.05 %

1 to 60 days overdue 8 650481.16 432 524.06 5.00 %

61 to 120 days overdue 2 581119.38 774 335.81 30.00 %

121 to180 days overdue 2 885223.98 1 154089.59 40.00 %

181 to 365 days overdue 4 934117.57 2 467058.79 50.00 %

1 to 2 years(excluding 1year)

Over 2 years 926 992.27 926 992.27 100.00 %

Total 1 358822492.40 6 424422.80 --

Descriptions on basis for determining the group:

Provision for bad debts made by group:

In RMB

Closing balance

Description

Book balance Bad-debt provision Provision proportion

Descriptions on basis for determining the group:

If the bad-debt provision for accounts receivable is made according to the general model of expected credit loss please refer to the

disclosure method of other receivables to disclose the relevant information of bad debt provision:

□ Applicable √ N/A

Disclosure by aging

In RMB

Aging Book balance

Within 1 year (including1 year) 2 907122598.74

Over 3 years 1 168395.63

3-4 years 1 168395.63

319Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 2 908290994.37

(2) Bad-debt provision made recovered or reversed in the current period

Bad-debt provision in the current period:

In RMB

Amount of change in the current period

Category Opening balance Recover or Closing balance

Provision Write off Other

reversal

Provision on an

241403.36241403.36

individual basis

Provision on a

4846817.941577604.866424422.80

group basis

Total 5 088221.30 1 577604.86 6 665826.16

Including significant amounts reversed or recovered from the current provision for bad debts:

In RMB

Entity name Amount recovered or reversed Recovery method

(3) Accounts receivable actually written off in the current period

In RMB

Item Write-off amount

Including the write-off of significant accounts receivable:

In RMB

Whether the funds

Nature of accounts Reasons for write Procedures for write are generated by

Entity name Write-off amount

receivable off off related-party

transactions

Descriptions on the write-off of other receivables:

(4) Accounts receivable with top five closing balance - by debtor

In RMB

Closing balance of accounts Proportion in total closing Closing balance of bad-debt

Entity name

receivable balance of accounts receivable provision

Entity 1 1 370318350.67 47.12 %

Entity 2 521 621195.14 17.94 % 260 810.60

Entity 3 142 965001.18 4.92 % 71 482.50

Entity 4 91 442885.66 3.14 %

320Luxshare Precision Industry Co. Ltd. Annual Report 2021

Entity 5 81 685003.81 2.81 % 40 842.50

Total 2 208032436.46 75.93 % --

(5) Amount of assets and liabilities formed by transferring accounts receivable and continuing involvement

None

Other descriptions:

(6) Accounts receivable derecognized due to transfer of financial assets

None

2. Other receivables

In RMB

Item Closing balance Opening balance

Dividends receivable 211 543626.19 11 543626.19

Other receivables 423 508501.65 543 164102.94

Total 635 052127.84 554 707729.13

(1) Interest receivable

1 ) Classification of interest receivable

In RMB

Item Closing balance Opening balance

2 ) Significant overdue interest

In RMB

Whether there is

Borrower Closing balance Overdue time Reasons for delay impairment and its

judgment basis

Other descriptions:

3 ) Bad-debt provision

□ Applicable √ N/A

321Luxshare Precision Industry Co. Ltd. Annual Report 2021

(2) Dividends receivable

1 ) Classification of dividends receivable

In RMB

Item (or Investee) Closing balance Opening balance

Wan’an Xiexun Electronic Co. Ltd. 11 543626.19 11 543626.19

Lanto Electronic Limited 200 000000.00

Total 211 543626.19 11 543626.19

2 ) Significant dividends receivable with aging over 1 year

In RMB

Whether there is

Reasons for

Item (or Investee) Closing balance Aging impairment and its

non-recovery

judgment basis

3 ) Bad-debt provision

□ Applicable √ N/A

Other descriptions:

(3) Other receivables

1 ) Classification of other receivables by nature

In RMB

Nature of receivables Closing book balance Opening book balance

Reserve fund 33 273.76 49 663.76

Security deposit 31 756216.84

Import tax rebate receivable 20 052713.03

Other 142 559720.70 191 697001.27

Current account 250 035350.00 332 444406.04

Total 424 384561.30 544 243784.10

2 )Bad-debt provision

In RMB

Stage I Stage II Stage III

Bad-debt provision Total

12 -month ECL Lifetime ECL (without Lifetime ECL (with credit

322Luxshare Precision Industry Co. Ltd. Annual Report 2021

credit impaired) unimpaired)

Balance as at January 1

1079681.161079681.16

2021

Balance as at January 1

2021 in the current —— —— —— ——

period

Reversal 203 621.51 203 621.51

Balance as at December

876059.65876059.65

312021

Changes in book balance of provision for loss with significant changes in the current period

□ Applicable √ N/A

Disclosure by aging

In RMB

Aging Book balance

Within 1 year (including1 year) 424 384561.30

Total 424 384561.30

3 ) Bad-debt provision made recovered or reversed in the current period

Bad-debt provision in the current period:

In RMB

Amount of change in the current period

Opening

Category Recover or Closing balance balance Provision Write off Other

reversal

Group by aging 1 079681.16 203 621.51 876 059.65

Total 1 079681.16 203 621.51 876 059.65

Including significant amounts reversed or recovered from the current provision for bad debts:

In RMB

Entity name Amount reserved or recovered Recovery method

4 ) Other receivables actually written off in the current period

In RMB

Item Write-off amount

Including the write-off of significant other receivables:

In RMB

Nature of other Reasons for write Procedures for write Whether the funds

Entity name Write-off amount

receivables off off are generated by

323Luxshare Precision Industry Co. Ltd. Annual Report 2021

related-party

transactions

Descriptions on the write-off of other receivables

5 ) Other receivables with top five closing balance - by debtor

In RMB

Proportion in total

Nature of Closing balance of

Entity name Closing balance Aging closing balance of

receivables bad-debt provision

other receivables

Entity 1 Current account 250 000000.00 Undue 58.91 %

Equity transfer

Entity 2 142 500000.00 Undue 33.58 % 712 500.00

funds

Entity 3 Security deposit 26 800000.00 Undue 6.32 % 134 000.00

Entity 4 Security deposit 4 216931.94 Undue 0.99 % 21 084.66

Entity 5 Security deposit 412 839.90 Undue 0.10 % 2 064.20

Total -- 423 929771.84 -- 99.90 % 869 648.86

6 ) Receivables involving government grants

In RMB

Name of government Aging at the end of the Estimated time amount

Entity name Closing balance

grant period and basis of collection

None

7 ) Other receivables derecognized due to transfer of financial assets

None

8 ) Amount of assets and liabilities formed by transferring other receivables and continuing involvement

None

Other descriptions:

3. Long-term equity investments

In RMB

Closing balance Opening balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

324Luxshare Precision Industry Co. Ltd. Annual Report 2021

Investment in 21 141692140.2 21 113131960.4 13 406253703.4 13 377693523.6

28560179.8028560179.80

subsidiaries 9 9 2 2

Investment in

joint ventures and 255 849450.14 34 372608.46 221 476841.68 260 260811.77 34 372608.46 225 888203.31

associates

21397541590.421334608802.113666514515.113603581726.9

Total 62 932788.26 62 932788.26

3793

(1) Investment in subsidiaries

In RMB

Opening Increase and decrease in the current period Closing balance

Closing balance

Investee balance (book Additional Reduced Provision for of provision for

value) Other

(book value)

investment investment impairment impairment

ASAP

Technology 271 442772.2 273 465444.2

3004414.72981742.65

(Jiangxi) Co. 1 8

Ltd.Xiexun

243789479.7244934671.3

Electronic 1 145191.62

02

(Ji'an) Co. Ltd.Suining

Luxshare

Precision 2 291444.90 104 692.66 2 186752.24

Industry Co.Ltd.Luxshare

Precision 158 059935.3 158 059935.3

Technology Co. 2 2

Ltd.ICT-LANTO 534 084500.2 453 278000.0 987 362500.2

LIMITED 6 0 6

Luxshare

Precision 32 423829.90 32 423829.90

Limited

Lanto Electronic 3 288818885 3 312908584.

24089698.93

Limited .56 49

Dongguan

Leader 64 694688.88 1 147637.34 65 842326.22

Precision

325Luxshare Precision Industry Co. Ltd. Annual Report 2021

Industry Co.Ltd.Kunshan

Luxshare

522944914.6516652244.2

Precision 6 292670.44

73

Industry Co.Ltd.Wan’an Xiexun

Electronic Co. 40 248495.19 56 183.42 40 304678.61

Ltd.Fujian JK

Wiring Systems 97 098001.20 248 878.44 96 849122.76

Co. Ltd..Ji’an Jizhou

district

Luxshare 8 050100.95 8 050100.95

Electronic Co.Ltd.Xingning

Luxshare

215943.92159965.4126003.07349906.26

Technology Co.Ltd.Luxshare

Precision 768 384558.8 771 166474.2

2781915.36

Industry 6 2

(Chuzhou) Ltd.

SuK

Kunststofftechni 33 746516.14 33 746516.14

k GmbH

Fengshun

Luxshare

Precision 10 114690.87 25 930.81 10 140621.68

Industry Co.Ltd.Shenzhen

Luxshare

3924994.272171669.556096663.8228560179.80

Acoustics

Technology Ltd.Dongguan

10239976671030342565.

Luxshare 6 344897.56.5309

Precision

326Luxshare Precision Industry Co. Ltd. Annual Report 2021

Industry Co.Ltd.Luxshare

Automation 41 355980.68 4 618875.45 45 974856.13

(Jiangsu) Ltd.Shenzhen

Luxshare

21000000.0021000000.00

Standard Co.Ltd.Jiangxi

Luxshare

10592799911076908293.

Intelligent 17 628302.21.0728

Manufacture

Co. Ltd.Donguan

Xuntao

-9372824.161561501.83-10934325.99

Electronic Co.Ltd.Luxshare

Electronic

22469108032257826412.

Technology 10 915609.05.1924

(Kunshan) Co.Ltd.Luxshare

Precision

101391220.0101400809.2

Components 9 589.24

48

(Kunshan) Co.Ltd.Luxshare

Precision 100 975752.9 102 105631.2

1129878.28

Industry (Enshi) 7 5

Co. Ltd.Yongxin County

Boshuo

613382.62237729.23851111.85

Electronic Co.Ltd.LUXSHARE-IC

2233928.58144092.122378020.70

T 株式会社

Taiwan

103613239.9120492441.4

Luxshare 16 879201.47

30

Precision

327Luxshare Precision Industry Co. Ltd. Annual Report 2021

Limited

Luxshare-ICTin

26152599.418623986.1534776585.56

c.Korea

Luxshare-ICT 4 069963.65 1 090328.95 5 160292.60

Co.Ltd.LUXSHARE-IC

T EUROPE 458 762.29 -276555.97 182 206.32

LIMITED

Merry

Electronics

3496808.331294333.064791141.39

(Suzhou) Co.Ltd.Kunshan-Luxsh

are RF

22320648.938568147.7430888796.67

Technology Co.Ltd.M&A Merry

Electronics

417479.982102915.102520395.08

(Huizhou) Co.LTD.Jiangxi ASAP

Electronic Co. 1 508715.42 477 815.16 1 986530.58

Ltd.Luxshare

Precision

Industry 682 828.16 675 585.46 1 358413.62

(Baoding) Co.

Ltd.Luxshare

Precision

Industry 1 370774.17 355 294.53 1 726068.70

(Shanxi) Co.Ltd.Guangdong

Luxshare

Smart-Link

467029.39467029.39

Electronic

Technology Co.Ltd.Guangdong 1 058103.73 1 058103.73

328Luxshare Precision Industry Co. Ltd. Annual Report 2021

Luxshare&

Merry

Electronic Co.Ltd.Bozhou Lanto

Electronic 3 923321.03 1 049509.09 4 972830.12

Limited

Kunshan

Luxshare

2052314.71760535.581291779.13

Precision Mould

Co. Ltd.Huzhou Jiuding

Electronic Co. 944 286.31 272 586.50 1 216872.81

Ltd.Xinyu Xiexun

Electronic Co. 7 286518.99 3 194304.92 10 480823.91

Ltd.Luxshare

Precision

Industry (Xi’an)

Co. Ltd.Luxshare

Precision

130000000.0130000000.0

Industry

00

(Suzhou) Co.Ltd.Luxshare iTech

747520596.6778806257.1

(Zhejiang) Co. 31 285660.54

59

LTD.Bozhou Xuntao

Electronic 169 968.40 55 445.18 225 413.58

Limited

Dongguan

Luxshare 883 685555.8 890 495013.9

6809458.10

Technology Co. 5 5

Ltd.Xuancheng

Luxshare

Precision 3 411822.28 13 619684.02 17 031506.30

Industry Co.Ltd.

329Luxshare Precision Industry Co. Ltd. Annual Report 2021

Beijing

Luxshare

Acoustic 3 563643.54 1 662117.89 5 225761.43

Technology Co.Ltd.Luxshare

Intelligent

Manufacture 716 342959.9 693 171284.7 1 409514244.Technology 7 6 73

(Changshu) Co.

Ltd.Xingning

Luxshare

143840.3238896.21182736.53

Electronic Co.Ltd.SpeedTech

906496.72617360.961523857.68

Corp.Luxshare

Technologies 1 872619.53 -292938.95 1 579680.58

Limited

Luxshare Smart

Technology 100 000000.0

12000000.0088000000.00

(Rugao) Co. 0

Ltd.Changshu

Luxshare

Industrial 110 210000.0

30000000.0080210000.00

Investment 0

Management

Co. Ltd.Kunshan

Luxshare

Enterprise 200 000000.0 200 000000.0

Management 0 0

Development

Co. Ltd.Luxshare

Precision

Industry 95 071.11 95 071.11

(Jiangsu) Co.Ltd.

330Luxshare Precision Industry Co. Ltd. Annual Report 2021

Rida Intelligent

Manufacture

Technology 4 564728.72 4 564728.72

(Rugao )Co.LTD.Rikai Computer

57605621655760562165.

Accessories Co..7373

Ltd.Luxis

Technology 151 471194.5 151 471194.5

(Kunshan) Co. 2 2

Ltd.Luxshare

Electronic

Technology 15 000000.00 15 000000.00

(Enshi) Co.

Ltd.Liding

Electronic

Technology 55 590269.64 55 590269.64

(Dongguan)

Co. Ltd.Luxshare

Precision

1000000.001000000.00

Technology(Xi’

an) Co. Ltd.Luxis Precision

Intelligent

161382181.3161382181.3

Manufacture

00

(Kunshan) Co.Ltd.Luxshare

Precision

400000.00400000.00

Technology(Nan

jing) Co. Ltd.Luxsahre

Electronic

340902.08340902.08

(Shanghai) Co.Ltd.Ri Ming

663622.71663622.71

Computer

331Luxshare Precision Industry Co. Ltd. Annual Report 2021

Accessory

(Shanghai) Co.Ltd.Ri Pei Computer

Accessory

1302245.971302245.97

(Shanghai) Co.Ltd.Sheng-Rui

Electronic

Technology 36 362.89 36 362.89

(Shanghai)

Limited

Ri Shan

Computer

Accessory 424 991.24 424 991.24

(Jiashan) Co.Ltd.LUXSHARE-IC

T (VIETNAM) 1 790298.57 1 790298.57

LIMITED

Hangzhou

Xuntao

9999497.459999497.45

Technology Co.Ltd.

13377693527853464562118026125.62111313196

Total 28 560179.80

3.62.4920.49

(2) Investment in joint ventures and associates

In RMB

Increase and decrease in the current period

Closing

Investme balance

Opening Other nt profit Closing

balance Additiona comprehe Declared Provision

of

Investee Reduced or loss Other

balance

provision

(book l nsive cash for investmen recognize changes Other (book

value) investmen income dividends impairme

for

t d under in equity value)

t adjustmen or profits nt impairme

equity

t nt

method

I. Joint ventures

II. Associates

Siliconch 22 6635 -394382. 22 2691

332Luxshare Precision Industry Co. Ltd. Annual Report 2021

06.551824.37

Zhuhai

Kinwong

203224-401697199207343726

Flexible

696.769.45717.3108.46

Circuit

Co. Ltd.

225888-441136221476343726

Subtotal

203.311.63841.6808.46

225888-441136221476343726

Total

203.311.63841.6808.46

(3) Other descriptions

4. Operating income and operating costs

In RMB

Amount recognized in the current period Amount recognized in the prior period

Item

Income Cost Income Cost

Principal business 9 174890300.12 8 531671602.47 11 464276490.11 10 754493607.05

Other business 105 254622.90 33 510191.72 100 827039.16 26 703475.62

Total 9 280144923.02 8 565181794.19 11 565103529.27 10 781197082.67

Income related to information:

In RMB

Contract classification Segment 1 Segment 2 Total

By product types

Including:

By geographical areas of

operations

Including:

By markets or customers

Including:

By contract types

Including:

333Luxshare Precision Industry Co. Ltd. Annual Report 2021

By the period of

transferring products

Including:

By contract term

Including:

By sales channel

Including:

Total

Information related to performance obligations:

N/A

Information relating to the transaction price allocated to the remaining performance obligations:

At the end of the reporting period the incomes corresponding to the contracts signed whose performance has not been commenced or

completed amount to RMB0.00 of which RMB is expected to be recognized in RMB is expected to be recognized in and RMB is

expected to be recognized in .Other descriptions:

5. Investment income

In RMB

Item Amount recognized in the current period Amount recognized in the prior period

Long-term equity investment income

2242183081.463325246159.60

accounted for using the cost method

Long-term equity investment income

-4411361.63452498.12

accounted for using the equity method

Investment income from disposal of

-58000.00

long-term equity investment

Investment income from held-for-trading

30531053.9814791876.12

financial assets during holding period

Income from wealth management products 41 433412.36 69 496746.15

Gains from derecognition of financial assets

-41003477.92

measured at amortized cost.Total 2 268732708.25 3 409929279.99

334Luxshare Precision Industry Co. Ltd. Annual Report 2021

6. Others

XVIII. Supplementary information

Breakdown of non-recurring profit and loss for the current period

√ Applicable □ N/A

In RMB

Item Amount Remarks

Profit or loss from disposal of non-current

-57241855.39

assets

Government grants recognized in the current

profit or loss (except for the government

grants which are closely related to the

853542165.37

company’s normal business operations and

gained at a fixed amount or quantity

according to national uniform standards)

The difference between the original book

Gains from the excess of attributable fair

value and the fair value of long-term

value of identifiable net assets of the

equity investment under cost method

investee over the consideration paid for the 16 559223.33

changed from equity method due to

acquisition of subsidiaries associates and

inclusion of subsidiaries into the scope of

joint ventures

consolidation.Profit or loss on assets under entrusted

95298693.93

investment or management

Except for effective hedging business related

to the company’s normal business

operations profit or loss from changes in fair

value arising from the holding of

held-for-trading financial assets and 602 993325.33

liabilities and investment income from

disposal of held-for-trading financial assets

and liabilities and available-for-sale

financial assets

Other non-operating income and expenses

-12600634.71

except the above items

Mainly refer to gains from derecognition

Other profit and loss items satisfying the

-170939666.46 of financial assets measured at amortized

definition of non-recurring profit and loss

cost.Less: Affected quantum of income tax 211 043425.20

Affected quantum of minority interest 61 644659.76

335Luxshare Precision Industry Co. Ltd. Annual Report 2021

Total 1 054923166.44 --

Details of other profit and loss satisfying the definition of non-recurring profit and loss

□ Applicable √ N/A

The Company has no other items of profit and loss satisfying the definition of non-recurring profit and loss.Description of classifying non-recurring profit and loss items enumerated in the Explanatory Announcement No.1 for Public

Company Information Disclosures – Non-recurring Profits and Losses as recurring profit and loss items

□ Applicable √ N/A

336Luxshare Precision Industry Co. Ltd. Annual Report 2021

2.Return on equity and earnings per share

Earnings per share

Profit in the reporting period Weighted average return on equity Basic earnings per share Diluted earnings per

(RMB/share) (RMB/share)

Net profit attributable to ordinary

22.35%1.010.99

shareholders of the Company

Net profit after deduction of

non-recurring profit and loss

19.34%0.860.84

attributable to ordinary

shareholders of the Company

3. Accounting data differences under domestic and foreign accounting standards

(1) Differences of net profit and net assets in financial reports disclosed according to International

Accounting Standards and Chinese Accounting Standards at the same time

□ Applicable √ N/A

(2) Difference of net profit and net asset in financial reports disclosed according to overseas accounting

standards and Chinese Accounting Standards at the same time

□ Applicable √ N/A

(3) Descriptions on the reasons for the differences of accounting data under the accounting standards at

home and abroad and the name of the overseas institution if difference adjustment is made to the data

audited by an overseas audit institution

4. Others

Luxshare Precision Industry Co. Ltd.Chairman: WANG Laichun

April 27 2022

337

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