1、Goertek Inc.Annual Report 2021 1 Goertek Inc.Annual Report 2021 March 2022 Goertek Inc.Annual Report 2021 2 Section Important Notes,Contents and Interpretations The Board of Directors,the Board of Supervisors,directors,supervisors and senior management of the Company guarantee that the information p

2、resented in this report shall be together be wholly liable for the truthfulness,accuracy and completeness of its contents and free of any false records,misleading statements or material omissions,and will undertake individual and joint legal liabilities.Jiang Bin,the person in charge of the Company,

3、and Li Yongzhi,the person in charge of accounting and the accounting department(accounting supervisor)guarantee that the financial report in this annual report is authentic,accurate and complete.All directors have attended the board meeting to review the annual report.The Company faces the risks in

4、market,operation and management.Investors are kindly reminded to pay attention to possible investment risks.For details,see Section III Discussion and Analysis of Management of the Company,XI Outlook for the Future Development of the Company in this report.The future plans and some forward-looking s

5、tatements mentioned herein are planned matters which shall not constitute a substantial commitment of the Company to investors.Therefore,both investors and relevant persons should maintain their risk awareness and understand the differences among plan,Goertek Inc.Annual Report 2021 3 forecast and co

6、mmitment.Please pay attention to investment risks.The profit distribution proposal considered and approved by the Board of Directors of the Company is as follows:based on the total share capital registered on the record date of equity distribution minus the repurchased shares in the Companys special

7、 repurchase account,the Company will distribute cash dividend of RMB 2.00(tax inclusive)for per 10 shares to all the shareholders,as well as 0 bonus shares(tax inclusive),and there is no conversion of capital reserves into share capital.If any discrepancy between the English version and the Chinese

8、version of the annual report,the Chinese version shall prevail.Goertek Inc.Annual Report 2021 4 Contents SectionImportant Notes,Contents and Interpretations.2 SectionCompany Information and Key Financial Indicators.8 Section III Discussion and Analysis of Management of the Company.13 Section IV Corp

9、orate Governance.48 Section V Environmental and social responsibilities.86 Section VI Important Matters.90 Section VII.Changes in Shares and Information about Shareholders.112 Section VIII Information of Preferred Shares.121 Section IX Information on the Bonds.122 Section X Financial Report.123 Goer

10、tek Inc.Annual Report 2021 5 Directory of Reference Files(1)Financial statements with signatures and seals of the legal representative,the person in charge of accounting and the person in charge of accounting department(accounting supervisor);(2)The originals of 2021 annual report and its abstract s

11、igned by the legal representative of the Company;(3)The originals of the audit report with the seal of Zhongxi Certified Public Accountants(special general partnership)Co.,Ltd.and the signature and seal of the certified public accountants;(4)The originals of all company documents and announcements p

12、ublicly disclosed in newspapers designated by China Securities Regulatory Commission(CSRC)during the reporting period.Goertek Inc.Annual Report 2021 6 Interpretation Terms Refers to Content of interpretation Company,the Company,Goertek Inc.Refer to Goertek Inc.Goertek Group Refers to Goertek Group C

13、o.,Ltd.,Controlling shareholder of the Company Weifang Goertek Refers to Weifang Goertek Electronics Co.,Ltd.,wholly owned subsidiary of the Company Weifang Goertek Microelectronics Refers to Weifang Goertek Microelectronics Co.,Ltd.,controlled subsidiary of the Company Goertek Optical Refers to Goe

14、rtek Optical Technology Co.,Ltd.,wholly owned subsidiary of the Company Goertek Technology(Vietnam)Refers to Goertek Technology Vina Company Limited,wholly owned subsidiary of the Company ODM Refers to Original Design and Manufacturing JDM Refers to Joint Design and Manufacturing Micro speaker Refer

15、s to The micro electro-acoustic components that transform electrical signal into acoustic signal,generate driving force,through the magnetic line cutting of voice coil in magnetic field,to drive the diaphragm vibration,which then pushes the air for sounding.Compared with the micro receiver,its chara

16、cterized by higher power,wide frequency response and high fidelity,which is generally used for playing the sound.MEMS Refers to Based on micron/nano technology,Micro electro mechanical system(MEMS)is a technology developed for designing,processing,manufacturing,measuring and controlling micron/nano

17、materials.MEMS can integrate mechanical components,optical system and electric control system of driving components into a whole unit of micro system,featured with miniaturization,intelligence,multi-function,high integration and being suitable for mass production Speaker module Refers to The acousti

18、c component composed of one or several micro speakers and other electronic devices,which are assembled together through an injection molded housing.Smart wearable devices Refers to A portable device that can be worn or carried directly,or integrated into the users clothes or accessories Virtual Real

19、ity/VR Refers to A computer simulation system that can create and experience virtual Goertek Inc.Annual Report 2021 7 world by using computer to generate a simulation environment into which the users immerse.Augmented Reality/AR Refers to A technology that perfectly integrates virtual information wi

20、th the real world.By making extensive use of multimedia,3D modeling,real-time tracking and registration,intelligent interaction,sensing and other technical means,it applies the computer-generated text,images,3D models,music,video and other virtual information to the real world after simulation.These

21、 two kinds of information complement each other to enhance the real world.Smart wireless earphones Refers to The new types of smart wireless earphones represented by TWS(True Wireless Stereo)earphones connect the left and right earphones with smart phones and other terminal devices through Bluetooth

22、 technology to form an independent stereo system,which realizes touch control,voice control,body information collection and other functions by adding various sensors.Micro-system module Refers to Also known as SiP(System in Package)packaging module at the system level,it integrates multiple chips an

23、d passive components into the same package through advanced packaging such as technologies 3D packaging to form a module with whole or main functions of an electronic system,so as to realize the optimal combination of performance,volume,weight and other indicators.It is a comprehensive emerging micr

24、oelectronics technology.Sensor Refers to A detection device that is capable of feeling the measured information,and able to transform the perceived information into electrical signals or other required forms of information for output based on certain rules,in order to meet the requirements of inform

25、ation transmission,processing,storage,display,recording and control.Company Law Refers to Company Law of the Peoples Republic of China Securities Law Refers to Securities Law of the Peoples Republic of China Articles of Association Refers to Articles of Association of Goertek Inc.CSRC Refers to Chin

26、a Securities Regulatory Commission RMB,RMB 10,000,RMB 100,000,000 Refer to yuan(RMB),ten thousand yuan(RMB),hundred million yuan(RMB)Reporting period Refers to January 1,2021 to December 31,2021 Explanation on Other Matters In this report,any difference between the sum of partial sums and the sum of

27、 detailed items is due to rounding.Goertek Inc.Annual Report 2021 8 Section II Company Information and Key Financial Indicators I.Company Information Stock abbreviation Goertek Inc.Stock code 002241 The stock exchange where stocks are listed Shenzhen Stock Exchange Name of the Company in Chinese 歌尔股

28、份有限公司 Abbreviation of the Company in Chinese 歌尔股份 Name of the Company in English(if any)Goertek Inc.Abbreviation of the Company in English(if any)Goertek Legal representative of the Company Jiang Bin Registered address 268 Dongfang Road,High-tech Industrial Development District,Weifang Postal code o

29、f registered address 261031 Previous changes of registered address of the Company No change Business address 268 Dongfang Road,High-tech Industrial Development District,Weifang Postal code of business address 261031 Company website http:/ E-mail II.Contacts and Contact Information Board Secretary Se

30、curities Affairs Representative Name Jia Junan Xu Yanqing,Xu Dapeng Contact address 268 Dongfang Road,High-tech Industrial Development District,Weifang 268 Dongfang Road,High-tech Industrial Development District,Weifang Tel. Fax E-mail Goertek Inc.A

31、nnual Report 2021 9 III.Information Disclosure and Place of the Report Website of the stock exchange for release of the Annual Report Shenzhen Stock Exchange(http:/)Name and website of the media for release of the Annual Report Securities Times,China Securities Journal,Shanghai Securities News,Secur

32、ities Daily,CNINFO（http:/）Place where the Annual Report is available for inspection Office of Board of Directors of the Company IV.Changes in Registration Organization code 953432M The changes in main business since the Company was listed(if any)No change Changes of controlling shareholde

33、rs of the Company(if any)No change V.Other Relevant Information Accounting firm engaged by the Company Name of the accounting firm Zhongxi Certified Public Accountants(special general partnership)Co.,Ltd.Business address Room 1101,No.11,Chongwenmenwai Street,Dongcheng District,Beijing Names of accou

34、ntants signing the report Du Yeqin,Mou Huiling The sponsor institution engaged by the Company to perform continuous supervision during the reporting period Applicable Not applicable Name of the sponsor institution Business address of the sponsor institution Name of sponsor representative Duration of

35、 continuous supervision China Securities Co.,Ltd.9th Floor,Building B,Kayheng Center,No.2 Chaoyangmennei Street,Dongcheng District,Beijing Guan Feng,Huang Zhenyue From June 12,2020 to December 31,2021 The financial advisor engaged by the Company to perform continuous supervision during the reporting

36、 period Applicable Not applicable .Key Accounting Data and Financial Indicators Whether the Company performed a retrospective adjustment or restatement of previous accounting data Yes No 2021 2020 Year-on-year change 2019 Goertek Inc.Annual Report 2021 10 Operating revenue(RMB)78,221,418,618.02 57,7

37、42,742,893.96 35.47%35,147,806,427.74 Net profit attributable to shareholders of the Company(RMB)4,274,702,999.38 2,848,007,269.61 50.09%1,280,542,212.61 Net profit attributable to shareholders of the Company excluding non-recurring profits and losses(RMB)3,832,421,177.27 2,758,911,040.03 38.91%1,34

38、8,634,308.27 Net cash flow from operating activities(RMB)8,598,475,527.88 7,682,256,113.68 11.93%5,451,430,414.59 Basic earnings per share(RMB/share)1.29 0.89 44.94%0.40 Diluted earnings per share(RMB/share)1.28 0.89 43.82%0.40 Weighted average return on net assets 17.61%16.40%1.21%8.19%December 31,

39、2021 December 31,2020 Year-on-year change December 31,2019 Total assets(RMB)61,079,051,133.27 49,117,826,313.41 24.35%34,660,304,627.21 Net assets attributable to shareholders of the Company(RMB)27,327,747,993.97 19,653,252,273.26 39.05%16,107,163,639.60 The Companys net profit before and after dedu

40、cting non-recurring profits and losses in the last three fiscal years,whichever is lower,is negative,and the audit report of last year shows that there is uncertainty in companys ability to continue as a going concern.Yes No The net profit before and after deducting non-recurring profits and losses,

41、whichever is lower,is negative.Yes No .Differences in accounting data between domestic and foreign accounting standards 1.Differences in net profits and net assets in the financial reports disclosed according to international accounting standards and Chinese accounting standards Applicable Not appli

42、cable During the reporting period,there is no difference in net profits and net assets in the financial reports disclosed pursuant to international accounting standards and Chinese accounting standards 2.Differences in net profits and net assets in the financial reports disclosed according to foreig

43、n accounting standards and Chinese accounting standards Applicable Not applicable During the reporting periods no differences in net profits and net assets in the financial reports disclosed according to foreign accounting standards and Chinese accounting standards at the same time Goertek Inc.Annua

44、l Report 2021 11.Key Quarterly Financial Indicators Unit:RMB The first quarter The second quarter The third quarter The fourth quarter Operating revenue 14,028,169,300.89 16,259,628,386.33 22,501,367,860.88 25,432,253,069.92 Net profit attributable to shareholders of the Company 965,953,650.11 765,0

45、76,109.61 1,601,494,203.24 942,179,036.42 Net profit attributable to shareholders of the Company excluding non-recurring profits and losses(RMB)601,329,147.56 808,228,696.46 1,609,128,973.48 813,734,359.77 Net cash flow from operating activities 873,274,388.66 3,108,904,252.54 1,776,650,281.67 2,839

46、,646,605.01 Whether there is significant difference between the above individual or aggregate financial indicators and that of what disclosed in the quarterly reports and semi-annual reports disclosed by the Company Yes No .Items and Amounts of Non-recurring Profits and Losses Applicable Not applica

47、ble Unit:RMB Item 2021 2020 2019 Explanation Profits and losses on disposal of non-current assets(including the write-off portion of the provision for asset impairment)-122,148,708.58-219,544,001.32-195,445,840.66 Government subsidies included in the current profits and losses(except those closely r

48、elated to the Companys normal business,comply with national policies and regulations,and continuously grant in accordance with a certain standard quota or quantity)464,119,437.91 221,372,903.17 177,315,056.36 In addition to the effective hedging business related to normal business of the Company,the

49、 profits and losses from the changes in fair value arising from holding held-for-trading financial assets and held-for-trading financial liabilities,as well as the investment income obtained from the disposal of held-for-trading financial assets,held-for-trading financial liabilities and 185,179,920

50、.90 102,685,404.04-81,283,474.24 Goertek Inc.Annual Report 2021 12 available-for-sale financial assets Other non-operating revenue and expenditures other than those mentioned above 13,554,671.71 5,874,633.40 13,488,075.24 Other profit and loss items that meet the definition of non-recurring profit a

51、nd loss 2,603,363.20 3,236,394.55 685,750.54 Less:Impact of income tax 84,270,186.15 21,159,380.84-17,148,337.10 Impact of minority shareholders interest(after tax)16,756,676.88 3,369,723.42 Total 442,281,822.11 89,096,229.58-68,092,095.66-Details of other profit and loss items that meet the definit

52、ion of non-recurring profit and loss：Applicable Not applicable It mainly refers to returned service charge for withholding individual income tax and other fees.Description of defining the non-recurring profit and loss items,which are listed in Explanatory Announcement No.1 on Disclosure of the Infor

53、mation regarding the Companies Offering Their Securities to the Public-Non-recurring Profit and Loss,as recurring profit and loss Applicable Not applicable The Company did not classify any item of the non-recurring profit and loss items listed in the Explanatory Announcement No.1 on Disclosure of th

54、e Information regarding the Companies Offering Their Securities to the Public-Non-recurring Profit and Loss,as recurring profit and loss in the reporting period.Goertek Inc.Annual Report 2021 13 Section III Discussion and Analysis of Management of the Company.The situation of the industry during the

55、 reporting period During the reporting period,the Companys main business divides into three segments including precision components business,smart audio device business and smart hardware business.The main business of the company is categorized into the industry of the manufacturing of computer,comm

56、unication,and other electronic equipment.The Companys main products include acoustics,optics,microelectronics,structural components and other precision components,as well as smart hardware products such as TWS smart earphones,virtual reality(VR)/augmented reality(AR)products,smart wearable devices,g

57、aming console and accessories,and smart home products.The Company serves the leading global customers in the technology and consumer electronics industry by providing them with vertically integrated product solutions of precision components and smart hardware,as well as the related design,R&D and ma

58、nufacturing services.In the mobile era when the smartphones became the core hardware devices,a large number of outstanding well-known enterprises in technology and consumer electronics industry had emerged worldwide based on the integration of advanced hardware devices,software content and innovativ

59、e applications,and drove the whole industry and related enterprises in its industrial chain to achieve significant growth and enterprise development through a long period of time in the past.As the growth of the smartphone industry has slowed down in recent years,the global technology and consumer e

60、lectronics industry has begun the transition from the mobile era to the post-mobile era.According to the statistics of IDC,a well-known consulting agency,the global smartphone shipment in 2021 reached about 1.35 billion units,with approximately 5.3%YoY increase,which has resumed growth in the post-e

61、pidemic era.But regarding to its overall performance in recent years,the growth of global smartphone industry has slowed down significantly.Therefore,the players in the global consumer electronics industry are actively exploring and planning on new opportunities of the future growth of the business.

62、At the same time,advanced communication technologies such as 5G,along with AI,intelligent interaction,sensor,software algorithm are further integrated into the new generation of smart hardware products,thus creating a large number of new applications and demands.These new smart hardware products rep

63、resented by VR/AR devices,smart wireless earphones,smart wearable devices and smart home products,have developed rapidly in recent years.According to the statistics of IDC,the global shipment of virtual reality(VR)products reached about 9.36 million units in 2021,with approximately 68.6%YoY increase

64、.The global shipment of augmented reality(AR)products reached about 330,000 units,with approximately 13.8%YoY increase.The global VR industry continues its rapid development in 2021.More well-known Goertek Inc.Annual Report 2021 14 manufacturers in consumer electronics and Internet industries active

65、ly invest in VR,which promotes the continuous development of related hardware technology and software content.The global market size of AR products is still relatively small,and AR hardware technology still faces challenges in chips,optical display,communication,power consumption,size and weight.How

66、ever,AR products have shown great market potential,and have attracted the global attention.According to the statistics of Futuresource,a famous consulting agency,the global shipment of TWS smart earphones reached about 300 million units in 2021,with approximately 37%YoY increase.With more mature int

67、elligent voice interaction functions and continuous improvement of user experience,the penetration rate of TWS smart earphones in overall earphone market continues to increase and is expected to keep growing in future.According to the statistics of CCS Insight,another well-known consulting agency,th

68、e global shipment of smart wearable products represented by smart watches and smart bands reached about 232 million in 2021,with approximately 20.2%YoY increase.While the market size is growing steadily,high-accuracy health monitoring technology is also under developing and improvement,which is expe

69、cted to create new applications and market demands for smart wearable products in the future.The rapid development of the new generation of smart hardware products has also boosted the demand for related precision components such as high-precision optical components and modules,precision acoustic co

70、mponents,MEMS sensors and micro-system modules,haptic components,and precision structural parts,thus creating new directions and market space for precision components products.With the new development stage of the industry and the rise of smart hardware products,the industry also shows a clearer com

71、petition pattern.From the perspective of brand and enterprises,the global technology and consumer electronics industry shows a centralized trend in the competition.The leading enterprises with strong competitiveness and brand awareness demonstrate clear competitive advantages by leveraging their res

72、ource in technologies,talents,funds,brands and industrial ecosystem,and thus lead the technology and product innovation in the industry to a certain extent.From the perspective of supply chain,global technology and consumer electronics industry continued to shift the middle-end of the supply chain t

73、o China and other developing countries.In particular,with the continuous improvement of Chinas political/economic environment,fundamental infrastructure,industrial layout,management/technical talent resources and other aspects,the overall competitiveness of electronic manufacturing enterprises of Ch

74、ina is improved significantly,thus effectively undertake the demand of global industry,and obtain new development opportunities.II.The Companys main business during the reporting period The Company is committed to serve the leading customers in the global technology and consumer electronics industry

75、 by providing vertically integrated product solutions of precision components and smart hardware,as well as related design,R&D and Goertek Inc.Annual Report 2021 15 manufacturing services.The Companys main business divides into three segments including precision components business,smart audio devic

76、e business and smart hardware business.The precision components business focuses on acoustics,optics,microelectronics,structural components,and other precision components.The related products include micro speaker/receiver,speaker module,haptic component(actuator),wireless charging device,antenna,ME

77、MS microphone,MEMS sensors,micro-system module,VR optical component and module,AR optical component,AR light engine,precision structural parts and etc.The above-mentioned products are widely applied in devices such as smartphones,tablets,smart wireless earphones,VR,AR,smart wearable and smart home d

78、evices.Smart audio device business focuses on providing products related to audio,voice interaction,artificial intelligence,and other technologies.The main products include smart wireless earphones(TWS),wired/wireless earphones,smart speakers,etc.Smart hardware business focuses on providing products

79、 related to entertainment,health and home security.The main products include VR,AR,smart wearable products,gaming consoles and accessories,smart home products,etc.The Company has innovative competitive advantages in the fields of acoustics,optics,MEMS microelectronics and precision manufacturing,and

80、 owns many intellectual property rights in the field of precision parts and components.In addition,the Company has accumulated rich experience in projects by cooperating with industry-leading customers in the field of smart audio device and smart hardware through ODM,JDM and other business modes.Dur

81、ing the reporting period,the Company maintained a good,long-term cooperative relationship with leading customers in the global technology and consumer electronics industry,kept growing in the number of patent applications and in technological capabilities.As a result,the company has been constantly

82、recognized by global customers for its product solutions and service capability,and remains being an industry-leading manufacturer in the fields of micro speakers,MEMS microphones,MEMS sensors,TWS,VR products,smart wearable products,gaming console and accessories,etc.During the reporting period,due

83、to the continuous growth of demand of smart hardware products such as VR,TWS,smart wearable products,gaming consoles and accessories,and the related precision components,the Company has achieved significant growth in revenue and net profit.At the same time,the Company further improved its position i

84、n the industry.During the reporting period,the Company won many honors,including being ranked the 3rd company in the Top-100 China electronic component enterprises based on comprehensive economic indexes,the 86th company in the Top-500 private enterprises in Chinas manufacturing industry,the 164th c

85、ompany in the Top-500 private enterprises in China,as well as being the executive member company of CITIF.Analysis of Core Competitiveness 1.Industry-leading precision and intelligent manufacturing capabilities Goertek Inc.Annual Report 2021 16 In technology and consumer electronics related fields,t

86、he Company has been widely recognized for precision manufacturing capabilities and obtains great reputation.Relying on the core capabilities and long-term experience in the field of precision manufacturing,the Company has continuously improved the processing accuracy,efficiency and quality of precis

87、ion components and smart hardware products.The Company has in-house development capabilities of various core raw materials,and The Company adopted multiple advanced processes and technologies such as ultra-high-precision mold,high-precision metal/non-metal processing,ultrasonic technology and laser

88、technology,to build industry-leading precision manufacturing capabilities in the production of precision optical components,MEMS microphones,MEMS sensors,micro-system modules and precision structural parts,thus ensuring the delivery of the products with high precision,high efficiency and high qualit

89、y.At the same time,the Company actively explores the development of intelligent manufacturing mode based on the capacities of advanced equipment development and flexible automation production.In the fields of automation,machine vision and AI related to intelligent manufacturing,the Company has built

90、 a future-oriented core capability of intelligent manufacturing by continuing investing in independent R&D,introducing global advanced technologies,core equipment and best practice experience for system integration,thus improving the manufacturing in all aspects through the application of informatio

91、n,automation,artificial intelligence and other technologies.The Company promotes the transformation of its manufacturing to a more digitalized,connected,intelligent,and service-oriented model,and to build the core capabilities of future-oriented intelligent manufacturing.2.Multi-technologies integra

92、tion platform and strong team of R&D personnel The Company has established a product R&D and manufacturing platform integrating materials,structures,electronic circuits,software algorithms,wireless communication,advanced technology,testing,automation and other technologies.Through cross-domain techn

93、ology integration,the Company provides customers with advanced and systematic solutions for precision components and smart hardware products.The Company attaches great importance to the integration and cultivation of outstanding talents in the fields of acoustics,optics,microelectronics,wireless com

94、munication,precision manufacturing,automation,and other sectors around the world.The Company has set up a team of technical personnel with profound technical strength and rich experience in product projects,and has made a long-term cooperation with many well-known universities and scientific researc

95、h institutions,such as Beijing University of Aeronautics and Astronautics,Tsinghua University,Shanghai Jiao Tong University,Harbin Institute of Technology,Nanjing University,Southeast University,Changchun Institute of Optics,Fine Mechanics and Physics(CIOMP),Shandong University,China Ocean Universit

96、y(OUC),Changchun University of Science and Technology and Dalian University of Technology,which forms an open and comprehensive technology R&D platform in support of continuous innovation and R&D of technologies and products.During the reporting period,the Company applied for 3,468 patents,including

97、 2,539 invention patents.A total of 2,675 patents has been granted,including 1,036 invention patents.Till December 31,2021,the Company has totally applied for 25,818 patents Goertek Inc.Annual Report 2021 17(including 3,322 foreign patent applications),including 13,102 invention patents;Total of 15,

98、525 patents have been granted,including 4,165 invention patents.3.Continuous strategic innovation and transformation,and stable high-value customer relationships Facing the complex macroeconomic situation of domestic and overseas and the slowdown in the growth of the smartphone industry,the manageme

99、nt of the Company actively carries out strategical innovation and transformation.While continuing to consolidate the core competitive advantages in the conventional precision component business,the Company firmly grasps the innovation opportunities of smart hardware products in technology and consum

100、er electronics industry.Relying on the high-value customer resources and good customer relationships worldwide,the Company focuses on the market and technology and continues to explore new business growth opportunities in the fields of TWS,VR/AR,gaming and accessories,smart wearable devices,etc.The

101、Company optimizes the allocation of strategical resource,supports strategical product development,continues strengthening and further utilize the customer resource advantages by closely following the world-class customers,in an effort to transform the needs of high-value customers into an inexhausti

102、ble driving force for the Companys sustainable development.4.Excellent core management team Although the Company experiences a rapid and sound development,the core management team keeps a steady and efficient style as always.Facing the challenges and demands of smart hardware products in the post mo

103、bile era such as rapid development,high quality,high precision manufacturing,short delivery cycle and complex customer certification process,the core management team promptly response to the market and makes changes and innovations continuously,to keep and enhance the Companys capabilities of strate

104、gic management,operation,R&D,precision and intelligent manufacturing.The Company attaches importance to and promotes the internationalization,specialization and rejuvenation of its core management team,and actively brings in senior management talents and professionals from many international leading

105、 enterprises.At the same time,the Company has strengthened the echelon of its talent team,more and more young talents grow up into the Companys core management team through training and practice.The Company boasts a management team with both experience and vitality that continues to promote the Comp

106、anys stable and fast development in the future.IV.Analysis of Main Business 1.Overview In 2021,the national economy was recovering after the outbreak of the epidemic,new changes presented in both domestic and overseas,and more challenges appeared in the process to maintain the stability of the econo

107、my.Under that situation,China government maintained the continuity and pertinence of macro policies,provided necessary support for economic recovery,and Goertek Inc.Annual Report 2021 18 adopted a series of effective measures,such as optimizing enterprise supporting policies,improving business envir

108、onment,strengthening technology innovation and stabilizing the industry and supply chain,which finally supported Chinas economy to achieve a relatively high growth rate among its fellow countries.Facing the complex global political and economic environment,the repeated COVID-19 outbreaks in some cou

109、ntries and regions,as well as the challenges in global supply chain operation,the management and all staff of the Company made their best efforts to respond,and successfully completed business development,project delivery,epidemic prevention and control,operation improvement and other important work

110、.Finally,the Company has achieved excellent business results with a remarkable growth in both revenues and profits in 2021.In recent years,the growth of the global smartphone market has slowed down.However,COVID-19 has impacted peoples lives and work style,bringing in significant increase of demand

111、for smart hardware devices in the applications such as online telecommuting,social entertainment,sports and health.As a result,the emerging market of smart hardware products represented by VR,TWS,smart wearable,gaming consoles and accessories maintained a stable and rapid growth.Due to the Companys

112、strategical investment in smart hardware business in recent years,the growth of the new smart hardware product market has accelerated the sound development of the Companys business,in both precision components,smart audio devices and smart hardware sectors.During the reporting period,the Company con

113、tinued to uphold the product strategy of precision components+smart hardware by actively promoting the business of precision components,such as acoustics,optics,microelectronics and structural parts,as well as smart hardware products such as VR/AR,smart wireless earphones(TWS),smart wearable and sma

114、rt home devices.Especially,the businesses in VR,TWS,gaming consoles and accessories has experienced a rapid growth.By continuing to focus on leading customers in the technology and consumer electronics industry and to improve customer service and relationships,the Companys business development have

115、also achieved fruitful results.The promotion of the internal reform of the Company has realized more efficient decision-making process,and the continuous improvement of the internal management and operation,lays a good foundation for the further development of the Company in the future.During the re

116、porting period,the Company achieved a revenue of RMB 78,221.4186 million,with a 35.47%YoY increase.The Company realized a net profit attributable to shareholders of listed companies of RMB 4,274.703 million,with a 50.09%YoY increase.The operating cost of the Company was RMB 67,167.6667 million,with

117、a 38.54%YoY increase.During the reporting period,the total amount of the Companys sales expenses,administrative expenses,R&D expenses and financial expenses was RMB 6,733.702 million,with an 11.81%YoY increase.During the reporting period,the Company further strengthened the development of new techno

118、logies,products and techniques,actively brought in high-level R&D talents,and invested RMB 4,301.3428 million in R&D,accounting for 5.50%of the revenue and 15.40%of the latest audited net assets of the Company.Goertek Inc.Annual Report 2021 19 During the reporting period,the net cash flow from opera

119、ting activities of the Company was RMB 8,598.4755 million,with an 11.93%YoY increase.The main reasons are as follows:during the reporting period,the Company expanded the business scale,improved the operating cycle,and thus the net cash flow from operating activities increased.2.Revenue and cost 1)Co

120、mposition of operating revenue Unit:RMB 2021 2020 Year-on-year change Amount Proportion in operating revenue Amount Proportion in operating revenue Total of operating revenue 78,221,418,618.02 100%57,742,742,893.96 100%35.47%Classified by industry Electronic components 76,946,324,805.73 98.37%56,531

121、,616,437.84 97.90%36.11%Other business income 1,275,093,812.29 1.63%1,211,126,456.12 2.10%5.28%Classified by product Precision components 13,840,133,491.33 17.69%12,205,410,031.94 21.13%13.39%Smart audio device 30,297,084,891.23 38.73%26,674,264,183.42 46.20%13.58%Smart hardware 32,809,106,423.17 41

122、.94%17,651,942,222.48 30.57%85.87%Other business income 1,275,093,812.29 1.63%1,211,126,456.12 2.10%5.28%Classified by region Domestic 7,571,525,782.78 9.68%6,999,168,774.17 12.12%8.18%Overseas 70,649,892,835.24 90.32%50,743,574,119.79 87.88%39.23%Classified by sales mode Direct selling 77,770,329,7

123、29.13 99.42%57,438,222,579.69 99.47%35.40%Distribution 451,088,888.89 0.58%304,520,314.27 0.53%48.13%(2)Industries,products,regions and sales modes accounting for more than 10%of the Companys operating revenue or operating profit Applicable Not applicable Unit:RMB Goertek Inc.Annual Report 2021 20 O

124、perating revenue Operating cost Gross profit margin YoY change(%)of operating revenue YoY change(%)of operating cost YoY change(%)of gross profit margin Classified by industry Electronic components 76,946,324,805.73 66,054,072,404.35 14.16%36.11%39.24%-1.92%Classified by product Precision components

125、 13,840,133,491.33 10,641,616,932.91 23.11%13.39%14.57%-0.79%Smart audio device 30,297,084,891.23 27,167,160,928.24 10.33%13.58%19.64%-4.54%Smart hardware 32,809,106,423.17 28,245,294,543.20 13.91%85.87%82.89%1.40%Classified by region Domestic 6,878,087,190.33 5,921,035,748.23 13.91%7.59%8.97%-1.10%

126、Overseas 70,068,237,615.40 60,133,036,656.12 14.18%39.75%43.15%-2.04%Classified by sales mode Direct selling 76,499,084,617.78 65,666,703,312.23 14.16%36.05%39.18%-1.93%Distribution 447,240,187.95 387,369,092.12 13.39%47.68%50.64%-1.70%If the statistical caliber of the Companys main business data ha

127、s been adjusted in the reporting period,adjusted statistics of main business are based on the caliber at the end of the reporting period of last year.Applicable Not applicable (3)Whether the Companys revenue from physical products sales is greater than the revenue from providing services Yes No Clas

128、sification of industry Item Unit 2021 2020 Year-on-year change Electronic components industry Sales volume Ten thousand PCS 540,341.87 413,499.31 30.68%Output volume Ten thousand PCS 546,976.95 416,352.11 31.37%Inventory volume Ten thousand PCS 34,036.09 27,401.01 24.21%Reasons for changes in the re

129、levant data over 30%year-on-year Applicable Not applicable During the reporting period,both of the production volume and sales volume of the Company increased.(4)Fulfillment of major sales contracts and major procurement contracts signed by the Company as of the reporting period Applicable Not appli

130、cable Goertek Inc.Annual Report 2021 21 5)Composition of operating cost Classification of industry Unit:RMB Classification of industry Item 2021 2020 Year-on-year change Amount Proportion in operating cost Amount Proportion in operating cost Electronic components Direct materials 55,843,214,176.77 8

131、4.54%39,047,644,492.84 82.31%43.01%Direct labor expenses 4,058,480,923.72 6.14%3,401,428,878.80 7.17%19.32%Manufacturing expenses 6,152,377,303.86 9.31%4,990,659,944.90 10.52%23.28%Explanation During the reporting period,the Companys overall sales volume increased.At the same time,the sales revenue

132、of Smart audio devices and intelligent hardware products with relatively high material cost increased.(6)Whether there is any change in consolidation scope during the reporting period Yes No During the reporting period,the Company established a subsidiary company GOERTEK MICROELECTRONICS KOREA CO.,L

133、TD.(7)Significant changes or adjustments in the Companys business,products or services during the reporting period Applicable Not applicable (8)Major customers and suppliers Major customers of the Company Sales revenue from top five customer 67,695,045,138.61 Proportion of total sales revenue from t

134、op five customers in total annual sales amount 86.54%Proportion of sales revenue from related parties among top five customers in total annual sales amount 0.00%Information of top five customers No.Name of customer Sales amount(RMB)Proportion in total annual sales amount 1 Customer 1 33,238,529,094.

135、59 42.49%Goertek Inc.Annual Report 2021 22 2 Customer 2 18,457,651,840.69 23.60%3 Customer 3 8,715,498,516.63 11.14%4 Customer 4 3,918,367,657.28 5.01%5 Customer 5 3,364,998,029.42 4.30%Total-67,695,045,138.61 86.54%Other information of major customers Applicable Not applicable The top five customer

136、s do not have associated relationship with the Company,and the Companys directors,supervisors,senior management,core technicians,shareholders holding more than 5%of total shares,actual controllers and other related parties do not directly or indirectly own rights and interests in the main customers.

137、Major suppliers of the Company Total purchase amount from top five suppliers(RMB)19,062,697,560.63 Proportion of total purchase amount from top five suppliers in total annual purchase amount 30.54%Proportion of purchase amount from related parties among top five suppliers in total annual purchase am

138、ount 0.00%Information of top five suppliers No.Name of supplier Purchase amount(RMB)Proportion of total annual purchase amount 1 Supplier 1 7,471,595,122.65 11.97%2 Supplier 2 5,464,068,547.98 8.75%3 Supplier 3 2,732,526,729.39 4.38%4 Supplier 4 1,834,123,435.48 2.94%5 Supplier 5 1,560,383,725.13 2.

139、50%Total-19,062,697,560.63 30.54%Other information of major suppliers Applicable Not applicable The top five suppliers do not have associated relationship with the Company,and the Companys directors,supervisors,senior management,core technicians,shareholders holding more than 5%of total shares,actua

140、l controllers and other related parties do not directly or indirectly own rights and interests in the main suppliers.3.Expenses Unit:RMB 2021 2020 Year-on-year change Note of significant change Goertek Inc.Annual Report 2021 23 Selling expenses 444,869,977.08 476,066,518.64-6.55%No significant chang

141、e Administrative expenses 1,951,657,773.32 1,629,730,793.00 19.75%No significant change Financial expenses 167,099,982.36 490,688,772.09-65.95%The main reasons are as follows:Reduced loss on exchange during the reporting period;convertible bonds were converted into common stocks of the Company,inter

142、est expense reduced;interest income from money funds increased R&D expenses 4,170,074,282.10 3,425,971,011.65 21.72%No significant change 4.R&D Investment Applicable Not applicable Names of major R&D projects Purpose of project Status of project Objectives Expected benefits to future development of

143、the Company R&D project of micro speaker module Develop a new generation of micro speaker module products with high sensitivity,low distortion,large amplitude,waterproof and dustproof features.In progress According to specific technical requirements of the customers,the Company has completed the res

144、earch and development of a number of advanced micro speaker module products,and realized the mass production in smart phones,tablet computers,smart wearable and other products for main customers.The project helps consolidate the Companys competitive advantage and market share in the field of acousti

145、c precision components.R&D project of MEMS sensor and micro system module Develop new generation of MEMS sensors and micro-system module products that are applied to smart wireless earphones,smart wearable devices and other products.In progress Complete the R&D,verification and mass production of ME

146、MS sensors and micro-system module products for terminal products,such as TWS smart wireless earphones,smart wearable devices.The project facilitates the business expansion the Company in the field of MEMS sensors and micro-system modules,and further enhances the Companys comprehensive strength in t

147、he field of MEMS.R&D project of VR/AR precision optical components and modules Develop the precision optical components and module products by using emerging optical technologies such as“Pancake”folded-lightpath lenses and waveguide technology,and promote their application in In progress Complete th

148、e R&D and mass production of optical lens and module products for new generation of all-in-one VR products,and improve the ability of comprehensive solution of optical devices and light-engine modules for AR products.The project helps enhance the Companys competitive advantage and market share in th

149、e field of VR/AR precision optical components and modules,promote the Companys ability to provide customers with customized VR/AR optical solutions,and improve the Companys vertical integration Goertek Inc.Annual Report 2021 24 Names of major R&D projects Purpose of project Status of project Objecti

150、ves Expected benefits to future development of the Company VR/AR products.ability and profitability in the field of VR/AR.R&D project of all-in-one VR HMD Develop lightweight all-in-one VR HMD products featured with high-definition display,precise motion tracking and other features.In progress Coope

151、rate with customers to complete R&D,validation,mass production and delivery of a variety of new-generation all-in-one VR HMD products.The project helps consolidate the Companys competitive advantage and market share in the field of VR.R&D project of TWS smart wireless earphones Develop a new generat

152、ion of TWS smart wireless earphones In progress Cooperate with customers to complete R&D,validation,mass production and delivery of a variety of new-generation of TWS smart wireless earphones It helps consolidate the Companys competitive advantage and market share in the field of TWS smart wireless

153、earphones.R&D project of smart wearable devices for sport and health related applications Develop a new generation of smart wearable devices with functions of independent communication,health mornitoring features and etc.In progress Cooperate with customers to complete R&D,validation,mass production

154、 and delivery of a new generation of smart watches and smart bands.It helps consolidate the Companys competitive advantage and market share in smart wearable devices such as smart watches and smart bands,and supports the Companys smart wearable business for further growth.R&D project of smart wirele

155、ss lightweight AR glasses Develop wireless lightweight AR glasses and their main functional modules for future AR applications.In progress Complete the R&D and trial production of a variety of AR glasses products that,with the functions of data processing and wireless communication,apply advanced pr

156、ecision optics and micro-display technologies such as optical waveguide and silicon-based LED,so as to develop the solution capability for AR glasses and their main functional modules.It helps enhance the Companys R&D experience and technology accumulation in the field of AR and facilitates the busi

157、ness expansion of the Company in AR field.R&D personnel of the Company 2021 2020 Year-on-year change Number of R&D personnel 12,895 12,177 5.90%Proportion of R&D personnel 13.46%13.94%-0.48%Academic structure of R&D personnel Undergraduate 9,148 8,409 8.79%Goertek Inc.Annual Report 2021 25 Postgradu

158、ate 2,414 1,982 21.80%PhD 63 58 8.62%Age of R&D personnel Below the age of 30 5,105 4,821 5.89%Aged between 30 to 40 7,162 6,838 4.74%Over the age of 40 628 518 21.24%The Companys investment in R&D 2021 2020 Year-on-year change Amount of R&D Investment(RMB)4,301,342,763.66 3,532,801,720.56 21.75%Pro

159、portion of R&D investment in operating revenue 5.50%6.12%-0.62%Capitalized amount of R&D investment(RMB)662,993,650.30 541,498,060.65 22.44%Proportion of capitalized R&D investment in R&D investment 15.41%15.33%0.08%Reasons and impacts of significant changes in R&D personnel composition of the Compa

160、ny Applicable Not applicable Reasons for significant changes in the proportion of total R&D investment in operating revenue compared with that of previous year Applicable Not applicable Reasons and explanation of its reasonableness of significant changes in capitalized R&D investment Applicable Not

161、applicable 5.Cash flow Unit:RMB Item 2021 2020 Year-on-year change Sub-total of cash inflow from operating activities 85,523,439,745.15 60,932,031,432.73 40.36%Sub-total of cash outflow from operating activities 76,924,964,217.27 53,249,775,319.05 44.46%Net cash flow from operating activities 8,598,

162、475,527.88 7,682,256,113.68 11.93%Sub-total of cash inflow from investment activities 3,276,323,800.48 505,861,986.28 547.67%Sub-total of cash outflow from investment activities 10,044,700,261.35 5,806,999,821.95 72.98%Net cash flow from investing activities-6,768,376,460.87-5,301,137,835.67 27.68%G

163、oertek Inc.Annual Report 2021 26 Sub-total of cash inflow from financing activities 14,003,754,499.97 15,780,475,210.72-11.26%Sub-total of cash outflow from financing activities 13,616,577,139.69 14,138,013,422.54-3.69%Net cash flow from financing activities 387,177,360.28 1,642,461,788.18-76.43%Net

164、 increase in cash and cash equivalents 2,224,708,917.50 3,818,588,192.22-41.74%Main influencing factors of significant year-on-year changes in relevant data Applicable Not applicable (1)The sub-total of cash inflow from operating activities was RMB 85,523.4397 million,with year-on-year increase of 4

165、0.36%,mainly due to the expansion of the Companys sales and the increase of sales receipts and advances received during the reporting period.(2)The sub-total of cash outflow from operating activities was RMB 76,924.9642 million,with year-on-year increase of 44.46%,mainly due to the increase of the C

166、ompanys purchase of raw materials and payment of employee salaries during the reporting period.(3)The sub-total of cash inflow from investment activities was RMB 3,276.3238 million,with year-on-year increase of 547.67%,mainly due to the fact that the structural deposits purchased by the Company were

167、 collected at maturity during the reporting period.(4)The sub-total of cash outflow from investment activities was RMB 10,044.7003 million,with year-on-year increase of 72.98%,mainly due to the increase of the Companys purchase of fixed assets and other long-term assets,and purchase of structured de

168、posits during the reporting period.(5)The net cash flow from financing activities was 387.1774 million,with a year-on-year decrease of 76.43%,mainly due to RMB 3,995 million in cash received by the Company from issuing bonds during the previous reporting period.The reason for significant difference

169、between the net cash flow from the Companys operating activities during the reporting period and net profit in current year.Applicable Not applicable The net cash flow from operating activities exceeded the net profit of current year by 99.64%,mainly due to the improvement of the Companys refined op

170、eration capacity,optimization of operation cycle and reduction of capital occupation.V.Analysis of Non-main Business Applicable Not applicable Unit:RMB Amount Proportion in total Explanation of the cause Whether it is Goertek Inc.Annual Report 2021 27 profit sustainable Investment income 469,239,884

171、.79 10.19%It is mainly due to the investment income obtained from transaction of foreign exchange and equity disposal of the Company No Gains from changes in fair value-48,848,625.93-1.06%It is mainly due to the change in valuation of the Companys stock foreign exchange derivatives No Asset impairme

172、nt-241,075,506.45-5.23%It is mainly due to the provision for inventory depreciation No Non-operating revenue 22,444,738.18 0.49%It is mainly due to the unpayable payments and liquidated damages received No Non-operating expenditure 99,858,949.06 2.17%It is mainly due to the losses on scrapping of no

173、n-current assets of the Company No VI.Analysis of Assets and Liabilities 1.Major changes in asset composition Unit:RMB December 31,2021 January 1,2021 YoY change(%)Note of significant change Amount Proportion in total assets Amount Proportion in total assets Cash and bank balances 10,048,521,696.09

174、16.45%7,788,139,761.68 15.72%0.73%No significant change Accounts receivable 11,899,214,525.92 19.48%9,951,611,596.65 20.09%-0.61%No significant change Inventories 12,082,308,485.38 19.78%9,170,731,903.19 18.52%1.26%During the reporting period,inventory reserves increased along with business growth o

175、f the Company Long-term equity investments 437,402,203.91 0.72%337,410,802.56 0.68%0.04%No significant change Fixed assets 18,123,352,480.76 29.67%14,674,535,924.15 29.63%0.04%During the reporting period,the Company raised funds to invest in projects,increased the purchase of production equipment,an

176、d transferred of part of the infrastructure projects reached usable state to fixed assets Goertek Inc.Annual Report 2021 28 Construction in progress 2,127,055,853.77 3.48%2,078,910,639.92 4.20%-0.72%No significant change Right-of-use assets 330,796,520.66 0.54%462,821,988.61 0.93%-0.39%No significan

177、t change Short-term borrowings 4,284,859,347.02 7.02%3,189,865,281.20 6.44%0.58%During the reporting period,the demand for daily operating funds increased and short-term borrowings increased Contract liabilities 2,210,825,761.69 3.62%772,033,187.85 1.56%2.06%During the reporting period,the goods wer

178、e prepared for customers,and advance from customers increased Long-term borrowings 2,204,215,784.74 3.61%2,754,299,262.02 5.56%-1.95%No significant change Lease liabilities 210,209,955.40 0.34%298,830,498.84 0.60%-0.26%From January 1,2021,the Company implemented the new lease rules,and payed the ren

179、t as agreed Foreign assets account for a relatively high proportion Applicable Not applicable 2.Assets and liabilities measured at fair value Applicable Not applicable Unit:RMB Item Opening balance Profit and loss from changes in fair value in the report period Cumulative changes in fair value inclu

180、ded in equity Impairment accrued in current period Purchase amount in the reporting period Sales amount in the reporting period Other changes Closing balance Financial assets 1.Held-for-trading financial assets(excluding derivative financial assets)125,327,442.62 64,914,061.44 2,745,091,734.73 2,635

181、,098,910.00 300,234,328.79 2.125,462,174.67-104,999,182.31 20,462,992.36 Goertek Inc.Annual Report 2021 29 Derivative financial assets 3.Other debt investments 4.Investment in other equity instruments 357,307,056.65 53,916,285.45 129,080,638.64 64,601,040.12 465,677,764.54 Sub-total of financial ass

182、ets 608,096,673.94-40,085,120.87 53,916,285.45 2,874,172,373.37 2,699,699,950.12 786,375,085.69 Total of above amounts 608,096,673.94-40,085,120.87 53,916,285.45 2,874,172,373.37 2,699,699,950.12 786,375,085.69 Financial liabilities 43,578,775.71-8,763,505.06 6,427,059.28 43,578,775.71 15,190,564.34

183、 Other changes None Whether the measurement attributes of major assets of the Company have changed significantly during the reporting period Yes No 3.Restrictions on asset rights as of the end of reporting period Items Book value at year end(RMB)Reasons for restrictions Cash and bank balances 910,62

184、0,794.05 Deposit for bills and borrowings Notes receivable 6,095,782.39 Bill pledge and others Other non-current assets 122,540,194.44 When large-denomination certificates of deposit was pledged to the bank,the bank issued a financing guarantee Accounts receivable 5,000,000.00 Re-insurance accounts

185、receivable not derecognized Total 1,044,256,770.88 .Analysis of Investment 1.Overall situation Applicable Not applicable Investment amount in 2021(RMB)Investment amount in 2020(RMB)YoY change(%)Goertek Inc.Annual Report 2021 30 533,092,515.56 207,730,344.46 156.63%2.Major equity investments acquired

186、 during the reporting period Applicable Not applicable Goertek Inc.Annual Report 2021 31 3.Major non-equity investments in progress during the reporting period Applicable Not applicable Unit:RMB Name of project Investment mode Whether it is the investment in fixed assets Project industry Amount inve

187、sted during the reporting period Accumulated actual investment by the end of the reporting period Source of funds Project progress Estimated income Accumulated income by the end of the reporting period Reasons for failure to reach the planned progress and expected benefits Disclosure date(if any)Dis

188、closure index(if any)Project of Dongguan Songshan Lake Goertek Industrial Park Self-built Yes Electronic components 119,630,009.50 310,725,561.33 Self-raised funds 13.93%Not applicable Not applicable Not applicable January 3,2019 For details,see Announcement of Goertek Inc.on Signing of Investment C

189、ooperation Agreement between the Wholly-owned Subsidiary of the Company and the Management Committee of Dongguan Songshan Lake High-tech Industrial Development Zone published in the information disclosure media such as CNINFO(http:/),Securities Times,China Securities Journal,Goertek Inc.Annual Repor

190、t 2021 32 Shanghai Securities News,Securities Daily.Total-119,630,009.50 310,725,561.33-4.Financial asset investment(1)Securities investment Applicable Not applicable Unit:RMB Type of security Security code Short name Initial investment cost Accounting measurement model Book value at the beginning P

191、rofit and loss from changes in fair value in the report period Cumulative changes in fair value included in equity Purchase amount in the reporting period Sales amount in the reporting period Profit and loss in the reporting period Book value at the end of the reporting period Accounting items Sourc

192、e of funds Domestic and foreign stocks KOPN KOPN 169,951,481.05 Fair value measurements 120,327,442.62 63,575,754.04 85,098,910.00 69,142,817.18 98,804,286.66 Held-for-trading financial assets Self-raised funds Total 169,951,481.05-120,327,442.62 63,575,754.04 85,098,910.00 69,142,817.18 98,804,286.

193、66-Date of announcement disclosure by the Board of Directors for approval of securities investment February 11,2017 Date of announcement disclosure by shareholders meeting for approval of securities investment March 2,2017 Goertek Inc.Annual Report 2021 33(2)Derivatives investment Applicable Not app

194、licable Unit:RMB 10,000 Name of derivative investment operator Associated relationship Whether it is related party transaction Type of derivatives investment Initial amount of derivative investment Start date End date Opening balance Amount of purchase during the reporting period Amount of sales dur

195、ing the reporting period Amount of provision for impairment(if any)Closing balance Proportion of investment amount in the Companys net asset at the end of the reporting period Actual profit and loss amount in the reporting period Bank Non associated relationship No Option 330,812.43 330,812.43 243,5

196、51.74 453,225.87 121,138.30 4.34%4,083.00 Bank Non associated relationship No Forward 515,467.10 515,467.10 1,288,528.97 1,285,014.09 518,981.98 18.58%25,495.32 Bank Non associated relationship No Swap 214,630.06 214,630.06 191,271.00 227,381.46 178,519.60 6.39%4,766.87 Total 1,060,909.59-1,060,909.

197、59 1,723,351.71 1,965,621.42 818,639.88 29.31%34,345.19 Source of funds for derivatives investment Self-raised funds Litigation involved(if any)None Date of announcement disclosure by the Board of Directors for approval of the investment in derivatives March 27,2021 Goertek Inc.Annual Report 2021 34

198、 Date of announcement disclosure by shareholders meeting for approval of the investment in derivatives May 8,2021 Risk analysis and control measures for derivatives positions during the reporting period(including but not limited to market risk,liquidity risk,credit risk,operational risk,legal risk,e

199、tc.)1.The financial derivatives transactions carried out by the Company are for the purpose of fixing costs,avoiding and preventing risks of foreign exchange rate and interest rate,and prohibiting any risk speculation.The trading quota of the Companys financial derivatives shall not exceed the autho

200、rized quota as reviewed and approved by the Board of Directors or the general meeting of shareholders.2.The Company has formulated a strict management system for financial derivatives transactions,which clearly stipulates the operating principles,approval authority,responsible departments and person

201、s,internal operating procedures,information isolation measures,internal risk reporting system and risk handling procedures,and information disclosure of financial derivatives transactions,in order to control trading risks arising therefrom.3.The Company shall carefully review the terms of contracts

202、signed with qualified banks and other financial institutions,and strictly implement the risk management system to prevent legal risks.4.The Companys business personnel will continue to track the changes in the open market price or fair value of financial derivatives,timely assess the changes in risk

203、 exposure of financial derivatives transactions,and regularly report to the management of the Company.If any abnormal situation,inform the Board of Directors of the risk and take emergency measures accordingly.5.The internal audit department regularly conducts internal audit on the compliance of fin

204、ancial derivatives transactions.In case of changes in market price or fair value of invested derivatives during the reporting period,the analysis of fair value of the derivatives shall disclose the specific methods used and the setting of relevant assumptions and parameters Changes in the fair value

205、 of foreign exchange derivatives are calculated based on the difference between the fair market price and the contract price in the month of the settlement date determined by the Company.Description of whether the accounting policies and specific accounting principles for the Companys derivatives ha

206、ve changed significantly compared with that of previous reporting period The accounting policies and specific accounting principles for the Companys derivatives have no significant change compared with that of previous reporting period.Special opinions of independent directors on the Companys deriva

207、tives investment and risk control The Company carries out financial derivatives transactions mainly to avoid foreign exchange risks associated with RMB exchange rate fluctuations and effectively control the cost uncertainty caused by foreign exchange risks.The Company has formulated the Management S

208、ystem of Goerteks Financial Derivatives Trading Business,which is conducive to strengthen the management and control of the risks associated with financial derivatives transactions.The deliberation,approval,voting and other procedures of this proposal are in line with the relevant provisions of Comp

209、any Law,Articles of Association,and overall interests of the Company,without damage to the legitimate rights and interests of minority shareholders.Therefore,the Company has been approved to carry out the Goertek Inc.Annual Report 2021 35 business above.Goertek Inc.Annual Report 2021 36 5.Use of rai

210、sed funds Applicable Not applicable (1)Overall use of raised funds Applicable Not applicable Unit:RMB 10,000 Year of raising Means of raising Total fund raised The total amount of raised funds used during the reporting period Accumulated amount of raised funds that have been used Total amount of rai

211、sed funds with changed purposes during the reporting period Accumulated total amount of raised funds with changed purposes Proportion of accumulated total amount of raised funds with changed purposes Total amount of raised funds that have not been yet used Purpose of the raised funds that have not b

212、een yet used The amount of raised funds that have been idle for more than two years 2020 Public issuance of convertible bonds 398,903.00 129,831.49 207,055.93 0.00 0.00 0.00%191,847.07 Supplementing working capital and deposited in the special account for raised funds 0.00 Total-398,903.00 129,831.4

213、9 207,055.93 0.00 0.00 0.00%191,847.07-0.00 Description of overall use of raised funds The Company actually invested RMB 1,298.3149 million in current period.As of December 31,2021,the Company had used a total of RMB 2,070.5593 million of raised funds.The amount of unused raised funds was RMB 1,918.

214、4707 million(interest excluded),of which RMB 1,200 million was used to temporarily supplement the working capital,and the remaining funds was deposited in the special account for raised funds of the Company.(2)Projects in which the raised funds were proposed to be invested Applicable Not applicable

215、Unit:RMB 10,000 Committed investment projects and investment of over-raised funds Whether the project has been Total committed investmeTotal investment after adjustmeAmount invested during the Accumulated investment Investment progress at the end The date on which the project Benefits realized durin

216、g the Whether it achieved the Whether there is any significanGoertek Inc.Annual Report 2021 37 changed(including partial changes)nt of raised funds nt(1)reporting period amount at the end of the reporting period(2)of the period(3)(2)/(1)reaches its intended usage state reporting period expected bene

217、fits t change in the feasibility of the project Committed investment projects The project of true wireless smart earphones No 218,903 218,903 93,433 164,620.2 75.20%August 31,2022 33,365.12 Not applicable No AR/VR and related optical module project-AR/VR project No 60,000 60,000 30,375.77 30,375.77

218、50.63%August 31,2022 46,014.2 Yes No AR/VR and related optical module project-optical module project No 40,000 40,000 3,168.4 3,168.4 7.92%August 31,2022 825.17 Not applicable No Qingdao R&D center project No 80,000 80,000 2,854.32 8,891.56 11.11%August 31,2022 Not applicable Not applicable No Sub-t

219、otal of committed investment projects-398,903 398,903 129,831.49 207,055.93-80,204.49-Direction of the investment with over raised funds Not applicable Total-398,903 398,903 129,831.49 207,055.93-80,204.49-Descriptions and reasons for failure of meeting the planned schedule or expected revenue(by pr

220、oject)Due to the impact of the project and the actual needs of the Company,the project of Qingdao R&D Center was behind schedule.The Company may accelerate subsequent investment according to the actual needs,and will strive to achieve the maximum efficiency of the raised funds.Description of signifi

221、cant change in the feasibility of the project Not applicable Amount,use of over-raised funds and progress of use thereof Not applicable Change in location of the project invested with raised funds Applicable Occurred in previous years On August 20,2020,the Company held the 8th meeting of the 5th Boa

222、rd of Directors and the 6th meeting Goertek Inc.Annual Report 2021 38 of the 5th Board of Supervisors,which reviewed and approved the Proposal on Changing the Implementation Subject and Implementation Location of Some Investment Projects with Raised Capital and Increasing the Capital of Wholly-owned

223、 Subsidiaries,and agreed to change:the implementation subject of AR/VR and related optical module projects from Goertek Inc.to wholly-owned subsidiaries Weifang Goertek and Goertek Optical;The implementation location was changed accordingly from Goertek Photoelectric Park in Weifang High-tech Zone t

224、o Weifang Goertek Plant,east of Gaoxin No.2 Road,south of Yuqing East Street in Weifang comprehensive free trade zone and Goertek Optical Plant,phase III of Goertek Photoelectric Park in Weifang High-tech Zone;The Company increased the capital to Weifang Goertek with the raised funds of RMB 600 mill

225、ion and increased the capital to Goertek Optical with the raised funds of RMB 400 million,for the purpose of specific implementation of above-mentioned investment projects.Adjustment on how to invest the projects with raised funds Not applicable Upfront investment of the project with raised funds an

226、d replacement thereof Applicable On July 9,2020,the Company held the 7th meeting of the 5th Board of Directors and the 5th meeting of the 5th Board of Supervisors,which reviewed and approved the Proposal on Replacing the Self-raised Funds Invested in the Projects in Advance with the Raised Funds,and

227、 agreed to use the raised funds to replace the self-raised funds of RMB 315.7238 million invested in the investment projects in advance.The fund replacement above has been verified by Zhongxi Certified Public Accountants(special general partnership)Co.,Ltd.,and an authentication report has been issu

228、ed.Temporary replenishment of working capital with idle raised funds Applicable On July 9,2020,the Company held the 7th meeting of the 5th Board of Directors and the 5th meeting of the 5th Board of Supervisors,which reviewed and approved the Proposal on Temporary Replenishment of Working Capital wit

229、h Idle Raised Funds.It was agreed that the Company shall use the idle raised funds not exceeding RMB 2.5 billion to temporarily supplement working capital.The use period shall not exceed 12 months from the date of approval by the Board of Directors.After expiration,it shall be returned to the specia

230、l account for raised funds in a timely manner.The Company returned RMB 0.8 billion and RMB 1.7 billion of the raised funds to the special account for raised funds in advance on September 17,2020 and November 4,2020 respectively.On November 5,2020,the Company held the 11th meeting of the 5th Board of

231、 Directors and the 9th meeting of the 5th Board of Supervisors,which reviewed and approved the Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds.It was agreed that the Company temporarily supplements the working capital with idle raised funds of no more than RMB 2

232、,500 million.The validity period shall not exceed 12 months from the date of approval by the Board of Directors.After expiration,it shall be returned to the special account for raised funds in a timely manner.The Company returned RMB 0.5 billion and RMB 2 billion of the raised funds to the special a

233、ccount for raised funds in advance on October 29,2021 and November 3,2021 respectively.On November 8,2021,the Company held the 24th meeting of the 5th Board of Directors and the 19th meeting of the 5th Board of Supervisors,which reviewed and approved the Proposal on Temporary Replenishment of Workin

234、g Capital with Partial Idle Raised Funds.It was agreed that the Company temporarily supplements the working capital with idle raised funds of RMB 1,200 million.The validity period of which shall not exceed 12 months from the date of approval by the Board of Directors.After Goertek Inc.Annual Report

235、2021 39 expiration,it shall be returned to the special account for raised funds in a timely manner.Amount and reasons for the balance of raised funds in the implementation of the project Not applicable Purpose of the raised funds that have not been yet used The unused raised funds shall be deposited

236、 in the special account for raised funds.Problems or other situations in the use and disclosure of raised funds None(3)Changes in the projects in which the raised funds were proposed to be invested Applicable Not applicable There was no change in the projects in which the raised funds were proposed

237、to be invested during the reporting period.Sales of major assets and equities 1.Sales of major assets Applicable Not applicable The Company did not sell any major assets during the reporting period.2.Sales of major equity Applicable Not applicable .Analysis of major subsidiaries and associates Appli

238、cable Not applicable Major subsidiaries and associates with an impact of more than 10%on the Companys net profit Unit:RMB Name of company Type of company Main business Registered capital Total assets Net asset Operating revenue Operating profit Net profit Weifang Goertek Subsidiary Electronic compon

239、ent 1,405,601,925.00 10,971,185,728.12 3,904,375,154.73 27,282,319,193.58 1,695,784,116.30 1,491,760,091.98 Goertek Inc.Annual Report 2021 40 manufacturing Goertek Technology(Vietnam)Subsidiary Electronic component manufacturing 362,762,400.00 9,395,840,422.98 2,096,244,381.21 20,651,380,536.59 1,28

240、5,740,959.38 1,280,038,474.51 Goertek(HongKong)Co.,Limited Subsidiary Electronic component manufacturing 1,542,045.00 6,835,046,824.10 1,075,332,121.44 19,422,367,892.29 836,073,059.54 706,793,733.63 Acquisition and disposal of subsidiaries during the reporting period Applicable Not applicable Name

241、of company Approach on acquisition and disposal of subsidiaries during the reporting period Impact on overall production,operation and performance GOERTEK MICROELECTRONICS KOREA CO.,LTD.Newly established No significant impact Description of major subsidiaries and associates None.Structural Entities

242、Controlled by the Company Applicable Not applicable XI.Outlook for the Future Development of the Company 1.Industry trend and competition In the mobile era,smartphones and related smart hardware products have been the main focus of innovation and the growth drivers of the global technology and consu

243、mer electronics industry over the past many years.However,the growth of smartphone industry has slowed down in recent years.According to the statistics of IDC,a well-known consulting agency,the global smartphone shipment in 2022 is expected to reach 1.39 billion units,with year-on-year increase of a

244、pproximately 3%.It is predicted that the average annual compound growth rate of smartphone shipments around the world will be about 3%from 2022 to 2025.As the core hardware in the mobile era,the slowdown of smartphone market also reflects the transition to the post-mobile era of the global technolog

245、y and consumer electronics industry.In the post-mobile era,along with the development of new technologies such as semiconductor,5G,micro-display,sensor,intelligent interaction,battery,cloud and edge computing,the new generation of smart hardware products are greatly improved in Goertek Inc.Annual Re

246、port 2021 41 functions,and are suitable for more diversified applications.Many new smart hardware devices with great potential have revealed themselves.In particular,the products such as VR/AR,smart wearable devices and smart wireless earphones have maintained a rapid growth in recent years,which at

247、tracts extensive attention in the global market.These products are expected to become the driving force for further development of global intelligent hardware market in the post-mobile era.According to the statistics of IDC,the global shipment of VR/AR products is expected to reach 19.10 million uni

248、ts in 2022,with approximately 67.5%YoY increase.The CAGR of global VR shipment from 2022 to 2025 is expected to be about 59.2%.The number of end users keeps growing steadily along with the upgrade of VR hardware.With the development and maturity of VR content and applications such as social networki

249、ng,games,entertainment and live broadcasting,VR products are expected to boost in the next few years.According to the statistics of IDC,the global shipment of AR products is expected to reach 1.35 million units in 2022,with approximately 309%YoY increase.The CAGR of global AR shipment from 2022 to 2

250、025 is expected to reach approximately 121.4%.With the concept of integration of virtual content and real life and the ability to seamlessly connect to smartphone ecosystem,AR product shows unlimited future possibilities and great market potentials,and is expected to become one of the core smart har

251、dware products in consumer electronics industry in the post-mobile era.Many well-known brand companies and start-ups in the industry continue to explore and tackle the key technological roadblocks in semiconductor chips,optical waveguide,micro displays,new materials and other fields.The break-thru o

252、f those technologies are also expected to create a broader path for AR products in the next few years.According to the statistics of CCS Insight,a famous consulting agency,the global shipment of smart wearable products is expected to reach 270 million units in 2022,with approximately 16.4%YoY increa

253、se.In the post epidemic era,consumers pay greater attention to sports and health.For billions of people over the globe who may have hypertension,diabetes or other sub-health situations,high precision and reliable health monitoring technologies,especially blood pressure monitoring and non-invasive bl

254、ood sugar level monitoring technology,are the focus of innovation in smart wearable devices,and have attracted significant amount of investment from many industry leaders.The maturity and application of above technologies are expected to bring dramatic growth for smart wearable products in future.Ac

255、cording to the statistics of Futuresource,a well-known consulting agency,the global shipment of smart wireless earphones is expected to keep growing steadily in the next few years,and the CAGR of TWS earphones from 2021 to 2025 is expected to reach about 21.8%.With improved voice interaction functio

256、n,more product choices,better features and user experience,the TWS product penetration in the global earphone market is expected to increase continuously.The rapid development of emerging intelligent hardware products has also boosted the demand for related precision components such as precision opt

257、ics and modules,precision acoustic components,MEMS sensors and micro system modules,haptic components and precision structural parts,which creates new business opportunities for the precision components of the Company.Goertek Inc.Annual Report 2021 42 From the perspective of competition among brand

258、companies,the global technology and consumer electronics industry may continue to demonstrate a centralized trend.In the post-mobile era,massive investment in technological innovation and R&D is required for the development of smart hardware products,for which the soft power of the ecosystem,such as

259、 developer base,user base,software applications,entertainment content,community loyalty and data monetization,becomes more and more crucial.The leading enterprises with capital,talent,technology and ecosystem advantages are expected to strengthen their competitive advantages,so as to lead technology

260、 and product innovation in the industry.From the perspective of supply chain,the middle-end of supply chain is expected to remain relying on developing countries.The electronic manufacturers in China are strengthening their overall competitiveness,and continue to expand their business in other count

261、ries.China manufacturers are expected to meet the needs of smart hardware production in the post-mobile era and gain the new opportunities of development.At the same time,we also need to pay attention to the development and changes of international political and economic situation.The changes in sci

262、ence,technology,trade and other policies between countries,as well as major international events and their development,may also have significant impact to the competition and supply chain of global industry.Therefore,we need to pay continuous attention and respond positively.2.Strategy for future de

263、velopment Looking into the future,the Company will actively respond to the strategy of actualizing innovation-driven development and accelerating the development of modern industrial system,and grasp the opportunities of transformation from the mobile era to the post-mobile era by closely following

264、the development of 5G,AI,IoT,cloud computing and other advanced technologies.The Company will continue to strengthen its development in the field of advanced precision components and next generation smart hardware products,constantly consolidate the strategical cooperation with world-class customers

265、,and earnestly fulfill the economic and social responsibilities of the enterprises,thus achieving a long-term,stable and healthy growth of the business,and maximize the enterprise value and the return to shareholders.(1)Actively grasp the new opportunities in the post-mobile era,and further promote

266、the Companys strategy of precision components+smart hardware.Further develop the businesses of precision components,such as acoustics,optics,microelectronics and structural parts,and the businesses of smart hardware devices,such as VR/AR,smart wireless earphones,smart wearable and smart home devices

267、.Continue to strengthen the advantages of precision components business in smartphone and other traditional hardware,and actively develop precision components and system hardware business related to new generation of smart hardware products.Utilize the synergy between the Companys component and hard

268、ware device business,continue to strengthen the core competence in precision manufacturing and intelligent manufacturing,and provide customers with the first-class vertically integrated product solutions and one-stop R&D and manufacturing services.(2)Continue the key-account strategy,remain customer

269、 orientation,and utilize the Companys advantages in customer resource.Goertek Inc.Annual Report 2021 43 Focus on serving leading customers in the global technology and consumer electronics industry,and continue to consolidate long-term strategic cooperation with customers.Closely follow the strategi

270、cal planning and development of world-class customers,and to create a global system of R&D,manufacturing and sales services accordingly.Continue to satisfy our customers with our business,technology,engineering,operation and delivery services,in order to achieve win-win cooperation and to grow with

271、the world-class customers.(3)Adhere to technological innovation and continue to invest in R&D.Constantly improve the Companys technical competitiveness in acoustics,optics,microelectronics,precision manufacturing,automation,IT technology,software algorithm and so on,and actively expand the layout in

272、 emerging technologies such as micro system modules,optical waveguide,nano-imprinting,haptics and etc.,to build the core technical competitiveness of the enterprise.Firmly implement the talent strategy by integrating the outstanding talents in management and technology fields around the world,build

273、and effectively motivate a first-class talent team,thus to provide sufficient talents for future development of the Company.(4)Constantly improve corporate governance and management,and promote the standardized and efficient internal operation.Continuously improve the internal structure,processes an

274、d internal management system.Strengthen the awareness of lean operation,improve the level of lean operation and seek benefits from it.Being market-oriented and customer-oriented,continues to push forward internal reform and innovation,and to build core competitiveness upon continuous reform and inno

275、vation activities.Create an excellent corporate culture,undertake the core values of customer orientation,personnel growth,integrity and pragmatism,win-win cooperation,and earnestly fulfill the economic and social responsibilities of the enterprise,to become a respected world-class enterprise.3.Busi

276、ness operation during the reporting period and business plan for next year In 2021,the Company grasped the business opportunities of the new generation of smart hardware such as VR,TWS,smart wearable devices,gaming consoles and accessories,implement the precision components+smart hardware strategy a

277、nd utilized the synergy between the components business and system device business.The Company adhered to customer-orientation philosophy and focused on key business accounts,provided customers with high-quality R&D and manufacturing“one-stop”service,and achieved customer satisfaction.The Company al

278、so explored new business opportunities in precision optical components and modules,micro-system modules,MEMS sensors,haptic components,etc.From internal operation perspective,the Company continuously improved the level of lean operation,and obtained solid progresses in input/output efficiency,operat

279、ion cycle,inventory turnover,and capital cost.The Company continued to invest in R&D and technological innovation,increased the quantity of both patent applications and patent approvals,strengthened the capabilities of R&D and talent team,and thus further consolidated the core competitiveness in tec

280、hnology field.The Company also formulated and implemented effective systems and measures to ensure stable operation of business activities and control the risks.With all the measures above,the Company has finally achieved an excellent Goertek Inc.Annual Report 2021 44 business performance in 2021.Lo

281、oking into the year of 2022,the Company still faces many challenges due to the ongoing global epidemic,the slow recovery of global economy,the high and fluctuated commodity prices,and other complexities and uncertainties that may applied to the external environment.On the bright side,there are also

282、new opportunities in global technology and consumer electronics industry.With the further integration and development of advanced technologies such as 5G,AI and the new generation of smart hardware products,the Company faces new opportunities in both precision components and smart hardware business.

283、The management and all staff of the Company will continue to implement our strategy and to achieve business objectives,so as to return the shareholders and investors with excellent business performance and continuous growth of enterprise value.(1)Maintain strategic focus and grasp development opport

284、unities.The Company will seize the business opportunities of smart hardware products in the post-mobile era by adhering to the precision components+smart hardware strategy and utilize the synergy between the components and system device business.With core technological capabilities and advanced prec

285、ision component solutions,the Company will further enhance the effort in business development of smart hardware products.And through that business development,the Company will create more applications and demand for the precision components.By integrating the core capabilities in precision manufactu

286、ring and intelligent manufacturing,the Company will be able to provide first-class one-stop R&D and manufacturing services to global customers.(2)Adhere to the customer-orientation philosophy and key-accounts strategy,and identify and serve strategic customers.Follow the strategy and business plan o

287、f core customers,the Company will carry out corresponding business,products and capacity plans,work with the customer in their frameworks and schedules and provide industry-leading R&D and manufacturing services.The Company will continuously build excellent customer service team to satisfy our custo

288、mers in long term in all aspects of business,technology,engineering,operation,and delivery,to enhance customer loyalty and achieve win-win cooperation with customers.(3)Empower business expansion and create new opportunities.Based on the consolidation of the existing business advantages in precision

289、 components and smart hardware products,the Company will further explore new directions and opportunities.By grasping the opportunities in micro-system modules,MEMS sensors,precision optical components and modules,haptic components,precision structured parts,VR,smart home products and other products

290、,the Company will secure the key projects of core customers,and also follow up with new directions and opportunities in automotive electronics,advanced materials,micro-display technology and other fields with future potentials.(4)Improve lean operation and complete successful delivery of key project

291、s.The Company will continue to promote the awareness and improve the level of lean operation,and to support the business objectives with high-quality and efficient operation.The Company will make thorough planning of its resources,ensure the delivery of key projects that closely related to the strat

292、egy and the business objectives,and to achieve the goals of the Company.Goertek Inc.Annual Report 2021 45(5)Continue to invest in R&D and technological innovation,strengthen core competitiveness with talent strategy.The Company will continue to invest in R&D and technological innovations centered on

293、 future strategic directions,and strengthen the technical capabilities in the fields of acoustics,optics,microelectronics,precision manufacturing,and intelligent manufacturing.The Company will embrace the management and technical talents globally,keep bringing in high-level talents,carry out solid e

294、fforts in the selection,cultivation,motivation and retention of talents,and to support the Companys strategic implementation and business development with high-quality talent echelon.(6)Effectively control risks and maintain healthy operation.The Company will continue to maintain a sound business st

295、rategy,strengthen risk awareness,pay close attention to changes in the external environment,perform effective control on risk indicators in production operation of the Company,take the initiative to identify and resolve potential risks,and ensure sustainable development of production and operation a

296、ctivities.4.The demand and planning of fund The Company maintains a healthy asset and liability structure,and obtained a good long-term cooperative relationship with banks and other major financial institutions.In 2021,the Company successfully completed the conversion and delisting of the previously

297、 issued convertible bonds,and successfully completed the signing of long-term loan agreements between its subsidiary companies and International Finance Corporation,which further improved the Companys balance sheet structure and cost of funds.The Company will continue to improve the management of ca

298、sh,asset-liability ratio and debt structure,to actively avoid liquidity risks and foreign exchange risks,to control financial derivatives trading activities with strict standards,and thus providing stable and sufficient financial support to the development of the Company.5.Future risks(1)Macroeconom

299、ic risks COVID-19 pandemic has not yet stopped globally,and the global economy is still in recovery.Unfavorable factors that affecting investment and consumption still exist,which may hinder global technology and consumer electronics industry from rapid development in the short term.The world politi

300、cal and economic situation remains complex and grim.Trade disputes between major countries and geopolitical events have brought uncertainties to global economy,which may adversely affect the business of enterprises.The slow growth of some smart hardware products such as smartphones,may affect the ma

301、rket demand of precision components,which may bring negative impact to the Companys performance.(2)Operational risks Risks of concentrated customer structure The competitive pattern of global technology and consumer electronics industry,along with the Companys business model and key account strategy

302、,determined a relatively concentrated customer structure.As a result,the business income from a few core Goertek Inc.Annual Report 2021 46 customers accounts for a large proportion of the Companys overall revenue.Although the above customers are global industry leaders who have significant competiti

303、ve advantages and market position,and have maintained long-term and stable cooperative relations with the Company,under some special circumstances,they may bring fluctuations and risks to the Companys business if their business activities fluctuate.Risks of exchange rate fluctuation The export busin

304、ess accounts for a high proportion of the Companys overall revenue.At the same time,the Company also imports a considerable number of raw materials,equipment and other products from overseas.These import and export businesses are primarily settled in US dollars.Although the Company has adopted appro

305、priate risk hedging tools,the significant fluctuation of RMB/US dollar exchange rate may still bring certain exchange rate risks to the Company.Risks of the leaving of core technical talents The technology and consumer electronics industry is a talent intensive industry.Therefore,the demand for core

306、 technical talents is strong,and the competition for talents is very fierce.Core technical talents are the key resources for the Company to continuously improve its core competitiveness and realize long-term development.For this reason,the Company will continue to improve various incentive and restr

307、aint mechanisms in order to retain core technical talents.But due to the fierce competition,loss of core technical talents may still occur,which may put the Company at a disadvantage in the competition and affect the business development in some cases.(3)Risks of management In recent years,the Compa

308、ny has successfully expanded its business in each product line.The business scale has been expanded significantly,as well as the variety of products and the size of the staff has grown rapidly.The growing business brings higher requirements to the Company in overall operation and management ability.

309、The Company implements the strategic plan of developing core customer business and exploring new opportunities,which also requires the Companys management to maintain excellent abilities of judgment,execution and management.If the Companys management fails to match the business growth,or fails to be

310、 improved to meet the needs of the Companys development,it may affect the execution of strategic planning and the delivery of business objectives,thus bringing management risks to the Company.Reception,research,communication,interview and other activities during the reporting period Applicable Not a

311、pplicable Reception time Reception place Reception mode Type of reception object Reception object Main content of discussion and information Index of basic information of survey Goertek Inc.Annual Report 2021 47 provided March 30,2021 The Company Other Institution Investors participating in the Comp

312、anys performance presentation meeting of 2020 The Companys operation and business development Refer to the record of investor relations activities on March 30,2021 published on April 22,2021 The Company Communication over phone Institution E Fund,Bosera Fund,Dacheng Fund,Hua An Fund and other funds

313、The Companys operation and business development Refer to the record of investor relations activities on April 22,2021 published on July 22,2021 The Company Communication over phone Institution SOOCHOW Fund,CR Yuanta Fund,BOC Fund,YINHUA Fund and other funds The Companys operation and business develo

314、pment Refer to the record of investor relations activities on July 22,2021 published on August 27,2021 The Company Communication over phone Institution Fullgoal Fund,Xingquan Fund,99 Fund,CCB Fund and other funds The Companys operation and business development Refer to the record of investor relatio

315、ns activities on August 27,2021 published on October 27,2021 The Company Communication over phone Institution E Fund,Hua An Fund,GF Securities,Harvest Fund and other funds The Companys operation and business development C,record of investor relations activities on October 27,2021 published on Goerte

316、k Inc.Annual Report 2021 48 Section IV Corporate Governance.Corporate Governance in Practice During the reporting period,the Company continuously improved the corporate governance structure,the internal management and control system,and continued to carry out corporate governance activities in stric

317、t accordance with the requirements of relevant laws,regulations and normative documents such as Company Law,Securities Law,Corporate Governance of Listed Companies,Rules Governing the Listing of Shares on Shenzhen Stock Exchange as well as with relevant documents of China Securities Regulatory Commi

318、ssion and the relevant instructions of Shandong Securities Regulatory Bureau,so as to further standardize the Companys operation and improve the level of corporate governance.By the end of the reporting period,the actual practice of corporate governance met the relevant requirements of the above law

319、s,administrative regulations,departmental rules and normative documents on the governance of listed companies,and no documents concerning administrative supervision measures taken by the supervised departments was received.By the end of the reporting period,the details of actual practice of corporat

320、e governance are as follows:1.Shareholders and shareholders meetings:The Company has convened and held shareholders meetings in strict accordance with the Rules for General Meeting of Shareholders of Listed Companies and the Companys Rules of Procedure of Shareholders Meetings,so as to ensure that a

321、ll shareholders,especially minority shareholders,enjoy equal status and fully exercise their rights;In addition,lawyers were engaged to witness the legitimacy of the convening,holding and voting procedures of each general meeting of shareholders.2.The Company and controlling shareholders:The Company

322、,with independent business and operation autonomy,is independent of the controlling shareholders in business,personnel,assets,organisations and finance.The Board of Directors,Board of Supervisors and internal institutions of the Company operate independently.The controlling shareholders exercise the

323、ir rights through shareholders meeting,and there was no direct or indirect interference with the Companys operations and decision-making beyond the general meeting of shareholders.3.Directors and the Board of Directors:The Company elects directors in strict accordance with the selection and appointm

324、ent procedures stipulated in the Articles of Association.There are three independent directors in the Board,the number of directors and the composition of the Board of Directors meet the requirements of laws and regulations and the Articles of Association.All directors can carry out their work in ac

325、cordance with Rules of Procedure of the Board of Directors and Working System for Independent Directors,they attended all the Board of Directors meetings,and all the related trainings as required.Goertek Inc.Annual Report 2021 49 4.Supervisors and the Board of Supervisors:The election of supervisors

326、 and the composition of the Board of Supervisors were in strict accordance with relevant provisions of Company Law and Articles of Association.The Companys supervisors strictly followed the Rules of Procedure of the Board of Supervisors,All supervisors scrupulously attended the sessions,seriously fu

327、lfilled their duties diligently,and supervised and issued opinions for major issues,related-party transactions,and financial status.5.Performance appraisals and incentives:The Company has gradually improving its fair and transparent performance evaluation standards and incentive a restraint mechanis

328、ms for directors,supervisors and senior management.The appointment of Companys senior management is open and transparent,and in line with the provisions of laws and regulations.6.Stakeholders:The Company fully respects and safeguards the legitimate rights and interests of stakeholders,actively commu

329、nicates and coordinates with stakeholders,to r balance the interests of the society,shareholders,the Company,employees and other parties,and jointly promotes the Companys development in a sustainable and steady manner.7.Information disclosure and transparency:The Company duly performed the disclosur

330、e obligations in accordance with the provisions of Rules Governing the Listing of Shares on Shenzhen Stock Exchange,Articles of Association and Investor Relations Management Rules,and discloses information as per the law,so as to ensure that the information disclosure is true,timely,accurate and com

331、plete.All shareholders were given equal access to the information.The Company has gradually revised and improved the Insider Information Management Rules,further improved the insider information management,strengthened the confidentiality of insider information,maintained the fair principle of infor

332、mation disclosure and protected the legitimate rights and interests of investors.The Company has appointed the secretary of the Board of Directors as the head of investor relations management of the Company,responsible for the Companys information disclosure and investor relations management.The Com

333、pany has designated Securities Times,China Securities Journal,Shanghai Securities News,Securities Daily and to disclose Companys information in a faithful,accurate and timely manner,strictly in accordance with relevant laws and regulations,so that all shareholders have a fair chance to get information.Whether there is any significant difference between actual situation of corporate governance and