Gree Electric Appliances, Inc. of Zhuhai
2023 Annual Report
April 2024
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Section I Important Notice, Contents and ParaphraseThe Board of Directors, Board of Supervisors, directors, supervisors andsenior executives of the Company hereby guarantee that the contents areauthentic, accurate and complete, without false records, misleadingrepresentations or material omissions in the Annual Report, and shall takeall the joint and several legal liabilities.Dong Mingzhu, the Company's responsible person, Liao Jianxiong,responsible person in charge of accounting work and Liu Yanzi, theAccounting Department's responsible person (accounting superintendent)hereby declare and warrant that the financial report in the Annual Reportis authentic, accurate and complete.All the directors have attended the meeting of the Board of Directors inrespect of deliberation of the Annual Report.The forward-looking statements such as future plans and developmentstrategies in the Annual Report do not constitute a substantive commitmentof the Company to investors. Investors and relevant persons shouldtherefore make rational investments based on an awareness of risk factorsattendant on investment and understand the differences between plans,forecasts and commitments.The Company's profit distribution proposal passed upon deliberation at themeeting of the Board of Directors is set out as below: Based on the totalshare capital of 5,521,943,646 shares enjoying profit distribution rights at
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the time of disclosure of this profit distribution plan (the total stock capitalof 5,631,405,741 shares excluding the 109,462,095 shares held in therepurchase account of the Company), the Company plans to distribute allshareholders a cash dividend of RMB23.8 (tax included) per 10 shares, butdoes not plan to give any bonus share (0 share, tax included) or convert anycapital reserves into share capital.
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Contents
Section I Important Notice, Contents and Paraphrase ...... 2
Section II Company Profile and Main Financial Indicators ...... 7
Section III Management Discussion and Analysis ...... 12
Section IV Corporate Governance ...... 56
Section V Environmental and Social Responsibility ...... 79
Section VI Important Matters ...... 91
Section VII. Changes in Shares and Shareholders ............................................................ 137
Section VIII Preferred Share Related Information ...... 149
Section IX Bond Related Information ...... 150
Section X Financial Statements ...... 151
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References(I) The accounting statements signed and sealed by Dong Mingzhu, the legal representative, Liao Jianxiong, chief accountantand Liu Yanzi, head of accounting department.(II) The original audit report sealed by Union Power Certified Public Accountants (Special General Partnership) withsignatures and seals of certified public accountants Wu Zihao and Qiu Yiwu.(III) Originals and original drafts of all the Company's documents and announcements published on the media and CNINFOdesignated by the Company within the report period.
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Paraphrase
| Items | Means | Contents |
| Company, the Company, the Enterprise, Gree Electric Appliances or Gree | Means | Gree Electric Appliances, Inc. of Zhuhai |
| Zhuhai Mingjun | Means | Zhuhai Mingjun Investment Partnership (Limited Partnership) |
| GREE GROUP | Means | Zhuhai Gree Group Co., Ltd. |
| Finance Company | Means | Zhuhai Gree Group Finance Company Limited |
| Jinghai Internet | Means | Jinghai Internet Technology Development Co., Ltd. |
| DunAn Environment | Means | Zhejiang DunAn Artificial Environment Co., Ltd. |
| Gree Altairnano | Means | Gree Altairnano New Energy Inc. |
| CSRC | Means | China Securities Regulatory Commission |
| Report Period | Means | January 1, 2023 to December 31, 2023 |
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Section II Company Profile and Main Financial Indicators
I. Company information
| Stock Abbreviation | Gree Electric Appliances | Stock Code | 000651 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Name in Chinese | Gree Electric Appliances, Inc. of Zhuhai | ||
| Name Abbreviation in Chinese | Gree Electric Appliances | ||
| Name in Foreign Language (if any) | Gree Electric Appliances, Inc. of Zhuhai | ||
| Name Abbreviation in Foreign Language (if any) | Gree | ||
| Legal Representative of the Company | Dong Mingzhu | ||
| Registered Address | Room 608, No. 108 Huitong Third Road, Hengqin New Area, Zhuhai | ||
| Post Code of Registered Address | 519031 | ||
| Historical Changes to the Company's Registered Address | On August 26, 2021, it was changed from Jinji West Road, Qianshan, Zhuhai City, Guangdong Province to its current registered address | ||
| Office Address | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province | ||
| Post Code of Office Address | 519070 | ||
| Website | http://www.gree.com.cn | ||
| gree0651@cn.gree.com | |||
II. Contacts and contact information
| Secretary of the Board of Directors | Securities Affairs Representative | |
| Name | Deng Xiaobo | Wu Qingqing |
| Address | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province | Jinji West Road, Qianshan, Zhuhai City, Guangdong Province |
| Tel. | 0756-8669232 | 0756-8669232 |
| Fax | 0756-8614998 | 0756-8614998 |
| gree0651@cn.gree.com | gree0651@cn.gree.com |
III. Information disclosure and place of the report
| Website of the stock exchange to which the Company's Annual Report is disclosed | Shenzhen Stock Exchange (http://www.szse.cn) |
| Media to which the Company's Annual Report is disclosed and its website | China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| Place where the Company's Annual Report is available for inspection | Investment Management Department of the Company |
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IV. Alteration of registration
| Unified Social Credit Code | 91440400192548256N |
| Changes (if any) in the main business since the listing of the Company | No change |
| Changes (if any) in the controlling shareholders | On December 2, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement. Gree Group planned to transfer 902,359,632 shares of the Company with unlimited sales conditions held by Gree Group to Zhuhai Mingjun at a price of RMB46.17/share; On December 13, 2019, the Zhuhai Municipal People's Government and the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of Zhuhai City separately approved the share transfer. Gree Group obtained the Transfer Registration Confirmation issued by China Securities Depository and Clearing Corporation Limited (CSDC) Shenzhen Branch on February 3, 2020. The share transfer registration procedures for the transfer of this agreement have been completed, and the transfer date is January 23, 2020. After the completion of the share transfer registration, the Company has neither a controlling shareholder nor an actual controller. |
V. Other related information
Accounting firm engaged by the Company
| Name of the accounting firm | Union Power Certified Public Accountants (Special General Partnership) |
| Office address of the accounting firm | F/17?18, Yangtze River Industry Building, No. 166 Zhongbei Road, Wuhan, Hubei Province |
| Names of undersigned accountants | Wu Zihao and Qiu Yiwu |
Sponsor engaged by the Company to perform continuous supervision during the report period
□ Applicable ?Not Applicable
Financial adviser engaged by the Company to perform continuous supervision during the report period
□ Applicable ?Not Applicable
VI. Main accounting data and financial indicatorsWhether the Company has retroactive adjustment or restatement of previous accounting data
□ Yes ?No
| Item | 2023 | 2022 | Increase/Decrease Over the Previous Year | 2021 |
| Operating revenue (yuan) | 203,979,266,387.09 | 188,988,382,706.68 | 7.93% | 187,868,874,892.71 |
| Net profits attributable to shareholders of the listed Company (yuan) | 29,017,387,604.18 | 24,506,623,782.46 | 18.41% | 23,063,732,372.62 |
| Net profits attributable to shareholders of the listed Company less non-recurring profits | 27,565,461,117.79 | 23,986,248,264.15 | 14.92% | 21,850,050,895.31 |
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| and losses (yuan) | ||||
| Net cash flows from operating activities (yuan) | 56,398,426,354.17 | 28,668,435,921.27 | 96.73% | 1,894,363,258.72 |
| Basic earnings per share (yuan/share) | 5.22 | 4.43 | 17.83% | 4.04 |
| Diluted earnings per share (yuan/share) | 5.22 | 4.43 | 17.83% | 4.04 |
| Weighted average return on equity | 26.53% | 24.19% | 2.34% | 21.34% |
| Item | At the End of 2023 | At the End of 2022 | Increase/Decrease Over the End of Previous Year | At the End of 2021 |
| Total assets (yuan) | 368,053,902,576.37 | 355,024,758,878.82 | 3.67% | 319,598,183,780.38 |
| Net assets attributable to shareholders of the listed Company (yuan) | 116,793,716,103.39 | 96,758,734,892.25 | 20.71% | 103,651,654,599.87 |
The net profits of the Company before and after deducting non-recurring profits and losses in the last three fiscal years,whichever is lower, is negative, and the audit report of the last year shows that the Company's ability to continue as a goingconcern is uncertain
□ Yes ?No
The net profits before and after deducting non-recurring profits and losses, whichever is lower, is negative
□ Yes ?No
VII. Accounting data differences under domestic and foreign accounting standards
1. Differences in net profits and net assets in the financial report disclosed under the internationalaccounting standards and that disclosed under the domestic accounting standards
□ Applicable ?Not Applicable
There was no difference in net profits and net assets in the financial report disclosed under the international accountingstandards and that disclosed under the domestic accounting standards during the report period.
2. Differences in net profits and net assets in the financial report disclosed under the overseasaccounting standards and that disclosed under the domestic accounting standards
□ Applicable ?Not Applicable
There was no difference in net profits and net assets in the financial report disclosed under the overseas accounting standardsand that disclosed under the domestic accounting standards during the report period.
VIII. Quarter-based main financial indicators
Unit: yuan (RMB)
| Item | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
| Operating revenue | 35,455,753,354.18 | 63,780,987,835.32 | 55,770,570,627.81 | 48,971,954,569.78 |
| Net profits attributable to shareholders of listed company | 4,109,253,018.34 | 8,563,985,798.21 | 7,418,868,262.12 | 8,925,280,525.51 |
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| Net profits attributable to shareholders of listed companies after deduction of non-recurring profits and losses | 3,723,297,678.38 | 8,341,838,057.39 | 7,149,378,505.29 | 8,350,946,876.73 |
| Net cash flows from operating activities | 15,065,152,965.60 | 15,794,538,969.00 | 8,736,479,777.58 | 16,802,254,641.99 |
Whether major differences exist between the above financial indicators or their sum and those in the disclosed quarterlyreport and semi-annual report
□ Yes ?No
IX. Non-recurring profit and loss items and amounts?Applicable □ Not applicable
Unit: yuan (RMB)
| Item | Amount in 2023 | Amount in 2022 | Amount in 2021 | Description |
| Profits and losses from disposal of non-current assets (including the write-off of accrued asset impairment reserves) | 324,413,866.77 | -51,428,778.52 | -7,498,891.48 | For details, please refer to this Note V. 67, 68 and 69 in Section X Financial Statements. |
| Governmental subsidies included in the current profits and losses (excluding the governmental subsidies closely relating to the normal business operations of the Company, conforming to national policies and regulations, enjoyed according to established standards, and having a sustained impact on the Company's profits and losses) | 784,275,516.36 | 873,695,831.91 | 875,778,734.20 | For details, please refer to this Note V. 62 and 68 in Section X Financial Statements. |
| Profits and losses from changes in fair value arising from financial assets and financial liabilities held by non-financial enterprises, and profits and losses from disposal of financial assets and financial liabilities, except for the effective hedging business related to the Company's normal business operations | 553,697,207.25 | -300,034,685.05 | 369,460,356.97 | |
| Fund possession costs collected from the non-financial institution and included in the current profits and losses | 6,234,097.19 | |||
| Reversal of impairment reserves for the receivables under the independent impairment test | 72,395,388.85 | 118,276,955.90 | 16,844,984.00 | |
| Non-operating revenues and expenditures other than the above items | -21,226,697.92 | -25,299,493.59 | 58,510,843.19 | For details, please refer to Note V. 68 and 69 in Section X Financial Statements. |
| Other profit and loss items conforming to the definition of non-recurring profits and losses | 40,553,390.36 | -30,904,028.44 | 13,691,263.12 | |
| Less: Amount affecting income tax | 301,917,937.60 | 64,515,784.15 | 82,923,289.84 |
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| Amount affecting minority equity (after tax) | 264,247.68 | -585,500.25 | 36,416,620.04 | |
| Total | 1,451,926,486.39 | 520,375,518.31 | 1,213,681,477.31 | -- |
Details of other profit and loss items conforming to the definition of non-recurring profits and losses:
?Applicable □ Not applicable
Unit: yuan (RMB)
| Item | Amount in current report period | Reason |
| Other profit and loss items conforming to the definition of non-recurring profits and losses | 40,553,390.36 | Commissions refund of individual income tax and others |
Description of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profit andloss items
□ Applicable ?Not Applicable
No non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public - Non-recurring Profits and Losses were defined by the Company asrecurring profit and loss items.
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Section III Management Discussion and Analysis
I. Industry situation of the Company during the report period(I) Overview of industry development
1. Consumption field - stable growth in the household appliance industry and significant recovery in the airconditioning marketIn 2023, China's economy maintained an overall recovery trend, while stimulating consumption was of utmost importance instabilizing growth. The state encouraged and promoted the exchange of old for new consumer goods. This action brought thegreater circulation of the consumer economy, accelerated the emergence of replacement demand, increased the sales andexport of high-efficiency products, and further exploited the potential for green consumption.
1) Stable growth in the household appliance industry
In 2023, the domestic economy has significantly recovered, and the household appliance industry has maintained stablegrowth. According to the Annual Report of China's Household Appliance Industry in 2023 released by the NationalHousehold Appliance Industry Information Center (NAIC), the export sales of the household appliance industry havesignificantly increased, with an export scale of RMB617.4 billion, a year-on-year increase of 9.9%; the domestic market hasachieved stable growth, with a sales scale of RMB773.6 billion, a year-on-year increase of 1.7%.
2) Significant recovery in the air conditioning market
In 2023, the air conditioning market has significantly recovered. According to the total retail data released by All View Cloud(AVC), in 2023, the air conditioning market achieved a retail volume of RMB211.7 billion, a year-on-year increase of 7.5%,and a retail quantity of 60.85 million units, a year-on-year increase of 6.5%. According to the data released by ChinaIOL.com,in 2023, the production of residential air conditioners was 168.692 million units, a year-on-year increase of 11.1%, and thesales were 170.44 million units, a year-on-year increase of 11.2%, including the domestic sales of 99.597 million units, ayear-on-year increase of 13.8%, and the export sales of 70.843 million units, a year-on-year increase of 7.8%, achievinggrowth in both domestic and foreign sales.
2. Industrial field - stable and upward trend in the industrial economy
According to the data released by the Ministry of Industry and Information Technology (MIIT), in 2023, the industrial addedvalue above designated size in China increased by 4.6% year-on-year, an increase of 1 percentage point year-on-year andamong them, the industrial added value above designated size in the manufacturing industry increased by 5.0% year-on-year.The scale of the intelligent manufacturing industry is growing. From Made in China 2025 to Development Plan on SmartManufacturing During the "14th Five-Year Plan", relevant policies all take the development of advanced intelligentmanufacturing industry as the core goal to overall arrange and plan the promotion of manufacturing power. China hasinitially formed an intelligent manufacturing industry system represented by automated production lines, intelligent detectionand assembly equipment, intelligent control systems, industrial robots, etc., and the scale of the industry is growing. TheZhongshang Industry Research Institute forecasted that the market scale of intelligent manufacturing equipment in China canexceed RMB2.97 trillion in 2023. The Forward Industry Research Institute forecasts that by 2027, the market scale of China'sintelligent manufacturing industry will reach RMB6.6 trillion, of which the market scale of intelligent manufacturingequipment is about RMB5.4 trillion and that of intelligent manufacturing system solutions is about RMB1.2 trillion. In 2023,China accelerated the technological transformation and upgrading of traditional industries, strengthened the promotion ofintelligent manufacturing, established 62 "lighthouse factories", accounting for 40% of the Global Lighthouse Network, andcultivated 421 national-level intelligent manufacturing demonstration factories, as well as more than 10,000 provincial-leveldigital workshops and intelligent factories.
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The industrial scale of air conditioning core parts and components increases significantly. According to the data released byChinaIOL.com, in 2023, the air conditioning rotor compressor market developed at a high speed; the annual output reached261 million units, with a year-on-year increase of 12.2%, and the annual sales reached 262 million units, becoming the newpeak of the industry. In the domestic market, the performance of rotor compressor is outstanding, and it has maintained apositive growth throughout the year. The domestic sales were expected to be 227 million units, with a year-on-year increaseof 14.3%; In the export market, the annual export was expected to be 35.647 million units, with a year-on-year increase of
2.1%. Benefiting from the growth in the sales scale of the downstream air conditioning market in 2023, both the productionscale and the sales scale of the air conditioning motor industry increased, reaching 422 million units, with a year-on-yearincrease of 6.8%; the domestic market output about 350 million units, with a year-on-year increase of 8.4%; and the exportmarket output about 70 million units, flat year-on-year. The growth of the compressor industry and the motor industry hasprovided strong support for the development of the entire air conditioning industry.The new energy industry contributes to sustainable development. Following the path specified by China's carbon peaking andcarbon neutrality (dual carbon) phased goals, the proportion of non-fossil energy production and consumption will increaserapidly in the future. The Annual Development Report of China's Electrification in 2022 stated that the consumptionproportion of electric energy in end-use energy is expected to exceed 30% in 2025. Under the background of low-carbontransformation and development, promoting the electrification of energy systems and low-carbon power systems, andbuilding safe and efficient new power systems and energy storage systems centering new energy will give continuous supportfor achieving the goal of green, low-carbon, and sustainable development.II. Major businesses of the Company during the report periodGree Electric Appliances, Inc. of Zhuhai is a diversified and technological global industrial group and has three majorconsumer brands of Gree, TOSOT and KINGHOME, and industrial brands of LANDA, Kaibang, and Xinyuan, etc. Itsindustry covers two major areas of household consumer goods and industrial equipment. In the consumption field, it coversresidential air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmentalappliances, smart buildings, and smart household appliances; In the industrial field, it covers high-end equipment, precisionmolds, freezers and refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision castingequipment, basic materials, industrial energy storage, renewable resources, etc. So far, Gree products have served more than600 million consumers in more than 190 countries and regions around the world, and continue to meet people's needs for abetter life.According to the data released by AVC, the online retail share of Gree residential air conditioners in 2023 was 28.15%,ranking first; among them, the online and offline retail shares of Gree floor-standing air conditioner were 30.28% and
34.43%, respectively, ranking first in the industry. According to the 2023 Report on the Development of China's Central AirConditioning Industry released in the ihos's HVAC and Heat Pump, Gree achieved the first sales scale among mainstreambrands in the central air conditioning industry with a market scale of more than RMB20 billion in 2023, and ranked first inthe central air conditioning market for 12 consecutive years. There are obvious advantages in the market competition forhigh-end products such as floor-standing air conditioners and central air conditioners.In 2023, the Company focused on consumer demands and continued to create multiple series of electrical products, graduallyforming a brand image of "Gree, Making Better Electric Appliances". According to the data released by AVC, the onlineretail market share of electric fans in 2023 was 18.07%, ranking second in the industry; the online retail market share ofelectric heaters is 13.10%, also ranking second in the industry.
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III. Core competence analysis
Gree Electric Appliances, revolving around carrying forward industrial spirit, mastering core technologies, pursuing perfectquality, and providing first-class services, has been making innovations in technology to attain high-quality development,provide a better life for the people, create value for society, promote the progress of society, and achieve the corporate visionof Gree's century-old brand.(I) Take a century-old brand as the vision and aim to create a first-class enterpriseThe Company firmly follows the path of brand self-development, and has established a great valuable brand with leadingcore technologies, excellent product quality, and a complete service system. Adhering to keeping up with the times andconstantly absorbing new concepts, Gree has embarked on a new era and journey of "Jointly Creating A Better Life forHumanity", from "Gree, Making Better Air Conditioners", "Gree, the Master of Core Technologies" to "Made in China,Loved by the World".On the Chinese Brand Value Evaluation List, the Company has consistently ranked first in the household appliance industryfor many years, and the brand value has been gradually increasing. In 2023, with the outstanding comprehensive strength, theCompany was again listed in "Forbes Top 2000 Global Enterprises", "Forbes Top 2000 Global Best Employers" in 2023, andon "China's Top 500 Private Enterprises in 2023", and won the honor of "Pacesetter of Brand Value in 2023" and the honorof the first "2023 China-chic Innovation Model Pioneer Brand" of China Media Group (CMG). In the "2023 China BrandValue Evaluation Information", the Company ranked first in the light industry group's household appliance industry with abrand value of RMB162.883 billion. In addition, the Company won honors such as "China's World Famous Brand", "TheMost Competitive Brand in the Market", "National Quality Award", "Export Exemption Enterprise", "China BrandInnovation Award", "China's Top 100 Light Industry Technology Enterprises", "China's Top 500 Enterprises in Credit", and"2023 Excellent Green Development Cases". It has topped the air conditioning customer satisfaction list for 12 consecutiveyears. The Company builds and establishes its brand based on perfect quality and internationally leading technology,continuously creating value for society.(II) Stick to the path of independent innovation and lead the development of the industryTaking technology as the core driving force for development and adhering to the principles of "independent research anddevelopment of core technologies" and "investment as needed without an upper limit", the Company has built a multi-leveland high-level research and development platform based on national scientific research platforms, forming a technologyinnovation system that is "enterprise-oriented, market-oriented, and combined industry, academia, and research", in such away as to conquer key bottleneck technologies one by one and lead the industry development.The Company has the world's largest air conditioning R&D center. It has established 16 research institutes, 152 researchinstitutions, 1,411 laboratories, 1 academician workstation, as well as 1 national key laboratory, 1 national engineeringtechnology research center, 1 State-level Industrial Design Center, and 1 State Recognized Enterprise Technology Center. Inaddition, it has also become a research and evaluation base for refrigeration equipment of the National Notification EnquiryCenter. As of the end of 2023, the Company has received a total of 114 important awards at the national, provincial, andindustrial levels, and has possessed 40 "world-leading" technologies; has applied for 119,261 patents, including 64,174invention patents; has obtained 20,416 invention patent grants, making it the only household appliance enterprise to enter thetop ten in China's invention patent grants for eight consecutive years; has won 77 Chinese patent awards, including 3 goldawards for invention and 3 gold awards for appearance; and has got 14 gold awards of International Exhibition of Inventionsof Geneva and 10 gold awards of iENA. At the same time, the Company is one of the first batch of national enterpriseintellectual property demonstration unit, "National Patent Operation Pilot Enterprise", and won the China Trademark GoldAward. The Company's steady increase in the number and quality of patents fully demonstrates Gree Electric Appliances'sinvention and creation capabilities and international leading research and development strength to the world.(III) Pursue perfect quality and support Made in China
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One of the Company's mission is to pursue perfect quality. To this end, adhering to the three major quality control principlesof "never take consumer as an experiment", "everyone is a quality inspector", and "perfect quality is achieved throughfighting", the Company has successively proposed and established the "T9 Total Quality Control Model", the "D-CTFPQuality Technology Innovation Cycle Methodology", and Gree's 'Perfect Quality' management model of "Made in China,Loved by the World". The Company adheres to integrity management, takes national and international standards as thethreshold, with meeting consumer needs as the highest standard, perseveres in "Made in China, Loved by the World", andcontributes to China's grand goal of becoming a manufacturing and quality powerhouse.The Company actively leads or participates in the development of international standards and makes good use of its advancedcore technologies and standards to help improve the industry quality. It has led and participated in the development of 836international and national standards, including 58 international and foreign standards, and has led the development of 8 ISOand IEC international standards; and has undertaken and participated in 140 standardization organizations related to thehousehold appliance industry at home and abroad, including 37 international and foreign standardization organizations. In2018, Gree's 'Perfect Quality' management model of "Made in China, Loved by the World" won the third China QualityAward, which is the highest award in the field of quality in China. In 2023, Gree Electric Appliances and the School ofBusiness Administration of South China University of Technology jointly wrote Pursuing Perfection - Innovation &Progress: Gree Quality Model, which was selected for the "Best Quality Practices in China in the 21st Century" seriespublished by Standards Press of ChinaIn 2023, according to the evaluation data from the Customer Satisfaction Evaluation Center of China National Institute ofStandardization, Gree's air conditioning products have maintained the industry's top customer satisfaction for 12 consecutiveyears. The Company always relies on reputation to build its brand, occupy the market, and gain development advantages. Itsproducts have been exported to more than 190 countries and regions worldwide, with over 600 million users witnessing theleading technology and excellent quality of "Gree Manufacturing".(IV) Integrate online and offline business formats and create a channel ecological layoutThe Company keeps establishing self-control and win-win sales channels and sales models, and implements a transformationof "new retail" marketing model integrating online and offline channels. Based on 30 regions, over 30,000 offline outlets, andofficial flagship stores of third-party e-commerce platforms, the Company established a dual-line sales network covering thewhole country. The Company is closely following the trend of smart retail and actively creating offline scene marketingmodels to provide an experiential and immersive shopping environment. It also applies Internet engineering technology tosales channels. Through the construction of digital information system, it connects all links of procurement, logistics, sales,and service to realize the digital upgrading of terminal stores and the reform of retail channel flattening and integrates onlineand offline channels to improve the overall efficiency of channels and the user service level.(V) Accelerate the optimization of industrial chain layout and cultivate new quality productivity with thecraftsmanship spiritThe Company has developed into a diversified and technology-based global industrial manufacturing group, coveringhousehold consumer goods and industrial equipment. Through the means of acquisition, self-research, etc., it has laid outcore components, production and manufacturing, green recycling and other sectors in the industrial chain, forming a circularindustry and enhancing the Company's core competitiveness and sustainable development capability.In terms of core industrial components, the Company has strong R&D and manufacturing capabilities, laying a solidfoundation for the Company's high-quality development. The Company has completed the layout of core components in theconsumption and industrial fields, such as compressors, motors, molds, controllers, chips, enameled wires, capacitors,intelligent equipment, CNC machine tools, robots, and cold chains. Through the acquisition of DunAn, Gree Altairnano, etc.,the Company has further integrated the fields of refrigeration accessories, new energy vehicle thermal management, energystorage, and battery manufacturing equipment, achieving independent and controllable core components in the consumptionand industrial sectors.
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In terms of production layout, the Company has established 77 production bases at home and abroad, located in Guangdong,Chongqing, Anhui, Hebei, Henan, Hubei, Hunan, Jiangsu, Zhejiang, Tianjin, Sichuan, Jiangxi, Shandong, and Brazil. Amongthem, the Company has 14 air conditioning production bases in China, including Zhuhai, Chongqing, Hefei, Zhengzhou,Wuhan, Shijiazhuang, Wuhu, Changsha, Hangzhou, Nanjing, Luoyang, Ganzhou, Linyi, and Zhuhai Gaolan Port. It also has5 major household appliance production bases, respectively in Zhongshan, Shijiazhuang, Suqian, Chengdu, and Changsha.Therefore, the production layout gains a highly coordinated development of industrial agglomeration and upstream anddownstream industrial chains, ensures the independent manufacturing of the Company's products and core components,optimizes efficiency, and further stabilizes the competitiveness of the Company's products. The Gree intelligentmanufacturing factory built by the Company in Gaolan Port, Zhuhai, integrates the industrial advantages of intelligentequipment, industrial Internet, and digital technology and realizes self-sensing, self-learning, self-decision-making, self-executing, and self-adapting intelligent whole-process manufacturing, creating a new intelligent manufacturing factory andempowering new quality productivity with production innovation.In terms of downstream recycling, since 2010, the Company has successively established six renewable resource bases inChangsha, Zhengzhou, Shijiazhuang, Wuhu, Tianjin, and Zhuhai. These bases are mainly engaged in the recycling andtreatment of waste electrical and electronic products, scrapped cars, as well as the deep processing and resource recovery ofwaste circuit boards and waste plastics. This action indicates that the entire industry chain from production to downstreamrecycling is covered, achieving green, circular, and sustainable development, and has now reached industry leadership. Now,it has the qualification capacity of dismantling 13 million units of used household appliances, 75,000 vehicles, 180,000 tonsof recycled plastic processing capacity, and 60,000 tons of waste circuit board processing qualification capacity.(VI) Carry out independent talent cultivation and drive innovative developmentAs a technology-driven enterprise, the Company has always regarded talent cultivation as an important strategic resource forenterprise development and adhering to the concept of "no upper limit on R&D costs", provides employees with a R&Dplatform to accumulate strength for technological innovation. The Company has established a set of "selection, training,employment, retention" talent training system. Through the construction of a learning organization, continuous learning forgrassroots backbone management and other systems, it promotes the inheritance of management experience, sharing of R&Dtechnology, and improvement of skills and literacy; organizes and carries out "vanguards" and college students talent trainingprojects targeting key groups, providing comprehensive and multi-level training support for grassroots management and freshcollege students; and relying on the construction project of national-level high-skilled talent training base, it cultivates high-skilled professional talents for itself and further enhances its core competitiveness.As of the end of 2023, the Company has 50,000 R&D personnel and technical workers; and the Group has 14,000 newlyassessed skilled talents, of which, 1 has won the title of "National Technical Expert", 8 have won the title of "GuangdongProvincial Technical Expert", 2 has won the title of "Nanyue Technical Expert", and 5 have won the title of "ZhuhaiMunicipal Technical Expert". There are also 4 "Zhuhai Municipal Post Technical Expert Pacesetters", 16 "Zhuhai MunicipalChief Technical Experts", 11 "Zhuhai Special Artisans", and 306 "Zhuhai Artisans". The Company has obvious advantages intalent cultivation, talent welfare system construction, etc. and has been nominated for "Forbes Global Best Employers" for 9consecutive years.The Company will continue to strengthen the construction of talent team, share the dividends from the enterprise'sdevelopment through multiple channels such as the employee stock ownership plan, talent subsidies, talent housing, policy-based care for public college degree, and dual-day off work system, and continuously improve employee satisfaction andhappiness. In addition, Gree will strengthen cooperation with universities and research institutions, jointly cultivate more top-notch innovative talents, and provide strong support for the innovative development of the enterprise.
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IV. Analysis of main business
1. Overview
Insisting on the business philosophy of "Made in China, Loved by the World", relying on the efforts, courage, and continuousinnovation of Gree people worldwide, the Company has created the best performance since its establishment 33 years ago. In2023, the total operating revenue of the Company exceeded RMB205.18 billion, a year-on-year increase of 7.82%, and thenet profit attributable to the parent company exceeded RMB29.017 billion, a year-on-year increase of 18.41%.(I) Adhere to independent innovation and activate new quality productivity
1. Drive innovation through technology and become an industry benchmark
Gree adheres to the concept of "Made in China, Loved by the World", continuously innovates in the field of technology,drives the value chain with the innovation chain, and supports the innovation chain with the value chain.During the report period, in response to the long-standing problem of underground heat injury in the coal industry, theCompany developed the "Key technologies and applications of new refrigeration packaged equipment for heat treatment indeep mine" project, which can generally reduce the temperature of coal mining face by more than 10°C and humidity bymore than 30%, improve the working environment of underground workers, and greatly increase the raw coal productionwhile ensuring safety. After appraisal by the China Machinery Industry Federation and Appraisal Committee, the overalltechnology has reached the international leading level; the "High-efficiency Heat Pump Technology Based on Floor HeatStorage" project developed by the Company plays a huge role in promoting the integration of China's dual carbon goals and"dual transformation" (digitalization promotes greenization), and the overall technology has reached the international leadinglevel; and the "Innovation and Application of a New Generation of Intelligent Environmental Control System for Ventilationand Air Conditioning Based on Direct Expansion Technology" project developed by the Company has reached theinternational leading level via expert appraisal. The Company's "High-efficiency Electrothermal Dual Drive BacteriaDisinfection Technology and Its Application in Air Purifier" project and "Key Technologies and Industrialization of High-efficiency and Low-noise Air Conditioner Motor" project both won the first prize of Science and Technology Award ofChina National Light Industry Council; the "Key Technologies and Application of Cloud Management for Multi-split AirConditioning Units" project based on application characteristics won the second prize of Science and Technology Award ofChina National Light Industry Council. The "Magnetic Bearing Refrigeration Compressor Key Technologies andIndustrialization" project won the first prize of the 2022 Guangdong Provincial Science and Technology Award for Scienceand Technology Progress, and the "Development of Large-scale High-efficiency Inverter Ice-storage and RefrigeratingCentrifugal Unit and Application in Integrated Intelligent Energy" project and the "Key Technologies and Application onHigh-efficiency Direct-cooling Air Conditioning Unit for Large Space" project, respectively, won the second prize of the2022 Guangdong Provincial Science and Technology Award for Science and Technology Progress.During the report period, the Company won 15 international design awards (9 German iF Industrie Forum Design Awardsand 6 German Red Dot Design Awards) and the AWE Innovation Award. As of the end of 2023, Gree Electric Applianceshas received a total of 114 important awards at the national, provincial, and industrial levels and has possessed 40 "World-leading" technologies, demonstrating Gree’s strong innovation ability.
2. Strengthen intellectual property protection and ensure independent innovation
The Company has established a scientific intellectual property reward mechanism and an annual high amount of scientificand technological progress reward fund to reward units and individuals who have achieved outstanding results inmanagement and technology innovation that year, greatly mobilizing the innovation enthusiasm of scientific researchers; theCompany also has developed a "full-process intellectual property management system" to achieve electronic management forthe entire life cycle of intellectual property from the source to the end.During the report period, three subsidiaries of the Company were rated as National Intellectual Property DemonstrationEnterprise, and three subsidiaries were rated as National Intellectual Property Advantage Enterprise. As of the end of 2023,
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Gree Electric Appliances's 7 companies have been selected as National Intellectual Property Demonstration Enterprise and 17companies as National Intellectual Property Advantage Enterprise. By 2023, the Company has applied for 10,297 patents,including 7,165 invention patents, and has obtained 3,640 invention patent grants. In addition, it has received 6 China PatentExcellence Awards and 2 provincial patent gold awards; it also has won 3 gold, 3 silver, and 2 bronze awards at theInternational Exhibition of Inventions of Geneva and Nuremberg, once again showing the power of Gree Creation to theworld.(II)Pursue perfect quality, lead standard construction, and provide high-quality services
1. Optimize the perfect quality management model and further promote the high-level development of enterprisequalityThe Company vigorously promotes quality management innovation, method innovation, and theory innovation, representedby the proposal of the forward quality-driven "Five Steps of Quality Prevention" and the reverse quality-driven "D-CTFPQuality Technology Innovation Cycle Methodology". With the T9 total quality control mode and PQAM perfect qualityassurance mode as the core architecture, the Company integrates classic management theory with rich enterprise practice andcreatively constructs Gree Perfect Quality Management Model for its goal of "Made in China, Loved by the World".During the report period, the Company continuously optimized the perfect quality management model, improved theshortcomings in quality management, and ensured the high-level development of enterprise quality. In order to meet theR&D and testing needs of diversified electrical products, the Company has established standard product laboratories for airconditioners, large commercial air conditioners, household appliances, refrigerators, washing machines, compressors, motors,industrial robots, etc., covering the performance, safety, noise, EMC, and chemical fields of air conditioners and refrigerationunits, and household appliances, so as to ensure product quality. In the First Selection of the Quality Control Pioneer ofElectronic and Electrical Laboratories by the China Inspection and Testing Society, the Company was selected as the"Quality Control Pioneer of Electronic and Electrical Laboratories" and became one of the first domestic enterprises toreceive this honor; the Company's "Innovative Research and Application of Residential Air Conditioner with Distributed AirSupply" and "Research and Practice on Intelligent Testing and Traceability of Safety Performance in the Whole Process ofDigital Air Conditioning Based on the Neural Network System" projects won the second prize of the 2023 China QualityAward; and the Company's "Research and Application of Environmental Adaptability Improvement Technology for AirConditioners" and "Research and Application of Quality Assurance Technology for Fully Domestic Air ConditioningElectronic Control Systems" projects won the Excellent Award of the 2023 China Quality Award.
2. Continue to promote standardization and foster international right of speech
The Company always upholds the core concept of meeting consumer needs, focuses on promoting the internationalizationprocess of independent innovation technology and standards, and is committed to continuously achieving new breakthroughsand competitive advantages in international standardization work.During the report period, Chairperson Dong Mingzhu of the Company was awarded the highest national standardizationaward - Outstanding Contribution Award of China Standard Innovation Contribution Award, making her the onlyentrepreneur to receive this award this time; the General Technology Requirements for Intelligent Household Appliances(GB/T 28219-2018), which was specially developed under the leadership of the Company, won the third prize of the ChinaStandards Innovation and Contribution Award; the Company was awarded the title of "Advanced Collective in NationalLight Industry Standardization Work from 2021 to 2022"; and the Company acts as a deputy leader-level domestictechnology counterpart targeting IEC/TC59/SC59N (International Electrotechnical Commission/Performance of Householdand Similar Electrical Appliances/Electrical Air Cleaners for Household and Similar Purposes), and it is the first householdappliance manufacturer among more than 200 IEC domestic technology counterparts. The Company has been selected as oneof the first batch of national standard verification points, becoming the only enterprise in the refrigeration industry to beselected. The research and evaluation base for technical trade measures of refrigeration equipment undertaken by theCompany has been rated as one of the five excellent evaluation bases in China.
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In 2023, Gree Electric Appliances's 11 enterprise standards were shortlisted for the 2023 Enterprise Standard Forerunner,which is an event guided by the National Development and Reform Commission and the State Administration for MarketRegulation while third-party evaluation agencies are responsible for selection, and the number of finalists was the first in thehome appliance industry. Since 2018, Gree Electric Appliances has been listed as the Enterprise Standard Forerunner for sixconsecutive years. In the past four years, it has led the industry in the number of enterprise standards and has obtained a totalof 88 Enterprise Standard Forerunner certificates, ranking first in the home appliance industry in terms of the number offinalists.
3. Provide high-quality services and boost quality upgrades
During the report period, the Company relied on the "old for new" business model, combined with its own sales and after-sales systems, to launch the integrated service model of "new machine assembly and old machine disassembly", furthermitigating the core pain points of reverse logistics recycling, warehousing consolidation, and other aspects, significantlyimproving the user replacement experience, promoting the upgrading of household appliance consumption, andimplementing the 5.4 million units recycling target required by the producer recycling responsibility system, so that moreconsumers can enjoy policy benefits of environmental protection, standardization, convenient recycling, and resource reuse.According to the evaluation data from the Customer Satisfaction Evaluation Center of China National Institute ofStandardization, since 2011, Gree's air conditioning products have maintained the industry's top customer satisfaction for 12consecutive years.(III) Innovate high-quality products and serve a better life
1. Air conditioner sector - focus on market demands and improve product matrices
1) Residential air conditioner - target customer demands and keep moving in product optimization In 2023, accordingto the report from ChinaIOL.com, the Company's domestic sales of residential air conditioner reached 29.79 million units, ayear-on-year increase of 4.05%. During the report period, the Company enhanced the fashion of products from theperspectives of design, colors, materials, etc. and continued to increase investment in the design of new products in newfields. A total of 8 new series products were launched to tailor for different consumer levels of residential air conditioners. Interms of split-type air conditioners, the Company launched a new split-type air conditioner, named Satin Time, whichincreases the air volume through a new air duct design, with a circulating air volume of up to 650 m?/h and an air supplydistance of up to 6 m; optimizes and upgrades the air guide structure, effectively achieving cold air uplift, that is, avoidingdirect blowing to people, and achieving separation of cold and hot air ducts. In terms of floor-standing air conditioners, theCompany continued to improve the product matrix of the new generation of up-and-down air outlet series and launched seriesproducts such as Satin Time and Gree·China Chic. In the process, by adopting a new efficient double-suction & two-waycentrifugal fan system design and three innovative technologies, the overall performance and air supply comfort of suchproducts were improved, and the cumulative sales of the new generation of top and bottom air discharge series throughout theyear exceeded 100,000 sets, a year-on-year increase of 116%.
2) HVAC - empower products with technology and maintain leading in the market
The Company's HVAC sector covers over a thousand categories of 13 major series, including centrifugal chiller, VRF, screwchiller, modular unit, packaged unit, condensing unit, and precision air conditioner, which, by continuously upgradingproduct technology, can meet the equipment demands of different working conditions, scenarios, and industries, and servemajor benchmarking projects. According to Aircon's 2023 China Central Air Conditioning Market Report, Gree's central airconditioner sector achieved the best market share for 12 consecutive years since 2012.
① Household central air conditioner - empower products with technology and create smart homesIn the household central air conditioner sector, Gree empowers products with technologies and to meet the diverse needs ofusers, creates smart and comfortable home systems. During the report period, the Company launched two major series,namely K+ series and K+ PRO series high-efficiency inverter duct-type air conditioning units targeting mid-to-high-endconsumer groups of the factory-installed market. The energy efficiency of the entire series far exceeds the national primaryenergy efficiency standard, ushering in the "primary energy efficiency era" of duct-type air conditioners. At the same time,the Company launched the optional accessories: 3D air vent and purification module (for particles and formaldehyde removal)
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for duct-type air conditioners, allowing customers to enjoy upgraded comfortable and healthy services. The newly launchedfresh air purifiers, such as Qinyuefeng and Jingyuefeng, effectively solve the problem of unsafe installation due to large-diameter through beam drilling and provide users with a clean, peaceful, and comfortable bedroom fresh air experience.
② Commercial VRF - rely on technological advantages and provide customers with more valuable productsDuring the report period, the Company launched a new generation of GMV S commercial central air conditioning units,providing users with strong cooling and heating effects, achieving targeted deep energy-saving and ultimate quiet experiencebased on commercial premises. In the units, Gree's latest generation enthalpy-adding VRF technology and upgraded GMVWater heat pump VRF are combined and the advantages of conventional water system and VRF system are integrated toreduce the installation space of the units, and the units can be installed on the equipment floor to enhance the aesthetic valueof the building; multiple renewable resources can be utilized in the units to further improve energy efficiency.During the report period, the Company continued to make efforts in project expansion in the commercial, real estate, and railtransit industries and reached strategic partnerships with multiple industry-leading enterprises. It continuously exportedcommercial VRF models and set benchmark sample engineering in many fields, further consolidating the leading position ofcommercial VRF in the industry.
③ Clean heating - construct full building heating and spur sustainable development
The Company is committed to developing advanced heat pump technology and equipment, based on six categories of low-temperature heat sources (air source, surface water, geothermal, data center, process industry, and power plant), and centeredon three types of key heat pump equipment (air source heat pump, ground source heat pump, high-capacity high-temperatureheat pump), to create full-scenario high-efficient thermal energy system solutions and serve four major application scenarios(domestic hot water, building heating, industrial and agricultural heat, and industrial steam). At present, the Company hasestablished a full building heating product system, equipped with a series of advanced heat pump technologies such asenhanced vapor injection vortex compressor, three-cylinder and dual-stage rotor compressor, permanent magnet inverter andvariable capacity screw compressor, double head series centrifugal compressor, air suspension/electromagnetic suspensionoil-free steam compressor, and has won the leading brand award in the heat pump industry for many years.During the report period, the Company launched the Huofenghuang Supreme household heating and cooling (integrated) unit,including single-heat and three-phase power special models, to meet the differentiated needs of the market. Besides, theCompany deepened the heat pump industry and launched commercial high-temperature heat pump water heaters and Jinquandirect heating pressure water heaters to meet the needs of industry, agriculture, and high-end comfort. Relying on theCompany's innovation advantages in energy conservation research, focusing on clean and green heat products in segmentedmarkets, a new full-scenario application pattern of heat pumps has been constructed, promoting the application anddevelopment of heat pump technology in more fields.
④ Precision air conditioner - create self-developed brands and meet market demands
The Company focuses on the "double carbon" strategy, helps the development and construction of green data centers, andcontributes to the construction of a clean, low-carbon, safe, and efficient energy system. During the report period, theCompany developed the air-cooled fluorine pump inverter intelligent double-cycle air conditioning unit for machine rooms,which can automatically switch over the compressor refrigeration mode, the mixed (compressor + fluorine pump)refrigeration mode, and the fluorine pump refrigeration mode according to the indoor and outdoor temperature difference indifferent seasons, so as to ensure the energy-saving and efficient operation of the unit under stable and reliable conditions,reduce the energy consumption of the whole unit, and save the operation cost; at the same time, a new and efficient coolingmethod is selected to ensure the computing capacity of the server, meet the requirements of low PUE construction in the datacenter, and ensure the operation of the server in the data center with extreme energy efficiency.
⑤ Freezing and refrigeration equipment - strengthen all cold chain products with technology and accelerate industrydevelopmentPromoting the high-quality development of cold chain logistics is an important foundation to support and help ruralrevitalization, is to improve the quality and safety systems of fresh agricultural products "from farmland to table, from the
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branches to the tongues", is to enhance the quality control ability for the whole process of pharmaceutical product logistics,and is an important guarantee to support the implementation of food safety strategy and build a healthy China.During the report period, the Company launched a new -86°C ultra-low temperature freezer, which can be used to storeviruses, bacterial samples, vaccines, and biological tissues and organs. The product features a fast cooling speed due to low-temperature enhanced heat transfer technology and combined with precise temperature control technology and multipleenhanced insulation technology, good temperature uniformity inside, so it can fully meet the requirements of low-temperature storage applications in scientific research, biomedicine, pharmaceutical enterprises, and other fields. In responseto the call of the national green development policy, the Company also launched a new low-temperature hot fluorinedefrosting refrigeration unit. It has a full range of cooling capacity of 3?12 HP and can meet the storage temperaturerequirements of -25°C?15°C. Moreover, It has the advantages of high energy efficiency, accurate temperature control,reliable operation, and others, leading the industry to build a low-carbon, green, and energy-saving cold storage system.
⑥ Large-scale water heater - delve into market demands and continuous technology innovation and become anindustry leaderDuring the report period, the Company launched the industrial large-capacity high-temperature centrifugal heat pump unit,characterized by outstanding energy conservation, reliability, and adaptability, and the hot water outlet temperature is as highas 120°C, filling the gap in the high-temperature heat pump market. The unit directly uses the heat pump unit to flash thelow-pressure steam of 100°C?120°C at the primary temperature rise or with the help of steam compressor, the high-pressuresteam of 120°C?160°C at the secondary enhanced temperature rise, which can meet the 80°C?150°C heat requirements innon-process industries such as food, medicine, and printing and dyeing and replace coal-fired and gas-fired boilers in non-process industries, with more obvious economic advantages.
2. Home appliance sector - make "better appliances" through technological innovationRevolving around the core development strategy from "Gree, Making Better Air Conditioners" to "Gree, Making BetterElectric Appliances", the Company persists in the orientation of health, intelligence, and personalization and implements asystematic layout, realizing full coverage of industries such as kitchen appliances, environmental appliances, refrigerators,and washing machines, and continues to build multiple series of intelligent household appliances focusing on consumerdemands.
1) Environmental appliance - dig deep into customer demands and upgrade product servicesDuring the report period, the Company developed an energy storage folding circulation fan, with a built-in 5,200 mAhbattery, which can last about 10 h. The air speed is up to 4.6 m/s, the noise is as low as 30 dB(A), and the fan has dual usageof placing on a desk and hanging, suitable for a variety of home and outdoor use scenarios. The Company also developed a3D floor scrubber that can reach and clean dirt at edges and corners. The scrubber can intelligently sense the degree ofcontamination and automatically adjust the suction or water output. In addition, it is equipped with heat-conduction air dryingtechnology for safe drying. According to the AVC data in 2023, the Company's online retail sales of electric fans have amarket share of 18.07%, ranking second in the industry.
2) Kitchen appliance - improve product technology and product quality
During the report period, the Company adhered to the core positioning of "simple cooking and healthy eating" and continuedto improve the functional effect of products through technological innovation to give customers a good cooking experience.For example, the steam oven developed by the Company applies the steaming and baking 2.0 technology, and it adopts themulti-dimensional heat field energy directional distribution scheme to realize simultaneous steaming and baking of threedishes and rice without accessories, improving users' convenience while ensuring good taste, nutrition, and no tainting offood materials. The new 16-liter gas water heater launched by the Company adopts a new high-efficiency coilless single-rowheat exchange technology, which improves the heat exchange efficiency by 10%, enhances the corrosion resistance, andstrengthens the reliability and durability, and it is unanimously recognized by customers.
3) Refrigerator - drive product and service upgrading with innovative technology
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The Company has overcome core technical problems in the preservation of fruits, vegetables, and meat in the householdrefrigerator industry, developed world-leading key technologies for the preservation of fruits, vegetables, and meat inhousehold refrigerators, and manufactured products that meet the high-quality storage requirements of food materials. Duringthe report period, the Company launched a series of second-generation all-around freshness preservation refrigerators. Theseries is equipped with a number of world-leading technologies such as fruit and vegetable preservation technology based onself-balancing high permeability film and air source gas phase humidity, natural convection supercooled meat preservationtechnology, and meat ultra-freezing storage technology of broadband fully sealed piston compressor. It has three corefunctions: soft-freezing 2.0, ultra-freezing and fresh-keeping, and photosynthetic moisturized fresh-keeping, as well ascharacteristic functions, for example, HCP full space sterilization and purification, dot matrix precise temperature control,closed moisture control zone, and four temperature control options. The series can further enhance the refrigerator useexperience through the design of closed exclusive space, visual sterilization display, easy-to-take bottle frame, three-stepdrawer, and other details.
4) Washer and dryer combo sector - inherit core technologies and lead the industry in terms of washing and dryingeffectsFor washer and dryer combo products, Gree has adhered to the direction of "leading heat pump washing and drying" and "AIintelligent washing". Guided by consumers’ demands, it has been committed to meeting targeted customer demands. Duringthe report period, after comprehensive research and upgrading on the washing, drying, and care of conventional clothes anddelicate clothing materials, the Company launched the second-generation heat pump washer dryer, achieving a significantimprovement in the washing, drying, and care performance and user experience. In terms of intelligent applications, it canrealize one-button automatic door opening without manual pushing and pulling, so as to improve user experience. After thewashing program ends, it can automatically open the door to keep the air circulation in the cylinder and prevent clothes frombeing stuffy and smelly. Equipped with the iCleaner2.0 all-round intelligent cleaning system, the self-cleaning of the dryingfilter and heat exchanger has been upgraded from passive washing to active washing + brushing, improving the cleanliness to100% and the drying efficiency of clothes, and eliminating secondary pollution of clothes. In terms of health, using anti-moldand antibacterial door seals, the antibacterial rate reaches 99%, effectively preventing door seals from getting moldy andbreeding bacteria, and maintaining a clean laundry environment. Equipped with a 60°C cylinder cleaning function, high-temperature water flow meticulously cleans the dirt and residue inside and outside the cylinder, offering a clean laundryenvironment. Fitted with a dual spray system, it can clean the glass door and door seal rings to avoid secondary pollutioncaused by foam or stain residue. Nano Ag+ ions slowly release when in contact with water and can achieve sterilization evenwhen washing at room temperature, with a sterilization rate of over 99.9%. Steam care is intended to remove bacteria mites,with a bacteria removal rate of over 99.99% and a mite removal rate of over 99%.(IV)Grasp the core links of industrial products and assist the Company in high-quality developmentGree Electric Appliances has strong research and manufacturing capabilities in the core components of household appliancesand intelligent equipment, laying solid groundwork for the Company's high-quality development.
1. Compressor sector - persist in continuous innovation and lead industry technology developmentThe Company has five major compressor production bases, including 16 series of products of C39/C44/C48/C49/C55/C63,etc., covering over 1,000 models of high-efficiency, energy-saving, and eco-friendly products such as fixed frequency, DCinverter, different power sources, different working substance, dual rotors, vortex type, with wide application scope coveringmultiple air conditioning fields such as a household, commercial, vehicle, freezing and refrigeration, dehumidification andheating. Its product technologies are at the forefront of the industry in fields such as two-stage enthalpy-adding compressorsand three-cylinder two-stage compressor of variable volume ratio.During the report period, in response to the working environment of base station air conditioning, the Company developed anew generation of high-efficiency compressors for base station air conditioning through innovative designs such as the low-power consumption motor, compact but efficient pump structure, and low-friction bearing system. Due to the increase of 5%in energy efficiency ratio, they act as core power for high-efficiency base station air conditioning, thus accelerating the
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Company's layout in the base station air conditioning field of the telecommunications industry. In the field of residentialfloor-standing air conditioner, the Company developed a new generation of ultra-efficient compressors through innovativedesigns such as wear-reducing materials and low-power consumption motors, with an energy efficiency ratio improvement of
5.3%, leading the industry's technological development.
2. Motor sector - deepen technological innovation and become a high-quality pioneer in the industryThe Company has launched motor products in 5 major categories, 24 series, and over 1,000 varieties and specifications, with2,286 motor-specific national patents. They are mainly used in household appliances, BEVs, intelligent equipment, high-efficiency industries, HVAC equipment, and other fields and have been widely applied and recognized by customers.During the report period, the Company further expanded its application of magnetic bearing technology to the field ofindustrial air compressors. The magnetic bearing high-speed motor system developed for 3-kilogram air compressors has arotational speed of up to 40,000 rpm, high levitation accuracy, and can achieve friction-free, efficient, high-speed, and oil-free operation. It is matched with the entire air compressor, and its performance exceeds the national primary energyefficiency level. This further consolidates Gree magnetic bearing leading position in the industry and helps achieve thenational "dual carbon" strategic goal.In the field of industrial motor, the Company developed a new permanent magnet-assisted reluctance motor featuring hightorque density, high efficiency, no rare earth, and a full range of 0.75 kW?315 kW. It reaches the industry's highest energyefficiency IE5 level. Through the magnetic circuit anti-saturation design, high saliency ratio rotor topology, and efficient heatdissipation technology, the torque density is increased by 20% compared to asynchronous motors of the same power. Thisprovides the industry with an efficient, low-carbon, and green product, frees the industrial motor industry from the constraintsof rare earth resources, ensures sustainable development of the industry, and plays a positive role in promoting carbonpeaking and carbon neutrality policies for the country.
3. Refrigeration accessories sector - strengthen supply chain control and improve industrial chain layoutIn recent years, the Company has increased its diversified layout, acquired DunAn Environment, optimized the supply chain,and improved its industrial chain layout. Focusing on the main business of refrigeration, DunAn Environment manufacturesseries of products aimed at the entire HVAC&R industry to fully support segmented fields such as residential air conditioners,commercial air conditioners, air source heat pumps, freezing and refrigeration, and new energy vehicle thermal management.It has a state-recognized enterprise technology center, a national postdoctoral workstation, an academician workstation, aCNAS laboratory, and a national full-performance testing center of central air conditioner. Therefore, it has formed a productdevelopment platform and core technology system with independent intellectual property rights. Relying on the R&Dplatform and following the orientation of "green, efficient, comfortable, and intelligent" technology development, DunAnEnvironment makes doubled efforts in research and development and pursues progress in key new products. In 2023, themarket share of DunAn Environment's cut-off valve ranked first in the world, that of the four-way valve ranked second in theworld, and that of the electronic expansion valve ranked second in the world.
4. Precision mold sector - vigorously develop precision machining and build a leading mold enterpriseGree Precision Mold is an important development pillar of the Company's industrial sector. Gree Precision Mold adheres to ahigh-standard quality control concept and closely revolves around the "4+1" business model, that is, household appliancemolds, automobile molds, precision molds, and motor molds + mold products, making it maintain a leading position. GreePrecision Mold has set up a supporting mold center in all production bases of the Company, 4 R&D platforms, 1 national-level skilled master studio, 3 municipal-level skilled master studio, 1 municipal-level skill workstation, 1 municipal-levelmodel worker innovation studio, and 12 technical manufacturing service centers, providing customers with reliable and cost-effective one-stop solutions.During the report period, Gree Precision Mold accomplished multiple technological breakthroughs. For example, a newenergy large-scale dual color mold technology was developed, replacing the traditional manual pasting of sealing rings, andthe production efficiency of flow energy storage battery stacks was improved by more than twice; the high-speed stamping
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technology for straight-bar iron cores at round riveting points increased the material utilization rate from 5% to 65%; andthrough the optimization technology of cutting process parameters, the cutting efficiency of precision machining parametersfor ball end cutters can be improved by 37% to 42% and that for round nose cutters can be improved by 23% to 28%.(V)Implement diversified and efficient operation of channels
1. Domestic sales channels: Promote digital upgrading of stores and steadily explore sinking channelsThe Company vigorously promotes the construction of digital stores and by introducing a series of digital devices such asintelligent shopping guide screens, cloud shelves, and electronic price tags, accelerates the upgrading of health, comfort, andconvenience of stores, allowing consumers to have a deep understanding of products.The Company seeks innovation while maintaining stability in its sinking sales channels and fully grasps platform resources,to jointly explore the market development of sinking channels. It also expands channels from the perspective of platform +brand, demonstrated by the favorable development of brand stores on JD and Tmall. During the report period, the salesperformance of household appliance through channels such as JD and Tmall increased year-on-year, entering a stage ofsteady development.
2. Overseas channels: Vigorously develop independent brands, deepen marketing transformation, and expandoverseas e-commerce layoutStrengthen the overseas social media matrix and create a diverse content ecosystem. During the report period, overseas socialmedia platforms had over 100 million online exposures and millions of user interactions, widely and deeply spreading Gree'sbrand philosophy. The Company actively participated in professional refrigeration exhibitions such as the Canton Fair, AHRExpo, MCE, and Refrigeration & HVAC Indonesia and received customers from 230 countries and regions around the world,maximizing product and brand exposure, and subtly highlighting Gree's product attributes and brand tone. In order toconsolidate overseas distributors' loyalty to the brand, the Company held the 4th Gree Global Strategic Partners Conferenceand Gree Global Dream Gala 2024, combined with creative expression and China chic of products, showcasing the corporateculture, company strategy, product layout, and comprehensive strength to global consumers, further elevating Gree'sindependent brand image.Strengthen the layout of mainstream overseas retail e-commerce platforms and expand the categories in overseas markets.The Company's home appliances such as circulating fans and humidifiers have been launched on mainstream retail e-commerce platforms such as Amazon, Walmart, SHOPEE, LAZADA, and Mercadolibre. With a high-quality and innovativeproduct image, Gree has quickly captured the minds of local consumers and received widespread praise.During the report period, the Company's products were sold to more than 190 countries and regions, and its overseas businessachieved a revenue of RMB24.904 billion, with independent brands accounting for nearly 70%, an increase of 8% year-on-year. We have won over 130 typical projects with a total cooling capacity of over 450,000 RT, including Angola LuandaNew Airport, Pakistan Gwadar New Airport, Ivory Coast Abidjan Stadium, Peruvian Agricultural University, Oman Ministryof Defense Office Building, Chinese University of Hong Kong, Pitts Street Hotel in Sydney, Australia, covering Africa,Brazil, the Middle East, Australia, Asia Pacific, and other overseas countries and regions. We have achieved success invarious fields such as airports, power plants, oil fields, rail transit, hotels, factories, office buildings, and special China-aidforeign projects, continuing to support Gree's international brand image.(VI)Persist in technology to achieve success and accelerate diversified developmentTaking technology as the core driving force for diversified development, the Company has overcome key bottlenecktechnologies one after one and made continuous efforts in diversified fields such as intelligent equipment, industrial products,home appliances, and new energy, providing growth momentum for performance.
1. Intelligent equipment - pursue continuous innovation and provide reliable intelligent manufacturing solutionsAt present, Gree Intelligent Equipment has established 15 R&D units, 7 technology service centers, and 3 provincial-levelscientific research platforms in Zhuhai, Guangdong Province, including 1 provincial-level enterprise technology center and 1provincial-level manufacturing innovation center. Its products involve four major sectors: industrial robots, CNC machine
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tools, intelligent logistics & warehousing, and factory automation, and are applied to multiple fields such as home appliances,new energy, automobiles, and 3C. In 2023, Gree Intelligent Equipment continued to optimize its product system architecture,and focusing on series products in four major sectors: CNC machine tools, industrial robots, intelligent logistics &warehousing, and factory automation, provided products for many leading enterprises in the industry at home and abroad,helping to upgrade automation.In the sector of CNC machine tools, revolving around the electrification and light weight of new energy vehicles, we havesuccessfully developed a series of fully closed-loop direct drive, high-speed three-axis vertical machining, four-axis verticalmachining, and five-axis gantry CNC machine tools to meet the requirements of PACK modules and components,automotive safety components, chassis integrated die-casting components, and other CNC machine tool equipment. We arecommitted to becoming a leader in high-speed machining system solutions for new energy vehicle components.In the sector of industrial robots, revolving around the new energy market, we have developed industrial robots such as GR35,GR50E, and GRS20 for the lithium-ion battery and photovoltaic fields, GR200 for automotive component die-casting, andGRX5 collaborative robots for matching liquid dispensing workstations, providing robot automation application solutions forthe manufacturing of new energy vehicle components, and assisting in the intelligent upgrading of production andmanufacturing models in the new energy vehicle industry.In the sector of intelligent logistics & warehousing, we have developed dual station control technology, multi-vehicle controlsystem, and modular control system for stacker cranes, and completed major project acceptance in the fields of electric power,automotive components, and education. In addition, the Company has completed the promotion of a high-rise and high-efficiency intelligent three-dimensional warehouse management and scheduling system for the automotive parts industry,achieving intelligent scheduling and management of logistics from production, temporary storage, to distribution, andproviding professional system solutions for automotive and its parts manufacturers.
2. Green energy - deepen technology innovation and build a better future
Under the "dual carbon" background, China's energy green transformation is accelerating, and a new type of electric powersystem and energy storage system with new energy as the focus, safe and efficient, is gradually becoming an importantmeasure to achieve the "dual carbon" strategy. In recent years, the Company has continued to make efforts in green energy,committed to key technology research and product development in the field of new energy, and coordinated the constructionof new energy industry layouts, providing assistance for the transformation and development of China's green economy.
1) Photovoltaic (storage) air conditioner - develop "zero carbon source" technology and usher in the green revolutionAfter ten years of technological research and development, the Company innovatively integrates photovoltaic energy and airconditioning products across borders. The world's first Gree "zero carbon source" air conditioning system won the highestaward at the 2021 Global Cooling Prize. According to the organizing committee's calculation, this technology can reduce airconditioning carbon emissions by 85.7%.During the report period, the "Key Technology Research and Product Development of Power Adjustable DCElectromechanical Equipment" project of the Company's technical team was included in the 14th National Key R&DProgram of China, fully demonstrating the Company's research and development strength in this field. As of the end of 2023,the technology related to the photovoltaic (storage) DC air conditioning system has won multiple domestic and internationalawards, including the first Chinese Patent Gold Award in the household appliance industry, the UK RAC AnnualAchievement Award, and the Geneva International Invention Gold Award; the Company's "zero carbon source" system hasbeen applied in more than 12,000 engineering scenarios in 35 countries and regions worldwide. The Company's PEDFtechnology has also been applied in key projects such as the 19th Asian Games Hangzhou 2022, Hainan Boao Forum forAsia, Dammam Medical University in Saudi Arabia, and Qatar Mosque, exerting significant influence both domestically andinternationally.
2) New energy - seize the future track and further improve industrial layout
As of the end of 2023, Gree Altairnano has won honors such as "China's Top 500 Private Enterprises in the ManufacturingIndustry", "National Quality Trustworthy Products", "Bus Safety Technology Achievement Award", the "Most Influential
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Enterprise Award in China's Energy Storage Industry", and "Green Factory", and has been selected as the "NationalIntellectual Property Advantage Enterprise" and "National Top 100 Quality Inspection Integrity Benchmark Enterprises".Gree Altairnano's 18-meter dolphin bus won the "China Patent Award - Gold Award for Appearance Design", becoming theonly product selected in the new energy vehicle industry. The key technology of Gree Altairnano's high-safety and large-rateenergy storage system has been identified by the China Machinery Industry Federation as reaching the "international leading"level, and has won the second prize of Guangdong Province Science and Technology Award and the first prize of GuangdongMechanical Engineering Society's Science and Technology Award. The "Lithium Titanate Power Efficient Energy StorageSystem" has been selected into the catalog of recommended energy-saving technologies and equipment in the field ofindustry and information technologies. Gree Altairnano has been selected as one of the top 500 global new energy enterprisesfor many years.During the report period, Gree Altairnano's invention patent won the gold medal at the iENA in Germany. As of the end of2023, Gree Altairnano has applied for a total of 3,571 patents, including 1,016 invention patents; a total of 2,640 patents havebeen granted, covering various fields such as lithium battery materials, electric vehicle powertrains, intelligent energy storage,etc., fully demonstrating Gree Altairnano's research and innovation capabilities in the field of new energy.
① New energy vehicle - explore new markets and adhere to diversified sales channels
Insisting on independent innovation, Gree Altairnano launched two series of products, namely commercial vehicles andspecial vehicles, according to the needs of different industries. In 2023, facing a fiercely competitive market environment,Gree Altairnano adhered to diversified sales channels and product routes, achieving breakthroughs in the domestic vehiclesales market of 10 meter and 18 meter buses and logistics vehicles. Gree Altairnano's new energy buses and classic newenergy buses have been delivered to places such as Yinchuan in Ningxia, Xining in Qinghai, and Linyi in Shandong, helpingto build demonstration zones for a green transportation powerhouse through the "public transportation + life" model.During the report period, with the trend of increasing the volume of overseas new energy buses and increasing efforts toexpand overseas markets, Gree Altairnano achieved breakthrough growth in overseas markets. Gree Altairnano, focusing onthe field of public transportation vehicles, has reached strategic cooperation with high-end customers in the Middle Eastmarket and has delivered in bulk; in response to the high heat and desert environment in the Middle East region, GreeAltairnano made technological adjustments to the vehicle adaptability and took an active part in local BEV tourist vehicleprojects to promote the electrification process of zero-emission public transportation in the Middle East region and jointlycreate a new green and low-carbon tourism experience.
② Lithium battery - expand product matrices and meet market demands
During the report period, Gree Altairnano achieved a breakthrough in the lithium titanate battery market. In the field of powergrid frequency modulation, Gree Altairnano achieved batch application and transformation of high-rate lithium titanatecontainer systems, and successfully undertaken the 33 million power plant project in Yuncheng, Shanxi. In terms of railtransit, Gree Altairnano and CRRC Times reached a cooperation agreement, and the high-power pure electric new energyshunting locomotive equipped with a high-voltage liquid-cooled lithium titanate power battery system has been successfullyput into use in Datong, Shanxi. Gree Altairnano has increased the development and promotion of independent LFP batteries,enriching the main battery product route of lithium titanate batteries and further expanding the product matrix. In the batterysector, Gree Altairnano achieved new business breakthroughs in markets in more than 20 countries, including Europe, theAmericas, Southeast Asia, Australia, and Russia, with the long-term customer demand increasing by 35% year-on-year;carried out relevant overseas bus standard certification work and simultaneously explored the European pure electric busmarket; it had a cumulative sales exceeding RMB100 million of two-or three-wheeled vehicles in India, with a stabilizingdemand.
3. Semiconductor - seek efficient products and continuous innovation and enhance market competitivenessThe Company has developed series products including MCU, AIoT SoC, and power semiconductors. The 32-bit series MCUchips have been widely used in terminal products such as residential air conditioners, commercial VRFs, wire controllers, andremote controls, with an annual usage of over 30 million pieces. They can be widely used in consumer electronics, wearabledevices, home products, health and medical equipment, commercial large-scale units, industrial sensors, high-performancemotor controls, and other fields; power semiconductors such as FRD, IGBT, IPM, and PIM have been applied in batches on
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inverter air conditioners, with an annual usage of over 20 million pieces, and can be widely used in fields such as householdappliances, intelligent equipment, and new energy. The developed AI chip combined with the key algorithm for theCompany's energy-saving air conditioners has been validated in mass production, which can achieve energy savings of over15% in air conditioners. The third-generation semiconductor power devices have been validated in mass production on theCompany's residential floor-standing air conditioners, which can effectively improve the energy-saving efficiency of airconditioners and reduce the overall cost of products.
4. Renewable resources - carry out social responsibilities with green renewable resource systemThe Company actively practices the producer responsibility extension system and innovatively proposes the circulardevelopment model of "green design - green manufacturing - green recycling" to ensure the green efficiency of the wholeindustrial chain. Starting from 2010, the Company has established six recycling bases that mainly engage in the recycling ofwaste electrical and electronic products and end-of-life vehicles, as well as the intensive processing of waste circuit boardsand waste plastics, in Changsha, Zhengzhou, Shijiazhuang, Wuhu, Tianjin, and Zhuhai.During the report period, the Company processed a total of 9.95 million sets of waste household appliances. As of the end of2023, a total of over 56.64 million units (sets) of various waste electrical and electronic products have been processed, andapproximately 719,000 tons of recycled copper, iron, aluminum, and plastic have been converted, which can reduce carbondioxide emissions by 876,100 tons and help achieve carbon peaking and carbon neutrality goals.
5. Healthcare - lay out new tracks and support the development of national healthcare industryAt present, breaking through the bottleneck technology in the medical field, optimizing intelligent solutions, and improvingthe level of medical technology in China have become the main theme of innovation and development in China's medicalfield. The Company has successively established a number of medical equipment companies, such as Zhuhai GE HEALTHMEDICAL Technology Co., Ltd. and Chengdu Gree Xinhui Medical Equipment Co., Ltd., and engaged in R&D andproduction of medical protective products, laboratory equipment, and mobile medical equipment. By building a platform forresearch and transformation of generic technologies, the Company satisfied the customized needs of products in differentapplication scenarios, drove the localization of equipment in biomedicine and life sciences, and supported the high-qualitydevelopment of China's healthcare industry through technological innovation.
6. Prefabricated food equipment - adhere to independent innovation and build industrial clusters of prefabricatedfood equipmentIn 2009, the Company laid out the freezing and refrigeration industry and independently developed eight categories of coldchain equipment, including pre-cooling, storage, and cooling categories. Based on years of deep research in the field offreezing and refrigeration, our products have expanded into over 100 models in 17 series, achieving low-temperaturepreservation at a minimum of -85°C and full cold chain coverage. Zhuhai Gree Prefabricated Vegetable EquipmentTechnology Development Co., Ltd., established by the Company, combines automated production equipment, intelligentlogistics equipment, and high-end freezing and refrigeration equipment to provide customized intelligent solutions ofprefabricated food featuring equipment automation, operation informatization, and factory intelligence for enterprises.During the report period, the Company launched a dedicated lychee preservation mobile equipment, which effectivelyreduced the dehydration rate of lychees, prevented microbial invasion, extended the preservation period, and achieved a goodfruit rate of 99.8% by increasing humidity, sterilization, temperature control, and other functions, enhancing the internationalcompetitiveness of Chinese lychees. The Company will connect the upstream and downstream industrial chains, promotevigorous development of the prefabricated food industry through technological innovation, drive the upgrading of traditionalagricultural industrialization, and accelerate rural economic revitalization.
7. Upgrade all categories of smart home appliances and create a beautiful living and home ecosystemThe Company adheres to independent innovation, independent research and development, and independent manufacturing,and builds zero-carbon healthy homes with core technology. The Company continuously upgrades the five smart livingsystems of energy, air, health, security, and lighting throughout the entire house; it develops personalized spatial intelligent
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solutions for different living spaces such as living rooms, bedrooms, and kitchens, to create a green, efficient, convenient, andsafe interconnected home space.During the report period, the Company deepened its layout in areas such as smart home systems, smart home networks, smartvoice interaction, smart scenario solutions, and smart product technologies. According to the "2023 Top 100 Global SmartHome Invention Patents Ranking" released by the intellectual property industry media IPRdaily, Gree ranked among the topfive globally with 3,011 patents.In terms of whole-house smart home, Gree Zero Carbon Health Home has settled in various parts of the country, and dozensof Gree Smart Comfortable Home stores have been established in Sichuan, Chongqing, Henan, Anhui, Guangxi, Jiangxi andother regions. Through six technologies, five systems, and spatial deployment, Gree has achieved intelligent emissionreduction, creating energy-saving, environmentally friendly, comfortable and healthy smart homes.In terms of centralized management platform, the Company developed a comprehensive solution for smart apartments inWuhan, Zhuhai, Luoyang, Jiangxi, Tianjin and other regions. Equipped with the Gree smart air conditioning centralizedmanagement system and smart door lock, it provides services such as online informatization for check-in and check-out,abnormal safety alarm for residents, remote control and management of apartment and dormitory appliances, reducesoperating costs and personnel investment, and improves the management level to give apartment residents higher quality oflife.In terms of smart home ecological interconnection, Gree Standard Cloud cooperated with well-known manufacturers at homeand abroad. By providing authorized services for cooperative manufacturers, Gree Standard Cloud provided convenientinquiry and control of Gree equipment for plenty of users, which improved the Company's influences and brand effect.(VII)Build a scientific talent cultivation system and promote the endogenous development momentum of theenterpriseThe Company has established a set of unique "selection, training, employment, retention" talent training system and acomprehensive salary and benefit system to cultivate the endogenous development momentum of the enterprise.
1. Build a learning organization and meet talent demands
During the report period, the Company actively advanced the establishment of a learning organization. Normalized company-wide open courses and routine learning sessions for grassroots management leaders were implemented to nurture universallyapplicable talents extensively. More than 100 public seminars were organized throughout the year, attracting close to 4,000participants, solidly promoting the inheritance of management expertise, sharing of R&D technologies, and enhancingprofessional competencies.The Company persisted in carrying out the "Foundation Consolidation Project" aimed at elevating job-specific skills.Through master-apprentice programs led by renowned mentors, assessment and certification processes, and skillcompetitions, a total of 79 batches of new staff orientation training and base support training were conducted, involving4,867 individuals. Additionally, 29 skill contests were held, engaging nearly 1,000 employees, and specialized training forover 1,400 personnel was organized. This approach realized standardized job training, routine professional development, andcompetitive skill enhancement, thereby reinforcing the Company's talent development. By leveraging platforms such asMaster Craftsmen Studios and Technician Workstations, a skill talent cultivation system was established, smoothing thedevelopment path for skilled professionals, and vigorously building a highly skilled workforce characterized by "rationalstructure, solid skills, ample numbers, and excellent quality", thereby enhancing the Company's industrial competitiveness.During this period, the Company was shortlisted for the "Engineering and Technology Talent Contribution Award,"becoming the first enterprise in the home appliance industry to receive this honor.
2. Improve the talent incentive policy and stimulate the inherent potential of employeesDuring the report period, the Company continued to promote the talent incentive policy and gave play to the exemplaryleading role of advanced employees. It set up scientific and technological progress award, management innovation award,rationalization proposal award, performance bonus, year-end bonus and diversified bonus system, and created honoraryselection activities such as advanced individuals, pioneer workers, gold medal employees, outstanding city employees, andskill pacesetters, etc., to encourage employees to innovate and give full play to their strengths.
3. Improve the employee welfare security system and create a happy and contented atmosphere within the Company.
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The Company consistently intensified its investment in the "Talent Sanctuary," encompassing multiple facets of lifeincluding clothing, food, housing, and transportation. In terms of transportation, the establishment of Zhuhai GreeTransportation Co., Ltd. provides employees with complimentary, comfortable shuttle bus services, effectively functioning asa secondary transportation network in Zhuhai. Regarding living conditions, the Company also invested hundreds of millionsof RMB to build Gree Kang Park and staff living areas to solve problems of staff housing, leisure and entertainment. Itestablished a perfect employee welfare security system and a "Sunshine Fund", which met the urgent needs of employees indifficulty. In terms of salary and benefits, a well-rounded employee welfare and benefits system was established, offering notonly substantial and diverse compensation packages, social insurance and housing fund contributions, meal allowances, high-temperature subsidies, housing allowances, and transportation allowances as fundamental benefits, but also incentive-basedrewards like the science and technology progress award, management innovation award, and rationalization proposal award.
4. Continue to implement the share incentive plan and share the dividends of enterprise developmentThe Company consistently launched and implemented the employee stock ownership plan to improve the benefit sharing andrisk-sharing mechanism between the Company and core employees, fully mobilize the enthusiasm and creativity ofemployees, improve the cohesion of employees and the competitiveness of the Company, and promote the long-term,sustainable, and healthy development of the Company.
2. Revenue and cost
(1) Composition of operating revenue
Unit: yuan (RMB)
| Item | 2023 | 2022 | Year-on-year Increase/Decrease | ||
| Amount | Proportion to Operating Revenue | Amount | Proportion to Operating Revenue | ||
| Total operating revenue | 203,979,266,387.09 | 100% | 188,988,382,706.68 | 100% | 7.93% |
| By industries | |||||
| Manufacturing industry | 174,565,470,852.38 | 85.58% | 153,165,839,566.10 | 81.05% | 13.97% |
| Other business | 29,413,795,534.71 | 14.42% | 35,822,543,140.58 | 18.95% | -17.89% |
| By products | |||||
| Air conditioner | 151,216,511,000.13 | 74.14% | 134,859,394,542.06 | 71.36% | 12.13% |
| Home appliance | 4,001,971,437.12 | 1.96% | 4,567,901,238.21 | 2.42% | -12.39% |
| Industrial product | 10,002,891,047.02 | 4.90% | 7,599,259,996.39 | 4.02% | 31.63% |
| Smart device | 669,842,288.11 | 0.33% | 432,085,871.36 | 0.23% | 55.03% |
| Green energy | 7,106,463,576.73 | 3.48% | 4,701,188,530.73 | 2.49% | 51.16% |
| Other main business | 1,567,791,503.27 | 0.77% | 1,006,009,387.35 | 0.53% | 55.84% |
| Other business | 29,413,795,534.71 | 14.42% | 35,822,543,140.58 | 18.95% | -17.89% |
| By regions | |||||
| Domestic sales ? main business | 149,661,934,832.94 | 73.37% | 129,895,113,805.01 | 68.74% | 15.22% |
| Export sales ? main business | 24,903,536,019.44 | 12.21% | 23,270,725,761.09 | 12.31% | 7.02% |
| Other business | 29,413,795,534.71 | 14.42% | 35,822,543,140.58 | 18.95% | -17.89% |
(2) Industries, products, regions, and sales models that account for more than 10% of the Company's operatingrevenue or operating profits?Applicable □ Not applicable
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Unit: yuan (RMB)
| Item | Operating revenue | Operating Cost | Gross Margin | Increase or Decrease in Operating Revenue over the Same Period of the Previous Year | Increase or Decrease in Operating Cost over the Same Period of the Previous Year | Increase or Decrease in Gross Margin over the Same Period of the Previous Year |
| By industries | ||||||
| Manufacturing industry | 174,565,470,852.38 | 113,508,550,549.59 | 34.98% | 13.97% | 7.52% | 3.91% |
| Other business | 29,413,795,534.71 | 28,116,999,197.36 | 4.41% | -17.89% | -17.81% | -0.09% |
| By products | ||||||
| Air conditioner | 151,216,511,000.13 | 95,207,973,716.18 | 37.04% | 12.13% | 4.49% | 4.60% |
| Other business | 29,413,795,534.71 | 28,116,999,197.36 | 4.41% | -17.89% | -17.81% | -0.09% |
| By regions | ||||||
| Domestic sales ? main business | 149,661,934,832.94 | 94,519,678,129.83 | 36.84% | 15.22% | 10.35% | 2.78% |
| Export sales ? main business | 24,903,536,019.44 | 18,988,872,419.76 | 23.75% | 7.02% | -4.69% | 9.36% |
| Other business | 29,413,795,534.71 | 28,116,999,197.36 | 4.41% | -17.89% | -17.81% | -0.09% |
In case the statistical caliber of the Company's main business data is adjusted during the report period, the Company's mainbusiness data will be adjusted according to the caliber at the end of the report period in the last year.
□ Applicable ?Not Applicable
(3) Whether the Company's revenue from physical sales is greater than that from labor services?Yes □NoDescription of a year-on-year change of 30% or more in relevant data
□ Applicable ?Not Applicable
(4) Performance of significant sales contracts and purchase contracts entered into by the Company as of the reportperiod
□ Applicable ?Not Applicable
(5) Composition of operating costs
Industry and product classification
Unit: yuan (RMB)
| Industry Classification | Item | 2023 | 2022 | Year-on-year Increase/Decrease | ||
| Amount | Proportion to Operating Cost | Amount | Proportion to Operating Cost | |||
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| Household appliance manufacturing | Raw materials | 93,909,272,081.72 | 87.94% | 89,062,003,824.55 | 88.01% | 5.44% |
| Labor costs | 4,839,203,936.92 | 4.53% | 4,487,688,687.68 | 4.43% | 7.83% | |
| Depreciation | 1,950,717,636.85 | 1.83% | 1,963,862,221.35 | 1.94% | -0.67% | |
| Energy | 1,060,398,535.08 | 0.99% | 923,522,729.23 | 0.91% | 14.82% |
(6) Whether there was a change in the combination scope during the report period
?Yes □No
1. Business combination not under common control
① Business combination not under common control in the current period
Unit: yuan (RMB)
| Name of the Acquiree | Time Point of Equity Acquisition | Equity Acquisition Cost | Equity Acquisition Proportion | Equity Acquisition Method | Acquisition Date |
| Ganzhou Qianjin Real Estate Co., Ltd. | 2023/10/31 | 239,485,900.00 | 90.00% | Purchase by cash | 2023/10/31 |
Unit: yuan (RMB)
| Name of the Acquiree | Basis for Determining the Acquisition Date | Operating Income of the Acquiree from the Acquisition Date to the End of the Period | Net Profit of the Acquiree from the Acquisition Date to the End of the Period | Cash Flow of the Acquiree from the Acquisition Date to the End of the Period |
| Ganzhou Qianjin Real Estate Co., Ltd. | Acquisition of control | -804,692.79 | 3,947,533.56 |
② Cost and goodwill of business combination
Unit: yuan (RMB)
| Cost of business combination | Amount |
| Total cost of business combination | 239,485,900.00 |
| Including: Cash | 239,485,900.00 |
| Less: Fair value of the identifiable net assets acquired | 239,485,903.54 |
| Combination cost less than the share of fair value of identifiable net asset acquired | -3.54 |
③ Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan (RMB)
| Item | Ganzhou Qianjin Real Estate Co., Ltd. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Assets: | ||
| Monetary funds | 143,501.61 | 143,501.61 |
| Other receivables | 19,819,308.24 | 19,819,308.24 |
| Inventory | 226,354,123.01 | 226,354,123.01 |
| Other current assets | 19,778,515.52 | 19,778,515.52 |
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| Subtotal of assets | 266,095,448.38 | 266,095,448.38 |
| Liabilities: | ||
| Subtotal of liabilities | ||
| Net Assets | 266,095,448.38 | 266,095,448.38 |
| Less: Minority shareholders' equity | 26,609,544.84 | 26,609,544.84 |
| Net assets acquired | 239,485,903.54 | 239,485,903.54 |
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④ Gains or losses arising from the remeasurement of equity held before the acquisition date at fair valueNone.
2. Business combination under the same control
None.
3. Reverse purchase
None.
4. Disposal of subsidiaries
| Name of Subsidiary | Time Point of Losing Control | Disposal Price of the Time Point of Losing Control | Disposal Ratio of the Time Point of Losing Control (%) | Disposal Methods of the Time Point of Losing Control | Basis for Determining the Time Point of Losing Control | The Difference Between the Disposal Price and the Share of the Subsidiaries' Net Assets at the Level of Consolidated Statements Corresponding to the Disposal Investment | Proportion of Remaining Equity on the Date of Losing Control (%) | Book Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Fair Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Gains or Losses Arising from Remeasurement of Remaining Equity at Fair Value | Determination Methods and Main Assumptions of the Fair Value of the Remaining Equity on the Date of Losing Control at the Consolidated Financial Statement Level | Amount of Other Comprehensive Income Related to Equity Investment of the Original Subsidiary Transferred into Investment Profits and Losses or Retained Earnings |
| Tianjin Gree Xinhui Medical Equipment Co., Ltd. | 2023-10-30 | 100.00 | Cancelled | Business registration | None | |||||||
| SL Group Jingu Grain Depot Co., Ltd. | 2023-8-25 | 100.00 | Cancelled | Business registration | None |
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| Name of Subsidiary | Time Point of Losing Control | Disposal Price of the Time Point of Losing Control | Disposal Ratio of the Time Point of Losing Control (%) | Disposal Methods of the Time Point of Losing Control | Basis for Determining the Time Point of Losing Control | The Difference Between the Disposal Price and the Share of the Subsidiaries' Net Assets at the Level of Consolidated Statements Corresponding to the Disposal Investment | Proportion of Remaining Equity on the Date of Losing Control (%) | Book Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Fair Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Gains or Losses Arising from Remeasurement of Remaining Equity at Fair Value | Determination Methods and Main Assumptions of the Fair Value of the Remaining Equity on the Date of Losing Control at the Consolidated Financial Statement Level | Amount of Other Comprehensive Income Related to Equity Investment of the Original Subsidiary Transferred into Investment Profits and Losses or Retained Earnings |
| SL Group Songlin Grain Depot Co., Ltd. | 2023-9-22 | 100.00 | Cancelled | Business registration | None | |||||||
| DunAn Sensing Technology Co., Ltd. | 2023-6-5 | 66.58 | Cancelled | Business registration | None | |||||||
| Jilin Songliang Modern Logistics Development Co., Ltd. | 2023-5-6 | 100.00 | Cancelled | Business registration | None |
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5. Change of combination scope for other reasons
Newly established entity in the current period:
Unit: yuan (RMB)
| Company Name | Date of Establishment | Net Assets at the End of the Period | Net Profit from the Combination Date to the End of the Period |
| Hunan DunAn Refrigeration Equipment Co., Ltd. | 2023-2-7 | 22,486,643.44 | 2,486,643.44 |
| Luoyang Herun Real Estate Co., Ltd. | 2023-9-28 | -51,151.68 | -51,151.68 |
| Gree Lintanyuan (Shanghai) Technology Co., Ltd. | 2023-10-20 |
(7) Significant changes or adjustments in the Company's business, products or services during the report period
□ Applicable ?Not Applicable
(8) Main sales customers and suppliers
Main sales customers of the Company
| Total sales amount of the top five customers (RMB) | 36,373,719,797.80 |
| Proportion of total sales amount of top five customers to the total annual sales | 17.74% |
| Proportion of sales amount of related parties in the sales amount of top five customers to the total annual sales | 5.15% |
Information of top five customers
| S/N | Customer Name | Sales Amount (RMB) | Proportion to Total Annual Sales |
| 1 | First | 11,643,121,629.28 | 5.68% |
| 2 | Second | 8,861,614,850.62 | 4.32% |
| 3 | Third | 5,885,129,357.41 | 2.87% |
| 4 | Fourth | 5,310,473,001.39 | 2.59% |
| 5 | Fifth | 4,673,380,959.10 | 2.28% |
| Total | -- | 36,373,719,797.80 | 17.74% |
Other descriptions of major customers
□ Applicable ?Not Applicable
Main suppliers of the Company
| Total purchase amount of the top five suppliers (RMB) | 37,070,471,527.30 |
| Proportion of total purchase amount of top five customers to the total annual purchases | 28.15% |
| Proportion of total purchase amount of related parties in the purchase amount of top five suppliers to the total annual purchases | 0.00% |
Information of top five suppliers
| S/N | Supplier Name | Purchase Amount (RMB) | Proportion to Total Annual Purchases |
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| 1 | First | 10,414,856,904.36 | 7.91% |
| 2 | Second | 7,917,687,520.80 | 6.01% |
| 3 | Third | 7,800,951,953.66 | 5.92% |
| 4 | Fourth | 7,464,163,661.22 | 5.67% |
| 5 | Fifth | 3,472,811,487.26 | 2.64% |
| Total | -- | 37,070,471,527.30 | 28.15% |
Other descriptions of major suppliers
□ Applicable ?Not Applicable
3. Expenses
Unit: yuan (RMB)
| Item | 2023 | 2022 | Year-on-year Increase/Decrease | Significant Changes Description |
| Sales expenses | 17,129,639,682.51 | 11,285,451,112.27 | 51.79% | Mainly affected by the increase in product installation and maintenance costs. |
| Administrative expenses | 6,542,161,037.82 | 5,267,999,733.62 | 24.19% | |
| Financial expenses | -3,526,521,851.75 | -2,206,764,591.65 | -59.81% | Mainly affected by the increase in financial expenses and interest income. |
| R&D expenses | 6,762,136,262.23 | 6,281,394,430.40 | 7.65% |
4. R&D investment
?Applicable □ Not applicable
| Name of Major R&D Projects | Project Purpose | Project Progress | Objectives to be Achieved | Expected Impact on the Future Development of the Company |
| Research on lean distributed air supply technology based on dual-suction fans | Promote the iterative upgrading of distributed air supply products through fan innovation, and improve product performance and exquisite appearance. | The project has been completed and successfully promoted and applied to the new products of Satin Time floor standing air conditioner and Gree Chinoiserie floor standing air conditioner. | Realize innovative upgrading of fans and promote quality improvement, with an APF of up to 4.50 for 3 HP models and up to 4.80 for 2 HP models. | Promote the deepening development of air conditioner ventilation modes towards healthier, more comfortable, and more efficient directions, while enhancing the production efficiency of distributed ventilation products, facilitating their popularization and promotion, and enriching the layout of product lines. |
| New high-speed compressor series split type unit (24K North American and EU product series) | Develop ultra-high-speed compression technology to solve the problem of synchronously improving air conditioner energy | The 24K North American model has been launched, while other models are still | Seasonal energy efficiency can increase by more than 10%, low-temperature heating capacity can increase by | As a leading technology in the industry, it can enhance the market competitiveness of products. |
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| efficiency and low-temperature heating capacity. | under review and testing. | more than 10%, SEER energy efficiency can reach 29, and low-temperature heating capacity does not decay at -15°C. | ||
| 120°C + industrial large-capacity, high-efficiency, and high-temperature centrifugal heat pump | Develop high-capacity, high-temperature, and high-efficiency centrifugal heat pumps above 120°C to replace non-process industrial boilers and assist in industrial carbon reduction. | Product series development is underway. | Break through the key technologies of high-temperature heat pump compressors, high-efficiency heat pump systems, and high-temperature enhanced heat exchange, achieving a single heat pump capacity of 10 MW and a heating temperature of over 120°C. | This technology has been identified as leading internationally. It is poised to conquer the pinnacle of large-capacity high-temperature heat pump technology, enabling foray into the market as a substitute for industrial boilers, thereby presenting a broad commercial outlook and yielding substantial societal benefits. |
| COP7.0 + two-stage permanent magnet variable frequency screw chiller | Develop a COP7.0 + two-stage permanent magnet variable frequency screw chiller to solve the problem of low energy efficiency of small and medium-sized cooling capacity chillers. | Product series development is underway. | Achieve a breakthrough of 7.0 in the energy efficiency level of small and medium-sized cooling capacity chillers, and comprehensively improve the energy efficiency and energy-saving level of screw refrigeration equipment. | This technology has been identified as an international leading level, improving the energy efficiency of small and medium-sized cooling capacity chillers, enhancing product competitiveness, and promoting industry technological innovation. |
| Development of R290 heat pump water heater | Actively promote the research and development of green and efficient equipment, respond to energy conservation and environmental protection policies in various global markets, and develop new refrigerant R290 heat pump water heaters. | The European version of the product has been launched. The Australian version is planned to be developed by July 2024; research is underway on the North American version of the product. | The refrigerant charge is as low as 152 g, representing an 82% reduction compared to R32; energy efficiency reaches up to 145%; maximum hot water output is increased by 64%, now at 546 L; and it is capable of producing hot water at a temperature as high as 70°C. | Improve the entire chain of R290 R&D, testing, production, warehousing, and transportation. Enhance product competitiveness and brand awareness by introducing new low-GWP refrigerant products into the market. |
| Development of zero consumables healthy drying floor scrubber | Research zero consumables and rolling brush healthy drying technology, and develop competitive products. | The product has been completed and launched. | Expand the company's cleaning appliances. Research on multiple separation technologies to achieve zero HEPA consumables; research on heat conduction drying to achieve safe and healthy drying. |
Form a unique wet mopcleaning technologyfeature to build thefoundation for the rapiddevelopment of thecleaning appliances inthe future.
| Research and application of ten year cleaning-free technology for the inner chamber of the | Solve the problems of oil accumulation in the inner chamber of the range hood, cleaning, weakened suction, and increased | The product has been completed and launched. | 1. Develop intelligent rotary oil capture technology to reduce oil fumes entering the fan and maintain stable and | This technology has been applied to the Star series range hoods, filling the technical gap of cleaning free in the industry and |
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| range hood | noise after prolonged use. | high suction. 2. Develop an oil-repellent wind wheel system that prevents oil stains from adhering easily, achieving a 10-year cleaning-free inner chamber without compromising performance. | improving the core competitiveness of range hood products. | |
| Research and application of key technologies for preserving fruits, vegetables, and meat in household refrigerators | Solve the problems of fruits and vegetables in the refrigerator industry that are prone to dehydration and spoilage, short-term preservation of meat that is prone to air drying and discoloration, and insufficient freezing temperature of aquatic products that cannot be stored with high quality. | The product has been completed and launched. | 1. The weight loss rate of spinach after 10 days of fruit and vegetable preservation is less than 7%; 2. The drying rate of short-term preservation of meat for 10 days is less than 5%; 3. Stable operation at -38°C in the refrigerator's freezer compartment can be achieved. | This technology has been identified as leading internationally, and it is of great significance for promoting the upgrading of core fresh-keeping technologies in refrigerators, enhancing the quality of food storage, and safeguarding people's dietary health. |
| Development of high energy efficiency household split photovoltaic (storage) air conditioner products in tropical climate | Develop household split photovoltaic (storage) air conditioner products. | The product is under limited-run trial production stage. | 1. Increase the seasonal energy efficiency ratio by more than 15% and obtain Saudi Arabia's A-level energy efficiency certification; 2. Internationally pioneer photovoltaic direct drive control technology, with a comprehensive energy utilization efficiency of over 99%. | In response to the climate characteristics of the Middle East, such as high temperatures and abundant sunlight throughout the year, relevant models have been developed to enhance product competitiveness. |
| Development of efficient rare earth free new permanent magnet assisted reluctance motor | Develop an efficient, miniaturized, and highly reliable series of industrial motors to solve the problems of low energy efficiency and limited rare earth resources in three-phase asynchronous motors in the industrial field. | The product has been completed and launched. | The energy efficiency of the motor can reach the IE5 energy efficiency standard in IEC60034-30-2 without using rare earth permanent magnet materials, meeting the needs of various mechanical equipment. | This can enable the industrial motor industry to break free from the constraints of rare earth resources for efficiency improvements, guiding the industry towards more efficient development. |
| Development of household 1 HP?3 HP high-efficiency variable frequency compressor | Develop a new generation of household 1 HP?3 HP high-efficiency compressors to assist in energy conservation and carbon reduction of air conditioner. | The product has been completed and put into mass production. | Compared to the previous generation model, the energy efficiency can increase by 2%?5%. The product can meet the efficient use needs of 1 HP?3 HP air conditioners and is fully applied to the Company's household air conditioner systems. | As a new generation of main models, it has been fully applied in household air conditioner systems, achieving efficiency improvement and further enhancing the competitiveness of the household air conditioner market. |
| Development of modular high thrust linear motor | Develop linear motors for the X-axis and Y-axis of the large gantry machine | The prototype is currently in the trial production | Overcome the design and process technology of modular linear motors, | Realize the autonomy of core components of machine tools, improve |
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| tool 3020. | stage. | establish a product platform, and meet the related requirements of the Company's machine tool products. | the market competitiveness of the Company's machine tool products, and promote the development of the machine tool industry towards high-speed direct drive. |
Company R&D personnel
| 2023 | 2022 | Change Ratio | |
| Number of R&D personnel (persons) | 15,282 | 12,977 | 17.76% |
| Proportion of number of R&D personnel | 21.05% | 17.93% | 3.12% |
| Educational structure of R&D personnel | |||
| Bachelor | 8,773 | 8,312 | 5.55% |
| Master and above | 1,407 | 1,294 | 8.73% |
| Age composition of R&D personnel | |||
| Under 30 | 7,667 | 7,323 | 4.70% |
| 30?40 | 5,915 | 4,529 | 30.60% |
R&D investment of the Company
| Item | 2023 | 2022 | Change Ratio |
| Amount of R&D investment (RMB) | 7,006,497,352.61 | 6,429,702,080.04 | 8.97% |
| Proportion of R&D investment to the operating revenue | 3.43% | 3.40% | 0.03% |
| Capitalization amount of R&D investment (RMB) | 244,361,090.38 | 148,307,649.64 | 64.77% |
| Proportion of capitalized R&D investment to R&D investment | 3.49% | 2.31% | 1.18% |
Reasons and influences of significant changes in the composition of R&D personnel in the Company
□ Applicable ?Not Applicable
Reasons for significant changes in the proportion of total R&D investment to the operating revenue compared with theprevious year
□ Applicable ?Not Applicable
Reasons for significant changes in capitalization rate of R&D investment and its reasonableness?Applicable □ Not applicableThe Company's capitalized R&D investment increased by 64.77% year-on-year, mainly due to the increase in capitalizedinvestment such as fixed assets engaged in R&D activities.
5. Cash flow
Unit: yuan (RMB)
| Item | 2023 | 2022 | Year-on-year |
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| Increase/Decrease | |||
| Subtotal of cash inflows from operating activities | 228,996,916,924.84 | 198,587,680,806.39 | 15.31% |
| Subtotal of cash outflows from operating activities | 172,598,490,570.67 | 169,919,244,885.12 | 1.58% |
| Net cash flows from operating activities | 56,398,426,354.17 | 28,668,435,921.27 | 96.73% |
| Subtotal of cash inflows from investment activities | 49,223,300,660.90 | 10,527,205,021.13 | 367.58% |
| Subtotal of cash outflows from investment activities | 90,240,520,005.31 | 47,584,037,812.54 | 89.64% |
| Net cash flows from investment activities | -41,017,219,344.41 | -37,056,832,791.41 | -10.69% |
| Subtotal of cash inflows from financing activities | 88,825,770,725.94 | 102,978,746,831.03 | -13.74% |
| Subtotal of cash outflows from financing activities | 105,183,587,284.78 | 93,055,954,517.92 | 13.03% |
| Net cash flows from financing activities | -16,357,816,558.84 | 9,922,792,313.11 | -264.85% |
| Net increase in cash and cash equivalents | -840,460,509.20 | 1,802,912,937.61 | -146.62% |
Description of the main factors affecting the significant year-on-year changes in relevant data?Applicable □ Not applicable
1. Net cash flows from operating activities increased by 96.73% year-on-year, mainly due to the increase in cash received inconnection with sales goods and labor services.
2. Net cash flows from financing activities decreased by 264.85% year-on-year, mainly due to the decrease in cash receivedfrom borrowing and an increase in cash paid for debt repayment.Reasons for significant differences between net cash flows from operating activities and net profit for the year during thereport period?Applicable □ Not applicableThat is mainly affected by the decrease in operating receivables and the increase in operating payables. Please refer to Note V.72 Supplementary for cash flow statement in Section X Financial Statements for details.
V. Analysis of non-main business
□ Applicable ?Not Applicable
VI. Analysis of assets and liabilities
1. Significant changes in the composition of assets
Unit: yuan (RMB)
| Item | At the End of 2023 | At the Beginning of 2023 | Proportion Increase or Decrease | Significant Changes Description | ||
| Amount | Proportion to Total | Amount | Proportion to Total | |||
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| Assets | Assets | |||||
| Monetary funds | 124,104,987,289.62 | 33.72% | 157,484,332,251.39 | 44.35% | -10.63% | |
| Accounts receivable | 16,099,477,117.56 | 4.37% | 14,824,742,623.45 | 4.18% | 0.19% | |
| Contract assets | 838,812,133.65 | 0.23% | 1,047,739,817.94 | 0.30% | -0.07% | |
| Inventory | 32,579,140,028.70 | 8.85% | 38,314,176,763.90 | 10.79% | -1.94% | |
| Investment real estate | 633,262,161.10 | 0.17% | 634,689,201.98 | 0.18% | -0.01% | |
| Long-term equity investments | 4,488,967,031.20 | 1.22% | 5,892,290,568.81 | 1.66% | -0.44% | |
| Fixed assets | 34,034,829,116.47 | 9.25% | 33,817,019,391.36 | 9.52% | -0.27% | |
| Construction in progress | 6,563,911,378.94 | 1.78% | 5,966,678,892.16 | 1.68% | 0.10% | |
| Usufruct assets | 842,250,508.12 | 0.23% | 207,344,779.05 | 0.06% | 0.17% | |
| Short-term borrowings | 26,443,476,388.52 | 7.18% | 52,895,851,287.92 | 14.90% | -7.72% | Due to the repayment of current short-term borrowings during the period |
| Contract liabilities | 13,588,771,210.88 | 3.69% | 14,972,336,715.45 | 4.22% | -0.53% | |
| Long-term borrowings | 39,035,742,535.09 | 10.61% | 30,784,241,211.21 | 8.67% | 1.94% | |
| Lease liabilities | 767,007,951.92 | 0.21% | 146,836,620.66 | 0.04% | 0.17% |
Overseas assets account for a relatively high proportion.
□ Applicable ?Not Applicable
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2. Assets and liabilities measured at fair value
?Applicable □ Not applicable
Unit: yuan (RMB)
| Item | Beginning Amount | Profits and Losses From Changes in Fair Value in the Current Period | Cumulative Fair Value Changes Included in Equity | Impairment Accrued in the Current Period | Purchase Amount in the Current Period | Sales Amount in the Current Period | Other Changes | Ending Amount |
| Financial assets | ||||||||
| 1. Trading financial assets (excluding derivative financial assets) | 3,867,203,363.52 | 9,741,126.98 | 18,874,695,670.00 | 21,341,651,471.35 | 8,204,434,714.25 | 9,614,423,403.40 | ||
| 2. Derivative financial assets | 108,919,513.22 | 108,919,513.22 | ||||||
| 3. Other debt investments | 14,340,348,882.97 | 21,413,747.71 | 17,078,766.51 | 3,817,000,000.00 | -1,814,920,964.72 | 16,363,841,665.96 | ||
| 4. Other equity instrument investments | 4,669,455,797.90 | -740,755,585.40 | -883,261,200.43 | 74,520,335.95 | 10,685,632.82 | 3,864,865,509.37 | ||
| 5. Receivables financing | 28,427,310,345.20 | -11,939,843.77 | -23,453,909.25 | 18,239,280,833.02 | 10,176,089,668.41 | |||
| 6. Other non-current financial assets | 4,428,003,204.49 | 126,031,136.83 | 3,650,400,372.93 | -8,204,434,714.25 | - | |||
| 7. Others | 3,278,106,802.74 | 5,929,312.07 | 2,781,162.07 | 3,000,000,000.00 | 2,082,280,523.08 | 2,366,316,637.89 | ||
| Subtotal of financial assets | 59,010,428,396.82 | -480,660,592.36 | -886,855,181.10 | 26,342,096,042.93 | 42,655,452,640.32 | 278,045,191.18 | 42,494,456,398.25 | |
| Total above | 59,010,428,396.82 | -480,660,592.36 | -886,855,181.10 | 26,342,096,042.93 | 42,655,452,640.32 | 278,045,191.18 | 42,494,456,398.25 | |
| Financial liabilities | 184,811,894.98 | 181,438,868.23 | 706,893.16 | 4,079,919.91 | ||||
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Other changesOther changes mainly refer to the reclassification of financial statements, differences in foreign currency translation, and interest income.Whether there was any significant change in the measurement attributes of the Company's major assets during the report period
□ Yes ?No
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3. Restricted rights to assets as of the end of the report period
Unit: yuan (RMB)
| Item | End of Period | |
| Book Value | Restricted Reason | |
| Monetary funds | 36,444,669,541.57 | Required deposit reserve, earnest money, etc. |
| Accounts receivable | 95,386,260.00 | Pledged |
| Receivables financing | 5,033,716,307.04 | Pledged |
| Contract assets | 103,189,654.26 | Pledged |
| Other current assets | 9,000,000,000.00 | Pledged |
| Non-current assets due within one year | 1,000,000,000.00 | Pledged |
| Other debt investments | 10,090,000,000.00 | Pledged |
| Long-term equity investments | 310,838,556.07 | Pledged |
| Fixed assets | 2,285,127,725.15 | Pledged |
| Construction in progress | 223,626,881.02 | Pledged |
| Intangible assets | 1,436,665,729.28 | Pledged |
| Other non-current assets | 12,180,000,000.00 | Pledged |
| Others | 13,646,580.00 | Pledged |
| Total | 78,216,867,234.39 | |
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VII. Analysis of investments
1. Overview
?Applicable □ Not applicable
| Investment in the Report Period (RMB) | Investment in the Same Period of Last Year (RMB) | Change Range |
| 84,267,244,633.47 | 13,467,910,481.50 | 525.69% |
2. Significant equity investments obtained during the report period
□ Applicable ?Not Applicable
3. Significant non-equity investments in progress during the report period
□ Applicable ?Not Applicable
4. Financial assets investments
(1) Securities investments
?Applicable □ Not applicable
Unit: yuan (RMB)
| Securities Type | Securities Code | Securities Abbreviation | Initial Investment Cost | Accounting Measurement Model | Book Value at the Beginning of the Period | Profits and Losses From Changes in Fair Value in the Current Period | Cumulative Fair Value Changes Included in Equity | Purchase Amount in the Current Period | Sales Amount in the Current Period | Profits and Losses During the Report Period | Book Value at the End of the Period | Accounting Items | Capital Source |
| Others | - | Zunyu No.1 Fund Trust Plan | 2,891,120,690.09 | Measured at fair value | -8,010,137.57 | 4,165,035,779.92 | 1,273,915,089.83 | 77,957,574.66 | 2,883,110,552.52 | Trading financial assets | Own funds | ||
| Others | - | Anxin Lixiang Asset Management Plan | 1,852,280,819.94 | Measured at fair value | 500,153,496.56 | 2,528,570.30 | 4,404,000,000.00 | 3,051,719,180.06 | 6,394,353.94 | 1,854,962,886.80 | Trading financial assets | Own funds |
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| Stocks listed on domestic and overseas stock exchanges | 600703 | San'an Optoelectronics | 2,000,000,000.00 | Measured at fair value | 1,965,635,734.92 | -379,152,347.47 | -413,516,612.55 | 5,727,376.85 | 1,586,483,387.45 | Other equity instrument investments | Own funds | ||
| Stocks listed on domestic and overseas stock exchanges | 600745 | WINGTECH | 884,999,996.60 | Measured at fair value | 1,885,465,957.10 | -368,271,878.65 | 632,194,081.85 | 1,517,194,078.45 | Other equity instrument investments | Own funds | |||
| Stocks listed on domestic and overseas stock exchanges | 600619 | Highly | 1,145,544,479.57 | Measured at fair value | 522,205,716.62 | 103,698,375.62 | -519,052,993.48 | 961,076.44 | 626,491,486.09 | Other equity instrument investments | Own funds | ||
| Bonds | 160017 | 16Coupon-bearing bond 17 | 288,405,500.00 | Measured at fair value | 307,238,782.20 | -1,736,417.62 | 6,766,380.25 | 7,761,600.00 | 306,780,382.20 | Other debt investments | Own funds | ||
| Others | - | Structured deposits under macro composite index | 307,760,661.55 | Measured at fair value | 702,522,948.29 | -6,692,032.70 | 300,000,000.00 | 692,239,338.44 | 1,068,628.85 | 303,591,577.15 | Trading financial assets | Own funds | |
| Bonds | 200408 | 20 Nongfa 08 | 199,203,000.00 | Measured at fair value | 206,612,610.97 | -1,082,667.73 | 4,080,477.13 | 5,979,400.00 | 205,692,010.97 | Other debt investments | Own funds | ||
| Bonds | 232380082 | 23 CZBank Tier 2 Capital Note 02 | 200,000,000.00 | Measured at fair value | 2,685,600.00 | 2,685,600.00 | 200,000,000.00 | 3,356,832.86 | 203,356,832.86 | Other debt investments | Own funds | ||
| Bonds | 102280934 | 22 Huafa Group MTN006 | 180,000,000.00 | Measured at fair value | 178,827,514.51 | 7,813,080.00 | 1,441,800.00 | 14,946,327.87 | 186,640,594.51 | Other debt investments | Own funds |
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| Other securities investments held at the end of the period | 1,077,128,039.81 | -- | 5,143,422,671.74 | -105,744,121.56 | -581,175,480.05 | 707,369,863.01 | 5,246,080,198.96 | 188,657,339.33 | 509,062,598.70 | -- | -- |
| Total | 11,026,443,187.56 | -- | 11,412,085,432.91 | -753,963,977.38 | -866,576,746.85 | 9,776,405,642.93 | 10,263,953,807.29 | 312,810,510.80 | 10,183,366,387.70 | -- | -- |
| Announcement disclosure date of board's meeting for approval of securities investment | April 29, 2023 | ||||||||||
(2) Derivative investments
?Applicable □ Not applicable
1) Derivative investment for speculative purposes during the report period
?Applicable □ Not applicable
Unit: RMB10,000
| Derivatives Investments Type | Initial Investment Amount | Beginning Amount | Profits and Losses From Changes in Fair Value in the Current Period | Cumulative Fair Value Changes Included in Equity | Purchase Amount During the report period | Sales Amount During the report period | Investment Amount at the End of the Period | Proportion of the Investment Amount at the End of the Period to Net Assets at the End of the report period |
| Futures hedging contracts | 219.02 | 219.02 | 639.04 | 317.55 | 858.06 | 0.01% | ||
| Forward financial contracts | -18,481.19 | -18,481.19 | 29,035.84 | 10,483.96 | 0.09% | |||
| Total | -18,262.17 | -18,262.17 | 29,674.88 | 317.55 | 11,342.02 | 0.10% |
Description of whetherthere was any significantchange in the accountingpolicies for hedgingbusiness and specificprinciples for financial
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| accounting during the report period as compared to the previous report period | |
| Statement of actual profits and losses during the report period | The actual profits and losses of futures hedging contracts during the report period were RMB123,540,300, and that of forward financial contracts during the report period was RMB-334,089,600. |
| Description of the hedging effect | - |
| Capital source of derivative investments | Own funds |
| Risk analysis and description of control measures for derivative positions during the report period (including but not limited to market risks, liquidity risks, credit risks, operational risks, legal risks, etc.) | 1. Legal risks: The Company needs to abide by laws and regulations to carry out hedging and foreign exchange fund trading business, and clearly stipulate the rights and obligations between the Company and its agencies. Control measures: In addition to studying laws, regulations and market rules, the designated responsible departments of the Company shall strictly review contracts, clarify rights and obligations, and strengthen compliance inspection to ensure that the Company's derivative investments and position meet the requirements of laws, regulations, and the Company's internal management system. 2. Operational risks: Risks caused by imperfect internal processes, staff operations, systems, etc. Control measures: The Company has formulated corresponding management systems that clarified the division of responsibilities and approval process of hedging and foreign exchange fund trading business, and a relatively perfect supervision mechanism to effectively reduce operational risks through risk control of business, decision-making, and trading processes. 3. Market risks: The uncertainty of commodity price changes and exchange rate fluctuations in the foreign exchange market leads to greater market risks in the future business and foreign exchange fund trading business. Control measures: The Company's futures hedging business and foreign exchange fund trading business shall not engage in speculative transactions by adhering to the principle of prudent and steady operation. For hedging business, it is strictly stipulated that the number of hedging shall not exceed the actual number of spot transactions, and the futures positions shall not exceed the spot amount of hedging, and a stop loss mechanism shall be adopted. With regard to foreign exchange fund business, the Company effectively prevents market risks by evaluating and judging the trend of foreign exchange rate, and determining the foreign exchange settlement rate through contracts. |
| Changes in the market price or fair value of the product during the report period of the invested derivatives, with the analysis of the fair value of the derivatives disclosing the specific methodology used and the setting of relevant assumptions and parameters | The fair value change income of derivatives during the report period was RMB296,748,800. |
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| Involvement in lawsuits (if applicable) | Not applicable |
| Announcement disclosure date of Board of Directors for approval of derivative investment (if any) | April 29, 2023 |
| Announcement disclosure date of shareholder's meeting for approval of derivative investment (if any) | July 1, 2023 |
| Special opinions of independent directors on the Company's derivative Investments and risk control | The independent directors of the Company believed that conducting bulk material futures hedging and foreign exchange derivative hedging business was beneficial for locking production costs, controlling operational risks, and improving management level. The Company has established a corresponding control system for the relevant business under legal and compliant approval and implementation, and with controllable risks, which is in the interests of the Company and all shareholders. |
2) Derivative investment for speculative purposes during the report period
□ Applicable ?Not Applicable
The Company has no derivative investment for speculative purposes during the report period.
5. Use of placements
□ Applicable ?Not Applicable
The Company had no use of placements during the report period.
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VIII. Significant assets and equity sales
1. Significant assets sales
□ Applicable ?Not Applicable
The Company did not sell any significant assets during the report period.
2. Significant equity sales
□ Applicable ?Not Applicable
IX. Analysis of main holding and joint-stock companies
?Applicable □ Not applicableMain subsidiaries and joint-stock companies affecting 10% or more of the Company's net profits
Unit: yuan (RMB)
| Company Name | Company Type | Main Business | Registered Capital | Total Assets | Net Assets | Operating revenue | Operating Profits | Net Profits |
| Gree (Hefei) Electric Appliances Co., Ltd. | Subsidiary | Air conditioner manufacturing | 150,000,000.00 | 9,308,217,007.17 | 4,979,727,191.70 | 9,378,753,397.98 | 531,771,935.27 | 454,085,224.53 |
| Zhuhai Landa Compressor Co., Ltd. | Subsidiary | Compressor manufacturing | 93,030,000.00 | 13,832,678,719.30 | 9,110,715,685.50 | 10,909,199,594.60 | 1,005,572,325.67 | 880,561,916.21 |
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | Subsidiary | Capacitor manufacturing | 126,180,000.00 | 3,369,859,652.82 | 1,110,075,949.21 | 2,010,003,940.03 | 152,885,859.61 | 128,885,351.13 |
| Zhuhai Kaibang Motor Manufacturing Co., Ltd. | Subsidiary | Motor manufacturing | 82,000,000.00 | 4,055,437,723.78 | 1,308,663,778.53 | 3,320,602,636.53 | 148,892,882.43 | 130,706,244.21 |
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| Gree (Zhong Shan) Small Home Appliances Co., Ltd. | Subsidiary | Small household appliance manufacturing | 30,000,000.00 | 1,010,982,251.42 | 634,354,287.07 | 921,655,967.39 | 47,760,579.92 | 43,419,710.00 |
Information about the acquisition and disposal of subsidiaries during the report period?Applicable □ Not applicable
Unit: yuan (RMB)
| Company Name | Methods of Acquisition and Disposal of Subsidiaries During the Report Period | Impact on Overall Production, Operation and Performance |
| Hunan DunAn Refrigeration Equipment Co., Ltd. | New | 2,486,643.44 |
| Jilin Songliang Modern Logistics Development Co., Ltd. | Cancelled | 0.01 |
| Gree Lintanyuan (Shanghai) Technology Co., Ltd. | New | |
| Ganzhou Qianjin Real Estate Co., Ltd. | Acquisition | -804,692.79 |
| Luoyang Herun Real Estate Co., Ltd. | New | -51,151.68 |
| Tianjin Gree Xinhui Medical Equipment Co., Ltd. | Cancelled | |
| SL Group Jingu Grain Depot Co., Ltd. | Cancelled | 426,668.73 |
| SL Group Songlin Grain Depot Co., Ltd. | Cancelled | 108,192.07 |
| DunAn Sensing Technology Co., Ltd. | Cancelled | -4,927.54 |
Description of major holding and participating companiesNone
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X. Structured entities controlled by the Company
□ Applicable ?Not Applicable
XI. Prospects for the future development of the Company(I) Development vision of the CompanyThe Company will continue to adhere to its corporate vision of "To create a world-class enterprise, achieving Gree's century-old brand." Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, it remains true to itsoriginal aspiration, keeps its mission firmly in mind, sticks to the real economy, and adheres to the road of self-reliance andindependent innovation and development. Through innovation, responsibility, and green development, it contributes to theprogress of human society, striving to become a trusted global brand and create a better future for all.(II) 2024 business plan
1. Promote high-quality development of the enterprise with advanced enterprise Party buildingThe Company adheres to the guidance of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,and promotes the implementation of the spirit of the Party Congress, which is to "remember instructions, be united, begrateful and strive for progress, and grow together". It strengthens the construction of Party organizations and Party memberteams, fully leverages the exemplary role of Party members, deeply integrates Party building work with enterprisedevelopment, promotes business through Party building, and promotes high-quality development of enterprise throughbusiness.
2. Promote the development of the enterprise with science and technology based on existing industrial advantagesAs a leading manufacturing enterprise, the Company relies on its advantages and is closely connected to the industrialecosystem, constantly overcoming key bottleneck technologies. With technology as the core driving force for diversifieddevelopment, industrial products, intelligent equipment, household appliances, and new energy are the key directions fordiversified development. It continues to promote the basic strategy of diversified transformation and achieve stabledevelopment of diversified businesses.
3. Accelerate digital intelligent transformation and continue to promote cost reduction and efficiencyThe Company will accelerate the implementation of the top-level design plan for group informatization, increase efforts tobuild a digital enterprise, improve the digital management methods and operating system of the enterprise, comprehensivelycarry out digital infrastructure construction, plan digital goals from marketing, production, supply chain, finance, quality, andother fields, and integrate the entire business process. Through applying digital technologies, the Company aims to providesuperior solutions that facilitate business transformation by reducing costs, decreasing consumption, enhancing quality, andboosting efficiency. Additionally, the acceleration of smart factory development leveraging digital technologies will pave theway for establishing advanced demonstration sites within the group.
4. Adhere to quality first and build a solid foundation
The Company will continue to strengthen its quality concept, strictly implement a prevention-oriented quality control mode,strictly control product quality and safety, ensure zero safety quality accidents in after-sales service, increase investment inautomated inspection and testing technology, build a digital and intelligent quality control mode, and use advanced standardsto promote product quality and efficiency improvement. By continuously optimizing quality management innovation andusing the "D-CTFP Quality Technology Innovation Cycle Methodology" and the "Five Steps of Quality Prevention", theCompany continues to promote the improvement of product quality level, helping the "perfect quality management model" toserve every consumer.
5. Continuously expand the channels for attracting talents and deepen the cultivation of talentsThe Company strengthens the construction of reserve cadres and talent teams and refines a normalized working system fordynamic positions among cadres, gradually forming a good situation where the capable rise to the top, the outstanding are
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rewarded, the mediocre are relegated, and the ineffective are removed. Targeted efforts will be made to strengthen theintroduction of talents from universities, enrich the cooperation models between schools and the enterprise, and continuouslyenhance the supply capacity of key job talents. It focuses on key areas and groups to carry out key training projects andaccelerate the cultivation of core professional talents. The four-in-one linkage model of "government, industries, enterprises,universities" can integrate high-quality resources, fully empower businesses, and supply high-quality talent for the stabledevelopment of the Company.
6. Strengthen audit supervision of the Company and consolidate internal security managementThe Company should continue to innovate its internal audit system construction, introduce advanced audit tools and means,deeply and efficiently implement audit projects, continuously expand channels for information collection, data monitoring,and project auditing, and strengthen the crackdown on behaviors that harm the Company's interests; strengthen themaintenance and operation of information systems to ensure efficient and controlled information systems, establish acomprehensive risk management internal control system, enhance risk control, facilitate rational and orderly conduct of alloffice affairs, and promote the healthy development of the Company.(III) Main risks to future development
1. Macroeconomic fluctuation risk
The Company's products span two major sectors: consumer goods and industrial products. Macroeconomic fluctuations affectchanges in consumer income and expenditure, which in turn impact corporate decisions regarding strategic contraction orexpansion. These decisions have a bearing on the sales of the Company's products.
2. Risk of factor price fluctuations
On the one hand, the raw materials for the Company's products are mainly copper, steel, aluminum, and plastics of differentgrades. The cost of main raw materials accounts for a relatively high proportion of the main business cost, and fluctuations inraw material prices will have an impact on the cost. On the other hand, the rise in labor costs has become a commonphenomenon in economic development, and the increase in labor costs will have a negative impact on the Company's grossmargin.
3. Risk of intensified market competition
The urbanization rate in China is gradually increasing, and the ownership of major household appliances has significantlyincreased, leading to increasingly fierce industry competition.
4. Political risks overseas
With the uncertainties brought about by the tense overseas political situation, escalating trade frictions, economicglobalization, overseas business may be faced with more risks.
5. Risk of exchange rate fluctuations
Exchange rate fluctuations may weaken product competitiveness, bring adverse effects to product exports, and may alsocause exchange losses and increase financial costs.In the face of complex and ever-changing internal and external environment and risks, Gree will continuously improve itscorporate governance structure, improve its standardized operation level, strengthen its internal control system in accordancewith the requirements of the Company Law, Securities Law, and relevant laws and regulations of the China SecuritiesRegulatory Commission, to effectively prevent and control risks, ensuring the Company's sustained, stable, and healthydevelopment.Lastly, the Company, along with the Board of Directors, sincerely thanks all our shareholders, global customers, partners,and all parts of society for their trust and support in Gree Electric Appliances. With the utmost consideration for the welfareof all our shareholders, the Board of Directors is dedicated to achieving the annual operational goals and working tirelessly togenerate long-term, value-based investment returns for the shareholders!
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XII. Activities such as reception of research, communication, interviews during thereport period?Applicable □ Not applicable
| Time of Reception | Place of Reception | Method of Reception | Type of Reception Object | Reception Object | Main Contents Discussed and Material Provided | Index of Basic Information of Research |
| June 15, 2023 | Jihuibao: https://n.jhbshow.com/live-text/2124749415 | Others | Others | Company investors | Company operations | Please refer to the information disclosed by the Company on June 15, 2023, on CNINFO (http://www.cninfo.com.cn/new/index) Gree Electric Appliances: 2022 Performance Explanation Meeting Investor Relations Activity Record Form. |
| September 19, 2023 | Quanjingwang: https://rs.p5w.net/html/140304.shtml | Others | Others | Company investors | Company operations | Please refer to the information disclosed by the Company on September 19, 2023, on CNINFO (http://www.cninfo.com.cn/new/index) Gree Electric Appliances: 000651 Gree Electric Appliances Investor Relations Activity Record Form on September 19, 2023. |
| September 22, 2023 | Hong Kong | Others | Organization | Company investors | Company operations | Please refer to the information disclosed by the Company on September 22, 2023, on CNINFO (http://www.cninfo.com.cn/new/index) Gree Electric Appliances: Investor Relations Activity Record Form on September 22, 2023. |
| October 19, 2023 | Shenzhen | Others | Organization | Company investors | Company operations | Please refer to the information disclosed by the Company on October 19, 2023, on CNINFO (http://www.cninfo.com.cn/new/index) Gree Electric Appliances: Investor Relations Activity Record Form on October 19, 2023. |
XIII. Implementation of the action plan for "Double Improvement of Quality andReturn"
Has the Company disclosed an action plan for "Double Improvement of Quality and Return"??Yes □No
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For specific details, please refer to the Announcement on Promoting the Implementation of the 'Double Improvement ofQuality and Return' Action Plan (Announcement No.: 2024-005) disclosed by the Company on February 19, 2024, onCNINFO (http://www.cninfo.com.cn/new/index).
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Section IV Corporate GovernanceI. Basic status of corporate governance
The Company, in strict accordance with the Company Law of the People's Republic of China, Securities Law of the People'sRepublic of China, other relevant national laws and regulations, and the Shenzhen Stock Exchange Listed Companies Self-regulatory Guidelines No. 1 ? Standardized Operation of Main Board Listed Companies, has established a normativecorporate governance structure and rules of procedure for the General Meeting of Shareholders, Board of Directors andBoard of Supervisors, clarified the responsibilities and authorities for decision-making, execution and supervision, formingan effective division of responsibilities and balance mechanism, and continuously promoted the standardized operation levelof the Company, safeguarding the interests of investors and the Company.The Company's governance complied with the Company Law of the People's Republic of China and the requirements of theChina Securities Regulatory Commission regarding the governance of listed companies.Whether there were any significant differences between the actual state of corporate governance and the laws, administrativeregulations, and regulations on corporate governance of listed companies issued by the China Securities RegulatoryCommission.
□ Yes ?No
There were no significant differences between the actual state of corporate governance and the laws, administrativeregulations and the regulations on governance of listed companies issued by the China Securities Regulatory Commission.II. The independence of the Company from the controlling shareholder and the actualcontroller in terms of assets, personnel, finance, organization and business of theCompanyThe Company has a sound corporate governance structure and is completely independent of the largest shareholder, ZhuhaiMingjun, in assets, personnel, finance, organization, and business, and the Company has an independent and completebusiness operation and independent management capability.
III. Horizontal competition
□ Applicable ?Not Applicable
IV. Annual general meeting of shareholders and interim general meeting ofshareholders during the report period
1. General meetings of shareholders during the report period
| Session of Meeting | Type of Meeting | Investor Participation Ratio | Date of Convening | Date of Disclosure | Meeting Resolutions |
| 2022 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 42.88% | June 30, 2023 | July 1, 2023 | Announcement on the Resolutions of 2022 Annual General Meeting of Shareholders |
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(Announcement No.:
2023-031) on CNINFO(http://www.cninfo.com.cn/new/index)
2. Convening of an interim general meeting of shareholders requested by the preferred shareholderswith restored voting rights
□ Applicable ?Not Applicable
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V. Directors, supervisors, and senior executives
1. Basic information
| Name | Sex | Age | Title | Employment Status | Term Start Date | Term End Date | Number of Shares Held at the Beginning of the Period (Shares) | Number of Shares Increased in the Current Period (Shares) | Number of Shares Decreased in the Current Period (Shares) | Other Increase/Decrease (Shares) | Number of Shares Held at the End of the Period (Shares) | Reasons for Increase or Decrease of Shares |
| Dong Mingzhu | Female | 69 | Chairperson | Incumbent | May 25, 2012 | February 28, 2025 | 44,488,492 | 10,000,000 | 54,488,492 | Ownership of employee stock ownership plan shares | ||
| President | Incumbent | April 24, 2001 | February 28, 2025 | |||||||||
| Zhang Wei | Male | 47 | Director and Secretary of the Party Committee | Incumbent | January 16, 2019 | February 28, 2025 | 183,328 | 183,328 | Ownership of employee stock ownership plan shares | |||
| Guo Shuzhan | Male | 67 | Director | Incumbent | January 16, 2019 | February 28, 2025 | ||||||
| Zhang Jundu | Male | 63 | Director | Incumbent | May 25, 2012 | February 28, 2025 | ||||||
| Deng Xiaobo | Male | 48 | Director | Incumbent | February 28, 2022 | February 28, 2025 | 116,600 | 116,600 | Secondary market increase and ownership of employee stock ownership plan shares | |||
| Vice President | Incumbent | December 26, 2020 | February 28, 2025 | |||||||||
| Secretary of the Board of Directors | Incumbent | December 26, 2020 | February 28, 2025 | |||||||||
| Liu Shuwei | Female | 71 | Independent director | Incumbent | January 16, 2019 | February 28, 2025 | ||||||
| Wang Xiaohua | Male | 62 | Independent director | Incumbent | January 16, 2019 | February 28, 2025 | ||||||
| Xing Ziwen | Male | 61 | Independent director | Incumbent | January 16, 2019 | February 28, 2025 | ||||||
| Zhang Qiusheng | Male | 56 | Independent director | Incumbent | February 28, 2022 | February 28, 2025 | ||||||
| Cheng Min | Female | 43 | Supervisor | Incumbent | November 2, 2020 | February 28, 2025 |
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| Duan Xiufeng | Male | 60 | Supervisor | Incumbent | January 16, 2019 | February 28, 2025 | 447,525 | 156,300 | 603,825 | Secondary market increase | ||
| Wang Fawen | Female | 40 | Employee supervisor | Incumbent | January 16, 2019 | February 28, 2025 | 51,355 | 51,355 | Ownership of employee stock ownership plan shares | |||
| Zhuang Pei | Male | 59 | Vice President | Incumbent | April 16, 2003 | February 28, 2025 | 5,955,202 | 420,253 | 6,375,455 | Ownership of employee stock ownership plan shares | ||
| Tan Jianming | Male | 59 | Vice President and Chief Engineer | Incumbent | August 30, 2017 | February 28, 2025 | 1,297,300 | 488,469 | 1,785,769 | Ownership of employee stock ownership plan shares | ||
| Shu Lizhi | Male | 54 | Vice President | Incumbent | December 26, 2020 | February 28, 2025 | 99,719 | 99,719 | Ownership of employee stock ownership plan shares | |||
| Liao Jianxiong | Male | 50 | President Assistant and Finance Chief | Incumbent | August 6, 2020 | February 28, 2025 | 77,663 | 77,663 | Ownership of employee stock ownership plan shares | |||
| Fang Xiangjian | Male | 46 | Vice President | Incumbent | November 19, 2021 | February 28, 2025 | 167,400 | 391,890 | 559,290 | Ownership of employee stock ownership plan shares | ||
| Total | -- | -- | -- | -- | -- | -- | 52,355,919 | 11,985,577 | 64,341,496 | -- |
Whether there are cases of quit of directors and supervisors and dismissal of senior executives during the report period
□ Yes ?No
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Changes in the Company's directors, supervisors and senior executives
□ Applicable ?Not Applicable
2. Employment situation
Professional background, major work experience, and current major responsibilities of the Company's current directors,supervisors and senior executivesMs. Dong Mingzhu, with a master's degree, currently serves as the Chairperson and President of Gree Electric Appliances,Inc. of Zhuhai. She successively held the posts of salesperson, Vice Director of Sales Department, Director of SalesDepartment, Deputy General Manager, Vice Chairperson and President of Gree Electric Appliances.She was successively elected as a deputy of the 10th, 11th, 12th, 13th, and 14th National People's Congress, a member of the10th, 11th, and 12th Executive Committee of the All-China Women's Federation, an expert who enjoys special governmentallowances from the State Council, a member of the 13th Five-Year Plan Expert Committee of the National Development andReform Commission, a member of the Advisory Committee of the All-China Federation of Industry and Commerce, a UnitedNations Ambassador for Sustainable Urban Development, the first rotating chair of the UNDP Commission on SustainableDevelopment, and Chairperson of the ISO/TC86/SC4.She was awarded the "National Model Worker", "National May Day Labor Medal", "National March 8th Red BannerPacesetter", China Patent Gold Award, the Third China Quality Award, Liu Yuanzhang Quality Technology ContributionAward, Fudan University Outstanding Contribution to Enterprise Management Award, Top 10 Management InnovationLeaders · Practitioners of Tsinghua Business Review in 2018, and "China Outstanding Individual for Quality (NationalIndividual Quality Award)", Nomination Award for the 4th China Quality Award, Advanced Individual of Private Economyin the Fight against the COVID-19 Epidemic, Outstanding Contribution Award of China Standard Innovation ContributionAward, and other honors and titles, and three times has been selected by CCTV as "Economic Personality of the Year."Mr. Zhang Wei, a senior economist with a bachelor's degree, currently serves as the Secretary of the Party Committee andDirector of Gree Electric Appliances, Inc. of Zhuhai.He joined Gree Electric Appliances, Inc. of Zhuhai in 1999 and successively served as the head of Gree Electric AppliancesPipeline Branch, Material Supply Department, Outsourcing and Purchasing Quality Management Department, EnterpriseManagement Department, and President Assistant, and served as Vice President of Zhuhai Gree Group Co., Ltd. from 2013to 2020, served as a director of Gree Electric Appliances from January 2019 to now, and has been serving as the Secretary ofthe Party Committee of Gree Electric Appliances since September 2020.Mr. Guo Shuzhan, with a junior college degree, currently serves as a director of Gree Electric Appliances, Inc. of Zhuhai.Since August 2006, he has been serving as the Chairman and General Manager of Jinghai Internet Technology DevelopmentCo., Ltd.; since August 2012, he has been serving as the Executive Director of Henan Shengshi Xinxing Gree Trade Co., Ltd.;from May 2012 to January 2019, he served as a supervisor of the Company, and since January 2019, he has been serving as adirector of the Company.Mr. Zhang Jundu, with a junior college degree, currently serves as a director of Gree Electric Appliances, Inc. of Zhuhai.Since September 1999, he has been serving as the Chairman of Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. SincAugust 2012 to the present, he has been concurrently serving as the Executive Director and General Manager of ZhejiangShengshi Xinxing Gree Trade Co., Ltd., and has served as director of the Company from May 2012 to the present.
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Mr. Deng Xiaobo, with a bachelor's degree, currently serves as a director, Vice President and Secretary of the Board ofDirectors of Gree Electric Appliances, Inc. of Zhuhai.He joined Gree Electric Appliances, Inc. of Zhuhai in December 2020 and served as Vice President and Secretary of theBoard of Directors of the Company. Since February 2022, he has been serving as Director of Gree Electric Appliances, Inc.of Zhuhai.Ms. Liu Shuwei, with a master's degree, currently serves as an independent director of Gree Electric Appliances, Inc. ofZhuhai.Ms. Liu graduated from Peking University with a master's degree in economics in 1986 and studied under the tutelage ofProfessor Chen Daisun and Professor Li Yining, who are renowned scholars in finance. In 2002, she was awarded "EconomicPersonality of the Year" and "Touching China ? 2002 Person of the Year" by CCTV. Now, she is an independent director ofCostar Group Co., Ltd., and a researcher on Chinese enterprises at the Central University of Finance and Economics. She hasserved as an independent Director of the Company from January 2019 to the present.Mr. Xing Ziwen, with a doctoral degree, currently serves as an independent director of Gree Electric Appliances, Inc. ofZhuhai.He is currently a professor of Xi'an Jiaotong University, executive director of the Chinese Association of Refrigeration, anacademic member of the State Key Laboratory of High-end Compressor and System, State Key Laboratory of Air-conditioning Equipment and System Energy Conservation, and the candidate of several national leading talent plans,enjoying special allowance of the State Council. Professor Xing Ziwen has served as the director of the Department ofRefrigeration and Cryogenic Engineering, Director of Compressor Research Institute, and Deputy Director of the NationalEngineering Center for Fluid Machinery and Compressors of School of Energy and Power Engineering, Xi'an JiaotongUniversity. He has won 2 National Science and Technology Progress Awards, 9 Provincial and Ministerial Science andTechnology Progress Awards, and the Special Award for Science and Technology Progress of the Chinese Association ofRefrigeration, the Special Award for Invention and Entrepreneurship of the China Association of Inventions, theDistinguished Professor Award of the Xia Anshi Education Foundation, and the Youth Innovation Award of the Ho LeungHo Lee Foundation, etc.Mr. Wang Xiaohua, a Master of Laws from the University of East London, is a first-class lawyer in Guangdong Province, anational outstanding lawyer, and a visiting professor at Zhongnan University of Economics and Law. He is now anindependent director of Gree Electric Appliances, Inc. of Zhuhai.He has been working at ETR Law Firm since January 1993 and is currently the honorary director and founding partner of thelaw firm. He also serves as a legal advisor to units such as the Guangdong Provincial Public Security Department, ZhongNanshan Medical Foundation, and the General Office of the Guangdong Provincial CPPCC. In addition, he is an independentdirector of Guangzhou Tower Tourism and Culture Development Co., Ltd. and ARROW Home Group Co., Ltd. He hasserved as a member of the Standing Committee of Guangdong Provincial CPPCC, a councilor of the All China LawyersAssociation, a legal advisor to the 16th Asian Games Organizing Committee, a supervisory judicial consulting expert of theStanding Committee of the Guangdong Provincial People's Congress, the President of the Guangzhou Alumni Association ofZhongnan University of Economics and Law, a member of the Guangdong Province Law Society, a member of the 9th All-China Youth Federation, the President of the Guangzhou Lawyers Association, a legal consulting expert and legal advisor tothe People's Government of Guangzhou Municipality. Over the past 35 years of practice, he has handled more than 1,000
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litigation, arbitration, and non-litigation cases and projects individually or with his team, having rich experience in legalservices.Mr. Wang Xiaohua has published four monographs and co-authored four books, published more than 30 papers and articles,and submitted more than 60 proposals, and was praised by the Nanfang Daily News as a major proposal writer.Mr. Zhang Qiusheng, with a doctoral degree, is a non-practicing member of the Chinese Certified Public Accountant. He iscurrently a professor at the School of Economics and Management of Beijing Jiaotong University, the director of theNational Institute of Transportation Development, the director of the China Center for Corporate Mergers and Acquisitions,and an independent director of CMST Development Co., Ltd. and Luoniushan Co., Ltd.Mr. Zhang Qiusheng has undertaken various provincial and ministerial research projects, including the National NaturalScience Foundation of China, the National Social Science Fund of China, the National Soft Science Program, as well as theMinistry of Education, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of theState Council, and the China Securities Regulatory Commission. He has published more than 30 works (translations)including the monograph A Framework for Mergers and Acquisitions and more than 100 academic and professional papers,and has won a second prize for national teaching achievements, 4 awards for provincial and ministerial researchachievements, and 2 first prizes for teaching achievements in Beijing.Ms. Cheng Min, with a bachelor's degree, currently serves as a supervisor of Gree Electric Appliances, Inc. of Zhuhai.She serves as the President Assistant of Zhuhai Gree Group Co., Ltd., and the Chairperson of Zhuhai Gexin Development Co.,Ltd. She successively held the posts of the head of the Planning Department of Zhuhai Exhibition and Convention Bureau, amember of the Party Group of Zhuhai Exhibition and Convention Bureau, and the office director and secretary of the Boardof Directors of Zhuhai Gree Group Co., Ltd.Mr. Duan Xiufeng currently serves as a supervisor of Gree Electric Appliances, Inc. of Zhuhai.He graduated from Shandong Party School in 1999 and has served as the Deputy General Manager and General Manager ofShandong Gree Electric Appliance Marketing Co., Ltd. and General Manager of Shandong Shengshi Xinxing Gree Trade Co.,Ltd. He has served as a supervisor of the Company from January 2019 to the present.Ms. Wang Fawen, with a master's degree, a mid-level economist and human resources manager, serves as the supervisor ofthe staff representative of Gree Electric Appliances, Inc. of Zhuhai.From 2007 to 2019, she successively served as Human Resources Specialist of the Human Resources Department, Directorof the Personnel General Office, Supervisor of the Performance Section, Supervisor of the Training Section, AssistantDirector of the Training Department, Human Resources Department and Director of the Training Department; she has beenserving as a supervisor of the Employee Representative of the Company since January 2019, and the Director Assistant of theHuman Resources Department of the Company since February 2019.Mr. Zhuang Pei, a senior engineer with a bachelor’s degree, currently serves as the Vice President of Gree ElectricAppliances, Inc. of Zhuhai.He served as President’s Assistant from 2002 to April 2003 and has been serving as Vice President of the Company sinceApril 2003.
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Mr. Tan Jianming, with a master's degree, currently serves as the Vice President and Chief Engineer of Gree ElectricAppliances, Inc. of Zhuhai.From 1982 to 1986, he studied Refrigeration and Cryogenic Engineering major at Huazhong University of Science andTechnology and received his bachelor's degree; from 1986 to 1989, he continued his studies in Refrigeration and CryogenicEngineering at Huazhong University of Science and Technology and received his Master's degree; after graduation in 1989,he joined Gree Electric Appliances, Inc. of Zhuhai and successively served as a Designer, Director, President Assistant, andDeputy Chief Engineer, etc. Since August 2017, he has been serving as the Vice President and Chief Engineer of theCompany.Mr. Shu Lizhi, with a master's degree, currently serves as the Vice President of Gree Electric Appliances, Inc. of Zhuhai.He served as the Deputy Director and Director of Wuhan Special Commission Office of the National Audit Office. He joinedGree Electric Appliances, Inc. of Zhuhai in December 2019. He has served as Vice President of the Company fromDecember 2020 to the present.Mr. Fang Xiangjian, a senior engineer with a master’s degree, currently serves as the Vice President of Gree ElectricAppliances, Inc. of Zhuhai.From July 2004 to December 2016, he successively served as the assistant to factory manager, deputy factory manager andfactory manager of the Incoming Materials Inspection Factory, and Director of Quality Control Department, of Gree ElectricAppliances, Inc. of Zhuhai. He has been serving as the Assistant President of Gree Electric Appliances, Inc. of Zhuhai sinceDecember 2016 and has been serving as the Vice President of Gree Electric Appliances, Inc. of Zhuhai since November 2021.He won the Guangdong May Day Labor Medal, Liu Yuanzhang Quality Technical Talent Award, and the ManagementTalent Award of the China Management Science Society. He serves as Vice President of the China Association for QualityInspection, Professional Committee Member of the China Fire Protection Association, Member of the 8th AcademicCommittee of the China Association for Quality, Vice Chairman of the Green and Efficient Energy Products ProfessionalCommittee of the China Energy Conservation Association, and a member of the 3rd TC463 Committee.Mr. Liao Jianxiong, with a bachelor's degree, currently serves as the Finance Chief and President Assistant of Gree ElectricAppliances, Inc. of Zhuhai.He joined Gree in May 1993 and successively served as the head of the Financial Department of Gree (Chongqing) ElectricAppliances Co., Ltd., head of the Financial Department and President Assistant of Gree Electric Appliances, Inc. of Zhuhai.He has served as the Finance Chief and assistant to the president of the Company from August 2020 to the present.Employment in Shareholders?Applicable □ Not applicable
| Name of Incumbent | Name of Shareholder | Position Held at the Shareholder | Term Start Date | Term End Date | Receive Remuneration and Allowance From the Shareholder or Not |
| Cheng Min | Zhuhai Gree Group Co., Ltd. | President Assistant | March 1, 2020 | Yes | |
| Guo Shuzhan | Jinghai Internet Technology Development Co., Ltd. | President and Legal Representative | August 1, 2006 | Yes | |
| Zhang Jundu | Jinghai Internet Technology | Director | September 20, 2023 | Yes |
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| Development Co., Ltd. | ||
| Description of incumbent in shareholders | None | |
Employment in other companies?Applicable □ Not applicable
| Name of Incumbent | Name of Other Companies | Position Held in the Other Companies | Term Start Date | Term End Date | Receive Remuneration and Allowance From Other Companies or Not |
| Dong Mingzhu | Zhuhai Gezhen Investment Management Partnership (Limited Partnership) | Executive Partner | September 26, 2019 | No | |
| Dong Mingzhu | Kingdee International Software Group Co., Ltd. | Non-executive Director | August 21, 2012 | Yes | |
| Guo Shuzhan | Beijing Qianyuan Hengjiuhe Liquor Co., Ltd. | Director | April 25, 2014 | No | |
| Guo Shuzhan | Xiahe Hengsheng Hydropower Co., Ltd. | Director | May 1, 2017 | No | |
| Guo Shuzhan | Henan Shengshi Xinxing Gree Trade Co., Ltd. | Executive Director | August 1, 2010 | Yes | |
| Guo Shuzhan | Luoyang Gree Electric Appliance Logistics Co., Ltd. | Executive Director and General Manager | June 1, 2010 | No | |
| Guo Shuzhan | Xiahe Hengfa Hydropower Co., Ltd. | Director | June 1, 2005 | No | |
| Guo Shuzhan | Henan Gree Installation Engineering Co., Ltd. | Executive Director | March 10, 2021 | No | |
| Guo Shuzhan | Henan Sanli Real Estate Development Co., Ltd. | Supervisor | November 6, 2006 | No | |
| Zhang Jundu | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. | Chairman | September 1, 1999 | Yes | |
| Zhang Jundu | Ningbo Tongcheng Gree Electric Appliance Co., Ltd. | Director | July 1, 2013 | No | |
| Zhang Jundu | Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | Executive Director and General Manager | January 1, 2017 | Yes | |
| Zhang Jundu | Zhejiang Ruitong Vehicle Co., Ltd. | Director | December 1, 2014 | No | |
| Zhang Jundu | Wenzhou Tongcheng Economic and Trade Co., Ltd. | Director | April 1, 2012 | No | |
| Zhang Jundu | Huzhou Tongcheng | Director | November 1, 2008 | No |
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| Gree Electric Appliance Co., Ltd. | |||||
| Liu Shuwei | China Vanke Co., Ltd. | Independent director | June 30, 2017 | June 29, 2023 | Yes |
| Liu Shuwei | Costar Group Co., Ltd. | Independent director | April 10, 2019 | Yes | |
| Wang Xiaohua | ETR Law Firm | Honorary Director | July 1, 2022 | Yes | |
| Wang Xiaohua | ARROW Home Group Co., Ltd. | Independent director | December 18, 2019 | Yes | |
| Wang Xiaohua | CantonTower Cultural Tourism Development Co., Ltd. | Independent director | April 27, 2021 | Yes | |
| Zhang Qiusheng | Jinneng Holding Shanxi Coal Industry Co., Ltd. | Independent director | June 5, 2020 | Yes | |
| Zhang Qiusheng | Luoniushan Co., Ltd. | Independent director | October 1, 2022 | Yes | |
| Zhang Qiusheng | Tianjin Lishen Battery Joint-stock Co., Ltd. | Independent director | December 25, 2021 | Yes | |
| Zhang Qiusheng | Yusys Technologies Co., Ltd. | Independent director | August 18, 2022 | Yes | |
| Zhang Qiusheng | CMST Development Co., Ltd. | Independent director | October 1, 2022 | Yes | |
| Xing Ziwen | Zhejiang Wangzhou Internet of Things Technology Co., Ltd. | Director | November 10, 2014 | Yes | |
| Cheng Min | Zhuhai Gexin Development Co., Ltd. | President and Legal Representative | September 11, 2018 | Yes | |
| Duan Xiufeng | Beijing Rongzhi Xingwei Management Consulting Co., Ltd. | Executive Director | May 13, 2014 | March 31, 2023 | No |
| Duan Xiufeng | Jinan Qihui Small Loan Co., Ltd. | Director | February 4, 2009 | No | |
| Duan Xiufeng | Shandong Blue Economy Industrial Fund Management Co., Ltd. | Chairman | November 5, 2014 | No | |
| Duan Xiufeng | Jinan Jierui New Energy Technology Co., Ltd. | Executive Director and General Manager | December 21, 2016 | No | |
| Duan Xiufeng | Zhongfu Huaxia Management Consulting Co., Ltd. | Chairman | December 23, 2005 | No | |
| Duan Xiufeng | Hainan Jierui Tongda Investment Co., Ltd. | Executive Director and General Manager | June 15, 2024 | No | |
| Duan Xiufeng | Jinan Rural Commercial Bank Co., Ltd. | Supervisor | May 22, 2020 | No | |
| Description of incumbent in the other companies | None | ||||
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Penalties imposed by securities regulators on current and outgoing directors, supervisors and senior executives in the reportperiod in the recent three years?Applicable □ Not applicableOn December 27, 2021, Mr. Duan Xiufeng, a supervisor of the Company, cumulatively reduced his holdings of theCompany's shares through centralized bidding, amounting to 149,175 shares, representing 0.0025% of the total share capitalat that time. However, Mr. Duan failed to disclose his share reduction plan 15 trading days prior to the first sale, contraveningthe provisions of the Information Disclosure Regulations for Listed Companies, as well as the Several Provisions on theReduction of Shares Held by Shareholders, Directors, Supervisors, and Senior Management of Listed Companies. Inresponse to this situation, the Guangdong Branch of the China Securities Regulatory Commission has administered anadministrative regulatory measure against Mr. Duan Xiufeng in the form of a warning letter; concurrently, the ShenzhenStock Exchange has also issued a regulatory letter to him.
3. Remuneration of directors, supervisors and senior executives
Decision-making procedures, determination basis, and actual payment regarding the remunerations of directors, supervisorsand senior executivesDuring the report period, to fully stimulate the potential of the Board of Directors and Supervisors and create greater value,and to establish a salary assessment and incentive system that is in line with the actual situation of the Company, the Board ofDirectors evaluated the performance of senior executives in terms of "morality, ability, diligence, and performance" inaccordance with relevant provisions such as the Company's Articles of Association.Remunerations of directors, supervisors and senior executives in the report period
Unit: RMB10,000
| Name | Sex | Age | Title | Employment Status | Total Pre-tax Remuneration Received From the Company | Receive Remuneration From a Related Party of the Company or Not |
| Dong Mingzhu | Female | 69 | Chairperson & President | Incumbent | 1,213.8 | Yes |
| Zhang Wei | Male | 47 | Director and Secretary of the Party Committee | Incumbent | 400 | No |
| Guo Shuzhan | Male | 67 | Director | Incumbent | 0 | Yes |
| Zhang Jundu | Male | 63 | Director | Incumbent | 0 | Yes |
| Deng Xiaobo | Male | 48 | Director, Vice President, Secretary of the Board of Directors | Incumbent | 300 | No |
| Liu Shuwei | Female | 71 | Independent director | Incumbent | 20 | No |
| Wang Xiaohua | Male | 62 | Independent director | Incumbent | 20 | No |
| Xing Ziwen | Male | 61 | Independent director | Incumbent | 20 | Yes |
| Zhang Qiusheng | Male | 56 | Independent director | Incumbent | 20 | No |
| Cheng Min | Female | 43 | Supervisor | Incumbent | 0 | Yes |
| Duan | Male | 60 | Supervisor | Incumbent | 0 | No |
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| Xiufeng | ||||||
| Wang Fawen | Female | 40 | Employee supervisor | Incumbent | 74.39 | No |
| Zhuang Pei | Male | 59 | Vice President | Incumbent | 240 | No |
| Tan Jianming | Male | 59 | Vice President and Chief Engineer | Incumbent | 400 | No |
| Shu Lizhi | Male | 54 | Vice President | Incumbent | 220 | No |
| Liao Jianxiong | Male | 50 | Finance Chief, President Assistant | Incumbent | 180 | No |
| Fang Xiangjian | Male | 46 | Vice President | Incumbent | 300 | No |
| Total | -- | -- | -- | -- | 3,408.19 | -- |
Explanation of other situations
□ Applicable ?Not Applicable
VI. Performance of directors' duties during the report period
1. The Board of Directors during the report period
| Session of Meeting | Date of Convening | Date of Disclosure | Meeting Resolutions |
| The 11th Meeting of the 12th Board of Directors | March 28, 2023 | March 29, 2023 | For details, please refer to Announcement of Resolutions of the 11th Meeting of the 12th Board of Directors (Announcement No.: 2023-009) on CNINFO (http://www.cninfo.com.cn/new/index) |
| The 12th Meeting of the 12th Board of Directors | April 28, 2023 | April 29, 2023 | For details, please refer to Announcement of Resolutions of the 12th Meeting of the 12th Board of Directors (Announcement No.: 2023-019) on CNINFO (http://www.cninfo.com.cn/new/index) |
| The 13th Meeting of the 12th Board of Directors | April 28, 2023 | April 29, 2023 | For details, please refer to Announcement of Resolutions of the 13th Meeting of the 12th Board of Directors (Announcement No.: 2023-023) on CNINFO (http://www.cninfo.com.cn/new/index) |
| The 14th Meeting of the 12th Board of Directors | August 30, 2023 | August 31, 2023 | For details, please refer to Announcement of Resolutions of the 14th Meeting of the 12th Board of Directors (Announcement No.: 2023-037) on CNINFO (http://www.cninfo.com.cn/new/index) |
| The 15th Meeting of the 12th Board of Directors | October 30, 2023 | October 31, 2023 | For details, please refer to Announcement of Resolutions of |
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| the 15th Meeting of the 12th Board of Directors (Announcement No.: 2023-041) on CNINFO (http://www.cninfo.com.cn/new/index) | |||
| The 16th Meeting of the 12th Board of Directors | December 19, 2023 | December 20, 2023 | For details, please refer to Announcement of Resolutions of the 16th Meeting of the 12th Board of Directors (Announcement No.: 2023-051) on CNINFO (http://www.cninfo.com.cn/new/index) |
2. Attendance of directors at meetings of the Board of Directors and general meetings of shareholders
| Attendance of directors at meetings of the Board of Directors and general meetings of shareholders | |||||||
| Name of the Director | Number of Meetings of the Board of Directors Requiring Attendance in the Report Period | Times of On-site Attendance at the Meetings of the Board of Directors | Times of Attending Meetings of the Board of Directors via Communication Tools | Times of Attending Meetings of the Board of Directors by Entrusting | Times of Absence From Meetings of the Board of Directors | Whether Fail to Personally Attend the Meetings of the Board of Directors for Consecutively Twice? | Times of Attending the General Meetings of Shareholders |
| Dong Mingzhu | 6 | 6 | 0 | 0 | 0 | No | 1 |
| Zhang Wei | 6 | 6 | 0 | 0 | 0 | No | 1 |
| Guo Shuzhan | 6 | 1 | 5 | 0 | 0 | No | 1 |
| Zhang Jundu | 6 | 2 | 4 | 0 | 0 | No | 1 |
| Deng Xiaobo | 6 | 6 | 0 | 0 | 0 | No | 1 |
| Liu Shuwei | 6 | 5 | 1 | 0 | 0 | No | 1 |
| Wang Xiaohua | 6 | 4 | 2 | 0 | 0 | No | 1 |
| Xing Ziwen | 6 | 4 | 2 | 0 | 0 | No | 1 |
| Zhang Qiusheng | 6 | 4 | 2 | 0 | 0 | No | 1 |
Explanation of absence from the Board of Directors for consecutively twice
3. Directors' objection to relevant matters of the Company
Whether the directors objected to relevant issues of the Company?
□ Yes ?No
The directors didn't raise any objection to relevant issues of the Company.
4. Other descriptions for performance of duties by directors
Whether the relevant suggestions on the Company by directors were adopted?Yes □NoDirectors' explanation on whether to adopt the suggestions
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During the report period, the directors of the Company were able to take the best interests of the Company and shareholdersas their code of conduct, faithfully performed their duties in accordance with the relevant regulations, attended the meetingsof the Board of Directors and Meeting of Shareholders, carefully deliberated the proposals and made suggestions andcomments on the management of the Company, which played a positive role in the effective decision-making of the Board ofDirectors, improving the management level and standardizing the operation of the Company.
VII. Specialized committees under the Board of Directors during the report period
| Committee Name | Member Status | Number of Meetings Held | Date of Convening | Conference Content | Important Comments and Suggestions Proposed | Other Performance of Duties | Details of Objection (if any) |
| Audit Committee | Liu Shuwei, Wang Xiaohua, and Zhang Wei | 4 | April 28, 2023 | Deliberation of the following proposals: I. 2022 Financial Statements II. 2022 Annual Report and its Summary III. Proposal on the Proposed Appointment of the Company's Audit Agency in 2023 | |||
| Audit Committee | Liu Shuwei, Wang Xiaohua, and Zhang Wei | April 28, 2023 | Deliberation of the 2023 First Quarter Report | ||||
| Audit Committee | Liu Shuwei, Wang Xiaohua, and Zhang Wei | August 30, 2023 | Deliberation of 2023 Semi-annual Report and its Summary | ||||
| Audit Committee | Liu Shuwei, Wang Xiaohua, and Zhang Wei | October 30, 2023 | Deliberation of the 2023 Third Quarter Report | ||||
| Remuneration and Appraisal Committee | Wang Xiaohua, Liu Shuwei, and Zhang Wei | 2 | April 28, 2023 | Deliberation of the 2022 Compensation Distribution Plan for Directors, Supervisors and Senior Executives | |||
| Remuneration and Appraisal Committee | Wang Xiaohua, Liu Shuwei, and Zhang Wei | December 12, 2023 | Deliberation of Suggestions on the Highest Compensation for Senior Executives of the Company |
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors has identified any risks in the Company during its supervision activities during the reportperiod
□ Yes ?No
The Board of Supervisors has no objection to the supervision matters during the report period.
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IX. The Company's staff
1. Number of employees, their specialties and education level
| Number of on-the-job employees of the parent company at the end of the report period (person) | 20,259 |
| Number of on-the-job employees of the main subsidiaries at the end of the report period (person) | 52,351 |
| Total number of on-the-job employees at the end of the report period (person) | 72,610 |
| Total number of employees receiving salaries for the current period (person) | 72,610 |
| Number of retired employees for whom the parent company and main subsidiaries need to bear expenses (person) | 435 |
| Specialties | |
| Category of specialties | Number (person) of employees of specialties |
| Manufacturing personnel | 50,292 |
| Sales personnel | 2,528 |
| Technician | 15,282 |
| Financial personnel | 1,115 |
| Administrative personnel | 3,393 |
| Total | 72,610 |
| Educational level | |
| Education level category | Number of employees (person) |
| Bachelor’s degree or above | 16,507 |
| College degree | 12,894 |
| Technical secondary school and below | 43,209 |
| Total | 72,610 |
2. Remuneration policy
Faced with the uncertainty and complexity of the macroeconomic environment, the Company attached great importance toand safeguards the vital interests of employees, optimized and adjusted compensation plans, and continuously improved theposition-based and performance-oriented compensation mechanism. At the same time, the Company focused on high-qualitytalents and continued to implement a project-based technology talent evaluation mechanism to motivate technology personneland R&D technology breakthroughs, deepen the reform of the salary system, build a career development channel foremployees, form a reasonable, flexible, and effective salary system, optimize the construction of the talent pool, and promotethe improvement of organizational efficiency.
3. Training plan
(1) Adhere to lifelong learning management and strive to build talent highland
Firstly, it is necessary to widely cultivate talents of universal applicability. Normalized company-wide open courses androutine learning sessions for grassroots management leaders were implemented. More than 100 public seminars wereorganized throughout the year, attracting nearly 4,000 participants, solidly promoting the inheritance of managementexpertise, sharing of R&D technologies, and enhancing professional competencies. The four-level training linkage
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mechanism of company, department, division, and individual was systematically promoted, and learning activities at alllevels were organized and carried out. About 7,400 special training sessions were organized and more than 400,000 peopleparticipated throughout the year. Second, it is necessary to strengthen key groups. The "Pioneer" talent training project wasorganized and carried out, training 270 grassroots management personnel; a fresh graduate training camp was carried out toprovide comprehensive and multi-level training support for nearly 800 fresh graduates. After the epidemic, the resumption ofthe fresh graduate onboarding ceremony for the first time has received attention and praise from all levels. Third, it isnecessary to train highly skilled personnel vigorously. The Company persisted in carrying out the "Foundation ConsolidationProject" aimed at elevating job-specific skills. Through master-apprentice programs led by renowned mentors, assessmentand certification processes, and skill competitions, a total of 79 batches of new staff orientation training and base supporttraining were conducted, involving 4,867 individuals. Additionally, 29 skill contests were held, engaging nearly 1,000employees, and specialized training for over 1,400 personnel was organized. This approach realized standardized job training,routine professional development, and competitive skill enhancement. The Company focused on promoting the "StrongFoundation Project" for highly skilled talents, relying on the construction of national-level highly skilled talent training basesto overcome difficulties, actively coordinate resources, closely monitor nodes, efficiently promote, and annually cultivatemore than 1,500 highly skilled talents; at the same time, it took this opportunity to promote the upgrading and transformationof the employee training center, solve the long-standing common aspiration, and fully realize the maximum benefits. TheCompany utilized platforms such as skilled master studios and technician workstations to establish a skilled talent trainingsystem, connect the development channels of skilled talents, and focus on building a highly skilled talent team with a"reasonable structure, strong skills, sufficient quantity, and excellent quality", thereby enhancing the Company's industrialcompetitiveness.
(2) Adhere to the ability to empower people, cultivate people, and steadily promote the construction of talentsFirst, ideological and political education is vividly implemented. The Company adhered to the guidance of political ideology,actively practiced the core values of Chinese socialism, promoted advanced corporate culture, served the overall developmentof the enterprise, and worked hard to cultivate industrial workers with moral integrity and talent for the new era. It organizedand carried out special training courses for young entrepreneurs in Zhuhai and training courses for the Company's Partymembers and leaders, further enhancing the ideological realm and political consciousness of "learning and implementing the20th National Congress, being the pioneer in the industry". It organized and carried out special education on "learning fromthe spirit of Lei Feng, becoming a helpful person", special education on "protecting the market during the peak season",national defense education month activities, ideological education on the "Young Eagle Plan" for fresh graduates, and specialeducation on "learning from models, striving for being advanced, creating excellent achievements, and making newachievements". Efforts were being made to implement the guiding ideology of "raising the flag, gathering people's hearts,nurturing new talents, promoting culture, and showcasing image" and achieve results. Second, Party building is efficientlypromoted. The Company actively took the initiative, bravely explored and innovated, carefully designed and produced aspecial issue on Party building, highlighted the style of Party spirit, and created a Party building brand. The Companycompleted the production of Party building promotional videos and microfilms, updated and improved the Party buildingcorridor and column in the Company's science and technology exhibition hall, established a propaganda platform, and createda demonstration window, to fully display the image and style of "National Advanced Grassroots Party Organization." Third,veteran service is actively advanced. The Company emphasized both business management and social responsibility andworked hard to solidly promote the service work for retired soldiers with dedication and emotion. The Company's VeteransService Center was officially established to create connections, actively solve difficulties, and promote Party policies, therebydriving the development of the enterprise. It was awarded the first batch of "socialized army-supporting enterprises" in Chinaand a member unit of the Guangdong Province "Veterans Employment and Entrepreneurship Service Alliance."
(3) Adhere to the market service after sales and actively build a talent system
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First, domestic after-sales training has been fully promoted. The Company fully supported the after-sales training work ofnational sales companies, with the aim of "linking training and innovation mechanisms, integrating resources for targetedtraining". Through organizing the 9th "Journey of Best Products ? Building the Future" technical training camp, the "KeepingWarning and Bearing Safety in Mind" peak season safety activities, and precise online and offline special training activitiescovering different product series, more than 540,000 domestic after-sales training personnel were completed, achievinghierarchical and precise levels. Second, overseas after-sales training has made a strong comeback. The Company assisted inpromoting the sales of its products, meeting the needs of overseas customers, and supporting the resolution of after-salestechnical problems. It adopted a model of "remote training + factory training + factory return training", and completed a totalof 99 overseas customer training needs online and offline through a combination of "theoretical teaching/practicaltraining/engineering support/market promotion". More than 700 after-sales training sessions were organized, achieving asignificant increase in the number of overseas remote training, normal resumption of factory training, and breakthrough inzero factory return training, enhancing the influence of the Gree brand in overseas regions. Third, the system construction hasbeen optimized and improved constantly. The Company gradually established a sound after-sales training system to ensurethe orderly implementation of after-sales training management work. By establishing lecturer resources, 32 qualified after-sales key members were included in the lecturer library, supporting the continuous improvement of 89 after-sales first levellecturers, constructing new training platform resources, promoting the launch of customized functions for five batches,updating nearly 300 after-sales technical courses, and activating accounts exceeding 60,000; at the same time, it strengthenedthe management and supervision of after-sales training through the point based system.
4. Labor outsourcing
□ Applicable ?Not Applicable
X. Profit distribution and conversion of capital reserves into share capital by theCompanyProfit distribution policy during the report period, especially the formulation, implementation or adjustment of the cashdividend policy?Applicable □ Not applicableOn June 30, 2023, the Company's 2022 annual general meeting of shareholders approved the 2022 Profit Distribution Plan.Based on the total share capital of the Company, which was 5,631,405,741 shares, after deducting the number of shares in therepurchase account, which was 17,564,128 shares, a cash dividend of RMB10 (tax inclusive) was distributed to allshareholders for every 10 shares. No bonus shares were given, and no capital was converted from capital reserves. A total ofRMB5,613,841,613 in cash dividends was distributed. The plan was completed on August 9, 2023.The cash dividend distribution proportion of the Company since its listing is in line with the provisions of the Articles ofAssociation of Gree Electric Appliances, Inc. of Zhuhai and cash dividend distribution policy of the Company is in line withthe provisions of laws and regulations such as the Articles of Association of Gree Electric Appliances, Inc. of Zhuhai and therequirements of the resolutions of the general meeting of shareholders. The criteria for dividend distribution and the dividenddistribution ratio are clear and unambiguous, the relevant decision-making procedures and mechanisms are complete, and theindependent directors have performed their duties and responsibilities with due diligence and have played their roles.Minority shareholders have adequate opportunities to express their opinions and demands on profit distribution, and thelegitimate rights and interests of minority shareholders are fully protected.
| Special description of cash dividend policy | |
| Whether to comply with the provisions of the Articles of Association or the requirements of the general meeting's | Yes |
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| resolutions: | |
| Whether the dividend criteria and ratio are clear and unambiguous: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether the independent directors perform their duties and play their due roles: | Yes |
| If the Company does not distribute cash dividends, specific reasons should be disclosed, as well as the measures to be taken next to enhance investor returns: | Not applicable |
| Whether the minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests are adequately protected: | Yes |
| Whether the conditions and procedures are compliant and transparent if the cash dividend policy is adjusted or changed: | Yes |
The Company is profitable during the report period and the parent company has positive profit available for distribution toshareholders but no cash dividend distribution plan has been proposed.
□ Applicable ?Not Applicable
Profit distribution and conversion of capital reserves into share capital in the report period?Applicable □ Not applicable
| Number of dividend shares per ten shares (shares) | 0 |
| Dividends per 10 shares (yuan) (tax inclusive) | 23.8 |
| Number of shares converted per ten shares (shares) | 0 |
| Share capital base for the distribution plan (shares) | 5,521,943,646 |
| Cash dividends (yuan) (tax inclusive) | 13,142,225,877.48 |
| Amount of cash dividends by other means (e.g. share repurchase) (yuan) | 2,999,997,275.61 |
| Total cash dividends (including other methods) (yuan) | 16,142,223,153.09 |
| Distributable profits (yuan) | 71,086,199,251.37 |
| Proportion of total cash dividends (including other methods) to total profit distribution | 100% |
| Current cash dividend | |
| If the Company is in a maturity stage and there are no significant capital expenditure arrangements, the cash dividends in the current profit distribution shall account for at least 80% of the profit distribution | |
| Detailed description of plan for profit distribution or conversion of capital reserves into share capital | |
| With the total share capital of 5,521,943,646 shares (deducting 109,462,095 shares in the Company's repurchase account from the total share capital of 5,631,405,741 shares) entitled to profit distribution rights at the time of disclosure of this profit distribution plan, the Company plans to distribute a cash dividend of RMB23.8 per 10 shares to all shareholders (tax inclusive), without bonus shares or conversion of capital reserves into share capital, totaling RMB13,142,225,877.48 of cash shares distributed, and the remaining undistributed profits will be carried forward for distribution in future years. If there is a change in the total share capital of the Company entitled to profit distribution from the date of disclosure of the distribution plan to the date of implementation of equity distribution registration, the Company will adjust the total dividend amount accordingly based on the principle of keeping the distribution ratio per share unchanged. | |
XI. Implementation of the Company's equity incentive plan, employee stock ownershipplan, or other employee incentive measures?Applicable □ Not applicable
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1. Equity incentive
Not applicableEquity incentives received by directors and senior executives of the Company
□ Applicable ?Not Applicable
Appraisal mechanism and incentives of senior executivesNot applicable
2. Implementation of employee stock ownership plan
?Applicable □ Not applicableAll valid employee stock ownership plans during the report period
| Scope of Employees | Number of Employees | Total Number of Shares Held (Shares) | Changes | Proportion to the total share capital of listed companies | Source of funding for implementation of the plan |
| Employee Stock Ownership Plan Phase I | 4,513 | 46,334,473 | During the report period, due to the rescission or termination of labor relations between some holders and the Company, they no longer qualified for the employee stock ownership plan, resulting in changes in the total number of holders and the shares held by some holders. On November 27, 2023, the meeting of the Employee Stock Ownership Plan Phase I was held, and the Proposal on the termination of the Employee Stock Ownership Plan Phase I was reviewed and approved. The Employee Stock Ownership Plan Phase I was terminated prematurely, and the holder continues to fulfill their voluntary commitment not to sell or set up pledges on their own during the lockup period. | 0.82% | Legal remuneration of employees and self-financing funds obtained through other means as permitted by laws and administrative regulations |
| Employee Stock Ownership Plan Phase II | 3,170 | 77,163,880 | None | 1.37% | Legal remuneration of employees and self-financing funds obtained through other means as permitted by laws and administrative regulations |
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Shareholdings of Directors, Supervisors and senior executives in the employee stock ownership plan during the report period
| Name | Title | Number of Shares Held at the Beginning of the Period (Shares) | Number of Shares Held at the End of the Period (Shares) | Proportion to the total share capital of listed companies |
| Dong Mingzhu | Chairperson & President | 10,000,000 | 46,310,000 | 0.82% |
| Zhang Wei | Director and Secretary of the Party Committee | 183,328 | 300,000 | 0.01% |
| Deng Xiaobo | Director, Vice President, Secretary of the Board of Directors | 107,600 | 300,000 | 0.01% |
| Wang Fawen | Employee representative supervisor | 51,355 | 30,000 | 0.00% |
| Zhuang Pei | Vice President | 420,253 | 300,000 | 0.01% |
| Tan Jianming | Vice President and Chief Engineer | 488,469 | 200,000 | 0.00% |
| Shu Lizhi | Vice President | 99,719 | 115,000 | 0.00% |
| Fang Xiangjian | Vice President | 391,890 | 250,000 | 0.00% |
| Liao Jianxiong | Finance Chief, President Assistant | 77,663 | 230,000 | 0.00% |
Changes in asset management units during the report period
□ Applicable ?Not Applicable
Changes in equity during the report period due to disposal of shares by holders, etc.?Applicable □ Not applicable
1. During the report period, due to the rescission or termination of labor relations between some holders and the Company, inaccordance with the provisions of the draft of the Employee Stock Ownership Plan Phase I of Gree Electric Appliances, Inc.of Zhuhai, their equity was sold by the management committee at the discretion of the management committee, and theoriginal capital contribution corresponding to the disposal amount was returned to the holders. The remaining income (if any)was enjoyed by the holders of the employee stock ownership plan.
2. On February 3, 2023, the Company transferred 77,163,880 shares to the "Employee Stock Ownership Plan Phase II ofGree Electric Appliances, Inc. of Zhuhai" special account through a non-trading transfer method in the repurchase specialsecurities account.Exercise of shareholders' rights during the report periodDuring the report period, both Phase I and Phase II employee stock ownership plans of the Company participated in thevoting of the 2022 annual general meeting of shareholders.Other relevant circumstances and explanations of the employee stock ownership plan during the report period
□ Applicable ?Not Applicable
Change in members of the Employee Stock Ownership Plan Management Committee?Applicable □ Not applicableThe first shareholder meeting of Employee Stock Ownership Plan Phase II was held on March 8, 2023, in the Company'sconference room through a combination of on-site and online voting. The meeting reviewed and approved the Proposal onElecting Members of the Management Committee of Phase II Employee Stock Ownership Plan, and elected Mr. Li Gangfei,Mr. Shao Liguo, and Ms. Zhao Mengmeng as members of the Employee Stock Ownership Plan Management Committee fora term of three years.
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Financial impact of employee stock ownership plan on listed companies and related accounting treatment during the reportperiod?Applicable □ Not applicableIn accordance with the Accounting Standards for Enterprises No. 11 ? Share-based Payments, the total expenses recognizedfor equity settled share-based payments by the Company in 2023 was RMB1,413,200,011.24.Termination of employee stock ownership plan during the report period?Applicable □ Not applicableOn November 27, 2023, the meeting of the Employee Stock Ownership Plan Phase I was held, and the Proposal on thetermination of the Employee Stock Ownership Plan Phase I was reviewed and approved. The Employee Stock OwnershipPlan Phase I was terminated prematurely, and the holder continues to fulfill their voluntary commitment not to sell or set uppledges on their own during the lockup period.Other statements: None
3. Other employee incentive measures
□ Applicable ?Not Applicable
XII. Construction and implementation of the internal control system during the reportperiod
1. Construction and implementation of internal control
The company continued to improve the construction of internal control system and improved the management mechanism ofrules and regulations. The Company regularly reviewed the internal control system and process, and improved and re-improved the system and process. At the same time, the Company strictly implemented the rules and regulations,continuously strengthened compliance management and risk management, and built a perfect internal control system andprocess system.The Company continued to pay attention to and strengthen the control of high-risk areas such as financial management, assetmanagement, capital activities, procurement business, production management, sales business and engineering projects, andeffectively improved the awareness of compliance management and the ability to prevent and control major risks. During thereport period, the Company updated and improved its internal control system promptly in accordance with the provisions ofthe Basic Standard for Enterprise Internal Control and its accompanying guidelines, taking into account changes in theCompany's internal and external environment, internal organization and management requirements.Based on the determination of significant defects in internal control, the Company did not have any significant defects ormaterial defects in internal control in the financial reporting and non-financial reporting in 2023. Through the operation,analysis and evaluation of the internal control system, the Company effectively prevented the risks in operation andmanagement and promoted the achievement of internal control objectives. In the future, the Company will continue to perfectthe internal control system, standardize the implementation of the internal control system, strengthen the supervision andinspection of internal control, and promote the healthy and sustainable development of the Company.
2. Details of significant defects in internal control identified during the report period
□ Yes ?No
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XIII. Management and control of the subsidiaries during the report period
| Company Name | Integration Plan | Integration Progress | Problems During Integration | Solutions Taken | Resolution Progress | Subsequent Resolution Plan |
| None | None | None | None | None | None | None |
XIV. Internal control evaluation report or internal control audit report
1. Internal control evaluation report
| Date of disclosure of the full internal control evaluation report | April 30, 2024 | |
| Index of disclosure of the full internal control evaluation report | CNINFO (http://www.cninfo.com.cn/new/index) | |
| The proportion of the total assets of the units included in the scope of evaluation to the total assets of the Company's consolidated financial statements | 96.00% | |
| The proportion of operating revenue of the units included in the scope of evaluation to the operating revenue of the Company's consolidated financial statements | 97.00% | |
| Defect identification criteria | ||
| Category | Financial statements | Non-financial statements |
| Qualitative standard | For details, please refer to the 2023 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc. of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2024 | For details, please refer to the 2023 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc. of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2024 |
| Quantitative standard | For details, please refer to the 2023 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc. of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2024 | For details, please refer to the 2023 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc. of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2024 |
| Number of significant defects in the financial statements | 0 | |
| Number of significant defects in the non-financial statements | 0 | |
| Number of material defects in the financial statements | 0 | |
| Number of material defects in the non-financial statements | 0 | |
2. Internal control audit report
?Applicable □ Not applicable
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| Based on the determination of significant defects in internal control in the Company's financial report, as of the benchmark date of the internal control evaluation report, there were no significant defects in internal control in the financial report. We believe that the Company has maintained effective internal control in all significant aspects of the financial report in accordance with the requirements of the enterprise's internal control standard system and relevant regulations. | |
| Disclosure of internal control audit report | Disclosure |
| Date of disclosure of full internal control audit report | April 30, 2024 |
| Index of disclosure of the full internal control audit report | CNINFO (http://www.cninfo.com.cn/new/index) |
| Type of internal control audit report opinions | Standard unqualified audit opinion |
| Is there a significant defect in the non-financial statements? | No |
Whether the accounting firm issued a non-standard opinion on the internal control audit report
□ Yes ?No
Whether the internal control audit report issued by the accounting firm is consistent with the opinion of the Board ofDirectors' self-evaluation report?Yes □No
XV. Rectification of self-inspection issues in the special action on governance of listedcompanies
Not applicable
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Section V Environmental and Social Responsibility
I. Major environmental problems
Whether the listed company and its subsidiaries are listed as key pollutant discharge units published by the environmental protection department?Yes □NoEnvironmental protection-related policies and industry standardsDuring the production and operation process, the Company and its subsidiaries strictly complied with the requirements of environmental protection laws and regulations such as theEnvironmental Protection Law of the People's Republic of China, Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution, Law of the People's Republicof China on the Prevention and Control of Water Pollution, Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution, Law of the People's Republic ofChina on Prevention and Control of Environmental Noise Pollution, Law of the People's Republic of China on Prevention and Control of Soil Pollution, and Environmental Impact AssessmentLaw of the People's Republic of China; strictly followed the Discharge Limits of Water Pollutants (DB 44/26-2001), Emission Standard of Volatile Organic Compounds for FurnitureManufacturing Operations (DB44/814-2010), Takeover Criteria of Hefei West Group Wastewater Treatment Plant, Integrated Wastewater Discharge Standards (GB8978-1996), DischargeStandard Water Pollutants for Electroplating (DB 44/1597-2015), Emission Standard of Volatile Organic Compounds for Printing Industry (DB44/815-2010), Emission Limits of AirPollutants (DB44/27-2001), Emission Standard of Air Pollutants for Industrial Kiln and Furnace (GB 9078-1996), Emission Standard of Volatile Organic Compounds for Surface Coating ofAutomobile Manufacturing Industry (DB44/816-2010), Emission Standard of Pollutants for Synthetic Resin Industry (GB 31572-2015), Emission Standards for Odor Pollutants (GB 14554-1993), and other national, local, and related industry environmental protection emission standards.Administrative license for environmental protection
| Company Name | Application Date for the Pollution Discharge Permit | Valid Period | |
| 1 | Gree Electric Appliances, Inc. of Zhuhai | December 22, 2022 | December 21, 2027 |
| 2 | Gree (Hefei) Electric Appliances Co., Ltd. | August 20, 2023 | August 19, 2028 |
| 3 | Zhuhai Landa Compressor Co., Ltd. | October 28, 2022 | October 27, 2027 |
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| 4 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | December 13, 2022 | December 12, 2027 |
| 5 | Zhuhai Kaibang Motor Manufacturing Co., Ltd. | June 19, 2023 | June 18, 2028 |
| 6 | Gree (Zhong Shan) Small Home Appliances Co., Ltd. | June 4, 2020 | June 3, 2025 |
Industry discharge standards and specific situations of pollutant discharge involved in production and business activities
| Name of Company or Subsidiary | Type of Major Pollutant and Particular Pollutant | Name of Major Pollutant and Particular Pollutant | Discharge Method | Number of Discharge Ports | Distribution of Discharge Ports | Discharge Concentration/Intensity | Pollutant Discharge Standard Implemented | Total Discharge | Total Approved Discharge | Excessive Discharge |
| Gree Electric Appliances, Inc. of Zhuhai | Waste water | COD | Intermittent emission | 3 | Phase III sewage station | 48.75 mg/m? | Level III limit in Section II of the Discharge Limits of Water Pollutants (DB44/26-2001) | 5.184 t/year | 23.4 t/year | None |
| Phase IV sewage station | 16 mg/m? | |||||||||
| Phase VI sewage station | 19.75 mg/m? | |||||||||
| Waste water | Ammonia nitrogen | 3 | Phase III sewage station | 1.08 mg/m? | 0.082 t/year | 3.18 t/year | ||||
| Phase IV sewage station | 0.12 mg/m? | |||||||||
| Phase VI sewage station | 0.27 mg/m? | |||||||||
| Waste water | Total nitrogen | 3 | Phase III sewage station | 5.34 mg/m? | 0.517 t/year | 2.4 t/year | ||||
| Phase IV sewage station | 1.82 mg/m? | |||||||||
| Phase VI sewage station | 1.46 mg/m? | |||||||||
| Waste gas | Total VOCs | Organized discharge | 16 | Waste gas vent 02 | 5.8 mg/m? | Discharge limit for section II of Emission Standard of Volatile Organic Compounds for Furniture Manufacturing Operations in Guangzhou (DB44/814-2010) | 16.8734 t/year | 341.02 t/year | ||
| Waste gas vent 03 | 2.95 mg/m? | |||||||||
| Waste gas vent 04 | 14.925 mg/m? | |||||||||
| Waste gas vent 05 | 3.28 mg/m? | |||||||||
| Waste gas vent 06 | 4.04 mg/m? | |||||||||
| Waste gas vent 07 | 2.395 mg/m? | |||||||||
| Waste gas vent 08 | 22.05 mg/m? | |||||||||
| Waste gas vent 09 | 5.33 mg/m? |
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| Waste gas vent 12 | 9.55 mg/m? | |||||||||
| Waste gas vent 15 | 28.5 mg/m? | |||||||||
| Waste gas vent 16 | / (Stop production) | |||||||||
| Waste gas vent 17 | 4.93 mg/m? | |||||||||
| Waste gas vent 18 | 14.89 mg/m? | |||||||||
| Waste gas vent 20 | 4.15 mg/m? | |||||||||
| Waste gas vent 21 | 12.8 mg/m? | |||||||||
| Waste gas vent 22 | 3.23 mg/m? | |||||||||
| Gree (Hefei) Electric Appliances Co., Ltd. | Waste water | COD | Intermittent emission | 2 | Domestic sewage station | 13 mg/L | Takeover criteria of Hefei West Group Wastewater Treatment Plant and Level III criteria of Integrated Wastewater Discharge Standard (GB8978-1996) | 0.5153 t/year | 16.9246 t/year | None |
| Commercial sewage station | 27 mg/L | |||||||||
| Waste water | NH3-N | 2 | Domestic sewage station | 0.05 mg/L | 0.0173 t/year | 1.69546 t/year | ||||
| Commercial sewage station | 9.46 mg/L | |||||||||
| Waste water | TN | 2 | Domestic sewage station | 3.85 mg/L | 0.1056 t/year | 2.4178 t/year | ||||
| Commercial sewage station | 10.11 mg/L | |||||||||
| Zhuhai Landa Compressor Co., Ltd. | Waste water | Total zinc | Continuous emission | 1 | Area C sewage station | 0.176 mg/L | Discharge Standard Water Pollutants for Electroplating (DB 44/1597-2015) Table 2 Pearl River Delta Emission Limits Corresponding to 200% | 0.0376 t/year | 0.29 t/year | None |
| Waste water | Total nickel | Intermittent emission | 1 | Workshop wastewater pre-treatment discharge outlet (Area C) | 0.018 mg/L | 0.0003 t/year | 0.015 t/year | |||
| Waste gas | Total VOCs | Organized discharge | 6 | Electrophoresis drying waste gas vent 1 | 3.66 mg/m? | Emission Standard for Volatile Organic Compounds for Printing Industry (DB44/815-2010) Emission Standard for Volatile Organic Compounds in Furniture Manufacturing Industry (DB44/814-2010) Emission Limits for Air Pollutants (DB44/27-2001) Emission Standard of Volatile Organic Compounds for Printing Industry (GB 9078-1996)Emission Standard of Volatile Organic | 1.207 t/year | 2023 Pollutant Discharge Permit Approval: A total of 2.49 t/year of VOCs from electrophoresis drying waste gas, painting | ||
| Electrophoresis drying waste gas vent 2 | 6.16 mg/m? | |||||||||
| Painting waste gas vent 1 | 5.55 mg/m? | |||||||||
| Painting waste gas vent 2 | 3.26 mg/m? | |||||||||
| Painting waste gas vent 3 | 1.24 mg/m? | |||||||||
| Painting room waste gas vent | 19.76 mg/m? |
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| Compounds for Printing Industry (GB 9078-1996) Emission Standard of Volatile Organic Compounds for Surface Coating of Automobile Manufacturing Industry (DB44/816-2010) Emission Standard of Pollutants for Electroplating (GB 21900-2008) | waste gas, and tooling coating painting room waste gas | |||||||||
| 7 | Screen printing waste gas vent | / (Stop production) | 0.373 t/year | The pollutant discharge permit in 2023 is not approved | ||||||
| Injection molding waste gas vent | 1.79 mg/m? | |||||||||
| Hydrocarbon cleaning discharge outlet | 1.8 mg/m? | |||||||||
| Cleaning drying waste gas vent 1 | 1.44 mg/m? | |||||||||
| Cleaning drying waste gas vent 2 | 1.94 mg/m? | |||||||||
| Cleaning drying waste gas vent 3 | 1.56 mg/m? | |||||||||
| Dip coating waste gas vent | 2.67 mg/m? | |||||||||
| Zhuhai Kaibang Motor Manufacturing Co., Ltd. | Waste water | pH value | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 7.65 mg/L | Level I criteria of maximum allowable discharge concentration of class II pollutants (section II) in Discharge Limits of Water Pollutants (DB 44/26-2001) in Guangdong | / | The pollutant discharge permit in 2023 is not approved | None |
| Waste water | Chromaticity | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 5 | / | ||||
| Waste water | Suspended matter | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 4 mg/L | 0.1032 t/year | ||||
| Waste water | Chemical oxygen demand | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 9 mg/L | 0.0212 t/year | ||||
| Waste water | Five-day biochemical oxygen demand | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 0.6 mg/L | 0.0016 t/year | ||||
| Waste water | Phosphate | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 0.175 mg/L | 0.0005 t/year | ||||
| Waste water | Ammonia nitrogen | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 0.058 mg/L | 0.0002 t/year | ||||
| Waste water | Total nitrogen | Intermittent emission | 1 | Industrial sewage discharge outlet WS- | 2.485 mg/L | 0.0065 t/year |
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| 39214A | |||||||
| Waste water | Petroleum | Intermittent emission | 1 | Industrial sewage discharge outlet WS-39214A | 0.06 mg/L | 0.0002 t/year | |
| Waste gas | Particulate matter | Organized discharge | 2 | Die-casting waste gas vent FQ-39214A | ＜20 mg/m? | Emission limits of atmospheric pollutants from process waste gas (Section II) in Emission Limits of Air Pollutants (DB 44/27-2001) in Guangdong | / |
| Melting aluminum waste gas vent FQ-39214A1 | ＜20 mg/m? | ||||||
| Waste gas | Sulfur dioxide | Organized discharge | 2 | Die-casting waste gas vent FQ-39214A | ND | / | |
| Melting aluminum waste gas vent FQ-39214A1 | ND | ||||||
| Waste gas | Nitrogen oxide | Organized discharge | 2 | Die-casting waste gas vent FQ-39214A | 11.5 mg/m? | 0.1372 t/year | |
| Melting aluminum waste gas vent FQ-39214A1 | ND | ||||||
| Waste gas | Benzene | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | 0.005 mg/m? | Emission limits of VOCs in Emission Standard of Volatile Organic Compounds for Surface Coating of Automobile Manufacturing Industry (DB 44/816-2010) in Guangdong | 0.00009 t/year |
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | ND | |||||
| Waste gas | Toluene + Xylene | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | 0.165 mg/m? | 0.0401 t/year | |
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | 11.5 mg/m? | |||||
| Waste gas | Particulate matter | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | ＜20 mg/m? | / | |
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | ＜20 mg/m? | |||||
| Waste gas | Nitrogen oxide | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | ND | Emission limits of VOCs in Emission Standard of Volatile Organic Compounds for Surface Coating of Automobile Manufacturing Industry (DB | / |
| 1 | Industrial products center dip coating waste gas vent | ND |
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| FQ-39214G | 44/816-2010) in Guangdong | |
Waste gas
| Waste gas | Sulfur dioxide | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | ND | / | ||||
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | ND | ||||||||
| Waste gas | NMHC | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | 1.145 | 0.0100 t/year | ||||
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | 1.84 | ||||||||
| Waste gas | Ringelman emittance | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | <1 (grade) | <1 (grade) | ||||
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | <1 (grade) | ||||||||
| Waste gas | Total VOCs | Organized discharge | 1 | Dip coating waste gas vent FQ-39214B | 26.5 mg/m? | 0.0695 t/year | ||||
| 1 | Industrial products center dip coating waste gas vent FQ-39214G | 8.4 mg/m? | ||||||||
| Gree (Zhong Shan) Small Home Appliances Co., Ltd. | Waste gas | Benzene | Organized discharge | 4 | Organized waste gas FQ-11860 after-treatment monitoring port | ND | Emission Standard of Pollutants for Synthetic Resin Industry (GB 31572-2015) Table 9 Enterprise boundary air pollutant concentration limits and local standards of Guangdong Province the one with stricter concentration limits for unorganized emissions monitoring in section II of the Emission Limits of Air Pollutants (DB 44/27-2001); | 0.5183 t/year | The pollutant discharge permit in 2023 is not approved | None |
| Organized waste gas FQ-11859 after-treatment monitoring port | ND | |||||||||
| Organized waste gas FQ-008199 after-treatment monitoring port of waste gas treatment equipment | ND | |||||||||
| Organized waste gas FQ-008198 after-treatment monitoring port | ND |
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| Waste gas | Toluene | Organized discharge | 4 | Organized waste gas FQ-11860 after-treatment monitoring port | 9.97 mg/m? | 0.3307 t/year | |
| Organized waste gas FQ-11859 after-treatment monitoring port | 0.03 mg/m? | ||||||
| Organized waste gas FQ-008199 after-treatment monitoring port of waste gas treatment equipment | 0.08 mg/m? | ||||||
| Organized waste gas FQ-008198 after-treatment monitoring port | 0.01 mg/m? | ||||||
| Waste gas | Xylene | Organized discharge | 4 | Organized waste gas FQ-11860 after-treatment monitoring port | 1.37 mg/m? | 0.2688 t/year | |
| Organized waste gas FQ-11859 after-treatment monitoring port | 0.03 mg/m? | ||||||
| Organized waste gas FQ-008199 after-treatment monitoring port of waste gas treatment equipment | 0.12 mg/m? | ||||||
| Organized waste gas FQ-008198 after-treatment monitoring port | ND | ||||||
| Waste gas | VOCs | Organized discharge | 3 | Organized waste gas FQ-11860 after-treatment monitoring port | 22.8 mg/m? | 0.7165 t/year | |
| Organized waste gas FQ-008199 after-treatment monitoring port of waste gas treatment equipment | 0.70 mg/m? |
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| Organized waste gas FQ-008198 after-treatment monitoring port | 0.16 mg/m? | |||||||||
| Waste gas | NMHC | Organized discharge | 1 | Organized waste gas FQ-11859 after-treatment monitoring port | 0.97 mg/m? | 0.5441 t/year | ||||
| Waste gas | Oil fume | Organized discharge | 1 | Monitoring port before oil fume and waste gas treatment (FQ-11865) | 0.6 mg/m? | 0.0001 t/year | ||||
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | Waste gas | Particulate matter | Organized discharge | 3 | North of 2nd floor roof: DA001 | <20 mg/m? | Table 2 Level II Criteria in Section II of Emission Limits of Air Pollutants (DB 44/27-2001) | / | The pollutant discharge permit in 2023 is not approved | None |
| North of 2nd floor roof: DA004 | <20 mg/m? | |||||||||
| North of 2nd floor roof: DA005 | <20 mg/m? | |||||||||
| Waste gas | NMHC | Organized discharge | 1 | South of Building 2 roof: DA002 | 2.14 mg/m? | Table 2 (Section II of emission limits) of the Emission Standards for Volatile Organic Compounds in the Printing Industry (DB44/815-2010): lithography (excluding lithography on metal, ceramics, and glass) and flexographic printing | 0.0925 t/year | |||
| Waste gas | Tin and its compounds | Organized discharge | 2 | South of Building 2 roof: DA002 | 0.00265 mg/m? | Table 2 Level II Criteria in Section II of Emission Limits of Air Pollutants (DB 44/27-2001) | 0.0002 t/year | |||
| South of Building 2 roof: DA003 | 0.00319 mg/m? | |||||||||
| Waste gas | Lead and its compounds | Organized discharge | 1 | South of Building 2 roof: DA003 | 0.002 mg/m? | Table 2 Level II Criteria in Section II of Emission Limits of Air Pollutants (DB 44/27-2001) | 0.00002 t/year | |||
| Waste gas | Ammonia | Organized discharge | 1 | Northwest of Building 1 roof: DA006 | 3.84 mg/m? | Emission Standards for Odor Pollutants (GB 14554-1993) Table 2 Emission Standard Value of Odor Pollutants | 0.1350 t/year | |||
| Waste gas | Sulfuric acid mist | Organized discharge | 1 | Northwest of Building 2 roof: DA007 | 0.2 mg/m? | Table 2 Level II Criteria in Section II of Emission Limits of Air Pollutants (DB 44/27-2001) | 0.0073 t/year | |||
| Waste gas | Hydrogen chloride | Organized discharge | 1 | Northwest of Building 2 roof: DA007 | 72.2 mg/m? | Table 2 Level II Criteria in Section II of Emission Limits of Air Pollutants (DB 44/27-2001) | 0.2612 t/year |
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| Waste gas | Nitrogen oxide | Organized discharge | 1 | Northwest of Building 2 roof: DA007 | 3 mg/m? | Table 2 Level II Criteria in Section II of Emission Limits of Air Pollutants (DB 44/27-2001) | 0.0461 t/year |
| Waste gas | Total volatile organic compounds | Organized discharge | 1 | North of Building 1 roof: DA008 | 2.40 mg/m? | Table 2 (Section II of emission limits) of the Emission Standards for Volatile Organic Compounds in the Printing Industry (DB44/815-2010): lithography (excluding lithography on metal, ceramics, and glass) and flexographic printing | 0.1057 t/year |
| Waste gas | Toluene + Xylene | Organized discharge | 1 | North of Building 1 roof: DA008 | 0.101 mg/m? | 0.0028 t/year | |
| Waste gas | Benzene | Organized discharge | 1 | North of Building 1 roof: DA008 | 0.004 mg/m? | 0.0042 t/year | |
| Waste water | Total nitrogen (N) | Intermittent emission | 1 | Longshan No. 3 Road industrial wastewater WS-124635: DW001 | 0.926 mg/L | Level II Limit in Section II of Discharge Limits of Water Pollutants (DB44/26-2001) | 0.0218 t/year |
| Waste water | Total phosphorus (P) | 0.33 mg/L | 0.0023 t/year | ||||
| Waste water | Ammonia nitrogen (NH3-N) | 0.454 mg/L | 0.0070 t/year | ||||
| Waste water | pH value | 7.1 | / | ||||
| Waste water | Total copper | 0.006 mg/L | 0.0001 t/year | ||||
| Waste water | Suspended matter | 9 mg/L | 0.2469 t/year | ||||
| Waste water | Petroleum | 0.17 mg/L | 0.0073 t/year | ||||
| Waste water | Chemical oxygen demand | 80 mg/L | 0.4820 t/year |
Treatment of pollutants
1. Wastewater pollution prevention and control facilities
The Company and its subsidiaries are equipped with corresponding wastewater treatment facilities and full-time environmental management, operation and monitoring personnel in accordancewith the environmental protection requirements of the construction project. So far, the systems are in normal operation and have been discharged in a stable manner without over-standarddischarge.
2. Waste gas pollution prevention and control facilities
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The waste gas pollution prevention and control facilities of the Company's subsidiaries operated normally, and the indicators of waste gas monitoring were in compliance with national and localemission standards, without over-standard discharge.
3. Solid waste treatment and disposal facilities
The Company implements the classification and collection system of hazardous waste and entrusts the disposal to the unit with the corresponding disposal qualification. General industrial solidwaste are handed over to resource recycling manufacturers for recycling and disposal after being classified in the factory, and there is no illegal disposal.Environment self-monitoring schemeThe Company and its subsidiaries formulate self-monitoring plans in accordance with the requirements of pollutant discharge permits and environmental impact assessment, and entrust third-party qualified testing units to carry out environmental monitoring; online automatic monitoring is adopted for key discharge outlets, and data is uploaded online with local ecological andenvironmental authorities for real-time management.Contingency plan for environmental emergenciesIn order to implement the requirements of the national Measures on Emergency Management of Environmental Emergencies and related laws and regulations, and to ensure environmentalemergencies to be dealt with in a timely, orderly, efficient and appropriate manner, to protect the personal safety of the employees and to reduce property losses, each subsidiary of the Companyformulates an emergency plan for environmental emergencies and reported it to the environmental protection department for filing.
Investment in environmental governance and protection and payment of environmental protection taxes
Unit: RMB10,000
| Company Name | Investment in Environmental Protection and Governance | Environmental Protection Taxes Paid | |
| 1 | Gree Electric Appliances, Inc. of Zhuhai | 473 | 9.06 |
| 2 | Gree (Hefei) Electric Appliances Co., Ltd. | 250 | 0.43 |
| 3 | Zhuhai Landa Compressor Co., Ltd. | 350 | 1.89 |
| 4 | Zhuhai Gree Xinyuan Electronic Co., Ltd. | 70 | 0.15 |
| 5 | Zhuhai Kaibang Motor Manufacturing Co., Ltd. | 300 | 1.02 |
| 6 | Gree (Zhong Shan) Small Home Appliances Co., Ltd. | 72 | 0.42 |
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Measures and effects are taken to reduce carbon emissions during the report period?Applicable □ Not applicableThe Company attaches great importance to energy conservation and emission reduction. With the vision of "making the sky bluer and the earth greener", it has always practiced the developmentconcept of "lucid waters and lush mountains are invaluable assets", actively responded to the national "dual carbon (carbon peaking and carbon neutrality)" strategy, and as a domestic"photovoltaic (storage)" and "zero-carbon source" air conditioner technology leader, committed to promoting clean and low-carbon energy consumption in production and operation and creatinga healthy and green quality life for consumers and society.In recent years, the Company has continuously carried out the inventory of greenhouse gas emissions at the company level, and has continuously implemented carbon reduction measures,including vigorously developing photovoltaic power generation, continuously investing in energy-saving technological transformation, and continuously deepening resource regeneration andrecycling, effectively reducing the Company's total carbon emissions. In 2023, the Company carried out 335 energy-saving technical transformation projects, saving 75.806 million kWh ofelectricity, 836,000 m
of natural gas, and reducing carbon dioxide emissions by 45,042 t.In 2023, the Company used 572 million kWh of nuclear power and 28.06 million kWh of photovoltaic power, and reduced carbon dioxide emissions by 16,003 t, an increase of 9.8% over 2022.Combined with the lithium titanate energy storage cabinet independently developed by Gree for peak shaving and valley filling, 160 MWh of energy storage was invested, and the cumulativepeak shaving was 72 million kWh of electricity.Administrative penalties for environmental problems during the report period
| Name of Company or Subsidiary | Reason for Penalty | Violation | Penalty Results | Impact on the Production and Operation of Listed Companies | The Company's Corrective Measures |
| / | / | / | / | / | / |
Other environmental information that should be disclosedNone.Other environmental-related informationNone.
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II. Social responsibilityIn 2023, Gree Electric Appliances actively fulfilled its responsibilities in environmental protection, social responsibility, and corporate governance, especially in intelligent manufacturing, greeninnovation, and safeguarding the rights and interests of stakeholders, and fulfilled the mission of promoting the sustainable development of the industry. (For details, please refer to the 2023Environmental, Social, and Corporate Governance (ESG) Report published by the Company on CNINFO (http://www.cninfo.com.cn/new/index) on April 30, 2024)III. Consolidation and expansion of achievements in poverty alleviation and rural revitalizationNone
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Section VI Important Matters
I. Fulfillment of commitments
1. Commitments fulfilled by the actual controller(s), shareholders, related parties, acquirers, and the Company within the report period and commitments not yet fulfilled by the endof the report period?Applicable □ Not applicable
| Reason for Commitment | Commitment Party | Commitment Type | Commitment Content | Committed Time | Commitment Period | Fulfillment |
| Commitments in the acquisition report or equity change report | Zhuhai Mingjun Investment Partnership (Limited Partnership) | Share sale restriction commitment | 1. The Transferee commits to lock up all Gree shares acquired as a result of the transfer upon completion of the registration of the transfer and not to transfer them for 36 months from the date of completion of the registration of the transfer; if there are relevant laws and regulations requiring the lock-up period of the transferred shares to exceed the above lock-up period committed by the Transferee, the Transferee agrees to extend the lock-up period of the shares accordingly to comply with the prescribed | December 2, 2019 | January 23, 2023 | Fulfilled |
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| period. 2. Upon completion of this share transfer, the Transferee shall comply with the above share lock-up undertaking for the shares acquired by the Transferee as a result of the share bonus and capital increase of the listed company. | ||||||
| Commitments in the acquisition report or equity change report | Zhuhai Mingjun Investment Partnership (Limited Partnership); Zhuhai Xianying Equity Investment Partnership (Limited Partnership); Zhuhai Yuxiu Investment Co., Ltd. | Maintain independence of listed companies | Letter of Commitment on Maintaining the Independence of Listed Companies: To ensure the independent operation of the listed company after this equity transfer, Zhuhai Mingjun, Zhuhai Xianying, and Zhuhai Yuxiu make the following commitments: (I) To ensure asset independence and completeness of the listed company: 1. To ensure that Gree Electric Appliances will be equipped with the relevant production system, auxiliary production system as well as supporting facilities related to its business operations, have the right to own or | December 2, 2019 | Long-term effective | In progress |
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| under its control shall avoid horizontal competition with Gree Electric Appliances. 4. To ensure that, when the enterprise and other enterprises under its control conduct necessary and unavoidable affiliate transactions with Gree Electric Appliances, the enterprise will conduct fair operation in accordance with the marketization principle and at fair prices, and perform transaction procedures and information disclosure obligations in accordance with relevant laws and regulations and regulatory documents. If any one of the above commitments is violated, the enterprise will be willing to bear all the liabilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | ||||||
| Commitments in the acquisition report or | Zhuhai Mingjun Investment Partnership | Commitment on avoiding horizontal | Letter of Commitment on Avoiding Horizontal | December 2, 2019 | Long-term effective | In progress |
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| equity change report | (Limited Partnership); Zhuhai Xianying Equity Investment Partnership (Limited Partnership); Zhuhai Yuxiu Investment Co., Ltd. | competition | Competition: To avoid horizontal competition with listed company, Zhuhai Mingjun, Zhuhai Xianying, and Zhuhai Yuxiu make the following commitments: 1. The enterprise and other enterprises under its control, the controlling shareholder and actual controller of the enterprise will not engage in the same or similar business with Gree Electric Appliances and its subsidiaries directly or indirectly in the future, so as to avoid possible direct or indirect business competition with Gree Electric Appliances and its subsidiaries. 2. If other enterprises under the control of the enterprise further expand their business scope, the other enterprises under the control of the enterprise will take all possible measures to avoid horizontal competition with Gree Electric Appliances and its |
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| other unrelated third parties. 4. If any one of the above commitments is violated, the enterprise will be willing to bear all the liabilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | ||||||
| Commitments in the acquisition report or equity change report | Zhuhai Mingjun Investment Partnership (Limited Partnership); Zhuhai Xianying Equity Investment Partnership (Limited Partnership); Zhuhai Yuxiu Investment Co., Ltd. | Commitment on standardizing the affiliated transactions | Letter of Commitment on Standardizing the Affiliated Transactions: In order to safeguard the interests of public shareholders and maintain the sustainable and healthy development of the listed company, Zhuhai Mingjun, Zhuhai Xianying, and Zhuhai Yuxiu make the following commitments: 1. To ensure that the future affiliated transactions between the enterprise and other enterprises under its control and Gree Electric Appliances will be fair and conducted in accordance with the normal code of business | December 2, 2019 | Long-term effective | In progress |
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| disclosure obligations of affiliated transactions in accordance with relevant laws, regulations and the Articles of Association; it will not use affiliated transactions to illegally transfer the funds and profits of Gree Electric Appliances or damage the interests of Gree Electric Appliances and affiliated shareholders. 3. To ensure that the enterprise and other enterprises under its control will, in accordance with the provisions of laws, regulations and the Articles of Association, when deliberating affiliated transactions involving the enterprise and other enterprises under its control, effectively abide by the avoidance procedure during the voting on affiliated transactions at the meeting of the board of shareholders or the general meeting of shareholders of Gree Electric Appliances. | ||||||
| Commitments in the acquisition report or | Dong Mingzhu | Maintain independence of listed companies | Letter of Commitment on Maintaining the | December 2, 2019 | Long-term effective | In progress |
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| equity change report | Independence of the Listed Company: To ensure the independent operation of the listed company after this equity transfer, I make the following commitments: (I) To ensure asset independence and completeness of the listed company: 1. To ensure that Gree Electric Appliances will be equipped with the relevant production system, auxiliary production system as well as supporting facilities related to its business operations, have the right to own or use the land, workshop and machines and facilities relating to its business operations as well as the ownership or use right to its trademarks, patent technologies and know-how, and have an independent purchase system of raw materials and sales system of products. 2. To ensure that Gree Electric Appliances has |
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| disclosure obligations in accordance with relevant laws and regulations and regulatory documents. If any one of the above commitments is violated, I will be willing to bear all the liabilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | ||||||
| Commitments in the acquisition report or equity change report | Dong Mingzhu | Avoiding horizontal competition | Letter of Commitment on Avoiding Horizontal Competition: I make the following commitments: 1. I and other enterprises under my control will not engage in the same or similar business with Gree Electric Appliances and its subsidiaries in a direct or indirect manner in the future, so as to avoid possible direct or indirect business competition with Gree Electric Appliances and its subsidiaries. 2. If other enterprises under my control further expand their business scope, the other | December 2, 2019 | Long-term effective | In progress |
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| holding subsidiaries on a fair and reasonable basis or to be transferred to other unrelated third parties. 4. If any one of the above commitments is violated, I will be willing to bear all the liabilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | ||||||
| Commitments in the acquisition report or equity change report | Dong Mingzhu | Standardizing affiliated transactions | Letter of Commitment on Standardizing the Affiliated Transactions: I make the following commitments: 1. To ensure that the future affiliated transactions between me and other enterprises under my control and Gree Electric Appliances will be fair and conducted in accordance with the normal code of business conduct; and that I commit to further standardize affiliated transactions with Gree Electric Appliances and its subsidiaries. 2. I will perform my obligations as a shareholder of Gree | December 2, 2019 | Long-term effective | In progress |
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| Appliances or damage the interests of Gree Electric Appliances and affiliated shareholders. 3. To ensure that I and other enterprises under my control will, in accordance with the provisions of laws, regulations and the Articles of Association, when deliberating affiliated transactions involving me and other enterprises under my control, effectively abide by the avoidance procedure during the voting on affiliated transactions at the meeting of the board of shareholders or the general meeting of shareholders of Gree Electric Appliances. | ||||||
| Commitments in the acquisition report or equity change report | Zhuhai Mingjun Investment Partnership (Limited Partnership) | Other commitments | 1. The Transferee commits that it will maintain the overall stability of the management team of Gree Electric Appliances within the scope of its authority upon completion of the transfer and that there will be no significant changes in the | December 2, 2019 | Long-term effective | In progress |
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| investment and strategic resource introduction for the economic development of Zhuhai, and to promote Gree to make new contributions to the sustainable and healthy economic development of Zhuhai. 4. Zhuhai Mingjun commits to actively exercise the shareholders' voting right at the shareholders' meeting of the listed company involving dividend payment and to urge its nominated directors to vote in favor of the resolution of the Board of Directors on the dividend payment ratio of not less than 50% of the annual net profit of the listed company. | ||||||
| Other commitments | Zhuhai Gree Group Co., Ltd. | Other commitments | During the period of holding shares of Gree Electric Appliances, the Company will fully assume all reasonable expenses and economic losses (if any) incurred by Gree Electric Appliance due to the Company's termination of the Residual Equity | June 14, 2019 | During the period of being a shareholder of Gree Electric Appliances | In progress |
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| Incentive Plan. | |||
| Whether commitments are fulfilled on time | Yes | ||
| If commitments are not fulfilled within the deadline, detail the specific reason for fulfillment failure and the work plan for the next step | Not applicable | ||
2. The Company's assets or projects involve earnings forecast and the report period is still in the earnings forecast period and the Company explains the assets or projects thatachieve the original earnings forecast and the relevant reasons
□ Applicable ?Not Applicable
II. The listed company's non-operating funds occupied by the controlling shareholders and their affiliated parties
□ Applicable ?Not Applicable
No controlling shareholder or its affiliated party occupied non-operating funds of the listed company in the report period of the Company.III. Violation of external guarantees
□ Applicable ?Not Applicable
The Company has no violation of external guarantees during the report period.IV. Statement by the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable ?Not Applicable
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V. Statement by the Board of Directors, Board of Supervisors and independent directors (if any) on the "Non-standard Audit Report"of the accounting firm in the report period
□ Applicable ?Not Applicable
VI. Description of changes in accounting policies, accounting estimates or corrections of significant accounting errors compared to theprevious year's financial statement?Applicable □ Not applicable
1. Changes in major accounting policies and accounting estimate
(1). Changes of major accounting policies
On December 13, 2022, the Ministry of Finance issued the Accounting Standards for Enterprises Interpretation No.16 (hereinafter referred to as "Interpretation No.16"). According to therequirements of the Ministry of Finance, the content of "deferred income tax related to assets and liabilities arising from a single transaction is not applicable to the accounting treatment ofinitial recognition exemption" came into effect on January 1, 2023. According to the relevant requirements, the Company made corresponding changes to the accounting policies, and thischange in accounting policies not had a significant impact on the Company's financial indicators such as total assets, total liabilities, net assets, and net profit.The following shows adjustments to the financial statements at the beginning of the year of the first implementation of the new accounting standard for the first time starting from 2023:
Unit: RMB
| Statement Item | Amount as at December 31, 2022 (before change) | Amount as at January 1, 2023 (after change) | ||
| Consolidated Statements | Company's statement | Consolidated Statements | Company's statement | |
| Non-current assets: | ||||
| Deferred income tax assets | 14,598,866,870.23 | 11,399,848,879.09 | 14,644,877,571.11 | 11,399,848,879.09 |
| Total non-current assets | 99,884,719,906.36 | 68,573,037,866.58 | 99,930,730,607.24 | 68,573,037,866.58 |
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| Total assets | 355,024,758,878.82 | 286,630,030,242.19 | 355,070,769,579.70 | 286,630,030,242.19 |
| Non-current liabilities: | ||||
| Deferred income tax liabilities | 2,225,127,743.74 | 710,194,350.26 | 2,271,138,444.62 | 710,194,350.26 |
| Total non-current liabilities | 36,776,774,049.04 | 28,240,257,442.77 | 36,822,784,749.92 | 28,240,257,442.77 |
| Total liabilities | 253,148,710,864.63 | 229,227,597,889.80 | 253,194,721,565.51 | 229,227,597,889.80 |
| Total liabilities and shareholders' equity | 355,024,758,878.82 | 286,630,030,242.19 | 355,070,769,579.70 | 286,630,030,242.19 |
(2). Changes in major accounting estimates
None.VII. Description of changes in the consolidated statement scope in comparison with the financial statements of last year?Applicable □ Not applicable
1. Business combinations not under common control
① Business combination not under common control in the current period
Unit: RMB
| Name of the Acquiree | Time Point of Equity Acquisition | Equity Acquisition Cost | Equity Acquisition Proportion | Equity Acquisition Method | Acquisition Date |
| Ganzhou Qianjin Real Estate Co., Ltd. | 2023/10/31 | 239,485,900.00 | 90.00% | Purchase by cash | 2023/10/31 |
(Continued)
Unit: RMB
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| Name of the Acquiree | Basis for Determining the Acquisition Date | Operating Income of the Acquiree from the Acquisition Date to the End of the Period | Net Profit of the Acquiree from the Acquisition Date to the End of the Period | Cash Flow of the Acquiree from the Acquisition Date to the End of the Period |
| Ganzhou Qianjin Real Estate Co., Ltd. | Acquisition of control | -804,692.79 | 3,947,533.56 |
② Cost and goodwill of business combination
Unit: RMB
| Cost of business combination | Amount |
| Total cost of business combination | 239,485,900.00 |
| Including: Cash | 239,485,900.00 |
| Less: Fair value of the identifiable net assets acquired | 239,485,903.54 |
| Combination cost less than the share of fair value of identifiable net asset acquired | -3.54 |
③ Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB
| Item | Ganzhou Qianjin Real Estate Co., Ltd. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Assets: | ||
| Monetary funds | 143,501.61 | 143,501.61 |
| Other receivables | 19,819,308.24 | 19,819,308.24 |
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| Inventory | 226,354,123.01 | 226,354,123.01 |
| Other current assets | 19,778,515.52 | 19,778,515.52 |
| Subtotal of assets | 266,095,448.38 | 266,095,448.38 |
| Liabilities: | ||
| Subtotal of liabilities | ||
| Net Assets | 266,095,448.38 | 266,095,448.38 |
| Less: Minority shareholders' equity | 26,609,544.84 | 26,609,544.84 |
| Net assets acquired | 239,485,903.54 | 239,485,903.54 |
④ Gains or losses arising from the remeasurement of equity held before the acquisition date at fair valueNone.
2. Business combination under the same control
None.
3. Reverse purchase
None.
4. Disposal of subsidiaries
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| Name of Subsidiary | Time Point of Losing Control | Disposal Price of the Time Point of Losing Control | Disposal Ratio of the Time Point of Losing Control (%) | Disposal Methods of the Time Point of Losing Control | Basis for Determining the Time Point of Losing Control | The Difference Between the Disposal Price and the Share of the Subsidiaries' Net Assets at the Level of Consolidated Statements Corresponding to the Disposal Investment | Proportion of Remaining Equity on the Date of Losing Control (%) | Book Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Fair Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Gains or Losses Arising from Remeasurement of Remaining Equity at Fair Value | Determination Methods and Main Assumptions of the Fair Value of the Remaining Equity on the Date of Losing Control at the Consolidated Financial Statement Level | Amount of Other Comprehensive Income Related to Equity Investment of the Original Subsidiary Transferred into Investment Profits and Losses or Retained Earnings |
| Tianjin Gree Xinhui Medical Equipment Co., Ltd. | 2023-10-30 | 100.00 | Cancelled | Business registration | None | |||||||
| SL Group Jingu Grain Depot Co., Ltd. | 2023-8-25 | 100.00 | Cancelled | Business registration | None | |||||||
| SL Group Songlin Grain Depot Co., Ltd. | 2023-9-22 | 100.00 | Cancelled | Business registration | None | |||||||
| DunAn Sensing Technology Co., Ltd. | 2023-6-5 | 66.58 | Cancelled | Business registration | None | |||||||
| Jilin Songliang Modern Logistics Developmen | 2023-5-6 | 100.00 | Cancelled | Business registration | None |
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t Co., Ltd.
5. Change of combination scope for other reasons
Newly established entity in the current period:
Unit: RMB
| Company Name | Date of Establishment | Net Assets at the End of the Period | Net Profit from the Combination Date to the End of the Period |
| Hunan DunAn Refrigeration Equipment Co., Ltd. | 2023-2-7 | 22,486,643.44 | 2,486,643.44 |
| Luoyang Herun Real Estate Co., Ltd. | 2023-9-28 | -51,151.68 | -51,151.68 |
| Gree Zero Carbon Source (Shanghai) Technology Co., Ltd. | 2023-10-20 |
VIII. Engagement and disengagement of accounting firms
Accounting firm currently employed
| Name of domestic accounting firm | Union Power Certified Public Accountants (Special General Partnership) |
| Remuneration for the domestic accounting firm (RMB10,000) | 396 |
| Consecutive years for the domestic accounting firm to render audit service | 9 years |
| Name of Certified Public Accountants of the domestic accounting firm | Wu Zihao and Qiu Yiwu |
| Consecutive years for the Certified Public Accountants of domestic accounting firm to render audit service | 2 years and 3 years |
Whether a new accounting firm was hired for the current period
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□ Yes ?No
Engagement of an accounting firm for internal control auditing, financial adviser or sponsor?Applicable □ Not applicableDuring the year, the Company hired Union Power CPAs Co., Ltd. (Special General Partnership) as the accounting firm for internal control audit of the Company.IX. Delisting after disclosure of the Annual Report
□ Applicable ?Not Applicable
X. Matters related to bankruptcy reorganization
□ Applicable ?Not Applicable
The Company was not involved in any matter related to bankruptcy reorganization in the report period.XI. Major legal action or arbitration
□ Applicable ?Not Applicable
The Company was not involved in any major legal action or arbitration for the report period.XII. Punishment and rectification
□ Applicable ?Not Applicable
The Company was not involved in any punishment or rectification during the report period.XIII. Integrity status of the Company and its controlling shareholder(s) and actual controller(s)
□ Applicable ?Not Applicable
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XIV. Significant affiliated transactions
1. Affiliated transactions associated with day-to-day operation
?Applicable □ Not applicable
| Parties to Affiliated Transactions | Association | Type of Affiliated Transaction | Content of Affiliated Transactions | Pricing Principles for Affiliated Transactions | Price of Affiliated Transactions | Amount of Affiliated Transactions (RMB10,000) | Proportion to Amount of Similar Transactions | Approved Transaction Amount (RMB10,000) | Whether it Exceeds the Approved Limit | Settlement Method of Affiliated Transactions | Available Market Price of Similar Transactions | Date of Disclosure | Disclosure Index |
| Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | Companies where directors of the Company act as executive directors and general managers | Sale of goods | Sale of products | Based on the market price, to be determined subject to the negotiation between the two parties | Market price | 588,512.94 | 3.37% | 659,000 | No | Payment before delivery | Market price | April 29, 2023 | Disclosed on CNINFO (http://www.cninfo.com.cn/new/index) on April 29, 2023, announcement number: 2023-012 |
| Henan Shengshi Xinxing Gree Trade Co., Ltd. | Companies where directors of the Company act as executive directors | Sale of goods | Sale of products | Based on the market price, to be determined subject to the negotiation between the two parties | Market price | 467,338.10 | 2.68% | 400,000 | Payment before delivery | Market price | April 29, 2023 | Disclosed on CNINFO (http://www.cninfo.com.cn/new/index) on April 29, 2023, announcement number: 2023-012 | |
| Total | -- | -- | 1,055,851.04 | -- | 1,059,000 | -- | -- | -- | -- | -- | |||
| Details of large-amount sales return | Not applicable | ||||||||||||
| Actual fulfillment (if any) in the report period when the total amount is estimated by category | In fiscal year 2023, the Company expected that the total amount of daily related transactions with the above-mentioned associated parties would not exceed RMB10.59 billion, and the actual amount was RMB10.559 billion, which did not exceed the expected amount. | ||||||||||||
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| for the daily affiliated transaction that will incur in the current period | |
| Cause for the large difference between the transaction price and market reference price (if applicable) | Not applicable |
2. Affiliated transactions of acquisition or sales of assets or equity
□ Applicable ?Not Applicable
The Company was not involved in any affiliated transaction of acquisition or sales of assets or equity in the report period.
3. Affiliated transactions of common foreign investment
□ Applicable ?Not Applicable
The Company was not involved in any affiliated transaction of common foreign investment during the report period.
4. Affiliated credits and liabilities
□ Applicable ?Not Applicable
The Company was not involved in any affiliated credit or liability in the report period.
5. Transactions with finance companies with which the Company with association
□ Applicable ?Not Applicable
There is no deposit, loan, credit or other financial business between the Company and its affiliated financial companies and the affiliated parties
6. Transactions between the financial company under the Company's control and the affiliated parties
□ Applicable ?Not Applicable
There is no deposit, loan, credit or other financial business between the finance company under the Company's control and the affiliated parties.
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VII. Other significant affiliated transactions
□ Applicable ?Not Applicable
The Company was not involved in other significant affiliated transactions during the report period.XV. Significant contracts and their fulfillment
1. Information about trusteeship, contracting and lease
(1) Trusteeship
□ Applicable ?Not Applicable
The Company was not involved in any trusteeship during the report period.
(2) Contracting
□ Applicable ?Not Applicable
The Company was not involved in any contracting matter during the report period.
(3) Lease
□ Applicable ?Not Applicable
The Company was not involved in any lease during the report period.
2. Significant guarantee
?Applicable □ Not applicable
Unit: RMB10,000
| External guarantees by the Company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Object of | Disclosure | Guarantee | Actual Date | Actual | Guarantee | Collateral (if | Counter- | Guarantee | Whether the | Is it a |
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| Guarantee | Date of the Announcement Related to the Guarantee Amount | Amount | of Incurring | Guarantee Amount | Type | any) | guarantee (if any) | Period | Fulfillment is Completed | Guarantee for Affiliated Parties |
| None | ||||||||||
| Total amount of external guarantees approved during the report period (A1) | Total actual amount of external guarantees incurred during the report period (A2) | |||||||||
| Total amount of external guarantees approved at the end of the report period (A3) | Total actual external guarantee balance at the end of the report period (A4) | |||||||||
| Guarantee of the Company to its subsidiaries | ||||||||||
| Object of Guarantee | Disclosure Date of the Announcement Related to the Guarantee Amount | Guarantee Amount | Actual Date of Incurring | Actual Guarantee Amount | Guarantee Type | Collateral (if any) | Counter-guarantee (if any) | Guarantee Period | Whether the Fulfillment is Completed | Is it a Guarantee for Affiliated Parties |
| Nanjing Walsin Metal Co., Ltd. | April 29, 2023 | 1,900,000 | 30,491.14 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | ||
| Zhuhai Gree Green Control Technology Co., Ltd. | April 29, 2023 | 2,735.46 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Nanjing) Electric Appliances Co., Ltd. | April 29, 2023 | 461.06 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree Energy Environment Technology Co., Ltd. | April 29, 2023 | 13,180.66 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
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| Gree (Hangzhou) Electric Appliances Co., Ltd. | April 29, 2023 | 801.73 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree Changsha HVAC Equipment Co., Ltd. | April 29, 2023 | 781.11 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree Mechanical and Electrical Engineering Co., Ltd. | April 29, 2023 | 8,257.28 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree TOSOT (Suqian) Home Appliances Co., Ltd. | April 29, 2023 | 2,948.57 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Anji) Precision Mould Co., Ltd. | April 29, 2023 | 98.3 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Wuhu) Electric Appliances Co., Ltd. | April 29, 2023 | 734.43 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree Intelligent Equipment Co., Ltd. | April 29, 2023 | 27,445.02 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree I Zhuhai Gree Intelligent Equipment Technology Institute Co., Ltd. | April 29, 2023 | 14,698.51 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Wuhan) Electric | April 29, 2023 | 3,022.57 | Pledged | Note pool | None | From the actual date of | No |
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| Appliances Co., Ltd. | guarantee to June 7, 2024 | |||||||||
| Gree (WuAn) Precision Equipment Manufacturing Co., Ltd. | April 29, 2023 | 6,206.91 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree Electric Appliances Intelligent Manufacturing Co., Ltd | April 29, 2023 | 1,426.44 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Chengdu) Electric Appliances Co., Ltd. | April 29, 2023 | 56,354.33 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree Precision Mold Co., Ltd. | April 29, 2023 | 22,988.46 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Kaibang Motor Manufacturing Co., Ltd. | April 29, 2023 | 77.59 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree New Material Co., Ltd. | April 29, 2023 | 4,052.92 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Wuhan) Precision Mould Co., Ltd. | April 29, 2023 | 1,348.87 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Wuhan) Intelligent Equipment Co., Ltd. | April 29, 2023 | 3,241.67 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No |
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| Gree (Linyi) Electric Appliances Co., Ltd. | April 29, 2023 | 6,328.01 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Edgeless Integrated Circuit Co., Ltd. | April 29, 2023 | 200 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Changsha Kinghome Electric Appliances Co., Ltd | April 29, 2023 | 560.3 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gree (Meishan) Electric Enterprises Ltd. | April 29, 2023 | 345.93 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Gedianxincai (Ma'anshan) Technology Co., Ltd. | April 29, 2023 | 1,906.26 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Zhuhai Gree Electronic Components Co., Ltd. | April 29, 2023 | 49,730.54 | Pledged | Note pool | None | From the actual date of guarantee to June 7, 2024 | No | |||
| Total amount of guarantees to subsidiaries approved during the report period (B1) | 1,900,000 | Total amount incurred of guarantees to subsidiaries during the report period (B2) | 260,424.07 | |||||||
| Total amount of guarantees to subsidiaries approved at the end of the report period (B3) | 1,900,000 | Total actual guarantee balance to subsidiaries at the end of the report period (B4) | 260,424.07 | |||||||
| Guarantee of subsidiaries to subsidiaries | ||||||||||
| Object of Guarantee | Disclosure Date of the Announcement Related to the | Guarantee Amount | Actual Date of Incurring | Actual Guarantee Amount | Guarantee Type | Collateral (if any) | Counter-guarantee (if any) | Guarantee Period | Whether the Fulfillment is Completed | Is it a Guarantee for Affiliated Parties |
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| Guarantee Amount | ||||||||||
| Zhejiang DunAn Hetian Metals Co., Ltd. | May 18, 2023 | 50,000 | June 29, 2023 | 10,090 | Joint liability guarantee | 3 years | No | No | ||
| Zhejiang DunAn International Trade Co., Ltd. | April 29, 2023 | 20,000 | Joint liability guarantee | |||||||
| Zhejiang DunAn Artificial Environment Co., Ltd. | October 27, 2023 | 30,000 | November 20, 2023 | 30,000 | Joint liability guarantee | 3 years | No | No | ||
| Zhejiang DunAn Artificial Environment Co., Ltd. | 30,000 | January 3, 2023 | 30,000 | Joint liability guarantee | 3 years | No | No | |||
| Zhejiang DunAn Artificial Environment Co., Ltd. | May 18, 2023 | 20,000 | June 29, 2023 | 20,000 | Joint liability guarantee | 3 years | No | No | ||
| Zhuhai Gree Altairnano Electric Appliance Co., Ltd. | December 29, 2022 | 435,500 | January 5, 2023 | 5,600 | Joint liability guarantee | None | None | From the effective date of the guarantee contract to three years after the date of expiration of the performance period of the debt under the main contract | No | No |
| Zhuhai Guangtong Automobile Co., Ltd., Chengdu | December 29, 2022 | March 12, 2023 | 30,000 | Joint liability guarantee | None | None | The guarantee period is two years from the effective date | No | No |
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| Guangtong Automobile Co., Ltd., and Tianjin Gree Altairnano New Energy Co., Ltd. | of the independent contract to the date of the performance period of the last installment of the debt under the main contract. | |||||||||
| Gree Altairnano New Energy Inc. | December 29, 2022 | March 14, 2023 | 31,900 | Joint liability guarantee | Yes | None | If the main contract is a loan contract, the guarantee period under this contract is three years from the day after the expiration of the loan term under the main contract; if the creditor announces the early due of the loan according to the provisions of the main contract, the guarantee period shall be three years from the day after the early due date of the | No | No |
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| loan. | ||||||||||
| Zhuhai Gree Altairnano Electric Appliance Co., Ltd. | December 29, 2022 | July 18, 2023 | 1,000 | Joint liability guarantee | Yes | None | The creditor's rights guaranteed by the mortgagor are during the period from July 21, 2023, to January 21, 2027 (including the start date and expiration date) | No | No | |
| Gree Altairnano New Energy Inc. | December 29, 2022 | January 18, 2023 | 50,000 | Joint liability guarantee | Yes | None | From January 13, 2023, to January 12, 2028, the creditor's rights were formed by the mortgagee and the debtor's handling of various business agreements. This period is the period for determining the maximum amount of secured debt. | No | No | |
| Gree Altairnano New Energy Inc. | December 29, 2022 | October 11, 2023 | 27,000 | Joint liability guarantee | Yes | None | It is a series of debts under the financing business | No | No |
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| initiated by the debtor through the bank network supply chain "E Xintong" from September 26, 2023, to September 25, 2028. | ||||||||||
| Tianjin Guangtong Automobile Co., Ltd. | December 29, 2022 | January 5, 2023 | 35,000 | Joint liability guarantee | None | None | From the effective date of the guarantee contract to three years after the date of expiration of the performance period of the debt under the main contract | Yes | No | |
| Gree Altairnano New Energy Inc. | December 29, 2022 | January 5, 2023 | 55,000 | Joint liability guarantee | None | None | From the effective date of the guarantee contract to three years after the date of expiration of the performance period of the debt under the main contract. | Yes | No | |
| Gree Altairnano | December 29, | July 16, 2023 | 10,000 | Joint liability | Yes | None | Mortgage right | Yes | No |
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| New Energy Inc. | 2022 | guarantee | and mortgage guarantee debt exist at the same time, and the mortgage right is eliminated after the creditor's rights are paid off. | ||||
| Total amount of guarantees to subsidiaries approved during the report period (C1) | 455,500 | Total amount incurred of guarantees to subsidiaries during the report period (C2) | 335,590 | ||||
| Total amount of guarantees to subsidiaries approved at the end of the report period (C3) | 455,500 | Total actual guarantee balance to subsidiaries at the end of the report period (C4) | 235,590 | ||||
| Total amount of company guarantee (i.e. total of the first three major items) | |||||||
| Total amount of guarantee approved during the report period (A1+B1+C1) | 2,355,500 | Total amount of guarantees incurred during the report period (A2+B2+C2) | 596,014.07 | ||||
| Total amount of approved guarantees at the end of the report period (A3+B3+C3) | 2,355,500 | Total actual guarantee balance at the end of the report period (A4+B4+C4) | 496,014.07 | ||||
| Proportion of actual total guarantees (i.e. A4+B4+C4) to the Company's net assets | 4.25% | ||||||
| Including: | |||||||
| Balance of guarantees provided to shareholders, effective controllers and their affiliated parties (D) | 0 | ||||||
| Debt guarantee balance provided directly or indirectly for guaranteed parties with an debt ratio exceeding 70% (E) | |||||||
| Amount of the total guarantee exceeding 50% of net assets (F) | |||||||
| Total amount of the three guarantees mentioned above (D+E+F) | |||||||
| Explanation (if any) where a guarantee liability or evidence is | Not applicable | ||||||
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| indicating the possibility of assuming joint and several liabilities for unexpired guarantee contracts during the report period | |
| Explanation of external guarantees provided in violation of prescribed procedures (if any) | Not applicable |
Explanation of the specific situation of using composite guaranteeNone
3. Entrusting others to execute any cash asset management
(1) Entrusted financial management
?Applicable □ Not applicableOverview of entrusted financial management during the report period
Unit: RMB10,000
| Specific type | Source of funds for entrusted financial management | Amount incurred by entrusted financial management | Undue balance | Overdue uncollected amount | Impaired amount for overdue uncollected amount |
| Bank financial products | Own funds | 414,355.10 | 414,355.10 | ||
| Trust financial products | Own funds | 432,943.41 | 388,211.06 | ||
| Securities traders' financial products | Own funds | 386,687.68 | 190,889.05 | ||
| Total | 1,233,986.19 | 993,455.21 | |||
Specific situation of high-risk entrusted financial management with large individual amounts or low security and poor liquidity
□ Applicable ?Not Applicable
Expected inability to recover principal or other situations that may lead to impairment in entrusted financial management
□ Applicable ?Not Applicable
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(2) Entrusted loan
□ Applicable ?Not Applicable
The Company was not involved in any entrusted loan during the report period.
4. Other significant contracts
□ Applicable ?Not Applicable
The Company did not enter into any other significant contract during the report period.XVI. Description of other significant matters
□ Applicable ?Not Applicable
There were no other significant matters that needed to be explained during the report period.XVII. Significant matters of the Company's subsidiaries
□ Applicable ?Not Applicable
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Section VII. Changes in Shares and Shareholders
I. Changes in shares
1. Changes in share capital
Unit: share
| Before this change | Increase and decrease of this change (+, -) | After this change | |||||||
| Quantity | Percentage | New issue | Bonus issue | Shares converted from reserved funds | Others | Subtotal | Quantity | Percentage | |
| I. Shares with trading restriction conditions | 39,266,939 | 0.70% | 8,989,182 | 8,989,182 | 48,256,121 | 0.86% | |||
| 1. Shares held by the State | |||||||||
| 2. Shares held by state-owned legal person | |||||||||
| 3. Shares held by other domestic capital | 39,266,939 | 0.70% | 8,989,182 | 8,989,182 | 48,256,121 | 0.86% | |||
| Including: Shares held by domestic legal person | |||||||||
| Shares held by domestic natural person | 39,266,939 | 0.70% | 8,989,182 | 8,989,182 | 48,256,121 | 0.86% | |||
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| 4. Shares held by foreign capital | |||||||||
| Including: Shares held by foreign legal person | |||||||||
| Shares held by foreign natural person | |||||||||
| II. Shares without trading restriction conditions | 5,592,138,802 | 99.30% | -8,989,182 | -8,989,182 | 5,583,149,620 | 99.14% | |||
| 1. RMB common share | 5,592,138,802 | 99.30% | -8,989,182 | -8,989,182 | 5,583,149,620 | 99.14% | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 5,631,405,741 | 100.00% | 0 | 0 | 5,631,405,741 | 100.00% |
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Causes for changes in share capital
□ Applicable ?Not Applicable
Approval of share changes
□ Applicable ?Not Applicable
Transfer of share changes
□ Applicable ?Not Applicable
Effect of share changes on financial indicators such as basic earnings per share, diluted earnings per share and net assets pershare attributable to common shareholders of the Company for the latest year and the latest period
□ Applicable ?Not Applicable
Other contents deemed necessary by the Company or required to be disclosed by the securities regulatory authority
□ Applicable ?Not Applicable
2. Changes in restricted shares
?Applicable □ Not applicable
Unit: share
| Name of Shareholder | Number of Restricted Shares at the Beginning of the Period | Number of Restricted Shares Increased in the Current Period | Number of Restricted Shares Lifted in the Current Period | Number of Restricted Shares at the End of the Period | Reasons for Restriction | Date of Lifting |
| Dong Mingzhu | 33,366,369 | 7,500,000 | 40,866,369 | Senior executive share lockup | - | |
| Zhang Wei | 137,496 | 137,496 | Senior executive share lockup | - | ||
| Deng Xiaobo | 87,450 | 87,450 | Senior executive share lockup | - | ||
| Duan Xiufeng | 335,644 | 117,225 | 452,869 | Senior executive share lockup | - | |
| Wang Fawen | 38,516 | 38,516 | Senior executive share lockup | - | ||
| Zhuang Pei | 4,466,401 | 315,190 | 4,781,591 | Senior executive share lockup | - | |
| Tan Jianming | 972,975 | 366,352 | 1,339,327 | Senior executive share lockup | - | |
| Shu Lizhi | 74,789 | 74,789 | Senior executive share lockup | - | ||
| Liao Jianxiong | 58,247 | 58,247 | Senior executive share lockup | - | ||
| Fang Xiangjian | 125,550 | 293,917 | 419,467 | Senior executive share lockup | - |
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| Total | 39,266,939 | 8,989,182 | 0 | 48,256,121 | -- | -- |
II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the report period
□ Applicable ?Not Applicable
2. Description of changes in the Company's total number of shares and shareholder structure, andasset and liability structure
□ Applicable ?Not Applicable
3. Existing internal employee share
□ Applicable ?Not Applicable
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III. Shareholders and actual controller(s)
1. Number of shareholders and their shareholding status
Unit: share
| Total number of common shareholders at the end of the report period | 613,839 | Total number of common shareholders as of the end of the previous month before the disclosure date of the Annual Report | 507,379 | Total number of preferred shareholders with restored voting rights (if any) at the end of the report period (See Note 8) | 0 | Total number of preferred shareholders with restored voting rights (if any) at the end of the previous month before the disclosure date of the Annual Report (See Note 8) | 0 | |
| Shareholdings of shareholders holding more than 5% of the shares or the top 10 shareholders (excluding shares lent through refinancing) | ||||||||
| Name of Shareholder | Nature of Shareholder | Shareholding Proportion | Number of Shares Held at the End of the Report Period | Increase/Decrease During the Report Period | Number of Shares With Trading Restriction Conditions Held | Number of Shares Without Trading Restriction Conditions Held | Pledge, Tag or Freezing | |
| Share status | Quantity | |||||||
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 16.02% | 902,359,632 | 0 | 0 | 902,359,632 | Pledged | 902,359,632 |
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 10.95% | 616,582,994 | -29,948,233 | 0 | 616,582,994 | 0 | |
| Jinghai Internet Technology Development Co., Ltd. | Domestic non-state-owned legal person | 6.86% | 386,043,038 | 3,121,800 | 0 | 386,043,038 | 0 | |
| Zhuhai Gree Group Co., Ltd. | State-owned legal person | 3.44% | 193,895,992 | 15,430,000 | 0 | 193,895,992 | 0 | |
| China Securities Finance | Domestic non-state-owned legal | 3.19% | 179,870,800 | 0 | 0 | 179,870,800 | 0 | |
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| Corporation Limited | person | |||||||
| Gree Electric Appliances, Inc. of Zhuhai - Employee Stock Ownership Plan Phase II | Others | 1.37% | 77,163,880 | 77,163,880 | 0 | 77,163,880 | 0 | |
| Dong Mingzhu | Domestic natural person | 0.97% | 54,488,492 | 10,000,000 | 40,866,369 | 13,622,123 | 0 | |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Trading Open-end Index Securities Investment Fund | Others | 0.60% | 33,568,621 | 15,005,100 | 0 | 33,568,621 | 0 | |
| Central Huijin Asset Management Co., Ltd | State-owned legal person | 0.47% | 26,291,256 | 0 | 0 | 26,291,256 | 0 | |
| Basic Pension Insurance Fund 15012 Portfolio | Others | 0.40% | 22,465,556 | Unknown | 0 | 22,465,556 | 0 | |
| Situation (if any) where a strategic investor or general legal person becomes one of top 10 shareholders due to placement of new shares (see Note 3) | None | |||||||
| Description of association or concerted action of the above shareholders | Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons acting in concert. Except for that, the Company does not know whether there is an association between the above shareholders or whether they are persons acting in concert. | |||||||
| Description of above-mentioned shareholders’ involvement in entrusting/being entrusted with and waiving voting rights | None | |||||||
| Special note on the existence of | Gree Electric Appliances, Inc. of Zhuhai held 109,462,095 shares in the repurchase special securities account at the end of the report period, with a | |||||||
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| repurchase accounts among the top 10 shareholders (if any) (see Note 10) | shareholding ratio of 1.94%. | ||
| Shareholding of the top 10 shareholders of shares without trading restriction conditions | |||
| Name of Shareholder | Number of shares without trading restriction conditions held at the end of the report period | Type of shares | |
| Type of shares | Quantity | ||
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | 902,359,632 | RMB common share | 902,359,632 |
| Hong Kong Securities Clearing Company Ltd. | 616,582,994 | RMB common share | 616,582,994 |
| Jinghai Internet Technology Development Co., Ltd. | 386,043,038 | RMB common share | 386,043,038 |
| Zhuhai Gree Group Co., Ltd. | 193,895,992 | RMB common share | 193,895,992 |
| China Securities Finance Corporation Limited | 179,870,800 | RMB common share | 179,870,800 |
| Gree Electric Appliances, Inc. of Zhuhai - Employee Stock Ownership Plan Phase II | 77,163,880 | RMB common share | 77,163,880 |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Trading Open-end Index Securities Investment Fund | 33,568,621 | RMB common share | 33,568,621 |
| Central Huijin Asset Management Co., Ltd | 26,291,256 | RMB common share | 26,291,256 |
| Basic Pension Insurance Fund 15012 Portfolio | 22,465,556 | RMB common share | 22,465,556 |
| Agricultural Bank of China Co., Ltd.-Dacheng High-tech Industry Equity Securities Investment Fund | 20,641,701 | RMB common share | 20,641,701 |
| Description of the association or concerted action between the top 10 shareholders of circulating shares without trading restriction conditions, as well as between the top 10 shareholders of circulating shares without trading restriction conditions and the top 10 | Zhuhai Mingjun Investment Partnership (Limited Partnership) and Dong Mingzhu are the persons acting in concert. Except for that, the Company does not know whether there is an association between the above shareholders or whether they are persons acting in concert. | ||
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| shareholders | |
| Description of the participation of the top 10 common shareholders in margin trading and securities lending business (if any) (see Note 4) | None |
Lending shares of the top 10 shareholders participating in refinancing business?Applicable □ Not applicable
Unit: share
| Lending shares of the top 10 shareholders participating in refinancing | ||||||||
| Name of Shareholder (Full Name) | Ordinary Account and Credit Account Holdings at the Beginning of the Period | Shares Lent Through Refinancing at the Beginning of the Period and Not Yet Repaid | Ordinary Account and Credit Account Holdings at the End of the Period | Shares Lent Through Refinancing at the End of the Period and Not Yet Repaid | ||||
| Total Quantity | Proportion to Total Share Capital | Total Quantity | Proportion to Total Share Capital | Total Quantity | Proportion to Total Share Capital | Total Quantity | Proportion to Total Share Capital | |
| Zhuhai Gree Group Co., Ltd. | 178,465,992 | 3.17% | 15,430,000 | 0.27% | 193,895,992 | 3.44% | 0 | 0.00% |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Trading Open-end Index Securities Investment Fund | 18,563,521 | 0.33% | 0 | 0.00% | 33,568,621 | 0.60% | 20,300 | 0.00% |
Changes in the top 10 shareholders compared with the previous period?Applicable □ Not applicable
Unit: share
| Changes in the top ten shareholders from the end of the previous period | |||
| Name of Shareholder (Full Name) | Additions/Exits During the Report Period | Number of Shares Lent Through Refinancing at the End of the Period and Not Yet Repaid | Number of Shares Held by Shareholders in Ordinary Accounts and Credit Accounts and Shares Lent by |
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| Refinancing and Not Yet Returned at the End of the Period | |||||
| Total Quantity | Proportion to Total Share Capital | Total Quantity | Proportion to Total Share Capital | ||
| Gree Electric Appliances, Inc. of Zhuhai - Employee Stock Ownership Plan Phase II | Addition | 0 | 0.00% | 77,163,880 | 1.37% |
| Industrial and Commercial Bank of China Limited - Huatai-PineBridge CSI 300 Trading Open-end Index Securities Investment Fund | Addition | 20,300 | 0.00% | 33,588,921 | 0.60% |
| Central Huijin Asset Management Co., Ltd | Addition | 0 | 0.00% | 26,291,256 | 0.47% |
| Basic Pension Insurance Fund 15012 Portfolio | Addition | 0 | 0.00% | 22,465,556 | 0.40% |
| Foresea Life Insurance Co., Ltd. ? Hai Li Nian Nian | Exit | 0 | 0.00% | Unknown | Unknown |
| Gree Electric Appliances, Inc. of Zhuhai ? Employee Stock Ownership Plan Phase I | Exit | 0 | 0.00% | 0 | 0.00% |
| HHLR Management Pte. Ltd. ? HHLR China Fund | Exit | 0 | 0.00% | 15,445,807 | 0.27% |
| Abu Dhabi Investment Authority | Exit | 0 | 0.00% | 3,363,222 | 0.06% |
Note: Foresea Life Insurance Co., Ltd. - Hai Li Nian Nian's ordinary account and credit account holdings are not among the top 200 of the Company at the end of the yearWhether the top 10 common shareholders and top 10 common shareholders without trading restriction conditions of the Company conducted agreed repurchase transactions in the report period
□ Yes ?No
The top 10 common shareholders and top 10 common shareholders without trading restriction conditions of the Company didn't conduct agreed repurchase transactions in the report period.
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2. The Company's controlling shareholder
Nature of controlling shareholder: No controlling entityType of controlling shareholder: No controlling shareholderDescription of the situation that the Company has no controlling shareholderOn December 2, 2019, Gree Group signed the Share Transfer Agreement Between Zhuhai Gree Group Co., Ltd. and ZhuhaiMingjun Investment Partnership (Limited Partnership) on 15% of the Shares of Gree Electric Appliances, Inc. of Zhuhai,with Zhuhai Mingjun to transfer 902,359,632 shares of the listed company held by Zhuhai Mingjun. After the transaction wascompleted, the single largest shareholder Zhuhai Mingjun and its concerted action person Dong Mingzhu could not passspecific resolutions based on their actual voting rights of the listed company's shares, which was not enough to have asignificant impact on the resolutions of the shareholders' meeting of the listed company, nor could they decide the election ofmore than half of the members of the board of directors of the listed company. Therefore, the listed company had nocontrolling shareholders and actual controllers. For more details, please refer to the Reply to the Inquiry Letter fromShenzhen Stock Exchange disclosed by the Company on CNINFO (http://www.cninfo.com.cn/new/index) on January 18,2020.Change in controlling shareholder during the report period
□ Applicable ?Not Applicable
There was no change in the controlling shareholder of the Company during the report period.
3. Actual controller of the Company and its person acting in concert
Nature of the actual controller: No actual controllerType of the actual controller: No actual controllerDescription of the situation that the Company has no actual controllerOn December 2, 2019, Gree Group signed the Share Transfer Agreement Between Zhuhai Gree Group Co., Ltd. and ZhuhaiMingjun Investment Partnership (Limited Partnership) on 15% of the Shares of Gree Electric Appliances, Inc. of Zhuhai,with Zhuhai Mingjun to transfer 902,359,632 shares of the listed company held by Zhuhai Mingjun. After the transaction wascompleted, the single largest shareholder Zhuhai Mingjun and its concerted action person Dong Mingzhu could not passspecific resolutions based on their actual voting rights of the listed company's shares, which was not enough to have asignificant impact on the resolutions of the shareholders' meeting of the listed company, nor could they decide the election ofmore than half of the members of the board of directors of the listed company. Therefore, the listed company had nocontrolling shareholders and actual controllers. For more details, please refer to the Reply to the Inquiry Letter fromShenzhen Stock Exchange disclosed by the Company on CNINFO (http://www.cninfo.com.cn/new/index) on January 18,2020.Whether there are shareholders with a shareholding ratio of more than 10% at the ultimate control level of the Company?Yes □No?Legal person □ Natural personShareholding at the ultimate control level
| Name of Shareholder at the Ultimate Control Level | Legal Representative/Person in Charge | Date of Establishment | Organization Code | Main Business |
| Zhuhai Mingjun | Zhuhai Xianying | May 11, 2017 | 91440400MA4WJBCR | Business scope |
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| Investment Partnership (Limited Partnership) | Equity Investment Partnership (Limited Partnership) | 4W | recorded in the agreement: Equity investment. (Items that need to be approved in accordance with law can only be operated after approval by relevant departments) | |
| Equity of other domestic and overseas listed companies controlled by the shareholder at the ultimate control level during the report period | None | |||
Change in the actual controller in the report period
□ Applicable ?Not Applicable
There has been no change in the actual controller of the Company during the report period.Block diagram of the property rights and control relationship between the Company and the actual controller
The Company has no actual controller.
The actual controller controls the Company through a trust or other asset management methods
□ Applicable ?Not Applicable
4. The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of theCompany and its persons acting in concert reached 80% of the number of shares held by them in the Company.?Applicable □ Not applicable
| Company Name | Type of Shareholder | Total Amount of Stock Pledge Financing (RMB10,000) | Specific Purpose | Repayment Period | Source of Repayment Funds | Is There a Risk of Debt Repayment or Liquidation | Whether it Affects the Stability of the Control of the Company |
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | The largest shareholder | 1,620,400 | Repayment of original loan | April 30, 2027 | Own funds and self-financing | No | No |
5. Other corporate shareholders holding more than 10% of shares
□ Applicable ?Not Applicable
6. Restrictions on shareholding reduction by controlling shareholder(s), actual controller(s),restructuring parties and other committed entities
□ Applicable ?Not Applicable
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IV. Specific implementation of share repurchase during the report periodProgress of implementation of share repurchase?Applicable □ Not applicable
| Program Disclosure Time | Number of Shares to be Repurchased (shares) | Proportion to Total Share Capital | Proposed Repurchase Amount (RMB10,000) | Proposed Repurchase Period | Repurchase Purpose | Number of Shares Repurchased (shares) | Proportion of Repurchased Shares to the Underlying Stocks Involved in the Equity Incentive Plan (if any) |
| October 31, 2023 | Calculated based on a repurchase price limit of RMB50 per share, not less than 30,000,000 shares and not more than 60,000,000 shares | Not less than 0.53% and not more than 1.07% | Not less than RMB1.5 billion (inclusive) and not more than RMB3 billion (inclusive) | Not more than 12 months from October 30, 2023 | Equity incentive or employee stock ownership plan | 91,897,967 |
Implementation progress of reducing holdings of repurchased shares through centralized bidding
□ Applicable ?Not Applicable
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Section VIII Preferred Share Related Information
□ Applicable ?Not Applicable
The Company did not have any preferred shares during the report period.
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Section IX Bond Related Information
□ Applicable ?Not Applicable
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Section X Financial StatementsI. Audit report
| Type of audit opinion | Standard unqualified opinion |
| Signing date of audit report | April 29, 2024 |
| Name of audit agency | Union Power Certified Public Accountants (Special General Partnership) |
| Document number of audit report | ZHS ZI (2024) No. 0500139 |
| Name of certified public accountant | Wu Zihao and Qiu Yiwu |
Audit report text
Audit Report
ZHS ZI (2024) No. 0500139All shareholders of Gree Electric Appliances, Inc. of Zhuhai:
I. Audit opinionWe have audited the financial statements of Gree Electric Appliances, Inc. of Zhuhai (hereinafter referredto as "your company"), including the Consolidated and Company's Balance Sheets as of December 31,2023, and 2023 Consolidated and Company's Income Statements, 2023 Consolidated and Company's CashFlow Statements and 2023 Consolidated and Company's Statements of Changes in Shareholders' Equityand Notes to Financial Statements.In our opinion, the attached financial statements have been prepared in all material aspects in accordancewith the Accounting Standards for Business Enterprises and fairly reflected the consolidated and yourcompany's financial position of your company as of December 31, 2023, and the consolidated andCompany's operating results and cash flows in 2023.II. Basis for forming audit opinionsWe have conducted our audit work according to the provisions of the Audit Standards for Certified PublicAccountants of China. The part related to "CPA's responsibility for the audit of financial statements" in theaudit report further elaborates our responsibilities under these standards. In accordance with the Code ofEthics for Certified Public Accountants of China, we are independent of your company and perform otherresponsibilities in respect of professional ethics. We believe that the audit evidence obtained by us is
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sufficient and appropriate, providing a basis for expressing our audit opinion.III. Key audit mattersThe key audit matters are the matters that are deemed to be the most important ones in the current financialstatement audit according to our professional judgment. The response to these matters is based on theoverall audit of the financial statements and the formation of audit opinions. We do not give separateopinions on these matters.(I) Accrual of inventory falling price reserves
| Key audit matters | Coping methods |
| Refer to "Note III. 14," "Note V. 11," and "Note V. 66" in the financial statements. As of December 31, 2023, the book value of inventory in your company's consolidated balance sheet was RMB32,579,140,000, wherein the book balance of inventory was RMB37,063,809,400 and the inventory falling price reserves was RMB4,484,669,300. Recognition of the inventory falling price reserves depends on the estimation of the net realizable value of the inventory. For recognition of the net realizable value of the inventory, the management should estimate the future selling price of inventory, the costs (if related) to be incurred until completion, the sales expenses, and the related taxes and fees. In consideration of the importance of recognition of the inventory and inventory falling price reserves to the consolidated financial statements and the complicated calculation process of inventory falling price reserves, and significant judgments, assumptions and estimates of the management involved when the net realizable value of the inventory is determined, there may be error or potential management bias. Therefore, we | 1. Understand, evaluate, and test the effectiveness of the design and execution of internal controls related to the recognition of inventory falling price reserves; 2. Evaluate the significant judgments, assumptions and estimates involved in management's calculation of net realizable value, and review the basis and documents on which management determines the future selling price of the inventory and the costs incurred until completion (if related), the sales expenses and the related taxes and fees; 3. Carry out audit procedures such as inspection and recalculation, especially for the determination of the net realizable value of the inventory, we carried out recalculation according to relevant data; 4. Analyze and review the inventory aging to determine whether the corresponding inventory falling price reserves are sufficient; 5. Supervise the inventory-taking, and during the supervising process, in addition to paying attention to the authenticity and accuracy of the inventory, the focus was also on the usage status of the inventory, whether there was inventory in a stagnant or defective condition, to evaluate the adequacy of the accrual of inventory falling price reserves; 6. Review the adequacy of the disclosure of information |
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| Key audit matters | Coping methods |
| identified it as a key audit matter for your company. | related to inventory falling price reserves in "Note III. 14", "Note V. 11", and "Note V. 66" in the financial statements. |
(II) Revenue recognition
| Key audit matters | Coping methods |
| Please refer to "Note III. 32" and "Note V. 55" in the financial statements. In 2023 and 2022 Consolidated Financial Statements of your company, the revenue from selling goods was RMB203,979,266,400 and RMB188,988,382,700 respectively, an increase of 7.93% year-on-year. Since the amount is significant and revenue is one of the key business indicators of your company, and whether it is based on real transactions and whether it is included in the appropriate accounting period has a significant impact on the financial statements, we consider revenue recognition as a key audit matter. | 1. Understand, evaluate, and test the effectiveness of internal control design and operation related to revenue recognition; 2. Review sales contract samples, understand the delivery terms of the transaction, evaluate whether the business model is consistent with revenue recognition, evaluate whether the sales contract terms comply with industry practices, and whether the revenue recognition accounting policies comply with the requirements of Accounting Standards for Business Enterprises; 3. Check the original supporting documents related to revenue recognition, such as orders, delivery notes, and arrival receipts based on audit sampling, to evaluate whether revenue has truly incurred and whether it has been recognized in accordance with accounting policies; 4. Implement the letter verification procedure and check the original documents and payment status for discrepancies in the response letter to evaluate the accuracy and authenticity of the revenue amount incurred; 5. Carry out an analysis program to analyze from different dimensions such as monthly fluctuations, sales regions, product categories, and product profit margins to verify the reasonableness of the transaction; 6. Carry out cut-off test program and post-test program to check for any revenue intertemporal or sales return to |
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| Key audit matters | Coping methods |
address revenue intertemporal;
7. Review the adequacy of the disclosure of information
related to revenue recognition in "Note III. 32" and"Note V. 55" in the financial statements.
IV. Other informationThe management of your company is responsible for other information. Other information includes theinformation covered in the 2023 Annual Report of your company, excluding the financial statements andour audit reports.Our audit opinions published on financial statements do not cover any other information, and we will notpublish any form of forensic conclusion on other information.In connection with our audit of the financial statements, our responsibility is to read other informationidentified above, and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit, or otherwise appears to be materiallymisstated.Based on the work we have performed, if we determine that there is a material misstatement in otherinformation, we should report that fact. We have nothing to report in this regard.V. Responsibilities of management and governance for financial statementsThe management of your company (hereinafter referred to as the "management") is responsible forpreparing the financial statements in accordance with the requirements of Accounting Standards forBusiness Enterprises to achieve a fair presentation, and for designing, implementing and maintaininginternal control that is necessary to ensure that the financial statements are free from material misstatements,whether due to frauds or errors.When preparing financial statements, the management is responsible for evaluating your company's abilityto continue as a going concern, disclosing matters related to going concern (if applicable), and applying theassumption of going concern, unless the management plans to liquidate your company, cease operations, orhas no other realistic choice.The governance is responsible for overseeing your company's financial reporting process.VI. CPA's responsibilities for the audit of the financial statementsOur objective is to obtain reasonable assurance as to whether the financial statements as a whole are free
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from material misstatements caused by fraud or error, and to issue an audit report containing an auditopinion. Reasonable assurance is a high-level assurance, but is not a guarantee that an audit conducted inaccordance with the audit standards will always detect a material misstatement when it exits. Misstatementsmay be caused by fraud or error and are generally considered material if they are reasonably expected,individually or collectively, to affect the economic decisions made by users of the financial statements.We exercised professional judgment and maintained professional skepticism when conducting the audit inaccordance with the auditing standards. We also:
(I) Identified and assessed the risks of material misstatement of the financial statements, whether due tofraud or error, designed and performed audit procedures responsive to those risks, and obtaineded auditevidence that was sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than the one resulting from error, as fraud may involvecollusion, forgery, omissions, misrepresentations, or the override of internal control.(II) Obtained an understanding of internal control related to the audit in order to design appropriate auditprocedures.(III) Evaluated the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosure made by management of your company.(IV) Concluded on the appropriateness of using the going concern assumption by the management of yourcompany, and concluded, based on the audit evidence obtained, whether a material uncertainty exitedrelated to events or conditions that might cast significant doubt on our company's ability to continue as agoing concern. If we concluded that there was a significant uncertainty, we were required by auditstandards to draw the attention of report users to the relevant disclosures in the financial statements in theaudit report; if such disclosures were inadequate, we should express a non-unqualified opinion. Ourconclusions were based on the information available as of the audit report date. However, future events orconditions may result in your company ceasing to continue as a going concern.(V) Evaluated the overall presentation, structure and content of the financial statements, and evaluatewhether the financial statements fairly reflect relevant transactions and events.(VI) Obtained sufficient and appropriate audit evidence for the financial information of your company'sentity or business activities to express an opinion on the financial statements. We were responsible forguiding, supervising and implementing group audits. We assume full responsibility for the audit opinions.We communicated with the governance regarding, among other matters, the planned audit scope, schedule,
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and major audit findings, including any significant defects in internal control that we identified during ouraudit.We also provided a statement to the governance regarding the observed professional moral requirementsrelated to independence, and communicated with the governance about all the relationships and othermatters that might be reasonably considered to affect our independence, as well as the relatedcountermeasures (if applicable).From the matters discussed with the governance, we have determined which are the most important for theaudit of the current financial statements and therefore constitute key audit matters. We described thesematters in the audit report, unless laws and regulations prohibit public disclosure of these matters, or in rarecases, we determined that the matter should not be communicated in the audit report if it was reasonablyanticipated that the negative consequence caused by communicating a matter in the audit report exceeds thebenefit generated in terms of public interests.
| Union Power Certified Public Accountants (Special General Partnership) | Certified Public Accountant of China: (engagement partner): |
| Wu Zihao | |
| Certified Public Accountant of China: | |
| Qiu Yiwu | |
| Wuhan, China | April 29, 2024 |
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| Consolidated Balance Sheet | |||||
| December 31, 2023 | |||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||
| Item | Note | December 31, 2023 | January 1, 2023 | ||
| Current assets: | |||||
| Monetary funds | V. 1 | 124,104,987,289.62 | 157,484,332,251.39 | ||
| Lending funds | |||||
| Trading financial assets | V. 2 | 9,614,423,403.40 | 3,867,203,363.52 | ||
| Derivative financial assets | V. 3 | 108,919,513.22 | |||
| Notes receivable | V. 4 | 87,340,130.52 | 6,818,428.95 | ||
| Accounts receivable | V. 5 | 16,099,477,117.56 | 14,824,742,623.45 | ||
| Receivables financing | V. 7 | 10,176,089,668.41 | 28,427,310,345.20 | ||
| Advance payments | V. 8 | 2,492,647,395.31 | 2,344,668,845.48 | ||
| Other receivables | V. 9 | 826,558,622.42 | 804,277,958.80 | ||
| Including: Interests receivable | |||||
| Dividends receivable | 19,936,649.83 | 1,260,498.66 | |||
| Buying back the sale of financial assets | V. 10 | 3,932,338,954.49 | |||
| Inventory | V. 11 | 32,579,140,028.70 | 38,314,176,763.90 | ||
| Contract assets | V. 6 | 838,812,133.65 | 1,047,739,817.94 | ||
| Assets held for sale | |||||
| Non-current assets due within one year | V. 12 | 2,411,633,459.29 | 3,314,191,633.19 | ||
| Other current assets | V. 13 | 24,868,941,754.15 | 4,704,576,940.64 | ||
| Total current assets | 228,141,309,470.74 | 255,140,038,972.46 | |||
| Non-current assets: | |||||
| Disbursement of loans and advances | V. 14 | 543,726,609.23 | 719,799,280.27 | ||
| Debt investment | V. 15 | 1,150,744,482.05 | 150,351,500.00 | ||
| Other debt investments | V. 16 | 16,363,841,665.96 | 14,340,348,882.97 | ||
| Long-term receivables | V. 17 | 62,185,327.12 | 116,084,973.52 | ||
| Long-term equity investments | V. 18 | 4,488,967,031.20 | 5,892,290,568.81 | ||
| Other equity instrument investments | V. 19 | 3,864,865,509.37 | 4,669,455,797.90 | ||
| Other non-current financial assets | V. 20 | 4,428,003,204.49 | |||
| Investment real estate | V. 21 | 633,262,161.10 | 634,689,201.98 | ||
| Fixed assets | V. 22 | 34,034,829,116.47 | 33,817,019,391.36 | ||
| Construction in progress | V. 23 | 6,563,911,378.94 | 5,966,678,892.16 | ||
| Usufruct assets | V. 24 | 842,250,508.12 | 207,344,779.05 | ||
| Intangible assets | V. 25 | 10,827,694,521.82 | 11,621,853,071.43 | ||
| Development expenditures | |||||
| Goodwill | V. 26 | 1,452,496,852.11 | 1,659,358,399.03 | ||
| Long-term unamortized expenses | V. 27 | 24,275,474.94 | 22,862,393.90 | ||
| Deferred income tax assets | V. 28 | 16,561,437,021.81 | 14,644,877,571.11 | ||
| Other non-current assets | V. 29 | 42,498,105,445.39 | 1,039,712,699.26 | ||
| Total non-current assets | 139,912,593,105.63 | 99,930,730,607.24 | |||
| Total assets | 368,053,902,576.37 | 355,070,769,579.70 | |||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||
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| Consolidated Balance Sheet (Continued) | |||||
| December 31, 2023 | |||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||
| Item | Note | December 31, 2023 | January 1, 2023 | ||
| Current liabilities: | |||||
| Short-term borrowings | V. 31 | 26,443,476,388.52 | 52,895,851,287.92 | ||
| Borrowings from the central bank | |||||
| Loans from other banks | |||||
| Transaction financial liabilities | |||||
| Derivative financial liabilities | V. 32 | 4,079,919.91 | 184,811,894.98 | ||
| Notes payable | V. 33 | 23,741,128,400.12 | 38,609,900,819.74 | ||
| Accounts payable | V. 34 | 41,147,359,221.95 | 32,856,071,488.87 | ||
| Advance receipts | |||||
| Contract liabilities | V. 35 | 13,588,771,210.88 | 14,972,336,715.45 | ||
| Financial assets sold for repurchase | |||||
| Deposits from customers and interbank | V. 36 | 254,616,899.35 | 219,111,069.61 | ||
| Payroll payable | V. 37 | 4,288,611,386.29 | 3,897,862,091.84 | ||
| Taxes and dues payable | V. 38 | 4,337,631,560.28 | 3,819,424,639.48 | ||
| Other payables | V. 39 | 5,513,266,516.82 | 10,912,406,666.89 | ||
| Including: Interests payable | |||||
| Dividends payable | 5,572,388.92 | 5,620,664,762.67 | |||
| Liabilities held for sale | |||||
| Non-current liabilities due within one year | V. 40 | 20,605,521,073.03 | 255,342,537.57 | ||
| Other current liabilities | V. 41 | 61,058,837,178.77 | 57,748,817,603.24 | ||
| Total current liabilities | 200,983,299,755.92 | 216,371,936,815.59 | |||
| Non-current liabilities: | |||||
| Long-term borrowings | V. 42 | 39,035,742,535.09 | 30,784,241,211.21 | ||
| Bonds payable | |||||
| Including: Preferred share | |||||
| Perpetual bond | |||||
| Lease liabilities | V. 43 | 767,007,951.92 | 146,836,620.66 | ||
| Long-term payables | V. 44 | 27,028,498.30 | 104,644,415.20 | ||
| Long-term payroll payable | V. 45 | 195,057,663.00 | 175,712,728.00 | ||
| Estimated liabilities | |||||
| Deferred income | V. 46 | 3,527,855,598.12 | 3,340,211,330.23 | ||
| Deferred income tax liabilities | V. 28 | 2,871,757,157.58 | 2,271,138,444.62 | ||
| Other non-current liabilities | |||||
| Total non-current liabilities | 46,424,449,404.01 | 36,822,784,749.92 | |||
| Total liabilities | 247,407,749,159.93 | 253,194,721,565.51 | |||
| Shareholders' equity: | |||||
| Share capital | V. 47 | 5,631,405,741.00 | 5,631,405,741.00 | ||
| Other equity instruments | |||||
| Including: Preferred share | |||||
| Perpetual bond | |||||
| Capital reserves | V. 48 | 1,352,522,393.67 | 496,102,011.66 | ||
| Less: Treasury share | V. 49 | 4,942,723,911.44 | 5,643,935,587.86 | ||
| Other comprehensive income | V. 50 | 275,538,293.30 | 2,042,901,605.04 | ||
| Special reserves | V. 51 | 26,969,643.44 | 25,845,351.28 | ||
| Surplus reserves | V. 52 | 1,731,130,024.40 | 2,241,118,692.92 | ||
| General risk provisions | V. 53 | 507,223,117.40 | 507,223,117.40 | ||
| Undistributed profits | V. 54 | 112,211,650,801.62 | 91,458,073,960.81 | ||
| Total equity attributable to shareholders of the parent company | 116,793,716,103.39 | 96,758,734,892.25 | |||
| Minority equity | 3,852,437,313.05 | 5,117,313,121.94 | |||
| Total equity | 120,646,153,416.44 | 101,876,048,014.19 | |||
| Total liabilities and shareholders' equity | 368,053,902,576.37 | 355,070,769,579.70 | |||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||
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| Consolidated Income Statement | |||||||
| January to December, 2023 | |||||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||||
| Item | Note | 2023 | 2022 | ||||
| I. Total operating revenue | 205,018,123,834.21 | 190,150,672,542.13 | |||||
| Including: Operating revenue | V. 55 | 203,979,266,387.09 | 188,988,382,706.68 | ||||
| Interest income | V. 56 | 1,038,856,837.77 | 1,162,289,741.08 | ||||
| Fee and commission income | 609.35 | 94.37 | |||||
| II. Total operating costs | 170,774,052,191.66 | 162,107,253,847.61 | |||||
| Including: Operating costs | V. 55 | 141,625,549,746.95 | 139,784,387,882.78 | ||||
| Interest expense | V. 56 | 126,399,291.44 | 82,118,835.96 | ||||
| Fee and commission expenses | 503,529.63 | 423,034.83 | |||||
| Taxes and surcharges | V. 57 | 2,114,184,492.83 | 1,612,243,409.40 | ||||
| Sales expenses | V. 58 | 17,129,639,682.51 | 11,285,451,112.27 | ||||
| Administrative expenses | V. 59 | 6,542,161,037.82 | 5,267,999,733.62 | ||||
| R&D expenses | V. 60 | 6,762,136,262.23 | 6,281,394,430.40 | ||||
| Financial expenses | V. 61 | -3,526,521,851.75 | -2,206,764,591.65 | ||||
| Including: Interest expenses | 2,962,205,439.75 | 2,836,743,431.08 | |||||
| Interest income | 6,189,969,897.82 | 4,646,747,718.69 | |||||
| Add: Other income | V. 62 | 900,669,135.95 | 879,809,512.05 | ||||
| Income from investments (losses expressed with "?") | V. 63 | 217,156,605.23 | 86,883,941.74 | ||||
| Including: Investment income from joint ventures or associates | 93,222,443.16 | -3,324,287.24 | |||||
| Income from the derecognition of financial assets measured at amortization costs | |||||||
| Income from net exposure hedging (losses expressed with "?") | |||||||
| Income from changes in fair value (losses expressed with "-") | V. 64 | 437,583,988.72 | -343,575,705.11 | ||||
| Credit impairment losses (losses expressed with "?") | V. 65 | -824,045,112.30 | -416,368,773.22 | ||||
| Asset impairment losses (losses expressed with "?") | V. 66 | -2,493,579,694.08 | -966,679,009.51 | ||||
| Income from disposal of assets (losses expressed with "?") | V. 67 | 382,923,791.69 | 608,425.71 | ||||
| III. Operating profits (losses expressed with "?") | 32,864,780,357.76 | 27,284,097,086.18 | |||||
| Add: Non-operating revenue | V. 68 | 128,371,808.52 | 59,810,331.36 | ||||
| Less: Non-operating expenses | V. 69 | 177,448,328.09 | 126,522,574.93 | ||||
| IV. Total profits (total losses expressed with "?") | 32,815,703,838.19 | 27,217,384,842.61 | |||||
| Less: Income tax expenses | V. 70 | 5,096,680,924.60 | 4,206,040,489.50 | ||||
| IV. Net profit (net losses expressed with "?") | 27,719,022,913.59 | 23,011,344,353.11 | |||||
| (I) Classification by business continuity: | |||||||
| 1. Net profits from continuing operations (net losses expressed with "?") | 27,719,217,635.33 | 23,011,552,161.18 | |||||
| 2. Net profits from discontinuing operations (net losses expressed with "?") | -194,721.74 | -207,808.07 | |||||
| (II) Classification by ownership: | |||||||
| 1. Net profits attributable to shareholders of the parent company (net losses expressed with "?") | 29,017,387,604.18 | 24,506,623,782.46 | |||||
| 2. Minority profits and losses (net losses expressed with "?") | -1,298,364,690.59 | -1,495,279,429.35 | |||||
| VI. Net of tax of other comprehensive income | V. 50 | -1,335,306,322.73 | -9,157,870,577.73 | ||||
| (I) Net of tax of other comprehensive income attributable to shareholders of the parent company | -1,353,437,738.42 | -9,161,102,750.23 | |||||
| 1. Other comprehensive income that cannot be reclassified into profits and losses | -1,419,870,672.10 | -9,426,072,167.28 | |||||
| (1) Changes arising from remeasurement of the defined benefit plan | -15,837,466.00 | -8,601,949.00 | |||||
| (2) Other comprehensive income that cannot be transferred to profits and losses under the equity method | -852,472,209.72 | -4,749,379,513.24 | |||||
| (3) Changes in fair value of other equity instrument investments | -551,560,996.38 | -4,668,090,705.04 | |||||
| (4) Changes in fair value of the Company's own credit risk | |||||||
| (5) Others | |||||||
| 2. Other comprehensive income to be reclassified into profits and losses | 66,432,933.68 | 264,969,417.05 | |||||
| (1) Other comprehensive income that can be transferred to profits and losses under the equity method | 160,652.18 | ||||||
| (2) Changes in fair value of other debt investments | 5,646,351.69 | 51,928,741.98 | |||||
| (3) Amount of financial assets reclassified into and included in other comprehensive income | |||||||
| (4) Provision for credit impairment of other debt investments | 2,753,149.69 | -3,667,360.51 | |||||
| (5) Cash flow hedging reserves | 1,650,685.72 | -24,846,643.18 | |||||
| (6) Difference arising from translation of financial statements in foreign currency | 56,222,094.40 | 241,554,678.76 | |||||
| (7) Others | |||||||
| (II) Net of tax of other comprehensive income attributable to minority shareholders | 18,131,415.69 | 3,232,172.50 | |||||
| VII. Total comprehensive income | 26,383,716,590.86 | 13,853,473,775.38 | |||||
| (I) Total comprehensive income attributable to shareholders of the parent company | 27,663,949,865.76 | 15,345,521,032.23 | |||||
| (II) Total comprehensive income attributable to minority shareholders | -1,280,233,274.90 | -1,492,047,256.85 | |||||
| VIII. Earnings per share: | |||||||
| (I) Basic earnings per share (yuan/share) | 5.22 | 4.43 | |||||
| (II) Diluted earnings per share (yuan/share) | 5.22 | 4.43 | |||||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||||
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| Consolidated Cash Flow Statement | |||||
| January to December, 2023 | |||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||
| Item | Note | 2023 | 2022 | ||
| I. Cash flows from operating activities: | |||||
| Cash received from sale of goods or rendering of services | 222,450,716,185.76 | 191,722,692,750.88 | |||
| Net increase in deposits from customers and interbank | 35,681,305.16 | 36,042,751.33 | |||
| Net increase in borrowings from the central bank | |||||
| Net increase in loans from other banks | -300,000,000.00 | ||||
| Cash received for interests, fees and commissions | 404,330,867.02 | 316,385,822.75 | |||
| Net increase in loans from other banks | |||||
| Net increase in repurchase business capital | -746,500,000.00 | ||||
| Refund of taxes and levies | 3,267,420,421.11 | 3,671,277,018.74 | |||
| Other cash received related to operating activities | V. 71 (1) | 2,838,768,145.79 | 3,887,782,462.69 | ||
| Subtotal of cash inflows from operating activities | 228,996,916,924.84 | 198,587,680,806.39 | |||
| Cash payments for goods acquired and services received | 122,277,671,203.25 | 140,307,498,966.97 | |||
| Net increase in customer loans and advances | 3,751,715,000.00 | -3,541,760,000.00 | |||
| Net increase in deposits with central bank and interbank funds | 121,006,301.94 | -142,968,622.64 | |||
| Net increase in lending funds | |||||
| Cash paid for interests, fees and commissions | 126,487,510.44 | 72,151,067.99 | |||
| Cash paid to and on behalf of employees | 11,191,368,139.74 | 10,236,422,672.26 | |||
| Payments of all types of taxes | 17,572,921,744.39 | 12,501,020,989.21 | |||
| Other cash paid related to operating activities | V. 71 (1) | 17,557,320,670.91 | 10,486,879,811.33 | ||
| Subtotal of cash outflows from operating activities | 172,598,490,570.67 | 169,919,244,885.12 | |||
| Net cash flows from operating activities | 56,398,426,354.17 | 28,668,435,921.27 | |||
| II. Cash flows from investment activities: | |||||
| Cash received from the recovery of investment | V. 71 (2) | 21,852,693,438.10 | 6,897,604,278.47 | ||
| Cash received from return on investment | 688,434,561.28 | 96,017,802.71 | |||
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | 1,931,290,335.02 | 22,767,686.65 | |||
| Net cash received from the disposal of subsidiaries and other business units | 35,000,000.00 | 67,258,353.52 | |||
| Other cash received related to investment activities | V. 71 (2) | 24,715,882,326.50 | 3,443,556,899.78 | ||
| Subtotal of cash inflows from investment activities | 49,223,300,660.90 | 10,527,205,021.13 | |||
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 5,425,734,302.92 | 6,036,136,315.75 | |||
| Cash paid for investments | V. 71 (2) | 84,267,244,633.47 | 13,467,910,481.50 | ||
| Net cash paid for acquisition of subsidiaries and other business units | 239,342,398.39 | 2,031,361,368.42 | |||
| Other cash paid related to investment activities | V. 71 (2) | 308,198,670.53 | 26,048,629,646.87 | ||
| Subtotal of cash outflows from investment activities | 90,240,520,005.31 | 47,584,037,812.54 | |||
| Net cash flows from investment activities | -41,017,219,344.41 | -37,056,832,791.41 | |||
| III. Cash flows from financing activities: | |||||
| Cash received from absorbing investment | 32,000,000.00 | ||||
| Including: Cash received from subsidiaries absorbing minority shareholder investments | 32,000,000.00 | ||||
| Cash received from borrowings | V. 71 (3) | 68,622,584,547.14 | 102,926,746,831.03 | ||
| Other cash received related to financing activities | V. 71 (3) | 20,203,186,178.80 | 20,000,000.00 | ||
| Subtotal of cash inflows from financing activities | 88,825,770,725.94 | 102,978,746,831.03 | |||
| Cash repayments of amounts borrowed | V. 71 (3) | 87,009,692,089.60 | 60,908,105,526.39 | ||
| Cash paid for dividend and profit distribution or interest payment | 13,811,350,664.09 | 18,469,103,441.58 | |||
| Including: Dividends and profits paid to minority shareholders by subsidiaries | 111,193,450.56 | 49,000,000.00 | |||
| Other cash paid related to financing activities | V. 71 (3) | 4,362,544,531.09 | 13,678,745,549.95 | ||
| Subtotal of cash outflows from financing activities | 105,183,587,284.78 | 93,055,954,517.92 | |||
| Net cash flows from financing activities | -16,357,816,558.84 | 9,922,792,313.11 | |||
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 136,149,039.88 | 268,517,494.64 | |||
| V. Net increase in cash and cash equivalents | -840,460,509.20 | 1,802,912,937.61 | |||
| Add: Beginning balance of cash and cash equivalents | 31,754,656,695.61 | 29,951,743,758.00 | |||
| VI. Ending balance of cash and cash equivalents | 30,914,196,186.41 | 31,754,656,695.61 | |||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||
Page 161 of 310
| Consolidated Statement of Changes in Shareholders’ Equity | |||||||||||||||
| January to December, 2023 | |||||||||||||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||||||||||||
| Item | 2023 | ||||||||||||||
| Equity attributable to shareholders of the parent company | Minority equity | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk provisions | Undistributed profits | Others | Subtotal | |||||
| Preferred share | Perpetual bond | Others | |||||||||||||
| I. Ending balance of the previous year | 5,631,405,741.00 | 496,102,011.66 | 5,643,935,587.86 | 2,042,901,605.04 | 25,845,351.28 | 2,241,118,692.92 | 507,223,117.40 | 91,458,073,960.81 | 96,758,734,892.25 | 5,117,313,121.94 | 101,876,048,014.19 | ||||
| Add: Changes in accounting policies | |||||||||||||||
| Early error correction | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of the current year | 5,631,405,741.00 | 496,102,011.66 | 5,643,935,587.86 | 2,042,901,605.04 | 25,845,351.28 | 2,241,118,692.92 | 507,223,117.40 | 91,458,073,960.81 | 96,758,734,892.25 | 5,117,313,121.94 | 101,876,048,014.19 | ||||
| III. Increase or decrease in the current year (decrease expressed with "?") | 856,420,382.01 | -701,211,676.42 | -1,767,363,311.74 | 1,124,292.16 | -509,988,668.52 | 20,753,576,840.81 | 20,034,981,211.14 | -1,264,875,808.89 | 18,770,105,402.25 | ||||||
| (I) Total comprehensive income | -1,353,437,738.42 | 29,017,387,604.18 | 27,663,949,865.76 | -1,280,233,274.90 | 26,383,716,590.86 | ||||||||||
| (II) Capital invested and reduced by shareholders | 856,420,382.01 | -701,211,676.42 | -3,255,546,661.73 | -313,591,772.67 | -2,011,506,375.97 | 120,317,891.30 | -1,891,188,484.67 | ||||||||
| 1. Ordinary shares invested by shareholders | 49,000.00 | 49,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments recognized in shareholders' equity | 1,411,326,160.71 | 1,411,326,160.71 | 1,873,850.53 | 1,413,200,011.24 | |||||||||||
| 4. Others | -554,905,778.70 | -701,211,676.42 | -3,255,546,661.73 | -313,591,772.67 | -3,422,832,536.68 | 118,395,040.77 | -3,304,437,495.91 | ||||||||
| (III) Profit distribution | 2,704,897,285.76 | -8,318,738,898.76 | -5,613,841,613.00 | -111,193,450.56 | -5,725,035,063.56 | ||||||||||
| 1. Withdrawal of surplus reserves | 2,704,897,285.76 | -2,704,897,285.76 | |||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution to shareholders | -5,613,841,613.00 | -5,613,841,613.00 | -111,193,450.56 | -5,725,035,063.56 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-over of shareholders' equity | -413,925,573.32 | 40,660,707.45 | 368,519,908.06 | -4,744,957.81 | -4,744,957.81 | ||||||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||||||
| 3. Surplus reserves for making up losses | |||||||||||||||
| 4. Changes in defined benefit plan carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -413,925,573.32 | 40,660,707.45 | 368,519,908.06 | -4,744,957.81 | -4,744,957.81 | ||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | 1,124,292.16 | 1,124,292.16 | 6,233,025.27 | 7,357,317.43 | |||||||||||
| 1. Withdrawal in the current period | 5,017,397.69 | 5,017,397.69 | 6,563,685.31 | 11,581,083.00 | |||||||||||
| 2. Amount used in the current period | 3,893,105.53 | 3,893,105.53 | 330,660.04 | 4,223,765.57 | |||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of this year | 5,631,405,741.00 | 1,352,522,393.67 | 4,942,723,911.44 | 275,538,293.30 | 26,969,643.44 | 1,731,130,024.40 | 507,223,117.40 | 112,211,650,801.62 | 116,793,716,103.39 | 3,852,437,313.05 | 120,646,153,416.44 | ||||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||||||||||||
Page 162 of 310
| Consolidated Statement of Changes in Shareholders’ Equity (Continued) | |||||||||||||||
| January to December, 2023 | |||||||||||||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||||||||||||
| Item | 2022 | ||||||||||||||
| Equity attributable to shareholders of the parent company | Minority equity | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | General risk provisions | Undistributed profits | Others | Subtotal | |||||
| Preferred share | Perpetual bond | Others | |||||||||||||
| I. Ending balance of the previous year | 5,914,469,040.00 | 125,874,127.56 | 19,579,646,233.43 | 11,204,004,355.27 | 22,403,846.26 | 1,983,727,107.74 | 505,599,356.30 | 103,475,223,000.17 | 103,651,654,599.87 | 4,273,796,566.64 | 107,925,451,166.51 | ||||
| Add: Changes in accounting policies | |||||||||||||||
| Early error correction | |||||||||||||||
| Business combination under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of the current year | 5,914,469,040.00 | 125,874,127.56 | 19,579,646,233.43 | 11,204,004,355.27 | 22,403,846.26 | 1,983,727,107.74 | 505,599,356.30 | 103,475,223,000.17 | 103,651,654,599.87 | 4,273,796,566.64 | 107,925,451,166.51 | ||||
| III. Increase or decrease in the current year (decrease expressed with "?") | -283,063,299.00 | 370,227,884.10 | -13,935,710,645.57 | -9,161,102,750.23 | 3,441,505.02 | 257,391,585.18 | 1,623,761.10 | -12,017,149,039.36 | -6,892,919,707.62 | 843,516,555.30 | -6,049,403,152.32 | ||||
| (I) Total comprehensive income | -9,118,287,340.45 | 24,506,623,782.46 | 15,388,336,442.01 | -1,488,212,820.78 | 13,900,123,621.23 | ||||||||||
| (II) Capital invested and reduced by shareholders | -283,063,299.00 | 370,227,884.10 | -13,935,710,645.57 | -1,983,727,107.74 | -12,097,640,969.32 | -58,492,846.39 | 2,387,192,801.09 | 2,328,699,954.70 | |||||||
| 1. Ordinary shares invested by shareholders | 32,000,000.00 | 32,000,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments recognized in shareholders' equity | 370,227,884.10 | 370,227,884.10 | 352,740.48 | 370,580,624.58 | |||||||||||
| 4. Others | -283,063,299.00 | -13,935,710,645.57 | -1,983,727,107.74 | -12,097,640,969.32 | -428,720,730.49 | 2,354,840,060.61 | 1,926,119,330.12 | ||||||||
| (III) Profit distribution | 2,237,070,151.57 | 1,623,761.10 | -24,462,568,724.67 | -22,223,874,812.00 | -61,203,558.59 | -22,285,078,370.59 | |||||||||
| 1. Withdrawal of surplus reserves | 2,237,070,151.57 | -2,237,070,151.57 | |||||||||||||
| 2. Withdrawal of general risk provisions | 1,623,761.10 | -1,623,761.10 | |||||||||||||
| 3. Distribution to shareholders | -22,223,874,812.00 | -22,223,874,812.00 | -61,203,558.59 | -22,285,078,370.59 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-over of shareholders' equity | -42,815,409.78 | 4,048,541.35 | 36,436,872.17 | -2,329,996.26 | -2,329,996.26 | ||||||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||||||
| 3. Surplus reserves for making up losses | |||||||||||||||
| 4. Changes in defined benefit plan carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -42,815,409.78 | 4,048,541.35 | 36,436,872.17 | -2,329,996.26 | -2,329,996.26 | ||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserves | 3,441,505.02 | 3,441,505.02 | 5,740,133.58 | 9,181,638.60 | |||||||||||
| 1. Withdrawal in the current period | 6,207,315.33 | 6,207,315.33 | 6,367,313.24 | 12,574,628.57 | |||||||||||
| 2. Amount used in the current period | 2,765,810.31 | 2,765,810.31 | 627,179.66 | 3,392,989.97 | |||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of this year | 5,631,405,741.00 | 496,102,011.66 | 5,643,935,587.86 | 2,042,901,605.04 | 25,845,351.28 | 2,241,118,692.92 | 507,223,117.40 | 91,458,073,960.81 | 96,758,734,892.25 | 5,117,313,121.94 | 101,876,048,014.19 | ||||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||||||||||||
Page 163 of 310
| Balance Sheet of Company | |||||
| December 31, 2023 | |||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||
| Item | Note | December 31, 2023 | January 1, 2023 | ||
| Current assets: | |||||
| Monetary funds | 108,942,922,385.17 | 138,498,302,123.84 | |||
| Trading financial assets | 9,239,143,613.00 | 3,826,643,235.64 | |||
| Derivative financial assets | 95,917,736.67 | ||||
| Notes receivable | |||||
| Accounts receivable | XVI. 1 | 5,005,378,177.86 | 2,811,623,322.77 | ||
| Receivables financing | 7,524,899,223.47 | 24,888,338,026.70 | |||
| Advance payments | 30,848,777,000.48 | 28,967,607,814.23 | |||
| Other receivables | XVI. 2 | 4,860,219,830.31 | 3,602,220,649.55 | ||
| Including: Interests receivable | |||||
| Dividends receivable | |||||
| Inventory | 6,554,892,982.74 | 9,662,044,202.39 | |||
| Contract assets | |||||
| Assets held for sale | |||||
| Non-current assets due within one year | 2,275,251,779.59 | 3,275,847,602.74 | |||
| Other current assets | 21,109,801,963.63 | 2,524,365,397.75 | |||
| Total current assets | 196,457,204,692.92 | 218,056,992,375.61 | |||
| Non-current assets: | |||||
| Debt investment | 1,150,744,482.05 | 150,351,500.00 | |||
| Other debt investments | 15,167,794,246.58 | 13,312,747,743.53 | |||
| Long-term receivables | |||||
| Long-term equity investments | XVI. 3 | 29,745,489,074.58 | 29,292,448,754.90 | ||
| Other equity instrument investments | 3,720,140,478.30 | 4,498,529,086.64 | |||
| Other non-current financial assets | 4,428,003,204.49 | ||||
| Investment real estate | 15,267,230.92 | 17,569,355.86 | |||
| Fixed assets | 1,920,285,695.06 | 3,291,354,893.44 | |||
| Construction in progress | 827,683,995.65 | 460,979,229.34 | |||
| Usufruct assets | |||||
| Intangible assets | 538,236,487.90 | 823,495,905.07 | |||
| Development expenditures | |||||
| Goodwill | |||||
| Long-term unamortized expenses | |||||
| Deferred income tax assets | 12,918,181,096.41 | 11,399,848,879.09 | |||
| Other non-current assets | 39,079,582,229.05 | 897,709,314.22 | |||
| Total non-current assets | 105,083,405,016.50 | 68,573,037,866.58 | |||
| Total assets | 301,540,609,709.42 | 286,630,030,242.19 | |||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||
Page 164 of 310
| Balance Sheet of Company (Continued) | |||||
| December 31, 2023 | |||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||
| Item | Note | December 31, 2023 | January 1, 2023 | ||
| Current liabilities: | |||||
| Short-term borrowings | 14,746,805,059.21 | 39,282,170,543.24 | |||
| Transaction financial liabilities | |||||
| Derivative financial liabilities | 4,079,919.91 | 36,789,650.89 | |||
| Notes payable | 20,930,759,577.37 | 35,967,986,466.43 | |||
| Accounts payable | 56,619,857,856.76 | 49,009,643,905.62 | |||
| Advance receipts | |||||
| Contract liabilities | 8,477,695,446.71 | 9,160,537,495.63 | |||
| Payroll payable | 1,538,244,958.36 | 1,584,146,109.11 | |||
| Taxes and dues payable | 2,617,451,988.73 | 2,053,684,659.63 | |||
| Other payables | 3,127,041,358.88 | 8,044,168,532.69 | |||
| Including: Interests payable | |||||
| Dividends payable | 602,881.87 | 5,614,444,494.87 | |||
| Liabilities held for sale | |||||
| Non-current liabilities due within one year | 19,446,383,711.42 | ||||
| Other current liabilities | 59,082,715,501.14 | 55,848,213,083.79 | |||
| Total current liabilities | 186,591,035,378.49 | 200,987,340,447.03 | |||
| Non-current liabilities: | |||||
| Long-term borrowings | 36,308,065,111.81 | 27,272,830,327.56 | |||
| Bonds payable | |||||
| Including: Preferred share | |||||
| Perpetual bond | |||||
| Lease liabilities | |||||
| Long-term payables | |||||
| Long-term payroll payable | 195,057,663.00 | 175,712,728.00 | |||
| Estimated liabilities | |||||
| Deferred income | 143,416,179.21 | 81,520,036.95 | |||
| Deferred income tax liabilities | 1,306,743,893.80 | 710,194,350.26 | |||
| Other non-current liabilities | |||||
| Total non-current liabilities | 37,953,282,847.82 | 28,240,257,442.77 | |||
| Total liabilities | 224,544,318,226.31 | 229,227,597,889.80 | |||
| Shareholders' equity: | |||||
| Share capital | 5,631,405,741.00 | 5,631,405,741.00 | |||
| Other equity instruments | |||||
| Including: Preferred share | |||||
| Perpetual bond | |||||
| Capital reserves | 1,893,049,118.18 | 479,849,106.94 | |||
| Less: Treasury share | 4,942,723,911.44 | 5,643,935,587.86 | |||
| Other comprehensive income | 585,972,104.35 | 2,390,383,701.31 | |||
| Special reserves | |||||
| Surplus reserves | 2,742,389,179.65 | 2,240,943,653.27 | |||
| Undistributed profits | 71,086,199,251.37 | 52,303,785,737.73 | |||
| Total equity | 76,996,291,483.11 | 57,402,432,352.39 | |||
| Total liabilities and shareholders' equity | 301,540,609,709.42 | 286,630,030,242.19 | |||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||
Page 165 of 310
| Income Statement of Company | |||||||
| January to December, 2023 | |||||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||||
| Item | Note | 2023 | 2022 | ||||
| I. Operating revenue | XVI. 4 | 134,653,638,564.88 | 119,790,450,591.45 | ||||
| Less: Operating costs | XVI. 4 | 87,964,474,582.78 | 84,193,036,470.44 | ||||
| Taxes and surcharges | 859,092,997.83 | 612,252,827.55 | |||||
| Sales expenses | 15,103,736,810.10 | 10,387,387,452.52 | |||||
| Administrative expenses | 1,821,653,380.75 | 1,052,070,843.18 | |||||
| R&D expenses | 5,011,334,301.81 | 4,858,805,454.26 | |||||
| Financial expenses | -3,106,751,273.76 | -2,676,657,645.12 | |||||
| Including: Interest expenses | 2,614,299,954.46 | 2,088,897,062.24 | |||||
| Interest income | 6,174,406,252.36 | 4,994,497,152.18 | |||||
| Add: Other income | 51,153,924.37 | 197,947,953.08 | |||||
| Income from investments (losses expressed with "?") | XVI. 5 | 4,277,964,743.44 | 3,978,824,626.50 | ||||
| Including: Investment income from joint ventures or associates | -6,685,965.10 | -13,564,461.54 | |||||
| Income from the derecognition of financial assets measured at amortization costs | |||||||
| Income from net exposure hedging (losses expressed with "?") | |||||||
| Income from changes in fair value (losses expressed with "-") | 225,560,468.94 | -21,732,079.44 | |||||
| Credit impairment losses (losses expressed with "?") | -143,073,661.64 | 29,008,430.71 | |||||
| Asset impairment losses (losses expressed with "?") | -1,011,653,917.67 | -116,830,227.19 | |||||
| Income from disposal of assets (losses expressed with "?") | 385,145,031.19 | -12,890.45 | |||||
| II. Operating profits (losses expressed with "?") | 30,785,194,354.00 | 25,430,761,001.83 | |||||
| Add: Non-operating revenue | 69,675,985.99 | 9,279,405.22 | |||||
| Less: Non-operating expenses | 2,865,046.70 | 2,780,548.68 | |||||
| III. Total profits (total losses expressed with "?") | 30,852,005,293.29 | 25,437,259,858.37 | |||||
| Less: Income tax expenses | 3,803,032,435.67 | 3,066,558,342.67 | |||||
| IV. Net profit ("?" for net loss) | 27,048,972,857.62 | 22,370,701,515.70 | |||||
| 1. Net profits from continuing operations (net losses expressed with "?") | 27,048,972,857.62 | 22,370,701,515.70 | |||||
| 2. Net profits from discontinuing operations (net losses expressed with "?") | |||||||
| V. Net of tax of other comprehensive income | -1,393,059,564.60 | -9,272,631,892.47 | |||||
| 1. Other comprehensive income that cannot be reclassified into profits and losses | -1,385,556,900.05 | -9,308,453,566.04 | |||||
| (1) Changes arising from remeasurement of the defined benefit plan | -15,837,466.00 | -8,601,949.00 | |||||
| (2) Other comprehensive income that cannot be transferred to profits and losses under the equity method | -855,045,750.68 | -4,747,875,029.30 | |||||
| (3) Changes in fair value of other equity instrument investments | -514,673,683.37 | -4,551,976,587.74 | |||||
| (4) Changes in fair value of the Company's own credit risk | |||||||
| (5) Others | |||||||
| 2. Other comprehensive income to be reclassified into profits and losses | -7,502,664.55 | 35,821,673.57 | |||||
| (1) Other comprehensive income that can be transferred to profits and losses under the equity method | |||||||
| (2) Changes in fair value of other debt investments | -9,130,605.80 | 60,670,722.32 | |||||
| (3) Amount of financial assets reclassified into and included in other comprehensive income | |||||||
| (4) Provision for credit impairment of other debt investments | |||||||
| (5) Cash flow hedging reserves | 1,627,941.25 | -24,849,048.75 | |||||
| (6) Difference arising from translation of financial statements in foreign currency | |||||||
| (7) Others | |||||||
| VI. Total comprehensive income | 25,655,913,293.02 | 13,098,069,623.23 | |||||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||||
Page 166 of 310
| Cash Flow Statement of Company | |||||
| January to December, 2023 | |||||
| Prepared by: Gree Electric Appliances, Inc. of Zhuhai | Unit: yuan (RMB) | ||||
| Item | Note | 2023 | 2022 | ||
| I. Cash flows from operating activities: | |||||
| Cash received from sale of goods or rendering of services | 144,179,376,788.30 | 109,450,181,009.15 | |||
| Refund of taxes and levies | 2,331,542,341.22 | 1,435,352,776.76 | |||
| Other cash received related to operating activities | 42,036,996,855.66 | 46,980,196,866.35 | |||
| Subtotal of cash inflows from operating activities | 188,547,915,985.18 | 157,865,730,652.26 | |||
| Cash payments for goods acquired and services received | 118,570,609,203.77 | 116,205,098,866.43 | |||
| Cash paid to and on behalf of employees | 3,156,268,049.00 | 3,092,307,818.11 | |||
| Payments of all types of taxes | 11,257,710,858.48 | 7,430,521,751.61 | |||
| Other cash paid related to operating activities | 10,627,695,536.89 | 8,763,205,023.74 | |||
| Subtotal of cash outflows from operating activities | 143,612,283,648.14 | 135,491,133,459.89 | |||
| Net cash flows from operating activities | 44,935,632,337.04 | 22,374,597,192.37 | |||
| II. Cash flows from investment activities: | |||||
| Cash received from the recovery of investment | 21,792,641,532.16 | 6,392,709,278.47 | |||
| Cash received from return on investment | 761,944,706.94 | 100,686,978.57 | |||
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | 1,518,775,880.59 | 6,678.00 | |||
| Net cash received from the disposal of subsidiaries and other business units | |||||
| Other cash received related to investment activities | 17,579,810,310.30 | 3,859,149,215.21 | |||
| Subtotal of cash inflows from investment activities | 41,653,172,429.99 | 10,352,552,150.25 | |||
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 535,255,593.94 | 1,310,618,056.46 | |||
| Cash paid for investments | 81,994,120,506.79 | 13,307,412,872.29 | |||
| Net cash paid for acquisition of subsidiaries and other business units | 2,423,031,350.00 | ||||
| Other cash paid related to investment activities | 4,190,445,611.95 | 27,971,602,744.39 | |||
| Subtotal of cash outflows from investment activities | 86,719,821,712.68 | 45,012,665,023.14 | |||
| Net cash flows from investment activities | -45,066,649,282.69 | -34,660,112,872.89 | |||
| III. Cash flows from financing activities: | |||||
| Cash received from absorbing investment | |||||
| Cash received from borrowings | 53,605,339,999.39 | 72,179,295,627.37 | |||
| Other cash received related to financing activities | 9,273,478,862.85 | 2,320,913,943.00 | |||
| Subtotal of cash inflows from financing activities | 62,878,818,862.24 | 74,500,209,570.37 | |||
| Cash repayments of amounts borrowed | 55,186,410,550.58 | 29,745,813,719.56 | |||
| Cash paid for dividend and profit distribution or interest payment | 13,409,157,688.67 | 18,022,950,452.52 | |||
| Other cash paid related to financing activities | 3,390,981,384.42 | 15,019,655,898.35 | |||
| Subtotal of cash outflows from financing activities | 71,986,549,623.67 | 62,788,420,070.43 | |||
| Net cash flows from financing activities | -9,107,730,761.43 | 11,711,789,499.94 | |||
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -137,818,393.05 | 161,480,573.74 | |||
| V. Net increase in cash and cash equivalents | -9,376,566,100.13 | -412,245,606.84 | |||
| Add: Beginning balance of cash and cash equivalents | 19,554,231,293.07 | 19,966,476,899.91 | |||
| VI. Ending balance of cash and cash equivalents | 10,177,665,192.94 | 19,554,231,293.07 | |||
| Legal representative: | Person in charge of accounting work: | Person in charge of the accounting agency: | |||
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Statement of Changes in Shareholders’ Equity of Company
January to December, 2023Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: RMB
| Item | 2023 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total equity | |||
| Preferred share | Perpetual bond | Others | |||||||||
| I. Ending balance of the previous year | 5,631,405,741.00 | 479,849,106.94 | 5,643,935,587.86 | 2,390,383,701.31 | 2,240,943,653.27 | 52,303,785,737.73 | 57,402,432,352.39 | ||||
| Add: Changes in accounting policies | |||||||||||
| Early error correction | |||||||||||
| Others | |||||||||||
| II. Beginning balance of the current year | 5,631,405,741.00 | 479,849,106.94 | 5,643,935,587.86 | 2,390,383,701.31 | 2,240,943,653.27 | 52,303,785,737.73 | 57,402,432,352.39 | ||||
| III. Increase or decrease in the current year (decrease expressed with "?") | 1,413,200,011.24 | -701,211,676.42 | -1,804,411,596.96 | 501,445,526.38 | 18,782,413,513.64 | 19,593,859,130.72 | |||||
| (I) Total comprehensive income | -1,393,059,564.60 | 27,048,972,857.62 | 25,655,913,293.02 | ||||||||
| (II) Capital invested and reduced by shareholders | 1,413,200,011.24 | -701,211,676.42 | -2,244,112,466.83 | -313,766,812.32 | -443,467,591.49 | ||||||
| 1. Ordinary shares invested by shareholders | |||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||
| 3. Amount of share-based payments recognized in shareholders' equity | 1,413,200,011.24 | 1,413,200,011.24 | |||||||||
| 4. Others | -701,211,676.42 | -2,244,112,466.83 | -313,766,812.32 | -1,856,667,602.73 | |||||||
| (III) Profit distribution | 2,704,897,285.76 | -8,318,738,898.76 | -5,613,841,613.00 | ||||||||
| 1. Withdrawal of surplus reserves | 2,704,897,285.76 | -2,704,897,285.76 | |||||||||
| 2. Distribution to shareholders | -5,613,841,613.00 | -5,613,841,613.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal carry-over of shareholders' equity | -411,352,032.36 | 40,660,707.45 | 365,946,367.10 | -4,744,957.81 | |||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||
| 3. Surplus reserves for making up losses | |||||||||||
| 4. Changes in defined benefit plan carried forward to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -411,352,032.36 | 40,660,707.45 | 365,946,367.10 | -4,744,957.81 | |||||||
| 6. Others | |||||||||||
| (V) Special reserves | |||||||||||
| 1. Withdrawal in the current period | |||||||||||
| 2. Amount used in the current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance of this year | 5,631,405,741.00 | 1,893,049,118.18 | 4,942,723,911.44 | 585,972,104.35 | 2,742,389,179.65 | 71,086,199,251.37 | 76,996,291,483.11 | ||||
Legal Representative: Chief Accountant: Head of Accounting Department:
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Statement of Changes in Shareholders’ Equity of Company (Continued)
January to December, 2023
Prepared by: Gree Electric Appliances, Inc. of Zhuhai Unit: RMB
| Item | 2022 | ||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury share | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Total equity | |||
| Preferred share | Perpetual bond | Others | |||||||||
| I. Ending balance of the previous year | 5,914,469,040.00 | 109,621,222.84 | 19,579,646,233.43 | 11,663,015,593.78 | 1,983,727,107.74 | 66,028,087,909.15 | 66,119,274,640.08 | ||||
| Add: Changes in accounting policies | |||||||||||
| Early error correction | |||||||||||
| Others | |||||||||||
| II. Beginning balance of the current year | 5,914,469,040.00 | 109,621,222.84 | 19,579,646,233.43 | 11,663,015,593.78 | 1,983,727,107.74 | 66,028,087,909.15 | 66,119,274,640.08 | ||||
| III. Increase or decrease in the current year (decrease expressed with "?") | -283,063,299.00 | 370,227,884.10 | -13,935,710,645.57 | -9,272,631,892.47 | 257,216,545.53 | -13,724,302,171.42 | -8,716,842,287.69 | ||||
| (I) Total comprehensive income | -9,231,566,879.24 | 22,370,701,515.70 | 13,139,134,636.46 | ||||||||
| (II) Capital invested and reduced by shareholders | -283,063,299.00 | 370,227,884.10 | -13,935,710,645.57 | -1,983,727,107.74 | -11,668,920,238.83 | 370,227,884.10 | |||||
| 1. Ordinary shares invested by shareholders | |||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||
| 3. Amount of share-based payments recognized in shareholders' equity | 370,227,884.10 | 370,227,884.10 | |||||||||
| 4. Others | -283,063,299.00 | -13,935,710,645.57 | -1,983,727,107.74 | -11,668,920,238.83 | |||||||
| (III) Profit distribution | 2,237,070,151.57 | -24,460,944,963.57 | -22,223,874,812.00 | ||||||||
| 1. Withdrawal of surplus reserves | 2,237,070,151.57 | -2,237,070,151.57 | |||||||||
| 2. Distribution to shareholders | -22,223,874,812.00 | -22,223,874,812.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal carry-over of shareholders' equity | -41,065,013.23 | 3,873,501.70 | 34,861,515.28 | -2,329,996.25 | |||||||
| 1. Transfer of capital reserves into capital (or share capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or share capital) | |||||||||||
| 3. Surplus reserves for making up losses | |||||||||||
| 4. Changes in defined benefit plan carried forward to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -41,065,013.23 | 3,873,501.70 | 34,861,515.28 | -2,329,996.25 | |||||||
| 6. Others | |||||||||||
| (V) Special reserves | |||||||||||
| 1. Withdrawal in the current period | |||||||||||
| 2. Amount used in the current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance of this year | 5,631,405,741.00 | 479,849,106.94 | 5,643,935,587.86 | 2,390,383,701.31 | 2,240,943,653.27 | 52,303,785,737.73 | 57,402,432,352.39 | ||||
Legal Representative: Chief Accountant: Head of Accounting Department:
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| Gree Electric Appliances, Inc. of Zhuhai |
| Notes to 2023 Financial Statements |
I. Basic information of the Company
| Gree Electric Appliances, Inc. of Zhuhai (hereinafter referred to as "the Company") was founded in December 1989, with the unified social credit code of 91440400192548256N. |
As of December 31, 2023, the registered capital and share capital of the Company wasRMB5,631,405,741.00. Please refer to Note “V. 47. Share” capital for details of the share capital.Registered address, organizational form and address of the Company
| The organizational form of the Company: a company limited by shares |
| The Company's registered address and headquarters address: Room 608, No. 108 Huitong Third Road, Hengqin New Area, Zhuhai |
Nature of business and main business activities of the Company
| The Company is a manufacturing enterprise mainly engaged in the production and sales of air-conditioners and their accessories, as well as home appliances and their accessories. |
Names of the parent company and the ultimate parent company
| As of December 31, 2023, the Company had no parent company and no actual controller. |
Approved submitter and approved submission date of the financial statements
| This financial report was submitted under approval by the Board of Directors of the Company as of April 29, 2024. |
II. Preparation basis of financial statementsPreparation basisThe Company prepares the financial statements on the basis of a going concern and according to thetransactions and events actually incurred and the disclosure provisions in the Accounting Standards forBusiness Enterprises ? Basic Standards (promulgated by the Ministry of Finance Order No. 33, revised bythe Ministry of Finance Order No.76) and the specific accounting standards, the Implementation Guide forthe Accounting Standards for Business Enterprises, the Interpretations of the Accounting Standards forBusiness Enterprises and other applicable regulations promulgated and revised by the Ministry of Financeon and after February 15, 2006 (collectively referred to as the "Accounting Standards for BusinessEnterprises"), as well as the Preparation Rules for Information Disclosure by Companies OfferingSecurities to the Public No. 15 ? General Provisions on Financial Reports (Revised in 2023) promulgatedby China Securities Regulatory Commission ("CSRC").
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According to the relevant provisions of the Accounting Standards for Business Enterprises, the Company'saccounting is based on an accrual basis. Except for certain financial instruments, the financial statementsare measured on the basis of historical cost. If an asset is impaired, the corresponding impairment provisionshall be made in accordance with relevant regulations.Going concernThe financial statements were presented on a going-concern basis. The management carefully evaluatedfactors of the Company in the future 12 months since December 31, 2023 such as the macro policy risk,market operation risk, current and long-term profitability and solvency of the enterprise, financialflexibility, and the management's intention of changing the operation policy, and held that no event cangenerate significant influence on the Company's ability to continue as a going concern.III. Major accounting policies and accounting estimates
| Specific accounting policies and accounting estimate suggestions: |
| The Company and its subsidiaries are mainly engaged in the production and sales of air-conditioners and their accessories, as well as home appliances and their accessories. The Company has prepared several specific accounting policies and accounting estimates for transactions and events such as revenue recognition based on the actual production management characteristics and in accordance with provisions of the related Accounting Standards for Business Enterprises. For details, see the detailed description in Note III herein. |
Statements regarding observance of the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company conform to the requirements of the AccountingStandards for Business Enterprises and give a true and complete view of the financial position of theCompany on December 31, 2023, and the related information such as operating results and cash flows in2023. Besides, the financial statements prepared by the Company, in all the major aspects, also conform tothe disclosure requirements of financial statements and their notes in the Preparation Rules for InformationDisclosure by Companies Offering Securities to the Public No. 15 revised by the China SecuritiesRegulatory Commission, as revised in 2023.Accounting periodThe accounting period of the Company includes one year and interim periods. An interim period coverssix-month, a quarter and a month. The accounting year of the Company commences on January 1 and endson December 31 of each year.Operating cycleThe normal operating cycle refers to the period from the Company's purchase of assets used for processingto achieving of cash or cash equivalent. The Company regards 12 months as one operating cycle and uses itas the liquidity classification standard for assets and liabilities.
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Functional currency
| RMB is the functional currency used by the Company. Some subsidiaries of the Company adopt currencies other than RMB as the functional currency. |
Determination method and selection basis of importance criteria
| Item | Importance Criteria |
| Important receivables with bad debt reserves accrued by individual item | The amount of accrual by individual item accounts for more than 5% of the ending balance of various receivables and the amount is greater than RMB100 million |
| Recovery or reversal of important receivables bad debt reserves | The single recovery or reversal amount accounts for more than 5% of the ending balance of various receivables and the amount is greater than RMB100 million |
| Actual write-off of important receivables | The wrote-off amount accounts for more than 5% of the ending balance of various receivables and the amount is greater than RMB100 million |
| Important advance payments aged over one year | Advance payments aged over one-year account for more than 10% of the ending balance of advance payments and the amount is greater than RMB100 million |
| Important construction in progress | The ending balance of a single project is greater than RMB100 million |
| Important accounts payable and other payables aged over one year | Accounts payable/other payables aged over 1 year account for more than 10% of the ending balance of accounts payable/other payables and the amount is greater than RMB100 million |
| Important contractual liabilities aged over one year | Contractual liabilities aged over 1 year account for more than 10% of the ending balance of contractual liabilities and the amount is greater than RMB100 million |
| Important non-wholly-owned subsidiaries | Subsidiary's ending net assets/total ending assets/total current profit account for more than 10% of the Company's ending net assets/total ending assets/total current profit |
| Important joint ventures or associates | The ending book value of long-term equity investments in a single investee accounts for more than 5% of the Company's ending net assets, or the current investment profit and loss under the equity method accounts for more than 10% of the Company's consolidated net profit for the current period |
| Important investment activities | Individual investment activities account for more than 10% of the total cash inflows or outflows related to received or paid investment activities |
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Accounting treatment of business combinations involving enterprises under common control andbusiness combinations not involving enterprises under common controlBusiness combination refers to the transaction or event of combining two or more independent enterprisesto form a reporting entity. Business combination is classified into business combination involvingenterprises under common control and business combination not involving enterprises under commoncontrol.
(1) Business combination under common control
A business combination under common control is a business combination in which the enterprisesparticipating in the combination are ultimately controlled by the same party or parties before and after thecombination, and the control is not temporary. For business combinations involving enterprises undercommon control, the party that obtains the right to control other enterprises participating in the combinationon the combination date is the combined party, and other enterprises participating in the combination arethe combined party. The combination date refers to the date on which the combining party actually obtainsthe right to control the combined party.Where business combination involving enterprises under common control arises from one transaction orequities of investees under common control are obtained step by step through multiple transactions andthese transactions belong to a package deal, the Company will recognize the cost of combination accordingto the share of carrying amount of net assets obtained for the combined party in the ultimate controllingparty's consolidated financial statements on the combination date. The difference between the carryingamount of the consideration paid for the combination (or total par value of the issued shares) and thecombination cost is adjusted to capital reserve; if the capital reserve is not sufficient to absorb thedifference, any excess is adjusted against retained earnings.Costs incurred that are attributable to the business combination made by the Company, includingintermediary costs such as the audit fee, legal service charge appraisal and consultation costs, and otherrelated overhead expenses are charged to profits and losses in the period in which they are incurred; thetransaction expenses directly attributable to the consideration paid for the combination through the issuanceof equity instruments are credited against the capital reserve; if the capital reserve is not sufficient, anyexcess is adjusted against retained earnings; the transaction expenses directly attributable to theconsideration paid for the combination through the issuance of debt instruments are recorded into theinitially recognized amount of debt instruments. Where the equities of investees under common control areobtained step by step through multiple transactions to achieve a business combination, but thesetransactions do not belong to a package deal, the Company will recognize the cost of the combinationaccording to the share of carrying amount of net assets to be enjoyed by the combined party after thecombination in the ultimate controlling party's consolidated financial statements on the combination date.The difference between the combination cost and the sum of the carrying amount of long-term equityinvestments prior to the combination plus the carrying amount of the consideration newly paid for furtheracquisition of shares on the date of combination is adjusted to capital reserve (capital premium or sharecapital premium); if the capital reserve is not sufficient to absorb the difference, any excess is adjusted
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against retained earnings. For the equity investment held before the date of combination, accountingtreatment is not performed temporarily for other comprehensive incomes that are accounted for using theequity method or recognized using financial instruments and accounted according to the measurementstandard for recognition. When this investment is disposed of, accounting treatment is conducted using thebasis the same as that used by the investee to directly dispose of relevant assets or liabilities directly. Forother changes in owners' equities other than the net profits and losses, other comprehensive income andprofit distribution in net assets of the investee that are recognized because of accounting using the equitymethod, accounting treatment is not conducted temporarily; they shall be transferred to the profits andlosses of the current period at the time of disposing of this investment.
(2) Business combinations not under common control
A business combination not involving enterprises under common control is a business combination inwhich all combining enterprises are not ultimately controlled by the same party or parties both before andafter the combination. For business combinations not involving enterprises under common control, theparty that obtains the right to control other enterprises participating in the combination on the date ofcombination is the acquiring party, and other enterprises participating in the combination are the acquiredparty. The date of acquisition refers to the date on which the acquiring party actually obtains the right tocontrol the acquired party.For the business combination implemented through one transaction, the cost of business combination refersto the fair value of assets paid, liabilities incurred or assumed, and equity securities issued by the Companyon the date of acquisition for obtaining the right to control the acquired party. On the date of acquisition,the assets, liabilities and contingent liabilities obtained by the Company from the acquired party arerecognized at fair value.For a business combination realized by two or more transactions of exchange, the accounting treatment forthe combination costs shall be made by distinguishing individual financial statements and consolidatedfinancial statements:
In the individual financial statements, where the held shares are accounted using the equity method prior tothe date of acquisition, the cost of the combination of the investment is the aggregate of the carryingamount of the equity investment of the acquired party held before the date of acquisition and the investmentcost newly increased on the date of acquisition. For other related comprehensive income, accountingtreatment is performed during the disposal of the investment using the basis the same as that used by theinvestee to dispose of relevant assets or liabilities directly; the owner's equity that is recognized due toother changes in owner's equities other than the net profits and losses, other comprehensive income andprofit distribution of the investee is accordingly transferred to the profits and losses of the current period atthe time of disposing of this investment. Where the equity investment held before the date of acquisition isrecognized using financial instruments and undergoes accounting treatment according to the measurementstandard, the cost of the combination of the investment is the aggregate of the fair value of the equityinvestment recognized according to this standard and the newly increased investment cost. The differencebetween the fair value of the originally held shares and the carrying amount and all the cumulative fair
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value changes originally recorded into other comprehensive income are transferred to the investmentincome of the current period.In the consolidated financial statements, the shares of the acquired party held before the date of acquisitionshall be remeasured based on the fair value of such shares on the date of acquisition, and the differencebetween their fair value and the carrying amount shall be charged to the investment income of the currentperiod; where the shares of the acquired party held before the date of acquisition involve othercomprehensive income under the accounting of the equity method and other changes in owners' equitiesother than the net profits and losses, other comprehensive income and profit distribution, othercomprehensive income and other changes in owners' equities concerned with them shall be transferred tothe investment income in the period in which the date of acquisition is included (excluding othercomprehensive income arising from changes in the net assets or net liabilities of the benefit planremeasured and redefined by the investee). The summation of the fair value of the shares of the acquiredparty held before the date of acquisition on the date of acquisition and newly increased investment costs onthe date of acquisition shall be the combination cost of the investment.Costs incurred that are attributable to the business combination made by the Company, includingintermediary costs such as the audit fee, legal service charge, appraisal and consultation costs, and otherrelated overhead expenses are charged to profits and losses in the period in which they are incurred. Thetransaction expenses directly attributable to the consideration paid for the combination through the issuanceof equity instruments are credited against the capital reserve; if the capital reserve is not sufficient, anyexcess is adjusted against retained earnings; the transaction expenses directly attributable to theconsideration paid for the combination through the issuance of debt instruments are recorded into theinitially recognized amount of debt instruments.In the Company, the positive balance between the business combination cost and the fair value of theidentifiable net assets obtained by the Company from the acquired party shall be recognized as goodwilland subsequently measured after the accumulated provision for impairment is deducted from the cost; thenegative balance between the business combination cost and the fair value of the identifiable net assetsobtained by the Company from the acquired party shall be charged to profits and losses of the currentperiod after being checked.
(3) Principle of judging whether multiple transactions are "a package deal"When the terms and conditions of multiple transactions and the economic impact thereof accord with oneor more of the following cases, usually it indicates that these transactions shall undergo accountingtreatment as "a package deal":
1) These transactions are concluded at the same time or concluded in consideration of mutual influence;
2) Only the whole of these transactions can achieve a complete business result;
3) The occurrence of one transaction depends on the occurrence of at least one of the other transactions;
4) One transaction is not economical when considered separately but economical when taken into accounttogether with other transactions.Preparation of consolidated financial statements
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(1) Principles for determining the scope of consolidated financial statementsThe consolidation scope of consolidated financial statements shall be determined on the basis of control.Control means that the Company owns the power to the investee, enjoys variable return by participatingrelevant activities of the investee, and has the capacity of using the power to the investee to affect its returnamount.
(2) Preparation of consolidated financial statements
The Company prepares the consolidated financial statements of the Company are prepared by the Companybased on individual financial statements of the Company and subsidiaries and according to other relevantdata. During the preparation of consolidated financial statements, the accounting policy and accountingperiod of the Company shall be consistent with those of subsidiaries, and the inter-company majortransactions and balances shall be offset.For the subsidiary added due to a business combination involving enterprises under common control in theReport Period, the Company adjusts the amount at the beginning of the period in the consolidated balancesheet, incorporates the revenue, expense, and profit of this subsidiary from the beginning of the period forconsolidation to the end of the report period into the consolidated profit statement, includes its cash flowinto the consolidated cash flow statement, and adjusts relevant items in the comparative statements; for thesubsidiary added due to business combination not involving enterprises under common control, theCompany does not adjust the amount at the beginning of the period in the consolidated balance sheet, butonly incorporates the revenue, expense and profit of this subsidiary from the date of acquisition to the endof the report period into the consolidated profit statement and its cash flow into the consolidated cash flowstatement.The portion of owners' equity of the subsidiaries that isn't attributable to the Company shall be separatelypresented as the minority equity under the owners' equity in the Consolidated Balance Sheet. The portion ofthe subsidiary's current net profits and losses attributable to minority equity is presented as the "Minorityprofits and losses" item in the Consolidated Income Statement. The share of comprehensive income of thesubsidiaries in the current period that is attributable to the minority equity shall be presented as the item of"Total comprehensive income attributable to minority shareholders" under the total comprehensive incomein the Consolidated Profit Statement. Where the losses of a subsidiary undertaken by minority shareholdersexceed the share enjoyed by minority shareholders in the owners' equities of this subsidiary at thebeginning of the period, the balance shall still be adjusted against the minority shareholders' equity.For the acquisition of the subsidiary's shares owned by minority shareholders thereof, in the consolidatedfinancial statements, the difference between the long-term equity investment newly obtained because of theacquisition of minority shareholders' shares and the share of net assets of the subsidiary to be enjoyed andcontinuously calculated according to the proportion of newly added shares from the acquisition date orconsolidation date is adjusted to capital reserve; if the capital reserve is not sufficient to absorb thedifference, any excess is adjusted against retained earnings.For the transaction for which a part of equity investment is disposed of but the right to control thissubsidiary is not lost, in the consolidated financial statements, the difference between the disposal price and
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the share of net assets of the subsidiary to be enjoyed accordingly for disposal of the long-term equityinvestment and continuously calculated from the acquisition date or consolidation date is adjusted to capitalreserve (capital premium or share capital premium); if the capital reserve is not sufficient to absorb thedifference, any excess is adjusted against retained earnings.Where the right to control the original subsidiary is lost due to disposal of a part of equity investment orother reasons, the residual shareholding shall be remeasured at fair value on the date of losing the controlright; the result of the sum of the consideration obtained from the equity disposal plus the fair value ofresidual shareholding, minus the share of net assets of the original subsidiary that should be enjoyed and iscontinuously calculated according to the original proportion of held shares from the acquisition date, shallbe charged to the investment income in the period when the control right is lost, and adjusted against thegoodwill at the same time; other comprehensive income related to the original subsidiary's equityinvestment shall be transferred to the investment income of the current period when the control right is lost.Where the equity investment for a subsidiary is disposed of step by step through multiple transactions tillthe control right is lost and all the transactions belong to a package deal, accounting treatment shall beperformed for the transactions by deeming all the transactions as one item for disposing of the subsidiaryand losing the control right; however, prior to loss of the control right, the difference between everydisposal price and the share of net assets of this subsidiary to be enjoyed accordingly for investmentdisposal shall be recognized as other comprehensive income in the consolidated financial statements and, atthe time of losing the control right, be jointly transferred to the profits and losses in the period when thecontrol right is lost.Where the equity investment for a subsidiary is disposed of step by step through multiple transactions tillthe control right is lost, and the transactions do not belong to a package deal, all the transactions before theloss of the right to control the subsidiary shall be handled according to the regulations of the Company onpartial disposal of the subsidiary's long-term equity investment provided that the Company does not losethe right to control the subsidiary.This report period does not involve buying-in and selling-out of the same subsidiary's equity or selling-outand buying-in turn.Classification of joint arrangements and accounting treatment of co-managementJoint arrangement refers to the arrangement for joint control by two or more participants.
(1) Joint arrangement classification
A joint arrangement is classified into co-management and joint venture. Co-management refers to the jointarrangement where the parties to the venture enjoy relevant assets of this arrangement and assume relevantliabilities of this arrangement. A joint venture refers to a joint arrangement where the parties to the ventureonly enjoy rights to the net assets of this arrangement.
(2) Accounting treatment of co-management
1) The Company recognizes the following items related to the quantum of interest in co-management andperforms accounting treatment in accordance with provisions of the corresponding Accounting Standardsfor Business Enterprises:
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a. Independently held assets, as well as the jointly held assets to be recognized according to the share of theCompany;b. Independently undertaken liabilities, as well as the jointly undertaken liabilities to be recognizedaccording to the share of the Company;c. Revenue generated by selling the output share of co-management that is enjoyed by the Company enjoys;d. Revenue that is generated by selling the output during co-management and recognized according to theshare of the Company;e. Independently incurred expense, as well as the expense incurred by co-management and recognizedaccording to the share of the Company.
2) Where the Company puts assets into or sells assets to the parties to co-management (except that theassets constitute business), before the said assets are sold to a third party by the parties to co-management,the Company recognizes only the part in the profits and losses arising from this transaction that isattributable to other participants in the co-management. In case the put or sold assets involve the assetimpairment losses complying with provisions in the Accounting Standards for Business Enterprises No. 8?Impairment of Assets, the Company shall recognize the said loss in full.Where the Company purchases assets from the parties to co-management (except that the assets constitutebusiness), before said assets are sold to a third party, the Company recognizes only the part in the profitsand losses arising from this transaction that is attributable to other participants in the co-management. Incase the purchased assets involve asset impairment losses complying with provisions in the AccountingStandards for Business Enterprises No. 8 ? Impairment of Assets, the Company shall recognize this part ofloss according to the share to undertake.Determination criteria for cash and cash equivalentsThe cash refers to the enterprise's money on hand and deposits for payment at any time. Cash equivalentsrefer to investments held by the enterprise that are short in term (generally referring to those expiringwithin not more than 3 months from the date of acquisition), high in liquidity, convertible to the knownamount of cash and insignificant in risk of change of value.Foreign currency transactions and translation of financial statements in foreign currency
(1) Method of translation for foreign currency transactions
At the time of initial recognition of a foreign currency transaction of the Company, the amount in theforeign currency shall be translated into the amount in RMB currency at the spot exchange rate of thetransaction date (generally referring to the medial rate of foreign exchange quotation published by thePeople's Bank of China at the date of transaction, the same below).
(2) Treatment of monetary items of foreign currencies and non-monetary items of foreign currencies onthe balance sheet dateFor the monetary items of foreign currencies, the translation is done according to the spot rate of thebalance sheet date. The exchange difference generated from the difference between the spot rate of thecurrent balance sheet date and the time of initial recognition of a foreign currency or the previous balance
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sheet date is charged to the profits and losses of the current period except that the exchange differencegenerated from foreign currency borrowings relating to assets of which the acquisition or productionsatisfies the capitalization conditions is capitalized in accordance with the Accounting Standards forBusiness Enterprises No. 17 ? Borrowing Costs. For the non-monetary items of foreign currenciesmeasured by historical cost, translation is done according to the spot rate of the transaction date withoutchange in their amount in functional currency. Non-monetary items of foreign currencies such as sharesand funds measured at fair value are translated as per the spot rate on the date when their fair value isconfirmed. The differences between the translated amounts in functional currency and the original amountsin functional currency are recorded into current profits and losses as fluctuations in fair value (includingfluctuation in exchange rates).
(3) Translation of foreign currency financial statements
The Company translates the financial statements expressed in foreign currency into ones expressed in RMBcurrency according to the following provisions.The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balancesheet date, except for the "undistributed profits" item. Other items of owners' equity are converted at thespot exchange rate at the time of occurrence. The asset and liability items in the balance sheets shall betranslated at an average exchange rate. The difference arising from the translation of financial statements inforeign currency generated by the above method shall be separately presented under the owner's equity itemin the balance sheet. The foreign currency cash flow statement shall be translated at the average exchangerate on the cash flow date. The amount of influence of the exchange rate change on cash shall be presentedseparately under the adjusted item in the cash flow statement.Financial instrumentsA financial asset or financial liability can be recognized when the Company becomes one party of financialinstrument contract.
(1) Classification, recognition, and measurement of financial assets
According to the business mode for management of the financial assets and the characteristics of thecontractual cash flows of the financial assets, the Company classifies the financial assets as financial assetsmeasured at amortized cost; financial assets measured at fair value with changes included in othercomprehensive income; financial assets measured at fair value with changes included in the current profitsand losses.The financial assets initially recognized by the Company shall be measured at fair value. For the financialassets measured at fair value with changes included in the current profits and losses, the transactionexpenses thereof are directly included in the current profits and losses; for other categories of financialassets, the transaction expenses thereof are included in the initially recognized amount. For the accountsreceivable or notes receivable arising from the sale of products or the provision of services, which do notinclude or consider significant financing components, the initial recognition amount is based on theexpected amount of consideration that the Company is entitled to receive.
1) Financial assets measured at amortization costs
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The Company's business model for managing financial assets measured at amortization cost is to collectcontractual cash flows, and the contractual cash flow characteristics of such financial assets are consistentwith basic borrowing arrangements, that is, cash flows generated on a specific date, are for the payment ofprincipal and interest based on the outstanding principal amount. The Company adopts the effective interestrate method for such financial assets and performs subsequent measurement based on amortization cost.The gains or losses arising from their amortization or impairment are included in the current profits andlosses.
2) Financial assets measured at fair value with changes included in other comprehensive incomeThe Company's business model for managing such financial assets aims at the collection of contractualcash flows and sales, and the contractual cash flow characteristics of such financial assets are consistentwith the basic lending arrangements. The company measures such financial assets at fair value and theirchanges are recognized in other comprehensive income, but impairment losses or gains, exchange profitsand losses, and interest income calculated using the effective interest rate method are recognized in thecurrent profits and losses.In addition, the Company designates some non-transaction equity instrument investments as financial assetsmeasured at fair value with changes included in other comprehensive income. The Company includes therelevant dividend income of such financial assets in the current profits and losses with changes in fair valueincluded in other comprehensive income. When the financial assets are derecognized, the cumulative gainsor losses previously included in other comprehensive income will be transferred from other comprehensiveincome to retained income but will not be included in the current profits and losses.
3) Financial assets measured at fair value with changes included in other comprehensive incomeThe Company classifies financial assets other than those measured at amortized cost and those measured atfair value with changes included in other comprehensive income as financial assets measured at fair valuewith changes included in the current profits and losses In addition, in the initial recognition, in order toeliminate or significantly reduce the accounting mismatch, the Company designated some financial assetsas financial assets measured at fair value with changes included in the current profits and losses. For suchfinancial assets, the Company uses fair value for subsequent measurement, and the changes in fair value areincluded in the current profits and losses.
(2) Classification, recognition, and measurement of financial liabilities
Financial liabilities are initially classified as financial liabilities measured at fair value with changesincluded in the current profits and losses and other financial liabilities. For the financial liabilities measuredat fair value with changes included in the current profits and losses, the transaction expenses thereof aredirectly included in the current profits and losses; for other financial liabilities, the transaction expensesthereof are included in the initially recognized amount.
1) Financial liabilities are measured at fair value with changes included in the current profits and lossesFinancial liabilities are measured at fair value with changes included in the current profits and losses,including transaction financial liabilities (including derivatives that are financial liabilities) and financialliabilities designated at initial recognition as measured at fair value with changes included in the current
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profits and losses.Transaction financial liabilities (including derivatives that are financial liabilities) are subsequentlymeasured at fair value with changes included in the current profits and losses, except for those related tohedge accounting.For financial liabilities designated as those measured at fair value at the initial recognition with changesincluded in the current profits and losses, the changes of fair value caused by changes in the Company'sown credit risk are included in other comprehensive income, and when the liabilities are derecognized, thecumulative changes in fair value caused by changes in own credit risk included in other comprehensiveincome are transferred to retained earnings. Other changes in fair value are included in current profits andlosses. Suppose the accounting mismatch in profits and losses may be caused or expanded as the effects ofchanges in the own credit risk of such financial liabilities are processed in the above manner. In that case,the Company will include all gains or losses of such financial liabilities (including the amount affected bychanges in the Company's own credit risk) included in the current profit and loss.
2) Other financial liabilities
Except for financial liabilities and financial guarantee contracts formed by the transfer of financial assetsthat do not meet the conditions for derecognition or continue to be involved in the transferred financialassets, other financial liabilities are classified as financial liabilities measured at amortized cost and aresubsequently measured at amortized cost. Gains or losses arising from derecognition or amortization areincluded in the current profits and losses.
(3) Basis for the recognition and method for the measurement of financial assetsFinancial assets that meet one of the following conditions shall be derecognized:
1) The contract right to receive the cash flow of the financial assets is terminated;
2) The financial assets have been transferred, and almost all the risks and rewards of ownership of thefinancial assets are transferred to the transferring party;
3) The financial assets have been transferred. Although the enterprise has neither transferred nor retainedalmost all the risks and rewards of the ownership of the financial assets, it has given up control over thefinancial assets.Suppose the enterprise has neither transferred nor retained almost all the risks and rewards of the ownershipof the financial assets, and has not given up control over the financial assets. In that case, the relevantfinancial assets shall be recognized according to the extent of continued involvement in the transferredfinancial assets, and the relevant liabilities shall be recognized accordingly. The degree of continuedparticipation involvement in the transferred financial assets refers to the level of risk faced by the enterprisedue to changes in the value of the financial assets.Suppose the overall transfer of financial assets meets the conditions for derecognition. In that case, thedifference between the book value of the transferred financial assets and the sum of the considerationreceived due to the transfer and the cumulative amount of changes in fair value originally included in othercomprehensive income is included in the current profits and losses.Suppose the partial transfer of financial assets satisfies the conditions for derecognition. In that case, the
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book value of the transferred financial assets will be apportioned between the portion derecognized, and theportion not derecognized according to their relative fair values, and the difference between the sum of theconsideration received for the transfer and the amount of cumulative changes in the fair value which waspreviously directly recognized in owner's equity and which should be apportioned to the portionderecognized. The above book amount apportioned will be included in the current profits and losses.The Company must determine whether almost all the risks and rewards of ownership of the financial assetshave been transferred before endorsing the transfer of financial assets sold by means of recourse andfinancial assets held. If almost all the risks and rewards of ownership of the financial asset have beentransferred to the transferee, the financial asset will be derecognized; if the risks and rewards of theownership of the financial asset have been retained, the financial asset will not be derecognized; if almostall the risks and rewards of ownership of the financial asset have not been transferred or retained, theenterprise needs to continue to determine whether it retains control over the asset and performs accountingtreatment in accordance with the principles described in the preceding paragraphs.
(4) Derecognition of financial liabilities
If the present obligation for a financial liability has been fully or partially discharged, the financial liabilityor the relevant portion thereof will be derecognized. Suppose the Company (borrower) signs an agreementwith the lender to replace the original financial liability by assuming a new financial liability, and thecontract terms of the new financial liability and the original financial liability are substantially different. Inthat case, original financial liability will be derecognized, and the new financial liability will be recognizedat the same time. Suppose a material amendment is made to the contractual terms for the original financialliability or the relevant portion thereof. In that case, the original financial liability will be derecognized, andthe new financial liability will be recognized according to the amended terms at the same time.If the financial liability or the relevant portion thereof is derecognized, the difference between the bookvalue of the financial liability derecognized, and the consideration paid for it (including the non-cash assettransferred or the liability assumed) will be included in the current profits and losses.
(5) Offsetting financial assets with financial liabilities
When the Company has the legal right to offset the financial asset and the financial liability with therecognized amount, and such legal rights are currently enforceable, and the Company plans to settle in thenet or simultaneously realize the financial asset and liquidate the financial liability, the financial asset andthe financial liability will be presented in the balance sheet in net amounts after mutual offset. In addition,financial assets and financial liabilities are presented separately in the balance sheet and are not offsetagainst each other.
(6) Method for determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can receive for the sale of an asset or need to pay forthe transfer of a liability in the orderly transaction that occurs on the measurement date. For financialinstruments for which there is an active market, the fair value thereof will be determined by the Companybased on the quotation in the active market. Quotation in the active market refers to the price that is easilyobtained from exchanges, brokers, industry associations, pricing service agencies, etc., on a regular basis,
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and represents the price of market transactions that actually occur in fair trading. For financial instrumentsfor which there is no active market, the fair value thereof will be determined by the Company usingvaluation techniques. The value appraisal techniques include the prices adopted by the parties, who arefamiliar with the condition in the latest market transaction of their own free will, the current fair valueobtained by referring to other financial instruments of the same essential nature, the cash flowcapitalization method and the option pricing model, etc. At the time of valuation, the Company adopts avaluation technique that is applicable in the current circumstances and that there is sufficient available dataand other information to support, selects the input values consistent with the asset or liability characteristicsconsidered by the market participants in the transaction of the underlying asset or liability, and as far aspossible uses relevant observable input values. Unobservable input values are used where the relevantobservable input values are not available or are not practicable.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the residual equity in assets of theCompany after deduction of all the liabilities. The Company treats issues (including refinancing),repurchases, sale or cancellation of equity instruments as changes in equity, and transaction expensesrelated to equity transactions are deducted from equity. The Company does not recognize changes in thefair value of equity instruments.If the Company's equity instruments distribute dividends (including "interest" generated by instrumentsclassified as equity instruments) during the existence period, such dividends will be treated as profitdistribution.Impairment of financial assetsFinancial assets of which the Company needs to recognize impairment losses include financial assetsmeasured at amortization cost and debt instrument investments measured at fair value with changesincluded in other comprehensive income, mainly including notes receivable, receivables financing,accounts receivable, contract assets, other receivables, loans and advances, debt investment, other debtinvestment, long-term receivables, etc.
(1) Recognition methods of provision for impairment
Based on the expected credit loss, the Company makes an impairment provision. It recognizes creditimpairment loss according to the applicable expected credit loss measurement method (general method orsimplified method) for the above items.Credit loss refers to the difference between all contractual cash flows that are due to the Company inaccordance with the contract and all the cash flows that the Company expects to receive (i.e., all cashshortfalls), discounted at the original effective interest rate. Among them, for purchased or originatedcredit-impaired financial assets, the Company discounts the difference at the credit-adjusted effectiveinterest rate of the financial assets.The general method for measuring expected credit losses is that the Company assesses on each balancesheet date whether the credit risk of financial assets has increased significantly since initial recognition. Ifthe credit risk has increased significantly since initial recognition, the Company measures the loss
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provisions according to the amount equal to lifetime expected credit losses. If the credit risk has notincreased significantly since initial recognition, the Company measures the loss provisions according to theamount equal to 12-month expected credit losses. The Company considers all reasonable and validinformation, including forward-looking information, when assessing expected credit losses.For financial instruments with lower credit risk on the balance sheet date, the Company assumes that theircredit risk has not increased significantly since initial recognition.
(2) Judgment standards for whether the credit risks have increased significantly since the initialrecognitionSuppose the probability of default of a financial asset in the expected lifetime determined on the balancesheet date is significantly higher than the probability of default in the expected lifetime determined at thetime of initial recognition. In that case, it indicates that the credit risk of the financial asset has increasedsignificantly. Except for special circumstances, the Company uses the change in default risk that occurswithin the next 12 months as a reasonable estimate of the change in default risk that occurs throughout thelifetime to determine whether the credit risk has increased significantly since initial recognition.
(3) Assessment methods of the expected credit risks based on combinationsThe Company assesses the credit risks of the financial assets with significantly different credit risksrespectively, such as accounts receivable from disputes with the other party or litigation and arbitration andreceivables with obvious signs indicating that the debtor is likely to be unable to fulfill the repaymentobligation, etc.In addition to the financial assets whose credit risks are assessed respectively, the Company divides thefinancial assets into different combinations based on their common risk characteristics. It assesses the creditrisks on the basis of combinations.
(4) Accounting treatment methods for financial assets impairment
At the end of the period, the Company calculates the estimated credit losses of various financial assets. Ifthe estimated credit losses are greater than the book value of the current impairment provisions, thedifference is recognized as an impairment loss; if the estimated credit losses are smaller than the book valueof the current impairment provisions, the difference is recognized as an impairment gain.
(5) Recognition methods of the credit losses of all kinds of financial assets
1) Notes receivable and receivables financing ? notes receivable
For notes receivable and receivables financing ? notes receivable, the Company measures the loss reservesaccording to the amount of the expected credit losses during the whole duration. Based on the credit riskcharacteristics of notes receivable and receivables financing ? notes receivable, financial assets are dividedinto different combinations:
| Item | Basis for recognition of combinations |
Banker's acceptance bill
| Banker's acceptance bill | The acceptor is a banking institution |
Financial companyacceptance bill
| Financial company acceptance bill | The acceptor is a financial company |
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| Item | Basis for recognition of combinations |
Trade acceptance draft
| Trade acceptance draft | The acceptor is a company other than a bank institution or financial company |
2) Accounts receivable, receivables financing ? accounts receivable and contract assetsFor accounts receivable that do not contain significant financing components, accounts receivable thatcontain significant financing components, receivables financing ? accounts receivable, and contract assets,the Company measures loss reserves based on an expected credit loss amount equivalent to the entireduration. Expected credit losses related to contract assets are included in asset impairment losses.In addition to accounts receivable of which credit risk is individually assessed, the Company dividesaccounts receivable into different combinations based on their credit risk characteristics:
| Item | Basis for recognition of combinations |
Combination 1: Accountage combination
| Combination 1: Account age combination | The combination takes the account age of accounts receivable as the basis for the combination |
Combination 2: Low riskcombination
| Combination 2: Low risk combination | The combination takes the dismantling subsidy of waste electrical and electronic products receivable from government departments and new energy vehicle subsidies as the basis for the combination |
Combination 3: No riskcombination
| Combination 3: No risk combination | The combination takes the receivables from related units within the scope of consolidation as the basis for the combination |
3) Disbursement of loans and advances
The Company measures impairment losses using an amount equivalent to 12-month or lifetime expectedcredit losses, based on whether the credit risk of disbursement of loans and advances has increasedsignificantly since initial recognition.
4) Other receivables
The Company measures impairment losses using an amount equivalent to 12-month or lifetime expectedcredit losses based on whether the credit risk of other receivables has increased significantly since initialrecognition. In addition to other receivables of which credit risk is individually assessed, the Companydivides other receivables into different combinations based on their credit risk characteristics:
| Item | Basis for recognition of combinations |
Combination 1: Account agecombination
| Combination 1: Account age combination | The combination takes the account age of other receivables as the basis for the combination |
Combination 2: Low riskcombination
| Combination 2: Low risk combination | The combination takes the receivable government grain deposits as the basis for the combination |
Combination 3: No riskcombination
| Combination 3: No risk combination | The combination takes the receivables from related units within the scope of consolidation as the basis for the combination |
5) Debt investment
Debt investment mainly accounts for bond investment measured at amortization cost. The Companymeasures impairment losses using an amount equivalent to 12-month or lifetime expected credit lossesbased on whether the credit risk of other debt investments has increased significantly since initialrecognition.
6) Other debt investments
Other debt investments mainly account for the debt instrument investments measured at fair value withchanges included in other comprehensive income. The Company measures impairment losses using an
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amount equivalent to 12-month or lifetime expected credit losses based on whether the credit risk of otherdebt investments has increased significantly since initial recognition.
7) Long-term receivables
The Company's long-term receivables are incomes from the sales of goods collected in installments. TheCompany measures the loss reserves according to the amount of the expected credit losses during the wholeduration.Receivables financingFor notes receivable and accounts receivable classified as measured at fair value and of which changes areincluded in other comprehensive income, the portion within one year (including one year) from the date ofacquisition is presented as receivables financing, while the portion beyond one year is presented as otherdebt investment. For related accounting policies, please refer to Note “III. 11. Financial instruments” andNote “III. 12. Impairment of financial assets”.Inventory
(1) Inventory classification
The Company's inventories mainly include raw materials, work in progress and contract performance costs,finished products, development costs, and development products.Development cost refers to the property that has not been completed and is for sale; the Company accountsfor the land use rights purchased and used for commercial housing development as the development cost.Development product refers to the property that has been completed and is to be sold.
(2) Valuation method for delivered inventories
The Company mainly adopts the planned cost method for inventory accounting, while some subsidiariesadopt the actual cost method for inventory accounting.Inventories accounted for with the planned cost method are valued at planned cost upon shipment, and atthe end of the month, the planned cost is adjusted to the actual cost based on the cost difference of thecurrent month; inventories accounted for using the actual cost method mainly use the weighted averagemethod at the end of each month to value the issued inventory.Development cost and product development costs include land transfer fees, infrastructure expenditures,construction and installation engineering expenditures, borrowing costs incurred before the developmentproject is completed, and other related costs incurred in development. When carrying forward the cost forproduct development, the total cost is allocated between the sold and unsold properties in proportion to theconstruction area.
(3) Basis for determining the net realizable value of inventory and accrual method for inventorydepreciation reservesAt the balance sheet date, inventories are measured at the lower cost and net realizable value. If the cost ofinventories is higher than the net realizable value, a provision for the decline in the value of inventoriesshall be made and shall be recorded in the profits and losses of the current period, whereas a provision forthe decline in the value of inventories has been made, if the value of the said inventories is resumed later,
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the said value shall be transferred back from the provision for the decline in value of the inventories. Netrealizable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and the estimated costs necessary to make the sale and relevant taxes.
(4) Inventory system
The Company's inventory adopts the perpetual inventory system.
(5) Amortization methods of low-value consumables and packing materialsLow-value consumables and packing materials are written off in full when issued for use.Contract assetsThe Company presented the right to collect payments from customers which the customers have not yetpaid the contract consideration. While the Company has fulfilled its performance obligations in accordancewith the contract, and which is not unconditional (that is, only depending on the passage of time) ascontract assets in the balance sheet. Contract assets and contract liabilities under the same contract arepresented in net amount, and contract assets and contract liabilities under different contracts are not offset.For the determination and accounting treatment of expected credit losses of contract assets, please refer toNote “III. 12. Impairment of financial assets”.Contract costs
(1) Determination of asset amount related to contract costs
The Company's asset related to contract costs includes contract acquisition cost and contract obtain cost.If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it willbe recognized as an asset as the contract acquisition cost. However, if the amortization period of the assetdoes not exceed one year, it will be included in current profits and losses when it is incurred.If the cost incurred by the Company for the performance of the contract does not fall within the scopespecified in the accounting standards for business enterprises other than the Accounting Standards forBusiness Enterprises No. 14 ? Revenues (Revised in 2017), it shall be recognized as an asset as the contractperformance cost when the following conditions are met simultaneously: ① the cost is directly related to acurrent or expected contract, including direct labor cost, direct material cost, manufacturing expense (orsimilar expense), cost clearly borne by the customer, and other costs incurred only due to the contract; ②the cost increases the Company's future resources for fulfilling its performance obligations; and ③ the costis expected to be recovered.
(2) Amortization of assets related to contract costs
The Company’s assets related to contract costs are amortized on the same basis as the recognition of goodsincome related to the asset and included in the current profits and losses.
(3) Impairment of assets related to contract costs
When recognizing the impairment loss of assets related to the contract cost, the Company shall firstrecognize the impairment loss of other assets related to the contract and recognized in accordance withother relevant corporate accounting standards; then, based on the fact that the book value is higher than thedifference between the residual consideration expected to be obtained by the Company due to the transfer
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of the goods related to the asset and the estimated cost to be incurred for the transfer of the relevant goods,the excess part shall be withdrawn for impairment provision and recognized as asset impairment losses.If the depreciation factors in the previous period change later, causing the aforementioned difference aboveto be higher than the book value of the asset, the Company will transfer back the previously-madeprovision for impairment and include it in the current profits and losses. While the book value of the assetafter transferring back can not exceed the book value of the asset at the date of transferring back under theassumption that no provision is made for the impairment.Assets held for sale
(1) Recognition standard
Where the Company recovers its book value by selling (including the non-monetary asset exchange withcommercial substance; it is the same below), not continuously using a non-current asset or disposal group,it shall be classified into the category of assets held for sale. The non-current asset or disposal group to beclassified into the category of assets held for sale shall meet the following conditions at the same time:
According to the practice of selling such assets or disposal groups in similar transactions, they can be soldimmediately under the current circumstances;Selling is extremely likely to happen. That is to say that the Company has made the decision to a sellingplan and has obtained recognized purchase commitment and selling is expected to be completed within oneyear. If it can be sold only after being approved by the relevant authority organization or supervisiondepartment of the Company according to relevant requirements, it should have been approved. Recognizedpurchase commitment refers to a purchase agreement with a legally binding force that the Companyconcludes with other parties, which includes important clauses of the transaction price, time and enoughstrict default punishment, etc., with which the possibility to lead to major adjustment or cancellation ofagreement is tiny.The non-current asset or disposal group acquired by the Company for resale shall be classified as the heldfor sale on the acquisition date if it meets the requirements of “expected to be sold within one year” on theacquisition date, and it is likely to meet the other classification conditions for holding for sale in the shortterm (usually three months).The disposal group refers to a group of assets that are disposed of as a whole in a transaction through saleor other means, and the liabilities that are directly related to these assets and transferred in the transaction.Where the goodwill obtained in the merger of enterprises is apportioned for the asset group or asset groupcombination to which the disposal group belongs according to Accounting Standards for Enterprises No.8? Impairment of Assets, this disposal group should contain the goodwill apportioned to the disposal group.
(2) Accounting treatment
For the non-current asset and disposal group that is classified as the category held for sale, the Companycarries out initial measurement or re-measurement according to the smaller result of the net value of thebook value and the fair value minus the net amount of the disposal expense. Where the net value of the fairvalue minus the disposal cost is lower than the original book value, the difference is confirmed as assetsimpairment losses and included in the current profits and losses, and the provision for impairment of the
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assets held for sale is made at the same time; for the amount of assets impairment losses confirmed by thedisposal group held for sale, the book value of the goodwill in the disposal group is deducted first, and thenits book value is deducted in proportion according to the ratios of the book values of various non-currentassets applicable to the measurement of the category held for sales in the disposal group.Where the net value of the fair value of non-current assets held for sale on the balance sheet date minus theselling expense increases subsequently, the previous write-down amount is restored and will be transferredback in the amount of assets impairment loss after classification as the category held for sales is confirmed,and the amount transferred back shall be included in the current profits and losses. Asset impairment lossesrecognized before the classification are not transferred back.Where the net value of the fair value of the disposal group held for sale on the balance sheet date minus theselling expense increases subsequently, the previous write-down amount is restored and will be transferredback in the amount of asset impairment losses confirmed for non-current assets applicable to themeasurement provisions of the category held for sale after classification as the category held for sales, andthe amount transferred back shall be included in the current profits and losses.For the deducted book value of goodwill and the non-current assets applicable to the measurementprovisions of the category held for sale, the asset impairment losses confirmed before classification as thecategory held for sales shall not be transferred back. For the amount subsequently transferred back for assetimpairment losses recognized in the disposal group held for sale, its book value is increased in proportionaccording to the ratios of the book values of various non-current assets applicable to measurementprovisions of the category held for sales in the disposal group excluding the goodwill. The non-currentassets held for sale or non-current assets in the disposal group are not made for provision for impairment oramortized, and the interests on debts and other expenses in the disposal group held for sale will beconfirmed continuously.The measurement methods of the category held for sale do not apply to the deferred income tax assets,financial assets complying with the specifications of Accounting Standards for Business Enterprises No. 22? Recognition and Measurement of Financial Instruments, investment real estate and biological assetsmeasured at fair value, contract rights produced in the insurance contract, and the assets produced in thewelfare of the workers, and they are measured according to the relevant criteria or correspondingaccounting policies formulated by the Company. Where the disposal group contains the non-current assetsapplicable to the measurement method of the category held for sale, the measurement method of thecategory held for sale is applicable to the whole disposal group. The related accounting standards apply tothe measurement of liabilities in the disposal group.When the non-current assets or disposal group is removed from the disposal group held for sale because itdoes not meet the classification condition of the category held for sale anymore and will not be classified asthe category held for sale or non-current assets, it shall be measured according to the smaller one of thefollowing two:
1) In the case of the book value before being classified into the held for sale category, the amount adjustedaccording to the depreciation, amortization or impairment that should have been recognized under the
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assumption that it is not classified as held for sale category;
2) Recoverable amount.
Long-term equity investmentsThe long-term equity investments mainly include the equity investment held by the Company that can takecontrol over the investee and have a significant impact, as well as the equity investment in its joint venture.
(1) Judgment standards of control and significant influence
Judgment standards of control:
1) The Company owns the power to the investee;
2) The Company enjoys variable returns by participating in relevant activities of the investee;
3) The Company is able to use the power over the investee to influence the Company's return amount;
4) The Company acknowledges the control force for the investee that meets the above three conditions.Judgment standards of significant influence:
1) The Company has the power to participate in the decision-making of the investee's financial andoperating policies, but does not control, or jointly control the formulation of these policies with otherparties;
2) Where the Company is able to exert a significant impact on the investee, it is the associated enterprise ofthe Company;
3) The investee under common control by the Company and other participants is a joint venture of theCompany. Common control means that any participant cannot independently control this arrangement, andany participant with the right to common control of this arrangement can prevent other participants or thecombination of participants from independently controlling this arrangement.
(2) Determination of the investment cost of the long-term equity investmentThe long-term equity investment of the Company is measured at the investment cost at the time ofacquisition. Typically, the investment cost refers to the assets paid, liabilities incurred or undertaken, andthe fair value of equity securities issued for the acquisition of this investment, including the costs directlyattributable to the acquisition. However, for the long-term equity investment formed by a businesscombination involving enterprises under common control, the investment cost is the share of the carryingamount of the combined party's net assets acquired on the combination date in the ultimate controllingparty's consolidated financial statements.
(3) Subsequent measurement of long-term equity investments and methods of profits and lossesrecognitionThe Company adopts the cost method to calculate the long-term equity investment that can control theinvestee and the equity method to calculate the investment of associated enterprise and joint venture.The price of a long-term equity investment accounted for by employing the cost method shall be includedin its initial investment cost. If there are additional investments or disinvestments, the cost of the long-termequity investment shall be adjusted. The cash dividends or profits declared to be distributed by the investeeshall be recognized as investment income and charged to profits and losses of the current period.When the Company employs the equity method for accounting for the long-term equity investment, if the
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investment cost of a long-term equity investment is more than the investing enterprise's attributable shareof the fair value of the investee's identifiable net assets for the investment, the investment cost of the long-term equity investment may not be adjusted; if the investment cost of a long-term equity investment is lessthan the investing enterprise' attributable share of the fair value of the investee's identifiable net assets forthe investment, the carrying amount of the long-term equity investment shall be adjusted. The differenceshall be recorded in the profits and losses of the current period.When the Company employs the equity method for accounting for the long-term equity investment, theCompany first adjusts the investee's net profits and losses and other comprehensive income in aspects suchas the fair value of the investee's identifiable net assets at the time of investment acquisition, accountingpolicy and accounting period. Then it recognizes the current-period investment profits and losses and othercomprehensive income based on the net profits and losses and other comprehensive income shares of theinvestee that should be enjoyed or shared. For other changes in owners' equities other than the net profitsand losses, other comprehensive income, and profit distribution, the carrying amount of the long-termequity investment shall be adjusted and recorded into the owners' equities.For the unrealized internal transaction profits and losses that arise between the Company and the associatesand joint ventures, the part attributable to the Company shall be calculated according to the shareholdingproportion, and the investment profits and losses shall be recognized on the basis of offsetting.For the long-term equity investments held already prior to January 1, 2007 for the associates and jointventures, if there is any equity investment difference on the debit side, the investment profits and lossesshall be recognized after deduction of the equity investment difference on the debit side amortized by thestraight-line method according to the original residual maturity.
(4) Recognition of common control and significant influences on the investeeCommon control is recognized as the control that does not exist unless the investing parties unanimouslyagree on sharing the control power over the relevant important financial and operating decisions of theinvestee according to the provisions of the contract.Significant influences will be recognized where there is power to participate in making decisions on thefinancial and operating policies of the investee but not to control or do joint control together with otherparties over the formulation of these policies. When the Company holds more than 20.00% (inclusive) butless than 50.00% of voting shares of the investee directly or indirectly through a subsidiary, significantinfluences on the investee shall be recognized unless there is clear evidence indicating that the Companycannot participate in production and management decision-making of the investee in this situation andtherefore cannot generate significant influences; if the Company holds less than 20.00% (exclusive) ofvoting shares of the investee, usually the Company is not deemed to have a significant influence on theinvestee, unless there is clear evidence indicating that the Company can participate in production andmanagement decision-making of the investee in this situation and therefore can generate significantinfluences.
(5) Conversion of accounting method of long-term equity investment
Where the equity investment originally held by the Company, which is unable to control, is not under
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common control with or has no significant influences on the invested entity, is converted into an investmentfor an associate or joint venture due to additional investment, the investment shall be accounted by theequity method instead, and the Company shall use the fair value of the original equity investment plus thefair value of the consideration paid to acquire the newly added investment as the initial investment costaccounted by the equity method instead. The difference between the fair value and carrying amount of theoriginally held equity investment prior to the additional investment and the cumulative fair value changesoriginally recorded into other comprehensive income shall be transferred to the current-period profits andlosses accounted by the equity method instead.For the originally held investments for associates and joint ventures, if they are not able to be undercommon control with or have significant influences on the invested entity, if they are not able to be undercommon control with or have significant influences on the invested entity due to reasons such as partialdisposal, accounting treatment must be performed for residual equity investments according to therecognition and measurement standards for financial instruments. The difference between the fair value andcarrying amount on the date on which the common control or significant influence is lost shall be chargedto profits and losses of the current period. When accounting based on the equity method is terminated forother related comprehensive income originally subject to accounting of equity method, accountingtreatment is performed using the basis the same as that used by the investee to directly dispose of relevantassets or liabilities directly; all the owners' equities that are recognized due to other changes in owners'equities other than the net profits and losses, other comprehensive income and profit distribution of theinvestee shall be transferred to the profits and losses of the current period when accounting based on theequity method is terminated.Where the originally held investments for associates or joint ventures are converted to investments forsubsidiaries due to additional investment, in the individual financial statements, the sum of the carryingvalue of the acquired party's equity investment held prior to the acquisition date and the investment costnewly added on the acquisition date shall be used as the initial investment cost of such an investment; forthe equity investment held prior to the acquisition date, other comprehensive income recognized due toaccounting of the equity method shall undergo accounting treatment using the basis the same as that usedby the investee to directly dispose of relevant assets or liabilities when such an investment is disposed of.When the influencing capability of the investee is converted from control to a significant influence orcommon control together with other investors due to investment disposal, the long-term equity investmentcost, for which recognition shall be terminated, is first carried over according to the proportion ofinvestment disposal. On such a basis, the remaining long-term equity investment cost is compared with theshare attributable to the Company in the fair value of the investee's identifiable net assets at the time oforiginal investment, which is calculated according to the remaining shareholding proportion. For thegoodwill part to be embodied in the investment evaluation, the carrying amount of long-term equityinvestment shall not be adjusted; where the investment cost is less than the share attributable to theCompany in the fair value of the investee's identifiable net assets at the time of original investment, anyexcess shall be adjusted against retained earnings when the long-term equity investment cost is adjusted.
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For the share attributable to the Company in the investee's realized net profits and losses betweenacquisition of the original investment and conversion to accounting of the equity method due to investmentdisposal, the carrying amount of the long-term equity investment shall be adjusted, meanwhile, any excessshall be adjusted against retained earnings for the share attributable to the Company in the investee'srealized net profits and losses (excluding the cash dividends or profits distributed or declared to distribute)from acquisition of the original investment to the beginning of the period in which the investment isdisposed of, and the current-period profits and losses shall be adjusted for the share attributable to theCompany in the investee's realized net profits and losses from the beginning of the period in which theinvestment is disposed of to the investment disposal date; the share attributable to the Company in theinvested entity's changes in other comprehensive income shall be recorded into other comprehensiveincome when the carrying amount of the long-term equity investment is adjusted; the share attributable tothe Company in the investee's other changes in owners' equities arising from reasons other than the netprofits and losses, other comprehensive income and profit distribution shall be recorded into "Capitalreserves ? other capital reserves" when the carrying amount of the long-term equity investment is adjusted.After the cost method is converted to the equity method for the long-term equity investment, the shareattributable to the Company in the investee's realized net profits and losses, other comprehensive income,and other changes in owners' equities shall be calculated and recognized according to provisions of thestandard in the future period.For the originally held long-term equity investment that is able to control the investee, if the shareholdingproportion declines due to reasons such as partial disposal and the investment cannot be able to control, beunder common control with or have significant influences on the investee, accounting treatment must beperformed for remaining equity investments according to the recognition and measurement standards forfinancial instruments. The difference between the fair value and carrying amount on the date of control lossshall be recorded in the investment income of the current period.In the process of holding the long-term equity investment, if the Company decides to sell all or part of theheld equity of the investee in consideration of all aspects, the carrying amount of the long-term equityinvestment corresponding to the sold equity shall be carried over accordingly. The difference between theselling price and the carrying amount of long-term equity investment for disposal shall be recognized asdisposal profits and losses.If the Company disposes of all the long-term equity investments accounted by the equity method, whenaccounting based on the equity method is terminated for other related comprehensive income originallysubject to accounting of equity method, accounting treatment is performed using the basis the same as thatused by the investee to directly dispose of relevant assets or liabilities; all the owners' equities that arerecognized due to changes in other owners' equities other than the net profits and losses, othercomprehensive income and profit distribution of the investee shall be transferred to the investment incomeof the current period when accounting based on the equity method is terminated; if a part of the long-termequity investment accounted by the equity method is disposed of and the residual equity is still accountedusing the equity method, other related comprehensive income originally subject to accounting of equity
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method shall be handled using the basis the same as that used by the investee to directly dispose of relevantassets or liabilities and be carried over by proportion, and the owners' equities that are recognized due toother changes in owners' equities other than the net profits and losses, other comprehensive income andprofit distribution of the invested entity shall be carried over to the investment income of the current periodaccording to the proportion.Investment real estateThe Company's investment real estate includes a land use right that is leased out, a land use right held fortransfer upon capital appreciation, and a building that is leased out.The Company's investment real estate is measured at its cost, and the Company uses the cost model for asubsequent measurement of its investment real estate. The depreciation and amortization of the investmentreal estate shall be made in accordance with the accounting policies of fixed assets or intangible assets ofthe Company.When the Company changes the purpose of the investment real estate, such as for self-use, it shall transferthe relevant investment real estate to other assets.See Note “III. 25. Impairment of long-term assets” for the impairment test method and impairment reserveaccrual method of investment real estate.Fixed assets
(1) Recognition standard of fixed assets
The Company's fixed assets refer to tangible assets held for the production of commodities, provision oflabor services, lease or operation and management, with a service life exceeding one accounting year.Fixed assets can not be recognized unless they simultaneously meet the conditions as follows:
1) The economic interests related to the fixed assets are likely to flow into the enterprise;
2) The cost of this fixed asset can be measured reliably.
(2) Measurement of fixed assets
The fixed assets are measured at cost.
1) The cost of a purchased fixed asset consists of the purchase price, the relevant taxes, freight, loading andunloading fees, professional service fees, and other expenses that bring the fixed asset to the expectedconditions for use and that may be relegated to the fixed asset;
2) If the payment for a fixed asset is delayed beyond the normal credit conditions, and it is of financingnature in effect, the cost of the fixed asset shall be recognized based on the present value of the purchaseprice. The difference between the actual payment and the present value of the purchase price shall beincluded in the current profits and losses within the credit period, unless it shall be capitalized inaccordance with Accounting Standards No. 17?Borrowing Costs.
3) The cost of self-constructed fixed assets consists of the necessary expenditures incurred before the assetsreach the predetermined usable state;
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4) The cost invested in a fixed asset by the investor shall be recognized in accordance with the value asstipulated in the investment contract or agreement, other than those of unfair value as stipulated in thecontract or agreement;
5) The costs of fixed assets acquired through the exchange of non-monetary assets, recombination ofliabilities, merger of enterprises and lease shall be respectively recognized in accordance with theAccounting Standards No. 7 ? Exchange of Non-monetary Assets, Accounting Standards for EnterprisesNo. 12 ? Debt Restructuring, Accounting Standards for Enterprises No. 20 ? Merger of Enterprises andAccounting Standards for Enterprises No. 21 ? Leases.
(3) Classification of fixed assets
The Company's fixed assets are classified into houses and buildings, machinery equipment, electronicequipment and transportation equipment and otherwise.
(4) Depreciation of fixed assets
1) Recognition of depreciation method and service life, expected net salvage value rate and annualdepreciation rate:
The depreciation of fixed assets shall be made by the straight-line method. The yearly depreciation raterecognized according to the category, service life and expected net salvage value rate of fixed assets is asfollows:
| Category of fixed assets | Expected net salvage value rate (%) | Expected service Life (year) | Annual depreciation rate (%) |
Houses and buildings
| Houses and buildings | 5.00 | 20.00 | 4.75 |
Machinery equipment
| Machinery equipment | 5.00 | 6.00-10.00 | 9.50-15.83 |
Electronic equipment
| Electronic equipment | 5.00 | 2.00-3.00 | 31.67-47.50 |
Transportation equipment
| Transportation equipment | 5.00 | 3.00-4.00 | 23.75-31.67 |
Others
| Others | 5.00 | 3.00-5.00 | 19.00-31.67 |
Depreciation of fixed assets of which a provision for impairment has been made: For a fixed asset of whicha provision for impairment has been made, the depreciation of the fixed asset shall be made based on theamount of deducting its expected net salvage value, depreciation amount and provision for impairmentfrom the original price of the fixed asset and remaining service life of the fixed assets.For the fixed assets that have reached the intended usable condition but not prepared the final account forcompletion, their costs shall be recognized at their estimated value, and their depreciation shall be madeaccordingly; after completion of the final account for completion, the original estimated value of the fixedassets shall be adjusted by their actual costs, but the original depreciation amount does not require adjusting.
2) Check of service life, expected net salvage value, and depreciation method of fixed assets:
The Company shall, at least at the end of each year, have a check on the service life, expected net salvagevalue, and the depreciation method of the fixed assets. If the Company finds that there is any differencebetween the expected service life and the previously estimated service life of a fixed asset, the expectedservice life of the fixed asset shall be adjusted; if there is any difference between the amount of expectednet salvage value and the previously estimated amount of the net salvage value, the expected net salvage
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value shall be adjusted; if any significant change is made on the form of the realization of the expectedeconomic benefits concerning a fixed asset, the method for the depreciation of the fixed asset shall bechanged. If any change is made to the service life, expected net salvage value, and depreciation method of afixed asset, it shall be regarded as a change in the accounting estimates.
(5) Treatment of subsequent expenditures for fixed assets
Subsequent expenditures incurred on a fixed asset refer to repair expenses, renovation expenses, repaircosts, and decoration expenses incurred in the course of the use of the fixed asset. Their accountingtreatment is as follows: Where subsequent expenditures of a fixed asset such as renovation expenses meetthe conditions of recognizing the fixed asset, they shall be recorded into the cost of the fixed asset, and thecarrying amount of the replaced part of the subsequent expenditures shall be deducted; where subsequentexpenditures of a fixed asset such as repair costs do not meet the conditions of recognizing the fixed asset,they shall be recorded into the profits and losses of the current period in which they are incurred; where thedecoration expenses of a fixed asset meet the conditions of recognizing the fixed asset, they shall bemeasured in a single detail account of "Fixed Assets", and the depreciation of the fixed asset shall be madeseparately by the straight-line method in a shorter time of the period of two decorations and remainingusable life of the fixed asset.The improvement expenditures incurred on a fixed asset leased by operating leases shall be capitalized andreasonably amortized as long-term prepaid expenses.
(6) Impairment test method and accounting and drawing method for impairment provision of fixed assetsSee Note “III. 25. Impairment of long-term assets” for the impairment test method and accounting anddrawing method for impairment provision of fixed assets.Construction in progressThe term "construction in progress" refers to all necessary expenditures incurred before the acquired fixedassets enable the project to reach expected usable condition, including project direct materials, directemployee compensation, installation costs for equipment to be installed and project construction, projectmanagement fees, net profits and losses of project commissioning and approved capitalized borrowingcosts.
(1) Valuation of construction in progress
The Company's construction in progress shall be measured individually by the construction project andvaluated at actual cost.
(2) The time when construction in process is carried forward to fixed assetsWhen the construction in progress reaches the expected usable condition, they shall be transferred to fixedassets at their actual cost. For the fixed assets that have reached the expected usable condition but have notprepared the final account for completion, they shall be charged to the account at their estimated value.They shall be adjusted after their actual value is recognized.See Note “III. 25. Impairment of long-term assets” for the impairment test method and accounting anddrawing method for impairment provision of constructions in progress.
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Borrowing costsBorrowing costs are interests and other costs incurred by the Company in connection with the borrowing ofthe funds, including interests, amortization of discounts or premiums related to borrowings, ancillary costsincurred in connection with the arrangement of borrowings, and exchange differences arising from foreigncurrency borrowings.
(1) Recognition of capitalization of borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction, or production of aqualifying asset shall be capitalized, and the amounts of other borrowing costs incurred shall be recordedinto the profits and losses of the period in which they are incurred. Qualifying assets are fixed assets,investment real estate, and inventories that necessarily take a substantial period of time for acquisition,construction, or production to get ready for their intended use or sale.
(2) Period of capitalization of borrowing costs
1) The time point of capitalization of borrowing costs:
The capitalization of borrowing costs commences only when all the following conditions are satisfied:
a. Expenditures for the asset have been incurred;b. Borrowing costs have been incurred; andc. Activities relating to the acquisition, construction, or production of the asset that is necessary to preparethe asset for its intended use or sale have commenced.
2) The time point of ceasing capitalization of borrowing costs:
Capitalization of borrowing costs ceases when the qualifying asset acquired, constructed, or producedbecomes ready for its intended use or sale. The subsequent borrowing costs shall be recorded in the profitsand losses of the current period.
3) Recognition of suspending capitalization of borrowing costs:
When an abnormal interruption occurs during the construction or production of an asset that satisfies theconditions for capitalization and the interruption continues for more than three months consecutively, thecapitalization of borrowing expense will be paused, the borrowing expense incurred during the suspensionwill be included in the current profits and losses.
(3) Computing method of capitalizing amount of borrowing costs
During the capitalization period, the amount of interest (including amortization of discounts or premiums)to be capitalized for each accounting period shall be recognized as follows:
1) If a specialized loan is borrowed for the purchase, construction, or production of assets that meet thecapitalization conditions, the amount shall be determined based on the actual interest expenses incurred inthe current period of the specialized loan minus the interest income obtained from depositing unused loanfunds in the bank or the investment income obtained from temporary investments;
2) Where general funds are borrowed for the acquisition, construction, or production of a qualifying asset,the amount of interest to be capitalized on such general borrowings shall be calculated and recognized byapplying a capitalization rate of such general borrowings to the weighted average of the excess amounts ofaccumulated expenditures on the asset over and above the amounts of special borrowings. The
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capitalization rate shall be calculated and recognized by the weighted average interest rate of generalborrowings.Where there is any discount or premium, the amount of discounts or premiums that shall be amortizedduring each accounting period shall be recognized by the real interest rate method, and an adjustment shallbe made to the amount of interest in each period. During the period of capitalization, the amount of interestcapitalized during each accounting period shall not exceed the amount of interest actually incurred to therelevant borrowings in the current period.Ancillary costs in connection with special borrowings that are incurred before the qualifying asset acquired,constructed, or produced becomes ready for its intended use or sale shall be capitalized on the basis of theincurred amount when they are incurred, and they shall be recorded into the cost of the qualifying asset;those incurred after the qualifying asset acquired, constructed or produced becomes ready for its intendeduse or sale shall be recognized as expenses on the basis of the incurred amount when they are incurred andshall be recorded into the profits and losses of the current period. The ancillary costs arising from a generalborrowing shall be recognized as expenses at their incurred amount when they are incurred and shall berecorded into the profits and losses of the current period.Usufruct assetsFor the determination method of right-of-use asset and accounting treatment method, please see Note “III.
35. Lease”.
Intangible assetsAn intangible asset is an identifiable non-monetary asset without physical substance owned or controlledby the Company. Intangible assets can be recognized only when they meet the conditions simultaneously asfollows:
a. They are consistent with the definition of intangible assets;b. The economic benefits related to intangible assets are likely to flow into the Company; andc. The cost of intangible assets can be measured reliably.
(1) Measurement of intangible assets
The intangible assets shall be measured according to their cost or fair value (if increased through businesscombination not involving enterprises under common control).
(2) Subsequent measurement
The Company shall analyze and judge the service life of intangible assets when it obtains intangible assets.If the Company is unable to forecast the period when the intangible asset can bring economic benefits to it,it shall be regarded as an intangible asset with an uncertain service life.With regard to an intangible asset with limited service life, its amortization amount shall be the amortizedby expected realization pattern of its economic benefits. If the Company is unable to recognize theanticipated realization pattern reliably, intangible assets shall be amortized by the straight-line method.The Company shall, at least at the end of each year, check the service life and the amortization method ofintangible assets with limited service life. If necessary, it shall adjust the said service life and amortization
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method.With regard to an intangible asset with uncertain service life, its amortization amount shall not beamortized, but the Company shall check the service life of the said intangible asset every year and shallcarry out an impairment test for it.
(3) Estimation of service life
As for intangible assets with limited service life, the estimation of their service life generally considers thefollowing factors:
1) The general life cycle of products manufactured by using the assets and information about the servicelife of similar assets available;
2) Present situation of technologies and process and estimation for future development trends;
3) Market demand of products manufactured or services rendered by using the assets;
4) Expected actions of present or potential competitors;
5) Expected maintenance expenses for economic capacity from the assets and the Company's expectedcapability to pay relevant expenses;
6) Laws and regulations or similar restrictions relating to the control period of the assets, such asconcession period and lease period;
7) Relevance with a service life of other assets held by the Company, etc.
(4) Division of research expenditures and development expenditures included in expenditures for internalresearch and development projects
1) Research expenditures in internal research and development projects shall be recorded into the profitsand losses of the current period when they are incurred.
2) The expenditures for the development stage of internal R&D projects shall be recognized as intangibleassets when the following conditions are met at the same time:
a. The development of the intangible asset is completed to make the use or sale of the intangible assetsfeasible technically;b. Have the intent to complete the intangible assets and use or sell them;c. How the intangible asset will generate economic benefits, including the ability to demonstrate theexistence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be usedinternally, the usefulness of the intangible asset;d. Availability of adequate technical, financial and other resources to complete the development and to useor sell the intangible asset;e. Ability to measure reliably the expenditure that is attributable to the intangible asset during itsdevelopment.Where the expenditures at the research stage or at the development stage cannot be distinguished, allexpenditures to research and development shall be included in the current profits and losses.
(5) Impairment test method and accounting and drawing method of impairment provision for intangibleassetsSee Note “III. 25. Impairment of long-term assets” for the impairment test method and accounting and
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drawing method of impairment provision for intangible assets.Impairment of long-term assetsOn the balance sheet date, if there is any sign showing possible impairment of assets (referring to the assetsother than inventories, equity instruments that have no quoted price and reliable fair value measurement inactive market, investment real estate measured by fair value model, consumable biological assets, assetsformed under construction contract, deferred income tax assets, residual value not guaranteed by the renterin the financing lease and financial assets), their recoverable amount shall be estimated on the basis ofsingle item assets. Where it is difficult to estimate the recoverable amount of the single item assets, therecoverable amount of the assets shall be recognized on the basis of their asset group or combination ofasset groups.The recoverable amount shall be recognized in light of the higher one of the net amount of the fair value ofthe single item assets, asset group, or combination of asset groups less the disposal expenses and thepresent value of the expected future cash flow of the single item assets, asset group or combination of assetgroups.Where the recoverable amount of the single item assets is lower than their carrying amount, a provision forthe asset impairment shall be made accordingly on the basis of the difference between the carrying amountof the single item assets and their recoverable amount. Where the recoverable amount of an asset group or acombination of asset groups is lower than its carrying amount, it shall be recognized as the correspondingimpairment loss. The amount of the impairment loss shall first charge against the carrying amount ofgoodwill which is apportioned to the asset group or combination of asset groups, then charge it against thecarrying amount of other assets in proportion to the weight of other assets in the asset group or combinationof asset groups with the goodwill excluded. The charges against the carrying amount of the assets aboveshall be treated as the impairment loss of the single item assets (including the goodwill), and a provision forimpairment of the single item assets shall be made accordingly.Once the above loss of asset impairment is recognized, it shall not be transferred back in future accountingperiods.Long-term unamortized expensesLong-term deferred expenses refer to the expenses incurred by the Company but attributable to the currentand subsequent accounting periods of more than one year (excluding one year), including the expenses forimprovement of fixed assets leased by operating lease.Long-term deferred expenses shall be recorded into the account based on their actual amount ofexpenditure and shall be averagely amortized by their beneficial period. If long-term deferred expenses cannot benefit subsequent accounting periods, the unamortized value of the project shall be all transferred tothe profits and losses of the current period.Contract liabilitiesContract liability refers to the Company's obligation to transfer goods to customers for consideration
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received or receivable from customers. If before the Company transfers the goods to the customer, thecustomer has paid the contract consideration or the Company has obtained the unconditional right toreceive payment, the Company will, at the earlier time point between the actual payment by the customerand the payment due, present the amount received or receivables as contract liabilities. Contract assets andcontract liabilities under the same contract are presented in net amount, and contract assets and contractliabilities under different contracts are not offset.Employee compensation
(1) Accounting treatment of short-term compensation
In the accounting period during which employees provide services to the Company, the Companyrecognizes the short-term compensation actually incurred as liabilities and charges them to the current-period profits and losses or relevant asset costs.
(2) Accounting treatment for post-employment benefits
Post-employment benefits can be divided into the defined contribution plan and the defined benefit plan
1) In the accounting period during which employees provide services for the Company, the amount to bedeposited calculated based on the defined contribution plan is recognized as liabilities and included in thecurrent profits and losses or relevant asset costs.
2) The accounting treatment for the defined benefit plan generally includes the following steps:
a. According to the Expected Cumulative Benefit Unit (ECBU) method, unbiased and mutually consistentactuarial assumptions are used to estimate relevant demographic and financial variables, quantify theobligations arising from the defined benefit plan, and determine the period to which the obligations relate;b. If there are assets in the defined benefit plan, the deficit or surplus formed by deducting the present valueof the defined benefit plan obligation from the fair value of the defined benefit plan assets shall berecognized as net liabilities or net assets of the defined benefit plan. For the defined benefit plan withsurplus, the Company should measure the net assets based on the surplus or asset ceiling of the benefit plan(whichever is lower). The asset ceiling refers to the present value of the economic interest that can beobtained by the Company from refunding or reducing future contributions to the defined benefit plan.c. At the end of the period, the costs of employee compensation arising from the defined benefit plan arerecognized as service costs, net interest on net liabilities or net assets of the defined benefit plan, andchanges arising from the remeasurement of net liabilities or net assets. The service costs and net interest onnet liabilities or net assets of the defined benefit plan are included in the current profits and losses orrelevant asset costs. In contrast, changes arising from the remeasurement of net liabilities or net assets areincluded in other comprehensive income and cannot be transferred back to profits and losses in subsequentaccounting periods. However, the amount recognized in other comprehensive income can be transferredwithin the equity section;d. Recognize a settlement gain or loss during settlement of the defined benefit plan.
(3) Accounting treatment for termination benefits
The liabilities of employees' wages and salaries that arise from the termination benefits shall be recognizedon the earlier one of the following two dates and included in the current profits and losses:
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1) When the Company cannot unilaterally cancel the termination benefits provided as a result of a plan toterminate employment or a proposal to downsize;
2) When the Company recognizes the cost or expense related to reconstruction involving the payment oftermination benefits.
(4) Accounting treatment for other long-term employee benefits
For other long-term employee benefits provided by the Company to its employees that comply with thedefined contribution plan, accounting treatment shall be conducted in accordance with the definedcontribution plan. For benefits other than these, accounting treatment will be undertaken in accordance withthe defined benefit plan. However, the portion of the relevant employee compensation costs that relate to"changes arising from remeasurement of net liabilities or net assets of the defined benefit plan" shall beincluded in the current profits and losses or related asset costs.
Lease liabilitiesFor the methods of recognition and accounting treatment of lease liabilities, please refer to Note “III. 35.Lease”.Estimated liabilities
(1) Recognition criteria of estimated liabilities
When business related to contingencies such as external guarantee, pending litigation or arbitration, productquality assurance, staff reduction, loss contract, restructuring obligations, and fixed asset disposalobligations that meet the following conditions, it shall be recognized as liabilities:
1) The liabilities are current obligations undertaken by the Company;
2) The fulfillment of the liabilities might cause outflow of economic benefits from the enterprise;
3) The amount of the liabilities can be reliably measured.
(2) Measurement methods of estimated liabilities
Accrued liabilities shall be measured on the best estimate of the expenditures required to fulfill currentobligations. If there is a continuous range for the necessary expenses and if all the outcomes within thisrange are equally likely to occur, the best estimate shall be determined by the midpoint of the range. Inother cases, the best estimate shall be determined by the following methods:
1) When a contingency is related to a single item, the best estimate shall be determined based on the mostprobable amount;
2) When a contingency is related to multiple items, the best estimate shall be calculated and determinedbased on all possible amounts and their probabilities of occurrence.If all or part of the expenditure required to settle the estimated liabilities of the Company is expected to becompensated by a third party or other parties, the amount of compensation shall be separately recognized asan asset only when it is virtually certain that the compensation will be obtained. The amount recognized forthe compensation shall not exceed the book value of the recognized estimated liabilities.
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Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment refers to the transaction of granting equity instruments or bearing liabilitiesrecognized on the basis of equity instrument for obtaining services from employees or other parties. Theshare-based payment is classified into equity-settled share-based payment and cash-settled share-basedpayment.
1) Equity-settled share-based payment
The equity-settled share-based payments in exchange for services provided by employees are measured atthe fair value of the equity instruments granted to employees on the grant date. The fair value is calculatedby the straight-line method and included in the relevant costs or expenses based on the best estimate of thenumber of vested equity instruments in the vesting period when it is vested only after the service in thevesting period is completed or the specified performance terms are met. When it is vested immediately aftergrant, it is included in relevant costs or expenses on the grant date, and the capital reserve is increasedaccordingly.On each balance sheet date during the vesting period, the Company makes the best estimate of subsequentinformation such as the latest change in the number of vesting employees to correct the estimated numberof vested equity instruments. The aforementioned estimated influences are included in current relevantcosts or expenses, and the capital reserves are adjusted correspondingly.The equity-settled share-based payment in exchange for the services of other parties shall be measured atthe fair value of the services of other parties on the obtaining date if the services of other parties can bemeasured reliably; the equity-settled share-based payment shall be measured at the fair value of the equityinstruments on the obtaining date of the services of other parties if the fair value of the services of otherparties cannot be measured reliably while the fair value of the equity instruments can be measured reliably,and be included in the relevant costs or expenses, and the shareholders' equity shall be increasedcorrespondingly.
2) Cash-settled share-based payment
The cash-settled share-based payments are measured at the fair value of liabilities determined based onshares or other equity instruments undertaken by the Company. When it is vested immediately after grant,it is included in relevant costs or expenses on the grant date, and the liabilities are increasedcorrespondingly; if it is vested after completing the services in the vesting period or meets the specifiedperformance terms, the current obtained services are included in costs or expenses based on the bestestimate of vesting and at fair value of liabilities borne by the Company on each balance sheet date of thevesting period, and the liabilities are increased correspondingly.On each balance sheet date and settlement date before the settlement of the relevant liabilities, re-measurethe fair value of the liabilities with the changes included in the current profits and losses.
(2) Relevant accounting treatment for amending and terminating share-based payment planWhen the Company amends the share-based payment plan, if the fair value of equity instruments granted isincreased due to the amendment, the increase of the services obtained will be recognized correspondingly
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by the increase of the fair value of equity instruments. The increase in the fair value of equity instrumentsrefers to the difference between the fair value of equity instruments before and after amendment on theamendment date. If the amendment reduces the total fair value of the share-based payment or adopts otherunfavorable methods to the employees, the accounting treatment of the obtained services will be continuedas if the modification has never occurred, unless the Company cancels part or all of the equity instrumentsgranted.During the vesting period, if the granted equity instrument is canceled, the Company will handle thecancellation as an accelerated vesting, the amount that shall be recognized during the remaining vestingperiod is immediately included in the current profits and losses with the capital reserves recognized at thesame time. If an employee or other party can choose to meet the non-vesting conditions but fails to meetthem during the vesting period, the Company shall treat that as a cancellation of the grant of equityinstruments.RevenueWhen the contract between the Company and the customer simultaneously meets the following conditions,the Company recognizes the revenue at the point when the customer obtains control over the relevant goods:
the parties to the contract have approved the contract and promised to perform their respective obligations;the contract clarifies the rights and obligations of the parties to the contract in relation to the transferredgoods or the provided services; the contract has clear payment terms related to the transferred goods; thecontract has commercial substance, that is, the performance of the contract will change the risk, timedistribution or amount of the Company's future cash flow; and the consideration that the Company isentitled to obtain due to its transfer of goods to customers is likely to be recovered.At the commencement date of the contract, the Company identifies each individual performance obligationin the contract, and allocates the transaction price to each individual performance obligation in accordancewith the relative proportion of the stand-alone selling price of the goods promised by each individualperformance obligation. When determining the transaction price, the Company considers the impact of avariable consideration, major financing components in the contract, non-cash consideration, considerationpayable to customers, and other factors.The Company recognizes the transaction price allocated to each individual performance obligation asrevenue at the point when the customer obtains control over the relevant goods. When judging whether thecustomer has obtained control over the goods, the Company considers the following signs: where theCompany has the current right to receive payment for the goods, that is, the customer has the currentpayment obligation for the goods; where the Company has transferred the legal ownership of the goods tothe customer, that is, the customer has the legal ownership of the goods; where the Company hastransferred the goods to the customer in kind, that is, the customer has taken possession of the goods inkind; where the Company has transferred the main risks and payments of the ownership of the goods to thecustomer, that is, the customer has obtained the main risks and payments of the ownership of the goods;where the customer has accepted the goods; and other signs that the customer has obtained control over thegoods.
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The Company mainly sells air conditioners and their accessories, and household appliances and theiraccessories, which usually only include the performance obligations of the transferred goods.
(1) Revenue from selling goods
1) For the revenue from domestic sales of products, the Company mainly adopts the form of payment inadvance. The Company recognizes the revenue when the product is outbound and delivered to thepurchaser, the shipping document is issued or the customer's receipt is obtained, the amount of revenuefrom product sales is determined, the payment for goods is recovered, or the receipt certificate is obtainedand the relevant economic benefits are likely to flow in.
2) In terms of the export sales income, the Company recognizes the revenue when the products are declaredand departed according to the contract, the bill of lading is obtained, and the amount of the sales revenue isdetermined.
(2) Revenue from rendering labor services
1) For the revenue from warehousing services, the Company will settle the revenue on a monthly basis bythe working hours and standard wages of the services provided, facilities used, and related expenses, andthe amount of revenue has been determined;
2) For the revenue from material processing services, the Company recognizes the revenue when thematerials are processed according to the contract and delivered to the customer to obtain the customer'ssigned receipt, and the amount of revenue has been determined;
3) The Company's service charge and commission income include the service charge income of acceptancebusiness, service charge income of entrusted loan, etc.For the service charge and commission income, the completion time of the contractual performanceobligations is determined according to the business settlement sheet formulated through settlement with thecustomer when the business is completed, and the specific amount of revenue is recognized according tothe terms and ratios stipulated in the business contract or agreement.
(3) Income from the transfer of the right to use assets
Income from the transfer of the right to use assets includes interest income, rental income, etc.The Company recognizes the income from the transfer of the right to use assets when the income amountcan be reliably measured and the relevant economic benefits are likely to flow into the enterprise.
1) The interest income of the Company mainly includes the interest income from deposits in financialenterprises and loan interest income. Interest income from deposits in financial enterprises is recognized ona regular basis based on the time of deposit and the effective interest rate. Loan interest refers to the incomerecognized by the Company for granting self-operated loans and accruing interest on a regular basis. Theloan interest income is recognized according to the effective interest rate method.The effective interest rate method refers to the method of calculating the amortized cost and interest incomeor interest expense for each period based on the effective interest rate financial assets or financial liabilities.The effective interest rate refers to the interest rate used to discount the future cash flows of a financialasset or financial liability within the expected period of existence or applicable shorter period into thecurrent book value of the financial asset or financial liability. When determining the effective interest rate,
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the Company estimates future cash flow based on all contractual terms of financial assets or financialliabilities, but does not consider the loss of future credits. All the charges, transaction fees, and premiumsor discounts paid or collected by the Company as part of the effective interest rate shall be considered whendetermining the effective interest rate.
2) The recognition conditions for the rental income of the Company are as follows:
a. A lease contract, agreement, or other settlement notices recognized by the Lessee are available;b. The obligations stipulated in the contract are fulfilled; the lease invoice is issued, and the price has beenobtained or will be obtained for sure;c. The rental cost can be measured reliably.Government grantsGovernment grants refer to the Company's free acquisition of monetary and non-monetary from thegovernment, excluding capital invested by the government as the owner. Government grants consist ofasset related government grants and income related government grants.Government grants obtained by the Company for the purchase, construction, or forming the long-termassets in other ways are defined as asset related government grants, and all the other government grants aredefined as income related government grants. If the government document does not specify the grant object,the following mode is adopted to classify the subsidies into income related government grants and assetrelated government grants:
(1) If the government document specifies the item to which the grant aims, the allocation should be basedon the relative proportion of the expenditure amount to form assets and the expenditure amount included inexpenses in the budget of this specific item, and this allocation proportion needs to be reviewed on everybalance sheet date and changed when necessary;
(2) If the government document provides only a general presentation of the purpose without specifying thespecific item, the grants shall be regarded as income related government grants.The asset related government grants are recognized as deferred income upon acquisition, and are includedin the profits and losses in reasonable and systematic installments over the useful life of the asset when therelevant asset reaches its intended usable state. Where the relevant assets are sold, transferred, scrapped, ordamaged before the end of their useful lives, the undistributed deferred income balance is transferred to thecurrent profits and losses of the asset disposal.In terms of income related government grants, those are used for compensating the related expenses orlosses in the later period, are recognized as deferred income upon acquisition and included in the currentprofits and losses during the period when the relevant costs or losses are recognized; those are used forcompensating the related cost expenses or losses incurred, are included in the current profits and lossesdirectly upon acquisition.Government grants related to daily activities are included in other income; government grants not related todaily activities are included in non-operating revenue and expenses.
(3) If policy preferential loans are obtained with interest discounts, accounting treatment should be carriedout by distinguishing between the following two ways of obtaining them:
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1) Where the financial department disburses the discount interest fund to the lending bank, the lending bankprovides a loan to the Company at a policy preferential interest rate, the fair value of the loan is used as theentry value of the loan, the borrowing cost is calculated according to the effective interest rate method, andthe difference between the actual amount received and the fair value of the loan is recognized as deferredincome. The deferred income is amortized using the effective interest rate method during the duration ofthe loan to offset the relevant borrowing cost;
2) Where the financial department disburses the discount interest fund to the Company directly, thecorresponding discount is used to offset the relevant borrowing costs.
(4) Government grants that are monetary assets are measured at the amount received or receivable.Government grants that are non-monetary assets are measured at the fair value; if the fair value cannot bereliably acquired, they are measured at the nominal amount. The Company usually recognizes andmeasures government grants based on the actual amount received upon receipt. However, funds that haveconclusive evidence at the end of the period, indicating that they meet the relevant conditions stipulated inthe financial support policy and are expected to receive financial support, are measured at the amountreceivable. Government grants measured at the amount receivable shall simultaneously comply with thefollowing conditions:
1) The authoritative government department has confirmed the amount of receivable grants by issuing adocument, or can be independently and reasonably calculated in accordance with the relevant provisions ofthe officially issued financial fund management measures, and it is predicted that its amount is not subjectto significant uncertainty;
2) The basis is the financially supported projects and their financial fund management measures that areofficially released by the local finance department and actively disclosed in accordance with the provisionsof the Regulation of the People's Republic of China on Disclosure of Government Information, as well asits financial fund management measures, and the management measures should be inclusive (any enterprisemeeting the defined conditions can apply for the grants), rather than specially formulated for specificenterprises;
3) Other conditions that shall be met according to specific conditions of the Company and this matter ofgrants.Deferred income tax assets/deferred income tax liabilitiesThe deferred income tax assets and deferred income tax liabilities are calculated and recognized based onthe difference between the tax base of the assets and liabilities and their book values (temporary difference).For deductible losses that can be deducted from taxable income in subsequent years in accordance with theprovisions of the tax law, the corresponding deferred income tax assets are recognized. For temporarydifferences arising from the initial recognition of goodwill, the corresponding deferred income taxliabilities are not recognized. For temporary differences arising from the initial recognition of assets orliabilities arising from non-business combination transactions that neither affect accounting profits nortaxable income (or deductible losses), the corresponding deferred income tax assets and deferred incometax liabilities are not recognized. At the balance sheet date, the deferred income tax assets and deferred
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income tax liabilities are measured at the tax rate applicable to the period during which the assets areexpected to be recovered, or the liabilities are expected to be settled.The Company recognizes the deferred income tax assets to the extent of the amount of the taxable incomewhich it is most likely to acquire and which can be deducted from the deductible temporary differences,deductible losses, and tax deductions.Deferred income tax liabilities are recognized for all taxable temporary differences arising from theinvestments in subsidiaries, joint ventures, and associates, except to the extent that both of the followingconditions are met: the Company is able to control the timing of the transferring back of the temporarydifferences; and it is likely that the temporary difference will not reverse in the foreseeable future. Deferredincome tax assets are recognized for all deductible temporary differences associated with investments insubsidiaries, joint ventures, and associates if all the following conditions are met: it is likely that thedeductible temporary difference will be transferred back in the foreseeable future, and it is likely thattaxable profit in the future will be available against which the deductible temporary difference can beutilized.The deferred income tax assets and the deferred income tax liabilities that meet the following conditionsare presented at the net amount after offsetting:
1) The deferred income tax assets and deferred income tax liabilities relate to the income taxes levied bythe same taxation authority on the same taxpayer of the Company; and
2) The taxpayer of the Company has a legal right to settle current income tax assets and current income taxliabilities on a net basis.LeaseLease refers to a contract in which the Company transferred or acquired the right to control the use of oneor more identified assets for a certain period of time in exchange for or payment of consideration. On thecontract commencement date, the Company evaluates whether the contract is a lease or includes a lease.
(1) With the Company as the Lessee
1) Initial measurement
On the commencement date of the lease term, the Company will recognize the right to use the leased assetsduring the lease term as the right-of-use asset, and recognize the current value of the unpaid lease paymentamount as a lease liability, except for short-term leases and low-value asset leases. When calculating thecurrent value of the lease payment amount, the Company uses the implied interest rate in lease as adiscount rate. If the implied interest rate in lease cannot be determined, the Lessee incremental borrowinginterest rate is used as the discount rate.Right-to-use assets should be initially measured at cost. The cost includes:
a. The initially measured amount of the lease liabilities;b. The lease payments made on or before the commencement date of the lease term, if there is a leaseincentive, deduct the amount related to the lease incentive that has been enjoyed;c. The initial direct expenses incurred by the Lessee;d. The estimated cost that the Lessee will incur for dismantling and removing the leased assets, restoring
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the site where the leased assets are located, or restoring the leased assets to the state agreed in the leaseterms.
2) Subsequent measurement
The Company calculates and distills depreciation by referring to fixed asset depreciation policies (see Note“III. 20. Fixed assets”). If the Company can reasonably determine the obtaining of the ownership of theleasing assets when the lease term expires, it will calculate and distill depreciation within the remainingservice life of the leasing asset. Where it is impossible to reasonably determine if the ownership of theleased assets can be acquired upon the expiration of the lease term, the Company will make depreciationwithin a shorter period between the lease term and the remaining useful life of the leased assets.For lease liabilities, the Company calculates its interest expenses for each period of the lease term at a fixedperiodic interest rate, and includes them in the current profits and losses or in the cost of related assets. Thevariable lease payment amount that is not included in the measurement of lease liabilities is included in thecurrent profits and losses or cost of related assets when actually incurred.After the lease term starts, in case of changes in the substantial fixed payment amount, the estimatedamount payable of the guarantee residual value, the index or ratio used for determining the lease paymentamount, a change in the evaluation results or actual vesting of the purchase option, renewal option ortermination option, the Company re-measures the lease liability based on the current value of the changedlease payment amount, and adjusts the book value of the right-of-use assets accordingly. If the book valueof the right-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced,the Company will include the remaining amount in the current profits and losses.
3) Short-term leases and low value asset leases
For short-term leases (with a lease term of no more than 12 months from the beginning of the lease) andlow-value asset leases, the Company adopts a simplified treatment method to include the lease paymentamount into the cost of relevant asset costs or the current profits and losses during the lease term by thestraight-line method or other systematic and reasonable methods instead of recognizing the right-of-useassets and lease liabilities.
(2) With the Company as the lessor
On the commencement date of the lease, the Company divides the lease into financial lease and operatinglease based on the essence of the transaction. Financial lease refers to the lease that transfers substantiallyalmost all risks and rewards associated with the ownership of the assets. Operating lease refers to the leasesother than the financial lease.
1) Operating leases
The Company adopts the straight-line method to recognize the lease payment amount of the operating leaseas the rental income during the lease term. Variable lease payments in connection with the operating leasethat are not included in lease payment are included in the current profits and losses when actually incurred.
2) Financial lease
On the beginning date of the lease term, the Company recognizes the financial lease receivables andderecognizes the financial lease assets. The financial lease receivables are initially measured by the net
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lease investment (the sum of the unguaranteed residual value and the present value of the lease paymentsthat have not been received on the beginning date of the lease term discounted at the implied interest rate ofthe lease), and interest income during the lease term is calculated and recognized at a fixed periodic interestrate. The variable lease payments obtained by the Company that are not included in the measurement of netlease investment are included in the current profits and losses when actually incurred.Discontinued operationDiscontinued operation refers to a constituent part that meets one of the following conditions, can bedistinguished separately, and has been disposed of or classified as held for sale:
(1) This constituent part represents an independent main business or a separate main business area;
(2) This constituent part is part of an associated plan for disposing of an independent main business or aseparate main business area;
(3) This constituent part is a subsidiary specially acquired for resale.
The Company presents the profits and losses from continuing operations and the profits and losses fromdiscontinued operations in the Consolidated Income Statement and the Income Statement respectively. Forthe non-current asset or disposal group held for sale that does not comply with the definition ofdiscontinued operation, its impairment loss and amount transferred back and profits and losses fromdisposal shall be presented as profits and losses from continuing operations. The impairment losses andamount transferred back of discontinued operations and other operating profits and losses as well as profitsand losses from disposal are presented as profits and losses from discontinued operations.For the discontinued operations presented in the current period, the information previously presented asprofits and losses from continuing operations is re-presented as profits and losses from discontinuedoperations for comparable accounting period in the current financial statements. Where the disposal groupthat is intended to be discontinued rather than sold meets the conditions for the relevant constituent part inthe definition of discontinued operations, it is presented as discontinued operation from the date ofdiscontinuation of use. Where the control over a subsidiary is lost due to reasons such as selling theinvestment in the subsidiary and this subsidiary complies with the definition of discontinued operations, therelevant profits and losses from discontinued operations are presented in the Consolidated IncomeStatement.Segment reportThe Company determines the operating segments based on the internal organizational structure,management requirements and internal reporting systems, determines the report segments based on theoperating segments, and discloses segment information.Operating segments refer to the constituent part of the Company that meets the following conditions at thesame time:
(1) This constituent part can generate revenue and expenses in daily activities;
(2) The management of the Company can regularly evaluate the operating results of the constituent part todetermine the allocation of resources and evaluate its performance;
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(3) The Company can obtain the relevant accounting information of this constituent part such as itsfinancial status, operating results and cash flows. If two or more operating segments have similar economiccharacteristics and meet certain conditions, they can be merged into one operating segment.Share repurchaseIf the Company's shares are acquired due to registered capital reduction or employee rewards, the amountactually paid shall be treated as treasury shares, and shall be registered at the same time for future reference.If the repurchased shares are cancelled, the difference between the total face value of the cancelled sharesand the amount actually paid for the repurchase shall be offset against capital reserve. If the capital reserveis insufficient, the offset shall be made against retained earnings. If the repurchased shares are rewarded toemployees of the Company as equity settled share-based payments, refer to Note “III. 31. Share-basedpayment” for corresponding accounting treatment.HedgingTo avoid certain risks, the Company hedges certain financial instruments as hedging instruments. Hedgethat meets the prescribed conditions will be handled by the Company using hedge accounting methods. TheCompany's hedging includes fair value hedging, cash flow hedging and hedging of net investment inoverseas operations.At the beginning of the hedging, the Company officially designates the hedging tool and the hedged item,and prepares written documents on the hedging relationship and the risk management strategy and riskmanagement objectives of the Company engaged in hedging. In addition, the Company will continue toassess the effectiveness of the hedging when and after the hedging begins.
(1) Fair value hedging
For eligible hedging instruments designated as fair value hedging, the gains or losses generated thereby areincluded in the current profits and losses. If a hedging instrument is used to hedge non-trading equityinstrument investment (or its component) that is selected to be measured at fair value with changesincluded in other comprehensive income, the gains and losses generated by the hedging instrument areincluded in other comprehensive income. Gains or losses of a hedged item arising from the hedged riskexposure is included in the current profits and losses, while the book value of the hedged item is adjusted.If a hedged item is measured at fair value, the gains or losses incurred by the hedged item due to the hedgedrisk exposure are included in the current profits and losses or other comprehensive income, and there is noneed to adjust the book value of the hedged item.When the Company revokes the designation of the hedging relationship, the hedging instrument hasexpired or been sold, the contract is terminated or exercised, or the conditions for the use of hedgeaccounting are no longer met, terminate the use of hedge accounting.
(2) Cash flow hedging
For eligible hedging instruments designated as cash flow hedging, the portion of the gains or lossesgenerated thereby that is determined to be an effective hedge is included in other comprehensive income,while the portion that is determined to be an ineffective hedge is included in the current profits and losses.
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If the expected transaction causes the Company to subsequently recognize a non-financial asset or non-financial liability, or if the expected transaction of the non-financial asset or non-financial liability forms afirm commitment applicable to fair value hedge accounting, the Company will transfer out the amount ofcash flow hedge reserve originally recognized in other comprehensive income and include it in the initialrecognition amount of the asset or liability. For other cash flow hedging, the Company will, during thesame period when the expected cash flow being hedged affects profits or losses, transfer out the amount ofcash flow hedge reserve originally recognized in other comprehensive income and include it in the currentprofits and losses.If it is expected that all or part of the net losses originally included in other comprehensive income cannotbe compensated in the future accounting period, transfer the portion which cannot be compensated out andinclude it in the current profits and losses.When the Company terminates the use of hedge accounting for cash flow hedging, the accumulated cashflow hedge reserves that have been included in other comprehensive income are retained when future cashflows are expected to continue to occur, and are transferred out of other comprehensive income andincluded in the current profits and losses when future cash flows are expected to no longer appear.
(3) Hedging of net investment in overseas operations
Hedging of net investment in overseas operations is accounted for using a method similar to the cash flowhedging. Among the gains or losses of hedging instruments, the portion that is determined to be an effectivehedging is included in other comprehensive income, while the portion that is determined to be anineffective hedging is included in the current profits and losses.Gains and losses that have been included in other comprehensive income are transferred out of othercomprehensive income and included in the current profits and losses when disposing of overseas operations.Safe production expensesSome subsidiaries of the Company withdraw safe production expenses in accordance with nationalregulations and include them in the costs of related products or current profits and losses.Where the expenses for production safety extracted are of a cost nature, the special reserves shall bedirectly written off. If the expenses for safe production extracted are used to form fixed assets, the expensesincurred by the account collection of "construction in progress" shall be recognized as fixed assets when thesafety project is completed and reaches the expected serviceable state; at the same time, write off specialreserves based on the cost of forming fixed assets and recognize accumulated depreciation of the sameamount. The fixed asset will no longer be depreciated in the future.Risk reserveIn accordance with regulations such as the Administrative Measures for the Reserve Accrual of FinancialEnterprises ("Accrual Measures") (CJ [2012] No. 20) issued by the Ministry of Finance, the subsidiaries ofthe Company in financial industry, have established a general risk reserve on the basis of withdrawing assetimpairment provision of assets to compensate for potential losses related to risk assets that have not yetbeen identified. This general risk reserve is treated as a profit distribution and is an integral part of the
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owner's equity, which in principle should be no less than 1.5% of the ending balance of risk assets.According to the requirements of the accrual measures, if the proportion of the general reserve balance offinancial enterprises to the ending balance of risk assets is difficult to reach 1.5% at one time, it can be paidin installments, and in principle, it should not exceed 5 years.Changes in major accounting policies and accounting estimate
(1) Changes in major accounting policies
On December 13, 2022, the Ministry of Finance issued the Accounting Standards for EnterprisesInterpretation No.16 (hereinafter referred to as "Interpretation No.16"). According to the requirements ofthe Ministry of Finance, the content of "deferred income tax related to assets and liabilities arising from asingle transaction is not applicable to the accounting treatment of initial recognition exemption" came intoeffect on January 1, 2023. According to the relevant requirements, the Company made correspondingchanges to the accounting policies, and this change in accounting policies did not have a significant impacton the Company's financial indicators such as total assets, total liabilities, net assets, and net profit.The following shows adjustments to the financial statements at the beginning of the year of the firstimplementation of the new accounting standard for the first time starting from 2023:
Unit: RMB
| Statement Item | Amount as of December 31, 2022 (before change) | Amount as of January 1, 2023 (after change) | ||
| Consolidated Statements | Company's statement | Consolidated Statements | Company's statement | |
| Non-current assets: | ||||
| Deferred income tax assets | 14,598,866,870.23 | 11,399,848,879.09 | 14,644,877,571.11 | 11,399,848,879.09 |
| Total non-current assets | 99,884,719,906.36 | 68,573,037,866.58 | 99,930,730,607.24 | 68,573,037,866.58 |
| Total assets | 355,024,758,878.82 | 286,630,030,242.19 | 355,070,769,579.70 | 286,630,030,242.19 |
| Non-current liabilities: | ||||
| Deferred income tax liabilities | 2,225,127,743.74 | 710,194,350.26 | 2,271,138,444.62 | 710,194,350.26 |
| Total non-current liabilities | 36,776,774,049.04 | 28,240,257,442.77 | 36,822,784,749.92 | 28,240,257,442.77 |
| Total liabilities | 253,148,710,864.63 | 229,227,597,889.80 | 253,194,721,565.51 | 229,227,597,889.80 |
| Total liabilities and shareholders' equity | 355,024,758,878.82 | 286,630,030,242.19 | 355,070,769,579.70 | 286,630,030,242.19 |
(2) Changes in major accounting estimates
None.IV. TaxesMain tax categories and tax rates
| Category | Tax Basis | Tax Rate |
| Value-added tax | Value added from sales of goods or provision of labor services | 13.00%, 9.00%, 6.00%, etc. |
| Urban maintenance & construction tax | Turnover tax payable | 7.00%, 5.00% |
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| Category | Tax Basis | Tax Rate |
| Education surcharge | Turnover tax payable | 3.00% |
| Local education surcharge | Turnover tax payable | 2.00% |
| Business income tax | Taxable income | 34.00%, 25.00%, 20.00%, 16.50%, 15.00%, etc. |
| [Note 1] The Company's subsidiaries including Gree Hong Kong Electric Appliances Sales Co., Ltd., Yinlong Electric Vehicle (Hong Kong) Group Co., Ltd., and Energy Storage Technology (China) Group Co., Ltd., operate in Hong Kong Special Administrative Region, where the profit tax rate is 16.50%. |
| [Note 2] The Company's subsidiaries Gree (Brazil) Electric Appliances Co., Ltd. and Brazil United Electric Appliances Industry and Commerce Co., Ltd. operate in Brazil, with a federal business income tax rate of 34.00% in Brazil. |
| [Note 3] The Company's subsidiaries DunAn Precision Machinery (USA) Group Co., Ltd., DunAn Microstaq, Inc., and Altairnano, Inc., operate in the United States, and are subject to paying federal taxes and state taxes. The federal tax rate is 21.00% while the state tax rates for DunAn Precision and DunAn Microstaq, are 0.50%?1.00% of gross profit on sales. |
[Note 4] The Company's subsidiary, DunAn Metals (Thailand) Co., Ltd. operates in Thailand, where thebusiness income tax rate is 20.00%.
| [Note 5] The Company's subsidiary, Japan DunAn International Co., Ltd., is located in Japan, where the business income tax rate is 23.20%. |
| [Note 6] The Company's subsidiary, DunAn Korea Co., Ltd. operates in South Korea, where the business income tax rate is 10.00%. |
| [Note 7] The Company's subsidiary, DunAn International (Europe) GmbH operates in Frankfurt, Germany, where the business income tax rate is 15.00%; |
| [Note 8] Some subsidiaries of the Company are small and low-profit enterprises, subject to the Announcement No.12 of 2023 issued by the Ministry of Finance and the State Taxation Administration of Announcement on Further Supporting the Development of Small and Micro Enterprises and Individual Businesses in Relevant Tax Policies, where the taxable income is calculated at a reduced rate of 25.00%, and the business income tax is paid at a rate of 20.00%. |
Tax preferences
| (1) The Company was identified as a high-tech enterprise in 2023, and has been enjoying preferential policies for high-tech enterprises (High-tech Enterprise Certificate No. GR202344009175). The Company applied the income tax rate of 15.00%, which is valid for 3 years. |
| (2) Deemed to be high and new tech enterprises, the following subsidiaries of the Company applied the enterprise income tax rate of 15.00% in 2023. |
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| No. | Name of Taxpayer | High-tech Enterprise Certificate No. | Date of Obtaining the High-tech Enterprise Certificate | Valid Period |
| 1 | Zhuhai Landa Compressor Co., Ltd. | GR202344010890 | December 2023 | 3 years |
| 2 | Hefei Landa Compressor Co., Ltd. | GR202334001713 | October 2023 | 3 years |
| 3 | Zhengzhou Landa Compressor Co., Ltd. | GR202341000260 | November 2023 | 3 years |
| 4 | Wuhan Landa Compressor Co., Ltd. | GR202342000821 | October 2023 | 3 years |
| 5 | Gree Electric Enterprise (Maanshan) Ltd. | GR202334005154 | November 2023 | 3 years |
| 6 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | GR202244010903 | December 2022 | 3 years |
| 7 | Zhuhai Kaibang Motor Manufacturing Co., Ltd. | GR202144007599 | December 2021 | 3 years |
| 8 | Hefei Kaibang Motor Co., Ltd. | GR202334002919 | October 2023 | 3 years |
| 9 | Henan Kaibang Motor Co., Ltd. | GR202341001262 | November 2023 | 3 years |
| 10 | Gree (Hefei) Electric Appliances Co., Ltd. | GR202334003315 | October 2023 | 3 years |
| 11 | Zhuhai Gree Daikin Precision Mold Co., Ltd. | GR202244010633 | December 2022 | 3 years |
| 12 | Zhuhai Gree Dakin Device Co., Ltd. | GR202144007849 | December 2021 | 3 years |
| 13 | Green Refrigeration Equipment Engineering Research Center of Zhuhai Gree Group Co., Ltd. | GR202344006183 | December 2023 | 3 years |
| 14 | Gree (Zhengzhou) Electric Appliances Co., Ltd. | GR202341000272 | November 2023 | 3 years |
| 15 | Gree (Wuhan) Electric Appliances Co., Ltd. | GR202242006898 | November 2022 | 3 years |
| 16 | Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | GR202213000723 | October 2022 | 3 years |
| 17 | Gree (Wuhu) Electric Appliances Co., Ltd. | GR202334001396 | October 2023 | 3 years |
| 18 | Gree (Shijiazhuang) Electric Appliances Co., Ltd. | GR202213000331 | October 2022 | 3 years |
| 19 | Zhuhai EWPE Information Technology Inc. | GR202244010117 | December 2022 | 3 years |
| 20 | Gree (Changsha) HVAC Equipment Co., Ltd. | GR202343003172 | October 2023 | 3 years |
| 21 | Gree TOSOT (Suqian) Home Appliances Co., Ltd. | GR202332019062 | December 2023 | 3 years |
| 22 | Wuhu Gree Precision Manufacturing Co., Ltd. | GR202234003673 | October 2022 | 3 years |
| 23 | Zhuhai Gree Precision Mold Co., Ltd. | GR202344006995 | December 2023 | 3 years |
| 24 | Zhuhai Gree Intelligent Equipment Technology Institute Co., Ltd. | GR202344006963 | December 2023 | 3 years |
| 25 | Gree New Material Co., Ltd. | GR202244008332 | December 2022 | 3 years |
| 26 | Gree (Hangzhou) Electric Appliances Co., Ltd. | GR202333008152 | December 2023 | 3 years |
| 27 | Gree (Nanjing) Electric Appliances Co., Ltd. | GR202232008326 | November 2022 | 3 years |
| 28 | Gree (Luoyang) Electric Appliances Co., Ltd. | GR202241002986 | December 2022 | 3 years |
| 29 | Zhuhai Edgeless Integrated Circuit Co., Ltd. | GR202144007551 | December 2021 | 3 years |
| 30 | Hefei Kinghome Electrical Co., Ltd. | GR202134001678 | September 2021 | 3 years |
| 31 | Zhuhai Gree Mechanical and Electrical Engineering Co., Ltd. | GR202344009878 | December 2023 | 3 years |
Page 215 of 310
| No. | Name of Taxpayer | High-tech Enterprise Certificate No. | Date of Obtaining the High-tech Enterprise Certificate | Valid Period |
| 32 | Zhuhai Gree Green Renewable Resources Co., Ltd. | GR202244004245 | December 2022 | 3 years |
| 33 | Gree Altairnano New Energy Inc. | GR202144004177 | December 2021 | 3 years |
| 34 | Zhuhai Guangtong Automobile Co., Ltd. | GR202344009746 | December 2023 | 3 years |
| 35 | Zhuhai Gree Altairnano Electric Appliance Co., Ltd. | GR202144006478 | December 2021 | 3 years |
| 36 | Hebei Gree Titanium New Energy Co., Ltd. | GR202213004750 | December 2022 | 3 years |
| 37 | Northern Aotai Nanotechnologies Co., Ltd. | GR202113001126 | September 2021 | 3 years |
| 38 | Zhuhai Gree Intelligent Equipment Co., Ltd. | GR202244003127 | December 2022 | 3 years |
| 39 | Zhejiang DunAn Thermal Technology Co., Ltd. | GR202333008719 | December 2023 | 3 years |
| 40 | Zhuhai DunAn Thermal Technology Co., Ltd. | GR202144001846 | December 2021 | 3 years |
| 41 | Tianjin Huaxin Machinery Co., Ltd. | GR202212000479 | November 2022 | 3 years |
| 42 | Hangzhou Safety Equipment Co., Ltd. | GR202333000665 | December 2023 | 3 years |
| 43 | Zhejiang DunAn Hetian Metals Co., Ltd. | GR202133006933 | December 2021 | 3 years |
| 44 | Zhuhai Huayu Metal Co., Ltd. | GR202144002525 | December 2021 | 3 years |
| 45 | Chongqing Huachao Metal Co., Ltd. | GR202151100597 | November 2021 | 3 years |
| 46 | Zhejiang DunAn Machinery Co., Ltd. | GR202133002758 | December 2021 | 3 years |
| 47 | Zhejiang DunAn Electro-Mechanical Technology Co., Ltd. | GR202133001775 | December 2021 | 3 years |
| 48 | Suzhou Huayue Metal Co., Ltd. | GR202332005590 | November 2023 | 3 years |
| 49 | DunAn Automotive Thermal Management Technology Co., Ltd. | GR202333001123 | December 2023 | 3 years |
| 50 | Jiangsu Tongsheng Heat Exchanger Co., Ltd. | GR202332010309 | December 2023 | 3 years |
| 51 | Jilin Songliang Seed Industry Technology Co., Ltd. | GR202222000173 | November 2022 | 3 years |
| 52 | DunAn (Wuhu) Zhongyuan Automatic Control Co., Ltd. | GR202134000039 | September 2021 | 3 years |
(3) The following subsidiaries of the Company enjoy the country's western development policy, andapplied the income tax rate of 15.00%.
| No. | Name of Taxpayer | Start time |
| 1 | Gree (Chongqing) Electric Appliances Co., Ltd. | 2008/1/1 |
| 2 | Chongqing Landa Compressor Co., Ltd. | 2015/1/1 |
| 3 | Chongqing Kaibang Motor Co., Ltd. | 2013/1/1 |
| 4 | Gree Chengdu Xinhui Medical Equipment Co., Ltd. | 2020/4/8 |
| 5 | Gree (Chengdu) Electric Appliances Co., Ltd. | 2022/1/1 |
Page 216 of 310
| No. | Name of Taxpayer | Start time |
| 6 | Gree (Ganzhou) Electric Appliances Co., Ltd. | 2023/1/1 |
| 7 | Chengdu Guangtong Automobile Co., Ltd. | 2017/6/13 |
(4) The following subsidiaries of the Company are entitled to enjoy the preferential policy of businessincome tax in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, with an income tax rate of
15.00%.
| No. | Name of Taxpayer | Start time |
| 1 | Zhuhai Mingruida Supply Chain Technology Co., Ltd. | 2022/1/1 |
(5) According to the Announcement on the Value-Added Tax Deduction Policy for AdvancedManufacturing Enterprises (Announcement No. 43 of 2023 issued by the Ministry of Finance and the StateTaxation Administration), from January 1, 2023 to December 31, 2027, advanced manufacturingenterprises are allowed to deduct the value-added tax payable by an additional 5% of the deductible inputtax amount in the current period; the Company and some of its subsidiaries enjoy the above preferentialpolicies.
(6) According to the Notice of the Ministry of Finance and the State Taxation Administration on Value-added Tax Policies for Software Products (CS [2011] No. 100), general value-added taxpayers who sellsoftware products developed and produced by themselves will be subject to refund policy for the portion oftheir actual value-added tax burden exceeding 3%. Some subsidiaries of the Company are subject to value-added tax refund if the actual value-added tax burden exceeds 3%.V. Notes to items in consolidated financial statementsFor the following note items (including notes to the main items of the parent company's financialstatements), unless otherwise specified, "the end of the period" means December 31, 2023, "the beginningof the period" means January 1, 2023, and "the end of the previous year" means December 31, 2022, "thecurrent year" refers to 2023, and "the previous year" refers to 2022. Unless otherwise stated, the amountunit is Yuan.Monetary funds
| Item | Ending Balance | Beginning balance |
| Cash on hand | 747,248.45 | 678,327.53 |
| Bank deposit | 57,386,642,916.17 | 67,106,080,448.62 |
| Other monetary funds [Note 1] | 35,532,754,818.90 | 48,296,387,517.05 |
| Deposits in the central bank [Note 2] | 1,388,929,188.19 | 1,267,324,345.11 |
| Deposits in other banks | 23,842,392,737.43 | 36,150,447,388.93 |
| Subtotal | 118,151,466,909.14 | 152,820,918,027.24 |
| Accrued interest | 5,953,520,380.48 | 4,663,414,224.15 |
Page 217 of 310
| Item | Ending Balance | Beginning balance |
| Total | 124,104,987,289.62 | 157,484,332,251.39 |
| Including the total amount deposited outside mainland China | 512,193,597.72 | 480,814,074.59 |
| [Note 1] The balance at the end of the period of other monetary capital refers to banks' acceptance bill deposits, guarantee deposits, letter of credit deposits, etc., where the restricted fund was RMB35,062,650,448.84; |
| [Note 2] The statutory deposit reserve in the Company's deposits in the central bank is RMB1,382,019,092.73, and its use is restricted; |
| [Note 3] Except in above situations, there are no other funds in the ending balance of monetary funds that are restricted in use or have potential recovery risks due to mortgage, pledge or freezing. |
Trading financial assets
| Item | Ending Balance | Beginning balance |
| Financial assets measured at fair value with changes included in other comprehensive income | 9,614,423,403.40 | 3,867,203,363.52 |
| Including: Debt instrument investment | 9,591,172,203.40 | 3,845,900,963.52 |
| Equity instrument investments | 23,251,200.00 | 21,302,400.00 |
| Total | 9,614,423,403.40 | 3,867,203,363.52 |
Derivative financial assets
| Item | Ending Balance | Beginning balance |
| Foreign exchange derivatives | 108,919,513.22 | |
| Total | 108,919,513.22 |
Notes receivable
(1) Notes receivable presentation by categories
| Item | Ending Balance | Beginning balance |
| Trade acceptance draft | 87,340,130.52 | 6,818,428.95 |
| Total | 87,340,130.52 | 6,818,428.95 |
(2) Notes receivable have pledged at the end of the period
None.
(3) Notes receivable that have been endorsed or discounted at the end of the period and have not yet dueon the balance sheet date
| Item | Amount Derecognized at the End of the Period | Amount Recognized at the End of the Period |
Page 218 of 310
| Item | Amount Derecognized at the End of the Period | Amount Recognized at the End of the Period |
| Trade acceptance draft | 2,600,520.63 | |
| Total | 2,600,520.63 |
Accounts receivable
(1) Accounts receivable disclosed by account age
| Account age | Ending Balance | Beginning balance |
| Within 1 year | 13,969,080,305.98 | 12,746,203,387.66 |
| 1?2 years | 1,399,796,274.58 | 1,416,147,908.71 |
| 2?3 years | 1,134,033,141.29 | 877,548,093.14 |
| Over 3 years | 3,089,537,345.23 | 2,577,872,659.51 |
| Subtotal | 19,592,447,067.08 | 17,617,772,049.02 |
| Less: Bad debt reserves | 3,492,969,949.52 | 2,793,029,425.57 |
| Total | 16,099,477,117.56 | 14,824,742,623.45 |
[Note] The Company's accounts receivable with an account age of over 1 year are mainly subsidyreceivables for dismantling waste electrical and electronic products and payments for new energy vehicles.
(2) Bad debt accrual method by categories
| Category | Ending Balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt reserves accrued by individual item | 1,289,240,411.21 | 6.58 | 1,183,947,802.62 | 91.83 | 105,292,608.59 |
| Accounts receivable with bad debt reserves accrued by portfolios | 18,303,206,655.87 | 93.42 | 2,309,022,146.90 | 12.62 | 15,994,184,508.97 |
| Including: Account age portfolio | 16,283,805,825.87 | 83.11 | 1,906,323,339.24 | 11.71 | 14,377,482,486.63 |
| Low-risk portfolio | 2,019,400,830.00 | 10.31 | 402,698,807.66 | 19.94 | 1,616,702,022.34 |
| Total | 19,592,447,067.08 | 100.00 | 3,492,969,949.52 | 17.83 | 16,099,477,117.56 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt reserves accrued by individual item | 1,345,411,996.82 | 7.64 | 1,116,288,302.43 | 82.97 | 229,123,694.39 |
| Accounts receivable with bad debt reserves accrued by portfolios | 16,272,360,052.20 | 92.36 | 1,676,741,123.14 | 10.30 | 14,595,618,929.06 |
| Including: Account age portfolio | 14,562,451,303.20 | 82.65 | 1,475,714,843.63 | 10.13 | 13,086,736,459.57 |
Page 219 of 310
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Low-risk portfolio | 1,709,908,749.00 | 9.71 | 201,026,279.51 | 11.76 | 1,508,882,469.49 |
| Total | 17,617,772,049.02 | 100.00 | 2,793,029,425.57 | 15.85 | 14,824,742,623.45 |
1) Accounts receivable with bad debt reserves accrued by individual item
| Company Name | Ending Balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| 69 units in total | 1,289,240,411.21 | 1,183,947,802.62 | 91.83 | It is expected to be difficult to recover in full |
| Total | 1,289,240,411.21 | 1,183,947,802.62 | 91.83 | |
(Continued)
| Company Name | Beginning balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| 69 units in total | 1,345,411,996.82 | 1,116,288,302.43 | 82.97 | It is expected to be difficult to recover in full |
| Total | 1,345,411,996.82 | 1,116,288,302.43 | 82.97 | |
2) In the portfolio, accounts receivable with bad debt reserves accrued by account age portfolio
| Account age | Ending Balance | ||
| Book balance | Bad debt reserves | Credit loss rate (%) | |
| Within 1 year | 13,447,724,928.12 | 672,386,248.32 | 5.00 |
| 1?2 years | 1,072,880,131.92 | 203,605,581.83 | 18.98 |
| 2?3 years | 792,595,070.82 | 229,609,905.14 | 28.97 |
| Over 3 years | 970,605,695.01 | 800,721,603.95 | 82.50 |
| Total | 16,283,805,825.87 | 1,906,323,339.24 | 11.71 |
3) In the portfolios, the Accounts receivable with bad debt reserves accrued by low risk portfolio
| Company Name | Ending Balance | ||
| Book balance | Bad debt reserves | Credit loss rate (%) | |
| Low-risk portfolio | 2,019,400,830.00 | 402,698,807.66 | 19.94 |
| Total | 2,019,400,830.00 | 402,698,807.66 | 19.94 |
(3) Bad debt reserves accrued, recovered or reversed in the current period
| Category | Beginning balance | Change of the current period | Ending Balance | |
| Accrual/recovery/transferring back | Write-off | |||
| Accrual by individual item | 1,116,288,302.43 | 67,659,500.19 | 1,183,947,802.62 | |
| Account age portfolio | 1,475,714,843.63 | 430,660,213.05 | 51,717.44 | 1,906,323,339.24 |
Page 220 of 310
| Category | Beginning balance | Change of the current period | Ending Balance | |
| Accrual/recovery/transferring back | Write-off | |||
| Low-risk portfolio | 201,026,279.51 | 201,672,528.15 | 402,698,807.66 | |
| Total | 2,793,029,425.57 | 699,992,241.39 | 51,717.44 | 3,492,969,949.52 |
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Accounts receivable actually written off in the current period
| Item | Written Off Amount |
| 10 units in total | 51,717.44 |
| Total | 51,717.44 |
(5) Accounts receivable and contract assets of the top 5 debtors in terms of ending balance collected bydebtorsThe total amount of accounts receivable and contract assets of the top 5 debtors in terms of ending balancecollected by debtors is RMB4,925,454,628.46, accounting for 23.54% of the ending balance of accountsreceivable and contract assets, and the amount of bad debt provision is RMB1,062,641,020.88.Contract assets
(1) Contract assets
| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Accrual by individual item | 7,841,594.46 | 7,841,594.46 | 7,841,594.46 | 7,841,594.46 | ||
| Account age portfolio | 1,006,698,488.92 | 422,787,788.10 | 583,910,700.82 | 1,127,165,757.29 | 395,385,285.59 | 731,780,471.70 |
| Low-risk portfolio | 317,305,464.00 | 62,404,031.17 | 254,901,432.83 | 382,514,539.00 | 66,555,192.76 | 315,959,346.24 |
| Total | 1,331,845,547.38 | 493,033,413.73 | 838,812,133.65 | 1,517,521,890.75 | 469,782,072.81 | 1,047,739,817.94 |
(2) Bad debt reserves accrued, recovered or reversed in the current period
| Item | Beginning balance | Accrual/recovery/transferring back in the current period | Total |
| Accrual by individual item | 7,841,594.46 | 7,841,594.46 | |
| Account age portfolio | 395,385,285.59 | 27,402,502.51 | 422,787,788.10 |
| Low-risk portfolio | 66,555,192.76 | -4,151,161.59 | 62,404,031.17 |
| Total | 469,782,072.81 | 23,251,340.92 | 493,033,413.73 |
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(3) Contract assets actually written off in the current period
None.Receivables financing
Page 221 of 310
(1) Receivables financing presentation by categories
| Item | Ending Balance | Beginning balance |
| Notes receivable measured at fair value | 9,795,997,038.02 | 28,274,911,539.46 |
| Including: Bank acceptance draft | 9,652,625,873.81 | 28,016,413,651.48 |
| Financial company acceptance bill | 143,371,164.21 | 258,497,887.98 |
| Accounts receivable measured at fair value | 380,092,630.39 | 152,398,805.74 |
| Including: Accounts receivable | 380,092,630.39 | 152,398,805.74 |
| Total | 10,176,089,668.41 | 28,427,310,345.20 |
(2) Receivables financing pledged by the Company at the end of the period
| Item | Pledged Amount at the End of the Period |
| Banker's acceptance bill | 5,033,716,307.04 |
| Total | 5,033,716,307.04 |
(3) Receivables financing that has been endorsed or discounted by the Company at the end of the periodbut not yet due at the balance sheet date
| Item | Amount Derecognized at the End of the Period | Amount Recognized at the End of the Period |
| Banker's acceptance bill | 30,462,789,477.03 | |
| Financial company acceptance bill | 981,153.01 | |
| Total | 30,463,770,630.04 |
(4) Receivables financing ? credit impairment provision of accounts receivable
1) Credit impairment provision accrued by portfolios
| Item | Ending Balance | Bad debt reserves | ||
| Book balance | Change in fair value | Book Value | ||
| Accounts receivable | 380,092,630.39 | 380,092,630.39 | 22,939,575.95 | |
| Total | 380,092,630.39 | 380,092,630.39 | 22,939,575.95 | |
2) Changes in credit impairment provision
| Item | Beginning balance | Accrual/recovery/transferring back | Ending Balance |
| Accounts receivable | 18,346,188.11 | 4,593,387.84 | 22,939,575.95 |
| Total | 18,346,188.11 | 4,593,387.84 | 22,939,575.95 |
(5) Receivables financing actually written off in the current period
None.Advance payments
(1) Prepayments presented by account age
| Account age | Ending Balance | Beginning balance |
Page 222 of 310
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 2,305,877,292.53 | 92.51 | 2,099,933,220.14 | 89.56 |
| 1?2 years | 43,605,485.46 | 1.75 | 188,034,392.04 | 8.02 |
| 2?3 years | 98,923,012.64 | 3.97 | 9,925,947.44 | 0.42 |
| Over 3 years | 44,241,604.68 | 1.77 | 46,775,285.86 | 2.00 |
| Total | 2,492,647,395.31 | 100.00 | 2,344,668,845.48 | 100.00 |
(2) Significant prepayments aged over one year
None.
(3) Prepayments of the top 5 prepayment objects in terms of ending balance collected by prepaymentobjects
| The aggregate balance amount of prepayments of the top 5 suppliers in the balance collected by the supplier was RMB1,474,084,591.94, accounting for 59.14% of the total balance of prepayments at the end of the period. |
Other receivables
| Item | Ending Balance | Beginning balance |
| Dividends receivable | 19,936,649.83 | 1,260,498.66 |
| Other receivables [Note 1] | 806,621,972.59 | 803,017,460.14 |
| Total | 826,558,622.42 | 804,277,958.80 |
[Note 1] Other receivables in the table above refer to other receivables after deduction of interestreceivables and dividends receivable;[Note 2] The Company has no interest receivable balance at the end and the beginning of the period.
(1) Dividends receivable
1) Dividends receivable
| Item | Ending Balance | Beginning balance |
| Dividends receivable | 19,936,649.83 | 1,260,498.66 |
| Total | 19,936,649.83 | 1,260,498.66 |
2) Important dividends receivable aged over 1 year
None.
(2) Other receivables
1) Disclosure by account age
| Account age | Ending Balance | Beginning balance |
| Within 1 year | 559,642,182.51 | 175,729,511.54 |
| 1?2 years | 49,650,562.46 | 411,297,254.70 |
| 2?3 years | 87,315,224.98 | 100,645,380.37 |
Page 223 of 310
| Account age | Ending Balance | Beginning balance |
| Over 3 years | 559,302,826.00 | 500,287,750.22 |
| Subtotal | 1,255,910,795.95 | 1,187,959,896.83 |
| Less: Bad debt reserves | 449,288,823.36 | 384,942,436.69 |
| Total | 806,621,972.59 | 803,017,460.14 |
2) Classification by nature of payment
| Nature of payment | Ending Balance | Beginning balance |
| Intercourse funds | 763,529,291.78 | 661,459,896.83 |
| Equity and asset transfer payments | 492,381,504.17 | 526,500,000.00 |
| Subtotal | 1,255,910,795.95 | 1,187,959,896.83 |
| Less: Bad debt reserves | 449,288,823.36 | 384,942,436.69 |
| Total | 806,621,972.59 | 803,017,460.14 |
3) Disclosure by classification of bad debt reserves accrual methods
| Category | Ending Balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Other accounts receivable with bad debt reserves accrued by individual item | 510,787,480.98 | 40.67 | 354,908,028.59 | 69.48 | 155,879,452.39 |
| Other accounts receivable with bad debt reserves accrued by portfolios | 745,123,314.97 | 59.33 | 94,380,794.77 | 12.67 | 650,742,520.20 |
| Including: Account age portfolio | 745,123,314.97 | 59.33 | 94,380,794.77 | 12.67 | 650,742,520.20 |
| Total | 1,255,910,795.95 | 100.00 | 449,288,823.36 | 35.77 | 806,621,972.59 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Other accounts receivable with bad debt reserves accrued by individual item | 510,842,233.78 | 43.00 | 298,353,952.59 | 58.40 | 212,488,281.19 |
| Other accounts receivable with bad debt reserves accrued by portfolios | 677,117,663.05 | 57.00 | 86,588,484.10 | 12.79 | 590,529,178.95 |
| Including: Account age portfolio | 677,117,663.05 | 57.00 | 86,588,484.10 | 12.79 | 590,529,178.95 |
| Total | 1,187,959,896.83 | 100.00 | 384,942,436.69 | 32.40 | 803,017,460.14 |
Other accounts receivable with bad debt reserves accrued by individual item
| Company Name | Ending Balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| Unit 1 | 172,325,809.58 | 129,244,357.19 | 75.00 | It is expected to be difficult to to |
Page 224 of 310
| Company Name | Ending Balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| Recover in full | ||||
| Unit 2 | 221,500,000.00 | 110,750,000.00 | 50.00 | It is expected to be difficult to recover in full |
| 13 units remaining | 116,961,671.40 | 114,913,671.40 | 98.25 | It is expected to be difficult to recover in full |
| Total | 510,787,480.98 | 354,908,028.59 | 69.48 | |
(Continued)
| Company Name | Beginning balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| Unit 1 | 172,380,562.38 | 86,190,281.19 | 50.00 | It is expected to be difficult to recover in full |
| Unit 2 | 221,500,000.00 | 110,750,000.00 | 50.00 | It is expected to be difficult to recover in full |
| 13 units remaining | 116,961,671.40 | 101,413,671.40 | 86.71 | It is expected to be difficult to recover in full |
| Total | 510,842,233.78 | 298,353,952.59 | 58.40 | |
Other receivables in the portfolio with the accrual of bad debt reserves by the aging
| Account age | Ending Balance | ||
| Book balance | Bad debt reserves | Credit loss rate (%) | |
| Within 1 year | 559,642,182.51 | 27,982,109.24 | 5.00 |
| 1?2 years | 48,506,430.27 | 6,714,536.70 | 13.84 |
| 2?3 years | 85,315,224.98 | 12,990,629.28 | 15.23 |
| Over 3 years | 51,659,477.21 | 46,693,519.55 | 90.39 |
| Total | 745,123,314.97 | 94,380,794.77 | 12.67 |
4) Accrual of bad debt reserves
| Bad debt reserves | Phase I | Phase II | Phase III | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Beginning balance | 8,562,921.73 | 376,379,514.96 | 384,942,436.69 | |
| Accrual in the current period | 19,419,187.51 | 44,967,199.16 | 64,386,386.67 | |
| Wrote-off in the current period | 40,000.00 | 40,000.00 | ||
| Ending Balance | 27,982,109.24 | 421,306,714.12 | 449,288,823.36 |
5) Bad debt reserves accrued, recovered or reversed in the current period
| Category | Beginning balance | Change of the current period | Ending Balance |
Page 225 of 310
| Accrual/recovery/transferring back | Write-off | |||
| Accrual by individual item | 298,353,952.59 | 56,554,076.00 | 354,908,028.59 | |
| Account age portfolio | 86,588,484.10 | 7,832,310.67 | 40,000.00 | 94,380,794.77 |
| Total | 384,942,436.69 | 64,386,386.67 | 40,000.00 | 449,288,823.36 |
[Note] There is no significant recovery or transfer back of bad debt reserves during the current period.
6) Other receivables were actually written off in the current period
| Item | Written Off Amount |
| 1 units in total | 40,000.00 |
7) Other receivables of top 5 debtors in terms of ending balance collected by debtorsThe total amount of other receivables of top 5 debtors in terms of ending balance collected by debtors isRMB751,557,816.50, accounting for 59.84% of the total balance of ending balance of other receivables,and the amount of bad debt provision is RMB260, 736,456.91.
8) Other receivables due to centralized fund management
None.Buying back the sale of financial assets
| Item | Ending Balance | Beginning balance |
| Bonds | 3,930,985,000.00 | |
| Accrued interest | 4,431,450.15 | |
| Subtotal | 3,935,416,450.15 | |
| Less: Provision for impairment | 3,077,495.66 | |
| Total | 3,932,338,954.49 |
Inventory
(1) Classification of inventories
| Item | Ending Balance | ||
| Book balance | Inventory falling price reserves/impairment provision of contract performance costs | Book Value | |
| Raw materials | 7,057,081,762.87 | 1,425,810,833.17 | 5,631,270,929.70 |
| Goods in process and contract performance costs | 2,134,877,242.86 | 115,317,125.00 | 2,019,560,117.86 |
| Finished goods | 21,827,045,795.09 | 2,943,541,383.93 | 18,883,504,411.16 |
| Development costs | 5,674,994,638.60 | 5,674,994,638.60 | |
| Development products | 369,809,931.38 | 369,809,931.38 | |
| Total | 37,063,809,370.80 | 4,484,669,342.10 | 32,579,140,028.70 |
(Continued)
Page 226 of 310
| Item | Beginning balance | ||
| Book balance | Inventory falling price reserves/impairment provision of contract performance costs | Book Value | |
| Raw materials | 10,672,997,728.11 | 1,009,327,287.63 | 9,663,670,440.48 |
| Goods in process and contract performance costs | 2,403,582,415.78 | 2,403,582,415.78 | |
| Finished goods | 23,183,839,506.90 | 1,770,944,083.73 | 21,412,895,423.17 |
| Development costs | 4,834,028,484.47 | 4,834,028,484.47 | |
| Total | 41,094,448,135.26 | 2,780,271,371.36 | 38,314,176,763.90 |
(2) Inventory falling price reserves and impairment provision of contract performance costs
| Item | Beginning balance | Increased amount in the current period | Decreased amount in the current period | Ending Balance |
| Accrual | Write-off amount | |||
| Raw materials | 1,009,327,287.63 | 520,096,944.19 | 103,613,398.65 | 1,425,810,833.17 |
| Unfinished goods | 115,317,125.00 | 115,317,125.00 | ||
| Finished goods | 1,770,944,083.73 | 1,442,784,118.73 | 270,186,818.53 | 2,943,541,383.93 |
| Total | 2,780,271,371.36 | 2,078,198,187.92 | 373,800,217.18 | 4,484,669,342.10 |
Specific bases for making a provision for the decline in the value of inventories and reasons for reversingor writing off the provision for the decline in the value of inventories in the current period:
| Item | The specific basis for making a provision for the decline in value of inventories | Write-off of inventory falling price reserves in the current period |
| Raw materials | Inventory cost or net realizable value, whichever is lower | Received or sold in the current period |
| Unfinished goods | Inventory cost or net realizable value, whichever is lower | Received or sold in the current period |
| Finished goods | Inventory cost or net realizable value, whichever is lower | Sold in the current period |
| (3) Capitalization amount of borrowing costs included in the ending balance of inventory None. |
| (4) Amortization amount of contract performance costs in the current year of RMB272,628,491.22. |
Non-current assets due within one year
| Item | Ending Balance | Beginning balance |
| Other debt investments are due within 1 year | 2,181,118,917.45 | 3,000,000,000.00 |
| Long-term receivables due within 1 year | 55,162,876.25 | 41,094,547.81 |
| Subtotal | 2,236,281,793.70 | 3,041,094,547.81 |
| Add: Accrued interest of other debt investments due within 1 year | 176,614,895.44 | 275,847,602.74 |
| Less: Provision for impairment | 1,263,229.85 | 2,750,517.36 |
| Total | 2,411,633,459.29 | 3,314,191,633.19 |
Page 227 of 310
Other current assets
| Item | Ending Balance | Beginning balance |
| Input tax to be deducted and prepaid tax | 2,225,932,314.59 | 2,057,987,526.82 |
| Bond products | 100,000,000.00 | |
| Monetary investment products | 22,059,399,315.54 | 2,415,000,000.00 |
| Others | 181,031,697.63 | 189,229,261.68 |
| Subtotal | 24,566,363,327.76 | 4,662,216,788.50 |
| Add: Accrued interests | 341,107,724.98 | 72,656,393.15 |
| Less: Provision for impairment | 38,529,298.59 | 30,296,241.01 |
| Total | 24,868,941,754.15 | 4,704,576,940.64 |
Disbursement of loans and advances
(1) Distribution of enterprises and individuals
| Item | Ending Balance | Beginning balance |
| Loans and advances measured at amortized costs: | ||
| Issuance of corporate loans and advances | 558,000,000.00 | 737,270,000.00 |
| Including: (1) Loans | 558,000,000.00 | 492,550,000.00 |
| (2) Discount | 244,720,000.00 | |
| Subtotal | 558,000,000.00 | 737,270,000.00 |
| Add: Accrued interests | 671,437.49 | 961,030.27 |
| Less: Provision for impairment | 14,944,828.26 | 18,431,750.00 |
| Book value of issued corporate loans and advances | 543,726,609.23 | 719,799,280.27 |
(2) Changes in loan loss reserves
| Item | Ending Balance | Beginning balance |
| Beginning balance | 18,431,750.00 | 106,975,750.00 |
| Transferring back to the current period | 3,486,921.74 | 88,544,000.00 |
| Ending Balance | 14,944,828.26 | 18,431,750.00 |
Debt investment
(1) Debt investment
| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Debt investment | 1,149,000,000.00 | 1,149,000,000.00 | 150,000,000.00 | 150,000,000.00 | ||
| Accrued interest | 1,744,482.05 | 1,744,482.05 | 351,500.00 | 351,500.00 | ||
Page 228 of 310
| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Total | 1,150,744,482.05 | 1,150,744,482.05 | 150,351,500.00 | 150,351,500.00 | ||
(2) Debt investment
| Item | Ending Balance | Beginning balance | ||||||
| Face value | Coupon rate | Effective interest rate | Date Due | Face value | Coupon rate | Effective interest rate | Date Due | |
JinyuGuoshitrust plan
| Jinyu Guoshi trust plan | 999,000,000.00 | 5.30% | 5.30% | 2025-9-30 |
(Twenty-six)Agricultural Banktreasurybonds
| (Twenty-six) Agricultural Bank treasury bonds | 150,000,000.00 | 2.28% | 2.28% | 2025-11-25 | 150,000,000.00 | 2.28% | 2.28% | 2025-11-25 |
Total
| Total | 1,149,000,000.00 | 150,000,000.00 |
(3) Accrual of impairment provision
None.
Page 229 of 310
Other debt investments
(1) Other debt investments
| Item | Ending Balance | ||||
| Cost | Accrued interest | Change in fair value | Book Value | Accumulated loss reserves recognized in other comprehensive income | |
| Treasury bond | 316,621,828.84 | 3,551,890.42 | 6,786,591.16 | 326,960,310.42 | |
| Corporate bonds and financial bonds | 899,720,207.58 | 14,149,657.51 | 9,897,862.42 | 923,767,727.51 | |
| Negotiable certificate of deposit | 16,667,335,007.45 | 803,512,433.47 | 17,470,847,440.92 | ||
| Subtotal | 17,883,677,043.87 | 821,213,981.40 | 16,684,453.58 | 18,721,575,478.85 | |
| Less: Other debt investments due within 1 year | 2,180,334,092.16 | 176,614,895.44 | 784,825.29 | 2,357,733,812.89 | |
| Total | 15,703,342,951.71 | 644,599,085.96 | 15,899,628.29 | 16,363,841,665.96 | |
(Continued)
| Item | Beginning balance | ||||
| Cost | Accrued interest | Change in fair value | Book Value | Accumulated loss reserves recognized in other comprehensive income | |
| Treasury bond | 315,342,376.29 | 3,551,890.42 | 8,069,643.71 | 326,963,910.42 | |
| Corporate bonds and financial bonds | 699,557,264.91 | 13,484,589.02 | -12,404,624.91 | 700,637,229.02 | |
| Negotiable certificate of deposit | 16,052,655,138.75 | 535,940,207.52 | 16,588,595,346.27 | ||
| Subtotal | 17,067,554,779.95 | 552,976,686.96 | -4,334,981.20 | 17,616,196,485.71 | |
Page 230 of 310
| Item | Beginning balance | ||||
| Cost | Accrued interest | Change in fair value | Book Value | Accumulated loss reserves recognized in other comprehensive income | |
| Less: Other debt investments due within 1 year | 3,000,000,000.00 | 275,847,602.74 | 3,275,847,602.74 | ||
| Total | 14,067,554,779.95 | 277,129,084.22 | -4,334,981.20 | 14,340,348,882.97 | |
| [Note] Other debt investment held by the Company is classified as financial assets measured at fair value with changes included in other comprehensive income based on the management's intention and the cash flow of the contract, and listed as other debt investments, and non-current assets due within 1 year according to its liquidity. On December 31, 2023, there was no significant difference between the cost of the Company's negotiable certificate of deposit and its fair value. |
(2) Other debt investments
| Other debt items | Ending Balance | Beginning balance | ||||||
| Face value | Coupon rate (%) | Effective interest rate (%) | Date Due | Face value | Coupon rate (%) | Effective interest rate (%) | Date Due | |
| Negotiable certificate of deposit | 16,667,000,000.00 | 3.10-4.00 | 3.10-4.00 | February 26, 2024 to October 21, 2027 | 16,050,000,000.00 | 3.20-4.00 | 3.20-4.00 | September 10, 2023 to October 21, 2027 |
| 16 coupon-bearing bond 17 | 200,000,000.00 | 2.74 | 3.10 | 2026-08-04 | 200,000,000.00 | 2.74 | 3.10 | 2026-08-04 |
| 20 Nongfa 08 | 200,000,000.00 | 3.45 | 3.54 | 2025-09-23 | 200,000,000.00 | 3.45 | 3.54 | 2025-09-23 |
| 23 CZBank Tier 2 Capital Note 02 | 200,000,000.00 | 3.50 | 3.50 | 2033-11-27 | ||||
| 22 Huafa Group MTN006 | 180,000,000.00 | 4.20 | 4.20 | 2025-04-25 | 180,000,000.00 | 4.20 | 4.20 | 2025-04-25 |
Page 231 of 310
| Other debt items | Ending Balance | Beginning balance | ||||||
| Face value | Coupon rate (%) | Effective interest rate (%) | Date Due | Face value | Coupon rate (%) | Effective interest rate (%) | Date Due | |
| 22 Huafa Group MTN009B | 180,000,000.00 | 4.00 | 4.00 | 2025-06-20 | 180,000,000.00 | 4.00 | 4.00 | 2025-06-20 |
| 16 coupon-bearing bond 17 | 100,000,000.00 | 2.74 | 3.44 | 2026-08-04 | 100,000,000.00 | 2.74 | 3.44 | 2026-08-04 |
| 21 Huafa Group MTN007 | 70,000,000.00 | 4.65 | 4.65 | 2024-06-28 | 70,000,000.00 | 4.65 | 4.65 | 2024-06-28 |
| 22 Huafa Group MTN012B | 60,000,000.00 | 3.75 | 3.75 | 2025-08-16 | 60,000,000.00 | 3.75 | 3.75 | 2025-08-16 |
| 22 coupon-bearing bond 19 | 20,000,000.00 | 2.60 | 2.61 | 2032-09-01 | 20,000,000.00 | 2.60 | 2.61 | 2032-09-01 |
| 19 Huafa Group MTN008B | 10,000,000.00 | 5.30 | 5.31 | 2024-12-11 | 10,000,000.00 | 5.30 | 5.31 | 2024-12-11 |
| Total | 17,887,000,000.00 | 17,070,000,000.00 | ||||||
[Note] Other debt investments in the table above include other debt investments due within one year.
Page 232 of 310
Long-term receivables
(1) Long-term receivables
| Item | Ending Balance | ||
| Book balance | Bad debt reserves | Book Value | |
| Goods of installment sales | 186,803,996.60 | 26,735,849.27 | 160,068,147.33 |
| Less: Unrealized financing income | 18,178,746.29 | 18,178,746.29 | |
| Less: Long-term accounts receivable due within 1 year | 55,162,876.25 | 1,263,229.85 | 53,899,646.40 |
| Less: Reclassified to other current assets | 49,819,628.06 | 24,015,200.54 | 25,804,427.52 |
| Total | 63,642,746.00 | 1,457,418.88 | 62,185,327.12 |
(Continued)
| Item | Beginning balance | ||
| Book balance | Bad debt reserves | Book Value | |
| Goods of installment sales | 235,996,799.59 | 32,095,022.13 | 203,901,777.46 |
| Less: Unrealized financing income | 15,048,370.77 | 15,048,370.77 | |
| Less: Long-term accounts receivable due within 1 year | 41,094,547.81 | 2,750,517.36 | 38,344,030.45 |
| Less: Reclassified to other current assets | 61,048,258.76 | 26,623,856.04 | 34,424,402.72 |
| Total | 118,805,622.25 | 2,720,648.73 | 116,084,973.52 |
[Note] The Company reclassifies long-term receivables due within 1 year to non-current assets due within 1year and reclassifies overdue long-term receivables to other current assets.
(2) Disclosure by classification of bad debt reserves accrual methods
| Category | Ending Balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Long-term accounts receivable with bad debt reserves accrued by individual item | |||||
| Long-term accounts receivable with bad debt reserves accrued by portfolios | 63,642,746.00 | 100.00 | 1,457,418.88 | 2.29 | 62,185,327.12 |
| Including: Account age portfolio | 63,642,746.00 | 100.00 | 1,457,418.88 | 2.29 | 62,185,327.12 |
| Total | 63,642,746.00 | 100.00 | 1,457,418.88 | 2.29 | 62,185,327.12 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Long-term accounts receivable with bad debt reserves accrued by individual item | |||||
Page 233 of 310
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Long-term accounts receivable with bad debt reserves accrued by portfolios | 118,805,622.25 | 100.00 | 2,720,648.73 | 2.29 | 116,084,973.52 |
| Including: Account age portfolio | 118,805,622.25 | 100.00 | 2,720,648.73 | 2.29 | 116,084,973.52 |
| Total | 118,805,622.25 | 100.00 | 2,720,648.73 | 2.29 | 116,084,973.52 |
Long-term accounts receivable with bad debt reserves accrued by portfolios
| Account age | Ending Balance | ||
| Book balance | Bad debt reserves | Credit loss rate (%) | |
| Goods of installment sales | 63,642,746.00 | 1,457,418.88 | 2.29 |
| Total | 63,642,746.00 | 1,457,418.88 | 2.29 |
(3) Bad debt reserves accrued, recovered or reversed in the current period
| Category | Beginning balance | Accrual/recovery/transferring back | Ending Balance |
| Goods of installment sales | 2,720,648.73 | -1,263,229.85 | 1,457,418.88 |
| Total | 2,720,648.73 | -1,263,229.85 | 1,457,418.88 |
(4) Long-term accounts receivable were actually written off in the current periodNone.
Page 234 of 310
Long-term equity investments
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Profits and losses on investment recognized by equity method | Adjustment of other comprehensive income | Declared distribution of cash dividends or profits | Accrual of impairment reserves | Original value | Impairment provision | |
| I. Joint ventures | ||||||||||
| SL Group Jiangwan Rice Industry Co., Ltd | 1,166,358.97 | -7,424.29 | 1,158,934.68 | |||||||
| Subtotal | 1,166,358.97 | -7,424.29 | 1,158,934.68 | |||||||
| II. Associates | ||||||||||
| Gree (Vietnam) Electric Appliances, Inc. | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | ||||||
| Outlook All Media Co., Ltd. | 35,478,374.26 | 509,236.20 | 35,987,610.46 | |||||||
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 15,239,073.92 | 301,716.52 | 150,000.00 | 15,390,790.44 | ||||||
| Coresing Semiconductor Technology Co., Ltd. | 20,071,663.90 | 1,219,923.05 | 21,291,586.95 | |||||||
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | 4,131,807,804.94 | 279,197,890.11 | -10,162,802.37 | -1,020,652,263.34 | 2,821,794,849.12 | |||||
| Zhuhai Jiayao Food | 989,000.00 | -181,112.17 | 807,887.83 | |||||||
Page 235 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Profits and losses on investment recognized by equity method | Adjustment of other comprehensive income | Declared distribution of cash dividends or profits | Accrual of impairment reserves | Original value | Impairment provision | |
| Technology Co., Ltd. | ||||||||||
| Henan Yuze Finance Leasing Co., Ltd. | 52,591,103.02 | 1,627,073.67 | 1,642,181.50 | 52,575,995.19 | ||||||
| Zhuhai Hanling Equity Investment Partnership (Limited Partnership) | 956,251,794.91 | 163,000,000.00 | 43,500,899.07 | 14,430,690.00 | 822,322,003.98 | |||||
| Lanzhou Guangtong New Energy Automobile Co., Ltd. | 97,017,695.89 | -4,781,436.49 | 92,236,259.40 | |||||||
| Guizhou Qianzhixing New Energy Co., Ltd. | 1,528,855.03 | -409,538.08 | 1,119,316.95 | |||||||
| Ningxia Nenggu New Energy Technology Co., Ltd. | 194,350.24 | -164,803.35 | 29,546.89 | |||||||
| Beijing Liyin Automobile Technology Co., Ltd. | 4,605,056.55 | 4,605,056.55 | ||||||||
| Sichuan Jinshi Leasing Co., Ltd. | 293,539,194.32 | 21,397,575.85 | 527,247.07 | 4,625,461.17 | 310,838,556.07 | |||||
| Zhuji Rushan Huiying | 53,905,361.06 | 21,000,000.00 | 193,323.38 | 33,098,684.44 | ||||||
Page 236 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Profits and losses on investment recognized by equity method | Adjustment of other comprehensive income | Declared distribution of cash dividends or profits | Accrual of impairment reserves | Original value | Impairment provision | |
| Venture Investment Partnership (Limited Partnership) | ||||||||||
| DunAn (Tianjin) Energy Saving System Co., Ltd. | 228,893,881.80 | 40,179,812.17 | 6,636,258.28 | 275,709,952.25 | ||||||
| Subtotal | 5,893,064,219.19 | 1,940,009.35 | 989,000.00 | 463,197,890.11 | 93,229,867.45 | -1,013,488,757.99 | 20,848,332.67 | 4,489,748,105.87 | 1,940,009.35 | |
| Total | 5,894,230,578.16 | 1,940,009.35 | 989,000.00 | 463,197,890.11 | 93,222,443.16 | -1,013,488,757.99 | 20,848,332.67 | 4,490,907,040.55 | 1,940,009.35 | |
[Note 1] The change in other comprehensive income in the current period of the joint venture of the Company, Zhuhai Ronglin Equity Investment Partnership(Limited Partnership), is due to the fluctuation of the share price of Wingtech Technology Co., Ltd. held by it and the disposal of the equity of Wingtech TechnologyCo., Ltd.;[Note 2] According to the partnership agreement of Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) (hereinafter referred to as "Zhuhai Ronglin"),the Company invested in Zhuhai Ronglin as a limited partner. Upon the decision of all partners, the general partner is entrusted to perform partnership affairs. Formatters related to the partnership submitted by the general partner to all partners for discussion, the voting method of one partner, one vote, and unanimouslyapproved by all partners is implemented to make resolutions. The Company has no control over Zhuhai Ronglin, and Zhuhai Ronglin is not included in the scope ofconsolidation of the Company's statements during the report period.Other equity instrument investments
(1) Other equity instrument investments
| Item | Ending Balance | Beginning balance |
Page 237 of 310
| Item | Ending Balance | Beginning balance |
| San'an Optoelectronics Co., Ltd. | 1,586,483,387.45 | 1,965,635,734.92 |
| Wingtech Technology Co., Ltd. | 1,517,194,078.45 | 1,885,465,957.10 |
| Shanghai Highly (Group) Co., Ltd. | 626,491,486.09 | 522,205,716.62 |
| RSMACALLINE-HSHS | 125,653,291.82 | 143,361,786.48 |
| COFCO Trading (Suibin) Agricultural Development Co., Ltd. | 7,000,000.00 | 7,000,000.00 |
| Xinjiang Joinworld Company Limited | 2,043,265.56 | 145,786,602.78 |
| Total | 3,864,865,509.37 | 4,669,455,797.90 |
(2) Non-trading equity instrument investment
| Item | Dividend income recognized | Gains included in other comprehensive income in the current period | Losses included in other comprehensive income in the current period | Accumulated gains included in other comprehensive income at the end of the current period | Accumulated losses included in other comprehensive income at the end of the current period | Amount transferred from other comprehensive income to retained earnings | Reason for designation as measured at fair value with changes included in other comprehensive income | Reasons for amount transferred from other comprehensive income to retained earnings |
| San'an Optoelectronics Co., Ltd. | 5,727,376.85 | 379,152,347.47 | 413,516,612.55 | Based on the management's intention and contractual cash flow | ||||
| RSMACALLINE-HSHS | 4,553,508.27 | 27,806,733.63 | 583,728,425.60 | Based on the management's intention and contractual cash flow | ||||
| Shanghai Highly (Group) Co., Ltd. | 961,076.44 | 103,698,375.62 | 519,052,993.48 | Based on the management's intention and contractual cash flow | ||||
| COFCO Trading (Suibin) Agricultural Development Co., Ltd. | 800,000.00 | Based on the management's intention and contractual cash flow |
Page 238 of 310
| Item | Dividend income recognized | Gains included in other comprehensive income in the current period | Losses included in other comprehensive income in the current period | Accumulated gains included in other comprehensive income at the end of the current period | Accumulated losses included in other comprehensive income at the end of the current period | Amount transferred from other comprehensive income to retained earnings | Reason for designation as measured at fair value with changes included in other comprehensive income | Reasons for amount transferred from other comprehensive income to retained earnings |
| Xinjiang Joinworld Company Limited | 98,776.65 | 69,223,001.27 | 842,749.35 | 83,614,348.15 | Based on the management's intention and contractual cash flow | Sales of some shares | ||
| Wingtech Technology Co., Ltd. | 368,271,878.65 | 632,194,081.85 | Based on the management's intention and contractual cash flow | |||||
| Total | 12,140,738.21 | 103,698,375.62 | 844,453,961.02 | 633,036,831.20 | 1,516,298,031.63 | 83,614,348.15 |
Page 239 of 310
Other non-current financial assets
| Item | Ending Balance | Beginning balance |
| Financial assets measured at fair value with changes included in other comprehensive income | 4,428,003,204.49 | |
| Total | 4,428,003,204.49 |
Investment real estateInvestment real estate using cost measurement model
| Item | Houses and buildings | Land use rights | Total |
| I. Original book value | |||
| 1. Beginning balance | 1,031,496,189.10 | 50,861,964.09 | 1,082,358,153.19 |
| 2. Increased amount in the current period | 119,082,596.25 | 119,082,596.25 | |
| Including: (1) Transfer-in from fixed assets | 115,729,609.69 | 115,729,609.69 | |
| (2) Transfer-in from construction in progress | 3,352,986.56 | 3,352,986.56 | |
| 3. Decreased amount in the current period | 19,783,075.82 | 19,783,075.82 | |
| Including: Transfer to fixed assets | 19,783,075.82 | 19,783,075.82 | |
| 4. Ending balance | 1,130,795,709.53 | 50,861,964.09 | 1,181,657,673.62 |
| II. Accumulated depreciation and accumulated amortization | |||
| 1. Beginning balance | 435,542,379.87 | 12,126,571.34 | 447,668,951.21 |
| 2. Increased amount in the current period | 111,573,872.36 | 906,133.57 | 112,480,005.93 |
| Including: (1) Accrual or amortization | 70,886,924.36 | 906,133.57 | 71,793,057.93 |
| (2) Transfer-in from fixed assets | 40,686,948.00 | 40,686,948.00 | |
| 3. Decreased amount in the current period | 11,753,444.62 | 11,753,444.62 | |
| Including: Transfer to fixed assets | 11,753,444.62 | 11,753,444.62 | |
| 4. Ending balance | 535,362,807.61 | 13,032,704.91 | 548,395,512.52 |
| III. Impairment provision | |||
| IV. Book value | |||
| 1. Book value at the end of the period | 595,432,901.92 | 37,829,259.18 | 633,262,161.10 |
| 2. Book value at the beginning of the period | 595,953,809.23 | 38,735,392.75 | 634,689,201.98 |
| [Note] As of December 31, 2023, the book value of investment real estate ? houses and buildings of which the Company has not obtained the property ownership certificates was RMB45,588,201.73. |
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Fixed assets
| Item | Ending Balance | Beginning balance |
| Fixed assets [Note] | 34,023,728,822.05 | 33,810,042,180.83 |
| Fixed assets in liquidation | 11,100,294.42 | 6,977,210.53 |
| Total | 34,034,829,116.47 | 33,817,019,391.36 |
[Note] The fixed assets in the table above refer to the fixed assets after deduction of the fixed assets in liquidation.
(1) Fixed assets
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipment | Total |
| I. Original book value | ||||||
| 1. Beginning balance | 31,875,670,110.98 | 27,559,215,436.70 | 1,494,692,518.12 | 2,443,114,320.58 | 797,370,152.11 | 64,170,062,538.49 |
| 2. Increased amount in the current period | 3,918,015,162.25 | 1,878,246,110.96 | 127,006,803.19 | 210,908,503.76 | 58,617,873.17 | 6,192,794,453.33 |
| Including: (1) Purchase | 207,940.00 | 780,448,700.31 | 127,006,803.19 | 210,908,503.76 | 58,617,873.17 | 1,177,189,820.43 |
| (2) Transfer-in from investment real estate | 19,783,075.82 | 19,783,075.82 | ||||
| (3) Transfer-in from construction in progress | 3,898,024,146.43 | 1,097,797,410.65 | 4,995,821,557.08 | |||
| 3. Decreased amount in the current period | 1,240,967,448.84 | 490,698,426.78 | 21,121,947.68 | 38,708,603.64 | 13,335,504.59 | 1,804,831,931.53 |
| Including: (1) Disposal or scrapping | 1,125,237,839.15 | 490,698,426.78 | 21,121,947.68 | 38,708,603.64 | 13,335,504.59 | 1,689,102,321.84 |
| (2) Transfer to investment real estate | 115,729,609.69 | 115,729,609.69 | ||||
| 4. Foreign currency financial statement translation | 13,997,346.78 | 9,421,971.11 | 269,277.89 | 1,110,085.72 | 292,388.36 | 25,091,069.86 |
| 5. Ending balance | 34,566,715,171.17 | 28,956,185,091.99 | 1,600,846,651.52 | 2,616,424,306.42 | 842,944,909.05 | 68,583,116,130.15 |
| II. Accumulated depreciation | ||||||
| 1. Beginning balance | 9,146,684,939.16 | 17,073,717,000.50 | 1,244,171,703.27 | 2,203,916,723.13 | 673,587,840.24 | 30,342,078,206.30 |
| 2. Increased amount in the current period | 1,675,573,462.96 | 2,542,268,079.80 | 115,919,795.12 | 224,753,815.21 | 87,469,381.66 | 4,645,984,534.75 |
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| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipment | Total |
| Including: (1) Accrual | 1,663,820,018.34 | 2,542,268,079.80 | 115,919,795.12 | 224,753,815.21 | 87,469,381.66 | 4,634,231,090.13 |
| (2) Transfer-in from investment real estate | 11,753,444.62 | 11,753,444.62 | ||||
| 3. Decreased amount in the current period | 139,562,980.00 | 390,178,923.54 | 19,751,957.32 | 35,202,781.56 | 12,435,483.39 | 597,132,125.81 |
| Including: (1) Disposal or scrapping | 98,876,032.00 | 390,178,923.54 | 19,751,957.32 | 35,202,781.56 | 12,435,483.39 | 556,445,177.81 |
| (2) Transfer to investment real estate | 40,686,948.00 | 40,686,948.00 | ||||
| 4. Foreign currency financial statement translation | 2,597,234.88 | 4,529,050.12 | 239,578.99 | 943,917.73 | 145,173.59 | 8,454,955.31 |
| 5. Ending balance | 10,685,292,657.00 | 19,230,335,206.88 | 1,340,579,120.06 | 2,394,411,674.51 | 748,766,912.10 | 34,399,385,570.55 |
| III. Impairment provision | ||||||
| 1. Beginning balance | 13,788,472.27 | 3,861,058.83 | 179,924.90 | 112,695.36 | 17,942,151.36 | |
| 2. Increased amount in the current period | 43,997,287.74 | 97,206,774.93 | 244,907.04 | 33,041.95 | 578,646.91 | 142,060,658.57 |
| Including: Accrual | 43,997,287.74 | 97,206,774.93 | 244,907.04 | 33,041.95 | 578,646.91 | 142,060,658.57 |
| 3. Decreased amount in the current period | 98,088.74 | 18,146.27 | 116,235.01 | |||
| Including: Disposal or scrapping | 98,088.74 | 18,146.27 | 116,235.01 | |||
| 4. Foreign currency financial statement translation | 115,162.63 | 115,162.63 | ||||
| 5. Ending balance | 57,785,760.01 | 101,084,907.65 | 244,907.04 | 194,820.58 | 691,342.27 | 160,001,737.55 |
| IV. Book value | ||||||
| 1. Book value at the end of the period | 23,823,636,754.16 | 9,624,764,977.46 | 260,022,624.42 | 221,817,811.33 | 93,486,654.68 | 34,023,728,822.05 |
| 2. Book value at the beginning of the period | 22,715,196,699.55 | 10,481,637,377.37 | 250,520,814.85 | 239,017,672.55 | 123,669,616.51 | 33,810,042,180.83 |
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(2) Temporary idle fixed assets
The Company has no significant temporary idle fixed assets.
(3) Fixed assets leased out through operating leases
The Company has no significant fixed assets leased out through operating leases.
(4) Fixed assets in liquidation
| Item | Ending Balance | Beginning balance |
| Fixed assets in liquidation | 11,100,294.42 | 6,977,210.53 |
| Total | 11,100,294.42 | 6,977,210.53 |
Construction in progress
| Item | Ending Balance | Beginning balance |
| Construction in progress [Note] | 6,563,911,378.94 | 5,966,678,892.16 |
| Total | 6,563,911,378.94 | 5,966,678,892.16 |
[Note] The construction in progress in the above table refers to the construction in progress after deduction of construction materials.
(1) Construction in progress
| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Gree Titanium Project | 1,740,587,474.47 | 21,644,400.92 | 1,718,943,073.55 | 2,127,613,084.25 | 54,413.75 | 2,127,558,670.50 |
| Zhuhai Intelligent Manufacturing Project | 1,531,971,594.79 | 1,531,971,594.79 | 759,287,741.79 | 759,287,741.79 | ||
| [Note] As of December 31, 2023, the book value of the Company's fixed assets ? houses and buildings of which the Company has not obtained the certificate of title was RMB15,446,032,647.23. The acquisition of certificate of title is mainly affected by the progress of project final acceptance, and the Company is still processing according to the schedule. |
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| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Zhuhai Electronic Component Project | 1,257,752,616.62 | 1,257,752,616.62 | ||||
| Gree HQ Project | 827,683,995.65 | 827,683,995.65 | 460,979,229.34 | 460,979,229.34 | ||
| Wuhan Mold Project | 283,100,962.02 | 283,100,962.02 | 129,629,721.74 | 129,629,721.74 | ||
| Zhuhai Electrical Project | 165,437,659.94 | 165,437,659.94 | 41,939,278.97 | 41,939,278.97 | ||
| Wuhan HVAC Project | 111,944,374.67 | 111,944,374.67 | 22,518,193.06 | 22,518,193.06 | ||
| Others | 667,077,101.70 | 667,077,101.70 | 2,424,766,056.76 | 2,424,766,056.76 | ||
| Total | 6,585,555,779.86 | 21,644,400.92 | 6,563,911,378.94 | 5,966,733,305.91 | 54,413.75 | 5,966,678,892.16 |
(2) Currentd changes in important construction in progress
| Item | Beginning balance | Increased amount in the current period | The amount transferred to fixed assets in the current period | The amount transferred to investment real estate in the current period | Disposal in the current period | Ending Balance | Including: the capitalization amount of interest in the current period |
| Gree Titanium Project | 2,127,613,084.25 | 83,545,315.94 | 470,570,925.72 | 1,740,587,474.47 | |||
| Zhuhai Intelligent Manufacturing Project | 759,287,741.79 | 1,200,486,953.15 | 427,803,100.15 | 1,531,971,594.79 | |||
| Zhuhai Electronic Component Project | 1,277,560,061.16 | 19,807,444.54 | 1,257,752,616.62 | ||||
| Gree HQ Project | 460,979,229.34 | 385,390,418.43 | 18,685,652.12 | 827,683,995.65 | |||
| Wuhan Mold Project | 129,629,721.74 | 193,811,851.36 | 40,340,611.08 | 283,100,962.02 | 3,297,330.57 | ||
| Zhuhai Electrical Project | 41,939,278.97 | 134,308,569.19 | 10,810,188.22 | 165,437,659.94 | 1,475,468.66 | ||
| Wuhan HVAC Project | 22,518,193.06 | 93,249,673.01 | 3,823,491.40 | 111,944,374.67 | |||
| Others | 2,424,766,056.76 | 2,251,406,882.24 | 4,003,980,143.85 | 3,352,986.56 | 1,762,706.89 | 667,077,101.70 | 416,885.31 |
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| Item | Beginning balance | Increased amount in the current period | The amount transferred to fixed assets in the current period | The amount transferred to investment real estate in the current period | Disposal in the current period | Ending Balance | Including: the capitalization amount of interest in the current period |
| Total | 5,966,733,305.91 | 5,619,759,724.48 | 4,995,821,557.08 | 3,352,986.56 | 1,762,706.89 | 6,585,555,779.86 | 5,189,684.54 |
[Note] The capitalization amount of interest for the current period includes government grants for loan interest discounts.
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Usufruct assets
| Item | Housing and buildings |
| I. Original book value | |
| 1. Beginning balance | 302,875,919.25 |
| 2. Increased amount in the current period | 737,787,974.66 |
| Including: Renting | 737,787,974.66 |
| 3. Decreased amount in the current period | 16,037,696.01 |
| Including: Due | 16,037,696.01 |
| 4. Ending balance | 1,024,626,197.90 |
| II. Accumulated depreciation | |
| 1. Beginning balance | 95,531,140.20 |
| 2. Increased amount in the current period | 102,120,476.76 |
| Including: Accrual | 102,120,476.76 |
| 3. Decreased amount in the current period | 15,275,927.18 |
| Including: Due | 15,275,927.18 |
| 4. Ending balance | 182,375,689.78 |
| III. Impairment provision | |
| IV. Book value | |
| 1. Book value at the end of the period | 842,250,508.12 |
| 2. Book value at the beginning of the period | 207,344,779.05 |
Intangible assets
| Item | Land use rights | Patent rights and others | Total |
| I. Original book value | |||
| 1. Beginning balance | 11,195,701,778.22 | 3,605,169,628.21 | 14,800,871,406.43 |
| 2. Increased amount in the current period | 45,576,665.79 | 9,946,571.33 | 55,523,237.12 |
| Including: Purchase | 45,576,665.79 | 9,946,571.33 | 55,523,237.12 |
| 3. Decreased amount in the current period | 387,560,731.04 | 22,609,516.77 | 410,170,247.81 |
| Including: (1) Disposal | 387,560,731.04 | 17,178,156.77 | 404,738,887.81 |
| (2) Write-off | 5,431,360.00 | 5,431,360.00 | |
| 4. Ending balance | 10,853,717,712.97 | 3,592,506,682.77 | 14,446,224,395.74 |
| II. Accumulated amortization | |||
| 1. Beginning balance | 1,463,282,355.57 | 997,254,432.13 | 2,460,536,787.70 |
| 2. Increased amount in the current period | 233,546,094.22 | 264,334,728.93 | 497,880,823.15 |
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| Item | Land use rights | Patent rights and others | Total |
| Including: Accrual | 233,546,094.22 | 264,334,728.93 | 497,880,823.15 |
| 3. Decreased amount in the current period | 52,644,262.72 | 9,651,617.48 | 62,295,880.20 |
| Including: (1) Disposal | 52,644,262.72 | 4,220,257.48 | 56,864,520.20 |
| (2) Write-off | 5,431,360.00 | 5,431,360.00 | |
| 4. Ending balance | 1,644,184,187.07 | 1,251,937,543.58 | 2,896,121,730.65 |
| III. Impairment provision | |||
| 1. Beginning balance | 718,481,547.30 | 718,481,547.30 | |
| 2. Increased amount in the current period | 8,670,282.34 | 13,409,396.37 | 22,079,678.71 |
| Including: Amortization | 8,670,282.34 | 13,409,396.37 | 22,079,678.71 |
| 3. Decreased amount in the current period | 18,153,082.74 | 18,153,082.74 | |
| Including: (1) Disposal | 12,953,296.18 | 12,953,296.18 | |
| (2) Write-off | 5,199,786.56 | 5,199,786.56 | |
| 4. Ending balance | 8,670,282.34 | 713,737,860.93 | 722,408,143.27 |
| IV. Book value | |||
| 1. Book value at the end of the period | 9,200,863,243.56 | 1,626,831,278.26 | 10,827,694,521.82 |
| 2. Book value at the beginning of the period | 9,732,419,422.65 | 1,889,433,648.78 | 11,621,853,071.43 |
| [Note 1] Write-off amount of intangible assets ? patent right and others in the current period were the used quota licensing rights; |
| [Note 2] As of December 31, 2023, the book value of intangible assets of which the Company has not obtained the property ownership certificates was RMB31,273.85. |
| [Note 3] No intangible assets were formed through the Company's internal research and development in the current period. |
Goodwill
(1) Original book value of goodwill
| Name of Investee or matters forming goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Formed by business merger | Disposal | |||
| Zhejiang DunAn Artificial Environment Co., Ltd. | 1,198,301,590.22 | 1,198,301,590.22 | ||
| Gree Altairnano New Energy Inc. | 612,777,583.92 | 612,777,583.92 | ||
| Nanjing Walsin Metal Co., Ltd. | 274,115,040.11 | 274,115,040.11 | ||
| Hefei Kinghome Electrical Co., Ltd. | 51,804,350.47 | 51,804,350.47 |
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| Name of Investee or matters forming goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Formed by business merger | Disposal | |||
| Shenyang Water and Heat Source Development Co., Ltd. | 372,585.32 | 372,585.32 | ||
| Total | 2,137,371,150.04 | 2,137,371,150.04 |
(2) Goodwill impairment provision
| Name of Investee or matters forming goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance | |
| Accrual | Others | Disposal | |||
| Gree Altairnano New Energy Inc. | 151,720,775.11 | 206,861,546.92 | 358,582,322.03 | ||
| Nanjing Walsin Metal Co., Ltd. | 274,115,040.11 | 274,115,040.11 | |||
| Hefei Kinghome Electrical Co., Ltd. | 51,804,350.47 | 51,804,350.47 | |||
| Shenyang Water and Heat Source Development Co., Ltd. | 372,585.32 | 372,585.32 | |||
| Total | 478,012,751.01 | 206,861,546.92 | 684,874,297.93 | ||
(3) Information about the asset group or asset group combination in which the goodwill is located
| Company Name | Composition and basis of the asset group or combination | Operating segments and basis | Is it consistent with previous years |
| Gree Altairnano asset group | Operating assets of an asset group (excluding non-operating assets and surplus assets), based on the asset group that can generate independent cash flows | Classified by company management requirements and business modules | Yes |
| Asset group of DunAn Environment refrigeration accessories | Including fixed assets, construction in progress, right-of-use assets, intangible assets, long-term unamortized expenses, and other long-term assets, based on the asset group that can generate independent cash flows | DunAn Hetian and Zhuhai Huayu, classified by company management requirements and business modules | Yes |
| Asset group of DunAn Environment equipment | Including fixed assets, construction in progress, right-of-use assets, intangible assets, long-term unamortized expenses, and other long-term assets, based on the asset group that can generate independent cash flows | DunAn Electro-Mechanical, classified by company management requirements and business modules | Yes |
| Asset group of DunAn Environment thermal | Including fixed assets, construction in progress, right-of-use assets, intangible assets, long-term unamortized expenses, and other long-term assets, based on the asset group that can generate independent cash flows | DunAn Thermal and Zhuhai Thermal, classified by company management requirements and business modules | Yes |
| Asset group of DunAn Environment thermal management | Including fixed assets, construction in progress, right-of-use assets, intangible assets, long-term unamortized expenses, and other long-term assets, based on the asset group that can generate independent cash flows | DunAn thermal management, classified by company management requirements and business modules | Yes |
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(4) Specific determination method of recoverable amount
1) Determined based on the net amount after deducting disposal expenses from fair value
| Item | Book Value | Recoverable amount | Impairment amount of goodwill attributable to shareholders of the parent company | Determination of fair value and disposal expenses | Key parameters | Basis for determining key parameters |
| Gree Altairnano asset group | 13,279,725,255.23 | 12,600,822,902.34 | 206,861,546.92 | Fair value | Fair value, disposal expenses | Determine the replacement cost based on market inquiry, local engineering cost information of each park, depreciation rate of service life, and survey depreciation rate, and determine the fair value based on the replacement cost; confirm disposal expenses based on property rights transaction costs, stamp taxes, and additional taxes |
| Total | 13,279,725,255.23 | 12,600,822,902.34 | 206,861,546.92 |
[Note] In accordance with the Asset Evaluation Report on the Asset Group Including the Recoverable Amount of Goodwill Assets Involved in the Impairment Test ofthe Goodwill Formed by the Merger of GREE Altairnano New Energy Inc. by Gree Electric Appliances, Inc. of Zhuhai (ZZH [2024] ZI No. HZ1107) issued byZhejiang Zhongheng Real Estate Land Assets Appraisal Consulting Co., Ltd., the amount of goodwill impairment attributable to the parent company in the currentperiod is RMB206,861,546.92, and the recoverable amount of the asset group is calculated by using the method of net amount after deducting disposal expenses fromfair value in the assessment report;
2) Determine based on the present value of expected future cash flows
| Item | Book Value | Recoverable amount | Impairment amount | Years in the forecast period | Key parameters for the forecast period (growth rate and profit rate) | Basis for determining parameters during the forecast period | Key parameters for the stable period (growth rate, profit rate, and discount rate) | Basis for determining key parameters during the stable period |
| Asset group of DunAn Environment refrigeration accessories | 5,336,747,308.36 | 5,463,000,000.00 | 5 years + perpetual period | Revenue growth rate: 6.59%?21.16% Gross margin: 14.04%?19.67% | [Note 2] | Revenue growth rate: 2.00% Discount rate: 14.27% | Pre-tax wacc calculated from industry data | |
| Asset group of DunAn Environment thermal | 940,384,243.78 | 1,743,000,000.00 | 5 years + perpetual period | Revenue growth rate: 9.31%?20.78% Gross margin: 21.63%?23.75% | [Note 2] | Revenue growth rate: 2.00% Discount rate: 14.27% | Pre-tax wacc calculated from industry data |
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| Item | Book Value | Recoverable amount | Impairment amount | Years in the forecast period | Key parameters for the forecast period (growth rate and profit rate) | Basis for determining parameters during the forecast period | Key parameters for the stable period (growth rate, profit rate, and discount rate) | Basis for determining key parameters during the stable period |
| Asset group of DunAn Environment thermal management | 438,875,471.77 | 2,981,000,000.00 | 5 years + perpetual period | Revenue growth rate: 10.00%?99.71% [Note 3] Gross margin: 23.37%?27.62% | [Note 2] | Revenue growth rate: 2.00% Discount rate: 14.27% | Pre-tax wacc calculated from industry data | |
| Asset group of DunAn Environment equipment | 328,324,949.71 | 2,717,000,000.00 | 5 years + perpetual period | Revenue growth rate: 8.00%?14.72% Gross margin: 25.58%?28.49% | [Note 2] | Revenue growth rate: 2.00% Discount rate: 14.27% | Pre-tax wacc calculated from industry data | |
| Total | 7,044,331,973.62 | 12,904,000,000.00 |
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Long-term unamortized expenses
| Item | Beginning balance | Increased amount in the current period | Amortization amount in the current period | Ending Balance |
| Renovation costs and others | 22,862,393.90 | 14,390,031.04 | 12,976,950.00 | 24,275,474.94 |
| Total | 22,862,393.90 | 14,390,031.04 | 12,976,950.00 | 24,275,474.94 |
Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
| Item | Ending Balance | Beginning balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Accrued expenses | 81,894,353,560.58 | 12,299,777,470.95 | 74,646,872,375.32 | 11,202,831,506.36 |
| Assets impairment reserves | 9,185,884,979.39 | 1,563,753,624.25 | 6,643,992,630.67 | 1,130,458,707.56 |
| Deductible losses | 7,607,177,645.41 | 1,383,660,092.05 | 8,528,191,787.64 | 1,667,323,200.67 |
| Payroll payable | 2,403,160,852.09 | 368,434,495.66 | 1,488,929,099.06 | 230,456,696.17 |
| Lease liabilities | 855,196,661.01 | 210,201,073.63 | 212,875,571.23 | 47,385,845.47 |
| Asset amortization/depreciation | 285,078,030.33 | 43,422,888.16 | 264,225,302.62 | 39,712,114.04 |
| Changes in fair value of other equity instrument investments | 270,341,234.04 | 40,551,185.11 | ||
| Others | 3,386,147,827.13 | 651,636,192.00 | 1,800,297,523.36 | 326,709,500.84 |
| Total | 105,887,340,789.98 | 16,561,437,021.81 | 93,585,384,289.90 | 14,644,877,571.11 |
(2) Deferred income tax liabilities not offset
| Item | Ending Balance | Beginning balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Accrued interest | 8,004,193,370.39 | 1,338,930,710.07 | 5,290,711,334.53 | 968,378,001.20 |
| Appraised appreciation of consolidated assets of enterprises not under the common control | 3,068,234,386.94 | 628,766,638.59 | 3,582,036,617.90 | 738,945,765.64 |
| Usufruct assets | 841,445,774.92 | 207,082,853.09 | 207,344,779.05 | 46,010,700.88 |
| Assets amortization | 1,178,075,518.52 | 185,886,711.77 | 1,750,007,228.31 | 271,416,568.54 |
| Changes in fair value of derivative financial assets | 174,933,139.85 | 27,862,021.19 | 23,731,530.82 | 3,970,875.35 |
| Changes in fair value of other equity instrument investments | 433,527,038.34 | 65,029,055.75 | ||
| Others | 2,442,258,390.98 | 483,228,222.87 | 732,645,089.17 | 177,387,477.26 |
| Total | 15,709,140,581.60 | 2,871,757,157.58 | 12,020,003,618.12 | 2,271,138,444.62 |
(3) Details of deferred income tax assets not recognized
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| Item | Ending Balance | Beginning balance |
| Deductible losses | 5,611,793,371.12 | 2,599,631,551.36 |
| Deductible temporary differences | 3,078,969,898.57 | 3,281,958,579.26 |
| Total | 8,690,763,269.69 | 5,881,590,130.62 |
(4) The deductible losses of deferred income tax assets not recognized will be due in the following years
| Year | Investment Amount at the End of the Period | Beginning Amount |
| 2023 | 224,603,342.52 | |
| 2024 | 1,417,170,907.63 | 762,961,760.88 |
| 2025 | 1,017,526,622.61 | 785,496,400.36 |
| 2026 | 856,758,140.24 | 115,411,404.36 |
| 2027 | 585,602,169.96 | 110,109,117.96 |
| 2028 | 820,192,288.14 | 13,674,872.10 |
| 2029 | 14,221,495.75 | |
| 2030 | 19,960,469.70 | 5,609,610.89 |
| 2031 | 17,117,414.62 | |
| 2032 | 32,376,800.88 | |
| Open-ended | 830,867,061.59 | 581,765,042.29 |
| Total | 5,611,793,371.12 | 2,599,631,551.36 |
Other non-current assets
| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Monetary investment products and accrued interest | 41,018,451,427.70 | 41,018,451,427.70 | ||||
| Advance payments for equipment | 1,196,720,503.05 | 1,196,720,503.05 | 739,880,724.35 | 739,880,724.35 | ||
| Advance project funds and cash pledge and deposit | 276,954,860.61 | 76,969,740.55 | 199,985,120.06 | 286,681,230.43 | 30,808,387.19 | 255,872,843.24 |
| Advance land-transferring fees and others | 82,948,394.58 | 82,948,394.58 | 43,959,131.67 | 43,959,131.67 | ||
| Total | 42,575,075,185.94 | 76,969,740.55 | 42,498,105,445.39 | 1,070,521,086.45 | 30,808,387.19 | 1,039,712,699.26 |
Assets with restricted ownership or right-to-use
| Item | End of Period | |
| Book Value | Restricted Reason | |
| Monetary funds | 36,444,669,541.57 | Required deposit reserve, earnest money, etc. |
| Accounts receivable | 95,386,260.00 | Pledged |
Page 252 of 310
| Item | End of Period | |
| Book Value | Restricted Reason | |
| Receivables financing | 5,033,716,307.04 | Pledged |
| Contract assets | 103,189,654.26 | Pledged |
| Other current assets | 9,000,000,000.00 | Pledged |
| Non-current assets due within one year | 1,000,000,000.00 | Pledged |
| Other debt investments | 10,090,000,000.00 | Pledged |
| Long-term equity investments | 310,838,556.07 | Pledged |
| Fixed assets | 2,285,127,725.15 | Pledged |
| Construction in progress | 223,626,881.02 | Pledged |
| Intangible assets | 1,436,665,729.28 | Pledged |
| Other non-current assets | 12,180,000,000.00 | Pledged |
| Others | 13,646,580.00 | Pledged |
| Total | 78,216,867,234.39 | |
(Continued)
| Item | Beginning of period | |
| Book Value | Restricted Reason | |
| Monetary funds | 49,215,097,504.03 | Required deposit reserve, earnest money, etc. |
| Accounts receivable | 239,378,920.65 | Pledged |
| Receivables financing | 12,304,327,541.08 | Pledged |
| Non-current assets due within one year | 3,022,847,488.96 | Pledged |
| Other debt investments | 5,700,000,000.00 | Pledged |
| Other equity instrument investments | 1,965,635,734.92 | Restricted shares |
| Long-term equity investments | 293,539,194.32 | Pledged |
| Fixed assets | 976,001,655.74 | Pledged |
| Intangible assets | 1,063,362,713.41 | Pledged |
| Others | 192,982,228.53 | Pledged |
| Total | 74,973,172,981.64 | |
Short-term borrowings
(1) Classification of short-term borrowings
| Item | Ending Balance | Beginning balance |
| Pledge borrowings | 13,689,816,990.91 | 20,215,759,226.93 |
| Credit borrowings | 11,791,884,924.68 | 31,117,982,271.80 |
| Mortgaged borrowings | 403,850,000.00 | 438,390,000.00 |
Page 253 of 310
| Item | Ending Balance | Beginning balance |
| Pledge, mortgaged, and credit borrowings | 318,978,953.96 | |
| Pledge and mortgaged borrowings | 115,500,000.00 | |
| Mortgaged and credit borrowings | 35,500,000.00 | |
| Guaranteed borrowings | 900,000,000.00 | |
| Subtotal | 26,355,530,869.55 | 52,672,131,498.73 |
| Accrued interest | 87,945,518.97 | 223,719,789.19 |
| Total | 26,443,476,388.52 | 52,895,851,287.92 |
(2) Overdue and unpaid short-term borrowings
None.Derivative financial liabilities
| Item | Ending Balance | Beginning balance |
| Foreign exchange derivatives | 4,079,919.91 | 184,811,894.98 |
| Total | 4,079,919.91 | 184,811,894.98 |
Notes payable
| Type | Ending Balance | Beginning balance |
| Banker's acceptance bill | 23,741,128,400.12 | 38,346,486,801.38 |
| Trade acceptance draft | 263,414,018.36 | |
| Total | 23,741,128,400.12 | 38,609,900,819.74 |
[Note] As of December 31, 2023, the Company had no notes payable that were due and unpaid.Accounts payable
(1) List of accounts payable
| Item | Ending Balance | Beginning balance |
| Payment for goods and services | 37,687,019,566.61 | 30,384,290,338.76 |
| Others | 3,460,339,655.34 | 2,471,781,150.11 |
| Total | 41,147,359,221.95 | 32,856,071,488.87 |
(2) Important payables aged over 1 year
None.Contract liabilities
| Item | Ending Balance | Beginning balance |
| Payment for goods and pre-sale housing | 13,588,771,210.88 | 14,972,336,715.45 |
| Total | 13,588,771,210.88 | 14,972,336,715.45 |
[Note] Contract liabilities mainly consist of advance payments from distributors for goods.
Page 254 of 310
Deposits from customers and interbank
| Item | Ending Balance | Beginning balance |
| Time deposits | 245,243,190.05 | 190,606,127.38 |
| Current deposits | 3,188,766.08 | 22,144,523.59 |
| Subtotal | 248,431,956.13 | 212,750,650.97 |
| Accrued interest | 6,184,943.22 | 6,360,418.64 |
| Total | 254,616,899.35 | 219,111,069.61 |
Payroll payable
(1) List of employee remuneration payable
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| I. Short-term wages and salaries | 3,887,857,360.44 | 11,105,934,748.86 | 10,728,021,808.72 | 4,265,770,300.58 |
| II. Separation benefits ? defined contribution plan | 10,004,731.40 | 812,059,419.17 | 799,223,064.86 | 22,841,085.71 |
| Total | 3,897,862,091.84 | 11,917,994,168.03 | 11,527,244,873.58 | 4,288,611,386.29 |
(2) List of short-term wages and salaries
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| 1. Wages, bonuses, subsidies and allowances | 2,794,951,468.75 | 9,364,041,403.07 | 9,106,317,169.18 | 3,052,675,702.64 |
| 2. Employee welfare | 429,699.41 | 770,490,581.96 | 769,038,005.30 | 1,882,276.07 |
| 3. Social insurance premiums | 2,881,491.17 | 330,420,482.50 | 326,082,508.89 | 7,219,464.78 |
| Including: Medical insurance premiums | 2,435,896.66 | 298,191,523.46 | 294,011,570.82 | 6,615,849.30 |
| Work-related injury insurance premiums | 315,476.86 | 24,314,251.80 | 24,091,352.06 | 538,376.60 |
| Maternity insurance premiums | 130,117.65 | 7,914,707.24 | 7,979,586.01 | 65,238.88 |
| 4. Housing provident funds | 4,411,203.23 | 388,522,174.53 | 389,016,435.18 | 3,916,942.58 |
| 5. Labor union expenditures and employee education funds | 1,085,183,497.88 | 252,460,106.80 | 137,567,690.17 | 1,200,075,914.51 |
| Total | 3,887,857,360.44 | 11,105,934,748.86 | 10,728,021,808.72 | 4,265,770,300.58 |
(3) List of separation benefits ? defined contribution plan
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| 1. Basic endowment insurance premiums | 8,963,101.99 | 780,820,624.32 | 768,438,437.37 | 21,345,288.94 |
| 2. Unemployment insurance premiums | 1,041,629.41 | 31,238,794.85 | 30,784,627.49 | 1,495,796.77 |
| Total | 10,004,731.40 | 812,059,419.17 | 799,223,064.86 | 22,841,085.71 |
Taxes and dues payable
| Item | Ending Balance | Beginning balance |
| Business income tax | 2,544,807,089.57 | 1,856,871,168.58 |
| Value-added tax | 1,393,002,309.22 | 1,650,439,583.33 |
Page 255 of 310
| Item | Ending Balance | Beginning balance |
| Others | 399,822,161.49 | 312,113,887.57 |
| Total | 4,337,631,560.28 | 3,819,424,639.48 |
Other payables
| Item | Ending Balance | Beginning balance |
| Dividends payable | 5,572,388.92 | 5,620,664,762.67 |
| Other payables [Note 1] | 5,507,694,127.90 | 5,291,741,904.22 |
| Total | 5,513,266,516.82 | 10,912,406,666.89 |
[Note 1] Other payables in the table above refer to other payables deducting interests payable and dividendspayable;[Note 2] The Company has no interests payable at the end and the beginning of the period.
(1) Dividends payable
| Item | Ending Balance | Beginning balance |
| Common stock dividends | 602,881.87 | 5,614,444,494.87 |
| Others | 4,969,507.05 | 6,220,267.80 |
| Total | 5,572,388.92 | 5,620,664,762.67 |
[Note] The Company has no important dividends payable aged over 1 year.
(2) Other payables
1) Other payables listed by nature of payment
| Item | Ending Balance | Beginning balance |
| Intercourse funds | 2,617,427,058.95 | 2,485,922,439.12 |
| Enterprise borrowing and interest | 1,654,225,040.13 | 1,621,102,937.08 |
| Cash pledge and deposit | 1,236,042,028.82 | 1,184,716,528.02 |
| Total | 5,507,694,127.90 | 5,291,741,904.22 |
2) Other important payables aged over 1 year
| Item | Ending Balance | Reasons for failing to repay or carry-over |
| Unit 1 | 1,003,043,216.69 | Unsatisfied repayment conditions |
| Total | 1,003,043,216.69 |
Non-current liabilities due within one year
| Item | Ending Balance | Beginning balance |
| Long-term borrowings due within one year | 20,411,257,654.34 | |
| Long-term payables to be due within one year | 104,437,399.09 | 188,387,613.61 |
| Lease liabilities due within 1 year | 89,826,019.60 | 66,954,923.96 |
Page 256 of 310
| Item | Ending Balance | Beginning balance |
| Total | 20,605,521,073.03 | 255,342,537.57 |
Other current liabilities
| Item | Ending Balance | Beginning balance |
| Sales rebate | 50,881,332,212.24 | 52,515,732,341.58 |
| Others | 10,177,504,966.53 | 5,233,085,261.66 |
| Total | 61,058,837,178.77 | 57,748,817,603.24 |
Long-term borrowings
| Item | Ending Balance | Beginning balance |
| Pledge borrowings | 19,537,435,550.95 | 3,312,962,532.03 |
| Credit borrowings | 37,768,442,020.95 | 24,721,907,621.41 |
| Mortgaged borrowings | 2,089,219,068.84 | 2,718,972,309.96 |
| Subtotal | 59,395,096,640.74 | 30,753,842,463.40 |
| Add: Accrued interests | 51,903,548.69 | 30,398,747.81 |
| Less: Long-term borrowings due within one year | 20,411,257,654.34 | |
| Total | 39,035,742,535.09 | 30,784,241,211.21 |
Lease liabilities
| Item | Ending Balance | Beginning balance |
| Lease liabilities | 856,833,971.52 | 213,791,544.62 |
| Less: Lease liabilities due within 1 year | 89,826,019.60 | 66,954,923.96 |
| Total | 767,007,951.92 | 146,836,620.66 |
Long-term payables
| Item | Ending Balance | Beginning balance |
| Financial liabilities formed after sale and leaseback | 131,465,897.39 | 274,393,778.81 |
| Others | 18,638,250.00 | |
| Subtotal | 131,465,897.39 | 293,032,028.81 |
| Less: Long-term payables due within 1 year | 104,437,399.09 | 188,387,613.61 |
| Total | 27,028,498.30 | 104,644,415.20 |
Long-term payroll payable
(1) Table of long-term payroll payable
| Item | Ending Balance | Beginning balance |
Page 257 of 310
| Item | Ending Balance | Beginning balance |
| Net liabilities of separation benefits ? defined benefit plan | 195,057,663.00 | 175,712,728.00 |
| Total | 195,057,663.00 | 175,712,728.00 |
(2) Changes in the defined benefit plan
1) Present value of obligations under the defined benefit plan:
| Item | Amount for the current period | Amount incurred for the previous period |
| I. Beginning balance | 175,712,728.00 | 164,408,471.00 |
| II. Defined benefit cost included in the current profits and losses | 9,941,893.00 | 8,733,357.00 |
| 1. Service costs in the current period | 3,238,005.00 | 2,945,591.00 |
| 2. Net interest | 5,173,500.00 | 5,241,236.00 |
| 3. Impact of adding new personnel | 1,530,388.00 | 546,530.00 |
| III. Defined benefit cost included in other comprehensive income | 15,837,466.00 | 8,601,949.00 |
| Including: actuarial gains (losses expressed with "?") | 15,837,466.00 | 8,601,949.00 |
| IV. Other changes | -6,434,424.00 | -6,031,049.00 |
| Including: Paid benefits | -6,434,424.00 | -6,031,049.00 |
| V. Ending balance | 195,057,663.00 | 175,712,728.00 |
2) Net liabilities (net assets) of the defined benefit plan:
| Item | Amount for the current period | Amount incurred for the previous period |
| I. Beginning balance | 175,712,728.00 | 164,408,471.00 |
| II. Defined benefit cost included in the current profits and losses | 9,941,893.00 | 8,733,357.00 |
| III. Defined benefit cost included in other comprehensive income | 15,837,466.00 | 8,601,949.00 |
| IV. Other changes | -6,434,424.00 | -6,031,049.00 |
| V. Ending balance | 195,057,663.00 | 175,712,728.00 |
(3) The descriptions of contents and associated risks of the defined benefit plan, and its influences on theCompany’s future cash flow, time, and uncertainty are as follows:
1) Descriptions of contents and associated risks of the defined benefit plan, and its influences on theCompany’s future cash flow, time, and uncertaintyThe Company’s defined benefit plan is a supplementary post-retirement benefit plan for some retirees,early retirees, and serving officers after normal retirement. Given that the amount involved in the definedbenefit plan is not significant, it cannot have a significant impact on the Company's future cash flow.
2) Descriptions of significant actuarial assumptions and sensitivity analysis results of the defined benefitplanUnder the requirements of the Accounting Standards for Business Enterprises No. 9 ? EmployeeCompensation, the discount rate adopted by the Company at the time of discount is recognized by themarket yields of high-quality corporate bonds in the treasury bonds or active market that match the
Page 258 of 310
obligatory term and currency of the defined benefit plan on the balance sheet date; the annual growth ratesand annual dismissal rates of all benefits are based on the actual measurement data of the Company; andthe death rate is recognized by referring to the experience life table for insurance business of China LifeInsurance (Group) Company.Deferred income
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance | Cause of formation |
| Government grants | 3,335,077,967.39 | 424,153,554.48 | 235,076,720.35 | 3,524,154,801.52 | Related to assets/incomes |
| Others | 5,133,362.84 | 1,432,566.24 | 3,700,796.60 | Unconfirmed profit and loss from sale and leaseback | |
| Total | 3,340,211,330.23 | 424,153,554.48 | 236,509,286.59 | 3,527,855,598.12 |
Share capital
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Total number of stocks | 5,631,405,741.00 | 5,631,405,741.00 | ||
| Total | 5,631,405,741.00 | 5,631,405,741.00 |
Capital reserves
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Share capital premium | 560,382,088.91 | 560,382,088.91 | ||
| Other capital reserves | 496,102,011.66 | 1,411,326,160.71 | 554,905,778.70 | 1,352,522,393.67 |
| Total | 496,102,011.66 | 1,971,708,249.62 | 1,115,287,867.61 | 1,352,522,393.67 |
| [Note 1] The share of equity incentive ? employee stock ownership plan expenses in the current period increased the capital reserves ? other capital reserves by RMB1, 411,326,160.71; [Note 2] In this period, some subsidiaries engaged in equity transactions, resulting in an increase of RMB5,476,310.21 in capital reserves ? share capital premium; |
| [Note 3] The expiration of the lock-up period of the first phase of the employee stock ownership plan and the fulfillment of the vesting conditions resulted in an increase of RMB554,905,778.70 in capital reserves ? share capital premium, and a decrease of RMB554,905,778.70 in capital reserves ? other capital reserves; |
| [Note 4] Capital reserves ? share capital premium of RMB560,382,088.91 is offset by the purchase of minority equity interests in subsidiaries and the expected payment of performance compensation. |
Treasury share
Page 259 of 310
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Repurchased share | 5,643,935,587.86 | 4,108,275,713.17 | 4,809,487,389.59 | 4,942,723,911.44 |
| Total | 5,643,935,587.86 | 4,108,275,713.17 | 4,809,487,389.59 | 4,942,723,911.44 |
| [Note 1] On February 3, 2023, the Company transferred 77,163,880 shares from the Company's special securities account for repurchase to the special account of "Gree Electric Appliances, Inc. of Zhuhai ? employee stock ownership plan phase II" through non-trading transfer, and the treasury shares decreased RMB3,665,952,595.95, and the transferred shares accounted for 1.37% of the Company's total share capital at that time. At the same time, the confirmation of stock repurchase obligations in this period increased the treasury shares by RMB1,108,073,316.80; |
| [Note 2] In accordance with the Announcement on the Expiration of the Lock-up Period and Achievement of Vesting Conditions of Employee Stock Ownership Plan Phase I of the Company, the appraisal period of the phase of the employee stock ownership plan of the Company has expired and the performance indicators of the appraisal and vesting period have been met, and the attributable stock rights can be distributed. The Company derecognized the obligation to repurchase the shares of the employee stock ownership plan phase I during the current period, resulting in a decrease of RMB1,143,534,793.64 in treasury shares; [Note 3] As of December 31, 2023, the Company repurchased 91,897,967 shares in phase IV, and the repurchase amount was RMB3,000,202,396.37. The repurchased treasury shares in this period accounted for 1.63% of the Company's total share capital at that time, and all of them were deposited in the Company's special securities account for repurchase. During the deposit period, they did not enjoy related rights such as voting rights at shareholders' meetings, profit distribution, conversion of reserves into share capital, allotment, and pledge. |
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Other comprehensive income
| Item | Beginning balance | Amount for the current period | Ending Balance | |||||
| Amount incurred before income tax in the current period | Less: Amount included in other comprehensive income in the previous period but transferred to the profits and losses in the current period | Less: Amount included in other comprehensive income in the previous period but transferred to retained earnings in the current period | Less: Income tax expenses | Amount attributable to the parent company after tax | Amount attributable to minority shareholders after tax | |||
| I. Other comprehensive income cannot be reclassified into profits and losses | 1,820,479,359.65 | -1,359,257,024.09 | 413,925,573.32 | 56,550,930.69 | -1,833,796,245.42 | 4,062,717.32 | -13,316,885.77 | |
| Changes arising from remeasurement of the defined benefit plan | -72,008,226.00 | -15,837,466.00 | -15,837,466.00 | -87,845,692.00 | ||||
| Other comprehensive income that cannot be transferred to profits and losses under the equity method | 2,100,022,256.43 | -686,278,320.85 | 330,311,225.17 | 162,131,171.55 | -1,182,783,434.89 | 4,062,717.32 | 917,238,821.54 | |
| Changes in the fair value of other equity instrument investments | -207,534,670.78 | -657,141,237.24 | 83,614,348.15 | -105,580,240.86 | -635,175,344.53 | -842,710,015.31 | ||
| II. Other comprehensive income to be reclassified into profits and losses | 222,422,245.39 | 97,364,238.49 | 8,725,200.15 | 8,137,406.29 | 66,432,933.68 | 14,068,698.37 | 288,855,179.07 | |
| Other comprehensive income that can be transferred to profits and losses under the equity method | -208,819.44 | 527,247.07 | 160,652.18 | 366,594.89 | -48,167.26 | |||
| Changes in the fair value of other debt investments | -8,060,421.69 | 9,079,591.01 | 3,399,497.28 | 5,646,351.69 | 33,742.04 | -2,414,070.00 | ||
| Reserves for credit impairment of other debt investments | -3,667,360.51 | 19,004,631.52 | 7,464,950.15 | 4,440,275.26 | 2,753,149.69 | 4,346,256.42 | -914,210.82 | |
Page 261 of 310
| Item | Beginning balance | Amount for the current period | Ending Balance | |||||
| Amount incurred before income tax in the current period | Less: Amount included in other comprehensive income in the previous period but transferred to the profits and losses in the current period | Less: Amount included in other comprehensive income in the previous period but transferred to retained earnings in the current period | Less: Income tax expenses | Amount attributable to the parent company after tax | Amount attributable to minority shareholders after tax | |||
| Cash flow hedging reserves | 1,073,618.07 | 3,244,475.00 | 1,260,250.00 | 297,633.75 | 1,650,685.72 | 35,905.53 | 2,724,303.79 | |
| Differences arising from the translation of financial statements in foreign currency | 233,285,228.96 | 65,508,293.89 | 56,222,094.40 | 9,286,199.49 | 289,507,323.36 | |||
| Total | 2,042,901,605.04 | -1,261,892,785.60 | 8,725,200.15 | 413,925,573.32 | 64,688,336.98 | -1,767,363,311.74 | 18,131,415.69 | 275,538,293.30 |
Page 262 of 310
Special reserves
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Safe production expenses | 25,845,351.28 | 5,017,397.69 | 3,893,105.53 | 26,969,643.44 |
| Total | 25,845,351.28 | 5,017,397.69 | 3,893,105.53 | 26,969,643.44 |
Surplus reserves
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| Statutory surplus reserves | 2,241,118,692.92 | 2,745,557,993.21 | 3,255,546,661.73 | 1,731,130,024.40 |
| Total | 2,241,118,692.92 | 2,745,557,993.21 | 3,255,546,661.73 | 1,731,130,024.40 |
| [Note 1] The reasons for the increase in surplus reserves for the current period are: |
| ① According to the regulations, the Company appropriated 10% of the parent company's net profit for the current period to the statutory surplus reserves of RMB2,704,897,285.76; |
| ② The transfer of other comprehensive income to retained earnings resulted in an increase of RMB40,660,707.45 to the surplus reserve. |
| [Note 2] The transfer of treasury shares under the employee stock ownership plan phase II and the acquisition of minority interests in subsidiaries resulted in a decrease of RMB3,255,546,661.73 in surplus reserve ? statutory surplus reserve. |
General risk provisions
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance |
| General risk provisions | 507,223,117.40 | 507,223,117.40 | ||
| Total | 507,223,117.40 | 507,223,117.40 |
Undistributed profits
| Item | Amount for the current period | Amount incurred for the previous period |
| Undistributed profits at the end of the previous period before adjustment | 91,458,073,960.81 | 103,475,223,000.17 |
| Total adjustment of undistributed profits at the beginning of the period (increase +, decrease ?) | ||
| Beginning undistributed profit after adjustment | 91,458,073,960.81 | 103,475,223,000.17 |
| Add: Net profit attributable to owners of the parent company for the current period | 29,017,387,604.18 | 24,506,623,782.46 |
| Less: Withdrawal of statutory surplus reserves | 2,704,897,285.76 | 2,237,070,151.57 |
| Withdrawal of general risk reserves | 1,623,761.10 | |
| Common share dividends payable [Note] | 5,613,841,613.00 | 22,223,874,812.00 |
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| Item | Amount for the current period | Amount incurred for the previous period |
| Influence of share-based payment and share cancellation | 313,591,772.67 | 11,668,920,238.83 |
| Purchase of minority shareholder's equity in subsidiaries | 428,720,730.49 | |
| Add: Amount transferred from other comprehensive income to retained earnings | 368,519,908.06 | 36,436,872.17 |
| Ending undistributed profit | 112,211,650,801.62 | 91,458,073,960.81 |
| [Note] Under the resolutions of the annual general meeting of shareholders on June 30, 2023, the Company distributed cash dividends to all shareholders at a rate of RMB10.00 (tax inclusive) per 10 shares. Based on the shares deducting repurchased shares 17,564,128 in the account for repurchased from the Company's total capital shares of 5,631,405,741, RMB5,613,841,613.00 of cash dividends should be actually distributed. |
Operating revenues and costs
| Item | Amount for the current period | Amount incurred for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 174,565,470,852.38 | 113,508,550,549.59 | 153,165,839,566.10 | 105,573,859,862.27 |
| Other business | 29,413,795,534.71 | 28,116,999,197.36 | 35,822,543,140.58 | 34,210,528,020.51 |
| Total | 203,979,266,387.09 | 141,625,549,746.95 | 188,988,382,706.68 | 139,784,387,882.78 |
Information related to the revenues from the main business:
| Item | Amount for the current period | Amount incurred for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Classified by industry | ||||
| Manufacturing industry | 174,565,470,852.38 | 113,508,550,549.59 | 153,165,839,566.10 | 105,573,859,862.27 |
| Total | 174,565,470,852.38 | 113,508,550,549.59 | 153,165,839,566.10 | 105,573,859,862.27 |
| Classified by product type | ||||
| Including: Air conditioner | 151,216,511,000.13 | 95,207,973,716.18 | 134,859,394,542.06 | 91,116,284,416.91 |
| Home appliance | 4,001,971,437.12 | 2,579,480,666.41 | 4,567,901,238.21 | 3,051,711,250.15 |
| Industrial product | 10,002,891,047.02 | 7,730,401,393.36 | 7,599,259,996.39 | 6,057,662,877.96 |
| Smart device | 669,842,288.11 | 459,908,441.68 | 432,085,871.36 | 303,247,852.63 |
| Green energy | 7,106,463,576.73 | 6,193,955,989.91 | 4,701,188,530.73 | 4,077,474,678.11 |
| Others | 1,567,791,503.27 | 1,336,830,342.05 | 1,006,009,387.35 | 967,478,786.51 |
| Total | 174,565,470,852.38 | 113,508,550,549.59 | 153,165,839,566.10 | 105,573,859,862.27 |
| Classified by region | ||||
| Including: Sales in domestic market | 149,661,934,832.94 | 94,519,678,129.83 | 129,895,113,805.01 | 85,650,631,599.13 |
Page 264 of 310
| Item | Amount for the current period | Amount incurred for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Export sales | 24,903,536,019.44 | 18,988,872,419.76 | 23,270,725,761.09 | 19,923,228,263.14 |
| Total | 174,565,470,852.38 | 113,508,550,549.59 | 153,165,839,566.10 | 105,573,859,862.27 |
Interest income and interest expenses
| Item | Amount for the current period | Amount incurred for the previous period |
| Interest income | 1,038,856,837.77 | 1,162,289,741.08 |
| Including: Interest income from deposits in other banks and central banks | 769,444,269.59 | 900,104,771.54 |
| Interest income from the issuance of loans and advances | 116,256,351.56 | 46,543,226.92 |
| Others | 153,156,216.62 | 215,641,742.62 |
| Interest expense | 126,399,291.44 | 82,118,835.96 |
| Including: Expenses from transactions with financial institutions | 113,834,187.03 | 63,728,710.63 |
| Others | 12,565,104.41 | 18,390,125.33 |
| Net interest income | 912,457,546.33 | 1,080,170,905.12 |
Taxes and surcharges
| Item | Amount for the current period | Amount incurred for the previous period |
| Urban maintenance & construction tax | 608,933,524.27 | 410,993,531.12 |
| Education surcharge | 443,446,170.48 | 296,533,867.57 |
| Building tax | 291,022,667.17 | 242,591,473.78 |
| Land use tax | 150,553,829.97 | 150,191,753.52 |
| Others | 620,228,300.94 | 511,932,783.41 |
| Total | 2,114,184,492.83 | 1,612,243,409.40 |
Sales expenses
| Item | Amount for the current period | Amount incurred for the previous period |
| Sales expenses | 17,129,639,682.51 | 11,285,451,112.27 |
| Total | 17,129,639,682.51 | 11,285,451,112.27 |
[Note] In 2023, the sales expenses mainly included the installation and maintenance expenses, warehousingexpenses, loading and unloading fees, and promotion expenses, totally accounting for more than 80% of thetotal sales expenses.Administrative expenses
| Item | Amount for the current period | Amount incurred for the previous period |
| Administrative expenses | 6,542,161,037.82 | 5,267,999,733.62 |
Page 265 of 310
| Item | Amount for the current period | Amount incurred for the previous period |
| Total | 6,542,161,037.82 | 5,267,999,733.62 |
[Note] In 2023, the overhead expenses included the employees' remuneration, material consumption,depreciation, and amortization, totally accounting for more than 80% of the total overhead expenses.R&D expenses
| Item | Amount for the current period | Amount incurred for the previous period |
| R&D expenses | 6,762,136,262.23 | 6,281,394,430.40 |
| Total | 6,762,136,262.23 | 6,281,394,430.40 |
[Note] In 2023, the R&D expenses mainly included the employees' labor cost and direct investment cost,accounting for more than 80% of the total R&D expenses.Financial expenses
| Item | Amount for the current period | Amount incurred for the previous period |
| Interest expense [Note 1] | 2,962,205,439.75 | 2,836,743,431.08 |
| Less: Interest income [Note 2] | 6,189,969,897.82 | 4,646,747,718.69 |
| Add: Exchange profits and losses | -373,003,623.17 | -500,019,034.67 |
| Commissions | 67,736,176.25 | 97,740,063.96 |
| Interest expense for defined benefit obligation | 5,173,500.00 | 5,241,236.00 |
| Others | 1,336,553.24 | 277,430.67 |
| Total | -3,526,521,851.75 | -2,206,764,591.65 |
[Note 1] The above interest expenses include borrowing interest expenses and discount interest expenses;[Note 2] Both the above interest income and the interest income in this Note “V. 56. Interest income andinterest expenses are capital income”.Other income
| Sources of other income | Amount for the current period | Amount incurred for the previous period | The amount included in non-recurring profits and losses in the current period |
| Government grants | 716,882,751.82 | 866,364,721.39 | 680,624,707.59 |
| Commissions refund individual income tax and others | 183,786,384.13 | 13,444,790.66 | 40,553,390.36 |
| Total | 900,669,135.95 | 879,809,512.05 | 721,178,097.95 |
Income from investment
| Item | Amount for the current period | Amount incurred for the previous period |
| Investment income obtained from trading financial instruments | 280,532,436.05 | 12,797,272.64 |
| Long-term equity investment income measured by the equity method | 93,222,443.16 | -3,324,287.24 |
Page 266 of 310
| Item | Amount for the current period | Amount incurred for the previous period |
| Investment income from derivative financial instruments | -334,089,576.80 | 5,308,155.89 |
| Others | 177,491,302.82 | 72,102,800.45 |
| Total | 217,156,605.23 | 86,883,941.74 |
Income from changes in fair value
| Sources of income from changes in fair value | Amount for the current period | Amount incurred for the previous period |
| Derivative financial instruments | 290,358,381.45 | -389,491,823.26 |
| Trading financial instruments | 135,772,263.81 | 59,588,240.62 |
| Others | 11,453,343.46 | -13,672,122.47 |
| Total | 437,583,988.72 | -343,575,705.11 |
Credit impairment losses
| Item | Amount for the current period | Amount incurred for the previous period |
| Bad debt losses | -824,454,538.38 | -504,912,773.22 |
| Impairment losses of buying back the sale | -3,077,495.66 | |
| Impairment losses of loans and advances | 3,486,921.74 | 88,544,000.00 |
| Total | -824,045,112.30 | -416,368,773.22 |
Asset impairment losses
| Item | Amount for the current period | Amount incurred for the previous period |
| Inventory falling price losses | -2,077,565,556.79 | -682,224,437.94 |
| Goodwill impairment losses | -206,861,546.92 | -246,572,327.43 |
| Impairment losses of contract assets | -23,251,340.92 | -41,268,491.89 |
| Other asset impairment losses | -185,901,249.45 | 3,386,247.75 |
| Total | -2,493,579,694.08 | -966,679,009.51 |
Income from disposal of assets
| Source of income from disposal of assets | Amount for the current period | Amount incurred for the previous period |
| Gains from disposal of non-current assets (losses expressed with "?") | 382,923,791.69 | 608,425.71 |
| Total | 382,923,791.69 | 608,425.71 |
Non-operating revenues
| Item | Amount for the current period | Amount incurred for the previous period | The amount included in non-recurring profits and losses in the current period |
| Net profit from destruction scrap of non-current assets | 3,273,237.25 | 580,724.89 | 3,273,237.25 |
Page 267 of 310
| Item | Amount for the current period | Amount incurred for the previous period | The amount included in non-recurring profits and losses in the current period |
| Including: Gains or losses from destruction scrap of fixed assets | 3,273,237.25 | 580,724.89 | 3,273,237.25 |
| Government subsidies related to non-operation | 26,340,308.60 | 11,816,261.51 | 26,340,308.60 |
| Others | 98,758,262.67 | 47,413,344.96 | 98,758,262.67 |
| Total | 128,371,808.52 | 59,810,331.36 | 128,371,808.52 |
Non-operating expenses
| Item | Amount for the current period | Amount incurred for the previous period | The amount included in non-recurring profits and losses in the current period |
| Total losses from scrap of non-current assets | 57,463,367.50 | 53,809,736.38 | 57,463,367.50 |
| Including: Losses from destruction scrap of fixed assets | 57,463,367.50 | 42,611,579.47 | 57,463,367.50 |
| Others | 119,984,960.59 | 72,712,838.55 | 119,984,960.59 |
| Total | 177,448,328.09 | 126,522,574.93 | 177,448,328.09 |
Income tax expenses
(1) Table of income tax expenses
| Item | Amount for the current period | The amount incurred for the previous period |
| Income tax expenses in the current period | 6,477,401,667.61 | 4,911,250,568.93 |
| Deferred income tax expenses | -1,380,720,743.01 | -705,210,079.43 |
| Total | 5,096,680,924.60 | 4,206,040,489.50 |
(2) Adjustment of accounting profits and income tax expenses
| Item | Amount for the current period |
| Total profits | 32,815,703,838.19 |
| Income tax expenses calculated at the statutory/applicable tax rate | 4,922,355,575.73 |
| Impact by different tax rates applicable to subsidiaries | -41,823,864.43 |
| Impact by non-deductible costs, expenses and losses | 50,924,079.26 |
| Impact of deductible temporary differences or deductible losses on unrecognized deferred income tax assets at the end of the period | 305,236,870.16 |
| Others | -140,011,736.12 |
| Income tax expenses | 5,096,680,924.60 |
Items of cash flow statement
(1) Cash flows related to operating activities
1) Other cash received related to operating activities
| Item | Amount for the current period | Amount incurred for the previous period |
Page 268 of 310
| Item | Amount for the current period | Amount incurred for the previous period |
| Government grants | 990,758,810.62 | 1,505,716,278.65 |
| Interest income | 386,430,147.87 | 232,202,309.34 |
| Net decrease in bill pledge deposits and guarantee deposits | 630,231,744.37 | |
| Cash pledges, deposits, and others | 1,461,579,187.30 | 1,519,632,130.33 |
| Total | 2,838,768,145.79 | 3,887,782,462.69 |
2) Other cash payments related to operating activities
| Item | Amount for the current period | Amount incurred for the previous period |
| Cash payments for sales expenses | 8,562,376,407.52 | 7,472,508,694.30 |
| Net increase in bill pledge deposits and guarantee deposits | 5,911,533,582.83 | |
| Cash payments for overhead expenses and R&D expenses | 1,800,397,545.02 | 1,687,485,005.09 |
| Return of advance project funds | 165,658,259.48 | 201,388,556.08 |
| Payment of performance, bid security, and others | 1,117,354,876.06 | 1,125,497,555.86 |
| Total | 17,557,320,670.91 | 10,486,879,811.33 |
(2) Cash related to investment activities
1) Cash received related to investment activities
| Item | Amount for the current period | Amount incurred for the previous period |
| Redemption of monetary investment products, large certificates of deposit, debt instrument investments, and other products | 21,394,360,863.88 | 6,820,424,111.41 |
| Total | 21,394,360,863.88 | 6,820,424,111.41 |
2) Cash payment related to investment activities
| Item | Amount for the current period | Amount incurred for the previous period |
| Payment of monetary investment products, large certificates of deposit, debt instrument investments, and other products | 84,266,255,633.47 | 13,113,484,681.50 |
| Total | 84,266,255,633.47 | 13,113,484,681.50 |
3) Other cash received related to investment activities
| Item | Amount for the current period | Amount incurred for the previous period |
| Net decrease in fixed deposits | 21,131,039,386.45 | |
| Fixed deposit interest income | 3,556,171,690.87 | 3,443,556,899.78 |
| Others | 28,671,249.18 | |
| Total | 24,715,882,326.50 | 3,443,556,899.78 |
4) Other cash payments related to investment activities
| Item | Amount for the current period | Amount incurred for the previous period |
| The net outflow of forward foreign settlement and purchase | 304,332,374.80 | 706,243,786.63 |
| Net increase in fixed deposits | 25,303,307,257.06 |
Page 269 of 310
| Item | Amount for the current period | Amount incurred for the previous period |
| Others | 3,866,295.73 | 39,078,603.18 |
| Total | 308,198,670.53 | 26,048,629,646.87 |
(3) Other cash paid related to financing activities
1) Other cash payments related to financing activities
| Item | Amount for the current period | Amount incurred for the previous period |
| Net decrease in pledge deposits on borrowings | 19,055,112,862.00 | |
| Collection of employee stock ownership plan funds | 1,108,073,316.80 | |
| Others | 40,000,000.00 | 20,000,000.00 |
| Total | 20,203,186,178.80 | 20,000,000.00 |
2) Other cash payments related to financing activities
| Item | Amount for the current period | Amount incurred for the previous period |
| Cash payment for repurchased shares | 3,000,202,396.37 | |
| Net increase in pledge deposits on borrowings | 12,253,655,898.35 | |
| Others | 1,362,342,134.72 | 1,425,089,651.60 |
| Total | 4,362,544,531.09 | 13,678,745,549.95 |
3) Changes in liabilities arising from financing activities
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending Balance | ||
| Cash changes | Non cash changes | Cash changes | Non cash changes | |||
| Bank loans and others | 105,836,297,465.02 | 67,752,847,047.14 | 2,881,245,758.59 | 88,794,222,755.28 | 87,676,167,515.47 | |
| Bonds payable | 899,737,500.00 | 12,087,909.84 | 911,825,409.84 | |||
| Dividends payable | 5,620,664,762.67 | 5,725,035,063.56 | 11,340,127,437.31 | 5,572,388.92 | ||
| Lease liabilities (including lease liabilities due within one year) | 213,791,544.62 | 804,053,382.56 | 161,010,955.66 | 856,833,971.52 | ||
| Total | 111,670,753,772.31 | 74,377,619,610.70 | 3,697,387,050.99 | 101,207,186,558.09 | 88,538,573,875.91 | |
Supplementary for cash flow statement
(1) Supplementary for cash flow statement
| Supplementary | Amount in the current period | Amount in the previous period |
| 1. Adjusting net profit to cash flow from operating activities: | ||
| Net Profits | 27,719,022,913.59 | 23,011,344,353.11 |
| Add: Assets and credit impairment reverse | 3,317,624,806.38 | 1,383,047,782.73 |
| Depreciation of fixed assets, depreciation of investment real estate, and amortization of right-to-use assets | 4,808,144,624.82 | 4,597,938,791.84 |
| Amortization of intangible assets | 475,186,591.56 | 372,007,224.51 |
Page 270 of 310
| Supplementary | Amount in the current period | Amount in the previous period |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (income expressed with “?”) | -382,923,791.69 | -608,425.71 |
| Loss from scrapping fixed assets (income expressed with “?”) | 54,190,130.25 | 53,229,011.49 |
| Losses from changes in fair value (income expressed with “?”) | -437,583,988.72 | 343,575,705.11 |
| Financial expenses (income expressed with “?”) | -3,910,047,955.94 | -3,022,815,788.07 |
| Investment losses (income expressed with “?”) | -217,156,605.23 | -86,883,941.74 |
| Decrease in deferred income tax assets (increase expressed with “?”) | -1,966,236,836.12 | -897,724,577.56 |
| Increase in deferred income tax liabilities (decrease expressed with “?”) | 585,516,093.11 | 192,514,498.13 |
| Decrease of inventories (increase expressed with “?”) | 3,656,838,547.28 | 5,509,950,723.66 |
| Decrease in operating receivables (increase expressed with “?”) | 12,312,109,488.56 | 6,522,203,496.59 |
| Increase in operating payables (decrease expressed with “?”) | 15,003,082,209.85 | -10,082,543,299.83 |
| Others [Note] | -4,619,339,873.53 | 773,200,367.01 |
| Net cash flows from operating activities | 56,398,426,354.17 | 28,668,435,921.27 |
| 2. Significant investing and financing activities that do not involve cash deposit and withdrawal: | ||
| 3. Net changes in cash and cash equivalents: | ||
| Ending balance of cash | 30,914,196,186.41 | 31,754,656,695.61 |
| Less: Beginning balance of cash | 31,754,656,695.61 | 29,951,743,758.00 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -840,460,509.20 | 1,802,912,937.61 |
| [Note] "Others" include the increase in statutory deposit reserves of RMB121,006,301.94, the net increase in bill deposits of RMB5,911,533,582.83, and the apportioned expenses of employee stock ownership plan for the current period of RMB1,413,200,011.24. |
(2) Net cash payment for acquisition of subsidiaries in the current period
| Item | Ganzhou Qianjin Real Estate Co., Ltd. |
| Cash or cash equivalent payment for business combination that occurred in the current period | 239,485,900.00 |
| Including: Cash | 239,485,900.00 |
| Less: Cash and cash equivalents held by the subsidiary on the acquisition date | 143,501.61 |
| Net cash payment for acquisition of subsidiaries | 239,342,398.39 |
(3) Net cash from disposal of subsidiaries this year
| Item | Jiangsu Datong Fan Co., Ltd. |
Page 271 of 310
| Item | Jiangsu Datong Fan Co., Ltd. |
| Cash or cash equivalents from the disposal of subsidiaries in this period | |
| Add: Cash or cash equivalents received this period from the disposal of subsidiaries in the previous period | 35,000,000.00 |
| Net cash from disposal of subsidiaries | 35,000,000.00 |
(4) Composition of cash and cash equivalents
| Item | Ending Balance | Beginning balance |
| I. Monetary funds | 124,104,987,289.62 | 157,484,332,251.39 |
| Including: Cash on hand | 747,248.45 | 678,327.53 |
| Bank deposits for payment at any time | 12,145,466,861.21 | 12,976,313,644.11 |
| Other monetary funds for payment at any time | 470,104,370.06 | 342,302,803.81 |
| Deposits in the central bank for payment at any time | 6,910,095.46 | 6,311,554.32 |
| Deposits in other banks for payment at any time | 18,290,967,611.23 | 18,429,050,365.84 |
| Time deposits and accrued interest not in the category of cash and cash equivalents | 56,746,121,561.64 | 76,514,578,051.75 |
| Deposits with restricted use | 36,444,669,541.57 | 49,215,097,504.03 |
| II. Cash equivalents | ||
| III. Ending balance of monetary funds and cash equivalents | 124,104,987,289.62 | 157,484,332,251.39 |
| Less: Time deposits and accrued interest not in the category of cash and cash equivalents | 56,746,121,561.64 | 76,514,578,051.75 |
| Less: Deposits with restricted use | 36,444,669,541.57 | 49,215,097,504.03 |
| Including: Statutory deposit reserves | 1,382,019,092.73 | 1,261,012,790.79 |
| Bill, letter of credit and other deposits | 35,062,650,448.84 | 47,954,084,713.24 |
| IV. Ending balance of cash and cash equivalents | 30,914,196,186.41 | 31,754,656,695.61 |
(5) Restricted usage scope but still listed as cash and cash equivalents
None.Annotations to items in the statement of changes in owner's equityNone.
Page 272 of 310
Monetary items in foreign currencies
(1) Monetary items in foreign currencies
| Item | USD converted into RMB | Euro converted into RMB | BRL converted into RMB | THB converted into RMB | Others | Converted into RMB in total |
| Exchange rate of December 31, 2023 | 7.0827 | 7.8592 | 1.4655 | 0.2074 | Not applicable | Not applicable |
| Monetary funds | 3,946,995,304.47 | 23,691,794.88 | 356,888,862.00 | 35,089,794.84 | 28,028,281.68 | 4,390,694,037.87 |
| Accounts receivable | 3,055,728,463.16 | 45,559,034.28 | 1,115,273,168.07 | 62,799,772.25 | 127,628,045.32 | 4,406,988,483.08 |
| Other receivables | 7,033,673.13 | 443,276.56 | 358,152.20 | 3,504,201.14 | 7,545,993.12 | 18,885,296.15 |
| Short-term borrowings | 1,815,817,633.94 | 1,815,817,633.94 | ||||
| Accounts payable | 222,105,016.90 | 3,985,533.30 | 55,643,642.10 | 34,361,823.24 | 31,043,508.39 | 347,139,523.93 |
| Other payables | 185,865,733.39 | 12,243,392.79 | 2,413,819.79 | 2,660,553.66 | 203,183,499.63 |
(2) Description of overseas operating entities
None.
Page 273 of 310
Lease
1) The simplified treatment of short-term lease or low-value asset lease expenses is RMB82,935,016.32.
2) Sale-leaseback transaction
Some subsidiaries of the Company transferred some machinery equipment to financial leasecompanies and leased them back. In the sale-leaseback transaction, the financial lease company cannotdominate the use of the goods and obtain almost all economic benefits from it. The Company can dominatethe use of the leased assets, and has not transferred the control of them. Therefore, the sale-leasebacktransaction does not meet the requirements of sales. The Company continues to recognize the transferredassets and recognizes long-term payables at the same time.
3) When the Company is a lessor
| Item | Rental incomes | Including: Income related to variable lease payments not included in lease payments |
| Operating lease as a lessor | 129,448,972.66 | |
| Total | 129,448,972.66 |
VI. Change in the consolidation scopeBusiness combinations not under common control
(1) Business combinations not under common control in the current period
| Name of the Acquiree | Time Point of Equity Acquisition | Equity Acquisition Cost | Equity Acquisition Proportion | Equity Acquisition Method | Acquisition Date |
| Ganzhou Qianjin Real Estate Co., Ltd. | 2023/10/31 | 239,485,900.00 | 90.00% | Purchase by cash | 2023/10/31 |
(Continued)
| Name of the Acquiree | Basis for Determining the Acquisition Date | Operating Income of the Acquiree from the Acquisition Date to the End of the Period | Net Profit of the Acquiree from the Acquisition Date to the End of the Period | Cash Flow of the Acquiree from the Acquisition Date to the End of the Period |
| Ganzhou Qianjin Real Estate Co., Ltd. | Acquisition of control | -804,692.79 | 3,947,533.56 |
(2) Cost and goodwill of business combination
| Cost of the business combination | Amount |
| The total cost of the business combination | 239,485,900.00 |
| Including: Cash | 239,485,900.00 |
| Less: Fair value of the identifiable net assets acquired | 239,485,903.54 |
| Combination cost less than the share of fair value of identifiable net asset acquired | -3.54 |
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
| Item | Ganzhou Qianjin Real Estate Co., Ltd. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Assets: | ||
Page 274 of 310
| Item | Ganzhou Qianjin Real Estate Co., Ltd. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Monetary funds | 143,501.61 | 143,501.61 |
| Other receivables | 19,819,308.24 | 19,819,308.24 |
| Inventory | 226,354,123.01 | 226,354,123.01 |
| Other current assets | 19,778,515.52 | 19,778,515.52 |
| Subtotal of assets | 266,095,448.38 | 266,095,448.38 |
| Liabilities: | ||
| Subtotal of liabilities | ||
| Net Assets | 266,095,448.38 | 266,095,448.38 |
| Less: Minority shareholders' equity | 26,609,544.84 | 26,609,544.84 |
| Net assets acquired | 239,485,903.54 | 239,485,903.54 |
(4) Gains or losses arising from the remeasurement of equity held before the acquisition date at fair valueNone.Business combination under common controlNone.Reverse acquisitionsNone.
Page 275 of 310
Disposal of subsidiaries
| Name of Subsidiary | Time Point of Losing Control | Disposal Price of the Time Point of Losing Control | Disposal Ratio of the Time Point of Losing Control (%) | Disposal Methods of the Time Point of Losing Control | Basis for Determining the Time Point of Losing Control | The Difference Between the Disposal Price and the Share of the Subsidiaries' Net Assets at the Level of Consolidated Statements Corresponding to the Disposal Investment | Proportion of Remaining Equity on the Date of Losing Control (%) | Book Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Fair Value of the Remaining Equity at the Consolidated Financial Statement Level on the Date of Losing Control | Gains or Losses Arising from Remeasurement of Remaining Equity at Fair Value | Determination Methods and Main Assumptions of the Fair Value of the Remaining Equity on the Date of Losing Control at the Consolidated Financial Statement Level | Amount of Other Comprehensive Income Related to Equity Investment of the Original Subsidiary Transferred into Investment Profits and Losses or Retained Earnings |
| Tianjin Gree Xinhui Medical Equipment Co., Ltd. | 2023-10-30 | 100.00 | Canceled | Business registration | None | |||||||
| SL Group Jingu Grain Depot Co., Ltd. | 2023-8-25 | 100.00 | Canceled | Business registration | None | |||||||
| SL Group Songlin Grain Depot Co., Ltd. | 2023-9-22 | 100.00 | Canceled | Business registration | None | |||||||
| DunAn Sensing Technology Co., Ltd. | 2023-6-5 | 66.58 | Canceled | Business registration | None | |||||||
| Jilin Songliang Modern Logistics Development Co., Ltd. | 2023-5-6 | 100.00 | Canceled | Business registration | None |
Change of consolidation scope for other reasonsNewly established entity in the current period:
Page 276 of 310
| Company Name | Date of Establishment | Net Assets at the End of the Period | Net Profit from the Combination Date to the End of the Period |
| Hunan DunAn Refrigeration Equipment Co., Ltd. | 2023-2-7 | 22,486,643.44 | 2,486,643.44 |
| Luoyang Herun Real Estate Co., Ltd. | 2023-9-28 | -51,151.68 | -51,151.68 |
| Gree Lintanyuan (Shanghai) Technology Co., Ltd. | 2023-10-20 |
VII. Equity in other subjectsEquity in subsidiaries
(1) Composition of the enterprise group
| S/N | Name of Subsidiary | Main Business Location | Place of Registration | Nature of Business | Shareholding Ratio (%) | Voting Right Proportion (%) | Acquisition Method | |
| Direct | Indirect | |||||||
| 1 | Gree (Chongqing) Electric Appliances Co., Ltd. | Chongqing City | Chongqing City | Industrial manufacture | 97.00 | 97.00 | Establishment | |
| 2 | Zhuhai Landa Compressor Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination under common control | |
| 3 | Zhuhai Gree Electric Enterprises Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination under common control | |
| 4 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination under common control | |
| 5 | Zhuhai Kaibang Motor Manufacturing Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combinations not under common control | |
| 6 | Gree (Hefei) Electric Appliances Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 7 | Gree (Zhongshan) Small Home Appliances Co., Ltd. | Zhongshan City | Zhongshan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 8 | Zhuhai Gree Group Finance Company Limited | Zhuhai City | Zhuhai City | Finance | 99.54 | 0.46 | 100.00 | Business combination under common control |
| 9 | Gree Electric Appliances (Brazil) Co., Ltd. | Manaus, Brazil | Manaus, Brazil | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 10 | Gree Hong Kong Electric Appliances Sales Co., Ltd. | Kowloon, Hong Kong | Kowloon, Hong Kong | Sales | 100.00 | 100.00 | Business combinations not under common control | |
| 11 | Gree Shanghai Air Conditioners Sales Co., Ltd. | Shanghai City | Shanghai City | Sales | 90.00 | 9.70 | 99.70 | Establishment |
Page 277 of 310
| S/N | Name of Subsidiary | Main Business Location | Place of Registration | Nature of Business | Shareholding Ratio (%) | Voting Right Proportion (%) | Acquisition Method | |
| Direct | Indirect | |||||||
| 12 | Zhuhai Gree Daikin Precision Mold Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 51.00 | 51.00 | Establishment | |
| 13 | Zhuhai Gree Dakin Device Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 51.00 | 51.00 | Establishment | |
| 14 | Zhuhai Gree Green Refrigeration Technology Research Center Co., Ltd. | Zhuhai City | Zhuhai City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 15 | Gree (Zhengzhou) Electric Appliances Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 16 | Gree (Wuhan) Electric Appliances Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 17 | Zhengzhou Gree Green Renewable Resources Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 18 | Hunan Green Renewable Resources Co., Ltd. | Ningxiang County | Ningxiang County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 19 | Wuhu Green Renewable Resources Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 20 | Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 21 | Gree (Wuhu) Electric Appliances Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 22 | Shijiazhuang Green Renewable Resources Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 23 | Gree (Shijiazhuang) Electric Appliances Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Business combinations not under common control | |
| 24 | Tianjin Green Renewable Resources Utilization Co., Ltd. | Tianjin City | Tianjin City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 25 | Zhuhai Gree HVAC and Refrigeration Equipment Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 26 | Zhuhai Gree TOSOT Home Appliances Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 27 | Zhuhai EWPE Information Technology Inc. | Zhuhai City | Zhuhai City | Information technologies | 100.00 | 100.00 | Establishment | |
| 28 | Gree (Changsha) HVAC Equipment Co., Ltd. | Changsha City | Changsha City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 29 | Gree TOSOT (Suqian) Home Appliances Co., Ltd. | Suqian City | Suqian City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
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| S/N | Name of Subsidiary | Main Business Location | Place of Registration | Nature of Business | Shareholding Ratio (%) | Voting Right Proportion (%) | Acquisition Method | |
| Direct | Indirect | |||||||
| 30 | Wuhu Gree Precision Manufacturing Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 31 | Zhuhai Gree Intelligent Equipment Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 32 | Zhuhai Hengqin Gree Business Factoring Co., Ltd. | Zhuhai City | Zhuhai City | Finance | 100.00 | 100.00 | Establishment | |
| 33 | Zhuhai Gree Precision Mold Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 34 | Gree HVAC and Refrigeration Equipment (Wuhan) Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 35 | Zhuhai Gree Intelligent Equipment Technology Institute Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 36 | Zhuhai Gree New Material Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 37 | Gree Precision Mould (Wuhan) Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 38 | Zhuhai Gree Energy Environment Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 39 | Gree (Hangzhou) Electric Appliances Co., Ltd. | Hangzhou City | Hangzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 40 | Gree Information Technology Co., Ltd. of Zhuhai | Zhuhai City | Zhuhai City | Information technologies | 51.00 | 51.00 | Establishment | |
| 41 | Gree HVAC Equipment (Chengdu) Co., Ltd. | Chengdu City | Chengdu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 42 | Gree CNC Machine Tool Research Institute Co., Ltd. of Zhuhai | Zhuhai City | Zhuhai City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 43 | Gree (Wu'an) Precision Equipment Manufacturing Co., Ltd. | Wu'an County | Wu'an County | Industrial manufacture | 70.00 | 70.00 | Establishment | |
| 44 | Zhuhai Gree Transportation Co., Ltd. | Zhuhai City | Zhuhai City | Transportation | 100.00 | 100.00 | Establishment | |
| 45 | Gree Robot (Luoyang) Co., Ltd. | Luoyang City | Luoyang City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 46 | Gree (Nanjing) Electric Appliances Co., Ltd. | Nanjing City | Nanjing City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 47 | Gree (Luoyang) Electric Appliances Co., Ltd. | Luoyang City | Luoyang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
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| S/N | Name of Subsidiary | Main Business Location | Place of Registration | Nature of Business | Shareholding Ratio (%) | Voting Right Proportion (%) | Acquisition Method | |
| Direct | Indirect | |||||||
| 48 | Zhuhai Edgeless Integrated Circuit Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 49 | Zhuhai Lianyun Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 50 | Gree (Chengdu) Electric Appliances Co., Ltd. | Chengdu City | Chengdu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 51 | Gree Material Supply Co., Ltd. of Zhuhai | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 52 | Zhuhai Gree Green Control Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 53 | Hefei Kinghome Electrical Co., Ltd. | Hefei City | Hefei City | Industrial manufacture | 100.00 | 100.00 | Business combinations not under common control | |
| 54 | Zhuhai Gree Mechanical and Electrical Engineering Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination under common control | |
| 55 | Gree Precision Mold (Chengdu) Co., Ltd. | Chengdu City | Chengdu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 56 | Gree Electric Appliances (Luoyang) Washing Machine Co., Ltd. | Luoyang City | Luoyang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 57 | Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd. | Zhuhai City | Zhuhai City | Information technologies | 75.00 | 1.52 | 76.52 | Establishment |
| 58 | Gree Precision Mould (Anji) Co., Ltd. | Anji County | Anji County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 59 | Zhuhai Gree Green Resources Recycling Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 60 | Gree E-commerce Co., Ltd. | Zhuhai City | Zhuhai City | Wholesales and retails | 100.00 | 100.00 | Establishment | |
| 61 | Zhuhai Gejian Health Medical Technology Co., Ltd. | Zhuhai City | Zhuhai City | Medical device | 100.00 | 100.00 | Establishment | |
| 62 | Zhuhai Gree Electrical Intelligent Manufacturing Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 63 | Gree Chengdu Xinhui Medical Equipment Co., Ltd. | Chengdu City | Chengdu City | Medical device | 75.00 | 1.52 | 76.52 | Establishment |
| 64 | SL Group Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 75.00 | 75.00 | Business combinations not under common control | |
| 65 | Gree (Ganzhou) Electric Appliances Co., Ltd. | Ganzhou City | Ganzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 66 | Gree (Linyi) Electric Appliances Co., Ltd. | Linyi City | Linyi City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
Page 280 of 310
| S/N | Name of Subsidiary | Main Business Location | Place of Registration | Nature of Business | Shareholding Ratio (%) | Voting Right Proportion (%) | Acquisition Method | |
| Direct | Indirect | |||||||
| 67 | Gree (Zhuhai Hengqin) Development Co., Ltd. | Zhuhai City | Zhuhai City | Real estate industry | 100.00 | 100.00 | Establishment | |
| 68 | Changsha Kinghome Electric Appliances Co., Ltd | Changsha City | Changsha City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 69 | Gree Altairnano New Energy Inc. | Zhuhai City | Zhuhai City | Research and experimental development | 55.01 | 72.47 | Business combinations not under common control | |
| 70 | Zhuhai Mingruida Supply Chain Technology Co., Ltd. | Zhuhai City | Zhuhai City | Transportation | 70.00 | 70.00 | Establishment | |
| 71 | Zhejiang DunAn Artificial Environment Co., Ltd. | Zhuji City | Zhuji City | Industrial manufacture | 38.78 | 38.78 | Business combinations not under common control | |
| 72 | Zhuhai Gree Electronic Components Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 73 | Zhuhai Gree Digital Technology Co., Ltd. | Zhuhai City | Zhuhai City | Wholesales and retails | 100.00 | 100.00 | Establishment | |
| 74 | Zhuhai Gree Prefabricated Vegetable Equipment Technology Development Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 75 | Gree Lintanyuan (Shanghai) Technology Co., Ltd. | Shanghai City | Shanghai City | Electrical machinery and equipment manufacturing industry | 40.00 | 15.30 | 55.30 | Establishment |
| [Note] The Company directly holds 38.78% equity interests in Zhejiang DunAn Artificial Environment Co., Ltd. (hereinafter referred to as "DunAn Environment"), becoming the largest shareholder of DunAn Environment, which has the power to reorganize the board of directors of DunAn Environment and nominate more than half of the directors. The Company has completed the reorganization of the board of directors of DunAn Environment, and occupies more than half of the seats on the board of directors. It can control DunAn Environment, and include DunAn Environment into the scope of company consolidation. |
(2) Important non wholly-owned subsidiaries
None.
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Transactions in which the share of owner's equity in the subsidiary changes and still controls thesubsidiaryIn December 2023, the Company transferred 270.7232 million shares of Gree Altairnano (accounting for
24.54% of the total share capital of Gree Altairnano) held by 12 minority shareholders of its subsidiaryGREE Altairnano New Energy Inc. (hereinafter referred to as "Gree Altairnano"), the transaction price isRMB1,015,328,400. After the transfer of this part of the shares, the Company controls the voting rightscorresponding to 799,592,600 shares of Gree Altairnano, accounting for 72.47% of the total share capital ofGree Altairnano. Among them, the Company directly holds 606,920,600 shares of Gree Altairnano(accounting for 55.01% of Gree Altairnano's total share capital), and arranges for the voting rightscorresponding to Ms. Dong Mingzhu's 192.672 million shares of Gree Altairnano (accounting for 17.46%of Gree Altairnano's total share capital) through voting rights delegation.Equities in joint ventures or associates
(1) Important joint ventures or associates
None.
(2) Main financial information of important joint ventures
None.
(3) Main financial information of important associates
None.
(4) Summary financial information of unimportant joint ventures and associates
| Item | Ending balance/Current amount incurred | Beginning balance/Amount incurred in the previous period |
| Joint ventures: | ||
| Total investment book value | 1,158,934.68 | 1,166,358.97 |
| The total number of the following items was calculated based on the shareholding ratio | ||
| ?Net Profits | -7,424.29 | -54,555.22 |
| ?Total comprehensive income | -7,424.29 | -54,555.22 |
| Associates: | ||
| Total investment book value | 4,487,808,096.52 | 5,891,124,209.84 |
| The total number of the following items was calculated based on the shareholding ratio | ||
| ?Net Profits | 93,229,867.45 | -3,269,732.02 |
| ?Other comprehensive income | -1,013,488,757.99 | -4,752,978,434.78 |
| ?Total comprehensive income | -920,258,890.54 | -4,756,248,166.80 |
(5) Significant restrictions on the ability of joint ventures or associates to transfer funds to the CompanyNone.
(6) Excess losses incurred by joint ventures or associates
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| Name of joint venture or associates | Accumulated unrecognized losses accumulated in the previous period | Unrecognized losses in the current period (or net profit share in the current period) | Accumulated unrecognized losses at the end of the current period |
| Beijing Gree Technology Co., Ltd. | -571,081.35 | -557,806.42 | -1,128,887.77 |
| Eocell Limited | -2,002,480.71 | -8,184,268.64 | -10,186,749.35 |
(7) Unrecognized commitments related to investment in joint ventures
None.
(8) Contingent liabilities related to investment in joint ventures or associatesNone.Important co-managementNone.Equity in structured entities is not included in the Consolidated Financial StatementsNone.VIII. Government grantsGovernment grants are recognized at the end of the period based on the amount receivableThere are no government grants recognized at the end of the period based on the amount receivableDebt projects involved government grants
| Items in financial statements | Beginning balance | Newly added grant amount in this period | Other income transferred in this period | Ending Balance | Related to assets/incomes |
| Deferred income | 3,159,328,449.42 | 348,896,246.22 | 183,078,821.79 | 3,325,145,873.85 | Related to assets |
| Deferred income | 175,749,517.97 | 75,257,308.26 | 51,997,898.56 | 199,008,927.67 | Related to incomes |
| Total | 3,335,077,967.39 | 424,153,554.48 | 235,076,720.35 | 3,524,154,801.52 |
Government subsidies included in the profits and losses this year
| Items in financial statements | Amount for the current period | Amount incurred for the previous period |
| Other income | 716,882,751.82 | 866,364,721.39 |
| Non-operating revenues | 26,340,308.60 | 11,816,261.51 |
| Total | 743,223,060.42 | 878,180,982.90 |
IX. Risks associated with financial instrumentsMain financial instruments of the Company including monetary funds, trading financial assets, derivativefinancial assets, notes receivable, receivables financing, receivables, loans issued and advances, buyingback the sale of financial assets, debt investments, other debt investments, other equity instrumentinvestments, other financial liabilities arising from operation (e.g., payables). These financial instrumentsaim to provide funds for operations of the Company.
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The main risks caused by the Company's financial instruments are credit risk, liquidity risk, and market risk.Risks of financial instruments
(1) Classification of financial instruments
The book values of various financial instruments on the balance sheet date:
1) Ending Balance
| Item | Classification of financial assets | |||
| Financial assets are measured at amortization costs | Financial assets measured at fair value with changes included in other comprehensive income | Financial assets measured at fair value with changes included in other comprehensive income | Total | |
| 1. Measured at amortized costs | ||||
| Monetary funds | 124,104,987,289.62 | 124,104,987,289.62 | ||
| Notes receivable | 87,340,130.52 | 87,340,130.52 | ||
| Accounts receivable | 16,099,477,117.56 | 16,099,477,117.56 | ||
| Other receivables | 826,558,622.42 | 826,558,622.42 | ||
| Buying back the sale of financial assets | 3,932,338,954.49 | 3,932,338,954.49 | ||
| Non-current assets due within one year | 53,899,646.40 | 53,899,646.40 | ||
| Other current financial assets | 22,648,940,712.61 | 22,648,940,712.61 | ||
| Disbursement of loans and advances | 543,726,609.23 | 543,726,609.23 | ||
| Debt investment | 1,150,744,482.05 | 1,150,744,482.05 | ||
| Long-term receivables | 62,185,327.12 | 62,185,327.12 | ||
| Other non-current financial assets | 41,140,982,554.52 | 41,140,982,554.52 | ||
| Subtotal | 210,651,181,446.54 | 210,651,181,446.54 | ||
| 2. Measured at fair values | ||||
| Trading financial assets | 9,614,423,403.40 | 9,614,423,403.40 | ||
| Derivative financial assets | 108,919,513.22 | 108,919,513.22 | ||
| Receivables financing | 10,176,089,668.41 | 10,176,089,668.41 | ||
| Non-current assets due within one year | 2,357,733,812.89 | 2,357,733,812.89 | ||
| Other current financial assets | 3,175,475.00 | 5,407,350.00 | 8,582,825.00 | |
| Other debt investments | 16,363,841,665.96 | 16,363,841,665.96 | ||
| Other equity instrument investments | 3,864,865,509.37 | 3,864,865,509.37 | ||
| Subtotal | 32,765,706,131.63 | 9,728,750,266.62 | 42,494,456,398.25 | |
| Total | 210,651,181,446.54 | 32,765,706,131.63 | 9,728,750,266.62 | 253,145,637,844.79 |
(Continued)
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| Item | Classification of financial liabilities | ||
| Financial liabilities measured at fair value with changes included in the current profits and losses | Other financial liabilities | Total | |
| 1. Measured at amortized costs | |||
| Short-term borrowings | 26,443,476,388.52 | 26,443,476,388.52 | |
| Notes payable | 23,741,128,400.12 | 23,741,128,400.12 | |
| Accounts payable | 41,147,359,221.95 | 41,147,359,221.95 | |
| Deposits from customers and interbank | 254,616,899.35 | 254,616,899.35 | |
| Other payables | 5,513,266,516.82 | 5,513,266,516.82 | |
| Non-current liabilities due within one year | 20,605,521,073.03 | 20,605,521,073.03 | |
| Other current financial liabilities | 8,654,989,988.95 | 8,654,989,988.95 | |
| Long-term borrowings | 39,035,742,535.09 | 39,035,742,535.09 | |
| Lease liabilities | 767,007,951.92 | 767,007,951.92 | |
| Long-term payables | 27,028,498.30 | 27,028,498.30 | |
| Subtotal | 166,190,137,474.05 | 166,190,137,474.05 | |
| 2. Measured at fair values | |||
| Derivative financial liabilities | 4,079,919.91 | 4,079,919.91 | |
| Subtotal | 4,079,919.91 | 4,079,919.91 | |
| Total | 4,079,919.91 | 166,190,137,474.05 | 166,194,217,393.96 |
2) Beginning balance
| Item | Classification of financial assets | |||
| Financial assets measured at amortization costs | Financial assets measured at fair value with changes included in other comprehensive income | Financial assets measured at fair value with changes included in other comprehensive income | Total | |
1. Measured at amortized
costs
| 1. Measured at amortized costs |
Monetary funds
| Monetary funds | 157,484,332,251.39 | 157,484,332,251.39 |
Notes receivable
| Notes receivable | 6,818,428.95 | 6,818,428.95 |
Accounts receivable
| Accounts receivable | 14,824,742,623.45 | 14,824,742,623.45 |
Other receivables
| Other receivables | 804,277,958.80 | 804,277,958.80 |
Non-current assets duewithin one year
| Non-current assets due within one year | 38,344,030.45 | 38,344,030.45 |
Other current financial assets
| Other current financial assets | 2,646,094,959.26 | 2,646,094,959.26 |
Disbursement of loans andadvances
| Disbursement of loans and advances | 719,799,280.27 | 719,799,280.27 |
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| Item | Classification of financial assets | |||
| Financial assets measured at amortization costs | Financial assets measured at fair value with changes included in other comprehensive income | Financial assets measured at fair value with changes included in other comprehensive income | Total | |
Debt investment
| Debt investment | 150,351,500.00 | 150,351,500.00 |
Long-term receivables
| Long-term receivables | 116,084,973.52 | 116,084,973.52 |
Other non-current financialassets
| Other non-current financial assets | 192,148,986.36 | 192,148,986.36 |
Subtotal
| Subtotal | 176,982,994,992.45 | 176,982,994,992.45 |
2. Measured at fair values
| 2. Measured at fair values |
Derivative financial assets
| Derivative financial assets | 3,867,203,363.52 | 3,867,203,363.52 |
Receivables financing
| Receivables financing | 28,427,310,345.20 | 28,427,310,345.20 |
Non-current assets duewithin one year
| Non-current assets due within one year | 3,275,847,602.74 | 3,275,847,602.74 |
Other current financial assets
| Other current financial assets | 1,260,250.00 | 998,950.00 | 2,259,200.00 |
Other debt investments
| Other debt investments | 14,340,348,882.97 | 14,340,348,882.97 |
Other equity instrumentinvestments
| Other equity instrument investments | 4,669,455,797.90 | 4,669,455,797.90 |
Other non-current financialassets
| Other non-current financial assets | 4,428,003,204.49 | 4,428,003,204.49 |
Subtotal
| Subtotal | 50,714,222,878.81 | 8,296,205,518.01 | 59,010,428,396.82 |
Total
| Total | 176,982,994,992.45 | 50,714,222,878.81 | 8,296,205,518.01 | 235,993,423,389.27 |
(Continued)
| Item | Classification of financial liabilities | ||
| Financial liabilities measured at fair value with changes included in the current profits and losses | Other financial liabilities | Total | |
| 1. Measured at amortized costs | |||
| Short-term borrowings | 52,895,851,287.92 | 52,895,851,287.92 | |
| Notes payable | 38,609,900,819.74 | 38,609,900,819.74 | |
| Accounts payable | 32,856,071,488.87 | 32,856,071,488.87 | |
| Deposits from customers and interbank | 219,111,069.61 | 219,111,069.61 | |
| Other payables | 10,912,406,666.89 | 10,912,406,666.89 | |
| Non-current liabilities due within one year | 188,387,613.61 | 188,387,613.61 | |
| Other current financial liabilities | 3,412,127,253.85 | 3,412,127,253.85 | |
| Long-term borrowings | 30,784,241,211.21 | 30,784,241,211.21 | |
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| Item | Classification of financial liabilities | ||
| Financial liabilities measured at fair value with changes included in the current profits and losses | Other financial liabilities | Total | |
| Lease liabilities | 146,836,620.66 | 146,836,620.66 | |
| Long-term payables | 104,644,415.20 | 104,644,415.20 | |
| Subtotal | 170,129,578,447.56 | 170,129,578,447.56 | |
| 2. Measured at fair values | |||
| Derivative financial liabilities | 184,811,894.98 | 184,811,894.98 | |
| Subtotal | 184,811,894.98 | 184,811,894.98 | |
| Total | 184,811,894.98 | 170,129,578,447.56 | 170,314,390,342.54 |
(2) Credit risks
Credit risk refers to a risk of financial losses suffered by one party due to the non-performance ofobligations by the other party of financial instrument.The Company only have transactions with recognized customers with a good reputation. Under the policiesof the Company, all the customers who require the credit form for transactions shall undergo credit review.Besides, the Company continuous to monitor the balance of accounts receivable to ensure that theCompany is not confronted with the major risk of bad debts.Financial assets of the Company include monetary funds, receivables financing. The credit risks of thesefinancial assets come from nonperformance of the transaction counterparty, and the maximum riskexposure is equal to the carrying amount of these instruments.The monetary funds are deposited in state-owned financial institutions with high credit rating, minimizingthe risk; the receivables financing is mainly banker's acceptance bills, and the risk exposure is rather small.The book values of notes receivable, receivables financing, accounts receivable, other receivables, contractassets, loans issued and advances, and long-term receivables in the Consolidated Balance Sheet are thehighest credit risk with which the Company may be confronted.As of the end of the report period, the Company's notes receivables, accounts receivable, receivablesfinancing, other receivables, contract assets, loans issued and advances, and long-term receivables accountfor 12.96% of the total assets (the beginning balance is 14.11%), and the above amounts are mainly duewithin 1 year, so the Company has no significant credit risk. The Company's credit risk exposure arisingfrom the above financial assets is disclosed in this Note “V. 4. Notes receivable”, Note “V. 5. Accountsreceivable”, Note “V. 7. Receivables financing” , Note “V. 9. Other receivables”, Note “V. 6. Contractassets”, Note “V. 14. Disbursement of loans and advances”, and Note “V. 17. Long-term receivables”.
(3) Liquidity risks
Liquidity risk refers to a risk of fund shortage generated when the enterprise performs the obligation tosettle accounts by cash payment or other financial assets.As indicated by changes in the Company’s financial instruments at the beginning and end of the period, theproportion of the Company's "Financial assets" to "Financial liabilities" at the end of the report period was
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1.52 (which was 1.39 at the beginning of the period), showing that the Company has adequate liquidity andthe risk in shortage of liquidity is low.
(4) Market risks
Market risk refers to a risk of fluctuation in the fair value or future cash flow of financial instrument due tochanges in the market price, including fair value fluctuation risk, exchange rate risk, and interest rate risk.
1) Fair value fluctuation risk
The Company's financial investments mainly involve products such as stocks, wealth management products,bonds, negotiable certificates of deposit, and forward settlement and sales. Except for the significantfluctuations in the fair value of stocks, the fair value of products such as wealth management products,bonds, negotiable certificates of deposit, and forward settlement and sales does not fluctuate significantly.The stocks held by the Company are mainly stocks traded on the open market, and the quality of theinvested companies is relatively good.As of the end of the report period, the Company's wealth management products, bonds, negotiablecertificates of deposit, and forward settlement and sales account for 11.55% of the total assets (thebeginning balance is 16.62%), which are measured at fair value. The Company's fair value risk exposurearising from the above financial assets is described in this Note “V. 2. Trading financial assets”, Note “V. 3.Derivative financial assets”, Note “V. 7. Receivables financing”, Note “V. 13. Other current assets”, Note“V. 16. Other debt investments”, and Note “5. 19. Other equity instrument investments”.
2) Exchange rate risk
Exchange rate risk refers to the risk of fluctuation in the fair value or future cash flow of financialinstruments due to changes in the foreign exchange rate.As of December 31, 2023, the amounts of foreign currency financial assets and liabilities held by theCompany converted into RMB are presented in details in this Note “V. 74. (1). Monetary items in foreigncurrencies”.The Company minimizes the exchange rate risk by carrying out the forward exchange transaction businessand controlling the scale of foreign currency assets and liabilities according to changes in the marketexchange rate.
3) Interest rate risks
Interest rate risk refers to the risk of fluctuation in the fair value or future cash flow of financial instrumentsdue to changes in the market interest rate.As of December 31, 2023, the Company's liabilities with interests are as follows:
| Statement Item | Amount | Interest Rate Range |
| Short-term borrowings | 26,443,476,388.52 | 1.10%-7.32% |
| Deposits from customers and interbank | 254,616,899.35 | 0.38%-3.65% |
| Other payables | 1,654,225,040.13 | 4.35%-5.00% |
| Non-current liabilities due within one year | 20,515,695,053.43 | 2.55%-5.30% |
| Long-term borrowings | 39,035,742,535.09 | 2.00%-5.80% |
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| Statement Item | Amount | Interest Rate Range |
| Long-term payables | 27,028,498.30 | 4.67%-6.20% |
| Total | 87,930,784,414.82 |
X. Fair value disclosureEnding fair value of assets and liabilities measured at fair value
| Item | Ending Fair Value | |||
| Measurement of level 1 of the fair value hierarchy | Measurement of level 2 of the fair value hierarchy | Measurement of level 3 of the fair value hierarchy | Total | |
| Continuous fair value measurement | ||||
| Trading financial assets | 4,210,873,172.60 | 5,347,467,140.40 | 56,083,090.40 | 9,614,423,403.40 |
| Derivative financial assets | 108,919,513.22 | 108,919,513.22 | ||
| Receivables financing | 10,176,089,668.41 | 10,176,089,668.41 | ||
| Non-current assets due within one year | 82,482,033.30 | 2,275,251,779.59 | 2,357,733,812.89 | |
| Other current financial assets | 8,582,825.00 | 8,582,825.00 | ||
| Other debt investments | 1,168,246,004.63 | 15,195,595,661.33 | 16,363,841,665.96 | |
| Other equity instrument investments | 3,857,865,509.37 | 7,000,000.00 | 3,864,865,509.37 | |
| The total of assets measured at fair value continuously | 9,328,049,544.90 | 33,103,323,762.95 | 63,083,090.40 | 42,494,456,398.25 |
| Derivative financial liabilities | 4,079,919.91 | 4,079,919.91 | ||
| Total of liabilities measured at fair value continuously | 4,079,919.91 | 4,079,919.91 | ||
The basis for determining market prices of items measured within the level 1 of the fair valuehierarchy continuously and not continuouslyTrading financial assets, other current assets, other debt investment ? bonds, other equity instrumentinvestments, and other non-current financial assets held by the Company and measured within level 1 offair value hierarchy are determined based on the quotation of corresponding products and investmentprojects on the open market.Qualitative and quantitative information on valuation techniques and important parameters foritems measured within level 2 of the fair value hierarchy continuously and not continuouslyAssets held by the Company measured within level 2 of the fair value hierarchy are determined using themarket approach and income approach;Receivables financing held by the Company measured within level 2 of fair value hierarchy are the bankacceptance bills and accounts receivable held by the Company, and their corresponding transfer anddiscounted amounts are used as the basis for determining their market prices.Trading financial assets and derivative financial liabilities held by the Company measured within level 2 offair value hierarchy are mainly forward hedging instruments and asset management plans, and the
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determination of the fair value is based on the fair value confirmation letter issued by the trading institutionat the end of the period;Non-current assets and other debt investments held by the Company measured within level 2 of fair valuehierarchy within one year are mainly negotiable certificates of deposit, and the fair value is determinedbased on the prices of the same or similar assets in the inactive market.Qualitative and quantitative information on valuation techniques and important parameters foritems measured within level 3 of the fair value hierarchy continuously and not continuouslyTrading financial assets and non-trading equity instrument investments designated to be measured at fairvalue with their changes included in other comprehensive income held by the Company and measuredwithin level 3 of the fair value hierarchy are mainly items that have no observable data validation in theactive market and use their data to make financial predictions.For continuous fair value measurement items, in case of conversion among different levels during thecurrent period, the reasons for conversion and the policy for determining the timing for conversionNone.Changes in valuation techniques and reasons for changes occurred during the current periodNone.Fair values of financial assets and liabilities not measured at fair valueNone.XI. Affiliated parties and affiliated transactionInformation on the Company's parent companyThe Company has no controlling shareholders or substantial controllers.Information on the Company's subsidiariesFor details, see Note “VII. 1. Equity in subsidiaries”.Joint ventures and associates of the Company
(1) For details of other joint ventures or associates that have affiliated party transactions with theCompany in the current period, or have affiliated party transactions with the Company in the previousperiod to form a balance, please refer to this Note “V. 18. Long-term equity investments” and Note “VII. 3.
(6) Excess losses incurred by joint ventures or associates”.
Other affiliated parties
| Name of other affiliates | Relationship Between Other Related Parties and the Company |
| Wuhu Green Renewable Resources Recycling Co., Ltd. | Company that have a significant impact on it by the Company. |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Company in which the Company holds over 5.00% of its shares |
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| Name of other affiliates | Relationship Between Other Related Parties and the Company |
| Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | Companies where directors of the Company act as executive directors and general managers |
| Henan Shengshi Xinxing Gree Trade Co., Ltd. | Companies where directors of the Company act as executive directors |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Companies held by directors of the Company or where a director of the Company acts as chair of the board |
| Henan Gree Installation Engineering Co., Ltd. | Companies where directors of the Company act as executive directors |
| Shandong Jierui Logistics Co., Ltd. | Company held by the Company's supervisor |
| ETR Law Firm | Company where the Company's independent directors serve as its partner chair |
| Shandong Red April Holding Group Co., Ltd. and its holding companies | Company held by the Company's supervisor |
| Henan Huizhong Yifeng E-commerce Co., Ltd. | Company where the son of the Company's director acts as executive directors |
| Hunan Green Renewable Resources Recycling Co., Ltd. | Company that have a significant impact on it by the Company. |
| Chang'an Bank Co., Ltd. | Company where the Director and Vice President of the Company serve as a Director |
Affiliated transaction
(1) Affiliated transactions of purchase and sale of commodities, provision and receiving labor services
1) Purchase of commodities/receiving labor services
| Affiliated parties | Type of Affiliated Transaction | Content of Affiliated Transactions | Amount for the current period | Amount incurred for the previous period |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Material procurement | Raw materials | 1,347,112,001.68 | 1,823,440,035.04 |
| Beijing Gree Technology Co., Ltd. | Material procurement | Accessories | 16,652,917.66 | 39,096,011.43 |
| Sichuan Jinshi Leasing Co., Ltd. and its holding companies | Service procurement | Interest expenses and consulting services | 14,709,472.85 | 28,480,495.00 |
| Henan Yuze Finance Leasing Co., Ltd. | Service procurement | Interest expense | 3,549,617.92 | 5,633,699.15 |
| Henan Shengshi Xinxing Gree Trade Co., Ltd. | Material procurement | Raw materials | 488,645.15 | |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Accept money deposits | Interest expense | 62.23 | 83.91 |
| Henan Shengshi Xinxing Gree Trade Co., Ltd. | Accept money deposits | Interest expense | 45.18 | 57.58 |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Fixed asset procurement | Equipment procurement | 531,000.00 | |
| Lanzhou Guangtong New Energy Automobile Co., Ltd. | Material procurement | Raw materials | 530,973.42 | |
| Hunan Green Renewable Resources Recycling Co., Ltd. | Material procurement | Raw materials | 15,284.03 | |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Service procurement | Transport service | 711,075.42 | |
| DunAn (Tianjin) Energy Saving System Co., Ltd. and its holding companies | Service procurement | Design services | 18,867.92 | |
| Total | 1,382,512,762.67 | 1,898,457,582.90 |
2) Schedule of commodities sold/services provided
| Affiliated parties | Type of Affiliated Transaction | Content of Affiliated Transactions | Amount for the current period | Amount incurred for the previous period |
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| Affiliated parties | Type of Affiliated Transaction | Content of Affiliated Transactions | Amount for the current period | Amount incurred for the previous period |
| Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | Sale of goods | Sales revenue | 5,885,129,357.41 | 5,731,889,146.80 |
| Henan Shengshi Xinxing Gree Trade Co., Ltd. | Sale of goods | Sales revenue | 4,673,380,959.10 | 4,142,114,712.28 |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Sale of goods | Sales revenue | 1,025,827,011.12 | 886,224,374.20 |
| Henan Huizhong Yifeng E-commerce Co., Ltd. | Sale of goods | Sales revenue | 22,940,080.25 | 101,355,077.81 |
| Lanzhou Guangtong New Energy Automobile Co., Ltd. | Sale of goods | Sales revenue | 1,747,290.45 | 569,555.04 |
| Beijing Gree Technology Co., Ltd. | Loan | Interest income | 647,429.80 | 939,755.42 |
| Beijing Gree Technology Co., Ltd. | Sale of goods | Sales revenue | 115,919.47 | 417,472.01 |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Sale of goods | Sales revenue | 74,808.34 | |
| Eocell Limited | Sale of goods | Sales revenue | 35,657.27 | 27,570.07 |
| ETR Law Firm | Sale of goods | Sales revenue | 2,779.94 | 10,250.01 |
| Chang'an Bank Co., Ltd. | Sale of goods | Sales revenue | 211.50 | |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Loan | Interest income | 11,901.29 | |
| Hunan Green Renewable Resources Recycling Co., Ltd. | Sale of goods | Sales revenue | 2,160.00 | |
| Henan Yuze Finance Leasing Co., Ltd. | Sale of goods | Sales revenue | 3,074.34 | |
| Henan Shengshi Xinxing Gree Trade Co., Ltd. | Loan | Commission income | 4.91 | |
| Total | 11,609,901,504.65 | 10,863,565,054.18 |
(2) Associated trusteeship management/contracting or entrusted management/contract awardingNone.
(3) Associated lease
1) The Company as the Lessor:
None.
2) The Company as the Leasee:
None.
(4) Associated guarantee
None.
(5) Fund lending among affiliated parties
None.
(6) Asset transfer and debt restructuring of affiliated parties
None.
(7) Remunerations for key management personnel
| Item | Amount for the current period | Amount incurred for the previous period |
| Remunerations for key management personnel | 34,081,922.40 | 31,583,041.09 |
(8) Other affiliated transactions
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None.Receivables and payables of affiliated parties
(1) Receivables
| Item | Affiliated parties | Ending Balance | Beginning balance | ||
| Book balance | Bad debt reserves | Book balance | Bad debt reserves | ||
| Accounts receivable | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 246,543,051.23 | 12,327,152.54 | 287,911,901.16 | 14,395,595.07 |
| Accounts receivable | Lanzhou Guangtong New Energy Automobile Co., Ltd. | 168,267,904.76 | 138,251,251.48 | 180,395,669.13 | 94,149,507.45 |
| Accounts receivable | Wuhu Green Renewable Resources Recycling Co., Ltd. | 2,263,529.62 | 1,131,764.81 | 6,053,077.41 | 3,026,538.71 |
| Receivables financing | Henan Shengshi Xinxing Gree Trade Co., Ltd. | 435,297,317.29 | 1,336,259,825.18 | ||
| Receivables financing | Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | 189,472,820.55 | 748,666,894.28 | ||
| Receivables financing | Shandong Jierui Logistics Co., Ltd. | 176,233,586.82 | 312,596,763.66 | ||
| Receivables financing | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 124,206,884.12 | 221,903,936.78 | ||
| Receivables financing | Henan Gree Installation Engineering Co., Ltd. | 9,972,475.49 | |||
| Receivables financing | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 5,634,448.65 | 54,569,724.30 | ||
| Receivables financing | Shandong Red April Holding Group Co., Ltd. and its holding companies | 189,907,561.46 | |||
| Notes receivable | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 16,000,000.00 | 800,000.00 | ||
| Advance payments | Sichuan Jinshi Leasing Co., Ltd. and its holding companies | 6,082,225.00 | 12,164,450.00 | ||
| Advance payments | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 5,641,887.98 | 2,349,194.19 | ||
| Advance payments | Beijing Gree Technology Co., Ltd. | 21,117.45 | |||
| Other receivables | DunAn (Tianjin) Energy Saving System Co., Ltd. and its holding companies | 172,325,809.58 | 129,244,357.19 | 172,380,562.38 | 86,190,281.19 |
| Other receivables | Sichuan Jinshi Leasing Co., Ltd. and its holding companies | 19,519,366.99 | 4,879,841.75 | 20,000,000.00 | 3,000,000.00 |
| Other receivables | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 343,266.03 | 19,413.30 | 5,000.00 | 350.00 |
| Other non-current assets | Sichuan Jinshi Leasing Co., Ltd. and its holding companies | 18,500,000.00 | 4,625,000.00 | 18,500,000.00 | 2,775,000.00 |
| Contract assets | Lanzhou Guangtong New Energy Automobile Co., Ltd. | 4,866,569.63 | 1,946,627.85 | ||
| Total | 1,596,304,574.11 | 291,278,781.07 | 3,568,552,247.01 | 205,483,900.27 | |
(2) Payables
| Item | Affiliated parties | Ending Balance | Beginning balance |
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| Item | Affiliated parties | Ending Balance | Beginning balance |
| Accept money deposits | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 16,192.56 | 16,124.33 |
| Accept money deposits | Henan Shengshi Xinxing Gree Trade Co., Ltd. | 12,068.59 | 11,323.41 |
| Accounts payable | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 425,094,848.95 | 184,621,746.92 |
| Accounts payable | Beijing Gree Technology Co., Ltd. | 12,029,563.76 | 8,942,070.53 |
| Accounts payable | Hunan Green Renewable Resources Recycling Co., Ltd. | 2,437,065.09 | 2,437,065.09 |
| Accounts payable | Henan Shengshi Xinxing Gree Trade Co., Ltd. | 249,988.68 | 249,988.68 |
| Accounts payable | DunAn (Tianjin) Energy Saving System Co., Ltd. and its holding companies | 4,716.98 | |
| Accounts payable | Lanzhou Guangtong New Energy Automobile Co., Ltd. | 17,001,014.00 | |
| Accounts payable | Wuhu Green Renewable Resources Recycling Co., Ltd. | 3,789,547.79 | |
| Other payables | Henan Huizhong Yifeng E-commerce Co., Ltd. | 100,000.00 | |
| Other payables | Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | 21,617.37 | 21,617.37 |
| Other payables | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 14,200.00 | 12,200.00 |
| Other payables | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 204.24 | 204.24 |
| Other payables | Shandong Jierui Logistics Co., Ltd. | 0.26 | 0.26 |
| Other payables | Henan Yuze Finance Leasing Co., Ltd. | 20,065,000.00 | |
| Contract liabilities | Henan Shengshi Xinxing Gree Trade Co., Ltd. | 566,925,018.21 | 589,585,262.00 |
| Contract liabilities | Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | 277,427,020.12 | 368,281,472.85 |
| Contract liabilities | Henan Huizhong Yifeng E-commerce Co., Ltd. | 4,027,582.80 | 5,780,268.45 |
| Contract liabilities | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 1,071,224.64 | 416,534.37 |
| Contract liabilities | Eocell Limited | 42,382.22 | |
| Other current liabilities ? value-added tax | Henan Shengshi Xinxing Gree Trade Co., Ltd. | 73,700,252.37 | 76,646,084.07 |
| Other current liabilities ? value-added tax | Zhejiang Shengshi Xinxing Gree Trade Co., Ltd. | 36,065,512.62 | 47,876,591.48 |
| Other current liabilities ? value-added tax | Henan Huizhong Yifeng E-commerce Co., Ltd. | 523,585.76 | 751,496.78 |
| Other current liabilities ? value-added tax | Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | 139,259.20 | 54,149.47 |
| Long-term payables | Henan Yuze Finance Leasing Co., Ltd. | 18,027,707.93 | 16,053,322.20 |
| Long-term payables | Sichuan Jinshi Leasing Co., Ltd. and its holding companies | 7,515,470.87 | 83,990,713.19 |
| Non-current liabilities due within one year | Sichuan Jinshi Leasing Co., Ltd. and its holding companies | 75,632,127.95 | 129,789,372.21 |
| Non-current liabilities due within one year | Henan Yuze Finance Leasing Co., Ltd. | 25,690,210.83 | 34,595,617.06 |
| Total | 1,526,767,822.00 | 1,590,988,786.75 |
Commitment of affiliated partiesNone.XII. Share-based payment
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The overall situation of share-based payment
| Item | Content |
| Total amount of equity instruments granted this year | On February 3, 2023, the Company's special securities account for repurchase transferred 77,163,880 shares to the special account of "Gree Electric Appliances, Inc. of Zhuhai ? employee stock ownership plan phase II" through non-trading transfer. The total amount of equity instruments is RMB1,569,513,319.20. |
| Total amount of equity instruments exercised this year | According to the Gree Electric Appliances, Inc. of Zhuhai Employee Stock Ownership Plan Phase I (Draft) (Revised Draft), the Audit Report of ZHS ZI (2023) No. 0500065 issued by Union Power Certified Public Accountants (Special General Partnership), and the Company's relevant equity distribution, the company-level performance evaluation indicators of the Company's employee stock ownership plan phase I have been achieved, and the two phases of attributable stock rights can be vested and distributed. The total amount of equity instruments in the employee stock ownership plan phase I is RMB555,550,331.27. |
| Total amount of various equity instruments that have expired this year | None |
| The exercise price range and remaining contract term of shares issued to the public at the end of the period | RMB14.36/share; half a year. |
No shares issued to the public or other equity instruments at the end of the period.Equity settled share-based payments
| Item | Content |
| Method for determining the fair value of equity instruments on the grant date | The Company determines the fair value of the employee stock ownership plan by deducting the grant price from the market price on the grant date. |
| The basis for determining the number of exercisable equity instruments | By assessing the company's performance and individual performance per year, the Company takes the number of equity instruments held by incentive targets achieving the assessment goals as the basis. On each balance sheet date during the vesting period, the Company makes the best estimate of subsequent information such as the latest change in number of vesting employees to correct the estimated number of vested equity instruments. On the vesting date, the final estimated number of exercisable equity instruments is consistent with their actual number. |
| Reasons for significant differences between estimates in the current year and the previous period | None |
| Accumulated amount of equity settled share-based payments recognized in capital reserves | 1,257,651,176.82 |
| Total expenses recognized for equity settled share-based payments this period | 1,413,200,011.24 |
Cash settled share-based paymentsNone.Amendment and termination of share-based paymentNone.XIII. Commitments and contingenciesImportant commitments
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None.Contingencies
(1) In accordance with the Equity Transfer Agreement entered into between Zhejiang DunAn EnergySaving Technology Co., Ltd. (hereinafter referred to as "Zhejiang Energy Saving"), a holding subsidiary ofthe Company, and Shuifa Energy Group Co., Ltd. (hereinafter referred to as "Shuifa Energy") onNovember 21, 2019, the transfer of other debts or payment obligations (hereinafter referred to as"contingent liabilities") of the target company DunAn (Tianjin) Energy Saving System Co., Ltd.(hereinafter referred to as "Tianjin Energy Saving") before the audit base date (May 31, 2019), includingbut not limited to contingent debts, and debts or liabilities arising after the base date due to the fault ofZhejiang Energy Saving before the base date, shall be borne by Zhejiang Energy Saving. If the above debtsare borne by Tianjin Energy Saving in advance or Tianjin Energy Saving is punished as a result, TianjinEnergy Saving has the right to recover from Zhejiang Energy Saving. If Shuifa Energy has money payableto Zhejiang Energy Saving, Zhejiang Energy Saving agrees that Shuifa Energy will directly deduct thecompensation to Tianjin Energy Saving. Tianjin Energy Saving has the right to continue to recover fromthe Company for the insufficient part. The aforementioned responsibilities of Zhejiang Energy Saving canbe directly deducted from the equity transaction price payable by Shuifa Energy or the dividends ofZhejiang Energy Saving in Tianjin Energy Saving, and the shortfall will be compensated by ZhejiangEnergy Saving.
(2) The Company provides guarantees for mortgage loans for homebuyers in accordance with industrypractices, mainly in the form of phased guarantees. The guarantee period starts from the effective date ofthe guarantee contract and ends on the date when the real estate certificate and mortgage registrationprocedures for the products purchased by the customer are completed and delivered to the bank formanagement. As of December 31, 2023, the outstanding guarantee amount is RMB2,058.292 million.OthersNone.XIV. Matters after the balance sheet dateImportant non-adjustment mattersNone.Distribution of profitsUnder the resolution at the 18th meeting of the 12th session of the Board of Directors, the Company's profitdistribution plan for 2023 is as follows: Since the total shares entitled to profit distribution as of April 29,2024, totaling 5,521,943,646 shares (share capital of 5,631,405,741 shares less 109,462,095 shares held inthe Company's repo account), is proposed as the base temporarily, the Company plans to distribute a cashdividend of RMB23.80 (tax inclusive) per 10 shares to all shareholders, totaling RMB13,142,225,877.48.This distribution plan still requires approval of the General Meeting of Shareholders.
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Sales returnNo important sales return occurred after the balance sheet date.Divided as held for sale after the balance sheet dateNone.Other important non-adjustment matters after the balance sheet dateNone.XV. Other important mattersCorrection of accounting errors in the previous periodNone.Important debt restructuringNone.Asset replacement
(1) Exchange of non-monetary assets
None.
(2) Replacement of other assets
None.Annuity planNone.Discontinued operation
| Item | Revenue | Expense | Total profits | Income tax expenses | Net Profits | Profit from discontinued operation attributable to owners of parent company |
| Gree (USA) Sales Co., Ltd. | 189,082.78 | -189,082.78 | 5,638.96 | -194,721.74 | -194,721.74 |
(Continued)
| Item | Net cash flows from operating activities | Net cash flows from investment activities | Net cash flows from financing activities |
| Gree (USA) Sales Co., Ltd. | -3,635,051.24 |
Other important matters affecting investor decisions
(1) Company guarantee
As of December 31, 2023, the total amount of Gree Altairnano guarantees is RMB2,994,536,614.53, ofwhich the total amount of guarantees provided by Gree Altairnano subsidiaries for short-term loans, long-term loans, accounts payable (E Xintong), and long-term payables is RMB1,010,834,713.96; the total
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amount of guarantees provided to companies outside the consolidated statements is RMB1,983,701,900.57(the stock guarantee provided by Gree Altairnano for the financial leasing and car purchase business of itsbus company and other customers).
(2) Financial support
1) Gree Altairnano provided financial loans of RMB94,200, RMB681,400, RMB23,019,800, andRMB17,200 respectively to its original shareholder and its affiliated parties Wei Yincang, Sun Guohua,Zhuhai Yinlong Investment Holding Group Co., Ltd. As of the date of this Annual Report, the aforesaidloans have not been recovered.
2) On November 21, 2019, Zhejiang Energy Saving signed an equity transfer agreement with ShuifaEnergy. Zhejiang Energy Saving agreed to transfer its 65% equity and related rights of creditor of TianjinEnergy Saving (and its subsidiaries and branches) to Shuifa Energy (hereinafter referred to as "TianjinEnergy Saving Equity Transfer"), with an equity transfer price of RMB390 million, a payment for rights ofcreditor transfer of RMB390 million, totaling RMB780 million; after the completion of the Tianjin EnergySaving Equity Transfer, the shareholding ratio of Zhejiang Energy Saving in Tianjin Energy Savingdecreased from 100% to 35%, and Tianjin Energy Saving became a joint stock company of the Company.Zhejiang Energy Saving's credit of RMB600 million to Tianjin Energy Saving thereby formed passivefinancial support. Before Shuifa Energy paid for the rights of creditor transfer, Zhejiang Energy Saving hada credit of RMB600 million to Tianjin Energy Saving, forming financial support of RMB600 million; AfterShuifa Energy paid RMB390 million for the rights of creditor transfer under the Equity Transfer Agreement,Zhejiang Energy Saving had a remaining credit of RMB210 million to Tianjin Energy Saving, formingfinancial support of RMB210 million.XVI. Notes to main items of financial statements of the parent companyAccounts receivable
(1) Accounts receivable disclosed by account age
| Account age | Ending Balance | Beginning balance |
| Within 1 year | 5,093,333,514.94 | 2,801,488,718.60 |
| 1?2 years | 99,365,598.67 | 122,421,456.35 |
| 2?3 years | 72,800,967.64 | 19,975,735.77 |
| Over 3 years | 29,800,846.44 | 20,339,910.40 |
| Subtotal | 5,295,300,927.69 | 2,964,225,821.12 |
| Less: Bad debt reserves | 289,922,749.83 | 152,602,498.35 |
| Total | 5,005,378,177.86 | 2,811,623,322.77 |
(2) Bad debt accrual method by categories
| Category | Ending Balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
Page 298 of 310
| Category | Ending Balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt reserves accrued by individual item | 4,715,115.32 | 0.09 | 4,715,115.32 | 100.00 | |
| Accounts receivable with bad debt reserves accrued by portfolios | 5,290,585,812.37 | 99.91 | 285,207,634.51 | 5.39 | 5,005,378,177.86 |
| Including: Account age portfolio | 4,274,218,293.99 | 80.72 | 285,207,634.51 | 6.67 | 3,989,010,659.48 |
| Free-risk portfolios | 1,016,367,518.38 | 19.19 | 1,016,367,518.38 | ||
| Total | 5,295,300,927.69 | 100.00 | 289,922,749.83 | 5.48 | 5,005,378,177.86 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt reserves accrued by individual item | 4,715,115.32 | 0.16 | 4,715,115.32 | 100.00 | |
| Accounts receivable with bad debt reserves accrued by portfolios | 2,959,510,705.80 | 99.84 | 147,887,383.03 | 5.00 | 2,811,623,322.77 |
| Including: Account age portfolio | 2,113,830,562.80 | 71.31 | 147,887,383.03 | 7.00 | 1,965,943,179.77 |
| Free-risk portfolios | 845,680,143.00 | 28.53 | 845,680,143.00 | ||
| Total | 2,964,225,821.12 | 100.00 | 152,602,498.35 | 5.15 | 2,811,623,322.77 |
1) Accounts receivable with bad debt reserves accrued by individual items:
| Company Name | Ending Balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| Unit 1 | 4,715,115.32 | 4,715,115.32 | 100.00 | It is expected to be difficult to be recovered |
| Total | 4,715,115.32 | 4,715,115.32 | 100.00 | |
(Continued)
| Company Name | Beginning balance | |||
| Book balance | Bad debt reserves | Credit loss rate (%) | Reason for accruing | |
| Unit 1 | 4,715,115.32 | 4,715,115.32 | 100.00 | It is expected to be difficult to be recovered |
| Total | 4,715,115.32 | 4,715,115.32 | 100.00 | |
2) In the portfolio, accounts receivable with bad debt reserves accrued by account age portfolio:
| Account age | Book balance | Bad debt reserves | Credit loss rate (%) |
| Within 1 year | 4,076,965,996.56 | 203,848,299.84 | 5.00 |
Page 299 of 310
| Account age | Book balance | Bad debt reserves | Credit loss rate (%) |
| 1?2 years | 99,365,598.67 | 19,873,119.73 | 20.00 |
| 2?3 years | 72,800,967.64 | 36,400,483.82 | 50.00 |
| Over 3 years | 25,085,731.12 | 25,085,731.12 | 100.00 |
| Total | 4,274,218,293.99 | 285,207,634.51 | 6.67 |
(3) Bad debt reserves accrued, recovered or reversed in the current period
| Category | Beginning balance | Accrual/recovery/transferring back in the current period | Ending Balance |
| Accrual by individual item | 4,715,115.32 | 4,715,115.32 | |
| Account age portfolio | 147,887,383.03 | 137,320,251.48 | 285,207,634.51 |
| Total | 152,602,498.35 | 137,320,251.48 | 289,922,749.83 |
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Accounts receivable actually written off in the current period
None.
(5) Accounts receivable of the top 5 debtors in terms of ending balance collected by debtorsThe total amount of accounts receivable and contract assets of the top 5 debtors in terms of ending balancecollected by debtors is RMB2,721,408,204.31, accounting for 51.39% of the ending balance of accountsreceivable and contract assets, and the amount of bad debt provision is RMB90,515,487.65.Other receivables
| Item | Ending Balance | Beginning balance |
| Other receivables [Note 1] | 4,860,219,830.31 | 3,602,220,649.55 |
| Total | 4,860,219,830.31 | 3,602,220,649.55 |
[Note 1] Other receivables in the table above refer to other receivables after deduction of interestreceivables and dividends receivable;[Note 2] The Company has no beginning and ending balance of interests receivable and dividendsreceivable.
(6) Other receivables
1) Disclosure by account age
| Account age | Ending Balance | Beginning balance |
| Within 1 year | 4,863,865,345.66 | 3,593,232,529.73 |
| 1?2 years | 6,358,344.91 | 8,697,524.27 |
| 2?3 years | 1,650,917.24 | 8,176,823.31 |
| Over 3 years | 4,910,948.86 | 1,389,811.30 |
| Subtotal | 4,876,785,556.67 | 3,611,496,688.61 |
| Less: Bad debt reserves | 16,565,726.36 | 9,276,039.06 |
Page 300 of 310
| Account age | Ending Balance | Beginning balance |
| Total | 4,860,219,830.31 | 3,602,220,649.55 |
2) Classification by nature of payment
| Nature of payment | Ending book balance | Beginning book balance |
| Intercourse and free-risk funds | 4,739,303,404.07 | 3,611,496,688.61 |
| Asset transfer payments | 137,482,152.60 | |
| Subtotal | 4,876,785,556.67 | 3,611,496,688.61 |
| Less: Bad debt reserves | 16,565,726.36 | 9,276,039.06 |
| Total | 4,860,219,830.31 | 3,602,220,649.55 |
3) Disclosure by classification of bad debt reserves accrual methods
| Category | Ending Balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Other accounts receivable with bad debt reserves accrued by individual item | |||||
| Other accounts receivable with bad debt reserves accrued by portfolios | 4,876,785,556.67 | 100.00 | 16,565,726.36 | 0.34 | 4,860,219,830.31 |
| Including: Account age portfolio | 204,073,208.93 | 4.18 | 16,565,726.36 | 8.12 | 187,507,482.57 |
| Free-risk portfolios | 4,672,712,347.74 | 95.82 | 4,672,712,347.74 | ||
| Total | 4,876,785,556.67 | 100.00 | 16,565,726.36 | 0.34 | 4,860,219,830.31 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt reserves | Book Value | |||
| Amount | Proportion (%) | Amount | Credit loss rate (%) | ||
| Other accounts receivable with bad debt reserves accrued by individual item | |||||
| Other accounts receivable with bad debt reserves accrued by portfolios | 3,611,496,688.61 | 100.00 | 9,276,039.06 | 0.26 | 3,602,220,649.55 |
| Including: Account age portfolio | 59,430,383.80 | 1.65 | 9,276,039.06 | 15.61 | 50,154,344.74 |
| Free-risk portfolios | 3,552,066,304.81 | 98.35 | 3,552,066,304.81 | ||
| Total | 3,611,496,688.61 | 100.00 | 9,276,039.06 | 0.26 | 3,602,220,649.55 |
In the portfolio, accounts receivable with bad debt reserves accrued by account age portfolio:
| Account age | Ending Balance | ||
| Book balance | Bad debt reserves | Credit loss rate (%) | |
| Within 1 year | 191,152,997.92 | 9,557,649.90 | 5.00 |
| 1?2 years | 6,358,344.91 | 1,271,668.98 | 20.00 |
Page 301 of 310
| Account age | Ending Balance | ||
| Book balance | Bad debt reserves | Credit loss rate (%) | |
| 2?3 years | 1,650,917.24 | 825,458.62 | 50.00 |
| Over 3 years | 4,910,948.86 | 4,910,948.86 | 100.00 |
| Total | 204,073,208.93 | 16,565,726.36 | 8.12 |
4) Accrual of bad debt reserves
| Bad debt reserves | Phase I | Phase II | Phase III | Total |
| Expected credit losses in the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Beginning balance | 2,058,311.25 | 7,217,727.81 | 9,276,039.06 | |
| Accrual in the current period | 7,499,338.65 | 7,499,338.65 | ||
| Transferring back in the current period | 209,651.35 | 209,651.35 | ||
| Ending Balance | 9,557,649.90 | 7,008,076.46 | 16,565,726.36 |
5) Other receivables that were actually written off in the current period
None.
6) Other receivables of top 5 debtors in terms of ending balance collected by debtorsThe total amount of other receivables of top 5 debtors in terms of ending balance collected by debtors isRMB4,751,126,676.83, accounting for 97.42% of the total balance of ending balance of other receivables,and the amount of bad debt provision is RMB6,874,107.63.
7) Other receivables due to centralized fund management
None.
Page 302 of 310
Long-term equity investments
| Item | Ending Balance | Beginning balance | ||||
| Book balance | Impairment provision | Book Value | Book balance | Impairment provision | Book Value | |
| Investments to subsidiaries | 26,797,640,354.59 | 26,797,640,354.59 | 25,037,260,734.86 | 25,037,260,734.86 | ||
| Investments to associates and joint ventures | 2,949,788,729.34 | 1,940,009.35 | 2,947,848,719.99 | 4,257,128,029.39 | 1,940,009.35 | 4,255,188,020.04 |
| Total | 29,747,429,083.93 | 1,940,009.35 | 29,745,489,074.58 | 29,294,388,764.25 | 1,940,009.35 | 29,292,448,754.90 |
(1) Investments to subsidiaries
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Accrual of impairment reserves | Others | Original value | Impairment provision | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 226,229,869.60 | 5,334,458.48 | 231,564,328.08 | |||||
| Zhuhai Landa Compressor Co., Ltd. | 980,129,791.43 | 14,845,009.28 | 994,974,800.71 | |||||
| Zhuhai Gree Electric Enterprises Ltd. | 1,688,925,419.46 | 2,224,720.67 | 1,691,150,140.13 | |||||
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | 157,587,082.83 | 1,656,340.92 | 159,243,423.75 | |||||
| Zhuhai Kaibang Motor Manufacturing Co., Ltd. | 88,488,390.23 | 4,535,602.87 | 93,023,993.10 | |||||
| Gree (Hefei) Electric Appliances Co., Ltd. | 508,118,662.16 | 3,378,930.69 | 511,497,592.85 | |||||
| Gree (Zhongshan) Small Home Appliances Co., Ltd. | 32,886,680.43 | 369,944.73 | 33,256,625.16 | |||||
| Zhuhai Gree Group Finance Company Limited | 4,405,435,403.58 | 34,675,548.68 | 536,699.68 | 4,440,647,651.94 | ||||
| Gree Electric Appliances (Brazil) Co., Ltd. | 660,779,779.97 | 949,253.68 | 661,729,033.65 | |||||
| Hong Kong Gree Electric Appliances Sales Limited | 472,879.08 | 472,879.08 | ||||||
| Shanghai Gree Air Conditioners Sales Co., Ltd. | 1,800,000.00 | 1,800,000.00 | ||||||
Page 303 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Accrual of impairment reserves | Others | Original value | Impairment provision | |
| Zhuhai Gree Daikin Precision Mold Co., Ltd. | 202,027,721.67 | 1,049,462.52 | 203,077,184.19 | |||||
| Zhuhai Gree Dakin Device Co., Ltd. | 283,117,574.47 | 489,431.25 | 283,607,005.72 | |||||
| Green Refrigeration Equipment Engineering Research Center of Zhuhai Gree Group Co., Ltd. | 676,040,000.00 | 676,040,000.00 | ||||||
| Gree (Zhengzhou) Electric Appliances Co., Ltd. | 722,900,444.95 | 4,496,297.49 | 727,396,742.44 | |||||
| Gree (Wuhan) Electric Appliances Co., Ltd. | 602,507,444.72 | 3,450,613.97 | 605,958,058.69 | |||||
| Zhengzhou Gree Green Renewable Resources Co., Ltd. | 5,008,960.53 | 45,000,000.00 | 3,968.84 | 50,012,929.37 | ||||
| Hunan Green Renewable Resources Co., Ltd. | 5,089,645.23 | 45,000,000.00 | 32,628.75 | 50,122,273.98 | ||||
| Wuhu Green Renewable Resources Co., Ltd. | 2,083,410.43 | 48,000,000.00 | 213,637.59 | 50,297,048.02 | ||||
| Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | 11,393,405.86 | 988,945.61 | 12,382,351.47 | |||||
| Gree (Wuhu) Electric Appliances Co., Ltd. | 22,956,278.38 | 1,999,023.88 | 24,955,302.26 | |||||
| Shijiazhuang Green Renewable Resources Co., Ltd. | 5,008,960.53 | 45,000,000.00 | 3,968.84 | 50,012,929.37 | ||||
| Gree (Shijiazhuang) Electric Appliances Co., Ltd. | 102,277,724.26 | 4,728,594.45 | 107,006,318.71 | |||||
| Tianjin Green Renewable Resources Utilization Co., Ltd. | 5,000,000.00 | 45,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Gree HVAC and Refrigeration Equipment Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||||||
| Zhuhai Gree TOSOT Home Appliances Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||||
| Zhuhai Ligao Precision Manufacturing Co., Ltd. | 30,365,623.06 | 30,365,623.06 | ||||||
| Zhuhai EWPE Information Technology Inc. | 100,000,000.00 | 100,000,000.00 | ||||||
| Gree (Changsha) HVAC Equipment Co., Ltd. | 52,571,759.08 | 3,535,799.68 | 56,107,558.76 | |||||
Page 304 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Accrual of impairment reserves | Others | Original value | Impairment provision | |
| Gree TOSOT (Suqian) Home Appliances Co., Ltd. | 141,167,674.13 | 884,952.12 | 142,052,626.25 | |||||
| Wuhu Gree Precision Manufacturing Co., Ltd. | 30,471,646.63 | 630,988.89 | 31,102,635.52 | |||||
| Zhuhai Gree Intelligent Equipment Co., Ltd. | 105,056,894.40 | 5,894,478.90 | 110,951,373.30 | |||||
| Zhuhai Hengqin Gree Commercial Factoring Co., Ltd. | 100,000,000.00 | 375,230.63 | 100,375,230.63 | |||||
| Zhuhai Gree Precision Mold Co., Ltd. | 109,346,308.91 | 15,129,558.73 | 124,475,867.64 | |||||
| Gree HVAC and Refrigeration Equipment (Wuhan) Co., Ltd. | 100,000,000.00 | 410,577.46 | 100,410,577.46 | |||||
| Zhuhai Gree Intelligent Equipment Technology Institute Co., Ltd. | 50,026,881.58 | 591,066.84 | 50,617,948.42 | |||||
| Gree New Material Co., Ltd. | 30,773,083.23 | 2,488,168.72 | 33,261,251.95 | |||||
| Gree Precision Mould (Wuhan) Co., Ltd. | 100,570,444.23 | 1,143,147.20 | 101,713,591.43 | |||||
| Zhuhai Gree Energy Environment Technology Co., Ltd. | 202,771,064.85 | 1,069,037.59 | 203,840,102.44 | |||||
| Gree (Hangzhou) Electric Appliances Co., Ltd. | 550,772,403.79 | 494,235.62 | 551,266,639.41 | |||||
| Gree Information Technology Co., Ltd. of Zhuhai | 510,000.00 | 510,000.00 | ||||||
| Gree (Wu'an) Precision Equipment Manufacturing Co., Ltd. | 210,319,941.16 | 268,496.80 | 210,588,437.96 | |||||
| Zhuhai Gree Transportation Co., Ltd. | 50,553,930.01 | 954,014.93 | 51,507,944.94 | |||||
| Gree (Nanjing) Electric Appliances Co., Ltd. | 700,681,927.25 | 890,716.00 | 701,572,643.25 | |||||
| Gree (Luoyang) Electric Appliances Co., Ltd.. | 51,017,511.37 | 892,725.86 | 51,910,237.23 | |||||
| Zhuhai Edgeless Integrated Circuit Co., Ltd. | 50,000,000.00 | 50,000,000.00 | ||||||
| Zhuhai Lianyun Technology Co., Ltd. | 40,300,301.54 | 10,000,000.00 | 1,691,787.92 | 51,992,089.46 | ||||
| Gree (Chengdu) Electric Appliances Co., Ltd. | 400,454,836.65 | 100,998.30 | 400,555,834.95 | |||||
Page 305 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Accrual of impairment reserves | Others | Original value | Impairment provision | |
| Gree Material Supply Co., Ltd. of Zhuhai | 150,000,000.00 | 150,000,000.00 | ||||||
| Zhuhai Gree Green Control Technology Co., Ltd. | 270,000,000.00 | 280,000,000.00 | 550,000,000.00 | |||||
| Hefei Kinghome Electrical Co., Ltd. | 1,248,579,623.96 | 1,486,672.11 | 1,250,066,296.07 | |||||
| Zhuhai Gree Mechanical and Electrical Engineering Co., Ltd. | 149,843,449.82 | 3,245,579.86 | 153,089,029.68 | |||||
| Gree Electric Appliances (Luoyang) Washing Machine Co., Ltd. | 50,000,000.00 | 50,000,000.00 | ||||||
| Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd. | 75,000,000.00 | 75,000,000.00 | ||||||
| Gree Precision Mould (Anji) Co., Ltd. | 113,200,000.00 | 3,000,000.00 | 116,200,000.00 | |||||
| Zhuhai Gree Green Renewable Resources Co., Ltd. | 51,527,406.10 | 50,000,000.00 | 263,911.93 | 101,791,318.03 | ||||
| Gree E-commerce Co., Ltd. | 100,329,005.60 | 1,490,145.35 | 101,819,150.95 | |||||
| Zhuhai Gejian Health Medical Technology Co., Ltd. | 20,008,960.53 | 15,875.36 | 20,024,835.89 | |||||
| Zhuhai Gree Electrical Intelligent Manufacturing Co., Ltd. | 1,001,034,984.79 | 2,386,589.80 | 1,003,421,574.59 | |||||
| Gree Chengdu Xinhui Medical Equipment Co., Ltd. | 75,000,000.00 | 1,303,850.65 | 76,303,850.65 | |||||
| SL Group Co., Ltd. | 230,223,945.05 | 230,223,945.05 | ||||||
| Gree (Ganzhou) Electric Appliances Co., Ltd. | 100,167,596.22 | 563,562.15 | 100,731,158.37 | |||||
| Gree Electric Appliances (Linyi) Co., Ltd. | 367,949,060.36 | 36,000,000.00 | 497,867.79 | 404,446,928.15 | ||||
| Gree (Zhuhai Hengqin) Development Co., Ltd. | 1,000,000,000.00 | 1,000,000,000.00 | ||||||
| Changsha Kinghome Electric Appliances Co., Ltd | 50,000,000.00 | 424,173.75 | 50,424,173.75 | |||||
| Gree Altairnano New Energy Inc. | 1,828,403,518.47 | 1,015,328,446.32 | 654,161.12 | 2,844,386,125.91 | ||||
Page 306 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||
| Original value | Impairment provision | Additional Investment | Decreased Investment | Accrual of impairment reserves | Others | Original value | Impairment provision | |
| Zhuhai Mingruida Supply Chain Technology Co., Ltd. | 35,000,000.00 | 35,000,000.00 | ||||||
| Zhejiang DunAn Artificial Environment Co., Ltd. | 3,236,995,422.29 | 3,236,995,422.29 | ||||||
| Zhuhai Gree Electronic Components Co., Ltd. | 100,000,000.00 | VII. | 1,533,335.29 | 101,533,335.29 | ||||
| Zhuhai Gree Digital Technology Co., Ltd. | 50,000,000.00 | VIII. | IX. | 1,142,006.25 | 51,142,006.25 | |||
| Zhuhai Gree Prefabricated Vegetable Equipment Technology Development Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||||
| Total | 25,037,260,734.86 | 1,687,003,995.00 | 30,365,623.06 | 103,741,247.79 | 26,797,640,354.59 | |||
(2) [Note] Changes in Others are the expenses allocated by the parent company for the subsidiaries, involving the employee equity incentive ? employee stockownership plan.
(3) Investments to associates and joint ventures
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||||
| Original value | Impairment provision | Additional investment/disinvestment | Profits and losses on investment recognized by equity method | Adjustment of other comprehensive income | Other changes in equity | Declared distribution of cash dividends or profits | Others | Original value | Impairment provision | |
| Associated enterprise | ||||||||||
| Gree (Vietnam) Electric Appliances, Inc. | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | ||||||
| Outlook All Media Co., Ltd. | 35,478,374.26 | 509,236.20 | 35,987,610.46 | |||||||
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 15,239,073.92 | 301,716.52 | 150,000.00 | 15,390,790.44 | ||||||
Page 307 of 310
| Investee | Beginning balance | Increase/Decrease in the Current Period | Ending Balance | |||||||
| Original value | Impairment provision | Additional investment/disinvestment | Profits and losses on investment recognized by equity method | Adjustment of other comprehensive income | Other changes in equity | Declared distribution of cash dividends or profits | Others | Original value | Impairment provision | |
| Coresing Semiconductor Technology Co., Ltd. | 20,071,663.90 | 1,219,923.05 | 21,291,586.95 | |||||||
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | 4,131,807,804.94 | -279,197,890.11 | -10,162,802.37 | -1,020,652,263.34 | 2,821,794,849.12 | |||||
| Henan Yuze Finance Leasing Co., Ltd. | 52,591,103.02 | 1,627,073.67 | 1,642,181.50 | 52,575,995.19 | ||||||
| Zhuhai Jiayao Food Technology Co., Ltd. | 989,000.00 | -181,112.17 | 807,887.83 | |||||||
| Total | 4,257,128,029.39 | 1,940,009.35 | -278,208,890.11 | -6,685,965.10 | -1,020,652,263.34 | 1,792,181.50 | 2,949,788,729.34 | 1,940,009.35 | ||
Page 308 of 310
Operating revenues and costs
| Item | Amount for the current period | Amount incurred for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 129,423,899,406.84 | 83,109,940,207.26 | 114,824,763,292.63 | 79,648,915,725.67 |
| Other business | 5,229,739,158.04 | 4,854,534,375.52 | 4,965,687,298.82 | 4,544,120,744.77 |
| Total | 134,653,638,564.88 | 87,964,474,582.78 | 119,790,450,591.45 | 84,193,036,470.44 |
Income from investment
| Item | Amount for the current period | Amount incurred for the previous period |
| Dividend shares recognized for long-term equity investment measured in the cost method | 3,818,312,481.64 | 3,932,671,473.40 |
| Investment income obtained from trading financial assets | 280,583,705.07 | 12,657,637.64 |
| Investment income from derivative financial instruments | 135,154,303.55 | 9,416,978.74 |
| Long-term equity investment income measured by the equity method | -6,685,965.10 | -13,564,461.54 |
| Others | 50,600,218.28 | 37,642,998.26 |
| Total | 4,277,964,743.44 | 3,978,824,626.50 |
XVII. SupplementaryDetailed statement of non-recurring profits and losses in this period
| Item | Amount | Description |
| Profits and losses from disposal of non-current assets (including the write-off of accrued asset impairment reserves) | 324,413,866.77 | For details, please refer to this Note V. 67, 68, and 69 |
| Governmental subsidies included in the current profits and losses (but excluding the governmental subsidies closely relating to the normal business operations of the Company, conforming to | 784,275,516.36 | For details, please refer to this Note V. |
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Item
| Item | Amount | Description |
| national policies and regulations, and enjoyed by a fixed quota or a fixed amount in accordance with a certain standard) | 62 and 68 | |
| Profits and losses from changes in fair value arising from financial assets and financial liabilities held by non-financial enterprises, and profits and losses from disposal of financial assets and financial liabilities, except for the effective hedging business related to the Company's normal business operations | 553,697,207.25 | |
| Reversal of impairment reserves for the receivables under independent impairment test | 72,395,388.85 | |
| Non-operating revenues and expenditures other than the above items | -21,226,697.92 | For details, please refer to this Note V. 68 and 69 |
| Other profit and loss items conforming to the definition of non-recurring profits and losses | 40,553,390.36 | |
| Subtotal | 1,754,108,671.67 | |
| Less: Amount affecting income tax | 301,917,937.60 | |
| Amount affecting minority equity (after tax) | 264,247.68 | |
| Total | 1,451,926,486.39 |
[Note] The number "+" of the non-recurring profit and loss item means income, and "?" means loss or expenditure.The recognition of the Company's non-recurring profit and loss items is implemented in accordance with the provisions of the Explanatory Announcement No. 1on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit and Loss (Revised in 2023) (CSRC Announcement[2023] No. 65).ROE and earnings per share
| Profits for the report period | Weighted average return on equity (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to common shareholders of the Company | 26.53 | 5.22 | 5.22 |
| Net profit deducting non-recurring profits and losses attributable to common shareholders | 25.20 | 4.96 | 4.96 |
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Gree Electric Appliances, Inc. of Zhuhai
April 30, 2024