2021 Annual Report of GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
Annual Report 2021
April 2022
Section I Important Notice, Table of Contents and Paraphrase
The Board of Directors, Board of Supervisors, all directors, supervisors andSenior Management Personnel of the Company hereby guarantee that thecontents are authentic, accurate and complete, and there are no false records,misleading representations or material omissions in the Annual Report, andshall take all the joint and several legal responsibilities.
Dong Mingzhu, the Company's responsible person, Liao Jianxiong,responsible person in charge of accounting work and Liu Yanzi, in-chargeperson of accounting institution (accounting superintendent) hereby declare andwarrant that the financial report in the Report is authentic, accurate andcomplete.
All the directors attended the meeting of the Board of Directors in respectof deliberation of the Report.
The forward-looking statements such as future plans and developmentstrategies in the Report do not constitute a substantive commitment of theCompany to investors. Investors and relevant persons should therefore be awareof risk factors attendant in investment and understand the differences betweenplans, 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 total number
of 5,536,677,733 shares of the Company enjoying profit distribution rights as ofApril 29, 2022 (the total stock capital of 5,914,469,040 shares excluding the377,791,307 shares held in the repurchase account of the Company), theCompany plans to distribute all shareholders a cash dividend of RMB 20 (taxincluded) per 10 shares, but does not plan to give any bonus share or use anypublic reserve funds for capitalization.
Table of Contents
Section I Important Notice, Table of Contents and Paraphrase ...... 1
Section II Company Profile and Main Financial Indices ...... 6
Section III Management Discussion and Analysis ...... 12
Section IV Corporate Governance ...... 72
Section V Environmental and Social Responsibility ...... 99
Section VI Important Matters ...... 111
Section VII Changes in Shares and Shareholders ...... 141
Section VIII Related Information of Preferred Share ...... 153
Section IX Related Information on Bonds ...... 154
Section X Financial statement ...... 155
References
(I) The accounting statements signed and sealed by Dong Mingzhu, the legal representative, Liao Jianxiong, chief accountant and LiuYanzi, head of accounting department.(II) The original audit report sealed by China Audit Union Power Certified Public Accountants Co., Ltd. and signed and sealed bycertified public accountants Han Zhenping and Qiu Yiwu.(III) Originals and original drafts of all the Company's documents and announcements published on the newspapers designated byCSRC and on www.cninfo.com.cn within the Report Period.
Paraphrase
| Items | Means | Contents |
| Company, the Company, the enterprise, GREE ELECTRIC APPLIANCES or GREE | Means | GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI |
| GREE GROUP | Means | Zhuhai Gree Group Co., Ltd. |
| Zhuhai Mingjun | Means | Zhuhai Mingjun Investment Partnership (Limited Partnership) |
| Finance Company | Means | Zhuhai Gree Group Finance Company Limited |
| Jinghai Internet | Means | Jinghai Internet Technology Development Co., Ltd. |
| GREE Altairnano, GREE Altairnano New Energy | Means | GREE Altairnano New Energy Inc. (former name: Yinlong New Energy Co., Ltd.) |
| CSRC | Means | China Securities Regulatory Commission |
| Report Period | Means | January 1, 2021 to December 31, 2021 |
Section II Company Profile and Main Financial IndicesI. Company information
| Stock Abbreviation | GREE ELECTRIC APPLIANCES | Stock Code | 000651 |
| Stock Exchange | Shenzhen Stock Exchange | ||
| Name in Chinese | 珠海格力电器股份有限公司 | ||
| Name Abbreviation in Chinese | 格力电器 | ||
| Name in Foreign Language (if any) | GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | ||
| Name Abbreviation in Foreign Language (if any) | GREE | ||
| Legal Representative | Dong Mingzhu | ||
| Registered Address | Room 608, No. 108, Huitong Third Road, Hengqin New Area, Zhuhai City, Guangdong Province | ||
| Post Code of Registered Address | 519031 | ||
| Historical Changes of 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 | ||
| Business 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
| Board Secretary | Securities Affairs Representative | |
| Name | Deng Xiaobo | Zhang Zhouhu, Yan Zhangxiang |
| 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 | China Securities Journal, Securities Times, Shanghai Securities News and Securities Daily |
| Media to which the Company's Annual Report is disclosed and their website | http://www.cninfo.com.cn |
| Place where the Annual Report is available for inspection | Investment Management Department of the Company |
IV. Alteration of registration
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 | No. 169 Donghu Road, Wuchang District, Wuhan City |
| Names of Accountants as Signatories | Han Zhenping, 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 indices
Whether the Company has retroactive adjustment or restatement of previous accounting data
□ Yes √ No
| 2021 | 2020 | Increase/Decrease over the previous year | 2019 |
Organization code
| Organization code | 91440400192548256N |
| Changes (if any) in the main business since 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 RMB 46.17/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. |
| Operating Revenue (Yuan) | 187,868,874,892.71 | 168,199,204,404.53 | 11.69% | 198,153,027,540.35 |
| Net profit attributable to shareholders of listed Company (Yuan) | 23,063,732,372.62 | 22,175,108,137.32 | 4.01% | 24,696,641,368.84 |
| Net profit attributable to shareholders of listed Company less non-recurring gains and losses (Yuan) | 21,850,050,895.31 | 20,285,816,036.00 | 7.71% | 24,171,511,911.32 |
| Net cash flow generated from operating activities (Yuan) | 1,894,363,258.72 | 19,238,637,309.16 | -90.15% | 27,893,714,093.59 |
| Basic earnings per share (Yuan per Share) | 4.04 | 3.71 | 8.89% | 4.11 |
| Diluted earnings per share (Yuan per Share) | 4.04 | 3.71 | 8.89% | 4.11 |
| Weighted average return on net assets | 21.34% | 18.88% | 2.46% | 25.72% |
| At the end of 2021 | At the end of 2020 | Increase/Decrease over the previous year | At the end of 2019 | |
| Total asset (Yuan) | 319,598,183,780.38 | 279,217,923,628.27 | 14.46% | 282,972,157,415.28 |
| Net asset attributable to shareholders of listed Company (Yuan) | 103,651,654,599.87 | 115,190,211,206.76 | -10.02% | 110,153,573,282.67 |
The net profit of the Company before and after deducting non-recurring profits and losses in the last three fiscal years, whichever islower, is negative, and the audit report of the last year shows that the Company's ability to continue as a going concern is uncertain
□ Yes √ No
The net profit 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 profit and net assets in the financial report disclosed under international accountingstandards and that disclosed under domestic accounting standards
□ Applicable √ Not applicable
There was no difference in net profit and net assets in the financial report disclosed under international accounting standards and thatdisclosed under domestic accounting standards during the Report Period.
2. Differences in net profit and net assets in the financial report disclosed under overseas accountingstandards and that disclosed under domestic accounting standards
□ Applicable √ Not applicable
There was no difference in net profit and net assets in the financial report disclosed under overseas accounting standards and thatdisclosed under domestic accounting standards during the Report Period.VIII. Quarter-based main financial indicators
Unit: Yuan
| Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
| Operating revenue | 33,189,408,213.61 | 57,862,663,732.52 | 47,082,608,837.26 | 49,734,194,109.32 |
| Net profit attributable to shareholders of listed company | 3,442,899,755.09 | 6,013,919,597.77 | 6,187,957,163.99 | 7,418,955,855.77 |
| Net profit attributable to shareholders of listed companies after deduction of non-recurring profit and loss | 3,299,482,181.81 | 5,492,272,396.33 | 5,970,530,098.50 | 7,087,766,218.67 |
| Net cash flows from operating activities | -4,265,483,021.72 | -1,805,736,890.49 | 12,533,051,153.77 | -4,567,467,982.84 |
Whether major differences exist between the above financial indicators or their sum and those in the disclosed quarterly report andsemi-annual report
□ Yes √ No
IX. Non-recurring profit and loss items and amounts
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount in 2021 | Amount in 2020 | Amount in 2019 | Description |
| Gains and losses from disposal of non-current assets (including the provision for asset impairment write-off part) | -7,498,891.48 | -4,974,224.62 | -9,293,929.38 | For details, see Note (V) 63, Note (V) 64, and Note (V) 65 |
| Governmental subsidies recorded into the current gains and losses (excluding the governmental subsidies closely relating to the normal business operations of the company, conforming to national policies and regulations, and enjoyed by a fixed quota or a fixed amount in accordance with a certain standard) | 875,778,734.20 | 1,346,168,393.38 | 1,215,852,371.66 | For details, see Note (V) 58 and Note (V) 64 |
| Capital occupation fee collected from the non-financial institution and recorded into the current gains and losses | 6,234,097.19 | 883,505.62 | 359,713.10 | |
| Gains and losses caused by fair value changes from the holding of trading financial assets and trading financial liabilities, and investment income obtained from the disposal of trading financial assets, trading financial liabilities, and available-for-sale financial assets, except for the effective hedging business related to the Company's normal business operations | 369,460,356.97 | 877,450,950.74 | 1,449,722.86 | |
| Reversal of impairment provision for the accounts receivable for which an independent impairment test is conducted | 16,844,984.00 | |||
| Non-operating incomes and expenditures other than the above items | 58,510,843.19 | 50,024,914.68 | -530,486,147.03 | For details, see Note (V) 64 and Note (V) 65 |
| Other profit and loss items that conform to the definition of non-recurring profit and loss | 13,691,263.12 | 17,915,425.64 | 997,770.17 | |
| Less: Influence amount of income tax | 82,923,289.84 | 386,974,457.37 | 147,189,032.83 | |
| Influence amount of minority equity | 36,416,620.04 | 11,202,406.75 | 6,561,011.03 | |
| Total | 1,213,681,477.31 | 1,889,292,101.32 | 525,129,457.52 | -- |
Details of other profit and loss items that conform to the definition of non-recurring profit and loss:
√ Applicable □ Not Applicable
| Item | Amount in current report period | Amount in the same period of the previous year | Reason |
Other profit and loss items that conform tothe definition of non-recurring profit andloss
| Other profit and loss items that conform to the definition of non-recurring profit and loss | 13,691,263.12 | 17,915,425.64 | Returned commission charges of personal income tax, etc. |
The Company has no other profit and loss items that conform to the definition of non-recurring profit and loss.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 Profit and Loss as recurring profit and loss items
□ Applicable √ Not applicable
No non-recurring profit and loss items which are listed in the Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public - Non-recurring Profit and Loss were defined by the Company as recurring profit
and loss items.
Section III Management Discussion and Analysis
I. Industry of the Company during the report period(I) Consumption fieldGree's products in the consumption field cover residential air conditioners, HVAC, refrigerators, washingmachines, water heaters, kitchen appliances, and environment appliances, etc.According to the Report on China's Household Appliance Market in 2021 issued by China Center forInformation Industry Development, in 2021, the household appliance market of China recovered in an all-roundway, with the retail scale volume reaching 881.1 billion yuan, a year-on-year increase of 5.7%, basically returningto the level before the COVID-19 pandemic.Sales of air conditioners returned to the level before the COVID-19 pandemic, and exports became the maingrowth engine. According to the statistics of ChinaIOL.com, the sales volume of residential air conditioners was152,590,000 in 2021, a year-on-year increase of 7.9%, which was also slightly higher than that in 2019; exportwas the main growth engine of residential air conditioner industry, in 2021, the export volume of residential airconditioners was 67,890,000, a year-on-year increase of 11.0%; domestic sales volume was 84,700,000, ayear-on-year increase of 5.5%. In 2021, the sales volume of central air conditioner was about RMB 123.2 billion,with a year-on-year increase of 25.4%.The retail sales of household appliances in online channels once again exceeded those in offline channels inChina. The growth rate of online and offline market scale has changed from negative to positive. Moreover, underthe continuous and profound impact of COVID-19 pandemic, the retail sales of online channels in Chinaaccounted for 52.9% of the entire household appliance market in 2021, with a proportion more than 50% for twoconsecutive years.High quality household appliances are favored, and emerging household appliances continue to sell well.Among traditional household appliances, products with larger size, larger capacity and higher quality, such asinverter air conditioners, multi-door refrigerators, high-capacity washing and drying integrated washing machinesand high suction range hoods, are favored. Among the emerging household appliances, the demand for fresh airconditioners, partitioned washing machines, clothes dryers, water purification and hot water all-in-one machine,multi-functional high speed blenders, air fryers, integrated stoves, floor scrubbers, cosmetic instruments and petappliances is more fine sorted, and the products with improved quality continue to sell well.The policy of green intelligent household appliance going to the countryside will be launched, and thepotential of the sinking market is huge. The household appliance market of the sinking market, which accounts for70% of China's population, reached RMB 277.5 billion in 2021, accounting for 31.5%, with a year-on-yearincrease of 8.9%, which is much higher than the overall market, becoming the most important growth pole of thehousehold appliance market. Universal household appliances are still the main sales in the sinking market, andthere is still a large gap between the number of main household appliances per 100 households in rural areas andthat in cities. For example, the number of air conditioners owned by 100 households in cities is 150, while that inrural areas is only 74. The penetration rate of kitchen appliances, environment appliances and personal careappliances in rural areas is lower. With the continuous improvement of rural residents' consumption capacity, the
gradual improvement of network and logistics infrastructure, and the rapid integration of urban and ruralhousehold appliance consumption concepts, the sinking market has become the household appliance consumptionmarket with the largest population base, the largest area and the greatest potential in China. On March 5, 2022,Premier Li Keqiang proposed in the Government Work Report to encourage local governments to carry out thepolicy of green intelligent household appliance going to the countryside and old for new service, which willcertainly promote the further growth of the sinking market of household appliances.(II) Industrial fieldGree's products in the industrial field cover high-end equipment, precision moulds, compressors, motors,industrial energy storage, new energy buses, and new energy special vehicles, etc.The intelligent equipment sector continues to grow. The combination of post-pandemic economic recoveryand industrial transformation and upgrading, coupled with the promotion of national strategies such as "Made inChina 2025" and the Development Plan on Smart Manufacturing During the "14th Five-Year Plan", China'sintelligent equipment sector has achieved rapid development. According to the data of the National Bureau ofStatistics, the added value of China's equipment manufacturing industry increased by 12.9% year-on-year in 2021,accounting for 32.4% of the added value of industries above designated size; the output of industrial robots was366,000 sets, a year-on-year increase of 67.9%.
Technology-intensive industries drive the development of intelligent equipment. The demand increment ofintelligent equipment in 2021 mainly comes from technology-intensive industries such as new energy vehicles, 3Celectronics and medicine. According to the data of the GGII, in 2021, the sales volume of industrial robots inChina exceeded 261,000 sets, with a year-on-year increase of more than 53%, accounting for more than 50% ofthe global sales volume, and China has become the world's largest consumer of industrial robots for 8 consecutiveyears.
The development direction of intelligent equipment is to meet the needs of industrial upgrading. Thedevelopment demand of industrial manufacturing is improvement of production efficiency, improvement ofproduct quality and customized production. Intelligent equipment is the carrier to realize the demand of industrialmanufacturing, and will develop in the direction of high precision, high stability and flexible production.
China's intelligent manufacturing industry has clear objectives and great growth potential. The developmentlevel of high-end intelligent equipment is not only the standard to measure the development level of a country'smanufacturing industry, but also the basis for industrial upgrading of a manufacturing power. Therefore, it hasbeen strongly supported by national policies. It is clearly stated in the Development Plan on Smart ManufacturingDuring the "14th Five-Year Plan" that by 2025, 70% of manufacturing enterprises above designated size will begenerally digitalized and networked, and build more than 500 intelligent manufacturing demonstration plantsleading the development of the industry. Driven by national policies and industrial upgrading needs, China'sintelligent manufacturing industry has great growth potential in the future.
Industrial upgrading will accelerate the survival of the fittest in the mould industry. China is a big country inmould manufacturing and trade in the world. According to the data of Zhongshang Industry Research Institute, themarket scale of China's mould industry is expected to be RMB 302.833 billion in 2021, with a year-on-yearincrease of 9.5%. With the implementation of national intelligent manufacturing and industrial upgrading policies,leading enterprises in the industry will increase R&D investment, accelerate the automation upgrading ofproduction lines, and improve the development level of new products; the industry will accelerate the survival ofthe fittest, and market resources will gradually concentrate on advantageous enterprises in the industry, which is
conducive to the development of advantageous enterprises.
The sector of core air conditioning parts returned to growth. Thanks to the effective control of the domesticCOVID-19 pandemic and the comprehensive recovery of the downstream household appliance industry, themarket has improved compared with 2020, but it has not completely recovered. According to the 2021 statistics ofChinaIOL.com, the sales volume of rotor compressors in China was 238,570,000, a year-on-year increase of
12.8%; the sales volume of air conditioner motor in China was 392,290,000, a year-on-year increase of 10%. Withthe implementation of new energy efficiency policy and carbon peaking and carbon neutrality policy, and thecontinuous rise of global raw materials, the upgrading of product structure is imperative.
Under the strong impetus of the national "carbon peaking and carbon neutrality" strategy, green industriessuch as energy storage and new energy vehicles have ushered in unprecedented development opportunities.
The state has made clear the development objectives of the energy storage industry, and the industry willaccelerate its development. In July 2021, the National Development and Reform Commission and the NationalEnergy Administration jointly issued the Guidance on Accelerating the Development of New Energy Storage,which defined and quantified the development objectives of the energy storage industry for the first time at thenational level. It is expected that the installed capacity of new energy storage will reach more than 30,000,000KW (30 GW) by 2025. From 3.28 GW at the end of 2020 to 30 GW in 2025, the scale of the new energy storagemarket will be expanded to 10 times the current level in the next five years, with an average annual compoundgrowth rate of more than 55%. Positive policy signals will guide the inflow of social capital and boost the rapidarrival of trillion energy storage market.
The sales volume of new energy special vehicles reached a new high, leading the new energy commercialvehicle market. Driven by the introduction of new energy logistics vehicle policies, the expansion of urbandistribution scale, the new regulations for blue license plate light trucks and the rise of switching mode for heavytrucks, new energy special vehicles have achieved explosive growth, according to the terminal license plateenrolling data, the cumulative sales of new energy special vehicles in 2021 were 160,700, with a year-on-yeargrowth of 125.6%. Due to the decline of subsidies and the gradual saturation of the market, the sales volume ofnew energy buses above 6 meters decreased by 17% year-on-year. Enterprises with new energy special vehicles,new energy buses, and new energy auto parts simultaneously can quickly adapt to market changes.II. Major businesses engaged in during the Report Period
Gree Electric Appliances, Inc. of Zhuhai is a diversified and technological global industrial group and hasthree major consumer brands: Gree, TOSOT and KINGHOME, and industrial brands: LANDA, Kaibang, andXinyuan, etc. In consumption field, it covers residential air conditioners, HVAC, refrigerators, washing machines,water heaters, kitchen appliances, environment appliances, communication products, smart buildings, and smarthousehold appliances; in industrial field, it covers high-end equipment, precision moulds, freezers andrefrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting equipment,basic materials, industrial energy storage, and renewable resources. Gree's products are sold in more than 180countries and regions, providing global consumers with satisfactory products and services, for the purpose ofcreating a better life.
In 2021, Gree was again listed in the Forbes Global 2000 - World's Best Employers and ranked the 252th,and listed in the Fortune Global 500 and ranked the 488th by virtue of its outstanding comprehensive strength.
According to the data released by HVAC Information, Gree was the only brand with a sales scale of morethan RMB 20 billion in China's central air conditioning industry in 2021 and has maintained the position for tenconsecutive years in the Chinese market, among them, Gree ranked first among national brands with a share ofmore than 20% in VRF, and was far ahead of the second with a share of 34.8% in unitary air conditioner.According to the 2021 domestic sales data of air conditioner published by ChinaIOL.com, Gree air conditionersranked the first in the field with a share of 37.4%, taking the lead for 27 years.
In 2021, Gree continued to enrich the categories of home appliances, strengthened the marketing of newmedia channels, and achieved good results. According to the data of All View Cloud, in 2021, Gree's online retailsales share of electric heaters, electric fans, dehumidifiers, air source water heaters and other products rankedamong the top two in the industry.
Gree takes "To be Global Leading Air Conditioning Enterprise" as its corporate vision, and "carrying forwardthe industrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, andachieving ‘Made in China, Loved by the World’" as its mission. By adhering to the management philosophy that"innovation never stops", Gree focuses on independent innovation and development, in order to grasp the pulse ofthe times, build a world brand and create a development model with Chinese characteristics for Chinesemanufacturing enterprises.III. Core competence analysis
Facing new opportunities and challenges, Gree takes "mastering core technologies and forging perfectquality" as the two wheels for driving, transfers and improves the value through unique marketing model, sticks toindependent people cultivation, independent innovation and independent production, and takes "carrying forwardthe industrial spirit, mastering core technologies, pursuing perfect quality, providing first-class services, andachieving Made in China, Loved by the World" as its mission to stride forward.(I) World famous brand, continuing to create value for the society
Gree is a diversified technological global industrial group integrating R&D, production, sales and service.Gree has won a great number of honors such as "World Brand", "Most Competitive Brand in the Market","National Quality Award", "Export Inspection Exemption Enterprise" and "China Brand Innovation Award" overthese years.
In 2021, Gree was again listed in the Forbes Global 2000 and ranked the 252th, and listed in the FortuneGlobal 500 and ranked the 488th by virtue of its outstanding comprehensive strength.
In May 2021, the "2021 China Brand Value Evaluation Information List" jointly sponsored by Xinhua NewsAgency, China Council for Brand Development, China Appraisal Society and SASAC News Center was released,and Gree ranked first in the household appliance industry, with a brand value of RMB 120.778 billion, an increaseof RMB 6.675 billion compared with last year.
Gree has always been adhering to the core sense of worth of “quality first, customer satisfaction, good faithmanagement, and win-win situation”, and forging its brands and creating social value, environmental value andeconomic value for the society and consumers depending on its perfect quality and world-leading technologies.(II) Excellent R&D strength, continuously leading technological innovation of the industry
Gree insists on "independent research and development of core technologies", and has set up a technological
innovation system of "enterprise regarded as the main player, market as the orientation,enterprise-university-research cooperation". It insists on innovation driving, cultivates innovative talents,implements the leader strategy, and constantly consolidates its global leading position in the field of refrigeration.Gree boasts the largest R&D center of air conditioners in the world, including 4 national R&D centers, 1academician workstation, 16 research institutes, nearly 1,000 laboratories. Its national R&D centers are theNational Key Laboratory on Air Conditioning Equipment and Energy-saving System Operation, NationalEngineering Research Center of Green Refrigeration Equipment, State Recognized Enterprise Technology Centerand National Industrial Design Center. In 2021, Gree was approved to establish Guangdong Key Laboratory forEnterprises of High-speed Energy Saving Motor System.Gree Electric continued to lead the industry in testing, certification and standards. Gree has built more than300 professional laboratories for thermal balance, noises, reliability, electrical safety, electromagneticcompatibility, etc., and has been successively recognized by a variety of national or international organizations(including CNAS, TUV, UL, CSA, VDE, ITS, SGS, BV, and AHRI, etc.), growing into the largest experimentalcenter in the industry that can provide the most complete tests and receive the largest number of national andinternational recognitions. Gree has actively led or participated in the formulation of more than 570 internationalstandards and national standards. In terms of international standards, Gree took the lead in formulating twointernational standards for photovoltaic direct-drive technology, laying a solid foundation for Gree's photovoltaicair conditioning products to enter the international market; it participated in the formulation and revision of 13international standards for household appliances and national standards for air conditioning in the United Statesand Canada, and continuously made new breakthroughs and new competitive advantages in internationalstandardization. Gree has successively become the research and evaluation base of the National NotificationEnquiry Center, the first batch of National Demonstration Base for Standardization of Consumer Goods, theNational Energy Conservation Standardization Demonstration Pilot and the National Pilot Enterprise forStandardization of High-end Equipment Manufacturing Industry.
By the end of 2021, Gree had won 99 important awards at the national, provincial and industrial levels; hadaccumulatively applied for 96,626 domestic and foreign patents, including 49,549 invention patents, had obtained13,507 invention patent grants at home and abroad and become the first household appliance enterprise in Chinawith more than 10,000 invention patents granted; had won 65 Chinese patent awards in total, including two goldawards for invention and three gold awards for appearance, ranking first in the air conditioning industry in termsof the total number of awards; had won 11 gold awards at the International Exhibition of Inventions of Genevaand 6 iENA at the iENA. At the same time, Gree is one of the first batch of national enterprise intellectualproperty demonstration unit, "National Patent Operation Pilot Enterprise", and won the China Trademark GoldAward.(III) Leading PQAM perfect quality assurance mode, achieving “Made in China, Loved by the World”Gree always adheres to the principle of "quality first" and "integrity management", and constantly optimizesthe quality management system and innovates the quality control mode based on customer demand.Gree adheres to the quality policy of "pursuing the perfect quality, creating an international brand, andforging a century enterprise", take "best service not requiring after-sales service" and "zero defect" as the qualitygoal, always sticks to the quality culture of "strict, true and new" oriented to customer demand and socialresponsibility, with independent talent training as the core, establish an all-round quality education and trainingsystem. In the process of "practice - summary and innovation - practice again - summary and innovation again", a
comprehensive quality management model of independent innovation with Gree characteristics has been graduallyformed, and the T9 comprehensive quality control system centered on the quality technology innovation cycleD-CTFP has been created and implemented.Quality is related to "two lives", one is the life of consumers and the other is the life of enterprise. Thequality level of Gree's products has been steadily improved by strengthening the internal quality control, and theafter-sale failure rate has been declining for many consecutive years. In March 2021, Gree put forward the"ten-year free repair policy" for residential air conditioners, which led the progress of domestic air conditioningservice standards and reflected the strength of Gree's air conditioning product quality and after-sales servicebeyond national standards.
Gree adheres to the original intention of "taking consumer demand as the highest standard" and contributes tothe high-quality development of Made-in-China products with the spirit of "conduct self-examination". In 2018,Gree won the “China Quality Award” issued by the State Administration for Market Regulation relying on itsperfect quality management mode of "Made in China, Loved by the World"; in 2020, based on the "perfect qualitymanagement mode", Gree participated in the drafting and development of the Quality Management - InnovationCycle Guide Based on Customer Demand as a national standard, with a view to publicizing Gree's advancedquality management experience throughout the industry and promoting continuous improvement of the qualitylevel of the whole industry. In November 2021, Gree won the title of "National Market Quality Credit AAA GradeUser Satisfaction Benchmarking Enterprise", which demonstrated consumers' recognition of Gree's high-qualityproducts and Gree's strong strength as an industry leader.(IV) The full series of household appliances, providing consumers with overall solutions for high-quality lifeGree can provide a full range of household appliances including residential air conditioners, HVAC,refrigerators, washing machines, environment appliances, kitchen appliances and home appliances, fully meetingconsumers’ all-round needs for high quality life. The new household appliances launched in 2021 include RealPurify formaldehyde removal air conditioner, Freair series two-way fresh air conditioner, Wisdom Wind airconditioner for the aged, Painting Era AI audio-visual air conditioner, Kinghome refrigerator with all-roundfreshness preservation, Almighty King Shuzun II air source water heater, Automatic Drum Washer&Heat PumpClothing Care Dryer, EcoSilence Drive washing machine, Jinghuan Series dishwasher, steam oven, gas stove withanti-burning protection, sweeping robot, water softener, central water purifier, desktop water dispenser, car airpurifier, tower air cooler with cooling and heating function, graphene baseboard heater, household dryer, sparklingwater maker, air fryer, ultrasonic cleaner, and health pot, etc., facilitating the consumers in their colorful life.In addition, under the background of consumption upgrading and seriation becoming the general trend of theindustry, Gree launched five sets of household appliance products, including " Gree Serenity", "Gree Pearl","Gree Times", "Gree Stars" and "Gree Brevity", which fully concerned the intelligent, convenient, comfortableand healthy personalized household needs of consumers, and created a new home experience for consumers withthe ultimate quality and aesthetic perception.Gree Smart Home has made in-depth layout in smart home system, smart home network, smart voiceinteraction, smart scene scheme and smart product technology, launched a series of smart home products, andindependently created smart IoT technologies such as IoT platform, smart decision system, G-Voice voiceinteraction system, smart vision system, G-OS IoT operating system and G-Learning comfort and energy-savingalgorithm, creating a high-quality life of Internet of Everything (IoE) for consumers.
At present, Gree has laid out six technologies in the field of smart home, including smart connect, smart
sense, smart interaction, smart cloud platform, smart energy and artificial intelligence. It also has five controlaccesses, including "Gree +" App, smart voice control air conditioner, IoT mobile phone, smart door lock andmagic cube, which can cover the whole series of Gree smart products.Gree will build Gree's "healthy, smart and comfortable home" ecological home system for consumers fromthe all-round multi-system product lines of air conditioner, floor heating, fresh air, water purification and smart,combined with the six-constant system concept of "constant temperature, constant humidity, constant oxygen,constant cleanliness, constant mute and constant smart" in the new era.(V) With the self-controlled new retail system, growth is driven by dataGree insists on the sales channel construction and sales model of independent management, mutual benefitand win-win and creates a solid online and offline business layout. The two channels complement each other andare deeply integrated to create a full channel sales platform.Gree has established an offline sales network covering the whole country, providing service for consumersthrough its 27 sales companies and more than 30,000 exclusive stores. “Gree Dong Mingzhu's store” has beentransformed and upgraded into a comprehensive online retail e-commerce platform, selling high qualitycommodities of various categories and varieties such as household appliances, food and beverage, beauty andpersonal care products, clothing boutiques, and online travel products. As the market environment changes, Greehas started the "new retail" marketing mode reform of online and offline integration. The online third-partye-commerce platform and “Gree Dong Mingzhu's store” are deeply integrated with more than 30,000 offlinestores to provide online-offline linkage integrated services including offline experience, online ordering, andnationwide unified distribution and installation.Information, digital and intelligent technologies have been deeply applied to Gree's "new retail" marketingmode. The whole chain construction and operation of new retail including the shopping mall platform, orderfulfillment system, online wholesale system, and after-sales dispatch system realizes user reaching of Gree’s newretail online, the informatization capability empowers the channel business to drive the digital upgrade ofmarketing. Relying on the Internet engineering technology and integrating the artificial intelligence, Internet ofThings and AR/VR technology, Gree promotes the digital upgrade of terminal stores through the intelligent touchinteraction mode offline, achieves the functions of product sampling, price adjustment, training, user value tagprecipitation and management in the cloud, builds Gree’s characteristic smart shopping guide stores, andconstantly improves consumers' shopping experience; uses the functions of inventory data analysis and earlywarning, dynamic display and analysis of sales data and conduct data-driven operation to meet the new needs ofconsumers continuously.(VI) Precise production capacity layout and leading intelligent manufacturing level to response to marketdemand rapidly
At present, according to the market demand characteristics of different products, differences in regionalproduction factor endowments and other factors, Gree has established production and manufacturing bases for airconditioners, home appliances and industrial products in Zhuhai, Chongqing, Hefei, Zhongshan, Zhengzhou,Wuhan, Shijiazhuang, Wuhu, Changsha, Hangzhou, Suqian, Luoyang, Nanjing, Chengdu, Ganzhou, Linyi, Braziland Pakistan, forming the highly coordinated development of industrial agglomeration and upstream anddownstream industrial chains, which ensures the independent manufacturing of core parts and drives thedevelopment of local economy.
Gree uses the industrial robots, intelligent logistics and warehousing and other intelligent equipmentindependently developed and manufactured to continuously upgrade and transform the existing factories and builddemonstration smart household appliance factories. By 2021, Zhuhai base has been recognized as "industrialInternet platform + green and low-carbon solution pilot demonstration" by the Ministry of Industry andInformation Technology, and Wuhu base, Chongqing base, Hangzhou base and Hefei base have been recognizedas provincial "smart factory" successively.Precise production capacity layout and leading intelligent manufacturing level further enhanced Gree'smanufacturing and cost advantages, realized the rapid response to market demand and brought high-quality lifeenjoyment to consumers.(VII) With strong self-research and self-made ability of core components, the comprehensivecompetitiveness of products continues to lead the industry
The core components of products include compressor, air conditioner motor, robot servo system, robotmotion control system, reducer, direct drive motor spindle and linear motor, etc.
Gree has been deeply engaged in the field of compressor and air conditioner motor for many years, itscapacity, technology and quality of compressor and air conditioner motor have always led the industry, and hassuccessively won honors such as "National Quality Award", "National High-tech Enterprise", and "NationalQuality Benchmark", has built national laboratory testing centers such as "National CNAS Testing Center", "thefirst UL-CTDP recognized laboratory in the domestic motor industry", and has obtained 2501 invention patentgrants, showing the hard power and brand influence of Gree's industrial product development.
10 products independently developed by Gree, including the "high efficiency scroll compressor","high-performance linear servo motor and driver", "high-performance servo motor and driver for industrial robot"and "rare earth free permanent reluctance main drive motor system for new energy bus" were appraised as the"world-leading" level, indicating that Gree has fully mastered the advanced technology from core components toproducts.
Gree not only has strong R&D capability of core components, but also has excellent processing andmanufacturing capability. For example, Gree five-axis 3D curved surface processing machine tool is suitable formachining precision parts with complex curved surfaces, with a repeated positioning precision of up to 0.002 mmand cutting feed rate of up to 80 m/min, which can ensure the high quality of core components such as centrifugalcompressor blades.
In the diversified sector, the robot servo system currently developed by Gree has covered 600 kg-levelindustrial robots, which is a special robot servo system with the largest power range in the industry; Gree'sself-developed multi-axis integrated linear servo system for machine tools has reached the "international leading"level in key performance indices such as maximum speed, thrust density and thrust fluctuation; Gree'sself-developed precision harmonic reducer has the characteristics of compact structure, high geometric accuracy,small back clearance and high torque; and Gree has successfully completed the development of Gree's first robotmotion control system with independent intellectual property rights. The research and development of corecomponents of robots and machine tools has successfully broken the technological monopoly of foreign brandsand improved the competitiveness of national brands.
The powerful R&D and manufacturing capabilities of core components ensure the high independent rate andcomprehensive competitiveness of Gree's products, and provide vigorous support for the leapfrog development of
Gree.(VIII) Advanced cost and supply chain management to provide guarantee for the steady development of theCompany
Gree adheres to the orientation to market demand, establishes and improves an objective-driven costplanning and management system in consideration of the Company's business objectives: deepen product costcontrol, carry out value chain analysis, decompose and analyze the impact of cost input, conversion and output ofvarious business links inside and outside the group on the final value of products, so as to improve operations,reduce costs, realize value-added of value chain and form a sustainable competitive advantage.
With the goal of building an industry-leading supply chain, Gree plans supply chain management andoptimizes supply chain resources, expands the layout of upstream and downstream industries, carries out strategiccooperation with leading enterprises in the industry, and establishes in-depth cooperative relations and resourcesharing with high-quality suppliers, so as to maximize the interests of both sides and achieve mutual benefit andwin-win results.
Promote the optimization of supply chain management with informatization. Gree realizes the automaticcollection, correlation, analysis, monitoring and push of internal and external quality information related tomaterials through the technical means of big data, so as to promote the continuous improvement of materialquality. Enhance the competitiveness of the supply chain through mutual promotion with partners.
In 2021, affected by global trade friction, geopolitics, COVID-19 and other factors, the global economy wasfrustrated, the price of bulk raw materials soared, and market competition and cost pressure were transmitted tothe whole supply chain step by step. Gree continued to give full play to the scale advantage of centralizedprocurement, and implemented measures such as localization of key imported materials, generalization ofstructure and materials, and multi-regional supply, which effectively alleviated the pressure on operation causedby environmental changes.
In addition, Gree has further promoted the cost reduction of product design by improving product structuredesign, optimizing process links, developing lean models and developing outdoor units in series; reduced theproduction cost by improving the utilization rate of materials, improving the automation level and improving theproduction process.(IX) Independent talent training system to realize the supply of high-quality talents
Gree always adheres to the principle of "focusing on the strategic layout of the Company and adhering toindependent training of talents" and gradually forms an independent talent training mode with independent talentintroduction channel, independent training and development mechanism and all-round incentive and guaranteesystem as the core based on the development experience and cultural deposit of the Company, striving to makeemployees and the Company make progress and develop together.
Gree's talent team has been growing, its talent structure has been upgraded over the years. By the end of 2021,the Company had about 82,000 employees, including 2 leading talents in science and technology innovation underthe National Ten Thousand Talents Program, 4 experts enjoying special allowances from the State Council, 1winner of the Award of Outstanding Contribution to Nanyue, 1 Outstanding Talent under the Guangdong SpecialSupport Program, and 95 high-level talents of Zhuhai, 549 outstanding young talents, 1,097 scientific andtechnological experts evaluated inside the Company, more than 6,800 intermediate and senior engineers, and morethan 30,000 skilled workers.
In order to adapt to the transformation of the production model to automation and intelligence, the Companyaccelerates the training of applied-skilled talents. The Company vigorously promoted the spirit of model workersand craftsmen in the new era, made full use of the resource advantages of Guangdong technicians, skilled masterstudios, and technician workstations to deepen the Company's high-skilled personnel training mechanism, andselected and cultivated a group of "high-tech and cutting-edge" skilled talents through a series of measures such asskill training, skill competition and skill grade evaluation. Up to now, the Group has 14,000 newly assessedskilled talents, of which, 10 have won the title of "Guangdong Provincial Technical Expert", 1 has won the title of"Nanyue Technical Expert", and 5 have won the title of "Zhuhai Municipal Technical Expert", 4 "ZhuhaiMunicipal Post Technical Expert Pacesetter", 12 "Zhuhai Municipal Chief Technical Expert", 10 "Zhuhai SpecialArtisan", and 233 "Zhuhai Artisan".Employees are an important driving force for development of the Company. The Company seeks benefits foremployees through multiple channels including employee stock ownership plan, talent subsidies, talent housing,Gree school and five-day workweek, improving the employee satisfaction and happiness through continuousefforts.
IV. Analysis of main business
1. Overview
In 2021, facing the severe and complex macroeconomic situation such as high raw material cost and repeatedand changeable COVID-19 pandemic situation, the Company adhered to independent innovation, accelerateddiversified layout, strengthened e-commerce operation, implemented the explosion strategy, and made newbreakthroughs one after another on the road of high quality development. 1In 2020, the Company achieved thetotal operating revenue of RMB 189.654 billion, an increase of 11.24% year on year, and a net profit attributableto the parent company of RMB 23.064 billion, an increase of 4.01% year on year.(I) Center on users, continuously provide users with innovative products
(1) Residential air conditioner sector
Gree insists on centering on user needs for development of new products, creates high-quality airconditioners with "ten-year" free repair and fully considers new needs of users, and has successively arranged anddeveloped five series of new products, including Flagship, Fresh Air, Formaldehyde removal, Wisdom Wind andQingxiang series, and carried out technological innovation and upgrading around the three aspects of "comfort,health and intelligence". In terms of comfort, Wisdom Wind air conditioner for the aged, the first in the industry toserve the "silver haired group", is equipped with "constant temperature defrosting technology", which can realizedefrosting without sudden cooling and continuous heating for 10 hours, greatly improving indoor thermal comfort.In terms of health, Real Purify formaldehyde removal air conditioner has been launched, the formaldehyderemoval grade reaches the national standard C4 grade, the depth of formaldehyde removal reaches 0.01 mg/m?,which is 10 times the national standard requirements. In terms of intelligence, a new generation of Gree PaintingSeries integrating air conditioning, voice control, entertainment and art appreciation has been launched.
In addition, the Company has launched a new Charmo split unit, and the final assembly automation rate wasincreased by 40% with structural innovation and design; the Company has also launched a new generation ofcharacteristic Clvia unit, which combines AI intelligent algorithm with frequency conversion controller to saveenergy by 15%, it also has a variety of humidity control schemes such as automatic comfortable dehumidification
and humidity control, so as to meet the various needs of different customers in different environments.
(2) HVAC equipment sector
By 2021, Gree has 13 categories of HVAC products, which can meet the customized needs of customers indifferent occasions.
Screw chiller and centrifugal chiller sector. Gree has launched a new generation of high-efficiency supermagnetic inverter screw chiller with high-efficiency falling film evaporator and COP of more than 7.0; highefficiency dynamic air suspension centrifugal chiller with bearing suspended for 2 seconds; CVE-Plus ultra-highenergy efficiency series frequency conversion unit with double primary energy efficiency of the whole series ofunits, modular designed screw chillers and other products.
Household central air conditioner and duct type air conditioner sector. Gree household central airconditioner has expanded from single product sales to smart and comfortable home system integration. Greelaunched a new generation of Yiju home central air conditioner with a shell volume reduction of about 20%, hightemperature self-cleaning, motion sensing control and other new functions; Zunshu household central airconditioner with free combination of five functional modules and ready-to-use feature; Yuxiang and Jingxiangseries air-conditioning and floor-heating household central air conditioner that accurately adjust the floor heatingtemperature. In terms of air duct type air conditioners, C3 and D3 series VRV are arranged with new addedfunctions such as self-cleaning, dust removal and sterilization, temperature and humidity correction, etc.
Commercial VRF sector. Gree launched the "artificial intelligence VRF" with large capacity of 40HP persingle unit, the VRF indoor unit has a newly laid self-cleaning function, which can be used with VRV fresh airunit. It also launched an "intelligent air conditioning management system" integrating remote management andhousehold billing functions.
Special refrigeration equipment sector. Gree has newly developed high-efficiency heat exchange andrefrigeration equipment for mines, which has overcome a series of problems such as air shortage, water shortage,electricity shortage, high temperature, high humidity, and explosion hazard; Gree intelligent cold source groupcontrol system integrating ice storage, magnetic bearing, inverter and other high-efficiency, energy-savingtechnologies and optimized control strategies; special constant temperature and humidity unit for libraries that canrealize accurate regulation and control (T±0.5°C, RH±3%) and has an absolute moisture content as low as 5.8g/kg.In terms of precision air conditioning products, JKF series air-cooled close control air conditioner with modularand flexible combination, high-efficiency integrated outdoor cabinet air conditioner for 5G communication, andvariable-frequency inter column air conditioner for micro module data center has been launched. In terms ofproducts used for freezing and refrigeration, an integrated intelligent hot fluorine defrosting refrigeration unit hasbeen launched, with high defrosting efficiency, short defrosting time, and energy saving of about 36%, and a splitvertical air curtain cabinet has also been launched to improve the refrigeration equipment of retail terminals.
Heat pump water heater sector. Gree has newly developed F-series household heating and coolingintegrated unit, which meets the primary energy efficiency standard of low-temperature heat pump; has launchedShuzun ultra-high temperature air source water heater with the highest water temperature in the industry (90°C),which can meet the bathing needs of about 11 people at the same time.
In addition, the Company has also launched "elevator air conditioner" with efficient sterilization and dustremoval function, wall mounted fresh air unit and engineering fresh air unit. From high-quality energy-savingproducts to later maintenance and management, Gree has created a set of comprehensive and perfect central
air-conditioning solutions for customers, assisting the new development concept of "carbon peaking and carbonneutrality" with core technology, and opening up a new path of green energy-saving development.In 2021, the Company continued to explore the HVAC equipment market and created many model projects invarious fields. In the field of real estate, there were about 40 new and renewed customers in 2021, and the marketshare of refined decoration with air conditioners reached 16%, Gree launched the VIP service system mechanismfor exclusive real estate strategic customers; in the field of public buildings, it has successfully deliveredbenchmarking projects such as Museum of the Communist Party of China, National Speed Skating Oval andNational Aquatics Center, won the bid for the heating (cooling) project in Rongdong District of Xiongan NewArea, and participated in the brand shortlisting and strategic procurement of more than 10 large state-ownedconstruction units; in the field of data communication, it has won the bid for many projects such as centralizedpurchase of precision air conditioners and chillers of the three major telecom operators, as well as projects withnational influence such as Alibaba National Data Center, Huawei Chengdu Artificial Intelligence Big Data Centerand Beijing Changping Future Science Smart City Project; in the field of transportation facilities, it hascontinuously obtained airport, high-speed railway and subway projects in more than 34 cities such as Shanghai,Guangzhou, Shenzhen, Wuhan, Hangzhou, Chongqing, Xi'an, Changsha and Jinan; in the field of high-endmanufacturing and industry, it has newly developed leading customers in power, electronics, automobile, chemicalindustry, semiconductor, optoelectronics, intelligent terminals, new energy, medical devices and other industries,and successfully won the annual centralized procurement projects of multiple strategic customers; in the field ofclean energy, it has won the bid for Xinzhou coal-to-electricity project, with a bid amount of RMB 500 million,and has won the bid for photovoltaic air conditioning projects in many commercial squares, urban service centersand schools; in other fields, it has built a demonstration project of special unit for hospital cleaning, successfullywon the bid for a number of top 100 hospitals, international hotel groups and large commercial complex projects,and reached strategic cooperation with a number of large financial institutions and leading breeding enterprises.
(3) Home appliances sector
In order to improve the quality of life of users, the Company developed home appliances in the direction ofhealth, intelligence and personalized needs, further enriched the depth and width of our household applianceproduct line and formed a systematic layout at the same time.Environment appliances: The Company has created a variety of popular fans and launched new productssuch as Lasso air purifier, sweeping robot, desktop water dispenser, and folding baseboard heater. In terms of fans,FS-3015Bh7 series and FD-3515Bh7 series of floor fans adopt multi-concave wing blades and internal andexternal double spiral acceleration guard to achieve 44 m?/min large air volume and 8 m long-distance air supply,which is very cost-effective, and obtained an order of 3.7 million sets in the first year, ranking first in the industry.The production and sales volume of 4L tower cooling fan KS-04X60Dg series, with noise as low as 35 dB, 360m?/h large air volume, 7 m/s high wind speed, V-shaped wet curtain, and 600 ml/h large evaporation capacity, hasexceeded 1,000,000 sets, ranking first in the industry. Gree Lasso 520G air purifier can continuously decomposeformaldehyde into CO
and H
O at room temperature, with a decomposition rate of 99%, and formaldehyde CCMof more than 10000 mg, which is 6.6 times the highest level of the national standard. Desktop water dispenserRJY-T16-1X611B featured with 3-second fast heating, is provided with 3000 L long-life patented four-in-onecomposite filter element, intelligent double flushing mode, free combination of four cup sizes and sixtemperatures, as well as ultraviolet bacteriostatic action.
Kitchen appliances: In 2021, dozens of products were launched in five categories: range hood, stove, gaswater heater, steam oven and dishwasher. New products such as sparkling water maker, air fryer and health pot
were also launched, further enriching the kitchen appliance product line and forming a systematic layout at thesame time. Jinghuan series 302 dishwasher adopts fog free transparent cabinet door and touch color screen, withthe independently developed automatic dirt identification technology, it can realize intelligent washing, with asterilization rate of 99.99%; Gree X82 range hood, relying on the large air volume cleaning free technology, theair volume is increased by 18%, realizing high static pressure and 10-year cleaning free. The embedded steamoven uses the newly invented self-adaptive temperature control technology based on the temperaturecharacterization point to realize temperature control with an accuracy of 1°C, which can realize the simultaneoussteaming, baking and cooking of three dishes and rice at the same time; Gree gas water heater adopts three-stagecombustion technology to achieve accurate temperature control with a water temperature fluctuation of as low as±0.5°C, and keep the water temperature stable when the water pressure fluctuates, with a minimum power of aslow as 3.6 kW.
(4) Refrigerator and washing machine sector.
Refrigerator sector. Taking users as the center, Gree continues to innovate in preservation, sterilization,energy saving, intelligent interaction, etc., of refrigerators, and constantly enriches products with different doorsand different volume segments.In 2021, the product layout was improved, and the first Qiyu purple BCD-516WPQG refrigerator waslaunched in the cross door series, which is equipped with a brand-new "full-range fresh keeping" functionintegrating fruit and vegetable fresh keeping, meat fresh keeping, breast milk fresh keeping and sterilization anddeodorization. This function can reduce the loss of nutrients and vitamins in fruits and vegetables and delay thedeterioration of fruits and vegetables through cell micro dormancy and water moisturizing technology; 15 minutesquick deodorization to ensure the safety of food materials; precisely controlled constant temperature fresh keepingtechnology realizes the constant temperature field of 4°C for breast milk storage with a temperature fluctuation ofwithin 0.5°C, effectively ensuring the stability of breast milk components; at the same time, it is equipped withcore technologies such as -5°C cell-level freezing and -33°C deep freezing, which meet consumers' ultimatepursuit of health in the era of COVID-19 pandemic.For small families, the newly developed embedded BCD-320WPFCL French four-door refrigerator isequipped with five fresh-keeping modes of fruits and vegetables, zero degree, partial freezing, soft freezing andcool fresh (instant freezing), it also adopts efficient intelligent temperature control technology and consumes only
0.69 degrees of electricity per day.
Washing machine sector. In 2021, Gree launched the upgraded products of Ruxin series washing machine withclothes care function, which adopts differentiated technologies such as heat pump drying, drying without washing,and molecular level care, for high-end washer dryer market; it also launched Jingyue series equipped withpasteurization washing and high-temperature disinfection washing, which has met the demand of generation Zmarket with its extreme cost performance, improved the product layout of each array of our washing machine, andmade a breakthrough in the export market.
(5) Industrial product sector.
Gree's strong R&D and manufacturing capacity of core components of household appliances has laid a solidfoundation for the development of the Company. In 2021, the representative industrial products developed byGree R&D team are as follows:
A new generation of household VRF rotor compressor. Gree's technical team has developed a new
generation of household VRF rotor compressor through small-scale, high-efficiency and low-noise technology interms of motor and pump. Its size is reduced by 10%, the maximum energy efficiency is increased by 5%, and thenoise is reduced by more than 4 dB. The size of the compressor is the smallest in the industry. It has been massproduced and applied to Gree's small, efficient and silent household VRF products. The product technology hasapplied for 10 national invention patents and formed 4-6HP series products.
Commercial air conditioner VRF scroll compressor. Through technical breakthroughs in high-frequencylubrication, scroll profile and broadband motor, Gree's technical team not only ensures the capacity of thecompressor, but also improves the high-frequency operation reliability of the compressor and broadens themaximum operation frequency to 130 Hz. This series of scroll compressors have been mass produced and appliedto the fifth generation commercial VRF of Gree.Air-cooled magnetic bearing compressor. Gree's technical team realized the stable operation of theair-cooled magnetic bearing compressor with 35000 RPM on load, and the operation accuracy under all workingconditions was within 20 um, and output 1 SCI paper and 1 EI paper. Its successful development indicates thatGree has broken the monopoly of foreign enterprises on the air-cooled magnetic market and become the onlyenterprise in China with independent intellectual property rights of air-cooled magnetic centrifugal compressor.High-performance servo system. Gree's original high power density design technology of servo motoreffectively shortens the axial length of the motor, solves the problems of low power density, large volume andweight of servo motor, and promotes the miniaturization and weight reduction of robot to the greatest extent.The special servo driver for robot developed by Gree can synchronously and accurately control multiplemotors, which solves the industrial problems of robot servo driver, such as large volume, low performance, poorreliability, and complex installation. The robot with Gree servo system runs faster and has better reliability underthe same conditions.
Permanent magnet auxiliary synchronous reluctance motor. Compared with the asynchronous motor (IE2)with the same power, the volume of the motor is reduced by 50% and the loss is reduced by 60%, reaching the IE5ultra-high energy efficiency level, with significant energy-saving effect, and the rotation matrix coefficient is aslow as 5%. It has won the gold award at the International Exhibition of Inventions of Pittsburgh, and obtainedmore than 30 invention patent grants.
Supporting drive motor of air compressor. Gree's technical team has overcome the technical problems ofexcessive torque pulsation and large cantilever structure deflection under high speed. The motor has theadvantages of high transmission efficiency, compact structure, maintenance free, higher motor power density, lowvibration and low noise, and makes the whole air compressor reach the primary energy efficiency level. Gree hascompleted the development of four series products including 15-75kW, which can meet the needs of a full rangeof products for high-end customers. At present, Gree has reached strategic cooperation with domestic front-line aircompressor enterprises.
In addition, the top mounted integrated parking air conditioner developed by Gree adopts intelligent fullvariable frequency control, which has the characteristics of strong refrigeration performance, humanized operation,high safety protection degree and easy installation, and it has occupied the market rapidly since its launch; largeand small volume cycling compressor using Gree's unique technology can solve the problem of frequent start-stopof household VRF at low load, which has been mass produced and applied; the special compressor for dryer hasovercome the problem of shutdown in low-frequency operation under steam care mode, and has realized massproduction and application; the electric drive system for special logistics vehicle and the five-in-one controller for
new energy commercial bus have been successfully mass produced; Gree has made technological breakthroughsin multi-axis integrated linear servo system, precision harmonic reducer, robot motion control system for machinetools.(II) Adhere to independent innovation, constantly make breakthrough in world-leading technologies.Major scientific research achievements emerge one after another. In 2021, Gree achieved a series of newtechnological achievements through continuous breakthroughs and overcoming of difficulties by R&D personnel.According to the appraisal of authorities, Gree has added 4 world-leading technologies, namely "high efficiencycatalytic aldehyde removal technology at room temperature and its application in air purifiers", "air source heatpump continuous heating efficient hot gas defrosting technology", "research and application of key technologiesof home appliances" and "research and application of key technologies of high safety and large energy storagesystems". So far, Gree has a total of 35 world-leading technologies.
In 2021, Gree won 10 important scientific and technological awards, including 5 first prizes at provincial andministerial level. Among them, the air source heat pump high efficiency heating key technology andindustrialization project won the first prize of Guangdong Scientific and Technological Progress Award in 2021. Inthis project, Gree has overcome the industrial problems of discontinuous low-temperature heating, low defrostingefficiency and poor defrosting comfort in winter. The overall technology has reached the "international leading"level after being identified by China Light Industry Council and other organizations. The project achievementshave been applied and popularized in many "coal-to-electricity" projects in China, and awarded the title of "bestpractice case of energy conservation in rural buildings in China". At the same time, they have been applied to the"application and demonstration of low temperature air source heat pump heating in Mongolia" project, which haspromoted China's efficient heating technology to the world and showed China's strength.In 2021, Gree's "zero carbon source" air conditioning technology won the highest award in the "GlobalCooling Prize". This technology integrates advanced technologies such as vapor-compression refrigeration,photovoltaic direct drive, evaporative cooling and mechanical ventilation. It can make efficient use of solar energyand natural cold sources (air and water), and intelligently select one or more of the three modes of vaporcompression refrigeration, evaporative cooling and ventilation according to outdoor meteorological conditions, soas to provide a more energy-saving and comfortable air conditioning scheme for the room. Combined with the useof environmentally friendly refrigerants, the impact of residential air conditioner power consumption andrefrigerant emission on the climate can be greatly reduced. After the popularization of Gree's "zero carbon source"air conditioning technology, it will help the global refrigeration industry realize carbon neutrality in advance.Actively lead or participate in standard formulation. In June 2021, the first batch of national consumergoods standardization pilot projects successfully passed the national acceptance, indicating that Gree, as a leadingenterprise in the manufacturing industry, has been recognized by authority in the field of standardizationconstruction. In October 2021, Gree, as the leader unit, led the establishment of a national DC controller standardworking group to filled in gaps of DC controller standards and assisted the development of DC appliances inChina. In 2021, Gree was listed in 2021 National Enterprise Standard "Leader" with 19 product categoriesincluding air conditioner, refrigerator, washing machine, rice cooker, air purifier, electric fan and water purifier,etc., more than 300 product models, and 24 standards, and it is the enterprise with the most products included inthe list in the household appliance industry, boosting the high-quality development of products.
In terms of international standards, in June 2021, Gree took the lead in establishing the IEEE PES DC PowerSystem Technical Committee (China) Low Voltage DC Technology Subcommittee, assisting the development of
China's low voltage DC power system. In December 2021, the photovoltaic international standard proposal IECTS 63349-2 Photovoltaic Direct-Driven Appliance Controllers - Part 2: Operation Modes and Graphic Display,led by Gree, was approved and released in IEC/TC82, filling in gaps in the international standard of photovoltaicdirect-driven appliance controller industry and providing the basis for the design, testing and certification ofphotovoltaic direct-driven appliance. In 2021, Gree participated in the formulation of three ISO heat pumpinternational standards, which were affirmed by ISO refrigeration and Air Conditioning Committee and officiallyreleased.Strengthen the protection and application of intellectual property rights. The total number of patent appliedby Gree at home and abroad was 13,849 in 2021, including 8,214 invention patents; the number of invention patent grants was 3,128,including 3,008 domestic invention patent grants, and Gree was the only household appliance enterprise that has entered China's topten household appliance enterprises in terms of quantity of invention patent grants for 6 consecutive years. In 2021, Gree again wonmajor invention awards at home and abroad: Gree won Chinese patent awards, including 1 gold award, 1 silver award and 17excellence awards, ranking first in terms of the total number of awards, and won the first gold in the invention patent of the centralair conditioning industry; won 2 patent gold awards in provincial level; at the International Exhibition of Inventions of Geneva andNuremberg, Gree won 6 gold awards and 2 silver awards, once again demonstrating the power of Gree in creation to the world.Continuously improve the capability of product design. Gree continued to increase its investment in theR&D of new products in new areas, made breakthrough progress in the product series design, CMF planning anddesing, user experience and UI design with product series design and sub-appearance design as the core. Adheringto the principle of concentration and diversified development, it promoted the development of original products,and made outstanding achievements in the field of industrial design. Gree received 15 awards of three majorInternational Design Awards (3 IF Product Design Awards in Germany, 2 Red Dot Awards in Germany, 8 IDEAAwards in the United States, and 2 Good Design Awards (G-Mark) in Japan), and 8 Canton Fair Design Awards.(III) Implement the perfect quality assurance mode and put forward the "ten-year free repair policy" forresidential air conditionerTo meet the consumers' requirement for pursuing a high quality life, Gree has been committed to providinghigh quality products. The quality level of Gree's products has been steadily improved by strengthening theinternal quality control, and the after-sale failure rate has been declining for many consecutive years. In March2021, Gree put forward the "ten-year free repair policy" for residential air conditioners, which led the progress ofdomestic air conditioning service standards and reflected the strength of Gree's air conditioning product qualityand after-sales service beyond national standards. In the China Customer Satisfaction Index (C-CSI) issued byChina National Institute of Standardization, Gree ranked first in the category of air conditioners, and has toppedthe list for 11 consecutive years.In terms of quality management and control, Gree continued to fully implement the PQAM perfect qualityassurance mode and vigorously promote zero defect management in all links of the product life cycle. In 2021, inthe 46th International Convention on Quality Control Circles (ICQCC) competition known as "quality Olympics",the representative team of Gree's representative team won the highest award - Excellence Award, showing theworld the excellent quality management strength of Gree.Gree also improved product quality through digital detection technology. In 2021, Gree's "Research andApplication of Key Technologies for Quality Improvement of Household Appliance Products based on DigitalTwins" Project won the first prize of Quality Technology Award of China Association for Quality.Recently, The Air Disinfection and Purification Solution Based on CKER System and its Application of Gree
won the Quality Innovation Award, which is the best achievement of the current Chinese delegation. As a qualitybenchmark of Chinese enterprises, Gree once again demonstrated the strength of Made-in-China products to theworld.(IV) Accelerate the industry layout and the diversified pattern is gradually emerging
(1) Intelligent equipment sector
Zhuhai Gree Intelligent Equipment Co., Ltd. is an intelligent equipment enterprise integrating R&D,production, sales and service, possessing 15 R&D units, 7 technical service centers and more than 600technicians.Under the general trend of transformation and upgrading from "traditional manufacturing" to "intelligentmanufacturing", Gree has seized the opportunity by making continuous efforts in the front-end cores of theindustrial chain, and has made successive breakthroughs in key technologies such as high-performance servosystems, direct-drive electric spindles, linear motors, reducers, controllers and drive-control integration, whichhave boosted the improvement of core competitiveness in domestic robots and CNC machine tools. At the sametime, it has also made breakthroughs in heavy-duty and highly rigid robot technology, intelligent logistics coretechnology, product defect visual inspection and other key technologies.Gree has been attaching great importance to the development and accumulation of independent technology,and has applied for more than 3,180 patents at this stage, in which there are 2,143 invention patents, and itpossesses 1,294 authorized patents, and won one gold medal at the Geneva International Invention Exhibition in2021. By means of its excellent R&D and manufacturing capability, Zhuhai Gree Intelligent Equipment Co., Ltd.was awarded such honors as Guangdong Top 500 Manufacturing Enterprise No.247, Guangdong Industrial RobotBackbone Enterprise, Guangdong Artificial Intelligence Cultivation Enterprise, and Guangdong IntelligentManufacturing Ecological Partner.Gree Intelligent Equipment focuses on four series of products: CNC machine tools, industrial robots,intelligent warehousing and logistics, and factory automation, and provides intelligent equipment for manyleading enterprises in the industry at home and abroad, boosting them to upgrade their automation.In terms of CNC machine tools, it has optimized and upgraded the existing products, expanded the marketscale in 5G communication, machinery manufacturing and medical treatment fields, focusing on machine toolsthat process structural parts of high speed, high torque electric spindle, linear motor, high-speed movement andhigh acceleration for new energy vehicles, as well as providing one-stop solutions for global leading enterprises ofnew energy vehicle manufacturing in cooperation with renowned parts manufacturing enterprises.In terms of intelligent warehousing and logistics, Gree Intelligent Equipment, based on the technical planningroute, has set up demonstration projects of intelligent logistics three-dimensional warehouse in the headenterprises of electric power, machinery manufacturing, food cold chain, auto parts and other industries in Chinaand overseas markets, and made project breakthroughs in new fields such as rubber tires, book publishing andbeauty makeup manufacturing.In terms of industrial robot and automation solutions, Gree Intelligent Equipment, based on the rich projectexperience and application cases accumulated in the manufacturing fields of electric motor, small householdappliance, stamping, machining, etc., has continuously explored external markets. At the same time, it hasexpanded application scenarios by timely entering the emerging markets or subdivided fields such as photovoltaicand wood industry, and as of now, it has provided robot and automation solutions for many famous enterprises,
which boosted these enterprises to upgrade their intelligent manufacturing.
(2) Precision mold sector
Mold is known as the "mother of industry", and the level of its technology is one of the important symbols tomeasure the level of a country's manufacturing industry.
Gree Precision Mold Co., Ltd adheres to the strategy of "Refinement, Standardization, Specialization andProductization" and continues to make efforts in the fields of molds for intelligent household appliances, motors,automobiles, medical care, office supplies and new energy components. Now it possesses 4 R&D platforms, 1national-level skilled master studio, 1 municipal-level skilled master studio, 1 municipal-level skill workstation, 5manufacturing plants and 12 technical manufacturing service centers, with over 500 technicians.
Gree Precision Mold Co., Ltd attaches importance to the research and development of cutting-edgetechnology and new fields. By 2021, Gree Precision Mold Co., Ltd has applied for 492 patents and obtained 344authorized patents. It has independently developed core technologies such as 0.001 mm grade mold high-precisionprocessing technology, near zero degree deformation molding technology, high brightness appearance moldingtechnology, imitation plating mold technology, and zero defect appearance mold technology.
The mold company began to face the external market since 2016, dedicated to the production andmanufacturing of precision molds, and now it possesses 1,200 sets of international leading precision processingequipment, and has mastered five major technologies, namely 3D printing, flash powder + high-gloss injectionmolding, RHCM molding technology, two/three color molding technology, optical imitation plating technology,mainly serving customers in the specialized fields of automotive exterior and lights, consumer electronics, smarthousehold appliances, motor high impact, multi-cavity precision, and biodegradation.
(3) Photovoltaic (storage) air conditioning sector
The business scope of Gree Photovoltaic (Storage) Air Conditioning with Zero Carbon Source includesphotovoltaic (storage) DC air conditioning system, new energy DC appliance, energy storage and near-user sideenergy Internet system, etc.
In 2021, Gree photovoltaic (storage) air conditioning system successively won bids for significant projectssuch as Xiong'an New Area Investment Service Center in Hebei, Caidian City Service Center in Wuhan, JiuliCenter HVAC Station in Jiangsu, and Huijin Commercial Center, etc. The low-carbon technology products andsystem solutions launched by Gree Electric Appliances were highly praised by partners and welcomed by themarket.
In 2021, it implemented 13 model projects and order projects. Suzhou Tonglihujiayuan passive building isthe first passive house project in China, which realizes zero energy consumption by self-generation of electricity,and also has passive energy storage, room temperature regulation and smart voice control of home appliances, etc.The project has been certified by both the Science and Technology Development Center of the Ministry ofHousing and Construction of China and the German Energy Agency. Shenzhen Longgang International LowCarbon City PV Future House Project is a PEDF benchmark that integrates PV power generation, energy storage,DC power distribution and flexible power consumption. In October 2021, the Hangzhou Asian Games low-carbonhydrogen-electricity coupling application demonstration project, which is the first "zero-carbon" green parkintegrating flexible DC, hydrogen-electricity coupling and multi-energy complementarity in China, was officiallylaunched by Gree Electric Appliances and State Grid Hangzhou Electric Power Supply Company. The companyhas been working with partners to carry out new energy DC application demonstrations and pilots, and promoting
the research and promotion of new zero-carbon DC technologies, including the Xiong’an New AreaDianshangfeicui (Wangjiazhai) DC demonstration project, the first multi-station low-voltage DC distributionnetwork demonstration project in Zhejiang, and the fine grid DC smart house project in Weihai, Shandongprovince, etc.. The company is dedicated to achieving carbon peaking and carbon neutrality goals together withpartners in the power and construction industries.In terms of platform construction, the company took the lead in establishing Guochuang Energy InternetInnovation Center (Guangdong) Limited, initiated and hosted the Guangdong Distributed Energy InternetInnovation and Application Alliance and constructed the Guangdong Energy Internet Innovation Center, andsuccessfully held the inaugural meeting of IEEE PES DC Power System Technical Committee (China) LowVoltage DC Sub-Committee with ecological partners, and served as the chairman, showing the company'smilestone role in promoting the rapid and healthy development of China's new energy low-voltage DC technology,which is of milestone significance to promote the rapid and healthy development of new energy low-voltage DCtechnology in China and the construction of international standards in the related fields of zero-carbon DC.In terms of new products and technologies, in 2021, Gree launched a new generation of photovoltaic (storage)DC inverter VRF unit system, household and commercial-grade energy internet storage system, HIEMS energyinternet home/community system, FIEMS energy internet factory/park system, etc. Gree Electric Appliances alsoparticipated in the Energy Foundation's research project "China PEDF Building Research Project" led by TsinghuaUniversity to establish the key technical framework for DC building appliances in collaboration with partners,which promoted the development of new energy DC appliances.In terms of the honor won in photovoltaic(storage) air conditioning with zero-carbon source system, theGree-Tsinghua University joint team won the Global Cooling Prize in April 2021, which marked another coretechnological breakthrough in the field of zero-carbon air conditioning technology and provided innovativeChinese solutions to achieve China's "double carbon" strategic goals and address global climate challenges.
Gree G-FIEMS Energy Internet Factory System was successfully selected as a pilot demonstration ofIndustrial Internet Platform + Green Low Carbon Solution in 2021 by the Ministry of Industry and InformationTechnology; Changsha Gree was listed in the sixth batch of "Electricity Demand Side ManagementDemonstration Enterprise" in the industrial field by the Ministry of Industry and Information Technology in 2021.Its plant-level IEMS system solution, which integrates PV, energy storage and energy management, enables asignificant reduction in plant energy consumption and is a successful practice of the Energy Internet Factory. GreeEnergy Environment Technology Co., Ltd was awarded "2021 Best Energy Storage Technology Innovation Awardof China Energy Storage Industry" by China International Energy Storage Conference and "2021 Best EnergyStorage Frequency Modulation Auxiliary Service Project" by EESA.
(4) New energy vehicle and lithium battery sector
With the long-term in-depth layout of the new energy sector, and in the context of accelerating the realization"double carbon" goals, Gree further perfected the layout of new energy industry by acquiring Gree Altairnano in2021, thus adding lithium-ion batteries, new energy commercial vehicles, special vehicles and other businessfields, and build an integrated industry chain covering lithium battery materials, lithium batteries, modules/PACK,new energy vehicle core components and downstream new energy vehicles, industrial and commercial energystorage, photovoltaic (storage) air conditioning and energy internet system. The combination of Gree Altairnano’score technologies such as battery and Gree’s multi-dimensional low-carbon technologies such as "Zero CarbonSource" is conducive to increasing the speed of green change in production and lifestyle and gives full play to the
overall resource advantages. At present, the business relationship between Gree and Gree Altairnano has beenrationalized and initial results have been achieved, including cooperation in the development of a number ofenergy storage system projects in high-altitude and ultra-low temperature areas, the introduction of each other'sadvantageous products, etc., and will continue to promote comprehensive integration and synergistic developmentin the future.Gree Altairnano has always been attaching great importance to the research and development andaccumulation of technology. As of 2021, the company has applied for 3,316 patents, of which 2,211 patents weregranted, covering lithium battery materials, electric vehicle powertrain, intelligent energy storage and other fields.New energy vehicle businessGree Altairnano’s new energy vehicle business covers a full range of products including buses, road buses,airport ferries, urban sanitation vehicles, logistics vehicles, cold chain vehicles, mining heavy trucks, nucleic acidtesting vehicles, forklifts, etc., which have been operating in more than 220 cities in China, including Beijing,Wuhan, Changsha, Qingdao, Hangzhou, Harbin and Haikou.Gree Altairnano’s commercial vehicle series products, including the only 18-meter dolphin bus in the newenergy vehicle industry that won the China Gold Award for appearance design, the first double-decker bus thatbecame the CCTV live broadcast vehicle after the official opening of the Hong Kong-Zhuhai-Macao Bridge, andthe microbus model that boosted the development of urban-rural integration. In 2021, as a new carrier of redculture to celebrate the centenary of the founding of the CPC, the antique lam lam bus and the opera face road busentered into Xiong’an New Area. Up to now, more than 8,000 buses equipped with Gree Altairnano batteries arein continuous operation in Beijing. As the only new energy bus supplier of Beijing's busiest bus line "Da 1 Road"via Chang'an Street and Tiananmen Square, in the past 7 years of operation of the Gree Altairnano buses, batterysafety problems have never occurred, and the power decay rate is less than 5%, and the battery capacity retentionrate is still more than 95%, which successfully solved the problem that new energy buses equipped withtraditional lithium battery packs faced that battery decay is so serious that all-day operation cannot be realized andthe cost of battery replacement needs to be increased.Gree Altairnano’s logistics vehicle series products, has served in Guizhou logistics park and other places toprovide distribution services for agricultural and sideline products, fresh food, household appliances, etc.; in 2021,Gree Altairnano was committed to developing a new generation of micro truck logistics vehicles, providing aneffective solution for the problem that small trucks have a small carrying capacity and large trucks are restricted.Gree Altairnano’s electric sanitation vehicle series products that are committed to creating efficient urbancleaning solution swith electric, intelligent, networked as the core, have served in Wuhan, Luoyang, Linyi andother places. In 2021, Gree Altairnano’s pure electric multi-functional dust suppression vehicle was awarded thetitle of "China Commercial Vehicle Excellence Product Award".In 2021, Gree Altairnano’s Airport Ferry received the "Aviation Ground Equipment Inspection Certificate"issued by the National Construction Machinery Quality Supervision and Inspection Center, becoming a specialvehicle for civil airports certified by the testing agency designated by the Civil Aviation Administration of China.At present, Gree Altairnano’s new energy vehicles have been operating in Beijing Capital International Airportand Daxing International Airport, Hangzhou Xiaoshan International Airport and so on, providing safe, fast andeconomic services for airport passenger transportation.Lithium battery business
The safety of Gree Altairnano’s batteries has been leading the industry for a long time, with thecharacteristics of high safety, large rate, fast charging and discharging, wide temperature range, long life, etc. In2021, the lithium titanate battery developed by Gree Altairnano was jointly selected by the Ministry of Industryand Information Technology and the China Federation of Industrial Economics as the "National ManufacturingSingle Champion Product".The company always puts battery safety first, and the developed lithium titanate battery has higher safetyperformance than conventional lithium-ion batteries: ① The nano-level lithium titanate material has higherpotential to lithium, which fundamentally eliminates the generation of lithium dendrites and reduces the risk ofinternal short circuit; almost no SEI film is generated due to the low reaction activity between lithium titanate andelectrolyte, and low thermal reaction start temperature and high reaction activation energy significantly improvethe stability and safety of the battery; ②The company's lithium titanate battery adopts innovative structuraldesign such as three-dimensional multi-channel fluid collection and self-constrained poles, which makes thelithium titanate battery present excellent safety and reliability. In addition to having passed the national mandatorysafety inspection standards for power batteries, the company's lithium titanate batteries have not been subjected tothermal runaway phenomena such as smoke, fire and explosion under destructive testing conditions such as fire,nail pricking in water, chainsaw cutting and electric drill impact.Except that, lithium titanate battery has the advantages of fast charging speed (up to 50℃ continuouscharging and discharging, supporting 70℃ pulse charging and discharging), excellent low temperatureperformance (with the ability to charge and discharge in the temperature range of -50~60℃), and long cycle life(can be used more than 40,000 cycles). The long cycle life of Gree Altairnano batteries can effectively alleviatethe ecological crisis brought by the "retirement wave" of new energy vehicle batteries.Taking a new energyvehicle life as 10 years, if the power battery is recycled after the vehicle ends its life, the Gree Altairnano batterycan also be used in major energy storage fields in a gradual manner.
Gree Altairnano's lithium titanate battery has achieved good results in the market by virtue of its superiorperformance, with representative projects including: ① provided batteries and integrated battery managementsystem services for electric vehicles of global famous transportation companies and port machinery companies,which are used in AGV intelligent equipment manufacturing enterprises, rail transportation equipment, automatedport terminals and other fields in Denmark, Switzerland, Czech Republic, Finland and other major countriesaround the world. ② the company has obtained large power battery export orders for light electric vehicles inIndia, creating a new industry of high-end light electric vehicle products in the Asia-Pacific region; ③ providedlithium titanate products for new application scenarios such as mobile energy storage on the power generation sidein Europe, large rate industrial energy storage for hydroelectric power generation and fast-charging publictransportation in the United Arab Emirates, with broad market prospects in the future.
Energy storage business
The "Research and Application of Key Technologies of High Safety and Large Energy Storage Systems"project, which is independently developed and implemented by Gree Altairnano, has reached the "world leading"level and has significant economic and social benefits, as assessed by authoritative institutions. Recently, theproject was awarded the 2021 Guangdong Science and Technology Progress Award and the First Prize ofGuangdong Machinery Industry Science and Technology Award, Gree Altairnano energy storage technology’sanother recognition by the authority.
Gree Altairnano battery energy storage system has expanded many projects by virtue of its high safety, low
temperature resistance, large rate, long life and so on, and has made significant breakthroughs in the market, withbenchmark projects including: ① successfully applied to the national photovoltaic and energy storagedemonstration experimental platform (Daqing base), which is the first photovoltaic energy storage demonstrationexperimental platform in China, promoting industrial technology progress, transformation of achievements andindustrial development; ② ultra-low temperature regional power plant frequency regulation project: jointlyparticipated in frequency regulation auxiliary services in coordination with thermal power generating units forUrad power plant in Inner Mongolia, improved the frequency regulation capacity in the power generation side andpromoted the safe and stable operation of the power grid; ③ high altitude ultra-low temperature regionalcommunications base station project: landed communications base station energy storage system in Sichuan Abaprefecture and other areas and provide a strong guarantee for the safe work and communications smoothness ofcommunications base stations with high security, long life, low temperature resistance and other properties; ④Gas station "photovoltaic storage" project: built photovoltaic storage integrated energy gas stations together withQinghai Province gas stations, which provided a strong guarantee for the safety of photovoltaic storage inultra-low temperature areas, and provided a green solution for the comprehensive energy transformation of gasstations.In 2021, Gree Altairnano won the awards of "Best Energy Storage Battery Supplier in China Industry" and"Best Integrated Photovoltaic (storage) and Charging Solution in China Energy Storage Industry" from ChinaInternational Energy Storage Conference.
(5) Renewable resources sector
Gree Electric Appliances actively practices the producer responsibility extension system and innovativelyproposes the circular development model of "green design-green manufacturing-green recycling" to ensure thegreen efficiency of the whole industrial chain. Starting from 2010, Gree Electric Appliances has established sixrecycling bases that mainly engage in the recycling of waste electrical and electronic products and end-of-lifevehicles, as well as the intensive processing of waste circuit boards and waste plastics, in Changsha, Zhengzhou,Shijiazhuang, Wuhu, Tianjin and Zhuhai. Through nearly ten years of rapid development, it has become a leadingenterprise in the industry, and now has the qualification capacity of dismantling 13 million units of usedhousehold appliances, 94,000 vehicles, 180,000 tons of recycled plastic processing capacity, and 60,000 tons ofwaste circuit board processing qualification capacity. 6.5 million sets of used household appliances wereprocessed in 2021.By the end of 2021, Gree Recycling Resources Company has processed more than 40 million units (sets) ofvarious types of waste electrical and electronic products and more than 70,000 tons of end-of-life vehicles, andhas transformed more than 600,000 tons of recycled copper, iron, aluminum and plastic. According to the relevantestimates, through Gree’s resource regeneration, extraction of crude oil resources was reduced by approximately
1.6 million tons, water was saved by approximately 3.9 million cubic meters, carbon emission was reduced byapproximately 2 million tons, which boosts the realization of carbon peak and carbon neutrality goal.
Since its establishment, Gree Recycling Resources Company has been awarded the titles of "The First PilotUnit of Extended Producer Responsibility for Electrical and Electronic Products", " 2025 China ManufacturingGreen Integrated System Pilot Unit", "Green Factory" and "2020 Green Manufacturing System Solution Provider" by the Ministry of Industry and Information Technology, and has participated in many national major R&Dprojects such as the National High Technology Research and Development Program (863 Program) and the"Major Solid Waste Special Project of the Ministry of Science and Technology".
(6) Semiconductor sector
Gree Electric Appliances has made significant progress in semiconductor research. In 2021, Gree'swholly-owned subsidiary Edgeless Integrated Circuit Co., Ltd. achieved over 50% growth in revenue andshipments of products exceeded 70 million units. Edgeless Integrated Circuit Co., Ltd. has been awarded"National High-tech Enterprise", "Key IC Design Enterprise Encouraged by the State", "Zhuhai Science andTechnology Small and Medium-sized Enterprise", etc., and relevant products have been evaluated as "GuangdongHigh-tech Product", "Zhuhai Innovative Product", "16th 'China Core' Excellent Product", etc. Gree ElectricAppliances and its subsidiaries have applied for a total of 719 semiconductor-related patents, including 292domestic patents and 71 international patents, and won the 22nd China Patent Excellence Award.Gree's semiconductor products mainly include industrial-grade 32-bit series MCUs, AIoT SoCs and powersemiconductors. Among them, the 32-bit MCU series have the advantages of high performance, high reliability,low power consumption, low cost, etc. and have achieved batch application in series of products such as home airconditioners, commercial VRF units, bus controllers, remote controls, etc., with the annual consumption over tenmillion; it can be widely used in consumer electronics, wearable devices, home products, health care support,commercial large units, industrial sensing, high-performance motor control, etc.Gree Smart Home series chip (AIoT SoC) combines high performance AI computing power and embeddedMCU, and provides intelligent control for image recognition, human-computer interaction, motor drive, securityencryption, etc. It has been applied in smart air conditioners and smart household appliances, and is provided withcomplete software and hardware solutions; it can be widely used in smart home, end-side AIot, smart home,industrial computing, industrial automation and other fields. As for power semiconductors, the development andmass production of IGBT, IPM and other series of products have been completed, which have been applied inbatch on inverter air conditioners; they can be widely used in household appliances, intelligent equipment, newenergy and other fields.
(7) Health care sector
Established in 2020, Gree Chengdu Xin Hui Medical Equipment Co., Ltd is a holding subsidiary of GreeElectric Appliances, that mainly engages in the research and development, production, sales, technical service andtechnical consultation of medical equipment and laboratory equipment.
In 2021, Gree Chengdu Xin Hui Medical Equipment Co., Ltd., in response to the severe anti-epidemicsituation at home and abroad, actively upgraded the mobile P2+ nucleic acid testing vehicle, which is upgraded to4th generation so far. The product adopts the fresh air conditioning system independently developed by Gree,which meets relevant standard requirements of PCR nucleic acid testing laboratory and secondary biosafetylaboratory. The daily testing volume is up to 20,000-60,000 (10/1 mixed sampling), and test result reports can beissued in 3 hours on average, which effectively relieves the pressure of nucleic acid testing at the outbreak site.Gree mobile P2+ nucleic acid testing vehicle has been used in the epidemic prevention and control work inShanghai, Hong Kong, Guangdong, Anhui, Hunan, Henan, Hebei, Shandong, Shanxi and Sichuan, etc. In 2021,Gree Chengdu Xin Hui Medical Equipment Co., Ltd. was awarded the title of "Advanced Group in Combating theCOVID-19 Epidemic".(V) Strengthen e-commerce operations and activate channel advantages
Gree's "New Retail" is based on 27 sales companies, more than 70 online dealer stores, more than 30,000offline stores and official flagship stores on third-party e-commerce platforms, and a two-line sales network
covering the whole country is established. Digital management from procurement, production, stocking,warehousing, logistics, inventory, sales is achieved through the use of big data, artificial intelligence and otheradvanced technology; reduce sales links, reduce the cost of sales, reshape the Gree ecological structure andecosystem through the upgrade and transformation of the production, distribution and sales process of goods, thusachieving a new model of online service, offline experience and deep integration of retail.Social e-commerce is growing rapidly and live-streaming e-commerce is becoming mainstream. In 2021,"Gree Dong Mingzhu's Store" live-streaming e-commerce ushered in the explosive development, andlive-streaming internet celebrity matrix with "Miss Dong" "Yu Tong" as the representative is formed hereafter. Inaddition, holding live-streaming events with CCTV expanded new media publicity channels, enriched the productlines of various categories of household appliances, and comprehensively laid out new energy-efficient products,and Gree's online sales have achieved rapid growth. In 2021, Gree Electric Appliances fan and air water heatersales boomed, and sales of new household appliances growed rapidly.In 2021, "Gree Dong Mingzhu's Store" was transformed into an open platform, and its brands, productcategories and business models were diversified by the means of investment promotion and multi-channelcooperation, which also drove the sales to grow. The platform showed a new development pattern of win-wincooperation.
Supply chain management and sales support. In 2021, the supply chain of Gree E-Commerce Company hasformed a warehouse network layout covering the whole country, with products of all categories stocked in thewhole network and orders automatically flowing to the nearest warehouse for delivery, which shortens thedelivery time to the maximum extent; at the same time, it promoted the digital transformation of the ordermanagement process, established a unified intelligent customer service platform, strengthened business riskmonitoring, identifies and handled business abnormalities in advance, and improved the level of financialinformationization and risk prevention. This series of measures effectively guaranteed the implementation ofGree's new retail model.
Gree's new retail will adhere to digital operation thinking to empower brand expansion; create an efficientand agile supply chain management system to realize make-to-order and gradually achieve the zero inventory goal;optimize and upgrade the intelligent customer service platform to improve customer satisfaction; and channel theflow from online to offline to make the channel burst out more powerful sales energy.(VI) Improve the competitiveness of export products and vigorously develop independent brands
In 2021, the global economy continued to recover thanks to the expansion of vaccination coverage forCOVID-19, enhanced outbreak prevention and control measures, and continued fiscal stimulus and monetaryeasing. Gree Electric Appliances continued to develop in overseas markets and made an eye-catching performancein emerging markets. In 2021, Gree products were sold to more than 180 countries and regions, of which 51%were independent brands, with sales increasing by 23% year-on-year.
In 2021, Gree won a number of large model projects, such as the 2022 Qatar World Cup Stadium and itsdormitory supporting projects, Indonesia's Samanea Commercial Complex, the Link Group's Hong KongShopping Center, Brazil's The Mall of St Paul, etc. The winning products covered centrifugal units, screw unitsand other large commercial products, blossoming in public facilities, industrial parks, commercial buildings andother fields, which established Gree's brand international image.
Green development with leading technology as a driving force. Under the double carbon goals, Gree actively
developed low carbon technologies, products and solutions, and practiced the global comprehensivecarbon-neutral action. In the commercial air conditioner field, Gree launched energy-efficient and environmentallyfriendly water heaters for the European market, as well as ultra-low temperature heat pump products and all DCinverter condensing units for the North American market to meet the diversified needs of overseas consumers. Inthe residential air conditioner field, Gree developed localized products to meet different consumer needs, such asthe Middle East high-temperature resistant air conditioners loaded with Gree's unique G-Boost compressortechnology, healthy air conditioners with multi-faceted cleanliness from the inside out, and intelligent productsthat integrate AI energy-saving technology and intelligent dehumidification.Actively develop online marketing and gradually resume offline promotion. Under the context that offlineactivities could not be fully carried out due to the impact of the epidemic, in 2021, the company increased theoperation of overseas online social media to disseminate the Gree brand concept through multiple channels; andaccelerated the construction of overseas e-commerce team to develop sales through e-commerce channels inseveral regions. With the increasing rate of vaccination and the gradual recovery of political and economicactivities in overseas markets, the company has gradually resumed participation in offline exhibitions, such as theWest Africa Refrigeration Exhibition, Taipei Electrical and Air Conditioning 3C AV Exhibition, GREENBUILDExhibition in the United States, China Consumer Products (Russia) Brand Exhibition, and the 130th Canton Fair.Adhering to the user-centered, enhance market service awareness. In 2021, the company launched Greeglobal technical support service system that provides one-stop service for product solutions and design ofengineering projects; upgraded after-sales technical service, built Gree global after-sales service center website,established Gree English website with brand as the core, all of which increased Gree’s brand internationalawareness.(VII) Building the Internet of Everything, Leading Smart and Healthy LifeIn 2021, Gree Smart Home insisted on independent innovation, independent research and development,independent manufacturing, and built a zero-carbon healthy home using core technologies. On the basis ofcontinuously upgrading the five intelligent living systems of whole-house energy, air, health, security and light,Gree developed personalized spatial intelligent solutions for different living spaces such as home living rooms,bedrooms and kitchens, creating a green, efficient, convenient and safe home everything connected space.In terms of intelligent products, in 2021, Gree Electric Appliances launched a new set of householdappliances such as "Gree Mingzhu", with multi-scenario (kitchen, bedroom, living room, bathroom, etc.) andmulti-dimensional (pace, equipment and time) intelligent scenario management functions, creating an overallsolution for intelligent life for consumers; meanwhile, Gree also a variety of intelligent products for differentspecific application scenarios: in smart living room scenario, it launched the "Painting Series" wall-mounted airconditioner that integrates intelligent home central control, audio and video entertainment, air conditioning andartistic painting screen; intelligent cleaning, it launched the new Ground Gravity sweeper robot equipped withbuilt-in new generation LDS LIDAR navigation, DM mopping-specific algorithm and self-developed controlsystem; in intelligent security, it launched the GREE P2 Bluetooth fingerprint door lock, which is equipped withthe highest security level C-class lock core certified by the Ministry of Public Security, and high-precisionfingerprint recognition module; in intelligent health products, it launched the new formaldehyde air conditioner,two-way fresh air conditioner and formaldehyde air purifier; in intelligent control, it launched the second 5G cellphone independently developed by Gree, equipped with the independently developed Halo UI 6.0 operatingsystem, linkable to Gree smart home devices. The launch of Gree series of intelligent health products creates ahigh quality of life for consumers.
In terms of intelligent health technology, Gree has achieved breakthroughs in AI comfort and energy savingalgorithm (G-Learning) and sleep detection technology. G-Learning energy-saving algorithm research uses Gree'sown AI chip and it can actively optimize air conditioner operation control parameters according to room size,environmental changes and other factors, which has been proven to achieve a comprehensive energy saving of15%. This study was awarded the world's first AI energy efficiency certificate by the international certificationbody INTERTEK. Through PVDF piezoelectric sensing technology, Gree sleep detector can detect physiologicalelectrical signals during sleep across the mattress, achieving non-sensory detection, and through AI intelligentalgorithm, it can realize sleep staging (light sleep period, deep sleep period, REM period) and generate sleepreport, which is conducive to users' health management.In terms of market promotion, in 2021, the company landed Gree Zero Carbon Healthy Home in Beijing,Jiangxi, Changsha, Sichuan, Chongqing and other regions, which realized the intelligent emission reduction effectand created an energy-saving, environmentally friendly, comfortable and healthy smart home through sixtechnologies, five systems and space deployment; the company landed the overall solution for smart apartments inZhuhai, Wuhan and other regions, equipped with intelligent door locks and Gree rental management system thatincludes online informationization of check-in and check-out, alarm for abnormal security of residents, remotecontrol and management of apartment appliances, which reduces the operating cost of apartment propertymanagement and improves the living experience of residents.According to the "2021 Top 100 Global Smart Home Invention Patents" published by IPRdaily, Gree rankedsecond in the world, and its R&D strength in smart homes was once again recognized by professionals.(VIII) Accelerate the transformation and upgrading of intelligent manufacturing and provide customerswith intelligent factory system solutionsGree Electric Appliances promoted the construction of comprehensive digitalization, realized the dataoperation and platform operation of the whole value chain, focused on the development of big data, artificialintelligence and industrial applications, built a new ecology of the manufacturing industry, deeply integrated thenew generation of information technology with the industrial system in all aspects, built an industrial Internetplatform, and established a network foundation connecting machines, materials, people, control systems andinformation systems in all aspects. Through the comprehensive and deep perception of industrial data, real-timedynamic transmission and advanced modeling analysis, intelligent decision-making and control were formed,which drove the intelligent development of the whole enterprise and promoted the transformation of intelligentmanufacturing.In 2021, with the goal of "1 platform, 1 set of standard architecture and 18 domain systems", the companydeveloped a new generation of industrial Internet platform by coordinating the Group's IT construction resourcesand business control applications and utilizing advanced technologies such as industrial Internet, cloud-native,artificial intelligence and 5G, serving the digital transformation of the company. At the same time, the company'sprecipitation of software development achievements lied the foundation for the company's industrialinterconnection platform and industrial software development. Built Gree's independent and controllableinformation system to support the construction of the digital factory, realizing data-driven business, and escortingthe company to improve quality and increase efficiency and development.Build Gree Smart Factory. In 2021, the company actively built Gaolan Port "Lighthouse" demonstrationsmart factory and promoted the upgrade of smart manufacturing technology in the old factory, and the Zhuhaibase was recognized by the Ministry of Industry and Information Technology as a "pilot demonstration of
industrial internet platform + green low-carbon solutions". Chongqing base, Hangzhou base and Hefei base wererecognized as provincial "Smart Factory".Export smart factory system solution. In 2021, Gree's "IoT-based Smart Factory Platform Research andIndustrialization" project was selected in the category of IoT integrated innovation and integration application bythe Ministry of Industry and Information Technology, and the "Industrial Internet Platform for Industry ChainCollaboration Scenario in Household Appliance Industry" was selected as an industrial Internet benchmarkdemonstration project of Guangdong Province. In 2021, the company reached project cooperation with largeenterprises in the electronics, food and electromechanical industries to provide customers with smart factorysystem solutions based on intelligent logistics and information technology.
Cultivating industrial applications. The company carried out research and development of industrialtechnology software, cultivated high-quality industrial APPs, designed informatization hardware products,systematically guided enterprises in the industrial chain to accelerate business and equipment to apply cloud andpromote data interoperability and capability synergy among enterprises in the chain.
Construction of 5G network project. The first MEC edge cloud + smart manufacturing end-to-end 5G SAslicing network based on MEC was built in Gree headquarters park, which realized low latency, bandwidthguarantee and data security in 5G slicing + MEC network. The project not only met the needs of the company'sown industrial Internet, realized intelligent control, operation optimization and production organization changes,and promoted enterprise upgrading and transformation, but also the new model of enterprise-wide 5G networkdeployment architecture and network construction, operation and maintenance, and management hadcross-industry demonstration and promotion value.(IX) Optimize talent training mechanism and incentive system to boost the company to develop steadily
To promote the high-quality development, the company built its own training system, constructed adiversified independent training mechanism, accelerated the construction of Gree Vocational College, andincreased the training of innovative talents in 2021.
Increase the independent training of innovative talents. According to the growth path of technical R&Dpersonnel, the company set up multi-level and multi-dimensional training programs and courses, implemented thespecial technical training in the manufacturing industry, and promoted employees to develop towards specializedtalents in high, precise and sharp fields; the company made full use of the advantages of resources such asGuangdong technicians, skilled master studios and technician workstations, and selected and cultivated a numberof "high and precise" skill talents through a series of initiatives such as skill training, skill competitions and skilllevel assessment; comprehensively deepened and promoted the whole staff learning and development plan andformulated thematic training programs at all levels. In 2021, the total number of special training sessions at alllevels was over 20,000, with about 1.2 million participants.
Deepen the company's core business support. Closely following the company's new retail marketing modeland around the global sales market support, continuously innovated management, and improved after-sales skillsby combining training and management with skills and service, which effectively supported and promoted thefirst-line market service upgrade. In 2021, the company's training closely followed the company's large-scaleengineering sales and services, and completed special training support for significant projects such as metro andnuclear power with high quality; it carried out online training and technical consultation for overseas customersremotely, and completed 600 times of technical training in 30 countries in total; organized and carried out the firstcertification class for star service engineers, which established service benchmarks; organized and carried out
nationwide touring technical training camps, Gree after-sales elite classes, instructor certification and onlinespecial learning activities to improve the professional skills of after-sales personnel. In 2021, the after-salesservice completed 5,200 learning sessions and trained 480,000 people in total.Strengthening experience inheritance and cultural dissemination. Through the organization andimplementation of learning programs such as micro-classes for management cadres, lecture halls for technologyexperts, lecture halls for skilled craftsmen, and lecture halls for internal lecturers, the company realizedcomprehensive Gree experience inheritance and Gree culture dissemination. 2021 Organized approximately 90extraction activities throughout the year, with more than 4,000 participants. Up to now, the company has dug outand nurtured 200 group-level quality instructors and developed 800 quality courses.
Accelerate the construction of Gree Vocational College. The construction of Gree Vocational College campusofficially started in February 2021 and is scheduled to be completed in July 2022. The college upon completion,as a special private higher education institution, will face the national major development strategy and the demandfor talents in the Greater Bay Area. With majors docked with strategic emerging industries such as intelligentequipment, artificial intelligence, and the Internet of Things, the college will be built as a Chinese brand ofenterprise schooling with deep integration of industry and education and international characteristics. Over theyears, Gree has deepened the integration of industry and education, and won the 7th Huang Yanpei Award forOutstanding Contribution to Vocational Education for its advanced exploration and practice in school-enterprisecooperation, being the only enterprise unit to win the award.In 2021, in order to continuously improve employee satisfaction and happiness, the company implementedthe Employee Stock Ownership Plan, allowing employees to share more of the fruits of corporate development;adjusted the one- and two-day break work system to a two-day break work system, increased more than 20 days ofvacation throughout the year; obtained quality school places in Gree School for non-Zhuhai household registrationof employees' children, which effectively solved the employees' children's schooling problem and furtherenhanced employees' happiness and sense of corporate identity.
2. Revenue and cost
(1) Composition of operating revenue
Unit: Yuan
| 2021 | 2020 | Year-on-year increase/decrease | |||
| Amount | Proportion to the operating revenue | Amount | Proportion to the operating revenue | ||
| Total operating revenue | 187,868,874,892.71 | 100% | 168,199,204,404.53 | 100% | 11.69% |
| By industry | |||||
| Manufacturing industry | 144,840,537,601.90 | 77.10 | 130,427,766,473.54 | 77.54% | 11.05% |
| Other business | 43,028,337,290.81 | 22.90% | 37,771,437,930.99 | 22.46% | 13.92% |
| By product | |||||
| Air conditioner | 131,712,664,218.81 | 70.11% | 115,576,822,921.57 | 68.71% | 13.96% |
| 生活电器 | 4,881,607,693.72 | 2.60% | 4,521,756,518.81 | 2.69% | 7.96% |
| 工业制品 | 3,194,552,084.04 | 1.70% | 2,304,816,992.20 | 1.37% | 38.60% |
| 智能装备 | 857,741,120.95 | 0.46% | 600,778,785.76 | 0.36% | 42.77% |
| Green energy | 2,907,445,769.91 | 1.55% | 1,782,282,335.29 | 1.06% | 63.13% |
| Other main businesses | 1,286,526,714.47 | 0.68% | 5,641,308,919.91 | 3.35% | -77.19% |
| Other business | 43,028,337,290.81 | 22.90% | 37,771,437,930.99 | 22.46% | 13.92% |
| By region | |||||
| Domestic sale-main business | 122,305,111,567.10 | 65.10% | 110,407,002,220.87 | 65.64% | 10.78% |
| Export sales-main business | 22,535,426,034.80 | 12.00% | 20,020,764,252.67 | 11.90% | 12.56% |
| Other business | 43,028,337,290.81 | 22.90% | 37,771,437,930.99 | 22.46% | 13.92% |
(2) Industries, products and regions that account for more than 10% of the company's operating revenueor operating profit
√ Applicable □ Not applicable
Unit: Yuan
| Operating revenue | Operating costs | Gross margin | Increase or decrease in operating revenue over the same period of the previous year | Increase or decrease in operating costs over the same period of the previous year | Increase or decrease in gross profit margin over the same period of the previous year | |
| By industry | ||||||
| Manufacturing industry | 144,840,537,601.90 | 101,021,238,221.75 | 30.25% | 11.05% | 14.90% | -2.34% |
| Other business | 43,028,337,290.81 | 41,230,400,368.12 | 4.18% | 13.92% | 13.56% | 0.31% |
| By product | ||||||
| Air conditioner | 131,712,664,218.81 | 90,576,252,210.44 | 31.23% | 13.96% | 20.14% | -3.54% |
| Other business | 43,028,337,290.81 | 41,230,400,368.12 | 4.18% | 13.92% | 13.56% | 0.31% |
| By region | ||||||
| Domestic sale-main business | 122,305,111,567.10 | 80,703,210,957.38 | 34.01% | 10.78% | 14.75% | -2.29% |
| Export sales-main business | 22,535,426,034.80 | 20,318,027,264.37 | 9.84% | 12.56% | 15.50% | -2.29% |
| Other business | 43,028,337,290.81 | 41,230,400,368.12 | 4.18% | 13.92% | 13.56% | 0.31% |
In case the statistical caliber of the company's main business data is adjusted during the report period, the company's main businessdata 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 its revenue from labor services
√ Yes □ No
Description of a year-on-year change of 30% or more in relevant data
□ Applicable √ Not applicable
(4) Performance of significant sales contracts and significant purchase contracts entered into by theCompany as of the report period
□ Applicable √ Not applicable
(5) Composition of operating cost
Unit: Yuan
| Industry classification | Item | 2021 | 2020 | Year-on-year increase/decrea | ||
| Amount | Proportion to | Amount | Proportion to | |||
| operating cost | operating cost | se | ||||
| Household appliance manufacturing | Raw material | 86,226,905,186.28 | 88.27% | 75,879,070,146.39 | 86.90% | 13.64% |
| Labor costs | 4,402,642,502.15 | 4.51% | 4,261,563,030.87 | 4.88% | 3.31% | |
| Depreciation | 1,734,054,331.37 | 1.78% | 1,693,963,131.00 | 1.94% | 2.37% | |
| Energy | 708,881,983.14 | 0.73% | 779,821,409.66 | 0.89% | -9.10% |
(6) Whether there was a change in the scope of consolidation during the report period
√ Yes □ No
1. Business combinations not under common control
(1) Business combinations not under common control that occurred during the period
Unit: Yuan
| Name of the Purchased Party | Point of acquisition of equity | Equity acquisition cost | Equity acquisition proportion | Equity acquisition method | Acquisition date | Basis for determining the acquisition date | Operating revenue from the acquisition date to statement date | Net profit from the acquisition date to statement date |
| Gree Altairnano New Energy Inc. | October 31, 2021 | 1,828,275,113.56 | 30.47% | Purchase in cash | October 31, 2021 | Acquisition of control | 694,344,061.76 | -416,767,701.45 |
(2) Cost of business combination and goodwill
Unit: Yuan
| Cost of business combination | Amount |
| Cost of business combination | 1,828,275,113.56 |
| Less: fair value share of the identifiable net assets acquired | 1,215,497,529.64 |
| Amount of goodwill/combination cost less than the share of fair value of identifiable net asset acquired | 612,777,583.92 |
[Note 1] As described in Note 5.23 "Goodwill" to the financial statements, Gree Altairnano New Energybecame a subsidiary held by Company on October 31, 2021.[Note 2] As of the acquisition date October 31, 2021, the fair value of the identifiable net assets attributableto the owners of the parent company of Gree Altairnano New Energy was 1,215,497,529.64 yuan, and the fairvalue of the corresponding identifiable net assets was appraised by China United Assets Appraisal Group Limited,which issued appraisal report ZLPBZ [2022] No. 1362.The formed goodwill on the combination of Gree Altairnano is mainly due to the fact that the fair value shareof the identifiable net assets of Gree Altairnano acquired by the Company on the acquisition date is lower than thecombined cost. The asset valuation on the date of this purchase used the asset-based method, the value of thefuture business growth of Gree Altairnano could not be fully reflected due to the limitations of the valuation
method itself. At present, the business relationship between Gree Electric Appliances and Gree Altairnano hasbeen rationalized and preliminary results have been achieved. In the future, the company will continue to promotecomprehensive integration and synergistic development, grasp market and industry development opportunities,further enhance the comprehensive competitiveness and sustainable development capability of Gree Altairnanoand prevent goodwill impairment risk.
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: Yuan
| Item | Gree Altairnano New Energy Inc. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Assets: | ||
Monetary funds
| Monetary funds | 1,646,843,953.97 | 1,646,843,953.97 |
| Trading financial liabilities | 10,000.00 | 10,000.00 |
| Accounts receivable | 2,779,548,017.55 | 2,779,548,017.55 |
Advance payments
| Advance payments | 215,800,208.73 | 215,800,208.73 |
| Other receivables | 234,176,292.67 | 234,176,292.67 |
| Inventory | 2,135,766,221.72 | 2,135,766,221.72 |
Contract assets
| Contract assets | 996,806,636.13 | 996,806,636.13 |
| Non-current assets due within one year | 2,810,789.73 | 2,810,789.73 |
| Other current assets | 856,356,937.01 | 856,356,937.01 |
Long-term receivables
| Long-term receivables | 3,014,657.86 | 3,014,657.86 |
| Long-term equity investments | 390,685,789.09 | 535,849,709.81 |
| Other equity instruments investments | 2,170,000.00 | 2,170,000.00 |
Investment real estate
| Investment real estate | 30,434,649.00 | 6,404,970.97 |
| Fixed assets | 9,851,922,127.54 | 8,874,157,430.70 |
| Construction in progress | 2,341,162,945.24 | 2,301,429,874.64 |
Intangible assets
| Intangible assets | 3,078,130,531.23 | 2,103,825,250.26 |
| Long-term unamortized expenses | 18,801,886.89 | 18,801,886.89 |
| Deferred income tax assets | 1,906,423,128.64 | 1,906,423,128.64 |
Other non-current assets
| Other non-current assets | 277,326,714.43 | 277,326,714.43 |
| Subtotal of assets | 26,768,191,487.43 | 24,897,522,681.71 |
Liabilities:
| Liabilities: | ||
| Short-term borrowings | 2,202,310,244.21 | 2,202,310,244.21 |
| Notes payable | 1,382,825,460.48 | 1,382,825,460.48 |
Accounts payable
| Accounts payable | 4,860,305,562.25 | 4,860,305,562.25 |
| Contract liabilities | 5,024,137,616.68 | 5,024,137,616.68 |
| Employee pay payable | 49,442,281.69 | 49,442,281.69 |
Taxes and dues payable
| Taxes and dues payable | 46,366,595.59 | 46,366,595.59 |
| Other payables | 4,233,517,352.93 | 4,233,517,352.93 |
| Non-current liabilities due within one year | 98,518,621.44 | 98,518,621.44 |
| Other current liabilities | 2,088,457,921.70 | 2,088,457,921.70 |
Long-term borrowings
| Long-term borrowings | 850,000,000.00 | 850,000,000.00 |
| Long-term payables | 392,843,262.75 | 392,843,262.75 |
| Deferred Income | 1,186,062,239.50 | 1,186,062,239.50 |
Deferred income tax liabilities
| Deferred income tax liabilities | 13,873,952.69 | 13,873,952.69 |
| Subtotal of liabilities | 22,428,661,111.91 | 22,428,661,111.91 |
Net assets
| Net assets | 4,339,530,375.52 | 2,468,861,569.80 |
Before the acquisition date, affected by the corporate governance problems caused by the allegedmisappropriation of the interests of Gree Altairnano by the former controlling shareholder of Gree Altairnano,Gree Altairnano was restricted in the financing, resulting in production capacity not being fully unleashed and in acontinuous loss; after the listed company acquired the control of Gree Altairnano on the acquisition date, GreeAltairnano was managed in strict accordance with relevant laws and regulations and various corporate systems,and the annual auditing accountant, China Audit Union Power Certified Public Accountants Co., Ltd. (SpecialGeneral Partnership), adjusted the accounting policies of Gree Altairnano based on the operating conditions andprudent considerations and with reference to the standards of listed companies and made corresponding auditadjustments. The above situation had an impact on the purchase date book value of the net assets of GreeAltairnano.Gree is committed to building into a more competitive, diversified, technology-based global industrial groupwith a long-term, in-depth layout of the new energy sector. The company's participation in the judicial auction toacquire Gree Altairnano aims to combine the core technologies of Gree Altairnano batteries with the company's"zero carbon source" and other multi-dimensional low-carbon technologies to give full play to its overall resourceadvantages and further improve new energy industry layout. Up to now, the business relationship between GreeElectric Appliances and Gree Altairnano has been rationalized and preliminary results have been achieved, and thenumber of new energy vehicles being made by Gree Altairnano exceeded the level of the same period in 2020 and2021; lithium titanate battery achieved good results in overseas and domestic markets with its superiorperformance, and the relevant patent has recently been selected for the list of China Patent Award, being the onlylithium battery product in the new energy industry that won the gold medal. The performance and yield ofLiFePO4 products have also been greatly improved, and the production capacity will be unleashed gradually. Withthe gradual unleashing of production capacity and the recovery of profitability in the future, Gree Altairnano’svalue will also continue to increase.
(4) Gains or losses arising from the remeasurement of equity held before the purchase date at fair value
| Name of the Purchased Party | Book value of equity held before the acquisition date on the acquisition date | Fair value on the purchase date of share held before that date | Gains or losses on remeasurement of previously held equity interest to fair value before the acquisition date |
| Gree Altairnano New Energy Inc. | None | None | None |
(5) Methodology and key assumptions for determining fair value on the acquisition date
1. Valuation determination method: The assets and liabilities were mainly evaluated using the asset-basedmethod and the income method.
2. Key assumptions in the evaluation process.
A. The appraised entity is capable of making timely adjustments and innovations in line with the
development of the market and science and technology, while maintaining consistency in its business scope,business methods and management mode.B. Except for the fixed asset investments for which there is definite evidence of changes in productioncapacity after the benchmark date of the appraisal, the production capacity of the enterprise's products is estimatedbased on the status as of the benchmark date of the appraisal, assuming that the appraised entity will not make anysignificant fixed asset investment activities affecting its operation in the future revenue period;
C. Assuming that the appraised entity will maintain a similar turnover of accounts receivable and accountspayable in the future earnings period as in historical years, and that there will be no default in payment that ismaterially different from historical years;D. The assets and liabilities declared by the appraised entity are free from title disputes and other economicdisputes;
E. The appraised entity's future sources of funding and costs for R&D and production will not have amaterial adverse impact on the enterprise.
3. Reasons for asset appreciation：
A. Machinery and equipment: the market price of some equipment increased and the depreciable life of theenterprise's equipment was shorter than the economic life of the equipment;
B. Housings and buildings: there was a difference between the depreciable life and the actual economic life,and some buildings were built a long period of time ago, resulting in an increase in replacement costs (labor,materials, etc.);
C. Land use rights: the time when the enterprise acquired the land is far from the benchmark date of theevaluation and the price was low, and the land price increased between the acquisition date and the currentvaluation benchmark date.
2. Business combination under the same control
No.
3. Reverse purchase
No.
4. Disposal of subsidiaries
Unit: Yuan
| Company name | Equity disposal price | Equity disposal proportion (%) | Equity disposal method | Time point of losing control | Basis for determining the point at which control is lost | The difference between the disposal price and the share of the subsidiary's net assets in the consolidated financial statements corresponding to the disposal investment. | Proportion of remaining equity on the date of losing control (%) | Book value of remaining equity on the date of losing control | Fair value of remaining equity 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. | Amount of other comprehensive income related to equity investment of the original company transferred into investment profit and loss. |
| SL Group Jiangwan Rice | 255,00 | 2.00 | Sale | August, | Share Transfer Agreement | 215,501. | 49.00 | 1,145,00 | 1,145,00 | Book | None |
| Industry Co., Ltd | 0.00 | 2021 | 72 | 0.00 | 0.00 | value | ||||||
| SL Group Lianhe Ecology Farm Co., Ltd | 21,000.00 | 21.00 | Sale | August, 2021 | Share Transfer Agreement | -50,939.54 | 49.00 | Book value | None | |||
| SL Group Yuan Agriculture Co., Ltd | 40.00 | Sale | September, 2021 | Industrial and commercial change registration | 2,291.72 | 30.00 | Book value | None | ||||
| SL Group Lvzhiyuan Agriculture Co., Ltd | 40.00 | Sale | September, 2021 | Industrial and commercial change registration | 142,792.55 | 30.00 | Book value | None | ||||
| SL Group Dongwei Rice Industry Co., Ltd | 21.00 | Sale | September, 2021 | Industrial and commercial change registration | 92,134.32 | 30.00 | Book value | None | ||||
| SL(Ningbo) Grain Sales Co., Ltd | 100.00 | Sale | September, 2021 | Industrial and commercial change registration | 23,927.91 | Book value | None |
5. Change of combination scope for other reasons
(1) Newly established entities for the current period
Unit: Yuan
| Name | Date of establishment | Net assets at the end of the period | Net profit from the combination date to the end of the period |
| Zhuhai Gree Electormechanical Engineering (Linyi) Co., Ltd. | March 1, 2021 | 36,931,910.01 | 6,931,910.01 |
| Wuhu Gree Intelligent Logistics Co., Ltd | March 19, 2021 | ||
| Gree (Zhuhai Hengqin) GREE Development Co., Ltd. | April 25, 2021 | 998,450,036.83 | -1,549,963.17 |
| Gree Electric Appliances (Linyi) Co., Ltd. | May 6, 2021 | 194,574,519.31 | -5,425,480.69 |
| Jiangxi Jinrun Real Estate Co., Ltd | June 16, 2021 | 85,809,836.46 | -14,190,163.54 |
| Changsha Kinghome Electrics Co., Ltd | July 1, 2021 | 5,720,175.31 | -279,824.69 |
| Green Electricity New Material (Maanshan) Technology Co., Ltd. | September 7, 2021 | ||
| Wuhan Yuli Runzhu Real Estate Co., Ltd | September 26, 2021 | 6,723,663.82 | -276,336.18 |
| Huaxingaodao (Maanshan) Technology Co., Ltd. | October 15, 2021 | ||
| Zhuhai MinRoad Supply Chain Technology Co., Ltd | November 19, 2021 |
(2) Other decrease for the current period
In August 2021, the company cancelled its subsidiaries, SL Group Ermapao Eco-Farm Co., Ltd. and HandanYingDong New Energy Technology Co., Ltd.
(7) Major 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 (yuan) | 30,819,315,606.26 |
| Proportion of total sales amount of 5 top customers to the total annual sales | 16.25% |
| Proportion of sales amount of related party in the sales amount of 5 top customers to the total annual sales | 0.00% |
Information of top 5 customers
| Serial No. | Customer name | Amount of sales (yuan) | Proportion to total annual sales |
| 1 | First | 7,995,073,996.04 | 4.22% |
| 2 | Second | 6,174,062,804.40 | 3.26% |
| 3 | Third | 5,842,521,938.70 | 3.08% |
| 4 | Fourth | 5,698,659,582.61 | 3.00% |
| 5 | Fifth | 5,108,997,284.51 | 2.69% |
| Total | -- | 30,819,315,606.26 | 16.25% |
Other description of major customers
□ Applicable √ Not applicable
Main suppliers of the Company
| Total purchase amount of the top five suppliers (yuan) | 46,390,746,483.63 |
| Proportion of total purchase amount of 5 top customers to the total annual purchase | 35.07% |
Proportion of related parties' total purchase amount in the amount of purchase of top 5 suppliersto the total amount of annual purchase
Information about top 5 suppliers of the Company
0.00%
Serial No.
| Serial No. | Supplier name | Amount of purchase (yuan) | Proportion to the total annual purchase |
| 1 | First | 15,446,631,024.26 | 11.68% |
| 2 | Second | 8,632,767,550.14 | 6.53% |
| 3 | Third | 8,472,142,154.67 | 6.40% |
| 4 | Fourth | 7,132,269,860.53 | 5.39% |
| 5 | Fifth | 6,706,935,894.03 | 5.07% |
| Total | -- | 46,390,746,483.63 | 35.07% |
Other description of major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
| 2021 | 2020 | Year-on-year increase/decrease | |
| Sales expense | 11,581,735,617.31 | 13,043,241,798.27 | -11.21% |
| Administrative expense | 4,051,241,003.05 | 3,603,782,803.64 | 12.42% |
| Financial expense | -2,260,201,997.18 | -1,937,504,660.07 | -16.66% |
| Research and development expenses | 6,296,715,941.03 | 6,052,563,108.10 | 4.03% |
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 |
| Continuous heating high-efficiency hot gas defrosting technology | Improve customer thermal comfort and achieve energy-saving and emission-reducing operation | Completed, product is available on the market | Achieve defrosting without sudden cooling and continuous heating during defrosting | Improve the heating performance and thermal comfort of air source heat pumps, achieve green and low-carbon operation, while improving the quality of life of customers in winter heating. |
| Research and Application of New Generation Environmentally Friendly Refrigerant Air Duct Machine | Develop environmentally friendly refrigerant products to reduce environmental pollution and improve product performance | Completed, product is available on the market | Low GWP refrigerant application, achieve a variety of functions to improve the user experience through the application of a number of technology research. | Enhance market competitiveness |
| Research on key technologies for efficient washing and drying of clothes | Expand the product category and manufacture a series of new platform washing machines with large capacity and thin size in line with the market mainstream. | Completed | Improve the competitiveness of Gree washing machine market and meet the market demand. | Enhance market competitiveness |
| Research and application of high efficiency room temperature catalytic formaldehyde removal purifier | Achieve long-lasting green formaldehyde removal and enhance user comfort experience. | Completed, technology identified by academicians of Chinese Academy of Sciences and air purification industry experts, reaching "international Leading" level | 1. Green and environmental protection: remove indoor formaldehyde efficiently, and continuously decompose formaldehyde into CO2 and H2O. 2. Long-lasting aldehyde removal: purifier products’ formaldehyde CCM exceeds 6 times the highest level of national standards, extending the life of the filter; 3. Energy saving and environmental protection: the energy efficiency of the whole machine exceeds 30% of the national standards of energy efficiency; 4. Comfortable and quiet: noise at the highest gear as low as 63dB. 5. Technology reached "World Leading" level | Improve product performance, meet user needs, and increase product competitiveness. |
| Industrial permanent magnet assisted reluctance motor R&D | Provide new technology solutions for industrial motor efficiency | Completed R&D of standard products and realized the application in the general machinery | Leading technology, series products achieve IE5 high energy efficiency, while ensuring high cost performance | Enhance the company's technological level and market competitiveness in the industrial field through technological and product innovation in industrial motors. |
| Research on the key technology of PEDF zero-carbon building | Research on the key technology of PEDF zero carbon building | Completed | Combined the technologies of photovoltaic power generation, energy storage, and efficient and intelligent energy consumption for air conditioners, realized local consumption of photovoltaic power, peak-shaving and valley-filling, and off-grid operation of the system. The application of photovoltaic (storage) air conditioner can reduce or get rid of the dependence on the power grid, and it has excellent power regulation performance by double control and double reduction in terms of energy consumption and load. | Provide innovative products |
Company R&D personnel
| 2021 | 2020 | Change Ratio | |
| Number of R&D personnel (persons) | 14,233 | 14,458 | -1.56% |
| Proportion of number of R&D personnel | 17.38% | 17.22% | 0.16% |
| Academic structure of R&D personnel | -- | -- | -- |
| Bachelor | 8,610 | 9,310 | -7.52% |
| Master | 1,449 | 1,742 | -16.82% |
| Doctor | 34 | 41 | -17.07% |
| Age composition of R&D personnel | -- | -- | -- |
| Below 30 years old | 8,855 | 9,515 | -6.94% |
| 30~40 years old | 4,345 | 4,119 | 5.49% |
R&D investment of the Company
| 2021 | 2020 | Change Ratio |
| Investment amount in research and development (Yuan) | 6,528,680,941.53 | 6,213,796,926.90 | 5.07% |
| Proportion of investment in research and development to the operating revenue | 3.48% | 3.69% | -0.21% |
| Capitalization amount of research and development investment (yuan) | 231,965,000.50 | 161,233,818.80 | 43.87% |
| Proportion of capitalized research and development investment to research and development investment | 3.55% | 2.59% | 0.96% |
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 the previous year
□ Applicable √ Not applicable
Reasons for the large change of capitalization rate of R&D investment and its reasonableness
□ Applicable √ Not applicable
5. Cash flow
Unit: Yuan
| Item | 2021 | 2020 | Year-on-year increase/decrease |
| Subtotal of cash inflows from operating activities | 177,201,260,717.00 | 163,892,764,321.22 | 8.12% |
| Subtotal of cash outflows from operating activities | 175,306,897,458.28 | 144,654,127,012.06 | 21.19% |
| Net cash flows from operating activities | 1,894,363,258.72 | 19,238,637,309.16 | -90.15% |
| Subtotal of cash inflows from investment activities | 55,391,360,332.62 | 14,155,332,757.58 | 291.31% |
| Subtotal of cash outflows from investment activities | 25,639,376,773.27 | 14,057,602,607.40 | 82.39% |
| Net cash flows from investment activities | 29,751,983,559.35 | 97,730,150.18 | 30,342.99% |
| Subtotal of cash inflows from financing activities | 89,991,092,450.05 | 37,614,461,534.80 | 139.25% |
| Subtotal of cash outflows from financing activities | 115,321,676,340.53 | 58,725,959,033.00 | Translation |
| Net cash flow from financing activities | -25,330,583,890.48 | -21,111,497,498.20 | 19.98% -19.98 |
| Net increase in cash and cash equivalents | 5,726,694,119.85 | -2,147,522,183.34 | 366.67% Translation |
Description of the main factors affecting the significant year-on-year change in the relevant data
√ Applicable □ Not applicable
1. Net cash flow from operating activities decreased by 90.15% year-on-year, mainly due to the increase in net increase in cash paidfor goods and services purchased and loans and advances from customers.
2. Net cash flow from investing activities increased by 30,342.99% year-on-year, mainly due to the increase in other cash received inconnection with investing activities.Reasons for significant differences between net cash flow from operating activities and net profit for the year during the report period
□ Applicable √ Not applicable
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
| At the end of 2021 | At the beginning of 2021 | Proportion increase or decrease | |||
| Amount | Proportion to total assets | Amount | Proportion to total assets | ||
| Monetary funds | 116,939,298,776.87 | 36.59% | 136,413,143,859.81 | 48.85% | -12.26% |
| Accounts receivable | 13,840,898,802.76 | 4.33% | 8,738,230,905.44 | 3.13% | 1.20% |
| Contract assets | 1,151,228,472.63 | 0.36% | 78,545,525.60 | 0.03% | 0.33% |
| Inventory | 42,765,598,328.01 | 13.38% | 27,879,505,159.39 | 9.98% | 3.40% |
| Investment real estate | 454,854,822.63 | 0.14% | 463,420,861.39 | 0.17% | -0.03% |
| Long-term equity investments | 10,337,008,014.57 | 3.23% | 8,119,841,062.14 | 2.91% | 0.32% |
| Fixed assets | 31,188,726,142.99 | 9.76% | 18,990,525,087.94 | 6.80% | 2.96% |
| Construction in progress | 6,481,236,333.38 | 2.03% | 4,016,082,730.07 | 1.44% | 0.59% |
| Usufruct assets | 14,603,282.99 | 0.00% | 38,952,103.28 | 0.01% | -0.01% |
| Short-term borrowings | 27,617,920,548.11 | 8.64% | 20,304,384,742.34 | 7.27% | 1.37% |
| Contract liabilities | 15,505,499,178.75 | 4.85% | 11,678,180,424.65 | 4.18% | 0.67% |
| Long-term borrowings | 8,960,864,258.30 | 2.80% | 1,860,713,816.09 | 0.67% | 2.13% |
| Lease liabilities | 3,313,452.52 | 0.00% | 9,410,352.55 | 0.00% | 0.00% |
Overseas assets account for a relatively high proportion.
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount at the beginning of the period | Gains or losses on changes in fair value for the current period | Accumulated fair value changes included in equity | Impairment accrued for the current period | Purchase amount for the current period | Selling amount for the current period | Other changes | Amount at the end of the period |
| Financial liabilities | ||||||||
| 1. Trading financial liabilities (excluding derivative financial assets) | 370,820,500.00 | 631,554.78 | 660,611,937.82 | 1,032,063,992.60 | ||||
| 2. Derivative financial liabilities | 285,494,153.96 | -86,720,955.31 | 198,773,198.65 | |||||
| 3. Other debt investments | 502,202,293.17 | 9,239,147.26 | 14,006,555.87 | 5,210,000,000.00 | 5,910,056,891.62 | |||
| 4. Other equity instruments investments | 7,788,405,891.47 | 2,389,207,456.95 | 5,328,875,076.08 | 41,680,735.20 | 85,167,806.45 | 10,114,246,030.05 | ||
| 5. Receivable financing | 20,973,404,595.49 | -10,935,725.15 | -82,636,245.91 | 4,649,587,822.73 | 25,612,056,693.07 | |||
| 6. Other non-current financial liabilities | 2,003,483,333.33 | -3,174,005.94 | 81,000,000.00 | 2,000,000,000.00 | 81,309,327.39 | |||
| 7. Others | 44,822,900.00 | -447,304.28 | 30,939,495.72 | 12,160,000,000.00 | 12,376,325,374.41 | |||
| Subtotal of financial liabilities | 31,968,633,667.42 | 2,297,800,168.31 | 5,291,184,881.76 | 22,802,880,495.75 | 3,117,231,799.05 | 54,292,767,515.19 | ||
| Total above | 31,968,633,667.42 | 2,297,800,168.31 | 5,291,184,881.76 | 22,802,880,495.75 | 3,117,231,799.05 | 54,292,767,515.19 | ||
| Financial liabilities | ||||||||
Other changesNoneWhether there were any significant changes in the measurement attributes of the Company's major assets during the report period
□ Yes √ No
3. Restricted rights to assets as of the end of the report period
Unit: Yuan
| Item | Book value at the end of the period | Restricted reason |
| Monetary funds | 37,328,823,349.13 | Statutory deposit reserve and deposits |
| Accounts receivable | 276,321,025.79 | Pledged |
| Receivable financing | 12,911,461,792.08 | Pledged |
| Contract assets | 422,560,112.06 | Pledged |
| Other current assets | 6,800,000,000.00 | Pledged |
| Non-current assets due within one year | 60,197,639.98 | Pledged |
| Other debt investments | 4,717,527,970.00 | Pledged |
| Other equity instruments investments | 8,938,973,543.22 | Restricted shares |
| Long-term equity investments | 312,711,807.79 | Pledged |
| Fixed assets | 847,908,771.37 | Pledged |
| Construction in progress | 225,701,846.53 | Pledged |
| Intangible assets | 947,343,396.76 | Pledged |
| Other non-current assets | 44,163,315.00 | Pledged |
| Total | 73,833,694,569.71 |
VII. Analysis of investments
1. Overall review
√ Applicable □ Not applicable
| Investment in the report period(yuan) | Investment in the same period last year(yuan) | Change percentage |
| 18,154,432,702.74 | 3,561,055,956.90 | 409.80% |
2. Major equity investments obtained during the report period
√ Applicable □ Not applicable
Unit: Yuan
| Name of investee company | Main business | Investment mode | Investment amount | Shareholding proportion | Capital source | Partner | Investment term | Product type | Progress as of the balance sheet date | Expected revenue | Profit and loss on investments for the current period | Whether it is involved in a lawsuit | Disclosure date (if any) | Disclosure Index (if any) |
| Gree Altairnano New Energy Inc. | Research and development of new energy technology, production and sales of lithium-ion power batteries and energy storage batteries | Acquisition | 1,828,275,113.56 | 30.47% | Own funds | None | Long term | New energy vehicles, lithium-ion batteries, energy storage products, etc. | Completed | - | -126,989,002.82 | No | August 31, 2021 | Gree Electric Appliances: Announcement of Foreign Investment and Related Transactions (2021-060) |
| Total | -- | -- | 1,828,275,113.56 | -- | -- | -- | -- | -- | -- | -- | -126,989,002.82 | -- | -- | -- |
3. Significant non-equity investments in progress during the report period
□ Applicable √ Not applicable
4. Financial Assets Investments
(1) Securities investment
√ Applicable □ Not applicable
Unit: Yuan
| Type of securities | Securities code | Securities abbreviation | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Gains or losses on changes in fair value for the current period | Accumulated fair value changes included in equity | Purchase amount for the current period | Selling amount for the current period | Profit/loss during the report period | Book value at the end of the period | Accounting Accounts | Capital source |
| Stocks listed on domestic and overseas stock exchanges | 600745 | WINGTECH | 884,999,996.60 | Measured at fair value | 3,550,040,505.00 | 1,086,527,548.50 | 3,751,568,056.90 | 5,916,734.18 | 4,636,568,053.50 | Other equity instruments investments | Own funds | ||
| Stocks listed on domestic and overseas stock exchanges | 600703 | San'an Optoelectronics | 2,000,000,000.00 | Measured at fair value | 3,093,928,974.37 | 1,208,476,515.35 | 2,302,405,489.72 | 17,182,130.55 | 4,302,405,489.72 | Other equity instruments investments | Own funds |
| Stocks listed on domestic and overseas stock exchanges | 600619 | Highly | 1,141,510,131.07 | Measured at fair value | 667,802,216.81 | 88,370,312.43 | -386,430,427.61 | 14,411,825.47 | 755,079,703.46 | Other equity instruments investments | Own funds | ||
| Bonds | 160017 | 16. Interest-bearing treasuries 17 | 288,405,500.00 | Measured at fair value | 298,866,682.20 | 4,883,141.17 | 7,448,985.41 | 14,301,000.00 | 304,947,682.20 | Other debt investments | Own funds | ||
| Stocks listed on domestic and overseas stock exchanges | 600888 | Xinjiang Joinworld | 111,836,005.99 | Measured at fair value | 215,172,336.36 | 45,737,682.63 | 105,586,941.75 | 41,680,735.20 | 85,167,806.45 | 3,918,701.49 | 217,422,947.74 | Other equity instruments investments | Own funds |
| Bonds | 200408 | 20 Nongfa 08 | 199,203,000.00 | Measured at fair value | 203,335,610.97 | 3,416,815.03 | 5,618,379.40 | 10,476,600.00 | 206,912,210.97 | Other debt investments | Own funds | ||
| Bonds | 102101215 | 21 Huafa Group MTN007 | 200,000,000.00 | Measured at fair value | 812,000.00 | 812,000.00 | 200,000,000.00 | 5,474,739.71 | 205,576,657.52 | Other debt investments | Own funds | ||
| Stocks listed on domestic and overseas stock exchanges | 01528 | RS MACALLINE- H SHS | 640,024,820.31 | Measured at fair value | 254,461,858.93 | -39,904,601.96 | -444,254,984.68 | 195,769,835.63 | Other equity instruments investments | Own funds |
| Others | - | Ronghui Single Asset Management Plan | 81,000,000.00 | Measured at fair value | 309,327.39 | 81,000,000.00 | 309,327.39 | 81,309,327.39 | Trading financial liabilities | Own funds | |||
| Bonds | 101901653 | 19 Huafa Group MTN007 | 59,587,700.00 | Measured at fair value | 445,070.72 | 445,070.72 | 60,000,000.00 | 2,287,646.15 | 60,392,960.52 | Other debt investments | Own funds | ||
| Other investment securities held at the end of the period | 9,996,590.00 | -- | 127,191.06 | 127,191.06 | 10,000,000.00 | 391,349.87 | 10,155,063.15 | -- | -- | ||||
| Total | 5,616,563,743.97 | -- | 8,283,608,184.64 | 2,399,201,002.32 | 5,343,326,702.67 | 392,680,735.20 | 85,167,806.45 | 74,670,054.81 | 10,976,539,931.80 | -- | -- | ||
| Securities Investment Approval Board Announcement Disclosure Date | April 29, 2021 | ||||||||||||
| Date of disclosure of announcement of shareholders' meeting for approval of securities investment (if any) | June 30, 2021 | ||||||||||||
(2)Investment in derivatives
√ Applicable □ Not applicable
Unit: 10,000 yuan
| Operation name of investment in derivative | Related relationships | Whether related transactions | Types of Derivatives Investments | Initial investment amount of derivative investment | Start date | Expiry date | Investment amount at the beginning of the period | Amount purchased during the report period | Amount sold during the report period | Amount of provision for impairment (if any) | Ending investment amount | Proportion of the ending investment amount to net assets at the end of the report period | Profits and losses during the report period |
| Futures company | Unrelated party | No | Futures hedging contracts | 4,482.29 | January 1, 2021 | December 31, 2021 | 4,482.29 | 4,393.05 | 0.04% | 17,333.51 | |||
| Financial institution | Unrelated party | No | Forward financial contracts | 28,549.42 | January 1, 2021 | December 31, 2021 | 28,549.42 | 19,877.32 | 0.19% | 26,089.69 | |||
| Total | 33,031.71 | -- | -- | 33,031.71 | 24,270.37 | 0.23% | 43,423.20 | ||||||
| Derivatives investment funding sources | Own funds | ||||||||||||
| Involvement in lawsuits (if applicable) | None | ||||||||||||
| Date of Disclosure of Announcement of Board for Approval of Derivatives Investment (if any) | April 29, 2021 | ||||||||||||
| Date of Disclosure of Announcement of Shareholders' Meeting for Approval of Derivative Investment (if any) | July 1, 2021 | ||||||||||||
| Risk analysis and description of control measures for derivative positions during the report period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | I. Risk Analysis 1. Market risk: The exchange rate fluctuations in both directions increased significantly, and there was a possibility that the exchange rate of forward and option contracts might differ from the actual exchange rate on the maturity date, which might result in losses. The Company entered into forward and option contracts based on the real import and export trade background and reasonable estimation of future foreign exchange revenue and expenditure, and managed the exchange rate risk of the Company's import and export business and foreign exchange position with the idea of "risk-neutral" and the principle of cost-profit. 2. Default risk: The company entered into the above foreign exchange fund transaction contracts based on the real import and export trade background and reasonable estimation of future foreign exchange revenue and expenditure, and there was no performance risk; the company chose commercial banks with good creditworthiness for its foreign exchange contracts, and basically did not need to consider the risk of default caused by their failure. 3. Liquidity risk: All foreign exchange fund transactions met the requirements of trade authenticity, and the relevant foreign exchange fund transactions would be operated by means of bank credit, which would not affect the liquidity of the company. II. Risk Management Measures 1. Based on the basic situation of foreign exchange derivatives trading business approved by the Board of Directors, the fund operation and management center proposed a reasonable assessment and concrete implementation plan based on the real trade background and reasonable estimation of future foreign exchange revenue and expenditure and business needs. 2. Each foreign exchange derivative trading business is subject to a three-tier approval system, i.e. the approval of the head of foreign exchange business of the fund operation and management center, the head of the fund operation and management center and the Finance Chief of the company is required before implementation. 3. The fund operation management center paid attention to the risk factors of foreign exchange derivatives trading business in real time, and made timely warning and response plan when the market fluctuation caused a large impact. | |
| Changes in the market price or fair value of the product during the report period of the invested derivatives, and the analysis of the fair value of the derivatives should disclose the specific methodology used and the setting of relevant assumptions and parameters | The gains or losses of futures hedging contracts for the report period was 173,335,100 yuan, and the gains or losses of forward financial contracts for the report period was 189,945,200. | |
| Description of whether there has been any significant change in the accounting policy and specific accounting principles for derivatives during the report period as compared to the previous report period | No change |
| Special Opinion of Independent Directors on the Company's Derivatives Investment and Risk Control | The independent directors of the Company are of the view that the Company's hedging business of futures on bulk materials is conducive to locking in production costs, controlling operation risks and improving operation management; through foreign exchange derivatives trading business, it is conducive to further enhancing the Company's foreign exchange risk management capability and realizing the value preservation and appreciation of foreign exchange assets. The Company has established a corresponding control system for the relevant business, and the approval and implementation are legal and compliant, and the risks are controllable, which is in the interests of the Company and all shareholders. |
5. Use of proceeds
□ Applicable √ Not applicable
The Company has no use of proceeds during the report period.XIII. Major assets and equity sales
1. Sale of Major Assets
□ Applicable √ Not applicable
The Company did not sell any major assets during the report period.
2. Sale of significant equity interests
□ Applicable √ Not applicable
IX. Analysis of major controlled and invested companies
√ Applicable □ Not applicable
Major subsidiaries and participating companies affecting 10% or more of the company's net profit
Unit: Yuan
| Company name | Company Type | Main business | Registered Capital | Total Assets | Net assets | Operating revenue | Operating profit | Net profit |
| Zhuhai Gree Group Finance Company Limited | Subsidiary | Financial service | 3,000,000,000.00 | 52,270,241,505.71 | 6,358,255,750.06 | 1,904,221,332.12 | 540,431,914.28 | 407,512,564.92 |
| Zhuhai Gree Electrical Co., Ltd | Subsidiary | Varnished Wire Manufacturing | 1,669,315,586.15 | 9,239,746,829.99 | 3,071,150,525.96 | 41,290,134,072.88 | 274,120,524.26 | 206,698,823.07 |
| Gree (Hefei) Electric Appliances Co., Ltd. | Subsidiary | Air Conditioner Manufacturing | 150,000,000.00 | 10,909,050,309.98 | 4,816,014,155.88 | 10,216,765,020.91 | 552,684,110.77 | 498,823,394.72 |
| Zhuhai Landa Compressor Co., Ltd. | Subsidiary | Compressor Manufacturing | 93,030,000.00 | 12,080,694,348.10 | 7,577,290,627.39 | 17,974,060,009.43 | 1,049,560,580.92 | 914,068,600.73 |
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | Subsidiary | Capacitor Manufacturing | 126,180,000.00 | 2,830,418,996.54 | 1,336,790,817.55 | 2,021,499,188.74 | 309,061,240.34 | 260,613,682.67 |
| Zhuhai Kaibang Motor Manufacturing Co., Ltd. | Subsidiary | Motor Manufacturing | 82,000,000.00 | 4,287,309,451.51 | 1,165,954,527.79 | 3,269,955,270.22 | 158,995,590.91 | 138,958,620.72 |
| Gree (Zhongshan) Small Home Appliances Co., | Subsidiary | Small household appliances manufacturing | 30,000,000.00 | 1,191,788,353.90 | 557,136,192.42 | 1,030,600,093.91 | 91,013,640.49 | 84,346,186.77 |
Information about acquisition and disposal of subsidiaries during the report period
√ Applicable □ Not applicable
| Company name | Methods of acquisition and disposal of subsidiaries during the report period | Impact on overall production and operation and financial results(yuan) |
| Handan Yingdong New Energy Technology Co., Ltd. | Cancelled | -1,148.22 |
| SL Group Ermapao Eco-Farm Co., Ltd. | Cancelled | -72,031.20 |
| SL(Ningbo) Grain Sales Co., Ltd | Transfer account | 23,927.91 |
| SL Group Jiangwan Rice Industry Co., Ltd | Transfer account | 215,501.72 |
| SL Group Lianhe Ecology Farm Co., Ltd | Transfer account | -50,939.54 |
| SL Group Yuan Agriculture Co., Ltd | Transfer account | 2,291.72 |
| SL Group Lvzhiyuan Agriculture Co., Ltd | Transfer account | 142,792.55 |
| SL Group Dongwei Rice Industry Co., Ltd | Transfer account | 92,134.32 |
| Gree Electric Appliances (Linyi) Co., Ltd. | New | -5,425,480.69 |
| Gree (Zhuhai Hengqin) GREE Development Co., Ltd. | New | -1,549,963.17 |
| Changsha Kinghome Electrics Co., Ltd | New | -279,824.69 |
| Zhuhai MinRoad Supply Chain Technology Co., Ltd | New | - |
| Zhuhai Gree Electormechanical Engineering (Linyi) Co., Ltd. | New | 6,931,910.01 |
| Wuhu Gree Intelligent Logistics Co., Ltd | New | - |
| Jiangxi Jinrun Real Estate Co., Ltd | New | -14,190,163.54 |
| Green Electricity New Material (Maanshan) Technology Co., Ltd. | New | - |
| Wuhan Yuli Runzhu Real Estate Co., Ltd | New | -276,336.18 |
| Huaxingaodao (Maanshan) Technology Co., Ltd. | New | - |
Description of major holding and participating companiesNot ApplicableX. Details of Company-controlled Structured Entity
□ Applicable √ Not applicable
XI. Prospects for the future development of the company
(I) Corporate development strategies
Gree adheres to the corporate vision of "creating a world-class enterprise and achieving a century-longbrand". Driven by technological innovation and guaranteed by perfect quality, it deepens reform and acceleratesdigital transformation, based on the household appliance industry, steadily expands new industries such asintelligent equipment, precision molds, new energy, semiconductors and core components, and builds a morecompetitive diversified, technology-based global industrial group.(II) Key work in 2022
1. Strengthen the leadership of high-quality party building and build a strong base for party organizationsto fight
Guided by Xi Jinping's thought of socialism with Chinese characteristics in the new era, the companycomprehensively implements the spirit of the 19th Party Congress and the 19th Plenary Session, coordinatesepidemic prevention and control with production and operation, and further deepens the integration of Partybuilding work with production and operation management, innovative and realistic dedication culture andpersonal development of employees.
2. Grasp the new market opportunities and develop a new diversified development pattern
Actively respond to the national strategy of expanding domestic demand, embrace the trend of upgrading theconsumption structure, continue to deepen the domestic market, deepen the construction of digital channelmarketing service network, expand the business layout of the commercial sector, expand the sales scale ofphotovoltaic (storage) air conditioners, energy storage products, intelligent equipment, precision molds, specialcompressors, high-end motors and other products, while grasping the "Belt and Road Initiative” and the locationadvantage of the Greater Bay Area, so as to enhance the international competitiveness of the brand.
3. Persevere in scientific and technological innovation to generate new development momentum
Around the major strategic needs of the country, gave full play to the role of national key laboratories,strengthen the reserve of cutting-edge technologies, accelerate the conquest of "bottleneck" technologies, take themarket as the center, developed high-quality products for consumers, and shape new advantages in developmentrelying on scientific and technological innovation.
4. Innovate quality control methods and improve quality level
With quality first as the guiding ideology and quality innovation-driven as the basic policy, lay a soild qualitytechnology foundation, establish intelligent quality control mechanism, continuously pursue the excellent qualityof products, projects and services, and enhance the corporate brand value and the overall image of Made in China.
5. Accelerate industrial transformation and upgrade, and promote the integration of digital technology andindustry
With high-quality development as the guide, transform industries in all aspects and chains utilizing newInternet technologies, seize the first opportunity of the new round of technological revolution and industrialchange and promote the digital transformation of enterprises.
6. Comprehensively deepen reform and improve organizational effectiveness
Around the keynote of "cost reduction, efficiency improvement and profit creation", promote and deepenlean management, further dig the potential of cost reduction and efficiency improvement and enhance enterprisemanagement efficiency through precise measures and targeted efforts.
7. Strengthen the construction of talent echelon and build a highland for talent gatheringImprove the selection and training mechanism of talents at all levels, provide a platform for the developmentof talents through multiple channels, focus our efforts on building a highland of talents, and provide key elementsfor industrial development.
8. Build up security risk prevention and strengthen internal control and compliance managementBuild a comprehensive discipline and audit supervision system, further enhancing security awareness, andfocus on investment, finance and other major risks to strengthen monitoring and early warning, and continuouslyimprove the level of the company's risk prevention and control and emergency response capabilities.(III) Main Risks to Future Development
1. Macroeconomic fluctuation risk
The products sold by the company are mainly HVAC and household appliances, whose market demand isinfluenced by the macroeconomy. The current recurring and volatile situation of the COVID-19 epidemic, thecomplicated and severe geopolitical situation, the real estate market has not yet rebounded, and the uncertainty ofeconomic development and residents' income increases, which may lead to a slower pace of consumer recovery,and the company's household appliance market may also face a slowdown in demand.
2. Risk of factor price fluctuations
The main raw materials for the company's products are copper, steel, aluminum and plastic of variousgrades, which account for a large proportion of the cost. Starting from 2020, the prices of copper, aluminum andother raw materials has risen rapidly and continue to run high, and the resulting cost pressure will have a certainimpact on the company's operating results. As an industry leader with strong centralized purchasing advantages,the company will reduce the negative impact of raw material fluctuations on its operations through hedging,advance stocking and material generalization.
3. Risks arising from increased market competition
With the implementation of the policy of “housing residence instead of vicious speculation”, the slowingdown of urbanization and the aging of the population, the air conditioning industry has bid farewell to the periodof rapid growth, and the industry is becoming increasingly competitive, which may squeeze the company'sprofitability.
4. Market risks from overseas wars and trade protectionism
Geopolitical tensions, such as local wars and economic sanctions, as well as "counter-globalization" andtrade protectionism, will have a negative impact on global economic recovery and international trade, which willnot be conducive to the Company's export business.
5. Export market risk and exchange loss due to exchange rate fluctuation
The company's products are exported to more than 180 countries and regions. As the company continues toexpand its overseas markets, exchange rate fluctuations may not only adversely affect the export of the company'sproducts, but also cause exchange losses and increase financial costs.
XII. Reception, research, communication, interviews and other activities during the reportperiod
√ Applicable □ Not applicable
| Time of reception | Place of reception | Method of reception | Reception type | Reception object | Contents discussed and material provided | Index of basic information of the research |
| May 24, 2021 | Company Conference Room | Field research | Others | Total number of institutional and individual investors: 127 | Company operations | For more details, please refer to "Gree: 000651 Gree Performance Presentation, Roadshow Activity Information 20210525" disclosed on www.cninfo.com.cn on May 25, 2021. |
| June 26, 2021 | Company Conference Room | Telephone communication | Others | Total number of institutional and individual investors: 226 | Company operations | For more details, please refer to "Gree: 000651 Gree Performance Presentation, Roadshow Event Information 20210627" disclosed on www.cninfo.com.cn on June 27, 2021. |
Section IV Corporate GovernanceI. Basic status of corporate governanceThe Company, In strict accordance with the Company Law, Securities Law and other relevant national lawsand regulations and the Guidelines for Standardized Operation of Companies Listed on the Main Board ofShenzhen Stock Exchange, established the normative corporate governance structure and the rules of procedurefor the General Meeting of Shareholders, Board of Directors and Board of Supervisors, clarified theresponsibilities and authorities in decision-making, performance and supervision, formed effective division ofresponsibilities and balance mechanism, continuously promoted the level of normal operation and safeguarded theinterests of investors and the Company.The Company's governance complied with the Company Law of the People's Republic of China and therequirements of the China Securities Regulatory Commission regarding the governance of listed companies.
Whether there were any significant differences between the actual state of corporate governance and the regulations on governance oflisted companies issued by laws, administrative regulations and the CSRC
□ Yes √ No
The actual state of corporate governance did not differ materially from the laws, administrative regulations and the regulations ongovernance of listed companies issued by the CSRC.II. The independence of the company from the controlling shareholder and the actualcontroller in terms of assets, personnel, finance, organization and business of the companyThe Company has a sound corporate governance structure and completely separates from Zhuhai Mingjun asthe largest shareholder in business operation, personnel, assets, organization and finance, and the Company hasindependent and complete business operation and independent management capability.III. Horizontal competition
□ Applicable √ Not applicable
IV. Convening of the annual general meeting of shareholders and interim general meeting ofshareholders during the report period
1. General meetings of shareholders for the report period
| Session of meeting | Type of meeting | Proportion of participating investors | Date of convening | Date of disclosure | Meeting resolutions |
| 2020 Annual General Meeting of | Annual General Meeting of | 54.58% | June 30, 2021 | July 1, 2021 | Announcement of Resolutions of the |
| Shareholders | Shareholders | 2020 Annual General Meeting of Shareholders", etc. on www.cninfo.com.cn | |||
| The First Interim General Meeting of Shareholders for Year 2021 | Interim General Meeting of Shareholders | 51.70% | August 20, 2021 | August 21, 2021 | The Announcement on Resolutions of the First Interim General Meeting of Shareholders for the Year 2021, etc. on www.cninfo.com.cn |
| The Second Interim General Meeting of Shareholders for Year 2021 | Interim General Meeting of Shareholders | 46.64% | September 29, 2021 | September 30, 2021 | The Announcement on Resolutions of the Second Interim General Meeting of Shareholders for the Year 2021, etc. on www.cninfo.com.cn |
2.Convening of an interim general meeting of shareholders requested by the preferred shareholders whosevoting rights have been restored
□ Applicable √ Not applicable
V. Directors, supervisors and senior management personnel
1. Basic Information
| Name | Title | Employment status | Gender | Age | Term start date | Term end date | Number of shares held at the end of the period (shares) | Number of held stocks increased for the current period (shares) | Number of held stocks reduced for the current period (shares) | Other increase/decrease changes (shares) | Number of shares held at the end of the period (share) | Reasons for increase or decrease of shares |
| Dong Mingzhu | Chairperson & President | Incumbent | Female | 67 | May 25, 2012 | February 28, 2025 | 44,488,492 | 44,488,492 | ||||
| Zhang Wei | Chairman and secretary of the Party Committee | Incumbent | Male | 45 | January 16, 2019 | February 28, 2025 | ||||||
| Guo Shuzhan | Director | Incumbent | Male | 65 | January 16, 2019 | February 28, 2025 | ||||||
| Zhang Jundu | Director | Incumbent | Male | 61 | May 25, 2012 | February 28, 2025 | ||||||
| Deng Xiaobo | Director, Vice President, Secretary of the Board of Directors | Incumbent | Male | 46 | December 26, 2020 | February 28, 2025 | ||||||
| Liu Shuwei | Independent director | Incumbent | Female | 69 | January 16, 2019 | February 28, 2025 |
| Wang Xiaohua | Independent director | Incumbent | Male | 60 | January 16, 2019 | February 28, 2025 | ||||||
| Xing Ziwen | Independent director | Incumbent | Male | 59 | January 16, 2019 | February 28, 2025 | ||||||
| Zhang Qiusheng | Independent director | Incumbent | Male | 54 | March 1, 2022 | February 28, 2025 | ||||||
| Cheng Min | Supervisor | Incumbent | Female | 41 | November 2, 2020 | February 28, 2025 | ||||||
| Duan Xiufeng | Supervisor | Incumbent | Male | 58 | January 16, 2019 | February 28, 2025 | 596,700 | 149,175 | 447,525 | Reduced holding-shares | ||
| Wang Fawen | Employee supervisor | Incumbent | Female | 38 | January 16, 2019 | February 28, 2025 | ||||||
| Zhuang Pei | Vice president | Incumbent | Male | 57 | May 25, 2012 | February 28, 2025 | 5,955,202 | 5,955,202 | ||||
| Tan Jianming | Vice President and Chief Engineer | Incumbent | Male | 57 | August 31, 2017 | February 28, 2025 | 1,297,300 | 1,297,300 | ||||
| Shu Lizhi | Vice president | Incumbent | Male | 52 | December 26, 2020 | February 28, 2025 | ||||||
| Liao Jianxiong | Finance Chief, Assistant to President | Incumbent | Male | 48 | August 6, 2020 | February 28, 2025 | ||||||
| Fang Xiangjian | Vice president | Incumbent | Male | 44 | November 19, 2021 | February 28, 2025 | 167,400 | 167,400 |
| Huang Hui | Director, Executive President | Resigned | Male | 58 | May 25, 2012 | February 19, 2021 | 7,380,000 | 1,845,000 | 5,535,000 | Reduced holding-shares | ||
| Total | -- | -- | -- | -- | -- | -- | 59,885,094 | 0 | 1,994,175 | 57,890,919 | -- |
Whether there are cases of departure of directors and supervisors and dismissal of senior management during the report period
√ Yes □ No
Mr. Huang Hui, the director and executive president of the Company, submitted a written resignation report to the Board of Directors of the Company on February 19, 2021, and he applied forresignation as the director and executive president of the Company for personal reasons. After his resignation, Mr. Huang Hui no longer holds any position in the Company.
Changes in the Company's directors, supervisors and senior management
√ Applicable □ Not applicable
| Name | Position held | Type | Date | Reason |
| Huang Hui | Director, Executive President | Resigned | February 19, 2021 | Resignation for personal reasons |
| Fang Xiangjian | Vice president | Hire | November 19, 2021 | Hired by the Board of Directors |
2. Employment Status
Professional background, major work experience and current major responsibilities of the Company's currentdirectors, supervisors and senior managementMs. Dong Mingzhu, with a master's degree, serves as the chairperson and president of Gree ElectricAppliances, Inc of Zhuhai. She successively held the posts of salesperson, Vice Director and Director of SalesDepartment, Vice General Manager, Vice Chairperson of the Board and President of Gree Electric Appliances, etc.She was successively elected as a member of the 10th, 11th, 12th and 13th National People's Congress, amember of the 10th, 11th and 12th Executive Committee of the All-China Women's Federation, a member of the13th Five-Year Plan Expert Committee of the National Development and Reform Commission, a member of theAdvisory Committee of the All-China Federation of Industry and Commerce, a United Nations Ambassador forSustainable Urban Development, and the first rotating chair of the UNDP Commission on SustainableDevelopment.She was awarded the "National Model Worker", "National May 1 Labor Medal", "National March 8th RedBanner Pacesetter", China Patent Gold Award, the Third China Quality Award, Liu Yuanzhang QualityTechnology Contribution Award, Fudan University Outstanding Contribution to Enterprise Management Award,Tsinghua University Top 10 Management Innovation Leaders-Practitioners, and "China Outstanding QualityPeople (National Quality Award)" and other honors and titles, and three times selected by CCTV as "CCTV ChinaEconomic and were listed in Fortune Magazine's "World's Most Influential Women in Business" for 14 times. In2020, she was awarded the honorary title of "Advanced Individual of Private Economy in the Fight against theCOVID-19 Epidemic" by the Central United Front Work Department, the Ministry of Industry and InformationTechnology, the General Administration of Market Supervision and the All-China Federation of Industry andCommerce for her scientific and technological fight against the epidemic. In 2021, she chaired the Sub-Committeeon Experimentation and Evaluation of Refrigeration Compressors (ISO/TC86/SC4) of the InternationalOrganization for Standardization Technical Committee on Refrigeration and Air Conditioning.Mr. Zhang Wei, a senior economist with a bachelor's degree, serves as the Secretary of the Party Committeeand Director of Gree Electric Appliances, Inc of Zhuhai.He joined Gree in 1999 and successively held the posts of the head of Gree Electric Appliances PipelineSub-Factory, Material Supply Department, Outsourcing Quality Management Department, EnterpriseManagement Department, and Assistant to President, and served as Vice President of Gree Group from 2013 to2020, and has served as Secretary of the Party Committee of Gree Electric Appliances from September 2020 tothe present
Mr. Guo Shuzhan, with a junior college degree, serves as a director of Gree Electric Appliances, Inc ofZhuhai.
From August 2006 to the present, he has served as the chairman and general manager of Jinghai InternetTechnology Development Co., Ltd.; from August 2012 to the present, he has served as the general manager ofHenan Shengshi Xinxing Gree Trading Co., Ltd.; From May 2012 to January 2019, he served as a supervisor ofthe company, and from January 2019 to the present, he has served as a director of the company.
Mr. Zhang Jundu, with a junior college degree, serves as a director of Gree Electric Appliances, Inc ofZhuhai.
From September 1999 to the present, he has served as the Chairman of Zhejiang Tongcheng Gree ElectricAppliances Co., Ltd From August 2012 to the present, he has concurrently served as the General Manager ofZhejiang Shengshi Xinxing Gree Trading Co., Ltd, and has served as director of the company from May 2012 tothe present.Mr. Deng Xiaobo, with a bachelor's degree, serves as a director, vice president and secretary of the Board ofDirectors of Gree Electric Appliances, Inc of Zhuhai.From July 2015 to November 2020, he served as the chairman of Shaanxi Coal and Chemical Group FinanceCo., Ltd He joined Gree Electric Appliances, Inc of Zhuhai in November 2020 and successively held the posts ofVice President and Secretary to the Board of Directors of the company, and he has served as Director, VicePresident and Secretary to the Board of Directors of Gree Electric Appliances, Inc of Zhuhai from February 2022to the present.Ms. Liu Shuwei, with a master's degree, serves as an independent director of Gree Electric Appliances, Incof Zhuhai.Ms. Liu graduated from Peking University with a master's degree in economics in 1986 and studied under thetutelage of Professor Chen Daisun and Professor Li Yining, who are renowned scholars in finance. In 2002, shewas awarded "Economic Personality of the Year" and "Touching China - 2002 Person of the Year" by CCTV. Sheserves as an independent director of Vanke Enterprise Co., Ltd, an independent director of Henan Costar GroupCo., Ltd., an independent director of Royole Corporation and a director and a researcher at the China EnterpriseResearch Center of Central University of Finance and Economics. She has served as an independent Director ofthe Company from January 2019 to the present.Mr. Xing Ziwen, with a doctoral degree, serves as an independent director of Gree Electric Appliances, Incof Zhuhai.He is currently a professor at Xi'an Jiaotong University, a Distinguished Professor under the ChangjiangScholars Award Program of the Ministry of Education, a national candidate for the Hundred Million TalentsProject in the New Century, and a recipient of a special allowance from the State Council. Prof. Xing Ziwen wasthe head of the Department of Refrigeration and Cryogenic Engineering and the director of the CompressorResearch Institute in the School of Energy and Power Engineering of Xi'an Jiaotong University, and is currentlythe deputy director of the National Engineering Center for Fluid Machinery and Compressors of Xi'an JiaotongUniversity. He has been awarded two National Science and Technology Progress Awards, seven Provincial andMinisterial Science and Technology Progress Awards, and the Special Award for Science and Technology Progressof the Chinese Society of Refrigeration, the Special Award for Invention and Entrepreneurship of the ChinaInvention Association, the Distinguished Professor Award of the Xia Anshi Education Foundation, and the YouthInnovation Award of the Ho Leung Ho Lee Foundation, etc.Mr. Wang Xiaohua, a first-class lawyer with a master's degree, serves as an independent director of GreeElectric Appliances, Inc of Zhuhai.Mr. Wang Xiaohua has been working in Guangdong Guangxin Junda Law Firm since January 1993, and iscurrently the director of the firm. He is also a member of the Standing Committee of the Guangdong ProvincialCommittee of the Chinese People's Political Consultative Conference, a member of the Judges and ProsecutorsSelection Committee of Guangdong Province, a member of the Legal Advisory Service Team of GuangdongProvincial People's Government, and a legal advisor of Guangdong Provincial Public Security Department. In
addition, Mr. Wang concurrently serves as an independent director of Guangdong Shirong Zhaoye Co., Ltd.,Guangzhou Tower Tourism and Culture Development Co., Ltd. and Guangdong Guangxin Information IndustryCo., Ltd. He served as a councilor of the National Lawyers Association, a legal advisor to the OrganizingCommittee of the 16th Asian Games, a member of the 9th National Youth Federation, the president of GuangzhouLawyers Association, and a legal consultant and advisor to the Guangzhou Municipal People's Government. Overthe past 33 years of practice, he has handled more than 1,000 litigation, arbitration, and non-litigation cases andprojects individually or with his team, having rich experience in legal services.Mr. Wang Xiaohua has published four monographs and co-authored four books, published more than 30papers and articles, and submitted more than 50 proposals, and was praised by the Nanfang Daily News as a majorproposal writer.Mr. Zhang Qiusheng, with a doctoral degree, serves as an independent director of Gree Electric Appliances,Inc of Zhuhai.Mr. Zhang Qiusheng is a non-practicing member of the Chinese CPA. He is currently a professor at theSchool of Economics and Management of Beijing Jiaotong University, the director of the National Institute ofTransportation Development, the director of the China Center for Corporate Mergers and Acquisitions, and anindependent director of Jinneng Holdings Shanxi Coal Co., Ltd Mr. Zhang Qiusheng has undertaken variousprovincial and ministerial research projects, including the National Natural Science Foundation of China, theNational Social Science Foundation of China, the National Soft Science Program, as well as the Ministry ofEducation, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission, theSecurities and Futures Commission, etc. He has published more than 30 monographs, books (translations) andmore than 100 academic and professional papers, and has won one second prize for national teachingachievements, four provincial and ministerial research achievements, and two first prizes for Beijing teachingachievements.
Ms. Cheng Min, with a bachelor's degree, serves as a supervisor of Gree Electric Appliances, Inc of Zhuhai.Ms. Cheng serves as the Assistant to the President of Zhuhai Gree Group Co., Ltd, and Chairperson andGeneral Manager of Zhuhai Gexin Development Co., Ltd. She successively held the posts of the head of thePlanning Department of Zhuhai Exhibition and Convention Bureau, a member of the Party Group of ZhuhaiExhibition and Convention Bureau, and the office director and secretary of the Board of Directors of Zhuhai GreeGroup Co., Ltd.Mr. Duan Xiufeng serves as a supervisor of Gree Electric Appliances, Inc of Zhuhai.He graduated from Shandong Party School in 1999 and successively held the posts of Deputy GeneralManager and General Manager of Shandong Gree Marketing Co., Ltd and General Manager of ShandongShengshixinxing Gree Trading Co., Ltd. He has served as a supervisor of the Company from January 2019 to thepresent.Ms. Wang Fawen, wirh a master's degree a mid-level economist and human resources manager, serves as thesupervisor of the staff representative of Gree Electric Appliances, Inc of Zhuhai.From 2007 to 2019, she successively held the posts of Human Resources Specialist of the Human ResourcesDepartment, Director of the Personnel General Office, Supervisor of the Performance Section, Supervisor of theTraining Section, Assistant Director of the Training Department, Human Resources Department and Director ofthe Training Department; from January 2019 to the present, she has served as a Supervisor of the Employee
Representative of the Company, and from February 2019 to the present, she has served as Vice Director of theHuman Resources Department of the Company.Mr. Zhuang Pei, with a bachelor’s degree, engineer, serves as the vice president of Gree Electric Appliances,Inc of Zhuhai.
He served as Assistant to the President from 2002 to April 2003 and has served as Vice President from April2003 to the present.Mr. Tan Jianming, with a master's degree, serves as the Chief Engineer and Vice President of Gree ElectricAppliances, Inc of Zhuhai.
From 1982 to 1986, he studied refrigeration and low-temperature technology at Huazhong University ofScience and Technology and received his bachelor's degree; from 1986 to 1989, he continued his studies inrefrigeration and low-temperature technology at Huazhong University of Science and Technology and received hismaster's degree; after graduation in 1989, he joined Gree Electric Appliances, Inc of Zhuhai and successively heldthe posts of Designer, Director, Assistant to President, Deputy Chief Engineer, etc. He has served as ChiefEngineer and Vice President of the Company from August 2017 to the present.
Mr. Shu Lizhi, with a master's degree, serves as the Vice President of Gree Electric Appliances, Inc ofZhuhai.
He served as the deputy director and director of Wuhan Special Commission Office of the State Audit Office.He joined Gree Electric Appliances, Inc of Zhuhai in December 2019. He has served as Vice President of theCompany from December 2020 to the present.
Mr. Fang Xiangjian, a senior engineer with a master’s degree, serves as the Vice President of Gree ElectricAppliances, Inc of Zhuhai.
From July 2004 to December 2016, he successively held the posts of assistant to factory manager, deputyfactory manager and factory manager of the screening branch of Gree Electric Appliances, Inc of Zhuhai. He hasserved as the Assistant to President of Gree Electric Appliances, Inc of Zhuhai from December 2016 to the presentand has served as the vice president of Gree Electric Appliances, Inc of Zhuhai from November, 2021 to thepresent; He is the recipient of Guangdong May Day Labor Medal, Liu Yuan Zhang Quality Technology TalentAward, and the Management Excellence Award of the Chinese Academy of Management Science; he is the vicepresident of China Quality Inspection Association, a professional member of China Fire Protection Association, amember of the 7th Academic Committee of China Quality Association, and a vice chairman of the Green andEfficient Energy-Using Products Professional Committee of China Energy Conservation Association.
Mr. Liao Jianxiong serves as the Finance Chief and Assistant to President of Gree Electric Appliances, Incof Zhuhai.
He joined Gree in May 1993 and successively held the posts of the head of the Financial Department of GreeElectric Appliances (Chongqing) Co., Ltd, head of the Financial Department of Gree Electric Appliances, Inc ofZhuhai and Assistant to the President. He has served as the Finance Chief and assistant to the president of thecompany from August 2020 to the present.
Employment in shareholder's companies
√ Applicable □ Not applicable
| Name of incumbent | Name of shareholder | Position held at the shareholder | Term start date | Term end date | Whether to receive remuneration and allowance from the shareholder |
| Cheng Min | Zhuhai Gree Group Co., Ltd. | Assistant to President | March 1, 2020 | Yes | |
| Guo Shuzhan | Jinghai Internet Technology Development Co., Ltd. | President and Legal Representative | August 1, 2006 | No | |
| Description of incumbent in the shareholder's companies | 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 | Whether to receive remuneration and allowance from other companies |
| Dong Mingzhu | Zhuhai Gezhen Investment Management Partnership (Limited Partnership) | Executive Partner | September 26, 2019 | No | |
| Dong Mingzhu | Zhuhai Xima Pearl New Media Co., Ltd. | Director and Manager | October 1, 2015 | No | |
| Guo Shuzhan | Beijing Qianyuan Hengjiuhe Liquor Co., Ltd. | Director | April 25, 2014 | No | |
| Guo Shuzhan | Xiahe Hengsheng Hydropower Co., Ltd. | Director | May 1, 2007 | No | |
| Guo Shuzhan | Henan Shengshi Xinxing Gree Trading Co., Ltd. | Executive Director | August 1, 2010 | Yes | |
| Guo Shuzhan | Luoyang Gree Electric Appliances 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 | Henan Gree Installation Engineering Co., | Executive Director | March 10, 2021 | No |
| Shuzhan | Ltd. | ||||
| Guo Shuzhan | Luqu Hengfa Hydropower Co., Ltd. | Supervisor | September 9, 2021 | No | |
| Guo Shuzhan | Henan Sanli Real Estate Development Co., Ltd. | Supervisor | November 6, 2006 | No | |
| Guo Shuzhan | Henan Ruige Storage Co., Ltd. | Other personnel | July 1, 2005 | No | |
| Zhang Jundu | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. | Chairman | September 1, 1999 | Yes | |
| Zhang Jundu | Ningbo Tongcheng Gree Electric Appliances Co., Ltd. | Director | July 1, 2013 | No | |
| Zhang Jundu | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Executive Director and General Manager | January 1, 2017 | Yes | |
| Zhang Jundu | Zhejiang Ruitong Automobile 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 Gree Electric Appliances Co., Ltd. | Director | November 1, 2008 | No | |
| Liu Shuwei | Vanke Enterprise Co., Ltd | Independent director | June 30, 2017 | June 29, 2023 | Yes |
| Liu Shuwei | Royole Corporation | Independent director | June 23, 2020 | Yes | |
| Liu Shuwei | Costar Group Co., Ltd. | Independent director | April 10, 2019 | April 10, 2022 | Yes |
| Wang Xiaohua | Guangdong Guangxin Junda Law Firm | Partner chairman | June 1, 2017 | Yes | |
| Wang Xiaohua | Arrow Home Furnishing Group Co., Ltd | Independent director | December 18, 2019 | Yes | |
| Wang Xiaohua | Guangzhou Tower Tourism and Culture Development Co., Ltd. | Independent director | April 27, 2021 | Yes | |
| Wang Xiaohua | Guangdong Guangxin Information Industry Co., Ltd. | Independent director | March 26, 2019 | March 26, 2022 | Yes |
| Zhang Qiusheng | Jinneng Holdings Shanxi Coal Co., Ltd | Independent director | June 5, 2020 | Yes | |
| Zhang Qiusheng | Beijing Langxin Yicheng Consulting Co., Ltd. | Executive Director and General Manager | May 19, 2021 | No |
| Zhang Qiusheng | Tianjin Lishen Battery Co., Ltd | Director | December 25, 1997 | No | |
| Duan Xiufeng | Beijing Detai Hengrun Investment Co., Ltd. | Manager | July 3, 2014 | No | |
| Duan Xiufeng | Beijing Rongzhi Xingwei Management Consulting Co., Ltd | Manager | July 2, 2013 | No | |
| Duan Xiufeng | Shandong Jierui Logistics Co., Ltd. | Executive Director and General Manager | August 11, 2010 | No | |
| Duan Xiufeng | Jinan Qihui Microfinance Co., Ltd. | Director | February 4, 2009 | No | |
| Duan Xiufeng | Shandong Gree Electric Appliances Customer Service Co., Ltd. | Executive Director and General Manager | August 2, 2012 | Yes | |
| Duan Xiufeng | Shandong Binzhou Dongsheng Real Estate Co., Ltd. | Executive Director | June 26, 2009 | No | |
| Duan Xiufeng | Shandong Blue Economy Industrial Fund Management Co., Ltd. | Chairman | November 5, 2014 | No | |
| Duan Xiufeng | Shandong Youbu Network Technology Co., Ltd. | Executive Director | October 27, 2015 | No | |
| Duan Xiufeng | Jinan Jierui New Energy Technology Co., Ltd. | Executive Director and General Manager | December 21, 2016 | No | |
| Duan Xiufeng | Shandong Red April Brand Management Co., Ltd. | Executive Director and General Manager | August 1, 2017 | No | |
| Duan Xiufeng | Shandong Red April E-commerce Co., Ltd. | Executive Director and General Manager | August 30, 2017 | No | |
| Duan Xiufeng | Zhongfu Huaxia Management Consulting Co., Ltd. | Chairman | December 23, 2005 | No | |
| Duan Xiufeng | Shandong Red April Holdings Group Co., Ltd. | Executive Director and General Manager | May 5, 2015 | No | |
| Duan Xiufeng | Shandong Red April Venture Capital Co., Ltd. | Executive Director and General Manager | April 24, 2017 | No | |
| Duan Xiufeng | Shandong Red April New Energy Technology Co., Ltd. | Executive Director and General Manager | December 13, 2017 | No |
| Duan Xiufeng | Jinan Rural Commercial Bank Co., Ltd | Supervisor | May 22, 2020 | No | |
| Cheng Min | Zhuhai Gexin Development Co., Ltd. | Chairman and General Manager | September 1, 2018 | Yes | |
| Description of employment in the other companies | None | ||||
Punishments imposed by the securities regulatory institution to the incumbent directors, supervisors and senior managementpersonnel or those who resigned in the report period in the recent three years
□ Applicable √ Not applicable
3. Remuneration of directors, supervisors and senior management
Decision-making procedures, determination basis, and actual payment regarding the remunerations of directors, supervisors andsenior management personnelDuring the report period, the Board of Directors of the Company appraised the performance and performanceof senior management personnel on an annual basis and implemented an appraisal system based on the results oftheir work in ethics, competence, diligence and performance. The Company adhered to the principle ofreasonableness, fairness and justice and laid emphasis on combination of material incentive and spiritual incentive.As for the material incentive, the Company paid attention to reasonably controlling reward grade and properlywidening the reward gap and emphasized the time and frequency of reward. As for the spiritual incentive, theCompany paid attention to combining the corporate objectives with the spirit of dedication, sense of socialresponsibility and career achievement of the senior management personnel.
Remunerations of the directors, supervisors and senior management personnel in the report period
Unit: 10,000 yuan
| Name | Title | Gender | Age | Employment status | Total amount of pre-tax remuneration received from the Company | Whether to receive remuneration from a related party of the Company |
| Dong Mingzhu | Chairperson & President | Female | 67 | Incumbent | 1,098 | No |
| Zhang Wei | Chairman and secretary of the Party Committee | Male | 45 | Incumbent | 366.67 | No |
| Guo Shuzhan | Director | Male | 65 | Incumbent | Yes |
| Zhang Jundu | Director | Male | 61 | Incumbent | Yes | |
| Deng Xiaobo | Director, Vice President, Secretary of the Board of Directors | Male | 46 | Incumbent | 46.67 | No |
| Liu Shuwei | Independent director | Female | 69 | Incumbent | 15 | Yes |
| Wang Xiaohua | Independent director | Male | 60 | Incumbent | 15 | Yes |
| Xing Ziwen | Independent director | Male | 59 | Incumbent | 15 | No |
| Zhang Qiusheng | Independent director | Male | 54 | Incumbent | No | |
| Cheng Min | Supervisor | Female | 41 | Incumbent | Yes | |
| Duan Xiufeng | Supervisor | Male | 58 | Incumbent | Yes | |
| Wang Fawen | Employee supervisor | Female | 38 | Incumbent | 98.02 | No |
| Zhuang Pei | Vice president | Male | 57 | Incumbent | 260 | No |
| Tan Jianming | Vice President and Chief Engineer | Male | 57 | Incumbent | 400 | No |
| Shu Lizhi | Vice president | Male | 52 | Incumbent | 150 | No |
| Liao Jianxiong | Finance Chief, Assistant to President | Male | 48 | Incumbent | 122.89 | No |
| Fang Xiangjian | Vice president | Male | 44 | Incumbent | 280 | No |
| Huang Hui | Director, Executive President | Male | 58 | Resigned | 10.42 | No |
| Total | -- | -- | -- | -- | 2,877.67 | -- |
VI. Performance of directors' duties during the report period
1. The Board of Directors for the report period
| Session of meeting | Date of convening | Date of disclosure | Meeting resolutions |
| The 30th Meeting of the 11th Session of the Board of Directors | November 19, 2021 | November 20, 2021 | For details, please refer to Announcement of Resolutions of the 30th Meeting of the 11th |
| Session of the Board of Directors (Announcement No. 2021-079) on www.cninfo.com.cn | |||
| The 29th Meeting of the 6th Board of Directors | November 16, 2021 | November 17, 2021 | For details, please refer to Announcement of Resolutions of the 29th Meeting of the 11th Board of Directors (Announcement No. 2021-075) on www.cninfo.com.cn |
| The 28th Meeting of the 6th Board of Directors | October 26, 2021 | October 27, 2021 | For details, please refer to "Third Quarterly Report 2021" (Announcement No. 2021-071) on www.cninfo.com.cn |
| The 27th Meeting of the 11th Board of Directors | September 28, 2021 | September 29, 2021 | For details, please refer to Announcement of Resolutions of the 27th Meeting of the 11th Board of Directors (Announcement No. 2021-066) on www.cninfo.com.cn |
| The 26th Meeting of the 11th Board of Directors | August 30, 2021 | August 31, 2021 | For details, please refer to Announcement of Resolutions of the 26th Meeting of the 11th Board of Directors (Announcement No. 2021-058) on www.cninfo.com.cn |
| The 25th Meeting of the 11th Board of Directors | August 20, 2021 | August 23, 2021 | For details, please refer to "2021 Semi-Annual Report" on www.cninfo.com.cn. |
| The 24th Meeting of the 11th Board of Directors | August 2, 2021 | August 4, 2021 | For details, please refer to "Announcement of Resolutions of the 24th Meeting of the 11th Board of Directors" (Announcement No. 2021-050) on www.cninfo.com.cn |
| The 23rd Meeting of the 11th Board of Directors | June 27, 2021 | June 28, 2021 | For details, please refer to "Announcement of Resolutions of the 23rd Meeting of the 11th Board of Directors" (Announcement No. 2021-041) on www.cninfo.com.cn |
| The 22nd Meeting of the 11th Board of Directors | June 18, 2021 | June 21, 2021 | For details, please refer to Announcement of Resolutions of the 22nd Meeting of the 11th Session of the Board of Directors (Announcement No. 2021-038) on www.cninfo.com.cn |
| The 21st Meeting of the 11th Board of Directors | May 26, 2021 | May 27, 2021 | For details, please refer to "Announcement of Resolutions of the 21st Meeting of the 11th Board of Directors" (Announcement No. 2021-030) on www.cninfo.com.cn |
| The 29th Meeting of the 6th Board of Directors | April 28, 2021 | April 29, 2021 | For more details, please refer to "First Quarterly Report 2021" on www.cninfo.com.cn. |
| The 19th Meeting of the 11th Board of Directors | April 28, 2021 | April 29, 2021 | For details, please refer "Announcement of Resolutions of the Nineteenth Meeting of the 11th Session of the Board of Directors" (Announcement No. 2021-015) on |
2. Attendance of directors at meetings of the Board of Directors and general meetings of shareholders
www.cninfo.com.cn.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 for the report period | Times of attending meetings of the Board of Directors on the field | 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 to fail to personally attend the meetings of the Board of Directors for two consecutive times? | Times of attending the general meetings of Shareholders |
| Dong Mingzhu | 12 | 2 | 10 | 0 | 0 | No | 3 |
| Zhang Wei | 12 | 2 | 10 | 0 | 0 | No | 3 |
| Guo Shuzhan | 12 | 0 | 12 | 0 | 0 | No | 3 |
| Zhang Jundu | 12 | 1 | 11 | 0 | 0 | No | 3 |
| Liu Shuwei | 12 | 2 | 10 | 0 | 0 | No | 3 |
| Wang Xiaohua | 12 | 2 | 10 | 0 | 0 | No | 3 |
| Xing Ziwen | 12 | 2 | 10 | 0 | 0 | No | 3 |
| Huang Hui | 0 | 0 | 0 | 0 | 0 | No | 0 |
Description of absence from the Board of Directors for two consecutive two timesNot Applicable
3. Directors' objection to relevant matters of the company
Whether directors raised objection 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 □ No
Description of the relevant suggestions on the Company by directors that were adopted or not adoptedDuring the report period, the directors of the Company were able to take the best interests of the Companyand shareholders as their code of conduct, faithfully performed their duties in accordance with the relevantregulations, attended the meetings of the Board of Directors, carefully deliberated the proposals and madesuggestions and comments on the management of the Company, which played a positive role in the effective
decision-making of the Board of Directors, improving the management level and standardizing the operation ofthe 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 made | Other performance of duties | Disagreement details (if any) |
| Audit Committee | Liu Shuwei, Wang Xiaohua, Zhang Jundu | 4 | October 26, 2021 | Deliberated the "Company's Report for the Third Quarter of 2021" | |||
| August 20, 2021 | Deliberated the "Half-Yearly Report for 2021 and its Summary" | ||||||
| April 28, 2021 | Deliberated the "Annual Financial Statement for 2020", "Annual Report for 2020 and its Summary" and "Proposal on Hiring the Company's Auditors for 2021 | ||||||
| April 28, 2021 | Deliberated the "Report for the First Quarterly of for 2021 and Its Text" | ||||||
| Remuneration and Assessment Committee | Wang Xiaohua, Liu Shuwei, Zhang Wei | 2 | April 28, 2021 | Deliberated the "Remuneration Distribution Plan for Directors, Supervisors and Senior Management Personnel for 2020" | |||
| June 17, 2021 | Agreed to submit the "Employee Stock Ownership Plan Phase I of Gree Electric Appliances, Inc of Zhuhai (Draft)" to the Board of Directors of the Company for deliberation |
| Nomination Committee of the Board of Directors | Xing Ziwen, Wang Xiaohua, Zhang Wei | 1 | November 19, 2021 | Deliberated the "Proposal on Mr. Fang Xiangjian's Qualification as the Vice President of the Company" |
VIII. Work of the Board of SupervisorsWhether the Board of Supervisors has identified any risks in the company during its supervision activities during the report period
□ Yes √ No
The Board of Supervisors has no objection to the supervision matters during the report period.IX. Company's staff
1. Number of employees, their specialties and education level
| Number (person) of on-the-job employees of the parent company | 24,453 |
| Number (person) of on-the-job employees of the main subsidiaries | 57,431 |
| Total number (person) of on-the-job employees | 81,884 |
| Total number (person) of employees receiving salaries for the current period | 81,884 |
| Number (person) of retired employees for whom the parent company and main subsidiaries need to bear expenses | 386 |
| Formation of specialties | |
| Category of formation of specialties | Number (person) of employees in the formation |
| Manufacturing Personnel | 59,973 |
| Sales Personnel | 2,964 |
| Technicians | 14,233 |
| Financial Personnel | 1,104 |
| Administrative Personnel | 3,610 |
| Total | 81,884 |
| Educational level | |
| Education level category | Number (person) of employees |
| Bachelor degree or above | 17,274 |
| College Degree | 13,095 |
| Technical Secondary School Education and below | 51,515 |
| Total | 81,884 |
2. Remuneration Policy
In 2021, the Company implemented Employee Stock Ownership Plan Phase I. The scope of participantsincluded directors (excluding independent directors), supervisors and senior management of the Company, as wellas middle-level cadres and core employees of the Company and its holding subsidiaries who played an importantrole in the overall performance and medium- and long-term development of the Company, covering a wide areaand a large scale. The implementation of the Employee Stock Ownership Plan was conducive to improving thelong-term incentive mechanism of the Company, attracting and retaining outstanding talents, enhancing thecohesiveness and core competitiveness of the Company, forming a benefit-sharing and risk-sharing mechanismbetween shareholders and management, middle-level cadres and core employees, and ensuring the realization ofthe Company's future development strategy and promoting business objectives.Facing the uncertainty and complexity of the epidemic prevention and control and macroeconomicenvironment, the company attached great attention to and protected the immediate interests of employees,optimized and adjusted the remuneration plan accordingly, and continuously improved the job-based andperformance-oriented remuneration mechanism. At the same time, focused on high-quality talent, continued toimplement the project-based evaluation mechanism for scientific and technological talent, incentives for scientificand technical personnel and R&D technology to make breakthroughs; strengthened the main responsibility of theemployer, implemented wage reform pilot, stable retention of the core team, optimized the construction of talentladder, and promoted the improvement of organizational effectiveness.
3. Training plan
Talent is the key to innovation. Gree has always adhered to the principle of "focus on the company's strategiclayout and insist on independent cultivation of talents", and has taken the initiative of talent cultivation byindependently building a training system, and increased the cultivation of innovative talents, and has realized thesupply of high-quality talents by constructing a diversified independent cultivation mechanism and acceleratingthe construction of Gree Vocational College.I. Increase the training of innovative talents to meet the supply of high-quality talents for the productionand operation of the company
Gree's talent team has been growing over the years, and in 2021, the company continued to increase internaltalent training, accelerated the continuous upgrade of the talent structure, and created a young team of officers andentrepreneurs.
Independently training innovative scientific and technological talents. The key to enhancing the independentinnovation ability of enterprises lies in cultivating innovative scientific and technological talents. According to thegrowth path of technical R&D personnel, the company set up multi-level and multi-dimensional training programsand courses, and specially implemented practical technical training for the manufacturing industry, which wascarried out monthly and uninterruptedly according to needs, so as to realize the continuous deepening training oftechnical talents and promote the development of employees to professional talents in high, precise and advancedfields.
Cultivating skilled craftsmen for precision manufacturing. In order to adapt to the transformation of theproduction model to automation and intelligence, the Company accelerates the training of applied-skilled talents.The company vigorously carried forward the model worker and craftsman spirit of the new era, made full use of
the advantages of resources such as Guangdong technician, skilled master studio and technician workstation,deepened the cultivation mechanism of the company's highly skilled talents, continued to optimize the cultivationpath of the company's employees growing from common people to skilled talents through a series of initiativessuch as skill training, skill competition and skill level assessment. At the same time realizing normalization of jobtraining, normalized professional training and effective upgrading training, the company selected and cultivated anumber of "high-tech and cutting-edge" skilled talents.Creating a management team that makes a difference. Deepened and promoted the whole staff learning anddevelopment plan, and focused on the development of all levels of management cadres, core cadres, supervisors,team leaders, college students and other thematic training programs. Through the design of thematic projects,strengthened the training effect, drove the overall training quality to improve and strove to forge a passionate,capable, entrepreneurial, capable staff, to add talent for the development of enterprises. The total number ofspecial training sessions conducted at all levels in 2021 exceeds 20,000, with about 1.2 million participants.II. Strengthening the ideological education and cultural dissemination, gathering the centripetal force ofthe staff to work and start a businessThe company attached great importance to the ideological education work of the staff, in-depth and solidorganization of the regular military training work of the whole staff, and promoted the general staff's spiritualoutlook, hammering organizational discipline through the regular big training special military training evaluation.Carried out the flag-raising ceremony on a regular basis to uphold the sacred mission of national flag dignity andto educate patriotism. Organized and carried out the cultural construction and evaluation activities in the factoryarea to give full play to the effect of subtle influence and cohesion of the cultural construction in the factory area.Strengthened the ideological education of party members, carefully edited, planned and designed the special partybuilding magazine "East" to promote the majority of employees, especially the party members to arm their minds,guide practice and promote work.Further deepened the value of Gree culture dissemination. The company built an internal knowledge andinformation sharing system around Gree's practical experience in production, operation and management, andpromoted internal experience extraction and inheritance activities. Through the organization and implementationof learning programs such as micro-classes for management cadres, lecture halls for technology experts, lecturehalls for skilled craftsmen, and lecture halls for internal lecturers, the company realized comprehensive Greeexperience inheritance and Gree culture dissemination. 2021 Organized approximately 90 extraction activitiesthroughout the year, with more than 4,000 participants. Up to now, the company has dug out and nurtured 200group-level quality instructors and developed 800 quality courses.III. Accelerated the construction of Gree Vocational College and promoted the diversification of training tovocational education
The construction of Gree Vocational College campus officially started in February 2021 and is scheduled tobe completed in July 2022. The college upon completion, as a special private higher education institution, willface the national major development strategy and the demand for talents in the Greater Bay Area. With majorsdocked with strategic emerging industries such as intelligent equipment, artificial intelligence, Internet of Things,build a number of major clusters with high market demand and strong competitiveness and development potentialin high quality, making student training more suitable for economic and social development needs.
The college will, set a benchmark and industry model for talent training in China's manufacturing industrybased on Gree, build a highland for cultivating high-quality technical skills talents based on the Greater Bay Area
and set new standards for talent training based on the manufacturing industry. In about five years, the college willform the characteristics and talent cultivation mechanism that connects the education chain with the industry chain,the value chain with the innovation chain, and create a Chinese brand of enterprise school with internationalcharacteristics that deeply integrates industry and education.Over the years, Gree has deepened the integration of industry and education, and won the 7th Huang YanpeiAward for Outstanding Contribution to Vocational Education for its advanced exploration and practice inschool-enterprise cooperation, being the only enterprise unit to receive the award.IV. Closely following the company's new retail mode marketing layout, supporting to upgrade thecompany's first-line market serviceClosely following the company's new retail marketing model and around the global sales market support,continuously innovated management, and improved after-sales skills by combining training and management withskills and service, which effectively supported and promoted the first-line market service upgrade.In 2021, the training followed the business more actively, followed the company's large-scale engineeringsales and services, and completed the special training support for significant projects such as metro and militaryindustry with high quality.The company innovated means and forms and conducted overseas customer training and technicalconsultation remotely online to support overseas market development and services due to the impact of theepidemic. The company completed 600 technical training sessions in 30 countries and trained 5000 customersthroughout the year.The company continued to develop and innovate to bring into play the dual effectiveness of training andmanagement. Organized the first class of Star Service Engineer Certification, establishing the service benchmark.Carried out safety education activities themed “Alarm Bells Ring, Remember Safety” to prevent and reduceservice safety hazards. Facing domestic market demand, precipitated quality training program brands. Organizednational touring technical training camp, Gree after-sales elite class, instructor certification and online speciallearning activities to improve the professional skills of after-sales personnel. In 2021, the after-sales servicecompleted 5,200 learning sessions and trained 480,000 people in total.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Distribution of profits and capitalization of capital reserve by the CompanyProfit distribution policy during the report period, especially the formulation, implementation or adjustment of the cash dividendpolicy
√ Applicable □ Not applicable
2020 Annual Equity Distribution Plan: cash dividends of 30 yuan (tax included) per 10 shares to allshareholders based on 5,584,177,165 shares (total share capital of the Company of 6,015,730,878 shares, less431,553,713 shares repurchased up to the disclosure date of the 2020 Annual Equity Distribution ImplementationAnnouncement), no bonus shares and no transfer of share capital by way of reserve. The total cash dividend was16,752,531,495 yuan.
The cash dividend distribution proportion of the Company since its listing is in line with the provisions of theArticles of Association of Gree Electric Appliances, Inc of Zhuhai and cash dividend distribution policy of theCompany is in line with the provisions of laws and regulations such as the Articles of Association of Gree ElectricAppliances, Inc of Zhuhai and the requirements of the resolutions of the general meeting of shareholders. Thecriteria for dividend distribution and the dividend distribution ratio are clear and unambiguous, the relevantdecision-making procedures and mechanisms are complete, and the independent directors have performed theirduties and responsibilities with due diligence and have played their roles. Minority shareholders have adequateopportunities to express their opinions and demands on profit distribution, and the legitimate rights and interestsof 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 resolution: | Yes |
| Whether the dividend criteria and ratio are clear and unambiguous: | Yes |
| Whether the relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether independent directors perform their duties and play their due roles: | Yes |
| Whether minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests are adequately protected: | Yes |
| The conditions and procedures are transparent and comply with regulations if the cash dividend policy is adjusted or changed: | Not Applicable |
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 capitalisation of capital reserves for the report period
√ Applicable □ Not applicable
| Number of dividend shares per ten shares (shares) | 0 |
| Number of dividends per ten shares (yuan) (tax included) | 20.00 |
| Share capital base for the distribution proposal (shares) | 5,536,677,733 |
| Cash dividend amount (yuan) (tax included) | 11,073,355,466.00 |
| Amount of cash dividends by other means (e.g. share repurchase) (yuan) | 21,817,510,524.13 |
| Total cash dividends (including other methods) (Yuan) | 32,890,865,990.13 |
| Distributable profit (yuan) | 60,491,410,176.15 |
| Proportion of total cash dividends (including other methods) to total profit distribution | 100% |
| 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 profit distribution or capitalization of capital reserve preplan | |
| The Company intends to pay a cash dividend of 20 yuan (tax included) per 10 shares to all shareholders based on the total number of 5,536,677,733 shares (the total share capital of the Company 5,914,469,040 shares less 377,791,307 shares in the special account for repurchase) entitled to profit distribution as of April 29, 2022, without bonus shares and without capitalization of capital reserve. According to "Self-regulatory Guideline No. 9 - Share Repurchase for Listed Companies on Shenzhen Stock Exchange", the shares in the repurchase account are not entitled to profit distribution. If during the period from the date of disclosure of this announcement to the date of registration of the implementation of the equity distribution, the total amount of shares entitled to profit distribution of the Company changes due to the exercise of equity incentive, conversion of convertible bonds, share repurchase, etc., the Company will adjust the total amount of dividend accordingly on the principle that the distribution ratio per share remains unchanged. | |
XI. Implementation of the company's Equity Incentive Plan, Employee Stock Ownership Plan,or other employee incentive measures
√ Applicable □ Not applicable
1. Equity Incentive
Not ApplicableEquity Incentives Received by Directors and Senior Management of the Company
□ Applicable √ Not applicable
Appraisal mechanism and motivation of senior managementNot Applicable
2. Implementation of Employee Stock Ownership Plan
√ Applicable □ Not applicable
All Employee Stock Ownership Plans in effect during the report period
| Scope of employees | Number of employees | Total number of shares held | Changes | Proportion to the total share capital of | Source of funding for implementation |
| (shares) | listed companies | of the plan | |||
| Directors (excluding independent directors), supervisors and senior management of the Company, as well as middle-level cadres and core employees of the Company and its subsidiaries who have been identified by the Board of Directors as playing an important role in the overall performance and medium- and long-term development of the Company | 4,845 | 46,334,473 | None | 0.78% | Legal remuneration of employees and self-financing funds obtained through other means as permitted by laws and administrative regulations |
Shareholdings of Directors, Supervisors and Senior Management in the Employee Stock Ownership Plan during the report period
| Name | Title | Number of shares held at the beginning of the report period (shares) | Number of shares held at the end of the report period (shares) | Proportion to the total share capital of listed companies |
| Dong Mingzhu | Chairperson & President | 0 | 10,000,000 | 0.17% |
| Tan Jianming | Vice President and Chief Engineer | 0 | 488,469 | 0.01% |
| Zhuang Pei | Vice president | 0 | 420,253 | 0.01% |
| Fang Xiangjian | Vice president | 0 | 391,890 | 0.01% |
| Zhang Wei | Chairman and secretary of the Party Committee | 0 | 183,328 | 0.00% |
| Deng Xiaobo | Director, Vice President, Secretary of the Board of Directors | 0 | 107,600 | 0.00% |
| Shu Lizhi | Vice president | 0 | 99,719 | 0.00% |
| Liao Jianxiong | Finance Chief, Assistant to President | 0 | 77,663 | 0.00% |
| Wang Fawen | Employee representative supervisors | 0 | 51,355 | 0.00% |
Changes in asset management institutions 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
Exercise of shareholders' rights during the report periodNoneOther relevant circumstances and explanations of the Employee Stock Ownership Plan during the report period
□ Applicable √ Not applicable
Change in membership of the Employee Stock Ownership Plan Management Committee
□ Applicable √ Not applicable
Financial Impact of Employee Stock Ownership Plan on Listed Companies and Related Accounting Treatment during the reportperiod
√ Applicable □ Not applicable
In accordance with Accounting Standards for Business Enterprises No. 11 "Share-based Payment", the Company's equity-settledshare-based payment expense for Year 2021 was 31,002,910.71 yuan.Termination of Employee Stock Ownership Plan during the report period
□ Applicable √ Not applicable
Other statementsNone
3. Other Employee Incentives
□ Applicable √ Not applicable
XII. Construction and implementation of the internal control system during the report period
1. Construction and implementation of internal control
The company continued to improve the construction of internal control system and improved themanagement mechanism of rules and regulations. The company regularly reviewed the internal control system andprocess, and improved and re-improves the system and process. At the same time, the company strictlyimplemented the rules and regulations, continuously strengthened compliance management and risk management,and built a perfect internal control system and process system.The Company continued to pay attention to and strengthen the control of high-risk areas such as financialmanagement, asset management, capital activities, procurement business, production management, sales businessand engineering projects, and effectively improved the awareness of compliance management and the ability toprevent and control major risks.
During the report period, the Company updated and improved its internal control system in a timely mannerin accordance with the provisions of the Basic Standard for Enterprise Internal Control and its accompanyingguidelines, taking into account changes in the Company's internal and external environment, internal organizationand management requirements.
Based on the determination of significant defects in internal control, the Company did not have anysignificant defects or material defects in internal control in the financial reporting and non-financial reporting in2021. Through the operation, analysis and evaluation of the internal control system, the Company effectivelyprevented the risks in operation and management and promoted the achievement of internal control objectives. Inthe future, the Company will continue to perfect the internal control system, standardize the implementation of theinternal control system, strengthen the supervision and inspection of internal control, and promote the healthy andsustainable development of the Company.
2. Details of significant defects in internal control identified during the report period
□ Yes √ No
XIII. Management and control of the subsidiaries during the report periodDuring the report period, the subsidiaries included in the scope of consolidation by way of businesscombination not under the same control include the holding subsidiary Gree Altairnano New Energy Inc. TheCompany strictly followed the Internal Control System in the internal management and risk control of itssubsidiaries, and the subsidiaries reported their operations to the Company, and there were no undisclosed mattersthat should be disclosed and no loss of control of the subsidiaries.XIV. Internal Control Self-Evaluation Report or Internal Control Audit Report
1. Internal Control Self-Evaluation Report
| Date of Disclosure of the Full Internal Control Evaluation Report | April 30, 2022 | |
| Index of full text disclosure of internal control evaluation reports | www.cninfo.com.cn | |
| Total assets of the units included in the scope of evaluation as a proportion to the total assets of the company's consolidated financial statements | 97.00% | |
| Operating revenues of the units included in the scope of evaluation as a proportion to the operating revenues of the company's consolidated financial statements | 98.00% | |
| Defect identification criteria | ||
| Category | Financial statements | Non-Financial statement |
| Qualitative standard | For details, please refer to the "2021 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2022 | For details, please refer to the "2021 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2022 |
| Quantitative standard | For details, please refer to the "2021 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2022 | For details, please refer to the "2021 Annual Internal Control Self-Evaluation Report of Gree Electric Appliances, Inc of Zhuhai disclosed on www.cninfo.com.cn on April 30, 2022 |
| Number of significant defects in the financial reporting (Nos) | 0 | |
| Number of significant defects in the non-financial reporting (Nos) | 0 |
| Number of material defects in the financial reporting (Nos) | 0 |
| Number of material defects in the non-financial reporting (Nos) | 0 |
2. Internal Control Audit Report
√ Applicable □ Not applicable
| Deliberation opinion section in the internal control audit report | |
| We hold that the Company has maintained effective internal control of financial statements in accordance with the Basic Rules for Internal Control of Enterprises and relevant regulations. | |
| Disclosure of Internal Control Audit Report | Disclosure |
| Date of Disclosure of Full Internal Control Audit Report | April 30, 2022 |
| Index of Full Text Disclosure of Internal Control Audit Report | www.cninfo.com.cn |
| Type of Internal Control Audit Report Opinions | Standard unqualified audit opinion |
| Is there a significant defect in the non-financial reporting? | 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 of Directors'Self-evaluation Report
√ Yes □ No
XV. Self-examination and rectification of listed company governance special action
Not Applicable
Section V Environmental and Social Responsibility
I. Major environmental problemsWhether the listed company and its subsidiaries are listed as key pollutant discharge units published by the environmental protection department
√ Yes □ No
| Serial No. | Name of Company or Subsidiary | Names of Major Pollutants and Particular Pollutants | Discharge Method | Number of discharge ports | Distribution of discharge ports | Discharge Concentration | Pollutant Discharge Standard Implemented | Total Emission | Total Approved Emission | Over-standard Emission |
| 1 | GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | COD | Intermittent discharge | 3 | Phase III sewage station | 49 mg/L | Level 2 limit of the second period specified in the Discharge Limits of Water Pollutants (DB44/26-2001) | 8.058 tons/year | 26.4 tons/year | None |
| Phase IV sewage station | 22 mg/L | |||||||||
| Phase VI sewage station | 20 mg/L | |||||||||
| Ammonia nitrogen | 3 | Phase III sewage station | 0.300 mg/L | 0.114 tons/year | 3.6 tons/year | |||||
| Phase IV sewage station | 0.526 mg/L | |||||||||
| Phase VI sewage station | 0.365 mg/L | |||||||||
| 2 | Zhuhai Landa Compressor Co., Ltd. | Total Nitrogen | Continuous discharge | 1 | Area C sewage station | 5.25 mg/L | Pollutant Discharge Standard for Electroplating Water (DB44/1597-2015) | 1.424 tons/year | 4.41 tons/year | None |
| COD | 20.545 mg/L | 3.113 tons/year | 14.7 tons/year | |||||||
| Ammonia nitrogen | 0.753 mg/L | 0.088 tons/year | 2.35 tons/year | |||||||
| Total Zinc | 0.074 mg/L | 0.0194 ton/year | 0.29 ton/year |
| Total Nickel | 1 | General assembly pretreatment discharge port | 0.0136 mg/L | 0.00034 ton/year | 0.015 ton/year | ||
| Total value | Organized discharge | 6 | Electrophoresis drying waste gas vent 1 | 5.255 mg/m? | Emission Standard for Volatile Organic Compounds in 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 For Electroplating Pollutants GB 21900-2008 Emission Standard For Air Pollutants From Industrial Furnaces GB | 2.088 tons/year | 2.49 tons/year |
| Electrophoresis drying waste gas vent 2 | 5.37 mg/m? | ||||||
| B3 spray paint room waste gas vent | 5.375 mg/m? | ||||||
| Spraying waste gas vent 1 | 10.38 mg/m? | ||||||
| Spraying waste gas vent 2 | 9.72 mg/m? | ||||||
| Spraying waste gas vent 3 | 12.825 mg/m? | ||||||
| 6 | Silk screen printing waste gas vent | 1.5 mg/m? | 3.615 tons/year | 2021 emission permit not approved | |||
| RCO catalytic regeneration system emission outlet | 1.485 mg/m? | ||||||
| Injection molding waste gas vent | 3.64 mg/m? | ||||||
| Hydrocarbon cleaning emission outlet | 2.24 mg/m? | ||||||
| Paint dipping waste gas vent | 3.6 mg/m? |
| Pre-treatment waste gas vent | 4.815 mg/m? | 9078-1996 Emission Standard of Volatile Organic Compounds For Surface Coating (automobile Manufacturing) DB44/816-2010 | ||||||||
| 3 | Gree Electric Appliances Appliance (Hefei) Co., Ltd | COD | Intermittent discharge | 2 | Household | 10.6 mg/L | Hefei West Group Wastewater Treatment Plant Connection Standards and "Comprehensive Sewage Discharge Standards" (GB8978-1996) Level III Criteria | 0.8832602 tons/year | 208.704209 tons/year | None |
| Commercial | 9.9 mg/L | |||||||||
| NH3-N | 2 | Household | 4.45 mg/L | 0.3966359 tons/year | 20.869721 tons/year | |||||
| Commercial | 4.80 mg/L | |||||||||
| TN | 2 | Household | 5.39 mg/L | 0.49550824 ton/year | 29.815077 ton/year | |||||
| Commercial | 6.19 mg/L | |||||||||
| TP | 2 | Household | 0.18 mg/L | 0.01507446 ton/year | 3.578266 tons/year | |||||
| Commercial | 0.17 mg/L | |||||||||
| 4 | Zhuhai Kaibang Motor Manufacturing Co., Ltd | pH value | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 7.8 | Level I Criteria of Class II Pollutants (Second Period) Maximum Allowable Discharge Concentration of Water Pollutant Discharge Limits of Guangdong (DB | / | 2021 emission permit not approved | None |
| Domestic sewage outfall DW002 | 8.2 | |||||||||
| Chromaticity | Intermittent discharge | 1 | Industrial effluent outfall WS-39214A | 2 | / | |||||
| Suspended matter | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 4(L) mg/L | / |
| Domestic sewage outfall DW002 | 4(L) mg/L | 44/26-2001) |
Chemical oxygendemand
| Chemical oxygen demand | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 8mg/L | 1.719857136 tons/year | |
| Domestic sewage outfall DW002 | 4mg/L | |||||
| Five-day biochemical oxygen demand | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 3.2 mg/L | 0.83084764 tons/year | |
| Domestic sewage outfall DW002 | 1.8 mg/L | |||||
| Phosphate | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 0.3 mg/L | 0.007172309 tons/year | |
| Domestic sewage outfall DW002 | 0.02 mg/L | |||||
| Ammonia nitrogen | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 0.068 mg/L | 0.11884688 tons/year | |
| Domestic sewage outfall DW002 | 0.063 mg/L | |||||
| Total Nitrogen | Intermittent discharge | 2 | Industrial effluent outfall WS-39214A | 2.36 mg/L | 0.150982587 tons/year | |
| Domestic sewage outfall DW002 | 1.27 mg/L | |||||
| Petroleum | Intermittent discharge | 1 | Industrial effluent outfall WS-39214A | 0.06(L) mg/L | / | |
| Animal and vegetable oil | Intermittent discharge | 1 | Domestic sewage outfall DW002 | 0.06(L) mg/L | / |
| Particulate matter | Organized discharge | 2 | Die-casting waste gas vent FQ-39214A | 5 mg/m? | Process Waste Gas Air Pollutant Emission Limits (Second Period) of Air Pollutant Emission Limits of Guangdong (DB 44/27-2001) | 2.1148 tons/year | ||||
| Melting aluminum waste waste gas vent FQ-39214A1 | 5.4 mg/m? | |||||||||
| Sulfur dioxide | Organized discharge | 2 | Die-casting waste gas vent FQ-39214A | 15 mg/m? | 3.3875 tons/year | |||||
| Melting aluminum waste waste gas vent FQ-39214A1 | 11 mg/m? | |||||||||
| Nitrogen Oxide | Organized discharge | 2 | Die-casting waste gas vent FQ-39214A | 17 mg/m? | 5.254 tons/year | |||||
| Melting aluminum waste waste gas vent FQ-39214A1 | 17 mg/m? | |||||||||
| Benzene | Organized discharge | 1 | Immersion paint waste gas vent FQ-39214B | 0.09 mg/m? | Emission Limit of VOCs from waste gas cylinder of Guangdong Surface Coating (Automobile Manufacturing) Volatile Organic Compound Emission Standard(DB 44/816-2010) | 0.005984 tons/year | ||||
| Toluene+Xylene | Organized discharge | 1 | Immersion paint waste gas vent FQ-39214B | 2.27 mg/m? | 0.602552 tons/year | |||||
| Total VOCs | Organized discharge | 1 | Immersion paint waste gas vent FQ-39214B | 5.31 mg/m? | 2.08756 tons/year | |||||
| 5 | Zhuhai Gree | Benzene | Organized | 12 | Plant No.1 FQ113913A01 | 4.51 mg/m? | Second Period Level | 0.017 ton/year | 2021 emission permit | None |
| Electrical Co., Ltd | discharge | Plant No.1 FQ113913A02 | 0.01 mg/m? | II Criteria of Guangdong "Air Pollutant Emission Limits" (DB 44/27-2001) | not approved | ||||
| Plant No.1 FQ113913A03 | 0.02 mg/m? | ||||||||
| Plant No.1 FQ113913A04 | 0.01 mg/m? | ||||||||
| Plant No.1 FQ113913A05 | 0.053 mg/m? | ||||||||
| Plant No.1 FQ113913A06 | 0.04 mg/m? | ||||||||
| Plant No.1 FQ113913A07 | 0.38 mg/m? | ||||||||
| Plant No.1 FQ113913A08 | 0.01 mg/m? | ||||||||
| Plant No.3 FQ113913A09 | 0.02 mg/m? | ||||||||
| Plant No.3 FQ113913A10 | 0.02 mg/m? | ||||||||
| Plant No.3 FQ113913A11 | 0.01 mg/m? | ||||||||
| Plant No.3 FQ113913A12 | 0.01 mg/m? | ||||||||
| Toluene | Organized discharge | 12 | Plant No.1 FQ113913A01 | 0.53 mg/m? | Second Period Level II Criteria of Guangdong "Air Pollutant Emission Limits" (DB 44/27-2001) | 0.013 ton/year | 2021 emission permit not approved | None | |
| Plant No.1 FQ113913A02 | 0.037 mg/m? | ||||||||
| Plant No.1 FQ113913A03 | 0.07 mg/m? | ||||||||
| Plant No.1 FQ113913A04 | 0.03 mg/m? | ||||||||
| Plant No.1 FQ113913A05 | 0.047 mg/m? | ||||||||
| Plant No.1 FQ113913A06 | 0.02 mg/m? | ||||||||
| Plant No.1 FQ113913A07 | 0.22 mg/m? |
| Plant No.1 FQ113913A08 | ND | |||||||
| Plant No.3 FQ113913A09 | 0.17 mg/m? | |||||||
| Plant No.3 FQ113913A10 | 0.09 mg/m? | |||||||
| Plant No.3 FQ113913A11 | 0.03 mg/m? | |||||||
| Plant No.3 FQ113913A12 | 0.08 mg/m? | |||||||
| Xylene | Organized discharge | 12 | Plant No.1 FQ113913A01 | 0.28 mg/m? | Second Period Level II Criteria of Guangdong "Air Pollutant Emission Limits" (DB 44/27-2001) | 1.63 tons/year | 2021 emission permit not approved | None |
| Plant No.1 FQ113913A02 | 0.16 mg/m? | |||||||
| Plant No.1 FQ113913A03 | 0.18 mg/m? | |||||||
| Plant No.1 FQ113913A04 | 0.03 mg/m? | |||||||
| Plant No.1 FQ113913A05 | 1.21 mg/m? | |||||||
| Plant No.1 FQ113913A06 | 0.34 mg/m? | |||||||
| Plant No.1 FQ113913A07 | 4.86 mg/m? | |||||||
| Plant No.1 FQ113913A08 | 0.11 mg/m? | |||||||
| Plant No.3 FQ113913A09 | 22.7 mg/m? | |||||||
| Plant No.3 FQ113913A10 | 22.9 mg/m? | |||||||
| Plant No.3 FQ113913A11 | 2.4 mg/m? | |||||||
| Plant No.3 FQ113913A12 | 16.9 mg/m? |
| Total volatile organic compounds | Organized discharge | 13 | Plant No.1 FQ113913A01 | 10.9 mg/m? | Second Period of Guangdong "Emission Standards for Volatile Organic Compounds in Furniture Manufacturing Industry" (DB 44/814-2010) | 2.317 tons/year | 2021 emission permit not approved | None |
| Plant No.1 FQ113913A02 | 3.05 mg/m? | |||||||
| Plant No.1 FQ113913A03 | 1.83 mg/m? | |||||||
| Plant No.1 FQ113913A04 | 0.76 mg/m? | |||||||
| Plant No.1 FQ113913A05 | 6.37 mg/m? | |||||||
| Plant No.1 FQ113913A06 | 2.15 mg/m? | |||||||
| Plant No.1 FQ113913A07 | 13.3 mg/m? | |||||||
| Plant No.1 FQ113913A08 | 6.06 mg/m? | |||||||
| Plant No.3 FQ113913A09 | 28.1 mg/m? | |||||||
| Plant No.3 FQ113913A10 | 28.1 mg/m? | |||||||
| Plant No.3 FQ113913A11 | 6.46 mg/m? | |||||||
| Plant No.3 FQ113913A12 | 20.5 mg/m? | |||||||
| Plant No.2 FQ113913B01 | 2.81 mg/m? | |||||||
| Phenols | Organized discharge | 12 | Plant No.1 FQ113913A01 | ND | Second Period Level II Standard in Table 2 of Guangdong Air Pollutant Emission Limit Value Standard(DB 44/27-2001) | / | 2021 emission permit not approved | None |
| Plant No.1 FQ113913A02 | ND | |||||||
| Plant No.1 FQ113913A03 | ND | |||||||
| Plant No.1 FQ113913A04 | ND | |||||||
| Plant No.1 FQ113913A05 | ND |
| Plant No.1 FQ113913A06 | ND | |||||||
| Plant No.1 FQ113913A07 | ND | |||||||
| Plant No.1 FQ113913A08 | ND | |||||||
| Plant No.3 FQ113913A09 | ND | |||||||
| Plant No.3 FQ113913A10 | ND | |||||||
| Plant No.3 FQ113913A11 | ND | |||||||
| Plant No.3 FQ113913A12 | ND | |||||||
| Tin and its compounds | Organized discharge | 1 | Plant No.2 FQ113913B01 | 0.908 mg/m? | Second Period Level II Criteria of Guangdong "Air Pollutant Emission Limits" (DB 44/27-2001) | 0.60192 tons/year | 2021 emission permit not approved | None |
| Suspended matter | Intermittent discharge | 1 | Plant No.2 gate DW001 | 12 mg/L | Second Period Level III Standard in Table 4 of Guangdong Water Pollution Discharge Limit Value (DB 44/26-2001) | 0.022 tons/year | 2021 emission permit not approved | None |
| Animal and vegetable oil | 1 | 0.29 mg/L | 0.00070059 ton/year | |||||
| Petroleum | 1 | 0.33 mg/L | 0.0001050885 ton/year | |||||
| Total Nitrogen (calculated as N) | 1 | 6.14 mg/L | 0.008337021 Ton/Year | |||||
| Chemical oxygen demand | 1 | 30 mg/L | 0.02872419 ton/year |
| Anionic surfactant | 1 | 0.159 mg/L | 0.00050722716 ton/year | |||
| Total phosphorus (calculated as P) | 1 | 0.35 mg/L | 0.0003082596 tons/year | |||
| Ammonia Nitrogen (NH3-N) | 1 | 3.35 mg/L | 0.005254425 tons/year | |||
| Five-day biochemical oxygen demand | 1 | 10.7 mg/L | 0.00770649 tons/year | |||
| Volatile phenol | 1 | 0.05 mg/L | 0.000035 tons/year | |||
| pH value | 1 | 7.70 | / |
The construction and operation of pollution prevention and control facilities
1. Wastewater pollution prevention and control facilities
Each subsidiary of the company is equipped with corresponding wastewater treatment facilities and full-timeenvironmental management, operation and monitoring personnel in accordance with the environmental protectionrequirements of the construction project. So far, the systems are in normal operation and have been discharged in astable manner without over-standard discharge.
2. Waste gas pollution prevention and control facilities
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 local emission standards, withoutover-standard discharge.
3. Solid waste treatment and disposal facilities:
The company implemented the classification and collection system of hazardous waste and entrusted thedisposal to the unit with the corresponding disposal qualification, and no illegal disposal occurred.
Assessment of environmental impact from construction projects and other administrative permits for environmental protection
The construction project of the company carried out the environmental impact assessment, obtainedenvironmental impact assessment, passed the environmental acceptance and obtained the emission permit inaccordance with the requirements of the Environmental Protection Bureau.
Contingency plan for environmental emergencies
In order to implement the requirements of the national "Measures on Emergency Management ofEnvironmental Emergencies" and related laws and regulations, and to ensure environmental emergencies to bedealt with in a timely, orderly, efficient and appropriate manner, to protect the personal safety of the employeesand to reduce property losses, each subsidiary of the company formulated an emergency plan for environmentalemergencies and reported it to the environmental protection department for filing.
Environment self-monitoring scheme
Formulated the self-monitoring scheme in accordance with the requirements of environmental impactassessment, inspected wastewater pollutants once a day and inspected air pollutants air pollutants.
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 | Company's corrective measures |
| Hefei Kinghome | Violation of Article 45 of the Air | Waste gas control facilities were not | Fine of 10,000 yuan | None | Installed waste gas treatment facilities |
| Electrics Co., Ltd | Pollution Prevention and Control Law of the People's Republic of China and Article 45 of the Anhui Air Pollution Prevention and Control Regulations | installed for the processes of extrusion, plastic absorption, foam, injection and spraying, which generate organic volatile gases. | for processes that generate organic volatile gases. Rectified and accepted by Hefei Ecological Environment Bureau. |
Other environmental information that should be disclosedNoneMeasures and effects taken to reduce its carbon emissions during the report period
□ Applicable √ Not applicable
Other environmental related informationNone
II. Social ResponsibilityGree actively fulfilled its social responsibility, effectively safeguarded the legitimate rights and interests ofall stakeholders, used its strength to win the recognition of the capital market and consumer market for itsenterprise, brand and products, and used its actions to promote the green and low-carbon development of theindustry (for details, please refer to the "2021 Annual Social Responsibility Report" published onwww.cninfo.com.cn on April 30, 2022).
III. Consolidating and expanding the results of poverty alleviation and rural revitalization
During the report period, the company did not carry out any work related to consolidating and expanding theresults of poverty alleviation and rural revitalization.
Section VI Important MattersI. Fulfillment of commitments
1. Commitments made by the Company's actual controller(s), shareholders, related parties, acquirers, the Company and other related commitments thathave been fulfilled during the report period and have not been fulfilled as at the end of the report period
√ Applicable □ Not applicable
| Reason for commitment | Commitment Party | Commitment Type | Commitment Content | Committed Time | Commitment Period | Implementation Status |
| Share-Splitting Commitment | ||||||
| Commitments in the acquisition report or equity change report | Zhuhai Mingjun | 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 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. | December 2, 2019 | 36 months from the date of completion of registration of the transfer of shares | In progress |
| Zhuhai Mingjun | 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 governance structure of Gree Electric Appliances. 2. The transferee commits not to initiate any proposal or proposal to relocate the headquarters and registered office of Gree Electric Appliances from Zhuhai during the period of direct or indirect shareholding of Gree Electric Appliances, and to actively urge all parties to ensure that the headquarters and registered office of Gree Electric Appliances will not be relocated from Zhuhai; if any shareholder proposes any suggestion or proposal to relocate the headquarters and registered office of Gree Electric Appliances from Zhuhai, the transferee commits to attend the shareholders' meeting and to vote against such proposal. 3. The Transferee commits to make its best effort and ability to make effective industrial investment and strategic resource introduction for the economic development of Zhuhai, and to promote Gree to make new contribution to the sustainable and healthy economic development of Zhuhai. 4. Zhuhai Mingjun commits to actively exercise the shareholders' voting right in 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. | December 2, 2019 | Long-term effective | In progress |
ZhuhaiMingjun,ZhuhaiXianying,ZhuhaiYuxiu
Maintainindependenceof publiccompanies
Letter of Commitment on Maintaining the Independence of the Listed Company: In order to ensure theindependent operation of the listed company after this equity transfer, Zhuhai Mingjun, Zhuhai Xianyingand Zhuhai Yuxiu make the following commitments: (i) To ensure asset independence and completenessof the listed company: 1. To ensure that Gree Electric Appliances will be equipped with the relevantproduction system, auxiliary production system as well as supporting facilities corresponding to itsbusiness operations, have the right to own or use the land, workshop and machines and facilities relatingto its business operations as well as the ownership or use right to its trademarks, patent technologies andknow-how, and have an independent purchase system of raw materials and sales system of products. 2. Toensure that Gree has independent and complete assets, and all of its assets are under the control of Greeand are independently owned and operated by Gree. 3. To ensure that Zhuhai Mingjun and otherenterprises controlled by Zhuhai Mingjun will not illegally occupy the assets of Gree Electric Appliancesin any way; and will not use the assets of Gree Electric Appliances, or provide guarantee for the debts ofZhuhai Mingjun and other enterprises controlled by the enterprise with Gree Electric Appliances' assets.(ii) To ensure the independence of the personnel of the listed company: 1. To ensure that the labor,personnel and remuneration management of Gree Electric Appliances is completely independent from itsrelated enterprises. 2. The recommendation of directors, supervisors and senior management by theenterprise to Gree Electric Appliances is made through legal procedures and does not exceed the decisionson personnel appointment and removal made by the Board of Directors and the General Meeting ofShareholders of Gree. T (iii) To ensure the financial independence of the listed company: 1. to ensure thatGree Electric Appliances will establish an independent financial department and an independent financialaccounting system, and will have a standardized and independent financial accounting system. 2. Toensure that Gree Electric Appliances will open bank accounts independently and will not share bankaccounts with its related enterprises. 3. To ensure that the financial personnel of Gree Electric Applianceswill not work part-time in its related companies. 4. To ensure that Gree Electric Appliances will beindependent in paying taxes according to the law. 5. To ensure that Gree Electric Appliances can makeindependent financial decisions and that the intended transferee will not unlawfully interfere with GreeElectric Appliances's fund utilization and scheduling. (iv) To ensure the independence of the listedcompany: 1. To ensure that Gree Electric Appliances will establish a sound corporate governance structureof the joint stock company and will have an independent and complete organizational structure. 2. Toensure that the internal management bodies of Gree Electric Appliances will exercise their powers andfunctions independently in accordance with laws, regulations and the Articles of Association of theCompany. (v) To ensure the business independence of the listed company: 1. To ensure Gree ElectricAppliances will have the assets, personnel, qualification and ability to carry out business activitiesindependently and will have the ability to operate independently and independently and continuously inthe market. 2. To ensure not to interfere with the business activities of Gree Electric Appliances except
December2, 2019
Long-termeffective
In progress
| Zhuhai Mingjun, Zhuhai Xianying, Zhuhai Yuxiu | Avoiding horizontal competition | Letter of Commitment on Avoiding Horizontal Competition: In order to avoid horizontal competition with the listed company, Zhuhai Mingjun, Zhuhai Xianying and Zhuhai Yuxiu make the following commitments: 1. The enterprise and other enterprises controlled by the enterprise, the controlling shareholder and the actual controller of the enterprise will not engage in the same or similar business as Gree and its subsidiaries in a direct or indirect manner in the future, so as to avoid constituting direct or indirect business competition with the business of Gree and its subsidiaries. 2. If other enterprises controlled by the enterprise further expand their business scope, the other enterprises controlled by the enterprise will take all possible measures to avoid horizontal competition with Gree Electric Appliances and its subsidiaries on the principle of giving priority to safeguarding the rights and interests of Gree Electric Appliances. 3.If Gree Electric Appliances and its subsidiaries or related regulatory authorities determine that the enterprise and other enterprises controlled by the enterprise are engaging in or will engage in any business which constitutes horizontal competition with Gree Electric Appliances and its subsidiaries, the enterprise will give up or cause the enterprises which its subsidiaries directly or indirectly hold to give up any business or business opportunities that may result in horizontal competition, or cause such business or business opportunities to be provided with a priority to Gree Electric Appliances or its wholly-owned and 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, the enterprise will be willing to bear all the responsibilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | December 2, 2019 | Long-term effective | In progress |
| Zhuhai Mingjun, Zhuhai Xianying, Zhuhai Yuxiu | Regulating Affiliate Transactions | Letter of Commitment on Regulating Related Transactions: In order to protect 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 the related transactions between the enterprise and other enterprises controlled by the enterprise and Gree Electric Appliances in the future will be conducted in fair and in accordance with the normal code of business conduct; the enterprise commits to further regulate the related transactions with Gree Electric Appliances and its subsidiaries. 2. The Company will perform its obligations as a shareholder of Gree Electric Appliances in good faith and in goodwill, and for related transactions that cannot be avoided or exist on reasonable grounds, it will sign a standard related transaction agreement with Gree Electric Appliances in accordance with the law, and fulfill the approval procedures in accordance with relevant laws, regulations, rules, other regulatory documents and the Articles of Association and; the price of related transactions will be determined in accordance with fair and reasonable market prices, and the price of related transactions will be fair; it will perform the information disclosure obligations of related transactions in accordance with relevant laws, regulations and the Articles of Association; it will not use related transactions to illegally transfer the funds and profits of Gree Electric Appliances or damage the interests of Gree Electric Appliances and related shareholders. 3. To ensure that the enterprise and other enterprises controlled by the enterprise will, in accordance with the provisions of laws, regulations and the Articles of Association, when deliberating related transactions involving the enterprise and other enterprises controlled by the enterprise, effectively abide by the avoidance procedure during the voting on related transactions at the meeting of the board of shareholders or the general meeting of shareholders of Gree Electric Appliances. | December 2, 2019 | Long-term effective | In progress |
DongMingzhu
Maintainindependenceof publiccompanies
Letter of Commitment on Maintaining the Independence of the Listed Company: In order to guarantee theindependent 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 ElectricAppliances will be equipped with the relevant production system, auxiliary production system as well assupporting facilities corresponding 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 useright to its trademarks, patent technologies and know-how, and have an independent purchase system ofraw materials and sales system of products. 2. To ensure that Gree has independent and complete assets,and all of its assets are under the control of Gree and are independently owned and operated by Gree. 3.To ensure that Zhuhai Mingjun and other enterprises controlled by Zhuhai Mingjun will not illegallyoccupy the assets of Gree Electric Appliances in any way; and will not use the assets of Gree ElectricAppliances, or provide guarantee for the debts of Zhuhai Mingjun and other enterprises controlled by theenterprise with Gree Electric Appliances' assets. (ii) To ensure the independence of the personnel of thelisted company: 1. To ensure that the labor, personnel and remuneration management of Gree ElectricAppliances is completely independent from its related enterprises. 2. To ensure that the recommendationof senior management personnel by me to Gree Electric Appliances is conducted in accordance with legalprocedures. T (iii) To ensure the financial independence of the listed company: 1. to ensure that GreeElectric Appliances will establish an independent financial department and an independent financialaccounting system, and will have a standardized and independent financial accounting system. 2. Toensure that Gree Electric Appliances will open bank accounts independently and will not share bankaccounts with its related enterprises. 3. To ensure that the financial personnel of Gree Electric Applianceswill not work part-time in its related companies. 4. To ensure that Gree Electric Appliances will beindependent in paying taxes according to the law. 5. To ensure that Gree Electric Appliances can makeindependent financial decisions and that the intended transferee will not unlawfully interfere with GreeElectric Appliances's fund utilization and scheduling. (iv) To ensure the independence of the listedcompany: 1. To ensure that Gree Electric Appliances will establish a sound corporate governance structureof the joint stock company and will have an independent and complete organizational structure. 2. Toensure that the internal management bodies of Gree Electric Appliances will exercise their powers andfunctions independently in accordance with laws, regulations and the Articles of Association of theCompany. (v) To ensure the business independence of the listed company: 1. To ensure Gree ElectricAppliances will have the assets, personnel, qualification and ability to carry out business activitiesindependently and will have the ability to operate independently and independently and continuously inthe market. 2. To ensure that, except through the exercise of shareholders' rights and the performance offunctions and duties of board chairman / senior management personnel of the listed company, I will notinterfere in its business activities of Gree Electric Appliances. 3. To ensure that I and other enterprises
December2, 2019
Long-termeffective
In progress
| Dong Mingzhu | Avoiding horizontal competition | Letter of Commitment on Avoiding Horizontal Competition: I make the following commitments: 1. I and other enterprises controlled by me 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 enterprises under my control will take all possible measures to avoid horizontal competition with Gree Electric Appliances and its subsidiaries on the principle of giving priority to safeguarding the rights and interests of Gree Electric Appliances. 3. If Gree Electric Appliances and its subsidiaries or related regulatory authorities determine that I and other enterprises controlled by me are engaging in or will engage in any business which constitutes horizontal competition with Gree Electric Appliances and its subsidiaries, I will give up or cause the enterprises which its subsidiaries directly or indirectly hold to give up any business or business opportunities that may result in horizontal competition, or cause such business or business opportunities to be provided with a priority to Gree Electric Appliances or its wholly-owned and 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 responsibilities arising therefrom, and fully compensate or reimburse all direct or indirect losses caused to Gree Electric Appliances. | December 2, 2019 | Long-term effective | In progress |
| Dong Mingzhu | Regulating Affiliate Transactions | Letter of Commitment on Regulating Related Transactions: I make the following commitments: 1. To ensure that the future related transactions between I and other enterprises controlled by me and Gree Electric Appliances will be fair and conducted in accordance with the normal business conduct standards; and that I commit to further regulate related transactions with Gree Electric Appliances and its subsidiaries. 2. To ensure that I will perform my obligations as a shareholder of Gree Electric Appliances in good faith and in goodwill, and for related transactions that cannot be avoided or exist on reasonable grounds, I will sign a standard related transaction agreement with Gree Electric Appliances in accordance with the law, and fulfill the approval procedures in accordance with relevant laws, regulations, rules, other regulatory documents and the Articles of Association; the price of related transactions will be determined in accordance with fair and reasonable market prices, and the price of related transactions will be fair; I will perform the information disclosure obligations of related transactions in accordance with relevant laws, regulations and the Articles of Association; I will not use related transactions to illegally transfer the funds and profits of Gree Electric Appliances or damage the interests of Gree Electric Appliances and related shareholders. 3. To ensure that I and other enterprises controlled by me will, in accordance with the provisions of laws, regulations and the Articles of Association, when deliberating related transactions involving me and other enterprises controlled by me, effectively abide by the avoidance procedure during the voting on related transactions at the meeting of the board of shareholders or the general meeting of shareholders of Gree Electric Appliances. | December 2, 2019 | Long-term effective | In progress | |
| Commitments made during asset reorganization | ||||||
| Commitments made during initial public offering or refinancing |
| Equity Incentive Commitment | GREE GROUP | 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 remaining Equity Incentive Plan. | June 14, 2019 | During the period of being a shareholder of Gree Electric Appliances | In progress |
| Other commitments to the Company's minority shareholders | ||||||
| Whether commitments are fulfilled in time | Yes | |||||
| If commitments are not fulfilled in time, detail the specific reason of 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 earningsforecast period and the Company explains the assets or projects that achieve the original earnings forecastand the relevant reasons
□ Applicable √ Not applicable
II. The listed company's non-operating funds occupied by the controlling shareholders andtheir related parties
□ Applicable √ Not applicable
No controlling shareholder or its related party occupied non-operating funds of the listed company in the report period of theCompany.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
V. Description of the "Non-standard Audit Report" of the accounting firm for the reportperiod by the Board of Directors, Board of Supervisors and independent director (if any)
□ Applicable √ Not applicable
VI. Description of changes in accounting policies, accounting estimates or corrections ofsignificant accounting errors compared to the previous year's financial statement
√ Applicable □ Not applicable
1. Changes of major accounting policies
The Ministry of Finance issued the Accounting Standards for Business Enterprises No. 21 - Leases (Financeand Accounting [2018] No. 35) on December 7, 2018, requiring companies listed at home and abroad at the sametime and companies listed overseas and adopting IFRS or Accounting Standards for Business Accounting toprepare financial statements to implement from January 1, 2019; and requiring other domestic listed companiesimplementing Accounting Standards for Business Enterprises to implement from January 1, 2021. The Companymade corresponding changes to its accounting policies in accordance with the requirements of the standard.In accordance with the new lease standard, the Group chose not to reassess whether a contract that existedprior to the date of the first implementation was a lease or contained a lease. Only the retained earnings at thebeginning of the period and other related statement items were adjusted on first-time implementation, and noadjustments were made to comparable period information. The change in accounting policy did not have asignificant impact on the financial indicators of total assets, total liabilities, net assets and net profit of the
Company.The following shows adjustments to the financial statements at the beginning of the period of the firstimplementation of the new lease standard for the first time starting from 2021:
Unit: Yuan
| Report Item | Amount as at 31 December, 2020 (before change) | Amount as at January 1, 2021 (after change) | ||
| Consolidated Statements | Parent company's statement | Consolidated Statements | Parent company's statement | |
| Non-current assets: | ||||
| Usufruct assets | 38,952,103.28 | |||
| Long-term unamortized expenses | 8,567,923.50 | 1,954,062.19 | ||
| Total non-current assets | 65,584,936,463.61 | 49,231,239,643.63 | 65,617,274,705.58 | 49,231,239,643.63 |
| Total assets | 279,217,923,628.27 | 239,626,991,300.20 | 279,250,261,870.24 | 239,626,991,300.20 |
| Current liabilities: | ||||
| Non-current liabilities due within one year | 22,927,889.42 | |||
| Total current liabilities | 158,478,718,130.74 | 157,595,121,705.31 | 158,501,646,020.16 | 157,595,121,705.31 |
| Non-current liabilities: | ||||
| Lease liabilities | 9,410,352.55 | |||
| Total non-current liabilities | 3,858,718,409.39 | 1,216,835,596.58 | 3,868,128,761.94 | 1,216,835,596.58 |
| Total liabilities | 162,337,436,540.13 | 158,811,957,301.89 | 162,369,774,782.10 | 158,811,957,301.89 |
| Total liabilities and owner's equity | 279,217,923,628.27 | 239,626,991,300.20 | 279,250,261,870.24 | 239,626,991,300.20 |
2. Changes in major accounting estimates
No.
VII. Description of changes in the consolidated statement scope in comparison with thefinancial statement of last year
√ Applicable □ Not applicable
1. Business combinations not under common control
(1) Business combinations not under common control that occurred during the period
Unit: Yuan
| Name of the Purchased Party | Point of acquisition of equity | Equity acquisition cost | Equity acquisition proportion | Equity acquisition method | Acquisition date | Basis for determining the acquisition date | Operating revenue from the acquisition date to statement date | Net profit from the acquisition date to statement date |
| Gree Altairnano New Energy Inc. | October 31, 2021 | 1,828,275,113.56 | 30.47% | Purchase in cash | October 31, 2021 | Acquisition of control | 694,344,061.76 | -416,767,701.45 |
(2) Cost of business combination and goodwill
Unit: Yuan
| Cost of business combination | Amount |
| Cost of business combination | 1,828,275,113.56 |
Less: fair value share of the identifiable net assets acquired
| Less: fair value share of the identifiable net assets acquired | 1,215,497,529.64 |
| Amount of goodwill/combination cost less than the share of fair value of identifiable net asset acquired | 612,777,583.92 |
[Note 1] As mentioned in Note V.23 "Goodwill" to the financial statement, Gree Altairnano New Energybecame a holding subsidiary of the Company on October 31, 2021.[Note 2] As of the acquisition date October 31, 2021, the fair value of the identifiable net assets attributableto the owners of the parent company of Gree Altairnano New Energy was 1,215,497,529.64 yuan, and the fairvalue of the corresponding identifiable net assets was appraised by China United Assets Appraisal Group Limited,which issued appraisal report ZLPBZ [2022] No. 1362.The formed goodwill on the combination of Gree Altairnano is mainly due to the fact that the fair value shareof the identifiable net assets of Gree Altairnano acquired by the Company on the acquisition date is lower than thecombined cost. The asset valuation on the date of this purchase used the asset-based method, the value of thefuture business growth of Gree Altairnano could not be fully reflected due to the limitations of the valuationmethod itself. At present, the business relationship between Gree Electric Appliances and Gree Altairnano hasbeen rationalized and preliminary results have been achieved. In the future, the company will continue to promotecomprehensive integration and synergistic development, grasp market and industry development opportunities,further enhance the comprehensive competitiveness and sustainable development capability of Gree Altairnanoand prevent goodwill impairment risk.
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: Yuan
| Item | Gree Altairnano New Energy Inc. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
Assets:
| Assets: | ||
| Monetary funds | 1,646,843,953.97 | 1,646,843,953.97 |
| Trading financial liabilities | 10,000.00 | 10,000.00 |
Accounts receivable
| Accounts receivable | 2,779,548,017.55 | 2,779,548,017.55 |
| Advance payments | 215,800,208.73 | 215,800,208.73 |
| Other receivables | 234,176,292.67 | 234,176,292.67 |
Inventory
| Inventory | 2,135,766,221.72 | 2,135,766,221.72 |
| Contract assets | 996,806,636.13 | 996,806,636.13 |
| Non-current assets due within one year | 2,810,789.73 | 2,810,789.73 |
Other current assets
| Other current assets | 856,356,937.01 | 856,356,937.01 |
| Long-term receivables | 3,014,657.86 | 3,014,657.86 |
| Long-term equity investments | 390,685,789.09 | 535,849,709.81 |
Other equity instruments investments
| Other equity instruments investments | 2,170,000.00 | 2,170,000.00 |
| Investment real estate | 30,434,649.00 | 6,404,970.97 |
Fixed assets
| Fixed assets | 9,851,922,127.54 | 8,874,157,430.70 |
| Construction in progress | 2,341,162,945.24 | 2,301,429,874.64 |
| Intangible assets | 3,078,130,531.23 | 2,103,825,250.26 |
Long-term unamortized expenses
| Long-term unamortized expenses | 18,801,886.89 | 18,801,886.89 |
| Deferred income tax assets | 1,906,423,128.64 | 1,906,423,128.64 |
| Other non-current assets | 277,326,714.43 | 277,326,714.43 |
Subtotal of assets
| Subtotal of assets | 26,768,191,487.43 | 24,897,522,681.71 |
| Liabilities: | ||
| Short-term borrowings | 2,202,310,244.21 | 2,202,310,244.21 |
Notes payable
| Notes payable | 1,382,825,460.48 | 1,382,825,460.48 |
| Accounts payable | 4,860,305,562.25 | 4,860,305,562.25 |
| Contract liabilities | 5,024,137,616.68 | 5,024,137,616.68 |
Employee pay payable
| Employee pay payable | 49,442,281.69 | 49,442,281.69 |
| Taxes and dues payable | 46,366,595.59 | 46,366,595.59 |
| Other payables | 4,233,517,352.93 | 4,233,517,352.93 |
Non-current liabilities due within one year
| Non-current liabilities due within one year | 98,518,621.44 | 98,518,621.44 |
| Other current liabilities | 2,088,457,921.70 | 2,088,457,921.70 |
Long-term borrowings
| Long-term borrowings | 850,000,000.00 | 850,000,000.00 |
| Long-term payables | 392,843,262.75 | 392,843,262.75 |
| Deferred Income | 1,186,062,239.50 | 1,186,062,239.50 |
Deferred income tax liabilities
| Deferred income tax liabilities | 13,873,952.69 | 13,873,952.69 |
| Subtotal of liabilities | 22,428,661,111.91 | 22,428,661,111.91 |
| Net assets | 4,339,530,375.52 | 2,468,861,569.80 |
Before the acquisition date, affected by the corporate governance problems caused by the allegedmisappropriation of the interests of Gree Altairnano by the former controlling shareholder of Gree Altairnano,Gree Altairnano was restricted in the financing, resulting in production capacity not being fully unleashed and in acontinuous loss; after the listed company acquired the control of Gree Altairnano on the acquisition date, GreeAltairnano was managed in strict accordance with relevant laws and regulations and various corporate systems,and the annual auditing accountant, China Audit Union Power Certified Public Accountants Co., Ltd. (SpecialGeneral Partnership), adjusted the accounting policies of Gree Altairnano based on the operating conditions andprudent considerations and with reference to the standards of listed companies and made corresponding auditadjustments. The above situation had an impact on the purchase date book value of the net assets of GreeAltairnano.
Gree is committed to building into a more competitive, diversified, technology-based global industrial group
with a long-term, in-depth layout of the new energy sector. The company's participation in the judicial auction toacquire Gree Altairnano aims to combine the core technologies of Gree Altairnano batteries with the company's"zero carbon source" and other multi-dimensional low-carbon technologies to give full play to its overall resourceadvantages and further improve new energy industry layout. Up to now, the business relationship between GreeElectric Appliances and Gree Altairnano has been rationalized and preliminary results have been achieved, and thenumber of new energy vehicles being made by Gree Altairnano exceeded the level of the same period in 2020 and2021; lithium titanate battery achieved good results in overseas and domestic markets with its superiorperformance, and the relevant patent has recently been selected for the list of China Patent Award, being the onlylithium battery product in the new energy industry that won the gold medal. The performance and yield ofLiFePO4 products have also been greatly improved, and the production capacity will be unleashed gradually. Withthe gradual unleashing of production capacity and the recovery of profitability in the future, Gree Altairnano’svalue will also continue to increase.
(4) Gains or losses arising from the remeasurement of equity held before the purchase date at fair value
| Name of the Purchased Party | Book value of equity held before the acquisition date on the acquisition date | Fair value on the purchase date of share held before that date | Gains or losses on remeasurement of previously held equity interest to fair value before the acquisition date |
| Gree Altairnano New Energy Inc. | None | None | None |
(5) Method and key assumptions for determining fair value on the acquisition date
1. Valuation determination method: The assets and liabilities were mainly evaluated using the asset-basedmethod and the income method.
2. Key assumptions in the evaluation process.
A. The appraised entity is capable of making timely adjustments and innovations in line with thedevelopment of the market and science and technology, while maintaining consistency in its business scope,business methods and management mode.B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidenceshowing that the production capacity will change in the future, it is assumed that the evaluated unit will not carryout major fixed-asset investment activities that affect its operations in the future income period, and theproduction capacity of the enterprise is estimated according to the condition on the evaluation benchmark date;
C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accountsreceivable and accounts payable similar to the historical years, with no payment in arrears that is significantlydifferent from the historical years;
D. The assets and liabilities declared by the appraised entity are free from title disputes and other economicdisputes;
E. The appraised entity's future sources of funding and costs for R&D and production will not have amaterial adverse impact on the enterprise.
3. Reasons for asset appreciation：
A. Machinery and equipment: the market price of some equipment increased and the depreciable life of the
enterprise's equipment was shorter than the economic life of the equipment;
B. Housings and buildings: there was a difference between the depreciable life and the actual economic life,
and some buildings were built a long period of time ago, resulting in an increase in replacement costs (labor,
materials, etc.);
C. Land use rights: the time when the enterprise acquired the land is far from the benchmark date of theevaluation and the price was low, and the land price increased between the acquisition date and the currentvaluation benchmark date.
2. Business combination under the same control
No.
3. Reverse purchase
No.
4. Disposal of subsidiaries
Unit: Yuan
| Company name | Equity disposal price | Equity disposal proportion (%) | Equity disposal method | Time point of losing control | Basis for determining the point at which control is lost | The difference between the disposal price and the share of the subsidiary's net assets in the consolidated financial statements corresponding to the disposal investment. | Proportion of remaining equity on the date of losing control (%) | Book value of remaining equity on the date of losing control | Fair value of remaining equity 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. | Amount of other comprehensive income related to equity investment of the original company transferred into investment profit and loss. |
| SL Group Jiangwan Rice | 255,00 | 2.00 | Sale | August, | Share Transfer Agreement | 215,501. | 49.00 | 1,145,00 | 1,145,00 | Book | None |
| Industry Co., Ltd | 0.00 | 2021 | 72 | 0.00 | 0.00 | value | ||||||
| SL Group Lianhe Ecology Farm Co., Ltd | 21,000.00 | 21.00 | Sale | August, 2021 | Share Transfer Agreement | -50,939.54 | 49.00 | Book value | None | |||
| SL Group Yuan Agriculture Co., Ltd | 40.00 | Sale | September, 2021 | Industrial and commercial change registration | 2,291.72 | 30.00 | Book value | None | ||||
| SL Group Lvzhiyuan Agriculture Co., Ltd | 40.00 | Sale | September, 2021 | Industrial and commercial change registration | 142,792.55 | 30.00 | Book value | None | ||||
| SL Group Dongwei Rice Industry Co., Ltd | 21.00 | Sale | September, 2021 | Industrial and commercial change registration | 92,134.32 | 30.00 | Book value | None | ||||
| SL(Ningbo) Grain Sales Co., Ltd | 100.00 | Sale | September, 2021 | Industrial and commercial change registration | 23,927.91 | Book value | None |
5. Change of combination scope for other reasons
(1) Newly established entities for the current period
Unit: Yuan
| Name | Date of establishment | Net assets at the end of the period | Net profit from the combination date to the end of the period |
| Zhuhai Gree Electormechanical Engineering (Linyi) Co., Ltd. | March 1, 2021 | 36,931,910.01 | 6,931,910.01 |
| Wuhu Gree Intelligent Logistics Co., Ltd | March 19, 2021 | ||
| Gree (Zhuhai Hengqin) Development Co., Ltd. | April 25, 2021 | 998,450,036.83 | -1,549,963.17 |
Gree Electric Appliances (Linyi) Co., Ltd.
| Gree Electric Appliances (Linyi) Co., Ltd. | May 6, 2021 | 194,574,519.31 | -5,425,480.69 |
| Jiangxi Jinrun Real Estate Co., Ltd | June 16, 2021 | 85,809,836.46 | -14,190,163.54 |
| Changsha Kinghome Electrics Co., Ltd | July 1, 2021 | 5,720,175.31 | -279,824.69 |
| Green Electricity New Material (Maanshan) Technology Co., Ltd. | September 7, 2021 | ||
| Wuhan Yuli Runzhu Real Estate Co., Ltd | September 26, 2021 | 6,723,663.82 | -276,336.18 |
| Hua Hin High Conductivity (Maanshan) Technology Co., Ltd. | October 12, 2021 | ||
| Zhuhai MinRoad Supply Chain Technology Co., Ltd | November 19, 2021 |
(2)Other decrease for the current period
The company cancelled its subsidiaries, SL Group Ermapao Eco-Farm Co., Ltd. and Handan Yingdong NewEnergy Technology Co., Ltd.
VIII. Engagement and disengagement of accounting firmsAccounting firms currently hired
| Name of domestic accounting firm | Union Power Certified Public Accountants (Special General Partnership) |
| Remuneration for the domestic accounting firm (10,000 yuan) | 396 |
| Consecutive years for the domestic accounting firm to render audit service | 7 years |
| Name of Certified Public Accountant of Domestic Accounting Firm | Han Zhenping, Qiu Yiwu |
| Names of certified public accountants of the domestic accounting firm | 2 years, 1 year |
Whether a new accounting firm was hired for the current period
□ Yes √ No
Engagement of an accounting firm for internal control auditing, financial adviser or sponsor
√ Applicable □ Not applicable
During the year, the Company hired Union Power CPAs Co., Ltd. (special general partnership) as its internal control accounting firm.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 shareholders and actual controllers
□ Applicable √ Not applicable
XIV. Significant related transactions
1. Related transactions associated with day-to-day operation
√ Applicable □ Not applicable
| Related parties | Related relationships | Related transaction types | Content of related transactions | Related transactions pricing principles | Price of related-party transactions | Amount of related transactions (10,000 yuan) | Proportion to amount of similar transactions | Approved transaction amount (10,000 yuan) | Exceeding the approved amount | Settlement of related transactions | Available market price of similar transactions | Date of disclosure | Disclosure Index |
| Zhejiang Shengshi Xinxing Gree Trading 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 two parties | Market Price | 617,406.28 | 4.26% | 720,000 | No | Payment before delivery | Market Price | April 29, 2021 | Disclosed on www.cninfo.com.cn on April 29, 2021, Announcement No. 2021-018 |
| Henan Shengshi Xinxing Gree Trading 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 two parties | Market Price | 281,758.29 | 1.95 | 680,000 | No | Payment before delivery | Market Price | April 29, 2021 | Disclosed on www.cninfo.com.cn on April 29, 2021, Announcement No. 2021-018 |
| Gree Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries | Companies and their subsidiaries and holding subsidiaries where the chairman of the Company serves as a director | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | Based on the market price, to be determined subject to the negotiation between two parties | Market Price | 70,903.27 | 0.49% | 300,000 | No | Settlement by progress | Market Price | April 29, 2021 | Disclosed on www.cninfo.com.cn on April 29, 2021, Announcement No. 2021-018 |
| Gree Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries | Companies and their subsidiaries and holding subsidiaries where the chairman of the Company serves as a director | Material Procurement | Batteries, energy storage components, new energy vehicles and accessories, etc. | Based on the market price, to be determined subject to the negotiation between two parties | Market Price | 10,861.18 | 0.08% | 30,000 | No | Settlement by progress | Market Price | April 29, 2021 | Disclosed on www.cninfo.com.cn on April 29, 2021, Announcement No. 2021-018 |
| Total | -- | -- | 980,929.02 | -- | 1,730,000 | -- | -- | -- | -- | -- | |||
| Details of large-amount sales return | Not Applicable | ||||||||||||
| Actual fulfillment (if any) in the report period when the total amount is estimated by category for the daily related transaction to take place for the current period | Implementation is within the limit | ||||||||||||
| Cause for the large difference between transaction price and market reference price (if applicable) | Not Applicable |
2. Related transactions of acquisition or sales of assets or equity
□ Applicable √ Not applicable
The Company was not involved in any related transaction of acquisition or sales of assets or equity in the report period.
3. Related transactions of common foreign investment
□ Applicable √ Not applicable
The Company was not involved in any related transaction of common foreign investment during the report period.
4. Associated credits and liabilities
□ Applicable √ Not applicable
The Company was not involved in any associated credit or liability in the report period.
5. Transactions with finance companies with which the company has related relationships
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the company and the finance company and related parties withwhich the company has related relationships.
6. Transactions between the financial company controlled by the enterprise and related parties
□ Applicable √ Not applicable
There is no significant deposit, loan, credit or other financial business between the finance company controlled by the enterprise andrelated parties.
7. Other significant related transactions
□ Applicable √ Not applicable
The Company was not involved in other significant related party 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: 10,000 yuan
| External guarantees of the company and its subsidiaries (excluding guarantees to subsidiaries) | ||||||||||
| Name of the guarantee object | Date of disclosure of the announcement related to the guarantee amount | Guarantee amount | Actual date of occurrence | Actual amount of occurrence | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the fulfillment is completed | Whether guarantee is for related parties |
| None | ||||||||||
| Guarantee of the Company to its subsidiaries | ||||||||||
| Name of the guarantee object | Date of disclosure of the announcement related to the guarantee amount | Guarantee amount | Actual date of occurrence | Actual amount of occurrence | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the fulfillment is completed | Whether guarantee is for related parties |
| None | ||||||||||
| Guarantee of subsidiaries to subsidiaries | ||||||||||
| Name of the guarantee object | Date of disclosure of the announcement related to the guarantee amount | Guarantee amount | Actual date of occurrence | Actual amount of occurrence | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the fulfillment is completed | Whether guarantee is for related parties |
| Gree Altairnano New Energy Inc. | December 24, 2021 | 65,000 | December 29, 2021 | 65,000 | General warranty | 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 |
| Tianjin Guangtong Automobile Co., Ltd. | December 24, 2021 | 35,000 | December 29, 2021 | 35,000 | General warranty | 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 Gree Altairnano Electric Appliances, Co., Ltd | December 24, 2021 | 10,000 | December 28, 2021 | 10,000 | General warranty | None | None | From the effective date of the guarantee contract to three years after the expiration of the performance period of the debt under the main contract | No | No |
| Zhuhai Guangtong Automobile Co., Ltd. | December 24, 2021 | 30,000 | |||||||||
| Total amount of guarantees to subsidiaries approved during the report period(C1) | 140,000 | Total occurrence amount of guarantees to subsidiaries during the report period(C2) | 110,000 | ||||||||
| Total amount of guarantees to subsidiaries approved at the end of the report period(C3) | 140,000 | Total actual guarantee balance to subsidiaries at the end of the report period (C4) | 110,000 | ||||||||
| Total company guarantees (i.e. total of the first three major items) | |||||||||||
| Total amount of guarantee approved during the report period (A1+B1+C1) | 140,000 | Total occurrence amount of guarantees incurred during the report period (A2+B2+C2) | 110,000 | ||||||||
| Total amount of approved guarantees at the end of the report period (A3+B3+C3) | 140,000 | Total actual guarantee balance at the end of the report period (A4+B4+C4) | 110,000 | ||||||||
| Proportion of actual total guarantees (i.e. A4+B4+C4) to the company's net assets | 1.06% | ||||||||||
| Among them: | |||||||||||
| Balance of guarantees provided by shareholders, effective controllers and their related parties (D) | 0 | ||||||||||
| Debt guarantee balance for guaranteed parties whose direct or indirect asset-liability ratio is over 70% (E) | 110,000 | ||||||||||
| Total guarantee amount exceeding 50% of the net assets (F) | 0 | ||||||||||
| Total amount of the foregoing three items (D+E+F) | 110,000 | ||||||||||
| For unexpired guarantee contracts, a description of the guarantee liability has been incurred during the report period or there is evidence of the possibility of joint and several liabilities | Not Applicable |
| Description of external guarantees provided in violation of prescribed procedures (if any) | Not Applicable |
3. Entrusting others to execute any cash asset management
(1) Entrusted financing
√ Applicable □ Not applicable
Overview of entrusted wealth management during the report period
Unit: 10,000 yuan
| Specific type | Source of funds for entrusted wealth management | Occurrence amount of entrusted wealth management | Outstanding balance | Amount overdue but not recovered yet | Impaired amount for overdue wealth management |
| Bank wealth management products | Own funds | 50,156.41 | |||
| Trust wealth management products | Own funds | 5,078.35 | |||
| Broke wealth management products | Own funds | 8,130.93 | 8,130.93 | ||
| Total | 63,365.69 | 8,130.93 | |||
Specific situation of high-risk entrusted wealth management with large single amount or low security and poor liquidity
□ Applicable √ Not applicable
Entrusted wealth management has the circumstance that it is expected to be unable to recover the principal or other circumstancesthat may cause impairment
□ Applicable √ Not applicable
(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 need to be explained during the report period.
XVII. Significant Matters of the Company's Subsidiaries
□ Applicable √ Not applicable
Section Ⅶ Changes in Shares and ShareholdersI. Changes in shares
1. Changes in share capital
Unit: shares
| 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 | 45,822,044 | 0.76% | -244,719 | -244,719 | 45,577,325 | 0.77% | |||
| 1. Shares held by the State | |||||||||
| 2. Shares held by the state-owned legal person | |||||||||
| 3. Shares held by other domestic capital | 45,822,044 | 0.76% | -244,719 | -244,719 | 45,577,325 | 0.77% | |||
| Among them: Shares held by the domestic legal person | |||||||||
| Shares held by the domestic natural person | 45,822,044 | 0.76% | -244,719 | -244,719 | 45,577,325 | 0.77% | |||
| 4. Shares held by the foreign capital | |||||||||
| Among them: Shares held by the foreign legal person | |||||||||
| Shares held by the foreign natural person | |||||||||
| II. Shares without trading restriction conditions | 5,969,908,834 | 99.24% | -101,017,119 | -101,017,119 | 5,868,891,715 | 99.23% | |||
| 1. RMB common stocks | 5,969,908,834 | 99.24% | -101,017,119 | -101,017,119 | 5,868,891,715 | 99.23% | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total of shares | 6,015,730,878 | 100.00% | -101,261,838 | -101,261,838 | 5,914,469,040 | 100.00% |
Causes for changes in share capital
√ Applicable □ Not applicable
On November 9, 2021, the total share capital of the Company and the number of circulating shares withunlimited sale conditions changed from 6,015,730,878 shares to 5,914,469,040 shares as a result of thecancellation of shares in the special securities account for the repurchase, please refer to "Announcement ofZhuhai Gree Electric Appliances, Inc. Announcement No.: 2021-073) on www.cninfo.com.cn.
Approval of share changes
√ Applicable □ Not applicable
The Company held the 23th Meeting of the 11th Board of Directors and the 17th Meeting of the 11th Boardof Supervisors on June 27, 2021. The Second Interim General Meeting of 2021 held on September 29, 2021deliberated and approved the "Proposal on Changing the Use of Repurchased Shares and Cancellation" anddecided to adjust the use of the second phase of repurchased shares from the original plan of "Repurchased shareswill be used for Employee Stock Ownership Plan or equity incentive" to "Repurchased shares will be used forcancellation to reduce registered capital". After this change and cancellation, the total share capital of theCompany was changed from 6,015,730,878 shares to 5,914,469,040 shares. For details, please refer to"Announcement of Zhuhai Gree Electric Appliances, Inc. on the Completion of Cancellation of RepurchasedShares and Changes in Shares" (Announcement No. 2021-073) on www.cninfo.com.cn.
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 per shareattributable to common shareholders of the Company for the latest year and the latest period
√ Applicable □ Not applicable
The Company's net profit attributable to shareholders of the parent company in 2021 was 23,063,732,372.62yuan, and the equity attributable to owners of the parent company was 103,651,654,599.87 yuan as of the end ofthe report period. Based on the weighted average number of 5,714,951,366.88 common shares outstanding in2021, corresponded earnings per share and diluted earnings per share were 4.04 yuan, and net asset per share was
18.14 yuan; Based on the weighted average number of 5,983,797,083.90 common shares outstanding in 2020,earnings per share and diluted earnings per share were 3.85 yuan and the net asset value per share was 17.32 yuan.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: shares
| Name of shareholders | Number of restricted shares at the beginning of the period | Number of restricted shares increased for the current period | Number of restricted shares released from lock-up for the | Number of restricted shares at the end of the period | Reasons for restriction | Release date |
| current period | ||||||
| Wang Jingdong | 884,674 | 221,169 | 663,505 | Outgoing Senior Management Share Lock-Up | July 16, 2022 | |
| Duan Xiufeng | 596,625 | 149,100 | 447,525 | Senior Management Lock-Up Shares | - | |
| Fang Xiangjian | 0 | 125,550 | 125,550 | Senior Management Lock-Up Shares | - | |
| Total | 1,481,299 | 125,550 | 370,269 | 1,236,580 | -- | -- |
II. Issuance and listing of securities
1. Issuance of securities (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, and assetsand liability structure
√ Applicable □ Not applicable
The Company held the 23th Meeting of the 11th Board of Directors and the 17th Meeting of the 11th Boardof Supervisors on June 27, 2021. The Second interim General Meeting of 2021 held on September 29, 2021deliberated and approved the "Proposal on Changing the Use of Repurchased Shares and Cancellation", anddecided to adjust the use of the second phase of repurchased shares from the original plan of "repurchased shareswill be used for employee stock ownership plan or equity incentive" to "repurchased shares will be used forcancellation to reduce registered capital". After this change and cancellation, the total share capital of theCompany was changed from 6,015,730,878 shares to 5,914,469,040 shares.On November 9, 2021, the total share capital of the Company and the number of circulating shares withunlimited sale conditions changed from 6,015,730,878 shares to 5,914,469,040 shares as a result of thecancellation of shares in the special securities account for the repurchase, please refer to "Announcement ofZhuhai Gree Electric Appliances, Inc. Announcement No.: 2021-073) on www.cninfo.com.cn.
3.Existing internal employee stock
□ Applicable √ Not applicable
III. Information about the shareholders and actual controllers
1. Number of shareholders and their shareholding status
Unit: shares
| Total number of common shareholders at the end of the report period | 949,288 | Total number of common shareholders at the end of last month before the disclosure date of the annual report | 926,919 | Total number of preferred shareholders (if any) whose voting rights were restored at the end of report period (See Note 8) | 0 | Total number of preferred shareholders (if any) whose voting rights were restored at the end of last month before the disclosure date of the annual report (See Note 8) | 0 | ||||||||
| Shareholding of the shareholders holding more than 5% of total stocks or shareholding of the top 10 shareholders | |||||||||||||||
| Name of shareholders | Nature of shareholder | Shareholding proportion | Number of shares held at the end of the period | Increase/decrease during the report period | Number of shares with trading restriction conditions held | Number of shares without trading restriction conditions held | Pledged, tagged or frozen | ||||||||
| Stock status | Quantity | ||||||||||||||
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | Domestic non-state-owned legal person | 15.26% | 902,359,632 | Pledged | 902,359,632 | ||||||||||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 11.15% | 659,345,659 | -465,565,385 | |||||||||||
| Jinghai Internet Technology Development Co., Ltd. | Domestic non-state-owned legal person | 8.34% | 493,140,455 | ||||||||||||
| China Securities Finance Co., Ltd. | State-owned legal person | 3.04% | 179,870,800 | |||||
| Zhuhai Gree Group Co., Ltd. | State-owned legal person | 2.87% | 169,519,792 | -24,376,200 | ||||
| Foresea Life Insurance Co., Ltd. – Hai Li Nian Nian | Others | 0.79% | 46,660,192 | -13,426,669 | ||||
| Zhuhai Gree Electric Appliances, Inc.- Employee Stock Ownership Plan Phase I | Others | 0.78% | 46,334,473 | 46,334,473 | ||||
| Dong Mingzhu | Domestic natural person | 0.75 | 44,488,492 | 33,366,369 | 11,122,123 | Pledged | 17,162,750 | |
| HHLR Management Limited - HHLR China Fund | Foreign legal person | 0.73% | 43,396,407 | |||||
| Abu Dhabi Investment Authority | Foreign legal person | 0.48% | 28,401,951 | 3,051,813 | ||||
| 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 for related relationship 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 related relationship between the above shareholders or whether they are persons acting in concert. | |||||||
| Description of above-mentioned shareholders’ entrusting/being entrusted with and waiving voting rights | None | |||||||
| Special Note on the existence of repurchase accounts among the top 10 shareholders (if any) (see Note 10) | Zhuhai Gree Electric Appliances, Inc. held 377,791,307 shares, or 6.39% of the shares at the end of the report period. | ||
| Shareholding of the top 10 shareholders of shares without trading restriction conditions | |||
| Name of shareholders | Number of shares without trading restriction conditions held at the end of the report period | Type of stocks | |
| Type of stocks | Quantity | ||
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | 902,359,632 | RMB common stocks | 902,359,632 |
| Hong Kong Securities Clearing Company Ltd. | 659,345,659 | RMB common stocks | 659,345,659 |
| Jinghai Internet Technology Development Co., Ltd. | 493,140,455 | RMB common stocks | 493,140,455 |
| China Securities Finance Co., Ltd. | 179,870,800 | RMB common stocks | 179,870,800 |
| Zhuhai Gree Group Co., Ltd. | 169,519,792 | RMB common stocks | 169,519,792 |
| Foresea Life Insurance Co., Ltd. – Hai Li Nian Nian | 46,660,192 | RMB common stocks | 46,660,192 |
| Zhuhai Gree Electric Appliances, Inc.- Employee Stock Ownership Plan Phase I | 46,334,473 | RMB common stocks | 46,334,473 |
| HHLR Management Limited - HHLR China Fund | 43,396,407 | RMB common stocks | 43,396,407 |
| Abu Dhabi Investment Authority | 28,401,951 | RMB common stocks | 28,401,951 |
| Central Huijin Asset Management Co., Ltd | 26,291,256 | RMB common stocks | 26,291,256 |
| Description for related relationship or concerted action among the top 10 shareholders holding circulating shares without trading restriction conditions and between the top 10 shareholders holding circulating shares without trading restriction conditions and the top 10 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 related relationship between the above shareholders or whether they are persons acting in concert. | ||
| Description of the participation in margin trading business of the top 10 common shareholders (if any) (see Note 4) | None |
Whether 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.
2. 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 and Zhuhai Mingjun signed the Share Transfer Agreement betweenZhuhai Gree Group Co., Ltd. and Zhuhai Mingjun Investment Partnership (Limited Partnership) Concerning 15%of the Shares of Zhuhai Gree Electric Appliances, Inc., pursuant to which Gree Group transferred its 902,359,632held in the Company (accounting for 15.00% of the Company's total equity) to Zhuhai Mingjun. After thetransaction was completed, the single largest shareholder Zhuhai Mingjun and its person acting in concert DongMingzhu cannot approve the specific proposals with their voting rights on the shares of listed companies that areactually at their disposal, which are not enough to have a significant impact on the resolutions of the shareholders'meeting of the listed company, and cannot decide the selection of more than half of the members of the Board ofDirectors of the listed company. Therefore, the listed company has no controlling shareholders and no actualcontrollers. For more details, please refer to the "Reply to the Inquiry Letter from Shenzhen Stock Exchange"disclosed by the Company on www.cninfo.com.cn 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 controller
On December 2, 2019, Gree Group and Zhuhai Mingjun signed the Share Transfer Agreement betweenZhuhai Gree Group Co., Ltd. and Zhuhai Mingjun Investment Partnership (Limited Partnership) Concerning 15%of the Shares of Zhuhai Gree Electric Appliances, Inc., pursuant to which Gree Group transferred its 902,359,632held in the Company (accounting for 15.00% of the Company's total equity) to Zhuhai Mingjun. After thetransaction was completed, the single largest shareholder Zhuhai Mingjun and its person acting in concert DongMingzhu cannot approve the specific proposals with their voting rights on the shares of listed companies that areactually at their disposal, which are not enough to have a significant impact on the resolutions of the shareholders'meeting of the listed company, and cannot decide the selection of more than half of the members of the Board ofDirectors of the listed company. Therefore, the listed company has no controlling shareholders and no actualcontrollers. For more details, please refer to the "Reply to the Inquiry Letter from Shenzhen Stock Exchange"disclosed by the Company on www.cninfo.com.cn 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 personParticulars on shareholding at the ultimate control level
| Name of shareholder at the ultimate control level | Legal representative/Person in charge | Date of establishment | Organization code | Principal business |
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | Zhuhai Xianying Equity Investment Partnership (Limited Partnership) | May 11, 2017 | 91440400MA4WJBCR4W | Business scope 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) |
| Particulars on 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
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 ofthe Company and its concert parties reached 80% of the number of shares held by them in the Company.
√ Applicable □ Not applicable
| Name | Type of shareholders | Total amount of stock pledge financing (10,000 yuan) | Specific purpose | Repayment Period | Source of repayment funds | Whether there is a risk of debt service or liquidation | Whether it affects the stability of the control of the company |
| Zhuhai Mingjun Investment Partnership (Limited Partnership) | The largest shareholder | 1,897,400 | Repayment of original loan | April 30, 2027 | Own funds and self-financing | No | No |
| Dong Mingzhu | Persons acting in concert with the largest | 45,000 | Personal capital demand | March 18, 2022 | 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 shareholders, actual controllers, restructuringparties and other committed entities
□ Applicable √ Not applicable
IV. Specific implementation of share repurchase during the report periodProgress of implementation of share repurchase
√ Applicable □ Not applicable
shareholder
Programdisclosure time
| Program disclosure time | Number of shares proposing to repurchase | Proportion to total share capital | Proposed repurchase amount | Proposed repurchase period | Repurchase purpose | Number of shares repurchased (shares) | Number of repurchased shares as a proportion to the underlying shares covered by the Equity Incentive Plan (if any) |
| April 13, 2020 | 108,365,753 | 1.80% | 5,999,591,034.74 | No more than 12 months from April 10, 2020 | The original purpose of the plan was Employee Stock Ownership Plan or equity incentive, but after approval, part of it was changed to cancellation purpose | 108,365,753 |
| October 14, 2020 | 101,261,838 | 1.68% | 5,999,520,920.65 | No more than 12 months from October 13, 2020 | The original purpose of the plan was Employee Stock Ownership Plan or equity incentive, but after approval, part of it was changed to cancellation purpose | 101,261,838 | |
| May 27, 2021 | 315,760,027 | 5.25% | 14,999,985,072.39 | No more than 12 months from May 26, 2021 | The original purpose of the plan was Employee Stock Ownership Plan or equity incentive, but after approval, part of it was changed to cancellation purpose | 315,760,027 |
Progress of reducing shares repurchased by centralized bidding
□ Applicable √ Not applicable
Section VIII Related Information of Preferred Share
□ Applicable √ Not applicable
The company did not have any preferred shares during the report period.
Section IX Related Information on Bonds
□ Applicable √ Not Applicable
Section X Financial statement
I. Audit Report
| Type of audit opinion | Standard unqualified opinion |
| Signing date of audit report | April 29, 2022 |
| Name of audit agency | Union Power Certified Public Accountants (Special General Partnership) |
| Document number of audit report | Union Power Audit (2022) No.0510054 |
| Name of certified public accountant | Han Zhenping, Qiu Yiwu |
Audit report text
Audit Report
Union Power Audit (2022) No.0510054All shareholders of Zhuhai Gree Electric Appliances, Inc.:
Ⅰ Audit opinionWe have audited the financial statements of Zhuhai GREE Electric Appliances, Inc.(hereinafter referred to as "yourcompany"), including the consolidated and parent company's balance sheets ended December 31, 2021 and consolidated andparent company's income statements, consolidated and parent company's cash flow statements and consolidated and parentcompany's statements of changes in shareholders' equity and notes to financial statements for the year 2021.In our opinion, the accompanying financial statements have been prepared in all material aspects in accordance with theAccounting Standards for Business Enterprises and fairly reflected the consolidated and parent company's financial positionof your company ended December 31, 2021 and consolidated and parent company's operating results and cash flows for theyear 2021.Ⅱ Basis for forming audit opinionsWe have conducted our audit work according to the provisions of Audit Standards for Certified Public Accountants ofChina. The part related to "CPA's responsibility for the audit of financial statements" in the audit report further elaborates ourresponsibilities under these standards. In accordance with the China Code of Ethics for Certified Public Account, we areindependent of your company and performed other responsibilities in respect of professional ethics. We believe the auditevidences obtained by us are sufficient and proper and shall provide the basis for expressing our audit opinion.Ⅲ Key audit itemsThe key audit items are the items that are deemed to be the most important ones in the current financial statement auditaccording to our professional judgment. The response to these items is based on the overall audit of the financial statementsand the formation of audit opinions. We do not give separate opinions on these items.
(Ⅰ) Revenue recognition
| Key audit items | How this item is dealt with in auditing? |
| Please refer to "Note III, 31", "Note V, 51" and "Note XIV, 4" in the financial statements. In FY2021 and FY2020 consolidated financial statements of your company, the revenue from selling goods was 187,886,874,900 yuan and 168,190,244,000 yuan respectively, representing an increase of 11.69% 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. We understood the internal control of key financial statements related to revenue recognition, and evaluated the effectiveness of its design and operation; 2. We asked about the revenue recognition policy adopted by the management, checked the sales contract sample, understood the delivery terms of the transaction, evaluated whether the business model was consistent with revenue recognition, evaluated whether the terms of the sales contract comply with industry practices, and whether the revenue recognition accounting policy meets the requirements of the accounting standards for business enterprises; 3. On the basis of audit sampling, we inspected the original supporting documents related to revenue recognition, such as orders, delivery orders, and arrival receipts, to evaluate whether the revenue actually occurred and whether it was recognized in accordance with the accounting policies; 4. On the basis of audit sampling, we implemented the letter verification procedure, and checked the original documents of the difference in the response letter and the situation of the payment, to evaluate the accuracy and authenticity of the occurrence amount of revenue; 5. We implemented an analysis procedure to analyze different dimensions such as monthly fluctuations, sales regions, product categories, and product gross profit margins to verify the reasonableness of the transaction; 6. We carried out a cut-off test procedure and expanded the scope of post-period inspections to check whether there was inter-period and a sales return to deal with revenue inter-period; |
| Key audit items | How this item is dealt with in auditing? |
| 7. We also reviewed the adequacy of the information disclosure related to revenue recognition in "Note III. 31", "Note V. 51" and "Note XIV. 4" in the financial statements. |
(Ⅱ) Related party relationships and transactions
| Key audit items | How this item is dealt with in auditing? |
| Please refer to "Note X, 4", "Note X, 5", "Note X, 6" and "Note X, 8" in the financial statements. ". In 2021, your company purchased 2,750,068,000 yuan of raw materials, fixed assets and other products and leased 22,011,300 yuan of fixed assets from the related parties, totaling 2,772,749,300 yuan; sold 1,085,655,200 yuan of air conditioners, intelligent equipment and other products and leased 900 yuan of fixed assets to the related parties, totaling 1,085,655.71 yuan. Because of the significant transaction amount of your company with related parties, the related party relationships and integrity of its transaction disclosure and the fairness of the related transaction will have a significant impact on the business performance and disclosure of information. Therefore, we regard the related party relationships and their transactions as key audit items. | 1. We understood, evaluated and tested the internal control related to the identification and disclosure of related party relationships and their transactions, and reviewed effectiveness of the corresponding internal control design and implementation 2. We obtained the management's statement on integrity of the related party relationships and their transactions, obtained a list of related party relationships provided by management, and checked it against the information obtained from other public channels; 3. We reviewed the major procurement, sales and other contracts to identify whether there was an undisclosed related party, and also obtained the resolution of the Board of Directors and the resolution of the shareholders' meeting related to the related transaction, checked the permissions and procedure of the related transaction decision, judged the legality and compliance of related transactions, and checked if it was authorized and approved appropriately 4. We carried out the sampling inspection procedure, checked the corresponding transaction agreement, delivery order, receipt document, sales invoice, purchase invoice, sales receipt and purchase payment voucher, analyzed the purpose of transaction to determine whether the way of obtaining cash flow of the two parties before and after the transaction, amount and risks were substantially changed, and whether the transaction has commercial substance, and combined other audit procedures such as letters to verify authenticity of the related transaction 5. We compared the sale and purchase prices of the related party with the sale and purchase prices of similar products of the non-related parties or the market prices of similar products, and judged fairness |
| Key audit items | How this item is dealt with in auditing? |
| of the related transaction price; 6. We expanded the scope of the post-period test procedure and checked whether there was a sales return; 7. We also reviewed adequacy of the information disclosure related to the related relationship and related transaction in "Note X, 4", "Note X, 5", "Note X, 6" and "Note X, 8" in the financial statement. |
(Ⅲ) Provision of inventory falling price reserves
| Key audit items | How this item is dealt with in auditing? |
| Refer to the description in "Note III. 13", "Note V. 8" and "Note V. 62" in the financial statement. As of December 31, 2021, the book value of inventory in your company's consolidated balance sheet was 4,276,559.83 yuan, wherein the book balance of inventory was 4,490,657.00 yuan and the provision for inventory falling price reserves was 2,140,971.16 yuan. Recognition of the provision for inventory falling price reserves depends on 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, cost (e.g., the related cost) to be incurred, selling expenses, and related taxes by the time of completion. In consideration of the importance of recognition of the inventory and provision for inventory falling price reserves to the consolidated financial statements and the complicated calculation process of provision for 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 identified it as a key audit item of your company. | 1. We tested implementation of the internal control related to recognition of provision for inventory falling price reserves 2. We evaluated the significant judgments, assumptions and estimates involved in management's calculation of net realizable value, and we reviewed the basis and documentation on which management determined the future selling price of the inventory and the costs incurred to completion (if relevant), selling expenses and related taxes. 3. We carried out the auditing procedures such as checking and recalculation, and particularly we recalculated to determine the net realizable value of the inventory according to the related data; 4. We perform an analytical review of the ageing of inventories to determine the adequacy of the corresponding provision for inventory falling price reserves. 5. We conducted supervision of inventory taking. During supervision of inventory taking, we focused on authenticity and accuracy of the inventory and use of the inventory, checked for slow moving inventory and defective inventory so as to evaluate adequacy of the provision for inventory falling price reserves; 6. We also checked the adequacy of the information disclosure related to the provision for falling price reserves in "Note III. 13", "Note V. 8" and "Note V. 62" in the financial statement. |
Ⅳ Other information
The management of your company is responsible for other information. Other information includes the information covered inthe 2021 annual report of your company, excluding the financial statements and our audit reports.Our audit opinions published on financial statements do not cover any other information, and we will not publish any form offorensic conclusion on other information.In connection with our audit of the financial statements, our responsibility is to read the other information identified above, and,in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtainedin the audit, or otherwise appears to be materially misstated.If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, weconclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to reportin this regard.Ⅴ Responsibilities of management and those charged with governance for financial statementsThe management of your company is responsible for preparing the financial statements in accordance with the requirements ofAccounting Standards to achieve a fair presentation, and for the designing, implementing and maintaining internal control that isnecessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.In preparing the financial statements, the management of your company is responsible for accessing your company's ability tocontinue as a going concern, disclosing matters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate your company or to cease operation, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing your company's financial reporting process.Ⅵ Auditor's responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a materialmisstatement when it exits. Misstatements may arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with the audit standards, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(I) Identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error, designedand performed audit procedures responsive to those risks, and obtained audit evidence that was sufficient and appropriate to providea basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting fromerror, as fraud may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.
(II) Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate.
(III) Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosure made by management of your company.
(IV) Concluded on the appropriateness of using the going concern assumption by the management of your company, andconcluded, based on the audit evidence obtained, whether a material uncertainty exited related to events or conditions that might castsignificant doubt on our company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we wererequired to draw attention in our auditor's report to the related disclosure in the financial statements or, if such disclosures wereinadequate, we should issue a non-unqualified opinion. Our conclusions were based on the audit evidence obtained up the date of ourauditor's report. However, future events or conditions might cause your company to cease to continue as a going concern.
(V) Evaluated the overall presentation, structure and content of the financial statements, including the disclosure, and evaluatewhether the financial statements fairly reflected the underlying transactions and events.
(VI) Obtained sufficient and appropriate audit evidence for the financial information of your company's entity or businessactivities so as to express opinions on the financial statements. We are responsible for guiding, supervising and implementing groupaudits. We assume full responsibility for the audit opinions.
We communicated with those charged with governance regarding, among other matters, the planned scope and timing of theaudit and significant audit matters, including any significant defects in internal control that we identify during our audit.
We also provided a statement to those charged with governance regarding the observed professional moral requirements relatedto independence, and communicated with those charged with governance about all the relationships and other matters that might bereasonably considered to affect our independence, as well as the related countermeasures (if applicable).
The matters we communicated with governance, we determine the matters that were most important to audit of the currentperiod financial statements, thus constituting key audit matters. We described these matters in the audit report, unless laws andregulations prohibit public disclosure of these matters, or, in a few cases, we confirmed that the matter should not be communicatedin the audit report if it was reasonably anticipated that the negative consequence caused by communicating a matter in the auditreport exceeds the benefit generated in terms of public interests.
| Union Power Certified Public Accountants (Special General Partnership) | Chinese Certified Public Accountant: | ||
| (engagement partner) | |||
| Han Zhenping | |||
| Chinese Certified Public Accountant: | |||
| Qiu Yiwu | |||
| Wuhan, China | April 29, 2022 | ||
| Consolidated Balance Sheet | ||||
| December 31, 2021 | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | December 31, 2021 | January 1, 2021 | December 31, 2020 |
| Current assets: | ||||
| Monetary funds | V. 1 | 116,939,298,776.87 | 136,413,143,859.81 | 136,413,143,859.81 |
| Lending funds | ||||
| Trading financial liabilities | V. 2 | 370,820,500.00 | 370,820,500.00 | |
| Derivative financial assets | V. 3 | 198,773,198.65 | 285,494,153.96 | 285,494,153.96 |
| Bills receivable | ||||
| Accounts receivable | V. 4 | 13,840,898,802.76 | 8,738,230,905.44 | 8,738,230,905.44 |
| Receivable financing | V. 5 | 25,612,056,693.07 | 20,973,404,595.49 | 20,973,404,595.49 |
| Advance payments | V. 6 | 4,591,886,517.34 | 3,129,202,003.24 | 3,129,202,003.24 |
| Other receivables | V. 7 | 334,161,870.18 | 147,338,547.86 | 147,338,547.86 |
| Including: Interests receivable | ||||
| Dividends receivable | 615,115.33 | |||
| Buying back the sale of financial assets | ||||
| Inventory | V. 8 | 42,765,598,328.01 | 27,879,505,159.39 | 27,879,505,159.39 |
| Contract assets | V. 9 | 1,151,228,472.63 | 78,545,525.60 | 78,545,525.60 |
| Assets held for sale | ||||
| Non-current assets due within one year | V. 10 | 11,033,571,932.60 | ||
| Other current assets | V. 11 | 9,382,177,587.07 | 15,617,301,913.87 | 15,617,301,913.87 |
| Total current assets | 225,849,652,179.18 | 213,632,987,164.66 | 213,632,987,164.66 | |
| Non-current assets: | ||||
| Disbursement of loans statements and advances | V. 12 | 4,142,652,901.85 | 5,273,805,581.52 | 5,273,805,581.52 |
| Debt investment | ||||
| Other debt investments | V. 13 | 5,910,056,891.62 | 502,202,293.17 | 502,202,293.17 |
| Long-term receivables | V. 14 | 2,419,031.07 | ||
| Long-term equity investments | V. 15 | 10,337,008,014.57 | 8,119,841,062.14 | 8,119,841,062.14 |
| Other equity instruments investments | V. 16 | 10,114,246,030.05 | 7,788,405,891.47 | 7,788,405,891.47 |
| Other non-current financial assets | V. 17 | 81,309,327.39 | 2,003,483,333.33 | 2,003,483,333.33 |
| Investment real estate | V. 18 | 454,854,822.63 | 463,420,861.39 | 463,420,861.39 |
| Fixed assets | V. 19 | 31,188,726,142.99 | 18,990,525,087.94 | 18,990,525,087.94 |
| Construction in progress | V. 20 | 6,481,236,333.38 | 4,016,082,730.07 | 4,016,082,730.07 |
| Usufruct assets | V. 21 | 14,603,282.99 | 38,952,103.28 | |
| Intangible assets | V. 22 | 9,916,967,208.10 | 5,878,288,762.64 | 5,878,288,762.64 |
| Development expenditures | ||||
| Goodwill | V. 23 | 707,629,136.24 | 201,902,704.02 | 201,902,704.02 |
| Long-term unamortized expenses | 18,724,025.74 | 1,954,062.19 | 8,567,923.50 | |
| Deferred income tax assets | V. 24 | 13,661,849,772.68 | 11,550,292,201.02 | 11,550,292,201.02 |
| Other non-current assets | V. 25 | 716,248,679.90 | 788,118,031.40 | 788,118,031.40 |
| Total non-current assets | 93,748,531,601.20 | 65,617,274,705.58 | 65,584,936,463.61 | |
| Total assets | 319,598,183,780.38 | 279,250,261,870.24 | 279,217,923,628.27 | |
| Consolidated Balance Sheet (Continued) | ||||
| December 31, 2021 | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | December 31, 2021 | January 1, 2021 | December 31, 2020 |
| Current liabilities: | ||||
| Short-term borrowings | V. 26 | 27,617,920,548.11 | 20,304,384,742.34 | 20,304,384,742.34 |
| Loans from other banks | V. 27 | 300,021,500.00 | 300,020,250.00 | 300,020,250.00 |
| Trading financial liabilities | ||||
| Derivative financial liabilities | ||||
| Notes payable | V. 30 | 40,743,984,514.42 | 21,427,071,950.32 | 21,427,071,950.32 |
| Accounts payable | V. 31 | 35,875,090,911.05 | 31,604,659,166.88 | 31,604,659,166.88 |
| Advances from customers | ||||
| Contract liabilities | V. 32 | 15,505,499,178.75 | 11,678,180,424.65 | 11,678,180,424.65 |
| Financial assets sold for repurchase | V. 28 | 746,564,041.09 | 475,033,835.62 | 475,033,835.62 |
| Deposits from customers and interbank | V. 29 | 182,681,905.74 | 261,006,708.24 | 261,006,708.24 |
| Employee pay payable | V. 33 | 3,466,630,401.73 | 3,365,355,468.69 | 3,365,355,468.69 |
| Taxes and dues payable | V. 34 | 2,230,471,191.49 | 2,301,355,583.02 | 2,301,355,583.02 |
| Other payables | V. 35 | 6,763,119,937.14 | 2,379,395,717.44 | 2,379,395,717.44 |
| Including: Interests payable | ||||
| Dividends payable | 2,367,112.94 | 6,986,645.96 | 6,986,645.96 | |
| Liabilities held for sale | ||||
| Non-current liabilities due within one year | V. 36 | 1,255,294,034.84 | 22,927,889.42 | |
| Other current liabilities | V. 37 | 62,414,107,264.20 | 64,382,254,283.54 | 64,382,254,283.54 |
| Total current liabilities | 197,101,385,428.56 | 158,501,646,020.16 | 158,478,718,130.74 | |
| Non-current liabilities: | ||||
| Long-term borrowings | V. 38 | 8,960,864,258.30 | 1,860,713,816.09 | 1,860,713,816.09 |
| Bonds payable | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Lease liabilities | V. 39 | 3,313,452.52 | 9,410,352.55 | |
| Long-term payables | V. 40 | 446,194,591.92 | ||
| Long-term payroll payable | V. 41 | 164,408,471.00 | 149,859,788.00 | 149,859,788.00 |
| Accrued liabilities | ||||
| Deferred Income | V. 42 | 2,702,653,897.78 | 437,033,702.46 | 437,033,702.46 |
| Deferred income tax liabilities | V. 24 | 2,293,912,513.79 | 1,411,111,102.84 | 1,411,111,102.84 |
| Other non-current liabilities | ||||
| Total non-current liabilities | 14,571,347,185.31 | 3,868,128,761.94 | 3,858,718,409.39 | |
| Total liabilities | 211,672,732,613.87 | 162,369,774,782.10 | 162,337,436,540.13 | |
| Shareholders’ equity: | ||||
| Capital stock | V. 43 | 5,914,469,040.00 | 6,015,730,878.00 | 6,015,730,878.00 |
| Other equity instruments | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Capital reserves | V. 44 | 125,874,127.56 | 121,850,280.68 | 121,850,280.68 |
| Less: Treasury stock | V. 45 | 19,579,646,233.43 | 5,182,273,853.90 | 5,182,273,853.90 |
| Other comprehensive income | V. 46 | 11,204,004,355.27 | 7,396,060,195.47 | 7,396,060,195.47 |
| Special reserve | V. 47 | 22,403,846.26 | ||
| Surplus reserve | V. 48 | 1,983,727,107.74 | 3,499,671,556.59 | 3,499,671,556.59 |
| General risk provisions | V. 49 | 505,599,356.30 | 497,575,772.26 | 497,575,772.26 |
| Undistributed profit | V. 50 | 103,475,223,000.17 | 102,841,596,377.66 | 102,841,596,377.66 |
| Equity total attributable to the shareholders of the parent company | 103,651,654,599.87 | 115,190,211,206.76 | 115,190,211,206.76 | |
| Minority equity | 4,273,796,566.64 | 1,690,275,881.38 | 1,690,275,881.38 | |
| Equity total of the shareholders | 107,925,451,166.51 | 116,880,487,088.14 | 116,880,487,088.14 | |
| Total liabilities and shareholders' equity | 319,598,183,780.38 | 279,250,261,870.24 | 279,217,923,628.27 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||
| Consolidated Income Statement | |||
| January to December in 2021 | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | Unit: Yuan | ||
| Item | Note | For the Year 2021 | For the Year 2020 |
| I. Total operating revenues | 189,654,033,523.50 | 170,497,415,702.41 | |
| Including: Operating Revenue | V. 51 | 187,868,874,892.71 | 168,199,204,404.53 |
| Interest revenue | V. 52 | 1,785,060,001.28 | 2,295,972,686.55 |
| Fee and commission income | 98,629.51 | 2,238,611.33 | |
| II. Total operating costs | 163,521,848,332.24 | 146,260,681,865.34 | |
| Including: Operating Cost | V. 51 | 142,251,638,589.87 | 124,229,033,680.92 |
| Interest expense | V. 52 | 523,238,956.03 | 304,448,121.92 |
| Handling charges and commission expenses | 815,760.35 | 516,318.75 | |
| Taxes and surcharges | V. 53 | 1,076,664,461.78 | 964,600,693.81 |
| Sales expense | V. 54 | 11,581,735,617.31 | 13,043,241,798.27 |
| Administrative expense | V. 55 | 4,051,241,003.05 | 3,603,782,803.64 |
| Research and development expenses | V. 56 | 6,296,715,941.03 | 6,052,563,108.10 |
| Financial expense | V. 57 | -2,260,201,997.18 | -1,937,504,660.07 |
| Including: Interest expense | 1,752,112,003.72 | 1,088,369,394.87 | |
| Interest revenue | 4,242,449,764.06 | 3,708,312,903.06 | |
| Add: Other incomes | V. 58 | 832,177,253.43 | 1,164,120,111.04 |
| Income from investments (losses expressed with "-") | V. 59 | 522,063,222.58 | 713,010,071.67 |
| Including: Investment incomes from joint ventures or associates | 51,594,928.82 | 35,314,343.21 | |
| Income from derecognition of financial assets measured at amortization costs | |||
| Income from changes in fair value (losses expressed with "-") | V. 60 | -58,130,545.10 | 200,153,472.05 |
| Credit impairment losses (losses expressed with "-") | V. 61 | -150,980,869.74 | 192,824,692.53 |
| Asset impairment losses (losses expressed with "-") | V. 62 | -606,161,255.62 | -466,270,321.67 |
| Income from disposal of assets (losses expressed with "-") | V. 63 | 6,212,295.19 | 2,945,975.01 |
| III. Operating profit (losses expressed with "-") | 26,677,365,292.00 | 26,043,517,837.70 | |
| Add: Non-operating revenues | V. 64 | 154,321,776.87 | 287,160,721.97 |
| Less: Non-operating expenses | V. 65 | 28,449,570.30 | 21,741,130.88 |
| IV. Total profit (total losses expressed with "-") | 26,803,237,498.57 | 26,308,937,428.79 | |
| Less: Income tax expenses | V. 66 | 3,971,343,865.68 | 4,029,695,233.52 |
| V. Net profit (net loss expressed with "-") | 22,831,893,632.89 | 22,279,242,195.27 | |
| (I) Classification by business sustainability | |||
| 1. Continuous operating net profit (net loss expressed with "-") | 22,831,895,323.32 | 22,279,523,503.64 | |
| 2. Discontinued operation net profit (net loss expressed with "-") | -1,690.43 | -281,308.37 | |
| (II) Classification by ownership | |||
| 1. Net profits attributable to shareholders of the parent company ("-" stands for net losses) | 23,063,732,372.62 | 22,175,108,137.32 | |
| 2. Minority shareholders' gains and losses ("-" stands for net losses) | -231,838,739.73 | 104,134,057.95 | |
| VI. Net of tax of other comprehensive income | V. 46 | 3,923,057,187.22 | 1,135,981,683.99 |
| (I) Net of tax of other comprehensive income attributable shareholders of the parent company | 3,922,893,977.40 | 1,135,768,214.34 | |
| 1. Other comprehensive income which cannot be reclassified into profits and losses | 3,977,359,915.54 | 1,242,966,688.50 | |
| (1) Changes arising from remeasurement of the defined benefit plan | -12,391,783.00 | -6,851,653.00 | |
| (2) Other comprehensive income which cannot be transferred to profit or loss under the equity method | 1,849,833,156.32 | 215,136,201.85 | |
| (3) Changes in fair value of other equity instrument investments | 2,139,918,542.22 | 1,034,682,139.65 | |
| (4) Changes in fair value of the company's own credit risk | |||
| (5) Others | |||
| 2. Other comprehensive income which will be reclassified into profits and losses in the future | -54,465,938.14 | -107,198,474.16 | |
| (1) Other comprehensive income that can be transferred to profit or loss under the equity method | -208,819.44 | -182,758.17 | |
| (2) Changes in fair value of other debt investments | -2,346,134.55 | -1,862,050.54 | |
| (3) Amount of financial assets reclassified and included into other comprehensive income | |||
| (4) Provision for credit impairment of other debt investments | |||
| (5) Cash flow hedge reserve | 6,966,706.25 | 13,739,102.50 | |
| (6) Difference arising from translation of financial statements in foreign currency | -58,877,690.40 | -118,892,767.95 | |
| (II) Net of tax of other comprehensive income attributable to minority shareholders | 163,209.82 | 213,469.65 | |
| VII. Total comprehensive income | 26,754,950,820.11 | 23,415,223,879.26 | |
| (I) Total comprehensive income attributable to shareholders of the parent company | 26,986,626,350.02 | 23,310,876,351.66 | |
| (II) Total comprehensive income attributable to minority shareholders | -231,675,529.91 | 104,347,527.60 | |
| VIII. Earnings per share: | |||
| (I) Basic earnings per share (Yuan per Share) | 4.04 | 3.71 | |
| (II) Diluted earnings per share (Yuan per Share) | 4.04 | 3.71 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
| Consolidated Cash Flow Statement | |||
| January to December in 2021 | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | |||
| Item | Note | For the Year 2021 | For the Year 2020 |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 169,646,517,565.79 | 155,890,384,313.86 | |
| Net increase in deposits and due from banks | -78,563,388.63 | -92,506,750.32 | |
| Net increase in borrowings from central bank | |||
| Net increase in placements from other financial institutions | -700,000,000.00 | ||
| Cash received from interests, fees and commissions | 955,723,978.81 | 1,137,265,615.92 | |
| Net increase in placements from other financial institutions | |||
| Net increase in repurchase business capital | 271,500,000.00 | 475,000,000.00 | |
| Refund of tax and levies | 2,467,381,243.01 | 2,484,293,128.44 | |
| Other cash received relating to operating activities | V 67. (1) | 3,938,701,318.02 | 4,698,328,013.32 |
| Subtotal of cash inflows from operating activities | 177,201,260,717.00 | 163,892,764,321.22 | |
| Cash payments for goods acquired and services received | 145,601,518,405.47 | 121,793,121,343.62 | |
| Net increase in loans and advances to customers | -1,131,768,349.46 | -9,091,377,401.54 | |
| Net increase in deposits with central bank and other financial institutions | -633,908,556.69 | -976,192,487.64 | |
| Net increase in lending funds | |||
| Cash paid for interests, fees and commissions | 525,419,503.63 | 312,753,420.49 | |
| Cash paid to and on behalf of employees | 9,848,593,392.99 | 8,901,277,136.77 | |
| Payments of all types of taxes | 8,371,839,466.55 | 8,184,052,900.55 | |
| Other cash paid relating to operating activities | V 67. (2) | 12,725,203,595.79 | 15,530,492,099.81 |
| Subtotal of cash outflows from operating activities | 175,306,897,458.28 | 144,654,127,012.06 | |
| Net cash flows from operating activities | 1,894,363,258.72 | 19,238,637,309.16 | |
| II. Cash flows from investing activities: | |||
| Cash received from recovery of investments | 7,349,802,107.98 | 9,520,639,757.24 | |
| Cash received from return of investments | 161,515,418.96 | 305,411,730.38 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 14,956,809.63 | 6,631,829.54 | |
| Net cash received from disposal of subsidiaries and other business units | 13,498,800.00 | ||
| Other cash received relating to investing activities | V 67. (3) | 47,851,587,196.05 | 4,322,649,440.42 |
| Subtotal of cash inflows from investment activities | 55,391,360,332.62 | 14,155,332,757.58 | |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 5,727,074,800.44 | 4,528,646,805.03 | |
| Cash paid for investments | 18,154,432,702.74 | 3,561,055,956.90 | |
| Net cash paid for acquisition of subsidiaries and other business units | V 68. (2) | 1,747,336,403.99 | 425,875,376.81 |
| Other cash paid relating to investing activities | V 67. (4) | 10,532,866.10 | 5,542,024,468.66 |
| Subtotal of cash outflows from investment activities | 25,639,376,773.27 | 14,057,602,607.40 | |
| Net cash flows from investment activities | 29,751,983,559.35 | 97,730,150.18 | |
| III. Cash flows from financing activities: | |||
| Cash received from absorbing investment | 45,113,614.81 | 14,670,000.00 | |
| Including: Cash received from minority shareholder investment by subsidiary | 45,113,614.81 | 14,670,000.00 | |
| Cash received from borrowings | 88,802,444,041.60 | 37,599,791,534.80 | |
| Other cash received relating to financing activities | V 67. (5) | 1,143,534,793.64 | |
| Subtotal of cash inflows from financing activities | 89,991,092,450.05 | 37,614,461,534.80 | |
| Cash repayments of amounts borrowed | 57,868,429,527.67 | 29,475,431,119.54 | |
| Cash paid for dividend and profit distribution or interest payment | 17,546,695,095.00 | 14,236,014,439.83 | |
| Including: Dividends and profits paid to minority shareholders by subsidiaries | 411,607,065.23 | ||
| Other cash paid relating to financing activities | V 67. (6) | 39,906,551,717.86 | 15,014,513,473.63 |
| Subtotal of cash outflows from financing activities | 115,321,676,340.53 | 58,725,959,033.00 | |
| Net cash flow from financing activities | -25,330,583,890.48 | -21,111,497,498.20 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -589,068,807.74 | -372,392,144.48 | |
| V. Net increase in cash and cash equivalents | 5,726,694,119.85 | -2,147,522,183.34 | |
| Add: Beginning balance of cash and cash equivalents | 24,225,049,638.15 | 26,372,571,821.49 | |
| VI. Ending balance of cash and cash equivalents | 29,951,743,758.00 | 24,225,049,638.15 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
| Consolidated Statement of Changes in Shareholders' Equity | ||||||||||||||
| January to December in 2021 | ||||||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||||||||||||
| Item | For the year 2021 | |||||||||||||
| Equity attributable to the shareholders of the parent company | Minority equity | Equity total of the shareholders | ||||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserve | General risk provisions | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | ||||||||||||
| I. Ending balance for the previous year | 6,015,730,878.00 | 121,850,280.68 | 5,182,273,853.90 | 7,396,060,195.47 | 3,499,671,556.59 | 497,575,772.26 | 102,841,596,377.66 | 115,190,211,206.76 | 1,690,275,881.38 | 116,880,487,088.14 | ||||
| Add: Changes in accounting policies | ||||||||||||||
| Early error correction | ||||||||||||||
| Business combination involving enterprises under common control | ||||||||||||||
| II. Beginning balance for the current year | 6,015,730,878.00 | 121,850,280.68 | 5,182,273,853.90 | 7,396,060,195.47 | 3,499,671,556.59 | 497,575,772.26 | 102,841,596,377.66 | 115,190,211,206.76 | 1,690,275,881.38 | 116,880,487,088.14 | ||||
| III. Increase or decrease in the current year (decrease expressed with "-") | -101,261,838.00 | 4,023,846.88 | 14,397,372,379.53 | 3,807,944,159.80 | 22,403,846.26 | -1,515,944,448.85 | 8,023,584.04 | 633,626,622.51 | -11,538,556,606.89 | 2,583,520,685.26 | -8,955,035,921.63 | |||
| (I) Total comprehensive income | 3,922,893,977.40 | 23,063,732,372.62 | 26,986,626,350.02 | -231,675,529.91 | 26,754,950,820.11 | |||||||||
| (II) Capital invested by shareholders and capital decrease | -101,261,838.00 | 4,023,846.88 | 14,397,372,379.53 | 21,259,298.20 | -3,499,671,556.59 | -3,794,252,950.50 | -21,767,275,579.54 | 2,864,813,072.60 | -18,902,462,506.94 | |||||
| 1. Ordinary stocks invested by shareholders | 49,331,294.00 | 49,331,294.00 | ||||||||||||
| 2. Capital invested by holders of other equity | ||||||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | 31,002,910.71 | 31,002,910.71 | 31,002,910.71 | |||||||||||
| 4. Others | -101,261,838.00 | -26,979,063.83 | 14,397,372,379.53 | 21,259,298.20 | -3,499,671,556.59 | -3,794,252,950.50 | -21,798,278,490.25 | 2,815,481,778.60 | -18,982,796,711.65 | |||||
| (III) Profit distribution | 1,983,727,107.74 | 8,023,584.04 | -18,744,282,186.78 | -16,752,531,495.00 | -49,903,893.39 | -16,802,435,388.39 | ||||||||
| 1. Appropriation to surplus reserves | 1,983,727,107.74 | -1,983,727,107.74 | ||||||||||||
| 2. Appropriation to general risk provisions | 8,023,584.04 | -8,023,584.04 | ||||||||||||
| 3. Allocation to shareholders | -16,752,531,495.00 | -16,752,531,495.00 | -49,903,893.39 | -16,802,435,388.39 | ||||||||||
| 4. Others | ||||||||||||||
| (IV) Internal carry-over of shareholders' equity | -114,949,817.60 | 108,429,387.17 | -6,520,430.43 | -6,520,430.43 | ||||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | ||||||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | ||||||||||||||
| 3. Surplus reserves for making up losses | ||||||||||||||
| 4. Defined benefit plan change carried over into retained earnings | ||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -114,949,817.60 | 108,429,387.17 | -6,520,430.43 | -6,520,430.43 | ||||||||||
| 6. Others | ||||||||||||||
| (V) Special reserves | 1,144,548.06 | 1,144,548.06 | 287,035.96 | 1,431,584.02 | ||||||||||
| 1. Amount withdrawn for the period | 2,404,215.46 | 2,404,215.46 | 552,286.62 | 2,956,502.08 | ||||||||||
| 2. Amount used for the period | 1,259,667.40 | 1,259,667.40 | 265,250.66 | 1,524,918.06 | ||||||||||
| (VI) Others | ||||||||||||||
| IV. Ending balance for 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 |
Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi
| Consolidated Statement of Changes in Shareholders’ Equity (Continued) | ||||||||||||||
| January to December in 2020 | ||||||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||||||||||||
| Item | For the Year 2020 | |||||||||||||
| Equity attributable to shareholders of the parent company | Minority equity | Equity total of the shareholders | ||||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provisions | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | ||||||||||||
| I. Ending balance for the previous year | 6,015,730,878.00 | 93,379,500.71 | 6,260,291,981.13 | 3,499,671,556.59 | 489,855,826.75 | 93,794,643,539.49 | 110,153,573,282.67 | 1,894,083,240.41 | 112,047,656,523.08 | |||||
| Add: Changes in accounting policies | ||||||||||||||
| Early error correction | ||||||||||||||
| Business combination involving enterprises under common control | ||||||||||||||
| II. Beginning balance for the current year | 6,015,730,878.00 | 93,379,500.71 | 6,260,291,981.13 | 3,499,671,556.59 | 489,855,826.75 | 93,794,643,539.49 | 110,153,573,282.67 | 1,894,083,240.41 | 112,047,656,523.08 | |||||
| III. Increase or decrease in the current year (decrease expressed with “-”) | 28,470,779.97 | 5,182,273,853.90 | 1,135,768,214.34 | 7,719,945.51 | 9,046,952,838.17 | 5,036,637,924.09 | -203,807,359.03 | 4,832,830,565.06 | ||||||
| (I) Total comprehensive income | 1,135,768,214.34 | 22,175,108,137.32 | 23,310,876,351.66 | 104,347,527.60 | 23,415,223,879.26 | |||||||||
| (II) Capital invested by shareholders and capital decrease | 2,966,412.88 | 5,182,273,853.90 | -5,179,307,441.02 | 128,956,545.69 | -5,050,350,895.33 | |||||||||
| 1. Ordinary stocks invested by shareholders | 14,670,000.00 | 14,670,000.00 | ||||||||||||
| 2. Capital invested by holders of other equity | ||||||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | ||||||||||||||
| 4. Others | 2,966,412.88 | 5,182,273,853.90 | -5,179,307,441.02 | 114,286,545.69 | -5,065,020,895.33 | |||||||||
| (III) Profit distribution | 7,719,945.51 | -13,148,143,215.11 | -13,140,423,269.60 | -411,607,065.23 | -13,552,030,334.83 | |||||||||
| 1. Appropriation to surplus reserves | ||||||||||||||
| 2. Appropriation to general risk provisions | 7,719,945.51 | -7,719,945.51 | ||||||||||||
| 3. Allocation to shareholders | -13,140,423,269.60 | -13,140,423,269.60 | -411,607,065.23 | -13,552,030,334.83 | ||||||||||
| 4. Others | ||||||||||||||
| (IV) Internal carry-over of shareholders' equity | 25,504,367.09 | 19,987,915.96 | 45,492,283.05 | -25,504,367.09 | 19,987,915.96 | |||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | ||||||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | ||||||||||||||
| 3. Surplus reserves for making up losses | ||||||||||||||
| 4. Defined benefit plan change carried over into retained earnings | ||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | 19,987,915.96 | 19,987,915.96 | 19,987,915.96 | |||||||||||
| 6. Others | 25,504,367.09 | 25,504,367.09 | -25,504,367.09 | |||||||||||
| (V) Special reserves | ||||||||||||||
| 1. Amount withdrawn for the period | ||||||||||||||
| 2. Amount used for the period | ||||||||||||||
| (VI) Others | ||||||||||||||
| IV. Ending balance for the current year | 6,015,730,878.00 | 121,850,280.68 | 5,182,273,853.·90 | 7,396,060,195.47 | 3,499,671,556.59 | 497,575,772.26 | 102,841,596,377.66 | 115,190,211,206.76 | 1,690,275,881.38 | 116,880,487,088.14 | ||||
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||||||||||||
| Balance Sheet of Parent Company | ||||
| December 31, 2021 | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | December 31, 2021 | January 1, 2021 | December 31, 2020 |
| Current assets: | ||||
| Monetary funds | 100,413,441,304.10 | 123,828,677,860.41 | 123,828,677,860.41 | |
| Trading financial liabilities | 370,820,500.00 | 370,820,500.00 | ||
| Derivative financial assets | 21,610,541.29 | 76,680,617.45 | 76,680,617.45 | |
| Bills receivable | ||||
| Accounts receivable | XIV. 1 | 3,685,619,949.29 | 3,548,791,695.27 | 3,548,791,695.27 |
| Receivable financing | 21,973,920,103.73 | 18,642,206,012.24 | 18,642,206,012.24 | |
| Advance payments | 23,689,469,573.43 | 17,963,607,702.38 | 17,963,607,702.38 | |
| Other receivables | XIV. 2 | 2,076,879,180.43 | 2,307,154,984.66 | 2,307,154,984.66 |
| Including: Interests receivable | ||||
| Dividends receivable | 2,932,373.42 | 2,932,373.42 | ||
| Inventory | 10,215,532,982.28 | 13,884,110,379.81 | 13,884,110,379.81 | |
| Contract assets | Not Applicable | |||
| Assets held for sale | ||||
| Non-current assets due within one year | 10,969,772,555.56 | |||
| Other current assets | 5,506,040,199.45 | 9,773,701,904.35 | 9,773,701,904.35 | |
| Total current assets | 178,552,286,389.56 | 190,395,751,656.57 | 190,395,751,656.57 | |
| Non-current assets: | ||||
| Debt investment | ||||
| Other debt investments | 5,182,465,277.78 | |||
| Long-term receivables | ||||
| Long-term equity investments | XIV. 3 | 29,888,588,986.29 | 24,619,357,367.01 | 24,619,357,367.01 |
| Other equity instruments investments | 9,889,910,814.28 | 7,505,139,669.97 | 7,505,139,669.97 | |
| Other non-current financial assets | 81,309,327.39 | 2,003,483,333.33 | 2,003,483,333.33 | |
| Investment real estate | 19,871,480.80 | 22,173,605.79 | 22,173,605.79 | |
| Fixed assets | 2,535,403,625.71 | 2,706,217,465.90 | 2,706,217,465.90 | |
| Construction in progress | 907,483,903.01 | 570,077,306.55 | 570,077,306.55 | |
| Usufruct assets | ||||
| Intangible assets | 843,960,439.75 | 780,743,893.31 | 780,743,893.31 | |
| Development expenditures | ||||
| Goodwill | ||||
| Long-term unamortized expenses | ||||
| Deferred income tax assets | 10,730,613,644.43 | 10,926,393,867.16 | 10,926,393,867.16 | |
| Other non-current assets | 86,616,430.09 | 97,653,134.61 | 97,653,134.61 | |
| Total non-current assets | 60,166,223,929.53 | 49,231,239,643.63 | 49,231,239,643.63 | |
| Total assets | 238,718,510,319.09 | 239,626,991,300.20 | 239,626,991,300.20 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||
| Balance Sheet of Parent Company (Continued) | ||||
| December 31, 2021 | ||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | ||||
| Item | Note | December 31, 2021 | January 1, 2021 | December 31, 2020 |
| Current liabilities: | ||||
| Short-term borrowings | 18,068,823,304.24 | 15,862,663,592.40 | 15,862,663,592.40 | |
| Trading financial liabilities | ||||
| Derivative financial liabilities | ||||
| Notes payable | 35,673,937,662.52 | 19,177,017,664.74 | 19,177,017,664.74 | |
| Accounts payable | 33,677,905,272.50 | 44,365,200,963.00 | 44,365,200,963.00 | |
| Advances from customers | ||||
| Contract liabilities | 12,219,603,424.23 | 14,594,653,911.45 | 14,594,653,911.45 | |
| Employee pay payable | 1,464,834,311.62 | 1,306,897,769.56 | 1,306,897,769.56 | |
| Taxes and dues payable | 1,067,213,552.76 | 777,604,964.68 | 777,604,964.68 | |
| Other payables | 2,470,038,943.73 | 1,773,107,761.34 | 1,773,107,761.34 | |
| Including: Interests payable | ||||
| Dividends payable | 602,881.87 | 602,881.87 | 602,881.87 | |
| Liabilities held for sale | ||||
| Non-current liabilities due within one year | 135,037,104.90 | |||
| Other current liabilities | 59,674,216,467.38 | 59,737,975,078.14 | 59,737,975,078.14 | |
| Total current liabilities | 164,451,610,043.88 | 157,595,121,705.31 | 157,595,121,705.31 | |
| Non-current liabilities: | ||||
| Long-term borrowings | 6,606,444,166.67 | 143,254,262.42 | 143,254,262.42 | |
| Bonds payable | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Lease liabilities | ||||
| Long-term payables | ||||
| Long-term payroll payable | 164,408,471.00 | 149,859,788.00 | 149,859,788.00 | |
| Accrued liabilities | ||||
| Deferred Income | 85,326,589.00 | 74,814,702.48 | 74,814,702.48 | |
| Deferred income tax liabilities | 1,291,446,408.46 | 848,906,843.68 | 848,906,843.68 | |
| Other non-current liabilities | ||||
| Total non-current liabilities | 8,147,625,635.13 | 1,216,835,596.58 | 1,216,835,596.58 | |
| Total liabilities | 172,599,235,679.01 | 158,811,957,301.89 | 158,811,957,301.89 | |
| Shareholders’ equity: | ||||
| Capital stock | 5,914,469,040.00 | 6,015,730,878.00 | 6,015,730,878.00 | |
| Other equity instruments | ||||
| Including: Preferred stock | ||||
| Perpetual bond | ||||
| Capital reserves | 109,621,222.84 | 184,850,281.86 | 184,850,281.86 | |
| Less: Treasury stock | 19,579,646,233.43 | 5,182,273,853.90 | 5,182,273,853.90 | |
| Other comprehensive income | 11,663,015,593.78 | 7,763,409,043.86 | 7,763,409,043.86 | |
| Special reserve | ||||
| Surplus reserve | 1,983,727,107.74 | 3,497,114,024.31 | 3,497,114,024.31 | |
| Undistributed profit | 66,028,087,909.15 | 68,536,203,624.18 | 68,536,203,624.18 | |
| Equity total of the shareholders | 66,119,274,640.08 | 80,815,033,998.31 | 80,815,033,998.31 | |
| Total liabilities and shareholders' equity | 238,718,510,319.09 | 239,626,991,300.20 | 239,626,991,300.20 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | ||||
| Income Statement of Parent Company | |||
| January to December in 2021 | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | Unit: Yuan | ||
| Item | Note | For the Year 2021 | For the Year 2020 |
| I. Operating revenues | XIV. 4 | 117,502,214,959.15 | 107,841,790,174.49 |
| Less: Operating Cost | XIV. 4 | 84,576,440,398.57 | 76,008,352,345.28 |
| Taxes and surcharges | 268,607,695.48 | 174,392,631.24 | |
| Sales expense | 9,733,828,322.47 | 11,169,691,825.61 | |
| Administrative expense | 875,539,864.96 | 808,715,696.48 | |
| Research and development expenses | 4,964,928,966.97 | 4,811,036,302.94 | |
| Financial expense | -3,058,810,928.42 | -2,919,245,870.62 | |
| Including: Interest expense | 1,312,749,932.63 | 840,469,134.14 | |
| Interest revenue | 4,719,654,050.92 | 4,434,457,504.91 | |
| Add: Other incomes | 98,992,747.91 | 233,757,468.48 | |
| Income from investments (losses expressed with "-") | XIV. 5 | 2,960,166,670.54 | 12,402,627,036.29 |
| Including: Investment incomes from joint ventures or associates | -12,905,170.50 | -12,168,894.57 | |
| Income from 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 "-") | -57,612,527.32 | 56,685,742.93 | |
| Credit impairment losses (losses expressed with "-") | 47,932,902.68 | 2,282,469.02 | |
| Asset impairment losses (losses expressed with "-") | -482,109,320.46 | -178,340,890.13 | |
| Income from disposal of assets (losses expressed with "-") | 1,775,599.93 | 1,733,177.13 | |
| II. Operating profit (losses expressed with "-") | 22,710,826,712.40 | 30,307,592,247.28 | |
| Add: Non-operating revenues | 19,734,701.84 | 46,252,800.73 | |
| Less: Non-operating expenses | 2,241,847.84 | 9,176,432.87 | |
| III. Total profit (total losses expressed with "-") | 22,728,319,566.40 | 30,344,668,615.14 | |
| Less: Income tax expenses | 2,891,048,488.98 | 2,659,156,932.61 | |
| IV. Net profit (net loss expressed with "-") | 19,837,271,077.42 | 27,685,511,682.53 | |
| (I) Net profit from continuing operations (net loss expressed with "-") | 19,837,271,077.42 | 27,685,511,682.53 | |
| (II) Net profit from discontinued operations (net loss expressed with "-") | |||
| V. Net of tax of other comprehensive income | 4,014,556,367.52 | 1,301,384,947.45 | |
| (I) Other comprehensive income not to be reclassified to profit or loss | 4,016,410,674.15 | 1,294,557,343.46 | |
| 1. Changes arising from remeasurement of the defined benefit plan | -12,391,783.00 | -6,851,653.00 | |
| 2. Other comprehensive income which cannot be transferred to profit or loss under the equity method | 1,849,833,156.32 | 215,136,201.85 | |
| 3. Changes in fair value of other equity instrument investments | 2,178,969,300.83 | 1,086,272,794.61 | |
| 4. Changes in fair value of the company's own credit risk | |||
| 5. Others | |||
| (II) Other comprehensive income to be reclassified to profit or loss | -1,854,306.63 | 6,827,603.99 | |
| 1. Other comprehensive income that can be transferred to profit or loss under the equity method | -182,758.17 | ||
| 2. Changes in fair value of other debt investments | -8,821,012.88 | -6,728,740.34 | |
| 3. Amount of financial assets reclassified and included into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedge reserve | 6,966,706.25 | 13,739,102.50 | |
| 6. Difference arising from translation of financial statements in foreign currency | |||
| 7. Others | |||
| VI. Total comprehensive income | 23,851,827,444.94 | 28,986,896,629.98 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
| Cash Flow Statements of Parent Company | |||
| January to December in 2021 | |||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI | Unit: Yuan | ||
| Item | Note | For the Year 2021 | For the Year 2020 |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 96,059,533,928.05 | 93,602,519,755.19 | |
| Refund of tax and levies | 2,115,966,444.28 | 2,108,659,339.52 | |
| Other cash received relating to operating activities | 50,710,080,340.57 | 35,640,698,959.97 | |
| Subtotal of cash inflows from operating activities | 148,885,580,712.90 | 131,351,878,054.68 | |
| Cash payments for goods acquired and services received | 116,836,791,145.16 | 88,931,239,009.32 | |
| Cash paid to and on behalf of employees | 3,576,725,919.34 | 3,521,483,800.64 | |
| Payments of all types of taxes | 4,278,081,434.78 | 3,915,413,842.97 | |
| Other cash paid relating to operating activities | 18,436,681,133.15 | 18,625,111,285.52 | |
| Subtotal of cash outflows from operating activities | 143,128,279,632.43 | 114,993,247,938.45 | |
| Net cash flows from operating activities | 5,757,301,080.47 | 16,358,630,116.23 | |
| II. Cash flows from investing activities: | |||
| Cash received from recovery of investments | 7,204,261,026.83 | 1,154,839,757.24 | |
| Cash received from return of investments | 93,574,837.20 | 3,616,084,603.45 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 668,332.00 | 2,552,696.74 | |
| Net cash received from disposal of subsidiaries and other business units | |||
| Other cash received relating to investing activities | 44,645,766,820.10 | 5,376,248,383.05 | |
| Subtotal of cash inflows from investment activities | 51,944,271,016.13 | 10,149,725,440.48 | |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 791,819,639.99 | 806,766,396.66 | |
| Cash paid for investments | 19,474,047,673.02 | 6,623,118,162.38 | |
| Net cash paid for acquisition of subsidiaries and other business units | 1,828,275,113.56 | 150,000,000.00 | |
| Other cash paid relating to investing activities | 1,693,811,425.80 | 8,155,280,838.65 | |
| Subtotal of cash outflows from investment activities | 23,787,953,852.37 | 15,735,165,397.69 | |
| Net cash flows from investment activities | 28,156,317,163.76 | -5,585,439,957.21 | |
| III. Cash flows from financing activities: | |||
| Cash received from absorbing investment | |||
| Cash received from borrowings | 63,139,445,175.64 | 29,395,517,581.94 | |
| Other cash received relating to financing activities | 2,441,352,006.04 | 878,448,565.19 | |
| Subtotal of cash inflows from financing activities | 65,580,797,181.68 | 30,273,966,147.13 | |
| Cash repayments of amounts borrowed | 50,350,925,464.00 | 24,568,052,850.00 | |
| Cash paid for dividend and profit distribution or interest payment | 17,449,330,238.22 | 13,662,321,384.07 | |
| Other cash paid relating to financing activities | 28,618,739,788.45 | 15,508,240,629.89 | |
| Subtotal of cash outflows from financing activities | 96,418,995,490.67 | 53,738,614,863.96 | |
| Net cash flow from financing activities | -30,838,198,308.99 | -23,464,648,716.83 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -228,723,815.38 | -548,526,629.60 | |
| V. Net increase in cash and cash equivalents | 2,846,696,119.86 | -13,239,985,187.41 | |
| Add: Beginning balance of cash and cash equivalents | 17,119,780,780.05 | 30,359,765,967.46 | |
| VI. Ending balance of cash and cash equivalents | 19,966,476,899.91 | 17,119,780,780.05 | |
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||
| Statement of Changes in Shareholders’ Equity of Parent Company | |||||||||||
| January to December in 2021 | |||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | |||||||||||
| Item | For the year 2021 | ||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Equity total of the shareholders | |||
| Preferred stock | Perpetual bond | Others | |||||||||
| I. Ending balance for the previous year | 6,015,730,878.00 | 184,850,281.86 | 5,182,273,853.90 | 7,763,409,043.86 | 3,497,114,024.31 | 68,536,203,624.18 | 80,815,033,998.31 | ||||
| Add: Changes in accounting policies | |||||||||||
| Early error correction | |||||||||||
| Others | |||||||||||
| II. Beginning balance for the current year | 6,015,730,878.00 | 184,850,281.86 | 5,182,273,853.90 | 7,763,409,043.86 | 3,497,114,024.31 | 68,536,203,624.18 | 80,815,033,998.31 | ||||
| III. Increase or decrease in the current year (decrease expressed with “-”) | -101,261,838.00 | -75,229,059.02 | 14,397,372,379.53 | 3,899,606,549.92 | -1,513,386,916.57 | -2,508,115,715.03 | -14,695,759,358.23 | ||||
| (I) Total comprehensive income | 4,014,556,367.52 | 19,837,271,077.42 | 23,851,827,444.94 | ||||||||
| (II) Capital invested by shareholders and capital decrease | -101,261,838.00 | -75,229,059.02 | 14,397,372,379.53 | -3,497,114,024.31 | -3,717,557,576.88 | -21,788,534,877.74 | |||||
| 1. Ordinary stocks invested by shareholders | |||||||||||
| 2. Capital invested by holders of other equity | |||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | 31,002,910.71 | 31,002,910.71 | |||||||||
| 4. Others | -101,261,838.00 | -106,231,969.73 | 14,397,372,379.53 | -3,497,114,024.31 | -3,717,557,576.88 | -21,819,537,788.45 | |||||
| (III) Profit distribution | 1,983,727,107.74 | -18,736,258,602.74 | -16,752,531,495.00 | ||||||||
| 1. Appropriation to surplus reserves | 1,983,727,107.74 | -1,983,727,107.74 | |||||||||
| 2. Allocation to shareholders | -16,752,531,495.00 | -16,752,531,495.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal carry-over of shareholders' equity | -114,949,817.60 | 108,429,387.17 | -6,520,430.43 | ||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | |||||||||||
| 3. Surplus reserves for making up losses | |||||||||||
| 4. Defined benefit plan change carried over into retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | -114,949,817.60 | 108,429,387.17 | -6,520,430.43 | ||||||||
| 6. Others | |||||||||||
| (V) Special reserves | |||||||||||
| 1. Amount withdrawn for the period | |||||||||||
| 2. Amount used for the period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance for 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 | ||||
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||||||||||
| Statement of Changes in Shareholders’ Equity of Parent Company (Continued) | |||||||||||
| January to December in 2020 | |||||||||||
| Prepared by: GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Unit: Yuan | |||||||||||
| Item | For the Year 2020 | ||||||||||
| Capital stock | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Equity total of the shareholders | |||
| Preferred stock | Perpetual bond | Others | |||||||||
| I. Ending balance for the previous year | 6,015,730,878.00 | 179,564,695.55 | 6,462,024,096.41 | 3,497,114,024.31 | 53,971,127,295.29 | 70,125,560,989.56 | |||||
| Add: Changes in accounting policies | |||||||||||
| Early error correction | |||||||||||
| Others | |||||||||||
| II. Beginning balance for the current year | 6,015,730,878.00 | 179,564,695.55 | 6,462,024,096.41 | 3,497,114,024.31 | 53,971,127,295.29 | 70,125,560,989.56 | |||||
| III. Increase or decrease in the current year (decrease expressed with “-”) | 5,285,586.31 | 5,182,273,853.90 | 1,301,384,947.45 | 14,565,076,328.89 | 10,689,473,008.75 | ||||||
| (I) Total comprehensive income | 1,301,384,947.45 | 27,685,511,682.53 | 28,986,896,629.98 | ||||||||
| (II) Capital invested by shareholders and capital decrease | 5,285,586.31 | 5,182,273,853.90 | -5,176,988,267.59 | ||||||||
| 1. Ordinary stocks invested by shareholders | |||||||||||
| 2. Capital invested by holders of other equity | |||||||||||
| 3. Amounts of share-based payments recognized into shareholders' equity | |||||||||||
| 4. Others | 5,285,586.31 | 5,182,273,853.90 | -5,176,988,267.59 | ||||||||
| (III) Profit distribution | -13,140,423,269.60 | -13,140,423,269.60 | |||||||||
| 1. Appropriation to surplus reserves | |||||||||||
| 2. Allocation to shareholders | -13,140,423,269.60 | -13,140,423,269.60 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal carry-over of shareholders' equity | 19,987,915.96 | 19,987,915.96 | |||||||||
| 1. Transfer of capital reserves into capital (or stock capital) | |||||||||||
| 2. Transfer of surplus reserves into capital (or stock capital) | |||||||||||
| 3. Surplus reserves for making up losses | |||||||||||
| 4. Defined benefit plan change carried over into retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | 19,987,915.96 | 19,987,915.96 | |||||||||
| 6. Others | |||||||||||
| (V) Special reserves | |||||||||||
| 1. Amount withdrawn for the period | |||||||||||
| 2. Amount used for the period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance for the current year | 6,015,730,878.00 | 184,850,281.86 | 5,182,273,853.90 | 7,763,409,043.86 | 3,497,114,024.31 | 68,536,203,624.18 | 80,815,033,998.31 | ||||
| Legal Representative: Dong Mingzhu Chief Accountant: Liao Jianxiong Head of Accounting Department: Liu Yanzi | |||||||||||
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
Notes Financial Statements for the Year 2021Ⅰ Basic information of the Company
Gree Electric Appliances, Inc. of Zhuhai (hereinafter referred to as "the Company") was established inDecember 1989, with the unified social credit code 91440400192548256N.The registered capital and equity of the Company was RMB 5,914,469,040.00 by the end of December 31, 2021.For the specific equity, see Note (V) 43 "Equity".
1. Registered address, organizational form and address of the Company
Organizational form of the Company: joint stock limited company
The Company's registration place and office address: Office 608, No. 108, Huitong Third Road, Hengqin NewArea, Zhuhai City, Guangdong Province.
2. Nature of business and main business activities of the Company
The Company is a manufacturing enterprise mainly engaging in the production and sales of air-conditioners andtheir accessories and home appliances and their accessories.
3. Names of the parent company and the ultimate parent company
As of December 31, 2021, the Company had no actual controller.
4. Scope of consolidated financial statements of the current period and its change
As of the end of the report period, there were a total of 156 subsidiaries included in the scope of the consolidatedfinancial statements. Among them, please see Note VII. 1 "Rights and interests in the subsidiary" for first-levelsubsidiaries and Note VI "Changes in the consolidation scope" for the changes in the scope of consolidated financialstatements in this period.
5. Approved submitter and approved submission date of the financial report
This financial report was submitted under approval the Board of Directors of the Company as of April 29, 2022.Ⅱ Preparation basis of financial statements
1. Preparation basis of financial statements
The Company prepares the financial statements on the basis of a going concern and according to the transactionsand events actually incurred and the disclosure provisions in the Accounting Standards for Business Enterprises -Basic Standards (promulgated by the Ministry of Finance Order No. 33, revised by the Ministry of Finance OrderNo.76) and the specific accounting standards, the Implementation Guide for the Accounting Standards for BusinessEnterprises, the Interpretations of the Accounting Standards for Business Enterprises and other applicable regulationspromulgated and revised by the Ministry of Finance on and after February 15, 2006 (collectively referred to as the"Accounting Standards for Business Enterprises"), as well as the Preparation Rules for Information Disclosure byCompanies Offering Securities to the Public No. 15 - General Provisions on Financial Reports (2014 Revision)
promulgated by China Securities Regulatory Commission ("CSRC"). According to the relevant provisions of theEnterprise Accounting Standards, the Company's accounting is based on the accrual basis. Except for certainfinancial instruments, the financial statements are measured on the basis of historical cost. If an asset is impaired, thecorresponding impairment provision shall be made in accordance with relevant regulations.According to the relevant provisions of the Enterprise Accounting Standards, the Company's accounting is basedon the accrual basis. Except for certain financial instruments, the financial statements are measured on the basis ofhistorical cost. If an asset is impaired, the corresponding impairment provision shall be made in accordance withrelevant regulations.
2. Going concern
This financial statement was presented on a going concern basis. The management carefully evaluated factors ofthe Company in the future 12 months commencing from December 31, 2021 such as the macropolicy risk, marketoperation risk, current and long-term profitability and solvency of the enterprise, financial flexibility, and themanagement's intention of changing the operation policy, and held that there was no event that can generatesignificant 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 each subsidiary are mainly engaged in production and sales of air-conditioners and theiraccessories, and domestic appliances and their accessories. The Company has prepared several specific accountingpolicies and accounting estimates for transactions and events such as revenue recognition based on the actualproduction management characteristics and in accordance with provisions of the related Accounting Standards forBusiness Enterprises. For details, see the detailed description in Note III herein.
1. Statements regarding observance of the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting Standards forBusiness Enterprises and give a true and complete view of the financial position of the Company on December 31,2021, and the related information such as operating results and cash flows in the year 2021. Besides, the financialstatements prepared by the Company, in all the major aspects, also conform to the disclosure requirements offinancial statements and their notes in the Preparation Rules for Information Disclosure by Companies OfferingSecurities to the Public No. 15 - General Provisions on Financial Reports revised by the China Securities RegulatoryCommission in 2014.
2. Accounting period
Accounting period of the Company includes one year and interim periods. An interim period covers six-month, aquarter and a month. The accounting year of the Company commences on January 1 and ends on December 31 ofeach year.
3. Operating cycle
The normal operating cycle refers to the period from the Company's purchase of assets used for processing toachieving of cash or cash equivalent. The Company regards 12 months as one operating cycle and uses it as theliquidity classification standard for assets and liabilities.
4. Functional currency
RMB is the functional currency used by the Company. Some subsidiaries of the Company adopt currencies otherthan Renminbi as the functional currency.
5. Accounting treatment of business combination involving enterprises under common control and businesscombination not involving enterprises under common control
Business combination refers to the transaction or event of combining two or more independent enterprises toform a reporting entity. Business combination is classified into business combination involving enterprises undercommon control and business combination not involving enterprises under common control.
(1) Business combination under common control
A business combination under common control is a business combination in which the enterprises participatingin the combination are ultimately controlled by the same party or parties before and after the combination, and thecontrol is not temporary. For business combination involving enterprises under common control, the party thatobtains the right to control other enterprises participating in the combination on the combination date is thecombining party, and other enterprises participating in the combination are the combined party. The combination daterefers to the date on which the combining party actually obtains the right to control the combined party.
Where business combination involving enterprises under common control arises from one transaction or equitiesof invested entities under common control are obtained step by step through multiple transactions and thesetransactions belong to a package deal, the Company will recognize the cost of combination according to the share ofcarrying amount of net assets obtained for the combined party in the ultimate controlling party's consolidatedfinancial statements on the combination date. The difference between the carrying amount of the consideration paidfor the combination (or total par value of the issued stocks) and the combination cost is adjusted to capital reserve; ifthe capital reserve is not sufficient to absorb the difference, any excess is adjusted against retained earnings.
Costs incurred that are attributable to the business combination made by the Company, including intermediarycosts such as the audit fee, legal service charge and appraisal and consultation costs, and other related overheadexpenses are charged to profits or losses in the period in which they are incurred; the transaction expenses directlyattributable to the consideration paid for the combination through issuance of equity instruments are credited againstthe capital reserve; if the capital reserve is not sufficient, any excess is adjusted against retained earnings; thetransaction expenses directly attributable to the consideration paid for the combination through issuance of debtinstruments are recorded into the initially recognized amount of debt instruments. Where the equities of investedentities under common control are obtained step by step through multiple transactions to achieve businesscombination but these transactions do not belong to a package deal, the Company will recognize the cost ofcombination according 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. Thedifference between the combination cost and the sum of the carrying amount of long-term equity investments prior tothe combination plus the carrying amount of the consideration newly paid for further acquisition of shares on the dateof combination is adjusted to capital reserve (capital premium or capital stock premium); if the capital reserve is notsufficient to absorb the difference, any excess is adjusted against retained earnings. For the equity investment heldbefore the date of combination, accounting treatment is not performed temporarily for other comprehensive incomes
that are accounted using the equity method or recognized using financial instruments and accounted according to themeasurement standard for recognition. When this investment is disposed of, accounting treatment is conducted usingthe basis the same as that used by the invested entity to directly dispose of relevant assets or liabilities. For otherchanges in owners' equities other than the net profits/losses, other comprehensive income and profit distribution innet assets of the invested entity that are recognized because of accounting using the equity method, accountingtreatment is not conducted temporarily; they shall be transferred to the profits and losses of the current period at thetime of disposing of this investment.
(2) Business combination not under common control
A business combination not involving enterprises under common control is a business combination in which allof combining enterprises are not ultimately controlled by the same party or parties both before and after thecombination. For business combination not involving enterprises under common control, the party that obtains theright to control other enterprises participating in the combination on the date of combination is the acquiring party,and other enterprises participating in the combination are the acquired party. The date of acquisition refers to the dateon which the acquiring party actually obtains the right to control the acquired party.For the business combination implemented through one transaction, the cost of business combination refers tothe fair value of assets paid, liabilities incurred or assumed and equity securities issued by the Company on the dateof acquisition for obtaining the right to control the acquired party. On the date of acquisition, the assets, liabilities andcontingent liabilities obtained by the Company from the acquired party are recognized at the fair value.For a business combination realized by two or more transactions of exchange, the accounting treatment for thecombination costs shall be made by distinguishing individual financial statements and consolidated financialstatements:
In the individual financial statements, where the held stocks are accounted using the equity method prior to thedate of acquisition, the cost of combination of the investment is the aggregate of the carrying amount of the equityinvestment of the acquired party held before the date of acquisition and the investment cost newly increased on thedate of acquisition. For other related comprehensive income, accounting treatment is performed during disposal of theinvestment using the basis the same as that used by the invested entity to directly dispose of relevant assets orliabilities; the owner's equity that is recognized due to other changes in owners' equities other than the netprofits/losses, other comprehensive income and profit distribution of the invested entity is accordingly transferred tothe profits and losses of the current period at the time of disposing of this investment. Where the equity investmentheld before the date of acquisition is recognized using financial instruments and undergoes accounting treatmentaccording to the measurement standard, the cost of combination of the investment is the aggregate of the fair value ofthe equity investment recognized according to this standard and the newly increased investment cost. The differencebetween the fair value of the originally held stocks and the carrying amount and all the cumulative fair value changesoriginally recorded into other comprehensive income are transferred to the investment income of the current period.
In the consolidated financial statements, the stocks of the acquired party held before the date of acquisition shallbe remeasured based on the fair value of such stocks on the date of acquisition, and the difference between their fairvalue and carrying amount shall be charged to the investment income of the current period; where the stocks of theacquired party held before the date of acquisition involve other comprehensive income under accounting of the equitymethod and other changes in owners' equities other than the net profits/losses, other comprehensive income and profit
distribution, other comprehensive income and other changes in owners' equities concerned with them shall betransferred to the 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 plan remeasured andredefined by the invested entity). The summation of the fair value of the stocks of the acquired party held before thedate of acquisition on the date of acquisition and newly increased investment costs on the date of acquisition shall bethe combination cost of the investment.
Costs incurred that are attributable to the business combination made by the Company, including intermediarycosts such as the audit fee, legal service charge, and appraisal and consultation costs, and other related overheadexpenses are charged to profits or losses in the period in which they are incurred. The transaction expenses directlyattributable to the consideration paid for the combination through issuance of equity instruments are credited againstthe capital reserve; if the capital reserve is not sufficient, any excess is adjusted against retained earnings; thetransaction expenses directly attributable to the consideration paid for the combination through issuance of debtinstruments are recorded into the initially 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 goodwill andsubsequently measured after the accumulated provision for impairment is deducted from the cost; the negativebalance between the business combination cost and the fair value of the identifiable net assets obtained by theCompany from the acquired party shall be charged to profits or losses of the current period 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 one ormore of the following cases, usually it indicates that these transactions shall undergo accounting treatment as "apackage 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) Occurrence of one transaction depends on 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.
6. Preparation of consolidated financial statements
(1) Principles for determining the scope of consolidated financial statementsThe consolidation scope of consolidated financial statements shall be determined on the basis of control. Controlmeans that the Company owns the power to the invested entity, enjoys variable return by participating relevantactivities of the invested entity, and has the capacity of using the power to the invested entity to affect its returnamount.
(2) Preparation of consolidated financial statements
The consolidated financial statements of the Company are prepared by the Company based on individualfinancial statements of the Company and subsidiaries and according to other relevant data. During preparation ofconsolidated financial statements, the accounting policy and accounting period of the Company shall be consistent
with those of subsidiaries, and the inter-company major transactions and balances shall be offset.For the subsidiary added due to business combination involving enterprises under common control in the ReportPeriod, the Company adjusts the amount at the beginning of the period in the consolidated balance sheet, incorporatesthe revenue, expense and profit of this subsidiary from the beginning of the period for consolidation to the end of thereport period into the consolidated profit statement, includes its cash flow into the consolidated cash flow statement,and adjusts relevant items in the comparative statements; for the subsidiary added due to business combination notinvolving enterprises under common control, the Company does not adjust the amount at the beginning of the periodin the consolidated balance sheet, but only incorporates the revenue, expense and profit of this subsidiary from thedate of acquisition to the end of report period into the consolidated profit statement and its cash flow into theconsolidated cash flow statement.
The portion of owners' equity of the subsidiaries that isn't attributable to the Company shall be separatelypresented as the minority shareholders' equity under the owners' equity in the consolidated balance sheet. The shareof comprehensive income of the subsidiaries in the current period that is attributable to the minority shareholders'equity shall be presented as the item of "Total comprehensive income attributable to minority shareholders" under thetotal comprehensive income in the consolidated profit statement. The share of comprehensive income of thesubsidiaries in the current period that is attributable to the minority shareholders' equity shall be presented as the itemof "Total comprehensive income attributable to minority shareholders" under the total comprehensive income in theconsolidated profit statement. Where the losses of a subsidiary undertaken by minority shareholders exceed the shareenjoyed by minority shareholders in the owners' equities of this subsidiary at the beginning of the period, the balanceshall be still adjusted against the minority shareholders' equity.For acquisition of the subsidiary's stocks owned by minority shareholders thereof, in the consolidated financialstatements, the difference between the long-term equity investment newly obtained because of acquisition of minorityshareholders' stocks and the share of net assets of the subsidiary to be enjoyed and continuously calculated accordingto the proportion of newly added shares from the acquisition date or consolidation date is adjusted to capital reserve;if the capital reserve is not sufficient to absorb the difference, 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 this subsidiary isnot lost, in the consolidated financial statements, the difference between the disposal price and the share of net assetsof the subsidiary to be enjoyed accordingly for disposal of the long-term equity investment and continuouslycalculated from the acquisition date or consolidation date is adjusted to capital reserve (capital premium or capitalstock premium); if the capital reserve is not sufficient to absorb the difference, any excess is adjusted against retainedearnings.Where the right to control the original subsidiary is lost due to disposal of a part of equity investment or otherreasons, the remaining stocks shall be remeasured at their fair value on the date of losing the control right; the resultof the sum of the consideration obtained from the equity disposal plus the fair value of remaining stocks, minus theshare of net assets of the original subsidiary that should be enjoyed and is continuously calculated according to theoriginal proportion of held shares from the acquisition date, shall be charged to the investment income in the periodwhen the control right is lost, and adjusted against the goodwill at the same time; other comprehensive income relatedto the original subsidiary's equity investment shall be transferred to the investment income of the current period whenthe control right is lost.
Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till the
control right is lost and all the transactions belong to a package deal, accounting treatment shall be performed for thetransactions by deeming all the transactions as one item for disposing of the subsidiary and losing the control right;however, prior to loss of the control right, the difference between every disposal price and the share of net assets ofthis subsidiary to be enjoyed accordingly for investment disposal shall be recognized as other comprehensive incomein the consolidated financial statements and, at the time of losing the control right, be jointly transferred to the profitsor losses in the period when the control right is lost.Where the equity investment for a subsidiary is disposed of step by step through multiple transactions till thecontrol right is lost and the transactions do not belong to a package deal, all the transactions before loss of the right tocontrol the subsidiary shall be handled according to the regulations of the Company on partial disposal of thesubsidiary's long-term equity investment provided that the Company does not lose the right to control the subsidiary.
This report period does not involve buying-in and selling-out of the same subsidiary's stocks, or selling-out andbuying-in turn.
7. Classification of joint arrangements and accounting treatment of co-management
Joint arrangement refers to the arrangement for joint control by two or more participants.
(1) Joint arrangement classification
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 relevant liabilitiesof this arrangement. Joint venture refers to the joint arrangement where the parties to the venture only enjoy rights tonet assets of this arrangement.
(2) Accounting treatment of co-management
1) The Company recognizes the following items related to quantum of interest in co-management and performsaccounting treatment in accordance with provisions of the corresponding Accounting Standards for BusinessEnterprises:
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 recognized according tothe share of the Company;
c. Revenue generated by selling the output share of co-management that is enjoyed by the Company;
d. Revenue that is generated by selling the output during co-management and recognized according to the shareof the Company;
e. Independently incurred expense, as well as the expense incurred by co-management and recognized accordingto the share of the Company.
2) Where the Company puts assets into or sells assets to the parties to co-management (except that the assetsconstitute business), before the said assets are sold to a third party by the parties to co-management, theCompany recognizes only the part in the profits or losses arising from this transaction that is attributable to otherparticipants in the co-management. In case that the put or sold assets involve the asset impairment loss
complying with provisions in the Accounting Standards for Business Enterprises No. 8 - Impairment of Assets,the Company shall recognize the said loss in full.
3) Where the Company purchases assets from the parties to co-management (except that the assetsconstitute business), before said assets are sold to a third party, the Company recognizes only the part in theprofits or losses arising from this transaction that is attributable to other participants in the co-management. Incase that the purchased assets involve the asset impairment loss complying with provisions in the AccountingStandards for Business Enterprises No. 8 - Impairment of Assets, the Company shall recognize this part of lossaccording to the share to undertake.
8. Criteria for cash and cash equivalents
The cash refers to the enterprise's money on hand and deposits for payment at any time. Cash equivalents referto investments held by the enterprise which are short in term (generally referring to those expiring within not morethan 3 months from the date of acquisition), high in liquidity, convertible to the known amount of cash andinsignificant in risk of change of value.
9. 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 the foreigncurrency shall be translated into the amount in RMB currency at the spot exchange rate of the transaction date(generally referring to the medial rate of foreign exchange quotation published by the People's Bank of China at thedate of transaction, the same below).
(2) Treatment of monetary items of foreign currencies and non-monetary items of foreign currencies on thebalance sheet date
For the monetary items of foreign currencies, the translation is done according to spot rate of the balance sheetdate. The exchange difference generated from the difference of spot rate of the current balance sheet date and thetime of initial recognition of a foreign currency or the previous balance sheet date is charged to the profit or loss ofthe current period except that the exchange difference generated from foreign currency borrowings relating to assetsof which the acquisition or production satisfies the capitalization conditions is capitalized in accordance with theAccounting Standards for Business Enterprises No. 17 - Borrowing Costs. For the non-monetary items of foreigncurrencies measured by historical cost, translation is done according to spot rate of the transaction date withoutchange in their amount in functional currency. Non-monetary items of foreign currencies such as stocks and fundsmeasured at their fair value are translated as per the spot rate on the date when their fair value is confirmed. Thedifferences between the translated amounts in functional currency and the original amounts in functional currency arerecorded into current profits and losses as fluctuation in fair value (including fluctuation 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 balance sheetdate, except for the "undistributed profit" item, other items of owners' equity are converted at the spot exchange rate
at the time of occurrence. The asset and liability items in the balance sheets shall be translated at an average exchangerate. The balance arisen from the translation of foreign currency financial statements in compliance with the aforesaidmethod shall be presented separately under the owners' equity item of the balance sheets. The foreign currency cashflow statement shall be translated at the average exchange rate on the cash flow date. The amount of influence of theexchange rate change on cashes shall be presented separately under the adjusted item in the cash flow statement.
10. Financial instruments
A 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 the contractualcash flows of the financial assets, the Company classifies the financial assets into those measured at amortized cost,those measured at fair value with changes included in the comprehensive income, and those measured at fair valuewith changes included in the current profits and losses.
The financial assets initially recognized by the Company shall be measured at their fair values. For the financialassets which are measured at their fair values and of which the changes are included into the current profits and losses,the transaction expenses thereof are directly included into the current profits and losses; for other categories offinancial assets, the transaction expenses thereof are included into the initially recognized amount. For the accountsreceivable or notes receivable arising from the sale of products or the provision of services that do not contain or donot consider significant financing components, the Company shall use the amount of consideration expected to beentitled to be charged as the initial confirmation amount.
1) Financial assets measured at amortization costs
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 consistent with basicborrowing arrangements, that is, cash flows generated on a specific date, are for the payment of principal and interestbased on the outstanding principal amount. The Company adopts the effective interest rate method for such financialassets and performs subsequent measurement based on amortization cost. The gains or losses arising from theiramortization or impairment are included into the current profits and losses.
2) Financial assets measured at fair value with changes included in other comprehensive income
GDG's business model for managing such financial assets aims at collection of contractual cash flows and sales,and the contractual cash flow characteristics of such financial assets are consistent with the basic lendingarrangements. The Company measures such financial assets at fair value and includes the changes of fair value areincluded in other comprehensive income, but impairment losses or gains, exchange gains and losses and interestincome calculated according to the actual interest rate method are included into the current profits and losses.
In addition, the Company designates some non-trading equity instrument investments as financial assets whichare measured at their fair values and of which the changes are included into other comprehensive income. TheCompany includes the relevant dividend income of such financial assets into the current profits and losses, andincludes the changes of fair value in other comprehensive income. When the financial assets are derecognized, thecumulative gains or losses previously included into other comprehensive income will be transferred from othercomprehensive income to retained income, but will not be included into the current profits and losses.
3) Financial assets which are measured at their fair values and of which the changes are included into othercomprehensive incomeThe Company classifies the financial assets other than the above financial assets measured at amortization costand financial assets which are measured at their fair values and of which the changes are included into othercomprehensive income as financial assets which are measured at their fair values and of which the changes areincluded into the current profits and losses. In addition, in the initial recognition, in order to eliminate or significantlyreduce the accounting mismatch, the Company designates some financial assets as financial assets which aremeasured at fair value and of which the changes are included into the current profits and losses. For such financialassets, the Company uses fair value for subsequent measurement, and the changes of fair value are included in thecurrent profits and losses.
(2) Classification, recognition, and measurement of financial liabilities
Financial liabilities are initially classified as financial liabilities which are measured at fair value and of whichthe changes are included in the current profits or losses and other financial liabilities. For the financial liabilitieswhich are measured at their fair values and of which the changes are included into the current profits and losses, thetransaction expenses thereof are directly included into the current profits and losses; for other financial liabilities, thetransaction expenses thereof are included into the initially recognized amount.
1) Financial liabilities measured at their fair values and of which the changes are recorded into the current profitsand losses
Financial liabilities which are measured at fair value and of which the changes are included in the current profitsor losses include trading financial liabilities (including derivatives that are financial liabilities) and financial liabilitiesdesignated as those which are measured at fair value at the initial recognition and of which changes are included inthe current profits or losses.
Trading financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fairvalue. Except for hedge accounting, the changes in fair value are included in current profits or losses.
For financial liabilities designated as those which are measured at fair value at the initial recognition and ofwhich changes are included in the current profits or losses, the changes of fair value caused by changes in theCompany's own credit risk are included in other comprehensive income, and when the recognition of the liabilities isterminated, the cumulative changes in fair value caused by changes in own credit risk included in othercomprehensive income are transferred to retained earnings. Other changes in fair value are included in current profitsor losses. If the accounting mismatch in profits and losses may be caused or expanded as the effects of changes in theown credit risk of such financial liabilities are processed in the above manner, the Company will include all gains orlosses of such financial liabilities (including the amount affected by changes in the Company's own credit risk)included in the current profit and loss.
2) Other financial liabilities
Except for the transfer of financial assets that does not meet the conditions for derecognition or continuedinvolvement in the financial liabilities and financial guarantee contracts formed by the transferred financial assets,other financial liabilities are classified as financial liabilities measured at amortization cost, which are subsequentlymeasured at amortization cost. Gains or losses arising from derecognition or amortization are included in the currentprofits 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 the financialassets are transferred to the transferring party;
3) The financial assets have been transferred, although the enterprise has neither transferred nor retained almostall the risks and rewards of the ownership of the financial assets, it has given up control over the financial assets.
If the enterprise has neither transferred nor retained almost all the risks and rewards of the ownership of thefinancial assets, and has not given up control over the financial assets, the relevant financial assets shall berecognized according to the extent of continued involvement in the transferred financial assets, and the relevantliabilities shall be recognized accordingly. The extent of continued involvement in the transferred financial assetsrefers to the level of risk that the changes in the value of the financial assets expose the enterprise to.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between the bookvalue of the transferred financial assets and the sum of the consideration received due to the transfer and thecumulative amount of changes in fair value originally included in other comprehensive income is included in thecurrent profits and losses.
If the partial transfer of financial assets satisfies the conditions for derecognition, the book value of thetransferred financial assets will be apportioned between the portion derecognized and the portion not derecognizedaccording to their relative fair values, and the difference between the sum of the consideration received for thetransfer and the amount of cumulative changes in the fair value which was previously directly recognized in owner'sequity and which should be apportioned to the portion derecognized and the above book amount apportioned will beincluded in the current profits and losses.
The Company must determine whether almost all the risks and rewards of ownership of the financial assets havebeen transferred before endorsing the transfer of financial assets sold by means of recourse and financial assets held.If almost all the risks and rewards of ownership of the financial asset have been transferred to the transferee, thefinancial asset will be derecognized; if the risks and rewards of the ownership of the financial asset have beenretained, the financial asset will not be derecognized; if almost all the risks and rewards of ownership of the financialasset have not been transferred or retained, the enterprise needs to continue to determine whether it retains controlover the asset and performs accounting treatment in accordance with the principles described in the precedingparagraphs.
(4) Derecognition of financial liabilities
If the present obligation for a financial liability has been fully or partially discharged, the financial liability orthe relevant portion thereof will be derecognized. If the Company (borrower) signs an agreement with the lender toreplace the original financial liability by assuming a new financial liability, and the contract terms of the newfinancial liability and the original financial liability are substantially different, the original financial liability will bederecognized and the new financial liability will be recognized at the same time. If a material amendment is made tothe contractual terms for the original financial liability or the relevant portion thereof, the original financial liabilitywill be derecognized, and the new financial liability will be recognized according to the amended terms at the sametime.
If the financial liability or the relevant portion thereof is derecognized, the difference between the book value ofthe financial liability derecognized and the consideration paid for it (including the non-cash asset transferred or theliability assumed) will be included in the current profits or 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 recognizedamount, and such legal rights are currently enforceable, and the Company plans to settle in net or simultaneouslyrealize the financial asset and liquidate the financial liability, the financial asset and the financial liability will bepresented in the balance sheet in net amounts after mutual offset. In addition, financial assets and financial liabilitiesare presented separately in the balance sheet, and are not offset against each other.
(6) Method for determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive for the sale of an asset or need to pay for thetransfer of a liability in the orderly transaction that occurs on the measurement date. For financial instruments forwhich there is an active market, the fair value thereof will be determined by the Company based on the quotation inthe active market. Quotation in the active market refers to the price that is easily obtained from exchanges, brokers,industry associations, pricing service agencies, etc. on a regular basis, and represents the price of market transactionsthat actually occur in fair trading. For financial instruments for which there is no active market, the fair value thereofwill be determined by the Company using the valuation techniques. The value appraisal techniques include the pricesadopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will,the current fair value obtained 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 a valuationtechnique that is applicable in the current circumstances and that there is sufficient available data and otherinformation to support, selects the input values consistent with the asset or liability characteristics considered by themarket participants in the transaction of the underlying asset or liability, and as far as possible uses relevantobservable input values. Unobservable input values are used where the relevant observable input values are notavailable or are not practicable.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the residual equity in assets of the Companyafter deduction of all the liabilities. The Company treats issue (including refinancing), repurchases, sale orcancellation of equity instruments as changes in equity, and transaction expenses related to equity transactions arededucted from equity. The Company does not recognize changes in the fair 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 profit distribution.
11. Impairment of financial assets
Financial assets of which the Company needs to recognize impairment losses include financial assets measuredat amortization cost, and debt instrument investments which are measured at fair value and of which changesincluded in other comprehensive income, mainly including receivables financing, accounts receivable, contract assets,other receivables, loans and advances, debt investment, other debt investment, long-term receivables, etc.
(1) Recognition methods of provision for impairment
Based on the expected credit loss, the Company makes impairment provision and recognizes credit impairmentloss according to the applicable expected credit loss measurement method (general method or simplified method) forthe above items.Credit loss refers to the difference between all contractual cash flows that are due to the Company in accordancewith the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at theoriginal effective interest rate. Among them, for purchased or originated credit-impaired financial assets, theCompany discounts the difference at the credit-adjusted effective interest rate of the financial assets.The general method for measuring expected credit losses is that the Company assesses on each balance sheetdate whether the credit risk of financial assets has increased significantly since initial recognition. If the credit riskhas increased significantly since initial recognition, the Company measures the loss provisions according to theamount equal to lifetime expected credit losses. If the credit risk has not increased significantly since initialrecognition, the Company measures the loss provisions according to the amount equal to 12-month expected creditlosses. The Company considers all reasonable and valid information, including forward-looking information, whenassessing expected credit losses.For financial instruments with lower credit risk on the balance sheet date, the Company assumes that their creditrisk has not increased significantly since initial recognition.
(2) Judgment standards for whether the credit risks have increased significantly since the initial recognition
If the probability of default of a financial asset in the expected lifetime determined on the balance sheet date issignificantly higher than the probability of default in the expected lifetime determined at the time of initialrecognition, it indicates that the credit risk of the financial asset has increased significantly. Except for specialcircumstances, the Company uses the change in default risk that occurs within the next 12 months as a reasonableestimate of the change in default risk that occurs throughout the lifetime to determine whether the credit risk hasincreased significantly since initial recognition.
(3) Assessment methods of the expected credit risks based on combinations
The Company assesses the credit risks of the financial assets with significantly different credit risks respectively,such as accounts receivable from disputes with the other party or litigation and arbitration, and receivables withobvious signs indicating that the debtor is likely to be unable to fulfill the repayment obligation, etc.
In addition to the financial assets whose credit risks are assessed respectively, the Company divides the financialassets into different groups based on their common risk characteristics, and assesses the credit risks on the basis ofcombinations.
(4) Accounting treatment methods of financial assets impairment
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If theestimated credit losses are greater than the book value of the current impairment provisions, the difference isrecognized as an impairment loss; If the estimated credit losses are smaller than the book value of the currentimpairment 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
For notes receivable and receivables financing, the company measures the loss reserves according to the amountof the expected credit losses during the whole duration. Based on the credit risk characteristics of notes receivableand receivables financing, financial assets are divided into different combinations:
| Item | Basis for recognition of combinations |
| Banker's acceptance bill | The acceptor is a bank institution or a financial company |
| Trade acceptance draft | The acceptor is a company other than a bank institution or financial company |
2) Accounts receivable and contract assets
For accounts receivable and contract assets that do not contain significant financing components and containsignificant financing components, the Company measures the loss provision based on the lifetime expected credit lossamount. 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 divides accountsreceivable into different combinations based on their credit risk characteristics:
| Item | Basis for recognition of combinations |
| Combination 1: Account age combination | The combination takes the account age of accounts receivable as the basis for the combination |
| 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: None 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 statements and advances
Based on the internal assessment results of the credit risk management system of the relevant financialinstruments, the Company defines whether credit impairment has occurred: the Company calculates the expectedcredit loss of the financial assets at the expected credit loss rate of different categories, according to the five-levelclassification of the financial industry (normal, concerned, secondary, suspicious and loss) based on the borrower'sactual repayment ability.
4) Other receivables
The Company measures impairment losses using an amount equivalent to 12-month or lifetime expected creditlosses, based on whether the credit risk of other receivables has increased significantly since initial recognition. Inaddition to other receivables of which credit risk is individually assessed, the Company divides other receivables intodifferent combinations based on their credit risk characteristics:
| Item | Basis for recognition of combinations |
| Combination 1: Account age combination | The combination takes the account age of other receivables as the basis for the combination |
| Combination 2: Low risk combination | The combination takes the receivable government grain deposits as the basis for the combination |
| Combination 3: None 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 Company measuresimpairment losses using an amount equivalent to 12-month or lifetime expected credit losses, based on whether thecredit risk of other debt investments has increased significantly since initial recognition.
6) Other debt investments
Other debt investments mainly accounts for the debt instrument investments which are measured at their fairvalues and of which the changes are included into other comprehensive income. The Company measures impairmentlosses using an amount equivalent to 12-month or lifetime expected credit losses, based on whether the credit risk ofother debt 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 whole duration.
12. Receivable financing
For 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 other debtinvestment. For related accounting policies, please refer to Note III. 10 "Financial Instruments" and Note III. 11"Impairment of Financial Assets".
13. 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 accounts forthe land use rights purchased and used for commercial housing development as the development cost. Developmentproduct refers to the property that has been completed and is to be sold.
(2) Valuation for delivered inventories
Valuation for delivered inventories: When various kinds of inventories of the Company are delivered, they shallbe valuated at planned costs, and the planned costs shall be adjusted into actual costs based on the difference of costsof the current month at the end of the month.
Development cost and product development cost include land transfer fees, infrastructure expenditures,construction and installation engineering expenditures, borrowing costs incurred before the development project iscompleted, and other related costs incurred in the development process. When developing product is carried forwardthe cost, the total cost is allocated between the sold and unsold properties in proportion to the construction area.
(3) Recognition of the net realizable value and measurement of provision for decline in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the cost ofinventories is higher than the net realizable value, a provision for decline in value of inventories shall be made andshall be recorded into the profits and losses of the current period, where a provision for decline in value of inventorieshas been made, if the value of the said inventories is resumed later, the said value shall be reversed from the provisionfor decline in value of the inventories. Net realizable value is the estimated selling price in the ordinary course ofbusiness less the estimated costs of completion and the estimated costs necessary to make the sale and relevant taxes.
(4) Stock count system for inventories
The Company's inventory adopts the perpetual inventory system.
(5) Amortization methods of low-value consumables and packaging materialsLow-value consumables and packaging materials are written off in full when issued for use.
14. Contract assets
The Company presented the right to collect payments from customers which the customers have not yet paid thecontract consideration, but the Company has fulfilled its performance obligations in accordance with the contract, andwhich is not unconditional (that is, only depending on the passage of time) as contract assets in the balance sheet.Contract assets and contract liabilities under the same contract are presented in net amount, and contract assets andcontract liabilities under different contracts are not offset.For the determination and accounting treatment of expected credit losses of contract assets, please refer to NoteIII. 11 "Impairment of Financial Assets".
15. 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 will berecognized as an asset as contract acquisition cost. However, if the amortization period of the asset does not exceedone year, it will be included in current profits or losses when it occurs.
If the cost incurred by the Company for the performance of the contract does not fall within the scope specifiedin the accounting standards for business enterprises other than the Accounting Standards for Business Enterprises No.14 - Revenues (Revised in 2017), it shall be recognized as an asset as the contract performance cost when thefollowing conditions are met simultaneously: ① the cost is directly related to a current or expected contract,including direct labor cost, direct material cost, manufacturing expense (or similar expense), cost clearly borne by thecustomer, and other costs incurred only due to the contract; ② the cost increases the Company's future resources forfulfilling its performance obligations; and ③ the cost is 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 profit and loss.
(3) Impairment of assets related to contract costs
When recognizing the impairment loss of assets related to the contract cost, the Company shall first recognizethe impairment loss of other assets related to the contract and recognized in accordance with other relevant corporateaccounting standards; then, based on the fact that the book value is higher than the difference between the residualconsideration expected to be obtained by the Company due to the transfer of the goods related to the asset and theestimated cost to be incurred for the transfer of the relevant goods, the excess part shall be withdrawn for impairmentprovision and recognized as asset impairment loss.
If the depreciation factors in the previous period change later, causing the aforementioned difference is higherthan the book value of the asset, the Company will reverse the previously-made provision for impairment and include
it in the current profits or losses, but the book value of the asset after the reversal can not exceed the book value of theasset at the date of reversal under the assumption that no provision is made for the impairment.
16. 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 beclassified into the category of assets held for sale. The non-current asset or disposal group to be classified into thecategory 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 GDG has make decision for a selling plan and hasobtained recognized purchase commitment and selling is expected to be completed within one year. If it can be soldonly after being approved by relevant authority organization or supervision department of GDG according to relevantrequirements, it should have been approved. Recognized purchase commitment refers to purchase agreement withlegal binding force that the Company concludes with other parties, which includes important clauses of transactionprice, time and enough strict default punishment, etc., with which, possibility to lead to major adjustment orcancellation of agreement is tiny.
The non-current asset or disposal group acquired by the Company for resale shall be classified as the held forsale on the acquisition date if it meets the requirements of “expected to be sold within one year” on the acquisitiondate, and it is likely to meet the other classification conditions for holding for sale in the short term (usually threemonths).
The disposal group refers to a group of assets that are disposed of as a whole in a transaction through sale orother means, and the liabilities that are directly related to these assets and transferred in the transaction. Where thegoodwill obtained in the merger of enterprises is apportioned for the asset group or asset group combination to whichthe disposal group belongs according to Accounting Standards for Enterprises No.8 - Impairment of Assets, thisdisposal 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 Company carriesout initial measurement or re-measurement according to the smaller result of the net value of the book value and thefair value minus the net amount of the disposal expense. Where the net value of the fair value minus the disposal costis lower than the original book value, the difference is confirmed as assets impairment loss and include in the currentprofits and losses, and the provision for impairment of the assets held for sale is made at the same time; for theamount of assets impairment loss confirmed by the disposal group held for sale, the book value of the goodwill in thedisposal group is deducted first, and then its book value is deducted in proportion according to the ratios of the bookvalues of various non-current assets applicable to 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 reversed in theamount of assets impairment loss after classification as the category held for sales is confirmed, and the reversed
amount shall be included in the current profits and losses. Asset impairment losses recognized before theclassification are not reversed.Where the net value of the fair value of disposal group held for sale on the balance sheet date minus the sellingexpense increases subsequently, the previous write-down amount is restored and will be reversed in the amount ofassets impairment loss confirmed for non-current assets applicable to the measurement provisions of the categoryheld for sale after classification as the category held for sales, and the reversed amount shall be included in thecurrent profits and losses.
For the deducted book value of goodwill and the non-current assets applicable to the measurement provisions ofthe category held for sale, the asset impairment loss confirmed before classification as the category held for salesshall not be reversed. For the subsequently reversed amount of assets impairment loss confirmed for the disposalgroup held for sale, its book value is increased in proportion according to the ratios of the book values of variousnon-current assets applicable to measurement provisions of the category held for sales in the disposal groupexcluding the goodwill. The non-current assets held for sale or non-current assets in the disposal group are not madefor provision for impairment or amortized, and the interests on debts and other expenses in the disposal group heldfor sale will be confirmed continuously.
The measurement methods of the category held for sale do not apply to the deferred income tax assets, financialassets complying with the specifications of Accounting Standards for Business Enterprises No. 22 - Recognition andMeasurement of Financial Instruments, investment real estate and biological assets measured at fair value, contractrights produced in the insurance contract, and the assets produced in the welfare of the workers, and they aremeasured according to the relevant criteria or corresponding accounting policies formulated by the Company. Wherethe disposal group contains the non-current assets applicable to the measurement method of the category held for sale,the measurement method of the category held for sale is applicable to the whole disposal group. The relatedaccounting standards apply to 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 it doesnot meet the classification condition of the category held for sale anymore and will not be classified as the categoryheld for sale or non-current assets, it shall be measured according to the smaller one of the following two:
1) In 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 assumptionthat it is not classified as held for sale category;
2) Recoverable amount.
17. Long-term equity investments
The long-term equity investments mainly include the equity investment held by the Company that can takecontrol over the invested entity 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 invested entity;
2) The Company enjoys variable return by participating relevant activities of the invested entity;
3) The Company has the ability to use the power over the invested entity to influence the Company's returnamount;
4) The Company acknowledges the control force for the invested entity that meets the above threeconditions.Judgment standards of significant influence:
1) The Company has the power to participate in the decision-making of the investee's financial and operatingpolicies, but does not control, or jointly control the formulation of these policies with other parties;
2) Where GDG is able to exert significant impact on the investee, it is the associated enterprise of GDG;
3) The invested entity 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, and anyparticipant with the right to common control on 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 investment
The long-term equity investment of the Company is measured at the investment cost at the time of acquisition.Normally the investment cost refers to the assets paid, liabilities incurred or undertaken, and the fair value of equitysecurities issued for the acquisition of this investment, including the costs directly attributable to the acquisition.However, for the long-term equity investment formed by business combination involving enterprises under commoncontrol, the investment cost is the share of carrying amount of the combined party's net assets acquired on thecombination date in the ultimate controlling party's consolidated financial statements.
(3) Subsequent measurement of long-term equity investments and methods of profit or loss recognition
The company adopts the cost method to calculate the long-term equity investment that can control the investee,and the equity method to calculate the investment of associated enterprise and joint venture.
The price of a long-term equity investment accounted by employing the cost method shall be included at itsinitial investment cost. If there are additional investments or disinvestments, the cost of the long-term equityinvestment shall be adjusted. The cash dividends or profits declared to distribute by the invested entity shall berecognized as investment income and charged to profits or losses of the current period.
When the Company employs the equity method for accounting of the long-term equity investment, if theinvestment cost of a long-term equity investment is more than the investing enterprise' attributable share of the fairvalue of the invested entity's identifiable net assets for the investment, the investment cost of the long-term equityinvestment may not be adjusted; if the investment cost of a long-term equity investment is less than the investingenterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, thecarrying amount of the long-term equity investment shall be adjusted, and the difference shall be recorded into theprofits or losses of the current period.
When the Company employs the equity method for accounting of the long-term equity investment, the Companyfirst adjusts the invested entity's net profits or losses and other comprehensive income in the aspects such as the fairvalue of the invested entity's identifiable net assets at the time of investment acquisition, accounting policy andaccounting period, and then recognizes the current-period investment profits or losses and other comprehensiveincome according to the investing enterprise' attributable or shareable share of the invested entity's net profits or
losses and other comprehensive income. For other changes in owners' equities other than the net profits or losses,other comprehensive income and profit distribution, the carrying amount of the long-term equity investment shall beadjusted and recorded into the owners' equities.For the unrealized internal transaction profits/losses that arise between the Company and the associates and jointventures, the part attributable to the Company shall be calculated according to the shareholding proportion, and theinvestment profits/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 joint ventures,if there is any equity investment difference on the debit side, the investment profits/losses shall be recognized afterdeduction of the equity investment difference on the debit side amortized by the straight-line method according to theoriginal residual maturity.
(4) Recognition of common control and significant influences on the invested entityCommon control is recognized as the control which does not exist unless the investing parties unanimouslyagree on sharing the control power over the relevant important financial and operating decisions of the invested entityaccording to the provisions of the contract.
Significant influences will be recognized where there is power to participate in making decisions on the financialand operating policies of the invested entity, but not to control or do joint control together with other parties over theformulation of these policies. When the Company holds more than 20.00% (included) but less than 50.00% of votingshares of the invested entity directly or indirectly through a subsidiary, significant influences on the invested entityshall be recognized, unless there is clear evidence indicating that the Company cannot participate in production andmanagement decision-making of the invested entity in this situation and therefore cannot generate significantinfluences; if the Company holds less than 20.00% (excluded) of voting shares of the invested entity, usually theCompany is not deemed to have a significant influence on the invested entity, unless there is clear evidence indicatingthat the Company can participate in production and management decision-making of the invested entity in thissituation and therefore can generate significant influences.
(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 commoncontrol with or has no significant influences on the invested entity, is converted into an investment for an associate orjoint venture due to additional investment, the investment shall be accounted by the equity method instead, and theCompany shall use the fair value of the original equity investment plus the fair value of the consideration paid toacquire the newly added investment as the initial investment cost accounted by the equity method instead. Thedifference between the fair value and carrying amount of the originally held equity investment prior to the additionalinvestment, and the cumulative fair value changes originally recorded into other comprehensive income shall betransferred to the current-period profits or losses accounted by the equity method instead.
For the originally held investments for associates and joint ventures, if they are not able to be under commoncontrol with or have significant influences on the invested entity, if they are not able to be under common controlwith or have significant influences on the invested entity due to reason such as partial disposal, accounting treatmentmust be performed for remaining equity investments according to the recognition and measurement standards forfinancial instruments, and the difference between the fair value and carrying amount on the date on which thecommon control or significant influence is lost shall be charged to profits or losses of the current period. When
accounting based on the equity method is terminated for other related comprehensive income originally subject toaccounting of equity method, accounting treatment is performed using the basis the same as that used by the investedentity to directly dispose of relevant assets or liabilities; all the owners' equities that are recognized due to otherchanges in owners' equities other than the net profits/losses, other comprehensive income and profit distribution ofthe invested entity shall be transferred to the profits or 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 carrying value of theacquired party's equity investment held prior to the acquisition date and the investment cost newly added on theacquisition date shall be used as the initial investment cost of such an investment; for the equity investment held priorto the acquisition date, other comprehensive income recognized due to accounting of the equity method shall undergoaccounting treatment using the basis the same as that used by the invested entity to directly dispose of relevant assetsor liabilities when such an investment is disposed of.
When the influencing capability on the invested entity is converted from control to a significant influence orcommon control together with other investors due to investment disposal, the long-term equity investment cost, forwhich recognition shall be terminated, is first carried over according to the proportion of investment disposal. Onsuch a basis, the remaining long-term equity investment cost is compared with the share attributable to the Companyin the fair value of the invested entity's identifiable net assets at the time of original investment, which is calculatedaccording to the remaining shareholding proportion. For the goodwill part to be embodied in the investmentevaluation, the carrying amount of long-term equity investment shall not be adjusted; where the investment cost isless than the share attributable to the Company in the fair value of the invested entity's identifiable net assets at thetime of original investment, any excess shall be adjusted against retained earnings when the long-term equityinvestment cost is adjusted. For the share attributable to the Company in the invested entity's realized netprofits/losses between acquisition of the original investment and conversion to accounting of the equity method dueto investment disposal, the carrying amount of the long-term equity investment shall be adjusted, meanwhile, anyexcess shall be adjusted against retained earnings for the share attributable to the Company in the invested entity'srealized net profits/losses (excluding the cash dividends or profits distributed or declared to distribute) fromacquisition of the original investment to the beginning of the period in which the investment is disposed of, and thecurrent-period profits or losses shall be adjusted for the share attributable to the Company in the invested entity'srealized net profits/losses from the beginning of the period in which the investment is disposed of to the investmentdisposal date; the share attributable to the Company in the invested entity's changes in other comprehensive incomeshall be recorded into other comprehensive income when the carrying amount of the long-term equity investment isadjusted; the share attributable to the Company in the invested entity's other changes in owners' equities arising fromreasons other than the net profits or losses, other comprehensive income and profit distribution shall be recorded into"Capital reserves -- 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 share attributable tothe Company in the invested entity's realized net profits/losses, other comprehensive income and other changes inowners' equities shall be calculated and recognized according to provisions of the standard in the future period.For the originally held long-term equity investment that is able to control the invested entity, if the shareholdingproportion declines due to reasons such as partial disposal and the investment cannot be able to control, be under
common control with or have significant influences on the invested entity, accounting treatment must be performedfor remaining equity investments according to the recognition and measurement standards for financial instruments.The difference between the fair value and carrying amount on the date of control loss shall be recorded into theinvestment 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 heldstocks of the invested entity in consideration of all aspects, the carrying amount of the long-term equity investmentcorresponding to the sold stocks shall be carried over accordingly, and the difference between the selling price andthe carrying amount of long-term equity investment for disposal shall be recognized as disposal profit or loss.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 originally subject toaccounting of equity method, accounting treatment is performed using the basis the same as that used by the investedentity to directly dispose of relevant assets or liabilities; all the owners' equities that are recognized due to changes inother owners' equities other than the net profits/losses, other comprehensive income and profit distribution of theinvested entity shall be transferred to the investment income of the current period when accounting based on theequity method is terminated; if a part of the long-term equity investment accounted by the equity method is disposedof and the remaining stocks are still accounted using the equity method, other related comprehensive incomeoriginally subject to accounting of equity method shall be handled using the basis the same as that used by theinvested entity to directly dispose of relevant assets or liabilities and be carried over by proportion, and the owners'equities that are recognized due to other changes in owners' equities other than the net profits/losses, othercomprehensive income and profit distribution of the invested entity shall be carried over to the investment income ofthe current period according to the proportion.
18. Investment real estate
The 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 investment real estateshall be made in accordance with the accounting policies of fixed assets or intangible assets of the Company.When the Company changes the purpose of the investment real estate, such as for self-use, it shall transfer therelevant investment real estate to other assets.See 24 “Long-term asset impairment” of the Note III for the impairment test method and impairment reserveaccrual method of investment real estate.
19. Fixed assets
(1) Recognition standard of fixed assets
The Company's fixed assets refer to tangible assets held for the production of commodities, provision of laborservices, lease or operation and management, with a service life exceeding one accounting year. Fixed assets can notbe 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 expected conditions foruse 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 purchase price.The difference between the actual payment and the present value of the purchase price shall be included in thecurrent profits and losses within the credit period, unless it shall be capitalized in accordance with the AccountingStandards No. 17 - Borrowing Costs.
3) The cost of self-constructed fixed assets consists of the necessary expenditures incurred before the assetsreaching the predetermined usable state.
4) The cost invested to 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 the contract oragreement.
5) The costs of fixed assets acquired through the exchange of non-monetary assets, recombination ofliabilities, merger of enterprises shall be respectively recognized in accordance with the Accounting Standards No.7 - Exchange of Non-monetary Assets, Accounting Standards for Enterprises No. 12 - Debt Restructuring,Accounting Standards for Enterprises No. 20 - Merger of Enterprises and Accounting Standards for EnterprisesNo. 21 - Leases.
(3) Classification of fixed assets
The Company's fixed assets are classified into houses and buildings, machinery equipment, electronic equipmentand transportation equipment and otherwise.
(4) Depreciation of fixed assets
1) Recognition of depreciation method and service life, expected net salvage value rate and annual depreciationrate:
The depreciation of fixed assets shall be made by the straight-line method. The annual depreciation raterecognized according to the category, service life and expected net salvage value rate of fixed assets is as follows:
| Category of fixed asset | Expected net salvage value rate (%) | Expected service Life (year) | Annual depreciation rate (%) |
| Houses and buildings | 5.00 | 20.00 | 4.75 |
| Machinery equipment | 5.00 | 6.00-10.00 | 9.50-15.83 |
| Electronic equipment | 5.00 | 2.00-3.00 | 31.67-47.50 |
| Transportation equipment | 5.00 | 3.00-4.00 | 23.75-31.67 |
| 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 which aprovision for impairment has been made, the depreciation of the fixed asset shall be made based on the amount of
deducting its expected net salvage value, depreciation amount and provision for impairment from the original price ofthe fixed asset and remaining service life of the fixed asset.
For the fixed assets that have reached intended usable condition but not prepared the final account forcompletion, their costs shall be recognized at their estimated value, and their depreciation shall be made accordingly;After completion of the final account for completion, the original estimated value of the fixed assets shall be adjustedby 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 salvage value,and the depreciation method of the fixed assets. If the Company finds that there is any difference between theexpected service life and the previously estimated service life of a fixed asset, the expected service life of the fixedasset shall be adjusted; If there is any difference between the amount of expected net salvage value and the previouslyestimated amount of the net salvage value, the expected net salvage value shall be adjusted; If any significant changeis made on the form of the realization of the expected economic benefits concerning a fixed asset, the method for thedepreciation of the fixed asset shall be changed. If any change is made to the service life, expected net salvage valueor the depreciation method of a fixed asset, it shall be regarded as a change of the accounting estimates.
(5) Treatment of subsequent expenditures for fixed assets
Subsequent expenditures incurred on a fixed asset refer to repair expenses, renovation expenses, repair costs anddecoration expenses and otherwise incurred in the course of use of the fixed asset. Their accounting treatment is asfollows: Where subsequent expenditures of a fixed asset such as renovation expenses meet the conditions ofrecognizing the fixed asset, they shall be recorded into the cost of the fixed asset, and the carrying amount of thereplaced part of the subsequent expenditures shall be deducted; Where subsequent expenditures of a fixed asset suchas repair costs do not meet the conditions of recognizing the fixed asset, they shall be recorded into the profits andlosses of the current period in which they are incurred; Where the decoration expenses of a fixed asset meet theconditions of recognizing the fixed asset, they shall be measured in a single detail account of "Fixed Assets", and thedepreciation of the fixed asset shall be made separately by the straight-line method in a shorter time of the period oftwo decorations and remaining usable life of the fixed asset.
The improvement expenditures incurred on a fixed asset leased by operating lease shall be capitalized andreasonably amortized as long-term prepaid expenses.
(6) Impairment test method and accounting and drawing method for impairment provision of fixed assets
See 24 “Long-term Assets Impairment” of the Note III for the impairment test method and impairment provisionmethod of fixed assets.
20. Construction in progress
The term "construction in progress" refers to all necessary expenditures incurred before the acquired fixed assetsenable the project to reach expected usable condition, including project direct materials, direct employeeremunerations, installation costs for equipment to be installed and project construction, project management fees, netprofits and losses of project commissioning and approved capitalized borrowing costs.
(1) Valuation of construction in progress
The Company's construction in progress shall be measured individually by construction project and shall bevaluated at actual cost.
(2) Time when construction in process is carried forward to fixed assets
When the construction in progress reaches the expected usable condition, they shall be transferred to fixed assetat their actual cost. For the fixed assets that have reached expected usable condition but not prepared the final accountfor completion, they shall be charged to the account at their estimated value and shall be adjusted after their actualvalue is recognized.
See 24 “Long-term Asset Impairment” in the Note III for the impairment test method and impairment provisionmethod of construction in process.
21. Borrowing costs
Borrowing costs are interests and other costs incurred by the Company in connection with the borrowing of thefunds, including interests, amortization of discounts or premiums related to borrowings, ancillary costs incurred inconnection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings.
(1) Recognition of capitalization of borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifyingasset shall be capitalized, and the amounts of other borrowing costs incurred shall be recorded into the profits andlosses of the period in which they are incurred. Qualifying assets are fixed assets, investment real estate andinventories and otherwise that necessarily take a substantial period of time for acquisition, construction or productionto get ready for their intended use or sale.
(2) Period of capitalization of borrowing costs
1) 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; and
c. Activities relating to the acquisition, construction or production of the asset that are necessary to prepare theasset for its intended use or sale have commenced.
2) Time point of ceasing capitalization of borrowing costs:
Capitalization of borrowing costs ceases when the qualifying asset acquired, constructed or produced becomesready for its intended use or sale. The subsequent borrowing costs shall be recorded into the profits and losses of thecurrent period.
3) Recognition of suspending capitalization of borrowing costs:
When an abnormal interruption occurs during the construction or production of an asset which 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 suspension will beincluded 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 becapitalized for each accounting period shall be recognized as follows:
1) Where special funds are borrowed for the acquisition, construction or production of a qualifying asset, theamount of interest to be capitalized shall be the actual interest expense incurred on that borrowing for the period lessany bank interest earned from depositing the borrowed funds before being used on the asset or any investmentincome on the temporary investment of those funds.
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 capitalization rateshall be calculated and recognized by the weighted average interest rate of general borrowings.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized duringeach accounting period shall be recognized by the real interest rate method, and an adjustment shall be made to theamount of interests in each period. During the period of capitalization, the amount of interest capitalized during eachaccounting period shall not exceed the amount of interest actually incurred to the relevant borrowings in the currentperiod.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 the incurredamount when they are incurred, and they shall be recorded into the cost of qualifying asset; those incurred after thequalifying asset acquired, constructed or produced becomes ready for its intended use or sale shall be recognized asexpenses on the basis of the incurred amount when they are incurred, and shall be recorded into the profits and lossesof the current period. The ancillary costs arising from a general borrowing shall be recognized as expenses at theirincurred amount when they are incurred, and shall be recorded into the profits and losses of the current period.
22. Usufruct assets
For the determination method of right-of-use asset and accounting treatment method, please see Note III. 34"Lease".
23. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by theCompany. Intangible assets can be recognized only when they meet the conditions simultaneously as follows:
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; and
c. 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 beregarded as an intangible asset with uncertain service life.With regard to an intangible asset with limited service life, its amortization amount shall be amortized byexpected realization pattern of its economic benefits, if the Company is unable to recognize the expected realizationpattern 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 method.With regard to an intangible asset with uncertain service life, its amortization amount shall not be amortized, butthe Company shall check the service life of the said intangible asset every year and shall carry out an impairment testfor 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) General life cycle of products manufactured by using the assets and information about service life 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 as concessionperiod and lease period;
7) Relevance with 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 profits andlosses 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 assets feasibletechnically;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 the existence ofa market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, theusefulness of the intangible asset;
d. Availability of adequate technical, financial and other resources to complete the development and to use orsell the intangible asset;
e. Ability to measure reliably the expenditure that is attributable to the intangible asset during its development.Where the expenditures at research stage or at development stage cannot be distinguished, all expenditures toresearch and development shall be included in the current profits and losses.
(5) Impairment test method and accounting and drawing method of impairment provision for intangible assetsSee 24 “Long-term Assets Impairment” of the Note III for the impairment test method and impairment provisionmethod of intangible assets.
24. Impairment of long-term assets
On 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 in activemarket, investment real estate measured by fair value model, consumable biological assets, assets formed underconstruction contract, deferred income tax assets, residual value not guaranteed by the renter in the financing leaseand financial assets), their recoverable amount shall be estimated on the basis of single item assets; Where it isdifficult to estimate the recoverable amount of the single item assets, the recoverable amount of the assets shall berecognized on the basis of their asset group or combination of asset groups.The recoverable amount shall be recognized in light of the higher one of the net amount of the fair value of thesingle item assets, asset group or combination of asset groups less the disposal expenses and the present value of theexpected future cash flow of the single item assets, asset group or combination of asset groups.Where the recoverable amount of the single item assets is lower than their carrying amount, a provision for theasset impairment shall be made accordingly on the basis of the difference between the carrying amount of the singleitem assets and their recoverable amount. Where the recoverable amount of an asset group or a combination of assetgroups is lower than its carrying amount, it shall be recognized as the corresponding impairment loss. The amount ofthe impairment loss shall first charge against the carrying amount of goodwill which is apportioned to the asset groupor combination of asset groups, then charge it against the carrying amount of other assets in proportion to the weightof other assets in the asset group or combination of asset groups with the goodwill excluded. The charges against thecarrying amount of the assets above shall be treated as the impairment loss of the single item assets (including thegoodwill), and a provision for impairment of the single item assets shall be made accordingly.
Once the above loss of asset impairment is recognized, it shall not be switched back in future accountingperiods.
25. Long-term unamortized expenses
Long-term deferred expenses refer to the expenses incurred by the Company but attributable to the current andsubsequent accounting periods of more than one year (excluding one year), including the expenses for improvementof fixed assets leased by operating lease.
Long-term deferred expenses shall be recorded into the account based on their actual amount of expenditure andshall be averagely amortized by their beneficial period, if long-term deferred expenses can not benefit subsequentaccounting periods, the unamortized value of the project shall be all transferred to the profits and losses of the currentperiod.
26. Contract liabilities
Contract liability refers to the Company's obligation to transfer goods to customers for consideration received orreceivable from customers. If before the Company transfers the goods to the customer, the customer has paid thecontract consideration or the Company has obtained the unconditional right to receive payment, the Company will, atthe earlier time point between the actual payment by the customer and the payment due, present the amount receivedor receivables as contract liabilities. Contract assets and contract liabilities under the same contract are presented innet amount, and contract assets and contract liabilities under different contracts are not offset.
27. Employees' wages and salaries
(1) Accounting treatment of short-term wages and salaries
In the accounting period during which employees provide services to the Company, the Company recognizes theshort-term wages and salaries actually incurred as liabilities and charges them to the current-period profits and lossesor relevant asset costs.
(2) Accounting treatment of separation benefits
The severance benefit plans can be divided into the defined contribution plan and the defined benefit plan
1) In the accounting period during which employees provide services to the Company, the Company recognizesthe amount to be deposited (calculated according to the defined contribution plan) as liabilities and charges it to thecurrent-period profits and losses or relevant asset costs.
2) The accounting treatment for defined benefit plan generally includes the following steps:
a. The Company will estimate the relevant demographic statistical variables and financial variables withunbiased and consistent actuarial assumptions by using the projected unit credit method, and then measure theobligations arising from the defined benefit plan, and the period in which the obligations incurred is determinedaccordingly;
b. The present value of obligation under the defined benefit plan minus the deficit or surplus formed by the fairvalue of asset under the defined benefit plan shall be recognized as the net liabilities or net assets under a definedbenefit plan. If the defined benefit plan had surplus, the Company should measure the net asset under the definedbenefit plan with the surplus or asset caps of the defined benefit plan, whichever is lower. The upper asset limit refersto the present value of the economic interest that can be obtained by the Company from refund of the defined benefitplan or by reducing the fund to be deposited for the defined benefit plan in the future;
c. At the end of the period, recognize the costs of employees' wages and salaries arising from the defined benefitplan as the service costs, net interests of net liabilities or net assets of the defined benefit plan, and changes arisingfrom remeasurement of net liabilities or net assets of the defined benefit plan, wherein the service costs and netinterests of net liabilities or net assets of the defined benefit plan are recorded into the current-period profits/losses orrelevant asset costs, changes arising from remeasurement of net liabilities or net assets of the defined benefit plan arerecorded into other comprehensive income and cannot be reversed to profits/losses in the subsequent accountingperiod, but such amount recognized in other comprehensive income can be transferred within the equity scope;
d. Recognize a settlement gain or loss during settlement of the defined benefit plan.
(3) Accounting treatment of dismiss welfare
The liability of employees' wages and salaries that arises from the dismiss welfare shall be recognized on the
earlier one of the following two dates and charged to the current-period profits/losses:
1) When the Company cannot unilaterally cancel the dismissal welfare provided for the labor relationshipcancellation plan or staff reduction suggestion;
2) When the Company recognizes the cost or expense related to reconstruction involving dismiss welfarepayment.
(4) Accounting treatment of other long-term employee welfares
If other long-term employee welfares offered by the Company to employees comply with the definedcontribution plan, accounting treatment will be conducted according to the defined contribution plan; the long-termbenefits other than these will undergo accounting treatment according to the defined benefit plan. However, "changesarising from remeasurement of net liabilities or net assets of the defined benefit plan" under relevant employees'wages and salaries will be included into the current profits or losses or relevant asset costs.
28. Lease liabilities
For the determination method of lease liability and accounting treatment method, please see Note III. 34 "Lease".
29. Accrued liabilities
(1) Recognition criteria of estimated liabilities
When the businesses related to contingencies such as external guarantee, pending action or arbitration, productquality assurance, plan for layoffs, loss contract, restructuring obligations and fixed asset disposal obligations meetall following conditions, they shall be recognized as liabilities:
1) The liabilities are present liabilities assumed 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
The estimated liabilities shall be measured in accordance with the best estimate of the necessary expenses for theperformance of the current obligation. If there is a sequent range for the necessary expenses and if all the outcomeswithin this range are equally likely to occur, the best estimate shall be recognized in accordance with the middleestimate within the range. In other cases, the best estimate shall be recognized in accordance with the followingmethods, respectively:
1) When a contingency involves a single item, the best estimate shall be determined according to the mostprobable amount;
2) If the contingencies concern two or more items, the best estimate shall be calculated and recognized inaccordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of estimated liabilities of the company isexpected to be compensated by a third party or other parties, the compensation shall be separately recognized as anasset only when it is virtually certain that the reimbursement will be obtained. The amount recognized for thereimbursement shall not exceed the carrying amount of the recognized estimated liabilities.
30. Share-based payments
(1) Accounting treatment method of share-based payment
Share-based payment refers to the transaction of granting equity instruments or bearing liabilities recognized onthe basis of equity instrument for obtaining services from employees or other parties. The share-based payment isclassified into equity-settled share-based payment and cash-settled share-based payment.
1) Equity-settled share-based payments
The equity-settled share-based payment in return for employee services is measured at the fair value of theequity instruments on the day granted to the employees. The fair value is measured based on the best estimate of thenumber of vesting equity instruments in the waiting period and included in the relevant costs or expenses by thestraight-line method when its right is exercised only after the service in the waiting period is completed or thespecified performance conditions are met. When the vesting is exercised immediately after granted, the relevant costor fee is included on the date of the granting date, and the capital reserve is increased accordingly.
On each balance sheet date during the vesting period, the Company makes the best estimate of subsequentinformation such as the latest change in number of vesting employees to correct the estimated number of vestedequity instruments. The aforementioned estimated influences are included in current relevant costs or expenses, andthe capital reserves are adjusted correspondingly.
The equity-settled share-based payment used to exchange for the services of other parties shall be measuredaccording to the 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 according to the fair value of the equityinstruments on the obtaining date of the services of other parties if the fair value of the services of other partiescannot be measured reliably but the fair value of the equity instruments can be measured reliably, and be included inthe relevant costs or expenses, and the stockholders' equity shall be increased correspondingly.
2) Cash-settled share-based payments
The cash-settled share payment is measured according to the fair value of liabilities determined based on sharesor other equity instruments undertaken by the Company. When it is vested immediately after grant, it is included inrelevant costs or expenses as granted, and the liabilities are increased correspondingly; if it is vested after completingthe services in the vesting period or reaching the specified performance terms, the current obtained services areincluded in costs or expenses based on the best estimate of vesting and at fair value of liabilities borne by theCompany on each balance sheet date of the vesting period, and the liabilities are increased correspondingly.
In each balance sheet date and the date of settlement before the settlement of the relevant liabilities, re measurethe fair value of liabilities, the changes recorded in the current profits and losses.
(2) Relevant accounting treatment for amending and terminating share-based payment plan
When 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 accordingto the increase of the fair value of equity instruments. The increase of the fair value of equity instruments refers to thedifference between the fair values on the amendment date of equity instruments before and after amendment. If theamendment reduces the total fair value of the share-based payment or adopts other unfavorable methods to theemployees, the accounting treatment of the obtained services will be continued as if the modification has neveroccurred, unless the Company cancels part or all of the equity instruments granted.
During the waiting period, if the granted equity instrument is canceled, the Company will handle thecancellation as an accelerated exercise of rights, the amount that shall be recognized during the remaining vestingperiod is immediately included in current profits and losses with the capital reserves recognized at the same time. Ifan employee or other party can choose to meet the non-vesting conditions but fails to meet them during the vestingperiod, the Company handles the failure as the cancellation of granted equity instrument.
31. Revenue
For the contract between the Company and the customer, the Company recognizes the revenue at the point whenthe customer obtains control over the relevant goods and the following conditions are met simultaneously: the partiesto the contract have approved the contract and promised to perform their respective obligations; the contract clarifiesthe rights and obligations of the parties to the contract in relation to the transferred goods or the provided services; thecontract has clear payment terms related to the transferred goods; the contract has commercial substance, that is, theperformance of the contract will change the risk, time distribution or amount of the Company's future cash flow; andthe consideration that the Company is entitled to obtain due to its transfer of goods to customers is likely to berecovered.
At the commencement date of the contract, the Company identifies each individual performance obligation inthe contract, and allocates the transaction price to each individual performance obligation in accordance with therelative proportion of the stand-alone selling price of the goods promised by each individual performance obligation.When determining the transaction price, the Company considers the impact of out a variable consideration, majorfinancing components in the contract, non-cash consideration, consideration payable to customers and other factors.
The Company recognizes the transaction price allocated to each individual performance obligation as revenue atthe point when the customer obtains control over the relevant goods. When judging whether the customer hasobtained control over the goods, the Company considers the following signs: where the Company has the currentright to receive payment for the goods, that is, the customer has the current payment obligation for the goods; wherethe Company has transferred the legal ownership of the goods to the customer, that is, the customer has the legalownership of the goods; where the Company has transferred the goods to the customer in kind, that is, the customerhas taken possession of the goods in kind; where the Company has transferred the main risks and rewards of theownership of the goods to the customer, that is, the customer has obtained the main risks and rewards of theownership of the goods; where the customer has accepted the goods; and other signs that the customer has obtainedcontrol over the goods.
The Company's main sales of air conditioners and related products usually only include the performanceobligations of the transferred goods.
(1) Income from selling goods
1) For the income from domestic sales of products, the Company mainly adopts the form of payment in advance.The Company recognizes the income when the product is outbound and delivered to the purchaser, the shippingdocument is issued or the customer's receipt bill is obtained, and the amount of income from product sales isdetermined;
2) In terms of the export sales income, the Company completes the customs declaration and port departureprocedures for the products according to the contract and obtains the bill of lading. The income is confirmedwhen the amount of the sales revenue is determined.
(2) Income from rendering labor services
1) For the income from storage services, after the relevant labor services are provided, the Company will settlethe income on a monthly basis when the amount of income has been determined according to the working hours andstandard wages of the services provided, facilities used and related expenses;
2) For the income from material processing services, the Company will recognize the income when itprocesses the materials according to the contract and delivers it to the customer to obtain the customer's receiptdocument, and the amount of income is determined;
3) The Company's service charge and commission income include the service charge income of acceptancebusiness, service charge income of loan by mandate, etc.For the service charge and commission income, the completion time point of the contractual performanceobligations is determined according to the business settlement sheet formulated through settlement with the customerwhen the business is completed, and the specific amount of revenue is recognized according to the terms and ratiosstipulated in the business contract or agreement.
(3) Income from alienating of right to use assets
The income from abalienating the right to use assets includes the interest income, leasehold income, etc.The Company confirms the income from abalienating the right to use assets when the income amount can bereliably measured and the relevant economic benefits are likely to flow into the enterprise.
1) The interest income of the Company includes the income from the interest of the money deposited at afinancial enterprise and loan interest income. The income from the interest of the money deposited at a financialenterprise is recognized by period according to the time of depositing and the actual interest rate. The loan interestincome is recognized when the Company grants self-operating loan and the interest is accrued by period. The loaninterest income is recognized according to the effective interest rate method.The effective interest rate method means that the amortization cost of a financial asset or financial liability andinterest income or interest expenditure of each period are calculated according to its effective rate of interest. Theeffective rate of interest refers to the interest rate used to discount the future cash flow of a financial asset or financialliability within the expected period of existence or a shorter period to the current book value of the financial asset orfinancial liability. When determining the effective rate of interest, the Company predicts the future cash flow on thebasis of considering all the contract terms of financial asset or financial liability, but does not consider the loss offuture credits. All the charges paid or collected by the Company and becoming a constituent part of the effective rateof interest, transaction expense and transaction premium or discount shall be considered when the effective rate ofinterest is determined.
2) The leasehold revenue recognition conditions of the Company are as follows:
a. The 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.
32. Government subsidies
A government subsidy means the monetary and non-monetary assets obtained free by the Company from thegovernment, but excluding the capital invested by the government as the owner. Government subsidies consist of thegovernment subsidies pertinent to assets and government subsidies pertinent to income.The Company defines the obtained government subsidies used for purchase or construction, or forming thelong-term assets by other ways as government subsidies pertinent to assets, and all the other government subsidies asgovernment subsidies pertinent to income. If the government document does not specify the subsidy object, thefollowing mode is adopted to classify the subsidies into government subsidies pertinent to income and governmentsubsidies pertinent to assets:
(1) If the government document specifies the project to which the subsidy aims, the amount is divided accordingto the relative proportion of the paid amount to form assets to the paid amount to be recorded into expenses in thebudget of this specific project, and this division proportion needs to be checked on every balance sheet date and bechanged when necessary;
(2) If the government document provides only a general presentation of the purpose without specifying thespecific project, the subsidy shall be regarded as government subsidy pertinent to income.
The government subsidies pertinent to assets shall be recognized as deferred income and included in the profitsand losses by period according to the reasonable and systematic methods in the service life of the relevant asset whenthis asset reaches the intended state of use. Where the relevant asset is sold, transferred, scrapped or damaged beforethe service life ends, the related deferred income balance unallocated is transferred to the profits and losses of thecurrent period of asset disposal.
If the government subsidies pertinent to incomes are used for compensating the related expenses or losses in thelater period, they shall be recognized as deferred income when being obtained and shall be recorded into thecurrent-period profits and losses in the period when the relevant expenses or losses are recognized; if the governmentsubsidies pertinent to incomes are used for compensating the related cost expenses or losses incurred, they shall berecorded into the current-period profits and losses directly when being obtained.
The government subsidies pertinent to daily activities shall be recorded in other incomes; the governmentsubsidies not pertinent to daily activities shall be recorded in the non-operating incomes and expenditures.
(3) The obtained subsidized interest of policy preference undergoes accounting treatment by differentiating thefollowing two obtaining ways:
a. Where the financial department disburses the discount fund to the loan bank so that the loan bank provides aloan to the Company at the policy-based preferential interest rate, the fair value of loan is used as the entry value ofloan, the borrowing cost is calculated according to the effective interest rate method, and the difference between theactual amount received and the fair value of borrowing is recognized as deferred income. The deferred income isamortized using the effective interest rate method in the borrowing remaining period to offset the relevant borrowingcost;
b. Where the financial department disburses the discount fund to the Company directly, the correspondingdiscount is used to offset the relevant borrowing cost.
(4) Where the government subsidies are monetary assets, they shall be measured according to the amountreceived or receivable. Where the government subsidies of non-monetary assets, they shall be measured at the fairvalue; if the fair value cannot be obtained in a reliable way, the subsidies shall be measured at the nominal amount.When a government subsidy is actually received, the Company usually recognizes and measures it according to the
actually received amount. At the end of the period, however, if there is any exact evidence showing that the Companycomplies with relevant conditions provided in the financial supporting policy, and it is expected to receive the capitalsupport from the government, this subsidy shall be measured according to the amount receivable. The governmentsubsidy measured according to the amount receivable shall comply with all the following conditions:
1) The amount of receivable subsidy has been confirmed by the authoritative government department by issuinga document, or the subsidy can be independently and reasonably measured and calculated in accordance with relevantprovisions of the formally issued financial fund management measures, and it is predicted that its amount does notinvolve significant uncertainty;
2) The subsidy is based on the financially supported project that is formally released by the local financialdepartment and initiatively disclosed according to provisions of the Regulation of the People's Republic of China onthe Disclosure of Government Information, as well as its financial fund management measures, and the managementmeasures must be generous (any enterprise meeting the defined conditions can apply for the subsidy) and are notformulated specially for specific enterprises;
3) Other conditions that shall be matched according to specific conditions of the Company and this matter ofsubsidy.
33. Deferred income tax assets/deferred income tax liabilities
The deferred income tax assets and deferred income tax liabilities are calculated and recognized based on thedifference between the tax base of assets and liabilities and their book values (temporary differences). For deductiblelosses that can be deducted from taxable income in subsequent years in accordance with the provisions of the tax law,the corresponding deferred income tax assets are recognized. For temporary differences arising from the initialrecognition of goodwill, the corresponding deferred income tax liabilities are not recognized. For temporarydifferences arising from the initial recognition of assets or liabilities arising from non-business combinationtransactions that neither affect accounting profits nor taxable income (or deductible losses), the correspondingdeferred income tax assets and deferred income tax liabilities are not recognized. At the balance sheet date, thedeferred income tax assets and deferred income tax liabilities are measured at the tax rate applicable to the periodduring which the assets are expected 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 income whichit is most likely to obtain and which can be deducted from the deductible temporary differences, deductible losses andtax deductions.
Deferred income tax liabilities are recognized for all taxable temporary differences arising from the investmentsin subsidiaries, joint ventures and associates, except to the extent that both of the following conditions are satisfied:
the Company is able to control the timing of the reversal of the temporary differences; and it is likely that thetemporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductibletemporary differences associated with investments in subsidiaries, joint ventures and associates if all of the followingconditions are satisfied: it is likely that the deductible temporary difference will reverse in the foreseeable future andit is likely that taxable profit in the future will be available against which the deductible temporary difference can beutilized.
The deferred tax assets and the deferred tax liabilities are offset and presented on a net basis when all ofconditions are satisfied:
a. deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the sametaxation authority on the same taxable entity of the Company; andb. the taxable entity of the Company has a legal right to settle current tax assets and liabilities on a net basis.
34. Lease
Lease refers to a contract in which the Company transfered or obtained the right to control the use of one ormore of recognized assets within a certain period of time in exchange for or pay consideration. On the contractcommencement 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 beginning of the lease term, the Company will recognize the right to use the leased assets during the leaseterm as the right-of-use asset and the current value of the lease payment amount that has not been paid as leaseliability, except for short-term lease and low-value asset lease. When calculating the current value of the leasepayment amount, the Company uses the implied interest rate in lease as a discount rate. If the implied interest rate inlease cannot be determined, the lessee incremental borrowing interest rate is used as the discount rate.
The Company should initially measure right-of-use assets according to the cost. The cost includes:
a. The initially measured amount of the lease liabilities;
b. The lease payments minus the enjoyed lease incentives made by the Company on or before the start date ofthe lease term;
c. The initial direct cost of the Company;
d. The estimated cost incurred by the Company to disassemble and remove the leased assets, restore the site ofthe leased assets to the original condition or restore the leased assets to the condition agreed in the lease contract.
2) Subsequent measurement
The Company calculates and distills depreciation by referring to fixed asset depreciation policies (see Note III.19 "Fixed assets"). If the Company can reasonably determine the obtaining of the ownership of the leasing assetswhen the lease term expires, it will calculate and distill depreciation within the remaining service life of the leasingasset. Where it is impossible to reasonably determine if the ownership of the leased asset can be acquired upon theexpiration of the lease term, the Company will make depreciation within a shorter period between the lease term andthe remaining service life of the leased asset.
For lease liability, the Company calculates its interests during the lease term according to a fixed periodicinterest rate and includes them in the current profit or loss or the cost of related assets. The variable lease paymentamount that is not included in the lease liability is included in the current profit or loss or cost of related assets whenit actually occurs.
After the lease term starts, in case of changes in the substantial fixed payment amount, the estimated amountpayable of the guarantee residual value, the index or ratio used for determining the lease payment amount, the calloption, renewal option or the assessment result or actual vesting of the termination option, the Company re-measuresthe lease liability according to the current value of the lease payment amount after the change and adjusts the book
value of the right-of-use asset accordingly. The book value of the right-of-use assets has been reduced to zero, but thelease liabilities still need to be further reduced, the Company will include the remaining amount into the currentprofits and losses.
3) Short-term leases and low value asset leases
For short-term lease (with a lease term of no more than 12 months from the beginning of the lease) andlow-value asset lease, the Company adopts a simplified processing method to include the lease payment amount intothe cost of relevant assets or current profit and loss during the lease term according to the straight line method orother systematic and reasonable methods instead of recognizing the right-of-use asset and lease liability.
(2) With the Company as the Lessor
Based on the substance of transaction, the Company classifies the lease as finance lease and operating lease onthe lease commencement date. Finance lease refers to the lease that transfers substantially almost all risks andrewards associated with the ownership of the assets. Operating lease refers to the lease other than the finance lease.
1) Operating leases
The Company adopts the straight line method to recognize the lease payment amount of the operating lease asthe rental income during the lease term. Variable lease payments in connection with the operating lease that are notincluded in lease receipts are included in the current profits and losses when actually incurred.
2) Finance lease
On the beginning date of the lease term, the Company recognizes the financial lease receivables and terminatesthe recognition of the financial lease assets. The financial lease receivables are initially measured by the net leaseinvestment (the sum of present value the discounted implied interest rate in lease for the non-guaranteed residualvalue and the lease payments that have not been received on the beginning date of the lease term) and the interestsduring the lease term are calculated according to a fixed periodic interest rate. The variable rental payments obtainedby the Company that are not included in the net lease investment are included in the current profit and loss when theyactually occur.
35. Discontinued operation
Discontinued operation refers to a constituent part that meets one of the following conditions and can bedistinguished separately, and this constituent part has been disposed of or classified into the category held for sale:
(1) This constituent part represents an independent main business or a separate main business area;
(2) This constituent part is one 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 lists the continuous operation profit and loss and discontinued operation profit and loss in theconsolidated income statement and the income statement respectively. For the non-current asset or disposal groupheld for sale that does not comply with the definition of discontinued operation, its impairment loss and reversedamount and profit and loss from disposal shall be listed as continuous operation profit and loss. The impairment lossand reversed amount of discontinued operation and other operation profits and losses and profits and losses fromdisposal shall be listed as discontinued operation profits and losses.
For the discontinued operation listed in the current period, in the current financial statements, the informationoriginally listed as continuous operation profit and loss is re-listed as discontinued operation profits and losses of thecomparable accounting period. Where the disposal group for discontinued use that is not for sale meets the conditionof the relevant constituent part in the definition of discontinued operation, it shall be listed as discontinued operationfrom the date of discontinued use. Where the control right of a subsidiary is lost due to reasons such as selling theinvestment into the subsidiary and this subsidiary complies with the definition of discontinued operation, the relevantdiscontinued operation profits and losses shall be listed in the consolidated income statement.
36. Segment report
The Company determines the operating segment based on the internal organizational structure, managementrequirements and internal reporting system, determines the report segment based on the operating segment, anddiscloses the segment information.
The operating segment refers to the constituent part in the Company that meets the following conditions at thesame time:
(1) This constituent part can generate income and cost in daily activities;
(2) The management of the Company can regularly evaluate the operating results of the constituent part so as todecide configuration of resources to it and evaluate its performance;
(3) The Company can obtain the relevant accounting information of this constituent part such as its financialstatus, operating results and cash flows. If two or more operating segments have similar economic characteristics andsatisfy certain conditions, they can be combined into one operating segment.
37. Repurchase share
If the Company's shares are acquired due to the reduction of registered capital or employee rewards, the amountactually paid shall be treated as the treasury share and registered at the same time for future reference. If therepurchased share is canceled, the difference between the total share face value and amount paid for actual repurchasecalculated by the face value of the canceled share and number of shares canceled is used to offset the capital reserve.If the capital reserve is insufficient to offset, the retained earnings shall be offset;
If the repurchased shares are used to reward the Company's employees as equity-settled share-based payment,please refer to Note III. 30 "Share-based payment" for the corresponding accounting treatment.
38. Hedging
To avoid certain risks, the Company hedges certain financial instruments as hedging instruments. Hedge thatmeets the prescribed conditions will be handled by the Company using hedge accounting methods. The Company'shedging includes fair value hedge, cash flow hedge and hedge of net investment in overseas operations.
At the beginning of the hedging, the Company officially designates the hedging tool and the hedged item, andprepares written documents on the hedging relationship and the risk management strategy and risk managementobjectives of the Company engages in hedging. In addition, the Company will continue to assess the effectiveness ofthe hedging when and after the hedging begins.
(1) Fair value hedge
For eligible hedging instruments designated as fair value hedge, the gains or losses generated thereby areincluded in the current profits and losses. If a hedging instrument is hedged on a non-trading equity instrument
investment (or its component) that is selected to be measured at fair value and of which changes are included in othercomprehensive income, the gains and losses generated thereby are included in other comprehensive income. Gain orloss of a hedged item due to hedging risk exposure is included in the current profits and losses, while adjusting thebook value of the hedged item. If a hedged item is measured at fair value, the gain or loss of the hedged item due tohedging risk exposure does not need to adjust the book value of the hedged item, and the related gain and loss areincluded in the current profits or losses or other comprehensive income.When the Company revokes the designation of the hedging relationship, the hedging instrument has expired or issold, the contract is terminated or exercised, or the conditions for the use of hedging accounting is no longer met, theuse of hedging accounting is terminated.
(2) Cash flow hedging
For eligible hedging instruments designated as cash flow hedge, the portion of the gains or losses generatedthereby that is determined to be an effective hedge is included in other comprehensive income, while the portion thatis determined to be an ineffective hedge is included in the current profits and losses.If the expected transaction causes the Company to subsequently recognize a non-financial asset or non-financialliability, or the expected transaction of the non-financial asset or non-financial liability forms a firm commitmentapplicable to fair value hedge accounting, the Company will transfer out the amount of cash flow hedge reserveoriginally recognized in other comprehensive income and includes it in the initial recognition amount of the asset orliability. For other cash flow hedging, the Company will, during the same period in which the hedged expected cashflow affects the profit or loss, transfer out the amount of cash flow hedge reserve originally recognized in othercomprehensive income and includes it in the current profits and losses.
If it is expected that all or part of the net loss originally included in other comprehensive income cannot becompensated in the future accounting period, the portion which cannot be compensated will be transferred out andincluded in the current profits and losses.
When the Company terminates the use of hedging accounting for cash flow hedges, the accumulated cash flowhedge reserve that has been included in other comprehensive income will be retained when future cash flowexpectations still occur, and will be transferred out of other comprehensive income and included in the current profitsand losses when future cash flow expectations no longer occur.
(3) Hedge of net investment in an overseas operation
Hedge of net investment in overseas operations is accounted for using a method similar to the cash flow hedge.Among the gains or losses of hedging instruments, the portion that is determined to be an effective hedge is includedin other comprehensive income, while the portion that is determined to be an ineffective hedge is included in thecurrent profits and losses.
Gains and losses that have been included in other comprehensive income will be transferred out of othercomprehensive income and included in the current profits and losses when disposing of overseas operations.
39. Safe production expense
Some subsidiaries of the Company withdraw the safety production costs in accordance with national regulationsand include them in the costs of related products or current profit or loss.
Where the expenses for production safety extracted are of a cost nature, the special reserves shall be directlywritten off. If the expenses for safety production extracted are used to form fixed assets, the expenses incurred by the
account collection of "construction in progress" shall be recognized as fixed assets when the safety project iscompleted and reaches the expected serviceable state; at the same time, according to the cost of forming fixed assets,special reserves shall be written down, and the same amount of accumulated depreciation shall be confirmed. Thefixed asset is no longer depreciated at a later stage.
40. Risk reserve
In accordance with the Administrative Measures for the Reserve Accrual of Financial Enterprises ("AccrualMeasures") (CJ [2012] No. 20) promulgated by the Ministry of Finance, the financial industry subsidiaries under theCompany establish general risk provisions on the basis of provision for preparation for the impairment of assets tomake up for potential losses related to risk assets that have not yet been recognized. This general risk preparation willbe treated as distribution of profits. It is an integral part of the owner's equity. In principle, it should not be less than
1.5% of the ending balance of risk assets. According to the requirements of the accrual measures, if the proportion ofthe general preparation balance of financial enterprises in the ending balance of risk assets is difficult to reach 1.5%at one time, it can be in place in years. In principle, it should not exceed 5 years.
41. Major accounting policies and accounting estimate changes
(1) Changes in important accounting policies
The Ministry of Finance issued the Accounting Standards for Business Enterprises No. 21 - Leases (Finance andAccounting [2018] No. 35) on December 7, 2018, requiring companies listed at home and abroad at the same timeand companies listed overseas and adopting IFRS or Accounting Standards for Business Accounting to preparefinancial statements to implement from January 1, 2019; and requiring other domestic listed companies implementingAccounting Standards for Business Enterprises to implement from January 1, 2021. The Company madecorresponding changes to its accounting policies in accordance with the requirements of the standard.
According to the provisions of the new lease criteria, for the contract that has existed prior to the first executiondate, the Company chooses not to re-evaluate whether it is lease or includes lease. Only the retained earnings at thebeginning of the period and other related statement items were adjusted on first-time implementation, and noadjustments were made to comparable period information. The change in accounting policy did not have a significantimpact on the financial indicators of total assets, total liabilities, net assets and net profit of the Company.
The following shows adjustments to the financial statements at the beginning of the period of the firstimplementation of the new lease standard for the first time starting from 2021:
| Report Item | Amount as at 31 December, 2020 (before change) | Amount as at January 1, 2021 (after change) | ||
| Consolidated Statements | Parent company's statement | Consolidated Statements | Parent company's statement | |
| Non-current assets: | ||||
| Usufruct assets | 38,952,103.28 | |||
| Long-term unamortized expenses | 8,567,923.50 | 1,954,062.19 | ||
| Total non-current assets | 65,584,936,463.61 | 49,231,239,643.63 | 65,617,274,705.58 | 49,231,239,643.63 |
| Total assets | 279,217,923,628.27 | 239,626,991,300.20 | 279,250,261,870.24 | 239,626,991,300.20 |
| Current liabilities: | ||||
| Report Item | Amount as at 31 December, 2020 (before change) | Amount as at January 1, 2021 (after change) | ||
| Consolidated Statements | Parent company's statement | Consolidated Statements | Parent company's statement | |
| Non-current liabilities due within one year | 22,927,889.42 | |||
| Total current liabilities | 158,478,718,130.74 | 157,595,121,705.31 | 158,501,646,020.16 | 157,595,121,705.31 |
| Non-current liabilities: | ||||
| Lease liabilities | 9,410,352.55 | |||
| Total non-current liabilities | 3,858,718,409.39 | 1,216,835,596.58 | 3,868,128,761.94 | 1,216,835,596.58 |
| Total liabilities | 162,337,436,540.13 | 158,811,957,301.89 | 162,369,774,782.10 | 158,811,957,301.89 |
| Total liabilities and owner's equity | 279,217,923,628.27 | 239,626,991,300.20 | 279,250,261,870.24 | 239,626,991,300.20 |
(2) Changes of major accounting estimates
No.Ⅵ Taxes
1. Main tax categories and tax rates
| Category | Tax Base | Tax Rate |
| Added-value tax | Added value from sales of goods or provision of labor services | 13.00%, 9.00%, 6.00%, etc. |
| Urban maintenance & construction tax | Payable circulation tax | 7.00%, 5.00% |
| Educational surcharges | Payable circulation tax | 3.00% |
| Local education surcharge | Payable circulation tax | 2.00% |
| Business income tax | Taxable income | 34.00%, 25.00%, 20.00%, 16.50%, 15.00%, etc. |
[Note] The place of business of the Company's subsidiary Hong Kong Gree Electric Appliances Sales Limited isHong Kong Special Administrative Region, and the profit tax rate of Hong Kong is 16.50%; the place of business ofthe Company's subsidiaries Gree (Brazil) Electric Appliances Co., Ltd. and Brazil United Electric AppliancesIndustry and Commerce Co., Ltd. is Brazil, and the federal enterprise income tax rate of Brazil is 34.00%.
2. Tax preferences
(1) The Company was registered in Zhuhai, Guangdong, and has been enjoying the preferential policy for thehigh and new tech enterprises (High-tech Enterprise Certificate No. GR202044007307). The Company applied theincome 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 theenterprise income tax rate of 15.00% in 2021
| No. | Name of tax payer | Certificate number | Time for acquiring the certificate | Valid period |
| 1 | Zhuhai Landa Compressor Co., Ltd. | GR202044007788 | December 9, 2020 | Three years |
| 2 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | GR201944009719 | November 30, 2019 | Three years |
| No. | Name of tax payer | Certificate number | Time for acquiring the certificate | Valid period |
| 3 | Zhuhai Kaibang Motor Manufacture Co., Ltd. | GR202144007599 | December 20, 2021 | Three years |
| 4 | Zhuhai Gree Daikin Precision Mold Co., Ltd. | GR201944005454 | December 2, 2019 | Three years |
| 5 | Gree Electric Appliances Appliance (Hefei) Co., Ltd | GR202034000570 | August 17, 2020 | Three years |
| 6 | Gree Green Refrigeration Technology Center Co., Ltd. of Zhuhai | GR202044006403 | December 9, 2020 | Three years |
| 7 | Gree (Wuhan) Electric Appliances Co., Ltd. | GR201942003097 | November 28, 2019 | Three years |
| 8 | Gree (Zhengzhou) Electric Appliances Co., Ltd. | GR202041001002 | September 9, 2020 | Three years |
| 9 | Gree (Wuhu) Electric Appliances Co., Ltd. | GR202034002197 | August 17, 2020 | Three years |
| 10 | Gree (Shi Jiazhuang) Electric Appliances Co., Ltd. | GR201913002804 | December 2, 2019 | Three years |
| 11 | Zhuhai EWP Information Technology Co., Ltd. | GR201944005394 | December 2, 2019 | Three years |
| 12 | Changsha Gree HVAC Equipment Co., Ltd. | GR202043000055 | September 11, 2020 | Three years |
| 13 | Zhuhai Gree Precision Mold Co., Ltd. | GR202044007901 | December 9, 2020 | Three years |
| 14 | GREE (Zhongshan) Household Appliances Co., Ltd. | GR202044011848 | December 9, 2020 | Three years |
| 15 | Hefei Kinghome Electrics Co., Ltd | GR202134001678 | September 18, 2021 | Three years |
| 16 | Zhuhai Gree New Material Co., Ltd. | GR201944009559 | December 2, 2019 | Three years |
| 17 | Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | GR201913002825 | December 2, 2019 | Three years |
| 18 | Zhuhai Gree Dakin Device Co., Ltd. | GR202144007849 | December 20, 2021 | Three years |
| 19 | Zhuhai Gree Electormechanical Engineering Co., Ltd. | GR202044011411 | December 9, 2020 | Three years |
| 20 | Gree TOSOT (Suqian) Home Appliances Co., Ltd. | GR202032012986 | December 2, 2020 | Three years |
| 21 | Gree (Hangzhou) Electric Appliances Co., Ltd. | GR202033001006 | December 1, 2020 | Three years |
| 22 | Hefei Landa Compressor Co., Ltd. | GR202034001654 | August 17, 2020 | Three years |
| 23 | Zhengzhou Landa Compressor Co., Ltd. | GR202041001848 | December 4, 2020 | Three years |
| 24 | Wuhan Landa Compressor Co., Ltd. | GR202042001716 | December 1, 2020 | Three years |
| 25 | Hefei Kaibang Motor Manufacture Co., Ltd. | GR202034002198 | August 17, 2020 | Three years |
| 26 | Henan Kaibang Motor Manufacture Co., Ltd. | GR202041000105 | September 9, 2020 | Three years |
| 27 | Gree Electric Enterprises (Ma'anshan) Ltd. | GR202034001625 | August 17, 2020 | Three years |
| 28 | Gree Altairnano New Energy Inc. | GR202144004177 | December 20, 2021 | Three years |
| 29 | Zhuhai Guangtong Automobile Co., Ltd. | GR202044009236 | December 9, 2020 | Three years |
| No. | Name of tax payer | Certificate number | Time for acquiring the certificate | Valid period |
| 30 | Zhuhai Gree Altairnano Electric Appliances, Inc. | GR202144006478 | December 20, 2021 | Three years |
| 31 | Chengdu Gree Titanium New Energy Inc. | GR201951002380 | November 28, 2019 | Three years |
| 32 | Hebei Gree Titanium New Energy Inc. | GR201913001838 | October 30, 2019 | Three years |
| 33 | Northern Aotai Nanotechnology Co., Ltd. | GR202113001126 | September 18, 2021 | Three years |
(3) The following subsidiaries of the Company enjoy the country's western development policy, and applied theincome tax rate of 15.00%.
| No. | Name of tax payer | Start time |
| 1 | Gree (Chongqing) Electric Appliances Co., Ltd. | January 1, 2008 |
| 2 | Chongqing Landa Compressor Co., Ltd. | January 1, 2015 |
| 3 | Chongqing Kaibang Motor Manufacture Co., Ltd. | January 1, 2013 |
| 4 | Chengdu Gree Xinhui Medical Equipment Co., Ltd. | April 8, 2020 |
| 5 | Chengdu Guangtong Automobile Co., Ltd. | June 13, 2017 |
Ⅴ Items in consolidated financial statements
For the following note items (including notes to the main items of the parent company's financial statements),unless otherwise specified, "the beginning of the period" means January 1, 2021, "the end of the period" meansDecember 31, 2021, and "the end of the previous year" means December 31, 2020, "the current year" refers to 2021,and "the previous year" refers to 2020. Unless otherwise stated, the amount unit is Yuan.
1. Monetary funds
| Item | Balance at the end of the period | Beginning balance |
| Cash on hand | 1,021,935.16 | 468,623.79 |
| Bank deposits | 37,248,838,390.03 | 78,022,377,237.18 |
| Other monetary capital [Note 1] | 36,207,001,226.17 | 18,693,373,853.14 |
| Deposits in central bank [Note 2] | 1,406,034,172.78 | 2,039,998,699.60 |
| Deposits in other banks | 38,791,111,355.15 | 35,190,517,674.79 |
| Subtotal | 113,654,007,079.29 | 133,946,736,088.50 |
| Accrued interest | 3,285,291,697.58 | 2,466,407,771.31 |
| Total | 116,939,298,776.87 | 136,413,143,859.81 |
| Including: Total amount deposited abroad | 341,734,386.47 | 637,626,876.23 |
[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 RMB 35,924,841,935.70;
[Note 2] The statutory deposit reserve in the Company's deposits in central bank are RMB 1,403,981,413.43,and its use is restricted;
[Note 3] Except the above situations, there are no other funds in the end-of-period balance of monetary funds
that have limited use and potential recovery risks due to mortgage, pledge or freezing.
2. Trading financial liabilities
| Item | Balance at the end of the period | Beginning balance |
| Financial assets which are measured at their fair values and of which the changes are included into other comprehensive income | 370,820,500.00 | |
| Including: Debt instrument investment | 370,820,500.00 | |
| Total | 370,820,500.00 |
3. Derivative financial assets
| Item | Balance at the end of the period | Beginning balance |
| Forward foreign exchange settlement/sale | 198,773,198.65 | 285,494,153.96 |
| Total | 198,773,198.65 | 285,494,153.96 |
4. Accounts receivable
(1) Accounts receivables are disclosed by account age
| Account age | Balance at the end of the period |
| Within 1 year | 12,223,311,908.11 |
| 1 ~ 2 years | 1,097,130,089.53 |
| 2 to 3 years | 654,718,975.22 |
| Over 3 years | 2,131,328,023.16 |
| Subtotal | 16,106,488,996.02 |
| Less: Bad debt provisions | 2,265,590,193.26 |
| Total | 13,840,898,802.76 |
[Note] The Company's accounts receivable with the account age of over 1 year are mainly subsidy receivablesfor dismantling waste electrical and electronic products and payment for new energy vehicles.
(2) Disclosure of accounts receivable classification
| Category | Balance at the end of the period | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Percentage (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 1,293,262,223.96 | 8.03 | 1,029,353,603.16 | 79.59 | 263,908,620.80 |
| Accounts receivable with bad debt provisions accrued according to the combination | 14,813,226,772.06 | 91.97 | 1,236,236,590.10 | 8.35 | 13,576,990,181.96 |
| Including: account age combination | 12,433,046,350.06 | 77.19 | 1,041,853,417.60 | 8.38 | 11,391,192,932.46 |
| Low risk combination | 2,380,180,422.00 | 14.78 | 194,383,172.50 | 8.17 | 2,185,797,249.50 |
| Category | Balance at the end of the period | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Percentage (%) | Amount | Credit loss rate (%) | ||
| Total | 16,106,488,996.02 | 100.00 | 2,265,590,193.26 | 14.07 | 13,840,898,802.76 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Percentage (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 125,518,248.51 | 1.32 | 125,518,248.51 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 9,365,829,735.59 | 98.68 | 627,598,830.15 | 6.70 | 8,738,230,905.44 |
| Including: account age combination | 7,773,779,870.59 | 81.91 | 484,681,830.93 | 6.23 | 7,289,098,039.66 |
| Low risk combination | 1,592,049,865.00 | 16.77 | 142,916,999.22 | 8.98 | 1,449,132,865.78 |
| Total | 9,491,347,984.10 | 100.00 | 753,117,078.66 | 7.93 | 8,738,230,905.44 |
1) Accounts receivable for which bad debt reserves are accrued individually:
| Name | Balance at the end of the period | |||
| Book balance | Bad debt provision | Credit loss rate (%) | Reason for appropriation | |
| 43 units in total | 1,293,262,223.96 | 1,029,353,603.16 | 79.59 | It is expected to be difficult to recover in full |
| Total | 1,293,262,223.96 | 1,029,353,603.16 | 79.59 | |
2) In the combination, the accounts receivable with bad debt provisions accrued by account age combination:
| Account age | Book balance | Bad debt provision | Credit loss rate (%) |
| Within 1 year | 11,116,991,920.25 | 555,849,596.19 | 5.00 |
| 1 ~ 2 years | 475,779,000.79 | 86,302,607.06 | 18.14 |
| 2 to 3 years | 223,686,004.19 | 62,249,391.62 | 27.83 |
| Over 3 years | 616,589,424.83 | 337,451,822.73 | 54.73 |
| Total | 12,433,046,350.06 | 1,041,853,417.60 | 8.38 |
[Note] The changes in the expected credit loss rate of aging combination in this period are caused by thecompany combination not under the same control.
3) In the combination, the accounts receivable with bad debt provisions accrued by low risk combination
| Name | Balance at the end of the period | ||
| Book balance | Bad debt provision | Credit loss rate (%) | |
| Low risk combination | 2,380,180,422.00 | 194,383,172.50 | 8.17 |
| Name | Balance at the end of the period | ||
| Book balance | Bad debt provision | Credit loss rate (%) | |
| Total | 2,380,180,422.00 | 194,383,172.50 | 8.17 |
(3) Changes in the bad-debt provision in this period
| Category | Beginning balance | Change of the current period | Balance at the end of the period | |||
| Changes in the scope of combination | Appropriation | Recovered or reversed | Wrote-off | |||
| Single accrual | 125,518,248.51 | 906,365,112.59 | 2,529,757.94 | 1,029,353,603.16 | ||
| Account age combination | 484,681,830.93 | 406,611,041.33 | 150,772,299.04 | 211,753.70 | 1,041,853,417.60 | |
| Low risk combination | 142,916,999.22 | 28,462,574.33 | 23,003,598.95 | 194,383,172.50 | ||
| Total | 753,117,078.66 | 1,341,438,728.25 | 173,775,897.99 | 2,529,757.94 | 211,753.70 | 2,265,590,193.26 |
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Particulars on accounts receivable actually wrote-off in the current period
| Item | Wrote-off amount |
| 6 units in total | 211,753.70 |
| Total | 211,753.70 |
(5) Accounts receivable of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Balance at the end of the period of accounts receivable | Percentage (%) in the total balance at the end of the period of accounts receivable | Balance of provision for bad debts at the end of the period |
| First | 1,610,790,135.00 | 10.00 | 165,143,601.52 |
| Second | 1,099,252,494.86 | 6.82 | 54,962,624.56 |
| Third | 769,390,287.00 | 4.78 | 29,239,570.98 |
| Fourth | 497,718,000.00 | 3.09 | 24,885,900.00 |
| Fifth | 368,451,389.27 | 2.29 | 18,422,569.45 |
| Total | 4,345,602,306.13 | 26.98 | 292,654,266.51 |
(6) Accounts receivable derecognized due to the transfer of financial assets
No.
(7) Assets and liabilities formed due to the transfer and continuous involvement of accounts receivableNo.
5. Receivable financing
(1) Receivables financing classified and listed
| Item | Balance at the end of the period | Beginning balance |
| Notes receivable measured at fair value | ||
| Including: Bank acceptance bills | 25,612,056,693.07 | 20,972,269,154.21 |
| Including: Notes accepted by Gree Finance Company | 804,781,351.78 | 1,105,774,342.96 |
| Commercial acceptance bill | 1,135,441.28 | |
| Total | 25,612,056,693.07 | 20,973,404,595.49 |
(2) Receivables financing pledged by the Company at the end of the period
| Item | Pledged amount at the end of the period |
| Bank acceptance bills | 12,911,461,792.08 |
| Total | 12,911,461,792.08 |
(3) Receivables financing that has been endorsed or discounted by the Company at the end of the period butnot yet due at the balance sheet date
| Item | Amount whose recognition is terminated at the end of the period | Amount whose recognition is not terminated at the end of the period |
| Bank acceptance bills | 23,818,750,252.14 | 840,000,000.00 |
| Commercial acceptance bill | 12,128,009.63 | |
| Total | 23,818,750,252.14 | 852,128,009.63 |
(4) Receivables financing transferred by the Company into accounts receivable due to the note issuer's failureof performanceNo.
(5) Receivables financing actually wrote off in the current period
No.
6. Advance payments
(1) The prepayments are listed by account age as follows
| Account age | Balance at the end of the period | Beginning balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 4,500,793,847.23 | 98.02 | 3,103,519,802.42 | 99.18 |
| 1 ~ 2 years | 21,906,080.13 | 0.48 | 17,658,164.08 | 0.56 |
| 2 to 3 years | 24,927,433.26 | 0.54 | 5,665,338.67 | 0.18 |
| Over 3 years | 44,259,156.72 | 0.96 | 2,358,698.07 | 0.08 |
| Total | 4,591,886,517.34 | 100.00 | 3,129,202,003.24 | 100.00 |
[Note] The changes in the age structure of advance payment in this period are caused by business combinationnot under the same control.
(2) Advance payment aged over one year and significant amount in this periodNo.
(3) Prepayments of top 5 prepayment objects in the balance at the end of the period collected by theprepayment objectThe aggregate balance amount of prepayments of top 5 suppliers in the balance at the end of the period collectedby the supplier was RMB 2,496,164,550.08, accounting for 54.36% of the total balance of prepayments at the end ofthe period.
7. Other receivables
| Item | Balance at the end of the period | Beginning balance |
| Dividends receivable | 615,115.33 | |
| Other receivables [Note 1] | 333,546,754.85 | 147,338,547.86 |
| Total | 334,161,870.18 | 147,338,547.86 |
[Note 1] Other receivables in the table above refer to other receivables after deduction of interest receivables anddividends receivable;
[Note 2] The Company has no interest receivable balance at the end and the beginning of the period.
(1) Dividends receivable
1) Classification of dividends receivable
| Item | Balance at the end of the period | Beginning balance |
| Dividends receivable | 615,115.33 | |
| Total | 615,115.33 |
2) Significant dividends receivable aged over 1 year
No.
(2) Other receivables
1) Other receivables classified by nature
| Nature of money | Balance at the end of the period | Beginning balance |
| Current and low-risk payments | 487,589,373.01 | 165,954,624.87 |
| Less: Bad debt provisions | 154,042,618.16 | 18,616,077.01 |
| Total | 333,546,754.85 | 147,338,547.86 |
2) Accrual of bad debt reserves
| Bad debt provision | Phase I | Phase 2 | Phase 3 | 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) |
| Bad debt provision | Phase I | Phase 2 | Phase 3 | 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) | ||
| Balance as at January 1, 2021 | 7,377,897.43 | 11,238,179.58 | 18,616,077.01 | |
| Changes in the scope of combination in this period | 6,744,383.37 | 124,278,371.61 | 131,022,754.98 | |
| Appropriation for the current period | 7,620,570.28 | 7,620,570.28 | ||
| Reserved in the current period | 3,158,127.91 | 3,158,127.91 | ||
| Wrote-off in the current period | 36,392.38 | 22,263.82 | 58,656.20 | |
| Balance on December 31, 2021 | 10,927,760.51 | 143,114,857.65 | 154,042,618.16 |
3) Disclosure by aging
| Account age | Book balance |
| Within 1 year | 223,370,210.02 |
| 1 ~ 2 years | 66,464,345.41 |
| 2 to 3 years | 95,316,990.94 |
| Over 3 years | 102,437,826.64 |
| Subtotal | 487,589,373.01 |
| Less: Bad debt provisions | 154,042,618.16 |
| Total | 333,546,754.85 |
4) Bad debt reserves accrued, recovered or reversed in the current period
| Category | Beginning balance | Change of the current period | Balance at the end of the period | ||
| Changes in the scope of combination | Accrual/reversal | Wrote-off | |||
| Single accrual | 73,373,158.79 | 2,527,264.75 | 75,900,423.54 | ||
| Account age combination | 17,944,577.01 | 57,649,596.19 | 2,547,427.62 | 58,656.20 | 78,082,944.62 |
| Low risk combination | 671,500.00 | -612,250.00 | 59,250.00 | ||
| Total | 18,616,077.01 | 131,022,754.98 | 4,462,442.37 | 58,656.20 | 154,042,618.16 |
[Note] There is no significant recovery or reversal of bad debt provisions during the current period.
5) Other receivables actually wrote off in the current period
| Item | Wrote-off amount |
| 4 units in total | 58,656.20 |
[Note] There was no significant writing-off of other receivables during the current period.
6) Other receivables of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Nature of money | Balance at the end of the period | Account age | Proportion to the total balance of other receivables at the end of the period (%) | Balance of provision for bad debts at the end of the period |
| First | Intercourse funds | 77,016,600.00 | 2 to 3 years | 15.80 | 19,255,186.18 |
| Second | Intercourse funds | 40,312,312.68 | 1 to 3 years, 3 years or more | 8.27 | 40,312,312.68 |
| Third | Intercourse funds | 36,017,222.73 | Within 1 year | 7.39 | 1,800,861.14 |
| Fourth | Intercourse funds | 23,019,791.78 | Over 3 years | 4.72 | 23,019,791.78 |
| Fifth | Intercourse funds | 20,050,000.00 | Within 1 year | 4.11 | 1,002,500.00 |
| Total | 196,415,927.19 | 40.29 | 85,390,651.78 |
7) Receivables involving government subsidies
No.
8) Other receivables derecognized due to the transfer of financial assets
No.
9) Assets and liabilities formed due to the transfer and continuous involvement of other receivablesNo.
8. Inventory
(1) Classification of inventories
| Item | Balance at the end of the period | ||
| Book balance | Inventory depreciation provision or provision for impairment of contract performance cost | Book value | |
| Raw material | 11,013,706,175.31 | 844,318,692.51 | 10,169,387,482.80 |
| Goods in process and contract performance cost | 1,974,184,596.76 | 1,974,184,596.76 | |
| Finished goods | 27,845,565,162.22 | 1,296,652,950.63 | 26,548,912,211.59 |
| Development cost | 4,073,114,036.86 | 4,073,114,036.86 | |
| Total | 44,906,569,971.15 | 2,140,971,643.14 | 42,765,598,328.01 |
(Continued)
| Item | Beginning balance | ||
| Book balance | Falling price reserve of inventory or impairment reserves of contract performance cost | Book value | |
| Raw material | 8,959,268,217.85 | 388,954,526.10 | 8,570,313,691.75 |
| Goods in process and contract performance cost | 2,046,139,363.33 | 2,046,139,363.33 | |
| Item | Beginning balance | ||
| Book balance | Falling price reserve of inventory or impairment reserves of contract performance cost | Book value | |
| Finished goods | 15,761,579,871.16 | 108,259,680.25 | 15,653,320,190.91 |
| Development cost | 1,609,731,913.40 | 1,609,731,913.40 | |
| Total | 28,376,719,365.74 | 497,214,206.35 | 27,879,505,159.39 |
(2) Provision for the loss on decline in value of inventories
| Item | Beginning balance | Increase in the combination scope | Increased amount in the current period | Decreased amount in the current period | Balance at the end of the period |
| Appropriation | Write-off amount | ||||
| Raw material | 388,954,526.10 | 450,926,043.68 | 120,560,679.83 | 116,122,557.10 | 844,318,692.51 |
| Finished goods | 108,259,680.25 | 866,222,164.30 | 349,919,336.20 | 27,748,230.12 | 1,296,652,950.63 |
| Total | 497,214,206.35 | 1,317,148,207.98 | 470,480,016.03 | 143,870,787.22 | 2,140,971,643.14 |
Specific bases for making a provision for decline in value of inventories and reasons of reversing or writing offthe provision for decline in value of inventories in the current period:
| Item | Specific basis for making a provision for decline in value of inventories | Writing off the provision for decline in value of inventories in the current period |
| Raw material | The lower of the inventory cost and net realizable value | Applied for or sold in the current period |
| Finished goods | The lower of the inventory cost and net realizable value | Sold in the current period |
(3) The inventory balance at the end of the period did contain capitalized amounts of borrowing costs
No.
(4) Amortization amount of the current period of contract performance cost: The amortized contractperformance cost in the current period is 109,805,808.67 yuan.
9. Contract assets
(1) Contract assets are disclosed by account age
| Account age | Balance at the end of the period |
| Within 1 year | 417,335,707.89 |
| 1 ~ 2 years | 279,122,410.83 |
| 2 to 3 years | 368,013,139.80 |
| Over 3 years | 480,647,482.82 |
| Subtotal | 1,545,118,741.34 |
| Less: provision for impairment | 393,890,268.71 |
| Total | 1,151,228,472.63 |
(2) Contract assets are disclosed by category
| Item | Balance at the end of the period | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Account age combination | 721,024,117.34 | 115,256,697.58 | 605,767,419.76 | 91,786,834.71 | 13,241,309.11 | 78,545,525.60 |
| Low risk combination | 824,094,624.00 | 278,633,571.13 | 545,461,052.87 | |||
| Total | 1,545,118,741.34 | 393,890,268.71 | 1,151,228,472.63 | 91,786,834.71 | 13,241,309.11 | 78,545,525.60 |
(3) Particulars on impairment provisions accrued for contract assets in the current period:
| Item | Beginning balance | Increase in the combination scope | Appropriation for the current period | Reserved in the current period | Balance at the end of the period |
| Low risk combination | 279,915,098.02 | 1,281,526.89 | 278,633,571.13 | ||
| Account age combination | 13,241,309.11 | 72,146,394.86 | 29,868,993.61 | 115,256,697.58 | |
| Total | 13,241,309.11 | 352,061,492.88 | 29,868,993.61 | 1,281,526.89 | 393,890,268.71 |
10. Non-current assets due within one year
| Item | Balance at the end of the period | Beginning balance | Remark |
| Other debt investments due within one year | 10,860,197,639.98 | ||
| Long-term receivables due within one year | 3,406,416.52 | ||
| Subtotal | 10,863,604,056.50 | ||
| Accrued interest of other debt investments due within one year | 169,967,876.10 | ||
| Total | 11,033,571,932.60 |
11. Other current assets
| Item | Balance at the end of the period | Beginning balance |
| Monetary investment products | 5,460,000,000.00 | 8,274,000,000.00 |
| Input tax to be deducted and prepaid tax | 2,786,329,636.97 | 2,532,692,156.12 |
| Notes which have been endorsed or discounted but not yet due | 852,128,009.63 | 4,588,589,780.94 |
| Others | 282,434,079.34 | 104,308,689.13 |
| Subtotal | 9,380,891,725.94 | 15,499,590,626.19 |
| Add: Accrued interests | 21,626,670.32 | 117,711,287.68 |
| Less: Preparation for impairment of other mobile assets | 20,340,809.19 | |
| Total | 9,382,177,587.07 | 15,617,301,913.87 |
12. Disbursement of loans statements and advances
(1) Distribution of enterprises and individuals
| Item | Balance at the end of the period | Beginning balance |
| Item | Balance at the end of the period | Beginning balance |
| Disbursement of loans statements and advances measured at amortized costs: | ||
| Disbursement of corporate loans and advances | 4,247,674,817.07 | 5,403,251,177.80 |
| Including: (1) Loan | 1,052,040,000.00 | 3,857,680,000.00 |
| (2) Discount | 3,195,634,817.07 | 1,545,571,177.80 |
| Including: discount asset interest adjustment | -31,355,182.93 | -7,547,171.66 |
| Less: loan loss provision | 106,975,750.00 | 135,269,958.74 |
| Including: combined appropriation | 106,975,750.00 | 135,269,958.74 |
| Subtotal | 4,140,699,067.07 | 5,267,981,219.06 |
| Accrued interest | 1,953,834.78 | 5,824,362.46 |
| Book value of disbursement of corporate loans and advances | 4,142,652,901.85 | 5,273,805,581.52 |
(2) Changes in loss provision for loans
| Item | Balance at the end of the period | Beginning balance |
| Disbursement of loans statements and advances measured at amortized costs: | ||
| Beginning balance | 135,269,958.74 | 369,304,393.78 |
| Appropriation for the current period | -28,294,208.74 | -234,034,435.04 |
| Balance at the end of the period | 106,975,750.00 | 135,269,958.74 |
13. Other debt investments
(1) Particulars on other debt investments
| Items | Balance at the end of the period | ||||
| Cost | Accrued interest | Fair value changes | Book value | Accumulated loss provisions recognized in other comprehensive income | |
| Treasuries | 294,120,614.59 | 3,378,082.20 | 7,448,985.41 | 304,947,682.20 | |
| Corporate bonds | 469,153,368.80 | 6,880,882.18 | 7,002,641.18 | 483,036,892.16 | |
| Transferable certificate of deposit [Note] | 17,100,000,000.00 | 354,467,166.67 | 17,454,467,166.67 | ||
| Subtotal | 17,863,273,983.39 | 364,726,131.05 | 14,451,626.59 | 18,242,451,741.03 | |
| Less: Other debt investment due within one year | 10,859,752,569.26 | 169,967,876.10 | 445,070.72 | 11,030,165,516.08 | |
| Less: Other current assets | 1,300,000,000.00 | 2,229,333.33 | 1,302,229,333.33 | ||
| Total | 5,703,521,414.13 | 192,528,921.62 | 14,006,555.87 | 5,910,056,891.62 | |
(Continued)
| Item | Beginning balance | ||||
| Cost | Accrued interest | Fair value changes | Book value | Accumulated loss provisions recognized in other comprehensive income | |
| Treasuries | 292,922,755.76 | 3,378,082.20 | 2,565,844.24 | 298,866,682.20 | |
| Corporate bonds | 199,243,635.63 | 1,890,410.97 | 2,201,564.37 | 203,335,610.97 | |
| Total | 492,166,391.39 | 5,268,493.17 | 4,767,408.61 | 502,202,293.17 | |
[Note] The transferable certificate of deposit held by the Company is classified as financial assets measured atfair value and whose changes are included in other comprehensive income according to the management's intentionand the cash flow of contract, and listed as other debt investment, other mobile assets, and non-current assets duewithin one year according to its liquidity. On December 31, 2021, there was no significant difference between thecost of the Company's transferable certificate of deposit and fair value.
(2) Important debt investment
| Other debt items | Balance at the end of the period | Beginning balance | |||||||
| Face value | Coupon rate (%) | Real interest rate (%) | Date due | Face value | Coupon rate (%) | Real interest rate (%) | Date due | ||
| 16. Interest-bearing treasuries 17 | 200,000,000.00 | 2.74 | 3.10 | August 4, 2026 | 200,000,000.00 | 2.74 | 3.10 | August 4, 2026 | |
| 16. Interest-bearing treasuries 17 | 100,000,000.00 | 2.74 | 3.44 | August 4, 2026 | 100,000,000.00 | 2.74 | 3.44 | August 4, 2026 | |
| 20 Nongfa 08 | 200,000,000.00 | 3.45 | 3.54 | September 23, 2025 | 200,000,000.00 | 3.45 | 3.54 | September 23, 2025 | |
| 19 Huafa Group MTN007 | 50,000,000.00 | 4.57 | 5.00 | December 6, 2022 | |||||
| 19 Huafa Group MTN007 | 10,000,000.00 | 4.57 | 5.10 | December 6, 2022 | |||||
| 19 Huafa Group MTN008B | 10,000,000.00 | 5.30 | 5.31 | December 11, 2024 | |||||
| 21 Huafa Group MTN007 | 200,000,000.00 | 4.65 | 4.65 | June 28, 2024 | |||||
| Transferable certificate of deposit | 17,100,000,000.00 | 3.35-4.18 | 3.35-4.18 | January 14, 2022 to December 9, 2024 | |||||
| Total | 17,870,000,000.00 | 500,000,000.00 | |||||||
14. Long-term receivables
| Item | Balance at the end of the period | ||
| Book balance | Bad debt provision | Book value | |
| Goods sold on installment | 38,157,391.25 | 20,340,809.19 | 17,816,582.06 |
| Less: Unrealized financing income | 844,248.07 | 844,248.07 | |
| Item | Balance at the end of the period | ||
| Book balance | Bad debt provision | Book value | |
| Less: Long-term account receivable due within one year | 3,406,416.52 | 3,406,416.52 | |
| Less: Reclassified to other mobile assets | 31,487,695.59 | 20,340,809.19 | 11,146,886.40 |
| Total | 2,419,031.07 | 2,419,031.07 | |
15. Long-term equity investments
| Name of invested entities | Beginning balance | Increase/Decrease in the current period | Balance at the end of the period | ||||||
| Original value | Provision for impairment | Changes in the scope of combination | Decreased investment | Investment gains and losses recognized under equity law | Adjustment of other comprehensive incomes | Declaration and distribution of cash dividends or profits | Original value | Provision for impairment | |
| I. Joint venture | |||||||||
| Six companies including Songyuan Grain Group Jiangwan Rice Industry Co., Ltd. [Note] | 1,145,000.00 | 75,914.19 | 1,220,914.19 | ||||||
| Subtotal | 1,145,000.00 | 75,914.19 | 1,220,914.19 | ||||||
| Ⅱ. Associates | |||||||||
| Gree (Vietnam) Electric Appliances, Inc. | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | |||||
| Liaowang All Media Communication Co., Ltd. | 36,052,960.09 | 1,332,591.91 | 37,385,552.00 | ||||||
| Beijing Gree Technology Co., Ltd. | 2,294,251.09 | -237,069.32 | 2,057,181.77 | ||||||
| Chongqing Pargo Mechanical Equipment Co., Ltd. | 11,249,230.03 | 13,498,800.00 | 2,249,569.97 | ||||||
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 14,729,087.92 | 212,951.68 | 14,942,039.60 | ||||||
| Hunan Guoxin Semiconductor Technology Co., Ltd. | 20,099,845.47 | 13,817.45 | 108,922.33 | 20,004,740.59 | |||||
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | 7,061,709,059.56 | -18,046,764.90 | 1,849,833,156.32 | 8,893,495,450.98 | |||||
| Henan Yuze Finance Leasing Co., Ltd. | 51,286,191.75 | 1,569,732.71 | 1,106,576.00 | 51,749,348.46 | |||||
| Zhuhai Hanling Equity Investment Partnership (Limited Partnership) | 922,420,436.23 | 53,187,718.56 | 55,127,991.72 | 920,480,163.07 | |||||
| Name of invested entities | Beginning balance | Increase/Decrease in the current period | Balance at the end of the period | ||||||
| Original value | Provision for impairment | Changes in the scope of combination | Decreased investment | Investment gains and losses recognized under equity law | Adjustment of other comprehensive incomes | Declaration and distribution of cash dividends or profits | Original value | Provision for impairment | |
| Lanzhou Guangtong New Energy Automobile Co., Ltd. | 101,054,678.56 | 8,076,320.55 | -685,328.00 | 108,445,671.11 | |||||
| Guizhou Qianzhixing New Energy Co., Ltd. | 2,682,419.83 | 92,796.23 | 2,775,216.06 | ||||||
| Ningxia Nenggu New Energy Technology Co., Ltd. | 443,125.41 | -99,262.34 | 343,863.07 | ||||||
| Eocell Limited | 7,284,782.90 | -2,144,270.51 | 5,140,512.39 | ||||||
| Beijing Liyin Automobile Technology Co., Ltd. | 4,605,056.55 | 4,605,056.55 | |||||||
| Sichuan Jinshi Leasing Co., Ltd. | 271,108,603.86 | 5,310,882.64 | 276,419,486.50 | ||||||
| Subtotal | 8,121,781,071.49 | 1,940,009.35 | 387,178,667.11 | 13,498,800.00 | 51,519,014.63 | 1,849,147,828.32 | 58,400,671.82 | 10,337,727,109.73 | 1,940,009.35 |
| Total | 8,121,781,071.49 | 1,940,009.35 | 388,323,667.11 | 13,498,800.00 | 51,594,928.82 | 1,849,147,828.32 | 58,400,671.82 | 10,338,948,023.92 | 1,940,009.35 |
[Note] For the disposal of 6 companies including Songyuan Grain Group Jiangwan Rice Industry Co., Ltd., please refer to Note VI. 4 "Disposal of subsidiaries".
16. Other equity instruments investments
(1) Particulars on other equity instrument investments
| Item | Balance at the end of the period | Beginning balance |
| Shanghai Highly (Group) Co., Ltd. | 755,079,703.46 | 667,802,216.81 |
| Xinjiang Joinworld Company Limited | 217,422,947.74 | 215,172,336.36 |
| Wingtech Technology Co., Ltd. [Note 1] | 4,636,568,053.50 | 3,550,040,505.00 |
| RSMACALLINE-HSHS | 195,769,835.63 | 254,461,858.93 |
| San'an Optoelectronics Co., Ltd. [Note 2] | 4,302,405,489.72 | 3,093,928,974.37 |
| COFCO Trading (Suibin) Agricultural Development Co., Ltd. | 7,000,000.00 | 7,000,000.00 |
| Total | 10,114,246,030.05 | 7,788,405,891.47 |
[Note 1] The Company directly holds 35,858,995 shares of Wingtech Technology Co., Ltd., and the sale of suchshares is restricted for 36 months from October 2019.
[Note 2] The Company directly holds 114,547,537 shares of San'an Optoelectronics Co., Ltd., and the sale ofsuch shares is restricted for 36 months from June 2020.
(2) Particulars on non-trading equity instrument investment
| Item Name | Dividend income recognized | Accumulated gains | Cumulative losses | Other comprehensive income Amount transferred to retained earnings | Reason for designation as at fair value through other comprehensive income | Reason for the amount transferred from other comprehensive income into retained earnings |
| Shanghai Highly (Group) Co., Ltd. | 14,411,825.47 | 386,430,427.61 | According to the management's intention and contractual cash flow | |||
| RSMACALLINE-HSHS | 444,254,984.68 | According to the management's intention and contractual cash flow | ||||
| Wingtech Technology Co., Ltd. | 5,916,734.18 | 3,751,568,056.90 | According to the management's intention and contractual cash flow | |||
| Xinjiang Joinworld Company Limited | 3,918,701.49 | 105,586,941.75 | 114,949,817.60 | According to the management's intention and | Sales of some stocks |
| Item Name | Dividend income recognized | Accumulated gains | Cumulative losses | Other comprehensive income Amount transferred to retained earnings | Reason for designation as at fair value through other comprehensive income | Reason for the amount transferred from other comprehensive income into retained earnings |
| contractual cash flow | ||||||
| San'an Optoelectronics Co., Ltd. | 17,182,130.55 | 2,302,405,489.72 | According to the management's intention and contractual cash flow | |||
| COFCO Trading (Suibin) Agricultural Development Co., Ltd. | 1,448,000.00 | According to the management's intention and contractual cash flow | ||||
| Total | 42,877,391.69 | 6,159,560,488.37 | 830,685,412.29 | 114,949,817.60 |
17. Other non-current financial assets
| Item | Balance at the end of the period | Beginning balance |
| Financial assets which are measured at their fair values and of which the changes are included into other comprehensive income | 81,309,327.39 | 2,003,483,333.33 |
| Total | 81,309,327.39 | 2,003,483,333.33 |
18. Investment real estate
Investment real estate using cost measurement model
| Item | Houses and buildings | Total |
| I. Total of original carrying amount | ||
| 1. Beginning balance | 706,658,435.30 | 706,658,435.30 |
| 2. Increased amount in current period | 67,357,852.46 | 67,357,852.46 |
| Including: Transfer-in from construction in progress | 3,856,543.64 | 3,856,543.64 |
| Business combination increase | 63,501,308.82 | 63,501,308.82 |
| 3. Amount decreased in the current period | ||
| 4. Ending balance | 774,016,287.76 | 774,016,287.76 |
| II. Accumulated depreciation and accumulated amortization | ||
| 1. Beginning balance | 243,237,573.91 | 243,237,573.91 |
| 2. Increased amount in current period | 75,923,891.22 | 75,923,891.22 |
| Item | Houses and buildings | Total |
| Including: appropriation or amortization | 42,857,231.40 | 42,857,231.40 |
| Business combination increase | 33,066,659.82 | 33,066,659.82 |
| 3. Amount decreased in the current period | ||
| 4. Ending balance | 319,161,465.13 | 319,161,465.13 |
| III. Provision for impairment | ||
| IV. Carrying amount | ||
| 1. Book value at the end of the period | 454,854,822.63 | 454,854,822.63 |
| 2. Book value at the beginning of the period | 463,420,861.39 | 463,420,861.39 |
[Note] As of December 31, 2021, the book value of investment real estate - houses and buildings of which theCompany has not obtained the property ownership certificates was RMB 46,525,035.59.
19. Fixed assets
| Item | Balance at the end of the period | Beginning balance |
| Fixed assets [Note] | 31,183,285,286.03 | 18,983,485,128.88 |
| Fixed assets in liquidation | 5,440,856.96 | 7,039,959.06 |
| Total | 31,188,726,142.99 | 18,990,525,087.94 |
[Note] The fixed assets in the table above refer to the fixed assets after deduction of the fixed assets in liquidation.
(1) Information of fixed assets
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipment | Total |
| I. Total of original carrying amount: | ||||||
| 1. Beginning balance | 17,304,790,191.65 | 16,739,570,987.42 | 1,168,546,991.86 | 1,696,626,020.86 | 502,623,927.59 | 37,412,158,119.38 |
| 2. Increased amount in current period | 9,710,894,812.73 | 8,246,492,826.56 | 180,145,760.74 | 450,112,870.37 | 280,075,404.66 | 18,867,721,675.06 |
| Including: (1) Purchase | 4,453,637.33 | 929,053,433.28 | 62,106,561.69 | 287,036,850.51 | 83,056,784.42 | 1,365,707,267.23 |
| (2) Transfer-in from construction in progress | 3,977,111,042.23 | 460,072,431.30 | 4,437,183,473.53 | |||
| (3) Increase by business combination | 5,729,330,133.17 | 6,857,366,961.98 | 118,039,199.05 | 163,076,019.86 | 197,018,620.24 | 13,064,830,934.30 |
| 3. Decreased amount in current period | 130,197,050.73 | 19,918,270.13 | 18,282,517.97 | 8,397,536.00 | 176,795,374.83 | |
| Including: Disposal or scrapping | 130,197,050.73 | 19,918,270.13 | 18,282,517.97 | 8,397,536.00 | 176,795,374.83 | |
| 4. Difference arising from translation of financial statements in foreign currency | -9,510,888.19 | -4,391,313.92 | -195,041.33 | -262,606.71 | -167,273.80 | -14,527,123.95 |
| 5. Ending balance | 27,006,174,116.19 | 24,851,475,449.33 | 1,328,579,441.14 | 2,128,193,766.55 | 774,134,522.45 | 56,088,557,295.66 |
| II. Accumulated depreciation | ||||||
| 1. Beginning balance | 5,471,702,676.23 | 10,176,319,528.39 | 862,969,705.20 | 1,522,777,567.14 | 378,141,308.28 | 18,411,910,785.24 |
| 2. Increased amount in current period | 1,971,102,824.69 | 3,835,185,358.72 | 240,475,124.77 | 351,525,719.45 | 218,242,927.57 | 6,616,531,955.20 |
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment | Other equipment | Total |
| Including: (1) Appropriation | 1,021,472,481.42 | 1,903,203,855.74 | 156,246,465.72 | 235,321,835.34 | 87,378,510.22 | 3,403,623,148.44 |
| (2) Business combination increased | 949,630,343.27 | 1,931,981,502.98 | 84,228,659.05 | 116,203,884.11 | 130,864,417.35 | 3,212,908,806.76 |
| 3. Decreased amount in current period | 96,268,974.60 | 18,383,962.97 | 16,965,952.05 | 4,983,671.65 | 136,602,561.27 | |
| Including: Disposal or scrapping | 96,268,974.60 | 18,383,962.97 | 16,965,952.05 | 4,983,671.65 | 136,602,561.27 | |
| 4. Difference arising from translation of financial statements in foreign currency | -600,096.15 | -2,168,714.12 | -124,183.41 | -133,129.70 | -78,543.50 | -3,104,666.88 |
| 5. Ending balance | 7,442,205,404.77 | 13,913,067,198.39 | 1,084,936,683.59 | 1,857,204,204.84 | 591,322,020.70 | 24,888,735,512.29 |
| III. Provision for impairment | ||||||
| 1. Beginning balance | 13,788,472.27 | 2,694,962.53 | 8,282.39 | 131,160.63 | 139,327.44 | 16,762,205.26 |
| 2. Increased amount in current period | ||||||
| 3. Decreased amount in current period | 34,136.43 | 8,282.39 | 95,587.13 | - | 138,005.95 | |
| Including: Disposal or scrapping | 34,136.43 | 8,282.39 | 95,587.13 | - | 138,005.95 | |
| 4. Difference arising from translation of financial statements in foreign currency | -87,701.97 | -87,701.97 | ||||
| 5. Ending balance | 13,788,472.27 | 2,573,124.13 | 35,573.50 | 139,327.44 | 16,536,497.34 | |
| IV. Carrying amount | ||||||
| 1. Ending book value | 19,550,180,239.15 | 10,935,835,126.81 | 243,642,757.55 | 270,953,988.21 | 182,673,174.31 | 31,183,285,286.03 |
| 2. Beginning book value | 11,819,299,043.15 | 6,560,556,496.50 | 305,569,004.27 | 173,717,293.09 | 124,343,291.87 | 18,983,485,128.88 |
[Note] As of December 31, 2021, the book value of fixed assets - houses and buildings that the Company has not obtained the property ownership certificates was RMB10,961,925,644.13.
(2) Information of temporary idle fixed assets
No.
(3) Information of fixed assets leased out through operating leases
No.
(4) Fixed assets in liquidation
| Item | Balance at the end of the period | Beginning balance |
| Fixed assets in liquidation | 5,440,856.96 | 7,039,959.06 |
| Total | 5,440,856.96 | 7,039,959.06 |
20. Construction in progress
| Item | Balance at the end of the period | Beginning balance |
| Construction in Progress [Note] | 6,481,236,333.38 | 4,016,082,730.07 |
| Total | 6,481,236,333.38 | 4,016,082,730.07 |
[Note] The construction in progress in the above table refers to the construction in progress after deduction ofengineering materials.
(1) Construction in Progress
| Item | Balance at the end of the period | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Gree Altairnano Project | 2,267,183,174.63 | 54,413.75 | 2,267,128,760.88 | |||
| Gree HQ project | 907,483,903.01 | 907,483,903.01 | 570,077,306.55 | 570,077,306.55 | ||
| Gree Gaolan Port Project | 661,759,431.04 | 661,759,431.04 | 62,939,878.48 | 62,939,878.48 | ||
| Gree Nanjing Project | 579,446,466.90 | 579,446,466.90 | 1,141,086,342.69 | 1,141,086,342.69 | ||
| Gree Chengdu Project | 419,085,010.72 | 419,085,010.72 | 260,766,823.26 | 260,766,823.26 | ||
| Intelligent Equipment Project | 293,302,450.67 | 293,302,450.67 | 2,003,175.80 | 2,003,175.80 | ||
| Gree Energy Project | 258,133,665.03 | 258,133,665.03 | 150,133,461.00 | 150,133,461.00 | ||
| Gree Ganzhou Project | 244,948,297.47 | 244,948,297.47 | ||||
| Gree Luoyang Project | 192,443,288.72 | 192,443,288.72 | 1,046,021,393.89 | 1,046,021,393.89 | ||
| Zhuhai Green Prevention and Control Project | 115,158,283.10 | 115,158,283.10 | 23,108,375.54 | 23,108,375.54 | ||
| Others | 542,346,775.84 | 542,346,775.84 | 759,945,972.86 | 759,945,972.86 | ||
| Item | Balance at the end of the period | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Total | 6,481,290,747.13 | 54,413.75 | 6,481,236,333.38 | 4,016,082,730.07 | 4,016,082,730.07 | |
(2) Current-period changes in important construction projects in progress
| Item Name | Beginning balance | Increase in the scope of the combination in this period | Increased amount in the current period | Amount transferred into fixed assets during the current period | Transfer to investment real estate in this period | Balance at the end of the period | Including: Amount of capitalization of interests for the current period |
| Gree Altairnano Project | 2,341,162,945.24 | 49,560,244.17 | 123,540,014.78 | 2,267,183,174.63 | |||
| Gree HQ project | 570,077,306.55 | 458,200,283.61 | 120,793,687.15 | 907,483,903.01 | |||
| Gree Gaolan Port Project | 62,939,878.48 | 598,819,552.56 | 661,759,431.04 | ||||
| Gree Nanjing Project | 1,141,086,342.69 | 736,808,586.56 | 1,298,448,462.35 | 579,446,466.90 | 53,871,154.40 | ||
| Gree Chengdu Project | 260,766,823.26 | 379,308,256.58 | 220,990,069.12 | 419,085,010.72 | 5,778,289.15 | ||
| Intelligent Equipment Project | 2,003,175.80 | 291,442,864.61 | 143,589.74 | 293,302,450.67 | |||
| Gree Energy Project | 150,133,461.00 | 108,000,204.03 | 258,133,665.03 | ||||
| Gree Ganzhou Project | 244,948,297.47 | 244,948,297.47 | |||||
| Gree Luoyang Project | 1,046,021,393.89 | 764,232,702.64 | 1,617,810,807.81 | 192,443,288.72 | |||
| Zhuhai Green Prevention and Control Project | 23,108,375.54 | 92,049,907.56 | 115,158,283.10 | ||||
| Others | 759,945,972.86 | 841,714,189.20 | 1,055,456,842.58 | 3,856,543.64 | 542,346,775.84 | 8,880,935.92 | |
| Total | 4,016,082,730.07 | 2,341,162,945.24 | 4,565,085,088.99 | 4,437,183,473.53 | 3,856,543.64 | 6,481,290,747.13 | 68,530,379.47 |
(3) Appropriation of provisions for impairment of construction in progress during the current period
| Item | Beginning balance | Increase in the current year | Decrease in the current year | Balance at the end of the period | Reason for amount calculated and withdrawn |
| Gree Altairnano Project | 54,413.75 | 54,413.75 | |||
| Total | 54,413.75 | 54,413.75 |
21. Usufruct assets
| Item | Housing and buildings | Machinery equipment | Total |
| I. Total of original carrying amount | |||
| 1. Beginning balance | 32,338,241.97 | 6,613,861.31 | 38,952,103.28 |
| 2. Increased amount in current period | 5,307,937.09 | 5,307,937.09 | |
| Including: renting | 5,307,937.09 | 5,307,937.09 | |
| 3. Decreased amount in current period | |||
| 4. Ending balance | 37,646,179.06 | 6,613,861.31 | 44,260,040.37 |
| II. Accumulated depreciation | |||
| 1. Beginning balance | |||
| 2. Increased amount in current period | 25,532,820.33 | 4,123,937.05 | 29,656,757.38 |
| Including: appropriation | 25,532,820.33 | 4,123,937.05 | 29,656,757.38 |
| 3. Amount decreased in the current period | |||
| 4. Ending balance | 25,532,820.33 | 4,123,937.05 | 29,656,757.38 |
| III. Provision for impairment | |||
| IV. Carrying amount | |||
| 1. Book value at the end of the period | 12,113,358.73 | 2,489,924.26 | 14,603,282.99 |
| 2. Book value at the beginning of the period | 32,338,241.97 | 6,613,861.31 | 38,952,103.28 |
22. Intangible assets
Information of intangible assets
| Item | Land use rights | Patent rights and others | Total |
| I. Total of original carrying amount | |||
| 1. Beginning balance | 6,579,859,889.53 | 910,035,623.63 | 7,489,895,513.16 |
| 2. Increased amount in current period | 4,054,952,283.34 | 985,780,299.92 | 5,040,732,583.26 |
| Including: purchase | 1,136,180,177.63 | 13,024,545.35 | 1,149,204,722.98 |
| Business combination increase | 2,918,772,105.71 | 972,755,754.57 | 3,891,527,860.28 |
| Item | Land use rights | Patent rights and others | Total |
| 3. Amount decreased in the current period | 22,373,120.00 | 22,373,120.00 | |
| Including: writing off [Note 1] | 22,373,120.00 | 22,373,120.00 | |
| 4. Ending balance | 10,634,812,172.87 | 1,873,442,803.55 | 12,508,254,976.42 |
| II. Accumulated amortization | |||
| 1. Beginning balance | 811,406,456.89 | 76,470,097.45 | 887,876,554.34 |
| 2. Increased amount in current period | 395,290,707.77 | 628,182,641.55 | 1,023,473,349.32 |
| Including: appropriation | 161,076,502.06 | 48,999,518.21 | 210,076,020.27 |
| Business combination increase | 234,214,205.71 | 579,183,123.34 | 813,397,329.05 |
| 3. Amount decreased in the current period | 22,373,120.00 | 22,373,120.00 | |
| Including: writing off | 22,373,120.00 | 22,373,120.00 | |
| 4. Ending balance | 1,206,697,164.66 | 682,279,619.00 | 1,888,976,783.66 |
| III. Provision for impairment | |||
| 1. Beginning balance | 723,730,196.18 | 723,730,196.18 | |
| 2. Increased amount in current period | |||
| 3. Amount decreased in the current period | 21,419,211.52 | 21,419,211.52 | |
| Including: writing off | 21,419,211.52 | 21,419,211.52 | |
| 4. Ending balance | 702,310,984.66 | 702,310,984.66 | |
| IV. Carrying amount | |||
| 1. Book value at the end of the period | 9,428,115,008.21 | 488,852,199.89 | 9,916,967,208.10 |
| 2. Book value at the beginning of the period | 5,768,453,432.64 | 109,835,330.00 | 5,878,288,762.64 |
[Note 1] Write-off amounts of intangible assets - patented technology and others in the current period were theused quota licensing rights;[Note 2] As of December 31, 2021, the book value of intangible assets of which the Company has not obtainedthe property ownership certificates was RMB 32,599.95.[Note 3] There were no intangible assets formed through the Company's internal research and developmentduring the current period.
23. Goodwill
(1) Original carrying amount of goodwill
| Name of invested entity or matter generating goodwill | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Formed by business combination | Disposal | |||
| Hefei Kinghome Electrics Co., Ltd | 51,804,350.47 | 51,804,350.47 | ||
| Nanjing Walsin Nonferrous Metal Co., Ltd. | 274,115,040.11 | 274,115,040.11 | ||
| Gree Altairnano New Energy Inc. | 612,777,583.92 | 612,777,583.92 | ||
| Total | 325,919,390.58 | 612,777,583.92 | 938,696,974.50 |
[Note] On August 31, 2021, the Company obtained 336,197,406 shares of Zhuhai Yinlong New Energy Co., Ltd.(hereinafter referred to as "Yinlong New Energy") through participating in the public auction of judicial sale,accounting for 30.47% equity of Yinlong New Energy. At the same time, Ms. Dong Mingzhu, chairman of theCompany, entrusted 17.46% of the voting rights corresponding to 192,672,001 shares of Yinlong New Energy to theCompany for exercising. The Company controls the voting rights corresponding to 528,869,407 shares of YinlongNew Energy in total, accounting for 47.93% of the total share capital of Yinlong New Energy. Yinlong New Energybecame the Company's holding subsidiary. On November 9, 2021, Yinlong New Energy was renamed GreeAltairnano New Energy Inc. (hereinafter referred to as "Gree Altairnano New Energy").As of the purchase date on October 31, 2021, the fair value of the recognizable net assets attributable to theowner of the parent company was 1,215,497,529.64 yuan. The fair value of the corresponding recognizable net assetswas evaluated by China United Assets Appraisal Group Co., Ltd., and China United Appraisal Report Zi [2022] No.1362 Appraisal Report was issued. The difference between the acquisition cost of 1,828,275,113.56 yuan and the fairvalue of Gree Altairnano New Energy's recognizable net assets formed a goodwill of 612,777,583.92 yuan.
(2) Goodwill impairment provision of Nanjing Walsin Nonferrous Metal Co., Ltd.
| Name of invested entity or matter generating goodwill | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period | ||
| Appropriation | Others | Disposal | Others | |||
| Nanjing Walsin Nonferrous Metal Co., Ltd. | 124,016,686.56 | 107,051,151.70 | 231,067,838.26 | |||
| Total | 124,016,686.56 | 107,051,151.70 | 231,067,838.26 | |||
[Note] The Company acquired 94.30% of the equity of Nanjing Walsin Nonferrous Metal Co., Ltd., forming agoodwill of RMB 274,115,040.11. According to the Appraisal Report on the Asset Group Recoverable AmountEvaluation Project Related to Goodwill Involved by Zhuhai Gree Electrical Co., Ltd. for the Goodwill ImpairmentTest Due to Merger and Acquisition of Nanjing Walsin Nonferrous Metal Co., Ltd. with the report number of ChinaAlliance Appraisal Report Zi [2022] No. 040218 issued by China Alliance Appraisal Co., Ltd., RMB 107,051,151.70of impairment provision was accrued for the above-mentioned goodwill formed due to the acquisition in the currentperiod.
Goodwill asset group and impairment test
1) Information about the asset or asset group combination in which the goodwill is located
The Company tested the impairment of goodwill by combining the asset group related to goodwill that canbenefit from the synergistic effect of business combination. Because it was difficult to directly obtain the fair marketvalue of the asset group containing goodwill, the Company calculated the recoverable amount of the asset group by
using the method of predicting the present value of future cash flow. After comprehensively considering factors suchas production and operation activities management, monitoring methods, continuous use and disposal, the asset groupcontaining goodwill was finally determined. At the end of the period, the asset group where the goodwill was locatedwas consistent with the assets group determined when the goodwill was formed on the acquisition date, and itscomposition has not changed. The information on the asset group including goodwill was as follows:
Unit: 10,000 Yuan
| Serial No. | Name of asset | Book value of asset group |
| 1 | Fixed assets | 11,798.77 |
| 2 | Construction in progress | 736.71 |
| 3 | Intangible assets | 10,099.60 |
| 4 | Goodwill [Note] | 15,917.11 |
| Total | 38,552.19 |
[Note] The goodwill shown in the above table included the part attributable to minority shareholders.
2) Important assumptions and key parameters of goodwill impairment test:
A. Assumption of orderly transactions: orderly transactions refer to transactions where the relevant assets orliabilities have usual market activities during a period of time before the measurement date;B. Assumption of going concern: assumption of going concern refers to the assumption that the asset group willbe used normally and continuously according to the purpose and use method of the benchmark date, and there will beno unforeseen factors that will cause it to fail to continue operations, and the valuation method, parameters and basiswill be determined accordingly;
C. It is assumed that the Company has no major changes in the core management team, technical team, andmarketing team based on the existing management methods and levels, and no other human force majeure andunforeseen factors have a major adverse impact on the Company;
D. Given the Company's operation and production are mainly to earn processing profits, the fluctuation of rawmaterial prices does not have a substantial impact on the Company's operating profits, therefore, it is assumed that theraw material prices will remain unchanged in the coming years in the evaluation.
When conducting the asset impairment test, the Company estimated the expected return on investment ofproperty rights holders based on the analysis and calculation of selected and compared companies. After thecalculation, the pre-tax discount rate used in the impairment test was 12.30%.
3) Evaluation results of goodwill impairment test
Unit: 10,000 Yuan
| Company name | Book value of asset group | Recoverable amount of asset group | Goodwill impairment amount |
| Nanjing Walsin Nonferrous Metal Co., Ltd. | 38,552.19 | 27,200.00 | 11,352.19 |
[Note] According to the Appraisal Report on the Appraisal Report on the Asset Group Recoverable AmountEvaluation Project Related to Goodwill Involved by Zhuhai Gree Electrical Co., Ltd. for the Goodwill ImpairmentTest Due to Merger and Acquisition of Nanjing Walsin Nonferrous Metal Co., Ltd. with the report number of ChinaAlliance Appraisal Report Zi [2022] No. 040218 issued by China Alliance Appraisal Co., Ltd., the asset group
including goodwill should be provided with a goodwill impairment loss of RMB 113,521,900.00, of which thegoodwill impairment loss attributable to shareholders of the parent company should be RMB 107,051,151.70.
(3) Goodwill impairment preparation of Gree Altairnano New Energy Inc.
From Gree Altairnano New Energy's evaluation base date of October 31, 2021 to the balance sheet date ofDecember 31, 2021, the production and operation of the company has not changed significantly, the goodwillimpairment preparation was not accrued.
24. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
| Item | Balance at the end of the period | Beginning balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Assets depreciation reserves | 5,526,051,132.93 | 934,860,835.60 | 1,945,939,722.60 | 331,079,465.72 |
| Deductible loss | 6,783,704,724.84 | 1,426,651,977.24 | 929,716,127.83 | 200,650,142.61 |
| Accrued expenses | 70,642,488,124.58 | 10,603,767,691.88 | 70,734,519,794.58 | 10,612,752,964.88 |
| Employee pay payable | 1,342,012,620.97 | 207,941,829.63 | 1,138,661,981.04 | 177,276,992.60 |
| Assets amortization | 282,882,015.47 | 43,093,274.62 | 277,892,654.00 | 42,292,876.53 |
| Others | 2,866,665,758.43 | 445,534,163.71 | 1,051,311,939.85 | 186,239,758.68 |
| Total | 87,443,804,377.22 | 13,661,849,772.68 | 76,078,042,219.90 | 11,550,292,201.02 |
(2) Deferred income tax liabilities not offset
| Item | Balance at the end of the period | Beginning balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Fair value changes in derivative financial assets | 282,767,966.53 | 47,017,208.48 | 894,532,218.27 | 172,009,915.29 |
| Accrued interest | 3,671,369,000.39 | 696,523,997.54 | 2,595,212,306.29 | 481,753,397.01 |
| Assets amortization | 1,395,006,607.26 | 228,029,140.30 | 1,150,514,923.85 | 188,338,452.95 |
| Changes in fair value of other equity instrument investments | 5,788,793,612.15 | 868,319,041.82 | 3,360,535,396.59 | 504,080,309.49 |
| Appraisal and appreciation for consolidated assets of enterprises not under the same control | 2,005,971,524.03 | 320,359,752.22 | 274,949,344.47 | 63,085,772.95 |
| Others | 535,300,948.02 | 133,663,373.43 | 8,513,732.04 | 1,843,255.15 |
| Total | 13,679,209,658.38 | 2,293,912,513.79 | 8,284,257,921.51 | 1,411,111,102.84 |
(3) Details of deferred income tax assets which were not recognized
| Item | Balance at the end of the period | Beginning balance |
| Item | Balance at the end of the period | Beginning balance |
| Deductible temporary differences | 2,649,057,873.48 | 741,969,846.84 |
| Deductible loss | 1,999,613,109.29 | 202,245,092.25 |
| Total | 4,648,670,982.77 | 944,214,939.09 |
(4) The deductible losses of deferred income tax assets not recognized will become due in the following years
| Year | Amount at the end of the period | Amount at the beginning of the period |
| 2022 | 14,111,337.16 | |
| 2023 | 58,759,679.60 | 30,888,536.25 |
| 2024 | 37,615,022.30 | 196,543.53 |
| 2025 | 37,836,203.73 | 8,502,385.16 |
| 2026 | 73,328,698.01 | |
| Open-ended | 1,777,962,168.49 | 162,657,627.31 |
| Total | 1,999,613,109.29 | 202,245,092.25 |
25. Other non-current assets
| Item | Balance at the end of the period | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Advance payment for equipment | 319,558,426.19 | 319,558,426.19 | 642,531,256.64 | 642,531,256.64 | ||
| Prepaid project funds and deposit | 357,562,564.75 | 357,562,564.75 | 111,813,697.80 | 111,813,697.80 | ||
| Prepaid land-transferring fees and others | 39,127,688.96 | 39,127,688.96 | 33,773,076.96 | 33,773,076.96 | ||
| Total | 716,248,679.90 | 716,248,679.90 | 788,118,031.40 | 788,118,031.40 | ||
26. Short-term borrowings
(1) Classification of short-term borrowings
| Item | Balance at the end of the period | Beginning balance |
| Pledge loans | 12,624,147,777.77 | 10,050,000,000.00 |
| Mortgaged borrowings | 2,252,700,000.00 | 92,999,987.80 |
| Guaranteed loan | 58,000,000.00 | |
| Borrowing on credit | 12,586,183,086.85 | 9,991,044,455.36 |
| Subtotal | 27,463,030,864.62 | 20,192,044,443.16 |
| Accrued interest | 154,889,683.49 | 112,340,299.18 |
| Total | 27,617,920,548.11 | 20,304,384,742.34 |
(2) Short-term borrowings that have been overdue but not yet repaid
No.
27. Loans from other banks
| Item | Balance at the end of the period | Beginning balance |
| Credit lending | 300,000,000.00 | 300,000,000.00 |
| Accrued interest | 21,500.00 | 20,250.00 |
| Total | 300,021,500.00 | 300,020,250.00 |
28. Funds from financial assets sold for repurchase
| Item | Balance at the end of the period | Beginning balance |
| Bonds (pledge-style repurchase) | 746,564,041.09 | 475,033,835.62 |
| Total | 746,564,041.09 | 475,033,835.62 |
29. Deposits from customers and interbank
| Item | Balance at the end of the period | Beginning balance |
| Current deposits | 34,023,561.14 | 40,660,078.51 |
| Time deposits | 142,684,338.50 | 153,847,631.94 |
| Draft deposits | 60,763,500.00 | |
| Subtotal | 176,707,899.64 | 255,271,210.45 |
| Accrued interest | 5,974,006.10 | 5,735,497.79 |
| Total | 182,681,905.74 | 261,006,708.24 |
30. Notes payable
| Type | Balance at the end of the period | Beginning balance |
| Banker's acceptance bill | 40,737,984,514.42 | 21,416,071,950.32 |
| Trade acceptance draft | 6,000,000.00 | 11,000,000.00 |
| Total | 40,743,984,514.42 | 21,427,071,950.32 |
31. Accounts payable
(1) Listing of accounts payable
| Item | Balance at the end of the period | Beginning balance |
| Payment for goods and service charges | 33,845,824,271.75 | 30,675,053,443.18 |
| Others | 2,029,266,639.30 | 929,605,723.70 |
| Total | 35,875,090,911.05 | 31,604,659,166.88 |
(2) Important payables with account age exceeding 1 year
No.
32. Contract liabilities
| Item | Balance at the end of the period | Beginning balance |
| Loans | 15,505,499,178.75 | 11,678,180,424.65 |
| Total | 15,505,499,178.75 | 11,678,180,424.65 |
[Note] Contract liabilities are mainly the payment for goods of dealers received in advance.
33. Employee pay payable
(1) Presentation of employees' wages and salaries payable
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| I. Short-term wages and salaries | 3,362,509,189.13 | 9,694,087,979.57 | 9,595,005,228.57 | 3,461,591,940.13 |
| II. Separation benefits - defined contribution plan | 2,846,279.56 | 615,473,128.68 | 613,280,946.64 | 5,038,461.60 |
| Total | 3,365,355,468.69 | 10,309,561,108.25 | 10,208,286,175.21 | 3,466,630,401.73 |
(2) Listing of short-term wages and salaries
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| 1. Wages, bonuses, subsidies and allowances | 2,454,866,944.76 | 8,183,052,058.41 | 8,153,762,416.21 | 2,484,156,586.96 |
| 2. Employee welfares | 849,219,795.07 | 849,219,795.07 | ||
| 3. Social insurance premiums | 760,334.68 | 229,759,614.44 | 229,687,133.56 | 832,815.56 |
| Including: medical insurance premiums | 725,202.12 | 201,971,778.90 | 201,893,360.85 | 803,620.17 |
| Work-related injury insurance premiums | 14,221.87 | 13,183,884.99 | 13,169,857.67 | 28,249.19 |
| Maternity insurance premiums | 20,910.69 | 14,603,950.55 | 14,623,915.04 | 946.20 |
| 4. Housing accumulation funds | 1,503,063.69 | 190,249,506.59 | 189,153,654.03 | 2,598,916.25 |
| 5. Labor union expenditures and employee education funds | 905,378,846.00 | 241,807,005.06 | 173,182,229.70 | 974,003,621.36 |
| Total | 3,362,509,189.13 | 9,694,087,979.57 | 9,595,005,228.57 | 3,461,591,940.13 |
(3) Presentation of separation benefits - defined contribution plan
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| 1. Basic endowment insurance premiums | 2,515,822.87 | 593,679,622.25 | 592,311,212.16 | 3,884,232.96 |
| 2. Unemployment insurance premium | 330,456.69 | 21,793,506.43 | 20,969,734.48 | 1,154,228.64 |
| Total | 2,846,279.56 | 615,473,128.68 | 613,280,946.64 | 5,038,461.60 |
34. Taxes and dues payable
| Item | Balance at the end of the period | Beginning balance |
| Added-value tax | 1,015,503,640.35 | 1,188,975,420.12 |
| Business income tax | 961,029,463.82 | 785,653,809.28 |
| Others | 253,938,087.32 | 326,726,353.62 |
| Total | 2,230,471,191.49 | 2,301,355,583.02 |
35. Other payables
| Item | Balance at the end of the period | Beginning balance |
| Dividends payable | 2,367,112.94 | 6,986,645.96 |
| Other payables [Note 1] | 6,760,752,824.20 | 2,372,409,071.48 |
| Total | 6,763,119,937.14 | 2,379,395,717.44 |
[Note 1] Other payables in the table above refer to other payables after deduction of interest payable anddividends payable;[Note 2] The Company has no interest payable at the end and the beginning of the period.
(1) Other payables are presented by amount nature
| Item | Balance at the end of the period | Beginning balance |
| Intercourse funds | 3,018,271,527.82 | 1,527,670,503.18 |
| Margin and deposit | 1,010,801,182.18 | 844,738,568.30 |
| Enterprise borrowing and interest | 2,731,680,114.20 | |
| Total | 6,760,752,824.20 | 2,372,409,071.48 |
(2) Other important payables with account age exceeding 1 year
| Item | Balance at the end of the period | Cause of failing to repay or carry over |
| Unit 1 | 1,313,486,008.35 | Unsatisfied repayment conditions |
| Unit 2 | 455,928,100.00 | Unsatisfied repayment conditions |
| Total | 1,769,414,108.35 |
36. Non-current liabilities due within one year
| Item | Balance at the end of the period | Beginning balance |
| Long-term borrowing due within one year | 1,226,863,474.75 | |
| Long-term payable to be matured within one year | 16,958,747.82 | |
| Lease liability due within 1 year | 11,471,812.27 | 22,927,889.42 |
| Total | 1,255,294,034.84 | 22,927,889.42 |
37. Other current liabilities
| Item | Balance at the end of the period | Beginning balance |
| Repair cost | 1,913,804,227.53 | 1,893,012,124.81 |
| Sale's returned profit | 52,669,278,982.00 | 55,808,250,764.80 |
| Obligation to pay commercial papers which is not derecognized | 852,128,009.63 | 4,588,589,780.94 |
| Output tax to be wrote-off | 1,925,767,413.76 | 1,469,269,506.13 |
| Short-term bonds payable [Note] | 4,048,840,948.73 | |
| Others | 1,004,287,682.55 | 623,132,106.86 |
| Total | 62,414,107,264.20 | 64,382,254,283.54 |
[Note] The following is the change in short-term bonds payable of the Company in this period:
| Abbreviation of bonds | Face value | Issuing date | Bond duration | Amount issued | Beginning balance | Current issuance | Accrued interest at nominal value | Amortization of the premiums and discounts | Current payment | Balance at the end of the period |
| 21 Gree Electric Appliances SCP001 | 3,000,000,000.00 | January 21, 2021 | 35 days | 3,000,000,000.00 | 3,000,000,000.00 | 6,817,808.22 | 3,006,817,808.22 | |||
| 21 Gree Electric Appliances SCP002 | 3,000,000,000.00 | February 24, 2021 | 43 days | 3,000,000,000.00 | 3,000,000,000.00 | 8,482,191.78 | 3,008,482,191.78 | |||
| 21 Gree Electric Appliances SCP003 | 2,000,000,000.00 | March 19, 2021 | 96 days | 2,000,000,000.00 | 2,000,000,000.00 | 14,465,753.42 | 2,014,465,753.42 | |||
| 21 Gree Electric Appliances SCP004 | 4,000,000,000.00 | March 29, 2021 | 98 days | 4,000,000,000.00 | 4,000,000,000.00 | 28,997,260.27 | 4,028,997,260.27 | |||
| 21 Gree Electric Appliances SCP005 | 3,000,000,000.00 | April 16, 2021 | 44 days | 3,000,000,000.00 | 3,000,000,000.00 | 8,534,794.52 | 3,008,534,794.52 | |||
| 21 Gree Electric Appliances SCP006 | 3,000,000,000.00 | June 17, 2021 | 48 days | 3,000,000,000.00 | 3,000,000,000.00 | 9,271,232.88 | 3,009,271,232.88 | |||
| 21 Gree Electric Appliances SCP007 | 1,000,000,000.00 | June 17, 2021 | 169 days | 1,000,000,000.00 | 1,000,000,000.00 | 12,038,356.16 | 1,012,038,356.16 | |||
| 21 Gree Electric Appliances SCP008 | 2,000,000,000.00 | June 29, 2021 | 162 days | 2,000,000,000.00 | 2,000,000,000.00 | 23,079,452.05 | 2,023,079,452.05 | |||
| 21 Gree Electric Appliances SCP009 | 4,000,000,000.00 | July 9, 2021 | 177 days | 4,000,000,000.00 | 4,000,000,000.00 | 49,008,219.18 | -167,270.45 | 4,048,840,948.73 | ||
| Total | 25,000,000,000.00 | 25,000,000,000.00 | 25,000,000,000.00 | 160,695,068.48 | -167,270.45 | 21,111,686,849.30 | 4,048,840,948.73 |
38. Long-term borrowings
| Item | Balance at the end of the period | Beginning balance |
| Pledge loans | 133,082,315.96 | 142,481,242.20 |
| Mortgaged borrowings | 2,303,590,315.07 | 1,561,190,447.00 |
| Borrowing on credit | 7,726,847,919.32 | 152,752,584.38 |
| Subtotal | 10,163,520,550.35 | 1,856,424,273.58 |
| Accrued interest | 24,207,182.70 | 4,289,542.51 |
| Less: Long-term borrowing due within one year | 1,226,863,474.75 | |
| Total | 8,960,864,258.30 | 1,860,713,816.09 |
39. Lease liabilities
| Item | Balance at the end of the period | Beginning balance |
| Lease liabilities | 14,785,264.79 | 32,338,241.97 |
| Less: Lease liability due within 1 year | 11,471,812.27 | 22,927,889.42 |
| Total | 3,313,452.52 | 9,410,352.55 |
40. Long-term payables
| Item | Balance at the end of the period | Beginning balance |
| Financial liabilities formed after repurchase | 463,153,339.74 | |
| Less: Long-term payables due within 1 year | 16,958,747.82 | |
| Total | 446,194,591.92 |
41. Long-term payroll payable
(1) Table of long-term payroll payable
| Item | Balance at the end of the period | Beginning balance |
| Separation benefits - net liabilities of defined benefit plan | 164,408,471.00 | 149,859,788.00 |
| Total | 164,408,471.00 | 149,859,788.00 |
(2) Changes in the defined benefit plan
1) Present value of obligations under the defined benefit plan:
| Item | Amount for the current period | Amount for the previous period |
| I. Beginning balance | 149,859,788.00 | 141,021,228.00 |
| II. Defined benefit cost recorded in the current profits and losses | 7,930,751.00 | 7,441,863.00 |
| Item | Amount for the current period | Amount for the previous period |
| 1. Service cost of the current period | 2,611,662.00 | 2,312,128.00 |
| 2. Net interest | 5,141,391.00 | 4,837,059.00 |
| 3. Impact on new personnel | 177,698.00 | 292,676.00 |
| III. Cost of the defined benefit plan included in other comprehensive income | 12,391,783.00 | 6,851,653.00 |
| Including: actuarial gains (losses are listed with "-") | 12,391,783.00 | 6,851,653.00 |
| IV. Other changes | -5,773,851.00 | -5,454,956.00 |
| Including: paid benefits | -5,773,851.00 | -5,454,956.00 |
| V. Balance at the end of the period | 164,408,471.00 | 149,859,788.00 |
2) Net liabilities (net assets) of the defined benefit plan:
| Item | Amount for the current period | Amount for the previous period |
| I. Beginning balance | 149,859,788.00 | 141,021,228.00 |
| II. Defined benefit cost recorded in the current profits and losses | 7,930,751.00 | 7,441,863.00 |
| III. Cost of the defined benefit plan included in other comprehensive income | 12,391,783.00 | 6,851,653.00 |
| IV. Other changes | -5,773,851.00 | -5,454,956.00 |
| V. Balance at the end of the period | 164,408,471.00 | 149,859,788.00 |
(3) Contents and associated risks of the defined benefit plan, and its influences on the Company’s future cashflow, time and uncertainty:
1) Contents and associated risks of the defined benefit plan, and its influences on the Company’s futurecash flow, time and uncertainty:
The Company’s defined benefit plan is a supplementary post-retirement pension plan for some retirees, earlyretirees and serving officers after normal retirement. This defined benefit plan didn’t involve big amount, so it didn’tlead to significant influence on the future cash flow the Company.
2) Significant actuarial assumptions and sensitivity analysis results of the defined benefit plan
According to 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 the market yieldsof high-quality corporate bonds in the treasury bonds or active market that match the obligatory term and currency ofthe defined benefit plan on the balance sheet date; the annual growth rates and annual dismissal rates of all benefitsare based on the actual measurement data of the Company; the death rate is recognized by referring to the experiencelife table for insurance business of China Life Insurance (Group) Company.
(4) Quantitative sensitivity analysis of all the used major assumptions by the end of the Report Period:
| Sensitivity analysis of discount rate | Influence on the amount at the end of the period |
| Sensitivity analysis of discount rate | Influence on the amount at the end of the period |
| Influence on the present obligation value of defined welfare benefit by increase of one percentage point | -21,612,508.00 |
| Influence on the present obligation value of defined welfare benefit by decrease of one percentage point | 27,344,235.00 |
| Influence on the service cost by increase of one percentage point | -686,100.00 |
| Influence on the service cost by decrease of one percentage point | 730,522.00 |
42. Deferred Income
(1) Classification of deferred income
| Item | Beginning balance | Increase in the combination scope | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Government subsidies | 437,033,702.46 | 1,179,257,549.38 | 1,206,207,782.75 | 126,411,065.89 | 2,696,087,968.70 |
| Others | 6,804,690.12 | 238,761.04 | 6,565,929.08 | ||
| Total | 437,033,702.46 | 1,186,062,239.50 | 1,206,207,782.75 | 126,649,826.93 | 2,702,653,897.78 |
(2) Projects involved in government subsidies
| Item | Beginning balance | Increase in the combination scope | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| I. Government subsidies pertinent to incomes | 181,089,774.04 | 67,387,011.32 | 37,124,718.37 | 211,352,066.99 | |
| Including: environmental protection upgrade project | 2,656,866.22 | 24,833,400.00 | 2,196,632.83 | 25,293,633.39 | |
| Scientific research project of refrigerating field | 115,014,244.49 | 35,491,861.32 | 25,268,671.05 | 125,237,434.76 | |
| Others | 63,418,663.33 | 7,061,750.00 | 9,659,414.49 | 60,820,998.84 | |
| II. Government subsidies pertinent to assets | 255,943,928.42 | 1,179,257,549.38 | 1,138,820,771.43 | 89,286,347.52 | 2,484,735,901.71 |
| Including: environmental protection upgrade project | 13,707,325.37 | 14,759,808.25 | 2,038,753.26 | 26,428,380.36 | |
| Scientific research project of refrigerating field | 210,623,822.17 | 1,075,495,434.86 | 56,482,290.10 | 1,229,636,966.93 | |
| Energy vehicle project | 1,179,257,549.38 | 210,528.32 | 10,494,868.66 | 1,168,973,209.04 | |
| Others | 31,612,780.88 | 48,355,000.00 | 20,270,435.50 | 59,697,345.38 | |
| Total | 437,033,702.46 | 1,179,257,549.38 | 1,206,207,782.75 | 126,411,065.89 | 2,696,087,968.70 |
43. Capital stock
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Total number of stocks | 6,015,730,878.00 | 101,261,838.00 | 5,914,469,040.00 | |
| Total | 6,015,730,878.00 | 101,261,838.00 | 5,914,469,040.00 |
[Note] For the reasons for changes in the share capital in this period, please refer to Note V. 45 "Treasury stock" for details.
44. Capital reserves
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Capital stock premium | 26,979,063.83 | 26,979,063.83 | ||
| Other capital reserves | 94,871,216.85 | 31,002,910.71 | 125,874,127.56 | |
| Total | 121,850,280.68 | 31,002,910.71 | 26,979,063.83 | 125,874,127.56 |
[Note] For the reasons for changes in the capital reserve in this period, please refer to Note V. 45 "Treasury stock" for details.
45. Treasury stock
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Repurchase share | 5,182,273,853.90 | 22,963,072,582.09 | 8,565,700,202.56 | 19,579,646,233.43 |
| Total | 5,182,273,853.90 | 22,963,072,582.09 | 8,565,700,202.56 | 19,579,646,233.43 |
[Note 1] As of December 31, 2021, the Company has cumulatively repurchased 431,202,956 shares in thisperiod, of which 14,181,091 shares were repurchased in the first period, 101,261,838 were repurchased in the secondperiod, and 315,760,027 shares were repurchased in the third period, which was completed on September 9, 2021.Thethree-period repurchase funds totaled 21,819,537,788.45 yuan.The repurchased treasury stock accounts for 7.17% ofthe Company's total share capital at that time, all of which were stored in the Company's special securities account.During the storage period, the right to voting, profit distribution, provident fund converted into share capital,allotment of shares, pledge and other related rights are not enjoyed during the storage period.[Note 2] The repurchased 101,261,838 shares in the second period were canceled on November 9, 2021, with anamount of 6,000,083,145.56 yuan, reducing the Company's share capital of 101,261,838 yuan, the correspondingcapital stock premium by of 26,979,063.83 yuan, the statutory surplus reserve of 2,530,583,291.14 yuan,discretionary surplus reserve of 969,088,265.45 yuan, and undistributed profit of 2,372,170,687.14 yuan;[Note 3] On December 13, 2021, transferred 46,334,473 shares from the Company's special securities accountfor repurchase by the non-trading transfer method to Gree Electric Appliances, Inc. of Zhuhai - special account forthe first phase of the employee shareholding plan of 2,565,617,057.00 yuan, accounting for 0.78% of the Company'stotal share capital at that time, which reduced the undistributed profit of 1,422,082,263.36 yuan. At the same time, therecognition of stock repurchase obligations in this period increased the treasury stock of 1,143,534,793.64 yuan andthe apportion of stock ownership incentive - employee shareholding holding plan fees increased other capital reservesof 31,002,910.71 yuan.
46. Other comprehensive income
| Item | Beginning balance | Amount for the current period | Balance at the end of the period | |||||
| Amount incurred before income tax in the current period | Less: Amount recognized into other comprehensive income in previous period and transferred to the current profits and losses | Less: Amount included into other comprehensive income in the previous period and 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 which cannot be reclassified into profits and losses | 7,384,141,428.99 | 4,341,598,647.87 | 114,949,817.60 | 364,238,732.33 | 3,862,410,097.94 | 11,246,551,526.93 | ||
| Changes arising from remeasurement of the defined benefit plan | -51,014,494.00 | -12,391,783.00 | -12,391,783.00 | -63,406,277.00 | ||||
| Other comprehensive income which cannot be transferred to profit or loss under the equity method | 4,999,568,613.35 | 1,849,833,156.32 | 1,849,833,156.32 | 6,849,401,769.67 | ||||
| Changes in fair value of other equity instrument investments | 2,435,587,309.64 | 2,504,157,274.55 | 114,949,817.60 | 364,238,732.33 | 202,4968,724.62 | 4,460,556,034.26 | ||
| II. Other comprehensive income which will be reclassified into profits and losses in the future | 11,918,766.48 | -30,049,881.26 | 22,298,300.00 | 1,954,547.06 | -54,465,938.14 | 163,209.82 | -42,547,171.66 | |
| Other comprehensive income that can be transferred to profit or loss under the equity method | -685,328.00 | -208,819.44 | -476,508.56 | -208,819.44 | ||||
| Changes in fair value of other debt investments | -57,643,029.12 | -1,251,507.19 | 725,128.31 | -2,346,134.55 | 369,499.05 | -59,989,163.67 | ||
| Cash flow hedge reserve | 18,953,555.00 | 30,494,425.00 | 22,298,300.00 | 1,229,418.75 | 6,966,706.25 | 25,920,261.25 | ||
| Difference arising from translation of financial statements in foreign currency | 50,608,240.60 | -58,607,471.07 | -58,877,690.40 | 270,219.33 | -8,269,449.80 | |||
| Item | Beginning balance | Amount for the current period | Balance at the end of the period | |||||
| Amount incurred before income tax in the current period | Less: Amount recognized into other comprehensive income in previous period and transferred to the current profits and losses | Less: Amount included into other comprehensive income in the previous period and 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 | |||
| Total other comprehensive income | 7,396,060,195.47 | 4,311,548,766.61 | 22,298,300.00 | 114,949,817.60 | 366,193,279.39 | 3,807,944,159.80 | 163,209.82 | 11,204,004,355.27 |
47. Special reserve
| Item | Beginning balance | Increase within the combination scope | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Safe production expense | 21,259,298.20 | 2,404,215.46 | 1,259,667.40 | 22,403,846.26 | |
| Total | 21,259,298.20 | 2,404,215.46 | 1,259,667.40 | 22,403,846.26 |
48. Surplus reserve
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| Statutory surplus reserve | 2,530,583,291.14 | 1,983,727,107.74 | 2,530,583,291.14 | 1,983,727,107.74 |
| Discretionary surplus reserve | 969,088,265.45 | 969,088,265.45 | ||
| Total | 3,499,671,556.59 | 1,983,727,107.74 | 3,499,671,556.59 | 1,983,727,107.74 |
[Note 1] According to the regulations, the Company accrues the legal reserve at 10% of the net profits of the parent company in thisperiod;
[Note 2] For the reasons for decrease in the surplus public accumulation in this period, please refer to Note V. 45 "Treasury stock"for details.
49. General risk provisions
| Item | Beginning balance | Increase in the current period | Decrease for the current period | Balance at the end of the period |
| General risk provisions | 497,575,772.26 | 8,023,584.04 | 505,599,356.30 | |
| Total | 497,575,772.26 | 8,023,584.04 | 505,599,356.30 |
[Note] The subsidiaries of the financial enterprise under the Company withdraws general risk preparation with their respectiveannual net profits or risk assets at the end of the year according to the "Administrative Measures for the Accrual of Reserve Funds of theFinancial Enterprises" and other relevant provisions.
50. Undistributed profit
| Item | Amount for the current period | Amount for the previous period |
| Undistributed profit at the beginning of the period | 102,841,596,377.66 | 93,794,643,539.49 |
| Undistributed profit at the beginning of the period after adjustment | 102,841,596,377.66 | 93,794,643,539.49 |
| Add: Net profit attributable to owners of the parent company for the current period | 23,063,732,372.62 | 22,175,108,137.32 |
| Less: Withdrawal of statutory surplus reserves | 1,983,727,107.74 | |
| Appropriation of general risk provisions | 8,023,584.04 | 7,719,945.51 |
| Ordinary stock dividends payable [Notes 1] | 16,752,531,495.00 | 13,140,423,269.60 |
| Influence of share-based payment and share cancellation [Note 2] | 3,794,252,950.50 | |
| Add: Other comprehensive income carried forward to retained earnings | 108,429,387.17 | 19,987,915.96 |
| Undistributed profit at the end of the period | 103,475,223,000.17 | 102,841,596,377.66 |
[Note 1] According to the resolutions of the general meeting of shareholders on June 30, 2021, the Companydistributed cash dividends to all shareholders at a rate of RMB 30.00 (including tax) per 10 shares. Based on thededuction of repurchased shares (the Company has cumulatively repurchased a total of 431,553,713 shares) in thespecial account for repurchase from the Company's total share capitals of 6,015,730,878 shares, RMB16,752,531,495.00 of cash dividends were actually distributed.
[Note 2] For the influence of the Company's share-based payment and share cancellation in this period on theundistributed profits, please refer to Note V. 45 "Treasury stock" for details.
51. Operating revenues and operating costs
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 144,840,537,601.90 | 101,021,238,221.75 | 130,427,766,473.54 | 87,921,191,886.69 |
| Other business | 43,028,337,290.81 | 41,230,400,368.12 | 37,771,437,930.99 | 36,307,841,794.23 |
| Total | 187,868,874,892.71 | 142,251,638,589.87 | 168,199,204,404.53 | 124,229,033,680.92 |
Information related to the main business incomes:
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Classified by industry | ||||
| Manufacturing industry | 144,840,537,601.90 | 101,021,238,221.75 | 130,427,766,473.54 | 87,921,191,886.69 |
| Total | 144,840,537,601.90 | 101,021,238,221.75 | 130,427,766,473.54 | 87,921,191,886.69 |
| Classified by product type | ||||
| Including: air conditioner | 131,712,664,218.81 | 90,576,252,210.44 | 115,576,822,921.57 | 75,391,437,042.70 |
| Home appliances | 4,881,607,693.72 | 3,262,705,849.18 | 4,521,756,518.81 | 3,083,266,840.17 |
| Industrial products | 3,194,552,084.04 | 2,604,593,659.63 | 2,304,816,992.20 | 2,038,896,719.43 |
| Intelligent equipment | 857,741,120.95 | 606,116,653.12 | 600,778,785.76 | 425,337,854.62 |
| Green energy | 2,907,445,769.91 | 2,729,740,202.70 | 1,782,282,335.29 | 1,488,663,827.16 |
| Others | 1,286,526,714.47 | 1,241,829,646.68 | 5,641,308,919.91 | 5,493,589,602.61 |
| Total | 144,840,537,601.90 | 101,021,238,221.75 | 130,427,766,473.54 | 87,921,191,886.69 |
| Classified by region | ||||
| Including: sale in domestic market | 122,305,111,567.10 | 80,703,210,957.38 | 110,407,002,220.87 | 70,329,850,923.05 |
| Export sales | 22,535,426,034.80 | 20,318,027,264.37 | 20,020,764,252.67 | 17,591,340,963.64 |
| Total | 144,840,537,601.90 | 101,021,238,221.75 | 130,427,766,473.54 | 87,921,191,886.69 |
52. Interest incomes, interest expenditures
| Item | Amount for the current period | Amount for the previous period |
| Interest revenue | 1,785,060,001.28 | 2,295,972,686.55 |
| Including: interest revenue from deposits in other banks and central banks | 967,523,971.58 | 1,395,939,587.36 |
| Interest revenue from disbursement of loans and advances | 642,933,336.95 | 762,577,244.28 |
| Others | 174,602,692.75 | 137,455,854.91 |
| Interest expenses | 523,238,956.03 | 304,448,121.92 |
| Including: expenses from transactions with financial institutions | 492,270,450.54 | 290,237,534.52 |
| Others | 30,968,505.49 | 14,210,587.40 |
| Net interest revenue | 1,261,821,045.25 | 1,991,524,564.63 |
53. Taxes and surcharges
| Item | Amount for the current period | Amount for the previous period |
| Urban maintenance & construction tax | 192,741,080.66 | 181,452,425.09 |
| Educational surcharges | 140,987,749.25 | 136,118,810.46 |
| House property tax | 182,944,167.04 | 141,422,302.62 |
| Land use tax | 114,448,407.21 | 98,229,736.11 |
| Commodity circulation tax and industrial product tax of Brazil | 93,622,542.23 | 82,095,878.99 |
| Funds from processing of waste electric appliances | 189,225,358.89 | 203,651,307.67 |
| Others | 162,695,156.50 | 121,630,232.87 |
| Total | 1,076,664,461.78 | 964,600,693.81 |
54. Sales expense
| Item | Amount for the current period | Amount for the previous period |
| Sales expense | 11,581,735,617.31 | 13,043,241,798.27 |
| Total | 11,581,735,617.31 | 13,043,241,798.27 |
[Note] In 2021, the selling expenses mainly included the installation and maintenance cost, transportation andwarehousing fee and loading and unloading fee, and promotion fee, accounting for more than 80% of the total sellingexpenses.
55. Administrative expense
| Item | Amount for the current period | Amount for the previous period |
| Administrative expense | 4,051,241,003.05 | 3,603,782,803.64 |
| Total | 4,051,241,003.05 | 3,603,782,803.64 |
[Note] In 2021, the overhead expenses included the employees' wages and salaries, material consumption,depreciation and amortization, accounting for more than 80% of the total overhead expenses.
56. Research and development expenses
| Item | Amount for the current period | Amount for the previous period |
| Research and development expenses | 6,296,715,941.03 | 6,052,563,108.10 |
| Total | 6,296,715,941.03 | 6,052,563,108.10 |
[Note] In 2021, the R&D expenses included the employees' labor cost and direct investment cost, accounting formore than 80% of the total R&D expenses.
57. Financial expense
| Item | Amount for the current period | Amount for the previous period |
| Interest expense [Note 1] | 1,752,112,003.72 | 1,088,369,394.87 |
| Less: Interest income [Note 2] | 4,242,449,764.06 | 3,708,312,903.06 |
| Exchange gain and loss | 99,198,910.38 | 598,702,350.00 |
| Bank charges | 125,651,596.78 | 76,682,416.86 |
| Interest charges for defined welfare benefit obligations | 5,141,391.00 | 4,837,059.00 |
| Others | 143,865.00 | 2,217,022.26 |
| Total | -2,260,201,997.18 | -1,937,504,660.07 |
[Note 1] The above interest expenses included the long-term and short-term borrowing interest expenses and thenote discount interest expense immediately recognized upon the derecognition of notes;
[Note 2] Both the above interest income and the "Interest income, interest expenditure" in Note V. 52 werecapital gains.
58. Other incomes
(1) Classification of other incomes
| Sources of other incomes | Amount for the current period | Amount for the previous period | Amount recorded in non-recurring profit and loss of the current period |
| Government subsidies | 818,485,990.31 | 1,146,204,685.40 | 790,604,956.72 |
| Handling charge refund of individual income tax and others | 13,691,263.12 | 17,915,425.64 | 13,691,263.12 |
| Total | 832,177,253.43 | 1,164,120,111.04 | 804,296,219.84 |
(2) Government subsidies recorded in the profits and losses of current period
| Subsidy items | Amount for the current period | Amount for the previous period | Asset-related/income-related |
| Financial rewards | 268,054,381.05 | 450,465,248.34 | Pertinent to assets and incomes |
| Capital allowance for development projects | 157,603,446.43 | 137,091,175.26 | Pertinent to assets and incomes |
| Technological innovation subsidies income | 99,160,068.06 | 149,409,503.16 | Pertinent to assets and incomes |
| Human resources subsidy | 117,247,050.67 | 230,407,062.27 | Pertinent to incomes |
| Subsidy items | Amount for the current period | Amount for the previous period | Asset-related/income-related |
| Others | 176,421,044.10 | 178,831,696.37 | Pertinent to assets and incomes |
| Total | 818,485,990.31 | 1,146,204,685.40 |
59. Income from investment
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment income calculated by the equity method | 51,594,928.82 | 35,314,343.21 |
| Investment income from derivative financial instruments | 260,896,892.48 | 325,129,297.18 |
| Investment income recognized from trading financial assets | 35,466,278.80 | 213,050,762.46 |
| Others | 174,105,122.48 | 139,515,668.82 |
| Total | 522,063,222.58 | 713,010,071.67 |
60. Incomes from changes in fair value
| Sources of incomes from changes in fair value | Amount for the current period | Amount for the previous period |
| Trading financial assets and instruments | -2,542,451.16 | -19,994,874.52 |
| Derivative financial instruments | -70,951,646.94 | 245,563,316.57 |
| Others | 15,363,553.00 | -25,414,970.00 |
| Total | -58,130,545.10 | 200,153,472.05 |
61. Credit impairment losses
| Item | Amount for the current period | Amount for the previous period |
| Loss on bad debt | -179,275,078.48 | -41,209,742.51 |
| Impairment losses of loans and advances | 28,294,208.74 | 234,034,435.04 |
| Total | -150,980,869.74 | 192,824,692.53 |
62. Asset impairment loss
| Item | Amount for the current period | Amount for the previous period |
| Impairment losses of contract assets | -28,587,466.72 | -5,036,930.75 |
| Inventory falling price loss | -470,468,223.45 | -337,216,704.36 |
| Impairment losses of business reputation | -107,051,151.70 | -124,016,686.56 |
| Impairment losses on the construction in progress | -54,413.75 | |
| Total | -606,161,255.62 | -466,270,321.67 |
63. Income from disposal of assets
| Source of income from disposal of assets | Amount for the current period | Amount for the previous period |
| Source of income from disposal of assets | Amount for the current period | Amount for the previous period |
| Profit from disposal of non-current assets (losses indicated with "-") | 6,212,295.19 | 2,945,975.01 |
| Total | 6,212,295.19 | 2,945,975.01 |
64. Non-operating revenues
| Item | Amount for the current period | Amount for the previous period | Amount recorded in non-recurring profit and loss of the current period |
| Government subsidies not pertinent to operation | 83,322,120.02 | 223,314,876.04 | 83,322,120.02 |
| Net profit from destruction scrap of non-current assets | 737,924.23 | 414,312.82 | 737,924.23 |
| Including: Gains from disposal of fixed assets | 737,924.23 | 414,312.82 | 737,924.23 |
| Others | 70,261,732.62 | 63,431,533.11 | 70,261,732.62 |
| Total | 154,321,776.87 | 287,160,721.97 | 154,321,776.87 |
Government subsidies recorded in current profits or losses:
| Subsidy items | Amount for the current period | Amount for the previous period | Amount recorded in non-recurring profit and loss of the current period |
| Financial rewards | 83,289,185.02 | 223,268,715.18 | 83,289,185.02 |
| Others | 32,935.00 | 46,160.86 | 32,935.00 |
| Total | 83,322,120.02 | 223,314,876.04 | 83,322,120.02 |
65. Non-operating expenses
| Item | Amount for the current period | Amount for the previous period | Amount recorded in non-recurring profit and loss of the current period |
| Net loss from destruction scrap of non-current assets | 16,698,680.87 | 8,334,512.45 | 16,698,680.87 |
| Including: net losses from destruction scrap of fixed assets | 16,698,680.87 | 8,334,512.45 | 16,698,680.87 |
| Others | 11,750,889.43 | 13,406,618.43 | 11,750,889.43 |
| Total | 28,449,570.30 | 21,741,130.88 | 28,449,570.30 |
66. Income tax expenses
(1) Table of income tax expenses
| Item | Amount for the current period | Amount for the previous period |
| Income tax expenses of the current period | 3,952,404,363.46 | 2,745,896,993.46 |
| Deferred income tax expenses | 18,939,502.22 | 1,283,798,240.06 |
| Total | 3,971,343,865.68 | 4,029,695,233.52 |
(2) Adjustment process of accounting profits and income tax expenses
| Item | Amount for the current period |
| Total profits | 26,803,237,498.57 |
| Income tax expenses calculated by the statutory/applicable tax rate | 4,020,485,624.79 |
| Impact by different tax rates applicable to subsidiaries | 194,827,963.39 |
| Impact by non-deductible costs, expenses and losses | 56,839,496.07 |
| Impact by deductible temporary differences or deductible losses of deferred income tax assets not recognized in the current period | 234,302,496.48 |
| Others | -535,111,715.05 |
| Income tax expenses | 3,971,343,865.68 |
67. Items of cash flow statement
(1) Other cash received relating to operating activities
| Item | Amount for the current period | Amount for the previous period |
| Government subsidies | 1,975,966,016.65 | 1,521,419,832.12 |
| Interest revenue | 188,322,311.64 | 83,834,745.40 |
| Net decrease in bill pledge deposits and guarantee deposits | 377,056,472.79 | 1,833,792,536.95 |
| Margin, deposit and others | 1,397,356,516.94 | 1,259,280,898.85 |
| Total | 3,938,701,318.02 | 4,698,328,013.32 |
(2) Other cash payment related to operating activities
| Item | Amount for the current period | Amount for the previous period |
| Cash repayments for selling expenses | 9,807,177,220.69 | 13,357,256,381.18 |
| Cash repayments for overhead expenses and R&D expenses | 1,355,681,755.66 | 1,591,137,889.61 |
| Return of advance project funds | 166,827,066.61 | 73,050,795.30 |
| Others | 1,395,517,552.83 | 509,047,033.72 |
| Total | 12,725,203,595.79 | 15,530,492,099.81 |
(3) Other cash received relating to investing activities
| Item | Amount for the current period | Amount for the previous period |
| Receipts from forward foreign exchange settlement and purchasing | 2,659,865,473.92 | 342,260,149.12 |
| Net decrease in fixed deposit and others | 45,191,721,722.13 | 3,980,389,291.30 |
| Total | 47,851,587,196.05 | 4,322,649,440.42 |
(4) Other cash paid relating to investing activities
| Item | Amount for the current period | Amount for the previous period |
| Item | Amount for the current period | Amount for the previous period |
| Net increase in time deposits and payment for forward foreign exchange settlement and sales | 5,542,024,468.66 | |
| Others | 10,532,866.10 | |
| Total | 10,532,866.10 | 5,542,024,468.66 |
(5) Other cash paid relating to financing activities
| Item | Amount for the current period | Amount for the previous period |
| Received subscriptions for employee stock ownership plan | 1,143,534,793.64 | |
| Total | 1,143,534,793.64 |
(6) Other cash paid relating to financing activities
| Item | Amount for the current period | Amount for the previous period |
| Net increase in pledge margin on borrowings | 16,441,927,495.00 | 9,825,529,906.65 |
| Cash paid for repurchase of stocks | 21,819,537,788.45 | 5,182,273,853.90 |
| Others | 1,645,086,434.41 | 6,709,713.08 |
| Total | 39,906,551,717.86 | 15,014,513,473.63 |
68. Supplementary information about cash flow statement
(1) Supplementary information about cash flow statement
| Supplementary information | Amount in the current period | Amount in the previous period |
| 1. Convert net profit to cash flow from operating activities: | ||
| Net profit | 22,831,893,632.89 | 22,279,242,195.27 |
| Add: Assets depreciation reserves | 757,142,125.36 | 273,445,629.14 |
| Fixed asset depreciation, oil and gas assets accumulated depreciation, productive biological assets accumulated depreciation | 3,476,137,137.22 | 3,377,378,887.04 |
| Amortization of intangible assets | 168,287,721.43 | 211,327,446.74 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (incomes marked with “-”) | -6,212,295.19 | -2,945,975.01 |
| Loss from retirement of fixed assets (earnings are marked with "-") | 15,960,756.64 | 7,920,199.63 |
| Losses from changes in fair value (incomes marked with “-”) | 58,130,545.10 | -200,153,472.05 |
| Financial expenses (incomes marked with “-”) | -2,206,918,302.50 | -3,117,118,954.25 |
| Investment losses (earnings are marked with "-") | -522,063,222.58 | -713,010,071.67 |
| Decrease in deferred income tax assets (increase marked with “-”) | -201,498,429.60 | 993,661,744.02 |
| Increase in deferred income tax liabilities (decrease marked with “-”) | 220,437,931.82 | 290,136,496.04 |
| Decrease of inventories (increase marked with “-”) | -13,233,904,716.97 | -3,734,232,466.37 |
| Supplementary information | Amount in the current period | Amount in the previous period |
| Decrease in operating receivables (increase marked with “-”) | -2,983,553,411.83 | 15,242,828,006.57 |
| Increase in operating payables (decrease marked with “-”) | -7,479,006,628.48 | -18,480,942,047.82 |
| Others [Note] | 999,530,415.41 | 2,811,099,691.88 |
| Net cash flows from operating activities | 1,894,363,258.72 | 19,238,637,309.16 |
| 2. Major investing and financing activities not involving cash receipts and payment: | -- | |
| Conversion of debt into capital | ||
| Convertible bonds expiring within one year | ||
| Fixed assets acquired under finance leases | ||
| 3. Net changes in cash and cash equivalents: | -- | |
| Ending balance of cash | 29,951,743,758.00 | 24,225,049,638.15 |
| Less: Beginning balance of cash | 24,225,049,638.15 | 26,372,571,821.49 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 5,726,694,119.85 | -2,147,522,183.34 |
[Note] "Others" includes the decreased amount RMB 633,908,556.69 of statutory deposit reserve and the netdecreased amount RMB 365,621,858.72 of bill margin.
(2) Net cash paid for acquisition of subsidiaries in the current period
| Item | Amount |
| Cash or cash equivalent paid in the current period for business combination that occurred in the current period | 1,828,275,113.56 |
| Including: Bank deposits | 1,828,275,113.56 |
| Less: Cash and cash equivalents held by the subsidiary on the date of purchase | 80,938,709.57 |
| Net cash paid for acquisition of subsidiaries | 1,747,336,403.99 |
(3) Composition of cash and cash equivalents
| Item | Balance at the end of the period | Beginning balance |
| I. Monetary capital | 116,939,298,776.87 | 136,413,143,859.81 |
| Including: Cash on hand | 1,021,935.16 | 468,623.79 |
| Bank deposit for payment at any time | 7,036,671,283.79 | 7,302,375,145.99 |
| Other monetary capital for payment at any time | 282,159,290.47 | 395,860,332.07 |
| Deposits in the central bank available for payment at any time | 2,052,759.35 | 2,108,729.48 |
| Deposits in other banks available for payment at any time | 22,629,838,489.23 | 16,524,236,806.82 |
| Fixed deposits and accrued interest not in the category of cash and cash equivalents | 49,658,731,669.74 | 91,852,690,730.47 |
| Deposits with restricted use | 37,328,823,349.13 | 20,335,403,491.19 |
| II. Cash equivalents | ||
| III. Balance of monetary funds and cash equivalents at the end of the year | 116,939,298,776.87 | 136,413,143,859.81 |
| Less: Fixed deposits and accrued interest not in the category of cash and cash equivalents | 49,658,731,669.74 | 91,852,690,730.47 |
| Less: Deposits with restricted use | 37,328,823,349.13 | 20,335,403,491.19 |
| Including: Statutory deposit reserve | 1,403,981,413.43 | 2,037,889,970.12 |
| Bill, letter of credit and other deposits | 35,924,841,935.70 | 18,297,513,521.07 |
| VI. Ending balance of cash and cash equivalents | 29,951,743,758.00 | 24,225,049,638.15 |
69. Assets with restricted ownership or use rights
| Item | Book value at the end of the period | Restricted reason |
| Monetary funds | 37,328,823,349.13 | Statutory deposit reserve and deposits |
| Accounts receivable | 276,321,025.79 | Pledged |
| Receivable financing | 12,911,461,792.08 | Pledged |
| Contract assets | 422,560,112.06 | Pledged |
| Other current assets | 6,800,000,000.00 | Pledged |
| Non-current assets due within one year | 60,197,639.98 | Pledged |
| Other debt investments | 4,717,527,970.00 | Pledged |
| Other equity instruments investments | 8,938,973,543.22 | Restricted shares |
| Long-term equity investments | 312,711,807.79 | Pledged |
| Fixed assets | 847,908,771.37 | Pledged |
| Construction in progress | 225,701,846.53 | Pledged |
| Intangible assets | 947,343,396.76 | Pledged |
| Other non-current assets | 44,163,315.00 | Pledged |
| Total | 73,833,694,569.71 |
70. Monetary items of foreign currencies
(1) Monetary items of foreign currencies
| Item | USD Converted into RMB | BRL Converted into RMB | Pounds Converted into RMB | HKD Converted into RMB | Euro Converted into RMB | Other currencies Converted into RMB | Total Converted into RMB |
| Exchange rate as of December 31, 2021 | 6.3757 | 1.1436 | 8.6064 | 0.8176 | 7.2197 | Not Applicable | Not Applicable |
| Monetary assets of foreign currency | 9,492,070,463.82 | 806,164,007.51 | 173,373,191.16 | 44,135,425.85 | 25,148,047.82 | 279,730.59 | 10,541,170,866.75 |
| Monetary funds | 6,449,482,697.58 | 227,528,885.95 | 8,164,571.28 | 1,805,651.37 | 42,484.88 | 6,687,024,291.06 | |
| Accounts receivable | 3,038,709,912.61 | 578,403,260.59 | 173,295,647.50 | 35,619,564.10 | 23,279,901.21 | 237,245.71 | 3,849,545,531.72 |
| Contract assets | 3,383,169.57 | 3,383,169.57 | |||||
| Other receivables | 494,684.06 | 231,860.97 | 77,543.66 | 351,290.47 | 62,495.24 | 1,217,874.40 | |
| Monetary liabilities of foreign currency | 4,730,180,826.38 | 33,430,777.93 | 20,305,305.31 | 79,517,507.35 | 28,279,931.74 | 4,891,714,348.71 | |
| Short-term borrowings | 4,178,592,622.67 | 4,178,592,622.67 | |||||
| Accounts payable | 277,410,941.36 | 31,466,447.77 | 20,192,476.51 | 4,331,820.00 | 28,256,476.40 | 361,658,162.04 | |
| Other payables | 176,789,758.72 | 1,964,330.16 | 112,828.80 | 6,730,436.09 | 23,455.34 | 185,620,809.11 | |
| Non-current liabilities due within one year | 66,581,853.64 | 68,455,251.26 | 135,037,104.90 | ||||
| Other current liabilities | 30,805,649.99 | 30,805,649.99 |
(2) Description of overseas operating entities
No.
Ⅵ Change in the consolidation scope
1. Business combinations not under common control
(1) Business combination involving enterprises not under common control in the current period
| Name of the Purchased Party | Point of acquisition of equity | Equity acquisition cost | Equity acquisition proportion | Equity acquisition method | Acquisition date | Basis for determining the acquisition date | Operating revenue from the acquisition date to statement date | Net profit from the acquisition date to statement date |
| Gree Altairnano New Energy Inc. | October 31, 2021 | 1,828,275,113.56 | 30.47% | Purchase in cash | October 31, 2021 | Acquisition of control | 694,344,061.76 | -416,767,701.45 |
(2) Combination cost and goodwill
| Cost of business combination | Amount |
| Cost of business combination | 1,828,275,113.56 |
| Less: fair value share of the identifiable net assets acquired | 1,215,497,529.64 |
| Amount of goodwill/combination cost less than the share of fair value of identifiable net asset acquired | 612,777,583.92 |
[Note 1] As described in Remark V-23 "Goodwill", GREE Titanium New Energy became a holding subsidiaryof the Company on October 31, 2021.
[Note 2] As of the acquisition date October 31, 2021, the fair value of the identifiable net assets attributable tothe owners of the parent company of Gree Altairnano New Energy was 1,215,497,529.64 yuan, and the fair value ofthe corresponding identifiable net assets was appraised by China United Assets Appraisal Group Limited, whichissued appraisal report ZLPBZ [2022] No. 1362.
(3) Identifiable assets and liabilities of the acquired party on the date of purchase
| Item | Gree Altairnano New Energy Inc. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Assets: | ||
| Monetary funds | 1,646,843,953.97 | 1,646,843,953.97 |
| Trading financial liabilities | 10,000.00 | 10,000.00 |
| Accounts receivable | 2,779,548,017.55 | 2,779,548,017.55 |
| Advance payments | 215,800,208.73 | 215,800,208.73 |
| Other receivables | 234,176,292.67 | 234,176,292.67 |
| Inventory | 2,135,766,221.72 | 2,135,766,221.72 |
| Contract assets | 996,806,636.13 | 996,806,636.13 |
| Non-current assets due within one year | 2,810,789.73 | 2,810,789.73 |
| Other current assets | 856,356,937.01 | 856,356,937.01 |
| Item | Gree Altairnano New Energy Inc. | |
| Fair value on the acquisition date | Book value on the acquisition date | |
| Long-term receivables | 3,014,657.86 | 3,014,657.86 |
| Long-term equity investments | 390,685,789.09 | 535,849,709.81 |
| Other equity instruments investments | 2,170,000.00 | 2,170,000.00 |
| Investment real estate | 30,434,649.00 | 6,404,970.97 |
| Fixed assets | 9,851,922,127.54 | 8,874,157,430.70 |
| Construction in progress | 2,341,162,945.24 | 2,301,429,874.64 |
| Intangible assets | 3,078,130,531.23 | 2,103,825,250.26 |
| Long-term unamortized expenses | 18,801,886.89 | 18,801,886.89 |
| Deferred income tax assets | 1,906,423,128.64 | 1,906,423,128.64 |
| Other non-current assets | 277,326,714.43 | 277,326,714.43 |
| Subtotal of assets | 26,768,191,487.43 | 24,897,522,681.71 |
| Liabilities: | ||
| Short-term borrowings | 2,202,310,244.21 | 2,202,310,244.21 |
| Notes payable | 1,382,825,460.48 | 1,382,825,460.48 |
| Accounts payable | 4,860,305,562.25 | 4,860,305,562.25 |
| Contract liabilities | 5,024,137,616.68 | 5,024,137,616.68 |
| Employee pay payable | 49,442,281.69 | 49,442,281.69 |
| Taxes and dues payable | 46,366,595.59 | 46,366,595.59 |
| Other payables | 4,233,517,352.93 | 4,233,517,352.93 |
| Non-current liabilities due within one year | 98,518,621.44 | 98,518,621.44 |
| Other current liabilities | 2,088,457,921.70 | 2,088,457,921.70 |
| Long-term borrowings | 850,000,000.00 | 850,000,000.00 |
| Long-term payables | 392,843,262.75 | 392,843,262.75 |
| Deferred Income | 1,186,062,239.50 | 1,186,062,239.50 |
| Deferred income tax liabilities | 13,873,952.69 | 13,873,952.69 |
| Subtotal of liabilities | 22,428,661,111.91 | 22,428,661,111.91 |
| Net assets | 4,339,530,375.52 | 2,468,861,569.80 |
(4) Profit or loss arising from the remeasurement of equity held before the purchase date at fair value
| Name of the Purchased Party | Book value of equity held before the acquisition date on the acquisition date | Fair value on the purchase date of share held before that date | Gains or losses on remeasurement of previously held equity interest to fair value before the acquisition date |
| Name of the Purchased Party | Book value of equity held before the acquisition date on the acquisition date | Fair value on the purchase date of share held before that date | Gains or losses on remeasurement of previously held equity interest to fair value before the acquisition date |
| Gree Altairnano New Energy Inc. | None | None | None |
(5) Method and main assumptions for determining the fair value on the date of purchase
1) Valuation determination method: The assets and liabilities were mainly evaluated using the asset-basedmethod and the income method.
1) Key assumptions in the evaluation process.
A. The appraised entity is capable of making timely adjustments and innovations in line with the development ofthe market and science and technology, while maintaining consistency in its business scope, business methods andmanagement mode.
B. Except for the fixed-asset investment on the evaluation benchmark date that there is definite evidenceshowing that the production capacity will change in the future, it is assumed that the evaluated unit will not carry outmajor fixed-asset investment activities that affect its operations in the future income period, and the productioncapacity of the enterprise is estimated according to the condition on the evaluation benchmark date;
C. It is assumed that in the future earnings period, the evaluated unit will maintain the turnover of accountsreceivable and accounts payable similar to the historical years, with no payment in arrears that is significantlydifferent from the historical years;
D. The assets and liabilities declared by the appraised entity are free from title disputes and other economicdisputes;
E. The appraised entity's future sources of funding and costs for R&D and production will not have a materialadverse impact on the enterprise.
2) Reasons for asset appreciation：
A. Machinery and equipment: the market price of some equipment increased and the depreciable life of the
enterprise's equipment was shorter than the economic life of the equipment;
B. Housings and buildings: there was a difference between the depreciable life and the actual economic life, andsome buildings were built a long period of time ago, resulting in an increase in replacement costs (labor,materials, etc.);
C. Land use rights: the time when the enterprise acquired the land is far from the benchmark date of theevaluation and the price was low, and the land price increased between the acquisition date and the currentvaluation benchmark date.
2. Business combination under common control
No.
3. Counterpurchase
No.
4. Disposal of subsidiaries
| Company name | Equity disposal price | Equity disposal proportion (%) | Equity disposal method | Time point of losing control | Basis for determining the point at which control is lost | The difference between the disposal price and the share of the subsidiary's net assets in the consolidated financial statements corresponding to the disposal investment. | Proportion of remaining equity on the date of losing control (%) | Book value of remaining equity on the date of losing control | Fair value of remaining equity 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. | Amount of other comprehensive income related to equity investment of the original company transferred into investment profit and loss. |
| SL Group Jiangwan Rice Industry Co., Ltd | 255,000.00 | 2.00 | Sale | August, 2021 | Share Transfer Agreement | 215,501.72 | 49.00 | 1,145,000.00 | 1,145,000.00 | Book value | None | |
| SL Group Lianhe Ecology Farm Co., Ltd | 21,000.00 | 21.00 | Sale | August, 2021 | Share Transfer Agreement | -50,939.54 | 49.00 | Book value | None | |||
| SL Group Yuan Agriculture Co., Ltd | 40.00 | Sale | September, 2021 | Industrial and commercial change registration | 2,291.72 | 30.00 | Book value | None | ||||
| SL Group Lvzhiyuan Agriculture Co., Ltd | 40.00 | Sale | September, 2021 | Industrial and commercial change registration | 142,792.55 | 30.00 | Book value | None | ||||
| SL Group Dongwei Rice Industry Co., Ltd | 21.00 | Sale | September, 2021 | Industrial and commercial change registration | 92,134.32 | 30.00 | Book value | None | ||||
| SL(Ningbo) Grain Sales Co., Ltd | 100.00 | Sale | September, 2021 | Industrial and commercial change registration | 23,927.91 | Book value | None |
5. Change of consolidation scope for other reasons
(1) Newly established entities for the current period
| Name | Date of establishment | Net assets at the end of the period | Net profit from the combination date to the end of the period |
| Zhuhai Gree Appliancesal and Mechanical Engineering (Linyi) Co., Ltd. | March 1, 2021 | 36,931,910.01 | 6,931,910.01 |
| Wuhu Gree Intelligent Logistics Co., Ltd | March 19, 2021 | ||
| Gree (Zhuhai Hengqin) GREE Development Co., Ltd. | April 25, 2021 | 998,450,036.83 | -1,549,963.17 |
| Gree Electric Appliances (Linyi) Co., Ltd. | May 6, 2021 | 194,574,519.31 | -5,425,480.69 |
| Jiangxi Jinrun Real Estate Co., Ltd | June 16, 2021 | 85,809,836.46 | -14,190,163.54 |
| Changsha Kinghome Electrics Co., Ltd | July 1, 2021 | 5,720,175.31 | -279,824.69 |
| Green Electricity New Material (Maanshan) Technology Co., Ltd. | September 7, 2021 | ||
| Wuhan Yuli Runzhu Real Estate Co., Ltd | September 26, 2021 | 6,723,663.82 | -276,336.18 |
| Huaxingaodao (Maanshan) Technology Co., Ltd. | October 12, 2021 | ||
| Zhuhai MinRoad Supply Chain Technology Co., Ltd | November 19, 2021 |
(2) Other decrease for the current period
The company cancelled its subsidiaries, SL Group Ermapao Eco-Farm Co., Ltd. and Handan YingDong NewEnergy Technology Co., Ltd.
Ⅶ Equity in other subjects
1. Equity in subsidiaries
(1) Composition of the enterprise group
| Serial No. | Name of subsidiary | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| 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 involving enterprises under common control | |
| 3 | Zhuhai Gree Electrical Co., Ltd | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises under common control | |
| 4 | Zhuhai Gree Xinyuan Electronics Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination involving enterprises 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 Electric Appliances Appliance (Hefei) 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 [Note 1] | Zhuhai City | Zhuhai City | Finance | 94.16 | 0.46 | 94.62 | Business combination involving enterprises 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. [Note 2] | Shanghai City | Shanghai City | Sales | 90.00 | 9.70 | 99.70 | Establishment |
| Serial No. | Name of subsidiary | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| 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 | Gree Green Refrigeration Technology Center Co., Ltd. of Zhuhai | 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 | Gree Green Renewable Resources (Zhengzhou) Co., Ltd. | Zhengzhou City | Zhengzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 18 | Hunan Green Resources Recycling Co., Ltd. | Ningxiang County | Ningxiang County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 19 | Wuhu Green Resources Recycling 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 Resources Recycling Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 23 | Gree (Wuhu) Electric Appliances Co., Ltd. | Shijiazhuang City | Shijiazhuang City | Industrial manufacture | 100.00 | 100.00 | Business combinations not under common control | |
| 24 | Tianjin Green Resources Recycling Co., Ltd. | Tianjin | Tianjin | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 25 | Zhuhai HVAC Equipment Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 26 | Zhuhai Gree TOSOT Life Electric Appliances Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| Serial No. | Name of subsidiary | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 27 | Zhuhai Ligao Precision Manufacturing Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 28 | Zhuhai IVP Information Technology Co., Ltd. | Zhuhai City | Zhuhai City | Information technologies | 100.00 | 100.00 | Establishment | |
| 29 | Changsha Gree HVAC Equipment Co., Ltd. | Changsha City | Changsha City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 30 | Gree TOSOT (Suqian) Home Appliances Co., Ltd. | Suqian City | Suqian City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 31 | Wuhu GREE Precision Manufacturing Co., Ltd. | Wuhu City | Wuhu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 32 | Zhuhai GREE Intelligent Equipment Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 33 | Zhuhai Hengqin Gree Commercial Factoring Co., Ltd. | Zhuhai City | Zhuhai City | Finance | 100.00 | 100.00 | Establishment | |
| 34 | Zhuhai Gree Precision Mold Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 35 | Gree (Wuhan) HVAC Equipment Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 36 | Zhuhai GREE Intelligent Equipment Technology Research Institute Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 37 | Zhuhai Gree New Material Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 38 | Gree (Wuhan) Precision Mold Co., Ltd. | Wuhan City | Wuhan City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 39 | Zhuhai Gree Energy Environment Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 40 | Gree (Hangzhou) Electric Appliances Co., Ltd. | Hangzhou City | Hangzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 41 | Zhuhai Gree Info Technology Co., Ltd. | Zhuhai City | Zhuhai City | Information technologies | 51.00 | 51.00 | Establishment | |
| 42 | Gree (Chengdu) HVAC Equipment Co., Ltd. | Chengdu City | Chengdu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| Serial No. | Name of subsidiary | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 43 | Zhuhai Gree CNC Machine Tool Research Institute Co., Ltd. | Zhuhai City | Zhuhai City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 44 | Gree (Wu'an) Precision Equipment Manufacturing Co., Ltd. | Wu'an County | Wu'an County | Industrial manufacture | 70.00 | 70.00 | Establishment | |
| 45 | Zhuhai Gree Transportation Co., Ltd. | Zhuhai City | Zhuhai City | Transportation | 100.00 | 100.00 | Establishment | |
| 46 | Gree (Luoyang) Robot Co., Ltd. | Luoyang City | Luoyang City | Technical research and development | 100.00 | 100.00 | Establishment | |
| 47 | Gree (Nanjing) Electric Appliances Co., Ltd. | Nanjing city | Nanjing city | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 48 | Gree (Luoyang) Electric Appliances Co., Ltd. | Luoyang City | Luoyang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 49 | Zhuhai Zero Boundary Integrated Circuit Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 50 | Zhuhai Lianyun Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 51 | Gree (Chengdu) Electric Appliances Co., Ltd. | Chengdu City | Chengdu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 52 | Zhuhai Gree Material Supply Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 53 | Zhuhai Gree Lvkong Technology Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 54 | Hefei Kinghome Electrics Co., Ltd | Hefei city | Hefei city | Industrial manufacture | 100.00 | 100.00 | Business combinations not under common control | |
| 55 | Zhuhai Gree Electormechanical Engineering Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Business combination under common control | |
| 56 | Gree (Chengdu) Precision Mold Co., Ltd. | Chengdu City | Chengdu City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 57 | Gree (Luoyang) Washing Machine Co., Ltd. | Luoyang City | Luoyang City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| Serial No. | Name of subsidiary | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Voting right percentage (%) | Acquisition mode | |
| Direct | Indirect | |||||||
| 58 | Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd [Note 3]. | Zhuhai City | Zhuhai City | Information technologies | 75.00 | 5.00 | 80.00 | Establishment |
| 59 | Gree (Anji) Precision Mold Co., Ltd. | Anji County | Anji County | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 60 | Gree Green Renewable Resources (Zhuhai) Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 61 | Gree E-commerce Co., Ltd. | Zhuhai City | Zhuhai City | Wholesales and retail trades | 100.00 | 100.00 | Establishment | |
| 62 | Zhuhai Gejian Medical Technology Co., Ltd. | Zhuhai City | Zhuhai City | Medical device | 100.00 | 100.00 | Establishment | |
| 63 | Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | Zhuhai City | Zhuhai City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 64 | Chengdu Gree Xinhui Medical Equipment Co., Ltd. [Note 4] | Chengdu City | Chengdu City | Medical device | 75.00 | 5.00 | 80.00 | Establishment |
| 65 | Songyuan Grain Group Co., Ltd. | Songyuan City | Songyuan City | Agriculture | 75.00 | 75.00 | Business combinations not under common control | |
| 66 | Gree (Ganzhou) Electric Appliances Co., Ltd. | Ganzhou City | Ganzhou City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 67 | Tianjin Gree Xinhui Medical Equipment Co., Ltd. | Tianjin | Tianjin | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 68 | Gree Electric Appliances (Linyi) Co., Ltd. | Linyi City | Linyi City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 69 | Gree (Zhuhai Hengqin) GREE Development Co., Ltd. | Zhuhai City | Zhuhai City | Real estate industry | 100.00 | 100.00 | Establishment | |
| 70 | Changsha Kinghome Electrics Co., Ltd | Changsha City | Changsha City | Industrial manufacture | 100.00 | 100.00 | Establishment | |
| 71 | GREE Altairnano New Energy Inc. [Note 5] | Zhuhai City | Zhuhai City | Research and test development | 30.47 | 47.93 | Business combinations not under common control | |
| 72 | Zhuhai MinRoad Supply Chain Technology Co., Ltd | Zhuhai City | Zhuhai City | Transportation | 70.00 | 70.00 | Establishment | |
[Note 1] The company holds 94.16% of the stock right of Gree Finance Company, and the Company's wholly-owned subsidiaries Gree Electrical and Gree Xinyuan each hold 0.23% of the stock rightof Gree Finance Company, so the Company's control over Gree Finance Company remained unchanged;
[Note 2] The Company directly holds 90.00% of stock right of Gree Shanghai Air Conditioners Sales Co., Ltd., and Gree (Chongqing) Electric Appliances Co., Ltd., as the subsidiary of the Company,holds its remaining 9.70% stock right, so the Company holds its 99.70% stock right in the direct and indirect ways.[Note 3] The Company directly holds 75.00% of stock right of Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd, and GREE Altairnano New Energy Inc., as the subsidiary of theCompany, holds its remaining 5.00% stock right, so the Company holds its 80.00% stock right in the direct and indirect ways.[Note 4] The Company directly holds 75.00% of stock right of Chengdu Gree Xinhui Medical Equipment Co., Ltd., and GREE Altairnano New Energy Inc., as the subsidiary of the Company, holds itsremaining 5.00% stock right, so the Company holds its 80.00% stock right in the direct and indirect ways.[Note 5] The Company included GREE Altairnano New Energy in the consolidation during the current period, the details and financial information of which are described in Remark 6-1 "Businesscombination not under the same control".
(2) Important non-wholly owned subsidiaries
Information of rights and interests held by minority shareholders of important non-wholly owned subsidiaries and profits and losses:
| Name of subsidiary | Shareholding ratio of minority shareholders | Profits or losses attributable to minority shareholders in the current period | Dividends declared to distribute to minority shareholders in the current period | Equity balance of minority shareholders at the end of the period |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 3.00% | 5,739,957.63 | 49,903,893.39 | 29,720,208.45 |
| Zhuhai Gree Group Finance Company Limited | 5.38% | 21,907,875.49 | 341,819,829.08 |
(3) Main financial information of important non-wholly owned subsidiaries
| Name of subsidiary | Balance at the end of the period | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 1,704,926,333.20 | 841,684,649.00 | 2,546,610,982.20 | 1,544,393,100.17 | 11,544,266.70 | 1,555,937,366.87 |
| Zhuhai Gree Group Finance Company Limited | 41,592,729,227.65 | 10,677,512,278.06 | 52,270,241,505.71 | 45,552,841,401.15 | 359,144,354.50 | 45,911,985,755.65 |
(Continued)
| Name of subsidiary | Beginning balance |
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 2,920,871,321.12 | 944,587,263.99 | 3,865,458,585.11 | 1,390,158,036.58 | 12,495,741.40 | 1,402,653,777.98 |
| Zhuhai Gree Group Finance Company Limited | 38,131,598,722.42 | 14,678,190,451.97 | 52,809,789,174.39 | 46,634,275,949.33 | 232,033,203.40 | 46,866,309,152.73 |
(Continued)
| Name of subsidiary | Amount for the current period | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 4,260,079,859.97 | 191,331,921.06 | 191,331,921.06 | 203,644,311.67 |
| Zhuhai Gree Group Finance Company Limited | 1,904,221,332.12 | 407,512,564.92 | 414,775,728.40 | 3,626,629,910.99 |
(Continued)
| Name of subsidiary | Amount for the previous period | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Gree (Chongqing) Electric Appliances Co., Ltd. | 4,820,238,798.40 | 75,181,066.77 | 75,181,066.77 | -3,051,189,240.49 |
| Zhuhai Gree Group Finance Company Limited | 2,379,170,026.46 | 679,943,713.67 | 681,885,945.92 | -12,691,657,223.44 |
2. Equities in joint ventures or associates
(1) Important joint ventures or associates
| Name of invested entity | Main location of operation | Place of registration | Nature of business | Shareholding ratio (%) | Accounting treatment of associates or joint ventures | |
| Direct | Indirect | |||||
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | Zhuhai City | Zhuhai City | Business services | 91.27 | Equity method | |
| Zhuhai Hanling Equity Investment Partnership (Limited Partnership) | Zhuhai City | Zhuhai City | Business services | 47.92 | Equity method | |
(2) Main financial information of important joint ventures
1) Zhuhai Ronglin Equity Investment Partnership (Limited Partnership)
| Item | Ending balance/Current amount | Beginning balance/Amount for the previous period |
| Current assets | 11,636,952,794.62 | 1,536,916.77 |
| Including: cash and cash equivalents | 1,753,243.88 | 1,536,916.77 |
| Non-current assets | 8,660,996,176.54 | |
| Total assets | 11,636,952,794.62 | 8,662,533,093.31 |
| Current liabilities | 42,567,398.01 | 23,078,118.19 |
| Total liabilities | 42,567,398.01 | 23,078,118.19 |
| Share of net assets calculated by the agreement | 8,893,495,450.98 | 7,061,709,059.56 |
| Total comprehensive income | 2,552,450,421.49 | 1,114,839,883.69 |
2) Zhuhai Hanling Equity Investment Partnership (Limited Partnership)
| Item | Ending balance/Current amount | Beginning balance/Amount for the previous period |
| Current assets | 678,478,666.88 | 123,178,588.99 |
| Including: cash and cash equivalents | 3,478,666.88 | 476,698.58 |
| Non-current assets | 245,000,000.00 | 800,000,000.00 |
| Total assets | 923,478,666.88 | 923,178,588.99 |
| Current liabilities | 2,998,503.81 | 758,152.76 |
| Total liabilities | 2,998,503.81 | 758,152.76 |
| Share of net assets calculated by the agreement | 920,480,163.07 | 922,420,436.23 |
| Total comprehensive income | 53,187,718.56 | 29,115,512.75 |
| Dividends received from joint ventures in the current year | 55,127,991.72 | 26,695,076.52 |
(3) Significant restrictions on the ability of joint ventures or associates to transfer funds to the CompanyNo.
(4) Excess losses incurred by joint ventures or associates
No.
(5) Unrecognized commitments related to investment in joint ventures
No.
(6) Contingent liabilities related to investment in joint ventures or associates
No.
3. Important co-management
No.
4. Equity in structured entities which were not included in the scope of consolidated financialstatementsNo.Ⅷ Risks associated with financial instrumentsMain financial instruments of the Company includes monetary capital, trading financial assets, derivativefinancial assets, receivables financing, receivables, disbursement of loans and receivables, buying back the sale offinancial assets, debt investments, other debt investments, other equity instrument investments, other financialliabilities (e.g., payables) arising from operation, etc. These financial instruments aim to provide funds for operationof the Company.The financial instruments of the Company may lead to the main risks of credit risks, liquidity risks and marketrisks.
1. Classification information of financial instruments
The book values of various financial instruments on the balance sheet date:
(1) Balance at the end of the period
| 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 which are measured at their fair values and of which the changes are included into other comprehensive income | Total | |
| 1. Measured by cost or amortized cost | ||||
| Monetary funds | 116,939,298,776.87 | 116,939,298,776.87 | ||
| Accounts receivable | 13,840,898,802.76 | 13,840,898,802.76 | ||
| Other receivables | 334,161,870.18 | 334,161,870.18 | ||
| 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 which are measured at their fair values and of which the changes are included into other comprehensive income | Total | |
| 1. Measured by cost or amortized cost | ||||
| Non-current assets due within one year | 3,406,416.52 | 3,406,416.52 | ||
| Other current financial assets | 5,249,688,091.77 | 5,249,688,091.77 | ||
| Loans and advances | 4,142,652,901.85 | 4,142,652,901.85 | ||
| Long-term receivables | 2,419,031.07 | 2,419,031.07 | ||
| Subtotal | 140,512,525,891.02 | 140,512,525,891.02 | ||
| 2. Measured by their fair values | ||||
| Derivative financial assets | 198,773,198.65 | 198,773,198.65 | ||
| Receivable financing | 25,612,056,693.07 | 25,612,056,693.07 | ||
| Non-current assets due within one year | 11,030,165,516.08 | 11,030,165,516.08 | ||
| Other current financial assets | 1,332,723,758.33 | 13,436,100.00 | 1,346,159,858.33 | |
| Other debt investments | 5,910,056,891.62 | 5,910,056,891.62 | ||
| Other equity instruments investments | 10,114,246,030.05 | 10,114,246,030.05 | ||
| Other non-current financial assets | 81,309,327.39 | 81,309,327.39 | ||
| Subtotal | 53,999,248,889.15 | 293,518,626.04 | 54,292,767,515.19 | |
| Total | 140,512,525,891.02 | 53,999,248,889.15 | 293,518,626.04 | 194,805,293,406.21 |
(Continued)
| Item | Classification of financial liabilities | ||
| Derivative financial liabilities | Other financial liabilities | Total | |
| 1. Measured by cost or amortized cost | |||
| Short-term borrowings | 27,617,920,548.11 | 27,617,920,548.11 | |
| Loans from other banks | 300,021,500.00 | 300,021,500.00 | |
| Notes payable | 40,743,984,514.42 | 40,743,984,514.42 | |
| Accounts payable | 35,875,090,911.05 | 35,875,090,911.05 | |
| Financial assets sold for repurchase | 746,564,041.09 | 746,564,041.09 | |
| Deposits from customers and interbank | 182,681,905.74 | 182,681,905.74 | |
| Other payables | 6,763,119,937.14 | 6,763,119,937.14 | |
| Item | Classification of financial liabilities | ||
| Derivative financial liabilities | Other financial liabilities | Total | |
| Non-current liabilities due within one year | 1,243,822,222.57 | 1,243,822,222.57 | |
| Other current liabilities | 7,819,060,868.44 | 7,819,060,868.44 | |
| Long-term borrowings | 8,960,864,258.30 | 8,960,864,258.30 | |
| Long-term payables | 446,194,591.92 | 446,194,591.92 | |
| Subtotal | 130,699,325,298.78 | 130,699,325,298.78 | |
| Total | 130,699,325,298.78 | 130,699,325,298.78 | |
(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 which are measured at their fair values and of which the changes are included into other comprehensive income | Total | |
| 1. Measured by cost or amortized cost | ||||
| Monetary funds | 136,413,143,859.81 | 136,413,143,859.81 | ||
| Accounts receivable | 8,738,230,905.44 | 8,738,230,905.44 | ||
| Other receivables | 147,338,547.86 | 147,338,547.86 | ||
| Other current financial assets | 13,039,786,857.75 | 13,039,786,857.75 | ||
| Loans and advances | 5,273,805,581.52 | 5,273,805,581.52 | ||
| Subtotal | 163,612,305,752.38 | 163,612,305,752.38 | ||
| 2. Measured by their fair values | ||||
| Trading financial liabilities | 370,820,500.00 | 370,820,500.00 | ||
| Derivative financial assets | 285,494,153.96 | 285,494,153.96 | ||
| Receivable financing | 20,973,404,595.49 | 20,973,404,595.49 | ||
| Other current financial assets | 22,298,300.00 | 22,524,600.00 | 44,822,900.00 | |
| Other debt investments | 502,202,293.17 | 502,202,293.17 | ||
| Other equity instruments investments | 7,788,405,891.47 | 7,788,405,891.47 | ||
| Other non-current financial assets | 2,003,483,333.33 | 2,003,483,333.33 | ||
| Subtotal | 29,286,311,080.13 | 2,682,322,587.29 | 31,968,633,667.42 | |
| Total | 163,612,305,752.38 | 29,286,311,080.13 | 2,682,322,587.29 | 195,580,939,419.80 |
(Continued)
| Item | Classification of financial liabilities | ||
| Derivative financial liabilities | Other financial liabilities | Total | |
| Measured by cost or amortized cost | |||
| Short-term borrowings | 20,304,384,742.34 | 20,304,384,742.34 | |
| Deposits from customers and interbank | 261,006,708.24 | 261,006,708.24 | |
| Loans from other banks | 300,020,250.00 | 300,020,250.00 | |
| Notes payable | 21,427,071,950.32 | 21,427,071,950.32 | |
| Accounts payable | 31,604,659,166.88 | 31,604,659,166.88 | |
| Financial assets sold for repurchase | 475,033,835.62 | 475,033,835.62 | |
| Other payables | 2,379,395,717.44 | 2,379,395,717.44 | |
| Other current liabilities | 7,104,734,012.61 | 7,104,734,012.61 | |
| Long-term borrowings | 1,860,713,816.09 | 1,860,713,816.09 | |
| Total | 85,717,020,199.54 | 85,717,020,199.54 | |
2. Credit risks
Credit risks refer to financial losses suffered by one party due to the non-performance of obligations by the otherparty of financial instrument.The Company will have transactions with recognized customers with a good reputation only. According to thepolicy of the Company, all the customers who require the credit form for transactions shall undergo credit review.Besides, the Company implements continuous monitoring on 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 capital, receivables financing, etc. The credit risks of thesefinancial assets come from nonperformance of the transaction counterparty, and the maximum risk exposure is equalto the carrying amount of these instruments. Trade terms between the Company and customers focus on advances,banker's acceptance bill or the mode of paying on delivery, assisted by transaction with credit.The monetary capital is deposited in state-owned financial institutions with high credit rating, minimizing therisk; the receivables financing is mainly banker's acceptance bills, and the risk exposure is rather small. The bookvalue of receivables financing, accounts receivable, other receivables, contract assets, loans and advance money andlong-term receivables in the consolidated balance sheet is the highest credit risk with which the Company may beconfronted.As at the end of the Report Period, the Company's receivables financing, accounts receivable, other accountsreceivable, contract assets, loans and advance money and long-term receivables accounts for 14.11% of the totalassets (the balance at the beginning of the period is 12.61%), and the above amounts are mainly due within 1 year, sothe Company has no significant credit risk. For the Company's credit risk exposures arising from the above financial
assets, see the disclosed information in Note V. 4 "Receivables", Note V. 5 "Receivables financing", Note V. 7"Other receivables", Note V. 9 "Contract assets", Note V. 12 "Loans and advances granted" and Note V. 14"Long-term receivables".
3. Liquidity risk
Liquidity risks refer to risks of fund shortage generated when the enterprise performs the obligation to settleaccounts 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 1.49(which was 2.28 at the beginning of the period), which shows that the Company has adequate liquidity and the risk inshortage of liquidity is low.
4. Market risks
Market risks refer to fluctuation risks of the fair value or future cash flow of financial instrument due to changesin the market price, including exchange rate risk and interest rate risk.
(1) Exchange rate risk
Exchange rate risk refers to the fluctuation risk of the fair value or future cash flow of financial instruments dueto changes in the foreign exchange rate.
As at December 31, 2021, the amounts of foreign currency financial assets and liabilities held by the Companyconverted into RMB are presented in details in Note (V) 70 (1) "Foreign Currency Monetary Items".
The Company will minimize the exchange risk by carrying out the forward exchange transaction business andcontrolling the scale of foreign currency assets and liabilities according to changes in the market exchange rate.
(2) Interest rate risks
Interest rate risk refers to the fluctuation risk of the fair value or future cash flow of financial instruments due tochanges in the market rate of interest.
Set out below are the Company's liabilities with interests as of December 31, 2021:
| Report Item | Amount | Interest rate range | Remark |
| Short-term borrowings | 27,617,920,548.11 | 0.63%-9.00% | Floating interest rate |
| Deposits from customers and interbank | 182,681,905.74 | 0.55%-4.13% | Floating interest rate |
| Loans from other banks | 300,021,500.00 | 2.58% | |
| Long-term borrowings | 8,960,864,258.30 | 3.1%-6.18% | Floating interest rate |
| Money from financial assets sold for repurchase | 746,564,041.09 | 3.00%~3.20% | Floating interest rate |
| Non-current liabilities due within one year | 1,243,822,222.57 | 4.67%-13.00% | Floating interest rate |
| Other current liabilities | 4,048,840,948.73 | 2.60% | |
| Long-term payables | 446,194,591.92 | 4.67%-6.175% | Floating interest rate |
| Total | 43,546,910,016.46 |
Ⅸ Fair value disclosure
1. Fair values of assets and liabilities at the end of period that are measured at the fair value
| Item | Ending fair value | |||
| Measurement of the fair value at the first level | Measurement of the fair value at the second level | Measurement of the fair value at the third level | Total | |
| Continuous fair value measurement | ||||
| Derivative financial assets | 198,773,198.65 | 198,773,198.65 | ||
| Receivable financing | 25,612,056,693.07 | 25,612,056,693.07 | ||
| Non-current financial assets due within one year | 60,392,960.52 | 10,969,772,555.56 | 11,030,165,516.08 | |
| Other current assets | 43,930,525.00 | 1,302,229,333.33 | 1,346,159,858.33 | |
| Other debt investments | 727,591,613.84 | 5,182,465,277.78 | 5,910,056,891.62 | |
| Other equity instruments investments | 10,107,246,030.05 | 7,000,000.00 | 10,114,246,030.05 | |
| Other non-current financial assets | 81,309,327.39 | 81,309,327.39 | ||
| Total of assets measured by fair value continuously | 10,939,161,129.41 | 43,346,606,385.78 | 7,000,000.00 | 54,292,767,515.19 |
2. Basis for determining market prices of items continuously and not continuously measured at thefirst-level fair valueNon-current assets-bonds due within one year, other current assets, other debt investment-bonds, and otherequity instrument investments held by the Company at the first-level fair value are determined based on the quotationof corresponding products and investment projects on the open market.
3. Qualitative and quantitative information on valuation techniques and important parameters adoptedby items continuously and not continuously measured at the second-level fair valueReceivables financing held by the Company at the second-level fair value is the bank acceptance bills andcommercial acceptance bills held by the Company, and their corresponding transfer and discounted amounts are usedas the basis for determining their market prices;
Non-current assets due within one year, other current assets, other debt investments and other non-currentfinancial assets, derivative financial assets and other non-current financial assets held by the Company at thesecond-level fair value are mainly forward hedging instruments, large-denomination negotiable certificate of depositand assets management plan with a recovery period of more than one year, and the recoverable amount of thecorresponding financial assets is used as the basis for determining the market price.
4. Qualitative and quantitative information on valuation techniques and important parameters adoptedby items continuously and not continuously measured at the third-level fair valueNon-trading equity instrument investments designated to be measured at their fair values and of which thechanges are recorded into comprehensive income, which are held by the Company at the third layer, are mainlyequity investment projects which cannot be verified with the data from the observable active market and of which thefinancial forecast is made with their own data.
5. 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 conversionNo.
6. Changes in valuation techniques and reasons for changes occurred during the current periodNo.
7. Particulars on fair value of financial assets and liabilities which are not measured at fair valueNo.Ⅹ Related parties and related transaction
1. Parent company of the Company
The Company has no controlling shareholders or substantial controllers.
2. Subsidiaries of the Company
For details, see Note (VII)-1 "Equity in subsidiaries".
3. Joint ventures and associates of the Company
For important joint ventures and associates of the Company, see the Note VII-2 "Equity in ventures andassociates of the Company" for details.
4. Other related parties
| Name of other affiliates | Relationships of other related parties with the Company |
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | The Company holds more than 5.00% of its shares |
| Henan Province Hongli Electric Sales Co., Ltd. | The son of the director of the Company acts as its general manager |
| Henan Huizhong Yifeng Electronic Commerce Co., Ltd. | The director of the Company act as its board chairman |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Companies where directors of the Company act as executive directors |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | The Company's director holds its equity and serves as its board chairman |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Companies where directors of the Company act as executive directors and general managers |
| GREE Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries [Note 1] | Companies and their subsidiaries and holding subsidiaries where the chairman of the Company serves as a director |
| Nanyang Lida Optic-electronics Co., Ltd. | It is a wholly-owned or controlled subsidiary where the Company's independent director serves as its independent director. |
| Name of other affiliates | Relationships of other related parties with the Company |
| Shenzhen Royole Technology Co. Ltd. | It is a wholly-owned or controlled subsidiary where the Company's independent director serves as its independent director. |
| Guangdong Guangxin Junda Law Firm | The Company's independent directors serve as its partner chairmen |
| Hunan Green Renewable Resources Recycling Co., Ltd. | The Company has great influence upon it. |
| Wuhu Green Renewable Resources Recycling Co., Ltd. | The Company has great influence upon it. |
| Zibo Qiaopeng Trade Co., Ltd. | The younger brother of the Company's supervisor is an executive director and manager of this company. |
| Shandong Meili Property Co., Ltd. | It is a subsidiary where sons of supervisors of the Company act as executive directors and managers. |
| Shandong Red April Holdings Group Co., Ltd. and its subsidiaries | The supervisors of the Company act as its executive directors and general managers. |
| Shandong Jierui Logistics Co., Ltd. | The supervisors of the Company act as its executive directors and general managers. |
| Subsidiaries and holding companies of Zhuhai Gree Group Co., Ltd. [Note 2] | Subsidiaries and holding subsidiaries of the Company's original controlling shareholder |
[Note 1] GREE Altairnano New Energy Inc. (formerly: Yinlong New Energy Co., Ltd.) and its subsidiaries and holding subsidiaries,which are not other related parties of the Company after October 31, 2021, are subsidiaries of the Company. Therefore, only the amountof connected transactions from January 2021 to October 2021 will be disclosed. For details of the connected transactions and dealingsbetween the Company and Gree Altairnano New Energy", please refer to Remark X-8.
[Note 2] Zhuhai Gree Group Co., Ltd. and its subsidiaries and its holding company are not other related parties of the Companyafter January 23, 2021, therefore, only the related transactions occurring from January 1 to January 23 are disclosed.
5. Related transactions
(1) Related transactions of purchase and sale of goods, provision and acceptance of services
1) Purchase of commodities/receiving of services
| Related party | Related transaction types | Content of related transactions | Amount for the current period | Amount for the previous period |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Deposit-taking | Interest expenses | 89.00 | 168,517.68 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Deposit-taking | Interest expenses | 96.10 | 640.04 |
| Shandong Jierui Logistics Co., Ltd. | Deposit-taking | Interest expenses | 540.83 | |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Deposit-taking | Interest expenses | 7,700.16 | 5,393.77 |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Deposit-taking | Interest expenses | 85.02 | 105.88 |
| Shandong Zhirun Electric Appliances Co., Ltd. | Deposit-taking | Interest expenses | 0.65 | |
| Shandong Meili Property Co., Ltd. | Deposit-taking | Interest expenses | 0.17 | 8.75 |
| Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | Material Procurement | Raw material | 2,527,902,885.40 | 2,057,922,093.99 |
| Wuhu Green Renewable Resources Recycling Co., Ltd. | Material Procurement | Raw material | 509,270.48 | |
| Hunan Green Renewable Resources Recycling Co., Ltd. | Material Procurement | Raw material | 7,895,587.14 | 4,281,006.00 |
| Related party | Related transaction types | Content of related transactions | Amount for the current period | Amount for the previous period |
| Beijing Gree Technology Co., Ltd. | Material Procurement | Accessories | 58,532,547.11 | 46,875,937.46 |
| Shenzhen Royole Technology Co. Ltd. | Material Procurement | Accessories | 175,706.84 | |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Material Procurement | Accessories and infrastructure projects | 38,209,208.33 | 5,563,078.35 |
| Gree Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 114,441,306.42 | 456,527,871.20 |
| Chongqing Pargo Mechanical Equipment Co., Ltd. | Procurement of materials and services | Accessories, cleaning services | 246,203.54 | 15,961,014.17 |
| Liaowang All Media Communication Co., Ltd. | Service procurement | Publicity and advertising fee | 1,849,056.61 | 4,150,943.41 |
| Henan Yuze Finance Leasing Co., Ltd. | Service procurement | Interest expenses | 1,387,542.20 | |
| Total | 2,750,648,014.04 | 2,591,966,422.66 |
2) Schedule of goods sold/services provided
| Related party | Related transaction types | Content of related transactions | Amount incurred in current period | Amount for the previous period |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Interest revenue | 42,501,985.05 | |
| Shandong Jierui Logistics Co., Ltd. | Loan | Interest revenue | 10,440,199.17 | |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Interest revenue | 17,299,672.42 | |
| Shandong Zhirun Electric Appliances Co., Ltd. | Loan | Interest revenue | 141,115.31 | |
| Beijing Gree Technology Co., Ltd. | Loan | Interest revenue | 1,055,231.60 | |
| Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | Loan | Interest revenue | 8,055.86 | |
| Shandong Jierui Logistics Co., Ltd. | Loan | Handling charge income | 194.34 | |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Handling charge income | 14.62 | 189.15 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Loan | Handling charge income | 378.30 | |
| Shandong Zhirun Electric Appliances Co., Ltd. | Loan | Handling charge income | 5.19 |
| Related party | Related transaction types | Content of related transactions | Amount incurred in current period | Amount for the previous period |
| Shandong Meili Property Co., Ltd. | Loan | Handling charge income | 5.19 | |
| Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | Loan | Handling charge income | 9.91 | |
| Henan Shengshi Xinxing Gree Trading Co., Ltd. | Sale of goods | Sales revenue | 2,817,582,876.54 | 4,285,955,595.20 |
| Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | Sale of goods | Sales revenue | 6,174,062,804.40 | 4,509,434,341.94 |
| Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | Sale of goods | Sales revenue | 1,066,814,988.67 | 1,135,301,130.49 |
| Gree Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries | Sale of goods | Sales revenue | 709,032,680.61 | 123,800,930.62 |
| Beijing Gree Technology Co., Ltd. | Sale of goods | Sales revenue | 154,826.18 | 21,750,223.87 |
| Zhuhai Gree Group Co., Ltd. and its holding companies | Sale of goods | Sales revenue | 1,051,467.87 | 26,204,546.50 |
| Shandong Red April Holdings Group Co., Ltd. and its subsidiaries | Sale of goods | Sales revenue | 152,586.11 | 18,008,378.79 |
| Henan Huizhong Yifeng Electronic Commerce Co., Ltd. | Sale of goods | Sales revenue | 86,581,480.47 | 79,088,623.28 |
| Chongqing Pargo Mechanical Equipment Co., Ltd. | Sale of goods | Sales revenue | 474,477.90 | |
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | Sale of goods | Sales revenue | 2,856,000.00 | |
| Henan Province Hongli Electric Sales Co., Ltd. | Sale of goods | Sales revenue | 14,158.41 | |
| Henan Yuze Finance Leasing Co., Ltd. | Sale of goods | Sales revenue | 10,662.83 | |
| Zibo Qiaopeng Trade Co., Ltd. | Sale of goods | Sales revenue | 452.83 | |
| Guangdong Guangxin Junda Law Firm | Sale of goods | Sales revenue | 29,989.22 |
| Related party | Related transaction types | Content of related transactions | Amount incurred in current period | Amount for the previous period |
| Shenzhen Royole Technology Co. Ltd. | Sale of goods | Sales revenue | 3,892.30 | |
| Total | 10,856,556,183.62 | 10,273,257,987.52 |
[Note] Songwon Grain Group Co., Ltd. and its subsidiaries, Zhuhai Vantone Special Engineering Plastics Co.,Ltd. and Shandong Shengshi Xinxing Gree Trading Co., Ltd. are not other related parties of the Company in thecurrent period.
(2) Associated trusteeship management/contracting or entrusted management/outsourcing
No.
(3) Associated lease
1) The Company as the lessor:
| Name of the lessee | Type of leased assets | Confirmed income earned on leases | |
| Amount for the current period | Amount for the previous period | ||
| Shanghai Highly (Group) Co., Ltd. and its holding subsidiaries | Lease of fixed assets | 884.96 | |
| Total | 884.96 | ||
2) The Company as the lessee:
| Name of the lessor | Type of leased assets | Confirmed rental expenditure | |
| Amount for the current period | Amount for the previous period | ||
| Zhuhai Gree Group Co., Ltd. and its holding companies | Lease of fixed assets | 524,859.52 | |
| Gree Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries | Lease of fixed assets | 22,101,319.15 | 8,361,254.31 |
| Total | 22,101,319.15 | 8,886,113.83 | |
(4) Associated guarantee
No.
(5) Fund borrowing of related party
No.
(6) Asset transfer and debt restructuring of the related party
No.
(7) Remunerations for key management personnel
| Item | Amount for the current period | Amount for the previous period |
| Remunerations for key management personnel | 28,776,688.73 | 21,711,900.94 |
(8) Other related transactions
No.
6. Accounts receivable and payable by related parties
(1) Receivable items
| Item | Related party | Balance at the end of the period | Beginning balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 275,974,949.72 | 13,798,747.48 | 252,078,651.19 | 12,603,932.56 |
| Accounts receivable | Wuhu Green Renewable Resources Recycling Co., Ltd. | 6,053,077.41 | 1,210,615.48 | 6,053,168.30 | 302,658.42 |
| Other receivables | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 300.00 | 15.00 | ||
| Other receivables | Henan Yuze Finance Leasing Co., Ltd. | 2,000,000.00 | 100,000.00 | ||
| Receivable financing | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 1,682,308,050.00 | 1,060,266,463.33 | ||
| Receivable financing | Shandong Jierui Logistics Co., Ltd. | 807,003.00 | 250,000.00 | ||
| Receivable financing | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 563,643,910.00 | 51,154,515.78 | ||
| Receivable financing | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 209,459,790.34 | 250,468,129.83 | ||
| Receivable financing | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 7,212,720.20 | 54,790,620.60 | ||
| Receivable financing | Henan Province Hongli Electric Sales Co., Ltd. | 254,056,500.00 | |||
| Advance payments | Beijing Gree Technology Co., Ltd. | 4,525,924.98 | |||
| Advance payments | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 159,295.76 | 18,388,182.09 | ||
| Contract assets | Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 230,520.00 | 11,526.00 | 461,040.00 | 23,052.00 |
| Total | 3,001,905,816.43 | 15,120,888.96 | 1,698,436,996.10 | 12,929,657.98 | |
(2) Accounts payable
| Item | Related party | Balance at the end of the period | Beginning balance |
| Contract liabilities | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 82,274.34 | |
| Contract liabilities | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 1,467,255,376.86 | 892,271,917.85 |
| Item | Related party | Balance at the end of the period | Beginning balance |
| Contract liabilities | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 711,732,407.73 | 195,303,464.04 |
| Contract liabilities | Nanyang Lida Optic-electronics Co., Ltd. | 90,000.00 | |
| Other current liabilities - Output tax to be wrote-off | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 10,695.66 | |
| Other current liabilities - Output tax to be wrote-off | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 190,743,199.00 | 115,995,349.32 |
| Other current liabilities - Output tax to be wrote-off | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 92,525,213.00 | 25,389,450.32 |
| Deposit-taking | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 21,518.97 | |
| Deposit-taking | Shandong Jierui Logistics Co., Ltd. | 0.26 | |
| Deposit-taking | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 16,031.72 | 29,820.55 |
| Deposit-taking | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 10,963.99 | 273,262.06 |
| Deposit-taking | Shandong Meili Property Co., Ltd. | 2,464.18 | |
| Deposit taking - Accrued interest | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 2.30 | |
| Deposit taking - Accrued interest | Shandong Meili Property Co., Ltd. | 0.26 | |
| Deposit taking - Accrued interest | Zhejiang Tongcheng Gree Electric Appliances Co., Ltd. and its holding companies | 2.70 | 3.19 |
| Deposit taking - Accrued interest | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 1.84 | 19.11 |
| Accounts payable | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 315,231,596.28 | 205,355,411.45 |
| Accounts payable | Beijing Gree Technology Co., Ltd. | 7,746,578.74 | 17,669,736.14 |
| Accounts payable | Hunan Green Renewable Resources Recycling Co., Ltd. | 2,455,852.10 | 3,341,338.52 |
| Accounts payable | Wuhu Green Renewable Resources Recycling Co., Ltd. | 3,789,547.79 | 3,789,547.79 |
| Accounts payable | Henan Shengshi Xinxing Gree Trading Co., Ltd. | 249,988.68 | |
| Accounts payable | Shenzhen Royole Technology Co. Ltd. | 29,815.13 | |
| Other payables | Shenzhen Royole Technology Co. Ltd. | 2,462.10 | |
| Other payables | Shanghai Highly (Group) Co., Ltd. and its subsidiaries and holding subsidiaries | 12,200.00 | 1,013,050.00 |
| Other payables | Beijing Gree Technology Co., Ltd. | 205,402.42 | |
| 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 | |
| Other payables | Zhejiang Shengshi Xinxing Gree Trading Co., Ltd. | 371,617.37 | |
| Long-term payables | Henan Yuze Finance Leasing Co., Ltd. | 47,732,374.61 | |
| Total | 2,840,088,404.14 | 1,460,661,962.97 |
7. Commitment of related parties
No.
8. The related transactions between the Company and GREE Altairnano New Energy Inc. and its subsidiaries and holding subsidiaries
(1) Purchase of commodities/receiving of services and payables and prepayments
| Related party | Related transaction types | Content of related transaction | Amount incurred in current period | Amount incurred in previous period | Beginning balance |
| Other non-current assets (+)/accounts payable (-) | |||||
| Zhuhai Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 5,788,013.23 | 32,534,842.93 | -76,780,334.68 |
| Zhuhai Gree Altairnano Electric Appliances, Co., Ltd | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 102,223.77 | -218,273.50 | |
| Gree Altairnano New Energy Inc. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 396,110.22 | 16,381,555.97 | -2,464,269.09 |
| Shijiazhuang Zhongbo Automobile Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 80,744.91 | 384,706.96 | 320,894.16 |
| Tianjin Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 34,513.27 | 156,878.28 | 8,805.08 |
| Tianjin Gree Altairnano New Energy Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 166,914.96 | 2,106,414.29 | -243,255.40 |
| Chengdu Gree Titanium New Energy Co., Ltd. | Purchase of fixed assets and materials and lease of fixed assets | Batteries, energy storage components, new energy vehicles and accessories, etc. | 3,852,804.97 | 385,045.87 | -419,700.00 |
| Hebei Gree Titanium New Energy Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 447,955.02 | 90,311.20 | 50,000.00 |
| Chengdu Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials and lease of fixed assets | Batteries, energy storage components, new energy vehicles and accessories, etc. | 98,479,702.80 | 404,164,773.10 | 9,198,296.24 |
| Northern Aotai Nanotechnology Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 8,805,956.71 | 6,317.88 | 50,000.00 |
| Luoyang Guangtong Automobile Co., Ltd. | Purchase of fixed assets and materials | Batteries, energy storage components, new energy vehicles and accessories, etc. | 141,592.92 | 701,769.91 | |
| Luoyang Gree Altairnano New Energy Co., Ltd. | Purchase of fixed assets and materials and lease of fixed assets | Batteries, energy storage components, new energy vehicles and accessories, etc. | 18,246,092.79 | 7,976,509.12 |
| Related party | Related transaction types | Content of related transaction | Amount incurred in current period | Amount incurred in previous period | Beginning balance |
| Other non-current assets (+)/accounts payable (-) | |||||
| Total | Total | 136,542,625.57 | 464,889,125.51 | -70,497,837.19 |
[Note] The above-mentioned related transactions included RMB 114,441,306.42 for purchase of fixed assets and materials and RMB 22,101,319.15 for lease of fixedassets, totaling RMB 136,542,625.57.
(2) Sales of commodities/rendering of services and receivables and account collected in advance
| Related party | Related transaction types | Content of related transaction | Amount incurred in current period | Amount incurred in previous period | Beginning balance | |
| Accounts receivable (+)/contract liabilities (-)/other current liabilities (-) | Receivables financing / other current assets | |||||
| Hebei Gree Titanium New Energy Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 30,418,872.26 | 11,484,769.87 | 3,533,733.09 | |
| Northern Aotai Nanotechnology Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 1,336,159.29 | |||
| Chengdu Guangtong Automobile Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 171,315,666.03 | 4,189,479.65 | 4,734,112.00 | |
| Tianjin Guangtong Automobile Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 217,607,143.70 | 3,982,247.77 | 4,499,940.00 | |
| Chengdu Gree Titanium New Energy Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 16,192,621.18 | 52,625,416.72 | ||
| Gree Altairnano New Energy Inc. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 162,039,130.29 | 25,795,708.14 | 2,460,901.13 | 24,186,193.10 |
| Tianjin Gree Altairnano New Energy Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 665,000.00 | |||
| Zhuhai Guangtong Automobile Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 46,673,904.58 | 4,034,509.62 | 6,608,210.07 | 391,183.31 |
| Zhuhai Gree Altairnano Electric Appliances, Co., Ltd | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 63,383,608.04 | 18,096,962.94 | 20,133,788.34 | 10,000,000.00 |
| Shijiazhuang Zhongbo Automobile Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 3,591,835.91 | 4,055,582.60 | 586,774.97 | |
| Related party | Related transaction types | Content of related transaction | Amount incurred in current period | Amount incurred in previous period | Beginning balance | |
| Accounts receivable (+)/contract liabilities (-)/other current liabilities (-) | Receivables financing / other current assets | |||||
| Luoyang Gree Altairnano New Energy Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 42,470.80 | |||
| Luoyang Guangtong Automobile Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 12,487.63 | |||
| Nanjing Guangtong Automobile Co., Ltd. | Sale of goods | Sales of intelligent equipment, molds, vehicle air conditioners, power systems, etc. | 10,616.81 | |||
| Total | 709,032,680.61 | 123,800,930.62 | 46,026,267.23 | 35,829,151.38 | ||
Ⅺ Commitments and contingencies
1. Important commitment
The Company had no significant commitments to be disclosed.
2. Contingencies
In December 2015, Sunshine Life Insurance Co., Ltd. (hereinafter referred to as "Sunshine Insurance") andGREE Altairnano New Energy Inc.(hereinafter referred to as "GREE Altairnano New Energy") and the originalmajor shareholder Zhuhai Yinlong Investment Holding Group Co., Ltd (hereinafter referred to as "Yinlong Group")and the actual controller Wei Yincang signed a capital increase agreement and a supplementary agreement. It wasagreed that Sunshine Insurance would increase its capital by RMB 1 billion to GREE Altairnano New Energy, andagreed on a "performance bet". After that, Sunshine Insurance filed an arbitration at Shenzhen InternationalArbitration Court for the company's performance did not meet the standards, requiring that GREE Altairnano NewEnergy, Yinlong Group, and Wei Yincang to make performance compensation, with a specific appeal of RMB 1billion in principal and more than RMB 150 million in interest, totaling RMB 1.15 billion. According to the capitalincrease agreement and supplementary agreement, Yinlong Group and Wei Yincang bear the direct responsibility forperformance compensation, and GREE Altairnano New Energy bears indirect responsibility for the debt when theperformance does not reach the agreed standard. This case is currently in the stage of waiting for the arbitral tribunalto investigate and obtain evidence and ruling after two hearings and several written exchanges of views with eachother. The amount of litigation cost required to be borne by GREE Altairnano can hardly be estimated yet.A capital increase agreement similar to "performance bet" with Sunshine Insurance involves a total of 7shareholders (excluding Sunshine Insurance), with an investment principal of RMB 1.11 billion.
3. Others
No.
Ⅻ Events after the balance sheet date
1. Important non-adjustment events
Gree Electric Appliances, Inc. of Zhuhai announced on November 17, 2021 that it intends to acquire270,360,000 shares (representing 29.48% of the total share capital of the subject company as at the date ofannouncement) of Zhejiang Dunan Artificial Environment Co., Ltd. (hereinafter referred to as "Dunan Environment")held by Zhejiang Dunan Precision Machinery Group Co., Ltd. (hereinafter referred to as "Dunan Precision")(hereinafter referred to as "Transfer of Shares " ). The price of the transfer is approximately 2.19 billion yuan. At thesame time, the Company intends to subscribe for 139,414,802 shares of Dunan Environment's non-public offering tocertain parties in cash (collectively as "Transaction") for a subscription price of approximately RMB810 million(hereinafter referred to as the "Non-Public Offering"). Dunan Environment will be a controlling subsidiary of thecompany after this transfer of shares. Upon completion of the transaction, Gree Electric Appliances will hold409,774,802 shares of Dunan Environment, representing 38.78% of the total share capital of Shield Environmentafter the issuance.
Up to the date of this report, Dunan Environment has provided a related guarantee for Dunan Holdings. On
March 31, 2022, as considered and approved at the second meeting of the twelfth session of the Board of Directors ofthe Company, Gree Electric Appliances signed a "Special Agreement on Settlement of Related Guarantees" withDunan Precision, Dunan Holdings and Hangzhou Branch of Zhejiang Commercial Bank Co., Ltd. and reached thefollowing arrangements in respect of the related guarantees:
(1) Dunan Holdings and Gree Electric Appliances shall each bear 50% of the related guaranteed debts as of thematurity date of the financing (loan), and any additional debts (if any) arising from the related guaranteed debts fromthe maturity date of the financing (loan), including but not limited to interest and penalty interest, shall be settled byDunan Holdings itself.
(2) All parties should do their best to ensure that the related guarantee debts should be repaid no later than May15, 2022, and the guarantee obligations borne by Dunan Environment shall be released.
2. Distribution of profits
According to the resolution at the third meeting of the twelfth session of the board of directors, the Company'sprofit distribution plan of 2021: Temporarily based on the total 5,536,677,733 shares entitled to profit distributionrights on April 29, 2022 (namely the total stock capital of the Company equivalent to 5,914,469,040 shares minus377,791,307 shares held by the Company's repurchase account), all shareholders will be distributed a cash of RMB20 (tax included) per 10 shares, with the total amount of cash dividends to be distributed in such a way up to RMB11,073,355,466.00. This distribution plan still needs to be approved by the general meeting of shareholders.
3. Sales return
No important sales return occurred after the balance sheet date.
4. Other events after the balance sheet date
No.
ⅫⅠ Other important events
1. Correction of early errors in accounting
No.
2. Debt restructuring
No.
3. Asset replacement
(1) Exchange of non-monetary assets
No.
(2) Replacement of other assets
No.
4. Pension plan
No.
5. Discontinued operation
| Item | Revenue | Expense | Total profits | Income tax expenses | Net profit | Profit from discontinued operation attributable to owners of parent company |
| Gree (USA) Sales Co., Ltd. | 211,825.22 | -211,825.22 | -210,134.79 | -1,690.43 | -1,690.43 |
(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. | -1,690.43 |
6. Other important transactions and events affecting investor decisions
(1) Share repurchase
The Company held the tenth and sixteenth meetings of the eleventh session of board of directors on April 10,2020 and October 13, 2020, respectively, which deliberated and approved the Proposal on the Partial Repurchase ofPublic Shares and agreed to the Company's use of self-owned funds to repurchase the Company's A shares by meansof centralized bidding transactions (hereinafter referred to as "Phase-1 Repurchase" and "Phase-2 Repurchase"), andthe total amount of repurchase funds of each phase shall not be lower than RMB 3 billion (inclusive) and shall notexceed RMB 6 billion (inclusive); The Company held the twenty-first meetings of the eleventh session of board ofdirectors on May 26, 2021, which deliberated and approved the Proposal on the Partial Repurchase of Public Sharesand agreed to the Company's use of self-owned funds to repurchase the Company's A shares by means of centralizedbidding transactions (hereinafter referred to as "Phase-3 Repurchase"), and the total amount of repurchase funds ofeach phase shall not be lower than RMB 7.5 billion (inclusive) and shall not exceed RMB 15 billion (inclusive).As of February 24, 2021, the phase-1 repurchase plan of the Company had been implemented. The Companyaccumulatively bought 108,365,753 shares of the Company by means of centralized bidding transactions through thespecial security repurchase account. The highest transaction price was RMB 60.18/share, the lowest transaction pricewas RMB 53.01/share, and the total transaction amount was RMB 5,999,591,034.74 (excluding transaction costs).
On June 27, 2021, the twenty-third meeting of the eleventh Board of Directors and the seventeenth Meeting ofthe eleventh Supervisory Board approved the Proposal on the Change of Use of Repurchased Shares andCancellation. It is proposed to adjust the Proposal on the Repurchase of Part of the Public Shares (hereinafterreferred to as "the second phase of the repurchase") adopted at the 16th meeting of the 11th Board of Directors onOctober 13, 2020: "The repurchased shares will be used for employee stock ownership plan or equity incentive" waschanged to "Repurchased shares will be used for cancellation to reduce registered capital". The Company repurchaseda total of 101,261,838 shares in the second phase, and this resolution is subject to the approval of the shareholders'meeting.
(2) Issuance of ultra-short-term financing bills
The Company's first interim general meeting of shareholders in 2020 considered and approved the Proposal onDebt Financing Instruments to be Registered and Issued, and agreed that the Company registers debt financinginstruments with a total amount not exceeding RMB 18 billion (inclusive), of which the ultra-short-term financingbonds to be registered did not exceed RMB 10 billion (inclusive), the short-term financing bonds to be registered didnot exceed RMB 3 billion (inclusive), and the medium-term notes to be registered did not exceed RMB 5 billion(inclusive).
The China Interbank Market Dealers Association held the 37th registration meeting on April 7, 2020, and agreedto accept the registration of the Company's ultra-short-term financing bonds, short-term financing bonds andmedium-term bills, and issued the Registration Acceptance Notice for them respectively.
According to the Company's capital plan arrangement and the interbank market situation, during January 21 -July 7, 2021, the Company issued the first-ninth phases of ultra-short-term financing bonds for 2021, and the totalactual issuance amount was RMB 25 billion. The first-ninth phases of ultra-short-term financing bills were cashed onFebruary 26, April 9, June 26, July 6, June 2, August 5, October 7, October 9, 2021 and January 6, 2022 respectively.
(3) Company Guarantee
As of December 31, 2021, the total amount of guarantees provided by the company's holding subsidiary, GREEAltairnano New Energy, was RMB 7,602,673,700, of which the total amount of guarantees provided by GREEAltairnano New Energy's subsidiaries for short-term loans, long-term loans, accounts payable (EICT), bankacceptance bills issued, long-term payables and other funds was RMB 4,296,357,600; the total amount of guaranteesprovided to companies outside the consolidated statements The total amount of guarantees provided to companiesoutside the consolidated statements was RMB 3,306,316,100 (representing the stock guarantees provided by GREEAltairnano New Energy for its bus company and other clients' finance lease purchase business).
(4) Financial support
GREE Altairnano New Energy Inc., the subsidiary of the Company, provided financial loans of RMB 94,200,RMB 681,400, RMB 23,019,800 and RMB 17,200 respectively to the original shareholder and its related parties WeiYincang, Sun Guohua, Zhuhai Yinlong Investment Holding Group Co. As of the date of this report, theabove-mentioned borrowings have not been recovered.
XIV Notes to main items of financial statements of the parent company
1. Accounts receivable
(1) Receivables are disclosed by account age
| Account age | Balance at the end of the period |
| Within 1 year | 3,786,981,476.31 |
| 1 ~ 2 years | 54,216,014.16 |
| 2 to 3 years | 15,247,206.47 |
| Over 3 years | 15,902,264.48 |
| Subtotal | 3,872,346,961.42 |
| Less: Bad debt provisions | 186,727,012.13 |
| Total | 3,685,619,949.29 |
(2) Disclosure of accounts receivable classification
| Category | Balance at the end of the period | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Percentage (%) | Amount | Credit loss rate (%) | ||
| Category | Balance at the end of the period | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Percentage (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 4,715,115.32 | 0.12 | 4,715,115.32 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 3,867,631,846.10 | 99.88 | 182,011,896.81 | 4.71 | 3,685,619,949.29 |
| Including: account age combination | 3,127,809,201.36 | 80.77 | 182,011,896.81 | 5.82 | 2,945,797,304.55 |
| Risk-free combination | 739,822,644.74 | 19.11 | 739,822,644.74 | ||
| Total | 3,872,346,961.42 | 100.00 | 186,727,012.13 | 4.82 | 3,685,619,949.29 |
(Continued)
| Category | Beginning balance | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Percentage (%) | Amount | Credit loss rate (%) | ||
| Accounts receivable with bad debt provisions accrued separately | 4,715,115.32 | 0.12 | 4,715,115.32 | 100.00 | |
| Accounts receivable with bad debt provisions accrued according to the combination | 3,779,130,839.10 | 99.88 | 230,339,143.83 | 6.10 | 3,548,791,695.27 |
| Including: account age combination | 3,019,555,812.57 | 79.81 | 230,339,143.83 | 7.63 | 2,789,216,668.74 |
| Risk-free combination | 759,575,026.53 | 20.07 | 759,575,026.53 | ||
| Total | 3,783,845,954.42 | 100.00 | 235,054,259.15 | 6.21 | 3,548,791,695.27 |
1) Accounts receivable for which bad debt reserves are accrued individually:
| Name | Balance at the end of the period | |||
| Book balance | Bad debt provision | Credit loss rate (%) | Reason for appropriation | |
| Unit 1 | 4,715,115.32 | 4,715,115.32 | 100.00 | It is expected to be difficult to recover in full |
| Total | 4,715,115.32 | 4,715,115.32 | 100.00 | |
2) In the combination, the accounts receivable with bad debt provisions accrued by account age combination:
| Account age | Book balance | Bad debt provision | Credit loss rate (%) |
| Within 1 year | 3,047,158,831.57 | 152,357,941.57 | 5.00 |
| 1 ~ 2 years | 54,216,014.16 | 10,843,202.84 | 20.00 |
| 2 to 3 years | 15,247,206.47 | 7,623,603.24 | 50.00 |
| Over 3 years | 11,187,149.16 | 11,187,149.16 | 100.00 |
| Total | 3,127,809,201.36 | 182,011,896.81 | 5.82 |
(3) Provision for bad debt accrued, recovered or reversed in the current period
| Category | Beginning balance | Recovery or reversal in the current period | Balance at the end of the period |
| Single accrual | 4,715,115.32 | 4,715,115.32 | |
| Account age combination | 230,339,143.83 | 48,327,247.02 | 182,011,896.81 |
| Total | 235,054,259.15 | 48,327,247.02 | 186,727,012.13 |
[Note] There was no significant recovery or reversal of bad debt provisions during the current period.
(4) Accounts receivable actually written off in current period:
No.
(5) Accounts receivable of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Balance at the end of the period of accounts receivable | Percentage (%) in the total balance at the end of the period of accounts receivable | Balance of provision for bad debts at the end of the period |
| First | 1,099,224,286.67 | 28.39 | 54,961,214.15 |
| Second | 669,717,406.78 | 17.29 | |
| Third | 322,068,295.62 | 8.32 | 16,103,414.78 |
| Fourth | 281,752,770.21 | 7.28 | 14,087,638.51 |
| Fifth | 138,438,223.70 | 3.58 | 6,921,911.19 |
| Total | 2,511,200,982.98 | 64.86 | 92,074,178.63 |
(6) Accounts receivable derecognized due to the transfer of financial assets
No.
(7) Assets and liabilities formed due to the transfer and continuous involvement of accounts receivableNo.
2. Other receivables
| Item | Balance at the end of the period | Beginning balance |
| Dividends receivable | 2,932,373.42 | |
| Other receivables [Note 1] | 2,076,879,180.43 | 2,304,222,611.24 |
| Total | 2,076,879,180.43 | 2,307,154,984.66 |
[Note 1] Other receivables in the table above refer to other receivables after deduction of interest receivables anddividends receivable;
[Note 2] The Company has no interest receivable balance at the end and the beginning of the period.
(1) Dividends receivable
1) Classification of dividends receivable
| Item | Balance at the end of the period | Beginning balance |
| Dividends receivable | 2,932,373.42 | |
| Total | 2,932,373.42 |
2) Significant dividends receivable aged over 1 year
No.
(2) Other receivables
1) Other receivables classified by nature
| Nature of money | Ending book balance | Beginning book balance |
| Current and free-risk payments | 2,083,804,977.50 | 2,310,790,456.35 |
| Nature of money | Ending book balance | Beginning book balance |
| Less: Bad debt provisions | 6,925,797.07 | 6,567,845.11 |
| Total | 2,076,879,180.43 | 2,304,222,611.24 |
2) Accrual of bad debt reserves
| Bad debt provision | Phase I | Phase 2 | Phase 3 | Total |
| Next 12 months Expected credit losses | The entire duration Expected credit losses (no credit impairment) | The entire duration Expected credit losses (credit impairment occurred) | ||
| Balance as at January 1, 2021 | 4,173,300.51 | 2,394,544.60 | 6,567,845.11 | |
| Appropriation for the current period | 2,612,830.06 | 2,612,830.06 | ||
| Reserved in the current period | 2,218,485.72 | 2,218,485.72 | ||
| Wrote-off in the current period | 36,392.38 | 36,392.38 | ||
| Balance on December 31, 2021 | 1,918,422.41 | 5,007,374.66 | 6,925,797.07 |
3) Disclosure by aging
| Account age | Book balance |
| Within 1 year | 2,064,254,626.85 |
| 1 ~ 2 years | 18,140,539.35 |
| 2 to 3 years | 61,089.01 |
| Over 3 years | 1,348,722.29 |
| Subtotal | 2,083,804,977.50 |
| Less: Bad debt provisions | 6,925,797.07 |
| Total | 2,076,879,180.43 |
4) Bad debt reserves accrued, recovered or reversed in the current period
| Category | Beginning balance | Change of the current period | Balance at the end of the period | ||
| Appropriation | Recovered or reversed | Wrote-off | |||
| Account age combination | 6,567,845.11 | 2,612,830.06 | 2,218,485.72 | 36,392.38 | 6,925,797.07 |
| Total | 6,567,845.11 | 2,612,830.06 | 2,218,485.72 | 36,392.38 | 6,925,797.07 |
5) Other receivables actually wrote off in the current period
| Item | Wrote-off amount |
| Unit 1 | 36,392.38 |
[Note] There was no significant writing-off of other receivables during the current period.
6) Other receivables of top 5 debtors in the balance at the end of the period collected by the debtor
| Name of entity | Nature of money | Balance at the end of the period | Account age | Proportion in total closing balance of other receivables (%) | Balance of provision for bad debts at the end of the period |
| First | Risk-free fund | 1,250,437,686.09 | Within 1 year | 60.01 | |
| Second | Risk-free fund | 255,969,551.84 | Within 1 year | 12.28 | |
| Third | Risk-free fund | 185,641,672.21 | Within 1 year | 8.91 | |
| Fourth | Risk-free fund | 173,610,000.00 | Within 1 year | 8.33 | |
| Fifth | Risk-free fund | 104,136,437.19 | Within 1 year | 5.00 | |
| Total | 1,969,795,347.33 | 94.53 |
7) Receivables involving government subsidies
No.
8) Other receivables derecognized due to the transfer of financial assets
No.
9) Assets and liabilities formed due to the transfer and continuous involvement of other receivablesNo.
3. Long-term equity investments
| Item | Balance at the end of the period | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investments to subsidiaries | 20,871,011,854.66 | 20,871,011,854.66 | 17,421,936,741.10 | 17,421,936,741.10 | ||
| Investments to associated enterprises and joint ventures | 9,019,517,140.98 | 1,940,009.35 | 9,017,577,131.63 | 7,199,360,635.26 | 1,940,009.35 | 7,197,420,625.91 |
| Total | 29,890,528,995.64 | 1,940,009.35 | 29,888,588,986.29 | 24,621,297,376.36 | 1,940,009.35 | 24,619,357,367.01 |
(1) Investments to subsidiaries
| Name of invested entities | Beginning balance (book value) | Increase/Decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional Investment | Decreased Investment | Accrual of provision for impairment | Others | ||||
| Gree (Brazil) Electric Appliances Co., Ltd. | 659,342,914.36 | 659,342,914.36 | |||||
| Gree (Chongqing) Electric Appliances Co., Ltd. | 223,100,000.00 | 223,100,000.00 | |||||
| GREE Shanghai Air Conditioners Sales Co., Ltd. | 1,800,000.00 | 1,800,000.00 | |||||
| Zhuhai Gree Group Finance Company Limited | 4,040,371,239.99 | 4,040,371,239.99 | |||||
| Zhuhai Gree Electrical Co., Ltd. | 1,684,680,359.95 | 1,684,680,359.95 | |||||
| Zhuhai Landa Compressor Co., Ltd. | 968,225,519.93 | 968,225,519.93 | |||||
| Zhuhai Gree Xinyuan Electronics Co., Ltd. | 154,290,096.61 | 154,290,096.61 | |||||
| Zhuhai Gree TOSOT Home Appliances Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Zhuhai Kaibang Motor Manufacturing Co., Ltd. | 83,860,929.67 | 83,860,929.67 | |||||
| Gree (Hefei) Electric Appliances Co., Ltd. | 505,370,626.10 | 505,370,626.10 | |||||
| Name of invested entities | Beginning balance (book value) | Increase/Decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional Investment | Decreased Investment | Accrual of provision for impairment | Others | ||||
| Gree Hong Kong Electric Appliances Sales Co., Ltd. | 472,879.08 | 472,879.08 | |||||
| Zhuhai Gree Dakin Device Co., Ltd. | 283,117,574.47 | 283,117,574.47 | |||||
| Zhuhai Gree Daikin Precision Mold Co., Ltd. | 201,911,186.86 | 201,911,186.86 | |||||
| Gree (ZhongShan) Small Home Appliances Co., Ltd | 30,000,000.00 | 30,000,000.00 | |||||
| Gree (Zhuhai) Green Refrigeration Technology Center Co., Ltd. | 676,040,000.00 | 676,040,000.00 | |||||
| Zhuhai HVAC Equipment Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Fortune Electric (Wuhan) Co., Ltd. | 600,000,000.00 | 600,000,000.00 | |||||
| Gree (Zhengzhou) Electric Appliances Co., Ltd. | 720,000,000.00 | 720,000,000.00 | |||||
| Gree Green Renewable Resources (Zhengzhou) Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Hunan Green Renewable Resources Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Wuhu Green Renewable Resources Co., Ltd. | 2,000,000.00 | 2,000,000.00 | |||||
| Gree (Shijiazhuang) Small Home Appliances Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| Gree (Wuhu) Electric Appliances Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||
| Shijiazhuang Green Renewable Resources Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Gree (Shijiazhuang) Electric Appliances Co., Ltd. | 98,940,059.97 | 98,940,059.97 | |||||
| Tianjin Green Renewable Resources Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Zhuhai Ligao Precision Manufacturing Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Changsha Gree HVAC Equipment Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Name of invested entities | Beginning balance (book value) | Increase/Decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional Investment | Decreased Investment | Accrual of provision for impairment | Others | ||||
| Zhuhai IVP Information Technology Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Gree TOSOT (Suqian) Home Appliances Co., Ltd. | 140,000,000.00 | 140,000,000.00 | |||||
| Wuhu Green Precision Manufacturing Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Zhuhai Gree New Material Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Zhuhai GREE Intelligent Equipment Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Zhuhai Hengqin GREE Business Factoring Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Zhuhai Gree Precision Mold Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Gree (Wuhan) Precision Mold Co., Ltd. | 80,000,000.00 | 20,000,000.00 | 100,000,000.00 | ||||
| Zhuhai GREE Intelligent Equipment Technology Research Institute Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Gree Energy Environment Technology Co., Ltd. | 200,000,000.00 | 200,000,000.00 | |||||
| Gree (Wuhan) HVAC Equipment Co., Ltd. | 40,000,000.00 | 60,000,000.00 | 100,000,000.00 | ||||
| Gree (Hangzhou) Electric Appliances Co., Ltd. | 550,000,000.00 | 550,000,000.00 | |||||
| Zhuhai Gree Info Technology Co., Ltd. | 510,000.00 | 510,000.00 | |||||
| Gree (Wu'an) Precision Equipment Manufacturing Co., Ltd. | 210,000,000.00 | 210,000,000.00 | |||||
| Zhuhai Gree Transportation Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Gree (Luoyang) Electric Appliances Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Gree (Nanjing) Electric Appliances Co., Ltd. | 504,000,000.00 | 196,000,000.00 | 700,000,000.00 | ||||
| Zhuhai Gree Material Supply Co., Ltd. | 150,000,000.00 | 150,000,000.00 | |||||
| Name of invested entities | Beginning balance (book value) | Increase/Decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional Investment | Decreased Investment | Accrual of provision for impairment | Others | ||||
| Gree (Chengdu) Electric Appliances Co., Ltd. | 400,000,000.00 | 400,000,000.00 | |||||
| Hefei Kinghome Electrics Co., Ltd. | 1,247,087,108.76 | 1,247,087,108.76 | |||||
| Zhuhai Zero Boundary Integrated Circuit Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Lianyun Technology Co., Ltd. | 40,000,000.00 | 40,000,000.00 | |||||
| Zhuhai Gree Electormechanical Engineering Co., Ltd | 149,092,300.30 | 149,092,300.30 | |||||
| Zhuhai Green Renewable Resources Co., Ltd | 50,000,000.00 | 50,000,000.00 | |||||
| Zhuhai Gree Lvkong Technology Co., Ltd. | 270,000,000.00 | 270,000,000.00 | |||||
| Gree (Luoyang) Washing Machine Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Guochuang Energy Internet Innovation Center (Guangdong) Co., Ltd. | 22,500,000.00 | 22,500,000.00 | |||||
| Gree (Anji) Precision Mold Co., Ltd. | 60,000,000.00 | 18,800,000.00 | 78,800,000.00 | ||||
| Songyuan Grain Group Co., Ltd. | 230,223,945.05 | 230,223,945.05 | |||||
| Gree Electric (Zhuhai Gaolan Port) Co., Ltd. | 1,000,000,000.00 | 1,000,000,000.00 | |||||
| Zhuhai Gejian Medical Technology Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||
| Chengdu Gree Xinhui Medical Equipment Co., Ltd. | 75,000,000.00 | 75,000,000.00 | |||||
| Gree (Ganzhou) Electric Appliances Co., Ltd. | 80,000,000.00 | 20,000,000.00 | 100,000,000.00 | ||||
| Gree E-commerce Co., Ltd. | 100,000,000.00 | 100,000,000.00 | |||||
| Changsha Kinghome Electrics Co., Ltd. | 6,000,000.00 | 6,000,000.00 | |||||
| Gree Electric (Linyi) Co., Ltd. | 200,000,000.00 | 200,000,000.00 | |||||
| Name of invested entities | Beginning balance (book value) | Increase/Decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional Investment | Decreased Investment | Accrual of provision for impairment | Others | ||||
| Gree Altairnano New Energy Inc. | 1,828,275,113.56 | 1,828,275,113.56 | |||||
| Gree (Zhuhai Hengqin) GREE Development Co., Ltd. | 1,000,000,000.00 | 1,000,000,000.00 | |||||
| Total | 17,421,936,741.10 | 3,449,075,113.56 | 20,871,011,854.66 | ||||
(2) Investments to associated enterprises and joint ventures
| Name of invested entities | Beginning balance | Increase/Decrease in the current period | Balance at the end of the period | |||||||
| Original value | Provision for impairment | Increase/decrease investment | Profit and losses on investment recognized by equity method | Adjustment of Other Comprehensive Incomes | Other equity changes | Declaration and distribution of cash dividends or profits | Other deductions | Original value | Provision for impairment | |
| I. Associated enterprises | ||||||||||
| Gree (Vietnam) Electric Appliances, Inc. | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | 1,940,009.35 | ||||||
| Liaowang All Media Communication Co., Ltd. | 36,052,960.09 | 1,332,591.91 | 37,385,552.00 | |||||||
| Beijing Gree Technology Co., Ltd. | 2,294,251.09 | -237,069.32 | 2,057,181.77 | |||||||
| Chongqing Pargo Mechanical Equipment Co., Ltd. | 11,249,230.03 | -13,498,800.00 | 2,249,569.97 | |||||||
| Wuhan Digital Design and Manufacturing Innovation Center Co., Ltd. | 14,729,087.92 | 212,951.68 | 14,942,039.60 | |||||||
| Hunan Guoxin Semiconductor Technology Co., Ltd. | 20,099,845.47 | 13,817.45 | 108,922.33 | 20,004,740.59 | ||||||
| Name of invested entities | Beginning balance | Increase/Decrease in the current period | Balance at the end of the period | |||||||
| Original value | Provision for impairment | Increase/decrease investment | Profit and losses on investment recognized by equity method | Adjustment of Other Comprehensive Incomes | Other equity changes | Declaration and distribution of cash dividends or profits | Other deductions | Original value | Provision for impairment | |
| Zhuhai Ronglin Equity Investment Partnership (Limited Partnership) | 7,061,709,059.56 | -18,046,764.90 | 1,849,833,156.32 | 8,893,495,450.98 | ||||||
| Henan Yuze Finance Leasing Co., Ltd. | 51,286,191.75 | 1,569,732.71 | 1,106,576.00 | 51,749,348.46 | ||||||
| Total | 7,199,360,635.26 | 1,940,009.35 | -13,498,800.00 | -12,905,170.50 | 1,849,833,156.32 | 3,272,680.10 | 9,019,517,140.98 | 1,940,009.35 | ||
4. Operating revenues and operating costs
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 111,783,657,570.87 | 79,364,424,299.73 | 101,918,116,676.30 | 70,442,870,159.78 |
| Other business | 5,718,557,388.28 | 5,212,016,098.84 | 5,923,673,498.19 | 5,565,482,185.50 |
| Total | 117,502,214,959.15 | 84,576,440,398.57 | 107,841,790,174.49 | 76,008,352,345.28 |
5. Income from investment
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment income calculated by the equity method | -12,905,170.50 | -12,168,894.57 |
| Investment income from conforming of trading financial assets | 35,444,353.04 | 213,050,762.46 |
| Dividend shares confirmed in long-term equity investment audited by cost method | 2,526,350,566.25 | 12,177,372,543.12 |
| Others | 411,276,921.75 | 24,372,625.28 |
| Total | 2,960,166,670.54 | 12,402,627,036.29 |
ⅩⅤ Supplementary information
1. Detailed list of non-recurring profit and loss
| Item | Amount | Description |
| Gains from disposal of non-current assets | -7,498,891.48 | For details, see Note (V) 63, Note (V) 64, and Note (V) 65 |
| Government subsidies included in the current profit and loss (closely related to the business of the enterprise, except the government subsidies entitled according to the unified national standard quota or quantity) | 875,778,734.20 | For details, see Note (V) 58 and Note (V) 64 |
| Capital occupation fee collected from the non-financial institution and recorded into the current gains and losses | 6,234,097.19 | |
| In addition to the effective hedging business related to the Company's normal business operations, the gains and losses from fair value changes generated by holding trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, and investment incomes obtained from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other debt investment | 369,460,356.97 | |
| Reversal of impairment provision for the accounts receivable for which an independent impairment test is conducted | 16,844,984.00 | |
| Non-operating incomes and expenditures other than the above items | 58,510,843.19 | For details, see Note (V) 64 and Note (V) 65 |
| Other profit and loss items that conform to the definition of non-recurring profit and loss | 13,691,263.12 | |
| Subtotal | 1,333,021,387.19 | |
| Less: Influence amount of income tax | 82,923,289.84 | |
| Affected amount of minority shareholders' equity | 36,416,620.04 |
| Item | Amount | Description |
| Total | 1,213,681,477.31 | -- |
2. Rate of return on net assets and earnings per share
| Profit in the reporting period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profit attributable to shareholders of the parent company | 21.34% | 4.04 | 4.04 |
| Net profit attributable to common shareholders after deducting non-recurring profits and losses | 20.21% | 3.82 | 3.82 |
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
April 30, 2022