Zhejiang Supor Co., Ltd.2023 Annual Report
March 2024
SECTION I IMPORTANT NOTES, TABLE OF CONTENTS AND
DEFINITIONSThe Board of Directors and the Board of Supervisors of Zhejiang Supor Co.,Ltd (hereinafter referred to as the "Company") and all its directors, supervisorsand senior executives warrant that this annual report is true, accurate andcomplete, and does not contain any fictitious statements, misleading informationor significant omissions; all directors, supervisors and senior executives of theCompany undertake, separately and jointly, all responsibilities in relation to thetruth, accuracy and completeness hereof.
Mr. Thierry de LA TOUR D'ARTAISE, person in charge of the Company,and Mr. Xu Bo, person in charge of accounting and person in charge of accountingdepartment (accountant in charge), hereby confirm that the financial statementenclosed in this Annual Report is true, accurate and complete.
All directors have attended the Board Meeting in person.
It is of great uncertainty, for whether it can be realized or not depends onmultiple factors, including market change and effort of management team. Pleasebe careful of investment risks.
As for the risk factors confronted by the Company, see Part 11 "Prospectsfor Future Development" of SECTION III "DISCUSSION AND ANALYSIS OFTHE MANAGEMENT" for details.
The profit distribution plan adopted at this Board Meeting specifies that:
based on 796,891,157 shares, the Company distributes cash dividend of RMB
27.30 per 10 shares (tax-inclusive) to all shareholders, and total amount of cashdividends is RMB 2,175,512,858.61, issues 0 bonus shares (tax-inclusive) and willnot convert capital reserves to capital.
Table of Contents
SECTION I IMPORTANT NOTES, TABLE OF CONTENTS AND DEFINITIONS ...... 2
SECTION II COMPANY FILE AND MAJOR FINANCIAL INDICATORS ...... 6
SECTION III DISCUSSION AND ANALYSIS OF THE MANAGEMENT ...... 10
SECTION IV CORPORATION GOVERNANCE ...... 29
SECTION V SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES ...... 55
SECTION VI SIGNIFICANT EVENTS ...... 60
SECTION VII CHANGES IN SHARE CAPITAL AND PARTICULARS ABOUT SHAREHOLDERS ...... 70
SECTION VIII INFORMATION ON PREFERRED SHARE ...... 79
SECTION IX BONDS ...... 80
SECTION X FINANCIAL STATEMENT ...... 81
CATALOG OF REFERENCE DOCUMENTSI. 2023 Annual Report of the Company and Abstract with signature of legal representative;II. Financial statements with signature of legal representative, person in charge of accounting and person in charge of accountingdepartment and seal of the Company;III. Original of audit report with seal of accounting firm and signature of certified public accountants (CPA);IV. Original of all documents and announcements published in newspapers designated by CSRC during the reporting period.Reference documents above archived at the Securities Department of the Company.
Definitions
Items to be Defined | means | Definitions |
SZSE | means | Shenzhen Stock Exchange |
CSRC | means | China Securities Regulatory Commission |
CSDCC | means | Shenzhen Branch of China Securities Depository and Clearing Corporation Limited |
The Company/this Company/the Group | means | Zhejiang Supor Co., Ltd. |
SEB Internationale | means | SEB INTERNATIONALE S.A.S |
SEB Group | means | SEB S.A. |
Zhejiang Supor Electrical | means | Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd. |
Shaoxing Supor | means | Zhejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd. |
Supor Vietnam | means | Supor (Vietnam) Co., Ltd. |
Wuhan Recycling | means | Wuhan Supor Recycling Co., Ltd. |
Wuhan Supor Cookware | means | Wuhan Supor Cookware Co., Ltd. |
Wuhan Supor Pressure Cooker | means | Wuhan Supor Pressure Cooker Co., Ltd. |
Omegna | means | Hangzhou Omegna Commercial Trade Co., Ltd. |
Shanghai Marketing | means | Shanghai Supor Cookware Marketing Co., Ltd. |
P&R Products | means | Zhejiang Supor Plastic & Rubber Co., Ltd. |
Yuhuan Sales Company | means | Yuhuan Supor Cookware Sales Co., Ltd. |
SEADA | means | SOUTH EAST ASIA DOMESTIC APPLIANCES PTE. LTD. |
AFS | means | AFS VIETNAM MANAGEMENT CO.LTD. |
Shanghai WMF | means | Shanghai WMF Enterprise Development Co., Ltd. |
Zhejiang WMF | means | Zhejiang WMF Housewares Co., Ltd. |
Shaoxing Supor Housewares | means | Zhejiang Shaoxing Supor Household Products Co., Ltd. |
Zhejiang Supor LKA | means | Zhejiang Supor Large Kitchen Appliance Co., Ltd. |
Supor Water Heater | means | Zhejiang Supor Water Heater Co., Ltd. |
GSIM or Indonesian Company | means | PT Groupe SEB Indonesia MSD |
Hainan Supor E-commerce Company | means | Hainan Supor E-Commerce Co., Ltd. |
Hainan Tefal Trading Company | means | Hainan Tefal Trading Co., Ltd. |
2021 Equity Incentive Plan | means | 2021 Restricted Stock Incentive Plan (Draft) |
2022 Equity Incentive Plan | means | 2022 Restricted Stock Incentive Plan (Draft) |
2023 Equity Incentive Plan | means | 2023 Stock Option Incentive Plan (Draft) |
Performance Incentive Fund | means | Administration Measures for the Performance Incentive Fund |
SECTION II COMPANY FILE AND MAJOR FINANCIAL
INDICATORS
I. Company Information
Short Form of the Stock | Supor | Stock Code | 002032 |
Short Form of the Original Stock (if any) | None | ||
Stock Exchange for Stock Listing | Shenzhen Stock Exchange | ||
Chinese Name of the Company | Zhejiang Supor Co., Ltd. | ||
Short Form of Chinese Name of the Company | Supor | ||
English Name of the Company (if any) | ZHEJIANG SUPOR CO., LTD. | ||
Short Form of English Name of the Company (if any) | SUPOR | ||
Legal Representative | Thierry de LA TOUR D’ARTAISE | ||
Registration Place | Damaiyu Economic Development Zone, Yuhuan, Zhejiang | ||
Postal Code | 317604 | ||
Historical Change Records of the Company's Registered Address | None | ||
Office Address | 15F of Supor Building, No.1772 Jianghui Road, New & High Tech Development Zone, Hangzhou, China | ||
Postal Code | 310051 | ||
Website | www.supor.com.cn | ||
002032@supor.com |
II. Contact Person and Contact Information
Board Secretary | Representative of Securities Affairs | |
Name | Ye Jide | Fang Lin |
Address | Securities Department at 23F of Supor Building, No.1772 Jianghui Road, New & High Tech Development Zone, Hangzhou, China | Securities Department at 23F of Supor Building, No.1772 Jianghui Road, New & High Tech Development Zone, Hangzhou, China |
Tel. | 0571-86858778 | 0571-86858778 |
Fax | 0571-86858678 | 0571-86858678 |
yjd@supor.com | flin@supor.com |
III. Place for Information Disclosure and Archiving
Securities exchange websites where the Company discloses the annual report | Securities Times, Securities Daily and China Securities Journal |
Names and websites of medias where the Company discloses the annual report | www.cninfo.com.cn |
Place for archiving of the Company's annual report: | Securities Department of the Company |
IV. Changes of Registration
Unified social credit code | 913300007046976861 |
Change of main business since listing of the Company (if any) | No change during the reporting period |
Change of controlling shareholders (if any) | No change during the reporting period |
V. Other Relevant Information
Certified Public Accountants engaged by the Company
Name of the Certified Public Accountants | KPMG Huazhen LLP (Special General Partnership) |
Office Address of the Certified Public Accountants: | 8F, East 2 Office Building, Dongfang Square, No.1 East Chang'an Avenue, Dongcheng District, Beijing City |
Name of the Signatory Accountants | Huang Feng, Jin Yang |
Sponsor institution engaged by the Company for performing continuous supervision duties during the reporting period
□ Applicable ? Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties during the reporting period
□ Applicable ? Not applicable
VI. Major Accounting Data and Financial Indicators
Does the company need to retroactively adjust or restate previous year's accounting data?
□ Yes ? No
2023 | 2022 | Increase/decrease | 2021 | |
Operating income (RMB) | 21,303,948,642.66 | 20,170,527,516.66 | 5.62% | 21,585,331,407.47 |
Net profit attributable to shareholders of listed company (RMB) | 2,179,798,147.27 | 2,067,659,526.97 | 5.42% | 1,943,943,608.94 |
Net profit attributable to shareholders of listed company with non-recurring profit or loss deducted (RMB) | 1,994,465,695.85 | 1,888,197,965.28 | 5.63% | 1,858,036,556.80 |
Net cash flows from operating activities (RMB) | 2,034,909,336.20 | 3,159,955,245.84 | -35.60% | 2,049,881,568.69 |
Basic earnings per share (RMB/share) | 2.719 | 2.565 | 6.00% | 2.400 |
Diluted earnings per share (RMB/share) | 2.719 | 2.564 | 6.05% | 2.395 |
Weighted average return on net assets | 34.62% | 27.89% | Increased by 6.73 percentage points | 26.81% |
End of 2023 | End of 2022 | Increase/decrease | End of 2021 | |
Total assets (RMB) | 13,106,703,607.00 | 12,952,655,903.47 | 1.19% | 13,899,456,422.16 |
Net asset attributable to shareholders of listed company (RMB) | 6,345,333,020.11 | 7,036,084,863.54 | -9.82% | 7,622,639,752.86 |
The Company's net profit before or after non-recurring profit and loss are deducted for the last three fiscal years, whichever is lower,is negative, and the audit report for the latest year indicates uncertainty about its continuing operation ability
□ Yes ? No
Net profit before or after non-recurring profit and loss are deducted, whichever is lower, is negative
□ Yes ? No
VII. Financial Data Difference on Principle of Domestic and Oversea Accounting
1. Net profit and net assets discrepancies in financial statements disclosed separately under InternationalAccounting Standards and Chinese Accounting Standards
□ Applicable ? Not applicable
No net profit and net assets discrepancies in financial statements disclosed separately under International Accounting Standards andChinese Accounting Standards existed during the reporting period.
(2) Net profit and net assets discrepancies in financial statements disclosed separately under OverseasAccounting Standards and Chinese Accounting Standards
□ Applicable ? Not applicable
No net profit and net assets discrepancies in financial statements disclosed separately under Overseas Accounting Standards andChinese Accounting Standards existed during the reporting period.VIII. Quarter-based Major Financial Indicators
Unit: RMB
Q1 | Q2 | Q3 | Q4 | |
Operating income | 4,962,675,878.22 | 5,019,940,562.51 | 5,384,493,499.25 | 5,936,838,702.68 |
Net profit attributable to shareholders of listed company | 437,905,012.74 | 442,713,267.04 | 481,582,219.60 | 817,597,647.89 |
Net profit attributable to shareholders of listed company with non-recurring profit or loss deducted | 426,372,629.58 | 431,048,319.57 | 476,888,535.07 | 660,156,211.63 |
Net cash flows from operating activities | 753,030,095.68 | -197,989,584.56 | 606,709,345.76 | 873,159,479.32 |
Any difference between financial indicators or the total and relevant financial indicators disclosed in quarter-based report or semiannualreport
□ Yes ? No
IX. Non-recurring Profit or Loss Items and Amount
? Applicable □ Not applicable
Unit: RMB
Item | Amount of 2023 | Amount of 2022 | Amount of 2021 | Notes |
Profit and loss on disposal of non-current assets (including the write-off of asset impairment provision) | -6,956,266.86 | -1,189,107.57 | -5,168,056.19 | |
Government subsidies recognized through current profits and losses (except those that are closely related to the Company's normal business operations, comply with national policies and regulations and available according to certain standard quota or continuously affect the Company's profits and losses) | 196,125,471.29 | 199,599,828.51 | 181,083,262.46 | |
Except the effective hedging business related to the normal operation of the Company, profits and losses from fair value changes caused by the finance assets and financial liabilities held by non-financial enterprises, and profits and losses from disposal of financial assets and financial liabilities | 43,047,593.88 | 24,264,345.88 | 5,385,851.68 | |
Capital occupation fee charged to non-financial enterprises included in current profits and losses | 1,849,173.62 | |||
Nonrecurring expenses incurred by the enterprise due to the discontinuation of related operating activities, such as expenses for employee placement. | -527,780.73 | -59,398,185.22 | ||
Other non-operating incomes or expenditures except for the foregoing items | 6,289,885.37 | 9,796,376.97 | 6,654,792.26 | |
Minus: influenced amount of income tax | 52,980,777.54 | 52,414,885.25 | 43,945,276.71 | |
Influenced amount of minority shareholders' equities (after tax) | 193,454.72 | 67,216.12 | 554,509.76 | |
Total | 185,332,451.42 | 179,461,561.69 | 85,907,052.14 | -- |
Other specific circumstances of other items of profits and losses complying with the definition of non-recurring profits or losses:
□ Applicable ? Not applicable
The Company does not have other specific circumstances of other items of profits and losses complying with the definition of non-recurring profits or losses.Description of defining non-recurring profits or losses items listed in the Explanatory Announcement No.1 on Disclosure of theInformation of Companies Offering Their Securities to the Public -- Non-recurring Profit or Loss as recurring profits and losses
□ Applicable ? Not applicable
The Company does not have the description of defining non-recurring profits or losses items listed in the Explanatory AnnouncementNo.1 on Disclosure of the Information of Companies Offering Their Securities to the Public -- Non-recurring Profit or Loss as recurringprofits and losses.
SECTION III DISCUSSION AND ANALYSIS OF THE
MANAGEMENTI. Industrial Situation of the Company in the Reporting Period
Since 2023, industries such as transportation, tourism, and catering services are the first to pick up quick recovery. However,consumer demands in other industries, including cookware and small domestic appliances, are relatively weaker. Thanks to excellentchannel operation and management capabilities and strong product competitiveness, the Company has achieved more satisfactoryperformance than the industry average under the background of the current stress on the consumer market as a whole.
In the field of open fire cookware in 2023, the growth rate of online retail slowed down, and the conventional e-commerce wasstressful, with interest-based e-commerce and live streaming e-commerce bringing new vitality to the industry, which further divertedthe purchasing channels of consumers. Supor actively responds to the varied needs of online and offline consumers, adoptsdigitalization as an anchoring point, constantly explores new models to match consumer demand, and continuously builds competitiveadvantages. According to monitoring data of AVC, the online cookware market share of Supor increased by 24% year-on year in 2023,leading the second-ranked brand by more than four times. The total share in the offline market has reached approximately 50% in total,firmly occupying the top position in the industry. From the perspective of product category performance, the categories related to healthconcepts are outrunning the others, such as pressure cookers, casseroles, steamers. From the perspective of product materials, cookwaremade of healthy materials such as stainless steel 316L and titanium are more favored by consumers.
In the field of small domestic appliances, customer demands tend to be more rational due to macroeconomic impacts. Strivingforward under pressure, Supor has achieved a good result that the comprehensive market share of traditional e-commerce and theDouyin channel ranks the first. According to the overall monitoring data of AVC in 2023, the sales performance of Supor's smalldomestic appliances (including the following categories: coffee machines, electric rice cookers, induction hobs, electric pressurecookers, soymilk makers, high-speed blenders, mixers, juicers, electric kettles, electric steamers, health kettles, baked machines, smalldesktop single function ovens, and air fryers) is outrunning the industry average, and their shares in the online and offline markets haveimproved, ranking first and second respectively in the industry. From the perspective of category performance, the rigid-demandcategories such as electric rice cookers have a stable market, and the categories related to health concepts such as electric steamers andsoymilk makers continue with the growth momentum.II. Main Business during the Reporting Period
As China's famous cookware and small domestic appliance R&D and manufacturing company and leading brand, the Companyis also the first listed company in China's cookware industry. Established in 1994, the headquarters of the Company locates in Hangzhouand owning six R&D and manufacture bases located in Yuhuan City, Hangzhou City, Shaoxing City (Yuecheng District and KeqiaoDistrict) in Zhejiang Province, Wuhan City, Hubei Province and Ho Chi Minh City, Vietnam.Supor's main businesses include open fire cookware and kitchen utensil, small domestic appliances, large kitchen appliances andH&PC appliances.
(1) Open fire cookware and kitchen utensils mainly include wok, pressure cooker, frying pan, sauce pan, steamer, ceramic slowcooker, kettle, knife, spatula, thermal pot, thermos & flask, kitchen gadgets, crisper, etc.;
(2) The small domestic appliances mainly include electric rice cooker, electric pressure cooker, induction hob, soymilk maker,electric kettle, juicer, slow cooker, electric steamer, electric hotpot, food processor, baked machine, air fryer, coffee machine, etc.;
(3) The large kitchen appliances mainly include range hood, gas stove, disinfection cabinet, water purifier, embedded steamingoven, integrated stove, water heater, etc.;
(4) The H&PC appliances mainly include air purifier, garment steamers, vacuum cleaner, floor washer and electric iron, electricheater, air-circulating fans, etc..
The Company's cookware and electrical products have been exported to more than 50 countries and regions such as Japan,European and American countries mainly through SEB Group.
III. Core Competitiveness Analysis(I) Superior product innovation capacitySupor has been upholding the philosophy of "People Orientation, Design Driven Product Innovation" over the years, with theadherence on technological leading, green design development, internal and external innovation synergy, and enhancement oninternational cooperation. In 2023, Supor Domestic Appliance Design Center was honorably accredited as a "National Industrial DesignCenter". Under the leadership of the innovation center of the headquarters, the Company further strengthens the collaboration of internaland external R&D resources. Internally, the innovation center continuously improves its innovation incentive mechanism andencourages the continuous innovation in various internal business units. Externally, the Company continuously introduces newprocesses and materials through close cooperation with research institutions, universities, and other organizations, and strengthensinnovation collaboration with SEB Group to a greater extent to introduce more new products and technologies.In terms of the design modules for unfinished products, the Company integrates industrial design, user experience, andconsumption trend into product innovation to further enhance the visual aesthetic feeling, form, and experience of products, addressuser pain points, and bring consumers a better product experience.(II) Steady distribution networkSupor has a reliable distribution team and maintains long-term and sound cooperative relationships with distributors and operators.In terms of online channels, the Company continuously promotes the direct sales, agency and “one-basket” model, and works togetherwith distributors and operators to build a complete matrix of e-commerce stores, providing differentiated product portfolios for differentconsumer groups. In terms of offline channels, the Company has established a great number of point-of-sale terminals and serviceoutlets, and has entered large-scale mainstream supermarkets and stores in the primary and secondary markets, in addition to a highcoverage rate in the O2O channels in the third and fourth markets, ensuring that consumers can purchase the Company's products moreconveniently.(III) Strong R&D and manufacturing capabilitiesSupor has built up six R&D production bases, respectively in Yuhuan City, Hangzhou City, Shaoxing City (Yuecheng and Keqiao)in Zhejiang Province, Wuhan City, Hubei Province and Ho Chi Minh City, Vietnam. In particular, the annual production scale ofWuhan Base and Shaoxing Base ranked the top in the industry. Over the years, the Company has been continuously improving industrialefficiency, and the strong R&D and manufacturing capabilities in the base and the superior R&D team of the Company have robustlysupported the product competitiveness of Supor.
(IV) Synergistic effect of integration with SEBSince 2006, the Company has started to establish strategic cooperation relationship with SEB Group which owns a long historyof more than 160 years with leading market shares of cookware and small domestic appliances worldwide. The powerful cooperationbetween Supor and SEB Group has brought stable export orders to the Company, and increased its overall business size andmanufacturing capacity. Meanwhile, the Company strengthens cooperation with SEB Group in varied fields such as production, R&D,IT, and management, and providing comprehensive support for the Company's development continuously .(V) Advantage of multiple brands and categoriesIn terms of the multi-brand operation, in addition to Supor brand, the Company also introduced a lot of high-end brands underSEB Group, such as WMF, LAGOSTINA, KRUPS, and TEFAL so as to fully cover the high-end brands in small domestic appliances
and kitchen cookware fields. In terms of the category expansion, the Company actively explores new product categories for kitchenappliances, H&PC appliances, personal care appliances, and others on the basis of the existing advantageous categories such as openfire cookware and small domestic appliances. Supor has established a strong competitive advantage with the multi-band and multi-category layout in the domestic market.IV. Main business analysis
During the reporting period, the Company achieved an operating income of RMB 21,303,948,642.66, a year-on-year increase of
5.62%, mainly because the domestic sales kept positive growth with market shares of core categories on both online and offlinechannels gained during reporting period compared with that last year among such challenging market environment. For export business,it has improved obviously since 2023Q3 and the export sales achieved fast growth during reporting period compared with that last year.The net profit attributable to shareholders of listed company was RMB 2,179,798,147.27, a year-on-year increase of 5.42%; and theearnings per share were RMB 2.719, a year-on-year increase of 6.00%. Among them, the realized revenue from the main business ofcookware was RMB 6,056,346,176.44, a year-on-year decrease of 1.07%; the realized revenue from the main business of electricappliances was RMB 14,963,200,632.70, a year-on-year increase of 8.40%; the realized revenue from the main business of domesticsales was RMB 14,937,286,741.50, a year-on-year increase of 0.95%; and the realized revenue from the main business of exportbusiness was RMB 6,110,174,972.63, a year-on-year increase of 18.63%.
1. Overview
(I) Domestic sales during the reporting period
(1) Product strategy
During the reporting period, Supor continued the "consumer-centric" strategy guiding its innovation and development of newproducts, and deeply explored the needs of segmented users under different scenarios by means of internet data, so as to constantprovide smart and ingenious product solutions that meet diversified consumer needs and offer intimate, comprehensive consumerexperiences.In the business of open fire cookware, Supor actively responds to the needs of online and offline target consumer groups throughcontinuous product innovation and iteration, with a focus on making breakthroughs in the key categories. In 2023, the Company hasupgraded the titanium uncoated non-stick wok product, which continues to dictate the "Uncoated and Non-stick" upsurge in thecookware industry. Meanwhile, the Company targeted young generation and small-sized families and launched a hit product, thelightweight thermal-spot nonstick wok, through Red Book influencer recommendations, short video streaming, and in-site&out-sitepromoting to accurately reach the target groups, and to gain incremental market shares, and this product achieved a sale of nearly onemillion pieces in 2023. In terms of drinkware, the Company has continued to promote the strategy of major flagship product, the bigcapacity thermos bottle launched in the year sold nearly one million units, and ranked as the No. 1 on the hot-selling list for severalconsecutive months. At the same time, the Company has successfully launched a series of products such as stainless steel thermos jugsand thermos pots based on profound insights into customer needs, driving the market share of thermos jugs and thermos pots to continueto take the lead.In the business of small domestic appliances, Supor adheres to the differentiated product innovation strategy at all times, andcontinuously rolls out innovative and intelligent products which provide creative functions for healthy and nutritious cooking. On theone hand, the Company's leading position in core rigid-demand categories such as electric rice cookers, electric pressure cookers, andelectric kettles has been further strengthened, and the core product of far-infrared rice cooker has been sold over a million piecesaccumulatively since its launch. On the other hand, the Company is accelerating the layout of small capacity, multifunctional, andoutdoor product lines, actively exploring the market of new sub-categories. The intelligent automatic cooker product and portablecoffee maker product launched by the Company have achieved good sales results, and were respectively awarded as the "No. 1 Salesfor the Category of Automatic Cookers on June 18", "Tmall's No. 1 Sales for the Category of Portable Semi-automatic Coffee Makers
on June 18", and "Douyin's No. 1 Sales for the Category of Portable Coffee Makers on November 11" respectively, with an upsurgingyear-on-year increase.In the business of H&PC appliances, Supor persistently promotes the development of the home appliance category and continuesto strengthen the cleaning category, with the market share of vacuum cleaners improved to the first place among all domestic brandsand to the second place in the industry. In terms of the garment steamer category, Supor continues to keep the leading position in theindustry. According to the monitoring data of AVC, the online market share of Supor's clothes steamer category ranks second in theindustry. Meanwhile, the Company actively develops emerging seasonal product categories such as the electric heaters and air-circulating fans, with a total scale of annual sales exceeding RMB 100 million, which is incubating to become a new engine of salesgrowth.In the business of kitchen appliances, Supor insists on focusing on its main operating categories, rapidly develops and cultivatesdistinct categories, solidifies the foothold in the existing replacement market, and constantly seeks breakthroughs. The "Extreme Fire"gas stove category launched by the Company continues to lead the industry. According to the monitoring data of AVC, the onlinemarket share of Supor's gas stove category remains the first in the industry, and the overall online market share of Super remains in thetop five in the industry in 2023.
(2) Channel strategy
With the accelerated integration of online and offline markets, Supor remained "consumer-centric" and kept optimizing its layoutof channels based on the changes in consumers' purchase path, thereby meeting the needs of various consumers through a multi-channeland multi-mode layout. The Company insisted on winning consumers' trust with high-quality products, and winning distributors' andretailers' support with excellent services.In 2023, the overall growth rate of online retail has slowed down, and the conventional e-commerce is under pressure. With thesignificantly increased cost of customer acquisition, the price war between platforms has become increasingly fierce, and consumerpurchasing channels have been further diverted. Under such background, by actively grasping the varied shopping needs of consumersand through excellent business capabilities in all fields, Supor has maintained a relatively robust trend as a leading brand in the industry,with the market shares of various categories on various platforms have reached new highs. In terms of conventional e-commerce, theCompany continuously expands the sales proportion of mid- to high-end products through the portfolio optimization of product matrixand store matrix, which has further enhanced the market share of mid to high price products. In terms of interest-based e-commerce,the Company has successfully incubated differentiated products such as intelligent automatic cookers, portable coffee makers andfoldable electric kettles on Douyin through the combination of shop livestreaming and influencer promotion. The Company haslaunched specialized models on Pinduoduo to continuously optimize the sales structure on the platform, reasonably control theproportion of high cost-effective single products, and continuously strengthen store operation capabilities with a focus on flagshipstores.In 2023, the landscape and competitive environment of offline retail continues to change, and there is not a significant recoveryin customer flow at the retail terminals of cookware and small domestic appliances. As an industry leader, Supor has always adheredto winning the trust of consumers with excellent product quality, and has gained support from distributors and retailers with strong newproduct expansion capabilities and excellent services. In the offline market, the Company has newly established the promotion projectof "Retail Expansion", and actively launched the "Trade in", brand alliance, cross industry linkage, and other local promotion activitiesin old communities, quasi-new communities, and building materials markets in an environment of fragmented and pre-positioned retailchannels, which helps to keep offline sales relatively stable.In terms of lower-tier markets, the Company continues to improve refined operations with the continued growth of the O2Obusiness. In addition, the instant retail develops rapidly, and the Company's cooperation with platforms such as Meituan Flash Sale andJD.com Home has been further upgraded, which injects new vitality into the offline store ecosystem, further narrows the gap betweenproducts and consumers, and achieves the integration of consumption scenes with household scenes. In terms of B2B business, theCompany has established the credit redemption business with large-scale banks, airline operators, and other large- and medium-sized
enterprises, further expanding the sales channels. Meanwhile, Supor continues to strengthen the cooperation with regional propertydevelopers and decoration companies, expanding the engineering-based kitchen appliance business.
(3) Brand building
In 2023, the Company has expedited the process of brand rejuvenation from multiple dimensions such as consumer insight, productlayout, industrial design, and marketing method, and the proportion of young people in the brand user asset has significantly improved.In terms of consumer insight, the Company deeply explores the needs of young people through the implementation of qualitative andquantitative researches and big data analysis, and has set indicators to continuously track the brand rejuvenation performance. In termsof industrial design, through the trials of different design styles of rejuvenation and the enrichment of color combinations, the Companyhas launched a series of "attractive-appearance" products such as the lightweight thermo-spot non-stick wok and the instant cookingpots. In terms of marketing, the Company continuously makes breakthroughs in the interest position and aesthetic culture of youngpeople through the operation of "Audience + Content", which induces emotional resonance and delivers emotional value.The Company has also conducted a comprehensive upgrade to the e-commerce detail pages, e-commerce packaging, and offlineterminals, which optimizes the online and offline shopping experiences, strengthens the communication between the brand andconsumers, and enhances the brand competitiveness. Meanwhile, the Company also strengthens the private traffic operation and haslaunched the official WeChat mini-program version 2.0 that integrates life inspiration proposals, product usage tips, immersiveshopping, after-sales services, and membership activities, and provides the members with a unique product and service experience andenhance the added value of products and the brand reputation.(II) Export sales during the reporting periodIn the second half of 2023, thanks to the organic growth of SEB Group and its demand for channel-based replenishment ofinventory, the prospect of the Company's export business continues to recover and has achieved a rapid growth throughout the year.
2. Revenues and costs
(1) Structure of operating incomes
Unit: RMB
2023 | 2022 | Increase/decrease YoY (%) | |||
Amount | Percentage to total operating income | Amount | Percentage to total operating income | ||
Total operating income | 21,303,948,642.66 | 100% | 20,170,527,516.66 | 100% | 5.62% |
By industry | |||||
Cookware | 6,056,346,176.44 | 28.43% | 6,121,737,273.97 | 30.35% | -1.07% |
Electric appliances | 14,963,200,632.70 | 70.24% | 13,803,483,799.48 | 68.43% | 8.40% |
Others | 284,401,833.52 | 1.33% | 245,306,443.21 | 1.22% | 15.94% |
By products | |||||
Cooking appliances | 8,892,495,620.60 | 41.74% | 8,506,984,442.90 | 42.18% | 4.53% |
Food processor appliances | 3,483,787,979.06 | 16.35% | 3,086,500,276.55 | 15.30% | 12.87% |
Cookware and utensils | 6,056,346,176.44 | 28.43% | 6,121,737,273.97 | 30.35% | -1.07% |
Other household electric appliances | 2,871,318,866.56 | 13.48% | 2,455,305,523.24 | 12.17% | 16.94% |
By areas | |||||
Domestic sales | 15,107,615,309.80 | 70.91% | 14,975,644,970.69 | 74.25% | 0.88% |
Export sales | 6,196,333,332.86 | 29.09% | 5,194,882,545.97 | 25.75% | 19.28% |
By sales mode | |||||
Direct sales | 2,491,265,297.18 | 11.69% | 2,327,273,967.60 | 11.54% | 7.05% |
Distribution | 12,627,187,506.73 | 59.27% | 12,652,370,630.22 | 62.73% | -0.20% |
OEM | 6,185,495,838.75 | 29.04% | 5,190,882,918.84 | 25.73% | 19.16% |
Remarks: "Others" by industry, "Other domestic electric appliances" by product, and region-based and sales-based modes exceptionallyinclude other business incomes, the same below.
(2) Industry, product, area or sales mode that accounts for more than 10% of the Company's operating income or operatingprofit? Applicable □ Not applicable
Unit: RMB
Operating income | Operating cost | Gross margin | Increase/decrease YoY (%) for operating income | Increase/decrease YoY (%) for operating cost | Increase/decrease YoY (%) for gross margin | |
By industry | ||||||
Cookware | 6,056,346,176.44 | 4,320,256,178.21 | 28.67% | -1.07% | 1.01% | -1.46% |
Electric appliances | 14,963,200,632.70 | 11,141,680,549.71 | 25.54% | 8.40% | 6.24% | 1.51% |
By products | ||||||
Cooking appliances | 8,892,495,620.60 | 6,636,399,009.13 | 25.37% | 4.53% | 2.95% | 1.15% |
Food processor appliances | 3,483,787,979.06 | 2,714,622,203.95 | 22.08% | 12.87% | 9.57% | 2.35% |
Cookware and utensils | 6,056,346,176.44 | 4,320,256,178.21 | 28.67% | -1.07% | 1.01% | -1.46% |
Other household electric appliances | 2,871,318,866.56 | 2,028,851,458.02 | 29.34% | 16.94% | 14.73% | 1.36% |
By areas | ||||||
Domestic sales | 15,107,615,309.80 | 10,771,952,519.69 | 28.70% | 0.88% | 0.35% | 0.38% |
Export sales | 6,196,333,332.86 | 4,928,176,329.62 | 20.47% | 19.28% | 16.37% | 1.99% |
By sales mode | ||||||
Direct sales | 2,491,265,297.18 | 1,404,342,328.21 | 43.63% | 7.05% | 5.76% | 0.69% |
Distribution | 12,627,187,506.73 | 9,377,921,888.23 | 25.73% | -0.20% | -0.34% | 0.10% |
OEM | 6,185,495,838.75 | 4,917,864,632.87 | 20.49% | 19.16% | 16.22% | 2.01% |
If the statistical caliber of the Company's operation business data is adjusted during the reporting period, the main business data for thelatest year after the statistical caliber is adjusted.
□ Applicable ? Not applicable
(3) Practical sales revenue greater than labor income
? Yes □ No
Industrial classification | Item | Unit | 2023 | 2022 | Increase/decrease YoY (%) |
Cookware | Sales volume | pcs/set | 76,737,832 | 71,416,579 | 7.45% |
Output | pcs/set | 43,455,407 | 38,865,026 | 11.81% | |
Stock | pcs/set | 9,247,340 | 10,549,133 | -12.34% | |
Electrical products | Sales volume | pcs/set | 90,512,223 | 82,690,074 | 9.46% |
Output | pcs/set | 59,397,238 | 51,085,806 | 16.27% | |
Stock | pcs/set | 10,372,883 | 10,182,368 | 1.87% | |
Total | Sales volume | pcs/set | 167,250,055 | 154,106,653 | 8.53% |
Output | pcs/set | 102,852,645 | 89,950,832 | 14.34% | |
Stock | pcs/set | 19,620,223 | 20,731,501 | -5.36% |
Descriptions of cause with above 30% change of relevant data on a YoY basis
□ Applicable ? Not applicable
(4) Performance of important sales contracts and purchase contracts signed till this reporting period
□ Applicable ? Not applicable
(5) Structure of operating costs
Category of industry and product
Unit: RMB
Industrial classification | Item | 2023 | 2022 | Increase/decrease YoY (%) | ||
Amount | Proportion of operating cost | Amount | Proportion of operating cost | |||
Cookware | Operating cost | 4,320,256,178.21 | 27.52% | 4,277,114,265.06 | 28.57% | 1.01% |
Electric appliances | Operating cost | 11,141,680,549.71 | 70.97% | 10,486,986,687.23 | 70.06% | 6.24% |
Others | Operating cost | 238,192,121.39 | 1.51% | 205,227,888.28 | 1.37% | 16.06% |
Unit: RMB
Category of product | Item | 2023 | 2022 | Increase/decrease YoY (%) | ||
Amount | Proportion of operating cost | Amount | Proportion of operating cost | |||
Cooking appliances | Operating cost | 6,636,399,009.13 | 42.27% | 6,446,395,980.91 | 43.07% | 2.95% |
Food processor appliances | Operating cost | 2,714,622,203.95 | 17.29% | 2,477,448,255.92 | 16.55% | 9.57% |
Cookware and utensils | Operating cost | 4,320,256,178.21 | 27.52% | 4,277,114,265.06 | 28.57% | 1.01% |
Other household electric appliances | Operating cost | 2,028,851,458.02 | 12.92% | 1,768,370,338.68 | 11.81% | 14.73% |
(6) Change of merger scope during the reporting period
□ Yes ? No
(7) Important change or adjustment for the Company's businesses, products or services during the reporting period
□ Applicable ? Not applicable
(8) Main sales customers and suppliers
Main sales customers
Total amount of sales to top 5 customers (RMB) | 8,867,018,817.23 |
Proportion of total amount of sales of top 5 customers in the year's total sales (%) | 41.63% |
Proportion for related party's sales amount of sales amount of top 5 customers in annual total sales amount | 27.45% |
Information on the Company's top 5 major customers
SN | Customer | Sales amount (RMB) | Proportion in the total sales amount of the year (%) |
1 | SEB S.A. and its subsidiaries | 5,847,094,927.83 | 27.45% |
2 | Customer 1 | 1,298,686,493.62 | 6.10% |
3 | Customer 2 | 975,221,875.17 | 4.58% |
4 | Customer 3 | 412,687,675.57 | 1.94% |
5 | Customer 4 | 333,327,845.04 | 1.56% |
Total | -- | 8,867,018,817.23 | 41.63% |
Instruction for main customers' other cases
□ Applicable ? Not applicable
The Company's main supplier
Total purchasing value from top 5 suppliers (RMB) | 1,275,239,201.21 |
Proportion of total purchase amount of top 5 suppliers in the year's total purchasing value | 9.59% |
Proportion for related party's purchase amount of purchase amount of top 5 suppliers in annual total purchase amount | 0.00% |
Information on the Company's top 5 suppliers
SN | Supplier | Purchasing value (RMB) | Proportion in the total purchase amount of the year (%) |
1 | Supplier 1 | 341,512,061.90 | 2.57% |
2 | Supplier 2 | 277,959,376.46 | 2.09% |
3 | Supplier 3 | 248,469,619.54 | 1.87% |
4 | Supplier 4 | 203,761,108.94 | 1.53% |
5 | Supplier 5 | 203,537,034.37 | 1.53% |
Total | -- | 1,275,239,201.21 | 9.59% |
Instruction for main suppliers' other cases
□ Applicable ? Not applicable
3. Costs
Unit: RMB
2023 | 2022 | Increase/decrease YoY (%) | Descriptions of major changes | |
Sales expenses | 2,297,847,425.74 | 2,156,297,058.63 | 6.56% | |
Administrative expenses | 393,597,966.82 | 374,060,640.28 | 5.22% | |
Financial expenses | -67,629,941.36 | -97,423,287.91 | 30.58% | Mainly due to the decrease in foreign exchange gains compared to the same period last year as a result of RMB exchange rate fluctuations during the reporting period. |
R&D expenses | 431,288,536.29 | 416,259,356.99 | 3.61% |
4. R&D input
? Applicable □ Not applicable
Oriented by consumers' demand, the Company engages in R&D of the differential products that meet kitchen demand and localeating and life habits. The Company lays emphasis on R&D investment, boosts technical innovation actively, further explores productcategory and adds product additional value; respects customer's experience and focuses on all details of consumer use in order to realizesafe, environmentally friendly, convenient and fashionable products. R&D expenditure in this year accounts for 6.80% and 2.02% ofnet assets and operating income audited in the recent period.R&D personnel of the Company
2023 | 2022 | Change proportion | |
Quantity of R&D personnel (person) | 1,372 | 1,363 | 0.66% |
Proportion of R&D personnel | 12.76% | 13.33% | -0.57% |
Educational background structure of R&D personnel | |||
Bachelor's degree | 605 | 567 | 6.70% |
Master's degree | 60 | 53 | 13.21% |
Doctor's degree | 2 | 0 | 100.00% |
Age composition of R&D personnel | |||
< 30 years old | 358 | 381 | -6.04% |
30-40 years old | 669 | 682 | -1.91% |
R&D investment of the Company
2023 | 2022 | Change proportion | |
Amount of R&D input (RMB) | 431,288,536.29 | 416,259,356.99 | 3.61% |
Proportion of R&D input in total operating income | 2.02% | 2.06% | -0.04% |
Capitalization amount of R&D input (RMB) | 0.00 | 0.00 | 0.00% |
Proportion of Capitalization R&D input in R&D input | 0.00% | 0.00% | 0.00% |
Cause and influence of major changes of the Company's R&D personnel composition
□ Applicable ? Not applicable
Reason for large change for proportion of total R&D input in operating income compared with that of last year
□ Applicable ? Not applicable
Reason and rational introduction for large capitalization change of R&D input
□ Applicable ? Not applicable
5. Cash flow
Unit: RMB
Item | 2023 | 2022 | Increase/decrease YoY (%) |
Subtotal of cash inflows from operating activities | 22,567,791,526.90 | 23,863,910,846.37 | -5.43% |
Subtotal of cash outflows from operating activities | 20,532,882,190.70 | 20,703,955,600.53 | -0.83% |
Net cash flows from operating activities | 2,034,909,336.20 | 3,159,955,245.84 | -35.60% |
Subtotal of cash inflows from investing activities | 2,816,155,174.07 | 3,290,816,398.77 | -14.42% |
Subtotal of cash outflows from investing activities | 3,060,601,235.74 | 3,762,872,224.32 | -18.66% |
Net cash flows from investing activities | -244,446,061.67 | -472,055,825.55 | 48.22% |
Subtotal of cash inflows from financing activities | 198,583,388.57 | 11,094,652.76 | 1,689.90% |
Subtotal of cash outflows from financing activities | 2,980,245,622.68 | 2,776,624,440.47 | 7.33% |
Net cash flows from financing activities | -2,781,662,234.11 | -2,765,529,787.71 | -0.58% |
Net increase in cash and cash equivalents | -990,179,816.02 | -47,798,926.68 | -1,971.55% |
Instruction for main influence factors of relevant data with YoY (%) changed seriously? Applicable □ Not applicable
1. The net cash flows from operating activities decreased by 35.60 year-on-year, mainly due to the cash inflow decrease for goods soldand rendering of services during the reporting period.
2. The net cash flows from investing activities increased by 48.22% year-on-year, mainly due to the cash outflow decrease in investingactivities during the reporting period in term deposits and financial products for a period of more than 3 months.
3. The net increase in cash and cash equivalents decreased by 1,971.55% year-on-year, mainly due to the cash inflow decrease inoperating activities during the reporting period.Reason for great change between net cash flow caused by operating activities and annual net profits during the reporting period
□ Applicable ? Not applicable
V. Analysis on Non-main Business
□ Applicable ? Not applicable
VI. Analysis on Assets and Liabilities
1. Significant changes in assets
Unit: RMB
End of 2023 | Beginning of 2023 | Increase/decrease in proportion | Descriptions of major changes | |||
Amount | Percentage to total assets | Amount | Percentage to total assets | |||
Monetary capital | 3,548,277,442.44 | 27.07% | 3,563,140,907.75 | 27.51% | -0.44% | No significant change during the reporting period. |
Accounts receivable | 2,858,247,356.03 | 21.81% | 1,926,518,118.38 | 14.87% | 6.94% | Mainly due to the export accounts receivable increase at the end of the reporting period. |
Inventories | 2,262,683,387.31 | 17.26% | 2,494,922,856.42 | 19.26% | -2.00% | Mainly due to the reasonable control of inventory during the reporting period. |
Long-term equity investment | 61,678,984.35 | 0.47% | 62,196,139.53 | 0.48% | -0.01% | No significant change during the reporting period. |
Fixed assets | 1,243,210,689.64 | 9.49% | 1,303,075,391.03 | 10.06% | -0.57% | No significant change during the reporting period. |
Construction in progress | 26,862,380.61 | 0.20% | 12,005,654.73 | 0.09% | 0.11% | No significant change during the reporting period. |
Right-of-use assets | 223,503,573.14 | 1.71% | 190,718,962.82 | 1.47% | 0.24% | No significant change during the reporting period. |
Short-term borrowings | 199,741,167.36 | 1.52% | 1.52% | Mainly due to the discount of bank acceptance bills of subsidiaries at the reporting period. | ||
Contract liabilities | 862,706,076.18 | 6.58% | 1,153,932,879.53 | 8.91% | -2.33% | Mainly due to the decrease in advance payments from some distributors by subsidiaries during the reporting period. |
Lease obligation | 177,281,125.36 | 1.35% | 150,779,916.58 | 1.16% | 0.19% | No significant change during the reporting period. |
Advance payment | 193,169,455.51 | 1.47% | 339,609,547.02 | 2.62% | -1.15% | Mainly due to the decrease in the prepaid material payments at the end of the reporting period. |
Other current assets | 142,423,696.22 | 1.09% | 450,986,016.76 | 3.48% | -2.39% | Mainly due to the maturity and delivery of term deposit investment at the end of the reporting period. |
Non-current assets due within one year | 285,783,958.92 | 2.18% | 32,157,534.25 | 0.25% | 1.93% | Mainly due to the increase in negotiable certificates of deposit due within one year at the end of the reporting period. |
Other debt investment | 665,522,383.56 | 5.08% | 1,024,794,890.43 | 7.91% | -2.83% | Mainly due to the decrease in negotiable certificates of deposit due over one year at the end of the reporting period. |
High proportion of overseas assets
□ Applicable ? Not applicable
2. Assets and liabilities measured at the fair value
? Applicable □ Not applicable
Unit: RMB
Item | Opening balance | Profit and loss from fair value changes in the current period | Accumulated fair value changes recognized through equity | Impairment loss of the current period | Amount of purchasing of the current period | Amount of selling of the current period | Other changes | Closing balance |
Financial assets | ||||||||
1. Transactional financial assets (excluding derivative financial assets) | 431,382,527.79 | 9,108,058.94 | 450,000,000.00 | 539,352,799.19 | 351,137,787.54 | |||
2. Receivables financing | 235,957,044.34 | 127,575,721.01 | 363,532,765.35 | |||||
3. Other debt investments | 1,056,952,424.68 | 267,798,711.63 | 407,384,328.77 | 33,939,534.94 | 951,306,342.48 | |||
Total | 1,724,291,996.81 | 9,108,058.94 | 717,798,711.63 | 946,737,127.96 | 161,515,255.95 | 1,665,976,895.37 | ||
Financial liabilities | 0.00 | 0.00 |
Content of other changesReceivables financing: As the demand of daily fund management, the Company will discount or transfer an endorsed bill, the businessmode of related bank acceptance bill including not only collect contractual cash flow but sales as the target, so reclass the bankacceptance bill as financial assets at fair value through other comprehensive incomes.Other debt investment: Supor's business model of managing negotiable large deposit certificates is both to collect the contractual cashflow and to sell the negotiable certificates of deposit, which are classified as financial assets at fair value through other comprehensiveincomes. Interest revenue is accrued according to the effective interest rate method during the expected duration.Are there any major changes about the valuation attribute of Company's main assets during the reporting period?
□ Yes ? No
3. Restrictions of assets and rights by the end of reporting period
See 18. "Assets with title or use right restrictions", VII "Notes to items of consolidated financial statements", SECTION X"FINANCIAL REPORT" for details.VII. Investment Situation Analysis
1. General condition
□ Applicable ? Not applicable
2. Significant equity investment to be acquired during the reporting period
□ Applicable ? Not applicable
3. Significant non-equity investment to be handled during the reporting period
□ Applicable ? Not applicable
4. Investments in financial assets
(1) Conditions of the securities investment
□ Applicable ? Not applicable
The Company involves no securities investment during the reporting period.
(2) Derivative investment
? Applicable □ Not applicable
1) Hedging derivative investment during the reporting period
? Applicable □ Not applicable
Unit: RMB 10,000
Derivative investment type | Initial investment amount | Opening balance | Profit and loss from fair value changes in the current period | Accumulated fair value changes recognized through equity | Purchase amount during the reporting period | Sales amount during the reporting period | Closing amount | Proportion of investment amount at the end of the period in the Company's net assets at the end of the reporting period |
Foreign exchange derivatives | 4,744.22 | 4,744.22 | -97.03 | 0 | 80,127.89 | 67,269.21 | 17,602.90 | 2.77% |
Total | 4,744.22 | 4,744.22 | -97.03 | 0 | 80,127.89 | 67,269.21 | 17,602.90 | 2.77% |
Explanation on whether the Company's accounting policies and specific accounting principles of hedging business have significantly changed during the reporting period compared with the previous reporting period | The company recognizes, measures, and presents in accordance with Accounting Standards for Business Enterprises No. 22 -- Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 24 - Hedging, and Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments . There are no significant changes compared to the previous reporting period. | |||||||
Explanation on realized gains and losses during the reporting period | During the reporting period, the company conducted derivative transactions and fair value hedging in accordance with the variety and duration determined by the Board of Directors. During the reporting period, the amount recognized through current profits and losses was RMB -970,300, and the amount recognized through equity was RMB 0. The amount of profit or loss is entirely derived from the net fair value change formed by the forward settlement of foreign exchange and the hedged item. During the reporting period, the Company did not engage in foreign exchange swap business, with no profit or loss or equity impact. | |||||||
Explanation on hedging effect | The value of hedging tools of the Company changed inversely to that of hedged foreign exchange accounts receivable and payable, effectively achieving the risk management objectives. During the reporting period, the Company conducted assessment on the fluctuation of the value of foreign exchange accounts receivable and payable, and signed forward exchange contracts with banks in the same currency. Such hedging tool was one of those approved by the Board of Directors. The execution complied with the internal control requirements and operated within the approved quota to ensure that the hedging tools match the hedged items in the scale, term, and currency. | |||||||
Capital source of derivative investment | Self-owned capital | |||||||
Risk analysis and control | In order to hedge the foreign exchange risk in operating activities, reduce the impact of exchange rate fluctuations, and give full play to the hedging function of foreign exchange derivative transaction, the Company implemented |
measure explanation for derivative holding a position during the reporting period (including but not limited to market risk, liquidity risk, credit risk, operation risk and law risk) | foreign exchange derivative transaction business consistent with its business scale, term, and currency. (I) Risks of conducting foreign exchange derivative transactions 1. Market risks: market risks, such as losses resulted from changes in the price of foreign exchange derivatives due to the fluctuated underlying interest rate, exchange rate or other market price, may arise. 2. Internal control risks: considering the specialty and complexity of foreign exchange derivative transaction business, inadequate internal control mechanisms may lead to risks. 3. Liquidity risks: risk of failure to complete transactions due to lack of market liquidity. 4. Performance risks: foreign exchange derivatives business faces the risk of default due to failed contract fulfillment when the contract expires. 5. Legal risks: changes in relevant laws or violations of the relevant legal system by counterparty, resulting the contract cannot be executed properly, may cause losses to the Company. (II) Risk response measures 1. Clarify the principles of foreign exchange derivative transaction: foreign exchange derivative transaction is based on the hedging principle to avoid risks from exchange rate fluctuations to the greatest extent, and based on market conditions, operation strategies shall be adjusted in time to improve hedging effects. 2. System construction: the Company has established the Management Measures for Foreign Exchange Derivative Transactions, in which the scope of authorization, approval procedures, key operation points, risk management and information disclosure concerning foreign exchange derivative transactions are well defined, so that the conduct and risks of foreign exchange derivative transactions can be effectively regulated. 3. Product selection: prior to any foreign exchange derivative transaction, it's necessary to select an FX derivative that suits the company's business context best, and is highly liquid and risk through a comparative analysis of various counterparties and products, before conducting business. The Company used forward instruments for general hedge and swap contracts for rolling hedge. 4. Counterparty management: be prudent when selecting counterparties for foreign exchange derivatives business. The Company only conducts foreign exchange derivative transaction business with large commercial banks and other foreign exchange organization with legal qualifications, thus avoiding potential default and legal risks. 5. Management by specially-assigned persons: a special working group, set up by the Company's management representatives, Fund Department, Financial Sharing Center, Audit Department, Securities Department and other departments concerned, is responsible for the risk assessment, operation, recording and supervision of foreign exchange derivative transactions. The working group is supposed to decide on emergency mitigations in case of any significant changes in the market. |
Changes in market prices or product fair values of invested derivatives during the reporting period, specific methods used for analysis of the fair value of derivatives and the setting of related assumptions and parameters | The delivered foreign exchange derivatives were recorded as the profit and loss with instruments by our Company. Changes in the fair value of undelivered foreign exchange derivatives were evaluated by the comparison between the exchange rate of the derivative contract and the corresponding forward foreign exchange quotation provided by the contracting bank at the end of the period. |
Litigation-related situation (if applicable) | Not applicable |
As for approval of derivative investment, the Board of Directors will announce disclosure date (if any) | March 31, 2023 |
Special opinion on situations of the Company's derivative investment and risk control from independent directors | In the opinion of the Company's independent directors, the foreign exchange derivatives business carried out by the Company is closely related to the daily operation demand, which is conducive to avoiding the risk of exchange rate fluctuation, enhancing the financial stability of the Company, and meeting the needs of the Company's operation and development. The Company has formulated the Internal Control System of Foreign Exchange Derivatives and relevant risk control measures, which are conducive to strengthening the risk management and control of foreign exchange derivatives transactions. The Company has fulfilled the corresponding approval procedures and information disclosure obligations, and there is no damage to the interests of the Company and all shareholders, especially small and medium shareholders. We agree to carry out foreign exchange derivatives trading business. |
2) Speculation derivative investment during the reporting period
□ Applicable ? Not applicable
During the reporting period, there was no speculative investment on derivatives.
5. Application of capital raised
□ Applicable ? Not applicable
No capital raised was used in reporting periodVIII. Sales for major assets and equity
1. Sales for major assets
□ Applicable ? Not applicable
The Company did not sell major assets till the end of the reporting period.
2. Sales for major equities
□ Applicable ? Not applicable
IX. Analysis for Main Holding Companies and Joint Stock Companies? Applicable □ Not applicableStatus of main subsidiaries and joint stock companies with influence on the Company's net profit exceeding 10%
Unit: RMB
Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
Wuhan Supor Cookware Co., Ltd. | Subsidiary | Cookware | RMB 91.16 million | 1,188,975,833.22 | 389,638,504.94 | 3,377,165,420.21 | 103,007,739.66 | 77,771,419.02 |
Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd. | Subsidiary | Electrical products | RMB 133.6971 million | 1,513,408,752.24 | 522,665,906.31 | 4,090,061,770.47 | 190,209,857.89 | 142,895,007.53 |
Zhejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd. | Subsidiary | Small domestic appliances, kitchen appliances | RMB 610 million | 3,008,387,070.85 | 2,036,578,112.96 | 6,493,321,049.09 | 1,222,688,830.71 | 1,075,167,205.87 |
Subsidiary obtaining and disposal details during the reporting period
□ Applicable ? Not applicable
X. Structural Subject under the Company's Control
□ Applicable ? Not applicable
XI. Prospects for Future Development
1. Future development strategy and operation plan of the Company
As a new development pattern with domestic circulation as the core is constructed, under which domestic and internationalcirculations reinforce each other, the policies of expanding domestic demand and promoting consumption will continue to take effect.The strong magnetic force of China's enormous domestic market remains unchanged, where the middle class and young generationboost consumption growth constantly. The Company will persistently implement the predefined strategies and guidelines, with theconsumers' demand as the orientation, constantly promote the product innovation strategy and quality product strategy, and furthergive play to the competitive advantages of the Company in the small domestic appliances and kitchen filed in terms of diversifiedbrands and product categories, cultivate new businesses and new product categories, promote the development of segment categories,and meet the diversified consumption demand.In terms of channels, the Company will strengthen the refined management of internet platforms and continuously improve theprecise operation with the help of digitalization. In terms of conventional e-commerce, the Company actively cooperate with thestrategies of various platforms, utilizes the policy opportunities in relation to the platforms, manages the category and price systemacross the platforms, continuously improves the market share and sales scale of conventional e-commerce market. In terms of emergingand live streaming e-commerce platforms, the Company focuses on high-quality output of short videos and contents, with a view tocreating best-seller products in core categories, gaining more traffic opportunities, and continuously improving the conversion rate andrepurchase rate which helps to effectively improving marketing efficiency. In terms of offline business, the Company continues toimprove and optimize the sales network on the basis of the original tens of thousands sales terminals across China, and deepen thechannels such as internet sinking, conventional distribution, home decoration, instant retail. The Company expedites the penetrationinto the third, fourth, and even rural markets through the distribution platforms of JD.com, Alibaba, and Suning. In addition, theCompany fully takes advantage of its excellent distributor network coverage capabilities to utilize online and offline businessopportunities in instant retail, community services, etc.; further enhances the cooperation with primary stores, consolidates theadvantageous position of the Supor brand in major retail channels.In terms of brand building, the Company will strengthen the brand coverage of segmented groups (e.g., mothers and infants, andsilver hair) and scenes (e.g., outdoor activities), continuously explore new business growth points, and maintain the brand vitality. Forthe maternal and child population, the Company develops a sub-brand with feeding appliances and feeding tools as the core categoriesto further explore the maternal and child market. In terms of marketing, the Company will actively try out new marketing tools andmodels, explore the application of AI technology in marketing, and use tools such as AI virtual human livestreaming, AI drawing, andAI video production to promote the cost reduction and efficiency increase in marketing. At the same time, the Company will strengthenthe brand communication, consolidate the brand image, and launch a series of membership activities by taking the 30
thanniversary ofthe Company's establishment as a tipping point, to give back to brand fans and enhance user loyalty.
With respect to export business, the Company, regardless of uncertain international situation, the Company keeps advancing thecooperation with SEB Group in links such as R&D, design and manufacturing, enlarge production scale, acquire scale cost-basedcompetitive advantage and improve core competence of foreign trade in virtue of order transfer advantage of SEB.
With regard to industrial aspect, the Company will further conduct cost optimization and lean economy program, strengthen basicmanagement over R&D, promote market's rapid response capacity of industrial system, and continuously improve cost competitiveness.Meanwhile, under the guidance of the national "carbon peaking and carbon neutrality goals" strategy, the Company continues tointroduce the concepts of green operation in responsible supply, low-carbon logistics, green consumption and other aspects. With thegoal of low-carbon action, the Company improves the utilization rate of resources, continuously reduces greenhouse gas and wasteemissions, and promotes the sustainable development of the industry and enterprises. With the WMF factory in Yuhuan successfullygenerates photovoltaic powers in November 2023, it is expected that the proportion of green photovoltaic energy consumption in thetotal power consumption will reach 15% for each year in the future, representing a reduction of about 12% in the total carbon emission.Meanwhile, the Company will gradually carry out carbon reduction projects such as deploying smart meters and replacing high energy-consuming equipment to achieve the carbon neutrality goal sooner.
With respect to talent training, the Company will strengthen talent echelon construction and improve long-term incentivemechanism continuously; improve management level of basic and medium management personnel, enhance subjective initiative ofemployees and build an active and efficient working atmosphere for employees.
2. Possible risks and countermeasures
(1) Risk from macroeconomic fluctuation
In 2023, the domestic service-oriented consumer industry is experiencing growth for recovery, while the demand for cookwareand domestic appliances at the retail end remains sluggish. The home appliance market in China has developed from a simpleincremental market to an incremental and inventory market, where a new consumption format is formed with the prevailingconsumption rationality and the coexistence of consumption degradation and consumption upgrade. In 2024, Supor will continue toinsist on its established strategy to upgrade the product structure to stimulate the demand for conventional product replacement on theone hand; and to look for new growth point through exploration of new categories and new scenes on the other hand.
In terms of exports, with the recovery of the demand in the European and American markets after destocking, it is expected thatthe export business will continue to improve in 2024, and the Company will work with foreign trade customers to promote new productR&D, improve efficiency, reduce costs, and enhance the competitiveness of the Company's foreign trade business together.
(2) Risk from production element price change
In 2023, the prices of main bulk raw materials such as aluminum, copper, stainless steel, and plastic for cookware and smalldomestic appliances have declined to a stabilized state, which has played a positive role in reducing production costs for industryenterprises. Supor will continue to implement cost-reduction lean projects to improve the internal labor productivity, so that the costcompetitiveness of the Company's internal and external sales business can be enhanced. Besides the Company is actively boosting theautomation of production line, improving the per capita labor output, and reduce the impact caused by rise in labor cost.
(3) Risk of intensifying market competitiveness
With the grading of consumption in the cookware and home appliance market, on the one hand, high-end brands continue to sinktheir channels and adjust their product and price strategies in order to take up more market share, and on the other hand, the salesimpact brought by competitions between platforms and is expected to intensify the cost performance battle in the coming year.
The Company will continue to adhere to the strategy of product innovation as its core, and launch more high value-added andhigh margin products through continuous improvement of innovation capacity, in order to gain a leading sales position and a leadingmarket share in the mid to high price range. Meanwhile, the Company will also increase the product marketing through online terminaltraffic appropriately, take advantage of its comprehensive competitive advantage in terms of multiple brands and categories, andcontinuously input marketing resources to improve market shares. In addition, the Company will actively invest in the markets inlower-tier cities in order to reach more consumer groups. The Company will continue to strengthen and expand its core categories,expedite the product layout in emerging categories and segment markets, and to maintain a steady and sustainable growth for theCompany in the future.
(4) Product export and exchange loss caused by exchange rate fluctuation
The Company has adopted RMB settlement for main export customer SEB Group with low exchange rate risk.XII. Investigation & Research, Communication and Interview Activities During the ReportingPeriod
? Applicable □ Not applicable
Reception time | Reception place | Reception manner | Type of reception object | Reception object | Main content talked about and materials provided | Index for basic condition of investigation and survey |
February 6, 2023 | Company | Field survey | Institution | Analysts and institutional | Annual performance and operating | See the Management File for Investor Relations of Supor on |
investors | conditions in 2022 | February 7, 2023 (1) disclosed by the Company in http://www.cninfo.com.cn on February 7, 2023 for details. | ||||
February 6, 2023 | Company | Field survey | Institution | Analysts and institutional investors | Annual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on February 7, 2023 (2) disclosed by the Company in http://www.cninfo.com.cn on February 7, 2023 for details. |
February 10, 2023 | Company | Field survey | Institution | Analysts and institutional investors | Annual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on February 13, 2023 disclosed by the Company in http://www.cninfo.com.cn on February 13, 2023 for details. |
March 31, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Annual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on April 3, 2023 (1) disclosed by the Company in http://www.cninfo.com.cn on April 3, 2023 for details. |
March 31, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Annual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on April 3, 2023 (2) disclosed by the Company in http://www.cninfo.com.cn on April 3, 2023 for details. |
April 3, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Annual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on April 4, 2023 (1) disclosed by the Company in http://www.cninfo.com.cn on April 4, 2023 for details. |
April 3, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Annual performance and operating conditions in 2022 | See the Management File for Investor Relations of Supor on April 4, 2023 (2) disclosed by the Company in http://www.cninfo.com.cn on April 4, 2023 for details. |
April 12, 2023 | Company | Others | Others | Investors of the Company | Annual performance presentation session | See the Supor Performance Presentation Session and Roadshow Activity Information on April 12, 2023 disclosed by the Company in http://www.cninfo.com.cn on April 12, 2023 for details. |
April 28, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Performance and operating conditions in Q1 of 2023 | See the Management File for Investor Relations of Supor on May 4, 2023 (1) disclosed by the Company in http://www.cninfo.com.cn on May 4, 2023 for details. |
April 28, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Performance and operating conditions in Q1 of 2023 | See the Management File for Investor Relations of Supor on May 4, 2023 (2) disclosed by the Company in |
http://www.cninfo.com.cn on May 4, 2023 for details. | ||||||
May 18, 2023 - May 19, 2023 | Company | Field survey | Institution | Analysts and institutional investors | Performance and operating conditions in Q1 of 2023 | See the Management File for Investor Relations of Supor on May 22, 2023 disclosed by the Company in http://www.cninfo.com.cn on May 22, 2023 for details. |
August 1,2023 | Company | Conference call | Institution | Analysts and institutional investors | Semiannual performance and operating conditions in 2023 | See the Management File for Investor Relations of Supor on August 2, 2023 (1) disclosed by the Company in http://www.cninfo.com.cn on August 2, 2023 for details. |
August 1,2023 | Company | Conference call | Institution | Analysts and institutional investors | Semiannual performance and operating conditions in 2023 | See the Management File for Investor Relations of Supor on August 2, 2023 (2) disclosed by the Company in http://www.cninfo.com.cn on August 2, 2023 for details. |
August 31, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Semiannual performance and operating conditions in 2023 | See the Management File for Investor Relations of Supor on September 4, 2023 (1) disclosed by the Company in http://www.cninfo.com.cn on September 4, 2023 for details. |
September 1,2023 | Company | Conference call | Institution | Analysts and institutional investors | Semiannual performance and operating conditions in 2023 | See the Management File for Investor Relations of Supor on September 4, 2023 (2) disclosed by the Company in http://www.cninfo.com.cn on September 4, 2023 for details. |
September 21, 2023 | Company | Field survey | Institution | Analysts and institutional investors | Semiannual performance and operating conditions in 2023 | See the Management File for Investor Relations of Supor on September 25, 2023 disclosed by the Company in http://www.cninfo.com.cn on September 25, 2023 for details. |
October 27, 2023 | Company | Conference call | Institution | Analysts and institutional investors | Performance and operating conditions in Q3 of 2023 | See the Management File for Investor Relations of Supor on October 30, 2023 disclosed by the Company in http://www.cninfo.com.cn on October 30, 2023 for details. |
XIII、Implementation of the Action Plan for "Dual Improvement of Quality and Return"Has the company disclosed an action plan for "dual improvement of quality and return"。
□Yes ?No
SECTION IV CORPORATION GOVERNANCEI. Basic SituationDuring the reporting period, the Company further standardized the operation of the Company and improved the governance bycontinuously building up and strengthening the corporate governance system, improving the internal control and management system,and deepening the governing process strictly in accordance with the Company Law, the Securities Law and the Rules on the CorporateGovernance of Listed Companies, Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and the Shenzhen Stock ExchangeRegulatory Guidelines for Listed Companies No. 1-Standardized Operation of Listed Companies as well as other regulations of CSRC.By the end of the reporting period, the actual governance of the Company was basically in compliance with the relevant regulations ofcorporate governance of listed companies issued by the CSRC and Shenzhen Stock Exchange, and with the rules of established systemsof the Company. No administrative regulation measures were taken by regulatory department upon the Company.
(I) Relating to Shareholders and the General Meeting of ShareholdersDuring the reporting period, the Company has convened and held the general meetings of shareholders strictly according to theRules for the General Meetings of Shareholders of Listed Companies, Rules and Procedures for the Shareholders' Meeting, and otherrules and requirements, and ensured the legality and validity of the convening. According to the Implementing Rules for the OnlineVoting at the Shareholders' Assembly of Listed Companies of Shenzhen Stock Exchange, the Company clearly defined the specificprocess of online voting and completely implemented online voting of general meeting of shareholders, in order to involve mediumand small investors in the online voting more effectively, and guarantee the legitimate rights and interests of all shareholders, especiallyof the minority shareholders.During the reporting period, four General Meetings of Shareholders were held. The convening and holding procedures,qualifications of attended persons, voting procedures, voting results and resolution contents of the meeting conformed to laws andregulations and Articles of Association.(II) Relating to the Company and the Controlling ShareholderDuring the reporting period, the Company was autonomous in business and operation, and kept independent of its controllingshareholder in terms of assets, business, personnel, organization and finance. The Board of Directors, the Board of Supervisors andother internal organizations operate independently. The Controlling Shareholder of the Company exercised its rights through theGeneral Meeting of Shareholders, and did not directly or indirectly intervene with the Company's decision-making or operatingactivities. The related transaction between the Company and its Controlling Shareholder was fair and reasonable; the decision-makingrules were in compliance with the relevant provisions; no fund occupation by the Controlling Shareholder existed.(III) Relating to Directors and the Board of DirectorsThe Company elected directors strictly according to the procedures stipulated in the Company Law and the Articles of Association,and ensured the open, fair, equitable and independent appointment and election of directors, and the number and composition of theBoard of Directors follow relevant laws and regulations. Now the Company has three independent directors, representing 1/3 of itsdirectors. All directors have actively participated in the Company's operation and decision-making activities, performed their duties,attended the relevant training sessions organized by supervisory departments, pursuant to the Company Law, the Shenzhen StockExchange Regulatory Guidelines for Listed Companies No. 1-Standardized Operation of Listed Companies, the Articles of Associationand the Rules and Procedures for the Board of Directors. The Board of Directors consists of Strategy Committee, Audit Committeeand Compensation Committee with independent directors fully exerting their specialties, which further improves the working efficiencyand decision-making level of the Board of Directors and plays significant roles in the Company's normative operation.During the reporting period, eight board meetings were held. The convening and holding procedures, qualifications of attendedpersons, voting procedures, voting results and resolution contents of the meeting conformed to laws and regulations and Articles of
Association. In addition, the Company held an election of new Board of Directors and elected the members of the Eighth Board ofDirectors at the Annual General Meeting of Shareholders for 2022 Fiscal Year.(IV) Relating to Supervisors and the Board of SupervisorsThe Company elected supervisors strictly according to the provisions under the Company Law and the Articles of Association.The number of supervisors and composition of the Board of Supervisors met the requirement of relevant laws and regulations. Allsupervisors have performed their duties as required by the Regulations of Procedure of the Board of Supervisors, effectively supervisedthe legality and regulatory compliance of important matters, related transactions, financial conditions, and duty fulfillment of directorsand senior executives of the Company, and maintained the legitimate rights and interests of the Company and its shareholders.
During the reporting period, eight meetings of Board of Supervisors were held. The convening and holding procedures,qualifications of attended persons, voting procedures, voting results and resolution contents of the meeting conformed to laws andregulations and Articles of Association. In addition, the Company held an election of new Board of Supervisors and elected the membersof the Eighth Board of Supervisors at the Annual General Meeting of Shareholders for 2022 Fiscal Year.
(V) Relating to Performance Appraisal and the Incentive and Restraining Mechanism
The Company established and constantly improved the performance appraisal system and the incentive restraining mechanism forsupervisors, directors and senior executives who are employed and paid by the listed company. The appointment and remuneration fordirectors, supervisors and senior executives of the Company are open, clear and in line with relevant laws and regulations. During thereporting period, the Company completed the registration of restricted stock grants related to the deferred grant part under the 2022Restricted Stock Incentive Plan (Draft) and the registration of stock option grants related to the 2023 Stock Option Incentive Plan(Draft), and deliberated and approved the Company's Administration Measures for the Performance Incentive Fund with a view toproviding effective incentives to senior executives.
(VI) Relating to Information Disclosure and Transparency
The Securities Department of the Company is responsible for information disclosure and investor's relationship management.Abiding by requirements of the CSRC and Shenzhen Stock Exchange and provisions on compilation of periodic reports in good faith,the department, in association with the Financial Department of the Company, has timely and accurately compiled and submitted the2022 Annual Report, 2023 First Quarterly Report, 2023 Semiannual Report and 2023 Third Quarterly Report, based on the strictcompliance with the non-disclosure rules before the disclosure of the reports.
In accordance with the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange, the Securities Department of theCompany disclosed, after review and adoption by the Board of Directors or the General Meeting of Shareholders, the routineinformation (board meetings and meetings of Board of Supervisors), fatal information (external investments, related transactions), andsignificant events truly, accurately, completely, timely and fairly. During the reporting period, the Company issued 156 announcementsand documents and fulfilled the filing management of information disclosure documents and compliance with the non-disclosure rulesbefore the disclosure of the reports. In particular, the Company prepared process memorandums of important matter and managementfiles of insider personnel before planned and implemented important matters, which made the information disclosure timely, true,accurate, complete and fair. There was no irregular or untimely information disclosure, and the Company has not been penalized byregulatory authorities. Meanwhile, in accordance with the requirements of the Investor Relations Management System, the Companystandardized the investor reception procedures. Besides, after the regular report disclosure, the Company actively held onlineperformance briefings and investor telephone exchange meetings to fully communicate with investors. And the Record Sheet of InvestorRelations Activities was released in time after the activities to ensure that all investors have fair access to company information. Indaily work, the Company also actively received consultations by arranging personnel to answer investors' hotlines and responding toinvestors' questions on the interactive platform, so as to ensure that all shareholders of the Company, small and medium-sized investorsin particular, can gain the company information equally.
During the reporting period, the Company issued the Internal Control System on Entrusted Financial Management of ZhejiangSupor Co., Ltd. The Company will continue to sort out and update the internal control systems issued by the Company in a timely
manner in accordance with the current laws and regulations, and will continuously establish and improve the internal control systems,to make them work more efficiently.Is there any major variation between the actual situation of the Company's corporate governance, and laws, administrative regulations,and stipulations issued by the CSRC concerning the governance of listed companies?
□ Yes ? No
There is no major variation between the actual situation of the Company's corporate governance, and laws, administrative regulations,and stipulations issued by the CSRC concerning the governance of listed companies.
II. Independence of the Company Relative to the Controlling Shareholders and the ActualControllers in Ensuring the Company's Assets, Personnel, Finance, Organization, Business, etc.(I) Independent and complete assets structureThe Company had its production and business operation place independent from that of the controlling shareholder, and hadindependent and complete assets structure, independent production system, auxiliary production system and supporting facilities, landuse right, housing ownership, as well as independent purchasing and selling systems.(II) Independence of personnelIn terms of personnel, labor, personnel and remuneration management, the Company was completely independent. Such seniorexecutives as the General Manager, Vice General Manager, Board Secretary of Directors and Chief Financial Officer did not hold anyposition concurrently in controlling shareholder or other subsidiaries excepting director and supervisors, nor receive any remunerationfrom the controlling shareholder or other subsidiaries.(III) Independence of financeThe Company has an independent financial department, has established independent accounting system and financial managementsystem, and makes financial decisions independently. It has opened independent bank accounts and pays taxes independently.(IV) Independence of organizationsThe Company has set up the organization independent from the controlling shareholder completely, and there exists no mixedoperation or management. It adopts a BU management system, and has departments directly under the Head Office and three BUs(cookware, small domestic appliances and large kitchen appliances) and high-end business modules. Neither controlling shareholdernor any other company or individual has intervened with the organization structuring of the Company. No "superior and subordinaterelationship" exists between the controlling shareholder and its functional departments on the one hand, and the Company and itsfunctional departments on the other hand.(V) Independence of business operation from shareholders or other related partiesThe Company is mainly engaged in designing, producing and selling cookware, small domestic appliances, large kitchenappliances and H&PC products, which are not produced by the controlling shareholder or any of its subsidiaries for the Chinese market.The Company has an independent "procurement, production and sales" system. It operates business independently from shareholdersor any other related party.III. Horizontal Competition
□ Applicable ? Not applicable
IV. General Meetings of Shareholders and Interim General Meeting of Shareholders Heldduring the Reporting Period
1. General meetings of shareholders during the reporting period
Session | Meeting type | Proportion of participated investors | Convening date | Date of disclosure | Meeting resolution |
The First Interim General Meeting of Shareholders 2023 | Interim General Meeting of Shareholders | 8.55% | January 19, 2023 | January 20, 2023 | See Announcement on Resolutions of the First Interim General Meeting of Shareholders 2023 (Announcement No.: 2023-007) disclosed on http://www.cninfo.com.cn for details |
Annual General Meeting of Shareholders for 2022 Fiscal Year | Annual General Meeting of Shareholders | 8.04% | April 25, 2023 | April 26, 2023 | See Announcement on Resolutions of the Annual General Meeting of Shareholders for 2022 Fiscal Year (Announcement No.: 2023-041) disclosed on http://www.cninfo.com.cn for details |
The Second Interim General Meeting of Shareholders 2023 | Interim General Meeting of Shareholders | 7.62% | October 19, 2023 | October 20, 2023 | See Announcement on Resolutions of the Second Interim General Meeting of Shareholders 2023 (Announcement No.: 2023-073) disclosed on http://www.cninfo.com.cn for details |
The Third Interim General Meeting of Shareholders 2023 | Interim General Meeting of Shareholders | 7.46% | November 14, 2023 | November 15, 2023 | See Announcement on Resolutions of the Third Interim General Meeting of Shareholders 2023 (Announcement No.: 2023-085) disclosed on http://www.cninfo.com.cn for details |
2. Interim General Meeting of Shareholders held at the request of preferred shareholders with restored votingright
□ Applicable ? Not applicable
V. Directors, supervisors and senior executives
1. Basic information
Name | Gender | Age | Position | Position status | Commencement date of term of office | Expiry date of term of office | Number of shares held at the beginning of the period | Quantity of increased shares in this period | Quantity of decreased shares in this period | Quantity of other shares increased or reduced | Number of shares held at the end of the period | Reasons for the increase or decrease of shares |
Thierry de LA TOUR D'ARTAISE | Male | 69 | Chairman | On-service | January 28, 2008 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Su Xianze | Male | 56 | Director | On-service | October 25, 2000 | April 24, 2026 | 364,602 | 0 | 91,151 | 0 | 273,451 | Legal shareholding reduction of 25% of the annual shareholding quantity |
Stanislas de GRAMONT | Male | 59 | Director | On-service | January 3, 2019 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Nathalie LOMON | Female | 53 | Director | Dismissal | November 18, 2019 | September 28, 2023 | 0 | 0 | 0 | 0 | 0 | None |
Olivier CASANOVA | Male | 58 | Director | On-service | November 14, 2023 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Delphine SEGURA VAYLET | Female | 54 | Director | On-service | April 22, 2021 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Tai Wai Chung | Male | 64 | Director | On-service | April 19, 2018 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Chen Jun | Male | 47 | Independent director | On-service | May 20, 2020 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Hervé MACHENAUD | Male | 77 | Independent director | On-service | April 19, 2019 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Jean-Michel PIVETEAU | Male | 77 | Independent director | On-service | April 19, 2019 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Philippe SUMEIRE | Male | 64 | Chairman of Board of Supervisors | On-service | April 1, 2009 | April 24, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Zhang Junfa | Male | 47 | Supervisor | On-service | April 20, 2011 | April 16, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Lu Lanhua | Female | 46 | Supervisor | On-service | March 17, 2016 | April 16, 2026 | 0 | 0 | 0 | 0 | 0 | None |
Cheung Kwok Wah | Male | 59 | General Manager | On-service | March 31, 2021 | April 24, 2026 | 142,000 | 0 | 0 | 0 | 142,000 | None |
Xu Bo | Male | 56 | Chief Financial Officer | On-service | October 20, 2009 | April 24, 2026 | 175,303 | 0 | 43,688 | 58,000 | 189,615 | Reducing shareholding is the legal shareholding reduction of 25% of the annual shareholding quantity; Other increased or decreased changes are granted restricted stocks. |
Ye Jide | Male | 48 | Vice General Manager, Board Secretary | On-service | October 25, 2000 | April 24, 2026 | 59,143 | 0 | 14,786 | 21,000 | 65,357 | Reducing shareholding is the legal shareholding reduction of 25% of the annual shareholding quantity; Other increased or decreased changes are granted restricted stocks. |
Total | -- | -- | -- | -- | -- | -- | 741,048 | 0 | 149,625 | 79,000 | 670,423 | -- |
If there is any separation of directors and supervisors and dismissal of senior executives during the reporting period? Yes □ NoDuring the reporting period, Ms. Nathalie LOMON, a former director of the Company, applied for resigning from her position asa director of the Eighth Board of Directors and a member of the Audit Committee due to personal reasons, who will no longer holdany position in the Company following the resignation.Change of Directors, Supervisors and Senior Executives? Applicable □ Not applicable
Name | Position | Type | Date | Reason |
The Eighth Board of Directors/Board of Supervisors | Directors and Supervisors | Elected | April 25, 2023 | During the reporting period, the Company held the elections of the Eighth Board of Directors and Board of Supervisors, and held the 1st Session of the Eighth Board of Directors and Board of Supervisors on April 26, 2023, in which the Board Chairman of the Company and the Chairman of the Board of Supervisors were elected, and the senior executives of the Company including the General Manager, Chief Financial Officer, and Board Secretary were appointed at the same time. |
Nathalie LOMON | Director | Resigned | September 28, 2023 | Resignation for personal reasons |
Olivier CASANOVA | Director | Elected | November 14, 2023 | Elected as a director of the Company in the Shareholders' Meeting |
2. Position information
Professional backgrounds, main working experiences, and main responsibilities in the Company of present directors, supervisors andsenior executives
1. Directors
Mr. Thierry de LA TOUR D'ARTAISE: Chairman, Master of Management of Paris ESCP; Chartered Accountant; Chairman ofSEB Group; former CEO and Vice President of SEB Group, Chairman of CALOR, CFO and CEO of CROISIERES PAQUET, auditmanager of Coopers & Lybrand.Mr. Stanislas de GRAMONT: Director, graduated from ESSEC Business School (Paris); CEO of SEB Group, and former ChiefOperating Officer of SEB Group, executive management positions at Danone and CEO of Suntory Beverage & Food Europe.Mr. Olivier CASANOVA: Director, graduated from HEC Paris. Chief Financial Officer of SEB S.A.. He formerly served asDeputy CFO of CMA CGM, CEO of CMA CGM Air Cargo and CFO of CEVA Logistics, CFO of Tereos, Head of Financing &Treasury and Corporate Finance for PSA Peugeot Citro?n, and Head of Group Strategy, Marketing and M&A for Thomson, etc..Ms. Delphine SEGURA VAYLET: Director of the Company, holds Master degree in International Labor Law of University Paris1 Panthéon Sorbonne; Senior Executive Vice President of Human Resources of SEB Group, and held various executive managementpositions at TOTAL Group as Vice-President of Group Human Resources and Zodiac Aerospace as Group Human Resources Directorand COMEX member and STMicroelectronics as Group Human Resources Director at Digital Consumer Division.
Mr. Su Xianze: Director, CEIBS EMBA, Senior Economist; Chairman and General Manager of Supor Group Co., Ltd., Chairmanof Taizhou Supor Real Estate Development Co., Ltd. and Chairman of Zhejiang Supor Water Heater Co., Ltd.. He has severed asChairman of the Company from 2001 to April 2014, and General Manager from 2001 to March 2010.
Mr. Tai Wai Chung: Director: graduated from the Industrial Engineering Major of University of Hong Kong; Executive Vice-President of Asian Division of SEB S.A., had served as the director and general manager of Apple (Great China) Company, marketingdirector of Electrolux Appliances Company, director and general manager of Shanghai SEB Electric Appliances Co., Ltd and generalmanager of the Company before.
Mr. Hervé MACHENAUD: independent director, graduated from Sciences Po; President of Hong Ma Consulting Services(Beijing) Co., Ltd.. He formerly served as Leader of EDF Group Delegation to China, Senior Executive Vice President of EDF Group,Director in charge of EDF Generation and Engineering (DPI) and Asia-Pacific Director.
Mr. Jean-Michel PIVETEAU: independent director, doctor of business administration and master of political science. He is SeniorConsultant of CFI Financial Consultant, Chairman of the Board of Supervisors of MicroCred China, Vice-Chairman of the Board of
Supervisors of BAOBAB, and member of the Board of Directors of French Foreign Trade Advisors. He formerly served as Adviserfor China to BNP Paribas Chairman, Senior Adviser to BNP Paribas for China, Country Head of Paribas Bank in numerous Asiancountries and Middle East countries.
Mr. Chen Jun: independent director, doctor of accounting of Xiamen University, post-doctor of business administration(accounting) of Zhejiang University. He is now the Chairman, Professor, Doctoral Tutor of the Department of Finance and Accountingof Zhejiang University. He is the Director of the Institute of Finance and Accounting of Zhejiang University, Deputy Director of theGlobal Entrepreneurship Research Center of Zhejiang University, Director of the Research Center of Listed Companies of ZhejiangBusiness Research Institute of Zhejiang University. He also serves as Vice President of Zhejiang Association of Chief Accountantsand independent director of the listing company.
2. Supervisors
Mr. Philippe SUMEIRE: Supervisor, graduated from Aix-en-Provence Law School with PHD's degree of Private Law andComparative Law; Vice President Legal Affairs of Groupe SEB and Board Secretary. He has worked first for PEUGEOT S.A andATOCHEM (chemical industry) and then held the position of General Counsel and Company Secretary for CLUB MED, GIATINDUSTRIES and MOULINEX S.A.
Mr. Zhang Junfa: Supervisor, graduated from Northwestern Polytechnical University; Chairman of the Trade Union of theCompany and senior manager of Administration Department of Yuhuan Site, he was working for Security Department and then workedin Legal Affairs Department and office.
Ms. Lu Lanhua: Supervisor, graduated from Shanghai University of Finance and Economics and MBA of University ofManchester, member of ACCA. Currently the financial director of Cookware Business Unit of the Company; she previously workedas the Company’s Financial planning & analysis manager, worked for Greif Flexible Products& Service (China) as accounting manager,UNSA (Hangzhou) Packaging Manufacturing Ltd. as financial manager.
3. Senior executives
Mr. Cheung Kwok Wah: General Manager of the Company, Bachelor of Economics, Chinese University of Hong Kong, MBA ofKelly School of Business, Indiana University, former Chairman and President of the International Business Department of China FeiheCo., Ltd., and former Chairman and CEO of Nestlé Greater China.Mr. Xu Bo: Chief Financial Officer, graduated from Central University of Finance and Economics; member of CICPA and ACCA;former Senior Auditing Manager of Shenzhen Zhonghua Certified Public Accountants, Chief Financial Officer of Yue Sai KanCosmetics Limited, Chief Financial Officer of Molex Interconnect (Shanghai) Co., Ltd., Chief Financial Officer of Microsoft China.
Mr. Ye Jide: Board Secretary, Vice General Manager, and Director of Securities Department, CEIBS EMBA. He is IndependentDirector of Beijing DeepZero Intelligent Technology Co., Ltd., has worked successively as the chief of equipment sector, office headand assistant to the general manager of the Company.Position information in shareholders' companies? Applicable □ Not applicable
Name | Shareholding company | Positions in shareholders' companies | Commencement date of term of office | Expiry date of term of office | Payment or allowance from the shareholding company |
Thierry de LA TOUR D'ARTAISE | SEB Group | Chairman | May 1, 2000 | Yes | |
Philippe SUMEIRE | SEB Group | Vice President Legal Affairs of Groupe SEB and Board Secretary | December 10, 2001 | Yes | |
Stanislas de GRAMONT | SEB Group | CEO | December 3, 2018 | Yes |
Olivier CASANOVA | SEB Group | Chief Financial Officer | September 15, 2023 | Yes | |
Delphine SEGURA VAYLET | SEB Group | Senior Executive Vice President of HR | January 1, 2021 | Yes | |
Tai Wai Chung | SEB Group | Senior Executive Vice President of Asia Continental Division | October 1, 2017 | Yes |
Position information in other companies? Applicable □ Not applicable
Name | Name of other unit | Positions in other companies | Commencement date of term of office | Expiry date of term of office | Payment or allowance from other companies |
Su Xianze | Supor Group Co., Ltd. | Chairman and General Manager | March 8, 2018 | Yes | |
Su Xianze | Taizhou Supor Real Estate Development Co., Ltd. | Chairman | May 16, 2018 | No | |
Su Xianze | Zhejiang Supor Water Heater Co., Ltd. | Chairman | November 15, 2019 | No | |
Chen Jun | Zhejiang University | Dean of the Department of Finance and Accounting, Professor and Doctoral Supervisor | March 1, 2019 | Yes | |
Chen Jun | Hangzhou EZVIZ Network Co., Ltd. | Independent director | June 23, 2021 | June 22, 2024 | Yes |
Chen Jun | WZ Group | Independent director | May 17, 2022 | May 16, 2025 | Yes |
Hervé MACHENAUD | Hongma Consulting Services (Beijing) Co., Ltd. | President | January 1, 2017 | Yes | |
Ye Jide | Beijing DeepZero Intelligent Technology Co., Ltd. | Independent director | October 20, 2021 | October 19, 2024 | No |
Punishment of securities regulatory commission on directors, supervisors and senior executives of the Company at present or leavingduring the reporting period
□ Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Executives
Decision-making procedures, determination basis of remuneration and actual payment for directors, supervisors and senior executives
Decision-making procedures of remuneration for directors, supervisors and senior executives | The remuneration for directors, supervisors and senior executives of the Company shall be in strict compliance with the Rules and Procedures for the Board of Directors and the Rules and Procedures for the Shareholders' Meeting, as well as the regulations of the Company's Articles of Association and the Company Law. |
Remuneration basis for Directors, Supervisors and Senior Executives | The directors, supervisors and senior executives of Company are paid according to their positions and corresponding responsibilities and the Company's salary system, with an annual bonus based on the performance evaluated. |
Remuneration for Directors, Supervisors and Senior Executives during the reporting period
Unit: RMB 10,000
Name | Gender | Age | Position | Position status | Remuneration receivable from the Company | Whether the remuneration is gained from the related party of the Company |
Thierry de LA TOUR D'ARTAISE | Male | 69 | Chairman | On-service | Yes | |
Su Xianze | Male | 56 | Director | On-service | Yes | |
Stanislas de GRAMONT | Male | 59 | Director | On-service | Yes | |
Nathalie LOMON | Female | 53 | Director | Resigned | Yes | |
Olivier CASANOVA | Male | 58 | Director | On-service | Yes | |
Delphine SEGURA VAYLET | Female | 54 | Director | On-service | Yes | |
Tai Wai Chung | Male | 64 | Director | On-service | Yes | |
Chen Jun | Male | 47 | Independent director | On-service | 25 | No |
Hervé MACHENAUD | Male | 77 | Independent director | On-service | 25 | No |
Jean-Michel PIVETEAU | Male | 77 | Independent director | On-service | 25 | No |
Philippe SUMEIRE | Male | 64 | Chairman of Board of Supervisors | On-service | Yes | |
Zhang Junfa | Male | 47 | Supervisor | On-service | 42.45 | No |
Lu Lanhua | Female | 46 | Supervisor | On-service | 98.33 | No |
Cheung Kwok Wah | Male | 59 | General Manager | On-service | 874.17 | No |
Xu Bo | Male | 56 | Chief Financial Officer | On-service | 318.59 | No |
Ye Jide | Male | 48 | Vice General Manager, Board Secretary | On-service | 119.03 | No |
Total | -- | -- | -- | -- | 1,527.57 | -- |
Description of other situations
□ Applicable ? Not applicable
VI. Duty Performance of Directors during the Reporting Period
1. Board of Directors during the reporting period
Session | Convening date | Date of disclosure | Meeting resolution |
The 17th Session of the Seventh Board of Directors | January 3, 2023 | January 4, 2023 | See Announcement of Resolutions of the 17th Session of the Seventh Board of Directors (Announcement No.: 2023-001) disclosed on http://www.cninfo.com.cn for details |
The 18th Session of the Seventh Board of Directors | January 31, 2023 | February 2, 2023 | See Announcement of Resolutions of the 18th Session of the Seventh Board of Directors (Announcement No.: 2023-009) disclosed on http://www.cninfo.com.cn for details |
The 19th Session of the Seventh Board of Directors | March 29, 2023 | March 31, 2023 | See Announcement of Resolutions of the 19th Session of the Seventh Board of Directors (Announcement No.: 2023-017) disclosed on http://www.cninfo.com.cn for details |
The 1st Session of the Eighth Board of Directors | April 26, 2023 | April 28, 2023 | See Announcement of Resolutions of the 1st Session of the Eighth Board of Directors (Announcement No.: 2023-045) disclosed on http://www.cninfo.com.cn for details |
The 2nd Session of the Eighth Board of Directors | August 30, 2023 | August 31, 2023 | See Announcement of Resolutions of the 2nd Session of the Eighth Board of Directors (Announcement No.: 2023-060) disclosed on http://www.cninfo.com.cn for details |
The 3rd Session of the Eighth Board of Directors | September 27, 2023 | September 28, 2023 | See Announcement of Resolutions of the 3rd Session of the Eighth Board of Directors (Announcement No.: 2023-066) disclosed on http://www.cninfo.com.cn for details |
The 4th Session of the Eighth Board of Directors | October 26, 2023 | October 27, 2023 | See Announcement of Resolutions of the 4th Session of the Eighth Board of Directors (Announcement No.: 2023-076) disclosed on http://www.cninfo.com.cn for details |
The 5th Session of the Eighth Board of Directors | December 21, 2023 | December 22, 2023 | See Announcement of Resolutions of the 5th Session of the Eighth Board of Directors (Announcement No.: 2023-087) disclosed on http://www.cninfo.com.cn for details |
2. Attendance of board meeting and general meeting of shareholders by directors
Attendance of board meeting and general meeting of shareholders by directors | |||||||
Name of directors | Due attendance of board meetings during the reporting period (times) | Presence in on-site board meetings (times) | Presence via communication on board meetings (times) | Entrusted presence in board meetings (times) | Absence on board meetings (times) | Absent for twice continuously on board meetings? | Attendance of general meeting of shareholders |
Thierry de LA TOUR D'ARTAISE | 8 | 1 | 7 | 0 | 0 | No | 0 |
Stanislas de GRAMONT | 8 | 2 | 6 | 0 | 0 | No | 0 |
Nathalie LOMON | 6 | 2 | 4 | 0 | 0 | No | 0 |
Olivier CASANOVA | 1 | 0 | 1 | 0 | 0 | No | 0 |
Delphine SEGURA VAYLET | 8 | 2 | 6 | 0 | 0 | No | 0 |
Su Xianze | 8 | 2 | 6 | 0 | 0 | No | 1 |
Tai Wai Chung | 8 | 2 | 6 | 0 | 0 | No | 0 |
Hervé MACHENAUD | 8 | 2 | 6 | 0 | 0 | No | 0 |
Jean-Michel PIVETEAU | 8 | 2 | 6 | 0 | 0 | No | 0 |
Chen Jun | 8 | 1 | 7 | 0 | 0 | No | 4 |
Explanation on absence for twice continuouslyNone
3. Objections by directors to company issue
Were there any objections raised by directors to company issues?
□ Yes ? No
There was no objection raised by any director to company issues during the reporting period.
4. Other explanations of duty performance of directors
Was there any advice raised by directors to company issues adopted by the Company?? Yes □ NoExplanation on adoption or non-adoption of the advice from directorsDuring the reporting period, all directors of the Company were responsible and diligent. They paid close attention to the reportsabout Company news by press and on the Internet and understood progress of the Company's important matters timely. They reviewedthe information reports provided by the Company periodically, and gave relevant comments and advices. They exerted their specialtiesfully, performed the duties as directors actively and maintained the legitimate rights and interests of the Company and minorityshareholders.VII. Situation of Special Committees under the Board of Directors during the Reporting Period
Name of the Committee | Members | Meeting times | Convening date | Content of the meeting | Important opinions and suggestions put forward | Other circumstances relating to the performance of duties | Specific circumstances of disputed matters (if any) |
Compensation and Appraisal Committee | Hervé MACHENAUD, Jean-Michel PIVETEAU, Delphine SEGURA VAYLET | 3 | March 29, 2023 | The Compensation Committee reviewed and discussed 1. Summary of the employment situation of the Company in 2022; 2. Annual labor cost and remuneration of senior executives and employee supervisors in 2022; 3. Remuneration adjustment policy in 2023 4. Implementation of Restricted Stock Incentive Plan; 5. Performance of corporate social responsibilities; 6. Organization development and position information of core executives. | The Compensation Committee agreed to the proposal and recognized the Company's efforts in employment management, organizational talent strategy and remuneration strategy. | None | None |
August 30, 2023 | The Compensation Committee reviewed and discussed 1. Employment situation of the Company in the first six months of 2023; 2. Labor costs in the first six | The Compensation Committee agreed to the proposal and recognized the Company's efforts in employment management, organizational talent strategy | None | None |
months of 2023; 3. Actual remuneration adjustment in 2023; 4. Long-term incentive plan of 2023; 5. Performance of corporate social responsibilities; 6. Organization development and position information of core executives. | and performance of the corporate social responsibility. | ||||||
September 26, 2023 | The Compensation Committee reviewed and discussed 1. 2023 Stock Option Incentive Plan (Draft) and Its Abstract; 2. Assessment Measures for the Implementation of the 2023 Stock Option Incentive Plan; 3. Measures for the Management of the Performance Incentive Fund in 2023 | The Compensation Committee agreed to the proposal. | None | None | |||
Audit Committee | Chen Jun, Jean-Michel PIVETEAU, Nathalie LOMON | 4 | March 29, 2023 | The Audit Committee reviewed and discussed 1. External audit opinions; 2. Key data of the 2022 financial statement; 3. 2022 internal control achievement, and 2023 internal control plan; 4. Performance of internal audit projects in 2022, and 2023 audit plan and key audit findings rectification and follow-up plan; 5. Main conclusions of external audit; 6. Matters of audit organization renewal in 2023. | 1. The Audit Committee approved the 2023 audit plan (focusing on the sales allowance and market costs) and the 2023 key follow-up project plan. 2. The Audit Committee advised to strengthen corresponding internal control procedures based on the findings on the matters reported by supervision. 3. The Audit Committee reviewed and discussed the qualifications of the external auditor and proposed the Board of Directors to review and approve KPMG as the audit service provider of the Company in 2023. 4. The Audit Committee advised to evaluate the need of audit on overseas bases of Supor. | None | None |
June 30, 2023 | The Audit Committee reviewed and discussed 1. Progress of internal control projects in 2023; 2. Progress of the implementation of internal audit projects and rectification of key audit findings in 2023; 3. Results of external audit and review | None | None | ||||
August 30, 2023 | The Audit Committee reviewed and discussed 1. External audit opinions; | 1. The Audit Committee advised to strengthen the quantitative impact analysis | None | None |
2. Key data in the semiannual financial statement of 2023; 3. Progress of internal control projects in 2023; 4. Progress of the implementation of internal audit projects and rectification of key audit findings in 2023; 5. Progress of external audit; 6. The Audit Committee consulted external auditors to learn about the communication with external regulatory agencies. | of audit findings in internal audit projects. 2. The Audit Committee advised to strengthen and formalize the communication process between internal auditors and external auditors regarding high-risk internal audit findings and required that external auditors shall evaluate the impact of high-risk internal audit findings on audit opinions and appropriately record and report it to the management of the Company. | |||||
Chen Jun, Jean-Michel PIVETEAU, Olivier CASANOVA | December 21, 2023 | The Audit Committee reviewed and discussed 1. Progress of internal control projects in 2023; 2. Progress of the implementation of internal audit projects and rectification of key audit findings in 2023; 3. Results of external audit and review | None | None |
VIII. Work of the Board of Supervisors
During the reporting period, did the Board of Supervisors find any risk about the Company?
□ Yes ? No
The Board of Supervisors held no objection to the issues supervised during the reporting period.
IX. Employees of the Company
1. Number of Employees, professional and education conditions
Number of in-service employees of the parent company at the end of the reporting period (persons) | 1,850 |
Number of in-service employees of the main subsidiaries at the end of the reporting period (persons) | 8,903 |
Total number of in-service employees at the end of the reporting period (persons) | 10,753 |
Total number of employees paid during current period (person) | 10,753 |
Retired employees for whom the parent company and major subsidiaries should cover expenses (person) | 16 |
Profession composition | |
Job description | Quantity (person) |
Production personnel | 6,305 |
Sales personnel | 1,516 |
Technician | 1,936 |
Financial personnel | 183 |
Administrative personnel | 813 |
Total | 10,753 |
Education | |
Education category | Quantity (person) |
Postgraduate and above | 177 |
Junior college or university | 3,628 |
Technical secondary school or high school | 3,219 |
Others | 3,729 |
Total | 10,753 |
2. Remuneration policy
The Company adopts floating salary system for all employees. Salary that we provide to employees includes pre-tax basic salary,performance salary and various incentive bonuses in the form of currency; we also offer various non-monetary welfares such ascommercial insurance, internal and external training, internal development and comfortable working environment.We provide employees with competitive salary and welfare to keep a certain degree of competitiveness and absorb talents; whilein the Company, to stabilize those key employees, embody the Company's value orientation, motivate self-improvement of employeeand create high performance.
3. Training plan
1) Training system:
Guided by strategic planning and business development needs, Supor relies on employees' career development and professionalability improvement to carry out training on professional and technical sequences and management sequences. According to theplanning of talent development strategy and coordinating with talent echelon construction, the Company designs learning projectssystematically and at different levels.
Training type | Training hours | Actual Number of Trainees | Average (H) |
Online trainings in 2023 | 38,762 | 3,436 | 11.28 |
Offline trainings in 2023 | 258,203 | 9,907 | 26.06 |
The detailed offline training data in 2023 are as follows:
Position level | Training hours (H) |
Senior management | 2,755.40 |
Middle level | 14,152.50 |
General employees | 83,728.40 |
Front-line employees | 157,566.35 |
Total training hours | 258,202.65 |
Type | Actual Number of Trainees |
Number of male employees trained | 6,304 |
Number of female employees trained | 3,603 |
Total number of participants | 9,907 |
2) Various forms
Supor lays emphasis on the innovation of employee training. In order to promote the training experience and leaning conversionrate, the Company facilitates learning in multiple perspectives through diverse forms involved online learning, live streaming, offlinelearning, project workshops, internal and external thematic exchange sessions, and cross-fields visits.
3) Internal inheritance
According to the planning of talent development strategy and coordinating with talent echelon construction, the Companyirregularly organizes professional personnel in relevant fields to extract knowledge, develop courses and impart their organizationaland personal experience. We also provide instructor and tutor resources which are mainly from internal managers to employees toimprove the competence and speed up the growth of employees and practice our talent building and development policies.
4. Labor outsourcing
? Applicable □ Not applicable
Total hours of labor outsourcing (Hours) | 11,819,387.44 |
Total remuneration paid for labor outsourcing (RMB) | 261,022,753.72 |
X. Profit distribution and conversion from capital reserves to share capitalFormulation, implementation or adjustment of profit distribution policies, especially cash dividend policies during the reporting period? Applicable □ Not applicable
During the reporting period, the Company implemented the profit distribution plan in strict accordance with the Articles ofAssociation and other relevant provisions, where the dividend distribution standard and proportion were clear and definite and therelevant decision-making procedures and mechanisms were complete. The Company held the 19
thSession of the Seventh Board ofDirectors and the 18
thSession of the Seventh Board of Supervisors on March 29, 2023, and held the Annual General Meeting ofShareholders for 2022 Fiscal Year on April 25, 2023, which deliberated and approved the Proposal on Profit Distribution Plan 2022.The Company's Profit Distribution Plan 2022 is: based on the 805,116,907 shares (total capital stock of 808,654,476 shares at the endof 2022 deducted by 3,537,569 shares of repurchased shares in the Company’s special stock repurchase account, the Company havecanceled 1,870,069 shares in the special stock repurchase account on April 10, 2023, the latest total capital stock of the Company is806,784,407 shares and the latest number of shares in the special stock repurchase account is 1,667,500 shares), the Company willdistribute all shareholders cash dividends of RMB 30.30 per 10 shares (tax included), and total amount of cash dividends is RMB2,439,504,228.21. The Company will issue 0 bonus shares (tax included) and not convert capital reserves to capital. On May 26, 2023,the profit distribution plan of the Company for 2022 Fiscal Year was completed.
Special description of cash dividend policy | |
Whether it meets the requirements in Articles of Associations or resolutions of the Shareholders' Meeting: | Yes |
Whether the dividend standard and proportion are definite and clear: | Yes |
Whether the relevant decision procedure and mechanism are complete: | Yes |
Whether the independent director performs obligations and plays roles: | Yes |
If without distribution of cash dividends, the Company shall disclose the specific reasons of non-distribution, as well as the subsequent measures to be taken to enhance investor returns: | Yes |
Whether the minority shareholders have opportunity in giving opinions and claims, and whether the legal interests of minority shareholders are protected sufficiently: | Yes |
Where the cash dividend policy is adjusted or changed, and whether the conditions and procedures are compliant and transparent: | Yes |
Information on profit-making during the reporting period and positive undistributed profit of parent company for shareholders butwithout cash dividend distribution plan
□ Applicable ? Not applicable
Profit distribution and conversion from capital reserves to share capital during the reporting period? Applicable □ Not applicable
Number of bonus stock per 10 shares (shares) | 0 |
Amount of dividend (RMB) per 10 shares (tax-inclusive) | 27.30 |
Equity base in distribution plan (shares) | 796,891,157 |
Amount of cash dividends (tax-inclusive) | 2,175,512,858.61 |
Amount of cash dividends realized in other modes (e.g. repurchased shares) (RMB) | 480,065,768.74 |
Total cash dividends (including other modes) (RMB) | 2,655,578,627.35 |
Distributable profits (RMB) | 3,782,559,441.04 |
Proportion of total cash dividends (including other modes) in total distribution of profits | 100% |
Cash Dividends of This Time | |
Others | |
Detailed information on profit distribution and conversion of capital reserve to capital pre-proposal | |
In accordance with the standard unqualified audit report provided by KPMG Certified Public Accountants (Special General Partnership), the parent company of Zhejiang Supor Co., Ltd. realized the net profits of RMB 1,979,653,497.56 in 2023, and could distribute profits of RMB 3,782,559,441.04 to shareholders at the end of the year based on relevant provisions of Company Law and the Articles of Association, after allocating RMB 85,151,939.97 as legal surplus reserve (note: the accumulated amount of legal surplus reserve reached 50% of total capital stock), plus the undistributed profit of RMB 4,331,212,701.66 at the beginning of this reporting period, deducting the annual cash dividends for 2022 fiscal year of RMB 2,439,504,228.21 distributed on May 26, 2023, and decreased distributable profit RMB 3,650,590.00 due to the grant of Restricted Stocks on February 24, 2023 with respect to2022 Restricted Stock Incentive Plan. The profit distribution plan is detailed as follows: based on the 796,891,157shares at the end of 2023 (total capital stock of 806,708,657 shares at the end of 2023 deducted by 9,817,500 shares of repurchased shares in the Company’s special stock repurchase account), the Company will distribute all shareholders cash dividends of RMB 27.30 per 10 shares (tax included), and total amount of cash dividends is RMB 2,175,512,858.61. The Company will issue 0 bonus shares (tax included) and not convert capital reserves to capital. During the period from the disclosure of this profit distribution preplan to the actual implementation date, if the Company’s capital stock changes due to conversion of convertible bonds into stocks, share repurchases, equity incentive exercise, and refinancing and new share listing, it will be executed based on the changed capital stock, and the above distribution ratio remains unchanged. |
XI. Implementation of Company's Equity Incentive Plan, Employee Equity Holding Plan orOther Employee Incentive Measures
? Applicable □ Not applicable
1. Equity incentive
(I) 2021 Equity Incentive Plan
1. The 14
th Session of the Seventh Board of Directors and the 13
th
Session of the Seventh Board of Supervisors of the Company heldon August 30, 2022 deliberated and approved the Proposal on Repurchasing and Canceling a Part of Restricted Stock. Fordisqualification of 13 incentive objects due to their resignation, the Company decided to repurchase and cancel 53,000 shares ofrestricted stock. In addition, the 19
th Session of the Seventh Board of Directors and the 18
thSession of the Seventh Board of Supervisorsof the Company held on March 29, 2023 deliberated and approved the Proposal on Repurchasing and Canceling a Part of RestrictedStock. For the disqualification of 4 incentive objects due to their resignation, the Company decided to repurchase and cancel 21,000shares of restricted stock. The Proposal on Repurchasing and Canceling a Part of Restricted Stock has been adopted by the AnnualGeneral Meeting of Shareholders for 2022 Fiscal Year held on April 25, 2023. The Company has repurchased and canceled 74,000shares of restricted stocks in 2021 Equity Incentive Plan at the price of RMB 1 per share and paid totally RMB 74,000 to the aboveresigned incentive objects. After confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited,the Company completed repurchase and cancellation on June 29, 2023.For details, please refer to the Announcement of Repurchasing and Canceling a Part of Restricted Stock and Announcement ofCompletion of Repurchase and Cancellation of Restricted Stock disclosed on Securities Times, China Securities Journal, SecuritiesDaily, and http://www.cninfo.com.cn on August 31, 2022, March 31, 2023, and June 30, 2023 (Announcement No.: 2022-050, 2023-026, and 2023-052).
2. The 2
nd Session of the Eighth Board of Directors and the 2
nd
Session of the Eighth Board of Supervisors of the Company held onAugust 30, 2023 deliberated and approved the Proposal on Repurchasing and Canceling a Part of Restricted Stock. For thedisqualification of 2 incentive objects due to their resignation, the Company decided to repurchase and cancel 2,000 shares of restrictedstock. Above repurchase and cancelation of Restricted Stocks shall be submitted to the General Meeting of Shareholders for approval.For details, please refer to the Announcement of Repurchasing and Canceling a Part of Restricted Stock disclosed on SecuritiesTimes, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on August 31, 2023 (Announcement No.: 2023-063).
3. The 6
th
Session of the Eighth Board of Directors and the 6
th
Session of the Eighth Board of Supervisors of the Company held onJanuary 26, 2024 deliberated and approved the Proposal on Unlocking of Restricted Stock within the First Unlock Period of 2021Restricted Stock Incentive Plan, agreeing to unlock the Restricted Stock for 270 qualified Incentive Objects in the first unlock period.The number of Restricted Stock unlocked is 555,750 shares, and the restricted stocks in the first unlock period had been listed andcirculated on February 2, 2024.
For details, please refer to the Announcement of Unlocking of Restricted Stock within the First Unlock Period of 2021 RestrictedStock Incentive Plan and the Suggestive Announcement on Listing of Restricted Stock Unlockable during the First Unlock Period of2021 Restricted Stock Incentive Plan disclosed on Securities Times, China Securities Journal, Securities Daily, andhttp://www.cninfo.com.cn on January 27, 2024 and January 31, 2024 (Announcement No.: 2024-005, 2024-007).(II) 2022 Equity Incentive Plan
1. The 18
th Session of the Seventh Board of Directors and the 17
th
Session of the Seventh Board of Supervisors held on January 31,2023 deliberated and approved the Proposal on Grant of Postponed Portion of Restricted Stock to Incentive Objects. The Companyplans to grant 79,000 shares of postponed portion of restricted stocks to 2 incentive objects. The Company completed the registrationof restricted stock grants on February 24, 2023.
For details, please refer to the Announcement of Grant of Postponed Portion of Restricted Stock to Incentive Objects and theAnnouncement of Completion of Registration for Grant of Postponed Portion of Restricted Stock of 2022 disclosed on Securities Times,China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on February 2, 2023 and February 27, 2023 (AnnouncementNo.: 2023-011, 2023-015).
2. The 19
th
Session of the Seventh Board of Directors and the 18
th
Session of the Seventh Board of Supervisors of the Company heldon March 29, 2023 deliberated and approved the Proposal on Repurchasing and Canceling a Part of Restricted Stock. For thedisqualification of 2 incentive objects due to their resignation, the Company decided to repurchase and cancel 1,750 shares of restrictedstock. The Proposal on Repurchasing and Canceling a Part of Restricted Stock has been adopted by the Annual General Meeting ofShareholders for 2022 Fiscal Year held on April 25, 2023. The Company repurchased and canceled 1,750 shares of restricted stock of2022 Equity Incentive Plan at the price of RMB 1 per share and paid totally RMB 1,750 to above resigned incentive objects. Afterconfirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, the Company completed repurchaseand cancellation on June 29, 2023.For details, please refer to the Announcement of Repurchasing and Canceling a Part of Restricted Stock and Announcement ofCompletion of Repurchase and Cancellation of Restricted Stock disclosed on Securities Times, China Securities Journal, SecuritiesDaily, and http://www.cninfo.com.cn on March 31, 2023, and June 30, 2023 (Announcement No.: 2023-026, 2023-052).
3. The 2
nd
Session of the Eighth Board of Directors and the 2
nd
Session of the Eighth Board of Supervisors of the Company held onAugust 30, 2023 deliberated and approved the Proposal on Repurchasing and Canceling a Part of Restricted Stock. For thedisqualification of 3 incentive objects due to their resignation, the Company decided to repurchase and cancel 3,250 shares of restrictedstock. Above repurchase and cancelation of Restricted Stocks shall be submitted to the General Meeting of Shareholders for approval.
For details, please refer to the Announcement of Repurchasing and Canceling a Part of Restricted Stock disclosed on SecuritiesTimes, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on August 31, 2023 (Announcement No.: 2023-063).(III) 2023 Equity Incentive Plan
1. The 3
rd
Session of the Eighth Board of Directors and the 3
rd
Session of the Eighth Board of Supervisors of the Company held onSeptember 27, 2023 reviewed and adopted the Proposal on 2023 Stock Option Incentive Plan (Draft) and its Abstract. The Board ofSupervisors of the Company conducted preliminary verification on the list of incentive objects.
For details, please refer to the 2023 Stock Option Incentive Plan (Draft) and its Abstract of Zhejiang Supor Co., Ltd. disclosed onCninfo (http://www.cninfo.com.cn) on September 28, 2023.
2. On October 14, 2023, the Company disclosed the Verification Opinions on List of Incentive Objects for 2023 Stock Option IncentivePlan. The Board of Supervisors has verified the Incentive Objects of 2023 Stock Option Incentive Plan and concluded that thesubjective qualifications of the Incentive Objects involved in this plan are legal and valid.
For details, please refer to the Verification Opinions on List of Incentive Objects for 2023 Stock Option Incentive Plan disclosedon Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on October 14, 2023 (AnnouncementNo.: 2023-072).
3. The Second Interim General Meeting of Shareholders 2023 convened by the Company on October 19, 2023 deliberated and approvedthe Proposal on 2023 Stock Option Incentive Plan (Draft) and its Abstracts, the Proposal on Assessment Measures for theImplementation of the 2023 Stock Option Incentive Plan, and the Proposal on Requesting the General Meeting of Shareholders toAuthorize the Board of Directors to Deal with Issues Related to the Company's 2023 Stock Option Incentive Plan.
For details, please refer to the Announcement on Resolutions of the Second Interim General Meeting of Shareholders 2023disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn on October 20, 2023(Announcement No.: 2023-073).
4. On October 20, 2023, the Company disclosed the Self-verification on Buying or Selling the Company's Shares by Insiders andIncentive Objects of 2023 Stock Option Incentive Plan. The Company’s insiders did not trade the Company’s shares or involved ininsider trading during the process of planning. In addition, the Company’s insiders and Incentive Objects did not trade the Company’sshares or involved in insider trading within six months before the publication of the Incentive Plan..
For details, please refer to the Self-verification on Buying or Selling the Company's Shares by Insiders and Incentive Objects of2023 Stock Option Incentive Plan disclosed on Securities Times, China Securities Journal, Securities Daily, andhttp://www.cninfo.com.cn on October 20, 2023 (Announcement No.: 2023-074).
5. On October 26, 2023, the 4
th Session of the Eighth Board of Directors and the 4
th
Session of the Eighth Board of Supervisors of theCompany deliberated and approved the Proposal on Grant of Stock Option to Incentive Objects. The Company planned to grant1,075,000 Stock Options to totally 53 Incentive Objects. The Company completed the registration of stock option on November 7,2023.
For details, please refer to the Announcement of Grant of Stock Option to Incentive Objects and the Announcement of Completionof Registration for Grant of Restricted Stock of 2023 disclosed on Securities Times, China Securities Journal, Securities Daily, andhttp://www.cninfo.com.cn on October 27, 2023 and November 8, 2023 (Announcement No.: 2023-079, 2023-084).Equity incentives received by the Company's directors and senior executives? Applicable □ Not applicable
Unit: share
Name | Position | Number of stock options held at the end of the year | Number of newly-granted stock options during the reporting period | Shares which can be exercised during the reporting period | Shares which have been exercised during the reporting period | Exercise price of exercised shares during the reporting period (RMB/share) | Number of stock options held at the end of the period | Market price at the end of reporting period (RMB/share) | Restricted stock held at the beginning of the period | Shares unlocked in current period | Restricted stock newly granted during the reporting period | Granting price of restricted stock (RMB/share) | Restricted stock held at the end of the period |
Cheung Kwok Wah | General Manager | 0 | 96,000 | 0 | 0 | 0 | 96,000 | 53.01 | 142,000 | 0 | 0 | 1 | 142,000 |
Xu Bo | Chief Financial Officer | 0 | 68,000 | 0 | 0 | 0 | 68,000 | 53.01 | 45,000 | 0 | 58,000 | 1 | 103,000 |
Ye Jide | Vice General Manager, Board Secretary | 0 | 25,000 | 0 | 0 | 0 | 25,000 | 53.01 | 20,000 | 0 | 21,000 | 1 | 41,000 |
Total | -- | 0 | 189,000 | 0 | 0 | -- | 189,000 | -- | 207,000 | 0 | 79,000 | -- | 286,000 |
Remarks (if any) | Mr. Cheung Kwok Wah, the General Manager, was granted 60,000 and 82,000 restricted stocks of the 2021 and 2022 Equity Incentive Plans, respectively, for a total of 142,000 shares. Amongst others, 30,000 unlockable restricted stocks in the first unlock period of the 2021 Equity Incentive Plan had been listed and circulated on February 2, 2024. In addition, 96,000 stock options under the 2023 Equity Incentive Plan were granted to Mr. Cheung Kwok Wah. Mr. Xu Bo, the Chief Financial Officer, was granted 45,000 and 58,000 restricted stocks of the 2021 and 2022 Equity Incentive Plans, respectively, for a total of 103,000 shares. Amongst others, 22,500 unlockable restricted stocks in the first unlock period of the 2021 Equity Incentive Plan had been listed and circulated on February 2, 2024, and the restricted stocks granted under the 2022 Equity Incentive Plan had been registered on February 24, 2023. In addition, 68,000 stock options under the 2023 Equity Incentive Plan were granted to Mr. Xu Bo. Mr. Ye Jide, the Vice General Manager and Board Secretary, was granted 20,000 and 21,000 restricted stocks of the 2021 and 2022 Equity Incentive Plans, respectively, for a total of 41,000 shares. Amongst others, 10,000 unlockable restricted stocks in the first unlock period of the 2021 Equity Incentive Plan had been listed and circulated on February 2, 2024, and the restricted stocks granted under the 2022 Equity Incentive Plan had been registered on February 24, 2023. In addition, 25,000 stock options under the 2023 Equity Incentive Plan were granted to Mr. Ye Jide. |
Evaluation mechanism and incentive of senior executives
The Company has established a perfect performance appraisal system and salary system for senior executives, which directlyconnects the work performance of senior executives with their salary. Based on the indicators of the KPI system established at thebeginning of 2023, the Company has conducted the year-end appraisal in January 2024 of senior executives of their working abilities,duty performance and target fulfillment, meanwhile, distributed annual performance salary. During the reporting period, the Companyimplemented the 2023 Stock Option Incentive Plan (Draft), and deliberated and approved the Administratiom Measures for thePerformance Incentive Fund, with a view to achieving effective motivation of the senior executives. Besides, the Company held the
thSession of the Eighth Board of Directors on January 26, 2024, and agreed to unlock restricted stocks granted to the senior executivesthat are unlockable in the first unlock period in accordance with the 2021 Restricted Stock Incentive Plan (Draft). The Compensationand Appraisal Committee of the Board of Directors, as the special committee under the Board of Directors, reviewed the appraisalresult.
2. Implementation of the employee stock ownership plan
□ Applicable ? Not applicable
3. Other employee incentive measures
□ Applicable ? Not applicable
XII. Development and Implementation of Internal Control Systems during the ReportingPeriod
1. Development and implementation of internal controls
In accordance with the requirements of the Basic Standards for Internal Control of Enterprises, its supporting guidelines, as wellas other requirements for internal control supervision and based on the principles of comprehensiveness, significance, balance,adaptability and cost-effectiveness, the Company establishes and improves the internal control system implemented by the Board ofDirectors, Board of Supervisors, managers and all employees to achieve the Company's strategic development goals, with a view toreasonably ensuring the legal compliance of the Company's operation and management, asset security, and authenticity and integrityof financial statements and related information, and to improving business efficiency and effectiveness.
1. Control environment
(1) Governance structure
In accordance with the provisions of national laws and regulations, resolutions of the Board of Shareholders, and the Articles ofAssociation, the Company defines the duties and authorities, rules of procedure, and working procedures of the Board of Shareholders,Board of Directors, Board of Supervisors and managers, so as to form a governance mechanism for the separation of decision-making,implementation, and supervision. The Board of Directors is accountable for the Board of Shareholders, and exercises the businessdecision-making power of the Company according to law, and shall be accountable for the establishment, improvement and effectiveimplementation of internal control. The special committees pertaining to strategy, audit and remuneration set up under the Board ofDirectors provide support for scientific decision-making, in which the Audit Committee is responsible for reviewing and supervisingthe effective implementation of internal controls and the self-evaluation on internal controls. The Board of Supervisors is accountablefor the Board of Shareholders and supervises the Board of Directors and senior executives of the Company to perform their duties
according to law. The senior management composed of the President and the Chief Financial Officer are accountable for the Board ofDirectors, and take charge of the daily operation and management activities of the Company.
(2) Organizational structure and division of authorities and responsibilities
In view of the business characteristics and internal control requirements, the Company reasonably sets up internal organizationsat all levels, such as the functional departments of the headquarters, business departments, production bases, marketing centers andother internal institutions, and defines the division of authorities and responsibilities in the organization structure chart, job descriptions,business flow charts, authorization system documents and other internal management documents, so as to form a working mechanismthat allows performance of corresponding duties with mutual restriction and coordination.
(3) Internal audit
The Company has set up an audit department, which reports to the Audit Committee of the Board of Directors. The auditdepartment evaluates the level of internal control and the efficiency of process control and organization by means of internal audit,internal control consultation and organizational risk assessment, and timely reports to the management and the Audit Committee forthe internal control defects and potential risks detected in the process of supervision and inspection, and promotes relevant departmentsto formulate action plans and follow up the corresponding rectification performance to ensure the effective implementation of internalcontrols.
(4) Human resource policies
In accordance with the development strategy, current situation of human resources, and future demand forecast, the Companyformulates and implements human resources policies conducive to the sustainable development of the Company. The PersonnelManagement System, Recruitment Management System, Remuneration Management System, Training Management System,Attendance Management System, and Employee Manual formulated by the Company clearly define the principles and processes for theemployees in aspects of selection and appointment, dimission and transfer, remuneration assessment, training, rewards and punishments,labor disciplines, information confidentiality, etc.
(5) Enterprise culture
The Company adheres to the enterprise spirit of "With Pressure, Face Pressure, Overcome pressure", sets up the enterprise styleof "Patriotism, Integrity, Modesty, Pragmatism, Innovation and Transcendence, and devotes to improving the living quality ofthousands upon thousands of families in their kitchens and homes, so that "Where there is a home, there is Supor" can become theconsensus of more and more consumers. Through the establishment of a series of internal norms such as the Basic Law of Supor, theCode of Professional Ethics of Employees and the Rules for Anti-fault the Company integrates the efficient and pragmatic corporateculture into all aspects of daily production and operating activities, and enhances the employees' sense of responsibility and sense ofmission, normalizes employee behaviors, enhances corporate cohesion and coagulation, and constantly improves the overall image ofthe Company.
2. Risk assessment
According to the established control objectives and the characteristics of business development in different stages, the Companyintroduces different forms of measures, such as risk self-assessment, anti-corruption questionnaire, risk mapping, and tax risk matrix,to carry out comprehensive, systematic and continuous collection of relevant information, with the method combining both quantitativeand qualitative measures, in order to timely identify and systematically analyze the internal risks in the production and operatingprocesses in terms of human resources, management, innovation, finance, assets, health, safety, environmental protection, data
confidentiality, business loss, and continuing operation, and the external risks in the production and operating processes in terms ofpolitics, economy, law, taxation, science and technology, natural environment, social environment, etc., and to determine the riskresponse strategy that matches the Company's risk bearing capacity and take appropriate control measures to achieve effective riskcontrol, on the basis of weighing the principle of cost-benefit.
3. Control activity
In the course of daily operation, the Company continuously establishes and improves various management systems, coveringfinancial accounting, internal control, human resources, material procurement, inventory management, asset management,technological R&D, production process, quality control, product sales, health, safety and environment, comprehensive management,etc., to ensure the compliance of all work aspects. Under the various institutional frameworks, the Company reasonably ensures therealization of business objectives through the implementation of key control measures and procedures.Key controls must include: separated control for incompatible posts, approval control for authorization, accounting system control,property protection and control, budget control, operational analysis control, performance assessment control and other controls.
(1) Approval control for authorization: the Company defines the scope, authority, procedure, responsibility and other relevantaspects of authorization and approval, and the management staff at all levels of the Company must exercise the corresponding functionsand powers within the scope of authorization, and the handling personnel must also handle economic transactions within the scope ofauthorization and bear corresponding liabilities.
(2) Separated control for incompatible posts: the Company sets up a reasonable division of labor, scientifically dividesresponsibilities and powers, and formulates the System of Separation of Responsibilities and Powers in accordance with the principleof separation of incompatible duties, so as to form a mechanism of mutual checks and balances. Incompatible duties mainly include:
feasibility study and decision approval, decision approval and implementation, implementation and supervision & inspection.
(3) Accounting system control: in strict accordance with the provisions of the Accounting Standards for Business Enterprises, theCompany formulates the financial policies and processes such as the Accounting Preconditions and Basic Principles, AccountingSystem of Accounting Subjects, Revenue Recognition System, Consolidated Statement System, and Account Settlement Process, clearlydefines the handling procedures for accounting vouchers, accounting books and financial statements, so as to ensure the authenticityand integrity of accounting data.
(4) Property protection and control: the Company strictly restricts unauthorized personnel from accessing and disposing assets,and adopts measures such as regular stocktaking, asset records, account verification, and property insurance, to ensure the safety of allkinds of assets in accordance with the requirements of the Inventory Taking and Regulation System, and Fixed Assets ManagementSystem formulated by the Company.
(5) Budget control: the Company implements comprehensive budget management in accordance with the Budget System, and theresponsible departments at all levels prepare their budgets in accordance with their responsibilities and powers, and regularly followup the implementation of their budgets after being reviewed and approved by the management.
(6) Operational analysis control: the Company has established a regular operation analysis mechanism, with which themanagement can utilize the data and information acquired in the production, procurement, sales, finance and other systems tocomprehensively analyze and evaluate the Company's operating risks and market situations, timely detect any problems, identify thecauses and formulate effective rectification plans for improvement.
(7) Performance assessment control: according to the requirements of the Company's Remuneration Management System, theCompany's organizations at all levels have established and implemented a comprehensive and systematic performance assessmentsystem, to scientifically set up performance assessment indicators of various individuals/groups, regularly organize assessment andobjective evaluation, and take the assessment results as the basis for employee remuneration adjustment, job promotion, reward andpunishment, post transfer, dismissal, etc.
4. Information and communication
According to the requirements of development strategy, risk control and performance assessment, the Company has establisheddifferent levels of internal reporting indicator systems, in order to enable the management at all levels to timely and comprehensivelyaccess all kinds of internal and external information pertaining to production and management and promptly formulate businessprinciples and policies adaptive to business and environmental changes. The internal reporting systems make full use of informationtechnology to build a scientific internal reporting network based on reliable information systems such as SAP, BI, CRM, consolidatedstatements, and management statements.
The Company has established a special anti-fraud mechanism, clearly defined the key areas and key links of anti-fraud efforts andthe anti-fraud responsibilities and powers of relevant departments, and set up the solely-designated supervision channel to standardizethe whistleblowing, investigation, handling, reporting and follow-up processes of fraud cases. Besides, through e-mail, official website,WeChat official account, contracts, training, meetings and other forms of measures, the Company publicizes the anti-fraud policies andsupervision channels to employees, suppliers, distributors and other stakeholders from time to time, so as to form an anti-fraudatmosphere which emphasizes on prevention and combines both punishment and prevention.
5. Supervision on control
The Company has established an internal control and supervision mechanism, with which the independent directors and the Boardof Supervisors can fully and independently perform supervisory duties for the management of the Company, and carry out independentevaluation and provide independent suggestions. The Company has formulated the Internal Audit System, and the special internal auditdepartment under the leadership of the Audit Committee of the Board of Directors can independently carry out internal audit, implementeffective supervision over the management and promote the effective implementation of internal controls. In the light of the situationof internal supervision, the Company regularly carries out self-evaluation on the effectiveness of internal controls and issues Self-Evaluation Report on Internal Control System.
2. Significant internal control defects of internal control found during the reporting period
□ Yes ? No
XIII. Company's Management and Control of Subsidiaries during the Reporting PeriodThe headquarters of listed companies effectively monitors the subsidiaries through the following measures:
(1) Delegate and appoint senior executives of subordinate subsidiaries at the beginning of each year, and clearly define their terms ofreference and report objects.
(2) Supervise subordinate subsidiaries to formulate detailed management processes and risk control procedures for various businesssectors and functional areas under the principle frameworks of management systems of the headquarters and business divisions.
(3) Convene a monthly operating and financial meeting to review and follow up the implementation of the subsidiaries' business plansand the completion of various performance evaluation indicators in a timely manner, in accordance with the Company's developmentand business objectives specified in the annual budget planning meeting. Besides, various functional committees, such as productcommittee, and procurement committee, also carry out effective monitoring over the daily operation and operating activities of thesubsidiaries.
(4) The main financial and business information systems, including SAP, CRM, SRM, BI, OMS and BPM, are centrally managed inthe headquarters of listed companies, which is convenient for the headquarters to access and manage the production, sales andprocurement of the subsidiaries through system reports in real time. In addition, all subsidiaries are also required to submitmanagement reports in respect of operation, finance, industry, human resources, etc., to the headquarters on a monthly basis.
(5) The receipts and payments of major subsidiaries are subject to centralized allocation and disbursement of the Financial SharingCenter of the headquarters of the listed companies, and the Financial Sharing Center is responsible for the preparation and reportingof the monthly balance sheets, profit statements and cash flow statements of the subordinate subsidiaries, and convening regularmeetings with subordinate subsidiaries to analyze and follow up the changes of various financial data.
(6) In accordance with the requirements of the Company's Management System for Information Disclosure Affairs, each subsidiaryshall promptly report to the headquarters of the listed companies relevant information pertaining to major business/financial and othermatters, and provide timely feedback on the progress or changes of major matters, and if necessary, go through the review and approvalprocedures of the Board of Directors and Board of Shareholders.
(7) Timely identify the potential risks and major issues inside and outside the subsidiaries by means of internal audit, risk self-assessment, anti-corruption questionnaire, management statement and anti-fraud investigation, etc., draw the management's attentionto key areas and vulnerable links, and promptly take measures to reduce relevant risks.XIV. Evaluation Report of Internal Control or Internal Control Audit Report
1. Evaluation Report of Internal Control
Date of disclosure of full text of Evaluation Report of Internal Control | March 30, 2024 | |
Reference for disclosure of full text of Evaluation Report of Internal Control | Reference can be made to Self-Evaluation Report on Internal Control 2023 disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn. | |
The proportion of total unit assets involved in evaluation scope in total assets of the consolidated financial statement | 100.00% | |
The proportion of operating income involved in evaluation scope in operating income of the consolidated financial statement | 100.00% | |
Defect Identification Standard | ||
Categories | Financial statement | Non-financial statement |
Qualitative standard | 1) Identification standard of significant defects: fraud of directors, supervisors and senior executives of the Company; modification of financial statement having been published; any material misstatement | 1) Identification standard of significant defects: unscientific decision procedure of the Company, such as significant decision-making mistakes which cause the M&A of significant enterprise project to fail in |
of the current period financial statement found by CPA but having not been found during internal control; and invalid supervision by the Audit Committee, the Board of Supervisors and internal audit organization for internal control. 2) Identification standard of important defects: selection and application of accounting policies violating accepted accounting criteria; one or several defect(s) on the control of closing financial statement, and failure of reasonably guarantee the prepared financial statement is true and accurate; no check-and-balance system and control measures preventing fraud established. 3) General defects refer to other internal control defects not constituting the standards of significant defects and important defects. | reaching expected objectives; violation of national laws and regulations, such as heavy losses of enterprise caused by non-conforming products; significant adverse influence existing in the production and operation of enterprise caused by severe loss of medium and senior management persons and senior technicians; and lack of system control or systematic invalidation for important business. 2) Identification standard of important defects: defects on important business systems; failure of rectification for important defects found during internal control and internal supervision; and severe loss of business persons on key posts. 3) Identification standard of general defects: defects on general business systems; failure of rectification for general defects found during internal control and internal supervision; and severe loss of business persons on general posts. | |
Quantitative standard | 1) Identification standard of significant defects: potential misstatement of total profit ≥ 5% of total profit; potential misstatement of total operating income ≥ 2% of total operating income; and potential misstatement of total assets ≥ 2% of total assets. 2) Identification standard of important defects: 3% of total profit ≤ potential misstatement of total profit < 5% of total profit; 1% of total operating income ≤ potential misstatement of total operating income < 2% of total operating income; and 1% of total assets ≤ potential misstatement of total assets < 2% of total assets. 3) Identification standard of general defects: potential misstatement of total profit < 3% of total profit; potential misstatement of total operating income < 1% of total operating income; and potential misstatement of total assets < 1% of total assets. | 1) Identification standard of significant defects: direct property loss amount taking above (inclusive) 0.5% in total assets, and causing significant adverse influence on the Company. 2) Identification standard of important defects: direct property loss amount taking above (inclusive) 0.1% but no more than 0.5% in total assets, and causing no significant adverse influence on the Company. 3) Identification standard of general defects: direct property loss amount taking below 0.1% in total assets, and causing significant adverse influence on the Company. |
Quantity of significant defects in financial statement (pcs) | 0 | |
Quantity of significant defects in non-financial statement (pcs) | 0 | |
Quantity of important defects in financial statement (pcs) | 0 | |
Quantity of important defects in non-financial statement (pcs) | 0 |
2. Audit report of internal control
? Applicable □ Not applicable
Deliberations in the audit report of internal control | |
We believe that your company has maintained effective internal control over financial reporting in all major aspects in accordance with the Basic Standards for Internal Control of Enterprises and relevant regulations on December 31, 2023. | |
Disclosure of audit report of internal control | Disclosed |
Date of disclosure of full text of Audit Report of Internal Control | March 30, 2024 |
Reference for disclosure of full text of Audit Report of Internal Control | Reference can be made to Audit Report on Internal Control 2023 disclosed on Securities Times, China Securities Journal, Securities Daily, and http://www.cninfo.com.cn. |
Type of audit report opinion of internal control | Standard opinions with no reservation |
Significant defect in non-financial statements | No |
Did the accounting firm issue the audit report of internal control with non-standard opinions?
□ Yes ? No
Is the audit report of internal control issued by the accounting firm consistent with the opinions in self-evaluation report of the Boardof Directors?? Yes □ No
XV. Rectification of Self-inspected Problems in the Special Action on Governance of ListedCompanies
Not applicable
SECTION V SOCIAL AND ENVIRONMENTAL
RESPONSIBILITIESI. Major Environmental IssuesDo the listed company and its subsidiary belong to key pollutant discharging unit posted by the environmental protection department?? Yes □ NoPolicies and industrial standards related to environmental protection
According to the Technical Specification for Application and Issuance of Pollutant Permit General Programme (HJ942-2018),the Self-monitoring Technology Guidelines for Pollution Sources - General Rule (HJ819-2017) and the national standards for pollutantsdischarge, the environmental impact assessment documents of construction projects and their administrative licenses, and therequirements in national environment monitoring technical specifications, the Company has improved its self-monitoring scheme,which needs to be put on record by the competent department for ecological environment under its jurisdiction.Administrative permissions for environmental protectionAccording to the information from related systems, the relevant administrative permits of environmental protection are as follows:
Name of the Company or subsidiary | Date of completion | Validity period |
The Company | December 12, 2023 | June 30, 2023 - June 29, 2028 |
Zhejiang Supor Electrical | October 23, 2023 | August 25, 2020 - August 24, 2025 |
Shaoxing Supor | July 10, 2023 | July 10, 2023 - July 9, 2028 |
Wuhan Supor Cookware | September 15, 2023 | September 11, 2023 - September 10, 2028 |
Industrial emission standard and pollutant discharge in production and operating activities
Name of the Company or subsidiary | Type of main pollutant or specific pollutant | Name of main pollutant or specific pollutant | Discharge mode | Number of discharge ports | Distribution of discharge ports | Discharge concentration/intensity | Executive pollutant discharge standard | Total discharge amount | Total discharge amount checked | Excessive discharge |
The Company | Water pollutants | COD | Indirect discharge | 1 | Wastewater discharge port of the wastewater station in plant area | 30mg/L | Integrated Wastewater Discharge Standard (GB8978-1996) | 5.19t | 8.662t/a | None |
Ammoniacal nitrogen | Indirect discharge | 1 | 1.5mg/L | Indirect Discharge for Emission Limitation of Nitrogen and Phosphorus for Industrial Wastewater (DB33/887-2013) | 0.26t | 0.433t/a | None | |||
Air pollutants | Sulfur dioxide | Organized emission | 39 | No.1, No.2 and No.6 plants | <200 mg/m? | Emission Standard of Air Pollutants for Industrial Surface | 0.95t | 3.06t/a | None |
Coating (DB33/2146-2018); Integrated Emission Standard of Air Pollutants (GB16297-1996); Emission Standard of Air Pollutants for Industrial Kiln and Furnace (GB9078-1996) | ||||||||||
Oxynitride | Organized emission | 39 | <300 mg/m? | Emission Standard of Air Pollutants for Industrial Surface Coating (DB33/2146-2018); Integrated Emission Standard of Air Pollutants (GB16297-1996); Emission Standard of Air Pollutants for Industrial Kiln and Furnace (GB9078-1996) | 8.86t | 14.66t/a | None | |||
Zhejiang Supor Electrical | Water pollutants | Chemical oxygen demand | Indirect discharge | 1 | General outlets of wastewater (DW001) | 136 mg/l | Integrated Wastewater Discharge Standard (GB8978-1996) | 17.49t | 111.1348t/a | None |
Ammoniacal nitrogen | 1 | 6.19 mg/l | Indirect Discharge for Emission Limitation of Nitrogen and Phosphorus for Industrial Wastewater (DB33/887-2013) | 1t | 7.7794t/a | None | ||||
Total nitrogen | 1 | 10.4 mg/l | Emission Standard of Pollutants for Electroplating (GB 21900-2008) | 1.2675t | 3.334t/a | None | ||||
Shaoxing Supor | Water pollutants | Chemical oxygen demand | Indirect discharge | 1 | Comprehensive sewage discharge port | <200mg/L | Integrated Wastewater Discharge Standard (GB8978-1996) | 144.29t | 224.657t/a | None |
Ammoniacal nitrogen | 1 | <10mg/L | Indirect Discharge for Emission Limitation of Nitrogen and Phosphorus for Industrial Wastewater (DB33/887-2013) | 7.215t | 9.363t/a | None | ||||
Total nitrogen | 1 | <20mg/L | Wastewater Quality Standards for Discharge to Municipal Sewers | 14.429t | 33.447t/a | None |
(GB/T 31962-2015); | ||||||||||
Wuhan Supor Cookware | Water pollutants | Chemical oxygen demand | Indirect discharge | 1 | General discharge port of the sewage treatment station to the north of the plant area | <500mg/L | Integrated Wastewater Discharge Standard (GB8978-1996) | 9.317t | 19.38t/a | None |
Ammoniacal nitrogen | 1 | <45mg/L | Wastewater Quality Standards for Discharge to Municipal Sewers (GB/T 31962-2015); | 0.573t | 1.94t/a | None | ||||
Air pollutants | Volatile organic compounds | Organized emission | 1 | Emission port of waste gas treatment of No.1 workshop | <120mg/Nm? | Integrated Emission Standard of Air Pollutants (GB16297-1996) | 2.587t | 12.16t/a | None |
Treatment of pollutantsUnder special sewage treatment mechanism in the Company, all wastewater generated will gather at this station for centraltreatment. After chemical precipitation and autocatalyzed oxidation, wastewater will meet the first grade discharge standards and thenbe discharged into urban wastewater pipes. At the same time, the Company has reclaimed water reuse facilities that can arrange watertreatment plan according to water quality. The production wastewater is first treated at the sewage treatment station and then disposedthrough the reclaimed water system for production. After that, part of the sanitary sewage after combined treatment enters municipalsewage network.The Company collected different exhaust gases and used different treatment modes, and then discharged after reaching thestandard. The treatment processes involved are as follows: water curtain, spray tower, dry filter, low-temperature plasma, cyclone andfilter dust collector, activated carbon adsorption, UV photolysis purification, desorption and catalytic combustion and other combinedtreatments.The Company has established a reliable wastewater and exhaust gas treatment system, and ensures that the discharge and disposalof three wastes generated in the process of production and operation comply with relevant laws and regulations through regularinspection, supervision and inspection mechanism and third-party inspection organizations. During the reporting period, if theCompany does not exceed the standard discharge, it will meet the relevant requirements of the competent department for ecologicalenvironment.Environmental monitoring schemeThe Company has formulated an annual environmental monitoring scheme in accordance with relevant national laws andregulations, and entrusted a qualified third party to carry out environmental monitoring.Environmental emergency planThe Company has completed the emergency plan for environmental emergencies and conducted regular emergency drills.Environmental governance and protection input and payment of environmental protection tax
During the reporting period, the Company's total investment in environmental governance and protection was RMB 20.14 million,including RMB 0.055 million of environmental protection tax.Measures and effects taken to reduce carbon emissions during the reporting period
□ Applicable ? Not applicable
Administrative penalties for environmental problems during the reporting periodNoneOther environmental information that shall be made publicNoneOther environmental protection related informationNone
II. Social responsibilities
For details, please refer to the Environmental, Social and Governance Report 2023 released by the Company.III. Consolidate and Expand the Achievement of Poverty Alleviation and the Implementationof Rural Revitalization
During the reporting period, the Company actively supported the national policy of rural revitalization and common prosperity,adhered to the Company's vision and mission, practiced the welfare proposition of "sharing a better life with each child", activelydonated funds to improve the basic education conditions in remote mountainous areas in the central and western regions, activelyleveraged its industrial and resource advantages to support urban and rural schools in promoting life literacy education. In doing so,the Company collaborated with the families and schools to jointly cultivate future-oriented, life-loving, and new-generation childrenwho care for their families.
At present, the Company has donated for the construction of 28 Supor Primary Schools in remote mountainous areas in the centraland western regions, and will steadily increase the number of schools in the future. In 2023, Supor joined hands with public welfarepartners to continue to provide online livestreaming courses of art, foreign language, and science to 14 Supor Primary Schools, allowingchildren in mountain villages to access high-quality education. The Company has also been focusing on improving the educationalperspectives and abilities of rural teachers in mountainous areas over the years. In the summer of 2023, the study tour for rural teachersat Supor Primary Schools resumed, and 41 rural teachers came to Hangzhou with the support of the Company to carry out educationalexchanges.
The "Supor – Little Artists of Life" project, which supports the improvement of life literacy education in urban and rural schools,is also progressing steadily, and perfecting progressively. To date, over 20 urban and rural schools across Hangzhou, Shaoxing, Lishui,Wuhan, Xingyi, and more have received support, creating life education space and conducting life skills classes, enabling children toachieve better growth through practical experiences.
Supor employees also took an active part in public welfare. On the eve of the Children's Day, hundreds of employees of theCompany participated in the "Running for Children" campaign to provide donations based on the number of running steps, supportingthe children in need. During the public welfare week in December, employee volunteers visited Qinglong Dasendian Supor PrimarySchool in Hebei on behalf of the Company, offering interest classes in cooking, crafts, reading, and hosting to the children, spendingjoyful time together.
In addition, the Company also actively donated useful supplies for rural revitalization and earthquake relief, bringing warmth torural children and victims.
In the future, the Company will continue to actively respond to the national policy of rural revitalization and common prosperity,give full play to the advantages of Supor's business capabilities and resources, actively promote various charity programs and activitiesin terms of literacy education for children in rural villages and broadening their horizons, and work with more like-minded charitypartners to contribute to a better life and better society in rural areas.
Indicator | Measurement unit | Quantity/fulfillment |
Rural revitalization and common prosperity
Rural revitalization and common prosperity | —— | —— |
Including: Investment amounts for funding poor students | RMB 10,000 | |
Number of benefited rural students | Person | 10,000 |
Amount invested to improve the education resources in rural areas (material value) | RMB 10,000 | 867 |
Awards received (content, grade)
Awards received (content, grade) | —— | —— |
CCTV Top 100 ESG Pioneers | ||
Zhejiang Province Corporate Social Responsibility Outstanding Report | ||
Most Influential Brand of the Social Responsibility Assembly | ||
Responsibility Brand Award in the Public Welfare Festival |
SECTION VI SIGNIFICANT EVENTS
I. Fulfillment of Commitments
1. Commitments that were fulfilled during the reporting period and had not been fulfilled till the end ofreporting period by actual controller, shareholder, related party, acquirer and other commitment parties ofthe Company
□ Applicable ? Not applicable
There were no commitments that were fulfilled during the reporting period and had not been fulfilled till the end of reporting periodby actual controller, shareholder, related party, acquirer and other commitment parties of the Company.
2. Where assets or projects of the Company are expected to make profit, and the expected profiting period isduring the reporting period, the Company hereby explains
□ Applicable ? Not applicable
II. Occupied Non-business Capital of Listed Company for Controlling Shareholders andRelated Parties
□ Applicable ? Not applicable
There was no non-operating occupation of capital of listed companies by controlling shareholders and their related parties of theCompany during the reporting period.III. Illegal External Guarantee
□ Applicable ? Not applicable
There was no illegal external guarantee of the Company during the reporting period.IV. Explanation on the Board of Directors on the Latest "Non-standard Audit Report"
□ Applicable ? Not applicable
V. Explanation on the Board of Directors, the Board of Supervisors and Independent Directors(If Any) on the "Non-standard Audit Report" during the Reporting Period
□ Applicable ? Not applicable
VI. Representation of Changes in Accounting Policies and Accounting Estimates or Correctionof Important Accounting Errors, Compared with the Financial Statements of the Previous Year
□ Applicable ? Not applicable
During the reporting period, there was no change in accounting policies, accounting estimates or correction of important accountingerrors.
VII. Information on Change of the Scope of Consolidated Statement Compared with thePrevious Year's Financial Statements
□ Applicable ? Not applicable
There was no change in the scope of consolidated statements during the reporting period.
VIII. Employment and Disengagement of Certified Public Accountants
Certified public accountants engaged at the moment
Name of the Chinese Certified Public Accountants | KPMG Huazhen LLP (Special General Partnership) |
Reward for domestic certified public accountants (RMB 10,000) | 280.00 |
Service years of audit for the Company | 3 |
Names of CPAs from domestic certified public accountants | Huang Feng, Jin Yang |
Service years of audit of the CPAs | Huang Feng (three years), Jin Yang (three years) |
Intension of changing certified public accountants
□ Yes ? No
Employment of internal control counting firm, financial consultant or sponsor? Applicable □ Not applicableSame accounting firm for internal control audit
IX. Delisting after Disclosure of Annual Report
□ Applicable ? Not applicable
X. Bankruptcy or Reorganization
□ Applicable ? Not applicable
There was no bankruptcy, reorganization or related matters in the Company during the reporting period.
XI. Important Matters of Lawsuit and Arbitration
□ Applicable ? Not applicable
There was no significant litigation and arbitration occurred during the reporting period.XII. Punishment and Rectification
□ Applicable ? Not applicable
There was no punishment and rectification during the reporting period.XIII. Integrity of the Company, Its Controlling Shareholders and Actual Controllers
□ Applicable ? Not applicable
XIV. Major Related Transactions
1. Related transaction related to daily business
? Applicable □ Not applicable
Related party | Association relationships | Type of related transaction | Contents of related transaction | Pricing principle of related transaction | Price of related transaction | Amount of related transaction (RMB 10,000) | Percentage to amount of same transaction | Approved transaction limit (RMB 10,000) | Exceeding approved limit or not | Means of payments of related transaction | Market price of available same transaction | Date of disclosure | Reference for disclosure |
Wuhan Anzai Cookware Co., Ltd. | Associated enterprise | Purchase of commodity | Finished products | Contract price | - | 12,917.47 | 0.97% | No | Bank transfer or notes | - | |||
Wuhan Anzai Cookware Co., Ltd. | Associated enterprise | Purchase of commodity | Accessories | Market price | - | 5,250.52 | 0.39% | No | Bank transfer or notes | - | |||
GROUPE SEB EXPORT | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 132.33 | 0.01% | No | Bank transfer or notes | - | |||
GROUPE SEB EXPORT | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 7.38 | 0.00% | No | Bank transfer or notes | - | |||
GROUPE SEB MOULINEX | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 287.17 | 0.02% | No | Bank transfer or notes | - | |||
LAGOSTINA S.P.A. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 282.13 | 0.02% | No | Bank transfer or notes | - | |||
TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 2,021.35 | 0.15% | No | Bank transfer or notes | - | |||
GROUPE SEB SINGAPORE | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 1.76 | 0.00% | No | Bank transfer or notes | - | |||
GROUPE SEB THAILAND | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 41.37 | 0.00% | No | Bank transfer or notes | - | |||
SEB ASIA LTD. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 26.05 | 0.00% | No | Bank transfer or notes | - | |||
Heshan Demei Tableware Co., Ltd. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 18.47 | 0.00% | No | Bank transfer or notes | - | |||
WMF GROUPE GMBH | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 5,599.11 | 0.42% | No | Bank transfer or notes | - |
WMF Consumer Goods (Shanghai) Co, Ltd. | Same controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 1.02 | 0.00% | No | Bank transfer or notes | - | |||
SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Finished products | Contract price | - | 2.11 | 0.00% | No | Bank transfer or notes | - | |||
SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 8.41 | 0.00% | No | Bank transfer or notes | - | |||
ETHERA | Same controlling shareholder with the controlling shareholder | Purchase of commodity | Accessories | Market price | - | 14.14 | 0.00% | No | Bank transfer or notes | - | |||
GROUPE SEB KOREA LTD | Same controlling shareholder | Purchase of commodity | Finished products | Market price | - | 17.12 | 0.00% | No | Bank transfer or notes | - | |||
SEB ASIA LTD. | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 571,865.12 | 26.84% | No | Bank transfer or notes | - | |||
SEB ASIA LTD. | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 2,235.54 | 0.10% | No | Bank transfer or notes | - | |||
S.A.S. SEB | Same controlling shareholder with the controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,572.28 | 0.07% | No | Bank transfer or notes | - | |||
S.A.S. SEB | Same controlling shareholder with the controlling shareholder | Sale of commodities | Accessories | Contract price | - | 47.19 | 0.00% | No | Bank transfer or notes | - | |||
TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder | Sale of commodities | Finished products | Contract price | - | 267.48 | 0.01% | No | Bank transfer or notes | - | |||
TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder | Sale of commodities | Accessories | Contract price | - | 1,824.55 | 0.09% | No | Bank transfer or notes | - | |||
GROUPE SEB MOULINEX | Same controlling shareholder with the controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,434.42 | 0.07% | No | Bank transfer or notes | - | |||
Supor Group Co., Ltd. | Company controlled by related natural person | Sale of commodities | Finished products | Market price | - | 997.67 | 0.05% | No | Bank transfer or notes | - | |||
Zhejiang Nanyang | Company | Sale of | Finished | Market | - | 88.15 | 0.00% | No | Bank transfer | - |
Pharmaceutical Sales Co., Ltd. | controlled by related natural person | commodities | products | price | or notes | ||||||||
SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder | Sale of commodities | Accessories | Contract price | - | 2,017.58 | 0.09% | No | Bank transfer or notes | - | |||
LAGOSTINA S.P.A. | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 44.02 | 0.00% | No | Bank transfer or notes | - | |||
GROUPE SEB CANADA | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,107.06 | 0.05% | No | Bank transfer or notes | - | |||
IMUSA USA LLC | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 755.94 | 0.04% | No | Bank transfer or notes | - | |||
IMUSA USA LLC | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 4.31 | 0.00% | No | Bank transfer or notes | - | |||
WMF Consumer Goods (Shanghai) Co, Ltd. | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 22.69 | 0.00% | No | Bank transfer or notes | - | |||
GROUPE SEB VIETNAM JOINT STOCK COMPANY | Same controlling shareholder | Sale of commodities | Finished products | Contract price | - | 1,359.23 | 0.06% | No | Bank transfer or notes | - | |||
GROUPE SEB ANDEAN S.A. | Same controlling shareholder | Sale of commodities | Accessories | Contract price | - | 152.07 | 0.01% | No | Bank transfer or notes | - | |||
Total | -- | -- | 612,423.21 | -- | 0 | -- | -- | -- | -- | -- | |||
Details of large sales return | Not applicable | ||||||||||||
Actual implementation of estimated total amount of related transaction by category incurred during the period in the reporting period (if any) | In 2023, the annual daily related transaction amount between the Company and SEB as well as its related parties was estimated to be RMB 6,000 million, and the actual amount of daily related transactions is RMB5,931.69 million, which is RMB 68.31million less than the total amount of daily related transaction estimated in the announcement. (See details in the Announcement of Increasing Estimation of Daily Connected Transactions in 2023 and Estimation of Daily Connected Transactions in 2024 (No.: 2023-089) disclosed by the Company on December 22, 2023 on http://www.cninfo.com.cn). | ||||||||||||
Reason for the big difference between transacted price and market reference price (if applicable) | Not applicable |
2. Related transactions from purchase and sales for assets or equity
□ Applicable ? Not applicable
There were no related transactions from purchase and sales for assets or equity during the reporting period.
3. Related transaction for co-investment abroad
□ Applicable ? Not applicable
There was no related transaction involving joint external investment during the reporting period.
4. Connected creditor's rights and debts
□ Applicable ? Not applicable
There were no related creditor's rights and debts during the reporting period
5. Dealings with associated financial companies
□ Applicable ? Not applicable
There was no deposit, loan, credit or other financial business between the Company and associated financial companies and their relatedparties.
6. Dealings between the financial companies controlled by the Company and their related parties
□ Applicable ? Not applicable
There was no deposit, loan, credit or other financial business between the Company and holding financial companies and their relatedparties.
7. Other important Related transactions
□ Applicable ? Not applicable
There were no significant related transactions during the reporting period.XV. Significant Contracts and Performance
1. Custody, contracting, and leasing
(1) Custody
□ Applicable ? Not applicable
No custody was made during the reporting period.
(2) Contracting
□ Applicable ? Not applicable
No contracting was made during the reporting period.
(3) Leasing
? Applicable □ Not applicableCircumstances of leasingPlease refer to 15 "Right-of-use assets" and 28 "lease obligation" in SECTION X "FINANCIAL STATEMENT" VII "Notes to itemsof consolidated financial statements".The profit and loss brought to the company reaches more than 10% of the total profit of the company during the reporting period.
□ Applicable ? Not applicable
During the reporting period, there are no leasing items that bring profits and losses of the Company to more than 10% of the totalprofits of the Company during the reporting period.
2. Major guarantee
? Applicable □ Not applicable
Unit: RMB 10,000
External guarantee of the Company and its subsidiaries (excluding the guarantee to subsidiaries) | ||||||||||
Name of guaranteed object | Disclosure date of announcement related to the guaranteed amount | Guaranteed amount | Actual occurring date | Actual guaranteed amount | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Fulfilled or not | Whether it is guaranteed by related parties |
Supor's distributors who meet certain conditions | December 14, 2021 | 140,000.00 | July 2022 - August 2022 | 12,638.78 | General guarantee | Cash | Yes | July 2022 - February 2023 | Yes | No |
Supor's distributors who meet certain conditions | August 31, 2022 | 140,000.00 | September 2022 - April 2023 | 58,788.94 | General guarantee | Cash | Yes | September 2022 - October 2023 | Yes | No |
Supor's distributors who meet certain conditions | March 31, 2023 | 140,000.00 | May 2023 - December 2023 | 52,193.89 | General guarantee | Cash | Yes | May 2023 - June 2024 | No | No |
Total external guaranteed amount approved during the reporting period (A1) | 140,000.00 | Total actual amount of external guarantee during the reporting period (A2) | 123,621.61 | |||||||
Total external guaranteed amount approved at the end of the reporting period (A3) | 280,000.00 | Total actual external guarantee balance at the end of the reporting period (A4) | 34,391.36 | |||||||
Guarantee of the Company to subsidiaries | ||||||||||
Name of guaranteed object | Disclosure date of announcement related to the guaranteed amount | Guaranteed amount | Actual occurring date | Actual guaranteed amount | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Fulfilled or not | Whether it is guaranteed by related parties |
Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | July 2022 - December 2022 | 67,550.55 | General guarantee | None | None | July 2022 - June 2023 | Yes | No |
Wuhan Supor Cookware Co., Ltd. | April 1, 2022 | 20,000.00 | September 2022 - December 2022 | 3,315.00 | General guarantee | None | None | September 2022 - June 2023 | Yes | No |
Zhejiang Shaoxing Supor Household Products Co., | April 1, 2022 | 270,000.00 | January 2023 - April 2023 | 28,868.88 | General guarantee | None | None | January 2023 - October 2023 | Yes | No |
Ltd. | ||||||||||
Wuhan Supor Cookware Co., Ltd. | April 1, 2022 | 20,000.00 | January 2023 - April 2023 | 1,890.00 | General guarantee | None | None | January 2023 - October 2023 | Yes | No |
Zhejiang Shaoxing Supor Household Products Co., Ltd. | March 31, 2023 | 260,000.00 | May 2023 - December 2023 | 137,224.50 | General guarantee | None | None | May 2023 - June 2024 | No | No |
Wuhan Supor Cookware Co., Ltd. | March 31, 2023 | 30,000.00 | May 2023 - December 2023 | 6,355.00 | General guarantee | None | None | May 2023 - June 2024 | No | No |
Approved total guaranteed amount towards the subsidiaries during the reporting period (B1) | 400,000.00 | Total actual amount of guarantee to subsidiaries during the reporting period (B2) | 245,203.93 | |||||||
Total guaranteed amounts to subsidiaries approved at the end of the reporting period (B3) | 700,000.00 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 83,172.50 | |||||||
Guarantee of the subsidiaries to subsidiaries | ||||||||||
Name of guaranteed object | Disclosure date of announcement related to the guaranteed amount | Guaranteed amount | Actual occurring date | Actual guaranteed amount | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Fulfilled or not | Whether it is guaranteed by related parties |
Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | July 2022 - December 2022 | 11,900.00 | General guarantee | None | None | July 2022 - June 2023 | Yes | No |
Zhejiang Shaoxing Supor Household Products Co., Ltd. | April 1, 2022 | 270,000.00 | January 2023 - April 2023 | 13,580.00 | General guarantee | None | None | January 2023 - October 2023 | Yes | No |
Zhejiang Shaoxing Supor Household Products Co., Ltd. | March 31, 2023 | 260,000.00 | May 2023 - December 2023 | 16,306.50 | General guarantee | None | None | May 2023 - June 2024 | No | No |
Approved total guaranteed amount towards the subsidiaries during the reporting period (C1) | 0 | Total actual amount of guarantee to subsidiaries during the reporting period (C2) | 41,786.50 | |||||||
Total guaranteed amounts to subsidiaries approved at the end of the reporting period (C3) | 0 | Total actual guarantee balance for subsidiaries at the end of the reporting period (C4) | 16,306.50 | |||||||
Total guaranteed amount of the Company (namely the total of the first three items) | ||||||||||
Total approved guaranteed amount during the reporting | 540,000.00 | Total guaranteed actual amount during the reporting period | 410,612.04 |
period (A1+B1+C1) | (A2+B2+C2) | ||
Total approved guaranteed amount at the end of the reporting period (A3+B3+C3) | 980,000.00 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 133,870.36 |
Proportion of the total amount of actual guarantee (i.e A4+B4+C4) to the net assets of the Company | 21.10% | ||
Including: | |||
Total guaranteed amount towards shareholders, actual controllers and related parties (D) | 0 | ||
Balance of debt guarantee directly or indirectly provided to the guaranteed object with an asset-liability ratio exceeding 70% (E) | 99,479.00 | ||
Amount of the total guarantee exceeding 50% of the net assets (F) | 0 | ||
Total amount of the above three guarantees (D+E+F) | 99,479.00 | ||
Description of the guarantee liability occurred during the reporting period or there is evidence that it is possible to bear joint and several liability for settlement for the unexpired guarantee contract (if any) | Not applicable | ||
Descriptions for external guarantee provided against the established procedures (if any) | Not applicable |
Note: The 19
th
Session of the Seventh Board of Directors and the Annual General Meeting of Shareholders for 2022 Fiscal Year of theCompany reviewed and adopted the Proposal on Guarantee for Wholly-owned Subsidiaries and Mutual Guarantee among Wholly-owned Subsidiaries, and agreed that the Company and its wholly-owned subsidiaries would provide guarantees up to RMB 4 billionfor the wholly-owned subsidiaries in the year of 2023. Among them, the guaranteed amount for companies with 70% (inclusive) asset-liability ratio or over is RMB 3 billion, and RMB 1 billion for companies with a asset-liability ratio below 70%.Specific description for using the composite guarantee situationNone
3. Entrusting others for cash asset management
(1) Entrustment for financial management
? Applicable □ Not applicableOverview of entrusted financing during the reporting period
Unit: RMB 10,000
Specific type | Source of fund for entrusted financing | Amount incurred of entrusted financing | Undue balance | Overdue amount unclaimed | The amount of impairment accrued from overdue financial investment products |
Bank financial products | Self-owned capital | 43,000 | 30,000 | 0 | 0 |
Financial products of securities trader | Self-owned capital | 5,000 | 5,000 | 0 | 0 |
Total | 48,000 | 35,000 | 0 | 0 |
Note: The short-term financial products purchased by the Company in 2023 can be found in the Announcement of Short-term InvestmentUsing Excessive Cash (Announcement No. 2023-022) and the Announcement of Progress of Using Excessive Cash to PurchaseFinancial Products (Announcement No. 2023-006, 2023-054 and 2023-075) on http://www.cninfo.com.cn.Specific situation of high-risk entrusted finance with significant single amount, low security and poor liquidity
□ Applicable ? Not applicable
Circumstances in which principal of entrusted financing may not be recovered or which may result in decrease in value:
□ Applicable ? Not applicable
(2) Entrustment for loan
□ Applicable ? Not applicable
No entrustment for loan was made during the reporting period.
4. Other significant contracts
□ Applicable ? Not applicable
There were no other significant contracts involved in the Company during the reporting period.XVI. Instructions for other important matters
□ Applicable ? Not applicable
The Company has no other important matters to be explained during the reporting period.XVII. Important matters of subsidiaries
□ Applicable ? Not applicable
SECTION VII CHANGES IN SHARE CAPITAL AND
PARTICULARS ABOUT SHAREHOLDERSI. Changes of shares
1. Changes of shares
Unit: share
Before change | Increase/decrease in the period (+, -) | After change | |||||||
Share number | Proportion | New shares | Shares bonus | Converted capital | Others | Subtotal | Share number | Proportion | |
I. Restricted shares | 3,110,073 | 0.38% | -283,538 | -283,538 | 2,826,535 | 0.35% | |||
1. Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
2. Stated-owned legal person shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
3. Other domestic shareholdings | 3,110,073 | 0.38% | -283,538 | -283,538 | 2,826,535 | 0.35% | |||
Including: Shares held by domestic legal entities | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Shares held by domestic natural persons | 3,110,073 | 0.38% | -283,538 | -283,538 | 2,826,535 | 0.35% | |||
4. Shares held by foreign capitals | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Including: Shares held by foreign legal entities | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
Shares held by foreign natural persons | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
II. Non-restricted Shares | 805,544,403 | 99.62% | -1,662,281 | -1,662,281 | 803,882,122 | 99.65% | |||
1. RMB common share | 805,544,403 | 99.62% | -1,662,281 | -1,662,281 | 803,882,122 | 99.65% | |||
2. Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
3. Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
4. Others | 0 | 0.00% | 0 | 0 | 0 | 0.00% | |||
III. Total shares | 808,654,476 | 100.00% | -1,945,819 | -1,945,819 | 806,708,657 | 100.00% |
Reasons for the change of shares? Applicable □ Not applicable
1. Top management of the Company unlocked 25% of the shares registered under their names on the last transaction date of the previousyear.
2. On February 24, 2023, a total of 79,000 shares of restricted stock of postponed portion of the 2022 Restricted Stock Incentive Planwere transferred to 2 incentive objects.
3. On April 10, 2023, the Company cancelled a total of 1,870,069 repurchased public shares. Upon the cancellation, the Company'stotal share capital decreased from 808,654,476 to 806,784,407 shares.
4. On June 29, 2023, totally 75,750 shares of restricted stock that have been granted to resigned incentive objects but have not beenunlocked from restriction in 2021 and 2022 Restricted Stock Incentive Plans were repurchased and cancelled by the Company. Uponthe repurchase and cancellation, the Company's total share capital decreased from 806,784,407 shares to 806,708,657 shares.
5. On November 17, 2023, the shares held by Mr. Su Ming-Jui, former General Manager of the Company that were originally lockeddue to resignation were unlocked fully.Approval of change in share? Applicable □ Not applicable
1. On January 31, 2023, the Proposal on Grant of Postponed Portion of Restricted Stock to Incentive Objects was reviewed and adoptedat the 18
th
Session of the Seventh Board of Directors and the 17
th
Session of the Seventh Board of Supervisors, the Company agreed togrant a total of 79,000 shares of postponed portion of restricted stocks to two incentive objects. The grant date was February 1, 2023.After confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, the postponed portion ofrestricted stocks in the Company's 2022 Restricted Stock Incentive Plan were transferred and registered under the name of two incentiveobjects on February 24, 2023.
2. On March 29, 2023, the Proposal on Terminating the Public Shares Repurchase Plan was reviewed and adopted at the 19
thSessionof the Seventh Board of Directors and the 18
thSession of the Seventh Board of Supervisors of the Company, the Company plans tocancel 1,870,069 shares held in the Company’s special stock repurchase account to reduce registered capital as authorized by theAnnual General Meeting of Shareholders for 2021 Fiscal Year. After confirmed by Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited, the Company completed the cancellation of the above shares on April 10, 2023.
3. On August 30, 2022 and on March 29, 2023, the Proposal on Repurchasing and Canceling a Part of Restricted Stock was reviewedand adopted respectively at the 14
th
Session of the Seventh Board of Directors and the 13
thSession of the Seventh Board of Supervisorsand the 19
th Session of the Seventh Board of Directors and the 18
th
Session of the Seventh Board of Supervisors. For the disqualificationof 18 incentive objects due to their resignation, the Company has decided to repurchase and cancel 75,750 shares of restricted stock atthe price of RMB 1 per share. The above matter of repurchase and cancellation of restricted stocks has been deliberated and approvedat the Annual General Meeting of Shareholders for 2022 Fiscal Year held on April 25, 2023. The Company has repurchased andcanceled 75,750 shares of restricted stock at the price of RMB 1 per share and paid totally RMB 75,750 to the above resigned incentiveobjects. After confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, the Companycompleted the above matter of repurchase and cancellation of restricted stocks on June 29, 2023.Transfer of shares changed? Applicable □ Not applicableAfter confirmed by Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, totally 79,000 shares ofpostponed portion of restricted stocks under the Company's 2022 Restricted Stock Incentive Plan were transferred and registered underthe name of two incentive objects on February 24, 2023.Influence of shares change on basic earnings per share and diluted earnings per share in latest year and period, net assets per shareowned by the Company's ordinary shareholder and other financial indicators.? Applicable □ Not applicable
There are 1,870,069 public shares repurchased and cancelled and 75,750 restricted stocks repurchased and cancelled in the period intotal, which creates a minor impact on the earnings per share and dilution of earnings per share, and creates no impact on other financialindicators such as the net asset per share attributable to common share shareholders of the Company.The other contents the company thinks fit to disclose or the securities regulatory authority requires to disclose
□ Applicable ? Not applicable
2. Changes of restricted shares
? Applicable □ Not applicable
Unit: share
Name | Restricted outstanding stocks at the beginning of the year | Restricted outstanding stocks increased in current period | Restricted outstanding stocks released in current period | Restricted outstanding stocks at the end of the year | Restriction reason | Date of unlocking restriction |
Su Xianze | 364,602 | 0 | 91,151 | 273,451 | Locked stocks of top management | Unlock 25% of the shares registered under their names on the last transaction date of the last year. |
Xu Bo | 130,303 | 0 | 43,826 | 86,477 | Locked stocks of top management | Unlock 25% of the shares registered under their names on the last transaction date of the last year. |
Ye Jide | 39,143 | 0 | 14,786 | 24,357 | Locked stocks of top management | Unlock 25% of the shares registered under their names on the last transaction date of the last year. |
Su Ming-Jui | 137,025 | 1,050 | 138,075 | 0 | Executive lock-up stocks (unlock after departure) | The shares held were completed unlocked on November 17, 2023. |
Incentive objects of 2021 Equity Incentive Plan | 1,185,500 | 0 | 74,000 | 1,111,500 | 74,000 shares of restricted stocks were repurchased and cancelled in consideration that parts of resigned incentive objects. | As of the Company's 2021 Restricted Stock Incentive Plan, 1,209,500 shares of restricted stocks were transferred to 293 incentive objects on January 27, 2022. The above restricted stocks were lifted in two portions within 24 months from the date of grant registration, and the lift ratio of both portions is 50%. The first phase was unlocked, listed and circulated on February 2, 2024; The second phase is expected to start after January 27, 2025. |
Incentive objects of 2022 Equity Incentive Plan | 1,253,500 | 79,000 | 1,750 | 1,330,750 | 1,750 shares of restricted stocks were repurchased and cancelled in consideration that parts of resigned incentive objects. | 1,253,500 restricted stocks of the Company's 2022 Restricted Stock Incentive Plan was transferred to 288 incentive objects on November 10, 2022, and the suspended grant part was transferred to 2 incentive objects on February 24, 2023. The above restricted stocks were lifted in two portions within 24 months from the date of grant registration, and the lift ratio of both portions is 50%. The first portion is expected to be unlocked after November 10, 2024, and the first portion of the suspended grant part is expected to be lifted after February 24, 2025; The second portion is expected to be unlocked after November 10, |
2025, and the second portion of the suspended grant part is expected to be unlocked after February 24, 2026. | ||||||
Total | 3,110,073 | 80,050 | 363,588 | 2,826,535 | -- | -- |
II. Security Offering and Listing Information
1. Security offering (excluding preferred share) during the reporting period
□ Applicable ? Not applicable
2. Total shares of the Company, change of shareholder structure, and changes of the Company's assets andliabilities structure
? Applicable □ Not applicableDuring the reporting period, the Company cancelled 1,870,069 public shares repurchased, and 75,750 restricted stocks granted toresigned incentive objects under the 2021 Restricted Stock Incentive Plan and 2022 Restricted Stock Incentive Plan but not lifted forsales, which in combination are 1,945,819 shares in total. Upon the cancellation, the Company's total share capital decreased from808,654,476 shares to 806,708,657 shares.
3. Staff shares
□ Applicable ? Not applicable
III. Shareholders and the Actual Controller
1. Number of shareholders of the Company and share-holding conditions
Unit: share
Total number of common shareholders at the end of the reporting period | 12,314 | Number of common shareholders at the end of last month before the disclosure date of the annual report | 14,111 | Total number of preferred shareholder whose voting right is recovered at the end of reporting period (if any) (refer to Note 8) | 0 | Total number of preferred shareholders with restored voting right at the end of last month before the disclosure date of the annual report (if any) (see Note 8) | 0 | |
Shareholding of shareholders holding more than 5% shares or top 10 shareholders (excluding shares lent out through securities financing) | ||||||||
Name | Nature | Shareholding ratio | Number of shares held at the end of the reporting period | Increase/decrease during the reporting period | Number of restricted shares | Number of non-restricted shares | Pledge, marking or freezing | |
Status of share | Share number | |||||||
SEB INTERNATIONALE S.A.S | Foreign legal entity | 82.64% | 666,681,904 | 0 | 0 | 666,681,904 | Not applicable | 0 |
Hong Kong Securities Clearing Company Ltd. | Foreign legal entity | 8.52% | 68,728,932 | -4,752,531 | 0 | 68,728,932 | Not applicable | 0 |
Ningbo Bank-Zhongtai Xingyuan Value-selected Flexible Complex Securities Investment Funds | Others | 0.86% | 6,913,640 | -2,687,919 | 0 | 6,913,640 | Not applicable | 0 | |
China Merchants Bank-Zhongtai Yuheng Value-selected Flexible Complex Securities Investment Funds | Others | 0.30% | 2,390,948 | -579,165 | 0 | 2,390,948 | Not applicable | 0 | |
BNP Paribas-Own Funds | Foreign legal entity | 0.23% | 1,885,220 | -264,150 | 0 | 1,885,220 | Not applicable | 0 | |
Industrial Bank-Zhongtai Xingwei Value-selected Complex Securities Investment Funds | Others | 0.20% | 1,602,727 | -300,700 | 0 | 1,602,727 | Not applicable | 0 | |
China Construction Bank-Zhongtai Yuanhe Value-selected Complex Securities Investment Funds | Others | 0.20% | 1,577,810 | 1,577,810 | 0 | 1,577,810 | Not applicable | 0 | |
ICBC-Rongtong Fund Power Pionner Complex Securities Investment Funds | Others | 0.15% | 1,217,603 | 1,217,603 | 0 | 1,217,603 | Not applicable | 0 | |
ABC- CSI 500 Index Traded Securities Investment Funds | Others | 0.12% | 928,121 | 928,121 | 0 | 928,121 | Not applicable | 0 | |
Industrial Bank-Xingquan Trend Investment Complex Securities Investment Funds | Others | 0.11% | 880,070 | -1,319,786 | 0 | 880,070 | Not applicable | 0 | |
Strategic investor or general corporate investor who becomes top 10 shareholder as a result of rights issue (if any) (see Note 3) | None | ||||||||
Explanation on the above-mentioned shareholder relationships or concerted actions | Ningbo Bank-Zhongtai Xingyuan Value-selected Flexible Complex Securities Investment Funds, China Merchants Bank-Zhongtai Yuheng Value-selected Flexible Complex Securities Investment Funds, Industrial Bank-Zhongtai Xingwei Value-selected Complex Securities Investment Funds, and China Construction Bank-Zhongtai Yuanhe Value-selected Complex Securities Investment Funds belong to Zhongtai Fund. It is unknown whether other shareholders are associated with each other, and whether they are persons acting in concert as stipulated in the Measures for the Administration of the Acquisition of Listed Companies. | ||||||||
Explanation on the above shareholders on entrusting/entrusted voting rights and abstaining from voting rights | None | ||||||||
Special instructions on the existence of repurchase special accounts of the top 10 shareholders (if any) (see Note 10) | At the end of the reporting period, the Company held a total of 9,817,500 shares in the Company's special stock repurchase account. | ||||||||
Shareholdings of top 10 shareholders holding non-restricted shares | |||||||||
Name | Number of non-restricted outstanding shares held at the end of the reporting period | Type of share | |||||||
Type of share | Share number | ||||||||
SEB INTERNATIONALE S.A.S | 666,681,904 | RMB common shares | 666,681,904 |
Hong Kong Securities Clearing Company Ltd. | 68,728,932 | RMB common shares | 68,728,932 |
Ningbo Bank-Zhongtai Xingyuan Value-selected Flexible Complex Securities Investment Funds | 6,913,640 | RMB common shares | 6,913,640 |
China Merchants Bank-Zhongtai Yuheng Value-selected Flexible Complex Securities Investment Funds | 2,390,948 | RMB common shares | 2,390,948 |
BNP Paribas-Own Funds | 1,885,220 | RMB common shares | 1,885,220 |
Industrial Bank-Zhongtai Xingwei Value-selected Complex Securities Investment Funds | 1,602,727 | RMB common shares | 1,602,727 |
China Construction Bank-Zhongtai Yuanhe Value-selected Complex Securities Investment Funds | 1,577,810 | RMB common shares | 1,577,810 |
ICBC-Rongtong Fund Power Pionner Complex Securities Investment Funds | 1,217,603 | RMB common shares | 1,217,603 |
ABC- CSI 500 Index Traded Securities Investment Funds | 928,121 | RMB common shares | 928,121 |
Industrial Bank-Xingquan Trend Investment Complex Securities Investment Funds | 880,070 | RMB common shares | 880,070 |
Explanation on connected relationship or concerted parties among the top 10 shareholders holding non-restricted outstanding shares, and between the top 10 shareholders holding non-restricted outstanding shares and top 10 shareholders | Same as above | ||
Information on top 10 common shareholders involved in securities margin trading business (if any) (see Note 4) | None |
Top 10 shareholders' involvement in shares lent out through securities financing
□ Applicable ? Not applicable
Changes of top 10 shareholders compared with that in the last period? Applicable □ Not applicable
Unit: share
Changes of top 10 shareholders compared with that at the end of the last period | |||||
Name of shareholder (full name) | New increase/withdrawal in the reporting period | Number of unrecovered shares let out through securities financing at the end of the period | Number of shares held by shareholders through general accounts and credit accounts, and unrecovered shares lent out through securities financing | ||
Total quantity | Proportion to total share capital | Total quantity | Proportion to total share capital | ||
Fidelity Mutual Fund & Investment Management - Clients' Capital | Withdraw | 0 | 0.00% | 0 | 0.00% |
BARCLAYS BANK PLC | Withdraw | 0 | 0.00% | 0 | 0.00% |
Yongan Guofu Asset Management-Yongan Guofu-Yongfu No. 19 Complex Investment Privite Funds | Withdraw | 0 | 0.00% | 0 | 0.00% |
China Construction Bank-Zhongtai Yuanhe Value-selected Complex Securities Investment Funds | New | 0 | 0.00% | 0 | 0.00% |
ICBC-Rongtong Fund Power Pionner Complex Securities Investment Funds | New | 0 | 0.00% | 0 | 0.00% |
ABC- CSI 500 Index Traded Securities Investment Funds | New | 0 | 0.00% | 0 | 0.00% |
Did the top 10 common shareholders and the top 10 common shareholders holding non-restricted shares conduct the agreed repurchasetransaction during the reporting period?
□ Yes ? No
The top 10 common shareholders and the top 10 common shareholders holding non-restricted shares did not conduct the agreedrepurchase transaction during the reporting period.
2. Controlling shareholder
Property of controlling shareholder: foreign-controlled shareholdingType of controlling shareholder: legal entity
Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Organization code | Main business operation |
SEB INTERNATIONALE S.A.S | Thierry de LA TOUR D'ARTAISE | December 26, 1978 | None | Financial participation for all kinds of French and overseas enterprises, i.e., purchasing and subscribing share capital, bond, share and interests, securities and negotiable securities, transfer of such securities, participation in all financial activities related to the aforesaid financial participation, purchasing, manufacturing and sales of all kinds of household devices for the purpose of marketing and involvement in related service; all activities for helping realize the Company's operation either directly or indirectly, particularly the activities in personal estate, real estate, finance, commerce and industrial field. |
Shareholding of other overseas listed companies by the Company's controlling shareholder during the reporting period | None |
Change of controlling shareholder during the reporting period
□ Applicable ? Not applicable
No change of controlling shareholder occurred during the reporting period.
3. Actual controller and persons acting in concert
Nature of actual controller: other foreign organizationType of actual controller: legal entity
Name of the actual controller | Legal representative/person in charge | Date of establishment | Organization code | Main business operation |
SEB S.A. | Thierry de LA TOUR D'ARTAISE | December 28, 1973 | None | Holding or equity participation and management for various enterprises |
Holding of other overseas listed companies by the Company's actual controller during the | None |
reporting period
Change of actual controller during the reporting period
□ Applicable ? Not applicable
No change of actual controller occurred during the reporting period.Property right and controlling relationship diagram between the Company and the actual controller
Actual controller controlling the Company by trust or other assets management types
□ Applicable ? Not applicable
4. The number of shares accumulatively pledged by the controlling shareholder or first majority shareholderof the Company and its persons acting in concert account for 80% of the total number of shares held by it orthem.
□ Applicable ? Not applicable
5. Other corporate shareholders holding more than 10% shares
□ Applicable ? Not applicable
6. Share restriction reduction of commitment subjects such as controlling shareholder, actual controller andthe restructuring party
□ Applicable ? Not applicable
IV. Specific Implementation of Share Repurchase during the Reporting PeriodProgress in the implementation of share repurchase? Applicable □ Not applicable
Plan disclosure time | Number of shares to be repurchased (shares) | Proportion to total share capital | Proposed amount of repurchase (RMB 10,000) | Proposed repurchase period | Repurchase purpose | Number of shares already repurchased (shares) | The proportion of the number of shares repurchased to the underlying shares involved in the equity incentive plan (if any) |
March 31, 2023 | 8,067,087 - 16,134,174 shares | 1%-2% | RMB 491,527,600 - 983,055,200 | Expired on April 25, 2024 | Write-off and decrease of the registered capital and the implementation of equity incentives | 8,150,000 |
Progress in the reduction of shareholding of repurchased shares through auction
□ Applicable ? Not applicable
SECTION VIII INFORMATION ON PREFERRED SHARE
□ Applicable ? Not applicable
No preferred share existed during the reporting period.
SECTION IX BONDS
□ Applicable ? Not applicable
SECTION X FINANCIAL STATEMENT
I. Audit report
Type of audit opinion | Standard opinions with no reservation |
Date of signature of audit report | March 29, 2024 |
Name of audit organization | KPMG Huazhen LLP (Special General Partnership) |
Audit report document No. | KPMG Huazhen Shenzi No. 2404032 |
Names of CPAs | Huang Feng, Jin Yang |
Main Text of Audit ReportAll shareholders of Zhejiang Supor Co., Ltd.,
I. OpinionWe audited the attached financial statements of Zhejiang Supor Co., Ltd (hereinafter referred to as "Supor"), including theconsolidated and parent company balance sheet as of December 31, 2023, and the consolidated and parent company profit statement,consolidated and parent company cash flow statement, consolidated and parent company statement of changes in shareholders' equitiesand notes to relevant financial statements in 2022.We think that the attached financial statements have been prepared in accordance with the provisions of the Accounting Standardsfor Business Enterprises issued by the Ministry of Finance of the People's Republic of China (hereinafter referred to as "AccountingStandards for Business Enterprises") in all major aspects, and fairly reflect Supor's consolidated and parent company financial conditionas of December 31, 2023, as well as the consolidated and parent company operating results and cash flows in 2023.II. Basis of Forming Audit OpinionsWe implemented our audit work strictly according to the stipulations of Auditing Standard for Chinese Certified PublicAccountants (hereinafter referred to as "Auditing Standard"). The content of "Responsibility of CPA for financial statement audit" inthe Audit Report further describes our responsibility under these standards. According to the Codes of Professional Ethics for CertifiedPublic Accountants in China, we are independent of Supor, and we have fulfilled the other responsibilities on the aspects of professionalethics. We believe the audit evidences acquired by us are sufficient and appropriate, and provide a basis for expressing our auditopinions.III. Key audit mattersThe key audit items are from our professional judgment; from our perspective, the key audit items are most important to thefinancial statement audit in the current period. The key audit items will be audited under the background that the financial statementwill be wholly audited to form audit opinions; we do not express independent opinions on these items.Revenue recognition
Please refer to the accounting policies described in Note 27 to "V. Important Accounting Policies and Estimates" and Note 37 to "VII. Notes to items of consolidated financial statements" (Notes to the financial statements) | |
Key Audit Matters | Countermeasures |
Supor and its subsidiaries (hereinafter referred to as "Supor") are mainly engaged in the R&D, production and distribution of kitchen utensils, stainless steel products, daily hardware, small domestic appliances and cookware; its products are cookware and small domestic appliances. In 2023, Supor's operating income reached RMB 21,303,948,642.66, of which domestic sales revenue was RMB 15,107,615,309.80 and export sales revenue was RMB 6,196,333,332.86?. Supor recognizes the revenue when the control right of relevant commodity is transferred to the customer. Supor assesses the contract and business arrangement of the customer, and recognizes the commodity sales revenue after such commodity has left Supor's own warehouse or its specified warehouse, or such commodity has been delivered to the customer with the acceptance receipt issued, or such commodity has been delivered on board to the sea transport carrier with the customs declaration for export and bill of lading obtained. As revenue is a KPI, and Supor has announced the Restricted Stock Incentive Plan in 2021 and 2022, Restricted Stock Incentive Plan and Performance Incentive Fund Plan in 2023 with performance appraisal target as a premise for lifting the sales limitation, there is the risk that the management manipulates the revenue for realizing the performance target. Therefore, we include the conformation and recognition of Supor's revenue as key auditing items. | The audit procedures related to revenue recognition include the following: ? Understand and evaluate the design and operation effectiveness of key internal control related to the revenue recognition made by the management; ? Select sales contracts, check major terms governing the transfer of commodity control right, and review if the accounting policies for Supor revenue recognition is in conformity with the requirements in Accounting Standards for Business Enterprises; Check if there are abnormal trading terms and conditions that indicate potential undisclosed relations or transactions with related parties; ? Use data analysis tools on Supor's transaction information to identify those with abnormal revenues and check if there are any potential undisclosed relations or major transactions with related parties; ? Select major third-party customers and use enterprise information query tool on their background information to identify if they have any relation with Supor; ? Select transactions of which the revenues are recorded in the year, and refer to supporting documents such as the orders, invoices, packing lists, receipts of acceptance, customs clearances for export and bills of lading to check if the recognition of corresponding revenues is done according to Supor accounting policies for revenue recognition; ? Based on audit sampling, carry out the external confirmation procedure for the balance of accounts receivable of relevant customers on the balance sheet date and the amount of sales transactions in the current year; ? Select transactions of which the revenue is accrued around the balance sheet date, and refer to supporting documents such as the delivery notices, bills of lading or receipts of the goods to check if the revenue is included in the right accounting period; ? Check whether there are sales returns following the balance sheet date, and check the relevant supporting documents (if any) for significant sales returns, so as to evaluate whether the revenue is recorded in the appropriate accounting period; and Select revenue-related entries in the current year that meet specific risk criteria, inquire the management about the reasons for making these entries, and review relevant supporting documents. |
IV. Other information
The management of Supor is responsible for other information. Other information includes the information covered by the 2023Supor Annual Report, but excludes the financial statement and our audit report.Our audit opinions on financial statement do not cover other information, and we do not express any authentication conclusionson other information.Integrated with our audit on financial statement, our responsibility is to read other information. In this process, we considerwhether the other information is significantly different from the information we will acquire from our audit or whether the otherinformation has significant error.Based on the work we have already executed, if we confirm the other information has significant error, we should report the fact.On this aspect, we do not need to report any items.V. Responsibilities of Management and Governance on Financial Statement
The management of Supor (hereinafter referred to as the "management") is responsible for preparing financial statement accordingto the stipulations of Accounting Standards for Business Enterprises to enable fair presentation, and designing, executing andmaintaining the required internal control to keep the financial statement free of material misstatement caused by fraudulent practice orerror.When preparing the financial statement, the management is responsible for evaluating the continuing operation ability of Supor,disclosing the items related to continuing operation (if any), and using going-concern assumption. Unless otherwise that Supor plansto liquidate, terminates its operation or has no other realistic choice.The governance is responsible for supervising the financial statement process of Supor.VI. Responsibility of CPA for Financial Statement AuditOur objective is to acquire rational guarantee for keeping the financial statement free of material misstatement caused byfraudulent practice or error and providing the audit report containing audit opinions. The rational guarantee is a high-level guarantee,but it cannot guarantee that a materials misstatement can be found if it exists when we audit according to the auditing standard. Themisstatement may be caused by fraudulent practice or error. If a single or summarized rational expectation on misstatement may causecertain influence when financial statement user makes economic decision in accordance with the financial statement, the misstatementwill be deemed as "significant".In the process of our audit according to the auditing standards, we used our professional judgment and retained our professionalskepticism. Meanwhile, we executed the following work:
(1)Identify and evaluate material misstatement risk of financial statement caused by fraudulent practice or error, design andimplement audit procedures to cope with these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing auditopinions. A fraudulent practice may involve in collusion, counterfeit, deliberate omission, false statement or may be above the internalcontrol, so the risk that material misstatement caused by fraudulent practice may not be found is higher than the risk that materialmisstatement caused by error may not be found.
(2) Learn internal control related to the audit for the purpose of designing proper audit procedures.
(3) Evaluate the appropriateness of the accounting policy selected by management and the rationality of the accounting estimateand related disclosure made by the management.
(4) Make conclusion for the appropriateness of the continuing operation assumption used by management. Meanwhile, makeconclusions for the one whether there is significant uncertainty in the issue or item which may result in substantive doubt on thecontinuing operation ability of Supor in accordance with the acquired audit evidences. If our conclusion thinks that there is significantuncertainty, the auditing standard requires us to remind financial statement user in our audit report of paying attention to the relateddisclosure in the financial statement. If the disclosure is not sufficient, we should present modified audit report. Our conclusion is basedon the information that is available by the audit report date. However future issue or circumstance may result in discontinuing operationto Supor.
(5) Evaluate the overall presentation (including disclosure), structure and contents of financial statement, and evaluate whetherfinancial statement presents related transactions and items fairly.
(6) Acquire sufficient and appropriate audit evidences for financial information of entity activity or business activity of Supor,and express opinions on audit financial statement. We are responsible for guiding, supervising and executing the audit of the Group,and bear full responsibility for audit opinions.
We communicated audit scope, time schedule and significant audit finding and other issues with governance, including theinternal control defect that is worthy of noting in the audit process.
We have provided a declaration to the governance that we have abided by the professional ethics requirements related toindependency, and have communicated with the governance all relationships and other issues those are thought to affect ourindependency, as well as the related precautionary measures (if applicable).
In the issue we communicated with the governance, we determined which issues are most important to the financial statementaudit in the current period, so which constitutes the key audit items. We described these items in our audit report, unless otherwise
these items are prohibited to openly disclose by law and regulation, or under few circumstances, if according to an rational expectation,when negative consequence of communicating an issue in the audit report may exceed its benefit on the aspect of public benefit, weconfirm that we will not communicate the issue in our audit report.
KPMG Huazhen LLP (Special General Partnership) Chinese CPA:
(Project partner): ________________
Huang Feng
Beijing, China Chinese CPA: ________________
Jin Yang
Date: March 29, 2024
II. Financial Statements
Unit of statement in notes to financial statement: RMB
1. Consolidated balance sheet
Compiled by: Zhejiang Supor Co., Ltd.
December 31, 2023
Unit: RMB
Item | December 31, 2023 | January 1, 2023 |
Current assets: | ||
Monetary capital | 3,548,277,442.44 | 3,563,140,907.75 |
Settlement reserve | ||
Loans to other banks | ||
Transactional financial assets | 351,137,787.54 | 431,382,527.79 |
Derivative financial assets | ||
Notes receivable | 15,311,935.98 | 27,325,952.95 |
Accounts receivable | 2,858,247,356.03 | 1,926,518,118.38 |
Receivables financing | 363,532,765.35 | 235,957,044.34 |
Advance payment | 193,169,455.51 | 339,609,547.02 |
Premiums receivable | ||
Reinsurance accounts receivable | ||
Reinsurance contract reserve receivable | ||
Other receivables | 16,126,721.38 | 16,373,697.26 |
Including: interest receivable | ||
Dividend receivable | ||
Reverse-REPO financial assets | ||
Inventories | 2,262,683,387.31 | 2,494,922,856.42 |
Contract assets | ||
Held-for-sale assets | ||
Non-current assets due within one year | 285,783,958.92 | 32,157,534.25 |
Other current assets | 142,423,696.22 | 450,986,016.76 |
Total current assets | 10,036,694,506.68 | 9,518,374,202.92 |
Non-current assets: | ||
Loans and advances granted | ||
Debt investment | ||
Other debt investment | 665,522,383.56 | 1,024,794,890.43 |
Long-term receivables | ||
Long-term equity investment | 61,678,984.35 | 62,196,139.53 |
Other equity instrument investments | ||
Other non-current financial assets | ||
Investment properties | ||
Fixed assets | 1,243,210,689.64 | 1,303,075,391.03 |
Construction in progress | 26,862,380.61 | 12,005,654.73 |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use assets | 223,503,573.14 | 190,718,962.82 |
Intangible assets | 428,978,842.72 | 440,017,733.16 |
Development expenditures | ||
Goodwill | ||
Long-term unamortized expenses | ||
Deferred income tax assets | 420,252,246.30 | 401,472,928.85 |
Other non-current assets | ||
Total non-current assets | 3,070,009,100.32 | 3,434,281,700.55 |
Total assets | 13,106,703,607.00 | 12,952,655,903.47 |
Current liabilities: | ||
Short-term borrowings | 199,741,167.36 | |
Central bank loan | ||
Loans from other banks | ||
Transactional financial liabilities | ||
Derivative financial liabilities | ||
Notes payable | 1,235,000,000.00 | 1,057,611,900.00 |
Accounts payable | 3,205,607,853.18 | 2,635,521,548.19 |
Advance receipt | ||
Contract liabilities | 862,706,076.18 | 1,153,932,879.53 |
Proceeds from sale of repurchase financial assets | ||
Deposit taken and interbank deposit | ||
Proceeds from security transaction agency | ||
Proceeds from security underwriting agency | ||
Employee remuneration payable | 332,138,705.28 | 289,075,428.50 |
Taxes payable | 346,462,733.51 | 204,608,713.27 |
Other payables | 147,617,550.27 | 137,729,222.63 |
Including: interest payable | ||
Dividend payable | ||
Handling fee and commission payable | ||
Reinsurance accounts payable | ||
Held-for-sale liabilities | ||
Non-current liabilities due within one year | 47,568,255.43 | 41,924,940.24 |
Other current liabilities | 147,652,214.40 | 194,699,612.98 |
Total current liabilities | 6,524,494,555.61 | 5,715,104,245.34 |
Non-current liabilities: | ||
Insurance contract reserve | ||
Long-term borrowings | ||
Bonds payable | ||
Including: Preferred share | ||
Perpetual bond | ||
Lease obligation | 177,281,125.36 | 150,779,916.58 |
Long-term payables | ||
Long-term employee remuneration payable | 15,836,573.16 | 1,441,111.55 |
Estimated liabilities | 7,258,295.50 | 12,640,441.72 |
Deferred incomes | ||
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 200,375,994.02 | 164,861,469.85 |
Total liabilities | 6,724,870,549.63 | 5,879,965,715.19 |
Owners' equities: | ||
Share capital | 806,708,657.00 | 808,654,476.00 |
Other equity instruments | ||
Including: Preferred share | ||
Perpetual bond | ||
Capital reserves | 173,110,627.02 | 125,368,989.44 |
Minus: Treasury share | 488,057,333.76 | 99,724,823.49 |
Other comprehensive incomes | -19,176,454.59 | -20,454,823.26 |
Special reserve | ||
Surplus reserve | 355,939,901.82 | 356,924,811.32 |
General risk reserve | ||
Undistributed profit | 5,516,807,622.62 | 5,865,316,233.53 |
Total owners' equities belonging to parent company | 6,345,333,020.11 | 7,036,084,863.54 |
Minority shareholders' equities | 36,500,037.26 | 36,605,324.74 |
Total owners' equities | 6,381,833,057.37 | 7,072,690,188.28 |
Total liabilities and owners' equities | 13,106,703,607.00 | 12,952,655,903.47 |
Legal representative: Thierry de LA TOUR D' ARTAISE Person in charge of accounting: Xu Bo Person in charge of accountingdepartment: Xu Bo
2. Balance sheet of parent company
Unit: RMB
Item | December 31, 2023 | January 1, 2023 |
Current assets: | ||
Monetary capital | 1,992,971,901.60 | 1,484,137,518.26 |
Transactional financial assets | 250,544,611.01 | 200,131,817.00 |
Derivative financial assets | ||
Notes receivable | 400,000.00 | 1,342,003.33 |
Accounts receivable | 624,130,389.56 | 374,598,742.75 |
Receivables financing | 4,800,000.00 | |
Advance payment | 16,615,946.99 | 46,224,404.38 |
Other receivables | 674,127,502.50 | 1,174,381,191.82 |
Including: interest receivable | ||
Dividend receivable | ||
Inventories | 145,018,340.32 | 164,679,339.53 |
Contract assets | ||
Held-for-sale assets | ||
Non-current assets due within one year | 208,315,863.02 | 32,157,534.25 |
Other current assets | 19,163,058.36 | 388,309,086.23 |
Total current assets | 3,931,287,613.36 | 3,870,761,637.55 |
Non-current assets: | ||
Debt investment | ||
Other debt investment | 201,645,863.02 | |
Long-term receivables | ||
Long-term equity investment | 2,848,631,066.61 | 2,826,017,955.55 |
Other equity instrument investments |
Other non-current financial assets | ||
Investment properties | ||
Fixed assets | 142,355,870.24 | 155,241,036.13 |
Construction in progress | 973,451.33 | |
Productive biological assets | ||
Oil and gas assets | ||
Right-of-use assets | 3,583,014.87 | 3,752,480.47 |
Intangible assets | 72,474,395.25 | 80,034,692.59 |
Development expenditures | ||
Goodwill | ||
Long-term unamortized expenses | ||
Deferred income tax assets | 25,592,220.27 | 15,974,025.22 |
Other non-current assets | ||
Total non-current assets | 3,093,610,018.57 | 3,282,666,052.98 |
Total assets | 7,024,897,631.93 | 7,153,427,690.53 |
Current liabilities: | ||
Short-term borrowings | ||
Transactional financial liabilities | ||
Derivative financial liabilities | ||
Notes payable | 33,950,000.00 | 15,650,000.00 |
Accounts payable | 211,009,320.51 | 193,807,274.54 |
Advance receipt | ||
Contract liabilities | 1,702,589.31 | 2,796,093.48 |
Employee remuneration payable | 52,532,428.56 | 41,689,539.05 |
Taxes payable | 54,783,273.55 | 23,453,381.53 |
Other payables | 1,905,723,034.41 | 1,224,151,285.03 |
Including: interest payable | ||
Dividend payable | ||
Held-for-sale liabilities | ||
Non-current liabilities due within one year | 965,476.36 | 227,345.02 |
Other current liabilities | 462,826.72 | 1,447,611.99 |
Total current liabilities | 2,261,128,949.42 | 1,503,222,530.64 |
Non-current liabilities: | ||
Long-term borrowings |
Bonds payable | ||
Including: Preferred share | ||
Perpetual bond | ||
Lease obligation | 2,369,608.01 | 2,859,701.28 |
Long-term payables | ||
Long-term employee remuneration payable | 7,212,613.48 | 166,125.04 |
Estimated liabilities | ||
Deferred incomes | ||
Deferred income tax liabilities | ||
Other non-current liabilities | ||
Total non-current liabilities | 9,582,221.49 | 3,025,826.32 |
Total liabilities | 2,270,711,170.91 | 1,506,248,356.96 |
Owners' equities: | ||
Share capital | 806,708,657.00 | 808,654,476.00 |
Other equity instruments | ||
Including: Preferred share | ||
Perpetual bond | ||
Capital reserves | 249,621,368.24 | 202,697,741.40 |
Minus: Treasury share | 488,057,333.76 | 99,724,823.49 |
Other comprehensive incomes | ||
Special reserve | ||
Surplus reserve | 403,354,328.50 | 404,339,238.00 |
Undistributed profit | 3,782,559,441.04 | 4,331,212,701.66 |
Total owners' equities | 4,754,186,461.02 | 5,647,179,333.57 |
Total liabilities and owners' equities | 7,024,897,631.93 | 7,153,427,690.53 |
3. Consolidated profit statement
Unit: RMB
Item | 2023 | 2022 |
I. Total operating income | 21,303,948,642.66 | 20,170,527,516.66 |
Including: Operating income | 21,303,948,642.66 | 20,170,527,516.66 |
Interest revenues | ||
Premium earned | ||
Revenue from handling fees and commission |
II. Total Operating Costs | 18,897,483,488.23 | 17,949,216,147.97 |
Including: Operating cost | 15,700,128,849.31 | 14,969,328,840.57 |
Interest expense | ||
Expense of handling fees and commission | ||
Surrender value | ||
Net payments for insurance claims | ||
Net amount of withdrawn reserve fund for insured liability | ||
Policy dividend expenditures | ||
Reinsurance expenses | ||
Taxes and surcharges | 142,250,651.43 | 130,693,539.41 |
Sales expenses | 2,297,847,425.74 | 2,156,297,058.63 |
Administrative expenses | 393,597,966.82 | 374,060,640.28 |
R&D expenses | 431,288,536.29 | 416,259,356.99 |
Financial expenses | -67,629,941.36 | -97,423,287.91 |
Including: interest expenses | 14,343,311.85 | 9,278,948.78 |
Interest revenues | 80,404,233.22 | 76,571,126.41 |
Plus: Other incomes | 248,917,540.31 | 236,694,812.34 |
Investment income ("-" for loss) | 48,812,244.43 | 54,047,027.80 |
Including: investment income on associated enterprise and joint venture | -529,681.40 | -3,262,848.85 |
Income from derecognition of financial assets measured by amortized cost | ||
Exchange gain ("-" for loss) | ||
Net exposure hedging gains ("-" for loss) | ||
Gains from changes in fair value ("-" for loss) | 1,137,787.54 | 1,382,527.79 |
Credit impairment loss ("-" for loss) | -26,219,380.58 | 34,519,315.22 |
Asset impairment loss ("-" for loss) | 6,271,490.06 | -11,352,717.26 |
Assets disposal income ("-" for loss) | -4,061,512.01 | -1,363,504.85 |
III. Operating profit ("-" for loss) | 2,681,323,324.18 | 2,535,238,829.73 |
Plus: Non-operating income | 15,268,837.43 | 14,435,126.69 |
Minus: non-operating expense | 11,873,706.91 | 4,464,352.44 |
IV. Total profit ("-" for total loss) | 2,684,718,454.70 | 2,545,209,603.98 |
Minus: income tax expenses | 505,298,017.49 | 479,033,164.36 |
V. Net profit ("-" for net loss) | 2,179,420,437.21 | 2,066,176,439.62 |
(I) By business continuity |
1. Net profit under continuing operation ("-" for net loss) | 2,179,420,437.21 | 2,066,176,439.62 |
2. Net profit under discontinuing operation ("-" for net loss) | ||
(II) By ownership | ||
1. Net profit belonging to the shareholders of parent company | 2,179,798,147.27 | 2,067,659,526.97 |
2. Minority shareholders' profit and loss | -377,710.06 | -1,483,087.35 |
VI. After-tax net amount of other comprehensive income | 1,550,791.25 | 20,857,374.53 |
After-tax net amount of other comprehensive income belonging to the owners of parent company | 1,278,368.67 | 21,067,718.34 |
(I) Other comprehensive incomes that can not be reclassified into profit and loss | ||
1. Remeasured amount of changes in defined benefit plan | ||
2. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
3. Changes in the fair value of other equity instrument investments | ||
4. Changes in the fair value of the Company's own credit risk | ||
5. Others | ||
(II) Other comprehensive incomes that can be reclassified into profit and loss | 1,278,368.67 | 21,067,718.34 |
1. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
2. Changes in the fair value of other debt investments | ||
3. Amount of financial assets reclassified into other comprehensive income | ||
4. Credit impairment provision for other debt investments | ||
5. Cash flow hedging reserve | ||
6. Conversion difference in foreign currency financial statement | 1,278,368.67 | 21,067,718.34 |
7. Others | ||
After-tax net amount of other comprehensive income belonging to minority shareholder | 272,422.58 | -210,343.81 |
VII. Total comprehensive income | 2,180,971,228.46 | 2,087,033,814.15 |
Total comprehensive income attributed to owners of parent company | 2,181,076,515.94 | 2,088,727,245.31 |
Total comprehensive income attributed to minority shareholders | -105,287.48 | -1,693,431.16 |
VIII. Earnings per share | ||
(I) Basic earnings per share (EPS) | 2.719 | 2.565 |
(II) Diluted earnings per share (EPS) | 2.719 | 2.564 |
If the enterprise under the same control is merged, the net profit realized by the merged party before merger was RMB 0, and the netprofit realized by the merged party during the prior period was RMB 0.Legal representative: Thierry de LA TOUR D' ARTAISE Person in charge of accounting: Xu Bo Person in charge of accountingdepartment: Xu Bo
4. Profit statement of the parent company
Unit: RMB
Item | 2023 | 2022 |
I. Operating income | 2,800,805,334.77 | 2,364,560,278.23 |
Minus: Operating cost | 2,370,968,026.25 | 1,989,102,797.37 |
Taxes and surcharges | 11,856,409.25 | 13,935,411.50 |
Sales expenses | 38,814,845.01 | 39,335,409.39 |
Administrative expenses | 142,007,126.23 | 127,077,263.72 |
R&D expenses | 8,598,131.92 | 20,695,875.79 |
Financial expenses | -51,724,651.97 | -58,101,403.25 |
Including: interest expenses | 14,377,169.62 | 11,941,995.43 |
Interest revenues | 70,180,881.22 | 56,076,101.26 |
Plus: Other incomes | 19,729,508.39 | 24,058,763.78 |
Investment income ("-" for loss) | 1,766,607,997.40 | 1,596,577,717.17 |
Including: investment income on associated enterprise and joint venture | -529,681.40 | -3,262,848.85 |
Income from derecognition of financial assets measured by amortized cost ("-" for loss) | ||
Net exposure hedging gains ("-" for loss) | ||
Gains from changes in fair value ("-" for loss) | 544,611.01 | 131,817.00 |
Credit impairment loss ("-" for loss) | -5,681,450.92 | 16,808,778.58 |
Asset impairment loss ("-" for loss) | 682,560.59 | -715,941.15 |
Assets disposal income ("-" for loss) | -33,004.39 | -40,662.89 |
II. Operating profit ("-" for loss) | 2,062,135,670.16 | 1,869,335,396.20 |
Plus: Non-operating income | 5,940,618.29 | 484,196.66 |
Minus: non-operating expense | 5,350,542.11 | 2,766,054.34 |
III. Total profit ("-" for total loss) | 2,062,725,746.34 | 1,867,053,538.52 |
Minus: income tax expenses | 83,072,248.78 | 59,409,208.43 |
IV. Net profit ("-" for net loss) | 1,979,653,497.56 | 1,807,644,330.09 |
(I) Net profit under continuing operation ("-" for net loss) | 1,979,653,497.56 | 1,807,644,330.09 |
(II) Net profit under discontinuing operation ("-" for net loss) | ||
V. After-tax net amount of other comprehensive income | ||
(I) Other comprehensive incomes that can not be reclassified into profit and loss | ||
1. Remeasured amount of changes in defined benefit plan | ||
2. Other comprehensive income that cannot be transferred to gain and loss under the equity method |
3. Changes in the fair value of other equity instrument investments | ||
4. Changes in the fair value of the Company's own credit risk | ||
5. Others | ||
(II) Other comprehensive incomes that can be reclassified into profit and loss | ||
1. Other comprehensive income that cannot be transferred to gain and loss under the equity method | ||
2. Changes in the fair value of other debt investments | ||
3. Amount of financial assets reclassified into other comprehensive income | ||
4. Credit impairment provision for other debt investments | ||
5. Cash flow hedging reserve | ||
6. Conversion difference in foreign currency financial statement | ||
7. Others | ||
VI. Total comprehensive income | 1,979,653,497.56 | 1,807,644,330.09 |
VII. Earnings per share | ||
(I) Basic earnings per share (EPS) | ||
(II) Diluted earnings per share (EPS) |
5. Consolidated cash flow statement
Unit: RMB
Item | 2023 | 2022 |
I. Cash Flows from Operating Activities: | ||
Cash received from sales of commodities or rendering of services | 21,943,107,463.51 | 23,163,412,847.57 |
Net increase of customer deposit and interbank deposit | ||
Net increase of central bank loans | ||
Net increase of loans from other financial institutions | ||
Cash received from original insurance contract premium | ||
Net cash received from reinsurance | ||
Net increase of policy-holder deposit and investment | ||
Cash receipts from interest, handling fees and commission | ||
Net increase of loans from others | ||
Net increment of repurchase capital | ||
Net cash from security transaction agency | ||
Tax refund received | 356,790,351.15 | 403,826,573.61 |
Other cash receipts related to operating activities | 267,893,712.24 | 296,671,425.19 |
Subtotal of cash inflows from operating activities | 22,567,791,526.90 | 23,863,910,846.37 |
Cash payments for purchasing commodities and receiving services | 15,769,508,361.73 | 15,899,889,917.07 |
Net increment of customer loans and advances | ||
Net increase of central bank deposit and interbank deposit | ||
Cash payment for insurance indemnities of original insurance contracts | ||
Net increase of loans to other banks | ||
Cash for interest, handling fees and commission | ||
Cash payment of policy dividend | ||
Cash paid to and for employees | 1,779,509,629.09 | 1,782,670,318.64 |
Taxes paid | 1,028,954,311.82 | 1,115,969,533.28 |
Other cash expenses related to operating activities | 1,954,909,888.06 | 1,905,425,831.54 |
Subtotal of cash outflows from operating activities | 20,532,882,190.70 | 20,703,955,600.53 |
Net cash flows from operating activities | 2,034,909,336.20 | 3,159,955,245.84 |
II. Net Cash Flows from Investing Activities: | ||
Cash received from return of investments | ||
Cash received from investment income | 75,313,420.68 | 182,101,198.03 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,626,672.37 | 5,578,762.74 |
Net cash receipts from disposal of subsidiaries and other business units | ||
Other cash receipts related to investing activities | 2,738,215,081.02 | 3,103,136,438.00 |
Subtotal of cash inflows from investing activities | 2,816,155,174.07 | 3,290,816,398.77 |
Net cash paid for the construction of fixed assets, intangible assets and other long-term assets | 137,477,524.11 | 165,432,733.39 |
Cash paid for investment | ||
Net increase of pledge loans | ||
Net cash paid for acquiring subsidiaries and other business units | ||
Other cash expenses related to investing activities | 2,923,123,711.63 | 3,597,439,490.93 |
Subtotal of cash outflows from investing activities | 3,060,601,235.74 | 3,762,872,224.32 |
Net cash flows from investing activities | -244,446,061.67 | -472,055,825.55 |
III. Net Cash Flows from Financing Activities: | ||
Cash from absorbing investments | 2,630,661.84 | |
Including: cash received by subsidiaries from minority shareholder investment | 2,630,661.84 | |
Cash received from obtaining borrowings | 198,504,388.57 | 6,000,990.92 |
Other cash receipts related to financing activities | 79,000.00 | 2,463,000.00 |
Subtotal of cash inflows from financing activities | 198,583,388.57 | 11,094,652.76 |
Cash paid for debt repayment | ||
Cash paid for distribution of dividends or profits or for payment of interest | 2,439,504,228.21 | 2,567,723,592.43 |
Including: dividends or profits paid by subsidiaries to minority shareholders | ||
Other cash payments related to financing activities | 540,741,394.47 | 208,900,848.04 |
Subtotal of cash outflows from financing activities | 2,980,245,622.68 | 2,776,624,440.47 |
Net cash flows from financing activities | -2,781,662,234.11 | -2,765,529,787.71 |
IV. Impact of Exchange Rate Changes on Cash and Cash Equivalents | 1,019,143.56 | 29,831,440.74 |
V. Net increase in cash and cash equivalents | -990,179,816.02 | -47,798,926.68 |
Plus: Balance of cash and cash equivalents at the beginning of the period | 2,395,932,752.38 | 2,443,731,679.06 |
VI. Balance of cash and cash equivalents at the end of the period | 1,405,752,936.36 | 2,395,932,752.38 |
6. Cash flow statement of parent company
Unit: RMB
Item | 2023 | 2022 |
I. Cash Flows from Operating Activities: | ||
Cash received from sales of commodities or rendering of services | 2,675,975,306.62 | 2,813,612,098.09 |
Tax refund received | 154,933,316.86 | 192,478,449.00 |
Other cash receipts related to operating activities | 70,788,457.00 | 49,326,684.43 |
Subtotal of cash inflows from operating activities | 2,901,697,080.48 | 3,055,417,231.52 |
Cash payments for purchasing commodities and receiving services | 2,448,288,210.73 | 1,997,873,868.31 |
Cash paid to and for employees | 170,100,393.05 | 179,500,705.78 |
Taxes paid | 72,211,600.02 | 82,083,795.20 |
Other cash expenses related to operating activities | 72,825,973.49 | 77,325,691.14 |
Subtotal of cash outflows from operating activities | 2,763,426,177.29 | 2,336,784,060.43 |
Net cash flows from operating activities | 138,270,903.19 | 718,633,171.09 |
II. Net Cash Flows from Investing Activities: | ||
Cash received from return of investments | ||
Cash received from investment income | 1,788,640,317.70 | 1,787,538,717.80 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 603,663.57 | 863,939.72 |
Net cash receipts from disposal of subsidiaries and other business units | 149,634,690.89 | |
Other cash receipts related to investing activities | 1,105,049,702.00 | 2,281,025,218.38 |
Subtotal of cash inflows from investing activities | 2,894,293,683.27 | 4,219,062,566.79 |
Net cash paid for the construction of fixed assets, intangible assets and other long-term assets | 23,182,198.26 | 30,951,887.39 |
Cash paid for investment | ||
Net cash paid for acquiring subsidiaries and other business units | ||
Other cash expenses related to investing activities | 1,465,412,274.03 | 3,117,694,762.51 |
Subtotal of cash outflows from investing activities | 1,488,594,472.29 | 3,148,646,649.90 |
Net cash flows from investing activities | 1,405,699,210.98 | 1,070,415,916.89 |
III. Net Cash Flows from Financing Activities: | ||
Cash from absorbing investments | ||
Cash received from obtaining borrowings | ||
Other cash receipts related to financing activities | 1,297,348,085.21 | 1,227,206,126.98 |
Subtotal of cash inflows from financing activities | 1,297,348,085.21 | 1,227,206,126.98 |
Cash paid for debt repayment | ||
Cash paid for distribution of dividends or profits or for payment of interest | 2,454,574,408.09 | 2,580,043,028.70 |
Other cash payments related to financing activities | 480,891,856.13 | 164,163,901.01 |
Subtotal of cash outflows from financing activities | 2,935,466,264.22 | 2,744,206,929.71 |
Net cash flows from financing activities | -1,638,118,179.01 | -1,517,000,802.73 |
IV. Impact of Exchange Rate Changes on Cash and Cash Equivalents | -2,235,360.05 | 10,981,710.82 |
V. Net increase in cash and cash equivalents | -96,383,424.89 | 283,029,996.07 |
Plus: Balance of cash and cash equivalents at the beginning of the period | 1,083,953,956.62 | 800,923,960.55 |
VI. Balance of cash and cash equivalents at the end of the period | 987,570,531.73 | 1,083,953,956.62 |
7. Statement of Changes in Consolidated Owners' Equities
Amount of this period
Unit: RMB
Item | 2023 | ||||||||||||||
Owners' equities belonging to parent company | Minority shareholders' equities | Total owners' equities | |||||||||||||
Share capital | Other equity instruments | Capital reserves | Minus: Treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
Preferred share | Perpetual bond | Others | |||||||||||||
I. Closing Balance of the Last Year | 808,654,476.00 | 125,368,989.44 | 99,724,823.49 | -20,454,823.26 | 356,924,811.32 | 5,865,316,233.53 | 7,036,084,863.54 | 36,605,324.74 | 7,072,690,188.28 | ||||||
Plus: cumulative changes of accounting policies | |||||||||||||||
Error correction of prior period | |||||||||||||||
Others |
II. Opening Balance of the Current Year | 808,654,476.00 | 125,368,989.44 | 99,724,823.49 | -20,454,823.26 | 356,924,811.32 | 5,865,316,233.53 | 7,036,084,863.54 | 36,605,324.74 | 7,072,690,188.28 | ||||||
III. Current Period Increase ("-" for Decrease) | -1,945,819.00 | 47,741,637.58 | 388,332,510.27 | 1,278,368.67 | -984,909.50 | -348,508,610.91 | -690,751,843.43 | -105,287.48 | -690,857,130.91 | ||||||
(I) Total of comprehensive incomes | 1,278,368.67 | 2,179,798,147.27 | 2,181,076,515.94 | -105,287.48 | 2,180,971,228.46 | ||||||||||
(II) Capital invested and reduced by the owner | -1,945,819.00 | 47,741,637.58 | -91,733,258.47 | -86,136,849.47 | -3,650,590.00 | 47,741,637.58 | 47,741,637.58 | ||||||||
1. Common shares invested by shareholders | |||||||||||||||
2. Capital invested by other equity instrument holders | |||||||||||||||
3. Amount of share-based payment recognized through owners' equities | -75,750.00 | 47,741,637.58 | -3,726,340.00 | -3,650,590.00 | 47,741,637.58 | 47,741,637.58 | |||||||||
4. Others | -1,870,069.00 | -88,006,918.47 | -86,136,849.47 | ||||||||||||
(III) Profit distribution | 85,151,939.97 | -2,524,656,168.18 | -2,439,504,228.21 | -2,439,504,228.21 | |||||||||||
1. Appropriation of surplus reserve | 85,151,939.97 | -85,151,939.97 | |||||||||||||
2. Appropriation of general risk reserve | |||||||||||||||
3. Appropriation of profit to owners | -2,439,504,228.21 | -2,439,504,228.21 | -2,439,504,228.21 | ||||||||||||
4. Others |
(IV) Internal carry-over within owners' equities | |||||||||||||||
1. Transfer of capital reserve to capital (or share capital) | |||||||||||||||
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
3. Surplus reserve to cover losses | |||||||||||||||
4. Retained earnings after carrying over amount of changes in defined benefit plan | |||||||||||||||
5. Retained earnings after carrying over other comprehensive incomes | |||||||||||||||
6. Others | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Appropriation of current period | |||||||||||||||
2. Application of current period | |||||||||||||||
(VI) Others | 480,065,768.74 | -480,065,768.74 | -480,065,768.74 | ||||||||||||
IV. Closing Balance of the Current Period | 806,708,657.00 | 173,110,627.02 | 488,057,333.76 | -19,176,454.59 | 355,939,901.82 | 5,516,807,622.62 | 6,345,333,020.11 | 36,500,037.26 | 6,381,833,057.37 |
Amount of the prior period
Unit: RMB
Item | 2022 | ||||||||||||||
Owners' equities belonging to parent company | Minority shareholders' equities | Total owners' equities | |||||||||||||
Share capital | Other equity instruments | Capital reserves | Minus: Treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
Preferred share | Perpetual bond | Others | |||||||||||||
I. Closing Balance of the Last Year | 808,678,476.00 | 122,970,340.27 | 76,159,897.25 | -41,522,541.60 | 356,924,811.32 | 6,451,748,564.12 | 7,622,639,752.86 | 35,668,094.06 | 7,658,307,846.92 | ||||||
Plus: cumulative changes of accounting policies | |||||||||||||||
Error correction of prior period | |||||||||||||||
Others | |||||||||||||||
II. Opening Balance of the Current Year | 808,678,476.00 | 122,970,340.27 | 76,159,897.25 | -41,522,541.60 | 356,924,811.32 | 6,451,748,564.12 | 7,622,639,752.86 | 35,668,094.06 | 7,658,307,846.92 | ||||||
III. Current Period Increase ("-" for Decrease) | -24,000.00 | 2,398,649.17 | 23,564,926.24 | 21,067,718.34 | -586,432,330.59 | -586,554,889.32 | 937,230.68 | -585,617,658.64 | |||||||
(I) Total of comprehensive incomes | 21,067,718.34 | 2,067,659,526.97 | 2,088,727,245.31 | -1,693,431.16 | 2,087,033,814.15 | ||||||||||
(II) Capital invested and reduced by the owner | -24,000.00 | 2,398,649.17 | -69,991,307.25 | -86,368,265.13 | -14,002,308.71 | 2,630,661.84 | -11,371,646.87 | ||||||||
1. Common shares invested by shareholders | |||||||||||||||
2. Capital invested by other equity instrument holders | |||||||||||||||
3. Amount of share-based | -24,000.00 | 2,398,649.17 | -69,991,307.25 | -86,368,265.13 | -14,002,308.71 | -14,002,308.71 |
payment recognized through owners' equities | |||||||||||||||
4. Others | 2,630,661.84 | 2,630,661.84 | |||||||||||||
(III) Profit distribution | -2,567,723,592.43 | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||||
1. Appropriation of surplus reserve | |||||||||||||||
2. Appropriation of general risk reserve | |||||||||||||||
3. Appropriation of profit to owners | -2,567,723,592.43 | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||||
4. Others | |||||||||||||||
(IV) Internal carry-over within owners' equities | |||||||||||||||
1. Transfer of capital reserve to capital (or share capital) | |||||||||||||||
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
3. Surplus reserve to cover losses | |||||||||||||||
4. Retained earnings after carrying over amount of changes in defined benefit plan | |||||||||||||||
5. Retained earnings |
after carrying over other comprehensive incomes | |||||||||||||||
6. Others | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Appropriation of current period | |||||||||||||||
2. Application of current period | |||||||||||||||
(VI) Others | 93,556,233.49 | -93,556,233.49 | -93,556,233.49 | ||||||||||||
IV. Closing Balance of the Current Period | 808,654,476.00 | 125,368,989.44 | 99,724,823.49 | -20,454,823.26 | 356,924,811.32 | 5,865,316,233.53 | 7,036,084,863.54 | 36,605,324.74 | 7,072,690,188.28 |
8. Statement of Changes in Owners' Equities of the Parent Company
Amount of this period
Unit: RMB
Item | 2023 | |||||||||||
Share capital | Other equity instruments | Capital reserves | Minus: Treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | Undistributed profit | Others | Total owners' equities | |||
Preferred share | Perpetual bond | Others | ||||||||||
I. Closing Balance of the Last Year | 808,654,476.00 | 202,697,741.40 | 99,724,823.49 | 404,339,238.00 | 4,331,212,701.66 | 5,647,179,333.57 | ||||||
Plus: cumulative changes of accounting policies | ||||||||||||
Error correction of prior period | ||||||||||||
Others | ||||||||||||
II. Opening Balance of the Current Year | 808,654,476.00 | 202,697,741.40 | 99,724,823.49 | 404,339,238.00 | 4,331,212,701.66 | 5,647,179,333.57 | ||||||
III. Current Period Increase ("-" for | -1,945,819.00 | 46,923,626.84 | 388,332,510.27 | -984,909.50 | -548,653,260.62 | -892,992,872.55 |
Decrease) | ||||||||||||
(I) Total of comprehensive incomes | 1,979,653,497.56 | 1,979,653,497.56 | ||||||||||
(II) Capital invested and reduced by the owner | -1,945,819.00 | 46,923,626.84 | -91,733,258.47 | -86,136,849.47 | -3,650,590.00 | 46,923,626.84 | ||||||
1. Common shares invested by shareholders | ||||||||||||
2. Capital invested by other equity instrument holders | ||||||||||||
3. Amount of share-based payment recognized through owners' equities | -75,750.00 | 46,923,626.84 | -3,726,340.00 | -3,650,590.00 | 46,923,626.84 | |||||||
4. Others | -1,870,069.00 | -88,006,918.47 | -86,136,849.47 | |||||||||
(III) Profit distribution | 85,151,939.97 | -2,524,656,168.18 | -2,439,504,228.21 | |||||||||
1. Appropriation of surplus reserve | 85,151,939.97 | -85,151,939.97 | ||||||||||
2. Appropriation of profit to owners | -2,439,504,228.21 | -2,439,504,228.21 | ||||||||||
3. Others | ||||||||||||
(IV) Internal carry-over within owners' equities | ||||||||||||
1. Transfer of capital reserve to capital (or share capital) | ||||||||||||
2. Transfer of surplus reserve to capital (or share capital) | ||||||||||||
3. Surplus reserve to cover losses | ||||||||||||
4. Retained earnings after carrying over amount of changes in |
defined benefit plan | ||||||||||||
5. Retained earnings after carrying over other comprehensive incomes | ||||||||||||
6. Others | ||||||||||||
(V) Special reserve | ||||||||||||
1. Appropriation of current period | ||||||||||||
2. Application of current period | ||||||||||||
(VI) Others | 480,065,768.74 | -480,065,768.74 | ||||||||||
IV. Closing Balance of the Current Period | 806,708,657.00 | 249,621,368.24 | 488,057,333.76 | 403,354,328.50 | 3,782,559,441.04 | 4,754,186,461.02 |
Amount of the prior period
Unit: RMB
Item | 2022 | |||||||||||
Share capital | Other equity instruments | Capital reserves | Minus: Treasury share | Other comprehensive incomes | Special reserve | Surplus reserve | Undistributed profit | Others | Total owners' equities | |||
Preferred share | Perpetual bond | Others | ||||||||||
I. Closing Balance of the Last Year | 808,678,476.00 | 236,901,053.81 | 76,159,897.25 | 404,339,238.00 | 5,141,307,982.39 | 6,515,066,852.95 | ||||||
Plus: cumulative changes of accounting policies | ||||||||||||
Error correction of prior period | ||||||||||||
Others | ||||||||||||
II. Opening Balance of the Current Year | 808,678,476.00 | 236,901,053.81 | 76,159,897.25 | 404,339,238.00 | 5,141,307,982.39 | 6,515,066,852.95 | ||||||
III. Current Period Increase ("-" for Decrease) | -24,000.00 | -34,203,312.41 | 23,564,926.24 | -810,095,280.73 | -867,887,519.38 | |||||||
(I) Total of comprehensive incomes | 1,807,644,330.09 | 1,807,644,330.09 |
(II) Capital invested and reduced by the owner | -24,000.00 | -34,203,312.41 | -69,991,307.25 | -50,016,018.39 | -14,252,023.55 | |||||||
1. Common shares invested by shareholders | ||||||||||||
2. Capital invested by other equity instrument holders | ||||||||||||
3. Amount of share-based payment recognized through owners' equities | -24,000.00 | -34,203,312.41 | -69,991,307.25 | -50,016,018.39 | -14,252,023.55 | |||||||
4. Others | ||||||||||||
(III) Profit distribution | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||
1. Appropriation of surplus reserve | ||||||||||||
2. Appropriation of profit to owners | -2,567,723,592.43 | -2,567,723,592.43 | ||||||||||
3. Others | ||||||||||||
(IV) Internal carry-over within owners' equities | ||||||||||||
1. Transfer of capital reserve to capital (or share capital) | ||||||||||||
2. Transfer of surplus reserve to capital (or share capital) | ||||||||||||
3. Surplus reserve to cover losses | ||||||||||||
4. Retained earnings after carrying over amount of changes in defined benefit plan | ||||||||||||
5. Retained earnings after carrying over other |
comprehensive incomes | ||||||||||||
6. Others | ||||||||||||
(V) Special reserve | ||||||||||||
1. Appropriation of current period | ||||||||||||
2. Application of current period | ||||||||||||
(VI) Others | 93,556,233.49 | -93,556,233.49 | ||||||||||
IV. Closing Balance of the Current Period | 808,654,476.00 | 202,697,741.40 | 99,724,823.49 | 404,339,238.00 | 4,331,212,701.66 | 5,647,179,333.57 |
III. Company ProfileZhejiang Supor Co., Ltd (hereinafter referred to as "the Company") is a limited liability company (by shares) transformed on anintegral basis from Zhejiang Supor Cookware Co., Ltd under the approval of Leading Group for Enterprise Listing of the People'sGovernment of Zhejiang Province with No. ZSS [2000] 24 approval document. On November 10, 2000, the Company registered atZhejiang Administration for Industry and Commerce. Registered address: Yuhuan City, Zhejiang Province; head office address:
Hangzhou City, Zhejiang Province. The Company's parent company is SEB INTERNATIONALE S.A.S whose final parent companyis SEB S.A. The Company has a corporate business license numbered 913300007046976861.
The company and its subsidiaries (hereinafter referred to as "Supor") are mainly engaged in the R&D, production and distributionof kitchen utensils, stainless steel products, daily hardware, small domestic appliances and cookware; its products are cookware andsmall domestic appliances.The financial statement was released after the approval of the Company's Board of Directors on March 29 2024.By December 31, 2023, there were altogether 20 subsidiaries included in the scope of consolidated financial statement. See NoteX "Equity in Other Entities" for details.IV. Preparation Basis of the Financial Statements
1. Preparation basis
The financial statements of the Group are prepared based on the assumption of continuing operation and actual transactions anditems and in accordance with the Accounting Standard for Business Enterprises -- Basic Standard (Released CZBL No.33, RevisedCZBL No.76) issued by the Ministry of Finance of the People's Republic of China (hereinafter referred to as the "Ministry of Finance"),and 42 specific accounting standards, guidelines for the application of accounting standards for business enterprises, interpretations tothe accounting standards for business enterprises and other provisions released and revised on and after February 15, 2006 (hereinafterreferred to as accounting standards for business enterprises) and the disclosure provisions of the Regulations of Corporate InformationDisclosure and Preparation by Companies Publicly Issuing Securities No.15 -- General Provisions on Financial Reporting (Revisedin 2023) of the China Securities Regulatory Commission.
According to the relevant regulations of the accounting standards for business enterprises, the Group's accounting is made onaccrual basis. Except for certain financial instruments, measurements in these financial statements are made on the basis of historicalcost. If an asset is impaired, corresponding impairment provision will be made in accordance with relevant regulations.
2. Continuing operation
The Company has the ability to continue operations for at least 12 months since the end of the reporting period, and there are nomajor issues affecting the ability to continue operations.V. Important Accounting Policies and Estimates
Prompt for specific accounting policies and estimates:
The Group has formulated several specific accounting policies and estimates based on the actual production and operationcharacteristics and relevant accounting standards for enterprises.
When preparing financial statements, the group's management needs to use estimates and assumptions, which will affect theapplication of accounting policies and the amounts of assets, liabilities, income, and expenses. The actual situation may differ fromthese estimates. The management of the group continuously evaluates the key assumptions and uncertainties involved in the estimation,and recognizes the impact of changes in accounting estimates in the current and future periods of the change. The group 's mainaccounting estimates include depreciation and amortization of fixed assets and intangible assets (see notes V, 17, and 20), impairmentof various assets (see notes VII, 4, 6, 8, 13, and XIX, 1, and 2), recognition of deferred tax assets and liabilities (see notes VII, 17),disclosure of fair value (see note XIII), and share based payments (see note XV).
1. Abidance of the statement of Accounting Standards for Business EnterprisesThe financial statement conforms to the requirements of Accounting Standards for Business Enterprises and has reflected relevantinformation such as the financial condition and consolidated financial condition as at December 31, 2023, and the operating result,consolidated operating result, cash flow, and consolidated cash flow for the year of 2023, of the Company and Supor. In addition, thefinancial statements of the Company and the Group conform to the disclosure requirements of the Regulations of Corporate InformationDisclosure and Preparation by Companies Publicly Issuing Securities No. 15 - General Provisions on Financial Reporting revised bythe China Securities Regulatory Commission (CSRC) in 2023 and related financial statements and their notes.
2. Accounting period
The accounting period of the Group is divided into annual period and interim period; an interim period refers to a reporting periodwhich is shorter than a whole fiscal year. The Group takes calendar year as the fiscal year, i.e., from January 1 to December 31.
3. Operating cycle
The normal operating cycle means the period from the time when the Group purchases the assets used for processing to the timeof realizing cash or cash equivalents. The Group takes 12 months as an operating cycle and uses it as a standard for classifying theliquidity of assets and liabilities.
4. Recording currency
RMB is used in the main economic environment in which the Company and its domestic subsidiaries operate and the Companyand its domestic subsidiaries use RMB as the recording currency. Recording currency for foreign subsidiaries of the Company isdetermined as VND, SGD and IDR separately based on the currency in main economic environment in which they operate. The Groupuses RMB as the recording currency to prepare the financial statement.
5. Determination method and selection basis of significance standards
? Applicable □ Not applicable
Item | Significant standard |
Significant accounts receivable written off | 5% of Profit before tax |
Important other debt investments | |
Significant construction in progress | |
Significant accounts payable with an aging of over 1 year | |
Significant not wholly-owned subsidiaries | |
Significant joint venture or associated enterprises |
6. Accounting treatment method for the enterprise merger under and not under the same control
Enterprise merger refers to the transaction or events of two or more separate enterprises combing into a reporting entity. Enterprisemerger is divided into the enterprise merger under the same control and enterprise merger not under the same control.For transactions not under the same control, the purchasing party will consider whether to choose the simplified judgment methodof "concentration test" when judging whether the acquired asset portfolio constitutes a business. If the portfolio passes the concentrationtest, it is judged that it does not constitute a business. Otherwise, it shall still be judged in line with business conditions.When the Group acquires a group of assets or net assets that do not constitute a business, the purchase cost shall be allocated onthe basis of the relative fair value of the identifiable assets and liabilities acquired on the purchase date, and shall not be treated as perthe following accounting treatment methods for enterprise merger.
(1) Enterprise merger under the same control
If enterprises involved with merger are under the final control of the same party or same multiple parties before and after merger,and for a non-temporary period, then it belongs to an enterprise merger under the same control. The assets and liabilities obtained bythe merging party shall be measured on the basis of book value of the merged party on the merger date. As to the difference betweenthe book value of net assets acquired by merging party and the book value of merger consideration paid by it (or total amount of theface value of shares issued), the capital reserve (share capital premium) shall be adjusted correspondingly; the retained earnings willbe adjusted as long as capital reserve (share capital premium) is insufficient to be offset.The merging party's direct expenses incurredfrom enterprise merger shall be recognized through current profits and losses at the time of occurrence. The merger date refers to theday when the merging party actually obtains the control rights of the merged party.
(2) Enterprise merger not under the same control
If enterprises involved with merger are not under the final control of the same party or same multiple parties before and aftermerger, then it belongs to an enterprise merger not under the same control. For enterprise merger not under the same control, the partywhich has obtained the control rights for other combining enterprises on the purchase date will be considered as the purchasing party,and other participating enterprise is the purchased party. The purchase date refers to the day when the purchasing party obtains thecontrol right over the purchased party.
As for enterprise merger not under the same control, the merger costs include the assets paid by the purchasing party, the liabilitiesaccrued and assumed, as well as the fair value of equity securities issued for obtaining purchased party's control right on the purchasedate; the intermediary fees, such as auditing, legal service and evaluation and consulting, and other related administrative expenses forthe enterprise merger shall be recognized through current profits and losses at the time of occurrence. Transaction cost of equitysecurities or debt securities issued by the purchasing party as merger consideration shall be recognized through initial recognitionamount of the equity securities or debt securities. Contingent consideration involved shall be recognized through merger cost accordingto the fair value at the purchase date; if new or further proofs appearing within 12 months after the purchase date show that the
contingent consideration needs to be adjusted, the merger goodwill shall be adjusted correspondingly. The merger costs incurred bythe purchasing party and the identifiable net assets obtained in the merger shall be measured at the fair value on the purchase date. Theamount of the merger cost larger than the fair value of identifiable net assets of the purchased party acquired by it on the purchase dateshall be recognized as goodwill. If the merger cost is lower than the fair value of identifiable net assets of the purchased party obtainedduring merging, the measurement of the identifiable assets of the purchased party obtained, liabilities or fair value of contingentliabilities and the merger costs shall be reviewed firstly. If the merger cost is still lower than the fair value of identifiable net assets ofthe purchased party obtained during merger, the difference shall be recognized through current profits and losses.If the deductible temporary difference of the purchased party gained by purchasing party fails to be confirmed on the purchasedate due to the inconformity of the recognition condition of deferred income tax assets, and in case new or further information obtainedindicates that the relevant conditions on the purchase date have existed within 12 months after the purchase date, and it is predictedthat the economic benefits brought by the purchased party from deductible temporary differences can be realized on the purchase date,relevant deferred income tax assets shall be confirmed, at the same time, the goodwill shall be reduced; if the goodwill is insufficientfor offset, the differential part shall be confirmed as the current profits and losses; except for above conditions, in case the deferredincome tax assets are confirmed to be related to the enterprise merger, they shall be recognized through current profits and losses.As for the enterprise merger not under the same control realized step by step through multiple transactions, it shall judge whetherthe multiple transactions belong to the "package deal" according to No. 5 Notice About Printing and Issuing Accounting Standards forBusiness Enterprises Explanation in Ministry of Finance (CK [2012] No. 19) and the judgment standard (refer to the Note V 7 "Judgment criteria of control, and preparation method for consolidated financial statements " (2)) about "package deal" in Article 51 ofthe Accounting Standards for Business Enterprises No. 33 -- Consolidated Financial Statement. If the multiple transactions belong tothe "package deal", refer to the above descriptions of the part and Note V 16 "Long-term Equity Investment" to conduct the accountingtreatment; for those not belonging to "package deal", it shall distinguish individual financial statements and consolidated financialstatements to conduct relevant accounting treatment.The sum of book value of the purchased party's equity investment held prior to the purchase date and the newly investment coston the purchase date in individual financial statements shall be regarded as the initial investment cost of such investment; in case thatthe equity of the purchased party held before the purchase date is involved in other comprehensive incomes, when disposing of theinvestment, other comprehensive income related shall be transferred to the current investment income.
In consolidated financial statements, the equity of the purchased party held before the purchase date shall be measured againaccording to the fair value of the equity at the purchase date, and the difference between fair value and its book value shall be recognizedthrough current investment income; in case that equity of the purchased party held before the purchase date is involved in othercomprehensive incomes, other comprehensive income related shall be transferred to the current investment income on the purchasedate.
7. Judgment criteria of control, and preparation method for consolidated financial statements
(1) Principles for defining the scope of consolidated financial statement
The scope of the consolidated financial statements is control-based. Control refers to that Supor has the right in an investee whichallows it to enjoy variable returns by participating relevant activities of such investee and to use such right to influence the amount ofsuch returns. In determining whether the Group has control over an investee, the Group considers substantive rights related to theinvestee (including substantive rights held by the Group itself and those held by other parties). The financial condition, operating results,and cash flows of the subsidiaries are included in the consolidated financial statements from the date control commences to the datecontrol ceases. The consolidation scope shall include the Company and all its subsidiaries, and "subsidiaries" refers to the bodies underthe control of Supor.
Supor will re-evaluate the situation once the change in relevant facts and circumstances affects the factors involved in the abovedefinition of control.
(2) Preparation method for consolidated financial statements
From the date of obtaining actual control right of the subsidiaries' net assets and production operation decision, the Group willbegin to bring it into the merger scope; subsidiaries will not be recognized through merger scope from the date when the Companyloses its actual control right. As for the disposed subsidiaries, the operating results and cash flow before disposal date have beenproperly recognized through consolidated profit statement and consolidated cash flow statement; as for subsidiaries disposed in thecurrent period, the opening balance of the consolidated balance sheet will not be adjusted. As for the subsidiary increased due to theenterprise merger not under the same control, its operating results and cash flow after the purchase date have been properly recognizedthrough consolidated profit statement and consolidated cash flow statement, and the opening balance and contrast balance of theconsolidated financial statement shall not be adjusted. As for the subsidiary increased due to the enterprise merger under the samecontrol and the merged party under consolidation by merger, the operating results and cash flow from the beginning of the currentperiod of the merger to the merger date have been properly recognized through consolidated profit statement and the consolidated cashflow statement, and the contrast balance of the consolidated financial statement shall be adjusted simultaneously.When consolidated financial statements are prepared, in case the accounting policies or accounting periods employed by thesubsidiary and the Company are different, it's required to make necessary adjustment on the subsidiary's financial statements accordingto the Company's accounting policy and accounting period. As to the subsidiary acquired by the enterprise merger not under the samecontrol, it's required to adjust its financial statements on the basis of fair value of identifiable net assets at the purchase date.All significant current balance and transaction and unrealized profits in the Group are offset in the preparation of consolidatedfinancial statement.The shareholders' equities and current net profits or losses of subsidiaries that do not belong to the part owned by the Company,shall be separately listed in the shareholders' equities and minority shareholders' profit and loss in the consolidated financial statementas the minority shareholders' equities and profits and losses. The share in the current net profit or loss of the subsidiary that belongs tominority shareholders' equities shall be set out as "minority shareholders' profit and loss" under net profit in the consolidated profitstatement. In case the losses of the subsidiary shared by minority shareholders exceed the share that shall be enjoyed by minorityshareholders in the subsidiary's shareholders' equities at the beginning of period, they shall be offset with minority shareholders' equities.In case of losing the control right for the original subsidiary due to disposal of partial equity investment or other reasons, theresidual equity shall be measured again according to the fair value at the date when the control right is lost. The difference between thesum of the consideration acquired by equity disposal and the fair value of residual equity and the share of net assets of the originalsubsidiary that shall be enjoyed and is calculated continuously from the purchase date according to the original shareholding ratio shallbe recognized through investment income of the current period when the control right is lost. As for other comprehensive income whichrelate to the equity investment of the original subsidiaries, when the control right is lost, the accounting treatment shall be carried outon the same basis as the subsidiary's direct disposal of relevant assets or liabilities. Thereafter, the residual equity of this part shall befurther measured in accordance with Accounting Standards for Business Enterprises No. 2 -- Long-term Equity Investment orAccounting Standards for Business Enterprises No. 22 -- Recognition and Measurement of Financial Instruments. See Note V 16"Long-term Equity Investment" or Note V 10 "Financial Instruments" for details.
If the Group disposes the equity investment of subsidiary step by step via multiple transactions until losing the control right, it isnecessary to distinguish whether transactions for disposal to the equity investment of subsidiary until losing the control right belong tothe package deal. When the disposal of the articles, conditions and the economic impact of various transactions for the equity investmentof the subsidiary is subject to one or more of the following conditions, it generally indicates that it shall conduct accounting treatmentby taking the multiple transactions as a package deal: ① These transactions are considered to be concluded at the same time or madein the case of considering mutual influence; ② These transactions as a whole can reach a complete business result; ③ The occurrenceof a transaction depends on the occurrence of at least one other transaction; ④ One transaction alone is not economical, but when beingconsidered together with other transactions, it is economical. If it is not package deal, every transaction will be conducted by theaccounting treatment according to the following suitable principles, namely, "partially dispose the long-term equity investment ofsubsidiary when the control right is not lost" (See Note V 16 "Long-term Equity Investment" (2) (d)) and "lose the control right for theoriginal subsidiary due to disposal of partial equity investment or other reasons" (see previous paragraph) for details. If the disposal of
transactions on subsidiaries' equity investments until loss of control right is a package deal, they are regarded as a transaction thatdisposes the subsidiary and loses the control right; however, the difference between each disposal price and the subsidiary's net assetshare enjoyed corresponding to disposing investment before loss of control right shall be recognized as other comprehensive incomesin the consolidated financial statements, which will be transferred into the current investment profits and losses on investments oflosing the control right when the control right is lost.
8. Determining standards for cash and cash equivalents
Cash and cash equivalents of the Group includes cash on hand and the deposit that can be used for making payment at any timeas well as investments that are held by the Group, have a short term (generally mature within 3 months since the purchase date) andstrong liquidity, can be converted into the cash of known amount easily, and have small risks in value change.
9. Foreign currency business and foreign currency statement conversion
(1) Conversion method for foreign currency transactions
After initial recognition, the foreign currency transactions occurring in the Group are converted into recording currency amountsat the spot rate prevailing on the transaction date (usually the central parity of the exchange rate quoted on the day of issuance by thePeople's Bank of China, the same below).
(2) Conversion method for foreign currency monetary items and foreign currency non-monetary items
For the balance sheet date, the spot rate on the balance sheet date will be adopted in the conversion of the foreign currencymonetary items. In terms of the resulting exchange differences: ① The exchange difference of special foreign currency borrowingsrelated to acquiring and constructing assets which meet capitalization conditions is disposed on the principle of the capitalization ofborrowing expense; and ② foreign currency monetary items at fair value through other comprehensive incomes, except that theexchange difference created by other book balance changes other than by amortized costs (including decrease in value) is recognizedthrough other comprehensive incomes, are recognized through current profits and losses.
As to foreign currency non-monetary items measured by historical cost, the amount in the recording currency converted at thespot rate on the transaction date is still employed for measurement; as to foreign currency non-monetary items measured by fair value,it's required to employ the spot rate at the fair value confirmation date for conversion, and the resulting exchange difference belongs tothe difference of equity instrument investment at fair value through other comprehensive incomes, and is recognized through othercomprehensive income or recognized through other comprehensive incomes; other differences are recognized through current profitsand losses.
(3) Conversion of foreign currency financial statement
The foreign currency financial statement of overseas business is converted to RMB statement with the following method: theassets and liabilities in the balance sheet shall be converted based on the spot rate on the balance sheet date; as for shareholders' equities,except the "undistributed profits", other items shall be converted by the spot rate on the date of occurrence. Items under income andexpense in the profit statement shall be translated according to the spot rate at the transaction date. The undistributed profits at thebeginning of the year is the year-end undistributed profit after conversion of last year; the period-end undistributed profit is calculatedand presented according to the profit distribution of each item after conversion; the balance of the total amount among the assets andliabilities as well as shareholders' equities after conversion serves as "conversion difference in foreign currency statement" and isrecognized as other comprehensive income; For disposal of overseas business and the loss of control right, the conversion differencein foreign currency statement related to the overseas business and presented under the shareholders' equities in the balance sheet istransferred wholly or according to the disposal ratio of the overseas business into the current disposal profits and losses.
Foreign cash flows and cash flows of subsidiaries overseas are converted based on spot rate on the occurring date of cash flows.The influenced amount of changes in the exchange rate on cash is listed separately in the cash flow statement as an adjustment item.
The beginning amount and actual amount of the year shall be presented according to the amount after conversion of financialstatement of last year.In case of loss of control right of overseas business due to disposal of the Group's entire owners' equities in overseas business, orthe disposal of partial equity investment or other reasons, the foreign currency conversion difference listed in the shareholders' equitiesitems in the balance sheet, related to the overseas business and attributable to owners' equities belonging to parent company shall betotally converted into the current disposal profits and losses.In case of decrease of the ratio of overseas business, but no loss of control right due to disposal of partial equity investment orother reasons, the conversion difference related to the disposal of part of related currency in the overseas business shall be attributableto the minority shareholders' equities, and not converted into the current profits and losses.
If there are any foreign currency monetary items that substantially constitute net investment in overseas businesses, the exchangedifference generated due to the change in exchange rate in the consolidated financial statements shall be determined to othercomprehensive incomes as "conversion difference in foreign currency statements"; when disposing overseas business, it shall berecognized through current disposal profits and losses.
10. Financial instruments
When the Group becomes one party of financial instrument contract, it's required to recognize financial assets or financialliabilities.
(1) Classification, recognition and measurement of financial assets
Based on the business mode for managing financial assets and the contractual cash flow characteristics of financial assets, theGroup divides the financial assets into: financial assets measured by amortized cost, financial assets at fair value through othercomprehensive incomes, financial assets at fair value through current profits and losses
The business mode of the Company's management of financial assets means that how the Group manages its financial assets soas to generate cash flows. Through business mode, it can be determined that whether the cash flow of financial assets managed by theGroup is from the collection of contractual cash flow, sales of financial assets, or both. The Group, based on the objective fact andspecific business objective of financial asset management determined by key management personnel, makes decisions on the businessmode for managing financial assets.
The Group evaluates the contractual cash flow characteristics of financial assets to determine whether the contractual cash flowgenerated by the relevant financial assets on the specific date is only payment of principal and interests for outstanding principal amount.Wherein, the principal refers to the fair value of financial assets at initial recognition; interest includes consideration of the time valueof money, the credit risk related to the outstanding principal amount for a specific period, and other basic borrowing risks, costs, andprofits. Furthermore, the Group evaluates the contract terms and conditions that are likely to cause changes in the distribution of timeor amount of the contractual cash flow of financial assets, to determine whether the terms satisfy the requirements of the abovecontractual cash flow characteristics.
Unless the Group changes its business mode for managing financial assets, all affected related financial assets are reclassified onthe first day of the first reporting period after the change of business mode, otherwise, financial assets cannot be reclassified after initialrecognition.
Financial assets shall be measured by fair value during initial recognition. As to financial assets at fair value through currentprofits and losses, related transaction cost shall be recognized through current profits and losses directly; as to other categories offinancial assets, related transaction cost shall be recognized through initial recognition amount. Accounts receivable or notes receivablethat are from sale of products or rendering of services, and do not include or take into account significant financing parts are taken asinitial recognition amount by the Group based on the consideration amount that the Group is entitled to receive.(a) Financial assets measured by amortized cost
The business mode of the Group to manage financial assets measured by amortized cost is aimed at receiving contractual cashflows; the contractual cash flow characteristics of such financial assets are consistent with basic loan arrangements, that is, cash flows
generated at specific date are only payment of principal and interests for outstanding principal amount. Effective interest method isused by the Group to carry out subsequent measurement of such financial asset according to the amortized cost, and the gains or lossesarising from amortization and impairment are recognized through current profits and losses.(b) financial assets at fair value through other comprehensive incomesThe business mode of the Group to manage such financial assets is aimed at receiving contracted cash flows as well as sales; thecontractual cash flow characteristics of such financial assets are consistent with basic loan arrangements. The Group measures suchfinancial assets measured at fair value through other comprehensive incomes, but impairment losses or gains, exchange profits andlosses, and interest revenue calculated based on effective interest method are recognized through current profits and losses. When thefinancial asset is derecognized, the accumulated gains or losses previously recognized through other comprehensive income shall betransferred out of other comprehensive income and recognized through current profits and losses.In addition, for investments in non-transactional equity instruments, the Group can irrevocably designate them as financial assetsat fair value through other comprehensive incomes upon initial recognition. The designation is made on a single investment basis, andthe relevant investment meets the definition of equity instrument from the issuer's point of view. The Group includes the relateddividend income of such financial assets into the current profits and losses with the change in fair value recognized through othercomprehensive income. When the financial asset is derecognized, the accumulated gains or losses previously recognized through othercomprehensive income shall be transferred into retained earnings and recognized through current profits and losses.(c) Financial assets at fair value through current profits and lossesThe Group recognizes foregoing financial assets measured by amortized cost and that are not financial assets at fair value throughother comprehensive incomes as financial assets at fair value through current profits and losses. In addition, during initial recognition,in order to eliminate or significantly reduce accounting mismatches, the Group designates part of the financial assets at fair valuethrough current profits and losses. As to such financial assets, subsequent measurement shall be carried out by the Group based on fairvalue, and the resulting gains or losses (including interest and dividend income) are recognized through current profits and losses,unless the financial asset is part of the hedging relationship.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities are classified as financial liabilities at fair value through current profits and losses, financial guaranteeliabilities and other financial liabilities upon initial recognition. As to financial liabilities at fair value through current profits and losses,related transaction cost shall be recognized through current profits and losses directly; as to other financial liabilities, related transactioncost shall be recognized through initial recognition amount.(a) Financial liabilities at fair value through current profits and lossesFinancial liabilities at fair value through current profits and losses include transactional financial liabilities (including derivativesbelonging to financial liabilities) and financial liabilities that are designated to be measured at fair value with changes recognizedthrough current profits and losses during initial recognition.Transactional financial liabilities (including derivatives belonging to financial liabilities) are measured subsequently at fair valueand except for those related to hedge accounting, changes in fair value are recognized through current profits and losses.For financial liabilities at fair value through current profits and losses, changes in their fair value caused by changes in the Group'sown credit risk are recognized through other comprehensive income, and when such liabilities are stopped to be recognized,accumulated changes in their fair value caused by changes in the Group's own credit risk that is recognized through other comprehensiveincome are transferred to retained earnings. Other changes in fair value are recognized through current profits and losses. If thetreatment of impact of changes in credit risk of these financial liabilities in the above manner will cause or expand accountingmismatches in profit or loss, the Group will include all gains or losses of such financial liabilities (including impact of changes in theCompany's own credit risk) into the current profits and losses.(b) Financial guarantee liabilities
A financial guarantee contract refers to a contract that requires the Group to pay a specific amount to the contract holder who hassuffered a loss when the specific debtor fails to pay the debt in accordance with the original or modified terms and conditions of thedebt instrument at maturity.After initial recognition, the income related to the financial guarantee contract is apportioned and recognized through currentprofits and losses in accordance with the accounting policies mentioned in Note V. 27 "Revenue". Financial guarantee liabilities aresubsequently measured according to the higher of the loss provision amount determined according to the impairment principle offinancial instruments and the balance of its initial recognition amount after deducting the accumulated amortization amount of incomerelated to financial guarantee contracts.(c) Other financial liabilitiesIn addition to financial liabilities and financial guarantee contracts as a result of financial asset transfers that are not in line withderecognition condition or continuous involvement in transferred financial asset, other financial liabilities are classified as financialliabilities measured at amortized cost and measured subsequently at amortized cost, and gains or losses arising from derecognition oramortization of such liabilities are recognized through current profits and losses
(3) Recognition basis and measurement method of the transfer of financial assets
If financial assets meet one of the following conditions, derecognition of such financial assets will be carried out: ① the contractualright to receive cash flow from the financial assets is terminated; ② the financial assets have been transferred and almost all the risksand rewards in the ownership of the financial assets are transferred to the transferee; ③ the financial assets have been transferred and,although the Group has neither transferred nor retained almost all risks and rewards in the ownership of the financial assets, it haswaived its control over the financial assets.
If the Group neither transfers nor retains almost all the risks and rewards in the ownership of the financial assets and does notrelinquish control over the financial assets, the financial assets shall be recognized according to the degree of continuous involvementof the financial assets transferred, and the relevant liabilities shall be recognized accordingly. Degree of continuous involvement of thefinancial assets transferred is the risk level of the Group due to changes in value of such financial assets.
In case whole transfer of financial assets satisfies the derecognition condition, the difference between the sum of the book valueof financial assets transferred and consideration received due to the transfer and the sum of changes in fair value original recognizedthrough other comprehensive income shall be recognized through current profits and losses.
In case partial transfer of financial assets satisfies the derecognition condition, book value of the financial assets transferred shallbe amortized between the derecognition part and the part without derecognition according to their own fair value, and the differencebetween the sum of the consideration received for the transfer and accumulated amount of the change in fair value to be amortized toderecognition part and originally recognized through other comprehensive income, and the foregoing book value amortized shall berecognized through current profits and losses.
For financial assets sold with right of recourse, or to transfer financial assets by endorsement, the Group needs to determinewhether almost all risks and rewards related to ownership of such financial assets have been transferred. If almost all risks and rewardsrelated to the ownership of such financial assets are transferred to the transferee, derecognition of such financial assets shall beconducted; derecognition of such financial assets should not be conducted if the risks and rewards related to the ownership of suchfinancial assets are reserved; if the risks and rewards related to the ownership of such financial assets are not transferred nor reserved,it needs to determine whether the Company keeps its control over such assets and make accounting treatment based on principles asdescribed in the foregoing paragraphs.
(4) Derecognition of financial liabilities
In case the current obligations of financial liabilities (or part of the financial liabilities) have been terminated, the Group will carryout derecognition of such financial liabilities or part of them. In case the Group (borrower) signs an agreement with the debtor toreplace the original financial liabilities by means of bearing new financial liabilities, and contract clauses related to the new financialliabilities and original financial liabilities are different in essence, it's required to carry out derecognition of original financial liabilitiesand recognize the new financial liabilities simultaneously. If the Group substantially modifies the contract terms and conditions of the
original financial liability (or part of it), the original financial liability is derecognized and a new financial liability is recognized inaccordance with the revised terms and conditions.In case derecognition is carried out for the whole or part of financial liabilities, the difference between their book value and theconsideration paid (including non-cash assets transferred out or liabilities assumed) shall be included by the Group in the current profitsand losses.
(5) Offset of financial assets and financial liabilities
In case the Group has the legal right of offsetting the financial assets and financial liabilities recognized and such legal right isexecutable now, and the Group plans to carry out settlement by net amount or realize the financial assets and pay off the financialliabilities simultaneously, the net amount after mutual offset of such financial assets and financial liabilities shall be set out in thebalance sheet. Otherwise, financial assets and financial liabilities shall be set out in the balance sheet respectively and will not be offsetmutually.
(6) Equity instruments
An equity instrument refers to a contract that can prove the ownership of residual interest in assets after the Group deducts allliabilities. The Group's issuing (including refinancing), repurchase, sale or cancellation of equity instruments are treated as changes inequity, and transaction costs related to equity transactions are deducted from equity. The Group does not determine changes in fairvalue of equity instruments.
Distribution of dividends (including "interest" from instruments classified as equity instruments) from the equity instrumentsduring the duration of the Group is treated as profit distribution.
11. Financial assets impairment
Supor needs to recognize the financial assets with impairment losses as financial asset measured at amortized costs and debt toolsat fair value through other comprehensive incomes, including mainly notes receivable, accounts receivable, receivables financing, otherreceivables and other debt investments. Moreover, for contract assets and some financial guarantee contracts, the impairment provisionshall be accrued and the credit impairment loss shall be recognized pursuant to the accounting policy set forth herein.
(1) Recognition method of impairment provision
The above items are accrued for impairment provision and credit impairment losses by the Group in accordance with applicableexpected credit loss measure methods (general or simplified) based on the expected credit loss.
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by the risk of default. Creditloss refers to the difference between all contractual cash flows discounted as per the original effective interest rate and receivable fromthe contract and all cash flows expected to be received by the Group, namely, the present value of a shortage of cash. Wherein, thepurchased or underlying financial assets with credit impairment of the Group shall be discounted as per effective interest rate based oncredit adjustment.
The general method for measuring expected credit loss is as follows, the Group evaluates whether credit risk of financial assets(including contract assets and other applicable items, the same below) has remarkably increased after initial recognition on each balancesheet date. In case of credit risk having remarkably increased after initial recognition, the Group will measure loss provision as per theamount equivalent to expected credit loss in the entire duration; in case of credit risk failing to remarkably increase after initialrecognition, the Group will measure loss provision as per the amount equivalent to expected credit loss in the next 12 months. At thetime of evaluating expected credit loss, the Group considers all reasonable and well-founded information, including forward-lookinginformation.
When the expected credit loss is measured, the longest period to be considered by the Group is the longest contract period whenthe enterprise faces the credit risk (including considering the renewal option). The expected credit loss of the entire duration refers tothe expected credit loss arising from all possible events of default regarding financial instrument occurring during the entire expectedduration. Expected credit loss in the next 12 months refers to expected credit loss resulting from default of financial instruments likely
occurring within 12 months after the balance sheet date (expected duration if the expected duration of financial instruments is less than12 months) which is part of expected credit loss during the entire duration.For the financial instrument with a lower credit risk on the balance sheet date, the Group assumes that its credit risks have notincreased significantly since the initial recognition, and measures the loss provisions according to the expected credit losses of thefuture 12 months.
(2) Standard for judging whether credit risk has remarkably increased after initial recognition.In case that probability of default of one financial asset confirmed on the balance sheet date in the expected duration is obviouslyhigher than that confirmed at the moment of initial recognition in the expected duration, it means credit risk of such financial assetremarkably increases. The changes of default risk within the next 12 months are adopted by the Group other than special cases asreasonable estimate in the entire duration, ensuring whether the credit risk has increased significantly since the initial recognition.
(3) Combinatorial method of appraising future credit risk based on portfolio
The Group appraises the credit risk of the financial asset item of significantly different credit risks, such as: receivables from therelated parties; receivables disputed with the opposite side or involving litigation or arbitration; there have been obvious signs showingthat the debtor possibly is not able to perform the repayment obligations of receivable amounts, etc.
Except financial assets of individual credit risk assessment, the Group divides financial assets into different groups based on thecommon risk characteristics and appraises credit risks based on portfolio.
(4) Accounting treatment method of financial assets impairment
The expected credit losses of all kinds of financial assets are calculated by the Group at the end of the duration. If the estimatedcredit loss is greater than the book value of the current impairment provision, the difference is recognized as impairment loss; if not, itis recognized as impairment profits.
(5) Determination method of credit losses of all kinds of financial assets
(a) Accounts receivable and contract assets
For accounts receivable and contract asset not involving significant financing part, Supor always calculates the loss provision asthe amount of expected credit loss within the entire duration.
For accounts receivable and contract asset involving significant financing part, Supor always calculates the loss provision as theamount of expected credit loss within the duration.
The other accounts receivables other than individual credit risk assessment are divided into different portfolios based on theircredit risk characteristics:
Item | Basis for determination of portfolio |
Accounts receivable:
Accounts receivable: | |
Portfolio 1: age portfolio | Aging of receivables is used as the credit risk feature for this portfolio. |
Portfolio 2: low-risk portfolio | The portfolio includes very low-risk amounts such as the payment of export third-party goods. |
Portfolio 3: merged related parties portfolio | This portfolio includes current amount between related parties within the merger scope of amounts receivable. |
(b) Other receivables
The impairment loss is measured by the Group in accordance with the amount of expected credit loss equivalent to that withinthe next 12 months or the entire duration based on whether the credit risk of other receivables has increased significantly since theinitial recognition. The other receivables other than individual credit risk assessment are divided into different portfolios based on theircredit risk characteristics:
Item | Basis for determination of portfolio |
Portfolio 1: age portfolio
Portfolio 1: age portfolio | Aging of receivables is used as the credit risk feature for this portfolio. |
Portfolio 2: low-risk portfolio | The portfolio consists of interests receivable, dividends receivable, receivables from government departments with very low risk. |
Portfolio 3: merged related parties portfolio | This portfolio includes current amount between related parties within the merger scope of amounts receivable. |
(c)Notes receivable and accounts receivable financing
Item | Basis for determination of portfolio |
Notes receivable | The Group 's Notes receivable are all bank acceptance bills, and the group combines all Notes receivable into one group. |
Receivables financing | The Receivables financing of the group is for bank acceptance bills with dual holding purposes. Due to the fact that the acceptance banks are all banks with higher credit ratings, the Group considers all Receivables financing as a combination. |
12. Receivables financing
The notes receivable and accounts receivable at fair value through other comprehensive incomes are listed as receivables financingwith a term of less than one year (including one year) from the initial recognition; See the Note V.10 "Financial Instruments" and 11"Financial Assets Impairments" for relevant accounting policies.
13. Inventories
(1) Category
Inventory mainly includes raw materials, unfinished products, finished products, low value consumables and packing materials.
(2) Valuation method for the acquisition and distribution of inventory
When inventories are acquired, they are priced at actual costs. Inventory costs include procurement costs, processing costs, andother costs. When inventories are used and distributed, the price is calculated by the one-off weighted average method at the end of amonth.
(3) Inventory system is perpetual inventory system
(4) Amortization method for low value consumables and packing materials
Low value consumables are amortized by the one-off write-off method or amortized over two years; Packaging materials areamortized using a one-time write off method.
(5) Method of recognizing net realizable value and accruing depreciation reserve of inventories
At the balance sheet date, the inventory shall be measured according to the cost or net realizable value, subject to the lower one.
Net realizable value refers to the amount of the estimated selling price of inventories deducted by estimated costs to be incurredupon completion, estimated sales expenses and related taxes in daily activities. For the raw materials held for production, the netrealizable value shall be measured based on the net realizable value of the finished products they produce.For the inventories held forexecuting the sales contract or labor contract, the net realizable value shall be measured based on the contract price. When the amountof holding inventory is more than the ordering amount in sales contract, the net realizable value of the excess inventory shall bemeasured based on general sales price. The difference between the cost calculated by inventory category and its net realizable valueshall be recognized as a provision for inventory impairment and recognized in the current period's profit and loss.
Inventory category | Basis for determining net realizable value |
Finished products | Estimated selling price minus estimated selling expenses and related taxes and fees |
Raw materials | Estimated selling price minus estimated costs to be incurred until completion, estimated sales expenses, and related taxes and fees |
Low value consumables |
14. Contract assets
The Group lists the customer's unpaid contract consideration as contract assets in the balance sheet, under which the Group hasfulfilled its performance obligations in accordance with the contract, and it does not have the right to collect payments from customersunconditionally (that is, only depending on the passage of time). Contract assets and liabilities under the same contract are listed in netamount, and those under different contracts shall not be offset.
For the determination and accounting treatment methods of expected credit losses of contract assets, please refer to Note V. 11"Financial Assets Impairment".
15. Held-for-sale assets and disposal groups
(1) held for sale Non current assets or disposal groups
In case the Group mainly recovers the book value by selling (including non-monetary assets exchange of commercial essence, thesame below) rather than using a non-current asset or disposal group continuously, it will be classified as held-for-sale category. Specificstandard refers to meeting the following conditions at the same time: one non-current asset or disposal group can be immediately soldunder the current situation pursuant to the convention for selling such asset or disposal group in similar transaction; the Group hasmade a resolution about sale plan and got certain of purchase commitment; it's predicted that the sale will be completed within oneyear. Disposal group refers to a group of assets that will be disposed together as a whole by selling or other means in a transaction andthe liabilities directly related to these assets and transferred in the transaction. In case the asset group or asset group portfolio wherethe disposal group belongs has amortized the goodwill acquired in enterprise merger according to Accounting Standards for BusinessEnterprises No. 8 - Asset Impairment, the disposal group shall include the goodwill amortized to it.
If there are non-current assets or disposal groups purchased to resell during initial measurement or on the balance sheet date basedon remeasurement of the Group, if the book value is higher than the net amount by deducting the selling expenses with the fair value,the book value shall be written down and be equal to the net amount by deducting the selling expenses with the fair value. The write-down amount shall be confirmed as the asset impairment loss and recognized through current profits and losses. At the same time, theimpairment provision of the held-for-sale assets shall be calculated and withdrawn. For the disposal group, it shall deduct the bookvalue of the goodwill in the disposal group with the asset impairment loss confirmed, then deduct in proportion the book value of eachnon-current asset in the disposal group conforming to the measurement provisions on Accounting Standards for Business EnterprisesNo. 42 - Held-for-sale Non-current Assets, Disposal Group and Discontinuing Operation (hereinafter referred to as "the Standard forHeld-for-sale Non-current Assets"). For the held-for-sale disposal group, if the net amount after deducting the selling expenses fromthe fair value on the subsequent balance sheet date increases, the previous write-down amount shall be recovered and shall be reversedfrom the confirmed amount of asset impairment loss amount of the non-current asset as per the measurement provisions on the Standardfor Held-for-sale Non-current Assets after the assets are classified as held-for-sale category. The reverse amount shall be recognizedthrough current profits and losses, and the book value shall be added in proportion of the book value of each non-current asset in thedisposal group applicable to the measurement provisions on the Standard for Held-for-sale Non-current Assets, except for the goodwill.Book value of the goodwill that has been offset and asset impairment loss recognized before the non-current assets applying to themeasurement provisions on the Standard for Held-for-sale Non-current Assets are classified as held-for-sale category shall not bereversed.
Depreciation or amortization will not be withdrawn for held-for-sale non-current assets or non-current assets in the disposal group,and the interest of liabilities in held-for-sale disposal group and other expenses shall be recognized continuously.
When the non-current assets or disposal group can't be classified as held-for-sale category, the Group will no longer continue toclassify them as held-for-sale or remove non-current assets from the held-for-sale disposal group and measure them according to thefollowing two items, subject to the lower one: ① book value before the assets are classified as held-for-sale category, namely, theamount after the adjustment is carried out according to the depreciation, amortization or impairment, etc. that shall be recognized inthe condition that the assets are supposed not to be classified as held-for-sale category; ② recoverable amount.
(2) Termination of operations
The group will define the termination of operations as a separately identifiable component that meets one of the followingconditions and has been disposed of by the Group or classified as held for sale:
-This component represents an independent main business or a separate main operating area;
-This component is part of a related plan to dispose of an independent main business or a separate main operating area;
-This component is a subsidiary acquired specifically for resale.
The group separately presents the continuing operations profit and loss and the termination operations profit and loss in the currentprofit and loss statement, and re presents the information previously reported as continuing operations profit and loss as the terminationoperations profit and loss for comparable accounting periods in the profit and loss statement for the comparative period.
16. Long-term equity investment
The long-term equity investment mentioned in this part refers to the long-term equity investment of which the Group has controlright, common control right or significant impact on the invested units. Long-term equity investments that the Group does not havecontrol, common control or significant impact on the invested unit are accounted for as financial assets at fair value through currentprofits and losses. If such assets are not non-transactional, the Group may specify these capitals as measured at the financial assets atfair value through other comprehensive incomes at the initial recognition. See Note V. 10"Financial Instruments" for details.
Common control refers to common control on a certain arrangement according to related provisions by the Group and relatedactivities of the arrangement can be decided only after the consent of the participant sharing the control right. Significant impact refersto the Group's power on participating in the decision-making of financial and operating policies of the invested unit, but it can't controlthe formulation of these policies or control the formulation commonly with other party.Determination of investment cost
(1) Determination of investment costs
For the long-term equity investment obtained from the enterprise merger under the same control, the initial investment cost of thelong-term equity investment shall be taken as the share of the book value of the merged party's shareholders' equities/owners' equitiesin the final controlling party's consolidated financial statements on the merger date. As to the difference between initial investment costof long-term equity investments and the book value of the cash paid, non-cash assets transferred and liabilities assumed, it's requiredto adjust the capital reserve correspondingly. In case the capital reserve is insufficient for the offset, it's required to adjust the retainedearnings. In the case of treating issued equity securities as the merger consideration, the share of the book value of the merged party'sshareholders' equities/owners' equities in the consolidated financial statement of the final controlling party is regarded as the initialinvestment cost of long-term equity investment on the merger date; the capital reserves shall be adjusted in accordance with taking thetotal face value of shares issued as share capital, and the difference between the initial investment cost of long-term equity investmentand the total face value of shares issued; In case the capital reserve is insufficient for the offset, it's required to adjust the retainedearnings. The equity of the merged party obtained step by step through several transactions, which finally forms enterprise mergerunder the same control, shall be handled separately according to whether it belongs to "package deal": if it belongs to the "packagedeal", the accounting treatment will be carried out by taking transactions as a certain one with control right. If it does not belong to"package deal", the share of the book value of the merged party's shareholders' equities/owners' equities in the final controlling party'sconsolidated financial statement on the merger date will be taken as the initial investment cost of long-term equity investment, and thecapital reserves will be adjusted according to the difference between the initial investment cost of long-term equity investment and thesum of book value of long-term equity investment before combination and book value of consideration newly paid for acquiring theshare; In case the capital reserve is insufficient for the offset, it's required to adjust the retained earnings. Other comprehensive incomeof equity investment held before the merger date, which is accounted by equity method or recognized as financial assets at fair valuethrough other comprehensive incomes, is temporarily not subject to the accounting treatment.
The long-term equity investment obtained from the enterprise merger not under the same control shall be used as the initialinvestment cost of long-term equity investment according to the merger cost on the purchase date. The merger cost includes the sum
of assets paid by the purchasing party, liabilities incurred or assumed, and fair value of issued equity securities. The equity of thepurchased party held obtained step by step through several transactions, which finally forms enterprise merger not under the samecontrol, shall be handled separately according to whether it belongs to "package deal": if it belongs to the "package deal", the accountingtreatment will be carried out by taking transactions as a certain one with control right. If it does not belong to "package deal", it shalltake the sum of the book value of the original equity investment held by the original purchased party and the newly investment cost asthe initial investment cost of the long-term equity investments under the cost method. If the equity originally held is accounted for byequity method, the relevant other comprehensive incomes will not be accounted for the time being.The initial measurement of other equity investments except for the long-term equity investment formed by the enterprise mergershall be carried out according to the costs; in consideration of the different acquisition modes of long-term equity investment, suchcosts shall be determined respectively by the cash purchase price actually paid by the Group, the fair value of equity securities issuedby the Group, value agreed in the investment contract or agreement, the fair value or original book value of assets surrendered in thenon-monetary assets exchange transaction, the fair value of the long-term equity investment, etc. The expenses, taxes and othernecessary expenditures directly related to the acquisition of the long-term equity investment shall also be recognized throughinvestment cost. If the significant impact or common control is implemented on the invested unit due to the additional investment, butit does not constitute the control, the long-term equity investment cost is the sum of fair value of the originally held equity investmentdetermined according to Accounting Standards for Business Enterprises No. 22 -- Recognition and Measurement of FinancialInstruments and newly investment cost.
(2) Methods for the subsequent measurement and the profit and loss confirmation
Long-term equity investments that have common control (except for joint operators) or significant impact on the invested unit areaccounted by equity method. Besides, the Company's financial statement adopts the cost method to account the long-term equityinvestment that can be controlled by the invested unit.(a) Long-term equity investments under the cost method
When the cost method is adopted for accounting, long-term equity investment is priced at the initial investment cost, and the costof long-term equity investment shall be adjusted when the investment is added or recovered. The current investment incomes shall berecognized by the cash dividends or profits announced and issued by the invested unit, except for the actual price paid when theinvestment is obtained or the cash dividends or profits which have been declared but not issued in the consideration.(b) Long-term equity investments under the equity method
As to long-term equity investments checked by equity method, in case the initial investment cost is more than the shares of fairvalue of identifiable net assets of the invested unit that shall be enjoyed during the investment, initial investment cost of the long-termequity investments shall not be adjusted; in case the initial investment cost is less than the shares of fair value of identifiable net assetsof the invested unit that shall be enjoyed during the investment, the difference shall be recognized through current profits and lossesand the cost of long-term equity investments shall be adjusted simultaneously.
When the equity method is adopted for accounting, it's required to recognize the investment income and other comprehensiveincome respectively according to net profit or loss realized by the invested unit that shall be enjoyed or shared and other comprehensiveincome, and book value of the long-term equity investment shall be adjusted simultaneously. As to the part that shall be enjoyed andcalculated according to the profits or cash dividends announced and distributed by the invested unit, it's required to reduce the bookvalue of long-term equity investment correspondingly. As to other changes in owners' equities of the invested unit except for net profitsand losses, other comprehensive incomes and profit distribution, book value of the long-term equity investment shall be adjusted andrecognized through capital reserve. When the shares of net profit or loss of the invested unit that shall be enjoyed are recognized, itshall be based on fair value of each identifiable net asset of the invested unit when the investment is acquired and after the adjustmentis made on net profit of the invested unit. In case the accounting policy and accounting period employed by the invested unit aredifferent from those employed by the Group, financial statements of the invested unit shall be adjusted according to the Group'saccounting policy and accounting period. Besides, investment income, other comprehensive income, etc. shall be recognized on thisbasis. For transactions between the Group and associated enterprise or joint venture, if the assets launched or sold do not constitute the
business, the unrealized internal trading profits and losses shall be offset according to the proportion attributable to the Group, and theinvestment profits and losses shall be confirmed on this basis. In case the part incurred between the Group and the invested unit withoutinternal transaction loss belongs to the asset impairment loss, it shall not be offset. If the assets invested by the Group to the jointventure or associated enterprise constitute the business, and the investor thereupon obtains the long-term equity investment but fails toobtain the control right, the fair value of business launched is taken as the initial investment cost of newly long-term equity investment,and the difference between the initial investment cost and book value of business launched shall be recognized through current profitsand losses in full. If the assets sold by the Group to the joint venture or associated enterprise constitute the business, the differencebetween the consideration acquired and the book value of business shall be fully recognized through current profits and losses. If theGroup's assets purchased from the joint venture or associated enterprise constitute the business, accounting treatment shall be conductedin accordance with the provisions of the Accounting Standards for Business Enterprises No. 20 - Enterprise Merger, and the gains orlosses related to the transaction shall be fully recognized.
When the net loss of the invested unit that shall be shared is recognized, the book value of the long-term equity investment andother long-term equity that actually constitute the net investment of the investee shall be written down to zero. Besides, if the Grouphas the obligation to bear the additional loss for the invested unit, the estimated liabilities will be recognized according to the estimatedobligation that shall be assumed and recognized through current investment losses. In case the net profit is realized by the invested unitlater, after the Group makes up the unrecognized loss amount shared by the income amount shared, it's required to recover the revenuerecognition amount shared.(c) Acquisition of minority shareholders' equitiesWhen compiling the consolidated financial statements, the Company shall adjust the capital reserve due to the difference betweenthe newly-increased long-term equity investment from the purchase of the minority shareholders' equities and the net asset sharesenjoyed according to the new shareholding proportion of the subsidiary continuously calculated from the purchase date (or the mergerdate); in case that the capital reserves are not sufficient to offset, the retained earnings shall be adjusted.(d) Disposal of the long-term equity investmentThe parent company partially disposes the long-term equity investment of subsidiary when the control right is not lost inconsolidated financial statement. The difference between disposal price and subsidiaries' net assets enjoyed corresponding to thedisposal of long-term equity investment will be recognized through shareholders' equities; supposing that the parent company loses thecontrol right for the subsidiary due to the partial disposal of the long-term equity investment for the subsidiary, it shall be dealt with inaccordance with the relevant accounting policies as specified in the Note V. 7" Judgment criteria of control, and preparation methodfor consolidated financial statements " (2).As for the disposal of the long-term equity investment under other circumstances, the difference between the book value of thedisposed equity and the actually-obtained price shall be recognized through current profits and losses.For long-term equity investments under the equity method, if the residual equities after disposal shall still be accounted by theequity method, upon the disposal, the part of other comprehensive income that was originally recognized through shareholders' equitiesshall be accounted for on the same basis as the invested unit's direct disposal of relevant assets or liabilities in a correspondingproportion. However, the owners' equities that are recognized based on the changes in other owners' equities shall be carried forwardto the current profits and losses in proportion, except for the net profits and losses, other comprehensive incomes and profit distributionof investees.For the long-term equity investments under the cost method, if the residual equities after disposal are still under the cost method,the accounting treatment of other comprehensive incomes confirmed under the equity method or standards of recognition andmeasurement of financial instruments before obtaining control of the invested unit shall be conducted on the same basis of the investedunit's directly disposal of the relevant assets or liabilities, and it shall be carried forwarded to the current profits and losses in proportion;except for the net profits and losses, other comprehensive incomes and profit distribution, the changes in other owners' equities in theinvested unit's net assets which are accounted and recognized by the equity method shall be carried forward to the current profits andlosses in proportion.
If the Group loses control of the invested unit due to disposal of partial equity investment, and the residual equities after disposalmay exert common control or significant impact on the invested unit while preparing individual financial statements, the equity methodwill be adopted for accounting, and it will be measured by the equity method and adjusted with equity method since obtaining; if theresidual equities after disposal cannot implement the common control or exert significant impact on the invested unit, the relevantprovisions in respect of the standards of recognition and measurement of financial instruments shall be referenced for the accountingtreatment, and the difference between the fair value and book value shall be recognized through current profits and losses on the dateof losing control. Before the Group acquires the control of the invested unit, for other comprehensive incomes confirmed under theequity method or standards of recognition and measurement of financial instruments, when the control of the invested unit is lost, theaccounting treatment shall be conducted on the same basis of the invested unit's direct disposal of relevant assets or liabilities; thechanges in the other owners' equities of the invested unit's net assets other than the net profits and losses, other comprehensive incomesand profit distribution calculated and confirmed by the equity method shall be settled and transferred to the current profits and lossesin proportion. Among which, if the residual equities after disposal are calculated by the equity method, other comprehensive incomesand other owners' equities shall be carried forward in proportion; if the residual equities after disposal are to be conducted withaccounting treatment in accordance with the standards of recognition and measurement of financial instruments, other comprehensiveincomes and other owners' equities shall be carried forward.If the Group loses the common control or significant impact on the invested unit due to disposal of partial equity investment, theresidual equities after disposal shall be accounted according to the standards of recognition and measurement of financial instruments.The difference between the fair value and book value shall be recognized through current profits and losses on the date of losingcommon control or significant impact. As for other comprehensive incomes as recognized when the original equity investment is underthe equity method, it shall be subject to the accounting treatment on the same basis of the assets or liabilities which are directly disposedby the invested unit when the equity method is abandoned. The owners' equities which are recognized by the invested unit due to thechanges in other owners' equities, except for the net profits and losses, other comprehensive incomes and profit distribution of investees,will be reckoned in the current investment incomes when the equity method is abandoned.The Group will take the multiple transactions to dispose the subsidiaries' equity investment step by step until lose its control right.When the above-mentioned transactions belong to the package deal, the transactions will be subject to the accounting treatment as anequity investment of subsidiaries and transaction which has lost the control right. The difference between the disposal price and thecorresponding book value of long-term equity investment will be recognized as the other comprehensive incomes before losing thecontrol right, which will be reckoned in the current profits and losses when the control right is lost.
17. Fixed assets
(1) Recognition conditions
Fixed assets refer to tangible assets held for producing commodities, providing labor service, leasing or operation managementwith service life of more than 1 fiscal year. The fixed assets can be confirmed only when the relevant economic interests are possibleto flow into the Group and its costs can be measured reliably. The initial measurement of fixed assets shall be carried out according tothe cost and considering the expected influence of the discard expenses.
(2) Depreciation method
Categories | Depreciation method | Depreciation life (Years) | Residual rate | Annual depreciation rate |
Buildings and structures | Straight-line method | 20-30 | 0%-10% | 3.00%-5.00% |
General equipment | Straight-line method | 3-7 | 0%-10% | 12.86%-33.33% |
Special equipment | Straight-line method | 3-10 | 3%-10% | 9.00%-32.33% |
Transport facilities | Straight-line method | 4-10 | 3%-10% | 9.00%-24.25% |
The expected net residual value refers to the expected amount that the Group may obtain from the current disposal of fixed assetsafter deducting the expected disposal expenses at the expiration of its expected service life.
(3) Impairment test method and counting and withdrawing method of the impairment provision of fixedassets
See more details about the impairment test method and the withdrawing method of impairment provision of fixed assets in NoteV. 22 "Impairment of Long-term Assets".
(4) Other remarks
The subsequent expenditures related to fixed assets shall be recognized through fixed assets cost, and the derecognition of thebook value of the substitution part shall be carried out if economic benefits related to such fixed assets may flow in and its cost can bereliably measured. Other subsequent expenditures, except for this, shall be recognized through current profits and losses once occurred.
As for each component constituting fixed assets, in case that they have different service life or provide economic interest for thegroup by different ways and apply to different rates of depreciation and depreciation methods, the Group confirms each component assingle fixed asset, respectively.
When the fixed assets are under disposal state or it is estimated that no economic benefits can be produced through usage ordisposal, such fixed asset is confirmed to be derecognized. The difference of the amount left as the book value and relevant taxes arededucted from the disposal revenue obtained from the sale, transfer, discard or damage of the fixed asset shall be recognized throughcurrent profits and losses.
The Group shall review the service life, expected net residual value and depreciation method of the fixed assets at least by the endof the year. In case of any change, it shall be deemed as changes in accounting estimate.
18. Construction in progress
The cost of construction in progress shall be confirmed as per actual engineering expenditures, including various projectexpenditures under construction, capitalized borrowing expense for making the project reach the expected serviceable condition, andother relevant costs. The construction in progress shall be transferred to the fixed assets when it reaches the expected serviceablecondition.
Standard and time spot of converting construction in progress disclosed per category to fixed assets:
Categories | Standard and time point of carrying forward construction in progress to fixed assets |
Buildings and structures | Meeting the completion standard specified in the contract or project plan |
General/special equipment | Installation and commissioning meeting the design standard and contract standard |
See more details about the impairment test method and the withdrawing method of impairment provision of construction inprogress in Note V. 22 "Impairment of Long-term Assets".
The income and cost of the Group's external sales of products or by-products produced before the fixed assets reach the expectedserviceable condition, the company should carry out accounting treatment separately according to Accounting Standards for BusinessEnterprises No. 14 - Revenue and Accounting Standards for Business Enterprises No.1 - Inventory, which shall be recognized throughcurrent profits and losses.
19. Borrowing expenses
Borrowing expenses include interest on borrowings, amortization of discounts or premiums, auxiliary costs and exchangedifferences arising from foreign currency borrowings, etc. For the borrowing expense generated from the acquisition and constructionor production that can be directly attributable to the assets that meet capitalization conditions, the capitalization shall be started whenthe asset expenditure or the borrowing expense has incurred, or the acquisition and construction or production activities necessary formaking the assets available for expected serviceable or marketable state have been started; capitalization shall be stopped when theassets under acquisition and construction or production that meet capitalization conditions reach the expected serviceable condition ormarketable state. Other borrowing expenses are recognized as those in the current period.The amount can be capitalized after the actual interest expense generated from the specific borrowing deducting the interestrevenue from the unused loan funds deposited in the bank or investment income obtained from the temporary investment in the currentperiod; for the general borrowing, the capitalized amount will be determined after the weighted average of excessive part ofaccumulative asset expenditures compared to the asset expenditure of special borrowing multiplied by the capitalization rate of thegeneral borrowing occupied. The capitalization rate is determined based on the weighted average interest rate of general borrowing.In the capitalization period, all exchange differences of special foreign currency borrowings shall be capitalized; exchangedifference of general foreign currency borrowing shall be recognized through current profits and losses.Assets meeting capitalization conditions refer to the fixed assets, investment properties, inventories, etc. which can reach theexpected serviceable state or marketable state after quite a long time of acquisition and construction or production.If assets meeting capitalization conditions are interrupted abnormally in the process of acquisition and construction or production,and the interruption lasts for more than 3 months, the capitalization of borrowing expense shall be suspended till the asset acquisitionand construction or production restarts.
20. Intangible assets
(1) Intangible assets
Intangible assets refer to the identifiable non-monetary assets that have been owned or controlled by the Group and have nophysical form.
The initial measurement of intangible assets shall be conducted according to its costs. Expenditures related to intangible assetsshall be recognized through cost of intangible assets if the relevant economic benefits may flow in the Group and its cost can be reliablymeasured. Other projects' expenditures, except for this, shall be recognized through current profits and losses once occurred.
Land use right acquired is usually calculated as an intangible assets. As for buildings such as self-developed and constructedworkshops, the related land use right expenditure and construction cost of the buildings shall be calculated as intangible assets andfixed assets respectively. As for purchased buildings and structures, the related prices are distributed between land use right and thebuildings. If it is difficult to distribute them reasonably, all of them shall be disposed as fixed asset.
As for intangible assets with a limited service life, the accumulative amount after deducting the expected net residual value andthe accrued impairment provisions with original value since the serviceable date, it is amortized with the straight-line method withinthe expected service life. Intangible assets with undetermined service life will not be amortized.
The service life, determination basis, and amortization method of various intangible assets are::
Item | Amortization period (years) | Determination basis | Amortization method |
Land use right
Land use right | 43-50 | Legal term | Straight-line method |
Software | 2-10 | The duration that can bring economic benefits to the company | Straight-line method |
Trademark use right
Trademark use right | 10 | Legal term | Straight-line method |
Dumping right | 5 | Contract term | Straight-line method |
At the end of each period, the service life of intangible assets with limited service life and the amortization method for them willbe rechecked. Changes of them will be regarded as changes of accounting estimate. In addition, the service life of intangible assetswith undetermined service life will be rechecked. If there is evidence manifesting that an intangible asset can bring economic benefitsfor the enterprise within a foreseeable period, then its service life will be estimated and it will be amortized according to the amortizationpolicy for intangible assets with limited service life.
(2) R&D expenditure
Expenditures on the internal R&D items of the Group are divided into research expenditure and development expenditure.
Research expenditure is recognized through current profits and losses at the time of occurrence.
Development expenditure that can meet the following conditions will be recognized as intangible assets, while those cannot meetwill be recognized through current profits and losses.- Complete the intangible asset so as to make the use or sale of it technically feasible;- Have the intention to complete the intangible asset and use or sell it;- The way that an intangible asset generates economic benefits is to certify that the products produced with the intangible asset hasmarket or the intangible asset itself has market, or to certify its usability when it will be used internally;- There are enough technology, financial resources and other resources to support finishing the development of an intangible asset,and it is capable of using or selling this intangible asset;- Expenditure within the development stage of this intangible asset can be measured reliably.If it is unable to distinguish the research expenditure from development expenditure, both R&D expenditures will be recognizedthrough current profits and losses.
(3) Impairment test method and counting and withdrawing method of the impairment provision of intangibleassetsSee more details about the impairment test method and the withdrawing method of impairment provision of intangible assets in NoteV. 22 "Impairment of Long-term Assets".
21. Long-term unamortized expense
Long-term unamortized expenses are expenses that have occurred but shall be borne during the reporting period and subsequentperiods with a sharing period of more than one year. Long-term unamortized expenses of the Group mainly include improvementexpenditure of fixed assets leased for operation. Long-term unamortized expenses are amortized by the straight-line method over theexpected benefit period.
22. Impairment of long-term assets
As for fixed assets, construction in progress, right-of-use assets, intangible assets with a limited service life, investment propertiesmeasured by cost measurement, long-term unamortized expenses, and non-current and non-financial assets such as the long-term equityinvestment and goodwill of subsidiaries, joint ventures and associated enterprises, the Group shall determine whether there is any signof impairment on the balance sheet date. If there are signs of impairment, the recoverable amount shall be estimated and impairmenttest shall be carried out. Goodwill, intangible assets with undetermined service life and intangible assets that have not reached theserviceable state, whether there is any sign of impairment, shall be subject to impairment test every year.
If the impairment test result shows that the recoverable amount of assets is lower than the book value thereof, impairment provisionshall be accrued according to the difference and recognized through impairment losses. The recoverable amount shall be determinedas the net amount obtained by the fair value of asset - disposal expense, or as the present value of the estimated future cash flow ofassets, whichever is higher. The fair value of the asset is determined according to the price in the sales agreed price in the fair transaction;if there is no sales agreement but there is an active market of assets, the fair value is determined according to buyer's price of the asset;if there is no sales agreement and an active market of assets does not exist, the fair value of assets shall be estimated based on the bestinformation obtained. The disposal expenses include the legal cost related to the asset disposal, relevant taxes, carriage expenses aswell as direct expenses for achieving the marketable state status. The present value of the estimated future cash flow of assets shall bedetermined by the discounted amount by an appropriate discount rate, on the basis of the estimated future cash flow generated duringthe continuous usage and final disposal of assets. The impairment provision shall be calculated and recognized on the basis of the singleasset. If it is hard to estimate the recoverable amount of the single asset, the recoverable amount of the asset group shall be determinedaccording to the asset group by the asset group to which the asset belongs. Asset group refers to the minimum asset portfolio that iscapable of generating cash inflow independently.
For the goodwill separately presented in the financial statements, during the impairment test, the book value of goodwill shall beapportioned to the asset group or asset group portfolio expected to be benefited from the synergistic effect of enterprise merger. If thetest results show that the recoverable amount of the asset group or asset group portfolio containing the apportioned goodwill is lowerthan its book value, the corresponding impairment loss shall be recognized. The amount of impairment loss firstly offsets the bookvalue of goodwill apportioned to the asset group or asset group portfolio, and then offsets the book value of other assets in proportionaccording to the proportion of the book value other than goodwill in the asset group or asset group portfolio.
Once the above-mentioned asset impairment losses are recognized, the part of which can be recovered shall not be reversed insubsequent periods.
23. Contract liabilities
Contract liabilities refer to the obligation of the Group to transfer commodities to customers for the received or receivableconsideration from customers. In the event that the customer has paid the contractual consideration or the Group has obtained theunconditional collection right before it transfers the commodities to customers, the Group shall present the received or receivableaccount as contract liabilities with regard to the actual payment by customers and the due payment, whichever happens earlier. Contractassets and liabilities under the same contract are listed in net amount, and those under different contracts shall not be offset.
24. Employee remuneration
The Group's employee remuneration mainly includes short-term employee remuneration, post-employment benefits, terminationbenefits and other long-term employee welfare. Including:
Short-term employee remuneration mainly includes salary, bonus, allowance and subsidy, employee benefits expense, medicarepremium, maternity premium, occupational injuries premium, housing accumulation fund, labor union expenditure, personneleducation fund, non-monetary welfare, etc. During the accounting period in which the Group's employees provide services for theGroup, actual short-term employee remuneration incurred shall be recognized as the liabilities and recognized through current profitsand losses or relevant asset costs. And the non-monetary welfare shall be measured at fair value.
Post-employment benefit mainly includes basic endowment insurance, unemployment insurance, and annuity. The plan of post-employment benefit includes the defined contribution plan. In case that the defined contribution plan is adopted, corresponding amountwhich shall be deposited will be recognized through relevant asset costs or current profits and losses at the time of occurrence.
Labor relation with employees shall be cancelled before the employee's labor contract expires, or suggestion on givingcompensation shall be proposed for the purpose of encouraging employees to voluntarily accept downsizing. When the Group cannotunilaterally withdraw termination benefits provided for cancellation of labor relation plan or downsizing suggestion and on the date
when the Group confirms the cost related to restructuring involving payment of termination benefits, whichever is the earlier, theemployee remuneration liabilities caused by termination benefits shall be recognized through current profits and losses. However, if itis expected that the termination benefits cannot be fully paid within twelve months after the annual reporting period is over, it shall behandled according to other long-term employee remuneration.The same principle for termination benefits described above shall be adopted for the plan of employee internal retirement. Staffsalary and social insurance premium to be paid by the Group for the early retired employee from the date of stopping providing servicesto the date of normal retirement are recognized through current profits and losses (termination benefit) if the estimated liabilitiesrecognition conditions are met.
25. Estimated liabilities
If the obligation related to contingencies satisfies the following conditions at the same time, the Group shall recognize it as theestimated liabilities: ① This obligation is the current obligation undertaken by the Group; ② Performance of this obligation may makeeconomic benefits flow out of the enterprise; ③ Amount of this obligation can be reliably measured.The estimated liabilities are initially measured based on the best estimate of the expenses required to fulfill the relevant currentobligations. For those with significant impact on the time value of currency, estimated liabilities are determined based on the discountedamount of expected future cash flows. When determining the best estimate, the Group comprehensively considers factors such as risk,uncertainty, and time value of money related to contingencies.The necessary expenditure has a contiguous range, and within this range,all kinds of results have the same possibility to occur. The optimal estimate is determined according to the median of this range. Inother circumstances, the optimal estimate is treated as below:
- If the contingency involves with a single item, then the optimal estimate will be determined based on the amount that is most likelyto occur.- If the contingency involves with several items, then the optimal estimate will be determined based on all possible results and theirprobabilities.The group reviews the book value of estimated liabilities on the balance sheet date and adjusts the book value based on the currentbest estimate.
(1) Loss contract
The loss contract refers to a contract whose performance of the contractual obligations will inevitably incur costs in excess of theexpected economic benefits. When an enforceable contract becomes a loss contract, for which the liability can conform to the aforesaidestimated liabilities recognition conditions, confirm the part the estimated losses of the contract surpass the confirmed impairment loss(if any) of the underlying asset in the contract as estimated liability.
(2) Restructuring obligations
It shall determine the estimated liabilities amount according to the direct expenditures related to the restructuring which hasdetailed, formal and publicly stated restructuring plan and which are in line with the recognition conditions of the aforesaid estimatedliabilities. The restructuring obligation related to partially-sold business will be recognized to be the associated obligation only whenthe Group promises to sell partial businesses (namely, signs the binding-force sales agreement).
26. Share-based payment
(1) Accounting treatment of share-based payment
A share-based payment is a transaction that grants the equity instruments or assumes a liability determined on the basis of theequity instruments in order to obtain services from employees or other parties. Share-based payments are divided into equity-settledshare-based payments and cash-settled share-based payments.(a) Equity-settled share-based payment
Equity-settled share-based payments in exchange for services provided by employees are measured at the fair value with the equityinstruments granted to the employees at the grant date. The amount of the fair value is recognized through relevant cost or expensebased on the optimal estimate of the number of vesting equity instruments in case of completing the service within the waiting periodor meeting the required performance conditions; when the vesting right is granted immediately, the relevant cost or expense is includedon the grant date according to the straight-line method, and the capital reserves shall be increased accordingly.
On each balance sheet date during the waiting period, the Group makes the optimal estimate based on the latest information suchas the change in the number of employees with vesting rights, and corrects the number of equity instruments that are expected to bevested. The impact of the above estimates is recognized through current relevant cost or expense, and the capital reserves shall beadjusted accordingly.
In the case of equity-settled share-based payments in exchange for other parties' services, if the fair value of other parties' servicescan be reliably measured, the fair value of other parties' services is measured at the fair value on the date of acquisition; if the fair valueof other parties' services cannot be reliably measured, but the fair value of equity instruments can be measured reliably, it shall bemeasured at the fair value of the equity instrument on the acquisition date, and is recognized through relevant cost or expense, andincreases the shareholders' equities accordingly.(b) Cash-settled share-based payment
The cash-settled share-based payment is measured at the fair value of the liabilities determined by the Group based on shares orother equity instruments. If the vesting right is granted immediately after the grant, the relevant cost or expense will be included on thegrant date, and the liabilities increased accordingly; if the service within the waiting period must be completed or the requiredperformance conditions are met, the fair value of the liabilities assumed by the Group is based on the optimal estimate of the vestingrights on each balance sheet date of the waiting period. The services obtained in the current period are recognized through cost orexpense, and the liabilities are increased accordingly.
The fair value of the liability is re-measured at the balance sheet date and the settlement day before the settlement of the relevantliabilities, and the change shall be recognized through current profits and losses.
(2) Accounting treatment related to the modification and termination of share-based payment plan
When the Group modifies the share-based payment plan, if the modification increases the fair value of the equity instrumentsgranted, the increase in the fair value of the equity instruments is recognized accordingly. The increase of the fair value of equityinstruments refers to the difference between the fair value of the equity instruments before and after the modification on themodification day. If the modification reduces the total fair value of the share-based payment or adopts other methods that are notconducive to the employee, the service obtained will continue to be accounted for, as if the change has never occurred, unless theGroup cancels some or all of the equity instruments granted.
During the waiting period, if the granted equity instrument is cancelled, the Group will cancel the granted equity instrument as anaccelerated exercise, and the amount to be recognized in the remaining waiting period will be immediately recognized through currentprofits and losses, and the capital reserves shall be recognized at the same time. If the employee or other party can choose to meet thenon-vesting conditions but fails to meet in the waiting period, the Group will treat it as a cancellation of the equity instrument.
(3) Accounting treatment of the share-based payment transactions involving the Group and the shareholders or actual controllers of theCompany
For share-based payment transaction involving the Group or the Company's shareholders or actual controller, if either settlemententerprise or enterprise accepting service is inside the Group or outside the Group, the accounting treatment shall be conducted in theconsolidated financial statements of the Group according to the following regulations:
- Where the settlement enterprise makes calculation by its own equity instruments, the share-based payment transaction shall betreated as the equity-settled share-based payment; in addition, it shall be handled as a cash-settled share-based payment.
- If the settlement enterprise is an investor of a enterprise accepting service, it shall be recognized as the long-term equityinvestment of the enterprise accepting service according to the fair value of the equity instrument at the grant date or the fair value ofthe liability to be assumed, and the capital reserves (other capital reserves) or liabilities shall be recognized.
- If the enterprise accepting service does not have a settlement obligation or the equity instruments granted to the enterpriseemployees are its own equity instrument, such share-based payment transaction shall be treated as the equity-settled share-basedpayment. - If the enterprise accepting service have a settlement obligation and the equity instruments granted to the enterpriseemployees are its own equity instrument, such share-based payment transaction shall be treated as the cash-settled share-based payment.The share-based payment transactions between the enterprises within the Group, if the enterprise accepting service and thesettlement enterprise are not the same enterprise, and the confirmation and measurement of the share-based payment transaction inindividual financial statements of the enterprise accepting service and the settlement enterprise shall be compared with the aboveprinciples.
27. Revenues
Accounting policy adopted for recognition and measurement of revenues disclosed per business type
Revenue is the total inflow of economic benefits that the Group has formed in its daily activities that will result in an increase inshareholders' equities and has nothing to do with the capital invested by shareholders. Where the contract between the Group and itscustomers can meet the following conditions at the same time, the revenue shall be confirmed when the customer owns the relevantcontrol right of the commodity (including labor service, the same below): all concerned parties have approved the contract and promisedto fulfill their respective obligations; the contract has specified rights and obligations of each concerned party related to commoditytransfer or labor provision; the contract has clear payment terms and conditions related to the transferred commodities; the contract isof the commercial essence, which means that performance of the contract will change the risk, time distribution or amount of futurecash flow of the Group; the consideration that the Group is entitled to obtain due to the transfer of commodities to customers is likelyto be recovered. To obtain the control right of relevant commodities means to be able to lead the use of the commodities and obtainalmost all economic benefits therefrom.
On the beginning date of the contract, the Group identifies the individual performance obligation specified in the contract andamortizes the transaction price to each individual performance obligation based on the relative proportion of the individual sales priceof the commodity guaranteed in individual performance obligation. Variable consideration, significant financing part in the contract,non-cash consideration, customer consideration payable, etc. have been taken into account the transaction price.
For the consideration payable to customers, the payable consideration should be offset against the transaction price, and thecurrent income should be offset at the later of the recognition of relevant income and the payment (or commitment to pay) of customerconsideration, except for the consideration payable to customers for the purpose of obtaining other clearly distinguishable goods fromcustomers.
For contracts with quality assurance terms and conditions, the Group analyzes the nature of the quality assurance provided bythem. If the quality assurance provides a separate service in addition to assuring customers that the commodities sold meet theestablished standards, the Group regards it as a single performance obligation.Transaction price is the consideration amount the Group is expected to be entitled to receive for the transfer of commodities orservices to customers, excluding payments received on behalf of third parties. The transaction price recognized by the Group does notexceed the amount for which it is highly probable that the accumulated recognized revenue will not be reversed significantly when therelevant uncertainty is eliminated.
As for each individual performance obligation in the contract, if one of the following conditions is met, the Group shall confirmthe transaction price which is amortized into the individual performance obligation based on the performance progress within a relevantperformance period as the revenue: the customer obtains and consumes the economic benefits while the Group fulfills the performanceobligation; the customer manages to control the commodities in process while the Group fulfills the performance obligation.Commodities produced during the performance period have irreplaceable purposes and the Group has the right to receive payment forthe performance part which has been completed so far during the entire contract period. The performance progress shall be confirmedbased on the nature of commodities transferred by virtue of the input method or the output method. When the performance progress
cannot be confirmed reasonably, if it is predicted that the incurred cost of the Group can be compensated, the revenue shall be confirmedbased on the incurred cost amount until the performance progress can be confirmed reasonably.If one of the above conditions cannot be met, the Group confirms the transaction price amortized to the individual performanceobligation at the time when the customer obtains the control right of relevant commodities as the revenue. When judging whether thecustomer has obtained the control right of the commodity, the Group can consider the following signs: the enterprise has the currentcollection right of the commodity, namely the customer is responsible for current payment obligation of the commodity; the enterprisehas transferred the legal ownership of the commodity to the customer, namely the customer has possessed the legal ownership of thecommodity; the enterprise has transferred the real commodity to the customer, namely the customer has possessed the real commodity;the enterprise has transferred main risks and rewards of the commodity to the customer, namely the customer has obtained the mainrisks and rewards related to the ownership of the commodity; the customer has accepted the commodity; other signs indicating that thecustomer has obtained the control right of the commodity.For sales with sales return terms and conditions, when customers obtain control over related commodities, the Group recognizesrevenue according to the consideration amount expected to be received due to the transfer of commodities to customers (i.e., excludingthe amount expected to be refunded due to sales return), and recognizes liabilities as per the amount expected to be refunded due tosales return. Simultaneously, according to the expected book value of the returned commodities at the time of transfer, the balance afterdeducting the expected cost of recovering the commodities (including the impairment of the value of the returned commodities) isrecognized as an asset, and the net cost of the above assets is carried forward according to the book value of the transferred commoditiesat the time of transfer. On each balance sheet date, the Group re-estimates the future sales returns, and if there is any change, it will betreated as a change in accounting estimates.
The Group's selling of commodities such as cookware and small domestic appliances is a type of performance obligation at acertain time point, of which the revenue is recognized when the control over the commodities has been transferred to the customer.According to the agreement in the sales contract, the group mainly recognizes the control over commodity as having been transferredto the customer and recognizes relevant commodity revenue when such commodity has left the group's warehouses or its specifiedwarehouses, delivered to the customer with acceptance receipt issued, or such commodity has been delivered on board to the seatransport carrier with the customs declaration for export and bill of lading obtained.
28. Contract costs
The incremental cost incurred by the Group to obtain the contract and expected to be recovered shall be recognized as an asset asthe contract acquisition cost. However, if the amortization period of the asset does not exceed one year, it shall be recognized throughcurrent profits and losses at the time of occurrence.
In the event that the cost incurred for the performance of the contract does not fall within the scope of the Accounting Standardsfor Business Enterprises No. 14 - Revenue (Revised in 2017) and meets the following conditions at the same time, it shall be recognizedas an asset as the contract performance cost: ① The cost is directly related to a current or expected contract, including direct labor,direct materials, manufacturing expenses (or similar expenses), costs borne by the customer and other costs only incurred by thecontract; ② The cost increases the Group's resources to fulfill its performance obligations in the future; ③ The cost is expected to berecovered.
Assets recognized for contract acquisition cost and assets recognized for contract performance cost (hereinafter referred to as"assets related to contract cost") shall be amortized on the same basis as the revenue recognition of commodities or services related tosuch assets and recognized through current profits and losses.
Where the book value of assets related to contract costs is higher than the difference between the following two items, the Groupshall withdraw the impairment provisions of the excess part and recognize it as the asset impairment loss:
- Residual consideration expected to be obtained arising from the transfer of commodities or services related to the assets by theGroup;
- Cost estimated to be occurred for the transfer of the relevant commodities or services.
29. Government subsidies
Government subsidies refer to monetary assets and non-monetary assets obtained by the Group from the government, excludingthe capital invested by the government as the investor with enjoying corresponding owners' equities. Government subsidies are dividedinto government subsidies concerning assets and government subsidies concerning benefits. The government subsidy that is obtainedby the Group used for purchasing or acquisition and construction, or forming the long-term assets by other ways, which is confirmedthe government subsidies concerning assets; Other government subsidies shall be defined as the government subsidies concerningbenefits. If the government document does not clear the subsidy object, the subsidies will be divided based on the following modesinto government subsidies concerning benefits and government subsidies concerning assets: ① If the particular item of the subsidiesis clear in the government document, it shall make a division according to the relative proportion of expense amount of the formedassets in the budget of the particular item and the expense amount recognized through cost, review the division ratio at each balancesheet date and make changes if necessary; ② In the government document, for general terms only for the purpose without specifyingthe particular item, it will be used as the government subsidies concerning benefits. If government subsidies are monetary assets, theyshall be measured according to the amount received or receivable. If not, they shall be measured according to their fair value; if theirfair value cannot be reliably obtained, they shall be measured according to their nominal amount. The government subsidies measuredby the nominal amount shall be directly recognized through current profits and losses.When the Group actually receives the government subsidies, it shall be recognized and measured as the amount received. However,for the end of the period, there are conclusive evidences that it can meet the relevant conditions stipulated by the financial supportpolicy, and it is expected that the financial support funds can be received, it shall be measured according to the amount receivable. Thegovernment subsidies measured as the amount receivable shall comply with the following conditions: ① The subsidy receivable hasbeen recognized by the competent government department, or may be reasonably calculated according to the relevant provisions of theformally published financial fund management method, and the estimated amount is free of significant uncertainty; ② It is based onthe initiatively published financial support project by the local financial department and its financial fund management method inaccordance with the regulations of the Decree of Government Information Openness, and this management method shall be favorableto the public (any enterprise qualified can apply), not just to the specified companies; ③ The relevant subsidy documents have clearlypromised the appropriation period, and the appropriation of this fund shall be safeguarded by the relevant financial budget, so it can bereasonably guaranteed that it can be received within the specified period; ④ Other relevant conditions that shall be satisfied (if any)based on the specific circumstances of the Group and the grant.
If the government subsidies concerning assets are recognized as deferred incomes and are recognized through current profits andlosses by installments in a reasonable and systematic way within the service life of underlying assets. Government subsidies concerningbenefits used to compensate future relevant costs or losses will be recognized as deferred income, and recognized through currentprofits and losses during the period when the related costs or losses are recognized; those used to compensate relevant costs or lossesthat have occurred will be recognized through current profits and losses directly.
At the same time, it includes the government subsidies related to assets and incomes, and separates different parts for accountingtreatment; for those hard to be differentiated, it shall be taken as government subsidies concerning benefits as a whole.
The government subsidies concerning daily activities of the Group shall be recognized through other incomes, or used to offsetthe relevant costs according to the economic business nature. Government subsidies not concerning daily activities will be recognizedthrough non-operating income and expenditure.
If the government subsidies confirmed need to be returned and there is the deferred income balance concerned, the book balanceof relevant deferred incomes shall be offset against, but the excessive part shall be recognized through current profits and losses; Inother circumstances, they shall be recognized through current profits and losses directly.
30. Deferred income tax assets/deferred income tax liabilities
(1) Current income tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current period and previous periods shall bemeasured by the expected amount of income tax payable (or returnable) calculated in accordance with the provisions of the tax law.The taxable income on which the current income tax expenses are calculated shall be calculated after the corresponding adjustment ofthe pre-tax accounting profit in the current reporting period in accordance with the relevant tax law.
(2) Deferred income tax assets/deferred income tax liabilities
The difference between the book value of some assets and liabilities and their tax bases, and the temporary difference caused bythe difference between the book value of the items that are not recognized as assets and liabilities but whose tax bases can be determinedaccording to the tax law, shall be used to recognize deferred income tax assets and deferred income tax liabilities with the balance sheetliability method.
For taxable temporary differences related to the initial recognition of goodwill and the initial recognition of assets or liabilitiesarising from transactions that are neither enterprise merger nor affect accounting profit and taxable income (or deductible loss) at thetime of occurrence, the relevant deferred income tax liabilities shall not be recognized. In addition, for taxable temporary differencesrelated to the investments of subsidiaries, associated enterprises and joint ventures, if the Group can control the time of reversal of thetemporary differences, and the temporary differences are likely not to be reversed in the foreseeable future, the relevant deferred incometax liabilities shall not be recognized. Except for the above exceptions, the Group shall recognize all other deferred income tax liabilitiesincurred in the taxable temporary differences.
Taxable temporary differences and deductible temporary differences related to the initial recognition of assets or liabilities arisingfrom a single transaction that is neither a enterprise merger nor affects accounting profits and taxable incomes (or deductible losses)shall be respectively recognized as deferred income tax liabilities and deferred income tax assets at the time of transaction. In addition,for the deductible temporary differences related to the investment of subsidiaries, associated enterprises and joint ventures, if thetemporary differences are not likely to be reversed in the foreseeable future, or it is not likely to obtain the taxable income used tooffset the deductible temporary differences in the future, the relevant deferred income tax assets shall not be recognized. Except for theabove exceptions, the Group shall recognize the deferred income tax assets arising from other deductible temporary differences to theextent that taxable income is likely to be obtained for deducting the deductible temporary differences.
For deductible losses and tax deductions that can be carried down in subsequent years, the corresponding deferred income taxassets shall be recognized with the limit of the future taxable income which is likely to be obtained for deducting the deductible lossesand tax deduction.
Deferred income tax assets and deferred income tax liabilities shall be calculated on the balance sheet date based on the applicabletax rate during the period of expected recovery of relevant assets or clearing off relevant liabilities according to tax laws.
On the balance sheet date, it is required to recheck the book value of the deferred income tax assets. If sufficient taxable incomeis not likely to be obtained for deducting the interest of deferred income tax assets in the future, the book value of deferred income taxassets shall be written down. When it is very likely to obtain enough taxable income the write-down amount shall be reversed.
(3) Income tax expenses
The income tax expenses comprise the current income tax and deferred income tax.
Moreover, the other current income tax and deferred income tax expenses or earnings shall be recognized through current profitsand losses, except for book value of goodwill which is adjusted on the basis of the deferred income tax caused by the enterprise merger,and that the current income tax and the deferred income taxes related to other comprehensive incomes or transaction or affairs of directrecording in the shareholders' equities are recognized through other comprehensive incomes or shareholders' equities.
(4) Offset of income tax
When it has the legal rights of settlement based on the net amount and it intends to make settlement based on net amount, obtainassets or offset liabilities simultaneously, the current income tax assets and current income tax liabilities of the Group shall be presentedbased on the net amount after offsetting.
When it has the legal rights of settling the current tax assets and current income tax liabilities based on the net amount, and thedeferred income tax assets and deferred income tax liabilities are related to income tax levied to the same subject of tax payment by
the same tax collection and administration department or are related to different taxpayer, but in each important period of deferredincome tax assets and liabilities reverse in the future, and when the involved taxpayer intend to settle the current income tax assets andliabilities based on the net amount or obtain assets and pay off the liabilities at the same time, the Group's deferred income tax assetsand deferred income tax liabilities shall be presented after offsetting.
31. Lease
Lease refers to a contract in which it is agreed that the lessor transfers the use right of assets to the lessee to get correspondingconsideration within a certain period.The Group evaluates whether the contract is used for lease or includes the lease on the contract commencement date. Where eitherparty thereto assigns one or more use rights of the recognized assets under its control in a certain period to get consideration, thecontract is a lease or includes a lease.In order to determine whether the contract transfers the right of controlling the use of an identified asset for a certain period oftime, the Group conducts the following assessment:
- Whether the contract involves the use of the identified asset. The identified asset may be explicitly specified by the contract, orimplicitly specified when the asset is available for use by the customer, and the asset is physically distinguishable, or in the event thatany production capacity of the asset or other part of the asset is physically indistinguishable, but it substantially represents the fullcapacity of the asset, and thus enables the customer to have access to almost all the economic benefits arising from the use of the asset.If the supplier of the asset has the substantial right of replacing the asset throughout the period of use, then the asset is not attributed toan identified asset;
- Whether the lessee has the right to acquire almost all the economic benefits arising from the use of the identified asset duringthe period of use;
- Whether the lessee has the right to direct the use of the identified asset during the period of use.
If the contract contains multiple separate leases at the same time, the lessee and lessor will split the contract and have each separatelease separately subject to accounting treatment. If the contract includes lease and non-lease parts at the same time, the lessee and thelessor will split them separately.
(1) Lessee
At the beginning date of the lease term, the Group recognizes the right-of-use asset and lease obligation of the lease. The right-of-use asset is initially measured at cost, including the initial measurement amount of the lease obligation, the lease payment paid at orbefore the beginning date of the lease term (less the amount of lease incentives already granted), the initial direct expenses incurred,and the costs expected to be incurred to demolish and remove the leased asset, restore the site where the leased asset is located orrestore the leased asset to the state agreed upon in the provisions of the lease.
The Group employs the straight-line method to depreciate right-of-use assets. If the ownership of the leased assets can bereasonably confirmed to be obtained upon expiry of the lease term, the depreciation of leased assets shall be withdrawn by the Groupduring the remaining service life thereof; Otherwise, the leased asset is depreciated during the shorter of the lease term and theremaining service life of the leased asset. Impairment provisions for right-of-use assets shall be made in accordance with the accountingpolicies described in Note V. 22 "Impairment of long-term assets".
The lease obligation is initially measured at the present value of the lease payment that has not been paid at the beginning date ofthe lease term, and the discount rate is the implicit rate of the lease. If the implicit rate of the lease cannot be determined, the incrementalborrowing rate of the Group shall be adopted as the discount rate.
The Group calculates the interest expense of the lease obligation for each period of the lease term at a fixed periodic interest rate,which is recognized through current profits and losses or relevant asset costs. The variable lease payment not recognized throughmeasurement of lease obligations will be recognized through current profits and losses or relevant asset costs when it actually occurs.
In case of any of following circumstances after the beginning date of the lease term, the Group will remeasure lease obligationsat the present value of the lease payment after any change:
-Where the amount payable anticipated changes according to the guaranteed residual value;- Where the index or ratio used for recognizing the lease payment changes;- Where there is a change in the Group's assessment results of the option of purchase, renewal option or option of termination oflease or the actual exercising of the termination of the renewal option or option of termination of lease is inconsistent with the originalassessment result.
When the lease obligation is measured anew, the Group will adjust the book value of right-of-use assets accordingly. If the bookvalue of the right-of-use asset has been reduced to zero, but the lease obligation still needs to be further reduced, the Group will includethe remaining amount in the current profits and losses.The Group chooses not to confirm the right-of-use asset and lease obligation for short-term lease (with a lease term not exceeding12 months) and low-value asset lease (the value of a single leased asset is lower when it is a brand new asset) as well as includes relatedlease payment into the current profits and losses or relevant asset costs in each period during the lease term pursuant to the straight-line method.
(2) Lessor
At the beginning date of the lease term, the Group divides leases into financing and operating leases. Financing lease refers to alease in which almost all the risks and rewards related to the ownership of the leased asset are essentially transferred, regardless ofwhether the ownership is finally transferred or not. The operating lease refers to the other leases except for the financing lease.
The Group, as the lessor, provides classification of subleases based on the right-of-use assets created by the original lease ratherthan the underlying assets of the original lease. If the original lease is a short-term lease and the Group chooses to apply the simplifiedtreatment of the above short-term lease to the original lease, then the Group classifies the sublease as an operating lease.
Under financing leases, at the beginning date of the lease term, the Group confirms financing lease receivables for financing leaseand derecognizes the financial leasing assets. The Group regards the net investment in a lease as the entry value of financing leasereceivables at the time of initial measurement of financing lease receivables. The net investment in a lease is the sum of the presentvalue of unguaranteed residual value and lease receipt not received yet on the beginning date of the lease term which is subject todiscounting at the implicit rate in the lease term.
The Group calculates and recognizes the Interest revenue in each period within the lease term according to a fixed periodic rate.The derecognition and impairment of financing lease receivables shall be treated in accordance with the accounting policies describedin Note V. 10 "Financial Instruments" and 11 "Financial Assets Impairment". The variable lease payment which is not recognizedthrough net lease investment shall be recognized through current profits and losses when it actually occurs.
The lease receipts of operating lease are confirmed as rent revenue in each period within the lease term in light of straight-linemethod. The Group capitalizes the initial direct expenses incurred in connection with operating leases, apportioned them over the leaseterm on the same basis as the rent revenue recognition, and recorded into the current profits and losses by stages. The variable leasepayment which is not recognized through lease receipt shall be recognized through current profits and losses when it actually occurs.
32. Related parties
If one party controls or jointly controls the other party or imposes significant impact on the other party, and two or more partiesare controlled or jointly controlled by one party, these parties are related parties. Related party can be individual or enterprise. Anenterprise that is only controlled by the state but does not have other related party relationships does not constitute a related party.
In addition, the Company also determines the Group or related parties of the Company in accordance with the AdministrativeMeasures for the Disclosure of Information of Listed Companies promulgated by the CSRC.
33. Segment report
See Note XVIII, 1 "Segment Information" for details of accounting policies related to segment reporting for details.
34. Other important accounting policies and estimates
(1) Repurchased shares
If the Group reduces its capital by acquiring the stocks of the Company with approval, then it shall reduce equities according tothe total amount of the face value of cancelled stocks, and adjust owners' equities according to the difference between the price paid topurchase stocks back (including transaction cost) and the face value of stocks. The part exceeding the total face value shall be used towrite down capital reserve (share capital premium), surplus reserve and undistributed profit. If the price is lower than the total facevalue, then the part lower shall be increased with capital reserve (share capital premium).Shares repurchased by the Group shall be managed as treasury shares before they are cancelled or transferred; total expenditureof repurchased shares shall be transferred as the cost of treasury shares.
When treasury shares are transferred, the part higher than their revenue shall be transferred to increase capital reserve (sharecapital premium); the part lower than the cost of treasury shares shall write down capital reserve (share capital premium), surplusreserve and undistributed profit in sequence.
If the Group repurchase shares for the reason of equity incentive, it shall treat all expenses on shares repurchase as treasury shareswhile repurchasing and make registration for future reference.
(2) Fair value measurement
Fair value, refers to the price that market participant can obtain or needs to pay after selling an asset or transferring a liability,among the orderly transactions made on the measurement date. The Group measures relevant asset or liability and considers thecharacteristics of this asset or liability at fair value; supposes the selling of assets or transfer of liabilities by market participant areorderly transaction under current market conditions; supposes the orderly selling of assets or transfer of liabilities are carried out in themain market of relevant assets or liabilities; supposes the transaction is made in the most favorable market for relevant assets orliabilities when there is no main market. The Group adopts the assumptions that market participants use to maximum their economicbenefits when they price assets or liabilities.
The Group judges whether the fair value at initial recognition equals to its transaction price according to transaction nature andthe characteristics of relevant assets or liabilities; if the transaction price is not equal to the fair value, relevant gains or losses will berecognized through current profits and losses, unless otherwise specified by relevant accounting standards.
The Group adopts the valuation technique that is applicable to the current situation and has enough available data and otherinformation to support. Mainly used valuation techniques include market approach, income approach and cost method. In theapplication of valuation techniques, relevant observable input values shall be used first, and unobserved input values can only be usedwhen relevant observable input values cannot be obtained or it is not feasible to obtain them.
Input values used by the Group for fair value measurement is divided into 3 levels. The first level of input values will be usedfirst, and then the second level and the third level. First level of input values are the quotations of same assets or liabilities that can beobtained on the measurement date and are not adjusted in the active market; the second level of input values are the direct or indirectobservable input values of relevant assets or liabilities other than the first level of input values; the third level of input values are theunobservable input values of relevant assets or liabilities.
The Group measures non-financial assets with fair value, considers market participant's ability to use this asset in the best way togenerate economic benefits, or the ability to sell this asset to other market participants who can use this asset in the best way to generateeconomic benefits. To measure a liability with fair value, the Group supposes this liability is transferred to other market participantson the measurement date, and further exists after transfer, and the market participant, who is the transferee, performs obligations. Tomeasure one's own equity instrument with fair value, suppose this equity instrument is transferred to other market participants on themeasurement data, and further exits after transfer, and the market participant, as the transferee, obtains relevant rights to this instrumentand undertakes corresponding obligations.
35. Change of important accounting policies and estimates
(1) Change of important accounting policies
? Applicable □ Not applicableThe Group implemented the relevant provisions and guidelines of the Enterprise Accounting Standards issued by the Ministry ofFinance in recent years in 2023.The provision in Interpretation No. 16 of the Accounting Standards for Business Enterprises (CK [2022] No.31) ("InterpretationNo. 16"), that is, the provision "regarding the accounting treatment of non-applicability of initial recognition exemption to the deferredincome tax related to assets and liabilities arising from individual transactions"According to this provision, for taxable temporary differences and deductible temporary differences arising from initialrecognition of assets and liabilities in individual transactions that do not fall in the definition of enterprise merger and do not affectaccounting profits or taxable income (or deductible losses) at the time of transaction and whose initial recognition of assets andliabilities results in equal taxable temporary differences and deductible temporary differences, Supor respectively recognizes thecorresponding deferred income tax liabilities and deferred income tax assets at the time of transaction in line with relevant regulationssuch as the Accounting Standards for Enterprises No.18 - Income Tax, and no longer recognizes deferred income tax liabilities ordeferred income tax assets based on the net amount of taxable temporary differences and deductible temporary differences accrued.The adoption of the requirements has not had a significant impact on the financial condition and operating results of the Group.
(2) Change of important accounting estimates
□ Applicable ? Not applicable
(3) First implementation of new accounting standards adjusts the related items in financial statements since 2023
□ Applicable ? Not applicable
VI. Taxes
1. Main taxes and tax rates
Tax | Tax base | Tax rate |
VAT | The taxable revenue from sales of commodities or rendering of services | Taxable revenue is calculated at output tax rates of 0, 6%, 9%, and 13%, and VAT is calculated based on the difference after deducting the input tax allowable for the current period. |
Urban maintenance and construction tax | VAT payable | 7% |
Enterprise income tax | Taxable income | Corporate income tax rate is 25%. Shaoxing Supor, Zhejiang WMF and Hainan Supor E-Commerce Company are taxed at a preferential tax rate of 15%. Wuhan Recycling and Shanghai Marketing are taxed at a preferential tax rate of 20%. Overseas subsidiary Indonesian Company is taxed at a 22% rate, Supor Vietnam and AFS are taxed at 20%, and SEADA is taxed at 17%. |
Education surcharge | VAT payable | 3% |
Local education surcharge | VAT payable | 2% |
Housing property tax | 1.2% of the residual value after deducting 30% of the original value of the property is calculated and paid in case of ad valorem; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of rent revenue. | 1.2%, 12% |
2. Tax preferences
Pursuant to GKH Zi [2020] No. 32 document, Shaoxing Supor and Zhejiang WMF renewed the hi-tech enterprise qualification in2022 and is entitled to enjoy the preferential enterprise income tax rate of 15% for the three-year period starting from January 1, 2022.According to the Enterprise Income Tax Law of the People's Republic of China and its implementation regulations, the Notice onPreferential Policies for Enterprise Income Tax in Hainan Free Trade Port (CS [2020] No.31) as well other provisions, businessincome tax will be levied at a rate of 15% for encouraged industrial enterprises registered and substantially operating in the HainanFree Trade Port from January 1, 2020 to December 31, 2024. Meeting the e-commerce in the encouraged industries catalogue, HainanSupor E-Commerce Company applies the preferential tax rate of 15% in 2023.Pursuant to the Announcement of the Ministry of Finance and the State Taxation Administration on the Preferential Income TaxPolicies for Micro and Small Enterprises and Individual Industrial and Commercial Households (CS [2023] No.6) on March 26, 2023,from January 1, 2023 to December 31, 2024, the portion of the annual taxable income of small and micro profit enterprises that doesnot exceed RMB 1 million shall be taken into the taxable income at the ratio of 25%, and the enterprise income tax payable thereofshall be settled at the rate of 20%. Meanwhile, according to the Announcement of the Ministry of Finance and the State TaxationAdministration on Further Implementing the Preferential Income Tax Policies for Micro and Small Enterprises (CS [2022] No. 13),from January 1, 2022 to December 31, 2024, for the part of the annual taxable income of small and low-profit enterprises that exceedsRMB 1 million but less than RMB 3 million, a reduced rate of 25% shall be applied, and the enterprise income tax shall be paid at atax rate of 20%. Among which, Wuhan Recycling and Shanghai Marketing meet the standards of small and low-profit enterprises in2023, therefore the preferential tax rate at 20% is applicable in 2023.
VII. Notes to Items of Consolidated Financial Statements
1. Monetary capital
Unit: RMB
Item | Closing balance | Opening balance |
Cash on hand | 62,594.14 | 56,591.47 |
Cash in bank | 2,964,417,369.53 | 3,215,677,104.23 |
Other monetary capitals | 583,797,478.77 | 347,407,212.05 |
Total | 3,548,277,442.44 | 3,563,140,907.75 |
Including: deposited overseas | 61,122,895.90 | 207,979,588.92 |
Other remarks:
1) As at December 31, 2023, the restricted bank deposit is the cancelled frozen amount of RMB 30,423.72 (December 31, 2022: RMB8,541.04) in the branch company's bank account, there is no frozen amount (December 31, 2022: RMB 82,189.64) in the bank accountfor change of judicial person for industrial and commercial purpose, and there is no term deposit amount (December 31, 2022: RMB12,546,000.00) pledged for issuing bank acceptance bills, and the remaining RMB 2,964,386,945.81 in bank deposits is not restrictedfor use,among them, more than three months term deposits of RMB 1,607,020,342.48.
2) As at December 31, 2023, other monetary capitals include the restricted acceptance bill security of RMB 476,860,000.00 (December31, 2022: RMB 254,129,233.86), e-commerce platform security of RMB 613,739.88 (December 31, 2022: RMB 975,570.02), advancepayment financing deposit security of RMB 58,000,000.00 (December 31, 2022: RMB 58,000,000.00), and unrestricted monetarycapital of RMB 48,323,738.89 (December 31, 2022: RMB 34,302,408.17) in Alipay wallet, JD pay, Douyin wallet, securities settlementaccount, futures settlement account, and Youzan account, etc.
3) As at December 31, 2023, the monetary capital deposited by Supor in Vietnam is equivalent to RMB 44,335,548.85 (December 31,2022: equivalent to RMB 193,083,117.24). The monetary capital deposited by Supor in Singapore is equivalent to RMB 4,491,068.45(December 31, 2022: equivalent to RMB 3,754,734.88). The monetary capital deposited by Supor in Indonesia is equivalent to RMB12,296,278.60 (December 31, 2022: equivalent to RMB 11,141,736.80).
2. Transactional financial assets
Unit: RMB
Item | Closing balance | Opening balance |
Financial assets at fair value through current profits and losses | 351,137,787.54 | 431,382,527.79 |
Including: | ||
- Short-term financial products | 351,137,787.54 | 431,382,527.79 |
Total | 351,137,787.54 | 431,382,527.79 |
Other remarks:
As at December 31, 2023, the financial assets at fair value through current profits and losses are the financial products purchased bythe Company, amounting to RMB 350,000,000.00 (December 31, 2022: RMB 430,000,000.00). These financial products with floatingincome, and linked to interest rates and exchange rates, etc., and the corresponding gains from changes in fair value, i.e RMB1,137,787.54 (December 31, 2022: RMB 1,382,527.79), are recognized at the end of the current period.
3. Notes receivable
(1) Details on categories
Unit: RMB
Item | Closing balance | Opening balance |
Bank acceptance bill | 15,311,935.98 | 27,325,952.95 |
Total | 15,311,935.98 | 27,325,952.95 |
(2) Classified disclosure by the bad debt provision method
Unit: RMB
Categories | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Notes receivable for provision for bad debts | 15,311,935.98 | 100.00% | 15,311,935.98 | 27,325,952.95 | 100.00% | 27,325,952.95 |
made on the basis of portfolio | ||||||||||
Including: | ||||||||||
Portfolio:Bank acceptance bill | 15,311,935.98 | 100.00% | 15,311,935.98 | 27,325,952.95 | 100.00% | 27,325,952.95 | ||||
Total | 15,311,935.98 | 100.00% | 15,311,935.98 | 27,325,952.95 | 100.00% | 27,325,952.95 |
Provision for bad debts made on a portfolio basis: 0
If yes, a provision for bad debts for notes receivable shall be accrued according to the general model of expected credit loss:
□ Applicable ? Not applicable
(3) Provision for bad debts made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
Categories | Opening balance | Amount of changes in current period | Closing balance | |||
Accrued | Collected or reversed | Written off | Others | |||
Bank acceptance bill |
Wherein, important amounts of provision for bad debts collected or reversed in the current period:
□ Applicable ? Not applicable
(4) Notes receivables that the Company has pledged at the end of the period
As of December 31, 2023, the Group had no notes receivable pledged (December 31, 2022: None).
(5) Endorsed or discounted notes receivable undue at the balance sheet date at the end of the year
Unit: RMB
Item | Closing balance derecognized | Closing balance not derecognized |
Bank acceptance bill | 10,761,655.33 | |
Total | 10,761,655.33 |
Other remarks:
By December 31, 2023, Supor's undue and endorsed notes receivable of RMB 10,761,655.33 (December 31, 2022: RMB22,383,800.87). have not been recognized as notes transferred to the suppliers to settle the amount payable. This is mainly becausethat, according to the management, the risks and remunerations attached to the ownership of the notes have not been actually transferred.The book values of the said undue notes receivable approximate their fair values. The said undue notes receivable will get maturewithin 1 year.
(6) Notes the Company transfers to accounts receivable due to the drawer's failure to perform the contractat the end of the periodAs at December 31, 2023, the Group has not any notes transferred to accounts receivable due to non-performance of drawers.(December 31, 2022: None)
4. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Ages | Ending book balance | Beginning book balance |
Within 1 year (including 1 year) | 2,956,340,005.74 | 2,003,575,860.86 |
1-2 years | 7,090,033.51 | 3,735,332.58 |
2-3 years | 1,283,949.52 | 255,548.22 |
Over 3 years | 880,404.97 | 753,742.79 |
3-4 years | 127,479.68 | 96,637.91 |
4-5 years | 96,637.91 | 21,770.61 |
Over 5 years | 656,287.38 | 635,334.27 |
Total | 2,965,594,393.74 | 2,008,320,484.45 |
(2) Classified disclosure by the bad debt provision method
Unit: RMB
Categories | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Accounts receivable for provision for bad debts made on an individual basis | 195,920.38 | 0.01% | 195,920.38 | 100.00% | 41,463.78 | 0.00% | 41,463.78 | 100.00% | ||
Accounts receivable for provision for bad debts made on the basis of portfolio | 2,965,398,473.36 | 99.99% | 107,151,117.33 | 3.61% | 2,858,247,356.03 | 2,008,279,020.67 | 100.00% | 81,760,902.29 | 4.07% | 1,926,518,118.38 |
Including: | ||||||||||
Portfolio 1: age portfolio | 2,843,635,733.09 | 95.89% | 107,029,354.59 | 3.76% | 2,736,606,378.50 | 1,929,487,537.03 | 96.07% | 81,682,110.81 | 4.23% | 1,847,805,426.22 |
Portfolio 2: low-risk portfolio | 121,762,740.27 | 4.10% | 121,762.74 | 0.10% | 121,640,977.53 | 78,791,483.64 | 3.93% | 78,791.48 | 0.10% | 78,712,692.16 |
Total | 2,965,594,393.74 | 100.00% | 107,347,037.71 | 3.62% | 2,858,247,356.03 | 2,008,320,484.45 | 100.00% | 81,802,366.07 | 4.07% | 1,926,518,118.38 |
Provision for bad debts made on an individual basis: RMB195,920.38
Unit: RMB
Name | Opening balance | Closing balance | ||||
Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion | Reasons | |
Customer A | 41,463.78 | 41,463.78 | 41,463.78 | 41,463.78 | 100.00% | It is not expected to be recovered, so the provision for bad debts is fully accrued. |
Customer B | 75,662.72 | 75,662.72 | 100.00% | It is not expected to be recovered, so the provision for bad debts is fully accrued. | ||
Customer C | 78,793.88 | 78,793.88 | 100.00% | It is not expected to be recovered, so the provision for bad debts is fully accrued. | ||
Total | 41,463.78 | 41,463.78 | 195,920.38 | 195,920.38 |
Categories for bad debts provision: Portfolio 1Provision for bad debts made on a portfolio basis: RMB 107,029,354.59
Unit: RMB
Name | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion | |
Within 1 year (including 1 year) | 2,834,577,265.47 | 105,598,288.66 | 3.73% |
1-2 years (including 2 years) | 7,090,033.51 | 567,202.68 | 8.00% |
2-3 years (including 3 years) | 1,283,709.91 | 192,556.49 | 15.00% |
3-4 years (including 4 years) | 17,461.50 | 8,730.75 | 50.00% |
4-5 years (including 5 years) | 23,433.47 | 18,746.78 | 80.00% |
Over 5 years | 643,829.23 | 643,829.23 | 100.00% |
Total | 2,843,635,733.09 | 107,029,354.59 |
Explanation on the basis for determining such portfolio:
The expected credit loss rate is calculated upon the experience in actual credit loss, and adjusted based on the difference between theeconomy during the historic period of data collection, the current economy and the economy during the duration expected by Supor.If yes, a provision for bad debts for accounts receivable shall be accrued according to the general model of expected credit loss:
□ Applicable ? Not applicable
(3) Provision for bad debts made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
Categories | Opening balance | Amount of changes in current period | Closing balance | |||
Accrued | Collected or reversed | Written off | Others | |||
Provision for bad debts for accounts receivable | 81,802,366.07 | 25,670,079.70 | -65,161.50 | -60,246.56 | 107,347,037.71 |
Total | 81,802,366.07 | 25,670,079.70 | -65,161.50 | -60,246.56 | 107,347,037.71 |
Decreased provision for bad debts of RMB 60,246.56 for conversion difference in foreign currency statement caused by the change inexchange rate.
(4) Accounts receivable actually written off in current period
Unit: RMB
Item | Amount |
Accounts receivable actually written off | 65,161.50 |
Including significant accounts receivable written off:
None
(5) Accounts receivable and contract asset details of the top 5 closing balances by debtors
Unit: RMB
Entity name | Closing balance of accounts receivable | Closing balance of contract asset | Accounts receivable and closing balance of contract asset | Proportion in the sum of accounts receivable and closing balance of contract asset | Closing balance of impairment provision for bad debts for accounts receivable and impairment provision for contract assets |
SEB S.A. and its subsidiaries | 1,807,452,286.57 | 1,807,452,286.57 | 60.95% | 54,225,331.16 | |
Customer D | 418,821,362.13 | 418,821,362.13 | 14.12% | 21,014,332.83 | |
Customer E | 108,893,639.26 | 108,893,639.26 | 3.67% | 108,893.64 | |
Customer F | 49,873,457.58 | 49,873,457.58 | 1.68% | 2,496,277.88 | |
Customer G | 45,458,471.29 | 45,458,471.29 | 1.53% | 2,272,923.56 | |
Total | 2,430,499,216.83 | 2,430,499,216.83 | 81.95% | 80,117,759.07 |
5. Receivables financing
(1) Classification of receivables financing
Unit: RMB
Item | Closing balance | Opening balance |
Notes receivable | 363,532,765.35 | 235,957,044.34 |
Total | 363,532,765.35 | 235,957,044.34 |
Other remarks:
The Group endorses or discounts certain bank acceptance bills by the needs of day-to-day fund management. Taking into account ofthe amount and frequency of endorsement or discount of bank acceptance bills, the Group determines that the objective of such businessmodel is to receive contractual cash flows and sell the notes receivable simultaneously, and therefore, such notes receivable are
classified into financial assets measured at the fair value with their changes included into other comprehensive incomes, and presentedas receivables financing.As at December 31, 2023, the Group had no receivables financing pledged. (December 31, 2022: None).
(2) Endorsed or discounted receivables financing undue at the balance sheet date at the end of the year
Unit: RMB
Item | Closing balance derecognized | Closing balance not derecognized |
Bank acceptance bill | 3,449,160,781.19 | |
Total | 3,449,160,781.19 |
Other remarks:
In order to settle part of the payables, the Group endorses the equal amount of undue notes receivable to the suppliers, and themanagement of the Group considers that certain undue notes meet the conditions, that is, almost all risks and remuneration pertainingto ownership have been transferred and meanwhile the current obligations of the relevant payables have been fully discharged, thus therelevant notes and payables are derecognized. The possible greatest loss undertaken by the Group for the continued involvement thereinis the amount of the undue notes receivable endorsed by the Group to suppliers. The said undue notes receivable will get mature within1 year.
6. Other receivables
Unit: RMB
Item | Closing balance | Opening balance |
Other receivables | 16,126,721.38 | 16,373,697.26 |
Total | 16,126,721.38 | 16,373,697.26 |
(1) Other receivables
1) Other receivables categorized by nature
Unit: RMB
Nature of receivables | Ending book balance | Beginning book balance |
Deposit as security | 11,391,814.36 | 10,692,374.84 |
Temporary payment receivable | 6,972,323.05 | 6,434,897.15 |
Personal deposit | 1,457,137.01 | 2,382,649.26 |
Tax refund receivable | 996,927.07 | 1,237,388.33 |
Total | 20,818,201.49 | 20,747,309.58 |
2) Disclosure by aging
Unit: RMB
Ages | Ending book balance | Beginning book balance |
Within 1 year (including 1 year) | 12,043,858.73 | 13,205,781.19 |
1-2 years | 3,460,785.69 | 3,187,388.71 |
2-3 years | 2,570,919.30 | 1,104,417.30 |
Over 3 years | 2,742,637.77 | 3,249,722.38 |
3-4 years | 688,905.05 | 647,421.24 |
4-5 years | 251,762.10 | 848,436.61 |
Over 5 years | 1,801,970.62 | 1,753,864.53 |
Total | 20,818,201.49 | 20,747,309.58 |
3) Classified disclosure by the bad debt provision method
? Applicable □ Not applicable
Unit: RMB
Categories | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Other receivables for provision for bad debts made on an individual basis | 1,190,578.89 | 5.72% | 1,190,578.89 | 100.00% | ||||||
Other receivables for provision for bad debts made on the basis of portfolio | 19,627,622.60 | 94.28% | 3,500,901.22 | 17.84% | 16,126,721.38 | 20,747,309.58 | 100.00% | 4,373,612.32 | 21.08% | 16,373,697.26 |
Including: | ||||||||||
Portfolio 1: age portfolio | 18,630,695.53 | 89.49% | 3,500,901.22 | 18.79% | 15,129,794.31 | 19,509,921.25 | 94.04% | 4,373,612.32 | 22.42% | 15,136,308.93 |
Portfolio 2: low-risk portfolio | 996,927.07 | 4.79% | 996,927.07 | 1,237,388.33 | 5.96% | 1,237,388.33 | ||||
Total | 20,818,201.49 | 100.00% | 4,691,480.11 | 22.54% | 16,126,721.38 | 20,747,309.58 | 100.00% | 4,373,612.32 | 21.08% | 16,373,697.26 |
Provision for bad debts made on an individual basis: RMB1,190,578.89
Unit: RMB
Name | Opening balance | Closing balance | ||||
Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion | Reasons | |
Customer H | 1,187,578.89 | 1,187,578.89 | 100.00% | It is not expected to be recovered, so the provision for bad debts is fully accrued. | ||
Customer I | 3,000.00 | 3,000.00 | 100.00% | It is not expected to be recovered, so the provision for bad debts is fully accrued. | ||
Total | 1,190,578.89 | 1,190,578.89 |
Categories for bad debts provision: Portfolio 1
Provision for bad debts made on a portfolio basis: RMB 3,500,901.22
Unit: RMB
Name | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion | |
Within 1 year (including 1 year) | 9,859,352.77 | 492,967.64 | 5.00% |
1-2 years (including 2 years) | 3,460,785.69 | 276,862.86 | 8.00% |
2-3 years (including 3 years) | 2,570,919.30 | 385,637.90 | 15.00% |
3-4 years (including 4 years) | 688,905.05 | 344,452.52 | 50.00% |
4-5 years (including 5 years) | 248,762.10 | 199,009.68 | 80.00% |
Over 5 years | 1,801,970.62 | 1,801,970.62 | 100.00% |
Total | 18,630,695.53 | 3,500,901.22 |
A provision for bad debts that are accrued according to the general model of the expected credit loss:
Unit: RMB
Provision for bad debts | Phase I | Phase II | Phase III | Total |
Expected credit loss in future 12 months | Expected credit loss in the entire duration (without credit impairment) | Expected credit loss in the entire duration (credit impairment) | ||
Balance on January 1, 2023 | 4,373,612.32 | 4,373,612.32 | ||
Balance on January 1, 2023 in the current period | ||||
Accrued | 1,190,578.89 | 1,190,578.89 | ||
Write-off | -870,404.29 | -870,404.29 | ||
Others | -2,306.81 | -2,306.81 | ||
Balance on December 31, 2023 | 3,500,901.22 | 1,190,578.89 | 4,691,480.11 |
Other remarks:
Decreased provision for bad debts of RMB 2,306.81 for conversion difference in foreign currency statement caused by the change inexchange rate.Changes in book balance of loss provision due to significant changes in the current period
□ Applicable ? Not applicable
4) Provision for bad debts made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
Categories | Opening | Amount of changes in current period | Closing balance |
balance | Accrued | Collected or reversed | Write-off or charge-off | Others | ||
Provision for bad debts of other receivables | 4,373,612.32 | 1,190,578.89 | -870,404.29 | -2,306.81 | 4,691,480.11 | |
Total | 4,373,612.32 | 1,190,578.89 | -870,404.29 | -2,306.81 | 4,691,480.11 |
5) Other receivables of the top 5 closing balances by debtors
Unit: RMB
Entity name | Nature of receivables | Closing balance | Ages | Proportion in the total closing balance of other receivables | Closing balance of provision for bad debts |
Customer J | Temporary paragraph receivable/deposit as security | 1,422,681.47 | Within 1 year, 1-4 years | 6.83% | 249,934.07 |
Customer H | Temporary payment receivable | 1,187,578.89 | Within 1 year | 5.70% | 1,187,578.89 |
Customer K | Deposit as security | 1,180,000.00 | 2-3 years | 5.67% | 177,000.00 |
Customer L | Deposit as security | 1,000,000.00 | 1-2 years | 4.80% | 80,000.00 |
Tax refund receivable | Tax refund receivable | 996,927.07 | Within 1 year | 4.79% | |
Total | 5,787,187.43 | 27.79% | 1,694,512.96 |
7. Advance payment
(1) Listing by ages
Unit: RMB
Ages | Closing balance | Opening balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 190,478,767.90 | 98.61% | 335,655,809.04 | 98.83% |
1-2 years | 2,453,401.67 | 1.27% | 3,123,427.28 | 0.92% |
2-3 years | 123,148.33 | 0.06% | 665,000.00 | 0.20% |
Over 3 years | 114,137.61 | 0.06% | 165,310.70 | 0.05% |
Total | 193,169,455.51 | 339,609,547.02 |
(2) Advance payment of the top 5 closing balances by prepayment objects
Unit: RMB
Entity name | Book balance | Proportion in the balance of advance payment |
Supplier A | 24,117,310.00 | 12.49% |
Supplier B | 22,743,320.00 | 11.77% |
Supplier C | 18,541,281.80 | 9.60% |
Supplier D | 13,047,590.11 | 6.75% |
Supplier E | 12,707,184.97 | 6.58% |
Subtotal | 91,156,686.88 | 47.19% |
Other remarks:
Aging is calculated from the date of confirmation of the advance payment.
8. Inventories
Whether the Company needs to comply with the disclosure requirements of the real estate industryNo
(1) Inventory classification
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Inventory depreciation reserves or impairment provision for contract performance cost | Book value | Book balance | Inventory depreciation reserves or impairment provision for contract performance cost | Book value | |
Raw materials | 339,021,663.87 | 8,468,573.73 | 330,553,090.14 | 446,471,515.87 | 14,369,922.27 | 432,101,593.60 |
Unfinished products | 93,073,750.61 | 93,073,750.61 | 84,088,800.88 | 84,088,800.88 | ||
Finished products | 1,739,751,597.38 | 16,482,797.36 | 1,723,268,800.02 | 1,885,938,291.03 | 19,558,744.71 | 1,866,379,546.32 |
Low value consumables | 108,345,465.67 | 82,857.41 | 108,262,608.26 | 101,274,579.44 | 379,610.26 | 100,894,969.18 |
Packing materials | 7,525,138.28 | 7,525,138.28 | 11,457,946.44 | 11,457,946.44 | ||
Total | 2,287,717,615.81 | 25,034,228.50 | 2,262,683,387.31 | 2,529,231,133.66 | 34,308,277.24 | 2,494,922,856.42 |
(2) Inventory depreciation reserves and impairment provision for contract performance cost
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance | ||
Accrued | Others | Reversal or write-off | Others | |||
Raw materials | 14,369,922.27 | 2,557,307.61 | 8,430,970.38 | 27,685.77 | 8,468,573.73 | |
Finished products | 19,558,744.71 | 11,285,511.03 | 66,824.36 | 14,428,282.74 | 16,482,797.36 | |
Low value consumables | 379,610.26 | 82,857.41 | 379,610.26 | 82,857.41 | ||
Total | 34,308,277.24 | 13,925,676.05 | 66,824.36 | 23,238,863.38 | 27,685.77 | 25,034,228.50 |
Other remarks:
There is an increased inventory depreciation reserves of RMB 39,138.59 for conversion difference in foreign currency statement causedby the change in exchange rate.
Item | Closing balance | Opening balance | ||||
Book balance | Inventory depreciation reserves | Provision for Inventory depreciation | Book balance | Inventory depreciation reserves | Provision for Inventory depreciation | |
Raw materials | 339,021,663.87 | 8,468,573.73 | 2.50% | 446,471,515.87 | 14,369,922.27 | 3.22% |
Finished products | 1,739,751,597.38 | 16,482,797.36 | 0.95% | 1,885,938,291.03 | 19,558,744.71 | 1.04% |
Low value consumables | 108,345,465.67 | 82,857.41 | 0.08% | 101,274,579.44 | 379,610.26 | 0.37% |
Total | 2,187,118,726.92 | 25,034,228.50 | 2,433,684,386.34 | 34,308,277.24 |
9. Non-current assets due within one year
Unit: RMB
Item | Closing balance | Opening balance |
Other debt investments due within one year | 285,783,958.92 | 32,157,534.25 |
Total | 285,783,958.92 | 32,157,534.25 |
(1) Debt investment due within one year
□ Applicable ? Not applicable
(2) Other debt investment due within one year
? Applicable □ Not applicable
1) Other debt investments due within one year
Unit: RMB
Item | Opening balance | Interest receivable | Interest adjustment | Fair value changes in the current period | Closing balance | Cost | Accumulated fair value changes | Impairment provisions that are cumulatively determined in other comprehensive incomes | Remarks |
Negotiable certificates of deposit | 32,157,534.25 | 25,590,193.48 | 193,765.44 | 285,783,958.92 | 260,000,000.00 | ||||
Total | 32,157,534.25 | 25,590,193.48 | 193,765.44 | 285,783,958.92 | 260,000,000.00 |
10. Other current assets
Unit: RMB
Item | Closing balance | Opening balance |
Return cost receivable | 15,285,358.91 | 14,266,301.12 |
Creditable VAT | 111,403,625.69 | 49,236,636.79 |
Term deposit | 381,101,095.89 | |
Others | 15,734,711.62 | 6,381,982.96 |
Total | 142,423,696.22 | 450,986,016.76 |
11. Other debt investments
(1) Situation of other debt investment
Unit: RMB
Item | Opening balance | Interest receivable | Interest adjustment | Fair value changes in the current period | Closing balance | Cost | Accumulated fair value changes | Impairment provisions that are cumulatively determined in other comprehensive incomes | Remarks |
Negotiable certificates of deposit | 1,056,952,424.68 | 61,494,063.11 | -187,720.63 | 951,306,342.48 | 890,000,000.00 | ||||
Minus: Part due within one year | -32,157,534.25 | -25,590,193.48 | -193,765.44 | -285,783,958.92 | -260,000,000.00 | ||||
Total | 1,024,794,890.43 | 35,903,869.63 | -381,486.07 | 665,522,383.56 | 630,000,000.00 |
(2) Important other debt investment at the end of the period
Unit: RMB
Other creditors' rights items | Closing balance | Opening balance | ||||||||
Face value | Coupon rate | Effective interest rate | Expiry date | Overdue principal | Face value | Coupon rate | Effective interest rate | Expiry date | Overdue principal | |
Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 200,000,000.00 | 3.55% | 3.43% | 2025-04-21 | 200,000,000.00 | 3.55% | 3.43% | 2025-04-21 | ||
Shaoxing Supor Housewares - China Guangfa Bank negotiable certificates of deposit | 150,000,000.00 | 3.35% | 3.21% | 2025-08-04 | ||||||
Shaoxing Supor - Bank of China negotiable certificates of deposit | 140,000,000.00 | 3.35% | 3.32% | 2025-03-03 | ||||||
Total | 340,000,000.00 | 350,000,000.00 |
12. Long-term equity investment
Unit: RMB
Invested unit | Opening balance (book value) | Opening balance of impairment provision | Increase/decrease | Closing balance (book value) | Closing balance of impairment provision | |||||||
Investment increased | Investment decreased | Investment profit or loss recognized by equity method | Adjustment in other comprehensive income | Changes in other equity | Cash dividend/profit declared for distribution | Accrued impairment provision | Others | |||||
I. Joint venture | ||||||||||||
II. Associated enterprises | ||||||||||||
Wuhan Anzai Cookware Co., Ltd. | 62,196,139.53 | -517,155.18 | 61,678,984.35 | |||||||||
Subtotal | 62,196,139.53 | -517,155.18 | 61,678,984.35 | |||||||||
Total | 62,196,139.53 | -517,155.18 | 61,678,984.35 |
The recoverable amount is determined as the net amount of the fair value less disposal expenses
□ Applicable ? Not applicable
The recoverable amount is determined as the present value of estimated future cash flow of assets
□ Applicable ? Not applicable
13. Fixed assets
Unit: RMB
Item | Closing balance | Opening balance |
Fixed assets | 1,243,210,689.64 | 1,303,075,391.03 |
Total | 1,243,210,689.64 | 1,303,075,391.03 |
(1) Fixed assets
Unit: RMB
Item | Buildings and structures | General equipment | Special equipment | Transport facilities | Total |
I. Original book value: | |||||
1. Opening balance | 1,223,555,061.57 | 296,185,619.01 | 970,045,460.97 | 32,943,632.66 | 2,522,729,774.21 |
2. Increase | 15,254,301.96 | 20,812,950.05 | 43,960,772.50 | 4,119,896.35 | 84,147,920.86 |
(1) Acquisition | 3,885,864.04 | 20,174,238.28 | 36,665,545.92 | 4,119,896.35 | 64,845,544.59 |
(2) Transferred in from construction in progress | 11,368,437.92 | 638,711.77 | 7,295,226.58 | 19,302,376.27 | |
(3) Increase from enterprise merger | |||||
3. Decrease | 4,179,352.03 | 21,612,225.91 | 48,057,938.09 | 2,888,015.40 | 76,737,531.43 |
(1) Disposal or scrapping | 4,179,352.03 | 21,537,004.66 | 47,799,384.47 | 2,888,015.40 | 76,403,756.56 |
(2) Transfer into construction in progress | 75,221.25 | 258,553.62 | 333,774.87 | ||
4. Impact of change in exchange rate | -389,600.22 | -93,480.07 | -798,344.72 | -1,352.91 | -1,282,777.92 |
5. Closing balance | 1,234,240,411.28 | 295,292,863.08 | 965,149,950.66 | 34,174,160.70 | 2,528,857,385.72 |
II. Accumulated depreciation | |||||
1. Opening balance | 374,701,516.70 | 215,850,570.93 | 602,573,724.20 | 26,528,571.35 | 1,219,654,383.18 |
2. Increase | 44,437,029.92 | 27,435,004.65 | 58,507,811.29 | 2,756,041.86 | 133,135,887.72 |
(1) Provision | 44,437,029.92 | 27,435,004.65 | 58,507,811.29 | 2,756,041.86 | 133,135,887.72 |
3. Decrease | 1,987,442.21 | 19,269,223.30 | 42,891,396.96 | 2,681,321.35 | 66,829,383.82 |
(1) Disposal or scrapping | 1,987,442.21 | 19,226,031.12 | 42,780,438.29 | 2,681,321.35 | 66,675,232.97 |
(2) Transfer into construction in progress | 43,192.18 | 110,958.67 | 154,150.85 | ||
4. Impact of change in exchange rate | -148,839.68 | -65,174.12 | -394,167.03 | -9,784.89 | -617,965.72 |
5. Closing balance | 417,002,264.73 | 223,951,178.16 | 617,795,971.50 | 26,593,506.97 | 1,285,342,921.36 |
III. Impairment provision | |||||
1. Opening balance | |||||
2. Increase | 303,774.72 | 303,774.72 | |||
(1) Provision | 303,774.72 | 303,774.72 | |||
3. Decrease | |||||
(1) Disposal or scrapping | |||||
4. Closing balance | 303,774.72 | 303,774.72 | |||
IV. Book value | |||||
1. Closing book value | 817,238,146.55 | 71,037,910.20 | 347,353,979.16 | 7,580,653.73 | 1,243,210,689.64 |
2. Opening book value | 848,853,544.87 | 80,335,048.08 | 367,471,736.77 | 6,415,061.31 | 1,303,075,391.03 |
(2) Fixed assets with property ownership certificate unsettled
Unit: RMB
Item | Book value | Reasons for unsettlement |
Function dormitory of Shaoxing Supor | 34,497,759.97 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.3 plant of Shaoxing Supor | 25,246,766.02 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.1 plant of Shaoxing Supor | 23,485,831.72 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.8 plant of Shaoxing Supor | 27,812,506.23 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
Function cafeteria of Shaoxing Supor | 11,489,781.53 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.12 plant of Shaoxing Supor | 11,832,158.13 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
Transformer substation (35 kV) of Shaoxing Supor | 1,106,864.71 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.13 plant of Shaoxing Supor | 15,401,201.97 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.14 plant of Shaoxing Supor | 23,499,440.07 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
No.15 plant of Shaoxing Supor | 40,834,008.34 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
Forklift charging room of Shaoxing Supor | 845,522.44 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
13-B# warehouse project of Shaoxing Supor | 13,216,929.29 | After all projects are completed, and the completion and settlement procedures are fulfilled, the property ownership certificate shall be processed uniformly |
Generator room of P&R Products | 1,070.89 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
Water pump building and structures of P&R Products | 74,446.36 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
Extended plant for bakelite workshop of P&R Products | 164,322.47 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
Polishing workshop of P&R Products | 80,640.00 | Transfer procedures of land use right certificate are not settled due to land ownership issue |
Total | 229,589,250.14 |
14. Construction in progress
Unit: RMB
Item | Closing balance | Opening balance |
Construction in progress | 26,862,380.61 | 12,005,654.73 |
Total | 26,862,380.61 | 12,005,654.73 |
(1) Details of construction in progress
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Warehouse project of Shaoxing Supor | 11,014,567.00 | 11,014,567.00 | ||||
Shaoxing Supor fire protection renovation project | 20,185,019.07 | 20,185,019.07 |
Piecemeal projects | 5,844,384.84 | 5,844,384.84 | 82,038.73 | 82,038.73 | ||
Equipment payment | 832,976.70 | 832,976.70 | 909,049.00 | 909,049.00 | ||
Total | 26,862,380.61 | 26,862,380.61 | 12,005,654.73 | 12,005,654.73 |
(2) Impairment test of the construction in progress
□ Applicable ? Not applicable
15. Right-of-use assets
(1) Right-of-use assets
Unit: RMB
Item | Buildings and structures | Land | Total |
I. Original book value: | |||
1. Opening balance | 263,207,787.03 | 3,228,879.08 | 266,436,666.11 |
2. Increase | 86,837,495.69 | 86,837,495.69 | |
3. Decrease | 7,601,989.10 | 7,601,989.10 | |
4. Exchange rate effect | -9,149.81 | 54,752.69 | 45,602.88 |
5. Closing balance | 342,434,143.81 | 3,283,631.77 | 345,717,775.58 |
II. Accumulated depreciation | |||
1. Opening balance | 75,512,489.83 | 205,213.46 | 75,717,703.29 |
2. Increase | 49,480,267.17 | 103,851.78 | 49,584,118.95 |
(1) Provision | 49,480,267.17 | 103,851.78 | 49,584,118.95 |
3. Decrease | 3,079,194.21 | 3,079,194.21 | |
(1) Disposal | 3,079,194.21 | 3,079,194.21 | |
4. Exchange rate effect | -12,400.29 | 3,974.70 | -8,425.59 |
5. Closing balance | 121,901,162.50 | 313,039.94 | 122,214,202.44 |
III. Impairment provision | |||
IV. Book value | |||
1. Closing book value | 220,532,981.31 | 2,970,591.83 | 223,503,573.14 |
2. Opening book value | 187,695,297.20 | 3,023,665.62 | 190,718,962.82 |
(2) Impairment test of right-of-use assets
□ Applicable ? Not applicable
16. Intangible assets
(1) Intangible assets
Unit: RMB
Item | Land use right | Trademark use right | Software | Pollutant Discharge Permit | Total |
I. Original book value: | |||||
1. Opening balance | 475,027,652.21 | 47,328,811.32 | 98,175,198.47 | 620,531,662.00 | |
2. Increase | 5,809,868.28 | 9,894,760.97 | 15,704,629.25 | ||
(1) Acquisition | 5,809,868.28 | 9,894,760.97 | 15,704,629.25 | ||
(2) In-house R&D | |||||
(3) Increase from enterprise merger | |||||
3. Decrease | 1,704,286.59 | 1,704,286.59 | |||
(1) Disposal | 1,704,286.59 | 1,704,286.59 | |||
4. Impact of change in exchange rate | -60,860.67 | 6,030.05 | -54,830.62 | ||
5. Closing balance | 474,966,791.54 | 47,328,811.32 | 102,286,810.21 | 9,894,760.97 | 634,477,174.04 |
II. Accumulated amortization | |||||
1. Opening balance | 98,466,631.62 | 33,085,117.90 | 48,962,179.32 | 180,513,928.84 | |
2. Increase | 9,978,253.20 | 4,732,881.13 | 10,011,431.48 | 1,978,952.20 | 26,701,518.01 |
(1) Provision | 9,978,253.20 | 4,732,881.13 | 10,011,431.48 | 1,978,952.20 | 26,701,518.01 |
3. Decrease | 1,698,569.58 | 1,698,569.58 | |||
(1) Disposal | 1,698,569.58 | 1,698,569.58 | |||
4. Impact of change in exchange rate | -23,068.69 | 4,522.74 | -18,545.95 | ||
5. Closing balance | 108,421,816.13 | 37,817,999.03 | 57,279,563.96 | 1,978,952.20 | 205,498,331.32 |
III. Impairment provision | |||||
IV. Book value | |||||
1. Closing book value | 366,544,975.41 | 9,510,812.29 | 45,007,246.25 | 7,915,808.77 | 428,978,842.72 |
2. Opening book value | 376,561,020.59 | 14,243,693.42 | 49,213,019.15 | 440,017,733.16 |
At the end of this period, the proportion of intangible assets formed through internal R&D in the balance of intangible assets is 0.00%.
17. Deferred income tax assets/deferred income tax liabilities
(1) Un-offset deferred income tax assets
Unit: RMB
Item | Closing balance | Opening balance | ||
Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
Impairment provision of assets | 121,098,089.15 | 26,260,667.30 | 104,854,363.88 | 23,059,580.50 |
Profits not realized by internal transaction | 69,741,065.39 | 16,436,357.10 | 80,178,943.70 | 19,496,741.80 |
Deductible losses | 18,987,969.57 | 4,474,069.98 | 16,402,564.88 | 3,626,289.50 |
Accrued expenses | 1,379,497,142.55 | 331,107,609.67 | 1,349,115,519.54 | 326,749,720.17 |
Accrued salary | 60,023,338.88 | 14,699,395.04 | 42,347,931.51 | 10,586,982.88 |
Estimated liabilities | 7,258,295.50 | 1,088,744.33 | 12,640,441.72 | 1,896,066.26 |
Share-based payment | 107,454,470.04 | 24,615,719.01 | 51,889,706.92 | 12,000,187.47 |
Expected returns | 10,173,886.95 | 2,449,174.32 | 8,355,059.11 | 2,052,992.64 |
Lease obligation | 224,849,380.79 | 53,129,092.96 | 198,844,124.74 | 48,991,135.15 |
Total | 1,999,083,638.82 | 474,260,829.71 | 1,864,628,656.00 | 448,459,696.37 |
(2) Un-offset deferred income tax liabilities
Unit: RMB
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
Right-of-use assets | 223,503,573.14 | 52,776,659.15 | 190,718,962.82 | 46,986,767.52 |
Depreciation of fixed assets | 8,198,493.05 | 1,231,924.26 | ||
Total | 231,702,066.19 | 54,008,583.41 | 190,718,962.82 | 46,986,767.52 |
(3) Deferred income tax assets or liabilities presented with net amount after offsetting
Unit: RMB
Item | Offsetting amount between deferred income tax assets and liabilities at the end of the period | Closing balance of deferred income tax assets or liabilities after offsetting | Offsetting amount between deferred income tax assets and liabilities at the beginning of the period | Opening balance of deferred income tax assets or liabilities after offsetting |
Deferred income tax assets | 54,008,583.41 | 420,252,246.30 | 46,986,767.52 | 401,472,928.85 |
Deferred income tax liabilities | 54,008,583.41 | 46,986,767.52 |
(4) Detail about unrecognized deferred income tax assets
Unit: RMB
Item | Closing balance | Opening balance |
Deductible temporary difference | 16,278,431.89 | 15,629,891.75 |
Deductible losses | 56,282,437.20 | 28,216,721.82 |
Total | 72,560,869.09 | 43,846,613.57 |
(5) Deductible losses of unconfirmed deferred income tax assets shall expire in the following years
Unit: RMB
Year | Closing balance closing amount | Opening balance | Remarks |
2024 | 8,287,689.09 | 8,287,689.09 | |
2025 | 6,945,189.33 | 6,945,189.33 | |
2026 | 7,751,051.17 | 7,751,051.17 | |
2027 | 5,232,792.23 | 5,232,792.23 | |
2028 | 28,065,715.38 | ||
Total | 56,282,437.20 | 28,216,721.82 |
18. Assets with title or use right restrictions
Unit: RMB
Item | End of the term | Beginning of the term | ||||||
Book balance | Book value | Type of restriction | Restriction | Book balance | Book value | Type of restriction | Restriction | |
Monetary capital | 476,860,000.00 | 476,860,000.00 | Frozen | Bank acceptance bill security | 254,129,233.86 | 254,129,233.86 | Frozen | Bank acceptance bill security |
Monetary capital | 58,000,000.00 | 58,000,000.00 | Frozen | Deposit security for advance payment financing | 58,000,000.00 | 58,000,000.00 | Frozen | Deposit security for advance payment financing |
Monetary capital | 613,739.88 | 613,739.88 | Frozen | Security and frozen funds of e-commerce platforms | 975,570.02 | 975,570.02 | Frozen | Security and frozen funds of e-commerce platforms |
Monetary capital | 30,423.72 | 30,423.72 | Frozen | Write off the frozen amount in the bank account of the branch | 8,541.04 | 8,541.04 | Frozen | Write off the frozen amount in the bank account of the branch |
Monetary capital | 12,546,000.00 | 12,546,000.00 | Frozen | Frozen funds of term deposits pledged by issuing bank acceptance bills. | ||||
Monetary capital | 82,189.64 | 82,189.64 | Frozen | Frozen funds for the change of industrial and |
commercial legal person | ||||||||
Total | 535,504,163.60 | 535,504,163.60 | 325,741,534.56 | 325,741,534.56 |
19. Short-term loans
(1) Classification of short-term loans
Unit: RMB
Item | Closing balance | Opening balance |
Bank acceptance discount | 199,741,167.36 | |
Total | 199,741,167.36 |
There are no overdue and unpaid loans at the end of this year.
20. Notes payable
Unit: RMB
Type | Closing balance | Opening balance |
Bank acceptance bill | 1,235,000,000.00 | 1,057,611,900.00 |
Total | 1,235,000,000.00 | 1,057,611,900.00 |
The amount of due unpaid notes payable is RMB 0.00 at the end of the current period.The above amounts are all notes payable due within one year.
21. Accounts payable
(1) Details
Unit: RMB
Item | Closing balance | Opening balance |
Goods payment | 1,757,840,901.20 | 1,274,889,065.48 |
Equipment and engineering funds | 57,759,242.79 | 67,104,579.12 |
Cost payment | 1,390,007,709.19 | 1,293,527,903.59 |
Total | 3,205,607,853.18 | 2,635,521,548.19 |
Other remarks:
As at December 31, 2023, Supor had no significant accounts payable with an age of more than one year ( December 31, 2022: None).
22. Other payables
Unit: RMB
Item | Closing balance | Opening balance |
Other payables | 147,617,550.27 | 137,729,222.63 |
Total | 147,617,550.27 | 137,729,222.63 |
(1) Other payables
1) Listing by nature
Unit: RMB
Item | Closing balance | Opening balance |
Deposit as security | 103,302,075.21 | 99,096,157.97 |
Temporary receipts payable | 21,367,823.48 | 21,538,362.25 |
Others | 22,947,651.58 | 17,094,702.41 |
Total | 147,617,550.27 | 137,729,222.63 |
23. Contract liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Advances on sales | 862,706,076.18 | 1,153,932,879.53 |
Total | 862,706,076.18 | 1,153,932,879.53 |
The amount with major changes in its book value during the reporting period and its reasons
Unit: RMB
Item | Variation amount | Variation reason |
Advances on sales | -1,153,932,879.53 | Including the revenue recognized by the amount of book value of contract liabilities at the beginning of the year |
Advances on sales | 862,706,076.18 | The amount increased due to receipt of cash (excluding the amount recognized as revenue in the current year) |
Total | -291,226,803.35 | —— |
24. Payable employee remuneration
(1) Details
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
I. Short-term employee remuneration | 282,609,935.60 | 1,728,602,885.42 | 1,691,000,430.96 | 320,212,390.06 |
II. Post-employment Benefits - Defined Contribution Plan | 5,885,187.48 | 101,998,486.56 | 97,688,450.02 | 10,195,224.02 |
III. Termination benefit | 580,305.42 | 4,954,852.15 | 3,804,066.37 | 1,731,091.20 |
Total | 289,075,428.50 | 1,835,556,224.13 | 1,792,492,947.35 | 332,138,705.28 |
(2) Details of short-term employee remuneration
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
1. Salary, bonus, allowance and subsidy | 238,523,830.57 | 1,534,488,739.84 | 1,501,728,347.98 | 271,284,222.43 |
2. Employee services and benefits | 3,768,543.21 | 68,061,382.96 | 67,650,660.01 | 4,179,266.16 |
3. Social insurance premiums | 4,059,152.74 | 61,794,443.09 | 59,112,247.75 | 6,741,348.08 |
Including: medical insurance premium | 3,742,971.88 | 57,566,222.64 | 54,977,255.28 | 6,331,939.24 |
occupational injuries premium | 316,180.86 | 4,228,220.45 | 4,134,992.47 | 409,408.84 |
4. Housing accumulation fund | 163,804.08 | 44,473,847.74 | 44,533,506.82 | 104,145.00 |
5. Trade union fund and employee education fund | 36,094,605.00 | 19,784,471.79 | 17,975,668.40 | 37,903,408.39 |
Total | 282,609,935.60 | 1,728,602,885.42 | 1,691,000,430.96 | 320,212,390.06 |
(3) Details of defined contribution plan
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
1. Basic endowment insurance | 5,684,246.20 | 98,222,479.40 | 94,062,546.64 | 9,844,178.96 |
2. Unemployment insurance premiums | 200,941.28 | 3,776,007.16 | 3,625,903.38 | 351,045.06 |
Total | 5,885,187.48 | 101,998,486.56 | 97,688,450.02 | 10,195,224.02 |
Other remarks:
On March 25, 2019, the General Office of the State Council released the Opinions on Comprehensively Promoting the CombinedImplementation of Maternity Insurance and Basic Medical Insurance for Employees, which promotes the combined implementationof the two insurances.
(4) Termination benefit
The termination benefit paid by Supor in the year for termination of labor relations is RMB 3,804,066.37 (2022: RMB 9,120,232.80),and the outstanding payable amount at the end of the year is RMB 1,731,091.20 (as of December 31, 2022: RMB 580,305.42).
25. Taxes and fees payable
Unit: RMB
Item | Closing balance | Opening balance |
VAT | 37,895,819.95 | 29,951,962.61 |
Enterprise income tax | 266,724,688.22 | 141,680,509.34 |
Individual income tax | 3,461,145.87 | 3,309,618.70 |
Urban maintenance and construction tax | 9,463,195.64 | 5,065,611.60 |
Housing property tax | 10,999,275.32 | 10,036,243.48 |
Land use tax | 6,702,356.51 | 6,702,356.53 |
Stamp tax | 4,433,184.32 | 4,127,604.37 |
Education surcharge | 4,057,809.94 | 2,201,227.48 |
Local education surcharge | 2,725,257.74 | 1,533,579.16 |
Total | 346,462,733.51 | 204,608,713.27 |
26. Non-current liabilities due within one year
Unit: RMB
Item | Closing balance | Opening balance |
Lease obligations due within one year | 47,568,255.43 | 41,924,940.24 |
Total | 47,568,255.43 | 41,924,940.24 |
27. Other current liabilities
Unit: RMB
Item | Closing balance | Opening balance |
Refund payable | 25,459,245.72 | 22,621,360.23 |
Endorsed bank acceptance bill unrecognized | 10,761,655.33 | 22,383,800.87 |
Output tax to be written-off | 111,431,313.35 | 149,694,451.88 |
Total | 147,652,214.40 | 194,699,612.98 |
28. Lease obligation
Unit: RMB
Item | Closing balance | Opening balance |
Long-term lease obligations | 224,849,380.79 | 192,704,856.82 |
Minus: Lease obligations due within one year | -47,568,255.43 | -41,924,940.24 |
Total | 177,281,125.36 | 150,779,916.58 |
Other remarks:
The Group also rents employee dormitories, temporary warehouses, etc. for a lease term up to one year, representing short-term leases.The Group has chosen not to recognize the right-of-use assets and lease obligations for these leases.
29. Long-term payroll payable to employees
(1) Long-term payroll payable to employees
Unit: RMB
Item | Closing balance | Opening balance |
Termination benefit | 1,128,743.89 | 1,441,111.55 |
Other long-term benefits | 14,707,829.27 | |
Total | 15,836,573.16 | 1,441,111.55 |
30. Estimated liabilities
Unit: RMB
Item | Closing balance | Opening balance | Reasons for the balance |
Pending lawsuit | 5,538,727.50 | 11,150,000.00 | See Note XVI "Commitments and Contingencies" for details |
Financial guarantee contract | 1,719,568.00 | 1,490,441.72 | See Note XVI "Commitments and Contingencies" for details |
Total | 7,258,295.50 | 12,640,441.72 |
31. Share capital
Unit: RMB
Opening balance | Increase/decrease in the period (+, -) | Closing balance | |||||
New shares | Shares bonus | Converted capital | Others | Subtotal | |||
Total shares | 808,654,476.00 | -1,945,819.00 | -1,945,819.00 | 806,708,657.00 |
Other remarks:
The decrease in share capital in the current period is RMB 1,945,819.00, which refers to the repurchase and deregistration of 75,750restricted stocks from the separated equity incentive objects at the price of RMB 1 per share, resulting in the corresponding decreaseof share capital in the amount of RMB 75,750.00. The 19th meeting of the 7th Board of Directors in 2023 reviewed and approved theProposal to terminate the repurchase of Certain Public Shares, thereby the Company repurchased and cancelled 1,870,069 shares,representing a corresponding reduction of RMB 1,870,069.00 in share capital.
32. Capital reserves
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Other capital reserve | 125,368,989.44 | 47,741,637.58 | 173,110,627.02 | |
Total | 125,368,989.44 | 47,741,637.58 | 173,110,627.02 |
Remarks (including increase and decrease in current period and variation reason):
1) The increase of RMB 47,741,637.58 in other capital reserves in the current period refers to ① the equity-settled share-based paymentcost of RMB 45,786,307.92 in the current period included in the capital reserve (other capital reserves), as detailed in Note XV"Description of Share-based Payment" to these financial statements. ② The estimated deductible amount of the share-based payment
in the future of this year exceeds the cost recognized in the waiting period. The deferred income tax assets formed by the excess ofRMB 1,955,329.66 are directly recognized through capital reserve - other capital reserves.
33. Treasury shares
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Treasury share | 99,724,823.49 | 480,065,768.74 | 91,733,258.47 | 488,057,333.76 |
Total | 99,724,823.49 | 480,065,768.74 | 91,733,258.47 | 488,057,333.76 |
Remarks (including increase and decrease in current period and variation reason):
1) The 12th Session of the Seventh Board of Directors of the Company and 2021 Annual General Meeting of Shareholders deliberatedand approved the Proposal on Repurchasing Certain Public Shares. The Company planned to use its self-owned capital to buy backits shares for the write-off and decrease of the registered capital and the implementation of equity incentives. The increase in the yearis due to the Company's repurchase of 1,545,000 shares of the Company from the secondary market through centralized bid transactionsduring the reporting period, totaling RMB 79,937,608.83, including the repurchase handling fee of RMB 8073.73. Among them, RMB79,945,682.56 of treasury shares are intended for cancellation or implementation of equity incentives.
2) The 2022 Annual General Meeting of Shareholders of the Company deliberated and approved the Proposal on Repurchasing CertainPublic Shares, and the Company planned to repurchase its shares through self-owned capital for part cancellation and decrease of theregistered capital and implementation of equity incentive. The increase in the year is due to the Company's repurchase of 8,150,000shares of the Company from the secondary market through centralized bid transactions during the reporting period, totaling RMB400,080,671.30, including the repurchase handling fee of RMB 39,414.88. Among them, RMB 400,120,086.18 of treasury shares areintended for cancellation or implementation of equity incentives.
3) The treasury share capital decreased by RMB 91,733,258.47 in the year, ① The 11th meeting of the 7th Board of Directors in 2022and the 15th meeting of the 7th Board of Directors in 2022 approved the Proposal on Granting Restricted Stocks to Incentive Objects.A total of 79,000 restricted stocks have been granted to incentive objects this year, with a grant amount of RMB 3,650,590.00 ②Atthe 14th meeting of the 7th Board of Directors in 2022, it was decided that thirteen incentive recipients of the company, who haveresigned and no longer meet the incentive conditions, will repurchase and cancel a total of 53,000 restricted shares at a price of RMB1 per share, reducing the repurchase obligation by RMB 53,000.00. ③The 19th meeting of the 7th Board of Directors of the companyin 2023 has decided that five incentive recipients who have left the company and no longer meet the incentive conditions will repurchaseand cancel a total of 22,750 restricted shares at a price of RMB 1 per share, reducing the repurchase obligation by RMB 22,750.00.
④This year, the company cancelled and repurchased 1,870,069 shares, totaling RMB 88,006,918.47.
34. Other comprehensive incomes
Unit: RMB
Item | Opening balance | Amount incurred during this period | Closing balance | |||||
Current period cumulative before income tax | Minus: other comprehensive incomes carried forward transferred to profits and losses | Minus: other comprehensive incomes carried forward transferred to retained earnings | Minus: income tax expenses | Attributable to parent company | Attributable to minority shareholder | |||
II. Other comprehensive | -20,454,823.26 | 1,550,791.25 | 1,278,368.67 | 272,422.58 | -19,176,454.59 |
incomes that can be reclassified into profit and loss | ||||||||
Conversion difference in foreign currency financial statement | -20,454,823.26 | 1,550,791.25 | 1,278,368.67 | 272,422.58 | -19,176,454.59 | |||
Total other comprehensive income | -20,454,823.26 | 1,550,791.25 | 1,278,368.67 | 272,422.58 | -19,176,454.59 |
35. Surplus reserves
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance |
Statutory surplus reserve | 356,924,811.32 | 85,151,939.97 | 86,136,849.47 | 355,939,901.82 |
Total | 356,924,811.32 | 85,151,939.97 | 86,136,849.47 | 355,939,901.82 |
Remarks on surplus reserve (including increase and decrease in current period and variation reason):
The increase in surplus reserve this year is based on the provision of statutory surplus reserve based on the company's net profit realizedthis year. The cumulative statutory surplus reserve withdrawn by our company has reached 50% of the registered capital, and we willno longer continue to withdraw statutory surplus reserve.The decrease in surplus reserve in the year is due to the cancellation of1,870,069 repurchased shares of the Company, where the difference between the price paid for the cancellation of repurchased sharesand the face value of the shares is offset against the capital reserve - share capital premium, and the shortfall is offset against the surplusreserve by RMB 86,136,849.47.
36. Undistributed profits
Unit: RMB
Item | Current period | Prior period |
Undistributed profits at period beginning after adjustment | 5,865,316,233.53 | 6,451,748,564.12 |
Plus: net profit attributable to owners of the parent company | 2,179,798,147.27 | 2,067,659,526.97 |
Minus: withdrawal of statutory surplus reserve | 85,151,939.97 | |
Common share dividends payable | 2,439,504,228.21 | 2,567,723,592.43 |
Grant of restricted stocks | 3,650,590.00 | 86,368,265.13 |
Undistributed profits at the end of the period | 5,516,807,622.62 | 5,865,316,233.53 |
Adjustment of undistributed profits at period beginning:
1). Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, undistributed profitat period beginning was changed by RMB 0.00.
2) Due to change of accounting policies, undistributed profit at period beginning was changed by RMB 0.00.
3) Due to rectification of important accounting errors, undistributed profit at period beginning was changed by RMB 0.00.
4) Due to change of merger scope resulted from same control, undistributed profit at period beginning was changed by RMB 0.00.
5) Due to other adjustment, undistributed profit at period beginning was changed by RMB 0.00.
37. Operating incomes and costs
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period | ||
Revenue | Cost | Revenue | Cost | |
Main business | 21,047,461,714.13 | 15,482,918,819.24 | 19,947,308,992.05 | 14,779,802,587.93 |
Revenue from other operations | 256,486,928.53 | 217,210,030.07 | 223,218,524.61 | 189,526,252.64 |
Total | 21,303,948,642.66 | 15,700,128,849.31 | 20,170,527,516.66 | 14,969,328,840.57 |
Whether the net profit before or after non-recurring profit and loss are deducted, whichever is lower, is negative
□ Yes ? No
Breakdown information of operating income and operating cost:
Unit: RMB
Contract classification | Operating income | Operating cost |
Business type | ||
Including: | ||
Cookware | 6,056,346,176.44 | 4,320,256,178.21 |
Electric appliances | 14,963,200,632.70 | 11,141,680,549.71 |
Others | 284,401,833.52 | 238,192,121.39 |
Classified by business area | ||
Including: | ||
Domestic | 15,107,615,309.80 | 10,771,952,519.69 |
Foreign | 6,196,333,332.86 | 4,928,176,329.62 |
Information related to performance obligations:
NoneInformation related to the transaction price allocated to the remaining performance obligations:
At the end of this reporting period, the revenue from the performance obligations that have not been fulfilled or completely fulfilledunder existing contract is RMB 862,706,076.18, of which RMB 862,706,076.18 is expected to be recognized as income in 2024.
38. Taxes and surcharges
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Urban maintenance and construction tax | 64,295,557.27 | 60,826,714.98 |
Education surcharge | 27,696,208.95 | 26,242,005.20 |
Housing property tax | 13,343,358.14 | 12,328,977.15 |
Land use tax | 1,630,388.68 | 1,954,421.94 |
Vehicle and vessel use tax | 51,074.40 | 58,546.40 |
Stamp tax | 16,715,072.33 | 11,651,100.02 |
Local education surcharge | 18,464,139.22 | 17,555,804.52 |
Environmental protection tax | 54,852.44 | 75,969.20 |
Total | 142,250,651.43 | 130,693,539.41 |
Other remarks:
See Note VI. Taxes for calculating standard of taxes and surcharges.
39. Administrative expenses
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Employee remuneration | 232,400,181.10 | 218,635,148.78 |
Office, business traveling and depreciation and amortization expenses | 89,412,248.70 | 87,381,475.69 |
Cost of equity incentive and performance incentive fund | 35,864,304.26 | 36,289,361.98 |
Others | 35,921,232.76 | 31,754,653.83 |
Total | 393,597,966.82 | 374,060,640.28 |
40. Sales expense
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Advertising, sales promotion, and special gift expenses | 1,706,028,199.93 | 1,552,778,059.77 |
Employee remuneration | 363,916,013.14 | 401,609,998.06 |
Office and business traveling expenses | 146,017,301.34 | 124,217,367.02 |
Cost of equity incentive and performance incentive fund | 11,796,303.73 | 10,709,983.00 |
Others | 70,089,607.60 | 66,981,650.78 |
Total | 2,297,847,425.74 | 2,156,297,058.63 |
41. R&D expense
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Employee remuneration | 218,391,753.12 | 202,158,417.41 |
Trial production experiment cost and consumption expenditure | 80,046,107.59 | 91,696,672.99 |
New product design cost | 42,518,700.10 | 47,898,023.51 |
Patent and external institutional fees | 52,659,379.35 | 43,628,185.52 |
Cost of equity incentive and performance incentive fund | 10,098,463.21 | 7,847,891.00 |
Others | 27,574,132.92 | 23,030,166.56 |
Total | 431,288,536.29 | 416,259,356.99 |
42. Financial expenses
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Interest expense of loans and accounts payables | 3,816,340.07 | 142,176.50 |
Interest revenue of deposits and receivables | -80,404,233.22 | -76,571,126.41 |
Interest expense of lease obligations | 10,526,971.78 | 9,136,772.28 |
Gain on net foreign exchange | -6,403,128.91 | -34,786,425.70 |
Handling fee and other financial expenses | 4,834,108.92 | 4,655,315.42 |
Total | -67,629,941.36 | -97,423,287.91 |
43. Other income
(1) Classification of other income
Source of other revenues | Amount incurred during this period | Amount incurred during prior period | Amount recognized through non-recurring profit or loss of the current year |
Government subsidies concerning daily activities | 244,371,726.06 | 235,160,623.11 | 191,579,657.04 |
Withholding and paying tax expense and handling fee refund | 1,188,766.09 | 1,534,189.23 | 1,188,766.09 |
Input tax plus deduction | 3,357,048.16 | 3,357,048.16 |
Total
Total | 248,917,540.31 | 236,694,812.34 | 196,125,471.29 |
(2) Government subsidies concerning daily activities
Subsidy item | Amount incurred during this period | Amount incurred during prior period | Related to assets/income |
Project subsidy | 25,116,349.04 | 33,414,476.64 | Related to benefits |
Government reward | 166,463,308.00 | 164,637,740.59 | Related to benefits |
Tax returns | 52,792,069.02 | 37,108,405.88 | Related to benefits |
Total | 244,371,726.06 | 235,160,623.11 |
44. Gains from changes in fair value
Unit: RMB
Resource for gains from changes in fair value | Amount incurred during this period | Amount incurred during prior period |
Transactional financial assets | 1,137,787.54 | 1,382,527.79 |
Total | 1,137,787.54 | 1,382,527.79 |
45. Investment incomes
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Long-term equity investment income under the equity method | -529,681.40 | -3,262,848.85 |
Investment income from disposal of transactional financial assets | 7,970,271.40 | 4,386,059.07 |
Interest from term deposit | 7,432,119.49 | 34,428,058.56 |
Investment income of debt investment during the holding period | 29,040,658.23 | 16,631,649.43 |
Investment income from disposal of debt investments | 4,898,876.71 | 1,864,109.59 |
Total | 48,812,244.43 | 54,047,027.80 |
46. Credit impairment losses
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Loss for bad debts of other receivables | -320,174.60 | -1,388,421.68 |
Accounts receivable | -25,670,079.70 | 35,810,880.38 |
Financial guarantee contract | -229,126.28 | 96,856.52 |
Total | -26,219,380.58 | 34,519,315.22 |
47. Asset impairment losses
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
I. Loss on inventory depreciation and impairment loss of contract performance cost | 6,575,264.78 | -11,352,717.26 |
IV. Loss on fixed asset impairment loss | -303,774.72 | |
Total | 6,271,490.06 | -11,352,717.26 |
48. Assets disposal income
Unit: RMB
Source of assets disposal income | Amount incurred during this period | Amount incurred during prior period |
Disposal losses of fixed assets | -4,212,813.38 | -2,002,558.23 |
Proceeds from the disposal of the right-of-use assets | 151,301.37 | 639,053.38 |
Total | -4,061,512.01 | -1,363,504.85 |
49. Non-operating income
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period | Amount recognized through non-recurring profit or loss of the current period |
Damage and scrapping gains of non-current assets | 171,685.02 | 775,693.99 | 171,685.02 |
Including: Gains from scraping of fixed assets | 171,685.02 | 775,693.99 | 171,685.02 |
Default fine revenue | 9,243,680.81 | 11,310,799.88 | 9,243,680.81 |
Reversion of estimated liabilities | 5,150,000.00 | 5,150,000.00 | |
Others | 703,471.60 | 2,348,632.82 | 703,471.60 |
Total | 15,268,837.43 | 14,435,126.69 | 15,268,837.43 |
Other remarks:
50. Non-operating expense
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period | Amount recognized through non-recurring profit or loss of the current period |
Donation expenditures | 5,868,685.02 | 2,663,130.43 | 5,868,685.02 |
Damage and scrapping losses of non-current assets | 3,066,439.87 | 601,296.71 | 3,066,439.87 |
Including: Scrapping losses of fixed assets | 3,066,439.87 | 601,296.71 | 3,066,439.87 |
Others | 2,938,582.02 | 1,199,925.30 | 2,938,582.02 |
Total | 11,873,706.91 | 4,464,352.44 | 11,873,706.91 |
51. Income tax expenses
(1) Details
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Current income tax expenses | 522,122,005.28 | 468,983,078.04 |
Deferred income tax expenses | -16,823,987.79 | 10,050,086.32 |
Total | 505,298,017.49 | 479,033,164.36 |
(2) Reconciliation of accounting profit to income tax expenses
Unit: RMB
Item | Amount incurred during this period |
Total profit | 2,684,718,454.70 |
Income tax expenses based on statutory/applicable tax rate | 671,179,613.68 |
Effect of different tax rate applicable to subsidiaries | -122,260,430.66 |
Effect of prior income tax reconciliation | -21,529,266.14 |
Effect of non-deductible costs, expenses and losses | 11,607,160.43 |
Effect of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 9,329,818.57 |
Deduction for the additional calculation of R&D expense | -42,842,474.68 |
Using previous years' deductible losses | -147,710.21 |
Effect of tax rate variation on deferred income taxes balance at the beginning of the period | -38,693.50 |
Income tax expenses | 505,298,017.49 |
52. Other comprehensive incomes
See Note 34 for details.
53. Items of cash flow statement
(1) Cash related to operating activities
Other cash receipts related to operating activities
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Receipt of government subsidies | 196,125,471.29 | 199,599,828.51 |
Receipt of deposit, security and employee reserve fund loan | 4,205,917.24 | 26,496,254.72 |
Interest revenues | 53,992,386.07 | 66,264,180.37 |
Others | 13,569,937.64 | 4,311,161.59 |
Total | 267,893,712.24 | 296,671,425.19 |
Other cash payments related to operating activities
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Cash payment for sales expense | 1,633,323,496.20 | 1,594,110,566.41 |
Cash payment for administrative expenses | 108,299,990.50 | 95,471,984.49 |
Cash payment for R&D expenses | 200,066,224.77 | 203,782,142.17 |
Donations payment | 5,868,685.02 | 2,663,130.43 |
Other payments | 7,351,491.57 | 9,398,008.04 |
Total | 1,954,909,888.06 | 1,905,425,831.54 |
(2) Cash related to investing activities
Other cash receipts related to investing activities
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Recovery of financial products, and principal of term deposit | 2,738,215,081.02 | 3,103,136,438.00 |
Total | 2,738,215,081.02 | 3,103,136,438.00 |
Other cash payments related to investing activities
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Cash payment for financial products and term deposit | 2,923,123,711.63 | 3,597,439,490.93 |
Total | 2,923,123,711.63 | 3,597,439,490.93 |
(3) Cash related to financing activities
Other cash payments related to financing activities
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Receipt of equity incentive payment | 79,000.00 | 2,463,000.00 |
Total | 79,000.00 | 2,463,000.00 |
Other cash payments related to financing activities
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Repurchase of stocks and handling fees | 480,141,518.74 | 162,978,253.14 |
Cash paid for repayment of lease obligation principal and interest | 60,599,875.73 | 45,922,594.90 |
Total | 540,741,394.47 | 208,900,848.04 |
Changes in various liabilities arising from financing activities? Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase | Decrease | Closing balance | ||
Cash change | Non-cash change | Cash change | Non-cash change | |||
Short-term borrowings | 446,779,722.15 | 2,961,445.21 | 250,000,000.00 | 199,741,167.36 | ||
Fund allocation of related parts | 13,886,668.74 | 1,724,666.42 | 15,611,335.16 | |||
Other payable-Restricted stock repurchase obligation | 2,439,000.00 | 79,000.00 | 75,750.00 | 2,442,250.00 | ||
Other payables - dividends payable | 2,439,504,228.21 | 2,439,504,228.21 | ||||
Lease liabilities | 192,704,856.82 | 92,744,399.70 | 60,599,875.73 | 224,849,380.79 | ||
Total | 209,030,525.56 | 448,583,388.57 | 2,535,210,073.12 | 2,750,179,853.94 | 442,644,133.31 |
(4) Net amounts presented in cash flows
Item | Related facts | Basis of presentation as net amount | Financial impacts |
Short-term borrowings | Bank acceptance discount | Cash inflows and outflows on items which are quick in circulation, large in amounts, and short in maturity | 250,000,000.00 |
54. Supplementary information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB
Supplement information | Amount of this period | Amount of the prior period |
1. Reconciliation of net profit to cash flow from operating activities | ||
Net profit | 2,179,420,437.21 | 2,066,176,439.62 |
Plus: impairment provision of assets | -6,271,490.06 | 11,352,717.26 |
Credit impairment loss | 26,219,380.58 | -34,519,315.22 |
depreciation of fixed assets, oil and gas assets, productive biological assets | 133,135,887.72 | 128,264,310.47 |
depreciation of right-of-use assets | 49,584,118.95 | 47,571,308.63 |
amortization of intangible assets | 26,701,518.01 | 23,555,707.71 |
amortization of long-term unamortized expenses | ||
loss on disposal of fixed assets, intangible assets and other long-term assets ("-" for gains) | 4,061,512.01 | 1,363,504.85 |
fixed assets retirement loss ("-" for gains) | 2,894,754.85 | -174,397.28 |
losses from changes in fair value ("-" for revenue) | -1,137,787.54 | -1,382,527.79 |
financial expenses ("-" for gains) | -10,405,102.90 | -12,246,928.46 |
investments losses ("-" for gains) | -48,824,770.65 | -53,905,404.54 |
decrease of deferred income tax assets ("-" for increase) | -16,823,987.79 | 10,050,086.32 |
increase of deferred income tax liabilities ("-" for decrease) | ||
decrease in inventories ("-" for increase) | 238,814,733.91 | 590,241,481.65 |
decrease in operating receivables ("-" for increase) | -1,010,714,769.68 | 751,425,931.09? |
decrease in operating payables ("-" for increase) | 644,777,222.70 | -319,790,108.30 |
others | -176,522,321.12 | -48,027,560.17 |
net cash flows from operating activities | 2,034,909,336.20 | 3,159,955,245.84 |
2. Significant investing and financing activities not related to cash receipts and payments | ||
Conversion of debt into capital | ||
Convertible bonds to be matured within one year | ||
Fixed assets under financing lease | ||
3. Net changes in cash and cash equivalents: | ||
Closing balance of cash | 1,405,752,936.36 | 2,395,932,752.38 |
Minus: Opening balance of cash | 2,395,932,752.38 | 2,443,731,679.06 |
Plus: closing balance of cash equivalents | ||
Minus: opening balance of cash equivalents | ||
Net increase in cash and cash equivalents | -990,179,816.02 | -47,798,926.68 |
(2) Cash and cash equivalents
Unit: RMB
Item | Closing balance | Opening balance |
I. Cash | 1,405,752,936.36 | 2,395,932,752.38 |
Including: Cash on hand | 62,594.14 | 56,591.47? |
Cash in bank on demand for payment | 1,357,366,603.33 | 2,361,573,752.74? |
Other monetary capitals on demand for payment | 48,323,738.89 | 34,302,408.17? |
II. Cash equivalents | ||
III. Balance of cash and cash equivalents at the end of the period | 1,405,752,936.36 | 2,395,932,752.38 |
(3) Monetary funds that do not belong to cash and cash equivalents
Unit: RMB
Item | Amount of this period | Amount of the prior period | Reasons that do not belong to cash and cash equivalents |
Restricted funds in bank deposit | 30,423.72 | 90,730.68 | Restricted usage rights |
Term deposit beyond three months | 1,607,020,342.48 | 854,012,620.81 | Restricted usage rights |
Deposit security for advance payment financing | 58,000,000.00 | 58,000,000.00 | Restricted usage rights |
Bank acceptance bill security | 476,860,000.00 | 254,129,233.86 | Restricted usage rights |
Security and frozen funds of e-commerce platforms | 613,739.88 | 975,570.02 | Restricted usage rights |
Total | 2,142,524,506.08 | 1,167,208,155.37 |
55. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Item | Closing balance in foreign currencies | Conversion rate | RMB equivalent |
Monetary capital | |||
Including: USD | 45,024,429.69 | 7.0827 | 318,894,528.17 |
EUR | 29,299.34 | 7.8592 | 230,269.37 |
GBP | 0.67 | 9.0411 | 6.06 |
VND | 37,874,627,823.50 | 0.00029207 | 11,062,042.55 |
SGD | 89,553.52 | 5.3772 | 481,547.19 |
IDR | 26,673,055,534.62 | 0.000461 | 12,296,278.60 |
Accounts receivable | |||
Including: USD | 39,500,231.16 | 7.0827 | 279,768,287.24 |
VND | 8,168,244,650.50 | 0.00029207 | 2,385,699.22 |
IDR | 8,763,160,043.00 | 0.000461 | 4,039,816.78 |
Accounts payable | |||
Including: USD | 1,450,614.74 | 7.0827 | 10,274,269.02 |
EUR | 6,937.01 | 7.8592 | 54,519.35 |
VND | 73,786,717,466.48 | 0.00029207 | 21,550,886.57 |
SGD | 58,994.00 | 5.3772 | 317,222.54 |
IDR | 5,897,346,518.41 | 0.000461 | 2,718,676.74 |
(2) Description of overseas business entities, including important overseas business entities, indicated that itsmain overseas business entity, recording currency and selection basis, as well as the reasons for changes ofrecording currency shall be disclosed.
□ Applicable ? Not applicable
56. Lease
(1) The company as the lessee
? Applicable □ Not applicableVariable lease payments not recognized through measurement of lease obligation
□ Applicable ? Not applicable
Leasing costs of short-term leases or low value assets with simplified treatment?Applicable □ Not applicable
Unit: RMB
Item | Year 2023 | Year2022 |
Short term lease expenses with simplified processing methods | 8,541,439.82 | 8,614,386.82 |
Total cash outflows related to leasing | 69,141,315.55 | 54,536,981.72 |
(2) The company as the leaser
Operating lease as the lessor? Applicable □ Not applicable
Unit: RMB
Item | Rental Income | Among them: income related to variable lease payments not included in lease payments |
Real estate | 1,412,896.44 | |
Total | 1,412,896.44 |
Financing lease as the lessor
□ Applicable ? Not applicable
Annual undiscounted lease receipts for the future five years
□ Applicable ?Not applicable
(3) Sales profit and loss of financing leases recognized as manufacturer or distributor
□ Applicable ? Not applicable
VIII. R&D Expenditure
Unit: RMB
Item | Amount incurred during this period | Amount incurred during prior period |
Employee remuneration | 218,391,753.12 | 202,158,417.41 |
Trial production experiment cost and consumption expenditure | 80,046,107.59 | 91,696,672.99 |
New product design cost | 42,518,700.10 | 47,898,023.51 |
Patent and external institutional fees | 52,659,379.35 | 43,628,185.52 |
Cost of equity incentive and performance incentive fund | 10,098,463.21 | 7,847,891.00 |
Others | 27,574,132.92 | 23,030,166.56 |
Total | 431,288,536.29 | 416,259,356.99 |
Including: expensed R&D expenditure | 431,288,536.29 | 416,259,356.99 |
Capitalized R&D expenditure |
IX. Change on merger scope
1. Others
There is no change in the merger scope of the Company in the period.X. Equity in Other Entities
1. Equity in subsidiaries
(1) Structure of enterprise Group
Unit: RMB
Subsidiary name | Registered capital | Main operating place | Place of registration | Business nature | Shareholding ratio | Acquisition method | |
Direct | Indirect | ||||||
Zhejiang Supor Electrical Appliances Manufacturing Co., Ltd [Note 1] | 133,697,100.00 | Hangzhou | Hangzhou | Manufacturing industry | 100.00% | Establishment | |
Zhejiang Shaoxing Supor Domestic Electrical Appliances Co., Ltd [Note 1] | 610,000,000.00 | Shaoxing | Shaoxing | Manufacturing industry | 100.00% | Establishment | |
Supor (Vietnam) Co., Ltd [Note 1] | 104,934,081.16 | Vietnam | Vietnam | Manufacturing industry | 100.00% | Establishment | |
Wuhan Supor Recycling Co., Ltd [Note 1] | 1,000,000.00 | Wuhan | Wuhan | Commerce | 100.00% | Establishment |
Wuhan Supor Cookware Co., Ltd [Note 1] [Note 2] | 91,160,000.00 | Wuhan | Wuhan | Manufacturing industry | 25.00% | 75.00% | Establishment |
Hangzhou Omegna Commercial Trade Co., Ltd [Note 1] | 10,000,000.00 | Hangzhou | Hangzhou | Commerce | 100.00% | Establishment | |
Shanghai Supor Cookware Marketing Co., Ltd [Note 1] | 5,000,000.00 | Shanghai | Shanghai | Commerce | 100.00% | Establishment | |
Wuhan Supor Pressure Cooker Co., Ltd [Note 1] | 224,039,000.00 | Wuhan | Wuhan | Manufacturing industry | 100.00% | Enterprise merger under the same control | |
Zhejiang Supor Plastic & Rubber Co., Ltd. [Note 1] | 8,044,670.77 | Yuhuan | Yuhuan | Manufacturing industry | 100.00% | Enterprise merger under the same control | |
Yuhuan Supor Cookware Sales Co., Ltd. [Note 1] | 8,000,000.00 | Yuhuan | Yuhuan | Commerce | 100.00% | Enterprise merger not under the same control | |
SEADA [Note 1] | 23,314,945.98 | Singapore | Singapore | Commerce | 51.00% | Enterprise merger under the same control | |
AFS Vietnam Management Co., Ltd. [Note 1] [Note 3] | 2,453,486.50 | Vietnam | Vietnam | Commerce | 100.00% | Enterprise merger under the same control | |
Shanghai WMF Enterprise Development Co., Ltd [Note 1] | 50,000,000.00 | Shanghai | Shanghai | Manufacturing industry | 100.00% | Establishment | |
Zhejiang WMF Housewares Co., Ltd [Note 1] | 100,000,000.00 | Yuhuan | Yuhuan | Manufacturing industry | 100.00% | Establishment | |
Zhejiang Shaoxing Supor Household Products Co., Ltd. [Note 1] | 50,000,000.00 | Shaoxing | Shaoxing | Manufacturing industry | 100.00% | Establishment | |
Zhejiang Supor Large Kitchen Appliance Co., Ltd. [Note 1] | 100,000,000.00 | Shaoxing | Shaoxing | Manufacturing industry | 100.00% | Establishment | |
PT GROUPE SEB INDONESIA MSD [Note 4] | 32,714,774.74 | Indonesia | Indonesia | Commerce | 66.67% | Establishment | |
Zhejiang Supor Water Heater Co., Ltd [Note 1] [Note 5] | 100,000,000.00 | Shaoxing | Shaoxing | Manufacturing industry | 52.00% | Establishment | |
Hainan Supor E-commerce Co., Ltd [Note 1] [Note 6] | 8,000,000.00 | Hainan | Hainan | Commerce | 100.00% | Establishment | |
Hainan Tefal Trading Co., Ltd [Note 1] [Note 6] | 10,000,000.00 | Hainan | Hainan | Commerce | 100.00% | Establishment |
Unit: RMBExplanation on shareholding ratio in subsidiary different from voting ratio:
Note 1: The following are abbreviations: Zhejiang Supor Electrical, Shaoxing Supor, Supor Vietnam, Wuhan Recycling, Wuhan SuporCookware, Omegna, Shanghai Marketing, Wuhan Supor Pressure Cooker, P&R Products, Wuhan Supor, Yuhuan Sales, SEADA, AFS,Shanghai WMF Enterprise Development, Zhejiang WMF Housewares, Shaoxing Supor Housewares, Zhejiang Supor LKA, SuporWater Heater, Hainan Supor E-commerce Company and Hainan Tefal Trading Company.Note 2: The Company is subsidiary of Wuhan Supor Pressure Cooker Co., Ltd.; of which, Wuhan Supor Pressure Cooker Co., Ltdholds 75% shares and the Company holds 25% shares.Note 3: The Company holds 51% equity of SEADA, and AFS is totally held by SEADA. SEADA holds 100% shares of AFS.
Note 4: PT GROUPE SEB INDONESIA MSD was established jointly by SEADA, a subsidiary of the Company and PTMULTIFORTUNA in Indonesia this year. SEADA holds 66.67% shares and PT MULTIFORTUNA holds 33.33% shares.Note 5: Zhejiang Supor Water Heater Co., Ltd is jointly invested and established by the Company and Supor Group Co., Ltd. TheCompany holds 52% of the shares, and Supor Group Co., Ltd holds 48% of the shares.Note 6: Hainan Supor E-commerce Company and Hainan Tefal Trading Company are totally held by Zhejiang Supor Electrical.
2. Equity in joint venture or associated enterprises
(1) Insignificant joint venture or associated enterprises
Unit: RMB
XI. Government subsidies
1. Government subsidies affirmed as per receivable at the end of reporting period
□ Applicable ? Not applicable
Reasons for not receiving the expected amount of government subsidies at expected time points
□ Applicable ? Not applicable
2. Liability projects with government subsidies
□ Applicable ? Not applicable
3. Government subsidy recognized through current profits and losses
? Applicable □ Not applicable
Unit: RMB
Accounting item | Amount incurred during this period | Amount incurred during prior period |
Other incomes | 244,371,726.06 | 235,160,623.11 |
Closing balance/amount incurred during this period | Opening balance/amount incurred during prior period | |
Associated enterprise : | ||
Book value of investments in associated enterprises | 61,678,984.35 | 62,196,139.53 |
Total amount of the following items calculated based on shareholding ratio | ||
-- Net profit | -517,155.18 | -3,404,472.11 |
-- Other comprehensive income | ||
-- Total comprehensive income | -517,155.18 | -3,404,472.11 |
VII. Risks related to financial instruments
1. Various risks arising from financial instruments
(I) Risk management objectives and policiesThe Group aims to seek the appropriate balance between the risks and benefits from its use of financial instruments and tominimize the adverse effects of risks on the Group's financial performance and maximize the interests of shareholders and other equityinvestors. Based on such objectives, the Group's risk management policies are established to identify and analyze the risks faced bythe Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk is the risk that the Group may encounter fluctuation in fair value of financial instruments or future cashflows due to changes in exchange rate. The Group's foreign currency risk relates mainly to foreign currency monetary assets andliabilities of the Group. When short-term imbalance occurred to foreign currency assets and liabilities, the Group may conduct foreignexchange hedge or trade foreign currency at market exchange rate when necessary, in order to maintain the net risk exposure within anacceptable level.
The list of foreign currency financial assets and liabilities at the end of the year in Supor is shown in Note VII. 55Foreign currencymonetary items.Sensitivity analysis:
Assuming that other risk variables other than the exchange rate remain unchanged, the increase in shareholders' equities and netprofits due to the 1% appreciation of RMB due to the change in exchange rate of RMB against all foreign currencies as at 31 Decemberof the Group will be as follows. This influence is translated into RMB at the spot rate on the balance sheet date.
Shareholders' equities | Net profit | |
December 31, 2023 | ||
USD | 3,347,158.67 | 3,347,158.67 |
EUR | 1,375.88 | 1,375.88 |
GBP | 0.05 | 0.05 |
VND | -64,825.16 | -64,825.16 |
SGD | 1,363.89 | 1,363.89 |
IDR | 106,215.87 | 106,215.87 |
Total | 3,391,289.20 | 3,391,289.20 |
December 31, 2022 | ? | |
USD | 3,877,846.10 | 3,877,846.10 |
EUR | 1,792.50 | 1,792.50 |
GBP | 2.15 | 2.15 |
VND | 358,356.14 | 358,356.14 |
SGD | 1,893.94 | 1,893.94 |
IDR | 74,978.65 | 74,978.65 |
Total | 4,314,869.48 | 4,314,869.48 |
(2) Interest risk - risk for cash flow changes
Interest risk is the risk that the Group may encounter fluctuation in fair value of financial instruments or future cash flows due tochanges in market interest rate. As of December 31, 2023, the Group's Bank's loan is at a fixed interest rate, the Group's gross profitsand shareholders' equities will not be significantly affected by interest risk.
2. Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to dischargean obligation.
The monetary capital of the Group other than cash is mainly deposited in creditworthy financial institutions, and the entrustedfinancial products are issued by creditworthy financial institutions. The management considers that there is not any significant creditrisk and it is not expected to create losses to the Group as a result of default by the counterparty.
The exposure of the maximum credit risk assumed by the Group is the book value of each financial asset in the balance sheet(including derivative financial instruments). Except for the financial guarantee provided by the Group in Note XIV, the Group has notprovided any other guarantee that may expose the Group to credit risk. The exposure of the maximum credit risk assumed by the abovefinancial guarantees on the balance sheet date has been disclosed in Note XVI.
The Company's credit risk is primarily attributable to receivables. In order to control such risks, the Company has taken thefollowing measures.
(1) Receivables financing and notes receivable
Receivables financing and notes receivable of the Group is mainly bank acceptance bill receivable. The Group conducts ongoingmonitoring on receivables, to avoid significant risks in bad debts.
(2) Accounts receivable
The Group only conducts business with credible and well-reputed third parties. According to the Group's policies, creditevaluations are performed on all customers to determine the credit limit and terms applicable to the customers. In addition, the Groupconducts ongoing monitoring on accounts receivable, to avoid significant risks in bad debts.(i) Continue to strengthen risk awareness, strengthen risk management of accounts receivable, and strengthen internal control ofcustomer credit policy management. Customer credit policy adjustments are required to pass the necessary approval procedures.(ii) Keep detailed business records and accounting work. And use the records as important reference for future credit rating. Keep realtime updating on customers' information and learn their latest credit situation, in order to make suitable credit policies.
The Group's accounts receivable from related party SEB S.A. and its subsidiaries accounted for 60.95% of closing balance( December 31, 2022: 50.14%), and the Group's account receivables are expected to have less credit risk. As the Company's credit risksfall into several business partners and customers, as of December 31, 2023, 21.00% (December 31, 2022: 26.43%) of the total accountsreceivable was due from the five largest customers of the Company after deducting receivables from related party SEB S.A. TheCompany has no significant central credit risk.
(3) Other receivables
Other receivables of the Group are mainly export rebate receivable and deposit as security receivable, etc. The Group performedcollective management and ongoing monitoring on such receivables and related business to avoid significant risks in bad debts.
3. Liquidity risk
Liquidity risk is the risk that the Group may encounter deficiency of funds in meeting obligations associated with cash or otherfinancial assets settlement. Liquidity risk is possibly attributable to failure in selling financial assets at fair value on a timely basis, orfailure in collecting liabilities from counterparts of contracts, or early redemption of debts, or failure in achieving estimated cash flows.
In order to control such risk, the Group optimizes the structure of assets and liabilities, and finally maintains a balance betweenfinancing sustainability and flexibility.Financial instruments classified based on remaining time period till maturity
Item | Closing balance | ||||
Book value | Within 1 year | 1-3 years | Over 3 years | Total |
Financial assets | |||||
Monetary capital | 3,548,277,442.44 | 3,548,277,442.44 | 3,548,277,442.44 | ||
Transactional financial assets | 351,137,787.54 | 351,137,787.54 | 351,137,787.54 | ||
Notes receivable | 15,311,935.98 | 15,311,935.98 | 15,311,935.98 | ||
Accounts receivable | 2,858,247,356.03 | 2,858,247,356.03 | 2,858,247,356.03 | ||
Receivables financing | 363,532,765.35 | 363,532,765.35 | 363,532,765.35 | ||
Other receivables | 16,126,721.38 | 16,126,721.38 | 16,126,721.38 | ||
Other debt investment | 951,306,342.48 | 289,940,000.00 | 695,085,000.00 | 985,025,000.00 | |
Subtotal | 8,103,940,351.20 | 7,442,574,008.72 | 695,085,000.00 | 8,137,659,008.72 | |
Financial liabilities | |||||
Short-term borrowings | 199,741,167.36 | 200,000,000.00 | 200,000,000.00 | ||
Notes payable | 1,235,000,000.00 | 1,235,000,000.00 | 1,235,000,000.00 | ||
Accounts payable | 3,205,607,853.18 | 3,205,607,853.18 | 3,205,607,853.18 | ||
Other payables | 147,617,550.27 | 147,617,550.27 | 147,617,550.27 | ||
Other current liabilities | 10,761,655.33 | 10,761,655.33 | 10,761,655.33 | ||
Lease obligation | 224,849,380.79 | 58,560,520.38 | 117,066,276.20 | 91,225,179.97 | 266,851,976.55 |
Subtotal | 5,023,577,606.93 | 4,857,547,579.16 | 117,066,276.20 | 91,225,179.97 | 5,065,839,035.33 |
(Continued)
Item | Beginning balance | ||||
Book value | Within 1 year | 1-3 years | Over 3 years | Total | |
Financial assets | |||||
Monetary capital | 3,563,140,907.75 | 3,563,140,907.75 | 3,563,140,907.75 | ||
Transactional financial assets | 431,382,527.79 | 431,382,527.79 | 431,382,527.79 | ||
Notes receivable | 27,325,952.95 | 27,325,952.95 | 27,325,952.95 | ||
Accounts receivable | 1,926,518,118.38 | 1,926,518,118.38 | 1,926,518,118.38 | ||
Receivables financing | 235,957,044.34 | 235,957,044.34 | 235,957,044.34 | ||
Other receivables | 16,373,697.26 | 16,373,697.26 | 16,373,697.26 | ||
Other debt investment | 1,056,952,424.68 | 33,150,000.00 | 1,101,237,500.00 | 1,134,387,500.00 | |
Other current assets [note] | 381,101,095.89 | 381,101,095.89 | 381,101,095.89 | ||
Subtotal | 7,638,751,769.04 | 6,614,949,344.36 | 1,101,237,500.00 | 7,716,186,844.36 | |
Financial liabilities | |||||
Notes payable | 1,057,611,900.00 | 1,057,611,900.00 | 1,057,611,900.00 | ||
Accounts payable | 2,635,521,548.19 | 2,635,521,548.19 | 2,635,521,548.19 | ||
Other payables | 137,729,222.63 | 137,729,222.63 | 137,729,222.63 |
Other current liabilities | 22,383,800.87 | 22,383,800.87 | 22,383,800.87 | ||
Lease obligation | 192,704,856.82 | 48,581,182.84 | 108,232,041.03 | 45,611,911.42 | 202,425,135.29 |
Subtotal | 4,045,951,328.51 | 3,901,827,654.53 | 108,232,041.03 | 45,611,911.42 | 4,055,671,606.98 |
Note: Other current assets are term deposits for the purpose of obtaining interests.(II) Transfer of financial assetsTransferred but not wholly derecognized financial assetsFor details, please refer to "3. Notes receivable" in Note VII to the financial statements.XIII. Fair Value Disclosure
1. Fair value as of the balance sheet date of the assets and liabilities measured at the fair value
Unit: RMB
Item | Fair value as of the balance sheet date | |||
Level 1 | Level 2 | Level 3 | Total | |
I. Continuous fair value measurement | -- | -- | -- | -- |
(I) Transactional financial assets | 351,137,787.54 | 351,137,787.54 | ||
(II) Other debt investments | 951,306,342.48 | 951,306,342.48 | ||
(III) Receivables financing | ||||
(1) Notes receivable | 363,532,765.35 | 363,532,765.35 | ||
II. Non-continuous measurement of fair value | -- | -- | -- | -- |
2. Basis for determining the market value of continuous and non-continuous Level 1 fair value measurementitemsNone
3. Qualitative and quantitative information of continuous and non-continuous Level 2 fair valuemeasurement items, valuation techniques adopted and important parametersThe fair value of financial assets measured at fair value through profit or loss, including wealth management products,other debtinvestments and receivable financing is determined based on valuation techniques. Valuation techniques should make use of observablemarket data as much as possible and rely less on specific estimates from entities.
4. Qualitative and quantitative information of continuous and non-continuous Level 3 fair valuemeasurement items, valuation techniques adopted and important parametersNone
5. Fair value of the financial assets and financial liabilities not measured at fair value
As of December 31, there was not a significant difference between the book value and fair value of the Group's various financial assetsand financial liabilities.XI. Related parts and related transactions
1. Parent company
Parent company name | Place of registration | Business nature | Registered capital | Holding proportion over the Company (%) | Voting right proportion over the Company (%) |
SEB INTERNATIONALE S.A.S | France | Investment company | EUR 830 million | 82.64% | 82.64% |
Explanation on the parent company of the GroupBusiness scope of the parent company: equity participation in all kinds of French and overseas enterprises (regardless operationpurpose), namely, purchase and subscription of stocks, bonds, company shares and interest, various securities and marketable securities,and transfer of such securities or notes, all financial operations related to equity participation, purchase, manufacturing and selling ofhome appliances for the purpose of distribution and rendering of relevant services, all activities directly or indirectly contributing tothe realization of these operations, particularly in the areas of movable properties, real estate, finance, commerce and industry operation.The Group's final controlling party is SEB S.A.
2. Company's subsidiaries
See Note X "1. Equity in subsidiaries" for details on the Company's subsidiaries for details.
3. Joint ventures and associated enterprises of the Company
See Note X "2. Equity in joint ventures or associated enterprises" for details on the Company's significant joint ventures and associatesfor details.Details of other joint ventures or associated enterprises carrying out related party transactions with the Company in current period orin Prior period but with balance in current period are as follows:
Name of the joint venture or associated enterprise | Relationships with the Company |
Wuhan Anzai Cookware Co., Ltd. | Associated enterprise |
4. Other related parties of the Company
Related party | Relationship between other related parties and the Company |
SEB S.A. | Final controlling shareholder |
SEB ASIA LTD. | Same controlling shareholder |
TEFAL S.A.S. | Same controlling shareholder with the controlling shareholder |
S.A.S. SEB | Same controlling shareholder with the controlling shareholder |
SEB INTERNATIONAL SERVICE S.A.S. | Same controlling shareholder with the controlling shareholder |
LAGOSTINA S.P.A. | Same controlling shareholder |
GROUPE SEB MOULINEX | Same controlling shareholder with the controlling shareholder |
GROUPE SEB EXPORT | Same controlling shareholder with the controlling shareholder |
SEB DEVELOPPMENT SAS | Same controlling shareholder with the controlling shareholder |
IMUSA USA LLC | Same controlling shareholder |
Supor Group Co., Ltd. | Company controlled by related natural person |
ETHERA | Same controlling shareholder with the controlling shareholder |
WMF CONSUMER ELECTRIC GMBH | Same controlling shareholder |
WMF Consumer Goods (Shanghai) Co, Ltd. | Same controlling shareholder |
WMF GROUPE GMBH | Same controlling shareholder |
GROUPE SEB VIETNAM JOINT STOCK COMPANY | Same controlling shareholder |
GROUPE SEB SINGAPORE | Same controlling shareholder |
GROUPE SEB THAILAND | Same controlling shareholder |
Emsa Taicang Co., Ltd. | Same controlling shareholder |
Heshan Demei Tableware Co., Ltd. | Same controlling shareholder |
EMSA GMBH | Same controlling shareholder |
GROUPE SEB CANADA | Same controlling shareholder |
GROUPE SEB ANDEAN S.A. | Same controlling shareholder |
GROUPE SEB KOREA LTD. | Same controlling shareholder |
Saichuang (Zhejiang) Technology Co., Ltd. | Same controlling shareholder |
Zhejiang Nanyang Pharmaceutical Sales Co., Ltd. | Company controlled by related natural person |
5. Related transactions
(1) Related transactions in the purchase and sale of commodities, and provision and acceptance of laborservicesPurchase of commodities and receiving of services
Unit: RMB
Related party | Contents of related transaction | Amount incurred during this period | Transaction quota granted | Exceeding transaction limit or not | Amount incurred during prior period |
Wuhan Anzai Cookware Co., Ltd. | Finished products | 129,174,736.13 | No | 61,178,333.58 | |
Wuhan Anzai Cookware Co., Ltd. | Accessories | 52,505,244.94 | No | 150,874,250.24 | |
GROUPE SEB EXPORT | Finished products | 1,323,298.24 | No | 7,063,804.76 |
GROUPE SEB EXPORT | Accessories | 73,810.00 | No | 73,815.50 | |
TEFAL S.A.S. | Accessories | 20,213,451.95 | No | 7,660,045.82 | |
LAGOSTINA S.P.A. | Finished products | 2,821,255.84 | No | 2,194,942.00 | |
SEB INTERNATIONAL SERVICE S.A.S. | Accessories | 84,055.57 | No | 612,783.70 | |
SEB INTERNATIONAL SERVICE S.A.S. | Finished products | 21,064.57 | No | 29,331.02 | |
SEB ASIA LTD. | Finished products | 260,526.98 | No | 462,307.92 | |
GROUPE SEB MOULINEX | Accessories | 2,871,660.72 | No | 3,255,315.40 | |
Heshan Demei Tableware Co., Ltd. | Finished products | 184,681.57 | No | 312,749.25 | |
GROUPE SEB SINGAPORE | Finished products | 17,600.69 | No | ||
GROUPE SEB THAILAND | Finished products | 413,719.66 | No | 445,146.13 | |
Emsa Taicang Co., Ltd. | Finished products | No | 234,955.75 | ||
ETHERA | Accessories | 141,420.43 | No | 317,859.36 | |
WMF GROUPE GMBH | Finished products | 55,991,104.27 | No | 26,423,343.21 | |
WMF Consumer Goods (Shanghai) Co, Ltd. | Finished products | 10,220.71 | No | 37,726.20 | |
Supor Group Co., Ltd. | Finished products | No | 16,092.68 | ||
GROUPE SEB KOREA LTD. | Finished products | 171,210.71 | No |
Sale of commodities and rendering of services
Unit: RMB
Related party | Contents of related transaction | Amount incurred during this period | Amount incurred during prior period |
SEB ASIA LTD. | Finished products | 5,718,651,248.45 | 4,535,035,472.36 |
SEB ASIA LTD. | Accessories | 22,355,391.81 | 3,163,380.97 |
S.A.S. SEB | Finished products | 15,722,826.89 | 13,690,166.60 |
S.A.S. SEB | Accessories | 471,895.40 | 673,421.95 |
TEFAL S.A.S. | Finished products | 2,674,842.16 | 7,069,905.25 |
TEFAL S.A.S. | Accessories | 18,245,450.86 | 13,666,486.47 |
GROUPE SEB MOULINEX | Finished products | 14,344,236.48 | 18,525,086.93 |
Supor Group Co., Ltd. | Finished products | 9,976,697.94 | 4,424,241.51 |
SEB INTERNATIONAL SERVICE S.A.S. | Accessories | 20,175,797.39 | 16,484,863.62 |
LAGOSTINA S.P.A. | Finished products | 49,269.52 | |
LAGOSTINA S.P.A. | Accessories | 440,230.62 | 1,233,592.65 |
IMUSA USA LLC | Finished products | 7,559,422.13 | 16,285,333.26 |
IMUSA USA LLC | Accessories | 43,099.33 | 33,167.16 |
WMF Consumer Goods (Shanghai) Co, Ltd. | Finished products | 226,850.81 | 351,115.82 |
GROUPE SEB CANADA | Finished products | 11,070,592.32 | 14,164,254.85 |
GROUPE SEB VIETNAM JOINT STOCK COMPANY | Finished products | 13,592,296.18 | 24,481,079.33 |
GROUPE SEB VIETNAM JOINT STOCK COMPANY | Accessories | 11,237.73 | |
GROUPE SEB ANDEAN S.A. | Accessories | 1,520,747.00 | 3,513,457.99 |
Wuhan Anzai Cookware Co., Ltd. | Accessories | 42,226.55 | |
Zhejiang Nanyang Pharmaceutical Sales Co., Ltd. | Finished products | 881,453.10 |
(2) Related party leases
The Company as the lessee:
Unit: RMB
Leaser | Types of leased assets | Rent costs of short-term leases and low-value asset leases with simplified treatment (if applicable) | Variable lease payments not included in the measurement of lease obligation (if applicable) | Rentals | Interest expense of lease obligation undertaken | Increased right-of-use asset | ||||||
Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | Amount incurred during this period | Amount incurred during prior period | |||
Supor Group Co., Ltd. | Real estate | 149,534.29 | 12,772,020.32 | 12,129,528.70 | 2,898,045.38 | 1,856,154.47 | 25,053,608.23 | 5,861,859.68 |
(3) Fund allocation of the related parts
Unit: RMB
Related party | Borrowed/lent amount | Start date | Expiry date | Notes |
Borrowing | ||||
SEB S.A. | 1,724,666.42 | January 1, 2023 | Open-ended | Loan |
(4) Key management's emoluments
Item | Amount incurred during this period | Amount incurred during prior period |
Key management's remuneration | RMB 15,275,700 | RMB 15,193,300 |
Equity incentive and performance incentive fund for key management personnel | RMB 7,182,900 | RMB 4,425,300 |
(5) Other related transactions
① Water and electricity fee
Unit: RMB
Selling parties | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
Supor Group Co., Ltd. | Zhejiang Supor Electrical | 106,169.13 |
②Property management, maintenance and berth fees
Unit: RMB
Service renderer | Purchasing parties | Amount incurred in current year | Amount incurred during prior period |
Supor Group Co., Ltd. | The Company | 171,428.57 | |
Zhejiang Supor Electrical | 308,571.43 | 308,571.43 | |
Wuhan Supor Cookware | 177,142.86 | 354,285.71 |
③Consulting fee
Unit: RMB
Service renderer | Purchasing parties | Amount incurred in current year | Amount incurred during prior period |
SEB ASIA LTD. | The Company | 1,114,578.46 | 1,061,677.75 |
Wuhan Supor Cookware | 813,341.40 | 774,741.96 | |
Shaoxing Supor | 572,353.11 | 545,185.33 | |
Zhejiang Supor Electrical | 512,104.35 | 487,799.51 |
④ R&D and human resources services
Unit: RMB
Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
Zhejiang Supor Electrical | Saichuang (Zhejiang) Technology Co., Ltd. | 586,266.58 | 483,081.29 |
AFS | GROUPE SEB VIETNAM JOINT STOCK COMPANY | 2,881,836.67 | 3,023,118.45 |
Saichuang (Zhejiang) Technology Co., Ltd. | Shaoxing Supor | 4,286,270.02 | 3,018,082.00 |
⑤Warehousing service
Unit: RMB
Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
The Company | SEB ASIA LTD. | 1,691,731.29 | |
Wuhan Supor Cookware | 629,912.40 | ||
Shaoxing Supor | 1,764,063.02 |
⑥Interest expense
Unit: RMB
Selling parties | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
SEB S.A. | SEADA | 596,062.26 | 142,176.51 |
⑦Software use license, etc.
Unit: RMB
Service renderer | Purchasing parties | Amount incurred during this period | Amount incurred during prior period |
SEB DEVELOPPMENT SAS | The Company | 1,145,521.04 | 1,629,059.37 |
⑧ Pursuant to the Technical License Contract entered into between Wuhan Supor Cookware Co., Ltd and S.A.S. SEB onDecember 29, 2013, S.A.S.SEB licensed Wuhan Supor Cookware Co., Ltd compensated use of its patent of Household Appliance forFood Cooking under Pressure with Elastomer Safety Valve and other four utility patents. According to related terms and conditions inthe contract signed by both parties, use charges are accrued at 3% of revenue from sales of products licensed. In the current period,Wuhan Supor Cookware Co., Ltd should pay S.A.S.SEB technology use charges of RMB 986,969.97 (2022: RMB 526,305.07), andas of December 31, 2023, a balance of RMB 111,278.17 has not been paid (December 31, 2022: RMB 94,651.13).
⑨ Pursuant to the Trademark License entered into between Wuhan Supor Cookware Co., Ltd and LAGOSTINA S.P.A. onDecember 15, 2014, LAGOSTINA S.P.A licensed Wuhan Supor Cookware Co., Ltd for compensated use of its trademark "LAGE".According to related terms and conditions in the contract signed by both parties, use charges are accrued at 4% of revenue from salesof products licensed. In the current period, Wuhan SUPOR should pay LAGOSTINA S.P.A. trademark use charges of RMB 1,071.69(2022: RMB 43,093.45), and as of December 31, 2023, a balance of RMB 1,071.69 has not been paid (December 31, 2022: RMB1,395,659.11).
⑩Pursuant to the Trademark License entered into between Omegna and LAGOSTINA S.P.A. on December 5, 2016,LAGOSTINA S.P.A licensed Omegna for compensated use of its trademark "LAGE". According to related terms and conditions inthe contract signed by both parties, use charges are accrued at 4% of revenue from sales of products licensed. In the current period,Omegna should pay LAGOSTINA S.P.A. trademark use charges of RMB 6,525.10 (2022: RMB 66,105.73), and as of December 31,2023, a balance of RMB 3,392,562.80 has not been paid (December 31, 2022: RMB 3,989,846.80).
?Shaoxing Supor purchased and used particles product of air purifier and relevant technology in accordance with Agreement onPurchase and Using for Particles of Air Purifier signed by Shaoxing Supor on April 25, 2016 with ETHERA. According to relevantterms and conditions in the contract signed by both parties, Shaoxing Supor should pay technology transfer fee RMB 8,621.96 (2022:
RMB 22,268.70) to ETHERA in current period, which was calculated as per corresponding unit price of actual total sales. UntilDecember 31, 2023, all payments have been made (December 31, 2022: RMB 4,424.04).
6. Receivables and payables by related parties
(1) Receivables
Unit: RMB
Items | Related party | Closing balance | Opening balance | ||
Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Accounts receivable: | SEB ASIA LTD. | 1,780,235,700.55 | 53,407,071.02 | 977,231,667.49 | 34,203,108.36 |
S.A.S. SEB | 1,406,560.86 | 42,196.83 | 838,044.35 | 29,331.55 | |
TEFAL S.A.S. | 5,793,936.65 | 173,818.10 | 3,220,589.96 | 112,720.65 | |
SEB INTERNATIONAL SERVICE S.A.S. | 5,586,161.59 | 167,584.85 | 3,296,335.17 | 115,371.73 | |
GROUPE SEB MOULINEX | 5,481,313.07 | 166,201.95 | 1,423,208.22 | 51,536.52 | |
IMUSA USA LLC | 1,802,613.02 | 54,078.39 | 3,605,881.82 | 126,205.86 | |
Supor Group Co., Ltd. | 16,238.60 | 811.93 | 11,010.00 | 550.50 | |
WMF Consumer Goods (Shanghai) Co, Ltd. | 101,518.92 | 3,045.57 | 152,845.67 | 5,349.60 | |
GROUPE SEB CANADA | 1,337,688.11 | 40,130.64 | 1,896,331.22 | 66,371.59 | |
GROUPE SEB VIETNAM JOINT STOCK COMPANY | 5,001,845.80 | 150,055.37 | 14,774,836.65 | 517,119.28 |
GROUPE SEB ANDEAN S.A. | 304,479.89 | 9,134.40 | 112,622.53 | 3,941.79 | |
Wuhan Anzai Cookware Co., Ltd. | 16,500.00 | 825.00 | |||
LAGOSTINA S.P.A. | 53,387.75 | 1,601.63 | 173,612.18 | 6,076.43 | |
Saichuang (Zhejiang) Technology Co., Ltd. | 347,080.36 | 10,412.41 | 261,025.21 | 9,135.88 | |
Total | 1,807,468,525.17 | 54,226,143.09 | 1,007,014,510.47 | 35,247,644.74 | |
Advance payment: | Supor Group Co., Ltd. | 171,428.57 | |||
EMSA GMBH | 197.55 | ||||
Total | 197.55 | 171,428.57 | |||
Other receivables: | Supor Group Co., Ltd. | 165,000.00 | 98,500.00 | 145,000.00 | 56,250.00 |
Total | 165,000.00 | 98,500.00 | 145,000.00 | 56,250.00 |
(2) Payables
Unit: RMB
Items | Related party | Ending book balance | Beginning book balance |
Accounts payable: | Wuhan Anzai Cookware Co., Ltd. | 19,000,235.48 | 17,508,276.00 |
WMF GROUPE GMBH | 8,344,358.20 | 6,861,332.34 | |
GROUPE SEB EXPORT | 73,810.00 | 1,836,117.60 | |
TEFAL S.A.S. | 4,296,587.82 | 2,376,975.15 | |
S.A.S. SEB | 113,921.35 | 94,651.13 | |
LAGOSTINA S.P.A. | 5,725,894.53 | 5,386,105.91 | |
GROUPE SEB MOULINEX | 1,356,062.24 | 131,149.87 | |
GROUPE SEB THAILAND | 71,925.59 | 43,382.55 | |
SEB INTERNATIONAL SERVICE S.A.S. | 17,570.25 | 114,692.08 | |
ETHERA | 54,519.37 | 4,424.04 | |
Saichuang (Zhejiang) Technology Co., Ltd. | 718,456.36 | 578,673.08 | |
Supor Group Co., Ltd. | 6,536.00 | ||
Heshan Demei Tableware Co., Ltd. | 53,230.00 | ||
WMF Consumer Goods (Shanghai) Co, Ltd. | 129.00 | 42,630.61 | |
SEB ASIA LTD. | 152,068.55 | ||
SEB DEVELOPPMENT SAS | 1,030,968.94 | ||
Total | 40,963,043.68 | 35,031,640.36 | |
Contract liabilities: | Supor Group Co., Ltd. | 381,292.07 | 6,208,467.16 |
Total | 381,292.07 | 6,208,467.16 |
Other payables: | Wuhan Anzai Cookware Co., Ltd. | 50,000.00 | 50,000.00 |
SEB S.A. | 15,611,300.30 | 13,886,668.74 | |
Total | 15,661,300.30 | 13,936,668.74 | |
Lease obligation: | Supor Group Co., Ltd. | 52,956,539.46 | 36,660,807.71 |
Total | 52,956,539.46 | 36,660,807.71 |
XV. Share-based payment
1. Overall information
? Applicable □ Not applicable
Unit: RMB
Category of grant objects | Grant in the current period | Exercise in the current period | Release in the current period | Invalidation in the current period | ||||
Share number | Amount | Share number | Amount | Share number | Amount | Share number | Amount | |
Administrative personnel | 751,526 | 10,988,338.89 | 75,750 | 4,211,242.85 | ||||
Sales personnel | 206,510 | 2,362,474.40 | ||||||
R&D personnel | 195,964 | 2,241,828.16 | ||||||
Total | 1,154,000 | 15,592,641.45 | 75,750 | 4,211,242.85 |
Outstanding stock options or other equity instruments at the end of the period? Applicable □ Not applicableRestricted stock incentive plans for 2021 and 2022:
Category of grant objects | Outstanding Restricted stock options at the end of the period | Outstanding other equity instruments at the end of the period | ||
Scope of the exercise price | Remaining contract term | Scope of the exercise price | Remaining contract term | |
Administrative personnel /Sales personnel/ R&D personnel | 1 yuan/share | 2.08-2.83 years |
2023 Stock Option Incentive Plan:
Category of grant objects | Outstanding stock options at the end of the period | Outstanding other equity instruments at the end of the period | ||
Scope of the exercise price | Remaining contract term | Scope of the exercise price | Remaining contract term | |
Administrative personnel /Sales personnel/ R&D personnel | 36.49 yuan/share | 3.83 years |
2. Equity-settled share-based payment
? Applicable □ Not applicable
Unit: RMB
Restricted stock incentive plans for 2021 and 2022 | Relevant content |
Determination method for fair value of equity instruments on grant date | According to the market price on the grant date |
Determination method for the optimal estimate of the number of equity instruments expected to vest | Based on the corresponding equity instruments of incentive targets, the performance of the Company and the forecast of future performance of the Company |
The significant difference between this period estimate and last period | None |
Capital reserve accumulated due to equity-settled share-based payment | 97,320,132.85 |
Total expenses incurred due to equity-settled share-based payment transactions | 42,472,896.87 |
2023 Stock Option Incentive Plan | Relevant content |
Determination method for fair value of equity instruments on grant date | Fair value calculated according to the Black-Scholes model |
Important parameters of fair value of equity instruments on grant date | Expected dividend, historical volatility, risk-free interest rate |
Determination method for the optimal estimate of the number of equity instruments expected to vest | Based on the corresponding equity instruments of incentive targets, the performance of the Company and the forecast of future performance of the Company |
The significant difference between this period estimate and last period | None |
Capital reserve accumulated due to equity-settled share-based payment | 3,313,411.05 |
Total expenses incurred due to equity-settled share-based payment transactions | 3,313,411.05 |
Other remarks:
According to the 2022 Stock Incentive Plan adopted on the Company's First Interim General Meeting of Shareholders in 2022 onSeptember 21, 2022, the Company repurchased 1,332,500 shares of its own stocks for the plan through centralized competitive biddingwith self-owned capital, adding RMB 69,398,019.65of treasury shares. On October 12, 2022, the Company granted 1,253,500 sharesto the incentive object at a grant price of RMB 1.00 per share, with a decrease of treasury share value of RMB 65,668,429.65, andreverse undistributed profit at the beginning of the year of RMB 64,414,929.65. At the same time, the company confirmed its stockrepurchase obligation and increased its treasury stock by RMB 1,253,500.00.On February 1, 2023, the company granted 79,000 shares to the remaining incentive recipients at a grant price of RMB 1.00 per share,with a decrease of treasury share value of RMB 3,650,590.00 and offsets the beginning undistributed profits by RMB 3,650,590.00. Atthe same time, the company confirms its stock repurchase obligation and increases its treasury stock by RMB 79,000.00.The impact of2021 Equity Incentive Plan on the capital reserve is RMB 40,084,396.00 at the beginning of the period, and with an accrual of RMB18,877,106.97 in the year, amounting to an accrued amount of RMB 58,961,502.97.The impact of 2022 Equity Incentive Plan on the capital reserve is RMB 14,762,839.98 at the beginning of the period, and with anaccrual of RMB 23,595,789.90 in the year, amounting to an accrued amount of RMB 38,358,629.88.The impact of 2023 Equity Incentive Plan on the capital reserve is RMB 0 at the beginning of the period, and with an accrual of RMB3,313,411.05 in the year, amounting to an accrued amount of RMB 3,313,411.05.
3. Share-based payment expenses for this year
? Applicable □ Not applicable
Unit: RMB
Category of grant objects | Equity settled share based payment expenses |
Administrative personnel | 29,398,068.74 |
Sales personnel | 8,970,896.48 |
R&D personnel | 7,417,342.70 |
Total | 45,786,307.92 |
XII. Commitments and contingencies
1. Contingencies
(1) Significant contingencies at the balance sheet date
In 2016, a private patent holder filed a lawsuit against the subsidiary Shaoxing Supor for patent infringement. In 2020, the relatedpatent rights held by the plaintiff had been declared invalid by the Patent Reexamination Board of the China National IntellectualProperty Administration. In 2023,the litigation case has been issued an administrative ruling by the Beijing Intellectual Property Court,which will be processed as the plaintiff withdrawing the lawsuit. Therefore, the original provision of RMB 5.15 million in estimatedliabilities has been reversed . In 2020, export customers filed legal proceedings against Shaoxing Supor, a subsidiary, on the groundsof user disputes. This case has not been settled yet. Based on the principle of conservatism, the Company still retains an estimatedliability of RMB 4 million (December 31, 2022: RMB 4 million) on December 31, 2023. In 2021, export customers filed claims forproduct quality issues against the subsidiary Shaoxing Supor on the grounds of user disputes. One of the claims was settled in theperiod, and the Company bore the cost of RMB 461,300. Due to the uncertainty of another claim and considering the principle ofconservatism, Supor reserved an estimated liability of RMB 1,538,700 as at Dec 31, 2023 (December 31, 2022: RMB 2 million).Contingent liabilities formed by financial guarantee and their financial impactThe Group signs tripartite acceptance agreements with distributors and banks, and the Group provides financing guarantee for thebanks to issue bank acceptance bills to the distributors. In the event that the Group endorses and assigns an acceptance bill obtained bythe Group, and if the distributor fails to repay the difference between the security and the amount of the acceptance bill after thematurity of the acceptance bill, the Group will bear part of the loss of the difference that the bank has not recovered from the distributor.As of December 31, 2023, the risk exposure undertaken by Supor is RMB 343.9136 million (December 31, 2022: RMB 298.0883million), and the Company has provisioned a total estimated liability of RMB 1.7197 million (December 31, 2022: RMB 1.4904 million)under financial guarantee contracts for this risk exposure.
(2) A statement shall be given even if the Company has no significant contingencies to disclose.The Company has no significant contingencies to disclose.XVII. Events after the balance sheet date
1. Profit distribution
According to the profit distribution plan for 2023 adopted at the 7th Session of the Eighth Board of Directors of the Company onMarch 29, 2024, Company distributes cash dividend of 796,891,157 shares at the end of 2023 (total share capital of 806,708,657 sharesat the end of 2023 deducted by 9,817,500 shares of special securities account for repurchase), a cash dividend of RMB 27.30 (tax-
inclusive) per 10 shares is distributed to all shareholders, and the total cash dividend was RMB 2,175,512,858.61. No bonus share willbe distributed or conversion from capital reserves to share capital is made this year The undistributed profits of parent company at theend of the reporting period were RMB 3,782,559,441.04, including the dividends to be distributed RMB 2,175,512,858.61.During the period from the disclosure of this profit distribution plan to the actual implementation date, if the Company's sharecapital changes due to conversion of convertible bonds into stocks, share repurchases, equity incentive exercise, and refinancing andnew share listing, it will be executed based on the changed share capital, and the above distribution ratio remains unchanged.This profit distribution plan shall be submitted to the Annual General Meeting of Shareholders for 2023 Fiscal Year for approvalafter adopted by the Board of Directors.XVIII. Other important matters
1. Segment information
(1) Determination basis and accounting policy of report segment
The Group establishes operating segment according to internal organizational structure, management requirement and internalreport system; determines report segment and disclose segment information based on Operating Segment.Operating Segment refers to the Group's organization meeting following conditions: (1) The organization can yield revenue andcost in daily activity; (2) The Group's management can appraise operating result of the organization regularly to allocate resources ona targeted basis and evaluate its performance; (3) The Group can obtain financial condition, operating result, cash flow and otherrelevant accounting information of the organization. Two or more operating segments, which have similar economic characteristicsand meet a certain condition, can be combined into an operating segment.The preparation of segment reports is conducted with the revenue of trans-branch transaction measured at the actual transactionprice. The accounting policy for segment report preparation is consistent with that used in Supor's financial statement.
The Group, with main product focused on cookware and SDA (small domestic appliances) in kitchen, establishes report segmentbased on product and geographic segments and assets and liabilities shared by product segments is unable to be clearly distinguished.
(2) Financial information of reportable segments
Unit: RMB
Item | Cookware | Electrical products | Others | Inter-segment offsetting | Total |
Revenue from main business | 6,159,739,779.99 | 14,995,308,681.62 | 166,805,821.68 | 274,392,569.16 | 21,047,461,714.13 |
Cost of main business | 4,438,233,089.06 | 11,173,663,650.69 | 144,875,976.65 | 273,853,897.16 | 15,482,918,819.24 |
(3) Other explanations
② Geographic segment
Information on the Group's revenue from external transactions and non-current assets (excluding financial assets and deferredincome tax assets, the same below) by region is shown in the following table. Revenue from external transactions is divided accordingto the location of customers who receive services or purchase products. Non-current assets are classified as per the physical locationof the assets (for fixed assets and construction in progress) or the location where they are allocated to related business (for intangibleassets) or the location of joint ventures and associated enterprises.
Item | Domestic | Foreign | Inter-segment offsetting | Total |
Revenue from main business | 14,937,286,741.50 | 6,131,661,653.35 | 21,486,680.72 | 21,047,461,714.13 |
Cost of main business | 10,465,424,512.47 | 5,038,996,154.59 | 21,501,847.82 | 15,482,918,819.24 |
Non-current assets | 2,033,564,424.41 | 67,703,834.14 | 117,033,788.09 | 1,984,234,470.46 |
③ Major customers
Among the Group's customers, one customer (2022: 1) whose revenue from a single customer accounted for 10% or more of theGroup's total revenue was related party SEB S.A. and its subsidiaries, accounting for approximately 27.45% (2022: 23.18%) of theGroup's total revenue.XIX. Notes to items of parent company financial statements
1. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Ages | Ending book balance | Beginning book balance |
Within 1 year (including 1 year) | 639,632,187.73 | 385,526,579.20 |
1-2 years | 9,778.58 | |
Total | 639,632,187.73 | 385,536,357.78 |
(2) Classified disclosure by the bad debt provision method
Unit: RMB
Categories | Closing balance | Opening balance | ||||||||
Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
Accounts receivable for provision for bad debts made on the basis of portfolio | 639,632,187.73 | 100.00% | 15,501,798.17 | 2.42% | 624,130,389.56 | 385,536,357.78 | 100.00% | 10,937,615.03 | 2.84% | 374,598,742.75 |
Including: | ||||||||||
Portfolio 1: age portfolio | 515,929,581.71 | 80.66% | 15,395,153.38 | 2.98% | 500,534,428.33 | 312,435,311.86 | 81.04% | 10,880,503.86 | 3.48% | 301,554,808.00 |
Portfolio 2: low-risk portfolio | 106,644,785.32 | 16.67% | 106,644.79 | 0.10% | 106,538,140.53 | 57,111,169.92 | 14.81% | 57,111.17 | 0.10% | 57,054,058.75 |
Portfolio 3: merged related parties portfolio | 17,057,820.70 | 2.67% | 0.00% | 17,057,820.70 | 15,989,876.00 | 4.15% | 15,989,876.00 |
Total | 639,632,187.73 | 100.00% | 15,501,798.17 | 2.42% | 624,130,389.56 | 385,536,357.78 | 100.00% | 10,937,615.03 | 2.84% | 374,598,742.75 |
Categories for bad debts provision: Portfolio 1Provision for bad debts made on a portfolio basis: RMB 15,395,153.38
Unit: RMB
Name | Closing balance | ||
Book balance | Provision for bad debts | Provision proportion | |
Within 1 year | 515,929,581.71 | 15,395,153.38 | 2.98% |
Total | 515,929,581.71 | 15,395,153.38 |
If yes, a provision for bad debts for accounts receivable shall be accrued according to the general model of expected credit loss:
□ Applicable ? Not applicable
(3) Provision for bad debts made, collected or reversed in current period
Provision for bad debts made in current period:
Unit: RMB
Categories | Opening balance | Amount of changes in current period | Closing balance | |||
Accrued | Collected or reversed | Written off | Others | |||
Provision for bad debts for accounts receivable | 10,937,615.03 | 4,564,183.14 | 15,501,798.17 | |||
Total | 10,937,615.03 | 4,564,183.14 | 15,501,798.17 |
(4) Accounts receivable and contract asset details of the top 5 closing balances by debtors
Unit: RMB
Entity name | Closing balance of accounts receivable | Closing balance of contract asset | Accounts receivable and closing balance of contract asset | Proportion in the sum of accounts receivable and closing balance of contract asset | Closing balance of impairment provision for bad debts for accounts receivable and impairment provision for contract assets |
SEB S.A. and its subsidiaries | 514,734,045.73 | 514,734,045.73 | 80.47% | 15,442,021.37 | |
Customer E | 98,045,649.44 | 98,045,649.44 | 15.33% | 98,045.65 | |
Supor Vietnam | 9,915,898.56 | 9,915,898.56 | 1.55% | ||
Wuhan Supor Cookware | 3,260,961.20 | 3,260,961.20 | 0.51% | ||
Shanghai WMF | 3,079,967.24 | 3,079,967.24 | 0.48% | ||
Total | 629,036,522.17 | 629,036,522.17 | 98.34% | 15,540,067.02 |
2. Other receivables
Unit: RMB
Item | Closing balance | Opening balance |
Other receivables | 674,127,502.50 | 1,174,381,191.82 |
Total |