2021AnnualReportApril2022
April2022MideaGroupCo.,Ltd.
MideaGroupCo.,Ltd.Stockcode:000333
LettertoShareholdersThisisacenturyofchange.Afallingleafrevealsthecomingofthefall,andeachleaf,eachperson,canfeelthechangesofthisgreatera.WewouldliketopaytributetotheperseveranceanddedicationofeveryMideaemployee,helpinguschaseourdreamsregardlessofwhatthefutureholds.TheirstrongwillandyearningforthefuturehavebecomethestrengthtocontinuethesuccessandwarmthofMidea.WewouldalsoliketopaytributetoourshareholderswhohavebeenloyaltoMideaforsolong.Inaturbulentyearofhugechangesandmarketfluctuations,theirlong-standingtrustandinsistenceonlong-termvalueareinvaluable.Withadecadeoftransformation,Midea'srevenueexceededRMB300billionforthefirsttime.Forthesixthconsecutiveyear,MideawasincludedintheFortuneGlobal500list.Meanwhile,Mideawasrecognizedasoneof"ForbesChina2021Top10ChineseCompaniesinIndustrialDigitalTransformation".Also,fourfactoriesofMideahavebeenincludedinthe“GlobalLighthouseNetwork”initiatedbytheWorldEconomicForum.Evenmoreexceptionally,despitethesubstantialincreaseinvariouscostsrelatedtocommodities,shippinglogistics,andenergysupplies,Mideawasstillabletomaintainprofitability,demonstratingitsresilience.Thereisneitherabettereranoraworseera,onlyanewera.Thechangesofthetimeshaveledtodisruptivechangesinmanyindustries.Everymajorchangeandcrisisarelikebigwavesinthesea,andafterthewaveebbsaway,high-qualitycompaniesstandout.Inthisgreatera,nopathisentirelysmooth,norisanypathsetinstone,andagreatcompanywillinevitablyundergodifferentcycles.Inthisera,uncertaintyhasbecomethenormandpartofthemainstream,whilethepandemiccrisishasservedasanacceleratorforsomecompaniestoenhancetheircompetitivenessandforthecommercialcompetition.However,technology-driventransformationremainsthemainthemeofthecurrentera.Theemergenceandin-depthapplicationofartificialintelligenceanddigitaltechnologies,rapidchangesinuserneedsandthestrengtheningoftheawarenessofconsumersovereignty,aswellasthecontinuousupsanddownsofthemarkethaveallsignificantlypromotedthe
progressoftechnology-driventransformation.Mideaneedstotrulylistentothevoiceofthisera,faceuptoreality,seekcontinuousevolution,graspcertaintiesamiduncertaintiestobuildstrengths,andinnovateandchangeforgreatergrowthinordertoadapttothetimesandshapeabrighterfuture.Acompanyeitherprospersinmakingchangesorperishesinmediocrity.Allseedsofdestructionareplantedattheheightofbusinessprosperity.Allgoodness,excellenceandgreatnessaremeanttobebroken,justlikeallathleterecords.Adecadeofcourseresettingliesahead.WithagreatstorywovenbyallMideans,Mideamustbethefirsttoapplyindustry-leadingtechnologies,createasecondgrowthcurveattheoptimumtime,andopenupanewavenueforgrowth.Itmustalsoupgradeandtransformitselffromaworld-leadinghomeappliancemanufacturertoatechnology-andinnovation-drivengroupbycontinuallyreformingandchallengingitself.Inthecurrenttimeandthenewdecadeahead,Midea'skeybusinessprincipleistoimplementnewstrategiestoboostnewgrowthareas,includingnewbusinessmodels,newprocesses,newtechniques,newalternativematerials,newproducts,newtechnologybreakthroughs,newbrands,newchannels,newmarketingmethods,newnationalmarketbreakthroughs,amongothers.Innovationistodothingswehavenotdonebefore,anditrequiresourcourageandournewmindset.Ourmissionandvisionarethecornerstonesofoureverlastingbusinesssuccess.Mideahasrepositioneditsfivebusinesssegmentsandestablishedthenewstrategicfocusesof"TechnologyLeadership,Digitization&IntelligenceDriven,DirecttoUsers,andGlobalImpact".Intheprocessofimplementingnewstrategiestoboostthenewgrowthareas,operatingefficiencyisthekeytoMidea'ssurvivalandcompetitiveness,technologyandinnovationarethefoundationsofMidea,andthecustomer-orientedapproachisthestartingpointforallbusinesslogic.Inthiscoldwinter,weshouldfurtherinvestinthefuture,acceleratetheupgradingofexistingoperationsandthecreationoffurthergrowth,retainthe"NumberOneEngine"ofthecorehomeappliancebusiness,adheretolong-termtechnologyinvestment,thoroughlypromoteIoTanddigitaltransformation,andaccelerateproductintelligentupgradesand
overallsmarthomebusinessimprovement.Wemustconsolidateourexistingstrengths.Meanwhile,giventhegrandbackdropofintelligentmanufacturing,energyconservationandemissionreduction,anddomesticsubstitution,wemustbedecisiveinourdeploymentandacceleratethetakeoffofourfourcoreenginesofrobotics&automation,buildingtechnologies,energymanagement,andintelligenttravel.Mideawillcontinuetoimproveoperatingefficiency,maintainthestabilityofprofitability,advocatelong-termismandaltruism,maketherightchoices,andinvestinthefuture,intechnologies,andintalent.Today,Mideaalreadyhasallthestrengthsnecessaryforgrowthoverthelongrun."FaithinaSeed"isourreviewofthepastandourexpectationsforthefuturetomarktheoccasionofMidea’s50thanniversary.ThismagnificenttreethatisMideatodaymustbefirmlybuilttogrowintoanevergreentree,onethathasathicktrunkandrootsreachingdeeplyintothesoilsothatthebranchesandleaveshavethenourishmenttheyneed.Thetrunkrepresentsourcorebusiness,whilethedensebranchesrepresentthefurtherinnovationandgrowththatweneedtocreate.Midea'sadvancedgovernancemechanism,adaptivevaluesandideas,andmanagerialmindsetgrowtharetheessentialrootofthetreeofMidea.Onlyifitistrulybuilttogrow,willMideabeabletocontinueprosperingfarintothefuture.Thisturningpointwillpasseventually.Inthefaceofacenturyofgreatchangeandaturbulentworld,thereisnowayofknowingwhatwillhappen,butdedicationisthebestfarewell.Youthhasnoage,stayyounginside.Mideastaysyoungbecauseitdarestoreform,innovateandchallengeitself.Ifyoudon’tknowwheretogo,everyroadwilltakeyouahead.Aswemakeourwayforward,welookforwardtocontinuingtowitnessthesustainedgrowthoftheMideatreetogetherwithallourshareholders.
BoardofDirectors,MideaGroup
April2022
SectionIImportantStatements,ContentsandDefinitions
TheBoardofDirectors,theSupervisoryCommittee,directors,supervisorsandseniormanagementofMideaGroupCo.,Ltd.(hereinafterreferredtoasthe“Company”)herebyguaranteethattheinformationpresentedinthisreportisfreeofanymisrepresentations,misleadingstatementsormaterialomissions,andshalltogetherbewhollyliableforthetruthfulness,accuracyandcompletenessofitscontents.Mr.FangHongbo,ChairmanoftheBoardandCEOoftheCompany,Ms.ZhongZheng,CFOandDirectorofFinanceoftheCompany,andMs.ChenLihong,headoftheaccountingdepartmentoftheCompany,haverepresentedandwarrantedthatthefinancialstatementsinthisreportaretrue,accurateandcomplete.AlldirectorsoftheCompanyattendedtheBoardmeetingtoreviewthisreport.Thefutureplansandotherforward-lookingstatementsmentionedinthisreportshallnotbeconsideredaspromisesoftheCompanytoinvestors.Therefore,investorsarekindlyremindedtopayattentiontopossibleinvestmentrisks.TheBoardhasconsideredandapprovedthefollowingdividendpayoutplan:basedonthe6,869,123,038sharesatthedisclosuredateofthisreport(thetotalsharecapitalof6,997,053,441sharesminustherepurchased127,930,403sharesinthereposecuritiesaccountatthatdate),itisproposedthattheCompanyshoulddistributeacashdividendofRMB17(taxinclusive)per10sharestoalltheshareholdersandshouldnotcarryoutanybonusissueorconvertcapitalsurplusintosharecapital.ThisreporthasbeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail.
Contents
LETTERTOSHAREHOLDERS ...... 2SECTIONIIMPORTANTSTATEMENTS,CONTENTSANDDEFINITIONS.................................
SECTIONIICOMPANYPROFILEANDKEYFINANCIALRESULTS ...... 9
SECTIONIIIMANAGEMENTDISCUSSIONANDANALYSIS ...... 15SECTIONIVCORPORATEGOVERNANCE...................................................................................
SECTIONVENVIRONMENTALANDSOCIALRESPONSIBILITY ...... 151
SECTIONVISIGNIFICANTEVENTS ...... 182SECTIONVIICHANGESINSHARESANDINFORMATIONABOUTSHAREHOLDERS......
SECTIONVIIIPREFERENCESHARES ...... 218
SECTIONIXBONDS ...... 219SECTIONXFINANCIALREPORT....................................................................................................
DocumentsAvailableforReference
1.TheoriginalofThe2021AnnualReportofMideaGroupCo.,Ltd.signedbythelegalrepresentative;
2.Thefinancialstatementssignedandstampedbythelegalrepresentative,theCFO&DirectorofFinanceandtheheadoftheaccountingdepartment;
3.Theoriginaloftheauditor’sreportwiththesealoftheaccountingfirm,andsignedandstampedbyCPAs;
4.TheoriginalsofallcompanydocumentsandannouncementsthataredisclosedtothepublicvianewspaperdesignatedforinformationdisclosureduringtheReportingPeriod;and
5.TheelectronicversionofThe2021AnnualReportthatisreleasedonhttp://www.cninfo.com.cn.
Definitions
| Term | Definition |
| The“Company”,“Midea”,“MideaGroup”orthe“Group” | MideaGroupCo.,Ltd. |
| MideaHolding | MideaHoldingCo.,Ltd. |
| KUKA | KUKAAktiengesellschaft |
| TLSC | ToshibaLifestyleProducts&ServicesCorporation |
| Hiconics | HiconicsEco-energyTechnologyCo.,Ltd. |
| WDM | BeijingWandongMedicalTechnologyCo.,Ltd. |
| Swisslog | SwisslogHoldingAG |
| Servotronix | ServotronixMotionControlLtd. |
| WINONE | WINONEElevatorCompanyLimited |
| ReportingPeriod | 1January2021to31December2021 |
SectionIICompanyProfileandKeyFinancialResults
1.CorporateInformation
| Stockname | MideaGroup | Stockcode | 000333 |
| StockexchangewherethesharesoftheCompanyarelisted | ShenzhenStockExchange | ||
| NameoftheCompanyinChinese | 美的集团股份有限公司 | ||
| Abbr.oftheCompanynameinChinese | 美的集团 | ||
| NameoftheCompanyinEnglish(ifany) | MideaGroupCo.,Ltd. | ||
| Abbr.oftheCompanynameinEnglish(ifany) | MideaGroup | ||
| Legalrepresentative | FangHongbo | ||
| Registeredaddress | MideaHeadquartersBuilding,No.6MideaAvenue,BeijiaoTown,ShundeDistrict,FoshanCity,GuangdongProvince,China | ||
| Postalcode | 528311 | ||
| Pastchangesofregisteredaddress | N/A | ||
| Businessaddress | MideaHeadquartersBuilding,No.6MideaAvenue,BeijiaoTown,ShundeDistrict,FoshanCity,GuangdongProvince,China | ||
| Postalcode | 528311 | ||
| Companywebsite | http://www.midea.com | ||
| IR@midea.com | |||
2.ContactUs
| BoardSecretary | RepresentativeforSecuritiesAffairs | |
| Name | JiangPeng | YouMingyang |
| Address | MideaHeadquartersBuilding,No.6MideaAvenue,BeijiaoTown,ShundeDistrict,FoshanCity,GuangdongProvince,China | MideaHeadquartersBuilding,No.6MideaAvenue,BeijiaoTown,ShundeDistrict,FoshanCity,GuangdongProvince,China |
| Tel. | 0757-22607708 | 0757-23274957 |
| Fax | 0757-26605456 |
| IR@midea.com |
3.InformationDisclosureandPlaceWherethisReportIsKept
| StockexchangewebsitewherethisReportisdisclosed | ThewebsiteoftheShenzhenStockExchange(http://www.szse.cn) |
| MediaandwebsitewherethisReportisdisclosed | ChinaSecuritiesJournal,SecuritiesTimesandShanghaiSecuritiesNews,aswellashttp://www.cninfo.com.cn |
| PlacewherethisReportiskept | CompanyInvestorRelationsDepartment |
4.CompanyRegistrationandAlteration
| Organizationcode | 91440606722473344C |
| ChangesinmainbusinessactivitiessincetheCompanywaslisted(ifany) | None |
| ChangesofcontrollingshareholderoftheCompany(ifany) | None |
5.OtherRelevantInformation
AccountingfirmengagedbytheCompany
| Nameoftheaccountingfirm | PricewaterhouseCoopersZhongTianLLP |
| Businessaddressoftheaccountingfirm | 11/F.,PricewaterhouseCoopersCenter,2CorporateAvenue,202HuBinRoad,HuangpuDistrict,Shanghai200021,PRC |
| Nameofaccountantswritingsignatures | YaoWenpingandWuFangfang |
SponsorengagedbytheCompanytocontinuouslyperformitssupervisoryfunctionduringtheReportingPeriod
□Applicable√N/AFinancialadvisorengagedbytheCompanytocontinuouslyperformitssupervisoryfunctionduringtheReportingPeriod
□Applicable√N/A
6.KeyAccountingDataandFinancialIndicatorsWhethertheCompanyperformedaretroactiveadjustmenttoorrestatementofaccountingdata
√Yes□No
| 2021 | 2020 | 2021-over-2020change(%) | 2019 | |||
| Before | Restated | Restated | Before | Restated | ||
| Operatingrevenue(RMB'000) | 341,233,208 | 284,221,249 | 284,221,249 | 20.06% | 278,216,017 | 278,216,017 |
| NetprofitattributabletoshareholdersoftheCompany(RMB'000) | 28,573,650 | 27,222,969 | 27,222,969 | 4.96% | 24,211,222 | 24,211,222 |
| NetprofitattributabletoshareholdersoftheCompanybeforenon-recurringgainsandlosses(RMB'000) | 25,929,086 | 24,614,653 | 24,614,653 | 5.34% | 22,724,392 | 22,724,392 |
| Netcashflowsfromoperatingactivities(RMB'000) | 35,091,704 | 29,557,117 | 29,557,117 | 18.73% | 38,590,404 | 38,590,404 |
| Basicearningspershare(RMB/share) | 4.17 | 3.93 | 3.93 | 6.11% | 3.60 | 3.60 |
| Dilutedearningspershare(RMB/share) | 4.14 | 3.90 | 3.90 | 6.15% | 3.58 | 3.58 |
| WeightedaverageROE(%) | 24.09% | 24.95% | 24.95% | -0.86% | 26.43% | 26.43% |
| 31December2021 | 31December2020 | Changeof31December2021over31December2020 | 31December2019 | |||
| Before | Restated | Restated | Before | Restated | ||
| Totalassets(RMB'000) | 387,946,104 | 360,382,603 | 360,382,603 | 7.65% | 301,955,419 | 301,955,419 |
| NetassetsattributabletoshareholdersoftheCompany(RMB'000) | 124,868,124 | 117,516,260 | 117,516,260 | 6.26% | 101,669,163 | 101,669,163 |
Reasonsforthechangestotheaccountingpolicies:
TheMinistryofFinancehasissuedin2021theCircularonAdjustmentstotheApplicationScopeoftheRegulationsofAccountingTreatmentsforRentalWaiversasaResultofCOVID-19(CK[2021]No.9),theCircularonIssuingInterpretationNo.14oftheAccountingStandardsforBusinessEnterprises(CK[2021]No.1),theQ&AfortheImplementationoftheAccountingStandardsforBusinessEnterprises,andtheCircularonIssuingInterpretationNo.15oftheAccountingStandardsforBusinessEnterprises.
TheGrouphaspreparedthefinancialstatementsfortheyearended31December2021accordingtotheaforesaidregulatorydocuments.Forfurtherinformationaboutthechangestotheaccountingpolicies,pleaserefertoNote2(31)tothefinancialstatements.TotalsharecapitaloftheCompanyonthelasttradingsessionbeforedisclosure:
| TotalsharecapitaloftheCompanyonthelasttradingsessionbeforedisclosure(share) | 6,997,053,441 |
Fullydilutedearningspersharebasedonthelatestsharecapitalabove:
| Dividendpaidtopreferenceshareholders | 0 |
| Interestpaidforperpetualbonds(RMB) | 0 |
| Fullydilutedearningspersharebasedonthelatestsharecapitalabove(RMB/share) | 4.0837 |
Indicatewhetherthelowerofthenetprofitbeforeandafternon-recurringgainsandlosseswasnegativeforthelastthreeaccountingyears,andthelatestauditor’sreportindicatedthattherewasuncertaintyabouttheCompany’sabilitytocontinueasagoingconcern.
□Yes√NoIndicatewhetherthelowerofthenetprofitbeforeandafternon-recurringgainsandlosseswasnegative.
□Yes√No
7.DifferencesinAccountingDataunderDomesticandOverseasAccountingStandards
7.1DifferencesinthenetprofitandnetassetsdisclosedinthefinancialreportspreparedunderChinaAccountingStandards(CAS)andInternationalFinancialReportingStandards(IFRS)
□Applicable√N/ANosuchdifferencesfortheReportingPeriod.
7.2DifferencesinthenetprofitandnetassetsdisclosedinthefinancialreportspreparedunderCASandforeignaccountingstandards
□Applicable√N/ANosuchdifferencesfortheReportingPeriod.
7.3Reasonsforthedifferences
□Applicable√N/A
8.KeyFinancialResultsbyQuarter
RMB'000
| Q12021 | Q22021 | Q32021 | Q42021 | |
| Operatingrevenue | 82,504,017 | 91,305,548 | 87,532,404 | 79,891,239 |
| NetprofitattributabletoshareholdersoftheCompany | 6,468,588 | 8,540,458 | 8,446,204 | 5,118,400 |
| NetprofitattributabletoshareholdersoftheCompanybeforenon-recurringgainsandlosses | 6,649,368 | 7,987,143 | 7,928,026 | 3,364,549 |
| Netcashflowsfromoperatingactivities | 8,553,861 | 11,622,549 | 7,720,334 | 7,194,960 |
WhetherthereareanymaterialdifferencesbetweenthefinancialindicatorsaboveortheirsummationsandthosewhichhavebeendisclosedintheCompany’squarterlyorsemi-annualreports
□Yes√No
9.Non-recurringGainsandLosses
√Applicable□N/A
RMB'000
| Item | 2021 | 2020 | 2019 | Note |
| Gainorlossfromdisposalofnon-currentassets | 77,527 | -52,424 | -131,131 | |
| ExceptforeffectivelyhedgingbusinessrelatedtonormalbusinessoperationsoftheCompany,gainorlossarisingfromthechangeinthefairvalueoffinancialassetsheldfortrading,derivativefinancialassets,financialliabilitiesheldfortrading,derivativefinancialliabilities,andothernon-currentfinancialassets,aswellasinvestmentincomeorlossproducedfromthedisposaloftheaforesaidfinancialassetsandliabilities | 995,824 | 2,204,165 | 676,430 |
| Othernon-operatingincomeandexpensesexceptabove-mentioneditems | 2,352,849 | 1,378,105 | 1,347,788 | |
| Less:Corporateincometax | 668,578 | 765,871 | 394,095 | |
| Minorityinterests(aftertax) | 113,058 | 155,659 | 12,162 | |
| Total | 2,644,564 | 2,608,316 | 1,486,830 | -- |
Particularsaboutotheritemsthatmeetthedefinitionofnon-recurringgain/loss:
□Applicable√N/ANosuchcasesfortheReportingPeriod.ExplainthereasonsiftheCompanyclassifiesanitemasarecurringgain/lossitem,whichisenumeratedasanon-recurringgain/lossinthe<ExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-RecurringGainsandLosses>.
□Applicable√N/ANosuchcasesfortheReportingPeriod.
SectionIIIManagementDiscussionandAnalysis
1.IndustryOverviewfortheReportingPeriod
1.1SummaryofbusinessscopeMideaisaglobaltechnologygroupcomprisingfivemajorbusinessdivisions:theSmartHomeBusinessGroup,theIndustrialTechnologyBusinessGroup,theBuildingTechnologiesDivision,theRobotics&AutomationDivision,andtheDigitalInnovationBusiness.Mideaoffersdiversifiedproductsandservices.Specifically,theSmartHomeBusinessGroup,asthemainoperatingentityofsmartappliances,smarthomeandrelatedperipheralindustriesandecologicalchains,undertakestheconstructionofintelligentscenariosforendusers,useroperationsanddatavaluediscovery,andiscommittedtoprovidingthebestexperienceofwhole-housesmarthomeappliancesandservice.TheIndustrialTechnologyBusinessGroupiscapableofcarryingoutprofessionalR&D,production,andsalesofhigh-precisioncorecomponentssuchascompressors,motors,chips,variablefrequencydrive,servosystems,andcoolingmodules.ItoperatesmanybrandsincludingGMCC,Welling,MR,TOSHIBA,HICONICS,SUNYE,SERVOTRONIX,DORNA,etc.,withitsproductswidelyusedinhomeappliances,3Cproducts,newenergyvehiclesandindustrialautomation,amongothers.TheBuildingTechnologiesDivisionisresponsibleforprovidingproductsandservicesinrelationtobuildings,aswellastherelevantoperations.Withthedigitalbuildingserviceplatformasthecore,itfacilitateslogistics,information,feelingandenergyflowsofbuildingstoprovidecompletebuildingsolutionsthatareintelligent,digitalandlow-carbon.TheRobotics&AutomationDivisionprimarilyfocusesonprovidingsolutionsofindustrialrobotics,automaticlogisticssystems,andtransmissionsystemsforfuturefactory-relatedfields,aswellassolutionsforhealthcare,entertainment,newconsumption,etc.TheDigitalInnovationBusinessprimarilyincludesnewbusinessarisingfromthebusinessmodeltransformationofMideaGroupsuchasintelligentsupplychainsandIndustrialInternet,whichcanprovidesoftwareservices,unmannedretailsolutions,andproductionservices,amongothers,forthedigitaltransformationofenterprises.TheDigitalInnovationBusinessalsocomprisesBeijingWandongMedicalTechnologyCo.,Ltd.(WDM)thatisengagedinmedicalimagingdevicesandrelatedservices.
With“BringGreatInnovationstoLife”asitscorporatevision,“IntegratewiththeWorld,toInspireYourFuture”asitsmission,“Embracewhat’snext-Aspiration、CustomerFirst、Innovation、Collaboration、Dedication”asitsvalues,“High-qualityDevelopmentandHigh-performanceOperations”asitsmanagementandoperationstandard,Mideaintegratesglobalresourcesandpromotestechnologicalinnovationtocreateabetterlifeforover400millionusers,majorcustomersandstrategicpartnersindifferentareasworldwideeveryyearwithsatisfyingproductsandservices.InfaceofhigherrequirementsforproductsandservicesinthedigitalInternetera,Mideahasupgradeditsstrategicfocusto“TechnologyLeadership,DirecttoUsers,Digitization&IntelligenceDriven,andGlobalImpact”,soastorebuildMideainthenewera.Midea,aglobaloperatingcompany,hasnowestablishedaglobalplatformwitharound200subsidiaries,35R&Dcenters,35majormanufacturingbases,andmorethan160,000employees.Itsbusinesscoversmorethan200countriesandregions.Overseas,Mideahas20R&Dcentersand18majormanufacturingbasesinmorethantencountries,witharound30,000employees.22currenciesareusedbyMideainsettlement.Inaddition,MideaisthemajorityshareholderofKUKA,aGermany-basedworld-leadingcompanyinroboticsandautomation,withastakeofapproximately95%.
1.2PositioninhomeapplianceindustryMidearanksNo.183onthe19thForbesGlobal2000listreleasedinMay2021,movingup46placescomparedtolastyear.Meanwhile,itislistedin“ForbesChina2021Top10ChineseCompaniesinIndustrialDigitalTransformation”and“ForbesChina2021Top10ChineseCompaniesinIndustrialInternet”.Inaddition,itranksNo.288ontheFortuneGlobal500listunveiledinAugust2021,movingup19placesfromtheyearbeforeandmarkingitssixthyearonthelist.InSeptember2021,MideawontheChinaQualityAwardatthefourthsucheventwithits“5All5Digitalization"intelligentqualitymanagementmodel.Uptoearly2022,fourfactoriesofMideahavebeenincludedinthe“GlobalLighthouseNetwork”initiatedbytheWorldEconomicForum,coveringairconditioners,microwaveovens,refrigeratorsandlaundryappliances,whichrepresentsMidea’sleadingintelligentmanufacturinganddigitalcapabilitiesacrosstheglobalmanufacturingsector.Meanwhile,MideatakestheleadamongdomestichomeappliancemakersbyrankingNo.36onthe2022BrandFinanceTech100listreleasedbyBrandFinance,aBritishbrandassessmentinstitution.Also,MidearanksNo.33onthe2021
BrandZ?Top100MostValuableChineseBrandslist,withitsbrandvalueup58%.Mideahasbeengivenexcellentcreditratingsbythethreemajorinternationalcreditratingagencies,Standard&Poor’s,FitchRatingsandMoody’s.TheratingsareinaleadingpositionamonghomeappliancemanufacturersworldwideaswellasamongChinesenon-state-ownedenterprises.Meanwhile,Standard&Poor’shasraisedthecreditratingonMideafrom“A-”to“A”in2021,makingMideathehighest-ratedprivatemanufacturerinChina.AccordingtodataproviderAVC,Midearanksfirstwithrespecttoboththeonlineandofflinedomesticmarketshareforsevenoutofthe25majorhomeappliancecategories,namely,residentialairconditioners,clothesdryers,ricecookers,electricfans,electricpressurecookers,inductioncookersandelectricradiators.ThisisbecauseMideahassuccessfullyretainedthe"NumberOneEngine"ofToCbusinessin2021onthedomesticmarket.ThetablebelowshowstheofflinemarketsharesandrankingsoftheCompany’sprimaryhomeapplianceproducts(byretailsales)in2021:
| Productcategory | Marketshare | Ranking |
| Residentialairconditioners | 36.0% | 1 |
| Laundryappliances | 27.4% | 2 |
| Clothesdryers | 25.0% | 1 |
| Refrigerators | 14.5% | 2 |
| Ricecookers | 42.1% | 1 |
| Electricpressurecookers | 43.8% | 1 |
| Electricradiators | 49.4% | 1 |
| Inductioncookers | 47.9% | 1 |
| Electricfans | 38.7% | 1 |
| Electrickettles | 38.0% | 1 |
| Waterdispensers | 43.0% | 1 |
| Blenders | 30.7% | 2 |
| Productcategory | Marketshare | Ranking |
| Waterpurifiers | 20.1% | 2 |
| Microwaveovens | 46.6% | 2 |
| Countertopovens | 31.9% | 2 |
| Electricwaterheaters | 17.0% | 3 |
ThetablebelowshowstheonlinemarketsharesandrankingsoftheCompany’sprimaryhomeapplianceproducts(byretailsales)in2021:
| Productcategory | Marketshare | Ranking |
| Residentialairconditioners | 34.6% | 1 |
| Laundryappliances | 33.7% | 2 |
| Clothesdryers | 31.7% | 1 |
| Refrigerators | 18.2% | 2 |
| Microwaveovens | 49.7% | 1 |
| Countertopovens | 27.0% | 1 |
| Electricpressurecookers | 40.4% | 1 |
| Ricecookers | 30.1% | 1 |
| Inductioncookers | 50.5% | 1 |
| Dishwashers | 29.5% | 1 |
| Electrickettles | 27.0% | 1 |
| Electricfans | 22.7% | 1 |
| Garmentsteamers | 25.1% | 1 |
| Electricradiators | 21.4% | 1 |
| Waterpurifiers | 17.6% | 1 |
| Electricwaterheaters | 29.9% | 2 |
| Gaswaterheaters | 17.1% | 2 |
| Rangehoods | 15.9% | 2 |
| Productcategory | Marketshare | Ranking |
| Sterilizingcabinets | 17.9% | 2 |
| Gasstoves | 13.8% | 2 |
| Waterdispensers | 15.7% | 3 |
| Blenders | 14.3% | 3 |
1.3IndustryOverviewA.HomeApplianceIndustry2021sawastrongreboundofChina’seconomy,whichbecameincreasinglystablewithanupturn.Thehomeapplianceindustryovercameadversefactorssuchasthepriceupsurgeofrawmaterialsandthechipshortageinthemanufacturingindustry.Theoveralldevelopmentoftheindustrymaintainedapositiveandhealthytrend,withcontinuedstronggrowthinexportsandfurtherrecoveryinthedomesticmarket.Accordingtothe2021AnnualReportofChina’sHouseholdElectricalApplianceIndustryjointlypublishedbytheChinaHouseholdElectricApplianceResearchInstitute(CHEARI)andtheNationalHouseholdElectricalApplianceIndustryInformationCenter,in2021,thedomesticretailsalesofhomeapplianceswasRMB754.28billion,up3.4%year-on-year;andtheexportsofhomeappliancesreachedRMB638.2billion,up14.1%year-on-year,asshownbydatareleasedbytheCentralAdministrationofCustoms.Currently,theworldisstillinagraveandcomplexsituationduetothepandemic,withunprecedentedchallengesforeconomicdevelopment.Nevertheless,inthemediumandlongrun,upgradingoftheindustrialstructure,stableincreaseofhouseholdincome,diversifiedconsumption,thenationalpolicysupportforthegreenandsmartindustries,aswellasupgradingofthestandardsforhomeapplianceswillcreatenewopportunitiesandgrowthpoints.Fromtheperspectiveofindustrytrend,first,thehomeapplianceindustrypresentshorizontalcross-borderdevelopmentwiththeintegrationofhomedecoration,homefurnishingandhomeappliances.Homeappliancemanufacturersexpandtheirbusinesshorizontallyincooperationwithdistributionchannels,advancingtowardsastrategicdirectionofhomeappliances+homefurnishing.Whole-housecustomizationandwhole-houserenovationhavebeenincorporatedintotheirlineofbusiness.Second,homeappliancemanufacturersdisplayverticaldevelopmentwithinthemselvesbydiversifyingproductcategoriesandspecifications.Theelements
suchascapturinglifestyletrends,tappingintouserneeds,addressingpainpoints,promotingproductinnovationandprovidingqualitylivingwillshapethedevelopmentofnewproducts.Third,theproductisalwaysthecornerstone.Userexperiencecanbeenhancedfromthedimensionsofsafety,easeofuseandwellness,whichcontributetoproductcompetitiveness.AlthoughChina'swhitegoodsmarkethasenteredamaturedstage,consumptionupgradingremainsevidentandhigh-endhomeapplianceswithhighenergyefficiencyaimedatimprovedqualityoflifestillhavegreatpotentialfordevelopment.AccordingtothedatafromtheNationalHouseholdAppliancesIndustryInformationCenter,thedomesticretailsalesofairconditionerswasRMB154.5billionin2021,up4.8%yearonyear.Intermsofsaleschannel,onlinechannelsalesaccountedfornearly45%,amountingtoRMB69billion,up14.1%yearonyear.Intermsofcompetitionpattern,theconcentrationofofflineairconditionermarketsharewasfurtherimproved,andthemarketsharebyunitsalesofthetopthreeenterprisesintheindustryexceeds83%totally.Intermsofproductperformance,themarketshareofproductswithhighenergyefficiencykeptrising,andthepricestructurewasfurtheroptimized,amongwhich,intheofflineairconditionermarket,theunitsalesofinverterproductsincreasedtoover98%,theunitsalesofEnergyEfficiencyClass1productsincreasedtoover70%,andtheunitsalesofproductswithaunitpriceofoverRMB2,000increasedto87%.Intermsofproductfunction,thefunctionsofairconditionershavebeenexpandedfromcoolingandheatingtoself-cleaning,humidity,aircleannessandfreshness,etc.Asthecomfortofproductexperiencehasbeenfocusedon,thefreshairfunctionproductshavedevelopedrapidly,andthemarketsegmentshavefurtherdeveloped,suchastherapiddevelopmentofairconditionersthatareapplicableforkitchenscenesandtheelderlyandportableairconditioners.AccordingtothedatafromtheNationalHouseholdElectricalApplianceIndustryInformationCenter,thedomesticretailsalesoflaundryapplianceswasRMB71.4billionin2021,up8.7%year-on-year,withtheonlinesalesaccountingforover52%oftotalsales.Intheupgradeofthelaundryappliancemarket,intermsoftheproducttypes,themarketshareoffront-loadingproductskeepsgrowingstably,withtheofflinemarketshare(byunitsales)climbingto52.5%(32.5%forfront-loadingwasher-dryers).Meanwhile,asconsumersarepayingmoreattentiontohealth,theofflinemarketshares(byunitsales)oflaundryapplianceswithsterilizationandmiteeliminationfunctionsroseto54.5%and22.8%respectivelyin2021.Washingcapacitycontinuedtobeupgraded,withlarge-capacityproducts
increasinglyreplacingsmall-capacityones.Theofflineunitsalesof10kg-12kgwashersoccupieda60%marketshare,withayear-on-yearincreaseofover11%.Meanwhile,mid-andhigh-endproductssawamuchbiggershareintheofflinemarketbyunitsales.Togiveanexample,productswithaunitpriceofoverRMB5,500tookupamarketshareof20%.Thedryingfunctionbringstheadvantagesofsavingtime,beingconvenient,non-ironing,andsavingspace.AsChina’sclothesdryertechnologiesbecomemoremature,theheat-pumpclothesdryerexperiencedfastgrowthduring2021andhasdominatedthedomesticofflinemarket.AccordingtothedatafromtheNationalHouseholdElectricalApplianceIndustryInformationCenter,thedomesticretailsalesofrefrigeratorswereRMB99.9billionin2021,up7.4%year-on-year.Themarketshareconcentrationoftheleadingbrandsinthedomesticrefrigeratormarkethasbeenfurtherenhanced.Duetotheimpactsofrisingrawmaterialpricesandstructuralupgrading,structuralupgradingwasevidentwithrefrigeratorsofdifferentprices,withtheofflinemarketshare(byunitsales)ofproductspricedoverRMB7,000exceeding20%.Asseenfromthechangeofmulti-doorrefrigeratormarketshare,thosewithmorethanfourdoorshavebecometheabsolutemainstreamintheofflinemarket,withamarketshareof45.3%byunitsales.In2021,theofflinemarketshare(byunitsales)ofrefrigeratorswithanover-400Lcapacitywascloseto60%.Consumer'sintensifiedwillingnesstopursuequalitylifehaspromptedtherefrigeratormarkettopivottowardshigh-endmulti-dimensionaldesign,whichismainlymanifestedas"goodlooking","capacious","fresh",and"intelligent".Inotherwords,betterappearancedesignandmaterial,largercapacityandstructure,improvedstorageandpreservationtechnology,andmoresmartapplications.AccordingtothedatafromtheNationalHouseholdElectricalApplianceIndustryInformationCenter,thedomesticretailsalesofkitchenapplianceswasRMB174.8billionin2021,up4.3%year-on-year.Asdishwashersbecamemorepopularonthedomesticmarket,theretailsaleswereclosetoRMB10billion,withtheonlineandofflinesalesrecordingyear-on-yearincreasesof11.9%and12.4%,respectively.Andproductupgradingcontinued.Integrationofmorefunctionssuchaswashing,sterilization,dryingandstorageemerged.Built-inlarge-capacityproductssawasubstantiallybiggermarketshare,withtheofflinemarketshareofdishwasherswith13placesettingscapacityreaching25.6%byretailsales.Andtheaveragepriceofdishwasherswentup8.5%year-on-yearontheofflinemarket.Intermsofthe
competitionlandscape,thetopthreemanufacturerssawexpandingmarketsharesdomestically,withtheircombinedofflinemarketshareexceeding50%byunitsales.IntegratedstovesalesreachedRMB24.5billioninthedomesticmarket,anincreaseof38.8%year-on-year.Duetothesurgeindemandforhigh-endkitchenappliances,inparticularsteamersandovensasaresultofthepandemic,integratedstoveproductshaveevolvedrapidly.Theall-in-onemodelswithkitchenhood,stove,steamerandovenhavedevelopeddramaticallyandbecomethecategorywiththelargestofflinemarketshare,withtheofflinemarketshareofproductspricedoverRMB13,000reachingashighas57.4%byunitsales.Smartproductswithmultiplefunctionsarethetrend.Forinstance,intelligentvoicecontrolfunctionwillbebuiltintodeliveramoreconvenienthandlingexperience,andintegrationofdifferentcookingmethodssuchassautéing,stir-frying,stewing,bakingandsteamingenablesthemulti-cookingscenariopossible.AccordingtothedatafromtheNationalHouseholdElectricalApplianceIndustryInformationCenter,thedomesticsalesofsmalldomesticapplianceswasRMB117.4billionin2021,down8.6%year-on-year,ofwhichtheonlinesalestookupapercentageof70.9%.Withrespecttothemarketperformanceofallcategories,duetoweakdemandfortraditionalproducts,thehighbasein2020causedbythe“stay-at-home”policyasaresultoftheCOVID-19pandemic,aswellasnaturalfactorssuchasthetemperatureandairquality,smallkitchenappliancesandenvironmentappliancesunderperformed,whilethemarketofemerginghealth-friendlysmalldomesticappliancesforpersonalcaretoldadifferentstory.Thediversifiedandindividualizedconsumerneedshaveresultedinrapidgrowthfortheseproducts,drivingtheemergenceofmorenicheproducts.Thesalesofhealth-friendlyvacuumcleanerswereoutstandingduetothepandemic.In2021,thedomesticsalesofvacuumcleanerswereRMB26.6billion,up14.5%year-on-year.Bycategories,robotcleanersembracednewfunctionssuchasself-cleaning,cleaningbase,dustcollectingbaseandautomaticwaterfilling.Theiraveragemarketpriceincreasedconsiderably,withtheonlinepriceupnearly44%year-on-year.Astheneedsforhousecleaningcontinuetogrow,multiplenewcleaningappliancessuchasscrubbersandsteammopshaveemerged.Thankstotheadvancementoftechnologyandmorehuman-friendlydesign,suchasrollerbrushthatcanself-cleaninrealtime,lighterbodyweight,andlessnoise,theonlineandofflinemarketshares(byretailsales)offloorscrubberssurged244.7%and779.6%respectivelyyear-on-year.AccordingtothedatafromtheNationalHouseholdElectricalApplianceIndustryInformationCenter,the
onlineretailsalesofhomeappliancesinChinaamountedtoRMB368.01billionin2021,up9.3%year-on-year,accountingforamarketshareof48.8%;whiletheofflineretailsalesamountedtoRMB386.27billion,down1.7%year-on-year,accountingfor51.2%.Onlinesaleschannelofhomeappliancesinthepastdecadeorsohasmadeitswayfromscratchtoexpansion.The2020pandemichasonceagainpushedittoanewheight,butnowwiththegeneralresumptionofofflineshopping,theonlinechannelhasusheredinaperiodofrelativestability.Intermsofsales,thesalesstructureofeachchannelinthedomesticmarketremainswelloptimized,withhigh-end,healthyandintelligenthomeappliancesgainingaprominentpresence.AccordingtothedatafromtheNationalHouseholdElectricalApplianceIndustryInformationCenter,in2021,bothonlineandofflinemarketsalesofmedium-andhigh-endproducts,suchasself-cleaningairconditioners,crossfour-doorrefrigerators,front-loadingwasher-dryers,gaswaterheaterswithzerocoldwaterandrobotcleaners,havefurtherimproved.B.RoboticsandIndustrialAutomationIndustryWorldRobotics2021IndustrialRoboticsreleasedbytheInternationalFederationofRobotics(hereinafterreferredtoas"IFR")showedthattherewillbefivetrendsinrobotindustryin2022,whichrefertothatrobotswillbeappliedtomorenewindustries,itwillbemoreeasytooperaterobots,theskillsofrobotsandworkerswillgetpromoted,robotswillguaranteemanufacturing,androbotswillsupportdigitalautomationtechnology.Globalrobotinstallationsreboundedstronglyin2021,withIFRprojectinga13%increaseofglobalrobotinstallations,amountingto435,000units.Inparticular,Americasachievedanincreaseof18%yearonyear,Europeachievedanincreaseof7.4%yearonyear,andAsiaachievedanincreaseof15%yearonyear.IFRalsopredictedthatthegrowthrateoftheglobalindustrialroboticsindustrywillslowdownrelativelyfrom2022to2024,andtheannualnewinstallationswillexceed510,000unitsin2024.IFRdatashowedthattheCAGRofthesalesofindustrialroboticsinChinafrom2015to2020exceeded20%,andtheinstallationofindustrialrobotscontinuedtorankfirstintheworld.In2021,inspiteoffacingmultiplechallengessuchastheepidemic,chipshortagecrisis,rawmaterialshortage,supplychainpressure,powersupplytensionandrisingtransportationprices,withunstableoverseasepidemic,Chinacontinuedtotakeoverseasmanufacturingorders.Besides,COVID-19promotedenterprisestousethestrategyof"robotassemblingline",andmarketdemandwassuccessivelyreleasedwiththestable
epidemicinChina.AccordingtothedatareleasedbytheNationalBureauofStatistics,thedomesticproductionvolumeofindustrialroboticsachievedto366,044unitsin2021,up44.9%yearonyear,whichhitanewrecord.Simultaneously,in2021,relevantfinancingintheindustrialroboticsfieldretainedheated,whileIndustrialInternetofThings,collaborativerobotics,logisticsandmedicalrobots,and3Dvisionandsensorswerethemostremarkablefields.Intermsofindustries,asthenewenergyautomobiledrovetheautomobileindustrytoreturntoprosperityandthedemandfor3Cproducts,lithium-ionandphotovoltaicwasstrong,theapplicationofrobotingeneralindustrialfieldswasfurtherexpanded,andnewopportunitiesappearedfortheapplicationofrobotinnon-industrialfields.Intermsofmodels,MIRdatashowsthatSCARArobots,collaborativeroboticsandsix-axisroboticsallpresentedhighgrowthmomentum,amongwhichtheshipmentofsix-axisroboticsbelow20kgin2021roseby48%yearonyear,whilesix-axisroboticsabove20kghitanewrecord,whoseyear-on-yeargrowthreached64%afterthreeconsecutiveyearsofnegativegrowth,andeventheyear-on-yeargrowthofcollaborativeroboticswasmorethan100%.AccordingtothelateststatisticsofIFR,intermsofindustrialroboticdensity(theaveragenumberofindustrialroboticsper10,000workers),SouthKorearanksNo.1intheworldwith932robotics,whiletheroboticdensityofChinahasincreasedfrom49roboticsin2015to246,nearlytwicetheglobalaverageof126.ChinaranksNo.9inthisrespect,withgreatpotentialandprospects.Supportedbydiversefactorssuchasflexibledemandsofthemanufacturingsector,decliningdemographicdividend,emergingmarketsandthedevelopmentofinnovativetechnologies,industrialroboticswillbeappliedtomoreandmoreareas.C.SmartBuildingIndustryInthesmartbuildingindustry,Mideafocusesonproducts,servicesandrelatedbusinesseswithrespecttobuildings.Itaimstoprovideuserswithcomprehensive,intelligentandsustainablebuildingsolutionsbasedonthedigitalbuildingplatformandbyfacilitatingthelogistics,information,feelingandenergyflows.ThesmartbuildingecosystemmainlyincludesHVAC,elevator,intelligentbuilding(buildingautomation)andintegratedenergymanagement.Fromtheperspectiveoftheindustrycompetitionpattern,domesticHVAC,elevatorandbuildingcontrolhavethesamepatternandtwomajorcharacteristics.Thefirstisthehighproportionofforeignandjointventurebrands;thesecondisthelow
marketconcentration.AccordingtothedatafromHVAC,IndustryOnlineandChangjiangSecuritiesResearchInstitute,theproportionofforeignbrandsofcommercialairconditionerin2020wasabout48%,andthelongtaileffectwasobviousasonlyfourmanufacturershaveashareofmorethan10%.Forelevator,thedatafromtheBusinessYearbookofElevatorIndustryinChinaandChangjiangSecuritiesResearchInstituteindicatesthattheproportionofforeignandjointventurebrandsintheelevatormarketisashighas70%,whiletherevenuescaleandmarketshareofthetopdomesticbrandsarestilllow.In2021,thefourmajorbrandsofKone,Mitsubishi,HitachiandOTIS'srevenuesexceededRMB20billioninChina.ThebuildingcontrolmarketisalsodominatedbyHoneywell,Siemens,JohnsonControls,Schneiderandotherforeignbrands.Fromtheperspectiveofthemarketsizeanddevelopmentprospects,accordingtothedatafromIndustryOnline,HVACandChangjiangSecuritiesResearchInstitute,thesalesrevenue(excludingtax)ofdomesticcommercialairconditionerin2021wasRMB123.2billion,up25%yearonyear,ofwhichdomesticsalesaccountedforabout90%;thecompoundannualgrowthrateoftheindustryinthepastfiveyearswas9%.Theapplicationfieldofcommercialairconditionerismainlydividedintoresidential,commercial,industrialandpublicbuilding.Bybusinesstype,thesalesofToBbusinessaccountedformorethan70%,andtherevenuescalewasnearlyRMB100billion.Inindustrialdevelopment,theperiodicityofthenon-residentialpartofcommercialairconditionerwassmallerthanthatofresidentialpart,whichwasmorerelatedtoinfrastructureinvestment.Forexample,governmentpublicconstruction,transportation,datacenter,culture,educationandentertainment,medicineandotherdownstreamsegmentationstillmaintainedagoodgrowthtrend,andalong-termhighgrowthrate.AccordingtothedataofNationalBureauofStatisticsandChangjiangSecuritiesResearchInstitute,in2021theproductionofdomesticelevators,escalatorsandliftswas1.55millionsets,up17%yearonyear,whichwasmainlyfordomesticsales;thecompoundannualgrowthratewas10%inthepastfiveyears,maintainingasteadyexpansion.Judgingfromtheoperatingdataofmajormanufacturersin2020,theoutputvalueofasingleelevatorwasaboutRMB200,000,consideringtheaveragefactorypriceofasingleelevatorequipmentandthemaintenancebusiness;theannualmarketsizeofdomesticelevatorequipmentwasRMB250-300billion,andthescaleoftheelevatorindustrywasevenlarger.ThedatafromEqualOceanIntelligenceandChangjiangSecuritiesResearchInstituteshowsthatthecurrentmarketsizeofintelligentbuilding,whichwasaboutRMB7.1billionin2021,isrelativelysmall.Theequipment-basedbusinessessuchascommercialairconditionerandelevatorare"organs"inbuildingconstruction,whereasbuildingcontrolisthe"nervoussystem"which
controlsvariousequipmentsforthehigh-efficiencyandlow-carbonoperationofbuildings,anddeterminestheoverallqualityofbuildingsolutions.Overall,thedomesticrevenueofthesmartbuildingindustryaloneisnearlyRMB400billion,andthecompoundannualgrowthrateoftheindustryisbetween5%and10%(revenuecaliber).Newopportunitiesareusheredintothesmartbuildingindustry,whichare"carbonemissionpeakandcarbonneutrality","digitalandintelligenttransformation"and"domesticreplacement".Withtheestablishmentofthedual-carbonstrategy,theintelligentandlow-carbonprocessofbuildingconstructionisexpectedtoaccelerate.AstheBuildingEnergyConservationResearchCenterofTsinghuaUniversityandtheChangjiangSecuritiesResearchInstituteshowedinrelevantdata,theenergyconsumptionandcarbonemissionsofbuildingsaccountforahighproportioninthewholesociety.Thecarbonemissionsofbuildingoperationaccountedforabout22%ofthetotaldomesticcarbonemissionsin2019,andtheproportionwillfurtherincreaseforthegrowingnewlystartedbuildingsandthedecreasinginventorybuildings.Therefore,asoneofthemajorsourcesofcarbonemissionsinthewholesociety,thelow-carbonorevenzero-carbonprocessintheconstructionfieldwillundoubtedlybepropelled.In2021,aseriesof"doublecarbon"policiesinvolvingbuildingconstructionweresuccessivelyissued,suchastheOpinionsonImplementingtheNewDevelopmentConcepttoAchievePeakCarbonEmissionsandCarbonNeutralityinaComplete,AccurateandComprehensiveManner,theOpinionsonAdvancingtheGreenDevelopmentofUrbanandRuralDevelopment,theActionPlanforPeakCarbonEmissionsby2030,andthe14thFive-YearPlanforComprehensiveWorkonEnergyConservationandEmissionReduction,allofwhichaimatimprovingthebuildingenergyconsumptionmanagementsystem,enhancingthebuildingenergyconsumptionmonitoringcapacity,buildingenergysavingmanagementcapacity,andbuildingenergyefficiencylevel,andpromotingthelarge-scaledevelopmentofultra-lowenergyconsumption,near-zeroenergyconsumption,andlow-carbonbuildings.Withstrongerpolicyincentivesandconstraints,thebuildingenergy-savingupgrading,intelligentoperation,andcooperativeenergymanagementareboundtobecomethemainmeasuresforthetargetsinadditiontotheconstructionoflow-carbonbuildingstandardsandadministrativesupervision.Astothemarketside,theelectricitypricereform,"powerrationing"andothermeasureshaveraisedthecostandtheinput-outputratioinbuildingenergysavingrenovation,energymanagement,anddigitaloperation,andthusmoreandmoremarketentitiesbegintopositivelycarryout"doublecarbon"andenergysavingrenovation.
Takenasawhole,underthebackgroundof"doublecarbon",thebuildingconstruction,asoneofthemainsourcesofenergyconsumptionandcarbonemissionsinthewholesociety,acceleratestheprocessofenergyconservationandcarbonreduction,andcatalyzestheoutbreakofdemandforefficientlow-carbonbuildingsolutions.Thedemandfordigitalintelligentbuildingwillalsoincreasesignificantly,asthedevelopmentlevelofbuildingsisakeylinkin"smartcity"andstilllaggingbehindunderthetrendofdigitaleconomy.Atthesametime,withcontinuousprogressofcommunication,computingpowerandalgorithms,thesystem-levelcontrolsuchasHVACandelevatorswillmovetothebuilding-levelcontrol-thefirstisthespaceexpansionbroughtbychangesfrom"control"to"service";thesecondisthenarrowinggaptoforeignenterpriseswithfirstmoveradvantage.Additionally,themorepositiveandclearsignalcomesfromthetransformationandupgradingoftheelevatorindustrydrivenbydigitalintelligence.In2018,theGeneralOfficeoftheStateCouncilissuedtheOpinionsonStrengtheningtheQualityandSafetyofElevatorsforthepurposeofpromotingtheelevatorinstallationonexistingresidencesandthemaintenanceofoldelevators.Specifically,themaintenanceshouldpressforquality,andresourcesshouldbeallocatedonthebasisoffullygraspingtheoperationofelevators,hencetheapplicationofinformationtechnologysuchasbigdataandIoTisgettingmoreimportant.In2020,theStateAdministrationforMarketRegulationdividedthemaintenancemethodsofdifferentelevatorsaccordingtothestandardof"whetherthereisaremotemonitoringsystembasedonIoT".Thedomesticreplacementofcommercialairconditionerhasundergonethreeprocesses:unitmachine,multi-splitmachine,andlarge-scalewaterunits.In2021,thesharegrowthofchillersofdomesticbrandsbegantoaccelerateandmadebreakthroughs,leadingthecommercialairconditionerindustrytothestageofdomesticreplacementinallaspects,andthusthereisalargespaceforfutureincrease.Comparedwithairconditioner,thedomesticreplacementprocessofelevatorisrelativelyslow,buttherelevantmarketpatternwillbeoptimizedwiththegraduallyweakenedrealestatedividend,thechangesinmaintenancemode,andtheapplicationofIoT.Inthemediumandlongterm,therewillbemorecompetitionopportunitiesinthesmartbuildingindustrywiththemarketstructureof"highproportionofforeigninvestment&lowmarketconcentration".Ontheonehand,thepolicyof"doublecarbon"isfosteringtheenergy-savingupgradingandsmartoperationunderthecontextofhighproportionofcarbonemissionsandenergyconsumptionbybuildings.Ontheotherhand,withtheimprovementofdigitalintelligence,theinput-outputeffectofsmartbuildingsischangingqualitatively,andtheoptimizationofcompetitionpatternisunderway.
2.BusinessScopeintheReportingPeriod
In2021,theCOVID-19pandemicremainedaseriousproblemfortheworld,thepoliticalandeconomicenvironmentbecamemorecomplicatedbothathomeandabroad,andthepricesofbulkrawmaterialssuchascopperandsteelsurgedtoahighlevel.Meanwhile,newchangessuchasenergyreform,IoT,digitaltransformationandMetaversewereunderwaywithinnovationspringingup.Uncertaintiesandchallengesbecamethenewnormal.Assuch,Mideaencounteredamorecomplexexternalenvironmentcomparedtolastyear.However,itdeliveredexpectedoperatingresultsinspiteoftheprofitpressurecausedbysharpfluctuationsinrawmaterialcostsandtheappreciationoftheRMB,manifestingitsresilience.Againstamoreuncertainbackdrop,technology-driventransformationremainsthemainthemeofthecurrentera.Mideaadheredtothestrategicfocuswith“TechnologyLeadership”asthecore,promoteddevelopmentbothintheToBandToCbusiness,aswellascarriedouttransformationinboththedomesticandoverseasoperations.Withinnovation,breakthroughsandplanningasthekeynote,ittookthefivebusinessdivisionsintoanewstage,promotedtheimplementationofthestrategicfocus,aswellasdeliveredinnovationandbreakthroughsregardingmanagementsystems,theorganizationalstructureandmechanisms.For2021,Mideaachieved,onaconsolidatedbasis,totalrevenueofRMB343.4billion,up20%YoY;andanetprofitattributabletoshareholdersoftheCompanyofRMB28.6billion,up5%YoY.A.Focusedonusersandscene-basedproductplanning,andcontinuouslyrefinedthewholevaluechainleveragingMidea’smulti-categoryadvantagesanddigitaltechnologies,soastoupgradebusinessscenes,productsandservicesInordertocarryonwiththe“customer-oriented”strategicreform,theCompanycreatesmoreuservalueinbusinessscenes,productsandserviceswhichareindirectcontactwithusers.Basedonusers'yearningandpursuitforabetterlife,Mideadeeplyintegratestechnologicalinnovationandhouseholdappliancestoachievethevisionof"BringGreatInnovationstoLife"throughtechnologicalinnovation.Inaddition,basedonuserneedsandconsumptiontrendswithrespecttolivingrooms,balconies,kitchens,bathrooms,amongothers,Mideaoffersitsownproductsandecosystemproducts.HouseholdserviceiscomprehensivelydeepenedbyusingIoTtechnology,soastoprovideintelligentcomprehensivesolutionsforthewholehouse,makinghomelifemoreefficient,convenient,healthyandcomfortable,and
buildinganindustry-leadingandsmarthomeserviceplatform.Mideaindependentlybuildsabigdataplatformintegratingmarket,userandpublicopiniondata,constructsabigdata-basedinnovativeplanningplatform,andimplementsproductinnovationdrivenbybothbigandsmalldata.Centeringontheplanningprocess,itachievestheintegrationofSKUplanningandsmartsceneplanningprocess.Itisthefirsttocreatetheplanningconnectsystemintheindustry,coveringthewholeplanningprocess.Byachievingcross-departmentdatacirculationandintegratinginternalandexternaldataoftheentirevaluechain,Mideaenhancestheefficiencyofdatacirculationandshortensthecycleofnewproductdevelopment.Meanwhile,throughintelligentanalysis,intelligentearlywarning,intelligentprediction,intelligentdecision-makingandintelligentcontrol,auniquesmartdecision-makingsupportmodelforplanningiscreatedtoempowerplanningdecision-making.Comparedtotraditionalmarketresearch,theintelligentmarketscanningefficiencyofthebigdata-basedinnovativeplanningcenterhasincreasedbyover50%,whichcancloselyfollowupthousandsofcategoriesandexploremarketopportunitiesandtrendsofusers'demand.Ithascoveredmultiplecountriesandregionsaroundtheworld,furtherstrengtheningMidea'sglobalplanningcapability.Withthebigdataplatform'sempowerment,digitalmarketingextendstotheC2Mmodel,whilethroughuserinsightanduserresearch,brandsandproductsareempowered,wherereal-timemarketfeedbackonnewproductsisutilizedtoaccuratelytargetmarketing.Real-timeinteractionwithconsumersisachievedandsupplyanddemandinformationiscloselyconnectedbyperceivingusersandactivatingusers'informationthroughhundredsofmillionsofglobalusertouchpoints,andthenproductdevelopmentchangesfromthechainmodetoaclosed-loopmode.Intermsofindustrialdesign,Midealeadsthewayinuserexperienceandinteractionupgradingwithongoinginnovations.In2021,Mideawonatotalof141industrialdesignawards,including41RedDotDesignAwards,49iFDesignAwards,40IDEAAwardsand11G-markAwards.Forsmartlivingroomscenes:
Intermsofresidentialairconditioners,Midea,asaprominentinnovatorwhoalwaysstaysattheforefrontoftheindustry,hasneverstoppedexploringproductinnovationbasedonuserneeds,scenariosandecosystems.COLMOAirNEXTAirEvolutionMainFrameadoptsapluggableairmoduletomeettheairneedsofusersofdifferentages,whilewithanopenecologicalinterfacetoupgradethedisrotatorybreezelesstechnology,thewindspeedandtemperaturearemorenaturalandstable.Itisequippedwith
theOTAonlineupgradingtechnologytoimprovethehealthandcomfortofairandtheintelligenceandconvenienceforoperationinmultiplescenes,andproactivelyidentifyenvironmentalinformationtoprovideuserswithintelligentairsolutionsbasedonbigdatasuchaslocation,weatheranduserhabits.MideaAll-SeasonSecondGenerationResidentialCentralAirConditioner,whichintegrateshouseholdsystemsolutionssuchascentralconditioner,floorheating,freshairandhumidificationofthewholehouse,istheindustry'sfirstproductthathasbeencertifiedbyhightemperaturesterilizationofmulti-splitcoil,whosesterilizationratereachesmorethan99%.RelyingontheBauhausaesthetics,COLMOResidentialCentralAirConditionerintegratesthefive-dimensionaladjustmentoftemperature,humidity,wind,cleannessandfreshnessandanintelligentexpertsystemforthewholehouse,achieving"oneroom,oneclimate"andactiveadjustmentofthewholehouse,andflexiblymeetingrequirementsofallscenessuchasthree-bedroomunits,penthousesandvillas.MideaiColorExclusiveCustomAirConditionerfeatures"ColorPanel"withinnovativemulti-colorwovenfabric.Basedonthebigdataanalysisofusers'needs,itprovidesavarietyofappearanceandfunctionmodules.Usersareabletoorderdifferentmodulecombinationsattheiroptions.Theproductsareproducedanddistributedfromthebackend,tailor-madetomeettheneedsofdifferentiationandpersonalization.ChinaZunArtisticFloor-StandingAirConditionerandFreshnessArtisticFloor-StandingAirConditionerarethemasterpiecesofMidea'sairconditionerswithcombinationofaesthetics,comfort,health,etc.ChinaZunAirConditionerispoweredbyinnovativetechnologiesincludingS+breezeless,newgenerationofdualhybridfreshairandintelligentcentralvoicesystem.FreshnessAirConditionerintegratesthreedimensionsoftechnologywithfulldomainfeaturesforbreezeless,freshairandvoicesystem.InfusedwithHuawei'sHarmonyOSsystem,theindustry'sfirstsevenairconditionermodelswerelaunchedbyMideain2021,offeringvariousexperiencessuchasone-touchconnectivity,minimalinteractionanddirectservices.Inanefforttoenhanceoverseasmarketpenetrationofresidentialairconditioners,Mideahasbeennotonlycommittedtoexpandingthemarketofwindowairconditioners,dehumidifiersandportableairconditioners,butalsoactivelyleadingtheindustrytocontributetoenvironmentalprotection.FollowingtheOutstandingContributionAwardfromtheUnitedNationsIndustrialDevelopmentOrganizationin2020,MideahasupgradeditsR290splitunitproductin2021andwonthe"DerBlaueEngel"certificationfromGermanytwiceinarow.Atpresent,theDerBlaueEngel-certifiedR290splitunitmodelhasbeenofficiallylaunchedintheEUandbeyond.
ThebrandnewDualFlowDisrotatoryFanlaunchedbyMideahaswonthe2021"GoodDesign"awardinSouthKorea,forwhichtheaerodynamicdual-rotorturbineenginetechnologyisbroughtinandthedouble-bladedisrotatorytechniqueisadoptedforthefirsttimeintheindustry,whichgeneratesdisrotatoryairflowthroughspeedratioadjustmenttoachieveavarietyofwindsandmeettheneedsofusersindifferentscenes.TheproductnotonlycarriestheinnovativetechnologyborninthecooperationwithChongqingUniversitytodynamicallyadjustthewindspeedaccordingtotheambienttemperature,butalsohasfunctionsofnetionicsterilizationand3Dmovement.MideaWashableTowerFanadoptsthepatenteddesignthatallowswashingthewholebody,whichisoriginalintheindustry,tosolvethepainpointthatitisdifficulttodisassembleandwashtheairductofTowerFan,andtoachievetheairductsystemwashingwithonekeyseparation,providingcleanairexperience.MideaMicroelectrolysisWashingAirCoolingTowerFaninnovativelyusesmicroelectrolysisforsterilization,inwhichtapwaterthroughelectrolysisisusedforsterilization,whosesterilizationrateisashighas99.9%.Itisequippedwiththeirrigationwindwheelattheairconditionerlevelandthewetpadwaterfallwashingtechniquetothoroughlycleanair,andprovidehealthyandmoistcleanair.LaunchingtheColdBoiledWaterSmartInstantWaterBottle,Mideaachievesrapidcoolingofboilingwatertoquicklyprepare55°Cwaterandeffectiveenergysavingof60%throughtheself-designedplatewater-cooledheatexchanger.Bystudyingthedoublepumpcontrolsystemandoptimizingthemulti-sensingtemperatureprobeandPIDalgorithm,sixwatertemperaturemodesareavailablesothatwarmboiledwatercanalwaysbeready.Thesterilizationrateisover99%throughthetestbythethird-partyauthority,attheleadinglevelintheindustry.COLMOResidentialTURINGCountertopSparklingWaterDirectDrinkingMachinecarriesmultipleindustry-pioneeringtechnologies,redefiningthehigh-endwaterdrinkingstandard,integratingwaterfiltration,supercooling,multi-stagetemperaturecontrolandadjustablesparklingwatertastetechnologytoachieveamulti-purposemachine.EquippedwiththeHiDrinkdrinkingwatermanagementsystem,itcanachievefunctionssuchasscientificcustomizationofwaterdrinking,user-definedwatergettingthroughidentityrecognition,intelligentremindingofwaterdrinkingandwaterdrinkingreportgeneration,creatingascientificandhealthywayofwaterdrinkingforusers.Itbreakstheindustry'straditionalcoolingmodel,whosetemperaturedecreasesby5°Candcoldwatervolumeincreasesby50%comparedwiththegeneralcoolingtechnology.Meanwhile,theuseofinnovativefour-dimensionalsterilizationensuresnaturalandpurewater.
Continuouslyintegratingtheconceptof"deepcleaningforthewholehouse"intoproductdesign,MideahaslaunchedEurekaSmartSterilizingFloorScrubberthatintegratesvacuuming,moppingandsterilization.Theadvanced“deepcleaning”technologyitcarriescanhelpscrubawaylargeparticlesofdryandwetmixedgarbage,stubbornstainsanddirtatcorners.Thisproducthaswonmultipleindustryawardsandcarries50patentapplicationsintotal.Itscoretechnologiesincludetheindustry'sfirstintegratedreal-timeelectrolyticwatersterilization,integratedrollingscrubbinganddrying,integratedself-cleaningcontrol,integratedautomaticmovingandthemuteairductstructure.MideaZ7SmartWirelessVacuumCleanerhassuccessfullybrokenthroughthehigh-endmarketandwontheAWEAward.Itboastsanoriginalsmartmaintenanceandcleaningsolutionandleadstheindustryinsuctionpower,batterylife,etc.Carryingmorethanonehundredpatents,itscoretechnologiesincludethehigh-efficientBLDCmotor,thehigh-efficientflowchannelandthenew-generationshockandnoisereductiontechnology.Moreover,digitalsmartcontroltechnology,soft-packageandhigh-energystoragebatterytechnology,fastchargingtechnologyandAIoTsoftwaretechnologyarealsoapplied.ThebrandnewMideaAll-in-oneHouseholdRobotVacuumCleanerW11integrating"sweeping,mopping,washinganddrying"functionsusestheautomaticrollingbrushliftingtechnologytocreateaone-stopautomaticcleaningsystem.Itadoptsanindustry-pioneeringcleaningmodeofmoppingaftersweeping,sweepingbeingseparatedfrommopping,andthedrybeingseparatedfromthewet,inadditiontothefunctionssuchasautomaticwaterrefill,automaticbackwashingandautomaticdrying.Over30groupsofsensorsarecarriedandtheself-developedNaviPolar3.0algorithmisembeddedinthisproduct,toprovidemoreefficientandintelligentuseexperience.Ithaswonthe2021CMFDesignAward.Forsmartbalconyscenes:
Underthetrendofdiversifieduserconsumptionbehaviors,newscenesbecomethenecessaryelementsfordefiningnewproducts.Graduallythebalconybecomesthewindowofrevealingthehomeaestheticpersonality,aswashinganddryingpackagesbecomeanewdemandforbalcony'sshiftfromdryingareatoleisurearea.Meanwhile,asmorepeopleliketo“stayathomeandbelazy”,demandisrisingforsmartandOneTouchservices.Againstthisbackdrop,scenessuchashomedrycleaningandmixedclotheswashingemergeattherightmoment.Targetingthepainpointthathigh-endclothingorspecialclothingcannotbewashedathome,COLMOAILightDryCleaningTechnologydisruptsthetraditionalwashing
modebyinnovativelyapplyingthehigh-energysteamtechnologytolaundryappliances.Ithasbeengrantedthe"TechnologyInnovationAward"atthe2021(17th)ChinaHouseholdAppliancesInnovationAwardevent.Itusesdry,saturatedandhigh-energysteamwithexcellentheatandmasstransferperformancetopenetratethroughfibers,achievingresultssuchasthoroughwrinkleanddustremovalwithoutdamagingtheclothes.Italsoboasts5-minuteandGrade-Arapidodorremoval,whosesterilizationrateis99.9%."KeyTechnologyandIndustrializationofDouble-Driven,DewateringandDouble-DrumWashingMachinewithLargeCapacity","KeyTechnologyandIndustrialApplicationofLong-ActingPlasmaforDeodorizationandSterilization"and"ApplicationandIndustrializationofNewSpecialEffectTechnologyofElectrodeCatalyticCoatingforUseinWashingMachines"includedinCOLMOLightDryCleaningTechnology2.0havealsobeencertifiedas"InternationallyAdvanced"bytheChinaNationalLightIndustryCouncil.TheBlueOxygenTechnologybasedonelectrocatalyticcoatingandspecialelectrodepreparationtechnologyisindustry-pioneering,whilethetechnologiesofanti-crosscolor,whiteningwhiteclothing,long-termbacteriostasisofthewholemachineandharmfulsubstancedegradationaremadeavailable.What'smore,thecleaningeffectofspecialstainsisimprovedfromthetraditionalfivecategoriesofstainsto32,andallthecleaningratiosreachGrade-A.TheLightDryCleaningTechnologyandtheBlueOxygenTechnologyfurtherpromotethetechnologicalinnovationandprogressofthelaundryapplianceindustry.EquippedwithLightDryCleaningTechnology2.0,COLMOStarAtlasWasher-dryeraccuratelycontrolsthesteamsaturation,temperatureandtempospeed.WiththeOneTouchsmartcontrol,itremovesdustwithoutdamagingtheclothes.Withthesteamgeneratorofcompactdesignandthebrandnewsecondheatingflowchanneldesign,users’painpointsareeffectivelyresolved.Nano-levelhigh-energysoftsteamandthesupersmartcamerasystem,clothinghumidity,weight,waterquality,weatherandotherbigdataarecalculatedonthecloudthroughInternetofThings,soastoachievethebestwashinganddryingeffect.IthaswontheRedDotAwardandtheIDEAAward.LittleSwanTrueColorSeriesWasher-dryer,carryingtheBlueOxygenTechnology,boaststheindustry'sthinnestplatformandthelargestfreefetchcaliber,whicheffectivelysolvesaseriesofpainpointssuchascrosscolor,specialstains,occupyingalargespaceandbendingdowntofetchtheclothes.Inadditiontobeingcertifiedas"InternationallyAdvanced"byChinaNationalLightIndustryCouncil,thisproducthasalsowonthe2021"Red-TopAward"andtheGoldenChoiceAwardfor"BlueOxygenSterilizationInnovativeProduct".
Meanwhile,TrueColorClothesDryer,withthenewSoftDryingPlatformforWool,isthefirstofitskindtoreceivethe“WoolHandWashSafe”labelinChina,solvingproblemsofwoolbeingnoteasytodry,shrinkingandwrinkling.Italsoinnovativelyusesanintegratedmulti-layerfilterforeasycleaning,whichisabletoremoveasmuchas98.6%dust.ToshibaXP1SeriesWasher-dryerinnovativelyadoptsboththeultrafinebubble(UFB)technologyandthefinebubbletechnology,creatingthedual-bubblewashingtechnologytodelivermorecleanness.Inaddition,itgreatlyoptimizestheoriginalheatpumpsystemandexpandstheairduct,whichshortensthetimeneededtowash7kgofclothesto97minutes,increasingtheefficiencyby10%andleadingtheindustryinJapan.Ithaswonthe2021GoodDesignAwardandtheMonoMaxAward.ToshibaT11SeriesWashingMachineadoptsamortiseandtenonstructureandaminimalisttemperedglassdoor.Thisnewmodelisavailablewithavarietyofspecificationsandcapacities.Also,itisequippedwiththeWIFIfunctionforthefirsttimeforremotecontrol.TheuniqueUltraFineBubblemode,withthefrontcavitypressuringonthespecialmicroporousoutletstructureatthebackend,canproducehundredsofmillionsofultrafinebubblestoinstantlydissolvesebumandgreaseforthoroughcleanness.TheuniqueGreatwavesprogramprovidesthesamewashingeffectasheatingbyadjustingthewashingpacetocreatestrongwaterflows.Additionally,theSteamCarefunctionproduceshightemperaturesteamof80°Cforsterilizationandwrinkleremoval.Forsmartkitchenscenes:
Beingcustomer-oriented,Mideaconstantlymakesproductinnovation,technologicalbreakthroughandsmartsceneexpansionaroundthecoredemandsofuserswithrespecttocooking,suchasdeliciousness,freshness,nutrition,health,highefficiencyandconvenience.COLMOTuringSeriesRefrigeratorshavepioneeredtheindustry'sautomaticdooropeningandclosingtechnologytodelivermoreconvenienceandintelligence.Itsupportsofflinevoicedooropeningandclosing,refrigeratorcontrolandotherfunctions.Withmoreinteractiveintelligencefunctionsandservicesonline,itcanrealizetheintelligentconnectivityofentirehomeappliancesthroughtheauthorizationoftheMSmartLifeAppasthevoiceaccess.Microcrystalfunctionisupgradedagaintoprovidetheoptimalpreservationsolutionforalltypesoffreshfood,meanwhile,effectivelyinhibitthepurinecontentinfreshseafood.Spaceecosystemcompartmentcansmartlyrecognizeandadjustthemoisturelevelofingredients.Thebluelightfunctionwillbeautomaticallyturnedonuponhighhumiditytoenhancetheanthocyaninsof
ingredients.TURINGNutritionRefrigeratorbringsusersintelligentlybalancednutritionmanagementthroughAI-poweredmulti-dimensionalnutritiontechnologiesbasedonadeep"nutrition"perspectivesupportedby"machinerationality"tomeetthehealthandnutritionneedsoffamilies.ToshibaMistRefrigeratorconveysfreshnesswith"MistFreshness"technology.ToshibapatentedtechnologyUNITmoisturepermeablefilm,isamoisturepermeableairtightporouspolymerfibermaterial,whichallowsmoisturetopenetrateandkeepsairtightatthesametime.Itpreventsthecoldwindfromblowingdirectlyonfruitsandvegetables,deliveringthedelicatewatervaporthatreachesdirectlytothecellsoffruitsandvegetables.Bycreatingaconstantmoisturizingenvironmentsuitableforfruitandvegetablestorage,itrealizessevendaysfreshnessoffruitsandvegetables,withthreequick-freezingmodes-directplacementofhotitems,vegetablefreezingandvegetabledrying.Thethreemodesoflow-temperaturechilling,fastmicro-freezingandoriginaldefrostingaccuratelymatchthestorageenvironmentrequiredbythefood,andmaintainthebesttasteandnutrients.Itmakesicequicklyin60minutes,withindependentspacethatiscleanandodorless.Inaddition,theiTouchfunctionallowsjustataptoopenthedoor.Midea'sfirstAmerican-stylerefrigeratorisequippedwiththeoriginalmetaltexturesoftclosehandle.CombinedwiththetraditionalChinesemortiseandtenontechnology,itachievestheperfectintegrationofclassicalaestheticsandcontemporarydesign.PST+technologyhelpsachieverapidodorpurificationwithin19minuteswithabacteriaremovalrateofupto99.9%.Thepaneladoptscarbonioncrystaldiamondprocessandhigh-temperaturesinteredbrushedtexture,reflectingrichlayerswithskin-friendlytouch.Italsooffersstainandfingerprintresistance,andtheinternalpastaspacecanalsoeffectivelyavoidpastafromdryingoutandcrackingwhenstoredviatheuniquemicroporousspoilertechnology.Midea’sfirstHarmonyOSrefrigeratorwasfullylaunchedintandemwithHuaweiinHuaweiMallinJune2021.ThisrefrigeratorcanrealizenonAppsecondnetworkaccessby"tapping"thecellphoneontherefrigerator,andrecognizethefreshnessoftheingredientsinthecompartment,whichquicklygeneratesalargenumberofrecipesdependingontheingredientsintherefrigerator.One-clickappointmentofpost-salesserviceisalsoavailable.COLMOStarAtlasSV8RangeHoodisthefirstofitskindwithfourzonesforvacuumingsmokeandultra-thindesignof360mm,whosesuctioncanbeupto26m?/minandmaximumwindpressure1,100Pa.WithuniqueAIsupport,itcanautomaticallyenterthesmartsmokesuctionstatusatthemomentofignitionandautomaticallyadjustthesuctionpoweraccordingtothesmokestatus.Theself-developedAI
ActiveNoiseReductionModuleusedinthisproductcanreducethenoisetoaslowas42dB,allowinguserstoconcentrateontheircooking.Itsinnovativeflatlightingsystemcanbeadjustedaccordingtotheenvironment,makingthecookingspacebrighter.Theinnovativedesignofdualoilmeshandoilcupcanbecleanedinadishwasher.SilentSeriesThinRangeHoodimprovestheuserexperienceof"easysuction,easywashingandeasycontrol",providinghealthy,cleanandsmartcookingexperience.Itcontinuestoadoptthedoublesuctiondesign,inadditiontoinnovativethindesignof"A3waist"witha360mmframe,twoperfectlydesignedairductsanda290mmbody.Itcaterstobothstewingandflash-fryingscenes.Thenewdesignofdoublesectionoilcupandquickdisassemblyhelpachieveefficientcleaning,andinnovativesquarelightshelprevealthetruecolorsofthefood.Ultra-thinGasStoveQ81USeriesusestheindustry-leadingair-intake-from-the-topignitiontechnologytosavespace.Theinnovativeseamlessstovetopdesignmakesiteasytoclean,andtheultra-thinbodyof25mmprovidesgreatspaceforthedishwashingandsterilizationpackage.Theultra-thinair-intake-from-the-topdesigncarriesanumberofpatentedtechnologies,whichmeetstheexpansionapplicationtothegreatestextent.OxygenStoveQ63-MSeriescarriestheindustry-pioneeringsaucermixedoxygencabinmixedoxygentechnology,withbluefiretoquicklyturnrawingredientstodeliciousandnutritiousfood,greatlyimprovingthecookingquality.MideaF70DishwashercarriesthepatentedtechnologyofADSsmartinput,providingsmartsolutionsforthewholeprocessoftablewarewashandcare.Withaccurateinputofdetergent,oilstainsarescouredwith360°high-pressurewashing,makingitaneasyjobtocleanoilytablewareforChineseconsumers.Meanwhile,thelownoiseeffectof44dBismadeavailablebyusingthevariablefrequencytechnologytoprovidequalitylifeexperience.Besides,forasmallnumberoftableware,thestratifiedwashingfunctionisprovided.Inordertoensuresafeandcleantableware,thefour-starsterilizationstandardisreachedwiththehelpof100°Chotairsterilization.COLMOTURINGSeriesDishwashers,withzirconblueasthemaincolorandrationalgeometryastheoveralldesign,embodiestheessenceofminimalist,high-endandgranddesign.ItadoptsanAI-powereddetergentinputsystem.Theinternalstructurebreaksthroughthetraditionallimitation,wheredishescanbeplacedontheupperandlowerlayers.Italsoboaststhecapacityof15setsandWaterEfficiencyGradeI.Ithaspassedthefour-starsterilizationcertificationbyChinaHouseholdElectricAppliancesResearchInstitute.TheWeek-LongIonFreshnesstechnologyitcarriesisVDE-certified,withasterilizationrateofmorethan99%,providingnaturalandhigh-endwash
andcare.Midea200Q11SterilizingCabinet,withaheightof775mmthatperfectlyfitswiththeChinesecabinetstructureandalargecapacityof180Lthatredefineskitchenstoragespace,achievesthestorageoftableware,knivesandcuttingboardinonemachine.Itcarriesthemodularbowlbasketthatenablesseparatesterilization.Theultraviolet-wavemedium-temperaturetwo-starsterilizationmakesitsuitablefortablewareofdifferentmaterials.Andnegativeionisusedtoensureodorlessstorage,withanAI-poweredwarmdisktoimproveuserexperience.Mideahaslaunchedaseriesofinnovativericecookerproductsin2021.Double-ValveLow-SugarRiceCooker,onthebasisofadheringtomakinggoodriceandlowsugar,throughtheinnovationofdoublevalvedesignandcontroltechnologyoptimization,achievesfunctionsof18-minutefastriceand30-minutefastporridge.IthaswontheiFAward.Centeringonthewholeprocessofusers'cookingriceandporridge,FullyAutomaticRiceCooker,throughinnovationandreconstruction,achievesnewtechnicalbreakthroughssuchasfullyautomaticwaterandriceinput,fullyautomaticricewashing,fullyautomaticprecisecontrolofricewaterratioandfullyautomaticcookingwithOneTouch.IthasbeengrantedtheGoodDesignAwardandtheIDEAAward.MiniMoreMulti-functionalRiceCookerisamulti-functionalproductofmodularcombinationdesignedfortheyoungconsumers,asithasfunctionssuchasIHricecooker,IHconstanttemperaturestoveandIHfryingpan/boilingpot,whichisapplicabletodifferentcookingscenessuchashomeandopenair.Ithaswonmultipleinternationaldesignawards.Mideahaslaunchedthe"AdjustableLiftingElectricGrill",carryingtheindustry'sfirststeplessrodliftingtechnologytomeettheneedsofcookingdifferentfood.Italsoboastsanadjustabledishdiameterof0-35mm.Centeringonthe"holistichealth"trend,Mideahaslaunchedthe"AntibacterialSeriesElectricGrill".Byaddingantibacterialagentsandfungicidesinthecoating,bacteriaandthebreedingenvironmentofbacteriacanbeeffectivelydestroyed,withanantibacterialrateofover99%.MideaSmokelessElectricGrill,whichisequippedwiththeinternalcirculationwater-cooledsmokeabsorptionsystem,canachievecookingsmokepurificationwithoutconsuminganymaterials,whichallowsconsumerstoenjoybarbecueeveninthelivingroom.Withdetachableandwashablestructuredesign,itiseasytoclean.MideaMINI20Calorie-burningCookingPlatformbenefitsfromtheleadingminiaturizedmagnetrontechnology,usestheQ12magnetronthatisthesmallestinvolumeandthehighestinpowerinthe
industry,andachievesthattheplotratioofmicrowaveovenincreasesby24%.Itissuitableforsmallkitchens.TheMIXfatburningalgorithmisoriginallycreated,andthreetechnologiesincludingsteaming,microwavingandbakingarecombined,soastoachievedeliciousandhealthyfood.EquippedwithHuawei’sHarmonyOSsystem,healthdataissharedtocreatepersonalfat-burningsolutions.MideaRoastingSeriesusesgrapheneheatingtubetechnologytoachieveinstantheatingin0.2secondandhightemperatureradiationof1300°Ctosolvethepainpointof"longpreheating,slowbaking"oftheelectricoven.MideaR5Built-inMicrowave,SteamerandOvenCombointegratesfourcookingmethodsincludingmicrowaving,steaming,bakingandfrying.Anditshigh-endTFTandhumanizedinteractiveinterfaceenablesuserstoenjoycooking.COLMOI2000High-fluxUnder-sinkWaterPurifierappliesanumberofinnovativetechnologies.Theindustryleadingtwo-dimensionalself-purifyingsystem,specificallyslowflowstrippinganddeepspinpurification,extendsthelifeoftheROfiltertotenyears.Featuringfulltimezerostalenesstechnology,itflushesthefilterfullyautomaticallytoensurethateverycupofwaterisfreshandgood;upgradedPRfrontfilteradoptsorgantypestructuredesign,witheighttimeshigherdirt-holdingcapacity;thethird-generationpull-outfilterreplacementmethodrealizessimplerreplacementintwo-steps.Theproductwontheindustryandmarketrecognition,andwasgrantedthe"WaterPurifierValueProductAward"andthe"RedStarDesignAward".Forsmartbathroomscenes:
Withcontinuingbreakthroughsincoreperformancebasedonthecorescene-basedrequirementsofusers,MideaElectricWaterHeaterhasmadebreakthroughsinphasechangeenergystorageandultra-shortdoubletankproducts,achievingthesmallestvolumeintheindustrywiththesamevolume,andputtingforwardtheconceptofno-washelectronicanodetoleadtheindustryintermsofinternaltankanticorrosion.Theindustrystandardoflevel-oneconstanttemperatureandlevel-onemuteareinitiatedbyMideaGasWaterHeater.Midealedtheformulationoftheindustry'sgradingstandardonconstanttemperatureTechnicalSpecificationforIntelligentConstantTemperatureGradingEvaluationofHouseholdGasRapidWaterHeaterThroughouttheWholeProcess,andjointlyissuedHealthyBathWhitePaperwithChinaHouseholdElectricApplianceResearchInstitute,dedicatingtosolvingthefluctuationofthebathwatertemperatureinthehouseholdenvironment.Atthesametime,skin-friendly
technologiesaredeveloped,finebubbleandbathconstanttemperaturecurvesareintroduced,andmillimeterwaveindividualrecognitionisintroducedtoexpandtheapplicationscenesandprovidemorecomfortablehotbathsolutions.MideaF6032-HW8(HE)ElectricWaterHeateristhefirstcustomizedbathelectricwaterheaterwithintelligenttemperatureadjustment.Equippedwiththethirdgenerationelectronicconstanttemperaturevalve,itbreaksthroughthebottleneckoftheconstanttemperatureofelectricheating.Thecustomizedelectricheatingisplusorminus0.5°Cwhichcanbecustomizedaccordingtotheskinfeeling.Thehotwatermodelofcustomizedbathisprovidedfordifferentusers,asenergyandelectricitysavingisachievedbyautomaticheatinguponthelearningandmemorizingoftheusers'bathhabitsandpatternsthroughtheSmartCloudHousekeeper.Thelong-termpainpointoftheindustryisresolvedbyavoidingtheimpactonwaterqualitythroughthewash-freeelectronicmagnesiumrod.Itisfittedwithmagneticnetscaleinhibitionvalve,withascaleinhibitionrateofupto90%forbetterwaterquality.MideaHL6Constant-TemperatureGasWaterHeater,thefirstproductthathasprocuredthelevel-oneconstant-temperaturecertificationintheindustry,appliestheinternationalleadingnewconstant-temperaturetechnologyforthefirsttime.ItcarriesADRC2.0self-adaptingconstanttemperaturealgorithmandintelligentstart-stopconstanttemperaturevalve,andachievesdoubleupgradewhichincludeshardware'sprecisioncontrolandsoftware'sactuarial,amongwhichthestart-stopconstanttemperaturespeedincreasesby70%,andtheoutletconstanttemperatureincreasesby37%,effectivelyenhancingthebathconstanttemperatureexperiencebyimprovingthestart-stop,multi-pointwateruseandwaterpressurefluctuationduringtheprocess.Mideahasalsolaunchedanumberofsmartbathroomproductsthatareoriginalintheindustry.Inparticular,MideaSmartBathroomMirroristhefirstsmartmirrorcabinetequippedwithelectronicchipanddryingstorage.Itisdividedintofourzonesincludinggeneralstoragezone,healthysterilizationzone,openzoneandmakeupdryzone.Thesurfacepossessesintelligentdemistingtechnologywithwhichmirror'santi-mistingfunctionisstartedwithOneTouch.Themakeupdryzoneusesanewgenerationofsemiconductordehumidificationtechnologyand360°airductdesigntokeepdry.Additionally,itadoptshigh-intensityUVlampandmobilestoragerackwithnon-contactsterilization,andthesterilizationrateisashighasover99%.Itisalsoequippedwithanintelligentvoicecontrolsystem,enablingeasycontrolofthehouseholdappliances.Theintegratedtouchscreenmakesiteasytooperatewithtime,weatherandtemperatureinformation
availableanytime.Skin-caringShoweristheindustry'sfirstsmartshowerthatcancontrolthewaterheaterremotely,andfeaturesadechlorinationfilterforskincare.Skin-caringFaucetalsoadoptstheskin-caringfilterandcandisplayreal-timewatertemperature.BubbleFacialCleanseristheindustry'sfirstintelligenttemperatureadjustmentwaterheaterdedicatedtofacialcleansing.Throughthehighconcentrationof180millionfinebubblesperliter,oilremovalratereaches99%toachievedeepcleansing.B.Adheredtothestrategyof“TechnologyLeadership”,increasedR&Dinvestments,builtaglobalR&DplatformforbetterR&Defficiency,establishedadigitalR&Dsystemforagileinnovation,andimplementedthestrategyof“InnovationPatentability,PatentStandardization,StandardInternationalizationandMideaStandardGoesOut”MideacontinuedtoinvestinR&D.Throughlargerinvestmentsinthisrespect,itaimstoachieveleadershipinR&Dachievementsandproducttrends,aswellasastrongerpresenceintheindustryandabetterR&Denvironment.TheCompanymadeinnovationswithrespecttomechanism,anddevelopedmoreleadingproductsthroughbothexcellentuserexperienceanddifferentiatedtechnologies,reformofthewholevaluechainofR&Dusingdigitaltechnology,anddeepintegrationofbigdataanalysisandR&D.Itkeptreformingitsproductdevelopmentmodelaccordingtothestrategicfocusof“LeadingProducts”.AninnovativeR&Dmodelfeaturinga“Three-TierTechnicalCommitteeSystem”anda“Four-TierR&DSystem”fromtheorganizationaldimensionand“ThreeGenerations”fromthetechnologydimensionhasbeenputinplaceandconstantlyrefinedtosupportthefulfillmentofthegoalof“BeingtheNumberOneortheOnlyOne”inrespectofvariousproductcategories.Centeringoncustomerneedsandbasedondifferentorganizationsandtechnologies,theCompanycarriesoutinnovativeproductdevelopment,researchoncutting-edgeplatforms,researchoncorecomponents,creationofdifferentiatedsellingpointsandimprovementofthebasicproductperformance.Throughgroupdevelopmentofproductsacrosstheworldandbuildingofaglobalproductplatform,Mideaisbuilding“TechnologyLeadership”.Asoftheendof2021,Mideaboaststencorporatetechnologycenters/industrialdesigncenters/post-doctoralresearchcentersatthestatelevel,19academicianswithlong-termcooperationandeightacademicianworkstations/workshops,inadditiontomorethan60corporatetechnologycenters/engineeringcenters/industrialdesigncenters/keylabsattheministerialor
provinciallevels.MideaGroupiscommittedtoinvestingintheresearchofcoretechnologies.In2021,morethanahundredoftechnologieslaunchedbyMideawerecertifiedas"InternationallyAdvanced"byauthorities,including"ResearchandIndustrializationofKeyTechnologyforNewGenerationR290RoomAirConditioners","ResearchandApplicationofMulti-soundSourceVibrationandNoiseControlTechnologyforAir-cooledRefrigerators","KeyTechnologyforLong-actingPlasmaDeodorizationandSterilizationinHighHumidityEnvironmentandIndustrialApplication","ResearchandApplicationofTechnologyforHorizontallyOpposedMagneticVariableFrequencyCentrifugalCompressors","ResearchandApplicationofKeyTechnologyforRoasting","KeyTechnologyforPowerControlofHigh-qualityIHElectricCookwaresandIndustrialApplication","ResearchandIndustrializationofKeyTechnologyforNewHigh-efficiencyInverterCompressors","ResearchandApplicationofKeyKitchenAirManagementTechnologyforRangeHood"and"ResearchandApplicationofKeyTechnologyforLow-carbonandHigh-energyEfficiencyHeatExchangerforHouseholdAppliances".On3November2021,the2020StateScienceandTechnologyAwardingMeetingofthePeople'sRepublicofChinawasheldattheGreatHallofthePeopleinBeijingandMideaAir-conditionerwontheNationalAwardforProgressinScienceandTechnology(SecondPrize)foritsprojectof"TheoryofBuildingThermalEnvironmentandKeyTechnologyofGreenCreation".Besides,MideaalsowontheHeilongjiangProvincialTechnologicalInventionAward(FirstPrize),theChinaNationalLightIndustryCouncilTechnologyProgressAward(FirstPrize),theChinaEnergyConservationAssociationAwardforTechnologyProgressinEnergyConservationandEmissionReduction(FirstPrize),theChinaGeneralChamberofCommerceTechnologyProgressAward(FirstPrize)andotherawards.MideahasstrengthenedthetransformationofR&Dachievementswhilecarryingoutthecoretechnologyresearch.Bytheendof2021,Midea(inclusiveofTLSC)heldmorethan70,000validpatents.Intheyear,Mideafiledapplicationsforover10,000patentsaroundtheglobe,andwasgrantedmorethan3,000inventionpatents,ofwhichover1,000weregrantedoverseas.Mideacontinuestoimprovepatentquality.Itwonmultipleawardsatthe202122ndChinaPatentAwards,includingaSilverInventionAwardforits“AirConditionerwithaCoverableAirOutlet”,SilverDesignAwardsfor“ElectricKettle”and“WirelessRechargeableHandheldDustMiteVacuumCleaner”,inadditiontomorethan20ExcellenceAwardsfor
technologiessuchasthe“Air-conditioningSystemwithEnhancedVaporInjection”.In2021,adheringtothestrategicfocusof“TechnologyLeadership”,Mideaimplementedthepolicyof“OneMidea,OneSystem,OneStandard”tofurtherpromotestandardization.Atwo-tierstandardizationmanagementsystemhasbeenputinplacefortheGroupanditsbusinessdivisions,inadditiontoastandardizationmanagementcommitteeattheGrouplevel.Withthedoubledriversof“standardinnovation+productioninnovation”,Mideashiftsinnovationachievementstoadvancedtechnologicalstandards.Additionally,itplaysanactivepartintheformulationandrevisionofvariousstandards,contributingtothestandardizationofindustrialtechnologiesandcreatingmorevalueforusers,partnersandindustries.Asoftheendof2021,Mideatookpartintheformulation/revisionof1,347technologicalstandards,including41internationalstandards,514nationalstandards,277industrystandards,and515localandgroupstandards.MideaalsobecametheleadingworkunitoftheworkinggrouponTC212/WG7smartcontroltechnologyforwirelesshouseholdappliancesandtheworkinggrouponTC212/WG10sensors.TheGrouphasbeenrecognizedasan“EnterpriseStandardLeader”forfourconsecutiveyearsfor38standardscovering32products.MideaResidentialAirConditionerandMideaKitchenAppliancesbothhaveprojectsthathavebeenapprovedasNationalStandardizationPilotProjectsforConsumerGoods.SmartCloudMulti-splitAirConditionerwasselectedasoneofthe100groupstandardapplicationdemonstrationprojectsin2021.ThetwogroupstandardsofChinaHouseholdElectricalAppliancesAssociation(CHEA),namelyGeneralRequirementsandEvaluationSpecificationsforInnerPotofRiceCooker,andElectricStir-FryersforHouseholdandSimilarPurposes,whichMideaparticipatedinformulating,werecertifiedas"InternationallyAdvanced".MideaRefrigeratorwonthefirstAnhuiStandardInnovationContributionAward.In2021,regardingsmarthome,MideahasparticipatedintheformulationofInternationalStandardentitledRequirementsforEvaluatingIntelligentHouseholdAppliances,andNationalStandardentitledTechnicalSpecificationofIntelligentPowerModuleforHouseholdAppliances.Inrespectofbuildingtechnologies,Mideaadvocatestheindustryshouldimprovethequalityofmulti-splitmodelsandtakestheleadinformulatingthefirstreliabilityimprovementstandardforthemulti-splitindustry.Intermsofkeyproductperformance,MideatookpartintheformulationofthenationalstandardsentitledErgonomicsofThermalEnvironment-AssessmentofThermalEnvironmentinTransportation-Part3:Human
EvaluationofThermalEnvironmentComfort,ErgonomicsofThermalEnvironment-AssessmentandManagementofHumanColdandHeatStress,TestMethodsforNoiseofHouseholdandSimilarAppliances:SpecialRequirementsforFans,MeasurementMethodsforElectromagneticFieldsofHouseholdAppliancesandSimilarApparatuswithRespecttoHumanExposure,StandardTablewareforTestingtheEnergyandWaterEfficiencyofDishwashers,EnergyEfficiencyLimitingValuesandGradesforElectricOvensforHouseholdandSimilarPurposes,SafetyofHouseholdandSimilarAppliancesSpecialRequirementsforCommercialMicrowaveOvens,StandardSamplesofBricksforEnergyEfficiencyTestingofBuilt-inElectricOvensforHouseholdandSimilarPurposes,TestMethodsforNoisefromHouseholdandSimilarAppliances:SpecialRequirementsforVacuumCleaners,SurfaceCleaningApparatusPart1:GeneralRequirementsforTestMaterialsandEquipment,SurfaceCleaningApparatusPart3:PerformanceTestMethodforWetCarpetCleaningApparatus;Intermsofcorecomponents,MideaparticipatedintheformulationofthenationalstandardentitledSpecialRequirementsforElectricDoorLocksofElectricAutomaticControllersforHouseholdandSimilarPurposes,TotallyEnclosedTypeMotorforRoomAirConditioner-Compressor,industrystandardentitledElectricAutomaticControllerHumiditySensor,AluminumLiningPanelAssemblyforHouseholdRefrigerationAppliances,StandardforDomesticHeatPumpsDryers.Intermsofgreenandhealthytechnologies,MideaparticipatedintheformulationofindustryorgroupstandardsincludingEvaluationandTechnicalSpecificationsforGreenDesignProducts:RoomAirConditioner,TechnicalSpecificationsforGreen-DesignProductAssessment:
Refrigerator,TechnicalSpecificationsforGreen-DesignProductAssessment:ElectricRiceCooker,TechnicalSpecificationsforGreen-DesignProductAssessment:Fan,TechnicalSpecificationsforGreen-DesignProductAssessment:Blender,TechnicalSpecificationsforGreen-DesignProductAssessment:VacuumCleaner,TechnicalSpecificationsforGreen-DesignProductAssessment:HomeMicrowaveOven,TechnicalSpecificationsforGreen-DesignProductAssessment:Multi-splitAirConditioning(HeatPump)andSimilarUnits,TechnicalSpecificationsforGreen-DesignProductAssessment:Air-SourceHeatPumpColdandHotWaterUnit,TechnicalSpecificationsforGreen-DesignProductAssessment:HighTemperatureHeatPumpUnit,TechnicalSpecificationsforGreen-DesignProductAssessment:AirConditioningforComputerandDataProcessingRoom,TechnicalSpecificationsforGreen-DesignProductAssessment:CompressorforRoomAirConditioner,TechnicalSpecificationsforGreen-DesignProductAssessment:RobotVacuum,andRequirementsoftheGreenhouseGasEmissionsAccountingandReporting—HouseholdApplianceManufacturer.With
regardto“Leader”standards,MideaplayedapartintheformulationofGreenProductAssessment—HouseholdElectricAppliances—Part1:Refrigerators,Air-conditionersandWashingMachines,MinimumAllowableValuesofEnergyEfficiencyandEnergyEfficiencyGradesforElectricFans,MinimumAllowableValuesoftheIPLVandEnergyEfficiencyGradesforMulti-connectedAir-condition(HeatPump)Unit,SplitTypeRoomAir-conditionerwiththeFunctionofBreezelessMode,TechnicalCodefortheCertificationoftheBreezelessCoolingFeatureofMulti-splitAirConditioner,and“Leader”AssessmentRequirementsforUnitaryAirConditioners.Intermsofinternationalstandards,MideaparticipatedintherevisionofIEC60436“ElectricDishwashersforHouseholdUse-MethodsForMeasuringthePerformanceandIEC60456organizedbyIEC/TC59/SC59D,andtheperformancestandardproposalofIEC/59LNP63XXXelectricricecookerhasbeenformallyfiled,whilethestandardproposalofIEC60335-2-15onelectricpressurecookerhasenteredtheformalstandardmanuscriptinquiry(CDV)stage.ThefivemicrowaveovenperformancestandardsforIEC60705havealsoenteredtheWorkingDraft(WD)stage;thetwonationalstandardsproposedbyMidea,namedOver-the-Air(OTA)TechnicalRequirementsforElectricAutomaticControllerforHouseholdandSimilarPurposes,andGeneralSafetyTechnicalRequirementsforIntelligentVoiceControllers,havealsobeenapproved.C.Deepenedthechanneltransformation,furtherimprovedthechannelefficiencyandrebuilttheretailandToBserviceabilitiessoastoachievedirectconnectionwithcustomersMideaisresoluteinenhancingverticalefficiencyandhorizontalsynergyefficiency,acceleratingretailgrowthandretailtransformationbyfocusingonuserneeds.Throughthereformofdirectretailing,Mideahasbeencontinuouslypromotingthe"verticalefficiencyimprovement"ofofflinechannels.Morethan90%oftheretailersofofflinefranchisesystemcanplaceordersdirectlytoMideaforprocurement,achievingtheshiftfromdistributorstooperators.Mideakeptoptimizingtheinventoryefficiencyofallchannelsandreducedtheinventory-to-salesratioby20%.Thechangeoforganizationalstructurehaseffectivelysupportedthe"horizontalsynergyefficiencyenhancement".Mideahasstrengtheneditsoperationcentertomakeitbecomethe“mainbattlefield”,drivendeepcoordinationamongallproductcategories,andpromotedcorporateoperationsoftheoperationcenter,soastorealizethe"OneMidea"forallmarketsandensuretheconsistencyofuserserviceandexperience.In2021,onlinesalesasapercentageofMidea’stotalsalesremainedover45%,andonlineandoffline
marketsintegratedatafasterspeed.Basedondifferentlevelsandcharacteristicsofdifferentchannels,aswellaschangestocustomers’needsandwaysofspending,Mideadrivestheretailtransformationbasedonuserdemandsandexperience,andkeepsrefiningtheretailoperationssystem,soastoachievedirectconnectionwithretailcustomers.Thismainlyinvolvesthefollowingaspects.Firstly,beingcustomerexperience-oriented,itprovidesjusttheshoppingexperiencewantedbycustomersbyputtinginplaceanexclusivestorenetworkcoveringallchannels.Tobespecific,itpossessesmorethan900smarthomestoresfordomesticuserswithhousedecorationdemands.Meanwhile,ithasdeepenedthecooperationwithtophomedecorationserviceproviders.Ithasover2,500Mideaflagshipstoresindistrictsandcounties,aswellasover11,000Mideamulti-categorystoresintownsandvillages.Second,intheretaillink,Mideabuildsanimmersive3Dmodelroomforentirehomeappliancesfocusedonhomedecorationusers,providingaroamingshoppingexperiencetoachieveaccuraterecommendationsandexclusiveintelligentshoppingguide.Atthesametime,focusedontheimprovementoftheproductsuitepurchase,itbuildstheservicechainandexclusiverightsandinterestssystemforhomedecorationproductsuitepurchase,drivingtransformationtointegratedservicesforhomedecoration+homeappliances,andprovidinghomedecorationuserswithtime-saving,cost-effectiveandworry-freecomprehensivesolutions.Third,Mideaactivelyseeksnewbusinessopportunities.OnemergingchannelssuchasPinduoduo,Douyin,Kuaishou,andXiaohongshu,Mideahasrefineditsproductofferingandoptimizedthemarketingandratingsystem.Italsocontinuedtobuildtheoperationplatformfore-commerceandpromoteself-operatedcorestoresonthechannelsaspartofitseffortstodriveconsistencyandefficiencyinoperationsandpolishtheDTCcapability.Fourth,specialcampaignshavebeencarriedouttomakeproductmixbreakthroughs.Userneedsareaccuratelyidentifiedthroughdataanalysis,newmeasuresaretakentodrivegrowthinnewproductcategories,andeffortsaremadetoimprovethesmartscenariooperationcapability.Fifth,post-salesserviceandlogisticsexperiencearewelloptimized,includingintegrateddeliveryandinstallation,twodeliveriesinoneday,homedeliveryandhomepickupserviceforreturnedgoods.Digitalizationofthesupplychainandoptimizationofsupplyanddemandefficiencyarebeingpursued.Midealeveragesthe“Digitization&IntelligenceDriven”strategytobe“DirecttoUsers”,andinitiatesaseriesofbusinessmovesinuserexperience,useroperationanduserservicefromuserneedsandservicescenarios.Basedontheunderlyingdatacapabilitiesforuserdemandinsights,Mideacanbetter
serveusersthroughuserlifecyclemanagement,membershipandprivatedomainoperationstoenhanceuserloyalty.Firstly,Mideafocuseson"userexperience"andimprovestheuserexperienceofthewholevaluechainundertheguidanceoftheNetPromoterScore(NPS),withtheNPSincreasingbyover25%comparedto2020.Inaddition,Mideastrengthensuseroperationindailyoperation,promotestheestablishmentofmembershipsystemandprivatedomaintraffic,anddeeplypromotestheintelligenceandIoTofproducts.Bytheendof2021,thecumulativenumberofregisteredmembersexceeded110million.Furthermore,Mideareinforcesthebuildingofdataplatformandcommercialdataanalysis.Analysisofuserconsumptionbehaviordataservesasastrongsupportforbusinessdecision-making.Mideadeepensandpromotesthebusinessmodelchangeandthedigitalandintelligenttransformationoftheuserservicesystemtoprovideone-stopwhole-homesmarthomeapplianceservicesolutionsforusers.First,Mideareconstructstheserviceprocessfromtheuser'sperspective,andredesignstheserviceblueprintbycovering18corescenariosandsolving214servicepainpoints.Second,Mideaforgesaheadwiththeconstructionofintelligentinteraction,thatis,itlaunchedonlinevoicerobotsforrespondingcustomers'requests,H5textrobots,andIoT-basedactiveguidancefunctionforactivationandtroubleshooting,whichhelpedtohandle4millionordersthroughouttheyearwiththefirst-levelfailurenoticerateof87%;italsolaunchedthe"text+video+voice"customerinteractiveservicepriortopeerswithsatisfactionrateof98%,inordertoservecustomersincomplexscenes.Third,Midearollsoutacloudplatformfordigitaloperationsandservicestoconnectserviceoutletsandcovertheengineersandoutletsconsultationservices,anddroveefficiencyimprovementthroughouttheentirechainsbydigitaltransformation,solvingproblemsover500,000withtheaverageresponsetimeof120seconds.Fourth,wedeepenthechangeofengineeroperationmodebyassigningordersonlinebasedonbigdataintelligencetorealizethedirectconnectionofengineers.In2021,directallocationofover42millionworkordersacrossallcategorieswasfulfilled.Fifth,wecontinuetointroducenewtechnologiesandtoolstoempowerengineers’servicesbycomprehensivelybuildinganindependentlearningplatformforengineers.Atotalof113onlinenewcourseshavebeendevelopedandmorethan20,000engineershavegainedmulti-categoryservicecompetence.TheintroductionofAIintelligentimagerecognitiontechnologyfullysafeguardsthequalityofinstallation.Fourthgenerationofairconditioningintelligentvariablefrequencydetectorwasalsodevelopedtohelpengineerstoimproveserviceefficiency.Finally,
Mideaimprovestheservicemodeltoprovidebetteruserexperience.Ithasfullyrealizedthereplacementofsmartsmallhomeapplianceswithafter-salesservices,replacingnearly410,000productsthroughouttheyearwithshortenedreplacementcycleof3days.TransformationoftheToBbusinessmodelhasbeenfurtherdeepened.BasedontheGroup'sfivebusinesssegments,thebusinessmodelhasbeenupgradedfromtraditionalhardwareproductpackagestoscene-basedsolutionstargetingcustomersinthewholeindustry,soastoenhancesalesandbrandpresenceontheToBmarket.Meanwhile,refinementshavebeencarriedoutfortheexistingcustomer,productandbusinessstructures,thusincreasingtheprofitabilityofthebusinessvaluechain.Mideahasenhancedcross-divisionhorizontalsynergy,formingaregularspecialcollaborationmechanismforinformationexchange,businessopportunitysharing,marketstrategymaking,resourceallocationandotheraspects.Inadditiontothetraditionalhomeapplianceindustry,MideahasunfoldedcoordinatedmarketingintheToBbusinessoftheBuildingTechnologiesDivision,theRobotics&AutomationDivision,andtheDigitalInnovationBusinessthroughindustry-widesolutiondevelopmentandpromotion.Intheverticalsector,bytakingthetraditionalrealestate,industry,agriculture,commerceandconstructionbusinessastheaccesspoint,itcontinuestoexpandthecooperativeproductcategoriesandseizetheincrementalopportunitiesintheexistingmarket,toachievegrowthbreakthroughs.Intermsoforganizationalefficiencyimprovement,Mideaismarketoriented.Byoptimizingtheorganizationalstructureandreformingthesalaryandincentivemechanism,itdeliversconstantimprovementswithrespecttoorganization,personnel,appraisalandincentive,etc.,inordertoactivateorganizationandimproveefficiency.Intermsofbusinessmodelreform,throughcomprehensivesortingofexistingmarkets,industriesandcustomers,ittakestheinitiativetoadapttothedevelopmentandchangingtrendsofeachindustry,allocatesorganizationalresourcesbasedonmarketdemand,improvesprofessionalmarketabilityfordifferentindustries,strengthensthebuildingofserviceprovidersystem,deeplyoptimizessupplychain,andbuildsaLTC-basedwhole-processvaluechain.Intermsofsalesexpansion,theexpansionofnewindustries,newcustomersandnewcategoriesservesasabreakthroughtoachievebusinessgrowthandMideakeepsenhancingtheprofessionalsalescapabilitiesinregardwithcustomersfromdifferentindustries.TheToBbusinessachievednearly50%year-on-yearshipmentgrowthin2021.Inaddition,Mideacontinuestobeefupoperationalriskcontrolinternallyandexternallytoensurethesustained,healthydevelopmentofthebusiness.
Annto,asubsidiaryofMideaGroup,isatechnologicalinnovation-basedlogisticsserviceprovider.Itiscommittedtoprovidingcustomerswithend-to-enddigitalandintelligentsupplychainsolutions.Intermsofinternalsupportandservices,underthebackgroundofMideaGrouppromotingtheT+3businessmodeldeepreform,AnntofurtherpromotedthelogisticsreformandimprovedB2Clogisticscapacity.Throughbigdataanalysisanddatamodelingandbasedonuserneeds,Anntorefinesandintegratesitswarehousenetworkacrossthecountryandexpandstheunifiedwarehousinganddistributionmodeltoretailstores.Overallplanningofchannelinventoriesandunifiedoperationofwarehousinganddistributionboostchannelefficiencyandprovidesupportforcomprehensivestandardizationanddigitalizationofuserservices.In2021,Anntoestablishedanintegratedandsmartsupplychainplatformforthewholeprocessofproductionlogistics,warehousing,urbandistribution,deliveryandinstallation.ItalsocooperatedwithSino-USGlobalLogisticsInstituteofShanghaiJiaoTongUniversitytoestablishtheJointResearchCenterforSmartLogisticsandSupplyChain,generatingachievementsinrouteplanningfordeliveryvehicles,schedulingandcontrollingofdigitalmanufacturinglogisticsandotherfields.Inthefieldofproductionlogistics,withthehelpoffourmajorservicesandproducts,namelyintensivetransportation,smartVMI,internallogisticsandintegrationofdeliveryandpackaging,andthedevelopmentofdigitalizationandintelligence,AnntopromotesthereformofsupplychainbusinessofMideaandtheinventoryisoptimizedandbecomesvisible.Preliminarily,therearefewerneedsforhumanlabors,ahigherlevelofdigitalizationandmoreflexibility.VMIcentershavebeenestablishedinmanyproductionbases,providingservicestothousandsofsuppliersatthesametime.Inthefieldofwarehousing,equippedwithAGV,stackers,circularshuttlesandotherintelligentdevices,thefirsthigh-standardautomaticwarehouseforheavycargowasestablishedandwentintoservicein2021.Leveragingautomaticcodescanning,cargo-typetesting,Goods-to-Person(G2P),automaticoutboundandotheradvancedtechnologies,thewarehouseachievesintelligentunmannedwarehousemanagement.Meanwhile,largelogisticsdistributioncentersandthousandsofpre-warehouseswereestablishedinmorethan140citiesnationwide,withatotalstorageareaofmorethan6millionsquaremeters.Inthefieldofurbandistribution,goodscanbedeliveredfromonecitytoanotherdirectlyviatheless-than-truck-load(LTL)distributionnetworks.Routeplanninghelpsrealizeoptimalefficiency.Meanwhile,Anntostrengthensthecultivationandexpansionofendoutlets,improvinguserexperience.Inthefieldofdeliveryandinstallation,in2021,Anntoestablishedanintegrateddelivery,installationandpost-salesplatformandintegratedonlineandofflinebusinesses,andintegratedsales,logistics,
after-salesandotherprocessesaswellasalllinkswithintheafter-salessystem.Italsoestablishedamodelthatallowedengineersoftheplatformtomanageandpaydirectly,andstandardizedandvisualizedthedeliveryandinstallationprocess.Currently,thedeliveryandinstallationnetworkhasmorethan3,000deliveryandinstallationoutletsandover32,000professionalengineers,coveringmorethan2,700districtsandcountiesinChina.In2021,thenumberoffulfilledordersexceeded13million.Tensofmillionsofusersgotdeliveryandinstallationservices.Anntowasalsotheleaderinthefieldofdomesticheavycargodeliveryservice.Intermsofexternalbusinessexpansion,adheringtothebusinessphilosophyofbuildingandsharingwithcustomers,Anntoprovidesstrongsupportforcorporatecustomersinpromotingchannelefficiencyandsalesgrowth.Itfocusesonindustrialcustomersandindustryindepth,whilecontinuingtostrengthentheconstructionofcorecapabilitiessuchasLTL,urbandistributionandintegrateddeliveryandinstallationtosteadilyimprovecustomerserviceexperience,thusincreasingitsmarketshareyearbyyear.Byprovidingcustomerswithsystemicsolutionsrangingfromlogisticsservicesfromrawmaterialstofinishedproducts,asharedinventorysystemfromonlinetoofflinechannels,ToB/Cintegration,tointegrationservicesofwarehousedistributionlogisticsandintegrationservicesofdeliveryandinstallation,Anntoassistenterprisestotransformchannelsandboostsupplychainefficiencyaswellashelpcustomersdevelopcontinuously.BasedonMidea'sindustry-leadingexperienceofchanneltransformationandsoundsmartsupplychainsystemsandnetworks,Anntohasprovidedservicestothousandsofenterprises,withclientsspanningmanyindustriesacrosshomeappliances,consumerelectronics,foodandbeverage,maternalandinfant,andhouseholdnecessitiesandchemicals.In2021,a“sharedinventorysystem"supplychaininnovationinMideaGrouplaunchedbyAnntowasincludedinthelistof"TypicalCasesofDeepIntegrationandInnovativeDevelopmentofLogisticsIndustryandManufacturingIndustry"compliedbytheEconomicandTradeDepartmentoftheNationalDevelopmentandReformCommission.Via“asharedinventorysystem”coveringthewholechannel,Anntofurthersupportscorporatecustomersinestablishingasystemtomonitorthewholevaluechainoperationindicatorstocontinuouslyoptimizecostsandexpenses,strengthenriskcontrolcapabilities,andprovidedatasupportforbusinessdecisions.D.Promoted“GlobalImpact”,enhancedlocalizedoperationsoverseasandacceleratedthe
cooperativeintegrationofTLSCMideafurtherpromoteditsglobalbusinesslayouttosolidifyitsglobalcompetency.Itformulatedaglobalsupplycooperativemechanism,strengthenedtheglobalmanufacturingnetworkandlocalizedoperationsoverseas,optimizedthegloballogisticsandservicesystem,andpromotedproductglobalizationandregionalization.Itsoverseasbusinessspansmorethan200countriesandregionsinNorthAmerica,SouthAmerica,Europe,Asia,AfricaandOceania.Meanwhile,guidedbythemarketandfocusingonusers,Mideabuildsaglobaluserresearchnetworkwithforesight.Mideahasestablishedanorganizationforlocalconsumerandmarketobservation,builtadigitalmarketingecosystem,implementedproductlifecyclemanagementbasedonthechangingtrendsofuserneedsandconsumptionhabitsaroundtheworld,builtusertouchpointsthroughouttheentirechain,andcontinuouslyoptimizedandmatchedtheretailoperationsystemfortheuser-growthmarket.Ithasreconstructedtheoverseassalesoperationsystem,continuouslydeepenedtheuser-orienteddigitaltransformation,andestablishedend-to-endprocurementaswellasexecutionprocesses,tools,operationmechanismsandinformationconnectionforsalesorderstoachieveonlineandvisualoverseasplanningandorderexecution.Mideaexertedgreateffortstobuildtheintelligentoverseascommercialsystem,constantlydeepeneditsdata-basedbusinessdecision-makingcapability,andcreatedadigitalplatformtofacilitatemobileoperationsoverseas.23overseasbrancheswerecovered.Atotalof45keyindicatorswereincluded,suchassales,finance,supplychain,products,ande-commerce.Furthermore,real-timeonlinebusiness,datatransparencyandsharing,andearlyriskwarninghavebecomeavailableforbetteroperatingefficiencyinthekeypartoftheoverseasbusiness.In2021,MideamadeheadwaytowardstheGlobalImpactstrategythathasfocusedontheUnitedStates,Brazil,Germany,JapanandASEAN,andinitiatedaspecialcampaignforoverseasbranding.Itnotonlyclarifiedspecificplansforusersegmentation,productmaps,brandmatricesandlocalizationinfrastructureconstructioninstrategicmarkets,butalsoinvestedmoreresourcesinuserinsight,branding,productinnovationandorganizationalconsolidationtoensuretheimplementationoftherelevantstrategies.Itkeptimprovingthedistributionofoverseaschannels,beingcustomer-orientedandpromotingthetransformationofoverseaschannelsintoretailterminals.Mideaaddedmorethan43,000overseasownbrandsalesoutlets,withacumulativetotalofover150,000,andconstantlypromoted
channelflatteningtoimprovechanneldatatransparency.Bybuildinganoverseasdataplatformandintroducingdigitaldecisionmodelsandalgorithms,ithasimprovedcargoturnoverefficiency.Mideaachievedonlinescene-based,video-based,andlivestreamingoperation,aswellasimprovedchanneloperationefficiencyandcapability,byexperimentingwithfulldirectoperation,asharedinventorysystem,andsharedwarehouses,inadditiontopilotingtheDTCmodel.Multipleproductsuitesandkeysingleproductswerereleasedfortheoverseasonlinemarkets,whicheffectivelyenhancedcustomerroyaltyinthepost-pandemicera.Mideahassteadilyincreaseditsinvestmentintheoversease-commercebusiness.Itestablishedoversease-commercecompaniesandformedspecialteamsfortheoversease-commerceITsystem,improvedthee-commerceorganizationalstructurebyintroducingprofessionaltalents,anddevelopedadigitalsysteminlinewithbusinessneeds.In2021,itachieved65%year-on-yeargrowthinoversease-commercesales,withanever-increasingproportionofe-commercesales.Morethan40BestSellerproductswereavailableonthee-commerceplatformsintheUnitedStates,theUnitedKingdom,Germany,ItalyandBrazil,witheightsub-categoriesrankingasthetopthreesalesonAmazonintheUnitedStates.Furthermore,ithasalsograduallyimprovedtheAsia-Pacificregionale-commerceorganizationandachievedyear-on-yeargrowthof145%duringtheannuale-commercepromotioninSoutheastAsia.Withacceleratedexpansionsofe-commercechannels,Mideahaspluggedintolocale-commerceplatformsinmorethantenEuropeanandAmericancountriesin2021.Ownbrandingwasstrengthenedoverseas.ItexpeditedthepaceofglobalbreakthroughofitsownbrandbylaunchingaspecialprojectforbrandinginNorthAmerica.Itstrengtheneditsownbrandpenetrationinkeymarketsinmultipledimensions,includingofflineterminalretailexperience,guideteamdevelopment,socialmediacampaignandwhole-houseproductsuitemarketing.Mideareachesmillionsofoverseastargetusersthroughsponsorshipofwell-knownfootballclubsandsportingeventsinEurope,NorthAmerica,SouthAmericaandSoutheastAsia;itcontinuouslyimprovesbrandexposureandinvestsindigitalmarketingtoescalatepromotioninlocalmarketandfurtherenhanceMidea'sglobalpresencethroughmarketingcampaignsonlivebroadcastingplatforms,socialmedia,independentwebsitesandsearchengines.Overseasplatformbuildingwasimprovedtopromoteoverseasusergrowthprojects.Adigitalecosystemofusergrowthwasconstructedwithsixmajortouchpoints:userco-creation,userservices,brandofficialwebsite,socialmedia,oversease-commerceandtheMSmartLifeApp.Withthebestmodesofoverseasuserdatastorage,contentiterationandoperationexplored,anoverseascustomerdataplatformwascreatedtopromoteoverseasprivatedomaintraffic;theoverseas
manufacturinglayoutwasfurtherimproved.Toacceleratethemodelof“China-BasedSupplyfortheWorld+LocalSupply”,Midea'snewproductionbaseforrefrigerators,washingmachinesandwaterheatersinEgypthasputintooperationandwillcovermarketsintheMiddleEastandAfrica;thenewproductionbaseforairconditionersinThailandhascompletedtestrunandwillfurtherimprovethemanufacturinglayoutinSoutheastAsia.AnewmanufacturingbasewaslaunchedinBraziltocoverseveralkeycategories.Inaddition,thedomesticrefinedmanufacturingsystemwasintroducedandpromotedintheoverseasmanufacturingbases,andoverseastalentdevelopmentwasenhancedwithrespecttoleanmanagement,withanover-20%increaseinmanufacturingefficiencyandanimprovementinglobalproductionanddeliverycapacity.TheconstantlyrefinedEHSmanagementsystemprovidesfirmassuranceforthesafeandstableoperationoftheoverseasmanufacturingbases.Globallogisticsandservicesystemwasenhanced.Ontheonehand,itdeepenedcooperationwithglobalstrategicpartners,andcreatedanewmodeofinternationallogisticscooperationtoeffectivelyensurethesupplyoflogisticsresourcesduringdrasticmarketchanges.Ontheotherhand,itimprovedtheglobalservicecapability.MideaoptimizesservicenetworksofoverseasiSERVICEsystemandcloudcallcenterplatform,andmasterdatamanagementofglobaloutletsandserviceprojects,andcontinuestoconstructfast-responseandproactiveglobalservicesystem.MideahassuccessfullyexpandedtheglobalservicesystemtoIndonesia,Malaysia,Thailand,Singaporeandotherkeymarkets.Thecloudcallcenterplatformwasrolledoutinmanycountriessuccessively,andMideaSparePartsCenterhasbeenputinplacetobuildaglobalspartpartssupplychainmanagementnetworkanddrivedigitalandintelligenttransformation,withanaimtoensurethetimelinessandcoverageofspartpartssupplyfortheoverseasbusiness.Theunifiedbarcodeofthewholevaluechainofproduction,logistics,salesandpost-salesservicehasgreatlyimprovedserviceefficiencyanduserexperience.Digitalintelligencesupportedthedevelopmentofoverseasbusiness,bypushingforwardtheonlineandautomationofthewholebusinessprocess,coveringthefront-endoptimizationofbusinessandfinancialprocesses,andthenewproductlaunchprocess,aswellastheback-endconsolidationoftheonlinemanagementofinventoryandpost-sales,inordertobettervisualizethewholeprocess.Basedonthediversifiedchannelstructureandbusinesscharacteristicsofoverseasmarkets,itdevelopedanoverseaschannelcollaborativeplatformtorealizeonlinebusinessprocessingforcustomersofdifferentchannelsandimproveoverseaschannelmanageability.
In2021,theCOVID-19pandemichasremainedaseriousimpedimenttotheJapanesemarket.Theoperationwasfurtheraffectedbyrisingrawmaterialcostsandexchangeratefluctuations.TLSCcontinuedtodeepenthesynergywiththeGroup'sproductdivisionsinthevaluechaintoensurethesupplyofproductsdespitethepandemicandtightseafreightresources,whilesafeguardingthesafetyofemployees.Measuressuchaspriceadjustmentsthroughthelaunchofnewproductsandenhancedsalesactivities,improvedproductmix,increasedretailmarketshareandtightlycontrollednon-operatingexpenses,soastoaddresstheimpactofrisingproductcostsandotherfactorsandensuretheaccomplishmentoftheoperatingobjectivesandprofitgrowth.TheretailsalesoftheJapanesehomeappliancemarketdeclined3%comparedto2020,whilethatofTLSCbuckedthetrendandgrewby9%.Itsmarketshareofsixmajorproductcategoriescombinedhasincreasedto12.5%,withtherespectivemarketshareofairconditioners,refrigerators,laundryappliances,microwaveovensandricecookerscontinuouslygrowing.Organizationalstructureandbusinessmodelaretransformedtoadapttomarketchanges.Onlinesalesteamisfurtherstrengthenedwiththeproportionofonlinesalesconsistentlyincreasing.Domesticsales,post-saleorganizationsystemandnetworkdistributionareintegratedandoptimizedtoenhanceorganizationalefficiencyandvitality.TLSCcontinuedtoboostsynergieswiththeGroupandtherelevantdivisionsonbranding,R&Dandinnovation,supplychainintegration,qualityimprovement,etc.,soastobuildastrongproductportfoliofortheglobalmarkettogether.Bytheendof2021,thebusinessofTLSChascoveredmorethan70countriesandregions.E.Steppedupthecomprehensivedigitalizationtomaterializedata-andplatform-basedoperationsinthewholevaluechain,andthustobecomemorecompetitiveinthedigitaleraFocusingon“Digitization&IntelligenceDriven”,Mideaachieveschangesintheformatofproducts,driveshardwaresalesthroughsoftwaresalesandintensifiescontentsandservices;andachieveschangesinbusinessmethodology,promotesreformsinresearch,productionandsales,andfostersdisruptivechangesinexistingbusinessmodelsthroughanInternetmindsetandInternettools.Mideahaspromotedbusinessdigitizationandestablishedadatabusinesssystem.Afteryearsofdigitalpractice,focusingonthedevelopmenttrendofindustrialdigitalizationandthecharacteristicsofindustrialdigitalization,MideahasestablisheditsSMARTdatabusinesssystem.Withprocesschangesthroughoutthewholechainofdatabusiness,datagovernancetoensuredataspecificationand
availability,high-valuedataassetsconstructedrelyingonthepubliclayer,dataproductsanddataapplicationshavebeencreatedwithdatatechnology.IntheprocessofR&D,Mideahasconstantlyfocusedonthestrategyof“TechnologyLeadership”.Inthedigitalandintelligentplanning,aimedatdatasuchasshort-termmarkethotspots,mid-andlong-termmarkettrendsanduserresearchandfeedback,adigitalplanningplatformwasestablishedtoachievetheintegratedanalysisofbigdataandsmalldatainordertotapintouserneeds.Throughdigitalization,Mideaquicklytransformeditstechnologycapabilityintopopularproductsofhighuserperception.Dozensofnewproductshavebeencreatedontheplatformuptonow.Inthedigitalintelligentdevelopment,thefirstyearofdigitalsimulationofMideawaslaunched.TheunifieddigitalsimulationplatformandthesimulationtalentsystemofMideawereestablished,andintelligentlaboratorieswerebuilttorealizetheautomationoftesting.ThedigitalR&Dplatformwasbuilt,andindustrialsoftwareplatformsinR&DsuchasGPMandMPLMwerereleasedandgoneliveinallR&DunitstodrivethetransformationofefficientcollaborativeR&Dmode.Intheprocessofmanufacturing,Mideahassteppedupthedevelopmentof5G+IndustrialInternetofThingsandlaunchedtheconstructionofseveralfactorieswith5Gfullyconnected.Ithascompletedthefullcoverageofthe5Gnetworkineightparksoffiveproductdivisions,boostedthelarge-scaleapplicationofdigitaltechnologiessuchas5G+AIand5G+ARinqualitymanagementandwonthefourthChinaQualityAward,withanevidentimprovementinproductquality.Ingreenmanufacturing,basedontheIndustrialInternetofThingsPlatform,Mideahaspromotedthenetworkedandintelligentupgradeoftheenergymanagementsystem.Intheproductionplan,itachievedmulti-constraint,multi-objectiveandmulti-versionschedulingschemesbyaself-developedintelligentmixed-flowschedulingalgorithm,whichsteadilyimprovedproductionefficiency,withtheplanningandschedulingefficiencyimprovedby75%andthefactoryresourceallocationefficiencyimprovedby8%.Intheprocessofwarehousinganddistribution,thesolutionscenefortheoverallsupplychainhasbeensupportedbyT+3planconnection,directdelivery,unifiedwarehousinganddistributionaswellassharedinventory,tomaterializethecorecompetitivenessofsupplychainandlogisticsservicessuchasnationalintegrationservicesofwarehousedistributionlogistics,onlineandofflineBCintegration,deliveryandinstallationintegration.Inaddition,iterativeupgradingwasachievedviaIoT,ultra-widebandwidth(UWB),5G,blockchain,bigdata,intelligenthardware,andothertechnicalapplicationstoshortendeliverytime,improveefficiencyandprovidearobustguaranteeforthe
implementationofMidea’sstrategyof“DirecttoUsers”.Intheprocessofmarketing,Mideahasdriventhe“DirecttoUsers”strategywiththe“Digitization&IntelligenceDriven”strategy,adheredtothecustomer-orientedprincipleandfocusedonbuildingadigital,intelligent,personalizedandopenMideaCloudSalesplatform,whichhassupportedtheretailreform,C2Mmodel,unifiedwarehousinganddistribution,direct-managementanddirect-paymentservicesforengineers,andintelligentanalysisofbigdatatofurtherenhancethedigitalintelligentoperationcapabilityandplatformoperationallevelofallchannelsandthewholevaluechain.Meanwhile,themembershipsystemjointlyestablishedwithretailstoreshasattractedmoreusers,encouragedthemtotakepartinmemberactivities,improvedbuyingexperience,andboosteduserroyalty.Specifically,offlinemembershavecoveredmorethan1,300storesandthesalesvolumeofmemberstranslatedfromEnterpriseWeChatreachedaroundRMB10million.Intheprocessofafter-salesservice,theafter-salesservicereformhasbeensteadilyimplementedtointensifyusers’serviceexperience.Mideahastakentheleadintheindustryinuserreputationonthird-partye-commerceplatforms,withservicesatisfactioncloseto99%andserviceprofessionalismhitting99.2%.Besides,ithasalsofocusedondigitalintelligentservices,withmorethan
2.7millionannualworkordershandledbyvoicerobotsandover20,000customersservedbyvideocustomerservicesin2021.Theconvenientservice,packagepurchasingandinstalling,wascomprehensivelypushedforwardedtoforgeengineersprovidingmulti-categoryservice.Forsetworkorders,thecompletionrateofthesameengineerreached99.3%,andsalesbyengineerscontributedmorethanRMB2.3billion,withayear-on-yearincreaseof130%.Mideahasstrengthenedthetransformationofdirect-managementanddirect-paymentofafter-salesoutletsandengineerstoconstantlyenhancetheserviceefficiency,withtheworkorderdirectallocationrateofmorethan70%,thepercentageofdirectpaymentamountaccountingforapproximately90%.Duringtheoperationandmanagementprocess,in-depthexplorationismadeinthebestdigitalpracticeoftalentdevelopment,andtheestablishmentoftalentanalysismodels,talentlabelsystemsandthetalentportraitsystemisacceleratedtolayasolidfoundationfortheintelligentapplicationofhumanresources.Besides,aimedatstandardizingthemanagementprocedureandimprovingoperatingefficiencyandservicequality,wehavemadecontinuouseffortstoimprovetheemployeemanagementsystem.Mideahasrealizeddigitaldecisionsupport,providingefficientandrichdigitalservicesanddigitalself-serviceanalysistoolsbydatabanktoimprovedatasupportforthewholevaluechain.Byupgradingthemobileinfrastructure,mobileapplicationsarepromotedinmarketing,supplychain,etc.Moredigitalscenesarecreated,and
decision-makingefficiencyandthecapabilityofcomprehensivedigitalizationisenhanced.Withrespecttooverseasoperations,withthe“International632Project”asthecore,Mideacontinueswiththedigitaltransformationofitsoverseasbusiness.Theglobalorderprocessingmechanismwaslaunchedtoconnectoverseasmarketingandmanufacturinginaneffectiveandautomaticmanner.Tosupporttheimplementationofthestrategyof“GlobalImpact”,multiplekeyprogramshavebeenlaunched,includingoversease-commerceplatforms,empowermentofoverseaschannelsandretailstores,theT+3systemforoverseasoperations,theglobalcapitalplatform,integratedglobalservices,etc.Further,automationwaspromotedinoverseasmarketingtoasawaytoincreaseefficiencyinthewholeoverseasvaluechain,andboostglobalcompetitivenessunderthenewcircumstances.Additionally,inresponsetoChina’sgoalswithrespectto“carbonemissionpeak”and“carbonneutrality”,Mideahasbeefedupenergysavingandemissionreductionbyrelyingonitsstrategyof“Digitization&IntelligenceDriven”.Ononehand,M.IoThasconnectedeachkeynodeofenergyuseinmanufacturingandproductionplanningsystemstoenabletransparent,visualandcontrollableenergyefficiencymanagement.Also,digitaltechnologieshavebeenadoptedtoupgradeenergymanagementinthemanufacturingprocess.Sofar,thedigitaltransformationofenergyefficiencymanagementhasbeenappliedtonearly20factories,reducingenergyconsumptionfortheproductionofasingleproductby15%aswellassupportingupstreamanddownstreamcompaniesandexternalcustomersincarbonemissionreduction.Ontheotherhand,scene-basedinnovationandapplicationextensioninsmarthomefeaturinglowenergyconsumptioncanhelpsaveenergyandreduceemissionsintheprocessofproductuse.Mideahasbuiltanewdataplatformwithmanufacturingcharacteristics.Byintegratinglarge-scaleofflinecomputing,streamingcomputing,graphcomputing,datamining,machinelearning,neuralnetworksandotheradvancedbigdatatechnologies,ithasconnectedtheGroup'sresearch,productionandsalesdataandintegratedtheGroup'ssmarthome,intelligentmanufacturing,smartbuildings,robotsandothermulti-industry,multi-terminalandmulti-categorydata.Withtheintegrationofonlineandofflinedatainadditiontoproductandservicedata,ithasbuiltcoredataassetswiththecoreasB-endandC-endcustomers,toimprovethe"UserOne_ID"systemandachieveasset-based,real-timeandservice-baseddata.Intermsofasset-baseddata,Mideahasimprovedthemethodologyofdataconstructionand
comprehensivelybuiltcoredataassetssuchasuserdomain,marketingdomain,IoTdomainandsupplychaindomain,andsignificantlyimproveddataaccessanddataconstruction.Intheaspectofreal-timedata,throughlarge-scalestreamcomputing,datadelayhasbeenreducedtoamillisecondlevel,coveringmorethantenbusinessareas.Datatimelinesshasbeenimprovedtomaterializecostreductionandefficiencyimprovement,withabove20%andabove50%respectivelyinsomeareas.Asforservice-baseddata,morestable,efficientandflexibledataservicehasbeenbuilt,andthestabilityofdataservicehasbeenincreasedtoabove99%.MideahascomprehensivelypushedforwardtheimplementationofIoTtechnologyplatform,integratedtheadvantageousITandR&Dresources,andcontinuouslydeepenedthePaaStechnologyplatformtosupportdepartmentsandentitiessuchasIT,IoT,BuildingTechnologies,MideaCloud,andAnnto,completingthedeploymentofdomesticandoverseaspublicandprivateclouds,andmaterializethelandscapeofglobalmulti-datacentersoperationandmaintenance.Asatthebeginningof2022,PaaSTechnologyCenterhasempowered180systems,withthenumberofserviceaccessesincreased3times.ThetotalamountofAPIrequestsofPaaScomponentshasincreasedtensoftimes,upto6.75billiontimes.Theefficiencyofinternalsystemtechnologyplatformconstructionhasincreasedby10%andtheservercosthasreducedby20%.Moreover,Mideahasbuiltaself-developedplatformofcontainercloudanddevelopedanindustry-leadingcontainerizedbusinessform,andthetotalnumberofITsystemsconnectedtocontainersreached138,withover85%oftheGroup'smicroservicesystemscontainerized.Inthefuture,itwillbuildelasticandstablecontainercloudarchitectureinordertoempowertheMideaCloudSalesplatform,reducethecostandtimespentontheself-developedplatform,andimprovesystemstabilityandreliability.Mideahassteadilyenhanceditsartificialintelligence(AI)technologiesandfurtherpromotedtheapplicationofintelligenttechnologies.In2021,MideaAIInnovationCenter,withanR&Dteamofover200people,establishedAItechnologyR&DnetworkscoveringChinaandtheUnitedStatestoachievecontinuousinnovationinAIcoretechnologiesandimplementedtheapplicationsinfourmajorfieldsrespectively,includinghomeservicerobots,smarthomeAIempowerment,AIhomebrain,andedgeintelligence,drivingtheapplicationofproductsofAItechnologyinsmarthome.Amongthem,thevoicefull-chaintechnologyhasgraduallybeenmaterializedinthevoicefront-end,speechrecognition,natural
languagecomprehension,speechsynthesisandotherfields.Besides,industry-leadinginnovativetechnologycombinationssuchasthemixofdialects,intelligentwake-up,peoplediscriminationbythevoice,andproactiverecommendationswerealsobuilt.Theindependently-developedtechnologiesrelatedtovoice/languagehavebeenappliedtofiveformatsofproducts,11productcategoriesand34SKUs,andaccumulativelyserviced1.1billionuserrequests.Mideahasachievedtechnologicalbreakthroughsincomputervision.Invirtualhumantechnology,thefullonlinereal-timesynthesisfromtwo-dimensionalimagestothree-dimensionalimagesofthepersonhasbeenmaterializedandtheindustry-leading2Dcamera-basedtechnologywhichisdrivenbyliveactionandautomaticallygeneratesemoticonshasbeendeveloped.Inthesceneofsmarthome,acentimeter-levelsemanticmaphasbeenachievedandthelow-coststandardizedvisualrecognitionhardwaremodulehasbeensuccessfullydeveloped.Furthermore,theMideateamwonsecondplaceinTrack2atICCV2021DeeperActionChallengeintheworld.F.Promotedthestrategyof“Digitization&IntelligenceDriven”andacceleratedtheimplementationof“ComprehensiveIntellectualization”to“CustomizeaSmarterMideaLifeforYou”In2021,Mideaupgradedtheusers’smartlife,establishedaC2Mdigitalplatformforwhole-houseintelligentsolutions,completedtheplatformsofMideaCloudSales,MideaHomeDeliveryandMideaCloudShelvesaswellasdevelopedpersonalizedwhole-housesolutions,whichwereavailableforuserstoplaceorderswithoneclickandselectSKUorproductmixfordifferentscenesatwill.Thewhole-houseintelligentterminalofMideacoverednearly700storesinChina,andmeanwhile,100storesrolledouttheprojectofexperiencepavilionforwhole-housesmarthomeremodeltoprovideone-stopwhole-houseintelligentsolutionsforusers.Thesalesofthesolutionforthewhole-housespacescenereached180,000ordersin2021,achievingatradingvolumeofmorethanRMB14billion.Asattheendof2021,theMSmartLifeApphascumulativelylaunchedover300smartscenes,ofwhichtheexecutionexceeded280milliontimesduringtheyear.ThenumberofconnectedMideasmartdeviceshasincreasedbyover96%yearonyear,with20%offamiliesconnectedtomultipledevices.Inaddition,theinternationalversionoftheMSmartLifeAppnowsupportsThaiandVietnameselanguagestobackuptheintelligence-baseddevelopmentofkeyoverseascountries.
M.IoThasbuiltabusinessvaluechainofMideaSmartHome,whichisbasedonthelifecycleofuserexperienceandiscustomer-oriented,toprovideuserswithwhole-sceneexperienceservicesandmorequalityecosystemvalue-addedservicestocreateapan-MSmartLifeAppecosystemthatfocuseson“CustomizeaSmarterMideaLifeforYou”.Itcontinuestoturnanewpagetomeettheneedsofcustomers.Mideahasfurtheredin-depthcooperationwithHuawei.Withmorethan230typesor25categoriesofHarmonyOS-basedhouseholdappliances,ithasmadealeapfromSKUcooperationtowhole-houseintelligence.Inaddition,ithasreachedstrategiccooperationwithTencentXiaoweiinSmartHome.ItcanmaketheAIvoicecontroltomainstreamintelligenthouseholdappliancesofMideaarealitythroughTencentXiaoweiassistant.Moreover,MideaalsohascarriedoutstrategiccooperationwithChinaElectricPowerResearchInstitute(“CEPRI”)androlledouthouseholdappliancesequippedwiththeenergy-savingprogramofCEPRItoachievetheonlineregulationofloadresourcesandtwo-wayinteractionwiththepowergrid,whichpromotedtheefficiencyimprovementinadditiontothesafeandstableoperationofthepowergrid,andproactivelyfuelthenationalstrategyof“carbonemissionpeak”and“carbonneutrality”.Additionally,ithasfurtherdeepenedcooperationwithoverseascompaniessuchasGoogle,AmazonandApple,andcontinuedtooptimizethevoicereciprocalexperienceofproductstoachievemulti-equipment,cross-brand,cross-platformanddiversifiedservicelinkage.M.IoTopenplatformlaunched“SceneConfigurationPlatform”tofurtherimprovethedevelopmentandaccessefficiencyofscenelinkagecapabilitiesofscenesofallcategories,with78%ofsmartdevicessupportingscenelinkagecapabilitiesasattheendof2021.BasedonthehealthresearchresultsandbigdataanalysiscapabilityaccumulatedbyMideaformanyyears,Mideahasbeenabletoprovideuserswithpersonalizedandcomprehensivesolutionsforhealthysleep,dietandothersceneswithMideaproductsasthecore.Basedonusers,environmentandequipmentdata,Mideahascreatedthe“AirCloudHousekeeper”intelligentalgorithmfunctioncoveringmultipleproducts,whichcanachieve“cloudmanagement”ofdevicesforusersthroughintelligentalgorithms,meetingtheneedsofusersindifferentscenes.Also,SmartRefrigeratorAIFresh-keepingCloudHousekeeperhasbeenlaunchedtofurtheriteratethealgorithmofkeepingfoodstoragefresh,andtomakeadjustmentsinviewoftheusers'preferencesandambienttemperature,thusrealizingprecisetemperatureandhumiditycontrol.SmartCloudHousekeeperpointstothefourfrequentthemescenesof"air","water","diet"and"cleaning",steadily
optimizesuserexperienceandachievestheenergy-savinggoal.Itaddsthereminderfunctionforappliancefailureandservicestatusupdates,aswellasgeneratesreportswithapplianceoperationbasedondataanalysistofacilitateenergy-savingcontrol.In2021,themonthlyactiveusersofMideaSmartCloudHousekeepergrewmorethan450%yearonyear.TheAPPhasprovidedmorethan6millionMideauserswithmoreenergy-saving,morecomfortable,moreconvenient,saferandhealthierdigitalfamilylives.Dozensofpatentapplicationsforinnovativetechnologieshavebeensubmitted.Meanwhile,the“ElectricHeatingCloudHousekeeper”hasalsobeenaccreditedwiththefirstVDEenergy-savingcertificationintheindustry,savingupto40%ofelectricityforusers.Withtheprotectionofuserprivacyanddatasecurityatthecore,MideahascontinuouslybuiltandimprovedtheMideasmarthomesecuritysystemthatisinlinewiththestandardsofthedomesticandoverseasindustry,whichhasbeenCNASandISO17025certified.Inearly2021,M.IoTcloudplatformandtheMSmartLifeApppassedtheassessmentforclassifiedprotectionofinformationsystemsecurity.InOctober2021,ChinaCybersecurityReviewTechnologyandCertificationCenterissuedtheindustry'sfirst“ITProductInformationSecurityCertification(EAL4+)”certificatefortheSmartHomeCommunicationModuleofMidea.Inthesameperiod,MideasuccessfullypassedthesystemcertificationoftheCrossBorderPrivacyRules(“CBPR”)ofAsia-PacificEconomicCooperation(“APEC”)andwasaccreditedwiththecertificateissuedbytheInfocommMediaDevelopmentAuthority(“IMDA”)ofSingapore.Besides,MideawasalsoaccreditedwiththesecuritycertificateofCloudSecurityAlliance(“CSA”)issuedbytheBritishStandardsInstitute(“BSI”)andtheinternationalstandardcertificateforComplianceManagementinRelationtoAntitrustandDataProtectionISO37301:2021.Assuch,M-Smartisconsideredindustry-leadingintermsofdatasecurity.Midearedefinestheintelligentstandardoftheindustryandbooststheimprovementofuserconnectionexperiencethroughtechnologicalinnovation.InMay2021,M.IoTissuedtheWhitePaperonDistributionNetworkTechnologyof"OneTouchSmartLink"Appliancewhichredefinesthestandardof"link".Midea'shouseholdappliancesareequippedwiththe"AutomaticDiscovery"and"OneTouchSmartLink"functions,whichrealizesuserinsensitivedistributionnetworkandimprovesuserexperience.Atthesametime,Midea'sproductscanbeinterconnectedwithOPPOcellphonestoachievetheunderlyingcommunicationprotocols,increasingthesuccessrateofnetworkconnectionby35%.TheMSmartLife
Apphaslaunchedthenetworkconnectionfunction“householdappliancesfindfriends”,whichrefersthathouseholdappliancesconnectedwithanetworkcanmaterializeaone-keynetworkconnectionforhouseholdappliancesyettobeconnected,toavoidrepeatedoperationsandimprovetheexperienceofnetworkconnection.Furthermore,theinternationalversionoftheMSmartLifeAppalsosupportsone-keyauthorizationinAlexaanduserscancontrolsmartdevicesthroughtheAlexaaccountwithonekeyconnection.Mideahasreleasedtheindustry’sfirstwhole-scenehomeIoToperatingsystemdevelopedbasedonOpenHarmony2.0,whichcanprovidenewsolutionsforcross-brandandcross-categoryproductsintermsofinterconnection,autonomouscollaborationsbetweendevices,cloud-terminalintegration,AIinteractionempowermentandotherissues,reducetheconnectioncostofecosystemproducts,optimizecollaborativeinnovationbetweenindustrychains,andprovidedevelopersandpartnerswithamoreconvenientdevelopmentenvironmentandamorepowerfulapplicationecosystem.Mideahasparticipatedintheformulationoftheinternationalstandard—StandardforGeneralRequirementsofEvaluatingIntelligentPerformanceofHouseholdandSimilarElectricalAppliances—bytheInstituteofElectricalandElectronicsEngineers(“IEEE”),andproposedamoreinstructivegradingstandardforintelligenthouseholdappliancesL0-L4,whichprovidesagradingofthelevelofhouseholdapplianceintelligencewithuser-sideandproduct-sideandfuelsthestandardizeddevelopmentofthehouseholdapplianceintelligenceindustry.InOctober2021,Mideaalsoinnovativelyproposedtheconceptof“meta-home”whichcombinedphysicalspace,Internetspaceandvirtualspace.Basedonbasictechnologiessuchasperception,communication,AI,bigdataandvirtualreality,itcouldachievethedigitalhometwins,provideanewIoTapplicationaswellasinteractionexperienceandallowuserstoenjoymorein-depthintelligentservices.G.Inviewofconsumerstratification,launchedmultiplebrandsanddiversifiedproductportfolios,andenhancedthepromotionofthecorevaluesofthesebrandstoempowerretailsalesanduseroperationCOLMOserveshigh-enduserswithhigh-endsmartproducts.ItsoverallsalesreachedoverRMB4billionin2021,up300%yearonyear.Intermsofproducts,afterthreeyearsofdevelopment,COLMO'shigh-endsmartproductshavecoveredairconditioners,refrigerators,laundryappliances,kitchenappliances,waterheaters,microwave-steamer-ovencombosandothercategories,andformedthefour
productsuitesofBLANC,TURING,EVOLUTIONandAVANT,preliminarilyestablishingaleadinghigh-endsmartlifesolutionintheglobalhomeappliancemarket.In2021,COLMOlaunchedtheTURINGWhole-housesuite,theEVOInterstellarsuite,theAVANTMyTreasuresuiteandtheStarAtlassuitetosatisfythepursuitofhigh-endsmartscenesandpioneeringdesignsbyhigh-endusers,furtherenrichingandimprovingscenesolutions.Withavisionof"providingglobalhigh-enduserswithanall-inclusivehigh-endsmartlifesolution",COLMOstartedtheevolutionandupgradefromhigh-endsmartproductstohigh-endwhole-housesmartsystemsin2021,tooktheleadinproposinghigh-endintelligentcontrolservicescenteredon"VillaIntelligenceExpert",andinitiallysketchedahigher-end"intelligentcontrolofthewholehouse"era.TheCOLMOproductshavewon14internationalawardsincludingtheiFAward,theRedDotAward,theIDEAAwardandthePINUPAward,coveringairconditioners,refrigerators,washingmachines,kitchenappliancesandotherproducts.Intermsofthebrand,asthepromoterandleaderoftheCOLMOLifestyle,COLMOcontinuestocooperatewithIPsinthefieldsofculture,filmandarttoinspirehigh-endlifestyleswithbrandculture,andtopresentinsightsandthoughtonminimalistaestheticsandtheCOLMOLifestyleinamultidimensionalmanner.ThebrandhascooperatedwithMaQingyunandhisfatherMaBoqiantofilmthemicrodocumentaryLessisMore,launchedthesecondseasonofLifeEvolution,andworkedtogetherwithdirectorJiaZhangketocreateBehindChina:Meetingthe1%,constantlyleadingthehigh-endlifestylewith"rationalaesthetics".Intermsofthemarket,COLMOhasservedmorethan330,000high-net-worthcustomersaroundtheworld,ofwhichmorethan16,000havepurchased5ormoreitems.AccordingtothedatafromAVC,theproportionofCOLMOproductsinthehigh-endmarkethasincreasedsignificantlyin2021,withfloor-standingair-conditionersconstitutingabout36%ofthemarket,wall-mountedairconditionersandwaterpurificationproductsabove20%,andfront-loadingwashingmachinescloseto15%.Intermsofsaleschannels,COLMOhasbeenprovidingbetterwhole-housesmartexperiencesforhigh-endusers.In2021,COLMOfurtherexpandedthewhole-housechannelbysettingupmorethan300experiencehallsand40experiencepavilions.Atpresent,nearly7,000storesandoutletshavebeenarrangedinthedomesticmarket.In2021,WAHINcontinuedbreakingtheboundariesoftraditionalhomeappliancemodels.Thebrandinsistsoninnovation,embracingtheGenerationZwith“TrendyDesigns,PracticalFunctionsandFunInteractions”.Itcontinuedfocusingonexploringthepotentialofyoungusers.Centeredonproduct
innovation,WAHINdeepenedthebrandmarketingtowardstheyounggenerationandspreadthebrandindifferentculturalcircleswiththevirtualcharacter"WAHINGirl"beingthespokespersonandasloganof"It'syourturn,youngman!"Throughinnovativedesignswithamoreyouthfulvibe,combinedwithamoreintelligentuserexperience,thebrandhasmadefulleffortstopromotevariouscategoriessuchasairconditioners,washingmachines,refrigerators,kitchenappliancesandsmallhouseholdappliances.WAHINreportedrevenueofmorethanRMB5.5billion,anincreaseofover200%yearonyear.Duringthe"618"promotion,WAHINrankedamongthetoptenintheTmallhomeapplianceindustry,andrankedfifthinsalesonJD.com.WAHINupgradedthedigitalremotecontrollerandturnedanewpageofdigitalremotecontrolintheairconditioningindustry.Duringthe"618"promotion,"WAHINGirl"sameseriesofairconditionerswaslaunched,thebrandexposureexceeded120millionUV,andnearly200,000setsofthisseriesweresold.SalesofWAHINHASeriesWall-MountedAirConditionerexceeded50,000unitsinboththe"618"promotionandthe“Double11”sale.SalesoftheWAHIN35HE1productexceededRMB100millioninthe"618"promotion.Duringthe"Double11"sale,salesoftheWAHINairconditioningproductsrankedamongthetopfiveonTaobaoanditsrelatedplatforms.WAHINlaunchedanultra-thinwashingmachineduringthe"618"promotion,whichbecameahot-sellingitem.Thankstomarketingmodelssuchasexposurethroughlivestreamingamongyoungsters,theproductsold3,000unitsinthewholenetworkonthesamedayandRMB10millionforthewholemonth.Duringthe"Double11"sale,thesalesofWAHINwashingmachinesreachedoverRMB50million.ThebrandalsolaunchedtheDazzlingBluerefrigeratorcollection,whichenabledittounifythevisualdesignlanguage,achieverapidgrowthandimprovetheoverallsalesstructure.Duringthe"Double11"sale,thesalesoftheproductsreachedover4,700units,thankstonewmarketingmethodssuchascross-fieldinteractivelivestreamingandscene-basedcontentrecommendation.Duringthe"618"promotion,theshortvideoofWAHINrefrigeratorflagshipstoreenteredtheTop-5listofT-mallbrandshortvideos.WAHINKitchenAppliancelaunchedtheWAHIN-dimensionsmartappliancesuite,coveringkitchenandbathroomappliancessuchaselectricwaterheater,gaswaterheater,rangehoodstove,dishwasherandwaterpurifier.Withthefashionablecolormatchingoforangeandblueaswellasthenewexperienceofsmartinteraction,WAHINkitchenapplianceledthetrendofhouseholdappliancesbycateringtocustomerneedsfordiversifiedsceneexperience.Salesofvariouscategorieswereoutstandingduringthe"618"promotion.Inaddition,WAHINVie68-setDishwasherrankedfirstinthenetworksalesofSKU.WAHIN'sbuilt-inproductshavealsogivenastrikingperformancein2021,withsalesincreasingby100%yearonyear.In
2021,WAHINcontinuedexploringsaleschannelsforitssmalldomesticappliancesonplatformssuchasJD.com,TmallandDouyin,andpromotedthedevelopmentofproductssuchasthefoldableLittleSunwhichenablesartisticspaceusage,andthecirculationfansforbothtableandflooruse.H.Seizedmarketopportunitiesamiddomesticandinternationalcirculations,respondedtoChina’sgoalsregarding“carbonemissionpeak”and“carbonneutrality”,madetechnologicalbreakthroughsandinnovations,andkeptimprovingtheToBbusinesslandscapeIn2021,theElectromechanicalBusinessGrouphasbeentransformedintotheIndustrialTechnologyBusinessGroup.Withthevisionof"TechnologyDrivestheWholeWorld"andthepoweroftechnologicalinnovationtosupporttheglobalindustrialdevelopmentinthenewera,theIndustrialTechnologyBusinessGroupisdedicatedtobecomingtheworld'sleadingsolutionproviderinintelligenttransportation,industrialautomation,greenenergyandconsumerappliances.TheIndustrialTechnologyBusinessGroupwillsprintfortherevenuetargetofRMB100billionwithinfiveyears.IthasestablishedtheIndustrialTechnologyResearchInstituteandastrategicdevelopmentorganizationin2021.Itfocusesonbothindependentdevelopmentandacquisitions,andimprovesthetechnology,productandmarketstructuresinfourmajorareas.Acompleteindustrialchainhastakenshape,coveringinformation,control,drive,andexecution.Meanwhile,itcontinuestoincreaseinvestmentsinthedevelopmentofkeyandcutting-edgetechnologies.During2021,itinvestedoverRMB1billioninR&Dandintroduced400moreR&Dpersonnel,inadditiontogreatereffortmadeintheintroductionofseniorexpertsintheindustry.TheIndustrialTechnologyBusinessGroupmadeconstanteffortsforconsumerappliancesandconsolidateditsleadingpositionintheindustry.AccordingtodataproviderChinaIOL,in2021,theunitsalesofresidentialairconditionercompressorssurpassed100millionunits,up20%year-on-yearandaccountedfor42%oftheglobalsales,representingthelargestmarketshareacrosstheworld.Theunitsalesofrefrigeratorcompressorincreasedby13%andrepresented13%oftheglobalsales,thusrankingattheforefrontoftheindustry.Theunitsalesofmotorforresidentialairconditionerandwashingmachineaccountedfor40%and20%oftheglobalfiguresrespectively.Thedomesticmarketshareofin-carairconditionercompressorhasdoubledto25%.Mideacontinueswithdigitalandintelligenttransformationtodealwithworkforcechallengesinthefutureandkeepsexpandingandimprovingitscapacities.TheFoshanXingtanBasewasnewlyestablishedtomakeaforward-lookinglayoutin
intelligentmanufacturingofmechanicalandelectricalproducts.Mideahascomprehensivelyautomated,digitalizedandintellectualizedtheproductionlayout,processdesignandproductionmanagement,seekingtobuildanIndustry4.0intelligentmanufacturingdemonstrationbaseinChinaandaworld-class“LighthouseNetwork”factory.HitachiCompressor(Thailand)Ltd.(HCTL)wasacquiredandtheintegrationworkwassteadilyimproved.Ithassignificantlyincreasedtheproductioncapacityofrefrigeratorcompressorandimprovedtheglobalsupplyofcorecomponents.Intermsofproducttechnologyinnovation,thethreeR&Dprojectsof"ResearchandIndustrializationofKeyTechnologyforNewHigh-efficiencyInverterCompressors","ResearchandApplicationofPressureDifferenceStartTechnologyforRotaryCompressors"and"ResearchandIndustrializationofKeyTechnologyforNewGenerationVariableFrequencyMotorSystemforHouseholdAppliances"oftheIndustrialTechnologyBusinessGrouppassedscienceandtechnologyappraisalheldbyChinaNationalLightIndustryCouncilandwasrecognizedas“InternationallyAdvanced”.TheIndustrialTechnologyBusinessGroupputsmoreresourcestocorecomponentsofnewenergyvehicles,anddevelopscorecomponentsoftwo-wheeledelectricvehicles.InMay2021,thethreemajorproductlinesofdrivesystem,thermalmanagementsystemandauxiliary/automaticdrivingsystemwereputintooperation,andthefiveautoparts,i.e.drivemotor,electricwaterpump,electricoilpump,electriccompressorandEPSmotor,wereofficiallyreleased.IthasalsodevelopedthegroundbreakingrotorelectriccompressorinnovativelyadoptingnaturalrefrigerantCO
whichhasthefeaturesofhighefficiency,lownoise,andlightweight,andachievedthehigh-efficiencyrefrigerationandlow-temperatureheating,increasingtheservicelifeofheatpumpsby20%comparedwithtraditionalones.Theseproductshaveraisedextensiveattentionandarerecognizedbythemarket.TheBusinessGrouphasdefinedthedevelopmentpathof"industrymarketing&technologysales®ions"inthefieldofindustrialautomation,proactivelypromotedthetransformationofitsmarketingmodel,andreleasedaseriesofnewproductsandapplications.Amongthem,thelineardriveCDLBcompactlinearmodulehasachievedalocalizationrateofmorethan50%oftheparts,andledtheracebetweenpeersinperformancewiththepositioningaccuracyfrom10μmto2μmandthesteadyaccelerationfrom0.3gto1g.TheBDHDErotatingservosystemhasrealizedthepre-entryfunctionofelectronicnameplateparameterandECfunctionwhichsimplifytheoperationandmanagementoftheproductforcustomers.TheR-seriesservomotorhasadvantagesof8000rpmrotatespeedandshortmotorlength,whichhasawiderangeoftechnicalapplications.TheBusinessGrouphasalsointroducedtheCodesysControllerProgrammingPlatform,whichistheworld'sleadingIDE
platformapplyingopenprogramminglanguageinPLCopenstandardandcanseamlesslyswitchbetweencontrollersofnotablebrands.Inaddition,SERVOTRONIXhasbeenawardedthetitleof"CDDIAAnnualInfluentialLinearDriverBrand"byChinaDirectDriveIndustrialAlliance(CDDIA)forthreeconsecutiveyears.Inthefieldofnewenergy,theIndustrialTechnologyBusinessGroupprovidescustomerswithlow-carbon,digital,customizedone-stopenergysolutionsbasedonitsindustry-leadinghigh-voltagevariablefrequencydriveproductsinintelligentmicro-grid,energystorage,andSVG,whichcanbeappliedtocentralizedscenariossuchaspowerplants,aswellasdistributedscenariossuchasfactories,schoolsandhospitals.Meanwhile,inspiredbytheconceptofgreenandsustainabledevelopment,itactivelyimplementsthenationaldual-carbonstrategy,andlaysoutproductsandbusinessesrelatedtonewenergystorageinthefieldofpowergeneration,grid,loadandstoragebyvirtueofnearly20yearsofpowerandelectronicstechnologyaswellasthecontinuoustalentintroduction.Additionally,inthefieldofconsumerappliances,theBusinessGroupputsmoreresourcesinproductlinesofMCU,IoT,powersupplyandpowerchip.In2021,itproducedmorethan10millionchips,andgraduallyexpandeditschipsbusinessintotheindustrialcontrolandautomobileindustry.Asaleadingmanufacturerofcorecomponents,theIndustrialTechnologyBusinessGrouphaswonmanyindustryawards.Forexample,therelevantpatentedproducttechnologieswonsixExcellenceAwardsatthe22ndChinaPatentAwards.Theprojectof"NewSlidingVaneHighEfficiencyCompressorTechnologyResearch,PerformanceEvaluationandApplication"wonthe“2020ChinaNationalLightIndustryCouncilTechnologyProgressAward(FirstPrize)”."Ultra-efficientVariableFrequencyRotaryCompressors"and"NewGenerationofBLDCMotoranditsSmartControllerforFront-loadingWashingMachines"werebothawardedthe2021AWECoreChipAward."NewGenerationofBLDCMotorforUltra-efficientAirConditioners"and"RotaryCompressorswithPressureDifferenceStartTechnology"wontheGoldSpikeAwardofChinaHouseholdElectricalApplianceIndustryChainConference."RotaryCompressorswithPressureDifferenceStartTechnology","40High-efficientandWide-rangeVariableFrequencyScrollCompressor"and"BLDCMotorforUltra-efficientCommercialAirConditioners"respectivelywontheInnovativeProductAwardsof2021ChinaRefrigerationExpo.And“R410AJetInverterHeatPumpCompressors”wasawardedtheInnovativeProductAwardof2021ChinaHeatPumpExhibition.Inaddition,"8HPVariableFrequencyEnhancedVaporInjection(EVI)RotaryCompressors"wonHAPE2021InnovationAward.Besides,theproject"ResearchandIndustrialization
ofKeyTechnologiesofNew-structureCompressorforLow-temperatureSuper-heating"wonthefirstprizeofScienceandTechnologyProgressAwardofGuangdongLightIndustryCouncil;thefiveproductsinseriesofairconditionercompressors,refrigeratorcompressorsandairconditionermotorsobtainedthe"Low-carbonEnergy"certificateatthe2021DevelopmentConferenceofEco-friendlyLowCarbonTechnology;thehomeappliancepartsbrandGMCCwasgrantedthetitleof"LeaderBrandof2021-2022AirConditionerCompressorIndustry"attheChinaAirConditionerIndustrySymposium;GMCCandWellingalsowonthe"GoldenWisdomAward"andthe"TopTenSupplyChainProduct"atthe2021DevelopmentSummitofChinaHVACIndustryforthefirsttime.In2021,MideaHVAC&BuildingTechnologieshasbeenreformedintoMideaBuildingTechnologies.Aftertheupgrade,MideaBuildingTechnologieshasbeendedicatedtotheconstructionofadigitalplatform,andsupportingplentiful,changeablescenegroupsaswellasflexible,personalizeddigitalexperienceby"buildingfacilities+digitaltechnology+industrialecosystem",bywhichitwillfacilitatethelogistics,information,feelingandenergyflowstoprovideanoverallbuildingsolutionofSMARTINONE.Intermsofmarketperformance,MideaCommercialAirConditionerhascontinuedtorankfirstwithrespecttodomesticmarketshareaccordingtothedatamonitoredbyIndustryOnlineandtheElectromechanicalInformationofCommercialAirConditionerMarketin2021.Intermsofmarketing,MideaBuildingTechnologiesprovidesindustry-specificintegratedsolutionstocustomersinvariousfields.Forexample,atthefirstChinaArchitecturalScienceConferenceandGreenSmartBuildingExpo,itpresentedcomprehensivesolutionsforbuildingsintypicalscenessuchassmartrailtransit,smarthospital,businesscomplex,datacenterandsmartplant;atthe22ndNationalHospitalConstructionCongressandChinaInternationalHospitalConstruction,EquipmentandManagementExhibition,itpresentedthe"SolutionofMideaSmartHospitalLIFEFlow".Atthe61stNationalPharmaceuticalMachineryExpo(Fall2021)andChinaInternationalPharmaceuticalMachineryExpo(Fall2021),itreleasedthecomprehensivesolutionsforthepharmaceuticalindustry.Intermsofproductbreakthroughs,MeiKong,whichisunderMideaBuildingTechnologies,hasreleasedthenewbrand"KONG",BuildingaBrand-newLIFE:ChinaBuildingAutomationWhitePaper,thestrategyofKONGC3SI,andothercoreproductsinShanghaiduring2021,whichinjectedburgeoningpowerintoChina'sbuildingautomationindustry.Inthesameyear,MideaBuildingTechnologiesproducedthousandsofcentrifugeswithatotalcoolingcapacityofmorethan1.2milliontons,markingthecoretechnologicalcapabilitiesofMideaand
thatdomesticcentrifugeshavebrokenthroughtheforeigntechnicalbarriers."AirC+DuctTypeAirConditionerIndoorUnits","SinanSeriesMagneticVariableFrequencyCentrifugalChillers"and"ThreePipeHeatRecoveryMulti-splitSystem"wontheInnovativeProductAwardat2021ChinaRefrigerationExpo.Intheyear,MideaBuildingTechnologiesalsoreleasedthedigitalelevatorstrategy-startingthedigitalandintelligenteraofelevatorsinallaspectsbydigitaloperation,independentelectroniccontrolplatform,electronicsecurityandintelligenttechnology.Meanwhile,ithaslaunchedthenewelevatorbrandLINVOLwiththepositioningofthe"expertinfulllifecyclemanagementofelevators".InrelianceupontheadvancedindustrialsystemofMideaGroup,Winoneindependentlydesignedandbuiltthe32-meterheavy-dutyescalatorstesttowerforpublictransport.Theprojectnowhasbeenputintouse.Theescalatorinthisprojecthasamaximumheightof25mandaninclinationangleof30degrees.Ithasaproven,safeandreliabletechnologyandfullycomplieswithChineserailtransportationstandards,withnumeroustechnicalparametershigherthanEuropeanstandard.Asaheavy-dutyescalator,itcanperfectlyhandleextremelydensepassengertraffic.Intermsoftechnologicalinnovation,MideaBuildingTechnologiessetupMideaBuildingTechnologiesResearchInstitutein2021toachievethefullycombinationofhumanandarchitecturewithdigitaltechnologyandtobuildthoughtfulsmartbuildings.Also,ithasjointlyestablishedtheResearchCenterofBuildingCarbonNeutralityTechnologywithShanghaiJiaoTongUniversity.Manyawardswerewonfortherelevanttechnologicalachievements.Forexample,Midea'sprojectof"ResearchandIndustrializedApplicationofHigh-efficientandEnergy-savingKeyTechnologyforWide-temperature-rangeHeatRecoveryMulti-splitSystems"(jointlyappliedwithSJTU)wonthesecondprizeofScienceandTechnologyAwardofthe10thChinaRefrigerationSociety,thefirstprizeofScienceandTechnologyAwardofGuangdongMechanicalEngineeringSociety,andthefirstprizeofScienceandTechnologyAwardGuangdongMachineryIndustryAssociation.Theproject"TechnologyandIndustrializationofUltra-low-temperatureHigh-efficientEnergy-savingAirSourceHeatPump"(jointlydevelopedwithSJTU)wontheIndustry-University-ResearchCooperationInnovationAchievementAwardofChinaIndustry-University-ResearchCollaborationAssociation.Theindependentlydevelopedproject"HeatRecoveryMultiple-unitandIntelligentControlSystem"wontheSilverAwardatthe72ndNurembergInternationalInventionExhibitioninGermany.Atthe2021ChinaHVACIndustryDevelopmentSummit,MideaBuildingTechnologieswonthe"GoldenWisdomAwardforCooling&HeatingIntelligentManufacturing"inthefifthconsecutiveyear,andtheself-developed"Sinan-seriesMaglevCentrifuge"wonthe"TopTenProductAward".Additionally,therelevantpatented
producttechnologieswonsixExcellenceAwardsatthe22ndChinaPatentAwards.GDMideaHeating&VentilatingEquipmentCo.,Ltd.andWINONEElevatorCompanyLimitedwererecognizedasGuangdongIndustrialDesignCenter.ThesehonorsandawardsattesttoMidea'stechnologicalR&Dstrengthinbuildingtechnologies.Intermsofproductservices,MideaBuildingTechnologieshasalsobeencommittedtoimprovingthestandardstowardtheofferingsofproductsandservices.ThefirstVRF,MDVS,multi-splitreliabilityimprovementstandardproposedbyMideawasfullyaffirmedbyexperts.Mideaiscommittedtoprovidingcustomerswithoverallsolutions.Forinstance,inthe"miracleofhumanengineering"Sichuan-TibetRailwayproject,MideabuiltanoverallsolutioncoveringHVAC,elevatorandautomaticcontrolsystemforLalinsectionwhichprovidesefficient,reliableandintelligenttechnologyandequipmentguaranteefortheconstructionofimportantnationaltransportationhubs.MideaBuildingTechnologiesprovidedanoverallsolutionof"oldmachinereplacement&loadpartition&multi-typeequipmentmatching"forthenationalstadium"Bird'sNest"asthemainvenueoftheopeningandclosingceremonyinBeijingWinterOlympicsandWinterParalympicstocreateanintelligentandlow-carbonstadium.AttheDubaiWorldExpo,itprovidedindoorairintegratedsolutionsforhigh-qualitytemperatureandairexperiencetoItaly,Poland,Germany,PakistanandCzechpavilions.Inthe14thNationalGames,itmadeoverallsolutionstocreateaneco-friendlyandintelligentenvironmentfor11venuesandsupportingbuildings,coveringadvancedequipmentsuchascentrifuges,screwmachines,andmulti-splitair-conditioners,whichfullypresentedthetechnologicalcapacityasanindustryleader.IntheprojectofSuzhouMetroLine6,itprovidedaperfectsolutionof"efficientcomputerroom&intelligentterminal&intelligentcontrolsystem"for31stationsoftheline,helpingSuzhouMetroachieveenergyconservationandefficiencyimprovement.Withitsleadingproducttechnologyandperfectsolutions,MideaBuildingTechnologiesishighlyrecognizedbypartnersinvariousfields.Forexample,16ofitsprojectshavewonthe2020-2021ChinaConstructionEngineeringLubanPrize（NationalPrime-qualityProject）.Ithasalsowonthe"2021InnovativeSolutionAwardofChinaIDCIndustry"attheChinaIDCIndustryAnnualCeremony,andthetitleof"TopTenConstructionEquipmentSuppliersofChinaHospitalConstruction"atthe9thChinaHospitalConstructionAwardCeremony.Inaddition,MeiKonghaswonthe"2021TopTenBuildingAutomationBrandAward"atthe2021IntelligentBuildingBrandAwardsCeremony.Inaddition,MideaBuildingTechnologieswontheLong-termCooperationAwardfor10YearsofVankeGroup,the
InnovativeProductAwardandtheIndustryInfluentialBrandAwardat2021ChinaHeatPumpCogenerationSummit.I.Promotedinnovationinroboticproductdevelopment,acceleratedintegrationandexpansionoftheroboticsbusinessfortheChinamarketKUKA,asubsidiaryofMidea,isthefirstroboticmanufacturerintheworldtointroducesensitivelightweightrobotsintotheproductionplant,aswellasthefirstmanufacturerwithaproductrangecoveringcollaborativerobots,mobilerobotsandindustrialheavy-dutyrobots.In2021,KUKAlaunchedaseriesofnewproducts.Intermsofdigitalization,KUKApresenteditsnewoperatingsystemiiQKA.OSatHannoverFair.Withthissystem,robotusewillbegreatlysimplifiedandbeaseasyascellphoneuse.TheiiQKA.OSsystemisintendedtoserveasthebasisforanentireecosystemwhichprovidesaccesstorobotaccessories,programsandapps,etc.Attheendof2021,takingadvantagesofIndustrialInternetofThings(IIoT),thenewKUKAiiQoTplatformcancollectandprovidethedataofworkingconditionofdifferentrobotsinrealtime,coveringaspectssuchashardware,softwareandcontroller.SinceitwasregardedasCloudSolutions,theremotemonitoringofrobotsystemhasbecomemoreeffective,andtheconditiondatacanbevisitedbyusersanytimeanywhere.Forthefoodandmedicalindustry,KUKAreleasedthe"KRDELTArobot"--thefirstdeltarobotics--withaparallelkinematics.Thenewrobotobtainsexcellentperformanceatamuchlowercost.Itsarmscanreachupto1,200mmandtherobothasapayloadcapacityof6kg.AsthelatestproductinKUKAlightweightrobotportfolio,thisrobotismadeentirelyofstainlesssteelandcanperformpick-and-placeapplicationstowardsfoodandmedicine.Inrespectofdigitalsimulation,KUKAmadepublicanewversionofsmartsimulationsoftwareKUKA.Sim
4.0.Thesoftwareisfeaturedbyanewlevelofsimplicity,planningreliabilityandcostefficiency.Itnotonlystreamlinestheworkflowandsavestimeforcustomers,butalsodemonstratesitsfunctionsinmultiplescenes.Withregardtomedicalcare,aMunichtherapycenterusesamedicalproductwithanintegratedKUKArobot,thatis,TheCyberKnifesystemofAccuray,asahigh-precisioninstrumentintumortreatment.ThisproductisanalternativetoconventionalradiotherapyandabreakthroughofKUKArobotinthemedicalfield.Ingeneralindustryarea,thespeedofKUKAKMP600-SdiffDrivecanreachtwometerspersecond.Itnotonlypossessescapacitiesoflaserscanningand3Dobjectrecognitionbutpossessesaloadcapacityofupto600kg,whichalsoopensupnewwaysandincreasesflexibilityfor
internalproduction'sgoodsflowwhileprovidingsupportforproduction.Inspiteofweldinglargeworkpieces,thebrandnewKUKAFrictionStirWeldingCellknownascell4_FSWcanprocurehigherweldstrength.Asitdoesnotcauseweldingdeformationeasily,itisveryflexibleatthesametime,historicallysolvingthepainpointoftheindustry.QualityTestEquipmentdevelopedbyGermanyBerghof,consistingofaKUKAKRCYBERTECHrobotanda3Dscanner,wonthe"2021GermanyInnovationAward",whichisusedforcheckingthecomponentsandpartsattheendoftheassemblylines.Comparedtothecongenericqualityandsafetytestequipmentforthecomponentsandpartsofautomobiles,theequipmenthasedgesincostandflexibility.Inconstructionarea,KUKAKRQUANTECMachinewillassistBelgiumBESIXGroupinreformingthetraditionalconstructionmethods,printingconcretecolumns,sculpturesandfacadeelementsby3DwiththehelpofKUKArobottohaveaquickandenvironmentaleffect."KUKANOX"ConstructionRobot,winning2021RedDotDesignConceptAward,issimilartoamobile2Dprinter,whichcanenhancetheefficiencyofconstructionbyprintingidentificationinformationbasedonthedigitalmodelingofarchitecturaldesign,andachievethatcustomersandarchitectscanchecktheconstructionsiteanytimeanywhereinavirtualscenebyapplyingthedigitaltwinningtechnologyinconstructionsite.Asfornewbusinesses,KUKA'sSwisslogcreatesautomationsystemsthatbringscalability,flexibilityandlowercoststoverticalfarming,allowingthemtobeinstalledandmaintainedinawiderangeofpre-existingandpurpose-builtspaces.Thesesystemshelpbroadentheapplicabilityofgrowingcropsandbringfoodproductionclosertourbanconsumers.During2021,intheautomotivefield,KUKAenteredintoanewcooperationframeworkagreementwiththeDaimlerGrouptoextendthelong-termpartnership.Theorderscoverrobots,productionlines,KUKArobotcontrollersandotherproducts,suchasKRFORTECheavy-dutyrobotsandthenewKRQUANTECgeneration.KUKAalsoreceivedordersfromanotherglobalautomobilemanufacturer,withatotaloftensofmillionsofeuros.Inthefuture,KUKAwilljointhebodycomponentsofapremiumSUVusingapatentedprocessofpiercerivetingtechnology.Byearly2022,KUKAhassuppliedBMW'sDingolfinfactorywithKRC5IntelligentRobotControllersofapproximately250unitsforapplyingtomanufacturingcardoorsandvalves,andthepowerconsumptioncanbereducedbyupto15%comparedwiththepreviousgenerationcontroller.InSeptember2021,KUKAreceivedanorderfromMAGNAwhoisthesupplierofG-classMercedescarsandwillbuildafullyautomaticladderproduction
lineforelectriccarmodelsinAustria,wheretheheavy-loadsix-axisrobotKR1000Titanwillbeusedontheproductionlinesystem,andwillintegrateKUKA'sinnovativeweldingtechnologythatcanmeettheneedsofelectricvehicleproduction.KUKAalsoprocuredassemblylinesofbodybaseforAudi'smidsizeandluxurycars,andtheorderamountstoseveralmillioneuros,whereapproximately200KUKArobotswillbeusedontheline,coveringmanufacturingstagessuchasspotweldingandbonding.Atthebeginningof2022,KUKAevenprocuredaprojectorderfromFordOtosanwhoisthebiggestcommercialvehiclesuppliersofFordMotorinEurope,forwhichover700robotswillbeprovidedtoproduceFordnext-generationelectricautomobiles.Inthegeneralindustrialfield,theneworderKUKAreceivedfromBACASysteminvolved100KR210QUANTECrobots.Forsevenconsecutiveyears,KUKAhasbeensupportingBACASystemwithinnovativerobotsolutionsinthestonecuttingindustryandatotalnumberofover450KUKArobots.Intermsoflogisticsautomation,inMay2021,SwisslogannouncedthattheZKWGroup,thespecialistforinnovative,premiumlightingsystemsandelectronics,willuseSwisslogautomationtohelpincreasemanufacturing.WithcenterpieceoftheinstallationbeingTornadominiloadcranes,SwisslogisexpectedtoprovideautomationsystemswhichcoverQuickMoveconveyorsystemsandSynQmanagementsoftware.Throughoutthepandemic,Swissloghascontinuedtosupportbusinesseswithprojectrealizationforcriticalsupplychains.Itwon21AutoStoreorderswithatotalvalueofoverEUR60millioninthefirsthalfoftheyear.TheseorderscamefromcustomersindifferentindustriesincludingNorwegianlogisticsproviderBring,ItalianimporterAndreasSTIHLSpA,andGermantoyretailerROFU.InDecember2021,SwisslogprocuredaprojectorderofmillionsofeurosfromEuropeanseafoode-commerceRohlikwhodevelopsrapidly,andwillprovideautomaticlogisticssolutionsinPragueandViennainEuropethatwillinvolvemultiplesolutionsandsoftwaresystemssuchasCycloneCarrierShuttlesolution,QuickMoveconveyorsystem,andSynQSoftware.Modernhigh-rackstoragetechnologyandwarehousemanagementsoftwaresystemwillbeprovidedtoSwissFederalRailway(SFR)bySwisslog.Incateringarea,Ratio,acateringcompanylocatedinSingaporeorders20robotsfromKUKAagainformixingwinesandmakingcoffee,inordertoexpandthebusiness.Besides,inJune2021,KUKAwonthe2020StellantisFirstSupplierAwardsforitstimely,efficientandhigh-qualityproductsandservicesprovided.StellantiswasformedinJanuarybythemergerofFiatChryslerAutomobiles(FCA)andPeugeotCitroenGroup(PSA).KUKAfurtheracceleratedintegrationandexpansionoftheroboticsbusinessinChina,promoted
transformationofthedomesticmarketing,andcenteredonapplicationsandkeycustomers.In2021,KUKAChinahaslaunched24newproductsandapplications,furtherenrichingthedomesticproductoffering.Itprovidescustomerswithvalue-addedservicesthroughdigitalapplications,includingsixproductssuchasKMP600-SdiffDriveMobileRobot,KR6R600Z200CSRobot,RailLogisticsTransportSystemofETVTransGuardSystemandArcweldingsix-axisrobotofKR6R1440-2ArcHWE,and12digitalapplicationssuchasSmartGatewayExternalBetaofKUKA.SmartGatewayMV,KUKAConnectEasyPro1.0,KUKACenterSparePartsServiceSystemandKUKADigitalDashboard.KUKAChinaregardedMobileRobotasanindependentbusinesstooperate,establishedprofessionaltechnicalteamsonnoumenon,navigationandmotioncontrolofMobileRobot,andissuedthenewproduct--KMP600IAutomaticMobileRobotthatsuccessfullyparticipatedinthe2021AsiaInternationalLogisticsTechnologyandTransportationSystemExhibition(CeMATASIA).Inordertoimprovecustomerserviceefficiency,expandservicecontentandenhancecustomerstickiness,KUKACentersystemwasupgradedanddevelopedbyKUKAChina,whocomprehensivelyutilizedallinnovativetechnologiesofmobileinternetandinformationtoestablishaone-stopserviceplatformforcustomersthatcrossesdifferentterminalssuchasmobilephone,PCandphoneandpullsthroughallbusinessflowswithinindustrialservices.Inordertoensureandacceleratetheimplementationofresearchanddevelopmentprojects,KUKAChinaestablishedthefirstdigitallaboratoryofMideaGroup,whichisalsothelargestlaboratoryinChina'srobotindustry,coveringanareaofmorethan10,000squaremeters,whileitcanachieveexperimentssuchasdrivesystemvalidation,motorvalidation,reducervalidation,controllerdevelopment,developmentandvalidationoftheoperatingsystemplatform,MADA,robotsystem,developmentandvalidationofthelogisticsvehicle,applicationsoftwaredevelopmentanddevelopmentandvalidationofthedigitalcloudplatform,fullycoveringallvalidationdemandsincludingcorecomponentsandparts,noumenonofrobotandsystemapplicationlayer.What'smore,KUKAChinawasrecognizedas"GuangdongToBTechnologyResearchCenter"and"GuangdongIntellectualPropertyDemonstrationEnterprise".ThecustomerstructureofKUKAChinakeptimprovingin2021,andsalesinotherindustriesaccountedforahigherproportionofitstotalsalesthansalesinthetraditionalautoindustry.Inparticular,thesalesinindustriessuchaselectricvehicles,engineeringmachinery,newenergyandconsumerelectronicsincreasedsignificantlyasapercentageofthetotalsales,andthesalestonewcustomersaccountedfor
morethan10%.Inautomobilearea,domesticautomobilecustomersincreasedbymorethan100%yearonyear.KUKAChinaprocuredthefirstbusinessinthetruckindustry,withanorderofmorethanRMB100millionintotal,involvingKUKA'smanyproductsincludingautomatictransportationsystemandmodularmanufacturingunit.Inelectricvehiclearea,duetotherapidincreaseinsalesofnewenergyautomobiles,whichdrovetheexpansionofthecomponentsandpartsoftheupstreamautomobiles,KUKAstrovetoexpandcustomersofthisareasuchasGestamp,Magna,ChangchunEngley,KunshanXinjieandWuxiWanhua,andsucceeded;italsowontheorderofArcWeldingRobotfromthemanufacturerofnewenergytransportationvehicles--JiangsuJinpengGroup,successfullybreakingthroughthecompetitionpatternofthearea.Innewenergyarea,thelithium-ionbusinesssurgedbyover350%yearonyear,andthelithium-ionandphotovoltaicindustriesachievedthesalesperformancewithover1,000unitsinasingleindustry,becomingtheleaderofthesetwoindustries.Inconsumerelectronicarea,agrowthof300%yearonyearwasachievedandanimportantbreakthroughwasmadeinApple'smajorcontractmanufacturers,whichwashighlyrecognizedbycustomers.Ingeneralindustrialarea,thesalesofPalletizingRobotbrokethroughathousandunits,whichwasnearlyathree-timeincreaseyearonyear,andbrokethroughamongtheheadcustomersoftheindustriesincludingthedairyindustry,furnitureandchemicalindustry;additionally,itprocuredordersfromcustomersinglassindustryandwillsupplyhundredsofrobots.InToBmachineryarea,thankstothe"OneBelt,OneRoad"developmentstrategy,KUKAhassuccessivelyobtainedmultipleordersofcentralizedprocurementprojectsfromZoomlion,ShandongShantuiandSany.Inlogisticsarea,SwisslogsuccessfullywonFILA'sall-channelcentralwarehouseproject,withordersoftensofmillionseurosintotal.Asabenchmarkofautomaticthree-dimensionalwarehousesinChina'sshoeandclothingindustry,theprojecthasatotalfloorareaof171,000squaremeters,wheretheautomaticlogisticsequipmentsuchaslight-loadstackers,multi-storeyshuttlesandrobotswillbeapplied,andtheleadingtechnology-radiofrequencyidentification(RFID)willbeintegratedtoachievetheintegrationofmultipleoperatingmethodssuchasB2BandB2C.Itcannotonlymeetcustomers'variousonlineandofflinebusinessprocessesandcoveralldirectstoresinChina,butalsoincreasetheefficiencyby200%uponcompletion.Inaddition,KUKAhasbeenplayinganactivepartinraisingMideaGroup’sintelligentmanufacturinglevel.Byearly2022,therobotdensityofMideaisover370unitsper10,000persons.Andthisnumberisexpectedtoreach700byinthenexttwoyearswithgreaterinvestmentsinthisrespect.
J.Deepenedthelong-termincentiveandprotectedtheinterestsofshareholdersIn2021,MideacontinuedtoencouragethecoremanagementtotakeresponsibilityfortheCompany’slong-termdevelopmentandgrowthbyfurtherenhancingitslong-termincentiveschemes.Mideahaslaunchedeightstockoptionincentiveschemes,fiverestrictedshareincentiveschemes,sevenglobalpartnerstockownershipschemesandfourbusinesspartnerstockownershipschemes,whichhavehelped,inamoreeffectivemanner,toalignthelong-terminterestsofseniormanagementandcorebusinessbackboneswiththatofallshareholders.MideaGroupprotectsitsshareholders’interestsbyensuringaconsistentdividendpolicy.Itsharesitsgrowthwithshareholdersbyputtingforwardcashdividendplans(includingthatof2021)withatotalamountofmorethanRMB69billionsinceGrouplistingin2013.Inadditiontotheconsistentdividendpayouts,theCompanyhascarriedoutastringofsharerepurchaseplans.SubsequenttoasharerepurchaseofRMB4billionin2018,tofurtherstabilizethemarketcapitalizationandprotecttheshareholders’interests,theCompanyhaslaunchedsharerepurchaseplansforfourconsecutiveyearssince2019.Andtherepurchasedshareswouldbeusedforequityincentiveschemesandemployeestockownershipschemes.Fortheyearended31December2021,MideahasusedapproximatelyRMB13.6billionforsharerepurchases.
3.CoreCompetitivenessAnalysis
A.Asoneoftheleadersamongtheglobalhouseholdappliancemakersandadominatorinthemajorappliancesectors,MideaGroupprovideshigh-quality,one-stophomesolutionsthroughitswideproductrange.AsawhitegoodsandHVACenterprisewithawholeindustrialchainandfullproductline,MideaGrouphasdevelopedacompleteindustrialchaincombiningR&D,manufacturingandsalesofcorecomponentsandfinishedproducts,supportedbyanindustry-leadingR&Dcenterandmanufacturingtechnologiesofcorecomponents(suchascompressors,electricalcontrols,magnetronsandcontrollers),andultimatelybasedonitspowerfulcapabilitiesinlogisticsandservices.MideaownstopbrandsofhouseholdapplianceandHVACinChina.ItsdominanceinthemajorapplianceandHVACmarketsmeansthatitcanprovideawiderangeofcompetitiveproductsets.Italsomeansinternalsynergiesin
brandawareness,pricenegotiationasawhole,customerneedsresearchandR&Dinvestments.Compatibility,coordinationandinteractionamonghouseholdapplianceshavebecomeincreasinglyimportantsincesmarthomeisgainingpopularity.Withafullproductline,Mideahashadaheadstartinprovidingacombinedandcompatiblesmarthomeplatformwithintegratedhomesolutionsforcustomers.B.GlobalR&Dresourceintegrationcapabilities,adherencetothestrategyof“TechnologyLeadership”,aglobalinnovationecosystemandascientistsystem,aswellascontinuingleadinR&DandtechnicalinnovationTheGroupisfocusedonbuildingacompetitive,multi-layeredglobalR&Dsystem.Ithasestablishedathree-tiertechnicalcommitteesystemandafour-tierR&Dsystemresponsiblefortheformulationandimplementationoftechnologystrategies,withanaimtobuildworld-leadingR&Dcapabilities.Theinterconnectedtechnologystrategiesandmid-andlong-termproductplanningserveastwodriversofgrowth.Mideacurrentlyfocuseson11technologiesinabidtomakebreakthroughswithkeytechnologiesandachievetechnologyleadership.IthasinvestedoverRMB45billioninR&Doverthepastfiveyears,withtheinvestmentofRMB12billionin2021.Inordertodeepenitsglobaltechnologyecosystem,theGrouphassetupatotalof35researchcentersin12countriestograduallybuildupa“2+4+N”globalR&Dnetworkandgaintheadvantageofscaleinthisrespect.Domestically,MideaGlobalInnovationCenterinShundeDistrict,FoshanCityandMideaGlobalInnovationCenterinShanghaiarethecoresofMidea’sR&Darm.Overseas,withMideaAmericaResearchCenter,MideaGermanyResearchCenter,MideaJapanResearchCenterandMideaItalyResearchCenterasthecores,Mideamakesuseoftheregionaltechnologicaladvantages,integratesglobalR&Dresources,andbuildsthesefacilitiesintocomplementaryregionalR&Dcenters.Followingthestrategyof“TechnologyLeadership”,itattractsmoreprofessionaltalentandbuildsanorganicglobalR&Dnetwork.Ithasover18,000R&Dpersonnelandover500foreignseniorexperts.Whileestablishingitsownresearchcentersaroundtheworld,Mideaalsoworksonconstructinganopenplatformofinnovativeecosystemsthroughintegrationofsuperiorresources.Ononehand,aglobalinnovationecosystemhasbeenputinplacetointegrateresourcesoflargecompanies,SMEs,universities,researchinstitutesandconsultingagencies.ThisR&Decosystemhasaccesstoenormousresources.Ontheotherhand,ascientistsystemhasbeen
establishedwitheightacademicianworkstations/workshopsand19academicianswithstrategiccooperationonmorethan100R&Dprojects.TheGroupcooperateswithdomesticandforeignscientificresearchinstitutions,suchasMassachusettsInstituteofTechnology,UniversityofCalifornia,Berkeley,UniversityofIllinoisatUrbana-Champaign,StanfordUniversity,PurdueUniversity,UniversityofMaryland,TheUniversityofSheffield,PolytechnicUniversityofMilan,TsinghuaUniversity,ShanghaiJiaoTongUniversity,ZhejiangUniversity,theChineseAcademyofSciences,HarbinInstituteofTechnology,Xi’anJiaotongUniversity,HuazhongUniversityofScienceandTechnologyandSouthChinaUniversityofTechnology,inordertoestablishjointlabsfordeepeningtechnologicalcooperation.TheGroupalsocarriesoutstrategiccooperationwithtechgiantssuchasBASFandHoneywelltobuildaglobalinnovationecosystem.TheGroup’slong-termfocusonbuildingtechnology,marketing,design,productandopeninnovationsystems,buildingacutting-edgeresearchsystemandbuildingreservesintechnologyformid/longterm,hasprovidedasolidfoundationfortheGrouptomaintainlong-termtechnicalsuperiorityacrosstheglobe.C.StrongerGlobalImpactfueledbyMidea’scontinualglobalresourceallocationandinvestments,globally-advancedmanufacturingcapabilitiesandadvantageofscaleThesuccessofaseriesofglobalacquisitionsandnewbusinessexpansionmoveshasfurthersolidifiedMidea’sglobaloperationsandleadingadvantagesinroboticsandautomation.Withtheworld’sleadingproductioncapacityandexperience,andawidevarietyofproductsaswellasitsproductionbasesallovertheworld,theGrouphasbeenabletoexpandrapidlyintotheemergingoverseasmarketsandisbecomingastrongercompetitorinthosematureoverseasmarkets.TheGroupisoneofthebiggestmanufacturersintheworldformanyproductcategories,whichgivesitcompetitiveedgesinefficiencyimprovingandcostreducingthatitsoverseascompetitorsareunabletoreplicate.OverseassalesoftheGroupaccountsformorethan40%ofthetotalsalesrevenue.Itsproductshavebeenexportedtoover200countriesandregions,anditowns18overseasmanufacturingbasesand24overseasoperatingagencies.Midea’sglobaloperationssystemhasbeenfurtherimprovedthroughthereformofinternationalbusinessorganizationstowardsdiversebusinessmodels.Italsoincreasesinvestmentsinoverseasbusinessoperations,focusesontheneedsoflocalcustomersandenhancesproductcompetitivenessinabidtopromotesignificantgrowthinitsOwnBranding&Manufacturing(OBM)
business.Inaddition,withadeepknowledgeandunderstandingonproductcharacteristicsandproductdemandsinoverseasmarket,Mideaispromotingworldwidebrandingandexpansionthroughglobalcollaborationandcooperation.Inthisway,theglobalcompetitivenessofMideaisincreasingsteadily.D.Acompleteandbroadchannelnetworkandawell-establishedsmartsupplychainsystemensuringthesteadygrowthofMidea’sdomesticsalesWithitscontinuousefforts,Mideahasformedamulti-channelnetworkwhichhasacompletebusinesslayoutandcoversawiderangeofareas,thusmeetingthepurchaseneedsofonlineandofflineconsumersforhouseholdappliances.Offlineretailoutletshavereachedmorethan100,000.Mideahascreatedanetworklayoutofcomprehensivehouseholdappliancestores,co-brandedstoresofhomedecorationbusiness,specialtystoresofself-ownedproducts,traditionalretailersande-commercefranchisestores.ItprovideseasyaccesstoMidea'sproductsandservices,coveringtheentiremarketfromfirst-tiercitiestotownships.Particularly,Mideaboastsauniqueexclusiveshopsystemintheindustrywithmorethan15,000outlets,wherevariousneedsofusersfromnewdecorationtoupdatescanbemetinhomedecorationstores,flagshipstores,multi-categorystoresandcommunitystores.In2021,Mideasetupbusinessentitiesforpre-decorationoperations,whichhavebeenfaithfullydrivingtheimplementationoftheintelligenttransformationstrategyandretailreform.Italsofocuseson"smarthome"and"whole-housedecorationsolutions",aswellaspromotesdeepcooperationwithdecoration,furnishing,buildingmaterials,designandotherchannels.Mideahasbuiltmorethan880smarthomeexperiencecenters.Centeringonthreemajorcapabilitiesof"whole-househomeappliances&whole-houseintelligence/ecology&hardware/software",Mideahasrealizedone-stopserviceforusersandcreatedadiversifiedsmartlifestylebytheconstructionofsmarthomeexperiencecentersfordecoration.Inthesameyear,MideacompletedtheconstructionofMideaCloudSalesandrelatedoperatingplatform,providingofflinestoreswithprofessionaldigitalplatformsupportssuchascapacityenhancement,purchasingguarantee,anduseroperation;itintroducedecologicalproductsofhousedecorationandhouseholdservicetoextendbusinesscategoriesforofflinestores,andimprovedactuarialrate,orderreviewtimelinessandlogisticsefficiencytoensurestoresupplyexperience;additionally,italsoforgedonlinechannelsforofflinestoresbytheMideaHomeDeliveryapp,stimulatedofflineretailbytrade-inservice,grouppurchaseandothernewmodels,andoptimizedcustomer
operationwithmemberrightsandMember'sDaypromotion.In2021,Midearemainedthebest-sellinghouseholdappliancemanufactureronmajore-commercechannelssuchasJDandT-mallfornineconsecutiveyears.Besides,inPinduoduo,Douyin,Kuaishouandotheremergingchannels,Mideagrowsatafasterpace,drivingsalesandusergrowththroughmembershipoperation,aswellastheofferingofproductsuitesandsmartproducts.Makingfulluseofthedigitaltechnology,AnntoLogisticsTechnologyCo.,Ltd.(Annto),asubsidiaryofMidea,refinesitsnationwidelogisticsnetworkthroughthebigdatatechnologytobuildasmartanddigitaldistributionplatform.Anntoconcentratesitsresourcesonurbandistributionandisabletoprovidefullyvisualizeddirectdistributionservicescoveringeverytownandvillageofthecountry.Relyingonmorethan140urbandistributioncentersnationwide,itcoversmorethan99%oftownsandvillagesacrossthecountry.Itcanfinishthedeliveryto30,739(or77%of)townsandvillageswithin24hoursandto36,955(or93%of)townsandvillageswithin48hoursinthecountry.Additionally,AnntofocusesonasharedinventorysystemforonlineandofflinechannelsandthecompetitiveedgeofintegrateddeliveryfortheToB/Cbusiness,refinesitsnetworkofintegrateddeliveryandinstallationservices,drivesconnectivitythroughthewholeprocessfrommanufacturingtosale,providesqualityservicesolutionsforvariousordersfromcustomers,aswellascomprehensivelybettertheenduserexperience.E.Auserexperience-orientedreformof“ComprehensiveDigitalizationandComprehensiveIntellectualization”thatfocuseson“Digitization&IntelligenceDriven”tomakeMideaaleaderintheIoTeraMideahasputinplaceandwillprioritizethedevelopmentoftheMideaCloudSalescommercialplatformsupportedbyunifieddataandtechnologyplatforms,theIoTecosystemplatform,andtheIndustrialInternetplatformof“M.IoT”,withanaimtobecomeaworld-leadingtechnologygroupdrivenbydigitization&intelligence.Ononehand,itpromotesdeepintegrationofthedigitaltechnologyandbusinessinthewholevaluechain,withtheviewtobecominganiconindigitalization.Ontheotherhand,withforesight,itplansforwholenewproducts,servicesandbusinessmodelscenteringonsmarttechnologies,productsandscenes,soastooutcompeteInternetcompanies.Withcontinualinvestmentandresearchinartificialintelligence(AI),siliconchip,sensor,bigdata,cloudcomputingandothernewtechnologies,MideahasbuiltthebiggestAIteaminthehouseholdapplianceindustry,whichis
committedtoenablingproducts,machines,productionprocessesandsystemstosense,perceive,understandandjudge,drivenbythecombinationofbigdataandAI,inordertoreduceobstaclesforman-machineinteractiontotheminimumandcreatesmartapplianceswithoutanyassistanceininteraction.Focusingon“peopleandtheirfamily”,MideabuildsawholevaluechainofIoT.Breakthroughshavebeenmadeinuserdataprotection,contentoperationforsmartscenes,smartconnectiontechnology,thesmarthomeecosystem,cloudplatforms,thesmartvoicefunction,thebigdata-basedcloudhousekeeperservices,etc.Bydoingso,Mideaisabletooffercompletesmarthomesolutionsforusers,aswellastoempoweritsbusinesspartners.Uponyearsofdigitaltransformationcharacterizedby“OneMidea,OneSystem,OneStandard”,Mideahassuccessfullymaterializedoperationsdrivenbysoftwareanddatathroughitsvaluechain,connectingendtoendandcoveringplanningandR&D,ProductOrdering,intelligentscheduling,flexiblemanufacturing,coordinativesupply,productqualitytracking,logistics,installation&post-saleservices,etc.TheGroup’sdigitalplatformhasmadecometrueC2Mflexiblemanufacturing,platform-basedandmodularizedR&D,digitalizedproductiontechniquesandsimulation,intelligentlogistics,digitalmarketing,digitalcustomerservice,etc.BywayofintegratingtheIoTcapabilitiesofitsAIInnovationCenter,SoftwareEngineeringInstitute,ITDepartment,IoTDivision,SmartHomeBusinessGroup,Robotics&AutomationDivision,BuildingTechnologiesDivision,DigitalInnovationBusinessandotherorgans,MideahasestablishedaunifiedIoTtechnologyplatform.ItsIndustrialInternetplatformhasbeenupgradedto“M.IoT2.0”,andfourofitsfactorieshavebeenincludedinthe“GlobalLighthouseNetwork”initiatedbytheWorldEconomicForum,representingMidea’spowerfultechnologyattributeandstrongintelligentmanufacturingcapability.ThesepracticesareswiftlyappliedtootherMideamanufacturingbasesacrosstheworld.Basedonthese“Lighthouse”factoriesandthe“LighthouseNetwork”,MideabringstherelevantexperienceandservicesoutsidetheGrouptoempowerecosystempartnersandfacilitatethetransformationofChina’smanufacturingsector.Ithasprovidedtherelevantproductsandservicesforaround300customersinmorethan40marketsegments.Therefore,itissafetosaythatMideahasbuiltasolidfoundationregardingIndustrialInternetsystems.Whiledrivingonlinesystemsanddigitalization,Mideaalsoadoptsasystematicdata-basedapproachtogovernance.Awholenewdataplatformhasbeenputinplacetoaccumulatedataassetsandachieveintegrationofonlineandofflinebusinessdata,aswellasproductandservicedata.Further,the“UserOne_ID”systemhasbeen
refinedtoprovideadequatedatasupportforallbusinesslines.F.SoundcorporategovernancemechanismandeffectiveincentiveschemetoprovideasolidfoundationforMidea’ssustainedandsteadydevelopmentPayingcloseattentiontotheconstructionofagovernanceframework,regardingitscorporatecontrol,centralizationanddecentralizationsystems,theGroupformedamaturemanagementsystemforprofessionalmanagers.Thedivisionalsystemhasbeeninoperationformanyyears,anditsperformance-orientedevaluationandincentivemechanismfeaturingfulldecentralizationhasbecomeatrainingandgrowthplatformfortheGroup'sprofessionalmanagers.TheGroup'sprimaryseniormanagementteamconsistsofprofessionalmanagerswhohavebeentrainedandforgedintheoperationalpracticesofMideaGroup.TheyhavebeenworkingforMideaonaverageformorethan15years,allwithrichprofessionalandindustrialexperience,deepunderstandingandinsightsoftherelevantindustrieswithrespecttoToCandToB,andaccurateunderstandingoftheindustryenvironmentandcorporateoperationsmanagement.TheCompany'sadvantagesinsuchsystemsandmechanismshavelaidasolidfoundationfortheefficientandeffectivebusinessoperations,aswellasthepromising,stableandsustainablefuturedevelopmentoftheCompany.Atpresent,theCompanyhaslaunchedeightStockOptionIncentiveSchemes,fiveRestrictedShareIncentiveSchemes,sevenGlobalPartnerStockOwnershipSchemesandfiveBusinessPartnerStockOwnershipSchemesforkeymanagerialandtechnicalpersonnel,inadditiontotheexplorationandpracticeswithrespecttodiversifiedstockownershipschemesofkeyinnovativesubordinates.Assuch,agovernancestructurehasbeenputinplacethatalignstheinterestsofseniormanagementandcorebusinessbackboneswiththatofallshareholders,aswellascompriseslongandshort-termincentivesandrestrains.
4.AnalysisofMainBusiness
4.1Overview
Seecontentsundertheheading“2.BusinessScopeintheReportingPeriod”.
4.2RevenuesandCosts
4.2.1Breakdownofoperatingrevenue
Unit:RMB’000
| 2021 | 2020 | YoYChange(%) | |||
| Amount | Asapercentageoftotaloperatingrevenue(%) | Amount | Asapercentageoftotaloperatingrevenue(%) | ||
| Total | 341,233,208 | 100% | 284,221,249 | 100% | 20.06% |
| Bybusinesssegment | |||||
| Manufacturing | 301,026,573 | 88.22% | 256,694,589 | 90.32% | 17.27% |
| Byproductcategory | |||||
| HVAC | 141,879,146 | 41.58% | 121,215,043 | 42.65% | 17.05% |
| Consumerappliances | 131,866,099 | 38.64% | 113,890,764 | 40.07% | 15.78% |
| Robotics&automationsystems | 27,281,328 | 7.99% | 21,588,782 | 7.60% | 26.37% |
| Bygeographicalsegment | |||||
| PRC | 203,579,380 | 59.66% | 163,139,841 | 57.40% | 24.79% |
| OutsidePRC | 137,653,828 | 40.34% | 121,081,408 | 42.60% | 13.69% |
| Bysalesmodel | |||||
| Online | 62,103,887 | 18.20% | 58,244,327 | 20.49% | 6.63% |
| Offline | 279,129,321 | 81.80% | 225,976,922 | 79.51% | 23.52% |
Note:Consumerappliancesinthetableaboveprimarilyincluderefrigerators,laundryappliances,kitchenappliancesandsmalldomesticappliances.TheCompany’sfivebusinesssegments,namelytheSmartHomeBusinessGroup,theIndustrialTechnologyBusinessGroup,theBuildingTechnologiesDivision,theRobotics&AutomationDivision,andtheDigitalInnovationBusinessrecordedrevenueofRMB234.9billion(up13%year-on-year),RMB20.1billion(up44%year-on-year),RMB19.7billion(up55%year-on-year),RMB25.3billion(up23%year-on-year),andRMB8.3billion(up51%year-on-year)respectivelyduringtheReportingPeriod.
4.2.2Businesssegments,products,geographicalsegmentsorsalesmodelscontributingover10%oftheoperatingrevenueorprofit
√Applicable□N/A
Unit:RMB’000
| OperatingRevenue | Costofsales | Grossprofitmargin | YoYchangeofoperatingrevenue(%) | YoYchangeofcostofsales(%) | YoYchangeofgrossprofitmargin(%) | |
| Bybusinesssegment | ||||||
| Manufacturing | 301,026,573 | 228,641,881 | 24.05% | 17.27% | 18.90% | -1.04% |
| Byproductcategory | ||||||
| HVAC | 141,879,146 | 112,012,603 | 21.05% | 17.05% | 19.85% | -1.85% |
| Consumerappliances | 131,866,099 | 95,279,340 | 27.75% | 15.78% | 16.85% | -0.66% |
| Robotics&automationsystems | 27,281,328 | 21,349,939 | 21.74% | 26.37% | 23.43% | 1.87% |
| Bygeographicalsegment | ||||||
| PRC | 203,579,380 | 156,825,853 | 22.97% | 24.79% | 24.73% | 0.04% |
| OutsidePRC | 137,653,828 | 107,700,146 | 21.76% | 13.69% | 18.27% | -3.03% |
| Bysalesmodel | ||||||
| Online | 62,103,887 | 44,995,271 | 27.55% | 6.63% | 5.65% | 0.67% |
| Offline | 279,129,321 | 219,530,728 | 21.35% | 23.52% | 26.01% | -1.56% |
UnderthecircumstancesthatthestatisticalstandardsfortheCompany'smainbusinessdataadjustedintheReportingPeriod,theCompany'smainbusinessdataintherecentyeariscalculatedbasedonadjustedstatisticalstandardsattheendoftheReportingPeriod
□Applicable√N/A
4.2.3Whetherrevenuefromphysicalsalesishigherthanservicerevenue
√Yes□No
| Businesssegment | Item | Unit | 2021 | 2020 | YoYChange(%) |
| Homeappliances | Sales | Inthousandunits/sets | 562,677.2 | 507,591.4 | 10.85% |
| Output | Ditto | 585,074.7 | 510,986.9 | 14.50% | |
| Inventory | Ditto | 87,636.3 | 62,511.8 | 40.19% |
Reasonforanyover30%YoYmovementsinthedataabove
√Applicable□N/ATheinventoryofhomeapplianceswentup40.19%,primarilydrivenbytheincreasedsalesandthepre-stocking.
4.2.4ExecutionofsignificantsalesandpurchasecontractsintheReportingPeriod
□Applicable√N/A
4.2.5Breakdownofcostofsales
Unit:RMB’000
| Businesssegment | Item | 2021 | 2020 | YoYChange(%) |
Amount
| Amount | Asapercentageoftotalcostofsales(%) | Amount | Asapercentageoftotalcostofsales(%) | |||
| Homeappliances | Rawmaterials | 175,102,256 | 84.47% | 144,479,295 | 82.56% | 21.20% |
| Laborcosts | 12,186,025 | 5.88% | 11,066,122 | 6.32% | 10.12% | |
| Depreciation | 3,203,362 | 1.55% | 3,009,985 | 1.72% | 6.42% | |
| Energy | 2,846,166 | 1.37% | 2,567,340 | 1.47% | 10.86% |
4.2.6ChangesinthescopeoftheconsolidatedfinancialstatementsfortheReportingPeriod
√Yes□NoThedetailedinformationofmajorsubsidiariesincludedintheconsolidationscopeinthecurrentperiodissetoutinNotes5and6.EntitiesnewlyincludedintheconsolidationscopeinthecurrentperiodthroughacquisitionmainlyincludeBeijingWandongMedicalTechnologyCo.,Ltd.anditssubsidiariesandHitachiCompressor(Thailand)Ltd.(pleaserefertoNote5(1)(a)),whiledetailsofthosethroughincorporationcanbefoundinNote5(2)(a).ThedetailedinformationofsubsidiariesnolongerincludedintheconsolidationscopeinthecurrentperiodissetoutinNote5(2)(b).
4.2.7Majorchangesinthebusiness,productsorservicesintheReportingPeriod
□Applicable√N/A
4.2.8MaincustomersandsuppliersMajorcustomersoftheCompany
| Totalsalestotopfivecustomers(RMB'000) | 36,258,505 |
| Totalsalestotopfivecustomersasapercentageofthetotalsalesfortheyear(%) | 10.63% |
| Totalsalestorelatedpartiesamongtopfivecustomersasapercentageofthetotalsalesfortheyear(%) | 0 |
Informationabouttopfivecustomers
| No. | Customer | Salesrevenue(RMB'000) | Asapercentageofthetotalsalesrevenue(%) |
| 1 | CustomerA | 22,103,723 | 6.48% |
| 2 | CustomerB | 5,424,006 | 1.59% |
| 3 | CustomerC | 3,802,787 | 1.11% |
| 4 | CustomerD | 2,607,532 | 0.76% |
| 5 | CustomerE | 2,320,457 | 0.68% |
| Total | -- | 36,258,505 | 10.63% |
Otherinformationabouttopfivecustomers
□Applicable√N/AMajorsuppliersoftheCompany
| Totalpurchasesfromtopfivesuppliers(RMB'000) | 16,286,134 |
| Totalpurchasesfromtopfivesuppliersasapercentageofthetotalpurchasesfortheyear(%) | 6.26% |
| Totalpurchasesfromrelatedpartiesamongtopfivesuppliersasapercentageofthetotalpurchasesfortheyear(%) | 0 |
InformationabouttopfivesuppliersoftheCompany
| No. | Supplier | Purchase(RMB'000) | Asapercentageofthetotalpurchases(%) |
| 1 | SupplierA | 5,515,903 | 2.12% |
| 2 | SupplierB | 3,588,607 | 1.38% |
| 3 | SupplierC | 2,495,177 | 0.96% |
| 4 | SupplierD | 2,356,026 | 0.91% |
| 5 | SupplierE | 2,330,421 | 0.90% |
| Total | -- | 16,286,134 | 6.26% |
Otherinformationabouttopfivesuppliers
□Applicable√N/A
4.3Expense
Unit:RMB'000
| 2021 | 2020 | YoYChange(%) | Reasonforanysignificantchange | |
| Sellinganddistributionexpenses | 28,647,344 | 23,563,455 | 21.58% | |
| Generalandadministrativeexpenses | 10,266,283 | 9,264,148 | 10.82% | |
| Financecosts | 4,386,111 | 2,638,032 | 66.26% | Increasedinterestincomeandexchangegains |
| Researchanddevelopmentexpenses | 12,014,907 | 10,118,667 | 18.74% |
4.4R&Dinvestment
√Applicable□N/AInformationaboutR&Dpersonnel
| 2021 | 2020 | YoYChange(%) | |
| NumberofR&Dpersonnel | 18,105 | 15,265 | 18.60% |
| R&Dpersonnelasapercentageoftotalemployees | 10.92% | 10.23% | 0.69% |
| EducationalbackgroundofR&Dpersonnel | —— | —— | —— |
| Bachelor’sdegree | 10,881 | 9,259 | 17.51% |
| Master’sdegree | 3,934 | 3,182 | 23.66% |
| Doctoraldegree | 427 | 309 | 38.07% |
| Other | 2,863 | 2,515 | 13.84% |
| AgestructureofR&Dpersonnel | —— | —— | —— |
| Below30 | 5,956 | 5,317 | 12.02% |
| 30~40 | 9,532 | 7,831 | 21.72% |
| Over40 | 2,617 | 2,117 | 23.60% |
InformationaboutR&Dinvestment
| 2021 | 2020 | YoYChange(%) | |
| R&Dinvestment(RMB’000) | 12,014,907 | 10,118,667 | 18.74% |
| R&Dinvestmentasapercentageofoperating | 3.52% | 3.56% | -0.04% |
ReasonsforanysignificantchangeinthecompositionofR&Dpersonnelandtheimpact
□Applicable√N/AReasonsforanysignificantYoYchangeinthepercentageofR&Dinvestmentinoperatingrevenue
□Applicable√N/AReasonsforanysignificantchangeinthepercentageofcapitalizedR&Dinvestmentandrationale
□Applicable√N/A
4.5Cashflow
Unit:RMB'000
revenueItem
| Item | 2021 | 2020 | YoYChange(%) |
| Subtotalofcashinflowsfromoperatingactivities | 330,415,497 | 252,985,046 | 30.61% |
| Subtotalofcashoutflowsduetooperatingactivities | 295,323,793 | 223,427,929 | 32.18% |
| Netcashflowsfromoperatingactivities | 35,091,704 | 29,557,117 | 18.73% |
| Subtotalofcashinflowsfrominvestingactivities | 127,801,101 | 147,012,656 | -13.07% |
| Subtotalofcashoutflowsduetoinvestingactivities | 114,201,515 | 182,323,319 | -37.36% |
| Netcashflowsfrominvestingactivities | 13,599,586 | -35,310,663 | 138.51% |
| Subtotalofcashinflowsfromfinancingactivities | 21,145,221 | 54,749,413 | -61.38% |
| Subtotalofcashoutflowsduetofinancingactivities | 52,349,760 | 55,505,708 | -5.69% |
| Netcashflowsfromfinancingactivities | -31,204,539 | -756,295 | -4025.97% |
| Netincreaseincashandcashequivalents | 17,001,531 | -6,893,252 | 346.64% |
Explanationofwhythedataabovevariedsignificantly
√Applicable□N/Aa.Primarilydrivenbyadecreaseincashpaidtoacquireinvestments,netcashflowsfrominvestingactivitiesincreased138.51%fromlastyear.b.Primarilydrivenbyanincreaseincashpaymentsrelatingtootherfinancingactivities,netcashflows
fromfinancingactivitiesdecreased4025.97%fromlastyear.c.Primarilydrivenbyanincreaseinnetcashflowsfrominvestingactivities,netincreaseincashandcashequivalentsincreased346.64%fromlastyear.ExplanationofmainreasonsleadingtothematerialdifferencebetweennetcashflowsfromoperatingactivitiesduringtheReportingPeriodandnetprofitfortheyear
□Applicable√N/A
5.AnalysisofNon-CoreBusiness
□Applicable√N/A
6.AssetsandLiabilities
6.1Materialchangesofassetitems
Unit:RMB'000
| 31December2021 | 1January2021 | Changeinpercentage(%) | Explanationaboutanymaterialchange | |||
| Amount | Asapercentageoftotalassets(%) | Amount | Asapercentageoftotalassets(%) | |||
| Cashatbankandonhand | 71,875,556 | 18.53% | 81,210,482 | 22.40% | -3.87% | |
| Accountsreceivable | 24,636,440 | 6.35% | 22,978,363 | 6.34% | 0.01% | |
| Contractassets | 3,823,476 | 0.99% | 3,236,848 | 0.89% | 0.10% | |
| Inventories | 45,924,439 | 11.84% | 31,076,529 | 8.57% | 3.27% | |
| Investmentproperties | 859,195 | 0.22% | 405,559 | 0.11% | 0.11% | |
| Long-termequityinvestments | 3,796,705 | 0.98% | 2,901,337 | 0.80% | 0.18% | |
| Fixedassets | 22,852,848 | 5.89% | 22,239,214 | 6.13% | -0.24% | |
| Constructioninprogress | 2,690,930 | 0.69% | 1,477,302 | 0.41% | 0.28% | |
| Right-of-useassets | 2,297,354 | 0.59% | 2,155,516 | 0.59% | 0.00% | |
| Short-term | 5,381,623 | 1.39% | 9,943,929 | 2.74% | -1.35% | |
| borrowings | |||||
| Long-termborrowings | 19,734,020 | 5.09% | 42,827,287 | 11.81% | -6.72% |
| Contractliabilities | 23,916,595 | 6.16% | 18,400,922 | 5.08% | 1.08% |
| Leaseliabilities | 1,533,552 | 0.40% | 1,513,426 | 0.42% | -0.02% |
Indicatewhetheroverseasassetsaccountforalargerproportionintotalassets.
□Applicable√N/A
6.2Assetsandliabilitiesmeasuredatfairvalue
√Applicable□N/A
Unit:RMB'000
| Item | Openingbalance | Profitorlossfromchangeinfairvalueduringtheperiod | Cumulativefairvaluechangechargedtoequity | Amountprovidedforimpairmentintheperiod | Purchasedintheperiod | Soldintheperiod | Otherchanges | Closingbalance |
| Financialassets | ||||||||
| 1.Financialassetsheldfortrading(excludingderivativefinancialassets) | 28,239,601 | -1,228,358 | - | 9,328,293 | 30,422,512 | -37,822 | 5,879,202 | |
| 2.Derivativefinancialassets | 1,188,428 | 127,345 | 22,579 | 6,072 | 44,681 | -928 | 1,298,815 | |
| 3.Receivablesfinancing | 13,901,856 | 3,628,304 | 10,273,552 | |||||
| 4.Otherdebtinvestmentsandother | 21,456,155 | 5,832,000 | 14,156 | 210,323 | 27,484,322 | |||
| 5.Investmentsinotherequityinstruments | 46,651 | 2,238 | 2,907 | -235 | 45,747 | |||
| 6.Othernon-currentfinancialassets | 3,360,849 | 932,704 | 2,008,271 | 342,329 | -46,622 | 5,912,873 | ||
| Sub-totaloffinancialassets | 68,193,540 | -168,309 | 24,817 | 17,174,636 | 34,454,889 | 124,716 | 50,894,511 | |
| Investmentproperties | ||||||||
| Productivelivingassets | ||||||||
| Others |
| Sub-totaloftheabove | 68,193,540 | -168,309 | 24,817 | 17,174,636 | 34,454,889 | 124,716 | 50,894,511 | |
| Financialliabilities | 180,736 | -22,350 | 11,025 | -2,762 | 166,649 |
ContentsofotherchangesWhethertherewereanymaterialchangesonthemeasurementattributesofmajorassetsoftheCompanyduringtheReportingPeriod
□Yes√No
6.3RestrictedassetrightsasoftheendofthisReportingPeriodAsoftheendofthisReportingPeriod,therewerenosuchcircumstanceswhereanymainassetsoftheCompanyweresealed,distrained,frozen,impawned,pledgedorlimitedinanyotherway.
7.Investmentmade
7.1Totalinvestmentamount
√Applicable□N/A
| TotalinvestmentamountoftheReportingPeriod(RMB’000) | Totalinvestmentamountoflastyear(RMB’000) | YoYChange(%) |
| 114,201,515 | 182,323,319 | -37.36% |
7.2SignificantequityinvestmentmadeintheReportingPeriod
□Applicable√N/A
7.3Significantnon-equityinvestmentsongoingintheReportingPeriod
□Applicable√N/A
7.4Financialinvestments
7.4.1Securitiesinvestments
√Applicable□N/A
Unit:RMB’000
| Typeofsecurities | Codeofsecurities | Abbreviationofsecurities | Initialinvestmentcost | Measurement | Openingcarryingamount | Profitorlossfromchangeinfair | Cumulativefairvaluechange | Purchasedintheperiod | Soldintheperiod | Profitorlossintheperiod | Closingcarryingamount | Accountingtitle | Fundingsource |
| method | valueduringtheperiod | chargedtoequity | |||||||||||
| Overseaslistedstock | 1810 | XIAOMI-W | 769,972 | Fairvaluemethod | 1,676,547 | -711,567 | -37,822 | - | -711,567 | 927,158 | Financialassetsheldfortrading | Ownfunds | |
| Overseaslistedstock | DNK | Danke | 172,190 | Fairvaluemethod | 35,126 | -34,709 | -417 | - | -34,709 | - | Financialassetsheldfortrading | Ownfunds | |
| Domesticallylistedstock | 688018 | EspressifSystems | 13,998 | Fairvaluemethod | 128,032 | -114,034 | - | -163,348 | 35,316 | - | Financialassetsheldfortrading | Ownfunds | |
| Domesticallylistedstock | 688165 | EFORT | 178,534 | Fairvaluemethod | 475,260 | -82,948 | - | - | -82,948 | 392,312 | Financialassetsheldfortrading | Ownfunds | |
| Total | 1,134,694 | -- | 2,314,965 | -943,258 | -38,239 | - | -163,348 | -793,908 | 1,319,470 | - | -- | ||
7.4.2Derivativesinvestments
√Applicable□N/A
Unit:RMB'000
| Operatingparty | RelationshipwiththeCompany | Relatedtransaction | Typeofderivative | Initialinvestmentamount | Startingdate | Endingdate | Openinginvestmentamount | PurchasedinReportingPeriod | SoldinReportingPeriod | Amountprovidedforimpairment(ifany) | Closinginvestmentamount | ClosinginvestmentamountasapercentageoftheCompany’sclosingnet | Actualgain/lossinReportingPeriod |
| assets | |||||||||||||
| Futurescompany | No | No | Futurescontracts | 105 | 01/01/2021 | 31/12/2021 | 105 | 71,790 | 0.0575% | 241,206 | |||
| Bank | No | No | FXderivatives | 1,007,587 | 01/01/2021 | 31/12/2021 | 1,007,587 | 6,072 | 44,681 | 902,875 | 0.7231% | 2,138,811 | |
| Total | 1,007,692 | -- | -- | 1,007,692 | 6,072 | 44,681 | 974,665 | 0.7806% | 2,380,017 | ||||
| Sourceofderivativesinvestmentfunds | AllfromtheCompany’sownfunds | ||||||||||||
| Litigationinvolved(ifapplicable) | N/A | ||||||||||||
| Disclosuredateoftheannouncementabouttheboard’sconsentforthederivativeinvestment(ifany) | 30/04/2021 | ||||||||||||
| Disclosuredateoftheannouncementaboutthegeneralmeeting’sconsentforthederivativeinvestment(ifany) | 22/05/2021 | ||||||||||||
| RiskanalysisofpositionsheldinderivativesduringtheReportingPeriodandexplanationofcontrolmeasures(Includingbutnotlimitedtomarketrisk,liquidityrisk,creditrisk,operationalrisk,legalrisk,etc.) | ForthesakeofeliminatingthecostriskoftheCompany'sbulkpurchasesofrawmaterialsasaresultofsignificantfluctuationsinrawmaterialprices,theCompanynotonlycarriedoutfuturesbusinessforsomeofthematerials,butalsomadeuseofbankfinancialinstrumentsandpromotedforexfundsbusiness,withthepurposeofavoidingtherisksofexchangeandinterestratefluctuation,realizingthepreservationandappreciationofforexassets,reducingforexliabilities,aswellasachievinglocked-incosts.TheCompanyhasperformedsufficientevaluationandcontrolagainstderivativesinvestmentandpositionrisks,detailsofwhicharedescribedasfollows:1.Legalrisk:TheCompany'sfuturesbusinessandforexfundsbusinessesshallbeconductedincompliancewithlawsandregulations,withclearlycovenantedresponsibilityandobligationrelationshipbetweentheCompanyandtheagencies.Controlmeasures:TheCompanyhasdesignatedrelevantresponsibledepartmentstoenhancelearningoflawsandregulationsandmarketrules,conductedstrictexaminationandverificationofcontracts,definedresponsibilityandobligationwell,andstrengthenedcompliancecheck,soastoensurethattheCompany'sderivativesinvestmentandpositionoperationsmeetthe | ||||||||||||
| requirementsofthelawsandregulationsandinternalmanagementsystemoftheCompany.2.Operationalrisk:Imperfectinternalprocess,staff,systemsandexternalissuesmaycausetheCompanytosufferfromlossduringthecourseofitsfuturesbusinessandforexfundsbusiness.Controlmeasures:TheCompanyhasnotonlydevelopedrelevantmanagementsystemsthatclearlydefinedtheassignmentofresponsibilityandapprovalprocessforthefuturesbusinessandforexfundsbusiness,butalsoestablishedacomparativelywell-developedmonitoringmechanism,aimingtoeffectivelyreduceoperationalriskbystrengtheningriskcontroloverthebusiness,decision-makingandtradingprocesses.3.Marketrisk:Uncertaintiescausedbychangesinthepricesofbulkcommodityandexchangeratefluctuationsinforeignexchangemarketcouldleadtogreatermarketriskinthefuturesbusinessandforexfundsbusiness.Meanwhile,inabilitytotimelyraisesufficientfundstoestablishandmaintainhedgingpositionsinfuturesoperations,ortheforexfundsrequiredforperformanceinforexfundsoperationsbeingunabletobecreditedintoaccountcouldalsoresultinlossanddefaultrisks.Controlmeasures:ThefuturesbusinessandforexfundsbusinessoftheCompanyshallalwaysbeconductedbyadheringtoprudentoperationprinciples.Forfuturesbusiness,thefuturestransactionvolumeandapplicationhavebeendeterminedstrictlyaccordingtotherequirementsofproduction&operations,andthestop-lossmechanismhasbeenimplemented.Besides,todeterminethepreparedmarginamountwhichmayberequiredtobesupplemented,thefuturesriskmeasuringsystemhasbeenestablishedtomeasureandcalculatethemarginamountoccupied,floatinggainsandlosses,marginamountavailableandmarginamountrequiredforintendedpositions.Asforforexfundsbusiness,ahierarchicalmanagementmechanismhasbeenimplemented,wherebytheoperatingunitwhichhassubmittedapplicationforfundsbusinessshouldconductriskanalysisontheconditionsandenvironmentaffectingoperatingprofitandloss,evaluatethepossiblegreatestrevenueandloss,andreportthegreatestacceptablemarginratioortotalmarginamount,sothattheCompanycanupdateoperatingstatusofthefundsbusinessonatimelybasistoensureproperfundsarrangementbeforetheexpirydates. | |
| ChangesinmarketpricesorfairvalueofderivativeproductsduringtheReportingPeriod,specificmethodsusedandrelevantassumptionandparametersettingsshallbedisclosedforanalysisoffairvalueofderivatives | 1.GainfromfuturescontractsduringtheReportingPeriodwasRMB241.206million.2.GainfromFXderivativesduringtheReportingPeriodwasRMB2,138.811million.3.PublicquotationsinfuturesmarketorforwardforexquotationsannouncedbytheBankofChinaareusedintheanalysisofderivativesfairvalue. |
| Explanationofsignificantchangesin | Nochange |
| accountingpoliciesandspecificfinancialaccountingprinciplesinrespectoftheCompany'sderivativesfortheReportingPeriodascomparedtothepreviousReportingPeriod | |
| SpecialopinionsexpressedbyindependentdirectorsconcerningtheCompany'sderivativesinvestmentandriskcontrol | TheCompany'sindependentdirectorsareoftheviewthatthefutureshedgingbusinessisaneffectiveinstrumentfortheCompanytoeliminatepricevolatilityandimplementriskpreventionmeasuresthroughenhancedinternalcontrol,therebyimprovingtheoperationandmanagementoftheCompany;theCompany'sforeignexchangeriskmanagementcapabilitycanbefurtherimprovedthroughtheforexfundsbusiness,soastomaintainandincreasethevalueofforeignexchangeassetsandtheabovementionedinvestmentinderivativescanhelptheCompanytofullybringoutitscompetitiveadvantages.Therefore,itispracticablefortheCompanytocarryoutderivativesinvestmentbusiness,andtherisksarecontrollable. |
7.5Useoffundsraised
□Applicable√N/ANosuchcasesintheReportingPeriod.
8.SaleofMajorAssetsandEquityInterests
8.1Saleofmajorassets
□Applicable√N/ANosuchcasesintheReportingPeriod.
8.2Saleofmajorequityinterests
□Applicable√N/A
9.AnalysisofMajorSubsidiaries
√Applicable□N/AMainsubsidiariesandjointstockcompanieswithanover10%influenceontheCompany’snetprofit
| Companyname | Companytype | Businessscope | Registeredcapital | Totalassets(inRMB | Netassets(inRMB | Operatingrevenue(inRMB | Operatingprofit(inRMB | Netprofit(inRMB |
| million) | million) | million) | million) | million) | ||||
| GuangdongMideaKitchenAppliancesManufacturingCo.,Ltd. | Subsidiary | Manufacturingofhomeappliances | USD158.58million | 20,073.58 | 8,079.99 | 16,603.86 | 2,175.90 | 1,937.06 |
| FoshanShundeMideaElectricalHeatingAppliancesManufacturingCo.,Ltd. | Subsidiary | Manufacturingofhomeappliances | USD42million | 17,599.61 | 8,783.49 | 10,310.02 | 1,362.43 | 1,170.70 |
| WuhuMideaKitchen&BathAppliancesMfg.Co.,Ltd. | Subsidiary | Manufacturingofwaterheaters | RMB60million | 16,905.10 | 1,762.28 | 13,640.60 | 1,723.49 | 1,490.93 |
| WuxiLittleSwanElectricCo.,Ltd. | Subsidiary | Manufacturingoflaundryappliances | RMB732,487,764 | 18,524.64 | 5,883.50 | 23,104.22 | 2,169.17 | 2,013.01 |
AcquisitionanddisposalofsubsidiariesduringtheReportingPeriod
√Applicable□N/AThedetailedinformationofmajorsubsidiariesincludedintheconsolidationscopeinthecurrentperiodissetoutinNotes5and6.EntitiesnewlyincludedintheconsolidationscopeinthecurrentperiodthroughacquisitionmainlyincludeBeijingWandongMedicalTechnologyCo.,Ltd.anditssubsidiaries(hereinafter,“WDM”)andHitachiCompressor(Thailand)Ltd.(pleaserefertoNote5(1)(a)),whiledetailsofthosethroughincorporationcanbefoundinNote5(2)(a).ThedetailedinformationofsubsidiariesnolongerincludedintheconsolidationscopeinthecurrentperiodissetoutinNote5(2)(b).
10.StructuredBodiesControlledbytheCompany
□Applicable√N/A
11.OutlookfortheFutureDevelopmentoftheCompany
DevelopmentstrategiesoftheCompanyMideaadherestothestrategicfocusof“TechnologyLeadership,DirecttoUsers,Digitization&IntelligenceDriven,andGlobalImpact”,focuseson“ComprehensiveDigitalizationandComprehensiveIntellectualization”,anddrivessustainedgrowthinthefivebusinesssegmentsundertheguidanceofthestrategicfocus.Mideaarebuilttogrowonthebackofadvancedgovernancemechanism,future-proof
values,andmanagerialmindsetgrowth.Mideawillcontinuouslyimprovethegovernancemechanismbyempoweringresponsibilities,rightsandobligations,encouragingentrepreneurshipandboostingorganizationalvitality,andestablishaflatorganizationandoptimizationprocess.Itwillalsoadheretothevaluesoflong-termismandaltruism,trulyputemployees,users,customersandpartnersatthecenterofallthings,andimprovetheEHSgovernanceandESGrating.Additionally,theManagementneedstoreflectonandchallengethemselves,endeavoringtoachieveall-roundgrowthbothspirituallyandintellectually.Meanwhile,Mideawillcontinuetoimprovethetalentstructureandbuilddiverseteamsthatareinclusiveandcollaborative.Mideaintegratesglobalresources,followsthecustomer-orientedprinciple,andbuildskeytechnologybarriersbywayoftechnologicalinnovationandqualityimprovement,soastoachievegloballeadershipwithrespecttoprincipalproductcategoriesandnewbusinessbreakthroughs,aswellastomaintaintechnologyleadership.Itaimstoestablishdirectconnectionwithcustomersintermsofmindsets,products,buying,services,etc.throughdigitalizationandintellectualizationinitsoperations.Supportedbydata-andplatform-basedoperationsinthewholevaluechain,Mideastrivestoboostitsbusinesscompetitivenessandbecomemorecompetitiveinthedigitalerabyimplementingthestrategyof“Digitization&IntelligenceDriven”.Itwillalsopromoteglobaloperationsandtrytolayasolidfoundationinthisregardandenhanceglobalimpactthroughpromotingitsownbrandedproducts.Itwillpromoteefficiencydrivengrowthbyimprovingmanagement,manufacturingandassetefficiencytocreatemorecostefficiency.Additionally,itwillstrengthenitsToBbusinesstobuildnewbusinessplatformandgrowthpoints.Itaimstocreateabetterlifeforover400millionusers,majorcustomersandstrategicpartnersindifferentareasworldwideeveryyearwithsatisfyingproductsandservices.Keyoperationpointsin2022:
In2022,basedonthecorestrategicfocuswith“TechnologyLeadership”asthecore,MideawillpromotedevelopmentbothintheToBandToCbusiness,aswellascarryouttransformationinboththedomesticandoverseasoperations.Mideawillupgradeitsexistingoperationsanddrivehigh-qualitydevelopmentthroughincreasingaddedvalueofproducts,optimizingproductstructure,improvingmarketlayout,andadjustingtheproportionofchannels.Itmustbefullypreparedtorespond,decideandactswiftlytodealwithpossibleproblemsandchallengesinthefuture.Mideainnovatesandchangesforgreatergrowth.It
willadheretothecorestrategyof“TechnologyLeadership”andthebusinessphilosophyof"ImplementNewStrategiestoBoostNewGrowthAreas".Itwillcontinuallyupgradeexistingoperationsandachievefurthergrowthbyenhancingperspectiveandbreakingdownestablishedmindsets,andpromotebusinessgrowthbymakingfulluseofnewtechnologies,newproducts,newstructures,newmarkets,newchannels,newpathways,newmethodsandnewbusinessmodels.Withthedual-circulationanddual-carbonstrategiesathomeandabroad,whileupgradingthe"NumberOneEngine"oftheexistingToCbusiness,MideawillseizetheopportunitiesofdomesticreplacementandindustrialupgradingtoembraceToBtransformationtocreatenewbusinessesandignitethe"NumberTwoEngine".MideashouldfocusondevelopingnotonlythecoreToBbusinessessuchasroboticsandautomation,buildingtechnologies,energymanagement,andsmarttravel,butalsothetransformationandupgradingofdigitalinnovationbusinessessuchasAnnto,MideaCloud,WDMandMideaIntelligentLighting&Controls.Specificprioritytasksaresetoutbelow:
a.Basedonthecorestrategyof“TechnologyLeadership”,Mideawillestablishacomprehensiveresearchorganization,increaseinvestmentindigitalizationandR&D,improvetalentstructure,andcarryoutthetaskofscientificinnovation,productinnovation,technologicalinnovation,businessmodelinnovation,andprocessinnovation.MideawillresolutelyincreaseR&Dinvestment,buildupR&Dscaleadvantage,andcontinuouslylayoutkeytechnologies,cutting-edgetechnologies,basictechnologies,digitalizationandintellectualization.Byvirtueofthetwodriversoftechnologystrategyandproductstrategy,aswellasthethree-tiertechnicalcommitteeandthefour-tierR&Dsystem,Mideawillleadtechnologicalinnovationaccordingtoproductdemand,andcreatethebrandadvantageforMideainenergysaving,healthandintelligence;itwillactivelysupportthedual-carbonstrategyandthe"GreenStrategy"oftheGroup,applyeco-friendlyandlow-carbontechnologytoproductsbytechnologyinnovation,helptosaveenergyandreduceemissionsinthelifecycleofproducts,andleadtheformulationofenvironmentconservationstandardstoobtainthenationalgreenproductcertificationofallcategoriesofproducts;topromotetherapidapplicationofscientificinnovationbystandard,itwillimplementthe"3+1"strategyforstandardization,andstrengthentheformulationandrevisionofinternationalstandards.Forthepurposeofmakingbreakthroughsandbuildingkeytechnologybarriersinalltheproductcategories,andpromotinginnovationofglobalproducts,productstructureimprovementandhigh-endstrategy,itwillcontinuetoimplementthe"ThreeGenerations"project,
acceleratetheapplicationofresearchresults,andretainthe"NumberOneEngine"ofToCbusiness.InToBbusiness,itwillcooperatewithstrategicpartnersbydigitaltechnologytoincreasetheresearchondifferentiatedinnovationtechnologiesinnewindustriesandfostertheindustrializationofinnovationtechnologies.Also,inordertobuildupanR&D-centricinnovation-drivenmodelandmaintaintechnologyleadershipinacomprehensivemanner,itwillcontinuouslyoptimizetheR&Dnetworkandscientistsystem,improvethe"2+4+N"R&Dframeworkbasedonregionaltechnologyadvantages,adapttheR&Dstructure,introducehigh-endtalents,buildR&Dcentersofnewindustries,expandtheopen-endinnovativeecology,andexploretheincubationmechanism.b.Mideawillkeepahigh-qualitydevelopmentdirectionandsticktointernal,sustainedandeffectiveorganicgrowth.Intheprocessofimplementingnewstrategiestoboostnewgrowthareas,thekeyforMidea'ssurvivalincompetitionliesinimprovingoperationalefficiency.Therefore,Mideawilloptimizethedeliverycycle,enhancetheinventoryturnover,improvethecashcycle,andimplementthesharedinventorysystem.Beingcustomer-oriented,Mideawillstrivetobe“DirecttoUsers”throughuserresearch,userinsight,productplantransforminganduseroperation.MideawillpromotetheT+3businessmodelreformandhigh-performanceoperationsinthewholevaluechainineverylinkfromproductplanningtoafter-salesservice,soastoincreaseefficiencyinthewholevaluechainandthedata-drivenefficiency.Channelreformwillbefirmlypushedforwardforthefront-endmarketinpursuitofbetterprofitability.Inordertowinincompetition,itisimportanttodevelophigh-endproductstorefinetheproductmix.Breakthroughsmustbemadeinafastermannerregardingsmallandmajorappliances,inadditiontothepromotionofproductscateringtonewconsumptiontrends.Newlyestablishedbusinessentitieswillexplorecorporation-baseddevelopment,activelycarryoutinnovationandembracenewmodelsandapproaches,aswellasstrengthenbreakthroughswithrespecttonewmodels,business,productcategoriesandapplicationareas.Mideawillplanfor,establishandrefinebusinessmiddleplatforms,especiallydataandtechnologymiddleplatforms.Inthemeantime,itwillmaintainoverallconsistencybystickingto“OneMidea,OneSystem,OneStandard”.Infaceofcommonproblemssuchasfluctuationsinexchangeratesandpricesofbulkrawmaterials,aswellassourcingmanagement,Mideawillfirmlypromoteitsinternalcoordinationandsharingmechanismandkeepperfectingtherelevantsolutions.Itwillalsomaintaineffectiveinvestments,controlnon-operatingexpenses,increaselaborproductivity,improvehumanresourceallocationefficiency,promoteleanmanagementandprovide
freshimpetusforcontinualgrowththroughrelentlessinnovation.c.Inthedomesticmarket,basedonthe“DirecttoUsers”strategy,Mideawillcontinuetodeepenthereformofitsorganizationalstructure,improveretailcapacity,anddevelopuserinsightsandback-endcapacity.Mideawillalsocommititselftointelligentexperienceterminalsanduserexperienceaspartofeffortstoconnectwithusers'preferences.Forchanneltransformation,Mideawilltaketheoperationcenterasthe“mainbattlefield”,continuouslyempowerandfullyauthorizetheoperationcenter.Atthesametime,MideawilloptimizetheplatformofMideaCloudSalestoimprovetheuseexperienceofretailersinallaspects,andtoensuretheenhancementoftheoperationcenter'scapabilities.Itwillimprovetheefficiencyoftransformationfrom"MideaHomeDelivery"toMideaofflinemicrostorethroughthedigitaltransformationofstoreresponsibilitysystem,datavisualization,andonlinebusinessmoves.Meanwhile,itwillestablishthecloudwarehousenetwork,enableterminalstorestofocusonretailtrade,andstrengthenthescenedisplayfunctionforproductsinstores,torealizethewhole-scenesalesandgoodsdeliverybycloudwarehouse.Also,itwillimprovesalescapabilityofproductsuitesandscene-baseddisplaythroughtheintelligentscene-baseddisplayinterminalstores,the3DdisplayinappofMideaCloudSalesand"MideaHomeDelivery",andtheintroductionofC2Mprofessionalcustomizedtoolsforterminalshoppingguidancetoprovideuserswithprofessionalone-stopsolutions.Fortheproductmarketing,Mideawillacceleratethelayoutofproductstructureandthebreakthroughofproductsuites,improvetheproductlayoutofnewbrandsbyenhancingthematchingefficiencyofpotentialcustomersanddrivingsalesgrowthwithnewmarketingandplayingmethods,andbuildemergingcategoriesinadvancebyuserinsight;moreover,itwillacceleratetheonlinemarketingtransformation,promotebusinessconsistency,buildintegratedmarketingcapabilitiesonline,andpressaheadwithmid-officecapabilitybuildingofusers,content,livebroadcasting,anddatatocontinuouslyimprovebusinessefficiency.Withregardtouseroperation,Mideawillcontinuetoupholdtheprincipleof"CreateValueforUsers"andoptimizeproductiteration,purchaseexperienceandserviceexperiencebasedonuserexperience.Moreover,itwillattractmoremembersandprovidemorememberprivilegeservicesaswellasacceleratetheoperationofprivatedomaintraffic.Inaddition,Mideawillinvestmoreinintelligentdevicestooptimizeuserexperienceandimproveuserloyalty,andstrengthenthesupportofdataplatformsandbusinessintelligence.Fortheuserservice,incombinationwiththetransformationoffront-endbusinessmodel,Mideawillproactivelypromotethewhole-housescene-basedservicesand
theconstructionofecologicalchaininpre-installationscene,andcreateanintegratedsolutionforwhole-housepackagepurchasingandinstallingservices.Meanwhile,itwilldeepenthebuildingofengineers'servicecapacity,upgradethesystemofserviceengineeroperation,tietheservicequality,engineerincometooperationrulesandpromotethedigitalmanagementonengineers,theintelligentdispatchingbybigdata,anddigitaltransformationofserviceproviderstorealizetheleapfroggingbreakthroughofserviceefficiencyandquality.d.Ontheoverseasmarket,Mideawillcontinuouslyoptimizetheproductstructure,buildexperiencecentersforoverseasuserswithintelligent-basedscene,andcomprehensivelypromotethewhole-houseintelligentscenesystemandtheupgradeofintelligentterminalstobuildaproductcompetitionsystemwithhighaddedvalue.Itwillimprovechannelefficiencyandflattening,enhanceproductturnoverefficiency,exploredirectretailandthesharedinventorysystem,andattempttoimplementtheDTCbusinessmodel.Inresponsetobuildingthecapabilitiesofterminalretailoperationanddirectaccesstousers,itwillcontinuetoimprovethebreadthanddepthofthenetworklayoutofofflinechannels,expandthecoverageofoverseassalesoutlets,anddriveretailtransformationandthe“DirecttoUsers”capability.Also,toenhancethecompetitivenessofonlinechannels,itwillacceleratethekeycapacitybuildingofoversease-commerce,andimprovecross-borderlogistics,userresearchanddigitalmarketing.Itwillpropelthedigitaltransformationandreformofoverseasbusiness,improvelogisticsandstoragecapacityintheprojectofglobaldigitization,optimizethenetworkofaftersalesserviceandspareparts,andpromotetheoverseasiService3.0digitalafter-salesservicesystem.Itwillstrengthenlocalmanufacturingcoordinationtogreatlyshortenthedeliverycycleandincreaseproductcompetitiveness.Furthermore,itwillpropeltheend-to-endprocesssortingandreconstructioninbusinessscenesofexport,andimproveaccuracy,consistencyandvisualizationofdataflowtomakeprogressinoperationefficiencyofvaluechain.In2022,TLSCwillcontinuetobecustomer-oriented,respondfastertomarketchanges,andachievereasonablerevenuegrowthunderthepremiseofcontinuousimprovementofoperatingquality.DuetotheimpactofCOVID-19,riskssuchasrisingshippingcosts,shortageoftransportationcapacity,risingrawmaterialcosts,andexchangefluctuationwillpersist.TLSCwillproactivelymakeresponseinthesesituationbystrengtheningcommunicationwithkeycustomersandcollaborationinallpartsofvalue
chain,andaccelerateself-reform.Itwillproactivelyexperimentwithnewmethodsandmodelstoimprovemanagementeffectiveness,optimizeorganizationalsystemandinvigorateteams,enhanceretailcapabilitytoincreasemarketshare,andcontinuouslymakeprogressinproductstructuretoincreaseproductaddedvalueandensureprofitability.e.In2022,inlightofdifferentneedsfromdifferentconsumergroups,Mideawillcarryoutlong-termplanning,improveitsmulti-brandmatrix,andrefineitshigh-endbrandportfolio.ThecultivationofCOLMO,thebrandtargetinghigh-endconsumers,isanimportantstrategyoftheGroup.ItwillcontinuetoexplorenewapproachesinR&Dandmarketing,refineitsproductmix,andkeepinnovating.Itistoenhancewhole-housesmartproducts,expanditschannelnetwork,andupgradethescene-basedandsmartexperienceattheretailendtoboostsales.WAHINwillcatertothenewtrendsofyoungpeople,andconstantlyinnovateinproductandmarketingsidetocultivateyoungusersanddeepenthebrandimage.Therefore,WAHINwilllaunchflagshipproductsuitesinallcategoriestoprovideyounguserswiththeexperienceinpersonalizedwhole-houseintelligentscene.Furthermore,WAHINwillcarryoutpromotionalactivitiesarounddifferentcirclesofyoungpeopleatmajormarketingnodessuchasSpringFestival,"618"and"Double11",inwhichvarioustrendingculturesandinnovativeformslikecollegemusicfestival,entertainmentandsports,andanimewillbeincluded.f.Mideawillboostitscompetitivenessinthedigitalerabyimplementingthestrategyof“Digitization&IntelligenceDriven”.ItwillstrengthenthebuildingofMideaasadigitalizedenterprise,improvethedigitaloperationalmethodsandsystems,supporttheintegrationofeverylinkofMidea’svaluechainbydigitalmeans,andcreatevaluebyoptimizingkeyoperatingindicatorssuchascost,efficiencyandrevenuethroughdigitalization.EffortwillalsobemadetorefinetheMideaCloudSalesplatformandpromotedigitalreforminmarketingtosupportthe“TechnologyLeadership”and“DirecttoUsers”strategies.MideawillfurtherbuildandoptimizedigitalizedIndustrialInternetfactoriesandpromotegreen,intelligentmanufacturing.Anditwillstrengthendigitalsupportforthe“GlobalImpact”strategy.Measurestobetakenincludeenhancingthedataplatformanddatagovernancetopromotedata-drivenimprovementinoperations.Beingcustomer-oriented,Mideawillbuildthecapabilityformakingwhole-houseintelligentsolutioninwholeprocessandthecapabilityforwhole-houseintelligentbusinessinaclosedloop,improvesales
abilityinwhole-houseintelligentscenebyconvenientbusinesslinks,continuouslyiterateandreleasewhole-houseintelligentsolutionstosupportdifferentterminalbusinessforms,establishMideawhole-houseintelligentopen-endplatform,andfullysupporttheecologicalcross-industrycooperationwithhomedecorationandhouseholdproductstoprovidecustomersandpartnerswithefficientdigitaltools.Throughpromotinghigh-performanceoperationsinthewholevaluechainwithdata,Mideawillprovideplentifulintelligentlifeexperiencetocustomerswithcooperativepartners.BasedonMidea'syearsofresearchresultsonhealthmechanism,andfunctionsofbigdataandAI,Mideawillprovideuserswithmorepersonalizedandall-roundsolutionsforhealthylife.Combinedwithusers'habitsandbigdata,theintelligentsceneswillberecommendedforuserstopromotethecreationandenjoymentofintelligentscenes.Byintroducingecology-basedentry,MideawillcreatecasesfortheMSmartLifeAppundertheself-builtecologicalbenchmarkandexplorenewexperienceandnewmodeofsmarthomeappliances.Inaddition,MideawilloptimizetheMSmartLifeApptorealizeintelligentdevices'closed-loopcapabilityofnetworkconnectionanddevicecontrol,and,inordertofurtherenhanceuserexperience,Mideawillprovideuserswithfunctionstolinkonlineoroffline.Centeringonkeytechnologybreakthroughs,Mideawillpromotethedevelopmentofsmarthomeappliancesinthedirectionofactiveserviceandrobotization.Itwilldevelopahome-servicerobotwiththefunctionsofwhole-houselinkage,safetyprotectionandlifeassistantin2022.MideawillbuildamodelplatformintheIoTindustryandabusinessplatformofmeta-hometorealizetheconceptofdigitaltwin,andinventamulti-modalperceptionalgorithmtosupportintelligentoriginalapplications.Inthenextstage,itwillupgradetheM.IoToperatingsystem,supporttheM-Smart4.0protocol,provideexecutioncapabilitiesfordevicelocalization,andrealizethedecouplingofdevicesystemfromapplicationstosupportthenewsoftwaredevelopingmodeof"HomeAppliancePlusComputer".Also,MideawilldeepenthecooperationbetweenschoolsandenterprisestoexplorethenextgenerationofIoTarchitectureinsmarthomeappliances,andlayoutmultipledatacentersworldwidetobuildanintegratedglobalIoTcloudplatform.Furthermore,Mideawillrealizetheproductizationofopeninterfaceonplatformanddataopencapabilitiestoempowerindustrysolutionsandimprovetheefficiencyofintelligentscenesdevelopment.Ondatamanagement,Mideawillconsolidatedatatechnologyandpromotebusinessdigitalizationtoestablishastable,efficientanduser-friendlygroupdatacommonlayerthroughadvancedbigdatatechnologiesincludinglarge-scale
offlinecomputing,streamingcomputing,graphicscomputing,machinelearning,andhyper-scalegraphicsneuralnetwork.Itwillalsoupgradecoredataassets,constructthe"UserOne_ID"2.0,andprovideall-rounddatasupportserviceforeachbusinesssystemonthegroundsofasset-baseddata,real-timedata,andservice-baseddata.Additionally,itwillpromotedigitalandintelligenttransformationineachbusiness,strivetocreatethebenchmarkof"manufacturingdataplatform",focusondigitalproductplanninganddigitalproductoperation,improvechannelefficiencybydigitalautomaticstockingandreplenishment,andupgradeinternaldatamonitoringanddecisionsupportplatform.g.MideawilldedicateitselftodrivingnewgrowthinthecoreToBbusiness,constantlyexpandthebusinessboundariesandacceleratebusinessgrowth,andrapidlylayout,enterintoandoccupythemarketofnewbusiness.In2022,focusingonthefieldofnewenergyautomobileparts,Mideawillrealizethecomprehensiveimprovementincustomers,productsandmanufacturingcapabilities,thatis,itwillshifttomassproductionfromprojectacquisitiontocovermoremainstreamcustomers,improvecompetitivenessinthreemajorproductlines(i.e.thermalmanagement,maindriver,auxiliary/intelligentdriving)andothertechnicalfieldstograduallyimplementthedevelopmentplanof"Parts-Components-Systems",andcarryoutmassproductionatthenewbaseinAnqing,AnhuitohelptheproductofcentralmotorinE-bikerapidlyenterintotheEuropeanandAmericanmarkets.Inthefieldofindustrialautomation,Mideawillfurtherimprovethemotioncontrolsolutionsinrobot,semiconductorandconsumerelectronics.Inthefieldofgreenenergy,Mideawilldriveafullofferingofenergystorageproductsandsolutions.Withrespecttoconsumerappliances,Mideawillpromotethemassproductionofvalveproductsandchips,andmakebreakthroughsinsales.h.MideawillbeefupKUKA’slocalizedoperationsinChina,increaseinvestmentinthedevelopmentandapplicationofrobotics,aswellasfosterR&Dinnovationofcorecomponentsandsoftwaresystems.Intermsofmarketing,Mideawillmaintainleadershipintheautosectorandtakeactivestepstoexplorenewareasincludingnewenergy,generalindustrialmanufacturing,electronics,medicalcareandlogistics,services,etc.Concerningoperation,itwillconcentrateonR&D,supplychainmanagement,high-performanceoperationsanddigitalization,amongothers,soastobuildthecorecompetitivenessoftheroboticsandindustrialautomationbusinessinafastermanner.
RisksFacedbytheCompanyandCountermeasures:
A.RiskassociatedwiththeCOVID-19pandemicThefluctuationsandrepeatedoutbreaksoftheCOVID-19pandemicmayimpactthedemand,productionandsalesoftheCompany’sproductsandservices.Pandemiccontrolmeasures,suchaslockdown,socialdistancing,andtravelrestrictions,reducecustomermobility.Otherconsequencesincludelimitedproductionandoperationsinsomeregions,theshutdownofretailoutlets,suspendedcustomeroperations,andincreasedlogisticscosts.AllthesefactorsbringaboutuncertaintiesandchallengestothenormalfunctioningoftheCompanyandthemarketenvironment.B.RiskofmacroeconomyfluctuationThemarketdemandfortheCompany’sconsumerappliances,HVACequipment,industrialrobotics,amongotherproducts,canbeeasilyaffectedbytheeconomicsituationandmacrocontrol.Iftheglobaleconomyencountersaheavyhitandconsumerdemandslowsdowningrowth,thegrowthoftheindustriesinwhichtheCompanyoperates,mayslowdownaccordingly,andasaresult,thismayaffecttheproductsalesofMideaGroup.C.RisksinthefluctuationofproductionfactorsTherawmaterialsrequiredbyMideaGrouptomanufactureitsconsumerappliancesandcorecomponentsprimarilyincludedifferentgradesofcopper,steel,plasticsandaluminum.Atpresent,thehouseholdappliancemanufacturingsectorbelongstoalaborintensiveindustry.Ifthepriceofrawmaterialsfluctuatelargely,orthereisalargefluctuationinthecostofproductionfactors(labor,water,electricity,andland)causedbyachangetothemacroeconomicenvironmentandpolicychange,orthecostreductionresultedfromleanproductionandimprovedefficiency,aswellasthesalepricesofendproductscannotoffsetthetotaleffectsofcostfluctuations,theCompany’sbusinesswillbeinfluencedtosomedegree.D.RiskinglobalassetallocationandoverseasmarketexpansionInternationalizationandglobaloperationsisalong-termstrategicgoaloftheCompany.TheCompany
hasbuiltjoint-venturemanufacturingbasesinmanycountriesaroundtheworld.ProgresshasbeenmadedaybydayregardingtheCompany’soverseasoperationsandnewbusinessexpansion.However,itseffortsinglobalresourceintegrationmaynotbeabletoproduceexpectedsynergies;andinoverseasmarketexpansion,therearestillunpredictableriskssuchaslocalpoliticalandeconomicsituations,significantchangesinlawandregulationsystems,andsharpincreasesinproductioncosts.E.RiskinforeignexchangelossescausedbyexchangeratefluctuationAsMideacarriesonwithitsoverseasexpansionplan,itsoverseassaleshaveaccountedformorethan40%ofthetotalrevenues.AnysharpexchangeratefluctuationmightnotonlybringnegativeeffectsontheoverseasoperationsoftheCompany,butcouldalsoleadtoexchangelossesandincreaseitsfinancecosts.F.MarketrisksbroughtbytradefrictionsandtariffbarriersDuetotheriseofanti-globalizationandtradeprotectionism,Chinawillseemoreuncertaintiesinexportin2022.Thetradebarriersandfrictionsofsomemajormarketswillaffecttheexportbusinessintheshortrun,aswellasmarketingplanningandinvestmentinthemediumandlongrun.Politicalandcompliancerisksarerisingininternationaltrade.Thesecanmainlybeseenoncompulsorysafetycertificates,internationalstandardsandrequirements,andproductqualityandmanagementsystemscertification,energy-savingrequirements,thecallforincreasinglystrictenvironmentalprotectionrequirements,aswellaswithrigorousrequirementsforrecyclinghouseholdapplianceswaste.Tradefrictionscausedbyanti-dumpingmeasuresimplementedbysomecountriesandregionsaggravatetheburdenincostsandexpensesforhouseholdapplianceenterprises,andhavebroughtaboutnewchallengestomarketplanningandbusinessexpansionforenterprises.Infaceofthecomplicatedandchangeableenvironmentandrisksathomeandabroad,MideawillstrictlyfollowtheCompanyLaw,theSecuritiesLaw,theCSRCregulationsandotherapplicablerules,keepimprovingitsgovernancestructureforbettercompliance,andreinforceitsinternalcontrolsystemsoastoeffectivelypreventandcontrolvariousrisksandensureitssustained,steadyandhealthydevelopment.
12.VisitsPaidtotheCompanyforPurposesofResearch,Communication,Interview,etc.intheReportingPeriod
√Applicable□N/A
| Date | Place | Wayofvisit | Typeofvisitor | Visitor | Discussions | Indextomaininquiryinformation |
| 18March2021 | MideaGroupHQ | Byphone | Institution | BOCIM,NewChinaFund,TaipingAssetManagement,PingAnAnnuityInsurance,SWSMUFundManagement,KaiyuanSecurities,FullgoalFund,andCICCSecurities | 1.Midea’snewbusinessstructureandstrategicfocus?2.Midea’splanningandstrategyforoverseassalesinthenearfuture?3.KUKA’slatestconditionandfuturedevelopment?4.WhatarethepositionsforWINONEElevatorandWDM,whichwereacquiredinthepastyear,inMidea’sbusinesslandscapeinthefuture? | LogSheetofInvestorRelationsActivitiesfor18March2021disclosedonwww.cninfo.com.cn |
| 17May2021 | MideaGroupHQ | Byphone | Institution | TheCompany'sinvestors | 1.WhatmajorriskswilltheCompanybeexposedtoinitsfuturedevelopment?2.Sinceintelligenthomeapplianceproductsarethemarkettrend,whataretheCompany'splansforitsdevelopmentinthissection?3.WhataretheCompany'scurrentarrangementsforitsoverseascapacity?WhatproductswillMideamakewithitsnewoverseascapacityinthefuture?4.Againstthebackdropofahikeinthepriceofrawmaterials,howistheincreaseinthepricesofoverseasordersofMideagoing?Willthepriceincreaseaffecttheprofitmargin?5.WhataboutthecurrentoverallperformanceandprogressoftheinternalchannelreformofMidea?6.WhataretheCompany'sprioritieswhenitcontinuouslyexpandsitsdiversifiedToBbusiness?WhataretheexpectationsformiscellaneousToBbusiness?7.IstheoverallKUKAbusinessexposedtotheriskofgoodwillimpairment?8.GiventhatthedevelopmentofsmalldomesticapplianceproductsintheCompany'soverseasOBMbusinessisweak,will | LogSheetofMideaGroupInvestorRelationsActivities20210517disclosedonwww.cninfo.com.cn |
| theCompanyexpanditsglobalsmalldomesticappliancebusinessviacross-bordere-commerce? | ||||||
| 11June2021 | MideaGroupHQ | Byphone | Institution | ShanghaiKuanduAssetManagementCo.,Ltd.,ChinaSecuritiesCo.,Ltd.,ChinaLifeAssetManagementCo.,Ltd.,BocInternational(China)Co.,Ltd.,BankofChinaInvestmentManagementCo.,Ltd.,BankofCommunicationsSchroderFundManagementCo.,Ltd. | 1.WhataboutthesynergyofWINONEElevatorintheaspectofintelligentbuildings?2.WhataboutthecurrentstatusandfutureoutlooksoftheElectromechanicalBusinessGroup?3.WhataboutthebusinessplansofKUKAChina?4.ThoughthepandemicinthelastyearhascontributedtoaleapforwardinthesmalldomesticappliancesectorinChina,thedevelopmentofMidea'ssmalldomesticappliancesisstillweak.Isthereanysolution? | LogSheetofInvestorRelationsActivitiesfor11June2021disclosedonwww.cninfo.com.cn |
| 29June2021 | MideaGroupHQ | Byphone | Institution | AIALifeInsuranceCo.,Ltd.,HuataiSecuritiesCo.,Ltd.,MaxwealthFundManagementCo.,Ltd.,BocSamsungLifeInsuranceCo.Ltd.,PingAnAnnuityInsuranceCompanyofChina,Ltd.,andZhongOuAssetManagementCo.,Ltd. | 1.Giventhatthepandemicinthelastyearhasofferedmanysmalldomesticappliancecompaniesdevelopmentopportunities,howwillMideadevelopitssmalldomesticappliancebusiness?2.Giventhatmoreandmorecompanieshaveannouncedtheirplansinthesectorofalternativefuelvehiclesrecently,whatareMidea'splansforthissector?3.IsMideaaffectedbythecurrentglobalmicrochipshortage?Whatarethesolutions?4.Whatdoyouthinkofthecompetitivelandscapeandmarketperformanceofresidentialairconditioners?5.WhatabouttheCompany'sperformanceatthe6.18ShoppingFestival? | LogSheetofInvestorRelationsActivitiesfor29June2021disclosedonwww.cninfo.com.cn |
| 20July2021 | MideaGroupHQ | Byphone | Institution | ABC-CAFundManagement,NewChinaAssetManagement,GfundManagement,DachengFund, | 1.WhatweretheCompany'sexpectationsforCOLMOin2021?2.Givenmultitudinousplayersinthesmalldomesticappliancemarket,howwillMideacatchupinproductswithweakcompetitiveness?3.Asthe | LogSheetofInvestorRelationsActivitiesfor20July2021disclosedonwww.cninfo.com.c |
| HorizonAsset,Ningquan·Investment,XingyinFundManagement,PengyangAMC,CICCAssetManagement,InvescoGreatWallFundManagement,AnxinAssetManagement,andHuataiSecurities·Self-operated | globalpandemicisgraduallyundercontrol,howwillMideaovercometheinfluenceexertedbytheoperationalresumptionofrivals?4.WhataboutthecurrentstatusandstrategiesforthefuturedevelopmentofKUKA?5.HowistheexportofIndustrialInternetofThings(IIOT)anddigitalsolutionsgoing? | n | ||||
| 30July2021 | MideaGroupHQ | Byphone | Institution | EFund,GFSecurities,ChinaAssetManagement,ChinaUniversal,ChinaSouthernAssetManagement,YinhuaFund,BoseraFunds,HarvestFund,ICBCCreditSuisseAssetManagement,InvescoGreatWallFundManagement,andCITICSecurities | 1.WhataboutthemarketperformanceoftheElectromechanicalBusinessGroup?2.WhydoesMideabegintoincorporatemedicalservicesintoitsdiversifiedbusiness?3.WhatmeasureshasMideatakentoincreasethepercentageoftheOBMbusiness?4.WhataboutthecurrentbusinesspictureandprofitabilityofTLSC?5.WhataboutthebusinessdevelopmentoftheHVAC&BuildingTechnologiesDivision? | MideaGroup:LogSheetofInvestorRelationsActivitiesfor30July2021disclosedonwww.cninfo.com.cn |
| 26September2021 | MideaGroupHQ | Byphone | Institution | CITICSecurities,CICCSecurities,BOCOMSchroders,PenghuaFund,ChinaGalaxySecurities,CITICAssetManagement,ChinaAssetManagement,UBSSDIC,FirstStateCindaFund,HuaAnFund,CaitongSecurities,andQianhaiAllianceAssetManagement | 1.WhataboutthechannelreformofMidea?2.WhataboutMidea'sprogressintheToBsector?3.WhatabouttheperformanceofTLSCinthefirsthalfoftheyear?4.WhydoesMideachangetheHVAC&BuildingTechnologiesDivisionintotheBuildingTechnologiesDivision?5.Concerningthe"carbonemissionpeak"and"carbonneutrality"goalsreleasedbythestateinSeptemberlastyear,whatarethearrangementsofMideaforthehomeappliancessector? | 000333MideaGroupResearchCommunicationInformation20210926disclosedonwww.cninfo.com.cn |
| 16November2021 | MideaGroupHQ | Byphone | Institution | 3wFundManagementLlc,ApaHCapitalManagementLimited,ApgInvestmentsAsiaLimited,BaringAssetanagement(Asia)Limited,etc. | 1.WhatarethearrangementsofMideaforthemedicalsector?2.CouldyoupleaseintroducethenewcriteriaforintelligenthomeappliancegradingreleasedbyMidea?3.WhatabouttheprogressthatMideahasachievedintheInternetofThings("IoT")?4.Whatisthe"meta-Home"conceptputforwardbyMidea? | LogSheetofInvestorRelationsActivitiesfor16November2021disclosedonwww.cninfo.com.cn |
| 29November2021 | MideaGroupHQ | Byphone | Institution | HaoAdvisorsManagementLimited,LMRMasterFundLimited,MillenniumCapitalManagement(HongKong)Limited,etc. | 1.CouldyoupleaseintroduceMidea'sunderstandingofthewhole-houseappliancescenario?2.WhataboutthecooperationbetweenM.IoTanditsecologicalpartners?3.CouldyoupleaseintroducetheGreenStrategyreleasedbyMideainthetechnologymonthofthisyear? | LogSheetofInvestorRelationsActivitiesfor29November2021disclosedonwww.cninfo.com.cn |
| 16December2021 | MideaGroupHQ | Byphone | Institution | HuashangFund,MiraeAssetHuachenFundManagement,ChinaSouthernAssetManagement,GuosenSecurities,GuotaiJunanInternational,EssenceSecurities,PingAnFundManagement,FullgoalFund,andYinhuaFund | 1.WhatabouttheprogressintheapplicationofMidea'sbuildingtechnologiestodifferentapplicationscenarios?2.WhataboutthedevelopmentofAnntoatpresent?3.AstheglobalshippingstatusisstillnotpositiveduetotheimpactsoftheCOVID-19,whatmeasureshastheCompanytakentoensurethattheexportbusinessiscarriedoutasusual?4.ConcerningthenewbrandofbuildingcontrolintroducedbytheBuildingTechnologiesDivisionoftheCompany,whatisitspositioning? | LogSheetofInvestorRelationsActivitiesfor16December2021disclosedonwww.cninfo.com.cn |
SectionIVCorporateGovernance
1.BasicSituationofCorporateGovernanceTheCompanyisconstantlyimprovingitscorporategovernanceinstrictaccordancewiththeCompanyLaw,theSecuritiesLawandtherelevantregulationsoftheChinaSecuritiesRegulatoryCommission.TherearefourspecialcommitteesundertheBoard,namelytheStrategyCommittee,theAuditingCommittee,theNominationCommitteeaswellastheRemunerationandAppraisalCommittee.TheyweredesignedtoprovideconsultationandadvicetotheBoardandvalidatetheprofessionalizationandefficiencyofdiscussionsanddecision-making.TheCompanyhasestablishedclearrulesofprocedureforitsshareholders'meeting,boardofdirectors,SupervisoryCommitteeandspecialcommitteesundertheboard,aswellastheWorkRulesforCompanySecretary.IthasalsoestablishedasetofstandarddocumentsincludingInformationDisclosureManagementSystem,FundsRaisingManagementSystem,ConnectedTransactionManagementSystem,WealthManagementEntrustmentManagementSystem,InsiderRegistrationSystem,ExternalGuarantyDecision-makingSystem,ForeignInvestmentManagementSystem,andManagementSystemforFinanceFlowwithConnectedParties,InternalAuditingSystem.Theshareholders'meeting,theBoardofDirectors,theSupervisoryCommitteeandoperationsmanagementdepartmentshaveclearauthorityandresponsibility.Eachperformsitsownfunctionsandmaintainsitsstabilityeffectively.Theirscientificdecision-makingandcoordinatedoperationshavelaidafirmfoundationforthesustained,healthyandsteadydevelopmentoftheCompany.TheCompanyhasalsolaunchedcoremanagementteamshareholdingplansandequityincentiveplansforcoreresearch,qualitycontrol,technical,productionandmanagementstaff,whichhelpstodevelopasoundshareholdingstructureforthefuturegrowthoftheCompany.In2021,theCompanywonthefollowinghonors:
No.288of“FortuneGlobal500”;No.183of“TheWorld’s2000LargestPublicCompanies”releasedbytheForbes;No.33ofthe“BrandZ?2021Top100MostValuableChineseBrands”jointly
releasedbyWPPandKantarMillwardBrown;No.186ofthe“2022BrandFinanceGlobal500”;andtheRoundTableAwardattheSeventeenth“GoldPrizeofRoundTable”ofChineseBoardsofListedCompanyorganizedbytheDirectors&Boardsmagazine.Anyincompliancewiththeapplicablelaws,administrativeregulations,andregulationsissuedbytheCSRCgoverningthegovernanceoflistedcompanies
□Yes√NoNosuchcasesintheReportingPeriod.
2.Independenceofassets,personnel,finance,organizationsandbusinesseswhichareseparatefromthecontrollingshareholderandtheactualcontrollerTheCompanyistotallyautonomouswithrespecttobusiness,personnel,assets,organizations,andfinancefromMideaHoldingCo.,Ltd.,thecontrollingshareholderoftheCompany,thereforemaintainingintegrityandindependencyinbothbusinessandoperations.
2.1Businessindependence:
TheCompanyhasacompleteindustrialchainforitsmanufacturingbusiness,acompletelydistinctpurchaseandsalessystem,andanindependentandcomprehensivebusinessoperationcapability.
2.2Personnelindependence:
TheCompanyiscompletelyautonomousfromthecontrollingshareholderregardingitspersonnel.Thelabor,personnelandremunerationmanagementofthecompanyaretotallyunrelated.AllseniormanagementmembersreceivedremunerationfromtheCompanyexceptthosethatholdonlyadirector’spositioninthecontrollingshareholder.
2.3Assetintegrity:
TheCompanyhasitsownindependentproductionsystemaswellasancillaryproductionsystemsandfacilities.Intangibleassetssuchasindustrialrights,trademarkownershipandnon-patenttechnologyareheldbytheCompany.
2.4Organizationindependence:
TheCompanyhassetupanindependentorganizationalstructurewhichmaintainsitsindependentoperation.TheCompanyhastherighttoappointorremoveanypersonnelsothereisnooverlappingwiththecontrollingshareholder.
2.5Financialindependence:
TheCompany'sfinancialmanagementisindependentfromthecontrollingshareholder.TheCompanyhasitsownaccountingdepartment,accountingsystem,financialmanagementsystem,andbankaccountsandindependentlymakesfinancialdecisionsandpaysitsowntaxesaccordingtorelevantlaws.
3.HorizontalCompetition
□Applicable√N/A
4.AnnualMeetingofShareholdersandSpecialMeetingsofShareholdersConvenedduringtheReportingPeriod
4.1MeetingsofshareholdersconvenedduringtheReportingPeriod
| Meeting | Type | Investorparticipationratio | Conveneddate | Disclosuredate | Disclosureindex |
| 2021FirstSpecialMeetingofShareholders | Specialmeetingofshareholders | 55.5957% | 25January2021 | 26January2021 | AnnouncementNo.2021-007,disclosedonwww.cninfo.com.cn |
| 2020AnnualMeetingofShareholders | Annualmeetingofshareholders | 53.4445% | 21May2021 | 22May2021 | AnnouncementNo.2021-045,disclosedonwww.cninfo.com.cn |
| 2021SecondSpecialMeetingofShareholders | Specialmeetingofshareholders | 57.7457% | 25June2021 | 26June2021 | AnnouncementNo.2021-076,disclosedonwww.cninfo.com.cn |
| 2021ThirdSpecialMeetingofShareholders | Specialmeetingofshareholders | 60.3476% | 17September2021 | 18September2021 | AnnouncementNo.2021-104,disclosedonwww.cninfo.com.cn |
4.2Specialmeetingsofshareholdersconvenedattherequestofpreferenceshareholderswithresumedvotingrights
□Applicable√N/A
5.Directors,SupervisorsandSeniorManagement
5.1Generalinformation
| Name | Officetitle | Incumbent/Former | Gender | Age | Startingdateoftenure | Endingdateoftenure | Sharesheldattheyear-begin(share) | SharesincreasedattheReportingPeriod(share) | SharesdecreasedattheReportingPeriod(share) | Otherincrease/decrease(share) | Sharesheldattheperiod-end(share) | Reasonforsharechanges |
| FangHongbo | ChairmanoftheBoardandCEO | Incumbent | Male | 54 | 2012-8-25 | 2024-9-16 | 116,990,492 | 0 | 116,990,492 | |||
| HeJianfeng | Director | Incumbent | Male | 54 | 2012-8-25 | 2024-9-16 | 0 | 0 | 0 | |||
| YinBitong | DirectorandVicePresident | Incumbent | Male | 53 | 2016-12-16 | 2024-9-16 | 2,109,655 | 0 | 2,109,655 | |||
| GuYanmin | DirectorandVicePresident | Incumbent | Male | 58 | 2014-4-21 | 2024-9-16 | 0 | 0 | 0 | |||
| WangJianguo | DirectorandVicePresident | Incumbent | Male | 45 | 2021-9-17 | 2024-9-16 | 0 | 0 | 0 | |||
| YuGang | Director | Incumbent | Male | 62 | 2018-9-26 | 2024-9-16 | 0 | 0 | 0 | |||
| XueYunkui | IndependentDirector | Incumbent | Male | 57 | 2018-9-26 | 2024-9-16 | 179,914 | 0 | 179,914 | |||
| GuanQingyou | IndependentDirector | Incumbent | Male | 44 | 2018-9-26 | 2024-9-16 | 0 | 0 | 0 |
| HanJian | IndependentDirector | Incumbent | Female | 49 | 2018-9-26 | 2024-9-16 | 0 | 0 | 0 | |||
| DongWentao | ChairmanoftheSupervisoryCommittee | Incumbent | Male | 36 | 2020-10-16 | 2024-9-16 | 0 | 0 | 0 | |||
| ZhaoJun | Supervisor | Incumbent | Male | 46 | 2014-4-21 | 2024-9-16 | 0 | 0 | 0 | |||
| LiangHuiming | EmployeeSupervisor | Incumbent | Female | 38 | 2017-3-30 | 2024-9-16 | 0 | 0 | 0 | |||
| ZhangXiaoyi | VicePresident | Incumbent | Male | 48 | 2018-4-23 | 2024-9-16 | 516,575 | 0 | 516,575 | |||
| HuZiqiang | VicePresident | Incumbent | Male | 64 | 2014-8-18 | 2024-9-16 | 400,000 | 0 | 400,000 | |||
| WangJinliang | VicePresident | Incumbent | Male | 54 | 2014-8-18 | 2024-9-16 | 240,000 | 100,000 | 340,000 | 100,000restrictedsharesweregranted | ||
| LiGuolin | VicePresident | Incumbent | Male | 45 | 2020-7-3 | 2024-9-16 | 265,000 | 35,700 | 100,000 | 400,700 | 100,000restrictedsharesweregrantedand35,700shareswerepurchasedbywayofcentralizedbidding | |
| FuYongjun | VicePresident | Incumbent | Male | 53 | 2021-9-17 | 2024-9-16 | 200,000 | 0 | 200,000 | |||
| GuanJinwei | VicePresident | Incumbent | Male | 42 | 2021-9-17 | 2024-9-16 | 535,000 | 0 | 535,000 | |||
| ZhongZheng | CFOandDirectorofFinance | Incumbent | Female | 40 | 2022-2-222019-3-22 | 2024-9-16 | 211,152 | 65,000 | 276,152 | 65,000sharesofequityincentiveswereexercised | ||
| JiangPeng | BoardSecretary | Incumbent | Male | 48 | 2013-10-30 | 2024-9-16 | 358,600 | 80,000 | 438,600 | 80,000restrictedsharesweregranted |
| CaiWeiding | CFO | Former | Male | 40 | 2021-4-19 | 2022-1-29 | 0 | 0 | 0 | ||
| XiaoMingguang | VicePresident | Former | Male | 51 | 2019-3-22 | 2021-4-30 | 460,000 | 185,000 | 645,000 | 80,000restrictedsharesweregrantedand105,000shareoptionswereexercised | |
| LiuMin | VicePresident | Former | Female | 44 | 2020-10-16 | 2021-6-1 | 0 | 0 | 0 | ||
| HelmutZodl | CFO | Former | Male | 49 | 2019-10-22 | 2021-1-25 | 0 | 0 | 0 |
Indicatewhetheranydirector,supervisororseniormanagementresignedbeforetheexpiryoftheirtenuresduringtheReportingPeriod.
√Yes□NoChangesindirectors,supervisorsandseniormanagement
√Applicable□N/A
| Name | Officetitle | Typeofchange | Date | Reason |
| HelmutZodl | CFO | Former | 2021-1-25 | Personalreason |
| CaiWeiding | CFO | Appointed | 2021-4-19 | Personalreason |
| XiaoMingguang | VicePresident | Former | 2021-4-30 | Personalreason |
| LiuMin | VicePresident | Former | 2021-6-1 | Personalreason |
| WangJianguo | Director | Elected | 2021-9-17 | - |
| FuYongjun | VicePresident | Appointed | 2021-9-17 | - |
| GuanJinwei | VicePresident | Appointed | 2021-9-17 | - |
5.2BriefbiographiesProfessionalbackgrounds,mainworkexperienceandcurrentresponsibilitiesintheCompanyoftheincumbentdirectors,supervisorsandseniormanagementMr.FangHongbo,male,holderofaMaster'sdegree,istheChairmanandCEOofMideaGroup.HejoinedMideain1992andpreviouslyservedastheGeneralManagerofMideaAir-ConditioningBusinessUnit,CEOofMideaRefrigerationElectricAppliancesGroup,ChairmanandCEOofGDMideaHoldingCo.,Ltd.Mr.HeJianfeng,male,holderofaBachelor'sdegree,isaDirectorofMideaGroup.HeisalsotheChairmanoftheBoardandPresidentofInforeGroupCo.,Ltd.Mr.YinBitong,male,aMaster'sgraduate,joinedMideain1999andservedasGMAssistantandMarketingDirectoroftheResidentialAirConditioningDivisionaswellasGMandDirectorofWuxiLittleSwanCo.Ltd.HeisnowaDirectorandVicePresidentofMideaGroup,aCo-PresidentoftheSmartHomeBusinessGroup,andthePresidentofMideaChina.Mr.GuYanmin,male,holderofaDoctoraldegree,joinedMideain2000andhasfunctionedasthe
HeadofPlanning&Investment,HeadofOverseasStrategy&Development,VicePresidentandHeadofOverseasBusinessDevelopmentofMideaAir-Conditioning&RefrigerationGroup,HeadofOverseasStrategyofMideaGroup.CurrentlyheisaDirectorandVicePresidentofMideaGroup,thePresidentoftheRobotics&AutomationDivision,aswellastheChairmanoftheSupervisoryCommitteeofKUKA.Mr.WangJianguo,male,aMaster’sdegreeholder,joinedMideain1999.HewasoncetheDirectoroftheSupplyChainManagementDepartmentofMideaGroup’sResidentialAirConditionerDivision,theDirectoroftheAdministrationandHumanResourcesDepartmentofMideaGroup,andtheGeneralManagerofMideaGroup’sRefrigerationDivision.Currently,heisaDirectorandVicePresidentofMideaGroup,aCo-PresidentoftheSmartHomeBusinessGroup,andthePresidentofMideaInternationalBusiness,inadditiontobeinginchargeoftheTLSCDivision,theinternationallogisticsplatformandlegalaffairs.Mr.YuGang,male,holderofaDoctoraldegreegivenbytheWhartonSchooloftheUniversityofPennsylvania,istheHonoraryChairmanandaco-founderofYHD.COM.HeonceservedastheGlobalSupplyChainVicePresidentofAmazonandtheGlobalProcurementVicePresidentofDell.HeisnowtheExecutiveChairmanoftheBoardofDirectorsandaco-founderof111,Inc.,aswellasaDirectorofMideaGroup.Mr.XueYunkui,male,isaholderofaDoctoraldegreegivenbytheSouthwestUniversityandaholderofaPost-DoctoraldegreegivenbytheShanghaiUniversityofFinanceandEconomics.HeusedtobetheassociatedeanandadoctoralsupervisorattheSchoolofAccountancyofShanghaiUniversityofFinanceandEconomics,aFoundingVicePresidentofShanghaiNationalAccountingInstituteandCheungKongGraduateSchoolofBusiness,theSecretary-GeneralofChinaAssociationofAccountingProfessors,aViceChairmanoftheSteeringCommitteeoftheNationalAccountingInstituteundertheMinistryofFinance,etc.HeisnowanaccountingprofessorofCheungKongGraduateSchoolofBusiness,andanIndependentDirectorofMideaGroup.Mr.GuanQingyou,male,obtainedaPhDdegreeineconomicsfromChineseAcademyofSocialSciences("CASS")andPost-doctoraldegreefromTsinghuaUniversity.HepreviouslyworkedasProgramDirectorattheInstituteforContemporaryChinaStudies,TsinghuaUniversity,DivisionChiefof
themainofficeofChinaNationalOffshoreOilCorporation,VicePresidentofMinshengSecuritiesCo.,Ltd.,andHeadofMinshengSecuritiesResearchInstitute.OtherpositionscurrentlyheldbyhimincludeDeanofRealityInstituteofAdvancedFinance,professoratSchoolofEconomics,HainanUniversity,ChairmanofChinaInstituteofPrivateSector,DirectorofChinaSocietyofEconomicReform,memberofAPECChinaBusinessCouncilDigitalEconomyCommittee,ChiefEconomicAdvisorofChinaFortuneSecurities,independentdirectorofMideaGroupCo.Ltd.,NanhuaFuturesCo.,Ltd.,BeijingYingpuTechnologyCo.,Ltd.,HangzhouHikvisionDIGITALTechnologyCo.,Ltd.,ShandongHigh-speedRoad&BridgeGroupCo.,Ltd.,andShaanxiInternationalTrustCo.,Ltd.,andmemberoftheFiscalReformandDevelopmentThinkTankundertheMinistryofFinance,AcademicCommitteeofChinaCenterforUrbanDevelopmentundertheNationalDevelopmentandReformCommission,andExpertAdvisoryCommitteeonIndustrialEconomicOperationundertheMinistryofIndustryandInformationTechnology("MIIT").Ms.HanJian,female,holderofaDoctoraldegreegivenbytheCornellUniversity,isaprofessorofmanagementinChinaEuropeInternationalBusinessSchool,aspecialistoftheWorldEconomicForum,aswellasanIndependentDirectorofMideaGroup.Mr.DongWentao,male,aMaster'sdegreegraduate,joinedMideain2016.HeusedtoworkinCIMCandZTE.AndheonceservedintheLegalAffairsDepartment,theInvestorRelationsDepartment,etc.ofMideaGroup,withover10yearsofexperienceinlegalaffairs,riskcontrol,marketvaluemanagement,capitaloperation,etc.Mr.ZhaoJun,male,aMaster'sdegreegraduate,joinedMideain2000andhasfunctionedastheDirectorandtheCFOofGDMideaHoldingCo.,Ltd.HeisnowaSupervisorofMideaGroup,theExecutivePresidentinMideaHoldingCo.,Ltd.,aswellasaNon-ExecutiveDirectorofMideaRealEstateHoldingLimited.Ms.LiangHuiming,female,isaholderofaBachelor’sdegree.JoiningMideain2007,sheusedtoserveastheChiefBusinessAdministrationCommissionerinMideaGroup’sAdministrationandHumanResourcesDepartment.SheisnowtheEmployeeSupervisorofMideaGroup.
Mr.ZhangXiaoyi,male,isaholderofaMaster’sdegree.JoiningMideaGroupin2010,heusedtoserveastheheadoftheoverseasprocessITsystem,theheadofthesupplychainsystem,andtheITDirectorofMideaGroup,etc.HeisnowaVicePresidentandtheChiefInformationOfficerofMideaGroup.Mr.HuZiqiang,male,holderofaDoctoraldegree,joinedMideain2012,andhasformerlyworkedforGEandSamsungandasaViceGMinWuxiLittleSwanCo.,Ltd.AtpresentheisaVicePresidentandtheCTOofMideaGroup,inadditiontobeingtheChairmanoftheBoardofBeijingWandongMedicalTechnologyCo.,Ltd.,alistedcompanysubordinatetoMideaGroup.Mr.WangJinliang,male,holderofaMaster’sdegree,joinedMideain1995andpreviouslyworkedastheVicePresidentofChinaMarketinginMideaGroup,andwasGDMideaHolding’sVicePresidentandMarketingHead.HeisnowaVicePresidentofMideaGroup.Mr.LiGuolin,male,holderofaMaster’sdegree,joinedMideain1998andpreviouslyworkedasaVicePresidentoftheResidentialAirConditionerDivision,andthePresidentoftheSmallDomesticApplianceDivisionofMideaGroup.HeisnowaVicePresidentandtheDirectorofQualityandIntelligentManufacturingofMideaGroup.Mr.FuYongjun,male,holderofaMaster’sdegree,joinedMideain1999andpreviouslyworkedastheGeneralManagerofMideaEnvironmentAppliancesDivision,theGeneralManagerofMideaComponentDivision,andthePresidentofMideaElectromechanicalDivision.HeisnowaVicePresident,andthePresidentoftheIndustrialTechnologyBusinessGroup,ofMideaGroup.Mr.GuanJinwei,male,holderofaMaster’sdegree,joinedMideain2002andpreviouslyworkedastheDeputyGeneralManageroftheCommercialAirConditionerDivisionandtheGeneralManagerofanoverseasmarketingcompanyofMideaGroup,aswellasanAssistanttothePresidentofMideaInternationalandtheGeneralManagerfortheASEANregion,amongothers.HeisnowaVicePresident,andthePresidentoftheBuildingTechnologiesDivision,ofMideaGroup.Ms.ZhongZheng,female,aholderofaMaster’sdegree,joinedMideain2002.SheoncewastheDirectorofFinanceoftheFinancialCenterandtheComponentDivision,aswellastheAuditDirectorof
MideaGroup,etc.SheisnowtheCFOandDirectorofFinanceofMideaGroup.Mr.JiangPeng,male,holderofaMaster’sdegree,joinedMideain2007andusedtobetheRepresentativeforSecuritiesAffairsandBoardSecretaryforGDMideaHoldingCo.,Ltd.HeisnowtheBoardSecretaryandDirectorofInvestorRelationsofMideaGroup.Postsheldinshareholdingentities
√Applicable□N/A
| Name | Shareholdingentity | Position | Beginningdateofofficeterm | Endingdateofofficeterm | Allowancefromtheshareholdingentity |
| HeJianfeng | MideaHoldingCo.,Ltd. | President | 2016-01 | - | No |
| ZhaoJun | MideaHoldingCo.,Ltd. | ExecutivePresident | 2020-03 | - | Yes |
| Note | N/A | ||||
Postsheldinotherentities
√Applicable□N/A
| Name | Otherentity | Position | Beginningdateofofficeterm | Endingdateofofficeterm | Allowancefromtheentity |
| HeJianfeng | InforeGroupCo.,Ltd. | ChairmanoftheBoardandPresident | 1995-06 | - | Yes |
| GuYanmin | KUKA | ChairmanoftheSupervisoryCommittee | 2017-01 | 2024-06 | Yes |
| YuGang | 111,Inc. | ExecutiveChairmanoftheBoard | 2011-04 | - | Yes |
| XueYunkui | OuyeelCo.,Ltd. | IndependentDirector | 2019-08 | 2022-08 | Yes |
| ZhuhaiWandaCommercialManagementGroupCo.,Ltd. | IndependentDirector | 2021-03 | 2024-03 | Yes | |
| BankofShanghaiCo.,Ltd. | IndependentDirector | 2021-01 | 2024-01 | Yes | |
| HinovaPharmaceuticalsInc. | IndependentDirector | 2020-09 | 2023-09 | Yes | |
| GuanQingyou | BeijingRushiResearchInformationConsultingServiceCo.,Ltd. | ChairmanoftheBoard | 2017-12 | - | Yes |
| ShaanxiInternationalTrustCo.,Ltd. | IndependentDirector | 2019-07 | 2022-07 | Yes | ||
| NanhuaFuturesCo.,Ltd. | IndependentDirector | 2019-02 | 2025-02 | Yes | ||
| ShandongHi-SpeedRoad&BridgeCo.,Ltd. | IndependentDirector | 2020-06 | 2023-06 | Yes | ||
| HangzhouHikvisionDigitalTechnologyCo.,Ltd. | IndependentDirector | 2021-03 | 2024-03 | Yes | ||
| Note | N/A | |||||
Punishmentsimposedintherecentthreeyearsbythesecuritiesregulatorsontheincumbentdirectors,supervisorsandseniormanagementaswellasthosewholeftintheReportingPeriod
□Applicable√N/A
5.3Remunerationofdirectors,supervisorsandseniormanagementThefollowingdescribesthedecision-makingprocedures,groundsonwhichdecisionsaremadeandactualremunerationpaymentofdirectors,supervisorsandseniormanagement.Thedecision-makingremunerationprocedurefordirectors,supervisorsandseniormanagement:TheremunerationisproposedbytheBoardRemunerationCommitteeandapprovedbytheBoard.Decisionsaremadefinallyafterthedeliberationofshareholders'meeting.Theremunerationofdirectors,supervisorsandseniormanagementconsistofbasicannualpaymentsandperformance-relatedannualpaymentsaccordingtotheSalaryManagementSystemfortheDirectors,SupervisorsandSeniorManagementwhichhasbeenapprovedbytheCompany.Basicpaymentisdeterminedbasedontheresponsibility,riskandpressureofdirectors,supervisorsandseniormanagement.Thebasicannualpaymentremainsstable.Performance-relatedannualpaymentisrelatedtothecompletionrateofcorporateprofit,theassessmentresultoftargetresponsibilitysystemandtheperformanceevaluationstructureoftheirowndepartment.Theremunerationsystemfordirectors,supervisorsandseniormanagementservestheCompany'sstrategy,andshallbeadjustedwiththeCompany'soperatingconditionsinordertomeettheCompany’sdevelopmentrequirements.Thebasisforadjustingtheremunerationofdirectors,supervisorsandseniormanagementareasfollows:
a.Wagegrowthintheindustryb.Inflationc.Corporateearningsd.Organizationalstructureadjustmente.Individualadjustmentduetoachangeinposition
Remunerationofdirectors,supervisorsandseniormanagementduringtheReportingPeriod
Unit:RMB'000
| Name | Position | Gender | Age | Incumbent/Former | Totalbefore-taxremunerationfromtheCompany | RemunerationfromrelatedpartiesoftheCompany |
| FangHongbo | ChairmanoftheBoardandCEO | Male | 54 | Incumbent | 11,060 | |
| HeJianfeng | Director | Male | 54 | Incumbent | Yes | |
| YinBitong | DirectorandVicePresident | Male | 53 | Incumbent | 7,280 | |
| GuYanmin | DirectorandVicePresident | Male | 58 | Incumbent | 5,640 | |
| WangJianguo | DirectorandVicePresident | Male | 45 | Incumbent | 4,640 | |
| YuGang | Director | Male | 62 | Incumbent | 450 | |
| XueYunkui | IndependentDirector | Male | 57 | Incumbent | 450 | |
| GuanQingyou | IndependentDirector | Male | 44 | Incumbent | 450 | |
| HanJian | IndependentDirector | Female | 49 | Incumbent | 450 | |
| DongWentao | ChairmanoftheSupervisoryCommittee | Male | 36 | Incumbent | 800 | |
| ZhaoJun | Supervisor | Male | 46 | Incumbent | Yes | |
| LiangHuiming | EmployeeSupervisor | Female | 38 | Incumbent | 260 | |
| ZhangXiaoyi | VicePresident | Male | 48 | Incumbent | 5,810 | |
| HuZiqiang | VicePresident | Male | 64 | Incumbent | 3,710 | |
| WangJinliang | VicePresident | Male | 54 | Incumbent | 3,810 |
| LiGuolin | VicePresident | Male | 45 | Incumbent | 3,940 | |
| FuYongjun | VicePresident | Male | 53 | Incumbent | 6,780 | |
| GuanJinwei | VicePresident | Male | 42 | Incumbent | 6,260 | |
| ZhongZheng | CFOandDirectorofFinance | Female | 40 | Incumbent | 3,610 | |
| JiangPeng | BoardSecretary | Male | 48 | Incumbent | 2,380 | |
| CaiWeiding | CFO | Male | 40 | Former | 7,550 | |
| XiaoMingguang | VicePresident | Male | 51 | Former | 3,900 | |
| LiuMin | VicePresident | Female | 44 | Former | 3,760 | |
| HelmutZodl | CFO | Male | 49 | Former | 540 | |
| Total | -- | -- | -- | -- | 83,530 | -- |
6.ActivitiesofDirectorsduringtheReportingPeriod
6.1BoardmeetingsconvenedduringtheReportingPeriod
| Meeting | Conveneddate | Disclosuredate | Resolutions |
| The28thMeetingoftheThirdBoardofDirectors | 5January2021 | 6January2021 | SeetheAnnouncementonResolutionsofthe28thMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-001),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated6January2021 |
| The29thMeetingoftheThirdBoardofDirectors | 23February2021 | 24February2021 | SeetheAnnouncementonResolutionsofthe29thMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-010),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated24February2021 |
| The30thMeetingoftheThirdBoardofDirectors | 29March2021 | 30March2021 | SeetheAnnouncementonResolutionsofthe30thMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-017),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated30March2021 |
| The31stMeetingoftheThirdBoardofDirectors | 19April2021 | 20April2021 | SeetheAnnouncementonResolutionsofthe31stMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-021),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghai |
| SecuritiesNewsdated20April2021 | |||
| The32ndMeetingoftheThirdBoardofDirectors | 23April2021 | 30April2021 | SeetheAnnouncementonResolutionsofthe32ndMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-033),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated30April2021 |
| The33rdMeetingoftheThirdBoardofDirectors | 9May2021 | 10May2021 | SeetheAnnouncementonResolutionsofthe33rdMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-039),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated10May2021 |
| The34thMeetingoftheThirdBoardofDirectors | 4June2021 | 5June2021 | SeetheAnnouncementonResolutionsofthe34thMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-056),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated5June2021 |
| The35thMeetingoftheThirdBoardofDirectors | 30August2021 | 31August2021 | SeetheAnnouncementonResolutionsofthe35thMeetingoftheThirdBoardofDirectors(AnnouncementNo.2021-096),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated31August2021 |
| TheFirstMeetingoftheFourthBoardofDirectors | 17September2021 | 18September2021 | SeetheAnnouncementonResolutionsoftheFirstMeetingoftheFourthBoardofDirectors(AnnouncementNo.2021-105),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated18September2021 |
| TheSecondMeetingoftheFourthBoardofDirectors | 29October2021 | - | TheInterimReportfortheThirdQuarter2021wasapprovedwitheightaffirmativevotes,0negativenotesand0abstentions. |
| TheThirdMeetingoftheFourthBoardofDirectors | 24December2021 | 27December2021 | SeetheAnnouncementonResolutionsoftheThirdMeetingoftheFourthBoardofDirectors(AnnouncementNo.2021-113),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated27December2021 |
| TheFourthMeetingoftheFourthBoardof | 29December2021 | 30December2021 | SeetheAnnouncementonResolutionsoftheFourthMeetingoftheFourthBoardofDirectors |
| Directors | (AnnouncementNo.2021-118),whichhasbeendisclosedonhttp://www.cninfo.com.cn,ChinaSecuritiesJournal,SecuritiesTimes,andShanghaiSecuritiesNewsdated30December2021 |
6.2AttendanceofdirectorsinBoardmeetingsandmeetingsofshareholders
| AttendanceofdirectorsinBoardmeetingsandmeetingsofshareholders | |||||||
| Director | PresencedueatBoardmeetingsintheReportingPeriod(times) | PresenceatBoardmeetingsonsite(times) | PresenceatBoardmeetingsbytelecommunication(times) | PresenceatBoardmeetingsthroughaproxy(times) | AbsencefromBoardmeetings(times) | AbsencefromBoardmeetingsfortwoconsecutivetimes | Presenceatmeetingsofshareholders(times) |
| FangHongbo | 12 | 1 | 11 | 0 | 0 | No | 3 |
| HeJianfeng | 12 | 1 | 11 | 0 | 0 | No | 0 |
| YinBitong | 12 | 0 | 12 | 0 | 0 | No | 0 |
| GuYanmin | 12 | 1 | 11 | 0 | 0 | No | 1 |
| WangJianguo | 4 | 0 | 4 | 0 | 0 | No | 0 |
| YuGang | 12 | 1 | 11 | 0 | 0 | No | 0 |
| XueYunkui | 12 | 1 | 11 | 0 | 0 | No | 0 |
| GuanQingyou | 12 | 1 | 11 | 0 | 0 | No | 0 |
| HanJian | 12 | 1 | 11 | 0 | 0 | No | 0 |
6.3ObjectionsfromdirectorsonrelatedissuesoftheCompanyWerethereanyobjectionsonrelatedissuesoftheCompanyfromdirectors
□Yes√No
6.4OtherinformationabouttheactivitiesofdirectorsWerethereanysuggestionsfromdirectorsadoptedbytheCompany
√Yes□NoDuringtheReportingPeriod,inlinewiththeCompanyLaw,theSecuritiesLaw,theRulesforStockListingofShenzhenStockExchange,andotherrelevantlawsandregulations,aswellastheArticlesofAssociation,andtheRulesofProcedureoftheBoardofDirectors,directorsoftheCompanyactivelypaidattentiontotheCompany'sproduction,operation,financialposition,andtheeffectsresultingfrom
thechangesintheeconomicstatusontheCompany,vettedmiscellaneousinformationreportsprovidedbytheCompanyinatimelymanner,andvoicedopinionsandexercisedtheirpowerattheBoardofDirectors.Inaddition,theysupervisedandcheckedtheinformationdisclosureoftheCompanyandfulfilledthedutiesofdirectorsfaithfullyandconscientiously.BasedontheCompany'sreality,theyputforwardrelevantopinionsandsuggestionsaboutcorporategovernanceandoperatingdecisions,aswellassupervisedandpromotedtheexecutionandimplementationoftheresolutionsoftheBoardofDirectorstoensurescientific,timely,andefficientdecision-makingandsafeguardthelegitimaterightsandinterestsoftheCompanyandallshareholders.
7.ActivitiesofSpecialCommitteesundertheBoardofDirectorsduringtheReportingPeriod
| Committee | Members | Numberofmeetingsconvened | Conveneddate | Topics | Substantialopinionandrecommendations | Otherinformation |
| AuditCommittee | XueYunkui,GuanQingyou,HanJian,andYuGang | 3 | 2021-4-27 | Thefollowingproposalswereapproved:The2020FinalAccountReport,TheSummaryReportoftheAuditCommitteeonthe2020AnnualAudit,The2020AnnualReportandItsSummary,TheInterimReportfortheFirstQuarter2021,TheProposalonRe-appointmentofIndependentAuditorforInternalControlfor2020,andTheProposalonRe-appointmentofCPAFirm. | - | - |
| 2021-8-30 | TheSemi-AnnualReport2021andItsSummarywasapproved. | - | - | |||
| 2021-10-29 | TheInterimReportfortheThirdQuarter2021wasapproved. | - | - | |||
| NominationCommittee | GuanQingyou,YuGang,XueYunkui,andHanJian | 3 | 2021-4-18 | TheProposalonAppointmentofCFOwasapproved. | - | - |
| 2021-8-30 | Thefollowingproposalswereapproved:TheProposalonRe-electionoftheBoardofDirectorsandNominationofNon-independentDirectorCandidates,andTheProposalonRe-electionofthe | - | - |
| BoardofDirectorsandNominationofIndependentDirectorCandidates. | ||||||
| 2021-9-17 | Thefollowingproposalswereapproved:TheProposalonElectionofChairmanfortheFourthBoardofDirectors,TheProposalonElectionofMembersforSpecialCommitteesundertheFourthBoardofDirectors,TheProposalonAppointmentofPresident,TheProposalonAppointmentofVicePresident,TheProposalonAppointmentofCFO,TheProposalonAppointmentofDirectorofFinance,TheProposalonAppointmentofBoardSecretary,andTheProposalonAppointmentofRepresentativeforSecuritiesAffairs. | - | - | |||
| RemunerationandAppraisalCommittee | HanJian,YuGang,XueYunkui,andGuanQingyou | 5 | 2021-1-5 | Thefollowingproposalswereapproved:TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2017RestrictedShareIncentiveScheme,TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2018RestrictedShareIncentiveScheme,TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2019RestrictedShareIncentiveScheme,TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2020RestrictedShareIncentiveScheme,andTheProposalontheSatisfactionofUnlockingConditionsfortheThirdUnlockingPeriodforReservedRestrictedSharesunderthe2017RestrictedShareIncentiveScheme. | - | - |
| 2021-4-27 | Thefollowingproposalswereapproved:TheRemunerationPaymentStandardsforDirectors, | - | - |
| SupervisorsandSeniorManagementfor2020,TheProposalontheEighthStockOptionIncentiveScheme(Draft)andItsSummary,TheProposalonthe2021RestrictedShareIncentiveScheme(Draft)andItsSummary,TheSeventhCoreManagementandGlobalPartnerStockOwnershipSchemeofMideaGroupCo.,Ltd.(Draft)andItsSummary,TheFourthCoreManagementandBusinessPartnerStockOwnershipSchemeofMideaGroupCo.,Ltd.(Draft)andItsSummary,TheProposalonMattersRelatedtotheStockOptionExercisefortheFirstExercisePeriodforReservedStockOptionsoftheFifthStockOptionIncentiveScheme,andTheProposalontheSatisfactionofUnlockingConditionsfortheFirstUnlockingPeriodforReservedRestrictedSharesunderthe2018RestrictedShareIncentiveScheme. | |||
| 2021-6-4 | Thefollowingproposalswereapproved:TheProposalonMattersRelatedtotheStockOptionExercisefortheSecondExercisePeriodfortheFirstGrantoftheFifthStockOptionIncentiveScheme,TheProposalonMattersRelatedtotheStockOptionExercisefortheFirstExercisePeriodoftheSixthStockOptionIncentiveScheme,TheProposalonMattersRelatedtotheStockOptionExercisefortheFirstExercisePeriodoftheSeventhStockOptionIncentiveScheme,TheProposalontheSatisfactionofUnlockingConditionsfortheSecondUnlockingPeriodfortheFirstGrantunderthe2018RestrictedShareIncentiveScheme,TheProposalontheSatisfactionofUnlocking | - | - |
| ConditionsfortheFirstUnlockingPeriodofthe2019RestrictedShareIncentiveScheme,andTheProposalontheSatisfactionofUnlockingConditionsfortheFirstUnlockingPeriodofthe2020RestrictedShareIncentiveScheme. | ||||||
| 2021-8-30 | Thefollowingproposalswereapproved:TheProposalonthePlanofDiversifiedEmployeeStockOwnershipSchemesforAnntoLogisticsSupplyChainTechnologyCo.,Ltd.,TheProposalonthePlanofDiversifiedEmployeeStockOwnershipSchemesforMaytechTechnologyCo.,LTD.,andTheProposalontheRemunerationStandardsforIndependentDirectorsandExternalDirectors. | - | - | |||
| 2021-12-24 | Thefollowingproposalswereapproved:TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2018RestrictedShareIncentiveScheme,TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2019RestrictedShareIncentiveScheme,TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2020RestrictedShareIncentiveScheme,andTheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2021RestrictedShareIncentiveScheme. | - | - | |||
| StrategyCommittee | FangHongbo,GuYanmin,YuGang,andGuanQingyou | 0 | - | - | - | - |
8.ActivitiesoftheSupervisoryCommitteeWerethereanyriskstotheCompanyidentifiedbytheSupervisoryCommitteewhenperformingitsdutiesduringtheReportingPeriod
□Yes√NoTheSupervisoryCommitteeoftheCompanyhadnoobjectiontothemattersofsupervisionduringtheReportingPeriod.
9.Employees
9.1Number,functionsandeducationalbackgroundsofemployees
| Numberofin-serviceemployeesoftheCompany | 2,351 |
| Numberofin-serviceemployeesofmainsubsidiaries | 163,448 |
| Totalnumberofin-serviceemployees | 165,799 |
| Totalnumberofpaidemployeesintheperiod | 165,799 |
| NumberofretireestowhomtheCompanyoritsmainsubsidiariesneedtopayretirementpension | 1,301 |
| Functions | |
| Function | Numberofemployees |
| Production | 134,274 |
| Sales | 8,561 |
| Technical | 19,150 |
| Financial | 2,116 |
| Administrative | 1,698 |
| Total | 165,799 |
| Educationalbackgrounds | |
| Educationalbackground | Numberofemployees |
| Master’sanddoctoraldegrees | 5,508 |
| Bachelor’sdegree | 26,976 |
| Juniorcollegeandtechnicalsecondaryschool | 69,839 |
| Others | 63,476 |
| Total | 165,799 |
9.2RemunerationpolicyRemunerationsforemployeesarepaidontimeaccordingtotheremunerationsystemoftheCompany.
TheCompanydecidestheregularsalariesoftheemployeesaccordingtotheposition’svalueandevaluationperformancesanddecidesthevariablesalaryaccordingtotheCompany'sandemployee’sperformance.Theremunerationdistributionshowsmoreconsiderationforstrategictalentandensuresthemarketcompetitivenessinthesalaryofcoretalent.TheCompanyshallmakedynamicadjustmentstothestaffremunerationpolicyaccordingtoregionaldifferences,numberofemployees,staffturnover,environmentchangesintheindustryandpayingabilityoftheCompany.
9.3EmployeetrainingMideaAcademyhassixempowermentcenters,namelytheLeadershipEmpowermentCenter,theDigitalandIntelligentInnovationEmpowermentCenter,theIntelligentManufacturingEmpowermentCenter,theGlobalizationEmpowermentCenter,theNewcomerEmpowermentCenter,andtheGeneralEmpowermentCenter,inadditiontoaprofessionalonlinelearningplatform—M-Learning,whichempowersallMideaemployeesandecosystempartnersthroughspeciallearningcoursesandpracticallearningfunctions.InMidea,newemployeeswillreceiveorientationandjob-specificskilltrainingortutoring,whilein-serviceoneswillbegivenirregulartrainingsinsideoroutsidetheCompanytohelpimprovetheirprofessionalanduniversalskills.Inthisway,Mideapeopleenjoybetterdevelopmentopportunities.Mideahasalsoputinplaceamulti-tiertalentdevelopmentsystem,includingamatureleadershipdevelopmentprogramcomprisingtheSailorProject,theVoyagerProjectandthePilotProjecttocultivatereservetalentformid-levelkeypersonnel,headsfortheprimarystructureofbusinessunits/businessentities,andpresidentsforbusinessdivisions,respectively.Theattendancesatinternaltrainingsessionswere995,693in2021,ofwhich3,494weremanagementpersonnel,568,784technicalandmarketingpersonneland423,415operationalpersonnel.a.BuildingLeadershipDevelopmentProgramssuchastheSailor-Voyager-PilotprogramandaHigh-PotentialLeadersTrainingsystemtofacilitatetalentmanagementandtraining.55talenttrainingprogramswerecarriedout.
b.Buildingaprofessionalismpromotionsystem.3,611suchprogramswerecarriedout,where667,977staffweretrainedforatotalof1,108,874man-hours.c.Providingchannelsforcommonskillimprovement.706suchprogramssuchastheLectureforStaffwerelaunched,where145,147staffweretrainedforatotalof341,666man-hours.d.Improvingindividualcomprehensiveability.173externaltrainingsforindividualsatjunior,middleandseniorlevelswereorganized,where62,592staffweretrainedforatotalof137,924man-hours.e.InordertohelpnewgraduatesdevelopthemselvesfastandfosteranewpowerfortheCompany,121relevantprogramssuchastheRe-EducationofNewGraduates,theTrainingCampforNewGraduates,andtheOrientationTrainingCampforNewGraduateswereorganized,where8,288newgraduatesweretrainedforatotalof19,078man-hours.f.Facilitatingorganizationallearning.9,985internalsharingsessionswereheld,where710,398employeesweretrainedfor1,049,859man-hours.Withtheadditionof1,235newinternaltrainers,annualteachingtimereached8,184hoursintotal.Andatotalof1,185coursesweredesignedintheyear.g.97,203keytechnicalstaffandworkingteamleadersweretrainedforatotalof349,169.43hours.h.141,037staffvisitedM-Learning,amobileappdevelopedbyMideaforonlinetraining,foratotalof763,359timesin2021.
9.4Laboroutsourcing
□Applicable√N/A
10.ProfitDistributionandConvertingCapitalSurplusintoShareCapital
TheCompanyhasstrictlyimplementedtheShareholderReturnPlanfortheNextThreeYears(2019-2021),whichspecifiesthedecision-makingprocessfordividendstandards,dividendratiosandprofitdistributionpolicies,ensuresacontinualandconsistentprofitdistributionpolicyfromthemechanismperspective,andfullyprotectsthelegitimaterightsandinterestsofminorityinvestors.In
addition,theCompanycarriedoutsharerepurchasesbywayofcentralizedbiddingin2015,2018and2021.AspertheCompanyLaw,theStockListingRulesoftheShenzhenStockExchange,andGuidelineNo.9oftheShenzhenStockExchangefortheSelf-regulationofListedCompanies—ShareRepurchases,theamountusedtorepurchasesharesinayearshallbedeemedascashdividendsandincludedinthetotalcashdividendsfortheyearwhenitcomestocalculation.Formulation,executionoradjustmentsofprofitdistributionpolicy,especiallycashdividendpolicy,intheReportingPeriod
√Applicable□N/A
| Specialstatementaboutthecashdividendpolicy | |
| IncompliancewiththeCompany’sArticlesofAssociationandresolutionofmeetingofshareholders | Yes |
| Specificandcleardividendstandardsandratios | Yes |
| Completedecision-makingprocessandmechanism | Yes |
| Independentdirectorsfaithfullyperformedtheirdutiesandplayedtheirduerole | Yes |
| Minorityshareholdersareabletofullyexpresstheiropinionanddesireandtheirlegitimaterightsandinterestsarefullyprotected | Yes |
| Incaseofadjustingoralteringthecashdividendpolicy,theconditionsandprocessinvolvedareincompliancewithapplicableregulationsandtransparent | Noadjustmentwasmadetothecashdividendpolicy. |
TheCompanymadeaprofitintheReportingPeriodandtheprofitdistributabletoshareholdersoftheCompany(withoutsubsidiaries)waspositive,butitdidnotputforwardapreliminaryplanforcashdividenddistribution
□Applicable√N/APreliminaryplanforprofitdistributionandconvertingcapitalsurplusintosharecapitalfortheReportingPeriod
√Applicable□N/A
| Bonussharesforevery10shares(share) | 0 |
| Dividendforevery10shares(RMB)(taxincluded) | 17 |
| Additionalsharesconvertedfromcapitalsurplusforevery10shares(share) | 0 |
| Totalsharesasthebasisforthepreliminaryplanforprofitdistribution(share) | 6,869,123,038 |
| Cashdividends(RMB)(taxinclusive) | 11,677,509,164.60 |
| Cashdividendsinotherforms(suchassharerepurchase)(RMB) | 13,664,103,513.72 |
| Totalcashdividends(inclusiveofthoseinotherforms)(RMB)(taxinclusive) | 25,341,612,678.32 |
| Distributableprofits(RMB) | 28,094,420,000 |
| Percentageoftotalcashdividends(inclusiveofthoseinotherforms)inthetotaldistributedprofit(%) | 100% |
| Cashdividendpolicyadopted | |
| WheretheCompanyisatamaturestageofdevelopmentandhassignificantexpenditurearrangements,cashdividendsshallaccountforatleast40%ofthetotaldistributedprofitwhencarryingoutprofitdistribution. | |
| Detailsaboutthepreliminaryplanforprofitdistributionandconvertingcapitalsurplusintosharecapital | |
| AccordingtotheAuditor’sReportPwCZTShenZi(2022)No.10017issuedbyPricewaterhouseCoopersZhongTianLLP,theparentcompanyrealizedanetprofitofRMB14,835,388,000for2021.PursuanttotherelevantprovisionsundertheArticlesofAssociation,itprovided10%asstatutorysurplusreserve,namelyRMB1,483,539,000.PlusundistributedprofitsatthebeginningoftheyearofRMB25,795,300,000andminustheprofitdistributedintheyearofRMB11,052,729,000,theactualdistributableprofitwouldbeRMB28,094,420,000. | |
Note:UptothedisclosuredateofthisReport,thetotalsharecapitaloftheCompanystoodat6,997,053,441sharesandtherewere127,930,403sharesintherepurchasedshareaccount.Therefore,thetotalsharesentitledtothedividendare6,869,123,038shares.
11.ImplementationofanyEquityIncentiveScheme,EmployeeStockOwnershipSchemeorOtherIncentiveMeasuresforEmployees
√Applicable□N/A
11.1EquityincentiveschemesA.OverviewoftheThirdStockOptionIncentiveSchemea.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectorson4June2021,atwhichtheProposalfortheAdjustmenttotheExercisePricefortheThirdStockOptionIncentiveSchemewasapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,theexercisepricefortheThirdStockOptionIncentiveSchemewasrevisedfromRMB16.26toRMB14.69pershare.DuringtheReportingPeriod,10,522,746shareswereexercisedundertheThirdStockOptionIncentive
Scheme.B.OverviewoftheFourthStockOptionIncentiveSchemeDuringtheReportingPeriod,7,516,624shareswereexercisedundertheFourthStockOptionIncentiveScheme.C.OverviewoftheFifthStockOptionIncentiveSchemea.TheCompanyconvenedthe32ndMeetingofthe3rdBoardofDirectorson28April2021,atwhichtheProposalfortheAdjustmentstotheIncentiveRecipientsandTheirExercisableStockOptionsfortheFifthStockOptionIncentiveSchemewasapproved.ItwasagreedtoadjusttheincentiverecipientsandtheirexercisablestockoptionswithrespecttothereservedstockoptionsundertheFifthStockOptionIncentiveSchemeduetotheresignation,lowindividualorbusinessdivisionperformanceappraisalsorotherfactorsofsomeincentiverecipients.Upontheadjustments,thenumberoflocked-upreservedstockoptionsgrantedtothemwasreducedfrom5,340,000to4,270,250.TheProposalforMattersRelatedtotheStockOptionExercisefortheFirstExercisePeriodfortheReservedStockOptionsoftheFifthStockOptionIncentiveSchemewasalsoapproved.Atotalof74incentiverecipientswhoareeligiblefortheFifthStockOptionIncentiveSchemehavebeenallowedtoexercise1,000,250stockoptionsinthefirstexerciseperiod(ended10March2022).b.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectors,atwhichtheProposalfortheRetirementofUnexercisedStockOptionsintheFirstGrantundertheFifthStockOptionIncentiveSchemeuponExpirywasapproved.AsthefirstexerciseperiodforthefirstgrantundertheFifthStockOptionIncentiveSchemeexpiredon6May2021,theBoardofDirectorsoftheCompanyagreedtoretirethe5,000stockoptionsthathadbeenpreviouslygrantedtoVotadoroGiuseppbutwereunexerciseduponexpiry.c.TheProposalfortheAdjustmenttotheExercisePricefortheFifthStockOptionIncentiveSchemewasalsoapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,theexercisepriceforthefirstgrantwasrevisedfromRMB53.45toRMB51.88pershare,andtheexercisepriceforthereserved
stockoptionsfromRMB44.28toRMB42.71pershare.d.TheProposalfortheAdjustmentstotheIncentiveRecipientsandTheirExercisableStockOptionsfortheFirstGrantoftheFifthStockOptionIncentiveSchemewasalsoapproved.ItwasagreedtoadjusttheincentiverecipientsandtheirexercisablestockoptionsundertheFifthStockOptionIncentiveSchemeduetotheresignation,beingreassigned,lowindividualorbusinessdivisionperformanceappraisalsorotherfactorsofsomeincentiverecipients.Upontheadjustments,thenumberoflocked-upstockoptionsgrantedtotheminthefirstgrantoftheFifthStockOptionIncentiveSchemewasreducedfrom31,860,000to29,267,000.e.TheProposalforMattersRelatedtotheStockOptionExercisefortheSecondExercisePeriodoftheFirstGrantoftheFifthStockOptionIncentiveSchemewasalsoapproved.Atotalof1,015incentiverecipientswhoareeligiblefortheFifthStockOptionIncentiveSchemehavebeenallowedtoexercise8,931,000stockoptionsinthesecondexerciseperiod(ended6May2022).DuringtheReportingPeriod,5,775,512shareswereexercisedwithrespecttothefirstgrantundertheFifthStockOptionIncentiveScheme.DuringtheReportingPeriod,335,450shareswereexercisedwithrespecttothereservedstockoptionsundertheFifthStockOptionIncentiveScheme.D.OverviewoftheSixthStockOptionIncentiveSchemea.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectors,atwhichtheProposalfortheAdjustmenttotheExercisePricefortheSixthStockOptionIncentiveSchemewasapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,theexercisepricefortheSixthStockOptionIncentiveSchemewasrevisedfromRMB51.28toRMB49.71pershare.b.TheProposalfortheAdjustmentstotheIncentiveRecipientsandTheirExercisableStockOptionsfortheSixthStockOptionIncentiveSchemewasalsoapproved.ItwasagreedtoadjusttheincentiverecipientsandtheirexercisablestockoptionsundertheSixthStockOptionIncentiveSchemeduetotheresignation,lowbusinessdivisionperformanceappraisals,lowindividualperformanceappraisals,being
reassignedorotherfactorsofsomeincentiverecipients.Upontheadjustments,thenumberoflocked-upstockoptionsgrantedtothemwasreducedfrom46,540,000to38,963,250.c.TheProposalforMattersRelatedtotheStockOptionExercisefortheFirstExercisePeriodoftheSixthStockOptionIncentiveSchemewasalsoapproved.Atotalof965incentiverecipientswhoareeligiblefortheSixthStockOptionIncentiveSchemehavebeenallowedtoexercise8,708,250stockoptionsinthefirstexerciseperiod(ended27May2022).DuringtheReportingPeriod,4,848,541shareswereexercisedundertheSixthStockOptionIncentiveScheme.E.OverviewoftheSeventhStockOptionIncentiveSchemea.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectors,atwhichtheProposalfortheAdjustmenttotheExercisePricefortheSeventhStockOptionIncentiveSchemewasapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,theexercisepricefortheSeventhStockOptionIncentiveSchemewasrevisedfromRMB50.43toRMB48.86pershare.b.TheProposalfortheAdjustmentstotheIncentiveRecipientsandTheirExercisableStockOptionsfortheSeventhStockOptionIncentiveSchemewasalsoapproved.ItwasagreedtoadjusttheincentiverecipientsandtheirexercisablestockoptionsundertheSeventhStockOptionIncentiveSchemeduetotheresignation,lowbusinessdivisionperformanceappraisals,lowindividualperformanceappraisals,beingreassignedorotherfactorsofsomeincentiverecipients.Upontheadjustments,thenumberoflocked-upstockoptionsgrantedtothemwasreducedfrom65,020,000to59,663,000.c.TheProposalforMattersRelatedtotheStockOptionExercisefortheFirstExercisePeriodoftheSeventhStockOptionIncentiveSchemewasalsoapproved.Atotalof1,309incentiverecipientswhoareeligiblefortheSeventhStockOptionIncentiveSchemehavebeenallowedtoexercise10,223,000stockoptionsinthefirstexerciseperiod(ended3June2022).DuringtheReportingPeriod,5,488,178shareswereexercisedundertheSeventhStockOptionIncentiveScheme.
F.OverviewoftheEighthStockOptionIncentiveSchemea.TheProposalontheEighthStockOptionIncentiveScheme(Draft)anditsAbstractwasapprovedatthe32rdMeetingofthe3rdBoardofDirectorsandthe2020AnnualGeneralMeetingofShareholders,andtheincentiverecipientlistfortheEighthStockOptionIncentiveScheme(Draft)wasreviewedatthe21stMeetingofthe3rdSupervisoryCommittee.b.On14July2021,theCompanygranted81,740,000stockoptionsto1,885incentiverecipientswiththeexercisepricebeingRMB81.41pershare.G.Overviewofthe2017RestrictedShareIncentiveSchemea.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2017RestrictedShareIncentiveSchemewasapprovedatthe28thMeetingofthe3rdBoardofDirectors.Assuch,itwasagreedtorepurchaseandretire32,917restrictedsharesthathadbeengrantedto2personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassignedorotherfactors.Thesaidretirementofshareswascompletedon24May2021.b.TheProposalontheSatisfactionoftheConditionsfortheThirdUnlockingPeriodfortheReservedRestrictedSharesofthe2017RestrictedShareIncentiveSchemewasalsoapproved.Atotalof39personnelwereeligibleforthisunlocking,with1,292,083restrictedshares(0.02%oftheCompany’stotalexistingsharecapital)unlockedandallowedforpublictradingon8February2021,ofwhichseniormanagementXiaoMingguangunlocked50,000shares.H.Overviewofthe2018RestrictedShareIncentiveSchemea.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2018RestrictedShareIncentiveSchemewasapprovedatthe28thMeetingofthe3rdBoardofDirectors.Assuch,itwasagreedtorepurchaseandretire1,009,501restrictedsharesthathadbeengrantedto22personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassigned,violationofthe“RedLines”oftheCompanyorotherfactors.Thesaidretirementofshareswascompletedon24May2021.
b.TheCompanyconvenedthe32ndMeetingofthe3rdBoardofDirectors,atwhichtheProposalontheSatisfactionoftheConditionsfortheFirstUnlockingPeriodfortheReservedRestrictedSharesofthe2018RestrictedShareIncentiveSchemewasapproved.Atotalof24personnelwereeligibleforthisunlocking,with403,249restrictedshares(0.0057%oftheCompany’stotalexistingsharecapital)unlockedandallowedforpublictradingon4June2021.c.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectors,atwhichtheProposalfortheAdjustmenttotheRepurchasePriceforthe2018RestrictedShareIncentiveSchemewasapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,therepurchasepriceforthefirstgrantwasrevisedfromRMB24.68toRMB23.11pershare,andtherepurchasepriceforthereservedrestrictedsharesfromRMB20.70toRMB19.13pershare.d.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2018RestrictedShareIncentiveSchemewasalsoapproved.Assuch,itwasagreedtorepurchaseandretire761,121restrictedsharesthathadbeengrantedto67personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassigned,lowindividualorbusinessdivisionperformanceappraisalsfor2020orotherfactors.TheCompanyhascompletedtheretirementoftheaforesaidshareson30November2021.e.TheProposalontheSatisfactionoftheConditionsfortheSecondUnlockingPeriodfortheFirstGrantofthe2018RestrictedShareIncentiveSchemewasalsoapproved.Atotalof209personnelwereeligibleforthisunlocking,with3,043,254restrictedshares(0.0432%oftheCompany’stotalexistingsharecapital)unlockedandallowedforpublictradingon30June2021,ofwhichseniormanagementHuZiqiang,ZhangXiaoyiandZhongZhengunlocked25,000shares,25,000sharesand20,000shares,respectively.I.Overviewofthe2019RestrictedShareIncentiveSchemea.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2019RestrictedShareIncentiveSchemewasapprovedatthe28thMeetingofthe3rdBoardofDirectors.Assuch,itwasagreedtorepurchaseandretire1,043,958restrictedsharesthathadbeengrantedto15
personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassigned,violationofthe“RedLines”oftheCompanyorotherfactors.Thesaidretirementofshareswascompletedon24May2021.b.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectors,atwhichtheProposalfortheAdjustmenttotheRepurchasePriceforthe2019RestrictedShareIncentiveSchemewasapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,therepurchasepricewasrevisedfromRMB24.20toRMB22.63pershare.c.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2019RestrictedShareIncentiveSchemewasalsoapproved.Assuch,itwasagreedtorepurchaseandretire941,788restrictedsharesthathadbeengrantedto92personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassigned,lowindividualorbusinessdivisionperformanceappraisalsfor2020,violationofthe“RedLines”oftheCompanyorotherfactors.TheCompanyhascompletedtheretirementoftheaforesaidshareson30November2021.d.TheProposalontheSatisfactionoftheConditionsfortheFirstUnlockingPeriodofthe2019RestrictedShareIncentiveSchemewasalsoapproved.Atotalof363personnelwereeligibleforthisunlocking,with5,654,629restrictedshares(0.0802%oftheCompany’stotalexistingsharecapital)unlockedandallowedforpublictradingon13July2021,ofwhichseniormanagementWangJinliangunlocked30,000shares.J.Overviewofthe2020RestrictedShareIncentiveSchemea.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2020RestrictedShareIncentiveSchemewasapprovedatthe28thMeetingofthe3rdBoardofDirectors.Assuch,itwasagreedtorepurchaseandretire440,374restrictedsharesthathadbeengrantedto11personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassigned,violationofthe“RedLines”oftheCompanyorotherfactors.Thesaidretirementofshareswascompletedon24May2021.b.TheCompanyconvenedthe34thMeetingofthe3rdBoardofDirectors,atwhichtheProposalforthe
AdjustmenttotheRepurchasePriceforthe2020RestrictedShareIncentiveSchemewasapproved.Asthe2020AnnualProfitDistributionhadbeencarriedout,therepurchasepricewasrevisedfromRMB24.42toRMB22.85pershare.c.TheProposalontheRepurchaseandRetirementofCertainIncentiveSharesunderthe2020RestrictedShareIncentiveSchemewasalsoapproved.Assuch,itwasagreedtorepurchaseandretire1,643,164restrictedsharesthathadbeengrantedto263personnelbutwerestillinlockup,forthereasonsoftheirresignation,beingreassigned,lowindividualorbusinessdivisionperformanceappraisalsfor2020,violationofthe“RedLines”oftheCompanyorotherfactors.TheCompanyhascompletedtheretirementoftheaforesaidshareson30November2021.d.TheProposalontheSatisfactionoftheConditionsfortheFirstUnlockingPeriodofthe2020RestrictedShareIncentiveSchemewasalsoapproved.Atotalof487personnelwereeligibleforthisunlocking,with5,488,962restrictedshares(0.0778%oftheCompany’stotalexistingsharecapital)unlockedandallowedforpublictradingon20July2021,ofwhichseniormanagementWangJinliangandLiGuolinunlocked24,000and20,000shares,respectively.K.Overviewofthe2021RestrictedShareIncentiveSchemea.TheProposalonthe2021RestrictedShareIncentiveScheme(Draft)anditsAbstractwasapprovedatthe32rdMeetingofthe3rdBoardofDirectorsandthe2020AnnualGeneralMeetingofShareholders,andtheincentiverecipientlistforthe2021RestrictedShareIncentiveScheme(Draft)wasreviewedatthe21stMeetingofthe3rdSupervisoryCommittee.b.On16July2021,theCompanygranted9,940,000restrictedsharesto139incentiverecipientswiththegrantpricebeingRMB39.92pershare,ofwhichseniormanagementWangJinliang,LiGuolinandJiangPengweregranted100,000shares,100,000sharesand80,000shares,respectively.Equityincentivesfordirectorsandseniormanagement
√Applicable□N/A
| Name | Officetitle | Stockoptions | Stockoptionsgranted | Exercisable | Exercised | Exercisepricefor | Stockoptions | Marketpriceat | Restricted | Unlockedshares | Restrictedshares | Grantpriceof | Restricted |
| heldatthebeginningoftheReportingPeriod | intheReportingPeriod | shareoptionsfortheReportingPeriod | shareoptionsintheReportingPeriod | exercisedshareoptionsintheReportingPeriod(RMB/share) | heldattheendoftheReportingPeriod | theendoftheReportingPeriod(RMB/share) | sharesheldatthebeginningoftheReportingPeriod | intheReportingPeriod | grantedintheReportingPeriod | therestrictedshares(RMB/share) | sharesheldattheendoftheReportingPeriod | ||
| ZhangXiaoyi | VicePresident | 75,000 | 25,000 | 50,000 | |||||||||
| HuZiqiang | VicePresident | 75,000 | 25,000 | 50,000 | |||||||||
| WangJinliang | VicePresident | 240,000 | 54,000 | 100,000 | 39.92 | 286,000 | |||||||
| LiGuolin | VicePresident | 100,000 | 20,000 | 100,000 | 39.92 | 180,000 | |||||||
| GuanJinwei | VicePresident | 175,000 | 50,000 | 125,000 | |||||||||
| ZhongZheng | CFOandDirectorofFinance | 65,000 | 65,000 | 65,000 | 16.26 | 0 | 73.81 | 60,000 | 20,000 | 40,000 | |||
| JiangPeng | BoardSecretary | - | 80,000 | 39.92 | 80,000 | ||||||||
| XiaoMingguang | VicePresident | 105,000 | 105,000 | 105,000 | 16.26 | 0 | 73.81 | 125,000 | 75,000 | 80,000 | 39.92 | 130,000 | |
| Total | -- | 170,000 | 170,000 | 170,000 | -- | 0 | -- | 850,000 | 269,000 | 360,000 | -- | 941,000 | |
| Remark(ifany) | 1.Atotalof1,292,083shareswereallowedforpublictradingintheThirdUnlockingPeriodfortheReservedRestrictedSharesofthe2017RestrictedShareIncentiveSchemeon8February2021,of | ||||||||||||
AppraisalmechanismandincentivesforseniormanagementWithrespecttoremunerationsfordirectorsandsupervisors,theRemunerationandAppraisalCommitteeundertheBoardofDirectorsformulatestherelevantplan,whichissubmittedtotheBoardofDirectorsforapprovalandthentothemeetingofshareholdersforfinalapproval.Asforremunerationsforseniormanagement,theRemunerationandAppraisalCommitteeformulatestherelevantplan,whichissubmittedtotheBoardofDirectorsforfinalapproval.
11.2Employeestockownershipschemes
√Applicable□N/AOutstandingemployeestockownershipschemesduringtheReportingPeriod
whichseniormanagementXiaoMingguangunlocked50,000shares.
2.Atotalof3,043,254shareswereallowedforpublictradingintheSecondUnlockingPeriodfortheFirstGrantofthe2018RestrictedShareIncentiveSchemeon30June2021,ofwhichseniormanagementHuZiqiang,ZhangXiaoyiandZhongZhengunlocked25,000shares,25,000sharesand20,000shares,respectively.
3.Atotalof5,654,629shareswereallowedforpublictradingintheFirstUnlockingPeriodofthe2019RestrictedShareIncentiveSchemeon13July2021,ofwhichseniormanagementWangJinliangunlocked30,000shares.
4.Atotalof5,488,962shareswereallowedforpublictradingintheFirstUnlockingPeriodofthe2020RestrictedShareIncentiveSchemeon20July2021,ofwhichseniormanagementWangJinliangandLiGuolinunlocked24,000and20,000shares,respectively.
5.Atotalof9,940,000sharesweregrantedunderthe2021RestrictedShareIncentiveSchemeon16July2021,ofwhichseniormanagementWangJinliang,LiGuolinandJiangPengweregranted100,000shares,100,000sharesand80,000shares,respectively.Scopeofemployees
| Scopeofemployees | Numberofemployees | Totalsharesheld | Change | AsapercentageoftheCompany’stotalsharecapital | Fundingsource |
| EmployeesundertheThirdGlobalPartnerStockOwnershipScheme | 15 | 2,846,445 | N/A | 0.0407% | Specialfundforthescheme |
| EmployeesundertheFourthGlobalPartnerStockOwnershipScheme | 20 | 3,318,540 | N/A | 0.0474% | Specialfundforthescheme |
| EmployeesundertheFirstBusinessPartnerStockOwnershipScheme | 50 | 1,779,300 | N/A | 0.0254% | Specialfundfortheschemeandpartoftheperformancebonusesforseniormanagement |
| EmployeesundertheFifth | 16 | 3,732,075 | N/A | 0.0533% | Specialfundforthe |
| GlobalPartnerStockOwnershipScheme | scheme | ||||
| EmployeesundertheSecondBusinessPartnerStockOwnershipScheme | 45 | 1,867,845 | N/A | 0.0267% | Specialfundfortheschemeandpartoftheperformancebonusesforseniormanagement |
| EmployeesundertheSixthGlobalPartnerStockOwnershipScheme | 17 | 3,537,663 | N/A | 0.0506% | Specialfundforthescheme |
| EmployeesundertheThirdBusinessPartnerStockOwnershipScheme | 46 | 1,873,559 | N/A | 0.0268% | Specialfundfortheschemeandpartoftheperformancebonusesforseniormanagement |
| EmployeesundertheSeventhGlobalPartnerStockOwnershipScheme | 15 | 2,436,518 | N/A | 0.0348% | Specialfundforthescheme |
| EmployeesundertheFourthBusinessPartnerStockOwnershipScheme | 44 | 1,985,611 | N/A | 0.0284% | Specialfundfortheschemeandpartoftheperformancebonusesforseniormanagement |
Sharesheldbydirectors,supervisorsandseniormanagementunderemployeestockownershipschemesduringtheReportingPeriod
| Name | Officetitle | SharesheldatthebeginningoftheReportingPeriod | SharesheldattheendoftheReportingPeriod | AsapercentageoftheCompany’stotalsharecapital |
| FangHongbo,YinBitong,GuYanmin,WangJianguo,ZhangXiaoyi,HuZiqiang,WangJinliang,LiGuolin,FuYongjun,GuanJinwei,ZhongZheng,andJiangPeng | CertaindirectorsandseniormanagementoftheCompany | 8,461,254 | 8,625,838 | 0.1233% |
ChangeofassetmanagementorganizationsduringtheReportingPeriod
□Applicable√N/AEquitychangesincurredbydisposalofsharesbyholders,etc.duringtheReportingPeriod
√Applicable□N/ADuringtheReportingPeriod,atotalof2,846,445shares(or0.0407%oftheCompany’stotalshare
capital)undertheThirdGlobalPartnerStockOwnershipSchemeweresold,upontheexpiryofthelockupperiod,bywayofcentralizedbiddingon31December2021.AspertheThirdGlobalPartnerStockOwnershipScheme(Draft),theimplementationoftheschemehasbeencompletedandtherelevantassetclearinganddistributionwillbecarriedoutsubsequently.Thebenefitsfortheholdersundertheschemewillbedistributedinproportiontothesharesinvestedinthemafterdeductingtherelevanttaxesandexpenses.ExerciseofshareholderrightsduringtheReportingPeriodDuringtheReportingPeriod,holdersunderemployeestockownershipschemesexercisedtheshareholderrightstoreceivethecashdividendsfor2020.Otherthanthat,theydidnotexerciseothershareholderrightssuchasvotinginameetingofshareholders.OtherinformationaboutemployeestockownershipschemesduringtheReportingPeriod
□Applicable√N/AChangesinmembersofthemanagementcommitteesforemployeestockownershipschemes
□Applicable√N/AFinancialimpactofemployeestockownershipschemesontheCompanyduringtheReportingPeriodandtherelevantaccountingtreatments
√Applicable□N/AAspertheAccountingStandardNo.11forBusinessEnterprises—Share-basedPayments,forequity-settledshare-basedpaymentsinexchangeforservicesfromemployeethatareexercisablewhenservicesinthevestingperiodarecompletedorspecifiedperformanceconditionsaremet,ateverybalancesheetdateduringthevestingperiod,theservicesobtainedinthecurrentperiodareincludedintherelevantcosts/expensesandcapitalsurplusatthefairvalueoftheequityinstrumentsatthegrantdatebasedonthebestestimateofthenumberofexercisableequityinstruments.TheexpenseamortizationoftheCompany’sshare-basedpaymentincentiveschemesstoodatRMB198.46millionfor2021,whichwasincludedintherelevantexpenseitemsandcapitalsurplus.TerminationofemployeestockownershipschemesduringtheReportingPeriod
√Applicable□N/ADuringtheReportingPeriod,theimplementationoftheThirdGlobalPartnerStockOwnershipSchemewascompleted,alongwiththerelevantassetclearinganddistribution.Thebenefitsfortheholdersunder
theschemehavebedistributedinproportiontothesharesinvestedinthemafterdeductingtherelevanttaxesandexpenses.Otherinformation
11.3Otherincentivemeasuresforemployees
□Applicable√N/A
12.EstablishmentandImplementationoftheInternalControlSystemduringtheReportingPeriod
12.1EstablishmentandimplementationoftheinternalcontrolsystemDuringtheReportingPeriod,inlinewiththeBasicCodeforInternalControlofEnterprisesandotherrelatedregulations,theCompanyupdatedandimprovedtheinternalcontrolsystemtimelyandestablishedasetofinternalcontrolsystemswhichwasdesignedscientificallyandoperatedeffectively.Besides,anorganizationsystemforinternalriskcontrolandmanagementcomprisingtheAuditCommitteeandtheinternalauditdepartmentwassetuptosuperviseandassesstheCompany'sinternalcontrolmanagement.Throughtheoperation,analysis,andassessmentoftheinternalcontrolsystem,theCompanyeffectivelypreventedtherisksinoperationsmanagementandpromotedtherealizationofinternalcontrolobjectives.
12.2SeriousinternalcontroldefectsfoundintheReportingPeriod
□Yes√No
13.TheCompany’sManagementandControlofSubsidiariesduringtheReportingPeriod
| Companyname | Consolidationplan | Consolidationprogress | Problemsarisinginconsolidation | Solutionstaken | Solutionimplementationprogress | Subsequentsolutions |
| N/A | N/A | N/A | N/A | N/A | N/A | N/A |
14.Self-evaluationReportandAuditor’sReportonInternalControl
14.1Self-evaluationreportoninternalcontrol
| Disclosuredateoftheinternalcontrolself-evaluationreport | 30April2022 | ||
| Indextothedisclosedinternalcontrolself-evaluationreport | Fordetails,pleaserefertothe2021Self-EvaluationReportonInternalControl,whichhasbeendisclosedonwww.cninfo.com.cn | ||
| Ratioofthetotalassetsoftheappraisedentitiestotheconsolidatedtotalassets | 70% | ||
| Ratiooftheoperatingrevenueoftheappraisedentitiestotheconsolidatedoperatingrevenue | 70% | ||
| Defectidentificationstandards | |||
| Type | Financial-reportrelated | Non-financial-reportrelated | |
| Naturestandard | Fordetails,pleasereferto“(c)Basisforinternalcontrolevaluationandidentificationstandardsforinternalcontroldefects”underSectionIIIofThe2021Self-EvaluationReportonInternalControldisclosedonwww.cninfo.com.cndated30April2022. | Fordetails,pleasereferto“(c)Basisforinternalcontrolevaluationandidentificationstandardsforinternalcontroldefects”underSectionIIIofThe2021Self-EvaluationReportonInternalControldisclosedonwww.cninfo.com.cndated30April2022. | |
| Quantitativestandard | Fordetails,pleasereferto“(c)Basisforinternalcontrolevaluationandidentificationstandardsforinternalcontroldefects”underSectionIIIofThe2021Self-EvaluationReportonInternalControldisclosedonwww.cninfo.com.cndated30April2022. | Fordetails,pleasereferto“(c)Basisforinternalcontrolevaluationandidentificationstandardsforinternalcontroldefects”underSectionIIIofThe2021Self-EvaluationReportonInternalControldisclosedonwww.cninfo.com.cndated30April2022. | |
| Numberofseriousfinancial-report-relateddefects | 0 | ||
| Numberofseriousnon-financial-report-relateddefects | 0 | ||
| Numberofimportantfinancial-report-relateddefects | 0 | ||
| Numberofimportantnon-financial-report-relateddefects | 0 | ||
14.2Auditor’sreportoninternalcontrol
√Applicable□N/A
| Opinionparagraphintheauditor’sreportoninternalcontrol | |
| Theinternalcontrolauditorholdstheviewthaton31December2021,MideaGroupmaintainedaneffectiveinternalcontrolofafinancialreportinallsignificantaspectsbasedontheGeneralSpecificationsofCompanyInternalControlandrelevantspecifications. | |
| Auditor’sreportoninternalcontroldisclosedornot | Disclosedonwww.cninfo.com.cn |
| Dateofdisclosingthefulltextoftheauditor’sreportoninternalcontrol | 30April2022 |
| Indextothedisclosedfulltextoftheauditor’sreportoninternalcontrol | Fordetails,pleaserefertothe2021Auditor’sReportonInternalControl,whichhasbeendisclosedonwww.cninfo.com.cn |
| Typeoftheauditor’sopinion | Standard&unqualified |
| Seriousnon-financial-report-relateddefects | No |
Whetheranymodifiedopinionsareexpressedbytheaccountingfirminitsauditor’sreportontheCompany’sinternalcontrol
□Yes√NoWhethertheauditor’sreportontheCompany’sinternalcontrolissuedbytheaccountingfirmisconsistentwiththeself-evaluationreportoftheBoard
√Yes□No
15.RemediationofProblemsIdentifiedbySelf-inspectionintheSpecialActionontheGovernanceofListedCompaniesInaccordancewiththerequirementsofregulatoryauthorities,theCompanylaunchedaspecialself-inspectionofthegovernanceoflistedcompaniesthatwouldlastfourmonthson17December2020,whichwouldreviewthecorporategovernancecomprehensivelyfromsevenperspectives,namelythebasicinformationofthelistedcompanies,theoperationanddecision-makingoftheorganization,controllingshareholder/ActualControllerandrelatedparties,theestablishmentofthesystemforstandardizingtheinternalcontrol,informationdisclosureandtransparency,andinstitutional/overseasinvestors.Inaddition,itidentifiedproblemsanddeficienciesbyreferringtoregulations,ArticlesofAssociation,andothernormativedocuments,andsawthespecialself-inspectionasanopportunitytoimprovethegovernanceandprotectthegainsofinvestors.
Thisself-inspectionfoundthattheCompanyhadnomattersthathadviolatedthenationalandCSRCregulations,andthecorporategovernancewasincompliancewiththelawsandregulations,suchastheCompanyLaw,theSecuritiesLaw,theGuidelinesonStandardizedOperationofListedCompaniesonShenzhenStockExchange,andtheGuidelinesforArticlesofAssociationofListedCompanies.Besides,thestructureofthecorporategovernancewaswell-developed,andtheoperationwasstandard.TheCompanywillinspectandupdatetheinternalcontrolsystemithasreleasedinatimelymannerinaccordancewiththeexistinglawsandregulationsandcontinuouslyestablishandimprovetheinternalcontrolsystemssothatthesystemscanfunctioneffectively.
SectionVEnvironmentalandSocialResponsibility
1.MajorEnvironmentalIssues
WhethertheCompanyoranyofitssubsidiariesisdeclaredaheavilypollutingbusinessbytheenvironmentalprotectionauthorities
√Yes□No
| NameoftheCompanyorsubsidiary | Majorpollutants | Dischargemethod | Numberofdischargeoutlets | Distributionofdischargeoutlets | Concentrationofthedischarge | Pollutantdischargestandards | Totaldischarge(ton) | Approvedtotaldischarge(ton) | Excessdischarge |
| GDMideaAir-ConditioningEquipmentCo.,Ltd. | COD | Dischargeafterbeingtreatedbywastewatertreatmentstation | 1 | Thesoutheasternsideof4#plant | 85mg/L | TheDischargeStandardofWaterPollutantsforElectroplating(DB441597-2015)Chart2PRDstandard | 6.89 | 9.59 | No |
| Ammonia-nitrogen | 2.15mg/L | 1.41 | 1.510 | No | |||||
| SS | 24mg/L | 3.64 | / | No | |||||
| Petroleum | 4.21mg/L | 0.8 | / | No | |||||
| COD | Dischargeafterbeingtreatedbywastewatertreatmentstation | 1 | Theeasternsideof2#plan | 70mg/L | TheDischargeLimitsofWaterPollutants(DB44/26-2001) | 2.6 | 9.59 | No | |
| SS | 55mg/L | 2.01 | / | No | |||||
| Ammonia-nitrogen | 3.4mg/L | 2.53 | / | No | |||||
| Petroleum | 7.14mg/L | 4.22 | / | No |
| VOCs(dusting) | 15mhighaltitudedischargeafterbeingtreatedbyspraytower+activatedcarbon | 3 | 4#plant | 21.23mg/m? | EmissionStandardofVolatileOrganicCompoundsforFurnitureManufacturing(DB44/814-2010)thesecondtimeperiod | 2.26 | / | No |
| VOCs(ScreenPrinting) | 15mhighaltitudedischargeafterbeingtreatedbyenvironmentalprotectionequipment | 4 | 1#,5#,9#,11#plants | 1.92mg/m? | EmissionStandardofVolatileOrganicCompoundsforPrintingIndustry(DB44/815-2010) | 0.244 | ||
| VOCs(electronic) | 15mhighaltitudedischargeafterbeingtreatedbyenvironmentalprotectionequipment | 2 | 10#plants | 25.21mg/m? | EmissionStandardofVolatileOrganicCompoundsforPrintingIndustry(DB44/815-2010) | 2.16 | ||
| NMHC(evaporator&condenser) | 15mhighaltitudedischargeafterbeingtreatedbyenvironmentalprotectionequipment | 6 | 2#,5#plants | 25mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001)thesecondtimeperiod | 13.8 | / | No |
WuhuMatyAir-ConditioningEquipmentCo.,Ltd
| WuhuMatyAir-ConditioningEquipmentCo.,Ltd | COD | Dischargeafterbeingtreatedbywastewatertreatmentstation | 1 | Thenorthernsideofthepark | 42mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996)chart4Level3 | 24.3 | / | No |
| SS | 55mg/L | 25.7 | / | No | |||||
| BOD | 9mg/L | 4.3 | / | No | |||||
| Ammonia-nitrogen | 37mg/L | 21.2 | / | No | |||||
| Petroleum | 0.5mg/L | 0.3 | / | No |
| Particles | 15mhighaltitudedischargeafterbeingtreatedbyenvironmentalprotectionequipment | 5 | 2#plant | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 3.15 | / | No |
| VOCs | 8 | 2#,3#plants | 17mg/m? | EmissionControlStandardforIndustrialEnterprisesVolatileOrganicCompounds(DB13-2322-2016) | 24.6 | / | No | |
| NOX | 3 | 3#plant | 19mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 2.52 | / | No | |
| SO2 | 3 | 3#plant | 8mg/m? | 0.98 | / | No |
MideaGroupWuhanRefrigerationEquipmentCo.,Ltd.
| MideaGroupWuhanRefrigerationEquipmentCo.,Ltd. | PHvalue | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | WestGate2of4#plantonthewestsideofplantareas | 7-9 | IntegratedWastewaterDischargeStandardGB8978-1996 | / | / | No |
| Suspendedsolids | 45mg/L | / | / | No | |||||
| Five-dayCOD | 42.8mg/L | / | / | No | |||||
| COD | 192mg/L | 16.54 | 19.60 | No | |||||
| Petroleum | 3.45mg/L | / | / | No | |||||
| Ammonia-nitrogen | 0.313mg/L | 0.021 | 1.764 | No | |||||
| Fluoride | 4.98mg/L | / | / | No | |||||
| Totalzinc | 0.96mg/L | / | / | No | |||||
| Particles | 1.Waterspraying+ | 4 | Northwestcornerof1# | 3.1mg/m? | IntegratedEmission | 5.91 | 6.09 | No |
| Sulfurdioxide | low-temperatureplasma;direct-firedTOfurnace2.Framefiltration+activatedcarbon3.Framefiltration+Level2spraying+UVphotolysis+carbonabsorption4.Activatedcarbon5.RTOregenerativecombustion | 3 | plant;central1#plan;northeastcornerof3#plan | <3mg/m? | StandardsforAtmosphericPollutants(GB16297-1996) | 1.32 | 1.56 | No |
| Nitrogenoxide | 1 | <3mg/m? | 2.98 | 5.9 | No | |||
| VOCs | 2 | 6.94mg/m? | 3.17 | 11.44 | No |
FoshanShundeMideaElectricalHeatingAppliancesManufacturingCo.,Ltd.
| FoshanShundeMideaElectricalHeatingAppliancesManufacturingCo.,Ltd. | CODcr | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 2 | Wastewatertreatmentstations1and2of3#plant | 59mg/L | DischargeStandardofWaterPollutantsforElectroplating(DB44/1597-2015) | 8.24 | 15.304 | No |
| Petroleum | 0.075mg/L | 0.01 | / | No | |||||
| Ammonia-nitrogen | 9.57mg/L | 1.339 | 1.913 | No | |||||
| Tolueneandxylene | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 7 | Wastegassprayers1and2at3#plant,outlets1,2and3forwastegasfromwave-soldering,paintinganddryingat6#plant,outlets1and2forwastegasfromreflowsolderingat6#plant | 0.68mg/m? | Table1oftheEmissionStandardofVolatileOrganicCompoundsforFurnitureManufacturing(DB44/814-2010):DischargeLimitsforVOCsthroughExhaustFunnel/forTimePeriodII | 2.177 | / | No | |
| VOCs | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 5.42mg/m? | 12.17 | 22.72 | No |
| NMHC | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 2 | Outletofinjectionmoldingwastegasinthesouthsideof1#plant,outletofinjectionmoldingwastegasinthesouthsideof9#plant | 1.8mg/m? | Table4oftheEmissionStandardsofIndustrialPollutantsintheSyntheticResinIndustry(GB31572-2015):EmissionLimitsofAirPollutants | 1.5125 | / | No |
| Particles | Pulsebagdustcollecting | 4 | Outlets1and2ofsandingwastegasat3#plant,outlets1and2ofpolishingwastegasat3#plant | 6.4mg/m? | Table2oftheEmissionLimitsofAirPollutants(DB44/27-2001):EmissionLimitsofIndustrialWasteGas(TimePeriod2),Level2 | 2.015 | / | No |
| Sulfurdioxide | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 2 | Oxidationwireroofof3#plant | <3mg/m? | EmissionStandardofAirPollutantsforBoiler(DB44/765-2019) | 0.0152 | 3.8231 | No |
| Nitrogenoxide | Dryingfurnaceof3#plan | <3mg/m? | 0.0532 | 13.132 | No | |||
| Cookingfume | Dischargeafterbeingtreatedbywastegastreatmentstation | 2 | Southandnorthsectioncanteens | 1.25mg/m? | EmissionStandardofCookingFume(Trial)(GB18483-2001) | 0.419 | / | No |
GuangdongMideaConsumerElectricManufac
| GuangdongMideaConsumerElectricManufac | CODcr | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | Sewagetreatmentstation | 46.25mg/L | DischargeStandardofWaterPollutantsforElectroplating(DB44/1597-2015) | 3.7349 | 4.8 | No |
| Petroleum | 0.06mg/L | 0.0048 | / | No | |||||
| SS | 13.25mg/L | 1.0817 | / | No | |||||
| Ammonia-nitrogen | 6.73mg/L | 0.5378 | 0.96 | No | |||||
| Benzene | Highaltitudedischargeafter | 1 | Sprayingwastegas | 0.025mg/m? | Table1oftheEmission | 0.0019 | / | No |
| turingCo.,Ltd. | Toluene | beingtreatedbywastegastreatmentstation | outletat1#plant | 0.2625mg/m? | StandardofVolatileOrganicCompoundsforFurnitureManufacturing(DB44/814-2010):DischargeLimitsforVOCsthroughExhaustFunnel/forTimePeriodII | 0.0213 | / | No | |
| Xylene | 2.8975mg/m? | 0.2697 | / | No | |||||
| Tolueneandxylene | 3.165mg/m? | 0.2911 | / | No | |||||
| VOCs | 16.08mg/m? | 0.5617 | 0.61 | No | |||||
| NMHC | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 2 | Injectionmoldingwastegasoutletinthesouthernsideof2#plant,injectionmoldingwastegasoutletinthenorthernsideof2#plant | 1.64mg/m? | Table4oftheEmissionStandardsofIndustrialPollutantsintheSyntheticResinIndustry(GB31572-2015):EmissionLimitsofAirPollutants | 0.198 | / | No | |
| Particles | Highaltitudedischargeoffurnaceandweldingfumeafterbeingcollecting | 7 | Furnaceandweldingwastegasoutletat1#plant(5)Sprayingwastegasoutletat1#plant(1)Dischargingdust&wastegasoutlet(1) | 5.32mg/m? | Table2oftheEmissionLimitsofAirPollutants(DB44/27-2001):EmissionLimitsofIndustrialWasteGas(TimePeriod2),Level2 | 0.01915 | / | No | |
| Sulfurdioxide | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 1 | Sprayingwastegasoutletat1#plant | <3mg/m? | EmissionStandardofAirPollutantsforBoiler(DB44/765-2019) | 0.02719 | 0.028 | No | |
| Nitrogenoxide | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | <3mg/m? | 0.08583 | 0.131 | No |
| Cookingfume | Dischargeafterbeingtreatedbywastegastreatmentstation | 1 | Canteenof1#plan | 0.425mg/m? | EmissionStandardofCookingFume(GB18483-2001) | 0.0166 | / | No |
GDMideaEnvironmentAppliancesMfg.Co.,Ltd.
| GDMideaEnvironmentAppliancesMfg.Co.,Ltd. | VOCs | Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 2 | Duringthescreenprintingprocess | 0.94mg/m? | EmissionStandardofVolatileOrganicCompoundsforPrintingIndustry(DB44/815-2010) | 0.1986 | / | No |
| Dryfiltering+UV+activatedcarbon+catalyticcombustion+15mhighaltitudedischarge | 2 | Outletforwastegasfromdipcoating,dryingandhardening | 24.73mg/m? | EmissionControlStandardforIndustrialEnterprisesVolatileOrganicCompounds(DB12/524-2020) | 1.5276 | 3.42 | No | ||
| Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 1 | Duringthemanualweldingprocess | 10.67mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2EmissionStandardsforOdorPollutants(GB14554-93) | 0.2964 | / | No | ||
| Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 3 | Duringthewavesolderingprocess(pasteprintingandwavereflow) | 6.735mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2EmissionStandardsforOdorPollutants(GB14554-93) | 0.9079 | / | No |
| NMHC | Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 6 | Exhaustfunnelforwastegasfromthebakingandinjectionmoldingprocesses | 2.85mg/m? | EmissionStandardsofIndustrialPollutantsintheSyntheticResinIndustry(GB31572-2015) | 1.7595 | / | No |
| Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 2 | Outletfororganicwastegasfromdusting,bakingandhardening | 2.35mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2 | 0.2495 | / | No | |
| Gastraphood+waterspraying+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 1 | Outletforwastegasfromelectrophoresisandhardening | 13.6mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2 | 0.3390 | / | No | |
| Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 3 | Duringthewavesolderingprocess(pasteprintingandwavereflow) | 8.77mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2 | 1.8773 | / | No | |
| Particles | Gastraphood+waterspraying+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 1 | Outletforwastegasfromelectrophoresisandhardening | 22mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2 | 3.17239 | / | No |
| Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 3 | Duringthewavesolderingprocess(pasteprintingandwavereflow) | 13.43mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2 | 2.3241 | / | No | |
| Gastraphood+dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | 2 | Outletfororganicwastegasfromdusting,bakingandhardening | 0.51mg/m? | EmissionLimitsofAirPollutants(DB44/27-2001):TimePeriod2,Level2 | 0.0419 | / | No |
| Cookingfume | Fumehood+electrostaticrangehood+15mhighaltitudedischarge | 7 | Cookingfumeoutletatcanteen | 0.492mg/m? | EmissionStandardofCookingFume(GB18483-2001) | 0.1276 | / | No |
| SS | Oilseparationandslagging-hydrolysisandacidification-contactoxidation-MRB | 1 | Domesticwastewatertreatmentstation | 21mg/L | DischargeStandardofPollutantsforMunicipalWastewaterTreatmentPlant(GB18918-2002) | 0.0378 | / | No |
| COD | 35mg/L | 5.103 | / | No | ||||
| Animalandvegetableoil | 0.18mg/L | 0.0241 | / | No | ||||
| Ammonia-nitrogen | 1.08mg/L | 0.145 | 2.16 | No | ||||
| PHvalue | 7.26 | / | / | No | ||||
| BOD | 28mg/L | 4.032 | / | No | ||||
| Totalzinc | Coagulationandsedimentation+hydrolysisandacidification+aeration+biologicaltank+MBR+50%waterreuse | 1 | Domesticwastewatertreatmentstation | 0.000744mg/L | DischargeStandardofWaterPollutantsforElectroplatingDB44/1597-2015 | 0.0004 | / | No |
| COD | 18.68mg/L | 4.215 | / | No | ||||
| SS | 9mg/L | 0.015 | / | No | ||||
| PHvalue | 7.22 | / | / | No | ||||
| Totalphosphorus(inP) | 0.02mg/L | 0.040 | / | No | ||||
| Totalaluminum | 0.0194mg/L | 0.022 | / | No | ||||
| Ammonia-nitrogen | 0.28mg/L | 0.53 | 1.724 | No | ||||
| Totalferrum | 0.00144mg/L | 0.0014 | / | No | ||||
| Petroleum | 0.06mg/L | 0.007 | / | No |
| ChongqingMideaGeneralRefrigerationEquipmentCo.,Ltd. | Anionicsurfactants | Dischargetomunicipalwastewatertreatmentplantafterbeingtreatedbythewastewatertreatmentsystem | 1 | Generalsewagedischargeexitofplantareas | 0.404mg/L | GB/T4754-2011DischargestandardsofchemicalparkwaterpollutantsDB50/457-2012Dischargestandardsofchemicalparkwaterpollutants | 0.031 | 0.4936 | No |
| COD | 117.75mg/L | 4.125 | 12.3809 | No | |||||
| Suspendedsolids | 7.5mg/L | 0.344 | 9.8857 | No | |||||
| PHvalue | 7.645 | / | / | No | |||||
| Ammonia-nitrogen(NH3-N) | 5.02mg/L | 0.263 | / | No | |||||
| Five-dayBOD | 28.2mg/L | 2.105 | 7.4389 | No | |||||
| Toluene | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 4 | 1#4#workshoppaintwastegasoutlets | 0.228mg/m? | GB30981-2020LimitofHarmfulSubstancesinIndustrialProtectiveCoatings;GB37822-2019VolatileOrganicCompoundsEmissionControlStandards;DB50-418-2016IntegratedEmissionStandardsforAtmosphericPollutants | 0.011 | 8.7048 | No | |
| Benzene | 0.137mg/m? | 0.007 | 1.404 | No | |||||
| NMHC | 3.759mg/m? | 0.592 | 28.08 | No | |||||
| Xylene | 1.118mg/m? | 0.135 | 2.808 | No | |||||
| Particles | 11.57mg/m? | 0.964 | 2.2464 | No |
Hefei
| Hefei | COD | Dischargeafterbeingtreatedby | 1 | Theeasternsideof1# | 45mg/L | Implementationofthe | 5.244 | / | No |
| MideaHeating&VentilatingEquipmentCo.,Ltd. | Ammonia-nitrogen | wastewatertreatmentsystemandreachingthestandard | plant | 15mg/L | takeoverstandardsoftheWesternHefeiGroupwastewatertreatmentplantandIntegratedWastewaterDischargeStandard(GB8978-1996)Level3 | 0.42 | / | No | |
| NMHC | RTOequipment | 1 | 1setatthenortheasternsideof3#plant | 3.5mg/m? | IntegratedEmissionStandardsforAtmosphericPollutantsGB16297-1996Level2 | 0.36 | / | No | |
| Condensation+degreasing+filtering+activatedcarbon+catalyticcombustionequipment | 1 | 1setatthesouthwesternsideof4#plant | 4mg/m? | 0.69 | / | No | |||
| Two-stagewaterspray+two-stagedehumidification+activatedcarbonequipment | 3 | 2setsat1#plantand1setat2#plant | 2.17mg/m? | 0.81 | / | No | |||
| Two-stageactivatedcarbonequipment | 1 | 1setattheeasternsideof2#plant | 2.3mg/m? | 0.239 | / | No | |||
| Particles | Filtercartridgedustcollector | 3 | 2at2#plantand1at4#plant | 16mg/m? | 6.02 | / | No |
HubeiMideaRefrigeratorCo.,
Ltd
| HubeiMideaRefrigeratorCo.,Ltd | COD | Dischargedomesticsewageintheplanttothemunicipalsewagesystemafterpretreatment | 1 | Domesticsewageoutletsattheplant | 65mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996) | 12.02 | 15 | No |
| Ammonia-nitrogen | 3.49mg/L | 1.55 | 2.5 | No | |||||
| BOD | 22.35mg/L | 4.13 | / | No | |||||
| SS | 65.7mg/L | 12.1 | / | No |
| Animalandvegetableoil | 0.89mg/L | 0.59 | / | No | ||
| COD |
Freezerspayingwastewaterisdischargedtothemunicipalsewagesystemafterfloatation+acidification+aerobicsludgedigestion+filtrationandother
processes
| 1 | Wastewateroutletsatthefreezerbranchplant | 70mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996) | 2.8 | 15 | No | ||
| Ammonia-nitrogen | 3.96mg/L | 0.158 | 2.5 | No | ||||
| BOD | 22.82mg/L | 0.91 | / | No | ||||
| SS | 56.5mg/L | 2.26 | / | No | ||||
| Animalandvegetableoil | 1.01mg/L | 0.04 | / | No | ||||
| Petroleum | 1.08mg/L | 0.04 | / | No | ||||
| NMHC | 15mdischargeafterlightandoxygenpurification+activatedcarbonadsorption | 1 | Firstinstallationbranchwastegasoutlets | 6.87mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 1.47 | / | No |
| 1 | Secondinstallationbranchwastegasoutlets | 15.4mg/m? | 3.03 | / | No | |||
| 1 | Injectionmoldingworkshopwastegasoutlets | 1.22mg/m? | 0.35 | / | No | |||
| NMHC | 15mhighaltitudedischargeafterdryfiltration+lightandoxygenpurification+activatedcarbon | 1 | Extrusionworkshopwastegasoutlets | 0.97mg/m? | 0.43 | / | No | |
| NMHC | 15mhighaltitudeemission | 8 | Coldcabinetbranchwastegasoutlets | 1.02mg/m? | 0.13 | / | No | |
| Particles | 1 | <20mg/m? | 0.04 | / | No |
Foshan
| Foshan | COD | Dischargeafterbeingtreatedby | 1 | Thesouthernsideof2# | 50mg/L | DischargeLimitsofWater | 0.18 | 0.228 | No |
| ShundeMideaWashingAppliancesManufacturingCo.,Ltd.(theWashingandSterilizingAppliancesPark) | SS | wastewatertreatmentsystemandreachingthestandard | plantintheWashingandSterilizingAppliancesPark | 11mg/L | Pollutants(DB44/26-2001)ofGuangdongProvince | 0.0396 | / | No | |
| BOD5 | 12.2mg/L | 0.04392 | / | No | |||||
| Petroleum | 0.1mg/L0.964mg/L | 0.0036 | / | No | |||||
| Ammonia-nitrogen | 0.00571 | / | No | ||||||
| Benzene | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 1 | Thesouthernsideof2#plantintheWashingandSterilizingAppliancesPark | 0.03mg/m? | EmissionStandardofVolatileOrganicCompoundsforFurnitureManufacturing(DB44/814-2010) | 0.0197 | / | No | |
| Tolueneandxylene | 0.29mg/m? | 0.1406 | / | No | |||||
| VOCS | 6.43mg/m? | 0.58372 | / | No |
WuhuMideaKitchen&BathAppliancesMfg.Co.,Ltd.
| WuhuMideaKitchen&BathAppliancesMfg.Co.,Ltd. | COD | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | WesterngateoftheWuhuplant | 167.75mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996) | 66.4 | 70.898 | No |
| Ammonia-nitrogen | 5.87mg/L | 2.3 | 2.496 | No | |||||
| BOD5 | 28.58mg/L | 11.3 | / | No | |||||
| Petroleum | 5.63mg/L | 2.3 | / | No | |||||
| Totalphosphorus | 0.535mg/L | 0.21 | / | No | |||||
| Fluoride | 1.43mg/L | 0.57 | / | No | |||||
| Soot | 15mhighaltitudedischarge | 45 | Plantsateachworkshop | <20mg/m? | EmissionStandardofAirPollutantsforBoiler(GB13271-2014) | 0.032 | 0.48 | No | |
| Sulfurdioxide | 12.67mg/m? | 1.75 | 0.658 | No |
| Nitrogenoxide | 56mg/m? | 5.81 | 3.6 | No | |||
| Particles | Highaltitudedischargeafterbeingtreatedbywastegastreatmentstation | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 17.37 | / | No | |
| Xylene | 0.53mg/m? | 0.28 | / | No | |||
| VOCs | 0.2mg/m? | EmissionControlStandardforIndustrialEnterprisesVolatileOrganicCompounds(DB13-2322-2016) | 0.67 | / | No |
WuxiLittleSwanElectricCo.,Ltd
| WuxiLittleSwanElectricCo.,Ltd | COD | Dischargetomunicipalsewagenetwork | 1 | Exitatthemiddlegateoftheplant | 284mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996) | 56.4645 | 123.8994 | No |
| SS | 191mg/L | 25.151 | 87.2473 | No | |||||
| Animalandvegetableoil | 2.41mg/L | 1.7278 | 10.7034 | No | |||||
| Totalphosphorus | 3.65mg/L | 0.6713 | 1.0701 | No | |||||
| Totalnitrogen | 47.7mg/L | 7.0688 | 11.2612 | No | |||||
| Ammonia-nitrogen | 36.5mg/L | 5.1779 | 6.6906 | No | |||||
| Particles | Highaltitudedischargeaftertreatment | 11 | BuildingsA,C,andD | ND | IntegratedEmissionStandardsforAtmosphericPollutants | 0.4382 | 2.0696 | No | |
| VOCS | Gastraphood+waterspraying+ | 1.35mg/m? | 0.8 | 1.2218 | No |
| Sulfurdioxide | dryfiltering+UV+activatedcarbon+15mhighaltitudedischarge | ND | (GB16297-1996)/TianjinEmissionControlStandardforIndustrialEnterprisesVolatileOrganicCompounds(DB12/524-2014)/EmissionStandardsofIndustrialPollutantsintheSyntheticResinIndustry(GB31572-2015)/EmissionStandardofAirPollutantsforBoiler(GB13271-2014) | 0.1187 | 0.624 | No | |
| Nitrogenoxide | 27mg/m? | 0.8784 | 3.38 | No |
GuangdongMideaKitchenAppliancesManufacturingCo.,Ltd
| GuangdongMideaKitchenAppliancesManufacturingCo.,Ltd | COD | Dischargetothemunicipalsewagesystemafterbeingtreatedbywastewatertreatmentsystem | 1 | TheeasternsideofwastewatertreatmentstationinMalongbase | 59mg/L | TheDischargeLimitsofWaterPollutantsinGuangdongDB-44/26-20EmissionStandardofVolatileOrganicCompoundsforFurnitureManufacturing(DB44/814-2010)/EmissionStandardofVolatileOrganicCompoundsforSurfaceCoatingofAutomobileManufacturingIndustry(DB44/816-2010)/Emissio | 19.11 | 22.77 | No |
| Ammonia-nitrogen | 0.572mg/L | 0.455 | 4.554 | No | |||||
| Particles | 20mhighaltitudedischargeafterbeingtreatedbywastegastreatmentequipmentandreachingthestandard | 112 | 26outletsatA1plant,47outletsatA2plant,21outletsatB2plant,9outletsatC2plant,2outletsatC3plant,1outletatwastewatertreatmentstationand6outletsatcanteen | 10.1mg/m? | 11.15 | / | No | ||
| Sulfurdioxide | 5mg/m? | 0.444 | 1.055 | No | |||||
| Nitrogenoxide | 7mg/m? | 3.083 | 10.314 | No | |||||
| Benzene | ND | 0.027 | / | No | |||||
| Tolueneandxylene | 0.276mg/m? | 1.55 | / | No | |||||
| VOCs | 3.99mg/m? | 26.005 | 35.051 | No |
| NMHC | 3.75mg/m? | nStandardsofIndustrialPollutantsintheSyntheticResinIndustry(GB31572-2015)/GuangdongProvinceEmissionLimitsofAirPollutants(DB44/27-2001)/EmissionStandardofVolatileOrganicCompoundsforPrintingIndustry(DB44/815-2010)/EmissionStandardofCookingFume(onTrial)(GB18483-2001) | 1.694 | / | No | ||
| Styrene | 2.6mg/m? | 0.254 | / | No | |||
| Cookingfume | 15mhighaltitudedischargeafterbeingtreatedbyoilfumepurificationfacilityandreachingthestandard | 0.77mg/m? | 0.17 | / | No |
GuangdongMeizhiPrecision-ManufacturingCo.,Ltd
| GuangdongMeizhiPrecision-ManufacturingCo.,Ltd | COD | Dischargeafterbeingtreatedbywastewatertreatmentstation | 1 | Nearthewastewatertreatmentstationinthenorthsideoftheplant | 27mg/L | ThedischargelimitsofwaterpollutantsinGuangdongDB-44/26-2001thesecondtimeperiodLevel2 | 13.12 | 16.28 | No |
| Ammonia-nitrogen | 2.12mg/L | 0.32 | 2.034 | No |
Guangd
| Guangd | COD | Dischargeafterbeingtreatedby | 1 | Nearthewastewater | 42mg/L | Guangdongdischarge | 5.94 | 6.046 | No |
| ongMeizhiCompressorLimited | Ammonia-nitrogen | wastewatertreatmentstation | treatmentstationinthenorthsideoftheplant | 0.282mg/L | standardofwaterpollutantsforelectroplatingDB-441597-2015,before1September2012 | 0.045 | 0.756 | No |
AnhuiMeizhiCompressorCo.,Ltd.
| AnhuiMeizhiCompressorCo.,Ltd. | COD | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | Thewesternsideofthecomprehensivewastewatertreatmentstation | 32mg/L | ImplementationofthetakeoverstandardsoftheWesternHefeiGroupwastewatertreatmentplantandIntegratedWastewaterDischargeStandard(GB8978-1996)Level3 | 7.01 | / | No |
| Ammonia-nitrogen | 1.60mg/L | 0.23 | / | No | |||||
| Particles | Collectedbygastraphood+15mhighexhaustcylinder | 13 | No.1workshopweldingsootdischargeoutletforwastegas | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 9.782 | 65.45 | No | |
| No.3workshopdischargeoutletfortheweldingwastegas | <20mg/m? | No | |||||||
| Wastegasoutletof1#heat-treatingfurnaceatNo.2workshop | <20mg/m? | EmissionStandardofAirPollutantsforIndustrialKilnandFurnace(GB9078-1996) | No | ||||||
| Wastegasoutletof2#heat-treatingfurnaceatNo.2workshop | <20mg/m? | No |
| WastegasoutletfordiecastingatNo.2workshop | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | No | |
| WastegasoutletfordiecastingatNo.4workshop | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996)EmissionStandardofAirPollutantsforIndustrialKilnandFurnace(GB9078-1996)EmissionStandardofAirPollutantsforIndustrialKilnandFurnace(GB9078-1996) | No | |
| Wastegasoutletof1#heat-treatingfurnaceatNo.4workshop | <20mg/m? | No | ||
| Wastegasoutletof2#heat-treatingfurnaceatNo.4workshop | <20mg/m? | No | ||
| WastegasoutletforelectrophoresisanddryingatNo.1workshop | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | No | |
| WastegasoutletforelectrophoresisanddryingatNo.3workshop | <20mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | No | |
| Wastegasoutletof1#-3#furnaces | <20mg/m? | EmissionStandardofAirPollutantsforBoiler(GB13271-2014) | No |
| Sulfurdioxide | Collectedbygastraphood+15mhighexhaustcylinder | 9 | Wastegasoutletof1#-3#furnaces | 1.5mg/m? | EmissionStandardofAirPollutantsforBoiler(GB13271-2014) | 5.67 | 112.2 | No |
| Outletof1#heat-treatingfurnaceatNo.2workshop | <3mg/m? | AirPollutantEmissionStandards(GB16297-1996)StandardLevel2 | No | |||||
| Outletof2#heat-treatingfurnaceatNo.2workshop | <3mg/m? | No | ||||||
| WastegasoutletfordiecastingatNo.2workshop | <3mg/m? | No | ||||||
| Outletof1#heat-treatingfurnaceatNo.4workshop | <3mg/m? | No | ||||||
| Outletof2#heat-treatingfurnaceatNo.4workshop | <3mg/m? | No | ||||||
| WastegasoutletfordiecastingatNo.4workshop | <3mg/m? | No | ||||||
| Nitrogenoxide | Collectedbygastraphood+15mhighexhaustcylinder | 9 | Wastegasoutletof1#-3#furnaces | 36mg/m? | EmissionStandardofAirPollutantsforBoiler(GB13271-2014) | 4.13 | 33.24 | No |
| Outletof1#heat-treatingfurnaceatNo.2workshop | <3mg/m? | AirPollutantEmissionStandards(GB16297-1996) | No |
| Outletof2#heat-treatingfurnaceatNo.2workshop | <3mg/m? | StandardLevel2 | No | |||||
| WastegasoutletfordiecastingatNo.2workshop | <3mg/m? | No | ||||||
| Outletof1#heat-treatingfurnaceatNo.4workshop | <3mg/m? | No | ||||||
| Outletof2#heat-treatingfurnaceatNo.4workshop | <3mg/m? | No | ||||||
| WastegasoutletfordiecastingatNo.4workshop | <3mg/m? | No | ||||||
| VOCs | Collectedbygastraphood+15mhighexhaustcylinderDirect-firedwastegasincinerator+15mhighexhaustcylinder | 4 | WastegasoutletofthedryingfurnaceatNo.1workshop | 1.35mg/m? | EmissionControlStandardforIndustrialEnterprisesVolatileOrganicCompounds(DB12/524-2020) | 0.279 | 21.6 | No |
| Wastegasoutletof1#dryingfurnaceatNo.3workshop | 0.985mg/m? | |||||||
| DiecastingatNo.2workshop | 0.323mg/m? | |||||||
| DiecastingatNo.4workshop | 0.52mg/m? |
| Welling(Wuhu)MotorManufacturingCo.,Ltd. | Particles | Collectedbygastraphood+dustcollector+activatedcarbon+15mhighexhaustcylinder | 2 | Exhaustfunnels1and2formoldinjection | 21.5mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 7.59 | 23 | No |
| VOCs | Collectedbygastraphood+15mhighexhaustcylinder | 7 | Wastegasoutlets1-7ofthediecastingworkshop | 2.75mg/m? | EmissionStandardofAirPollutantsforIndustrialKilnandFurnace(GB9078-1996) | 2.31 | 3.388 | No | |
| VOCs | Activatedcarbon+UVphotolysis | 2 | Exhaustfunnels1and2fordipcoating | 26.1mg/m? | HebeiProvinceStandardDB13/2322-2016TheConcentrationLimitsatEmissionReferencePointforCoatingOperations | 5.28 | 31 | No | |
| COD | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | Generalwastewateroutlet | 80mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996)chart4Level3 | 2.56 | / | No | |
| Ammonia-nitrogen | 20mg/L | 0.532 | / | No | |||||
| BOD | 12.3mg/L | 2.078 | / | No | |||||
| SS | 59mg/L | 1.9 | / | No | |||||
| Petroleum | 0.95mg/L | 0.2 | / | No |
AnhuiMeizhiPrecisio
nManufac
turingCo.,Ltd.
| AnhuiMeizhiPrecisionManufacturingCo.,Ltd. | COD | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | ThesouthsideofBuilding6fornightshiftatthenorthsideoftheplantarea | 221.75mg/L | IntegratedWastewaterDischargeStandard(GB8978-1996)chart4Level3 | 142.94 | / | No |
| Ammonia-nitrogen | 8.0mg/L | 5.287 | / | No | |||||
| BOD | 58.65mg/L | 54.26 | / | No | |||||
| SS | 41.51mg/L | 27.34 | / | No | |||||
| Petroleum | 1.955mg/L | 1.92 | / | No |
| Particles | Collectedbygastraphood+21mhighexhaustcylinder | 10 | 1-8#weldingwastegasoutlets | 14.77mg/m? | IntegratedemissionstandardsforatmosphericpollutantsGB16297-1996,chart2,Level2 | 13.20 | / | No |
| 9#-10#weldingwastegasoutlets | 17.92mg/m? | / | No | |||||
| 2#outletofstator+rotorheat-treatingfurnace | 5.55mg/m? | / | No | |||||
| 3#outletof2#statorheat-treatingfurnace | 6.7mg/m? | / | No | |||||
| 1#outletofstator+rotorheat-treatingfurnace | 10.8mg/m? | EmissionstandardofairpollutantsforindustrialkilnandfurnaceGB9078-1996,chart2,Level2 | / | No | ||||
| Outletattheheadof3#statorfurnace | 9.17mg/m? | / | No | |||||
| Outletsattheheadof2#statorfurnaceand4#rotorfurnace | 8.675mg/m? | / | No | |||||
| Outletsatthetailof3#and4#statorfurnacesandcomprehensiveoutletfor4aluminummeltingfurnaces | 7.25mg/m? | / | No | |||||
| Wastegasoutletofaluminummeltingfurnace | 7.575mg/m? | / | No | |||||
| Sulfurdioxide | Collectedbygastraphood+21mhighexhaustcylinder | 8 | 1#heat-treatingfurnace | 5.55mg/m? | Emissionlimitstandardsforotherindustrial | 3.813 | / | No |
| 2#heat-treatingfurnace | 6.725mg/m? | / | No |
| 3#heat-treatingfurnace | 10.8mg/m? | furnacesandkilnsintheComprehensiveControlPlanforAirPollutionofIndustrialFurnaces(H.D.Q.[2019]NO.56) | / | No | ||||
| Heat-treatingfurnace | 9.175mg/m? | / | No | |||||
| 1#outletforwastegasfromdrying | 3.25mg/m? | / | No | |||||
| 2#outletforwastegasfromdrying | 4.25mg/m? | |||||||
| 3#outletforwastegasfromdrying | 3mg/m? | |||||||
| 4#outletforwastegasfromdrying | 3mg/m? | / | No | |||||
| Nitrogenoxide | Collectedbygastraphood+21mhighexhaustcylinder | 8 | 1#heat-treatingfurnace | 5.55mg/m? | 14.49 | / | No | |
| 2#heat-treatingfurnace | 6.725mg/m? | / | No | |||||
| 3#heat-treatingfurnace | 10.8mg/m? | / | No | |||||
| Heat-treatingfurnace | 9.175mg/m? | / | No | |||||
| 1#outletforwastegasfromdrying | 3.75mg/m? | / | No | |||||
| 2#outletforwastegasfromdrying | 4.75mg/m? | / | No | |||||
| 3#outletforwastegasfromdrying | 3.75mg/m? | / | No | |||||
| 4#outletforwastegasfromdrying | 4.5mg/m? | / | No | |||||
| VOCs | Direct-firedwastegasincinerator+21mhighexhaust | 4 | 1#outletforwastegasfromdrying | 4.3975mg/m? | NMHCemissionsmeettherelevantstandardlimit | 2.877 | / | No |
| cylinder | 2#outletforwastegasfromdrying | 3.635mg/m? | requirementsinTable1ofShanghaiIntegratedEmissionStandardsforAtmosphericPollutants(DB31/933-2015) | / | No | ||
| 3#outletforwastegasfromdrying | 4.6325mg/m? | / | No | ||||
| 4#outletforwastegasfromdrying | 3.955mg/m? | / | No |
HuaianWellingMotorManufacturingCo.,Ltd
| HuaianWellingMotorManufacturingCo.,Ltd | Particles | Gastraphood+cottonfilter+activatedcarbon+15mhighexhaustcylinder | 2 | 5#wastegasoutlet:outsidetheinductordipcoatingroom8#wastegasoutlet:outsidethereactordipcoatingroom | 4.1mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 0.338 | 0.97 | No |
| NMHC | 2.5mg/m? | IntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 0.254 | 0.3078 | No | ||||
| Styrene | 0.483mg/m? | EmissionStandardsforOdorPollutants(GB14554-93) | 0.03 | 0.032 | No |
HefeiMideaLaundryApplianceCo.,Ltd.
| HefeiMideaLaundryApplianceCo.,Ltd. | COD | Dischargeafterbeingtreatedbywastewatertreatmentstation | 1 | Theeasternsideofwastewatertreatmentstation | 38.6mg/L | ImplementationofthetakeoverstandardsoftheWesternHefeiGroupwastewatertreatmentplantandIntegratedWastewaterDischargeStandard(GB8978-1996)Level3 | 8.03 | 58.150 | No |
| Ammonia-nitrogen | Theeasternsideofwastewatertreatmentstation | 1.35mg/L | 0.799 | / | No |
| Particles | 15mhighaltitudedischargeafterbeingtreatedbycyclone+filtercartridgedustcollector | 2 | 1outletat2#plant,1outletat6#plant | <20mg/m? | Table5oftheEmissionStandardsofIndustrialPollutantsintheSyntheticResinIndustry(GB31572-2015):SpecialEmissionLimitRequirements | 0.28 | / | No |
| Particles | 15mhighaltitudedischargeafterbeingtreatedbywaterspraying+dedusting+UVphotolysis+activatedcarbon | 1 | 1outletat3#plant | <20mg/m? | 1.61 | / | No | |
| NMHC | 1.52mg/m? | 0.29 | / | No | ||||
| NMHC | 15mhighaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 3 | 1outletat2#plant | 1.86mg/m? | 0.28 | / | No | |
| NMHC | 15mhighaltitudedischargeafterbeingtreatedbywastegastreatmentstation | 6 | SixpiecesofPlantNo.6 | 1.54mg/m? | 0.37 | / | No | |
| NMHC | 15mhighaltitudedischargeafterbeingtreatedbylow-temperatureplasma | 2 | 1outletat1#plant,1outletat5#plant | 1.48mg/m? | 0.34 | / | No | |
| NMHC | 15mhighaltitudedischargeafterbeingtreatedbyphotocatalystandactivatedcarbon | 1 | 1outletat3#plant | 3.96mg/m? | 0.38 | / | No |
HandanMideaAir-ConditioningEquipmentCo.,
| HandanMideaAir-ConditioningEquipmentCo., | NMHC | 15mhighaltitudedischargeafterbeingtreatedbyenvironmentalprotectionequipment | 9 | 1#,2#plants | 7.97mg/m? | 1)NMHC:ImplementationoftheemissionconcentrationlimitsonorganicchemicalsinTable1ofEmissionControlStandardforIndustrial | 7.01 | / | No |
| Particles | 7 | 1#,2#,3#plants | 6.2mg/m? | 3.68 | / | No | |||
| Nitrogenoxide | 7 | 1#,2#,3#plants | <3mg/m? | 1.78 | 2.02 | No | |||
| Sulfurdioxide | 7 | 1#,2#,3#plants | <3mg/m? | 1.78 | 2.02 | No |
| Ltd. | Tinanditscompounds | 4 | 2#plant | 5.3mg/m? | EnterprisesVolatileOrganicCompounds(DB13/2322-2016)2)Sulfurdioxide/nitrogenoxides/particles:ImplementationofthenewfurnacestandardsinTable1andTable2ofEmissionStandardofAirPollutantsforIndustrialKilnandFurnace(DB13/1640-2012)3)Tinanditscompounds:ImplementationoftherequirementsofLevel2intheIntegratedEmissionStandardsforAtmosphericPollutants(GB16297-1996) | 1.99 | / | No | |
| COD | Dischargeafterbeingtreatedbywastewatertreatmentsystemandreachingthestandard | 1 | Northsideofthepowerhouse | 122mg/L | RequirementsforinflowwaterqualityofwastewatertreatmentplantinHandanEconomicandTechnologicalDevelopmentZone | 3.05 | 8.97 | No | |
| Ammonia-nitrogen | 1 | 7.51mg/L | 0.19 | 0.7 | No | ||||
| pH | 1 | 6.94 | / | / | No | ||||
| Suspendedsolids | 1 | 45mg/L | 1.13 | / | No | ||||
| Petroleum | 1 | 0.10mg/L | IntegratedWastewater | / | / | No |
| Fluoride | 1 | 2.91mg/L | DischargeStandard(GB8978-1996)chart4Level3 | / | / | No |
TheconstructionofpollutionpreventionfacilitiesandtheiroperationDuringtheReportingPeriod,allsubsidiarieshavestrictlyabidedbythelawsandregulationsrelatedtoenvironmentprotection,andnomajorenvironmentalpollutionincidentsoccurred.Allsubsidiarieshavesetupreliablewastewaterandgastreatmentsystems.Throughregularmonitoring,supervisionandinspectionmechanisms,aswellasthird-partytesting,itisensuredthatthedischargeofwastewater,wastegasandsolidwasteduringtheproductionandoperationprocessmeetsthenationalandlocallawsandregulations.Thereisnoexcessivedischargebyanysubsidiary,whichisincompliancewiththerelevantrequirementsoftheenvironmentadministrations.TheenvironmentaleffectevaluationofconstructionprojectsandotheradministrativepermitsinrelationtoenvironmentalprotectionAllsubsidiariesstrictlyobservethelawsandregulationsgoverningenvironmentalprotection,andallconstructionprojectsareincompliancewiththeenvironmentaleffectrequirementsandotherrules,withnomisdeedsduringtheReportingPeriod.Onceaconstructionprojectisfinished,athird-partytestinginstitutionishiredtoexamineindexesincludingwastewater,wastegasandnoise,andthecompilationandapprovaloftheenvironmentaleffectevaluationreportisfinishedintime.ContingencyplansforenvironmentalaccidentsAllsubsidiarieshavefinishedthecompilationandapprovaloftheircontingencyplansforenvironmentalaccidents.Emergencymechanismsforenvironmentalpollutionaccidentshavebeenestablishedandimproved,andthesubsidiaries’abilitytodealwithenvironmentalpollutionaccidentshas
beenenhanced,soastomaintainsocialstability,protectthelives,healthandpropertiesofthepublic,protecttheenvironment,andpromoteacomprehensive,coordinatedandsustainabledevelopmentofthesociety.Accordingtotheaccidentlevels,subsidiarieshaveformulatedrulescoveringworkingprinciples,contingencyplans,riskpreventionmeasures,commandingdepartments,responsibilitiesandlabordivision,andhavefiledthesecontingencyplanswiththegovernment.Environmentself-monitoringplansAllthesubsidiarieshaveformulatedtheirownenvironmentself-monitoringplansaccordingtoChina’srelevantlawsandregulations,,whichinclude:1)Wastegaspollutionsourcemonitoring:Samplingpointsaresetatvariousdischargeportsofwastegasformonitoringonaquarterlybasis;2)Wastewaterpollutionsourcemonitoring:Samplesarefetchedatintakeandoutletportsofwastewatertreatmentstationstomonitorchangesofpollutionsourceofwastewaterandup-to-standardemissionofwastewaterafterbeingtreatedatthewastewatertreatmentstations.MonitoringitemsincludeCODcr,SSandpetroleum,etc.Thedataisuploadedtothegovernmentalmonitoringauthorityonlineandthegovernmentauthorityconductsreal-timemonitoring;3)Noisemonitoring:Noisemonitoringpointsaresetatnoisesensitivepointsandontheborderoffactories.Noiseismonitoredonceinspringandsummerrespectivelyandatdaytimeandatnighttimerespectivelyeachtime;4)Solidwastepollutionsourcemonitoring:Hazardouswasteproducedfromthesubsidiariesishandedovertotheunitswithqualificationsfortreatment,monitoringsystemsareestablished,andrelatedmanagementformsandaccountsaresetup.AdministrativepunishmentsreceivedduringtheReportingPeriodduetoenvironmentalissues
| TheCompanyorsubsidiary | Reasonforpunishment | Regulationviolated | Punishment | ImpactontheCompany | Rectification |
| N/A | N/A | N/A | N/A | N/A | N/A |
Otherenvironment-relatedinformationthatshouldbemadepublicNoneMeasurestakentoreducecarbonemissionsduringtheReportingPeriodandtheresults
√Applicable□N/A(a)TheCompanyreleasedtheGreenStrategyandinspectedthesourceofthecarbonemissionsacrosstheGroupsoastofigureoutitstotalcarbonemissionsandintensity;(b)Itbuiltaprofessionalteamtoanalyzethemeasuresandmethodsforenergysavingandconsumptionreductionscientificallyandtookmeasurestoreducetheconsumptionofwater,electricity,andgaswiththeincrementaldevelopmentoftheCompanyastheprecondition,reducingtheenergycostbyapproximatelyRMB60million;(c)Itreducedtheenergy/materialconsumptionatsourcefromtheperspectivesofgreendesign,greenprocurement,greenmanufacturing,greenlogistics,greenrecycling,andgreenservices,aswellasthefulllifecycleoftheproducts,andproducedlow-carbonproductsthataremoreeco-friendly,suchasthenaturalR290refrigerant,whichcanreducecarbonemissionsbyapproximately2.2milliontonsaccordingtoitsannualsales.Otherenvironment-relatedinformationNone
2.CorporateSocialResponsibility(CSR)
TheCompanyhasvoluntarilydiscloseditsCSRactivities.Attachinggreatimportancetoprotectingthelegalrightsandinterestsofitsshareholders,employees,consumersandbusinesspartners,aswellasthegovernment,thecommunityandotherstakeholders,theCompanystickstoharmoniouscommongrowthwiththem,honorsitscommitments,abidesbylawandmoralprinciples,andcontinuetocontributetothesustainabledevelopmentofthesocietyandtheenvironment.Forfurtherinformation,seetheCompany’sESGReport2021releasedonwww.cninfo.com.cn.
3.EffortsinPovertyAlleviationandRuralRevitalization
3.1SupportthedevelopmentofeducationIn2021,MideaGroupdonatedatotalofRMB20milliontothesponsorshipofShundeMideaSchoolaffiliatedtoEastChinaNormalUniversity(hereinafterreferredtoas"ShundeMideaSchoolofEastChinaNormalUniversity")andtheschoolscholarshipfund.Inaddition,Mideahasalsosupportedthepreparation,construction,anddevelopmentofShundeMideaSchoolofEastChinaNormalUniversitybybuildingresourceplatforms,etc.On28March,theconstructionofShundeMideaSchoolofEastChinaNormalUniversitycommencedinBeijiaoTown,ShundeDistrict.Theschoolisexpectedtoprovideatotalofover5,000primaryandjuniorhighschoolplacesaftercompletion,whichisoffar-reachingsignificancetotheeducationandcomprehensivesocialdevelopmentofBeijiaoTown.
3.2SupportruralrevitalizationTheyear2021isakeyyearforChinatocompletethebattleagainstpovertyandstartthe14thFive-YearPlan.MideaGroupcontinuestoplowdeeperonthebasisoftheoriginalhelpprojectstosupporttheruralrevitalizationstrategy.
LeishanNationalHighSchoolistheonlygeneralseniorhighschoolinLeishanCounty,QiandongnanMiaoandDongAutonomousPrefecture,GuizhouProvince.Themainstructureoftheschool'sgymnasiumhaslongbeenconstructed,butduetotheconstantlackoffundsforinteriordecoration,thegymnasiumhasnotcomeintouse.Inordertoensurethattheschoolgymnasiumwillbeavailableassoonaspossible,MideaGroupinvestedRMB350,000intheconstructionofthegymnasium,thushelpingShundeLeishanNationalHighSchoolimprovethequalityofschoolteaching.Inaddition,tofurtherimprovethemedicalcareservicesofYingmailiTownshipHealthCenterinPayzawatCounty,Xinjiang,MideaGrouphasspentRMB150,000ontheconstructionofthehealthcenter,includingtherenovation,greeningconstruction,andpurchaseofmedicalequipment.
3.3SupportthefightagainstthepandemicDuringthecriticalperiodofpandemicpreventionandcontrol,Mideahasbeenconcernedaboutthefront-linepandemicpreventionpersonnel.InMay2021,MideaGroupspentatotalofRMB400,000onthedonationof500coolfansand80portableairconditionerstothepandemicpreventionteamsintownsandsubdistrictsinShundeDistrict,sendingcoolnesstothepandemicpreventionteamsinsummer.InDecember2021,asthepandemicrecurredinXi'an,MideaspentRMB100,000onthepurchaseof1,200campbedstocreateabetterenvironmentforthefront-linepandemicpreventionpersonnelofXi'anJiaotongUniversitytohavearest.
SectionVISignificantEvents
1.PerformanceofUndertakings
1.1UndertakingsoftheCompany’sactualcontroller,shareholders,relatedpartiesandacquirer,aswellastheCompanyandothercommitmentmakersfulfilledintheReportingPeriodorongoingattheperiod-end
√Applicable□N/A
| Undertaking | Undertakinggiver | Typeofundertaking | Detailsofundertaking | Undertakingdate | Term | Particularsontheperformance |
| Undertakingmadeinofferingdocumentsorshareholdingalternationdocuments | Controllingshareholderandactualcontroller | Maintenanceofindependence | 1.MideaHoldingandHeXiangjianhaveundertakenasfollows:HeXiangjian,MideaHoldingandtheircontrolledenterpriseswillremainindependentfromMideaGroupinrespectofpersonnel,finance,assets,businessandinstitutions,inaccordancewithrelevantlawsandregulationsandregulatorydocuments.Theywillfaithfullyfulfilltheaboveundertaking,andassumethecorrespondinglegalliability.Iftheyfailtofulfilltheirobligationsandresponsibilitiesconferredbytheundertaking,theywillbearthecorrespondinglegalliabilitiesaccordingtorelevantlaws,rules,regulationsandregulatorydocuments. | 28/03/2013 | Long-standing | 1.Therehasbeennoviolationofthisundertaking. |
| Controllingshareholderandactualcontroll | Avoidingcompetitionwithintheindustry | 2.InordertoavoidpossiblecompetitionwithintheindustrybetweenMideaGroupandMideaHoldinganditscontrolledenterprisesaswellasHeXiangjian,hisimmediatefamilyandhiscontrolledcompanies,MideaHoldingandHeXiangjianhaveundertakenasfollows: | 28/03/2013 | Long-standing | 2.Therehasbeennoviolationofthisundertaking. |
| er | (1)NoneoftheentitiesorindividualsmentionedaboveisorwillbeengagedinthesameorsimilarbusinessastheexistingmainbusinessofMideaGroupanditscontrolledcompanies.TheyarenotorwillnotbeengagedorparticipateinsuchbusinessthatiscompetitivetotheexistingmainbusinessofMideaGroupanditscontrolledcompaniesbycontrollingothereconomicentities,institutionsoreconomicorganizations;(2)IfMideaGroupanditscontrolledcompaniesexpandtheirbusinessonthebasisoftheexistingonestothosewheretheabovementionedrelatedentitiesorindividualsarealreadyperformingsuchproductionandoperations,aslongasHeXiangjianisstilltheactualcontrollerofMideaGroup,andMideaHoldingthecontrollingshareholder,theywillagreeonsolvingtheproblemofcompetitionwithintheindustryarisingtherefromwithinareasonableperiod;(3)IfMideaGroupanditscontrolledcompaniesexpandtheirbusinessscopeonthebasisoftheexistingonestothosewheretheabovementionedrelatedsubjectshavenotgoneintoproductionoroperation,aslongasHeXiangjianisstilltheactualcontrollerofMideaGroup,andMideaHoldingthecontrollingshareholder,theywouldundertakeasnottoengageincompetitivebusinesstothenewonesofMideaGroupanditscontrolledcompanies;(4)Inaccordancewitheffectivelaws,regulationsorotherregulatorydocumentsofPeople'sRepublicofChina,aslongasMideaHoldingisidentifiedasthecontrollingshareholderofMideaGroup,andHeXiangjiantheactualcontroller,theywillnotchangeorterminatethisundertaking. |
| (5)MideaHoldingandHeXiangjianshallfaithfullyfulfilltheaboveundertaking,andassumethecorrespondinglegalresponsibilities.Iftheyfailtofulfilltheirobligationsandresponsibilitiesconferredbytheundertaking,theywouldbearthecorrespondinglegalresponsibilitiesaccordingtorelevantlaws,rules,regulationsandregulatorydocuments. | |||||
| Controllingshareholderandactualcontroller | Regulationofrelatedtransactions | 3.InordertoregulatemattersofrelatedtransactionsthatmayoccurinthefuturebetweenMideaGroupandMideaHoldinganditscontrolledcompaniesaswellasHeXiangjian,hisimmediatefamilyandhiscontrolledcompanies,MideaHoldingandHeXiangjianhaveundertakenasfollows:(1)TheywillregulateanyrelatedtransactionswithMideaGroupanditscontrolledcompaniesusingtheirutmosteffortstoreducethem.ForunavoidablerelatedtransactionswithMideaGroupanditscontrolledcompanies,includingbutnotlimitedtocommoditytrading,providingservicestoeachotherorasagent,theywillsignlegalnormativeagreementswithMideaGroup,andgothroughapprovalproceduresinaccordancewithrelatedlaws,regulations,rules,otherregulatorydocuments,andrelevantprovisionsoftheArticlesofAssociationofMideaGroup.Theyguaranteetoofferfairpricesforrelatedtransactions,andfulfilltheinformationdisclosureobligationsinrespectoftherelatedtransactionsaccordingtorelatedlaws,regulations,rules,otherregulatorydocuments,andrelevantprovisionsoftheArticlesofAssociationofMideaGroup.TheyalsoguaranteenottoillegallytransferthefundsorprofitsfromMideaGroup,ordamagetheinterestsofitsshareholdersattheiradvantagesduringtherelatedtransactions. | 28/03/2013 | Long-standing | 3.Therehasbeennoviolationofthisundertaking. |
| (2)TheyshallfulfilltheobligationofwithdrawingfromvotingthatinvolvestheabovementionedrelatedtransactionsatthegeneralmeetingofMideaGroup;(3)TherelatedsubjectmentionedaboveshallnotrequireMideaGrouptooffermorefavorableconditionsthanthosetoanyindependentthirdpartyinanyfairmarkettransactions.(4)Inaccordancewitheffectivelaws,regulationsorotherregulatorydocumentsofPeople'sRepublicofChina,aslongasMideaHoldingisidentifiedasthecontrollingshareholderofMideaGroup,andHeXiangjiantheactualcontroller,theyshallnotchangeorterminatethisundertaking.(5)MideaHoldingandHeXiangjianwillfaithfullyfulfilltheaboveundertakingandassumethecorrespondinglegalliabilities.Iftheyfailtofulfilltheirobligationsandresponsibilitiesconferredbytheundertaking,theywillbearthecorrespondinglegalresponsibilitiesaccordingtorelevantlaws,rules,regulationsandregulatorydocuments. | |||||
| Controllingshareholderandactualcontroller | OnMideaTradeUnionCommitteetransferringitslimitedequityofMideaGroup | 4.On4January2001,theMideaTradeUnionCommitteesignedthe"EquityTransferContract"withfivepeople,namelyHeXiangjian,ChenDajiang,FengJingmei,ChenKangningandLiangJieyin,whereittransferredallitslimitedequityofMideaGroup(22.85%)respectivelytothosefivepeople.AccordingtotheconfirmationletterissuedbymembersoftheMideaTradeUnionCommitteeatthattime,theequitytransferpricewasdeterminedaftermutualdiscussiononthebasisoftheirtrueopinions,thereforetherewasnodisputeorpotentialdispute.On28June2013,FoshanShundeBeijiaoGeneralUnion, | 28/03/2013 | Long-standing | 4.Sofar,thisshareholdingtransferhasnotbroughtaboutanylosscausedbyanydisputeorpotentialdisputes.Therehasbeennoviolationofthisundertaking. |
| superiordepartmentofMideaTradeUnionCommittee,issuedaconfirmationlettertothefactthattheMideaTradeUnionCommitteefundedtheestablishmentofMideaGroupCo.,Ltd.InadditiontheletteralsoconfirmedthatthecouncilofMideaTradeUnionCommitteeisentitledtodisposeanypropertyofthecommittee,andsuchpropertydisposaldoesnotneedanyagreementfromallstaffcommitteemembers.MideaHoldingandHeXiangjian,respectivelythecontrollingshareholderandactualcontrollerofMideaGroupCo.,Ltd.haveundertakenasfollows:ForanylosstoMideaGroupcausedbyanydisputeorpotentialdisputearisingfromthemattersofequitytransfermentionedabove,theyarewillingtoassumefullliabilityforsuchloss. | |||||
| Controllingshareholderandactualcontroller | IssuesaboutPaymentoftheStaffSocialInsuranceandtheHousingProvidentFundinvolvedinMideaGroup'sOverall | 5.MideaHoldingandHeXiangjianhaveundertakentobeliablefor(1)payingsuchexpensesandrelatedexpensesontimebasedontherequirementsofrelevantstatedepartmentsifMideaGroupisrequiredtobeliableforthepaymentofstaffsocialinsurance,housingprovidentfundandthepaymentrequiredbyrelevantstateauthoritiespriortothismerger,(2)payingcorrespondingcompensationforalldirectandindirectlossesincurredbyMideaGroupanditssubsidiariesduetothismerger,(3)indemnifyingandholdingharmlessMideaGroupanditssubsidiariesintimefromsuchexpenseswhenMideaGroupanditssubsidiariesarerequiredtopaytheminadvance. | 28/03/2013 | Long-standing | 5.Sofar,thepaymentofthestaffsocialinsuranceandthehousingprovidentfundhasnotbroughtaboutanycontroversyorpotentialdisputes.Therehasbeennoviolationofthisundertaking. |
| Listing | |||||
| Controllingshareholderandactualcontroller | Issuesaboutassetalteration,assetflawandhouseleasingofMideaGroupanditssubsidiaries | 6.Undertakingsonissuesaboutassetalteration,assetflawandhouseleasingofMideaGroupanditssubsidiariesMideaHoldingandHeXiangjianhaveundertakenasfollows:(1)MideaHoldingwilldoitsutmosttoassistandurgeMideaGroup(includingitssubsidiaries)tocompleterenamingproceduresofrelatedassets,suchasland,housing,trademarks,patentsandstockrights,declaredintherelatedfilesofthismerger.MideaHoldingwillbeliableforallcompensationsoflossescausedbyissuesaboutrenamingproceduresofrelatedassetsmentionedabovetoMideaGroup.(2)MideaHoldingshalldoitsutmosttoassistMideaGroup(includingitssubsidiaries)toapplyforownershipcertificatesoflandandhousingorpropertydeclaredinrelatedfilesofthismerger.(3)MideaHoldingshallassistMideaGroup(includingitssubsidiaries)tore-applyforcorrespondingconstructionproceduresandapplyfortheirownershipcertificatesforhouseswithoutcompleteprocedures,ashappenedinthepast,toapplyfortheownershipcertificate.IfthecompetentauthoritiesrequiresMideaGrouptodismantlebuildingsthatcannotacquirethere-applicationforrealestateregistrationprocedures,MideaHoldingshalldoitsutmosttoprovideassistanceandbeliableforanyrelatedexpensesusedindismantlingsuchbuildingsbyMideaGroup(includingitssubsidiaries).(4)UnderanycircumstancesthatMideaGroupsuffersfrom | 28/03/2013 | Long-standing | 6.Sofar,theissuesaboutassetalteration,assetflawandhouseleasingofMideaGroupanditssubsidiarieshavenotbroughtaboutanycontroversyorpotentialdisputes.Therehasbeennoviolationofthisundertaking.AndMideaHoldingshallhonorthisundertakingbeforeitsexpiration. |
| MideaHoldinghasfurtherundertakenthatwhereaviolationofguaranteesandundertakingsreferredtopreviouslyoccursorsuchguaranteesandundertakingsarenotconsistentwiththerealityandMideaGrouphassufferedanylosstherefrom,MideaHoldingshallcompensateincashormakeupforMideaGroup’slossuponMideaGroup’snoticeinwritingwithin30dayswhenthelossoccursandthelossamountisdefinite. | |||
| Whethertheundertakingisfulfilledontime | Yes | ||
| Specificreasonsforfailingtofulfillanyundertakingandplanforthenextstep | N/A | ||
1.2WhereanyearningsforecastwasmadeforanyoftheCompany’sassetsorprojectsandtheReportingPeriodisstillwithintheforecastperiod,theCompanyshallexplainwhethertheperformanceoftheassetorprojectreachestheearningsforecastandwhy
□Applicable√N/A
2.OccupationoftheCompany’sCapitalbytheControllingShareholderorItsRelatedPartiesforNon-OperatingPurposes
□Applicable√N/ANosuchcasesintheReportingPeriod.
3.IllegalProvisionofGuaranteesforExternalParties
□Applicable√N/ANosuchcasesintheReportingPeriod.
4.ExplanationoftheBoardofDirectorsRegardingtheLast"Non-standardAuditOpinion"
□Applicable√N/A
5.ExplanationoftheBoardofDirectors,theSupervisoryCommitteeandIndependentDirectors(IfAny)Regardingthe"Non-standardAuditOpinion"fortheReportingPeriod
□Applicable√N/A
6.ChangesinAccountingPoliciesandAccountingEstimatesasComparedtotheFinancialReportforthePriorYear,aswellasCorrectionofMaterialAccountingErrors
√Applicable□N/AA.AccountingStandardNo.21forBusinessEnterprises—LeasesPursuanttotheNoticeofRevisingandIssuingtheAccountingStandardNo.21forBusinessEnterprises—Leases(CK[2018]No.35)issuedbytheMinistryofFinanceon7December2018,theCompanyhasadopted,startingfrom1January2021,therevisedAccountingStandardNo.21for
BusinessEnterprises—Leases(hereinafterreferredtoasthe“NewLeaseStandard”).Therefore,therelevantaccountingpoliciesoftheCompanyneededtobeadjustedaccordingly.InaccordancewiththeNewLeaseStandard,theadjustmentstotheCompany'srelatedaccountingpoliciesareasfollows:
a.UndertheNewLeaseStandard,exceptforshort-termleasesandleasesoflow-valueassets,thelesseeswillnolongerdistinguishbetweenfinanceleasesandoperatingleases.Allleaseswillbesubjecttothesameaccountingtreatment,andtheright-of-useassetsandleaseliabilitiesshallberecognized.b.Forright-of-useassets,ifthelesseecanreasonablyascertainthattheownershipoftheleaseholdpropertywillbeobtainedwhentheleasetermexpires,itshalldepreciatetheleaseholdpropertyoveritsremainingservicelife.Ifitcannotreasonablyascertainwhethertheownershipoftheleaseholdpropertywillbeobtainedwhentheleasetermexpires,theCompanywilldepreciatetheleaseholdpropertyovertheleasetermortheremainingservicelife,whicheverisshorter.Atthesametime,thelesseeshalldeterminewhethertheright-of-useassetisimpairedandperformtheaccountingtreatmentfortheidentifiedimpairmentlosses.c.Forleaseliabilities,thelesseeshallcalculatetheinterestexpensesincurredbytheleaseliabilitiesineachperiodoftheleasetermandincludethemintheprofitorlossforthecurrentperiod.d.Forshort-termleasesandleasesoflow-valueassets,thelesseemaychoosenottorecognizetheright-of-useassetsandleaseliabilities,andincludetherelevantleasepaymentsintorelevantassetcostortheprofitorlossforthecurrentperiodinthestraight-linemethodorothersystematicallyreasonablemethodsineachperiodoftheleaseterm.AspertherequirementsforthetransitiontotheNewLeaseStandard,theCompanyhasprepared,startingfrom1January2021,itsfinancialstatementsaccordingtotheNewLeaseStandard,withnoretrospectiveadjustmentstothecomparabledataof2020andthusnoimpactontherelevantfinancialinformationof2020.Theaforesaidchangesinaccountingpoliciesdidnothaveamaterialimpactonthefinancialcondition,operatingresultsandcashflowsoftheCompany.
B.InterpretationNo.14oftheAccountingStandardsforBusinessEnterprises(CK[2021]No.1)Effectivestartingfrom26January2021,thisaccountingpolicycontainsregulationswithrespecttotheaccountingtreatmentsanddisclosurerequirementsforadjustmentstofinancialinstrumentsandleaseliabilitiescausedbythebenchmarkinterestratereform.TheCompanyhaspreparedthefinancialstatementsfortheyearended31December2021accordingtotheaforesaidregulatorydocument,whichhadnosignificantimpactonthefinancialstatements.C.TheCircularonIssuingInterpretationNo.15oftheAccountingStandardsforBusinessEnterprisesTheregulationswithrespectto“theaccountingtreatmentsforsalesofproductsorby-productsproducedbeforeafixedassetisreadyforitsintendeduseorduringthedevelopmentprocess”and“judgmentsononerouscontracts”intheCirculartookeffecton1January2022;andthoseregarding“thepresentationoffundsundercentralizedmanagement”tookeffecton31December2021.TheCompanyhaspreparedthefinancialstatementsfortheyearended31December2021accordingtotheaforesaidregulatorydocument,whichhadnosignificantimpactonthefinancialstatements.D.TheRegulationsofAccountingTreatmentsforRentalWaiversasaResultofCOVID-19(CK[2020]No.10)ThisaccountingpolicyprovidesapracticalexpedientforrentalwaiversdirectlyasaresultofCOVID-19thatmeetcertainconditions.Ifacompanyappliesthepracticalexpedient,itdoesnotneedtoassesswhetheranychangeoccurstoalease,orre-assesstheclassificationofleases.AspertheregulatorydocumentCK[2021]No.9,thepracticalexpedientisforleasepayablesbefore30June2022.TheCompanyhaspreparedthefinancialstatementsfortheyearended31December2021accordingtotheaforesaidpracticalexpedient,whichhadnosignificantimpactonthefinancialstatements.E.ThefifthQ&AfortheImplementationoftheAccountingStandardsforBusinessEnterprisesin2021Theseaccountingpolicychangeswillimpact“costofsales”and“sellinganddistributionexpenses”inthe
incomestatement,butnot“operatingrevenue”and“operatingprofit”.Thisisexpectedtoaffectfinancialindicatorssuchas“grossprofitmargin”,butwithnomaterialimpactonthefinancialpositionandoperatingresultsoftheCompany.Note:Forfurtherinformationaboutthechangestotheaccountingpolicies,pleaserefertoNote2(31)tothefinancialstatements.
7.ReasonforChangesinScopeoftheConsolidatedFinancialStatementsasComparedtotheFinancialReportforthePriorYear
√Applicable□N/AThedetailedinformationofmajorsubsidiariesincludedintheconsolidationscopeinthecurrentperiodissetoutinNotes5and6.EntitiesnewlyincludedintheconsolidationscopeinthecurrentperiodthroughacquisitionmainlyincludeBeijingWandongMedicalTechnologyCo.,Ltd.anditssubsidiaries(hereinafter,“WDM”)andHitachiCompressor(Thailand)Ltd.(pleaserefertoNote5(1)(a)),whiledetailsofthosethroughincorporationcanbefoundinNote5(2)(a).ThedetailedinformationofsubsidiariesnolongerincludedintheconsolidationscopeinthecurrentperiodissetoutinNote5(2)(b).
8.EngagementandDisengagementofCPAFirmCPAfirmatpresent
| NameofthedomesticCPAfirm | PricewaterhouseCoopersZhongTianLLP |
| TheCompany’spaymenttothedomesticCPAfirm | RMB8.975million |
| ConsecutiveyearsoftheauditserviceprovidedbythedomesticCPAfirm | Sevenyears |
| NamesofthecertifiedpublicaccountantsfromthedomesticCPAfirm | YaoWenpingandWuFangfang |
| ConsecutiveyearsoftheauditserviceprovidedbythecertifiedpublicaccountantsfromthedomesticCPAfirm | Twoyearsandoneyearrespectively |
WhethertheCPAfirmwaschangedinthecurrentperiod
□Yes√NoEngagementofanyCPAfirmforinternalcontrolaudit,financialadvisororsponsor
□Applicable√N/A
9.PossibilityofDelistingafterDisclosureofthisReport
□Applicable√N/A
10.BankruptcyandReorganization
□Applicable√N/ANosuchcasesintheReportingPeriod.
11.MaterialLitigationandArbitration
□Applicable√N/ANosuchcasesintheReportingPeriod.
12.PunishmentsandRectifications
□Applicable√N/ANosuchcasesintheReportingPeriod.
13.CreditConditionsoftheCompanyaswellasItsControllingShareholderandActualController
□Applicable√N/A
14.SignificantRelatedTransactions
14.1Continuingrelatedtransactions
√Applicable□N/A
| Relatedtransactionparty | Relation | Typeofthetransaction | Contentsofthetransaction | Pricingprinciple | Transactionprice | Transactionamount(RMB’000) | Proportioninthetotalamountsoftransactionofthesamekind | Approvedtransactionline(RMB’000) | Overapprovedline | Modeofsettlement | Obtainablemarketpriceforthetransactionofthesamekind | Disclosuredate | Indextothedisclosedinformation |
| (%) | |||||||||||||
| GuangdongYingheEnterpriseManagementCo.,Ltd. | ControlledbyfamilymemberofCompany’sactualcontrollerinthe12monthsbeforetheReportingPeriod | Procurement | Procurementofgoods | Marketprice | - | 1,481,457 | 0.5692% | 1,800,000 | No | Paymentafterdelivery | - | 30April2021 | www.cninfo.com.cn |
| OrinkoAdvancedPlasticsCo.,Ltd. | ControlledbyfamilymemberofCompany’sactualcontroller | Procurement | Procurementofgoods | Marketprice | - | 1,506,809 | 0.5789% | 1,700,000 | No | Paymentafterdelivery | - | 30April2021 | www.cninfo.com.cn |
| MideaRealEstateHoldingLimited | ControlledbyCompany’sactualcontroller | Sale | Saleofgoods | Marketprice | - | 202,625 | 0.0673% | 471,000 | No | Paymentafterdelivery | - | 30April2021 | www.cninfo.com.cn |
| Total | -- | -- | 3,190,891 | -- | 3,971,000 | -- | -- | -- | |||||
| Detailsofanysalesreturnofalargeamount | Zero | ||||||||||||
| GivetheactualsituationintheReportingPeriod(ifany)whereaforecasthadbeenmadeforthe | ThelineforcontinuingrelatedtransactionsbetweentheCompanyandtherelatedpartiesandtheirsubsidiariesdidnotexceedthetotalamountofcontinuingrelatedtransactionsestimatedbytheCompanybytype. | ||||||||||||
| totalamountsofcontinuingrelated-partytransactionsbytypetooccurinthecurrentperiod | |
| Reasonforanysignificantdifferencebetweenthetransactionpriceandthemarketreferenceprice(ifapplicable) | N/A |
Note:GuangdongYingheEnterpriseManagementCo.,Ltd.istheholding/parentcompanyofGuangdongWellkeyElectricMaterialCo.,Ltd.andAnhuiWellkeyElectricMaterialCo.,Ltd.
14.2Relatedtransactionsregardingpurchaseorsalesofassetsorequityinterests
□Applicable√N/ANosuchcasesintheReportingPeriod.
14.3Relatedtransactionsarisingfromjointinvestmentsinexternalparties
□Applicable√N/ANosuchcasesintheReportingPeriod.
14.4Creditsandliabilitieswithrelatedparties
□Applicable√N/ANosuchcasesintheReportingPeriod.
14.5Transactionswithrelatedfinancecompanies
□Applicable√N/ATheCompanydidnotmakedepositsin,receiveloansorcreditfromandwasnotinvolvedinanyotherfinancebusinesswithanyrelatedfinancecompanyoranyofitsrelatedparties.
14.6TransactionsbetweenfinancecompaniescontrolledbytheCompanyandrelatedparties
√Applicable□N/AMakingdeposits
| Relatedparty | Relationship | Upperlimitfordailydeposits(RMB’000) | Rangeofinterestrate | Openingbalance(RMB’000) | Changeinthecurrentperiod | Closingbalance(RMB’000) | |
| Totalamountdepositedin | Totalamountwithdrawnin | ||||||
| thecurrentperiod(RMB’000) | thecurrentperiod(RMB’000) | ||||||
| GuangdongShundeRuralCommercialBankCompanyLimited | CompanywhereaformerseniorexecutiveoftheCompanyactedasadirectorwithin12monthsaftertheseniorexecutive’sresignationfromtheCompany | 10,000,000 | 0.30% | 45,700 | 163,863,760 | 163,838,920 | 70,540 |
14.7Othersignificantrelatedtransactions
□Applicable√N/ANosuchcasesintheReportingPeriod.
15.SignificantContractsandTheirExecution
15.1Trusteeship,contractingandleasing
15.1.1Trusteeship
□Applicable√N/ANosuchcasesintheReportingPeriod.
15.1.2Contracting
□Applicable√N/ANosuchcasesintheReportingPeriod.
15.1.3Leasing
□Applicable√N/A
NosuchcasesintheReportingPeriod.
15.2Majorguarantees
√Applicable□N/A
Unit:RMB'000
| GuaranteesprovidedbytheCompanyanditssubsidiariesforexternalparties(excludingthoseforsubsidiaries) | |||||||||||
| Guaranteedparty | Disclosuredateoftheguaranteelineannouncement | Lineofguarantee | Actualoccurrencedate(dateofagreementsigning) | Actualguaranteeamount | Typeofguarantee | Termofguarantee | Dueornot | Guaranteeforarelatedpartyornot | |||
| Nosuchcases | |||||||||||
| TotalexternalguaranteelineapprovedduringtheReportingPeriod(A1) | 0 | TotalactualexternalguaranteeamountduringtheReportingPeriod(A2) | 0 | ||||||||
| TotalapprovedexternalguaranteelineattheendoftheReportingPeriod(A3) | 0 | TotalactualexternalguaranteebalanceattheendoftheReportingPeriod(A4) | 0 | ||||||||
| GuaranteesprovidedbytheCompanyforitssubsidiaries | |||||||||||
| Guaranteedparty | Disclosuredateoftheguaranteelineannouncement | Lineofguarantee | Actualoccurrencedate(dateofagreementsigning) | Actualguaranteeamount | Typeofguarantee | Termofguarantee | Dueornot | Guaranteeforarelatedpartyornot | |||
| MideaGroupFinanceCo.,Ltd. | 2021-4-30 | 8,400,000 | - | Jointliability | Oneyear | No | No | ||||
| GDMideaAir-ConditioningEquipmentCo.,Ltd. | 2021-4-30 | 17,440,000 | 2021-01-15 | 1,787,230 | Jointliability | Oneyear | No | No | |||
| GuangzhouHualingRefrigeratingEquipmentCo.,Ltd. | 2021-4-30 | 1,160,000 | 2021-01-01 | 16,940 | Jointliability | Oneyear | No | No | |||
| FoshanMideaCarrierAir-ConditioningEquipmentCo.,Ltd. | 2021-4-30 | 360,000 | 2021-03-22 | 570 | Jointliability | Oneyear | No | No | |||
| GDMideaGroupWuhuAir-ConditioningEquipmentCo.,Ltd. | 2021-4-30 | 500,000 | - | Jointliability | Oneyear | No | No | |
| WuhuMatyAir-ConditioningEquipmentCo.,Ltd. | 2021-4-30 | 690,000 | 2021-08-02 | 240 | Jointliability | Oneyear | No | No |
| GuangdongMideaPrecisionMoldingTechnologyCo.,Ltd. | 2021-4-30 | 65,000 | - | Jointliability | Oneyear | No | No | |
| MideaGroupWuhanRefrigerationEquipmentCo.,Ltd. | 2021-4-30 | 72,000 | - | Jointliability | Oneyear | No | No | |
| HainanMideaUnitedMaterialsSupplyCo.Ltd. | 2021-4-30 | 200,000 | - | Jointliability | Oneyear | No | No | |
| HandanMideaAir-ConditioningEquipmentCo.,Ltd. | 2021-4-30 | 110,000 | 2021-06-21 | 740 | Jointliability | Oneyear | No | No |
| ChongqingMideaAir-ConditioningEquipmentCo.,Ltd. | 2021-4-30 | 200,000 | - | Jointliability | Oneyear | No | No | |
| GuangdongMideaKitchenAppliancesManufacturingCo.,Ltd. | 2021-4-30 | 7,225,000 | 2021-01-29 | 2,302,270 | Jointliability | Oneyear | No | No |
| GuangdongWitolVacuumElectronicManufactureCo.,Ltd | 2021-4-30 | 100,000 | 2021-01-26 | 6,300 | Jointliability | Oneyear | No | No |
| WuhuMideaKitchenAppliancesManufacturingCo.,Ltd. | 2021-4-30 | 2,020,000 | 2021-12-03 | 6,640 | Jointliability | Oneyear | No | No |
| JiangsuMideaCleaningAppliancesCo.,Ltd | 2021-4-30 | 640,000 | 2021-01-04 | 83,780 | Jointliability | Oneyear | No | No |
| MaytechTechnologyCo.,LTD. | 2021-4-30 | 75,000 | 2021-05-21 | 5,000 | Jointliability | Oneyear | No | No |
| HainanMeizhiCanghaiE-commerceServiceCo.,Ltd. | 2021-4-30 | 20,000 | - | Jointliability | Oneyear | No | No | |
| HainanMeizhiHangjianElectricApplianceCo.,Ltd. | 2021-4-30 | 20,000 | - | Jointliability | Oneyear | No | No | |
| GDMideaHeating&VentilatingEquipmentCo.,Ltd. | 2021-4-30 | 2,000,000 | 2021-01-08 | 229,810 | Jointliability | Oneyear | No | No |
| GuangdongMidea-SIIXElectronicsCo.,Ltd. | 2021-4-30 | 10,000 | 2021-01-19 | 430 | Jointliability | Oneyear | No | No |
| HefeiMideaHeating&VentilatingEquipmentCo.,Ltd. | 2021-4-30 | 345,000 | 2021-03-30 | 11,380 | Jointliability | Oneyear | No | No |
| HefeiMidea-SIIXElectronicsCo.,Ltd. | 2021-4-30 | 123,000 | 2021-01-01 | 1,120 | Jointliability | Oneyear | No | No |
| HefeiM&BAirConditioningEquipmentCo.,Ltd. | 2021-4-30 | 31,500 | - | Jointliability | Oneyear | No | No | |
| ChongqingMideaGeneralRefrigerationEquipmentCo.,Ltd. | 2021-4-30 | 30,000 | 2021-01-14 | 9,940 | Jointliability | Oneyear | No | No |
| MeitongEnergyTechnology(Chongqing)Co.,Ltd. | 2021-4-30 | 50,000 | 2021-10-26 | 3,210 | Jointliability | Oneyear | No | No |
| GuangdongMeiKongIntelligentBuildingCo.,Ltd. | 2021-4-30 | 60,000 | - | Jointliability | Oneyear | No | No | |
| ShanghaiM-BMSIntelligentConstructionCo.,Ltd. | 2021-4-30 | 60,000 | - | Jointliability | Oneyear | No | No | |
| WinoneElevatorCompanyLimited | 2021-4-30 | 500,000 | 2021-01-08 | 64,560 | Jointliability | Oneyear | No | No |
| GuangdongMeizhiCompressorLimited | 2021-4-30 | 230,000 | 2021-01-08 | 31,730 | Jointliability | Oneyear | No | No |
| GuangdongMeizhiPrecision-ManufacturingCo.,Ltd | 2021-4-30 | 80,000 | 2021-01-01 | - | Jointliability | Oneyear | No | No |
| GuangdongWellingMotorManufacturingCo.,Ltd. | 2021-4-30 | 210,000 | 2021-01-05 | 24,540 | Jointliability | Oneyear | No | No |
| FoshanWellingWasherMotorManufacturingCo.,Ltd. | 2021-4-30 | 320,000 | 2021-01-08 | 69,240 | Jointliability | Oneyear | No | No |
| GuangdongMideaEnvironmentalTechnologiesCo.,Ltd. | 2021-4-30 | 20,000 | 2021-01-01 | - | Jointliability | Oneyear | No | No |
| HuaianWellingMotorManufacturingCo.,Ltd. | 2021-4-30 | 10,000 | 2021-09-28 | 2,350 | Jointliability | Oneyear | No | No |
| GuangdongMideaIntelligentTechnologiesCo.,Ltd. | 2021-4-30 | 20,000 | - | Jointliability | Oneyear | No | No | |
| ZhejiangMeizhiCompressorCo.,Ltd. | 2021-4-30 | 3,500,000 | 2021-12-02 | 570,000 | Jointliability | Oneyear | No | No |
| AnhuiMeizhiCompressorCo.,Ltd. | 2021-4-30 | 80,000 | 2021-06-28 | 14,500 | Jointliability | Oneyear | No | No |
| AnhuiMeizhiPrecisionManufacturingCo.,Ltd. | 2021-4-30 | 270,000 | 2021-02-25 | 19,510 | Jointliability | Oneyear | No | No |
| Welling(Wuhu)MotorManufacturingCo.,Ltd. | 2021-4-30 | 10,000 | 2021-06-28 | 60 | Jointliability | Oneyear | No | No |
| WuhuWellingMotorSalesCo.,Ltd. | 2021-4-30 | 500,000 | - | Jointliability | Oneyear | No | No | |
| AnhuiWellingAutoPartsCo.,Ltd. | 2021-4-30 | 40,000 | 2021-01-05 | 2,810 | Jointliability | Oneyear | No | No |
| DornaTechnologyCo.,Ltd. | 2021-4-30 | 25,000 | 2021-07-15 | 10,620 | Jointliability | Oneyear | No | No |
| GuangdongMideaElectromechanicalTechnologyCo.,Ltd. | 2021-4-30 | 50,000 | - | Jointliability | Oneyear | No | No | |
| NingboMideaUnitedMaterialsSupplyCo.Ltd. | 2021-4-30 | 1,000,000 | 2021-01-28 | - | Jointliability | Oneyear | No | No |
| GuangzhouKaizhaoCommercialandTradingCo.,Ltd | 2021-4-30 | 60,000 | - | Jointliability | Oneyear | No | No | |
| GuangdongMideaConsumerElectricManufacturingCo.,Ltd. | 2021-4-30 | 185,000 | 2021-02-10 | 7,330 | Jointliability | Oneyear | No | No |
| FoshanShundeMideaElectricalHeatingAppliancesManufacturingCo.,Ltd. | 2021-4-30 | 565,000 | 2021-01-11 | 154,240 | Jointliability | Oneyear | No | No |
| GDMideaEnvironmentAppliancesMfg.Co.,Ltd. | 2021-4-30 | 400,000 | 2021-01-14 | 22,380 | Jointliability | Oneyear | No | No |
| GuangdongMideaCuchenCompanyLtd. | 2021-4-30 | 6,000 | - | Jointliability | Oneyear | No | No | |
| GDMideaCaffitalyCoffeeMachineManufacturingCo.,Ltd. | 2021-4-30 | 10,000 | - | Jointliability | Oneyear | No | No | |
| WuhuMideaLifeAppliancesMfgCo.,Ltd. | 2021-4-30 | 3,000,000 | 2021-01-21 | 504,000 | Jointliability | Oneyear | No | No |
| FoshanShundeMideaWashingAppliancesManufacturingCo.,Ltd. | 2021-4-30 | 2,350,000 | 2021-01-06 | 65,760 | Jointliability | Oneyear | No | No |
| GuangdongMideaKitchen&BathAppliancesManufacturingCo.,Ltd. | 2021-4-30 | 400,000 | - | Jointliability | Oneyear | No | No | |
| FoshanShundeMideaWaterDispenserManufacturingCompanyLimited | 2021-4-30 | 855,000 | 2021-01-28 | 19,670 | Jointliability | Oneyear | No | No |
| FoshanMideaChunghoWaterPurificationEquipment.Co.,Ltd. | 2021-4-30 | 230,000 | 2021-01-28 | 21,860 | Jointliability | Oneyear | No | No |
| WuhuMideaKitchen&BathAppliancesMfg.Co.,Ltd. | 2021-4-30 | 1,800,000 | 2021-01-26 | 32,250 | Jointliability | Oneyear | No | No |
| WuxiLittleSwanElectricCo.,Ltd. | 2021-4-30 | 2,600,000 | 2021-01-05 | 38,370 | Jointliability | Oneyear | No | No |
| HefeiMideaLaundryApplianceCo.,Ltd. | 2021-4-30 | 780,000 | 2021-12-17 | 15,380 | Jointliability | Oneyear | No | No |
| WuxiFilinElectronicsCo.,Ltd. | 2021-4-30 | 50,000 | - | Jointliability | Oneyear | No | No | |
| HubeiMideaLaundryApplianceCo.,Ltd. | 2021-4-30 | 100,000 | - | Jointliability | Oneyear | No | No | |
| HainanMideaRefrigerator&WasherSalesCo.,Ltd. | 2021-4-30 | 100,000 | - | Jointliability | Oneyear | No | No | |
| HefeiHualingCo.,Ltd. | 2021-4-30 | 1,850,000 | 2021-04-26 | 109,620 | Jointliability | Oneyear | No | No |
| HubeiMideaRefrigeratorCo.,Ltd. | 2021-4-30 | 230,000 | 2021-01-01 | 8,520 | Jointliability | Oneyear | No | No |
| HefeiMideaRefrigeratorCo.,Ltd. | 2021-4-30 | 400,000 | - | Jointliability | Oneyear | No | No | |
| GuangzhouMideaHualingRefrigeratorCo.,Ltd. | 2021-4-30 | 1,345,000 | 2021-01-19 | 6,240 | Jointliability | Oneyear | No | No |
| LittleSwan(JingZhou)SanjinElectronicAppliancesLimited | 2021-4-30 | 10,000 | - | Jointliability | Oneyear | No | No | |
| GuangdongMideaIntelligentRoboticsCo.,Ltd. | 2021-4-30 | 50,000 | - | Jointliability | Oneyear | No | No | |
| ServotronixMotionTechnologyDevelopment(Shenzhen)Ltd. | 2021-4-30 | 10,000 | - | Jointliability | Oneyear | No | No | |
| MideaGroupE-CommerceCo.,Ltd. | 2021-4-30 | 100,000 | - | Jointliability | Oneyear | No | No | |
| GuangdongMideaSmartLinkTechnologiesCo.,Ltd. | 2021-4-30 | 41,200 | 2021-01-11 | 7,630 | Jointliability | Oneyear | No | No |
| ReisRobotics(Kunshan)Co.,Ltd. | 2021-4-30 | 63,000 | 2021-01-28 | 13,580 | Jointliability | Oneyear | No | No |
| KUKASystems(China)CO.,Ltd. | 2021-4-30 | 325,000 | 2021-03-08 | 190,200 | Jointliability | Oneyear | No | No |
| KUKARoboticsManufacturingChinaCo.,Ltd | 2021-4-30 | 50,000 | 2021-03-23 | 33,850 | Jointliability | Oneyear | No | No |
| KUKARoboticsGuangdongCo.,Ltd | 2021-4-30 | 100,000 | - | Jointliability | Oneyear | No | No | |
| KUKARobotics(Shanghai)Co.,Ltd. | 2021-4-30 | 315,000 | 2021-01-07 | 98,650 | Jointliability | Oneyear | No | No |
| ShanghaiSwisslogHealthcareCo.,Ltd. | 2021-4-30 | 10,000 | - | Jointliability | Oneyear | No | No | |
| GuangdongSwisslogTechnologyCo.,Ltd. | 2021-4-30 | 50,000 | - | Jointliability | Oneyear | No | No |
| Swisslog(Shanghai)Co.,Ltd. | 2021-4-30 | 230,000 | 2021-01-06 | 60,230 | Jointliability | Oneyear | No | No |
| ShanghaiSwisslogLogisticsAutomationCo.Ltd. | 2021-4-30 | 80,000 | 2021-01-14 | - | Jointliability | Oneyear | No | No |
| AnntoLogisticsTechnologyCo.,Ltd. | 2021-4-30 | 900,000 | - | Jointliability | Oneyear | No | No | |
| MideaInternationalCorporationCompanyLimited | 2021-4-30 | 12,330,000 | 2021-04-23 | 7,803,910 | Jointliability | Oneyear | No | No |
| MideaInternationalTradingCompanyLimited | 2021-4-30 | 2,222,430 | 2021-01-21 | - | Jointliability | Oneyear | No | No |
| WellingInternationalHongKongLtd | 2021-4-30 | 182,000 | - | Jointliability | Oneyear | No | No | |
| MideaElectricTrading(Singapore)Co.,Pte.Ltd. | 2021-4-30 | 4,000,000 | 2021-01-05 | 35,530 | Jointliability | Oneyear | No | No |
| OrientHouseholdAppliancesLtd.(Orient) | 2021-4-30 | 120,000 | - | Jointliability | Oneyear | No | No | |
| MideaConsumerElectricVietnam | 2021-4-30 | 112,000 | - | Jointliability | Oneyear | No | No | |
| ConcepcionMideaInc. | 2021-4-30 | 112,000 | - | Jointliability | Oneyear | No | No | |
| MideaItaliaS.R.L. | 2021-4-30 | 140,000 | - | Jointliability | Oneyear | No | No | |
| MideaScott&EnglishElectronicsSdn.Bhd. | 2021-4-30 | 206,500 | - | Jointliability | Oneyear | No | No | |
| MideaMexico,S.DeR.L.DeC.V. | 2021-4-30 | 180,000 | - | Jointliability | Oneyear | No | No | |
| MideaElectricTrading(Thailand)Co.,Ltd. | 2021-4-30 | 105,000 | - | Jointliability | Oneyear | No | No | |
| MideaAmericaCorp | 2021-4-30 | 669,000 | - | Jointliability | Oneyear | No | No | |
| Pt.MideaPlanetIndonesia | 2021-4-30 | 56,000 | - | Jointliability | Oneyear | No | No | |
| MideaElectricsEgypt | 2021-4-30 | 175,000 | - | Jointliability | Oneyear | No | No | |
| MideaEuropeGmbh | 2021-4-30 | 70,000 | - | Jointliability | Oneyear | No | No | |
| MideaAmerica(Canada)Corp | 2021-4-30 | 70,000 | - | Jointliability | Oneyear | No | No |
| ToshibaLifestyleProducts&ServicesCorporation | 2021-4-30 | 2,667,450 | 2021-01-05 | 3,230 | Jointliability | Oneyear | No | No | ||
| MideaElectricNetherlands(I)B.V. | 2021-4-30 | 31,446,110 | 2021-01-01 | 28,856,400 | Jointliability | Oneyear | No | No | ||
| ClivetSpa | 2021-4-30 | 90,000 | - | Jointliability | Oneyear | No | No | |||
| ServotronixMotionControlLtd. | 2021-4-30 | 940 | - | Jointliability | Oneyear | No | No | |||
| MideaAustriaGmbh | 2021-4-30 | 5,700 | - | Jointliability | Oneyear | No | No | |||
| Midea(Egypt)Kitchen&WaterHeaterAppliancesCo.,Ltd. | 2021-4-30 | 70,000 | - | Jointliability | Oneyear | No | No | |||
| TotalguaranteelineforsubsidiariesapprovedduringtheReportingPeriod(B1) | 123,551,830 | TotalactualguaranteeamountforsubsidiariesduringtheReportingPeriod(B2) | 67,169,620 | |||||||
| TotalapprovedguaranteelineforsubsidiariesattheendoftheReportingPeriod(B3) | 123,551,830 | TotalactualguaranteebalanceforsubsidiariesattheendoftheReportingPeriod(B4) | 43,384,350 | |||||||
| Guaranteesbetweensubsidiaries | ||||||||||
| Guaranteedparty | Disclosuredateoftheguaranteelineannouncement | Lineofguarantee | Actualoccurrencedate(dateofagreementsigning) | Actualguaranteeamount | Typeofguarantee | Termofguarantee | Dueornot | Guaranteeforarelatedpartyornot | ||
| WuhuMideaAnntoLogisticsCo.,Ltd. | 2021-4-30 | 1,500,000 | 2021-06-22 | - | Jointliability | Oneyear | No | No | ||
| NingboAnntoLogisticsCo.,Ltd. | 2021-4-30 | 800,000 | 2021-03-22 | - | Jointliability | Oneyear | No | No | ||
| NanjingMeianLogisticsCo.,Ltd. | 2021-4-30 | 20,000 | 2021-08-05 | - | Jointliability | Oneyear | No | No | ||
| ShenyangAnntoLogisticsTechnologyCo.,Ltd. | 2021-4-30 | 20,000 | - | Jointliability | Oneyear | No | No | |||
| WuhanAnntoLogisticsTechnologyCo.,Ltd. | 2021-4-30 | 20,000 | 2021-08-05 | - | Jointliability | Oneyear | No | No | ||
| TianjinAnntoLogisticsTechnology | 2021-4-30 | 20,000 | - | Jointliability | One | No | No | |||
| Co.,Ltd. | year | ||||||||
| XuzhouAnntoLogisticsTechnologyCo.,Ltd. | 2021-4-30 | 20,000 | 2021-09-29 | - | Jointliability | Oneyear | No | No | |
| TotallineforguaranteesbetweensubsidiariesapprovedduringtheReportingPeriod(C1) | 2,400,000 | TotalactualguaranteeamountbetweensubsidiariesduringtheReportingPeriod(C2) | 346,100 | ||||||
| TotalapprovedlineforguaranteesbetweensubsidiariesattheendoftheReportingPeriod(C3) | 2,400,000 | TotalactualguaranteebalancebetweensubsidiariesattheendoftheReportingPeriod(C4) | 0 | ||||||
| Totalguaranteeamount(totaloftheabove-mentionedthreekindsofguarantees) | |||||||||
| TotalguaranteelineapprovedduringtheReportingPeriod(A1+B1+C1) | 125,951,830 | TotalactualguaranteeamountduringtheReportingPeriod(A2+B2+C2) | 67,515,720 | ||||||
| TotalapprovedguaranteelineattheendoftheReportingPeriod(A3+B3+C3) | 125,951,830 | TotalactualguaranteebalanceattheendoftheReportingPeriod(A4+B4+C4) | 43,384,350 | ||||||
| Proportionofthetotalactualguaranteeamount(A4+B4+C4)innetassetsoftheCompany | 34.74% | ||||||||
| Ofwhich: | |||||||||
| Amountofguaranteesprovidedforshareholders,theactualcontrollerandtheirrelatedparties(D) | 0 | ||||||||
| Amountofdebtguaranteesprovideddirectlyorindirectlyforentitieswithaliability-to-assetratioover70%(E) | 32,608,180 | ||||||||
| Portionofthetotalguaranteeamountinexcessof50%ofnetassets(F) | 0 | ||||||||
| Totalamountofthethreekindsofguaranteesabove(D+E+F) | 32,608,180 | ||||||||
| Jointresponsibilitiespossiblyborneforundueguarantees(ifany) | N/A | ||||||||
| Provisionofexternalguaranteesinbreachoftheprescribedprocedures(ifany) | N/A | ||||||||
15.3Entrustedcashmanagement
15.3.1Entrustedassetmanagement
□Applicable√N/ANosuchcasesintheReportingPeriod.
15.3.2Entrustedloans
□Applicable√N/ANosuchcasesintheReportingPeriod.
15.4Othersignificantcontracts
□Applicable√N/ANosuchcasesintheReportingPeriod.
16.OtherSignificantEvents
□Applicable√N/A
17.SignificantEventsofSubsidiaries
□Applicable√N/A
SectionVIIChangesinSharesandInformationabout
Shareholders
1.ChangesinShares
1.1Changesinshares
Unit:share
| Before | Increase/decreaseinReportingPeriod(+/-) | After | |||||
| Shares | Percentage(%) | Newissue | Others | Subtotal | Shares | Percentage(%) | |
| 1.Restrictedshares | 182,862,631 | 2.60 | -26,323,750 | -26,323,750 | 156,538,881 | 2.24 | |
| 1.1Sharesheldbythestate | |||||||
| 1.2Sharesheldbystate-ownedcorporations | |||||||
| 1.3Sharesheldbyotherdomesticinvestors | 179,785,131 | 2.56 | -26,012,050 | -26,012,050 | 153,773,081 | 2.20 | |
| Amongwhich:Sharesheldbydomesticcorporations | 2,363,601 | 0.03 | 2,363,601 | 0.03 | |||
| Sharesheldbydomesticindividuals | 177,421,530 | 2.52 | -26,012,050 | -26,012,050 | 151,409,480 | 2.17 | |
| 1.4Sharesheldbyforeigninvestors | 3,077,500 | 0.04 | -311,700 | -311,700 | 2,765,800 | 0.04 | |
| Amongwhich:Sharesheldbyforeigncorporations | |||||||
| Sharesheldbyforeignindividuals | 3,077,500 | 0.04 | -311,700 | -311,700 | 2,765,800 | 0.04 | |
| 2.Non-restrictedshares | 6,847,113,368 | 97.40 | 34,436,911 | -51,525,316 | -17,088,405 | 6,830,024,963 | 97.76 |
| 2.1RMBcommonshares | 6,847,113,368 | 97.40 | 34,436,911 | -51,525,316 | -17,088,405 | 6,830,024,963 | 97.76 |
| 2.2Domesticallylistedforeignshares | |||||||
| 2.3Overseaslistedforeignshares | |||||||
| 2.4Other | |||||||
| 3.Totalshares | 7,029,975,999 | 100.00 | 34,436,911 | -77,849,066 | -43,412,155 | 6,986,563,844 | 100.00 |
Reasonsforthechangesinshares
√Applicable□N/Aa.The1,292,083restrictedsharesofatotalof39eligibleemployeesforthethirdunlockingperiodofthereservedrestrictedsharesunderthe2017RestrictedShareIncentiveSchemewereunlockedfrom8February2021,including60,000restrictedsharesofforeignemployees.b.The403,249restrictedsharesofatotalof24eligibleemployeesforthefirstunlockingperiodofthereservedrestrictedsharesunderthe2018RestrictedShareIncentiveSchemewereunlockedfrom4June2021.c.The3,043,254restrictedsharesofatotalof209eligibleemployeesforthesecondunlockingperiodofthefirstgrantunderthe2018RestrictedShareIncentiveSchemewereunlockedfrom30June2021,including182,250restrictedsharesofforeignemployees.d.The5,654,629restrictedsharesofatotalof363eligibleemployeesforthefirstunlockingperiodofthe2019RestrictedShareIncentiveSchemewereunlockedfrom13July2021,including140,250restrictedsharesofforeignemployees.e.The5,488,962restrictedsharesofatotalof487eligibleemployeesforthefirstunlockingperiodofthe2020RestrictedShareIncentiveSchemewereunlockedfrom20July2021,including217,800restrictedsharesofforeignemployees.f.Forthereasonsofcertainincentiverecipients’resignation,violationoftheCompany’s“RedLines”,beingreassignedorotherfactors,on24May2021,theCompanyrepurchasedandretired32,917sharesof2incentiverecipientsunderthe2017RestrictedShareIncentiveScheme,1,009,501sharesof22incentiverecipientsunderthe2018RestrictedShareIncentiveScheme,1,043,958sharesof15
incentiverecipientsunderthe2019RestrictedShareIncentiveScheme,and440,374sharesof11incentiverecipientsunderthe2020RestrictedShareIncentiveScheme,totaling2,526,750restrictedshares(including4,000restrictedsharesofforeignemployees).g.Forthereasonsofcertainincentiverecipients’resignation,violationoftheCompany’s“RedLines”,beingreassignedorotherfactors,on30November2021,theCompanyrepurchasedandretired761,121sharesof67incentiverecipientsunderthe2018RestrictedShareIncentiveScheme,941,788sharesof92incentiverecipientsunderthe2019RestrictedShareIncentiveScheme,and1,643,164sharesof263incentiverecipientsunderthe2020RestrictedShareIncentiveScheme,totaling3,346,073restrictedshares(including152,400restrictedsharesofforeignemployees).h.In2021,theincentiverecipientsofstockoptionschosetoexercise34,436,911shares,whichhavebeenregisteredintotheCompany’ssharecapital.i.In2021,locked-upsharesheldbyseniormanagementdecreasedby14,508,750shares.Approvalofsharechanges
√Applicable□N/ATransferofshareownership
□Applicable√N/AEffectsofchangesinsharesonbasicEPS,dilutedEPS,netassetspershareattributabletocommonshareholdersoftheCompanyandotherfinancialindexesoverthelastyearandthelastReportingPeriod
□Applicable√N/AOthercontentsthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatoryauthoritiestodisclose
□Applicable√N/A
1.2Changesinrestrictedshares
√Applicable□N/A
Unit:share
| Nameofshareholder | Openingrestrictedshares | Unlockedincurrentperiod | Increasedincurrentperiod | Repurchasedandretired | Closingrestrictedshares | Reasonforchange | Dateofunlocking |
| Incentiverecipientsofreservedrestrictedsharesunder2017RestrictedShareIncentiveScheme | 1,325,000 | 1,292,083 | 0 | 32,917 | 0 | LockupaccordingtotheScheme | 8February2021 |
| Incentiverecipientsofthefirstgrantof2018RestrictedShareIncentiveScheme | 11,232,375 | 3,043,254 | 0 | 1,501,371 | 6,687,750 | LockupaccordingtotheScheme | 30June2021 |
| Incentiverecipientsofreservedrestrictedsharesunder2018RestrictedShareIncentiveScheme | 1,970,000 | 403,249 | 0 | 269,251 | 1,297,500 | LockupaccordingtotheScheme | 4June2021 |
| Incentiverecipientsof2019RestrictedShareIncentiveScheme | 26,309,000 | 5,654,629 | 0 | 1,985,746 | 18,668,625 | LockupaccordingtotheScheme | 13July2021 |
| Incentiverecipientsof2020RestrictedShareIncentiveScheme | 33,245,000 | 5,488,962 | 0 | 2,083,538 | 25,672,500 | LockupaccordingtotheScheme | 20July2021 |
| Incentiverecipientsof2021RestrictedShareIncentiveScheme | 0 | 0 | 9,940,000 | 0 | 9,940,000 | LockupaccordingtotheScheme | - |
| FangHongbo | 102,742,869 | 15,000,000 | 0 | 0 | 87,742,869 | Lockupforseniormanagementposition | - |
| ZhangXiaoyi | 424,931 | 87,500 | 0 | 0 | 337,431 | Lockupforseniormanagementposition | - |
| JiangPeng | 343,950 | 75,000 | 0 | 0 | 268,950 | Lockupforsenior | - |
| managementposition | |||||||
| XiaoMingguang | 220,000 | 0 | 133,750 | 0 | 353,750 | Locked-upsharesofaformerseniorexecutive | - |
| ZhongZheng | 98,364 | 0 | 68,750 | 0 | 167,114 | Lockupforseniormanagementposition | - |
| HuZiqiang | 225,000 | 0 | 25,000 | 0 | 250,000 | Lockupforseniormanagementposition | - |
| FuYongjun | 0 | 0 | 150,000 | 0 | 150,000 | Lockupforseniormanagementposition | - |
| GuanJinwei | 0 | 0 | 276,250 | 0 | 276,250 | Lockupforseniormanagementposition | - |
| Total | 178,136,489 | 31,044,677 | 10,593,750 | 5,872,823 | 151,812,739 | -- | -- |
2.IssuanceandListingofSecurities
2.1Securities(excludingpreferenceshares)issuedintheReportingPeriod
□Applicable√N/A
2.2ChangesintotalsharesoftheCompanyandtheshareholderstructure,aswellastheassetandliabilitystructures
□Applicable√N/A
2.3Existingstaff-heldshares
□Applicable√N/A
3.ShareholdersandActualController
3.1Totalnumberofshareholdersandtheirshareholdings
Unit:share
| Totalnumberofcommonshareholdersattheperiod-end | 374,562 | Totalnumberofcommonshareholdersatthepriormonth-endbeforethedisclosuredateoftheannualreport | 438,206 | ||||||
| 5%orgreatercommonshareholdersortop10commonshareholders | |||||||||
| Nameofshareholder | Natureofshareholder | Shareholdingpercentage(%) | Totalcommonsharesheldattheperiod-end | Increase/decreaseduringtheReportingPeriod | Numberofrestrictedcommonsharesheld | Numberofnon-restrictedcommonsharesheld | Pledgedorfrozenshares | ||
| Status | Shares | ||||||||
| MideaHoldingCo.,Ltd. | Domesticnon-state-ownedcorporation | 31.05% | 2,169,178,713 | 0 | 0 | 2,169,178,713 | Pledged | 100,000,000 | |
| HongKongSecuritiesClearingCompanyLimited | Foreigncorporation | 17.42% | 1,216,964,491 | 159,241,854 | 0 | 1,216,964,491 | |||
| ChinaSecuritiesFinanceCo.,Ltd. | Domesticnon-state-ownedcorporation | 2.84% | 198,145,134 | 0 | 0 | 198,145,134 | |||
| FangHongbo | Domesticindividual | 1.67% | 116,990,492 | 0 | 87,742,869 | 29,247,623 | |||
| CanadaPensionPlanInvestmentBoard－ownfunds(stockexchange) | Foreigncorporation | 1.49% | 103,913,897 | 0 | 0 | 103,913,897 | |||
| CentralHuijinAssetManagementLtd. | State-ownedcorporation | 1.26% | 88,260,460 | -1,908,894 | 0 | 88,260,460 | |||
| HuangJian | Domesticindividual | 1.23% | 86,140,000 | -1,890,000 | 0 | 86,140,000 | |||
| LiJianwei | Foreign | 0.71% | 49,633,000 | -667,000 | 0 | 49,633,000 | |||
| individual | |||||||||||
| MerrillLynchInternational | Foreigncorporation | 0.63% | 43,822,975 | 2,864,379 | 0 | 43,822,975 | |||||
| HuangXiaoxiang | Domesticindividual | 0.56% | 39,158,732 | -449,100 | 0 | 39,158,732 | Pledged | 14,779,556 | |||
| Strategicinvestorsorgeneralcorporationsbecomingtop-tencommonshareholdersduetoplacingofnewshares(ifany)(seeNote3) | N/A | ||||||||||
| Related-partiesoracting-in-concertpartiesamongtheshareholdersabove | N/A | ||||||||||
| Explainifanyoftheshareholdersabovewasinvolvedinentrusting/beingentrustedwithvotingrightsorwaivingvotingrights | N/A | ||||||||||
| Specialaccountforrepurchasedsharesamongthetop10shareholders | 116,828,832shares(or1.67%oftheCompany’stotalsharecapital)wereheldinthespecialaccountforrepurchasedsharesofMideaGroupCo.,Ltd.attheendoftheReportingPeriod. | ||||||||||
| Top10non-restrictedcommonshareholders | |||||||||||
| Nameofshareholder | Numberofnon-restrictedcommonsharesheldattheperiod-end | Typeofshares | |||||||||
| Type | Shares | ||||||||||
| MideaHoldingCo.,Ltd. | 2,169,178,713 | RMBcommonstock | 2,169,178,713 | ||||||||
| HongKongSecuritiesClearingCompanyLimited | 1,216,964,491 | RMBcommonstock | 1,216,964,491 | ||||||||
| ChinaSecuritiesFinanceCo.,Ltd. | 198,145,134 | RMBcommonstock | 198,145,134 | ||||||||
| CanadaPensionPlanInvestmentBoard－ownfunds(stockexchange) | 103,913,897 | RMBcommonstock | 103,913,897 | ||||||||
| CentralHuijinAssetManagementLtd. | 88,260,460 | RMBcommonstock | 88,260,460 | ||||||||
| HuangJian | 86,140,000 | RMBcommonstock | 86,140,000 | ||||||||
| LiJianwei | 49,633,000 | RMBcommonstock | 49,633,000 | ||||||||
| MerrillLynchInternational | 43,822,975 | RMBcommonstock | 43,822,975 | ||||||||
| HuangXiaoxiang | 39,158,732 | RMBcommonstock | 39,158,732 | ||||||||
| YuanLiqun | 37,496,382 | RMBcommonstock | 37,496,382 | ||||||||
| Related-partiesoracting-in-concertpartiesamongthetoptennon-restrictedcommonshareholdersandbetweenthetoptennon-restrictedcommonshareholdersandthetoptencommonshareholders | N/A |
| Explanationonthetop10commonshareholdersparticipatinginsecuritiesmargintrading | TheCompany’sshareholderHuangXiaoxiangholds28,580,732sharesintheCompanythroughhiscommonsecuritiesaccountand10,578,000sharesintheCompanythroughhisaccountofcollateralsecuritiesformargintrading,representingatotalholdingof39,158,732sharesintheCompany.TheCompany’sshareholderYuanLiqunholds705,000sharesintheCompanythroughhercommonsecuritiesaccountand36,791,382sharesintheCompanythroughheraccountofcollateralsecuritiesformargintrading,representingatotalholdingof37,496,382sharesintheCompany. |
Didanyofthetop10commonshareholdersorthetop10non-restrictedcommonshareholdersoftheCompanyconductanypromissoryrepurchaseduringtheReportingPeriod
□Yes√NoNosuchcasesintheReportingPeriod.
3.2ControllingshareholderNatureofthecontrollingshareholder:ControlledbyindividualTypeofthecontrollingshareholder:Corporation
| Nameofcontrollingshareholder | Legalrepresentative/companyprincipal | Dateofestablishment | Credibilitycode | Mainbusinessscope |
| MideaHoldingCo.,Ltd. | HeXiangjian | 2002-08-05 | 914406067429989733 | Manufactureandcommerceinvestment;domesticcommerceandmaterialssupplyandmarketingindustry(excludingstate-designatedmonopoly);CPsoftwareandhardwaredevelopment;industrialproductdesign;informationtechnologyconsultingservices,providinginvestmentconsultantandconsultingservices;installation,maintenanceandafter-salesserviceofelectricappliances;realestateintermediaryserviceandforwardingagentservice. |
| Shareholdingsofthe | ApartfromadirectcontrolovertheCompany,MideaHoldingdoesnotdirectlycontrolorhave | |||
94.55%
controllingshareholderinothercontrolledornon-controlledlistedcompaniesathomeorabroadduringtheReportingPeriod
| controllingshareholderinothercontrolledornon-controlledlistedcompaniesathomeorabroadduringtheReportingPeriod | sharesinotherlistedcompaniesathomeorabroad. |
ChangeofthecontrollingshareholderduringtheReportingPeriod
□Applicable√N/ANosuchcasesintheReportingPeriod.
3.3Actualcontrollerandacting-in-concertpartiesthereofNatureoftheactualcontroller:DomesticindividualTypeoftheactualcontroller:Individual
| Nameoftheactualcontroller | Relationshipwiththeactualcontroller | Nationality | Rightofresidenceinothercountriesorregions |
| HeXiangjian | Actualcontrollerhimself | ThePeople'sRepublicofChina | No |
| Mainoccupationandduty | IncumbentboardchairmanofMideaHoldingCo.,Ltd. | ||
| Domesticallyandoverseaslistedcompaniescontrolledinthelast10years | MideaGroup(000333.SZ),KUKA(KU2.DE),Hiconics(300048.SZ),WDM(600055.SH),MideaRealEstate(3990.HK),LittleSwan(A:000418.SZ;B:200418)(delistedin2019),andWellingHolding(00382.HK)(delistedin2018) | ||
ChangeoftheactualcontrollerduringtheReportingPeriod
□Applicable√N/ANosuchcasesintheReportingPeriod.OwnershipandcontrolrelationsbetweentheactualcontrollerandtheCompany
TheactualcontrollercontrolstheCompanyviatrustorotherwaysofassetmanagement
MideaGroupCo.,Ltd.
0.46%
0.46%
31.05%
31.05%MideaHoldingCo.,Ltd.
MideaHoldingCo.,Ltd.HeXiangjian
□Applicable√N/A
3.4Indicatewhetherthecumulativesharesofthecontrollingshareholderorthelargestshareholderandtheiracting-in-concertpartiesthatareinpledgeaccountfor80%orgreateroftheirshareholdingsintheCompany
□Applicable√N/A
3.5Othercorporateshareholderswithashareholdingpercentageabove10%
□Applicable√N/A
3.6LimitsontheCompany’ssharesheldbyitscontrollingshareholder,actualcontroller,reorganizerandothercommitmentsubjects
□Applicable√N/A
4.ShareRepurchasesduringtheReportingPeriod
Progressofanysharerepurchase
√Applicable□N/A
| Disclosuredateofthescheme | Numberofsharestoberepurchased | Asapercentageofthetotalsharecapital | Amounttobeused | Repurchaseperiod | Purpose | Numberofsharesrepurchased | Sharesrepurchasedasapercentageofthetotaltargetnumberoftheequityincentivescheme |
| 2021.02.24 | Nomorethan100,000,000sharesandnolessthan50,000,000shares | Nomorethan1.4313%andnolessthan0.7157% | ExpectedlynomorethanRMB14billionbasedontheupperlimitof100,000,000sharesandtherepurchasepriceceilingofRMB140/share | 2021.02.25-2021.04.02 | Foruseinequityincentiveand/oremployeestockownershipschemes | 99,999,931 | 9.94% |
| 2021.05.10 | Nomorethan | Nomorethan | Nomorethan | 2021.06.03-2 | The | 71,976,243 | N/A |
| 50,000,000sharesandnolessthan25,000,000sharesbasedontherepurchasepriceceilingofRMB100/share | 0.7157%andnolessthan0.3578%basedontherepurchasepriceceilingofRMB100/share | RMB5billionandnolessthanRMB2.5billion | 021.08.13 | repurchasedsharesaretoberetired,whichwillreducetheCompany’sregisteredcapital. |
Progressofanyrepurchasedsharereductionthroughcentralizedpricebidding
□Applicable√N/A
SectionVIIIPreferenceShares
□Applicable√N/ANosuchcasesintheReportingPeriod.
SectionIXBonds
√Applicable□N/A
1.EnterpriseBonds
□Applicable√N/ANosuchcasesintheReportingPeriod.
2.CorporateBonds
□Applicable√N/ANosuchcasesintheReportingPeriod.
3.DebtInstrumentsasaNon-financialEnterprise
√Applicable□N/A
3.1Generalinformationondebtinstrumentsasanon-financialenterprise
| Nameofdebtinstrument | Abbr. | Codeofdebtinstrument | Dateofissuance | Valuedate | Maturity | Outstandingbalance | Interestrate | Wayofprincipalrepaymentandinterestpayment | Placeoftrading |
| Super-short-termCommercialPapersofMideaGroupCo.,Ltd.(HighGrowthDebt)(Tranche1,2021) | 21MideaSCP001(HighGrowthDebt) | 012101283.IB | 2021-03-29 | 2021-03-30 | 2021-09-24 | RMB3billion | 2.7200% | Principalandinterestrepayableinfulluponmaturity | Inter-bankmarket |
| Investoreligibilityarrangements(ifany) | N/A | ||||||||
| Tradingsystemapplicable | N/A | ||||||||
| Riskofterminationoflistingandtrading(ifany)andcountermeasures | Nosuchrisk |
Overduedebtinstruments
□Applicable√N/A
3.2Triggeringandexecutionofissuerorinvestoroptionclausesandinvestorprotectionclauses
□Applicable√N/A
3.3Intermediaryagencies
| Bondname | Intermediaryagency | Officeaddress | Accountantwritingsignatures | Contactperson | Tel. |
| 21MideaSCP001(HighGrowthDebtInstrument) | AgriculturalBankofChinaLimited(leadunderwriterandbookrunner) | 69JianguomenneiStreet,DongchengDistrict,Beijing | AnLiwei | 010-85109045 | |
| IndustrialandCommercialBankofChinaLimited(co-leadunderwriter) | 55FuxingmenneiStreet,XichengDistrict,Beijing | DaiYing | 010-66109649 | ||
| BeijingJiayuanLawFirm | F408,YuanyangPlaza,158FuxingmenneiStreet,XichengDistrict,Beijing | - | LiuXing | 0755-82789766 |
ChangeoftheagenciesinthetableaboveduringtheReportingPeriod
□Yes√No
3.4Useofraisedfunds
Unit:RMB
| Bondname | Totalamountraised | Amountused | Amountunused | Statusofthespecialaccountforraisedfunds(ifany) | Rectificationforanyirregularity(ifany)intheuseofraisedfunds | Incompliancewiththepurpose,useplanandotherinformationstatedintheprospectus |
| 21Midea | RMB3billion | RMB3billion | 0 | Normal | N/A | Yes |
Useofraisedfundsinconstructionprojects
□Applicable√N/AIndicatewhethertheraisedfundswerere-purposedduringtheReportingPeriod
□Applicable√N/A
3.5ChangesincreditratingsintheReportingPeriod
□Applicable√N/A
3.6Executionandchangeswithrespecttoguarantees,repaymentplansandotherrepayment-ensuringmeasuresintheReportingPeriod,aswellastheimpactontheinterestsofdebtinstrumentholders
□Applicable√N/A
4.ConvertibleCorporateBonds
□Applicable√N/ANosuchcasesintheReportingPeriod.
5.ConsolidatedLossoftheReportingPeriodOver10%ofNetAssetsasattheEndofLastYear
□Applicable√N/A
6.Interest-bearingLiabilitiesOtherthanBondsthatWereOverdueattheEndoftheReportingPeriod
□Applicable√N/A
7.IrregularitiesduringtheReportingPeriod
□Yes√No
8.KeyFinancialInformationoftheCompanyinthePastTwoYears
Unit:RMB’000
SCP001(HighGrowthDebt)Item
| Item | 31December2021 | 31December2020 | Change |
| Currentratio | 111.67% | 131.23% | -19.55% |
| Debt/assetratio | 65.25% | 65.53% | -0.28% |
| Quickratio | 86.92% | 110.26% | -23.33% |
| 2021 | 2020 | Change | |
| Netprofitbeforenon-recurringgainsandlosses | 26,257,754 | 24,742,567 | 6.13% |
| EBITDA/debtratio | 46.70% | 41.76% | 4.94% |
| Interestcover(times) | 25.84 | 25.25 | 2.31% |
| Cash-to-interestcover(times) | 28.35 | 25.69 | 10.32% |
| EBITDA-to-interestcover(times) | 30.39 | 29.10 | 4.45% |
| Debtrepaymentratio(%) | 100.00% | 100.00% | 0.00% |
| Interestpaymentratio(%) | 100.00% | 100.00% | 0.00% |
SectionXFinancialReport
1.Auditor’sreport
| Typeoftheauditor’sopinion | Unqualifiedopinion |
| Signingdateoftheauditor’sreport | 28April2022 |
| Nameoftheauditor | PricewaterhouseCoopersZhongTianLLP |
| No.oftheauditor’sreport | PwCZTShenZi(2022)No.10017 |
| Namesofcertifiedpublicaccountants | YaoWenpingandWuFangfang |
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| [English Translation for Reference Only] Auditor’s Report |
| PwC ZT Shen Zi (2022) No. 10017 |
| (Page 1 of 6) |
| To the Shareholders of Midea Group Co., Ltd., |
| Opinion |
| What we have audited |
| We have audited the accompanying financial statements of Midea Group Co., Ltd. (hereinafter “the Group”), which comprise: ? the consolidated and company balance sheets as at 31 December 2021; ? the consolidated and company income statements for the year then ended; ? the consolidated and company cash flow statements for the year then ended; ? the consolidated and company statements of changes in shareholders’ equity for the year then ended; and ? notes to the financial statements. |
| Our opinion |
| In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and company’s financial position of the Group as at 31 December 2021, and their financial performance and cash flows for the year then ended in accordance with the requirements of the Accounting Standards for Business Enterprises (“CASs”). |
| Basis for Opinion |
| We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
| We are independent of the Group in accordance with the Code of Ethics for Professional Accountants of the Chinese Institute of Certified Public Accountants (“CICPA Code”), and we have fulfilled our other ethical responsibilities in accordance with the CICPA Code. |
| Key Audit Matters |
| Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. |
| Key audit matters identified in our audit are summarised as follows: |
| ? Revenue recognition of heating & ventilation and as well as air-conditioner (hereinafter referred to as “HVAC”) and consumer appliances |
| ? Impairment assessment of goodwill |
| PwC ZT Shen Zi (2022) No. 10017 |
| (Page 2 of 6) |
| Key Audit Matters (Cont’d) |
| Key Audit Matters | How our audit addressed the Key Audit Matters |
| Revenue recognition of HVAC and consumer appliances Refer to Note 2(25)(a) of accounting policy of “Revenue - sales of goods” and Note 4(46) “Operating revenue and cost of sales” to the financial statements. The Group recognises relevant revenue at the amount of the consideration which the Group is expected to receive when the customer obtains control over relevant goods or services. In 2021, the Group’s consolidated operating revenue was approximately RMB 341,233,208,000 and the revenue from HVAC and consumer appliances was approximately RMB 273,745,245,000. We identified this as a key audit matter due to the large size of both domestic and overseas customer base and high volume of sales through various distribution channels, the amount of revenue recognised from HVAC and consumer appliances is material to the financial statements, completing the necessary audit procedures required our focuses and substantial audit resources. | We have performed the following procedures to address this key audit matter: 1. Interviewed management from operation and financial departments to understand the necessary details of sales processes of all distribution channels and evaluate the internal control of processes relating to the revenue from sales of HVAC and consumer appliances designed by management and tested the operating effectiveness of key controls; 2. Reviewed household appliance sales contract template entered into by and between the Group and the clients from all distribution channels, and analysed and evaluated the appropriateness of the Group’s accounting policies on the revenue from sales of HVAC and consumer appliances based on our interview with management, understanding of the Group’s business operation and audit experience; 3. Performed fluctuation analysis of monthly sales and gross margin by product; 4. Reviewed supporting documents relevant to revenue recognition on a sample basis, including sales contracts, orders, sales invoices, shipping orders, acknowledgement of goods receipts signed by customers, billing agreements with customers, etc.; 5. Validated the revenue from sales of products by external confirmation on a sampling basis; 6. Evaluated whether or not the sales of products occurred near year end was recorded in the proper period by reconciling the book records of product sales revenue to the supporting documents which include records of revenue from sales of products, acknowledgement of goods receipts signed by customers, billing agreements with customers or other supporting documents. Based on the work performed, the Group’s recognition of revenue from sales of HVAC and consumer appliances were supported by the available evidence. |
| PwC ZT Shen Zi (2022) No. 10017 |
| (Page 3 of 6) |
| Key Audit Matters (Cont’d) |
| Key Audit Matters | How our audit addressed the Key Audit Matters |
| Impairment assessment of goodwill Refer to Note 2(18) of accounting policy of “Impairment of long-term assets”, Note 2(30)(i) “Critical accounting estimates and judgements - Provision for impairment of goodwill” and Note 4(21) “Goodwill” to the financial statements. As at 31 December 2021, the carrying amount of goodwill of the Group amounted to approximately RMB 27,874,752,000, including goodwill of RMB 20,544,697,000 and RMB 2,580,274,000 arising from business acquisition of KUKA Aktiengesellschaft and its subsidiaries (“KUKA Group”) and Toshiba Lifestyle Products & Services Corporation (“TLSC”), respectively. Management performs the goodwill impairment assessment in accordance with the accounting policy stated in Note 2(18) to the financial statements. The recoverable amount of the goodwill is determined based on fair value less costs of disposal or value-in-use calculations (whichever is the higher). The assessment result indicated that the recoverable amount of the cash generating unit and cash generating units, to which the goodwill was allocated, exceeded its carrying value and therefore no impairment was recorded. The recoverable amount of cash generating unit and cash generating units was determined based on value-in-use using cash flow projections. The key assumptions used in the goodwill impairment assessment included estimated revenue growth rate, EBITDA margin, perpetual annual growth rate and discount rate. We identified this as a key audit matter due to the significance of the goodwill balance arising from the business acquisition of KUKA Group, and the significant accounting estimates and judgements in key assumptions used in the impairment assessment. | We have performed the following procedures to address this key audit matter: 1. Understood the internal controls and evaluation process relating to goodwill impairment assessment, and assessed the inherent risks of material misstatement by considering the degree of estimation uncertainty and the level of other inherent risk factors, such as complexity, subjectivity, changes and susceptibility to management’s bias and fraud; 2. Evaluated and tested the operating effectiveness of key controls relevant to the goodwill impairment assessment, including review and approval of key assumptions applied and internal control over calculating recoverable amounts of the cash generating unit and cash generating units; 3. Assessed the reasonableness of the identification of the cash generating unit and cash generating units; 4. Compared the historical actual results to prior year budgets and forecasts to assess whether there are management bias in the process and reasonableness; 5. Evaluated the key assumptions used in the impairment assessment, including estimated revenue growth rate, EBITDA margin, perpetual annual growth rate and discount rate by considering the company’s historical operating performance, future operation plan and market developments; 6. Tested the mathematical accuracy of the calculation process of the impairment assessment; 7. Evaluated the appropriateness of the goodwill impairment assessment model and discount rate by involving our internal valuation experts. Based on the work performed, the management’s judgements as adopted in the goodwill impairment assessment of KUKA Group and TLSC were supported by the available evidence. |
| PwC ZT Shen Zi (2022) No. 10017 |
| (Page 4 of 6) |
| Other Information |
| Management of the Group is responsible for the other information. The other information comprises all of the information included in 2021 annual report of the Group other than the financial statements and our auditor’s report thereon. |
| Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. |
| In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
| Responsibilities of Management and Those Charged with Governance for the Financial Statements |
| Management of the Group is responsible for the preparation and fair presentation of these financial statements in accordance with the CASs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
| In preparing these financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. |
| Those charged with governance are responsible for overseeing the Group’s financial reporting process. |
| PwC ZT Shen Zi (2022) No. 10017 |
| (Page 5 of 6) |
| Auditor’s Responsibilities for the Audit of the Financial Statements |
| Our objectives are to obtain reasonable assurance about whether these financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
| As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: |
| ? Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
| ? Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. |
| ? Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. |
| ? Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in these financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. |
| ? Evaluate the overall presentation, (including the disclosures), structure and content of the financial statements, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. |
| ? Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. |
| PwC ZT Shen Zi (2022) No. 10017 | ||
| (Page 6 of 6) | ||
| Auditor’s Responsibilities for the Audit of the Financial Statements (Cont’d) | ||
| We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. | ||
| We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. | ||
| From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. | ||
| PricewaterhouseCoopers Zhong Tian LLP Shanghai, the People’s Republic of China 28 April 2022 | Signing CPA Signing CPA | ————————— Yao Wenping (Engagement Partner) ————————— Wu Fangfang |
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MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETSAS AT 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| ASSETS | Note | 31 December 2021 | 31 December 2020 | 31 December 2021 | 31 December 2020 |
| Consolidated | Consolidated | Company | Company | ||
| Current assets | |||||
| Cash at bank and on hand | 4(1) | 71,875,556 | 81,210,482 | 48,153,997 | 49,240,180 |
| Financial assets held for trading | 4(2) | 5,879,202 | 28,239,601 | 3,442,317 | 16,614,658 |
| Derivative financial assets | 545,865 | 420,494 | 157,501 | - | |
| Notes receivable | 4(3) | 4,784,914 | 5,304,510 | - | - |
| Accounts receivable | 4(4) | 24,636,440 | 22,978,363 | - | - |
| Receivables financing | 4(6) | 10,273,552 | 13,901,856 | - | - |
| Advances to suppliers | 4(7) | 4,352,807 | 2,763,710 | 106,838 | 45,306 |
| Contract assets | 4(8) | 3,823,476 | 3,236,848 | - | - |
| Loans and advances | 4(9) | 20,656,600 | 16,469,069 | - | - |
| Other receivables | 4(5), 18(1) | 3,104,065 | 2,973,945 | 31,447,849 | 28,318,670 |
| Inventories | 4(10) | 45,924,439 | 31,076,529 | - | - |
| Current portion of non-current assets | 4(11) | 19,851,577 | - | 19,095,262 | - |
| Other current assets | 4(12) | 33,156,012 | 33,079,918 | 11,713,182 | 20,533,745 |
| Total current assets | 248,864,505 | 241,655,325 | 114,116,946 | 114,752,559 | |
| Non-current assets | |||||
| Other debt investments | 4(13) | 7,893,935 | 21,456,155 | 6,034,563 | 20,064,155 |
| Long-term receivables | 4(14) | 871,356 | 981,623 | - | - |
| Loans and advances | 4(9) | 851,927 | 1,113,501 | - | - |
| Long-term equity investments | 4(15), 18(2) | 3,796,705 | 2,901,337 | 66,805,691 | 54,991,161 |
| Investments in other equity instruments | 45,747 | 46,651 | - | - | |
| Other non-current financial assets | 4(16) | 5,912,873 | 3,360,849 | 537,214 | 80,937 |
| Investment properties | 859,195 | 405,559 | 428,460 | 476,839 | |
| Fixed assets | 4(17) | 22,852,848 | 22,239,214 | 661,692 | 749,835 |
| Construction in progress | 4(18) | 2,690,930 | 1,477,302 | 800,243 | 204,304 |
| Right-of-use assets | 4(19) | 2,297,354 | — | 2,585 | — |
| Intangible assets | 4(20) | 17,173,072 | 15,422,393 | 669,158 | 684,997 |
| Goodwill | 4(21) | 27,874,752 | 29,557,218 | - | - |
| Long-term prepaid expenses | 4(22) | 1,394,240 | 1,300,962 | 79,799 | 97,078 |
| Deferred tax assets | 4(23) | 8,192,309 | 7,208,635 | 289,964 | 287,360 |
| Other non-current assets | 4(24) | 36,374,356 | 11,255,879 | 33,023,304 | 10,141,031 |
| Total non-current assets | 139,081,599 | 118,727,278 | 109,332,673 | 87,777,697 | |
| TOTAL ASSETS | 387,946,104 | 360,382,603 | 223,449,619 | 202,530,256 |
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MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS (CONT’D)AS AT 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| LIABILITIES AND SHAREHOLDERS’ EQUITY | Note | 31 December 2021 | 31 December 2020 | 31 December 2021 | 31 December 2020 |
| Consolidated | Consolidated | Company | Company | ||
| Current liabilities | |||||
| Short-term borrowings | 4(27) | 5,381,623 | 9,943,929 | - | 799,314 |
| Borrowings from Central Bank | 178,878 | - | - | - | |
| Customer deposits and deposits from banks and other financial institutions | 78,180 | 87,535 | - | - | |
| Derivative financial liabilities | 157,602 | 161,225 | - | - | |
| Notes payable | 4(28) | 32,752,007 | 28,249,939 | - | - |
| Accounts payable | 4(29) | 65,983,559 | 53,930,261 | - | - |
| Contract liabilities | 4(30) | 23,916,595 | 18,400,922 | - | - |
| Employee benefits payable | 4(31) | 7,535,168 | 6,954,822 | 420,536 | 562,954 |
| Taxes payable | 4(32) | 5,404,267 | 5,758,058 | 1,184,813 | 1,326,219 |
| Other payables | 4(33) | 4,288,104 | 4,501,391 | 151,450,555 | 123,120,354 |
| Current portion of non-current liabilities | 4(34) | 28,947,540 | 6,310,181 | 92,647 | 4,000,000 |
| Other current liabilities | 4(35) | 48,227,953 | 49,852,239 | 35,932 | 3,048,794 |
| Total current liabilities | 222,851,476 | 184,150,502 | 153,184,483 | 132,857,635 | |
| Non-current liabilities | |||||
| Long-term borrowings | 4(36) | 19,734,020 | 42,827,287 | 12,509,900 | 5,800,000 |
| Lease liabilities | 4(37) | 1,533,552 | — | - | — |
| Long-term payables | - | 13,260 | - | - | |
| Provisions | 310,571 | 298,110 | - | - | |
| Deferred income | 1,228,459 | 779,729 | 154,015 | - | |
| Long-term employee benefits payable | 4(38) | 1,825,016 | 2,159,675 | - | - |
| Deferred tax liabilities | 4(23) | 4,950,245 | 5,223,954 | 17,028 | 67,792 |
| Other non-current liabilities | 4(39) | 687,689 | 692,986 | - | - |
| Total non-current liabilities | 30,269,552 | 51,995,001 | 12,680,943 | 5,867,792 | |
| Total liabilities | 253,121,028 | 236,145,503 | 165,865,426 | 138,725,427 | |
| Shareholders’ equity | |||||
| Share capital | 4(40) | 6,986,564 | 7,029,976 | 6,986,564 | 7,029,976 |
| Capital surplus | 4(42) | 20,516,930 | 22,488,105 | 27,105,153 | 29,123,547 |
| Less: Treasury stock | 4(41) | (14,044,550) | (6,094,347) | (14,044,550) | (6,094,347) |
| Other comprehensive income | 4(43) | (1,758,948) | (1,549,003) | (7,295) | (16,009) |
| General risk reserve | 719,922 | 587,984 | - | - | |
| Special reserve | 15,542 | 12,730 | - | - | |
| Surplus reserve | 4(44) | 9,449,901 | 7,966,362 | 9,449,901 | 7,966,362 |
| Undistributed profits | 4(45) | 102,982,763 | 87,074,453 | 28,094,420 | 25,795,300 |
| Total equity attributable to shareholders of the Company | 124,868,124 | 117,516,260 | 57,584,193 | 63,804,829 | |
| Minority interests | 9,956,952 | 6,720,840 | - | - | |
| Total shareholders’ equity | 134,825,076 | 124,237,100 | 57,584,193 | 63,804,829 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 387,946,104 | 360,382,603 | 223,449,619 | 202,530,256 |
The accompanying notes form an integral part of these financial statements.
| Legal representative: | Principal in charge of accounting: | Head of accounting department: |
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MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Note | 2021 | 2020 | 2021 | 2020 | |
| Consolidated | Consolidated | Company | Company | |||
| Total revenue | 343,360,825 | 285,709,729 | 1,865,278 | 1,852,312 | ||
| Including: Operating revenue | 4(46), 18(3) | 341,233,208 | 284,221,249 | 1,865,278 | 1,852,312 | |
| Interest income | 4(47) | 2,127,043 | 1,488,211 | - | - | |
| Fee and commission income | 574 | 269 | - | - | ||
| Less: Cost of sales | 4(46) | (264,525,999) | (216,798,413) | (58,510) | (51,350) | |
| Interest costs | 4(47) | (87,066) | (105,168) | - | - | |
| Fee and commission expenses | (13,015) | (6,972) | - | - | ||
| Taxes and surcharges | 4(48) | (1,609,384) | (1,533,646) | (48,126) | (32,546) | |
| Selling and distribution expenses | 4(49) | (28,647,344) | (23,563,455) | - | - | |
| General and administrative expenses | 4(50) | (10,266,283) | (9,264,148) | (684,794) | (701,711) | |
| Research and development expenses | 4(51) | (12,014,907) | (10,118,667) | - | - | |
| Financial income | 4(52) | 4,386,111 | 2,638,032 | 2,107,914 | 1,421,019 | |
| Including: Interest expenses | (1,357,564) | (1,305,591) | (2,257,440) | (1,903,866) | ||
| Interest income | 5,181,658 | 3,663,028 | 4,397,266 | 3,352,633 | ||
| Add: Other income | 4(58) | 1,307,504 | 1,424,090 | 280,318 | 369,889 | |
| Investment income | 4(56), 18(4) | 2,365,773 | 2,362,462 | 12,462,103 | 12,578,455 | |
| Including: Investment income from associates | 560,679 | 402,528 | 265,491 | 216,318 | ||
| Gains or losses on changes in fair value | 4(55) | (166,406) | 1,762,950 | (203,057) | 108,605 | |
| Credit impairment losses | 4(54) | (383,451) | (247,605) | (127,693) | (6,340) | |
| Asset impairment losses | 4(53) | (483,420) | (705,209) | - | - | |
| Gains/(Losses) on disposal of assets | 4(57) | 58,257 | (60,523) | (272) | 146 | |
| Operating profit | 33,281,195 | 31,493,457 | 15,593,161 | 15,538,479 | ||
| Add: Non-operating income | 624,744 | 384,986 | 31,358 | 102,429 | ||
| Less: Non-operating expenses | (188,395) | (214,904) | (48,783) | (116,120) | ||
| Total profit | 33,717,544 | 31,663,539 | 15,575,736 | 15,524,788 | ||
| Less: Income tax expenses | 4(59) | (4,702,168) | (4,156,997) | (740,348) | (337,750) | |
| Net profit | 29,015,376 | 27,506,542 | 14,835,388 | 15,187,038 | ||
| (1) Classified by continuity of operations | ||||||
| Net profit from continuing operations | 29,015,376 | 27,506,542 | 14,835,388 | 15,187,038 | ||
| Net profit from discontinued operations | - | - | - | - | ||
| (2) Classified by ownership of the equity | ||||||
| Attributable to shareholders of the Company | 28,573,650 | 27,222,969 | 14,835,388 | 15,187,038 | ||
| Minority interests | 441,726 | 283,573 | - | - | ||
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MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Note | 2021 | 2020 | 2021 | 2020 | |
| Consolidated | Consolidated | Company | Company | |||
| Other comprehensive income, net of tax | (237,306) | (1,177,809) | 8,714 | (17,744) | ||
| Other comprehensive income attributable to shareholders of the Company, net of tax | (207,079) | (837,449) | 8,714 | (17,744) | ||
| (1) Other comprehensive income items which will not be reclassified subsequently to profit or loss | (6,748) | 112,388 | - | - | ||
| 1) Changes arising from remeasurement of defined benefit plan | (7,172) | 111,895 | - | - | ||
| 2) Changes in fair value of investments in other equity instruments | 424 | 493 | - | - | ||
| (2) Other comprehensive income items which will be reclassified subsequently to profit or loss | (200,331) | (949,837) | 8,714 | (17,744) | ||
| 1) Other comprehensive income that will be transferred subsequently to profit or loss under the equity method | (3,032) | (20,445) | 8,714 | (17,744) | ||
| 2) Cash flow hedging reserve | (6,997) | 298,721 | - | - | ||
| 3) Differences on translation of foreign currency financial statements | (190,302) | (1,228,113) | - | - | ||
| Other comprehensive income attributable to minority shareholders, net of tax | (30,227) | (340,360) | - | - | ||
| Total comprehensive income | 28,778,070 | 26,328,733 | 14,844,102 | 15,169,294 | ||
| Attributable to shareholders of the Company | 28,366,571 | 26,385,520 | 14,844,102 | 15,169,294 | ||
| Minority interests | 411,499 | (56,787) | - | - | ||
| Earnings per share | ||||||
| Basic earnings per share (RMB Yuan) | 4(60) | 4.17 | 3.93 | Not applicable | Not applicable | |
| Diluted earnings per share (RMB Yuan) | 4(60) | 4.14 | 3.90 | Not applicable | Not applicable | |
| The accompanying notes form an integral part of these financial statements. | ||||||
| Legal representative: | Principal in charge of accounting: | Head of accounting department: |
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MIDEA GROUP CO., LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Note | 2021 | 2020 | 2021 | 2020 |
| Consolidated | Consolidated | Company | Company | ||
| 1 Cash flows from operating activities | |||||
| Cash received from sales of goods or rendering of services | 310,489,824 | 240,052,501 | - | - | |
| Net increase in customer deposits and deposits from banks and other financial institutions | - | 25,058 | - | - | |
| Net decrease in deposits with the Central Bank | 1,287,927 | - | - | - | |
| Net increase in borrowings from the Central Bank | 178,878 | - | - | - | |
| Cash received from interest, fee and commission | 1,889,716 | 1,381,851 | - | - | |
| Refund of taxes and surcharges | 9,968,330 | 6,574,762 | - | - | |
| Cash received relating to other operating activities | 4(61)(a) | 6,600,822 | 4,950,874 | 31,451,132 | 21,491,325 |
| Sub-total of cash inflows | 330,415,497 | 252,985,046 | 31,451,132 | 21,491,325 | |
| Cash paid for goods and services | (209,216,044) | (139,660,744) | - | - | |
| Net increase in loans and advances | (4,062,432) | (6,078,053) | - | - | |
| Net decrease in customer deposits and deposits from banks and other financial institutions | (9,355) | - | - | - | |
| Net increase in deposits with the Central Bank | - | (1,274,496) | - | - | |
| Cash paid for interest, fee and commission | (101,110) | (113,517) | - | - | |
| Cash paid to and on behalf of employees | (32,095,846) | (28,460,318) | (32,879) | (72,404) | |
| Payments of taxes and surcharges | (15,613,276) | (13,407,607) | (453,861) | (342,190) | |
| Cash paid relating to other operating activities | 4(61)(b) | (34,225,730) | (34,433,194) | (3,996,431) | (10,178,648) |
| Sub-total of cash outflows | (295,323,793) | (223,427,929) | (4,483,171) | (10,593,242) | |
| Net cash flows from operating activities | 4(61)(c) | 35,091,704 | 29,557,117 | 26,967,961 | 10,898,083 |
| 2 Cash flows from/(in) investing activities | |||||
| Cash received from disposal of investments | 121,628,148 | 141,821,724 | 59,767,847 | 103,460,300 | |
| Cash received from returns on investments | 5,648,277 | 4,874,990 | 14,887,506 | 15,565,104 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 336,186 | 273,544 | 86 | 255 | |
| Net cash received from disposal of subsidiaries and other business units | 188,490 | 42,398 | 8,326 | 13,000 | |
| Sub-total of cash inflows | 127,801,101 | 147,012,656 | 74,663,765 | 119,038,659 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (6,825,357) | (4,656,582) | (752,937) | (187,723) | |
| Cash paid to acquire investments | (105,347,246) | (176,621,347) | (68,932,311) | (117,386,281) | |
| Net cash paid to acquire subsidiaries and other business units | (2,028,912) | (1,045,390) | - | - | |
| Sub-total of cash outflows | (114,201,515) | (182,323,319) | (69,685,248) | (117,574,004) | |
| Net cash flows from/(in) investing activities | 13,599,586 | (35,310,663) | 4,978,517 | 1,464,655 | |
| 3 Cash flows used in financing activities | |||||
| Cash received from capital contributions | 1,550,951 | 2,657,489 | 1,487,792 | 2,542,556 | |
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | 63,159 | 114,933 | - | - | |
| Cash received from borrowings | 16,033,803 | 18,070,961 | 6,800,000 | 6,599,314 | |
| Cash received from issuance of short-term financing bonds | 2,999,629 | 33,998,238 | 2,999,629 | 33,998,238 | |
| Cash received relating to other financing activities | 560,838 | 22,725 | - | - | |
| Sub-total of cash inflows | 21,145,221 | 54,749,413 | 11,287,421 | 43,140,108 | |
| Cash repayments of borrowings | (18,225,351) | (8,354,338) | (4,799,414) | (4,550,064) | |
| Cash paid for repayment of short-term financing bonds | (6,000,000) | (31,000,000) | (6,000,000) | (31,000,000) | |
| Cash payments for interest expenses and distribution of dividends or profits | (12,894,125) | (12,822,636) | (13,261,677) | (12,831,949) | |
| Including: Cash payments for dividends or profit to minority shareholders of subsidiaries | (426,947) | (425,461) | - | - | |
| Cash payments relating to other financing activities | 4(61)(d) | (15,230,284) | (3,328,734) | (13,810,829) | (2,934,420) |
| Sub-total of cash outflows | (52,349,760) | (55,505,708) | (37,871,920) | (51,316,433) | |
| Net cash flows used in financing activities | (31,204,539) | (756,295) | (26,584,499) | (8,176,325) | |
| 4 Effect of foreign exchange rate changes on cash and cash equivalents | (485,220) | (383,411) | - | - | |
| 5 Net increase/(decrease) in cash and cash equivalents | 4(61)(c) | 17,001,531 | (6,893,252) | 5,361,979 | 4,186,413 |
| Add: Cash and cash equivalents at the beginning of the year | 23,548,508 | 30,441,760 | 16,595,063 | 12,408,650 | |
| 6 Cash and cash equivalents at the end of the year | 4(61)(e) | 40,550,039 | 23,548,508 | 21,957,042 | 16,595,063 |
The accompanying notes form an integral part of these financial statements.
| Legal representative: | Principal in charge of accounting: | Head of accounting department: |
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MIDEA GROUP CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Equity attributable to shareholders of the Company | Minority interests | Total shareholders’ equity | ||||||||
| Share capital | Capital surplus | Less: Treasury stock | Other comprehensive income | General risk reserve | Special reserve | Surplus reserve | Undistributed profits | ||||
| (Note 4(40)) | (Note 4(42)) | (Note 4(41)) | (Note 4(43)) | (Note 4(44)) | (Note 4(45)) | ||||||
| Balance at 1 January 2020 | 6,971,900 | 19,640,313 | (3,759,732) | (711,554) | 366,947 | - | 6,447,658 | 72,713,631 | 5,826,934 | 107,496,097 | |
| Movements for the year ended 31 December 2020 | |||||||||||
| Total comprehensive income | |||||||||||
| Net profit | - | - | - | - | - | - | - | 27,222,969 | 283,573 | 27,506,542 | |
| Other comprehensive income, net of tax | - | - | - | (837,449) | - | - | - | - | (340,360) | (1,177,809) | |
| Total comprehensive income | - | - | - | (837,449) | - | - | - | 27,222,969 | (56,787) | 26,328,733 | |
| Capital contribution and withdrawal by shareholders | |||||||||||
| Ordinary shares invested by shareholders | 63,801 | 2,157,530 | - | - | - | - | - | - | 89,465 | 2,310,796 | |
| Business combinations | - | - | - | - | - | 13,618 | - | - | 1,663,792 | 1,677,410 | |
| Share-based payment included in shareholders' equity | - | 508,256 | - | - | - | - | - | - | 55,314 | 563,570 | |
| Others | (5,725) | (193,357) | (2,334,615) | - | - | - | - | - | (517,436) | (3,051,133) | |
| Profit distribution | |||||||||||
| Appropriation to general risk reserve | - | - | - | - | 221,037 | - | - | (221,037) | - | - | |
| Appropriation to surplus reserve | - | - | - | - | - | - | 1,518,704 | (1,518,704) | - | - | |
| Profit distribution to shareholders | - | - | - | - | - | - | - | (11,122,406) | (417,486) | (11,539,892) | |
| Special reserve | |||||||||||
| Appropriation in the current period | - | - | - | - | - | 165 | - | - | 41 | 206 | |
| Usein the current period | - | - | - | - | - | (1,053) | - | - | (263) | (1,316) | |
| Others | - | 375,363 | - | - | - | - | - | - | 77,266 | 452,629 | |
| Balance at 31 December 2020 | 7,029,976 | 22,488,105 | (6,094,347) | (1,549,003) | 587,984 | 12,730 | 7,966,362 | 87,074,453 | 6,720,840 | 124,237,100 | |
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MIDEA GROUP CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Equity attributable to shareholders of the Company | Minority interests | Total shareholders’ equity | ||||||||
| Share capital | Capital surplus | Less: Treasury stock | Other comprehensive income | General risk reserve | Special reserve | Surplus reserve | Undistributed profits | ||||
| (Note 4(40)) | (Note 4(42)) | (Note 4(41)) | (Note 4(43)) | (Note 4(44)) | (Note 4(45)) | ||||||
| Balance at 1 January 2021 | 7,029,976 | 22,488,105 | (6,094,347) | (1,549,003) | 587,984 | 12,730 | 7,966,362 | 87,074,453 | 6,720,840 | 124,237,100 | |
| Movements for the year ended 31 December 2021 | |||||||||||
| Total comprehensive income | |||||||||||
| Net profit | - | - | - | - | - | - | - | 28,573,650 | 441,726 | 29,015,376 | |
| Other comprehensive income, net of tax | - | - | - | (207,079) | - | - | - | - | (30,227) | (237,306) | |
| Total comprehensive income | - | - | - | (207,079) | - | - | - | 28,573,650 | 411,499 | 28,778,070 | |
| Capital contribution and withdrawal by shareholders | |||||||||||
| Ordinary shares invested by shareholders | 34,437 | 1,495,004 | - | - | - | - | - | - | 587,480 | 2,116,921 | |
| Business combinations | - | - | - | - | - | - | - | - | 3,189,892 | 3,189,892 | |
| Share-based payment included in shareholders' equity | - | 1,190,124 | - | - | - | - | - | - | 62,031 | 1,252,155 | |
| Others | (77,849) | (5,178,730) | (7,950,203) | - | - | - | - | - | (449,682) | (13,656,464) | |
| Profit distribution | |||||||||||
| Appropriation to general risk reserve | - | - | - | - | 131,938 | - | - | (131,938) | - | - | |
| Appropriation to surplus reserve | - | - | - | - | - | - | 1,483,539 | (1,483,539) | - | - | |
| Profit distribution to shareholders | - | - | - | - | - | - | - | (11,052,729) | (401,397) | (11,454,126) | |
| Special reserve | |||||||||||
| Appropriation in the current period | - | - | - | - | - | 2,812 | - | - | 703 | 3,515 | |
| Use in the current period | - | - | - | - | - | - | - | - | - | - | |
| Others | - | 522,427 | - | (2,866) | - | - | - | 2,866 | (164,414) | 358,013 | |
| Balance at 31 December 2021 | 6,986,564 | 20,516,930 | (14,044,550) | (1,758,948) | 719,922 | 15,542 | 9,449,901 | 102,982,763 | 9,956,952 | 134,825,076 | |
| The accompanying notes form an integral part of these financial statements. |
| Legal representative: | Principal in charge of accounting: | Head of accounting department: |
- 237 -
MIDEA GROUP CO., LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Share capital | Capital surplus | Less: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total shareholders’ equity | |
| Balance at 1 January 2020 | 6,971,900 | 26,592,959 | (3,759,732) | 1,735 | 6,447,658 | 23,249,372 | 59,503,892 | |
| Movements for the year ended 31 December 2020 | ||||||||
| Total comprehensive income | ||||||||
| Net profit | - | - | - | - | - | 15,187,038 | 15,187,038 | |
| Other comprehensive income, net of tax | - | - | - | (17,744) | - | - | (17,744) | |
| Total comprehensive income | - | - | - | (17,744) | - | 15,187,038 | 15,169,294 | |
| Capital contribution and withdrawal by shareholders | ||||||||
| Ordinary shares invested by shareholders | 63,801 | 2,157,530 | - | - | - | - | 2,221,331 | |
| Share-based payment included in shareholders' equity | - | 566,167 | - | - | - | - | 566,167 | |
| Others | (5,725) | (193,357) | (2,334,615) | - | - | - | (2,533,697) | |
| Profit distribution | ||||||||
| Appropriation to surplus reserve | - | - | - | - | 1,518,704 | (1,518,704) | - | |
| Profit distribution to shareholders | - | - | - | - | - | (11,122,406) | (11,122,406) | |
| Others | - | 248 | - | - | - | - | 248 | |
| Balance at 31 December 2020 | 7,029,976 | 29,123,547 | (6,094,347) | (16,009) | 7,966,362 | 25,795,300 | 63,804,829 | |
- 238 -
MIDEA GROUP CO., LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
| Item | Share capital | Capital surplus | Less: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total shareholders’ equity | |
| Balance at 1 January 2021 | 7,029,976 | 29,123,547 | (6,094,347) | (16,009) | 7,966,362 | 25,795,300 | 63,804,829 | |
| Movements for the year ended 31 December 2021 | ||||||||
| Total comprehensive income | ||||||||
| Net profit | - | - | - | - | - | 14,835,388 | 14,835,388 | |
| Other comprehensive income, net of tax | - | - | - | 8,714 | - | - | 8,714 | |
| Total comprehensive income | - | - | - | 8,714 | - | 14,835,388 | 14,844,102 | |
| Capital contribution and withdrawal by shareholders | ||||||||
| Ordinary shares invested by shareholders | 34,437 | 1,495,004 | - | - | - | - | 1,529,441 | |
| Share-based payment included in shareholders' equity | - | 1,231,289 | - | - | - | - | 1,231,289 | |
| Others | (77,849) | (5,178,730) | (7,950,203) | - | - | - | (13,206,782) | |
| Profit distribution | ||||||||
| Appropriation to surplus reserve | - | - | - | - | 1,483,539 | (1,483,539) | - | |
| Profit distribution to shareholders | - | - | - | - | - | (11,052,729) | (11,052,729) | |
| Others | - | 434,043 | - | - | - | - | 434,043 | |
| Balance at 31 December 2021 | 6,986,564 | 27,105,153 | (14,044,550) | (7,295) | 9,449,901 | 28,094,420 | 57,584,193 | |
| The accompanying notes form an integral part of these financial statements. |
| Legal representative: | Principal in charge of accounting: | Head of accounting department: |
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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1 General information
The principal business activities of Midea Group Co., Ltd. (hereinafter referred to as “theCompany”) and its subsidiaries (hereinafter collectively referred to as “the Group”) includeresidential air-conditioner, central air-conditioner, heating and ventilation systems, kitchenappliances, refrigerators, washing machines and various small appliances, robotics andautomation system. Other services include the smart supply chain; sale, wholesale andprocessing of raw materials of household electrical appliances; and financial businessinvolving customer deposits, interbank lendings and borrowings, consumption credits,buyer’s credits and finance leases.The Company was set up by the Council of Trade Unions of GD Midea Group Co., Ltd. andwas registered in Market Safety Supervision Bureau of Shunde District, Foshan on 7 April2000, with its headquarters located in Foshan, Guangdong. On 30 August 2012, theCompany was transformed into a limited liability company. On 29 July 2013, the Companywas approved to merge and acquire Guangdong Midea Electric Co., Ltd., which was listedon Shenzhen Stock Exchange. On 18 September 2013, the Company’s shares were listedon Shenzhen Stock Exchange.As at 31 December 2021, the Company's share capital was RMB 6,986,563,844, and thetotal number of shares in issue was 6,986,563,844, of which 156,538,881 shares wererestricted tradable A shares and 6,830,024,963 shares were unrestricted tradable A shares.The detailed information of major subsidiaries included in the consolidation scope in thecurrent year is set out in Notes 5 and 6. Subsidiaries newly included in the consolidationscope via acquisition in the current year mainly include Beijing Wandong MedicalTechnology Co., Ltd. and its subsidiaries (“Wandong Medical”) and Hitachi Compressor(Thailand) Ltd., and are detailed in Note 5(1)(a); subsidiaries newly included in theconsolidation scope via establishment in the current year are detailed in Note 5(2)(a);subsidiaries no longer included in the consolidation scope in the current year are detailed inNote 5(2)(b).These financial statements were authorised for issue by the Company’s Board of Directorson 28 April 2022.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates
The Group determines specific accounting policies and accounting estimates based on thefeatures of production and operation, mainly including the measurement of expected creditloss (ECL) on receivables and contract assets (Note 2(9)(a)), valuation method of inventory(Note 2(10)), depreciation of fixed assets, amortisation of intangible assets and right-of-useassets (Note 2(13), (16), (28)), impairment of long-term assets (Note 2(18)), and recognitionand measurement of revenue (Note 2(25)).
Key judgements and critical accounting estimates and key assumptions applied by theGroup on the determination of significant accounting policies are set out in Note 2(30).
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standard forBusiness Enterprises - Basic Standard, and the specific accounting standards and otherrelevant regulations issued by the Ministry of Finance on 15 February 2006 and insubsequent periods (hereinafter collectively referred to as the “Accounting Standards forBusiness Enterprises” or “CASs”) and the disclosure requirements in the PreparationConvention of Information Disclosure by Companies Offering Securities to the Public No. 15- General Rules on Financial Reporting issued by the China Securities RegulatoryCommission (“CSRC”).
The financial statements are prepared on a going concern basis.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2021 are incompliance with the Accounting Standards for Business Enterprises, and truly andcompletely present the consolidated and company’s financial position of the Company as at31 December 2021 and their financial performance, cash flows and other information for theyear then ended.
(3) Accounting period
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Functional currency
The functional currency of the Company is Renminbi (“RMB”). The subsidiaries determinetheir functional currency based on the primary economic environment in which the businessis operated, mainly including EUR, JPY, USD and HKD. The financial statements arepresented in RMB.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(5) Business combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the Group in a business combination aremeasured at the carrying amount. If the absorbed party was bought by the ultimate controllerfrom a third party in prior years, the value of its assets and liabilities (including goodwillgenerated due to the combination) are based on the carrying amount in the ultimatecontroller’s consolidated financial statements. The difference between the carrying amountof the net assets obtained by the Group and the carrying amount of the consideration paidfor the combination is treated as an adjustment to capital surplus (share premium). If thecapital surplus (share premium) is not sufficient to absorb the difference, the remainingbalance is adjusted against retained earnings. Costs directly attributable to the combinationare included in profit or loss in the period in which they are incurred. Transaction costsassociated with the issue of equity or debt securities for the business combination areincluded in the initially recognised amounts of the equity or debt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the Group in a businesscombination are measured at fair value at the acquisition date. Where the cost of thecombination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable netassets, the difference is recognised as goodwill; where the cost of combination is lower thanthe acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the differenceis recognised in profit or loss for the current period. Costs directly attributable to thecombination are included in profit or loss in the period in which they are incurred. Transactioncosts associated with the issue of equity or debt securities for the business combination areincluded in the initially recognised amounts of the equity or debt securities.
For business combinations achieved by stages involving enterprises not under commoncontrol, previously-held equity in the acquiree is remeasured at its fair value at theacquisition dates. For the equity interest held in the acquiree before the acquisition dateunder equity method, the difference between its fair value and carrying amount is recognisedas investment income for the current period; for the other comprehensive income under theequity method and shareholders’ equity changes other than those arising from the net profitor loss, other comprehensive income and profit distribution, the related other comprehensiveincome and other shareholders' equity changes are transferred into profit or loss for thecurrent period to which the acquisition dates belong, excluding those arising from changesin the investee's remeasurements of net liability or net asset related to the defined benefitplan, and those arising from accumulative changes in fair value of investments in equityinstruments not held for trading that are held by investees and designated as at fair valuethrough other comprehensive income. For previously-held equity in the acquireecategorised as financial assets at fair value through profit or loss, the difference between itsfair value and carrying amount is transferred to investment income under the cost method;for previously-held equity in the acquiree categorised as investments in equity instrumentsnot held for trading at fair value through other comprehensive income, its accumulativechanges in fair value that are originally recognised in other comprehensive income aredirectly reclassified to retained earnings. The excess of the sum of fair value of thepreviously-held equity and fair value of the consideration paid at the acquisition date overshare of fair value of identifiable net assets acquired from the subsidiary is recognised asgoodwill.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Companyand all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in abusiness combination involving enterprises under common control, it is included in theconsolidated financial statements from the date when it, together with the Company, comesunder common control of the ultimate controlling party. The portion of the net profits realisedbefore the combination date is presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and theaccounting periods of the Company and subsidiaries are inconsistent, the financialstatements of the subsidiaries are adjusted in accordance with the accounting policies andthe accounting period of the Company. For subsidiaries acquired from businesscombinations involving enterprises not under common control, the individual financialstatements of the subsidiaries are adjusted based on the fair value of the identifiable netassets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in theconsolidated financial statements. The portion of subsidiaries’ shareholders' equity and theportion of subsidiaries’ net profits and losses and comprehensive incomes for the period notattributable to the Company are recognised as minority interests, net profit attributed tominority interests and total comprehensive incomes attributed to minority interests andpresented separately in the consolidated financial statements under shareholders' equity,net profit and total comprehensive income respectively. Where the loss for the current periodattributable to the minority shareholders of the subsidiaries exceeds the share of the minorityinterests in the opening balance of owners’ equity, the excess is deducted against minorityinterests. Unrealised profits and losses resulting from the sales of assets by the Companyto its subsidiaries are fully eliminated against net profit attributable to shareholders of theparent company. Unrealised profits and losses resulting from the sales of assets by asubsidiary to the Company are eliminated and allocated between net profit attributable toshareholders of the parent company and net profit attributable to minority interests inaccordance with the allocation proportion of the parent company in the subsidiary.Unrealised profits and losses resulting from the sales of assets by one subsidiary to anotherare eliminated and allocated between net profit attributable to shareholders of the parentcompany and net profit attributable to minority interests in accordance with the allocationproportion of the parent company in the subsidiary.
If the accounting treatment of a transaction is inconsistent in the financial statements at theGroup level and at the Company or its subsidiary level, adjustment will be made from theperspective of the Group.
(7) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn ondemand, and short-term and highly liquid investments that are readily convertible to knownamounts of cash and which are subject to an insignificant risk of changes in value.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Foreign currency translation
(a) Foreign currency transactions
Foreign currency transactions are translated into functional currency using the exchangerates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translatedinto functional currency using the spot exchange rates on the balance sheet date. Exchangedifferences arising from these translations are recognised in profit or loss for the currentperiod, except for those attributable to foreign currency borrowings that have been takenout specifically for acquisition or construction of qualifying assets, which are capitalised aspart of the cost of those assets. Non-monetary items denominated in foreign currencies thatare measured at historical costs are translated at the balance sheet date using the spotexchange rates at the date of the transactions. The effect of exchange rate changes on cashis presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated atthe spot exchange rates on the balance sheet date. Among the equity items, the items otherthan undistributed profits are translated at the spot exchange rates of the transaction dates.The income and expense items in the income statements of overseas operations aretranslated at the spot exchange rates of the transaction dates. The differences arising fromthe above translation are recognised in other comprehensive income. The cash flows ofoverseas operations are translated at the spot exchange rates on the dates of the cashflows. The effect of exchange rate changes on cash is presented separately in the cash flowstatement.
(9) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. A financial asset or a financial liabilityis recognised when the Group becomes a party to the contractual provisions of theinstrument.
(a) Financial assets
(i) Classification and measurement
Based on the business model for managing the financial assets and the contractual cashflow characteristics of the financial assets, financial assets are classified as: (1) financialassets at amortised cost; (2) financial assets at fair value through other comprehensiveincome; (3) financial assets at fair value through profit or loss.
The financial assets are measured at fair value at initial recognition. Related transactioncosts that are attributable to the acquisition of the financial assets are included in the initiallyrecognised amounts, except for the financial assets at fair value through profit or loss, therelated transaction costs of which are recognised directly in profit or loss for the currentperiod. Accounts receivable or notes receivable arising from sales of products or renderingof services (excluding or without regard to significant financing components) are initiallyrecognised at the consideration that is entitled to be charged by the Group as expected.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
(i-1) Debt instruments
The debt instruments held by the Group refer to the instruments that meet the definition offinancial liabilities from the perspective of the issuer, and are measured in the following threeways:
Measured at amortised cost:
The objective of the Group’s business model is to hold the financial assets to collect thecontractual cash flows, and the contractual cash flow characteristics are consistent with abasic lending arrangement, which gives rise on specified dates to the contractual cash flowsthat are solely payments of principal and interest on the principal amount outstanding. Theinterest income of such financial assets is recognised using the effective interest method.Such financial assets mainly comprise cash at bank and on hand, loans and advances,notes receivable, accounts receivable, other receivables, other current assets, debtinvestments, long-term receivables and other non-current assets, etc. Debt investments andlong-term receivables that are due within one year (inclusive) as from the balance sheetdate are included in the current portion of non-current assets; debt investments withmaturities of no more than one year (inclusive) at the time of acquisition are included in othercurrent assets.
Measured at fair value through other comprehensive income:
The objective of the Group’s business model is to hold the financial assets to both collectthe contractual cash flows and sell such financial assets, and the contractual cash flowcharacteristics are consistent with a basic lending arrangement. Such financial assets aremeasured at fair value through other comprehensive income, except for the impairmentgains or losses, foreign exchange gains and losses, and interest income calculated usingthe effective interest method which are recognised in profit or loss for the current period.Such financial assets mainly include receivables financing, other debt investments, etc.Other debt investments of the Group that are due within one year (inclusive) as from thebalance sheet date are included in the current portion of non-current assets; other debtinvestments with maturities no more than one year (inclusive) at the time of acquisition areincluded in other current assets.
Measured at fair value through profit or loss:
Debt instruments held by the Group that are not divided into those at amortised cost, orthose measured at fair value through other comprehensive income, are measured at fairvalue through profit or loss. At initial recognition, the Group designates a portion of financialassets as at fair value through profit or loss to eliminate or significantly reduce an accountingmismatch. Financial assets that are due over one year as from the balance sheet date andare expected to be held over one year are included in other non-current financial assets.Others are included in financial assets held for trading.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
(i-2) Equity instruments
Investments in equity instruments, over which the Group has no control, joint control orsignificant influence, are measured at fair value through profit or loss under financial assetsheld for trading; investments in equity instruments expected to be held over one year asfrom the balance sheet date are included in other non-current financial assets.
In addition, at initial recognition, a portion of certain investments in equity instruments notheld for trading are designated as financial assets at fair value through other comprehensiveincome under investments in other equity instruments. The relevant dividend income of suchfinancial assets is recognised in profit or loss for the current period.
(i-3) Derivative financial instruments
The derivative financial instruments held by the Group are mainly used in controlling riskexposures. Derivative financial instruments are initially recognised at fair value on the daywhen derivatives transaction contract was signed, and subsequently measured at fair value.The derivative financial instruments are recorded as assets when they have a positive fairvalue and as liabilities when they have a negative fair value.
The method for recognising changes in fair value of the derivative financial instrumentdepends on whether the derivative financial instrument is designated as a hedginginstrument and meets the requirement for it, and if so, the nature of the item being hedged.For derivative financial instruments that are not designated as hedging instruments and failto meet requirements on hedging instruments, including those held for the purpose ofproviding hedging against specific risks in interest rate and foreign exchange but notconforming with requirements of hedge accounting, the changes in fair value are recordedin gains or losses on changes in fair value in the consolidated income statement.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification and measurement (Cont’d)
(i-3) Derivative financial instruments (Cont’d)
Cash flow hedge
The effective portion of gains or losses on hedging instruments is recognised in othercomprehensive income as cash flow hedging reserve, while the ineffective portion isrecognised in profit or loss for the current period. Where the hedge is a forecast transactionwhich subsequently results in the recognition of a non-financial asset or liability, the amountoriginally recognised in other comprehensive income is transferred and included in theinitially recognised amount of the asset or liability. For cash flow hedge beyond the foregoingscope, the amount originally recognised in other comprehensive income is transferred andincluded in profit or loss for the current period during the same time in which the profit orloss is influenced by the hedged expected cash flow. However, if all or part of net lossrecognised directly in other comprehensive income will not be recovered in futureaccounting periods, the amount not expected to be recovered should be transferred to profitor loss for the current period. When the Group revokes the designation of a hedge, a hedginginstrument expires or is sold, terminated or exercised, or the hedge no longer meets thecriteria for hedge accounting, the Group will discontinue the hedge accounting treatmentsprospectively. Where the Group discontinues the hedge accounting treatment for cash flowhedging, for hedged future cash flows that will still happen, the accumulated gains or lossesthat have been recognised in other comprehensive income are retained and subject toaccounting treatment under the subsequent treatment method of aforesaid cash flowhedging reserve; for hedged future cash flows that the forecast transaction will neverhappen, the accumulated gains or losses that have been recognised in other comprehensiveincome are transferred immediately and included in profit or loss for the current period.
(ii) Impairment
Loss provision for financial assets at amortised cost, investments in debt instruments at fairvalue through other comprehensive income, as well as contract assets and leasereceivables is recognised on the basis of ECL.
Giving consideration to reasonable and supportable information on past events, currentconditions and forecasts of future economic conditions, and weighted by the risk of default,the Group recognises the ECL as the probability-weighted amount of the present value ofthe difference between the cash flows receivable from the contract and the cash flowsexpected to collect.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(ii) Impairment (Cont’d)
As at each balance sheet date, the ECL of financial instruments at different stages aremeasured respectively. 12-month ECL provision is recognised for financial instruments inStage 1 that have not had a significant increase in credit risk since initial recognition; lifetimeECL provision is recognised for financial instruments in Stage 2 that have had a significantincrease in credit risk yet without credit impairment since initial recognition; and lifetime ECLprovision is recognised for financial instruments in Stage 3 that have had credit impairmentsince initial recognition.
For the financial instruments with lower credit risk on the balance sheet date, the Groupassumes there is no significant increase in credit risk since initial recognition, determinesthem as the financial instruments in Stage 1 and recognises the 12-month ECL provision.
For the financial instruments in Stage 1 and Stage 2, the Group calculates the interestincome by applying the effective interest rate to the gross carrying amount (before deductionof the impairment provision). For the financial instruments in Stage 3, the interest income iscalculated by applying the effective interest rate to the amortised cost (after deduction of theimpairment provision from the gross carrying amount).
For notes receivable, accounts receivable, receivables financing, lease receivables andcontract assets arising from sales of goods and rendering of services in the ordinary courseof operating activities, the Group recognises the lifetime ECL provision regardless ofwhether there exists a significant financing component. Since contract assets are related towork in progress without invoice, essentially, their risk characteristics are the same as theaccounts receivable of similar contracts. Therefore, the Group believes that the ECL rate ofaccounts receivable is an approximation to that of contract assets. For lease receivables,the Group also determines to recognise the lifetime ECL provision.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(ii) Impairment (Cont’d)
In case the ECL of an individually assessed financial asset cannot be evaluated withreasonable cost, the Group divides the receivables and contract assets into certaingroupings based on credit risk characteristics, then pursuant to which, calculates the ECL.Basis and provision method for determining groupings are as follows:
| Grouping of notes receivable 1 | Bank acceptance notes grouping |
| Grouping of notes receivable 2 | Trade acceptance notes grouping |
| Grouping of accounts receivable 1 | Overseas business grouping |
| Grouping of accounts receivable 2 | Domestic business grouping |
| Grouping of contract assets 1 | Overseas business grouping |
| Grouping of contract assets 2 | Domestic business grouping |
| Grouping of other receivables 1 | Security deposit and guarantee receivables grouping |
| Grouping of other receivables 2 | Receivables from related parties grouping |
| Grouping of other receivables 3 | Other receivables grouping |
| Grouping of long-term receivables | Finance lease payable grouping |
| Grouping of loans and advances | Loans business grouping |
The Group, on the basis of the exposure at default and the lifetime ECL rate, calculates theECL of notes receivable and receivables financing that are classified into groupings withconsideration to historical credit losses experience, current conditions and forecasts offuture economic conditions.
With consideration to historical credit loss experience, current conditions and forecasts offuture economic conditions, the Group prepares the cross-reference between the numberof overdue days of accounts receivable and the lifetime ECL rate, and calculates the ECLof accounts receivable that are classified into groupings.
The Group, on the basis of the exposure at default and the 12-month or lifetime ECL rate,calculates the ECL of other receivables and loans and advances that are classified intogroupings with consideration to historical credit losses experience, the current conditionsand forecasts of future economic conditions.
The Group recognises the loss provision made or reversed into profit or loss for the currentperiod. For debt instruments held at fair value through other comprehensive income, theGroup adjusts other comprehensive income while the impairment loss or gain is recognisedin profit or loss for the current period.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instruments (Cont’d)
(a) Financial assets (Cont’d)
(iii) Derecognition of financial assets
A financial asset is derecognised when: (i) the contractual rights to the cash flows from thefinancial asset expire, (ii) the financial asset has been transferred and the Group transferssubstantially all the risks and rewards of ownership of the financial asset to the transferee,(iii) the financial asset has been transferred and the Group has not retained control of thefinancial asset, although the Group neither transfers nor retains substantially all the risksand rewards of ownership of the financial asset.
When a financial asset is derecognised, the difference between the carrying amount andthe sum of the consideration received and the cumulative changes in fair value that arepreviously recognised directly in other comprehensive income is recognised in profit or lossfor the current period, except for those as investments in other equity instruments, thedifference aforementioned is recognised in retained earnings instead.
(b) Financial liabilities
Financial liabilities are classified as financial liabilities at amortised cost and financialliabilities at fair value through profit or loss at initial recognition.
Financial liabilities of the Group mainly comprise financial liabilities at amortised cost,including notes payable, accounts payable, other payables, borrowings and short-termfinancing bonds payable in other current liabilities, customer deposits and deposits frombanks and other financial institutions, borrowings from the Central Bank, long-termpayables, etc. Such financial liabilities are initially recognised at fair value, net of transactioncosts incurred, and subsequently measured using the effective interest method. Financialliabilities that are due within one year (inclusive) are classified as current liabilities; thosewith maturities over one year but are due within one year (inclusive) as from the balancesheet date are classified as current portion of non-current liabilities. Others are classified asnon-current liabilities.
A financial liability is derecognised or partly derecognised when the underlying presentobligation is discharged or partly discharged. The difference between the carrying amountof the derecognised part of the financial liability and the consideration paid is recognised inprofit or loss for the current period.
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9)Financial instruments (Cont’d)
(c)Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined atthe quoted price in the active market. The fair value of a financial instrument that is nottraded in an active market is determined by using a valuation technique. In valuation, theGroup adopts valuation techniques applicable in the current situation and supported byadequate available data and other information, selects inputs with the same characteristicsas those of assets or liabilities considered in relevant transactions of assets or liabilities bymarket participants, and gives priority to the use of relevant observable inputs. Whenrelevant observable inputs are not available or feasible, unobservable inputs are adopted.
(10)Inventories
(a)Classification of inventories
Inventories, including finished goods, raw materials, work in progress, consigned processingmaterials and low value consumables, are measured at the lower of cost and net realisablevalue.(b)Costing of inventories
Cost is determined using the first-in, first-out method when issued. The cost of finishedgoods and work in progress comprises raw materials, direct labour and systematicallyallocated production overhead based on the normal production capacity.(c)Basis for determining net realisable values of inventories and method for making provision
for decline in the value of inventoriesInventories are initially measured at cost. The cost of inventories comprises purchase cost,processing cost and other expenditures to bring the inventories to current site and condition.On the balance sheet date, inventories are measured at the lower of cost and net realisablevalue.Net realisable value is determined based on the estimated selling price in the ordinarycourse of business, less the estimated costs to completion and estimated costs necessaryto make the sale and related taxes.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Inventories (Cont'd)
(c) Basis for determining net realisable values of inventories and method for making provision
for decline in the value of inventories (Cont'd)
Provision for decline in the value of inventories is determined at the excess amount of thecost as calculated based on the classification of inventories over their net realisable value,and are recognised in profit or loss for the current period.
(d) Inventory system
The Group adopts the perpetual inventory system.
(e) Amortisation methods of low value consumables and packaging materials
Low value consumables are expensed in full when issued and recognised in cost of relatedassets or in profit or loss for the current period.
(11) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in itssubsidiaries, and the Group’s long-term equity investments in its associates and jointventures.
Subsidiaries are the investees over which the Company is able to exercise control. A jointventure is a joint arrangement which is structured through a separate vehicle over which theGroup has joint control together with other parties and only has rights to the net assets ofthe arrangement based on legal forms, contractual terms and other facts and circumstances.Associates are the investees that the Group has significant influence on their financial andoperating policies.
Investments in subsidiaries are presented in the Company’s financial statements using thecost method, and are adjusted to the equity method when preparing the consolidatedfinancial statements. Investments in joint ventures and associates are accounted for usingthe equity method.
(a) Determination of investment cost
For long-term equity investments acquired through a business combination involvingenterprises under common control, the investment cost shall be the absorbing party’s shareof the carrying amount of equity of the party being absorbed in the consolidated financialstatements of the ultimate controller at the combination date; for long-term equity investmentacquired through a business combination involving enterprises not under common control,the investment cost shall be the combination cost.
For business combinations achieved by stages involving enterprises not under commoncontrol, the initial investment cost accounted for using the cost method is the sum of carryingamount of previously-held equity investment and additional investment cost. For previously-held equity accounted for using the equity method, the accounting treatment of related othercomprehensive income from disposal of the equity is carried out on a same basis with theinvestee's direct disposal of related assets or liabilities. Shareholders' equity, which isrecognised due to changes in investee’s shareholders’ equity other than those arising fromthe net profit or loss, other comprehensive income and profit distribution, is accordinglytransferred into profit or loss for the period in which the investment is disposed.
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11)Long-term equity investments (Cont’d)
(a)Determination of investment cost (Cont’d)
For investment in previously-held equity accounted for using the recognition andmeasurement standards of financial instruments, the initial investment cost accounted forusing the cost method is the sum of carrying amount of previously-held equity investmentand additional investment cost. The difference between the fair value and carrying amountfor investment in previously-held equity and the accumulated changes in fair valuepreviously included in other comprehensive income are transferred to profit or loss for thecurrent period accounted for using the cost method.For long-term equity investments acquired not through a business combination: for long-term equity investments acquired by payment in cash, the initial investment cost shall bethe purchase price actually paid; for long-term equity investments acquired by issuing equitysecurities, the initial investment cost shall be the fair value of the equity securities issued.(b)Subsequent measurement and recognition methods of gains and losses
For long-term equity investments accounted for using the cost method, they are measuredat the initial investment costs, and cash dividends or profit distribution declared by theinvestees are recognised as investment income in profit or loss.For long-term equity investments accounted for using the equity method, where the initialinvestment cost of a long-term equity investment exceeds the Group’s share of the fair valueof the investee’s identifiable net assets at the acquisition date, the long-term equityinvestment is measured at the initial investment cost; where the initial investment cost isless than the Group’s share of the fair value of the investee’s identifiable net assets at theacquisition date, the difference is included in profit or loss and the cost of the long-termequity investment is adjusted upwards accordingly.For long-term equity investments accounted for using the equity method, the Grouprecognises the investment income according to its share of net profit or loss of the investee.The Group discontinues recognising its share of the net losses of an investee after thecarrying amounts of the long-term equity investment together with any long-term intereststhat in substance form part of the investor’s net investment in the investee are reduced tozero. However, if the Group has obligations for additional losses and the criteria with respectto recognition of provisions are satisfied, the Group continues recognising the investmentlosses and the provisions at the amount it expects to undertake. The changes of the Group’sshare of the investee’s owner's equity other than those arising from the net profit or loss,other comprehensive income and profit distribution, are recognised in the Group’s capitalsurplus and the carrying amounts of the long-term equity investment are adjustedaccordingly. The carrying amount of the investment is reduced by the Group’s share of theprofit distribution or cash dividends declared by the investees. The unrealised profits orlosses arising from the transactions between the Group and its investees are eliminated inproportion to the Group’s equity interest in the investees, based on which the investmentgain or losses are recognised. Any losses resulting from transactions between the Groupand its investees attributable to asset impairment losses are not eliminated.(c)Basis for determining existence of control, joint control, significant influence over investees
Control is the power to govern an investee and obtain variable returns from participating theinvestee's activities, and the ability to utilise the power of an investee to affect its returns.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Long-term equity investments (Cont’d)
(c) Basis for determining existence of control, joint control, significant influence over investees
(Cont’d)
Joint control is the contractually agreed sharing of control over an arrangement, and relevanteconomic activity can be arranged upon the unanimous approval of the Group and otherparticipants sharing of control rights.
Significant influence is the power to participate in the financial and operating policy decisionsof the investee, but is not control or joint control over those policies.
(d) Impairment of long-term equity investments
The carrying amounts of long-term equity investments in subsidiaries, joint ventures andassociates are reduced to the recoverable amounts when the recoverable amounts arebelow their carrying amounts (Note 2(18)).
(12) Investment properties
Investment properties, including land use rights that have already been leased out, buildingsthat are held for the purpose of leasing and buildings that are being constructed ordeveloped for future use for leasing, are measured initially at cost. Subsequent expendituresincurred in relation to an investment property are included in the cost of the investmentproperty when it is probable that the associated economic benefits will flow to the Groupand their costs can be reliably measured; otherwise, the expenditures are recognised inprofit or loss for the period in which they are incurred.
The Group adopts the cost model for subsequent measurement of investment properties.Buildings and land use rights are depreciated or amortised to their estimated net residualvalues over their estimated useful lives. The estimated useful lives, the estimated netresidual values that are expressed as a percentage of cost and the annual depreciation(amortisation) rates of investment properties are as follows:
| Estimated useful lives | Estimated net residual values | Annual depreciation (amortisation) rates | |
| Buildings | 20 to 40 years | 5% | 2.38% to 4.75% |
| Land use rights | 30 to 50 years | - | 2% to 3.33% |
When an investment property is transferred to owner-occupied properties, it is reclassifiedas fixed asset or intangible asset at the date of the transfer. When an owner-occupiedproperty is transferred out for earning rentals or for capital appreciation, the fixed asset orintangible asset is reclassified as investment properties at the date of the transfer. At thetime of transfer, the property is recognised based on the carrying amount before transfer.
The investment properties' estimated useful lives, the estimated net residual values and thedepreciation (amortisation) methods applied are reviewed and adjusted as appropriate ateach year-end.
An investment property is derecognised on disposal or when the investment property ispermanently withdrawn from use and no future economic benefits are expected from itsdisposal. The net amount of proceeds from sale, transfer, retirement or damage of aninvestment property after its carrying amount and related taxes and expenses is recognisedin profit or loss for the current period.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(13) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, overseas land, machinery and equipment, motor vehicles,electronic equipment and others.
Fixed assets are recognised when it is probable that the related economic benefits will flowto the Group and the cost can be reliably measured. The initial cost of purchased fixedassets include purchase price, related taxes and expenditures that are attributable to theassets incurred before the assets are ready for their intended use. The initial cost of self-constructed fixed assets is determined based on Note 2(14).
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed assetwhen it is probable that the associated economic benefits will flow to the Group and therelated cost can be reliably measured. The carrying amount of the replaced part isderecognised. All the other subsequent expenditures are recognised in profit or loss for theperiod in which they are incurred.
(b) Depreciation method for fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assetsto their estimated net residual values over their estimated useful lives. For the fixed assetsthat have been provided for impairment loss, the related depreciation charge is prospectivelydetermined based upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage ofcost and the annual depreciation rates of the Group’s fixed assets are as follows:
| Categories | Estimated useful lives | Estimated net residual values | Annual depreciation rates |
| Buildings | 15 to 50 years | 0% to 10% | 6.7% to 1.8% |
| Machinery and equipment | 2 to 25 years | 0% to 10% | 50% to 3.6% |
| Motor vehicles | 2 to 20 years | 0% to 10% | 50% to 4.5% |
| Electronic equipment and others | 2 to 20 years | 0% to 10% | 50% to 4.5% |
| Overseas land | Permanent | Not applicable | Not applicable |
The estimated useful lives and the estimated net residual values of the Group’s fixed assetsand the depreciation methods applied to the assets are reviewed, and adjusted asappropriate at each year-end.
(c) The carrying amount of a fixed asset is reduced to the recoverable amount when the
recoverable amount is below the carrying amount (Note 2(18)).
(d) Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are expectedfrom its use or disposal. The amount of proceeds from disposals on sale, transfer, retirementor damage of a fixed asset net of its carrying amount and related taxes and expenses isrecognised in profit or loss for the current period.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(14) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises constructioncosts, installation costs, borrowing costs that are eligible for capitalisation and other costsnecessary to bring the construction in progress ready for their intended use. Construction inprogress is transferred to fixed assets when the assets are ready for their intended use, anddepreciation begins from the following month. The carrying amount of construction inprogress is reduced to the recoverable amount when the recoverable amount is below itscarrying amount (Note 2(18)).
(15) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of afixed asset that needs a substantially long period of time for its intended use commence tobe capitalised and recorded as part of the cost of the asset when expenditures for the assetand borrowing costs have been incurred, and the activities relating to the acquisition andconstruction that are necessary to prepare the asset for its intended use have commenced.The capitalisation of borrowing costs ceases when the asset under acquisition orconstruction becomes ready for its intended use and the borrowing costs incurred thereafterare recognised in profit or loss for the current period. Capitalisation of borrowing costs issuspended during periods in which the acquisition or construction of an asset is interruptedabnormally and the interruption lasts for more than 3 months, until the acquisition orconstruction is resumed.
For the specific borrowings obtained for the acquisition or construction of a fixed assetqualifying for capitalisation, the amount of borrowing costs eligible for capitalisation isdetermined by actual interest expenses deducting any interest income earned fromdepositing the unused specific borrowings in the banks or any investment income arising onthe temporary investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of a fixed assetqualifying for capitalisation, the amount of general borrowing costs eligible for capitalisationis determined by applying the weighted average effective interest rate of general borrowings,to the weighted average of the excess amount of cumulative expenditures on the asset overthe amount of specific borrowings. The effective interest rate is the rate at which theestimated future cash flows during the period of expected duration of the borrowings orapplicable shorter period are discounted to the initial amount of the borrowings.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets
Intangible assets include land use rights, patents and non-patent technologies, trademarkrights, trademark use rights and others, are measured at cost.
(a) Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of30 to 50 years. If the acquisition costs of the land use rights and the buildings locatedthereon cannot be reasonably allocated between the land use rights and the buildings, allof the acquisition costs are recognised as fixed assets.
(b) Patents and non-patent technologies
Patents are amortised on a straight-line basis over the statutory period of validity, the periodas stipulated by contracts or the beneficial period.
(c) Trademark rights
The trademark rights are measured at cost when acquired and are amortised over theestimated useful life of 4 to 30 years. The cost of trademark rights obtained in the businesscombinations involving enterprises not under common control is measured at fair value. Assome of the trademarks are expected to attract net cash inflows injected into the Group, themanagement considers that these trademarks have an indefinite useful life and arepresented based upon the carrying amount after deducting the provision for impairment(Note 4(20)).
(d) Trademark use rights
The trademark use rights are measured at cost when acquired. The cost of trademark userights obtained in the business combinations involving enterprises not under commoncontrol is measured at fair value, and is amortised over the estimated useful life of 40 years.
(e) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisationmethod is performed at each year-end, with adjustment made as appropriate.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets (Cont’d)
(f) Research and development (“R&D”)
The expenditure on an internal research and development project is classified intoexpenditure on the research phase and expenditure on the development phase based onits nature and whether there is material uncertainty that the research and developmentactivities can form an intangible asset at the end of the project.
Expenditure on the planned investigation, evaluation and selection for the research ofproduction processes or products is categorised as expenditure on the research phase, andit is recognised in profit or loss when it is incurred. Expenditure on design and test for thefinal application of the development of production processes or products before massproduction is categorised as expenditure on the development phase, which is capitalisedonly if all of the following conditions are satisfied:
? The development of production processes or products has been fully justified bytechnical team;? The budget on the development of production processes or products has beenapproved by management;? There is market research analysis that demonstrates the product produced by theproduction process or product has the ability of marketing;? There are sufficient technical and financial resources to support the development of
production processes or products and subsequent mass production; and? Expenditure attributable to the development of production processes or products canbe reliably measured.
Other development expenditures that do not meet the conditions above are recognised inprofit or loss in the period in which they are incurred. Development costs previouslyrecognised as expenses are not recognised as an asset in a subsequent period. Capitalisedexpenditure on the development phase is presented as development costs in the balancesheet and transferred to intangible assets at the date that the asset is ready for its intendeduse.
(g) Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when therecoverable amount is below the carrying amount (Note 2(18)).
(17) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to right-of-useassets, and other expenditures that have been incurred but should be recognised asexpenses over more than one year in the current and subsequent periods. Long-termprepaid expenses are amortised on the straight-line basis over the expected beneficialperiod and are presented at actual expenditure net of accumulated amortisation.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(18) Impairment of long-term assets
Fixed assets, construction in progress, right-of-use assets, intangible assets with finiteuseful lives, investment properties measured using the cost model and long-term equityinvestments in subsidiaries, joint ventures and associates are tested for impairment if thereis any indication that the assets may be impaired at the balance sheet date. Intangibleassets not ready for their intended use, intangible assets with infinite useful lives andoverseas land are tested at least annually for impairment, irrespective of whether there isany indication that it may be impaired. If the result of the impairment test indicates that therecoverable amount of an asset is less than its carrying amount, a provision for impairmentand an asset impairment loss are recognised for the amount by which the asset’s carryingamount exceeds its recoverable amount. The recoverable amount is the higher of an asset’sfair value less costs to sell and the present value of the future cash flows expected to bederived from the asset. Provision for asset impairment is determined and recognised on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individualasset, the recoverable amount of a group of assets to which the asset belongs isdetermined. A group of assets is the smallest group of assets that is able to generateindependent cash inflows.
Goodwill that is separately presented in the financial statements is tested at least annuallyfor impairment, irrespective of whether there is any indication that it may be impaired. Inconducting the test, the carrying value of goodwill is allocated to the related cash generatingunit or cash generating units which are expected to benefit from the synergies of thebusiness combination. If the result of the test indicates that the recoverable amount of acash generating unit or cash generating units, including the allocated goodwill, is lower thanits carrying amount, the corresponding impairment loss is recognised. The impairment lossis first deducted from the carrying amount of goodwill that is allocated to the cash generatingunit or cash generating units, and then deducted from the carrying amounts of other assetswithin the cash generating unit or cash generating units in proportion to the carrying amountsof assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the valuerecovered in the subsequent periods.
(19) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits,termination benefits and other long-term employee benefits provided in various forms ofconsideration in exchange for service rendered by employees or compensations for thetermination of employment relationship.
(a) Short-term employee benefits
Short-term employee benefits include employee wages or salaries, bonus, allowances andsubsidies, staff welfare, premiums or contributions on medical insurance, work injuryinsurance, maternity insurance, housing funds, union running costs and employeeeducation costs, short-term paid absences, etc. The employee benefit liabilities arerecognised in the accounting period in which the service is rendered by the employees, witha corresponding charge to the profit or loss for the current period or the cost of relevantassets. Employee benefits which are non-monetary benefits are measured at fair value.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Employee benefits (Cont'd)
(b) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans ordefined benefit plans. Defined contribution plans are post-employment benefit plans underwhich the Group pays fixed contributions into a separate fund and will have no obligation topay further contributions; and defined benefit plans are post-employment benefit plans otherthan defined contribution plans. During the reporting period, the Group's defined contributionplans mainly include basic pensions and unemployment insurance, while the defined benefitplans are Toshiba Lifestyle Products & Services Corporation (“TLSC”), and KUKAAktiengesellschaft (“KUKA”) and its subsidiaries (“KUKA Group”), etc. provide supplementalretirement benefits beyond the national regulatory insurance system.
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered bylocal authorities of Ministry of Human Resource and Social Security. Monthly payments ofpremiums on the basic pensions are calculated according to prescribed bases andpercentage prescribed by the relevant local authorities. When employees retire, the relevantlocal authorities are obliged to pay the basic pensions to them. The amounts based on theabove calculations are recognised as liabilities in the accounting period in which the servicehas been rendered by the employees, with a corresponding charge to the profit or loss forthe current period or the cost of relevant assets.
Supplementary retirement benefits
The liability recognised in the balance sheet in respect of defined benefit pension plans isthe present value of the defined benefit obligations at the end of the reporting period lessthe fair value of the plan assets. The defined benefit obligation is calculated annually byindependent actuaries using the projected unit credit method at the interest rate of treasurybonds with similar obligation term and currency. The charges related to the supplementalretirement benefits (including current service costs, past-service costs and gains or losseson settlement) and net interest are recognised in the statement of profit or loss or includedin the cost of an asset, and the changes of remeasurement in net liabilities or net assetsarising from the benefit plan are charged or credited to equity in other comprehensiveincome.
(c) Termination benefits
The Group provides compensation for terminating the employment relationship withemployees before the end of the employment contracts or as an offer to encourageemployees to accept voluntary redundancy before the end of the employment contracts.The Group recognises a liability arising from compensation for termination of theemployment relationship with employees, with a corresponding charge to profit or loss forthe current period at the earlier of the following dates: 1) when the Group cannot unilaterallywithdraw an employment termination plan or a curtailment proposal; 2) when the Grouprecognises costs or expenses related to the restructuring that involves the payment oftermination benefits.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Employee benefits (Cont'd)
(c) Termination benefits (Cont’d)
Early retirement benefits
The Group offers early retirement benefits to those employees who accept early retirementarrangements. The early retirement benefits refer to the salaries and social securitycontributions to be paid to and for the employees who accept voluntary retirement beforethe normal retirement date prescribed by the State, as approved by the management. TheGroup pays early retirement benefits to those early retired employees from the earlyretirement date until the normal retirement date. The Group accounts for the early retirementbenefits in accordance with the treatment for termination benefits, in which the salaries andsocial security contributions to be paid to and for the early retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a correspondingcharge to the profit or loss for the current period. The differences arising from the changesin the respective actuarial assumptions of the early retirement benefits and the adjustmentsof benefit standards are recognised in profit or loss in the period in which they occur.
The termination benefits expected to be settled within one year since the balance sheet dateare classified as current liabilities.
(20) General risk reserve
General risk reserve is the reserve appropriated from undistributed profits to cover part ofunidentified potential losses, on the basis of the estimated potential risk value of risk assetsassessed by the standardised approach, which is deducted from recognised provision forimpairment losses on loans. Risk assets include loans and advances, long-term equityinvestments, deposits with banks and other financial institutions and other receivables ofsubsidiaries engaged in financial business.
(21) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved bythe shareholders’ meeting.
(22) Provisions
Provisions for product warranties, onerous contracts, etc. are recognised when the Grouphas a present obligation, it is probable that an outflow of economic benefits will be requiredto settle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle therelated present obligation. Factors surrounding a contingency, such as the risks,uncertainties and the time value of money, are taken into account as a whole in reachingthe best estimate of a provision. Where the effect of the time value of money is material, thebest estimate is determined by discounting the related future cash outflows. The increase inthe discounted amount of the provision arising from passage of time is recognised asinterest expenses.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted toreflect the current best estimate.
The provisions expected to be settled within one year since the balance sheet date areclassified as current liabilities.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Share-based payment
(a) Type of share-based payment
Share-based payment is a transaction in which the entity acquires services from employeesas consideration for equity instruments of the entity or by incurring liabilities for amountsbased on the equity instruments. Equity instruments include equity instruments of theCompany, its parent company or other accounting entities of the Group. Share-basedpayments are divided into equity-settled and cash-settled payments. The Group’s share-based payments are equity-settled payments.
Equity-settled share-based payment
The Group’s equity-settled share-based payment contains share option incentive plan,restricted share plan and employee stock ownership plan. These plans are measured at thefair value of the equity instruments at grant date and the equity instruments are tradable orexercisable when services in vesting period are completed or specified performanceconditions are met. In the vesting period, the services obtained in the current period areincluded in relevant cost and expenses at the fair value of the equity instruments at grantdate based on the best estimate of the number of tradable or exercisable equity instruments,and capital surplus is increased accordingly. If the subsequent information indicates thenumber of tradable or exercisable equity instruments differs from the previous estimate, anadjustment is made and, on the exercise date, the estimate is revised to equal to the numberof actual vested equity instruments.
(b) Determination of fair value of equity instruments
The Group determines the fair value of share options using option pricing model, which isBlack - Scholes option pricing model.
The fair value of other equity instruments is based on the share prices, which exclude theprice that incentive objects pay, and the number of the shares on the grant date, taking intoaccount the effects of clause of the Group’s relevant plans.
(c) Basis for determining best estimate of tradable or exercisable equity instruments
As at each balance sheet date in the vesting period, the Group would make best estimatein accordance with the newly acquired information such as changes in the number ofemployees entitled with exercisable or tradable equity instruments, and amend theestimated number of exercisable or tradable equity instruments. On the exercise ordesterilisation date, the final number of estimated exercisable or tradable equity instrumentsis consistent with the actual number of exercised or tradable equity instruments.
(24) Treasury stock
The Group’s treasury stock mainly comes from the repurchase of equity instruments andthe issuance of restricted shares and so on.
Consideration and transaction costs paid by the Group for repurchasing equity instrumentsare deducted from equity and not recognised as financial assets. The considerations paidby the Group for repurchasing equity instruments are presented as treasury stock, and therelated transaction costs are recognised in owners' equity.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Treasury stock (Cont’d)
On the deregistration day of shares, relevant share capital and treasury stock are reversedwith the difference included in capital surplus (share premium) based on actualderegistration results.
On the grant day of restricted shares, the Group recognises bank deposits when receivingsubscription from the employees and measures the repurchase obligation as liability. On theday of release of restricted shares, relevant treasury stocks, liabilities and capital surplusrecognised in the vesting period are reversed based on the actual vesting results.
(25) Revenue
The Group recognises revenue at the amount of the consideration which the Group isexpected to receive when the customer obtains control over relevant goods or services.Revenue is stated net of discounts, rebates and returns.
When any of the following conditions is met, the Group is subject to performance obligationswithin a period of time; otherwise, at a point in time:
(1) Customers obtain and consume economic benefits coming from the Group'sperformance of contract while the Group performs the contract.
(2) Customers can control goods under construction during the Group's performance ofcontract.
(3) Goods produced during the Group's performance of contract are irreplaceable. Duringthe whole contract period, the Group is entitled to collect payments for those which havebeen accumulated up to now.
For a contract obligation within a period of time, the Group recognises the revenue basedon the progress of the obligation fulfilment within that period of time, except where theprogress of the obligation fulfilment cannot be determined reasonably.
Where the status of completion cannot be reasonably determined, revenue is recognised atthe amount of cost incurred if it is predicted that the cost can be compensated till theprogress of the obligation fulfilment can be reasonably determined.
For a contract obligation at a point in time, the Group recognises the revenue when acustomer is in control of the underlying goods.
(a) Sales of goods
The Group are principally engaged in the manufacturing and sales of heating & ventilation,as well as air-conditioner (hereinafter referred to as “HVAC”) (mainly comprises residentialair conditioner, central air-conditioner, heating and ventilation systems, etc.), consumerappliances (mainly comprises kitchen appliances, refrigerators, washing machines andvarious small appliances, etc.), robotics and automation system and related materials.
Revenue from domestic sales of HVAC and consumer appliances is recognised when theGroup has delivered products to the location specified in the sales contract and the buyerhas confirmed the acceptance of the products, and the delivery order is signed by bothparties. Upon confirming the acceptance, the buyer has the right to sell the products at itsdiscretion and takes the risks of any price fluctuations and obsolescence and loss of theproducts.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont’d)
(a) Sales of goods (Cont'd)
Revenue from overseas sales of HVAC and consumer appliances is recognised when thegoods have been declared to the customs and shipped out of the port in accordance withthe sales contract.
Revenue from sales of robotics and automation system is recognised when the Group hasdelivered products to the location specified in the sales contract and the buyer has confirmedthe acceptance of the products, and the delivery order is signed by both parties.
Revenue from sales of materials is recognised when the buyer has accepted the materialsas contracted and the delivery order is signed by both parties.
The credit period granted to distributors by the Group is determined based on their creditrisk characteristics, which is consistent with industry practice, and there is no significantfinancing component. Generally, the retail customers of the Group are entitled to return theproducts within 7 days after the confirmation of receipt.
The Group provides distributors with sales discount, and the relevant revenue is recognisedat contract consideration net of the discount amount estimated.
The periods and terms of product quality warranty are provided in accordance with the lawsand regulations related to the products. The Group has not provided any additional servicesor product quality warranty, so the product quality warranty does not constitute a separateperformance obligation.
(b) Rendering of services
The Group provides robotics and automation system construction service, intelligentlogistics integration solution, storage services, delivery services, installation services andtransportation service, which are recognised in a certain period of time based on the stageof completion. On the balance sheet date, the Group re-estimates the stage of completionto reflect the actual status of contract performance.
When the Group recognises revenue based on the stage of completion, the amount withunconditional collection right obtained by the Group is recognised as accounts receivable,and the rest is recognised as contract assets. Meanwhile, loss provision for accountsreceivable and contract assets are recognised on the basis of ECL (Note 2(9)). If the contractprice received or receivable exceeds the amount for the completed service, the excessportion will be recognised as contract liabilities. Contract assets and contract liabilities underthe same contract are presented on a net basis.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont'd)
(b) Rendering of services (Cont’d)
Contract costs include contract performance costs and contract acquisition costs. The costsincurred by the Group for the provision of services are recognised as contract performancecosts. The recognised revenue is carried forward to the cost of sales from main operationsbased on the stage of completion. Incremental costs incurred by the Group for theacquisition of contract are recognised as the costs to obtain a contract. For the costs toobtain a contract with the amortisation period within one year, the costs are charged to profitor loss when incurred. For the costs to obtain a contract with the amortisation period beyondone year, the costs are charged in the current profit or loss on the same basis as aforesaidrevenue of rendering of services recognised under the relevant contract. If the carryingamount of the contract costs is higher than the remaining consideration expected to beobtained by rendering of the service net of the estimated cost to be incurred, the Groupmakes provision for impairment on the excess portion and recognises it as asset impairmentlosses. As at the balance sheet date, based on whether the amortisation period of the coststo fulfil a contract is more than one year when initially recognised, the amount of the Group'scosts to fulfil a contract net of related provision for asset impairment is presented asinventories or other non-current assets. For costs to obtain a contract with amortisationperiod beyond one year at the initial recognition, the amount net of related provision forasset impairment is presented as other non-current assets.
(c) Interest income
Interest income from financial instruments is calculated by effective interest method andrecognised in profit or loss for the current period. Interest income comprises premiums ordiscounts, or the amortisation based on effective rates of other difference between the initialcarrying amount and the due amount of interest-earning assets.
The effective interest method is a method of calculating the amortised cost of a financialasset or liability and the interest income or interest costs based on effective rates. Theeffective interest rate is the rate at which the estimated future cash flows during the periodof expected duration of the financial instruments or applicable shorter period are discountedto the current carrying amount of the financial instruments. When calculating the effectiveinterest rate, the Group estimates cash flows by considering all contractual terms of thefinancial instrument (e.g., early repayment options, similar options, etc.), but withoutconsidering future credit losses. The calculation includes all fees and interest paid orreceived that are an integral part of the effective interest rate, transaction costs, and all otherpremiums or discounts.
Interest income from impaired financial assets is calculated at the interest rate that is usedfor discounting estimated future cash flow when measuring the impairment loss.
(d) Dividend income
Dividend income is recognised when the right to receive dividend payment is established.
(e) Rental income
Rental income from investment prosperities is recognised in the income statement on astraight-line basis over the lease period.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Revenue (Cont'd)
(f) Fee and commission income
Fee and commission income is recognised in profit or loss for the current period when theservice is provided. The Group defers the initial charge income or commitment fee incomearising from the forming or acquisition of financial assets as the adjustment to effectiveinterest rate. If the loans are not lent when the loan commitment period is expired, relatedcharges are recognised as fee and commission income.
(26) Government grants
Government grants are transfers of monetary or non-monetary assets from the governmentto the Group at nil consideration, including refund of taxes and financial subsidies, etc.
A government grant is recognised when the conditions attached to it can be complied withand the government grant can be received. For a government grant in the form of transferof monetary assets, the grant is measured at the amount received or receivable. For agovernment grant in the form of transfer of non-monetary assets, it is measured at fair value;if the fair value is not reliably determinable, the grant is measured at nominal amount.
Government grants related to assets are grants that are acquired by the Group and usedfor acquisition, construction or forming long-term assets in other ways. Government grantsrelated to income are government grants other than government grants related to assets.
Government grants related to assets are recorded as deferred income reasonably andsystematically amortised to profit or loss over the useful life of the related asset.
For government grants related to income, where the grant is a compensation for relatedexpenses or losses to be incurred by the Group in the subsequent periods, the grant isrecognised as deferred income, and included in profit or loss over the periods in which therelated costs are recognised; where the grant is a compensation for related expenses orlosses already incurred by the Group, the grant is recognised immediately in profit or lossfor the current period.
The same kind of government grants are presented with the same method.
Those related to ordinary activities are recorded into operating profit while the other in non-operating income and expenses.
Loans to the Group at political preferential rate are recorded at the actual amount received,and the related loan expenses are calculated based on the principal and the politicalpreferential rate. Finance discounts directly received offset related loans expenses.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(27) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on thedifferences arising between the tax bases of assets and liabilities and their carrying amounts(temporary differences). Deferred tax asset is recognised for the deductible losses that canbe carried forward to subsequent years for deduction of the taxable profit in accordance withthe tax laws. No deferred tax liability is recognised for a temporary difference arising fromthe initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognisedfor the temporary differences resulting from the initial recognition of assets or liabilities dueto a transaction other than a business combination, which affects neither accounting profitnor taxable profit (or deductible losses). At the balance sheet date, deferred tax assets anddeferred tax liabilities are measured at the tax rates that are expected to apply to the periodwhen the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductiblelosses and tax credits to the extent that it is probable that taxable profit will be available inthe future against which the deductible temporary differences, deductible losses and taxcredits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments insubsidiaries, associates and joint ventures, except where the Group is able to control thetiming of reversal of the temporary difference, and it is probable that the temporary differencewill not reverse in the foreseeable future. When it is probable that the temporary differencesarising from investments in subsidiaries, associates and joint ventures will be reversed inthe foreseeable future and that the taxable profit will be available in the future against whichthe temporary differences can be utilised, the corresponding deferred tax assets arerecognised.
Deferred tax assets and deferred tax liabilities are offset when:
? the deferred tax assets and deferred tax liabilities are related to the same tax payer
within the Group and the same taxation authority; and,
? that tax payer within the Group has a legally enforceable right to offset current tax assets
against current tax liabilities.
(28) Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of anidentified asset for a period of time in exchange for consideration.
The Group as the lessee:
At the lease commencement date, the Group recognises the right-of-use asset andmeasures the lease liability at the present value of the lease payments that are not paid atthat date. Lease payments include fixed payments, the exercise price of a purchase optionif the lessee is reasonably certain to exercise that option, and payments of penalties forterminating the lease if the lessee exercises an option to terminate the lease. Variable leasepayments in proportion to sales are excluded from lease payments and recognised in profitor loss as incurred. Lease liabilities that are due within one year (inclusive) as from thebalance sheet date are included in the current portion of non-current liabilities.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(28) Leases (Cont'd)
Right-of-use assets of the Group comprise leased buildings, machinery and equipment,motor vehicles, etc. Right-of-use assets are measured initially at cost which comprises theamount of the initial measurement of lease liabilities, any lease payments made at or beforethe commencement date and any initial direct costs, less any lease incentives received. Ifthere is reasonable certainty that the Group will obtain ownership of the underlying asset bythe end of the lease term, the asset is depreciated over its remaining useful life; otherwise,the asset is depreciated over the shorter of the lease term and its remaining useful life. Thecarrying amount of the right-of-use asset is reduced to the recoverable amount when therecoverable amount is below the carrying amount.
| For short-term leases with a term of 12 months or less and leases of an individual asset (when new) of low value, the Group chooses to include the lease payments in the cost of the underlying assets or in the profit or loss for the current period on a straight-line basis over the lease term, instead of recognising right-of-use assets and lease liabilities. |
| The Group accounts for a lease modification as a separate lease if both: (1) the modification increases the scope of the lease by adding the right to use one or more underlying assets; (2) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the contract. |
| For a lease modification that is not accounted for as a separate lease, the Group redetermines the lease term at the effective date of the lease modification, and remeasures the lease liability by discounting the revised lease payments using a revised discount rate, except that the contract changes directly resulting from COVID-19 are accounted for by applying the practical expedient. For a lease modification which decreases the scope of the lease or shortens the lease term, the Group decreases the carrying amount of the right-of-use asset, and recognises in profit or loss any gain or loss relating to the partial or full termination of the lease. For other lease modifications which lead to the remeasurement of lease liabilities, the Group correspondingly adjusts the carrying amount of the right-of-use asset. |
For the rent concessions as a direct result of COVID-19 and for the period ended 30 June2022 only, the Group applies the practical expedient and records the undiscountedconcessions in profit or loss when the agreement is reached to discharge the originalpayment obligation with corresponding adjustment of lease liabilities.
The Group as the lessor:
A lease is classified as a finance lease if it transfers substantially all the risks and rewardsincidental to ownership of an underlying asset. An operating lease is a lease other than afinance lease.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(28) Leases (Cont'd)
(a) Operating leases
| Where the Group leases out self-owned buildings, machinery and equipment, and motor vehicles under operating leases, rental income therefrom is recognised on a straight-line basis over the lease term. Variable rental that is linked to a certain percentage of sales is recognised in rental income as incurred. |
| For the rent concessions as a direct result of COVID-19 and for the period ended 30 June 2022 only, the Group applies the practical expedient to account for the concessions as variable lease payments and record the concessions in profit or loss during the waiving period. |
| Except that the above contract changes directly resulting from COVID-19 are accounted for by applying the practical expedient, for a lease modification, the Group accounts for it as a new lease from the effective date of the modification, and considers any lease payments received in advance and receivable relating to the lease before modification as receivables of the new lease. |
(b) Finance leases
At the commencement date, the Group recognises the lease payments receivable under afinance lease and derecognises relevant assets. The lease payments receivable under afinance lease are presented as long-term receivables; the lease payments receivableunder a finance lease due within one year (inclusive) as from the balance sheet date areincluded in the current portion of non-current assets.
(29) Segment information
The Group identifies operating segments based on the internal organisation structure,management requirements and internal reporting system, and discloses segmentinformation of reportable segments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the followingconditions: (1) the component is able to earn revenue and incur expenses from its ordinaryactivities; (2) whose operating results are regularly reviewed by the Group’s managementto make decisions about resources to be allocated to the segment and to assess itsperformance, and (3) for which the information on financial position, operating results andcash flows is available to the Group. Two or more operating segments that have similareconomic characteristics and satisfy certain conditions can be aggregated into one singleoperating segment.
(30) Critical accounting estimates and judgements
The Group continually evaluates the critical accounting estimates and key judgementsapplied based on historical experience and other factors, including expectations of futureevents that are believed to be reasonable.
The critical accounting estimates and key assumptions that have a significant risk of causinga material adjustment to the carrying amounts of assets and liabilities within the nextaccounting year are outlined below:
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(i) Provision for impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverableamount of the cash generating unit or cash generating units that contain the apportionedgoodwill is determined by the higher value between the use value and the net value that iscalculated by the fair value less the disposal costs. Accounting estimate is required for thecalculation of the recoverable amount. The impairment testing is performed by assessingthe recoverable amount of the cash generating unit or cash generating units containing therelevant goodwill, based on the present value of cash flows forecasts. Key assumptionsadopted in the impairment testing of goodwill included estimated revenue growth rate,EBITDA margin, perpetual annual growth rate, discount rate, etc. which involved criticalaccounting estimates and judgement.
If management revises the estimated revenue growth rate and perpetual annual growth ratethat are used in the calculation of the future cash flows of cash generating unit or cashgenerating units, and the revised rates are lower than the current rates, the Group wouldneed to recognise further impairment against goodwill.
If management revises the EBITDA margin that is used in the calculation of the future cashflows of cash generating unit or cash generating units, and the revised EBITDA margin islower than the current one, the Group would need to recognise further impairment againstgoodwill.
If management revises the pre-tax discount rate applied to the discounted cash flows, andthe revised pre-tax discount rate is higher than the one currently applied, the Group wouldneed to recognise further impairment against goodwill.
If the actual estimated revenue growth rate, perpetual annual growth rate and EBITDAmargin are higher or the actual pre-tax discount rate is lower than management’s estimates,the impairment loss of goodwill previously provided for is not allowed to be reversed by theGroup.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(ii) Income tax and deferred income tax
The Group is subject to enterprise income tax in numerous jurisdictions. There are manytransactions and events for which the ultimate tax determination is uncertain during theordinary course of business. Significant judgement is required from the Group in determiningthe provision for income taxes in each of these jurisdictions. Where the final tax outcome ofthese matters is different from the amounts that were initially recorded, such differences willimpact the income tax and deferred tax provisions in the period in which such determinationis made.
As stated in Note 3(1), some subsidiaries of the Group are high-tech enterprises. The “High-Tech Enterprise Certificate” is effective for three years. Upon expiration, application for high-tech enterprise assessment should be submitted again to the relevant governmentauthorities. Based on the past experience of reassessment for high-tech enterprise uponexpiration and the actual condition of the subsidiaries, the Group considers that thesubsidiaries are able to obtain the qualification for high-tech enterprises in future years, andtherefore a preferential tax rate of 15% is used to calculate the corresponding deferredincome tax. If some subsidiaries cannot obtain the qualification for high-tech enterprise uponexpiration, then the subsidiaries are subject to a statutory tax rate of 25% for the calculationof the income tax, which further influences the recognised deferred tax assets, deferred taxliabilities and income tax expenses.
Deferred tax assets are recognised for the deductible tax losses that can be carried forwardto subsequent years to the extent that it is probable that taxable profit will be available in thefuture against which the deductible tax losses can be utilised. Taxable profit that will beavailable in the future includes the taxable profit that will be realised through normaloperations and the taxable profit that will be increased upon the reversal of taxabletemporary differences incurred in prior periods. Judgements and estimates are required todetermine the time and amounts of taxable profit in the future. Any difference between thereality and the estimate may result in adjustment to the carrying amount of deferred taxassets.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
| (31) | Significant changes in accounting policies |
| The Ministry of Finance released the revised CAS 21 - Lease (hereinafter “new lease standard”) in 2018, and released the Notice on Adjusting the Application Scope of the Provisions on the Accounting Treatment Regarding COVID-19-Related Rent Concessions (Cai Kuai [2021] No. 9), the Circular on Issuing Interpretation No. 14 of Accounting Standards for Business Enterprises (Cai Kuai [2021] No. 1), Q&A on Implementation of Accounting Standards for Business Enterprises in 2021 and the Circular on Issuing Interpretation No. 15 of Accounting Standards for Business Enterprises. The financial statements for the year ended 31 December 2021 have been prepared in accordance with the above standards, circulars and Q&A, and the impacts on the financial statements of the Group and the Company are as follows: |
| (a) | Lease |
| The Group and the Company initially adopted the new lease standard on 1 January 2021. According to new lease standard, the Group and the Company choose not to reassess the contracts that have already existed prior to the date of initial application. The Group and the Company recognised the cumulative effect of the standard as an adjustment to the opening balance of retained earnings in 2021 and relevant line items in the financial statements. The comparatives for the year ended 31 December 2020 were not restated. |
| The nature and the reasons of the changes in accounting policies | The line items affected | The amounts affected | ||
| (i) | 1 January 2021 | |||
| The Group | The Company | |||
| For the operating lease contracts that have already existed prior to the initial application of the new lease standard, the Group and the Company adopt different transition approaches based on the remaining lease term: | Right-of-use assets | 2,129,168 | 10,340 | |
| Lease liabilities | 1,500,166 | 2,647 | ||
| Current portion of non-current liabilities | 629,002 | 7,693 | ||
| If the remaining lease term is more than 12 months, the Group and the Company recognised lease liabilities based on the remaining lease payments and the incremental borrowing rate as at 1 January 2021, and determined the carrying amount of the right-of-use assets based on the incremental borrowing rate as at 1 January 2021. The Group and the Company adopt the practical expedient to evaluate whether assets are impaired or not at the date of initial application. The adoption of the practical expedient has no significant impact on the financial statements since there are no onerous contracts for leases at the date of initial application. The Group and the Company apply the practical expedient for leases with a remaining lease term of 12 months or less, under which the right-of-use assets and lease liabilities are not recognised. There is no significant impact on the financial statements. | ||||
| The Group and the Company apply the practical expedient for operating lease contracts of low-value assets existing prior to the initial application of the new lease standard, under which the right-of-use assets and lease liabilities are not recognised. There is no significant impact on the financial statements. | ||||
| In applying the new lease standard, except for prepaid rentals and lease deposit expenditures relating to the short-term leases and low-value asset leases which are still recorded in cash outflows from operating activities using practical expedient according to the new lease standard, other prepaid rentals and lease deposit expenditures are recorded in cash outflows from financing activities. | ||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 272 -
2 Summary of significant accounting policies and accounting estimates (Cont’d)
| (31) | Significant changes in accounting policies |
| (a) | Lease (Cont’d) |
| The nature and the reasons of the changes in accounting policies | The line items affected | The amounts affected | |
| 1 January 2021 | |||
| The Group | The Company | ||
| In applying the new lease standard, the Group and the Company reclassified fixed assets held under finance leases from “fixed assets” to “right-of-use assets”, and finance lease payables from “long-term payables” to “lease liabilities”. | Right-of-use assets | 26,348 | - |
| Fixed assets | (26,348) | - | |
| Long-term payables | (13,260) | - | |
| Lease liabilities | 13,260 | - | |
| As at 1 January 2021, when measuring lease liabilities, the Group and the Company adopted the same discount rate for lease contracts with similar characteristics, and the weighted average of incremental borrowing rates adopted was 1.01% to 13.21%. | |||
| (ii) | As at 1 January 2021, the Group and the Company reconciled the outstanding minimum operating lease payments calculated under the old lease standard to lease liabilities under the new lease standard as follows: | |||
| The Group | The Company | |||
| Future minimum operating lease payments as at 31 December 2020 | 2,523,731 | 10,653 | ||
| Present value of the above minimum operating lease payments discounted using the incremental borrowing rate | 2,253,525 | 10,340 | ||
| Add: Finance lease payable as at 31 December 2020 | 20,943 | - | ||
| Less: Present value of payments for leases with a term of 12 months or less and of lease payments for an individual asset (when new) of low value | (124,357) | - | ||
| Lease liabilities recognised as at 1 January 2021 (including current portion of non-current liabilities) | 2,150,111 | 10,340 | ||
| (b) | Presentation of transportation costs |
| The nature and the reasons of the changes in accounting policies | The line items affected | The amounts affected | ||
| 2020 | ||||
| The Group | The Company | |||
| The Group and the Company reclassified transportation costs from selling and distribution expenses to cost of sales, which is incurred before the control of goods is transferred to the customer and for the fulfilment of sales contract. | Selling and distribution expenses | (3,958,821) | - | |
| Cost of sales | 3,958,821 | - | ||
| (c) | Accounting treatment of rental concessions against COVID-19 |
For the rent concessions as a direct result of COVID-19, agreed with lessors and for the periodended 30 June 2022 only, the Group and the Company have applied the practical expedientin the above circular for the preparation of the financial statements for the year ended 31December 2021, and there is no significant impact on the Group and the Company.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 273 -
2 Summary of significant accounting policies and accounting estimates (Cont’d)
| (31) | Significant changes in accounting policies (Cont’d) |
(d) The financial statements for the year ended 31 December 2021 have been prepared by the
Group and the Company in accordance with the accounting for changes in determination ofcontract cash flows of financial assets or financial liabilities due to the reform of benchmarkinterest rate in the Interpretation No. 14 of Accounting Standards for Business Enterprises,and related accounting in the Interpretation No. 15 of Accounting Standards for BusinessEnterprises. The interpretations have no significant impact on the financial statements forthe year ended 31 December 2021 of the Group and the Company.
3 Taxation
(1) Main tax category and rate
| Category | Tax base | Tax rate |
| Enterprise income tax | Levied based on taxable income | Note (a) |
| Value-added tax (“VAT”) | Taxable value-added amount (Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible input VAT of the current period) | Note (b) |
| City maintenance and construction tax | The amount of VAT paid | 1% or 5% or 7% |
| Educational surcharge | The amount of VAT paid | 3% or 5% |
| Local educational surcharge | The amount of VAT paid | 2% |
| Property tax | Price-based property is subject to a 1.2% tax rate after a 30% cut in the original price of property; rental-based property is subject to a 12% tax rate for the rental income. | 1.2% or 12% |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 274 -
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(a-1) The following subsidiaries of the Company are subject to an enterprise income tax rate of
15% in 2021 as they qualified as high-tech enterprises and obtained the High-techEnterprise Certificate:
| Name of taxpayer | No. of the High-tech Enterprise Certificate | Dates of issuance | Term of validity |
| Jiangsu Midea Cleaning Appliances Co., Ltd. | GR202032012131 | 2 December 2020 | 3 years |
| GD Midea Environment Appliances Mfg. Co., Ltd. | GR201944000430 | 2 December 2019 | 3 years |
| Guangdong Midea Kitchen Appliances Manufacturing Co., Ltd. | GR202144008574 | 20 December 2021 | 3 years |
| Guangdong Witol Vacuum Electronic Manufacture Co., Ltd. | GR202044001986 | 1 December 2020 | 3 years |
| Foshan Shunde Midea Washing Appliances Manufacturing Co., Ltd. | GR202044003557 | 9 December 2020 | 3 years |
| Foshan Shunde Midea Electrical Heating Appliances Manufacturing Co., Ltd. | GR202144012791 | 31 December 2021 | 3 years |
| Foshan Shunde Midea Electric Science and Technology Co., Ltd. | GR201944000317 | 2 December 2019 | 3 years |
| GD Midea Heating & Ventilating Equipment Co., Ltd. | GR202144001270 | 20 December 2021 | 3 years |
| Hefei Midea Heating & Ventilating Equipment Co., Ltd. | GR201934001163 | 9 September 2019 | 3 years |
| Anhui Meizhi Precision Manufacturing Co., Ltd. | GR202134004969 | 18 September 2021 | 3 years |
| Guangzhou Midea Hualing Refrigerator Co., Ltd. | GR201944009238 | 2 December 2019 | 3 years |
| Guangdong Welling Motor Manufacturing Co., Ltd. | GR202044006087 | 9 December 2020 | 3 years |
| Foshan Welling Washer Motor Manufacturing Co., Ltd. | GR202044005425 | 9 December 2020 | 3 years |
| Huaian Welling Motor Manufacturing Co., Ltd. | GR201932010033 | 6 December 2019 | 3 years |
| Wuxi Filin Electronics Co., Ltd. | GR202132000964 | 3 November 2021 | 3 years |
| GD Midea Air-Conditioning Equipment Co., Ltd. | GR202044003059 | 1 December 2020 | 3 years |
| Handan Midea Air-Conditioning Equipment Co., Ltd. | GR202013000191 | 27 September 2020 | 3 years |
| Midea Group Wuhan Refrigeration Equipment Co., Ltd. | GR202042000684 | 1 December 2020 | 3 years |
| Guangzhou Hualing Refrigerating Equipment Co., Ltd. | GR202044001953 | 1 December 2020 | 3 years |
| Guangdong Swisslog Technology Co., Ltd. | GR202144005648 | 20 December 2021 | 3 years |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 275 -
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(Cont’d)
(a-1) The following subsidiaries of the Company are subject to an enterprise income tax rate of
15% in 2021 as they qualified as high-tech enterprises and obtained the High-techEnterprise Certificate (Cont’d):
| Name of taxpayer | No. of the High-tech Enterprise Certificate | Dates of issuance | Term of validity |
| Wuhu Maty Air-Conditioning Equipment Co., Ltd. | GR202034001383 | 17 August 2020 | 3 years |
| Chongqing Midea General Refrigeration Equipment Co., Ltd. | GR202051100347 | 9 October 2020 | 3 years |
| Guangdong Meizhi Compressor Limited | GR202044004270 | 9 December 2020 | 3 years |
| Hubei Midea Refrigerator Co., Ltd. | GR202042000745 | 1 December 2020 | 3 years |
| Guangdong Midea Consumer Electric Manufacturing Co., Ltd. | GR202044007232 | 9 December 2020 | 3 years |
| Anhui Meizhi Compressor Co., Ltd. | GR201934000046 | 9 September 2019 | 3 years |
| Foshan Shunde Midea Water Dispenser Manufacturing Co., Ltd. | GR202044004098 | 9 December 2020 | 3 years |
| Midea Welling Motor Technology (Shanghai) Co., Ltd. | GR202031001304 | 12 November 2020 | 3 years |
| Welling (Wuhu) Motor Manufacturing Co., Ltd. | GR202134003666 | 18 November 2021 | 3 years |
| Hefei Midea Laundry Appliance Co., Ltd. | GR202134003561 | 18 September 2021 | 3 years |
| Hefei Hualing Co., Ltd. | GR202134000541 | 18 September 2021 | 3 years |
| Foshan Midea Chungho Water Purification Equipment Co., Ltd. | GR202144010400 | 31 December 2021 | 3 years |
| Toshiba HA Manufacturing (Nanhai) Co., Ltd. | GR202144002672 | 20 December 2021 | 3 years |
| Guangdong Meizhi Precision-Manufacturing Co., Ltd. | GR202144003890 | 20 December 2021 | 3 years |
| Wuhu Midea Kitchen & Bath Appliances Mfg. Co., Ltd. | GR202134003382 | 18 September 2021 | 3 years |
| Guangdong Midea Intelligent Technologies Co., Ltd. | GR202144008039 | 20 December 2021 | 3 years |
| WINONE ELEVATOR COMPANY LIMITED | GR202144006432 | 20 December 2021 | 3 years |
| Beijing Hiconics Eco-energy Frequency Conversion Technology Co., Ltd. | GR202011003365 | 21 October 2020 | 3 years |
| Wuhan Hiconics Electric Drive Technology Co., Ltd. | GR202042001428 | 1 December 2020 | 3 years |
| Changsha Sunye Electric Co., Ltd. | GR202143000846 | 18 September 2021 | 3 years |
| Beijing Huatairunda Energy Saving Co., Ltd. | GR202111004112 | 17 December 2021 | 3 years |
| Dorna Technology Co., Ltd. | GR202033006717 | 1 December 2020 | 3 years |
| Wuxi Little Swan Company Limited | GR202032006759 | 2 December 2020 | 3 years |
| KUKA Robotics Manufacturing China Co., Ltd. | GR201931001602 | 28 October 2019 | 3 years |
| KUKA Robotics Guangdong Co., Ltd. | GR202044003841 | 9 December 2020 | 3 years |
| Midea Intelligent Lighting & Controls Technology Co., Ltd. | GR202036000935 | 14 September 2020 | 3 years |
| Beijing Wandong Software Technology Co., Ltd. | GR202011009515 | 2 December 2020 | 3 years |
| Wanliyun Medical Information Technology (Beijing) Co., Ltd. | GR201911005106 | 2 December 2019 | 3 years |
| Guangdong Midea Environmental Technologies Co., Ltd. | GR202144004692 | 20 December 2021 | 3 years |
| MR Semiconductor Ltd. | GR202131000701 | 9 October 2021 | 3 years |
| Anhui Welling Auto Parts Corporation Limited | GR202134002578 | 18 September 2021 | 3 years |
| Guangdong Meicloud Technology Co., Ltd. | GR202144008715 | 20 December 2021 | 3 years |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 276 -
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(Cont’d)
(a-2) According to the Notice of the Ministry of Finance, the State Taxation Administration on
Preferential Enterprise Income Tax Policies for Hainan Free-trade Port, Cai Shui (2020)(No.31), the Company’s subsidiary in Hainan is subject to enterprise income tax at a rate of15% from 1 January 2020 to 31 December 2024.
(a-3) Pursuant to the Notice on Extending the Preferential Enterprise Income Tax Policies for
Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Shenzhen,enterprises that meet the notice requirements are subject to a reduced enterprise incometax rate of 15%. Therefore, Midea Commercial Factoring Co., Ltd., subsidiary of theCompany, is subject to enterprise income tax at a rate of 15% from 1 January 2021 to 31December 2025.
(a-4) According to the Announcement on Continuing the Enterprise Income Tax Policies for the
Development of Western China jointly issued by the Ministry of Finance, the State TaxationAdministration and the National Development and Reform Commission on 23 April 2020,Chongqing Midea Air-Conditioning Equipment Co., Ltd., Chongqing Midea CommercialFactoring Co., Ltd., Chongqing Annto Logistics Technology Co., Ltd. and Guiyang AnntoLogistics Technology Co., Ltd., subsidiaries of the Company were subject to enterpriseincome tax at a rate of 15% in 2021.
(a-5) On 24 March 2016, Luanping Huitong Photovoltaic Power Co., Ltd., a subsidiary of the
Company, obtained the Record Form for Enterprise Income Tax Preference issued by theLuanping County Office of the State Taxation Administration. According to theAnnouncement of the State Taxation Administration on the Income Tax Preference Policiesfor New Power Grid Projects of Power Grid Enterprises (State Taxation AdministrationAnnouncement in 2013, No.26), Phase I Project of the company was subject to thepreferential policy of enterprise income tax exemption from 2016 to 2018, and was subjectto the preferential policy of enterprise income tax reduction of 50% from 2019 to 2021. On28 November 2017, the company also obtained the Record Form for Enterprise Income TaxPreference issued by the Luanping County Office of the State Taxation Administration.According to Item 2 of Article 27 in the Enterprise Income Tax Law of the People’s Republicof China, Order of the President of the People’s Republic of China (No. 63), Phase II Projectof the company was subject to the preferential policy of enterprise income tax exemptionfrom 2017 to 2019, and is subject to the preferential policy of enterprise income tax reductionof 50% from 2020 to 2022.
(a-6) The Company's subsidiaries in Mainland China other than those mentioned in (a-1) and (a-
5) are subject to enterprise income tax at the rate of 25%.
(a-7) In August 2008, Midea Electric Trading (Singapore) Co., Pte Ltd., the Company's subsidiary,
was awarded with the Certificate of Honour for Development and Expansion (No. 587) bythe Singapore Economic Development Board and subject to the applicable preferentialincome tax rate of 5.5% for 2021. Midea Singapore Trading Co., Pte Ltd. and Little SwanInternational (Singapore) Co., Pte Ltd., the Company's subsidiaries, are subject toenterprise income tax at the rate of 17%.
(a-8) The Company's subsidiaries in Hong Kong are subject to Hong Kong profits tax at the rate
of 16.5%. Such subsidiaries include Midea International Trading Company Limited, MideaInternational Corporation Company Limited, Midea Home Appliances Investments (HongKong) Co., Limited, Century Carrier Residential Air-conditioning Equipment Co., Limited,Midea Refrigeration (Hong Kong) Limited, Welling Holding Limited, Welling InternationalHong Kong Ltd., and Midea Investment (Asia) Company Limited.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 277 -
3 Taxation (Cont’d)
(1) Main tax category and rate (Cont’d)
(a) Notes to the enterprise income tax rate of the principal tax payers with different tax rates
(Cont’d)
(a-9) The Company's subsidiaries in BVI and Cayman Islands are exempted from enterprise
income tax. Such subsidiaries include Mecca International (BVI) Limited, Titoni InvestmentsDevelopment Ltd., Midea Investment Holding (BVI) Limited, Midea Electric Investment (BVI)Limited, Welling Holding (BVI) Ltd., Midea Holding (Cayman Islands) Limited and MideaInvestment Development Company Limited.
(a-10) Springer Carrier Ltda., the Company's subsidiary in Brazil, is subject to Brazil enterprise
income tax at the rate of 34%.
(a-11) TLSC, the Company's subsidiary in Japan, and its subsidiaries (“TLSC Group”), are subject
to Japan enterprise income tax at the rate of 34.01%.
(a-12) Clivet S.P.A (“Clivet”), the Company's subsidiaries in Italy, are subject to Italy enterprise
income tax at the rate between 20% and 31.4%.
(a-13) KUKA Group, the Company's subsidiary in Germany, is subject to Germany enterprise
income tax at the rate of 32%.
(a-14) Servotronix Motion Control Ltd. (“SMC”), the Company's subsidiary in Israel, is subject to
Israel enterprise income tax at the rate of 23%.
(a-15) Misr Refrigeration and Air Conditioning Manufacturing Company, S.A.E., the Company's
subsidiary in Egypt, is subject to Egyptian enterprise income tax at the rate of 22.5%.
(b) Notes to the VAT rate of the principal tax payers with different tax rates
(b-1) Pursuant to the Announcement on Relevant Policies for Deepening Value-Added Tax
Reform (Announcement [2019] No. 39) jointly issued by the Ministry of Finance, the StateTaxation Administration and the General Administration of Customs and relevantregulations, the applicable tax rate of revenue arising from sales of goods and rendering ofrepairing and replacement services of the Company’s certain subsidiaries is 13% from 1April 2019, and that of revenue arising from real estate leasing and transportation servicesof the Company’s certain subsidiaries is 9%.
(b-2) Financial services, consulting services and storage services provided by the Company and
certain subsidiaries are subject to VAT at the rate of 6%.
(b-3) Rental revenue of the Company’s certain subsidiaries is subject to easy levy of VAT at the
rate of 5%.
(b-4) Pursuant to the Announcement on Relevant Policies for Deepening the Value-Added Tax
Reform (Announcement [2019] No. 39) issued by the Ministry of Finance, the State TaxationAdministration and the General Administration of Customs, certain subsidiaries of theCompany engaged in the production service sector, are eligible for a 10% additional VATdeduction based on deductible input VAT in the current period from 1 April 2019 to 31December 2021.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 278 -
4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
| 31 December 2021 | 31 December 2020 | |||
| Cash on hand | 1,609 | 2,538 | ||
| Cash at bank (a) | 46,691,119 | 51,253,132 | ||
| Other cash balances (b) | 443,893 | 688,481 | ||
| Statutory reserve with the Central Bank (c) | 419,718 | 1,707,645 | ||
| Surplus reserve with the Central Bank (d) | 272,949 | 344,860 | ||
| Deposits with banks and other financial institutions (e) | 23,351,878 | 26,515,276 | ||
| Interest receivable | 694,390 | 698,550 | ||
| 71,875,556 | 81,210,482 | |||
| Including: Total amounts deposited with banks overseas (including Singapore, Germany, Hong Kong China, Japan, Thailand, India etc.) | 6,763,152 | 7,014,620 |
(a) As at 31 December 2021, cash at bank included fixed deposits with the term of over 3
months, amounting to RMB 28,767,516,000 (31 December 2020: RMB 37,067,298,000).
(b) Other cash balances mainly include letters of guarantee, bank acceptance notes and letters
of credit.
(c) Statutory reserve with the Central Bank represents the statutory reserve deposited in
People’s Bank of China by the financial enterprise in accordance with relevant regulations,which are calculated at 5% (2020: 6%) and 5% (2020: 5%) for eligible RMB deposits andforeign currency deposits, respectively. They are restricted cash and are not available foruse in the Group’s daily operations.
(d) Surplus reserve with the Central Bank represents the excess over the required statutory
reserve paid by financial institutions in the Central Bank, and it is bank deposit that can bereadily drawn on demand.
(e) As at 31 December 2021, deposits with banks and other financial institutions included fixed
deposits with the term of over 3 months, amounting to RMB 1,000,000,000 (31 December2020: RMB 17,500,000,000).
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 279 -
4 Notes to the consolidated financial statements (Cont’d)
(2) Financial assets held for trading
| 31 December 2021 | 31 December 2020 | ||
| Structural deposits (a) | 4,285,607 | 25,626,631 | |
| Investments in equity instrument held for trading (b) | 1,319,470 | 2,314,965 | |
| Others | 274,125 | 298,005 | |
| 5,879,202 | 28,239,601 |
(a) As at 31 December 2021, structural deposits were deposits with financial institutions due
within 1 year, which were measured at fair value through profit or loss.
(b) As at 31 December 2021, investments in equity instrument held for trading referred to equity
investments in listed companies, which were measured at fair value through profit or loss.
(3) Notes receivable
| 31 December 2021 | 31 December 2020 | |||
| Bank acceptance notes | 4,689,898 | 5,086,749 | ||
| Trade acceptance notes | 126,640 | 218,108 | ||
| Less: Provision for bad debts (a) | (31,624) | (347) | ||
| 4,784,914 | 5,304,510 |
(a) Provision for bad debts
For notes receivable of the Group arising from sales of goods or rendering of services in theordinary course of business, the Group measures bad debts based on the lifetime ECLregardless of whether there exists a significant financing component. As at 31 December2021, the Group considered that there was no significant credit risk associated with its bankacceptance notes and did not expect that there would be any significant losses from non-performance by these banks.
| (b) | As at 31 December 2021, notes receivable endorsed or discounted but unmatured were as follows: | |||
| Derecognised | Not derecognised | |||
| Trade acceptance notes | — | 6,171 | ||
| Bank acceptance notes (i) | 16,000 | 2,996,275 | ||
| 16,000 | 3,002,446 | |||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 280 -
4 Notes to the consolidated financial statements (Cont’d)
| (3) | Notes receivable (Cont’d) |
| (b) | As at 31 December 2021, notes receivable endorsed or discounted but unmatured are as follows (Cont’d): |
| (i) | For the year ended 31 December 2021, insignificant portion of the bank acceptance notes were endorsed or discounted and derecognised by some subsidiaries of the Group, which thereby categorised the balance of other bank acceptance notes as financial assets at amortised cost. Certain bank acceptance notes were discounted and endorsed and derecognised by other subsidiaries for the purpose of daily treasury management, which thereby categorised the balance of these bank acceptance notes as financial assets at fair value through other comprehensive income and presented them as receivables financing (Note 4(6)). |
(4) Accounts receivable
| 31 December 2021 | 31 December 2020 | |||
| Accounts receivable | 25,495,619 | 23,854,936 | ||
| Less: Provision for bad debts | (859,179) | (876,573) | ||
| 24,636,440 | 22,978,363 |
(a) The ageing of accounts receivable is analysed as follows:
| 31 December 2021 | 31 December 2020 | |||
| Within 1 year | 24,566,401 | 23,015,280 | ||
| 1 to 2 years | 617,355 | 580,644 | ||
| 2 to 3 years | 144,300 | 159,427 | ||
| 3 to 5 years | 134,460 | 87,938 | ||
| Over 5 years | 33,103 | 11,647 | ||
| 25,495,619 | 23,854,936 |
As at 31 December 2021, the Group had no significant overdue accounts receivable.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 281 -
4 Notes to the consolidated financial statements (Cont’d)
(4) Accounts receivable (Cont’d)
(b) Provision for bad debts
For accounts receivable, the Group recognises the lifetime ECL regardless of whether thereexists a significant financing component.
As at 31 December 2021, accounts receivable for which the related provision for bad debtswas provided on the individual basis were analysed as follows:
| Book balance | Lifetime ECL rate | Provision for bad debts | Reason | |||
| Domestic customers | 111,443 | 47.74% | (53,208) | The debtor encountered financial distress, etc. | ||
| Overseas customers | 561 | 100.00% | (561) | |||
| 112,004 | (53,769) |
As at 31 December 2020, accounts receivable for which the related provision for bad debtswas provided on the individual basis were analysed as follows:
| Book balance | Lifetime ECL rate | Provision for bad debts | Reason | |||
| Domestic customers | 14,288 | 100.00% | (14,288) | The debtor encountered financial distress, etc. | ||
| Overseas customers | 1,000 | 100.00% | (1,000) | |||
| 15,288 | (15,288) |
As at 31 December 2021, accounts receivable for which the related provision for bad debtswas provided on the grouping basis were analysed as follows:
| 31 December 2021 | ||||||
| Book balance | Provision for bad debts | |||||
| Amount | Lifetime ECL rate | Amount | ||||
| Domestic business grouping | 12,689,502 | 3.08% | (390,701) | |||
| Overseas business grouping | 12,694,113 | 3.27% | (414,709) | |||
| 25,383,615 | (805,410) | |||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 282 -
4 Notes to the consolidated financial statements (Cont’d)
(4) Accounts receivable (Cont’d)
(b) Provision for bad debts (Cont’d)
As at 31 December 2020, accounts receivable for which the related provision for bad debtswas provided on the grouping basis were analysed as follows:
| 31 December 2020 | ||||||
| Book balance | Provision for bad debts | |||||
| Amount | Lifetime ECL rate | Amount | ||||
| Domestic business grouping | 11,521,032 | 3.71% | (427,912) | |||
| Overseas business grouping | 12,318,616 | 3.52% | (433,373) | |||
| 23,839,648 | (861,285) | |||||
(c) The provision for bad debts in the current year amounted to RMB 173,575,000 (2020: RMB
168,438,000). The provision for bad debts reversed in the current year amounted to RMB88,386,000 (2020: RMB 81,179,000). The provision for bad debts written off in the currentyear amounted to RMB 92,215,000 (2020: RMB 114,893,000).
(d) As at 31 December 2021, the five largest accounts receivable aggregated by debtor were
summarised and analysed as follows:
| Amount | Provision for bad debts | % of total balance | ||||
| Total amount of the five largest accounts receivable | 1,761,735 | (55,395) | 6.91% |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 283 -
4 Notes to the consolidated financial statements (Cont’d)
(5) Other receivables
| 31 December 2021 | 31 December 2020 | |||
| Other receivables | 3,147,595 | 3,026,970 | ||
| Less: Provision for bad debts | (43,530) | (53,025) | ||
| 3,104,065 | 2,973,945 |
(a) Other receivables mainly include security deposit and guarantee, commercial bills, current
accounts, petty cash to staff and receivables related to share options.
The ageing of other receivables is analysed as follows:
| 31 December 2021 | 31 December 2020 | |||
| Within 1 year | 2,856,634 | 2,708,730 | ||
| 1 to 2 years | 149,331 | 222,785 | ||
| 2 to 3 years | 97,424 | 50,457 | ||
| 3 to 5 years | 28,029 | 30,867 | ||
| Over 5 years | 16,177 | 14,131 | ||
| 3,147,595 | 3,026,970 |
(b) Provision for losses and changes in book balance statements
| Stage 1 | Stage 3 | ||||||
| 12-month ECL (Grouping) | 12-month ECL (Individual) | Lifetime ECL (Credit impaired) | Sub-total | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision for bad debts | |
| 31 December 2020 | 2,983,653 | 47,449 | 37,741 | - | 5,576 | 5,576 | 53,025 |
| Transfer to Stage 3 | (123,732) | (12,373) | - | - | 123,732 | 12,373 | - |
| Net increase/(decrease) in the current year | 132,127 | 4,014 | 112,539 | - | (124,041) | (12,592) | (8,578) |
| Including: Write-off in the current year | - | - | - | - | (124,041) | (124,041) | (124,041) |
| Derecognition | - | - | - | - | - | - | - |
| Differences on translation of foreign currency financial statements | - | (827) | - | - | - | (90) | (917) |
| 31 December 2021 | 2,992,048 | 38,263 | 150,280 | - | 5,267 | 5,267 | 43,530 |
As at 31 December 2021 and 31 December 2020, the Group had no other receivables atStage 2.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 284 -
4 Notes to the consolidated financial statements (Cont’d)
(5) Other receivables (Cont’d)
(b) Provision for losses and changes in book balance statements (Cont’d)
(i) As at 31 December 2021, other receivables for which the related provision for bad debts
was provided on the individual basis were analysed as follows:
| Book balance | ECL rate in the following 12 months | Provision for bad debts | Reason | ||||
| Stage 1 | 150,280 | 0% | - | Relatively low bad debt risks |
| Book balance | Lifetime ECL | Provision for bad debts | Reason | ||||
| Stage 3 | 5,267 | 100.00% | (5,267) | The debtor encountered financial distress, etc. |
As at 31 December 2020, other receivables for which the related provision for bad debtswas provided on the individual basis were analysed as follows:
| Book balance | ECL rate in the following 12 months | Provision for bad debts | Reason | ||||
| Stage 1 | 37,741 | 0% | - | Relatively low bad debt risks |
| Book balance | Lifetime ECL | Provision for bad debts | Reason | ||||
| Stage 3 | 5,576 | 100.00% | (5,576) | The debtor encountered financial distress, etc. |
(ii) As at 31 December 2021 and 31 December 2020, other receivables for which the related
provision for bad debts was provided on the grouping basis were all at Stage 1, which wereanalysed as follows:
| 31 December 2021 | 31 December 2020 | ||||||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||||||
| Amount | Amount | Provision ratio | Amount | Amount | Provision ratio | ||||
| Security deposit/guarantee and other receivables grouping | 2,992,048 | (38,263) | 1.28% | 2,983,653 | (47,449) | 1.59% | |||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 285 -
4 Notes to the consolidated financial statements (Cont’d)
(5) Other receivables (Cont’d)
(c) The provision for bad debts in the current year amounted to RMB 158,923,000 (2020: RMB
19,151,000). The provision for bad debts reversed in the current year amounted to RMB43,460,000 (2020: RMB 14,873,000). The provision for bad debts written off in the currentyear amounted to RMB 124,041,000 (2020: RMB 3,772,000).
(d) As at 31 December 2021, the five largest other receivables aggregated by debtor were
summarised and analysed as follows:
| Amount | Provision for bad debts | % of total balance | ||||
| Total amount of the five largest other receivables | 303,809 | (1,971) | 9.65% |
(e) As at 31 December 2021, the Group had no significant government grants recognised at
amounts receivable.
(6) Receivables financing
| 31 December 2021 | 31 December 2020 | |||
| Receivables financing | 10,273,552 | 13,901,856 | ||
| The Group’s receivables financing are mainly accounts receivable and bank acceptance notes transferred, discounted and endorsed for the purpose of daily treasury management and were qualified for derecognition. | ||||
As at 31 December 2021 and 31 December 2020, the Group measured provision for baddebts based on the lifetime ECL. As the credit risk characteristics of these bank acceptancenotes were similar, no provision for impairment was made individually. The Group expectedthat there was no significant credit risk associated with its bank acceptance notes and didnot expect that there would be any significant losses from non-performance by these banks.
As at 31 December 2021, the Group’s notes receivable presented in receivables financing,endorsed or discounted but unmatured were as follows:
| Derecognised | Not derecognised | ||||
| Bank acceptance notes | 10,944,665 | - | |||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 286 -
| 4 Notes to the consolidated financial statements (Cont’d) | ||
(7) Advances to suppliers
| 31 December 2021 | 31 December 2020 | |||
| Prepayments for raw materials and others | 4,352,807 | 2,763,710 |
(a) The ageing of advances to suppliers is analysed below:
| 31 December 2021 | 31 December 2020 | |||||||
| Amount | % of total balance | Amount | % of total balance | |||||
| Within 1 year | 4,241,867 | 97.45% | 2,562,904 | 92.73% | ||||
| 1 to 2 years | 74,391 | 1.71% | 163,765 | 5.93% | ||||
| 2 to 3 years | 18,798 | 0.43% | 17,579 | 0.64% | ||||
| Over 3 years | 17,751 | 0.41% | 19,462 | 0.70% | ||||
| 4,352,807 | 100.00% | 2,763,710 | 100.00% | |||||
As at 31 December 2021, advances to suppliers with ageing over 1 year with a carryingamount of RMB 110,940,000 (31 December 2020: RMB 200,806,000) were mainly unsettledprepayments for raw materials.
As at 31 December 2021, the five largest advances to suppliers aggregated by debtors wereanalysed as follows:
| Amount | % of total balance | |||
| Total amount of the five largest advances to suppliers | 1,103,739 | 25.36% |
(8) Contract assets
| 31 December 2021 | 31 December 2020 | ||
| Contract assets | 3,870,243 | 3,289,783 | |
| Less: Provision for impairment of contract assets | (46,767) | (52,935) | |
| Total | 3,823,476 | 3,236,848 |
For contract assets, the Group measures the loss provision based on the lifetime ECLregardless of whether there exists a significant financing component.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 287 -
4 Notes to the consolidated financial statements (Cont’d)
(8) Contract assets (Cont’d)
As at 31 December 2021, contract assets for which the related provision for bad debts wasprovided on the individual basis were analysed as follows:
| Book balance | Lifetime ECL rate | Provision for impairment | Reason | |||
| Domestic business | 11,444 | 26.70% | (3,056) | The debtor encountered financial distress, etc. |
As at 31 December 2021, contract assets for which the related provision for bad debts wasprovided on the grouping basis were analysed as follows:
| 31 December 2021 | ||||||
| Book balance | Provision for bad debts | |||||
| Amount | Lifetime ECL rate | Amount | ||||
| Domestic business grouping | 840,430 | 4.22% | (35,436) | |||
| Overseas business grouping | 3,018,369 | 0.27% | (8,275) | |||
| 3,858,799 | (43,711) | |||||
As at 31 December 2020, contract assets for which the related provision for bad debts wasprovided on the grouping basis were analysed as follows:
| 31 December 2020 | ||||||
| Book balance | Provision for bad debts | |||||
| Amount | Lifetime ECL rate | Amount | ||||
| Domestic business grouping | 749,521 | 5.23% | (39,218) | |||
| Overseas business grouping | 2,540,262 | 0.54% | (13,717) | |||
| 3,289,783 | (52,935) | |||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 288 -
4 Notes to the consolidated financial statements (Cont’d)
(9) Loans and advances
(a) By individual and corporation:
| 31 December 2021 | 31 December 2020 | |||
| Loans and advances measured at amortised cost | ||||
| Loans and advances to individuals | 2,217,220 | 2,235,275 | ||
| Loans and advances to corporations | 19,744,034 | 15,660,149 | ||
| Including: Loans | 12,790,285 | 10,133,447 | ||
| Discount bills | 6,953,749 | 5,526,702 | ||
| 21,961,254 | 17,895,424 | |||
| Less: Provision for loan losses | (452,727) | (312,854) | ||
| 21,508,527 | 17,582,570 |
As at 31 December 2021, loans and advances over 1 year amounted to RMB 851,927,000(31 December 2020: RMB 1,113,501,000).
(b) By type of collateral held:
| 31 December 2021 | 31 December 2020 | |||
| Unsecured loans | 2,211,108 | 1,645,282 | ||
| Guaranteed loans | 587,936 | 885,659 | ||
| Pledged loans | 19,162,210 | 15,364,483 | ||
| Total loans and advances | 21,961,254 | 17,895,424 |
(c) The provision for bad debts in the current year amounted to RMB 144,691,000 (2020: RMB
169,043,000), the provision for bad debts written off in the current year amounted to RMB3,070,000 (2020: RMB 1,786,000) and the provision for bad debts reversed in the currentyear amounted to RMB 1,748,000 (2020: RMB 13,322,000) (Note 4(25)).
(d) As at 31 December 2021, the Group’s loans and advances for which the provision for bad
debts was provided on the individual basis amounted to RMB 6,332,961,000, and theprovision for bad debts amounted to RMB 198,193,000.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 289 -
4 Notes to the consolidated financial statements (Cont’d)
(10) Inventories
(a) Inventories are summarised by category as follows:
| 31 December 2021 | 31 December 2020 | |||||||||||
| Book balance | Provision for decline in the value of inventories | Carrying amount | Book balance | Provision for decline in the value of inventories | Carrying amount | |||||||
| Finished goods | 33,636,462 | (419,166) | 33,217,296 | 21,718,749 | (372,474) | 21,346,275 | ||||||
| Raw materials | 9,592,914 | (121,217) | 9,471,697 | 7,402,034 | (70,221) | 7,331,813 | ||||||
| Work in progress | 2,406,866 | - | 2,406,866 | 1,875,881 | - | 1,875,881 | ||||||
| Consigned processing materials, etc. | 828,580 | - | 828,580 | 522,560 | - | 522,560 | ||||||
| 46,464,822 | (540,383) | 45,924,439 | 31,519,224 | (442,695) | 31,076,529 | |||||||
(b) Analysis of provision for decline in the value of inventories is as follows:
| 31 December 2020 | Increase in the current year | Decrease in the current year | Differences on translation of foreign currency financial statements | 31 December 2021 | ||||||
| Provision | Reversal or write-off | |||||||||
| Finished goods | 372,474 | 363,940 | (298,182) | (19,066) | 419,166 | |||||
| Raw materials | 70,221 | 103,885 | (47,533) | (5,356) | 121,217 | |||||
| 442,695 | 467,825 | (345,715) | (24,422) | 540,383 |
(c) Provision for decline in the value of inventories is as follows:
| Specific basis for determining net realisable value | Reason for reversal or write-off of provision for decline in the value of inventories | |||
| Finished goods | Stated at the lower of cost and net realisable value | Sales | ||
| Raw materials | Stated at the lower of cost and net realisable value | Requisition for production |
(11) Current portion of non-current assets
| 31 December 2021 | 31 December 2020 | ||
| Other debt investments due within 1 year (Note 4(13)) | 19,360,372 | - | |
| Long-term receivables due within 1 year (Note 4(14)) | 491,205 | - | |
| 19,851,577 | - |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 290 -
4 Notes to the consolidated financial statements (Cont’d)
(12) Other current assets
| 31 December 2021 | 31 December 2020 | |||
| Fixed-income products (a) | 23,696,825 | 25,542,595 | ||
| Input VAT to be deducted | 6,137,776 | 4,336,260 | ||
| Prepaid expenses | 828,675 | 786,140 | ||
| Others (b) | 2,492,736 | 2,414,923 | ||
| 33,156,012 | 33,079,918 |
(a) As at 31 December 2021, fixed-income products were monetary investment products
deposited in financial institutions with maturities of no more than one year at the time ofacquisition, which were subsequently measured at amortised cost.
(b) As at 31 December 2021, the Group's transferable certificate of deposit due within 1 year
since the time of acquisition amounted to approximately RMB 230,015,000 (31 December2020: Nil), and were measured at fair value through other comprehensive income.
(13) Other debt investments
| 31 December 2021 | 31 December 2020 | |||
| Fair value through other comprehensive income | ||||
| - Transferable certificate of deposit | 27,254,307 | 21,456,155 | ||
| Less: Other debt investments due within 1 year (Note 4(11)) | (19,360,372) | - | ||
| 7,893,935 | 21,456,155 | |||
| As at 31 December 2021, the cost of the Group’s transferable certificate of deposit approximated its fair value. | ||||
| As at 31 December 2021, the Group expected that there was no significant increase in credit risk of transferable certificate of deposit since initial recognition and made provision for loss based on 12-month ECL. The Group considered that there was no significant credit risk associated with transferable certificate of deposit and did not expect that there would be any significant losses from non-performance by these banks. | ||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 291 -
4 Notes to the consolidated financial statements (Cont’d)
(14) Long-term receivables
| 31 December 2021 | 31 December 2020 | |||
| Long-term receivables | 1,371,022 | 981,623 | ||
| Less: Provision for bad debts | (8,461) | - | ||
| 1,362,561 | 981,623 | |||
| Less: Long-term receivables due within 1 year (Note 4(11)) | (491,205) | - | ||
| 871,356 | 981,623 |
The Group’s long-term receivables are presented in net amount of finance lease receivablesafter offsetting the unrealised financing income.
(15) Long-term equity investments
Long-term equity investments are classified as follows:
| 31 December 2021 | 31 December 2020 | |||
| Investments in associates (a) | 3,796,705 | 2,901,337 | ||
| Less: Provision for impairment of long-term equity investments | - | - | ||
| 3,796,705 | 2,901,337 |
(a) Investments in associates mainly refer to the investments in Guangdong Shunde Rural
Commercial Bank Co., Ltd., Carrier Midea North America LLC and Hefei Royalstar MotorCo., Ltd. and other enterprises by the Group.
(16) Other non-current financial assets
| 31 December 2021 | 31 December 2020 | |||
| Measured at fair value | ||||
| - Equity of unlisted companies | 5,912,873 | 3,360,849 | ||
| Less: Provision for impairment of other non-current financial assets | - | - | ||
| 5,912,873 | 3,360,849 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 292 -
4 Notes to the consolidated financial statements (Cont’d)
(17) Fixed assets
| Buildings | Overseas land | Machinery and equipment | Motor vehicles | Electronic equipment and others | Total | ||
| Cost | |||||||
| 31 December 2020 | 19,012,262 | 1,394,439 | 20,891,842 | 812,751 | 5,003,386 | 47,114,680 | |
| Changes in accounting policies | - | - | (97,510) | - | - | (97,510) | |
| 1 January 2021 | 19,012,262 | 1,394,439 | 20,794,332 | 812,751 | 5,003,386 | 47,017,170 | |
| Increase in the current year | |||||||
| Purchase | 143,297 | - | 2,077,125 | 27,160 | 743,549 | 2,991,131 | |
| Transfer from construction in progress | 911,993 | - | 151,920 | 1,846 | 29,347 | 1,095,106 | |
| Increase by business combinations | 488,940 | 29,364 | 137,946 | 2,615 | 32,266 | 691,131 | |
| Others | 149,931 | - | 3,963 | - | - | 153,894 | |
| Decrease in the current year | |||||||
| Disposal and retirement | (195,376) | (11,628) | (601,639) | (32,948) | (209,879) | (1,051,470) | |
| Others | (77,624) | - | (100,026) | (51,171) | (6,898) | (235,719) | |
| Differences on translation of foreign currency financial statements | (324,765) | (81,319) | (281,549) | (1,510) | (94,425) | (783,568) | |
| 31 December 2021 | 20,108,658 | 1,330,856 | 22,182,072 | 758,743 | 5,497,346 | 49,877,675 | |
| Accumulated depreciation | |||||||
| 31 December 2020 | 8,179,081 | - | 12,462,365 | 560,134 | 3,585,113 | 24,786,693 | |
| Changes in accounting policies | - | - | (71,162) | - | - | (71,162) | |
| 1 January 2021 | 8,179,081 | - | 12,391,203 | 560,134 | 3,585,113 | 24,715,531 | |
| Increase in the current year | |||||||
| Provision | 929,597 | - | 1,538,606 | 57,105 | 704,741 | 3,230,049 | |
| Others | 75,818 | - | - | - | - | 75,818 | |
| Decrease in the current year | |||||||
| Disposal and retirement | (93,265) | - | (427,815) | (25,522) | (178,621) | (725,223) | |
| Others | (38,875) | - | (45,673) | (19,678) | (1,851) | (106,077) | |
| Differences on translation of foreign currency financial statements | (48,998) | - | (124,141) | (720) | (41,732) | (215,591) | |
| 31 December 2021 | 9,003,358 | - | 13,332,180 | 571,319 | 4,067,650 | 26,974,507 | |
| Provision for impairment | |||||||
| 31 December 2020 | 7,331 | 5,892 | 33,601 | 33,171 | 8,778 | 88,773 | |
| Changes in accounting policies | - | - | - | - | - | - | |
| 1 January 2021 | 7,331 | 5,892 | 33,601 | 33,171 | 8,778 | 88,773 | |
| Increase in the current year | |||||||
| Provision | - | - | - | - | - | - | |
| Decrease in the current year | |||||||
| Disposal and retirement | - | - | (6,981) | (31) | (142) | (7,154) | |
| Others | (821) | - | (16,517) | (11,969) | (25) | (29,332) | |
| Differences on translation of foreign currency financial statements | (331) | (423) | (92) | (78) | (1,043) | (1,967) | |
| 31 December 2021 | 6,179 | 5,469 | 10,011 | 21,093 | 7,568 | 50,320 | |
| Carrying amount | |||||||
| 31 December 2021 | 11,099,121 | 1,325,387 | 8,839,881 | 166,331 | 1,422,128 | 22,852,848 | |
| 31 December 2020 | 10,825,850 | 1,388,547 | 8,395,876 | 219,446 | 1,409,495 | 22,239,214 |
(a) In 2021, the depreciation of fixed assets amounted to RMB 3,230,049,000 (2020: RMB
3,409,521,000) and was included in the income statement.
(b) As at 31 December 2021, the Company was still in the course of obtaining the ownership
certificate for the fixed asset with a carrying amount of RMB 617,721,000 (31 December2020: RMB 123,789,000).
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 293 -
4 Notes to the consolidated financial statements (Cont’d)
(18) Construction in progress
| 31 December 2021 | 31 December 2020 | ||||||||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | ||||||
| Early-stage Project of Shanghai R&D Centre | 687,704 | - | 687,704 | 12,660 | - | 12,660 | |||||
| Midea Headquarters A04 Land Parcel Project | 565,884 | - | 565,884 | 197,540 | - | 197,540 | |||||
| Midea Headquarters 08 Land Parcel Project | 234,165 | - | 234,165 | 3,543 | - | 3,543 | |||||
| Thailand Factories | 213,005 | - | 213,005 | 4,178 | - | 4,178 | |||||
| Indian Science Park | 179,813 | - | 179,813 | 364,554 | - | 364,554 | |||||
| Other projects | 843,547 | (33,188) | 810,359 | 944,143 | (49,316) | 894,827 | |||||
| 2,724,118 | (33,188) | 2,690,930 | 1,526,618 | (49,316) | 1,477,302 | ||||||
(a) Movements of significant projects of construction in progress
| 31 December 2020 Book balance | Increase in the current year | Transfer to fixed assets in the current year | Other decreases | Differences on translation of foreign currency financial statements | 31 December 2021 Book balance | Source of funds | ||||||
| Early-stage Project of Shanghai R&D Centre | 12,660 | 675,044 | - | - | - | 687,704 | Self-financing | |||||
| Midea Headquarters A04 Land Parcel Project | 197,540 | 368,344 | - | - | - | 565,884 | Self-financing | |||||
| Midea Headquarters 08 Land Parcel Project | 3,543 | 230,622 | - | - | - | 234,165 | Self-financing | |||||
| Thailand Factories | 4,178 | 220,093 | - | - | (11,266) | 213,005 | Self-financing | |||||
| Indian Science Park | 364,554 | 45,303 | (219,410) | - | (10,634) | 179,813 | Self-financing | |||||
| Other projects | 944,143 | 841,609 | (875,696) | (24,473) | (42,036) | 843,547 | Self-financing | |||||
| 1,526,618 | 2,381,015 | (1,095,106) | (24,473) | (63,936) | 2,724,118 |
(i) As at 31 December 2021, the cost of construction in progress matched the budget amount, and the projects were carried out on schedule.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 294 -
4 Notes to the consolidated financial statements (Cont’d)
(19) Right-of-use assets
| Buildings | Machinery and equipment | Land use rights and others | Total | |
| Cost | ||||
| 31 December 2020 | — | — | — | — |
| Changes in accounting policies | 1,983,934 | 193,960 | 48,784 | 2,226,678 |
| 1 January 2021 | 1,983,934 | 193,960 | 48,784 | 2,226,678 |
| Increase in the current year | ||||
| New lease contracts | 1,031,414 | 79,140 | 71,362 | 1,181,916 |
| Lease modifications and others | 60,051 | 4,581 | - | 64,632 |
| Decrease in the current year | ||||
| Lease modifications and others | (143,204) | (15,628) | (4,873) | (163,705) |
| Differences on translation of foreign currency financial statements | (79,778) | (20,543) | (3,772) | (104,093) |
| 31 December 2021 | 2,852,417 | 241,510 | 111,501 | 3,205,428 |
| Accumulated depreciation | ||||
| 31 December 2020 | — | — | — | — |
| Changes in accounting policies | - | 71,162 | - | 71,162 |
| 1 January 2021 | - | 71,162 | - | 71,162 |
| Increase in the current year | ||||
| Provision | 800,954 | 88,786 | 22,718 | 912,458 |
| Decrease in the current year | ||||
| Lease modifications and others | (22,701) | (11,713) | (1,471) | (35,885) |
| Differences on translation of foreign currency financial statements | (26,717) | (11,826) | (1,118) | (39,661) |
| 31 December 2021 | 751,536 | 136,409 | 20,129 | 908,074 |
| Carrying amount | ||||
| 31 December 2021 | 2,100,881 | 105,101 | 91,372 | 2,297,354 |
| 31 December 2020 | — | — | — | — |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 295 -
4 Notes to the consolidated financial statements (Cont’d)
(20) Intangible assets
| Land use rights | Patents and non-patent technologies | Trademark rights | Trademark use rights | Others | Total | |||||||
| Cost | ||||||||||||
| 31 December 2020 | 4,827,841 | 2,191,179 | 5,259,116 | 2,646,807 | 5,481,621 | 20,406,564 | ||||||
| Increase in the current year | ||||||||||||
| Purchase | 2,376,033 | 9,826 | - | - | 334,236 | 2,720,095 | ||||||
| Increase by business combinations | - | 1,164,456 | - | - | 167,694 | 1,332,150 | ||||||
| Others | 6,149 | 19,867 | - | - | 86,454 | 112,470 | ||||||
| Decrease in the current year | ||||||||||||
| Disposal | (40,444) | (6,784) | - | - | (137,762) | (184,990) | ||||||
| Others | (9,256) | (11,576) | - | - | (4,797) | (25,629) | ||||||
| Differences on translation of foreign currency financial statements | (1,813) | (167,191) | (489,302) | (351,156) | (351,151) | (1,360,613) | ||||||
| 31 December 2021 | 7,158,510 | 3,199,777 | 4,769,814 | 2,295,651 | 5,576,295 | 23,000,047 | ||||||
| Accumulated amortisation | ||||||||||||
| 31 December 2020 | 1,000,511 | 775,427 | 113,266 | 329,992 | 2,571,447 | 4,790,643 | ||||||
| Increase in the current year | ||||||||||||
| Provision | 146,430 | 222,437 | 57,630 | 42,478 | 743,578 | 1,212,553 | ||||||
| Others | 4,622 | - | - | - | 5,683 | 10,305 | ||||||
| Decrease in the current year | ||||||||||||
| Disposal | (9,299) | (319) | - | - | (89,124) | (98,742) | ||||||
| Others | (4,035) | (3,351) | - | - | (669) | (8,055) | ||||||
| Differences on translation of foreign currency financial statements | (31) | (72,337) | (9,995) | (30,470) | (143,260) | (256,093) | ||||||
| 31 December 2021 | 1,138,198 | 921,857 | 160,901 | 342,000 | 3,087,655 | 5,650,611 | ||||||
| Provision for impairment | ||||||||||||
| 31 December 2020 | - | 114,609 | - | - | 78,919 | 193,528 | ||||||
| Increase in the current year | ||||||||||||
| Provision | - | - | - | - | - | - | ||||||
| Decrease in the current year | ||||||||||||
| Disposal | - | (5,109) | - | - | - | (5,109) | ||||||
| Differences on translation of foreign currency financial statements | - | (1,490) | - | - | (10,565) | (12,055) | ||||||
| 31 December 2021 | - | 108,010 | - | - | 68,354 | 176,364 | ||||||
| Carrying amount | ||||||||||||
| 31 December 2021 | 6,020,312 | 2,169,910 | 4,608,913 | 1,953,651 | 2,420,286 | 17,173,072 | ||||||
| 31 December 2020 | 3,827,330 | 1,301,143 | 5,145,850 | 2,316,815 | 2,831,255 | 15,422,393 |
(a) In 2021, the amortisation of intangible assets amounted to RMB 1,212,553,000 (2020: RMB
1,083,684,000) and was included in the income statement in full amount.
(b) As at 31 December 2021, the Group had no certificates of land use rights that were still in
process.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 296 -
4 Notes to the consolidated financial statements (Cont’d)
(21) Goodwill
The Group’s goodwill had been allocated to the cash generating unit and cash generatingunits at the acquisition date, without any change of goodwill allocation in 2021, and theallocation is as follows:
| 31 December 2021 | 31 December 2020 | |||
| Goodwill - | ||||
| KUKA Group | 20,544,697 | 22,836,294 | ||
| TLSC Group | 2,580,274 | 2,944,486 | ||
| Little Swan | 1,361,306 | 1,361,306 | ||
| Others | 3,893,186 | 2,931,654 | ||
| 28,379,463 | 30,073,740 | |||
| Less: Provision for impairment | (504,711) | (516,522) | ||
| 27,874,752 | 29,557,218 |
When making an impairment testing of goodwill, the Group compares the carrying amountsof related cash generating unit or cash generating units with their recoverable amounts. Ifthe recoverable amount is lower than the carrying amount, the difference shall be includedin profit or loss for the current period. The Group’s goodwill allocation was unchanged in2021.
As at 31 December 2021, the recoverable amount of cash generating unit or cashgenerating units with goodwill is calculated using discounted future cash flows determinedaccording to the budget approved by management (the budget period is 5 to 6 years). Thefuture cash flows beyond the budget period are calculated based on the estimated perpetualannual growth rates. The perpetual annual growth rates (mainly 1%-2%) applied bymanagement are consistent with the estimates of the industry, and do not exceed the long-term average growth rates of each product. Management determines estimated revenuegrowth rates (mainly 2.00%-17.21%) and EBITDA margins (mainly 3.47%-10.84%) basedon past experience and forecast on future market development. The discount rates (mainly
9.32%-15.13%) used by management are the pre-tax rates that are able to reflect the risksspecific to the related cash generating unit and cash generating units. Managementanalyses the recoverable amount of each cash generating unit or cash generating unitsbased on these assumptions and considers that no further provision for impairment isnecessary for the goodwill.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 297 -
4 Notes to the consolidated financial statements (Cont’d)
(22) Long-term prepaid expenses
Long-term prepaid expenses mainly include expenses prepaid for software and projectreconstruction.
(23) Deferred tax assets and deferred tax liabilities
(a) Deferred tax assets before offsetting
| 31 December 2021 | 31 December 2020 | |||||||
| Deductible temporary differences and deductible losses | Deferred tax assets | Deductible temporary differences and deductible losses | Deferred tax assets | |||||
| Deductible losses | 6,189,786 | 1,371,028 | 2,825,364 | 693,098 | ||||
| Provision for asset impairment | 2,891,362 | 596,763 | 2,023,621 | 409,576 | ||||
| Employee benefits payable | 1,214,088 | 285,263 | 1,821,805 | 426,845 | ||||
| Other current liabilities | 29,984,331 | 5,531,170 | 29,914,787 | 5,305,009 | ||||
| Others | 9,949,311 | 2,192,050 | 6,615,646 | 1,700,311 | ||||
| 50,228,878 | 9,976,274 | 43,201,223 | 8,534,839 | |||||
| Including: | ||||||||
| Expected to be recovered within 1 year (inclusive) | 7,205,683 | 6,415,757 | ||||||
| Expected to be recovered after 1 year | 2,770,591 | 2,119,082 | ||||||
| 9,976,274 | 8,534,839 | |||||||
(b) Deferred tax liabilities before offsetting
| 31 December 2021 | 31 December 2020 | |||||||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |||||
| Changes in fair value | 3,159,648 | 349,208 | 1,495,449 | 205,628 | ||||
| Business combinations involving enterprises not under common control | 11,683,474 | 3,145,282 | 11,673,627 | 3,415,470 | ||||
| Others | 14,441,530 | 3,239,720 | 11,296,707 | 2,929,060 | ||||
| 29,284,652 | 6,734,210 | 24,465,783 | 6,550,158 | |||||
| Including: | ||||||||
| Expected to be recovered within 1 year (inclusive) | 1,268,054 | 1,026,806 | ||||||
| Expected to be recovered after 1 year | 5,466,156 | 5,523,352 | ||||||
| 6,734,210 | 6,550,158 | |||||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 298 -
4 Notes to the consolidated financial statements (Cont’d)
(23) Deferred tax assets and deferred tax liabilities (Cont’d)
(c) The net balances of deferred tax assets and deferred tax liabilities after offsetting are as
follows:
| 31 December 2021 | 31 December 2020 | |||
| Balance after offsetting | Balance after offsetting | |||
| Deferred tax assets | 8,192,309 | 7,208,635 | ||
| Deferred tax liabilities | 4,950,245 | 5,223,954 |
(24) Other non-current assets
| 31 December 2021 | 31 December 2020 | ||
| Fixed-income products (a) | 35,485,395 | 10,128,172 | |
| Others | 888,961 | 1,127,707 | |
| 36,374,356 | 11,255,879 |
(a) As at 31 December 2021, fixed-income products were monetary investment products and
non-transferable certificates of deposit deposited in financial institutions with maturities ofmore than one year at the time of acquisition , which were subsequently measured atamortised cost.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 299 -
4 Notes to the consolidated financial statements (Cont’d)
(25) Asset impairment and provision for loss
| 31 December 2020 | Changes in accounting policies | 1 January 2021 | Increase in the current year | Decrease in the current year | Differences on translation of foreign currency financial statements | 31 December 2021 | ||||||||||
| Reversal | Charge-off/ Written-off | |||||||||||||||
| Provision for bad debts | 1,242,799 | — | 1,242,799 | 517,864 | (134,413) | (219,326) | (11,403) | 1,395,521 | ||||||||
| Including: Provision for bad debts of accounts receivable | 876,573 | — | 876,573 | 173,575 | (88,386) | (92,215) | (10,368) | 859,179 | ||||||||
| Provision for losses of loans and advances | 312,854 | — | 312,854 | 144,691 | (1,748) | (3,070) | - | 452,727 | ||||||||
| Provision for bad debts of notes receivable | 347 | — | 347 | 31,549 | (272) | - | - | 31,624 | ||||||||
| Provision for bad debts of other receivables | 53,025 | — | 53,025 | 158,923 | (43,460) | (124,041) | (917) | 43,530 | ||||||||
| Provision for impairment of long-term receivables | - | — | - | 9,126 | (547) | - | (118) | 8,461 | ||||||||
| Provision for decline in the value of inventories | 442,695 | — | 442,695 | 467,825 | (20,477) | (325,238) | (24,422) | 540,383 | ||||||||
| Provision for impairment of fixed assets | 88,773 | — | 88,773 | - | - | (36,486) | (1,967) | 50,320 | ||||||||
| Provision for impairment of intangible assets | 193,528 | — | 193,528 | - | - | (5,109) | (12,055) | 176,364 | ||||||||
| Provision for impairment of contract assets | 52,935 | — | 52,935 | 5,022 | (3,972) | - | (7,218) | 46,767 | ||||||||
| Provision for impairment of investment properties | 12,576 | — | 12,576 | - | - | - | - | 12,576 | ||||||||
| Provision for impairment of construction in progress | 49,316 | — | 49,316 | 35,022 | - | (49,316) | (1,834) | 33,188 | ||||||||
| Provision for impairment of right-of-use assets | — | - | - | - | - | - | - | - | ||||||||
| Provision for impairment of goodwill | 516,522 | — | 516,522 | - | - | - | (11,811) | 504,711 | ||||||||
| 2,599,144 | - | 2,599,144 | 1,025,733 | (158,862) | (635,475) | (70,710) | 2,759,830 | |||||||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 300 -
4 Notes to the consolidated financial statements (Cont’d)
(26) Assets with use rights restricted
As at 31 December 2021, assets with use rights restricted were mainly as follows:
| 31 December 2021 | 31 December 2020 | |||
| Cash at bank and on hand | ||||
| Including: Cash at bank (Note 4(1)) | 28,767,516 | 37,067,298 | ||
| Other cash balances (Note 4(1)) | 443,893 | 688,481 | ||
| Legal reserves with the Central Bank (Note 4(1)) | 419,718 | 1,707,645 | ||
| Deposits with banks and other financial institutions (Note 4(1)) | 1,000,000 | 17,500,000 | ||
| 30,631,127 | 56,963,424 |
(27) Short-term borrowings
| 31 December 2021 | 31 December 2020 | |||
| Pledged borrowings | 2,138,309 | 192,569 | ||
| Guaranteed borrowings | 1,982,534 | 7,402,260 | ||
| Unsecured borrowings | 1,260,780 | 2,281,509 | ||
| Mortgage borrowings | - | 67,591 | ||
| 5,381,623 | 9,943,929 | |||
As at 31 December 2021, the annual interest rate range of short-term borrowings was 0.41%to 9.75% (31 December 2020: 0.90% to 9.40%).
(28) Notes payable
| 31 December 2021 | 31 December 2020 | |||
| Bank acceptance notes | 32,752,007 | 28,233,818 | ||
| Trade acceptance notes | - | 16,121 | ||
| 32,752,007 | 28,249,939 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 301 -
4 Notes to the consolidated financial statements (Cont’d)
(29) Accounts payable
| 31 December 2021 | 31 December 2020 | |||
| Materials cost payable | 61,527,747 | 49,451,076 | ||
| Others | 4,455,812 | 4,479,185 | ||
| 65,983,559 | 53,930,261 |
As at 31 December 2021, accounts payable with ageing over 1 year with a carrying amountof RMB 1,271,088,000 (31 December 2020: RMB 985,248,000) were mainly unsettledaccounts payable for materials.
(30) Contract liabilities
| 31 December 2021 | 31 December 2020 | ||||
| Advances on sales and services | 21,319,800 | 16,511,435 | |||
| Advances for construction projects | 2,596,795 | 1,889,487 | |||
| 23,916,595 | 18,400,922 | ||||
| More than 90% of contract liabilities included in the carrying amount as at 31 December 2020 were transferred to revenue in 2021. | |||||
| As mentioned in Note 5(1), due to business combinations involving enterprises not under common control in the current year, the amount of contract liabilities increased by RMB 99,835,000. | |||||
(31) Employee benefits payable
| 31 December 2021 | 31 December 2020 | |||
| Short-term employee benefits payable (a) | 7,430,595 | 6,666,830 | ||
| Others | 104,573 | 287,992 | ||
| 7,535,168 | 6,954,822 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 302 -
4 Notes to the consolidated financial statements (Cont’d)
(31) Employee benefits payable (Cont'd)
(a) Short-term employee benefits
| 31 December 2020 | Increase in the current year | Decrease in the current year | 31 December 2021 | |||||
| Wages and salaries, bonus, allowances and subsidies | 6,181,736 | 27,076,632 | (26,308,530) | 6,949,838 | ||||
| Staff welfare | 341,810 | 1,538,749 | (1,581,163) | 299,396 | ||||
| Social security contributions | 73,818 | 1,610,052 | (1,616,602) | 67,268 | ||||
| Including: Medical insurance | 71,639 | 1,516,746 | (1,522,722) | 65,663 | ||||
| Work injury insurance | 1,056 | 33,402 | (33,794) | 664 | ||||
| Maternity insurance | 1,123 | 59,904 | (60,086) | 941 | ||||
| Housing funds | 23,537 | 584,819 | (585,277) | 23,079 | ||||
| Labour union funds and employee education funds | 17,513 | 132,071 | (127,338) | 22,246 | ||||
| Other short-term employee benefits | 28,416 | 575,477 | (535,125) | 68,768 | ||||
| 6,666,830 | 31,517,800 | (30,754,035) | 7,430,595 |
(32) Taxes payable
| 31 December 2021 | 31 December 2020 | |||
| Enterprise income tax payable | 2,972,040 | 3,121,236 | ||
| Unpaid VAT | 1,032,688 | 1,013,378 | ||
| Others | 1,399,539 | 1,623,444 | ||
| 5,404,267 | 5,758,058 |
(33) Other payables
| 31 December 2021 | 31 December 2020 | ||
| Other payables | 4,288,104 | 4,501,391 |
(a) Other payables are mainly restricted share repurchase obligation, deposit and security
deposit payable, reimbursed logistics expense, etc.
(b) As at 31 December 2021, other payables with ageing over 1 year with a carrying amount of
RMB 1,288,937,000 (31 December 2020: RMB 1,392,059,000) were mainly thoserecognised for performing equity incentive plan and deposit and security deposit payable,which were unsettled since related projects were uncompleted.
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
-303 -
4 Notes to the consolidated financial statements (Cont’d)
(34)Current portion of non-current liabilities
| 31 December 2021 | 1 January 2021 | 31 December 2020 |
| Current portion of long-term borrowings (Note 4(36)) | 28,087,037 | 6,284,643 | 6,284,643 | |||
| Current portion of lease liabilities (Note 4(37)) | 860,503 | 636,685 | —— | |||
| Current portion of long-term payables | - | 17,855 | 25,538 | |||
| 28,947,540 | 6,939,183 | 6,310,181 |
(35)Other current liabilities
| 31 December 2021 | 31 December 2020 |
Accrued sale rebates
| Accrued sale rebates | 31,307,753 | 31,192,652 | ||
| Short-term financing bonds payable | - | 3,030,785 | ||
| Others | 16,920,200 | 15,628,802 | ||
| 48,227,953 | 49,852,239 |
(36)Long-term borrowings
| 31 December 2021 | 31 December 2020 |
Mortgage borrowings (a)
| Mortgage borrowings (a) | 26,635,207 | 29,673,661 | ||
| Unsecured borrowings | 14,269,908 | 11,633,434 | ||
| Guaranteed borrowings (b) | 6,903,645 | 7,785,898 | ||
| Pledged borrowings | 12,297 | 18,937 | ||
| 47,821,057 | 49,111,930 | |||
| Less: Current portion of mortgage borrowings | (26,626,623) | (48,962) | ||
| Current portion of unsecured borrowings | (1,439,224) | (4,054,593) | ||
| Current portion of guaranteed borrowings | (15,025) | (2,174,775) | ||
| Current portion of pledged borrowings | (6,165) | (6,313) | ||
| 19,734,020 | 42,827,287 |
(a)As at 31 December 2021, bank mortgage borrowings were mainly mortgage borrowings with
a cost of EUR 3,686,857,000, equivalent to RMB approximately 26,617,999,000 (31December 2020: a cost of EUR 3,691,857,000, equivalent to approximately RMB29,627,150,000) and were pledged by 81.04% equity of KUKA Group, which was acquiredby the subsidiary of the Company. Interest is paid on a semi-annual basis, and theborrowings are due in August 2022.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 304 -
4 Notes to the consolidated financial statements (Cont’d)
(36) Long-term borrowings (Cont’d)
(b) As at 31 December 2021, bank guaranteed borrowings mainly included: (i) guaranteed
borrowings with a cost of EUR 271,000,000, equivalent to RMB 1,956,539,000 (31December 2020: a cost of EUR 271,000,000, equivalent to RMB 2,174,775,000) guaranteedby the Company, with interest paid every 3 months, which will be due in April 2024; (ii)guaranteed borrowings with a cost of JPY 69,460,000,000, equivalent to RMB3,849,126,000 (31 December 2020: a cost of JPY 69,460,000,000, equivalent to RMB4,392,373,000) guaranteed by the Company, with interest paid on a monthly basis, whichwill be due in May 2024; (iii) guaranteed borrowings with a cost of EUR 150,000,000,equivalent to RMB 1,082,955,000 (31 December 2020: a cost of EUR 150,000,000,equivalent to RMB 1,203,750,000) guaranteed by the Company, with interest paid on amonthly basis, which will be due in June 2025.
(c) As at 31 December 2021, the annual interest rate range of long-term borrowings was 0.49%
to 5.50% (31 December 2020: 0.49% to 6.08%).
| (37) | Lease liabilities | ||||||
| 31 December 2021 | 1 January 2021 | 31 December 2020 | |||||
| Lease liabilities | 2,394,055 | 2,150,111 | — | ||||
| Less: Current portion of non-current liabilities (Note 4(34)) | (860,503) | (636,685) | — | ||||
| 1,533,552 | 1,513,426 | — | |||||
(i) As at 31 December 2021, the future minimum lease payments of short-term leases and low-
value asset leases adopting the practical expedient according to the new lease standardtotalled RMB 151,561,000, which should be paid within one year.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 305 -
4 Notes to the consolidated financial statements (Cont’d)
(38) Long-term employee benefits payable
| 31 December 2021 | 31 December 2020 | |||
| Supplementary retirement benefits (a) | 1,705,440 | 2,014,651 | ||
| Others | 119,576 | 145,024 | ||
| 1,825,016 | 2,159,675 |
(a) Supplementary retirement benefits
Supplementary retirement benefits obligation of the Group recognised on the balance sheetdate is calculated using the projected unit credit method, and reviewed by externalindependent actuary institution.
(i) The Group’s supplementary retirement benefits liabilities:
| 31 December 2021 | 31 December 2020 | |||
| Defined benefit obligation | 3,572,482 | 3,850,400 | ||
| Less: Fair value of planned assets | (1,867,042) | (1,835,749) | ||
| Liabilities of defined benefit obligation | 1,705,440 | 2,014,651 |
(ii) The actuarial assumptions used to determine the present value of defined benefit obligation
| 31 December 2021 | |||
| Discount rate | 0.06% - 7.75% | ||
| Inflation rate | 1.00% | ||
| Salary growth rate | 0.50% - 6.90% | ||
| Pension dynamics | 0.00% - 3.70% | ||
| Retirement rate | 0.00% - 11.60% | ||
| Changes in cost of medical services | 6.25% |
(39) Other non-current liabilities
Other non-current liabilities are mainly equity purchase payables.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 306 -
4 Notes to the consolidated financial statements (Cont’d)
(40) Share capital
| 31 December 2020 | Movements in the current year | 31 December 2021 | ||||||
| Share-based payment incentive plan (a) | Desterilisation | Additional issuance | Repurchases and write-offs | Sub-total | ||||
| RMB-denominated ordinary shares | ||||||||
| RMB-denominated ordinary shares subject to trading restriction | 182,863 | 9,940 | (30,391) | - | (5,873) | (26,324) | 156,539 | |
| RMB-denominated ordinary shares not subject to trading restriction | 6,847,113 | 24,497 | 30,391 | - | (71,976) | (17,088) | 6,830,025 | |
| 7,029,976 | 34,437 | - | - | (77,849) | (43,412) | 6,986,564 | ||
| Movements in the current year | ||||||||
| 31 December 2019 | Share-based payment incentive plan (a) | Desterilisation | Additional issuance | Repurchases and write-offs | Sub-total | 31 December 2020 | ||
| RMB-denominated ordinary shares - | ||||||||
| RMB-denominated ordinary shares subject to trading restriction | 165,403 | 33,245 | (10,060) | - | (5,725) | 17,460 | 182,863 | |
| RMB-denominated ordinary shares not subject to trading restriction | 6,806,497 | 30,556 | 10,060 | - | - | 40,616 | 6,847,113 | |
| 6,971,900 | 63,801 | - | - | (5,725) | 58,076 | 7,029,976 | ||
(a) In 2021, the share-based payment incentive plan increased the share capital by 34,437,000
shares (2020: 63,801,000 shares).
(41) Treasury stock
| Increase in the current year | Decrease in the current year | |||||||
| 31 December 2020 | 31 December 2021 | |||||||
| Treasury stock used for share-based payment incentive plan | 6,094,347 | 8,665,148 | (714,945) | 14,044,550 | ||||
| Repurchased shares that have not yet been written off | - | 5,000,596 | (5,000,596) | - | ||||
| 6,094,347 | 13,665,744 | (5,715,541) | 14,044,550 |
| Increase in the current year | Decrease in the current year | |||||||
| 31 December 2019 | 31 December 2020 | |||||||
| Treasury stock used for share-based payment incentive plan | 3,759,732 | 2,798,468 | (463,853) | 6,094,347 |
In 2021, the Group’s repurchased treasury stock amounted to approximately RMB13,665,744,000, and the restricted shares and employee stock ownership plans granted in2021 were approximately RMB 1,187,859,000. As at 31 December 2021, treasury stockmainly comprised treasury stock of approximately RMB 9,662,644,000 used for share-based payment incentive plan and restricted shares amounting to approximately RMB4,381,906,000 that have not met unlock condition, amounting to approximately RMB14,044,550,000 in total (31 December 2020: RMB 6,094,347,000).
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 307 -
4 Notes to the consolidated financial statements (Cont’d)
(42) Capital surplus
| Increase in the current year | Decrease in the current year | |||||||
| 31 December 2020 | 31 December 2021 | |||||||
| Share premium (a) | 18,185,028 | 1,938,616 | (5,178,730) | 14,944,914 | ||||
| Share-based payment incentive plan (b) | 1,414,842 | 1,516,039 | (769,527) | 2,161,354 | ||||
| Others (c) | 2,888,235 | 737,071 | (214,644) | 3,410,662 | ||||
| 22,488,105 | 4,191,726 | (6,162,901) | 20,516,930 | |||||
| Increase in the current year | Decrease in the current year | |||||||
| 31 December 2019 | 31 December 2020 | |||||||
| Share premium | 15,683,499 | 2,694,886 | (193,357) | 18,185,028 | ||||
| Share-based payment incentive plan | 1,443,942 | 1,022,236 | (1,051,336) | 1,414,842 | ||||
| Others | 2,512,872 | 513,951 | (138,588) | 2,888,235 | ||||
| 19,640,313 | 4,231,073 | (1,383,281) | 22,488,105 |
(a) The increase in share premium arose from the exercise of share options with the amount of
approximately RMB 1,495,004,000, the unlocking of restricted shares with the amount ofapproximately RMB 443,612,000; the decrease in share premium arose from therepurchase and cancellation of restricted shares and public shares with the amount ofapproximately RMB 5,178,730,000.
(b) The increase of share-based payment incentive plan arose from expenses attributable to
shareholders' equity of the parent company in the share-based payment incentive plan withthe amount of approximately RMB 1,516,039,000, while the decrease arose from thetransfer of approximately RMB 769,527,000 to share premium due to exercise of share-based payment incentive plan.
(c) Others in capital surplus mainly included the Group’s disposal of part of the equity of Annto
Logistics Supply Chain Technology Co., Ltd. to the minority shareholders without lost ofcontrol, the acquisition of the minority shareholders of GD Midea Group Wuhu Air-Conditioning Equipment Co.,Ltd. and SMC, the impact of income tax due to the exercise ofthe share-based payment incentive plan, etc.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 308 -
4 Notes to the consolidated financial statements (Cont’d)
(43) Other comprehensive income
| Other comprehensive income in the balance sheet | Other comprehensive income in the income statement for the year ended 31 December 2021 | ||||||||||
| 31 December 2020 | Attributable to the parent company after tax | Other comprehensive income transferred to retained earnings | 31 December 2021 | Amount arising before income tax | Less: Reclassification of other comprehensive income to profit or loss | Less: Income tax expenses | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
| Other comprehensive income items which will not be reclassified to profit or loss | |||||||||||
| Changes arising from remeasurement of defined benefit plan | 19,210 | (7,172) | - | 12,038 | (20,242) | - | 19,213 | (7,172) | 6,143 | ||
| Changes in fair value of investments in other equity instruments | 493 | 424 | (2,866) | (1,949) | 2,238 | - | - | 424 | 1,814 | ||
| Other comprehensive income items which will be reclassified to profit or loss | |||||||||||
| Other comprehensive income that will be transferred subsequently to profit or loss under the equity method | (86,181) | (3,032) | - | (89,213) | (3,032) | - | - | (3,032) | - | ||
| Cash flow hedging reserve | 311,341 | (6,997) | - | 304,344 | 359,992 | (348,437) | (14,925) | (6,997) | 3,627 | ||
| Differences on translation of foreign currency financial statements | (1,793,866) | (190,302) | - | (1,984,168) | (232,113) | - | - | (190,302) | (41,811) | ||
| (1,549,003) | (207,079) | (2,866) | (1,758,948) | 106,843 | (348,437) | 4,288 | (207,079) | (30,227) | |||
| Other comprehensive income in the balance sheet | Other comprehensive income in the income statement for the year ended 31 December 2020 | ||||||||||
| 31 December 2019 | Attributable to the parent company after tax | Other comprehensive income transferred to retained earnings | 31 December 2020 | Amount arising before income tax | Less: Reclassification of other comprehensive income to profit or loss | Less: Income tax expenses | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
| Other comprehensive income items which will not be reclassified to profit or loss | |||||||||||
| Changes arising from remeasurement of defined benefit plan | (92,685) | 111,895 | - | 19,210 | 102,595 | - | 8,909 | 111,895 | (391) | ||
| Changes in fair value of investments in other equity instruments | - | 493 | - | 493 | (5,132) | - | (594) | 493 | (6,219) | ||
| Other comprehensive income items which will be reclassified to profit or loss | |||||||||||
| Other comprehensive income that will be transferred subsequently to profit or loss under the equity method | (65,736) | (20,445) | - | (86,181) | (20,445) | - | - | (20,445) | - | ||
| Cash flow hedging reserve | 12,620 | 298,721 | - | 311,341 | 348,437 | (13,175) | (33,459) | 298,721 | 3,082 | ||
| Differences on translation of foreign currency financial statements | (565,753) | (1,228,113) | - | (1,793,866) | (1,564,945) | - | - | (1,228,113) | (336,832) | ||
| (711,554) | (837,449) | - | (1,549,003) | (1,139,490) | (13,175) | (25,144) | (837,449) | (340,360) | |||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 309 -
4 Notes to the consolidated financial statements (Cont’d)
(44) Surplus reserve
| 31 December 2020 | Increase in the current year | 31 December 2021 | |||
| Statutory surplus reserve | 7,966,362 | 1,483,539 | 9,449,901 | ||
| 31 December 2019 | Increase in the current year | 31 December 2020 | |||
| Statutory surplus reserve | 6,447,658 | 1,518,704 | 7,966,362 |
In accordance with the Company Law of the People's Republic of China and the Company’sArticles of Association, the Company should appropriate 10% of net profit for the year to thestatutory surplus reserve, and the Company can cease appropriation when the statutorysurplus reserve accumulated to more than 50% of the registered capital. The statutorysurplus reserve can be used to make up for the losses or increase the share capital afterapproval from the appropriate authorities. According to a resolution at the Board of Directors'meeting, the Company appropriated 10% of net profit for the year, amounting toapproximately RMB 1,483,539,000 (2020: 10% of net profit, amounting to approximatelyRMB 1,518,704,000) to the statutory surplus reserve in 2021.
(45) Undistributed profits
| 2021 | 2020 | |||
| Undistributed profits at the beginning of the year | 87,074,453 | 72,713,631 | ||
| Add: Net profit attributable to shareholders of the parent company for the current year | 28,573,650 | 27,222,969 | ||
| Transfer from other comprehensive income (a) | 2,866 | - | ||
| Less: Ordinary share dividends payable (b) | (11,052,729) | (11,122,406) | ||
| Appropriation to general risk reserve (c) | (131,938) | (221,037) | ||
| Appropriation to statutory surplus reserve (Note 4(44)) | (1,483,539) | (1,518,704) | ||
| Undistributed profits at the end of the year | 102,982,763 | 87,074,453 |
(a) In 2021, due to the Group’s strategic adjustment, certain investments in other equity
instruments were disposed. Accordingly, the amount of approximately RMB 2,866,000accumulated in other comprehensive income was transferred to undistributed profits.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 310 -
4 Notes to the consolidated financial statements (Cont’d)
(45) Undistributed profits (Cont’d)
(b) Ordinary share dividends distributed in the current year
In accordance with the resolution at the Board of Shareholders’ meeting, dated 26 May2021, the Company distributed a cash dividend to the shareholders at RMB 1.60 per share,amounting to approximately RMB 11,066,392,000 calculated by 6,913,968,000 issuedshares less those repurchased; 5,873,000 repurchased incentive shares in the restrictedshares incentive plan were written off (Note 4(40)), and cash dividend amounting toapproximately RMB 13,663,000 was cancelled. The actual cash dividend distributed in thecurrent year amounted to approximately RMB 11,052,729,000.
(c) General risk reserve
In 2021, according to the Notice on Strengthening the Supervision and Administration ofCommercial Factoring Enterprises issued by China Banking and Insurance RegulatoryCommission and the Administrative Measures for the Provision of Reserves of FinancialEnterprises issued by the Ministry of Finance, certain subsidiaries of the Group providedgeneral risk reserve amounting to approximately RMB 131,938,000 (2020: RMB221,037,000).
(46) Operating revenue and cost of sales
| 2021 | 2020 | |||
| Revenue from main operations | 308,297,360 | 261,474,699 | ||
| Revenue from other operations | 32,935,848 | 22,746,550 | ||
| 341,233,208 | 284,221,249 | |||
| 2021 | 2020 | |||
| Cost of sales from main operations | 235,092,045 | 196,750,179 | ||
| Cost of sales from other operations | 29,433,954 | 20,048,234 | ||
| 264,525,999 | 216,798,413 |
(a) Revenue and cost of sales from main operations
| 2021 | 2020 | |||||||
| Revenue from main operations | Cost of sales from main operations | Revenue from main operations | Cost of sales from main operations | |||||
| HVAC | 141,879,146 | 112,012,603 | 121,215,043 | 93,458,352 | ||||
| Consumer appliances | 131,866,099 | 95,279,340 | 113,890,764 | 81,538,458 | ||||
| Robotics and automation system | 27,281,328 | 21,349,939 | 21,588,782 | 17,297,837 | ||||
| Others | 7,270,787 | 6,450,163 | 4,780,110 | 4,455,532 | ||||
| 308,297,360 | 235,092,045 | 261,474,699 | 196,750,179 | |||||
In 2021, cost of sales from main operations was mainly material costs and labour costs,which accounted for over 80% of total cost of sales from main operations (2020: over 80%).
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 311 -
4 Notes to the consolidated financial statements (Cont’d)
(46) Operating revenue and cost of sales (Cont’d)
(b) Revenue and cost of sales from other operations
| 2021 | 2020 | |||||||
| Revenue from other operations | Cost of sales from other operations | Revenue from other operations | Cost of sales from other operations | |||||
| Revenue from sales of materials | 29,458,918 | 28,637,352 | 20,190,867 | 19,378,005 | ||||
| Others | 3,476,930 | 796,602 | 2,555,683 | 670,229 | ||||
| 32,935,848 | 29,433,954 | 22,746,550 | 20,048,234 | |||||
In 2021, cost of sales from other operations was mainly material costs, which accounted forover 80% of total cost of sales from other operations (2020: over 80%).
(c) In 2021, among the Group’s revenue from main operations, the amount recognised at a
point in time accounted for above 90% (2020: above 90%) of the total amount and theamount recognised within a certain period of time mainly included revenue from mainoperations of robotics and automation system segment. The Group’s revenue from otheroperations was recognised at a point in time.
(47) Interest income and interest costs
The Group’s interest income and expenses arising from financial business are presented asfollows:
| 2021 | 2020 | |||
| Interest income from loans and advances | 1,818,709 | 1,229,255 | ||
| Including: Interest income from loans and advances to corporations and individuals | 1,710,237 | 1,072,209 | ||
| Interest income from note discounting | 108,472 | 157,046 | ||
| Interest income from deposits with banks, other financial institutions and the Central Bank | 308,334 | 258,956 | ||
| Interest income | 2,127,043 | 1,488,211 | ||
| Interest costs | (87,066) | (105,168) | ||
| 2,039,977 | 1,383,043 |
(48) Taxes and surcharges
| 2021 | 2020 | |||
| City maintenance and construction tax | 593,476 | 642,902 | ||
| Educational surcharge | 438,826 | 470,229 | ||
| Others | 577,082 | 420,515 | ||
| 1,609,384 | 1,533,646 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 312 -
4 Notes to the consolidated financial statements (Cont’d)
(49) Selling and distribution expenses
| 2021 | 2020 | |||
| Selling and distribution expenses | 28,647,344 | 23,563,455 |
In 2021, selling and distribution expenses were mainly maintenance expenses,advertisement and promotion fee, employee benefits, E-commerce service fee, storageservice fee and property management expenses, which accounted for over 70% of totalselling and distribution expenses (2020: over 70%).
(50) General and administrative expenses
| 2021 | 2020 | |||
| General and administrative expenses | 10,266,283 | 9,264,148 |
In 2021, general and administrative expenses were mainly employee benefits, depreciationand amortisation expenses, technical maintenance expenses, administrative officeexpenses, storage service fee and property management expenses, which accounted forover 80% of total general and administrative expenses (2020: over 70%).
(51) R&D expenses
| 2021 | 2020 | |||
| R&D expenses | 12,014,907 | 10,118,667 |
In 2021, R&D expenses were mainly employee benefits, depreciation and amortisationexpenses, trial products and material inputs expenses, which accounted for over 80% oftotal R&D expenses (2020: over 80%).
(52) Financial income
The Group's financial income, other than those arising from financial business (Note 4(47)),are presented as follows:
| 2021 | 2020 | |||
| Interest expenses (a) | (1,357,564) | (1,305,591) | ||
| Less: Interest income | 5,181,658 | 3,663,028 | ||
| Exchange gains or losses | 798,120 | 446,352 | ||
| Others | (236,103) | (165,757) | ||
| 4,386,111 | 2,638,032 |
(a) In 2021, interest costs on lease liabilities of the Group amounted to approximately RMB
104,903,000.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 313 -
4 Notes to the consolidated financial statements (Cont’d)
(53) Asset impairment losses
| 2021 | 2020 | |||
| Losses on decline in the value of inventories (Note 4(10)) | 447,348 | 355,695 | ||
| Impairment losses on construction in progress | 35,022 | 45,975 | ||
| Impairment losses on contract assets | 1,050 | 52,153 | ||
| Impairment losses on fixed assets (Note 4(17)) | - | 54,010 | ||
| Impairment losses on intangible assets (Note 4(20)) | - | 197,376 | ||
| 483,420 | 705,209 |
(54) Credit impairment losses
| 2021 | 2020 | |||
| Losses on bad debts of accounts receivable (Note 4(4)) | 85,189 | 87,259 | ||
| Losses on bad debts of other receivables (Note 4(5)) | 115,463 | 4,278 | ||
| Losses on bad debts of notes receivable (Note 4(3)) | 31,277 | 347 | ||
| Impairment losses on loans and advances (Note 4(9)) | 142,943 | 155,721 | ||
| Impairment losses on long-term receivables (Note 4(14)) | 8,579 | - | ||
| 383,451 | 247,605 |
(55) Gains or losses on changes in fair value
| 2021 | 2020 | |||
| Derivative financial assets and liabilities | 129,248 | 86,950 | ||
| Other financial assets | (295,654) | 1,676,000 | ||
| (166,406) | 1,762,950 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 314 -
4 Notes to the consolidated financial statements (Cont’d)
(56) Investment income
| 2021 | 2020 | |||
| Investment income from associates | 560,679 | 402,528 | ||
| Investment income from holding of financial assets held for trading | 635,828 | 1,598,107 | ||
| Investment income from disposal of derivative financial assets and liabilities | 510,932 | 122,576 | ||
| Investment income from disposal of financial assets held for trading | 150,075 | 295,802 | ||
| Others (i) | 508,259 | (56,551) | ||
| 2,365,773 | 2,362,462 |
There is no significant restriction on recovery of investment income of the Group.
| (i) | As disclosed in Note 4(3)(b), few of notes receivables were discounted and derecognised by certain subsidiaries of the Group, with loss incurred of approximately RMB 7,512,000 included in investment income for the current period. |
(57) Gains/(Losses) on disposal of assets
| 2021 | 2020 | |||
| Gains on disposal of non-current assets | 110,439 | 26,876 | ||
| Losses on disposal of non-current assets | (52,182) | (87,399) | ||
| 58,257 | (60,523) |
(58) Other income
| 2021 | 2020 | Asset related/ Income related | ||||
| Special subsidy | 1,307,504 | 1,424,090 | Income related |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 315 -
4 Notes to the consolidated financial statements (Cont’d)
(59) Income tax expenses
| 2021 | 2020 | |||
| Current income tax calculated based on tax law and related regulations | 5,959,551 | 4,928,687 | ||
| Deferred income tax | (1,257,383) | (771,690) | ||
| 4,702,168 | 4,156,997 |
The reconciliation from income tax calculated based on the applicable tax rates and totalprofit presented in the consolidated income statement to the income tax expenses is listedbelow:
| 2021 | 2020 | |||
| Total profit | 33,717,544 | 31,663,539 | ||
| Income tax calculated at tax rate of 25% | 8,429,386 | 7,915,885 | ||
| Effect of different tax rates applicable to subsidiaries | (2,703,750) | (3,314,153) | ||
| Effect of income tax annual filing for prior periods | 1,453 | (241,941) | ||
| Income not subject to tax | (566,876) | (163,339) | ||
| Costs, expenses and losses not deductible for tax purposes | 476,697 | 459,501 | ||
| Utilisation of previous temporary differences or deductible losses for which no deferred tax assets were recognised in prior periods | (75,134) | (33,534) | ||
| Others | (859,608) | (465,422) | ||
| Income tax expenses | 4,702,168 | 4,156,997 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 316 -
4 Notes to the consolidated financial statements (Cont’d)
(60) Calculation of basic and diluted earnings per share
(a) Basic earnings per share
Basic earnings per share is calculated by dividing consolidated net profit attributable toordinary shareholders of the Company by the weighted average number of outstandingordinary shares:
| Unit | 2021 | 2020 | |||
| Consolidated net profit attributable to ordinary shareholders of the parent company | RMB’000 | 28,573,650 | 27,222,969 | ||
| Less: Dividends payable to restricted shares | RMB’000 | (82,152) | (64,930) | ||
| 28,491,498 | 27,158,039 | ||||
| Weighted average number of outstanding ordinary shares | Thousand shares | 6,837,497 | 6,908,891 | ||
| Basic earnings per share | RMB Yuan/share | 4.17 | 3.93 | ||
| Including: | |||||
| - Basic earnings per share from continuing operations: | 4.17 | 3.93 | |||
| - Basic earnings per share for discontinued operations: | - | - |
(b) Diluted earnings per share are calculated by dividing consolidated net profit attributable to
ordinary shareholders of the Company by the diluted weighted average number ofoutstanding ordinary shares:
| Unit | 2021 | 2020 | |||
| Consolidated net profit attributable to ordinary shareholders of the Company | RMB’000 | 28,573,650 | 27,222,969 | ||
| Weighted average number of outstanding ordinary shares | Thousand shares | 6,837,497 | 6,908,891 | ||
| Weighted average number of ordinary shares increased from share-based payment | Thousand shares | 68,827 | 63,495 | ||
| Weighted average number of diluted outstanding ordinary shares | Thousand shares | 6,906,324 | 6,972,386 | ||
| Diluted earnings per share | RMB Yuan/share | 4.14 | 3.90 |
(61) Notes to the cash flow statement
(a) Cash received relating to other operating activities
| 2021 | 2020 | |||
| Other income | 1,749,871 | 1,522,883 | ||
| Revenue from other operations | 3,373,578 | 2,450,466 | ||
| Non-operating income | 568,484 | 383,436 | ||
| Financial income - interest income | 323,155 | 441,016 | ||
| Others | 585,734 | 153,073 | ||
| 6,600,822 | 4,950,874 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 317 -
4 Notes to the consolidated financial statements (Cont’d)
(61) Notes to the cash flow statement (Cont’d)
(b) Cash paid relating to other operating activities
| 2021 | 2020 | |||
| Selling and distribution expenses (excluding employee benefits and taxes and surcharges) | 22,917,401 | 22,851,294 | ||
| General and administrative expenses and R&D expenses (excluding employee benefits and taxes and surcharges) | 10,886,493 | 10,305,790 | ||
| Others | 421,836 | 1,276,110 | ||
| 34,225,730 | 34,433,194 |
(c) Supplementary information to the cash flow statement
Reconciliation of net profit to cash flows from operating activities is as follows:
| 2021 | 2020 | |||
| Net profit | 29,015,376 | 27,506,542 | ||
| Add: Asset impairment losses | 483,420 | 705,209 | ||
| Credit impairment losses | 383,451 | 247,605 | ||
| Depreciation and amortisation | 6,182,852 | 5,020,256 | ||
| (Gains)/Losses on disposal of assets | (58,257) | 60,523 | ||
| Gains or losses on changes in fair value | 166,406 | (1,762,950) | ||
| Financial income | (3,119,978) | (1,714,530) | ||
| Investment income | (2,365,773) | (2,362,462) | ||
| Increase in deferred tax assets | (779,754) | (1,424,584) | ||
| (Decrease)/Increase in deferred tax liabilities | (647,495) | 625,273 | ||
| Increase in inventories | (15,201,834) | (1,803,072) | ||
| Increase in operating receivables | (5,453,539) | (16,538,695) | ||
| Increase in operating payables | 24,908,660 | 19,916,109 | ||
| Share-based payments and others | 1,578,169 | 1,081,893 | ||
| Net cash flows from operating activities | 35,091,704 | 29,557,117 | ||
| Net increase/(decrease) in cash and cash equivalents: | ||||
| Cash and cash equivalents at the end of the year | 40,550,039 | 23,548,508 | ||
| Less: Cash and cash equivalents at the beginning of the year | (23,548,508) | (30,441,760) | ||
| Net increase/(decrease) in cash and cash equivalents | 17,001,531 | (6,893,252) | ||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 318 -
4 Notes to the consolidated financial statements (Cont’d)
(61) Notes to the cash flow statement (Cont’d)
(d) Cash payments relating to other financing activities
| 31 December 2021 | 31 December 2020 | |||
| Repurchase of outstanding shares | 13,665,744 | 2,798,468 | ||
| Others | 1,564,540 | 530,266 | ||
| 15,230,284 | 3,328,734 | |||
(e) Composition of cash and cash equivalents
| 31 December 2021 | 31 December 2020 | |||
| Cash on hand | 1,609 | 2,538 | ||
| Cash at bank that can be readily drawn on demand | 17,923,603 | 14,185,834 | ||
| Deposits with the Central Bank that can be readily drawn on demand | 272,949 | 344,860 | ||
| Deposits with banks and other financial institutions that can be readily drawn on demand | 22,351,878 | 9,015,276 | ||
| Cash and cash equivalents at the end of the year | 40,550,039 | 23,548,508 | ||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 319 -
4 Notes to the consolidated financial statements (Cont’d)
(62) Monetary items denominated in foreign currencies
| 31 December 2021 | ||||||
| Foreign currency balance | Exchange rate | RMB balance | ||||
| Cash at bank and on hand | ||||||
| USD | 602,212 | 6.3757 | 3,839,525 | |||
| JPY | 12,142,726 | 0.0554 | 672,707 | |||
| HKD | 1,630,997 | 0.8176 | 1,333,503 | |||
| EUR | 148,197 | 7.2197 | 1,069,937 | |||
| BRL | 289,406 | 1.1425 | 330,646 | |||
| VND | 448,073,333 | 0.0003 | 134,422 | |||
| Other currencies | Not applicable | Not applicable | 1,452,778 | |||
| Sub-total | 8,833,518 | |||||
| Accounts receivable | ||||||
| USD | 1,060,053 | 6.3757 | 6,758,578 | |||
| JPY | 11,614,937 | 0.0554 | 643,468 | |||
| HKD | 23,316 | 0.8176 | 19,063 | |||
| EUR | 394,600 | 7.2197 | 2,848,894 | |||
| BRL | 635,016 | 1.1425 | 725,506 | |||
| VND | 1,722,254,244 | 0.0003 | 516,676 | |||
| Other currencies | Not applicable | Not applicable | 2,475,054 | |||
| Sub-total | 13,987,239 | |||||
| Other receivables | ||||||
| USD | 175,560 | 6.3757 | 1,119,315 | |||
| JPY | 1,379,057 | 0.0554 | 76,400 | |||
| HKD | 1,901 | 0.8176 | 1,555 | |||
| EUR | 43,768 | 7.2197 | 315,990 | |||
| BRL | 67,455 | 1.1425 | 77,067 | |||
| Other currencies | Not applicable | Not applicable | 328,047 | |||
| Sub-total | 1,918,374 | |||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 320 -
4 Notes to the consolidated financial statements (Cont’d)
(62) Monetary items dominated in foreign currencies (Cont’d)
| 31 December 2021 | ||||||
| Foreign currency balance | Exchange rate | RMB balance | ||||
| Short-term borrowings | ||||||
| USD | 200,000 | 6.3757 | 1,275,140 | |||
| EUR | 149,976 | 7.2197 | 1,082,782 | |||
| Other currencies | Not applicable | Not applicable | 185,393 | |||
| Sub-total | 2,543,315 | |||||
| Accounts payable | ||||||
| USD | 330,786 | 6.3757 | 2,108,991 | |||
| JPY | 5,227,130 | 0.0554 | 289,583 | |||
| HKD | 12,987 | 0.8176 | 10,618 | |||
| EUR | 219,900 | 7.2197 | 1,587,612 | |||
| BRL | 370,864 | 1.1425 | 423,712 | |||
| Other currencies | Not applicable | Not applicable | 1,845,979 | |||
| Sub-total | 6,266,495 | |||||
| Other payables | ||||||
| USD | 7,124 | 6.3757 | 45,423 | |||
| JPY | 7,415,640 | 0.0554 | 410,826 | |||
| HKD | 10,577 | 0.8176 | 8,648 | |||
| EUR | 2,410 | 7.2197 | 17,401 | |||
| Other currencies | Not applicable | Not applicable | 127,366 | |||
| Sub-total | 609,664 | |||||
| Current portion of non-current liabilities | ||||||
| EUR | 3,824,888 | 7.2197 | 27,614,541 | |||
| USD | 89,993 | 6.3757 | 573,767 | |||
| Other currencies | Not applicable | Not applicable | 115,468 | |||
| Sub-total | 28,303,776 | |||||
| Long-term borrowings | ||||||
| USD | 49,910 | 6.3757 | 318,208 | |||
| EUR | 421,000 | 7.2197 | 3,039,494 | |||
| JPY | 69,460,000 | 0.0554 | 3,849,126 | |||
| Other currencies | Not applicable | Not applicable | 17,292 | |||
| Sub-total | 7,224,120 | |||||
| Lease liabilities | ||||||
| EUR | 95,154 | 7.2197 | 686,986 | |||
| JPY | 1,965,358 | 0.0554 | 108,881 | |||
| Other currencies | Not applicable | Not applicable | 45,337 | |||
| Sub-total | 841,204 | |||||
Foreign currencies in which the above monetary items are denominated refer to allcurrencies other than RMB.
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
-321 -
4 Notes to the consolidated financial statements (Cont’d)
(62)Monetary items dominated in foreign currencies (Cont’d)
| 31 December 2020 | ||||
| Foreign currency balance | Exchange rate | RMB balance | ||
| Cash at bank and on hand | ||||||
| USD | 606,052 | 6.5249 | 3,954,427 | |||
| JPY | 12,604,953 | 0.0632 | 796,633 | |||
| HKD | 2,415,846 | 0.8416 | 2,033,176 | |||
| EUR | 118,549 | 8.0250 | 951,354 | |||
| BRL | 285,067 | 1.2556 | 357,930 | |||
| VND | 508,313,333 | 0.0003 | 152,494 | |||
| Other currencies | Not applicable | Not applicable | 1,422,214 | |||
| Sub-total | 9,668,228 |
| Accounts receivable | ||||||
| USD | 1,275,071 | 6.5249 | 8,319,713 | |||
| JPY | 12,798,608 | 0.0632 | 808,872 | |||
| HKD | 11,535 | 0.8416 | 9,708 | |||
| EUR | 361,026 | 8.0250 | 2,897,230 | |||
| BRL | 677,500 | 1.2556 | 850,669 | |||
| VND | 2,435,706,667 | 0.0003 | 730,712 | |||
| Other currencies | Not applicable | Not applicable | 2,034,429 | |||
| Sub-total | 15,651,333 |
| Other receivables | ||||||
| USD | 144,189 | 6.5249 | 940,820 | |||
| JPY | 1,329,367 | 0.0632 | 84,016 | |||
| HKD | 10,903 | 0.8416 | 9,176 | |||
| EUR | 55,540 | 8.0250 | 445,707 | |||
| BRL | 179,288 | 1.2556 | 225,114 | |||
| Other currencies | Not applicable | Not applicable | 253,468 | |||
| Sub-total | 1,958,301 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 322 -
4 Notes to the consolidated financial statements (Cont’d)
(62) Monetary items dominated in foreign currencies (Cont’d)
| 31 December 2020 | ||||||
| Foreign currency balance | Exchange rate | RMB balance | ||||
| Short-term borrowings | ||||||
| USD | 280,000 | 6.5249 | 1,826,972 | |||
| EUR | 154,489 | 8.0250 | 1,239,777 | |||
| BRL | 105,884 | 1.2556 | 132,948 | |||
| Other currencies | Not applicable | Not applicable | 122,280 | |||
| Sub-total | 3,321,977 | |||||
| Accounts payable | ||||||
| USD | 280,661 | 6.5249 | 1,831,288 | |||
| JPY | 5,637,532 | 0.0632 | 356,292 | |||
| HKD | 14,244 | 0.8416 | 11,988 | |||
| EUR | 156,419 | 8.0250 | 1,255,266 | |||
| BRL | 222,265 | 1.2556 | 279,076 | |||
| Other currencies | Not applicable | Not applicable | 1,656,574 | |||
| Sub-total | 5,390,484 | |||||
| Other payables | ||||||
| USD | 12,737 | 6.5249 | 83,109 | |||
| JPY | 7,245,791 | 0.0632 | 457,934 | |||
| HKD | 7,272 | 0.8416 | 6,120 | |||
| EUR | 1,182 | 8.0250 | 9,485 | |||
| Other currencies | Not applicable | Not applicable | 173,688 | |||
| Sub-total | 730,336 | |||||
| Current portion of non-current liabilities | ||||||
| USD | 3,769 | 6.5249 | 24,593 | |||
| EUR | 276,000 | 8.0250 | 2,214,900 | |||
| Other currencies | Not applicable | Not applicable | 22,833 | |||
| Sub-total | 2,262,326 | |||||
| Long-term borrowings | ||||||
| USD | 140,061 | 6.5249 | 913,886 | |||
| EUR | 3,944,261 | 8.0250 | 31,652,691 | |||
| JPY | 69,460,000 | 0.0632 | 4,392,373 | |||
| Other currencies | Not applicable | Not applicable | 3,039 | |||
| Sub-total | 36,961,989 | |||||
Foreign currencies in which the above monetary items are denominated refer to allcurrencies other than RMB.
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
-323 -
| 5 | Changes of consolidation scope |
(1)
| (1) | Business combinations involving enterprises not under common control |
(a)
| (a) | Business combinations involving enterprises not under common control in the current year |
The Group acquired Hitachi Compressor (Thailand) Ltd., in March 2021 and WandongMedical in May 2021.The above acquisitions had no significant impact on the Group's consolidated financialstatements.
| (2) | Changes of consolidation scope due to other reasons |
(a)
| (a) | Increase of consolidation scope |
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hainan Midea International LogisticsTechnology Co., Ltd. in January 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hainan Midea Household Kitchen ApplianceManufacturing Co., Ltd. in January 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hainan Midea HVAC Equipment Co., Ltd. inJanuary 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hainan Meizhi Canghai E-commerceServices Co., Ltd. in January 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hainan Meizhi Hangjian Electric ApplianceCo., Ltd. in January 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hainan Zhiwei Electric Appliance Co., Ltd.in January 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established MiSiliconn Semiconductor Technologies Co.,Ltd. in January 2021, holding 95% and 5% of the shares respectively.The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Midea Family Cultural Creativity &Technologies (Shanghai) Corporation in January 2021, holding 95% and 5% of the sharesrespectively.Guangdong Welling Motor Manufacturing Co., Ltd., a wholly-owned subsidiary of theCompany, established Hainan Welling Motor Sales Co., Ltd. in January 2021, holding 100%of the shares.Midea Electrics Netherlands B.V., a wholly-owned subsidiary of the Company, establishedMeco Innovations Technology, LLC in January 2021, holding 100% of the shares.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 324 -
| 5 | Changes of consolidation scope (Cont’d) |
| (2) | Changes in consolidation scope due to other reasons (Cont'd) |
| (a) | Increase of consolidation scope (Cont'd) |
Annto Logistics Supply Chain Technology Co., Ltd. and Foshan Annto Logistics TechnologyCo., Ltd., the Company's subsidiaries, established Hainan Annto Logistics Supply ChainManagement Co., Ltd. in January 2021, holding 99% and 1% of the shares respectively.
Wuxi Little Swan Electric Co., Ltd. and Foshan Midea Air-conditioning Industry InvestmentCo., Ltd., the Company's wholly-owned subsidiaries, established Hainan Midea Refrigerator& Laundry Appliance Sales Co., Ltd. in January 2021, holding 95% and 5% of the sharesrespectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Midea (Beijing) Technology Group Co., Ltd.in February 2021, holding 95% and 5% of the shares respectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Midea (Hainan) Cross-border E-commerceCo., Ltd. in February 2021, holding 95% and 5% of the shares respectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Midea Investment Co., Ltd. in February2021, holding 90% and 10% of the shares respectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Wuhu Midea Smart Kitchen AppliancesManufacturing Co., Ltd. in February 2021, holding 95% and 5% of the shares respectively.
Foshan Shunde Midea Household Appliances Industry Co., Ltd., a wholly-owned subsidiaryof the Company, and Foshan Shunde Shunsheng Investment Development Co., Ltd.,established Guangdong Midea Supply Chain Finance Co., Ltd. in March 2021, holding 85%and 15% of the shares respectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Handan Midea Smart Kitchen AppliancesManufacturing Co., Ltd. in March 2021, holding 95% and 5% of the shares respectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hefei Midea Biomedical Co., Ltd. in March2021, holding 95% and 5% of the shares respectively.
Midea Group (Shanghai) Co., Ltd., a wholly-owned subsidiary of the Company, establishedZhejiang Meiqin Maternity & Baby Products Co., Ltd. in March 2021, holding 100% of theshares.
Midea Group (Shanghai) Co., Ltd., a wholly-owned subsidiary of the Company, establishedZhejiang Meixin Pet Technology Co., Ltd. in March 2021, holding 100% of the shares.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Midea (Hangzhou) E-commerce Co., Ltd. inApril 2021, holding 95% and 5% of the shares respectively.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 325 -
| 5 | Changes of consolidation scope (Cont’d) |
| (2) | Changes in consolidation scope due to other reasons (Cont'd) |
| (a) | Increase of consolidation scope (Cont'd) |
Guangdong Meicloud Technology Co., Ltd., the Company’s subsidiary, established WuhanMidea Cloud Technology Co., Ltd. in April 2021, holding 100% of the shares.
Foshan Shunde Midea Household Appliances Industry Co., Ltd., and Foshan Midea Air-conditioning Industry Investment Co., Ltd., the Company’s wholly-owned subsidiaries,established Tianjin Midea Financial Leasing Co., Ltd. in May 2021, holding 95% and 5% ofthe shares respectively.
Swisslog Malaysia Sdn Bhd and Swisslog Singapore Pte Ltd., the Company's subsidiaries,established PT Swisslog Logistics Automation in May 2021, holding 99% and 1% of theshares respectively.
The Company and Foshan Midea Air-conditioning Industry Investment Co., Ltd., a wholly-owned subsidiary of the Company, established Hubei Midea Commercial RefrigerationEquipment Co., Ltd. in June 2021, holding 95% and 5% of the shares respectively.
The Company and Midea Group (Shanghai) Co., Ltd., a wholly-owned subsidiary of theCompany, established Guangdong Jiya Precision Machinery Technology Co., Ltd. in July2021, holding 90% and 10% of the shares respectively.
Wuxi Little Swan Electric Co., Ltd. and Foshan Midea Air-conditioning Industry InvestmentCo., Ltd., the Company's wholly-owned subsidiaries, established Little Swan (Wuxi) Cross-border E-commerce Co., Ltd. in July 2021, holding 95% and 5% of the shares respectively.
Midea Group (Shanghai) Co., Ltd. and Foshan Midea Air-conditioning Industry InvestmentCo., Ltd., the Company's wholly-owned subsidiaries, established Eureka IntelligentTechnology Co., Ltd. in August 2021, holding 95% and 5% of the shares respectively.
Guangdong Meicloud Technology Co., Ltd., a wholly-owned subsidiary of the Company,established Suzhou Midea Cloud Technology Co., Ltd. in September 2021, holding 100% ofthe shares.
Midea Group (Shanghai) Co., Ltd. and Foshan Midea Air-conditioning Industry InvestmentCo., Ltd., the Company's wholly-owned subsidiaries, established Hubei Midea BuildingTechnology Co., Ltd. in November 2021, holding 95% and 5% of the shares respectively.
Midea Group (Shanghai) Co., Ltd. and Foshan Midea Air-conditioning Industry InvestmentCo., Ltd., the Company's wholly-owned subsidiaries, established Meminent Science andTechnology Co., Ltd. in November 2021, holding 95% and 5% of the shares respectively.
Beijing Hiconics Eco-energy Frequency Conversion Technology Co., Ltd., the Company’ssubsidiary, established Wuhu Jumei New Energy Co., Ltd. in November 2021, holding 100%of the shares.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 326 -
| 5 | Changes of consolidation scope (Cont’d) |
| (2) | Changes in consolidation scope due to other reasons (Cont'd) |
| (a) | Increase of consolidation scope (Cont'd) |
Western-style Electric Products Company, a wholly-owned subsidiary of the Company,established Hangzhou Long-termism Tech Co., Ltd. in December 2021, holding 100% of theshares.
Maytech Technology Co., LTD., the Company’s subsidiary, established Midea RobometaTechnology Co., Ltd. in December 2021, holding 100% of the shares.
| (b) | Decrease of consolidation scope |
Decrease of consolidation scope in the current year mainly includes deregistration ofsubsidiaries. Details are as follows:
| Name of company | Disposal method of the equity | Disposal time-point of the equity |
| Reis Espana S.L. | Deregistration | January 2021 |
| Hiconics International Financial Leasing Co., Ltd. | Change of equity | January 2021 |
| Beijing Ruihe New Energy Technology Co., Ltd. | Change of equity | January 2021 |
| Jiangsu Little Swan Marketing and Sales Co., Ltd. | Deregistration | March 2021 |
| Wuhan Hiconics Intelligent Electric Co., Ltd. | Change of equity | March 2021 |
| Guangzhou Chang Dee Technology Co., Ltd. | Change of equity | March 2021 |
| Wuhan Hiconics Power Technology Co., Ltd. | Change of equity | April 2021 |
| Wuxi Little Swan Import and Export Co., Ltd. | Deregistration | June 2021 |
| Toshiba Home Appliances Manufacturing (Shenzhen) Co., Ltd. | Deregistration | June 2021 |
| Zhengzhou Chang Dee Technology Co., Ltd. | Change of equity | June 2021 |
| Hangzhou Fields Technology Co., Ltd. | Deregistration | June 2021 |
| Pingdingshan Changdi Technology Co., Ltd. | Change of equity | August 2021 |
| Sloan Elevator (Guangdong) Co., Ltd. | Deregistration | August 2021 |
| Changzhou Honglu Huate Motor Co., Ltd. | Deregistration | September 2021 |
| Shenzhen Sunye Electric Co., Ltd. | Deregistration | September 2021 |
| Ningbo Annto Logistics Technology Co., Ltd. | Deregistration | December 2021 |
| Changzhou Welling Motor Manufacturing Co., Ltd. | Deregistration | December 2021 |
| Reis GmbH | Deregistration | December 2021 |
| Verwaltungsgesellschaft Walter Reis GmbH | Deregistration | December 2021 |
| Walter Reis GmbH&Co KG | Deregistration | December 2021 |
| KUKA Industries GmbH & Co. KG | Deregistration | December 2021 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 327 -
6 Interests in other entities
(1) Interests in subsidiaries
(a) Composition of significant subsidiaries
| Subsidiaries | Major business location | Place of registration | Nature of business | Shareholding (%) | Acquisition method | |
| Direct | Indirect | |||||
| GD Midea Air-Conditioning Equipment Co., Ltd. | Foshan, PRC | Foshan, PRC | Manufacture and sales of air conditioner | 73% | 7% | Business combinations involving enterprises not under common control |
| GD Midea Group Wuhu Air-Conditioning Equipment Co., Ltd. | Wuhu, PRC | Wuhu, PRC | Manufacture and sales of air conditioner | 93% | 7% | Business combinations involving enterprises not under common control |
| Midea Group Wuhan Refrigeration Equipment Co., Ltd. | Wuhan, PRC | Wuhan, PRC | Manufacture of air conditioner | 73% | 7% | Establishment |
| Wuhu Maty Air-Conditioning Equipment Co., Ltd. | Wuhu, PRC | Wuhu, PRC | Manufacture of air conditioner | 87% | 13% | Establishment |
| Chongqing Midea Air-Conditioning Equipment Co., Ltd. | Chongqing, PRC | Chongqing, PRC | Manufacture and sales of air conditioner | 95% | 5% | Establishment |
| GD Midea Heating & Ventilating Equipment Co., Ltd. | Foshan, PRC | Foshan, PRC | Manufacture of air conditioner | 90% | 10% | Establishment |
| Zhejiang Meizhi Compressor Co., Ltd. | Ningbo, PRC | Ningbo, PRC | Manufacture of air conditioner | 100% | - | Establishment |
| Hefei Midea Refrigerator Co., Ltd. | Hefei, PRC | Hefei, PRC | Manufacture of refrigerator | 75% | 25% | Business combinations involving enterprises not under common control |
| Hefei Hualing Co., Ltd. | Hefei, PRC | Hefei, PRC | Manufacture of refrigerator | 75% | 25% | Business combinations involving enterprises not under common control |
| Guangdong Midea Kitchen Appliances Manufacturing Co., Ltd. | Foshan, PRC | Foshan, PRC | Manufacture of small household appliances | - | 100% | Establishment |
| Foshan Shunde Midea Electrical Heating Appliances Manufacturing Co., Ltd. | Foshan, PRC | Foshan, PRC | Manufacture of small household appliances | - | 100% | Establishment |
| Wuhu Midea Kitchen & Bath Appliances Mfg. Co., Ltd. | Wuhu, PRC | Wuhu, PRC | Manufacture of small household appliances | 90% | 10% | Business combination involving enterprises under common control |
| Wuxi Little Swan Electric Co., Ltd. | Wuxi, PRC | Wuxi, PRC | Manufacture of washing machine | 100% | - | Establishment |
| Midea Electric Trading (Singapore) Co., Pte. Ltd. | Singapore | Singapore | Export trade | - | 100% | Establishment |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 328 -
6 Interests in other entities (Cont'd)
(1) Interests in subsidiaries (Cont'd)
(a) Composition of significant subsidiaries (Cont'd)
| Subsidiaries | Major business location | Place of registration | Nature of business | Shareholding (%) | Acquisition method | |
| Direct | Indirect | |||||
| Midea Group Finance Co., Ltd. | Foshan, PRC | Foshan, PRC | Financial industry | 95% | 5% | Establishment |
| Midea Microfinance Loan Co., Ltd. | Wuhu, PRC | Wuhu, PRC | Petty loan | 5% | 95% | Business combinations involving enterprises not under common control |
| Mecca International (BVI) Limited | British Virgin Islands | British Virgin Islands | Investment holding | - | 100% | Establishment |
| Midea International Corporation Company Limited | Hong Kong | Hong Kong | Investment holding | 100% | - | Establishment |
| Wuhu Midea Life Appliances Mfg Co., Ltd. | Wuhu, PRC | Wuhu, PRC | Manufacture of small household appliances | 100% | - | Establishment |
| Midea Electric Netherlands (I) B.V. | Netherlands | Netherlands | Investment holding | - | 100% | Establishment |
| Toshiba Consumer Marketing Corporation | Japan | Japan | Manufacture of home appliances | - | 100% | Business combinations involving enterprises not under common control |
| TLSC | Japan | Japan | Manufacture of home appliances | - | 100% | Business combinations involving enterprises not under common control |
| KUKA | Germany | Germany | Manufacture and sales of robots | - | 95% | Business combinations involving enterprises not under common control |
| Ningbo Midea United Materials Supply Co., Ltd. | Ningbo, PRC | Ningbo, PRC | Wholesale and retail | 100% | - | Establishment |
| Wuhu Midea Annto Logistics Co., Ltd. | Wuhu, PRC | Wuhu, PRC | Logistics | - | 76% | Establishment |
| Midea Innovation Investment Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Investment holding | 85% | 15% | Establishment |
| Midea Group (Shanghai) Co. Ltd. | Shanghai, PRC | Shanghai, PRC | Manufacture and sales of household appliances | 90% | 10% | Establishment |
| Chongqing Midea Commercial Factoring Co., Ltd. | Chongqing, PRC | Chongqing, PRC | Factoring | - | 100% | Establishment |
| Tianjin Midea Commercial Factoring Co., Ltd. | Tianjin, PRC | Tianjin, PRC | Factoring | - | 100% | Establishment |
| Midea Investment Co., Ltd. | Hainan, PRC | Hainan, PRC | Investment | 90% | 10% | Establishment |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 329 -
6 Interests in other entities (Cont'd)
(2) Interest in associates
The Group’s associates have no significant influence on the Group and are summarised asfollows:
| 2021 | 2020 | |||
| Aggregated carrying amount of investments | 3,796,705 | 2,901,337 | ||
| Aggregate of the following items in proportion | ||||
| Net profit (i) | 560,679 | 402,528 | ||
| Other comprehensive income (i) | (3,032) | (20,445) | ||
| Total comprehensive income | 557,647 | 382,083 |
| (i) The net profit and other comprehensive income have taken into account the impacts of both the fair value of the identifiable assets and liabilities upon the acquisition of investment in associates and the unification of accounting policies adopted by the associates to those adopted by the Company. | |
| (ii) The adoption of the new financial instruments standards, new revenue standard and new lease standard by the Group’s associates exerted no significant impact on the opening balances of the financial statements for the year ended 31 December 2021. | |
7 Segment information
The reportable segments of the Group are the business units that provide different productsor service, or operate in different areas. Different businesses or areas require differenttechnologies and marketing strategies, the Group, therefore, separately manages theproduction and operation of each reportable segment and evaluates their operating resultsrespectively, in order to make decisions about resources to be allocated to these segmentsand to assess their performance.
The Group identified 4 reportable segments as follows
- Heating & ventilation, as well as air-conditioner- Consumer appliances- Robotics and automation system- Others
Inter-segment transfer prices are determined based on negotiation by both parties withreference to selling prices for third parties.
The assets are allocated based on the operations of the segments and the physical locationsof the assets. The liabilities are allocated based on the operations of the segments.Expenses indirectly attributable to each segment are allocated to the segments based onthe proportion of each segment’s revenue.
Operating expenses include cost of sales, interest costs, fee and commission expenses,taxes and surcharges, selling and distribution expenses, general and administrativeexpenses, R&D expenses and financial income.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 330 -
8 Segment reporting
(a) Information on the profit or loss, assets and liabilities of reported segment
Segment information as at and for the year ended 31 December 2021 is as follows:
| Heating & ventilation, as well as air-conditioner | Consumer appliances | Robotics and automation system | Other segments and unallocated | Elimination | Total | ||
| Revenue from external customers | 165,428,603 | 140,406,787 | 27,545,334 | 9,980,101 | - | 343,360,825 | |
| Inter-segment revenue | 3,548,892 | 497,761 | 255,284 | 8,032,181 | (12,334,118) | - | |
| Operating expenses | (155,063,889) | (127,385,637) | (27,349,260) | (15,285,750) | 12,306,649 | (312,777,887) | |
| Segment profit | 13,913,606 | 13,518,911 | 451,358 | 2,726,532 | (27,469) | 30,582,938 | |
| Other profit or loss | 3,134,606 | ||||||
| Total profit | 33,717,544 | ||||||
| Total assets | 159,934,918 | 150,200,053 | 34,442,640 | 186,546,737 | (143,178,244) | 387,946,104 | |
| Total liabilities | 116,536,045 | 115,848,036 | 23,383,691 | 167,205,006 | (169,851,750) | 253,121,028 | |
| Long-term equity investments in associates | 312,249 | 109,982 | 36,564 | 3,337,910 | - | 3,796,705 | |
| Investment income from associates | 185,835 | 5,976 | 2,182 | 366,686 | - | 560,679 | |
| Increase in non-current assets (excluding long-term equity investments, financial assets, goodwill and deferred tax assets) | 4,946,978 | 2,923,405 | 981,504 | 3,996,272 | - | 12,848,159 | |
| Asset impairment losses | 85,227 | 292,077 | 95,462 | 10,654 | - | 483,420 | |
| Losses on/(Reversal of) credit impairment | 76,301 | (84,444) | 82,143 | 383,414 | (73,963) | 383,451 | |
| Depreciation of right-of-use assets | 73,261 | 163,480 | 275,105 | 400,612 | - | 912,458 | |
| Depreciation and amortisation | 2,075,059 | 1,441,245 | 1,161,783 | 592,307 | - | 5,270,394 |
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
-331 -
8 Segment reporting (Cont'd)(a)Information on the profit or loss, assets and liabilities of reported segment (Cont'd)
Segment information as at and for the year ended 31 December 2020 is as follows:
| Heating & ventilation, as well as air-conditioner | Consumer appliances | Robotics and automation system | Other segments and unallocated | Elimination | Total |
Revenue from external customers
| Revenue from external customers | 137,750,899 | 120,229,314 | 21,743,789 | 5,985,727 | - | 285,709,729 |
| Inter-segment revenue | 2,969,649 | 417,949 | 174,762 | 7,504,091 | (11,066,451) | - |
| Operating expenses | (127,623,183) | (107,643,923) | (23,045,690) | (11,197,652) | 10,758,011 | (258,752,437) |
| Segment profit | 13,097,365 | 13,003,340 | (1,127,139) | 2,292,166 | (308,440) | 26,957,292 |
| Other profit or loss | 4,706,247 | |||||
| Total profit | 31,663,539 |
Total assets
| Total assets | 141,224,648 | 126,922,410 | 34,082,837 | 174,557,282 | (116,404,574) | 360,382,603 |
| Total liabilities | 100,386,504 | 100,604,599 | 24,094,633 | 150,399,172 | (139,339,405) | 236,145,503 |
Long-term equity investments in
associates
| Long-term equity investments in associates | 240,925 | 124,128 | 31,877 | 2,504,407 | - | 2,901,337 |
| Investment income from associates | 115,265 | 12,692 | (19,464) | 294,035 | - | 402,528 |
Increase in non-current assets
(excluding long-term equityinvestments, financial assets,goodwill and deferred tax assets)
| Increase in non-current assets (excluding long-term equity investments, financial assets, goodwill and deferred tax assets) | 2,958,978 | 1,558,622 | 1,872,743 | 352,374 | - | 6,742,717 |
Asset impairment losses
| Asset impairment losses | 22,389 | 252,621 | 424,710 | 5,489 | - | 705,209 |
| (Reversal of)/losses on credit impairment | (11,271) | (79,131) | 25,641 | 311,653 | 713 | 247,605 |
| Depreciation and amortisation | 1,660,118 | 1,629,611 | 1,104,376 | 626,151 | - | 5,020,256 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 332 -
8 Segment reporting (Cont'd)
(b) Geographical area information
The Group’s revenue from external customers domestically and in foreign countries orgeographical areas, and the total non-current assets other than long-term equityinvestments, financial assets, goodwill and deferred tax assets located domestically and inforeign countries or geographical areas (including Germany, Hong Kong, Singapore, Japan,the USA, Italy, South America, etc.) are as follows:
| Revenue from external customers | 2021 | 2020 | ||
| Domestic | 205,706,997 | 164,628,321 | ||
| In other countries/geographical areas | 137,653,828 | 121,081,408 | ||
| 343,360,825 | 285,709,729 | |||
| Total non-current assets | 31 December 2021 | 31 December 2020 | ||
| Domestic | 31,293,535 | 24,258,048 | ||
| In other countries/geographical areas | 16,863,065 | 17,715,088 | ||
| 48,156,600 | 41,973,136 |
In 2021 and 2020, revenue from each individual customer is lower than 10% of the Group’stotal revenue.
9 Related parties and significant related party transactions
(1) Information of the parent company
(a) General information of the parent company
| Name of the parent company | Relationship | Place of registration | Nature of business |
| Midea Holding Co., Ltd. | Controlling shareholder | Shunde District, Foshan | Commercial |
The Company’s ultimate controlling person is Mr. He Xiangjian.
(b) Registered capital and changes in registered capital of the parent company
| 31 December 2021 and | |
| 31 December 2020 | |
| Midea Holding Co., Ltd. | 330,000 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 333 -
9 Related parties and significant related party transactions (Cont’d)
(1) Information of the parent company (Cont'd)
(c) The percentages of shareholding and voting rights in the Company held by the parent
company
| 31 December 2021 | 31 December 2020 | ||||||||
| Shareholding (%) | Voting rights (%) | Shareholding (%) | Voting rights % | ||||||
| Direct | Indirect | Direct | Indirect | ||||||
| Midea Holding Co., Ltd. | 31.05% | - | 31.05% | 30.86% | - | 30.86% | |||
(2) Information of the Company's subsidiaries
Please refer to Note 6(1) for the information of the Company’s significant subsidiaries.
(3) Information of other related parties
| Name of other related parties | Relationship |
| Guangdong Wellkey Electrician Material Co., Ltd. | Under the common control of the direct relatives of the Company’s ultimate controlling shareholder within the past 12 months |
| Anhui Wellkey Electrician Material Co., Ltd. | Under the common control of the direct relatives of the Company’s ultimate controlling shareholder within the past 12 months |
| Orinko New Material Co., Ltd. | Under the common control of the direct relatives of the Company’s ultimate controlling shareholder |
| Guangdong Infore Material-Tech Co., Ltd. | Under the common control of the direct relatives of the Company’s ultimate controlling shareholder |
| Guangdong Ruizhu Intelligent Technology Co., Ltd. | Under the common control of the Company’s ultimate controlling shareholder |
| Foshan Micro Midea Filter Mfg. Co., Ltd | Associate of the Company |
| Guangdong Shunde Rural Commercial Bank Co., Ltd. | Associate of the Company |
(4) Information of related party transactions
The following primary related party transactions with major related parties are conducted inaccordance with normal commercial terms by both parties involved and by making referenceto the market price.
(a) Purchase of goods:
| Related parties | Content of related party transactions | 2021 | 2020 | ||
| Guangdong Wellkey Electrician Material Co., Ltd. | Purchase of goods | 958,908 | 708,793 | ||
| Foshan Micro Midea Filter Mfg. Co., Ltd | Purchase of goods | 358,641 | 312,860 | ||
| Anhui Wellkey Electrician Material Co., Ltd. | Purchase of goods | 522,549 | 242,408 | ||
| Orinko New Material Co., Ltd. | Purchase of goods | 1,506,809 | 1,238,817 | ||
| 3,346,907 | 2,502,878 |
MIDEA GROUP CO., LTD.NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
-334 -
9 Related parties and significant related party transactions (Cont’d)
(4)Information of related party transactions (Cont’d)
(b)Sales of goods
| Related parties | 2021 | 2020 |
| Content of related party transactions |
Guangdong RuizhuIntelligentTechnology Co., Ltd.
| Guangdong Ruizhu Intelligent Technology Co., Ltd. | Sales of goods | 202,625 | 198,903 |
(c)Investment income and interest income
| 2021 | 2020 |
Guangdong Shunde Rural Commercial Bank Co., Ltd.
| Guangdong Shunde Rural Commercial Bank Co., Ltd. | 223,659 | 130,457 |
(d)Remuneration of key management
| 2021 | 2020 |
Remuneration of key management
| Remuneration of key management | 83,530 | 76,940 |
(5)Balances with related parties
| 31 December 2021 | 31 December 2020 |
Cash at bank and on hand,
other debt investmentsand current portion ofnon-current assets, etc.
| Cash at bank and on hand, other debt investments and current portion of non-current assets, etc. | Guangdong Shunde Rural Commercial Bank Co., Ltd. | 6,218,638 | 3,653,592 |
31 December
2021
| 31 December 2021 | 31 December 2020 |
Accounts payable
| Accounts payable | Guangdong Wellkey Electrician Material Co., Ltd. | 186,309 | 133,290 | |
| Foshan Micro Midea Filter Mfg. Co., Ltd | 80,498 | 62,837 | ||
| Anhui Wellkey Electrician Material Co., Ltd. | 96,106 | 53,889 | ||
| Orinko New Material Co., Ltd. | 150,002 | 218,888 |
| Notes payable | Guangdong Wellkey Electrician Material Co., Ltd. | 54,613 | 52,246 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 335 -
10 Share-based payment
(1) Share option incentive plan
(a) Pursuant to the eighth share option incentive plan (the “Eighth Share Option Incentive Plan”)
approved at the 2020 annual shareholders’ meeting in 2021, the Company granted82,260,000 share options with exercise price of RMB 81.41 to 1,897 employees. Under thecircumstance that the Company meets expected performance, 30%, 30%, 40% of the totalshare options granted will become effective after 2 years, 3 years and 4 years respectivelysince 4 June 2021.
Determination method for fair value of share options at the grant date
| Exercise price of options: | RMB 81.41 |
| Effective period of options: | 5 years |
| Current price of underlying shares: | RMB 77.73 |
| Estimated fluctuation rate of share price: | 35.78% |
| Estimated dividend rate: | 2.42% |
| Risk-free interest rate within effective period of options: | 2.34% |
The fair value of the Eighth Share Option Incentive Plan calculated pursuant to the aboveparameters is: RMB 1,457,678,000.
(b) Movements in share options during the year
| 2021 | ||
| (Share in thousands) | ||
| Share options issued at the beginning of the year | 168,231 | |
| Share options granted during the year | 82,260 | |
| Share options exercised during the year | (34,437) | |
| Share options lapsed during the year | (17,284) | |
| Share options issued at the end of the year | 198,770 |
As at 31 December 2021, the residual contractual maturity date of the Fifth Share OptionIncentive Plan is on 6 May 2024. The residual contractual maturity date of the Fifth ReservedShare Option Incentive Plan is on 10 March 2025. The residual contractual maturity date ofthe Sixth Share Option Incentive Plan is on 29 May 2025. The residual contractual maturitydate of the Seventh Share Option Incentive Plan is on 4 June 2024. The residual contractualmaturity date of the Eighth Share Option Incentive Plan is 3 June 2026.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 336 -
10 Share-based payment (Cont'd)
(2) Restricted share plan
(a) Pursuant to the restricted shares incentive plan for 2021 approved at the 2020 annual
shareholders’ meeting in 2021 (the “Restricted Shares Incentive Plan for 2021”), theCompany granted 9,940,000 restricted shares with exercise price of RMB 39.92 to 139employees. Under the circumstance that the Company meets expected performance, 30%,30%, 40% of the total restricted shares granted will be unlocked after 2 years, 3 years and4 years respectively since 4 June 2021. The listing date for the granted restricted shares ofthis plan is 16 July 2021.
(b) Movements in restricted shares during the year
| 2021 | ||
| (Share in thousands) | ||
| Restricted shares issued at the beginning of the year | 74,082 | |
| Restricted shares granted during the year | 9,940 | |
| Restricted shares unlocked during the year | (15,882) | |
| Restricted shares lapsed during the year | (5,873) | |
| Restricted shares issued at the end of the year | 62,267 |
(3) Employee stock ownership plan
Pursuant to the seventh stock ownership plan of the Midea Global Partner Plan (the“Seventh Global Partner Plan”) approved at the shareholders' meeting for the year ended31 December 2020 held during the year 2021, the Company would purchase a total of2,436,518 shares of Midea Group from the secondary market, with an average purchaseprice of RMB 82.70 per share and the purchase fund was the special fund of approximatelyRMB 201,500,000 accrued by the Company. The Company then entrusted ChinaInternational Capital Corporation Limited (“CICC”) to provide an asset management plan.The lock-up period of shares under this plan is from 4 August 2021 to 4 August 2022.
Pursuant to the fourth stock ownership plan of the Midea Business Partner Plan (the “FourthBusiness Partner Plan”) approved at the shareholders' meeting for the year ended 31December 2020 held during the year 2021. The Company would purchase a total of1,985,611 shares of Midea Group from the secondary market, with an average purchaseprice of RMB 82.70 per share. The purchase fund was the special fund for the stockownership plan and part of performance bonus for management of approximately RMB164,210,000 in total accrued by the Company. The Company then entrusted CICC to providean asset management plan. The lock-up period of shares under this plan is from 13 August2021 to 13 August 2022.
(4) The total expenses due to the above share-based payment incentive plan, which were
granted, recognised for the year ended 31 December 2021 were approximately RMB1,578,070,000 (2020: RMB 1,077,550,000). As at 31 December 2021, the balance relatingto the share-based payment incentive plan and accrued from capital surplus wasapproximately RMB 2,161,354,000 (31 December 2020: RMB 1,414,842,000).
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 337 -
11 Contingencies
As at 31 December 2021, the amount in tax disputes involving Brazilian subsidiary with 51%interests held by the Company was about BRL 614 million (equivalent to about RMB 702million) (Some cases have lasted for more than 10 years. The above amount included theprincipal and interest). As at the date on which the financial statements were authorised forissue, relevant cases is still at court. With reference to judgements of third-party attorneys,management believes that the probability of losing lawsuits and making compensation issmall, and has accrued sufficient amount of provisions based on the probability of makingcompensation. In addition, original shareholders of Brazilian subsidiary have agreed tocompensate the Company according to verdict results of the above tax disputes. Themaximum compensation amount is about BRL 157 million (equivalent to RMB 179 million).
12 Commitments
(1) Capital commitments
Capital expenditures contracted for by the Group but are not yet necessary to be recognisedon the balance sheet as at the balance sheet date are as follows:
| 31 December 2021 | 31 December 2020 | |||
| Buildings, machinery and equipment | 5,990,809 | 2,896,245 |
13 Events after the balance sheet date
(1) Repurchased shares
Pursuant to the Proposal on the Scheme for the Repurchase of Certain Social Public Sharesapproved at the sixth meeting of the fourth Board of Directors dated 10 March 2022, theCompany is allowed to use its own funds to repurchase some of the Company’s sharesthrough centralised price bidding, with number of shares to be repurchased ranging from35,714,285 to 71,428,571 and purchase price not exceeding RMB 70 per share. Thescheme is to be implemented within 12 months from the date of approval by the Board ofDirectors. As at the date on which the financial statements were authorised for issue, theGroup has repurchased approximately 947,400 shares, and purchase price wasapproximately RMB 53,910,000.
(2) Overview of profit distribution
On 28 April 2022, on the basis of the total shares 6,869,123,038 to be distributed (totalexisting 6,997,053,441 shares net of repurchased 127,930,403 shares) of the Company, theBoard of Directors proposed a distribution of cash dividends of approximately RMB11,677,509,000 at RMB 17 every 10 shares (including tax). Such proposal is pending forapproval at the shareholders’ meeting. The distribution of cash dividends proposed after thebalance sheet date is not recognised as liabilities at the balance sheet date.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 338 -
14 Operating lease proceeds after the balance sheet date
As the lessor, the Group’s undiscounted lease proceeds receivable after the balance sheetdate are as follows:
| 31 December 2021 | |
| Within 1 year | 53,370 |
| 1 to 2 years | 52,871 |
| 2 to 3 years | 45,965 |
| 3 to 4 years | 44,678 |
| 4 to 5 years | 43,903 |
| Over 5 years | 501,571 |
| 742,358 |
15 Financial instruments and risks
The Group is exposed to various financial risks in the ordinary course of business, mainlyincluding:
? Market risk (mainly including foreign exchange risk, interest rate risk and other pricerisk)
? Credit risk? Liquidity risk
The following mainly relates to the above risk exposures and relevant causes, objectives,policies and process of risk management, method of risk measurement, etc.
The objective of the Group's risk management is to seek balance between risk and income,minimising the adverse impact of financial risks on the Group's financial performance.Pursuant to the risk management objective, the Group has made risk management policiesto identify and analyse the risks it is exposed to and set appropriate risk resistant level anddesign relevant internal control procedures to monitor the Group’s risk level. The Groupreviews regularly these risk management policies and relevant internal control systems toadapt to changes in market condition or its operating activities.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 339 -
15 Financial instruments and risks (Cont’d)
(1) Market risk
(a) Foreign exchange risk
The Group mainly operates in China, Europe, America, Asia, South America and Africa forthe manufacturing, sales, investments and financing activities. Any foreign currencydenominated monetary assets and liabilities other than in RMB would subject the Group toforeign exchange exposure.
The Group’s finance department at its headquarters has a professional team to manageforeign exchange risk, with approach of the natural hedge for settling currencies, signingforward foreign exchange hedging contracts and controlling the scale of foreign currencyassets and liabilities, to minimise foreign exchange risk, and to reduce the impact ofexchange rate fluctuations on business performance.
(b) Interest rate risk
The Group's interest rate risk arises from interest bearing borrowings including long-termborrowings. Financial liabilities issued at floating rates expose the Group to cash flowinterest rate risk. Financial liabilities issued at fixed rates expose the Group to fair valueinterest rate risk. The Group determines the relative proportions of its fixed rate and floatingrate contracts depending on the prevailing market conditions. As at 31 December 2021, theGroup’s long-term interest bearing borrowings at floating rates amounted to RMB891,817,000 (31 December 2020: RMB 933,886,000) (Note 4(36)).
The Group’s finance department at its headquarters continuously monitors the interest rateposition of the Group. Increases in interest rates will increase the cost of new borrowing andthe interest costs with respect to the Group’s outstanding floating rate borrowings, andtherefore could have a material adverse effect on the Group’s financial performance. TheGroup makes adjustments timely with reference to the latest market conditions and mayenter into interest rate swap agreements to mitigate its exposure to interest rate risk.
As at 31 December 2021, if the borrowing rate had risen or fallen by 50 base points whileother factors had been remained constant, the Group’s profit before tax would decrease orincrease by approximately RMB 4,459,000 (31 December 2020: RMB 4,669,000).
(c) Other price risk
The Group's other price risk arises mainly from financial assets held for trading (Note 4(2)),other non-current financial assets (Note 4(16)) and investments in other equity instrumentsmeasured at fair value. As at 31 December 2021, if expected price of the investments heldby the Group fluctuated, the Group's gains or losses on changes in fair value and othercomprehensive income would be affected accordingly.
As at 31 December 2021, if the Group’s expected price of equity instruments investmenthad risen or fallen by 10% while other factors had been remained constant, the Group wouldhave an increase or decrease in profit before tax amounting to approximately RMB723,234,000 (31 December 2020: approximately RMB 567,581,000), and an increase ordecrease in other comprehensive income amounting to approximately RMB 4,574,700 (31December 2020: approximately RMB 4,665,000).
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 340 -
15 Financial instruments and risks (Cont’d)
(2) Credit risk
Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bankand on hand, deposits with the Central Bank, deposits with banks and other financialinstitutions, notes receivable, accounts receivable, receivables financing, loans andadvances, other receivables, contract assets, lease receivables, other debt investments,other current assets, other non-current assets and derivative financial assets at fair valuethrough profit or loss that are not included in the impairment assessment scope.
The Group expects that there is no significant credit risk associated with cash at bank,deposits with the Central Bank and deposits with banks and other financial institutions sincethey are deposited at state-owned banks and other medium or large size listed banks withgood reputation and high credit rating. Management does not expect that there will be anysignificant losses from non-performance by these counterparties.
In addition, the Group has policies to limit the credit exposure on notes receivable, accountsreceivable, contract assets, loans and advances, other receivables, lease receivables, fixed-income products in other current assets, other debt investments and fixed-income productsin other non-current assets. The Group assesses the credit quality of and sets credit limitson its customers by taking into account their financial position, the availability of guaranteefrom third parties, their credit history and other factors such as current market conditions.The credit history of the customers is regularly monitored by the Group. In respect ofcustomers with a poor credit history, the Group will use written payment reminders, orshorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to acontrollable extent.
As at 31 December 2021, the Group had no significant collateral or other creditenhancements held as a result of the debtor's mortgage (31 December 2020: Nil).
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by theGroup’s finance department in its headquarters. The Group’s finance department at itsheadquarters monitors rolling forecasts of the Group's short-term and long-term liquidityrequirements to ensure it has sufficient cash and securities that are readily convertible tocash to meet operational needs, while maintaining sufficient headroom on its undrawncommitted borrowing facilities from major financial institutions so that the Group does notbreach borrowing limits or covenants on any of its borrowing facilities to meet the short-termand long-term liquidity requirements
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 341 -
15 Financial instruments and risks (Cont’d)
(3) Liquidity risk (Cont'd)
The financial liabilities of the Group at the balance sheet date are analysed by their maturitydate below at their undiscounted contractual cash flows :
| 31 December 2021 | ||||||||||
| Within 1 year | 1 to 2 years | 2 to 5 years | Over 5 years | Total | ||||||
| Short-term borrowings (including interest) | 5,420,066 | - | - | - | 5,420,066 | |||||
| Borrowings from Central Bank (including interest) | 180,000 | - | - | - | 180,000 | |||||
| Customer deposits and deposits from banks and other financial institutions (including interest) | 78,235 | - | - | - | 78,235 | |||||
| Notes payable | 32,752,007 | - | - | - | 32,752,007 | |||||
| Accounts payable | 65,983,559 | - | - | - | 65,983,559 | |||||
| Other payables | 4,288,104 | - | - | - | 4,288,104 | |||||
| Derivative financial liabilities | 157,602 | - | - | - | 157,602 | |||||
| Other current liabilities | 16,920,200 | - | - | - | 16,920,200 | |||||
| Current portion of non-current liabilities (including interest) | 28,995,245 | - | - | - | 28,995,245 | |||||
| Long-term borrowings (including interest) | 409,056 | 6,656,015 | 13,726,837 | - | 20,791,908 | |||||
| Lease liabilities (including interest) | - | 667,710 | 879,105 | 143,316 | 1,690,131 | |||||
| Other non-current liabilities | - | - | 687,689 | - | 687,689 | |||||
| 155,184,074 | 7,323,725 | 15,293,631 | 143,316 | 177,944,746 | ||||||
| 31 December 2020 | ||||||||||
| Within 1 year | 1 to 2 years | 2 to 5 years | Over 5 years | Total | ||||||
| Short-term borrowings (including interest) | 10,033,656 | - | - | - | 10,033,656 | |||||
| Customer deposits and deposits from banks and other financial institutions (including interest) | 87,596 | - | - | - | 87,596 | |||||
| Notes payable | 28,249,939 | - | - | - | 28,249,939 | |||||
| Accounts payable | 53,930,261 | - | - | - | 53,930,261 | |||||
| Other payables | 4,501,391 | - | - | - | 4,501,391 | |||||
| Derivative financial liabilities | 161,225 | - | - | - | 161,225 | |||||
| Other current liabilities (including interest) | 18,661,350 | - | - | - | 18,661,350 | |||||
| Current portion of non-current liabilities (including interest) | 6,355,016 | - | - | - | 6,355,016 | |||||
| Long-term borrowings (including interest) | 557,805 | 31,435,123 | 12,002,785 | - | 43,995,713 | |||||
| Long-term payables | - | 8,870 | 4,390 | - | 13,260 | |||||
| Other non-current liabilities | - | - | 692,986 | - | 692,986 | |||||
| 122,538,239 | 31,443,993 | 12,700,161 | - | 166,682,393 | ||||||
(i) As at the balance sheet date, the Group did not provide financial guarantees to external
parties or loan commitments to related parties.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 342 -
16 Fair value estimates
The level in which fair value measurement is categorised is determined by the level of thefair value hierarchy of the lowest level input that is significant to the entire fair valuemeasurement:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for theasset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
(1) Assets and liabilities measured at fair value on a recurring basis
As at 31 December 2021, the financial assets and liabilities measured at fair value on arecurring basis by the above three levels are analysed below:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Financial assets measured at fair value - | ||||||||
| Financial assets held for trading | 1,319,470 | 4,559,732 | - | 5,879,202 | ||||
| Derivative financial assets | - | 545,865 | - | 545,865 | ||||
| Receivables financing | - | 10,273,552 | - | 10,273,552 | ||||
| Other current assets - hedging instruments and transferable certificate of deposit | - | 982,965 | - | 982,965 | ||||
| Other debt investments | - | 27,254,307 | - | 27,254,307 | ||||
| Investments in other equity instruments | - | - | 45,747 | 45,747 | ||||
| Other non-current financial assets | - | - | 5,912,873 | 5,912,873 | ||||
| Total assets | 1,319,470 | 43,616,421 | 5,958,620 | 50,894,511 | ||||
| Financial liabilities measured at fair value - | ||||||||
| Derivative financial liabilities | - | 157,602 | - | 157,602 | ||||
| Other financial liabilities - hedging instruments | - | 9,047 | - | 9,047 | ||||
| Total liabilities | - | 166,649 | - | 166,649 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 343 -
16 Fair value estimates (Cont'd)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont’d)
As at 31 December 2020, the financial assets and liabilities measured at fair value on arecurring basis by the above three levels are analysed below:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Financial assets measured at fair value - | ||||||||
| Financial assets held for trading | 2,324,965 | 25,914,636 | - | 28,239,601 | ||||
| Derivative financial assets | - | 420,494 | - | 420,494 | ||||
| Receivables financing | - | 13,901,856 | - | 13,901,856 | ||||
| Other current assets - hedging instruments | - | 767,934 | - | 767,934 | ||||
| Other debt investments | - | 21,456,155 | - | 21,456,155 | ||||
| Investments in other equity instruments | - | - | 46,651 | 46,651 | ||||
| Other non-current financial assets | - | - | 3,360,849 | 3,360,849 | ||||
| Total assets | 2,324,965 | 62,461,075 | 3,407,500 | 68,193,540 | ||||
| Financial liabilities measured at fair value - | ||||||||
| Derivative financial liabilities | - | 161,225 | - | 161,225 | ||||
| Other financial liabilities - hedging instruments | - | 19,511 | - | 19,511 | ||||
| Total liabilities | - | 180,736 | - | 180,736 |
The Group takes the date on which events causing the transfers between the levels takeplace as the timing specific for recognising the transfers. There was no significant transferof fair value measurement level of the above financial instruments among the three levels.
The fair value of financial instruments traded in an active market is determined at the quotedmarket price; and the fair value of those not traded in an active market is determined by theGroup using valuation technique. The valuation models used mainly comprise discountedcash flow model and market comparable corporate model. Inputs of valuation techniquemainly comprise risk-free interest rate, estimated interest rate and estimated annual yield.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 344 -
16 Fair value estimates (Cont'd)
(1) Assets and liabilities measured at fair value on a recurring basis (Cont’d)
There were no changes in the valuation technique for the fair value of the Group’s financialinstruments in the current year.
| The changes in Level 3 financial assets are analysed below: |
| Financial assets held for trading, investments in other equity instruments and other non-current financial assets | ||||
| 1 January 2021 | 3,407,500 | |||
| Increase | 2,492,898 | |||
| Decrease | (869,794) | |||
| Transfer to Level 3 | 28,666 | |||
| Total gains of current period | ||||
| Investment income recognised in the income statement | 943,969 | |||
| Gains recognised in other comprehensive income | (44,619) | |||
| 31 December 2021 | 5,958,620 |
| Financial assets held for trading, investments in other equity instruments and other non-current financial assets | ||||
| 1 January 2020 | 1,750,107 | |||
| Increase | 1,872,884 | |||
| Decrease | (63,570) | |||
| Transfer out of Level 3 | (226,060) | |||
| Total gains of current period | ||||
| Investment income recognised in the income statement | 181,583 | |||
| Gains recognised in other comprehensive income | (107,444) | |||
| 31 December 2020 | 3,407,500 |
(a) The fair value of this part of other non-current financial assets is measured using discounted
cash flows approach. The judgement of Level 3 of the fair value hierarchy is based on themateriality of unobservable inputs towards calculation of whole fair value. Significantunobservable inputs mainly include the financial data of targeted company and risk adjusteddiscount rates.
Assets and liabilities subject to Level 2 fair value measurement are mainly structuraldeposits, receivables financing and forward exchange contracts and are evaluated bymarket approach and income approach.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 345 -
16 Fair value estimates (Cont'd)
(2) Assets and liabilities not measured at fair value but disclosed
The Group's financial assets and financial liabilities measured at amortised cost mainlyinclude: cash at bank and on hand, deposits with the Central Bank, deposits with banks andother financial institutions, notes receivable, accounts receivable, contract assets, loans andadvances, other receivables, lease receivables, current portion of non-current assets, othercurrent assets (excluding those mentioned in Note 16(1)), notes payable, accounts payable,contract liabilities, short-term borrowings, lease liabilities, long-term borrowings, currentportion of non-current liabilities, customer deposits and deposits from banks and otherfinancial institutions, other payables, other current liabilities, etc.
Carrying amounts of the Group’s financial assets and financial liabilities measured atamortised cost as at 31 December 2021 and 31 December 2020 approximated to their fairvalue.
17 Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continueas a going concern in order to provide returns for shareholders and benefits for otherstakeholders, and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount ofdividends paid to shareholders, refund capital to shareholders, issue new shares or sellassets to reduce debts.
The Group is not subject to external mandatory capital requirements, and monitors capitalstructure on the basis of gearing ratio (total liabilities divide total assets).
As at 31 December 2021 and 31 December 2020, the Group's gearing ratio was as follows:
| 31 December 2021 | 31 December 2020 | |||
| Total liabilities | 253,121,028 | 236,145,503 | ||
| Total assets | 387,946,104 | 360,382,603 | ||
| Gearing ratio | 65.25% | 65.53% |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 346 -
18 Notes to the Company’s financial statements
(1) Other receivables
| 31 December 2021 | 31 December 2020 | |||
| Other receivables | 31,465,557 | 28,332,268 | ||
| Less: Provision for bad debts | (17,708) | (13,598) | ||
| 31,447,849 | 28,318,670 | |||
(a) Other receivables are analysed by ageing as follows:
| 31 December 2021 | 31 December 2020 | |||
| Within 1 year | 31,461,940 | 28,205,960 | ||
| 1 to 2 years | 1,708 | 125,127 | ||
| Over 2 years | 1,909 | 1,181 | ||
| 31,465,557 | 28,332,268 | |||
(b) Provision for losses and changes in book balance statements
| Stage 1 | Stage 3 | ||||||
| 12-month ECL (Grouping) | 12-month ECL (Individual) | Lifetime ECL (Credit impaired) | Sub-total | ||||
| Book balance | Provision for bad debts | Book balance(i) | Provision for bad debts | Book balance | Provision for bad debts | Provision for bad debts | |
| 31 December 2020 | 423,516 | 13,540 | 27,908,694 | - | 58 | 58 | 13,598 |
| Transfer to Stage 3 in the current year | (123,583) | (12,358) | - | - | 123,583 | 12,358 | - |
| Net increase/(decrease) in the current year | 31,015,301 | 16,526 | (27,758,371) | - | (123,641) | (12,416) | 4,110 |
| Including: Written-off in the current year | - | - | - | - | (123,641) | (123,641) | (123,641) |
| Derecognition | - | - | - | - | - | - | - |
| 31 December 2021 | 31,315,234 | 17,708 | 150,323 | - | - | - | 17,708 |
(i) In the current year, the Company changed the provision for bad debts of other receivables
of RMB 27,758,371,000 from individual basis to collective basis.
(ii) As at 31 December 2021 and 31 December 2020, the Company did not have other
receivables in Stage 2.
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 347 -
18 Notes to the Company’s financial statements (Cont'd)
(1) Other receivables (Cont’d)
(c) Provision for bad debts
As at 31 December 2021 and 31 December 2020, other receivables of the Company inStage 1 and Stage 3 were analysed as follows:
(i) As at 31 December 2021, other receivables for which the related provision for bad debts
was provided on the individual basis were analysed as follows:
| Book balance | 12-month ECL rate | Provision for bad debts | Reason | ||||
| Stage 1 | 150,323 | 0% | - | Relatively low expected loss risk |
As at 31 December 2020, other receivables for which the related provision for bad debtswas provided on the individual basis were analysed as follows:
| Book balance | 12-month ECL rate | Provision for bad debts | Reason | ||||
| Stage 1 | 27,908,694 | 0% | - | Relatively low expected loss risk |
| Book balance | Lifetime ECL rate | Provision for bad debts | Reason | ||||
| Stage 3 | 58 | 100.00% | (58) | The debtor encountered financial distress, etc. |
(ii) As at 31 December 2021 and 31 December 2020, other receivables of which provision for
bad debts was calculated on grouping basis were all in Stage 1, which was analysed asfollows:
| 31 December 2021 | 31 December 2020 | ||||||||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||||||||
| Amount | Amount | Provision ratio | Amount | Amount | Provision ratio | ||||||
| Security deposit/ guarantee payables grouping | 31,315,234 | (17,708) | 0.06% | 423,516 | (13,540) | 3.20% | |||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 348 -
18 Notes to the Company’s financial statements (Cont'd)
(1) Other receivables (Cont’d)
(d) As at 31 December 2021, the five largest other receivables aggregated by debtors were
analysed as follows:
| Nature | Balance | Ageing | % of total balance | Provision for bad debts | ||
| Company A | Current accounts | 27,310,000 | Within 1 year | 86.79% | (15,116) | |
| Company B | Current accounts | 1,442,999 | Within 1 year | 4.59% | (799) | |
| Company C | Current accounts | 1,058,011 | Within 1 year | 3.36% | (586) | |
| Company D | Current accounts | 451,072 | Within 1 year | 1.43% | (250) | |
| Company E | Current accounts | 225,000 | Within 1 year | 0.72% | (125) | |
| 30,487,082 | 96.89% | (16,876) |
(2) Long-term equity investments
Long-term equity investments are classified as follows:
| 31 December 2021 | 31 December 2020 | |||
| Subsidiaries (a) | 64,376,850 | 53,320,578 | ||
| Associates (b) | 2,428,841 | 1,670,583 | ||
| 66,805,691 | 54,991,161 | |||
| Less: Provision for impairment | - | - | ||
| 66,805,691 | 54,991,161 |
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 349 -
18 Notes to the Company’s financial statements (Cont'd)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries
| Movements in the current year | |||||||||||||
| 31 December 2020 | Increase in investment | Decrease in investment | Provision for impairment | Others | 31 December 2021 | Provision for impairment Ending balance | Cash dividends attributable to the parent company declared in the current year | ||||||
| Wuxi Little Swan Electric Co., Ltd. | 20,194,240 | - | - | - | 72,344 | 20,266,584 | - | 1,120,685 | |||||
| Guangdong Midea Electric Co., Ltd. | 5,000,000 | - | - | - | - | 5,000,000 | - | - | |||||
| Midea Group Finance Co., Ltd. | 3,360,577 | - | - | - | 1,279 | 3,361,856 | - | - | |||||
| Foshan Shunde Midea Household Appliances Industry Co., Ltd. | 2,949,000 | 3,000,000 | - | - | - | 5,949,000 | - | - | |||||
| Guangdong Midea Microwave Oven Manufacturing Co., Ltd. | 1,880,041 | - | - | - | - | 1,880,041 | - | - | |||||
| GD Midea Air-Conditioning Equipment Co., Ltd. | 1,792,170 | - | - | - | 114,350 | 1,906,520 | - | 322,962 | |||||
| Guangdong Midea Consumer Electric Manufacturing Co., Ltd. | 1,146,142 | - | - | - | 25,307 | 1,171,449 | - | - | |||||
| Hefei Midea Heating & Ventilation Equipment Co., Ltd. | 1,076,253 | - | - | - | 3,796 | 1,080,049 | - | 1,501,888 | |||||
| Guangdong Midea Intelligent Technologies Co., Ltd. | 1,053,484 | - | - | - | 5,967 | 1,059,451 | - | - | |||||
| Midea Group (Shanghai) Co. Ltd. | 903,368 | - | - | - | 9,217 | 912,585 | - | - | |||||
| Hubei Midea Refrigerator Co., Ltd. | 855,003 | - | - | - | 19,837 | 874,840 | - | 642,040 | |||||
| Anhui Meizhi Precision Manufacturing Co., Ltd. | 827,603 | - | - | - | 4,095 | 831,698 | - | 974,185 | |||||
| GD Midea Heating & Ventilating Equipment Co., Ltd. | 780,128 | - | - | - | 70,620 | 850,748 | - | 529,444 | |||||
| Wuhu Maty Air-Conditioning Equipment Co., Ltd. | 764,440 | - | - | - | 8,228 | 772,668 | - | 1,522,615 | |||||
| Annto Logistics Technology Co., Ltd. | 742,684 | - | - | - | - | 742,684 | - | - | |||||
| Hefei Midea Refrigerator Co., Ltd. | 532,048 | - | - | - | 19,838 | 551,886 | - | - | |||||
| Ningbo Midea United Materials Supply Co., Ltd. | 497,867 | - | - | - | 3,177 | 501,044 | - | 662,907 | |||||
| GD Midea Group Wuhu Air-Conditioning Equipment Co., Ltd. | 352,061 | 129,708 | - | - | - | 481,769 | - | - | |||||
| Hefei Hualing Co., Ltd. | 265,630 | - | - | - | 47,582 | 313,212 | - | - | |||||
| Midea International Corporation Company Limited | 176,974 | - | - | - | - | 176,974 | - | - | |||||
| Wuhu Midea Kitchen & Bath Appliances Mfg. Co., Ltd. | 172,612 | - | - | - | 20,977 | 193,589 | - | 830,542 | |||||
| Midea Group Wuhan Refrigeration Equipment Co., Ltd. | 110,327 | - | - | - | 5,900 | 116,227 | - | 255,963 | |||||
| Chongqing Midea Air-Conditioning Equipment Co., Ltd. | 83,953 | - | - | - | 4,443 | 88,396 | - | 723,803 | |||||
| Zhejiang Meizhi Compressor Co., Ltd. | 66,280 | - | - | - | 273 | 66,553 | - | 832,515 | |||||
| Wuhu Midea Life Appliances Mfg Co., Ltd. | 56,223 | - | - | - | 321 | 56,544 | - | - | |||||
| Wandong Medical | - | 2,297,093 | - | - | - | 2,297,093 | - | 20,454 | |||||
| Midea Innovation Investment Co., Ltd. | 35,000 | 2,100,000 | - | - | - | 2,135,000 | - | - | |||||
| Hainan Midea Building Technology Co., Ltd. | - | 921,500 | - | - | - | 921,500 | - | - | |||||
| Guangdong Midea Electromechanical Technology Co., Ltd. | - | 500,000 | - | - | - | 500,000 | - | - | |||||
| Guangdong Midea Commercial Air-Conditioning Equipment Co., Ltd. | 569,430 | 200,000 | - | - | - | 769,430 | - | - | |||||
| Others | 7,077,040 | 805,010 | (15,935) | - | 681,345 | 8,547,460 | - | 1,348,470 | |||||
| 53,320,578 | 9,953,311 | (15,935) | - | 1,118,896 | 64,376,850 | - | 11,288,473 | ||||||
MIDEA GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
- 350 -
18 Notes to the Company’s financial statements (Cont'd)
(2) Long-term equity investments (Cont’d)
(b) Associates
Investment in associates mainly refers to the investments in Guangdong Shunde RuralCommercial Bank Co., Ltd. and Hefei Royalstar Motor Co., Ltd. and other enterprises by theCompany.
(3) Operating revenue
Operating revenue mainly comprises other operating revenue including the trademarkroyalty income, rental income, management fee income, etc. obtained by the Company fromthe subsidiaries.
(4) Investment income
| 2021 | 2020 | |||
| Income from long-term equity investments under cost method | 11,288,473 | 11,355,426 | ||
| Investment income from associates | 265,491 | 216,318 | ||
| Investment income from holding of financial assets held for trading | 292,890 | 1,063,774 | ||
| Others | 615,249 | (57,063) | ||
| 12,462,103 | 12,578,455 |
There is no significant restriction on repatriation of the Company's investment income.
MIDEA GROUP CO., LTD.SUPPLEMENTARY INFORMATION(All amounts in RMB’000 Yuan unless otherwise stated)[English translation for reference only]
-351 -
1 Details of non-recurring profit or loss
| 2021 | 2020 |
Gains or losses on disposal of non-currentassets
| Gains or losses on disposal of non-current assets | 77,527 | (52,424) | ||
| Except for the effective hedging activities related to the Group’s ordinary activities, gains or losses on changes in fair value arising from financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities, other non-current financial assets, and investment income from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities, other non-current financial assets. | 995,824 | 2,204,165 | ||
| Others (mainly including government grants, compensation income, penalty income and other non-operating income and expenses) | 2,352,849 | 1,378,105 | ||
| 3,426,200 | 3,529,846 | |||
| Less: Effect of income tax | (668,578) | (765,871) | ||
| Effect of minority interests (after tax) | (113,058) | (155,659) | ||
| 2,644,564 | 2,608,316 |
Basis of preparation of details of non-recurring profit or loss:
Under the requirements of the Explanatory Announcement No. 1 on Information Disclosureby Companies Offering Securities to the Public – Non-recurring Profit or Loss [2008] fromCSRC, non-recurring profit or loss refers to that arises from transactions and events that arenot directly relevant to ordinary activities, or that is relevant to ordinary activities, but isextraordinary and not expected to recur frequently that would have an influence on users offinancial statements making economic decisions on the financial performance andprofitability of an enterprise.2 Return on net assets and earnings per share
The Group's return on net asset and earnings per share calculated pursuant to theCompilation Rules for Information Disclosure of Companies Offering Securities to the PublicNo. 9 - Calculation and Disclosure of Return on Net Asset and Earnings per Share (revisedin 2010) issued by CSRC and relevant requirements of accounting standards are as follows:
| Earnings per share (in RMB Yuan) | ||||||||||
| Weighted average return on net asset (%) | Basic earnings per share | Diluted earnings per share | ||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||
Net profit attributableto shareholders ofthe Company
| Net profit attributable to shareholders of the Company | 24.09% | 24.95% | 4.17 | 3.93 | 4.14 | 3.90 | |||||
| Net profit attributable to shareholders of the Company net of non-recurring profit or loss | 21.86% | 22.56% | 3.78 | 3.55 | 3.75 | 3.53 |
3.DifferencesinAccountingDataunderDomesticandOverseasAccountingStandards
(1)DifferencesinthenetprofitandnetassetsdisclosedinthefinancialreportspreparedunderChinaAccountingStandards(CAS)andInternationalFinancialReportingStandards(IFRS)
□Applicable√N/A
(2)DifferencesinthenetprofitandnetassetsdisclosedinthefinancialreportspreparedunderCASandforeignaccountingstandards
□Applicable√N/A
(3)Reasonsforthedifferences.Whereanyreconciliationismadetoanydatathathavebeenauditedbyanoverseasauditor,thenameoftheoverseasauditorshallbeprovided.
MideaGroupCo.,Ltd.LegalRepresentative:FangHongbo
30April2022